Callaway 2011 Annual Report Download - page 20

For both golf clubs and golf balls, the Company generally competes on the basis of technology, quality,
performance, customer service and price. In order to gauge the effectiveness of the Company’s response to such
factors, management receives and evaluates Company-generated market trends for U.S. and foreign markets, as
well as periodic public and customized market research for the U.S. and U.K. markets from Golf Datatech that
includes trends from certain on and off course retailers. In addition, the Company utilizes Sports Marketing
Surveys for the U.K. markets and GfK Group for the markets in Japan.
For risks relating to competition, see below, “Certain Factors Affecting Callaway Golf Company” contained
in Item 1A.
Environmental Matters
The Company’s operations are subject to federal, state and local environmental laws and regulations that
impose limitations on the discharge of pollutants into the environment and establish standards for the handling,
generation, emission, release, discharge, treatment, storage and disposal of certain materials, substances and
wastes and the remediation of environmental contaminants (“Environmental Laws”). In the ordinary course of its
manufacturing processes, the Company uses paints, chemical solvents and other materials, and generates waste
by-products, that are subject to these Environmental Laws. In addition, in connection with the Top-Flite
Acquisition, the Company assumed certain monitoring and remediation obligations at its manufacturing facility
in Chicopee, Massachusetts.
The Company adheres to all applicable Environmental Laws and takes action as necessary to comply with
these laws. The Company maintains an environmental and safety program and employs full-time environmental,
health and safety professionals at its facilities located in Carlsbad, California, Chicopee, Massachusetts and
Monterrey, Mexico. The environmental and safety program includes obtaining environmental permits as
required, capturing and appropriately disposing of any waste by-products, tracking hazardous waste generation
and disposal, air emissions, safety situations, material safety data sheet management, storm water management
and recycling, and auditing and reporting on its compliance.
Historically, the costs of environmental compliance have not had a material adverse effect upon the
Company’s business. Furthermore, the Company believes that the monitoring and remedial obligations it
assumed in connection with the Top-Flite Acquisition did not have and are not expected to have a material
adverse effect upon the Company’s business. The Company believes that its operations are in substantial
compliance with all applicable Environmental Laws.
Sustainability
The Company believes it is important to conduct its business in an environmentally, economically, and
socially sustainable manner. In this regard, the Company has implemented an environmental sustainability
initiative which focuses on key performance indicators and business objectives, including reductions of volatile
organic compound (VOC) emissions, reductions of hazardous waste, reductions in water usage, improved
recycling and development programs which involve the elimination or reduction of undesirable chemicals and
solvents in favor of chemically similar functional alternatives. These efforts cross divisional lines and are visible
in the following areas within the Company:
• Facilities through the partnership with local utilities to implement energy reduction initiatives such as
energy efficient lighting, demand response energy management and heating, ventilation and air
conditioning optimization;
• Manufacturing through automation and waste minimization;
• Product development through design efficiency and specification of environmentally preferred
substances;
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