Constant dollars

ACUSHNET HOLDINGS CORP. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-Q)

The following discussion contains management's discussion and analysis of our
financial condition and results of operations and should be read together with
our unaudited condensed consolidated financial statements and the notes thereto
included elsewhere in this report. This discussion contains forward-looking
statements that reflect our plans, estimates and beliefs and involve numerous
risks and uncertainties, including but not limited to those described in
"Part II, Item 1A. Risk Factors" and elsewhere in this Quarterly Report on
Form 10-Q and in our other filings with the Securities and Exchange Commission
("SEC"). Actual results may differ materially from those contained in any
forward-looking statements. You should carefully read "Special Note Regarding
Forward-Looking Statements" following the Table of Contents. Unless otherwise
noted, the figures in the following discussion are unaudited.

Insight

We are the global leader in the design, development, manufacture and
distribution of performance-driven golf products, which are widely recognized
for their quality excellence. Today, we are the steward of two of the most
revered brands in golf - Titleist, one of golf's leading performance equipment
brands, and FootJoy, one of golf's leading performance wearable brands.

Our target market is dedicated golfers, who are the cornerstone of the worldwide
golf industry. These dedicated golfers are avid and skill-biased, prioritize
performance and commit the time, effort and money to improve their game. We
believe our focus on innovation and process excellence yields golf products that
represent superior performance and consistent product quality, which are the key
attributes sought after by dedicated golfers. Many of the game's professional
players, who represent the most dedicated golfers, prefer our products, thereby
validating our performance and quality promise, while also driving brand
awareness. We seek to leverage a pyramid of influence product and promotion
strategy, whereby our products are the most played by the world's best players,
creating aspirational appeal for a broad range of golfers who want to emulate
the performance of the game's best players.

We believe that our differentiated focus on performance and quality excellence, our enduring relationships with dedicated golfers, and our favorable and differentiating combination of consumable and durable products have been key drivers of our strong financial performance.

Our net sales are diversified by both product category and mix, as well as
geography. Our product categories include golf balls, golf clubs, wedges and
putters, golf shoes, golf gloves, golf gear and golf outerwear and apparel. Our
product portfolio contains a favorable mix of consumable products, which we
consider to be golf balls and golf gloves, and more durable products, which we
consider to be golf clubs, golf shoes, golf gear and golf outerwear and
apparel. Our net sales are also diversified by geography with a substantial
majority of our net sales generated in five countries: the United States, Japan,
Korea, the United Kingdom and Canada. We have the following reportable segments:
Titleist golf balls; Titleist golf clubs; Titleist golf gear; and FootJoy golf
wear.

Our financial results and operations continue to be impacted by the
macroeconomic environment, including the ongoing COVID-19 pandemic. Global
supply chain issues and the impact of inflation have resulted in constrained raw
material, component and sourced product availability and increased raw material
and other input costs, including higher freight expense. These increased costs
negatively impacted cost of sales for the three and six months ended June 30,
2022, resulting in a lower gross margin as compared to the three and six months
ended June 30, 2021. Inflation, particularly in the form of higher raw material
costs combined with higher shipping costs, is expected to remain an issue for
the remainder of 2022.

Key Performance Measures

We use a variety of financial measures to measure and evaluate our business, including, among others: (i) net sales in constant currencies, (ii) Adjusted EBITDA on a consolidated basis, (iii) Adjusted EBITDA margin on a a consolidated basis and (iv) segment operating income (loss).

Since a significant percentage of our net sales are generated outside of the
United States, we use net sales on a constant currency basis to evaluate the
sales performance of our business in period over period comparisons and for
forecasting our business going forward. Constant currency information allows us
to estimate what our sales performance would have been without changes in
foreign currency exchange rates. This information is calculated by taking the
current period local currency sales and translating them into U.S. dollars based
upon the foreign currency exchange rates for the applicable comparable prior
period. This constant currency information should not be considered in isolation
or as a substitute for any measure derived in

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in accordance with generally accepted accounting principles in United States
(“WE GAAP”). Our presentation of constant currency information may not be consistent with how similar measures are derived or used by other companies.

