Investor Presentation
April 2024
Forward-Looking Statements
Certain statements made in this presentation contain various "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by the use of terms such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "might," "plan," "predict," "project," "seek," "should," "will," "scheduled," and similar words or similar expressions (or negative versions of such words or expressions), although some forward-looking statements are expressed differently. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from expectations include the following:
- the occurrence of extraordinary events, such as terrorist attacks, public health threats, civil unrest, and inclement weather, including as a result of climate change;
- the effect of economic conditions on our consumers' confidence and discretionary spending or our access to credit, including the impact of inflation;
- additional or increased taxes and fees; the impact of
- the impact of any pandemics, epidemics, or outbreaks of infectious diseases, including possible new variants of COVID-19, and related economic matters on our results of operations, financial conditions and prospects;
- lack of confidence in the integrity of our core businesses or any deterioration in our reputation;
- loss of key or highly skilled personnel, as well as general disruptions in the general labor market;
- the impact of significant competition, and the expectation that competition levels will increase;
- changes in consumer preferences, attendance, wagering, and sponsorships;
- risks associated with equity investments, strategic alliances and other third-party agreements;
- inability to respond to rapid technological changes in a timely manner;
- concentration and evolution of slot machine and historical racing machine (HRM) manufacturing and other technology conditions that could impose additional costs;
- failure to enter into or maintain agreements with industry constituents, including horsemen and other racetracks; inability to successfully focus on market access and retail operations for our TwinSpires sports betting business and effectively compete;
- online security risk, including cyber-security breaches, or loss or misuse of our stored information as a result of a breach including customers' personal information could lead to government enforcement actions or other litigation;
- reliance on our technology services and catastrophic events and system failures disrupting our operations;
- inability to identify, complete, or fully realize the benefits of, our proposed acquisitions, divestitures, development of new venues or the expansion of existing facilities on time, on budget, or as planned;
- difficulty in integrating recent or future acquisitions into our operations;
- cost overruns and other uncertainties associated with the development of new venues and the expansion of existing facilities;
- general risks related to real estate ownership and significant expenditures, including risks related to environmental liabilities;
- personal injury litigation related to injuries occurring at our racetracks;
- compliance with the Foreign Corrupt Practices Act or other similar laws and regulations, or applicable anti-money laundering regulations;
- payment-relatedrisks, such as risk associated with fraudulent credit card or debit card use;
- work stoppages and labor problems;
- risks related to pending or future legal proceedings and other actions;
- highly regulated operations and changes in the regulatory environment could adversely affect our business;
- restrictions in our debt facilities limiting our flexibility to operate our business;
- failure to comply with the financial ratios and other covenants in our debt facilities and other indebtedness;
- increases to interest rates (due to inflation or otherwise);
- disruption in the credit markets or changes to our credit ratings may adversely affect our business;
- increase in our insurance costs, or any inability to obtain similar insurance coverage in the future, and inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events; and
- other factors described under the heading "Risk Factors" in our most recent Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission.
We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law
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Table of Contents
- Business Overview and Case for Investing
- Segment Overviews:
- Live and Historical Racing
- TwinSpires
- Gaming
- Capital Management
- ESG
- Appendix
3
Business Overview and
Case for Investing
4
Business Overview
Churchill Downs Incorporated ("CDI") Overview
We have a unique and diverse collection of entertainment assets
that generate high margins with significant Adjusted EBITDA and Free Cash Flow
Churchill Downs
Racetrack ("CDRT")
Hosts the longest
continuously held annual sporting event in the U.S., the Kentucky Derby
Historical Racing
Machines ("HRMs")
Kentucky
Six gaming entertainment venues with ~4,640 HRMs and one HRM expansion project underway
Virginia
Seven HRM properties with ~2,790 HRMs and one HRM expansion project underway
New Hampshire
Chasers Poker Room in
Salem with significant HRM and table game expansion opportunity
TwinSpires
One of the largest and most profitable U.S. online wagering platforms for horse racing
Expanding pari-mutuel content and technology services to B2C sports betting platforms
Exacta provides HRM
technology to third parties and reduces internal HRM costs in Virginia & Kentucky
Gaming
Twelve gaming
properties1 with
~14,800 slot machines
and video lottery
terminals2 and ~370 table games in eleven states
- Includes Miami Valley Gaming, 50% owned Ohio joint venture, and Rivers Casino Des Plaines, 61% owned Illinois joint venture
- Includes HRMs at Fair Grounds off-track betting facilities ("OTBs")
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Case for Investing
Case for Investing
The Kentucky Derby
- Iconic and irreplaceable asset
- Consistent high margin growth and significant free cash flow over the long-term from marquee asset
- Growing international engagement through Japan and European Roads to the Derby
Diverse Organic
Growth
- Expansion of HRM properties in Kentucky,Virginia, New Hampshire, Louisiana, and other states
- Provider of HRM technology to existing and future central determinant system businesses
- One of the most profitable, industry-leading online wagering platforms for horse racing driven by access to best-in-class racing content and linkage to the Kentucky Derby
- Diverse portfolio of wholly-owned regional gaming properties and strategic equity investments
Strong Financial
Profile
- Strong free cash flow generation with disciplined maintenance capital spending
- Ability to pursue strategic reinvestment in organic growth, M&A, dividends, and share repurchases to maximize shareholder returns
- Conservative balance sheet with financial flexibility and significant access to capital
With a Proven ManagementTeam and Organizational Depth for Execution
- Proven record of disciplined capital allocation and earnings growth
- Successful track record of integrating new businesses and execution of organic growth projects
- Diverse backgrounds with multi-industry, technology, and international experience
6
Case for Investing
The Kentucky Derby is Only the Beginning
Live and Historical Racing | Gaming |
Kentucky
Notes:
- The Rose Gaming Resort in Virginia is expected to open in late 3Q'24.
- Owensboro Racing & Gaming in Kentucky is expected to open in 1Q'25.
Virginia
Collinsville | New | Kent | Dumfries Emporia |
Colonial | Downs/ |
Hampton Richmond Vinton
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Case for Investing
Strong 2023 Performance
36% Annual Revenue Growth from 2022 to 2023
$ in millions
All Other &
Eliminations
34% Annual Adj. EBITDA Growth from 2022 to 2023
$ in millions
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Case for Investing
Strong 1Q'24 Performance
6% Quarterly Revenue Growth from 1Q'23 to 1Q'24
$ in millions
All Other &
Eliminations
9% Quarterly Adj. EBITDA Growth from 1Q'23 to 1Q'24
$ in millions
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Project Capital Investments
Summary of Project Capital Investments
The Kentucky
Derby
Historical
Racing
Machines
Gaming
Project | Target | Planned Spend | ||
Completion | ($ Millions) | |||
Paddock Project | May 2024 | Up to $200 | ||
Jockey Club Suites Renovation | May 2024 | $14 | ||
Northern Virginia - The Rose Gaming Resort | Late 3Q'24 | $460 | ||
Kentucky - Owensboro Racing & Gaming | 1Q'25 | $100 | ||
New Hampshire - HRM Facility | TBD | TBD | ||
Casino: | ||||
Opened | ||||
Indiana - Terre Haute Casino Resort | April 5, 2024 | Up to $290 | ||
Hotel: | ||||
May 2024 | ||||
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Disclaimer
CDI - Churchill Downs Incorporated published this content on 24 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 April 2024 20:35:13 UTC.