Callaway 2013 Annual Report Download - page 37

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Statements in this Form 10-K). In connection with the convertible notes, the Company recognized $4.9 million and
$1.7 million in interest expense for the years ended December 31, 2013 and 2012, respectively.
(2) The Company’s operating statement for the years ended December 31, 2013 and 2012 include pre-tax charges of
$16.6 million and $54.1 million, respectively, in connection with the Cost Reduction Initiatives. As a result of these
initiatives, in 2012, the Company recorded related decreases in working capital and total assets from the impairment
of certain intangible assets including goodwill, as well as the write-off of certain long-lived assets and inventory.
See Note 3 “Restructuring Initiatives,” Note 8 “Goodwill and Intangible Assets,” and Note 7 “Sale of Buildings”
to the Notes to Consolidated Financial Statements in this Form 10-K.
(3) During the first quarter of 2012, in an effort to simplify the Company’s operations and increase focus on the
Company’s core Callaway and Odyssey business, the Company sold certain assets related to the Top-Flite and Ben
Hogan brands, including trademarks, service marks and certain other intellectual property for net cash proceeds of
$26.9 million. The sale of these two brands resulted in a pre-tax net gain of $6.6 million. See Note 8 “Goodwill and
Intangible Assets” to the Notes to Consolidated Financial Statements in this Form 10-K.
(4) The Company’s operating statements for the years ended December 31, 2012 and 2011 include pre-tax charges of
$1.0 million and $16.3 million, respectively, in connection with workforce reductions related to 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. The operating statements for the years ended December 31,
2010 and 2009, include pre-tax charges of $4.0 million and $5.2 million, respectively, in connection with certain
workforce reductions announced in 2010 and 2009.
(5) 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
12 “Income Taxes” to the Notes to Consolidated Financial Statements in this Form 10-K.
(6) In connection with the Global Operations Strategy Initiatives that were announced in 2010, the Company’s operating
statements for the years ended December 31, 2011 and 2010 include pre-tax charges of $24.7 million and $14.8
million, respectively, related to these initiatives. See Note 3 “Restructuring Initiatives” to the Notes to Consolidated
Financial Statements in this Form 10-K. The Company's operating statement for 2009 includes charges of $6.2
million related to these initiatives.
(7) In 2011 and 2010, the Company recognized pre-tax impairment charges of $5.4 million and $7.5 million, respectively,
in connection with the write-down of 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 of charges recognized in 2011, see Note 8 “Goodwill and Intangible Assets” to the Notes to Consolidated
Financial Statements in this Form 10-K.
(8) 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.
(9) 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
includes net proceeds of $134.0 million in connection with the issuance of preferred stock. For further discussion,
see Note 5 “Preferred Stock” to the Notes to Consolidated Financial Statements in this Form 10-K.