Callaway 2015 Annual Report Download - page 89

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F-19
In connection with the elimination of the convertible notes in 2015, the Company accelerated the amortization of
transaction fees, which resulted in charges of $2,042,000 during 2015. There were no transaction fees remaining to be amortized
at December 31, 2015. Unamortized transactions fees as of December 31, 2014 were $2,358,000, of which $505,000 was
included in other current assets and $1,853,000 was included in other long-term assets, respectively, in the accompanying
consolidated financial statements.
The net carrying amount of the convertible notes as of December 31, 2014 was $108,574,000, and the unamortized
discount was $3,926,000. Total interest and amortization expense recognized during the years ended December 31, 2015 and
2014 was $3,158,000 and $4,957,000, respectively.
Note 4. Preferred Stock
In August 2013, the Company exchanged 233,843 shares of its then outstanding 7.50% Series B Cumulative Perpetual
Convertible Preferred Stock (the “Series B Preferred Stock”) for 3,316,922 shares of the Company's common stock at the
stated conversion rate of 14.1844 plus an additional 75,342 common shares as an inducement. The Company also paid the
exchanging holders cash dividends through December 15, 2013 on their shares of Series B Preferred Stock surrendered in the
exchange. During the fourth quarter of 2013, the Company issued a notice of redemption and holders of 183,496 shares of
Series B Preferred Stock converted their holdings into 2,602,770 shares of the Company's common stock at the stated conversion
rate of 14.1844. The Company redeemed the remaining 300 shares of Series B Preferred Stock for $30,000.
In November 2014, the Company eliminated the Series B Preferred Stock and restored their status to undesignated shares
of preferred stock. As of December 31, 2015 and 2014, there were no outstanding shares of the preferred stock.
Note 5. Earnings (Loss) per Common Share
Basic earnings per common share is computed by dividing net income (loss) by the weighted-average number of common
shares outstanding for the period.
Diluted earnings per common share reflects the potential dilution that could occur if convertible securities, or other
contracts to issue common stock, were exercised or converted into common stock. Dilutive securities are included in the
calculation of diluted earnings per common share using the treasury stock method and the if-converted method in accordance
with ASC Topic 260, “Earnings per Share.” Dilutive securities include the common stock equivalents of preferred stock,
convertible notes, options granted pursuant to the Company’s stock option plans and outstanding restricted stock units and
performance share units granted to employees and non-employee directors (see Note 13). There were no outstanding shares
of the preferred stock at December 31, 2015 and 2014 (see Note 4), and no outstanding convertible notes at December 31,
2015.
Weighted-average common shares outstanding—diluted is the same as weighted-average common shares outstanding
—basic in periods when a net loss is reported or in periods when diluted earnings per share is higher than basic earnings per
share.