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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2004

OR

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

for the transition period from ____ to ____

Commission file number 0-1469

(Exact name of registrant as specified in its charter)

Kentucky
(State or other jurisdiction of
incorporation or organization)		 61-0156015
(IRS Employer
Identification No.)

700 Central Avenue, Louisville, KY 40208
(Address of principal executive offices)
(Zip Code)

(502)-636-4400
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No____

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes X No__

The number of shares outstanding of registrant’s common stock at May 5, 2004 was 13,283,983 shares.

 
 
Page 1
 
 
CHURCHILL DOWNS INCORPORATED
INDEX TO QUARTERLY REPORT ON FORM 10-Q
For the Quarter Ended March 31, 2004

Part 1 Page
Item 1.

Financial Statements

Condensed Consolidated Balance Sheets, March 31, 2004, December 31, 2003,
and March 31, 2003		 3

Condensed Consolidated Statements of Net Earnings (Loss) for the three months ended
March 31, 2004 and 2003		 4

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2004 and 2003		 5
 
Notes to Condensed Consolidated Financial Statements		 6

Item 2.		 Management's Discussion and Analysis of Financial Condition and Results of Operations 12

Item 3.		 Quantitative and Qualitative Disclosures About Market Risks 20

Item 4.		 Controls and Procedures 20
 
Part II

Item 1.		 Legal Proceedings (Not applicable) 21 

Item 2.		 Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities 21 

Item 3.		 Defaults Upon Senior Securities (Not applicable) 21 

Item 4.		 Submission of Matters to a Vote of Security Holders (Not applicable) 21 

Item 5.		 Other Information (Not applicable) 21 

Item 6.		 Exhibits and Reports on Form 8-K 21 

Signatures		   22 

Exhibit Index		 23 
 
 
Page 2
 
 

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CHURCHILL DOWNS INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)

March 31, 2004
(unaudited)		 December 31, 2003 March 31, 2003
(unaudited)
ASSETS  
Current assets:        
     Cash and cash equivalents   $   14,924   $   18,053   $   11,713  
     Accounts receivable, net of allowance for doubtful accounts  
       of $1,119 at March 31, 2004 and $1,141 at December 31, 2003  
      and March 31, 2003   18,985   36,693   17,435  
     Deferred income taxes   4,252   3,767   2,513  
     Other current assets   16,507   4,120   16,834  
         Total current assets   54,668   62,633   48,495  
 
Other assets   16,224   15,941   10,707  
Plant and equipment, net   387,660   367,229   343,910  
Goodwill, net   52,239   52,239   52,239  
Other intangible assets, net   7,339   7,464   7,404  
    $ 518,130   $ 505,506   $ 462,755  
LIABILITIES AND SHAREHOLDERS' EQUITY  
Current liabilities:  
     Accounts payable   $   38,513   $   34,466   $   27,296  
     Accrued expenses   37,080   38,491   27,609  
     Dividends payable   -    6,625   -   
     Income taxes payable   -    1,016   -   
     Deferred revenue   31,135   18,050   28,579  
     Long-term debt, current portion   5,295   5,740   513  
         Total current liabilities   112,023   104,388   83,997  
 
Long-term debt, due after one year   136,864   121,096   127,646  
Other liabilities   12,461   11,719   12,997  
Deferred income taxes   13,323   13,327   14,822  
         Total liabilities   274,671   250,530   239,462  
 
Commitments and contingencies   -   -   -  
Shareholders' equity:  
     Preferred stock, no par value;  
         250 shares authorized; no shares issued   -   -   -  
     Common stock, no par value; 50,000 shares  
         authorized; issued: 13,284 shares March 31,  
         2004, 13,250 shares December 31, 2003, and  
         13,168 shares March 31, 2003   129,522   128,583   126,302  
     Retained earnings   115,008   126,754   97,745  
     Accumulated other comprehensive loss   (1,071 ) (361 ) (754 )
    243,459   254,976   223,293  
    $ 518,130   $ 505,506   $ 462,755  
 
The accompanying notes are an integral part of the condensed consolidated financial statements.
 
 
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CHURCHILL DOWNS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF NET EARNINGS (LOSS)
for the three months ended March 31,
(Unaudited)
(in thousands, except per share data)

2004 2003
 
Net revenues   $ 37,729   $ 35,719  (1)
Operating expenses  47,493   45,540  (1)
 
     Gross loss  (9,764 ) (9,821 )
 
Selling, general and administrative expenses  9,078   8,108  
 
     Operating loss  (18,842 ) (17,929 )
 
Other income (expense):
          Interest income  116   62  
          Interest expense  (1,384 ) (1,827 )
          Miscellaneous, net  336   470  
   (932 ) (1,295 )
 
Loss before income tax benefit  (19,774 ) (19,224 )
 
Income tax benefit  8,028   7,728  
 
Net loss  $(11,746 ) $(11,496 )
 
Basic and diluted net loss per common share  $  (0.89 ) $  (0.87 )
 
Basic and diluted weighted average shares outstanding  13,257   13,159  
 
The accompanying notes are an integral part of the condensed consolidated financial statements.

(1) The Company has restated its previously reported consolidated financial statements to reflect certain adjustments as discussed in Note 1 of the Notes to Condensed Consolidated Financial Statements in this Form 10-Q.

