Nasdaq:CHDN
Churchill Downs Incorporated Reports 2022 Second Quarter Results
LOUISVILLE, Ky., July 27, 2022 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (Nasdaq: CHDN) (the “Company”) today reported business results for the second quarter ended June 30, 2022.
Second Quarter 2022 Highlights
- Record second quarter 2022 results:
- Record net revenue of $582.5 million compared to $515.1 million in second quarter 2021
- Record net income of $339.3 million compared to $108.3 million in second quarter 2021
- Record Adjusted EBITDA of $291.2 million compared to $233.3 million in second quarter 2021
- Our Live and Historical Racing segment delivered record revenue and Adjusted EBITDA, with Adjusted EBITDA up 67% compared to the second quarter of 2021
- Churchill Downs Racetrack ran the 148th Kentucky Derby with record Derby Week all-sources handle for Churchill Downs Racetrack, record Derby Week Adjusted EBITDA, and debuted the new Homestretch Club
- The TwinSpires segment delivered Adjusted EBITDA of $33.9 million, up 38% compared to the second quarter of 2021
- Closed on the sale of 115.7 acres of excess land near Calder Casino for $291 million
| CONSOLIDATED RESULTS | |||||
| Second Quarter | |||||
| (in millions, except per share data) | 2022 | 2021 | |||
| Net revenue | $ | 582.5 | $ | 515.1 | |
| Net income | $ | 339.3 | $ | 108.3 | |
| Diluted EPS | $ | 8.79 | $ | 2.76 | |
| Adjusted EBITDA(a) | $ | 291.2 | $ | 233.3 | |
| (a) This is a non-GAAP measure. See explanation of non-GAAP measures below. | |||||
Second Quarter 2022 Results
The Company’s second quarter of 2022 net income was $339.3 million compared to $108.3 million in the prior year quarter.
The following items impacted the comparability of the Company’s second quarter net income:
- $193.6 million after-tax gain on the sale of Calder land;
- $8.1 million after-tax charge related to the 2021 asset impairment at Churchill Downs Racetrack that did not recur in 2022;
- $4.7 million after-tax decrease in expenses related to our equity portion of Rivers Des Plaines’ legal reserves and transaction costs; and
- $0.3 million after-tax benefit increase related to our equity portion of the non-cash change in the fair value of Rivers Des Plaines’ interest rate swaps.
These increases were partially offset by:
- $2.8 million after-tax increase in expenses related to transaction, pre-opening and other expenses, net; and
- $2.3 million after-tax increase in legal reserves.
Excluding the items above, second quarter 2022 adjusted net income increased $29.4 million primarily due to the following:
- $38.6 million after-tax increase from the prior year quarter driven by the results of our operations and equity income from our unconsolidated affiliates,
- Partially offset by $9.2 million after-tax increase from the prior year quarter in interest expense associated with higher outstanding debt balances.
| 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
| Second Quarter | |||||
| (in millions) | 2022 | 2021 | |||
| Net revenue | $ | 275.9 | $ | 190.5 | |
| Adjusted EBITDA | 163.9 | 98.4 | |||
For the second quarter of 2022, net revenue increased $85.4 million due primarily to a $69.3 million increase at Churchill Downs Racetrack due to the running of the Kentucky Derby in 2022 without capacity restrictions that were in place in 2021, an $8.5 million increase at Oak Grove Racing, Gaming and Hotel (“Oak Grove”), a $4.3 million increase from Derby City Gaming, a $2.9 million increase at Newport Racing & Gaming (“Newport”), and a $0.4 million increase at Turfway Park. The historical racing machine (“HRM”) properties benefited from the elimination of the capacity restrictions that were in place during the second quarter of 2021 and overall continued growth in the businesses.
Adjusted EBITDA increased $65.5 million due to a $58.5 million increase at Churchill Downs Racetrack driven by the running of the Kentucky Derby in 2022 without capacity restrictions that were in place in 2021, a $4.0 million increase at Oak Grove, a $1.7 million increase at Derby City Gaming, and a $1.3 million increase at Newport, all of which were driven by increases in net revenue.
TwinSpires
| Second Quarter | |||||
| (in millions) | 2022 | 2021 | |||
| Net revenue | $ | 138.5 | $ | 142.6 | |
| Adjusted EBITDA | 33.9 | 24.6 | |||
For the second quarter of 2022, net revenue decreased $4.1 million from the prior year quarter primarily due to a decrease of $2.2 million from Sports and Casino and a $1.9 million decrease 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. Horse Racing net revenue decreased as a higher portion of our patrons returned to wagering at brick-and-mortar facilities instead of wagering online in the current quarter compared to the prior year quarter.
Adjusted EBITDA increased $9.3 million primarily due to a $10.8 million increase from our Sports and Casino business due to decreased online marketing and promotional activities. This increase was partially offset by a $1.2 million decrease from Horse Racing due to a reduction in net revenue and a $0.3 million decrease from United Tote.
Gaming
| Second Quarter | |||||
| (in millions) | 2022 | 2021 | |||
| Net revenue | $ | 184.5 | $ | 186.0 | |
| Adjusted EBITDA | 106.8 | 119.8 | |||
For the second quarter of 2022, net revenue decreased $1.5 million primarily due to a decrease of $4.6 million at Harlow’s and a $4.4 million decrease at Riverwalk as a result of the current economic conditions, competitive pressures, and a mask mandate at Harlow’s that was discontinued in early June 2022. These decreases were partially offset by a $4.8 million increase at Oxford due to the lifting of restrictions that were in place during the prior year quarter, a $2.1 million increase at Fair Grounds from the 2022 Jazz Festival that more than offset the decline in Fair Grounds Slots revenue due to current economic conditions and the ongoing closure of our Houma off-track betting facility (“OTB”), and a $0.6 million net increase in all other properties.
Adjusted EBITDA decreased $13.0 million driven by a $10.2 million decrease at our wholly-owned Gaming properties and a $2.8 million decrease from our equity investments. The decreases at our wholly-owned Gaming properties are the result of decreased revenue and increases in marketing and salaries expense. The decrease in our equity investments is also driven by increases in marketing and salaries expense.
All Other
For the second quarter of 2022, All Other Adjusted EBITDA decreased $3.9 million primarily driven by a $3.1 million decrease as a result of Arlington not conducting live racing in the second 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, which we anticipate to close in the first quarter of 2023.
| ACQUISITION / DISPOSITION UPDATE |
Peninsula Pacific Entertainment LLC (“P2E”) Acquisition:
On February 18, 2022, the Company entered into a definitive purchase agreement to acquire substantially all of the assets of P2E for total consideration of $2.485 billion (the “P2E Acquisition”). The P2E Acquisition contemplates the Company acquiring the following properties: Colonial Downs Racetrack in New Kent, Virginia (“Colonial Downs”), six historical racing entertainment venues across Virginia, del Lago Resort & Casino (“del Lago”) in Waterloo, New York, and the operations of Hard Rock Hotel & Casino in Sioux City, Iowa (“Hard Rock Sioux City”).
The Company has obtained the acquisition of ownership interest approval for the Virginia properties from the Virginia Racing Commission. The P2E Transaction remains dependent on customary closing conditions, including the Company obtaining approvals from the New York State Gaming Commission and the Iowa Racing and Gaming Commission. The transaction is expected to close before the end of 2022.
Calder Land Sale:
On June 17, 2022, the Company closed on the previously announced sale of 115.7 acres of excess land near Calder Casino for $291.0 million (or approximately $2.5 million per acre) to Link Logistics, a Blackstone portfolio company. The Company received cash proceeds of $279.0 million which was net of $12.0 million of transaction costs. We recognized a gain of $274.6 million on the sale of the land, which is included in other income (expense) in the accompanying Condensed Consolidated Statements of Comprehensive Income.
The Company is planning on using certain proceeds of the sale to purchase property as part of the previously announced P2E acquisition and to invest in other replacement properties that qualify as Internal Revenue Code §1031 transactions to defer the federal income tax on the gain on the Calder land sale. The Company has identified two reverse like-kind exchange transactions for property acquired prior to the sale of the Calder land and a forward like-kind exchange transaction to acquire additional property for the Internal Revenue Code §1031 transactions.
The first reverse like-kind exchange involved our $9.9 million investment in real property for the Derby City Gaming Downtown facility in Louisville, Kentucky. This reverse like-kind exchange was completed in June 2022.
The second reverse like-kind exchange involves the Company’s investment in real property for the Queen of Terre Haute Casino Resort (“Queen of Terre Haute”) property in Terre Haute, Indiana. As of June 30, 2022, $10.0 million had been invested in real property for the Queen of Terre Haute. The Company plans to make additional investments in real property for the Queen of Terre Haute and expects to complete this reverse like-kind exchange in fourth quarter 2022.
The Company is planning on utilizing the remainder of the proceeds from the Calder land sale to execute a forward like-kind exchange transaction by purchasing property as part of the previously announced P2E Acquisition. The Company anticipates closing the P2E Acquisition prior to the end of 2022. If the acquisition of replacement property is not completed within 180 days of the Calder land sale, all applicable income taxes will be assessed on the remaining gain that was not deferred by acquiring replacement property.
Chasers Poker Room Acquisition:
On March 22, 2022, the Company entered into a definitive purchase agreement to acquire Chasers Poker Room (“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. Following the closing of the acquisition, the Company plans to develop an expanded charitable gaming facility in Salem to accommodate historical racing machines. The Company expects the total investment in Salem, inclusive of the Chasers purchase price to be approximately $150 million. The transaction is expected to close in the third quarter of 2022.
| CAPITAL MANAGEMENT |
Share Repurchase Program:
The Company repurchased 321,554 shares of its common stock at an average share price of approximately $191.37 based on trade date in conjunction with its publicly announced share repurchase program at a total cost of $61.5 million in the second quarter of 2022. We had approximately $359.1 million of repurchase authority remaining under this program as of June 30, 2022.
April 2022 Financing Transactions:
On April 13, 2022, the Company entered into the fourth amendment of its Credit Agreement (the “Fourth Amendment to the Credit Agreement”) to extend the maturity of its existing revolving credit facility to April 13, 2027 and to increase the commitments under the existing revolving credit facility from $700 million to $1.2 billion (the “Revolver”). The Fourth Amendment to the Credit Agreement also provides for a senior secured Delayed Draw Term Loan A credit facility due April 13, 2027 in the amount of $800 million (the “Delayed Draw Term Loan A”) which is part of the financing for the P2E Acquisition. The interest rate applicable to the borrowings on the Revolver and Delayed Draw Term Loan A will be SOFR plus a spread, determined by the Company’s total net leverage ratio. We also successfully closed into escrow the previously announced offering of $1.2 billion in aggregate principal amount of 5.75% senior notes due 2030. The proceeds from the senior notes offering will also be used for the financing for the P2E Acquisition.
