0000837465-20-000016 | 10-Q | XBRL Viewer

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Cover Page	9 Months Ended
Cover Page	Sep. 30, 2020 shares
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	001-10962
Entity Registrant Name	Callaway Golf Company
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	95-3797580
Entity Address, Address Line One	2180 Rutherford Road
Entity Address, City or Town	Carlsbad
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92008
City Area Code	760
Local Phone Number	931-1771
Entity Current Reporting Status	Yes
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	ELY
Security Exchange Name	NYSE
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	94,179,547
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Entity Central Index Key	0000837465
Current Fiscal Year End Date	--12-31

CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 286,656	$ 106,666
Accounts receivable, net	239,650	140,455
Inventories	324,852	456,639
Income taxes receivable	7,321	9,919
Other current assets	66,667	75,671
Total current assets	925,146	789,350
Property, plant and equipment, net	145,758	132,760
Operating lease right-of-use assets	186,721	160,098
Intangible assets, net	474,973	493,423
Goodwill	56,041	203,743
Deferred taxes, net	51,872	73,948
Investment in golf-related venture	111,442	90,134
Other assets	14,355	17,092
Total assets	1,966,308	1,960,548
Current liabilities:
Accounts payable and accrued expenses	245,053	276,300
Accrued employee compensation and benefits	33,522	46,891
Asset-based credit facilities	30,235	144,580
Accrued warranty expense	9,640	9,636
Operating lease liabilities, short-term	28,011	26,418
Current portion of long-term debt	14,623	7,317
Income taxes payable	10,326	12,104
Total current liabilities	371,410	523,246
Long-term liabilities:
Operating lease liabilities, long-term	170,732	137,696
Long-term debt	651,011	443,259
Income tax liability	7,456	7,264
Deferred taxes, net	60,636	73,483
Other long-term liabilities	16,529	8,247
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $0.01 par value, 3,000,000 shares authorized, none issued and outstanding at September 30, 2020 and December 31, 2019	0	0
Common stock, $0.01 par value, 240,000,000 shares authorized, 95,648,648 shares issued at both September 30, 2020 and December 31, 2019, respectively	956	956
Additional paid-in capital	344,425	323,600
Retained earnings	400,805	489,382
Accumulated other comprehensive loss	(31,323)	(22,422)
Less: Common stock held in treasury, at cost, 1,469,101 and 1,450,875 shares at September 30, 2020 and December 31, 2019, respectively	(26,329)	(24,163)
Total shareholders’ equity	688,534	767,353
Total liabilities and shareholders’ equity	$ 1,966,308	$ 1,960,548

CONSOLIDATED CONDENSED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Preferred stock, par value (usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	3,000,000	3,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	240,000,000	240,000,000
Common stock, shares issued (in shares)	95,648,648	95,648,648
Common Stock held in treasury, shares (in shares)	1,469,101	1,137,470

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Net sales	$ 475,559,000	$ 426,217,000	$ 1,214,831,000	$ 1,389,122,000
Cost of sales	274,826,000	234,828,000	696,369,000	752,483,000
Gross profit	200,733,000	191,389,000	518,462,000	636,639,000
Operating expenses:
Selling expense	93,855,000	101,984,000	285,082,000	334,418,000
General and administrative expense	33,230,000	36,378,000	98,972,000	108,739,000
Research and development expense	10,139,000	12,538,000	33,399,000	38,158,000
Goodwill and trade name impairment	0	0	174,269,000	0
Total operating expenses	137,224,000	150,900,000	591,722,000	481,315,000
Income (loss) from operations	63,509,000	40,489,000	(73,260,000)	155,324,000
Interest income	178,000	94,000	396,000	759,000
Interest expense	(12,905,000)	(9,639,000)	(34,401,000)	(30,203,000)
Other income, net	7,010,000	2,232,000	27,487,000	1,459,000
Income (loss) before income taxes	57,792,000	33,176,000	(79,778,000)	127,339,000
Income tax provision	5,360,000	2,128,000	6,580,000	18,892,000
Net income (loss)	52,432,000	31,048,000	(86,358,000)	108,447,000
Less: Net loss attributable to non-controlling interest	0	0	0	(179,000)
Net income (loss) attributable to Callaway Golf Company	$ 52,432,000	$ 31,048,000	$ (86,358,000)	$ 108,626,000
Earnings (loss) per common share:
Basic (usd per share)	$ 0.56	$ 0.33	$ (0.92)	$ 1.15
Diluted (usd per share)	$ 0.54	$ 0.32	$ (0.92)	$ 1.13
Weighted-average common shares outstanding:
Basic (in shares)	94,171	94,100	94,207	94,284
Diluted (in shares)	96,612	96,287	94,207	96,197

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ 52,432	$ 31,048	$ (86,358)	$ 108,447
Other comprehensive income:
Change in derivative instruments	(593)	661	(14,635)	(8,080)
Foreign currency translation adjustments	9,128	(17,083)	2,347	(18,740)
Comprehensive income (loss), before income tax on other comprehensive income items	60,967	14,626	(98,646)	81,627
Income tax (provision) benefit on derivative instruments	(66)	(666)	3,387	822
Comprehensive income (loss)	60,901	13,960	(95,259)	82,449
Less: Comprehensive loss attributable to non-controlling interests	0	0	0	(339)
Comprehensive income (loss) attributable to Callaway Golf Company	$ 60,901	$ 13,960	$ (95,259)	$ 82,788

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Statements - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net income (loss)	$ (86,358,000)	$ 108,447,000
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	28,668,000	25,471,000
Lease amortization expense	24,293,000	23,615,000
Amortization of debt issuance costs	3,024,000	2,428,000
Debt discount amortization	3,857,000	0
Inventory step-up on acquisition	0	10,703,000
Impairment loss	174,269,000	0
Deferred taxes, net	(117,000)	8,407,000
Non-cash share-based compensation	8,066,000	9,476,000
Loss on disposal of long-lived assets	297,000	649,000
Gain on conversion of note receivable	(1,252,000)	0
Unrealized net (gains) losses on hedging instruments	(8,899,000)	999,000
Change in assets and liabilities, net of effect from acquisitions:
Accounts receivable, net	(96,344,000)	(123,560,000)
Inventories	135,976,000	71,246,000
Other assets	11,097,000	3,547,000
Accounts payable and accrued expenses	(40,042,000)	(37,392,000)
Accrued employee compensation and benefits	(13,252,000)	(5,558,000)
Accrued warranty expense	4,000	412,000
Change in operating leases, net	(21,181,000)	(22,463,000)
Income taxes receivable/payable, net	43,000	(11,573,000)
Other liabilities	402,000	(1,001,000)
Net cash provided by operating activities	122,551,000	63,853,000
Cash flows from investing activities:
Capital expenditures	(30,911,000)	(36,843,000)
Investments in golf related ventures	(19,999,000)	0
Acquisitions, net of cash acquired	0	(463,105,000)
Proceeds from sales of property and equipment	8,000	43,000
Net cash used in investing activities	(50,902,000)	(499,905,000)
Cash flows from financing activities:
Proceeds from issuance of convertible notes	258,750,000	0
Proceeds from issuance of long-term debt	37,728,000	493,167,000
Premium paid for capped call confirmations	(31,775,000)	0
Debt issuance cost	(9,143,000)	(19,088,000)
(Repayments of) proceeds from credit facilities, net	(114,345,000)	70,411,000
Repayments of long-term debt	(8,203,000)	(34,298,000)
Repayments of financing leases	(530,000)	(583,000)
Exercise of stock options	130,000	0
Dividends paid, net	(1,891,000)	(2,834,000)
Acquisition of treasury stock	(22,143,000)	(27,505,000)
Purchase of non-controlling interest	0	(18,538,000)
Net cash provided by financing activities	108,578,000	460,732,000
Effect of exchange rate changes on cash and cash equivalents	(237,000)	(445,000)
Net increase in cash and cash equivalents	179,990,000	24,235,000
Cash and cash equivalents at beginning of period	106,666,000	63,981,000
Cash and cash equivalents at end of period	286,656,000	88,216,000
Supplemental disclosures:
Cash paid for income taxes, net	2,935,000	14,874,000
Cash paid for interest and fees	23,704,000	25,184,000
Non-cash investing and financing activities:
Issuance of treasury stock and common stock for compensatory stock awards released from restriction	19,609,000	19,613,000
Accrued capital expenditures at period-end	$ 777,000	$ 2,283,000

CONSOLIDATED CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) shares in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Treasury Stock	Total Callaway Golf Company Shareholders' Equity	Non- Controlling Interest
Beginning Balance (in shares) at Dec. 31, 2018		95,649				1,138
Beginning Balance at Dec. 31, 2018	$ 734,308,000	$ 956,000	$ 341,241,000	$ 413,799,000	$ (13,700,000)	$ (17,722,000)	$ 724,574,000	$ 9,734,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Acquisition of treasury stock (in shares)						(1,662)
Acquisition of treasury stock	(27,505,000)					$ (27,505,000)	(27,505,000)
Compensatory awards released from restriction (in shares)						872
Compensatory awards released from restriction	0		(19,613,000)			$ 19,613,000
Share-based compensation	9,476,000		9,476,000				9,476,000
Stock dividends (in shares)						385
Stock dividends	0		0	(40,000)		$ 40,000
Cash dividends	(2,834,000)			(2,834,000)			(2,834,000)
Equity adjustment from foreign currency translation	(18,740,000)				(18,401,000)		(18,401,000)	(339,000)
Change in fair value of derivative instruments, net of tax	(7,258,000)				(7,258,000)		(7,258,000)
Acquisition of non-controlling interest	(18,538,000)		(9,322,000)				(9,322,000)	(9,216,000)
Net income (loss)	108,447,000			108,626,000			108,626,000	(179,000)
Ending Balance (in shares) at Sep. 30, 2019		95,649				1,543
Ending Balance at Sep. 30, 2019	777,356,000	$ 956,000	321,782,000	519,551,000	(39,359,000)	$ (25,574,000)	777,356,000	0
Beginning Balance (in shares) at Jun. 30, 2019		95,649				1,555
Beginning Balance at Jun. 30, 2019	761,936,000	$ 956,000	319,579,000	489,445,000	(22,271,000)	$ (25,773,000)	761,936,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Acquisition of treasury stock (in shares)						(7)
Acquisition of treasury stock	(111,000)					$ (111,000)	(111,000)
Compensatory awards released from restriction (in shares)						19
Compensatory awards released from restriction	0		(309,000)			$ 309,000
Share-based compensation	2,512,000		2,512,000				2,512,000
Stock dividends	0			(1,000)		$ 1,000
Cash dividends	(941,000)			(941,000)			(941,000)
Equity adjustment from foreign currency translation	(17,083,000)				(17,083,000)		(17,083,000)
Change in fair value of derivative instruments, net of tax	(5,000)				(5,000)		(5,000)
Net income (loss)	31,048,000			31,048,000			31,048,000
Ending Balance (in shares) at Sep. 30, 2019		95,649				1,543
Ending Balance at Sep. 30, 2019	777,356,000	$ 956,000	321,782,000	519,551,000	(39,359,000)	$ (25,574,000)	777,356,000	$ 0
Beginning Balance (in shares) at Dec. 31, 2019		95,649				1,451
Beginning Balance at Dec. 31, 2019	767,353,000	$ 956,000	323,600,000	489,382,000	(22,422,000)	$ (24,163,000)	767,353,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Adoption of accounting standard	289,000			(289,000)			(289,000)
Acquisition of treasury stock (in shares)						(1,178)
Acquisition of treasury stock						$ (22,143,000)	(22,143,000)
Exercise of stock options (in shares)						20
Exercise of stock options			(203,000)			$ 333,000	130,000
Compensatory awards released from restriction (in shares)						1,138
Compensatory awards released from restriction			(19,609,000)			$ 19,609,000
Share-based compensation			8,066,000				8,066,000
Stock dividends (in shares)						2
Stock dividends			4,000	(39,000)		$ 35,000
Cash dividends	(0.01)			(1,891,000)			(1,891,000)
Equity adjustment from foreign currency translation	2,347,000				2,347,000		2,347,000
Change in fair value of derivative instruments, net of tax					(11,248,000)		(11,248,000)
Equity component of convertible notes, net of issuance costs and tax	57,080,000		57,080,000
Premiums paid for capped call transactions, net of tax	(24,513,000)		(24,513,000)
Net income (loss)	(86,358,000)			(86,358,000)			(86,358,000)
Ending Balance (in shares) at Sep. 30, 2020		95,649				1,469
Ending Balance at Sep. 30, 2020	688,534,000	$ 956,000	344,425,000	400,805,000	(31,323,000)	$ (26,329,000)	688,534,000
Beginning Balance (in shares) at Jun. 30, 2020		95,649				1,485
Beginning Balance at Jun. 30, 2020		$ 956,000	341,615,000	348,376,000	(39,792,000)	$ (26,607,000)	624,548,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Acquisition of treasury stock (in shares)						(10)
Acquisition of treasury stock						$ (190,000)	(190,000)
Compensatory awards released from restriction (in shares)						26
Compensatory awards released from restriction			(466,000)			$ 466,000
Share-based compensation			3,272,000				3,272,000
Stock dividends			1,000	(3,000)		$ 2,000
Equity adjustment from foreign currency translation	9,128,000				9,128,000		9,128,000
Change in fair value of derivative instruments, net of tax					(659,000)		(659,000)
Equity component of convertible notes, net of issuance costs and tax	3,000		3,000
Net income (loss)	52,432,000			52,432,000			52,432,000
Ending Balance (in shares) at Sep. 30, 2020		95,649				1,469
Ending Balance at Sep. 30, 2020	$ 688,534,000	$ 956,000	$ 344,425,000	$ 400,805,000	$ (31,323,000)	$ (26,329,000)	$ 688,534,000

Basis of Presentation

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Basis of Presentation

Note 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 (the “Commission”). Accordingly, certain information and 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, 2019 filed with the Commission. These consolidated condensed financial statements, in the opinion of management, include all the normal and recurring 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 judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Examples of such estimates include provisions for warranty, uncollectible accounts receivable, inventory obsolescence, sales returns, and tax contingencies and estimates related to the Tax Act enacted in December 2017, and estimates on the valuation of share-based awards and recoverability of long-lived assets and investments. Actual results may materially differ from these estimates. On an ongoing basis, the Company reviews its estimates to ensure that these estimates appropriately reflect changes in its business or as new information becomes available.

Recent Accounting Standards

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity." This ASU simplifies accounting for convertible instruments, removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, and also simplifies the diluted earnings per share (EPS) calculation in certain areas. This ASU is effective for public filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. Early adoption is permitted. The Company is currently evaluating the impact this ASU will have on its consolidated condensed financial statements and disclosures.

In March 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This ASU provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. This ASU is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact this ASU will have on its consolidated condensed financial statements and disclosures.

In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This ASU removes specific exceptions to the general principles in Accounting Standards Codification ("ASC") Topic 740, "Accounting for Income Taxes" ("Topic 740") and simplifies certain U.S. GAAP requirements. ASU 2019-12 is effective for public filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the impact this ASU will have on its consolidated condensed financial statements and disclosures.

Adoption of New Accounting Standards

On January 1, 2020, the Company adopted ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("Topic 326") utilizing the modified retrospective approach. This new standard is intended to improve financial reporting by requiring timelier recording of credit losses on the Company's trade account receivable and requires the measurement of all expected credit losses based on historical experience, current

conditions, and reasonable and supportable forecasts. Upon the completion of the Company's assessment of Topic 326, the Company concluded that its prior methodology of estimating credit losses on its trade accounts receivable closely aligns with the requirements of the new standard, and therefore, the adoption of this ASU did not have a material impact on the Company consolidated condensed financial statements. For further information, see Note 4. Upon adoption of Topic 326, the Company recorded a cumulative adjustment to beginning retained earnings of $289,000, which reflected an increase to the allowance for doubtful accounts. As the impact to the Company's consolidated condensed financial statements in the first quarter of 2020 was not material, prior period information that is presented for comparative purposes has not been restated and continues to be reported under the accounting standards that were in effect during those periods.

On January 1, 2020, the Company adopted ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement." The amendments in this ASU removed, modified or added to the disclosure requirements for fair value measurements in ASC Topic 820, "Fair Value Measurement." The adoption of this ASU did not have a material impact on the Company's consolidated condensed financial statements and disclosures.

Leases

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

Note 2. Leases

The Company leases office space, manufacturing plants, warehouses, distribution centers and vehicles and equipment, as well as retail and/or outlet locations related to the TravisMathew and Jack Wolfskin businesses and the apparel business in Japan. Certain real estate leases include one or more options to extend the lease term or options to purchase the leased property at the Company's sole discretion. When deemed reasonably certain of exercise, the renewal and purchase options are included in the determination of the lease term and lease payment obligation, respectively. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Right-of-use ("ROU") assets represent the right to use an underlying asset during the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. When readily determinable, the Company uses the rate implicit in the lease agreement in determining the present value of minimum lease payments. If the implicit rate is not provided, the Company uses its incremental borrowing rate based on information available at the lease commencement date, including the lease term. At the commencement of a lease, the ROU asset for operating leases is measured by taking the sum of the present value of the lease liability, initial direct costs (if any) and prepaid lease payments (if any), and deducting lease incentives (if any). After the lease commencement date and over the lease term, lease expense is recognized as a single lease cost on a straight-line basis. Lease agreements related to properties are generally comprised of lease components and non-lease components. Non-lease components, such as common area maintenance charges, are expensed as incurred and recognized separately from the straight-line lease expense. Variable lease payments that do not depend on an index or rate, such as rental payments based on a percentage of retail sales over contractual levels, are expensed separately as incurred, and are not included in the measurement of the ROU asset and lease liability. Variable lease payments that depend on an index or rate, such as payments that are adjusted periodically for inflation, are included in the measurement of the ROU asset and lease liability and are recognized on a straight-line basis over the lease term.

In response to the COVID-19 pandemic, the Company received certain rent concessions in the form of deferments and abatements on a few of its operating leases. The Company opted to not modify these leases in accordance with the FASB Staff Q&A-Topic 842 and Topic 840: "Accounting For Lease Concessions Related to the Effects of the COVID-19 Pandemic" issued in April 2020, and account for these concessions as if they were made under the enforceable rights included in the original agreement. Rent deferments were recorded as a payable and paid at a later negotiated date. Rent abatements were recognized as reductions in rent expense over the periods covered by the abatement period. The Company received rent deferments of $687,000, which were recorded in accounts payable and accrued expenses in the Consolidated Condensed Balance Sheet as of September 30, 2020, and rent abatements of $120,000 and $1,431,000, which were recorded as reductions in rent expense in the Consolidated Condensed Statements of Operations for the three and nine months ended September 30, 2020, respectively.

Supplemental balance sheet information related to leases is as follows (in thousands):



	Balance Sheet Location	September 30, 2020		December 31, 2019
Operating leases
ROU assets, net	Operating lease ROU assets, net	$	186,721	$	160,098
Lease liabilities, short-term	Operating lease liabilities, short-term	$	28,011	$	26,418
Lease liabilities, long-term	Operating lease liabilities, long-term	$	170,732	$	137,696

Finance Leases
ROU assets, net,	Other assets	$	930	$	1,263
Lease liabilities, short-term	Accounts payable and accrued expenses	$	271	$	589
Lease liabilities, long-term	Long-term other	$	493	$	558

The components of lease expense are as follows (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Operating lease costs	$	10,458	$	8,758	$	31,759	$	28,357
Financing lease costs:
Amortization of right-of-use assets	185		180		505		657
Interest on lease liabilities	9		14		31		69
Total financing lease costs	194		194		536		726
Variable lease costs	590		1,091		2,473		3,277
Total lease costs	$	11,242	$	10,043	$	34,768	$	32,360

Other information related to leases was as follows (in thousands):



	Nine Months Ended September 30,
Supplemental Cash Flows Information	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	29,122	$	29,783
Operating cash flows from finance leases	$	31	$	69
Financing cash flows from finance leases	$	530	$	583

Lease liabilities arising from new ROU assets:
Operating leases	$	54,678	$	8,819
Finance leases	$	131	$	172



	September 30, 2020		December 31, 2019
Weighted average remaining lease term (years):
Operating leases	10.0		10.4
Finance leases	3.1		2.8

Weighted average discount rate:
Operating leases	5.4	%	5.7	%
Finance leases	3.5	%	4.2	%

Future minimum lease obligations as of September 30, 2020 were as follows (in thousands):



	Operating Leases		Finance Leases
Remainder of 2020	$	10,644	$	89
2021	36,073		274
2022	31,426		234
2023	27,259		124
2024	23,591		51
Thereafter	130,615		31
Total future lease payments	259,608		803
Less: imputed interest	60,865		39
Total	$	198,743	$	764

Leases

Note 2. Leases

Supplemental balance sheet information related to leases is as follows (in thousands):



	Balance Sheet Location	September 30, 2020		December 31, 2019
Operating leases
ROU assets, net	Operating lease ROU assets, net	$	186,721	$	160,098
Lease liabilities, short-term	Operating lease liabilities, short-term	$	28,011	$	26,418
Lease liabilities, long-term	Operating lease liabilities, long-term	$	170,732	$	137,696

Finance Leases
ROU assets, net,	Other assets	$	930	$	1,263
Lease liabilities, short-term	Accounts payable and accrued expenses	$	271	$	589
Lease liabilities, long-term	Long-term other	$	493	$	558

The components of lease expense are as follows (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Operating lease costs	$	10,458	$	8,758	$	31,759	$	28,357
Financing lease costs:
Amortization of right-of-use assets	185		180		505		657
Interest on lease liabilities	9		14		31		69
Total financing lease costs	194		194		536		726
Variable lease costs	590		1,091		2,473		3,277
Total lease costs	$	11,242	$	10,043	$	34,768	$	32,360

Other information related to leases was as follows (in thousands):



	Nine Months Ended September 30,
Supplemental Cash Flows Information	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	29,122	$	29,783
Operating cash flows from finance leases	$	31	$	69
Financing cash flows from finance leases	$	530	$	583

Lease liabilities arising from new ROU assets:
Operating leases	$	54,678	$	8,819
Finance leases	$	131	$	172



	September 30, 2020		December 31, 2019
Weighted average remaining lease term (years):
Operating leases	10.0		10.4
Finance leases	3.1		2.8

Weighted average discount rate:
Operating leases	5.4	%	5.7	%
Finance leases	3.5	%	4.2	%

Future minimum lease obligations as of September 30, 2020 were as follows (in thousands):



	Operating Leases		Finance Leases
Remainder of 2020	$	10,644	$	89
2021	36,073		274
2022	31,426		234
2023	27,259		124
2024	23,591		51
Thereafter	130,615		31
Total future lease payments	259,608		803
Less: imputed interest	60,865		39
Total	$	198,743	$	764

Revenue Recognition

9 Months Ended

Sep. 30, 2020

Revenue Recognition [Abstract]

Revenue Recognition

Note 3. Revenue Recognition

The Company recognizes revenue from the sale of its products, which include golf clubs, golf balls, lifestyle and outdoor apparel, gear and accessories, in addition to golf apparel and accessories. The Company sells its products to customers, which include on- and off-course golf shops and national retail stores, as well as to consumers through its e-commerce business and at its apparel retail locations. In addition, the Company recognizes royalty income from third parties from the licensing of certain soft goods products, as well as revenue from gift cards.

