Golf Business Update 2012and

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%

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Golf Participation

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Golf Participation in Canada

2004 2005 2006 2007 2008 2009 2010 20117

8

9

10

11

12

13

14

15

16

17

16

15 15

15.9

11.3

15.3 15.3

14.415 15

16

13.3 13.413 13

13.3

BC Linear (BC) Canada

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Short Term Participant TrendParticipants (MM)

Core Occasional TOTAL1-yr Change -2.7% 0.0% -1.5%5-yr Change -17.7% -8.1% -13.8%30.0 29.8 29.5 28.6

27.1 26.1 25.7

44%

56%

Source: NGF golf participation study

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Core Golfers in Canada

Ontario Alberta BC Canada

6.3 6.65.3 5.3

3.8

5.3

3.6 3.6

5.2

4.9

5.54.4

10+ times3 - 9 times1 -2 times

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Golf Course Development

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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 18,41054%

TOTAL 33,331

South America 6032%

Oceania 2,0146%

Asia 4,42513%

Europe 7,01421%

Africa 8653%

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Looking Ahead

15

Consumer Confidence Index

Source: The Conference Board

through January 2013Index currently stands at 58.6

90 = Normal

16Source: Bureau of Economic Analysis - Last Revised on: October 26, 2012

Consumer Spending ImprovingReal Personal Consumption Expenditure Index

[Index numbers, 2005=100] Seasonally

adjusted

The Opportunity For Growth

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Definition: People who express an interest in playing golf, but have not yet started.

Latent Demand

Source: NGF/Synovate

HOW INTERESTED: Very 6 MMSomewhat 19 MMA Little 47 MM

Percent of non-golfing population over age 6

Q: How interested are you in playing golf now?

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Latent Demand Segments

Source: NGF/Synovate

Beginners (Never Played)

Those With Some Experience (Never Committed)1

Former Committed Golfers2

(1) Classified themselves as “Not” or “OK” (2) Classified themselves as “Fun”, “Hooked” or “Nut”

12

9

4

25

LatentVery/

Somewhat Interested

47%

37%

16%

100%

Percent

OfLatent

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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)

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Lapsed Participants

Source: NGF/Synovate

Definition: People age 18-69 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%

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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”

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*Average among those who keep score (79% of occasional; 95% of core)Source: NGF/Synovate

25.7 MillionGolfers

14.4 MCORE

(8+ Rounds)

11.3 MOCCASIONAL(1-7 Rounds)

• 6% of Rounds• 7% of Spend

• 94% of Rounds• 93% of Spend

Traditional View

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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

26Source: NGF/Synovate

25.7 MillionGolfers

Impact of Commitment

NOTS FRINGE CASUAL HOOKED NUTS

Golfers (MM) 2.3 3.3 11.3 6.2 2.6

Rounds 2% 4% 29% 41% 24%

Spend 3% 3% 32% 40% 22%

Rounds/Year 3 5 11 29 41

Avg Score 107 107 103 95 94

RetentionLikelihood* 38% 73% 93% 98% 97%

* Percent who say they will be playing in 2 years (Top 2 Box) unless physically unable

27Source: NGF/Synovate

Frequency vs. Commitment Segments

Commitment Category

CORE(8+ Rounds)

OCCASIONAL(1-7 Rounds)

Commitment Category

CasualCasualFringe

Fringe

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Attraction to the Game

Source: NGF/Synovate% mentioned as “one of the main reasons I like golf”

Reasons golfers like golf:

Nuts Hooked Casual Fringe NotsThe opportunity to spend time outdoors (nature, fresh air, etc) 59% 64% 54% 40% 47% 54%The social aspect – spending time with friends & family doing something we enjoy 55% 52% 46% 30% 37% 46%Ball striking – the feeling you get when you hit a great shot 60% 58% 40% 28% 15% 43%The challenge of the game – striving to improve – it’s never-ending 77% 62% 36% 17% 19% 42%The exercise – getting out for a good walk – staying active 44% 49% 44% 31% 33% 42%Stress relief – getting away from my every day pressures – an escape 47% 42% 36% 18% 20% 34%Golf courses – the variety of designs, scenery, landscape, etc. 54% 51% 28% 19% 21% 34%The values of the game (honesty, integrity, sportsmanship, etc.) 55% 33% 23% 7% 12% 25%The mental game – thinking my way around the course 52% 34% 23% 11% 8% 25%The competition – competing – the winning and losing 53% 26% 13% 6% 5% 18%Keeping score – measuring my performance against the course/previous rounds 47% 30% 10% 7% 5% 17%The game’s history & tradition - it’s one of the oldest sports in the world 42% 21% 9% 7% 5% 14%Practicing – spending time on the range or practice facility working on my game 35% 22% 9% 5% 6% 14%Opportunity to spend time with business clients/colleagues away from the offi ce 23% 11% 12% 10% 10% 12%

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Demographics

Source: NGF/Synovate

Not Fringe Casual Hooked Nuts

Male 7% 11% 43% 28% 11% 100%Female 17% 20% 44% 13% 6% 100%

Average Age 39 37 44 50 46

HH Income (000) $73 $92 $86 $84 $88

College graduate 64% 68% 61% 65% 64%

Married/ living with partner 73% 74% 69% 72% 67%

Have Kids at home 37% 35% 34% 26% 25%

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Completely Agree

The Underpinnings of Commitment

Source: NGF/Synovate

Correlation (r)(with

Commitment)

.46

.42

.42

.42

(5 on a 5 point scale)

HookedCasualFringe

COMPETENCE

COMFORT

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Competence & Comfort Lead to Retention

“Comfort” Index by Retention Likelihood*

* Likelihood to be playing 2 years from nowCompetence/Comfort factors scored and indexed to Hooked Golfers (100)

Source: NGF/Synovate

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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

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… and Perceiving Value

Fun Rating

Valu

e Ra

ting

Source: NGF/Synovate

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Commitment = Prioritization

COMMITMENT

AVERAGE

Avg. Income $73K $92K $86K $84K $88KSource: NGF/Synovate

Implications for Growing the Game