Kentucky (State of incorporation) | 001-33998 (Commission file number) | 61-0156015 (IRS Employer Identification No.) |
600 North Hurstbourne Parkway, Suite 400, Louisville, Kentucky 40222 (Address of principal executive offices) (Zip Code) | ||
(502) 636-4400 (Registrant's telephone number, including area code) |
[ ] | Written communications pursuant to Rule 425 under the Securities Act (18 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
(d) | Exhibits |
99.1 | Press Release dated August 6, 2012 issued by Churchill Downs Incorporated. | |
Exhibit No. | Description | |
Exhibit 99.1 | Press Release dated August 6, 2012 issued by Churchill Downs Incorporated. |
CHURCHILL DOWNS INCORPORATED | ||
August 6, 2012 | /s/ William E. Mudd___________________ By: William E. Mudd Title: Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | |
• | Record net revenues from continuing operations of $270.8 million, an 8 percent increase over 2011 Q2 |
• | Record net earnings from continuing operations of $48.6 million, a 21 percent climb over 2011 Q2 |
• | Record EBITDA of $95.3 million, 12 percent growth over 2011 Q2 |
• | Record Kentucky Oaks and Derby Week EBITDA grows $5.4 million over last year |
2012 | 2011 | % Change | |||||||
Net revenues | |||||||||
Racing | $ | 160,440 | $ | 148,371 | 8 | ||||
Gaming | 51,371 | 49,459 | 4 | ||||||
Online | 52,702 | 46,526 | 13 | ||||||
Other | 6,303 | 5,330 | 18 | ||||||
270,816 | 249,686 | 8 | |||||||
Operating expenses | |||||||||
Racing | 95,484 | 91,555 | 4 | ||||||
Gaming | 38,291 | 38,237 | — | ||||||
Online | 32,925 | 28,851 | 14 | ||||||
Other | 6,866 | 5,267 | 30 | ||||||
Selling, general and administrative expenses | 20,070 | 18,696 | 7 | ||||||
Insurance recoveries, net of losses | (5,003 | ) | (395 | ) | F | ||||
Operating income | 82,183 | 67,475 | 22 | ||||||
Other income (expense): | |||||||||
Interest income | 35 | 56 | -38 | ||||||
Interest expense | (982 | ) | (3,461 | ) | -72 | ||||
Equity in (loss) gain of unconsolidated investments | (564 | ) | 460 | U | |||||
Miscellaneous, net | 37 | 3,158 | -99 | ||||||
(1,474 | ) | 213 | U | ||||||
Earnings from continuing operations before provision for income taxes | 80,709 | 67,688 | 19 | ||||||
Income tax provision | (32,133 | ) | (27,698 | ) | 16 | ||||
Earnings from continuing operations | 48,576 | 39,990 | 21 | ||||||
Discontinued operations, net of income taxes: | |||||||||
Gain on sale of assets | — | 157 | U | ||||||
Net earnings and comprehensive income | $ | 48,576 | $ | 40,147 | 21 | ||||
Net earnings per common share data: | |||||||||
Basic | |||||||||
Earnings from continuing operations | $ | 2.82 | $ | 2.38 | 18 | ||||
Discontinued operations | $ | — | $ | 0.01 | U | ||||
Net earnings | $ | 2.82 | $ | 2.39 | 18 | ||||
Diluted | |||||||||
Earnings from continuing operations | $ | 2.77 | $ | 2.36 | 17 | ||||
Discontinued operations | $ | — | $ | 0.01 | U | ||||
Net earnings | $ | 2.77 | $ | 2.37 | 17 | ||||
Weighted average shares outstanding: | |||||||||