        

 
 
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CHURCHILL DOWNS INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
for the three months ended March 31,
(Unaudited)
(in thousands)

2004 2003
Cash flows from operating activities:      
     Net loss  $(11,746 ) $(11,496 )
     Adjustments to reconcile net earnings to 
          net cash provided by operating activities: 
     Depreciation and amortization  5,362   5,062  
     Increase (decrease) in cash resulting from 
        changes in operating assets and liabilities: 
        Accounts receivable  17,708   17,000  
        Other current assets  (12,387 ) (10,845 )
        Accounts payable  812   (1,957 )
        Accrued expenses  (2,524 ) (5,059 )
        Income taxes payable  (1,016 ) (727 )
        Deferred revenue  13,085   13,703  
        Other assets and liabilities  455   2,003  
          Net cash provided by operating activities  9,749   7,684  
 
Cash flows from investing activities:
     Additions to plant and equipment, net  (20,311 ) (8,657 )
          Net cash used in investing activities  (20,311 ) (8,657 )
 
Cash flows from financing activities:
     Borrowings on bank line of credit  83,656   51,354  
     Repayments of bank line of credit  (66,792 ) (46,423 )
     Decrease in long-term debt, net  (1,541 ) (120 )
     Change in book overdraft  (2,204 ) (3,780 )
     Proceeds from note receivable for common stock  -   65  
     Payment of dividends  (6,625 ) (6,578 )
     Common stock issued  939   259  
          Net cash provided by (used in) financing activities  7,433   (5,223 )
 
Net decrease in cash and cash equivalents  (3,129 ) (6,196 )
Cash and cash equivalents, beginning of period  18,053   17,909  
Cash and cash equivalents, end of period  $ 14,924   $ 11,713  
 
Supplemental cash flow disclosures:
    Interest payments  $   1,305   $   1,699  
    Income tax payments  $      875   $      400  
Schedule of non-cash activities:
    Plant and equipment additions included in accounts payable/accrued expenses  $ 12,565   $   1,843  
 
The accompanying notes are an integral part of the condensed consolidated financial statements.
 
 
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CHURCHILL DOWNS INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the three months ended March 31, 2004 and 2003 (Unaudited)
($ in thousands, except per share data)

1. Restatement of Previously Issued Consolidated Financial Statements
  Churchill Downs Incorporated (the “Company”) recently determined that it was classifying simulcast host fees incurred inconsistently. The Company imports simulcast horse racing from other racetracks and pays a fee for the signal (simulcast host fees incurred). The Company’s accounting policy has been to record the simulcast host fees incurred as expense. However, at certain of the Company’s racetracks, simulcast host fees incurred were netted against revenue. The consolidated financial statements have been restated to reclassify simulcast host fees incurred that were netted against revenue to operating expense for the quarter ended March 31, 2003. There is no change in gross profit, operating income or net earnings for any period as a result of this restatement.

  The effect of the restatement is as follows:
As Previously
Stated		 Adjustment As Restated
Three Months ended March 31, 2003        
 
  Net revenues  $ 33,721   1,998   $ 35,719  
  Operating expenses  43,542   1,998   45,540  
     Gross loss  $(9,821 )     $(9,821 )
 
2. Basis of Presentation
  The accompanying condensed consolidated financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America or those normally made in Churchill Downs Incorporated’s (the “Company”) annual report on Form 10-K. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Accordingly, the reader of this Form 10-Q may wish to refer to the Company’s Form 10-K for the period ended December 31, 2003 for further information. The accompanying condensed consolidated financial statements have been prepared in accordance with the registrant’s customary accounting practices and have not been audited.

  Certain prior-period financial statement amounts have been reclassified to conform to the current-period presentation. In the opinion of management, all adjustments necessary for a fair presentation of this information have been made and all such adjustments are of a normal recurring nature.

  Our revenues and earnings are significantly influenced by our racing calendar. Therefore, revenues and operating results for any interim quarter are generally not indicative of the revenues and operating results for the year and may not be comparable with results for the corresponding period of the previous year. We historically have very few live racing days during the first quarter, with a majority of our live racing occurring in the second, third and fourth quarters, including the running of the Kentucky Derby and Kentucky Oaks in the second quarter.
 
 
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CHURCHILL DOWNS INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the three months ended March 31, 2004 and 2003 (Unaudited)
($ in thousands, except per share data)

3. Stock-Based Compensation
  The Company accounts for stock-based compensation in accordance with Accounting Principles Board Opinion No. 25 “Accounting for Stock Issued to Employees”. Had the compensation cost for our stock-based compensation plans been determined consistent with Statement of Financial Accounting Standards (“SFAS”) No. 123 “Accounting for Stock-based Compensation” the Company’s net loss and net loss per common share for the three months ended March 31, 2004 and 2003 would approximate the pro forma amounts presented below:
 
Three Months Ended March 31,
2004 2003
 
Net loss   $(11,746 ) $(11,496 )
Pro forma stock-based compensation expense, net of tax benefit  (189 ) (385 )
Pro forma net loss  $(11,935 ) $(11,881 )
 
Pro forma basic and diluted net loss per common share  $  (0.90 ) $  (0.90 )
 
  The effects of applying SFAS No. 123 in this pro forma disclosure are unlikely to be representative of the effects on pro forma net earnings for future years since variables such as option grants, exercises, and stock price volatility included in the disclosures may not be indicative of future activity. We anticipate making awards in the future under stock-based compensation plans.
 
4. Long-Term Debt
 
  The following table presents our long-term debt, including current portion:
 
As of As of As of
March 31, 2004 December 31, 2003 March 31, 2003
Long-term debt, current portion:                        
  Other notes payable $    5,295   $    5,740   $       513  
 
Long-term debt, due after one year:                        
  $100 million variable rate senior notes 100,000 100,000 -
  $200 million revolving credit facility 36,864 20,000 -
  $250 million revolving credit facility - - 120,929
  Other notes payable - 1,096 6,717
    Total long-term debt $142,159 $126,836 $128,159
 
  In April 2003, the Company refinanced its $250 million revolving credit facility to meet funding needs for working capital, capital improvements and potential acquisitions. The refinancing included a new $200.0 million revolving line of credit through a bank syndicate with a five-year term and $100.0 million in variable rate senior notes with a seven-year term. Both debt facilities are collateralized by substantially all of the assets of the Company and its wholly owned subsidiaries. The interest rate on the line of credit is based upon LIBOR plus a spread of 125 to 225 basis points, determined by certain Company financial ratios. The current interest rate on the senior notes is equal to three month LIBOR plus 155 basis points. The weighted average interest rate on outstanding borrowings at March 31, 2004 was 2.35% and 2.71% for the $200.0 million revolving line of credit and senior notes, respectively. The weighted average interest rate on the $250.0 million revolving credit facility was 2.27% at March 31, 2003. These interest rates are partially hedged by the interest rate swap contracts entered into by the Company as described in Note 4. The senior notes require interest only payments during their term with principal due at maturity. Both debt facilities contain financial and other covenant requirements, including specific fixed charge and leverage ratios, as well as minimum levels of net worth. The Company repaid its previously existing revolving line of credit during the second quarter of 2003 with proceeds from the new facilities.
 
