Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2016 | Mar. 24, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Acushnet Holdings Corp. | |
Entity Central Index Key | 1,672,013 | |
Document Type | 10-K | |
Document Period End Date | Dec. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Public Float | $ 623.5 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | FY | |
Common stock outstanding | 74,451,977 |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Cash ($12,796 and $10,029 attributable to the variable interest entity ("VIE")) | $ 76,058 | $ 54,409 |
Restricted cash | 3,082 | 4,725 |
Accounts receivable, net | 177,506 | 192,384 |
Inventories ($14,633 and $15,755 attributable to the VIE) | 323,289 | 326,359 |
Other assets | 84,596 | 93,646 |
Total current assets | 664,531 | 671,523 |
Property, plant and equipment, net ($10,749 and $11,147 attributable to the VIE) | 239,748 | 254,894 |
Goodwill ($32,312 and $32,312 attributable to the VIE) | 179,241 | 181,179 |
Identifiable intangible assets, net | 489,988 | 499,494 |
Deferred income taxes | 130,416 | 132,265 |
Other assets ($2,704 and $2,738 attributable to the VIE) | 32,247 | 19,618 |
Total assets | 1,736,171 | 1,758,973 |
Liabilities and equity | ||
Short-term Debt | 42,495 | 39,064 |
Current portion of long-term debt | 18,750 | 402,640 |
Accounts payable ($10,397 and $10,250 attributable to the VIE) | 87,608 | 89,869 |
Payables to related parties | 12,570 | |
Accrued taxes | 41,962 | 29,432 |
Accrued compensation and benefits ($780 and $1,035 attributable to the VIE) | 224,230 | 111,390 |
Accrued expenses and other liabilities ($4,121 and $4,516 attributable to the VIE) | 47,063 | 70,626 |
Total current liabilities | 462,108 | 755,591 |
Long-term debt and capital lease obligations | 348,348 | 394,511 |
Deferred income taxes | 7,452 | 7,112 |
Accrued pension and other postretirement benefits ($1,946 and $2,303 attributable to the VIE) | 135,339 | 119,549 |
Accrued equity appreciation rights | 145,384 | |
Other noncurrent liabilities ($3,368 and $2,841 attributable to the VIE) | 14,101 | 12,284 |
Total liabilities | 967,348 | 1,434,431 |
Series A redeemable convertible preferred stock, $.001 par value, 1,838,027 shares authorized at September 30, 2016 and December 31, 2015; 1,838,027 shares issued and outstanding at September 30, 2016 and December 31, 2015 actual; liquidation preference of $187,277,326 at September 30, 2016; no shares issued or outstanding, pro forma as of September 30, 2016 | 131,036 | |
Equity | ||
Common stock, $.001 par value,500,000,000 shares authorized at December 31, 2016 and 78,193,494 shares authorized at December 31, 2015; 74,093,598 shares issued and outstanding at December 31, 2016 and 21,821,256 shares issued and outstanding at December 31, 2015 | 74 | 22 |
Additional paid-in capital | 880,576 | 309,110 |
Accumulated other comprehensive loss, net of tax | (90,834) | (67,234) |
Retained deficit | (53,951) | (81,647) |
Total equity attributable to Acushnet Holdings Corp. | 735,865 | 160,251 |
Noncontrolling interests | 32,958 | 33,255 |
Total equity | 768,823 | 193,506 |
Total liabilities and equity | $ 1,736,171 | $ 1,758,973 |
CONSOLIDATED BALANCE SHEETS (U3
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Cash and cash equivalents | $ 76,058 | $ 54,409 |
Inventories | 323,289 | 326,359 |
Property, plant and equipment, net | 239,748 | 254,894 |
Goodwill | 179,241 | 181,179 |
Accounts payable | 87,608 | 89,869 |
Accrued compensation and benefits | 224,230 | 111,390 |
Accrued expenses and other liabilities | 47,063 | 70,626 |
Accrued pension and other postretirement benefits ($1,946 and $2,303 attributable to the VIE) | 135,339 | 119,549 |
Other noncurrent liabilities | $ 14,101 | $ 12,284 |
Series A Redeemable convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Series A Redeemable common stock, shares authorized | 0 | 1,838,027 |
Series A Redeemable convertible preferred stock, shares issued | 1,838,027 | |
Series A Redeemable convertible preferred stock, shares outstanding | 0 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 500,000,000 | 78,193,494 |
Common stock, shares issued | 74,093,598 | 21,821,256 |
Common stock, shares outstanding | 74,093,598 | 21,821,256 |
VIE | ||
Cash and cash equivalents | $ 12,958 | $ 10,029 |
Inventories | 14,633 | 15,755 |
Property, plant and equipment, net | 10,709 | 11,147 |
Goodwill | 32,312 | 32,312 |
Other assets | 2,642 | 2,738 |
Accounts payable | 10,397 | 10,250 |
Accrued compensation and benefits | 780 | 1,035 |
Accrued expenses and other liabilities | 4,121 | 4,516 |
Accrued pension and other postretirement benefits ($1,946 and $2,303 attributable to the VIE) | 1,946 | 2,303 |
Other noncurrent liabilities | $ 3,368 | $ 2,841 |
Series A Redeemable convertible preferred stock, shares issued | 1,838,027 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS | |||
Net sales | $ 1,572,275 | $ 1,502,958 | $ 1,537,610 |
Cost of goods sold | 773,550 | 727,120 | 779,678 |
Gross profit | 798,725 | 775,838 | 757,932 |
Operating expenses | |||
Selling, general and administrative | 600,804 | 604,018 | 602,755 |
Research and development | 48,804 | 45,977 | 44,243 |
Intangible amortization | 6,608 | 6,617 | 6,687 |
Restructuring charges | 1,673 | 1,643 | |
Income from operations | 140,836 | 117,583 | 104,247 |
Interest expense, net | 49,908 | 60,294 | 63,529 |
Other (income) expense, net | 1,706 | 25,139 | (1,348) |
Income before income taxes | 89,222 | 32,150 | 42,066 |
Income tax expense | 39,707 | 27,994 | 16,700 |
Net income | 49,515 | 4,156 | 25,366 |
Less: Net income attributable to noncontrolling interests | (4,503) | (5,122) | (3,809) |
Net income (loss) attributable to Acushnet Holdings Corp. | 45,012 | (966) | 21,557 |
Dividends earned by preferred shareholders | (11,576) | (13,785) | (13,785) |
Allocation of undistributed earnings to preferred shareholders | (10,247) | (3,866) | |
Net income (loss) attributable to common shareholders - basic | 23,189 | (14,751) | 3,906 |
Adjustments to net income for dilutive securities | 16,475 | ||
Net income (loss) attributable to common shareholders - diluted | $ 39,664 | $ (14,751) | $ 3,906 |
Net income (loss) per common share attributable to Acushnet Holdings Corp.: | |||
Basic | $ 0.74 | $ (0.74) | $ 0.23 |
Diluted | $ 0.62 | $ (0.74) | $ 0.23 |
Weighted average number of common shares: | |||
Basic | 31,247,643 | 19,939,293 | 16,716,825 |
Diluted | 64,323,742 | 19,939,293 | 16,716,825 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 49,515 | $ 4,156 | $ 25,366 |
Other comprehensive income (loss) | |||
Foreign currency translation adjustments | (14,656) | (19,042) | (23,106) |
Foreign exchange derivative instruments | |||
Unrealized holding gains arising during period | 7,014 | 14,964 | 20,619 |
Reclassification adjustments included in net income | (5,194) | (26,805) | (9,916) |
Tax benefit (expense) | (451) | 3,836 | (1,610) |
Foreign exchange derivative instruments, net | 1,369 | (8,005) | 9,093 |
Available-for-sale securities | |||
Unrealized holding gains (losses) arising during period | 51 | (673) | 703 |
Tax benefit (expense) | (19) | 160 | (248) |
Available-for-sale securities, net | 32 | (513) | 455 |
Pension and other postretirement benefits adjustments | |||
Net gain (loss) arising during period | (16,072) | 3,068 | (23,769) |
Tax benefit (expense) | 5,727 | (1,684) | 7,583 |
Pension and other postretirement benefits adjustments, net | (10,345) | 1,384 | (16,186) |
Total other comprehensive loss | (23,600) | (26,176) | (29,744) |
Comprehensive income (loss) | 25,915 | (22,020) | (4,378) |
Less: Comprehensive income attributable to noncontrolling interests | (4,563) | (5,017) | (3,774) |
Comprehensive income (loss) attributable to Acushnet Holdings Corp. | $ 21,352 | $ (27,037) | $ (8,152) |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities | |||
Net income | $ 49,515 | $ 4,156 | $ 25,366 |
Adjustments to reconcile net income to cash provided by operating activities | |||
Depreciation and amortization | 40,834 | 41,702 | 43,159 |
Unrealized foreign exchange gain (loss) | (2,347) | 2,933 | 133 |
Amortization of debt issuance costs | 3,378 | 5,157 | 3,752 |
Amortization of discount on bonds payable | 3,963 | 4,142 | 4,093 |
Change in fair value of common stock warrants | 6,112 | 28,364 | (1,887) |
Share-based compensation | 14,494 | 2,033 | 632 |
Loss on disposals of property, plant and equipment | 170 | 401 | 690 |
Deferred income taxes | 7,849 | 2,188 | (11,293) |
Changes in operating assets and liabilities | |||
Accounts receivable | 12,630 | (174) | (35,594) |
Inventories | (2,377) | (45,415) | (16,192) |
Accounts payable | 1,968 | (1,998) | (2,585) |
Accrued taxes | 14,666 | 540 | (881) |
Accrued expenses and other liabilities | 113,042 | 35,364 | 3,442 |
Other assets | (6,041) | 1,165 | (11,376) |
Other noncurrent liabilities | (140,098) | 12,278 | 53,739 |
Interest due to related parties | (12,570) | (1,006) | (1,085) |
Cash flows provided by operating activities | 105,188 | 91,830 | 54,113 |
Cash flows from investing activities | |||
Additions to property, plant and equipment | (19,175) | (23,201) | (23,527) |
Receivables from related parties | (919) | ||
Cash flows used in investing activities | (20,094) | (23,201) | (23,527) |
Cash flows from financing activities | |||
Increase (decrease) in short-term borrowings, net | (3,941) | 7,890 | 8,177 |
Repayment of senior term loan facility | (30,000) | ||
Proceeds from senior term loan facility | 30,000 | ||
Proceeds from term loan facility | 375,000 | ||
Repayment of secured floating rate notes | (375,000) | (50,000) | (50,000) |
Proceeds from exercise of stock options | 100 | ||
Proceeds from exercise of common stock warrants | 34,503 | 34,503 | 34,503 |
Repayment of bonds | (34,503) | (34,503) | (34,503) |
Debt issuance costs | (6,606) | (1,045) | |
Dividends paid on Series A redeemable convertible preferred stock | (17,316) | (13,747) | (13,786) |
Dividends paid to noncontrolling interests | (4,800) | (4,200) | (3,600) |
Cash flows used in financing activities | (62,663) | (60,057) | (30,154) |
Effect of foreign exchange rate changes on cash | (2,425) | (3,205) | (2,522) |
Net increase (decrease) in cash | 20,006 | 5,367 | (2,090) |
Cash, cash equivalents, restricted cash and restricted cash equivalents, beginning of year | 59,134 | 53,767 | 55,857 |
Cash, cash equivalents, restricted cash and restricted cash equivalents, end of year | 79,140 | 59,134 | 53,767 |
Supplemental information | |||
Cash paid for interest to related parties | 36,753 | 32,274 | 34,951 |
Cash paid for interest to third parties | 27,165 | 20,571 | 21,656 |
Cash paid for income taxes | 16,589 | 19,724 | 27,987 |
Non-cash additions to property, plant and equipment | 1,170 | 1,913 | 2,577 |
Non-cash conversion of Series A redeemable convertible preferred stock | 131,036 | ||
Non-cash conversion of convertible notes | 362,489 | ||
Non-cash conversion of common stock warrants | $ 28,996 | 7,298 | |
Non-cash exercise of stock options | $ 2,752 | $ 793 |
CONSOLIDATED STATEMENTS OF REDE
CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND EQUITY (UNAUDITED) - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Deficit | Noncontrolling Interest | Redeemable Convertible Preferred Stock | Total |
Balances at Beginning at Dec. 31, 2013 | $ 131,036 | ||||||
Balances at Beginning (in shares) at Dec. 31, 2013 | 1,838 | ||||||
Balances at Ending at Dec. 31, 2014 | $ 131,036 | ||||||
Balances at Ending (in shares) at Dec. 31, 2014 | 1,838 | ||||||
Balances at Beginning at Dec. 31, 2013 | $ 15 | $ 229,168 | $ (11,314) | $ (74,705) | $ 143,164 | ||
Balances at Beginning (in shares) at Dec. 31, 2013 | 15,360 | ||||||
Balances at Beginning at Dec. 31, 2013 | $ 32,124 | ||||||
Balances at noncontrolling Beginning at Dec. 31, 2013 | 175,288 | ||||||
Changes in stockholders' equity | |||||||
Net income attributable to Acushnet Holdings Corp. | 21,557 | 21,557 | |||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 3,809 | 25,366 | |||||
Other comprehensive loss | (29,744) | (29,744) | |||||
Exercise of common stock (in shares) | 87 | ||||||
Exercise of common stock (in value) | 893 | 893 | |||||
Issuance of common stock | $ 3 | 34,500 | 34,503 | ||||
Issuance of common stock (in shares) | 3,105 | ||||||
Dividends paid on Series A redeemable convertible preferred stock | (13,786) | (13,786) | |||||
Dividends paid to noncontrolling interests | (3,600) | (3,600) | |||||
Balances at Ending at Dec. 31, 2014 | $ 18 | 264,561 | (41,058) | (66,934) | 156,587 | ||
Balances at Ending (in shares) at Dec. 31, 2014 | 18,552 | ||||||
Balances at Ending at Dec. 31, 2014 | 32,333 | ||||||
Balances at noncontrolling Ending at Dec. 31, 2014 | 188,920 | ||||||
Balances at Ending at Dec. 31, 2015 | $ 131,036 | ||||||
Balances at Ending (in shares) at Dec. 31, 2015 | 1,838 | ||||||
Changes in stockholders' equity | |||||||
Net income attributable to Acushnet Holdings Corp. | (966) | (966) | |||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 5,122 | 4,156 | |||||
Other comprehensive loss | (26,176) | (26,176) | |||||
Exercise of common stock (in shares) | 164 | ||||||
Exercise of common stock (in value) | $ 1 | 2,751 | 2,752 | ||||
Issuance of common stock | $ 3 | 41,798 | 41,801 | ||||
Issuance of common stock (in shares) | 3,105 | ||||||
Dividends paid on Series A redeemable convertible preferred stock | (13,747) | (13,747) | |||||
Dividends paid to noncontrolling interests | (4,200) | (4,200) | |||||
Balances at Ending at Dec. 31, 2015 | $ 22 | 309,110 | (67,234) | (81,647) | 160,251 | ||
Balances at Ending (in shares) at Dec. 31, 2015 | 21,821 | ||||||
Balances at Ending at Dec. 31, 2015 | 33,255 | 33,255 | |||||
Balances at noncontrolling Ending at Dec. 31, 2015 | $ 193,506 | ||||||
Balances at Ending (in shares) at Dec. 31, 2016 | 0 | ||||||
Changes in stockholders' equity | |||||||
Net income attributable to Acushnet Holdings Corp. | 45,012 | $ 45,012 | |||||
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest | 4,503 | 49,515 | |||||
Other comprehensive loss | (23,600) | (23,600) | |||||
Stock-based compensation expense | 14,494 | 14,494 | |||||
Issuance of common stock | $ 3 | 63,496 | 63,499 | ||||
Issuance of common stock (in shares) | 3,105 | ||||||
Conversion of redeemable convertible preferred stock (in shares) | (1,838) | ||||||
Conversion of redeemable convertible preferred stock (in Value) | $ (131,036) | 131,036 | |||||
Conversion of redeemable convertible preferred stock (in shares) | 16,542 | ||||||
Conversion of redeemable convertible preferred stock (in Value) | $ 16 | 131,020 | 131,036 | ||||
Conversion of convertible notes (in shares) | 32,626 | ||||||
Conversion of convertible notes | $ 33 | 362,456 | 362,489 | ||||
Dividends paid on Series A redeemable convertible preferred stock | (17,316) | (17,316) | |||||
Dividends paid to noncontrolling interests | (4,800) | (4,800) | |||||
Balances at Ending at Dec. 31, 2016 | $ 74 | $ 880,576 | $ (90,834) | $ (53,951) | 735,865 | ||
Balances at Ending (in shares) at Dec. 31, 2016 | 74,094 | ||||||
Balances at Ending at Dec. 31, 2016 | $ 32,958 | 32,958 | |||||
Balances at noncontrolling Ending at Dec. 31, 2016 | $ 768,823 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2016 | |
Description of Business | |
Description of Business | 1. Description of Business Acushnet Holdings Corp. (the “Company”), headquartered in Fairhaven, Massachusetts, is the global leader in the design, development, manufacture and distribution of performance-driven golf products. The Company has established positions across all major golf equipment and golf wear categories under its globally recognized brands of Titleist, FootJoy, Scotty Cameron and Vokey Design wedges. Acushnet products are sold primarily to on-course golf pro shops and selected off-course golf specialty stores, sporting goods stores and other qualified retailers. The Company sells products primarily in the United States, Europe (primarily the United Kingdom, Germany, France and Sweden), Asia (primarily Japan, Korea, China and Singapore), Canada and Australia. Acushnet manufactures and sources its products principally in the United States, China, Thailand, the United Kingdom, and Japan. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of the Company, its wholly- owned subsidiaries and a VIE in which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. Acquisition Acushnet Holdings Corp. was incorporated in Delaware on May 9, 2011 as Alexandria Holdings Corp., an entity owned by Fila Korea Co., Ltd. (“Fila Korea”), a leading sport and leisure apparel and footwear company which is a public company listed on the Korea Exchange, and a consortium of investors (the “Financial Investors”) led by Mirae Asset Global Investments, a global investment management firm. Acushnet Holdings Corp. acquired Acushnet Company, our operating subsidiary, from Beam Suntory, Inc. (at the time known as Fortune Brands, Inc.) (“Beam”) on July 29, 2011 (the “Acquisition”). Stock Split On October 14, 2016, the Company effected a nine-for-one stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for its 7.5% convertible notes due 2021 (“convertible notes”), Series A redeemable convertible preferred stock (“Series A preferred stock”), and the exercise price for the common stock warrants and the strike price of stock-based compensation. Accordingly, all share and per share amounts for all periods presented in the accompanying financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this stock split and adjustment of the common stock warrant exercise price, and convertible notes and redeemable convertible preferred stock conversion ratios. Initial Public Offering On November 2, 2016, the Company completed an initial public offering of 19,333,333 shares of its common stock sold by selling stockholders at a public offering price of $17.00 per share. Upon the closing of the Company’s initial public offering, all remaining outstanding shares of the Company’s Series A preferred stock were automatically converted into 11,556,495 shares of the Company’s common stock and the Company’s convertible notes were automatically converted into 22,791,852 shares of the Company’s common stock. The underwriters of the Company’s initial public offering exercised their over-allotment option to purchase an additional 2,899,999 shares of common stock from the selling stockholders at the initial public offering price of $17.00 per share. Automatic Conversion Following the pricing of the initial public offering, Magnus Holdings Co., Ltd. (“Magnus”), a wholly-owned subsidiary of Fila Korea, purchased from the Financial Investors on a pro rata basis 14,818,720 shares of the Company’s common stock, resulting in Magnus holding a controlling ownership interest of 53.1% of the Company’s outstanding common stock. The 14,818,720 shares of the Company’s common stock sold by the Financial Investors were received upon the automatic conversion of certain of the Company’s outstanding convertible notes (Note 9) and Series A preferred stock (Note 15). The remaining outstanding convertible notes and Series A preferred stock automatically converted into shares of the Company’s common stock prior to the closing of the initial public offering. Use of Estimates The preparation of the Company’s consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect reported amounts of assets, liabilities, stockholders’ equity, net sales and expenses, and the disclosure of contingent assets and liabilities in its consolidated financial statements. Actual results could differ from those estimates. Variable Interest Entities VIEs are entities that, by design, either (i) lack sufficient equity to permit the entity to finance its activities independently, or (ii) have equity holders that do not have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the entity’s expected losses, or the right to receive the entity’s expected residual returns. The Company consolidates a VIE when it is the primary beneficiary, which is the party that has both (i) the power to direct the activities that most significantly impact the VIE’s economic performance and (ii) through its interests in the VIE, the obligation to absorb expected losses or the right to receive expected benefits from the VIE that could potentially be significant to the VIE. The Company consolidates the accounts of Acushnet Lionscore Limited, a VIE which is 40% owned by the Company. The sole purpose of the VIE is to manufacture the Company’s golf footwear and as such, the Company is deemed to be the primary beneficiary as defined by Accounting Standards Codification (“ASC”) 810. The Company has presented separately on its consolidated balance sheets, to the extent material, the assets of its consolidated VIE that can only be used to settle specific obligations of its consolidated VIE and the liabilities of its consolidated VIE for which creditors do not have recourse to its general credit. The general creditors of the VIE do not have recourse to the Company. Certain directors of the noncontrolling entities have guaranteed the credit lines of the VIE, for which there were no outstanding borrowings as of December 31, 2016 and 2015. In addition, pursuant to the terms of the agreement governing the VIE, the Company is not required to provide financial support to the VIE. Cash and Restricted Cash Cash held in Company checking accounts is included in cash. Book overdrafts not subject to offset with other accounts with the same financial institution are classified as accounts payable. As of December 31, 2016 and 2015, book overdrafts in the amount of $3.6 million and $1.7 million, respectively, were recorded in accounts payable. The Company classifies as restricted certain cash that is not available for use in its operations. Restricted cash is primarily related to a standby letter of credit used for insurance purposes. Accounts Receivable Accounts receivable are presented net of an allowance for doubtful accounts. The allowance for doubtful accounts is assessed each reporting period by the Company for estimated losses resulting from the inability or unwillingness of its customers to make required payments. The allowance is based on various factors, including credit risk assessments, length of time the receivables are past due, historical experience, customer specific information available to the Company and existing economic conditions. Allowance for Sales Returns A sales returns allowance is recorded for anticipated returns through a reduction of sales and cost of goods sold in the period that the related sales are recorded. Sales returns are estimated based upon historical rates of product returns, current economic trends and changes in customer demands as well as specific identification of outstanding returns. In accordance with this policy, the allowance for sales returns was $9.8 million and $5.2 million as of December 31, 2016 and 2015, respectively. Concentration of Credit Risk and of Significant Customers Financial instruments that potentially expose the Company to concentration of credit risk are cash and accounts receivable. Substantially all of the Company's cash deposits are maintained at large, creditworthy financial institutions. The Company's deposits, at times, may exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. As part of its ongoing procedures, the Company monitors its concentration of deposits with various financial institutions in order to avoid any undue exposure. As of December 31, 2016 and 2015, the Company had $75.6 million and $54.1 million, respectively, in banks located outside the United States. The risk with respect to the Company's accounts receivable is managed by the Company through its policy of monitoring the creditworthiness of its customers to which it grants credit terms in the normal course of business. Inventories Inventories are valued at the lower of cost and net realizable value. Cost is determined using the first-in, first-out inventory method. The inventory balance, which includes material, labor and manufacturing overhead costs, is recorded net of an allowance for obsolete or slow moving inventory. The Company's allowance for obsolete or slow moving inventory contains estimates regarding uncertainties. Such estimates are updated each reporting period and require the Company to make assumptions and to apply judgment regarding a number of factors, including market conditions, selling environment, historical results and current inventory trends. Property, Plant and Equipment Property, plant and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation is provided on a straight-line basis over the estimated useful lives of the assets. Gains or losses resulting from disposals are included in income from operations. Betterments and renewals, which improve and extend the life of an asset, are capitalized. Maintenance and repair costs are expensed as incurred. Estimated useful lives of property, plant and equipment asset categories were as follows: Buildings and improvements – 40 years Machinery and equipment – 10 years Furniture, fixtures and computer hardware – 10 years Computer software – 10 years Leasehold and tenant improvements are amortized over the shorter of the lease term or the estimated useful lives of the assets. Certain costs incurred in connection with the development of the Company's internal-use software are capitalized. Software development costs are primarily related to the Company's enterprise resource planning system. Costs incurred in the preliminary stages of development are expensed as incurred. Internal and external costs incurred in the application development phase, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing performed to ensure the product is ready for its intended use. Costs such as maintenance and training are expensed as incurred. The capitalized internal-use software costs are included in property, plant and equipment and once the software is placed into service are amortized over the estimated useful life which ranges from three to ten years. Long-Lived Assets A long-lived asset (including amortizable identifiable intangible assets) or asset group is tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. When such events occur, the Company compares the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group to the carrying amount of the long-lived asset or asset group. The cash flows are based on the best estimate of future cash flows derived from the most recent business projections. If the carrying value exceeds the sum of the undiscounted cash flows, an impairment loss is recognized based on the excess of the asset's or asset group's carrying value over its fair value. Fair value is determined based on discounted expected future cash flows on a market participant basis. Any impairment charge would be recognized within operating expenses as a selling, general and administrative expense. Goodwill and Indefinite-Lived Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized but instead are measured for impairment at least annually, or more frequently when events or changes in circumstances indicate that the carrying amount of the asset may be impaired. Goodwill is assigned to reporting units for purposes of impairment testing. A reporting unit may be the same as an operating segment or one level below an operating segment. For purposes of assessing potential impairment, the Company may assess qualitative factors to determine if it is more likely than not (i.e., a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount, including goodwill. If the Company determines based on the qualitative factors that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, no further testing is necessary. If, however, the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company performs the first step of a two-step quantitative goodwill impairment test. In the first step, the Company compares the fair value of the reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is considered not impaired and the Company is not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the Company must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit's goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, then the Company would record an impairment loss equal to the difference. The fair value of the reporting units is determined using the income approach. The income approach uses a discounted cash flow analysis which involves applying appropriate discount rates to estimated future cash flows based on forecasts of sales, costs and capital requirements. The Company performs its annual impairment tests in the fourth quarter of each fiscal year. As of December 31, 2016, no impairment of goodwill was identified and the fair value of each reporting unit substantially exceeded its carrying value. Purchased intangible assets other than goodwill are amortized over their useful lives unless those lives are determined to be indefinite. The Company's trademarks have been assigned an indefinite life as the Company currently anticipates that these trademarks will contribute to its cash flows indefinitely. Trademarks are reviewed for impairment annually and may be reviewed more frequently if indicators of impairment are present. Impairment losses are recorded to the extent that the carrying value of the indefinite-lived intangible asset exceeds its fair value. The Company measures the fair value of its trademarks using the relief-from-royalty method, which estimates the present value of royalty income that could be hypothetically earned by licensing the brand name to a third party over the remaining useful life. The Company continually evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived assets may warrant revision or that the remaining balance may not be recoverable. These factors may include a significant deterioration of operating results, changes in business plans, or changes in anticipated cash flows. When factors indicate that an asset should be evaluated for possible impairment, the Company reviews long-lived assets to assess recoverability from future operations using undiscounted cash flows. If future undiscounted cash flows are less than the carrying value, an impairment is recognized in earnings to the extent that the carrying value exceeds fair value. Deferred Financing Costs The Company defers costs directly associated with acquiring third-party financing. These deferred costs are amortized as interest expense over the term of the related indebtedness. Deferred financing costs associated with the revolving credit facilities are included in other current and noncurrent asset and deferred financing costs associated with all other indebtedness are netted against debt on the consolidated balance sheets. Fair Value Measurements Certain assets and liabilities are carried at fair value under U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: · Level 1—Quoted prices in active markets for identical assets or liabilities. · Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. · Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. Prior to the final exercise of the Company's outstanding warrants to purchase the Company’s common stock, the common stock warrants liability was carried at fair value. The Company’s foreign exchange derivative assets and liabilities are carried at fair value determined according to the fair value hierarchy described above (Note 11). The carrying value of accounts receivable, accounts payable and accrued expenses approximates fair value due to the short-term nature of these assets and liabilities. As permitted under ASC 820, the Company adopted the fair value measurement disclosures for nonfinancial assets and liabilities, such as goodwill and indefinite-lived intangible assets. In some instances where a market price is available, but the instrument is in an inactive or over-the-counter market, the Company consistently applies the dealer (market maker) pricing estimate and uses a midpoint approach on bid and ask prices from financial institutions to determine the reasonableness of these estimates. Assets and liabilities subject to this fair value valuation approach are typically classified as Level 2. Pension and Other Postretirement Benefit Plans The Company provides U.S. and foreign defined benefit and defined contribution plans to eligible employees and postretirement benefits to certain retirees, including pensions, postretirement healthcare benefits and other postretirement benefits. Plan assets and obligations are measured using various actuarial assumptions, such as discount rates, rate of compensation increase, mortality rates, turnover rates and health care cost trend rates, as determined at each year end measurement date. The measurement of net periodic benefit cost is based on various actuarial assumptions, including discount rates, expected return on plan assets and rate of compensation increase, which are determined as of the prior year measurement date. The determination of the discount rate is generally based on an index created from a hypothetical bond portfolio consisting of high-quality fixed income securities with durations that match the timing of expected benefit payments. The expected return on plan assets is determined based on several factors, including adjusted historical returns, historical risk premiums for various asset classes and target asset allocations within the portfolio. Adjustments made to the historical returns are based on recent return experience in the equity and fixed income markets and the belief that deviations from historical returns are likely over the relevant investment horizon. Actual cost is also dependent on various other factors related to the employees covered by these plans. The effects of actuarial deviations from assumptions are generally accumulated and, if over a specified corridor, amortized over the remaining service period of the employees. The cost or benefit of plan changes, such as increasing or decreasing benefits for prior employee service (prior service cost), is deferred and included in expense on a straight-line basis over the average remaining service period of the related employees. The Company's actuarial assumptions are reviewed on an annual basis and modified when appropriate. To calculate the U.S. pension and postretirement benefit plan expense in 2017, the Company will apply the individual spot rates along the yield curve that correspond with the timing of each future cash outflow for the benefit payments in order to calculate interest cost and service cost. Prior to 2017, the service cost and interest cost components were determined using a single weighted-average discount rate. The change does not affect the measurement of the total benefit plan obligations, as the change in the service cost and interest cost offsets in the actuarial gains and losses recorded in other comprehensive income. The Company changed to the new method to provide a more precise measure of service and interest cost by improving the correlation between the projected benefit cash flows and the discrete spot yield curve rates. The Company accounted for this change as a change in estimate prospectively beginning in 2017. Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between consolidated financial statement carrying amount and tax basis and using enacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance is recorded to reduce deferred income tax assets when it is more-likely-than-not that such assets will not be realized. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company provides deferred income taxes on undistributed earnings of foreign subsidiaries that it does not expect to permanently reinvest. The Company records liabilities for uncertain income tax positions based on the two step process. The first step is recognition, where an individual tax position is evaluated as to whether it has a likelihood of greater than 50% of being sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation processes. For tax positions that are currently estimated to have a less than 50% likelihood of being sustained, no tax benefit is recorded. For tax positions that have met the recognition threshold in the first step, the Company performs the second step of measuring the benefit to be recorded. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized on ultimate settlement. The actual benefits ultimately realized may differ from the estimates. In future periods, changes in facts, circumstances, and new information may require the Company to change the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recorded in income tax expense and liability in the period in which such changes occur. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes on the consolidated statements of income. Beam has indemnified certain tax obligations that relate to periods during which Fortune Brands, Inc. owned Acushnet Company (Note 13). These estimated tax obligations are recorded in accrued taxes and other noncurrent liabilities, and the related indemnification receivable is recorded in other current and noncurrent assets on the consolidated balance sheet. Any changes in the value of these specifically identified tax obligations are recorded in the period identified in income tax expense and the related change in the indemnification asset is recorded in other (income) expense, net on the consolidated statement of operations. Revenue Recognition Revenue is recognized upon shipment or upon receipt by the customer depending on the country of the sale and the agreement with the customer, net of allowances for discounts, sales returns, customer sales incentives and cooperative advertising. The criteria for recognition of revenue is met when persuasive evidence that an arrangement exists, both title and risk of loss have passed to the customer, the price is fixed or determinable and collectability is reasonably assured. In circumstances where either title or risk of loss pass upon receipt by the customer, revenue is deferred until such event occurs based on an estimate of the shipping time from the Company's distribution centers to the customer using historical and expected delivery times by geographic location. Amounts billed to customers for shipping and handling are included in net sales. Customer Sales Incentives The Company offers customer sales incentives, including off-invoice discounts and sales-based rebate programs, to its customers which are accounted for as a reduction in sales at the time the revenue is recognized. Sales-based rebates are estimated using assumptions related to the percentage of customers who will achieve qualifying purchase goals and the level of achievement. These assumptions are based on historical experience, current year program design, current marketplace conditions and sales forecasts, including considerations of product life cycles. Cost of Goods Sold Cost of goods sold includes all costs to make products saleable, such as inbound freight, purchasing and receiving costs, inspection costs and transfer costs. In addition, all depreciation expense associated with assets used to manufacture products and make them saleable is included in cost of goods sold. Product Warranty The Company has defined warranties ranging from one to two years. Products covered by the defined warranty policies include all Titleist golf products, FootJoy golf shoes, and FootJoy golf outerwear. These product warranties generally obligate the Company to pay for the cost of replacement products, including the cost of shipping replacement products to its customers. The estimated cost of satisfying future warranty claims is accrued at the time the sale is recorded. In estimating future warranty obligations, the Company considers various factors, including its warranty policies and practices, the historical frequency of claims, and the cost to replace or repair products under warranty. Advertising and Promotion Advertising and promotional costs are included in selling, general and administrative expense on the consolidated statement of operations and include product endorsement arrangements with members of the various professional golf tours, media placement and production costs (television, print and internet), tour support expenses and point-of-sale materials. Advertising production costs are expensed as incurred. Media placement costs are expensed in the month the advertising appears. Product endorsement arrangements are expensed based upon the specific provisions of player contracts. Advertising and promotional expense was $196.0 million, $203.3 million and $201.6 million for the years ended December 31, 2016, 2015 and 2014, respectively. Selling Selling expenses including field sales, sales administration and shipping and handling costs are included in selling, general and administrative expense on the consolidated statement of operations. Shipping and handling costs included in selling expenses were $32.4 million, $32.6 million and $30.5 million for the years ended December 31, 2016, 2015 and 2014, respectively. Research and Development Research and development expenses include product development, product improvement, product engineering, and process improvement costs and are expensed as incurred. Foreign Currency Translation and Transactions Assets and liabilities denominated in foreign currency are translated into U.S. dollars at the actual rates of exchange at the balance sheet date. Revenues and expenses are translated at the average rates of exchange for the reporting period. The related translation adjustments are recorded as a component of accumulated other comprehensive income (loss). Transactions denominated in a currency other than the functional currency are re-measured into functional currency with resulting transaction gains or losses recorded as selling, general and administrative expense on the consolidated statement of operations. Transaction gain (loss) included in selling, general and administrative expense was a gain of $1.2 million, a loss of $4.7 million and a loss of $4.2 million for the years ended December 31, 2016, 2015 and 2014, respectively. Derivative Financial Instruments All derivatives are recognized as either assets or liabilities on the consolidated balance sheet and measurement of these instruments is at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings in the same period. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded as a component of accumulated other comprehensive income (loss) and are recognized in the consolidated statement of operations when the hedged item affects earnings. Any portion of the change in fair value that is determined to be ineffective is immediately recognized in earnings as cost of goods sold. Valuation of Common Stock Warrants Prior to July 2016, the Company had outstanding warrants to purchase its common stock, which the Company classified as a liability on its consolidated balance sheet as the warrants were free-standing financial instruments that could result in the issuance of a variable number of the Company's common shares. The warrants were initially recorded at fair value on the date of grant, and were subsequently re-measured to fair value at each reporting date. The change in the fair value of the common stock warrants was recognized as a component of other (income) expense, net on the consolidated statement of operations. The Company performed a two-step process to determine the fair value of the warrants to purchase common stock. The first step was to estimate the aggregate fair value of the Company (Business Enterprise Value, or BEV), which was then allocated to each element of the Company's capital structure under the contingent claims methodology. In determining the fair value of its BEV, the Company used a combination of the income approach and the market approach to estimate its aggregate BEV at each reporting date. The income approach uses a discounted cash flow analysis, which involves applying appropriate discount rates to estimated future cash flows based on forecasts of sales, costs and capital requirements. The market approach employs the guideline public company method, which uses the fair value of a peer group of publicly-traded companies. In the second step, the Company's estimated aggregate fair value was allocated to shares of common stock, shares of redeemable convertible preferred stock, convertible notes, bonds, employee stock options and warrants to purchase common stock using the contingent claims methodology. Under this model, each component of the Company's capital structure is treated as a call option with unique claim on the Company's assets as determined by the characteristics of each security's class. The resulting option claims are then valued using an option pricing model. The Company historically had been a private company and lacked company-specific historical and implied volatility information of its stock. Therefore, it estimated its expected stock volatility based on the historical volatility of publicly-traded peer companies for a term equal to the remaining expected term of the warrants. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining time to purchase for each of the tranches of warrants. Share-based Compensation The Company mea |
Allowance for Doubtful Accounts
Allowance for Doubtful Accounts | 12 Months Ended |
Dec. 31, 2016 | |
Allowance for Doubtful Accounts | |
Allowance for Doubtful Accounts | 3. Allowance for Doubtful Accounts The change to the allowance for doubtful accounts was as follows: (in thousands) 2016 2015 2014 Balance at beginning of year $ $ $ Bad debt expense Amount of receivables written off Foreign currency translation Balance at end of year $ $ $ On September 14, 2016, Golfsmith International Holdings LP, one of the Company’s largest customers in the years ended December 31, 2016, 2015, and 2014, announced that its U.S.‑based business, Golfsmith International Holdings, Inc., (Golfsmith) commenced a Chapter 11 case under Title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware, and its Canada‑based business, Golf Town Canada Inc., (Golf Town) commenced creditor protection proceedings under the Companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice (Commercial List). The Company’s outstanding receivable related to Golfsmith and Golf Town was reserved for in full by the time of the bankruptcy filing and as of December 31, 2016 the portion related to Golfsmith had been written off. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2016 | |
Inventories | |
Inventories | 4. Inventories The components of inventories were as follows: (in thousands) December 31, December 31, 2016 2015 Raw materials and supplies $ $ Work-in-process Finished goods Inventories $ $ The change to the inventory reserve was as follows: (in thousands) 2016 2015 2014 Balance at beginning of year $ $ $ Charged to costs and expenses Deduction for reserved inventory disposed or sold Foreign currency translation Balance at end of year $ $ $ The Company identified an immaterial error in the disclosure of the inventory reserve table as presented in the prior year financial statements. The error was limited to the presentation in the footnote and had no impact on the consolidated financial statements. The Company has revised prior period amounts to correct for these errors.The revision of the 2015 disclosure resulted in a decrease in the balance at end of year of $1.0 million made up of a decrease in the beginning reserve of $2.6 million, an increase in charged to cost and expenses of $2.2 million, an increase in deduction for reserved inventory disposed or sold of $0.4 million and an increase in foreign currency translation of $0.2 million. The revision of the 2014 disclosure resulted in a decrease in the balance at end of year of $2.6 million made up of a decrease in the beginning reserve of $1.9 million, a decrease in charged to cost and expenses of $2.5 million, a decrease in deduction for reserved inventory disposed or sold of $2.3 million and an increase in foreign currency translation of $0.5 million. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment, Net | |
Property, Plant and Equipment, Net | 5. Property, Plant and Equipment, Net The components of property, plant and equipment, net were as follows: December 31, December 31, (in thousands) 2016 2015 Land $ $ Buildings and improvements Machinery and equipment Furniture, computers and equipment Computer software Construction in progress Property, plant and equipment, gross Accumulated depreciation and amortization Property, plant and equipment, net $ $ During the years ended December 31, 2016, 2015 and 2014, software development costs of $8.2 million, $43.0 million and $9.4 million were capitalized, consisting of software placed into service of $7.4 million, $40.6 million and $0.8 million and amounts recorded in construction in progress of $0.8 million, $2.4 million and $8.6 million, respectively. Amortization expense on capitalized software development costs was $5.8 million, $5.5 million and $2.8 million for the years ended December 31, 2016, 2015 and 2014, respectively. Total depreciation and amortization expense related to property, plant and equipment was $31.5 million, $32.5 million and $33.2 million for the years ended December 31, 2016, 2015 and 2014, respectively. |
Goodwill and Identifiable Intan
Goodwill and Identifiable Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Identifiable Intangible Assets, Net | |
Goodwill and Identifiable Intangible Assets, Net | 6. Goodwill and Identifiable Intangible Assets, Net The change in the net carrying value of goodwill was as follows: (in thousands) 2016 2015 Balances at beginning of year $ $ Foreign currency translation Balances at end of year $ $ Goodwill allocated to the Company's reportable segments and changes in the carrying amount of goodwill were as follows: Titleist Titleist FootJoy Titleist (in thousands) Golf Balls Golf Clubs Golf Wear Golf Gear Other Total Balances at December 31,2014 $ $ $ $ $ $ Foreign currency translation Balances at December 31,2015 Foreign currency translation Balances at December 31,2016 $ $ $ $ $ $ The net carrying value by class of identifiable intangible assets was as follows: Weighted December 31,2016 December 31,2015 Average Useful Accumulated Net Book Accumulated Net Book (in thousands) Life (Years) Gross Amortization Value Gross Amortization Value Indefinite-lived: Trademarks N/A $ $ - $ $ $ - $ Amortizing: Completed Technology 13 Customer Relationships 20 Licensing Fees and Other 7 Total intangible assets $ $ $ $ $ $ During the years ended December 31, 2016 and 2015, no impairment charges were recorded to goodwill or indefinite-lived intangible assets. During the year ended December 31, 2014, the Company recorded an impairment charge of $0.8 million related to its Pinnacle trademarks. The Company did not record an impairment charge to goodwill during the year ended December 31, 2014. Amortization expense on identifiable intangible assets was $9.3 million, $9.3 million and $9.4 million for the years ended December 31, 2016, 2015 and 2014, respectively, of which $2.7 million associated with certain licensing fees was included in cost of goods sold in each year. Amortization expense related to intangible assets as of December 31, 2016 for each of the next five fiscal years and beyond is expected to be as follows: (in thousands) Year ending December 31, 2017 $ 2018 2019 2020 2021 Thereafter Total $ |
Product Warranty
Product Warranty | 12 Months Ended |
Dec. 31, 2016 | |
Product Warranty | |
Product Warranty | 7. Product Warranty The activity related to the Company’s warranty obligation for accrued warranty expense was as follows: (in thousands) 2016 2015 2014 Balance at beginning of year $ $ $ Provision Claims paid/costs incurred Foreign currency translation Balance at end of year $ $ $ |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions | |
Related Party Transactions | 8. Related Party Transactions The Company has historically incurred interest expense payable to related parties on its outstanding convertible notes and bonds with common stock warrants (Note 9). Related party interest expense totaled $28.1 million, $35.4 million and $38.0 million for the years ended December 31, 2016, 2015 and 2014, respectively. In addition, other assets includes receivables from related parties of $0.9 million as of December 31, 2016. |
Debt and Financing Arrangements
Debt and Financing Arrangements | 12 Months Ended |
Dec. 31, 2016 | |
Debt and Financing Arrangements | |
Debt and Financing Arrangements | 9. Debt and Financing Arrangements The Company’s debt and capital lease obligations were as follows: December 31, December 31, (in thousands) 2016 2015 Term loan $ $ - Secured floating rate notes - Convertible notes - Bonds with common stock warrants - Senior term loan facility - Revolving credit facility Other short-term borrowings - Capital lease obligations Total Less: Short-term debt Total long-term debt and capital lease obligations $ $ The term loan is net of debt issuance costs of $3.7 million as of December 31, 2016. The secured floating rate notes are net of debt issuance costs of $2.2 million as of December 31, 2015. Senior Secured Credit Facility On April 27, 2016, the Company entered into a senior secured credit facilities agreement arranged by Wells Fargo Bank, National Association which provides for (i) a $275.0 million multi‑currency revolving credit facility, including a $20.0 million letter of credit sublimit, a $25.0 million swing line sublimit, a C$25.0 million sublimit for Acushnet Canada, Inc., a £20.0 million sublimit for Acushnet Europe Limited and an alternative currency sublimit of $100.0 million for borrowings in Canadian dollars, euros, pounds sterling and Japanese yen (“revolving credit facility”), (ii) a $375.0 million term loan A facility and (iii) a $100.0 million delayed draw term loan A facility. The revolving and term loan facilities mature on July 28, 2021 and the delayed draw term loan A facility expires on July 28, 2017 if not drawn. The credit agreement allows for the incurrence of additional term loans or increases in the revolving credit facility in an aggregate principal amount not to exceed (i) $200.0 million plus (ii) an unlimited amount so long as the net average secured leverage ratio (as defined in the credit agreement) does not exceed 2.00:1.00 on a pro forma basis. The applicable interest rate for the Canadian borrowings under the senior secured credit facility is based on CDOR plus a margin ranging from 1.25% to 2.00% depending on the Net Average Total Leverage Ratio as defined in the credit agreement. The applicable interest for the swing line sublimit is the highest of (a) Federal Funds Rate plus 0.50%, (b) the Prime Rate and (c) the one month LIBOR rate plus 1.00% plus a margin ranging from 0.25% to 1.00% depending on the Net Average Total Leverage Ratio as defined in the credit agreement. The applicable interest rate for all remaining borrowings under the senior secured credit facilities is LIBOR plus a margin ranging from 1.25% to 2.00% depending on the Net Average Total Leverage Ratio as defined in the credit agreement or the highest of (a) Federal Funds Rate plus 0.50%, (b) the Prime Rate and (c) the one month LIBOR rate plus 1.00% plus a margin ranging from 0.25%.to 1.00% depending on the Net Average Total Leverage Ratio as defined in the credit agreement. The credit agreement contains customary affirmative and restrictive covenants, including, among others, financial covenants based on the Company’s leverage and interest coverage ratios. The credit agreement includes customary events of default, the occurrence of which, following any applicable cure period, would permit the lenders to, among other things, declare the principal, accrued interest and other obligations to be immediately due and payable. A change of control is an event of default under the credit agreement which could result in the acceleration of all outstanding indebtedness and the termination of all commitments under the credit agreement and would allow the lenders under the credit agreement to enforce their rights with respect to the collateral granted. A change of control occurs if any person (other than certain permitted parties, including Fila Korea) becomes the beneficial owner of 35% or more of the outstanding common stock of the Company. On October 28, 2016, Magnus Holdings Co., Ltd. (“Magnus”), a wholly owned subsidiary of Fila Korea, entered into a one-year term loan which is secured by a pledge on all of the Company’s common stock owned by Magnus, except for 5% of the Company’s outstanding common stock owned by Magnus that is subject to a negative pledge under Fila Korea’s credit facility, which equals 48.1% of the Company’s outstanding common stock. If Fila Korea or Magnus are unable to repay the amounts due on the term loan at maturity, the lenders of such debt can foreclose on the pledged shares of the Company’s common stock. The credit agreement was signed and became effective on April 27, 2016 and initial funding under the credit agreement occurred on July 28, 2016. The proceeds of the $375.0 million term loan A facility, borrowings of C$4.0 million (equivalent to approximately $3.0 million) under the revolving credit facility and cash on hand of $23.6 million were used to repay all amounts outstanding under the secured floating rate notes and certain former working credit facilities. The secured floating rate notes, certain former working credit facilities and the former senior revolving credit facility were terminated. The Company recorded interest expense related to the term loan facility, including the amortization of debt issuance costs, of $4.5 million during the year ended December 31, 2016. The Company recorded interest expense related to the revolving credit facility of $0.9 million during the year ended December 31, 2016. Convertible Notes In 2011 and 2012, the Company issued convertible notes with an aggregate principal amount of $362.5 million to shareholders. The convertible notes bore interest at a rate of 7.5% per annum, which was payable in cash semi‑annually in arrears on February 1 and August 1. The notes matured upon the earlier of July 29, 2021 or the election of the holder upon a change in control, as defined in the securities purchase agreements governing the notes. Amounts due under the convertible notes could only be repaid upon maturity or upon a change in control. On March 11, 2013, the Company received approval from the holders of the convertible notes to defer any interest payments due after August 1, 2013 and prior to February 1, 2016 pursuant to the covenants imposed by the secured floating rate notes and the senior revolving and term loan facilities. The notes were convertible at the option of the holder at any time prior to maturity into a number of shares of the Company’s common stock determined by dividing the aggregate outstanding unpaid principal amount of the note by the conversion price of $11.11 per share. The conversion price was subject to adjustment if additional shares of common stock were sold subsequent to the issuance of the convertible notes at a price per common share that was lower than $11.11 per share or upon a subdivision of the outstanding shares of the Company’s common stock. Transfer of the notes to any party, including an affiliate of the noteholder, required prior written consent of the other noteholders and Fila Korea. On May 6, 2016, the Company and each of the holders of the convertible notes entered into an agreement requiring the mandatory conversion of the convertible notes into fully paid and nonassessable shares of the Company’s common stock upon the closing of an initial public offering. This agreement was amended on September 5, 2016 to provide for the automatic conversion of a portion of the outstanding convertible notes in connection with the sale of shares of the Company’s common stock by the holders of the convertible notes to Magnus. The automatic conversion of all outstanding convertible notes occurred prior to the closing of the Company’s initial public offering. Upon conversion, all accrued but unpaid interest on the principal of the convertible notes was paid to each holder of the convertible notes. The Company recorded interest expense related to the convertible notes of $22.6 million, $27.2 million and $27.2 million during the years ended December 31, 2016, 2015 and 2014 respectively. Bonds with Common Stock Warrants In 2011 and 2012, the Company issued bonds with an aggregate principal amount of $172.5 million to shareholders. The bonds bore interest at a rate of 7.5% per annum, which was payable in cash semi‑annually in arrears on February 1 and August 1. The bonds matured upon the earlier of July 29, 2021 or the election of the holder upon a change of control, as defined in the securities purchase agreement governing the bonds. Amounts due under the bonds could only be repaid upon maturity, a change of control, a holder electing to exercise common stock warrants by net settling their bonds or an exercise of common stock warrants by Fila Korea. In connection with the issuance of these bonds, the Company issued common stock warrants for the purchase of 15,526,431 shares of the Company’s common stock, at an exercise price of $11.11 per share. The exercise price was subject to adjustment if additional shares of common stock were sold subsequent to the issuance of the bonds at a price per common share that was lower than $11.11 per share or upon a subdivision of the outstanding shares of the Company’s common stock. The common stock warrant exercise price could be settled with cash or through tender of an aggregate outstanding principal amount of the bonds and accrued but unpaid interest equal to the exercise price of the common stock warrants. The common stock warrants were detachable and transferrable by the holders only to Fila Korea or its designee at a price equal to the interest