Callaway 2012 Annual Report Download - page 115
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the exposures discussed above were approximately $137,125,000, $165,533,000 and $314,190,000, respectively.
The Company estimates the fair values of foreign currency exchange contracts based on pricing models using
current market rates, and records all derivatives on the balance sheet at fair value with changes in fair value
recorded in the statement of operations.
The following table summarizes the fair value of derivative instruments by contract type as well as the
location of the asset and/or liability on the consolidated balance sheets at December 31, 2012 and 2011 (in
thousands):
Asset Derivatives
December 31, 2012 December 31, 2011
Derivatives not designated as hedging
instruments Balance Sheet Location Fair Value Balance Sheet Location Fair Value
Foreign currency exchange contracts ......... Other current assets $5,011 Other current assets $2,514
Liability Derivatives
December 31, 2012 December 31, 2011
Derivatives not designated as hedging
instruments Balance Sheet Location
Fair
Value Balance Sheet Location
Fair
Value
Foreign currency exchange contracts ......... Accounts payable and
accrued expenses $1,046
Accounts payable and
accrued expenses $3,746
The following table summarizes the location of gains and losses on the consolidated statements of
operations that were recognized during the years ended December 31, 2012, 2011 and 2010, respectively, in
addition to the derivative contract type (in thousands):
Amount of Gain / (Loss)
Recognized in Income on
Derivative Instruments
Year Ended December 31,
Derivatives not designated as hedging
instruments
Location of gain (loss) recognized in income on
derivative instruments 2012 2011 2010
Foreign currency exchange contracts . . Other income (expense), net $6,591 $(8,861) $(18,600)
The net realized and unrealized contractual net gains and (losses) noted in the table above for the years
ended December 31, 2012, 2011 and 2010 were used by the Company to offset actual foreign currency
transactional net gains associated with assets and liabilities denominated in foreign currencies as well as net gains
associated with the translation of foreign currencies in operating results.
Note 19. Segment Information
The Company’s operating segments are organized on the basis of products and include golf clubs and golf
balls. During the first quarter of 2012, the Company completed the sale of certain assets related to the Top-Flite
brand as well as the sale of the Ben Hogan brand (see Note 8). Prior to the first quarter of 2012, the golf clubs
segment consisted primarily of Callaway Golf and Top-Flite woods, hybrids, irons, wedges and putters as well as
Odyssey putters, pre-owned clubs, GPS devices and rangefinders, other golf-related accessories and royalties
from licensing of the Company’s trademarks and service marks. Prior to the first quarter of 2012, the golf balls
segment consisted primarily of Callaway Golf and Top-Flite golf balls that are designed, manufactured and sold
by the Company. There are no significant intersegment transactions.
F-39