Diseño Editorial by lamper.theproject

STRATEGIC PERSPECTIVES A Farm Transformed

A Brief History In late 1996, The Sykes’ decided to purchase a small horse farm (100-150 acres) and purchase riding horses for their children and g randchildren. . . a family “get-together” place. The Florida Horse Industry was reeling from the 1986 tax law and farm o wners couldn’t keep their farms in good repair. After looking for several months, it was decided the cost to repair and bring a farm to good standards wasn’t a good investment, not to mention the fact Susan and John were renovating a house built in 1910 and that was a significant project within itself.

STRATEGIC PERSPECTIVES A Farm Transformed

1997 The realtor sensing losing a sale, suggested we look at a much larger (700+ acres) farm called Due Process which was going into an absolute auction sale and there was a possibility it could be purchased at a “pre-sale” price. Reluctantly, the Sykes’ agreed to “look.” Upon arriving at the farm and seeing its beautiful landscape, John decided he wanted to buy it and ultimately did in March 1997. Didn’t know much about the history of the farm, but knew it was large! The farm had 14 houses, 2 dormitories, 12 barns, 2 training tracks and a nice pond. The farm’s layout was perfect and it was obvious no expense had been spared in the construction of the farm. Later we learned the farm had a significant, successful history with 100’s of winners, all but three (3) had been broken and trained on the farm. Too many to list, but to name a few: Swan Song, F obby Forbes, Deputy Minister, DeHere, Open Mind, Thunder Gulch, etc.. Not being a horse person, the long list of Classic Winners didn’t mean much to us. However, when you “tie” the success of the farm’s history to the success of Cloverleaf II, now Woodford, this farm is noted for producing successful Classic Winners.

STRATEGIC PERSPECTIVES A Farm Transformed

Within a few months after the original purchase, two additional sites were purchased; a 9 acre tract at the corner of Highway 25A and NW County Road 411 and a 200 acre tract with frontage on the same right of way. The purpose of those site purchases was to control development in the main farm area. Although there was no plan for using the total properties, the timing offered the opportunity to purchase at a favorable price and hold as an investment. The Sykes’ changed the farm name to loverleaf Farms since C Cloverleafs (at time of purchase) were on the main entrance gates to the farm. H owever, Cloverleaf Farms was already in use as a sheep farm in Florida. Therefore, we simply changed the name to Cloverleaf Farms II, which was approved. John soon began to buy riding horses for each child and grandchild for everybody’s enjoyment. He then purchased a few race horses, including standard-bred which didn’t take a “genius” to decide a change had to be made to pay for this operation.

STRATEGIC PERSPECTIVES A Farm Transformed

2000 In mid-2000, we redirected the farm to a breeding and training farm, eventually adding stallions (Repent and Congrats). The farm was successful in purchasing the mare I’ll Get Along in 2001 for $130,000. This mare was purchased in the “blind” not knowing the eventual success of her offspring, a colt eventually known as Smarty Jones. Due to his success, the mare was sold at the Fall 2005 Fasig Tipton sale for $5,000,000. Boyd Browning will tell you the sale of I’ll Get Along lifted Fasig Tipton to a new level, as they had not sold a horse of that caliber or price before. We chose them over Keeneland. Both Repent and Congrats gained their success while standing at the farm and breeding to Florida mares. The farm continued to enjoy success with its bloodstock operations, but in 2006 a “business conflict” arose with the farm manager beginning to build his own farm business which needed to be corrected. In early 2007, a b usiness opportunity developed which would cure the conflict and provided an opportunity to upgrade Cloverleaf II.

STRATEGIC PERSPECTIVES A Farm Transformed

2007 In December 2006, John was introduced to Tony Ferguson of Tampa who was an investor in ClassicStar in Versailles, Kentucky. He wanted to buy ClassicStar out of bankruptcy and n eeded a partner to do so. We decided to form a partnership to buy certain assets of ClassicStar and did so in April 2007. All Cloverleaf horses were sent to the ClassicStar farm in June 2007 and Ocala was closed. The ClassicStar section of the farm acquired by C loverleaf had old tobacco barns and no employee houses. It was necessary to build new barns for a quality operation. During this period the Kentucky farm was named Woodford Thoroughbreds. As the barns were completed in 2008, another unforeseen change was to take place.

