Callaway 2010 Annual Report Download - page 93

The table below depicts the activity and liability balances recorded as part of this restructuring as well as the
current estimated future charges relating to this restructuring. Amounts payable as of December 31, 2010 were
included within accounts payable and accrued expenses, and accrued employee compensation and benefits on the
Company’s consolidated balance sheet.
Workforce
Reductions
Transition
Costs
Asset
Write-offs Total
(In thousands)
Charges to cost and expense ................................ $5,177 $ 7,861 $ 1,778 $14,816
Non-cash items .......................................... — — (1,778) (1,778)
Cash payments .......................................... (1,909) (7,477) — (9,386)
Restructuring payable balance, December 31, 2010 ............. $3,268 $ 384 $ — $ 3,652
Total future estimated charges as of December 31, 2010 ......... $8,000 $12,000 $ 3,000 $23,000
Golf Ball Manufacturing Consolidation
In connection with the Company’s gross margin improvement initiatives and its actions to improve the
profitability of its golf ball business, the Company has taken actions to consolidate its golf ball operations into
other existing locations. As a result of these initiatives, in May 2008, the Company announced the closure of its
golf ball manufacturing facility in Gloversville, New York. This closure resulted in the recognition of non-cash
charges for the write-down of the manufacturing facility to its fair value and the acceleration of depreciation on
certain golf ball manufacturing equipment, and cash charges related to severance benefits and facility costs. In
the aggregate through December 31, 2010, the Company recorded pre-tax charges of $5,031,000 in connection
with the closure of this facility. The remaining liability as of December 31, 2010, represents estimated costs for
certain ongoing facility costs. In addition, the Company expects to incur additional charges of approximately
$159,000 in 2011, primarily related to ongoing facility costs.
The activity and liability balances recorded as part of the Company’s golf ball manufacturing consolidation
were as follows (in thousands):
Workforce
Reductions
Facility
and Other Total
Charges to cost and expense ......................................... $1,295 $ 2,959 $ 4,254
Non-cash items ................................................... — (1,798) (1,798)
Cash payments .................................................... (1,162) (890) (2,052)
Restructuring payable balance, December 31, 2008 ....................... $ 133 $ 271 $ 404
Charges to cost and expense ......................................... 5 268 273
Cash payments .................................................... (138) (417) (555)
Restructuring payable balance, December 31, 2009 ....................... $ — $ 122 $ 122
Charges to cost and expense ......................................... — 504 504
Non-cash items ................................................... — (390) (390)
Cash payments .................................................... — (120) (120)
Restructuring payable balance, December 31, 2010 ....................... $ — $ 116 $ 116
Note 4. Preferred Stock Offering
On June 15, 2009, the Company sold 1,400,000 shares of its 7.50% Series B Cumulative Perpetual
Convertible Preferred Stock, $0.01 par value (the “preferred stock”). The Company received gross proceeds of
$140,000,000 and incurred costs of $6,085,000, which were recorded as an offset to additional paid in capital in
the consolidated statement of shareholders’ equity. The terms of the preferred stock provide for a liquidation
preference of $100 per share and cumulative dividends from the date of original issue at a rate of 7.50% per
F-15