 
 
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CHURCHILL DOWNS INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the three months ended March 31, 2004 and 2003 (Unaudited)
($ in thousands, except per share data)

5. Financial Instruments
 
  In order to mitigate a portion of the market risk on variable rate debt, the Company has entered into interest rate swap contracts with major financial institutions. Under terms of these contracts the Company receives a three-month LIBOR-based variable interest rate and pays a fixed interest rate on notional amounts totaling $60.0 million. As a result of these contracts, the Company will pay a fixed interest rate of approximately 3.55% on $60.0 million of the variable rate debt described in Note 3. The interest rate received on the contracts is determined based on LIBOR at the end of each March, June, September and December, which is consistent with the variable rate determination on the underlying debt. These contracts mature in March 2008.

  The Company also had an interest rate swap, which matured in March 2003, on which the Company received a LIBOR-based variable rate and paid a fixed interest rate of 7.02% on a notional amount of $35.0 million.

  The Company has designated its interest rate swaps as cash flow hedges of anticipated interest payments under its variable rate agreements. Gains and losses on these swaps that are recorded in other comprehensive earnings (loss) will be reclassified into net earnings (loss) as interest expense in the periods in which the related variable interest is paid.
 
  Comprehensive loss consist of the following:
Three months ended March 31,
2004 2003
Net loss   $(11,746 ) $(11,496 )
Cash flow hedging (net of related tax benefit and
     of $485 in 2004 $355 in 2003)		   (710 ) (532 )
Comprehensive loss   $(12,456 ) $(12,028 )
6. Earnings Per Share
 
  The following is a reconciliation of the numerator and denominator of the loss per common share computations:
 
Three months ended March 31,
2004 2003
 
       Numerator for basic and diluted per share:   $(11,746 ) $(11,496 )
 
       Denominator for weighted average shares of
           common stock outstanding per share:		  13,257   13,159  
 
       Basic and diluted net loss per common share:  $  (0.89 ) $  (0.87 )
 
 
  Options to purchase 147 and 999 shares for the three months ended March 31, 2004 and 2003, respectively, are excluded from the computation of diluted net loss per common share since their effect is antidilutive because of net losses for the periods.
 
 
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CHURCHILL DOWNS INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the three months ended March 31, 2004 and 2003 (Unaudited)
($ in thousands, except per share data)

7. Goodwill and Other Intangible Assets
 
  The Company performs testing of goodwill and indefinite lived intangible assets in accordance with SFAS No. 142, “Goodwill and Other Intangible Assets.” The Company completed the required impairment tests of goodwill and indefinite lived intangible assets during the three months ended March 31, 2004, and no adjustment to the carrying value of goodwill was required. There has been no change to the carrying value of the Company’s net goodwill since January 1, 2002. Net goodwill at March 31, 2004 and 2003 for Kentucky Operations, Calder Race Course and CDSN was $4.8 million, $36.4 million and $11.0 million, respectively.

  The Company’s other intangible assets are comprised of the following:

As of March 31,  
2004 2003
Illinois Horse Race Equity fund   $ 3,307   $ 3,307  
Indiana racing license  2,085   2,085  
Other various intangible assets  4,133   3,790  
   9,525   9,182  
Accumulated amortization  (2,186 ) (1,778 )
   $ 7,339   $ 7,404  
 
  Amortization expense for other intangibles of approximately $125 for the three months ended March 31, 2004 and $91 for the three months ended March 31, 2003 are classified in operating expenses. Other intangible assets, which are being amortized, are recorded at approximately $4.0 million and $4.1 million at March 31, 2004 and 2003, respectively, which are net of accumulated amortization of $2.2 million and $1.8 million at March 31, 2004 and 2003, respectively.

  The Illinois Horse Race Equity fund intangible represents a future right to participate in a state provided subsidy, and has not been amortized since the Arlington Park merger.
  Future estimated aggregate amortization expense on other intangible assets for each of the five fiscal years are as follows:
 
  Estimated
Amortization Expense
2004 $472 
2005 $472 
2006 $472 
2007 $472 
2008 $437 
 
8. Segment Information
 
  The Company has determined that it currently operates in the following seven segments: (1) Kentucky Operations, including Churchill Downs racetrack and its off-track betting facility (“OTB”) and Ellis Park racetrack and its on-site simulcast facility; (2) Hollywood Park racetrack and its on-site simulcast facility; (3) Calder Race Course; (4) Arlington Park and its eight OTBs; (5) Hoosier Park racetrack and its on-site simulcast facility and the other three Indiana simulcast facilities; (6) CDSN, the simulcast product provider of the Company; and (7) other investments, including Churchill Downs Television Services and the Company’s various equity interests which are not material. Eliminations include the elimination of management fees and other intersegment transactions, primarily between CDSN and the racetracks.

