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  • Revenues of $164.9 million declined 1% compared to 2011’s third-quarter record high due to fewer live race days at Churchill Downs Racetrack
  • EBITDA was $21.3 million, the second highest all-time third-quarter EBITDA


LOUISVILLE, Ky. – Churchill Downs Incorporated (CDI or the Company) ( NASDAQ: CHDN) on Monday, Nov. 5, 2012, reported results for the third quarter and nine months ended Sept. 30, 2012.

Net revenues from continuing operations for the third quarter of 2012 declined 1%, or $1.5 million, to $164.9 million compared to the same period of the prior year.  Third quarter EBITDA (earnings before interest, taxes, depreciation and amortization) declined to $21.3 million, from $43.0 million, during the third quarter of 2011. Net earnings from continued operations for the period were $6.0 million, or $0.34 per diluted common share, a decrease of 70% from net earnings from continued operations of $19.7 million, or $1.16 per diluted common share, during the third quarter of 2011.  The decline in EBITDA and net earnings was predominately the result of the $19.3 million in Illinois Horse Racing Equity Trust Fund payments that were received in the third quarter of 2011.

Online Business (consisting of,, Velocity and the Company’s equity investment in HRTV) net revenues for the third quarter increased 9% over the same period of the prior year to $45.6 million. CDI’s online wagering company,, reported a handle increase of 10.6%, or $20.5 million, compared to 2.2% growth of total U.S. thoroughbred industry wagering for the same period, according to


Despite growth in revenue and handle, third-quarter Online Business EBITDA declined $0.8 million, or 8%, primarily due to $1.0 million of expenditures related to the launch of the Company’s new real money gaming site,, and the continuation of spending on the development of an exchange wagering platform; increased losses of $0.4 million from our equity investment in horseracing television network HRTV; and severance and other non-recurring costs of $0.6 million.


Racing Operations revenues decreased 6%, or $3.9 million, due to three fewer racing days at Churchill Downs Racetrack and weather-related cancellations at Calder Race Course. Racing Operations EBITDA decreased $19.5 million, due to the impact of recognizing $19.3 million from the Illinois Horse Racing Equity Trust Fund along with recognition of insurance proceeds net of losses of $0.6 million during 2011’s third quarter.  Partially offsetting these prior year items were EBITDA improvements as operating efficiencies from cost control measures more than offset the fewer live race days and weather-related cancellations.


Gaming revenues decreased $2.4 million, or 5%, during the quarter largely due to continued competition in the South Florida market and the closure of the Company’s casino and video poker operations in New Orleans for five days in September as the result of Hurricane Isaac. Gaming EBITDA decreased $1.1 million driven primarily by revenue losses at Calder Casino.

CDI Chairman and Chief Executive Officer Robert L. Evans said the Company made a lot of progress building its portfolio of growth opportunities in the third quarter and in the few weeks since.

“We hope to see the revenue and EBITDA growth impact of these new opportunities starting in the fourth quarter of this year, and into 2013 and 2014, including our decision to proceed with construction of our joint venture casino project near Lebanon, Ohio; the completion of the acquisition of Riverwalk Casino Hotel; the launch of the real-money gaming site,; and significant progress on the $15 million renovation and rebuilding of Harlow’s following the 2011 Mississippi River flood which we expect to complete by year-end.”

“We are also pleased with the construction progress at Churchill Downs Racetrack including the new ultra-luxury area known as The Mansion, which is 93% sold or committed under 3 to 7 year contracts, and the new Paddock Plaza area that will add over 200 upper-price-range seats to our inventory for various big events next year including the Kentucky Derby, the Kentucky Oaks and our night racing and other events,” Evans said.

A conference call regarding this news release is scheduled for Tuesday, Nov. 6, 2012, at 9 a.m. ET. Investors and other interested parties may listen to the teleconference by accessing the online, real-time webcast and broadcast of the call at or, or by dialing (877) 372-0878 and entering the pass code 59454442 at least 10 minutes before the appointed time. International callers should dial (253) 237-1169. A copy of the Company’s news release announcing quarterly results and relevant financial and statistical information about the period will be accessible at

In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company has provided a non-GAAP measurement, which presents a financial measure of earnings before interest, taxes, depreciation and amortization (“EBITDA”). Churchill Downs Incorporated uses EBITDA as a key performance measure of results of operations for purposes of evaluating performance internally. The Company believes the use of this measure enables management and investors to evaluate and compare, from period to period, the Company’s operating performance in a meaningful and consistent manner. This non-GAAP measurement is not intended to replace the presentation of the Company’s financial results in accordance with GAAP.

