Nasdaq:CHDN
Churchill Downs Incorporated Reports 2022 Fourth Quarter and Full Year Results
LOUISVILLE, Ky., Feb. 22, 2023 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (Nasdaq: CHDN) (the “Company”, “CDI”) today reported business results for the quarter and full year ended December 31, 2022.
Company Highlights
- Record 2022 net revenue of $1,809.8 million, up 13% compared to $1,597.2 million in the prior year
- Record 2022 net income of $439.4 million, up 76% compared to $249.1 million in the prior year
- Record 2022 Adjusted EBITDA of $763.6 million, up 22% compared to $627.0 million in the prior year
- We successfully ran the 148th Kentucky Derby on the first Saturday in May generating record Adjusted EBITDA
- We completed the acquisition of substantially all the assets of Peninsula Pacific Entertainment LLC with a purchase price of $2.75 billion on November 1, 2022 (“P2E Transaction”)
- We completed the acquisition of Chasers Poker Room in Salem, New Hampshire on September 2, 2022, which will enable the Company to expand its historical racing machine (“HRM”) strategy with table games to the New England market (“Chasers Transaction”)
- We completed the acquisition of Ellis Park Racing & Gaming on September 26, 2022, which includes the rights to build a HRM entertainment venue in Owensboro, Kentucky (“Ellis Park Transaction”)
- We closed the sale of the excess Calder land for $291.0 million on June 17, 2022
- We closed the sale of our Arlington Heights, Illinois property to the Chicago Bears for $197.2 million on February 15, 2023
| CONSOLIDATED RESULTS |
| Fourth Quarter | Years Ended December 31, | ||||||||||
| (in millions, except per share data) | 2022 | 2021 | 2022 | 2021 | |||||||
| Net revenue | $ | 480.1 | $ | 364.8 | $ | 1,809.8 | $ | 1,597.2 | |||
| Net income | $ | 1.0 | $ | 43.3 | $ | 439.4 | $ | 249.1 | |||
| Diluted EPS | $ | 0.03 | $ | 1.11 | $ | 11.42 | $ | 6.35 | |||
| Adjusted EBITDA(a) | $ | 180.7 | $ | 127.0 | $ | 763.6 | $ | 627.0 | |||
| (a) This is a non-GAAP measure. See explanation of non-GAAP measures below. | |||||||||||
| SEGMENT RESULTS |
During the first quarter of 2022, we updated our operating segments to include the results of our United Tote business in the TwinSpires segment. Results of our United Tote business were previously included in our All Other segment. During the fourth quarter of 2022, we also updated our operating segments to reflect the geographies in which we operate. The summaries below present net revenue from external customers and intercompany revenue from each of our reportable segments.
Live and Historical Racing
| Fourth Quarter | Years Ended December 31, | ||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||
| Net revenue | $ | 180.9 | $ | 93.9 | $ | 646.4 | $ | 430.6 | |||
| Adjusted EBITDA | 61.2 | 30.6 | 287.5 | 175.0 | |||||||
Fourth Quarter 2022
- Net revenue for the fourth quarter of 2022 increased $87.0 million from the prior year quarter primarily due to $62.4 million in revenue attributable to the Virginia properties acquired in the P2E Transaction, $6.9 million in revenue attributable to properties acquired in the Ellis Park and Chasers Transactions, and a $17.7 million increase driven primarily by continued growth at our Oak Grove property and the opening of Turfway Park in September 2022.
- Adjusted EBITDA for the fourth quarter of 2022 increased $30.6 million from the prior year quarter primarily due to a $30.1 million increase attributable to the Virginia properties acquired in the P2E Transaction and a $0.5 million increase attributable to the Chasers Transaction. Adjusted EBITDA growth from our Oak Grove property was offset by a decrease from Turfway Park associated with its first quarter of operation and from Derby City Gaming due to disruption from construction associated with the gaming floor and hotel expansion.
Total Year 2022
- Net revenue for 2022 increased $215.8 million primarily due to $62.4 million in revenue attributable to the Virginia properties acquired in the P2E Transaction, $8.0 million in revenue attributable to properties acquired in the Ellis Park and Chasers Transactions, $77.6 million in increased revenue at Churchill Downs Racetrack primarily due to the running of the 2022 Kentucky Derby without capacity restrictions that were in place in 2021, and a $67.8 million increase driven primarily by growth at our Oak Grove property and at Derby City Gaming as well as the opening of Turfway Park in September 2022.
- Adjusted EBITDA for 2022 increased $112.5 million due to a $30.1 million increase attributable to the Virginia properties acquired in the P2E Transaction, a $0.7 million increase attributable to properties acquired in the Ellis Park and Chasers Transactions, a $59.1 million increase at Churchill Downs Racetrack primarily due to the running of the 2022 Kentucky Derby without capacity restrictions that were in place in 2021, and a $22.6 million increase primarily due to the continued growth at our Oak Grove property and at Derby City Gaming.
TwinSpires
| Fourth Quarter | Years Ended December 31, | ||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||
| Net revenue | $ | 94.3 | $ | 101.2 | $ | 441.6 | $ | 457.8 | |||
| Adjusted EBITDA | 25.0 | 12.9 | 114.1 | 82.7 | |||||||
Fourth Quarter 2022
- Net revenue for the fourth quarter of 2022 decreased $6.9 million from the prior year quarter primarily due to the decision to exit the direct online Sports and Casino business in the first quarter of 2022 and due to a decline in Horse Racing wagering.
- Adjusted EBITDA for the fourth quarter of 2022 increased $12.1 million from the prior year quarter due to a $14.3 million increase from our Sports and Casino business primarily due to decreased marketing and promotional activities and a $2.2 million decrease attributable to lower Horse Racing net revenue.
Total Year 2022
- Net revenue decreased $16.2 million primarily due to a decrease in pari-mutuel handle as a higher portion of our patrons returned to wagering at brick-and-mortar facilities instead of wagering online and the decision to exit the direct online Sports and Casino business in the first quarter of 2022.
- Adjusted EBITDA for 2022 increased $31.4 million primarily due to a $40.0 million increase from our Sports and Casino business primarily due to decreased marketing and promotional activities and an $8.6 million decrease attributable to lower Horse Racing net revenue.
Gaming
| Fourth Quarter | Years Ended December 31, | ||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||
| Net revenue | $ | 212.2 | $ | 172.8 | $ | 761.8 | $ | 698.4 | |||
| Adjusted EBITDA | 112.4 | 99.0 | 421.9 | 411.9 | |||||||
Fourth Quarter 2022
- Net revenue for the fourth quarter of 2022 increased $39.4 million from the prior year quarter primarily due to $46.5 million attributable to the New York and Iowa properties acquired in the P2E Transaction and a $7.1 million decrease from seven of our existing wholly-owned properties in five states that was partially offset by growth at our Ocean Downs property in Maryland.
- Adjusted EBITDA for the fourth quarter of 2022 increased $13.4 million from the prior year quarter driven by a $17.9 million increase attributable to the New York and Iowa properties acquired as part of the P2E Transaction, a $1.2 million increase from our equity investments, and a $5.7 million decrease at our existing wholly-owned properties.
Total Year 2022
- Net revenue increased $63.4 million primarily due to $46.5 million attributable to our New York and Iowa properties acquired in the P2E Transaction, $25.5 million in Maine, Florida, and Maryland as a result of certain capacity restrictions during the first half of 2021 and a $9.7 million increase in Louisiana as a result of the 2022 Jazz Festival that was not held in the prior year due to COVID-19 and shutdowns in 2021 due to Hurricane Ida that did not recur. Partially offsetting these increases was a decrease of $18.3 million primarily from our Mississippi and Pennsylvania properties due to the current economic conditions.
- Adjusted EBITDA for 2022 increased $10.0 million driven by a $17.9 million increase in New York and Iowa from the properties acquired as part of the P2E Transaction, an $11.6 million increase primarily from our properties in Maine, Florida, and Louisiana as a result of capacity restrictions in 2021 that did not recur, and a $2.8 million increase from our equity investments. Partially offsetting these increases was a decrease of $22.3 million primarily from our Mississippi and Pennsylvania properties due to the current economic conditions.