  The accounting policies of the segments are the same as those described in the “Summary of Significant Accounting Policies” in the Company’s Form 10-K for the year ended December 31, 2003. The Company uses revenues and EBITDA (defined as earnings before interest, taxes, depreciation and amortization) as key
 
 
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CHURCHILL DOWNS INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the three months ended March 31, 2004 and 2003 (Unaudited)
($ in thousands, except per share data)

  performance measures of results of operations for purposes of evaluating performance internally. Furthermore, management believes that the use of these measures enables management and investors to evaluate and compare from period to period, our operating performance in a meaningful and consistent manner. Because the Company uses EBITDA as a key performance measure of financial performance, the Company is required by accounting principles generally accepted in the United States of America to provide the information in this footnote concerning EBITDA. However, these measures should not be considered as an alternative to, or more meaningful than, net income (as determined in accordance with accounting principles generally accepted in the United States of America) as a measure of our operating results or cash flows (as determined in accordance with accounting principles generally accepted in the United States of America) or as a measure of our liquidity.
  The table below presents information about reported segments for the three months ended March 31, 2004 and 2003:

Three Months Ended March 31,
2004 2004
Net revenues from external customers:      
  Kentucky Operations  $   4,733   $   4,898  
  Hollywood Park  5,099   4,969  
  Arlington Park  16,055   13,924  (1)
  Calder Race Course  1,515   1,127  (1)
  Hoosier Park  9,410   9,430  
  CDSN  879   843  
       Total racing operations  37,691   35,191  
  Other investments  38   528  
   $ 37,729   $ 35,719  
 
Intercompany net revenues: 
  Hollywood Park  $          4   $          4  
  Calder Race Course  284   248  
  Hoosier Park  7   4  
       Total racing operations  295   256  
  Other investments  145   144  
  Corporate  278   283  
  Eliminations  (718 ) (683 )
   $           -   $           -  
 
EBITDA: 
  Kentucky Operations  $(6,176 ) $(5,147 )
  Hollywood Park  (3,189 ) (2,215 )
  Arlington Park  404   (1,469 )
  Calder Race Course  (2,652 ) (2,667 )
  Hoosier Park  674   674  
  CDSN  (133 ) 219  
       Total racing operations  (11,072 ) (10,605 )
  Other investments  15   35  
  Corporate  (2,087 ) (1,827 )
   $(13,144 ) $(12,397 )
 
  (1) The Company has restated its previously reported consolidated financial statements to reflect certain adjustments as discussed in Note 1 of the Notes to Condensed Consolidated Financial Statements in this Form 10-Q.
 
 
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CHURCHILL DOWNS INCORPORATED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for the three months ended March 31, 2004 and 2003 (Unaudited)
($ in thousands, except per share data)

  Following is a reconciliation of total EBITDA to net loss:
 
Three Months Ended March 31,
    2004   2003    
Total EBITDA  $(13,144 ) $(12,397 )
Depreciation and amortization  (5,362 ) (5,062 )
Interest income (expense), net  (1,268 ) (1,765 )
Income tax benefit  8,028   7,728  
Net loss  $(11,746 ) $(11,496 )

        The table below presents total asset information about reported segments:

As of   As of   As of
March 31, 2004   December 31, 2003   March 31, 2003
Total assets:                
  Kentucky Operations   $452,406   $438,608   $400,610  
  Hollywood Park    143,747     148,379    143,559  
  Arlington Park    88,923     83,725    77,216  
  Calder Race Course    80,493     88,675    80,413  
  Hoosier Park    38,746     34,940    35,780  
  CDSN    11,018     11,018    11,018  
  Other investments    92,782     90,735    80,927  
     908,115     896,080    829,523  
  Eliminations    (389,985 )   (390,574 )  (366,768 )
    $518,130   $505,506   $462,755  
  
 
 
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
  Information set forth in this discussion and analysis contains various “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Private Securities Litigation Reform Act of 1995 ( the “Act”) provides certain “safe harbor” provisions for forward-looking statements. All forward-looking statements made in this Quarterly Report on Form 10-Q are made pursuant to the Act. The reader is cautioned that such forward-looking statements are based on information available at the time and/or management’s good faith belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Forward-looking statements speak only as of the date the statement was made. We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “should,” “will,” 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 effect of global economic conditions; the effect (including possible increases in the cost of doing business) resulting from future war and terrorist activities or political uncertainties; the economic environment; the impact of increasing insurance costs; the impact of interest rate fluctuations; the financial performance of our racing operations; 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; litigation surrounding the Rosemont, Illinois, riverboat casino; changes in Illinois law that impact revenues of racing operations in Illinois; a decrease in riverboat admissions subsidy revenue from our Indiana operations; the impact of an additional Indiana racetrack and its wagering facilities near our 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; 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; any business disruption associated with our facility renovations; 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.
 
  You should read this discussion with the financial statements included in this report and the Company’s Form 10-K for the year ended December 31, 2003, for further information.
 
  Overview
 
  We conduct pari-mutuel wagering on live Thoroughbred, Quarter Horse and Standardbred horse racing and simulcast signals of races. Additionally, we offer racing services through our other interests.

  We operate the Churchill Downs racetrack in Louisville, Kentucky, which has conducted Thoroughbred racing since 1875 and is internationally known as the home of the Kentucky Derby, and Ellis Park Race Course, Inc., a Thoroughbred racing operation in Henderson, Kentucky (collectively referred to as “Kentucky Operations”). We also own and operate Hollywood Park, a Thoroughbred racing operation in Inglewood, California; Arlington Park, a Thoroughbred racing operation in Arlington Heights, Illinois; and Calder Race Course, a Thoroughbred racing operation in Miami, Florida. Additionally, we are the majority owner and operator of Hoosier Park in Anderson, Indiana, which conducts Thoroughbred, Quarter Horse and Standardbred horse racing. We conduct simulcast wagering on horse racing at twelve simulcast wagering facilities in Kentucky, Indiana and Illinois, as well as at our six racetracks.

  The Churchill Downs Simulcast Network (“CDSN”) provides the principal oversight of our interstate and international simulcast and wagering opportunities, as well as the marketing, sales, operations and data support efforts related to the Company-owned racing content.

 
 
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  Our revenues and earnings are significantly influenced by our racing calendar. Therefore, revenues and operating results for any interim quarter are not generally indicative of the revenues and operating results for the year, and may not be comparable with results for the corresponding period of the previous year. We historically have very few live racing days during the first quarter of each year, with a majority of our live racing occurring in the second, third and fourth quarters, including the running of the Kentucky Derby and Kentucky Oaks in the second quarter.

