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Document and Entity Information	9 Months Ended
Document and Entity Information	Sep. 30, 2012 shares
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Trading Symbol	ELY
Entity Registrant Name	CALLAWAY GOLF CO
Entity Central Index Key	0000837465
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding	70,990,660

CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($)
$ in Thousands

Sep. 30, 2012

Dec. 31, 2011

Current assets:

Cash and cash equivalents

$ 59,139

$ 43,023

Accounts receivable, net

143,697

115,673

Inventories

189,066

233,070

Deferred taxes, net

3,970

4,029

Income taxes receivable

3,609

3,654

Assets held for sale

2,396

Other current assets

20,895

19,880

Total current assets

422,772

419,329

Property, plant and equipment, net

94,919

117,147

Intangible assets, net

94,619

121,935

Goodwill

28,853

29,203

Deferred taxes, net

1,457

1,386

Income taxes receivable

2,846

4,027

Other assets

36,472

34,085

Total assets

681,938

727,112

Current liabilities:

Accounts payable and accrued expenses

99,166

129,193

Accrued employee compensation and benefits

21,343

23,785

Accrued warranty expense

8,133

8,140

Deferred taxes

4,108

Income tax liability

3,177

2,558

Total current liabilities

135,927

167,784

Long-term liabilities:

Income taxes payable

6,199

8,115

Deferred taxes, net

29,968

31,429

Convertible debt, net (Note 3)

^[1]

106,925

Long-term other

7,050

6,970

Commitments and contingencies (Note 13)

Shareholders' equity:

Preferred stock, $.01 par value, 3,000,000 shares authorized, 417,639 and 1,400,000 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively

Common stock, $.01 par value, 240,000,000 shares authorized, 72,264,020 and 66,340,695 shares issued at September 30, 2012 and December 31, 2011, respectively

723

663

Additional paid-in capital

203,924

265,067

Retained earnings

186,074

247,941

Accumulated other comprehensive income

17,171

14,071

Less: Common Stock held in treasury, at cost, 1,273,360 shares and 1,453,819 shares at September 30, 2012 and December 31, 2011, respectively

(14,930)

(17,800)

Total Callaway Golf Company shareholders' equity

392,966

509,956

Non-controlling interest in consolidated entity (Note 10)

2,903

2,858

Total shareholders' equity

395,869

512,814

Total liabilities and shareholders' equity

$ 681,938

$ 727,112

[1]	Based on Level 2 secondary market quoted prices.

CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2012	Dec. 31, 2011
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	3,000,000	3,000,000
Preferred stock, shares issued	417,639	1,400,000
Preferred stock, shares outstanding	417,639	1,400,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	240,000,000	240,000,000
Common stock, shares issued	72,264,020	66,340,695
Less: Common Stock held in treasury, shares	1,273,360	1,453,819

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Net sales	$ 147,906	$ 173,243	$ 714,127	$ 732,656
Cost of sales (Note 2)	144,106	125,857	475,303	458,927
Gross profit	3,800	47,386	238,824	273,729
Operating expenses:
Selling expense	60,273	62,273	212,822	211,688
General and administrative expense	18,238	20,775	48,918	67,186
Research and development expense	7,978	8,501	22,381	26,196
Total operating expenses (Note 2)	86,489	91,549	284,121	305,070
Loss from operations	(82,689)	(44,163)	(45,297)	(31,341)
Other expense, net	(3,359)	(3,570)	(4,246)	(8,377)
Loss before income taxes	(86,048)	(47,733)	(49,543)	(39,718)
Provision for income taxes	750	14,854	2,654	69,117
Net loss	(86,798)	(62,587)	(52,197)	(108,835)
Dividends on convertible preferred stock	2,414	2,625	7,664	7,875
Net loss allocable to common shareholders	$ (89,212)	$ (65,212)	$ (59,861)	$ (116,710)
Loss per common share:
Basic	$ (1.33)	$ (1.01)	$ (0.91)	$ (1.81)
Diluted	$ (1.33)	$ (1.01)	$ (0.91)	$ (1.81)
Weighted-average common shares outstanding:
Basic	67,162	64,781	65,740	64,505
Diluted	67,162	64,781	65,740	64,505

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Net loss	$ (86,798)	$ (62,587)	$ (52,197)	$ (108,835)
Other comprehensive income (loss):
Foreign currency translation adjustments	4,168	(6,161)	3,100	(832)
Other comprehensive income (loss):	4,168	(6,161)	3,100	(832)
Comprehensive loss	$ (82,630)	$ (68,748)	$ (49,097)	$ (109,667)

- Definition

The change in equity [net assets] of a business enterprise during a period from transactions and other events and circumstances from non-owner sources which are attributable to the reporting entity. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners, but excludes any and all transactions which are directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent.

+ References + Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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Reference 14: http://www.xbrl.org/2003/role/presentationRef
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Reference 16: http://www.xbrl.org/2003/role/presentationRef
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+ Details

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net loss	$ (52,197)	$ (108,835)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	26,576	28,438
Impairment charges	17,056	5,413
Deferred taxes	(1,397)	51,660
Non-cash share-based compensation	2,482	8,879
Gain and deferred gain amortization on disposal of long-lived assets	(1,521)	(7,196)
Gain on sale of intangible assets	(6,602)
Debt discount amortization	27
Changes in assets and liabilities:
Accounts receivable, net	(27,093)	(4,582)
Inventories	46,984	63,886
Other assets	1,835	12,556
Accounts payable and accrued expenses	(32,310)	(35,332)
Accrued employee compensation and benefits	(3,367)	(630)
Accrued warranty expense	(7)	1,562
Income taxes receivable/payable	120	3,925
Other liabilities	163	2,116
Net cash (used in) provided by operating activities	(29,251)	21,860
Cash flows from investing activities:
Capital expenditures	(16,001)	(21,154)
Proceeds from sale of property, plant and equipment	324	18,287
Proceeds from sale of intangible assets	26,861
Net cash provided by (used in) investing activities	11,184	(2,867)
Cash flows from financing activities:
Proceeds from issuance of convertible notes	46,819
Debt issuance costs	(3,534)
Issuance of common stock		2,198
Dividends paid	(9,526)	(9,819)
Payments on credit facilities, net		(2,467)
Other financing activities	40	(84)
Net cash provided by (used in) financing activities	33,799	(10,172)
Effect of exchange rate changes on cash and cash equivalents	384	431
Net increase in cash and cash equivalents	16,116	9,252
Cash and cash equivalents at beginning of year	43,023	55,043
Cash and cash equivalents at end of period	59,139	64,295
Supplemental disclosures:
Cash paid for income taxes, net	(1,709)	(1,352)
Cash paid for interest and fees	(7,148)	2,753
Noncash investing and financing activities:
Dividends payable	131	438
Issuance of convertible notes in exchange for preferred stock	60,078
Issuance of treasury stock from the settlement of compensatory stock awards	3,641	5,026
Acquisition of treasury stock for minimum statutory withholding taxes	(771)	(1,587)
Purchases of capital unpaid at period end	$ 76	$ 1,636

CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY - 9 months ended Sep. 30, 2012 - USD ($) shares in Thousands, $ in Thousands	Total	Preferred Stock	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income	Treasury Stock	Non-controlling Interest
Beginning Balance (in shares) at Dec. 31, 2011		1,400	66,341				(1,454)
Beginning Balance at Dec. 31, 2011	$ 512,814	$ 14	$ 663	$ 265,067	$ 247,941	$ 14,071	$ (17,800)	$ 2,858
Acquisition of treasury stock for minimum statutory withholding taxes (in shares)							(120)
Acquisition of treasury stock for minimum statutory withholding taxes	(771)						$ (771)
Preferred stock to debt exchange (in shares)		(632)
Preferred stock to debt exchange	(60,078)	$ (6)		(60,072)
Preferred stock to common stock exchange (in shares)		(350)	5,867
Preferred stock to common stock exchange		$ (4)	$ 59	(55)
Compensatory stock and stock options (in shares)			55				301
Compensatory stock and stock options	2,482		$ 1	(1,160)			$ 3,641
Stock dividends (in shares)			1
Stock dividends				144	(144)
Cash dividends	(9,526)				(9,526)
Equity adjustment from foreign currency translation	3,100					3,100
Change in non-controlling interest	(399)							(399)
Net loss (income)	(51,753)				(52,197)			444
Ending Balance (in shares) at Sep. 30, 2012		418	72,264				(1,273)
Ending Balance at Sep. 30, 2012	$ 395,869	$ 4	$ 723	$ 203,924	$ 186,074	$ 17,171	$ (14,930)	$ 2,903

Basis of Presentation

9 Months Ended

Sep. 30, 2012

Basis of Presentation

1. Basis of Presentation

The accompanying unaudited consolidated condensed financial statements have been prepared by Callaway Golf Company (the “Company” or “Callaway Golf”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted. These consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 filed with the SEC. These consolidated condensed financial statements, in the opinion of management, include all adjustments necessary for the fair presentation of the financial position, results of operations and cash flows for the periods and dates presented. Interim operating results are not necessarily indicative of operating results for the full year.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates and assumptions.

Recent Accounting Standards

In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-11, “Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities.” This ASU requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. ASU No. 2011-11 will be applied retrospectively and is effective for annual and interim reporting periods beginning on or after January 1, 2013. The adoption of this ASU is not expected to have a material impact on the Company’s disclosures to the consolidated financial statements.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

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+ Details

Restructuring Initiatives

9 Months Ended

Sep. 30, 2012

Restructuring Initiatives

2. Restructuring Initiatives

Global Operations Strategy

In 2010, the Company began the implementation of its Global Operations Strategy Initiatives (“GOS Initiatives”), which targeted the restructuring and relocation of the Company’s manufacturing and distribution operations. This restructuring, which added speed and flexibility to customer service demands, optimized efficiencies, and facilitated long-term gross margin improvements, included the reorganization of the Company’s manufacturing and distribution centers located in Carlsbad, California, Toronto, Canada, and Chicopee, Massachusetts, the creation of third-party logistics sites in Dallas, Texas and Toronto, Canada, as well as the establishment of a new production facility in Monterrey, Mexico. This restructuring was completed in 2011 and only nominal charges were incurred in 2012. The Company continues to maintain limited manufacturing and distribution facilities in Carlsbad, California and Chicopee, Massachusetts.

During the three and nine months ended September 30, 2011, the Company recorded pre-tax charges of $5,229,000 and $17,571,000, respectively in connection with this restructuring. The majority of these charges were recognized within cost of sales. Costs incurred during the first nine months of 2012 were nominal. See Note 17 for charges absorbed by the Company’s operating segments. In the aggregate through December 31, 2011, the Company recognized total charges of $39,496,000 in connection with the GOS Initiatives.

The charges recognized under this restructuring include non-cash charges for the acceleration of depreciation on certain golf club and golf ball manufacturing equipment and cash charges related to severance benefits and transition costs, which consist primarily of consulting expenses, costs associated with redundancies during the start-up and training phase of the new production facility in Monterrey, Mexico, start-up costs associated with the establishment of third-party logistics sites, travel expenses, and costs associated with the transfer of inventory and equipment.

Reorganization and Reinvestment Initiatives

In June 2011, the Company began the implementation of certain restructuring initiatives (the “Reorganization and Reinvestment Initiatives”) that involved (i) streamlining the Company’s organization to reduce costs, simplifying internal processes, and increasing focus on the Company’s consumers and retail partners, (ii) reorganizing the Company’s organizational structure to place greater emphasis on global brand management and improve the effectiveness of the Company’s key initiatives, and (iii) reinvesting in brand and demand creation initiatives to drive sales growth. The Company’s restructuring plan resulted in annualized pre-tax savings of approximately $50,000,000 of which approximately half of the savings were reinvested into the Callaway and Odyssey brands and demand creation initiatives.

During the quarters ended September 30, 2012 and 2011, the Company recognized total pre-tax charges of $291,000 and $7,395,000, respectively, in connection with these initiatives. Amounts recognized in cost of sales and operating expenses were $177,000 and $114,000, respectively during the third quarter of 2012, and $1,049,000 and $6,346,000, respectively, during the third quarter of 2011.

During the nine months ended September 30, 2012 and 2011, the Company recognized total pre-tax charges of $1,011,000 and $12,557,000, respectively, in connection with these initiatives. Amounts recognized in cost of sales and operating expenses were $473,000 and $538,000, respectively, during the first nine months of 2012, and $1,049,000 and $11,508,000, respectively, during the first nine months of 2011.

The table below depicts the activity and liability balances recorded as part of the GOS Initiatives and the Reorganization and Reinvestment Initiatives as well as the current estimated future charges relating to these initiatives (in thousands). Amounts payable as of September 30, 2012 are included in accrued employee compensation and benefits, and amounts payable at December 31, 2011 are included in accrued employee compensation and benefits and accounts payable and accrued expenses in the accompanying consolidated condensed balance sheets. The majority of the amounts payable as of September 30, 2012 will be paid during the balance of 2012.