accrued on the underlying bonds at the rate of 4.0% per annum calculated on an annual compounded basis. The shareholders agreement provided Fila Korea with a call option to purchase all of the outstanding common stock warrants held by holders of the bonds in annual installments of 3,105,288 common stock warrants over a five year period beginning July 29, 2012. Fila Korea was required to exercise the common stock warrants within 10 days of the transfer. The exercise of the common stock warrants by Fila Korea triggered the Company to redeem a pro rata share of the bonds payable by using the proceeds received from the exercise of the common stock warrants by Fila Korea. In July 2016, Fila Korea exercised its final annual call option to purchase 3,105,279 common stock warrants held by the holders of the bonds and exercised such warrants at the exercise price of $11.11 per share. This resulted in proceeds to the Company of $34.5 million which the Company used to repay the outstanding indebtedness under the bonds of $34.5 million. A discount of $19.9 million relating to the issuance‑date fair value of the common stock warrants was recorded on the issuance date of the bonds and was accreted to interest expense until the maturity date of the bonds. The unamortized discount was $4.0 million as of December 31, 2015. The Company recorded interest expense related to the bonds, including the amortization of the discount, of $5.5 million, $8.2 million and $10.8 million during the years ended December 31, 2016, 2015 and 2014, respectively. Secured Floating Rate Notes In October 2011, the Company issued secured floating rate notes with Korea Development Bank in an aggregate principal amount of $500.0 million, which matured on July 29, 2016. The notes bore interest at a rate equal to three‑month LIBOR plus a margin of 3.75%, which was required to be paid quarterly in arrears on January 31, April 30, July 31 and October 31. The notes were issued in separate classes with maturity dates ranging from October 2013 to July 2016. Pursuant to an amended and restated pledge and security agreement dated October 31, 2011, the secured floating rate notes were secured by certain assets, including inventory, accounts receivable, fixed assets and intangible assets of the Company, and a second priority security interest in the shares of certain Fila Korea entities, trademarks and bank accounts. In October 2013, the Company issued secured floating rate notes with Korea Development Bank in an aggregate principal amount of $125.0 million, which matured on July 29, 2016. Proceeds from the issuance of the notes were used, along with existing cash on hand, to repay $150.0 million of the secured floating rate notes issued in October 2011. The notes bore interest at a rate equal to three‑month LIBOR plus a margin of 3.75%, which was required to be paid quarterly in arrears on January 31, April 30, July 31 and October 31. The Company incurred $13.2 million of issuance costs in connection with the original issuance of $500.0 million secured floating rate notes. In addition, the Company incurred $3.3 million of issuance costs in connection with the issuance of $125.0 million secured floating rate notes during the year ended December 31, 2013. Of the $3.3 million, $1.0 million was immediately recorded as interest expense and $2.3 million was capitalized as debt issuance costs. On July 28, 2016, the outstanding borrowings under the secured floating rate notes were repaid in full using the proceeds from the senior secured credit facility and the secured floating rate notes were terminated. There were outstanding borrowings under the secured floating rate notes of $375.0 million as of December 31, 2015. As of December 31, 2015, the interest rate applicable to the outstanding borrowings under the secured floating rate notes was 4.07%. The Company recorded interest expense related to the secured floating rate notes, including the amortization of debt issuance costs, of $12.3 million, $20.8 million and $22.4 million during the years ended December 31, 2016, 2015 and 2014, respectively. Senior Revolving and Term Loan Facilities In July 2011, the Company entered into a senior revolving facilities agreement with Korea Development Bank (“Senior Facility Agreement”), which provided for borrowings under a revolving credit facility of up to $50.0 million to be used for general corporate purposes (“Senior Revolving Facility”). The applicable interest rate for borrowings under the Senior Revolving Facility was LIBOR plus a margin of 3.25%. The Senior Facility Agreement required a commitment fee of 0.3% based on the average daily unused portion of the facility. On February 12, 2014, the Company amended its Senior Facility Agreement and simultaneously executed a joinder agreement with Wells Fargo N.A. to increase the borrowing capacity under the Senior Revolving Facility to $75.0 million. On December 24, 2014, the Company further amended the Senior Facility Agreement to increase the borrowing capacity under the Senior Revolving Facility to $95.0 million, which matured on July 29, 2016. This amendment also provided for borrowings under a senior term loan agreement with Korea Development Bank of $30.0 million (“Senior Term Loan”), which matured on July 29, 2016. The applicable interest rate for borrowings under the Senior Term Loan was three‑month LIBOR plus a margin of 2.63%, and was increased for any required withholding taxes. The Senior Facility Agreement required a commitment fee of 0.3% based on the average daily unused portion of the term loan. Upon entry into the amendment, the Company immediately borrowed the entire $30.0 million under the Senior Term Loan. There were no outstanding borrowings under the Senior Revolving Facility as of December 31, 2015. The Company recorded interest expense related to the Senior Revolving Facility, including unused commitment fees, of $0.8 million, $0.8 million and $0.9 million during the years ended December 31, 2016, 2015 and 2014, respectively. On June 30, 2016, the Company repaid all amounts outstanding under the Senior Term Loan facility and the facility was terminated. There were outstanding borrowings under the Senior Term Loan of $30.0 million as of December 31, 2015. As of December 31, 2015, the interest rate applicable to the outstanding borrowings under the Senior Term Loan facility was 3.26%. The Company recorded interest expense related to the Senior Term Loan of $0.7 million, $1.3 million and less than $0.1 million during the years ended December 31, 2016, 2015 and 2014, respectively. Line of Credit Facility On February 5, 2016, the Company entered into a working capital facility agreement arranged by Wells Fargo Bank, National Association which provided for borrowings up to $30.0 million. The applicable interest rate for borrowings under the facility was daily one‑month LIBOR plus a margin of 2.50%. The facility required a commitment fee equal to 0.35% of the unused portion of the facility as of the preceding fiscal quarter. The working capital facility had an original maturity date of May 31, 2016, but was amended on May 18, 2016 to extend the maturity date to July 29, 2016. The Company recorded interest expense related to the line of credit facility of $0.3 million during the year ended December 31, 2016. Working Credit Facility (Canada) In February 2013, the Company entered into a working credit facility agreement arranged by Wells Fargo N.A., Canadian Branch, which provided for borrowings of up to the lesser of (a) C$25 million or (b) the sum of 80% of eligible accounts receivable and 60% of eligible inventory. The working credit facility, as amended, matured on July 29, 2016. The applicable interest rate for borrowings under the facility for Canadian dollar borrowings was CDOR plus a margin of 2.0% or Canadian Prime Rate and for U.S. dollar borrowings was LIBOR plus a margin of 2.0% or U.S. Prime Rate. The facility required a commitment fee equal to 0.25% of the uncancelled and unutilized portion of the facility as of the preceding fiscal quarter. On July 28, 2016, the outstanding borrowings were repaid using the proceeds from the senior secured credit facility and cash on hand and the working credit facility (Canada) was terminated. There were no outstanding borrowings under the working credit facility (Canada) as of December 31, 2015. The Company recorded interest expense related to the working credit facility (Canada), including unused commitment fees, of $0.2 million, $0.3 million and $0.3 million during the years ended December 31, 2016, 2015 and 2014, respectively. Working Credit Facility (Europe) In April 2012, the Company entered into a working credit facility agreement arranged by Wells Fargo Capital Finance (UK) Limited, which provided for borrowings of up to the lesser of (a) £30.0 million or (b) the sum of 85% of eligible accounts receivable and 65% of eligible inventory, of which £5.0 million can be used for letters of credit. The working credit facility had an original maturity date of April 4, 2017. The applicable interest rate for borrowings under the facility was LIBOR plus a margin of 3.0%. The facility included a commitment fee of 0.375% on the average daily unused portion of the facility. The working credit facility was secured by the accounts receivable, inventory and cash collections of Acushnet Europe Limited, a wholly-owned subsidiary of the Company. On July 28, 2016, the outstanding borrowings were repaid using cash on hand and the working credit facility (Europe) was terminated. There were no outstanding borrowings under the working credit facility (Europe) as of December 31, 2015. The Company recorded interest expense related to the working credit facility (Europe), including unused commitment fees, of $0.5 million, $0.6 million and $0.7 million during the years ended December 31, 2016, 2015 and 2014, respectively. Letters of Credit As of December 31, 2016 and 2015, there were outstanding letters of credit totaling $11.6 million and $14.4 million, respectively, of which $8.6 million and $4.0 million was secured, respectively, related to agreements which provided a maximum commitment for letters of credit of $24.0 million. Available Borrowings As of December 31, 2016, the Company had available borrowings under its revolving credit facilities, including the revolving credit facility, Senior Revolving Facility and Canadian and European working credit facilities, of $224.9 million after giving effect to $7.6 million of outstanding letters of credit. Payments of Debt Obligations due by Period As of December 31, 2016, principal payments on outstanding long-term debt obligations were as follows: (in thousands) Year ending December 31, 2017 $ 2018 2019 2020 2021 Thereafter - Total $ |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Financial Instruments | |
Derivative Financial Instruments | 10. Derivative Financial Instruments Common Stock Warrants Prior to the exercise of the final tranche of common stock warrants by Fila Korea during July 2016, the Company classified warrants to purchase common stock as a liability on its consolidated balance sheet as the warrants were free‑standing financial instruments that could result in the issuance of a variable number of the Company’s common shares. The warrants were initially recorded at fair value on grant date, and were subsequently re‑measured to fair value at each reporting date. Common stock warrants were recorded at fair value (Note 11) and included in accrued expenses and other liabilities on the consolidated balance sheet as of December 31, 2015. Changes in the fair value of the common stock warrants were recognized as other (income) expense, net on the consolidated statement of operations. On July 29, 2011, the Company issued bonds in the aggregate principal amount of $168.0 million and common stock warrants to purchase an aggregate of 15,120,000 shares of the Company’s common stock. On January 20, 2012, the Company issued $4.5 million of additional bonds and common stock warrants to purchase 406,431 shares of the Company’s common stock (Note 9). In July 2016, Fila Korea exercised its final annual call option to purchase 3,105,279 common stock warrants held by the holders of the bonds and exercised such warrants at the exercise price of $11.11 per share, or $34.5 million in the aggregate. The Company used the proceeds received from Fila Korea’s exercise of the common stock warrants to redeem the outstanding bonds payable. Foreign Exchange Derivative Instruments The Company principally uses financial instruments to reduce the impact of changes in foreign currency exchange rates. The principal derivative financial instruments the Company enters into on a routine basis are foreign exchange forward contracts. The Company does not enter into foreign exchange forward contracts for trading or speculative purposes. Foreign exchange contracts are primarily used to hedge purchases denominated in select foreign currencies, thereby limiting currency risk that would otherwise result from changes in exchange rates. The periods of the foreign exchange contracts correspond to the periods of the forecasted transactions, which do not exceed 24 months subsequent to the latest balance sheet date. The primary foreign currency hedge contracts pertain to the U.S. dollar, the Japanese yen, the British pound sterling, the Canadian dollar, the Korean won and the Euro. The gross U.S. dollar equivalent notional amount of all foreign currency derivative hedges outstanding as of December 31, 2016 was $371.2 million. The counterparties to derivative contracts are major financial institutions. The Company assesses credit risk of the counterparties on an ongoing basis. The credit risk of counterparties does not have a significant impact on the valuation of the Company’s derivative instruments. The fair values of foreign exchange derivative instruments on the consolidated balance sheets were as follows: Balance Sheet December 31, December 31, (in thousands) Location 2016 2015 Asset derivatives Other current assets $ $ Other noncurrent assets Liability derivatives Other current liabilities Other noncurrent liabilities The effect of foreign exchange derivative instruments on accumulated other comprehensive income (loss) and the consolidated statements of operations was as follows: Gain (Loss) Recognized in OCI Year ended December 31, (in thousands) 2016 2015 2014 Type of hedge Cash flow $ $ $ $ $ $ Gain (Loss) Recognized in Statement of Operations Year ended December 31, (in thousands) 2016 2015 2014 Location of gain (loss) in statement of operations Cost of goods sold $ $ $ Selling, general and administrative expense $ $ $ Based on the current valuation, the Company expects to reclassify a net gain of $9.3 million from accumulated other comprehensive income (loss) into cost of goods sold during the next 12 months . |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | 11. Fair Value Measurements Assets and liabilities measured at fair value on a recurring basis were as follows: Fair Value Measurements as of December 31, 2016 using: (in thousands) Level 1 Level 2 Level 3 Balance Sheet Location Assets Rabbi trust $ $ - $ - Other current assets Foreign exchange derivative instruments - - Other current assets Rabbi trust - - Other noncurrent assets Deferred compensation program assets - - Other noncurrent assets Foreign exchange derivative instruments - - Other noncurrent assets Total assets $ $ $ - Liabilities Foreign exchange derivative instruments $ - $ $ - Other current liabilities Deferred compensation program liabilities - - Other noncurrent liabilities Foreign exchange derivative instruments - - Other noncurrent liabilities Total liabilities $ $ $ - Fair Value Measurements as of December 31, 2015 using: (in thousands) Level 1 Level 2 Level 3 Balance Sheet Location Assets Rabbi trust $ $ - $ - Other current assets Foreign exchange derivative instruments - - Other current assets Rabbi trust - - Other noncurrent assets Deferred compensation program assets - - Other noncurrent assets Foreign exchange derivative instruments - - Other noncurrent assets Total assets $ $ $ - Liabilities Foreign exchange derivative instruments $ - $ $ - Other current liabilities Common stock warrants - - Other current liabilities Deferred compensation program liabilities - - Other noncurrent liabilities Foreign exchange derivative instruments - - Other noncurrent liabilities Total liabilities $ $ $ During the years ended December 31, 2016 and 2015, there were no transfers between Level 1, Level 2 and Level 3. Rabbi trust assets are used to fund certain retirement obligations of the Company. The assets underlying the Rabbi trust are equity and fixed income exchange‑traded funds. Deferred compensation program assets and liabilities represent a program where select employees can defer compensation until termination of employment. Effective July 29, 2011, this program was amended to cease all employee compensation deferrals and provided for the distribution of all previously deferred employee compensation. The program remains in effect with respect to the value attributable to the employer match contributed prior to July 29, 2011. Foreign exchange derivative instruments are forward contracts used to hedge currency fluctuations for transactions denominated in a foreign currency. The Company uses the mid‑price of foreign exchange forward rates as of the close of business on the valuation date to value each foreign exchange forward contract at each reporting period. The Company categorized the common stock warrants derivative liability as Level 3 as there were significant unobservable inputs used in the underlying valuations. The common stock warrants were valued using the contingent claims methodology. The change in Level 3 fair value measurements was as follows: December 31, December 31, (in thousands) 2016 2015 Balance at beginning of year $ $ Common stock warrant exercise Total losses included in earnings Balance at end of year $ - $ |
Pension and Other Postretiremen
Pension and Other Postretirement Benefits | 12 Months Ended |
Dec. 31, 2016 | |
Pension and Other Postretirement Benefits | |
Pension and Other Postretirement Benefits | 12. Pension and Other Postretirement Benefits The Company has various pension and post-employment plans which provide for payment of retirement benefits, mainly commencing between the ages of 50 and 65, and for payment of certain disability benefits. After meeting certain qualifications, an employee acquires a vested right to future benefits. The benefits payable under the plans are generally determined on the basis of an employee's length of service and/or earnings. Employer contributions to the plans are made, as necessary, to ensure legal funding requirements are satisfied. The Company may make contributions in excess of the legal funding requirements. The Company provides postretirement healthcare benefits to certain retirees. Many employees and retirees outside of the United States are covered by government sponsored healthcare programs. On November 13, 2015, the Company amended the US pension plan and supplemental executive retirement plan (“SERP”) by closing the plans to newly-hired full-time employees who had not yet satisfied the one year service requirement as of January 1, 2016, freezing the accrual of additional benefits on participants who have not attained age 50 with at least 10 years of vesting service, or whose age plus vesting service is less than 70, and shifting benefits for participants who have continued to accrue benefits from the pension plan to the SERP once a cap of $150,000 has been reached. The plans were re-measured in accordance with ASC 715 resulting in a curtailment gain of $2.4 million during the year ended December 31, 2015. The following tables present the change in benefit obligation, change in plan assets, and funded status for the Company's defined benefit and postretirement benefit plans for the years ended December 31, 2016 and 2015: Pension Pension Benefits Benefits Postretirement (in thousands) (Underfunded) (Overfunded) Benefits Change in projected benefit obligation (PBO) Benefit obligation at December 31, 2015 $ $ $ Service cost Interest cost Actuarial (gain) loss Settlements - - Plan amendments - - Participants’ contributions - - Benefit payments Foreign currency translation - Adjustment for movement from underfunded to overfunded - Projected benefit obligation at December 31, 2016 Accumulated benefit obligation (ABO) at December 31, 2016 Change in plan assets Fair value of plan assets at December 31, 2015 - Return on plan assets - Employer contributions Participants’ contributions - - Settlements - - Benefit payments Foreign currency translation - Fair value of plan assets at December 31, 2016 - Funded status (fair value of plan assets less PBO) $ $ $ Pension Pension Benefits Benefits Postretirement (in thousands) (Underfunded) (Overfunded) Benefits Change in projected benefit obligation (PBO) Benefit obligation at December 31, 2014 $ $ $ Service cost Interest cost Actuarial (gain) loss Curtailments - - Plan amendments - - Participants’ contributions - Benefit payments Foreign currency translation - Projected benefit obligation at December 31, 2015 Accumulated benefit obligation (ABO) at December 31, 2015 Change in plan assets Fair value of plan assets at December 31, 2014 - Return on plan assets - Employer contributions Participants’ contributions - Benefit payments Foreign currency translation - Fair value of plan assets at December 31, 2015 - Funded status (fair value of plan assets less PBO) $ $ $ The amount of pension and postretirement assets and liabilities recognized on the consolidated balance sheets were as follows: Pension Benefits Postretirement Benefits (in thousands) 2016 2015 2016 2015 Other noncurrent assets $ $ $ - $ - Accrued compensation and benefits Accrued pension and postretirement benefits Net amount recognized $ $ $ $ The amounts in accumulated other comprehensive income (loss) on the consolidated balance sheets that have not yet been recognized as components of net periodic benefit cost were as follows: Pension Benefits Postretirement Benefits Year ended December 31, Year ended December 31, (in thousands) 2016 2015 2014 2016 2015 2014 Net actuarial (gain) loss at beginning of year $ $ $ $ $ $ Current year actuarial (gain) loss Amortization of actuarial (gain) loss Curtailment impact - - - - - Settlement impact - - - - - Prior service cost (credit) - - - Amortization of prior service cost (credit) - - Foreign currency translation - - - Net actuarial (gain) loss at end of year $ $ $ $ $ $ The expected prior service cost (credit) that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in the next fiscal year is a cost of $0.2 million for the pension plans and a credit of $0.2 million for the postretirement plans. The expected actuarial (gain) loss that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in the next fiscal year is a loss of $0.2 million for the pension plans and a gain of $0.7 million for the postretirement plans. Components of net periodic benefit cost were as follows: Pension Benefits Postretirement Benefits Year ended December 31, (in thousands) 2016 2015 2016 2015 Components of net periodic benefit cost Service cost $ $ $ $ Interest cost Expected return on plan assets - - Curtailment Expense (Income) - - - Settlement Expense (Income) - - - Amortization of net (gain) loss Amortization of prior service cost (credit) Net periodic benefit cost $ $ $ $ The weighted average assumptions used to determine future benefit obligations benefit cost were as follows: Pension Benefits Postretirement Benefits 2016 2015 2016 2015 Weighted-average assumptions used to determine benefit obligations at December 31 Discount rate Rate of compensation increase N/A N/A The weighted average assumptions used to determine net periodic benefit cost were as follows: Pension Benefits Postretirement Benefits 2016 2015 2014 2016 2015 2014 Weighted-average assumptions used to determine net cost for years ended December 31 Discount rate Expected long-term rate of return on plan assets N/A N/A N/A Rate of compensation increase N/A N/A N/A The assumed healthcare cost trend rates used to determine benefit obligations as of December 31 and net cost for the year ended December 31 were as follows: Postretirement Benefits Medical and Prescription Drug 2016 2015 2014 Healthcare cost trend rate assumed for next year 5.50%/9.00% 5.75/10.00% Rate that the cost trend rate is assumed to decline Year that the rate reaches the ultimate trend rate Assumed healthcare cost trend rates have a significant effect on the amounts reported for the healthcare plans. A one-percentage-point change in assumed healthcare cost trend rates would have the following effects: 2016 2015 One-Percentage One-Percentage One-Percentage One-Percentage (in thousands) Point Increase Point Decrease Point Increase Point Decrease Effect on total of service and interest cost $ $ $ $ Effect on postretirement benefit obligation Plan Assets Pension assets by major category of plan assets and the type of fair value measurement as of December 31, 2016 were as follows: Pension Benefits – Plan Assets Quoted Prices in Significant Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (in thousands) Total (Level 1) (Level 2) (Level 3) Asset category Individual securities Fixed income $ $ - $ $ - Commingled funds Measured at net asset value - - - $ $ - $ $ - Pension assets by major category of plan assets and the type of fair value measurement as of December 31, 2015 were as follows: Pension Benefits – Plan Assets Quoted Prices in Significant Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (dollars in thousands) Total (Level 1) (Level 2) (Level 3) Asset category Individual securities Fixed income $ $ - $ $ - Commingled funds - Measured at net asset value - - - $ $ - $ $ - Pension assets include fixed income securities and commingled funds. Fixed income securities are valued at daily closing prices or institutional mid-evaluation prices provided by independent industry-recognized pricing sources. Commingled funds are not traded in active markets with quoted prices and as a result, are valued using the net asset values provided by the administrator of the fund. The investments underlying the net asset values are based on quoted prices traded in active markets. In accordance with ASU 2015-07, "Fair Value Measurement: Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent)" , the Company has excluded these investments from the fair value hierarchy. The Company's investment strategy is to optimize investment returns through a diversified portfolio of investments, taking into consideration underlying plan liabilities and asset volatility. Asset allocations are based on the underlying liability structure and local regulations. All retirement asset allocations are reviewed periodically to ensure the allocation meets the needs of the liability structure. Master trusts were established to hold the assets of the Company's U.S. defined benefit plans. During the years ended December 31, 2016 and 2015, the U.S. defined benefit plan asset allocation of these trusts targeted a return-seeking investment allocation of 64% to 76% and a liability-hedging investment allocation of 24% to 36%. Return-seeking investments include equities, real estate, high yield bonds and other instruments. Liability-hedging investments include assets such as corporate and government fixed income securities. The Company's future expected blended long-term rate of return on plan assets of 5.77% is determined based on long-term historical performance of plan assets, current asset allocation, and projected long-term rates of return. Estimated Contributions The Company expects to make pension contributions of approximately $20.0 million during 2017 based on current assumptions as of December 31, 2016. Estimated Future Retirement Benefit Payments The following retirement benefit payments, which reflect expected future service, are expected to be paid as follows: Pension Postretirement (in thousands) Benefits Benefits Year ending December 31, 2017 $ $ 2018 2019 2020 2021 Thereafter $ $ The estimated future retirement benefit payments noted above are estimates and could change significantly based on differences between actuarial assumptions and actual events and decisions related to lump sum distribution options that are available to participants in certain plans. International Plans Pension coverage for employees of the Company's international subsidiaries is provided, to the extent deemed appropriate, through separate defined benefit plans. The international pension plans are included in the tables above. As of December 31, 2016 and 2015, the defined benefit plans had total projected benefit obligations of $54.4 million and $53.5 million, respectively, and fair values of plan assets of $47.6 million and $45.4 million, respectively. The majority of the plan assets are invested in equity securities and corporate bonds. The pension expense related to these plans was $1.0 million, $0.9 million and $1.2 million for the years ended December 31, 2016, 2015 and 2014, respectively. The expected actuarial loss that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in the next fiscal year is $0.1 million. Defined Contribution Plans The Company sponsors a number of defined contribution plans. Contributions are determined under various formulas. Cash contributions related to these plans amounted to $13.0 million, $9.4 million and $8.8 million for the years ended December 31, 2016, 2015 and 2014, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Income Taxes | 13. Income Taxes The components of income before income taxes were as follows: Year ended December 31, (in thousands) 2016 2015 2014 Domestic operations $ $ $ Foreign operations Income before income taxes $ $ $ The following table represents a reconciliation of income taxes at the 35% federal statutory income tax rate to income tax expense as reported: Year ended December 31, (in thousands) 2016 2015 2014 Income tax expense computed at federal statutory income tax rate $ $ $ Foreign taxes, net of credits Net adjustments for uncertain tax positions State and local taxes Equity appreciation rights - Transaction costs - Indemnified taxes - Fair value adjustment for common stock warrants Valuation allowance Deferred charge Tax credits Miscellaneous other, net Income tax expense as reported $ $ $ Effective income tax rate % % % The Company's unrecognized tax benefits represent tax positions for which reserves have been established. The following table represents a reconciliation of the activity related to the unrecognized tax benefits, excluding accrued interest and penalties: (in thousands) 2016 2015 2014 Unrecognized tax benefits at beginning of year $ $ $ Gross additions - prior year tax positions - Gross additions - current year tax positions Gross reductions - prior year tax positions Impact of change in foreign exchange rates Unrecognized tax benefits