OnTrack 2006 OnTrack 2006 Noble Financial Noble Financial Small Cap Conference Small Cap Conference September 26-28, 2006 September 26-28, 2006 Churchill Downs Incorporated Churchill Downs Incorporated (NASDAQ: CHDN) (NASDAQ: CHDN) Michael E. Miller Michael E. Miller Executive Vice President and Chief Financial Officer Executive Vice President and Chief Financial Officer Michael W. Anderson Michael W. Anderson Vice President, Corporate Finance and Treasurer Vice President, Corporate Finance and Treasurer
Safe Harbor Safe Harbor Some statements made in this presentation will be forward-looking statements as Some statements made in this presentation will be forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that include projections, expectations or beliefs about future statements are statements that include projections, expectations or beliefs about future events or results, or otherwise are not statements of historical fact. Actual performance events or results, or otherwise are not statements of historical fact. Actual performance of the Company may differ materially from that projected in such statements. of the Company may differ materially from that projected in such statements. Investors should refer to statements filed by the Company with the Securities and 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 Exchange Commission for a discussion of those factors that could affect Churchill Downs Incorporated’s operations and the forward-looking statements made today. The Downs Incorporated’s operations and the forward-looking statements made today. The information being provided is of this date only, and Churchill Downs Incorporated 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 expressly disclaims any obligation to release publicly any updates of revisions to these forward-looking statements to reflect any changes in expectations. forward-looking statements to reflect any changes in expectations.
Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI) Presentation Overview Presentation Overview •Our brands and properties •Our brands and properties •Key facts about the pari-mutuel industry •Key facts about the pari-mutuel industry •CDI: Horse racing’s industry leader •CDI: Horse racing’s industry leader •Financial highlights and key metrics •Financial highlights and key metrics •Opportunities •Opportunities •Q&A •Q&A
Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI) Our Brands and Properties Our Brands and Properties •Six racetracks in five states •Six racetracks in five states -Florida, Illinois, Indiana, Kentucky, Louisiana -Florida, Illinois, Indiana, Kentucky, Louisiana -Year-round racing -Year-round racing •Twin Spires mark •Twin Spires mark - Kentucky Derby - Kentucky Derby -Churchill Downs -Churchill Downs
Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI) Our Brands and Properties Our Brands and Properties •Churchill Downs Simulcast Network •Churchill Downs Simulcast Network Market share for CDI tracks Market share for CDI tracks -11.5 percent of U.S. racing (6000 races) -11.5 percent of U.S. racing (6000 races) -15.5 percent of U.S. wagering -15.5 percent of U.S. wagering
Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI) Key Facts About the Pari-Mutuel Key Facts About the Pari-Mutuel Industry Industry •Controlled by “Big Three” (CDI, MEC, NYRA ) •Controlled by “Big Three” (CDI, MEC, NYRA ) •Revenue base shifting to “off-track” sources •Revenue base shifting to “off-track” sources •Currently improving technology backbone (tote) •Currently improving technology backbone (tote) •Additional consolidation needed •Additional consolidation needed
Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI) CDI: Horse Racing’s Industry Leader CDI: Horse Racing’s Industry Leader •Dominant brands in horse racing •Dominant brands in horse racing •Proven management team with operations •Proven management team with operations expertise and record of success expertise and record of success -Our greatest asset = our team members -Our greatest asset = our team members -Continual learning/development for all team members -Continual learning/development for all team members
Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI) Financial Highlights and Key Metrics – Financial Highlights and Key Metrics – Net Revenues* Net Revenues* Six months ended Six months ended 2006 2005 2006 2005 Kentucky Operations (CDRT & Ellis Park) $73.7 $70.4 Kentucky Operations (CDRT & Ellis Park) $73.7 $70.4 Arlington Park 35.6 33.9 Arlington Park 35.6 33.9 Calder Race Course 25.1 24.4 Calder Race Course 25.1 24.4 Hoosier Park 19.3 20.4 Hoosier Park 19.3 20.4 Louisiana Operations 33.9 31.5 Louisiana Operations 33.9 31.5 CDSN 31.5 34.3 CDSN 31.5 34.3 Other 0.9 0.6 Other 0.9 0.6 Net Revenues - Continuing Operations $220.0 $215.5 Net Revenues - Continuing Operations $220.0 $215.5 *In millions *In millions
Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI) Financial Highlights and Key Metrics – Financial Highlights and Key Metrics – SEGMENT EBITDA* SEGMENT EBITDA* Six months ended Six months ended 2006 2005 2006 2005 Kentucky Operations (CDRT & Ellis Park) $30.9 $30.2 Kentucky Operations (CDRT & Ellis Park) $30.9 $30.2 Arlington Park (1.2) 0.0 Arlington Park (1.2) 0.0 Calder Race Course (0.5) (3.3) Calder Race Course (0.5) (3.3) Hoosier Park 0.3 0.8 Hoosier Park 0.3 0.8 Louisiana Operations 14.3 (0.4) Louisiana Operations 14.3 (0.4) CDSN 7.6 8.3 CDSN 7.6 8.3 Other Investments (0.3) (1.8) Other Investments (0.3) (1.8) Total EBITDA $51.1 $33.8 Total EBITDA $51.1 $33.8 *In millions *In millions
Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI) Financial Highlights and Key Metrics – Financial Highlights and Key Metrics – Balance Sheet* Balance Sheet* June 30, 2006 December 31, 2005 June 30, 2006 December 31, 2005 Current assets $110,653 $83,988 Current assets $110,653 $83,988 Plant and equipment, net 348,740 346,530 Plant and equipment, net 348,740 346,530 Other assets 13,690 13,020 Other assets 13,690 13,020 Goodwill and Intangibles 71,245 71,658 Goodwill and Intangibles 71,245 71,658 Current liabilities 131,633 119,263 Current liabilities 131,633 119,263 Long-term debt 22,614 33,793 Long-term debt 22,614 33,793 Other liabilities 47,501 45,909 Other liabilities 47,501 45,909 Shareholders’ equity 342,580 316,231 Shareholders’ equity 342,580 316,231 *In thousands *In thousands
Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI) Financial Highlights and Key Metrics – Financial Highlights and Key Metrics – Ownership / Trading Ownership / Trading 13.2 million TSO, 8.7 million float 13.2 million TSO, 8.7 million float •34 percent held by insiders •34 percent held by insiders •26 percent held by institutions •26 percent held by institutions •35,000 average daily trading volume (3 mo) •35,000 average daily trading volume (3 mo)
Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI) Key Metrics – Ownership/Trading Key Metrics – Ownership/Trading •13.0 short ratio (as of 7/11/06) •13.0 short ratio (as of 7/11/06) •$500+ million market cap •$500+ million market cap •EV/Revenue = 1.25 •EV/Revenue = 1.25 •EV/EBITDA = 12.6 •EV/EBITDA = 12.6
Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI) Opportunities Opportunities •Embracing Technology •Embracing Technology •Announcement of New Chief Executive Officer •Announcement of New Chief Executive Officer to Start on 8/14 to Start on 8/14 •Vertical Integration •Vertical Integration •Potential Industry Consolidation •Potential Industry Consolidation •International •International
Churchill Downs Incorporated (CDI) Churchill Downs Incorporated (CDI) Questions? Questions?
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