Churchill Downs, Incorporated · NASDAQ:CHDN

Churchill Downs — Investor Presentation (April 2024)

68 slides from Churchill Downs's investor presentation, April 2024

1. Slide 1: Investor Presentation

   Investor Presentation April 2024

2. Slide 2: Forward-Looking Statements

   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 suc

3. Slide 3: Table of Contents

   Table of Contents  Business Overview and Case for Investing  Segment Overviews: – Live and Historical Racing – TwinSpires – Gaming  Capital Management  ESG  Appendix 3

4. Slide 4: Business Overview and Case for Investing

   Business Overview and Case for Investing 4

5. Slide 5: Churchill Downs Incorporated ("CDI") Overview

   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 Historical Racing TwinSpires Gaming Racetrack (“CDRT”) Machines (“HRMs”) Kent

6. Slide 6: Case for Investing

   Case for Investing Case for Investing Diverse Organic Strong Financial The Kentucky Derby Growth Profile  Iconic and irreplaceable asset  Expansion of HRM properties in  Strong free cash flow generation Kentucky,Virginia, New Hampshire, with disciplined maintenance Louisiana, and other states cap

7. Slide 7: The Kentucky Derby is Only the Beginning

   Case for Investing The Kentucky Derby is Only the Beginning Live and Historical Racing Gaming Kentucky Virginia Collinsville Colonial Downs/ New Kent Dumfries Emporia Hampton Richmond Vinton Notes: 1. The Rose Gaming Resort in Virginia is expected to open in late 3Q’24. 2. Owensboro Racing & Gaming

8. Slide 8: Strong 2023 Performance

   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 8

9. Slide 9: Strong 1Q'24 Performance

   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 9

10. Slide 10: Summary of Project Capital Investments

    Project Capital Investments Summary of Project Capital Investments Target Planned Spend Project Completion ($ Millions) Paddock Project May 2024 Up to $200 The Kentucky Derby Jockey Club Suites Renovation May 2024 $14 Northern Virginia – The Rose Gaming Resort Late 3Q’24 $460 Historical Racing Kentu

11. Slide 11: Multi-Year Capital Investments at Churchill Downs Racetrack

    Announced Project Capital Investments Multi-Year Capital Investments at Churchill Downs Racetrack The Paddock Project May 2024 First Turn Skye Terrace Infield General Admission Turf Club Backside Stables Mansion & Matt Winn’s Turf Suites Big Board Jockey Club Homestretch Club Jockey Club Suites Back

12. Slide 12: Paddock Project at Churchill Downs Racetrack

    Announced Project Capital Investments Paddock Project at Churchill Downs Racetrack Enhancing the Paddock experience for nearly every guest for the 150th Kentucky Derby in May 2024  Up to $200 million with a payback period of < 8 years  3,025 new premium reserved seats and 3,250 new standing room o

13. Slide 13: Virginia Development Rights

    Announced Project Capital Investments Virginia Development Rights The Rose Gaming Resort  The Rose Gaming Resort is located ~30 miles south of Washington DC off I-95 – ~6.5 million people in the Northern Virginia & Washington DC market  HRM entertainment venue – 1,650 HRMs – 102-room hotel – 2,540

14. Slide 14: Western Kentucky Strategy

    Announced Project Capital Investments Western Kentucky Strategy Ellis Park Racing & Gaming Owensboro Racing & Gaming  Ellis Park, located in Henderson, Kentucky, serves  Owensboro Racing & Gaming will be located with the Western Kentucky market and is convenient access to Highway 60 and ~6 miles a

15. Slide 15: New Hampshire HRM Strategy

    Announced Project Capital Investments New Hampshire HRM Strategy Chasers  Located in Salem, New Hampshire – Approximately 30 minutes from downtown Boston – The Boston Metro Area (Boston-Cambridge-Newton) has a population of ~4.9 million people  Chasers is one of the leading New Hampshire charitabl

16. Slide 16: Terre Haute Casino Resort

    Announced Project Capital Investments Terre Haute Casino Resort Building the new Terre Haute Casino Resort  Located ~70 miles southwest of Indianapolis, Indiana  Up to $290 million investment  Entertainment amenities include: – 1,000 slot machines – 36 table games – High-limit gaming lounge – 122

