Nasdaq:CHDN
Churchill Downs Incorporated Reports 2022 Third Quarter Results
LOUISVILLE, Ky., Oct. 26, 2022 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (Nasdaq: CHDN) (the “Company”) today reported business results for the third quarter ended September 30, 2022.
Third Quarter 2022 Highlights
- Net revenue of $383.1 million compared to $393.0 million in third quarter 2021
- Net income of $57.0 million compared to $61.4 million in third quarter 2021
- Record third quarter Adjusted EBITDA of $163.2 million compared to $156.1 million in third quarter 2021
- Completed the previously-announced purchase of Chasers Poker Room in Salem, New Hampshire (“Chasers”)
- Announced and closed on the acquisition of Ellis Park Racing & Gaming (“Ellis Park”) in Henderson, Kentucky for total consideration of $79.0 million in cash
- Announced a multi-year agreement with FanDuel to enable FanDuel to create a fully integrated and seamless wagering experience with a single wallet for horse racing and sports
| CONSOLIDATED RESULTS |
| Third Quarter | |||||
| (in millions, except per share data) | 2022 | 2021 | |||
| Net revenue | $ | 383.1 | $ | 393.0 | |
| Net income | $ | 57.0 | $ | 61.4 | |
| Diluted EPS | $ | 1.49 | $ | 1.57 | |
| Adjusted EBITDA(a) | $ | 163.2 | $ | 156.1 | |
| (a) This is a non-GAAP measure. See explanation of non-GAAP measures below. | |||||
| SEGMENT RESULTS |
During the first quarter of 2022, we updated our operating segments to include the results of our United Tote business in the TwinSpires segment. Results of our United Tote business were previously included in our All Other segment.
The summaries below present net revenue from external customers and intercompany revenue from each of our reportable segments:
Live and Historical Racing
| Third Quarter | |||||
| (in millions) | 2022 | 2021 | |||
| Net revenue | $ | 102.4 | $ | 81.5 | |
| Adjusted EBITDA | 34.5 | 27.7 | |||
For the third quarter of 2022, net revenue increased $20.9 million due primarily to a $6.5 million increase at Churchill Downs Racetrack as a result of increased handle from holding more live race days in the third quarter of 2022 as compared to the same quarter of 2021, a $6.2 million increase at Oak Grove Racing, Gaming and Hotel (“Oak Grove”), a $3.2 million increase at Turfway Park as a result of the opening of the historical racing facility on September 1, 2022, a $2.6 million increase at Newport Racing & Gaming (“Newport”), a $1.3 million increase at Derby City Gaming, and a $1.1 million increase related to the acquisitions of Chasers and Ellis Park in September 2022.
Adjusted EBITDA increased $6.8 million due to a $1.8 million increase at Churchill Downs Racetrack driven by increased race days in the third quarter of 2022 as compared to the same quarter of 2021 and a $5.0 million increase at our HRM properties driven primarily by a $3.1 million increase at Oak Grove and a $1.6 million increase at Newport.
TwinSpires
| Third Quarter | |||||
| (in millions) | 2022 | 2021 | |||
| Net revenue | $ | 107.4 | $ | 109.0 | |
| Adjusted EBITDA | 31.1 | 22.1 | |||
For the third quarter of 2022, net revenue decreased $1.6 million from the prior year quarter primarily due to a decrease of $3.4 million from Sports and Casino and a $1.8 million increase from Horse Racing. The decrease in Sports and Casino was driven by the decision to exit the direct online Sports and Casino business in the first quarter of 2022. The increase in Horse Racing net revenue was driven by increased handle from our high wagering-volume customer base.
Adjusted EBITDA increased $9.0 million primarily due to an $11.1 million increase from our Sports and Casino business due to decreased online marketing and promotional activities in the current year quarter. This increase was offset by a $1.5 million decrease from Horse Racing due to increased content expenses and a $0.6 million decrease from United Tote.
Gaming
| Third Quarter | |||||
| (in millions) | 2022 | 2021 | |||
| Net revenue | $ | 185.9 | $ | 185.6 | |
| Adjusted EBITDA | 111.6 | 110.7 | |||
For the third quarter of 2022, net revenue increased $0.3 million primarily due to increases at Fair Grounds and Ocean Downs. Fair Grounds revenue increased $5.7 million as a result of closures in the prior year quarter from Hurricane Ida that did not recur and incremental historical racing revenue from machines installed at certain off-track betting facilities. Ocean Downs net revenue increased $1.6 million as a result of strong attendance during the summer months. These increases were nearly offset by decreases at our Mississippi and Pennsylvania properties as a result of current economic conditions and competitive pressures.
Adjusted EBITDA increased $0.9 million driven by a $1.4 million increase from our equity investments partially offset by a $0.5 million decrease at our wholly-owned Gaming properties. The increase in our equity investments was driven by increased revenue at Rivers Des Plaines. The decrease from our wholly-owned Gaming properties is the result of decreased revenue and increases in marketing and salaries expense. Gaming Adjusted EBITDA includes $4.1 million in proceeds received for business interruption insurance claims related to Hurricane Ida.
All Other
For the third quarter of 2022, All Other revenue and Adjusted EBITDA decreased primarily as a result of Arlington not conducting live racing in the third quarter of 2022 as we ceased racing and simulcast operations at the end of 2021. We are excluding Arlington’s operating results from Adjusted EBITDA in 2022 pending the sale of the property to the Chicago Bears.
| ACQUISITION / DISPOSITION UPDATE |
Chasers Poker Room Acquisition:
On September 2, 2022, the Company completed its previously announced purchase of Chasers in Salem, New Hampshire. Chasers is a charitable gaming facility located approximately 30 miles from Boston, Massachusetts, that offers poker and a variety of table games. The Company plans to develop an expanded charitable gaming facility in Salem to accommodate historical racing machines and table games. As part of the acquisition, the Company made an initial payment to the sellers for rights to operate the poker room and to build a historical racing facility. Additional payments will be made once all necessary permits are obtained and the planned historical racing facility is opened. The Company expects the total investment in Salem, inclusive of the Chasers purchase price, to be approximately $150 million.
Ellis Park Acquisition:
On September 26, 2022, the Company completed the acquisition of Ellis Park in Henderson, Kentucky for total consideration of $79.0 million in cash, subject to certain working capital and other purchase price adjustments. Ellis Park is a Thoroughbred racetrack and gaming facility located north of the Ohio River and just south of Evansville, Indiana and features approximately 300 historical racing machines (“HRMs”). In acquiring Ellis Park, the Company also assumes the opportunity to construct a track extension facility with HRMs in Owensboro, Kentucky. Over the next year, the Company expects its total investment in Henderson and Daviess Counties to be approximately $75 million in addition to the purchase price.
Peninsula Pacific Entertainment LLC (“P2E”) Acquisition:
The Company has entered into a definitive purchase agreement to acquire substantially all of the assets of P2E for total consideration of $2.75 billion (the “P2E Acquisition”). The P2E Acquisition contemplates the Company acquiring the following properties: Colonial Downs Racetrack in New Kent, Virginia, six historical racing entertainment venues across Virginia, del Lago Resort & Casino in Waterloo, New York, and Hard Rock Hotel & Casino in Sioux City, Iowa (“Hard Rock Sioux City”).
The P2E Acquisition also includes other development rights including the opportunity, under Virginia law, to develop up to five additional HRM entertainment venues in Virginia with collectively up to approximately 2,300 additional HRMs. These development rights include:
- The rights to build a new HRM entertainment venue with up to 1,150 HRMs in Dumfries, Virginia with potential for expansion up to 1,800 HRMs after initial build out. The Dumfries facility will replace the existing Rosie’s Dumfries facility located in northern Virginia and the initial phase of the project is expected to open in 2023.
- The rights to develop one of the additional HRM entertainment venues with up to 150 HRMs in Emporia, Virginia. The Emporia Project will be located along I-95 near the North Carolina border and is expected to open in 2023.
The P2E Acquisition also includes the rights to P2E’s ongoing effort in partnership with Urban One, to develop ONE Casino + Resort, a $565 million destination casino in Richmond, Virginia.
The Company has obtained the acquisition of ownership interest approval for the Virginia properties from the Virginia Racing Commission and approval for Hard Rock Sioux City from the Iowa Racing and Gaming Commission. The P2E Transaction remains dependent on customary closing conditions, including the Company obtaining approval from the New York State Gaming Commission. The transaction is expected to close before the end of 2022.
| CAPITAL MANAGEMENT |
Share Repurchase Program:
The Company repurchased 288,781 shares of its common stock at an average share price of approximately $204.04 based on trade date in conjunction with its publicly announced share repurchase program at a total cost of $59.0 million in the third quarter of 2022. We had approximately $300.2 million of repurchase authority remaining under this program as of September 30, 2022.
Annual Dividend:
On October 25, 2022, the company’s Board of Directors approved an annual cash dividend on the Company’s common stock of $0.714 per outstanding share, a 7 percent increase over the prior year. The dividend is payable on January 6, 2023, to shareholders of record as of the close of business on December 2, 2022, with the aggregate cash dividend paid to each shareholder rounded to the nearest whole cent. This marks the twelfth consecutive year that the Company has increased the dividend.
| NET INCOME |
The Company’s third quarter of 2022 net income was $57.0 million compared to $61.4 million in the prior year quarter.
The following items impacted the comparability of the Company’s third quarter net income:
- $2.4 million after-tax increase in expenses related to transaction, pre-opening and other expenses, net; and
- $1.4 million after-tax reduction in the benefit related to our equity portion of the non-cash change in the fair value of Rivers Des Plaines’ interest rate swaps.
These items were partially offset by:
- $0.3 million after-tax decrease in expenses related to our equity portion of Rivers Des Plaines’ legal reserves and transaction costs.
Excluding the items above, third quarter 2022 adjusted net income decreased $0.9 million primarily due to the following:
- $11.5 million after-tax increase from the prior year quarter in interest expense associated with higher outstanding debt balances;
- Partially offset by $10.6 million after-tax increase from the prior year quarter driven by proceeds from business interruption insurance from Hurricane Ida and other nonrecurring income tax benefits.
Conference Call
A conference call regarding this news release is scheduled for Thursday, October 27, 2022, at 9 a.m. ET. Investors and other interested parties may listen to the teleconference by accessing the online, real-time webcast at http://ir.churchilldownsincorporated.com/events.cfm, or by registering in advance via teleconference here. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are instructed to dial-in 15 minutes prior to the start time. An online replay will be available at approximately noon ET on Thursday, October 27, 2022, and will continue to be available for two weeks. A copy of the Company’s news release announcing quarterly results and relevant financial and statistical information about the period will be accessible at www.churchilldownsincorporated.com.
Use of Non-GAAP Measures
In addition to the results provided in accordance with GAAP, the Company also uses non-GAAP measures, including adjusted net income, adjusted diluted EPS, EBITDA (earnings before interest, taxes, depreciation and amortization) and Adjusted EBITDA.
The Company uses non-GAAP measures as a key performance measure of the results of operations for purposes of evaluating performance internally. These measures facilitate comparison of operating performance between periods and help investors to better understand the operating results of the Company by excluding certain items that may not be indicative of the Company’s core business or operating results. The Company believes the use of these measures enables management and investors to evaluate and compare, from period to period, the Company’s operating performance in a meaningful and consistent manner. The non-GAAP measures are a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP, and should not be considered as an alternative to, or more meaningful than, net income or diluted EPS (as determined in accordance with GAAP) as a measure of our operating results.
We use Adjusted EBITDA to evaluate segment performance, develop strategy and allocate resources. We utilize the Adjusted EBITDA metric to provide a more accurate measure of our core operating results and enable management and investors to evaluate and compare from period to period our operating performance in a meaningful and consistent manner. Adjusted EBITDA should not be considered as an alternative to operating income as an indicator of performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure provided in accordance with GAAP. Our calculation of Adjusted EBITDA may be different from the calculation used by other companies and, therefore, comparability may be limited.
Adjusted net income and adjusted diluted EPS exclude discontinued operations net income or loss; net income or loss attributable to noncontrolling interest; changes in fair value for interest rate swaps related to Rivers Des Plaines; Rivers Des Plaines’ legal reserves and transaction costs; transaction expense, which includes acquisition and disposition related charges, as well as legal, accounting, and other deal-related expense; pre-opening expense; and certain other gains, charges, recoveries, and expenses.
Adjusted EBITDA includes the Company’s portion of EBITDA from our equity investments.
Adjusted EBITDA excludes:
- Transaction expense, net which includes:
- Acquisition, disposition, and land sale related charges;
- Direct online Sports and Casino business exit costs; and
- Other transaction expense, including legal, accounting, and other deal-related expense;
- Stock-based compensation expense;
- Rivers Des Plaines’ impact on our investments in unconsolidated affiliates from:
- The impact of changes in fair value of interest rate swaps; and
- Legal reserves and transaction costs;
- Asset impairments;
- Gain on Calder land sale;
- Legal reserves;
- Pre-opening expense; and
- Other charges, recoveries and expenses.