  Our pari-mutuel revenues include commissions on pari-mutuel wagering at our racetracks and off-track betting facilities (net of state pari-mutuel taxes), plus simulcast host fees from other wagering sites and source market fees generated from contracts with our in-home wagering providers. In addition to the commissions earned on pari-mutuel wagering, we earn pari-mutuel related streams of revenues from sources that are not related to wagering. These other revenues are primarily derived from statutory racing regulations in some of the states where our facilities are located and can fluctuate materially year-to-year. Non-wagering revenues are primarily generated from admissions, sponsorships, licensing rights and broadcast fees, Indiana riverboat admissions subsidy, concessions, lease income and other sources.

  Greater than 70% of our annual revenues are generated by pari-mutuel wagering on live and simulcast racing content and in-home wagering. Live racing handle includes patron wagers on live races at our live tracks and also wagers made on imported simulcast signals during live race meets. Import simulcasting handle includes wagers on imported signals at our racetracks when the respective tracks are not conducting live race meets and at our OTBs throughout the year. Export handle includes all patron wagers made on our live racing signals sent to other tracks or OTBs. In-home wagering, or account wagering, consist of patron wagers through an advance deposit account.

  Legislative and Regulatory Changes

  The Indiana Horse Racing Commission (“IHRC”) is considering whether to prevent any Indiana betting facility from accepting wagers on thoroughbred horse races run at Kentucky racetracks, including Churchill Downs racetrack and Ellis Park, unless all Indiana betting facilities are offered the opportunity to accept wagers on such races. Pursuant to its statutory right under the Federal Interstate Horseracing Act of 1978, the Kentucky Horsemen’s Benevolent and Protective Association has withheld its consent and thereby blocked the Evansville OTB and Clarksville OTB, both owned by Indiana Downs, from accepting wagers on thoroughbred horse races run at Kentucky racetracks. To assist the IHRC in reaching a determination on the matter, the IHRC has asked the Indiana Department of Gaming Research to estimate the impact of simulcast wagering on live horse racing in Kentucky and Indiana. A report from the department is expected in the second quarter of 2004.

  In Florida, The Floridians for a Level Playing Field, a coalition of harness and dog tracks, is seeking to place a question on the ballot for the November 2004 general election that would allow Dade and Broward counties to hold a referendum on the installation of slot machines at existing pari-mutuel sites in those respective counties. The Florida Supreme Court is expected to rule on the constitutionality of this initiative during the second quarter of 2004. If ruled constitutional, the coalition will proceed with the signature gathering effort required for the issue to be placed on the November 2004 ballot. Calder Race Course has been involved in this effort on a limited basis, and is awaiting the Supreme Court’s decision before deciding on its future level of participation.

  In California, Hollywood Park is part of a coalition of racetracks and card clubs seeking to put the Gaming Revenue Act of 2004 on the November 2004 ballot. If passed, this initiative would direct the governor to re-negotiate all existing compacts with Indian tribes in California. If the tribes decline to renegotiate the existing compacts, then five racetracks, including Hollywood Park, and 11 card clubs would be allowed to operate electronic gaming devices. The coalition submitted voter signatures required to place the initiative on the ballot for the November 2004 general election. The California Secretary of State has until June 24, 2004 to validate the signatures to certify the initiative for the ballot. Two lawsuits have been filed, challenging the constitutionality of the initiative.

 
 
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  Also in California, the horse industry has proposed legislation that would generate approximately $10 Million from a .5% increase in the commission or take out rate on exotic wagers. The revenue would be used to pay the cost of workers compensation insurance for backstretch workers and to provide a starter participation bonus. Governor Schwarzenegger vetoed a similar bill in January 2004 but a new bill, AB1835, has been introduced after working with the Governor’s staff to include revisions necessary to make the bill consistent with the Governor’s global solution to the workers’ compensation crisis in California. AB1835 passed the California Senate and the California Assembly and is now being considered for signature by the Governor.

  In 1999, the state of Illinois enacted legislation that provides for pari-mutuel tax relief and related tax credits for Illinois racetracks, as well as legislation providing for subsidies to Illinois horse racing tracks from revenues generated by the relocation of a license to operate a riverboat casino gaming facility. Arlington Park’s share of subsidies from the relocation of the license under the 1999 legislation would range from $4.6 million to $8.0 million annually, based on publicly available sources. In the event Arlington Park receives such subsidies, additional shares of common stock would be issued to Duchossois Industries, Inc., to a maximum of 1.25 million shares, under our merger agreement with Arlington Park. In January 2001, the Illinois Gaming Board (“IGB”) denied a license application of Emerald Casino, Inc. to relocate the license to operate the Rosemont casino. During 2002, Emerald Casino, Inc. filed for bankruptcy and was attempting to sell its license rights subject to the approval of the IGB and the bankruptcy court. In April 2004, the IGB conducted an auction of the license and awarded that license to Isle Capri Casinos, Inc., which announced plans to locate the license to operate in Rosemont, Illinois. Both the Governor of Illinois and the Attorney General of Illinois have convened investigations of the award by the IGB. The date for final approval by the bankruptcy court and issuance of the license by the IGB is not known at this time.

  It is anticipated that several bills will be filed in the 2004 session of the Illinois legislature, which would eliminate the statutory right of Arlington Park and the other Illinois racetracks to recapture amounts from their purse accounts. Since 2000, the Illinois General Assembly has appropriated money to reimburse each racetrack’s purse account for the amounts not recaptured from horsemen through reductions in future purses. However, the appropriation was vetoed by Illinois’s governor during 2002 and the General Assembly did not make the appropriations in 2003. Illinois horsemen unsuccessfully petitioned the Illinois Racing Board (“IRB”) to prevent the tracks from recapturing purse amounts in any year where Illinois does not appropriate funds for reimbursement. Illinois horsemen filed a lawsuit against the IRB and the Illinois racetracks, including Arlington Park, challenging the recapture of purse account amounts and seeking reimbursement for the amounts recaptured, and the lawsuit was dismissed in favor of the Illinois racetracks during April 2004. Illinois horsemen have asked for an extension to appeal and the court is considering granting an extension. We have elected to continue to recapture amounts from purses due to horsemen while the litigation is pending.

