Callaway 2011 Annual Report Download - page 48

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Net loss for the year ended December 31, 2011 increased to $171.8 million compared to $18.8 million in the
comparable period of 2010. Diluted loss per share increased to $2.82 in 2011 compared to $0.46 in 2010. The
Company’s net loss for the years ended December 31, 2011 and 2010 include the following charges:
2011 2010
Pre-tax Global Operation Strategy charges ......................................... $ (24.7) $(14.8)
Pre-tax impairment charges ..................................................... (6.5) (7.5)
Pre-tax charges related to the Reorganization and Reinvestment Initiatives ................ (16.3) —
Pre-tax gain on sale of buildings ................................................. 6.2 —
Income tax (provision) benefit(1) ................................................. (81.6) 16.8
Total charges ................................................................. $(122.9) $ (5.5)
(1) The Company’s income tax provision for 2011 includes charges of $52.5 million related to the
establishment of 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. See Note 16 “Income Taxes” to the
Notes to Consolidated Financial Statements included in this Form 10-K.
Golf Clubs and Golf Balls Segments Results for the Years Ended December 31, 2011 and 2010
Golf Clubs Segment
Net sales information for the golf clubs segment by product category is summarized as follows (dollars in
millions):
Years Ended
December 31, Decline
2011 2010(1) Dollars Percent
Net sales:
Woods .................................................... $212.9 $225.2 $(12.3) (5)%
Irons ..................................................... 207.8 223.9 (16.1) (7)%
Putters .................................................... 88.8 106.3 (17.5) (16)%
Accessories and other ........................................ 216.6 235.7 (19.1) (8)%
$726.1 $791.1 $(65.0) (8)%
(1) Certain prior period amounts have been reclassified to conform to the current year presentation.
The $12.3 million (5%) decrease in net sales of woods to $212.9 million for the year ended December 31,
2011 was primarily due to a decrease in sales volume partially offset by an increase in average selling prices. The
decrease in sales volume was primarily due to the earlier launch timing of the 2011 Diablo Octane drivers and
fairway woods, which were launched early in the fourth quarter of 2010 compared to the prior year launch of
Diablo Edge drivers and fairway woods during the first quarter of 2010. Additionally sales volumes were
negatively impacted by the natural disasters in Japan, Australia and South East Asia during 2011. The increase in
average selling prices was primarily due to a favorable shift in product mix from sales of moderately priced
drivers and fairway woods in 2010 to sales of more premium drivers in 2011 combined with less closeout activity
during the year ended December 31, 2011 compared to the prior year.
The $16.1 million (7%) decrease in net sales of irons to $207.8 million for the year ended December 31,
2011 was primarily attributable to a decline in sales volume partially offset by an increase in average selling
prices. The decline in sales volume was primarily due to fewer new irons models launched in 2011 compared to
the prior year. Additionally, sales volumes were negatively impacted by the natural disasters in Japan, Australia
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