All Other
| Fourth Quarter | Years Ended December 31, | ||||||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Net revenue | $ | 1.1 | $ | 4.2 | $ | 3.3 | $ | 49.2 | |||||||
| Adjusted EBITDA | (17.9 | ) | (15.5 | ) | (59.9 | ) | (42.6 | ) | |||||||
Fourth Quarter 2022
- Net revenue for the fourth quarter of 2022 decreased $3.1 million from the prior year quarter primarily as a result of Arlington International Racecourse (“Arlington”) ceasing racing and simulcast operations at the end of 2021.
- Adjusted EBITDA for the fourth quarter of 2022 decreased $2.4 million from the prior year quarter due to a $3.8 million increase in Corporate compensation related expenses driven by enterprise growth and increased legal fees that was partially offset by the elimination of the $1.4 million operating loss related to Arlington.
Total Year 2022
- Net revenue for 2022 decreased $45.9 million primarily as a result of Arlington ceasing racing and simulcast operations at the end of 2021.
- Adjusted EBITDA for 2022 decreased $17.3 million primarily due to the elimination of the $9.7 million operating income related to Arlington as a result of ceasing racing and simulcast operations at the end of 2021 and a $7.6 million increase in Corporate compensation related expenses, legal fees, and charitable donations.
| ACQUISITION / DISPOSITION UPDATE |
Peninsula Pacific Entertainment LLC Acquisition:
On November 1, 2022, the Company completed the acquisition of substantially all the assets of Peninsula Pacific Entertainment LLC (“P2E”) with a base purchase price of $2.75 billion subject to working capital and other purchase price adjustments. The P2E assets acquired included Colonial Downs Racetrack and six HRM entertainment venues in Virginia, del Lago Resort & Casino in New York, and Hard Rock Hotel & Casino in Iowa, as well as the development rights for two properties currently under development in Dumfries and Emporia, Virginia with up to five additional HRM entertainment venues, and ONE Casino & Resort in collaboration with Urban One.
Exacta Systems, LLC Acquisition:
On December 19, 2022, the Company announced that it entered into a definitive agreement under which we would acquire all the outstanding equity interests of Exacta Systems, LLC for total consideration of $250.0 million in cash, subject to certain working capital and other purchase price adjustments. This transaction will provide the Company the ability to realize synergies related to the Company’s recent acquisition of the HRM entertainment venues in Virginia.
| CAPITAL MANAGEMENT |
Share Repurchase Program
The Company repurchased 146,724 shares of its common stock at an average share price of approximately $204.44 based on trade date in conjunction with its publicly announced share repurchase program at a total cost of $30.0 million in the fourth quarter of 2022. The Company repurchased 873,922 shares of its common stock at an average share price of approximately $200.78 based on trade date in conjunction with its publicly announced share repurchase program at a total cost of $175.5 million in 2022. We had $270.2 million of repurchase authority remaining under this program on December 31, 2022.
Annual Dividend
On October 25, 2022, the Company’s Board of Directors approved an annual cash dividend on the Company’s common stock of $0.714 per outstanding share, a 7% increase over the prior year. The dividend was payable on January 6, 2023 to shareholders of record as of the close of business on December 2, 2022, with the aggregate cash dividend paid to each shareholder rounded to the nearest whole cent. The 7% increase marks the twelfth consecutive year that the Company has increased the dividend.
Capital Investments
We currently expect our project capital to be approximately $575 to $675 million in 2023, although this amount may vary significantly based on the timing of work completed, unanticipated delays, and timing of payments to third parties. We plan to use our operating cash flows, cash on hand, and the proceeds from our land sales to fund our capital project expenditures.
Term Loan A Increase
CDI has received commitments to increase our existing term loan A due 2027 from $800 million to $1,300 million and to make certain other changes to its existing credit agreement. The interest rate applicable to such increased loans will be SOFR-based plus a spread, determined by our total net leverage ratio. Closing on our term loan A increase is subject to finalizing documentation, approvals from certain gaming regulators and satisfaction of closing conditions, which is planned to take place within the next week. We intend to use proceeds from the term loan A increase to repay outstanding borrowings under our revolving credit facility.
| NET INCOME |
Fourth Quarter 2022 Results
The Company’s fourth quarter 2022 net income was $1.0 million compared to $43.3 million in the prior year quarter.
The following items impacted the comparability of the Company’s fourth quarter net income:
- $22.2 million increase in non-cash after-tax increase in asset impairments at Presque Isle;
- $23.3 million after-tax increase in expenses related to transaction, pre-opening and other expenses, net;
- $3.6 million after-tax reduction in the benefit related to our equity portion of the non-cash change in the fair value of Rivers Des Plaines’ interest rate swaps; and
- $0.4 million after-tax increase in legal reserves.
Partially offset by:
- $1.0 million after-tax decrease in expenses related to our equity portion of Rivers Des Plaines’ legal reserves and transaction costs that did not occur in the current year quarter.
Excluding the items above, fourth quarter 2022 adjusted net income increased $6.3 million primarily due to the following:
- $29.5 million after-tax increase from the prior year quarter driven by the results of our operations and equity income from our unconsolidated affiliates; and
- Partially offset by $23.2 million after-tax increase from the prior year quarter in interest expense associated with higher outstanding debt balances.
Full Year 2022 Results
The Company’s 2022 net income attributable to Churchill Downs Incorporated was $439.4 million compared to $249.1 million in the prior year.
The following items impacted the comparability of the Company’s full year net income from continuing operations:
- $198.7 million after tax gain on the sale of Calder assets; and
- $6.5 million after tax decrease in expense related to Rivers Des Plaines’ legal reserves and transaction costs.
Partially offset by:
- $35.5 million after-tax increase in expenses related to transaction, pre-opening and other expenses, net;
- $17.8 million non-cash after-tax increase in asset impairments;
- $2.8 million after-tax increase in legal reserves; and
- $0.7 million of other charges.
Excluding these items, 2022 net income from continuing operations increased $41.8 million compared to the prior year primarily due to the following:
- $63.5 million after-tax increase driven by the results of our operations and equity in income from our unconsolidated affiliates;
- Partially offset by a $21.7 million after-tax increase in interest expense associated with higher outstanding debt balances.
Conference Call
A conference call regarding this news release is scheduled for Thursday, February 23, 2023 at 9 a.m. ET. Investors and other interested parties may listen to the teleconference by accessing the online, real-time webcast and broadcast of the call at http://ir.churchilldownsincorporated.com/events.cfm, or by registering in advance via teleconference here. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are encouraged to dial-in 15 minutes prior to the start time. An online replay will be available by noon ET on Thursday, February 23, 2023. 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 is 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. See the Reconciliation of Comprehensive Income to Adjusted EBITDA included herewith for additional information.
About Churchill Downs Incorporated
Churchill Downs Incorporated (NASDAQ: CHDN) has been creating extraordinary entertainment experiences for nearly 150 years, beginning with the company’s most iconic and enduring asset, the Kentucky Derby. Headquartered in Louisville, Kentucky, CDI has expanded through the development of live and historical racing entertainment venues, the growth of the TwinSpires horse racing online wagering business and the operation and development of regional casino gaming properties. More information is available at http://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 occurrence of extraordinary events, such as terrorist attacks, public health threats, civil unrest, and inclement weather, including as a result of climate change; the effect of economic conditions on our consumers’ confidence and discretionary spending or our access to credit, including the impact of inflation; additional or increased taxes and fees; the impact of 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; lack of confidence in the integrity of our core businesses or any deterioration in our reputation; loss of key or highly skilled personnel, as well as disruptions in the general labor market; the impact of significant competition, and the expectation the 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 HRM manufacturing or other technology conditions that could impose additional costs; failure to enter into or maintain agreements with industry constituents, including horsemen and other racetracks; inability to successfully focus on market access and retail operations for our TwinSpires Sports and Casino 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; reliance on our technology services and catastrophic events and system failures disrupting our operations; 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; 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 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.