We primarily use Adjusted EBITDA on a consolidated basis to evaluate the
effectiveness of our business strategies, assess our consolidated operating
performance and make decisions regarding pricing of our products, go to market
execution and costs to incur across our business. We present Adjusted EBITDA as
a supplemental measure of our operating performance because it excludes the
impact of certain items that we do not consider indicative of our ongoing
operating performance. We define Adjusted EBITDA in a manner consistent with the
term "Consolidated EBITDA" as it is defined in our credit agreement. Adjusted
EBITDA represents net income (loss) attributable to Acushnet Holdings Corp. plus
interest expense, net, income tax expense (benefit), depreciation and
amortization and other items defined in the agreement, including: share-based
compensation expense; restructuring and transformation costs; certain
transaction fees; extraordinary, unusual or non-recurring losses or charges;
indemnification expense (income); certain pension settlement costs; certain
other non-cash (gains) losses, net and the net income relating to noncontrolling
interests. Adjusted EBITDA is not a measurement of financial performance under
U.S. GAAP. It should not be considered an alternative to net income (loss)
attributable to Acushnet Holdings Corp. as a measure of our operating
performance or any other measure of performance derived in accordance with U.S.
GAAP. In addition, Adjusted EBITDA should not be construed as an inference that
our future results will be unaffected by unusual or non-recurring items, or
affected by similar non-recurring items. Adjusted EBITDA has limitations as an
analytical tool, and you should not consider such measure either in isolation or
as a substitute for analyzing our results as reported under U.S. GAAP. Our
definition and calculation of Adjusted EBITDA is not necessarily comparable to
other similarly titled measures used by other companies due to different methods
of calculation. For a reconciliation of Adjusted EBITDA to net income (loss)
attributable to Acushnet Holdings Corp., see "-Results of Operations" below.

We also use Adjusted EBITDA margin on a consolidated basis, which measures our
Adjusted EBITDA as a percentage of net sales, because our management uses it to
evaluate the effectiveness of our business strategies, assess our consolidated
operating performance and make decisions regarding pricing of our products, go
to market execution and costs to incur across our business. We present Adjusted
EBITDA margin as a supplemental measure of our operating performance because it
excludes the impact of certain items that we do not consider indicative of our
ongoing operating performance. Adjusted EBITDA margin is not a measurement of
financial performance under U.S. GAAP. It should not be considered an
alternative to any measure of performance derived in accordance with U.S. GAAP.
In addition, Adjusted EBITDA margin should not be construed as an inference that
our future results will be unaffected by unusual or non-recurring items, or
affected by similar non-recurring items. Adjusted EBITDA margin has limitations
as an analytical tool, and you should not consider such measure either in
isolation or as a substitute for analyzing our results as reported under U.S.
GAAP. Our definition and calculation of Adjusted EBITDA margin is not
necessarily comparable to other similarly titled measures used by other
companies due to different methods of calculation.

Lastly, we use segment operating income (loss) to evaluate and assess the
performance of each of our reportable segments and to make budgeting decisions.
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; restructuring charges;
the non-service cost component of net periodic benefit cost; transaction fees
and other non-operating gains and losses as we do not allocate these to the
reportable segments.

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Operating results

The following table sets forth, for the periods indicated, our results of
operations.

                                                             Three months ended                       Six months ended
                                                                  June 30,                                June 30,
(in thousands)                                             2022               2021                2022                 2021
Net sales                                              $ 658,599          $ 624,850          $ 1,264,686          $ 1,205,735
Cost of goods sold                                       314,993            290,424              604,081              560,570
Gross profit                                             343,606            334,426              660,605              645,165
Operating expenses:
Selling, general and administrative                      239,167            210,255              434,858              386,624
Research and development                                  13,938             13,021               27,914               25,350
Intangible amortization                                    1,954              1,970                3,917                3,942