  In Kentucky, an excise tax credit for racetracks passed as part of the 2002-2004 state budget. The measure resulted in a $12,000 credit against our excise tax liability for each day of live racing starting July 1, 2003 and ending June 30, 2004. During 2004 this will result in a $0.5 million credit against our excise tax liability and is earmarked for horsemen’s incentives and necessary capital improvements. A similar credit of $0.5 million was earned during the twelve months ended June 30, 2002. Due to shortfalls in the Kentucky state budget, it is not anticipated that the excise tax credit will be included in the 2004-2006 Kentucky state budget. However, the Kentucky General Assembly adjourned in April 2004 without passing a budget and the future status of the excise tax credit will not be determined until a final budget is approved.

  Critical Accounting Policies

  The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our most significant estimates relate to the valuation of property and equipment, receivables, goodwill and other intangible assets, which may be significantly affected by changes in the regulatory environment in which the company operates, and to the aggregate costs for self-insured liability and worker’s compensation claims. Our significant accounting policies are described in Note 1 to the consolidated financial statements included in Item 8 of the Company’s Form 10-K for the year ended December 31, 2003.

 
 
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  Our business can be impacted positively and negatively by legislative and regulatory changes and from alternative gaming competition. A significant negative impact from these activities could result in a significant impairment of our property and equipment and/or our goodwill and intangible assets in accordance with generally accepted accounting standards.

  For our business insurance renewals in 2003 and 2002, we assumed more risk than in the prior years, primarily through higher retentions and higher maximum losses for stop-loss insurance for certain coverages. Our March 1, 2004 business insurance renewals included substantially the same coverages and retentions as in previous years. Based on our historical loss experience, management does not anticipate that this increased risk assumption will materially impact our results of operations. Our ability to obtain insurance coverage at acceptable costs in future years under terms and conditions comparable to the current years is uncertain.

 
 
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  RESULTS OF OPERATIONS
 
  Pari-mutuel wagering information, including intercompany transactions, for our CDSN segment and five live racing segments including on-site simulcast facilities and separate OTBs, which are included in their respective segments, during the three months ended March 31, 2004 and 2003, is as follows ($ in thousands):

Kentucky
Operations		 Hollywood
Park		 Calder Race
Course		 Arlington
Park (1)		 Hoosier
Park		 CDSN
Pari-mutuel wagering:            
Ontrack Live  
    2004 handle   -   -   $1,353   -   $     337   -  
    2004 no. of days   -   -   2   -   8   -  
    2003 handle   -   -   $1,176   -   $     267   -  
    2003 no. of days   -   -   2   -   7   -  
 
Ontrack Import  
    2004 handle   -   -   $1,347   $  11,628   $     571   -  
    2004 no. of days   -   -   2   680   8   -  
    2003 handle   -   -   $1,113   $    7,452   $     638   -  
    2003 no. of days   -   -   2   540   7   -  
 
Import Simulcasting  
    2004 handle   $35,477   $71,488   -   $127,315   $29,764   -  
    2004 no. of days   145   65   -   680   325   -  
    2003 handle   $37,764   $76,253   -   $  99,430   $30,158   -  
    2003 no. of days   165   65   -   540   325   -  
    Number of OTB's   1   -   -   8   3   -  
 
Intrastate Export  
    2004 handle   -   -   $   736   -   $       59   -  
    2004 no. of days   -   -   2   -   8   -  
    2003 handle   -   -   $   686   -   $       23   -  
    2003 no. of days   -   -   2   -   7   -  
 
Interstate Export (2)  
    2004 handle   -   -   -   -   $  3,388   $12,262  
    2004 no. of days   -   -   -   -   8   2  
    2003 handle   -   -   -   -   $  1,963   $10,579  
    2003 no. of days   -   -   -   -   7   2  
   
Other Wagering  
    2004 handle   -   -   $1,080   -   -   -  
    2003 handle   -   -   $   854   -   -   -  
   
Totals  
    2004 handle   $35,477   $71,488   $4,516   $138,943   $34,119   $12,262  
    2003 handle   $37,764   $76,253   $3,829   $106,882   $33,049   $10,579  
 
 
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Kentucky
Operations 		Hollywood
Park 		Calder Race
Course (4)		 Arlington
Park (4)		 Hoosier
Park 		CDSN
Pari-mutuel revenues: (3)
  2004 Revenues
    Ontrack Live   -   -   $   270   -   $       61   -  
    Ontrack Import   -   -   249   $    2,137   36   -  
    Import Simulcasting   $  3,542   $  1,430   -   11,378   5,369   -  
    Intrastate Export   -   -   75   -   -   -  
    Interstate Export   -   -   -   -   109   $     357  
    Other Revenue   345   174   414   1,202   294   -  
    Total 2004 Revenue   $  3,887   $  1,604   $1,008   $  14,717   $  5,869   $     357  
 
  2003 Revenues  
    Ontrack Live   -   -   $   235   -   $       48   -  
    Ontrack Import   -   -   201   $    1,312   49   -  
    Import Simulcasting   $   3,789   $  1,675   -   10,001   5,447   -  
    Intrastate Export   -   -   72   -   -   -  
    Interstate Export   -   -   -   -   56   $     314  
    Other Revenue   269   -   114   $    1,293   161   -  
    Total 2003 Revenue   $  4,058   $  1,675   $   622   $  12,606   $  5,761   $     314  
 
 

(1)   Arlington Park’s eighth OTB opened during February 2004 and the seventh OTB opened during June 2003.