As of December 31, 2021, Arlington ceased racing and simulcast operations given the pending sale of the property to the Chicago Bears. Arlington’s operating loss in the current year quarter was treated as an adjustment to EBITDA and is included in Other expenses, net in the Reconciliation of Comprehensive Income to Adjusted EBITDA.
For segment reporting, Adjusted EBITDA includes intercompany revenue and expense totals that are eliminated in the consolidated statements of comprehensive income. Refer to the Reconciliation of Comprehensive Income to Adjusted EBITDA included herewith for additional information.
About Churchill Downs Incorporated
Churchill Downs Incorporated is an industry-leading racing, online wagering and gaming entertainment company anchored by our iconic flagship event, the Kentucky Derby. We own and operate five gaming entertainment venues with approximately 4,200 HRMs in Kentucky. We also own and operate TwinSpires, one of the largest and most profitable online wagering platforms for horse racing in the U.S. and we have eight retail sportsbooks. We are also a leader in brick-and-mortar casino gaming in eight states with approximately 11,800 slot machines and video lottery terminals and 250 table games. Additional information about Churchill Downs Incorporated can be found online at www.churchilldownsincorporated.com.
This news release contains various “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “seek,” “should,” “will,” and similar words or similar expressions (or negative versions of such words or expressions).
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, among others, that may materially affect actual results or outcomes include the following: the receipt of regulatory approvals on terms desired or anticipated, unanticipated difficulties or expenditures relating to the proposed transaction, including, without limitation, difficulties that result in the failure to realize expected synergies, efficiencies and cost savings from the proposed transaction within the expected time period (if at all) and risks in connection with Internal Revenue Code Section 1031 exchanges, our ability to obtain financing on the anticipated terms and schedule, disruptions of our or P2E’s current plans, operations and relationships with customers and suppliers caused by the announcement and pendency of the proposed transaction, the impact of the novel coronavirus (COVID-19) pandemic, including the emergence of variant strains, and related economic matters on our results of operations, financial conditions and prospects; the occurrence of extraordinary events, such as terrorist attacks, public health threats, civil unrest, and inclement weather; the effect of economic conditions on our consumers’ confidence and discretionary spending or our access to credit, including the impact of inflation; additional or increased taxes and fees; the impact of significant competition, and the expectation the competition levels will increase; changes in consumer preferences, attendance, wagering, and sponsorships; loss of key or highly skilled personnel; lack of confidence in the integrity of our core businesses or any deterioration in our reputation; risks associated with equity investments, strategic alliances and other third-party agreements; inability to respond to rapid technological changes in a timely manner; concentration and evolution of slot machine and HRM manufacturing and other technology conditions that could impose additional costs; inability to negotiate agreements with industry constituents, including horsemen and other racetracks; inability to successfully focus on market access and retail operations for our TwinSpires Sports and Casino business and effectively compete; inability to identify and / or complete, or fully realize the benefits of acquisitions, divestitures, development of new venues or the expansion of existing facilities on time, on budget, or as planned; general risks related to real estate ownership and significant expenditures, including fluctuations in market values and environmental regulations; reliance on our technology services and catastrophic events and system failures disrupting our operations; online security risk, including cyber-security breaches, or loss or misuse of our stored information as a result of a breach, including customers’ personal information, could lead to government enforcement actions or other litigation; personal injury litigation related to injuries occurring at our racetracks; compliance with the Foreign Corrupt Practices Act or applicable money-laundering regulations; payment-related risks, such as risk associated with fraudulent credit card and debit card use; work stoppages and labor issues; risks related to pending or future legal proceedings and other actions; highly regulated operations and changes in the regulatory environment could adversely affect our business; restrictions in our debt facilities limiting our flexibility to operate our business; failure to comply with the financial ratios and other covenants in our debt facilities and other indebtedness; disruption in the credit markets or changes to our credit ratings may adversely affect our business; and increase in our insurance costs, or obtain similar insurance coverage in the future, and any inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events.
We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
CHURCHILL DOWNS INCORPORATED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| (in millions, except per common share data) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Net revenue: | |||||||||||||||
| Live and Historical Racing | $ | 92.3 | $ | 79.7 | $ | 439.2 | $ | 318.8 | |||||||
| TwinSpires | 106.2 | 107.5 | 343.3 | 351.8 | |||||||||||
| Gaming | 183.4 | 185.3 | 545.0 | 523.3 | |||||||||||
| All Other | 1.2 | 20.5 | 2.2 | 38.5 | |||||||||||
| Total net revenue | 383.1 | 393.0 | 1,329.7 | 1,232.4 | |||||||||||
| Operating expense: | |||||||||||||||
| Live and Historical Racing | 80.1 | 62.3 | 269.2 | 217.3 | |||||||||||
| TwinSpires | 64.5 | 83.0 | 229.6 | 262.6 | |||||||||||
| Gaming | 133.0 | 127.7 | 387.0 | 355.0 | |||||||||||
| All Other | 2.9 | 14.3 | 8.8 | 34.8 | |||||||||||
| Selling, general and administrative expense | 38.4 | 36.1 | 112.7 | 99.7 | |||||||||||
| Asset impairments | — | — | 4.9 | 11.2 | |||||||||||
| Transaction expense, net | 1.2 | 2.0 | 7.4 | 2.1 | |||||||||||
| Total operating expense | 320.1 | 325.4 | 1,019.6 | 982.7 | |||||||||||
| Operating income | 63.0 | 67.6 | 310.1 | 249.7 | |||||||||||
| Other income (expense): | |||||||||||||||
| Interest expense, net | (36.2 | ) | (21.7 | ) | (92.6 | ) | (63.1 | ) | |||||||
| Equity in income of unconsolidated affiliates | 42.4 | 41.7 | 115.4 | 103.0 | |||||||||||
| Gain on Calder land sale | — | — | 274.6 | — | |||||||||||
| Miscellaneous, net | 4.2 | 0.1 | 4.4 | 0.3 | |||||||||||
| Total other income | 10.4 | 20.1 | 301.8 | 40.2 | |||||||||||
| Income from operations before provision for income taxes | 73.4 | 87.7 | 611.9 | 289.9 | |||||||||||
| Income tax provision | (16.4 | ) | (26.3 | ) | (173.5 | ) | (84.1 | ) | |||||||
| Net income | $ | 57.0 | $ | 61.4 | $ | 438.4 | $ | 205.8 | |||||||
| Net income per common share data: | |||||||||||||||
| Basic net income | $ | 1.51 | $ | 1.59 | $ | 11.52 | $ | 5.31 | |||||||
| Diluted net income | $ | 1.49 | $ | 1.57 | $ | 11.36 | $ | 5.23 | |||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 37.8 | 38.6 | 38.1 | 38.7 | |||||||||||
| Diluted | 38.4 | 39.2 | 38.6 | 39.3 | |||||||||||
CHURCHILL DOWNS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| (in millions) | September 30, 2022 | December 31, 2021 | |||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 110.6 | $ | 291.3 | |||
| Restricted cash | 1,582.6 | 64.3 | |||||
| Accounts receivable, net | 69.4 | 42.3 | |||||
| Income taxes receivable | — | 66.0 | |||||
| Other current assets | 43.7 | 37.6 | |||||
| Total current assets | 1,806.3 | 501.5 | |||||
| Property and equipment, net | 1,240.9 | 994.9 | |||||
| Investment in and advances to unconsolidated affiliates | 661.0 | 663.6 | |||||
| Goodwill | 375.7 | 366.8 | |||||
| Other intangible assets, net | 485.0 | 348.1 | |||||
| Other assets | 23.2 | 18.9 | |||||
| Long-term assets held for sale | 82.0 | 87.8 | |||||
| Total assets | $ | 4,674.1 | $ | 2,981.6 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 109.1 | $ | 81.6 | |||
| Accrued expenses and other current liabilities | 300.2 | 231.7 | |||||
| Income taxes payable | 60.9 | 0.9 | |||||
| Current deferred revenue | 14.5 | 47.7 | |||||
| Current maturities of long-term debt | 7.0 | 7.0 | |||||
| Dividends payable | — | 26.1 | |||||
| Total current liabilities | 491.7 | 395.0 | |||||
| Long-term debt, net of current maturities and loan origination fees | 684.4 | 668.6 | |||||
| Notes payable, net of debt issuance costs | 2,489.4 | 1,292.4 | |||||
| Non-current deferred revenue | 11.9 | 13.3 | |||||
| Deferred income taxes | 279.6 | 252.9 | |||||
| Other liabilities | 104.4 | 52.6 | |||||
| Total liabilities | 4,061.4 | 2,674.8 | |||||
| Commitments and contingencies | |||||||
| Shareholders’ equity: | |||||||
| Preferred stock | — | — | |||||
| Common stock | — | — | |||||
| Retained earnings | 613.6 | 307.7 | |||||
| Accumulated other comprehensive loss | (0.9 | ) | (0.9 | ) | |||
| Total shareholders’ equity | 612.7 | 306.8 | |||||
| Total liabilities and shareholders’ equity | $ | 4,674.1 | $ | 2,981.6 | |||
CHURCHILL DOWNS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| Nine Months Ended September 30, | |||||||
| (in millions) | 2022 | 2021 | |||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 438.4 | $ | 205.8 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 78.7 | 77.9 | |||||
| Distributions from unconsolidated affiliates | 117.9 | 77.7 | |||||
| Equity in income of unconsolidated affiliates | (115.4 | ) | (103.0 | ) | |||
| Stock-based compensation | 23.5 | 20.4 | |||||
| Deferred income taxes | 26.7 | 12.8 | |||||
| Asset impairments | 4.9 | 11.2 | |||||
| Amortization of operating lease assets | 3.9 | 4.3 | |||||
| Gain on Calder land sale | (274.6 | ) | — | ||||
| Other | 5.8 | 5.9 | |||||
| Changes in operating assets and liabilities: | |||||||
| Income taxes | 127.3 | 23.8 | |||||
| Deferred revenue | (34.6 | ) | (11.6 | ) | |||
| Other assets and liabilities | 22.0 | 65.8 | |||||
| Net cash provided by operating activities | 424.5 | 391.0 | |||||
| Cash flows from investing activities: | |||||||
| Capital maintenance expenditures | (37.1 | ) | (22.3 | ) | |||
| Capital project expenditures | (226.6 | ) | (29.8 | ) | |||
| Acquisition of businesses, net of cash acquired | (81.7 | ) | — | ||||
| Acquisition of gaming rights, net of cash acquired | (33.3 | ) | — | ||||
| Proceeds from Calder land sale | 279.0 | — | |||||
| Other | (7.3 | ) | (3.1 | ) | |||
| Net cash used in investing activities | (107.0 | ) | (55.2 | ) | |||
| Cash flows from financing activities: | |||||||
| Proceeds from borrowings under long-term debt obligations | 1,220.0 | 780.8 | |||||
| Repayments of borrowings under long-term debt obligations | (5.3 | ) | (429.2 | ) | |||
| Payment of dividends | (25.7 | ) | (24.8 | ) | |||
| Repurchase of common stock | (143.5 | ) | (242.4 | ) | |||
| Taxes paid related to net share settlement of stock awards | (13.2 | ) | (12.9 | ) | |||
| Debt issuance costs | (12.8 | ) | (6.9 | ) | |||
| Change in bank overdraft | (1.8 | ) | (13.4 | ) | |||
| Other | 2.4 | 2.3 | |||||
| Net cash provided by financing activities | 1,020.1 | 53.5 | |||||
| Cash flows from discontinued operations: | |||||||
| Operating activities of discontinued operations | — | (124.0 | ) | ||||
| Net increase in cash, cash equivalents and restricted cash | 1,337.6 | 265.3 | |||||