Conference Call
A conference call regarding this news release is scheduled for Thursday, July 28, 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 at https://register.vevent.com/register/BIf86ecb99de9745e3b2767ca077994dac. 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, July 28, 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 three entertainment venues with approximately 3,050 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 11,000 slot machines and video lottery terminals and 200 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), 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, our and P2E’s ability to consummate a sale-leaseback transaction with respect to the Hard Rock Sioux City on terms desired or anticipated, 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; increase in our insurance costs, or obtain similar insurance coverage in the future, and inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events; and risks in connection with Internal Revenue Code Section 1031 exchanges.
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 June 30, | Six Months Ended June 30, | ||||||||||||||
| (in millions, except per common share data) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Net revenue: | |||||||||||||||
| Live and Historical Racing | $ | 260.9 | $ | 175.9 | $ | 346.9 | $ | 239.1 | |||||||
| TwinSpires | 136.8 | 140.8 | 237.1 | 244.3 | |||||||||||
| Gaming | 184.3 | 186.0 | 361.6 | 338.0 | |||||||||||
| All Other | 0.5 | 12.4 | 1.0 | 18.0 | |||||||||||
| Total net revenue | 582.5 | 515.1 | 946.6 | 839.4 | |||||||||||
| Operating expense: | |||||||||||||||
| Live and Historical Racing | 121.4 | 100.3 | 189.1 | 155.0 | |||||||||||
| TwinSpires | 90.2 | 102.1 | 165.1 | 179.6 | |||||||||||
| Gaming | 128.8 | 121.0 | 254.0 | 227.3 | |||||||||||
| All Other | 2.8 | 11.7 | 5.9 | 20.5 | |||||||||||
| Selling, general and administrative expense | 38.4 | 33.4 | 74.3 | 63.6 | |||||||||||
| Asset impairments | — | 11.2 | 4.9 | 11.2 | |||||||||||
| Transaction expense, net | 1.2 | — | 6.2 | 0.1 | |||||||||||
| Total operating expense | 382.8 | 379.7 | 699.5 | 657.3 | |||||||||||
| Operating income | 199.7 | 135.4 | 247.1 | 182.1 | |||||||||||
| Other income (expense): | |||||||||||||||
| Interest expense, net | (35.1 | ) | (22.0 | ) | (56.4 | ) | (41.4 | ) | |||||||
| Equity in income of unconsolidated affiliates | 40.5 | 36.4 | 73.0 | 61.3 | |||||||||||
| Gain on Calder land sale | 274.6 | — | 274.6 | — | |||||||||||
| Miscellaneous, net | 0.2 | 0.1 | 0.2 | 0.2 | |||||||||||
| Total other income | 280.2 | 14.5 | 291.4 | 20.1 | |||||||||||
| Income from operations before provision for income taxes | 479.9 | 149.9 | 538.5 | 202.2 | |||||||||||
| Income tax provision | (140.6 | ) | (41.6 | ) | (157.1 | ) | (57.8 | ) | |||||||
| Net income | $ | 339.3 | $ | 108.3 | $ | 381.4 | $ | 144.4 | |||||||
| Net income per common share data: | |||||||||||||||
| Basic net income | $ | 8.91 | $ | 2.80 | $ | 9.98 | $ | 3.72 | |||||||
| Diluted net income | $ | 8.79 | $ | 2.76 | $ | 9.85 | $ | 3.66 | |||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 38.1 | 38.7 | 38.2 | 38.8 | |||||||||||
| Diluted | 38.6 | 39.3 | 38.7 | 39.4 | |||||||||||
CHURCHILL DOWNS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| (in millions) | June 30, 2022 | December 31, 2021 | |||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 310.2 | $ | 291.3 | |||
| Restricted cash | 1,589.3 | 64.3 | |||||
| Accounts receivable, net | 65.4 | 42.3 | |||||
| Income taxes receivable | — | 66.0 | |||||
| Other current assets | 40.0 | 37.6 | |||||
| Total current assets | 2,004.9 | 501.5 | |||||
| Property and equipment, net | 1,130.1 | 994.9 | |||||
| Investment in and advances to unconsolidated affiliates | 658.7 | 663.6 | |||||
| Goodwill | 366.8 | 366.8 | |||||
| Other intangible assets, net | 352.8 | 348.1 | |||||
| Other assets | 23.4 | 18.9 | |||||
| Long-term assets held for sale | 82.9 | 87.8 | |||||
| Total assets | $ | 4,619.6 | $ | 2,981.6 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 139.1 | $ | 81.6 | |||
| Accrued expenses and other current liabilities | 282.6 | 231.7 | |||||
| Income taxes payable | 87.6 | 0.9 | |||||
| Current deferred revenue | 12.1 | 47.7 | |||||
| Current maturities of long-term debt | 7.0 | 7.0 | |||||
| Dividends payable | — | 26.1 | |||||
| Total current liabilities | 528.4 | 395.0 | |||||
| Long-term debt, net of current maturities and loan origination fees | 665.8 | 668.6 | |||||
| Notes payable, net of debt issuance costs | 2,488.5 | 1,292.4 | |||||
| Non-current deferred revenue | 10.9 | 13.3 | |||||
| Deferred income taxes | 273.3 | 252.9 | |||||
| Other liabilities | 49.8 | 52.6 | |||||
| Total liabilities | 4,016.7 | 2,674.8 | |||||
| Commitments and contingencies | |||||||
| Shareholders’ equity: | |||||||
| Preferred stock | — | — | |||||
| Common stock | — | — | |||||
| Retained earnings | 603.8 | 307.7 | |||||
| Accumulated other comprehensive loss | (0.9 | ) | (0.9 | ) | |||
| Total shareholders’ equity | 602.9 | 306.8 | |||||
| Total liabilities and shareholders’ equity | $ | 4,619.6 | $ | 2,981.6 | |||
CHURCHILL DOWNS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| Six Months Ended June 30, | |||||||
| (in millions) | 2022 | 2021 | |||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 381.4 | $ | 144.4 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 51.2 | 52.0 | |||||
| Distributions from unconsolidated affiliates | 77.9 | 47.5 | |||||
| Equity in income of unconsolidated affiliates | (73.0 | ) | (61.3 | ) | |||
| Stock-based compensation | 14.4 | 12.6 | |||||
| Deferred income taxes | 20.4 | 7.4 | |||||
| Asset impairments | 4.9 | 11.2 | |||||
| Amortization of operating lease assets | 2.7 | 2.7 | |||||
| Gain on Calder land sale | (274.6 | ) | — | ||||
| Other | 2.9 | 3.1 | |||||
| Changes in operating assets and liabilities: | |||||||
| Income taxes | 154.0 | 39.5 | |||||
| Deferred revenue | (37.9 | ) | (12.6 | ) | |||
| Other assets and liabilities | 56.5 | 87.8 | |||||
| Net cash provided by operating activities | 380.8 | 334.3 | |||||
| Cash flows from investing activities: | |||||||
| Capital maintenance expenditures | (23.0 | ) | (13.7 | ) | |||
| Capital project expenditures | (144.1 | ) | (15.9 | ) | |||
| Proceeds from Calder land sale | 279.0 | — | |||||
| Other | (7.3 | ) | (0.9 | ) | |||
| Net cash provided by (used in) investing activities | 104.6 | (30.5 | ) | ||||
| Cash flows from financing activities: | |||||||
| Proceeds from borrowings under long-term debt obligations | 1,200.0 | 780.8 | |||||
| Repayments of borrowings under long-term debt obligations | (3.5 | ) | (427.4 | ) | |||
| Payment of dividends | (25.7 | ) | (24.8 | ) | |||
| Repurchase of common stock | (84.5 | ) | (193.9 | ) | |||
| Taxes paid related to net share settlement of stock awards | (13.2 | ) | (12.6 | ) | |||
| Debt issuance costs | (11.4 | ) | (6.8 | ) | |||
| Change in bank overdraft | (3.0 | ) | (6.1 | ) | |||
| Other | (0.2 | ) | 1.4 | ||||
| Net cash provided by financing activities | 1,058.5 | 110.6 | |||||
| Cash flows from discontinued operations: | |||||||
| Operating activities of discontinued operations | — | (124.0 | ) | ||||
| Net increase in cash, cash equivalents and restricted cash | 1,543.9 | 290.4 | |||||
| Cash, cash equivalents and restricted cash, beginning of period | 355.6 | 121.0 | |||||
| Cash, cash equivalents and restricted cash, end of period | $ | 1,899.5 | $ | 411.4 | |||
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| GAAP net income | $ | 339.3 | $ | 108.3 | $ | 381.4 | $ | 144.4 | |||||||
| Adjustments, continuing operations: | |||||||||||||||
| Changes in fair value of interest rate swaps related to Rivers Des Plaines | (2.2 | ) | (1.8 | ) | (12.6 | ) | (6.0 | ) | |||||||
| Legal reserves and transaction costs related to Rivers Des Plaines | 0.2 | 6.7 | 0.5 | 8.0 | |||||||||||
| Other charges | — | — | 1.0 | — | |||||||||||
| Transaction, pre-opening, and other expense | 5.6 | 1.7 | 15.2 | 2.4 | |||||||||||
| Legal reserves | 3.2 | — | 3.2 | — | |||||||||||
| Asset impairments | — | 11.2 | 4.9 | 11.2 | |||||||||||
| Gain on Calder land sale | (274.6 | ) | — | (274.6 | ) | — | |||||||||
| Income tax impact on net income adjustments (a) | 79.1 | (5.0 | ) | 77.5 | (4.3 | ) | |||||||||
| Total adjustments | (188.7 | ) | 12.8 | (184.9 | ) | 11.3 | |||||||||
| Adjusted net income attributable to Churchill Downs Incorporated | $ | 150.6 | $ | 121.1 | $ | 196.5 | $ | 155.7 | |||||||
