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Nasdaq:CHDN

Churchill Downs Incorporated Reports 2023 First Quarter Results

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LOUISVILLE, Ky., April 26, 2023 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (Nasdaq: CHDN) (the “Company”, “CDI”) today reported business results for the first quarter ended March 31, 2023.

Company Highlights

  • First quarter results:
    • Record net revenue of $559.5 million compared to $364.1 million in first quarter 2022
    • Net income of $155.7 million compared to $42.1 million in first quarter 2022
    • Record Adjusted EBITDA of $222.9 million compared to $128.5 million in first quarter 2022  
  • Delivered record first quarter Adjusted EBITDA across all three reporting segments:
    • Live and Historical Racing up 194% compared to the first quarter of 2022
    • TwinSpires up 22% compared to the first quarter of 2022
    • Gaming up 42% compared to the first quarter of 2022
  • Closed the sale of our Arlington Heights, Illinois property to the Chicago Bears for $197.2 million on February 15, 2023
  • Amended our senior secured credit agreement to increase the loans under the existing Term Loan A credit facility due 2027 by $500 million (from $800 million to $1.3 billion) on February 24, 2023
  • Closed an offering of $600 million of 6.750% senior notes due 2031 on April 25, 2023
  • Announced a two-for-one stock split of the Company’s common stock and a proportionate increase in the number of its authorized shares of common stock on April 25, 2023
CONSOLIDATED RESULTS

  First Quarter
(in millions, except per share data)   2023     2022
       
Net revenue $ 559.5   $ 364.1
Net income $ 155.7   $ 42.1
Diluted EPS $ 4.09   $ 1.08
Adjusted EBITDA(a) $ 222.9   $ 128.5
 
(a) This is a non-GAAP measure. See explanation of non-GAAP measures below.

SEGMENT RESULTS

The summaries below present net revenue from external customers and intercompany revenue from each of our reportable segments. All comparisons discussed below are referencing the first quarter of 2023 as compared to the first quarter of 2022.

Live and Historical Racing

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  First Quarter
(in millions)   2023     2022
       
Net revenue $ 215.8   $ 87.2
Adjusted EBITDA   82.1     27.9

For the first quarter of 2023, net revenue increased $128.6 million due to a $97.7 million increase attributable to the Virginia properties acquired in the P2E Transaction, a $15.6 million increase due to the opening of Turfway Park in Northern Kentucky in September 2022, a $7.5 million increase attributable to properties acquired in the Ellis Park and Chasers Transactions, a $6.2 million increase from our Oak Grove property in Southwestern Kentucky, a $1.2 million increase from our Derby City Gaming property in Louisville, and a $0.4 million increase from Churchill Downs Racetrack.

Adjusted EBITDA increased $54.2 million due to a $46.8 million increase attributable to the Virginia properties acquired in the P2E Transaction, a $4.5 million increase due to continued growth at our Oak Grove property in Southwestern Kentucky, and a $2.5 million increase due to the opening of Turfway Park in Northern Kentucky in September 2022. The remaining properties contributed a $0.4 million increase in Adjusted EBITDA.

TwinSpires

  First Quarter
(in millions)   2023     2022
       
Net revenue $ 96.3   $ 101.4
Adjusted EBITDA   29.4     24.1

For the first quarter of 2023, net revenue decreased $5.1 million primarily due to the decision to exit the direct online Sports and Casino business in the first quarter of 2022, which was partially offset by incremental revenue from United Tote.

Adjusted EBITDA increased $5.3 million primarily due to the decision to exit the direct online Sports and Casino business in the first quarter of 2022 and incremental revenue from TwinSpires business to business agreements, partially offset by higher content related expenses and advance deposit wagering taxes in certain jurisdictions.

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Gaming

  First Quarter
(in millions)   2023     2022
       
Net revenue $ 251.6   $ 179.2
Adjusted EBITDA   129.5     91.1

For the first quarter of 2023, net revenue increased $72.4 million primarily due to a $69.0 million increase attributable to the New York and Iowa properties acquired in the P2E Transaction. Gaming revenue also increased $5.1 million collectively from our properties in Louisiana, Maryland, and Maine, partially offset by a decline of $1.7 million from our properties in Florida and Pennsylvania.

Adjusted EBITDA increased $38.4 million driven by a $26.5 million increase attributable to the New York and Iowa properties acquired in the P2E Transaction, a $13.5 million increase from our equity investments, and a $0.9 million increase from our properties in Maine, Maryland, and Louisiana. Partially offsetting these increases was a $2.5 million decrease from our properties in Pennsylvania, Florida, and Mississippi.

All Other

  First Quarter
(in millions)   2023       2022  
       
Net revenue $ 0.3     $ 0.5  
Adjusted EBITDA   (18.1 )     (14.6 )

For the first quarter of 2023, Adjusted EBITDA decreased $3.5 million driven primarily by increased corporate compensation related expenses and legal fees.

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ACQUISITION / DISPOSITION UPDATE

Arlington Land Sale

On February 15, 2023, we closed on the sale of 326-acres of property in Arlington Heights, Illinois, to the Chicago Bears for $197.2 million.

CAPITAL MANAGEMENT

Term Loan A Increase

On February 24, 2023, the Company announced an amendment of its senior secured credit agreement to increase the loans under the existing Term Loan A credit facility due 2027 by $500 million (from $800 million to $1.3 billion). The Company used the net proceeds from the borrowings under the increased Term Loan A to repay outstanding loans under its existing senior secured revolving credit facility, pay related transaction fees and expenses, and for general corporate purposes.

2031 Senior Notes

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On April 25, 2023, the Company closed an offering of $600 million in aggregate principal amount of its 6.750% senior notes due 2031. The Company used a portion of the net proceeds from the offering to repay indebtedness outstanding under its Term Loan B Facility due 2024 and to fund related transaction fees and expenses, and intends to use the remainder of the proceeds for working capital and other general corporate purposes.