	GOS Initiatives						Reorganization and Reinvestment Initiatives			Total
	Workforce Reductions			Transition Costs			Workforce Reductions			Total
Restructuring payable balance, December 31, 2011	$	1,219		$	55		$	5,357		$	6,631
Charges to cost and expense		—			21			442			463
Cash payments		(559	)		(76	)		(3,357	)		(3,992	)

Restructuring payable balance, March 31, 2012	$	660		$	—		$	2,442		$	3,102
Charges to cost and expense		—			—			278			278
Cash payments		(159	)		—			(1,670	)		(1,829	)

Restructuring payable balance, June 30, 2012	$	501		$	—		$	1,050		$	1,551
Charges to cost and expense		—			—			291			291
Cash payments		(385	)		—			(330	)		(715	)

Restructuring payable balance, September 30, 2012	$	116		$	—		$	1,011		$	1,127

Total future estimated charges as of September 30, 2012	$	—		$	—		$	—		$	—

Cost Reduction Initiatives

In July 2012, the Company announced it was undertaking additional cost-reduction initiatives (the “Cost Reduction Initiatives”). These initiatives are designed to streamline and simplify the Company’s organizational structure and change the manner in which the Company approaches and operates its business. The actions include (i) a reduction in workforce that impacts all regions and levels of the organization in addition to other transition costs, which resulted in pre-tax charges of $6,684,000 and $10,238,000 during the three and nine months ended September 30, 2012; (ii) greater focus on the Company’s core product lines including licensing to third parties the rights to develop, manufacture and distribute certain non-core product lines (e.g. apparel and footwear), which resulted in pre-tax charges of $3,575,000 and $4,692,000 in the three and nine months ended September 30, 2012; (iii) transitioning the Company’s integrated device business to a third party based model, which resulted in pre-tax charges of $16,473,000 in both the three and nine months ended September 30, 2012 (see Note 8 and Note 15); and (iv) the reorganization of the Company’s golf ball manufacturing supply chain, including the planned sale and lease-back of a reduced portion of the square footage of the Company’s ball manufacturing facility in Chicopee, Massachusetts (Note 7). Total pre-tax charges related to this reorganization were $8,352,000 in both the three and nine months ended September 30, 2012. These initiatives are estimated to yield approximately $60,000,000 in annualized savings. In connection with these initiatives, the Company expects to incur total pre-tax charges of approximately $55,000,000, of which approximately two-thirds is expected to result in non-cash expenditures. The Company expects to incur these estimated charges over the next twelve months. These estimates are based upon current information and expectations; however, the amount, nature, or timing of these charges could vary as the Company further develops and implements these initiatives.

During the three and nine months ended September 30, 2012, the Company recognized charges of $35,084,000 and $39,755,000, respectively, in connection with the Cost Reduction Initiatives. Amounts recognized in cost of goods sold and operating expenses totaled $27,302,000 and $7,782,000, respectively, during the three months ended September 30, 2012, and $28,263,000 and $11,492,000, respectively, during the nine months ended September 30, 2012. See Note 17 for charges absorbed by the Company’s operating segments.

The table below depicts the total charges recognized in 2012, the liability balances, and the current estimated future charges relating to the Cost Reduction Initiatives (in thousands). Amounts payable as of September 30, 2012 are included in accrued employee compensation and benefits and accounts payable and accrued expenses on the accompanying consolidated condensed balance sheet.


	Cost Reduction Initiatives
	Workforce Reductions			Transition Costs			Asset Write-offs			Total
Charges to cost and expense	$	3,240		$	707		$	724		$	4,671
Non-cash items		(240	)		—			(724	)		(964	)
Cash payments		(542	)		(707	)		—			(1,249	)

Restructuring payable balance, June 30, 2012	$	2,458		$	—		$	—		$	2,458

Charges to cost and expense	$	6,582		$	1,273		$	27,229		$	35,084
Non-cash items		(80	)		(666	)		(27,229	)		(27,975	)
Cash payments		(5,041	)		(329	)		—			(5,370	)

Restructuring payable balance, September 30, 2012	$	3,919		$	278		$	—		$	4,197

Total future estimated charges as of September 30, 2012	$	6,900		$	8,000		$	400		$	15,300

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

+ References + Details

Financing Arrangements

9 Months Ended

Sep. 30, 2012

Financing Arrangements

3. Financing Arrangements

Convertible Senior Notes

On August 29, 2012, the Company issued $112,500,000 of 3.75% Convertible Senior Notes (the “notes”) due August 15, 2019, of which $63,227,000 in aggregate principal amount was exchanged for 632,270 shares of the Company’s outstanding 7.50% Series B Cumulative Perpetual Convertible Preferred Stock in separate, privately negotiated exchange transactions (see Note 4), and $49,273,000 in aggregate principal amount was issued in private placement transactions for cash.

The notes were priced at 95.02% of the principal amount with an effective yield to maturity of 4.59% and pay interest of 3.75% per year on the principal amount, payable semiannually in arrears in cash on February 15 and August 15 of each year, beginning February 15, 2013. Net cash proceeds from the private placement transaction were $46,819,000. The Company incurred transactional fees of $3,534,000 which were capitalized and will be amortized over the life of the notes.

The net carrying amount of the notes as of September 30, 2012 was $106,925,000. The unamortized discount of $5,575,000 will be amortized over the remaining term of 6.88 years. Total interest and amortization expense recognized during the three and nine months ended September 30, 2012 was $408,000.

The notes are convertible, at the option of the note holder, at any time on or prior to the close of business on the business day immediately preceding August 15, 2019, into shares of common stock at an initial conversion rate of 133.3333 shares per $1,000 principal amount of notes, which is equal to a conversion price of approximately $7.50 per share, subject to customary anti-dilution adjustments. Upon the occurrence of certain change of control events of the Company, the Company will pay a premium on the notes converted in connection with such change of control events by increasing the conversion rate on such notes.

Under certain circumstances, the Company has the right to terminate the right of note holders to convert their notes. If the Company exercises such termination right prior to August 15, 2015, each note holder who converts its notes after receiving notice of such exercise will receive a make-whole payment in cash or common stock, as the Company may elect.

Upon the occurrence of a change of control of the Company or a termination of trading of the common stock, note holders will have the option to require the Company to repurchase for cash all or any portion of such note holder’s notes at a price equal to 100% of the principal amount of the repurchased notes, plus accrued and unpaid interest thereon to the repurchase date.

The notes are not redeemable by the Company prior to August 15, 2015. On or after August 15, 2015, the notes are redeemable in whole or in part at the option of the Company at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest thereon to the redemption date.

The notes contain certain covenants including payment of principal, certain repurchase obligations and interest, obligation of the Company to convert the notes, and other customary terms as defined in the Indenture. The Company was in compliance with these covenants as of September 30, 2012.

Asset-Backed Revolving Credit Facility

The Company has a Loan and Security Agreement with Bank of America N.A. (as amended, the “ABL Facility”) which provides a senior secured asset-based revolving credit facility of up to $230,000,000, comprised of a $158,333,000 U.S. facility (of which $20,000,000 is available for letters of credit), a $31,667,000 Canadian facility (of which $5,000,000 is available for letters of credit) and a $40,000,000 United Kingdom facility (of which $2,000,000 is available for letters of credit), in each case subject to borrowing base availability under the applicable facility. The aggregate amount outstanding under the Company’s letters of credit was $3,280,000 at September 30, 2012. The amounts outstanding under the ABL Facility are secured by certain assets, including inventory and accounts receivable, of the Company’s U.S., Canadian and U.K. legal entities.

As of September 30, 2012, the Company had no borrowings outstanding under the ABL Facility and had $59,139,000 of cash and cash equivalents. The maximum amount of Consolidated Funded Indebtedness (as defined by the ABL Facility), including borrowings under the ABL Facility, that could have been outstanding on September 30, 2012, was approximately $81,600,000. Average outstanding borrowings during the nine months ended September 30, 2012 were $50,108,000. Amounts borrowed under the ABL Facility may be repaid and borrowed as needed. The entire outstanding principal amount (if any) is due and payable at maturity on June 30, 2016.

The interest rate applicable to outstanding loans under the ABL Facility fluctuates depending on the Company’s trailing-twelve month EBITDA (as defined by the ABL Facility) combined with the Company’s “availability ratio” (as defined below). The Company’s “availability ratio” is the ratio, expressed as a percentage of (a) the average daily availability under the ABL Facility to (b) the sum of the Canadian, the U.K. and the U.S. borrowing bases, as adjusted. All applicable margins will be permanently reduced by 0.25% if EBITDA, as defined in the ABL Facility, meets or exceeds $25,000,000 over any trailing twelve-month period, and will be permanently reduced by an additional 0.25% if EBITDA meets or exceeds $50,000,000 over any trailing twelve-month period. At September 30, 2012, the Company’s interest rate applicable to its outstanding loans under the ABL Facility was 4.75%.

In addition, the ABL Facility provides for monthly fees ranging from 0.375% to 0.5% of the unused portion of the ABL Facility, depending on the prior month’s average daily balance of revolver loans and stated amount of letters of credit relative to lenders’ commitments.

The ABL Facility includes certain restrictions including, among other things, restrictions on incurrence of additional debt, liens, dividends and other restricted payments, asset sales, investments, mergers, acquisitions and affiliate transactions. As of September 30, 2012, the Company was in compliance with all covenants of the ABL Facility. Additionally, the Company will be subject to compliance with a fixed charge coverage ratio covenant during, and continuing 30 days after, any period in which the Company’s borrowing base availability falls below $25,000,000. The Company’s borrowing base was above $25,000,000 during the nine months ended September 30, 2012, and as such was not subject to compliance with the fixed charge coverage ratio.

The origination fees incurred in connection with the ABL Facility totaled $4,268,000, which will be amortized into interest expense over the term of the ABL Facility agreement. Unamortized origination fees as of September 30, 2012 and December 31, 2011 were $3,400,000 and $2,925,000, respectively, of which $907,000 and $650,000, respectively, was included in other current assets and $2,493,000 and $2,275,000, respectively, in other long-term assets in the accompanying consolidated condensed financial statements.

Preferred Stock Offering

9 Months Ended

Sep. 30, 2012

Preferred Stock Offering

4. Preferred Stock Offering

In June 2009, the Company sold 1,400,000 shares of its 7.50% Series B Cumulative Perpetual Convertible Preferred Stock, $0.01 par value (the “preferred stock”). The Company received gross proceeds of $140,000,000 and incurred costs of $6,085,000, which were recorded as an offset to additional paid-in capital in the consolidated condensed statement of shareholders’ equity. In August 2012, the Company exchanged 982,361 shares of the preferred stock for 5,866,821 shares of common stock and $63,227,000 in convertible senior notes in separate, privately negotiated transactions (See Note 3). After the exchange, the company had 417,639 remaining shares of preferred stock outstanding.

The preferred stock is generally convertible at any time at the holder’s option into common stock of the Company at an initial conversion rate of 14.1844 shares of Callaway’s common stock per share of preferred stock, which is equivalent to an initial conversion price of approximately $7.05 per share. At September 30, 2012, based on the initial conversion rate, approximately 5,924,000 shares of common stock would be issuable upon conversion of all of the outstanding shares of preferred stock.

The terms of the preferred stock provide for a liquidation preference of $100 per share and cumulative unpaid dividends from the date of original issue at a rate of 7.50% per annum (equal to an annual rate of $7.50 per share), subject to adjustment in certain circumstances. As of September 30, 2012, the liquidation preference would have been $41,894,000. Dividends on the preferred stock are payable quarterly in arrears subject to declaration by the Board of Directors and compliance with the Company’s line of credit and applicable law.

The Company, at its option, may redeem the preferred stock, in whole or in part, at a price equal to 100% of the liquidation preference, plus all accrued and unpaid dividends. The preferred stock has no maturity date and has no voting rights prior to conversion into the Company’s common stock, except in limited circumstances.

Earnings per Common Share

9 Months Ended

Sep. 30, 2012

Earnings per Common Share

5. Earnings per Common Share

Earnings per common share, basic, is computed by dividing net income less preferred stock dividends (i.e., net income allocable to common shareholders) by the weighted-average number of common shares outstanding for the period. Earnings per common share, diluted, is computed by dividing net income by the weighted-average number of common and potentially dilutive common equivalent shares outstanding for the period. 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 (loss) per share is more favorable than basic earnings (loss) per share.

Dilutive securities include the common stock equivalents of convertible preferred stock and convertible senior notes, options granted pursuant to the Company’s stock option plans and outstanding restricted stock units granted to employees and non-employees (see Note 14). 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 Accounting Standards Codification (“ASC”) Topic 260, “Earnings per Share”.

The following table summarizes the weighted-average common shares used in the computation of basic and diluted earnings per share (in thousands, except per share data):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Loss per common share—basic and diluted
Net loss	$	(86,798	)	$	(62,587	)	$	(52,197	)	$	(108,835	)
Less: Preferred stock dividends		(2,414	)		(2,625	)		(7,664	)		(7,875	)

Net loss allocable to common shareholders	$	(89,212	)	$	(65,212	)	$	(59,861	)	$	(116,710	)

Weighted-average common shares outstanding—basic and diluted		67,162			64,781			65,740			64,505

Basic and diluted loss per common share	$	(1.33	)	$	(1.01	)	$	(0.91	)	$	(1.81	)

Options with an exercise price in excess 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. Additionally, potentially dilutive securities were excluded from the computation in periods in which a net loss is reported as their effect would be antidilutive. For the three months ended September 30, 2012 and 2011, dilutive securities outstanding totaling approximately 26,135,000 and 30,583,000 shares, respectively, (including preferred stock of 14,958,000 and 19,858,000, respectively, and shares underlying convertible senior notes of 5,275,000 for the three months ended September 30, 2012) were excluded from the calculations as their effect would have been antidilutive. For the nine months ended September 30, 2012 and 2011 dilutive securities outstanding totaling approximately 28,222,000 and 30,790,000, respectively (including preferred stock of 18,224,847 and 19,858,000, respectively, and shares underlying convertible senior notes of 1,758,000 for the nine months ended September 30, 2012), were excluded from the calculations as their effect would have been antidilutive.

Inventories

9 Months Ended

Sep. 30, 2012

Inventories

6. Inventories

Inventories are summarized below (in thousands):


	September 30, 2012		December 31, 2011
Inventories:
Raw materials	$	39,778	$	46,976
Work-in-process		376		1,286
Finished goods		148,912		184,808

	$	189,066	$	233,070

Sale of Buildings

9 Months Ended

Sep. 30, 2012

Sale of Buildings

7. Sale of Buildings

In March 2011, the Company completed the sale of 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. The sale of these buildings was in connection with the Company’s consolidation of its campus into a more efficient layout, and the relocation of the Company’s golf club manufacturing facilities from Carlsbad, California to Monterrey, Mexico (see Note 2). The sale resulted in net proceeds of $18,079,000 and a net gain of $12,668,000, of which $6,170,000 was recognized in general and administrative expenses during the first quarter of 2011. Due to the lease-back arrangement, the Company deferred a portion of this gain in the amount of $6,498,000, which represents the sum of the net present value of the minimum future lease payments through the end of each respective lease term. The Company recognized in general and administrative expenses $399,000 and $511,000 of this deferred gain during the three months ended September 30, 2012 and 2011, respectively, and $1,308,000 and $1,021,000 during the nine months ended September 30, 2012 and 2011, respectively.. The amortization of the deferred gain will offset future rent expense over the term of the leases which range from 1 to 5 years.

