South Central Business Association

Churchill Downs Renovations

Oct 31, 2001

Churchill Downs Incorporated Board Endorses $127-Million Master Plan Renovation For Home Of The Kentucky Derby

LOUISVILLE, Ky. (Sept. 28, 2001) - The Churchill Downs Incorporated (Nasdaq: CHDN) ("CDI") board of directors yesterday approved the expenditure of $27 million on the first phase of a Master Plan for renovation and new construction at Churchill Downs and endorsed a proposed $100-million second phase of the project that would result in the most sweeping changes in a century at the home of America's greatest race, the Kentucky Derby.

Preliminary construction on Phase I of the $127 million Master Plan is scheduled to begin in December. The most significant construction in Phase I is expected to begin after the end of the track's 2002 Spring Meet. Phase I of the project will include:

Construction of 66 premium suites east of the Twin Spires, each containing seating for 25 patrons; Creation of a large club and meeting space, adjacent to the suites, that will offer a view of the downtown Louisville skyline;
Renovation of first- and second-floor Jockey Club under the century-old Twin Spires;
Renovation of the first floor of the grandstand;
Installation of new elevators and new central plant facilities.

The second phase of the Master Plan calls for a comprehensive modernization of the track's clubhouse and the installation of lights around Churchill Downs' historic one-mile main track and turf course. While the CDI board of directors endorsed the concept of the full plan, the board will review full funding for Phase II in June 2002 to ensure that business and economic conditions support additional capital investment and that adequate financing is available. The board's approval of Phase II will require an investment by state and local government.

"The approval of this Master Plan concept is one of the most significant actions in the storied history of this great track," said Thomas H. Meeker, CDI's president and chief executive officer. "The Master Plan is testament to the Company's faith in Churchill Downs and its management team - and its commitment to Kentucky racing and the Thoroughbred industry. While bold and innovative, Phase I of the plan is fiscally responsible and a sound investment for our Company. The renovation plan will allow for the restoration and modernization of key areas and the creation of premium hospitality suites while giving the Company time to further evaluate plans for extensive clubhouse renovations and revise them if needed."

"The Churchill Downs Master Plan is the result of months of work by our racetrack and corporate staff, and we believe the final product will take this legendary track into a bright future," said Alex Waldrop, president of Churchill Downs. "This plan will give Churchill Downs the facilities it needs to effectively compete with other state-of-the-art entertainment and sports attractions in our region and will attract new fans to our track and the great sport of Thoroughbred racing. Our signature races, the Kentucky Derby and Oaks, have an economic impact of approximately $217 million, and the Master Plan will help ensure that both events continue to grow and serve as a significant drivers for the regional economy."

Completion of both phases of the Master Plan would result in a gain of nearly 5,300 seats at the historic track, which currently has seating for 48,500. This year's renewal of the Kentucky Derby attracted a crowd of 153,210 - the second largest in history - and the Kentucky Oaks, held the day before the Derby, has attracted crowds in excess of 100,000 in each of the last three years. Churchill Downs has hosted the Breeders' Cup World Thoroughbred Championships a record five times and has attracted five of the six largest crowds in the history of that event. Attendance at the 2000 Breeders' Cup at Churchill Downs was 76,043, and the championship's largest attendance of 80,452 was recorded under the track's Twin Spires in 1998.

Construction on Phase I should be completed by the start of the track's 2003 Fall Meet. Phase II, pending final approval by the CDI board, would begin after the 2003 Spring Meet, and the bulk of the clubhouse modernization and construction is scheduled for completion by the opening of the Fall Meet of 2004. The entire project will be finished in time for the 2005 Kentucky Derby.

Phase II of the Master Plan renovation calls for the most significant construction at Churchill Downs since the building of its clubhouse began in 1902, a year that also marked the arrival of Col. Matt Winn, the track's future president, and the man credited with building the Kentucky Derby into its status as one of the world's great sports events. The second phase would include the rebuilding of a large section of the track's clubhouse and, under the current construction timetable for Phase II, would result in one renewal of the Kentucky Derby (2004) during which a major area of the clubhouse would be under construction. Features of Phase II of the Churchill Downs Master Plan would include:

Twelve new sixth-floor, finish-line suites, each with seating for 38 patrons;
A year-round satellite wagering facility with seating for nearly 1,700;
The installation of lights around Churchill Downs' dirt track and turf course;
A new Eclipse Room and other restaurant facilities;

A new third-floor Turf Club with indoor and outdoor seating;
The creation of new premium box seats on the track's third floor;

A new main kitchen, satellite kitchens and central receiving facilities;

A "Gold Club" section for the members of the Twin Spires Club;

A renovated Gate 10 entrance (Longfield Avenue) that includes entry to the track through an open, colonnade garden;

The creation of sports bars, lounges and other meeting and entertainment spaces;
A new Press Box and relocation of the media compound that houses network television satellite trucks and other media facilities.
The two-phase Master Plan is the latest in a series of renovations and improvements at Churchill Downs that began in 1984 when Meeker became the track's president. The first of those improvements involved approximately $25 million in renovations that culminated with the first visit by the Breeders' Cup to Churchill Downs in 1988. The most recent of those projects was the $4-million Gate 1 building, which was completed in April 2001. That two-story structure provided a new primary entrance to the track along with new corporate offices and security facilities.

Churchill Downs, the world's most legendary racetrack, has conducted Thoroughbred racing and presented America's greatest race, the Kentucky Derby, continuously since 1875. Located in Louisville, the flagship racetrack of Churchill Downs Incorporated (Nasdaq: CHDN) also operates the Louisville Sports Spectrum, an off-track betting facility. Churchill Downs will conduct the 128th running of the Kentucky Derby on May 4, 2002. The track has served as host to the Breeders' Cup World Thoroughbred Championships a record five times. The 2001 Fall Meet at Churchill Downs is scheduled for Oct. 28 through Nov. 24. Information about Churchill Downs can be found on the Internet at www.churchilldowns.com.

This news release contains forward-looking statements made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The reader is cautioned that such forward-looking statements involve risks and uncertainties that could cause our actual operating results and financial condition to differ materially. Forward-looking statements are typically identified by the use of terms such as "may," "will," "believe," "could," "intend," "might," "plan," "predict," "project," "should," "expect," "anticipate," "estimate," and similar words, 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 our expectations include: the financial performance of our racing operations; litigation surrounding the Rosemont, Ill., riverboat casino; changes in Illinois law that impact revenues of racing operations in Illinois; the economic environment; the impact of gaming competition (including lotteries and riverboat, cruise ship and land-based casinos) and other sports and entertainment options in those markets in which we operate; a substantial change in law or regulations affecting our pari-mutuel activities; a substantial change in allocation of live racing days; a decrease in riverboat admissions subsidy revenue from our Indiana operations; the impact of an additional racetrack near our Indiana operations; our continued ability to effectively compete for the country's top horses and trainers necessary to field high-quality horse racing; our continued ability to grow our share of the interstate simulcast market; the impact of interest rate fluctuations; our ability to execute our acquisition strategy and to complete or successfully operate planned expansion projects; our ability to adequately integrate acquired businesses; market reaction to our expansion projects; the loss of our totalisator companies or their inability to keep their technology current; our accountability for environmental contamination; the loss of key personnel and the volatility of our stock price.