| Cash, cash equivalents and restricted cash, beginning of period | 355.6 | 121.0 | |||||
| Cash, cash equivalents and restricted cash, end of period | $ | 1,693.2 | $ | 386.3 | |||
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| GAAP net income | $ | 57.0 | $ | 61.4 | $ | 438.4 | $ | 205.8 | |||||||
| Adjustments, continuing operations: | |||||||||||||||
| Changes in fair value of interest rate swaps related to Rivers Des Plaines | — | (2.0 | ) | (12.6 | ) | (8.0 | ) | ||||||||
| Legal reserves and transaction costs related to Rivers Des Plaines | 0.1 | 0.6 | 0.6 | 8.6 | |||||||||||
| Other charges | — | — | 1.0 | — | |||||||||||
| Transaction, pre-opening, and other expense | 6.8 | 3.7 | 22.0 | 6.1 | |||||||||||
| Legal reserves | — | — | 3.2 | — | |||||||||||
| Asset impairments | — | — | 4.9 | 11.2 | |||||||||||
| Gain on Calder land sale | — | — | (274.6 | ) | — | ||||||||||
| Income tax impact on net income adjustments (a) | (1.8 | ) | (0.7 | ) | 75.9 | (5.2 | ) | ||||||||
| Total adjustments | 5.1 | 1.6 | (179.6 | ) | 12.7 | ||||||||||
| Adjusted net income attributable to Churchill Downs Incorporated | $ | 62.1 | $ | 63.0 | $ | 258.8 | $ | 218.5 | |||||||
| Adjusted diluted EPS | $ | 1.62 | $ | 1.61 | $ | 6.70 | $ | 5.56 | |||||||
| Weighted average shares outstanding – Diluted | 38.4 | 39.2 | 38.6 | 39.3 | |||||||||||
| (a) | The income tax impact for each adjustment is derived by applying the effective tax rate, including current and deferred income tax expense, based upon the jurisdiction and the nature of the adjustment. |
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||
| Total Handle | |||||||||||
| Churchill Downs Racetrack | $ | 115.3 | $ | 51.3 | $ | 745.3 | $ | 584.5 | |||
| TwinSpires Horse Racing(a) | 522.1 | 481.9 | 1,527.6 | 1,545.4 | |||||||
| (a) | Total handle generated by Velocity is not included in total handle from TwinSpires Horse Racing. |
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Net revenue from external customers: | |||||||||||||||
| Live and Historical Racing: | |||||||||||||||
| Churchill Downs Racetrack | $ | 6.4 | $ | 7.4 | $ | 182.6 | $ | 114.6 | |||||||
| Derby City Gaming | 41.5 | 40.2 | 128.5 | 113.0 | |||||||||||
| Oak Grove | 33.3 | 27.1 | 97.8 | 72.1 | |||||||||||
| Turfway Park | 3.1 | 0.7 | 8.6 | 5.9 | |||||||||||
| Newport | 6.9 | 4.3 | 20.6 | 13.2 | |||||||||||
| Chasers | 0.9 | — | 0.9 | — | |||||||||||
| Ellis Park | 0.2 | — | 0.2 | — | |||||||||||
| Total Live and Historical Racing | 92.3 | 79.7 | 439.2 | 318.8 | |||||||||||
| TwinSpires: | |||||||||||||||
| Horse Racing | 100.9 | 98.8 | 321.5 | 327.7 | |||||||||||
| Sports and Casino | 5.3 | 8.7 | 21.8 | 24.1 | |||||||||||
| Total TwinSpires | 106.2 | 107.5 | 343.3 | 351.8 | |||||||||||
| Gaming: | |||||||||||||||
| Fair Grounds and VSI | 28.5 | 24.8 | 107.2 | 98.2 | |||||||||||
| Presque Isle | 33.2 | 35.9 | 90.7 | 90.2 | |||||||||||
| Ocean Downs | 33.3 | 31.7 | 82.0 | 78.7 | |||||||||||
| Calder | 26.3 | 25.9 | 81.2 | 74.2 | |||||||||||
| Oxford | 31.6 | 31.8 | 87.8 | 72.1 | |||||||||||
| Riverwalk | 12.6 | 14.5 | 41.0 | 47.3 | |||||||||||
| Harlow’s | 11.9 | 13.3 | 37.0 | 43.9 | |||||||||||
| Lady Luck Nemacolin | 6.0 | 7.4 | 18.1 | 18.7 | |||||||||||
| Total Gaming | 183.4 | 185.3 | 545.0 | 523.3 | |||||||||||
| All Other | 1.2 | 20.5 | 2.2 | 38.5 | |||||||||||
| Net revenue from external customers | $ | 383.1 | $ | 393.0 | $ | 1,329.7 | $ | 1,232.4 | |||||||
| Intercompany net revenue: | |||||||||||||||
| Live and Historical Racing | $ | 10.1 | $ | 1.8 | $ | 26.3 | $ | 17.9 | |||||||
| TwinSpires | 1.2 | 1.5 | 4.0 | 4.8 | |||||||||||
| Gaming | 2.5 | 0.3 | 4.6 | 2.3 | |||||||||||
| All Other | — | 2.5 | — | 6.5 | |||||||||||
| Eliminations | (13.8 | ) | (6.1 | ) | (34.9 | ) | (31.5 | ) | |||||||
| Intercompany net revenue | $ | — | $ | — | $ | — | $ | — | |||||||
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
| Three Months Ended September 30, 2022 | |||||||||||||||||
| (in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Total | |||||||||||
| Net revenue from external customers | |||||||||||||||||
| Pari-mutuel: | |||||||||||||||||
| Live and simulcast racing | $ | 1.8 | $ | 91.0 | $ | 3.6 | $ | 96.4 | $ | — | $ | 96.4 | |||||
| Historical racing(a) | 78.7 | — | 3.5 | 82.2 | — | 82.2 | |||||||||||
| Racing event-related services | 3.0 | — | 0.1 | 3.1 | — | 3.1 | |||||||||||
| Gaming(a) | 0.9 | 5.3 | 160.6 | 166.8 | — | 166.8 | |||||||||||
| Other(a) | 7.9 | 9.9 | 15.6 | 33.4 | 1.2 | 34.6 | |||||||||||
| Total | $ | 92.3 | $ | 106.2 | $ | 183.4 | $ | 381.9 | $ | 1.2 | $ | 383.1 | |||||
| Three Months Ended September 30, 2021 | |||||||||||||||||
| (in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Total | |||||||||||
| Net revenue from external customers | |||||||||||||||||
| Pari-mutuel: | |||||||||||||||||
| Live and simulcast racing | $ | 5.4 | $ | 89.4 | $ | 4.9 | $ | 99.7 | $ | 12.6 | $ | 112.3 | |||||
| Historical racing(a) | 66.2 | — | — | 66.2 | — | 66.2 | |||||||||||
| Racing event-related services | 1.8 | — | 0.1 | 1.9 | 5.0 | 6.9 | |||||||||||
| Gaming(a) | — | 8.7 | 166.6 | 175.3 | — | 175.3 | |||||||||||
| Other(a) | 6.3 | 9.4 | 13.7 | 29.4 | 2.9 | 32.3 | |||||||||||
| Total | $ | 79.7 | $ | 107.5 | $ | 185.3 | $ | 372.5 | $ | 20.5 | $ | 393.0 | |||||
| (a) | Food and beverage, hotel, and other services furnished to customers for free as an inducement to wager or through the redemption of our customers’ loyalty points are recorded at the estimated standalone selling prices in other revenue with a corresponding offset recorded as a reduction in historical racing pari-mutuel revenue for HRMs or gaming revenue for our casino properties. These amounts were $8.4 million for the three months ended September 30, 2022 and $6.1 million for the three months ended September 30, 2021. |
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
| Nine Months Ended September 30, 2022 | |||||||||||||||||
| (in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Total | |||||||||||
| Net revenue from external customers | |||||||||||||||||
| Pari-mutuel: | |||||||||||||||||
| Live and simulcast racing | $ | 53.9 | $ | 290.9 | $ | 22.0 | $ | 366.8 | $ | — | $ | 366.8 | |||||
| Historical racing(a) | 230.7 | — | 4.8 | 235.5 | — | 235.5 | |||||||||||
| Racing event-related services | 125.4 | — | 0.7 | 126.1 | — | 126.1 | |||||||||||
| Gaming(a) | 0.9 | 21.8 | 469.6 | 492.3 | — | 492.3 | |||||||||||
| Other(a) | 28.3 | 30.6 | 47.9 | 106.8 | 2.2 | 109.0 | |||||||||||
| Total | $ | 439.2 | $ | 343.3 | $ | 545.0 | $ | 1,327.5 | $ | 2.2 | $ | 1,329.7 | |||||
| Nine Months Ended September 30, 2021 | |||||||||||||||||
| (in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Total | |||||||||||
| Net revenue from external customers | |||||||||||||||||
| Pari-mutuel: | |||||||||||||||||
| Live and simulcast racing | $ | 50.9 | $ | 300.2 | $ | 21.0 | $ | 372.1 | $ | 27.2 | $ | 399.3 | |||||
| Historical racing(a) | 184.0 | — | — | 184.0 | — | 184.0 | |||||||||||
| Racing event-related services | 65.3 | — | 1.0 | 66.3 | 6.9 | 73.2 | |||||||||||
| Gaming(a) | — | 24.1 | 469.3 | 493.4 | — | 493.4 | |||||||||||
| Other(a) | 18.6 | 27.5 | 32.0 | 78.1 | 4.4 | 82.5 | |||||||||||
| Total | $ | 318.8 | $ | 351.8 | $ | 523.3 | $ | 1,193.9 | $ | 38.5 | $ | 1,232.4 | |||||
| (a) | Food and beverage, hotel, and other services furnished to customers for free as an inducement to wager or through the redemption of our customers’ loyalty points are recorded at the estimated standalone selling prices in other revenue with a corresponding offset recorded as a reduction in historical racing pari-mutuel revenue for HRMs or gaming revenue for our casino properties. These amounts were $23.2 million for the nine months ended September 30, 2022 and $15.0 million for the nine months ended September 30, 2021. |
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
Adjusted EBITDA by segment is comprised of the following:
| Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Eliminations | Total | ||||||||||||||||||||
| Net revenue | $ | 102.4 | $ | 107.4 | $ | 185.9 | $ | 395.7 | $ | 0.1 | $ | (13.8 | ) | $ | 382.0 | ||||||||||||
| Taxes and purses | (31.6 | ) | (6.6 | ) | (70.6 | ) | (108.8 | ) | — | — | (108.8 | ) | |||||||||||||||
| Marketing and advertising | (3.6 | ) | (1.3 | ) | (4.1 | ) | (9.0 | ) | (0.2 | ) | — | (9.2 | ) | ||||||||||||||
| Salaries and benefits | (13.3 | ) | (6.3 | ) | (24.6 | ) | (44.2 | ) | 0.1 | — | (44.1 | ) | |||||||||||||||
| Content expense | (0.6 | ) | (49.3 | ) | (2.7 | ) | (52.6 | ) | — | 13.4 | (39.2 | ) | |||||||||||||||
| Selling, general and administrative expense | (3.4 | ) | (2.7 | ) | (7.1 | ) | (13.2 | ) | (13.9 | ) | 1.1 | (26.0 | ) | ||||||||||||||
| Other operating expense | (15.6 | ) | (10.1 | ) | (21.7 | ) | (47.4 | ) | (0.2 | ) | (0.7 | ) | (48.3 | ) | |||||||||||||
| Other income | 0.2 | — | 56.5 | 56.7 | 0.1 | — | 56.8 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 34.5 | $ | 31.1 | $ | 111.6 | $ | 177.2 | $ | (14.0 | ) | $ | — | $ | 163.2 | ||||||||||||
| Three Months Ended September 30, 2021 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Eliminations | Total | ||||||||||||||||||||
| Net revenue | $ | 81.5 | $ | 109.0 | $ | 185.6 | $ | 376.1 | $ | 23.0 | $ | (6.1 | ) | $ | 393.0 | ||||||||||||
| Taxes and purses | (24.6 | ) | (8.0 | ) | (71.8 | ) | (104.4 | ) | (4.9 | ) | — | (109.3 | ) | ||||||||||||||
| Marketing and advertising | (2.9 | ) | (10.6 | ) | (3.6 | ) | (17.1 | ) | (0.3 | ) | — | (17.4 | ) | ||||||||||||||
| Salaries and benefits | (10.9 | ) | (7.0 | ) | (22.5 | ) | (40.4 | ) | (3.1 | ) | — | (43.5 | ) | ||||||||||||||
| Content expense | (0.5 | ) | (47.1 | ) | (1.2 | ) | (48.8 | ) | (1.4 | ) | 5.6 | (44.6 | ) | ||||||||||||||
| Selling, general and administrative expense | (3.1 | ) | (2.6 | ) | (7.1 | ) | (12.8 | ) | (14.3 | ) | 0.4 | (26.7 | ) | ||||||||||||||
| Other operating expense | (11.8 | ) | (11.6 | ) | (19.7 | ) | (43.1 | ) | (3.5 | ) | 0.1 | (46.5 | ) | ||||||||||||||
| Other income | — | — | 51.0 | 51.0 | 0.1 | — | 51.1 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 27.7 | $ | 22.1 | $ | 110.7 | $ | 160.5 | $ | (4.4 | ) | $ | — | $ | 156.1 | ||||||||||||
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
Adjusted EBITDA by segment is comprised of the following:
| Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Eliminations | Total | ||||||||||||||||||||
| Net revenue | $ | 465.5 | $ | 347.3 | $ | 549.6 | $ | 1,362.4 | $ | 0.4 | $ | (34.9 | ) | $ | 1,327.9 | ||||||||||||
| Taxes and purses | (118.0 | ) | (21.3 | ) | (206.1 | ) | (345.4 | ) | — | — | (345.4 | ) | |||||||||||||||
| Marketing and advertising | (12.9 | ) | (11.4 | ) | (11.3 | ) | (35.6 | ) | (0.2 | ) | — | (35.8 | ) | ||||||||||||||
| Salaries and benefits | (43.1 | ) | (19.9 | ) | (72.0 | ) | (135.0 | ) | — | — | (135.0 | ) | |||||||||||||||
| Content expense | (2.2 | ) | (160.5 | ) | (6.4 | ) | (169.1 | ) | — | 33.7 | (135.4 | ) | |||||||||||||||
| Selling, general and administrative expense | (9.7 | ) | (7.9 | ) | (20.4 | ) | (38.0 | ) | (41.9 | ) | 1.1 | (78.8 | ) | ||||||||||||||
| Other operating expense | (53.6 | ) | (37.2 | ) | (63.9 | ) | (154.7 | ) | (0.4 | ) | 0.1 | (155.0 | ) | ||||||||||||||
| Other income | 0.3 | — | 140.0 | 140.3 | 0.1 | — | 140.4 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 226.3 | $ | 89.1 | $ | 309.5 | $ | 624.9 | $ | (42.0 | ) | $ | — | $ | 582.9 | ||||||||||||
| Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Eliminations | Total | ||||||||||||||||||||
| Net revenue | $ | 336.7 | $ | 356.6 | $ | 525.6 | $ | 1,218.9 | $ | 45.0 | $ | (31.5 | ) | $ | 1,232.4 | ||||||||||||
| Taxes and purses | (95.4 | ) | (22.7 | ) | (201.1 | ) | (319.2 | ) | (11.9 | ) | — | (331.1 | ) | ||||||||||||||