Two-for-One Stock Split

At its regularly scheduled meeting held April 25, 2023, the Board of Directors of the Company approved a two-for-one stock split of the Company’s common stock and a proportionate increase in the number of its authorized shares of common stock. The additional shares will be distributed on May 19, 2023 to shareholders of record on May 5, 2023. The Company’s common stock will begin trading at the split-adjusted price on May 22, 2023.

NET INCOME

The Company’s first quarter of 2023 net income was $155.7 million compared to $42.1 million in the prior year quarter.

The following impacted the comparability of the Company’s first quarter net income:

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  • $86.2 million after-tax gain on the sale of the Arlington property.

This was partially offset by:

  • $1.2 million after-tax net increase in adjustments related to our unconsolidated affiliates, transaction, pre-opening and other expenses.

Excluding the items above, first quarter 2023 net income increased $28.6 million primarily due to the following:

  • $60.5 million after-tax increase driven by the results of our operations and equity in income from our unconsolidated affiliates;
  • Partially offset by a $31.9 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, April 27, 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, April 27, 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.

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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 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 property sales;
  • Legal reserves;
  • Pre-opening expense; and
  • Other charges, recoveries, and expenses

As of December 31, 2021, Arlington ceased racing and simulcast operations and the property was sold on February 15, 2023 to the Chicago Bears. Arlington’s results in 2022 and 2023 are treated as an adjustment to EBITDA and are 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

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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 historical racing machine (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.


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CHURCHILL DOWNS INCORPORATED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

  Three Months Ended March 31,
(in millions, except per common share data)   2023       2022  
Net revenue:      
Live and Historical Racing $ 214.4     $ 86.0  
TwinSpires   94.8       100.3  
Gaming   250.0       177.3  
All Other   0.3       0.5  
Total net revenue   559.5       364.1  
Operating expense:      
Live and Historical Racing   143.3       67.7  
TwinSpires   65.7       74.9  
Gaming   173.5       125.2  
All Other   5.0       3.1  
Selling, general and administrative expense   52.3       35.9  
Asset impairments         4.9  
Transaction expense, net   (0.2 )     5.0  
Total operating expense   439.6       316.7  
Operating income   119.9       47.4  
Other income (expense):      
Interest expense, net   (64.7 )     (21.3 )
Equity in income of unconsolidated affiliates   38.3       32.5  
Gain on sale of Arlington   114.0        
Miscellaneous, net   1.4        
Total other income   89.0       11.2  
Income from operations before provision for income taxes   208.9       58.6  
Income tax provision   (53.2 )     (16.5 )
Net income $ 155.7     $ 42.1  
       
Net income per common share data:      
Basic net income $ 4.14     $ 1.10  
Diluted net income $ 4.09     $ 1.08  
Weighted average shares outstanding:      
Basic   37.6       38.3  
Diluted   38.1       38.8  


CHURCHILL DOWNS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Unaudited)

(in millions) March 31, 2023   December 31, 2022
ASSETS      
Current assets:      
Cash and cash equivalents $ 173.9     $ 129.8  
Restricted cash   63.5       74.9  
Accounts receivable, net   74.0       81.5  
Income taxes receivable         14.0  
Other current assets   66.1       44.3  
Total current assets   377.5       344.5  
Property and equipment, net   2,095.4       1,978.3  
Investment in and advances to unconsolidated affiliates   651.9       659.4  
Goodwill   724.1       723.8  
Other intangible assets, net   2,390.6       2,391.8  
Other assets   34.0       27.0  
Long-term assets held for sale         82.0  
Total assets $ 6,273.5     $ 6,206.8  
LIABILITIES AND SHAREHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable $ 145.3     $ 145.5  
Accrued expenses and other current liabilities   348.2       361.0  
Income taxes payable   7.6       2.1  
Current deferred revenue   120.8       39.0  
Current maturities of long-term debt   72.0       47.0  
Dividends payable   0.5       27.0  
Total current liabilities   694.4       621.6  
Long-term debt, net of current maturities and loan origination fees   1,872.8       2,081.6  
Notes payable, net of debt issuance costs   2,477.9       2,477.1  
Non-current deferred revenue   11.8       11.8  
Deferred income taxes   374.0       340.8  
Other liabilities   138.4       122.4  
Total liabilities   5,569.3       5,655.3  
Commitments and contingencies      
Shareholders’ equity:      
Preferred stock          
Common stock   4.7        
Retained earnings   700.4       552.4  
Accumulated other comprehensive loss   (0.9 )     (0.9 )
Total shareholders’ equity   704.2       551.5  
Total liabilities and shareholders’ equity $ 6,273.5     $ 6,206.8  


CHURCHILL DOWNS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

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  Three Months Ended March 31,
(in millions)   2023       2022  
Cash flows from operating activities:      
Net income $ 155.7     $ 42.1  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization   37.9       25.1  
Distributions from unconsolidated affiliates   45.8       40.6  
Equity in income of unconsolidated affiliates   (38.3 )     (32.5 )
Stock-based compensation   8.6       7.0  
Deferred income taxes   33.2       10.2  
Asset impairments         4.9  
Amortization of operating lease assets   2.2       1.3  
Gain on sale of Arlington   (114.0 )      
Other   0.8       1.2  
Changes in operating assets and liabilities:      
Income taxes   19.9       6.4  
Deferred revenue   81.8       56.3  
Other assets and liabilities   (17.7 )     (27.4 )
Net cash provided by operating activities   215.9       135.2  
Cash flows from investing activities:      
Capital maintenance expenditures   (11.8 )     (10.0 )
Capital project expenditures   (122.9 )     (45.5 )
Proceeds from sale of Arlington   195.7        
Other   (6.5 )     (7.3 )
Net cash provided by (used in) investing activities   54.5       (62.8 )
Cash flows from financing activities:      
Proceeds from borrowings under long-term debt obligations   615.5        
Repayments of borrowings under long-term debt obligations   (797.5 )     (1.8 )
Payment of dividends   (26.7 )     (25.7 )
Repurchase of common stock   (0.5 )     (24.3 )
Taxes paid related to net share settlement of stock awards   (11.3 )     (13.1 )
Debt issuance costs   (2.5 )      
Change in bank overdraft   (14.2 )     (3.0 )
Other   (0.5 )     (0.1 )
Net cash used in financing activities   (237.7 )     (68.0 )
Net increase in cash, cash equivalents and restricted cash   32.7       4.4  
Cash, cash equivalents and restricted cash, beginning of period   204.7       355.6  
Cash, cash equivalents and restricted cash, end of period $ 237.4     $ 360.0  


CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)

  Three Months Ended March 31,
(in millions)   2023       2022  
GAAP net income $ 155.7     $ 42.1  
       
Adjustments, continuing operations:      
Changes in fair value of interest rate swaps related to Rivers Des Plaines         (10.4 )
Legal reserves and transaction costs related to Rivers Des Plaines         0.3  
Other charges   0.3       1.0  
Transaction, pre-opening, and other expense   6.7       9.6  
Asset impairments         4.9  
Gain on Dispositions   (114.0 )      
Income tax impact on net income adjustments (a)   25.9       (1.6 )
Total adjustments   (81.1 )     3.8  
Adjusted net income attributable to Churchill Downs Incorporated $ 74.6     $ 45.9  
       
Adjusted diluted EPS $ 1.96     $ 1.18  
       
Weighted average shares outstanding – Diluted   38.1       38.8  

(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 March 31,  
(in millions) 2023   2022  
Total Handle        
TwinSpires Horse Racing(a) 410.5   394.9  
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(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 March 31,
(in millions)   2023       2022  
Net revenue from external customers:      
Live and Historical Racing:      
Churchill Downs Racetrack $ 2.4     $ 2.0  
Louisville   44.0       42.8  
Northern Kentucky   26.3       10.8  
Southwestern Kentucky   36.5       30.4  
Western Kentucky   4.8        
Virginia   97.7        
New Hampshire   2.7        
Total Live and Historical Racing $ 214.4     $ 86.0  
       
TwinSpires: $ 94.8     $ 100.3  
       
Gaming:      
Florida $ 26.1     $ 27.0  
Iowa   24.5        
Louisiana   44.1       41.5  
Maine   27.7       26.8  
Maryland   23.3       21.3  
Mississippi   27.5       27.5  
New York   44.5        
Pennsylvania   32.3       33.2  
Total Gaming $ 250.0     $ 177.3  
All Other   0.3       0.5  
Net revenue from external customers $ 559.5     $ 364.1  
       
Intercompany net revenues:      
Live and Historical Racing $ 1.4     $ 1.2  
TwinSpires   1.6       1.1  
Gaming   1.5       1.9  
All Other   0.2        
Eliminations   (4.7 )     (4.2 )
Intercompany net revenue $     $  


CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)

  Three Months Ended March 31, 2023
(in millions) Live and Historical Racing   TwinSpires   Gaming   Total Segments   All Other   Total
Net revenue from external customers                      
Pari-mutuel:                      
Live and simulcast racing $ 11.0   $ 79.4   $ 11.6   $ 102.0   $   $ 102.0
Historical racing(a)   185.3         6.0     191.3         191.3
Racing event-related services   1.0         1.9     2.9         2.9
Gaming(a)   2.6     4.4     205.5     212.5         212.5
Other(a)   14.5     11.0     25.0     50.5     0.3     50.8
Total $ 214.4   $ 94.8   $ 250.0   $ 559.2   $ 0.3   $ 559.5
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  Three Months Ended March 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 $ 5.6   $ 81.5   $ 12.9   $ 100.0   $   $ 100.0
Historical racing(a)   73.6             73.6         73.6
Racing event-related services   0.5         0.4     0.9         0.9
Gaming(a)       10.3     150.9     161.2         161.2
Other(a)   6.3     8.5     13.1     27.9     0.5     28.4
Total $ 86.0   $ 100.3   $ 177.3   $ 363.6   $ 0.5   $ 364.1

(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 $12.1 million for the three months ended March 31, 2023 and $7.0 million for the three months ended March 31, 2022.

CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)

Adjusted EBITDA by segment is comprised of the following:

  Three Months Ended March 31, 2023
(in millions) Live and Historical Racing   TwinSpires   Gaming   Total Segments   All Other   Eliminations   Total
Net revenue $ 215.8     $ 96.3     $ 251.6     $ 563.7     $ 0.3     $ (4.5 )   $ 559.5  
                           
Taxes and purses   (56.5 )     (5.0 )     (83.6 )     (145.1 )                 (145.1 )
Marketing and advertising   (8.2 )     (1.4 )     (8.6 )     (18.2 )           0.2       (18.0 )
Salaries and benefits   (21.8 )     (6.2 )     (34.5 )     (62.5 )                 (62.5 )
Content expense   (1.5 )     (43.0 )     (1.8 )     (46.3 )           3.9       (42.4 )
Selling, general and administrative expense   (8.7 )     (2.3 )     (12.2 )     (23.2 )     (18.3 )     0.1       (41.4 )
Other operating expense   (37.0 )     (10.0 )     (30.0 )     (77.0 )     (0.1 )     0.3       (76.8 )
Other income         1.0       48.6       49.6                   49.6  
Adjusted EBITDA $ 82.1     $ 29.4     $ 129.5     $ 241.0     $ (18.1 )   $     $ 222.9  
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  Three Months Ended March 31, 2022
(in millions) Live and Historical Racing   TwinSpires   Gaming   Total Segments   All Other   Eliminations   Total
Net revenue $ 87.2     $ 101.4     $ 179.2     $ 367.8     $ 0.1     $ (4.2 )   $ 363.7  
                           