17. Slide 17: Live and Historical Racing Segment

    Live and Historical Racing Segment 17

18. Slide 18: Kentucky Live and Historical Racing Overview

    Live and Historical Racing Segment Kentucky Live and Historical Racing Overview Four racetracks in Kentucky with six HRM facilities Live Racing KY Historical Racing Facilities Total Segment Key Metrics Churchill Downs Derby City Gaming Home of the $ in millions 2023 1Q’24 Kentucky Derby Derby City G

19. Slide 19: The Kentucky Derby Overview

    The Kentucky Derby The Kentucky Derby Overview The Kentucky Derby utilizes the magic and mystique of Churchill Downs to create unique experiences for our guests 19

20. Slide 20: The Kentucky Derby - By The Numbers

    The Kentucky Derby The Kentucky Derby - By The Numbers Broad ranging in-person appeal and significant broadcast interest creates long-term support for iconic entertainment event NBC’s Most Watched Program Since Super Bowl LVII Appeals to all ages1 Age Range of  16.6 million peak viewership Derby At

21. Slide 21: The Kentucky Derby - By The Numbers

    The Kentucky Derby The Kentucky Derby - By The Numbers Derby Week All-Sources Wagering $ in millions 6% Average Annual Growth Rate $392 $412 $343 $311 $315 $285 $254 $263 $267 $175 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Kentucky Oaks & Kentucky Derby Purses $ in millions $2MM increase ove

22. Slide 22: The 150 Days of Celebration Leading Up to the 150th Kentucky Derby

    The Kentucky Derby The 150 Days of Celebration Leading Up to the 150th Kentucky Derby On December 6, 2023, we kicked off 150 days of events with various non-affiliated organizations celebrating the 150th Kentucky Derby December 6, 2023 April 13, 2024 April 20, 2024 Kentucky Derby Museum Fillies Derb

23. Slide 23: The Lead Up to the Kentucky Derby

    The Kentucky Derby The Lead Up to the Kentucky Derby 23

24. Slide 24: A Premier International Sporting & Entertainment Event

    The Kentucky Derby A Premier International Sporting & Entertainment Event Derby Week Revenue Kentucky Derby Growth Strategy Broadcast Other Leverage unique experiences and make License / Sponsorship strategic capital investments  Enhance guest experience to enable pricing differentiation for reserv

25. Slide 25: Investing Capital in Unique Experiences

    The Kentucky Derby Investing Capital in Unique Experiences Capital Enhance Investments Guest Enable Price to Enable Experience Differentiation Segmentation Conversion to all-inclusive 2021 experience for all reserved    seating 2022 Homestretch Club    2023 First Turn Experience    2024 Pad

26. Slide 26: Sponsorship Strategy

    The Kentucky Derby Sponsorship Strategy Building relationships with sponsors targeting luxury, lifestyle and technology categories for both onsite experiences and Derby parties around the globe  Partners include Woodford Reserve, SAP, Longines, Ford, FanDuel, and White Claw  Majority of sponsorshi

27. Slide 27: International Growth Strategy

    The Kentucky Derby International Growth Strategy Three unique Roads to the Derby for a horse to qualify in one of 20 coveted Derby starting positions United States Japan Europe Horses compete for a Horses compete for one Horses compete for one Derby starting position Derby starting position Derby st

28. Slide 28: Historical Racing Machine Overview

    Historical Racing Machines Historical Racing Machine Overview A historical horse racing machine (“HRM”) is a gaming device that uses the results of previously run horse races to approximate the gaming experience of Class II and Class III machines  Top game titles / themes are from Aristocrat, Light

29. Slide 29: Historical Racing Machine Overview

    Historical Racing Machines Historical Racing Machine Overview In Virginia, Colonial Downs is the only entity eligible to operate HRMs in the state and is permitted to operate HRMs at up to 10 “satellite facilities” with a statewide limit of 5,000 HRMs  Seven facilities acquired in the P2E transacti

30. Slide 30: Historical Racing Machine Overview - Kentucky

    Historical Racing Machines Historical Racing Machine Overview - Kentucky Nine racing licenses have been awarded by the Kentucky Horse Racing Commission and are each allowed to have a main facility and one “annex” facility within a 60 mile radius of the licensed racetrack  CDI holds four racing lice