The Company's contracts with customers are generally in the form of a purchase order. In certain cases, the Company enters into sales agreements containing specific terms, discounts and allowances. In addition, the Company enters into licensing agreements with certain distributors.

The Company has two operating and reportable segments, namely the Golf Equipment operating segment and the Apparel, Gear and Other operating segment. The following table presents the Company's revenue disaggregated by major product category and operating and reportable segment (in thousands):



	Operating and Reportable Segments
	Three Months Ended September 30, 2020						Three Months Ended September 30, 2019
	Golf Equipment		Apparel, Gear & Other		Total		Golf Equipment		Apparel, Gear & Other		Total
Major product category:
Golf Clubs	$	209,356	$	—	$	209,356	$	168,005	$	—	$	168,005
Golf Balls	57,921		—		57,921		42,497		—		42,497
Apparel	—		125,609		125,609		—		139,998		139,998
Gear, Accessories & Other	—		82,673		82,673		—		75,717		75,717
	$	267,277	$	208,282	$	475,559	$	210,502	$	215,715	$	426,217



	Operating and Reportable Segments
	Nine Months Ended September 30, 2020						Nine Months Ended September 30, 2019
	Golf Equipment		Apparel, Gear & Other		Total		Golf Equipment		Apparel, Gear & Other		Total
Major product category:
Golf Clubs	$	616,620	$	—	$	616,620	$	653,531	$	—	$	653,531
Golf Balls	152,261		—		152,261		172,943		—		172,943
Apparel	—		239,201		239,201		—		309,439		309,439
Gear, Accessories & Other	—		206,749		206,749		—		253,209		253,209
	$	768,881	$	445,950	$	1,214,831	$	826,474	$	562,648	$	1,389,122

The Company sells its golf equipment products and apparel, gear and accessories in the United States and internationally, with its principal international regions being Japan and Europe. On a regional basis, sales of golf equipment products are generally higher than sales of apparel, gear and other products, with the exception of Europe as a result of the Jack Wolfskin acquisition completed in January 2019.

The following table presents information about the geographical areas in which the Company operates. Revenues are attributed to the location to which the product was shipped (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Major Geographic Region:
United States	$	214,619	$	161,631	$	603,836	$	658,051
Europe	134,680		133,351		281,473		341,594
Japan	56,530		64,176		158,517		193,080
Rest of World	69,730		67,059		171,005		196,397
	$	475,559	$	426,217	$	1,214,831	$	1,389,122

Product Sales

The Company recognizes revenue from the sale of its products when it satisfies the terms of a sales order from a customer, and transfers control of the products ordered to the customer. Control transfers when products are shipped, and in certain cases, when products are received by customers. In addition, the Company recognizes revenue at the point of sale on transactions with consumers at its retail locations. Sales taxes, value added taxes and other taxes that are collected in connection with revenue transactions are withheld and remitted to the respective taxing authorities. As such, these taxes are excluded from revenue. The Company elected to account for shipping and handling as activities to fulfill the promise to transfer the good. Therefore, shipping and handling fees that are billed to customers are recognized in revenue and the associated shipping and handling costs are recognized in cost of goods sold as soon as control of the goods transfers to the customer.

Royalty Income

Royalty income is recognized over time in net sales as underlying product sales occur, subject to certain minimum royalties, in accordance with the related licensing arrangements. Royalty income is included in the Company's Apparel, Gear and Other operating segment. Total royalty income for the three months ended September 30, 2020 and 2019 was $5,849,000 and $5,466,000, respectively, and $14,946,000 and $15,611,000 for the nine months ended September 30, 2020 and 2019, respectively.

Gift Cards

Revenues from gift cards are deferred and recognized when the cards are redeemed. The Company’s gift cards have no expiration date. The Company recognizes revenue from unredeemed gift cards, otherwise known as breakage, when the likelihood of redemption becomes remote and under circumstances that comply with any applicable state escheatment laws. To determine when redemption is remote, the Company analyzes an aging of unredeemed cards (based on the date the card was last used or the activation date if the card has never been used) and compares that information with historical redemption trends. The Company uses this historical redemption rate to recognize breakage on unredeemed gift cards over the redemption period. The Company does not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions used to determine the timing of recognition of gift card revenues. As of September 30, 2020 and December 31, 2019, the Company's deferred revenue liability for gift cards was $2,046,000 and $2,190,000, respectively. During the three months ended September 30, 2020 and 2019, the Company recognized $795,000 and $528,000 of deferred gift card revenue, respectively, and $1,825,000 and $1,515,000 during the nine months ended September 30, 2020 and 2019, respectively.

Variable Consideration

The amount of revenue the Company recognizes is based on the amount of consideration it expects to receive from customers. The amount of consideration is the sales price adjusted for estimates of variable consideration, including sales returns, discounts and allowances as well as sales programs, sales promotions and price concessions that are offered by the Company as described below. These estimates are based on the amounts earned or to be claimed by customers on the related sales, and are therefore recorded as reductions to sales and trade accounts receivable.

The Company’s primary sales program, the “Preferred Retailer Program,” offers potential rebates and discounts for participating retailers in exchange for providing certain benefits to the Company, including the maintenance of agreed upon inventory levels, prime product placement and retailer staff training. Under this program, qualifying retailers can earn either discounts or rebates based upon the amount of product purchased. Discounts are applied and recorded at the time of sale. For

rebates, the Company estimates the amount of variable consideration related to the rebate at the time of sale based on the customer’s estimated qualifying current year product purchases. The estimate is based on the historical level of purchases, adjusted for any factors expected to affect the current year purchase levels. The estimated year-end rebate is adjusted quarterly based on actual purchase levels, as necessary. The Preferred Retailer Program is generally short-term in nature and the actual amount of rebate to be paid under this program is known as of the end of the year and paid to customers shortly after year-end. Historically, the Company's actual amount of variable consideration related to its Preferred Retailer Program has not been materially different from its estimates.

The Company also offers short-term sales program incentives, which include sell-through promotions and price concessions or price reductions. Sell-through promotions are generally offered throughout the product's life cycle of approximately two years, and price concessions or price reductions are generally offered at the end of the product's life cycle. The estimated variable consideration related to these programs is based on a rate that includes historical and forecasted data. The Company records a reduction to net sales using this rate at the time of the sale. The Company monitors this rate against actual results and forecasted estimates and adjusts the rate as deemed necessary in order to reflect the amount of consideration it expects to receive from its customers. There were no material changes to the rate during the three and nine months ended September 30, 2020 and 2019. Historically, the Company's actual amount of variable consideration related to these sales programs has not been materially different from its estimates.

The Company records an estimate for anticipated returns as a reduction of sales and cost of sales, and accounts receivable, in the period that the related sales are recorded. Sales returns are estimated based upon historical returns, current economic trends, changes in customer demands and sell-through of products. The Company also offers certain customers sales programs that allow for specific returns. The Company records a return liability as an offset to accounts receivable for anticipated returns related to these sales programs at the time of the sale based on the terms of the sales program. The cost recovery of inventory associated with this reserve is accounted for in other current assets. Historically, the Company’s actual sales returns have not been materially different from management’s original estimates.

Estimated Credit Losses (Notes)

9 Months Ended

Sep. 30, 2020

Estimated Credit Losses [Abstract]

Estimated Credit Losses

Note 4. Estimated Credit Losses

The Company's trade accounts receivable are recorded at net realizable value, which includes an appropriate allowance for estimated credit losses, as well as reserves related to product returns and sales programs as described in Note 3. Under ASC Topic 326, the “expected credit loss” model replaces the “incurred loss” model and requires consideration of a broader range of information to estimate expected credit losses over the life of the asset. The Company's prior methodology for estimating credit losses on trade accounts receivable did not differ significantly from the new requirements of ASC 326. Specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. An estimate of credit losses for the remaining customers in the aggregate is based upon historical bad debts, current customer receivable balances, age of customer receivable balances, the customers' financial condition, all of which are subject to change. Additionally, the Company’s monitoring activities now consider future reasonable and supportable forecasts of economic conditions to adjust all general reserve percentages as necessary. Balances are written off when determined to be uncollectible. The Company considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and determined, based on current information, that the estimate of credit losses as of September 30, 2020 was not significantly impacted.

Actual uncollected amounts have historically been consistent with the Company’s expectations. The Company's payment terms on its receivables from customers are generally 60 days or less.

The following table provides a reconciliation of the activity related to the Company’s allowance for estimated credit losses (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Beginning balance	$	8,944		$	5,499		$	5,992		$	5,610
Adjustment due to the adoption of Topic 326	—			—			289			—
Provision for credit losses	(1,340		)	778			2,292			920
Write-off of uncollectible amounts, net of recoveries	(258		)	(155		)	(1,227		)	(408		)
Ending balance	$	7,346		$	6,122		$	7,346		$	6,122

- Definition

The entire disclosure for credit loss on financial instrument measured at amortized cost basis, net investment in lease, off-balance sheet credit exposure, and available-for-sale debt security.

+ References + Details

Business Combinations

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Business Combinations

Note 5. Business Combinations

Acquisition of JW Stargazer Holding GmbH

In January 2019, the Company completed the acquisition of JW Stargazer Holding GmbH, the owner of the international, premium outdoor apparel, gear and accessories brand, Jack Wolfskin, for €457,394,000 (including cash acquired of €50,984,000) or approximately $521,201,000 (including cash acquired of $58,096,000) (using the exchange rate in effect on the acquisition date), subject to working capital adjustments. The Company financed the acquisition with a Term Loan B facility in the aggregate principal amount of $480,000,000 (see Note 6). Jack Wolfskin designs premium outdoor apparel, gear and accessories targeted at the active outdoor and urban outdoor customer categories. This acquisition further enhanced the Company's lifestyle category and provided a platform for future growth in the active outdoor and urban outdoor categories, which the Company believes are complementary to its portfolio of brands and product capabilities. In addition, the Company realized synergies with respect to supply chain operations as well as warehousing and distribution activities.

The Company allocated the purchase price to the net identifiable tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the date of acquisition. The excess of the purchase price over the estimated fair value of the net assets and liabilities was allocated to goodwill. The Company determined the estimated fair values after review and consideration of relevant information as of the acquisition date, including discounted cash flows, quoted market prices and estimates made by management.

The allocation of the purchase price presented below was based on management's estimate of the fair values of the acquired assets and assumed liabilities using valuation techniques including income, cost and market approaches. These valuation techniques incorporate the use of expected future revenues, cash flows and growth rates as well as estimated discount rates. Current and noncurrent assets and liabilities are valued at historical carrying values, which approximates fair value. Inventory was valued using the net realizable value approach, which was based on the estimated selling price in the ordinary course of business less reasonable disposal costs and a profit on the disposal efforts. The customer and distributor relationships were valued under the income approach based on the present value of future earnings. The Company amortizes the fair value of these relationships over a 10-year period. The trade name was valued under the royalty savings income approach method, which is equal to the present value of the after-tax royalty savings attributable to owning the trade name as opposed to paying a third party for its use. For this valuation the Company used a royalty rate of 5.0%, which is reflective of royalty rates paid in market transactions, and a discount rate of 10.0% on the future cash flows generated by the net after-tax savings. The goodwill of $150,180,000 arising from the acquisition consists largely of the synergies that were expected from combining the operations of the Company and Jack Wolfskin. Due to the recent significant business disruptions and challenges caused by the COVID-19 pandemic, the Company performed a quantitative assessment of goodwill and determined that the goodwill associated with its Jack Wolfskin reporting unit was impaired. As a result, the Company recorded an impairment charge of $148,375,000 in the second quarter of 2020, in addition to an impairment charge of $25,894,000 related to the Jack Wolfskin trade name (see Note 9).

As of December 31, 2019, the Company completed its evaluation of information that existed as of the acquisition date and finalized the purchase price allocation of the underlying acquired assets and liabilities. The resulting adjustments were offset against goodwill. The final assessment included the completion of the market analysis of the operating leases assumed, and the completion of the fair value assessment of the deferred taxes acquired. As a non-taxable stock acquisition, the value attributable to the acquired intangible assets and goodwill are not tax deductible, accordingly, the Company recognized a net deferred tax liability of $77,079,000, including a valuation reserve of $8,281,000 on certain deferred tax assets. In addition, the Company recognized certain adjustments on income taxes receivable and long-term income taxes payable. The Company's final assessment also included adjustments related to certain sales returns reserves and inventory obsolescence reserves, and adjustments to the useful lives of certain property, plant and equipment. All of the goodwill was assigned to the Apparel, Gear and Other operating segment.

In connection with the acquisition, during the year ended December 31, 2019, the Company recognized transaction costs of approximately $9,987,000, of which $6,326,000 was recognized in general and administrative expenses during the nine months ended September 30, 2019. There were no transaction costs incurred during the three months ended September 30, 2019, or in the three and nine months ended September 30, 2020. In addition, the Company recorded a loss of $3,215,000 in other income (expense) in the first quarter of 2019 upon the settlement of a foreign currency forward contract to mitigate the risk of foreign currency fluctuations on the purchase price, which was denominated in Euros (EUR). The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date based on the purchase price allocation (in thousands):



	At January 4, 2019
Assets Acquired
Cash		$	58,096
Accounts receivable		26,637
Inventories		94,504
Income tax receivable		6,588
Other current assets		11,483
Property and equipment		20,930
Operating lease right-of-use assets		120,865
Deferred tax assets		2,930
Other assets		23
Intangibles - trade name⁽¹⁾		239,295
Intangibles - retail partners & distributor relationships		38,743
Goodwill⁽¹⁾		150,180
Total assets acquired		770,274
Liabilities Assumed
Accounts Payable and accrued liabilities		46,124
Income taxes payable, long-term		2,416
Operating lease liabilities		120,524
Deferred tax liabilities		80,009
Net assets acquired		$	521,201


(1)	In the second quarter of 2020, the Company wrote down goodwill and the Jack Wolfskin trade name to their fair values, which resulted in impairment charges of $148,375,000 and $25,894,000, respectively (see Note 9).

Proposed Acquisition of Topgolf International, Inc.

On October 27, 2020, the Company entered into a definitive agreement to acquire Topgolf in an all-stock transaction, pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) by and among the Company, Topgolf and 51 Steps, Inc., a Delaware corporation and wholly-owned subsidiary of Callaway (“Merger Sub”). The Merger Agreement provides that, among other matters, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, the Company will acquire Topgolf by way of a merger of Merger Sub with and into Topgolf, with Topgolf surviving as a wholly-owned subsidiary of Callaway (the “Merger”).

The Company currently estimates that it will issue approximately 90,000,000 shares of its common stock to the stockholders of Topgolf (excluding the Company) for 100% of the outstanding equity of Topgolf, using an exchange ratio based on an equity value of Topgolf of approximately $1,986,000,000 (or approximately $1,745,000,000 excluding Topgolf shares currently held by the Company) and a price per share of the Company’s common stock fixed at $19.40 per share. The Company currently holds approximately 14.3% of Topgolf's outstanding shares. Upon completion of the Merger, the former Topgolf stockholders (other than the Company) are expected to own approximately 48.5% of the combined company on a fully diluted basis. The Company will also assume certain outstanding Topgolf stock options, which will be converted into options to purchase the Company’s common stock, generally using the same exchange ratio. The Merger Agreement further provides that, upon termination of the Merger Agreement under specified circumstances, either party may be required to pay the other party a termination fee of $75,000,000. The Merger is expected to close in the first quarter of 2021, subject to shareholder approval and other customary conditions.

In connection with the Merger, the Company will prepare and file a registration statement on Form S-4, in which a proxy statement will be included as a prospectus, to register the Company’s common stock to be issued to Topgolf stockholders in connection with the Merger and solicit the approval of the Company’s stockholders of the issuance of the Company’s common stock that represents more than 20% of the shares of the Company’s common stock outstanding immediately prior to the closing of the Merger to Topgolf stockholders in connection with the Merger, pursuant to the rules and regulations of the New York Stock Exchange.

Topgolf is a leading tech-enabled golf entertainment business, with an innovative platform that comprises its state-of-the-art open-air golf and entertainment venues, revolutionary Toptracer ball-tracking technology and innovative media platform with a differentiated position in eSports. The combined company will benefit from a compelling family of brands with reach across multiple channels including retail, venues, e-commerce and digital communities.

Financing Arrangements

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Financing Arrangements

Note 6. Financing Arrangements

In addition to cash on hand, as well as cash generated from operations, the Company relies on its U.S. and Japan asset-based revolving credit facilities to manage seasonal fluctuations in liquidity and to provide additional liquidity when the Company’s operating cash flows are not sufficient to fund the Company’s requirements. As of September 30, 2020, the Company had $30,235,000 outstanding under these facilities and $286,656,000 in cash and cash equivalents. As of September 30, 2020, the Company's available liquidity, which is comprised of cash on hand, including cash received from the issuance of Convertible Senior Notes in May 2020, and amounts available under both facilities, after letters of credit and outstanding borrowings, was $636,891,000. As of September 30, 2019, the Company had $110,711,000 outstanding under these facilities, $1,014,000 in outstanding letters of credit, and $88,216,000 in cash and cash equivalents. As of September 30, 2019, the Company's available liquidity, which is comprised of cash on hand and amounts available under both facilities, after letters of credit and outstanding borrowings, was $340,186,000.

U.S. Asset-Based Revolving Credit Facility

In May 2019, the Company amended and restated its primary credit facility (the Fourth Amended and Restated Loan and Security Agreement, as amended in August 2019, March 2020 and April 2020) with Bank of America N.A. and other lenders (the “ABL Facility”), which provides a senior secured asset-based revolving credit facility of up to $400,000,000, comprised of a $260,000,000 U.S. facility, a $70,000,000 German facility, a $25,000,000 Canadian facility and a $45,000,000 United Kingdom facility, in each case subject to borrowing base availability under the applicable facility. The amounts outstanding under the ABL Facility are secured by certain assets, including cash (to the extent pledged by the Company), certain intellectual property, certain eligible real estate, inventory and accounts receivable of the Company’s subsidiaries in the United States, Germany, Canada and the United Kingdom. The real estate and intellectual property components of the borrowing base under the ABL Facility are both amortizing. The amount available for the real estate portion is reduced quarterly over a 15-year period, and the amount available for the intellectual property portion is reduced quarterly over a 3-year period. In connection with entering into the Merger Agreement (see Note 5), on October 27, 2020, the Company amended the ABL Facility to, among other things, permit the consummation of the Merger, designate Topgolf and its subsidiaries as excluded subsidiaries under the ABL Facility and amend certain covenants and other provisions to allow the Company to make certain investments in, and enter into certain transactions with Topgolf. Fees in connection with this amendment will be combined with existing debt origination and amendment fees and amortized over the remaining term of the ABL Facility.

As of September 30, 2020, the Company had $28,813,000 in borrowings outstanding under the ABL Facility. Amounts available under the ABL Facility fluctuate with the general seasonality of the business and increase and decrease with changes in the Company’s inventory and accounts receivable balances. With respect to the Company's Golf Equipment business, inventory balances are generally higher in the fourth and first quarters, primarily to meet demand during the height of the golf season, and accounts receivable are generally higher during the first half of the year when sales are higher. Average outstanding borrowings during the nine months ended September 30, 2020 were $134,838,000, and average amounts available under the ABL Facility during the nine months ended September 30, 2020, after outstanding borrowings and letters of credit, was approximately $208,055,000. Amounts borrowed under the ABL Facility may be repaid and borrowed as needed. The entire outstanding principal amount (if any) is due and payable in May 2024.

The ABL Facility includes certain restrictions including, among other things, restrictions on the incurrence of additional debt, liens, stock repurchases and other restricted payments, asset sales, investments, mergers, acquisitions and affiliate transactions. In April 2020, the Company amended the ABL Facility to permit a customary capped call transaction (see "Convertible Senior Notes" below) in connection with the issuance of convertible debt securities by the Company and to permit the Company to incur loans or financial assistance of up to $50,000,000 pursuant to governmental programs enacted due to the COVID-19 pandemic. As of September 30, 2020, the Company had not drawn on these funds. In addition, the ABL Facility imposes restrictions on the amount the Company could pay in annual cash dividends, including certain restrictions on the amount of additional indebtedness and requirements to maintain a certain fixed charge coverage ratio under certain circumstances.