at end of year $ $ $ As of December 31, 2016, 2015 and 2014, the unrecognized tax benefits of $11.3 million, $13.1 million and $8.8 million, respectively, would affect the Company's future effective tax rate if recognized. The Company does not anticipate a material change in unrecognized tax benefits within the next 12 months. As of December 31, 2016, 2015 and 2014, the Company had unrecognized tax benefits included in the amounts above of $5.9 million, $4.2 million and $3.7 million, respectively, related to periods prior to the Company's acquisition of Acushnet Company and as such, are indemnified by Beam. As of December 31, 2016, 2015 and 2014, the Company recognized a liability of $2.3 million, $1.9 million and $1.5 million, respectively for interest and penalties, of which $1.8 million, $1.6 million and $1.4 million is indemnified by Beam. Prior to the Company's acquisition of Acushnet Company, Acushnet Company or its subsidiaries filed certain combined tax returns with Beam. Those and other subsidiaries' income tax returns are periodically examined by various tax authorities. Beam is responsible for managing United States tax audits related to periods prior to July 29, 2011. Acushnet Company is obligated to support these audits and is responsible for managing all non-U.S. audits. As of December 31, 2016, the U.S. Internal Revenue Service’s examination of the 2010 and July 29, 2011 Acushnet Company federal income tax returns that were filed as part of the Beam consolidated federal income tax returns has concluded. The Company and certain subsidiaries have tax years that remain open and are subject to examination by tax authorities in the following major taxing jurisdictions: United States for years after July 31, 2011, Canada for years after 2011, Japan for years after 2011, Korea for years after 2010, and the United Kingdom for years after 2014. The Company files income tax returns on a combined, unitary, or stand-alone basis in multiple state and local jurisdictions, which generally have statute of limitations from three to four years. Various states and local income tax returns are currently in the process of examination. These examinations are unlikely to result in any significant changes to the amounts of unrecognized tax benefits on the consolidated balance sheet as of December 31, 2016 within the next 12 months. The Company's income tax expense includes tax expense of $2.2 million and $3.0 million for the years ended December 31, 2016 and 2015, respectively, and a tax benefit of $0.3 million for the year ended December 31, 2014 related to the tax obligations indemnified by Beam. There is an offsetting amount included in other (income) expense, net for the related adjustment to the Beam indemnification asset, resulting in no effect on net income. Income tax expense was as follows: Year ended December 31, (in thousands) 2016 2015 2014 Current expense (benefit) United States $ $ $ Foreign Current income tax expense (benefit) Deferred expense (benefit) United States Foreign Deferred income tax expense (benefit) Total income tax expense $ $ $ The components of net deferred tax assets (liabilities) were as follows: December 31, (in thousands) 2016 2015 Deferred tax assets Compensation and benefits $ $ Share-based compensation - Equity appreciation rights Pension and other postretirement benefits Inventories Accounts receivable Customer sales incentives Transaction costs Other reserves Interest Miscellaneous Net operating loss and other tax carryforwards Gross deferred tax assets Valuation allowance Total deferred tax assets Deferred tax liabilities Property, plant and equipment Identifiable intangible assets Foreign exchange derivative instruments Miscellaneous Total deferred tax liabilities Net deferred tax asset $ $ Under U.S. tax law and regulations, certain changes in the ownership of the Company’s shares can limit the annual utilization of tax attributes (tax loss and tax credit carryforwards) that were generated prior to such ownership changes. The annual limitation could affect the realizability of the Company’s deferred tax assets recorded in the financial statement for its tax credit carryforwards because the carryforward periods have a finite duration. The Initial Public Offering, and associated share transfers, resulted in significant changes in the composition of the ownership of the Company’s shares. Based on its analysis of the change of ownership tax rules in conjunction with the estimated amount and source of its future earnings and related tax profile, the Company believes its existing tax attributes will be utilized prior to their expiration. As of December 31, 2016 and 2015, the Company had state net operating loss (“NOL”) carryforwards of $94.2 million and $103.0 million, respectively. These NOL carryforwards expire between 2017 and 2035. As of December 31, 2016 and 2015, the Company had foreign tax credit carryforwards of $46.0 million and $37.9 million, respectively. These foreign tax credits will begin to expire in 2022. Changes in the valuation allowance for deferred tax assets were as follows: Year ended December 31, (in thousands) 2016 2015 2014 Valuation allowance at beginning of year $ $ $ Increases (decreases) recorded to income tax provision Valuation allowance at end of year $ $ $ The changes in the valuation allowance were related to the increase in the state deferred tax assets and deferred tax assets in the Company’s Hong Kong subsidiary that the Company has determined are not more-likely-than-not realizable. In determining the realizability of these assets, the Company considered numerous factors including historical profitability, the character and estimated future taxable income, prudent and feasible tax planning strategies, and the industry in which it operates. The utilization of the Company's net U.S. state and Hong Kong deferred tax assets is dependent on future taxable earnings, which cannot be projected with certainty at this time. The Company has determined that its undistributed earnings for most of its foreign subsidiaries are not permanently reinvested and has provided deferred income taxes in connection with the anticipated repatriation. |
Interest Expense and Other (Inc
Interest Expense and Other (Income) Expense, Net | 12 Months Ended |
Dec. 31, 2016 | |
Interest Expense and Other (Income) Expense, Net | |
Interest Expense and Other (Income) Expense, Net | 14. Interest Expense and Other (Income) Expense, Net The components of interest expense, net were as follows: Year ended December 31, (in thousands) 2016 2015 2014 Interest expense - related party $ $ $ Interest expense - third party Interest income -third party Total interest expense, net $ $ $ The components of other (income) expense, net were as follows: Year ended December 31, (in thousands) 2016 2015 2014 (Gain) loss on fair value of common stock warrants $ $ $ Indemnification (gains) losses Other gains Total other (income) expense, net $ $ $ |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2016 | |
Redeemable Convertible Preferred Stock [Abstract] | |
Redeemable Convertible Preferred Stock | 15. Redeemable Convertible Preferred Stock Prior to the initial public offering, the Company had outstanding 1,838,027 shares of $0.001 par value Series A preferred stock. Given that certain redemption features of the Series A preferred stock were not solely within the control of the Company, the Series A preferred stock was classified outside of stockholders' equity. On May 6, 2016, the Company and each of the holders of the Series A preferred stock entered into an agreement requiring the mandatory conversion of the shares of the Series A preferred stock into fully paid and nonassessable shares of the Company’s common stock. This agreement was amended on September 5, 2016 to provide for the automatic conversion of a portion of the outstanding Series A preferred stock in connection with the sale of shares of the Company’s common stock by the holders of the Series A preferred stock to Magnus. This automatic conversion of all outstanding Series A preferred stock occurred prior to the closing of the Company’s initial public offering. Upon conversion, all accrued but unpaid dividends on the shares of the Series A preferred stock were paid to each holder of the shares of the Series A preferred stock. Dividends The holders of the Series A preferred stock were entitled to receive cumulative dividends at a rate of 7.5% per year of the Original Issue Price (as defined below) when, as and if declared by the board of directors. The dividends accrued on a daily basis and were payable semi-annually. The Original Issue Price is $100 per share of Series A preferred stock. The Company declared and paid dividends to the holders of the Series A preferred stock of $17.3 million, $13.7 million and $13.8 million during the years ended December 31, 2016, 2015 and 2014, respectively. Cumulative undeclared dividends as of December 31, 2015 were $5.8 million. Reissuance Shares of Series A preferred stock that are redeemed or converted were canceled and retired and cannot be reissued by the Company. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2016 | |
Common Stock | |
Common Stock | 16. Common Stock As of December 31, 2016 and 2015, the Company's certificate of incorporation, as amended and restated, authorized the Company to issue 500,000,000 shares of $0.001 par value common stock and 78,193,494 shares of $0.001 par value common stock, respectively. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company's shareholders. Common shareholders are entitled to receive dividends whenever funds are legally available and when declared by the board of directors, subject to the prior rights of holders of all classes of stock outstanding. During the first quarter of 2017, the board of directors declared a dividend of $0.12 per share to shareholders on record as of April 5, 2017 and payable on April 19, 2017. As of December 31, 2016, the Company had reserved 6,525,000 shares of common stock for issuance under the Acushnet Holdings Corp. 2015 Omnibus Incentive Plan. As of December 31, 2015, the Company had reserved 28,827,531 shares of common stock for the conversion of outstanding shares of Series A preferred stock (Note 15), the exercise of outstanding stock options and number of shares remaining available for grant under the Company's 2011 Equity Incentive Plan (Note 17) and the exercise of common stock warrants (Note 9). |
Equity Incentive Plans
Equity Incentive Plans | 12 Months Ended |
Dec. 31, 2016 | |
Equity Incentive Plans | |
Equity Incentive Plans | 17. Equity Incentive Plans Restricted Stock and Restricted Stock Units On January 22, 2016, the Company’s board of directors adopted the Acushnet Holdings Corp. 2015 Omnibus Incentive Plan (“2015 Plan”) pursuant to which the Company may grant stock options, stock appreciation rights, restricted shares of common stock, restricted stock units, and other stock-based and cash-based awards to members of the board of directors, officers, employees, consultants and advisors of the Company. The 2015 Plan was initially administered by the Company’s board of directors and as of the Company’s initial public offering, is administered by the compensation committee (the board or compensation committee, as applicable) (the “Administrator”). The Administrator has the authority to establish the terms and conditions of any award issued or granted under the 2015 Plan. As of December 31, 2016, a total of 4,501,257 authorized shares of the Company’s common stock remain available for issuance under the 2015 Plan. A summary of the Company’s restricted and performance stock units as of December 31, 2016 and changes during the year then ended is presented below: Weighted- Number Average of Fair RSUs and PSUs Value Outstanding at December 31, 2015 - $ - Granted Outstanding at December 31, 2016 $ On June 15, 2016, the Company’s board of directors, in accordance with the 2015 Plan, approved a grant of multi‑year restricted stock units (“RSUs”) and performance stock units (“PSUs”) to certain key members of management. The initial fair value of the grant was estimated at $45.8 million. On August 9, 2016, the Company’s board of directors approved an additional grant of multi-year RSUs and PSUs to certain key members of management. The initial fair value of the grants was estimated at $3.8 million. On October 28, 2016, the Company’s board of directors approved an additional grant of multi-year RSUs and PSUs in connection with the IPO. The initial fair value of the grant was $0.6 million. Each of the grants were made 50% in RSUs and 50% in PSUs. One‑third of the RSUs vest on January 1 of 2017, 2018 and 2019, subject to the employee’s continued employment with the Company, and the PSUs cliff‑vest on December 31, 2018, subject to the employee’s continued employment with the Company and the Company’s level of achievement of the applicable cumulative Adjusted EBITDA performance metrics (as defined in the applicable award agreements) measured over the three-year performance period. Each PSU reflects the right to receive between 0% and 200% of the target number of shares based on the actual three-year cumulative Adjusted EBITDA. The determination of the target value gave consideration to executive performance, potential future contributions and peer group analysis. The RSUs and PSUs contain the right, but not the obligation, for the Company to repurchase up to 100% of the common stock that was issued in settlement of vested RSUs and PSUs, following the termination of the award holder. The repurchase right is at the sole discretion of the Company and can be exercised during the 60 day period following the first and second anniversary of any such termination of employment, provided that (i) no shares of common stock may be subject to repurchase unless they have been held by the award holder for at least six months and (ii) no repurchase right may be exercised upon or following the Company’s initial public offering. To date, the Company has not repurchased any shares issued in respect of restricted stock units or performance stock units and no longer has the right to make any such repurchase. As of December 31, 2016, no RSUs or PSUs had vested. Remaining unrecognized compensation expense for non‑vested RSUs and non‑vested PSUs granted was $16.7 million and $14.8 million, respectively, as of December 31, 2016 and is expected to be recognized over the related weighted average period of 2.0 years. The compensation expense recorded for the year ended December 31, 2016 related to the PSUs was based on the Company’s best estimate of the three-year cumulative Adjusted EBITDA forecast as of December 31, 2016. The Company will reassess the estimate of the three‑year cumulative Adjusted EBITDA forecast at the end of each reporting period. The Company recorded compensation expense for the RSUs and PSUs of $8.4 million and $6.1 million, respectively, during the year ended December 31, 2016. Stock Options Prior to 2013, the Company issued options to purchase 1,328,148 shares of common stock with a weighted-average exercise price of $9.90 per share to an executive officer as replacement awards in connection with a business combination. These awards were fully vested at the time of issuance. The following table summarizes the Company's stock option activity since December 31, 2014: Weighted- Weighted- Number Average Average Aggregate of Exercise Remaining Intrinsic Shares Price Contractual Term Value Outstanding at December 31, 2014 $ 1.9 years $ Exercised Outstanding at December 31, 2015 - $ - $ - During the years ended December 31, 2016, 2015 and 2014 the Company did not grant any stock options. As a result of a modification of the stock options, the Company recorded share-based compensation expense of $5.8 million and $2.0 million related to outstanding stock options during the years ended December 31, 2015 and 2014, respectively. Equity Appreciation Rights Effective January 1, 2012, the Company's board of directors adopted the equity appreciation rights plan (“EAR Plan”) in order to compensate certain key employees. Awards under the plan vested, subject to continued service by the award recipient, as follows: 40% of award based on the recipient's continued service with the Company through December 31, 2015, 30% of the award based on the Company's achievement of a specified adjusted EBITDA targets, and 30% of the award based on the Company's achievement of specified internal rates of return. Prior to the completion of a qualified public offering, vested awards under the EAR Plan were payable in cash upon the first to occur of (i) a qualifying termination, (ii) a sale of the Company or (iii) the expiration date of the award. In the event that the Company completed a qualified initial public offering, the Company could determine at its discretion to settle up to 50% of the amount payable under each award in shares of the Company's common stock. During 2012, the Company granted an aggregate of 8,901,000 EARs with a weighted-average strike price of $11.12 to certain key employees. There was no intrinsic value at the date of grant. Each EAR vested over a four year period as follows: 40% of award based on the recipient's continued service with the Company through December 31, 2015, 30% of the award based on the Company's achievement of a specified adjusted EBITDA target and 30% of the award based on the Company's achievement of specified internal rates of return. During 2015, the Company granted an aggregate of 279,000 EARs with a weighted-average strike price of $20.53 to certain key employees. There was no intrinsic value at the date of grant. Each EAR vested retroactively based on the effective date of January 1, 2012 and over the remaining term as follows: 40% of award based on the recipient's continued service with the Company through December 31, 2015, 30% of the award based on the Company's achievement of a specified adjusted EBITDA target and 30% of the award based on the Company's achievement of specified internal rates of return. The following table summarizes the Company's EAR activity since December 31, 2014: Weighted- Weighted- Number Average Average Aggregate of Exercise Remaining Intrinsic Awards Price Contractual Term Value Outstanding at December 31, 2014 $ 2 years $ Granted - Outstanding at December 31, 2015 1 year Settled - Outstanding at December 31, 2016 Vested at December 31, 2016 Awards exercisable at December 31, 2016 $ $ The EAR awards were re-measured using the intrinsic value method at each reporting period based on a projection of the Company's future common stock equivalent value. The common stock equivalent value was based on an estimate of the Company's EBITDA multiplied by a defined multiple, and divided by the expected number of common shares outstanding. The intrinsic value was the calculated common stock equivalent value per share compared to the per share exercise price. Effective October 17, 2014, the Company amended the EAR Plan such that (i) payments for vested awards resulting from a qualified termination of the award recipient are generally determined based on the Company's EBITDA for the fiscal year prior to such termination and (ii) payments for vested awards resulting from an expiration of the award are determined based on the greater of the Company's EBITDA for the year ended December 31, 2015, the Company's EBITDA for the year ending December 31, 2016, or the value of the Company's publicly-traded common stock for the three trading days following the initial public offering. For the years ended December 31, 2016, 2015 and 2014, the Company recorded share-based compensation expense of $6.0 million, $45.8 million and $50.7 million, respectively, related to outstanding EARs. The liability related to the EAR Plan was $151.5 million as of December 31, 2016 and was recorded within accrued compensation and benefits on the consolidated balance sheet. The liability related to the EAR Plan was $169.6 million as of December 31, 2015, of which $24.2 million was recorded within accrued compensation and benefits and $145.4 million was recorded within other noncurrent liabilities on the consolidated balance sheet. The allocation of share-based compensation expense attributed to RSUs, PSUs, EARs and stock options in the consolidated statement of operations was as follows: Year ended December 31, (in thousands) 2016 2015 2014 Cost of goods sold $ $ $ Selling, general and administrative expense Research and development Income before income taxes $ $ $ |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss), Net of Tax | 12 Months Ended |
Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax. | |
Accumulated Other Comprehensive Income (Loss), Net of Tax | 18. Accumulated Other Comprehensive Income (Loss), Net of Tax Accumulated other comprehensive income (loss), net of tax consists of foreign currency translation adjustments, unrealized gains and losses from foreign exchange derivative instruments designated as cash flow hedges, unrealized gains and losses from available‑for‑sale securities and pension and other postretirement adjustments. The components of and changes in accumulated other comprehensive income (loss), net of tax, were as follows: Foreign Gains (Losses) on Gains (Losses) Pension and Accumulated Currency Foreign Exchange on Available- Other Other Translation Derivative for-Sale Postretirement Comprehensive (in thousands) Adjustments Instruments Securities Adjustments Loss Balances at December 31, 2014 $ $ $ $ $ Other comprehensive income (loss) before reclassifications Amounts reclassified from accumulated other comprehensive loss - - Balances at December 31, 2015 $ $ $ $ $ Other comprehensive income (loss) before reclassifications Amounts reclassified from accumulated other comprehensive loss - - Balances at December 31,2016 $ $ $ $ $ |
Net Income per Common Share
Net Income per Common Share | 12 Months Ended |
Dec. 31, 2016 | |
Net Income per Common Share | |
Net Income per Common Share | 19. Net Income per Common Share The following is a computation of basic and diluted net income per common share attributable to Acushnet Holdings Corp. under the two‑class method: Year ended December 31, (in thousands, except share and per share amounts) 2016 2015 2014 Net income (loss) attributable to Acushnet Holdings Corp. $ $ $ Less: dividends earned by preferred shareholders Less: allocation of undistributed earnings to preferred shareholders - Net income (loss) attributable to common stockholders - basic Adjustments to net income for dilutive securities - - Net income (loss) attributable to common stockholders - diluted $ $ $ Weighted average number of common shares: Basic Diluted Net income (loss) per common share attributable to Acushnet Holdings Corp.: Basic $ $ $ Diluted $ $ $ The Company’s potential dilutive securities for the year ended December 31, 2016 include RSUs and PSUs. For the years ended December 31, 2015 and 2014 the Company’s potential dilutive securities include Series A preferred stock, stock options, warrants to purchase common stock and convertible notes. The following securities have been excluded from the calculation of diluted weighted‑average common shares outstanding as their impact was determined to be anti‑dilutive: Year ended December 31, 2016 2015 2014 Series A preferred stock Stock options - - Warrants to purchase common stock - Convertible notes - |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Information | |
Segment Information | 20. Segment Information The Company’s operating segments are based on how the Chief Operating Decision Maker (“CODM”) makes decisions about assessing performance and allocating resources. The Company has four reportable segments that are organized on the basis of product categories. These segments include Titleist golf balls, Titleist golf clubs, Titleist golf gear and FootJoy golf wear. The CODM primarily evaluates performance using segment operating income. Segment operating income includes directly attributable expenses and certain shared costs of corporate administration that are allocated to the reportable segments, but excludes interest expense, net; EAR expense; gains and losses on the fair value of common stock warrants and other non‑operating gains and losses as the Company does not allocate these to the reportable segments. The CODM does not evaluate a measure of assets when assessing performance. Results shown for the years ended December 31, 2016, 2015 and 2014 are not necessarily those which would be achieved if each segment was an unaffiliated business enterprise. There are no intersegment transactions. Information by reportable segment and a reconciliation to reported amounts are as follows: (in thousands) Year ended December 31, 2016 2015 2014 Net sales Titleist golf balls $ $ $ Titleist golf clubs Titleist golf gear FootJoy golf wear Other Total net sales $ $ $ Segment operating income Titleist golf balls $ $ $ Titleist golf clubs Titleist golf gear FootJoy golf wear Other Total segment operating income Reconciling items: Interest expense, net EAR expense Gain (loss) on fair value of common stock warrants Transaction fees Other Total income before income tax $ $ $ Depreciation and amortization Titleist golf balls $ $ $ Titleist golf clubs Titleist golf gear FootJoy golf wear Other Total depreciation and amortization $ $ $ Information as to the Company's operations in different geographical areas is presented below. Net sales are categorized based on the location in which the sale originates. Long-lived assets (property, plant and equipment) are categorized based on their location of domicile. Year ended December 31, (in thousands) 2016 2015 2014 Net sales United States $ $ $ EMEA (1) Japan Korea Rest of world Total net sales $ $ $ Year ended December 31, (in thousands) 2016 2015 2014 Long-lived assets United States $ $ $ EMEA Japan Korea Rest of world (2) Total long-lived assets $ $ $ (1) Europe, the Middle East and Africa (“EMEA”) (2) Includes manufacturing facilities in Thailand with long lived assets of $57.8 million, $60.5 million and $64.6 million as of December 31, 2016, 2015 and 2014, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | 21. Commitments and Contingencies 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, finished goods inventory, capital expenditures and endorsement arrangements with professional golfers. The reported amounts exclude those liabilities included in accounts payable or accrued liabilities on the consolidated balance sheet as of December 31, 2016. Purchase obligations by the Company as of December 31, 2016 were as follows: Payments Due by Period (in thousands) 2017 2018 2019 2020 2021 Thereafter Purchase obligations $ $ $ $ $ $ Lease Commitments The Company leases certain warehouses, distribution and office facilities, vehicles and office equipment under operating leases. The Company has an operating lease for certain vehicles that provides for a residual value guarantee. The lease has a noncancelable lease term of one year and may be renewed annually over the subsequent five years. The Company has the option to terminate the lease at the annual renewal date. Termination of the lease results in the sale of the vehicles and the determination of the residual value. The residual value is calculated by comparing the net proceeds of the vehicles sold to the depreciated value at the end of the renewal period. The Company is not responsible for any deficiency resulting from the net proceeds being less than 20% of the original cost in the first year and 20% of the depreciated value for all subsequent years. The Company believes that this guarantee will not have a significant impact on the consolidated financial statements. Future minimum rental payments under noncancelable operating leases as of December 31, 2016 were as follows: (in thousands) Year ending December 31, 2017 $ 2018 2019 2020 2021 Thereafter Total minimum rental payments $ Total rental expense for all operating leases amounted to $16.5 million, $15.8 million and $16.1 million for the years ended December 31, 2016, 2015 and 2014, respectively. Contingencies In connection with the Company’s acquisition of Acushnet Company, Beam indemnified the Company for certain tax related obligations that relate to periods during which Fortune Brands, Inc. owned Acushnet Company. As of December 31, 2016, the Company’s estimate of its receivable for these indemnifications is $9.7 million, of which $1.4 million is recorded in other current assets and $8.3 million is recorded in other noncurrent assets on the consolidated balance sheet. Litigation Beam A dispute has arisen between Acushnet Company and Beam with respect to approximately $16.6 million of value-added tax (“VAT”) trade receivables. These receivables were reflected on Acushnet Company’s consolidated balance sheet at the time of the Company’s acquisition of Acushnet Company. Acushnet Company believes that these VAT trade receivables are assets of the Company; Beam claims that these are tax credits or refunds from the period prior to the acquisition of Acushnet Company which are payable to Beam, pursuant to the terms of the Stock Purchase Agreement that covers the sale of the stock of Acushnet Company. Beam has withheld payments in this amount which the Company believes are payable to Acushnet Company in reimbursement of certain other tax liabilities which existed prior to the acquisition of Acushnet Company. On March 27, 2012, Acushnet Company filed a complaint seeking reimbursement of these funds in the Commonwealth of Massachusetts Superior Court Department, Business Litigation Section. Each party filed Motions for Summary Judgment, which motions were denied by the Court on July 29, 2015. Trial was conducted in early June, 2016. On June 21, 2016, the Court ruled that Beam had a contractual right to the VAT trade receivables actually collected from Acushnet Company's customers prior to the closing of the Company's acquisition of Acushnet Company, but that Beam should pay $972,288 plus pre-judgment interest of $494,859 to the Company to compensate for amounts Beam withheld, but which were not collected from Acushnet Company's customers. The Company recorded the total value as other (income) expense, net on the consolidated statement of operations for the year ended December 31, 2016. Acushnet believes that the Court erred in its ruling and filed a Notice of Appeal on July 20, 2016. Related briefing is expected to close on April 14, 2017. Other Litigation In addition to the lawsuit described above, the Company and its subsidiaries are defendants in lawsuits associated with the normal conduct of their businesses and operations. It is not possible to predict the outcome of the pending actions, and, as with any litigation, it is possible that some of these actions could be decided unfavorably. Consequently, the Company 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 and has not recorded a liability related to potential losses. The Company believes that there are meritorious defenses to these actions and that these actions will not have a material adverse effect on the consolidated financial statements. |