Basic | 16,978 | 16,444 | |||||||
Diluted | 17,502 | 16,935 | |||||||
U: >100% unfavorable F: >100% favorable |
2012 | 2011 | % Change | |||||||
Net revenues | |||||||||
Racing | $ | 190,622 | $ | 180,082 | 6 | ||||
Gaming | 110,707 | 108,546 | 2 | ||||||
Online | 96,737 | 83,329 | 16 | ||||||
Other | 10,946 | 9,283 | 18 | ||||||
409,012 | 381,240 | 7 | |||||||
Operating expenses | |||||||||
Racing | 138,472 | 137,601 | 1 | ||||||
Gaming | 79,231 | 79,639 | (1) | ||||||
Online | 63,076 | 55,216 | 14 | ||||||
Other | 12,575 | 9,857 | 28 | ||||||
Selling, general and administrative expenses | 36,269 | 34,700 | 5 | ||||||
Insurance recoveries, net of losses | (6,514 | ) | (395 | ) | F | ||||
Operating income | 85,903 | 64,622 | 33 | ||||||
Other income (expense): | |||||||||
Interest income | 53 | 124 | -57 | ||||||
Interest expense | (2,205 | ) | (5,921 | ) | -63 | ||||
Equity in (loss) gain of unconsolidated investments | (784 | ) | 44 | U | |||||
Miscellaneous, net | 70 | 3,615 | -98 | ||||||
(2,866 | ) | (2,138 | ) | 34 | |||||
Earnings from continuing operations before provision for income taxes | 83,037 | 62,484 | 33 | ||||||
Income tax provision | (33,107 | ) | (25,680 | ) | 29 | ||||
Earnings from continuing operations | 49,930 | 36,804 | 36 | ||||||
Discontinued operations, net of income taxes: | |||||||||
(Loss) earnings from operations | (1 | ) | 1 | U | |||||
Gain on sale of assets | — | 157 | U | ||||||
Net earnings and comprehensive income | $ | 49,929 | $ | 36,962 | |||||
Net earnings per common share data: | |||||||||
Basic | |||||||||
Earnings from continuing operations | $ | 2.90 | $ | 2.19 | 32 | ||||
Discontinued operations | $ | — | $ | 0.01 | U | ||||
Net earnings | $ | 2.90 | $ | 2.20 | 32 | ||||
Diluted | |||||||||
Earnings from continuing operations | $ | 2.86 | $ | 2.18 | 31 | ||||
Discontinued operations | $ | — | $ | 0.01 | U | ||||
Net earnings | $ | 2.86 | $ | 2.19 | 31 | ||||
Weighted average shares outstanding: | |||||||||
Basic | 16,940 | 16,401 | |||||||
Diluted | 17,443 | 16,899 | |||||||
U: >100% unfavorable F: >100% favorable |
2012 | 2011 | % Change | |||||||
Net revenues from external customers: | |||||||||
Churchill Downs | $ | 102,874 | $ | 96,005 | 7 | ||||
Arlington Park | 22,807 | 22,050 | 3 | ||||||
Calder | 22,873 | 19,412 | 18 | ||||||
Fair Grounds | 11,886 | 10,904 | 9 | ||||||
Total Racing Operations | 160,440 | 148,371 | 8 | ||||||
Calder Casino | 19,188 | 21,711 | -12 | ||||||
Fair Grounds Slots | 9,586 | 9,458 | 1 | ||||||
VSI | 8,814 | 8,789 | — | ||||||
Harlow's Casino | 13,783 | 9,501 | 45 | ||||||
Total Gaming | 51,371 | 49,459 | 4 | ||||||
Online Business | 52,702 | 46,526 | 13 | ||||||
Other Investments | 5,967 | 5,192 | 15 | ||||||
Corporate | 336 | 138 | F | ||||||
Net revenues from external customers | $ | 270,816 | $ | 249,686 | 8 | ||||
Intercompany net revenues: | |||||||||
Churchill Downs | $ | 4,082 | $ | 3,464 | 18 | ||||
Arlington Park | 1,496 | 1,159 | 29 | ||||||
