Note 2. Cost Reduction Initiatives

In December 2013, the Company completed its cost reduction initiatives (the “Cost Reduction Initiatives”), which streamlined and simplified the Company’s organizational structure and changed the manner in which the Company approaches and operates its business. These initiatives included (i) a reduction in workforce that impacted all regions and levels of the organization in addition to other transition costs; (ii) greater focus on the Company’s core product lines, which included the transition of the Company's certain apparel and footwear product lines to a licensing arrangement with third parties; (iii) the transition of the Company’s GPS device business to a third-party based model; and (iv) the reorganization of the Company’s golf ball manufacturing supply chain, including the sale and lease-back of the Company’s ball manufacturing facility in Chicopee, Massachusetts (Note 6).

As of December 31, 2013, the Company completed the Cost Reduction Initiatives and will not incur future charges associated with these initiatives. In the aggregate through December 31, 2013, the Company recognized total charges of $70,600,000 in connection with these initiatives, of which approximately two-thirds resulted in non-cash charges.

During the three and nine months ended September 30, 2013, the Company recognized total cash and non-cash charges of $1,858,000 and $10,365,000, respectively, in connection with these initiatives. Amounts recognized in cost of sales during the three and nine months ended September 30, 2013 totaled $1,005,000 and $7,374,000, respectively, and the amounts recognized in operating expenses totaled $853,000 and $2,991,000, respectively. Non-cash charges recognized in the first nine months of 2013 included lower of cost or market adjustments to inventory as well as inventory write-offs related to the Company's golf apparel, golf footwear and GPS device businesses. The Company did not recognize any charges in connection with the Cost Reduction Initiatives during the three and nine months ended September 30, 2014. Amounts payable as of September 30, 2014 included ongoing severance payments and transition costs in connection with the restructuring of the Company's distribution facility in Canada. See Note 16 for charges recognized by the Company’s operating segments.

The table below depicts the activity and liability balances recorded as part of the Cost Reduction Initiatives (in thousands) as of September 30, 2014 and 2013. Amounts payable as of September 30, 2014 and December 31, 2013 are included in accrued employee compensation and benefits, and accounts payable and accrued expenses in the accompanying consolidated condensed balance sheets.



	Cost Reduction Initiatives
	Workforce Reductions			Transition Costs			Asset Write-offs			Total
Nine months ended September 30, 2013
Restructuring payable balance, December 31, 2012	$	4,531		$	591		$	—		$	5,122
Charges to cost and expense	1,091			2,418			—			3,509
Non-cash items	—			(1,699		)	—			(1,699		)
Cash payments	(3,547		)	(717		)	—			(4,264		)
Restructuring payable balance, March 31, 2013	$	2,075		$	593		$	—		$	2,668
Charges to cost and expense	677			997			3,324			4,998
Non-cash items	—			(412		)	(3,324		)	(3,736		)
Cash payments	(1,652		)	(1,071		)	—			(2,723		)
Restructuring payable balance, June 30, 2013	$	1,100		$	107		$	—		$	1,207
Charges to cost and expense	602			1,256			—			1,858
Non-cash items	—			(675		)	—			(675		)
Cash payments	(669		)	(45		)	—			(714		)
Restructuring payable balance, September 30, 2013	$	1,033		$	643		$	—		$	1,676

Nine months ended September 30, 2014
Restructuring payable balance, December 31, 2013	$	806		$	2,501		$	—		$	3,307
Cash payments	(476		)	(1,355		)	—			(1,831		)
Restructuring payable balance, March 31, 2014	$	330		$	1,146		$	—		$	1,476
Cash payments	(209		)	(203		)	—			(412		)
Restructuring payable balance, June 30, 2014	$	121		$	943		$	—		$	1,064
Cash payments	(97		)	(260		)	—			(357		)
Restructuring payable balance, September 30, 2014	$	24		$	683		$	—		$	707