STRATEGIC PERSPECTIVES A Farm Transformed

2008 Unknown business issues required Cloverleaf to buy out Tony Ferguson and dissolve the partnership. The decision was made to buy the horses and farm equipment assets, but not Tony’s side of the farm. At the time, it was felt that may not have been a good decision, as it necessitated building employee houses, an office and maintenance facilities. However, it still made Cloverleaf a onedimension bloodstock farm in Kentucky. For the next few years we benefited by using Tony’s farm (which was up for sale), while building employee houses, an o ffice and maintenance barn. With the expansion of the breeding operation, it became apparent the Kentucky farm was limited in its capacity to handle all bloodstock. The farm had sufficient facilities, but had insufficient paddock capacity. In other words, we had overbuilt for the acreage. Consideration was given to acquire acreage contiguous to the Lexington farm, but it wasn’t a workable solution. Also, investigated buying a larger full- service farm in Kentucky and selling both the Kentucky and Florida sites. However, with uncertainty in the time to sell the farms, would again, tie up too many fixed assets and liquidity. The Ocala operation allowed for a single “full-service” farm which had been purchased at a very favorable price.

STRATEGIC PERSPECTIVES A Farm Transformed

2012 Florida farm reopened to provide breeding for Grade B mares, breaking and training and re-establishing the Stallion Operations. Kentucky would house the Grade A bloodstock, allowing a greater use of the farm. Cloverleaf had several well-known thoroughbreds broke and trained at its training facility, including Beholder and Jimmie Creed, both trained by Raul Reyes who leased our training track and Bsharpsonota who was bred, broke, trained and raced by Cloverleaf. It was fitting to re-open the training facilities in July 2012 with emphasis placed on Pin Hooking. Cloverleaf purchased 4 yearlings in 2012 at an average price of $39k. The success in the 2013 2-year old sales indicated a positive cashflow potential in the Spring to cover operating costs, including stud fees. This was one of the primary reasons to re-open the Ocala facility to balance “cash flow” annually from a single- purpose breeding operation. In addition to the training facility, Grade B broodmares returned to the farm and Cloverleaf re-opened its stallion operations with the purchase of Biondetti in November 2012.

STRATEGIC PERSPECTIVES A Farm Transformed

2013

The Kentucky operation, identified as Woodford Thoroughbreds and the Ocala farm as Cloverleaf II b ecame a branding problem for the farm operations. Therefore, both farms became Woodford Thoroughbreds LLC, with Woodford Thoroughbreds LLC acquiring all assets from Cloverleaf II, except facilities and land. Woodford continued to expand its Stallion Operations in Ocala by acquiring Currency Swap. A winner in the Grade 1 Hopeful. With this win, “you’re in” the Breeder’s Cup J uvenile, but a bone chip was found in the left front ankle which required surgery preventing him from running at the Breeder’s Cup. Soldat was the next purchase (75% equity), a winner at age 2 in the 2010 With Anticipation Stakes and a winner of the Grade 2 Fountain of Youth Stakes. His total earnings before retirement was $584,300.

2015 2015 Developed a Five Year Strategic Plan for the farm to identify our Vision, Mission and Goals.

We then purchased in partnership with Airdrie Stud a 50% equity interest in Mark Valeski; a winner in the Grade 2 Peter Pan and the G rade 3 Mineshaft Handicap. His total earnings were $658,452. Although a good looking stallion and great race horse, the Florida market never gravitated to him. After 2 years he returned to Airdrie to stand. He’s Had Enough was our next purchase. He ran 2nd in the 2012 Breeder’s Cup Juvenile Grade 1 and was a contender in several other graded stakes races. His total earnings were $492,910 as a product of Tapit. He gained a lot of attention, but his produce showed very little at the track. We overpaid for this stallion to get out of a bad partnership. Crown of Thorns, a Woodford homebred was a multiple stakes winner of $821,693. He was a winner of the Robert Lewis (G2), the Melvyn Leroy Handicap (G2) and lost the Breeder’s Cup Sprint (G1) by a nose. All of this success, but was not a popular stallion. He had a limited number of covers, but sired multiple stakes winners. We still own him and he stands in Pennsylvania. Interesting to note, Crown of Thorns was bred by Repent and Crowning Touch by Thunder Gulch.

