Steve KochExecutive Director, NTRA Safety & Integrity AllianceJune 13-14, 2016

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Woodbine Surface Decision, 2015

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• Toronto, Canada• 133 Racedates, 1260 Races annually• Training February – December• $73m annual purses (3rd highest in N. America)• $440m annual wagering (8th highest in N. America)• 1 mile main synthetic since 2006• 1 ½ mile European Turf• 1 mile dirt training track, 7f turf training track

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Points of Analysis• Wagering and business impacts• Install and operating costs• Horsemen perspectives• Veterinary and safety aspects• Woodbine competitive advantage and market niche• Execution

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Woodbine Races Lost Due to Main Track Conditions 2001 - 2014

0

5

10

15

20

25

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Year

Races L

ost

1 card lost 2008-2014

Woodbine Races Lost Due to Main Track Conditions

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Woodbine Average All-Sources Wager Per Live Thoroughbred Race 2001 - 2014

$200,000

$225,000

$250,000

$275,000

$300,000

$325,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Year

All-Sou

rces W

agering

Per Ra

ceWagering unconstrained by synthetic

+45% 2008-2014

• Poor weather and off-the-turf scratches contributed to business declines:

• DRF identified reduction of poly-shippers to affect fields• Generally positive horsemen reaction to new dirt surface

-12% of Woodbine Live Thoroughbred, All Sources = -$47.3m

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Keeneland, October 20142013 2012On-track Attendance 251,574 266,466 259,710Average Daily Purses $651,558 ~$600,000On-track Wager $17,625,834 $18,173,355 $18,160,018WEG wager on Keeneland $4,976,474 -19% $6,103,844 $4,727,929All Source Wager $122,844,887 -12% $139,660,179 $137,981,281Average Field Size 8.42 -15% 9.85 9.9Fields less than 7 33 10 9Fields less than 6 7 0 3

2014

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– Driver wages and benefits $192,000– Grader operator wages and benefits $50,000– Fuel $300,000– Tractor hours $50,000– Water (7 million gallons, pumps, etc.) $50,000– Ditch clearing, equipment repairs, etc $10,000– Water truck usage and depreciation $60,000– Garage mechanic $64,000– Dirt cushion replacement $60,000– Synthetic materials (oil, wax, fibre, etc.) -$50,000

Annual OpEx advantage to synthetic = $800k

Annual Operating Costs Dirt vs Synthetic

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Operating Cost Advantage:$800,000 annual operating savings with synthetic

8-10 year life expectancy for synthetic, very conservative based on pre-existing surface. Actual life expectancy >10yrs

$800,000 x 10 years = $8m

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HBPA of Ontario PositionNovember, 2014:

HBPA takes “no official position” on question of dirt vs synthetic main track surface.Current surface is “not currently safe” and “we need a new track”.

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Timed Workouts Per Surface

In 2004 and 2005 there were 18 and 19 dates, respectively, where the main track was closed for training. From 2007-2014 this figure is near zero.

Distribution of Woodbine Timed Workouts on Main and Training Track 2005 - 2014

52% 55%

77% 77% 73%78%

71% 74%64%

43% 41%

19% 19% 17%23% 19%

26% 22%31%

79%

10%

35%

60%

85%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Year

Percen

t of Tot

al Time

d Work

outs

Main Track Training Track

Main Track

Dirt Training Track

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Catastrophics

Woodbine Main Track vs Industry Dirt Catastrophics Rates 2005 - 2014

Woodbine Main

Industry - Dirt

Belmont

Saratoga

Gulfstream

Industry - SyntheticIndustry - Turf

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Year

Catastr

ophics p

er 1000

starte

rsWoodbine’s main track catastrophics rate annually ranks among the lowest in the industry.

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CEDNF’s(Career Ending Did Not Finish)

Career Ending Did Not Finish (CEDNF's) as % of Starts, Per Surface 2000 - 2013

Woodbine Dirt

Industry Total

Woodbine Synth

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Year

CEDNF'

s as % o

f Starts

Woodbine Cumulative Career Ending Did Not Finish (CEDNF's) as % of Starts 2000 - 2013

Woodbine Dirt (2000-2006), 0.92%

Woodbine Synthetic (2006-2013), 0.80%

0.75% 0.80% 0.85% 0.90%

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Woodbine vs Industry Starts per Starter, All Surfaces 2001 - 2014

4.5 4.4 4.34.6 4.4 4.3

4.5 4.3 4.3 4.1 4.3 4.4 4.4 4.4Woodbine(Slope = -0.01x)

Industry(Slope = -0.06x)

3.5

4.5

5.5

6.5

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Year

Starts

per Sta

rter

Industry starts/starter declining 6x Woodbine

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Ontario Veterinary Surgeons• Polytrack injuries seem different than traditional dirt injuries.

– Dirt trends to lower limb, easier to diagnose, and easier to manage injuries. – Synthetic trends to higher limb, harder to diagnose and longer to convalesce injuries.

• Synthetic injuries seem to be a 1:1 tradeoff where without ongoing study it is impossible to conclude if horse population is worse or better off between the surfaces.Based on what we don’t know at this time it seems counter-productive to abandon synthetic racing.

• A return to dirt is an indication that industry accepts dirt injury rates as a permanent reality. Continued evolution of synthetics holds potential benefits at seemingly not a cost to welfare.

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Dr. Greg Taylor, Regulatory Veterinarian“Our fractures are down from when we were on dirt. Soft tissue injuries? I wouldn’t say they were up –they’re probably about the same. I do hear that horses are more muscle sore after racing on poly, and that there are more hind end injuries – pelvises and tibias. But honestly there are so few, that I’m not sure of the significance of them.”

