“Golf is deceptively simple and endlessly complicated”

Arnold Palmer

“We hope to facilitate through our ideas and strategy an increased recognition, appeal and influence for the United States Golf Association and the Royal and Ancient Golf Association”.

The 1990’s was a period of excitement and growth for the golfing industry. Golfing brands and equipment names such as “Ping” and “Big Bertha” became household names.

• Technology was at it’s peak with young entry level golfers on the rise.

• The gentlemen’s sport was reaching into young main stream America and was providing fun and a new sophistication for all classes of society.

• Technology was providing an easier entry into a very difficult sport.

Early successes for new golfers of driving the ball

more accurately and further reduced frustration and motivated young players to keep working at the sport.

“The harder you work, the luckier you get” Gary Player

Golf has always been a sport that takes countless hours of practice to achieve marginal success. No other sport affords a young golfer such a minimal amount of success with such a great amount of an investment of time and money.

The technological progress of the 1990’s

changed the daunting endeavor of the sport of golf into a fun and exciting sport that enjoyed a renewed national recognition.

“There’s no game like golf: you go out with three friends, play eighteen holes,

and return with three enemies”

The technological progress of golf equipment

became a concern to the USGA and the R&A by the late 1990’s.

The USGA and R&A placed restrictions on further technological advances on golfing equipment.

The result was an immediate and consistent annual decline in the sport of golf on every level.

Callaway’s Financial Ratios

• Net Profit Margin• Return on Assets• Return on Equity• Debt/Equity• Inventory Turnover• Current Ration• Times-Interest-Earned Ratio• Sales Mix

2009 2008 2007 2006 2005

-3.00%

-2.00%

-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

-2.20%

5.92%

4.85%

2.29%

1.33%

Net Profit Margin

Net Profit MArgin

2009 2008 2007 2006 2005

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

Return On Assets

ROA

2009 2008 2007 2006 2005

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

Return on Equity

ROE

2009 2008 2007 2006 20050

0.1

0.2

0.3

0.4

0.5

0.6

Debt/Equity

Debt/Equity

2009 2008 2007 2006 20052.2

2.3

2.4

2.5

2.6

2.7

2.8

Inventory Turnover

Inventory Turnover

2009 2008 2007 2006 20050

0.5

1

1.5

2

2.5

3

3.5

Current Ratio

Current Ratio

2009 2008 2007 2006 20050

2

4

6

8

10

12

14

16

18

20

Times-Interest-Earned Ratio

TIE Ratios

Drivers and Fairway Woods

Irons Putters Golf Balls Accessories0%

5%

10%

15%

20%

25%

30%

Sales Mix

Sales Mix ( Average 2004-2009)

Golf is no longer the thriving sport it once was in the

1990’s.

How do we create an appeal for the traditional sport of golf in contemporary times?

Callaway Golf would like to propose a solution

to the problems faced by the honorary governing bodies and the golf community as a whole.

“Resolve never to quit, never to give up, no matter what the situation” Jack Nicklaus

Our company asserts: • lifting the restrictions on the advances of golf

equipment technology for “particular usages” • co-operative marketing efforts of the golf

industry condoning new technology • the “seal of approval” from the USGA and the

R&A

The proposed changes will pave the way for the sport of golf to achieve a renewed national recognition.

Callaway Golf proposes that marketing efforts

emphasizing the acquisition of entry level skills thru core golfer status with high-tech golf equipment along with the acceptance of such practices by the golf community will immediately raise the level of awareness and interest in the sport of golf.

Callaway Golf proposes that the comprehensive marketing efforts are supported with:

• national high tech driving competitions and putting

competitions• open club golfing and an associated league supported by the

USGA and R&A• categorizing technologically advanced golf equipment into

classes and adjusting handicaps commensurate with the classifications

• incorporating supplementary pars for equipment classifications.

Callaway Golf’s marketing efforts have resulted in international brand recognition.

Callaway’s success was the benchmark for the industry for over a decade.

The status achieved by our company was the

result of our highly differentiated core competencies in research and development, our manufacturing processes and bringing new innovative products to market faster than any of our competitors.

“Golf is not a game of great shots. It’s a game of the most misses. The people who win make the smallest mistakes” Gene Littler

It is of “urgent” status that we implore you the

United States Golf Association and the Royal and Ancient Golf Association to join us and our industry members in our most ambitious goal of elevating the industry and sport of golf to new long-term heights of success.

We at Callaway Golf and our

industry constituents are certain that our vision and strategy approach will result in:

• a renewed interest in golf as a national recreational pastime and sport

• a further reaching gentlemen’s sport into all classes of society and the benefits there-of

• a greater influence on contemporary societal culture for the USGA and R&A

• industry profitability and growth

• job creation

As long-term leaders in our industry we look forward to moving forward in achieving our mutually beneficial industry, corporate and community goals together.