As of September 30, 2020, the Company was in compliance with all financial covenants of the ABL Facility. Additionally, the Company is subject to compliance with a fixed charge coverage ratio covenant of at least 1.0 to 1.0 during, and continuing 30 days after, any period in which the Company’s borrowing base availability, as amended, falls below 10% of the maximum facility amount or $40,000,000. The Company’s borrowing base availability was above $40,000,000 during the nine months ended September 30, 2020, and the Company was in compliance with the fixed charge coverage ratio as of September 30, 2020. Had the Company not been in compliance with the fixed charge coverage ratio as of September 30, 2020, the maximum amount of additional indebtedness that could have been outstanding on September 30, 2020 would have been reduced by $40,000,000.

The interest rate applicable to outstanding loans under the ABL Facility fluctuates depending on the Company’s “availability ratio," which is expressed as a percentage of (i) the average daily availability under the ABL Facility to (ii) the sum of the Canadian, the German, the U.K. and the U.S. borrowing bases, as adjusted. At September 30, 2020 the Company’s trailing 12 month average interest rate applicable to its outstanding loans under the ABL Facility was 3.78%. Additionally, the ABL Facility provides for monthly fees of 0.25% of the unused portion of the ABL Facility.

The fees incurred in connection with the origination and prior amendments of the ABL Facility totaled $3,615,000, which are amortized into interest expense over the term of the ABL Facility agreement. Unamortized origination fees at September 30, 2020 and December 31, 2019 were $1,834,000 and $2,115,000, respectively, of which $880,000 and $746,000, respectively, were included in other current assets and $954,000 and $1,369,000, respectively, were included in other long-term assets in the accompanying consolidated condensed balance sheets.

Japan ABL Facilities

In January 2018, the Company refinanced the asset-based loan agreement between its subsidiary in Japan and The Bank of Tokyo-Mitsubishi UFJ, Ltd (the "2018 Japan ABL Facility"), which provides a credit facility of up to 4,000,000,000 Yen (or U.S. $37,932,000, using the exchange rate in effect as of September 30, 2020) over a three-year term, subject to borrowing base availability under the 2018 Japan ABL Facility. The amounts outstanding are secured by certain assets, including eligible inventory and eligible accounts receivable. The Company had 150,000,000 Yen (or U.S. $1,422,000, using the exchange rate in effect as of September 30, 2020) in borrowings outstanding under the 2018 Japan ABL Facility as of September 30, 2020. The 2018 Japan ABL Facility also includes certain restrictions including covenants related to certain pledged assets and financial performance metrics. As of September 30, 2020, the Company was in compliance with these covenants. The 2018 Japan ABL Facility is subject to an effective interest rate equal to the Tokyo Interbank Offered Rate ("TIBOR") plus 0.80%. The average interest rate under the 2018 Japan ABL Facility during 2020 was 0.87%. The 2018 Japan ABL Facility expires in January 2021.

On July 31, 2019, the Company entered into a one-year asset-based loan facility ("2019 Japan ABL Facility" and collectively with the 2018 Japan ABL Facility, the "Japan ABL Facility") between its subsidiary in Japan and MUFG Bank, Ltd. for 2,000,000,000 Yen, (or approximately U.S. $18,966,000 using the exchange rate in effect as of September 30, 2020). This facility expired on July 30, 2020.

Long-Term Debt

Equipment Notes

In August 2020, the Company entered into two new long-term financing agreements (the "Equipment Notes") with Bank of America N.A. and other lenders in connection with the Company's investment initiatives at its North American Distribution Center in Roanoke, Texas, that are secured by certain equipment at this facility. Additionally, to improve its manufacturing capabilities at its golf ball manufacturing facility in Chicopee, Massachusetts, the Company entered into a series of long-term financing agreements between December 2017 and March 2020, that are secured by certain equipment at these facilities.

As of September 30, 2020 and December 31, 2019, the Company had a combined $33,881,000 and $19,715,000 outstanding under these Equipment Notes, respectively, of which $8,727,000 and $5,107,000 was included in current liabilities, respectively, and $25,154,000 and $14,608,000 was included in long-term debt, respectively, in the accompanying Consolidated Condensed Balance Sheets. The Equipment Notes accrue interest in the range of 2.36% and 3.79%, and have maturity dates between December 2022 and March 2027.

During the three and nine months ended September 30, 2020, the Company recognized interest expense of $247,000 and $624,000, respectively, and during the three and nine months ended September 30, 2019, the Company recognized interest expense of $115,000 and $288,000, respectively.

The Equipment Notes are subject to compliance with the financial covenants in the Company's ABL Facility. As of September 30, 2020, the Company was in compliance with these covenants.

Term Loan B Facility

In January 2019, to fund the purchase price of the Jack Wolfskin acquisition, the Company entered into a Credit Agreement (the “Credit Agreement”) with Bank of America, N.A and other lenders party to the Credit Agreement (the "Term Lenders"). The Credit Agreement provides for a Term Loan B facility (the “Term Loan Facility”) in an aggregate principal of $480,000,000, which was issued less $9,600,000 in original issue discount and other transaction fees. Such principal amount may be increased pursuant to incremental facilities in the form of additional tranches of term loans or new commitments, up to a maximum incremental amount of $225,000,000, or an unlimited amount subject to compliance with a first lien net leverage ratio of 2.25 to 1.00. The Term Loan Facility is due in January 2026.

As of September 30, 2020 and December 31, 2019, the Company had $442,800,000 and $446,400,000, respectively, outstanding under the Term Loan Facility, of which $4,800,000 is reflected in current liabilities. The amount outstanding as of September 30, 2020 was offset by unamortized debt issuance costs of $14,160,000, of which $2,697,000 was reflected in the short-term portion of the facility, and $11,463,000 was reflected in the long-term portion of the facility in the accompanying consolidated condensed balance sheet. Total interest and amortization expense recognized during the three months ended September 30, 2020 and 2019 was $5,986,000 and $7,902,000, respectively, and $19,681,000 and $24,449,000 during the nine months ended September 30, 2020 and 2019 respectively.

Loans under the Term Loan Facility are subject to interest at a rate per annum equal to either, at the Company's option, the LIBOR rate or the base rate, plus 4.50% or 3.50%, respectively. The Company utilizes an interest rate hedge in order to mitigate the risk of interest rate fluctuations on this facility. See Note 17 for further information on this hedging contract. Principal payments of $1,200,000 are due quarterly, however the Company has the option to prepay any outstanding loan balance in whole or in part without premium or penalty. In addition, as of December 31, 2019, the Term Loan Facility requires excess cash flow payments.

Loans outstanding under this facility are guaranteed by the Company's domestic subsidiaries. The loans and guaranties are secured by substantially all the assets of the Company and guarantors.

The Credit Agreement contains a cross-default provision with respect to any indebtedness of the Company as defined in the Credit Agreement, as well as customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on incurrence of additional debt, liens, dividends and other restricted payments, asset sales, investments, mergers, acquisitions and affiliate transactions. Events of default permitting acceleration under the Credit Agreement include, among others, nonpayment of principal or interest, covenant defaults, material breaches of representations and warranties, bankruptcy and insolvency events, certain cross defaults or a change of control. As of September 30, 2020, the Company was in compliance with these covenants.

In connection with the entry into the Merger Agreement (see Note 5), on October 27, 2020, the Company entered into a debt financing commitment letter (the "Debt Commitment Letter") and related fee letters with Bank of America, N.A. and other lenders party to the Debt Commitment Letter (the "Commitment Parties"), to arrange and solicit consents from the Term Lenders to amend the Term Loan Facility to, among other things, permit the consummation of the Merger and certain other transactions contemplated in the Merger Agreement, designate Topgolf and its subsidiaries as unrestricted subsidiaries under the Term Loan Facility, which excludes them from certain requirements, covenants and representations, and amend certain covenants and other provisions to allow the Company to make certain investments in, and enter into certain transactions with Topgolf. In the event the Company cannot obtain the aforementioned consents from the Term Lenders, the Commitment Parties committed to arrange and provide the Company with a secured term loan facility for $442,800,000 on terms substantially similar to the Term Loan Facility, as proposed to be modified by the Term Loan Amendment, and including certain other changes.

Japan Term Loan Facility

In August 2020, the Company entered into a new five-year Term Loan facility (the "2020 Japan Term Loan Facility") between its subsidiary in Japan and Sumitomo Mitsui Banking Corporation (“SMBC”) for 2,000,000,000 Yen (or approximately U.S. $18,966,000 using the exchange rate in effect as of September 30, 2020). The 2020 Japan Term Loan Facility is due in August 2025.

As of September 30, 2020, the Company had 2,000,000,000 Yen (or approximately U.S. $18,966,000 using the exchange rate in effect as of September 30, 2020) outstanding, of which 400,000,000 Yen (or approximately U.S. $3,793,000 using the exchange rate in effect as of September 30, 2020) is reflected in current liabilities in the accompanying consolidated balance sheet. Total interest expense recognized during the three months ended September 30, 2020 was 2,031,000 Yen (or approximately U.S. $19,000 using the exchange rate in effect as of September 30, 2020).

Loans under the 2020 Japan Term Loan Facility are subject to a rate per annum to either, at the Company’s option, SMBC TIBOR or TIBOR plus 80 basis points. Principal payments of 100,000,000 Yen (or approximately U.S. $948,000 using the exchange rate in effect as of September 30, 2020) are due quarterly and the facility imposes certain restrictions including covenants to certain financial performance obligations. As of September 30, 2020, the Company was in compliance with these covenants.

Convertible Senior Notes

On May 4, 2020, the Company issued $258,750,000 of 2.75% Convertible Senior Notes (the “Convertible Notes”). The Convertible Notes bear interest at a rate of 2.75% per annum on the principal amount, payable semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2020. The Convertible Notes will mature on May 1, 2026, unless earlier redeemed or repurchased by the Company or converted. The Convertible Notes are structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries. As of September 30, 2020, the Company incurred $8,527,000 of cost associated with the issuance of the Convertible Notes, of which $6,005,000 was allocated to the liability component of the Convertible Notes, and $2,522,000 was allocated to the equity conversion feature.

As of September 30, 2020, the net carrying amount of the liability component of the Convertible Notes was $180,458,000, net of unamortized debt issuance costs of $5,698,000 and debt discount of $72,594,000, which will be amortized over the remaining term of approximately 5.6 years. The conversion feature of $76,508,000 and the allocated debt issuance costs of $2,522,000 are recorded as components of shareholders' equity as of September 30, 2020. Upon conversion, the Company has the option to settle the conversion obligation in any combination of cash and shares. The initial conversion rate is 56.7698 shares of the Company's common stock per $1,000 principal amount of Convertible Notes, which is equal to an initial conversion price of $17.62 per share. At September 30, 2020, the if-converted value of the Convertible Notes did not exceed the principal amount.

In connection with the pricing of the Convertible Notes on April 29, 2020, the Company paid $31,775,000 to enter into privately negotiated capped call transactions ("Capped Calls") with Goldman Sachs & Co. LLC, Bank of America, N.A. and Morgan Stanley & Co. LLC as well as with each of the Option Counterparties. The Capped Calls cover the aggregate number of shares of the Company’s common stock that initially underlie the Convertible Notes, and are expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of the Convertible Notes, and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Convertible Notes, with such reduction and/or offset subject to a cap based on the cap price. The cap price of the Capped Calls is initially $27.10. The Capped Calls are recorded as a reduction to additional paid-in capital and are not accounted for as derivatives.

The Convertible Notes will have an impact on the Company’s diluted earnings per share when the average market price of its common stock exceeds the conversion price of $17.62 per share, as the Company intends to settle the principal amount of the Convertible Notes in cash upon conversion. As of September 30, 2020, the average market price of the Company's common stock exceeded the conversion price and, as such, the Company used the treasury stock method to compute the dilutive shares of common stock related to the Convertible Notes for periods the Company reported net income. Upon conversion, there will be no economic dilution from the Convertible Notes until the average market price of the Company’s common stock exceeds the cap price of $27.10 per share, as exercise of the Capped Calls offsets any dilution from the Convertible Notes from the conversion price up to the cap price. Capped Calls are excluded from the calculation of diluted earnings per share, as they would be anti-dilutive under the treasury stock method.

The following table presents the Company's combined aggregate amount of maturities for its Equipment Notes, Term Loan Facility, the 2020 Japan Term Loan Facility, and the Convertible Notes over the next five years and thereafter as of September 30, 2020. Amounts payable under the Term Loan Facility included below represent the minimum principal repayment obligations. As of September 30, 2020, the Company does not anticipate excess cash flow repayments as defined by the Term Loan Facility.



	(in thousands)
Remainder of 2020	$	4,312
2021	17,147
2022	17,437
2023	14,721
2024	13,432
Thereafter	691,031
	$	758,080

Earnings per Common Share

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Earnings per Common Share

Note 7. Earnings per Common Share

Basic earnings per common share is computed by dividing net income by the weighted-average number of common shares outstanding for the period.

Diluted earnings per common share takes into account the potential dilution that could occur if outstanding securities were exercised. Dilutive securities are included in the calculation of diluted earnings per common share using the treasury stock method in accordance with ASC Topic 260, “Earnings per Share.” Dilutive securities include outstanding stock options, restricted stock units and performance share units granted to employees and non-employee directors (see Note 15), as well as common shares underlying convertible notes (see Note 6).

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 anti-dilution occurs.

The following table summarizes 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,
	2020		2019		2020			2019
Earnings (loss) per common share—basic
Net income (loss) attributable to Callaway Golf Company	$	52,432	$	31,048	$	(86,358	)	$	108,626
Weighted-average common shares outstanding—basic	94,171		94,100		94,207			94,284
Basic earnings (loss) per common share	$	0.56	$	0.33	$	(0.92	)	$	1.15
Earnings (loss) per common share—diluted
Net income (loss) attributable to Callaway Golf Company	$	52,432	$	31,048	$	(86,358	)	$	108,626
Weighted-average common shares outstanding—basic	94,171		94,100		94,207			94,284
Convertible notes weighted-average shares outstanding	924		—		—			—
Outstanding options, restricted stock units and performance share units	1,517		2,187		—			1,913
Weighted-average common shares outstanding—diluted	96,612		96,287		94,207			96,197
Diluted earnings (loss) per common share	$	0.54	$	0.32	$	(0.92	)	$	1.13

In May 2020, the Company issued $258,750,000 of 2.75% Convertible Notes. The Convertible Notes will have an impact on the Company’s diluted earnings per share when the average market price of its common stock exceeds the conversion price of $17.62 per share, as the Company intends to settle the principal amount of the Convertible Notes in cash upon conversion. The Company is required under the treasury stock method to compute the potentially dilutive shares of common stock related to the Convertible Notes for periods the Company reports net income. As of September 30, 2020, the average market price of its common stock exceeded this conversion price per share and as such, the common shares underlying convertible notes were included in the diluted calculation for the three months ended September 30, 2020. For the nine months

ended September 30, 2020, the Convertible Notes were anti-dilutive and therefore excluded from the diluted calculation (See Note 6).

For the three months ended September 30, 2020, there were no securities excluded from the calculation of earnings (loss) per common share—diluted. For the nine months ended September 30, 2020, securities outstanding totaling approximately 1,848,000 shares, comprised of stock options, restricted stock units, performance share units, and common shares underlying convertible notes, were excluded from the calculation of earnings (loss) per common share—diluted as they would be anti-dilutive. For the three and nine months ended September 30, 2019, the Company had a nominal number of securities that had an anti-dilutive effect on the calculation of diluted earnings per common share. Such securities were excluded from the calculation.

Inventories

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Inventories

Note 8. Inventories

Inventories are summarized below (in thousands):



	September 30, 2020		December 31, 2019
Inventories:
Raw materials	$	59,031	$	76,140
Work-in-process	843		860
Finished goods	264,978		379,639
	$	324,852	$	456,639

Goodwill and Intangible Assets

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Note 9. Goodwill and Intangible Assets

Goodwill at September 30, 2020 decreased to $56,041,000 from $203,743,000 at December 31, 2019. This $147,702,000 decrease was due to an impairment charge of $148,375,000 recognized in the second quarter of 2020, offset by changes in foreign currency rates period over period. The Company's goodwill is reported in both the Golf Equipment and Apparel, Gear and Other operating segments (see Note 19).

In accordance with ASC Topic 350, “Intangibles—Goodwill and Other,” the Company’s goodwill and non-amortizing intangible assets are subject to an annual impairment test or more frequently when impairment indicators are present. During the second quarter of 2020, the Company performed a qualitative assessment of goodwill impairment indicators, considering macroeconomic conditions related to the COVID-19 pandemic and its potential impact to sales and operating income for the remainder of fiscal 2020 and potentially beyond. As a result, the Company determined that there were indicators of impairment, and proceeded with a quantitative assessment of goodwill for all reporting units during the second quarter.

In performing the second quarter quantitative goodwill impairment testing, the Company prepared valuations of its reporting units using both a market comparable methodology and an income methodology, and those valuations were compared with the respective carrying values of the reporting units to determine whether any goodwill impairment existed. The Company's reporting units are one level below its reportable segment level. In preparing the valuations, past, present and future expectations of performance were considered, including the impact of the COVID-19 pandemic. This methodology was consistent with the approach used to perform the annual quantitative goodwill assessment in prior years. The weighted average cost of capital used in the goodwill impairment testing ranged between 9.0% and 9.25%, which was derived from the financial structures of comparable companies corresponding to the industry of each reporting unit. There is inherent uncertainty associated with key assumptions used in the Company's impairment testing, including the duration of the economic downturn associated with the COVID-19 pandemic and the estimated recovery period. As a result of the second quarter assessment, the Company determined that the fair value for one reporting unit was less than its carrying value, and therefore recognized a goodwill impairment loss of $148,375,000 in the second quarter of 2020. The expected decline in revenue due to the impact of COVID-19 contributed to the lower fair value of the Jack Wolfskin reporting unit, which is included in the Apparel, Gear and Other operating segment. The Company determined that the goodwill relating to its other reporting units was not impaired as the fair value significantly exceeded the carrying value at June 30, 2020. There were no impairment charges recognized during the three months ended September 30, 2020.

In addition, the Company determined that the trade name intangible asset related to Jack Wolfskin was also impaired and recognized an impairment loss of $25,894,000 in the second quarter of 2020. The carrying value of intangible assets after

the impairment was $437,546,000 at September 30, 2020. There were no impairment charges recognized during the three months ended September 30, 2020.

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



	Useful Life (Years)	September 30, 2020							December 31, 2019
	Useful Life (Years)	Gross⁽¹⁾		Accumulated Amortization			Net Book Value		Gross		Accumulated Amortization			Net Book Value
Indefinite-lived:
Trade name, trademark, trade dress and other	NA	$	437,546		$	—	$	437,546	$	453,837		$	—	$	453,837
Amortizing:
Patents	2-16	31,581			31,581		—		31,581			31,581		—
Customer and distributor relationships and other	1-10	55,794			18,367		37,427		53,904			14,318		39,586
Total intangible assets		$	524,921		$	49,948	$	474,973	$	539,322		$	45,899	$	493,423

(1) The gross balance of intangible assets as of September 30, 2020 includes an increase due to the impact of foreign exchange rates of $9,603,000 on the Jack Wolfskin non-amortizing intangible asset, as well as $1,554,000 on the amortizing customer and distributor relationships.

Aggregate amortization expense of intangible assets was approximately $1,321,000 and $1,113,000 for the three months ended September 30, 2020 and 2019, respectively, and $3,714,000 and $3,579,000 for the nine months ended September 30, 2020 and 2019, respectively.

Amortization expense related to intangible assets at September 30, 2020 in each of the next five fiscal years and beyond is expected to be incurred as follows (in thousands):



Remainder of 2020	$	3,586
2021	4,724
2022	4,548
2023	4,409
2024	4,409
Thereafter	15,751
	$	37,427

Joint Venture	9 Months Ended
Joint Venture	Sep. 30, 2020
Noncontrolling Interest [Abstract]
Joint Venture	Note 10. Joint Venture The Company had a joint venture in Japan, Callaway Apparel K.K., with its long-time apparel licensee, TSI Groove & Sports Co, Ltd. ("TSI"), for the design, manufacture and distribution of Callaway-branded apparel, footwear and headwear in Japan. In July 2016, the Company contributed $10,556,000, primarily in cash, for a 52% ownership of the joint venture, and TSI contributed $9,744,000, primarily in inventory, for the remaining 48%. In May 2019, the Company entered into a stock purchase agreement with TSI to acquire the remaining shares comprising the 48% ownership in Callaway Apparel K.K. for 2 billion Yen, or approximately $18,538,000 (using the exchange rate in effect on the acquisition date). The purchase was completed as of May 31, 2019 and, pursuant to the stock purchase agreement, the purchase price was paid in August 2019. As of September 30, 2020, the Company owned 100% of this entity and controlled all matters pertaining to its business operations and significant management decisions. Callaway Apparel K.K. is consolidated one month in arrears. During the three and nine months ended September 30, 2019, the Company recorded a net loss attributable to the non-controlling interest of $0 and $179,000, respectively, in its consolidated condensed statements of operations. As a result of the acquisition, the Company did not recognize net income attributable to non-controlling interests during the three and nine months ended September 30, 2020.