In connection with the Company’s Cost Reduction Initiatives, during the third quarter of 2012, the Company reached an agreement in principle to sell its golf ball manufacturing facility in Chicopee, Massachusetts and lease back a reduced portion of the square footage to eliminate unused space at the facility. In connection with this agreement, the Company designated this building as assets available for sale, and recorded a pre-tax charge of $7,939,000 in cost of sales during the three months ended September 30, 2012 to mark the building down to its estimated selling price, net of estimated commissions and fees.

- Definition

The entire disclosure for sale leaseback transactions. Includes the elements of a transaction involving the sale of property to another party and the lease of the property back to the seller.

+ References + Details

Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets

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 Company performs an impairment analysis on its goodwill and intangible assets at least annually and whenever events or changes in circumstances indicate that the carrying value of such assets may not be fully recoverable. The following sets forth the intangible assets by major asset class (dollars in thousands):


	Useful Life (Years)		September 30, 2012						December 31, 2011
	Useful Life (Years)		Gross		Accumulated Amortization		Net Book Value		Gross		Accumulated Amortization		Net Book Value
Non-Amortizing:
Trade name, trademark and trade dress and other		NA	$	88,590	$	—	$	88,590	$	108,834	$	—	$	108,834
Amortizing:
Patents		2-16		36,459		30,502		5,957		36,459		28,908		7,551
Developed technology and other		1-9		7,960		7,888		72		12,387		6,837		5,550

Total intangible assets			$	133,009	$	38,390	$	94,619	$	157,680	$	35,745	$	121,935

Aggregate amortization expense on intangible assets was approximately $2,645,000 and $1,793,000 for the nine months ended September 30, 2012 and 2011. Amortization expense related to intangible assets at September 30, 2012 in each of the next five fiscal years and beyond is expected to be incurred as follows (in thousands):


Remainder of 2012	$	552
2013		1,389
2014		863
2015		846
2016		846
2017		846
Thereafter		687

	$	6,029

In September 2012, in connection with the Company’s Cost Reduction Initiatives that were announced in July 2012 (Note 2), the Company committed to a plan to transition its integrated device business to a third party based model. As a result, the Company performed an impairment analysis and determined that the discounted expected cash flows from the sales of uPro GPS devices were less than the carrying values of the intangible assets and goodwill associated with the uPlay, LLC acquisition. This analysis resulted in the recognition of impairment charges of $4,527,000 and $629,000 in cost of sales to write-off amortizing intangible assets and goodwill, respectively, in addition to charges of $9,892,000 in cost of sales and $1,425,000 in operating expenses to write-off inventory and property, plant and equipment for the three and nine months ended September 30, 2012.

In March 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 brand, including world-wide trademarks and service marks for net cash proceeds of $19,900,000. In addition, in February 2012, the Company completed the sale of the Ben Hogan brand including all trademarks, service marks and certain other intellectual property for net cash proceeds of $6,961,000. At the time of sale, the net book value of the Top-Flite and Ben Hogan assets totaled $20,244,000 and was included with the net identifiable assets of the Company’s golf ball operating segment. During the nine months ended September 30, 2012, the Company recognized a pre-tax net gain of $6,602,000 in general and administrative expenses in the accompanying consolidated condensed statement of operations related to the sale of these two brands.

In June 2011, the Company recorded an impairment charge of $5,413,000 related to the trade names and trademarks included in non-amortizing intangibles that were associated with the Top-Flite acquisition. This charge was recorded in general and administrative expenses in the accompanying statement of operations for the nine months ended September 30, 2011.

Goodwill at September 30, 2012 and December 31, 2011 was $28,853,000 and $29,203,000, respectively. The decrease in goodwill was due to the write-off of $629,000 of goodwill related to the Company’s uPlay acquisition (as mentioned above), partially offset by $279,000 in foreign currency fluctuations. Gross goodwill before impairments at September 30, 2012 and December 31, 2011 was $30,602,000 and $30,323,000, respectively

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Investments

9 Months Ended

Sep. 30, 2012

Investments

9. Investments

The Company has an investment in TopGolf International, Inc. (“TopGolf”), the owner and operator of TopGolf entertainment centers. In connection with this investment, the Company owns $20,699,000 of preferred shares of TopGolf and has a Preferred Partner Agreement with TopGolf in which the Company has preferred signage rights, rights as the preferred supplier of golf products used or offered for use at TopGolf facilities at prices no less than those paid by the Company’s customers, preferred retail positioning in the TopGolf retail stores, access to consumer information obtained by TopGolf, and other rights incidental to those listed.

The Company’s ownership interest in TopGolf is less than 20%. In addition, the Company does not have the ability to significantly influence the operating and financing activities and policies of TopGolf. Accordingly, the Company’s investment in TopGolf is accounted for at cost in accordance with ASC Topic 325, “Investments—Other,” and is included in other long-term assets in the accompanying consolidated condensed balance sheets as of September 30, 2012 and December 31, 2011.

Non-Controlling Interest

9 Months Ended

Sep. 30, 2012

Non-Controlling Interest

10. Non-Controlling Interest

The Company has a Golf Ball Manufacturing and Supply Agreement with Qingdao Suntech Sporting Goods Limited Company (“Suntech”), where Suntech manufactures and supplies certain golf balls solely for and to the Company. In connection with the agreement, the Company provides Suntech with golf ball raw materials, packing materials, molds, tooling, as well as manufacturing equipment in order to carry out the manufacturing and supply obligations set forth in the agreement. Suntech provides the personnel as well as the facilities to effectively perform these manufacturing and supply obligations. Due to the nature of the arrangement, as well as the controlling influence the Company has in the Suntech operations, the Company is required to consolidate the financial results of Suntech in its consolidated condensed financial statements as of September 30, 2012 and December 31, 2011, in accordance with ASC Topic 810, “Consolidations.”

Suntech is a wholly-owned subsidiary of Suntech Mauritius Limited Company (“Mauritius”). The Company has entered into a loan agreement with Mauritius in order to provide working capital for Suntech. In connection with this loan agreement, the Company loaned Mauritius a total of $3,200,000 of which $1,988,000 was outstanding as of both September 30, 2012 and December 31, 2011. The Company recorded the loan in other long-term assets in the accompanying consolidated condensed balance sheets as of September 30, 2012 and December 31, 2011.

- Definition

The entire disclosure for noncontrolling interest in consolidated subsidiaries, which could include the name of the subsidiary, the ownership percentage held by the parent, the ownership percentage held by the noncontrolling owners, the amount of the noncontrolling interest, the location of this amount on the balance sheet (when not reported separately), an explanation of the increase or decrease in the amount of the noncontrolling interest, the noncontrolling interest share of the net Income or Loss of the subsidiary, the location of this amount on the income statement (when not reported separately), the nature of the noncontrolling interest such as background information and terms, the amount of the noncontrolling interest represented by preferred stock, a description of the preferred stock, and the dividend requirements of the preferred stock.

+ References + Details

Product Warranty

9 Months Ended

Sep. 30, 2012

Product Warranty

11. Product Warranty

The Company has a stated two-year warranty policy for its golf clubs, although the Company sometimes honors warranty claims after the two-year stated warranty period at the Company’s discretion. The Company’s policy is to accrue the estimated cost of satisfying future warranty claims at the time the sale is recorded. In estimating its future warranty obligations, the Company considers various relevant factors, including the Company’s stated warranty policies and practices, the historical frequency of claims, and the cost to replace or repair its products under warranty. The decrease in the provision for future warranty claims during the nine months ended September 30, 2012 is primarily due to increased reserves in 2011 as a result of the product withdrawal of the uPro MX GPS device in 2011. The following table provides a reconciliation of the activity related to the Company’s reserve for warranty expense (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Beginning balance	$	7,863		$	11,982		$	8,140		$	8,427
Provision		2,832			1,938			6,605			10,123
Claims paid/costs incurred		(2,562	)		(3,931	)		(6,612	)		(8,561	)

Ending balance	$	8,133		$	9,989		$	8,133		$	9,989

Income Taxes

9 Months Ended

Sep. 30, 2012

Income Taxes

12. Income Taxes

The Company calculates its interim income tax provision in accordance with ASC 270, “Interim Reporting,” and ASC 740, “Accounting for Income Taxes” (together, “ASC 740”). In general, at the end of each interim period, the Company estimates the annual effective tax rate and applies that rate to its ordinary quarterly earnings. The tax expense or benefit related to significant, unusual, or extraordinary items is recognized in the interim period in which those items occur. In addition, the effect of changes in enacted tax laws, rates, or tax status is recognized in the interim period in which the change occurs.

The computation of the annual estimated effective tax rate at each interim period requires certain estimates and significant judgment, including the expected operating income/loss for the year, projections of the portion of income earned and taxed in foreign jurisdictions, permanent and temporary differences as a result of differences between amounts measured and recognized in accordance with tax laws and financial accounting standards, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, additional information is obtained, or as the tax environment changes. For the three and nine months ended September 30, 2012, the discrete method was used to calculate the Company’s U.S. interim tax expense as the annual effective rate was not considered a reliable estimate of year-to-date income tax expense. Under the discrete method, the Company determines its U.S. tax expense based upon actual results as if the interim period were an annual period. The Company’s full U.S. valuation allowance position, the tax effects related to the changes in indefinite life intangibles and the seasonality of the Company’s business create results with significant variations in the customary relationship between income tax expense and pre-tax income for the interim periods. As a result, the use of the discrete method is more appropriate than the annual effective tax rate method.

The Company is required to file federal and state tax returns in the United States and various other tax returns in foreign jurisdictions. The preparation of these tax returns requires the Company to interpret the applicable tax laws and regulations in effect in such jurisdictions, which could impact the amount of tax paid by the Company. The Company, in consultation with its tax advisors, bases its tax returns on interpretations that are believed to be reasonable under the circumstances. The tax returns, however, are subject to routine reviews by the various federal, state, and international taxing authorities in the jurisdictions in which the Company files its returns. As part of these reviews, a taxing authority may disagree with respect to the tax positions taken by the Company (“uncertain tax positions”) and, therefore, require the Company to pay additional taxes. In accordance with ASC 740, the Company accrues for the estimated additional amount of taxes for uncertain tax positions if it is more likely than not (50% likelihood) that the Company would be required to pay additional taxes. The accrual for uncertain tax positions can result in a difference between the estimated benefit recorded in the Company’s consolidated condensed financial statements and the benefit taken or expected to be taken in the Company’s income tax returns. This difference is generally referred to as an “unrecognized tax benefit.” As of September 30, 2012, the liability for income taxes associated with uncertain tax positions was $7,958,000 and could be reduced by $3,306,000 of offsetting tax benefits associated with the correlative effects of potential transfer pricing adjustments as well as $1,041,000 of tax benefits associated with state income taxes. The net amount of $3,611,000, if recognized, would favorably affect the Company’s consolidated condensed financial statements and effective income tax rate. The Company does not expect that unrecognized tax benefit liabilities will significantly increase or decrease during the next 12 months.

Deferred tax assets and liabilities result from temporary differences between the financial reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws that are anticipated to be in effect at the time the differences are expected to reverse. The realization of the deferred tax assets, including loss and credit carry forwards, is subject to the Company generating sufficient taxable income during the periods in which the temporary differences become realizable. The Company establishes a valuation allowance against its deferred tax assets when required by applicable accounting rules, increasing income tax expense in the period that such allowance is established. During the second quarter of 2011, the Company evaluated whether the realization of its U.S. deferred tax assets would be deemed likely under applicable accounting rules, and considered, among other things, the Company’s taxable losses in the United States from 2009 to 2011. When evaluated in light of the applicable standards, this evidence suggested that the Company should establish a valuation allowance. As a result, during 2011, the Company recorded a valuation allowance against its U.S. deferred tax assets. At each quarter end that a valuation allowance is maintained, as the U.S. deferred tax assets are adjusted upwards or downwards, the associated valuation allowance and income tax expense will be adjusted. If sufficient positive evidence arises in the future, such as a sustained return to profitability in the U.S. business, any existing valuation allowance could be reversed as appropriate, decreasing income tax expense in the period that such conclusion is reached. The Company has concluded that with respect to non-U.S. entities, there is sufficient positive evidence to conclude that realization of its deferred tax assets is deemed to be likely under applicable accounting rules, and no allowances have been established.

The non-cash charge to establish a valuation allowance does not have any impact on the Company’s consolidated cash flows, nor does such an allowance preclude the Company from using loss carry forwards or other deferred tax assets in the future, except as described below. Until the Company re-establishes a pattern of continuing profitability, U.S. income tax expense or benefit related to the recognition of deferred tax assets in the consolidated condensed statement of operations for future periods will be offset by decreases or increases in the valuation allowance with no net effect on the consolidated condensed statement of operations.

The Company recognizes interest and/or penalties related to income tax matters in income tax expense. For the three months ended September 30, 2012 and 2011, the Company recognized approximately ($61,000) and $41,000, respectively, of interest expense (benefit) and penalties in the provision for income taxes. As of September 30, 2012 and December 31, 2011, the Company had accrued $919,000 and $890,000, respectively, before income tax benefit, for the payment of interest and penalties.

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company is generally no longer subject to income tax examinations by tax authorities in the following major jurisdictions:


Tax Jurisdiction	Years No Longer Subject to Audit
U.S. federal		2008 and prior
California (United States)		2006 and prior
Canada		2007 and prior
Japan		2007 and prior
South Korea		2008 and prior
United Kingdom		2007 and prior

Although the Company has set up a valuation allowance against the majority of its U.S. federal and state deferred tax assets, which include tax credits, net operating loss carry forwards (“NOLs”) and other losses, such allowance does not preclude the Company from using the deferred tax assets in the future. However, the Company’s ability to utilize the tax credits and losses to offset future taxable income may be limited significantly if the Company were to experience a cumulative change in ownership of the Company’s stock by “5-percent shareholders” (as defined in Section 382 of the Internal Revenue Code of 1986, as amended) that exceeds 50 percentage points over a rolling three-year period. The determination of whether a Section 382 ownership change has occurred is complex and requires significant judgment. The extent to which the Company’s ability to utilize the losses is limited as a result of such an ownership change depends on many variables, including the value of the Company’s stock at the time of the ownership change. The Company does not believe there has been a cumulative increase in ownership by “5-percent shareholders” in excess of 50 percentage points during the three year period ended September 30, 2012, however, the Company continues to monitor changes in ownership. If such a cumulative increase did occur in any three year period and the Company were limited in the amount of losses it could use to offset taxable income, the Company’s results of operations and cash flows would be adversely impacted.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies

13. Commitments and Contingencies

Legal Matters

The Company is subject to routine legal claims, proceedings, and investigations incident to its business activities, including claims, proceedings, and investigations relating to commercial disputes and employment matters. The Company also receives from time to time information claiming that products sold by the Company infringe or may infringe patent, trademark, or other intellectual property rights of third parties. One or more such claims of potential infringement could lead to litigation, the need to obtain licenses, the need to alter a product to avoid infringement, a settlement or judgment, or some other action or material loss by the Company, which also could adversely affect the Company’s overall ability to protect its product designs and ultimately limit its future success in the marketplace. In addition, the Company is occasionally subject to non-routine claims, proceedings, or investigations.

