Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Valuation of Foreign Currency Exchange Contracts by Pricing Levels

The following table summarizes the valuation of the Company’s foreign currency forward contracts (see Note 17) that are measured at fair value on a recurring basis by the above pricing levels at March 31, 2021 and December 31, 2020 (in thousands):

	Fair Value		Level 1		Level 2		Level 3
March 31, 2021
Foreign currency forward contracts—asset position(1)	$	10,389	$	—	$	10,389	$	—
Foreign currency forward contracts—liability position(1)	(719)		—		(719)		—
Interest rate hedge agreements—liability position(2)	(14,047)		—		(14,047)		—
	$	(4,377)	$	—	$	(4,377)	$	—
December 31, 2020
Foreign currency forward contracts—asset position(1)	$	90	$	—	$	90	$	—
Foreign currency forward contracts—liability position(1)	(1,553)		—		(1,553)		—
Interest rate hedge agreements—liability position(2)	(17,922)		—		(17,922)		—
	$	(19,385)	$	—	$	(19,385)	$	—

(1)The fair value of the Company’s foreign currency forward contracts are based on observable inputs that are corroborated by market data. Observable inputs include broker quotes, daily market foreign currency rates and forward pricing curves. Remeasurement gains and losses on foreign currency forward contracts designated as cash flow hedges are recorded in accumulated other comprehensive income (loss) until recognized in earnings during the period that the hedged transactions take place (see Note 17).

(2)The fair value of interest rate hedge contracts are based on observable inputs that are corroborated by market data.

Observable inputs include daily market foreign currency rates and interest rate curves. Remeasurement gains and losses are recorded in accumulated other comprehensive income (loss) until recognized in earnings as interest payments are made or received on the Company’s variable-rate debt. Remeasurement gains and losses on foreign currency forward contracts that are not-designated as cash flow hedges are recorded in other income (expense) (see Note 17).

Fair Value Relating to Financial Assets and Liabilities

The carrying values of cash and cash equivalents at March 31, 2021 and December 31, 2020 are categorized within Level 1 of the fair value hierarchy. The table below illustrates information about fair value relating to the Company’s financial assets and liabilities that are recognized in the accompanying consolidated condensed balance sheets as of March 31, 2021 and December 31, 2020 (in thousands).

	March 31, 2021				December 31, 2020
	Carrying Value		Fair Value		Carrying Value		Fair  Value
Term Loan Facility(1)	$	440,400	$	442,140	$	441,600	$	443,243
2020 Japan Term Loan Facility(2)	$	16,258	$	14,675	$	18,390	$	16,083
Convertible Notes(3)	$	258,750	$	439,254	$	258,750	$	414,191
U.S. Asset-Based Revolving Credit Facility(4)	$	16,931	$	16,931	$	22,130	$	22,130
Equipment Notes(5)	$	29,747	$	28,229	$	31,822	$	29,385
Topgolf Revolving Credit Facility(6)	$	152,190	$	152,190	$	—	$	—
Mortgage Loans(6)	$	46,743	$	46,743	$	—	$	—
Topgolf Term Loan(6)	$	335,585	$	335,585	$	—	$	—

(1)In January 2019, the Company entered into a Term Loan Facility. The fair value of this debt is based on quoted prices for similar instruments in active markets combined with quantitative pricing models, and is therefore categorized within Level 2 of the fair value hierarchy. See Note 7 for further information.

(2)In August 2020, the Company entered into the 2020 Japan Term Loan Facility. The fair value is categorized within Level 2 of the fair value hierarchy. The Company used discounted cash flows and market-based expectations for interest rates, credit risk, and the contractual terms of the debt to derive the fair value. See Note 7 for further information.

(3)In May 2020, the Company issued $258,750,000 of 2.75% Convertible Notes due in 2026. The fair value of this debt is based on quoted prices in secondary markets combined with quantitative pricing models, and is therefore categorized within Level 2 of the fair value hierarchy. For further discussion, see Note 7.

(4)The carrying value of the amounts outstanding under the Company's ABL Facility approximates the fair value due to the short-term nature of these obligations. The fair value of this debt is categorized within Level 2 of the fair value hierarchy based on the observable market borrowing rates. See Note 7 for information on the Company's credit facilities, including certain risks and uncertainties related thereto.

(5)The Company entered into equipment notes in 2017, 2019 and 2020 that are secured by certain equipment at the Company's golf ball manufacturing facility. The fair value of this debt is categorized within Level 2 of the fair value hierarchy. The Company used discounted cash flows and market-based expectations for interest rates, credit risk, and the contractual terms of the debt to derive the fair value. See Note 7 for further information.

(6)The fair value of the Company's Topgolf Revolving Credit Facility, Topgolf Term Loan and mortgage loans were assessed in connection with the purchase accounting related to the merger with Topgolf on March 8, 2021. There were no significant changes to the fair values of these obligations from the merger date through March 31, 2021. As such, fair value approximates the carrying value. See Note 7 for further information.