Investments	9 Months Ended
Investments	Sep. 30, 2020
Investments, All Other Investments [Abstract]
Investments	Note 11. Investments Investment in Topgolf International, Inc. The Company owns a minority interest of approximately 14.3% in Topgolf, the owner and operator of Topgolf entertainment centers, which ownership consists of common stock and various classes of preferred stock. In connection with this investment, the Company 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 Topgolf retail stores, and other rights incidental to those listed above. Topgolf is a privately held company, and as such, the common and preferred shares comprising the Company’s investment are illiquid and their fair value is not readily determinable. The Company accounts for changes in fair value in accordance with ASU No. 2016-01, which requires equity securities without a readily determinable fair value to be measured at cost, less impairments if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. In May 2020, due to the business disruptions caused by the COVID-19 pandemic, which resulted in the temporary closure of Topgolf facilities worldwide, the Company, in combination with other shareholders of Topgolf, issued Topgolf a note receivable to assist with working capital requirements. The Company's pro rata share of the note receivable was $6,542,000, which was issued net of an original issue discount of 20%. In connection with the Series H financing completed in September 2020, as discussed below, the note receivable was converted into additional shares of Topgolf. While outstanding, the note receivable accrued interest in the range of 5.75% and 5.87%. The note receivable would have matured in February 2026. In September 2020, the Company invested $14,638,000 in Series H preferred shares of Topgolf as part of a new financing round. In connection with this financing round, the Company also converted the outstanding note receivable and accrued interest of $6,670,000, into additional Series H preferred shares of Topgolf. The series H preferred shares have preference, liquidation, conversion and other rights which differ from the other series of Topgolf preferred and common shares. The Company's total investment in Topgolf as of September 30, 2020 and December 31, 2019 was $111,442,000 and $90,134,000, respectively. The Company accounts for this investment at cost less impairments in accordance with ASC 2016-01. As of September 30, 2020, the Company has not recorded any impairments with respect to this investment. On October 27, 2020, the Company entered into the Merger Agreement to acquire Topgolf in an all-stock transaction (see Note 5). At the effective time of the Merger, all preferred shares and common stock of Topgolf held by the Company will be canceled for no consideration. The Merger is expected to close in the first quarter of 2021, subject to shareholder and regulatory approval as well as other customary conditions.

Product Warranty

9 Months Ended

Sep. 30, 2020

Guarantees [Abstract]

Product Warranty

Note 12. Product Warranty

The Company has a stated two-year warranty policy for its golf clubs and certain Jack Wolfskin gear, as well as a limited lifetime warranty for its OGIO line of products. 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 Company’s estimates for calculating the warranty reserve are principally based on assumptions regarding the warranty costs of each product line over the expected warranty period. Where little or no claims experience may exist, the Company’s warranty obligation calculation is based upon long-term historical warranty rates of similar products until sufficient data is available. As actual model-specific rates become available, the Company’s estimates are modified to reflect the range of likely outcomes.

The warranty provision for the three and nine months ended September 30, 2020 and September 30, 2019 includes the warranty reserves assumed in connection with the Jack Wolfskin acquisition (see Note 5).

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,
	2020			2019			2020			2019
Beginning balance	$	9,779		$	10,976		$	9,636		$	7,610
Provision	2,137			1,494			5,507			6,492
Provision liability assumed from acquisition	—			—			—			2,208
Claims paid/costs incurred	(2,276		)	(2,349		)	(5,503		)	(6,189		)
Ending balance	$	9,640		$	10,121		$	9,640		$	10,121

Income Taxes

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Note 13. Income Taxes

The Company calculates its interim income tax provision in accordance with ASC Topic 270, “Interim Reporting,” and ASC Topic 740, “Accounting for Income Taxes.” Historically, the Company calculated the provision for income taxes during the interim reporting periods by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. The Company determined that since small changes in estimated “ordinary” income would result in significant changes in the estimated annual effective tax rate, the historical method would not provide a reliable estimate for the three- and nine-month periods ended September 30, 2020. Therefore, a discrete effective tax rate method was used to calculate taxes for the three- and nine-month periods ended September 30, 2020.

In January 2019, the Company acquired Jack Wolfskin for approximately $521,201,000 (including cash acquired of $58,096,000). The Company recorded a deferred tax liability of $88,392,000 related to the intangibles upon acquisition in addition to $11,384,000 deferred tax assets acquired (see Note 5). In the second quarter of 2020, due to a decline in projected revenues caused by the COVID-19 pandemic, the Company recognized an impairment charge of $174,269,000 to write down the goodwill and trade name associated with Jack Wolfskin to its fair value (see Note 9). The impaired goodwill was comprised of book basis over tax basis with no corresponding deferred tax liability. The brand value impairment resulted in the reduction of approximately $7,900,000 of the deferred tax liability previously recorded as part of acquisition accounting.

The realization of deferred tax assets, including loss and credit carryforwards, is subject to the Company generating sufficient taxable income during the periods in which the deferred tax assets become realizable. Due to the Company’s historical profitability, combined with future projections of profitability, the Company has determined that the majority of its U.S. deferred tax assets are more likely than not to be realized. The valuation allowance on the Company’s U.S. deferred tax assets as of September 30, 2020 primarily relates to state net operating loss carryforwards and credits that the Company estimates it may not be able to utilize in future periods. With respect to Jack Wolfskin and previously existing non-U.S. entities, there continues to be sufficient positive evidence to conclude that realization of its deferred tax assets is more likely than not under applicable accounting rules, and therefore no significant valuation allowances have been established. The Company has considered the business disruption impacts from the COVID-19 pandemic and determined that this has not impacted the realization of its deferred tax assets. As this is a dynamically evolving business disruption, the Company will continue to evaluate the COVID-19-related impacts on the realization of its deferred tax assets as new information becomes available.

The Company recorded an income tax provision of $5,360,000 and $2,128,000 for the three months ended September 30, 2020 and 2019, respectively. This increase was primarily due to a significant increase in earnings for the third quarter of 2020 compared to the third quarter of 2019 combined with the calculation differences inherent in using a discrete effective rate for the period ended September 30, 2020. As a percentage of pre-tax income, the Company's effective tax rate increased to 9.3% in the third quarter of 2020 compared to 6.4% in the third quarter of 2019, primarily due to changes in the mix of U.S. and foreign earnings and due to calculation differences inherent in using a discrete effective rate for the period ended September 30, 2020. The Company recorded an income tax provision of $6,580,000 and $18,892,000 for the nine months ended September 30, 2020 and 2019, respectively. This decrease was primarily due to a reduction in earnings for the nine months ended September 30, 2020 compared to the same period in 2019.

At September 30, 2020, the gross liability for income taxes associated with uncertain tax positions was $27,823,000. Of this amount, $11,640,000 would benefit the Company’s consolidated condensed financial statements and effective income tax rate if favorably settled. The unrecognized tax liabilities are expected to decrease by approximately $428,000 during the

next 12 months. The gross liability for uncertain tax positions increased by $706,000 and $1,830,000 for the three and nine months ended September 30, 2020, respectively, primarily due to increases in tax positions taken during the current quarter.

The Company recognizes interest and penalties related to income tax matters in income tax expense. For the three months ended September 30, 2020 and 2019, the Company's provision for income taxes includes an expense of $110,000 and $47,000, respectively, and an expense of $163,000 and a benefit of $142,000, for the nine months ended September 30, 2020 and 2019, respectively, related to the recognition of interest and/or penalties. As of September 30, 2020 and December 31, 2019, the gross amount of accrued interest and penalties included in income taxes payable in the accompanying consolidated condensed balance sheets was $1,833,000 and $1,669,000, respectively.

The Company files income tax returns in the U.S. federal jurisdiction and various state 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		2010 and prior
California (U.S.)		2008 and prior
Germany		2014 and prior
Japan		2013 and prior
South Korea		2014 and prior
United Kingdom		2015 and prior

Pursuant to Section 382 of the Internal Revenue Code, use of the Company's net operating losses and credit carry-forwards may be limited significantly if the Company were to experience a cumulative change in ownership of the Company's stock by “5-percent shareholders” that exceeds 50% over a rolling three-year period. The Company does not believe there has been a cumulative change in ownership in excess of 50% during any rolling three-year period, and the Company continues to monitor changes in its ownership. If such a cumulative change did occur in any three-year period and the Company were limited in the amount of losses and credits it could use to offset its tax liabilities, the Company's results of operations and cash flows could be adversely impacted.

As described in Note 5, on October 27, 2020 the Company entered into a Merger Agreement with Top golf. The Company is currently evaluating if this transaction will cause an ownership change under IRC 382. The Company cannot presently estimate the impact the merger will have on the realizability of its deferred tax assets as the Company lacks sufficient information to make a complete assessment at this time.

Commitments and Contingencies

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 14. Commitments & 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 material 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 on 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 these 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. In addition, the Company cannot assure that it will be able to successfully defend itself in those matters, or that any amounts accrued are sufficient. The Company does not believe that the matters currently pending against the Company will have a material adverse effect on the Company's consolidated business, financial condition, cash flows, or results of operations on an annual basis.

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, as well as endorsement agreements with professional athletes 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, severance arrangements, the Company’s sales levels, and reductions in payment obligations if designated minimum performance criteria are not achieved. The amounts listed approximate minimum purchase obligations, base compensation, and guaranteed minimum royalty payments the Company is obligated to pay under these agreements. The actual amounts paid under some of these agreements may be higher or lower than the amounts included. In the aggregate, the actual amount paid under these obligations is likely to be higher than the amounts listed as a result of the variable nature of these obligations. The Company has entered into many of these contractual agreements with terms ranging from one to four years.

The minimum obligation that the Company is required to pay as of September 30, 2020 under these agreements is $70,699,000 over the next four years as follows (in thousands):



Remainder of 2020	$	36,774
2021	25,229
2022	7,085
2023	1,505
2024	106
	$	70,699

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.

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.

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 payments under the commitments and guarantees described above will have a material effect on the Company’s consolidated financial statements. The fair value of indemnities, commitments and guarantees that the Company issued as of September 30, 2020 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 without substantial cause or by the officer for good reason or non-renewal. 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 a 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.

Share-Based Employee Compensation

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Share-Based Employee Compensation

Note 15. Share-Based Employee Compensation

As of September 30, 2020, the Company had two shareholder approved stock plans under which shares were available for equity-based awards: the Callaway Golf Company Amended and Restated 2004 Incentive Plan (the "2004 Incentive Plan") and the 2013 Non-Employee Directors Stock Incentive Plan (the "2013 Directors Plan"). From time to time, the Company grants stock options, restricted stock units, performance share units, phantom stock units, stock appreciation rights and other awards under these plans.

The Company accounts for its share-based compensation arrangements in accordance with ASC Topic 718, which requires the measurement and recognition of compensation expense for all share-based payment awards to employees and directors based on estimated fair values, and ASU No. 2014-12 for stock awards that are subject to performance measures. ASC Topic 718 further requires a reduction in share-based compensation expense by an estimated forfeiture rate. The forfeiture rate used by the Company is based on historical forfeiture trends. If actual forfeiture rates are not consistent with the Company’s estimates, the Company may be required to increase or decrease compensation expenses in future periods.

Restricted Stock Units

Restricted stock units awarded under the 2004 Incentive Plan and the 2013 Directors Plan are valued at the Company’s closing stock price on the date of grant. Restricted stock units generally vest over a one- to five-year period. Compensation expense for restricted stock units is recognized on a straight-line basis over the vesting period and is reduced by an estimate for forfeitures.

There were no shares underlying restricted stock units granted during the three months ended September 30, 2020 and 2019. During the nine months ended September 30, 2020 and 2019, the Company granted 406,000 and 452,000 shares underlying restricted stock units, respectively, at a weighted average grant-date fair value of $17.82 and $15.35 per share, respectively.

Total compensation expense, net of estimated forfeitures, recognized for restricted stock units was $1,907,000 and $1,176,000 for the three months ended September 30, 2020 and 2019, respectively, and $4,884,000 and $4,495,000, for the nine months ended September 30, 2020 and 2019, respectively. At September 30, 2020, the Company had $8,993,000 of total unamortized compensation expense related to non-vested restricted stock units. That cost is expected to be recognized over a weighted-average period of 1.8 years.

Performance Based Awards

Performance based awards are stock-based awards in which the number of shares ultimately received depends on the Company's performance against specified metrics over a one- to five-year performance period from the date of grant. These performance metrics are established by the Company at the beginning of the performance period. At the end of the performance period, the number of shares of stock that could be issued is fixed based upon the degree of achievement of the performance goals. The number of shares that could be issued can range from 0% to 200% of the participant's target award. The Company grants two types of performance based awards: performance share units and awards subject to total shareholder return metrics under the 2004 Incentive Plan.

Performance share units are initially valued at the Company's closing stock price on the date of grant. Stock compensation expense, net of estimated forfeitures, is recognized on a straight-line basis over the vesting period. The expense recognized over the vesting period is adjusted up or down based on the anticipated performance level during the performance period. If the performance metrics are not probable of achievement during the performance period, compensation expense would be reversed. The awards are forfeited if the threshold performance metrics are not achieved as of the end of the performance period. The performance share units cliff-vest in full over a period of three to five years from the date of grant.

Performance share units with total shareholder return requirements are awards that compare the performance of the Company's common stock over a three-year period to that of the Company's peer group. The fair value of these awards is derived using the Monte Carlo simulation which utilizes the stock volatility, dividend yield and market correlation of the Company and the Company's peer group. The Monte Carlo fair value is expensed on a straight-line basis over the vesting period, net of estimated forfeitures. The awards are forfeited if the threshold performance metrics are not achieved as of the end of the performance period. The performance share units cliff-vest in full over a three-year vesting period.

The Company granted 125,000 and 226,000 shares underlying performance share units during the nine months ended September 30, 2020 and 2019, respectively, at a weighted average grant-date fair value of $19.66 and $15.17 per share, respectively. There were no shares underlying performance share units granted during three months ended September 30, 2020 and 2019. The awards granted during 2020 and 2019 are subject to a three- to five-year performance period provided that (i) if certain first year performance goals are achieved, the participant could earn up to 50% of the three-year target award shares, subject to continued service through the vesting date, and (ii) if certain cumulative first- and second-year performance goals are achieved, the participant could earn up to an aggregate of 80% of the three-year target award shares (which includes any shares earned during the first year), subject to continued service through the vesting date. Based on the Company’s performance, participants earned a minimum of 50% of the target award shares granted in 2019, and 80% of the target award shares granted in 2018, in each case subject to continued service through the vesting date.

During the nine months ended September 30, 2020 and 2019, the Company granted 125,000 and 149,000 shares underlying performance share units subject to total shareholder return requirements, respectively, at a weighted average grant-date fair value of $23.22 and $16.96, respectively. There were no performance share units subject to total shareholder return requirements granted during three months ended September 30, 2020 and 2019.

During the three months ended September 30, 2020 and 2019, the Company recognized total compensation expense, net of estimated forfeitures, for performance-based awards of $1,365,000 and $1,337,000, respectively, and, $3,182,000 and $4,983,000 for the nine months ended September 30, 2020 and 2019, respectively. During the nine months ended September 30, 2020, the Company performed a remeasurement of these awards based on the Company’s most recent financial targets resulting in a reduction to expense. The decrease in expense reflects a decrease in the anticipated degree of achievement against the performance metrics established on performance-based awards as a result of the uncertain future economic impact on the Company's business due to the COVID-19 pandemic. At September 30, 2020, unamortized compensation expense related to these awards was $5,519,000, which is expected to be recognized over a weighted-average period of 1.4 years.

Share-Based Compensation Expense

The table below summarizes the amounts recognized in the financial statements for the three and nine months ended September 30, 2020 and 2019 for share-based compensation, including expense for restricted stock units and performance share units (in thousands).



	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019

Cost of sales	$	158	$	213	$	553	$	715
Operating expenses	3,114		2,300		7,513		8,763
Total cost of share-based compensation included in income, before income tax	$	3,272	$	2,513	$	8,066	$	9,478

Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Note 16. Fair Value of Financial Instruments

Certain of the Company’s financial assets and liabilities are measured at fair value on a recurring and nonrecurring basis. 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. Assets and liabilities carried at fair value are classified using the following three-tier hierarchy:

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

Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

Level 3: Fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The following table summarizes the valuation of the Company’s foreign currency forward contracts (see Note 17) that are measured at fair value on a recurring basis by the above pricing levels at September 30, 2020 and December 31, 2019 (in thousands):



	Fair Value			Level 1		Level 2			Level 3
September 30, 2020
Foreign currency forward contracts—asset position	$	2,701		$	—	$	2,701		$	—
Foreign currency forward contracts—liability position	(2,440		)	—		(2,440		)	—

Interest rate hedge agreements—liability position	(19,505		)	—		(19,505		)	—
	$	(19,244	)	$	—	$	(19,244	)	$	—
December 31, 2019
Foreign currency forward contracts—asset position	$	61		$	—	$	61		$	—
Foreign currency forward contracts—liability position	(766		)	—		(766		)	—

Cross-currency debt swap agreements—asset position	6,163			—		6,163			—
Cross-currency debt swap agreements—liability position	(25		)	—		(25		)	—

Interest rate hedge agreements—liability position	(8,894		)	—		(8,894		)	—
	$	(3,461	)	$	—	$	(3,461	)	$	—

The fair value of the Company’s foreign currency forward contracts and cross-currency debt swap contracts are based on observable inputs that are corroborated by market data. Observable inputs include broker quotes, daily market foreign currency rates and forward pricing curves. Remeasurement gains and losses on foreign currency forward contracts and cross-currency debt swap contracts designated as cash flow hedges are recorded in accumulated other comprehensive income (loss) until recognized in earnings during the period that the hedged transactions take place. The fair value of interest rate hedge contracts are based on observable inputs that are corroborated by market data. Observable inputs include daily market foreign currency rates and interest rate curves. Remeasurement gains and losses are recorded in accumulated other comprehensive income (loss) until recognized in earnings as interest payments are made or received on the Company’s variable-rate debt. Remeasurement gains and losses on foreign currency forward contracts that are not-designated as cash flow hedges are recorded in other income (expense) (see Note 17).

Disclosures about the Fair Value of Financial Instruments

The carrying values of cash and cash equivalents at September 30, 2020 and December 31, 2019 are categorized within Level 1 of the fair value hierarchy. The table below summarizes information about fair value relating to the Company’s financial assets and liabilities that are recognized in the accompanying consolidated condensed balance sheets as of September 30, 2020 and December 31, 2019, as well as the fair value of contingent contracts that represent financial instruments (in thousands).



	September 30, 2020				December 31, 2019
	Carrying Value		Fair Value		Carrying Value		Fair Value
Term Loan Facility⁽¹⁾	$	442,800	$	443,221	$	446,400	$	450,864
2020 Japan Term Loan Facility⁽²⁾	$	18,966	$	18,966	$	—	$	—
Convertible Notes⁽³⁾	$	258,750	$	349,561	$	—	$	—
Primary Asset-Based Revolving Credit Facility⁽⁴⁾	$	28,813	$	28,813	$	114,480	$	114,480
Japan ABL Facility⁽⁴⁾	$	1,422	$	1,422	$	30,100	$	30,100
Equipment notes⁽⁵⁾	$	33,881	$	33,881	$	19,715	$	19,715


(1)	In January 2019, the Company entered into a Term Loan Facility. The fair value of this debt is categorized within Level 2 of the fair value hierarchy. See Note 6 for further information.


(2)	In August 2020, the Company entered into the 2020 Japan Term Loan Facility. The fair value of this debt is categorized within Level 2 of the fair value hierarchy. See Note 6 for further information.


(3)	In May 2020, the Company issued $258,750,000 of 2.75% Convertibles Notes due in 2026. The fair value of this debt is categorized within Level 2 of the fair value hierarchy. For further discussion, see Note 6.

(4)

The carrying value of the amounts outstanding under the Company's ABL Facility and Japan ABL Facility approximates the fair value due to the short-term nature of these obligations. The fair value of this debt is categorized within Level 2 of the fair value hierarchy based on the observable market borrowing rates. See Note 6 for information on the Company's credit facilities, including certain risks and uncertainties related thereto.


(5)	In December 2017, August 2019 and March 2020, the Company entered into equipment notes that are both secured by certain equipment at the Company's golf ball manufacturing facility. The fair value of this debt is categorized within Level 2 of the fair value hierarchy. See Note 6 for further information.

Nonrecurring Fair Value Measurements

The Company measures certain assets at fair value on a nonrecurring basis at least annually or more frequently if certain indicators are present. These assets include long-lived assets, goodwill, non-amortizing intangible assets and investments that are written down to fair value when they are held for sale or determined to be impaired. During the second quarter of 2020, the Company considered the macroeconomic conditions related to the COVID-19 pandemic and its potential impact to sales and operating income for the remainder of fiscal 2020, and determined that there were indicators of impairment and proceeded with a quantitative assessment of goodwill for all reporting units. As a result of the second quarter assessment, the Company determined that the fair value of one of its reporting units was less than its carrying value, and therefore recognized a goodwill impairment loss of $148,375,000 in the second quarter of 2020. In addition, the Company recognized an impairment loss of $25,894,000 on one of its trade names (see Note 9). There were no impairment losses recorded during the three months ended September 30, 2020.

- 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 + Details

Derivatives and Hedging

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging

Note 17. Derivatives and Hedging

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 as well as fluctuations in foreign currency exchange rates and changes in interest rates relating to its long-term debt. The Company uses designated cash flow hedges and non-designated hedges in the form of foreign currency forward contracts as part of its strategy to manage the level of exposure to the risk of fluctuations in foreign currency exchange rates and to mitigate the impact of foreign currency translation on transactions that are denominated primarily in Japanese Yen, British Pounds, Euros, Canadian Dollars, Australian Dollars and Korean Won. The Company also uses cross-currency debt swap contracts and interest rate hedge contracts to mitigate the impact of variable rates on its long-term debt as well as changes in foreign currencies.