Taxes and purses   (26.8 )     (7.5 )     (67.3 )     (101.6 )                 (101.6 )
Marketing and advertising   (2.9 )     (5.1 )     (3.5 )     (11.5 )                 (11.5 )
Salaries and benefits   (10.9 )     (6.7 )     (23.9 )     (41.5 )                 (41.5 )
Content expense   (0.6 )     (43.1 )     (1.5 )     (45.2 )           3.9       (41.3 )
Selling, general and administrative expense   (3.3 )     (2.6 )     (6.6 )     (12.5 )     (14.5 )     0.3       (26.7 )
Other operating expense   (14.8 )     (12.3 )     (20.0 )     (47.1 )     (0.2 )           (47.3 )
Other income               34.7       34.7                   34.7  
Adjusted EBITDA $ 27.9     $ 24.1     $ 91.1     $ 143.1     $ (14.6 )   $     $ 128.5  


CHURCHILL DOWNS INCORPORATED

SUPPLEMENTAL INFORMATION
(Unaudited)

  Three Months Ended March 31,
(in millions)   2023       2022  
Reconciliation of Comprehensive Income to Adjusted EBITDA:      
Net income and comprehensive income $ 155.7     $ 42.1  
       
Additions:      
Depreciation and amortization   37.9       25.1  
Interest expense   64.7       21.3  
Income tax provision   53.2       16.5  
EBITDA $ 311.5     $ 105.0  
       
Adjustments to EBITDA:      
Stock-based compensation expense $ 8.6     $ 7.0  
Pre-opening expense   3.2       2.1  
Other expenses, net   3.7       2.5  
Asset impairments         4.9  
Transaction expense, net   (0.2 )     5.0  
Other income, expense:      
Interest, depreciation and amortization expense related to equity investments   9.8       11.1  
Changes in fair value of Rivers Des Plaines’ interest rate swaps         (10.4 )
Rivers Des Plaines’ legal reserves and transaction costs         0.3  
Other charges and recoveries, net   0.3       1.0  
Gain on Arlington sale   (114.0 )      
Total adjustments to EBITDA   (88.6 )     23.5  
Adjusted EBITDA $ 222.9     $ 128.5  
       
Adjusted EBITDA by segment:      
Live and Historical Racing $ 82.1     $ 27.9  
TwinSpires   29.4       24.1  
Gaming   129.5       91.1  
Total segment Adjusted EBITDA   241.0       143.1  
All Other   (18.1 )     (14.6 )
Total Adjusted EBITDA $ 222.9     $ 128.5  


CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL JOINT VENTURE FINANCIAL STATEMENTS
(Unaudited)

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Summarized financial information for our equity investments is comprised of the following:

  Summarized Income Statement
  Three Months Ended March 31,  
(in millions)   2023       2022  
Net revenue $ 220.6     $ 177.2  
         
Operating and SG&A expense   137.2       118.2  
Depreciation and amortization   5.7       5.3  
Total operating expense   142.9       123.5  
Operating income   77.7       53.7  
Interest and other expense, net   (10.9 )     4.1  
Net income $ 66.8     $ 57.8  

  Summarized Balance Sheet
(in millions) March 31, 2023   December 31, 2022
Assets      
Current assets $ 103.2     $ 91.0  
Property and equipment, net   343.9       345.7  
Other assets, net   264.4       265.0  
Total assets $ 711.5     $ 701.7  
       
Liabilities and Members’ Deficit      
Current liabilities $ 121.8     $ 97.9  
Long-term debt   838.0       838.6  
Other liabilities   0.2       0.2  
Members’ deficit   (248.5 )     (235.0 )
Total liabilities and members’ deficit $ 711.5     $ 701.7  


CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)

Planned capital projects for the Company are as follows:

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(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

Contact: Phil Forbis                                 
(502) 394-1094
[email protected]

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Nasdaq:CHDN

Churchill Downs Incorporated Announces Updates on Capital Projects for Churchill Downs Racetrack

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New Renovations for Finish Line Suites and The Mansion; Temporary Pause of The Skye, Conservatory and Infield General Admission Projects

LOUISVILLE, Ky., April 23, 2025 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (“CDI” or “the Company”) (Nasdaq: CHDN) announced today renovations of the existing Finish Line Suites and The Mansion at Churchill Downs Racetrack with expected completion in April 2026. After careful consideration, CDI has decided to pause the multi-year projects to develop The Skye, Conservatory and Infield areas. The decision to delay these construction projects is due to the increasing uncertainty surrounding construction costs related to tariff and trade disputes as well as current macro-economic conditions. In the coming months, CDI will assess the evolving economic landscape and evaluate any changes to the timing and sequencing of these multi-year projects.

The renovation of the Finish Line Suites will update the existing 15 suites on the fifth floor overlooking the finish line at Churchill Downs Racetrack, providing modern interior appointments and amenities while also increasing the capacity to a total of 750 guests. The renovation of the Trophy Room, which sits behind the Finish Line Suites with capacity for over 300 guests, will add updated finishes and a new feature bar. The improvements to these areas will together create a larger, fully integrated hospitality experience with more vibrancy, better guest flow and superior amenities. 

The Mansion, built in 2013, is one of the most exclusive areas at Churchill Downs Racetrack. Located on the sixth floor, The Mansion provides an exclusive aerial view of the finish line and an expansive perspective of the entire property. Renovation of The Mansion will introduce updated finishes and other enhancements.

CDI expects to spend approximately $25-30 million on these new capital projects.

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“We are pleased to announce these new projects designed to significantly improve the Finish Line Suites and The Mansion which are two of our most exclusive areas of the racetrack,” said Bill Carstanjen, Chief Executive Officer of CDI, “The decision to pause the Skye Terrace and infield projects was a difficult one for us to make because we do not want to disappoint our fans; however, we have a responsibility to be disciplined given the recent changes in the economic environment. We remain committed to growing our iconic flagship asset over the long term with projects that will provide new once-in-a lifetime experiences for our guests and deliver best-in-class shareholder returns.”

The Trophy Room

The Mansion

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.