 
  (2)   CDSN export simulcasting includes all interstate handle activity at our live racing segments except Hoosier Park.
 
  (3)  Pari-mutuel revenues for live racing, export simulcasting and import simulcasting include commissions from wagering (net of state pari-mutuel taxes) and simulcast host fees from other wagering sites. Other revenues include source market fees from in-home wagering and other statutory racing revenues.
 
  (4)  The Company has restated its previously reported consolidated financial statements to reflect certain adjustments as discussed in Note 1 of the Notes to Condensed Consolidated Financial Statements of Item 1, Financial Statements, which is included in this Form 10-Q.
 
  Three Months Ended March 31, 2004 Compared to Three Months Ended March 31, 2003
 
  Net Revenues
 
  Net revenues during the three months ended March 31, 2004 increased $2.0 million from $35.7 million in 2003 to $37.7 million in 2004. During January and February when there is no live racing in Illinois, the Illinois Racing Commission (“IRC”) appoints a Thoroughbred racetrack as the host track in Illinois. The IRC appointed Arlington Park as the host track in Illinois for 52 days during portions of January and February 2004 compared to 30 days during January 2003. Additionally, Arlington Park pari-mutuel revenues improved over the first quarter of 2003 as a result of the 2003 Illinois horsemen’s strike. The increase at Calder Race Course was primarily attributable to increased attendance and handle during January 2004 and increased source market fees.
 
  Operating Expenses
 
  Operating expenses increased $2.0 million from $45.5 million in 2003 to $47.5 million in 2004 primarily due to temporary facilities expense at our Kentucky Operations associated with our infield hospitality tent to accommodate patrons during the Kentucky Oaks and Derby days as a result of the Churchill Downs racetrack facility renovation project, referred to as the “Master Plan.” Arlington Park purse expense increased $0.5 million consistent with increases in host track pari-mutuel revenues noted above.
 
 
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  Gross Loss
 
  Gross losses were incurred in both periods as a result of limited live racing during the first quarter. During the first quarter of 2004 there were only two days of live racing at Calder Race Course and eight days of live racing at Hoosier Park. Live racing will be held at five of our six racetracks during the second quarter.
 
  Selling, General and Administrative Expenses
 
  Selling, general and administrative (“SG&A”) expenses increased by $1.0 million from $8.1 million in 2003 to $9.1 million in 2004 primarily as a result of costs related to the California slot initiative and other costs related to development activities.
 
  Other Income and Expense
 
  Interest expense decreased $0.4 million in 2004 primarily due to a first quarter 2003 expense of $0.6 million for unamortized loan issuance cost written-off as a result of the refinancing of the credit facility in April 2003.
 
  Income Tax Provision
 
  Our income tax benefit increased slightly for the three months ended March 31, 2004, as compared to March 31, 2003, as a result of an increase in pre-tax losses and an increase in our currently estimated effective income tax rate from 40.2% in 2003 to 40.6% in 2004.
 
  Significant Changes in the Balance Sheet March 31, 2004 to December 31, 2003
 
  Accounts receivable balances decreased by $17.7 million in 2004 primarily due to the collection of 2003 race meet receivables for Calder Race Course and Hollywood Park with decreases in accounts receivables of $5.9 million and $5.3 million, respectively. Our Kentucky Operations had a decrease of $6.2 million primarily due to the collection of accounts receivables related to the 2004 Kentucky Derby and Kentucky Oaks.
 
  Other current assets increased $12.4 million primarily as a result of the estimated income tax benefit associated with the first quarter net loss.
 
  Net plant and equipment increased $20.4 million primarily as a result of capital expenditures of $19.9 million related to the Master Plan. Additional increases were due to capital spending at the other operating units offset by depreciation of $5.2 million.
 
  Dividends payable decreased $6.6 million at March 31, 2004 due to the payment of dividends in the first quarter of 2004.
 
  Deferred revenue increased $13.1 million at March 31, 2004, primarily due to the Jockey Club suite sales, corporate sponsor event tickets, season boxes, membership sales and future wagering related to the 2004 Kentucky Derby and Kentucky Oaks race days to be held in the second quarter of 2004.
 
  Long-term debt increased $15.8 million as the result of additional borrowings primarily used to meet the capital needs of our Master Plan project during the first quarter.
 
  Significant Changes in the Balance Sheet March 31, 2004 to March 31, 2003
 
  Other assets increased $5.5 million primarily due to an increase in loan costs related to the refinancing of our revolving loan facility and long-term portions of Arlington Park’s real estate tax settlement and purse recapture amounts.
 
  Net plant and equipment increased $43.8 million primarily as a result of capital expenditures of $40.4 million related to the Master Plan project. Additional increases were due to routine capital spending at our operating units offset by depreciation expense.
 

 
 
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  Accounts payable increased $11.2 million primarily due to costs related to the Master Plan project and timing of payments for purses payable related to Arlington Park being designated as the host track in Illinois.
 
  Accrued expenses increased $9.5 million primarily due to costs related to the Master Plan project.
 
  Our current portion of long-term debt increased due to the impending maturity of our Hoosier Park loan. During May 2004, the maturity on the Hoosier Park loan was extended to November 2014. The increase in total long-term debt is primarily a result of capital spending related to the Master Plan project offset by the use of current cash flows to reduce borrowings under our revolving line of credit.
 
  Liquidity and Capital Resources
 
  Cash flows provided by operations were $9.7 million and $7.7 million for the three months ended March 31, 2004 and 2003, respectively. Cash provided by operations increased slightly as compared to 2003 consistent with results from operations.
 
  Cash flows used in investing activities were $20.3 million and $8.7 million for the three months ended March 31, 2004 and 2003, respectively. During the three months ended March 31, 2004 we used $14.5 million in cash for the Master Plan project. We are planning capital expenditures of approximately $101.0 million in 2004 including $82.0 million for the Master Plan project.
 