Income from operations                                    88,547            109,180              193,916              229,249
Interest expense, net                                      2,091              1,848                3,368                5,464
Other expense, net                                         2,147                239                3,473                2,231
Income before income taxes                                84,309            107,093              187,075              221,554
Income tax expense                                        16,070             24,573               36,989               52,407
Net income                                                68,239             82,520              150,086              169,147
Less: Net income attributable to noncontrolling
interests                                                 (1,785)            (1,435)              (2,587)              (3,104)
Net income attributable to Acushnet
Holdings Corp.                                         $  66,454          $  81,085          $   147,499          $   166,043
Adjusted EBITDA:
Net income attributable to Acushnet
Holdings Corp.                                         $  66,454          $  81,085          $   147,499          $   166,043
Interest expense, net                                      2,091              1,848                3,368                5,464
Income tax expense                                        16,070             24,573               36,989               52,407
Depreciation and amortization                             10,298             10,275               20,665               20,638
Share-based compensation                                   6,969              8,277               12,322               13,810

Other extraordinary, unusual or non-recurring
items, net                                                 2,790                271                3,025                1,582

Net income attributable to noncontrolling
interests                                                  1,785              1,435                2,587                3,104
Adjusted EBITDA                                        $ 106,457          $ 127,764          $   226,455          $   263,048
Adjusted EBITDA margin                                      16.2  %            20.4  %              17.9  %              21.8  %




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Three months completed June 30, 2022 Compared to the three months ended June 30, 2021

Net sales by segment to be presented can be summarized as follows:

                                                          Three months ended                                                                                             Constant Currency
                                                               June 30,                                     Increase/(Decrease)                                         Increase/(Decrease)
(in millions)                                            2022                2021                     $ change                       % change                     $ change                     % change
Titleist golf balls                                $    201.3             $ 202.3          $            (1.0)                             (0.5) %       $           6.6                              3.3  %
Titleist golf clubs                                     164.2               152.8                       11.4                               7.5  %                  18.9                             12.4  %
Titleist golf gear                                       69.1                65.0                        4.1                               6.3  %                   8.0                             12.3  %
FootJoy golf wear                                       177.9               164.6                       13.3                               8.1  %                  22.5                             13.7  %



Net sales information by region is summarized as follows:

                                                    Three months ended                                                                                          Constant Currency
                                                         June 30,                                     Increase/(Decrease)                                      Increase/(Decrease)
(in millions)                                      2022                2021                     $ change                       % change                  $ change                  % change
United States                                $    351.4             $ 315.3          $            36.1                              11.4  %       $              36.1                   11.4  %
EMEA (1)                                           91.9                97.4                       (5.5)                             (5.6) %                       5.1                    5.2  %
Japan                                              38.4                45.6                       (7.2)                            (15.8) %                      (0.7)                  (1.5) %
Korea                                              98.5                97.0                        1.5                               1.5  %                      13.3                   13.7  %
Rest of world                                      78.4                69.6                        8.8                              12.6  %                      12.2                   17.5  %
Total net sales                              $    658.6             $ 624.9          $            33.7                               5.4  %       $              66.0                   10.6  %

__________________________________________________________________

(1) Europethe Middle East and Africa (“EMEA”)

Segment operating income by segment to be presented can be summarized as follows:

                                    Three months ended
(in millions)                            June 30,                      Increase/(Decrease)
Segment operating income             2022             2021            $ change           % change
Titleist golf balls           $     29.3            $ 40.5      $            (11.2)       (27.7) %
Titleist golf clubs                 29.1              29.4                    (0.3)        (1.0) %
Titleist golf gear                  11.7              12.4                    (0.7)        (5.6) %
FootJoy golf wear                   12.0              21.0                    (9.0)       (42.9) %


Net Sales

For the three months ended June 30, 2022, net sales increased 5.4%, or 10.6% on
a constant currency basis, as compared to the three months ended June 30, 2021.
The increase was driven by growth across all reportable segments primarily as a
result of higher sales volumes and higher average selling prices.

Net sales in the United States were higher across all reportable segments
primarily driven by an increase of $14.0 million in Titleist golf clubs and
$13.3 million in FootJoy golf wear. The increase in Titleist golf clubs was
primarily driven by higher sales volumes of our newly introduced SM9 wedges, T
Series irons and Phantom X putters, partially offset by lower sales volumes of
drivers, fairways and hybrids. The increase in FootJoy golf wear was primarily
due to higher average selling prices and sales volumes in footwear.