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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]
   

Photos accompanying this announcement are available at

https://www.globenewswire.com/NewsRoom/AttachmentNg/78b62cd7-0a4a-4a7e-ab2e-eaf57a0db8a5

https://www.globenewswire.com/NewsRoom/AttachmentNg/9373d521-7928-4fd0-a2f5-17c994c9b272

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Churchill Downs Incorporated Reports 2025 First Quarter Results

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LOUISVILLE, Ky., April 23, 2025 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (Nasdaq: CHDN) (the “Company”, “CDI”, “we”) today reported business results for the first quarter ended March 31, 2025.

Company Highlights

  • First quarter 2025 financial results, as compared to the prior year quarter:
    • Record net revenue of $642.6 million, up $51.7 million or 9%
    • Net income attributable to CDI of $76.7 million, down $3.7 million or 5%
    • Record Adjusted EBITDA of $245.1 million, up $2.6 million or 1%
  • We opened Owensboro Racing and Gaming in Western Kentucky in February 2025, with 600 historical racing machines, a retail sportsbook, simulcast wagering, and food and beverage offerings.
  • We announced two new projects at Churchill Downs Racetrack that will enhance the 152nd Kentucky Derby experience for our guests in the Finish Line Suites and The Mansion. We also announced that we are pausing The Skye, Conservatory, and Infield General Admission capital projects due to the current economic environment.
  • In February 2025, we closed the seventh amendment of the Credit Agreement, which reduced the interest rate for Term Loan B-1 and eliminated the 0.10% credit spread adjustment.
  • In March 2025, the Board of Directors approved a new $500 million share repurchase program.
  • We ended the first quarter of 2025 with net bank leverage of 4.0x and returned $119.5 million of capital to our shareholders through share repurchases and dividends.
    • We repurchased $89.4 million of shares in the first quarter of 2025.
    • On January 3, 2025, we paid a $0.409 per share dividend to shareholders of record as of December 6, 2024, which represents the fourteenth consecutive year of an increased dividend per share.
CONSOLIDATED RESULTS

  First Quarter
(in millions, except per share data)   2025       2024  
       
Net revenue $ 642.6     $ 590.9  
Net income attributable to CDI $ 76.7     $ 80.4  
Diluted EPS attributable to CDI $ 1.02     $ 1.08  
Adjusted EBITDA(a) $ 245.1     $ 242.5  
 
(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

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  First Quarter
(in millions)   2025       2024  
       
Revenue $ 276.4     $ 248.9  
Adjusted EBITDA   102.0       100.8  
               

First Quarter 2025

First quarter 2025 revenue increased $27.5 million due to an $18.2 million increase at our Virginia HRM venues, an $8.9 million increase from our Kentucky HRM venues, and a $0.4 million increase from our other Live and Historical Racing properties. The Virginia HRM increase of $18.2 million was primarily due to the November 2024 opening of The Rose Gaming Resort in Northern Virginia, partially offset by a decrease from our other Virginia HRM venues primarily due to lower unrated play from consumer softness and competition, the impact of weather, and one less day in the quarter due to the 2024 leap year. The Kentucky HRM increase of $8.9 million was primarily due to the February 2025 opening of Owensboro Racing and Gaming in Western Kentucky and growth from our Northern and Southwestern Kentucky properties, partially offset by a decrease at our Louisville properties due to the impact of weather and one less day in the quarter due to 2024 leap year.

First quarter 2025 Adjusted EBITDA increased $1.2 million due to a $3.1 million increase at our Kentucky HRM venues, partially offset by a $1.9 million decrease primarily from our Virginia HRM venues. Our Kentucky HRM venues increase was primarily due to the February 2025 opening of Owensboro Racing and Gaming in Western Kentucky and growth at our Northern and Southwestern Kentucky properties, partially offset by a decrease from our Louisville properties due to the impact of weather and one less day in the quarter due to the 2024 leap year. Our Virginia HRM venues decreased $2.0 million primarily due to lower unrated play from consumer softness and competition, the impact of weather, increased handle tax and racing-related expenses, and one less day in the quarter due to the 2024 leap year, partially offset by the November 2024 opening of The Rose Gaming Resort.

Wagering Services and Solutions

  First Quarter
(in millions)   2025       2024  
       
Revenue $ 115.8     $ 114.1  
Adjusted EBITDA   41.3       39.6  
               

First Quarter 2025

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First quarter 2025 revenue increased $1.7 million due to a $3.1 million increase from Exacta due to incremental HRMs in Virginia and New Hampshire and a $0.8 million increase in TwinSpires Horse Racing. These increases were partially offset by a $2.2 million decrease from our sports betting business.

First quarter 2025 Adjusted EBITDA increased $1.7 million due to a $3.8 million increase from Exacta due to a $2.7 million increase primarily from incremental HRMs in Virginia and New Hampshire and a $1.1 million decrease from lower compensation expense. These increases were partially offset by a $1.1 million decrease from our sports betting business and a $1.0 million decrease from TwinSpires Horse Racing due to increased legal expenses.

Gaming

  First Quarter
(in millions)   2025       2024  
       
Revenue $ 267.2     $ 243.2  
Adjusted EBITDA   123.5       122.8  
               

First Quarter 2025

First quarter 2025 revenue increased $24.0 million due to a $31.6 million increase from the April 2024 opening of the Terre Haute Casino Resort, partially offset by a $7.6 million decrease primarily due to regional gaming softness, increased competition, one less day in the quarter due to the 2024 leap year, and the impact of weather at certain properties.

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First quarter 2025 Adjusted EBITDA increased $0.7 million due to an $11.5 million increase attributable to the opening of the Terre Haute Casino Resort in April 2024, partially offset by a $6.6 million decrease from our wholly owned gaming properties and a $4.2 million decrease from our equity investments primarily due to regional gaming softness, increased competition, higher labor and benefit expense, one less day in the quarter due to the 2024 leap year, and the impact of weather at certain properties.

All Other

  First Quarter
(in millions)   2025       2024  
       
Revenue $ 2.0     $  
Adjusted EBITDA   (21.7 )     (20.7 )
               

First Quarter 2025

First quarter 2025 revenue increased $2.0 million increased due to intercompany revenue related to the captive insurance company that was established in April 2024. All captive revenue is eliminated in consolidation.