  Cash flows provided by (used in) financing activities were $7.4 million and $(5.2) million for the three months ended March 31, 2004 and 2003, respectively, reflecting the additional spending requirements related to our Master Plan project which required us to borrow additional funds during 2004 compared to 2003.
 
  During April 2003, we refinanced our revolving loan facility to meet our needs for funding working capital, capital improvements and potential acquisitions. The refinancing included a new $200.0 million revolving line of credit through a bank syndicate with a five-year term and $100.0 million in variable rate senior notes issued by us with a seven-year term, of which $136.9 million was outstanding in total at March 31, 2004. Both debt facilities are collateralized by substantially all of our assets. The interest rate on the line of credit borrowings is based upon LIBOR plus a spread of 125 to 225 additional basis points, which is determined by certain Company financial ratios. The interest rate on the senior notes is based upon LIBOR plus 155 basis points. These notes require interest only payments during their term with principal due at maturity. Both the bank facility and the senior notes contain financial covenant requirements, including specific fixed charge, leverage ratios and maximum levels of net worth. We repaid our previously existing revolving line of credit during the second quarter of 2003 with proceeds from the new facilities. Management believes cash flows from operations and borrowings under our current financing facility will be sufficient to fund our cash requirements for the year.
 
 
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  ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

  At March 31, 2004, we had $136.9 million of total debt outstanding under our revolving credit facility and senior note facility, which bear interest at LIBOR based variable rates. We are exposed to market risk on variable rate debt due to potential adverse changes in the LIBOR rate. Assuming the outstanding balance on the debt facilities remains constant, a one-percentage point increase in the LIBOR rate would reduce annual pre-tax earnings, recorded fair value and cash flows by $1.4 million.

  In order to mitigate a portion of the market risk associated with our variable rate debt, we entered into interest rate swap contracts with major financial institutions during March 2003. Under terms of the contracts we received a LIBOR based variable interest rate and pay a fixed interest rate on notional amounts totaling $60.0 million. Assuming the March 31, 2004, notional amounts under the interest rate swap contracts remain constant, a one percentage point increase in the LIBOR rate would increase annual pre-tax earnings and cash flows by $0.6 million.

  ITEM 4.   CONTROLS AND PROCEDURES
 
  (a)   Evaluation of Disclosure Controls and Procedures
 
  Under the supervision and with the participation of our management, including our President and Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this quarterly report, and, based on their evaluation, our CEO and CFO have concluded that these controls and procedures are effective.

  (b)   Changes in Internal Control over Financial Reporting
 
  During the first quarter of 2004, the Company instituted enhanced internal controls designed to ensure consistent classification of certain revenue and expense items for financial reporting. These changes were prompted by a recent discovery of an inconsistency among the Company’s operating units that heretofore allowed inconsistent classification of these items in the Company’s consolidated statements of net earnings. The Company will amend the Form 10-K for the fiscal year ended December 31, 2003 to restate such statements to reclassify certain expenses as operating expenses rather than an offset to reported net revenues. The Company’s gross profit, operating income, net earnings or net earnings per share are not affected by this reclassification.

Except as set forth above, there have not been any changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the quarter ended March 31, 2004 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
 
 
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PART II. OTHER INFORMATION
 
ITEM 1. Legal Proceedings
 
  Not applicable
 
ITEM 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities
 
  The following table provides information with respect to shares of Common Stock repurchased by the Company during the quarter ended March 31, 2004:
 
Period Total
number of
shares
purchased		 Average
Price Paid
Per Share		 Total number of shares
purchased as part of
publicly announced
plans or programs		 Approximate dollar
value of shares that may
yet be purchased under
the plans or programs
Period 1
  1/1/04 - 1/31/04 		-   -   -   -  
Period 2
  2/1/04 - 2/29/04		 -   -   -   -  
Period 3
  3/1/04 - 3/31/04		 2,536 (1)   $39.42   -   -  
Total 2,536   $39.42   - -
 
(1)    Shares of common stock were acquired from a stock option plan participant in payment of the exercise price
    on exercised stock options.
 
ITEM 3. Defaults Upon Senior Securities
 
  Not Applicable
 
ITEM 4. Submission of Matters to a Vote of Security Holders
 
  Not Applicable
 
ITEM 5. Other Information
 
  Not Applicable
 
ITEM 6. Exhibits and Reports on Form 8-K.
 
  A. Exhibits    
 
    See exhibit index
 
  B. Reports on Form 8-K filed or furnished with the Securities and Exchange Commission
 
    (1) Churchill Downs Incorporated furnished a Current Report on Form 8-K dated February 18, 2004, under Items 7 and 12, “Financial Statements and Exhibits” and “Results of Operations and Financial Condition,” respectively, furnishing our fourth quarter 2003 earnings press release conference call transcript.
 
    (2) Churchill Downs Incorporated furnished a Current Report on Form 8-K dated February 11, 2004, under Item 12, “Results of Operations and Financial Condition,” furnishing our fourth quarter and fiscal year ended December 31, 2003 earnings release dated February 10, 2004.
 
 
 
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

  CHURCHILL DOWNS INCORPORATED
    May 10, 2003 /s/ Michael E. Miller
Thomas H. Meeker
President and Chief Executive Officer
(Principal Executive Officer)
    May 10, 2003 /s/ Thomas H. Meeker
Thomas H. Meeker
Michael E. Miller
Executive Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)
 
 
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EXHIBIT INDEX
Numbers          Description By Reference To
 
3     Amended and Restated Bylaws of Churchill Downs Incorporated Exhibit 3(b) to Report on Form 10-K for the year ended December 31, 2003
 
31(a) Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 Report on Form 10-Q for the fiscal quarter ended March 31, 2004
 
31(b) Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002        Report on Form 10-Q for the fiscal quarter ended March 31, 2004
 
32 Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished pursuant to Rule 13a - 14(b)) Report on Form 10-Q for the fiscal quarter ended March 31, 2004
 
 
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