| Marketing and advertising | (9.9 | ) | (35.8 | ) | (7.5 | ) | (53.2 | ) | (0.4 | ) | — | (53.6 | ) | ||||||||||||||
| Salaries and benefits | (36.2 | ) | (20.0 | ) | (63.0 | ) | (119.2 | ) | (6.6 | ) | — | (125.8 | ) | ||||||||||||||
| Content expense | (1.9 | ) | (162.1 | ) | (3.5 | ) | (167.5 | ) | (4.5 | ) | 30.2 | (141.8 | ) | ||||||||||||||
| Selling, general and administrative expense | (9.2 | ) | (8.1 | ) | (19.0 | ) | (36.3 | ) | (40.3 | ) | 1.1 | (75.5 | ) | ||||||||||||||
| Other operating expense | (39.8 | ) | (38.1 | ) | (52.9 | ) | (130.8 | ) | (8.6 | ) | 0.2 | (139.2 | ) | ||||||||||||||
| Other income | 0.1 | — | 134.3 | 134.4 | 0.2 | — | 134.6 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 144.4 | $ | 69.8 | $ | 312.9 | $ | 527.1 | $ | (27.1 | ) | $ | — | $ | 500.0 | ||||||||||||
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Reconciliation of Comprehensive Income to Adjusted EBITDA: | |||||||||||||||
| Net income and comprehensive income | $ | 57.0 | $ | 61.4 | $ | 438.4 | $ | 205.8 | |||||||
| Additions: | |||||||||||||||
| Depreciation and amortization | 27.5 | 25.9 | 78.7 | 77.9 | |||||||||||
| Interest expense | 36.2 | 21.7 | 92.6 | 63.1 | |||||||||||
| Income tax provision | 16.4 | 26.3 | 173.5 | 84.1 | |||||||||||
| EBITDA | $ | 137.1 | $ | 135.3 | $ | 783.2 | $ | 430.9 | |||||||
| Adjustments to EBITDA: | |||||||||||||||
| Stock-based compensation expense | $ | 9.1 | $ | 7.8 | $ | 23.5 | $ | 20.4 | |||||||
| Legal reserves | — | — | 3.2 | — | |||||||||||
| Pre-opening expense | 4.2 | 1.7 | 8.9 | 3.8 | |||||||||||
| Other expenses, net | 1.4 | — | 5.7 | 0.2 | |||||||||||
| Asset impairments | — | — | 4.9 | 11.2 | |||||||||||
| Transaction expense, net | 1.2 | 2.0 | 7.4 | 2.1 | |||||||||||
| Other income, expense: | |||||||||||||||
| Interest, depreciation and amortization expense related to equity investments | 10.1 | 10.7 | 31.7 | 30.8 | |||||||||||
| Changes in fair value of Rivers Des Plaines’ interest rate swaps | — | (2.0 | ) | (12.6 | ) | (8.0 | ) | ||||||||
| Rivers Des Plaines’ legal reserves and transaction costs | 0.1 | 0.6 | 0.6 | 8.6 | |||||||||||
| Other charges | — | — | 1.0 | — | |||||||||||
| Gain on Calder land sale | — | — | (274.6 | ) | — | ||||||||||
| Total adjustments to EBITDA | 26.1 | 20.8 | (200.3 | ) | 69.1 | ||||||||||
| Adjusted EBITDA | $ | 163.2 | $ | 156.1 | $ | 582.9 | $ | 500.0 | |||||||
| Adjusted EBITDA by segment: | |||||||||||||||
| Live and Historical Racing | $ | 34.5 | $ | 27.7 | $ | 226.3 | $ | 144.4 | |||||||
| TwinSpires | 31.1 | 22.1 | 89.1 | 69.8 | |||||||||||
| Gaming | 111.6 | 110.7 | 309.5 | 312.9 | |||||||||||
| Total segment Adjusted EBITDA | 177.2 | 160.5 | 624.9 | 527.1 | |||||||||||
| All Other | (14.0 | ) | (4.4 | ) | (42.0 | ) | (27.1 | ) | |||||||
| Total Adjusted EBITDA | $ | 163.2 | $ | 156.1 | $ | 582.9 | $ | 500.0 | |||||||
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL JOINT VENTURE FINANCIAL STATEMENTS
(Unaudited)
Summarized financial information for our equity investments is comprised of the following:
| Summarized Income Statement | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Net revenue | $ | 221.5 | $ | 202.4 | $ | 613.3 | $ | 539.0 | |||||||
| Operating and SG&A expense | 131.5 | 115.2 | 380.4 | 310.6 | |||||||||||
| Depreciation and amortization | 5.9 | 4.4 | 17.5 | 13.1 | |||||||||||
| Total operating expense | 137.4 | 119.6 | 397.9 | 323.7 | |||||||||||
| Operating income | 84.1 | 82.8 | 215.4 | 215.3 | |||||||||||
| Interest and other expense, net | (10.6 | ) | (10.4 | ) | (13.8 | ) | (34.7 | ) | |||||||
| Net income | $ | 73.5 | $ | 72.4 | $ | 201.6 | $ | 180.6 | |||||||
| Summarized Balance Sheet | |||||||
| (in millions) | September 30, 2022 | December 31, 2021 | |||||
| Assets | |||||||
| Current assets | $ | 89.9 | $ | 96.0 | |||
| Property and equipment, net | 349.1 | 312.3 | |||||
| Other assets, net | 263.6 | 264.1 | |||||
| Total assets | $ | 702.6 | $ | 672.4 | |||
| Liabilities and Members’ Deficit | |||||||
| Current liabilities | $ | 108.6 | $ | 95.3 | |||
| Long-term debt | 826.2 | 786.9 | |||||
| Other liabilities | — | 20.6 | |||||
| Members’ deficit | (232.2 | ) | (230.4 | ) | |||
| Total liabilities and members’ deficit | $ | 702.6 | $ | 672.4 | |||
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
Planned capital projects for the Company are as follows:
| (in millions) | Project | Target Completion | Planned Spend | |
| Live and Historical Racing Segment | ||||
| Churchill Downs Racetrack | Turn 1 Experience | May 2023 | $90 | |
| Paddock / Under the Spires | May 2024 | $185 – $200 | ||
| Derby City Gaming | Expansion and Hotel | Late 2022 / Second Quarter 2023 | $80 | |
| Derby City Gaming Downtown | Property Build Out | Second Half 2023 | $90 | |
| Ellis Park / Owensboro Annex(a) | Property Improvement / Property Build Out | Fourth Quarter 2023 | $75 | |
| New Hampshire Charitable Gaming Facility(b) | Acquisition and Property Build Out | Mid 2024 | Up to $150 | |
| Oak Grove | Oak Grove Annex | TBD | TBD | |
| Gaming Segment | ||||
| Fair Grounds and VSI | HRMs in OTBs | First Quarter 2023 | $35 | |
| Queen of Terre Haute Casino Resort | Property Build Out | Early 2024 | Up to $290 | |
| (a) | Acquisition of Ellis Park closed September 26, 2022 |
| (b) | Acquisition of Chasers Poker Room closed September 2, 2022; investment is inclusive of purchase price of existing facility |
Contact: Nick Zangari
(502) 394-1157
[email protected]
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$460 Million Investment Creates a Worldclass Entertainment Destination Resort Supporting Horse Racing and Agriculture Industry in Virginia
LOUISVILLE, Ky., Nov. 07, 2024 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (“CDI” or “the Company”) (Nasdaq: CHDN) announced today the grand opening of The Rose Gaming Resort (“The Rose”) in Dumfries, Virginia. The worldclass entertainment resort includes 1,650 historical racing machines (“HRMs”), 8 bars and restaurants and a hotel with over 100 rooms and event space. The 175,000-square-foot entertainment venue has 2,500 parking spaces and 62 acres of greenspace with a 7-acre public park.
“Churchill Downs Incorporated is thrilled to deliver a destination resort that will be a major economic contributor to the Town of Dumfries and Northern Virginia,” said Bill Carstanjen, CEO of CDI. “Along with our local hiring commitments and strong family-supporting wages, we are committed to continued investment in Prince William County as we are proud to do for all of the communities in which we operate in Virginia.”
CDI invested $460 million in The Rose and has added approximately 500 permanent jobs. The development will contribute to the expansion of Thoroughbred horse racing in the Commonwealth of Virginia. As a result of the addition of the 1,650 HRMs, Colonial Downs Racetrack in New Kent Virginia will add 16 days of live racing to the 2025 racing season.
As part of a community partnership, the Company has committed $2 million to fund the design of a new community center to be built in Dumfries. Since 2021, CDI has also contributed $400,000 in cash and in-kind donations to area nonprofits through the Rosie’s Gives Back program.
About Churchill Downs Incorporated
Churchill Downs Incorporated (“CDI”) (Nasdaq: CHDN) has been creating extraordinary entertainment experiences for over 150 years, beginning with the company’s most iconic and enduring asset, the Kentucky Derby. Headquartered in Louisville, Kentucky, CDI has expanded through the development of live and historical racing entertainment venues, the growth of the TwinSpires horse racing online wagering business and the operation and development of regional casino gaming properties. www.churchilldownsincorporated.com
This news release contains various “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “seek,” “should,” “will,” “scheduled,” and similar words or similar expressions (or negative versions of such words or expressions), although some forward-looking statements are expressed differently.
Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors, that could cause actual results to differ materially from expectations include the following: the occurrence of extraordinary events, such as terrorist attacks, public health threats, civil unrest, and inclement weather, including as a result of climate change; the effect of economic conditions on our consumers’ confidence and discretionary spending or our access to credit, including the impact of inflation; additional or increased taxes and fees; the impact of any pandemics, epidemics, or outbreaks of infectious diseases, and related economic matters on our results of operations, financial conditions and prospects; lack of confidence in the integrity of our core businesses or any deterioration in our reputation; loss of key or highly skilled personnel, as well as general disruptions in the general labor market; the impact of significant competition, and the expectation that competition levels will increase; changes in consumer preferences, attendance, wagering, and sponsorships; risks associated with equity investments, strategic alliances and other third-party agreements; inability to respond to rapid technological changes in a timely manner; concentration and evolution of slot machine and historical racing machine (HRM) manufacturing and other technology conditions that could impose additional costs; failure to enter into or maintain agreements with industry constituents, including horsemen and other racetracks; inability to successfully focus on market access and retail operations for our TwinSpires sports betting business and effectively compete; online security risk, including cyber-security breaches, or loss or misuse of our stored information as a result of a breach including customers’ personal information could lead to government enforcement actions or other litigation; reliance on our technology services and catastrophic events and system failures disrupting our operations; inability to identify, complete, or fully realize the benefits of our proposed acquisitions, divestitures, development of new venues or the expansion of existing facilities on time, on budget, or as planned; difficulty in integrating recent or future acquisitions into our operations; cost overruns and other uncertainties associated with the development of new venues and the expansion of existing facilities; general risks related to real estate ownership and significant expenditures, including risks related to environmental liabilities; personal injury litigation related to injuries occurring at our racetracks; compliance with the Foreign Corrupt Practices Act or other similar laws and regulations, or applicable anti-money laundering regulations; payment-related risks, such as risk associated with fraudulent credit card or debit card use; work stoppages and labor problems; risks related to pending or future legal proceedings and other actions; highly regulated operations and changes in the regulatory environment could adversely affect our business; restrictions in our debt facilities limiting our flexibility to operate our business; failure to comply with the financial ratios and other covenants in our debt facilities and other indebtedness; increases to interest rates (due to inflation or otherwise), disruption in the credit markets or changes to our credit ratings may adversely affect our business; increase in our insurance costs, or inability to obtain similar insurance coverage in the future, and any inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events; and other factors described under the heading “Risk Factors” in our most recent Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission.