STRATEGIC PERSPECTIVES A Farm Transformed

FIVE YEAR PLAN REVIEW (2015-2020)

STRATEGIC PERSPECTIVES A Farm Transformed

VISION STATEMENT TO BE ONE OF THE LEADING THOROUGHBRED BREEDING, RACING AND TRAINING CENTERS AND SALES CONSIGNORS IN NORTH AMERICA BY 2020

STRATEGIC PERSPECTIVES A Farm Transformed

OUR MISSION

To provide every horse every opportunity to become the best they can be with care and integrity Using professional staff from all disciplines, top quality, full-service facilities and tailored training programs designed to the unique attributes of each horse. We provide horse owners, trainers and brokers a full-service thoroughbred operation that’s easy to work with and trust. And do so through our operations, culture and pride in performance.

STRATEGIC PERSPECTIVES A Farm Transformed

WOODFORD 2020 - GOALS

LEAD Be one of the leading thoroughbred breeding, racing 足足and trainin centers and sales consignors in Norhth America by 2020

Be one of the leading thoroughbred training centers

BREEDERS BY RACE EARNINGS

2 YEAR OLD CONSIGNMENT

Be one of the leading thoroughbred sales consignors

TOP CONSIGNORS

Ranked 36th in 2015

Ranked 15th in 2015

Ranked 8th in 2019

Ranked 18th in 2019

Ranked 17th in 2019

Building a top brand

BUILDING A BRAND

2015-19 Lead Results represents brand building 足accomplishments Identifying brand to broader 足market through social media and web page development making Woodford easier to follow.

STRATEGIC PERSPECTIVES A Farm Transformed

Bloodstock Goals Maintain primarily produce

Results

Kentucky Farm mares and their

In 2018 decided to close Kentucky to liquidate assets

Purchase or retain no inventory below B/B+ grade

Have accomplished this goal temporarily boarding mares at WinStar Farms and shipping weanlings to Florida

Build mare grades to a total of 100 by 2020

Decided in 2018 to transition farm to a boutique operation, retaining 30-35 mares transitioning to Grade A by 2025

Measurable produce sold not to be less than 80% bred

Maintained 80% or better ratio with 87% as target See successful Grads

Stallions

Woodford

Stallions

By 2017 breeding season in partnership with two (2) Grade 1 stallions and by 2020 own at least two (2) Grade 1 stallions

Decided not to partnership, nor acquire any Grade 1 s tallions, but are buying seasons/ shares in Grade 1 stallions

Determine by breeding season 2018 the c ontinuation of the Florida stallion operations

Have closed stallion operations in Florida

STRATEGIC PERSPECTIVES A Farm Transformed

Racing and Training Center Goals

Results

Greatest opportunity for revenue appears to be for yearlings purchased in $75-100K range.

Market continued to move to higher end. Purchasing range in 2019 average $150$250K. To reduce risk at this level, entered a partnership to acquire up to 20 yearlings

All produce purchased should be capable to achieve a sales price of $187k-$250k.

Target sales multiple is 2.1 or $315k to $525k (experienced multiple less than 2.0)

Client base capable of covering all training costs.

Client base has grown to 60 in training. Needs to be 80 to achieve goal

Emphasis on consignment for clients.

Discontinued consignment

Charge a fair daily rate.

Increased daily rate from $75 to $80

emphasis

See successful Grads

Woodford

STRATEGIC PERSPECTIVES A Farm Transformed

Sales and Consignment Goals

Results

Actively pursue business opportunities for all services offered by Woodford.

To be more active at this goal, retained Beth Bayer as Director - Sales and C onsignment to eliminate dual functional roles (buy/sell).

Steadily increase value of client assets serviced by Woodford.

A continuing goal.

Steadily increase “retention” of clients to achieve recurring revenue.

Have not met this goal.

Achieve “outside” consignment, gross revenues and commissions sufficient to cover Woodford sales expense.

Have not met this continuing to improve.

Perform industry analysis to determine market competitive rates.