Calder | 586 | 486 | 21 | ||||||
Fair Grounds | 75 | — | F | ||||||
Total Racing Operations | 6,239 | 5,109 | 22 | ||||||
Online Business | 230 | 219 | 5 | ||||||
Other Investments | 1,072 | 606 | 77 | ||||||
Eliminations | (7,541 | ) | (5,934 | ) | (27) | ||||
Net revenues | $ | — | $ | — | — | ||||
Reconciliation of Segment EBITDA to net earnings: | |||||||||
Racing Operations | $ | 65,390 | $ | 58,815 | 11 | ||||
Gaming | 19,438 | 12,798 | 52 | ||||||
Online Business | 12,539 | 11,308 | 11 | ||||||
Other Investments | (104 | ) | 677 | U | |||||
Corporate | (1,969 | ) | 1,385 | U | |||||
Total EBITDA | 95,294 | 84,983 | 12 | ||||||
Depreciation and amortization | (13,638 | ) | (13,890 | ) | -2 | ||||
Interest income (expense), net | (947 | ) | (3,405 | ) | -72 | ||||
Income tax provision | (32,133 | ) | (27,698 | ) | 16 | ||||
Earnings from continuing operations | 48,576 | 39,990 | 21 | ||||||
Discontinued operations, net of income taxes | — | 157 | U | ||||||
Net earnings and comprehensive income | $ | 48,576 | $ | 40,147 | 21 | ||||
U: >100% unfavorable F: >100% favorable |
2012 | 2011 | % Change | |||||||
Net revenues from external customers: | |||||||||
Churchill Downs | $ | 105,424 | $ | 98,410 | 7 | ||||
Arlington Park | 32,224 | 31,398 | 3 | ||||||
Calder | 24,741 | 22,080 | 12 | ||||||
Fair Grounds | 28,233 | 28,194 | — | ||||||
Total Racing Operations | 190,622 | 180,082 | 6 | ||||||
Calder Casino | 41,067 | 42,323 | -3 | ||||||
Fair Grounds Slots | 21,617 | 21,630 | — | ||||||
VSI | 18,377 | 18,216 | 1 | ||||||
Harlow's Casino | 29,646 | 26,377 | 12 | ||||||
Total Gaming | 110,707 | 108,546 | 2 | ||||||
Online Business | 96,737 | 83,329 | 16 | ||||||
Other Investments | 10,469 | 9,074 | 15 | ||||||
Corporate | 477 | 209 | F | ||||||
Net revenues from external customers | $ | 409,012 | $ | 381,240 | 7 | ||||
Intercompany net revenues: | |||||||||
Churchill Downs | $ | 4,268 | $ | 3,612 | 18 | ||||
Arlington Park | 2,052 | 1,692 | 21 | ||||||
Calder | 596 | 547 | 9 | ||||||
Fair Grounds | 822 | 778 | 6 | ||||||
Total Racing Operations | 7,738 | 6,629 | 17 | ||||||
Online Business | 436 | 415 | 5 | ||||||
Other Investments | 1,822 | 759 | F | ||||||
Eliminations | (9,996 | ) | (7,803 | ) | (28) | ||||
Net revenues | $ | — | $ | — | — | ||||
Reconciliation of Segment EBITDA to net earnings: | |||||||||
Racing Operations | $ | 53,851 | $ | 46,327 | 16 | ||||
Gaming | 39,827 | 30,331 | 31 | ||||||
Online Business | 22,960 | 18,853 | 22 | ||||||
Other Investments | (434 | ) | 435 | U | |||||
Corporate | (3,570 | ) | 211 | U | |||||
Total EBITDA | 112,634 | 96,157 | 17 | ||||||
Depreciation and amortization | (27,445 | ) | (27,876 | ) | -2 | ||||
Interest income (expense), net | (2,152 | ) | (5,797 | ) | -63 | ||||
Income tax provision | (33,107 | ) | (25,680 | ) | 29 | ||||
Earnings from continuing operations | 49,930 | 36,804 | 36 | ||||||
Discontinued operations, net of income taxes | (1 | ) | 158 | U | |||||