The Company regularly assesses such matters to determine the degree of probability that the Company will incur a loss as a result of such matters as well as the range of possible loss. An estimated loss contingency is accrued in the Company’s financial statements if it is probable the Company will incur a loss and the amount of the loss can be reasonably estimated. The Company reviews all claims, proceedings, and investigations at least quarterly and establishes or adjusts any accruals for such matters to reflect the impact of negotiations, settlements, advice of legal counsel, and other information and events pertaining to a particular matter. All legal costs associated with such matters are expensed as incurred.

Historically, the claims, proceedings and investigations brought against the Company, individually, and in the aggregate, have not had a material adverse effect upon the consolidated results of operations, cash flows, or financial position of the Company. The Company believes that it has valid legal defenses to the matters currently pending against the Company. These matters are inherently unpredictable and the resolutions of those matters are subject to many uncertainties and the outcomes are not predictable with assurance. Consequently, management is unable to estimate the ultimate aggregate amount of monetary loss, amounts covered by insurance, or the financial impact that will result from such matters. Management believes that the final resolution of the current matters pending against the Company, individually and in the aggregate, will not have a material adverse effect upon the Company’s consolidated financial position. It is possible, however, that the Company’s results of operations or cash flows could be materially affected in any particular period by the unfavorable resolution of one or more of these contingencies.

Unconditional Purchase Obligations

During the normal course of its business, the Company enters into agreements to purchase goods and services, including purchase commitments for production materials, endorsement agreements with professional golfers and other endorsers, employment and consulting agreements, and intellectual property licensing agreements pursuant to which the Company is required to pay royalty fees. It is not possible to determine the amounts the Company will ultimately be required to pay under these agreements as they are subject to many variables including performance-based bonuses, reductions in payment obligations if designated minimum performance criteria are not achieved, the Company’s sales levels, and severance arrangements. As of September 30, 2012, the Company has entered into many of these contractual agreements with terms ranging from one to six years. The minimum obligation that the Company is required to pay under these agreements is $79,206,000 over the next six years. In addition, the Company also enters into unconditional purchase obligations with various vendors and suppliers of goods and services in the normal course of operations through purchase orders or other documentation or that are undocumented except for an invoice. Such unconditional purchase obligations are generally outstanding for periods less than a year and are settled by cash payments upon delivery of goods and services and are not reflected in this total. Future purchase commitments as of September 30, 2012, are as follows (in thousands):


Remainder of 2012	$	49,101
2013		22,786
2014		5,728
2015		993
2016		496
2017		102
Thereafter		—

	$	79,206

Other Contingent Contractual Obligations

During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These include (i) intellectual property indemnities to the Company’s customers and licensees in connection with the use, sale and/or license of Company product or trademarks, (ii) indemnities to various lessors in connection with facility leases for certain claims arising from such facilities or leases, (iii) indemnities to vendors and service providers pertaining to the goods and services provided to the Company or based on the negligence or willful misconduct of the Company and (iv) indemnities involving the accuracy of representations and warranties in certain contracts. In addition, the Company has consulting agreements that provide for payment of nominal fees upon the issuance of patents and/or the commercialization of research results. The Company has also issued guarantees in the form of standby letters of credit of $3,280,000 as of September 30, 2012.

The duration of these indemnities, commitments and guarantees varies, and in certain cases, may be indefinite. The majority of these indemnities, commitments and guarantees do not provide for any limitation on the maximum amount of future payments the Company could be obligated to make. Historically, costs incurred to settle claims related to indemnities have not been material to the Company’s financial position, results of operations or cash flows. In addition, the Company believes the likelihood is remote that material payments under the commitments and guarantees described above will have a material effect on the Company’s financial condition. The fair value of indemnities, commitments and guarantees that the Company issued during the nine months ended September 30, 2012 was not material to the Company’s financial position, results of operations or cash flows.

Employment Contracts

In addition, the Company has made contractual commitments to each of its officers and certain other employees providing for severance payments, including salary continuation, upon the termination of employment by the Company for convenience or by the officer for substantial cause. In addition, in order to assure that the officers would continue to provide independent leadership consistent with the Company’s best interest, the contracts also generally provide for certain protections in the event of an actual or threatened change in control of the Company. These protections include the payment of certain severance benefits, such as salary continuation, upon the termination of employment following a change in control.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 460
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14435-108349

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.25)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 440
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Share-Based Employee Compensation

9 Months Ended

Sep. 30, 2012

Share-Based Employee Compensation

14. Share-Based Employee Compensation

As of September 30, 2012, the Company had one shareholder approved stock plan under which shares were available for equity-based awards: the Callaway Golf Company Amended and Restated 2004 Incentive Plan. From time to time, the Company grants stock options, restricted stock units, phantom stock units, stock appreciation rights and other awards under this plan.

The table below summarizes the amounts recognized in the financial statements for the three and nine months ended September 30, 2012 and 2011 for share-based compensation, including expense for phantom stock units and cash settled stock appreciation rights granted to employees (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Cost of sales	$	28		$	185		$	175		$	528
Operating expenses		1,182			1,066			4,911			9,257

Total cost of employee share-based compensation included in income, before income taxes		1,210			1,251			5,086			9,785
Income taxes		(466	)		(482	)		(1,958	)		(3,767	)

Amount included in net loss	$	744		$	769		$	3,128		$	6,018

Impact on net loss per common share:
Basic and diluted	$	(0.01	)	$	(0.01	)	$	(0.05	)	$	(0.09	)

Stock Options

During the nine months ended September 30, 2012 and 2011, the Company granted 5,000 and 1,731,000 shares underlying stock options, respectively, at a weighted average grant-date fair value of $2.63 and $2.94 per share, respectively. There were no stock options granted during the third quarter of 2012 and 2011. Total compensation expense recognized for stock options during the three and nine months ended September 30, 2012 was $253,000 and $1,310,000, respectively. During the three and nine months ended September 30, 2011, the Company recognized $984,000 and $2,802,000, respectively.

The Company records compensation expense for employee stock options based on the estimated fair value of the options on the date of grant using the Black-Scholes option-pricing model. The table below summarizes the weighted average Black-Scholes fair value assumptions used in the valuation of stock options granted during the nine months ended September 30, 2012 and 2011.


	Nine Months Ended September 30,
	2012		2011
Dividend yield		1.2%		1.4%
Expected volatility		50.6%		48.5%
Risk free interest rate		0.8%		2.0%
Expected life		4.9 years		5.0 years

Restricted Stock Units

During the three months ended September 30, 2012, the Company granted 10,000 shares underlying restricted stock units at a weighted average grant-date fair value of $5.75. The Company granted 393,000 and 61,000 shares underlying restricted stock units during the nine months ended September 30, 2012 and 2011, respectively, at a weighted average grant-date fair value of $6.36 and $7.01 per share, respectively. Total compensation expense recognized for restricted stock units during the three months ended September 30, 2012 and 2011 was $332,000 and $222,000, respectively. Total compensation expense recognized for restricted stock units during the nine months ended September 30, 2012 and 2011 was $1,172,000 and $1,550,000, respectively. At September 30, 2012, the Company had $2,763,000 of total unrecognized compensation expense related to non-vested shares granted to employees and non-employees related to restricted stock units. The amount of unrecognized compensation expense noted above does not necessarily represent the amount that will ultimately be realized by the Company in its consolidated condensed statement of operations due to the application of forfeiture rates.

Phantom Stock Units

Phantom stock units (“PSUs”) are a form of share-based awards that are indexed to the Company’s common stock and are settled in cash. PSUs are accounted for as liabilities and are remeasured based on the closing price of the Company’s common stock at the end of each interim period through the settlement date of the awards. PSUs vest over two and three year periods and compensation expense is recognized on a straight-line basis over these vesting periods.

During the nine months ended September 30, 2012, the Company granted 401,000 shares underlying PSUs at a weighted average grant date fair value of $6.37 per share, respectively. During the nine months ended September 30, 2011, the Company granted 679,000 shares underlying PSUs with a grant date fair value of $7.51 per share. At September 30, 2012 and 2011, the fair value of total PSUs outstanding was $4,504,000 and $5,811,000, respectively.

Compensation expense recognized for PSUs outstanding was $361,000 and $1,355,000 during the three and nine months ended September 30, 2012, respectively, and $1,560,000 during the nine months ended September 30, 2011. The Company recognized a net compensation expense reversal of $74,000 during the three months ended September 30, 2011. In connection with the PSUs, at September 30, 2012 and December 31, 2011, the Company accrued $1,020,000 and $1,325,000, respectively, in accrued employee compensation and benefits, and $1,110,000 and $594,000, respectively, in long-term other liabilities in the accompanying consolidated condensed balance sheets.

Stock Appreciation Rights

During the three and nine months ended September 30, 2011, the Company granted 500,000 of cash settled stock appreciation rights (“SARs”), respectively, at a weighted average grant date fair value of $2.13 per share. During the nine months ended September 30, 2012, the Company granted 3,377,000 SARs at a weighted average grant date fair value of $2.07 per share. There were no SARs granted during the three months ended September 30, 2012.

The Company records compensation expense for SARs based on the estimated fair value using the Black Scholes option-pricing model. SARs are remeasured based on a revised Black Scholes value at each interim reporting period until they reach the expected term date. The Company recognized compensation expense of $26,000 for both the three and nine months ended September 30, 2011. The Company recognized compensation expense of $264,000 and $1,250,000 during the three and nine months ended September 30, 2012, respectively. The Company accrued $1,047,000 and $321,000 at September 30, 2012 and December 31, 2011, respectively, in accrued employee compensation and benefits in the accompanying consolidated condensed balance sheets. At September 30, 2012, the Company accrued $524,000 in long-term other liabilities in the accompanying consolidated condensed balance sheet. There was no accrual in long-term other liabilities at December 31, 2011.

In connection with an employment agreement with a former executive officer of the Company, the Company was contractually obligated to grant $11,730,000 in the form of various share-based awards over the service period stipulated in the agreement. As a result, the total contractual obligation related to these equity awards was recognized on a straight-line basis over the contract term. In connection with the resignation of the executive officer in June 2011, the Company recognized a total of $3,551,000 during the nine months ended September 30, 2011.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 40
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2012

Fair Value of Financial Instruments

15. Fair Value of Financial Instruments

Fair value is defined as the price that would be received to sell an asset or the price paid to transfer a liability (the exit price) in the principal and most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities carried at fair value are classified using a three-tier hierarchy based upon observable and unobservable inputs as follows:

Level 1: Quoted market prices in active markets for identical assets or liabilities

Level 2: Observable market based inputs that are corroborated by market data

Level 3: Unobservable inputs that are not corroborated by market data

The carrying values of cash and cash equivalents, trade accounts receivable and trade accounts payable and accrued expenses are reasonable estimates of fair value due to the short-term maturities of these instruments.

The following table summarizes the valuation of the Company’s financial instruments by the above pricing levels as of the valuation dates listed (in thousands):


	September 30, 2012				December 31, 2011
	Carrying Value		Fair Value		Carrying Value		Fair Value
Foreign currency derivative instruments—asset position⁽¹⁾	$	569	$	569	$	2,514	$	2,514
Foreign currency derivative instruments—liability position⁽¹⁾		1,529		1,529		3,746		3,746
Convertible senior notes⁽²⁾		106,925		116,865		—		—

(1)	Based on Level 2 observable inputs that are corroborated by market data.

(2)	Based on Level 2 secondary market quoted prices.

Foreign currency derivatives on the balance sheet are recorded at fair value with changes in fair value recorded in the statement of operations (Note 16). Convertible senior notes are recorded at the carrying value on the balance sheet (Note 3).

Nonrecurring Fair Value Measurements

The Company measures certain assets at fair value on a nonrecurring basis at least annually or when certain indicators are present. These assets include property, plant and equipment, goodwill and non-amortizing intangible assets that are written down to fair value when they are held for sale or determined to be impaired. During the three and nine months ended September 30, 2012, in connection with the Cost Reduction Initiatives (Note 2), the Company committed to a plan to sell its golf ball manufacturing facility in Chicopee, Massachusetts and lease back a reduced portion of the square footage to accommodate lower ball inventory volumes manufactured at that location. In connection with designating this building as available for sale, the Company recorded a charge of $7,939,000 to write the building down to its estimated selling price, net of estimated commissions and fees (Note 7). This implied fair market value was based on significant unobservable inputs, and as a result, the fair value measurement was classified as Level 3. In addition, in connection with the same initiatives, the Company committed to a plan to transition its integrated device business to a third party based model. As a result, the Company performed an impairment analysis on the net realizable value of its uPro assets, which resulted in charges of $5,156,000 to write-off amortizing intangibles and goodwill (Note 8), in addition to charges of $11,317,000 to write-off property, plant and equipment as well as inventory associated with these devices. The impairment analysis was based on a discounted cash flow model that incorporated significant unobservable inputs, and as such, the write-off of these assets was classified as Level 3.