Accomplished increased sales consignment rates to be competitive with market. See successful Grads.

goal,

Woodford

STRATEGIC PERSPECTIVES A Farm Transformed

Woodford Branding Goals

Results

Maximize Woodford branding at all levels.

Transitioned Shannon from Sales Consignment to Director - Marketing and Client R elations. Placing emphasis on: - Expediting use of social media to an expanded market. - Expediting development of web page. - Improve client relations to enhance business retention.

Reaching out to primary b uyers to keep the name of Woodford before them, regardless of existing relationships they may have.

Retained outside consultants to assist in achieving media and branding goals.

Empahsis on selected media.

Have experienced remarkable results in year 2019. - Nearly doubled number of Facebook followers in the last 12 months. - Doubling of unique website viewers.

STRATEGIC PERSPECTIVES A Farm Transformed

NOTED SUCCESSFUL WOODFORD GRADS

STRATEGIC PERSPECTIVES A Farm Transformed

In 2015, Sales Consignment sold the highest price 2-year old ever at Ocala Breeder Sales for $1.9M. Has since been surpassed.

STRATEGIC PERSPECTIVES A Farm Transformed

WOODFORDâ&#x20AC;&#x2122;S FUTURE

STRATEGIC PERSPECTIVES A Farm Transformed

The Next Five Years 2020-2025 Woodford is a farm continuing to be transformed. Since its beginning as Cloverleaf Farms II, it has sought a purpose, a vision and a mission. Just being a “thoroughbred farm” wasn’t good enough!

The farm history presented earlier identified significant improvement to achieve yet another “unidentified” dream. In 2015, management developed the farm team’s first Five Year Plan. An unfamiliar concept for management to say the least. Woodford, with its gains in breeding and racing and training divisions, become a key player in the marketplace. The thoroughbred market continued to move very r apidly away from “mid- m arket” buyers to the higher end. Partnerships were formed to purchase the higher priced produce reducing the number of buyers. While the market sales moved higher, market uncertainties in geo-economics and the horse business itself caused Woodford to pause and evaluate its future direction.

It is well expected an e conomic recession is in the future. Hopefully, not to the extent of 2008, but one will occur. So planning for a recession in 2018, Woodford decided to sell its Kentucky farm and direct those “locked-in” fixed assets to liquidity to be used for purchasing higher quality breeding stock. The operating and organizational structure was changed and new Team members added. Building off the foundational gains of the past five years, a new plan is being developed which presents Woodford as a full-service boutique farm. Its purpose is to lift Woodford to even higher l evels while “hedging” for a foreseeable recession and taking a lead position in helping to transform the industry. While the plan provides for even higher levels in its North America markets, it likewise, evaluates diversification to the European market. All an exciting opportunity for Woodford 2025.

STRATEGIC PERSPECTIVES A Farm Transformed

Woodford 2025

STRATEGIC PERSPECTIVES A Farm Transformed

MISSION

To provide every horse in our care the opportunity to become the best they can be. Provide horse owners, trainers and brokers a full-service Boutique Thoroughbred Operation that’s easy to work with and trust. Operate the farm with sound effectiveness and efficiency to assure financial sustainability.

VISION

To become a Model 21st Century Thoroughbred Horse Operation and a Top 10 Producer of Graded Stakes Winners.

STRATEGIC PERSPECTIVES A Farm Transformed

Woodford 2025 Goals LEAD • Be one of the leading boutique thoroughbred breeding, racing and training centers and consignors in North America by 2025.

ACCOMPLISHED BY: • Consistently roducing, at all p levels, top class race horses with transparency. • Care and concern

for horses under our care.

STANDARDS: • Meet the standards as defined in the mission statement. • Require all horses

under our care to be free of bisphosphonate and other drugs considered to be harmful.

FINANCIAL SUCCESS: • Achieve financial success which provides operational sustainability.

STRATEGIC PERSPECTIVES A Farm Transformed

BLOODSTOCK • Build a Broodmare Band of 35

ares where 25 are Grade A and 10 m Grade B by 2022. • Buy five (5) Grade A mares annually

for the first 3 years at $500K per mare, in foal to sires with $100k stud fees. Thereafter, purchase to replace culling.

RACING AND TRAINING CENTER • By 2025 have 100 client horses in training with

20% for 2 year old Sales Consignment.