| Adjusted diluted EPS | $ | 3.90 | $ | 3.08 | $ | 5.08 | $ | 3.95 | |||||||
| Weighted average shares outstanding – Diluted | 38.6 | 39.3 | 38.7 | 39.4 | |||||||||||
(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 June 30, | Six Months Ended June 30, | ||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||
| Total Handle | |||||||||||
| Churchill Downs Racetrack | $ | 625.6 | $ | 529.4 | $ | 630.0 | $ | 533.2 | |||
| TwinSpires Horse Racing(a) | 610.6 | 620.4 | 1,005.5 | 1,063.5 | |||||||
(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 June 30, | Six Months Ended June 30, | ||||||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Net revenue from external customers: | |||||||||||||||
| Live and Historical Racing: | |||||||||||||||
| Churchill Downs Racetrack | $ | 174.2 | $ | 105.2 | $ | 176.2 | $ | 107.2 | |||||||
| Derby City Gaming | 44.2 | 39.9 | 87.0 | 72.8 | |||||||||||
| Oak Grove | 34.1 | 25.6 | 64.5 | 45.0 | |||||||||||
| Turfway Park | 1.0 | 0.7 | 5.5 | 5.2 | |||||||||||
| Newport | 7.4 | 4.5 | 13.7 | 8.9 | |||||||||||
| Total Live and Historical Racing | 260.9 | 175.9 | 346.9 | 239.1 | |||||||||||
| TwinSpires: | |||||||||||||||
| Horse Racing | 130.6 | 132.4 | 220.6 | 228.9 | |||||||||||
| Sports and Casino | 6.2 | 8.4 | 16.5 | 15.4 | |||||||||||
| Total TwinSpires | 136.8 | 140.8 | 237.1 | 244.3 | |||||||||||
| Gaming: | |||||||||||||||
| Fair Grounds and VSI | 37.2 | 35.1 | 78.7 | 73.4 | |||||||||||
| Presque Isle | 30.3 | 30.5 | 57.5 | 54.3 | |||||||||||
| Ocean Downs | 27.4 | 27.0 | 48.7 | 47.0 | |||||||||||
| Calder | 27.9 | 27.4 | 54.9 | 48.3 | |||||||||||
| Oxford | 29.4 | 24.6 | 56.2 | 40.3 | |||||||||||
| Riverwalk | 14.0 | 18.4 | 28.4 | 32.8 | |||||||||||
| Harlow’s | 12.0 | 16.6 | 25.1 | 30.6 | |||||||||||
| Lady Luck Nemacolin | 6.1 | 6.4 | 12.1 | 11.3 | |||||||||||
| Total Gaming | 184.3 | 186.0 | 361.6 | 338.0 | |||||||||||
| All Other | 0.5 | 12.4 | 1.0 | 18.0 | |||||||||||
| Net revenue from external customers | $ | 582.5 | $ | 515.1 | $ | 946.6 | $ | 839.4 | |||||||
| Intercompany net revenue: | |||||||||||||||
| Live and Historical Racing | $ | 15.0 | $ | 14.6 | $ | 16.2 | $ | 16.1 | |||||||
| TwinSpires | 1.7 | 1.8 | 2.8 | 3.3 | |||||||||||
| Gaming | 0.2 | — | 2.1 | 2.0 | |||||||||||
| All Other | — | 2.4 | — | 4.0 | |||||||||||
| Eliminations | (16.9 | ) | (18.8 | ) | (21.1 | ) | (25.4 | ) | |||||||
| Intercompany net revenue | $ | — | $ | — | $ | — | $ | — | |||||||
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
| Three Months Ended June 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 | $ | 46.5 | $ | 118.4 | $ | 5.5 | $ | 170.4 | $ | — | $ | 170.4 | |||||
| Historical racing(a) | 78.4 | — | 1.3 | 79.7 | — | 79.7 | |||||||||||
| Racing event-related services | 121.9 | — | 0.2 | 122.1 | — | 122.1 | |||||||||||
| Gaming(a) | — | 6.2 | 158.1 | 164.3 | — | 164.3 | |||||||||||
| Other(a) | 14.1 | 12.2 | 19.2 | 45.5 | 0.5 | 46.0 | |||||||||||
| Total | $ | 260.9 | $ | 136.8 | $ | 184.3 | $ | 582.0 | $ | 0.5 | $ | 582.5 | |||||
| Three Months Ended June 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 | $ | 39.6 | $ | 121.6 | $ | 4.4 | $ | 165.6 | $ | 9.5 | $ | 175.1 | |||||
| Historical racing(a) | 64.9 | — | — | 64.9 | — | 64.9 | |||||||||||
| Racing event-related services | 63.5 | — | 0.2 | 63.7 | 1.9 | 65.6 | |||||||||||
| Gaming(a) | — | 8.4 | 170.2 | 178.6 | — | 178.6 | |||||||||||
| Other(a) | 7.9 | 10.8 | 11.2 | 29.9 | 1.0 | 30.9 | |||||||||||
| Total | $ | 175.9 | $ | 140.8 | $ | 186.0 | $ | 502.7 | $ | 12.4 | $ | 515.1 | |||||
(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 $7.7 million for the three months ended June 30, 2022 and $5.2 million for the three months ended June 30, 2021.
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
| Six Months Ended June 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 | $ | 52.1 | $ | 199.9 | $ | 18.4 | $ | 270.4 | $ | — | $ | 270.4 | |||||
| Historical racing(a) | 152.0 | — | 1.3 | 153.3 | — | 153.3 | |||||||||||
| Racing event-related services | 122.4 | — | 0.6 | 123.0 | — | 123.0 | |||||||||||
| Gaming(a) | — | 16.5 | 309.0 | 325.5 | — | 325.5 | |||||||||||
| Other(a) | 20.4 | 20.7 | 32.3 | 73.4 | 1.0 | 74.4 | |||||||||||
| Total | $ | 346.9 | $ | 237.1 | $ | 361.6 | $ | 945.6 | $ | 1.0 | $ | 946.6 | |||||
| Six Months Ended June 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 | $ | 45.5 | $ | 210.8 | $ | 16.1 | $ | 272.4 | $ | 14.6 | $ | 287.0 | |||||
| Historical racing(a) | 117.8 | — | — | 117.8 | — | 117.8 | |||||||||||
| Racing event-related services | 63.5 | — | 0.9 | 64.4 | 1.9 | 66.3 | |||||||||||
| Gaming(a) | — | 15.4 | 302.7 | 318.1 | — | 318.1 | |||||||||||
| Other(a) | 12.3 | 18.1 | 18.3 | 48.7 | 1.5 | 50.2 | |||||||||||
| Total | $ | 239.1 | $ | 244.3 | $ | 338.0 | $ | 821.4 | $ | 18.0 | $ | 839.4 | |||||
(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 $14.8 million for the six months ended June 30, 2022 and $8.9 million for the six months ended June 30, 2021.
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
Adjusted EBITDA by segment is comprised of the following:
| Three Months Ended June 30, 2022 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing |
TwinSpires | Gaming | Total Segments |
All Other | Eliminations | Total | ||||||||||||||||||||
| Net revenue | $ | 275.9 | $ | 138.5 | $ | 184.5 | $ | 598.9 | $ | 0.2 | $ | (16.9 | ) | $ | 582.2 | ||||||||||||
| Taxes and purses | (59.6 | ) | (7.2 | ) | (68.2 | ) | (135.0 | ) | — | — | (135.0 | ) | |||||||||||||||
| Marketing and advertising | (6.4 | ) | (5.0 | ) | (3.7 | ) | (15.1 | ) | (0.1 | ) | — | (15.2 | ) | ||||||||||||||
| Salaries and benefits | (18.9 | ) | (6.9 | ) | (23.5 | ) | (49.3 | ) | — | — | (49.3 | ) | |||||||||||||||
| Content expense | (1.0 | ) | (68.1 | ) | (2.2 | ) | (71.3 | ) | — | 16.4 | (54.9 | ) | |||||||||||||||
| Selling, general and administrative expense | (3.0 | ) | (2.6 | ) | (6.7 | ) | (12.3 | ) | (13.5 | ) | 0.5 | (25.3 | ) | ||||||||||||||
| Other operating expense | (23.2 | ) | (14.8 | ) | (22.2 | ) | (60.2 | ) | — | — | (60.2 | ) | |||||||||||||||
| Other income | 0.1 | — | 48.8 | 48.9 | — | — | 48.9 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 163.9 | $ | 33.9 | $ | 106.8 | $ | 304.6 | $ | (13.4 | ) | $ | — | $ | 291.2 | ||||||||||||
| Three Months Ended June 30, 2021 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing |
TwinSpires | Gaming | Total Segments |
All Other | Eliminations | Total | ||||||||||||||||||||
| Net revenue | $ | 190.5 | $ | 142.6 | $ | 186.0 | $ | 519.1 | $ | 14.8 | $ | (18.8 | ) | $ | 515.1 | ||||||||||||
| Taxes and purses | (50.8 | ) | (8.3 | ) | (70.0 | ) | (129.1 | ) | (3.9 | ) | — | (133.0 | ) | ||||||||||||||
| Marketing and advertising | (4.9 | ) | (16.7 | ) | (2.5 | ) | (24.1 | ) | — | — | (24.1 | ) | |||||||||||||||
| Salaries and benefits | (15.3 | ) | (6.8 | ) | (20.6 | ) | (42.7 | ) | (2.3 | ) | — | (45.0 | ) | ||||||||||||||
| Content expense | (0.8 | ) | (68.5 | ) | (1.3 | ) | (70.6 | ) | (1.8 | ) | 18.4 | (54.0 | ) | ||||||||||||||
| Selling, general and administrative expense | (3.1 | ) | (2.9 | ) | (5.9 | ) | (11.9 | ) | (13.4 | ) | 0.4 | (24.9 | ) | ||||||||||||||
| Other operating expense | (17.3 | ) | (14.8 | ) | (17.7 | ) | (49.8 | ) | (2.9 | ) | — | (52.7 | ) | ||||||||||||||
| Other income | 0.1 | — | 51.8 | 51.9 | — | — | 51.9 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 98.4 | $ | 24.6 | $ | 119.8 | $ | 242.8 | $ | (9.5 | ) | $ | — | $ | 233.3 | ||||||||||||
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
Adjusted EBITDA by segment is comprised of the following:
| Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing |
TwinSpires | Gaming | Total Segments |
All Other | Eliminations | Total | ||||||||||||||||||||
| Net revenue | $ | 363.1 | $ | 239.9 | $ | 363.7 | $ | 966.7 | $ | 0.3 | $ | (21.1 | ) | $ | 945.9 | ||||||||||||
| Taxes and purses | (86.4 | ) | (14.7 | ) | (135.5 | ) | (236.6 | ) | — | — | (236.6 | ) | |||||||||||||||
| Marketing and advertising | (9.3 | ) | (10.1 | ) | (7.2 | ) | (26.6 | ) | (0.1 | ) | — | (26.7 | ) | ||||||||||||||
| Salaries and benefits | (29.8 | ) | (13.6 | ) | (47.4 | ) | (90.8 | ) | — | — | (90.8 | ) | |||||||||||||||
| Content expense | (1.6 | ) | (111.2 | ) | (3.7 | ) | (116.5 | ) | — | 20.3 | (96.2 | ) | |||||||||||||||
| Selling, general and administrative expense | (6.3 | ) | (5.2 | ) | (13.3 | ) | (24.8 | ) | (28.0 | ) | 0.8 | (52.0 | ) | ||||||||||||||
