Golf Business Update 2012 and The Opportunity for Growth

2 Rounds Played

3 Rounds Played – 2012 YTD (Up 5.7% Nationally) +2.0% or higher +1.9% to -1.9% -2.0% or lower (% Change from previous year through December) New England (+3.2%) Mid Atlantic (+10.1%) South Atlantic (+2.4%) South Central (+5.0%) Pacific (+1.6%) Mountain (+7.0%) West N Central (+7.6%) East N Central (+10.8%) Source: Golf Datatech National Rounds Played Report in cooperation with PGA Performance Trak and the NGF. Based on a sample of approximately 4,000 reporting facilities

4 Factors Underlying Jump in Rounds Weather! PGA Performance Trak reports playable days up over 6.5% nationally Consumer Confidence and Spending Consumer confidence & spending have been gradually rising as the recession driven “hunker down” mentality starts to fade

5 Rounds Volume Source: Golf Datatech National Rounds Played Report % Change Year Over Year 5.7%

6 Golf Participation

7 Golf Participation in Canada

8 Short Term Participant Trend Participants ( MM ) % 56% Source: NGF golf participation study

9 Core Golfers in Canada

10 Golf Course Development

11 Number of facilities Source: NGF Growth of Golf Facilities Private Daily Fee Municipal

12 Net Change in Supply Net Change = new course openings minus permanent closures (18HEQ), not factoring in courses closing for, or reopening from, renovations Source: NGF Facility Tracking

International Golf Course Supply 199 Golfing Countries North America 18,410 54% TOTAL 33,331 South America 603 2% Oceania 2,014 6% Asia 4,425 13% Europe 7,014 21% Africa 865 3%

14 Looking Ahead

15 Consumer Confidence Index Source: The Conference Board through January 2013 Index currently stands at = Normal

16 Source: Bureau of Economic Analysis - Last Revised on: October 26, 2012 Consumer Spending Improving Real Personal Consumption Expenditure Index [Index numbers, 2005=100] Seasonally adjusted

The Opportunity For Growth

18 Definition: People who express an interest in playing golf, but have not yet started. Latent Demand Source: NGF/Synovate HOW INTERESTED: Very 6 MM Somewhat19 MM A Little47 MM Percent of non-golfing population over age 6 Q: How interested are you in playing golf now?

19 Latent Demand Segments Source: NGF/Synovate Beginners (Never Played) Those With Some Experience (Never Committed) 1 Former Committed Golfers 2 (1) Classified themselves as “Not” or “OK” (2) Classified themselves as “Fun”, “Hooked” or “Nut” Latent Very/Somewhat Interested 47% 37% 16% 100% Percent Of Latent

20 Demographics of Latent Demand Source: NGF/Synovate Golf’s latent demand skews: Female (48% versus 19% of all golfers) Average Income <$50K (44% versus 23% of all golfers) Younger – Under 30 (43% versus 28% of all golfers)

21 Lapsed Participants Source: NGF/Synovate Definition: People age who have not played in the past two years, but played at some point in the past Lapsed Participants 21.5 Million Lifetime golf experience of Nots and OKs: Played 1-2: 31% Played 3-9: 42% Played 10+: 27%

22 Demographics of Lapsed Participants Source: NGF/Synovate Lapsed participants skew: Female (41% versus 19% of all golfers) Average Income <$50K (38% versus 23% of all golfers)

Understanding Commitment to Golf From the “Nuts” to the “Nots”

24 *Average among those who keep score (79% of occasional; 95% of core) Source: NGF/Synovate 25.7 Million Golfers 25.7 Million Golfers 14.4 M CORE (8+ Rounds) 14.4 M CORE (8+ Rounds) 11.3 M OCCASIONAL (1-7 Rounds) 11.3 M OCCASIONAL (1-7 Rounds) 6% of Rounds 7% of Spend 94% of Rounds 93% of Spend Traditional View

25 I’m a “golf nut,” I love the game and it’s my favorite activity I’m “hooked,” it’s one of my favorite things to do I’m a “casual” golfer – it’s one of several ways I like to spend my recreational time Golf is OK, but I most often choose to do something else with my recreational time I don’t really consider myself a golfer, I play rarely and usually only at the urging of others Commitment Levels NUTS HOOKED CASUAL FRINGE NOTS

26 Source: NGF/Synovate 25.7 Million Golfers 25.7 Million Golfers Impact of Commitment NOTSFRINGECASUALHOOKEDNUTS Golfers (MM) Rounds2%4%29%41%24% Spend3% 32%40%22% Rounds/Year Avg Score Retention Likelihood* 38%73%93%98%97% * Percent who say they will be playing in 2 years (Top 2 Box) unless physically unable

27 Source: NGF/Synovate Frequency vs. Commitment Segments Commitment Category CORE (8+ Rounds) CORE (8+ Rounds) OCCASIONAL (1-7 Rounds) OCCASIONAL (1-7 Rounds) Commitment Category Casual Fringe

28 Attraction to the Game Source: NGF/Synovate % mentioned as “one of the main reasons I like golf” Reasons golfers like golf:

29 Demographics Source: NGF/Synovate

30 Completely Agree The Underpinnings of Commitment Source: NGF/Synovate Correlation (r) (with Commitment) (5 on a 5 point scale) Hooked Casual Fringe COMPETENCE COMFORT

31 Competence & Comfort Lead to Retention “Comfort” Index by Retention Likelihood* * Likelihood to be playing 2 years from now Competence/Comfort factors scored and indexed to Hooked Golfers (100) Source: NGF/Synovate

32 It Comes Down to Having Fun Q. All things considered, how much FUN is golf for you? (0-10 Scale; 10 = Really Fun) FUN COMMITMENT % Top 3 Box (8-10) Source: NGF/Synovate

33 … and Perceiving Value Fun Rating Value Rating Source: NGF/Synovate

34 Commitment = Prioritization COMMITMENT AVERAGE Avg. Income $73K$92K $86K$84K$88K Source: NGF/Synovate

Implications for Growing the Game