We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
| Investor Contact: Sam Ullrich | Media Contact: Tonya Abeln |
| (502) 638-3906 | (502) 386-1742 |
| [email protected] | [email protected] |
Nasdaq:CHDN
Churchill Downs Incorporated Announces New HRM Entertainment Venue in Calvert City, Kentucky
LOUISVILLE, Ky., Oct. 23, 2024 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (“CDI” or “the Company”) announced today the planned development of a $40 to $50 million historical racing machine (“HRM”) entertainment venue in Calvert City, Kentucky. CDI plans to open the new 23,000 square-foot facility with 250 HRMs, a sports bar and a sportsbook, and a simulcast center in early 2026. The new facility will serve as an extension of Oak Grove Racing, Gaming and Hotel (“Oak Grove”) and will be CDI’s eighth historical horse racing entertainment venue in the Commonwealth of Kentucky.
About Churchill Downs Incorporated
Churchill Downs Incorporated (“CDI”) (Nasdaq: CHDN) has been creating extraordinary entertainment experiences for over 150 years, beginning with the company’s most iconic and enduring asset, the Kentucky Derby. Headquartered in Louisville, Kentucky, CDI has expanded through the development of live and historical racing entertainment venues, the growth of the TwinSpires horse racing online wagering business and the operation and development of regional casino gaming properties. www.churchilldownsincorporated.com/
This news release contains various “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “seek,” “should,” “will,” “scheduled,” and similar words or similar expressions (or negative versions of such words or expressions), although some forward-looking statements are expressed differently.
Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors, that could cause actual results to differ materially from expectations include the following: the occurrence of extraordinary events, such as terrorist attacks, public health threats, civil unrest, and inclement weather, including as a result of climate change; the effect of economic conditions on our consumers’ confidence and discretionary spending or our access to credit, including the impact of inflation; additional or increased taxes and fees; the impact of any pandemics, epidemics, or outbreaks of infectious diseases, and related economic matters on our results of operations, financial conditions and prospects; lack of confidence in the integrity of our core businesses or any deterioration in our reputation; loss of key or highly skilled personnel, as well as general disruptions in the general labor market; the impact of significant competition, and the expectation that competition levels will increase; changes in consumer preferences, attendance, wagering, and sponsorships; risks associated with equity investments, strategic alliances and other third-party agreements; inability to respond to rapid technological changes in a timely manner; concentration and evolution of slot machine and historical racing machine (HRM) manufacturing and other technology conditions that could impose additional costs; failure to enter into or maintain agreements with industry constituents, including horsemen and other racetracks; inability to successfully focus on market access and retail operations for our TwinSpires sports betting business and effectively compete; online security risk, including cyber-security breaches, or loss or misuse of our stored information as a result of a breach including customers’ personal information could lead to government enforcement actions or other litigation; reliance on our technology services and catastrophic events and system failures disrupting our operations; inability to identify, complete, or fully realize the benefits of our proposed acquisitions, divestitures, development of new venues or the expansion of existing facilities on time, on budget, or as planned; difficulty in integrating recent or future acquisitions into our operations; cost overruns and other uncertainties associated with the development of new venues and the expansion of existing facilities; general risks related to real estate ownership and significant expenditures, including risks related to environmental liabilities; personal injury litigation related to injuries occurring at our racetracks; compliance with the Foreign Corrupt Practices Act or other similar laws and regulations, or applicable anti-money laundering regulations; payment-related risks, such as risk associated with fraudulent credit card or debit card use; work stoppages and labor problems; risks related to pending or future legal proceedings and other actions; highly regulated operations and changes in the regulatory environment could adversely affect our business; restrictions in our debt facilities limiting our flexibility to operate our business; failure to comply with the financial ratios and other covenants in our debt facilities and other indebtedness; increases to interest rates (due to inflation or otherwise), disruption in the credit markets or changes to our credit ratings may adversely affect our business; increase in our insurance costs, or inability to obtain similar insurance coverage in the future, and any inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events; and other factors described under the heading “Risk Factors” in our most recent Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission.
We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
| Investor Contact: Sam Ullrich | Media Contact: Tonya Abeln |
| (502) 638-3906 | (502) 386-1742 |
| [email protected] | [email protected] |
LOUISVILLE, Ky., Oct. 23, 2024 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (Nasdaq: CHDN) (the “Company”, “CDI”, “we”) today reported business results for the third quarter ended September 30, 2024.
Company Highlights
- Third quarter results:
- Record net revenue of $628.5 million compared to $572.5 million in third quarter 2023
- Record net income attributable to CDI of $65.4 million compared to $61.0 million in third quarter 2023
- Record Adjusted EBITDA of $235.3 million compared to $218.2 million in third quarter 2023
- Delivered record third quarter revenue and Adjusted EBITDA across both our Live and Historical Racing and Gaming segments and record third quarter Adjusted EBITDA in our TwinSpires segment:
- Live and Historical Racing revenue up 12% and Adjusted EBITDA up 15% compared to the third quarter of 2023
- TwinSpires revenue up 6% and Adjusted EBITDA up 25% compared to the third quarter of 2023
- Gaming revenue up 10% and Adjusted EBITDA up 1% compared to the third quarter of 2023
- We opened The Rose Gaming Resort in Dumfries, Virginia on October 23, 2024, with 1,650 historical racing machines and a 102-room hotel.
- We ended the third quarter of 2024 with net bank leverage of 4.0x and maintained our commitment to returning capital to shareholders by announcing our Board’s approval of a $0.409 per share dividend to shareholders of record as of December 6, 2024 and payable on January 3, 2025. This represents the fourteenth consecutive year of increased dividend per share.
| CONSOLIDATED RESULTS | |||||||
| Third Quarter | |||||||
| (in millions, except per share data) | 2024 | 2023 | |||||
| Net revenue | $ | 628.5 | $ | 572.5 | |||
| Net income attributable to CDI | $ | 65.4 | $ | 61.0 | |||
| Diluted EPS attributable to CDI | $ | 0.86 | $ | 0.79 | |||
| Adjusted EBITDA(a) | $ | 235.3 | $ | 218.2 | |||
| (a) This is a non-GAAP measure. See explanation of non-GAAP measures below. | |||||||
| SEGMENT RESULTS |
The summaries below present revenue from external customers and intercompany revenue from each of our reportable segments.
Live and Historical Racing
| Third Quarter | |||||||
| (in millions) | 2024 | 2023 | |||||
| Revenue | $ | 252.4 | $ | 225.5 | |||
| Adjusted EBITDA | 93.0 | 80.9 | |||||
Revenue for the third quarter of 2024 increased $26.9 million due to a $21.6 million increase attributable to growth at our Virginia properties and the opening of the Rosie’s Emporia property in September 2023, a $3.8 million increase attributable to growth at our Northern Kentucky properties, and a $1.5 million net increase at our other Live and Historical Racing properties.
Adjusted EBITDA for the third quarter of 2024 increased $12.1 million due to a $15.2 million increase attributable to growth at our Virginia properties, which includes $3.9 million related to Exacta savings, and a $3.2 million increase attributable primarily to growth at our Northern Kentucky and Southwestern Kentucky HRM properties. These increases were partially offset by a $4.1 million decrease attributable to our Louisville and Western Kentucky HRM properties, a $1.4 million decrease attributable to Churchill Downs Racetrack, and a $0.8 million decrease attributable to proceeds for business interruption insurance claims in the third quarter 2023 that did not reoccur.
TwinSpires
| Third Quarter | |||||||
| (in millions) | 2024 | 2023 | |||||
| Revenue | $ | 118.7 | $ | 112.4 | |||
| Adjusted EBITDA | 42.5 | 33.9 | |||||
Revenue for the third quarter of 2024 increased $6.3 million due to a $9.6 million increase attributable to Exacta and a $1.3 million increase attributable to our online sports betting market access agreements and our retail sports betting business. These increases were partially offset by a $4.6 million decrease primarily attributable to a decline in TwinSpires Horse Racing handle due to market access and shifts in race days at other tracks.
Adjusted EBITDA for the third quarter of 2024 increased $8.6 million due to a $7.5 million increase attributable to Exacta and a $1.1 million increase primarily attributable to our online sports betting market access agreements and our retail sports betting business.
Gaming
| Third Quarter | |||||||
| (in millions) | 2024 | 2023 | |||||
| Revenue | $ | 270.3 | $ | 244.9 | |||
| Adjusted EBITDA | 123.3 | 122.3 | |||||
Revenue for the third quarter of 2024 increased $25.4 million due to a $32.5 million increase attributable to the opening of the Terre Haute Casino Resort in April 2024 partially offset by a $7.1 million decrease primarily due to regional gaming softness and increased competition.
Adjusted EBITDA for the third quarter of 2024 increased $1.0 million due to a $12.4 million increase attributable to the opening of the Terre Haute Casino Resort in April 2024 partially offset by a $10.2 million decrease primarily due to regional gaming softness, increased competition, and higher labor and benefit expense, and a $1.2 million decrease attributable to proceeds for business interruption insurance claims in the third quarter 2023 that did not reoccur.
All Other
| Third Quarter | |||||||
| (in millions) | 2024 | 2023 | |||||
| Revenue | $ | 2.6 | $ | 0.2 | |||
| Adjusted EBITDA | (23.5 | ) | (18.9 | ) | |||
Revenue for the third quarter of 2024 reflects intercompany revenue related to the captive insurance company that was established in April 2024. All captive revenue is eliminated in consolidation.
Adjusted EBITDA for the third quarter of 2024 decreased $4.6 million driven primarily by increased corporate compensation related expenses and other corporate administrative expenses.
| CAPITAL MANAGEMENT |
Share Repurchase Program
The Company repurchased 67,139 shares of its common stock at a total cost of approximately $9.0 million based on trade date under its share repurchase program in the third quarter of 2024. We had approximately $170.9 million of repurchase authority remaining under this program on September 30, 2024.
Annual Dividend
On October 22, 2024, the Company’s Board of Directors approved an annual cash dividend on the Company’s common stock of $0.409 per outstanding share, a seven percent increase over the prior year. The dividend is payable on January 3, 2025, to shareholders of record as of the close of business on December 6, 2024, with the aggregate cash dividend paid to each shareholder rounded to the nearest whole cent. This marks the fourteenth consecutive year that the Company has increased the dividend per share.
| NET INCOME ATTRIBUTABLE TO CDI |
The Company’s third quarter 2024 net income attributable to CDI was $65.4 million compared to $61.0 million in the prior year quarter.
The following impacted the comparability of the Company’s third quarter 2024 net income to the prior year quarter:
- a $3.0 million increase in after-tax non-cash impairment costs.
This was partially offset by:
- a $1.7 million after-tax net decrease in transaction, pre-open and other expenses; and
- a $0.6 million after-tax decrease of other items.
Excluding the items above, third quarter 2024 net income increased $5.1 million primarily due to the following:
- a $10.5 million after-tax increase primarily driven by the results of our operations,
- partially offset by a $5.4 million after-tax increase in interest expense associated with higher outstanding debt balances.
Conference Call
A conference call regarding this news release is scheduled for Thursday, October 24, 2024 at 9 a.m. ET. Investors and other interested parties may listen to the teleconference by accessing the online, real-time webcast and broadcast of the call at http://ir.churchilldownsincorporated.com/events.cfm, or by registering in advance via teleconference here. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are encouraged to dial-in 15 minutes prior to the start time. An online replay will be available by noon ET on Thursday, October 24, 2024. A copy of the Company’s news release announcing quarterly results and relevant financial and statistical information about the period will be accessible at www.churchilldownsincorporated.com.
Use of Non-GAAP Measures
In addition to the results provided in accordance with GAAP, the Company also uses non-GAAP measures, including adjusted net income, adjusted diluted EPS, EBITDA (earnings before interest, taxes, depreciation and amortization), and Adjusted EBITDA.