| Other operating expense | (38.0 | ) | (27.1 | ) | (42.2 | ) | (107.3 | ) | (0.2 | ) | — | (107.5 | ) | ||||||||||||||
| Other income | 0.1 | — | 83.5 | 83.6 | — | — | 83.6 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 191.8 | $ | 58.0 | $ | 197.9 | $ | 447.7 | $ | (28.0 | ) | $ | — | $ | 419.7 | ||||||||||||
| Six Months Ended June 30, 2021 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing |
TwinSpires | Gaming | Total Segments |
All Other | Eliminations | Total | ||||||||||||||||||||
| Net revenue | $ | 255.2 | $ | 247.6 | $ | 340.0 | $ | 842.8 | $ | 22.0 | $ | (25.4 | ) | $ | 839.4 | ||||||||||||
| Taxes and purses | (70.8 | ) | (14.7 | ) | (129.3 | ) | (214.8 | ) | (7.0 | ) | — | (221.8 | ) | ||||||||||||||
| Marketing and advertising | (7.0 | ) | (25.2 | ) | (3.9 | ) | (36.1 | ) | (0.1 | ) | — | (36.2 | ) | ||||||||||||||
| Salaries and benefits | (25.3 | ) | (13.0 | ) | (40.5 | ) | (78.8 | ) | (3.5 | ) | — | (82.3 | ) | ||||||||||||||
| Content expense | (1.4 | ) | (115.0 | ) | (2.3 | ) | (118.7 | ) | (3.1 | ) | 24.6 | (97.2 | ) | ||||||||||||||
| Selling, general and administrative expense | (6.1 | ) | (5.5 | ) | (11.9 | ) | (23.5 | ) | (26.0 | ) | 0.7 | (48.8 | ) | ||||||||||||||
| Other operating expense | (28.0 | ) | (26.5 | ) | (33.2 | ) | (87.7 | ) | (5.1 | ) | 0.1 | (92.7 | ) | ||||||||||||||
| Other income | 0.1 | — | 83.3 | 83.4 | 0.1 | — | 83.5 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 116.7 | $ | 47.7 | $ | 202.2 | $ | 366.6 | $ | (22.7 | ) | $ | — | $ | 343.9 | ||||||||||||
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Reconciliation of Comprehensive Income to Adjusted EBITDA: | |||||||||||||||
| Net income and comprehensive income | $ | 339.3 | $ | 108.3 | $ | 381.4 | $ | 144.4 | |||||||
| Additions: | |||||||||||||||
| Depreciation and amortization | 26.1 | 26.0 | 51.2 | 52.0 | |||||||||||
| Interest expense | 35.1 | 22.0 | 56.4 | 41.4 | |||||||||||
| Income tax provision | 140.6 | 41.6 | 157.1 | 57.8 | |||||||||||
| EBITDA | $ | 541.1 | $ | 197.9 | $ | 646.1 | $ | 295.6 | |||||||
| Adjustments to EBITDA: | |||||||||||||||
| Stock-based compensation expense | $ | 7.4 | $ | 7.1 | $ | 14.4 | $ | 12.6 | |||||||
| Legal reserves | 3.2 | — | 3.2 | — | |||||||||||
| Pre-opening expense | 2.6 | 1.5 | 4.7 | 2.1 | |||||||||||
| Other expenses, net | 1.8 | 0.2 | 4.3 | 0.2 | |||||||||||
| Asset impairments | — | 11.2 | 4.9 | 11.2 | |||||||||||
| Transaction expense, net | 1.2 | — | 6.2 | 0.1 | |||||||||||
| Other income, expense: | |||||||||||||||
| Interest, depreciation and amortization expense related to equity investments | 10.5 | 10.5 | 21.6 | 20.1 | |||||||||||
| Changes in fair value of Rivers Des Plaines’ interest rate swaps | (2.2 | ) | (1.8 | ) | (12.6 | ) | (6.0 | ) | |||||||
| Rivers Des Plaines’ legal reserves and transaction costs | 0.2 | 6.7 | 0.5 | 8.0 | |||||||||||
| Other charges | — | — | 1.0 | — | |||||||||||
| Gain on Calder land sale | (274.6 | ) | — | (274.6 | ) | — | |||||||||
| Total adjustments to EBITDA | (249.9 | ) | 35.4 | (226.4 | ) | 48.3 | |||||||||
| Adjusted EBITDA | $ | 291.2 | $ | 233.3 | $ | 419.7 | $ | 343.9 | |||||||
| Adjusted EBITDA by segment: | |||||||||||||||
| Live and Historical Racing | $ | 163.9 | $ | 98.4 | $ | 191.8 | $ | 116.7 | |||||||
| TwinSpires | 33.9 | 24.6 | 58.0 | 47.7 | |||||||||||
| Gaming | 106.8 | 119.8 | 197.9 | 202.2 | |||||||||||
| Total segment Adjusted EBITDA | 304.6 | 242.8 | 447.7 | 366.6 | |||||||||||
| All Other | (13.4 | ) | (9.5 | ) | (28.0 | ) | (22.7 | ) | |||||||
| Total Adjusted EBITDA | $ | 291.2 | $ | 233.3 | $ | 419.7 | $ | 343.9 | |||||||
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 June 30, | Six Months Ended June 30, | ||||||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Net revenue | $ | 214.6 | $ | 197.9 | $ | 391.8 | $ | 336.6 | |||||||
| Operating and SG&A expense | 130.7 | 109.8 | 248.9 | 195.4 | |||||||||||
| Depreciation and amortization | 6.3 | 4.4 | 11.6 | 8.7 | |||||||||||
| Total operating expense | 137.0 | 114.2 | 260.5 | 204.1 | |||||||||||
| Operating income | 77.6 | 83.7 | 131.3 | 132.5 | |||||||||||
| Interest and other expense, net | (7.3 | ) | (19.7 | ) | (3.2 | ) | (24.3 | ) | |||||||
| Net income | $ | 70.3 | $ | 64.0 | $ | 128.1 | $ | 108.2 | |||||||
| Summarized Balance Sheet | |||||||
| (in millions) | June 30, 2022 | December 31, 2021 | |||||
| Assets | |||||||
| Current assets | $ | 88.4 | $ | 96.0 | |||
| Property and equipment, net | 349.0 | 312.3 | |||||
| Other assets, net | 263.6 | 264.1 | |||||
| Total assets | $ | 701.0 | $ | 672.4 | |||
| Liabilities and Members’ Deficit | |||||||
| Current liabilities | $ | 109.8 | $ | 95.3 | |||
| Long-term debt | 827.8 | 786.9 | |||||
| Other liabilities | — | 20.6 | |||||
| Members’ deficit | (236.6 | ) | (230.4 | ) | |||
| Total liabilities and members’ deficit | $ | 701.0 | $ | 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 | ||
| Turfway Park | HRM Facility | September 2022 | $148 | |
| Derby City Gaming | Expansion and Hotel | Late 2022 / Second Quarter 2023 | $76 | |
| Derby City Gaming Downtown | Property Build Out | Second Half 2023 | $80 | |
| Oak Grove | Oak Grove Annex | TBD | TBD | |
| New Hampshire Charitable Gaming Facility | Acquisition and Property Build Out | 2022 / 2023 | Up to $150 | |
| Gaming Segment | ||||
| Managed Properties | ||||
| Queen of Terre Haute Casino Resort | Property Build Out | Late 2023 | Up to $260 | |
| Fair Grounds and VSI | HRMs in OTBs | First Quarter 2023 | $35 | |
Contact: Nick Zangari
(502) 394-1157
[email protected]
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Nasdaq:CHDN
Churchill Downs Incorporated Announces New Victory Run Capital Investment at Churchill Downs Racetrack
$280-$300 Million Investment Will Debut for the 2028 Kentucky Derby
LOUSVILLE, Ky., Oct. 22, 2025 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (“CDI” or “the Company”) (Nasdaq: CHDN) announced today a growth project called Victory Run, an exciting new structure on the first turn of the Churchill Downs Racetrack between the First Turn Club and the Skye Terrace. Victory Run will replace uncovered, ground-level box seats and dated dining areas with a new premium hospitality and seating offering.
This new four-story structure features a variety of premium hospitality experiences with tremendous views of the finish line of the racetrack, and will include private suites, indoor and outdoor dining, and covered box seating. The project will replace approximately 6,400 existing seats with premium seating for approximately 7,800 guests.
Pending incentives that must be approved first by the City of Louisville and then by the appropriate state agencies, including the Kentucky Cabinet for Economic Development, CDI anticipates construction of Victory Run will begin following the 2026 Kentucky Derby and will be completed by the 2028 Kentucky Derby. CDI plans to offer an interim upgraded seating experience in this area with temporary seating and enhanced amenities for the 2027 Kentucky Derby. CDI plans to spend $280-$300 million on the project.
“We are excited to unveil the Victory Run project for Churchill Downs Racetrack,” said Bill Carstanjen, Chief Executive Officer of CDI. “This project will create a greatly improved experience for our guests in an important section of our racetrack while delivering long-term growth and value for our shareholders.”
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 acquisition, development, and operation of live and historical racing entertainment venues, the growth of online wagering businesses, and the acquisition, development, and operation 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; changes in, or new interpretations of, applicable tax laws or rulings that could result in additional tax liabilities; 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; negative shifts in public opinion regarding gambling that could result in increased regulation of, or new restrictions on, the gaming industry; 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 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; costs of compliance with increasingly complex laws and regulations regarding data privacy and protection of personal information; 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] |
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LOUISVILLE, Ky., Oct. 22, 2025 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (Nasdaq: CHDN) (the “Company”, “CDI”, “we”) today reported business results for the third quarter ended September 30, 2025.