Unaudited Quarterly Financial D
Unaudited Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2016 | |
Unaudited Quarterly Financial Data | |
Unaudited Quarterly Financial Data | 22. Unaudited Quarterly Financial Data The tables below summarize quarterly results for fiscal 2016 and 2015: Quarter ended (unaudited) Year ended (in thousands) December 31, September 30, June 30, March 31, December 31, 2016 Net sales $ $ $ $ $ Gross Profit Income from operations Net Income (loss) Net income (loss) attributable to Acushnet Holdings Corp. Net income (loss) per common share attributable to Acushnet Holdings Corp.: Basic $ $ $ $ $ Diluted $ $ $ $ $ Quarter ended (unaudited) Year ended (in thousands) December 31, September 30, June 30, March 31, December 31, 2015 Net sales $ $ $ $ $ Gross Profit Income from operations Net Income (loss) Net income (loss) attributable to Acushnet Holdings Corp. Net income (loss) per common share attributable to Acushnet Holdings Corp.: Basic $ $ $ $ $ Diluted $ $ $ $ $ Quarterly disclosed amounts may not sum to annual amounts due to rounding. The Company has revised its previously issued first, second and third quarter of 2016 unaudited consolidated financial information to correct for immaterial adjustments related to the treatment of commissions paid on certain retail sales in Korea and the timing of revenue recognition on shipments of trial golf clubs. The revision related to the treatment of commissions paid on certain retail sales in Korea resulted in an increase in net sales and a corresponding increase in selling, general and administrative expense of $2.0 million in the first quarter of 2016, an increase in net sales and a corresponding increase in selling, general and administrative expense of $4.7 million in the second quarter of 2016 and an increase in net sales and a corresponding increase in selling, general and administrative expense of $3.9 million in the third quarter of 2016. The revision related to the timing of revenue recognition on shipments of trial golf clubs resulted in a decrease in net sales of $4.8 million, a decrease in cost of goods sold of $3.3 million, a decrease in gross profit of $1.5 million, a decrease in income tax expense of $0.5 million and a decrease in net income of $1.0 million in the first quarter of 2016; a decrease in net sales of $1.6 million, a decrease in cost of goods sold of $1.1 million, a decrease in gross profit of $0.5 million, a decrease in income tax expense of $0.2 million and a decrease in net income of $0.3 million in the second quarter of 2016; and an increase in net sales of $3.0 million, an increase in cost of goods sold of $2.0 million, an increase in gross profit of $1.0 million, an increase in income tax expense of $0.3 million and an increase in net income of $0.7 million in the third quarter of 2016. In accordance with Staff Accounting Bulletin (SAB) No. 99, Materiality , and SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements , the Company assessed the materiality of the adjustments and concluded these items were not material to any previously issued annual or interim financial statements. However, to facilitate comparisons among periods, the Company has decided to revise its previously issued first, second and third quarter 2016 unaudited consolidated financial information presented within this footnote for the adjustments and those revisions will be reflected in the Company’s future filings. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events | |
Subsequent Events | 23. Subsequent Events Dividend Declaration On March 22, 2017, the board of directors declared a dividend of $0.12 per share to shareholders on record as of April 5, 2017, payable on April 19, 2017. EAR Payment During the first quarter of 2017, the outstanding EAR liability of $151.5 million was settled in full by a cash payment to participants. The delayed draw term loan A facility was drawn upon during the first quarter of 2017 to partially fund the EAR payout. |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) and include the accounts of the Company, its wholly- owned subsidiaries and a VIE in which the Company is the primary beneficiary. All intercompany balances and transactions have been eliminated in consolidation. |
Acquisition | Acquisition Acushnet Holdings Corp. was incorporated in Delaware on May 9, 2011 as Alexandria Holdings Corp., an entity owned by Fila Korea Co., Ltd. (“Fila Korea”), a leading sport and leisure apparel and footwear company which is a public company listed on the Korea Exchange, and a consortium of investors (the “Financial Investors”) led by Mirae Asset Global Investments, a global investment management firm. Acushnet Holdings Corp. acquired Acushnet Company, our operating subsidiary, from Beam Suntory, Inc. (at the time known as Fortune Brands, Inc.) (“Beam”) on July 29, 2011 (the “Acquisition”). |
Stock Split | Stock Split On October 14, 2016, the Company effected a nine-for-one stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for its 7.5% convertible notes due 2021 (“convertible notes”), Series A redeemable convertible preferred stock (“Series A preferred stock”), and the exercise price for the common stock warrants and the strike price of stock-based compensation. Accordingly, all share and per share amounts for all periods presented in the accompanying financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this stock split and adjustment of the common stock warrant exercise price, and convertible notes and redeemable convertible preferred stock conversion ratios. |
Initial Public Offering | Initial Public Offering On November 2, 2016, the Company completed an initial public offering of 19,333,333 shares of its common stock sold by selling stockholders at a public offering price of $17.00 per share. Upon the closing of the Company’s initial public offering, all remaining outstanding shares of the Company’s Series A preferred stock were automatically converted into 11,556,495 shares of the Company’s common stock and the Company’s convertible notes were automatically converted into 22,791,852 shares of the Company’s common stock. The underwriters of the Company’s initial public offering exercised their over-allotment option to purchase an additional 2,899,999 shares of common stock from the selling stockholders at the initial public offering price of $17.00 per share. |
Automatic Conversion | Automatic Conversion Following the pricing of the initial public offering, Magnus Holdings Co., Ltd. (“Magnus”), a wholly-owned subsidiary of Fila Korea, purchased from the Financial Investors on a pro rata basis 14,818,720 shares of the Company’s common stock, resulting in Magnus holding a controlling ownership interest of 53.1% of the Company’s outstanding common stock. The 14,818,720 shares of the Company’s common stock sold by the Financial Investors were received upon the automatic conversion of certain of the Company’s outstanding convertible notes (Note 9) and Series A preferred stock (Note 15). The remaining outstanding convertible notes and Series A preferred stock automatically converted into shares of the Company’s common stock prior to the closing of the initial public offering. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and judgments that affect reported amounts of assets, liabilities, stockholders’ equity, net sales and expenses, and the disclosure of contingent assets and liabilities in its consolidated financial statements. Actual results could differ from those estimates. |
Variable Interest Entities | Variable Interest Entities VIEs are entities that, by design, either (i) lack sufficient equity to permit the entity to finance its activities independently, or (ii) have equity holders that do not have the power to direct the activities of the entity that most significantly impact its economic performance, the obligation to absorb the entity’s expected losses, or the right to receive the entity’s expected residual returns. The Company consolidates a VIE when it is the primary beneficiary, which is the party that has both (i) the power to direct the activities that most significantly impact the VIE’s economic performance and (ii) through its interests in the VIE, the obligation to absorb expected losses or the right to receive expected benefits from the VIE that could potentially be significant to the VIE. The Company consolidates the accounts of Acushnet Lionscore Limited, a VIE which is 40% owned by the Company. The sole purpose of the VIE is to manufacture the Company’s golf footwear and as such, the Company is deemed to be the primary beneficiary as defined by Accounting Standards Codification (“ASC”) 810. The Company has presented separately on its consolidated balance sheets, to the extent material, the assets of its consolidated VIE that can only be used to settle specific obligations of its consolidated VIE and the liabilities of its consolidated VIE for which creditors do not have recourse to its general credit. The general creditors of the VIE do not have recourse to the Company. Certain directors of the noncontrolling entities have guaranteed the credit lines of the VIE, for which there were no outstanding borrowings as of December 31, 2016 and 2015. In addition, pursuant to the terms of the agreement governing the VIE, the Company is not required to provide financial support to the VIE. |
Cash and Restricted Cash | Cash and Restricted Cash Cash held in Company checking accounts is included in cash. Book overdrafts not subject to offset with other accounts with the same financial institution are classified as accounts payable. As of December 31, 2016 and 2015, book overdrafts in the amount of $3.6 million and $1.7 million, respectively, were recorded in accounts payable. The Company classifies as restricted certain cash that is not available for use in its operations. Restricted cash is primarily related to a standby letter of credit used for insurance purposes. |
Accounts Receivable | Accounts Receivable Accounts receivable are presented net of an allowance for doubtful accounts. The allowance for doubtful accounts is assessed each reporting period by the Company for estimated losses resulting from the inability or unwillingness of its customers to make required payments. The allowance is based on various factors, including credit risk assessments, length of time the receivables are past due, historical experience, customer specific information available to the Company and existing economic conditions. |
Allowance for sales returns | Allowance for Sales Returns A sales returns allowance is recorded for anticipated returns through a reduction of sales and cost of goods sold in the period that the related sales are recorded. Sales returns are estimated based upon historical rates of product returns, current economic trends and changes in customer demands as well as specific identification of outstanding returns. In accordance with this policy, the allowance for sales returns was $9.8 million and $5.2 million as of December 31, 2016 and 2015, respectively. |
Concentration of Credit Risk and of Significant Customers | Concentration of Credit Risk and of Significant Customers Financial instruments that potentially expose the Company to concentration of credit risk are cash and accounts receivable. Substantially all of the Company's cash deposits are maintained at large, creditworthy financial institutions. The Company's deposits, at times, may exceed federally insured limits. The Company does not believe that it is subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. As part of its ongoing procedures, the Company monitors its concentration of deposits with various financial institutions in order to avoid any undue exposure. As of December 31, 2016 and 2015, the Company had $75.6 million and $54.1 million, respectively, in banks located outside the United States. The risk with respect to the Company's accounts receivable is managed by the Company through its policy of monitoring the creditworthiness of its customers to which it grants credit terms in the normal course of business. |
Inventories | Inventories Inventories are valued at the lower of cost and net realizable value. Cost is determined using the first-in, first-out inventory method. The inventory balance, which includes material, labor and manufacturing overhead costs, is recorded net of an allowance for obsolete or slow moving inventory. The Company's allowance for obsolete or slow moving inventory contains estimates regarding uncertainties. Such estimates are updated each reporting period and require the Company to make assumptions and to apply judgment regarding a number of factors, including market conditions, selling environment, historical results and current inventory trends. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost less accumulated depreciation and amortization. Depreciation is provided on a straight-line basis over the estimated useful lives of the assets. Gains or losses resulting from disposals are included in income from operations. Betterments and renewals, which improve and extend the life of an asset, are capitalized. Maintenance and repair costs are expensed as incurred. Estimated useful lives of property, plant and equipment asset categories were as follows: Buildings and improvements – 40 years Machinery and equipment – 10 years Furniture, fixtures and computer hardware – 10 years Computer software – 10 years Leasehold and tenant improvements are amortized over the shorter of the lease term or the estimated useful lives of the assets. Certain costs incurred in connection with the development of the Company's internal-use software are capitalized. Software development costs are primarily related to the Company's enterprise resource planning system. Costs incurred in the preliminary stages of development are expensed as incurred. Internal and external costs incurred in the application development phase, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of all substantial testing performed to ensure the product is ready for its intended use. Costs such as maintenance and training are expensed as incurred. The capitalized internal-use software costs are included in property, plant and equipment and once the software is placed into service are amortized over the estimated useful life which ranges from three to ten years. |
Long-Lived Assets | Long-Lived Assets A long-lived asset (including amortizable identifiable intangible assets) or asset group is tested for recoverability whenever events or changes in circumstances indicate that its carrying amount may not be recoverable. When such events occur, the Company compares the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group to the carrying amount of the long-lived asset or asset group. The cash flows are based on the best estimate of future cash flows derived from the most recent business projections. If the carrying value exceeds the sum of the undiscounted cash flows, an impairment loss is recognized based on the excess of the asset's or asset group's carrying value over its fair value. Fair value is determined based on discounted expected future cash flows on a market participant basis. Any impairment charge would be recognized within operating expenses as a selling, general and administrative expense. |
Goodwill and Indefinite-Lived Intangible Assets | Goodwill and Indefinite-Lived Intangible Assets Goodwill and indefinite-lived intangible assets are not amortized but instead are measured for impairment at least annually, or more frequently when events or changes in circumstances indicate that the carrying amount of the asset may be impaired. Goodwill is assigned to reporting units for purposes of impairment testing. A reporting unit may be the same as an operating segment or one level below an operating segment. For purposes of assessing potential impairment, the Company may assess qualitative factors to determine if it is more likely than not (i.e., a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount, including goodwill. If the Company determines based on the qualitative factors that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, no further testing is necessary. If, however, the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company performs the first step of a two-step quantitative goodwill impairment test. In the first step, the Company compares the fair value of the reporting unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is considered not impaired and the Company is not required to perform further testing. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, then the Company must perform the second step of the impairment test in order to determine the implied fair value of the reporting unit's goodwill. If the carrying value of a reporting unit's goodwill exceeds its implied fair value, then the Company would record an impairment loss equal to the difference. The fair value of the reporting units is determined using the income approach. The income approach uses a discounted cash flow analysis which involves applying appropriate discount rates to estimated future cash flows based on forecasts of sales, costs and capital requirements. The Company performs its annual impairment tests in the fourth quarter of each fiscal year. As of December 31, 2016, no impairment of goodwill was identified and the fair value of each reporting unit substantially exceeded its carrying value. Purchased intangible assets other than goodwill are amortized over their useful lives unless those lives are determined to be indefinite. The Company's trademarks have been assigned an indefinite life as the Company currently anticipates that these trademarks will contribute to its cash flows indefinitely. Trademarks are reviewed for impairment annually and may be reviewed more frequently if indicators of impairment are present. Impairment losses are recorded to the extent that the carrying value of the indefinite-lived intangible asset exceeds its fair value. The Company measures the fair value of its trademarks using the relief-from-royalty method, which estimates the present value of royalty income that could be hypothetically earned by licensing the brand name to a third party over the remaining useful life. The Company continually evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived assets may warrant revision or that the remaining balance may not be recoverable. These factors may include a significant deterioration of operating results, changes in business plans, or changes in anticipated cash flows. When factors indicate that an asset should be evaluated for possible impairment, the Company reviews long-lived assets to assess recoverability from future operations using undiscounted cash flows. If future undiscounted cash flows are less than the carrying value, an impairment is recognized in earnings to the extent that the carrying value exceeds fair value. |
Deferred Financing Costs | Deferred Financing Costs The Company defers costs directly associated with acquiring third-party financing. These deferred costs are amortized as interest expense over the term of the related indebtedness. Deferred financing costs associated with the revolving credit facilities are included in other current and noncurrent asset and deferred financing costs associated with all other indebtedness are netted against debt on the consolidated balance sheets. |
Fair Value Measurements | Fair Value Measurements Certain assets and liabilities are carried at fair value under U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: · Level 1—Quoted prices in active markets for identical assets or liabilities. · Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. · Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. Prior to the final exercise of the Company's outstanding warrants to purchase the Company’s common stock, the common stock warrants liability was carried at fair value. The Company’s foreign exchange derivative assets and liabilities are carried at fair value determined according to the fair value hierarchy described above (Note 11). The carrying value of accounts receivable, accounts payable and accrued expenses approximates fair value due to the short-term nature of these assets and liabilities. As permitted under ASC 820, the Company adopted the fair value measurement disclosures for nonfinancial assets and liabilities, such as goodwill and indefinite-lived intangible assets. In some instances where a market price is available, but the instrument is in an inactive or over-the-counter market, the Company consistently applies the dealer (market maker) pricing estimate and uses a midpoint approach on bid and ask prices from financial institutions to determine the reasonableness of these estimates. Assets and liabilities subject to this fair value valuation approach are typically classified as Level 2. |
Pension and Other Postretirement Benefit Plans | Pension and Other Postretirement Benefit Plans The Company provides U.S. and foreign defined benefit and defined contribution plans to eligible employees and postretirement benefits to certain retirees, including pensions, postretirement healthcare benefits and other postretirement benefits. Plan assets and obligations are measured using various actuarial assumptions, such as discount rates, rate of compensation increase, mortality rates, turnover rates and health care cost trend rates, as determined at each year end measurement date. The measurement of net periodic benefit cost is based on various actuarial assumptions, including discount rates, expected return on plan assets and rate of compensation increase, which are determined as of the prior year measurement date. The determination of the discount rate is generally based on an index created from a hypothetical bond portfolio consisting of high-quality fixed income securities with durations that match the timing of expected benefit payments. The expected return on plan assets is determined based on several factors, including adjusted historical returns, historical risk premiums for various asset classes and target asset allocations within the portfolio. Adjustments made to the historical returns are based on recent return experience in the equity and fixed income markets and the belief that deviations from historical returns are likely over the relevant investment horizon. Actual cost is also dependent on various other factors related to the employees covered by these plans. The effects of actuarial deviations from assumptions are generally accumulated and, if over a specified corridor, amortized over the remaining service period of the employees. The cost or benefit of plan changes, such as increasing or decreasing benefits for prior employee service (prior service cost), is deferred and included in expense on a straight-line basis over the average remaining service period of the related employees. The Company's actuarial assumptions are reviewed on an annual basis and modified when appropriate. To calculate the U.S. pension and postretirement benefit plan expense in 2017, the Company will apply the individual spot rates along the yield curve that correspond with the timing of each future cash outflow for the benefit payments in order to calculate interest cost and service cost. Prior to 2017, the service cost and interest cost components were determined using a single weighted-average discount rate. The change does not affect the measurement of the total benefit plan obligations, as the change in the service cost and interest cost offsets in the actuarial gains and losses recorded in other comprehensive income. The Company changed to the new method to provide a more precise measure of service and interest cost by improving the correlation between the projected benefit cash flows and the discrete spot yield curve rates. The Company accounted for this change as a change in estimate prospectively beginning in 2017. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between consolidated financial statement carrying amount and tax basis and using enacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance is recorded to reduce deferred income tax assets when it is more-likely-than-not that such assets will not be realized. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company provides deferred income taxes on undistributed earnings of foreign subsidiaries that it does not expect to permanently reinvest. The Company records liabilities for uncertain income tax positions based on the two step process. The first step is recognition, where an individual tax position is evaluated as to whether it has a likelihood of greater than 50% of being sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation processes. For tax positions that are currently estimated to have a less than 50% likelihood of being sustained, no tax benefit is recorded. For tax positions that have met the recognition threshold in the first step, the Company performs the second step of measuring the benefit to be recorded. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized on ultimate settlement. The actual benefits ultimately realized may differ from the estimates. In future periods, changes in facts, circumstances, and new information may require the Company to change the recognition and measurement estimates with regard to individual tax positions. Changes in recognition and measurement estimates are recorded in income tax expense and liability in the period in which such changes occur. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in the provision for income taxes on the consolidated statements of income. Beam has indemnified certain tax obligations that relate to periods during which Fortune Brands, Inc. owned Acushnet Company (Note 13). These estimated tax obligations are recorded in accrued taxes and other noncurrent liabilities, and the related indemnification receivable is recorded in other current and noncurrent assets on the consolidated balance sheet. Any changes in the value of these specifically identified tax obligations are recorded in the period identified in income tax expense and the related change in the indemnification asset is recorded in other (income) expense, net on the consolidated statement of operations. |
Revenue Recognition | Revenue Recognition Revenue is recognized upon shipment or upon receipt by the customer depending on the country of the sale and the agreement with the customer, net of allowances for discounts, sales returns, customer sales incentives and cooperative advertising. The criteria for recognition of revenue is met when persuasive evidence that an arrangement exists, both title and risk of loss have passed to the customer, the price is fixed or determinable and collectability is reasonably assured. In circumstances where either title or risk of loss pass upon receipt by the customer, revenue is deferred until such event occurs based on an estimate of the shipping time from the Company's distribution centers to the customer using historical and expected delivery times by geographic location. Amounts billed to customers for shipping and handling are included in net sales. |
Customer Sales Incentives | Customer Sales Incentives The Company offers customer sales incentives, including off-invoice discounts and sales-based rebate programs, to its customers which are accounted for as a reduction in sales at the time the revenue is recognized. Sales-based rebates are estimated using assumptions related to the percentage of customers who will achieve qualifying purchase goals and the level of achievement. These assumptions are based on historical experience, current year program design, current marketplace conditions and sales forecasts, including considerations of product life cycles. |
Cost of Goods Sold | Cost of Goods Sold Cost of goods sold includes all costs to make products saleable, such as inbound freight, purchasing and receiving costs, inspection costs and transfer costs. In addition, all depreciation expense associated with assets used to manufacture products and make them saleable is included in cost of goods sold. |
Product Warranty | Product Warranty The Company has defined warranties ranging from one to two years. Products covered by the defined warranty policies include all Titleist golf products, FootJoy golf shoes, and FootJoy golf outerwear. These product warranties generally obligate the Company to pay for the cost of replacement products, including the cost of shipping replacement products to its customers. The estimated cost of satisfying future warranty claims is accrued at the time the sale is recorded. In estimating future warranty obligations, the Company considers various factors, including its warranty policies and practices, the historical frequency of claims, and the cost to replace or repair products under warranty. |
Advertising and Promotion | Advertising and Promotion Advertising and promotional costs are included in selling, general and administrative expense on the consolidated statement of operations and include product endorsement arrangements with members of the various professional golf tours, media placement and production costs (television, print and internet), tour support expenses and point-of-sale materials. Advertising production costs are expensed as incurred. Media placement costs are expensed in the month the advertising appears. Product endorsement arrangements are expensed based upon the specific provisions of player contracts. Advertising and promotional expense was $196.0 million, $203.3 million and $201.6 million for the years ended December 31, 2016, 2015 and 2014, respectively. |
Selling | Selling Selling expenses including field sales, sales administration and shipping and handling costs are included in selling, general and administrative expense on the consolidated statement of operations. Shipping and handling costs included in selling expenses were $32.4 million, $32.6 million and $30.5 million for the years ended December 31, 2016, 2015 and 2014, respectively. |
Research and Development | Research and Development Research and development expenses include product development, product improvement, product engineering, and process improvement costs and are expensed as incurred. |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions Assets and liabilities denominated in foreign currency are translated into U.S. dollars at the actual rates of exchange at the balance sheet date. Revenues and expenses are translated at the average rates of exchange for the reporting period. The related translation adjustments are recorded as a component of accumulated other comprehensive income (loss). Transactions denominated in a currency other than the functional currency are re-measured into functional currency with resulting transaction gains or losses recorded as selling, general and administrative expense on the consolidated statement of operations. Transaction gain (loss) included in selling, general and administrative expense was a gain of $1.2 million, a loss of $4.7 million and a loss of $4.2 million for the years ended December 31, 2016, 2015 and 2014, respectively. |
