Churchill Downs Loss Grows

17 Mar 2005

LOUISVILLE, Kentucky -- (PRESS RELEASE) -- Churchill Downs Incorporated (NASDAQ: CHDN - News; "CDI" or "Company") today reported earnings results for the fourth quarter and year ended Dec. 31, 2004.

Net revenues for the year totaled $463.1 million, a 4.3-percent increase from revenues of $444.1 million in 2003. Net earnings totaled $0.67 per fully diluted share, compared with $1.75 per fully diluted share in 2003. The 2004 results included a one-time, $1.6 million gain from the sale of a portion of the Company's ownership in Kentucky Downs offset by $5.9 million in expenses related to alternative gaming ballot initiatives, $6.2 million in non-cash impairment charges at Ellis Park, and a $4.3 million non-cash, unrealized loss related to the terms of a convertible note issued in the fourth quarter.

For the fourth quarter of 2004, the Company reported net revenues of $116.1 million, an increase of 17.5 percent from the $98.8 million reported during the same period in 2003. The net loss was $3.2 million, or ($0.25) per diluted share, versus a loss of $389,000 or ($0.03) per diluted share in the fourth quarter of 2003. The results include the non-cash, $4.3 million mark-to-market, unrealized loss related to the terms of a convertible note issued in the fourth quarter of 2004.

Thomas H. Meeker, CDI's president and chief executive officer, described 2004 as a pivotal year for the Company. "Our 2004 performance was strong across our operations, especially when looking beyond the unusual items that reduced our earnings by approximately $0.98 per share," stated Meeker. "In 2004 we grew our revenues, maintained our gross profit margin of 17 percent and generated EBITDA of more than $50 million.

"We also achieved several key objectives over the course of the year. We acquired Fair Grounds Race Course and in the process gained first quarter racing and an entry into the 'racino' business. We gained statewide approval to pursue alternative gaming in Florida, and despite a setback at the local level, remain hopeful that we can win an enabling vote in 2007. We continued the build out of our Customer Relationship Management ("CRM") platform, and have nearly completed the renovations at Churchill Downs racetrack, where sales of our new luxury suites and personal seat licenses more than exceeded our expectations. These achievements are significant examples of steps we are taking to position our Company for future growth.

"In 2005, we anticipate an exceptional Kentucky Derby and Oaks in our newly renovated Churchill Downs facility, improvement in our simulcast sales and initial returns from our CRM initiative," Meeker continued. "We also will continue to aggressively pursue additional opportunities to build shareholder value, including ongoing development initiatives, exploration of options to maximize our Hollywood Park asset, and the potential incorporation of slot machines at Fair Grounds in 2006."

Meeker concluded, "Because of the unpredictable nature of these development-related activities, both in the coming years and the recent past, providing guidance on an earnings per share ("EPS") basis has proven to be more and more difficult and less meaningful. Consequently, we have made a decision to suspend our practice of assigning an EPS target to our various reporting periods. We will continue to provide updates on business trends, operational results and ongoing development initiatives, but will not attempt to quantify their impact through EPS guidance."

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	Churchill Downs Loss Grows 17 Mar 2005 LOUISVILLE, Kentucky -- (PRESS RELEASE) -- Churchill Downs Incorporated (NASDAQ: CHDN - News; "CDI" or "Company") today reported earnings results for the fourth quarter and year ended Dec. 31, 2004. Net revenues for the year totaled $463.1 million, a 4.3-percent increase from revenues of $444.1 million in 2003. Net earnings totaled $0.67 per fully diluted share, compared with $1.75 per fully diluted share in 2003. The 2004 results included a one-time, $1.6 million gain from the sale of a portion of the Company's ownership in Kentucky Downs offset by $5.9 million in expenses related to alternative gaming ballot initiatives, $6.2 million in non-cash impairment charges at Ellis Park, and a $4.3 million non-cash, unrealized loss related to the terms of a convertible note issued in the fourth quarter. For the fourth quarter of 2004, the Company reported net revenues of $116.1 million, an increase of 17.5 percent from the $98.8 million reported during the same period in 2003. The net loss was $3.2 million, or ($0.25) per diluted share, versus a loss of $389,000 or ($0.03) per diluted share in the fourth quarter of 2003. The results include the non-cash, $4.3 million mark-to-market, unrealized loss related to the terms of a convertible note issued in the fourth quarter of 2004. Thomas H. Meeker, CDI's president and chief executive officer, described 2004 as a pivotal year for the Company. "Our 2004 performance was strong across our operations, especially when looking beyond the unusual items that reduced our earnings by approximately $0.98 per share," stated Meeker. "In 2004 we grew our revenues, maintained our gross profit margin of 17 percent and generated EBITDA of more than $50 million. "We also achieved several key objectives over the course of the year. We acquired Fair Grounds Race Course and in the process gained first quarter racing and an entry into the 'racino' business. We gained statewide approval to pursue alternative gaming in Florida, and despite a setback at the local level, remain hopeful that we can win an enabling vote in 2007. We continued the build out of our Customer Relationship Management ("CRM") platform, and have nearly completed the renovations at Churchill Downs racetrack, where sales of our new luxury suites and personal seat licenses more than exceeded our expectations. These achievements are significant examples of steps we are taking to position our Company for future growth. "In 2005, we anticipate an exceptional Kentucky Derby and Oaks in our newly renovated Churchill Downs facility, improvement in our simulcast sales and initial returns from our CRM initiative," Meeker continued. "We also will continue to aggressively pursue additional opportunities to build shareholder value, including ongoing development initiatives, exploration of options to maximize our Hollywood Park asset, and the potential incorporation of slot machines at Fair Grounds in 2006." Meeker concluded, "Because of the unpredictable nature of these development-related activities, both in the coming years and the recent past, providing guidance on an earnings per share ("EPS") basis has proven to be more and more difficult and less meaningful. Consequently, we have made a decision to suspend our practice of assigning an EPS target to our various reporting periods. We will continue to provide updates on business trends, operational results and ongoing development initiatives, but will not attempt to quantify their impact through EPS guidance."