Net earnings and comprehensive income | $ | 49,929 | $ | 36,962 | 35 | ||||
U: >100% unfavorable F: >100% favorable |
Three Months Ended | ||||||||||||||
June 30, | Change | |||||||||||||
2012 | 2011 | $ | % | |||||||||||
Racing Operations | $ | (5,202 | ) | $ | (4,528 | ) | $ | 674 | 15 | % | ||||
Gaming | (1,055 | ) | (880 | ) | 175 | 20 | % | |||||||
Online Business | (1,267 | ) | (1,058 | ) | 209 | 20 | % | |||||||
Other Investments | (151 | ) | (155 | ) | (4 | ) | (3 | )% | ||||||
Corporate Income | 7,675 | 6,621 | (1,054 | ) | 16 | % | ||||||||
Total management fees | $ | — | $ | — | $ | — |
Six Months Ended | ||||||||||||||
June 30, | Change | |||||||||||||
2012 | 2011 | $ | % | |||||||||||
Racing Operations | $ | (6,608 | ) | $ | (5,990 | ) | $ | 618 | 10 | % | ||||
Gaming | (3,688 | ) | (3,487 | ) | 201 | 6 | % | |||||||
Online Business | (3,230 | ) | (2,690 | ) | 540 | 20 | % | |||||||
Other Investments | (378 | ) | (356 | ) | 22 | 6 | % | |||||||
Corporate Income | 13,904 | 12,523 | (1,381 | ) | 11 | % | ||||||||
Total management fees | $ | — | $ | — | $ | — |
2012 | 2011 | ||||||
Cash flows from operating activities: | |||||||
Net earnings and comprehensive income | $ | 49,929 | $ | 36,962 | |||
Adjustments to reconcile net earnings and comprehensive income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 27,445 | 27,876 | |||||
Asset impairment loss | — | 157 | |||||
Gain on asset disposition | (27 | ) | (46 | ) | |||
Gain on sale of business | — | (271 | ) | ||||
Gain on derivative instruments | — | (3,096 | ) | ||||
Equity in loss (gain) of unconsolidated investments | 784 | (44 | ) | ||||
Share-based compensation | 4,414 | 2,966 | |||||
Deferred tax provision | — | (1,566 | ) | ||||
Other | 455 | 2,036 | |||||
Increase (decrease) in cash resulting from changes in operating assets and liabilities, net of business acquisition: | |||||||
Restricted cash | (2,409 | ) | (4,607 | ) | |||
Accounts receivable | (20,157 | ) | (7,810 | ) | |||
Other current assets | (4,013 | ) | (5,136 | ) | |||
Accounts payable | 6,488 | 8,930 | |||||
Purses payable | 2,944 | 6,028 | |||||
Accrued expenses | 3,798 | 6,247 | |||||
Deferred revenue | (7,061 | ) | 3,306 | ||||
Income taxes receivable and payable | 30,993 | 31,097 | |||||
Other assets and liabilities | 2,467 | 1,780 | |||||
Net cash provided by operating activities | 96,050 | 104,809 | |||||
Cash flows from investing activities: | |||||||
Additions to property and equipment | (16,473 | ) | (10,867 | ) | |||
Acquisition of business, net of cash | (6,728 | ) | — | ||||
Acquisition of gaming license | — | (2,250 | ) | ||||
Investment in joint venture | (5,400 | ) | — | ||||
Purchases of minority investments | (1,600 | ) | — | ||||
Assumption of note receivable | (1,100 | ) | — | ||||
Proceeds on sale of property and equipment | 88 | 46 | |||||
Proceeds from insurance recoveries | 9,870 | — | |||||
Change in deposit wagering asset | (6,651 | ) | (873 | ) | |||