Derivative Financial Instruments | Derivative Financial Instruments All derivatives are recognized as either assets or liabilities on the consolidated balance sheet and measurement of these instruments is at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings in the same period. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded as a component of accumulated other comprehensive income (loss) and are recognized in the consolidated statement of operations when the hedged item affects earnings. Any portion of the change in fair value that is determined to be ineffective is immediately recognized in earnings as cost of goods sold. |
Valuation of Common Stock Warrants | Valuation of Common Stock Warrants Prior to July 2016, the Company had outstanding warrants to purchase its common stock, which the Company classified as a liability on its consolidated balance sheet as the warrants were free-standing financial instruments that could result in the issuance of a variable number of the Company's common shares. The warrants were initially recorded at fair value on the date of grant, and were subsequently re-measured to fair value at each reporting date. The change in the fair value of the common stock warrants was recognized as a component of other (income) expense, net on the consolidated statement of operations. The Company performed a two-step process to determine the fair value of the warrants to purchase common stock. The first step was to estimate the aggregate fair value of the Company (Business Enterprise Value, or BEV), which was then allocated to each element of the Company's capital structure under the contingent claims methodology. In determining the fair value of its BEV, the Company used a combination of the income approach and the market approach to estimate its aggregate BEV at each reporting date. The income approach uses a discounted cash flow analysis, which involves applying appropriate discount rates to estimated future cash flows based on forecasts of sales, costs and capital requirements. The market approach employs the guideline public company method, which uses the fair value of a peer group of publicly-traded companies. In the second step, the Company's estimated aggregate fair value was allocated to shares of common stock, shares of redeemable convertible preferred stock, convertible notes, bonds, employee stock options and warrants to purchase common stock using the contingent claims methodology. Under this model, each component of the Company's capital structure is treated as a call option with unique claim on the Company's assets as determined by the characteristics of each security's class. The resulting option claims are then valued using an option pricing model. The Company historically had been a private company and lacked company-specific historical and implied volatility information of its stock. Therefore, it estimated its expected stock volatility based on the historical volatility of publicly-traded peer companies for a term equal to the remaining expected term of the warrants. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining time to purchase for each of the tranches of warrants. |
Share-based Compensation | Share-based Compensation The Company measures stock‑based awards granted to employees based on the fair value on the date of the grant and recognizes the corresponding compensation expense of those awards, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award. The Company issues stock‑based awards to employees with service‑based vesting conditions and performance‑based vesting conditions. Compensation expense for awards with only service‑based vesting conditions is recorded using the straight‑line method. Compensation expense for awards with service‑based and performance‑based vesting conditions is recorded on a straight‑line method once the Company has determined that the likelihood of meeting the performance conditions is probable, which requires management judgment. The Company recognizes compensation expense for only the portion of awards that are expected to vest. In developing a forfeiture rate estimate, the Company has considered its historical experience to estimate pre‑vesting forfeitures for service‑based and performance‑based awards. The impact of a forfeiture rate adjustment will be recognized in full in the period of adjustment, and if the actual forfeiture rate is materially different from the Company’s estimate, the Company may be required to record adjustments to stock‑based compensation expense in future periods. |
Equity Appreciation Rights Plan | Equity Appreciation Rights Plan Awards granted under the Company's Equity Appreciation Rights (“EAR”) plan are accounted for as liability-classified awards because it is a cash settled plan. The Company elected the intrinsic value method to measure its liability-classified awards and amortizes share-based compensation expense for those awards expected to vest on a straight-line basis over the requisite service period. The Company re-measures the intrinsic value of the awards at the end of each reporting period. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of net income and other comprehensive income (loss). Other comprehensive income (loss) consists of foreign currency translation adjustments, unrealized gains and losses from derivative instruments designated as cash flow hedges, unrealized gains and losses from available-for-sale securities and pension and other postretirement adjustments. |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share Prior to the conversion of the redeemable convertible preferred shares to common stock in connection with the Company’s initial public offering, the Company applied the two-class method to calculate its basic and diluted net income (loss) per common share attributable to Acushnet Holdings Corp., as its redeemable convertible preferred shares were participating securities. The two-class method is an earnings allocation formula that treats a participating security as having rights to earnings that otherwise would have been available to common stockholders. Net income (loss) per common share available to Acushnet Holdings Corp. was determined by allocating undistributed earnings between holders of common shares and redeemable convertible preferred shares, based on the participation rights of the preferred shares. Basic net income (loss) per share attributable to Acushnet Holdings Corp. was computed by dividing the net income (loss) available to Acushnet Holdings Corp. by the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per common share attributable to Acushnet Holdings Corp. was computed by dividing the net income (loss) available to Acushnet Holdings Corp. after giving effect to the diluted securities by the weighted-average number of dilutive shares outstanding during the period. Diluted net income (loss) per common share attributable to Acushnet Holdings Corp. for the year ended December 31, 2016 reflects the potential dilution that would occur if the restricted stock units were converted into common shares. The restricted stock units are included as potential dilutive securities to the extent they are dilutive under the treasury stock method for the applicable periods. Diluted net income (loss) per common share attributable to Acushnet Holdings Corp. for the years ended December 31, 2015 and 2014 reflects the potential dilution that would occur if common stock warrants, convertible notes, redeemable convertible preferred stock, stock options or any other dilutive equity instruments were exercised or converted into common shares. The common stock warrants and stock options are included as potential dilutive securities to the extent they are dilutive under the treasury stock method for the applicable periods. The convertible notes and redeemable convertible preferred stock are included as potential dilutive securities to the extent they are dilutive under the if-converted method for the applicable periods. |
Allowance for Doubtful Accoun32
Allowance for Doubtful Accounts (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Allowance for Doubtful Accounts | |
Schedule of change to the allowance for doubtful accounts | (in thousands) 2016 2015 2014 Balance at beginning of year $ $ $ Bad debt expense Amount of receivables written off Foreign currency translation Balance at end of year $ $ $ |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Inventories | |
Schedule of inventory | (in thousands) December 31, December 31, 2016 2015 Raw materials and supplies $ $ Work-in-process Finished goods Inventories $ $ |
Schedule of change to the inventory reserve | (in thousands) 2016 2015 2014 Balance at beginning of year $ $ $ Charged to costs and expenses Deduction for reserved inventory disposed or sold Foreign currency translation Balance at end of year $ $ $ |
Property, Plant and Equipment34
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment, Net | |
Schedule of property, plant and equipment, net | December 31, December 31, (in thousands) 2016 2015 Land $ $ Buildings and improvements Machinery and equipment Furniture, computers and equipment Computer software Construction in progress Property, plant and equipment, gross Accumulated depreciation and amortization Property, plant and equipment, net $ $ |
Goodwill and Identifiable Int35
Goodwill and Identifiable Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Identifiable Intangible Assets, Net | |
Schedule of goodwill allocated to the Company's reportable segments and changes in the carrying amount of goodwill | (in thousands) 2016 2015 Balances at beginning of year $ $ Foreign currency translation Balances at end of year $ $ Goodwill allocated to the Company's reportable segments and changes in the carrying amount of goodwill were as follows: Titleist Titleist FootJoy Titleist (in thousands) Golf Balls Golf Clubs Golf Wear Golf Gear Other Total Balances at December 31,2014 $ $ $ $ $ $ Foreign currency translation Balances at December 31,2015 Foreign currency translation Balances at December 31,2016 $ $ $ $ $ $ |
Schedule of net carrying value by class of identifiable intangible assets | Weighted December 31,2016 December 31,2015 Average Useful Accumulated Net Book Accumulated Net Book (in thousands) Life (Years) Gross Amortization Value Gross Amortization Value Indefinite-lived: Trademarks N/A $ $ - $ $ $ - $ Amortizing: Completed Technology 13 Customer Relationships 20 Licensing Fees and Other 7 Total intangible assets $ $ $ $ $ $ |
Schedule of amortization expense related to intangible assets | (in thousands) Year ending December 31, 2017 $ 2018 2019 2020 2021 Thereafter Total $ |
Product Warranty (Tables)
Product Warranty (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Product Warranty | |
Schedule of warranty obligation for accrued warranty expense | (in thousands) 2016 2015 2014 Balance at beginning of year $ $ $ Provision Claims paid/costs incurred Foreign currency translation Balance at end of year $ $ $ |
Debt and Financing Arrangemen37
Debt and Financing Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt and Financing Arrangements | |
Schedule of debt and capital lease obligations | December 31, December 31, (in thousands) 2016 2015 Term loan $ $ - Secured floating rate notes - Convertible notes - Bonds with common stock warrants - Senior term loan facility - Revolving credit facility Other short-term borrowings - Capital lease obligations Total Less: Short-term debt Total long-term debt and capital lease obligations $ $ |
Schedule of principal payments on outstanding long-term debt obligations | (in thousands) Year ending December 31, 2017 $ 2018 2019 2020 2021 Thereafter - Total $ |
Derivative Financial Instrume38
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Financial Instruments | |
Schedule of fair values in foreign exchange derivative instruments on the consolidated balance sheets | Balance Sheet December 31, December 31, (in thousands) Location 2016 2015 Asset derivatives Other current assets $ $ Other noncurrent assets Liability derivatives Other current liabilities Other noncurrent liabilities |
Schedule of foreign exchange derivative instruments included in accumulated other comprehensive income and the consolidated statements of operations | Gain (Loss) Recognized in OCI Year ended December 31, (in thousands) 2016 2015 2014 Type of hedge Cash flow $ $ $ $ $ $ Gain (Loss) Recognized in Statement of Operations Year ended December 31, (in thousands) 2016 2015 2014 Location of gain (loss) in statement of operations Cost of goods sold $ $ $ Selling, general and administrative expense $ $ $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Measurements | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Fair Value Measurements as of December 31, 2016 using: (in thousands) Level 1 Level 2 Level 3 Balance Sheet Location Assets Rabbi trust $ $ - $ - Other current assets Foreign exchange derivative instruments - - Other current assets Rabbi trust - - Other noncurrent assets Deferred compensation program assets - - Other noncurrent assets Foreign exchange derivative instruments - - Other noncurrent assets Total assets $ $ $ - Liabilities Foreign exchange derivative instruments $ - $ $ - Other current liabilities Deferred compensation program liabilities - - Other noncurrent liabilities Foreign exchange derivative instruments - - Other noncurrent liabilities Total liabilities $ $ $ - Fair Value Measurements as of December 31, 2015 using: (in thousands) Level 1 Level 2 Level 3 Balance Sheet Location Assets Rabbi trust $ $ - $ - Other current assets Foreign exchange derivative instruments - - Other current assets Rabbi trust - - Other noncurrent assets Deferred compensation program assets - - Other noncurrent assets Foreign exchange derivative instruments - - Other noncurrent assets Total assets $ $ $ - Liabilities Foreign exchange derivative instruments $ - $ $ - Other current liabilities Common stock warrants - - Other current liabilities Deferred compensation program liabilities - - Other noncurrent liabilities Foreign exchange derivative instruments - - Other noncurrent liabilities Total liabilities $ $ $ |
Schedule of changes in Level 3 fair value measurements | December 31, December 31, (in thousands) 2016 2015 Balance at beginning of year $ $ Common stock warrant exercise Total losses included in earnings Balance at end of year $ - $ |
Pension and Other Postretirem40
Pension and Other Postretirement Benefits (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Pension and Other Postretirement Benefits | |
Schedule of change in benefit obligation, change in plan assets and funded status | Pension Pension Benefits Benefits Postretirement (in thousands) (Underfunded) (Overfunded) Benefits Change in projected benefit obligation (PBO) Benefit obligation at December 31, 2015 $ $ $ Service cost Interest cost Actuarial (gain) loss Settlements - - Plan amendments - - Participants’ contributions - - Benefit payments Foreign currency translation - Adjustment for movement from underfunded to overfunded - Projected benefit obligation at December 31, 2016 Accumulated benefit obligation (ABO) at December 31, 2016 Change in plan assets Fair value of plan assets at December 31, 2015 - Return on plan assets - Employer contributions Participants’ contributions - - Settlements - - Benefit payments Foreign currency translation - Fair value of plan assets at December 31, 2016 - Funded status (fair value of plan assets less PBO) $ $ $ Pension Pension Benefits Benefits Postretirement (in thousands) (Underfunded) (Overfunded) Benefits Change in projected benefit obligation (PBO) Benefit obligation at December 31, 2014 $ $ $ Service cost Interest cost Actuarial (gain) loss Curtailments - - Plan amendments - - Participants’ contributions - Benefit payments Foreign currency translation - Projected benefit obligation at December 31, 2015 Accumulated benefit obligation (ABO) at December 31, 2015 Change in plan assets Fair value of plan assets at December 31, 2014 - Return on plan assets - Employer contributions Participants’ contributions - Benefit payments Foreign currency translation - Fair value of plan assets at December 31, 2015 - Funded status (fair value of plan assets less PBO) $ $ $ |
Schedule of amount of pension and postretirement assets and liabilities recognized on consolidated balance sheets | Pension Benefits Postretirement Benefits (in thousands) 2016 2015 2016 2015 Other noncurrent assets $ $ $ - $ - Accrued compensation and benefits Accrued pension and postretirement benefits Net amount recognized $ $ $ $ |
Schedule of amount in accumulated other comprehensive income (loss) on consolidated balance sheets that have not yet been recognized as components of net periodic benefit cost | Pension Benefits Postretirement Benefits Year ended December 31, Year ended December 31, (in thousands) 2016 2015 2014 2016 2015 2014 Net actuarial (gain) loss at beginning of year $ $ $ $ $ $ Current year actuarial (gain) loss Amortization of actuarial (gain) loss Curtailment impact - - - - - Settlement impact - - - - - Prior service cost (credit) - - - Amortization of prior service cost (credit) - - Foreign currency translation - - - Net actuarial (gain) loss at end of year $ $ $ $ $ $ |
Schedule of Components of net periodic benefit cost | Pension Benefits Postretirement Benefits Year ended December 31, (in thousands) 2016 2015 2016 2015 Components of net periodic benefit cost Service cost $ $ $ $ Interest cost Expected return on plan assets - - Curtailment Expense (Income) - - - Settlement Expense (Income) - - - Amortization of net (gain) loss Amortization of prior service cost (credit) Net periodic benefit cost $ $ $ $ |
Schedule of weighted average assumptions used to determine future benefit obligations and net periodic benefit cost | The weighted average assumptions used to determine future benefit obligations benefit cost were as follows: Pension Benefits Postretirement Benefits 2016 2015 2016 2015 Weighted-average assumptions used to determine benefit obligations at December 31 Discount rate Rate of compensation increase N/A N/A The weighted average assumptions used to determine net periodic benefit cost were as follows: Pension Benefits Postretirement Benefits 2016 2015 2014 2016 2015 2014 Weighted-average assumptions used to determine net cost for years ended December 31 Discount rate Expected long-term rate of return on plan assets N/A N/A N/A Rate of compensation increase N/A N/A N/A |
Schedule of assumed healthcare cost trend rates used to determine benefit obligations and net cost | Postretirement Benefits Medical and Prescription Drug 2016 2015 2014 Healthcare cost trend rate assumed for next year 5.50%/9.00% 5.75/10.00% Rate that the cost trend rate is assumed to decline Year that the rate reaches the ultimate trend rate |
Schedule of one-percentage-point change in assumed healthcare cost trend rates | 2016 2015 One-Percentage One-Percentage One-Percentage One-Percentage (in thousands) Point Increase Point Decrease Point Increase Point Decrease Effect on total of service and interest cost $ $ $ $ Effect on postretirement benefit obligation |
Schedule of pension assets by major category of plan assets and type of fair value measurement | Pension assets by major category of plan assets and the type of fair value measurement as of December 31, 2016 were as follows: Pension Benefits – Plan Assets Quoted Prices in Significant Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (in thousands) Total (Level 1) (Level 2) (Level 3) Asset category Individual securities Fixed income $ $ - $ $ - Commingled funds Measured at net asset value - - - $ $ - $ $ - Pension assets by major category of plan assets and the type of fair value measurement as of December 31, 2015 were as follows: Pension Benefits – Plan Assets Quoted Prices in Significant Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs (dollars in thousands) Total (Level 1) (Level 2) (Level 3) Asset category Individual securities Fixed income $ $ - $ $ - Commingled funds - Measured at net asset value - - - $ $ - $ $ - |
Schedule of estimated future retirement benefit payments | Pension Postretirement (in thousands) Benefits Benefits Year ending December 31, 2017 $ $ 2018 2019 2020 2021 Thereafter $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Schedule of components of income before incomes taxes | Year ended December 31, (in thousands) 2016 2015 2014 Domestic operations $ $ $ Foreign operations Income before income taxes $ $ $ |
Schedule of reconciliation of income taxes | Year ended December 31, (in thousands) 2016 2015 2014 Income tax expense computed at federal statutory income tax rate $ $ $ Foreign taxes, net of credits Net adjustments for uncertain tax positions State and local taxes Equity appreciation rights - Transaction costs - Indemnified taxes - Fair value adjustment for common stock warrants Valuation allowance Deferred charge Tax credits Miscellaneous other, net Income tax expense as reported $ $ $ Effective income tax rate % % % |
Schedule of reconciliation of activity related to unrecognized tax benefits, excluding accrued interest and penalties | (in thousands) 2016 2015 2014 Unrecognized tax benefits at beginning of year $ $ $ Gross additions - prior year tax positions - Gross additions - current year tax positions Gross reductions - prior year tax positions Impact of change in foreign exchange rates Unrecognized tax benefits at end of year $ $ $ |
Schedule of income tax expense | Year ended December 31, (in thousands) 2016 2015 2014 Current expense (benefit) United States $ $ $ Foreign Current income tax expense (benefit) Deferred expense (benefit) United States Foreign Deferred income tax expense (benefit) Total income tax expense $ $ $ |
Schedule of components of net deferred tax assets (liabilities) | December 31, (in thousands) 2016 2015 Deferred tax assets Compensation and benefits $ $ Share-based compensation - Equity appreciation rights Pension and other postretirement benefits Inventories Accounts receivable Customer sales incentives Transaction costs Other reserves Interest Miscellaneous Net operating loss and other tax carryforwards Gross deferred tax assets Valuation allowance Total deferred tax assets Deferred tax liabilities Property, plant and equipment Identifiable intangible assets Foreign exchange derivative instruments Miscellaneous Total deferred tax liabilities Net deferred tax asset $ $ |
Schedule of changes in valuation allowance for deferred tax assets | Year ended December 31, (in thousands) 2016 2015 2014 Valuation allowance at beginning of year $ $ $ Increases (decreases) recorded to income tax provision Valuation allowance at end of year $ $ $ |
Interest Expense and Other (I42
Interest Expense and Other (Income) Expense, Net ( Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Interest Expense and Other (Income) Expense, Net | |
Schedule of components of interest expense, net | Year ended December 31, (in thousands) 2016 2015 2014 Interest expense - related party $ $ $ Interest expense - third party Interest income -third party Total interest expense, net $ $ $ |
Schedule of Other Nonoperating Income (Expense) [Table Text Block] | Year ended December 31, (in thousands) 2016 2015 2014 (Gain) loss on fair value of common stock warrants $ $ $ Indemnification (gains) losses Other gains Total other (income) expense, net $ $ $ |
Equity Incentive Plans (Tables)
Equity Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity Incentive Plans | |
Schedule of summary of the Company’s restricted and performance stock units | Weighted- Number Average of Fair RSUs and PSUs Value Outstanding at December 31, 2015 - $ - Granted Outstanding at December 31, 2016 $ |
Schedule of the Company's stock option activity | Weighted- Weighted- Number Average Average Aggregate of Exercise Remaining Intrinsic Shares Price Contractual Term Value Outstanding at December 31, 2014 $ 1.9 years $ Exercised Outstanding at December 31, 2015 - $ - $ - |
Schedule of the company's EAR activity | Weighted- Weighted- Number Average Average Aggregate of Exercise Remaining Intrinsic Awards Price Contractual Term Value Outstanding at December 31, 2014 $ 2 years $ Granted - Outstanding at December 31, 2015 1 year Settled - Outstanding at December 31, 2016 Vested at December 31, 2016 Awards exercisable at December 31, 2016 $ $ |
Schedule of the allocation of share-based compensation expense attributed to RSUs, PSUs, EARs and stock options in the consolidated statement of operations | Year ended December 31, (in thousands) 2016 2015 2014 Cost of goods sold $ $ $ Selling, general and administrative expense Research and development Income before income taxes $ $ $ |
Accumulated Other Comprehensi44
Accumulated Other Comprehensive Income (Loss), Net of Tax (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax. | |
Schedule of changes in each component of accumulated comprehensive income (loss), net of tax effects | Foreign Gains (Losses) on Gains (Losses) Pension and Accumulated Currency Foreign Exchange on Available- Other Other Translation Derivative for-Sale Postretirement Comprehensive (in thousands) Adjustments Instruments Securities Adjustments Loss Balances at December 31, 2014 $ $ $ $ $ Other comprehensive income (loss) before reclassifications Amounts reclassified from accumulated other comprehensive loss - - Balances at December 31, 2015 $ $ $ $ $ Other comprehensive income (loss) before reclassifications Amounts reclassified from accumulated other comprehensive loss - - Balances at December 31,2016 $ $ $ $ $ |
Net Income per Common Share (Ta
Net Income per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Net Income per Common Share | |
Schedule of computation of basic and diluted net income per common share | Year ended December 31, (in thousands, except share and per share amounts) 2016 2015 2014 Net income (loss) attributable to Acushnet Holdings Corp. $ $ $ Less: dividends earned by preferred shareholders Less: allocation of undistributed earnings to preferred shareholders - Net income (loss) attributable to common stockholders - basic Adjustments to net income for dilutive securities - - Net income (loss) attributable to common stockholders - diluted $ $ $ Weighted average number of common shares: Basic Diluted Net income (loss) per common share attributable to Acushnet Holdings Corp.: Basic $ $ $ Diluted $ $ $ |
Schedule of securities excluded from the calculation of diluted weighted average common shares. | Year ended December 31, 2016 2015 2014 Series A preferred stock Stock options - - Warrants to purchase common stock - Convertible notes - |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Information | |
Schedule of information by reportable segment and a reconciliation to reported amounts | (in thousands) Year ended December 31, 2016 2015 2014 Net sales Titleist golf balls $ $ $ Titleist golf clubs Titleist golf gear FootJoy golf wear Other Total net sales $ $ $ Segment operating income Titleist golf balls $ $ $ Titleist golf clubs Titleist golf gear FootJoy golf wear Other Total segment operating income Reconciling items: Interest expense, net EAR expense Gain (loss) on fair value of common stock warrants Transaction fees Other Total income before income tax $ $ $ Depreciation and amortization Titleist golf balls $ $ $ Titleist golf clubs Titleist golf gear FootJoy golf wear Other Total depreciation and amortization $ $ $ |
Schedule of information as to the Company's operations in different geographical areas. Net sales are categorized based on the location in which the sale originates. Long-lived assets (property, plant and equipment) are categorized based on their location of domicile. | Year ended December 31, (in thousands) 2016 2015 2014 Net sales United States $ $ $ EMEA (1) Japan Korea Rest of world Total net sales $ $ $ Year ended December 31, (in thousands) 2016 2015 2014 Long-lived assets United States $ $ $ EMEA Japan Korea Rest of world (2) Total long-lived assets $ $ $ (1) Europe, the Middle East and Africa (“EMEA”) Includes manufacturing facilities in Thailand with long lived assets of $57.8 million, $60.5 million and $64.6 million as of December 31, 2016, 2015 and 2014, respectively. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Schedule of principal payments on outstanding long-term debt obligations | Payments Due by Period (in thousands) 2017 2018 2019 2020 2021 Thereafter Purchase obligations $ $ $ $ $ $ |
Schedule of future minimum rental payments under noncancelable operating leases | (in thousands) Year ending December 31, 2017 $ 2018 2019 2020 2021 Thereafter Total minimum rental payments $ |
Unaudited Quarterly Financial48
Unaudited Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Unaudited Quarterly Financial Data | |
Tabular disclosures of summary of quarterly results | Quarter ended (unaudited) Year ended (in thousands) December 31, September 30, June 30, March 31, December 31, 2016 Net sales $ $ $ $ $ Gross Profit Income from operations Net Income (loss) Net income (loss) attributable to Acushnet Holdings Corp. Net income (loss) per common share attributable to Acushnet Holdings Corp.: Basic $ $ $ $ $ Diluted $ $ $ $ $ Quarter ended (unaudited) Year ended (in thousands) December 31, September 30, June 30, March 31, December 31, 2015 Net sales $ $ $ $ $ Gross Profit Income from operations Net Income (loss) Net income (loss) attributable to Acushnet Holdings Corp. Net income (loss) per common share attributable to Acushnet Holdings Corp.: Basic $ $ $ $ $ Diluted $ $ $ $ $ |
Summary of Significant Accoun49
Summary of Significant Accounting Policies (Details) $ / shares in Units, $ in Thousands | Nov. 02, 2016$ / sharesshares | Oct. 14, 2016 | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) |
Summary of Significant Accounting Policies [Line Items] | ||||||
Payment of interest | $ | $ 27,165 | $ 20,571 | $ 21,656 | |||
Allowance for doubtful accounts | $ | $ 12,255 | $ 12,363 | $ 8,528 | $ 8,876 | ||
VIE | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Ownership percentage | 40.00% | |||||
Class of Stock, Common | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Stock split | 9 | |||||
Shares converted | 11,556,495 | |||||
Debt converted | 22,791,852 | |||||
Class of Stock, Common | IPO | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Shares issued | 19,333,333 | |||||
Share price (in dollars per share) | $ / shares | $ 17 | |||||
Class of Stock, Common | Over-allotment | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Shares issued | 2,899,999 | |||||
Share price (in dollars per share) | $ / shares | $ 17 | |||||
Magnus | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Controlling interest, as a percent | 53.10% | |||||
