Segment Information

12 Months Ended

Dec. 31, 2019

The Company’s operating segments are based on how the Chief Operating Decision Maker (“CODM”) makes decisions about assessing performance and allocating resources. The Company has four reportable segments that are organized on the basis of product categories. These segments include Titleist golf balls, Titleist golf clubs, Titleist golf gear and FootJoy golf wear.

The CODM primarily evaluates performance using segment operating income (loss). Segment operating income (loss) includes directly attributable expenses and certain shared costs of corporate administration that are allocated to the reportable segments, but excludes interest expense, net; the non-service cost component of net periodic benefit cost; transaction fees and other non-operating gains and losses as the Company does not allocate these to the reportable segments. The CODM does not evaluate a measure of assets when assessing performance.

Results shown for the years ended December 31, 2019, 2018 and 2017 are not necessarily those which would be achieved if each segment was an unaffiliated business enterprise. There are no intersegment transactions.

Information by reportable segment and a reconciliation to reported amounts are as follows:



	Year ended December 31,
(in thousands)	2019			2018			2017
Net sales
Titleist golf balls	$	551,596		$	523,967		$	512,041
Titleist golf clubs	434,357			445,341			397,987
Titleist golf gear	149,984			146,067			142,911
FootJoy golf wear	441,871			439,681			437,455
Other	103,549			78,665			69,864
Total net sales	$	1,681,357		$	1,633,721		$	1,560,258
Segment operating income
Titleist golf balls	$	93,305		$	78,973		$	78,419
Titleist golf clubs	38,811			45,156			32,084
Titleist golf gear	17,300			15,430			16,803
FootJoy golf wear	24,429			17,974			27,038
Other	15,043			15,560			14,904
Total segment operating income	188,888			173,093			169,248
Reconciling items:
Interest expense, net	(19,613		)	(18,402		)	(15,709		)
Non-service cost component of net periodic benefit cost	(2,917		)	(4,416		)	(3,520		)
Transaction fees	(2,654		)	(599		)	(686		)
Other	1,461			628			2,343
Total income before income tax	$	165,165		$	150,304		$	151,676

Depreciation and amortization expense by reportable segment are as follows:



	Year ended December 31,
(in thousands)	2019		2018		2017
Depreciation and amortization
Titleist golf balls	$	22,694	$	24,155	$	25,545
Titleist golf clubs	7,451		7,408		7,233
Titleist golf gear	1,603		1,531		1,425
FootJoy golf wear	6,451		6,731		6,058
Other	4,803		671		610
Total depreciation and amortization	$	43,002	$	40,496	$	40,871

Information as to the Company’s operations in different geographical areas is presented below. Net sales are categorized based on the location in which the sale originates.



	Year ended December 31,
(in thousands)	2019		2018		2017
Net sales
United States	$	884,791	$	826,111	$	789,879
EMEA ⁽¹⁾	230,465		219,803		205,200
Japan	182,681		199,107		201,264
Korea	223,365		221,146		200,394
Rest of world	160,055		167,554		163,521
Total net sales	$	1,681,357	$	1,633,721	$	1,560,258

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⁽¹⁾ Europe, the Middle East and Africa (“EMEA”)

Long-lived assets (property, plant and equipment, net) categorized based on their location of domicile are as follows:



	Year ended December 31,
(in thousands)	2019		2018
Long-lived assets
United States	$	148,883	$	146,596
EMEA	11,906		9,472
Japan	663		764
Korea	7,441		5,682
Rest of world ⁽²⁾	62,682		65,874
Total long-lived assets	$	231,575	$	228,388

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⁽²⁾ Includes manufacturing facilities in Thailand with long lived assets of $49.4 million and $52.2 million as of December 31, 2019 and 2018, respectively.