Company Highlights
- Third quarter 2025 financial results, as compared to the prior year quarter:
- Record third quarter net revenue of $683.0 million, up $54.5 million or 9%
- Net income attributable to CDI of $38.1 million, down $27.3 million or 42% driven by a one-time, non-cash impairment
- Adjusted net income attributable to CDI of $77.1 million, up $5.0 million or 7%
- Record third quarter Adjusted EBITDA of $262.3 million, up $27.0 million or 11%
- On July 24, 2025, CDI announced that NBC Sports will showcase the Kentucky Oaks on primetime for the first time ever in 2026.
- On August 6, 2025, CDI completed the expansion of Rosie’s Richmond in Richmond, Virginia with 450 incremental historical racing machines.
- On August 27, 2025, CDI completed the acquisition of 90% of Casino Salem for $180 million and began to operate the temporary mini casino at the Mall at Rockingham Park in Salem, New Hampshire.
- On September 29, 2025, CDI opened Roseshire Gaming Parlor in Henrico County, Virginia with 175 historical racing machines.
- On October 21, 2025, the Board of Directors approved a $0.438 per share dividend to shareholders of record as of December 5, 2025 and payable on January 6, 2026. This represents the fifteenth consecutive year of increased dividend per share.
- We ended the third quarter of 2025 with net bank leverage of 4.1x and returned $53.5 million of capital to our shareholders through share repurchases.
| CONSOLIDATED RESULTS |
| Third Quarter | |||||
| (in millions, except per share data) | 2025 | 2024 | |||
| Net revenue | $ | 683.0 | $ | 628.5 | |
| Net income attributable to CDI | $ | 38.1 | $ | 65.4 | |
| Diluted EPS attributable to CDI | $ | 0.54 | $ | 0.86 | |
| Adjusted net income attributable to CDI(a) | $ | 77.1 | $ | 72.1 | |
| Adjusted EBITDA(a) | $ | 262.3 | $ | 235.3 | |
| (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. All comparisons are against the applicable prior year period unless otherwise noted.
Live and Historical Racing
| Third Quarter | |||||
| (in millions) | 2025 | 2024 | |||
| Revenue | $ | 305.7 | $ | 252.4 | |
| Adjusted EBITDA | 116.4 | 93.0 | |||
Third quarter 2025 revenue increased $53.3 million due to a $30.1 million increase from our Virginia HRM venues, a $20.9 million increase from our Kentucky HRM venues, and a $2.3 million increase primarily from our temporary facility at Casino Salem in New Hampshire. The Virginia HRM increase was due to a $26.0 million net increase from our Northern Virginia venues and a $5.1 million net increase from our Central Virginia venues. These increases were partially offset by a $1.0 million net decrease from our four other Virginia venues. The Kentucky HRM increase was due to a $12.2 million increase from our Western Kentucky venues, a $3.5 million increase from our Louisville venues, a $3.0 million increase from our Northern Kentucky venues, and a $2.2 million increase from our Southwestern Kentucky venue.
Third quarter 2025 Adjusted EBITDA increased $23.4 million due to a $12.4 million increase from our Kentucky HRM venues, a $10.8 million increase from our Virginia HRM venues, and a $0.2 million increase primarily from our temporary facility at Casino Salem in New Hampshire. The Kentucky HRM increase was primarily due to a $4.6 million increase from our Western Kentucky venues, a $3.9 million increase from our Louisville venues, a $3.1 million increase from our Northern Kentucky venues, and a $0.8 million increase from our Southwestern Kentucky venue. The Virginia HRM increase was primarily due to an $11.3 million net increase from our Northern Virginia venues, which includes $3.5 million from a one-time business interruption insurance recovery related to the delayed opening of The Rose Gaming Resort in fourth quarter 2024, and a $1.1 million net increase from our Central Virginia venues, partially offset by a $1.1 million net decrease from our four other Virginia venues and a $0.5 million increase in shared services expense.
Wagering Services and Solutions
| Third Quarter | |||||
| (in millions) | 2025 | 2024 | |||
| Revenue | $ | 127.2 | $ | 118.7 | |
| Adjusted EBITDA | 46.0 | 42.5 | |||
Third quarter 2025 revenue increased $8.5 million due to a $5.3 million increase from TwinSpires Horse Racing, a $3.0 million increase from Exacta attributable to incremental HRMs in Virginia and New Hampshire, and a $0.2 million increase from our sports betting business.
Third quarter 2025 Adjusted EBITDA increased $3.5 million due to a $2.8 million increase from Exacta attributable to incremental HRMs in Virginia and New Hampshire, a $0.4 million increase from our sports betting business, and a $0.3 million net increase from TwinSpires Horse Racing.
Gaming
| Third Quarter | |||||
| (in millions) | 2025 | 2024 | |||
| Revenue | $ | 265.5 | $ | 270.3 | |
| Adjusted EBITDA | 123.3 | 123.3 | |||
Third quarter 2025 revenue decreased $4.8 million due to a $6.1 million decrease from the cessation of HRM operations in Louisiana, partially offset by a $1.3 million net increase primarily from our New York, Maine, Indiana, and Iowa properties.
Third quarter 2025 Adjusted EBITDA was consistent with the prior year quarter. Our wholly owned gaming properties decreased $0.5 million, which was offset by a $0.5 million increase from our equity investments. The decrease from our wholly owned gaming properties was due to a $1.4 million net decrease from the cessation of HRM operations in Louisiana and a $0.9 million net increase primarily from our Iowa, New York, Maine, and Indiana properties. The increase from our equity investments was due to a $1.1 million increase from Miami Valley Gaming, partially offset by a $0.6 million decrease from Rivers Des Plaines.
All Other
| Third Quarter | |||||||
| (in millions) | 2025 | 2024 | |||||
| Revenue | $ | 2.2 | $ | 2.6 | |||
| Adjusted EBITDA | (23.4 | ) | (23.5 | ) | |||
Third quarter 2025 revenue decreased $0.4 million due to intercompany revenue related to the captive insurance company. All captive revenue is eliminated in consolidation.
Third quarter 2025 Adjusted EBITDA increased $0.1 million primarily due to decreased corporate related expenses partially offset by a decrease related to our captive insurance company.
| CAPITAL MANAGEMENT |
Share Repurchase Program
The Company repurchased 515,527 shares of its common stock at a total cost of $53.5 million in the third quarter of 2025. $15.0 million of repurchases were made under the March 2025 Stock Repurchase Program and $38.5 million of repurchases were made under the July 2025 Stock Repurchase Program. We had approximately $461.5 million of repurchase authority remaining under the July 2025 Stock Repurchase Program as of September 30, 2025. The July 2025 Stock Repurchase Program includes and is not in addition to the $169.2 million previously remaining under the March 2025 Stock Repurchase Program authorization.
Annual Dividend
On October 21, 2025, the Company’s Board of Directors approved an annual cash dividend on the Company’s common stock of $0.438 per outstanding share, a seven percent increase over the prior year. The dividend is payable on January 6, 2026, to shareholders of record as of the close of business on December 5, 2025, with the aggregate cash dividend to be paid to each shareholder rounded to the nearest whole cent. This marks the fifteenth consecutive year that the Company has increased the dividend per share.
Income Taxes
On July 4, 2025, the United States enacted H.R. 1, a new federal tax and spending bill. Many of the tax provisions included in the bill are retroactive and will have a significant favorable impact on the Company’s current year cash tax expense, primarily due to the permanent reinstatements of 100% bonus depreciation rules and a 30% of EBITDA-based interest expense deduction limitation. As a result of this change, the Company will begin utilizing the deferred tax asset of $91.2 million related to interest expense previously subject to limitation. The expected reduction in cash paid taxes as a result of these new tax provisions will increase cash flow from operating activities.
| NET INCOME ATTRIBUTABLE TO CDI |
The Company’s third quarter 2025 net income attributable to CDI was $38.1 million compared to $65.4 million in the prior year quarter.
The following factors impacted the comparability of the Company’s third quarter 2025 net income to the prior year quarter:
- An increase of $31.0 million in after-tax impairment charges in the current year quarter related to the impairment of the Chasers’ gaming rights; and
- a $1.3 million after-tax increase in transaction, pre-opening, and other expenses.
Excluding the items above, third quarter 2025 adjusted net income attributable to CDI increased $5.0 million primarily due to the following:
- a $3.4 million after-tax increase primarily driven by the results of our operations; and
- a $2.9 million after-tax decrease in interest expense.
This was partially offset by:
- a $1.0 million after-tax decrease in equity income from our unconsolidated affiliates; and
- a $0.3 million after-tax increase due a portion of the Company’s income from United Tote being recognized as income attributable to a noncontrolling interest.
Conference Call
A conference call regarding this news release is scheduled for Thursday, October 23, 2025 at 8 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 23, 2025. 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; 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 interests.
Adjusted EBITDA excludes, as applicable in each period:
- 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;
- Rivers Des Plaines’ impact on our investments in unconsolidated affiliates from legal reserves and transaction costs;
- Asset impairments, net;
- Gain on property sales;
- Legal reserves;
- Pre-opening expense; and
- Other charges, recoveries, and expenses.
