03/14/2006 12:00AM

Hollywood sale boosts Churchill's year


Churchill Downs Inc., the owner of six racetracks in the United States, had net income of $78.9 million in 2005, or $5.92 a share, largely on the profits from selling its Hollywood Park in Southern California last summer, according to financial documents released late Tuesday.

Not including a $69.9 million gain on the sale of Hollywood, Churchill had revenue of $408.8 million during the year, up 13.1 percent from last year's revenue of $361.2 million, according to the documents. Expenses in 2005 increased 16.2 percent compared with 2004, from $294.4 million to $342.2 million. Earnings from Churchill's continuing operations were $12.8 million, compared with $9.8 million in 2004.

Churchill sold Hollywood last year for $254.6 million to a real-estate developer that intends to tear down the track in 2008 if the California legislature does not cut the racing industry into a share of Native American casino revenue or legalize slot machines at tracks. Churchill bought Hollywood in 1999 for $140 million.

During the year, Churchill virtually eliminated its long-term debt, reducing it from $242.8 million to $33.8 million, according to the company's balance sheet.

Churchill owns Churchill Downs in Louisville, Ky., Ellis Park in western Kentucky, Arlington Park outside Chicago, Hoosier Park in Indiana, Calder Race Course in Florida, and Fair Grounds in New Orleans. Fair Grounds staged an abbreviated version of its annual fall-winter meet in 2005 and 2006 at Louisiana Downs because of damage to New Orleans caused by the flooding of the city after Hurricane Katrina hit the Gulf Coast last year.

According to the financial documents, Churchill's "Louisiana operations," which include Fair Grounds and its offtrack betting parlors, were the only segment of the company that did not have positive earnings in 2005 before interest, taxes, depreciation, and amortization, a common figure used to measure financial performance. Churchill holds an insurance policy on all its tracks that covers the company in case of business losses caused by natural disasters.

In the fourth quarter, Churchill lost $3 million on revenue of $65.4 million, or 23 cents a share, compared with a loss of $3.2 million in the fourth quarter of last year on revenue of $60.4 million, or 25 cents per share, according to the financial documents. In the fourth quarter of 2005, Churchill took a $3.2 million benefit on its income taxes for the period.