Muddy, Memorable Kentucky Derby 139 Ends With Record Derby Week EBITDA

LOUISVILLE, Ky. (May 4, 2013) – It was a memorable and rainy 139th running of the $2 million Kentucky Derby Presented by Yum! Brands as 151,616 enthusiastic fans weathered the consistent, heavy rains at Churchill Downs to watch Kentucky-bred Orb cover a sloppy track and win the garland of roses that go to the winner of America’s greatest race.

Wagering from all-sources on the Kentucky Derby race card totaled $184.6 million, a decrease of 1 percent from 2012’s all-time record, which totaled $187.0 million. All-sources wagering on the Kentucky Derby race was down 2 percent from $133.1 million to $130.5 million. Both were the second-highest of all time.

On-track wagering on the Derby decreased 7 percent from $12.3 million to $11.5 million, a result of the steady, cold rain that continued throughout the day. On-track wagering on the Derby program decreased 11 percent from $23.7 million to $21.1 million.

Churchill Downs returned $150.6 million to bettors, which amounts to 81.6 percent of total wagering on the Derby Day race card.  Additionally, purses earned from the Derby Day race card approximated $8.2 million that will be paid out to horsemen during the remainder of the 2013 racing meets. 

Finally, pari-mutuel taxes in the amount of $0.7 million were generated from the Derby Day race card, which will be paid to the Commonwealth of Kentucky.

Additionally, approximately $1.6 million of handle from separate pools on the Derby Race has already been reported.  Total separate pool handle on the Derby Day race card during 2012 totaled $1.4 million.

RACE COMMENTARY

“The Churchill Downs team congratulates all those involved with Orb and his victory in this year's 139th running of the Kentucky Derby Presented by Yum! Brands,” said Kevin Flanery, president of Churchill Downs Racetrack. “Today’s second-highest wagering, the commitment of our fans who didn’t let the rain dampen their enthusiasm and an incredible performance by Orb again prove that the Kentucky Derby is truly America’s greatest two-minutes in sports. We are proud of the enduring tradition that is the Kentucky Derby as well as the high-quality racing product we saw today by all the horse owners, trainers and jockeys who participated.”  

BUSINESS COMMENTARY

“Our preliminary and still subject to change estimate of $4.5 – 6.5 million growth in EBITDA (earnings before inteerest, taxes, depreciation and amoritization,) despite exceptionally dismal weather on both Opening Night and Kentucky Derby Day, demonstrates the economic growth potential of this iconic American spectacle,” said Robert L. Evans, Chairman and CEO of Churchill Downs Incorporated.   

DIGITAL DERBY

For Derby Day, TwinSpires.com, the country’s leading online wagering platform, handle on all racing totaled a record $19.5 million, up 11 percent over $17.5 million in 2012. For the Derby race itself, handle totaled a record $10 million on TwinSpires.com, up 10 percent from $9.1 million in 2012.

Our new Kentucky Derby app, “DerbyMe,” was downloaded by 55,500 people.

Derby Nation on Facebook now totals a record 258,000 people, up 24 percent over last year. Total unique visitors to KentuckyDerby.com and KentuckyOaks.com over Derby weekend totaled 2.3 million, up 35 percent over last year. Of the over 250,000 unique visitors, 55 percent visited using their mobile device.  

DERBY WINNER

The Kentucky Derby victory by Orb was the first success in the race for a team of owners made up of members of two of Thoroughbred racing’s most respected families and a Kentucky-born trainer who has already been enshrined in racing’s Hall of Fame. Jockey Joel Rosario, the most successful rider in the United States in 2013, scored his first victory in the race at the age of 26.

The homebred son of Malibu Moon is owned by the partnership of Stuart S. Janney III and Phipps Stable, which is headed by Ogden Mills “Dinny” Phipps. Janney and Phipps are cousins whose families operated prominent American racing stables for generations, but their families had never won the Kentucky Derby.

Orb is trained by Lexington, Ky., native Claude “Shug” McGaughey, whose best Kentucky Derby finish prior to this year’s renewal was a runner-up finish by favored Easy Goer in 1989. McGaughey had competed in only Derby since that loss. 

The winner rallied from 16th in the field of 19 3-year-old Thoroughbreds to win by 2 ½ lengths over Golden Soul. Revolutionary finished a length back in third, with Normandy Invasion and Mylute a close third and fourth.  The winning time for the 1 ¼-mile distance was 2:02.89.

Orb is unbeaten in four races in 2013, and his Kentucky Derby victory improved his career record to five wins in eight races. The first-place purse of $1,414,800 boosted his career earnings to $2,335,850.

DERBY WEEK WRAP-UP

All-sources handle for Opening Night, Saturday April 27, through Derby Day, Saturday, May 4, 2013, was $258.5 million, up 2 percent over 2012’s $253.6 million. Attendance for those five days was down 5 percent to 331,922 from 350,975 in 2012, with attendance declines on rainy Opening Night and Derby Day accounting for the overall decline.

The fourth annual Taste of Derby presented by Stella Artois, held on Thursday, May 2, at the Kentucky Exposition Center, carried on its tradition of good taste with a record crowd of almost 1,500.

Since its inception in 2010, Churchill Downs has donated a total of $230,000 to hunger relief organizations around the world through this event. Partial proceeds from 2013’s Taste of Derby will go to Dare to Care and hunger relief organizations in areas represented by the participating chefs.

ABOUT CHURCHILL DOWNS INCORPORATED

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 online wagering company, TwinSpires.com; the totalisator company, United Tote; Luckity.com, offering fun games online for a chance to win cash prizes; Bluff Media, an Atlanta-based multimedia poker company; and a collection of racing-related telecommunications and data companies. In addition, CDI’s 50 percent owned joint venture, Miami Valley Gaming and Racing LLC, is currently constructing a video lottery terminal and harness racing facility in southwest Ohio. Additional information about CDI can be found online at www.churchilldownsincorporated.com.

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 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 Kentucky, 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 acquisitions and planned expansion projects including the effect of required payments in the event we are unable to complete acquisitions; 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 limitation, 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.

 

 

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