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 created 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 acquisition, development, and operation of live and historical racing entertainment venues, the growth of the online wagering businesses, and the acquisition, development, and operation 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; changes in, or new interpretations of, applicable tax laws or rulings that could result in additional tax liabilities; 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; negative shifts in public opinion regarding gambling that could result in increased regulation of, or new restrictions on, the gaming industry; 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 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; costs of compliance with increasingly complex laws and regulations regarding data privacy and protection of personal information; 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) | 2025 | 2024 | 2025 | 2024 | |||||||||||
| Net revenue: | |||||||||||||||
| Live and Historical Racing | $ | 300.0 | $ | 247.5 | $ | 1,082.4 | $ | 957.3 | |||||||
| Wagering Services and Solutions | 118.0 | 111.3 | 383.3 | 369.6 | |||||||||||
| Gaming | 265.0 | 269.7 | 794.2 | 783.1 | |||||||||||
| All Other | — | — | 0.1 | 0.1 | |||||||||||
| Total net revenue | 683.0 | 628.5 | 2,260.0 | 2,110.1 | |||||||||||
| Operating expense: | |||||||||||||||
| Live and Historical Racing | 205.6 | 171.3 | 651.4 | 549.9 | |||||||||||
| Wagering Services and Solutions | 77.1 | 72.3 | 235.1 | 229.5 | |||||||||||
| Gaming | 191.1 | 194.8 | 574.5 | 561.7 | |||||||||||
| All Other | 4.9 | 4.5 | 13.1 | 10.2 | |||||||||||
| Selling, general and administrative expense | 59.3 | 59.8 | 174.7 | 172.0 | |||||||||||
| Asset impairments, net | 45.1 | 3.9 | 47.5 | 3.9 | |||||||||||
| Transaction expense, net | 1.9 | (4.0 | ) | 3.4 | 0.7 | ||||||||||
| Total operating expense | 585.0 | 502.6 | 1,699.7 | 1,527.9 | |||||||||||
| Operating income | 98.0 | 125.9 | 560.3 | 582.2 | |||||||||||
| Other (expense) income: | |||||||||||||||
| Interest expense, net | (75.6 | ) | (73.1 | ) | (222.1 | ) | (217.0 | ) | |||||||
| Equity in income of unconsolidated affiliates | 35.0 | 33.4 | 105.4 | 108.9 | |||||||||||
| Miscellaneous, net | 3.8 | (0.1 | ) | 5.5 | 8.1 | ||||||||||
| Total other (expense) income | (36.8 | ) | (39.8 | ) | (111.2 | ) | (100.0 | ) | |||||||
| Income from operations before provision for income taxes | 61.2 | 86.1 | 449.1 | 482.2 | |||||||||||
| Income tax provision | (22.0 | ) | (19.9 | ) | (115.1 | ) | (125.4 | ) | |||||||
| Net income | 39.2 | 66.2 | 334.0 | 356.8 | |||||||||||
| Net income attributable to noncontrolling interests | 1.1 | 0.8 | 2.3 | 1.7 | |||||||||||
| Net income and comprehensive income attributable to Churchill Downs Incorporated |
$ | 38.1 | $ | 65.4 | $ | 331.7 | $ | 355.1 | |||||||
| Net income attributable to Churchill Downs Incorporated per common share data: | |||||||||||||||
| Basic net income | $ | 0.54 | $ | 0.87 | $ | 4.59 | $ | 4.78 | |||||||
| Diluted net income | $ | 0.54 | $ | 0.86 | $ | 4.55 | $ | 4.73 | |||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 70.3 | 73.9 | 71.9 | 74.0 | |||||||||||
| Diluted | 71.0 | 74.6 | 72.5 | 74.6 | |||||||||||
| CHURCHILL DOWNS INCORPORATED CONSOLIDATED BALANCE SHEETS (Unaudited) |
|||||||
| (in millions) | September 30, 2025 | December 31, 2024 | |||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 180.5 | $ | 175.5 | |||
| Restricted cash | 88.0 | 77.2 | |||||
| Accounts receivable, net | 89.7 | 98.7 | |||||
| Income taxes receivable | — | 14.5 | |||||
| Other current assets | 56.7 | 46.4 | |||||
| Total current assets | 414.9 | 412.3 | |||||
| Property and equipment, net | 2,925.5 | 2,874.9 | |||||
| Investment in and advances to unconsolidated affiliates | 674.9 | 661.2 | |||||
| Goodwill | 900.2 | 900.2 | |||||
| Other intangible assets, net | 2,517.8 | 2,409.0 | |||||
| Other assets | 21.5 | 18.3 | |||||
| Total assets | $ | 7,454.8 | $ | 7,275.9 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 194.0 | $ | 180.3 | |||
| Accrued expenses and other current liabilities | 411.6 | 402.0 | |||||
| Income taxes payable | 28.0 | — | |||||
| Current deferred revenue | 27.8 | 52.9 | |||||
| Current maturities of long-term debt | 63.1 | 63.1 | |||||
| Dividends payable | 0.7 | 31.0 | |||||
| Total current liabilities | 725.2 | 729.3 | |||||
| Long-term debt, net of current maturities and loan origination fees | 1,963.2 | 1,767.9 | |||||
| Notes payable, net of debt issuance costs | 3,079.9 | 3,076.2 | |||||
| Non-current deferred revenue | 18.5 | 20.0 | |||||
| Deferred income taxes | 490.8 | 432.7 | |||||
| Other liabilities | 98.1 | 146.5 | |||||
| Total liabilities | 6,375.7 | 6,172.6 | |||||
| Commitments and contingencies | |||||||
| Redeemable noncontrolling interest | 44.2 | 19.7 | |||||
| Shareholders’ equity: | |||||||
| Preferred stock | — | — | |||||
| Common stock | — | — | |||||
| Retained earnings | 1,035.9 | 1,084.6 | |||||
| Accumulated other comprehensive loss | (1.0 | ) | (1.0 | ) | |||
| Total Churchill Downs Incorporated shareholders’ equity | 1,034.9 | 1,083.6 | |||||
| Total liabilities and shareholders’ equity | $ | 7,454.8 | $ | 7,275.9 | |||
| CHURCHILL DOWNS INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
|||||||
| Nine Months Ended September 30, | |||||||
| (in millions) | 2025 | 2024 | |||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 334.0 | $ | 356.8 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 173.5 | 145.7 | |||||
| Distributions from unconsolidated affiliates | 91.7 | 113.8 | |||||
| Equity in income of unconsolidated affiliates | (105.4 | ) | (108.9 | ) | |||
| Stock-based compensation | 18.2 | 23.2 | |||||
| Deferred income taxes | 58.1 | 29.6 | |||||
| Asset impairments | 87.5 | 3.9 | |||||
| Gain on settlement of liability | (40.0 | ) | — | ||||
| Amortization of operating lease assets | 4.8 | 4.1 | |||||
| Other | 8.0 | 9.1 | |||||
| Changes in operating assets and liabilities: | |||||||
| Income taxes | 41.6 | 17.1 | |||||
| Deferred revenue | (26.6 | ) | (38.1 | ) | |||
| Other assets and liabilities | 28.4 | 84.8 | |||||
| Net cash provided by operating activities | 673.8 | 641.1 | |||||
| Cash flows from investing activities: | |||||||
| Capital maintenance expenditures | (52.9 | ) | (49.8 | ) | |||
| Capital project expenditures | (171.7 | ) | (367.8 | ) | |||
| Acquisition of gaming rights, net of cash acquired | (185.3 | ) | — | ||||
| Other | (11.5 | ) | 1.8 | ||||
| Net cash used in investing activities | (421.4 | ) | (415.8 | ) | |||
| Cash flows from financing activities: | |||||||
| Proceeds from borrowings under long-term debt obligations | 947.7 | 750.4 | |||||
| Repayments of borrowings under long-term debt obligations | (753.6 | ) | (757.5 | ) | |||
| Payment of dividends | (30.2 | ) | (28.7 | ) | |||
| Repurchase of common stock | (395.8 | ) | (158.7 | ) | |||
| Taxes paid related to net share settlement of stock awards | (4.1 | ) | (10.6 | ) | |||
| Debt issuance costs | (0.3 | ) | (2.5 | ) | |||
| Change in bank overdraft | (1.7 | ) | (7.5 | ) | |||
| Other | 1.4 | (1.6 | ) | ||||
| Net cash used in financing activities | (236.6 | ) | (216.7 | ) | |||
| Cash flows from discontinued operations: | |||||||
| Operating activities of discontinued operations | — | 1.0 | |||||
| Net increase in cash, cash equivalents and restricted cash | 15.8 | 9.6 | |||||
| Cash, cash equivalents and restricted cash, beginning of period | 252.7 | 221.8 | |||||
| Cash, cash equivalents and restricted cash, end of period | $ | 268.5 | $ | 231.4 | |||
| CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL INFORMATION (Unaudited) |
|||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| (in millions, except per common share data) | 2025 | 2024 | 2025 | 2024 | |||||||||||
| GAAP net income attributable to CDI | $ | 38.1 | $ | 65.4 | $ | 331.7 | $ | 355.1 | |||||||
| Adjustments, continuing operations: | |||||||||||||||
| Transaction, pre-opening, and other expense | 7.2 | 4.8 | 20.1 | 25.6 | |||||||||||
| Other charges and recoveries, net | (0.1 | ) | 0.1 | (1.1 | ) | (6.7 | ) | ||||||||
| Asset impairments, net | 45.1 | 3.9 | 47.5 | 3.9 | |||||||||||
| Legal reserves and transaction costs related to Rivers Des Plaines | — | — | — | 0.3 | |||||||||||
| Income tax impact on net income adjustments(a) | (13.2 | ) | (2.1 | ) | (16.7 | ) | (6.3 | ) | |||||||
| Total adjustments | 39.0 | 6.7 | 49.8 | 16.8 | |||||||||||
