OnTrack 2006 OnTrack 2006 Noble Financial Noble Financial Small - - PowerPoint PPT Presentation

OnTrack 2006 Noble Financial Small Cap Conference September 26-28, 2006

Churchill Downs Incorporated (NASDAQ: CHDN) Michael E. Miller Executive Vice President and Chief Financial Officer Michael W. Anderson Vice President, Corporate Finance and Treasurer

OnTrack 2006 Noble Financial Small Cap Conference September 26-28, 2006

Churchill Downs Incorporated (NASDAQ: CHDN) Michael E. Miller Executive Vice President and Chief Financial Officer Michael W. Anderson Vice President, Corporate Finance and Treasurer

Safe Harbor

Some statements made in this presentation will be forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include projections, expectations or beliefs about future events or results, or otherwise are not statements of historical fact. Actual performance

• f the Company may differ materially from that projected in such statements.

Investors should refer to statements filed by the Company with the Securities and Exchange Commission for a discussion of those factors that could affect Churchill Downs Incorporated’s operations and the forward-looking statements made today. The information being provided is of this date only, and Churchill Downs Incorporated expressly disclaims any obligation to release publicly any updates of revisions to these forward-looking statements to reflect any changes in expectations.

Safe Harbor

Some statements made in this presentation will be forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include projections, expectations or beliefs about future events or results, or otherwise are not statements of historical fact. Actual performance

• f the Company may differ materially from that projected in such statements.

Investors should refer to statements filed by the Company with the Securities and Exchange Commission for a discussion of those factors that could affect Churchill Downs Incorporated’s operations and the forward-looking statements made today. The information being provided is of this date only, and Churchill Downs Incorporated expressly disclaims any obligation to release publicly any updates of revisions to these forward-looking statements to reflect any changes in expectations.

Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI)

Presentation Overview

• Our brands and properties
• Key facts about the pari-mutuel industry
• CDI: Horse racing’s industry leader
• Financial highlights and key metrics
• Opportunities
• Q&A

Presentation Overview

• Our brands and properties
• Key facts about the pari-mutuel industry
• CDI: Horse racing’s industry leader
• Financial highlights and key metrics
• Opportunities
• Q&A

Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI)

Our Brands and Properties

• Six racetracks in five states
• Florida, Illinois, Indiana, Kentucky, Louisiana
• Year-round racing
• Twin Spires mark
• Kentucky Derby
• Churchill Downs

Our Brands and Properties

• Six racetracks in five states
• Florida, Illinois, Indiana, Kentucky, Louisiana
• Year-round racing
• Twin Spires mark
• Kentucky Derby
• Churchill Downs

Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI)

Our Brands and Properties

• Churchill Downs Simulcast Network

Market share for CDI tracks

• 11.5 percent of U.S. racing (6000 races)
• 15.5 percent of U.S. wagering

Our Brands and Properties

• Churchill Downs Simulcast Network

Market share for CDI tracks

• 11.5 percent of U.S. racing (6000 races)
• 15.5 percent of U.S. wagering

Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI)

Key Facts About the Pari-Mutuel Industry

• Controlled by “Big Three” (CDI, MEC, NYRA)
• Revenue base shifting to “off-track” sources
• Currently improving technology backbone (tote)
• Additional consolidation needed

Key Facts About the Pari-Mutuel Industry

• Controlled by “Big Three” (CDI, MEC, NYRA)
• Revenue base shifting to “off-track” sources
• Currently improving technology backbone (tote)
• Additional consolidation needed

Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI)

CDI: Horse Racing’s Industry Leader

• Dominant brands in horse racing
• Proven management team with operations

expertise and record of success

• Our greatest asset = our team members
• Continual learning/development for all team members

CDI: Horse Racing’s Industry Leader

• Dominant brands in horse racing
• Proven management team with operations

expertise and record of success

• Our greatest asset = our team members
• Continual learning/development for all team members

Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI)