During the nine months ended September 30, 2011, certain non-amortizing intangible assets related to the Top-Flite acquisition were written down to their implied fair value, resulting in an impairment charge of $5,413,000 (Note 8). The fair value measurement was classified as Level 3.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Number 107
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Derivatives and Hedging

9 Months Ended

Sep. 30, 2012

Derivatives and Hedging

16. Derivatives and Hedging

The Company accounts for its foreign currency exchange contracts in accordance with ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). ASC 815 requires the recognition of all derivatives as either assets or liabilities on the balance sheet, the measurement of those instruments at fair value and the recognition of changes in the fair value of derivatives in earnings in the period of change, unless the derivative qualifies as an effective hedge that offsets certain exposures. In addition, it requires enhanced disclosures regarding derivative instruments and hedging activities to better convey the purpose of derivative use in terms of the risks the Company is intending to manage, specifically about (a) how and why the Company uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under ASC 815, and (c) how derivative instruments and related hedged items affect the Company’s financial position, financial performance, and cash flows.

In the normal course of business, the Company is exposed to gains and losses resulting from fluctuations in foreign currency exchange rates relating to transactions of its international subsidiaries, including certain balance sheet exposures (payables and receivables denominated in foreign currencies). In addition, the Company is exposed to gains and losses resulting from the translation of the operating results of the Company’s international subsidiaries into U.S. dollars for financial reporting purposes. As part of its strategy to manage the level of exposure to the risk of fluctuations in foreign currency exchange rates, the Company uses derivative financial instruments in the form of foreign currency forward contracts and put and call option contracts (“foreign currency exchange contracts”) to hedge transactions that are denominated primarily in British Pounds, Euros, Japanese Yen, Canadian Dollars, Australian Dollars and Korean Won. Foreign currency exchange contracts are used only to meet the Company’s objectives of minimizing variability in the Company’s operating results arising from foreign currency exchange rate movements. The Company does not enter into foreign currency exchange contracts for speculative purposes. Foreign currency exchange contracts usually mature within twelve months from their inception.

The Company did not designate any foreign currency exchange contracts as derivatives that qualify for hedge accounting under ASC 815. At September 30, 2012 and December 31, 2011, the notional amounts of the Company’s foreign currency exchange contracts used to hedge the exposures discussed above were approximately $197,130,000 and $165,533,000, respectively, of which $109,990,000 and $131,311,000, respectively, represent contracts used to hedge exposures in operating results from the translation of revenues and expenses of the Company’s international subsidiaries into U.S. dollars and $87,140,000 and $34,222,000, respectively, represents contracts used to hedge balance sheet exposures denominated in foreign currencies. 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 condensed balance sheets at September 30, 2012 and December 31, 2011 (in thousands):

Asset Derivatives

September 30, 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

569

Other current assets

2,514

Liability Derivatives

September 30, 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

1,529

Accounts payable and accrued expenses

3,746

The following table summarizes the location of gains and losses in the consolidated condensed statements of operations that were recognized during the three and nine months ended September 30, 2012 and 2011, respectively, in addition to the derivative contract type (in thousands):


		Amount of Loss Recognized in Income on Derivative Instruments
Derivatives not designated as hedging instruments	Location of loss recognized in income on derivative instruments	Three Months Ended September 30,						Nine Months Ended September 30,
Derivatives not designated as hedging instruments		2012			2011			2012			2011
Foreign currency exchange contracts	Other expense	$	(4,884	)	$	(709	)	$	(1,399	)	$	(7,763	)

The net realized and unrealized contractual net gains recognized for the three and nine months ended September 30, 2012 were used to offset actual foreign currency transactional losses of $2,752,000 and $60,000, respectively. The net realized and unrealized contractual net losses recognized for the three and nine months ended September 30, 2011 were used to offset actual foreign currency transactional gains of $2,508,000 and $36,000, respectively.

- Definition

The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items.

+ References

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+ Details

Segment Information

9 Months Ended

Sep. 30, 2012

Segment Information

17. Segment Information

The Company has two operating segments that are organized on the basis of products, which are segregated between golf clubs and golf balls. The golf clubs segment consists primarily of Callaway Golf woods, hybrids, irons, wedges and putters as well as Odyssey putters, other golf-related accessories, including uPro GPS on-course measurement devices, royalties from licensing of the Company’s trademarks and service marks as well as sales of pre-owned golf clubs. The golf balls segment consists primarily of Callaway Golf balls and Top-Flite golf balls until the sale of the Top-Flite brand in March 2012 (see Note 8). There are no significant intersegment transactions.

The table below contains information utilized by management to evaluate its operating segments for the interim periods presented (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net sales:
Golf clubs	$	121,286		$	140,503		$	595,123		$	600,570
Golf balls		26,620			32,740			119,004			132,086

	$	147,906		$	173,243		$	714,127		$	732,656

Income (loss) before provision for income taxes:
Golf clubs⁽¹⁾⁽²⁾	$	(57,840	)	$	(23,941	)	$	(7,247	)	$	19,058
Golf balls⁽¹⁾⁽²⁾		(13,789	)		(6,637	)		(8,047	)		(4,638	)
Reconciling items⁽³⁾		(14,419	)		(17,155	)		(34,249	)		(54,138	)

	$	(86,048	)	$	(47,733	)	$	(49,543	)	$	(39,718	)

Additions to long-lived assets:
Golf clubs	$	2,242		$	4,583		$	14,956		$	15,807
Golf balls		83			2,509			323			5,930

	$	2,325		$	7,092		$	15,279		$	21,737

(1)	Certain prior period amounts were reclassified to conform with the current year presentation.

(2)	The table below includes total charges absorbed by the Company’s operating segments from the restructuring initiatives discussed in Note 2 (in thousands).


	Three Months Ended September 30, 2012									Nine Months Ended September 30, 2012
	Golf Clubs		Golf Balls		Corporate G&A⁽³⁾			Total		Golf Clubs		Golf Balls		Corporate G&A⁽³⁾			Total
Cost Reduction Initiatives	$	23,603	$	9,317	$	2,164		$	35,084	$	25,290	$	9,650	$	4,815		$	39,755
Reorganization and Reinvestment Initiatives		262		141		(112	)		291		816		249		(54	)		1,011

Total	$	23,865	$	9,458	$	2,052		$	35,375	$	26,106	$	9,899	$	4,761		$	40,766


	Three Months Ended September 30, 2011									Nine Months Ended September 30, 2011
	Golf Clubs		Golf Balls		Corporate G&A⁽³⁾			Total		Golf Clubs		Golf Balls		Corporate G&A⁽³⁾			Total
Reorganization and Reinvestment Initiatives	$	4,177	$	952	$	2,266		$	7,395	$	4,167	$	958	$	7,432		$	12,557
GOS Initiatives		3,923		1,268		38			5,229		12,279		5,061		231			17,571

Total	$	8,100	$	2,220	$	2,304		$	12,624	$	16,446	$	6,019	$	7,663		$	30,128

(3)	Reconciling items represent corporate general and administrative expenses and other income (expense) not included by management in determining segment profitability. Reconciling items also include the following pre-tax items:

•

A pre-tax gain of $6,602,000 in connection with the sale of the Top-Flite and Ben Hogan brands during the nine months ended September 30, 2012 (Note 8);

•

A pre-tax impairment charge of $5,413,000 in connection with certain trademarks and trade names in the nine months ended September 30, 2011 (Note 8); and

•

A pre-tax gain of $6,170,000 in connection with the sale of certain buildings during the nine months ended September 30, 2011 (Note 7).

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

Restructuring Initiatives (Tables)

9 Months Ended

Sep. 30, 2012

Global Operations Strategy, Reorganization and Reinvestment Initiatives

Activity and Liability Balances Recorded as Part of Initiatives as well as Current Estimated Future Charges Relating Initiatives


	GOS Initiatives						Reorganization and Reinvestment Initiatives			Total
	Workforce Reductions			Transition Costs			Workforce Reductions			Total
Restructuring payable balance, December 31, 2011	$	1,219		$	55		$	5,357		$	6,631
Charges to cost and expense		—			21			442			463
Cash payments		(559	)		(76	)		(3,357	)		(3,992	)

Restructuring payable balance, March 31, 2012	$	660		$	—		$	2,442		$	3,102
Charges to cost and expense		—			—			278			278
Cash payments		(159	)		—			(1,670	)		(1,829	)

Restructuring payable balance, June 30, 2012	$	501		$	—		$	1,050		$	1,551
Charges to cost and expense		—			—			291			291
Cash payments		(385	)		—			(330	)		(715	)

Restructuring payable balance, September 30, 2012	$	116		$	—		$	1,011		$	1,127

Total future estimated charges as of September 30, 2012	$	—		$	—		$	—		$	—

Cost Reduction Initiatives

Activity and Liability Balances Recorded as Part of Initiatives as well as Current Estimated Future Charges Relating Initiatives


	Cost Reduction Initiatives
	Workforce Reductions			Transition Costs			Asset Write-offs			Total
Charges to cost and expense	$	3,240		$	707		$	724		$	4,671
Non-cash items		(240	)		—			(724	)		(964	)
Cash payments		(542	)		(707	)		—			(1,249	)

Restructuring payable balance, June 30, 2012	$	2,458		$	—		$	—		$	2,458

Charges to cost and expense	$	6,582		$	1,273		$	27,229		$	35,084
Non-cash items		(80	)		(666	)		(27,229	)		(27,975	)
Cash payments		(5,041	)		(329	)		—			(5,370	)

Restructuring payable balance, September 30, 2012	$	3,919		$	278		$	—		$	4,197

Total future estimated charges as of September 30, 2012	$	6,900		$	8,000		$	400		$	15,300

Earnings per Common Share (Tables)

9 Months Ended

Sep. 30, 2012

Computation of Basic and Diluted Earnings Per Share

The following table summarizes the weighted-average common shares used in the computation of basic and diluted earnings per share (in thousands, except per share data):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Loss per common share—basic and diluted
Net loss	$	(86,798	)	$	(62,587	)	$	(52,197	)	$	(108,835	)
Less: Preferred stock dividends		(2,414	)		(2,625	)		(7,664	)		(7,875	)

Net loss allocable to common shareholders	$	(89,212	)	$	(65,212	)	$	(59,861	)	$	(116,710	)

Weighted-average common shares outstanding—basic and diluted		67,162			64,781			65,740			64,505

Basic and diluted loss per common share	$	(1.33	)	$	(1.01	)	$	(0.91	)	$	(1.81	)

Inventories (Tables)

9 Months Ended

Sep. 30, 2012

Inventories

Inventories are summarized below (in thousands):


	September 30, 2012		December 31, 2011
Inventories:
Raw materials	$	39,778	$	46,976
Work-in-process		376		1,286
Finished goods		148,912		184,808

	$	189,066	$	233,070

Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2012

Intangible Assets by Major Asset Class

The following sets forth the intangible assets by major asset class (dollars in thousands):


	Useful Life (Years)		September 30, 2012						December 31, 2011
	Useful Life (Years)		Gross		Accumulated Amortization		Net Book Value		Gross		Accumulated Amortization		Net Book Value
Non-Amortizing:
Trade name, trademark and trade dress and other		NA	$	88,590	$	—	$	88,590	$	108,834	$	—	$	108,834
Amortizing:
Patents		2-16		36,459		30,502		5,957		36,459		28,908		7,551
Developed technology and other		1-9		7,960		7,888		72		12,387		6,837		5,550

Total intangible assets			$	133,009	$	38,390	$	94,619	$	157,680	$	35,745	$	121,935

Amortization Expense Related to Intangible Assets

Amortization expense related to intangible assets at September 30, 2012 in each of the next five fiscal years and beyond is expected to be incurred as follows (in thousands):


Remainder of 2012	$	552
2013		1,389
2014		863
2015		846
2016		846
2017		846
Thereafter		687

	$	6,029

Product Warranty (Tables)

9 Months Ended

Sep. 30, 2012

Reconciliation of Reserve for Warranty Expense

The following table provides a reconciliation of the activity related to the Company’s reserve for warranty expense (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Beginning balance	$	7,863		$	11,982		$	8,140		$	8,427
Provision		2,832			1,938			6,605			10,123
Claims paid/costs incurred		(2,562	)		(3,931	)		(6,612	)		(8,561	)

Ending balance	$	8,133		$	9,989		$	8,133		$	9,989

Income Taxes (Tables)

9 Months Ended

Sep. 30, 2012

Major Jurisdictions no Longer Subject to Income Tax Examinations by Tax Authorities


Tax Jurisdiction	Years No Longer Subject to Audit
U.S. federal		2008 and prior
California (United States)		2006 and prior
Canada		2007 and prior
Japan		2007 and prior
South Korea		2008 and prior
United Kingdom		2007 and prior

- Definition

Tabular disclosure of income tax examinations that an enterprise is currently subject to or that have been completed in the current period typically including a description of the examination, the jurisdiction conducting the examination, the tax year(s) under examination, the likelihood of an unfavorable settlement, the range of possible losses, the liability recorded, the increase or decrease in the liability from the prior period, and any penalties and interest that have been recorded.

+ References + Details

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2012

Future Purchase Commitments

Future purchase commitments as of September 30, 2012, are as follows (in thousands):


Remainder of 2012	$	49,101
2013		22,786
2014		5,728
2015		993
2016		496
2017		102
Thereafter		—

	$	79,206

Share-Based Employee Compensation (Tables)

9 Months Ended

Sep. 30, 2012

Share-Based Compensation Including Expense for Phantom Stock Units and Cash Settled Stock Appreciation Rights Granted to Employees


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Cost of sales	$	28		$	185		$	175		$	528
Operating expenses		1,182			1,066			4,911			9,257

Total cost of employee share-based compensation included in income, before income taxes		1,210			1,251			5,086			9,785
Income taxes		(466	)		(482	)		(1,958	)		(3,767	)

Amount included in net loss	$	744		$	769		$	3,128		$	6,018

Impact on net loss per common share:
Basic and diluted	$	(0.01	)	$	(0.01	)	$	(0.05	)	$	(0.09	)

Weighted Average Black-Scholes Fair Value Assumptions used in Valuation of Stock Options Granted

The table below summarizes the weighted average Black-Scholes fair value assumptions used in the valuation of stock options granted during the nine months ended September 30, 2012 and 2011.


	Nine Months Ended September 30,
	2012		2011
Dividend yield		1.2%		1.4%
Expected volatility		50.6%		48.5%
Risk free interest rate		0.8%		2.0%
Expected life		4.9 years		5.0 years

- Definition

Tabular disclosure of the allocation of equity-based compensation costs to a given line item on the balance sheet and income statement for the period. This may include the reporting line for the costs and the amount capitalized and expensed.