Contact: Nick Zangari
(502) 394-1157
[email protected]
CHURCHILL DOWNS INCORPORATED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited except year ended 2022 and 2021 amounts)
| Three Months Ended December 31, |
Years Ended December 31, |
||||||||||||||
| (in millions, except per common share data) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Net revenue: | |||||||||||||||
| Live and Historical Racing | $ | 175.4 | $ | 90.3 | $ | 614.6 | $ | 409.1 | |||||||
| TwinSpires | 93.1 | 99.6 | 436.4 | 451.4 | |||||||||||
| Gaming | 210.9 | 172.1 | 755.9 | 695.4 | |||||||||||
| All Other | 0.7 | 2.8 | 2.9 | 41.3 | |||||||||||
| Total net revenue | 480.1 | 364.8 | 1,809.8 | 1,597.2 | |||||||||||
| Operating expense: | |||||||||||||||
| Live and Historical Racing | 131.7 | 71.6 | 400.9 | 288.9 | |||||||||||
| TwinSpires | 64.0 | 83.2 | 293.6 | 345.8 | |||||||||||
| Gaming | 150.9 | 121.3 | 537.9 | 476.3 | |||||||||||
| All Other | 2.2 | 5.3 | 11.0 | 40.1 | |||||||||||
| Selling, general and administrative expense | 51.5 | 38.8 | 164.2 | 138.5 | |||||||||||
| Asset impairments | 33.4 | 4.1 | 38.3 | 15.3 | |||||||||||
| Transaction expense | 34.7 | 5.8 | 42.1 | 7.9 | |||||||||||
| Total operating expense | 468.4 | 330.1 | 1,488.0 | 1,312.8 | |||||||||||
| Operating income | 11.7 | 34.7 | 321.8 | 284.4 | |||||||||||
| Other income (expense): | |||||||||||||||
| Interest expense, net | (54.7 | ) | (21.6 | ) | (147.3 | ) | (84.7 | ) | |||||||
| Equity in income of unconsolidated affiliates | 37.3 | 40.2 | 152.7 | 143.2 | |||||||||||
| Gain on Calder land sale | — | — | 274.6 | — | |||||||||||
| Miscellaneous, net | 2.6 | 0.4 | 7.0 | 0.7 | |||||||||||
| Total other (expense) income | (14.8 | ) | 19.0 | 287.0 | 59.2 | ||||||||||
| Income from continuing operations before provision for income taxes | (3.1 | ) | 53.7 | 608.8 | 343.6 | ||||||||||
| Income tax benefit (provision) | 4.1 | (10.4 | ) | (169.4 | ) | (94.5 | ) | ||||||||
| Net income | $ | 1.0 | $ | 43.3 | $ | 439.4 | $ | 249.1 | |||||||
| Net income per common share – basic | $ | 0.03 | $ | 1.13 | $ | 11.58 | $ | 6.45 | |||||||
| Net income per common share – diluted | $ | 0.03 | $ | 1.11 | $ | 11.42 | $ | 6.35 | |||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 37.6 | 38.3 | 37.9 | 38.6 | |||||||||||
| Diluted | 38.1 | 39.0 | 38.5 | 39.2 | |||||||||||
CHURCHILL DOWNS INCORPORATED
CONSOLIDATED BALANCE SHEETS
December 31,
| (in millions) | 2022 | 2021 | |||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 129.8 | $ | 291.3 | |||
| Restricted cash | 74.9 | 64.3 | |||||
| Accounts receivable, net | 81.5 | 42.3 | |||||
| Income taxes receivable | 14.0 | 66.0 | |||||
| Other current assets | 44.3 | 37.6 | |||||
| Total current assets | 344.5 | 501.5 | |||||
| Property and equipment, net | 1,978.3 | 994.9 | |||||
| Investment in and advances to unconsolidated affiliates | 659.4 | 663.6 | |||||
| Goodwill | 723.8 | 366.8 | |||||
| Other intangible assets, net | 2,391.8 | 348.1 | |||||
| Other assets | 27.0 | 18.9 | |||||
| Long term assets held for sale | 82.0 | 87.8 | |||||
| Total assets | $ | 6,206.8 | $ | 2,981.6 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 145.5 | $ | 81.6 | |||
| Accrued expenses and other current liabilities | 361.0 | 231.7 | |||||
| Income taxes payable | 2.1 | 0.9 | |||||
| Current deferred revenue | 39.0 | 47.7 | |||||
| Current maturities of long-term debt | 47.0 | 7.0 | |||||
| Dividends payable | 27.0 | 26.1 | |||||
| Total current liabilities | 621.6 | 395.0 | |||||
| Long-term debt (net of current maturities and loan origination fees of $10.2 in 2022 and $6.2 in 2021) | 2,081.6 | 668.6 | |||||
| Notes payable (net of debt issuance costs of $22.9 in 2022 and $7.6 in 2021) | 2,477.1 | 1,292.4 | |||||
| Non-current deferred revenue | 11.8 | 13.3 | |||||
| Deferred income taxes | 340.8 | 252.9 | |||||
| Other liabilities | 122.4 | 52.6 | |||||
| Total liabilities | 5,655.3 | 2,674.8 | |||||
| Commitments and contingencies | |||||||
| Shareholders’ equity: | |||||||
| Preferred stock, no par value; 0.3 shares authorized; no shares issued or outstanding | — | — | |||||
| Common stock, no par value; 150.0 shares authorized; 37.4 shares issued and outstanding December 31, 2022 and 38.1 shares at December 31, 2021 | — | — | |||||
| Retained earnings | 552.4 | 307.7 | |||||
| Accumulated other comprehensive loss | (0.9 | ) | (0.9 | ) | |||
| Total shareholders’ equity | 551.5 | 306.8 | |||||
| Total liabilities and shareholders’ equity | $ | 6,206.8 | $ | 2,981.6 | |||
CHURCHILL DOWNS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended December 31,
| (in millions) | 2022 | 2021 | |||||
| Cash flows from operating activities: | |||||||
| Net income | $ | 439.4 | $ | 249.1 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 113.7 | 103.2 | |||||
| Equity in income of unconsolidated affiliates | (152.7 | ) | (143.2 | ) | |||
| Distributions from unconsolidated affiliates | 156.9 | 109.4 | |||||
| Stock-based compensation | 31.8 | 27.8 | |||||
| Deferred income taxes | 108.7 | 9.8 | |||||
| Asset impairments | 38.3 | 15.3 | |||||
| Amortization of operating lease assets | 5.3 | 5.3 | |||||
| Gain on Calder land sale | (274.6 | ) | — | ||||
| Other | 7.4 | 5.3 | |||||
| Changes in operating assets and liabilities, net of businesses acquired and dispositions: | |||||||
| Income taxes | 28.2 | 12.9 | |||||
| Deferred revenue | (12.7 | ) | 10.7 | ||||
| Other assets and liabilities | 21.1 | 53.9 | |||||
| Net cash provided by operating activities | 510.8 | 459.5 | |||||
| Cash flows from investing activities: | |||||||
| Capital maintenance expenditures | (50.2 | ) | (39.5 | ) | |||
| Capital project expenditures | (373.3 | ) | (52.3 | ) | |||
| Acquisition of businesses, net of cash acquired | (2,918.5 | ) | — | ||||
| Acquisition of gaming rights, net of cash acquired | (33.3 | ) | — | ||||
| Proceeds from the Calder land sale | 279.0 | — | |||||
| Other | (7.4 | ) | (8.6 | ) | |||
| Net cash used in investing activities | (3,103.7 | ) | (100.4 | ) | |||
| Cash flows from financing activities: | |||||||
| Proceeds from borrowings under long-term debt obligations | 2,862.4 | 780.8 | |||||
| Repayments of borrowings under long-term debt obligations | (205.4 | ) | (430.9 | ) | |||