The Company accounts for its foreign currency forward contracts, cross-currency debt swap contracts and interest rate hedge contracts in accordance with ASC Topic 815. ASC Topic 815 requires the recognition of all derivative instruments 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 a designated cash flow hedge that offsets certain exposures. Certain criteria must be satisfied in order for derivative financial instruments to be classified and accounted for as a cash flow hedge. Gains and losses from the remeasurement of qualifying cash flow hedges are recorded as a component of accumulated other comprehensive income (loss) and released into earnings as a component of cost of goods sold or net sales, other income (expense) and interest expense during the period in which the hedged transaction takes place. Remeasurement gains or losses of derivatives that are not elected for hedge accounting treatment are recorded in earnings immediately as a component of other income (expense).

Foreign currency forward contracts, cross-currency debt swap contracts and interest rate hedge contracts are used only to meet the Company’s objectives of minimizing variability in the Company’s operating results arising from foreign exchange rate movements and changes in interest rates. The Company does not enter into foreign currency forward contracts, cross-currency debt swap contracts and interest rate hedge contracts for speculative purposes. The Company utilizes counterparties for its derivative instruments that it believes are credit-worthy at the time the transactions are entered into and the Company closely monitors the credit ratings of these counterparties.

The following table summarizes the fair value of the Company's derivative instruments as well as the location of the asset and/or liability on the consolidated condensed balance sheets at September 30, 2020 and December 31, 2019 (in thousands):



	Balance Sheet Location	Fair Value of Asset Derivatives
	Balance Sheet Location	September 30, 2020		December 31, 2019
Derivatives designated as cash flow hedging instruments:
Foreign currency forward contracts	Other current assets	$	158	$	53
Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Other current assets	2,543		8

Total asset position		$	2,701	$	61



	Balance Sheet Location	Fair Value of Liability Derivatives
	Balance Sheet Location	September 30, 2020		December 31, 2019
Derivatives designated as cash flow hedging instruments:
Foreign currency forward contracts	Accounts payable and accrued expenses	$	225	$	24

Cross-currency debt swap agreements	Accounts payable and accrued expenses	—		25

Interest rate hedge agreements	Accounts payable and accrued expenses	4,757		1,865
	Other long-term liabilities	14,748		7,030
		19,730		8,944
Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Accounts payable and accrued expenses	2,215		741

Total liability position		$	21,945	$	9,685

The Company's derivative instruments are subject to a master netting agreement with each respective counterparty bank and are therefore net settled at their maturity date. Although the Company has the legal right of offset under the master netting agreements, the Company has elected not to present these contracts on a net settlement amount basis, and therefore present these contracts on a gross basis on the accompanying consolidated condensed balance sheets at September 30, 2020 and December 31, 2019.

Cash Flow Hedging Instruments

Foreign Currency Forward Contracts

The Company uses foreign currency derivatives designated as qualifying cash flow hedging instruments, including foreign currency forward contracts to help mitigate the Company's foreign currency exposure on intercompany sales of inventory to its foreign subsidiaries. These contracts generally mature within 12 to 15 months from their inception. At September 30, 2020, the notional amounts of the Company's foreign currency forward contracts designated as cash flow hedge instruments were approximately $14,503,000. At December 31, 2019, the Company had no outstanding foreign currency forward contracts designated as cash flow hedge instruments.

As of September 30, 2020, the Company recorded a net gain of $904,000 in accumulated other comprehensive loss related to foreign currency forward contracts. Of this amount, net gains of $486,000 and $894,000 for the three and nine months ended September 30, 2020, respectively, were removed from accumulated other comprehensive loss and recognized in cost of goods sold for the underlying intercompany sales that were recognized, and net gains of $135,000 and $599,000 for the three and nine months ended September 30, 2020, respectively, were removed from accumulated other comprehensive loss related to the amortization of forward points. There were no ineffective hedge gains or losses recognized during the three and nine months ended September 30, 2020. Based on the current valuation, the Company expects to reclassify net gains of $588,000 from accumulated other comprehensive loss into net earnings during the next 12 months.

The Company recognized net gains of $413,000 and $222,000 in cost of goods sold for the three and nine months ended September 30, 2019, respectively.

Cross-Currency Debt Swap and Interest Rate Hedge Contract

In order to mitigate the risk of changes in interest rates associated with the Company's variable-rate Term Loan Facility and EUR denominated intercompany loan, the Company used a cross-currency debt swap and interest rate hedge, both designated as cash flow hedges (see Note 6) by converting a portion of the USD denominated Term Loan Facility, which has a higher variable interest rate, to a EUR denominated synthetic note at a lower fixed rate. As of March 31, 2020, the Company unwound the cross currency swap, and as of June 30, 2020 determined that the forecasted transaction in connection with the underlying EUR denominated intercompany loan was no longer probable of occurring. As such, the Company discontinued the hedge and released net gains of $11,046,000 from accumulated other comprehensive income to other income during the second quarter of 2020. The Company maintained the interest rate hedge related to the USD denominated Term Loan Facility in order to continue mitigating the risk of changes in interest rates. Over the life of the facility, the Company will receive variable interest payments from the counterparty lenders in exchange for the Company making fixed rate payments, without exchange of the underlying notional amount. As of September 30, 2020, the notional amount outstanding under the interest rate hedge contract was $196,851,000. As of December 31, 2019, the notional amount outstanding under the cross-currency debt swap and interest rate hedge contract was $198,353,000.

In connection with the cross-currency swap contract, during the nine months ended September 30, 2020, the Company recorded a remeasurement net gain of $15,081,000 in accumulated other comprehensive loss. There were no remeasurement gains or losses recorded during the three months ended September 30, 2020. During the three and nine months ended September 30, 2020, net gains of $0 and $18,510,000, respectively, were relieved from accumulated other comprehensive loss. The recognition of these net gains into earnings is summarized as follows:


•	Net gains of $0 and $11,046,000 related to the discontinuation of the cross-currency swap contract were recognized in other income (expense) in the three and nine months ended September 30, 2020.


•	Net gains related to foreign currency of $5,735,000 were recognized in other income (expense) in the nine months ended September 30, 2020. There were no net foreign currency gains or losses recognized in the three months ended September 30, 2020.


•	Net gains of $0 and $1,730,000 were recognized in interest income during the three and nine months ended September 30, 2020, respectively.

During the three and nine months ended September 30, 2019, net gains of $9,868,000 and $12,119,000 were relieved from accumulated other comprehensive loss in connection with the cross currency swap, respectively. The recognition of these net gains and losses into earnings is summarized as follows:


•	Net gains of $1,579,000 and $3,865,000 were recognized in interest income in the three and nine months ended September 30, 2019, respectively.


•	Net gains related to foreign currency of $8,289,000 and $8,254,000 were recognized in other income (expense) in the three and nine months ended September 30, 2019, respectively.

During the three and nine months ended September 30, 2020, the Company recorded net losses of $100,000 and $13,261,000, respectively, related to the remeasurement of the interest rate hedge contract in accumulated other comprehensive loss. Of these amounts, net losses of $1,198,000 and $2,644,000 were relieved from accumulated other comprehensive loss and recognized in interest expense during the three and nine months ended September 30, 2020, respectively. Based on the current valuation, the Company expects to reclassify a net loss of $4,766,000 related to the interest rate hedge contract from accumulated other comprehensive loss into earnings during the next 12 months.

The following tables summarize the net effect of all cash flow hedges on the consolidated condensed financial statements for the three and nine months ended September 30, 2020 and 2019 (in thousands):



	Gain/(Loss) Recognized in Other Comprehensive Income (Effective Portion)
	Three Months Ended September 30,						Nine Months Ended September 30,
Derivatives designated as cash flow hedging instruments	2020			2019			2020			2019
Foreign currency forward contracts	$	(1,070	)	$	464		$	904		$	1,037
Cross-currency debt swap agreements	—			13,133			15,081			14,297
Interest rate hedge agreements	(100		)	(2,662		)	(13,261		)	(10,559		)
	$	(1,170	)	$	10,935		$	2,724		$	4,775



	Gain/(Loss) Reclassified from Other Comprehensive Income into Earnings (Effective Portion)
	Three Months Ended September 30,						Nine Months Ended September 30,
Derivatives designated as cash flow hedging instruments	2020			2019			2020			2019
Foreign currency forward contracts	$	621		$	556		$	1,493		$	930
Cross-currency debt swap agreements	—			9,868			18,510			12,119
Interest rate hedge agreements	(1,198		)	(150		)	(2,644		)	(194		)
	$	(577	)	$	10,274		$	17,359		$	12,855

Foreign Currency Forward Contracts Not Designated as Hedging Instruments

The Company uses foreign currency forward contracts that are not designated as qualifying cash flow hedging instruments to mitigate certain balance sheet exposures (payables and receivables denominated in foreign currencies), as well as 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. These contracts generally mature within 12 months from their inception. At September 30, 2020 and December 31, 2019, the notional amounts of the Company’s foreign currency forward contracts used to mitigate the exposures discussed above were approximately $106,474,000 and $72,119,000, respectively. The Company estimates the fair values of foreign currency forward 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 consolidated condensed statements of operations. The foreign currency contracts are classified under Level 2 of the fair value hierarchy (see Note 16).

The following table summarizes the location of net gains and losses in the consolidated condensed statements of operations that were recognized during the three and nine months ended September 30, 2020 and 2019, respectively, in addition to the derivative contract type (in thousands):



	Location of Net Gain/(Loss) Recognized in Income on Derivative Instruments	Amount of Net Gain/(Loss) Recognized in Income on Derivative Instruments
Derivatives not designated as hedging instruments		Three Months Ended September 30,					Nine Months Ended September 30,
Derivatives not designated as hedging instruments		2020			2019		2020		2019
Foreign currency forward contracts	Other expense, net	$	(4,639	)	$	4,035	$	622	$	5,476

In addition, for the three months ended September 30, 2020 and 2019, the Company recognized net foreign currency transaction gains of $10,098,000 and losses of $10,051,000, respectively, and net foreign currency transaction gains of $7,857,000 and losses of $12,660,000, respectively, for the nine months ended September 30, 2020 and 2019, related to transactions with its foreign subsidiaries, respectively.

Accumulated Other Comprehensive Income (Loss)

9 Months Ended

Sep. 30, 2020

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Income (Loss)

Note 18. Accumulated Other Comprehensive Loss

The following table details the amounts reclassified from accumulated other comprehensive loss to cost of goods sold, as well as changes in foreign currency translation for the three and nine months ended September 30, 2020. Amounts are in thousands.



	Derivative Instruments			Foreign Currency Translation			Total

Accumulated other comprehensive loss, June 30, 2020, after tax	$	(14,792	)	$	(25,000	)	$	(39,792	)
Change in derivative instruments	(1,170		)	—			(1,170		)
Net gains reclassified to cost of goods sold	(621		)	—			(621		)
Net gains reclassified to interest expense	1,198			—			1,198
Income tax expense on derivative instruments	(66		)	—			(66		)
Foreign currency translation adjustments	—			9,128			9,128
Accumulated other comprehensive loss, September 30, 2020, after tax	$	(15,451	)	$	(15,872	)	$	(31,323	)



	Derivative Instruments			Foreign Currency Translation			Total

Accumulated other comprehensive loss, December 31, 2019, after tax	$	(4,203	)	$	(18,219	)	$	(22,422	)
Change in derivative instruments	2,724			—			2,724
Net gains reclassified to cost of goods sold	(1,493		)	—			(1,493		)
Net gains reclassified to other expense	(16,781		)	—			(16,781		)
Net gains reclassified to interest expense	915			—			915
Income tax benefit on derivative instruments	3,387			—			3,387
Foreign currency translation adjustments	—			2,347			2,347
Accumulated other comprehensive loss, September 30, 2020, after tax	$	(15,451	)	$	(15,872	)	$	(31,323	)

Segment Information

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Segment Information

Note 19. Segment Information

The Company has two reportable operating segments: Golf Equipment operating segment and Apparel, Gear and Other operating segment. The Golf Equipment operating segment, which is comprised of golf club and golf ball products, includes Callaway Golf branded woods, hybrids, irons, wedges, Odyssey putters, including Toulon Design putters by Odyssey, packaged sets, Callaway Golf and Strata branded golf balls and sales of pre-owned golf clubs. The Apparel, Gear and Other operating segment includes Jack Wolfskin outdoor apparel, gear and accessories, TravisMathew golf and lifestyle apparel and accessories, and Callaway and Ogio soft goods, which consist of golf apparel and accessories (including golf bags and gloves), storage gear for sport and personal use, and royalties from licensing of the Company’s trademarks and service marks for various soft

goods products. There are no significant intersegment transactions during the three and nine months ended September 30, 2020.

The tables 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,
	2020			2019			2020			2019
Net sales:
Golf Equipment	$	267,277		$	210,502		$	768,881		$	826,474
Apparel, Gear and Other	208,282			215,715			445,950			562,648
	$	475,559		$	426,217		$	1,214,831		$	1,389,122
Income (loss) before income taxes:
Golf Equipment	$	56,784		$	23,124		$	144,585		$	148,782
Apparel, Gear and Other	25,909			34,877			10,399			68,909
Reconciling items⁽¹⁾	(24,901		)	(24,825		)	(234,762		)	(90,352		)
	$	57,792		$	33,176		$	(79,778	)	$	127,339
Additions to long-lived assets:⁽²⁾
Golf Equipment	$	1,616		$	7,648		$	21,356		$	20,989
Apparel, Gear and Other	3,508			6,783			16,774			15,465
	$	5,124		$	14,431		$	38,130		$	36,454

(1)

Reconciling items represent the deduction of corporate general and administration expenses and other income (expenses), which are not utilized by management in determining segment profitability. The increase in reconciling items for the nine months ended September 30, 2020 compared to September 30, 2019 was primarily due to the recognition of a $174,269,000 impairment loss related to the Jack Wolfskin trade name and goodwill (see Note 9) and a $4,198,000 increase in interest expense. These increases were partially offset by a $26,028,000 increase in other income primarily due to foreign currency and hedging contract gains, combined with $10,703,000 of amortization expense recognized in 2019 related to the inventory valuation step-up from Jack Wolfskin acquisition.


(2)	Additions to long-lived assets are comprised of purchases of property, plant and equipment.

Basis of Presentation (Policies)	9 Months Ended
Basis of Presentation (Policies)	Sep. 30, 2020
Accounting Policies [Abstract]
Estimated Credit Losses	Specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. An estimate of credit losses for the remaining customers in the aggregate is based upon historical bad debts, current customer receivable balances, age of customer receivable balances, the customers' financial condition, all of which are subject to change. Additionally, the Company’s monitoring activities now consider future reasonable and supportable forecasts of economic conditions to adjust all general reserve percentages as necessary. Balances are written off when determined to be uncollectible.
Recent Accounting Standards	Recent Accounting Standards In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity." This ASU simplifies accounting for convertible instruments, removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, and also simplifies the diluted earnings per share (EPS) calculation in certain areas. This ASU is effective for public filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021. Early adoption is permitted. The Company is currently evaluating the impact this ASU will have on its consolidated condensed financial statements and disclosures. In March 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This ASU provides optional expedients and exceptions for applying U.S. GAAP to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. This ASU is effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently evaluating the impact this ASU will have on its consolidated condensed financial statements and disclosures. In December 2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes." This ASU removes specific exceptions to the general principles in Accounting Standards Codification ("ASC") Topic 740, "Accounting for Income Taxes" ("Topic 740") and simplifies certain U.S. GAAP requirements. ASU 2019-12 is effective for public filers for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the impact this ASU will have on its consolidated condensed financial statements and disclosures. Adoption of New Accounting Standards On January 1, 2020, the Company adopted ASU No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("Topic 326") utilizing the modified retrospective approach. This new standard is intended to improve financial reporting by requiring timelier recording of credit losses on the Company's trade account receivable and requires the measurement of all expected credit losses based on historical experience, current conditions, and reasonable and supportable forecasts. Upon the completion of the Company's assessment of Topic 326, the Company concluded that its prior methodology of estimating credit losses on its trade accounts receivable closely aligns with the requirements of the new standard, and therefore, the adoption of this ASU did not have a material impact on the Company consolidated condensed financial statements. For further information, see Note 4. Upon adoption of Topic 326, the Company recorded a cumulative adjustment to beginning retained earnings of $289,000, which reflected an increase to the allowance for doubtful accounts. As the impact to the Company's consolidated condensed financial statements in the first quarter of 2020 was not material, prior period information that is presented for comparative purposes has not been restated and continues to be reported under the accounting standards that were in effect during those periods. On January 1, 2020, the Company adopted ASU No. 2018-13, "Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement." The amendments in this ASU removed, modified or added to the disclosure requirements for fair value measurements in ASC Topic 820, "Fair Value Measurement." The adoption of this ASU did not have a material impact on the Company's consolidated condensed financial statements and disclosures.
Revenue Recognition	Product Sales The Company recognizes revenue from the sale of its products when it satisfies the terms of a sales order from a customer, and transfers control of the products ordered to the customer. Control transfers when products are shipped, and in certain cases, when products are received by customers. In addition, the Company recognizes revenue at the point of sale on transactions with consumers at its retail locations. Sales taxes, value added taxes and other taxes that are collected in connection with revenue transactions are withheld and remitted to the respective taxing authorities. As such, these taxes are excluded from revenue. The Company elected to account for shipping and handling as activities to fulfill the promise to transfer the good. Therefore, shipping and handling fees that are billed to customers are recognized in revenue and the associated shipping and handling costs are recognized in cost of goods sold as soon as control of the goods transfers to the customer. Royalty Income Royalty income is recognized over time in net sales as underlying product sales occur, subject to certain minimum royalties, in accordance with the related licensing arrangements. Royalty income is included in the Company's Apparel, Gear and Other operating segment. Total royalty income for the three months ended September 30, 2020 and 2019 was $5,849,000 and $5,466,000, respectively, and $14,946,000 and $15,611,000 for the nine months ended September 30, 2020 and 2019, respectively. Gift Cards Revenues from gift cards are deferred and recognized when the cards are redeemed. The Company’s gift cards have no expiration date. The Company recognizes revenue from unredeemed gift cards, otherwise known as breakage, when the likelihood of redemption becomes remote and under circumstances that comply with any applicable state escheatment laws. To determine when redemption is remote, the Company analyzes an aging of unredeemed cards (based on the date the card was last used or the activation date if the card has never been used) and compares that information with historical redemption trends. The Company uses this historical redemption rate to recognize breakage on unredeemed gift cards over the redemption period. The Company does not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions used to determine the timing of recognition of gift card revenues. As of September 30, 2020 and December 31, 2019, the Company's deferred revenue liability for gift cards was $2,046,000 and $2,190,000, respectively. During the three months ended September 30, 2020 and 2019, the Company recognized $795,000 and $528,000 of deferred gift card revenue, respectively, and $1,825,000 and $1,515,000 during the nine months ended September 30, 2020 and 2019, respectively. Variable Consideration The amount of revenue the Company recognizes is based on the amount of consideration it expects to receive from customers. The amount of consideration is the sales price adjusted for estimates of variable consideration, including sales returns, discounts and allowances as well as sales programs, sales promotions and price concessions that are offered by the Company as described below. These estimates are based on the amounts earned or to be claimed by customers on the related sales, and are therefore recorded as reductions to sales and trade accounts receivable. The Company’s primary sales program, the “Preferred Retailer Program,” offers potential rebates and discounts for participating retailers in exchange for providing certain benefits to the Company, including the maintenance of agreed upon inventory levels, prime product placement and retailer staff training. Under this program, qualifying retailers can earn either discounts or rebates based upon the amount of product purchased. Discounts are applied and recorded at the time of sale. For rebates, the Company estimates the amount of variable consideration related to the rebate at the time of sale based on the customer’s estimated qualifying current year product purchases. The estimate is based on the historical level of purchases, adjusted for any factors expected to affect the current year purchase levels. The estimated year-end rebate is adjusted quarterly based on actual purchase levels, as necessary. The Preferred Retailer Program is generally short-term in nature and the actual amount of rebate to be paid under this program is known as of the end of the year and paid to customers shortly after year-end. Historically, the Company's actual amount of variable consideration related to its Preferred Retailer Program has not been materially different from its estimates. The Company also offers short-term sales program incentives, which include sell-through promotions and price concessions or price reductions. Sell-through promotions are generally offered throughout the product's life cycle of approximately two years, and price concessions or price reductions are generally offered at the end of the product's life cycle. The estimated variable consideration related to these programs is based on a rate that includes historical and forecasted data. The Company records a reduction to net sales using this rate at the time of the sale. The Company monitors this rate against actual results and forecasted estimates and adjusts the rate as deemed necessary in order to reflect the amount of consideration it expects to receive from its customers. There were no material changes to the rate during the three and nine months ended September 30, 2020 and 2019. Historically, the Company's actual amount of variable consideration related to these sales programs has not been materially different from its estimates. The Company records an estimate for anticipated returns as a reduction of sales and cost of sales, and accounts receivable, in the period that the related sales are recorded. Sales returns are estimated based upon historical returns, current economic trends, changes in customer demands and sell-through of products. The Company also offers certain customers sales programs that allow for specific returns. The Company records a return liability as an offset to accounts receivable for anticipated returns related to these sales programs at the time of the sale based on the terms of the sales program. The cost recovery of inventory associated with this reserve is accounted for in other current assets. Historically, the Company’s actual sales returns have not been materially different from management’s original estimates.