Net sales in regions outside the United States decreased 0.8% or increased 9.7%
on a constant currency basis. In Korea, the increase was primarily due to
increases in FootJoy golf wear, Titleist golf gear and Titleist golf clubs. In
EMEA and Rest of World, net sales increased across all reportable segments. In
Japan, net sales increased in all reportable segments except Titleist golf
clubs.
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Gross profit

Gross profit increased $9.2 million for the three months ended June 30, 2022
compared to the three months ended June 30, 2021. Gross margin decreased to
52.2% for the three months ended June 30, 2022 compared to 53.5% for the three
months ended June 30, 2021. The increase in gross profit primarily resulted from
an increase of $5.8 million in Titleist golf clubs primarily due to higher sales
volumes, an increase of $3.5 million in FootJoy golf wear due to higher sales
volumes and average selling prices in footwear and an increase of $2.1 million
in Titleist golf gear due to higher sales volumes and average selling prices.
These increases were partially offset by a decrease of $6.4 million in Titleist
golf balls due to higher manufacturing costs and increased inbound freight costs
across all reportable segments.

The decline in gross margin was primarily due to higher inbound freight costs in all reportable segments, as well as higher manufacturing costs for Titleist golf balls.

Selling, general and administrative expenses

SG&A expenses increased $28.9 million for the three months ended June 30, 2022
compared to the three months ended June 30, 2021. This increase was comprised of
an increase of $15.1 million in selling expense as a result of higher sales
volumes and higher third party distribution expenses in FootJoy golf wear and
Titleist golf gear, an increase of $7.9 million in administrative expense
primarily due to higher consulting expenses driven by information
technology-related project spending and employee-related costs and an increase
of $3.0 million in advertising and promotional expenses.

Other expenses, net

Other expense, net increased $1.9 million for the three months ended June 30,
2022 compared to the three months ended June 30, 2021 and was primarily due to
changes in the fair value of the assets of the Rabbi trust.

income tax expense

Income tax expense decreased $8.5 million for the three months ended June 30,
2022 compared to the three months ended June 30, 2021. Our effective tax rate
("ETR") was 19.1% for the three months ended June 30, 2022 compared to 22.9% for
the three months ended June 30, 2021. The change in the ETR was primarily driven
by changes in our jurisdictional mix of earnings.

Sector results

Segment Titleist Golf Balls

Net sales in our Titleist golf balls segment decreased 0.5%, or increased 3.3%
on a constant currency basis, for the three months ended June 30, 2022 compared
to the three months ended June 30, 2021. The increase on a constant currency
basis reflects improvement of certain raw material availability.

Operating income in our Titleist golf balls segment decreased $11.2 million, or
27.7% compared to the prior year period. The decrease in operating income
resulted from lower gross profit and higher operating expenses. Gross profit
decreased $6.4 million primarily as a result of higher manufacturing costs.
Operating expenses increased primarily as a result of increases of $2.0 million
and $1.7 million in administrative and selling expenses, respectively.

Titleist Golf Club Segment

Net sales in our Titleist golf clubs segment increased 7.5%, or 12.4% on a
constant currency basis, for the three months ended June 30, 2022 compared to
the three months ended June 30, 2021. The increase was largely due to higher
sales volumes of our newly introduced T-Series irons launched in the fourth
quarter of 2021, SM9 wedges launched in the first quarter of 2022 and Phantom X
putters launched in the second quarter of 2022. This increase was partially
offset by lower sales volumes of drivers, fairways and hybrids which were all in
their second model year and were also impacted by component shortages and
delays.

Operating income in our Titleist golf clubs segment decreased $0.3 million, or
1.0% compared to the prior year period. The decrease in operating income
resulted from higher operating expenses, partially offset by higher gross
profit. Gross profit increased $5.8 million primarily driven by higher sales
volumes, partially offset by increased inbound freight costs. Higher operating
expenses were primarily a result of increases of $3.1 million and $2.6 million
in administrative and selling expenses, respectively.

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Titleist Golf Equipment Segment

Net sales in our Titleist golf gear segment increased 6.3%, or 12.3% on a
constant currency basis, for the three months ended June 30, 2022 compared to
the three months ended June 30, 2021. The increase was largely due to higher
sales volumes and higher average selling prices. Sales volumes were higher
across all product categories except golf bags, which were impacted by supply
chain and fulfillment constraints.