The Company uses non-GAAP measures as a key performance measure of the results of operations for purposes of evaluating performance internally. These measures facilitate comparison of operating performance between periods and help investors to better understand the operating results of the Company by excluding certain items that may not be indicative of the Company’s core business or operating results. The Company believes the use of these measures enables management and investors to evaluate and compare, from period to period, the Company’s operating performance in a meaningful and consistent manner. The non-GAAP measures are a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP, and should not be considered as an alternative to, or more meaningful than, net income or diluted EPS (as determined in accordance with GAAP) as a measure of our operating results.
We use Adjusted EBITDA to evaluate segment performance, develop strategy, and allocate resources. We utilize the Adjusted EBITDA metric to provide a more accurate measure of our core operating results and enable management and investors to evaluate and compare from period to period our operating performance in a meaningful and consistent manner. Adjusted EBITDA should not be considered as an alternative to operating income as an indicator of performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure provided in accordance with GAAP. Our calculation of Adjusted EBITDA may be different from the calculation used by other companies and, therefore, comparability may be limited.
Adjusted net income and adjusted diluted EPS exclude discontinued operations net income or loss; net income or loss attributable to noncontrolling interest; changes in fair value for interest rate swaps related to Rivers Des Plaines; Rivers Des Plaines’ legal reserves and transaction costs; transaction expense, which includes acquisition and disposition related charges, as well as legal, accounting, and other deal-related expense; pre-opening expense; and certain other gains, charges, recoveries, and expenses.
Adjusted EBITDA includes our portion of EBITDA from our equity investments and the portion of EBITDA attributable to noncontrolling interest.
Adjusted EBITDA excludes:
- Transaction expense, net which includes:
- Acquisition, disposition, and property sale related charges;
- Other transaction expense, including legal, accounting, and other deal-related expense;
- Stock-based compensation expense;
- Asset impairments;
- Gain on property sales;
- Legal reserves;
- Pre-opening expense; and
- Other charges, recoveries, and expenses.
As of December 31, 2021, our property in Arlington Heights, Illinois (“Arlington”) ceased racing and simulcast operations and the property was sold on February 15, 2023 to the Chicago Bears. Arlington’s results and exit costs in 2023 are treated as an adjustment to EBITDA.
On June 26, 2023, the Company’s management agreement for Lady Luck in Farmington, Pennsylvania expired and was not renewed. The Company completed the sale of substantially all its assets at Lady Luck for an immaterial amount.
For segment reporting, Adjusted EBITDA includes intercompany revenue and expense totals that are eliminated in the Consolidated Statements of Comprehensive Income. See the Reconciliation of Comprehensive Income to Adjusted EBITDA included herewith for additional information.
About Churchill Downs Incorporated
Churchill Downs Incorporated (“CDI”) (Nasdaq: CHDN) has been creating extraordinary entertainment experiences for over 150 years, beginning with the company’s most iconic and enduring asset, the Kentucky Derby. Headquartered in Louisville, Kentucky, CDI has expanded through the development of live and historical racing entertainment venues, the growth of the TwinSpires horse racing online wagering business and the operation and development of regional casino gaming properties. https://www.churchilldownsincorporated.com/
This news release contains various “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “seek,” “should,” “will,” “scheduled,” and similar words or similar expressions (or negative versions of such words or expressions), although some forward-looking statements are expressed differently.
Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors, that could cause actual results to differ materially from expectations include the following: the occurrence of extraordinary events, such as terrorist attacks, public health threats, civil unrest, and inclement weather, including as a result of climate change; the effect of economic conditions on our consumers’ confidence and discretionary spending or our access to credit, including the impact of inflation; additional or increased taxes and fees; the impact of any pandemics, epidemics, or outbreaks of infectious diseases, and related economic matters on our results of operations, financial conditions and prospects; lack of confidence in the integrity of our core businesses or any deterioration in our reputation; loss of key or highly skilled personnel, as well as general disruptions in the general labor market; the impact of significant competition, and the expectation that competition levels will increase; changes in consumer preferences, attendance, wagering, and sponsorships; risks associated with equity investments, strategic alliances and other third-party agreements; inability to respond to rapid technological changes in a timely manner; concentration and evolution of slot machine and historical racing machine (HRM) manufacturing and other technology conditions that could impose additional costs; failure to enter into or maintain agreements with industry constituents, including horsemen and other racetracks; inability to successfully focus on market access and retail operations for our TwinSpires sports betting business and effectively compete; online security risk, including cyber-security breaches, or loss or misuse of our stored information as a result of a breach including customers’ personal information could lead to government enforcement actions or other litigation; reliance on our technology services and catastrophic events and system failures disrupting our operations; inability to identify, complete, or fully realize the benefits of our proposed acquisitions, divestitures, development of new venues or the expansion of existing facilities on time, on budget, or as planned; difficulty in integrating recent or future acquisitions into our operations; cost overruns and other uncertainties associated with the development of new venues and the expansion of existing facilities; general risks related to real estate ownership and significant expenditures, including risks related to environmental liabilities; personal injury litigation related to injuries occurring at our racetracks; compliance with the Foreign Corrupt Practices Act or other similar laws and regulations, or applicable anti-money laundering regulations; payment-related risks, such as risk associated with fraudulent credit card or debit card use; work stoppages and labor problems; risks related to pending or future legal proceedings and other actions; highly regulated operations and changes in the regulatory environment could adversely affect our business; restrictions in our debt facilities limiting our flexibility to operate our business; failure to comply with the financial ratios and other covenants in our debt facilities and other indebtedness; increases to interest rates (due to inflation or otherwise), disruption in the credit markets or changes to our credit ratings may adversely affect our business; increase in our insurance costs, or inability to obtain similar insurance coverage in the future, and any inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events; and other factors described under the heading “Risk Factors” in our most recent Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission.
We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
| CHURCHILL DOWNS INCORPORATED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) |
|||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| (in millions, except per common share data) | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Net revenue: | |||||||||||||||
| Live and Historical Racing | $ | 247.5 | $ | 219.5 | $ | 957.3 | $ | 818.9 | |||||||
| TwinSpires | 111.3 | 108.5 | 369.6 | 340.7 | |||||||||||
| Gaming | 269.7 | 244.3 | 783.1 | 740.2 | |||||||||||
| All Other | — | 0.2 | 0.1 | 0.7 | |||||||||||
| Total net revenue | 628.5 | 572.5 | 2,110.1 | 1,900.5 | |||||||||||
| Operating expense: | |||||||||||||||
| Live and Historical Racing | 171.3 | 158.2 | 549.9 | 505.7 | |||||||||||
| TwinSpires | 72.3 | 73.4 | 229.5 | 219.8 | |||||||||||
| Gaming | 194.8 | 175.6 | 561.7 | 528.3 | |||||||||||
| All Other | 4.5 | 1.3 | 10.2 | 12.0 | |||||||||||
| Selling, general and administrative expense | 59.8 | 50.2 | 172.0 | 150.6 | |||||||||||
| Asset impairments | 3.9 | — | 3.9 | 24.5 | |||||||||||
| Transaction expense, net | (4.0 | ) | 1.5 | 0.7 | 1.8 | ||||||||||
| Total operating expense | 502.6 | 460.2 | 1,527.9 | 1,442.7 | |||||||||||
| Operating income | 125.9 | 112.3 | 582.2 | 457.8 | |||||||||||
| Other (expense) income: | |||||||||||||||
| Interest expense, net | (73.1 | ) | (67.9 | ) | (217.0 | ) | (197.8 | ) | |||||||
| Equity in income of unconsolidated affiliates | 33.4 | 33.3 | 108.9 | 110.4 | |||||||||||
| Gain on sale of Arlington | — | — | — | 114.0 | |||||||||||
| Miscellaneous, net | (0.1 | ) | 4.1 | 8.1 | 5.5 | ||||||||||
| Total other (expense) income | (39.8 | ) | (30.5 | ) | (100.0 | ) | 32.1 | ||||||||
| Income from operations before provision for income taxes | 86.1 | 81.8 | 482.2 | 489.9 | |||||||||||
| Income tax provision | (19.9 | ) | (20.8 | ) | (125.4 | ) | (130.2 | ) | |||||||
| Net income | 66.2 | 61.0 | 356.8 | 359.7 | |||||||||||
| Net income attributable to noncontrolling interest | 0.8 | — | 1.7 | — | |||||||||||
| Net income attributable to Churchill Downs Incorporated | $ | 65.4 | $ | 61.0 | $ | 355.1 | $ | 359.7 | |||||||
| Net income attributable to Churchill Downs Incorporated per common share data: | |||||||||||||||
| Basic net income | $ | 0.87 | $ | 0.81 | $ | 4.78 | $ | 4.78 | |||||||
| Diluted net income | $ | 0.86 | $ | 0.79 | $ | 4.73 | $ | 4.69 | |||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 73.9 | 75.2 | 74.0 | 75.3 | |||||||||||
| Diluted | 74.6 | 77.1 | 74.6 | 76.7 | |||||||||||
| CHURCHILL DOWNS INCORPORATED CONSOLIDATED BALANCE SHEETS (Unaudited) |
|||||||
| (in millions) | September 30, 2024 | December 31, 2023 | |||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 152.7 | $ | 144.5 | |||
| Restricted cash | 78.7 | 77.3 | |||||
| Accounts receivable, net | 93.2 | 106.9 | |||||
| Income taxes receivable | — | 12.6 | |||||
| Other current assets | 62.8 | 59.5 | |||||
| Total current assets | 387.4 | 400.8 | |||||
| Property and equipment, net | 2,805.5 | 2,561.2 | |||||
| Investment in and advances to unconsolidated affiliates | 650.2 | 655.9 | |||||
| Goodwill | 900.2 | 899.9 | |||||
| Other intangible assets, net | 2,411.7 | 2,418.4 | |||||
| Other assets | 17.5 | 19.3 | |||||
