Callaway 2009 Annual Report Download - page 106

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of $1,380,000, $7,098,000 and $6,379,000 during 2009, 2008 and 2007, respectively. Additionally, the Company
can make discretionary contributions based on the profitability of the Company. For the years ended
December 31, 2009, 2008 and 2007 there were no discretionary contributions.
The Company also has an unfunded, nonqualified deferred compensation plan that is backed by Company-
owned life insurance policies. As of October 1, 2009, the Company announced the termination of the plan. In
December 2009, a portion of the plan assets were liquidated and distributed to its participants. The remaining
plan assets will be liquidated and distributed in October, 2010. The plan had been offered to its officers, certain
other employees and directors, and allowed participants to defer all or part of their compensation, to be paid to
the participants or their designated beneficiaries upon retirement, death or separation from the Company. At
December 31, 2009, the cash surrender value of the remaining Company-owned insurance related to deferred
compensation was $3,623,000 and was included in other current assets, and the liability for the deferred
compensation was $3,043,000 and was included in accrued employee compensation and benefits. At
December 31, 2008, the cash surrender value of the Company-owned insurance related to deferred compensation
was $7,178,000 and was included in other long-term assets, and the liability for the deferred compensation was
$6,438,000 and was included in other long-term liabilities. For the years ended December 31, 2009 and 2008, the
total participant deferrals were $423,000 and $1,346,000, respectively.
Note 15. Income Taxes
The Company’s income (loss) before income tax provision (benefit) was subject to taxes in the following
jurisdictions for the following periods (in thousands):
Year Ended December 31,
2009 2008 2007
United States ..................................................... $(46,967) $ 76,255 $69,481
Foreign ......................................................... 17,364 25,052 18,794
$(29,603) $101,307 $88,275
The provision (benefit) for income taxes is as follows (in thousands):
Year Ended December 31,
2009 2008 2007
Current tax provision (benefit):
Federal ....................................................... $(23,311) $18,534 $25,127
State ......................................................... 790 1,720 4,061
Foreign ...................................................... 5,329 8,370 2,790
(17,192) 28,624 31,978
Deferred tax expense (benefit):
Federal ....................................................... 4,752 4,216 (2,288)
State ......................................................... (1,655) 1,297 (675)
Foreign ...................................................... (248) 994 4,673
2,849 6,507 1,710
Income tax provision (benefit) ........................................ $(14,343) $35,131 $33,688
During 2009, 2008 and 2007, tax benefits related to the exercise or vesting of stock-based awards were
$1,028,000, $1,379,000 and $6,031,000, respectively. Such benefits were recorded as a reduction of income taxes
payable with a corresponding increase in additional paid-in capital or a decrease to deferred tax assets in
connection with compensation cost previously recognized in income.
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