• Annually purchase 15-20 yearlings - Woodford

owned or partnership owned - to Pin Hook.

Yearlings purchased annually at an average of • $150-200k (or market rate) per horse with a “target” sales multiplier of 2.5.

• By 2025 experience sale multipliers

• All yearlings purchased to be Classic Horses

• Measurable produce sold, not to be

• Evaluate January 2022 the need of hiring a

of at least a 3.0 stud fee.

less than 80% bred, target is 87%.

• Make decision in 2020 on locating

all m ares to Florida, with breeding and f oaling occurring in Kentucky. • In

2020 sell 3-5 yearlings at Tattersalls, purchased as weanlings in 2019. Average sales multiplier of 2 times purchase price. • Continue to use Stallion shares

wned and buy shares which match o Wooford breeding program.

(Saturday afternoon horses).

second assistant trainer to allow lead trainer travel time for yearling sales, client meetings and business development. • Continue to evaluate Woodford’s entry into

racing to broaden Woodford’s business identity to track trainers. • Continually evaluate market training rates to

assure Woodford is market competitive.

• Determine implementing in 2020-21 testing

for bisphosphonate on all horses in Woodford’s care, with client responsible for cost upon arrival to farm and Woodford’s expense upon departure.

STRATEGIC PERSPECTIVES A Farm Transformed

Woodford 2025 Goals SALES AND CONSIGNMENT • Quality and transparency is an absolute hallmark for all horses under a Woodford Consignment. • In 2020,Woodford will establish strict sales standards for all horses under a Woodford Consignment, including sales c onsignment venues. • Typical Standards • Video scoping ( where available) Woodford expense • Blood testing for the drug bisphosohate or other drugs as may identified with a 7 day “retest “ option by the Buyer ( at Buyers expense) with a test failure allowing the return of the horse to the Owner (original test Owners expense). • All Client horses to be sold under Woodfords Vet X-Ray appraisals. Woodford Expense • Client horses values to be consistent with Woodford selling venues • Selling Venues • Venues to for Woodford Consignment limited time • Bloodstock • Mares •FasigTipton November Keeneland November ( Books 1and 2) • Produce • Fasig Tipton Saratoga • Keeneland September ( Books 1,2and3) Fasig Tipton July and October ONLY if value justifies • Other • Horses not meeting the above may not be sold under a Woodford Consignment • 2 Year Old Sales • OBS March and April

WOODFORD MARKETING AND CLIENT RELATIONS • Enhance Woodford brand in the market using the most effective media tools. • Evaluate media results and followers to convert to sales leads which are m easurable. • Lead brand strategy and communications across all business centers to ensure a consistent message is being conveyed. • Working with each business unit, e stablish an advertising budget in all consignments, chargeable to the business unit. • Schedule regular visits with past and present Woodford clients for relationship building and retention and evaluate other sales potential. • In concert with sales, review all external clients’ consignments and evaluate market representation for meeting Woodford standards.

STRATEGIC PERSPECTIVES A Farm Transformed

Woodford Team

STRATEGIC PERSPECTIVES A Farm Transformed

Team Members: John and Susan Sykes John and Susan acquired the Ocala property in 1997 primarily for having riding horses for their family. Neither knew anything about horses or the horse business, but soon learned a farm of this size (1000 acres) needed revenue to support the farm. Went through several b usiness iterations to finally decide breeding provided more opportunities for building revenues. All that was needed was to retain a good management team. We have been fortunate in that regard (past and present) to have Team members who grew up in the business, starting as grooms and other service levels. Without them there would be no Woodford. John and Susan openly a cknowledge they “know nothing about horses” and to pretend otherwise would be an insult to those raised in the horse industry.

STRATEGIC PERSPECTIVES A Farm Transformed

Lincoln Collins Bloodstock Advisor Lincoln, President of Kern Thoroughbreds & Bloodstock Agency, joined the Woodford Team in the fall of 2018 as Bloodstock Advisor. Lincoln has a proven record in the i nternational bloodstock community. Based in L exington, Kentucky he assists clients worldwide with the purchase and management of all varieties of bloodstock. Lincoln incorporated Kern Thoroughbreds in 1989. After many years of experience in the Thoroughbred Industry, he began his career as junior assistant trainer to Champion English Trainer, John Dunlop. After moving to the United States in 1981 he managed three large equine partnerships for several years. His substantial knowledge of thoroughbreds and economic opportunities made him a sought after advisor on many continents.