First quarter 2025 Adjusted EBITDA decreased $1.0 million driven primarily by increased corporate compensation-related expenses and other corporate administrative expenses as a result of enterprise growth. 

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CAPITAL MANAGEMENT
 

Share Repurchase Program

On March 12, 2025, the Board of Directors of the Company approved a common stock repurchase program of up to $500 million (“2025 Stock Repurchase Program”). The 2025 Stock Repurchase Program includes and is not in addition to the $125.6 million remaining under the prior 2021 Stock Repurchase Program authorization.

The Company repurchased 798,250 shares of its common stock at a total cost of $89.4 million in the first quarter of 2025. We had approximately $434.6 million of repurchase authority remaining under the 2025 Stock Repurchase Program as of March 31, 2025. 

NET INCOME ATTRIBUTABLE TO CDI
 

First Quarter 2025 Results

The Company’s first quarter 2025 net income attributable to CDI was $76.7 million compared to $80.4 million in the prior year quarter.

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The following factors impacted the comparability of the Company’s first quarter 2025 net income to the prior year quarter:

  • a $6.7 million after-tax decrease in other recoveries, net primarily driven by insurance claim proceeds recorded in the prior year quarter.

This was partially offset by:

  • a $5.6 million after-tax decrease in transaction, pre-opening, and other expenses.

Excluding the items above, first quarter 2025 adjusted net income attributable to CDI decreased $4.8 million primarily due to the following:

  • a $3.0 million after-tax decrease in equity income from our unconsolidated affiliates;
  • a $2.0 million after-tax increase in interest expense associated with lower capitalization of interest related to capital projects in the current year, partially offset by lower interest rates; and
  • a $0.5 million after-tax decrease due a portion of United Tote’s income being recognized as noncontrolling interest.

This was partially offset by:

  • a $0.7 million after-tax increase primarily driven by the results of our operations.

Conference Call

A conference call regarding this news release is scheduled for Thursday, April 24, 2025 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, April 24, 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.

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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 interest.

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;
  • 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

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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.

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CHURCHILL DOWNS INCORPORATED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
  Three Months Ended March 31,
(in millions, except per common share data)   2025       2024  
Net revenue:      
Live and Historical Racing $ 272.5     $ 245.1  
Wagering Services and Solutions   106.9       106.6  
Gaming   263.2       239.2  
All Other          
Total net revenue   642.6       590.9  
Operating expense:      
Live and Historical Racing   189.7       157.2  
Wagering Services and Solutions   67.2       67.9  
Gaming   192.1       178.5  
All Other   4.1       2.1  
Selling, general and administrative expense   54.5       54.8  
Transaction expense, net   0.4       4.1  
Total operating expense   508.0       464.6  
Operating income   134.6       126.3  
Other (expense) income:      
Interest expense, net   (72.3 )     (70.4 )
Equity in income of unconsolidated affiliates   33.3       37.8  
Miscellaneous, net   0.3       8.1  
Total other (expense) income   (38.7 )     (24.5 )
Income from operations before provision for income taxes   95.9       101.8  
Income tax provision   (18.7 )     (21.4 )
Net income   77.2       80.4  
Net income attributable to noncontrolling interest   0.5        
Net income and comprehensive income attributable to
Churchill Downs Incorporated
$ 76.7     $ 80.4  
       
Net income attributable to Churchill Downs Incorporated per common share data:      
Basic net income $ 1.02     $ 1.09  
Diluted net income $ 1.02     $ 1.08  
Weighted average shares outstanding:      
Basic   73.7       74.1  
Diluted   74.4       74.7  

CHURCHILL DOWNS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
(in millions) March 31, 2025   December 31, 2024
ASSETS      
Current assets:      
Cash and cash equivalents $ 174.2     $ 175.5  
Restricted cash   97.0       77.2  
Accounts receivable, net   108.6       98.7  
Income taxes receivable         14.5  
Other current assets   72.6       46.4  
Total current assets   452.4       412.3  
Property and equipment, net   2,907.3       2,874.9  
Investment in and advances to unconsolidated affiliates   663.1       661.2  
Goodwill   900.2       900.2  
Other intangible assets, net   2,406.3       2,409.0  
Other assets   17.8       18.3  
Total assets $ 7,347.1     $ 7,275.9  
LIABILITIES AND SHAREHOLDERS’ EQUITY      
Current liabilities:      
Accounts payable $ 207.1     $ 180.3  
Accrued expenses and other current liabilities   423.6       402.0  
Income taxes payable   4.8        
Current deferred revenue   146.8       52.9  
Current maturities of long-term debt   63.1       63.1  
Dividends payable   0.7       31.0  
Total current liabilities   846.1       729.3  
Long-term debt, net of current maturities and loan origination fees   1,736.5       1,767.9  
Notes payable, net of debt issuance costs   3,077.4       3,076.2  
Non-current deferred revenue   20.0       20.0  
Deferred income taxes   432.8       432.7  
Other liabilities   141.2       146.5  
Total liabilities   6,254.0       6,172.6  
Commitments and contingencies      
Redeemable noncontrolling interest   21.4       19.7  
Shareholders’ equity:      
Preferred stock          
Common stock          
Retained earnings   1,072.7       1,084.6  
Accumulated other comprehensive loss   (1.0 )     (1.0 )
Total Churchill Downs Incorporated shareholders’ equity   1,071.7       1,083.6  
Total liabilities and shareholders’ equity $ 7,347.1     $ 7,275.9  

