(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||||||||
, | ||||||||||||||||||||
(Address of Principal Executive Offices) | (Zip Code) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule l4a-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)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |||||
Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ |
(d) | Exhibits | ||||||||||
The following is being furnished as an exhibit to the Current Report on Form 8-K. | |||||||||||
Exhibit Number | Description | ||||||||||
Press Release dated July 28, 2021 issued by Churchill Downs Incorporated | |||||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
CHURCHILL DOWNS INCORPORATED | ||||||||
July 28, 2021 | /s/ Marcia. A Dall | |||||||
By: Marcia A. Dall | ||||||||
Title: Executive Vice President and Chief Financial Officer | ||||||||
(Principal Financial and Accounting Officer) |
CONSOLIDATED RESULTS | Second Quarter | ||||||||||
(in millions, except per share data) | 2021 | 2020 | |||||||||
Net revenue | $ | 515.1 | $ | 185.1 | |||||||
Net income (loss)(a) | $ | 108.3 | $ | (118.8) | |||||||
Diluted EPS(a) | $ | 2.76 | $ | (3.00) | |||||||
Adjusted net income (loss)(a)(b) | $ | 121.1 | $ | (21.1) | |||||||
Adjusted diluted EPS(a)(b) | $ | 3.08 | $ | (0.53) | |||||||
Adjusted EBITDA(b) | $ | 233.3 | $ | 30.1 | |||||||
(a) Reflects amounts attributable to Churchill Downs Incorporated. | |||||||||||
(b) These are non-GAAP measures. See explanation of non-GAAP measures below. |
Live and Historical Racing | Second Quarter | ||||||||||
(in millions) | 2021 | 2020 | |||||||||
Net revenue | $ | 190.5 | $ | 30.3 | |||||||
Adjusted EBITDA | 98.4 | 3.6 | |||||||||
TwinSpires | Second Quarter | ||||||||||
(in millions) | 2021 | 2020 | |||||||||
Net revenue | $ | 135.9 | $ | 121.7 | |||||||
Adjusted EBITDA | 23.1 | 38.7 | |||||||||
Gaming | Second Quarter | ||||||||||
(in millions) | 2021 | 2020 | |||||||||
Net revenue | $ | 186.0 | $ | 37.3 | |||||||
Adjusted EBITDA | 119.8 | (1.8) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions, except per common share data) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Net revenue: | |||||||||||||||||||||||
Live and Historical Racing | $ | 175.9 | $ | 23.3 | $ | 239.1 | $ | 51.4 | |||||||||||||||
TwinSpires | 135.6 | 121.3 | 235.3 | 190.4 | |||||||||||||||||||
Gaming | 186.0 | 37.3 | 338.0 | 183.2 | |||||||||||||||||||
All Other | 17.6 | 3.2 | 27.0 | 13.0 | |||||||||||||||||||
Total net revenue | 515.1 | 185.1 | 839.4 | 438.0 | |||||||||||||||||||
Operating expense: | |||||||||||||||||||||||
Live and Historical Racing | 100.3 | 33.1 | 155.0 | 66.2 | |||||||||||||||||||
TwinSpires | 96.8 | 74.7 | 169.8 | 125.5 | |||||||||||||||||||
Gaming | 121.0 | 45.5 | 227.3 | 169.6 | |||||||||||||||||||
All Other | 17.0 | 9.6 | 30.3 | 24.2 | |||||||||||||||||||
Selling, general and administrative expense | 33.4 | 22.4 | 63.6 | 46.5 | |||||||||||||||||||
Asset impairments | 11.2 | — | 11.2 | 17.5 | |||||||||||||||||||
Transaction expense, net | — | 0.2 | 0.1 | 0.5 | |||||||||||||||||||
Total operating expense | 379.7 | 185.5 | 657.3 | 450.0 | |||||||||||||||||||
Operating income (loss) | 135.4 | (0.4) | 182.1 | (12.0) | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest expense, net | (22.0) | (20.3) | (41.4) | (39.6) | |||||||||||||||||||
Equity in income (loss) of unconsolidated affiliates | 36.4 | (11.1) | 61.3 | (14.4) | |||||||||||||||||||
Miscellaneous, net | 0.1 | 0.3 | 0.2 | 0.3 | |||||||||||||||||||
Total other income (expense) | 14.5 | (31.1) | 20.1 | (53.7) | |||||||||||||||||||