| Payment of dividends | (26.0 | ) | (24.8 | ) | |||
| Repurchase of common stock | (174.9 | ) | (297.5 | ) | |||
| Cash settlement of stock awards | — | — | |||||
| Taxes paid related to net share settlement of stock awards | (28.4 | ) | (12.9 | ) | |||
| Debt issuance costs | (27.3 | ) | (6.9 | ) | |||
| Change in bank overdraft | 13.3 | (10.5 | ) | ||||
| Other | 2.3 | 2.2 | |||||
| Net cash provided by (used in) financing activities | 2,416.0 | (0.5 | ) | ||||
| Cash flows from discontinued operations: | |||||||
| Operating cash flows of discontinued operations | 26.0 | (124.0 | ) | ||||
| Net (decrease) increase in cash, cash equivalents and restricted cash | (150.9 | ) | 234.6 | ||||
| Cash, cash equivalents and restricted cash, beginning of year | 355.6 | 121.0 | |||||
| Cash, cash equivalents and restricted cash, end of year | $ | 204.7 | $ | 355.6 | |||
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(unaudited)
| Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| GAAP net income | $ | 1.0 | $ | 43.3 | $ | 439.4 | $ | 249.1 | |||||||
| Adjustments, continuing operations: | |||||||||||||||
| Changes in fair value of interest rate swaps related to Rivers Des Plaines | — | (4.9 | ) | (12.6 | ) | (12.9 | ) | ||||||||
| Legal reserves and transaction costs related to Rivers Des Plaines | — | 1.3 | 0.6 | 9.9 | |||||||||||
| Other charges | — | — | 1.0 | — | |||||||||||
| Transaction, pre-opening and other expense | 40.7 | 7.8 | 62.7 | 13.9 | |||||||||||
| Legal reserves | 0.6 | — | 3.8 | — | |||||||||||
| Asset impairments | 33.4 | 4.1 | 38.3 | 15.3 | |||||||||||
| Gain on Calder land sale | — | — | (274.6 | ) | — | ||||||||||
| Income tax impact on net income adjustments(a) | (19.9 | ) | (2.2 | ) | 51.2 | (7.3 | ) | ||||||||
| Total adjustments | 54.8 | 6.1 | (129.6 | ) | 18.9 | ||||||||||
| Adjusted net income | $ | 55.8 | $ | 49.4 | $ | 309.8 | $ | 268.0 | |||||||
| Adjusted diluted EPS | $ | 1.46 | $ | 1.27 | $ | 8.05 | $ | 6.83 | |||||||
| Weighted average shares outstanding – Diluted | 38.1 | 39.0 | 38.5 | 39.2 | |||||||||||
| (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 December 31, | Years Ended December 31, | ||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||
| Total Handle | |||||||||||
| Churchill Downs Racetrack | $ | 148.5 | $ | 147.5 | $ | 893.8 | $ | 732.0 | |||
| TwinSpires Horse Racing | 431.0 | 416.4 | 1,958.6 | 1,961.8 | |||||||
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(unaudited except year ended 2022 and 2021 amounts)
| Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Net revenue from external customers: | |||||||||||||||
| Live and Historical Racing: | |||||||||||||||
| Churchill Downs Racetrack | $ | 14.2 | $ | 13.5 | $ | 196.8 | $ | 128.1 | |||||||
| Louisville | 41.4 | 41.3 | 169.9 | 154.3 | |||||||||||
| Northern Kentucky | 16.9 | 6.9 | 46.1 | 26.0 | |||||||||||
| Southwestern Kentucky | 33.6 | 28.6 | 131.4 | 100.7 | |||||||||||
| Western Kentucky | 4.3 | — | 4.5 | — | |||||||||||
| Virginia | 62.4 | — | 62.4 | — | |||||||||||
| New Hampshire | 2.6 | — | 3.5 | — | |||||||||||
| Total Live and Historical Racing | 175.4 | 90.3 | 614.6 | 409.1 | |||||||||||
| TwinSpires: | 93.1 | 99.6 | 436.4 | 451.4 | |||||||||||
| Gaming: | |||||||||||||||
| Florida | 25.0 | 25.8 | 106.2 | 100.0 | |||||||||||
| Iowa | 15.6 | — | 15.6 | — | |||||||||||
| Louisiana | 33.6 | 35.4 | 140.8 | 133.6 | |||||||||||
| Maine | 26.6 | 27.7 | 114.4 | 99.8 | |||||||||||
| Maryland | 23.3 | 21.9 | 105.3 | 100.6 | |||||||||||
| Mississippi | 23.8 | 26.1 | 101.8 | 117.3 | |||||||||||
| New York | 30.9 | — | 30.9 | — | |||||||||||
| Pennsylvania | 32.1 | 35.2 | 140.9 | 144.1 | |||||||||||
| Total Gaming | 210.9 | 172.1 | 755.9 | 695.4 | |||||||||||
| All Other | 0.7 | 2.8 | 2.9 | 41.3 | |||||||||||
| Net revenue from external customers | $ | 480.1 | $ | 364.8 | $ | 1,809.8 | $ | 1,597.2 | |||||||
| Intercompany net revenues: | |||||||||||||||
| Live and Historical Racing | $ | 5.5 | $ | 3.6 | $ | 31.8 | $ | 21.5 | |||||||
| TwinSpires | 1.2 | 1.6 | 5.2 | 6.4 | |||||||||||
| Gaming | 1.3 | 0.7 | 5.9 | 3.0 | |||||||||||
| All Other | 0.4 | 1.4 | 0.4 | 7.9 | |||||||||||
| Eliminations | (8.4 | ) | (7.3 | ) | (43.3 | ) | (38.8 | ) | |||||||
| Intercompany net revenue | $ | — | $ | — | $ | — | $ | — | |||||||
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(unaudited except year ended 2022 and 2021 amounts)
| Three Months Ended December 31, 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 | $ | 12.9 | $ | 76.5 | $ | 6.1 | $ | 95.5 | $ | — | $ | 95.5 | |||||
| Historical racing(a) | 143.4 | — | 5.0 | 148.4 | — | 148.4 | |||||||||||
| Racing event-related services | 4.4 | — | 1.1 | 5.5 | — | 5.5 | |||||||||||
| Gaming(a) | 2.6 | 6.4 | 177.8 | 186.8 | — | 186.8 | |||||||||||
| Other(a) | 12.1 | 10.2 | 20.9 | 43.2 | 0.7 | 43.9 | |||||||||||
| Total | $ | 175.4 | $ | 93.1 | $ | 210.9 | $ | 479.4 | $ | 0.7 | $ | 480.1 | |||||
| Three Months Ended December 31, 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 | $ | 13.1 | $ | 80.5 | $ | 7.2 | $ | 100.8 | $ | 2.5 | $ | 103.3 | |||||
| Historical racing(a) | 69.0 | — | — | 69.0 | — | 69.0 | |||||||||||
| Racing event-related services | 3.2 | — | 0.2 | 3.4 | 0.1 | 3.5 | |||||||||||
| Gaming(a) | — | 10.7 | 152.7 | 163.4 | — | 163.4 | |||||||||||
| Other(a) | 5.0 | 8.4 | 12.0 | 25.4 | 0.2 | 25.6 | |||||||||||
| Total | $ | 90.3 | $ | 99.6 | $ | 172.1 | $ | 362.0 | $ | 2.8 | $ | 364.8 | |||||
| (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 $10.7 million for the three months ended December 31, 2022 and $5.9 million for the three months ended December 31, 2021. |
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(unaudited except year ended 2022 and 2021 amounts)
| Year Ended December 31, 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 | $ | 66.8 | $ | 367.4 | $ | 28.1 | $ | 462.3 | $ | — | $ | 462.3 | |||||
| Historical racing(a) | 374.1 | — | 9.8 | 383.9 | — | 383.9 | |||||||||||
| Racing event-related services | 129.8 | — | 1.8 | 131.6 | — | 131.6 | |||||||||||
| Gaming(a) | 3.5 | 28.2 | 647.4 | 679.1 | — | 679.1 | |||||||||||
| Other(a) | 40.4 | 40.8 | 68.8 | 150.0 | 2.9 | 152.9 | |||||||||||
| Total | $ | 614.6 | $ | 436.4 | $ | 755.9 | $ | 1,806.9 | $ | 2.9 | $ | 1,809.8 | |||||
