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  • Record net revenues of $162.4 million, a 3% increase over fourth-quarter 2012
  • Adjusted EBITDA declines 4% primarily due to greater Racing Operations segment losses
  • Opens joint venture Miami Valley Gaming & Racing in December, ahead of schedule, under budget
  • Completes $300 million 5.375% senior unsecured notes offering


  • Record net revenues of $779.3 million, a 7% increase over 2012
  • Record Adjusted EBITDA of $176.2 million, up 11% over 2012
  • Record Kentucky Oaks & Derby Week Adjusted EBITDA, a $5.8 million increase over 2012
  • Acquires Oxford Casino in Oxford, Maine in July

LOUISVILLE, Ky. (Wednesday, Feb. 26, 2014) – Churchill Downs Incorporated (CHDN: NASDAQ) (CDI or Company) today, reported business results for the fourth-quarter and full year-ended Dec. 31, 2013.

“2013 was a good year, but we had planned to do even better,” said CDI Chairman and CEO Robert L. Evans.  “While total year net revenues were up 7% to a record $779.3 million, Adjusted EBITDA was up 11% to a record $176.2 million, and our common stock price increased 35% during the year, general economy softness, notably in job growth and personal disposable income growth, along with state-specific changes in legislation and regulation, and one-time expenses combined to negatively affect our performance, particularly in the fourth-quarter.

“Several 2013 developments should favorably affect our results in 2014.  We acquired Oxford Casino in Oxford, Maine, last July and opened our joint venture project, Miami Valley Gaming & Racing (MVG), north of Cincinnati in December. Our $26.5 million investment in the new, 2,400-seat Grandstand Terrace and 15,224 square foot, 4K-resolution ‘Big Board’ video board at Churchill Downs Racetrack, combined with a new, 10-year media rights deal with NBC should be reflected in our 2014 Kentucky Oaks and Derby Week results.

“Finally, we completed a $300 million offering of 5.375% senior unsecured notes that mature in 2021, increasing our balance sheet capacity and flexibility to pursue additional growth opportunities in the future.”


(in millions, except per share data): 


During the fourth-quarter of 2013, CDI net revenues increased $4.1 million, or 3%, from the prior year, primarily due to the results of Oxford Casino (Oxford), which was acquired on July 17, 2013.  Total Adjusted EBITDA declined $0.9 million from lower Calder Race Course Adjusted EBITDA of $3.0 million driven by lost hosting revenues and a 22% decline in the number of live races conducted, $1.0 million in spending related to the development of a new online gaming platform and declines in our Louisiana and Harlow’s gaming properties.  Partially offsetting these declines was the effect of $3.8 million in Adjusted EBITDA from the Oxford acquisition. Below the Adjusted EBITDA line, we reserved a $2.5 million account receivable associated with an earnest payment to acquire a New Jersey internet gaming license and incurred higher equity compensation of $2.8 million associated with the new long-term incentive plan. Furthermore, we incurred $2.4 million in pre-opening expenditures related to the opening of MVG.  These items resulted in an $8.0 million reduction in earnings from continuing operations compared to the prior year. 

During the year-ended December 31, 2013, CDI net revenues increased $48.0 million, or 7%, as incremental revenues of $77.7 million from the acquisitions of Oxford and Riverwalk and a strong Kentucky Derby and Kentucky Oaks week were partially offset by Florida racing declines.  Total Adjusted EBITDA increased $17.9 million, or 11%, driven by a $16.2 million improvement in our Gaming Operations driven by acquisitions, a $5.8 million increase in Kentucky Oaks and Kentucky Derby week profitability, and an Online Business improvement of $4.5 million driven by handle growth.  Partially offsetting these gains was a decline of $9.0 million in Florida racing profitability on lost hosting revenues and fewer race days.   Below the Adjusted EBITDA line, share-based compensation increased by $7.5 million, we incurred $3.6 million of pre-opening expenses for MVG, reserved a $2.5 million account receivable associated with an earnest payment to acquire a New Jersey internet gaming license, and recognized $6.6 million less in insurance recoveries than 2012.  Partially offsetting these declines was the recognition of $4.5 million in Illinois Horse Racing Equity Trust Fund proceeds during 2013. CDI earnings from continuing operations decreased $3.2 million, or 5%, from the prior year. 


