Segment Information

9 Months Ended

Sep. 30, 2023

Segment Reporting [Abstract]

Segment Information

Segment Information

We have three operating and reportable segments:

•Topgolf, which is primarily comprised of service revenues and expenses from our company-operated Topgolf venues, Toptracer ball-flight tracking technology, and WGT digital golf game;

•Golf Equipment, which 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; and

•Active Lifestyle, which 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 storage gear for sport and personal use. This segment also includes royalties from licensing of our trademarks and service marks for various soft goods products.

There were no significant intersegment transactions during the three and nine months ended September 30, 2023 or 2022.

The following table contains information utilized by management to evaluate our operating segments for the interim periods presented (in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net revenues:
Topgolf	$	447.7	$	413.8	$	1,322.0	$	1,139.5
Golf Equipment	293.4		296.7		1,188.1		1,216.6
Active Lifestyle	299.5		278.0		877.6		788.3
Total net revenues	$	1,040.6	$	988.5	$	3,387.7	$	3,144.4
Segment operating income:
Topgolf	$	38.9	$	23.6	$	85.7	$	74.3
Golf Equipment	35.2		49.6		213.2		250.7
Active Lifestyle	40.0		28.1		96.8		77.3
Total segment operating income	114.1		101.3		395.7		402.3
Reconciling items(1)	(40.3)		(33.1)		(125.4)		(110.8)
Total operating income	73.8		68.2		270.3		291.5
Interest expense, net	(52.3)		(36.4)		(153.6)		(100.3)
Other income, net	5.2		7.0		2.4		26.9
Total income before income taxes	$	26.7	$	38.8	$	119.1	$	218.1
Additions to property, plant, and equipment:
Topgolf	$	122.0	$	113.9	$	378.5	$	336.4
Golf Equipment	1.1		1.9		6.6		10.7
Active Lifestyle	4.9		6.9		16.2		17.7
Corporate	10.1		8.9		47.7		21.0
Total additions to long-lived assets	$	138.1	$	131.6	$	449.0	$	385.8
(1) Reconciling items include corporate general and administrative expenses not utilized by management in determining segment profitability, including incurred reorganization charges of $2.7 million and $5.8 million during the three and nine months ended September 30, 2023, respectively, to reorganize our IT functions and improve our organizational structure. We expect to incur total charges of approximately $13.0 million in connection with these initiatives, which we expect will be completed by the end of 2023 and are primarily comprised of severance benefits and legal fees. As of September 30, 2023, our total liability in accrued employee costs and benefits related to the reorganization was $2.4 million. Reconciling items in 2023 and 2022 also include the amortization and depreciation of acquired intangible assets, purchase accounting adjustments related to acquisitions and non-recurring costs associated with the integration of new IT systems stemming from acquisitions. In addition, 2022 also includes legal and credit agency fees related to the postponement of our debt refinancing, and charges related to the suspension of our Jack Wolfskin retail business in Russia due to the Russia-Ukraine war.