Churchill Downs Incorporated (CDI) (NASDAQ: CHDN), headquartered in Louisville, Ky., owns and operates the world-renowned Churchill Downs Racetrack, home of the Kentucky Derby and Kentucky Oaks, as well as racetrack and casino operations and a poker room in Miami Gardens, Fla.; racetrack, casino and video poker operations in New Orleans, La.; racetrack operations in Arlington Heights, Ill.; a casino resort in Greenville, Miss.; as well as a casino hotel in Vicksburg, Miss.; CDI also owns the country's premier advance-deposit wagering company,; the totalisator company, United Tote;, where people can legally play fun games online for a chance to win cash prizes; Bluff Media, an Atlanta-based multimedia poker content, brand and publishing company; and a collection of racing-related telecommunications and data companies. Information about CDI can be found online at

Information set forth in this news release contains various “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Private Securities Litigation Reform Act of 1995 (the “Act”) provides certain “safe harbor” provisions for forward-looking statements. All forward-looking statements made in this news release are made pursuant to the Act. The reader is cautioned that such forward-looking statements are based on information available at the time and/or management’s good faith belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Forward-looking statements speak only as of the date the statement was made.  We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “should,” “will,” and similar words, although some forward-looking statements are expressed differently.  Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from expectations include: the effect of global economic conditions, including any disruptions in the credit markets; a decrease in consumers’ discretionary income; the effect (including possible increases in the cost of doing business) resulting from future war and terrorist activities or political uncertainties;  the impact of increasing insurance costs; the impact of interest rate fluctuations; the financial performance of our racing operations; the impact of gaming competition (including lotteries, online gaming and riverboat, cruise ship and land-based casinos) and other sports and entertainment options in the markets in which we operate; our ability to maintain racing and gaming licenses to conduct our businesses; the impact of live racing day competition with other Florida, Illinois and Louisiana racetracks within those respective markets; the impact of higher purses and other incentives in states that compete with our racetracks; costs associated with our efforts in support of alternative gaming initiatives; costs associated with customer relationship management initiatives; a substantial change in law or regulations affecting pari-mutuel and gaming activities; a substantial change in allocation of live racing days; changes in Kentucky, Florida, Illinois or Louisiana law or regulations that impact revenues or costs of racing operations in those states; the presence of wagering and gaming operations at other states’ racetracks and casinos near our operations; our continued ability to effectively compete for the country’s horses and trainers necessary to achieve full field horse races; our continued ability to grow our share of the interstate simulcast market and obtain the consents of horsemen’s groups to interstate simulcasting; our ability to enter into agreements with other industry constituents for the purchase and sale of racing content for wagering purposes; our ability to execute our acquisition strategy and to complete or successfully operate planned expansion projects; our ability to successfully complete any divestiture transaction; market reaction to our expansion projects; the inability of our totalisator company, United Tote, to maintain its processes accurately or keep its technology current; our accountability for environmental contamination; the inability of our Online Business to prevent security breaches within its online technologies; the loss of key personnel; the impact of natural and other disasters on our operations and our ability to obtain insurance recoveries in respect of such losses (including losses related to business interruption); our ability to integrate any businesses we acquire into our existing operations, including our ability to maintain revenues at historic levels and achieve anticipated cost savings; the impact of wagering laws, including changes in laws or enforcement of those laws by regulatory agencies; the outcome of pending or threatened litigation; changes in our relationships with horsemen’s groups and their memberships; our ability to reach agreement with horsemen’s groups on future purse and other agreements (including, without limiting, agreements on sharing of revenues from gaming and advance deposit wagering); the effect of claims of third parties to intellectual property rights; and the volatility of our stock price.

You should read this discussion in conjunction with the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q and the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 for further information, including Part I – Item 1A, "Risk Factors" for a discussion regarding some of the reasons that actual results may be materially different from those we anticipate, as modified by Part II – Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q.