(in millions):

During the fourth-quarter of 2013, CDI Gaming revenues increased $15.8 million, or 25%, from the prior year, primarily due to the results of Oxford and Riverwalk which generated a combined increase of $19.1 million.   Inclement weather, prior year stimulus post-hurricane Isaac, and continued economic softness pressured revenues at the Company’s Louisiana and Harlow’s Casino Resort and Spa (Harlow’s) properties.  Gaming Adjusted EBITDA increased $1.7 million, or 10%, primarily due to incremental operating income from the Riverwalk and Oxford acquisitions.

During the year-ended December 31, 2013, CDI Gaming revenues increased $74.4 million, or 33%, primarily due to the additions of Oxford and Riverwalk, whose revenues increased $77.7 million compared to the prior period.  Harlow’s revenues declined $4.2 million due to continuing regional weakness and disruptions from renovations to the casino floor.  Partially offsetting this decline, Calder Casino revenues increased $1.1 million due to strategic marketing efforts and the closure of Florida internet cafes.  Gaming Adjusted EBITDA increased $16.2 million, or 25%, due to the acquisitions of Riverwalk and Oxford, partially offset by revenue declines at Harlow’s and our Louisiana properties, and the effect of a $0.8 million recovery at Calder Casino in 2012.   


(in millions):


During the fourth-quarter of 2013, CDI Online Business revenues decreased $0.3 million, or 1%, from the prior year.  The Company ceased accepting wagers from Texas residents on September 25, 2013, following an unsuccessful challenge to state law which is currently under appeal. TwinSpires’s handle improved 3.7% from the prior year, when excluding Texas from both periods.  Despite the cessation of Texas operations, Online Business Adjusted EBITDA increased $1.4 million, or 15%, from a reduction in content expenses due to the favorable settlement of litigation and improvement in the Company’s high volume wagering operation, Velocity.


During the year-ended December 31, 2013, CDI Online Business revenues increased $1.2 million, or 1% over the prior year. In addition to the partial year cessation of Texas operations, the Company resumed accepting wagers from Illinois residents on June 7, 2013, which it had previously ceased on January 18, 2013, due to the temporary expiration of Illinois enabling legislation.  TwinSpires handle increased 1.0% during the year, consistent with revenue growth.  Wagers on TwinSpires grew 6.2%, when excluding Texas and Illinois from both periods, whereas total industry wagering on thoroughbred racing was flat to 2012 according to  Online Business Adjusted EBITDA increased $4.5million, or 10%, reflecting a 1% increase in pari-mutuel handle, an increase in Velocity wagering and the favorable settlement of litigation.  Partially offsetting these improvements were the challenges in Texas and Illinois which generated a decline in Adjusted EBITDA of $2.7 million during the year. 



(in millions):

During the fourth-quarter of 2013, CDI Racing Operations revenues decreased $10.1 million, or 21%, primarily due to the reduction of Florida hosting revenues and 22% fewer live races at Calder.  Racing Operations Adjusted EBITDA decreased $4.0 million primarily from the impact of Calder racing challenges. 

During the year-ended December 31, 2013, Racing Operations revenues decreased $27.8 million, or 9%, from the prior year.  Strong Kentucky Oaks and Derby week results and the revenues from a new 12-day September meet at Churchill Downs Racetrack were more than offset by weakness at the Company’s other racetracks, particularly Calder.  Racing Operations Adjusted EBITDA declined $4.1 million, or 8%, as a $5.8 million increase generated by Kentucky Oaks and Derby week was more than offset by a $9.0 million decrease at Calder due to the reduction of Florida hosting revenue and 19 fewer live race days. 

A conference call regarding this news release is scheduled for Thursday, Feb. 27, 2014, 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 by dialing (877) 372-0878 and entering the pass code 2042254 at least 10 minutes before the appointed time. International callers should dial (253) 237-1169. The online replay will be available at approximately noon EDT and continue for two weeks. 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 and certain other items as described in the Company’s Annual Report on Form 10K (“Adjusted EBITDA”). Churchill Downs Incorporated uses Adjusted 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.; a casino hotel in Vicksburg, Miss.; a casino in Oxford, Maine; and a 50 percent owned joint venture, Miami Valley Gaming and Racing, in Lebanon, Ohio. CDI also owns the country's premier online wagering company,; the totalisator company, United Tote;, offering real-money Bingo 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. Additional 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 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,” “hope,” “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 overall economic environment; the impact of increasing insurance costs; the impact of interest rate fluctuations; the effect of any change in our accounting policies or practices; 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, keep its technology current or maintain its significant customers; our accountability for environmental contamination; the ability 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 consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.