Leases (Tables)

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Supplemental Balance Sheet Information Related to Leases

Supplemental balance sheet information related to leases is as follows (in thousands):



	Balance Sheet Location	September 30, 2020		December 31, 2019
Operating leases
ROU assets, net	Operating lease ROU assets, net	$	186,721	$	160,098
Lease liabilities, short-term	Operating lease liabilities, short-term	$	28,011	$	26,418
Lease liabilities, long-term	Operating lease liabilities, long-term	$	170,732	$	137,696

Finance Leases
ROU assets, net,	Other assets	$	930	$	1,263
Lease liabilities, short-term	Accounts payable and accrued expenses	$	271	$	589
Lease liabilities, long-term	Long-term other	$	493	$	558

Components of Lease Expense and Other Information Related to Leases

The components of lease expense are as follows (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Operating lease costs	$	10,458	$	8,758	$	31,759	$	28,357
Financing lease costs:
Amortization of right-of-use assets	185		180		505		657
Interest on lease liabilities	9		14		31		69
Total financing lease costs	194		194		536		726
Variable lease costs	590		1,091		2,473		3,277
Total lease costs	$	11,242	$	10,043	$	34,768	$	32,360

Other information related to leases was as follows (in thousands):



	Nine Months Ended September 30,
Supplemental Cash Flows Information	2020		2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	29,122	$	29,783
Operating cash flows from finance leases	$	31	$	69
Financing cash flows from finance leases	$	530	$	583

Lease liabilities arising from new ROU assets:
Operating leases	$	54,678	$	8,819
Finance leases	$	131	$	172



	September 30, 2020		December 31, 2019
Weighted average remaining lease term (years):
Operating leases	10.0		10.4
Finance leases	3.1		2.8

Weighted average discount rate:
Operating leases	5.4	%	5.7	%
Finance leases	3.5	%	4.2	%

Future Minimum Lease Obligations

Future minimum lease obligations as of September 30, 2020 were as follows (in thousands):



	Operating Leases		Finance Leases
Remainder of 2020	$	10,644	$	89
2021	36,073		274
2022	31,426		234
2023	27,259		124
2024	23,591		51
Thereafter	130,615		31
Total future lease payments	259,608		803
Less: imputed interest	60,865		39
Total	$	198,743	$	764

Future Minimum Lease Obligations

Future minimum lease obligations as of September 30, 2020 were as follows (in thousands):



	Operating Leases		Finance Leases
Remainder of 2020	$	10,644	$	89
2021	36,073		274
2022	31,426		234
2023	27,259		124
2024	23,591		51
Thereafter	130,615		31
Total future lease payments	259,608		803
Less: imputed interest	60,865		39
Total	$	198,743	$	764

Revenue Recognition (Tables)

9 Months Ended

Sep. 30, 2020

Revenue Recognition [Abstract]

Disaggregation of Revenue

The following table presents the Company's revenue disaggregated by major product category and operating and reportable segment (in thousands):



	Operating and Reportable Segments
	Three Months Ended September 30, 2020						Three Months Ended September 30, 2019
	Golf Equipment		Apparel, Gear & Other		Total		Golf Equipment		Apparel, Gear & Other		Total
Major product category:
Golf Clubs	$	209,356	$	—	$	209,356	$	168,005	$	—	$	168,005
Golf Balls	57,921		—		57,921		42,497		—		42,497
Apparel	—		125,609		125,609		—		139,998		139,998
Gear, Accessories & Other	—		82,673		82,673		—		75,717		75,717
	$	267,277	$	208,282	$	475,559	$	210,502	$	215,715	$	426,217



	Operating and Reportable Segments
	Nine Months Ended September 30, 2020						Nine Months Ended September 30, 2019
	Golf Equipment		Apparel, Gear & Other		Total		Golf Equipment		Apparel, Gear & Other		Total
Major product category:
Golf Clubs	$	616,620	$	—	$	616,620	$	653,531	$	—	$	653,531
Golf Balls	152,261		—		152,261		172,943		—		172,943
Apparel	—		239,201		239,201		—		309,439		309,439
Gear, Accessories & Other	—		206,749		206,749		—		253,209		253,209
	$	768,881	$	445,950	$	1,214,831	$	826,474	$	562,648	$	1,389,122

The following table presents information about the geographical areas in which the Company operates. Revenues are attributed to the location to which the product was shipped (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Major Geographic Region:
United States	$	214,619	$	161,631	$	603,836	$	658,051
Europe	134,680		133,351		281,473		341,594
Japan	56,530		64,176		158,517		193,080
Rest of World	69,730		67,059		171,005		196,397
	$	475,559	$	426,217	$	1,214,831	$	1,389,122

Estimated Credit Losses (Tables)

9 Months Ended

Sep. 30, 2020

Estimated Credit Losses [Abstract]

Schedule of reconciliation of the activity related to the Company’s allowance for estimated credit losses

The following table provides a reconciliation of the activity related to the Company’s allowance for estimated credit losses (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
Beginning balance	$	8,944		$	5,499		$	5,992		$	5,610
Adjustment due to the adoption of Topic 326	—			—			289			—
Provision for credit losses	(1,340		)	778			2,292			920
Write-off of uncollectible amounts, net of recoveries	(258		)	(155		)	(1,227		)	(408		)
Ending balance	$	7,346		$	6,122		$	7,346		$	6,122

Business Combinations (Tables)

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

Schedule of Business Acquisitions, by Acquisition

The following table summarizes the fair values of the assets acquired and liabilities assumed as of the acquisition date based on the purchase price allocation (in thousands):



	At January 4, 2019
Assets Acquired
Cash		$	58,096
Accounts receivable		26,637
Inventories		94,504
Income tax receivable		6,588
Other current assets		11,483
Property and equipment		20,930
Operating lease right-of-use assets		120,865
Deferred tax assets		2,930
Other assets		23
Intangibles - trade name⁽¹⁾		239,295
Intangibles - retail partners & distributor relationships		38,743
Goodwill⁽¹⁾		150,180
Total assets acquired		770,274
Liabilities Assumed
Accounts Payable and accrued liabilities		46,124
Income taxes payable, long-term		2,416
Operating lease liabilities		120,524
Deferred tax liabilities		80,009
Net assets acquired		$	521,201

(1)

In the second quarter of 2020, the Company wrote down goodwill and the Jack Wolfskin trade name to their fair values, which resulted in impairment charges of $148,375,000 and $25,894,000, respectively (see Note 9).

Earnings per Common Share (Tables)

9 Months Ended

Sep. 30, 2020

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings Per Share

The following table summarizes 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,
	2020		2019		2020			2019
Earnings (loss) per common share—basic
Net income (loss) attributable to Callaway Golf Company	$	52,432	$	31,048	$	(86,358	)	$	108,626
Weighted-average common shares outstanding—basic	94,171		94,100		94,207			94,284
Basic earnings (loss) per common share	$	0.56	$	0.33	$	(0.92	)	$	1.15
Earnings (loss) per common share—diluted
Net income (loss) attributable to Callaway Golf Company	$	52,432	$	31,048	$	(86,358	)	$	108,626
Weighted-average common shares outstanding—basic	94,171		94,100		94,207			94,284
Convertible notes weighted-average shares outstanding	924		—		—			—
Outstanding options, restricted stock units and performance share units	1,517		2,187		—			1,913
Weighted-average common shares outstanding—diluted	96,612		96,287		94,207			96,197
Diluted earnings (loss) per common share	$	0.54	$	0.32	$	(0.92	)	$	1.13

Inventories (Tables)

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Inventories

Inventories are summarized below (in thousands):



	September 30, 2020		December 31, 2019
Inventories:
Raw materials	$	59,031	$	76,140
Work-in-process	843		860
Finished goods	264,978		379,639
	$	324,852	$	456,639

Goodwill and Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

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, 2020							December 31, 2019
	Useful Life (Years)	Gross⁽¹⁾		Accumulated Amortization			Net Book Value		Gross		Accumulated Amortization			Net Book Value
Indefinite-lived:
Trade name, trademark, trade dress and other	NA	$	437,546		$	—	$	437,546	$	453,837		$	—	$	453,837
Amortizing:
Patents	2-16	31,581			31,581		—		31,581			31,581		—
Customer and distributor relationships and other	1-10	55,794			18,367		37,427		53,904			14,318		39,586
Total intangible assets		$	524,921		$	49,948	$	474,973	$	539,322		$	45,899	$	493,423

Amortization Expense Related to Intangible Assets

Amortization expense related to intangible assets at September 30, 2020 in each of the next five fiscal years and beyond is expected to be incurred as follows (in thousands):



Remainder of 2020	$	3,586
2021	4,724
2022	4,548
2023	4,409
2024	4,409
Thereafter	15,751
	$	37,427

Product Warranty (Tables)

9 Months Ended

Sep. 30, 2020

Guarantees [Abstract]

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,
	2020			2019			2020			2019
Beginning balance	$	9,779		$	10,976		$	9,636		$	7,610
Provision	2,137			1,494			5,507			6,492
Provision liability assumed from acquisition	—			—			—			2,208
Claims paid/costs incurred	(2,276		)	(2,349		)	(5,503		)	(6,189		)
Ending balance	$	9,640		$	10,121		$	9,640		$	10,121

Income Taxes (Tables)

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

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



Tax Jurisdiction		Years No Longer Subject to Audit
U.S. federal		2010 and prior
California (U.S.)		2008 and prior
Germany		2014 and prior
Japan		2013 and prior
South Korea		2014 and prior
United Kingdom		2015 and prior

Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Future Purchase Commitments

The minimum obligation that the Company is required to pay as of September 30, 2020 under these agreements is $70,699,000 over the next four years as follows (in thousands):



Remainder of 2020	$	36,774
2021	25,229
2022	7,085
2023	1,505
2024	106
	$	70,699

Share-Based Employee Compensation (Tables)

9 Months Ended

Sep. 30, 2020

Share-based Payment Arrangement [Abstract]

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs



	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019

Cost of sales	$	158	$	213	$	553	$	715
Operating expenses	3,114		2,300		7,513		8,763
Total cost of share-based compensation included in income, before income tax	$	3,272	$	2,513	$	8,066	$	9,478

Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Disclosures [Abstract]

Valuation of Foreign Currency Exchange Contracts by Pricing Levels



	Fair Value			Level 1		Level 2			Level 3
September 30, 2020
Foreign currency forward contracts—asset position	$	2,701		$	—	$	2,701		$	—
Foreign currency forward contracts—liability position	(2,440		)	—		(2,440		)	—

Interest rate hedge agreements—liability position	(19,505		)	—		(19,505		)	—
	$	(19,244	)	$	—	$	(19,244	)	$	—
December 31, 2019
Foreign currency forward contracts—asset position	$	61		$	—	$	61		$	—
Foreign currency forward contracts—liability position	(766		)	—		(766		)	—

Cross-currency debt swap agreements—asset position	6,163			—		6,163			—
Cross-currency debt swap agreements—liability position	(25		)	—		(25		)	—

Interest rate hedge agreements—liability position	(8,894		)	—		(8,894		)	—
	$	(3,461	)	$	—	$	(3,461	)	$	—

Fair Value Relating to Financial Assets and Liabilities



	September 30, 2020				December 31, 2019
	Carrying Value		Fair Value		Carrying Value		Fair Value
Term Loan Facility⁽¹⁾	$	442,800	$	443,221	$	446,400	$	450,864
2020 Japan Term Loan Facility⁽²⁾	$	18,966	$	18,966	$	—	$	—
Convertible Notes⁽³⁾	$	258,750	$	349,561	$	—	$	—
Primary Asset-Based Revolving Credit Facility⁽⁴⁾	$	28,813	$	28,813	$	114,480	$	114,480
Japan ABL Facility⁽⁴⁾	$	1,422	$	1,422	$	30,100	$	30,100
Equipment notes⁽⁵⁾	$	33,881	$	33,881	$	19,715	$	19,715


(1)	In January 2019, the Company entered into a Term Loan Facility. The fair value of this debt is categorized within Level 2 of the fair value hierarchy. See Note 6 for further information.


(2)	In August 2020, the Company entered into the 2020 Japan Term Loan Facility. The fair value of this debt is categorized within Level 2 of the fair value hierarchy. See Note 6 for further information.


(3)	In May 2020, the Company issued $258,750,000 of 2.75% Convertibles Notes due in 2026. The fair value of this debt is categorized within Level 2 of the fair value hierarchy. For further discussion, see Note 6.

(4)


(5)	In December 2017, August 2019 and March 2020, the Company entered into equipment notes that are both secured by certain equipment at the Company's golf ball manufacturing facility. The fair value of this debt is categorized within Level 2 of the fair value hierarchy. See Note 6 for further information.

Derivatives and Hedging (Tables)

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

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



	Balance Sheet Location	Fair Value of Asset Derivatives
	Balance Sheet Location	September 30, 2020		December 31, 2019
Derivatives designated as cash flow hedging instruments:
Foreign currency forward contracts	Other current assets	$	158	$	53
Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Other current assets	2,543		8

Total asset position		$	2,701	$	61



	Balance Sheet Location	Fair Value of Liability Derivatives
	Balance Sheet Location	September 30, 2020		December 31, 2019
Derivatives designated as cash flow hedging instruments:
Foreign currency forward contracts	Accounts payable and accrued expenses	$	225	$	24

Cross-currency debt swap agreements	Accounts payable and accrued expenses	—		25

Interest rate hedge agreements	Accounts payable and accrued expenses	4,757		1,865
	Other long-term liabilities	14,748		7,030
		19,730		8,944
Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Accounts payable and accrued expenses	2,215		741

Total liability position		$	21,945	$	9,685

Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss)



	Gain/(Loss) Recognized in Other Comprehensive Income (Effective Portion)
	Three Months Ended September 30,						Nine Months Ended September 30,
Derivatives designated as cash flow hedging instruments	2020			2019			2020			2019
Foreign currency forward contracts	$	(1,070	)	$	464		$	904		$	1,037
Cross-currency debt swap agreements	—			13,133			15,081			14,297
Interest rate hedge agreements	(100		)	(2,662		)	(13,261		)	(10,559		)
	$	(1,170	)	$	10,935		$	2,724		$	4,775



	Gain/(Loss) Reclassified from Other Comprehensive Income into Earnings (Effective Portion)
	Three Months Ended September 30,						Nine Months Ended September 30,
Derivatives designated as cash flow hedging instruments	2020			2019			2020			2019
Foreign currency forward contracts	$	621		$	556		$	1,493		$	930
Cross-currency debt swap agreements	—			9,868			18,510			12,119
Interest rate hedge agreements	(1,198		)	(150		)	(2,644		)	(194		)
	$	(577	)	$	10,274		$	17,359		$	12,855

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



	Location of Net Gain/(Loss) Recognized in Income on Derivative Instruments	Amount of Net Gain/(Loss) Recognized in Income on Derivative Instruments
Derivatives not designated as hedging instruments		Three Months Ended September 30,					Nine Months Ended September 30,
Derivatives not designated as hedging instruments		2020			2019		2020		2019
Foreign currency forward contracts	Other expense, net	$	(4,639	)	$	4,035	$	622	$	5,476

Accumulated Other Comprehensive Income (Loss) (Tables)

9 Months Ended

Sep. 30, 2020

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)



	Derivative Instruments			Foreign Currency Translation			Total

Accumulated other comprehensive loss, June 30, 2020, after tax	$	(14,792	)	$	(25,000	)	$	(39,792	)
Change in derivative instruments	(1,170		)	—			(1,170		)
Net gains reclassified to cost of goods sold	(621		)	—			(621		)
Net gains reclassified to interest expense	1,198			—			1,198
Income tax expense on derivative instruments	(66		)	—			(66		)
Foreign currency translation adjustments	—			9,128			9,128
Accumulated other comprehensive loss, September 30, 2020, after tax	$	(15,451	)	$	(15,872	)	$	(31,323	)



	Derivative Instruments			Foreign Currency Translation			Total

Accumulated other comprehensive loss, December 31, 2019, after tax	$	(4,203	)	$	(18,219	)	$	(22,422	)
Change in derivative instruments	2,724			—			2,724
Net gains reclassified to cost of goods sold	(1,493		)	—			(1,493		)
Net gains reclassified to other expense	(16,781		)	—			(16,781		)
Net gains reclassified to interest expense	915			—			915
Income tax benefit on derivative instruments	3,387			—			3,387
Foreign currency translation adjustments	—			2,347			2,347
Accumulated other comprehensive loss, September 30, 2020, after tax	$	(15,451	)	$	(15,872	)	$	(31,323	)

Segment Information (Tables)

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Operating Segments

The tables 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,
	2020			2019			2020			2019
Net sales:
Golf Equipment	$	267,277		$	210,502		$	768,881		$	826,474
Apparel, Gear and Other	208,282			215,715			445,950			562,648
	$	475,559		$	426,217		$	1,214,831		$	1,389,122
Income (loss) before income taxes:
Golf Equipment	$	56,784		$	23,124		$	144,585		$	148,782
Apparel, Gear and Other	25,909			34,877			10,399			68,909
Reconciling items⁽¹⁾	(24,901		)	(24,825		)	(234,762		)	(90,352		)
	$	57,792		$	33,176		$	(79,778	)	$	127,339
Additions to long-lived assets:⁽²⁾
Golf Equipment	$	1,616		$	7,648		$	21,356		$	20,989
Apparel, Gear and Other	3,508			6,783			16,774			15,465
	$	5,124		$	14,431		$	38,130		$	36,454

(1)


(2)	Additions to long-lived assets are comprised of purchases of property, plant and equipment.

Basis of Presentation Adoption of New Accounting Standards (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($)
Adjustment due to the adoption of Topic 326	$ 289
ASU 2016-13 (Topic 326)
Adjustment due to the adoption of Topic 326	$ 289

Leases - Additional Information (Details) - COVID-19 $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2020 USD ($)
Lessee, Lease, Description [Line Items]
Rent concession payable	$ 687	$ 687
Rent abatement	$ 120	$ 1,431

Leases - Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Operating leases
ROU assets, net	$ 186,721	$ 160,098
Lease liabilities, short-term	28,011	26,418
Lease liabilities, long-term	170,732	137,696
Finance Leases
ROU assets, net,	930	1,263
Lease liabilities, short-term	271	589
Lease liabilities, long-term	$ 493	$ 558

Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Leases [Abstract]
Variable lease costs	$ 590	$ 1,091	$ 2,473	$ 3,277
Operating lease costs	10,458	8,758	31,759	28,357
Financing lease costs:
Amortization of right-of-use assets	185	180	505	657
Interest on lease liabilities	9	14	31	69
Total financing lease costs	194	194	536	726
Total lease costs	$ 11,242	$ 10,043	$ 34,768	$ 32,360

Leases - Other Information Related to Leases (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Leases [Abstract]
Operating cash flows from operating leases	$ 29,122	$ 29,783
Operating cash flows from finance leases	31	69
Financing cash flows from finance leases	530	583
Lease liabilities arising from new ROU assets, Operating leases	54,678	8,819
Lease liabilities arising from new ROU assets, Finance leases	$ 131	$ 172
Weighted Average remaining lease term, Operating leases	10 years		10 years 4 months 24 days
Weighted Average remaining lease term, Finance leases	3 years 1 month 6 days		2 years 9 months 18 days
Weighted Average Discount Rate, Operating leases	5.40%		5.70%
Weighted Average Discount Rate, Finance leases	3.50%		4.20%

Leases - Future Minimum Lease Obligations (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Operating Leases
Remainder of 2020	$ 10,644
2021	36,073
2022	31,426
2023	27,259
2024	23,591
Thereafter	130,615
Total future lease payments	259,608
Less: imputed interest	60,865
Total	198,743
Finance Leases
Remainder of 2020	89
2021	274
2022	234
2023	124
2024	51
Thereafter	31
Total future lease payments	803
Less: imputed interest	39
Total	$ 764

Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Disaggregation of Revenue [Line Items]
Net sales	$ 475,559	$ 426,217	$ 1,214,831	$ 1,389,122
Golf Equipment
Disaggregation of Revenue [Line Items]
Net sales	267,277	210,502	768,881	826,474
Apparel, Gear & Other
Disaggregation of Revenue [Line Items]
Net sales	208,282	215,715	445,950	562,648
Golf Clubs
Disaggregation of Revenue [Line Items]
Net sales	209,356	168,005	616,620	653,531
Golf Clubs \| Golf Equipment
Disaggregation of Revenue [Line Items]
Net sales	209,356	168,005	616,620	653,531
Golf Clubs \| Apparel, Gear & Other
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	0
Golf Balls
Disaggregation of Revenue [Line Items]
Net sales	57,921	42,497	152,261	172,943
Golf Balls \| Golf Equipment
Disaggregation of Revenue [Line Items]
Net sales	57,921	42,497	152,261	172,943
Golf Balls \| Apparel, Gear & Other
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	0
Apparel
Disaggregation of Revenue [Line Items]
Net sales	125,609	139,998	239,201	309,439
Apparel \| Golf Equipment
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	0
Apparel \| Apparel, Gear & Other
Disaggregation of Revenue [Line Items]
Net sales	125,609	139,998	239,201	309,439
Gear, Accessories & Other
Disaggregation of Revenue [Line Items]
Net sales	82,673	75,717	206,749	253,209
Gear, Accessories & Other \| Golf Equipment
Disaggregation of Revenue [Line Items]
Net sales	0	0	0	0
Gear, Accessories & Other \| Apparel, Gear & Other
Disaggregation of Revenue [Line Items]
Net sales	82,673	75,717	206,749	253,209
United States
Disaggregation of Revenue [Line Items]
Net sales	214,619	161,631	603,836	658,051
Europe
Disaggregation of Revenue [Line Items]
Net sales	134,680	133,351	281,473	341,594
Japan
Disaggregation of Revenue [Line Items]
Net sales	56,530	64,176	158,517	193,080
Rest of World
Disaggregation of Revenue [Line Items]
Net sales	$ 69,730	$ 67,059	$ 171,005	$ 196,397