STRATEGIC PERSPECTIVES A Farm Transformed

John Gleason Trainer and General Manager Ocala Farm John grew up showing halter and western pleasure horses. In his early twenties he switched over to thoroughbreds when he went to work at Glen Ridge Farm. There he managed and prepared yearlings and two-year olds for the sales. In 2001 John took a position with Woodside Ranch, owned by Bryan and Holly Rice, where he learned how to be really organized and plan in order to train a large number of high-quality horses. During that time he was able to break and train horses for the sales and for racing 足outfits like Bob and Beverly Lewis, JMS Stable and Overbrook Farm, among others. At Woodford he is responsible for the breaking and training of the horses pointing to a two-year old in training sale as well as those headed to the races. He is hands-on thru the entire process from day one. He also 足oversees the care for layups who come to us needing a break from the racetrack. The training center has plenty of turnout paddocks for these types of 足horses as well as the ability to swim horses on site. These options along with the turf gallop are great tools for resting an older horse, or getting a horse fit coming back from an injury. The training barns quiet down during the summer as most of the two-year olds head off to their respective 足racetrack trainers. During this time sales prep yearlings are moved into training barns where he manages their final sales preparations. John and his wife Marybeth have four sons, Tyler, Brian, Connor and Dylan. He enjoys going to the beach and watching football with his family.

STRATEGIC PERSPECTIVES A Farm Transformed

Beth Bayer Director Sales and Sales Consignment Beth was a horse girl from an early age. While growing up she competed in 3-Day Events and was a member of the Pony Club. As a young adult she worked at Hagyard, Davidson and McGee, worked as a groom at the Training Center, taught riding lessons and worked the Keeneland horse sales. In the winter of 1991 Beth moved to Ocala, Florida to work for Jerry Bailey at his training center. This introduced her to the two-year old in training sales and worked for several two-year old consignors over the years. In the summer of ’94, prepping yearlings for the upcoming sales, a well-known two-year old consignor encouraged her to start her own yearling consignment; she began with three horses. Beth has a deep understanding of the breeding owner/consignor experience because she owns a farm and breeds her own mares for the commercial market. Fogg Road Farm is named after her grandparents’ place in Mississippi and she can be found there on a daily basis. Her interests outside of the farm include training for 5ks and an occasional half marathon. Beth competed in a marathon once, but it nearly got the best of her. Beth can often be found on a local golf course as well. Beth is close with her parents who live directly behind her and loves her four dogs!

STRATEGIC PERSPECTIVES A Farm Transformed

Shannon Castagnola Director Marketing and Client Relations Shannon didn’t grow up in a horse family, much less a thoroughbred horse family. However, from the age of three Shannon can remember being drawn to horses, as if they contained some sort of magnetic pull. She was able to nurture that love and natural connection when her family moved to Lexington when she was nine. Weekends were spent at a local stable, taking lessons and occasionally showing, until Shannon went to college. Upon graduating from UK, she worked her first ever Keeneland September sale in 1999 showing yearlings for Taylor Made. It was there she realized her future was not in journalism, but rather in the thoroughbreds. Shortly after, Taylor Made hired her into the office full time working for the Private Sales department. During her time at Taylor Made, Shannon met her husband Steve, who also worked for the farm, and impressed her not with his twinkling blue eyes and English accent, but his newly leased Hyundai. Eventually Shannon realized it was necessary for her to build her industry knowledge by better understanding the racing side of the business for a fuller perspective. Shannon received an incredible education working at West Point Thoroughbreds where she weekly reviewed, what was at times, an 80 horse stable. Shannon learned so much about the race horses, trainers, tracks, vets, communication, marketing and sales. Her heart however is in the breeding and sales world and Shannon won the lottery when she came on board with Woodford Thoroughbreds. Steve and Shannon have two daughters who attend public school in Lexington, Kentucky. Her family has over the years adopted three boxers and will continue to share our home with this humorous breed of dog for as many years as we are able.

STRATEGIC PERSPECTIVES A Farm Transformed