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F-6
CALLAWAY GOLF COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Year Ended December 31,
2013 2012 2011
Cash flows from operating activities:
Net loss ........................................................................................................... $ (18,921) $ (122,946) $ (171,820)
Adjustments to reconcile net loss to net cash (used in) provided by
Depreciation and amortization ................................................................ 25,543 34,411 38,636
Impairment charges ................................................................................. — 21,933 6,533
Deferred taxes ......................................................................................... (2,309) (1,925) 55,930
Non-cash share-based compensation ...................................................... 3,533 3,142 9,570
Loss/(gain) on disposal of long-lived assets and deferred gain 2,242 (1,261) (7,491)
Gain on sale of intangible assets ............................................................. — (6,602) —
Discount amortization on convertible notes ............................................ 702 235 —
Changes in assets and liabilities:
Accounts receivable, net ......................................................................... (6,690) 23,701 28,100
Inventories .............................................................................................. (60,966) 20,216 36,460
Other assets ............................................................................................. (190) 1,044 20,599
Accounts payable and accrued expenses ................................................ 34,663 1,042 (12,613)
Accrued employee compensation and benefits ....................................... 11,523 (4,057) (4,187)
Income taxes receivable and payable ...................................................... 2,761 2,563 7,653
Accrued warranty expense ...................................................................... (1,133) (601) (287)
Other liabilities ....................................................................................... 293 297 3,015
Net cash (used in) provided by operating activities ........................................ (8,949) (28,808) 10,098
Cash flows from investing activities:
Capital expenditures ....................................................................................... (13,038) (18,403) (28,931)
Proceeds from sale of intangible assets .......................................................... — 26,861 —
Proceeds from sale of property, plant and equipment..................................... 4,148 355 19,371
Investment in golf-related ventures ................................................................ (13,637) (3,268) —
Net cash (used in) provided by investing activities ........................................ (22,527) 5,545 (9,560)
Cash flows from financing activities:
Proceeds from asset-based credit facility ....................................................... 25,660 — —
Proceeds from issuance of convertible notes .................................................. — 46,819 —
Debt issuance costs ........................................................................................ — (3,534) (2,467)
Issuance of common stock ............................................................................. — — 2,195
Exercise of stock options ................................................................................ 1,652 19 —
Equity issuance costs ...................................................................................... (341) — —
Dividends paid, net ......................................................................................... (5,599) (11,019) (13,093)
Other financing activities ............................................................................... (32) (159) 80
Net cash provided by (used in) financing activities ........................................ 21,340 32,126 (13,285)
Effect of exchange rate changes on cash and cash equivalents .............................. (5,074) 117 727
Net (decrease) increase in cash and cash equivalents ............................................ (15,210) 8,980 (12,020)
Cash and cash equivalents at beginning of year ..................................................... 52,003 43,023 55,043
Cash and cash equivalents at end of year ............................................................... $ 36,793 $ 52,003 $ 43,023
Supplemental disclosures:
Cash paid for interest and fees ....................................................................... $ (6,741) $ (7,544) $ (3,744)
Cash (paid) received for income taxes, net ..................................................... $ (4,986) $ (4,234) $ 3,473
Noncash investing and financing activities:
Dividends payable .......................................................................................... $ — $ 131 $ 438
Issuance of common stock in exchange for preferred stock ........................... $ 42,278 $ — $ —
Issuance of convertible notes in exchange for preferred stock ....................... $ — $ 60,078 $ —
Issuance of treasury stock from the settlement of compensatory stock $ 1,649 $ 3,735 $ 5,026
Acquisition of treasury stock for minimum statutory withholding taxes........ $ (364) $ (783) $ (1,587)
Accrued capital expenditures at period end .................................................... $ 1,467 $ 92 $ 1,888
The accompanying notes are an integral part of these consolidated financial statements.