Callaway Investment Thesis and Business Transformation Overview
TOPGOLF Q4 & FY 2021 DETAILED FINANCIAL DISCLOSURE
($ in millions)
Q4 2021
FY Reported
(10 months)
FY Pro Forma(1)
(12 months)
Net Revenue
$336
$1,088
$1,231
Segment Income from Operations (2)
$6
$58
$40
Depreciation & Amortization
$29
$93
$111
Non-cash Rent
$6
$13
$13
Non-cash Compensation Expense
$4
$14
$16
Segment Adjusted EBITDA (3)
$46
$177
$179
Capital Expenditures (4)
$64
$173
$185
Venue Financing Liability (5)
$593
Interest Related to Venue Financing Liability (6)
$19
$33
$35
1.
Due to the timing of the Topgolf acquisition on March 8, 2021, Callaway's reported full year financial results will only include 10 months of Topgolf results in 2021. The pro forma YTD results detailed on this slide include Topgolf
financials for January and February.
2. Segment income from operations does not include interest expense or tax expense.
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6.
Segment Adjusted EBITDA is segment income from operations plus depreciation & amortization, non-cash rent and non-cash compensation expense.
Capital expenditures are net of expected REIT reimbursement.
As of December 31, 2021, Venue Finance Lease Obligations and Deemed Landlord Financing were $132 million and $461 million, respectively. In Q4 2021, the Company remeasured Topgolf's leases in accordance with relevant
purchase accounting guidance as well as reclassified certain ground leases to Deemed Landlord Financing. In Q4 2021, the Company remeasured Topgolf's leases in accordance with relevant purchase accounting guidance as
well as reclassified certain ground leases to DLF. Across all of our lease-related liabilities (operating, DLF, venue finance) over $350M of the Q4 2021 increase was related to purchase accounting valuations.
The purchase accounting adjustments mentioned in footnote 5 also resulted in a true up to interest expense during the quarter, a portion of which was non-cash interest. In FY 2021, interest expense related to Topgolf's DLF and
Finance Leases totaled $32.6M for the 10 months reported on Callaway's financials, of which $11.6M was non-cash interest. Please refer to our Consolidated Statement of Cash Flows under the line "Accretion of deemed
landlord financing" for the non-cash portion of interest recorded during 2021.
Callaway
Callaway
៣
travis Mathew
Jack
Wolfskin
TOPGOLF
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