31. Slide 31: Churchill Downs Racetrack and Derby City Gaming

    Historical Racing Machines Churchill Downs Racetrack and Derby City Gaming Derby City Gaming & Hotel  Operates as Churchill Downs Racetrack’s ancillary training facility in Louisville, Kentucky  HRM entertainment venue includes: Opened Sep. 2018 Dec. 2023 – Center bar with large format televisions

32. Slide 32: Oak Grove Racing, Gaming & Hotel

    Historical Racing Machines Oak Grove Racing, Gaming & Hotel Oak Grove Racing, Gaming & Hotel Annex  Located off of Hwy 24 on the KY / TN border  ~55 miles from Nashville, Tennessee (MSA pop. ~1.3 Opened Sep. 2020 million)  Near Fort Campbell, the second largest military base in the Total investme

33. Slide 33: Turfway Park Racing & Gaming and Newport Racing & Gaming

    Historical Racing Machines Turfway Park Racing & Gaming and Newport Racing & Gaming Turfway Park Racing & Gaming  Located in Northern Kentucky (~10 miles to Cincinnati, OH) Opened Sept. 2022 Oct. 2020  Opened September 1, 2022 Total investment  HRM entertainment venue includes: $2001 $372 – Thoro

34. Slide 34: Ellis Park Racing & Gaming and Owensboro Racing & Gaming

    Historical Racing Machines Ellis Park Racing & Gaming and Owensboro Racing & Gaming Ellis Park Racing & Gaming  Located off of Interstate 69 on the KY / IN border  ~5 miles from Evansville, Indiana (MSA pop. ~315,000)  Facility includes: Opened 1922 1Q’25 – Thoroughbred racetrack – Retail sports

35. Slide 35: Virginia HRM

    Historical Racing Machines Virginia HRM Western Region Northern Virginia Central Virginia Southern Virginia Virginia Colonial Rosie’s The Rose Location Richmond Downs Hampton Emporia Collinsville Vinton (Dumfries) (Dumfries) (New Kent) Opened Jan. 2021 Late 3Q’24 Jun. 2019 Apr. 2019 Oct. 2019 Sept.

36. Slide 36: TwinSpires Segment

    TwinSpires Segment 36 CHURCHILL DOWNS

37. Slide 37: TwinSpires Growth Strategy

    TwinSpires TwinSpires Growth Strategy Grow core TwinSpires horse racing customers  Leverage linkage to Kentucky Derby to efficiently acquire customers  Utilize in-house development team to continue to enhance superior technology platform  Utilize analytics on customer behavior to drive efficient

38. Slide 38: Acquisition of Exacta Systems

    Acquisition of Exacta Systems Acquisition of Exacta Systems CDI acquired Exacta Systems on August 22, 2023 for $250 million  Business overview – Provider of technology to support historical horse racing (“HRM”) operations: • CDI HRM operations in Virginia, Kentucky, and New Hampshire • Third-party

39. Slide 39: Horse Racing Industry Handle and Online Wagering

    TwinSpires Horse Racing Horse Racing Industry Handle and Online Wagering Online wagering on horse racing has grown significantly since 2019 U.S.Thoroughbred Horse Racing Handle1 U.S.Thoroughbred Horse Racing Handle1 $ in billions 2.2% $ in billions (4)% $12.1 $2.7 $11.7 CAGR $2.6 $11.0 $6.4 $6.6 53%

40. Slide 40: TwinSpires Handle Growth

    TwinSpires Horse Racing TwinSpires Handle Growth TwinSpires Horse Racing handle1 has also grown significantly since 2019 $ in millions 8% $ in millions $1,959 $1,992 CAGR $411 $420 $1,456 2019 2022 2023 1Q'23 1Q'24 VPY: (0)% +2% VPY: +2% V’19: +34% +37% V’19: +38% 1 TwinSpires handle excludes Veloci

41. Slide 41: TwinSpires Horse Racing

    TwinSpires Horse Racing TwinSpires Horse Racing TwinSpires Horse Racing business is a well-proven, profitable, and growing platform built on pari-mutuel wagering economics 24/7/365 Wagering in 16 Countries with Strategic Advantages ~165,000 Races at 360 Racetracks Linkage to the Kentucky Derby  Ine