Operating income in our Titleist golf gear segment decreased $0.7 million, or
5.6% compared to the prior year period. The decrease in operating income
resulted from higher operating expenses, partially offset by higher gross
profit. Gross profit increased $2.1 million primarily driven by higher sales
volumes and higher average selling prices, partially offset by increased inbound
freight costs. Operating expenses increased primarily as a result of an increase
of $1.9 million in selling expense primarily due to higher third party
distribution expenses.

FootJoy Golf Apparel Segment

Net sales in our FootJoy golf wear segment increased 8.1%, or 13.7% on a
constant currency basis, for the three months ended June 30, 2022 compared to
the three months ended June 30, 2021. The increase was due to higher net sales
across all product categories, primarily in footwear due to higher sales volumes
and average selling prices.

Operating income in our FootJoy golf wear segment decreased $9.0 million, or
42.9% compared to the prior year period. The decrease in operating income
resulted from higher operating expenses, partially offset by higher gross
profit. Gross profit increased $3.5 million primarily driven by higher sales
volumes, partially offset by increased inbound freight costs. Higher operating
expenses were primarily as a result of increases of $8.5 million in selling
expense primarily due to higher third party distribution expenses and $2.1
million and $2.0 million in advertising and promotion and administrative
expenses, respectively.

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Semester completed June 30, 2022 Compared to the half-year ended June 30, 2021

Net sales by segment to be presented can be summarized as follows:

                                                    Six months ended                                                                                

Constant currency

                                                        June 30,                              Increase/(Decrease)                                  Increase/(Decrease)
(in millions)                                     2022              2021                $ change                 % change                     $ change                    % change
Titleist golf balls                           $   365.1          $ 375.9          $            (10.8)                 (2.9) %       $           0.5                             0.1  %
Titleist golf clubs                               325.0            308.6                        16.4                   5.3  %                  28.4                             9.2  %
Titleist golf gear                                113.3            118.1                        (4.8)                 (4.1) %                   0.5                             0.4  %
FootJoy golf wear                                 375.4            324.1                        51.3                  15.8  %                  67.5                            20.8  %

Net sales information by region is summarized as follows:

                                                      Six months ended                                                                                          Constant Currency
                                                          June 30,                                    Increase/(Decrease)                                      Increase/(Decrease)
(in millions)                                      2022               2021                      $ change                       % change                  $ change                  % change
United States                                  $   646.5          $   624.0          $            22.5                               3.6  %       $              22.5                    3.6  %
EMEA                                               204.2              177.9                       26.3                              14.8  %                      43.4                   24.4  %
Japan                                               84.2              102.0                      (17.8)                            (17.5) %                      (7.1)                  (7.0) %
Korea                                              184.2              176.1                        8.1                               4.6  %                      26.9                   15.3  %
Rest of world                                      145.6              125.7                       19.9                              15.8  %                      24.6                   19.6  %
Total net sales                                $ 1,264.7          $ 1,205.7          $            59.0                               4.9  %       $             110.3                    9.1  %

Segment operating income by segment to be presented can be summarized as follows:

                                   Six months ended
(in millions)                          June 30,                     Increase/(Decrease)
Segment operating income           2022            2021            $ change           % change
Titleist golf balls           $    62.6          $ 74.8      $            (12.2)       (16.3) %
Titleist golf clubs                61.3            71.2                    (9.9)       (13.9) %
Titleist golf gear                 13.8            22.1                    (8.3)       (37.6) %
FootJoy golf wear                  43.3            49.1                    (5.8)       (11.8) %


Net Sales

For the six months ended June 30, 2022, net sales increased 4.9%, or 9.1% on a
constant currency basis, compared to the six months ended June 30, 2021. The
increase was primarily related to an increase in FootJoy golf wear driven by
higher sales volumes across all product categories and an increase in Titleist
golf clubs primarily driven by higher sales volumes of our newly introduced SM9
wedges, T-Series irons and Phantom X putters.

The increase in net sales in the United States was primarily as a result of an
increase of $15.6 million in FootJoy golf wear and an increase of $13.2 million
in Titleist golf clubs. The increase in FootJoy golf wear was primarily due to
higher average selling prices and sales volumes in footwear. The increase in
Titleist golf clubs was primarily driven by higher sales volumes of our newly
introduced SM9 wedges, T-Series irons and Phantom X putters. These increases
were partially offset by a decrease of $8.0 million in Titleist golf balls,
primarily as a result of limited availability of certain raw materials.

