These diff erentiated technologies and products 2018 PRODUCTS We entered 2018 with football fi eld would weigh less than a gram. would not be possible without the investment in incredible excitement about our new products. Graphene is derived from graphite and was only o u r c o r e b u s i n e s s to c o n t i n u e to p u r s u e i n n ov a t i o n We started the year fast with multiple launches isolated in 2004 by two scientists who were and performance. For example, at a time when in January, including our new line of Rogue awarded the Nobel Prize in Physics for their other equipment companies are unable to invest, woods and irons, Mack Daddy 4 wedges, work. Incorporating Graphene powder into the we have committed to a signifi cant production and the next generation of Chrome Soft and Dual Sof tFast Core’s outer layer allows that layer cell expansion in our golf ball plant in Chicopee, Chrome Soft X balls, among others. Early to be thinner and stronger, making possible a MA, as well as other resources. response has been very positive, with the softer inner core that enhances the performance Rogue and Odyssey O-Works lines excelling in of our Dual SoftFast Core technology. The thin, In 2017 we strategically LARGER FOOTPRINT key consumer tests like the Golf Digest Hot List strong outer core also gives the cover and sub- invested in complementary areas, enhancing and GOLF Magazine ClubTest. mantle a fi rmer foundation to react against at our footprint in golf while providing a platform impact, promoting more spin off the short irons, for growth in the lifestyle category. These There are three Rogue drivers: Rogue, Rogue including pitches and chips where golfers are acquisitions included the aforementioned OGIO Draw and Rogue Sub Zero. All employ an always seeking more shot-stopping spin. and TravisMathew. OGIO designs and sells bags, improved synergy between our Jailbreak and accessories and apparel for the golf, lifestyle, X-Face technologies to create what we call THE GAME OF GOLF The health of the motorsports and endurance categories on the Jailbreak Eff ect, which promotes fast ball game of golf is holding steady, and positive a global basis. TravisMathew, a high-growth speed across a huge area of the club face to indicators abound. Two good signs are that golf and lifestyle apparel company, continues junior participation is up, and the overall golf to grow in popularity among a wide range population is becoming more diverse. Golf of consumers. I am pleased to report both alternatives like Topgolf and simulator leagues investments are off to a terrifi c start. The foundation continue to entice non-players to try the game, and a National Golf Foundation study found Callaway’s momentum TOUR INVESTMENTS of our sustained that most people who fi rst experience golf is increasingly evident in our presence on through one of these non-traditional avenues professional Tours across the globe where success remains are highly likely to try it on a golf course. we have continued to invest, particularly in our capacity for an abundance of talented young players such Meanwhile, positive indicators for our future as 2017 PGA Tour Rookie of the Year Xander developing innova- include a reduction in fi eld inventory and a Schaufele, Michelle Wie, , healthier retail channel. Average selling prices Adam Hadwin, Daniel Berger, , tive technologies have increased and product life cycles have Wesley Bryan, Kevin Kisner, Ollie Schniederjans, lengthened. We are pleased with the current Thomas Pieters, Alex Noren, Si Woo Kim, Aaron and products in trends and believe the market corrections of Wise, Sam Burns, Curtis Luck, Hudson Swaff ord, every equipment the past few years will benefi t the industry in and . the long run. category. Of course, the signing that has received the In closing, 2017 was exceptional for Callaway, most attention is our welcoming of reigning and marked our sixth consecutive year of Masters Champion Sergio Garcia, a true global improvement and growth. It has been a superstar and fan favorite who has won more help golfers reap outstanding distance more demanding journey that has required a great than 30 times around the world, and has been a often. There are three Rogue irons: Rogue, deal of research, analysis and discipline to Ryder Cup mainstay for Europe for two decades. Rogue X and Rogue Pro. All have thin, fast faces combine successful core business initiatives with Sergio’s ball-striking ability is legendary, and to promote fast ball speed and long distance. promising strategic investments. Challenges we are excited to see the diff erence Callaway Thin-faced irons have categorically suff ered and much hard work remain, of course, yet equipment will make in his game. Last but not from high vibration and poor feel, however we have put ourselves in a place of strength least are longtime and loyal Callaway Tour Staff attempts to quiet the vibration slow the face. that gives us the ability to invest and execute stalwarts Phil Mickelson, Henrik Stenson, Jim All Rogue irons have our new Urethane- in ways that other equipment manufacturers Furyk, Thomas Bjorn, Morgan Pressel, and Yani Microsphere technology, that quiets vibration cannot. Sustaining this approach should help us Tseng – multiple winners, proven competitors without slowing the face, so golfers get distance continue creating long-term shareholder value. and outstanding ambassadors for our brands. and great feel too – an unheard of combination We are especially excited to see Jim and in thin-faced irons. Sincerely, Thomas face off against each other as captains Oliver “Chip” Brewer of the 2018 U.S. and European Ryder Cup The newest Chrome Soft balls incorporate a President and Chief Executive Offi cer teams. We are humbled that these great players remarkable material called Graphene in the March 20, 2018 trust their games to Callaway, and we are Dual SoftFast Core’s outer layer. At 200 times dedicated to doing all we can to help them win. stronger than steel, Graphene is one of the world’s strongest materials, yet it is so light that a sheet of Graphene large enough to cover a

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