Overstock.com 2015 Annual Report Download - page 118

A reconciliation of the beginning and ending tax contingencies, excluding interest and penalties, as of December 31, 2015 and 2014 is as follows
(in thousands):






Beginning balance
$ 4,128
$ 2,968
$ 231
Additions for tax positions related to the current year
751
959
2,737
Additions (reductions) for tax positions taken in prior years
(126)
201
—
Ending balance
$ 4,753
$ 4,128
$ 2,968
Accrued interest and penalties on tax contingencies as of December 31, 2015 and 2014 were $236,000 and $184,000, respectively.
We are subject to taxation in the United States and several state and foreign jurisdictions. Tax years beginning in 2011 are subject to examination
by taxing authorities, although net operating loss and credit carryforwards from all years are subject to examinations and adjustments for at least three years
following the year in which the attributes are used. As of December 31, 2015, we were under audit by the Internal Revenue Service for our 2013 federal
income tax return. The IRS has not indicated or communicated any deficiencies. We expect the audit to conclude in 2016.
We operate under an income tax holiday in Ireland, which is effective through December 31, 2015. The impact has been tax savings of
approximately $23,000, $15,000 and $3,000 for December 31, 2015, 2014 and 2013.
We intend to reinvest the earnings of our non-U.S. subsidiaries in those operations. We have begun expansion of operations outside of the U.S. and
have plans for additional expansion for which we have incurred and will continue to incur capital requirements. We have considered ongoing capital
requirements of the parent company in the U.S. As of December 31, 2015, we had not made a provision for U.S. or additional foreign withholding taxes on
approximately $366,000 of indefinitely reinvested foreign earnings. Generally, such amounts become subject to U.S. taxation upon the remittance of
dividends to the U.S. and under certain other circumstances. It is not practicable to estimate the amount of deferred taxes related to investments in these
foreign subsidiaries.

On occasion, Haverford-Valley, L.C. (an entity owned by our Chief Executive Officer) and certain affiliated entities make travel arrangements for our
executives and pay the travel related expenses incurred by our executives on company business. During the years ended December 31, 2015, 2014 and 2013
we reimbursed Haverford-Valley L.C. $423,000, $270,000, and $170,000, respectively, for these expenses.
In June 2015, as part of an initial demonstration of the fintech and crypto software that Medici has developed, our Chief Executive Officer, Dr.
Patrick M. Byrne purchased a $500,000 privately-placed “cryptobond” from us for $500,000 in cash. In November 2015, we redeemed the debt for principal
plus $15,847 of accrued interest. Dr. Byrne waived his right to receive a redemption premium from us. The terms of the bond included a fixed annual interest
rate of 7.0%.

Segment information has been prepared in accordance with ASC Topic 280 . Segments were determined based on how we
manage the business. There were no significant inter-segment sales or transfers during the years ended December 31, 2015, 2014 and 2013.We evaluate the
performance of our segments and allocate resources to them based primarily on gross profit.
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