| Year Ended December 31, 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 | $ | 64.0 | $ | 380.7 | $ | 28.2 | $ | 472.9 | $ | 29.7 | $ | 502.6 | |||||
| Historical racing(a) | 253.0 | — | — | 253.0 | — | 253.0 | |||||||||||
| Racing event-related services | 68.5 | — | 1.2 | 69.7 | 7.0 | 76.7 | |||||||||||
| Gaming(a) | — | 34.8 | 622.0 | 656.8 | — | 656.8 | |||||||||||
| Other(a) | 23.6 | 35.9 | 44.0 | 103.5 | 4.6 | 108.1 | |||||||||||
| Total | $ | 409.1 | $ | 451.4 | $ | 695.4 | $ | 1,555.9 | $ | 41.3 | $ | 1,597.2 | |||||
| (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 $33.9 million in 2022 and $20.9 million in 2021. |
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(unaudited except year ended 2022 and 2021 amounts)
Adjusted EBITDA by segment is comprised of the following:
| Three Months Ended December 31, 2022 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other(a) |
Eliminations | Total | ||||||||||||||||||||
| Net revenue | $ | 180.9 | $ | 94.3 | $ | 212.2 | $ | 487.4 | $ | 0.4 | $ | (8.4 | ) | $ | 479.4 | ||||||||||||
| Taxes and purses | (50.6 | ) | (5.7 | ) | (72.0 | ) | (128.3 | ) | — | — | (128.3 | ) | |||||||||||||||
| Marketing and advertising | (6.9 | ) | (1.6 | ) | (7.6 | ) | (16.1 | ) | — | 0.2 | (15.9 | ) | |||||||||||||||
| Salaries and benefits | (20.3 | ) | (6.9 | ) | (30.7 | ) | (57.9 | ) | — | — | (57.9 | ) | |||||||||||||||
| Content expenses | (1.2 | ) | (42.8 | ) | (1.9 | ) | (45.9 | ) | — | 7.7 | (38.2 | ) | |||||||||||||||
| Selling, general, and administrative expense | (8.9 | ) | (1.8 | ) | (10.9 | ) | (21.6 | ) | (18.2 | ) | 0.2 | (39.6 | ) | ||||||||||||||
| Other operating expense | (31.9 | ) | (10.6 | ) | (27.6 | ) | (70.1 | ) | (0.1 | ) | 0.3 | (69.9 | ) | ||||||||||||||
| Other income | 0.1 | 0.1 | 50.9 | 51.1 | — | — | 51.1 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 61.2 | $ | 25.0 | $ | 112.4 | $ | 198.6 | $ | (17.9 | ) | $ | — | $ | 180.7 | ||||||||||||
| Three Months Ended December 31, 2021 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other |
Eliminations | Total | ||||||||||||||||||||
| Net revenue | $ | 93.9 | $ | 101.2 | $ | 172.8 | $ | 367.9 | $ | 4.2 | $ | (7.3 | ) | $ | 364.8 | ||||||||||||
| Taxes & purses | (30.9 | ) | (8.0 | ) | (63.3 | ) | (102.2 | ) | (1.2 | ) | — | (103.4 | ) | ||||||||||||||
| Marketing and advertising | (3.0 | ) | (13.6 | ) | (4.3 | ) | (20.9 | ) | (0.1 | ) | 0.1 | (20.9 | ) | ||||||||||||||
| Salaries and benefits | (12.2 | ) | (7.0 | ) | (24.1 | ) | (43.3 | ) | (1.2 | ) | — | (44.5 | ) | ||||||||||||||
| Content expenses | (0.6 | ) | (44.5 | ) | (1.2 | ) | (46.3 | ) | (1.2 | ) | 6.7 | (40.8 | ) | ||||||||||||||
| Selling, general, and administrative expense | (3.6 | ) | (2.9 | ) | (8.9 | ) | (15.4 | ) | (14.9 | ) | 0.4 | (29.9 | ) | ||||||||||||||
| Other operating expense | (13.2 | ) | (12.3 | ) | (19.4 | ) | (44.9 | ) | (1.4 | ) | 0.2 | (46.1 | ) | ||||||||||||||
| Other income | 0.2 | — | 47.4 | 47.6 | 0.3 | (0.1 | ) | 47.8 | |||||||||||||||||||
| Adjusted EBITDA | $ | 30.6 | $ | 12.9 | $ | 99.0 | $ | 142.5 | $ | (15.5 | ) | $ | — | $ | 127.0 | ||||||||||||
| (a) | The revenue and expenses associated with the Adjusted EBITDA for All Other excludes the results of Arlington. |
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(unaudited except year ended 2022 and 2021 amounts)
Adjusted EBITDA by segment is comprised of the following:
| Year Ended December 31, 2022 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other(a) |
Eliminations | Total | ||||||||||||||||||||
| Net revenue | $ | 646.4 | $ | 441.6 | $ | 761.8 | $ | 1,849.8 | $ | 0.8 | $ | (43.3 | ) | $ | 1,807.3 | ||||||||||||
| Taxes & purses | (168.6 | ) | (27.0 | ) | (278.1 | ) | (473.7 | ) | — | — | (473.7 | ) | |||||||||||||||
| Marketing and advertising | (19.8 | ) | (13.0 | ) | (18.9 | ) | (51.7 | ) | (0.2 | ) | 0.2 | (51.7 | ) | ||||||||||||||
| Salaries and benefits | (63.4 | ) | (26.8 | ) | (102.7 | ) | (192.9 | ) | — | — | (192.9 | ) | |||||||||||||||
| Content expenses | (3.4 | ) | (203.3 | ) | (8.3 | ) | (215.0 | ) | — | 41.4 | (173.6 | ) | |||||||||||||||
| Selling, general, and administrative expense | (18.6 | ) | (9.7 | ) | (31.3 | ) | (59.6 | ) | (60.1 | ) | 1.3 | (118.4 | ) | ||||||||||||||
| Other operating expense | (85.5 | ) | (47.8 | ) | (91.5 | ) | (224.8 | ) | (0.5 | ) | 0.4 | (224.9 | ) | ||||||||||||||
| Other income | 0.4 | 0.1 | 190.9 | 191.4 | 0.1 | — | 191.5 | ||||||||||||||||||||
| Adjusted EBITDA | $ | 287.5 | $ | 114.1 | $ | 421.9 | $ | 823.5 | $ | (59.9 | ) | $ | — | $ | 763.6 | ||||||||||||
| Year Ended December 31, 2021 | |||||||||||||||||||||||||||
| (in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other |
Eliminations | Total | ||||||||||||||||||||
| Net revenue | $ | 430.6 | $ | 457.8 | $ | 698.4 | $ | 1,586.8 | $ | 49.2 | $ | (38.8 | ) | $ | 1,597.2 | ||||||||||||
| Taxes & purses | (126.3 | ) | (30.7 | ) | (264.4 | ) | (421.4 | ) | (13.1 | ) | — | (434.5 | ) | ||||||||||||||
| Marketing and advertising | (12.9 | ) | (49.4 | ) | (11.8 | ) | (74.1 | ) | (0.5 | ) | 0.1 | (74.5 | ) | ||||||||||||||
| Salaries and benefits | (48.4 | ) | (27.0 | ) | (87.1 | ) | (162.5 | ) | (7.8 | ) | — | (170.3 | ) | ||||||||||||||
| Content expenses | (2.5 | ) | (206.6 | ) | (4.7 | ) | (213.8 | ) | (5.7 | ) | 36.9 | (182.6 | ) | ||||||||||||||
| Selling, general, and administrative expense | (12.8 | ) | (11.0 | ) | (27.9 | ) | (51.7 | ) | (55.2 | ) | 1.5 | (105.4 | ) | ||||||||||||||
| Other operating expense | (53.0 | ) | (50.4 | ) | (72.3 | ) | (175.7 | ) | (10.0 | ) | 0.4 | (185.3 | ) | ||||||||||||||
| Other income | 0.3 | — | 181.7 | 182.0 | 0.5 | (0.1 | ) | 182.4 | |||||||||||||||||||
| Adjusted EBITDA | $ | 175.0 | $ | 82.7 | $ | 411.9 | $ | 669.6 | $ | (42.6 | ) | $ | — | $ | 627.0 | ||||||||||||
| (a) | The revenue and expenses associated with the Adjusted EBITDA for All Other excludes the results of Arlington. |
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(unaudited except year ended 2022 and 2021 amounts)
| Three Months Ended December 31, |
Years Ended December 31, |
||||||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Net income and comprehensive income | $ | 1.0 | $ | 43.3 | $ | 439.4 | $ | 249.1 | |||||||
| Additions: | |||||||||||||||
