Earnings per Common Share

12 Months Ended

Dec. 31, 2020

Note 8. (Loss) Earnings per Common Share

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

Diluted earnings per common share takes into account the potential dilution that could occur if outstanding securities were exercised. Dilutive securities are included in the calculation of diluted earnings per common share using the treasury stock method in accordance with ASC Topic 260, “Earnings per Share.” Dilutive securities include outstanding stock

options, restricted stock units and performance based awards granted to employees and non-employee directors (see Note 16), as well as common shares underlying convertible notes (see Note 7).

Weighted-average common shares outstanding—diluted is the same as weighted-average common shares outstanding—basic in periods when a net loss is reported or in periods when anti-dilution occurs.

The following table summarizes the computation of basic and diluted (loss) earnings per share:


	Years Ended December 31,
	2020		2019		2018
	(In thousands, except per share data)
(Loss) earnings per common share—basic


Net (loss) income attributable to Callaway Golf Company	$	(126,934)	$	79,408	$	104,740
Weighted-average common shares outstanding—basic	94,201		94,251		94,579
Basic (loss) earnings per common share	$	(1.35)	$	0.84	$	1.11

(Loss) earnings per common share—diluted



Net (loss) income attributable to Callaway Golf Company	$	(126,934)	$	79,408	$	104,740
Weighted-average common shares outstanding—basic	94,201		94,251		94,579

Options, restricted stock and performance based awards	—		2,036		2,574
Weighted-average common shares outstanding—diluted	94,201		96,287		97,153
Diluted (loss) earnings per common share	$	(1.35)	$	0.82	$	1.08

In May 2020, the Company issued $258,750,000 of 2.75% Convertible Notes. The Convertible Notes will have an impact on the Company’s diluted earnings per share when the average market price of its common stock exceeds the conversion price of $17.62 per share, as the Company intends to settle the principal amount of the Convertible Notes in cash upon conversion. The Company is required under the treasury stock method to compute the potentially dilutive shares of common stock related to the Convertible Notes for periods the Company reports net income. For the year ended December 31, 2020, the Company reported a net loss and, as such, the Convertible Notes were excluded from the diluted calculation (See Note 7).

Antidilutive securities excluded from the (loss) earnings per share computation are summarized as follows:

•For the year ended December 31, 2020, securities outstanding totaling approximately 2,088,000 shares, comprised of stock options, restricted stock units, performance based awards, and common shares underlying convertible notes, were excluded from the calculation of (loss) earnings per common share—diluted as they would be anti-dilutive.

•For the years ended December 31, 2019 and 2018, there were no securities excluded from the calculation of (loss) earnings per common share—diluted.

In addition, in connection with the pending Merger with Topgolf (see Note 6), the Company estimates that it will issue approximately 90,000,000 shares of its common stock to the stockholders of Topgolf, which will significantly increase the Company's basic and diluted weighted average shares outstanding upon the close of the Merger, which is expected on or around March 8, 2021, subject to shareholder approval.