| Total assets | $ | 7,172.5 | $ | 6,955.5 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 182.4 | $ | 158.5 | |||
| Accrued expenses and other current liabilities | 430.1 | 426.8 | |||||
| Income taxes payable | 7.1 | — | |||||
| Current deferred revenue | 26.8 | 73.2 | |||||
| Current maturities of long-term debt | 63.1 | 68.0 | |||||
| Dividends payable | 0.6 | 29.3 | |||||
| Total current liabilities | 710.1 | 755.8 | |||||
| Long-term debt, net of current maturities and loan origination fees | 1,695.7 | 1,697.1 | |||||
| Notes payable, net of debt issuance costs | 3,074.9 | 3,071.2 | |||||
| Non-current deferred revenue | 20.1 | 11.8 | |||||
| Deferred income taxes | 417.8 | 388.2 | |||||
| Other liabilities | 139.0 | 137.8 | |||||
| Total liabilities | 6,057.6 | 6,061.9 | |||||
| Commitments and contingencies | |||||||
| Redeemable noncontrolling interest | 17.9 | — | |||||
| Shareholders’ equity: | |||||||
| Preferred stock | — | — | |||||
| Common stock | 1.7 | — | |||||
| Retained earnings | 1,096.3 | 894.5 | |||||
| Accumulated other comprehensive loss | (1.0 | ) | (0.9 | ) | |||
| Total Churchill Downs Incorporated shareholders’ equity | 1,097.0 | 893.6 | |||||
| Total liabilities and shareholders’ equity | $ | 7,172.5 | $ | 6,955.5 | |||
| CHURCHILL DOWNS INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) |
|||||||
| Nine Months Ended September 30, | |||||||
| (in millions) | 2024 | 2023 | |||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 356.8 | $ | 359.7 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 145.7 | 121.8 | |||||
| Distributions from unconsolidated affiliates | 113.8 | 126.6 | |||||
| Equity in income of unconsolidated affiliates | (108.9 | ) | (110.4 | ) | |||
| Stock-based compensation | 23.2 | 24.8 | |||||
| Deferred income taxes | 29.6 | 45.3 | |||||
| Asset impairments | 3.9 | 24.5 | |||||
| Amortization of operating lease assets | 4.1 | 4.8 | |||||
| Gain on sale of Arlington | — | (114.0 | ) | ||||
| Other | 9.1 | 6.5 | |||||
| Changes in operating assets and liabilities: | |||||||
| Income taxes | 17.1 | 6.0 | |||||
| Deferred revenue | (38.1 | ) | (10.8 | ) | |||
| Other assets and liabilities | 84.8 | 14.0 | |||||
| Net cash provided by operating activities | 641.1 | 498.8 | |||||
| Cash flows from investing activities: | |||||||
| Capital maintenance expenditures | (49.8 | ) | (52.4 | ) | |||
| Capital project expenditures | (367.8 | ) | (445.7 | ) | |||
| Acquisition of businesses, net of cash acquired | — | (241.3 | ) | ||||
| Proceeds from sale of Arlington | — | 195.7 | |||||
| Other | 1.8 | (5.8 | ) | ||||
| Net cash used in investing activities | (415.8 | ) | (549.5 | ) | |||
| Cash flows from financing activities: | |||||||
| Proceeds from borrowings under long-term debt obligations | 750.4 | 1,420.8 | |||||
| Repayments of borrowings under long-term debt obligations | (757.5 | ) | (1,297.1 | ) | |||
| Payment of dividends | (28.7 | ) | (26.8 | ) | |||
| Repurchase of common stock | (158.7 | ) | (35.8 | ) | |||
| Taxes paid related to net share settlement of stock awards | (10.6 | ) | (13.2 | ) | |||
| Debt issuance costs | (2.5 | ) | (12.3 | ) | |||
| Change in bank overdraft | (7.5 | ) | 1.4 | ||||
| Other | (1.6 | ) | 1.7 | ||||
| Net cash (used in) provided by financing activities | (216.7 | ) | 38.7 | ||||
| Cash flows from discontinued operations: | |||||||
| Operating activities of discontinued operations | 1.0 | 0.5 | |||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 9.6 | (11.5 | ) | ||||
| Cash, cash equivalents and restricted cash, beginning of period | 221.8 | 204.7 | |||||
| Cash, cash equivalents and restricted cash, end of period | $ | 231.4 | $ | 193.2 | |||
| CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL INFORMATION (Unaudited) |
|||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| (in millions, except per common share data) | 2024 | 2023 | 2024 | 2023 | |||||||||||
| GAAP net income attributable to CDI | $ | 65.4 | $ | 61.0 | $ | 355.1 | $ | 359.7 | |||||||
| Adjustments, continuing operations: | |||||||||||||||
| Legal reserves and transaction costs related to Rivers Des Plaines | — | — | 0.3 | — | |||||||||||
| Other charges and recoveries, net | 0.1 | 0.9 | (6.7 | ) | — | ||||||||||
| Transaction, pre-opening, and other expense | 4.8 | 7.3 | 25.6 | 30.2 | |||||||||||
| Asset impairments | 3.9 | — | 3.9 | 24.5 | |||||||||||
| Gain on Dispositions | — | — | — | (114.0 | ) | ||||||||||
| Income tax impact on net income adjustments(a) | (2.1 | ) | (2.2 | ) | (6.3 | ) | 13.6 | ||||||||
| Total adjustments | 6.7 | 6.0 | 16.8 | (45.7 | ) | ||||||||||
| Adjusted net income attributable to CDI | $ | 72.1 | $ | 67.0 | $ | 371.9 | $ | 314.0 | |||||||
| Adjusted diluted EPS | $ | 0.97 | $ | 0.87 | $ | 4.99 | $ | 4.09 | |||||||
| Weighted average shares outstanding – Diluted | 74.6 | 77.1 | 74.6 | 76.7 | |||||||||||
| (a) | The income tax impact for each adjustment is derived by applying the effective tax rate, including current and deferred income tax expense, based upon the jurisdiction and the nature of the adjustment. |
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| (in millions) | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Total Handle | |||||||||||||||
| TwinSpires Horse Racing(a) | $ | 469.1 | $ | 507.2 | $ | 1,542.1 | $ | 1,554.1 | |||||||
| (a) | Total handle generated by Velocity is not included in total handle from TwinSpires Horse Racing. |
| CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL INFORMATION (Unaudited) |
|||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| (in millions) | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Net revenue from external customers: | |||||||||||||||
| Live and Historical Racing: | |||||||||||||||
| Churchill Downs Racetrack | $ | 11.7 | $ | 10.6 | $ | 242.8 | $ | 191.3 | |||||||
| Louisville | 50.3 | 48.9 | 157.1 | 138.2 | |||||||||||
| Northern Kentucky | 23.4 | 19.5 | 73.9 | 63.1 | |||||||||||
| Southwestern Kentucky | 39.3 | 37.6 | 118.1 | 111.7 | |||||||||||
| Western Kentucky | 9.8 | 11.6 | 22.7 | 25.8 | |||||||||||
| Virginia | 110.0 | 88.1 | 333.1 | 280.4 | |||||||||||
| New Hampshire | 3.0 | 3.2 | 9.6 | 8.4 | |||||||||||
| Total Live and Historical Racing | $ | 247.5 | $ | 219.5 | $ | 957.3 | $ | 818.9 | |||||||
| TwinSpires: | $ | 111.3 | $ | 108.5 | $ | 369.6 | $ | 340.7 | |||||||
| Gaming: | |||||||||||||||
| Florida | $ | 23.8 | $ | 24.4 | $ | 76.4 | $ | 76.5 | |||||||
| Iowa | 22.9 | 24.0 | 69.8 | 72.5 | |||||||||||
| Indiana | 32.4 | — | 66.3 | — | |||||||||||
| Louisiana | 32.0 | 32.2 | 113.4 | 110.1 | |||||||||||
| Maine | 27.7 | 30.9 | 81.3 | 88.1 | |||||||||||
| Maryland | 31.5 | 32.0 | 79.3 | 82.9 | |||||||||||
| Mississippi | 23.6 | 24.2 | 74.1 | 77.5 | |||||||||||
| New York | 46.8 | 46.2 | 138.3 | 135.3 | |||||||||||
| Pennsylvania | 29.0 | 30.4 | 84.2 | 97.3 | |||||||||||
| Total Gaming | 269.7 | 244.3 | 783.1 | 740.2 | |||||||||||
| All Other | — | 0.2 | 0.1 | 0.7 | |||||||||||
| Net revenue from external customers | $ | 628.5 | $ | 572.5 | $ | 2,110.1 | $ | 1,900.5 | |||||||
| Intercompany net revenues: | |||||||||||||||
| Live and Historical Racing | $ | 4.9 | $ | 6.0 | $ | 34.2 | $ | 30.4 | |||||||
| TwinSpires | 7.4 | 3.9 | 23.1 | 7.1 | |||||||||||
| Gaming | 0.6 | 0.6 | 4.8 | 4.2 | |||||||||||
| All Other | 2.6 | — | 4.4 | — | |||||||||||
| Eliminations | (15.5 | ) | (10.5 | ) | (66.5 | ) | (41.7 | ) | |||||||
| Intercompany net revenue | $ | — | $ | — | $ | — | $ | — | |||||||
| CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL INFORMATION (Unaudited) |
|||||||||||||||||||||||
| Three Months Ended September 30, 2024 | |||||||||||||||||||||||
| (in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Total | |||||||||||||||||
| Net revenue from external customers | |||||||||||||||||||||||
| Pari-mutuel: | |||||||||||||||||||||||
| Live and simulcast racing | $ | 15.2 | $ | 82.7 | $ | 5.0 | $ | 102.9 | $ | — | $ | 102.9 | |||||||||||
| Historical racing(a) | 205.9 | — | 9.3 | 215.2 | — | 215.2 | |||||||||||||||||
| Racing event-related services | 5.0 | — | 1.4 | 6.4 | — | 6.4 | |||||||||||||||||
| Gaming(a) | 3.1 | 4.4 | 224.3 | 231.8 | — | 231.8 | |||||||||||||||||
| Other(a) | 18.3 | 24.2 | 29.7 | 72.2 | — | 72.2 | |||||||||||||||||
| Total | $ | 247.5 | $ | 111.3 | $ | 269.7 | $ | 628.5 | $ | — | $ | 628.5 | |||||||||||
| Three Months Ended September 30, 2023 | |||||||||||||||||||||||
| (in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Total | |||||||||||||||||
| Net revenue from external customers | |||||||||||||||||||||||
| Pari-mutuel: | |||||||||||||||||||||||
| Live and simulcast racing | $ | 16.0 | $ | 86.3 | $ | 5.1 | $ | 107.4 | $ | — | $ | 107.4 | |||||||||||
| Historical racing(a) | 179.9 | — | 7.5 | 187.4 | — | 187.4 | |||||||||||||||||
| Racing event-related services | 3.3 | — | 1.4 | 4.7 | — | 4.7 | |||||||||||||||||
| Gaming(a) | 3.1 | 5.3 | 203.0 | 211.4 | — | 211.4 | |||||||||||||||||
| Other(a) | 17.2 | 16.9 | 27.3 | 61.4 | 0.2 | 61.6 | |||||||||||||||||
| Total | $ | 219.5 | $ | 108.5 | $ | 244.3 | $ | 572.3 | $ | 0.2 | $ | 572.5 | |||||||||||
| (a) | Food and beverage, hotel, and other services furnished to customers for free as an inducement to wager or through the redemption of our customers’ loyalty points are recorded at the estimated standalone selling prices in Other revenue with a corresponding offset recorded as a reduction in historical racing pari-mutuel revenue for HRMs or gaming revenue for our casino properties. These amounts were $14.2 million for the three months ended September 30, 2024 and $13.3 million for the three months September 30, 2023. |
| Nine Months Ended September 30, 2024 | |||||||||||||||||||||||
| (in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Total | |||||||||||||||||
| Net revenue from external customers | |||||||||||||||||||||||
| Pari-mutuel: | |||||||||||||||||||||||
| Live and simulcast racing | $ | 76.6 | $ | 277.9 | $ | 20.1 | $ | 374.6 | $ | — | $ | 374.6 | |||||||||||
| Historical racing(a) | 630.1 | — | 27.4 | 657.5 | — | 657.5 | |||||||||||||||||
| Racing event-related services | 182.1 | — | 5.0 | 187.1 | — | 187.1 | |||||||||||||||||
| Gaming(a) | 9.5 | 14.4 | 645.5 | 669.4 | — | 669.4 | |||||||||||||||||
| Other(a) | 59.0 | 77.3 | 85.1 | 221.4 | 0.1 | 221.5 | |||||||||||||||||
| Total | $ | 957.3 | $ | 369.6 | $ | 783.1 | $ | 2,110.0 | $ | 0.1 | $ | 2,110.1 | |||||||||||
| Nine Months Ended September 30, 2023 | |||||||||||||||||||||||
| (in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Total | |||||||||||||||||
| Net revenue from external customers | |||||||||||||||||||||||
| Pari-mutuel: | |||||||||||||||||||||||
| Live and simulcast racing | $ | 67.2 | $ | 283.2 | $ | 19.9 | $ | 370.3 | $ | — | $ | 370.3 | |||||||||||
| Historical racing(a) | 549.3 | — | 20.5 | 569.8 | — | 569.8 | |||||||||||||||||
| Racing event-related services | 141.0 | — | 4.8 | 145.8 | — | 145.8 | |||||||||||||||||
| Gaming(a) | 8.2 | 10.9 | 615.4 | 634.5 | — | 634.5 | |||||||||||||||||
| Other(a) | 53.2 | 46.6 | 79.6 | 179.4 | 0.7 | 180.1 | |||||||||||||||||
| Total | $ | 818.9 | $ | 340.7 | $ | 740.2 | $ | 1,899.8 | $ | 0.7 | $ | 1,900.5 | |||||||||||