CHURCHILL DOWNS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
  Three Months Ended March 31,
(in millions)   2025       2024  
Cash flows from operating activities:      
Net income $ 77.2     $ 80.4  
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization   59.2       46.9  
Distributions from unconsolidated affiliates   31.4       45.0  
Equity in income of unconsolidated affiliates   (33.3 )     (37.8 )
Stock-based compensation   3.6       7.2  
Deferred income taxes         4.9  
Amortization of operating lease assets   1.6       1.4  
Other   2.3       1.7  
Changes in operating assets and liabilities:      
Income taxes   19.0       17.0  
Deferred revenue   93.9       80.1  
Other assets and liabilities   (8.4 )     7.9  
Net cash provided by operating activities   246.5       254.7  
Cash flows from investing activities:      
Capital maintenance expenditures   (12.6 )     (12.4 )
Capital project expenditures   (67.5 )     (142.6 )
Other         1.6  
Net cash used in investing activities   (80.1 )     (153.4 )
Cash flows from financing activities:      
Proceeds from borrowings under long-term debt obligations   219.7       355.5  
Repayments of borrowings under long-term debt obligations   (251.4 )     (266.7 )
Payment of dividends   (30.1 )     (28.6 )
Repurchase of common stock   (86.4 )     (141.7 )
Taxes paid related to net share settlement of stock awards   (3.9 )     (10.4 )
Debt issuance costs   (0.3 )      
Change in bank overdraft   4.6       (8.6 )
Other   (0.1 )     (0.6 )
Net cash used in financing activities   (147.9 )     (101.1 )
Net increase in cash, cash equivalents and restricted cash   18.5       0.2  
Cash, cash equivalents and restricted cash, beginning of period   252.7       221.8  
Cash, cash equivalents and restricted cash, end of period $ 271.2     $ 222.0  
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  Three Months Ended March 31,
 
(in millions, except per common share data) 2025     2024  
GAAP net income attributable to CDI $                         76.7     $                         80.4  
           
Adjustments, continuing operations:          
Transaction, pre-opening, and other expense 4.3     12.6  
Other recoveries, net     (6.7 )
Income tax impact on net income adjustments (a) (1.1 )   (1.6 )
Total adjustments 3.2     4.3  
Adjusted net income attributable to CDI $                         79.9     $                         84.7  
           
Adjusted diluted EPS $                         1.07     $                         1.13  
           
Weighted average shares outstanding – Diluted 74.4     74.7  

(a) The income tax impact for each adjustment is derived by applying the effective tax rate, including current and deferred income tax expense, based upon the jurisdiction and the nature of the adjustment.

  Three Months Ended March 31,
(in millions)   2025       2024  
Total Handle      
TwinSpires Horse Racing(a) $ 400.5     $ 419.7  

(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 March 31,
(in millions)   2025       2024  
Net revenue from external customers:      
Live and Historical Racing:      
Churchill Downs Racetrack $ 3.6     $ 3.1  
Louisville   52.2       53.7  
Northern Kentucky   31.2       28.5  
Southwestern Kentucky   40.5       38.6  
Western Kentucky   12.4       6.8  
Virginia   129.3       111.2  
New Hampshire   3.3       3.2  
Total Live and Historical Racing $ 272.5     $ 245.1  
       
Wagering Services and Solutions: $ 106.9     $ 106.6  
       
Gaming:      
Florida $ 25.3     $ 26.1  
Iowa   23.5       23.4  
Indiana   31.6        
Louisiana   44.6       44.3  
Maine   25.0       26.8  
Maryland   20.8       21.6  
Mississippi   25.1       26.0  
New York   43.4       45.0  
Pennsylvania   23.9       26.0  
Total Gaming $ 263.2     $ 239.2  
All Other          
Net revenue from external customers $ 642.6     $ 590.9  
       
Intercompany net revenues:      
Live and Historical Racing $ 3.9     $ 3.8  
Wagering Services and Solutions   8.9       7.5  
Gaming   4.0       4.0  
All Other   2.0        
Eliminations   (18.8 )     (15.3 )
Intercompany net revenue $     $  

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CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
 
  Three Months Ended March 31, 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 $ 11.2     $ 80.1     $ 10.7     $ 102.0     $     $ 102.0  
Historical racing(a)   236.4             9.7       246.1             246.1  
Racing event-related services   1.4             0.7       2.1             2.1  
Gaming(a)   3.3       3.9       213.7       220.9             220.9  
Other(a)   20.2       22.9       28.4       71.5             71.5  
Total $ 272.5     $ 106.9     $ 263.2     $ 642.6     $     $ 642.6  

  Three Months Ended March 31, 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 $ 11.0     $ 79.8     $ 10.6     $ 101.4     $     $ 101.4  
Historical racing(a)   212.1             8.8       220.9             220.9  
Racing event-related services   1.1             2.2       3.3             3.3  
Gaming(a)   3.1       5.7       193.1       201.9             201.9  
Other(a)   17.8       21.1       24.5       63.4             63.4  
Total $ 245.1     $ 106.6     $ 239.2     $ 590.9     $     $ 590.9  

(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 $14.4 million for the three months ended March 31, 2025 and $13.4 million for the three months March 31, 2024.
 

CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
Adjusted EBITDA by segment is comprised of the following:
 
  Three Months Ended March 31, 2025
(in millions) Live and
Historical Racing
  Wagering
Services and Solutions
  Gaming   Total
Segments
  All Other   Eliminations   Total
Revenues $ 276.4     $ 115.8     $ 267.2     $ 659.4     $ 2.0     $ (18.8 )   $ 642.6  
                           
