Churchill Downs reports results

14 Mar 2008

LOUISVILLE, Kentucky -- (PRESS RELEASE) -- Churchill Downs Incorporated (NASDAQ: CHDN) ("Company") today reported results for the fourth quarter and year ended Dec. 31, 2007.

For the full year, net revenues from continuing operations grew to $410.7 million, a 9.0 percent increase from the prior year total of $376.7 million. Net revenues from continuing operations for the fourth quarter of 2007 climbed to $89.1 million, a lift of 10.9 percent from the previous year total of $80.3 million.

Total net revenues for the year and for the fourth quarter increased primarily due to the acquisition of the AmericaTAB and Bloodstock Research Information Services ("BRIS") advance-deposit wagering ("ADW") and data businesses in June 2007, as well as the launch of Churchill Downs Incorporated's official ADW business, TwinSpires.com, during the year. Net revenues also increased year-over-year due in part to 48 additional days of live racing at Fair Grounds Race Course & Slots compared to the same period of 2006 and to the opening of the temporary slot facility at Fair Grounds. Fair Grounds conducted only 36 live racing days in 2006 due to the aftermath of Hurricane Katrina. The increase in net revenues was partially offset by four fewer race days at Churchill Downs.

A considerable difference in the amount of insurance recoveries recognized during 2007 compared to 2006, as well as higher spending on legislative initiatives in 2007 and the related increase in tax rates, contributed to lower overall net earnings. Net earnings from continuing operations for 2007 decreased to $17.0 million, or $1.23 per diluted common share, from $30.2 million, or $2.22 per diluted common share, in 2006. For the fourth quarter of 2007, the Company had a net loss from continuing operations of $5.1 million, or $0.38 per diluted common share, compared to net earnings from continuing operations of $2.5 million, or $0.18 per diluted common share, in the same period of 2006. The decrease in net earnings year-over-year was due primarily to the following factors:

* During 2007, the Company recognized a gain of $0.8 million, compared to $19.2 million during the same period of 2006, related to insurance recoveries, net of losses, associated with damages sustained from natural disasters that occurred during 2005 by the Louisiana Operations and at Calder Race Course;

* The Company's equity in loss of unconsolidated investments increased during 2007 primarily as a result of the performance of its investments in HorseRacingTV and TrackNet Media Group, LLC ("TrackNet"); and

* The Company's effective tax rate increased from 39 percent in 2006 to 42 percent in 2007, resulting primarily from the non-deductibility of legislative initiative costs in South Florida recognized during 2007.

Lower insurance-related gains, plus the Company's investment of $2.6 million in South Florida legislative initiatives during 2007, primarily contributed to the year-over-year difference in EBITDA (earnings before interest, taxes, depreciation and amortization) from continuing operations. EBITDA for 2007 was $55.2 million versus $69.7 million in 2006. The Company's EBITDA for 2006 included the positive impact of $19.2 million of insurance recoveries, net of losses, related to storm damage incurred in the fall of 2005 at Calder and throughout the Louisiana Operations.

President and Chief Executive Officer Robert L. Evans said the Company made substantial progress during 2007 on several strategic initiatives intended to move Churchill Downs Incorporated down the path towards meaningful, long-term growth. "We entered the ADW market mid-year with the launch of TwinSpires.com and the acquisition of the AmericaTAB and BRIS businesses," Evans said. "Today, our ADW platform offers some of the most sought-after horse racing content available, and TwinSpires.com continues to offer customers superior handicapping products and greater incentives to play. Through our TrackNet joint venture, we also increased the rate of revenue returned to horsemen and racetracks on handle generated through the ADW channel, thereby securing a greater return on investment for those who actually create the racing product.

"In 2007, we expanded our gaming business in Louisiana, opening a temporary slot machine facility at Fair Grounds that has exceeded our expectations. Average daily gross win per unit grew from $123 in September 2007 to $237 in December of last year. For January and February 2008, that average has climbed to $314. While we cannot predict future levels of play, we are very pleased with the facility's performance to date. Construction on Fair Grounds' permanent facility is on track, and we expect to open the new, larger building, which will initially feature 600 slot machines, this fall.

"Thanks to our successful campaign in Florida, we have the opportunity to add slot machine gaming to Calder. We are still examining how best to deploy our capital in the market and are not ready to announce our plans for a slot machine gaming facility. We will continue to work through the licensing and permitting process and other logistics necessary to put a final plan in place. We do want to thank voters in Miami-Dade County for their support at the polls last January. We also extend our gratitude to lawmakers in Florida and in Louisiana for working proactively with the horse racing industry on gaming initiatives. Their efforts have resulted in new revenue streams for state programs and have provided a competitive advantage for the horse racing industries in both states."

Evans, concluded, "As we move ahead in 2008, we will continue to aggressively manage our cost structure by implementing new operating and purchasing efficiencies. We will focus on increasing wagering revenues by working to capture greater market share, particularly in the ADW channel. In the year ahead, we will also leverage our racing greatest assets, the Kentucky Derby and Kentucky Oaks, to help us identify and engage new fans for horse racing. We'll introduce a number of innovative programs, wagering products, interactive contests and entertainment options that we believe will drive sign-ups for TwinSpires.com, enhance Kentucky Derby weekend for guests who join us on-track, and allow us to bring the Derby experience home to millions of fans around the world who want to be part of the first Saturday in May."