Financial Highlights and Key Metrics – Net Revenues*

Six months ended

2006 2005 Kentucky Operations (CDRT & Ellis Park) $73.7 $70.4 Arlington Park 35.6 33.9 Calder Race Course 25.1 24.4 Hoosier Park 19.3 20.4 Louisiana Operations 33.9 31.5 CDSN 31.5 34.3 Other 0.9 0.6 Net Revenues - Continuing Operations $220.0 $215.5 *In millions

Financial Highlights and Key Metrics – Net Revenues*

Six months ended

2006 2005 Kentucky Operations (CDRT & Ellis Park) $73.7 $70.4 Arlington Park 35.6 33.9 Calder Race Course 25.1 24.4 Hoosier Park 19.3 20.4 Louisiana Operations 33.9 31.5 CDSN 31.5 34.3 Other 0.9 0.6 Net Revenues - Continuing Operations $220.0 $215.5 *In millions

Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI)

Financial Highlights and Key Metrics –

SEGMENT EBITDA*

Six months ended

2006 2005 Kentucky Operations (CDRT & Ellis Park) $30.9 $30.2 Arlington Park (1.2) 0.0 Calder Race Course (0.5) (3.3) Hoosier Park 0.3 0.8 Louisiana Operations 14.3 (0.4) CDSN 7.6 8.3 Other Investments (0.3) (1.8) Total EBITDA $51.1 $33.8 *In millions

Financial Highlights and Key Metrics –

SEGMENT EBITDA*

Six months ended

2006 2005 Kentucky Operations (CDRT & Ellis Park) $30.9 $30.2 Arlington Park (1.2) 0.0 Calder Race Course (0.5) (3.3) Hoosier Park 0.3 0.8 Louisiana Operations 14.3 (0.4) CDSN 7.6 8.3 Other Investments (0.3) (1.8) Total EBITDA $51.1 $33.8 *In millions

Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI)

Financial Highlights and Key Metrics –

Balance Sheet*

June 30, 2006 December 31, 2005 Current assets $110,653 $83,988 Plant and equipment, net 348,740 346,530 Other assets 13,690 13,020 Goodwill and Intangibles 71,245 71,658 Current liabilities 131,633 119,263 Long-term debt 22,614 33,793 Other liabilities 47,501 45,909 Shareholders’ equity 342,580 316,231

*In thousands

Financial Highlights and Key Metrics –

Balance Sheet*

June 30, 2006 December 31, 2005 Current assets $110,653 $83,988 Plant and equipment, net 348,740 346,530 Other assets 13,690 13,020 Goodwill and Intangibles 71,245 71,658 Current liabilities 131,633 119,263 Long-term debt 22,614 33,793 Other liabilities 47,501 45,909 Shareholders’ equity 342,580 316,231

*In thousands

Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI)

Financial Highlights and Key Metrics –

Ownership / Trading

13.2 million TSO, 8.7 million float

• 34 percent held by insiders
• 26 percent held by institutions
• 35,000 average daily trading volume (3 mo)

Financial Highlights and Key Metrics –

Ownership / Trading

13.2 million TSO, 8.7 million float

• 34 percent held by insiders
• 26 percent held by institutions
• 35,000 average daily trading volume (3 mo)

Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI)

Key Metrics – Ownership/Trading

• 13.0 short ratio (as of 7/11/06)
• $500+ million market cap
• EV/Revenue = 1.25
• EV/EBITDA = 12.6

Key Metrics – Ownership/Trading

• 13.0 short ratio (as of 7/11/06)
• $500+ million market cap
• EV/Revenue = 1.25
• EV/EBITDA = 12.6

Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI)

Opportunities

• Embracing Technology
• Announcement of New Chief Executive Officer

to Start on 8/14

• Vertical Integration
• Potential Industry Consolidation
• International

Opportunities

• Embracing Technology
• Announcement of New Chief Executive Officer

to Start on 8/14

• Vertical Integration
• Potential Industry Consolidation
• International

Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI)

Questions? Questions?