Net sales in regions outside the United States increased 6.3%, or 15.1% on a
constant currency basis. In EMEA, net sales increased across all reportable
segments, primarily due to the adverse impact of government-ordered shutdowns in
this region in the first quarter of 2021. In Korea, net sales increased in all
reportable segments, except Titleist golf gear, which was impacted by supply
chain constraints. In Japan, net sales decreased primarily due to supply chain
and fulfillment constraints. In Rest of world, net sales increased across all
reportable segments.

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Gross profit

Gross profit increased $15.4 million for the six months ended June 30, 2022
compared to the six months ended June 30, 2021. Gross margin decreased to 52.2%
for the six months ended June 30, 2022 compared to 53.5% for the six months
ended June 30, 2021. The increase in gross profit primarily resulted from an
increase of $15.2 million in FootJoy golf wear and an increase of $2.6 million
in Titleist golf clubs, both primarily due to sales volume increases. These
increases were partially offset by a decrease of $4.8 million and $4.2 million
in Titleist golf balls and Titleist golf gear, respectively, and increased
inbound freight costs across all reportable segments.

Lower gross margin primarily due to higher inbound transportation costs across all reportable segments, higher manufacturing costs for Titleist golf balls, as well as higher club component costs Titleist Golf Club.

Selling, general and administrative expenses

SG&A expenses increased $48.3 million for the six months ended June 30, 2022
compared to the six months ended June 30, 2021. This increase was primarily due
to an increase of $26.0 million in selling expense due to higher sales volumes,
higher distribution expenses and higher employee related costs, an increase of
$13.3 million in administrative expense primarily due to higher consulting
expenses driven by information technology-related project spending and an
increase of $5.1 million in advertising and promotional expenses across all
reportable segments.

Research and development

R&D spending increased $2.5 million for the six months ended June 30, 2022
compared to the half-year ended June 30, 2021 and was mainly related to an increase in personnel costs.

Interest expense, net

Interest expense, net decreased $2.1 million for the six months ended June 30,
2022 compared to the six months ended June 30, 2021. This decrease was primarily
due to a decrease in losses from interest rate swaps and a decrease in the
amortization of debt issuance costs.

Other expenses, net

Other expense, net increased $1.3 million for the six months ended June 30, 2022
compared to the six months ended June 30, 2021 and was primarily due to changes
in the fair value of the assets of the Rabbi trust.

income tax expense

Income tax expense decreased $15.4 million for the six months ended June 30,
2022 compared to the six months ended June 30, 2021. Our ETR was 19.8% for the
six months ended June 30, 2022 compared to 23.7% for the six months ended June
30, 2021. The decrease in the ETR was primarily driven by changes in our
jurisdictional mix of earnings.

Sector results

Segment Titleist Golf Balls

Net sales in our Titleist golf balls segment decreased 2.9%, or increased 0.1%
on a constant currency basis, for the six months ended June 30, 2022 compared to
the six months ended June 30, 2021. The increase on a constant currency basis
reflects improvement of certain raw material availability.

Operating income in our Titleist golf balls segment decreased $12.2 million, or
16.3% compared to the prior year period. The decrease in operating income
resulted from higher operating expenses and lower gross profit. The lower gross
profit was driven by higher manufacturing costs and by higher inbound freight
costs. Operating expenses increased primarily as a result of increases of $3.7
million and $1.9 million in administrative and selling expenses, respectively.

Titleist Golf Club Segment

Net sales in our Titleist golf clubs segment increased 5.3%, or 9.2% on a
constant currency basis, for the six months ended June 30, 2022 compared to the
six months ended June 30, 2021. The increase was largely due to higher sales
volumes of our newly introduced SM9 wedges launched in the first quarter of
2022, T-Series irons launched in the fourth quarter of 2021 and Phantom X
putters launched in the second quarter of 2022. This increase was partially
offset by lower sales volumes of

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drivers, hybrids and fairways which were all in their second model year and were also affected by component shortages and delays.

