Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2025

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Fair Value Measurements

We measure our financial assets and liabilities at fair value on a recurring basis using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. Authoritative guidance establishes three levels of the fair value hierarchy as follows:

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

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

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

The carrying amounts of cash and cash equivalents, money market funds, accounts receivable, accounts payable and accrued expenses and certain other short-term liabilities approximate fair value due to their high liquidity and short-term nature and are therefore categorized within Level 1 of the fair value hierarchy.

Our money market funds accrue dividends, which are reinvested in the funds, and are reflected in the carrying values of the funds. As of June 30, 2025 and December 31, 2024, the carrying value of our money market funds was $579.8 million and $304.1 million, respectively, which is included in cash and cash equivalents on our condensed consolidated balance sheets. During the three months ended June 30, 2025 and June 30, 2024, we recognized $2.9 million and $1.0 million, respectively, of dividend income on our money market funds. During the six months ended June 30, 2025 and June 30, 2024, we recognized $5.4 million and $2.7 million, respectively, of dividend income on our money market funds. Dividend income is included in other income, net in the condensed consolidated statements of operations.

Hedging instruments are re-measured on a recurring basis using pricing models, broker quotes, daily market foreign currency rates, and interest rate curves as applicable (see Note 15) and are therefore categorized within Level 2 of the fair value hierarchy.

The following table summarizes the valuation of our foreign currency forward contracts and interest rate hedge agreements (see Note 15) that are measured at fair value on a recurring basis and are classified within Level 2 of the fair value hierarchy as of the periods presented below (in millions):

	Level 2 Fair Value
June 30, 2025
Foreign currency forward contracts—asset position	$	1.5
Foreign currency forward contracts—liability position	(9.5)
Interest rate hedge agreements—asset position	1.8
Interest rate hedge agreements—liability position	(1.8)
Total	$	(8.0)
December 31, 2024
Foreign currency forward contracts—asset position	$	5.7
Foreign currency forward contracts—liability position	(1.0)
Interest rate hedge agreements—asset position	7.8
Interest rate hedge agreements—liability position	—
Total	$	12.5

There were no transfers of financial instruments between the levels of the fair value hierarchy during the three and six months ended June 30, 2025 and 2024.

Disclosures about the Fair Value of Financial Instruments

The table below presents information about the fair value of our financial assets and liabilities, and is provided for comparative purposes only relative to the carrying values recognized in the condensed consolidated balance sheets as of the periods presented below (in millions):

		June 30, 2025				December 31, 2024
	Measurement Level	Carrying Value		Fair Value		Carrying Value		Fair  Value
2025 Japan ABL Credit Facility	Level 2	$	48.6	$	48.6	$	—	$	—
2022 Japan ABL Credit Facility	Level 2	$	—	$	—	$	25.4	$	25.4
2023 Term Loan B	Level 2	$	1,171.9	$	1,145.5	$	1,178.1	$	1,175.2
Convertible Notes	Level 2	$	258.3	$	251.0	$	258.3	$	250.1
Equipment Notes	Level 2	$	8.8	$	8.1	$	11.7	$	10.7
Mortgage Loans	Level 2	$	43.9	$	50.5	$	44.3	$	53.0

Non-recurring Fair Value Measurements

We measure certain long-lived assets, goodwill, non-amortizing intangible assets and investments at fair value on a non-recurring basis, at least annually or more frequently if impairment indicators are present. We did not recognize any impairments during the three months ended June 30, 2025. During the first quarter of 2025, we determined that the Jack Wolfskin business met the criteria to be classified as held-for-sale and upon designation, we recorded a $7.0 million impairment within selling, general and administrative expenses on the condensed consolidated statement of operations to write down the assets and related liabilities to their estimated fair value reduced for the costs to dispose of the assets. The estimate of fair value used to determine the loss was derived using estimated proceeds of $290.0 million from the sale and unobservable inputs which were categorized within Level 3 of the fair value hierarchy. On May 31, 2025, we completed the sale of the Jack Wolfskin business and recorded an additional loss on the sale of $15.7 million within other income (expense) and selling, general and administrative expenses on our condensed consolidated statement of operations (see Note 3).

During the three and six months ended June 30, 2024, we recognized $6.3 million of total impairment charges, of which $3.4 million was related to the abandonment of our Shankstars online digital game in our Topgolf segment, and $2.9 million was recognized as a result of an assessment of retail locations of the Jack Wolfskin business in connection with our restructuring and reorganization initiatives within our Active Lifestyle segment (see Note 18). In relation to the Jack Wolfskin business, we determined that certain operating ROU and fixed assets related to certain retail stores may not be fully recoverable based on the estimated cash flows for these stores over the remaining lease terms and asset lives, therefore we reduced the carrying values of these assets to their fair values. The impairment loss was categorized within Level 3 of the fair value hierarchy, and was recognized in selling, general and administrative expense in our consolidated statement of operations. The impairment loss related to the abandonment of Shankstars was recognized in research and development costs in our consolidated statement of operations.