+ References + Details

Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2012

Valuation of Financial Instruments by Pricing Levels

The following table summarizes the valuation of the Company’s financial instruments by the above pricing levels as of the valuation dates listed (in thousands):


	September 30, 2012				December 31, 2011
	Carrying Value		Fair Value		Carrying Value		Fair Value
Foreign currency derivative instruments—asset position⁽¹⁾	$	569	$	569	$	2,514	$	2,514
Foreign currency derivative instruments—liability position⁽¹⁾		1,529		1,529		3,746		3,746
Convertible senior notes⁽²⁾		106,925		116,865		—		—

(1)	Based on Level 2 observable inputs that are corroborated by market data.

(2)	Based on Level 2 secondary market quoted prices.

Derivatives and Hedging (Tables)

9 Months Ended

Sep. 30, 2012

Summary of Fair Value of Derivative Instruments by Contract Type and Location of Asset and/or Liability on Consolidated Condensed Balance Sheets

Asset Derivatives

September 30, 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

569

Other current assets

2,514

Liability Derivatives

September 30, 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

1,529

Accounts payable and accrued expenses

3,746

Location of Gains and Losses in Consolidated Condensed Statements of Operations that were Recognized and Derivative Contract Type


		Amount of Loss Recognized in Income on Derivative Instruments
Derivatives not designated as hedging instruments	Location of loss recognized in income on derivative instruments	Three Months Ended September 30,						Nine Months Ended September 30,
Derivatives not designated as hedging instruments		2012			2011			2012			2011
Foreign currency exchange contracts	Other expense	$	(4,884	)	$	(709	)	$	(1,399	)	$	(7,763	)

- Definition

Tabular disclosure of the location and amount of gains and losses reported in the statement of financial performance, or when applicable, the statement of financial position. For example, (a) gains and losses recognized in the income statement on derivative instruments designated and qualifying as hedging instruments in fair value hedges and related hedged items designated and qualifying in fair value hedges and (b) gains and losses initially recognized in other comprehensive income on derivative instruments designated and qualifying as cash flow hedges.

+ References + Details

Segment Information (Tables)

9 Months Ended

Sep. 30, 2012

Operating Segments

The table below contains information utilized by management to evaluate its operating segments for the interim periods presented (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net sales:
Golf clubs	$	121,286		$	140,503		$	595,123		$	600,570
Golf balls		26,620			32,740			119,004			132,086

	$	147,906		$	173,243		$	714,127		$	732,656

Income (loss) before provision for income taxes:
Golf clubs⁽¹⁾⁽²⁾	$	(57,840	)	$	(23,941	)	$	(7,247	)	$	19,058
Golf balls⁽¹⁾⁽²⁾		(13,789	)		(6,637	)		(8,047	)		(4,638	)
Reconciling items⁽³⁾		(14,419	)		(17,155	)		(34,249	)		(54,138	)

	$	(86,048	)	$	(47,733	)	$	(49,543	)	$	(39,718	)

Additions to long-lived assets:
Golf clubs	$	2,242		$	4,583		$	14,956		$	15,807
Golf balls		83			2,509			323			5,930

	$	2,325		$	7,092		$	15,279		$	21,737

(1)	Certain prior period amounts were reclassified to conform with the current year presentation.

(2)	The table below includes total charges absorbed by the Company’s operating segments from the restructuring initiatives discussed in Note 2 (in thousands).


	Three Months Ended September 30, 2012									Nine Months Ended September 30, 2012
	Golf Clubs		Golf Balls		Corporate G&A⁽³⁾			Total		Golf Clubs		Golf Balls		Corporate G&A⁽³⁾			Total
Cost Reduction Initiatives	$	23,603	$	9,317	$	2,164		$	35,084	$	25,290	$	9,650	$	4,815		$	39,755
Reorganization and Reinvestment Initiatives		262		141		(112	)		291		816		249		(54	)		1,011

Total	$	23,865	$	9,458	$	2,052		$	35,375	$	26,106	$	9,899	$	4,761		$	40,766


	Three Months Ended September 30, 2011									Nine Months Ended September 30, 2011
	Golf Clubs		Golf Balls		Corporate G&A⁽³⁾			Total		Golf Clubs		Golf Balls		Corporate G&A⁽³⁾			Total
Reorganization and Reinvestment Initiatives	$	4,177	$	952	$	2,266		$	7,395	$	4,167	$	958	$	7,432		$	12,557
GOS Initiatives		3,923		1,268		38			5,229		12,279		5,061		231			17,571

Total	$	8,100	$	2,220	$	2,304		$	12,624	$	16,446	$	6,019	$	7,663		$	30,128

(3)	Reconciling items represent corporate general and administrative expenses and other income (expense) not included by management in determining segment profitability. Reconciling items also include the following pre-tax items:

•

A pre-tax gain of $6,602,000 in connection with the sale of the Top-Flite and Ben Hogan brands during the nine months ended September 30, 2012 (Note 8);

•

A pre-tax impairment charge of $5,413,000 in connection with certain trademarks and trade names in the nine months ended September 30, 2011 (Note 8); and

•

A pre-tax gain of $6,170,000 in connection with the sale of certain buildings during the nine months ended September 30, 2011 (Note 7).

- Definition

Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss.

+ References + Details

Restructuring Initiatives - Additional Information (Detail) - USD ($)	3 Months Ended				6 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Sep. 30, 2011	Jun. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Restructuring Cost and Reserve [Line Items]
Pre-tax restructuring charges to cost and expense	$ 35,375,000			$ 12,624,000		$ 40,766,000	$ 30,128,000
Expected annualized pre-tax savings from restructuring plan						60,000,000
Golf ball
Restructuring Cost and Reserve [Line Items]
Pre-tax restructuring charges to cost and expense	9,458,000			2,220,000		9,899,000	6,019,000
Global Operations Strategy
Restructuring Cost and Reserve [Line Items]
Pre-tax restructuring charges to cost and expense				5,229,000			17,571,000	$ 39,496,000
Reorganization and Reinvestment Initiatives
Restructuring Cost and Reserve [Line Items]
Pre-tax restructuring charges to cost and expense	291,000			7,395,000		1,011,000	12,557,000
Expected annualized pre-tax savings from restructuring plan						50,000,000
Reorganization and Reinvestment Initiatives \| Golf ball
Restructuring Cost and Reserve [Line Items]
Pre-tax restructuring charges to cost and expense	141,000			952,000		249,000	958,000
Reorganization and Reinvestment Initiatives \| Cost of sales
Restructuring Cost and Reserve [Line Items]
Pre-tax restructuring charges to cost and expense	177,000			1,049,000		473,000	1,049,000
Reorganization and Reinvestment Initiatives \| Operating expenses
Restructuring Cost and Reserve [Line Items]
Pre-tax restructuring charges to cost and expense	114,000			$ 6,346,000		538,000	$ 11,508,000
Reorganization and Reinvestment Initiatives \| Workforce Reductions
Restructuring Cost and Reserve [Line Items]
Pre-tax restructuring charges to cost and expense	291,000	$ 278,000	$ 442,000
Cost Reduction Initiatives
Restructuring Cost and Reserve [Line Items]
Pre-tax restructuring charges to cost and expense	35,084,000				$ 4,671,000	39,755,000
Expected annualized pre-tax savings from restructuring plan						$ 55,000,000
Percentage of future estimated charges expected to result in non-cash expenditures						66.67%
Cost Reduction Initiatives \| Apparel and Footwear Transition
Restructuring Cost and Reserve [Line Items]
Pre-tax restructuring charges to cost and expense	3,575,000					$ 4,692,000
Cost Reduction Initiatives \| Integrated Golf Devices Transition
Restructuring Cost and Reserve [Line Items]
Pre-tax restructuring charges to cost and expense	16,473,000					16,473,000
Cost Reduction Initiatives \| Golf ball
Restructuring Cost and Reserve [Line Items]
Pre-tax restructuring charges to cost and expense	9,317,000					9,650,000
Cost Reduction Initiatives \| Golf ball \| Manufacturing
Restructuring Cost and Reserve [Line Items]
Pre-tax restructuring charges to cost and expense	8,352,000					8,352,000
Cost Reduction Initiatives \| Operating expenses
Restructuring Cost and Reserve [Line Items]
Pre-tax restructuring charges to cost and expense	7,782,000					11,492,000
Cost Reduction Initiatives \| Workforce Reductions
Restructuring Cost and Reserve [Line Items]
Pre-tax restructuring charges to cost and expense	6,582,000				$ 3,240,000
Cost Reduction Initiatives \| Workforce Reductions \| Impacts all regions and levels of the organization in addition to other transition costs
Restructuring Cost and Reserve [Line Items]
Pre-tax restructuring charges to cost and expense	6,684,000					10,238,000
Cost Reduction Initiatives \| Cost of Goods Sold
Restructuring Cost and Reserve [Line Items]
Pre-tax restructuring charges to cost and expense	$ 27,302,000					$ 28,263,000

Activity and Liability Balances Recorded as part of Global Operations Strategy Initiatives and Reorganization and Reinvestment Initiatives as well as Current Estimated Future Charges Relating Initiatives (Detail) - USD ($)	3 Months Ended				6 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Sep. 30, 2011	Jun. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Restructuring Cost and Reserve [Line Items]
Charges to cost and expense	$ 35,375,000			$ 12,624,000		$ 40,766,000	$ 30,128,000
Global Operations Strategy
Restructuring Cost and Reserve [Line Items]
Charges to cost and expense				5,229,000			17,571,000	$ 39,496,000
Global Operations Strategy \| Workforce Reductions
Restructuring Cost and Reserve [Line Items]
Restructuring payable, beginning balance	501,000	$ 660,000	$ 1,219,000		$ 1,219,000	1,219,000
Cash payments	(385,000)	(159,000)	(559,000)
Restructuring payable, ending balance	116,000	501,000	660,000		501,000	116,000		1,219,000
Total future estimated charges, at end of period
Global Operations Strategy \| Transition Costs
Restructuring Cost and Reserve [Line Items]
Restructuring payable, beginning balance			55,000		55,000	55,000
Charges to cost and expense			21,000
Cash payments			(76,000)
Restructuring payable, ending balance								55,000
Total future estimated charges, at end of period
Reorganization and Reinvestment Initiatives
Restructuring Cost and Reserve [Line Items]
Charges to cost and expense	291,000			$ 7,395,000		1,011,000	$ 12,557,000
Reorganization and Reinvestment Initiatives \| Workforce Reductions
Restructuring Cost and Reserve [Line Items]
Restructuring payable, beginning balance	1,050,000	2,442,000	5,357,000		5,357,000	5,357,000
Charges to cost and expense	291,000	278,000	442,000
Cash payments	(330,000)	(1,670,000)	(3,357,000)
Restructuring payable, ending balance	1,011,000	1,050,000	2,442,000		1,050,000	1,011,000		5,357,000
Total future estimated charges, at end of period
Global Operations Strategy, Reorganization and Reinvestment Initiatives
Restructuring Cost and Reserve [Line Items]
Restructuring payable, beginning balance	1,551,000	3,102,000	6,631,000		6,631,000	6,631,000
Charges to cost and expense	291,000	278,000	463,000
Cash payments	(715,000)	(1,829,000)	(3,992,000)
Restructuring payable, ending balance	$ 1,127,000	$ 1,551,000	$ 3,102,000		$ 1,551,000	1,127,000		$ 6,631,000
Total future estimated charges, at end of period

Charges Recognized , Liability Balances, and Current Estimated Future Charges Relating to Cost Reduction Initiatives (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Jun. 30, 2012	Sep. 30, 2012	Sep. 30, 2011
Restructuring Cost and Reserve [Line Items]
Charges to cost and expense	$ 35,375	$ 12,624		$ 40,766	$ 30,128
Cost Reduction Initiatives
Restructuring Cost and Reserve [Line Items]
Charges to cost and expense	35,084		$ 4,671	39,755
Non-cash items	(27,975)		(964)
Cash payments	(5,370)		(1,249)
Restructuring payable, ending balance	4,197		2,458	4,197
Total future estimated charges, at end of period				15,300
Cost Reduction Initiatives \| Workforce Reductions
Restructuring Cost and Reserve [Line Items]
Charges to cost and expense	6,582		3,240
Non-cash items	(80)		(240)
Cash payments	(5,041)		(542)
Restructuring payable, ending balance	3,919		2,458	3,919
Total future estimated charges, at end of period				6,900
Cost Reduction Initiatives \| Transition Costs
Restructuring Cost and Reserve [Line Items]
Charges to cost and expense	1,273		707
Non-cash items	(666)
Cash payments	(329)		(707)
Restructuring payable, ending balance	278			278
Total future estimated charges, at end of period				8,000
Cost Reduction Initiatives \| Asset Write-offs
Restructuring Cost and Reserve [Line Items]
Charges to cost and expense	27,229		724
Non-cash items	$ (27,229)		$ (724)
Total future estimated charges, at end of period				$ 400

Financing Arrangements - Additional Information (Detail)

1 Months Ended

3 Months Ended

9 Months Ended

Aug. 29, 2012

USD ($)

Jun. 30, 2009

Sep. 30, 2012

USD ($)

$ / shares

Sep. 30, 2012

USD ($)

$ / shares

Aug. 31, 2012

USD ($)

Dec. 31, 2011

USD ($)

Sep. 30, 2011

USD ($)

Dec. 31, 2010

USD ($)

Debt Instrument [Line Items]

Convertible senior notes

$ 112,500,000

Convertible senior notes interest rate

3.75%

Convertible senior notes due date

Aug. 15, 2019

Preferred stock, cumulative dividend rate (in percent)

7.50%

Convertible senior notes, percentage of principal amount

95.02%

Convertible senior notes, effective rate of interest

4.59%

Convertible senior notes, interest payment frequency

Payable semiannually in arrears in cash on February 15 and August 15 of each year, beginning February 15, 2013.