Operating income in our Titleist golf clubs segment decreased $9.9 million, or
13.9% compared to the prior year period. The decrease in operating income
resulted from higher operating expenses, partially offset by higher gross profit
of $2.6 million. The increase in gross profit was primarily due to higher sales
volumes, partially offset by increased inbound freight and component costs.
Higher operating expenses were primarily as a result of an increase of $5.0
million in selling expense primarily due to higher distribution expenses and an
increase of $4.4 million in administrative expenses.

Titleist Golf Equipment Segment

Net sales in our Titleist golf gear segment decreased 4.1%, or increased 0.4% on
a constant currency basis, for the six months ended June 30, 2022 compared to
the six months ended June 30, 2021. The increase on a constant currency basis
was primarily due to higher average selling prices across all product
categories, partially offset by sales volume decreases in golf bags and headwear
product categories due to supply chain and fulfillment constraints.

Operating income in our Titleist golf gear segment decreased $8.3 million, or
37.6% compared to the prior year period. The decrease in operating income
resulted from lower gross profit of $4.2 million and higher operating expenses.
Gross profit decreased due to the sales volume decrease and increased inbound
freight costs. Operating expenses increased primarily as a result of an increase
of $2.6 million in selling expense due to higher third party distribution
expenses.

FootJoy Golf Apparel Segment

Net sales of our FootJoy golf apparel segment increased 15.8%, or 20.8% at constant exchange rates, for the six months ended June 30, 2022 compared to the half-year ended June 30, 2021. The increase is primarily attributable to higher sales volumes and higher average selling prices across all product categories.

Operating income in our FootJoy golf wear segment decreased $5.8 million, or
11.8% compared to the prior year period. The decrease in operating income
resulted from higher operating expenses partially offset by higher gross profit
of $15.2 million. Gross profit increased primarily as a result of the sales
volume increase and higher average selling prices, partially offset by increased
inbound freight costs. Operating expenses increased primarily as a result of an
increase of $15.0 million in selling expense due to higher sales volumes, higher
third party distribution expenses and higher retail commission expense in Korea,
as well as an increase of $3.5 million in administrative expense.

Cash and capital resources

Our primary cash needs relate to working capital, capital expenditures,
servicing our debt, paying dividends, pension contributions and repurchasing
shares of our common stock. We expect to rely on cash flows from operations and
borrowings under our revolving credit facility and local credit facilities as
our primary sources of liquidity.

Our liquidity is impacted by our level of working capital, which is cyclical as
a result of the general seasonality of our business. Our accounts receivable
balance is generally at its highest starting at the end of the first quarter and
continuing through the second quarter, and declines during the third and fourth
quarters as a result of both an increase in cash collections and lower sales.
Our inventory balance also fluctuates as a result of the seasonality of our
business. Generally, our buildup of inventory starts during the fourth quarter
and continues through the first quarter and into the beginning of the second
quarter in order to meet demand for our initial sell-in during the first quarter
and reorders in the second quarter. Both accounts receivable and inventory
balances are impacted by the timing of new product launches.

As of June 30, 2022, we had $107.4 million of unrestricted cash and cash
equivalents (including $14.4 million attributable to our FootJoy golf shoe
variable interest entity). As of June 30, 2022, 86.1% of our total unrestricted
cash and cash equivalents was held at our non-U.S. subsidiaries, including our
FootJoy golf shoe variable interest entity. We manage our worldwide cash
requirements by monitoring the funds available among our subsidiaries and
determining the extent to which we can access those funds on a cost effective
basis. We are not aware of any restrictions on repatriation of these funds and,
subject to foreign withholding taxes, those funds could be repatriated, if
necessary. We have repatriated, and intend to repatriate, funds to the United
States from time to time to satisfy domestic liquidity needs arising in the
ordinary course of business, including liquidity needs related to debt service
requirements.

As noted previously, the macroeconomic environment, including the ongoing
COVID-19 pandemic, could impact our results of operations in ways we cannot
currently predict. Nonetheless, we believe that cash expected to be provided by
operating activities, together with our cash on hand and the availability of
borrowings under our revolving credit facility and

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our local credit facilities (subject to customary borrowing conditions) will be
sufficient to meet our liquidity requirements for at least the next 12 months.
Our ability to generate sufficient cash flows from operations is, however,
subject to many risks and uncertainties, including current and future economic
trends and conditions, demand for our products, availability and cost of our raw
materials and components, foreign currency exchange rates and other risks and
uncertainties applicable to our business, as described in our Annual Report on
Form 10-K for the year ended December 31, 2021.