| (a) | Food and beverage, hotel, and other services furnished to customers for free as an inducement to wager or through the redemption of our customers’ loyalty points are recorded at the estimated standalone selling prices in Other revenue with a corresponding offset recorded as a reduction in historical racing pari-mutuel revenue for HRMs or gaming revenue for our casino properties. These amounts were $41.7 million for the nine months ended September 30, 2024 and $37.8 million for the nine months ended September 30, 2023. |
| CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL INFORMATION (Unaudited) |
|||||||||||||||||||||||||||
| Adjusted EBITDA by segment is comprised of the following: | |||||||||||||||||||||||||||
| Three Months Ended September 30, 2024 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing |
TwinSpires | Gaming | Total Segments |
All Other | Eliminations | Total | ||||||||||||||||||||
| Revenues | $ | 252.4 | $ | 118.7 | $ | 270.3 | $ | 641.4 | $ | 2.6 | $ | (15.5 | ) | $ | 628.5 | ||||||||||||
| Gaming taxes and purses | (66.7 | ) | (5.5 | ) | (87.8 | ) | (160.0 | ) | — | — | (160.0 | ) | |||||||||||||||
| Marketing and advertising | (9.3 | ) | (1.4 | ) | (9.5 | ) | (20.2 | ) | — | — | (20.2 | ) | |||||||||||||||
| Salaries and benefits | (31.1 | ) | (8.0 | ) | (42.7 | ) | (81.8 | ) | — | — | (81.8 | ) | |||||||||||||||
| Content expense | (1.7 | ) | (45.9 | ) | (2.3 | ) | (49.9 | ) | — | 6.5 | (43.4 | ) | |||||||||||||||
| Selling, general and administrative expense | (9.4 | ) | (4.2 | ) | (11.9 | ) | (25.5 | ) | (23.1 | ) | 0.2 | (48.4 | ) | ||||||||||||||
| Maintenance, insurance and utilities | (12.8 | ) | (1.1 | ) | (11.7 | ) | (25.6 | ) | (2.6 | ) | 2.6 | (25.6 | ) | ||||||||||||||
| Property and other taxes | (1.9 | ) | (0.1 | ) | (4.0 | ) | (6.0 | ) | (0.3 | ) | — | (6.3 | ) | ||||||||||||||
| Other operating expense | (26.6 | ) | (10.0 | ) | (21.1 | ) | (57.7 | ) | — | 6.2 | (51.5 | ) | |||||||||||||||
| Other income | 0.1 | — | 44.0 | 44.1 | (0.1 | ) | — | 44.0 | |||||||||||||||||||
| Adjusted EBITDA | $ | 93.0 | $ | 42.5 | $ | 123.3 | $ | 258.8 | $ | (23.5 | ) | $ | — | $ | 235.3 | ||||||||||||
| Three Months Ended September 30, 2023 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing |
TwinSpires | Gaming | Total Segments |
All Other | Eliminations | Total | ||||||||||||||||||||
| Revenues | $ | 225.5 | $ | 112.4 | $ | 244.9 | $ | 582.8 | $ | 0.2 | $ | (10.5 | ) | $ | 572.5 | ||||||||||||
| Gaming taxes and purses | (62.0 | ) | (5.8 | ) | (81.4 | ) | (149.2 | ) | — | — | (149.2 | ) | |||||||||||||||
| Marketing and advertising | (7.6 | ) | (1.3 | ) | (8.9 | ) | (17.8 | ) | (0.1 | ) | — | (17.9 | ) | ||||||||||||||
| Salaries and benefits | (27.9 | ) | (7.0 | ) | (35.2 | ) | (70.1 | ) | — | — | (70.1 | ) | |||||||||||||||
| Content expense | (1.6 | ) | (49.4 | ) | (2.4 | ) | (53.4 | ) | — | 7.3 | (46.1 | ) | |||||||||||||||
| Selling, general and administrative expense | (7.4 | ) | (3.0 | ) | (9.9 | ) | (20.3 | ) | (19.0 | ) | 0.4 | (38.9 | ) | ||||||||||||||
| Maintenance, insurance and utilities | (12.5 | ) | (0.9 | ) | (10.3 | ) | (23.7 | ) | — | — | (23.7 | ) | |||||||||||||||
| Property and other taxes | (1.7 | ) | (0.2 | ) | (3.6 | ) | (5.5 | ) | — | — | (5.5 | ) | |||||||||||||||
| Other operating expense | (24.8 | ) | (10.9 | ) | (18.2 | ) | (53.9 | ) | — | 2.8 | (51.1 | ) | |||||||||||||||
| Other income | 0.9 | — | 47.3 | 48.2 | — | — | 48.2 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 80.9 | $ | 33.9 | $ | 122.3 | $ | 237.1 | $ | (18.9 | ) | $ | — | $ | 218.2 | ||||||||||||
| Nine Months Ended September 30, 2024 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing |
TwinSpires | Gaming | Total Segments |
All Other | Eliminations | Total | ||||||||||||||||||||
| Revenues | $ | 991.5 | $ | 392.7 | $ | 787.9 | $ | 2,172.1 | $ | 4.5 | $ | (66.5 | ) | $ | 2,110.1 | ||||||||||||
| Gaming taxes and purses | (231.7 | ) | (17.7 | ) | (251.8 | ) | (501.2 | ) | — | — | (501.2 | ) | |||||||||||||||
| Marketing and advertising | (31.1 | ) | (7.5 | ) | (26.5 | ) | (65.1 | ) | (0.1 | ) | — | (65.2 | ) | ||||||||||||||
| Salaries and benefits | (94.4 | ) | (23.9 | ) | (121.0 | ) | (239.3 | ) | — | — | (239.3 | ) | |||||||||||||||
| Content expense | (5.1 | ) | (163.2 | ) | (6.7 | ) | (175.0 | ) | — | 42.6 | (132.4 | ) | |||||||||||||||
| Selling, general and administrative expense | (26.7 | ) | (13.0 | ) | (33.9 | ) | (73.6 | ) | (64.7 | ) | 0.8 | (137.5 | ) | ||||||||||||||
| Maintenance, insurance and utilities | (34.6 | ) | (3.1 | ) | (32.4 | ) | (70.1 | ) | (4.6 | ) | 4.4 | (70.3 | ) | ||||||||||||||
| Property and other taxes | (6.4 | ) | (0.2 | ) | (10.7 | ) | (17.3 | ) | (0.6 | ) | — | (17.9 | ) | ||||||||||||||
| Other operating expense | (88.8 | ) | (35.8 | ) | (59.8 | ) | (184.4 | ) | — | 18.7 | (165.7 | ) | |||||||||||||||
| Other income | 0.3 | — | 141.7 | 142.0 | — | — | 142.0 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 473.0 | $ | 128.3 | $ | 386.8 | $ | 988.1 | $ | (65.5 | ) | $ | — | $ | 922.6 | ||||||||||||
| Nine Months Ended September 30, 2023 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing |
TwinSpires | Gaming | Total Segments |
All Other | Eliminations | Total | ||||||||||||||||||||
| Revenues | $ | 849.3 | $ | 347.8 | $ | 744.4 | $ | 1,941.5 | $ | 0.7 | $ | (41.7 | ) | $ | 1,900.5 | ||||||||||||
| Gaming taxes and purses | (203.9 | ) | (17.8 | ) | (246.7 | ) | (468.4 | ) | — | — | (468.4 | ) | |||||||||||||||
| Marketing and advertising | (27.9 | ) | (8.0 | ) | (26.5 | ) | (62.4 | ) | (0.2 | ) | 0.3 | (62.3 | ) | ||||||||||||||
| Salaries and benefits | (80.0 | ) | (20.7 | ) | (109.2 | ) | (209.9 | ) | — | — | (209.9 | ) | |||||||||||||||
| Content expense | (5.1 | ) | (161.1 | ) | (6.9 | ) | (173.1 | ) | — | 37.7 | (135.4 | ) | |||||||||||||||
| Selling, general and administrative expense | (23.4 | ) | (8.1 | ) | (32.4 | ) | (63.9 | ) | (54.1 | ) | 0.9 | (117.1 | ) | ||||||||||||||
| Maintenance, insurance and utilities | (31.9 | ) | (2.6 | ) | (29.7 | ) | (64.2 | ) | (0.3 | ) | — | (64.5 | ) | ||||||||||||||
| Property and other taxes | (4.4 | ) | (0.3 | ) | (9.9 | ) | (14.6 | ) | (0.2 | ) | — | (14.8 | ) | ||||||||||||||
| Other operating expense | (87.3 | ) | (33.1 | ) | (52.5 | ) | (172.9 | ) | — | 2.8 | (170.1 | ) | |||||||||||||||
| Other income | 1.1 | 1.1 | 144.6 | 146.8 | — | — | 146.8 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 386.5 | $ | 97.2 | $ | 375.2 | $ | 858.9 | $ | (54.1 | ) | $ | — | $ | 804.8 | ||||||||||||
| CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL INFORMATION (Unaudited) |
|||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| (in millions) | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Reconciliation of Comprehensive Income to Adjusted EBITDA: | |||||||||||||||
| Net income attributable to Churchill Downs Incorporated | $ | 65.4 | $ | 61.0 | $ | 355.1 | $ | 359.7 | |||||||
| Net income attributable to noncontrolling interest | 0.8 | — | 1.7 | — | |||||||||||
| Net income and comprehensive income | 66.2 | 61.0 | 356.8 | 359.7 | |||||||||||
| Additions: | |||||||||||||||
| Depreciation and amortization | 49.6 | 42.1 | 145.7 | 121.8 | |||||||||||
| Interest expense | 73.1 | 67.9 | 217.0 | 197.8 | |||||||||||
| Income tax provision | 19.9 | 20.8 | 125.4 | 130.2 | |||||||||||
| EBITDA | $ | 208.8 | $ | 191.8 | $ | 844.9 | $ | 809.5 | |||||||
| Adjustments to EBITDA: | |||||||||||||||
| Stock-based compensation expense | $ | 7.1 | $ | 8.1 | $ | 23.2 | $ | 24.8 | |||||||
| Arlington exit costs | — | 0.1 | — | 9.4 | |||||||||||
| Pre-opening expense | 7.8 | 5.0 | 23.6 | 11.4 | |||||||||||
| Other expenses, net | 1.0 | 0.7 | 1.3 | 7.6 | |||||||||||
| Asset impairments | 3.9 | — | 3.9 | 24.5 | |||||||||||
| Transaction expense, net | (4.0 | ) | 1.5 | 0.7 | 1.8 | ||||||||||
| Other income, expense: | |||||||||||||||
| Interest, depreciation and amortization expense related to equity investments | 10.6 | 10.1 | 31.4 | 29.8 | |||||||||||
| Rivers Des Plaines’ legal reserves and transaction costs | — | — | 0.3 | — | |||||||||||
| Other charges and recoveries, net | 0.1 | 0.9 | (6.7 | ) | — | ||||||||||
| Gain on sale of Arlington | — | — | — | (114.0 | ) | ||||||||||
| Total adjustments to EBITDA | 26.5 | 26.4 | 77.7 | (4.7 | ) | ||||||||||
| Adjusted EBITDA | $ | 235.3 | $ | 218.2 | $ | 922.6 | $ | 804.8 | |||||||
| Adjusted EBITDA by segment: | |||||||||||||||
| Live and Historical Racing | $ | 93.0 | $ | 80.9 | $ | 473.0 | $ | 386.5 | |||||||
| TwinSpires | 42.5 | 33.9 | 128.3 | 97.2 | |||||||||||
| Gaming | 123.3 | 122.3 | 386.8 | 375.2 | |||||||||||
| Total segment Adjusted EBITDA | 258.8 | 237.1 | 988.1 | 858.9 | |||||||||||
| All Other | (23.5 | ) | (18.9 | ) | (65.5 | ) | (54.1 | ) | |||||||
| Total Adjusted EBITDA | $ | 235.3 | $ | 218.2 | $ | 922.6 | $ | 804.8 | |||||||
| CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL JOINT VENTURE FINANCIAL STATEMENTS (Unaudited) |
|||||||||||||||
| Summarized financial information for our equity investments is comprised of the following: | |||||||||||||||
| Summarized Income Statement | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| (in millions) | 2024 | 2023 | 2024 | 2023 | |||||||||||
| Net revenue | $ | 208.4 | $ | 208.9 | $ | 641.2 | $ | 648.2 | |||||||
| Operating and SG&A expense | 132.2 | 135.1 | 399.3 | 407.3 | |||||||||||
| Depreciation and amortization | 6.8 | 5.9 | 20.1 | 17.5 | |||||||||||
| Total operating expense | 139.0 | 141.0 | 419.4 | 424.8 | |||||||||||
| Operating income | 69.4 | 67.9 | 221.8 | 223.4 | |||||||||||
| Interest and other expense, net | (11.1 | ) | (11.1 | ) | (33.5 | ) | (32.7 | ) | |||||||
| Net income | $ | 58.3 | $ | 56.8 | $ | 188.3 | $ | 190.7 | |||||||
| Summarized Balance Sheet | |||||||
| (in millions) | September 30, 2024 | December 31, 2023 | |||||
| Assets | |||||||
| Current assets | $ | 93.9 | $ | 104.8 | |||
| Property and equipment, net | 330.7 | 339.4 | |||||
| Other assets, net | 270.1 | 266.1 | |||||
| Total assets | $ | 694.7 | $ | 710.3 | |||
| Liabilities and Members’ Deficit | |||||||
| Current liabilities | $ | 105.6 | $ | 106.2 | |||
| Long-term debt | 844.4 | 847.2 | |||||
| Other liabilities | 0.6 | 0.7 | |||||
| Members’ deficit | (255.9 | ) | (243.8 | ) | |||
| Total liabilities and members’ deficit | $ | 694.7 | $ | 710.3 | |||
| CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL INFORMATION (Unaudited) |
||||
| Planned capital projects for the Company are as follows: | ||||
| (in millions) | Project | Target Completion | Planned Spend | |
| Live and Historical Racing Segment | ||||
| Churchill Downs Racetrack | Starting Gate Pavilion and Courtyard | April 2025 | $80-90 | |
| Virginia |
The Rose Gaming Resort (HRM Venue) |
October 2024 | $460 | |
| Richmond HRM Expansion | December 2025 | $40-45 | ||
| Henrico HRM Venue | Fourth Quarter 2025 | $30-40 | ||
| Western Kentucky | Owensboro Racing and Gaming (HRM Venue) | First Quarter 2025 | $100 | |
| Southwestern Kentucky | Calvert City HRM Venue | First Quarter 2026 | $40-50 | |
| New Hampshire | Salem HRM Venue | TBD | TBD | |
Contact: Sam Ullrich
(502) 638-3906
[email protected]
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