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Segment Information
 12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
Segment Information
Note 22. Segment Information
On March 8, 2021, the Company completed its merger with Topgolf. Topgolf is primarily a services-based business that provides hospitality offerings and golf entertainment experiences, which is uniquely different compared to the Company's Golf Equipment and Apparel, Gear and Other businesses, which produce, distribute and sell goods through various sales channels. Accordingly, based on the Company's re-assessment of its operating segments, the Company added a third operating segment for its Topgolf business. Therefore, as of December 31, 2021, the Company had three reportable operating segments: Topgolf, Golf Equipment and Apparel, Gear and Other.
The Topgolf operating segment is primarily comprised of service revenues and expenses for its Company-operated Topgolf venues equipped with technology-enabled hitting bays, multiple bars, dining areas and event spaces, as well as Toptracer ball-flight tracking technology used by independent driving ranges and broadcast television, and the Company's WGT digital golf game.
The Golf Equipment operating segment is comprised of product revenues and expenses that encompass golf club and golf ball products, including Callaway Golf-branded woods, hybrids, irons, wedges, Odyssey putters, including Toulon Design putters by Odyssey, packaged sets, Callaway Golf and Strata branded golf balls and sales of pre-owned golf clubs.
The Apparel, Gear and Other operating segment is comprised of product revenues and expenses for the Jack Wolfskin outdoor apparel, gear and accessories business, the TravisMathew golf and lifestyle apparel and accessories business, the Callaway soft goods business and the OGIO business, which consists of golf apparel and accessories (including golf bags and gloves), storage gear for sport and personal use. This segment also includes royalties from licensing of the Company’s trademarks and service marks for various soft goods products.
The table below contains information utilized by management to evaluate its operating segments.
Years Ended December 31,
202120202019
Net revenues:
Topgolf(1)
$1,087,671 $— $— 
Golf equipment1,229,175 982,675 979,173 
Apparel, gear and other816,601 606,785 721,890 
Total net revenues$3,133,447 $1,589,460 $1,701,063 
Income (loss) before income taxes:
Topgolf(1)
$58,225 $— $— 
Golf equipment203,846 148,578 140,316 
Apparel, gear and other68,511 679 75,490 
Total segment operating income330,582 149,257 215,806 
Corporate G&A and other(2)
(125,867)(80,503)(83,138)
Goodwill and tradename impairment(3)
— (174,269)— 
Total operating income (loss)204,715 (105,515)132,668 
Gain on Topgolf investment(4)
252,531 — — 
Interest expense, net(115,565)(46,932)(38,493)
Other income, net8,961 24,969 1,594 
Total income (loss) before income taxes$350,642 $(127,478)$95,769 
December 31,
20212020
Identifiable assets:
Topgolf(1)
$4,909,968 $— 
Golf equipment1,107,632 481,214 
Apparel, gear and other840,466 754,601 
Reconciling items(5)
889,714 744,785 
Total identifiable assets$7,747,780 $1,980,600 
Additions to long-lived assets:(6)
Topgolf(1)
$286,813 $— 
Golf equipment30,657 25,695 
Apparel, gear and other20,996 21,235 
Total additions to long-lived assets$338,466 $46,930 
Goodwill:(7)
Topgolf(1)
$1,340,663 $— 
Golf equipment531,122 27,025 
Apparel, gear and other88,285 29,633 
Total goodwill$1,960,070 56,658 
Depreciation and amortization:
Topgolf(1)
$114,618 $— 
Golf equipment14,073 19,212 
Apparel, gear and other27,131 20,296 
Total depreciation and amortization$155,822 $39,508 
____________
(1)On March 8, 2021, the Company completed the merger with Topgolf and has included the results of operations of Topgolf in its consolidated statements of operations from that date forward.
(2)Corporate general and administrative expenses for the year ended December 31, 2021 include (i) $22.3 million of non-cash amortization expense for intangible assets acquired in connection with the merger with Topgolf, combined with depreciation expense from the fair value step-up of Topgolf property, plant and equipment and amortization expense related to the fair value adjustments to Topgolf leases, (ii)$21.2 million of transaction, transition and other non-recurring costs associated with the merger with Topgolf completed on March 8, 2021, and (iii) $2.8 million of costs related to the implementation of new IT systems for Jack Wolfskin. The amount for the year ended December 31, 2020 includes certain non-recurring costs, including (i) $8.5 million in transaction, transition, and other non-recurring costs associated with the Topgolf Merger Agreement, (ii) $3.7 million of costs associated with the Company’s transition to its new North America Distribution Center; (iii) $3.8 million related to cost-reduction initiatives, including severance charges associated with workforce reductions due to the COVID-19 pandemic, and (iv) $1.5 million related to the implementation of new IT systems for Jack Wolfskin. The amount for the year ended December 31, 2019 includes $26.4 million of non-recurring transaction fees and transition costs associated with the acquisition of Jack Wolfskin completed in January 2019, as well as other non-recurring advisory fees.
(3)The $174.3 million goodwill and tradename impairment for the year ended December 31, 2020 was primarily related to an impairment in goodwill at Jack Wolfskin (see Note 9).
(4)The $252.5 million gain on Topgolf investment included in the year ended December 31, 2021 was related to the fair value step-up on the Company's pre-acquisition investment in Topgolf (see Note 10).
(5)Reconciling items represent unallocated corporate assets not segregated between the three segments including income taxes receivable, prepaid expense and other current assets. The $144.9 million increase in reconciling items in 2021 compared to 2020 was primarily due to an increase of $84.2 million in other current assets and an increase of $33.9 million in prepaid expenses.
(6)Additions to long-lived assets are comprised of purchases of property, plant and equipment.
(7)The $1,903.4 million increase in goodwill in 2021 compared to 2020 was primarily due to the Topgolf merger in March 2021 (see Note 9).
The Company markets its products in the United States and internationally, with its principal international markets being Japan and Europe. The tables below contain information about the geographical areas in which the Company operates. Net revenues are attributed to the location to which the product was shipped. Long-lived assets are based on location of domicile.
Net Revenues
Long-Lived
Assets(1)
(in thousands)
2021
United States$2,067,070 $1,383,614 
Europe499,533 48,854 
Japan243,848 7,205 
Rest of World322,996 11,729 
$3,133,447 $1,451,402 
2020
United States$778,600 $116,459 
Europe372,957 17,078 
Japan212,055 6,028 
Rest of World225,848 6,930 
$1,589,460 $146,495 
2019
United States$788,232 $103,111 
Europe428,628 19,148 
Japan246,260 5,655 
Rest of World237,943 4,846 
$1,701,063 $132,760 
____________
(1)In 2021, the Company re-evaluated its definition of long-lived assets to include property, plant and equipment. As a result, the information presented for 2020 and 2019 was recast to conform with the current year presentation.