Debt and financing agreements

As of June 30, 2022, we had $319.2 million of availability under our revolving
credit facility after giving effect to $8.6 million of outstanding letters of
credit. Additionally, we had $33.7 million available under our local credit
facilities.

Subsequent to the end of the quarter, on August 2, 2022, we amended our current
credit facility to, among other things, provide a $950.0 million multi-currency
revolving credit facility and amend rates per annum at which borrowings in
different denominations bear interest.On August 2, 2022, proceeds from
borrowings under the multi-currency revolving credit facility were used to,
among other things, prepay in full our outstanding term loans and refinance our
outstanding borrowings under the revolving credit facility. See "Notes to
Unaudited Condensed Consolidated Financial Statements - Note 5 - Debt and
Financing Arrangements," Item 1 of Part I included elsewhere in this report for
a description of our amended credit agreement.

Our credit agreement contains customary affirmative and restrictive covenants,
including, among others, financial covenants based on our leverage and interest
coverage ratios. The credit agreement also includes customary events of default,
the occurrence of which, following any applicable cure period, would permit the
lenders to, among other things, declare the principal, accrued interest and
other obligations to be immediately due and payable. As of June 30, 2022, we
were in compliance with all covenants under the credit agreement.

See "Notes to Consolidated Financial Statements-Note-10-Debt and Financing
Arrangements" in our Annual Report on Form 10-K for the year ended December 31,
2021 for a description of our credit facilities and related credit agreement.
Additionally, see "Risk Factors - Risks Related to Our Indebtedness" as
described in our Annual Report on Form 10-K for the year ended December 31, 2021
for further discussion surrounding the risks and uncertainties related to our
credit facilities.

Dividend and share buyback program

As of June 30, 2022, our Board of Directors had authorized us to repurchase up
to an aggregate of $350.0 million of our issued and outstanding common stock.
During the six months ended June 30, 2022, we repurchased 2,114,024 shares of
common stock at an average price of $46.44 for an aggregate of $98.2 million.
Included in this amount were 699,819 shares of common stock repurchased from
Magnus Holdings Co., Ltd. ("Magnus"), a wholly-owned subsidiary of Fila Holdings
Corp., for an aggregate of $37.5 million on January 24, 2022, in satisfaction of
our obligations pursuant to our previously disclosed Magnus share repurchase
agreement.

On June 16, 2022, the Company entered into a new agreement with Magnus to
purchase from Magnus an equal amount of its common stock as it purchases on the
open market, up to an aggregate of $75.0 million at the same weighted average
per share price (the "2022 Agreement").

As of June 30, 2022, we had $150.0 million remaining under the current share
repurchase authorization, including $75.0 million related to the 2022 Agreement.
On July 26, 2022, our Board of Directors authorized us to repurchase up to an
additional $100.0 million of our issued and outstanding common stock, bringing
the total authorization up to $450.0 million since the share repurchase program
was established in 2019. See "Notes to Unaudited Condensed Consolidated
Financial Statements-Note-10-Common Stock," Item 1 of Part I included elsewhere
in this report for a description of our share repurchase program and Magnus
share repurchase agreements.

During the six months ended June 30, 2022, we paid dividends on our common stock
of $26.9 million to our shareholders. During the third quarter of 2022, our
Board of Directors declared a dividend of $0.18 per share of common stock to
shareholders of record as of September 2, 2022 and payable on September 16,
2022.

Capital expenditure

We made $20.5 million of capital expenditures during the six months ended June
30, 2022. Capital expenditures for the full year are expected to be
approximately $60 million, although the actual amount may vary depending upon a
variety of factors, including the timing of certain capital project
implementations and receipt of capital purchases due to supply chain challenges.
Capital expenditures generally relate to investments to support the
manufacturing and distribution of products, our go-to-market activities and
continued investments in information technology to support our global strategic
initiatives.

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