Pari-mutuel taxes & purses   (71.9 )     (4.4 )     (14.6 )     (90.9 )                 (90.9 )
Gaming taxes   (1.5 )     (0.4 )     (72.4 )     (74.3 )                 (74.3 )
Marketing & advertising   (13.8 )     (1.4 )     (8.2 )     (23.4 )     (0.1 )     (0.1 )     (23.6 )
Salaries & benefits   (32.7 )     (8.1 )     (44.3 )     (85.1 )                 (85.1 )
Content expense   (1.4 )     (43.7 )     (1.8 )     (46.9 )           9.0       (37.9 )
Selling, general & administrative expense   (10.5 )     (5.2 )     (11.1 )     (26.8 )     (21.4 )     0.3       (47.9 )
Maintenance, insurance & utilities   (10.4 )     (0.9 )     (9.5 )     (20.8 )     (2.2 )     2.0       (21.0 )
Gaming equipment rental & technology costs   (11.8 )     (0.7 )     (4.2 )     (16.7 )           7.6       (9.1 )
Food & beverage costs   (3.6 )           (4.2 )     (7.8 )                 (7.8 )
Other operating expense   (16.9 )     (9.7 )     (16.8 )     (43.4 )                 (43.4 )
Equity in income of unconsolidated affiliates               43.2       43.2                   43.2  
Other income   0.1             0.2       0.3                   0.3  
Adjusted EBITDA $ 102.0     $ 41.3     $ 123.5     $ 266.8     $ (21.7 )   $     $ 245.1  
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  Three Months Ended March 31, 2024
(in millions) Live and
Historical
Racing
  Wagering
Services and
Solutions
  Gaming   Total
Segments
  All Other   Eliminations   Total
Revenues $ 248.9     $ 114.1     $ 243.2     $ 606.2     $     $ (15.3 )   $ 590.9  
                           
Pari-mutuel taxes & purses   (63.6 )     (4.1 )     (14.2 )     (81.9 )                 (81.9 )
Gaming taxes   (1.4 )     (0.8 )     (66.3 )     (68.5 )                 (68.5 )
Marketing & advertising   (9.3 )     (1.2 )     (7.8 )     (18.3 )                 (18.3 )
Salaries & benefits   (26.8 )     (7.9 )     (38.0 )     (72.7 )                 (72.7 )
Content expense   (1.3 )     (44.0 )     (1.8 )     (47.1 )           8.9       (38.2 )
Selling, general & administrative expense   (8.8 )     (4.5 )     (10.2 )     (23.5 )     (20.5 )     0.3       (43.7 )
Maintenance, insurance & utilities   (10.3 )     (1.0 )     (9.6 )     (20.9 )                 (20.9 )
Gaming equipment rental & technology costs   (10.1 )     (1.0 )     (3.3 )     (14.4 )                 (14.4 )
Food & beverage costs   (3.1 )           (3.8 )     (6.9 )                 (6.9 )
Other operating expense   (13.4 )     (10.0 )     (14.6 )     (38.0 )     (0.2 )     6.1       (32.1 )
Equity in income of unconsolidated affiliates               47.5       47.5                   47.5  
Other income               1.7       1.7                   1.7  
Adjusted EBITDA $ 100.8     $ 39.6     $ 122.8     $ 263.2     $ (20.7 )   $     $ 242.5  

CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)
 
  Three Months Ended March 31,
(in millions)   2025       2024  
Reconciliation of Comprehensive Income to Adjusted EBITDA:      
Net income and comprehensive income attributable to Churchill Downs Incorporated $ 76.7     $ 80.4  
Net income attributable to noncontrolling interest   0.5        
Net income   77.2       80.4  
       
Adjustments:      
Depreciation and amortization   59.2       46.9  
Interest expense   72.3       70.4  
Income tax provision   18.7       21.4  
Stock-based compensation expense   3.6       7.2  
Pre-opening expense   4.2       8.3  
Other expenses, net   (0.4 )     0.2  
Transaction expense, net   0.4       4.1  
Other income, expense:      
Interest, depreciation and amortization expense related to equity investments   9.9       10.3  
Other charges and recoveries, net         (6.7 )
Total adjustments   167.9       162.1  
Adjusted EBITDA $ 245.1     $ 242.5  
       
Adjusted EBITDA by segment:      
Live and Historical Racing $ 102.0     $ 100.8  
Wagering Services and Solutions   41.3       39.6  
Gaming   123.5       122.8  
Total segment Adjusted EBITDA   266.8       263.2  
All Other   (21.7 )     (20.7 )
Total Adjusted EBITDA $ 245.1     $ 242.5  

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 March 31,
(in millions)   2025       2024  
Net revenue $ 205.3     $ 216.9  
       
Operating and SG&A expense   130.3       134.9  
Depreciation and amortization   6.2       6.3  
Operating income   68.8       75.7  
Interest and other expense, net   (10.6 )     (11.0 )
Net income $ 58.2     $ 64.7  
       
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  Summarized Balance Sheet
(in millions) March 31, 2025   December 31, 2024
Assets      
Current assets $ 103.5     $ 100.5  
Property and equipment, net   324.4       325.6  
Other assets, net   270.2       267.5  
Total assets $ 698.1     $ 693.6  
       
Liabilities and Members’ Deficit      
Current liabilities $ 116.4     $ 89.9  
Long-term debt   816.5       839.8  
Other liabilities   0.4       1.7  
Members’ deficit   (235.2 )     (237.8 )
Total liabilities and members’ deficit $ 698.1     $ 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 April 2025 $75-85
Finish Line Suites / The Mansion April 2026 $15-20
The Skye, Conservatory, and Infield General Admission Projects TBD TBD
Virginia Richmond (HRM Expansion) Third Quarter 2025 $30-35
Henrico (Roseshire – HRM Venue) Fourth Quarter 2025 $30-35
Southwestern Kentucky Calvert City (Marshall Yards Racing and Gaming – HRM Venue) First Quarter 2026 $30-35
New Hampshire Salem (HRM Venue) TBD TBD
All Other Projects    
All Other All Other TBD $70-80
    Total: $250-290
       

Contact: Sam Ullrich
(502) 638-3906
[email protected]

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Nasdaq:CHDN

Churchill Downs Incorporated 2025 First Quarter Financial Results Conference Call Invitation

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on

churchill-downs-incorporated-2025-first-quarter financial-results-conference-call-invitation

LOUISVILLE, Ky., March 18, 2025 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (“CDI” or “the Company”) announced today that the Company will release first quarter 2025 financial results after the market closes on Wednesday, April 23, 2025, and host a related conference call to discuss the quarter on Thursday, April 24, 2025, at 9 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, April 24, 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

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Investor Contact: Sam Ullrich
(502) 638-3906
[email protected]

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