Callaway 2011 Annual Report Download - page 57

The origination fees incurred in connection with the ABL Facility as of December 31, 2011 totaled $3.2
million, which are included in other assets in the accompanying consolidated balance sheet, and will be
amortized into interest expense over the term of the ABL Facility agreement. Unamortized origination fees were
$2.9 million as of December 31, 2011, of which $0.6 million was included in other current assets and $2.3
million in other long-term assets in the accompanying consolidated financial statements.
Share Repurchases
In November 2007, the Company announced that its Board of Directors authorized it to repurchase shares of
its common stock in the open market or in private transactions, subject to the Company’s assessment of market
conditions and buying opportunities, up to a maximum cost to the Company of $100.0 million, which would
remain in effect until completed or otherwise terminated by the Board of Directors (the “November 2007
repurchase program”). The November 2007 repurchase program supersedes all prior stock repurchase
authorizations.
During 2011, the Company repurchased approximately 227,000 shares of its common stock under the
November 2007 repurchase program at an average cost per share of $6.99 for a total cost of $1.6 million. The
Company acquired these shares to satisfy the Company’s tax withholding obligations in connection with the
vesting and settlement of employee restricted stock unit awards. The Company’s repurchases of shares of
common stock are recorded at cost and result in a reduction of shareholders’ equity. As of December 31, 2011,
the Company remained authorized to repurchase up to an additional $73.6 million of its common stock under this
program.
Other Significant Cash and Contractual Obligations
The following table summarizes certain significant cash obligations as of December 31, 2011 that will affect
the Company’s future liquidity (in millions):
Payments Due By Period
Total
Less than
1 Year 1-3 Years 4-5 Years
More than
5 Years
Unconditional purchase obligations(1) .................. $ 79.0 $47.4 $31.1 $ 0.5 $—
Dividends on convertible preferred stock(2) .............. 4.8 4.8 — (2) —(2) —(2)
Operating leases(3) ................................. 33.1 14.0 11.4 5.8 1.9
Uncertain tax contingencies(4) ........................ 9.9 1.2 1.7 4.0 3.0
Total ............................................ $126.8 $67.4 $44.2 $10.3 $ 4.9
(1) During the normal course of its business, the Company enters into agreements to purchase goods and
services, including purchase commitments for production materials, endorsement agreements with
professional golfers and other endorsers, employment and consulting agreements, and intellectual property
licensing agreements pursuant to which the Company is required to pay royalty fees. It is not possible to
determine the amounts the Company will ultimately be required to pay under these agreements as they are
subject to many variables including performance-based bonuses, reductions in payment obligations if
designated minimum performance criteria are not achieved, and severance arrangements. The amounts listed
approximate minimum purchase obligations, base compensation, and guaranteed minimum royalty
payments the Company is obligated to pay under these agreements. The actual amounts paid under some of
these agreements may be higher or lower than the amounts included. In the aggregate, the actual amount
paid under these obligations is likely to be higher than the amounts listed as a result of the variable nature of
these obligations. The Company also enters into unconditional purchase obligations with various vendors
and suppliers of goods and services in the normal course of operations through purchase orders or other
documentation or that are undocumented except for an invoice. Such unconditional purchase obligations are
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