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Segment Information
 3 Months Ended
Mar. 31, 2020
Segment Reporting [Abstract]  
Segment Information
Note 19. Segment Information
The Company has two reportable operating segments: Golf Equipment operating segment and Apparel, Gear and Other operating segment. The Golf Equipment operating segment, which is comprised of golf club and golf ball products, includes 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 includes the newly acquired Jack Wolfskin outdoor apparel, gear and accessories business, the TravisMathew golf and lifestyle apparel and accessories business, and the Callaway and Ogio business, which consists of golf apparel and accessories, storage gear for sport and personal use, and royalties from licensing of the Company’s trademarks and service
marks for various soft goods products. There are no significant intersegment transactions during the three months ended March 31, 2020.
The tables below contain information utilized by management to evaluate its operating segments for the interim periods presented (in thousands).
 
Three Months Ended
March 31,
 
2020
 
2019(1)
Net sales:
 
 
 
Golf Equipment
$
291,661

 
$
323,619

Apparel, Gear and Other
150,615

 
192,578

 
$
442,276

 
$
516,197

Income before income taxes:
 
 
 
Golf Equipment
$
58,620

 
$
70,652

Apparel, Gear and Other
(3,799
)
 
22,060

Reconciling items(2)
(16,776
)
 
(34,655
)
 
$
38,045

 
$
58,057

Additions to long-lived assets:(3)
 
 
 
Golf Equipment
$
16,962

 
$
5,417

Apparel, Gear and Other
10,124

 
4,392

 
$
27,086

 
$
9,809

 

(1)
The Company continues to refine its expense allocation methodology between operating segments. As a result, the Company reclassified certain information technology expenses between the segments in the first quarter of 2019 in order to conform with the current presentation.
(2)
Reconciling items represent the deduction of corporate general and administration expenses and other income (expenses), which are not utilized by management in determining segment profitability. The decrease in reconciling items for the three months ended March 31, 2020 compared to March 31, 2019 was primarily due to an increase of $8,325,000 in net gains recognized on hedging contracts combined with a decrease, primarily in employee costs and general and administrative expenses, in the first quarter of 2020. Additionally, during the first quarter of 2019, the reconciling items included non-recurring charges of $4,723,000 in the first quarter of 2019 related to the acquisition of Jack Wolfskin. See Note 6 for information on the Company's credit facilities and long-term debt obligations.
(3)
Additions to long-lived assets are comprised of purchases of property, plant and equipment.