| Depreciation and amortization | 35.0 | 25.3 | 113.7 | 103.2 | |||||||||||
| Interest expense | 54.7 | 21.6 | 147.3 | 84.7 | |||||||||||
| Income tax (benefit) provision | (4.1 | ) | 10.4 | 169.4 | 94.5 | ||||||||||
| EBITDA | $ | 86.6 | $ | 100.6 | $ | 869.8 | $ | 531.5 | |||||||
| Adjustments to EBITDA: | |||||||||||||||
| Selling, general and administrative: | |||||||||||||||
| Stock-based compensation expense | $ | 8.3 | $ | 7.4 | $ | 31.8 | $ | 27.8 | |||||||
| Legal reserves | 0.6 | — | 3.8 | — | |||||||||||
| Other charges | 1.7 | — | 7.4 | 0.2 | |||||||||||
| Pre-opening expense and other expense | 4.3 | 2.0 | 13.2 | 5.8 | |||||||||||
| Other income, expense: | |||||||||||||||
| Interest, depreciation and amortization expense related to equity investments | 11.1 | 10.7 | 42.8 | 41.5 | |||||||||||
| Changes in fair value of Rivers Des Plaines’ interest rate swaps | — | (4.9 | ) | (12.6 | ) | (12.9 | ) | ||||||||
| Rivers Des Plaines’ legal reserves and transaction costs | — | 1.3 | 0.6 | 9.9 | |||||||||||
| Other charges and recoveries, net | — | — | 1.0 | — | |||||||||||
| Gain on Calder land sale | — | — | (274.6 | ) | — | ||||||||||
| Transaction expense, net | 34.7 | 5.8 | 42.1 | 7.9 | |||||||||||
| Asset impairments | 33.4 | 4.1 | 38.3 | 15.3 | |||||||||||
| Total adjustments to EBITDA | 94.1 | 26.4 | (106.2 | ) | 95.5 | ||||||||||
| Adjusted EBITDA | $ | 180.7 | $ | 127.0 | $ | 763.6 | $ | 627.0 | |||||||
| Adjusted EBITDA by segment: | |||||||||||||||
| Live and Historical Racing | $ | 61.2 | $ | 30.6 | $ | 287.5 | $ | 175.0 | |||||||
| TwinSpires | 25.0 | 12.9 | 114.1 | 82.7 | |||||||||||
| Gaming | 112.4 | 99.0 | 421.9 | 411.9 | |||||||||||
| Total segment Adjusted EBITDA | 198.6 | 142.5 | 823.5 | 669.6 | |||||||||||
| All Other | (17.9 | ) | (15.5 | ) | (59.9 | ) | (42.6 | ) | |||||||
| Total Adjusted EBITDA | $ | 180.7 | $ | 127.0 | $ | 763.6 | $ | 627.0 | |||||||
CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL JOINT VENTURE FINANCIAL STATEMENTS
(Unaudited)
Summarized financial information for our equity investments is comprised of the following:
| Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||
| Net revenue | $ | 212.2 | $ | 201.0 | $ | 825.5 | $ | 740.0 | |||||||
| Operating and SG&A expense | 128.7 | 123.6 | 509.1 | 434.2 | |||||||||||
| Depreciation and amortization | 8.3 | 4.5 | 25.8 | 17.6 | |||||||||||
| Operating income | 75.2 | 72.9 | 290.6 | 288.2 | |||||||||||
| Interest and other expense, net | (11.0 | ) | (3.9 | ) | (24.8 | ) | (38.6 | ) | |||||||
| Net income | $ | 64.2 | $ | 69.0 | $ | 265.8 | $ | 249.6 | |||||||
| December 31, | |||||||
| (in millions) | 2022 | 2021 | |||||
| Assets | |||||||
| Current assets | $ | 91.0 | $ | 96.0 | |||
| Property and equipment, net | 345.7 | 312.3 | |||||
| Other assets, net | 265.0 | 264.1 | |||||
| Total assets | $ | 701.7 | $ | 672.4 | |||
| Liabilities and Members’ Deficit | |||||||
| Current liabilities | $ | 97.9 | $ | 95.3 | |||
| Long-term debt | 838.6 | 786.9 | |||||
| Other liabilities | 0.2 | 20.6 | |||||
| Members’ deficit | (235.0 | ) | (230.4 | ) | |||
| Total liabilities and members’ deficit | $ | 701.7 | $ | 672.4 | |||
CHURCHILL DOWNS INCORPORATED
PLANNED CAPITAL PROJECTS
(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 | First Turn Experience | May 2023 | $90 | |
| Paddock Project | May 2024 | $185 – $200 | ||
| Derby City Gaming | Expansion and Hotel | Late 2022 / Second Quarter 2023 | $80 | |
| Derby City Gaming Downtown | Property Build Out | Second Half 2023 | $90 | |
| Rosie’s Emporia HRM Entertainment Venue | Property Build Out | Third Quarter 2023 | $30 | |
| Ellis Park and Owensboro Annex | Property Build Out | 2024 | $75 | |
| Dumfries Project | Property Build Out | 2024 | $400 | |
| New Hampshire HRM Facility | Property Build Out | 2024 | Up to $150 | |
| Gaming Segment | ||||
| Fair Grounds and VSI | HRMs in OTBs | 2023 | $35 | |
| Terre Haute Casino Resort | Property Build Out | Early 2024 | Up to $290 | |
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Kentucky Derby to be Presented on NBC and Peacock through 2032
LOUISVILLE, Ky., May 04, 2024 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (Nasdaq: CHDN) (“CDI”) announced today that NBC Sports will continue to host the Kentucky Derby on NBC and Peacock through 2032. CDI’s partnership with NBC Sports began in 2001. This multi-year partnership extension will make NBC the first media company to present the most prestigious event in horse racing for over three decades.
“As we celebrate the 150th running of the Kentucky Derby, Churchill Downs is proud to extend the relationship with NBC Sports,” said Churchill Downs CEO Bill Carstanjen. “As our media partner for the last 23 years, NBC has artfully captured the most exciting two minutes in sports and the spectacle of the senses that surrounds it.”
“Telling the rich stories surrounding the Kentucky Derby on the first Saturday in May is part of the fabric of NBC Sports, and we are thrilled to continue that tradition with Churchill Downs,” said Rick Cordella, President, NBC Sports. “We look forward to surrounding the Kentucky Oaks and Kentucky Derby with wall-to-wall coverage and extensive promotion on the platforms of NBCUniversal.”
The extension includes multiplatform rights to the Kentucky Derby, Kentucky Oaks, and Derby and Oaks Day programming, which will be presented on NBC, Peacock, USA Network and additional NBCU platforms.
About Churchill Downs Incorporated
Churchill Downs Incorporated (“CDI”) (Nasdaq: CHDN) has been creating extraordinary entertainment experiences for nearly 150 years, beginning with the company’s most iconic and enduring asset, the Kentucky Derby. Headquartered in Louisville, Kentucky, CDI has expanded through the development of live and historical racing entertainment venues, the growth of the TwinSpires horse racing online wagering business and the operation and development of regional casino gaming properties. www.churchilldownsincorporated.com
This news release contains various “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “seek,” “should,” “will,” “scheduled,” and similar words or similar expressions (or negative versions of such words or expressions), although some forward-looking statements are expressed differently.
Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors, that could cause actual results to differ materially from expectations include the following: the occurrence of extraordinary events, such as terrorist attacks, public health threats, civil unrest, and inclement weather, including as a result of climate change; the effect of economic conditions on our consumers’ confidence and discretionary spending or our access to credit, including the impact of inflation; additional or increased taxes and fees; the impact of any pandemics, epidemics, or outbreaks of infectious diseases, including possible new variants of COVID-19, and related economic matters on our results of operations, financial conditions and prospects; lack of confidence in the integrity of our core businesses or any deterioration in our reputation; loss of key or highly skilled personnel, as well as general disruptions in the general labor market; the impact of significant competition, and the expectation that competition levels will increase; changes in consumer preferences, attendance, wagering, and sponsorships; risks associated with equity investments, strategic alliances and other third-party agreements; inability to respond to rapid technological changes in a timely manner; concentration and evolution of slot machine and historical racing machine (HRM) manufacturing and other technology conditions that could impose additional costs; failure to enter into or maintain agreements with industry constituents, including horsemen and other racetracks; inability to successfully focus on market access and retail operations for our TwinSpires sports betting business and effectively compete; online security risk, including cyber-security breaches, or loss or misuse of our stored information as a result of a breach including customers’ personal information could lead to government enforcement actions or other litigation; reliance on our technology services and catastrophic events and system failures disrupting our operations; inability to identify, complete, or fully realize the benefits of our proposed acquisitions, divestitures, development of new venues or the expansion of existing facilities on time, on budget, or as planned; difficulty in integrating recent or future acquisitions into our operations; cost overruns and other uncertainties associated with the development of new venues and the expansion of existing facilities; general risks related to real estate ownership and significant expenditures, including risks related to environmental liabilities; personal injury litigation related to injuries occurring at our racetracks; compliance with the Foreign Corrupt Practices Act or other similar laws and regulations, or applicable anti-money laundering regulations; payment-related risks, such as risk associated with fraudulent credit card or debit card use; work stoppages and labor problems; risks related to pending or future legal proceedings and other actions; highly regulated operations and changes in the regulatory environment could adversely affect our business; restrictions in our debt facilities limiting our flexibility to operate our business; failure to comply with the financial ratios and other covenants in our debt facilities and other indebtedness; increases to interest rates (due to inflation or otherwise), disruption in the credit markets or changes to our credit ratings may adversely affect our business; increase in our insurance costs, or inability to obtain similar insurance coverage in the future, and any inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events; and other factors described under the heading “Risk Factors” in our most recent Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission.
We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
| Investor Contact: Kaitlin Buzzetto | Media Contact: Tonya Abeln | |
| (502) 394-1091 | (502) 386-1742 | |
| [email protected] | [email protected] | |
Nasdaq:CHDN
Mystik Dan Wins the Historic 150th Running of the Kentucky Derby Presented by Woodford Reserve
New All-Time Handle Record Set for the Kentucky Derby Race, Kentucky Derby Day Program, and Kentucky Derby Week Races
LOUISVILLE, Ky., May 04, 2024 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (Nasdaq: CHDN) (the “Company”, “CDI”) announced today that a jubilant crowd of nearly 157,000 Derby fans gathered at Churchill Downs Racetrack (“Churchill Downs”) to celebrate and witness Mystik Dan claim the Garland of Roses at the 150th running of the Kentucky Derby presented by Woodford Reserve at 18-1 odds under mostly cloudy skies. Wagering from all sources was the highest all-time on the Kentucky Derby race, the Kentucky Derby Day program, and Kentucky Derby Week races.
Mystik Dan, owned by 4 G Racing, LLC (Brent Gasaway), Lance Gasaway, Daniel Hamby, III, and Valley View Farm, LLC (Scott Hamby), trained by Kenneth McPeek, bred in Kentucky by Lance Gasaway, Daniel Hamby, and 4 G Racing, LLC, and ridden by Brian Hernandez Jr., rallied from off the pace to win by a nose in a photo finish. Mystik Dan covered the mile and a quarter in 2:03.34 over a fast track. This marks an extraordinary weekend of racing for trainer Kenneth McPeek and jockey Brian Hernandez Jr. who scored victories in both the Kentucky Oaks and Kentucky Derby.
Wagering from all sources on the Kentucky Derby Day program set a new record of $320.5 million, beating last year’s record of $288.7 million. All-sources wagering on the Kentucky Derby race was a new record of $210.7 million, beating the previous record of $188.7 million set in 2023. All-sources handle for Derby Week rose to a new record of $446.6 million, beating last year’s record of $412.0 million.
TwinSpires, the official betting partner of the Kentucky Derby, handled a new record of $92.1 million in wagering on Churchill Downs races for the Kentucky Derby Day program, compared to last year’s record of $75.5, including all settled future wagers and affiliate wagering. TwinSpires’ handle on the Kentucky Derby race was a new record of $60.9 million, beating last year’s record of $48.9 million, including all settled future wagers and affiliate wagering.
The Kentucky Derby race continued to attract global attention with two starters from Japan with Forever Young finishing third and T O Password finishing fifth. Forever Young was the winner of the UAE Derby in Dubai and T O Password qualified through the Japan Road to the Derby. All-sources wagering from Japan on the Kentucky Derby race was a new record of $10.1 million, beating the previous record of $8.3 million in 2022.
CDI debuted the all-new Paddock with two new luxury reserved seating areas – The Woodford Reserve Paddock Club and Sports Illustrated’s Club SI. These luxury reserved seating areas offer customers an opportunity to view horses as they are saddled in the paddock and experience the thrill of the races from the rail of the racetrack.
“The Kentucky Derby is a testament to the enduring spirit of sportsmanship, unity and the power of tradition. We were honored to debut our transformational new Paddock as we celebrated this milestone 150th Run for the Roses. The new Paddock has fundamentally enhanced the experience of all of our guests as they pass through our front gates and is a stepping stone to the next chapter of this time-honored event,” said Bill Carstanjen, CEO of CDI. “We expect the Kentucky Derby Week Adjusted EBITDA to reflect a new record with $26 to $28 million of growth over the prior record set last year. As we reflect on 150 years of our storied past, we remain committed to innovating new experiences for Derby fans.”
Use of Non-GAAP Measures
In addition to the results provided in accordance with GAAP, the Company also uses non-GAAP measures, including adjusted net income, adjusted diluted EPS, EBITDA (earnings before interest, taxes, depreciation and amortization), and Adjusted EBITDA.
The Company uses non-GAAP measures as a key performance measure of the results of operations for purposes of evaluating performance internally. These measures facilitate comparison of operating performance between periods and help investors to better understand the operating results of the Company by excluding certain items that may not be indicative of the Company’s core business or operating results. The Company believes the use of these measures enables management and investors to evaluate and compare, from period to period, the Company’s operating performance in a meaningful and consistent manner. The non-GAAP measures are a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP, and should not be considered as an alternative to, or more meaningful than, net income or diluted EPS (as determined in accordance with GAAP) as a measure of our operating results.
We use Adjusted EBITDA to evaluate segment performance, develop strategy, and allocate resources. We utilize the Adjusted EBITDA metric to provide a more accurate measure of our core operating results and enable management and investors to evaluate and compare from period to period our operating performance in a meaningful and consistent manner. Adjusted EBITDA should not be considered as an alternative to operating income as an indicator of performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure provided in accordance with GAAP. Our calculation of Adjusted EBITDA may be different from the calculation used by other companies and, therefore, comparability may be limited.
Adjusted net income and adjusted diluted EPS exclude discontinued operations net income or loss; net income or loss attributable to noncontrolling interest; changes in fair value for interest rate swaps related to Rivers Des Plaines; Rivers Des Plaines’ legal reserves and transaction costs; transaction expense, which includes acquisition and disposition related charges, as well as legal, accounting, and other deal-related expense; pre-opening expense; and certain other gains, charges, recoveries, and expenses.
Adjusted EBITDA includes our portion of EBITDA from our equity investments.
Adjusted EBITDA excludes:
- Transaction expense, net which includes:
- Acquisition, disposition, and property sale related charges;
- Other transaction expense, including legal, accounting, and other deal-related expense;
- Stock-based compensation expense;
- Asset impairments;
- Gain on property sales;
- Legal reserves;
- Pre-opening expense; and
- Other charges, recoveries, and expenses.
About Churchill Downs Incorporated
Churchill Downs Incorporated (“CDI”) (Nasdaq: CHDN) has been creating extraordinary entertainment experiences for nearly 150 years, beginning with the company’s most iconic and enduring asset, the Kentucky Derby. Headquartered in Louisville, Kentucky, CDI has expanded through the development of live and historical racing entertainment venues, the growth of the TwinSpires horse racing online wagering business and the operation and development of regional casino gaming properties. www.churchilldownsincorporated.com
This news release contains various “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “seek,” “should,” “will,” “scheduled,” and similar words or similar expressions (or negative versions of such words or expressions), although some forward-looking statements are expressed differently.
Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors, that could cause actual results to differ materially from expectations include the following: the occurrence of extraordinary events, such as terrorist attacks, public health threats, civil unrest, and inclement weather, including as a result of climate change; the effect of economic conditions on our consumers’ confidence and discretionary spending or our access to credit, including the impact of inflation; additional or increased taxes and fees; the impact of any pandemics, epidemics, or outbreaks of infectious diseases, including possible new variants of COVID-19, and related economic matters on our results of operations, financial conditions and prospects; lack of confidence in the integrity of our core businesses or any deterioration in our reputation; loss of key or highly skilled personnel, as well as general disruptions in the general labor market; the impact of significant competition, and the expectation that competition levels will increase; changes in consumer preferences, attendance, wagering, and sponsorships; risks associated with equity investments, strategic alliances and other third-party agreements; inability to respond to rapid technological changes in a timely manner; concentration and evolution of slot machine and historical racing machine (HRM) manufacturing and other technology conditions that could impose additional costs; failure to enter into or maintain agreements with industry constituents, including horsemen and other racetracks; inability to successfully focus on market access and retail operations for our TwinSpires sports betting business and effectively compete; online security risk, including cyber-security breaches, or loss or misuse of our stored information as a result of a breach including customers’ personal information could lead to government enforcement actions or other litigation; reliance on our technology services and catastrophic events and system failures disrupting our operations; inability to identify, complete, or fully realize the benefits of our proposed acquisitions, divestitures, development of new venues or the expansion of existing facilities on time, on budget, or as planned; difficulty in integrating recent or future acquisitions into our operations; cost overruns and other uncertainties associated with the development of new venues and the expansion of existing facilities; general risks related to real estate ownership and significant expenditures, including risks related to environmental liabilities; personal injury litigation related to injuries occurring at our racetracks; compliance with the Foreign Corrupt Practices Act or other similar laws and regulations, or applicable anti-money laundering regulations; payment-related risks, such as risk associated with fraudulent credit card or debit card use; work stoppages and labor problems; risks related to pending or future legal proceedings and other actions; highly regulated operations and changes in the regulatory environment could adversely affect our business; restrictions in our debt facilities limiting our flexibility to operate our business; failure to comply with the financial ratios and other covenants in our debt facilities and other indebtedness; increases to interest rates (due to inflation or otherwise), disruption in the credit markets or changes to our credit ratings may adversely affect our business; increase in our insurance costs, or inability to obtain similar insurance coverage in the future, and any inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events; and other factors described under the heading “Risk Factors” in our most recent Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission.
We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
| Investor Contact: Kaitlin Buzzetto | Media Contact: Tonya Abeln | |
| (502) 394-1091 | (502) 386-1742 | |
| [email protected] | [email protected] | |
Kentucky Oaks Day Record Handle
LOUISVILLE, KY., May 03, 2024 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (Nasdaq: CHDN) (the “Company”, “CDI”, “we”) announced a new Kentucky Oaks Day handle record at Churchill Downs Racetrack as Thorpedo Anna captured the Lilies in the 150th running of the Longines Kentucky Oaks. Even under cloudy skies, 107,236 enthusiastic race goers gathered to watch America’s premier race for 3-year-old fillies.
Wagering from all sources on the full Kentucky Oaks race day card set a new record of $75.3 million, eclipsing last year’s record of $74.9 million despite inclement weather and a persistently sloppy track. All-sources wagering on the Kentucky Oaks race was $21.7 million, down 3% from last year.
Thorpedo Anna, owned by Brookdale Racing, Mark Edwards, breeder Judy Hicks and Magdalena Racing, trained by Kenny McPeek and ridden by Brian Hernandez Jr., sped to the finish line to win the Longines Kentucky Oaks by 4 ¾ lengths at odds of 4-1 and with a final time of 1:50.83. It is the first Oaks victory for the owners, trainer and jockey. The Kentucky-bred filly, sired by Fast Anna, now has lifetime earnings of $1.4 million bolstered by the newly increased Longines Kentucky Oaks purse.
“Congratulations to the connections of Thorpedo Anna on today’s win,” said Churchill Downs President Mike Anderson. “The 150th Kentucky Oaks will be remembered as a historic day as we celebrate our deep-rooted traditions with our fans, sponsors, horsemen and horseplayers.”
CDI continued using Kentucky Oaks as a platform to raise money for women’s health initiatives and welcomed 150 breast and ovarian cancer survivors to walk the historic racetrack prior to the running of Longines Kentucky Oaks for the 16th annual Survivors Parade. This year’s moving tradition was emphasized by a live performance during the Kentucky Oaks Survivors Parade as emerging country star Lana Scott thrilled the crowd with two original songs, sending a message of hope, courage, and strength to 150 fighters and survivors.
Churchill Downs’ Oaks charitable beneficiaries were Derby Divas representing the Norton Cancer Institute and Horses and Hope representing the Kentucky Cancer Program. Since its inception, the Oaks Survivors Parade charitable initiative has raised over $1.5 million for women’s health advocacy providing preventative access to underserved women throughout Kentucky, including those who work in the equine industry.
About Churchill Downs Incorporated
Churchill Downs Incorporated (“CDI”) (Nasdaq: CHDN) has been creating extraordinary entertainment experiences for nearly 150 years, beginning with the company’s most iconic and enduring asset, the Kentucky Derby. Headquartered in Louisville, Kentucky, CDI has expanded through the development of live and historical racing entertainment venues, the growth of the TwinSpires horse racing online wagering business and the operation and development of regional casino gaming properties. www.churchilldownsincorporated.com
This news release contains various “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “seek,” “should,” “will,” “scheduled,” and similar words or similar expressions (or negative versions of such words or expressions), although some forward-looking statements are expressed differently.
Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors, that could cause actual results to differ materially from expectations include the following: the occurrence of extraordinary events, such as terrorist attacks, public health threats, civil unrest, and inclement weather, including as a result of climate change; the effect of economic conditions on our consumers’ confidence and discretionary spending or our access to credit, including the impact of inflation; additional or increased taxes and fees; the impact of any pandemics, epidemics, or outbreaks of infectious diseases, including possible new variants of COVID-19, and related economic matters on our results of operations, financial conditions and prospects; lack of confidence in the integrity of our core businesses or any deterioration in our reputation; loss of key or highly skilled personnel, as well as general disruptions in the general labor market; the impact of significant competition, and the expectation that competition levels will increase; changes in consumer preferences, attendance, wagering, and sponsorships; risks associated with equity investments, strategic alliances and other third-party agreements; inability to respond to rapid technological changes in a timely manner; concentration and evolution of slot machine and historical racing machine (HRM) manufacturing and other technology conditions that could impose additional costs; failure to enter into or maintain agreements with industry constituents, including horsemen and other racetracks; inability to successfully focus on market access and retail operations for our TwinSpires sports betting business and effectively compete; online security risk, including cyber-security breaches, or loss or misuse of our stored information as a result of a breach including customers’ personal information could lead to government enforcement actions or other litigation; reliance on our technology services and catastrophic events and system failures disrupting our operations; inability to identify, complete, or fully realize the benefits of our proposed acquisitions, divestitures, development of new venues or the expansion of existing facilities on time, on budget, or as planned; difficulty in integrating recent or future acquisitions into our operations; cost overruns and other uncertainties associated with the development of new venues and the expansion of existing facilities; general risks related to real estate ownership and significant expenditures, including risks related to environmental liabilities; personal injury litigation related to injuries occurring at our racetracks; compliance with the Foreign Corrupt Practices Act or other similar laws and regulations, or applicable anti-money laundering regulations; payment-related risks, such as risk associated with fraudulent credit card or debit card use; work stoppages and labor problems; risks related to pending or future legal proceedings and other actions; highly regulated operations and changes in the regulatory environment could adversely affect our business; restrictions in our debt facilities limiting our flexibility to operate our business; failure to comply with the financial ratios and other covenants in our debt facilities and other indebtedness; increases to interest rates (due to inflation or otherwise), disruption in the credit markets or changes to our credit ratings may adversely affect our business; increase in our insurance costs, or inability to obtain similar insurance coverage in the future, and any inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events; and other factors described under the heading “Risk Factors” in our most recent Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission.
We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
| Investor Contact: Kaitlin Buzzetto | Media Contact: Tonya Abeln |
| (502) 394-1091 | (502) 386-1742 |
| [email protected] | [email protected] |
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