42. Slide 42: TwinSpires B2B Growth Strategy – FanDuel and DraftKings Agreements

    TwinSpires TwinSpires B2B Growth Strategy – FanDuel and DraftKings Agreements FanDuel DraftKings  Agreement began in January 2023  DraftKings launched DK HORSE in March 2023  FanDuel created a fully integrated and seamless ahead of the 149th running of the Kentucky wagering experience with a sing

43. Slide 43: TwinSpires Sports and Casino Strategy

    TwinSpires Sports and Casino TwinSpires Sports and Casino Strategy CDI will maintain its retail sportsbooks and monetize online market access rights Jurisdiction CDI Property Illinois Rivers Des Plaines Equity Investment1 Indiana Terre Haute Casino Resort Iowa Hard Rock Hotel and Casino Sioux City2

44. Slide 44: Gaming Segment

    Gaming Segment 44 CHURCHILL DOWNS

45. Slide 45: Regional Gaming Properties

    Gaming Segment Regional Gaming Properties Diverse portfolio of gaming properties Strategic Advantages Local approach Key Metrics  Unique brands and marketing strategies  Menus and offerings reflect local tastes $ in millions 2023 1Q’24  Promotions catered to local customer base  Loyal player bas

46. Slide 46: Wholly-Owned Gaming Properties

    Gaming Properties Wholly-Owned Gaming Properties Ten wholly-owned regional gaming properties Slots1 & Video Hotel Retail State Property Acres Tables1 Racetrack Poker / Rooms Sportsbook VLTs1 FL Calder Casino 54 1,080 6 - - - Hard Rock Hotel & Casino IA Sioux City 15 660 20 - 54  IN Terre Haute Casi

47. Slide 47: Equity Investments

    Gaming Properties Equity Investments Rivers Casino Des Plaines (61% Ownership) Miami Valley Gaming (50% Ownership) Property Property  Premier location on 21 acres in Des Plaines, IL  Located on 120 acres in Lebanon, OH (North of Cincinnati, (~17 mi. from Chicago) south of Dayton)  ~2,000 position

48. Slide 48: Capital Management

    Capital Management 48 CHURCHILL DOWNS

49. Slide 49: Capital management philosophy based on creating long-term shareholder value

    Capital Management Capital management philosophy based on creating long-term shareholder value Maintain broad and expedient access to the capital markets  Ideal target is 3.0x-4.0x bank covenant net leverage - willing to go higher for a strategic investment Engage in open and active dialogue with r

50. Slide 50: Capital Projects

    Capital Management Capital Projects Projected Capital Investments Capital 2023 Actuals 2024 Outlook Maintenance $78 million $90 - $105 million Project $599 million $450 - $550 million  Churchill Downs  Terre Haute  Churchill Downs  Terre Haute  DCG Downtown  The Rose  Ellis / Owensboro  Virg

51. Slide 51: M&A and Organic Capital Investments are a Core Discipline of Our Team

    Capital Management M&A and Organic Capital Investments are a Core Discipline of Our Team Disciplined M&A  Rivers Casino Des Plaines  P2E: ~7.8x multiple including tax benefits, < 7.8x after realizing synergies from the Exacta transaction – Provides substantial scale and expands historical racing g

52. Slide 52: CDI has returned over $1.9 billion of capital to shareholders since 2015

    Capital Management CDI has returned over $1.9 billion of capital to shareholders since 2015 Dividends  January 2024 was the 13th consecutive increase in the dividend per share  Over $230 million paid to shareholders in dividends since 20151 Share Repurchases  Returned nearly $1.7 billion to share

53. Slide 53: Churchill Downs Incorporated vs. S&P 500 10-Year Relative Growth

    Capital Management Churchill Downs Incorporated vs. S&P 500 10-Year Relative Growth 5-Year Relative Growth CAGR 5-Year 10-Year CHDN 19% 24% +164% S&P 500 11% 10% +770% +70% Apr-19 Apr-20 Apr-21 Apr-22 Apr-23 Apr-24 +166% As of April 22, 2024 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 Ap

54. Slide 54: Environmental, Social, and Governance

    Environmental, Social, and Governance 54

55. Slide 55: CDI Approach to Environment, Social and Governance ("ESG")

    ESG CDI Approach to Environment, Social and Governance (“ESG”) ESG Committee established to lead ESG initiatives  Cross-functional team led by CFO  CDI’s Nominating & Governance Committee provides oversight to the Committee and CDI leadership regarding CDI’s ESG strategy  Oversight of CDI’s respo

