Callaway 2014 Annual Report Download - page 89

F-21
of the average market value of the Company's common stock during the period have been excluded from the calculation as
their effect would be antidilutive.
Antidilutive securities excluded from the earnings per share computation are summarized as follows:
• For the year ended December 31, 2014, securities outstanding totaling approximately 16,000,000, including
common shares underlying convertible senior notes of 15,000,000, in addition to anti-dilutive options and restricted
stock.
• For the year ended December 31, 2013, securities outstanding totaling approximately 25,029,000, including
common shares underlying preferred stock of 4,293,000, and common shares underlying convertible senior notes
of 15,000,000, in addition to antidilutive options and restricted stock.
• For the year ended December 31, 2012, securities outstanding totaling approximately 27,844,000, including
common shares underlying preferred stock of 15,124,000, and common shares underlying convertible senior notes
of 5,100,000, in addition to antidilutive options and restricted stock.
Note 7. Sale of Buildings
On February 28, 2013, in connection with the Cost Reduction Initiative, the Company completed the sale of its golf ball
manufacturing facility in Chicopee, Massachusetts for proceeds of $3,496,000, net of closing costs and commissions and
recorded a loss on the sale of $31,000. During the year ended December 31, 2012, the Company had designated this building
as assets available for sale, and recorded a pre-tax charge of $7,939,000 in cost of sales to mark the building down to its
estimated selling price, net of commissions, fees and estimated environmental remediation costs. The Company has leased
back a reduced portion of the square footage that it believes is adequate for its ongoing golf ball operations (see Note 13 for
information on the Company's operating leases). The Company has $263,000 and $785,000 accrued in accounts payable and
accrued expenses as of December 31, 2014 and 2013, respectively, for certain environmental remediation costs related to the
sale of this facility.
In March 2011, the Company sold three of its buildings located in Carlsbad, California, and entered into lease-back
agreements for each building over a period of one to five years. Due to the lease-back arrangement, the Company recorded a
deferred gain of $6,498,000 representing the sum of the net present value of the minimum future lease payments through the
end of each respective lease term. During each of the years ended December 31, 2014 and 2013, the Company recognized
$1,046,000 of this deferred gain in general and administrative expenses, and during the year ended December 31, 2012, the
Company recognized $1,569,000 of this deferred gain in general and administrative expenses. The amortization of the deferred
gain is offset by rent expense over the term of each respective lease.
Note 8. Goodwill and Intangible Assets
In accordance with ASC Topic 350, “Intangibles—Goodwill and Other,” the Company’s goodwill and certain intangible
assets are not amortized, but are subject to an annual impairment test. The following sets forth the intangible assets by major
asset class:
Useful
Life
(Years)
December 31, 2014 December 31, 2013
Gross
Accumulated
Amortization
Net Book
Value Gross
Accumulated
Amortization
Net Book
Value
(In thousands) (In thousands)
Indefinite-lived:
Trade name, trademark and
trade dress and other ........... NA $ 88,590 $ — $ 88,590 $ 88,590 $ — $ 88,590
Amortizing:
Patents .................................... 2-16 31,581 31,338 243 31,581 31,287 294
Developed technology and
other .................................... 1-9 7,961 7,961 — 7,961 7,944 17
Total intangible assets.................... $128,132 $ 39,299 $ 88,833 $128,132 $ 39,231 $ 88,901