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	Churchill Downs reports results 14 Mar 2008 <a href='https://ad.casinocity.com/adclick.php?n=a21efcd1'><img src='https://ad.casinocity.com/adview.php?what=-site:vendors/width:250/RON&n=a21efcd1' border='0' alt='' /></a> LOUISVILLE, Kentucky -- (PRESS RELEASE) -- Churchill Downs Incorporated (NASDAQ: CHDN) ("Company") today reported results for the fourth quarter and year ended Dec. 31, 2007. For the full year, net revenues from continuing operations grew to $410.7 million, a 9.0 percent increase from the prior year total of $376.7 million. Net revenues from continuing operations for the fourth quarter of 2007 climbed to $89.1 million, a lift of 10.9 percent from the previous year total of $80.3 million. Total net revenues for the year and for the fourth quarter increased primarily due to the acquisition of the AmericaTAB and Bloodstock Research Information Services ("BRIS") advance-deposit wagering ("ADW") and data businesses in June 2007, as well as the launch of Churchill Downs Incorporated's official ADW business, TwinSpires.com, during the year. Net revenues also increased year-over-year due in part to 48 additional days of live racing at Fair Grounds Race Course & Slots compared to the same period of 2006 and to the opening of the temporary slot facility at Fair Grounds. Fair Grounds conducted only 36 live racing days in 2006 due to the aftermath of Hurricane Katrina. The increase in net revenues was partially offset by four fewer race days at Churchill Downs. A considerable difference in the amount of insurance recoveries recognized during 2007 compared to 2006, as well as higher spending on legislative initiatives in 2007 and the related increase in tax rates, contributed to lower overall net earnings. Net earnings from continuing operations for 2007 decreased to $17.0 million, or $1.23 per diluted common share, from $30.2 million, or $2.22 per diluted common share, in 2006. For the fourth quarter of 2007, the Company had a net loss from continuing operations of $5.1 million, or $0.38 per diluted common share, compared to net earnings from continuing operations of $2.5 million, or $0.18 per diluted common share, in the same period of 2006. The decrease in net earnings year-over-year was due primarily to the following factors: * During 2007, the Company recognized a gain of $0.8 million, compared to $19.2 million during the same period of 2006, related to insurance recoveries, net of losses, associated with damages sustained from natural disasters that occurred during 2005 by the Louisiana Operations and at Calder Race Course; * The Company's equity in loss of unconsolidated investments increased during 2007 primarily as a result of the performance of its investments in HorseRacingTV and TrackNet Media Group, LLC ("TrackNet"); and * The Company's effective tax rate increased from 39 percent in 2006 to 42 percent in 2007, resulting primarily from the non-deductibility of legislative initiative costs in South Florida recognized during 2007. Lower insurance-related gains, plus the Company's investment of $2.6 million in South Florida legislative initiatives during 2007, primarily contributed to the year-over-year difference in EBITDA (earnings before interest, taxes, depreciation and amortization) from continuing operations. EBITDA for 2007 was $55.2 million versus $69.7 million in 2006. The Company's EBITDA for 2006 included the positive impact of $19.2 million of insurance recoveries, net of losses, related to storm damage incurred in the fall of 2005 at Calder and throughout the Louisiana Operations. President and Chief Executive Officer Robert L. Evans said the Company made substantial progress during 2007 on several strategic initiatives intended to move Churchill Downs Incorporated down the path towards meaningful, long-term growth. "We entered the ADW market mid-year with the launch of TwinSpires.com and the acquisition of the AmericaTAB and BRIS businesses," Evans said. "Today, our ADW platform offers some of the most sought-after horse racing content available, and TwinSpires.com continues to offer customers superior handicapping products and greater incentives to play. Through our TrackNet joint venture, we also increased the rate of revenue returned to horsemen and racetracks on handle generated through the ADW channel, thereby securing a greater return on investment for those who actually create the racing product. "In 2007, we expanded our gaming business in Louisiana, opening a temporary slot machine facility at Fair Grounds that has exceeded our expectations. Average daily gross win per unit grew from $123 in September 2007 to $237 in December of last year. For January and February 2008, that average has climbed to $314. While we cannot predict future levels of play, we are very pleased with the facility's performance to date. Construction on Fair Grounds' permanent facility is on track, and we expect to open the new, larger building, which will initially feature 600 slot machines, this fall. "Thanks to our successful campaign in Florida, we have the opportunity to add slot machine gaming to Calder. We are still examining how best to deploy our capital in the market and are not ready to announce our plans for a slot machine gaming facility. We will continue to work through the licensing and permitting process and other logistics necessary to put a final plan in place. We do want to thank voters in Miami-Dade County for their support at the polls last January. We also extend our gratitude to lawmakers in Florida and in Louisiana for working proactively with the horse racing industry on gaming initiatives. Their efforts have resulted in new revenue streams for state programs and have provided a competitive advantage for the horse racing industries in both states." Evans, concluded, "As we move ahead in 2008, we will continue to aggressively manage our cost structure by implementing new operating and purchasing efficiencies. We will focus on increasing wagering revenues by working to capture greater market share, particularly in the ADW channel. In the year ahead, we will also leverage our racing greatest assets, the Kentucky Derby and Kentucky Oaks, to help us identify and engage new fans for horse racing. We'll introduce a number of innovative programs, wagering products, interactive contests and entertainment options that we believe will drive sign-ups for TwinSpires.com, enhance Kentucky Derby weekend for guests who join us on-track, and allow us to bring the Derby experience home to millions of fans around the world who want to be part of the first Saturday in May."