Callaway 2011 Annual Report Download - page 39

Download and view the complete annual report

Please find page 39 of the 2011 Callaway annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 118

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118

December 31,
2011(1) 2010(9) 2009(6),(9) 2008(8),(9) 2007(9)
(In thousands)
Balance Sheet Data:
Cash and cash equivalents ...................... $ 43,023 $ 55,043 $ 78,314 $ 38,337 $ 49,875
Working capital .............................. $251,545 $368,563 $360,654 $235,713 $272,154
Total assets .................................. $727,112 $876,012 $866,963 $846,371 $829,111
Long-term liabilities ........................... $ 46,514 $ 13,967 $ 14,594 $ 21,559 $ 44,322
Total Callaway Golf Company shareholders’
equity .................................... $509,956 $684,267 $698,291 $569,188 $559,263
(1) The Company’s provision for income taxes for the year ended December 31, 2011 includes $52.5 million of
tax expense in order to establish a valuation allowance against its U.S. deferred tax assets and $21.6 million
related to the recognition of certain prepaid tax expenses on intercompany profits. The reduction of deferred
tax assets had a corresponding decrease in working capital and total assets, as well as an increase in long-
term liabilities. See Note 16 “Income Taxes” to the Notes to Consolidated Financial Statements in this Form
10-K.
(2) The Company has been actively implementing multiple phases of the gross margin improvement initiatives
that were announced in 2006. As such, the Company’s operating statements for the years ended
December 31, 2011, 2010, 2009, 2008 and 2007 include pre-tax charges of $24.7 million, $14.8 million,
$6.2 million, $12.7 million and $8.9 million, respectively, in connection with these initiatives. See Note 3
“Restructuring Initiatives” to the Notes to Consolidated Financial Statements in this Form 10-K.
(3) The Company’s operating statement for the year ended December 31, 2011 includes pre-tax charges of
$16.3 million in connection with the Reorganization and Reinvestment Initiatives announced in June 2011.
See Note 3 “Restructuring Initiatives” to the Notes to Consolidated Financial Statements in this Form 10-K.
For the years ended December 31, 2010 and 2009, the Company recognized pre-tax charges of $4.0 million
and $5.2 million, respectively, in connection with workforce reductions announced in the fourth quarter in
2010 and April 2009.
(4) In 2011 and 2010, the Company recognized a pre-tax impairment charge of $5.4 million and $7.5 million,
respectively, in connection with certain trademarks and trade names. Additionally, in 2011, the Company
recognized a pre-tax impairment charge of $1.1 million in connection with the write-off of goodwill. For
further discussion, see Note 9 “Goodwill and Intangible Assets” to the Notes to Consolidated Financial
Statements in this Form 10-K.
(5) In March 2011, the Company completed the sale of three of its buildings located in Carlsbad, California. In
connection with this sale, the Company recognized a pre-tax gain of $6.2 million. See Note 7 “Sale of
Buildings” to the Notes to Consolidated Financial Statements in this Form 10-K.
(6) On June 15, 2009, the Company sold 1.4 million shares of its 7.50% Series B Cumulative Perpetual
Convertible Preferred Stock, $0.01 par value (“preferred stock”). As a result, total shareholders’ equity as of
December 31, 2009, 2010 and 2011 includes net proceeds of $134.0 million in connection with the issuance
of preferred stock. For further discussion, see Note 4 “Preferred Stock Offering” to the Notes to
Consolidated Financial Statements in this Form 10-K.
(7) The Company’s financial condition as of December 31, 2008, 2009, 2010 and 2011 includes certain assets
and liabilities that were acquired in the uPlay, LLC asset acquisition on December 31, 2008. The
Company’s operating statements for the years ended December 31, 2009, 2010 and 2011 include the results
of operations of uPlay, LLC.
(8) In the fourth quarter of 2008, the Company reversed a $19.9 million energy derivative valuation account.
(9) Working capital, total assets and total Callaway Golf Company shareholders’ equity for these periods have
been corrected from the amounts previously reported. This correction resulted in a $0.9 million decrease to
short-term net deferred tax assets, an $8.1 million decrease to long-term net deferred tax assets and a $9.0
million decrease to shareholders’ equity. See Note 16 “Income Taxes” to the Notes to Consolidated
Financial Statements in this Form 10-K.
25