ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2018

Schedule of fair value of financial instruments using levels of inputs

The following tables summarize our assets and liabilities measured at fair value on a recurring basis using the following levels of inputs as of March 31, 2018 and December 31, 2017 as indicated (in thousands):



p	Fair Value Measurements at March 31, 2018:
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents - Money market mutual funds	$	155,763	$	155,763	$	—	$	—
Trading securities held in a "rabbi trust" (1)	78		78		—		—
Total assets	$	155,841	$	155,841	$	—	$	—
Liabilities:
Deferred compensation accrual "rabbi trust" (2)	$	86	$	86	$	—	$	—
Total liabilities	$	86	$	86	$	—	$	—



	Fair Value Measurements at December 31, 2017:
	Total		Level 1		Level 2		Level 3
Assets:
Cash equivalents - Money market mutual funds	$	25,455	$	25,455	$	—	$	—
Trading securities held in a "rabbi trust" (1)	74		74		—		—
Total assets	$	25,529	$	25,529	$	—	$	—
Liabilities:
Deferred compensation accrual "rabbi trust" (2)	$	92	$	92	$	—	$	—
Total liabilities	$	92	$	92	$	—	$	—

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(1)	— Trading securities held in a rabbi trust are included in Prepaids and other current assets and Other long-term assets, net in the consolidated balance sheets.


(2)	— Non-qualified deferred compensation in a rabbi trust is included in Accrued liabilities and Other long-term liabilities in the consolidated balance sheets.

Schedule of estimated useful lives of the fixed assets



	Life (years)
Building	40
Land improvements	20
Building machinery and equipment	15-20
Furniture and equipment	5-7
Computer hardware	3-4
Computer software	2-4

Schedule of depreciation and amortization expense which is classified within the corresponding operating expense categories on the consolidated statements of income

Depreciation expense is classified within the corresponding operating expense categories on the consolidated statements of operations as follows (in thousands):



	Three months ended March 31,
	2018		2017
Cost of goods sold - direct	$	83	$	83
Technology	5,478		6,685
General and administrative	1,020		930
Total depreciation, including internal-use software and website development	$	6,581	$	7,698

Schedule of intangible assets

Intangible assets, net consist of the following (in thousands):



	March 31, 2018			December 31, 2017
Intangible assets subject to amortization, gross (1)	$	25,181		$	17,779
Less: accumulated amortization of intangible assets subject to amortization	(11,361		)	(10,442		)
Intangible assets subject to amortization, net	13,820			7,337
Intangible assets not subject to amortization	10,833			—
Total intangible assets, net	$	24,653		$	7,337

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(1)	— At March 31, 2018, the weighted average remaining useful life for intangible assets subject to amortization, excluding fully amortized intangible assets, was 6.64 years.

Intangible assets amortization expense

Amortization of intangible assets other than goodwill is classified within the corresponding operating expense categories in the consolidated statements of operations as follows (in thousands):



	Three months ended March 31,
	2018		2017
Technology	$	755	$	905
Sales and marketing	119		20
General and administrative	44		20
Total amortization	$	918	$	945

Schedule of costs of goods sold, including product cost and other costs and fulfillment and related costs

Cost of goods sold, including product cost and other costs and fulfillment and related costs are as follows (in thousands):



	Three months ended March 31,
	2018				2017
Total revenue, net	$	445,331	100	%	$	432,435	100	%
Cost of goods sold
Product costs and other cost of goods sold	333,521		75	%	326,803		76	%
Fulfillment and related costs	17,941		4	%	18,725		4	%
Total cost of goods sold	351,462		79	%	345,528		80	%
Gross profit	$	93,869	21	%	$	86,907	20	%

Schedule of computation of basic and diluted net income per common share

The following table sets forth the computation of basic and diluted net loss per common share for the periods indicated (in thousands, except per share data):



	Three months ended March 31,
	2018			2017
Net loss attributable to stockholders of Overstock.com, Inc.	$	(50,909	)	$	(5,903	)
Less: Preferred stock dividends - declared and accumulated	27			27
Undistributed loss	(50,936		)	(5,930		)
Less: Undistributed loss allocated to participating securities	(1,186		)	(157		)
Net loss attributable to common shares	$	(49,750	)	$	(5,773	)
Net loss per common share—basic:
Net loss attributable to common shares—basic	$	(1.74	)	$	(0.23	)
Weighted average common shares outstanding—basic	28,566			25,290
Effect of dilutive securities:
Stock options and restricted stock awards	—			—
Weighted average common shares outstanding—diluted	28,566			25,290
Net loss attributable to common shares—diluted	$	(1.74	)	$	(0.23	)

Schedule of anti-dilutive securities excluded from the calculation of diluted shares outstanding

The following shares were excluded from the calculation of diluted shares outstanding as their effect would have been anti-dilutive (in thousands):



	Three months ended March 31,
	2018	2017
Stock options and restricted stock units	685	199
Common shares issuable under stock warrant	83	—

- Definition

Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances.

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