Woodbine Average Field Size on Main Track and in Off-the-Turf Races

Avg FieldOff-the-Turf

Avg Field Main Track

6.757.007.257.507.758.008.258.508.759.009.259.50

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Year

Avg Pe

r Race

Main Track

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Woodbine Average Field Size on Main Track MINUS Average Field Size in Off-the-Turf Races

-0.3

0.0

0.3

0.5

0.8

1.0

1.3

1.5

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014Year

Averag

e Annu

al Field

Size D

ifferen

ce

Average fields in off-the-turf races cumulatively increased 17% since years 2004/2005.

Off The TurfOff the Turf

Average Field Size – Main Track vs Off-the-Turf races

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Woodbine Ship-Ins per Race Condition 2010 - 2014

ShipIn/Stake

ShipIn/AllowanceShipIn/Claiming0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2010 2011 2012 2013 2014Year

Ship-Ins

Per Ra

ce

Ship-Ins

Woodbine ship-in runners disproportionately trend to turf (4x) and stakes (12x).

Woodbine Ship-Ins per Race - Turf vs Main - 2010 - 2014

Main Track

Turf

0.0

0.2

0.4

0.6

2010 2011 2012 2013 2014Year

Ship-Ins

Per Ra

ce

Main TrackTurf

Ship-ins/Race – Turf vs Main

Ship-ins per Race Condition

Stakes

AllowanceClaiming

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11.5%

13.1% 13.2%

14.6%15.2%

16.3%

18.6%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

2009 2010 2011 2012 2013 2014 2015

Turf as % of All Races (EID)

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Woodbine Competitive Position – Synthetics

2012 2013 2014Ship-Ins 16 15 46

Daily Purses ($US) MSW ($US) # Racedates SeasonWoodbine $437,000 $45,000 133 April - DecemberArlington $265,000 $38,000 89 May - SeptemberPresque Isle Downs $185,000 $35,000 105 May - SeptemberGolden Gate $148,000 $27,000 152 Oct-Jun, Aug-Sep,

• Arlington and Presque Isle ship-in runners at Woodbine tripled in 2014

• Woodbine purses lead the synthetic circuit

* ($1CAD=$0.80USD)

#1

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Woodbine Competitive Position – DirtMSW ($US) Rank Daily Purses ($US) Rank

Saratoga $79,000 1 $1,036,000 1Del Mar $75,000 2 $608,000 5Belmont $72,000 3 $788,000 2Aqueduct $61,000 4 $468,000 6Keeneland $56,200 5 $631,000 4Santa Anita $54,000 6 $659,000 3Churchill $45,300 7 $447,000 7Woodbine $45,200 8 $437,000 8Gulfstream $45,000 9 $316,000 10Parx $44,000 10 $281,000 12Pimlico $40,000 11 $413,000 9Laurel $40,000 12 $299,000 11* ($1CAD=$0.80USD)

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The Future of Synthetic Racing• Synthetic circuit already benefitting from “poly-shippers” facing reduced options.

– Arlington, Turfway, Presque Isle, Woodbine, plus Golden Gate• Into the future - high potential racing prospects not responding sufficiently to dirt training will ship to Woodbine as a dirt alternative.• NYRA has publicly indicated serious consideration of a synthetic surface at Belmont.

Aqueduct

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• New Tapeta10 surface opened August, 2014• On-site: February 6, 2015.

– Track is performing well in wintertime conditions– Surface unanimously endorsed by stakeholders

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• Engineering field reviews confirm macadam base and drainage performing well.• Retain existing 2” base of virgin Polytrack, • Remove top 5” Polytrack, replace with 5” Tapeta; • Replace adjacent racing areas with new material.• Construction Schedule: December 1, 2015 – April 3, 2016

– 25 weeks for inputs procurement and materials batching at local facility, – 8-18 weeks to install (winter weather dependent), – new surface open for training/racing for April 3, 2016.

Capex : $7.6 million

Tapeta10Straights 0%, Turns 6%

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DirtStraights 1.5%-2%, Turns 6%

• Engineering field reviews confirm that macadam base may be retained (Keeneland design): – Retains option to revert to vertical draining surface, if desired in the future– Expedites construction schedule– Reduces project cost– Alleviates frost boils

• Construction tasks:– Remove 7” of Polytrack exposing macadam base layer– add filter cloth, 6” compacted granular, and 6” of dirt cushion– reestablish north drainage ditch– add siltation chambers– replace and raise inner rail, increase height of outer rail– replace adjacent racing areas with new material

• Construction Schedule: December 1, 2015 – April 28, 2016– Seven or more April 2016 racedates lost.– Schedule duration: 13 weeks to batch materials, 20 weeks to install (winter weather dependent)

Capex: $7.1M Additional annual operating expenses - $800k

Existing Macadam

6” Dirt Cushion6” Limestone Base @ 2% and 6% gradientFilter Cloth

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Synthetic vs Dirt –Woodbine’s Business Case• Synthetic prevents loss of training and racing dates• Woodbine wagering not constrained• Keeneland October, 2014• Purchase and operating costs• Horsemen perspectives• Synthetic complements Woodbine’s turf advantage• Synthetic main minimizes off-the-turf scratches• Safety Evidence• Racing Surface Testing Laboratory notes on synthetic surface consistency• Future synthetic racing circuit (Woodbine’s competitive niche)

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