Brean Murray, Carret & Co. Brean Murray, Carret & Co. Small - - PowerPoint PPT Presentation

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Brean Murray, Carret & Co. Brean Murray, Carret & Co. Small - - PowerPoint PPT Presentation

Dec 12, 2022 40 likes •215 views

Brean Murray, Carret & Co. Brean Murray, Carret & Co. Small Cap Institutional Investor Conference 2006 Small Cap Institutional Investor Conference 2006 Churchill Downs Incorporated Churchill Downs Incorporated (NASDAQ: CHDN) (NASDAQ:

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SLIDE 1

Brean Murray, Carret & Co.

Small Cap Institutional Investor Conference 2006 Churchill Downs Incorporated (NASDAQ: CHDN) Michael E. Miller Executive Vice President and Chief Financial Officer

Brean Murray, Carret & Co.

Small Cap Institutional Investor Conference 2006 Churchill Downs Incorporated (NASDAQ: CHDN) Michael E. Miller Executive Vice President and Chief Financial Officer

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SLIDE 2

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.

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SLIDE 3

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
  • Our growth strategy
  • Key metrics
  • Key takeaways

Presentation Overview

  • Our brands and properties
  • Key facts about the pari-mutuel industry
  • CDI: Horse racing’s industry leader
  • Our growth strategy
  • Key metrics
  • Key takeaways
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SLIDE 4

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
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SLIDE 5

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
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SLIDE 6

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
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SLIDE 7

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
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SLIDE 8

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

CDI: Horse Racing’s Industry Leader

  • Proven M&A capabilities
  • History of innovation
  • Strong balance sheet

CDI: Horse Racing’s Industry Leader

  • Proven M&A capabilities
  • History of innovation
  • Strong balance sheet
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SLIDE 9

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

Our Growth Strategy

  • Develop existing racetrack/simulcast-wagering

properties

  • Content and brand development
  • Alternative and internet gaming
  • Casino-style gaming at racetracks
  • Rationalize advance-depositing wagering (ADW)
  • Technology focus

Our Growth Strategy

  • Develop existing racetrack/simulcast-wagering

properties

  • Content and brand development
  • Alternative and internet gaming
  • Casino-style gaming at racetracks
  • Rationalize advance-depositing wagering (ADW)
  • Technology focus
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SLIDE 10

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

Growth Categories Growth Categories

Category 1

Develop Existing Properties

  • Capital investments

(Churchill Downs Racetrack Renovation)

  • Customer Relationship

Management initiative

Category 2

Content and Brand Development

  • Churchill Downs

Simulcast Network (CDSN)

  • Kentucky Derby, marquee

events

  • M&A activity
  • International distribution

Category 3

Alternative and Internet Gaming

  • Casino-style gaming at

racetracks

  • Rationalize ADW
  • Technology focus
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SLIDE 11

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

Key Metrics – Revenues*

2004 2003 Kentucky Operations (CDRT & Ellis Park) $87.3 $84.0 Arlington Park 79.6 78.3 Calder Race Course 79.5 78.5 Hoosier Park 41.5 42.8 Louisiana Operations 11.6

  • CDSN

77.8 77.4 Other/Corporate 2.3 4.2 Net Revenues $463.1 $444.1 *In millions

Key Metrics – Revenues*

2004 2003 Kentucky Operations (CDRT & Ellis Park) $87.3 $84.0 Arlington Park 79.6 78.3 Calder Race Course 79.5 78.5 Hoosier Park 41.5 42.8 Louisiana Operations 11.6

  • CDSN

77.8 77.4 Other/Corporate 2.3 4.2 Net Revenues $463.1 $444.1 *In millions

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SLIDE 12

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

Key Metrics – EBITDA*

2004 2003 Kentucky Operations (CDRT & Ellis Park) $12.2 $18.1 Arlington Park 11.0 8.7 Calder Race Course 9.5 14.3 Hoosier Park 1.9 2.4 Louisiana Operations 0.02

  • CDSN

18.8 18.9 Total Racing Operations $60.7 $69.6 *In millions

Key Metrics – EBITDA*

2004 2003 Kentucky Operations (CDRT & Ellis Park) $12.2 $18.1 Arlington Park 11.0 8.7 Calder Race Course 9.5 14.3 Hoosier Park 1.9 2.4 Louisiana Operations 0.02

  • CDSN

18.8 18.9 Total Racing Operations $60.7 $69.6 *In millions

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SLIDE 13

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

Key Metrics – Balance Sheet*

  • Sept. 30, 2005

Current assets $ 93,966 Plant and equipment, net 348,790 Other assets 14,095 Current liabilities 138,427 Long-term debt 18,086 Other liabilities 21,544 Shareholders’ equity 207,537 *In thousands

Key Metrics – Balance Sheet*

  • Sept. 30, 2005

Current assets $ 93,966 Plant and equipment, net 348,790 Other assets 14,095 Current liabilities 138,427 Long-term debt 18,086 Other liabilities 21,544 Shareholders’ equity 207,537 *In thousands

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SLIDE 14

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

Key Metrics – Ownership/Trading

  • 13.0 million TSO, 7.2 million float
  • 45 percent held by insiders
  • 27 percent held by institutions
  • 26,000 average daily trading volume

Key Metrics – Ownership/Trading

  • 13.0 million TSO, 7.2 million float
  • 45 percent held by insiders
  • 27 percent held by institutions
  • 26,000 average daily trading volume
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SLIDE 15

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

Key Metrics – Ownership/Trading

  • 11.3 short ratio (as of Jan. 15, 2005)
  • 500+ million market cap
  • EV/Revenue = .97
  • EV/EBITDA = 8.79

Key Metrics – Ownership/Trading

  • 11.3 short ratio (as of Jan. 15, 2005)
  • 500+ million market cap
  • EV/Revenue = .97
  • EV/EBITDA = 8.79
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SLIDE 16

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

Key Takeaways

  • Horse racing remains competitive
  • CHDN shares fairly valued based on

performance

  • CDI well positioned for growth
  • Strong balance sheet with access to capital
  • Best-known brands in racing
  • Three-part growth strategy
  • Proven management team
  • Record of success (operations/M&A)

Key Takeaways

  • Horse racing remains competitive
  • CHDN shares fairly valued based on

performance

  • CDI well positioned for growth
  • Strong balance sheet with access to capital
  • Best-known brands in racing
  • Three-part growth strategy
  • Proven management team
  • Record of success (operations/M&A)
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SLIDE 17

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

Questions? Questions?