Proceeds from issuance of convertible notes

$ 46,819,000

Convertible senior notes,transactional fees

$ 3,534,000

3,534,000

Convertible senior notes, net carrying amount

^[1]

106,925,000

Convertible senior notes, unamortized discount

$ 5,575,000

Convertible senior notes, remaining amortization period

6 years 10 months 17 days

Convertible senior notes, total interest and amortization expense recognized

$ 408,000

Convertible senior notes convertible latest date

Aug. 15, 2019

Initial conversion rate, number of common stock issuable | shares

133.3333

Debt conversion principal amount

$ 1,000

Conversion price per share | $ / shares

$ 7.50

Repurchase price as percentage of principal amount of senior notes

100.00%

Notes redemption earliest date

Aug. 15, 2015

Redemption price as percentage of principal amount of notes

100.00%

Asset-based credit facility, maximum borrowing capacity

$ 230,000,000

Amount outstanding under letters of credit

3,280,000

Cash and cash equivalents

59,139,000

$ 59,139,000

$ 43,023,000

$ 64,295,000

$ 55,043,000

Asset-based credit facility, maturity date

Jun. 30, 2016

Maximum amount of consolidated funded indebtedness including borrowing outstanding

$ 81,600,000

Average outstanding borrowing

$ 50,108,000

Description of condition to reduce applicable margin to interest rate

All applicable margins will be permanently reduced by 0.25% if EBITDA, as defined in the ABL Facility, meets or exceeds $25,000,000 over any trailing twelve-month period, and will be permanently reduced by an additional 0.25% if EBITDA meets or exceeds $50,000,000 over any trailing twelve-month period.

Asset-based credit facility, interest rate

4.75%

Borrowing base availability

$ 25,000,000

Asset-based credit facility, origination fees

4,268,000

Unamortized origination fees

3,400,000

2,925,000

Asset-based credit facility, origination fees included in other current assets

907,000

650,000

Asset-based credit facility, origination fees included in other long-term assets

2,493,000

$ 2,275,000

UNITED STATES

Debt Instrument [Line Items]

Asset-based credit facility, maximum borrowing capacity

158,333,000

Asset-based credit facility, available for letter of credit

20,000,000

Canada

Debt Instrument [Line Items]

Asset-based credit facility, maximum borrowing capacity

31,667,000

Asset-based credit facility, available for letter of credit

5,000,000

United Kingdom

Debt Instrument [Line Items]

Asset-based credit facility, maximum borrowing capacity

40,000,000

Asset-based credit facility, available for letter of credit

$ 2,000,000

Preferred Stock

Debt Instrument [Line Items]

Preferred stock to debt exchange (in shares) | shares

632,000

Initial conversion rate, number of common stock issuable | shares

14.1844

Conversion price per share | $ / shares

$ 7.05

Exchanged for Preferred Stock

Debt Instrument [Line Items]

Convertible senior notes

$ 63,227,000

Private placement purchase agreements

Debt Instrument [Line Items]

Convertible senior notes

$ 49,273,000

Minimum

Debt Instrument [Line Items]

Asset-based credit facility, monthly fees

0.375%

Maximum

Debt Instrument [Line Items]

Asset-based credit facility, monthly fees

0.50%

Scenario 1

Debt Instrument [Line Items]

Applicable margin rate reduction, (in percent)

0.25%

Scenario 1 | Minimum

Debt Instrument [Line Items]

Amount of EBITDA to reduce applicable margin

$ 25,000,000

Scenario 2

Debt Instrument [Line Items]

Applicable margin rate reduction, (in percent)

0.25%

Scenario 2 | Minimum

Debt Instrument [Line Items]

Amount of EBITDA to reduce applicable margin

$ 50,000,000

[1]	Based on Level 2 secondary market quoted prices.

Preferred Stock Offering - Additional Information (Detail)	1 Months Ended			9 Months Ended
	Aug. 31, 2012 USD ($) shares	Aug. 29, 2012 USD ($)	Jun. 30, 2009 USD ($) $ / shares shares	Sep. 30, 2012 USD ($) shares $ / shares	Dec. 31, 2011 $ / shares shares
Class of Stock [Line Items]
Preferred stock, shares issued			1,400,000
Preferred stock, par value \| $ / shares			$ 0.01	$ 0.01	$ 0.01
Gross proceed from Preferred Stock \| $			$ 140,000,000
Preferred stock, issuance cost \| $			$ 6,085,000
Preferred stock, cumulative dividend rate (in percent)		7.50%	7.50%	7.50%
Convertible senior notes \| $		$ 112,500,000
Preferred stock, shares outstanding	417,639			417,639	1,400,000
Initial conversion rate, number of common stock issuable				133.3333
Conversion price per share \| $ / shares				$ 7.50
Preferred stock, liquidation preference, per share \| $ / shares				100
Preferred stock, cumulative dividend rate per share \| $ / shares				$ 7.50
Preferred stock, liquidation preference, value \| $				$ 41,894,000
Redemption of preferred, term				The Company, at its option, may redeem the preferred stock, in whole or in part, at a price equal to 100% of the liquidation preference, plus all accrued and unpaid dividends.
Percentage of per share price of liquidation preference for redemption				100.00%
Preferred Stock
Class of Stock [Line Items]
Preferred stock to debt and common stock exchange (in shares)	982,361
Preferred stock to common stock exchange				(350,000)
Initial conversion rate, number of common stock issuable				14.1844
Conversion price per share \| $ / shares				$ 7.05
Common stock issuable upon conversion, shares				5,924,000
Common Stock
Class of Stock [Line Items]
Preferred stock to common stock exchange	5,866,821			5,867,000
Exchanged for Preferred Stock
Class of Stock [Line Items]
Convertible senior notes \| $	$ 63,227,000	$ 63,227,000

Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Loss per common share-basic and diluted
Net loss	$ (86,798)	$ (62,587)	$ (52,197)	$ (108,835)
Less: Preferred stock dividends	(2,414)	(2,625)	(7,664)	(7,875)
Net loss allocable to common shareholders	$ (89,212)	$ (65,212)	$ (59,861)	$ (116,710)
Weighted-average common shares outstanding-basic and diluted	67,162	64,781	65,740	64,505
Basic and diluted loss per common share	$ (1.33)	$ (1.01)	$ (0.91)	$ (1.81)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Earnings per Common Share - Additional Information (Detail) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Earnings Per Share Disclosure [Line Items]
Antidilutive securities excluded from computation of earnings per share	26,135,000	30,583,000	28,222,000	30,790,000
Preferred Stock
Earnings Per Share Disclosure [Line Items]
Antidilutive securities excluded from computation of earnings per share	14,958,000	19,858,000	18,224,847	19,858,000
Convertible Senior Notes
Earnings Per Share Disclosure [Line Items]
Antidilutive securities excluded from computation of earnings per share	5,275,000		1,758,000

- Definition

Securities (including those issuable pursuant to contingent stock agreements) that could potentially dilute basic earnings per share (EPS) or earnings per unit (EPU) in the future that were not included in the computation of diluted EPS or EPU because to do so would increase EPS or EPU amounts or decrease loss per share or unit amounts for the period presented.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Antidilution
-URI http://asc.fasb.org/extlink&oid=6505113

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Diluted Earnings Per Share
-URI http://asc.fasb.org/extlink&oid=6510752

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Contingent Stock Agreement
-URI http://asc.fasb.org/extlink&oid=6508534

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 128
-Paragraph 40
-Subparagraph c
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 128
-Paragraph 13, 14
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 07-4
-Paragraph 4
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 128
-Paragraph 171
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Inventories (Detail) - USD ($) $ in Thousands	Sep. 30, 2012	Dec. 31, 2011
Inventories:
Raw materials	$ 39,778	$ 46,976
Work-in-process	376	1,286
Finished goods	148,912	184,808
Inventories	$ 189,066	$ 233,070

Sale of Buildings - Additional Information (Detail)	3 Months Ended			9 Months Ended
Sale of Buildings - Additional Information (Detail)	Sep. 30, 2012 USD ($)	Sep. 30, 2011 USD ($)	Mar. 31, 2011 USD ($) Property	Sep. 30, 2012 USD ($)	Sep. 30, 2011 USD ($)
Sale Leaseback Transaction [Line Items]
Number of buildings sold and leased-back \| Property			3
Sale and lease-back agreement term, minimum			1 year
Sale and lease-back agreement term, maximum			5 years
Net proceeds from sale and lease-back			$ 18,079,000
Net gain on sale and lease-back			12,668,000
Lease-back transaction deferred gain recognized	$ 399,000	$ 511,000		$ 1,308,000	$ 1,021,000
Lease-back transaction deferred gain			6,498,000
Asset impairment charges				17,056,000	5,413,000
Building available for sale \| Cost Reduction Initiatives
Sale Leaseback Transaction [Line Items]
Asset impairment charges	$ 7,939,000			$ 7,939,000
General and Administrative Expenses
Sale Leaseback Transaction [Line Items]
Net gain on sale and lease-back			$ 6,170,000		$ 6,170,000

Intangible Assets by Major Asset Class (Detail) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Intangible Assets by Major Class [Line Items]
Gross	$ 133,009	$ 157,680
Accumulated Amortization	38,390	35,745
Net Book Value	94,619	121,935
Trade name, trademark and trade dress and other
Intangible Assets by Major Class [Line Items]
Gross	88,590	108,834
Net Book Value	88,590	108,834
Patents
Intangible Assets by Major Class [Line Items]
Gross	36,459	36,459
Accumulated Amortization	30,502	28,908
Net Book Value	$ 5,957	7,551
Patents \| Minimum
Intangible Assets by Major Class [Line Items]
Useful Life (years)	2 years
Patents \| Maximum
Intangible Assets by Major Class [Line Items]
Useful Life (years)	16 years
Developed technology and other
Intangible Assets by Major Class [Line Items]
Gross	$ 7,960	12,387
Accumulated Amortization	7,888	6,837
Net Book Value	$ 72	$ 5,550
Developed technology and other \| Minimum
Intangible Assets by Major Class [Line Items]
Useful Life (years)	1 year
Developed technology and other \| Maximum
Intangible Assets by Major Class [Line Items]
Useful Life (years)	9 years

Goodwill and Intangible Assets - Additional Information (Detail) - USD ($)	1 Months Ended		3 Months Ended	9 Months Ended
	Mar. 31, 2012	Feb. 29, 2012	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Goodwill and Intangible Assets Disclosure [Line Items]
Aggregate amortization expense on intangible assets				$ 2,645,000	$ 1,793,000
Impairment charges related to uPlay, LLC acquisition				4,527,000
Write-off goodwill related to uPlay, LLC acquisition				629,000
Impairment charges				17,056,000	$ 5,413,000
Proceeds from sales of intangible assets	$ 19,900,000	$ 6,961,000		26,861,000
Net book value of intangible assets sold	$ 20,244,000
Pre-tax net gain from sale of intangible assets				6,602,000
Goodwill			$ 28,853,000	28,853,000		$ 29,203,000
Decrease in goodwill offset amount due to foreign currency fluctuations				279,000
Gross goodwill before impairments			30,602,000	30,602,000		$ 30,323,000
Cost of sales
Goodwill and Intangible Assets Disclosure [Line Items]
Impairment charges			9,892,000	9,892,000
Operating expenses
Goodwill and Intangible Assets Disclosure [Line Items]
Impairment charges			$ 1,425,000	$ 1,425,000

Amortization Expense Related to Intangible Assets (Detail) $ in Thousands	Sep. 30, 2012 USD ($)
Expected Amortization Expense [Line Items]
Remainder of 2012	$ 552
2013	1,389
2014	863
2015	846
2016	846
2017	846
Thereafter	687
Finite-Lived Intangible Assets, Net, Total	$ 6,029

Investments - Additional Information (Detail)	Sep. 30, 2012 USD ($)
Schedule of Cost-method Investments [Line Items]
Investment in TopGolf International, Inc.	$ 20,699,000
Maximum
Schedule of Cost-method Investments [Line Items]
Percentage of ownership interest in TopGolf International, Inc.	20.00%

- Definition

This item represents the aggregate carrying amount of all cost-method investments as reported on or included in the balance sheet. The original cost of the investments may differ from the aggregate carrying amount disclosed due to various adjustments such as: (i) dividends received in excess of earnings after the date of investment that are considered a return of investment and therefore recorded as reductions to cost of the investment, or (ii) a series of operating losses of an investee or other factors which may indicate that a decrease in value of the investment has occurred which is other than temporary and accordingly such decrease in value has been recognized.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.12)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 325
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6872867&loc=d3e40691-111596

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 325
-SubTopic 20
-Section 35
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6383889&loc=d3e40346-111594

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 18
-Paragraph 6
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Staff Position (FSP)
-Number FAS115-1/124-1
-Paragraph 18
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 03-1
-Paragraph 22
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Non-Controlling Interest - Additional Information (Detail) - USD ($)	12 Months Ended
	Dec. 31, 2011	Sep. 30, 2012
Investments in and Advances to Affiliates [Line Items]
Amount loaned to Mauritius	$ 3,200,000
Loan to Mauritius, outstanding	$ 1,988,000	$ 1,988,000

Reconciliation of Reserve for Warranty Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Product Liability Contingency [Line Items]
Beginning balance	$ 7,863	$ 11,982	$ 8,140	$ 8,427
Provision	2,832	1,938	6,605	10,123
Claims paid/costs incurred	(2,562)	(3,931)	(6,612)	(8,561)
Ending balance	$ 8,133	$ 9,989	$ 8,133	$ 9,989

- Definition

Carrying value as of the balance sheet date of obligations incurred through that date and payable for estimated claims under standard and extended warranty protection rights granted to customers. For classified balance sheets, represents the current portion of the liabilities (due within one year or within the normal operating cycle if longer).