Revenue Recognition - Contracts with Customers (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Net sales	$ 475,559	$ 426,217	$ 1,214,831	$ 1,389,122
Revenue from gift cards, recognized in period	795	528	1,825	1,515
Unredeemed gift cards
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Deferred revenue from gift cards	2,046		2,046		$ 2,190
Royalties
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Net sales	$ 5,849	$ 5,466	$ 14,946	$ 15,611

Estimated Credit Losses (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Estimated Credit Losses (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning Balance	$ 8,944	$ 5,499	$ 5,992	$ 5,610
Adjustment due to the adoption of Topic 326			289
Provision for credit losses	(1,340)	778	2,292	920
Write-off of uncollectible amounts, net of recoveries	(258)	(155)	(1,227)	(408)
Ending Balance	$ 7,346	$ 6,122	$ 7,346	$ 6,122

Business Combinations Business Combinations - Additional Information (Details) $ / shares in Units, € in Thousands, shares in Millions		1 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended
	Oct. 27, 2020 USD ($) $ / shares shares	Jan. 31, 2019 EUR (€)	Jan. 31, 2019 USD ($)	Sep. 30, 2020 USD ($)	Mar. 31, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)	Jan. 04, 2019 EUR (€)	Jan. 04, 2019 USD ($)
Business Acquisition [Line Items]
Goodwill				$ 56,041,000		$ 56,041,000		$ 203,743,000
Goodwill, impairment loss				$ 0		$ 148,375,000
Deferred tax liability resulting from acquisition								77,079,000
Valuation allowance on deferred tax liability								8,281,000
Percentage of ownership interest in Topgolf				14.30%		14.30%
Customer and Distributor Relationships
Business Acquisition [Line Items]
Useful Life (years)		10 years	10 years
Jack Wolfskin
Business Acquisition [Line Items]
Consideration transferred		€ 457,394	$ 521,201,000
Cash acquired									€ 50,984,000	$ 58,096,000
Goodwill				$ 150,180,000		$ 150,180,000				$ 150,180,000
Business acquisition, transaction costs								$ 9,987,000
Realized foreign currency transaction gain (loss)					$ (3,215,000)
Jack Wolfskin \| General and Administrative Expense
Business Acquisition [Line Items]
Business combination, acquisition related costs				0			$ 6,326,000
Jack Wolfskin \| Royalty Savings Income Approach Method \| Measurement Input, Royalty Rate
Business Acquisition [Line Items]
Business combination, assumed indefinite lived intangible assets, measurement input									0.050	0.050
Jack Wolfskin \| Royalty Savings Income Approach Method \| Measurement Input, Discount Rate
Business Acquisition [Line Items]
Business combination, assumed indefinite lived intangible assets, measurement input									0.100	0.100
Subsequent Event
Business Acquisition [Line Items]
Date of merger agreement	Oct. 27, 2020
Percentage of common stock	20.00%
Subsequent Event \| Topgolf International, Inc
Business Acquisition [Line Items]
Date of merger agreement	Oct. 27, 2020
Business acquisition, equity interest issued or issuable, number of shares (in share) \| shares	90
Business acquisition, equity interest issued or issuable, value assigned	$ 1,986,000,000
Business acquisition, equity interest issued or issuable excluding company, value assigned	$ 1,745,000,000
Business acquisition, share price (in dollars per share) \| $ / shares	$ 19.40
Gain (loss) on contract termination	$ 75,000,000
Former Topgolf Stakeholders \| Term Loan B Facility \| Secured Debt
Business Acquisition [Line Items]
Debt instrument, face amount			$ 480,000,000
Former Topgolf Stakeholders \| Subsequent Event
Business Acquisition [Line Items]
Noncontrolling interest, ownership percentage by noncontrolling owners	48.50%
Trade name, trademark and trade dress and other
Business Acquisition [Line Items]
Impairment of intangible assets (excluding goodwill)				$ 0		$ 25,894,000

Business Combinations - Summary of Fair Values of the Assets Acquired and Liabilities Assumed (Details) € in Thousands, $ in Thousands	Sep. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)	Jan. 04, 2019 EUR (€)	Jan. 04, 2019 USD ($)
Business Acquisition [Line Items]
Operating lease right-of-use assets	$ 186,721	$ 160,098
Goodwill	56,041	$ 203,743
Operating lease liabilities	198,743
Jack Wolfskin
Business Acquisition [Line Items]
Cash			€ 50,984,000	$ 58,096
Accounts receivable				26,637
Inventories				94,504
Income tax receivable				6,588
Other current assets				11,483
Property and equipment				20,930
Operating lease right-of-use assets				120,865
Deferred tax assets				2,930
Other assets				23
Goodwill	$ 150,180			150,180
Total assets acquired				770,274
Accounts Payable and accrued liabilities				46,124
Income taxes payable, long-term				2,416
Operating lease liabilities				120,524
Deferred tax liabilities				80,009
Net assets acquired				521,201
Franchisee & Distributor Relationships \| Jack Wolfskin
Business Acquisition [Line Items]
Intangibles - retail partners & distributor relationships				38,743
Trade Names \| Jack Wolfskin
Business Acquisition [Line Items]
Intangibles - trade name(1)				$ 239,295

Financing Arrangements - Primary Asset Based Revolving Credit Facility (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2020	Dec. 31, 2019	Sep. 30, 2019	Dec. 31, 2018	Jun. 30, 2018
Debt Instrument [Line Items]
Asset-based credit facilities	$ 30,235,000	$ 144,580,000			$ 110,711,000
Cash and cash equivalents	286,656,000	106,666,000	$ 88,216,000	$ 63,981,000	88,216,000
Total available liquidity	636,891,000				340,186,000
Line of credit facility, maximum borrowing capacity	$ 400,000,000
Intellectual Property
Debt Instrument [Line Items]
Line of credit, maximum borrowing capacity, quarterly reduction period	3 years
Real Estate
Debt Instrument [Line Items]
Line of credit, maximum borrowing capacity, quarterly reduction period	15 years
United States
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 260,000,000
Germany
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	70,000,000
Canada
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	25,000,000
United Kingdom
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	45,000,000
CARES Act
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	50,000,000
Carrying Value \| ABL Facility
Debt Instrument [Line Items]
Credit facilities	28,813,000	114,480,000
Bank of America, N.A.
Debt Instrument [Line Items]
Letters of credit outstanding, amount					$ 1,014,000
Line of credit facility, average outstanding amount	134,838,000
Line of credit facility, average remaining borrowing capacity	$ 208,055,000
Debt covenant, borrowing base below threshold, ratio required to be in compliance, period	30 days
Fixed charges coverage ratio covenant reference borrowing capacity, percent	10.00%
Fixed charge coverage ratio covenant reference borrowing capacity	$ 40,000,000
Line of credit facility, interest rate at period end	3.78%
Line of credit facility, unused capacity, commitment fee percentage	0.25%
Debt instrument, fee amount	$ 3,615,000
Unamortized loan origination fees	$ 1,834,000	2,115,000
Line of credit facility, expiration date	May 31, 2024
Line of credit facility, dividend restrictions	In addition, the ABL Facility imposes restrictions on the amount the Company could pay in annual cash dividends, including certain restrictions on the amount of additional indebtedness and requirements to maintain a certain fixed charge coverage ratio under certain circumstances.
Bank of America, N.A. \| Carrying Value \| ABL Facility
Debt Instrument [Line Items]
Credit facilities	$ 28,813,000
Other Current Assets \| Bank of America, N.A.
Debt Instrument [Line Items]
Unamortized loan origination fees current	880,000	746,000
Other Assets \| Bank of America, N.A.
Debt Instrument [Line Items]
Unamortized loan origination fees, noncurrent	$ 954,000	$ 1,369,000

Financing Arrangements - Japan ABL Facilities (Details)	9 Months Ended
Financing Arrangements - Japan ABL Facilities (Details)	Sep. 30, 2020 JPY (¥)	Sep. 30, 2020 USD ($)	Dec. 31, 2019 USD ($)	Jun. 30, 2018 USD ($)
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity		$ 400,000,000
Asset-based credit facilities		30,235,000	$ 144,580,000	$ 110,711,000
The Bank of Tokyo-Mitsubishi UFJ \| Japan Credit Facility 1
Line of Credit Facility [Line Items]
Debt instrument, term	3 years
Line of credit facility, maximum borrowing capacity	¥ 4,000,000,000	$ 37,932,000
Asset-based credit facilities \| ¥	¥ 150,000,000
Line of credit facility, interest rate at period end	0.87%	0.87%
Debt instrument, interest rate terms	subject to an effective interest rate equal to the Tokyo interbank offered rate plus 0.80%
The Bank of Tokyo-Mitsubishi UFG Ltd \| Japan Credit Facility 2
Line of Credit Facility [Line Items]
Debt instrument, term	1 year
Line of credit facility, maximum borrowing capacity	¥ 2,000,000,000	$ 18,966,000
Carrying Value \| The Bank of Tokyo-Mitsubishi UFJ \| Japan ABL Facility
Line of Credit Facility [Line Items]
Asset-based credit facilities		$ 1,422,000
Tokyo Interbank Offered Rate (TIBOR) \| The Bank of Tokyo-Mitsubishi UFJ \| Japan Credit Facility 1
Line of Credit Facility [Line Items]
Debt instrument, basis spread on variable rate	0.80%
Tokyo Interbank Offered Rate (TIBOR) \| The Bank of Tokyo-Mitsubishi UFJ \| Japan Credit Facility 2
Line of Credit Facility [Line Items]
Debt instrument, interest rate terms	subject to an effective interest rate equal to the Tokyo Interbank Offered Rate (TIBOR) plus 1.0%
Debt instrument, basis spread on variable rate	1.00%

Financing Arrangements - Equipment Notes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Debt Instrument [Line Items]
Current portion of long-term debt	$ 14,623		$ 14,623		$ 7,317
Long-term debt, excluding current maturities	651,011		651,011		443,259
Secured Debt \| 2020 Equipment Note
Debt Instrument [Line Items]
Long-term debt	33,881		33,881		19,715
Current portion of long-term debt	8,727		8,727		5,107
Long-term debt, excluding current maturities	25,154		25,154		$ 14,608
Interest expense, debt	$ 247	$ 115	$ 624	$ 288
Secured Debt \| 2020 Equipment Note \| Minimum
Debt Instrument [Line Items]
Line of credit facility, interest rate at period end	2.36%		2.36%
Secured Debt \| 2020 Equipment Note \| Maximum
Debt Instrument [Line Items]
Line of credit facility, interest rate at period end	3.79%		3.79%

Financing Arrangements - Term Loan B Facility (Details)		1 Months Ended	3 Months Ended		9 Months Ended
Financing Arrangements - Term Loan B Facility (Details)	Oct. 27, 2020 USD ($)	Jan. 31, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Debt Instrument [Line Items]
Current portion of long-term debt			$ 14,623,000		$ 14,623,000		$ 7,317,000
Debt issuance costs, net			8,527,000		8,527,000
Secured Debt \| Term Loan B Facility
Debt Instrument [Line Items]
Debt issuance costs, gross		$ 9,600,000
Long-term debt, maximum additional loan commitments, amount		$ 225,000,000
Line of credit facility, covenant terms, first lien net leverage ratio for unlimited commitment		2.25
Long-term debt			442,800,000		442,800,000		$ 446,400,000
Current portion of long-term debt			4,800,000		4,800,000
Debt issuance costs, net			14,160,000		14,160,000
Interest expense, debt			5,986,000	$ 7,902,000	19,681,000	$ 24,449,000
Debt instrument, periodic payment, principal					$ 1,200,000
Secured Debt \| Term Loan B Facility \| London Interbank Offered Rate (LIBOR) \| Maximum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate					4.50%
Secured Debt \| Term Loan B Facility \| London Interbank Offered Rate (LIBOR) \| Minimum
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate					3.50%
Secured Debt \| Term Loan Facility, Short-Term Portion
Debt Instrument [Line Items]
Debt issuance costs, net			2,697,000		$ 2,697,000
Secured Debt \| Term Loan Facility, Long-Term Portion
Debt Instrument [Line Items]
Debt issuance costs, net			$ 11,463,000		$ 11,463,000
Subsequent Event
Debt Instrument [Line Items]
Date of merger agreement	Oct. 27, 2020
Topgolf International, Inc \| Subsequent Event
Debt Instrument [Line Items]
Long-term debt	$ 442,800,000
Date of merger agreement	Oct. 27, 2020
Former Topgolf Stakeholders \| Secured Debt \| Term Loan B Facility
Debt Instrument [Line Items]
Debt instrument, face amount		$ 480,000,000

Financing Arrangements - Japan Term Loan Facility (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2020 JPY (¥)	Sep. 30, 2020 USD ($)	Sep. 30, 2020 JPY (¥)	Sep. 30, 2020 USD ($)	Sep. 30, 2020 USD ($)	Aug. 31, 2020 JPY (¥)	Aug. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Debt Instrument [Line Items]
Current portion of long-term debt					$ 14,623,000			$ 7,317,000
Secured Debt \| Japan Term Loan Facility
Debt Instrument [Line Items]
Debt instrument, face amount	¥ 2,000,000,000		¥ 2,000,000,000		18,966,000	¥ 2,000,000,000	$ 18,966,000
Current portion of long-term debt	400,000,000		400,000,000		$ 3,793,000
Interest expense, debt	¥ 2,031,000	$ 19,000
Debt instrument, periodic payment, principal			¥ 100,000,000	$ 948,000
Secured Debt \| Japan Term Loan Facility \| Tokyo Interbank Offered Rate (TIBOR)
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			0.80%	0.80%

Financing Arrangements - Convertible Senior Notes (Details)	1 Months Ended	9 Months Ended
	May 31, 2020 USD ($)	Sep. 30, 2020 USD ($) $ / shares	May 04, 2020 USD ($) $ / shares
Debt Instrument [Line Items]
Debt instrument, convertible, conversion ratio		0.0567698
Debt issuance costs, net		$ 8,527,000
Debt instrument, convertible, if-converted value in excess of principal		0
Debt instrument, payment for capped call transactions	$ 31,775,000
Debt instrument, capped call transaction cap price (in dollars per share) \| $ / shares			$ 27.10
Convertible Senior Notes, Liability Component
Debt Instrument [Line Items]
Debt issuance costs, net		6,005,000
Convertible Senior Notes, Equity Component
Debt Instrument [Line Items]
Debt issuance costs, net		$ 2,522,000
Convertible Senior Notes
Debt Instrument [Line Items]
Debt instrument, convertible, conversion ratio		56.7698
Debt instrument, face amount			$ 258,750,000
Debt instrument, interest rate, stated percentage			2.75%
Long-term debt		$ 180,458,000
Unamortized debt issuance expense		5,698,000
Debt instrument, unamortized discount		$ 72,594,000
Debt instrument, convertible, remaining discount amortization period		5 years 7 months 6 days
Debt instrument, convertible, beneficial conversion feature		$ 76,508,000
Debt instrument, convertible, conversion price (in dollars per share) \| $ / shares		$ 17.62

Financing Arrangements - Aggregate Amount of Maturities for Debt (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Debt Disclosure [Abstract]
Remainder of 2020	$ 4,312
2021	17,147
2022	17,437
2023	14,721
2024	13,432
Thereafter	691,031
Long-term Debt, Gross	$ 758,080

Earnings per Common Share - 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, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Earnings (loss) per common share—basic
Net income attributable to Callaway Golf Company	$ 52,432	$ 31,048	$ (86,358)	$ 108,626
Weighted-average common shares outstanding—basic (in shares)	94,171	94,100	94,207	94,284
Basic earnings (loss) per common share (usd per share)	$ 0.56	$ 0.33	$ (0.92)	$ 1.15
Earnings (loss) per common share—diluted
Weighted-average common shares outstanding—basic (in shares)	94,171	94,100	94,207	94,284
Convertible notes weighted-average shares outstanding	924	0	0	0
Options and restricted stock (in shares)	1,517	2,187	0	1,913
Weighted-average common shares outstanding—diluted (in shares)	96,612	96,287	94,207	96,197
Dilutive earnings (loss) per common share (usd per share)	$ 0.54	$ 0.32	$ (0.92)	$ 1.13

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

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+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

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+ Details

- 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) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	May 04, 2020
Debt Instrument [Line Items]
Antidilutive securities excluded from computation of earnings per share (in shares)	0	0	1,848,000	0
Convertible Senior Notes
Debt Instrument [Line Items]
Debt instrument, face amount					$ 258,750,000
Debt instrument, interest rate, stated percentage					2.75%
Debt instrument, convertible, conversion price (in dollars per share)	$ 17.62		$ 17.62

Inventories (Detail) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Inventories:
Raw materials	$ 59,031	$ 76,140
Work-in-process	843	860
Finished goods	264,978	379,639
Inventories	$ 324,852	$ 456,639

Goodwill and Intangible Assets - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Goodwill [Line Items]
Goodwill	$ 56,041,000		$ 56,041,000		$ 203,743,000
Goodwill, period increase (decrease)			(147,702,000)
Goodwill, impairment loss	0		148,375,000
Intangible assets, net	474,973,000		474,973,000		493,423,000
Amortization of intangible assets	1,321,000	$ 1,113,000	3,714,000	$ 3,579,000
Trade name, trademark and trade dress and other
Goodwill [Line Items]
Impairment of intangible assets (excluding goodwill)	0		25,894,000
Intangible assets, net	$ 437,546,000		$ 437,546,000		$ 453,837,000

Goodwill and Intangible Assets - Intangible Assets by Major Asset Class (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2020	Dec. 31, 2019
Intangible Assets By Major Class [Line Items]
Gross	$ 524,921,000	$ 539,322,000
Accumulated Amortization	49,948,000	45,899,000
Net Book Value	474,973,000	493,423,000
Finite-lived intangible assets, translation and purchase accounting adjustments	9,603,000
Indefinite-lived intangible assets, translation and purchase accounting adjustments	1,554,000
Patents
Intangible Assets By Major Class [Line Items]
Gross	31,581,000	31,581,000
Accumulated Amortization	31,581,000	31,581,000
Net Book Value	$ 0	0
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
Customer and distributor relationships and other
Intangible Assets By Major Class [Line Items]
Gross	$ 55,794,000	53,904,000
Accumulated Amortization	18,367,000	14,318,000
Net Book Value	$ 37,427,000	39,586,000
Customer and distributor relationships and other \| Minimum
Intangible Assets By Major Class [Line Items]
Useful Life (years)	1 year
Customer and distributor relationships and other \| Maximum
Intangible Assets By Major Class [Line Items]
Useful Life (years)	10 years
Trade name, trademark and trade dress and other
Intangible Assets By Major Class [Line Items]
Gross	$ 437,546,000	453,837,000
Net Book Value	$ 437,546,000	$ 453,837,000

Goodwill and Intangible Assets - Amortization Expense Related to Intangible Assets (Detail) $ in Thousands	Sep. 30, 2020 USD ($)
Amortization expense related to intangible assets:
Remainder of 2019	$ 3,586
2020	4,724
2021	4,548
2022	4,409
2023	4,409
Thereafter	15,751
Total	$ 37,427

Joint Venture (Details) $ in Thousands, ¥ in Billions	3 Months Ended		9 Months Ended		12 Months Ended
Joint Venture (Details) $ in Thousands, ¥ in Billions	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Dec. 31, 2019 JPY (¥)	Dec. 31, 2019 USD ($)	Jul. 01, 2016 USD ($)
Noncontrolling Interest [Line Items]
Net income (loss) attributable to non-controlling interests	$ 0	$ 0	$ 0	$ (179)
Total Callaway Golf Company Shareholders' Equity
Noncontrolling Interest [Line Items]
Noncontrolling interest in joint ventures							$ 10,556
TSI Groove & Sports Co, Ltd
Noncontrolling Interest [Line Items]
Noncontrolling interest in joint ventures							$ 9,744
Accounts payable and accrued expenses \| Callaway Apparel K.K.
Noncontrolling Interest [Line Items]
Payments to acquire interest in joint venture					¥ 2	$ 18,538
Callaway Apparel K.K. \| Callaway Apparel K.K.
Noncontrolling Interest [Line Items]
Noncontrolling interest, ownership by parent							52.00%
Noncontrolling interest, ownership percentage by noncontrolling owners							48.00%

Investments (Detail) - USD ($)		1 Months Ended	9 Months Ended
Investments (Detail) - USD ($)	Oct. 27, 2020	Sep. 30, 2020	Sep. 30, 2020	Sep. 30, 2019	May 31, 2020	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Percentage of ownership interest in Topgolf		14.30%	14.30%
Investments in golf related ventures		$ 14,638,000	$ 19,999,000	$ 0
Investment in Topgolf		111,442,000	111,442,000			$ 90,134,000
Notes Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Note receivable, noncurrent		$ 6,670,000	$ 6,670,000		$ 6,542,000
Subsequent Event
Accounts, Notes, Loans and Financing Receivable [Line Items]
Date of merger agreement	Oct. 27, 2020
Minimum \| Notes Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable, interest rate					5.75%
Maximum \| Notes Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable, interest rate					5.87%

Product Warranty - Reconciliation of Reserve for Warranty Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Guarantees [Abstract]
Warranty policy term			2 years
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward]
Beginning balance	$ 9,779	$ 10,976	$ 9,636	$ 7,610
Provision	2,137	1,494	5,507	6,492
Provision liability assumed from acquisition	0	0	0	2,208
Claims paid/costs incurred	(2,276)	(2,349)	(5,503)	(6,189)
Ending balance	$ 9,640	$ 10,121	$ 9,640	$ 10,121