Magnus | Class of Stock, Common | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Shares purchased by Magnus | 14,818,720 | |||||
Convertible debt | ||||||
Summary of Significant Accounting Policies [Line Items] | ||||||
Interest rate (as a percent) | 7.50% |
Summary of Significant Accoun50
Summary of Significant Accounting Policies - Cash and Property (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for sales returns | $ 9,800 | $ 5,200 | |
Amortization of capitalized internal-use software costs | 6,608 | 6,617 | $ 6,687 |
Impairment of goodwill | 0 | 0 | 800 |
Shipping and handling costs included in selling expenses | 32,400 | 32,600 | 30,500 |
Accounts payable | |||
Book overdrafts | 3,600 | 1,700 | |
Deposits | |||
Concentration risk | 75,600 | 54,100 | |
Selling, general and administrative | |||
Advertising and promotional expense | 196,000 | 203,300 | 201,600 |
Transaction gain (loss) included in selling, general and administrative expense | $ 1,200 | 4,700 | $ 4,200 |
Maximum | |||
Product warranty duration | 2 years | ||
Minimum | |||
Product warranty duration | 1 year | ||
Buildings and improvements | Maximum | |||
Estimated useful lives of property, plant and equipment | 40 years | ||
Buildings and improvements | Minimum | |||
Estimated useful lives of property, plant and equipment | 15 years | ||
Machinery and equipment | Maximum | |||
Estimated useful lives of property, plant and equipment | 10 years | ||
Machinery and equipment | Minimum | |||
Estimated useful lives of property, plant and equipment | 3 years | ||
Furniture, fixtures and computer hardware | Maximum | |||
Estimated useful lives of property, plant and equipment | 10 years | ||
Furniture, fixtures and computer hardware | Minimum | |||
Estimated useful lives of property, plant and equipment | 3 years | ||
Computer software | Maximum | |||
Estimated useful lives of property, plant and equipment | 10 years | ||
Computer software | Minimum | |||
Estimated useful lives of property, plant and equipment | 3 years | ||
VIE | |||
Outstanding Balance | $ 0 | $ 0 |
Allowance for Doubtful Accoun51
Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Balance at beginning of year | $ 12,363 | $ 8,528 | $ 8,876 |
Bad debt expense | 6,507 | 4,771 | 2,545 |
Amount of receivables written off | (6,315) | (634) | (2,485) |
Foreign currency translation | (300) | (302) | (408) |
Balance at end of year | $ 12,255 | $ 12,363 | $ 8,528 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventories | ||
Raw materials and supplies | $ 55,424 | $ 63,119 |
Work-in-process | 21,558 | 18,210 |
Finished goods | 246,307 | 245,030 |
Inventories | $ 323,289 | $ 326,359 |
Inventories - Reserve (Details)
Inventories - Reserve (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Balance at beginning of year | $ (9,470) | $ (5,697) | $ (7,112) |
Charged to costs and expenses | (8,147) | (7,468) | (4,197) |
Deduction for reserved inventory disposed or sold | 3,542 | 3,153 | 4,860 |
Foreign currency translation | 603 | 542 | 752 |
Balance at end of year | (13,472) | (9,470) | (5,697) |
Inventory Reserve | |||
Balance at beginning of year | $ (1,000) | (2,600) | (1,900) |
Charged to costs and expenses | (2,200) | (2,500) | |
Deduction for reserved inventory disposed or sold | 400 | 2,300 | |
Foreign currency translation | 200 | 500 | |
Balance at end of year | $ (1,000) | $ (2,600) |
Property, Plant and Equipment54
Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | $ 391,112 | $ 379,162 | |
Accumulated depreciation and amortization | (151,364) | (124,268) | |
Property, plant and equipment, net | 239,748 | 254,894 | |
Software development cost capitalized | |||
Software development cost capitalized | 8,200 | 43,000 | $ 9,400 |
Depreciation and amortization | |||
Amortization expense, capitalized software and development | 5,800 | 5,500 | 2,800 |
Land | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 14,500 | 14,804 | |
Buildings and improvements | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 133,844 | 131,231 | |
Machinery and equipment | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 143,784 | 140,042 | |
Furniture, fixtures and computer hardware | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 29,326 | 24,489 | |
Computer software | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 58,462 | 51,042 | |
Construction in progress | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 11,196 | 17,554 | |
Software development cost capitalized | |||
Software development cost capitalized | 800 | 2,400 | 8,600 |
Software placed into service | |||
Software development cost capitalized | |||
Software development cost capitalized | $ 7,400 | $ 40,600 | $ 800 |
Goodwill and Identifiable Int55
Goodwill and Identifiable Intangible Assets, Net - Net carrying value & reportable segments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Net carrying value of goodwill | ||
Balances at beginning of year | $ 181,179 | $ 187,580 |
Foreign currency translation | (1,938) | (6,401) |
Balances at end of year | 179,241 | 181,179 |
Titleist golf balls | ||
Net carrying value of goodwill | ||
Balances at beginning of year | 106,561 | 109,921 |
Foreign currency translation | (1,139) | (3,360) |
Balances at end of year | 105,422 | 106,561 |
Titleist golf clubs | ||
Net carrying value of goodwill | ||
Balances at beginning of year | 51,753 | 54,319 |
Foreign currency translation | (554) | (2,566) |
Balances at end of year | 51,199 | 51,753 |
Titleist golf gear | ||
Net carrying value of goodwill | ||
Balances at beginning of year | 12,549 | 13,168 |
Foreign currency translation | (134) | (619) |
Balances at end of year | 12,415 | 12,549 |
FootJoy golf wear | ||
Net carrying value of goodwill | ||
Balances at beginning of year | 2,303 | 1,760 |
Foreign currency translation | (25) | 543 |
Balances at end of year | 2,278 | 2,303 |
Other | ||
Net carrying value of goodwill | ||
Balances at beginning of year | 8,013 | 8,412 |
Foreign currency translation | (86) | (399) |
Balances at end of year | $ 7,927 | $ 8,013 |
Goodwill and Identifiable Int56
Goodwill and Identifiable Intangible Assets, Net - Class of identifiable intangible assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Finite Lived And Indefinite Lived Intangible Assets By Major Class[Line Items] | |||
Accumulated amortization | $ (63,434) | $ (54,111) | |
Finite lived intangible assets, Net book value | 61,888 | ||
Intangible assets, Gross | 553,422 | 553,605 | |
Intangible assets, Net book value | 489,988 | 499,494 | |
Impairment of goodwill | 0 | 0 | $ 800 |
Impairment charges to indefinite-lived intangible assets | 9,300 | 9,300 | 9,400 |
Amortization of capitalized internal-use software costs | 6,608 | 6,617 | 6,687 |
Amortization expense related to intangible assets | |||
2,017 | 9,208 | ||
2,018 | 7,844 | ||
2,019 | 6,236 | ||
2,020 | 5,893 | ||
2,021 | 5,893 | ||
Thereafter | 26,814 | ||
Total | $ 61,888 | ||
Completed Technology | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class[Line Items] | |||
Weighted average useful life | 13 years | ||
Finite lived intangible assets, Gross | $ 73,900 | 73,900 | |
Accumulated amortization | (29,956) | (24,426) | |
Finite lived intangible assets, Net book value | 43,944 | 49,474 | |
Amortization expense related to intangible assets | |||
Total | $ 43,944 | 49,474 | |
Customer Relationships | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class[Line Items] | |||
Weighted average useful life | 20 years | ||
Finite lived intangible assets, Gross | $ 18,999 | 19,253 | |
Accumulated amortization | (5,146) | (4,252) | |
Finite lived intangible assets, Net book value | 13,853 | 15,001 | |
Amortization expense related to intangible assets | |||
Total | $ 13,853 | 15,001 | |
Licensing Fees and Other | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class[Line Items] | |||
Weighted average useful life | 7 years | ||
Finite lived intangible assets, Gross | $ 32,423 | 32,352 | |
Accumulated amortization | (28,332) | (25,433) | |
Finite lived intangible assets, Net book value | 4,091 | 6,919 | |
Amortization of capitalized internal-use software costs | 2,700 | 2,700 | $ 2,700 |
Amortization expense related to intangible assets | |||
Total | 4,091 | 6,919 | |
Trademarks | |||
Finite Lived And Indefinite Lived Intangible Assets By Major Class[Line Items] | |||
Indefinite lived intangible assets | $ 428,100 | $ 428,100 |
Product Warranty (Details)
Product Warranty (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Product Warranty | |||
Balance at beginning of period | $ 3,345 | $ 2,989 | $ 2,924 |
Provision | 6,200 | 5,399 | 4,959 |
Claims paid/costs incurred | (5,940) | (4,929) | (4,700) |
Foreign currency translation | (79) | (114) | (194) |
Balance at end of period | $ 3,526 | $ 3,345 | $ 2,989 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related party interest expense | $ 28,146 | $ 35,420 | $ 37,960 |
Other Assets | |||
Receivables from related party | $ 900 |
Debt and Financing Arrangemen59
Debt and Financing Arrangements - Schedule of debt and financing arrangements (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Oct. 31, 2013 | Oct. 31, 2011 |
Debt Instrument [Line Items] | ||||
Long-term debt | $ 370,313 | |||
Other short-term borrowings | $ 15,064 | |||
Capital lease obligations | 491 | 1,481 | ||
Total | 409,593 | 836,215 | ||
Less: Short-term debt | 61,245 | 441,704 | ||
Long-term debt and capital lease obligations | 348,348 | 394,511 | ||
Senior term loan facility | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 29,836 | |||
Revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 42,495 | 24,000 | ||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 366,607 | |||
Issuance cost | $ 3,700 | |||
Secured Floating Rate Notes | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 372,804 | |||
Issuance cost | 2,200 | $ 2,300 | $ 13,200 | |
Convertible notes | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 362,490 | |||
Bonds with common stock warrants | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | $ 30,540 |
Debt and Financing Arrangemen60
Debt and Financing Arrangements - Senior Secured Credit Facility (Details) $ in Thousands, £ in Millions, CAD in Millions | Oct. 28, 2016 | Jul. 28, 2016CAD | Jul. 28, 2016USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2016CAD | Dec. 31, 2016GBP (£) | Dec. 31, 2016USD ($) |
Line of Credit Facility [Line Items] | |||||||
Proceeds from the issuance of notes | $ 375,000 | ||||||
Cash on hand | $ 23,600 | ||||||
Beneficial Ownership percentage for change of control | 48.10% | ||||||
Debt instrument term | 1 year | ||||||
Percentage of stock subject to negative pledge | 5.00% | ||||||
Minimum | |||||||
Line of Credit Facility [Line Items] | |||||||
Beneficial Ownership percentage for change of control | 35.00% | 35.00% | 35.00% | ||||
Senior Secured Credit Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Contingent maximum increase to Borrowing Capacity | $ 200,000 | ||||||
Secured leverage ratio | 2.00% | 2.00% | 2.00% | ||||
Senior Secured Credit Facility | LIBOR | Minimum | |||||||
Line of Credit Facility [Line Items] | |||||||
Variable rate of interest | 1.25% | ||||||
Senior Secured Credit Facility | LIBOR | Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Variable rate of interest | 2.00% | ||||||
Senior Secured Credit Facility | Letters of credit | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | $ 20,000 | ||||||
Revolving credit facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | 275,000 | ||||||
Proceeds from the issuance of notes | CAD 4 | 3,000 | |||||
Interest expense, excluding amortization of debt issuance costs | $ 900 | ||||||
Swing line | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | 25,000 | ||||||
Swing line | Federal funds rate | |||||||
Line of Credit Facility [Line Items] | |||||||
Variable rate of interest | 0.50% | ||||||
Swing line | One Month LIBOR | |||||||
Line of Credit Facility [Line Items] | |||||||
Floor rate | 1.00% | ||||||
Swing line | One Month LIBOR | Minimum | |||||||
Line of Credit Facility [Line Items] | |||||||
Leverage ratio basis spread | 0.25% | ||||||
Swing line | One Month LIBOR | Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Leverage ratio basis spread | 1.00% | ||||||
Alternative Currency Sublimit | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | 100,000 | ||||||
Term Loan A Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | 375,000 | ||||||
Proceeds from the issuance of notes | $ 375,000 | ||||||
Interest expense, including amortization of debt issuance costs | $ 4,500 | ||||||
Delayed Draw Term Loan A Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | $ 100,000 | ||||||
Acushnet Canada | Senior Secured Credit Facility | CDOR | Minimum | |||||||
Line of Credit Facility [Line Items] | |||||||
Variable rate of interest | 1.25% | ||||||
Acushnet Canada | Senior Secured Credit Facility | CDOR | Maximum | |||||||
Line of Credit Facility [Line Items] | |||||||
Variable rate of interest | 2.00% | ||||||
Acushnet Canada | Revolving credit facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | CAD | CAD 25 | ||||||
Acushnet Europe | Revolving credit facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing capacity | £ | £ 20 |
Debt and Financing Arrangemen61
Debt and Financing Arrangements - Convertible Notes (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Mar. 11, 2013 | Dec. 31, 2012 | Jan. 20, 2012 | Jul. 29, 2011 | |
Convertible Notes | |||||||
Aggregate principal amount | $ 4.5 | $ 168 | |||||
Convertible notes | |||||||
Convertible Notes | |||||||
Aggregate principal amount | $ 362.5 | ||||||
Interest rate (as a percent) | 7.50% | ||||||
Conversion price (in dollars per share) | $ 11.11 | ||||||
Interest expense, excluding amortization of debt issuance costs | $ 22.6 | $ 27.2 | $ 27.2 |
Debt and Financing Arrangemen62
Debt and Financing Arrangements - Bonds with Common Stock Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 29, 2012 | Jul. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2012 | Jan. 20, 2012 | Jul. 29, 2011 |
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 4,500 | $ 168,000 | ||||||
Proceeds from exercise of common stock warrants | $ 34,503 | $ 34,503 | $ 34,503 | |||||
Bonds with common stock warrants | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | $ 172,500 | |||||||
Interest rate (as a percent) | 7.50% | |||||||
Interest expense, including amortization of debt issuance costs | $ 5,500 | 8,200 | $ 10,800 | |||||
Bonds with common stock warrants | Common stock warrants | ||||||||
Debt Instrument [Line Items] | ||||||||
Annual installments of warrants available to be purchased under call option | 15,526,431 | |||||||
Exercise price of warrants (in dollars per share) | $ 11.11 | |||||||
Bonds with common stock warrants | Common stock warrants | Fila Korea Ltd. | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate calculated on annual compounded basis (as a percent) | 4.00% | |||||||
Annual installments of warrants available to be purchased under call option | 3,105,288 | 3,105,279 | ||||||
Period of call option to purchase warrants | 5 years | |||||||
Period to exercise warrants | 10 days | |||||||
Exercise price of warrants (in dollars per share) | $ 11.11 | |||||||
Proceeds from exercise of common stock warrants | $ 34,500 | |||||||
Discount on debt issuance cost | 19,900 | |||||||
Repayment of debt | $ 34,500 | |||||||
Unamortized discount | $ 4,000 |
Debt and Financing Arrangemen63
Debt and Financing Arrangements - Secured Floating Rate Notes (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Oct. 31, 2013 | Oct. 31, 2011 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 20, 2012 | Jul. 29, 2011 | |
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 4,500 | $ 168,000 | |||||
Proceeds from the issuance of notes | $ 375,000 | ||||||
Interest Expense | 49,908 | $ 60,294 | $ 63,529 | ||||
Secured Floating Rate Notes | |||||||
Debt Instrument [Line Items] | |||||||
Aggregate principal amount | $ 125,000 | $ 500,000 | 375,000 | ||||
Repayment of debt | 150,000 | ||||||
Issuance cost | 2,300 | $ 13,200 | 2,200 | ||||
Interest Expense | 1,000 | ||||||
Issuance cost incurred | $ 3,300 | ||||||
Interest expense, including amortization of debt issuance costs | $ 12,300 | $ 20,800 | $ 22,400 | ||||
Secured Floating Rate Notes | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Variable rate of interest | 3.75% | 3.75% | |||||
Interest rate calculated on annual compounded basis (as a percent) | 4.07% |
Debt and Financing Arrangemen64
Debt and Financing Arrangements - Senior Revolving and Term Loan Facilities (Details) - USD ($) $ in Millions | Dec. 24, 2014 | Jul. 31, 2011 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Feb. 12, 2014 | Jan. 20, 2012 | Jul. 29, 2011 |
Line of Credit Facility [Line Items] | ||||||||
Aggregate principal amount | $ 4.5 | $ 168 | ||||||
Senior revolving credit facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 95 | |||||||
Outstanding Balance | $ 0 | |||||||
Debt interest expense | $ 0.8 | 0.8 | $ 0.9 | |||||
Senior revolving credit facility | Korea Development Bank | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 50 | |||||||
Variable rate of interest | 3.25% | |||||||
Senior revolving credit facility | Korea Development Bank | LIBOR | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Commitment fee of unused portion (as a percent) | 0.30% | |||||||
Senior revolving credit facility | Wells Fargo, National Association | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 75 | |||||||
Senior Term Loan | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Outstanding Balance | $ 30 | |||||||
Interest rate (as a percent) | 3.26% | |||||||
Debt interest expense | $ 0.7 | $ 1.3 | $ 0.1 | |||||
Senior Term Loan | Korea Development Bank | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Aggregate principal amount | $ 30 | |||||||
Commitment fee of unused portion (as a percent) | 0.30% | |||||||
Senior Term Loan | Korea Development Bank | LIBOR | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Variable rate of interest | 2.63% |
Debt and Financing Arrangemen65
Debt and Financing Arrangements - Line of Credit Facility (Details) - USD ($) $ in Thousands | Feb. 05, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Line of Credit Facility [Line Items] | ||||
Long-term debt | $ 370,313 | |||
Working capital facility | Wells Fargo, National Association | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 30,000 | |||
Commitment fee (as a percent) | 0.35% | |||
Debt interest expense | $ 300 | $ 300 | $ 300 | |
LIBOR | Working capital facility | Wells Fargo, National Association | ||||
Line of Credit Facility [Line Items] | ||||
Variable rate of interest | 2.50% |
Debt and Financing Arrangemen66
Debt and Financing Arrangements - Working Credit Facility (Details) - Working capital facility £ in Millions, CAD in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | |||
Feb. 28, 2013CAD | Apr. 30, 2012GBP (£) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Wells Fargo N.A., Canadian Branch | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | CAD | CAD 25 | ||||
Commitment fee (as a percent) | 0.25% | ||||
Percentage of eligible accounts receivable | 80.00% | ||||
Percentage of eligible inventory | 60.00% | ||||
Outstanding Balance | $ 0 | ||||
Debt interest expense | $ 0.2 | ||||
Wells Fargo N.A., Canadian Branch | CDOR | |||||
Line of Credit Facility [Line Items] | |||||
Variable rate of interest | 2.00% | ||||
Wells Fargo N.A., Canadian Branch | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Variable rate of interest | 2.00% | ||||
Wells Fargo Capital Finance (UK) Limited | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | £ | £ 30 | ||||
Commitment fee (as a percent) | 0.375% | ||||
Percentage of eligible accounts receivable | 85.00% | ||||
Percentage of eligible inventory | 65.00% | ||||
Outstanding Balance | 0 | ||||
Debt interest expense | $ 0.5 | $ 0.6 | $ 0.7 | ||
Wells Fargo Capital Finance (UK) Limited | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Variable rate of interest | 3.00% | ||||
Letters of credit | Wells Fargo Capital Finance (UK) Limited | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | £ | £ 5 |
Debt and Financing Arrangemen67
Debt and Financing Arrangements - Letters of Credit (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Available borrowing capacity | $ 224,900 | |
Payments of Debt Obligations due by Period | ||
2,017 | 18,750 | |
2,018 | 21,094 | |
2,019 | 28,125 | |
2,020 | 30,470 | |
2,021 | 271,874 | |
Long-term Debt | 370,313 | |
Letters of credit | ||
Outstanding letter of credit | 11,600 | $ 14,400 |
Line of credit secured | 8,600 | $ 4,000 |
Maximum borrowing capacity | $ 24,000 |
Derivative Financial Instrume68
Derivative Financial Instruments - Common Stock Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Jul. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jan. 20, 2012 | Jul. 29, 2011 | |
Derivative [Line Items] | ||||||
Aggregate principal amount | $ 4,500 | $ 168,000 | ||||
Amount of warrants exercised | $ 34,503 | $ 34,503 | $ 34,503 | |||
Common Stock Warrants | ||||||
Derivative [Line Items] | ||||||
Issue of warrants to purchase shares | 406,431 | 15,120,000 | ||||
Fila Korea Ltd | Common Stock Warrants | ||||||
Derivative [Line Items] | ||||||
Issue of warrants to purchase shares | 3,105,279 | |||||
Exercise price (in dollars per share) | $ 11.11 | |||||
Amount of warrants exercised | $ 34,500 |
Derivative Financial Instrume69
Derivative Financial Instruments - Fair value of foreign exchange derivative instruments in consolidated balance sheets (Details) - Foreign exchange derivative contract - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Derivatives, Fair Value [Line Items] | ||
Notional amount | $ 371,200 | |
Maximum | ||
Derivatives, Fair Value [Line Items] | ||
Term of derivative contract | 24 months | |
Derivative designated as hedging | Other current assets | ||
Derivatives, Fair Value [Line Items] | ||
Asset derivatives | $ 11,357 | $ 13,824 |
Derivative designated as hedging | Other noncurrent assets | ||
Derivatives, Fair Value [Line Items] | ||
Asset derivatives | 5,286 | 790 |
Derivative designated as hedging | Other current liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liability derivatives | 1,106 | 1,265 |
Derivative designated as hedging | Other noncurrent liabilities | ||
Derivatives, Fair Value [Line Items] | ||
Liability derivatives | $ 32 | $ 331 |
Derivative Financial Instrume70
Derivative Financial Instruments - Effect of foreign exchange derivative instruments in comprehensive income (loss) and statement of operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Expected reclassification of gain recorded in accumulated other comprehensive loss into earnings during next twelve months | $ 9,300 | ||
Derivative designated as hedging | Foreign exchange derivative contract | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in OCI | 7,014 | $ 14,964 | $ 20,619 |
Gain (Loss) Recognized in Statement of Operations | 4,199 | 30,646 | 13,187 |
Derivative designated as hedging | Foreign exchange derivative contract | Cash flow | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in OCI | 7,014 | 14,964 | 20,619 |
Derivative designated as hedging | Cost of goods sold | Foreign exchange derivative contract | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in Statement of Operations | 5,194 | 26,805 | 9,916 |
Derivative designated as hedging | Selling, general and administrative | Foreign exchange derivative contract | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (Loss) Recognized in Statement of Operations | $ (995) | $ 3,841 | $ 3,271 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and liabilities at fair value (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Liabilities | ||
Fair value asset, Transfer between Level 1 to Level 2 | $ 0 | |
Fair value asset, Transfer between Level 2 to Level 1 | 0 | |
Fair value Liabilities, Transfer between Level 1 to Level 2 | 0 | |
Fair value Liabilities, Transfer between Level 2 to Level 1 | 0 | |
Level 1 | ||
Assets | ||
Total assets | 14,088 | $ 16,682 |
Liabilities | ||
Total liabilities | 1,846 | 2,129 |
Level 2 | ||
Assets | ||
Total assets | 16,643 | 14,614 |
Liabilities | ||
Total liabilities | 1,138 | 1,596 |
Level 3 | ||
Liabilities | ||
Total liabilities | 22,884 | |
Other current assets | Rabbi trust | Level 1 | ||
Assets | ||
Total assets | 6,994 | 13,111 |
Other current assets | Foreign exchange derivative instruments | Level 2 | ||
Assets | ||
Total assets | 11,357 | 13,824 |
Other noncurrent assets | Rabbi trust | Level 1 | ||
Assets | ||
Total assets | 5,248 | 1,442 |
Other noncurrent assets | Foreign exchange derivative instruments | Level 2 | ||
Assets | ||
Total assets | 5,286 | 790 |
Other noncurrent assets | Deferred compensation program assets | Level 1 | ||
Assets | ||
Total assets | 1,846 | 2,129 |
Other current liabilities | Foreign exchange derivative instruments | Level 2 | ||
Liabilities | ||
Total liabilities | 1,106 | 1,265 |
Other current liabilities | Common stock warrants | Level 3 | ||
Liabilities | ||
Total liabilities | 22,884 | |
Other noncurrent liabilities | Foreign exchange derivative instruments | Level 2 | ||
Liabilities | ||
Total liabilities | 32 | 331 |
Other noncurrent liabilities | Deferred compensation program liabilities | Level 1 | ||
Liabilities | ||
Total liabilities | $ 1,846 | $ 2,129 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation for liabilities measure at fair value using level 3 (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | ||
Balance at beginning of period | $ 22,884 | $ 1,818 |
Common stock warrant exercise | (28,996) | (7,298) |
Total losses included in earnings | $ 6,112 | 28,364 |
Balance at end of period | $ 22,884 |
Pension and Other Postretirem73
Pension and Other Postretirement Benefits - (Details) - USD ($) $ in Thousands | Nov. 13, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Pension and Other Postretirement Benefits | |||
Service period | 1 year | ||
Vesting service period | 10 years | ||
Age plus vesting period | 70 years | ||
Cap amount | $ 150,000 | ||
Curtailment gain | $ 2,400 | ||
Minimum | |||
Pension and Other Postretirement Benefits | |||
Age limit | 50 years | ||
Maximum | |||
Pension and Other Postretirement Benefits | |||
Age limit | 65 years |
Pension and Other Postretirem74
Pension and Other Postretirement Benefits - Plan assets and funded status (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Change in projected benefit obligation (PBO) | ||
Curtailment gain | $ 2,400 | |
Pension Benefits (Underfunded) | ||
Change in projected benefit obligation (PBO) | ||
Projected benefit obligation at beginning of year | $ 271,462 | 275,022 |
Service cost | 9,787 | 15,515 |
Interest cost | 11,077 | 10,962 |
Actuarial (gain) loss | 14,095 | 199 |
Settlements | (6,714) | |
Curtailment gain | (21,567) | |
Plan amendments | 1,331 | |
Benefit payments | (15,515) | (9,203) |
Foreign currency translation | 122 | (797) |
Adjustment for movement from underfunded to overfunded | (210) | |
Projected benefit obligation at end of year | 284,104 | 271,462 |
Accumulated benefit obligation (ABO) at end of year | 247,009 | 228,830 |
Change in plan assets | ||
Fair value of plan assets at beginning of year | 157,729 | 159,309 |
Return on plan assets | 7,203 | (5,182) |
Employer contributions | 18,335 | 12,827 |
Settlements | (6,714) | |
Benefit payments | (15,515) | (9,203) |
Foreign currency translation | 50 | (22) |
Fair value of plan assets at end of year | 161,088 | 157,729 |
Funded status (fair value of plan assets less PBO) | (123,016) | (113,733) |
Pension Benefits (Overfunded) | ||
Change in projected benefit obligation (PBO) | ||
Projected benefit obligation at beginning of year | 38,287 | 35,998 |
Service cost | 168 | |
Service cost (negative) | (24) | |
Interest cost | 1,279 | 1,376 |
Actuarial (gain) loss | 7,711 | 2,920 |
Participants' contributions | 55 | |
Benefit payments | (796) | (575) |
Foreign currency translation | (6,932) | (1,655) |
Adjustment for movement from underfunded to overfunded | 210 | |
Projected benefit obligation at end of year | 39,735 | 38,287 |
Accumulated benefit obligation (ABO) at end of year | 37,289 | 36,004 |
Change in plan assets | ||
Fair value of plan assets at beginning of year | 43,768 | 42,269 |
Return on plan assets | 8,280 | 1,838 |
Employer contributions | 2,012 | 2,095 |
Participants' contributions | 55 | |
Benefit payments | (796) | (575) |
Foreign currency translation | (7,922) | (1,914) |
Fair value of plan assets at end of year | 45,342 | 43,768 |
Funded status (fair value of plan assets less PBO) | 5,607 | 5,481 |
Postretirement Benefits | ||
Change in projected benefit obligation (PBO) | ||
Projected benefit obligation at beginning of year | 20,079 | 21,089 |
Service cost | 888 | 1,060 |
Interest cost | 779 | 787 |
Actuarial (gain) loss | (572) | (2,228) |
Plan amendments | 283 | |
Participants' contributions | 921 | 1,068 |
Benefit payments | (2,114) | (1,697) |
Projected benefit obligation at end of year | 20,264 | 20,079 |
Accumulated benefit obligation (ABO) at end of year | 20,264 | 20,079 |
Change in plan assets | ||
Employer contributions | 1,193 | 629 |
Participants' contributions | 921 | 1,068 |
Benefit payments | (2,114) | (1,697) |
Funded status (fair value of plan assets less PBO) | $ (20,264) | $ (20,079) |
Pension and Other Postretirem75
Pension and Other Postretirement Benefits - Recognized on consolidated balance sheets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Assets and liabilities recognized on consolidated balance sheets: | |||
Accrued pension and postretirement benefits | $ (135,339) | $ (119,549) | |
Expected prior service cost (credit) and actuarial (gain) loss will be amortized in next fiscal year | |||
Expected actuarial (gain) loss will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in the next fiscal year | 100 | ||
Pension Benefits | |||
Assets and liabilities recognized on consolidated balance sheets: | |||
Other noncurrent assets | 5,607 | 5,481 | |
Accrued compensation and benefits | (7,149) | (13,419) | |
Accrued pension and postretirement benefits | (115,867) | (100,314) | |
Net amount recognized | (117,409) | (108,252) | |
Accumulated other comprehensive income (loss) on consolidated balance sheets that have not yet been recognized as components of net periodic benefit cost: | |||
Net actuarial (gain) loss at beginning of year | 18,374 | 19,878 | $ (7,892) |
Current year actuarial (gain) loss | 18,425 | 17,835 | 28,116 |
Amortization of actuarial (gain) loss | (485) | (1,152) | (34) |
Curtailment impact | (19,146) | ||
Settlement impact | (1,124) | ||
Prior service cost (credit) | 1,331 | ||
Amortization of prior service cost (credit) | (175) | (22) | |
Foreign currency translation | (1,279) | (350) | (312) |
Net actuarial (gain) loss at end of year | 33,736 | 18,374 | 19,878 |