+ References + Details

Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Income Taxes [Line Items]
Liability for income taxes associated with uncertain tax positions	$ 7,958,000
Tax benefits associated with potential transfer pricing adjustments	3,306,000
Tax benefits associated with state income taxes	1,041,000
Net amount of unrecognized tax benefit related to uncertain tax positions that would impact, if recognized, effective income tax rate	3,611,000
Interest and penalties related to income tax matters	(61,000)	$ 41,000
Income tax accrued for payment of interest and penalties	$ 919,000		$ 890,000

Major Jurisdictions no Longer Subject to Income Tax Examinations by Tax Authorities (Detail)	9 Months Ended
	Sep. 30, 2012
U.S. federal
Income Tax Examination [Line Items]
Years No Longer Subject to Audit	2008 and prior
California (United States)
Income Tax Examination [Line Items]
Years No Longer Subject to Audit	2006 and prior
Canada
Income Tax Examination [Line Items]
Years No Longer Subject to Audit	2007 and prior
Japan
Income Tax Examination [Line Items]
Years No Longer Subject to Audit	2007 and prior
South Korea
Income Tax Examination [Line Items]
Years No Longer Subject to Audit	2008 and prior
United Kingdom
Income Tax Examination [Line Items]
Years No Longer Subject to Audit	2007 and prior

Commitments and Contingencies - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2012 USD ($)
Long-term Purchase Commitment [Line Items]
Unconditional purchase obligations, range minimum	1 year
Unconditional purchase obligations, range maximum	6 years
Unconditional purchase obligations over next six years	$ 79,206,000
Amount outstanding under letters of credit	$ 3,280,000

Future Purchase Commitments (Detail)	Sep. 30, 2012 USD ($)
Long-term Purchase Commitment [Line Items]
Remainder of 2012	$ 49,101,000
2013	22,786,000
2014	5,728,000
2015	993,000
2016	496,000
2017	102,000
Thereafter
Unconditional purchase obligations over next six years	$ 79,206,000

Share-Based Compensation Including Expense for Phantom Stock Units and Cash Settled Stock Appreciation Rights Granted to Employees (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Cost of employee share-based compensation included in income (loss), before income tax	$ 1,210	$ 1,251	$ 5,086	$ 9,785
Income taxes	(466)	(482)	(1,958)	(3,767)
Amount included in net loss	$ 744	$ 769	$ 3,128	$ 6,018
Impact on net loss per common share:
Basic and diluted	$ (0.01)	$ (0.01)	$ (0.05)	$ (0.09)
Cost of sales
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Cost of employee share-based compensation included in income (loss), before income tax	$ 28	$ 185	$ 175	$ 528
Operating expenses
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Cost of employee share-based compensation included in income (loss), before income tax	$ 1,182	$ 1,066	$ 4,911	$ 9,257

- Definition

Represents the expense recognized during the period arising from equity-based compensation arrangements (for example, shares of stock, unit, stock options or other equity instruments) with employees, directors and certain consultants qualifying for treatment as employees.

+ References + Details

Share-Based Employee Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options, shares granted			5	1,731
Stock options granted during period, weighted average grant-date fair value			$ 2.63	$ 2.94
Compensation expense related to stock options	$ 253	$ 984	$ 1,310	$ 2,802
Stock compensation expense	1,210	1,251	5,086	9,785
Accrued employee compensation and benefits	21,343		21,343		$ 23,785
Accrued employee compensation and benefits, non-current	7,050		$ 7,050		6,970
Executive Compensation Contracts
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock compensation expense				3,551
Total value of share-based awards granted				$ 11,730
Phantom Stock Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock units granted			401	679
Stock units, weighted average grant-date fair value			$ 6.37	$ 7.51
Stock units outstanding, fair value	4,504	5,811	$ 4,504	$ 5,811
Stock compensation expense	361	(74)	1,355	$ 1,560
Accrued employee compensation and benefits	1,020		1,020		1,325
Accrued employee compensation and benefits, non-current	$ 1,110		$ 1,110		594
Phantom Stock Units \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			2 years
Phantom Stock Units \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			3 years
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock units granted	10		393	61
Stock units, weighted average grant-date fair value	$ 5.75		$ 6.36	$ 7.01
Total unrecognized compensation expense related to non-vested shares granted	$ 2,763		$ 2,763
Compensation expense related to restricted stocks	332	$ 222	$ 1,172	$ 1,550
Stock Appreciation Rights (SARs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock units granted		500	3,377	500
Stock units, weighted average grant-date fair value		$ 2.13	$ 2.07	$ 2.13
Stock compensation expense	264	$ 26	$ 1,250	$ 26
Accrued employee compensation and benefits	1,047		1,047		$ 321
Accrued employee compensation and benefits, non-current	$ 524		$ 524

Weighted Average Black-Scholes Fair Value Assumptions used in Valuation of Stock Options Granted (Detail)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Share based Compensation Arrangement by Share based Payment Award, Fair Value Assumptions, Method Used [Line Items]
Dividend yield	1.20%	1.40%
Expected volatility	50.60%	48.50%
Risk free interest rate	0.80%	2.00%
Expected life	4 years 10 months 24 days	5 years

Valuation of Financial Instruments by Pricing Levels (Detail) - USD ($)
$ in Thousands

Sep. 30, 2012

Dec. 31, 2011

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Foreign currency derivative instruments-asset position, carrying value

^[1]

$ 569

$ 2,514

Foreign currency derivative instruments-liability position, carrying value

^[1]

1,529

3,746

Convertible senior notes, carrying value

^[2]

106,925

Observable market based inputs (Level 2)

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Foreign currency exchange contracts, asset derivatives not designated as hedging instruments, fair value

^[1]

569

2,514

Foreign currency exchange contracts, liability derivatives not designated as hedging instruments, fair value

^[1]

1,529

$ 3,746

Convertible senior notes, fair value

^[2]

$ 116,865

[1]	Based on Level 2 observable inputs that are corroborated by market data.
[2]	Based on Level 2 secondary market quoted prices.

Fair Value of Financial Instruments - Additional Information (Detail) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2011
Financial Instruments [Line Items]
Asset impairment charges		$ 17,056,000	$ 5,413,000
Building available for sale \| Cost Reduction Initiatives
Financial Instruments [Line Items]
Asset impairment charges	$ 7,939,000	7,939,000
Write-off Amortizing Intangibles and Goodwill \| Cost Reduction Initiatives
Financial Instruments [Line Items]
Asset impairment charges	5,156,000	5,156,000
Write-off Property Plant and Equipment \| Cost Reduction Initiatives
Financial Instruments [Line Items]
Asset impairment charges	$ 11,317,000	$ 11,317,000

Derivatives and Hedging - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Derivative [Line Items]
Notional amount of foreign currency exchange contracts	$ 197,130,000		$ 197,130,000		$ 165,533,000
Actual foreign currency transactional gains (losses)	(2,752,000)	$ 2,508,000	(60,000)	$ 36,000
Contracts used to hedge exposures in operating results
Derivative [Line Items]
Notional amount of foreign currency exchange contracts	109,990,000		109,990,000		131,311,000
Contracts used to hedge balance sheet exposures denominated in foreign currencies
Derivative [Line Items]
Notional amount of foreign currency exchange contracts	$ 87,140,000		$ 87,140,000		$ 34,222,000

Summary of Fair Value of Derivative Instruments by Contract Type and Location of Asset and/or Liability on Consolidated Condensed Balance Sheets (Detail) - USD ($) $ in Thousands	Sep. 30, 2012	Dec. 31, 2011
Other current assets
Derivatives, Fair Value [Line Items]
Foreign currency exchange contracts, asset derivatives not designated as hedging instruments, fair value	$ 569	$ 2,514
Accounts payable and accrued expenses
Derivatives, Fair Value [Line Items]
Foreign currency exchange contracts, liability derivatives not designated as hedging instruments, fair value	$ 1,529	$ 3,746

Location of Gains and Losses in Consolidated Condensed Statements of Operations that were Recognized and Derivative Contract Type (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Other income (expense)
Derivative Instruments, Gain (Loss) [Line Items]
Foreign currency exchange contracts, amount of gain (loss) recognized in income on derivatives not designated as hedging instruments	$ (4,884)	$ (709)	$ (1,399)	$ (7,763)

Operating Segments (Detail) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2012

Sep. 30, 2011

Sep. 30, 2012

Sep. 30, 2011

Segment Reporting Information [Line Items]

Net sales

$ 147,906

$ 173,243

$ 714,127

$ 732,656

Income (loss) before income taxes

(86,048)

(47,733)

(49,543)

(39,718)

Additions to long-lived assets

2,325

7,092

15,279

21,737

Golf clubs

Segment Reporting Information [Line Items]

Net sales

121,286

140,503

595,123

600,570

Income (loss) before income taxes

^[1],[2]

(57,840)

(23,941)

(7,247)

19,058

Additions to long-lived assets

2,242

4,583

14,956

15,807

Golf ball

Segment Reporting Information [Line Items]

Net sales

26,620

32,740

119,004

132,086

Income (loss) before income taxes

^[1],[2]

(13,789)

(6,637)

(8,047)

(4,638)

Additions to long-lived assets

2,509

323

5,930

Reconciling items

Segment Reporting Information [Line Items]

Income (loss) before income taxes

^[3]

$ (14,419)

$ (17,155)

$ (34,249)

$ (54,138)

[1]	Certain prior period amounts were reclassified to conform with the current year presentation.
[2]	The table below includes total charges absorbed by the Company's operating segments from the restructuring initiatives discussed in Note 2 (in thousands). Three Months Ended September 30, 2012 Nine Months Ended September 30, 2012 Golf Clubs Golf Balls Corporate G&A(3) Total Golf Clubs Golf Balls Corporate G&A(3) Total Cost Reduction Initiatives $ 23,603 $ 9,317 $ 2,164 $ 35,084 $ 25,290 $ 9,650 $ 4,815 $ 39,755 Reorganization and Reinvestment Initiatives 262 141 (112 ) 291 816 249 (54 ) 1,011 Total $ 23,865 $ 9,458 $ 2,052 $ 35,375 $ 26,106 $ 9,899 $ 4,761 $ 40,766 Three Months Ended September 30, 2011 Nine Months Ended September 30, 2011 Golf Clubs Golf Balls Corporate G&A(3) Total Golf Clubs Golf Balls Corporate G&A(3) Total Reorganization and Reinvestment Initiatives $ 4,177 $ 952 $ 2,266 $ 7,395 $ 4,167 $ 958 $ 7,432 $ 12,557 GOS Initiatives 3,923 1,268 38 5,229 12,279 5,061 231 17,571 Total $ 8,100 $ 2,220 $ 2,304 $ 12,624 $ 16,446 $ 6,019 $ 7,663 $ 30,128
[3]	Reconciling items represent corporate general and administrative expenses and other income (expense) not included by management in determining segment profitability. Reconciling items also include the following pre-tax items: • A pre-tax gain of $6,602,000 in connection with the sale of the Top-Flite and Ben Hogan brands during the nine months ended September 30, 2012 (Note 8); • A pre-tax impairment charge of $5,413,000 in connection with certain trademarks and trade names in the nine months ended September 30, 2011 (Note 8); and • A pre-tax gain of $6,170,000 in connection with the sale of certain buildings during the nine months ended September 30, 2011 (Note 7).

Operating Segments (Parenthetical) (Detail) - USD ($)

3 Months Ended

6 Months Ended

9 Months Ended

Sep. 30, 2012

Sep. 30, 2011

Mar. 31, 2011

Jun. 30, 2012

Sep. 30, 2012

Sep. 30, 2011

Segment Reporting Information [Line Items]

Restructuring charges to cost and expense

$ 35,375,000

$ 12,624,000

$ 40,766,000

$ 30,128,000

Gain on sale of intangible assets

6,602,000

Impairment charge

17,056,000

5,413,000

Net gain on sale and lease-back

$ 12,668,000

Cost Reduction Initiatives

Segment Reporting Information [Line Items]

Restructuring charges to cost and expense

35,084,000

$ 4,671,000

39,755,000

Global Operating Strategy

Segment Reporting Information [Line Items]

Restructuring charges to cost and expense

5,229,000

17,571,000

Reorganization and Reinvestment Initiatives

Segment Reporting Information [Line Items]

Restructuring charges to cost and expense

291,000

7,395,000

1,011,000

12,557,000

General and Administrative Expenses

Segment Reporting Information [Line Items]

Net gain on sale and lease-back

$ 6,170,000

6,170,000

Golf clubs

Segment Reporting Information [Line Items]

Restructuring charges to cost and expense

23,865,000

8,100,000

26,106,000

16,446,000

Golf clubs | Cost Reduction Initiatives

Segment Reporting Information [Line Items]

Restructuring charges to cost and expense

23,603,000

25,290,000

Golf clubs | Global Operating Strategy

Segment Reporting Information [Line Items]

Restructuring charges to cost and expense

3,923,000

12,279,000

Golf clubs | Reorganization and Reinvestment Initiatives

Segment Reporting Information [Line Items]

Restructuring charges to cost and expense

262,000

4,177,000

816,000

4,167,000

Golf ball

Segment Reporting Information [Line Items]

Restructuring charges to cost and expense

9,458,000

2,220,000

9,899,000

6,019,000

Golf ball | Cost Reduction Initiatives

Segment Reporting Information [Line Items]

Restructuring charges to cost and expense

9,317,000

9,650,000

Golf ball | Global Operating Strategy

Segment Reporting Information [Line Items]

Restructuring charges to cost and expense

1,268,000

5,061,000

Golf ball | Reorganization and Reinvestment Initiatives

Segment Reporting Information [Line Items]

Restructuring charges to cost and expense

141,000

952,000

249,000

958,000

Corporate G&A

Segment Reporting Information [Line Items]

Restructuring charges to cost and expense

^[1]

2,052,000

2,304,000

4,761,000

7,663,000

Corporate G&A | Cost Reduction Initiatives

Segment Reporting Information [Line Items]

Restructuring charges to cost and expense

^[1]

2,164,000

4,815,000

Corporate G&A | Global Operating Strategy

Segment Reporting Information [Line Items]

Restructuring charges to cost and expense

^[1]

38,000

231,000

Corporate G&A | Reorganization and Reinvestment Initiatives

Segment Reporting Information [Line Items]

Restructuring charges to cost and expense

^[1]

$ (112,000)

$ 2,266,000

$ (54,000)

$ 7,432,000

[1]

Reconciling items represent corporate general and administrative expenses and other income (expense) not included by management in determining segment profitability. Reconciling items also include the following pre-tax items: • A pre-tax gain of $6,602,000 in connection with the sale of the Top-Flite and Ben Hogan brands during the nine months ended September 30, 2012 (Note 8); • A pre-tax impairment charge of $5,413,000 in connection with certain trademarks and trade names in the nine months ended September 30, 2011 (Note 8); and • A pre-tax gain of $6,170,000 in connection with the sale of certain buildings during the nine months ended September 30, 2011 (Note 7).