Income Taxes - Additional Information (Detail) € in Thousands	1 Months Ended		3 Months Ended		9 Months Ended
	Jan. 31, 2019 EUR (€)	Jan. 31, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)	Jan. 04, 2019 EUR (€)	Jan. 04, 2019 USD ($)
Business Acquisition [Line Items]
Goodwill and trade name impairment			$ 0	$ 0	$ 174,269,000	$ 0
Income tax provision			$ 5,360,000	$ 2,128,000	6,580,000	18,892,000
Effective tax rate			9.30%	6.40%
Liability for income taxes associated with uncertain tax positions			$ 27,823,000		27,823,000
Net amount of unrecognized tax benefit related to uncertain tax positions that would impact, if recognized, effective income tax rate			11,640,000		11,640,000
Unrecognized tax benefit liabilities decrease			428,000		428,000
Increase in gross liability for uncertain tax positions			706,000		1,830,000
Provision expense (benefit) for income taxes related to interest and penalties			110,000	$ 47,000	163,000	$ (142,000)
Income tax accrued for payment of interest and penalties			$ 1,833,000		1,833,000		$ 1,669,000
Jack Wolfskin
Business Acquisition [Line Items]
Consideration transferred	€ 457,394	$ 521,201,000
Cash acquired								€ 50,984,000	$ 58,096,000
Deferred tax liabilities									80,009,000
Deferred tax assets, other									11,384,000
Finite-Lived Intangible Assets \| Jack Wolfskin
Business Acquisition [Line Items]
Deferred tax liabilities									$ 88,392,000
Deferred tax liability, period increase (decrease)					$ 7,900,000

Income Taxes - Major Jurisdictions No Longer Subject to Audit (Details)	9 Months Ended
	Sep. 30, 2020
U.S. federal
Income Tax Examination [Line Items]
Years no longer subject to audit	2010 and prior
California (U.S.)
Income Tax Examination [Line Items]
Years no longer subject to audit	2008 and prior
Germany
Income Tax Examination [Line Items]
Years no longer subject to audit	2014 and prior
Japan
Income Tax Examination [Line Items]
Years no longer subject to audit	2013 and prior
South Korea
Income Tax Examination [Line Items]
Years no longer subject to audit	2014 and prior
United Kingdom
Income Tax Examination [Line Items]
Years no longer subject to audit	2015 and prior

Commitments and Contingencies - Additional Information (Detail) $ in Thousands	9 Months Ended
	Sep. 30, 2020 USD ($)
Long Term Purchase Commitment [Line Items]
Unconditional purchase obligations, term	4 years
Unconditional purchase obligations	$ 70,699
Minimum
Long Term Purchase Commitment [Line Items]
Unconditional purchase obligations, term	1 year
Maximum
Long Term Purchase Commitment [Line Items]
Unconditional purchase obligations, term	4 years

Commitments and Contingencies - Future Purchase Commitments (Details) $ in Thousands	Sep. 30, 2020 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Remainder of 2020	$ 36,774
2021	25,229
2022	7,085
2023	1,505
2024	106
Unconditional purchase obligations	$ 70,699

Share-Based Employee Compensation - Additional Information (Details) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2020 USD ($) shares	Sep. 30, 2019 USD ($) shares	Sep. 30, 2020 USD ($) plan $ / shares shares	Sep. 30, 2019 USD ($) $ / shares shares	Dec. 31, 2019	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shareholder approved stock plans \| plan			2
Cost (reversal) of employee share-based compensation included in income, before income tax	$ 3,272	$ 2,513	$ 8,066	$ 9,478
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of stock units granted (in shares) \| shares	0	0	406,000	452,000
Stock units, weighted average grant-date fair value (usd per share) \| $ / shares			$ 17.82	$ 15.35
Compensation expense related to restricted stocks	$ 1,907	$ 1,176	$ 4,884	$ 4,495
Total unrecognized compensation expense related to non-vested shares granted	$ 8,993		$ 8,993
Number of years compensation expense to be recognized over			1 year 9 months 18 days
Restricted Stock Units (RSUs) \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			1 year
Restricted Stock Units (RSUs) \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period			3 years
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of stock units granted (in shares) \| shares	0	0	125,000	226,000
Stock units, weighted average grant-date fair value (usd per share) \| $ / shares			$ 19.66	$ 15.17
Total unrecognized compensation expense related to non-vested shares granted	$ 5,519		$ 5,519
Number of years compensation expense to be recognized over				1 year 4 months 24 days
Target award shares, percent						80.00%
Cost (reversal) of employee share-based compensation included in income, before income tax	$ 1,365	$ 1,337	$ 3,182	$ 4,983
Performance Shares \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares awarded as a percentage of granted			0.00%
Target award shares, percent			50.00%		50.00%
Award vesting period			3 years
Award requisite service period			1 year
Performance Shares \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares awarded as a percentage of granted			200.00%
Target award shares, percent			80.00%
Award vesting period			5 years
Award requisite service period			5 years
Performance Share Units with Total Shareholder Return Conditions
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of stock units granted (in shares) \| shares	0	0	125,000	149,000
Stock units, weighted average grant-date fair value (usd per share) \| $ / shares			$ 23.22	$ 16.96
Award vesting period			3 years

Share-Based Employee Compensation - Amounts Recognized for Share-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Cost of employee share-based compensation included in income, before income tax	$ 3,272	$ 2,513	$ 8,066	$ 9,478
Cost of sales
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Cost of employee share-based compensation included in income, before income tax	158	213	553	715
Operating expenses
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Cost of employee share-based compensation included in income, before income tax	$ 3,114	$ 2,300	$ 7,513	$ 8,763

Fair Value of Financial Instruments - Foreign Currency Exchange Contracts Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Recurring - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign currency forward contracts, net	$ (19,244)	$ (3,461)
Foreign Exchange Contract
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign currency forward contracts—asset position	2,701	61
Foreign currency forward contracts—liability position	(2,440)	(766)
Currency Swap
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign currency forward contracts—asset position		6,163
Foreign currency forward contracts—liability position		(25)
Interest Rate Swap
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign currency forward contracts—liability position	(19,505)	(8,894)
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign currency forward contracts, net	(19,244)	(3,461)
Level 2 \| Foreign Exchange Contract
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign currency forward contracts—asset position	2,701	61
Foreign currency forward contracts—liability position	(2,440)	(766)
Level 2 \| Currency Swap
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign currency forward contracts—asset position		6,163
Foreign currency forward contracts—liability position		(25)
Level 2 \| Interest Rate Swap
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Foreign currency forward contracts—liability position	$ (19,505)	$ (8,894)

Fair Value of Financial Instruments - Fair Value Relating to Financial Assets and Liabilities (Details)	Sep. 30, 2020 JPY (¥)	Sep. 30, 2020 USD ($)	Aug. 31, 2020 JPY (¥)	Aug. 31, 2020 USD ($)	May 04, 2020 USD ($)	Dec. 31, 2019 USD ($)
Secured Debt \| Term Loan B Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt		$ 442,800,000				$ 446,400,000
Secured Debt \| Japan Term Loan Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt instrument, face amount	¥ 2,000,000,000	18,966,000	¥ 2,000,000,000	$ 18,966,000
Convertible Senior Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt		180,458,000
Debt instrument, face amount					$ 258,750,000
Debt instrument, interest rate, stated percentage					2.75%
Carrying Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Convertible debt		258,750,000				0
Carrying Value \| Secured Debt \| Term Loan B Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt		442,800,000				446,400,000
Carrying Value \| Secured Debt \| Japan Term Loan Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt		18,966,000				0
Carrying Value \| Secured Debt \| Equipment Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt		33,881,000				19,715,000
Carrying Value \| ABL Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Credit facilities		28,813,000				114,480,000
Carrying Value \| Japan ABL Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Credit facilities		1,422,000				30,100,000
Fair Value
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Convertible debt		349,561,000,000				0
Fair Value \| Secured Debt \| Term Loan B Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt		443,221,000				450,864,000
Fair Value \| Secured Debt \| Japan Term Loan Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt		18,966,000				0
Fair Value \| Secured Debt \| Equipment Notes
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt		33,881,000				19,715,000
Fair Value \| ABL Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Credit facilities		28,813,000				114,480,000
Fair Value \| Japan ABL Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Credit facilities		$ 1,422,000				$ 30,100,000

Fair Value of Financial Instruments - Additional Information (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Goodwill, impairment loss	$ 0	$ 148,375,000
Trade name, trademark and trade dress and other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment of intangible assets (excluding goodwill)	$ 0	$ 25,894,000

Derivatives and Hedging - Summary of Fair Value of Derivative Instruments by Contract Type and Location of Asset and/or Liability on Consolidated Condensed Balance Sheets (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Derivatives, Fair Value [Line Items]
Derivative asset, fair value, gross asset including not subkect to matter netting arrangement	$ 2,701		$ 2,701		$ 61
Derivative liability, fair value, gross liability including not subject to master netting arrangement	21,945		21,945		9,685
Currency Swap
Derivatives, Fair Value [Line Items]
Gains (losses) reclassified from AOCI into earnings	0	$ 9,868	18,510	$ 12,119
Not Designated as Hedging Instrument \| Other Current Assets
Derivatives, Fair Value [Line Items]
Derivative asset, fair value, gross asset including not subkect to matter netting arrangement	2,543		2,543		8
Not Designated as Hedging Instrument \| Foreign Exchange Forward \| Accounts payable and accrued expenses
Derivatives, Fair Value [Line Items]
Derivative liability, fair value, gross liability including not subject to master netting arrangement	2,215		2,215		741
Cash Flow Hedging \| Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Gains (losses) reclassified from AOCI into earnings	(577)	10,274	17,359	12,855
Derivative liability, fair value, gross liability including not subject to master netting arrangement	19,730		19,730		8,944
Cash Flow Hedging \| Designated as Hedging Instrument \| Foreign Exchange Forward
Derivatives, Fair Value [Line Items]
Gains (losses) reclassified from AOCI into earnings	621	556	1,493	930
Cash Flow Hedging \| Designated as Hedging Instrument \| Foreign Exchange Forward \| Other Current Assets
Derivatives, Fair Value [Line Items]
Derivative asset, fair value, gross asset including not subkect to matter netting arrangement	158		158		53
Cash Flow Hedging \| Designated as Hedging Instrument \| Foreign Exchange Forward \| Accounts payable and accrued expenses
Derivatives, Fair Value [Line Items]
Derivative liability, fair value, gross liability including not subject to master netting arrangement	225		225		24
Cash Flow Hedging \| Designated as Hedging Instrument \| Currency Swap
Derivatives, Fair Value [Line Items]
Gains (losses) reclassified from AOCI into earnings	0	9,868	18,510	12,119
Cash Flow Hedging \| Designated as Hedging Instrument \| Currency Swap \| Accounts payable and accrued expenses
Derivatives, Fair Value [Line Items]
Derivative liability, fair value, gross liability including not subject to master netting arrangement	0		0		25
Cash Flow Hedging \| Designated as Hedging Instrument \| Interest Rate Swap
Derivatives, Fair Value [Line Items]
Gains (losses) reclassified from AOCI into earnings	(1,198)	$ (150)	(2,644)	$ (194)
Cash Flow Hedging \| Designated as Hedging Instrument \| Interest Rate Swap \| Accounts payable and accrued expenses
Derivatives, Fair Value [Line Items]
Derivative liability, fair value, gross liability including not subject to master netting arrangement	4,757		4,757		1,865
Cash Flow Hedging \| Designated as Hedging Instrument \| Interest Rate Swap \| Other Noncurrent Liabilities
Derivatives, Fair Value [Line Items]
Derivative liability, fair value, gross liability including not subject to master netting arrangement	$ 14,748		$ 14,748		$ 7,030

Derivatives and Hedging - Additional Information (Detail) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Derivative [Line Items]
Minimum length of time, foreign currency cash flow hedge				12 months
Maximum maturity for foreign currency cash flow hedge				15 months
Forward points amortized on derivatives	$ 135,000			$ 599,000
Maximum maturity for foreign currency derivatives				12 months
Foreign currency gains (losses)	10,098,000		$ (10,051,000)	$ 7,857,000	$ (12,660,000)
Other (expense) income, net
Derivative [Line Items]
Gains (losses) reclassified from AOCI into earnings				5,735,000
Foreign Exchange Forward
Derivative [Line Items]
Forward points amortized on derivatives				0
Foreign Exchange Forward \| Cost of Goods Sold
Derivative [Line Items]
Gains (losses) reclassified from AOCI into earnings	486,000			894,000
Other comprehensive income (loss), cash flow hedge, gain (loss), reclassification, before tax			413,000		222,000
Currency Swap
Derivative [Line Items]
Gains (losses) reclassified from AOCI into earnings	0		9,868,000	18,510,000	12,119,000
Currency Swap \| Other (expense) income, net
Derivative [Line Items]
Gains (losses) reclassified from AOCI into earnings	0	$ 11,046,000	8,289,000	11,046,000	8,254,000
Currency Swap \| Interest Income
Derivative [Line Items]
Gains (losses) reclassified from AOCI into earnings	0		1,579,000	1,730,000	3,865,000
Interest Rate Swap \| Interest Expense
Derivative [Line Items]
Gains (losses) reclassified from AOCI into earnings	(1,198,000)			(2,644,000)
Designated as Hedging Instrument \| Foreign Exchange Contract
Derivative [Line Items]
Derivative instrument, notional amount	14,503,000			14,503,000		$ 0
Designated as Hedging Instrument \| Foreign Exchange Forward
Derivative [Line Items]
Interest rate cash flow hedge gain (loss) to be reclassified during next 12 months, net				588,000
Designated as Hedging Instrument \| Currency and Interest Rate Swap Agreements
Derivative [Line Items]
Derivative instrument, notional amount	196,851,000			196,851,000		198,353,000
Not Designated as Hedging Instrument \| Foreign Exchange Contract
Derivative [Line Items]
Derivative instrument, notional amount	106,474,000			106,474,000		$ 72,119,000
Cash Flow Hedging \| Designated as Hedging Instrument
Derivative [Line Items]
Gains (losses) reclassified from AOCI into earnings	(577,000)		10,274,000	17,359,000	12,855,000
Cash Flow Hedging \| Designated as Hedging Instrument \| Foreign Exchange Forward
Derivative [Line Items]
Other comprehensive income (loss), cash flow hedge, gain (loss), before reclassification, tax				904,000
Gains (losses) reclassified from AOCI into earnings	621,000		556,000	1,493,000	930,000
Cash Flow Hedging \| Designated as Hedging Instrument \| Currency Swap
Derivative [Line Items]
Other comprehensive income (loss), cash flow hedge, gain (loss), before reclassification, tax				15,081,000
Gains (losses) reclassified from AOCI into earnings	0		9,868,000	18,510,000	12,119,000
Cash Flow Hedging \| Designated as Hedging Instrument \| Interest Rate Swap
Derivative [Line Items]
Other comprehensive income (loss), cash flow hedge, gain (loss), before reclassification, tax	100,000			(13,261,000)
Gains (losses) reclassified from AOCI into earnings	(1,198,000)		$ (150,000)	(2,644,000)	$ (194,000)
Interest rate cash flow hedge gain (loss) to be reclassified during next 12 months, net	$ 4,766,000			$ 4,766,000

Derivatives and Hedging - Location of Gains in Consolidated Condensed Statements of Operations that were Recognized and Derivative Contract Type (Details) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Derivative Instruments, Gain (Loss) [Line Items]
Change in derivative instruments	$ (1,170,000)			$ 2,724,000
Other (expense) income, net
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) reclassified from AOCI into earnings				5,735,000
Gain (loss) on foreign currency derivative instruments not designated as hedging instruments	(4,639,000)		$ 4,035,000	622,000	$ 5,476,000
Currency Swap
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) reclassified from AOCI into earnings	0		9,868,000	18,510,000	12,119,000
Currency Swap \| Other (expense) income, net
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) reclassified from AOCI into earnings	0	$ 11,046,000	8,289,000	11,046,000	8,254,000
Designated as Hedging Instrument \| Cash Flow Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Change in derivative instruments	(1,170,000)		10,935,000	2,724,000	4,775,000
Gains (losses) reclassified from AOCI into earnings	(577,000)		10,274,000	17,359,000	12,855,000
Designated as Hedging Instrument \| Cash Flow Hedging \| Foreign Exchange Forward
Derivative Instruments, Gain (Loss) [Line Items]
Change in derivative instruments	(1,070,000)		464,000	904,000	1,037,000
Gains (losses) reclassified from AOCI into earnings	621,000		556,000	1,493,000	930,000
Designated as Hedging Instrument \| Cash Flow Hedging \| Currency Swap
Derivative Instruments, Gain (Loss) [Line Items]
Change in derivative instruments	0		13,133,000	15,081,000	14,297,000
Gains (losses) reclassified from AOCI into earnings	0		9,868,000	18,510,000	12,119,000
Designated as Hedging Instrument \| Cash Flow Hedging \| Interest Rate Swap
Derivative Instruments, Gain (Loss) [Line Items]
Change in derivative instruments	(100,000)		(2,662,000)	(13,261,000)	(10,559,000)
Gains (losses) reclassified from AOCI into earnings	$ (1,198,000)		$ (150,000)	$ (2,644,000)	$ (194,000)

Accumulated Other Comprehensive Income (Loss) - Additional (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Jun. 30, 2020	Dec. 31, 2019
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Other comprehensive income (loss), cash flow hedge, gain (loss), after reclassification and tax	$ (593)	$ 661	$ (14,635)	$ (8,080)
Change in derivative instruments	(1,170)		2,724
Income tax (provision) benefit on derivative instruments	(66)	(666)	3,387	822
Foreign currency translation adjustments	9,128	(17,083)	2,347	(18,740)
Accumulated other comprehensive loss, ending balance	(31,323)		(31,323)		$ (39,792)	$ (22,422)
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Foreign currency translation adjustments	0		0
Accumulated other comprehensive loss, ending balance	(15,451)		(15,451)		(14,792)	(4,203)
Accumulated Foreign Currency Adjustment Attributable to Parent
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Change in derivative instruments	0		0
Income tax (provision) benefit on derivative instruments	0		0
Accumulated other comprehensive loss, ending balance	(15,872)		(15,872)		$ (25,000)	$ (18,219)
Accumulated Other Comprehensive Loss
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Foreign currency translation adjustments	9,128	$ (17,083)	2,347	$ (18,401)
Cost of Goods Sold \| Foreign Exchange Forward
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Other comprehensive income (loss), cash flow hedge, gain (loss), after reclassification and tax	(621)		(1,493)
Cost of Goods Sold \| Foreign Exchange Forward \| Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Other comprehensive income (loss), cash flow hedge, gain (loss), after reclassification and tax	(621)		(1,493)
Cost of Goods Sold \| Foreign Exchange Forward \| Accumulated Foreign Currency Adjustment Attributable to Parent
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Other comprehensive income (loss), cash flow hedge, gain (loss), after reclassification and tax	0		0
Other (expense) income, net \| Foreign Exchange Forward
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Other comprehensive income (loss), cash flow hedge, gain (loss), after reclassification and tax			(16,781)
Other (expense) income, net \| Foreign Exchange Forward \| Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Other comprehensive income (loss), cash flow hedge, gain (loss), after reclassification and tax			(16,781)
Other (expense) income, net \| Foreign Exchange Forward \| Accumulated Foreign Currency Adjustment Attributable to Parent
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Other comprehensive income (loss), cash flow hedge, gain (loss), after reclassification and tax			0
Interest Expense \| Foreign Exchange Forward
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Other comprehensive income (loss), cash flow hedge, gain (loss), after reclassification and tax	1,198		915
Interest Expense \| Foreign Exchange Forward \| Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Other comprehensive income (loss), cash flow hedge, gain (loss), after reclassification and tax	1,198		915
Interest Expense \| Foreign Exchange Forward \| Accumulated Foreign Currency Adjustment Attributable to Parent
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Other comprehensive income (loss), cash flow hedge, gain (loss), after reclassification and tax	$ 0		$ 0

Segment Information - Information Utilized by Management to Evaluate its Operating Segments (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) segment	Sep. 30, 2019 USD ($)
Segment Reporting Information [Line Items]
Number of operating segments \| segment			2
Net sales	$ 475,559	$ 426,217	$ 1,214,831	$ 1,389,122
Income before income taxes	57,792	33,176	(79,778)	127,339
Additions to long-lived assets	5,124	14,431	38,130	36,454
Inventory Write-down			0	10,703
Corporate, non-segment
Segment Reporting Information [Line Items]
Income before income taxes	(24,901)	(24,825)	(234,762)	(90,352)
Impairment of Jack Wolfskin trade name and goodwill			174,269
Period Increase (Decrease), Interest Expense			4,198
Period Increase (Decrease), Other Income			26,028
Inventory Write-down				10,703
Golf Equipment
Segment Reporting Information [Line Items]
Net sales	267,277	210,502	768,881	826,474
Golf Equipment \| Operating segments
Segment Reporting Information [Line Items]
Net sales	267,277	210,502	768,881	826,474
Income before income taxes	56,784	23,124	144,585	148,782
Additions to long-lived assets	1,616	7,648	21,356	20,989
Apparel, Gear & Other
Segment Reporting Information [Line Items]
Net sales	208,282	215,715	445,950	562,648
Apparel, Gear & Other \| Operating segments
Segment Reporting Information [Line Items]
Net sales	208,282	215,715	445,950	562,648
Income before income taxes	25,909	34,877	10,399	68,909
Additions to long-lived assets	$ 3,508	$ 6,783	$ 16,774	$ 15,465