Callaway 2008 Annual Report Download - page 92

Note 7. Goodwill and Intangible Assets
In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” the Company’s goodwill and
certain intangible assets are not amortized, but are subject to an annual impairment test. The following sets forth
the intangible assets by major asset class:
Useful
Life
(Years)
December 31, 2008 December 31, 2007
Gross
Accumulated
Amortization
Net Book
Value Gross
Accumulated
Amortization
Net Book
Value
(In thousands) (In thousands)
Non-Amortizing:
Trade name, trademark and
trade dress and other ....... NA $121,794 $ — $121,794 $121,794 $ — $121,794
Amortizing:
Patents ................... 2-16 36,459 21,106 15,353 36,459 18,288 18,171
Developed technology and
other ................... 1-9 12,016 2,218 9,798 2,853 1,833 1,020
Total intangible assets ........... $170,269 $23,324 $146,945 $161,106 $20,121 $140,985
The increase in other amortizing intangibles is related to the uPlay acquisition, consummated in December
2008 (see Note 4). Aggregate amortization expense on intangible assets was approximately $3,203,000,
$3,341,000 and $3,301,000 for the years ended December 31, 2008, 2007 and 2006, respectively. Amortization
expense related to intangible assets at December 31, 2008 in each of the next five fiscal years and beyond is
expected to be incurred as follows (in thousands):
2009 ..................................................................... $ 4,772
2010 ..................................................................... 4,632
2011 ..................................................................... 4,381
2012 ..................................................................... 3,952
2013 ..................................................................... 2,998
Thereafter ................................................................. 4,416
$25,151
In accordance with SFAS No. 142, the Company has completed its annual impairment tests and fair value
analysis for goodwill and other non-amortizing intangible assets held throughout the year. There were no
impairments and no loss was recorded during the year ended December 31, 2008. Goodwill additions during the
year ended December 31, 2008 consisted of approximately $361,000 in connection with the uPlay acquisition.
There were no additions to goodwill during the year ended December 31, 2007. In addition, the goodwill
balances held in foreign currencies as of December 31, 2008 and 2007 include an unfavorable foreign currency
translation adjustment of $2,677,000 and favorable foreign currency translation adjustment of $1,227,000,
respectively.
Note 8. Financing Arrangements
The Company’s primary credit facility is a $250,000,000 Line of Credit with a syndicate of eight banks
under the terms of the November 5, 2004 Amended and Restated Credit Agreement (as amended, the “Line of
Credit”). The Line of Credit is not scheduled to expire until February 15, 2012.
The lenders in the syndicate are Bank of America, N.A., Union Bank of California, N.A., Barclays Bank,
PLC, JPMorgan Chase Bank, N.A., US Bank, N.A., Comerica West Incorporation, Fifth Third Bank, and
Citibank, N.A. To date, all of the banks in the syndicate have continued to meet their commitments under the
Line of Credit despite the turmoil in the financial markets. If any of the banks in the syndicate were unable to
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