| Adjusted net income attributable to CDI | $ | 77.1 | $ | 72.1 | $ | 381.5 | $ | 371.9 | |||||||
| Adjusted diluted EPS | $ | 1.09 | $ | 0.97 | $ | 5.26 | $ | 4.99 | |||||||
| Weighted average shares outstanding – Diluted | 71.0 | 74.6 | 72.5 | 74.6 | |||||||||||
(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) | 2025 | 2024 | 2025 | 2024 | |||||||
| Total Handle | |||||||||||
| TwinSpires Horse Racing(a) | $ | 501.7 | $ | 469.1 | $ | 1,568.1 | $ | 1,542.1 | |||
(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) | 2025 | 2024 | 2025 | 2024 | |||||||||||
| Net revenue from external customers: | |||||||||||||||
| Live and Historical Racing: | |||||||||||||||
| Churchill Downs Racetrack | $ | 11.9 | $ | 11.7 | $ | 243.0 | $ | 242.8 | |||||||
| Louisville | 53.9 | 50.3 | 163.3 | 157.1 | |||||||||||
| Northern Kentucky | 26.4 | 23.4 | 84.3 | 73.9 | |||||||||||
| Southwestern Kentucky | 41.6 | 39.3 | 125.5 | 118.1 | |||||||||||
| Western Kentucky | 21.8 | 9.8 | 50.2 | 22.7 | |||||||||||
| Virginia | 139.7 | 110.0 | 405.0 | 333.1 | |||||||||||
| New Hampshire | 4.7 | 3.0 | 11.1 | 9.6 | |||||||||||
| Total Live and Historical Racing | $ | 300.0 | $ | 247.5 | $ | 1,082.4 | $ | 957.3 | |||||||
| Wagering Services and Solutions: | $ | 118.0 | $ | 111.3 | $ | 383.3 | $ | 369.6 | |||||||
| Gaming: | |||||||||||||||
| Florida | $ | 23.4 | $ | 23.8 | $ | 74.0 | $ | 76.4 | |||||||
| Iowa | 23.7 | 22.9 | 70.9 | 69.8 | |||||||||||
| Indiana | 33.3 | 32.4 | 97.5 | 66.3 | |||||||||||
| Louisiana | 26.1 | 32.0 | 102.6 | 113.4 | |||||||||||
| Maine | 28.9 | 27.7 | 80.9 | 81.3 | |||||||||||
| Maryland | 30.5 | 31.5 | 76.9 | 79.3 | |||||||||||
| Mississippi | 22.3 | 23.6 | 71.4 | 74.1 | |||||||||||
| New York | 48.0 | 46.8 | 139.0 | 138.3 | |||||||||||
| Pennsylvania | 28.8 | 29.0 | 81.0 | 84.2 | |||||||||||
| Total Gaming | 265.0 | 269.7 | 794.2 | 783.1 | |||||||||||
| All Other | — | — | 0.1 | 0.1 | |||||||||||
| Net revenue from external customers | $ | 683.0 | $ | 628.5 | $ | 2,260.0 | $ | 2,110.1 | |||||||
| Intercompany net revenues: | |||||||||||||||
| Live and Historical Racing | $ | 5.7 | $ | 4.9 | $ | 40.6 | $ | 34.2 | |||||||
| Wagering Services and Solutions | 9.2 | 7.4 | 28.1 | 23.1 | |||||||||||
| Gaming | 0.5 | 0.6 | 4.8 | 4.8 | |||||||||||
| All Other | 2.2 | 2.6 | 6.4 | 4.4 | |||||||||||
| Eliminations | (17.6 | ) | (15.5 | ) | (79.9 | ) | (66.5 | ) | |||||||
| Intercompany net revenue | $ | — | $ | — | $ | — | $ | — | |||||||
| CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL INFORMATION (Unaudited) |
|||||||||||||||||
| Three Months Ended September 30, 2025 | |||||||||||||||||
| (in millions) | Live and Historical Racing |
Wagering Services and Solutions |
Gaming | Total Segments |
All Other | Total | |||||||||||
| Net revenue from external customers | |||||||||||||||||
| Pari-mutuel: | |||||||||||||||||
| Live and simulcast racing | $ | 16.4 | $ | 86.7 | $ | 5.0 | $ | 108.1 | $ | — | $ | 108.1 | |||||
| Historical racing(a) | 252.6 | — | — | 252.6 | — | 252.6 | |||||||||||
| Racing event-related services | 4.1 | — | 0.1 | 4.2 | — | 4.2 | |||||||||||
| Gaming(a) | 3.4 | 4.7 | 230.3 | 238.4 | — | 238.4 | |||||||||||
| Other(a) | 23.5 | 26.6 | 29.6 | 79.7 | — | 79.7 | |||||||||||
| Total | $ | 300.0 | $ | 118.0 | $ | 265.0 | $ | 683.0 | $ | — | $ | 683.0 | |||||
| Three Months Ended September 30, 2024 | ||||||||||||||||||
| (in millions) | Live and Historical Racing |
Wagering Services and Solutions |
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 | ||||||
(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 $15.2 million for the three months ended September 30, 2025 and $14.2 million for the three months September 30, 2024.
| Nine Months Ended September 30, 2025 | |||||||||||||||||
| (in millions) | Live and Historical Racing |
Wagering Services and Solutions |
Gaming | Total Segments |
All Other | Total | |||||||||||
| Net revenue from external customers | |||||||||||||||||
| Pari-mutuel: | |||||||||||||||||
| Live and simulcast racing | $ | 81.2 | $ | 292.1 | $ | 20.0 | $ | 393.3 | $ | — | $ | 393.3 | |||||
| Historical racing(a) | 741.5 | — | 13.7 | 755.2 | — | 755.2 | |||||||||||
| Racing event-related services | 177.8 | — | 1.0 | 178.8 | — | 178.8 | |||||||||||
| Gaming(a) | 9.7 | 12.6 | 669.8 | 692.1 | — | 692.1 | |||||||||||
| Other(a) | 72.2 | 78.6 | 89.7 | 240.5 | 0.1 | 240.6 | |||||||||||
| Total | $ | 1,082.4 | $ | 383.3 | $ | 794.2 | $ | 2,259.9 | $ | 0.1 | $ | 2,260.0 | |||||
| Nine Months Ended September 30, 2024 | |||||||||||||||||
| (in millions) | Live and Historical Racing |
Wagering Services and Solutions |
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 | |||||
(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 $45.2 million for the six months ended September 30, 2025 and $41.7 million for the six months ended September 30, 2024.
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
Adjusted EBITDA by segment is comprised of the following:
| Three Months Ended September 30, 2025 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing |
Wagering Services and Solutions |
Gaming | Total Segments |
All Other | Eliminations | Total | ||||||||||||||||||||
| Revenues | $ | 305.7 | $ | 127.2 | $ | 265.5 | $ | 698.4 | $ | 2.2 | $ | (17.6 | ) | $ | 683.0 | ||||||||||||
| Pari-mutuel taxes & purses | (79.8 | ) | (6.0 | ) | (6.4 | ) | (92.2 | ) | — | — | (92.2 | ) | |||||||||||||||
| Gaming taxes | (1.8 | ) | (0.6 | ) | (81.7 | ) | (84.1 | ) | — | — | (84.1 | ) | |||||||||||||||
| Marketing & advertising | (13.5 | ) | (1.4 | ) | (9.2 | ) | (24.1 | ) | — | — | (24.1 | ) | |||||||||||||||
| Salaries & benefits | (36.8 | ) | (8.7 | ) | (41.1 | ) | (86.6 | ) | — | — | (86.6 | ) | |||||||||||||||
| Content expense | (1.7 | ) | (48.5 | ) | (2.3 | ) | (52.5 | ) | — | 7.2 | (45.3 | ) | |||||||||||||||
| Selling, general & administrative expense | (10.7 | ) | (3.3 | ) | (10.5 | ) | (24.5 | ) | (22.6 | ) | 0.3 | (46.8 | ) | ||||||||||||||
| Maintenance, insurance & utilities | (11.9 | ) | (1.0 | ) | (10.3 | ) | (23.2 | ) | (2.5 | ) | 2.2 | (23.5 | ) | ||||||||||||||
| Gaming equipment rental & technology costs | (13.4 | ) | (0.7 | ) | (4.4 | ) | (18.5 | ) | — | 7.9 | (10.6 | ) | |||||||||||||||
| Food & beverage costs | (3.6 | ) | — | (4.0 | ) | (7.6 | ) | — | — | (7.6 | ) | ||||||||||||||||
| Other operating expense | (19.8 | ) | (11.0 | ) | (16.8 | ) | (47.6 | ) | (0.5 | ) | — | (48.1 | ) | ||||||||||||||
| Equity in income of unconsolidated affiliates | — | — | 44.5 | 44.5 | — | — | 44.5 | ||||||||||||||||||||
| Other income | 3.7 | — | — | 3.7 | — | — | 3.7 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 116.4 | $ | 46.0 | $ | 123.3 | $ | 285.7 | $ | (23.4 | ) | $ | — | $ | 262.3 | ||||||||||||
| Three Months Ended September 30, 2024 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing |
Wagering Services and Solutions |
Gaming | Total Segments |
All Other | Eliminations | Total | ||||||||||||||||||||
| Revenues | $ | 252.4 | $ | 118.7 | $ | 270.3 | $ | 641.4 | $ | 2.6 | $ | (15.5 | ) | $ | 628.5 | ||||||||||||
| Pari-mutuel taxes & purses | (65.3 | ) | (4.9 | ) | (9.0 | ) | (79.2 | ) | — | — | (79.2 | ) | |||||||||||||||
| Gaming taxes | (1.4 | ) | (0.6 | ) | (78.8 | ) | (80.8 | ) | — | — | (80.8 | ) | |||||||||||||||
| Marketing & advertising | (9.3 | ) | (1.4 | ) | (9.5 | ) | (20.2 | ) | — | — | (20.2 | ) | |||||||||||||||
| Salaries & 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 & administrative expense | (9.4 | ) | (4.2 | ) | (11.9 | ) | (25.5 | ) | (23.1 | ) | 0.2 | (48.4 | ) | ||||||||||||||
| Maintenance, insurance & utilities | (12.8 | ) | (1.1 | ) | (11.7 | ) | (25.6 | ) | (2.6 | ) | 2.6 | (25.6 | ) | ||||||||||||||
| Gaming equipment rental & technology costs | (9.9 | ) | (0.9 | ) | (3.9 | ) | (14.7 | ) | — | 18.5 | 3.8 | ||||||||||||||||
| Food & beverage costs | (2.4 | ) | — | (4.3 | ) | (6.7 | ) | — | — | (6.7 | ) | ||||||||||||||||
| Other operating expense | (16.2 | ) | (9.2 | ) | (16.9 | ) | (42.3 | ) | (0.3 | ) | (12.3 | ) | (54.9 | ) | |||||||||||||
| Equity in income of unconsolidated affiliates | — | — | 44.0 | 44.0 | — | — | 44.0 | ||||||||||||||||||||
| Other income | 0.1 | — | — | 0.1 | (0.1 | ) | — | — | |||||||||||||||||||
| Adjusted EBITDA | $ | 93.0 | $ | 42.5 | $ | 123.3 | $ | 258.8 | $ | (23.5 | ) | $ | — | $ | 235.3 | ||||||||||||
| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing |
Wagering Services and Solutions |
Gaming | Total Segments |
All Other | Eliminations | Total | ||||||||||||||||||||
| Revenues | $ | 1,123.0 | $ | 411.4 | $ | 799.0 | $ | 2,333.4 | $ | 6.5 | $ | (79.9 | ) | $ | 2,260.0 | ||||||||||||