56. Slide 56: CDI Approach to Responsible Gaming

    ESG CDI Approach to Responsible Gaming CDI is committed to promoting responsible gaming at all of our properties and online, for all of our products and services Team Members Customers and Guests We provide the knowledge and skills regarding: We provide information regarding:  Importance of respons

57. Slide 57: CDI Approach to Equine and Jockey Health and Safety

    ESG CDI Approach to Equine and Jockey Health and Safety CDI is committed to protecting and furthering equine and jockey health and safety at all of our racetracks Horseracing Integrity and Safety Act (HISA)  Independent body responsible for implementing national standards for medication usage and r

58. Slide 58: CDI Approach to the Environment

    ESG CDI Approach to the Environment We have ongoing initiatives at our properties:  To lessen energy and water usage  To decrease our carbon emissions  To responsibly manage waste Examples of these initiatives include:  We are committed to installing LED lighting in all of our newly constructed

59. Slide 59: CDI Approach to Social

    ESG CDI Approach to Social CDI is investing in the communities in which we operate  CDI contributes over $5.0 million annually via grants and in-kind donations to over 750 organizations  Each year, CDI donates tickets and experiences to nonprofit fundraising auctions, resulting in > $2.5 million r

60. Slide 60: CDI Approach to Governance

    ESG CDI Approach to Governance Strong Board of Directors – nine highly qualified members that play a vital role in the direction of CDI  8 of 9 directors are independent  Fully independent Audit and Compensation committees  3 of 8 independent directors are a woman or diverse  Board includes fina

61. Slide 61: Appendix

    Appendix 61 CHURCHILL DOWNS

62. Slide 62: Management Team

    Appendix Management Team Bill Carstanjen Chief Executive Officer  Chief Executive Officer since Aug. 2014; Director since 2015  President and COO, Mar. 2011 – Aug. 2014; COO, Jan. 2009 – Mar. 2011  EVP, General Counsel & Chief Development Officer, July 2005 – Dec. 2008  Former Executive of GE 

63. Slide 63: Board of Directors

    Appendix Board of Directors Alex Rankin Chairman of the Board  Independent Chairman since 2018  Director since 2008  Chairman of the Board of Sterling G. Thompson Company, LLC  President of Upson Downs Farm, Inc.  Chairman of James Graham Brown Foundation Bill Carstanjen  CEO since 2014; Direc

64. Slide 64: Board of Directors (continued)

    Appendix Board of Directors (continued) Andréa Carter  Director since 2022  Senior Executive Vice President and Chief Human Resources Officer for Global Payments, Inc. in Atlanta  Extensive human resources executive experience with Habitat for Humanity, Ralph Lauren, Newell Rubbermaid, and The Ho

65. Slide 65: Board of Directors (continued)

    Appendix Board of Directors (continued) Daniel Harrington  Director since 1998  Chair of Compensation Committee  President and CEO of HTV Industries, Inc.  Extensive financial, accounting, and Chief Executive experience Karole Lloyd  Director since 2018  Chair of Audit Committee and serves on

66. Slide 66: CDI Racetrack Overview

    Appendix CDI Racetrack Overview Churchill Ellis Colonial Presque Isle Turfway Fair Miami Valley Oak Ocean Racetrack Downs Park Downs Downs Park Grounds Gaming Grove Downs Louisville, Henderson, New Kent, Erie, Florence, New Orleans, Lebanon, Oak Grove, Berlin, Location Kentucky Kentucky Virginia Pen

67. Slide 67: Definition of Non-GAAP Financial Measures

    Definition of Non-GAAP Financial Measures In addition to the results provided in accordance with GAAP, Churchill Downs Incorporated (the “Company”, “we”, “our”) also uses non-GAAP measures, including EBITDA (earnings before interest, taxes, depreciation and amortization) and Adjusted EBITDA. The Com

68. Slide 68: Reconciliation of Comprehensive Income to Adjusted EBITDA

    Reconciliation from GAAP to Non-GAAP Financial Measures Reconciliation of Comprehensive Income to Adjusted EBITDA 68

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