Expected prior service cost (credit) and actuarial (gain) loss will be amortized in next fiscal year | |||
Expected prior service cost (credit) will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in the next fiscal year | 200 | ||
Expected actuarial (gain) loss will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in the next fiscal year | 200 | ||
Postretirement Benefits | |||
Assets and liabilities recognized on consolidated balance sheets: | |||
Accrued compensation and benefits | (784) | (844) | |
Accrued pension and postretirement benefits | (19,480) | (19,235) | |
Net amount recognized | (20,264) | (20,079) | |
Accumulated other comprehensive income (loss) on consolidated balance sheets that have not yet been recognized as components of net periodic benefit cost: | |||
Net actuarial (gain) loss at beginning of year | (8,840) | (7,270) | (3,269) |
Current year actuarial (gain) loss | (573) | (2,228) | (2,484) |
Amortization of actuarial (gain) loss | 912 | 490 | 195 |
Prior service cost (credit) | 283 | (1,712) | |
Amortization of prior service cost (credit) | 163 | 168 | |
Net actuarial (gain) loss at end of year | (8,055) | $ (8,840) | $ (7,270) |
Expected prior service cost (credit) and actuarial (gain) loss will be amortized in next fiscal year | |||
Expected prior service cost (credit) will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in the next fiscal year | 200 | ||
Expected actuarial (gain) loss will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in the next fiscal year | $ 700 |
Pension and Other Postretirem76
Pension and Other Postretirement Benefits - Periodic benefit cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Pension Benefits | ||
Components of net periodic benefit cost | ||
Service cost | $ 9,763 | $ 15,683 |
Interest cost | 12,356 | 12,338 |
Expected return on plan assets | (12,189) | (11,372) |
Curtailment Expense (Income) | (2,421) | |
Settlement Expense (Income) | 1,148 | |
Amortization of net (gain) loss | 471 | 1,152 |
Amortization of prior service cost (credit) | 175 | 22 |
Net periodic benefit cost (credit) | 11,724 | 15,402 |
Postretirement Benefits | ||
Components of net periodic benefit cost | ||
Service cost | 888 | 1,060 |
Interest cost | 779 | 787 |
Amortization of net (gain) loss | (912) | (490) |
Amortization of prior service cost (credit) | (163) | (168) |
Net periodic benefit cost (credit) | $ 592 | $ 1,189 |
Pension and Other Postretirem77
Pension and Other Postretirement Benefits - Weighted average assumptions (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Weighted average assumptions used to determine net cost for years ended December 31 | |||
Expected long-term rate of return on plan assets | 5.77% | ||
Pension Benefits | |||
Weighted average assumptions used to determine benefit obligations at December 31 | |||
Discount rate | 4.17% | 4.16% | |
Rate of compensation increase | 4.02% | 4.07% | |
Weighted average assumptions used to determine net cost for years ended December 31 | |||
Discount rate | 4.16% | 3.92% | 4.73% |
Expected long-term rate of return on plan assets | 6.23% | 6.15% | 6.72% |
Rate of compensation increase | 4.07% | 4.05% | 4.05% |
Postretirement Benefits | |||
Weighted average assumptions used to determine benefit obligations at December 31 | |||
Discount rate | 4.08% | 4.30% | |
Weighted average assumptions used to determine net cost for years ended December 31 | |||
Discount rate | 4.30% | 3.90% | 4.80% |
Pension and Other Postretirem78
Pension and Other Postretirement Benefits - Healthcare cost trend rates (Details) - Postretirement Benefits Medical and Prescription Drug | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Assumed healthcare cost trend rates used to determine benefit obligations and net cost: | |||
Healthcare cost trend rate assumed for next year | 8.00% | ||
Rate that the cost trend rate is assumed to decline (the ultimate trend rate) | 4.50% | 4.50% | 5.00% |
Year that the rate reaches the ultimate trend rate | 2,024 | 2,024 | 2,021 |
Minimum | |||
Assumed healthcare cost trend rates used to determine benefit obligations and net cost: | |||
Healthcare cost trend rate assumed for next year | 5.50% | 5.75% | |
Maximum | |||
Assumed healthcare cost trend rates used to determine benefit obligations and net cost: | |||
Healthcare cost trend rate assumed for next year | 9.00% | 10.00% |
Pension and Other Postretirem79
Pension and Other Postretirement Benefits - One-percentage-point (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
One-percentage-point change in assumed healthcare cost trend rates: | ||
Effect on total of service and interest cost, one-percentage point increase | $ 104 | $ 125 |
Effect on total of service and interest cost, one-percentage point decrease | (91) | (110) |
Effect on postretirement benefit obligation, one-percentage point increase | 894 | 1,054 |
Effect on postretirement benefit obligation, one-percentage point decrease | $ (796) | $ (941) |
Pension and Other Postretirem80
Pension and Other Postretirement Benefits - Plan assets and type of fair value measurement (Details) - Pension Benefits - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Pension and Other Postretirement Benefits | ||
Fair Value of plan Assets | $ 206,429 | $ 201,497 |
Level 2 | ||
Pension and Other Postretirement Benefits | ||
Fair Value of plan Assets | 1,628 | 1,520 |
Fixed income | ||
Pension and Other Postretirement Benefits | ||
Fair Value of plan Assets | 1,628 | 1,520 |
Fixed income | Level 2 | ||
Pension and Other Postretirement Benefits | ||
Fair Value of plan Assets | 1,628 | 1,520 |
Commingled funds | ||
Pension and Other Postretirement Benefits | ||
Fair Value of plan Assets | $ 204,801 | $ 199,977 |
Pension and Other Postretirem81
Pension and Other Postretirement Benefits - U.S. defined benefit plan (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Pension and Other Postretirement Benefits | ||
Future expected blended long-term rate of return on plan assets (as a percent) | 5.77% | |
U.S. defined benefit plan | Return-seeking investment | ||
Pension and Other Postretirement Benefits | ||
Asset allocation (as a percent) | 64.00% | 76.00% |
U.S. defined benefit plan | Liability-hedging investment | ||
Pension and Other Postretirement Benefits | ||
Asset allocation (as a percent) | 24.00% | 36.00% |
Pension and Other Postretirem82
Pension and Other Postretirement Benefits - Estimated Future Retirement Benefit (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Estimated contribution | |
Estimated contribution | $ 20,000 |
Pension Benefits | |
Estimated Future Retirement Benefit Payments, Year ending December 31, | |
2,017 | 22,696 |
2,018 | 30,294 |
2,019 | 19,283 |
2,020 | 19,594 |
2,021 | 23,300 |
Thereafter | 100,017 |
Total | 215,184 |
Postretirement Benefits | |
Estimated Future Retirement Benefit Payments, Year ending December 31, | |
2,017 | 784 |
2,018 | 990 |
2,019 | 1,140 |
2,020 | 1,317 |
2,021 | 1,507 |
Thereafter | 9,397 |
Total | $ 15,135 |
Pension and Other Postretirem83
Pension and Other Postretirement Benefits - International Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Pension and Other Postretirement Benefits | |||
Pension expense | $ 1 | $ 0.9 | $ 1.2 |
Expected actuarial loss that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in next fiscal year | 0.1 | ||
International Plans | |||
Pension and Other Postretirement Benefits | |||
Total projected benefit obligations | 54.4 | 53.5 | |
Fair Value of plan Assets | $ 47.6 | $ 45.4 |
Pension and Other Postretirem84
Pension and Other Postretirement Benefits - Defined contribution plan(Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Pension and Other Postretirement Benefits | |||
Cash contributions | $ 13 | $ 9.4 | $ 8.8 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Components of income before income taxes: | |||
Domestic operations | $ 63,867 | $ 4,784 | $ 2,814 |
Foreign operations | 25,355 | 27,366 | 39,252 |
Income before income taxes | $ 89,222 | $ 32,150 | $ 42,066 |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Taxes | |||
Federal statutory income tax rate (as a percent) | 35.00% | ||
Reconciliation of income taxes: | |||
Income tax expense computed at federal statutory income tax rate | $ 31,229 | $ 11,252 | $ 14,723 |
Foreign taxes, net of credits | (1,804) | 418 | 2,835 |
Net adjustments for uncertain tax positions | 706 | 4,731 | 525 |
State and local taxes | (525) | (1,108) | (1,659) |
Equity appreciation rights | 372 | 693 | |
Transaction costs | 3,078 | 414 | |
Indemnified taxes | 1,594 | (1,106) | |
Fair value adjustment for common stock warrants | 3,029 | 10,853 | 268 |
Valuation allowance | 955 | 7,872 | 2,476 |
Deferred charge | 1,009 | 807 | (1,491) |
Tax credits | (704) | (7,003) | (2,176) |
Miscellaneous other, net | 768 | 171 | 1,199 |
Income tax expense as reported | $ 39,707 | $ 27,994 | $ 16,700 |
Effective income tax rate (as a percent) | 44.50% | 87.10% | 39.70% |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefit (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of activity related to unrecognized tax benefits, excluding interest and penalties: | |||
Unrecognized tax benefits at beginning of year | $ 13,120 | $ 8,845 | $ 4,451 |
Gross additions - prior year tax positions | 1,960 | 3,045 | |
Gross additions - current year tax positions | 747 | 1,605 | 4,798 |
Gross reductions - prior year tax positions | (4,457) | (333) | (357) |
Impact of change in foreign exchange rates | (23) | (42) | (47) |
Unrecognized tax benefits at end of year | 11,347 | 13,120 | 8,845 |
Liability of interest and penalties | 2,300 | 1,900 | 1,500 |
Beam Suntory Inc [Member] | |||
Reconciliation of activity related to unrecognized tax benefits, excluding interest and penalties: | |||
Unrecognized tax benefits, would affect the company's future effective tax rate if recognized next 12 months | 5,900 | 4,200 | 3,700 |
Liability of interest and penalties | $ 1,800 | $ 1,600 | $ 1,400 |
Income Taxes - Income tax expen
Income Taxes - Income tax expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current expense (benefit) | |||
United States | $ 3,702 | $ 5,455 | $ (1,125) |
Foreign | 28,156 | 20,351 | 29,118 |
Current income tax expense (benefit) | 31,858 | 25,806 | 27,993 |
Deferred expense (benefit) | |||
United States | 9,489 | (152) | (10,425) |
Foreign | (1,640) | 2,340 | (868) |
Deferred Income Tax Expense (Benefit), Total | 7,849 | 2,188 | (11,293) |
Income before income taxes | $ 39,707 | $ 27,994 | $ 16,700 |
Income Taxes - Net deferred tax
Income Taxes - Net deferred tax assets (liabilities) (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Deferred tax assets | ||||
Compensation and benefits | $ 22,053 | $ 24,736 | ||
Share-based compensation | 5,474 | |||
Equity appreciation rights | 57,146 | 62,679 | ||
Pension and other postretirement benefits | 45,926 | 39,268 | ||
Inventories | 9,120 | 7,011 | ||
Accounts receivables | 2,942 | 3,790 | ||
Customer sales incentives | 3,254 | 2,761 | ||
Transaction costs | 3,157 | 3,601 | ||
Other reserves | 5,764 | 6,056 | ||
Interest | 2,260 | 5,852 | ||
Miscellaneous | 1,076 | 160 | ||
Net operating loss and other tax carryforwards | 55,936 | 47,557 | ||
Gross deferred tax assets | 214,108 | 203,471 | ||
Valuation allowance | (21,726) | (20,771) | $ (13,850) | $ (10,510) |
Net deferred tax asset | 122,964 | 125,153 | ||
Deferred tax liabilities | ||||
Property, plant and equipment | (17,496) | (15,043) | ||
Identifiable intangible assets | (46,701) | (38,075) | ||
Foreign exchange derivative instruments | (4,076) | (3,600) | ||
Miscellaneous | (1,145) | (829) | ||
Total deferred tax liabilities | (69,418) | (57,547) | ||
Net deferred tax asset | $ 192,382 | $ 182,700 |
Income Taxes - NOL and Tax cred
Income Taxes - NOL and Tax credit carryforwards (Details) - USD ($) $ in Millions | Dec. 31, 2016 | Dec. 31, 2015 |
State | ||
NOL and Tax credit carryfowards | ||
Net operating loss carryforwards | $ 94.2 | $ 103 |
Foreign | ||
NOL and Tax credit carryfowards | ||
Tax credit carryforwards | $ 46 | $ 37.9 |
Income Taxes - Changes in valua
Income Taxes - Changes in valuation allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Changes in valuation allowance for deferred tax assets: | |||
Valuation allowance at beginning of year | $ 20,771 | $ 13,850 | $ 10,510 |
Increases (decreases) recorded to income tax provision | 955 | 6,921 | 3,340 |
Valuation allowance at end of year | $ 21,726 | $ 20,771 | $ 13,850 |
Interest Expense and Other (I92
Interest Expense and Other (Income) Expense, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Interest Expense and Other (Income) Expense, Net | |||
Interest expense - related party | $ 28,146 | $ 35,420 | $ 37,960 |
Interest expense - third party | 23,113 | 26,567 | 26,493 |
Interest income - third party | (1,351) | (1,693) | (924) |
Total interest expense, net | 49,908 | 60,294 | 63,529 |
Other Nonoperating Income (Expense) [Abstract] | |||
(Gain) loss on fair value of common stock warrants | 6,112 | 28,364 | (1,887) |
Indemnification (gains) losses | (2,174) | (3,007) | 1,386 |
Other gains | (2,232) | (218) | (847) |
Other (income) expense, net | $ 1,706 | $ 25,139 | $ (1,348) |
Redeemable Convertible Prefer93
Redeemable Convertible Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Temporary Equity [Line Items] | |||
Outstanding redeemable convertible preferred stock | 0 | ||
Par value | $ 0.001 | $ 0.001 | |
Dividend paid | $ 17,316 | $ 13,747 | $ 13,786 |
Series A Preferred Stock | |||
Temporary Equity [Line Items] | |||
Outstanding redeemable convertible preferred stock | 1,838,027 | ||
Par value | $ 0.001 | ||
Dividend rate (as a percent) | 7.50% | ||
Issue price | $ 100 | ||
Dividend declared | $ 17,300 | 13,700 | 13,800 |
Dividend paid | $ 17,300 | 13,700 | $ 13,800 |
Cumulative undeclared dividends | $ 5,800 |
Common Stock (Details)
Common Stock (Details) | 12 Months Ended | ||
Dec. 31, 2016Vote$ / sharesshares | Dec. 31, 2015Vote$ / sharesshares | Mar. 22, 2017$ / shares | |
Common stock, shares authorized | shares | 500,000,000 | 78,193,494 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |
Number of vote entitled | Vote | 1 | 1 | |
Common stock reserved for future issuance | shares | 6,525,000 | 28,827,531 | |
Subsequent events | |||
Dividends declared | $ / shares | $ 0.12 |
Equity Incentive Plans - Restri
Equity Incentive Plans - Restricted Stock and Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 28, 2016 | Aug. 09, 2016 | Jun. 15, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Restricted Stock and Restricted Stock Units | ||||||
Share reserved for issuance | 6,525,000 | 28,827,531 | ||||
Weighted average period | 2 years | |||||
Compensation expense | $ 20,541 | $ 51,603 | $ 52,690 | |||
Stock options | ||||||
Restricted Stock and Restricted Stock Units | ||||||
Compensation expense | $ 5,800 | $ 2,000 | ||||
PSUs | ||||||
Restricted Stock and Restricted Stock Units | ||||||
Vested (in shares) | 0 | |||||
Unrecognized compensation expense | $ 14,800 | |||||
Compensation expense | $ 6,100 | |||||
RSUs | ||||||
Restricted Stock and Restricted Stock Units | ||||||
Vested (in shares) | 0 | |||||
Unrecognized compensation expense | $ 16,700 | |||||
Compensation expense | $ 8,400 | |||||
Omnibus Incentive 2015 Plan | ||||||
Restricted Stock and Restricted Stock Units | ||||||
Share reserved for issuance | 4,501,257 | |||||
Repurchase exercise period | 60 days | |||||
Number of shares of common stock that may be subject to repurchase unless they have been held by the award holder for at least six months | 0 | |||||
Threshold period for shares that may be subject to repurchase | 6 months | |||||
Omnibus Incentive 2015 Plan | PSUs | ||||||
Restricted Stock and Restricted Stock Units | ||||||
Term of award | P3Y | |||||
Percentage of awards granted | 50.00% | |||||
Percentage of share repurchase | 100.00% | |||||
Omnibus Incentive 2015 Plan | PSUs | Minimum | ||||||
Restricted Stock and Restricted Stock Units | ||||||
Awards earned as percentage of specified compensation | 0.00% | |||||
Omnibus Incentive 2015 Plan | PSUs | Maximum | ||||||
Restricted Stock and Restricted Stock Units | ||||||
Awards earned as percentage of specified compensation | 200.00% | |||||
Omnibus Incentive 2015 Plan | RSUs | ||||||
Restricted Stock and Restricted Stock Units | ||||||
Percentage of awards granted | 50.00% | |||||
Omnibus Incentive 2015 Plan | RSUs and PSUs | ||||||
Restricted Stock and Restricted Stock Units | ||||||
Fair Value of grant | $ 600 | $ 3,800 | $ 45,800 | |||
Number of RSUs and PSUs | ||||||
Granted | 2,459,166 | |||||
Outstanding at end of the period | 2,459,166 | |||||
Weighted - Average Fair Value | ||||||
Granted | $ 20.40 | |||||
Outstanding at end of the period | $ 20.40 |
Equity Incentive Plans - Stock
Equity Incentive Plans - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2012 | |
Additional Information | ||||
Share based compensation expense | $ 20,541 | $ 51,603 | $ 52,690 | |
Stock options | ||||
Stock Options | ||||
Options issued and vested | 1,328,148 | |||
Weighted average exercise price | $ 9.90 | |||
Number of Shares | ||||
Outstanding at beginning of the period | 450,081 | |||
Exercised | (450,081) | |||
Outstanding at end of the period | 450,081 | |||
Weighted Average Exercise Price | ||||
Outstanding at beginning of the period | $ 8.34 | |||
Exercised | $ 8.34 | |||
Outstanding at end of the period | $ 8.34 | |||
Additional Information | ||||
Weighted-Average Remaining Contractual Term | 1 year 10 months 24 days | |||
Aggregate intrinsic value, outstanding | $ (4) | |||
Aggregate intrinsic value, exercised | $ 2,301 | |||
Share based compensation expense | $ 5,800 | $ 2,000 |
Equity Incentive Plans - Equity
Equity Incentive Plans - Equity Appreciation Rights (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | 48 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2012 | Dec. 31, 2015 | |
Aggregate Intrinsic Value | |||||
Outstanding at beginning of the period | $ 169,600 | ||||
Outstanding at end of the period | $ 169,600 | $ 169,600 | |||
Share based compensation expense | 20,541 | 51,603 | $ 52,690 | ||
Cost of goods sold | |||||
Aggregate Intrinsic Value | |||||
Share based compensation expense | 434 | 670 | 765 | ||
Selling, general and administrative | |||||
Aggregate Intrinsic Value | |||||
Share based compensation expense | 18,622 | 48,377 | 49,631 | ||
Research and development | |||||
Aggregate Intrinsic Value | |||||
Share based compensation expense | 1,485 | 2,556 | $ 2,294 | ||
Accrued compensation and benefits | |||||
Aggregate Intrinsic Value | |||||
Outstanding at beginning of the period | 24,200 | ||||
Outstanding at end of the period | 151,500 | 24,200 | 24,200 | ||
Other noncurrent liabilities | |||||
Aggregate Intrinsic Value | |||||
Outstanding at beginning of the period | $ 145,400 | ||||
Outstanding at end of the period | $ 145,400 | $ 145,400 | |||
Equity Appreciation Rights | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Settlement percentage of award on completion of initial offering | 50.00% | ||||
Intrinsic value at the date of grant | $ 0 | $ 0 | |||
Vesting period | 4 years | ||||
Number of Awards | |||||
Outstanding at beginning of the period | 9,180,000 | 8,901,000 | |||
Granted | 279,000 | 8,901,000 | |||
Settled | (1,566,000) | ||||
Outstanding at end of the period | 7,614,000 | 9,180,000 | 8,901,000 | 9,180,000 | |
Vested at end of the period | 7,614,000 | ||||
Awards exercisable at end of the period | 7,614,000 | ||||
Weighted Average Exercise Price | |||||
Outstanding at beginning of the period | $ 11.40 | $ 11.12 | |||
Granted | 20.53 | ||||
Settled | 11.12 | ||||
Outstanding at end of the period | 19.90 | $ 11.40 | $ 11.12 | $ 11.12 | $ 11.40 |
Vested at end of the period | 19.90 | ||||
Awards exercisable at end of the period | $ 19.90 | ||||
Additional Information | |||||
Weighted-Average Remaining Contractual Term | 1 year | 2 years | |||
Aggregate Intrinsic Value | |||||
Outstanding at beginning of the period | $ 171,712 | $ 166,795 | |||
Outstanding at end of the period | 151,511 | 171,712 | $ 166,795 | $ 171,712 | |
Vested at end of the period | 151,511 | ||||
Awards exercisable at end of the period | 151,511 | ||||
Share based compensation expense | $ 6,000 | $ 45,800 | $ 50,700 | ||
Equity Appreciation Rights | Vesting of the award based on the recipient's continued service with the Company | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Settlement percentage of award on completion of initial offering | 40.00% | ||||
Equity Appreciation Rights | Vesting of the award based on the Company's achievement of a specified adjusted EBITDA targets | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Settlement percentage of award on completion of initial offering | 30.00% | ||||
Equity Appreciation Rights | Vesting of the award based on the Company's achievement of specified internal rates of return | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Settlement percentage of award on completion of initial offering | 30.00% |
Accumulated Other Comprehensi98
Accumulated Other Comprehensive Income (Loss), Net of Tax (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Balance at the beginning of the period | $ (67,234) | |
Balance at the end of the period | (90,834) | $ (67,234) |
Foreign Currency Translation Adjustments | ||
Balance at the beginning of the period | (70,019) | (50,977) |
Other comprehensive income (loss) before reclassifications | (14,656) | (19,042) |
Balance at the end of the period | (84,675) | (70,019) |
Gains (Losses) on Foreign Exchange Derivative Instruments | ||
Balance at the beginning of the period | 9,166 | 17,171 |
Other comprehensive income (loss) before reclassifications | 6,563 | 18,800 |
Amounts reclassified from accumulated other comprehensive loss | (5,194) | (26,805) |
Balance at the end of the period | 10,535 | 9,166 |
Gains (Losses) on Available- for-Sale Securities | ||
Balance at the beginning of the period | 1,504 | 2,017 |
Other comprehensive income (loss) before reclassifications | 32 | (513) |
Balance at the end of the period | 1,536 | 1,504 |
Pension and Other Postretirement Adjustments | ||
Balance at the beginning of the period | (7,885) | (9,269) |
Other comprehensive income (loss) before reclassifications | (9,916) | 868 |
Amounts reclassified from accumulated other comprehensive loss | (429) | 516 |
Balance at the end of the period | (18,230) | (7,885) |
Accumulated Other Comprehensive Loss | ||
Balance at the beginning of the period | (67,234) | (41,058) |
Other comprehensive income (loss) before reclassifications | (17,977) | 113 |
Amounts reclassified from accumulated other comprehensive loss | (5,623) | (26,289) |
Balance at the end of the period | $ (90,834) | $ (67,234) |
Net Income per Common Share - C
Net Income per Common Share - Computation of basic and diluted net income per common share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net Income per Common Share | |||||||||||
Net income (loss) attributable to Acushnet Holdings Corp. | $ (179) | $ (5,526) | $ 27,055 | $ 23,662 | $ (20,436) | $ (13,986) | $ 18,654 | $ 14,802 | $ 45,012 | $ (966) | $ 21,557 |
Dividends earned by preferred shareholders | (11,576) | (13,785) | (13,785) | ||||||||
Less: allocation of undistributed earnings to preferred shareholders | (10,247) | (3,866) | |||||||||
Net income (loss) attributable to common shareholders - basic | 23,189 | (14,751) | 3,906 | ||||||||
Adjustments to net income for dilutive securities | 16,475 | ||||||||||
Net income (loss) attributable to common shareholders - diluted | $ 39,664 | $ (14,751) | $ 3,906 | ||||||||
Weighted average number of common shares: | |||||||||||
Basic | 31,247,643 | 19,939,293 | 16,716,825 | ||||||||
Diluted | 64,323,742 | 19,939,293 | 16,716,825 | ||||||||
Net income (loss) per common share attributable to Acushnet Holdings Corp.: | |||||||||||
Basic | $ (0.02) | $ (0.38) | $ 0.62 | $ 0.53 | $ (1.09) | $ (0.84) | $ 0.43 | $ 0.32 | $ 0.74 | $ (0.74) | $ 0.23 |
Diluted | $ (0.02) | $ (0.38) | $ 0.39 | $ 0.35 | $ (1.09) | $ (0.84) | $ 0.29 | $ 0.23 | $ 0.62 | $ (0.74) | $ 0.23 |
Net Income per Common Share 100
Net Income per Common Share - Calculation of diluted weighted average common shares outstanding (Details) - shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Series A preferred stock | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 13,807,486 | 16,542,243 | 16,542,243 |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,089 | ||
Common stock warrants | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,807,171 | 4,891,887 | |
Convertible notes | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 32,624,820 | 32,624,820 |
Segment Information - Reconcili
Segment Information - Reconciliation (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | item | 4 | ||
Total Net Sales | $ 1,572,275 | $ 1,502,958 | $ 1,537,610 |
Total segment operating income | 165,133 | 168,382 | 157,699 |
Depreciation and amortization | 40,834 | 41,702 | 43,159 |
Reconciling items: | |||
Interest expense, net | (49,908) | (60,294) | (63,529) |
EAR expense | (6,047) | (45,814) | (50,713) |
Gain (loss) on fair value of common stock warrants | (6,112) | (28,364) | 1,887 |
Transaction fees | (16,817) | (2,141) | (1,490) |
Total income before income tax | 89,222 | 32,150 | 42,066 |
Titleist golf balls | |||
Segment Reporting Information [Line Items] | |||
Total Net Sales | 513,899 | 535,465 | 543,843 |
Total segment operating income | 76,236 | 92,507 | 68,489 |
Depreciation and amortization | 26,104 | 26,962 | 27,726 |
Titleist golf clubs | |||
Segment Reporting Information [Line Items] | |||
Total Net Sales | 430,966 | 388,304 | 422,383 |
Total segment operating income | 50,500 | 33,593 | 45,845 |
Depreciation and amortization | 7,021 | 7,060 | 7,172 |
Titleist golf gear | |||
Segment Reporting Information [Line Items] | |||
Total Net Sales | 136,208 | 129,408 | 127,875 |
Total segment operating income | 12,119 | 12,170 | 16,485 |
Depreciation and amortization | 1,250 | 1,368 | 1,446 |
FootJoy golf wear | |||
Segment Reporting Information [Line Items] | |||
Total Net Sales | 433,061 | 418,852 | 421,632 |
Total segment operating income | 18,979 | 26,056 | 28,639 |
Depreciation and amortization | 5,759 | 5,540 | 5,948 |
Other | |||
Segment Reporting Information [Line Items] | |||
Total Net Sales | 58,141 | 30,929 | 21,877 |
Total segment operating income | 7,299 | 4,056 | (1,759) |
Depreciation and amortization | 700 | 772 | 867 |
Reconciling items: | |||
Other | $ 2,973 | $ 381 | $ (1,788) |
Segment Information - Geographi
Segment Information - Geographical areas (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | $ 1,572,275 | $ 1,502,958 | $ 1,537,610 |
Total long-lived assets | 239,748 | 254,894 | 266,592 |
United States | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | 804,516 | 805,470 | 793,328 |
Total long-lived assets | 157,884 | 168,459 | 172,709 |
EMEA | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | 210,088 | 201,106 | 216,531 |
Total long-lived assets | 8,619 | 9,423 | 9,725 |
Japan | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | 219,021 | 182,163 | 195,762 |
Total long-lived assets | 628 | 767 | 1,143 |
Korea | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | 175,956 | 144,956 | 141,168 |
Total long-lived assets | 1,811 | 1,726 | 3,058 |
Rest of world | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total net sales | 162,694 | 169,263 | 190,821 |
Total long-lived assets | 70,806 | 74,519 | 79,957 |
Thailand | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Total long-lived assets | $ 57,800 | $ 60,500 | $ 64,600 |
Commitments and Contingencie103
Commitments and Contingencies (Details) - USD ($) | Jun. 21, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
2,017 | $ 146,308,000 | |||
2,018 | 18,228,000 | |||
2,019 | 2,877,000 | |||
2,020 | 2,257,000 | |||
2,021 | 1,793,000 | |||
Thereafter | $ 3,326,000 | |||
Lessor Leasing Arrangements, Operating Leases, Term of Contract | 1 year | |||
Lessor Leasing Arrangements, Operating Leases, Renewal Term | 5 years | |||
Cost (in percentage) | 20.00% | |||
Deprecated Value (in percentage) | 20.00% | |||
Loss Contingency, Receivable | $ 9,700,000 | |||
Loss Contingency, Receivable, Current | 1,400,000 | |||
Loss Contingency, Receivable, Noncurrent | 8,300,000 | |||
Litigation Settlement, Amount | $ 972,288 | |||
Litigation Settlement Interest | $ 494,859 | |||
Future minimum rental payments under noncancelable operating lease | ||||
2,017 | 13,047,000 | |||
2,018 | 11,665,000 | |||
2,019 | 6,910,000 | |||
2,020 | 4,005,000 | |||
2,021 | 2,283,000 | |||
Thereafter | 1,466,000 | |||
Total minimum rental payments | 39,376,000 | |||
Total rental expense for all operating leases | 16,500,000 | $ 15,800,000 | $ 16,100,000 | |
Collectability of receivables | ||||
Loss Contingency, Receivable | $ 16,600,000 |
Unaudited Quarterly Financia104
Unaudited Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net sales | $ 329,761 | $ 339,318 | $ 463,261 | $ 439,935 | $ 320,216 | $ 319,868 | $ 446,576 | $ 416,298 | $ 1,572,275 | $ 1,502,958 | $ 1,537,610 |
Gross Profit | 167,994 | 166,902 | 237,960 | 225,869 | 165,553 | 157,340 | 237,687 | 215,258 | 798,725 | 775,838 | 757,932 |
Income from operations | 7,608 | 9,606 | 66,437 | 57,185 | 3,539 | 46 | 65,141 | 48,856 | 140,836 | 117,583 | 104,247 |
Net income | 1,247 | (4,402) | 27,478 | 25,192 | (19,161) | (13,298) | 20,228 | 16,387 | 49,515 | 4,156 | 25,366 |
Net income (loss) attributable to Acushnet Holdings Corp. | $ (179) | $ (5,526) | $ 27,055 | $ 23,662 | $ (20,436) | $ (13,986) | $ 18,654 | $ 14,802 | $ 45,012 | $ (966) | $ 21,557 |
Net income (loss) per common share attributable to Acushnet Holdings Corp.: | |||||||||||
Basic | $ (0.02) | $ (0.38) | $ 0.62 | $ 0.53 | $ (1.09) | $ (0.84) | $ 0.43 | $ 0.32 | $ 0.74 | $ (0.74) | $ 0.23 |
Diluted | $ (0.02) | $ (0.38) | $ 0.39 | $ 0.35 | $ (1.09) | $ (0.84) | $ 0.29 | $ 0.23 | $ 0.62 | $ (0.74) | $ 0.23 |
Selling, general and administrative | $ 600,804 | $ 604,018 | $ 602,755 | ||||||||
Cost of goods sold | 773,550 | 727,120 | 779,678 | ||||||||
Income tax expense | $ 39,707 | $ 27,994 | $ 16,700 | ||||||||
Commissions paid | |||||||||||
Net income (loss) per common share attributable to Acushnet Holdings Corp.: | |||||||||||
Selling, general and administrative | $ 3,900 | $ 4,700 | $ 2,000 | ||||||||
Revenue recognition | |||||||||||
Net sales | 3,000 | (1,600) | (4,800) | ||||||||
Gross Profit | 1,000 | (500) | (1,500) | ||||||||
Net income (loss) attributable to Acushnet Holdings Corp. | 700 | (300) | (1,000) | ||||||||
Net income (loss) per common share attributable to Acushnet Holdings Corp.: | |||||||||||
Cost of goods sold | 2,000 | (1,100) | (3,300) | ||||||||
Income tax expense | $ 300 | $ (200) | $ (500) |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent events - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 22, 2017 | |
Subsequent Event [Line Items] | ||
Dividends declared | $ 0.12 | |
Payments to participants, EAR Liability | $ 151.5 |