| Pari-mutuel taxes & purses | (267.5 | ) | (18.1 | ) | (28.5 | ) | (314.1 | ) | — | — | (314.1 | ) | |||||||||||||||
| Gaming taxes | (4.7 | ) | (1.5 | ) | (234.1 | ) | (240.3 | ) | — | — | (240.3 | ) | |||||||||||||||
| Marketing & advertising | (43.0 | ) | (8.0 | ) | (26.2 | ) | (77.2 | ) | (0.1 | ) | — | (77.3 | ) | ||||||||||||||
| Salaries & benefits | (106.5 | ) | (25.8 | ) | (128.1 | ) | (260.4 | ) | — | — | (260.4 | ) | |||||||||||||||
| Content expense | (5.0 | ) | (169.1 | ) | (6.7 | ) | (180.8 | ) | — | 48.9 | (131.9 | ) | |||||||||||||||
| Selling, general & administrative expense | (32.0 | ) | (13.2 | ) | (32.2 | ) | (77.4 | ) | (65.1 | ) | 0.9 | (141.6 | ) | ||||||||||||||
| Maintenance, insurance & utilities | (33.5 | ) | (3.0 | ) | (29.5 | ) | (66.0 | ) | (6.8 | ) | 6.4 | (66.4 | ) | ||||||||||||||
| Gaming equipment rental & technology costs | (37.8 | ) | (2.2 | ) | (13.0 | ) | (53.0 | ) | — | 23.5 | (29.5 | ) | |||||||||||||||
| Food & beverage costs | (11.1 | ) | — | (12.3 | ) | (23.4 | ) | — | — | (23.4 | ) | ||||||||||||||||
| Other operating expense | (70.8 | ) | (35.2 | ) | (49.3 | ) | (155.3 | ) | (0.5 | ) | 0.2 | (155.6 | ) | ||||||||||||||
| Equity in income of unconsolidated affiliates | — | — | 134.4 | 134.4 | — | — | 134.4 | ||||||||||||||||||||
| Other income | 3.8 | — | 0.6 | 4.4 | — | — | 4.4 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 514.9 | $ | 135.3 | $ | 374.1 | $ | 1,024.3 | $ | (66.0 | ) | $ | — | $ | 958.3 | ||||||||||||
| Nine Months Ended September 30, 2024 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing |
Wagering Services and Solutions |
Gaming | Total Segments |
All Other | Eliminations | Total | ||||||||||||||||||||
| Revenues | $ | 991.5 | $ | 392.7 | $ | 787.9 | $ | 2,172.1 | $ | 4.5 | $ | (66.5 | ) | $ | 2,110.1 | ||||||||||||
| Pari-mutuel taxes & purses | (227.3 | ) | (15.8 | ) | (32.7 | ) | (275.8 | ) | — | — | (275.8 | ) | |||||||||||||||
| Gaming taxes | (4.4 | ) | (1.9 | ) | (219.1 | ) | (225.4 | ) | — | — | (225.4 | ) | |||||||||||||||
| Marketing & advertising | (31.1 | ) | (7.5 | ) | (26.5 | ) | (65.1 | ) | (0.1 | ) | — | (65.2 | ) | ||||||||||||||
| Salaries & 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 & administrative expense | (26.7 | ) | (13.0 | ) | (33.9 | ) | (73.6 | ) | (64.7 | ) | 0.8 | (137.5 | ) | ||||||||||||||
| Maintenance, insurance & utilities | (34.6 | ) | (3.1 | ) | (32.4 | ) | (70.1 | ) | (4.6 | ) | 4.4 | (70.3 | ) | ||||||||||||||
| Gaming equipment rental & technology costs | (30.5 | ) | (2.6 | ) | (11.4 | ) | (44.5 | ) | — | 18.5 | (26.0 | ) | |||||||||||||||
| Food & beverage costs | (8.8 | ) | — | (12.4 | ) | (21.2 | ) | — | — | (21.2 | ) | ||||||||||||||||
| Other operating expense | (55.9 | ) | (33.4 | ) | (46.7 | ) | (136.0 | ) | (0.6 | ) | 0.2 | (136.4 | ) | ||||||||||||||
| Equity in income of unconsolidated affiliates | — | — | 139.9 | 139.9 | — | — | 139.9 | ||||||||||||||||||||
| Other income | 0.3 | — | 1.8 | 2.1 | — | — | 2.1 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 473.0 | $ | 128.3 | $ | 386.8 | $ | 988.1 | $ | (65.5 | ) | $ | — | $ | 922.6 | ||||||||||||
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| (in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||
| Reconciliation of Comprehensive Income to Adjusted EBITDA: | |||||||||||||||
| Net income and comprehensive income attributable to Churchill Downs Incorporated | $ | 38.1 | $ | 65.4 | $ | 331.7 | $ | 355.1 | |||||||
| Net income attributable to noncontrolling interests | 1.1 | 0.8 | 2.3 | 1.7 | |||||||||||
| Net income | 39.2 | 66.2 | 334.0 | 356.8 | |||||||||||
| Adjustments: | |||||||||||||||
| Depreciation and amortization | 56.5 | 49.6 | 173.5 | 145.7 | |||||||||||
| Interest expense | 75.6 | 73.1 | 222.1 | 217.0 | |||||||||||
| Income tax provision | 22.0 | 19.9 | 115.1 | 125.4 | |||||||||||
| Stock-based compensation expense | 7.4 | 7.1 | 18.2 | 23.2 | |||||||||||
| Pre-opening expense | 2.4 | 7.8 | 9.0 | 23.6 | |||||||||||
| Other expenses, net | 2.9 | 1.0 | 7.7 | 1.3 | |||||||||||
| Asset impairments, net | 45.1 | 3.9 | 47.5 | 3.9 | |||||||||||
| Transaction expense, net | 1.9 | (4.0 | ) | 3.4 | 0.7 | ||||||||||
| Other income, expense: | |||||||||||||||
| Interest, depreciation and amortization expense related to equity investments | 9.4 | 10.6 | 28.9 | 31.4 | |||||||||||
| Rivers Des Plaines’ legal reserves and transaction costs | — | — | — | 0.3 | |||||||||||
| Other charges and recoveries, net | (0.1 | ) | 0.1 | (1.1 | ) | (6.7 | ) | ||||||||
| Total adjustments | 223.1 | 169.1 | 624.3 | 565.8 | |||||||||||
| Adjusted EBITDA | $ | 262.3 | $ | 235.3 | $ | 958.3 | $ | 922.6 | |||||||
| Adjusted EBITDA by segment: | |||||||||||||||
| Live and Historical Racing | $ | 116.4 | $ | 93.0 | $ | 514.9 | $ | 473.0 | |||||||
| Wagering Services and Solutions | 46.0 | 42.5 | 135.3 | 128.3 | |||||||||||
| Gaming | 123.3 | 123.3 | 374.1 | 386.8 | |||||||||||
| Total segment Adjusted EBITDA | 285.7 | 258.8 | 1,024.3 | 988.1 | |||||||||||
| All Other | (23.4 | ) | (23.5 | ) | (66.0 | ) | (65.5 | ) | |||||||
| Total Adjusted EBITDA | $ | 262.3 | $ | 235.3 | $ | 958.3 | $ | 922.6 | |||||||
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) | 2025 | 2024 | 2025 | 2024 | |||||||||||
| Net revenue | $ | 210.6 | $ | 208.4 | $ | 631.9 | $ | 641.2 | |||||||
| Operating and SG&A expense | 133.2 | 132.2 | 398.3 | 399.3 | |||||||||||
| Depreciation and amortization | 5.8 | 6.8 | 17.9 | 20.1 | |||||||||||
| Operating income | 71.6 | 69.4 | 215.7 | 221.8 | |||||||||||
| Interest and other expense, net | (10.3 | ) | (11.1 | ) | (31.2 | ) | (33.5 | ) | |||||||
| Net income | $ | 61.3 | $ | 58.3 | $ | 184.5 | $ | 188.3 | |||||||
| Summarized Balance Sheet | |||||||
| (in millions) | September 30, 2025 | December 31, 2024 | |||||
| Assets | |||||||
| Current assets | $ | 106.9 | $ | 100.5 | |||
| Property and equipment, net | 319.4 | 325.6 | |||||
| Other assets, net | 265.3 | 267.5 | |||||
| Total assets | $ | 691.6 | $ | 693.6 | |||
| Liabilities and Members’ Deficit | |||||||
| Current liabilities | $ | 114.6 | $ | 89.9 | |||
| Long-term debt | 794.1 | 839.8 | |||||
| Other liabilities | 0.5 | 1.7 | |||||
| Members’ deficit | (217.6 | ) | (237.8 | ) | |||
| Total liabilities and members’ deficit | $ | 691.6 | $ | 693.6 | |||
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
Planned capital projects for the Company are as follows:
| (in millions) | Project | Target Completion | 2025 Planned Spend |
|
| Live and Historical Racing Segment | ||||
| Churchill Downs Racetrack | Starting Gate Pavilion and Courtyard | Completed | $55-60 | |
| Finish Line Suites / The Mansion | April 2026 | $5 | ||
| Victory Run | April 2028 | $0-5 | ||
| Virginia | Richmond (HRM Expansion) | Completed | $20-25 | |
| Henrico (Roseshire – HRM Venue) | Completed | $25-30 | ||
| Southwestern Kentucky | Calvert City (Marshall Yards Racing and Gaming – HRM Venue) | First Quarter 2026 | $20-25 | |
| New Hampshire | Casino Salem | 2027 | $5-10 | |
| All Other Projects | ||||
| All Other | All Other | TBD | $70-80 | |
| Total: | $200-240 | |||
Contact: Sam Ullrich
(502) 638-3906
[email protected]
Nasdaq:CHDN
Churchill Downs Incorporated 2025 Third Quarter Financial Results Conference Call Invitation
LOUISVILLE, Ky., Sept. 15, 2025 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (“CDI” or “the Company”) announced today that the Company will release third quarter 2025 financial results after the market closes on Wednesday, October 22, 2025, and host a related conference call to discuss the quarter on Thursday, October 23, 2025, at 8 a.m. ET.
Investors and other interested parties may listen to the call 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 encouraged to dial-in 15 minutes prior to the start time. An online replay of the call will be available at http://ir.churchilldownsincorporated.com/events.cfm by noon ET on Thursday, October 23, 2025.
A copy of CDI’s news release announcing quarterly results and relevant financial and statistical information about the period will be accessible at http://www.churchilldownsincorporated.com.
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 acquisition, development, and operation of live and historical racing entertainment venues, the growth of online wagering businesses, and the acquisition, development, and operation of regional casino gaming properties. www.churchilldownsincorporated.com
Investor Contact: Sam Ullrich
(502) 638-3906
[email protected]
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