Net cash used in investing activities | (27,994 | ) | (13,944 | ) | |||
Cash flows from financing activities: | |||||||
Borrowings on bank line of credit | 182,545 | 157,403 | |||||
Repayments on bank line of credit | (247,143 | ) | (237,560 | ) | |||
Change in bank overdraft | 1,280 | 1,159 | |||||
Payment of dividends | (10,110 | ) | (8,165 | ) | |||
Repurchase of common stock | (2,033 | ) | (445 | ) | |||
Common stock issued | 4,416 | — | |||||
Windfall tax benefit from share-based compensation | 640 | — | |||||
Change in deposit wagering liability | 6,811 | 873 | |||||
Net cash used in financing activities | (63,594 | ) | (86,735 | ) | |||
Net increase in cash and cash equivalents | 4,462 | 4,130 | |||||
Cash and cash equivalents, beginning of period | 27,325 | 26,901 | |||||
Cash and cash equivalents, end of period | $ | 31,787 | $ | 31,031 |
June 30, 2012 | December 31, 2011 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 31,787 | $ | 27,325 | |||
Restricted cash | 53,619 | 44,559 | |||||
Accounts receivable, net of allowance for doubtful accounts of $2,080 in 2012 and $2,408 in 2011 | 44,111 | 49,773 | |||||
Deferred income taxes | 8,018 | 8,727 | |||||
Income taxes receivable | — | 3,679 | |||||
Other current assets | 14,031 | 10,399 | |||||
Total current assets | 151,566 | 144,462 | |||||
Property and equipment, net | 471,954 | 477,356 | |||||
Goodwill | 217,741 | 213,712 | |||||
Other intangible assets, net | 103,237 | 103,827 | |||||
Other assets | 14,917 | 8,665 | |||||
Total assets | $ | 959,415 | $ | 948,022 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 68,930 | $ | 56,514 | |||
Bank overdraft | 6,753 | 5,473 | |||||
Purses payable | 23,009 | 20,066 | |||||
Accrued expenses | 49,358 | 47,816 | |||||
Income taxes payable | 27,314 | — | |||||
Dividends payable | — | 10,110 | |||||
Deferred revenue | 10,528 | 33,472 | |||||
Total current liabilities | 185,892 | 173,451 | |||||
Long-term debt | 62,964 | 127,563 | |||||
Other liabilities | 31,976 | 29,542 | |||||
Deferred revenue | 16,626 | 17,884 | |||||
Deferred income taxes | 16,356 | 15,552 | |||||
Total liabilities | 313,814 | 363,992 | |||||
Commitments and contingencies | |||||||
Shareholders' equity: | |||||||
Preferred stock, no par value; 250 shares authorized; no shares issued | — | — | |||||
Common stock, no par value; 50,000 shares authorized; 17,403 shares issued at June 30, 2012 and 17,178 shares issued at December 31, 2011 | 271,841 | 260,199 | |||||
Retained earnings | 373,760 | 323,831 | |||||
Total shareholders' equity | 645,601 | 584,030 | |||||
Total liabilities and shareholders' equity | $ | 959,415 | $ | 948,022 |
W^]<>48GZQA(UOYBZ]/DJ2B/!PHI0)CXJTS4[M]VP:Q>6:H_I;W!M_YQUV>U_>>S,SL:***Z0"BBB@`HHHH`***
M*`"BBB@`HHHH`****`"BBB@`HHHH`B3[HKQO]N3QTO@/]G/7@#B?5X_[/@3'
MWO,SY@_[]^97LM?&O_!4+X@>=J&@>%D\SRXH_P"UKC_GE_RTCC_]J5\9QSF'
MU+)ZU0[LKH>VQ$8'JO\`P3YA$/[->EA.GVJ[_P#2@U[JO$AKPS_@GL/^,9M,
M39Y?^E7G'_;S+7N;=37=PK+FR?#R_NHC'*V(FC%\7:[!X;\-WU_=/Y4%E!)/
M(?\`83DUYA^PK>W.L?LYZ7?7