Income (loss) from continuing operations before (provision) benefit for income taxes | 149.9 | (31.5) | 202.2 | (65.7) | |||||||||||||||||||
Income tax (provision) benefit | (41.6) | 7.9 | (57.8) | 19.5 | |||||||||||||||||||
Income (loss) from continuing operations, net of tax | 108.3 | (23.6) | 144.4 | (46.2) | |||||||||||||||||||
Loss from discontinued operations, net of tax | — | (95.2) | — | (96.1) | |||||||||||||||||||
Net income (loss) | 108.3 | (118.8) | 144.4 | (142.3) | |||||||||||||||||||
Net loss attributable to noncontrolling interest | — | — | — | (0.1) | |||||||||||||||||||
Net income (loss) and comprehensive income (loss) attributable to Churchill Downs Incorporated | $ | 108.3 | $ | (118.8) | $ | 144.4 | $ | (142.2) | |||||||||||||||
Net income (loss) per common share data - basic: | |||||||||||||||||||||||
Continuing operations | $ | 2.80 | $ | (0.59) | $ | 3.72 | $ | (1.16) | |||||||||||||||
Discontinued operations | $ | — | $ | (2.41) | $ | — | $ | (2.43) | |||||||||||||||
Net income (loss) per common share data - basic | $ | 2.80 | $ | (3.00) | $ | 3.72 | $ | (3.59) | |||||||||||||||
Net income (loss) per common share data - diluted: | |||||||||||||||||||||||
Continuing operations | $ | 2.76 | $ | (0.59) | $ | 3.66 | $ | (1.16) | |||||||||||||||
Discontinued operations | $ | — | $ | (2.41) | $ | — | $ | (2.43) | |||||||||||||||
Net income (loss) per common share data - diluted | $ | 2.76 | $ | (3.00) | $ | 3.66 | $ | (3.59) | |||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | 38.7 | 39.5 | 38.8 | 39.6 | |||||||||||||||||||
Diluted | 39.3 | 39.5 | 39.4 | 39.6 |
(in millions) | June 30, 2021 | December 31, 2020 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 342.2 | $ | 67.4 | |||||||
Restricted cash | 69.2 | 53.6 | |||||||||
Accounts receivable, net | 50.4 | 36.5 | |||||||||
Income taxes receivable | 39.1 | 49.4 | |||||||||
Other current assets | 31.7 | 28.2 | |||||||||
Total current assets | 532.6 | 235.1 | |||||||||
Property and equipment, net | 1,057.6 | 1,082.1 | |||||||||
Investment in and advances to unconsolidated affiliates | 644.6 | 630.6 | |||||||||
Goodwill | 366.8 | 366.8 | |||||||||
Other intangible assets, net | 348.2 | 350.6 | |||||||||
Other assets | 20.8 | 21.2 | |||||||||
Total assets | $ | 2,970.6 | $ | 2,686.4 | |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 124.5 | $ | 70.7 | |||||||
Accrued expenses and other current liabilities | 214.9 | 167.8 | |||||||||
Current deferred revenue | 23.1 | 32.8 | |||||||||
Current maturities of long-term debt | 7.0 | 4.0 | |||||||||
Dividends payable | — | 24.9 | |||||||||
Current liabilities of discontinued operations | — | 124.0 | |||||||||
Total current liabilities | 369.5 | 424.2 | |||||||||
Long-term debt, net of current maturities and loan origination fees | 671.4 | 530.5 | |||||||||
Notes payable, net of debt issuance costs | 1,291.7 | 1,087.8 | |||||||||
Non-current deferred revenue | 14.4 | 17.1 | |||||||||
Deferred income taxes | 250.5 | 213.9 | |||||||||
Other liabilities | 55.7 | 45.8 | |||||||||
Total liabilities | 2,653.2 | 2,319.3 | |||||||||
Commitments and contingencies | |||||||||||
Shareholders' equity: | |||||||||||
Preferred stock | — | — | |||||||||
Common stock | 8.8 | 18.2 | |||||||||
Retained earnings | 309.5 | 349.8 | |||||||||
Accumulated other comprehensive loss | (0.9) | (0.9) | |||||||||
Total shareholders' equity | 317.4 | 367.1 | |||||||||
Total liabilities and shareholders' equity | $ | 2,970.6 | $ | 2,686.4 |
Six Months Ended June 30, | |||||||||||
(in millions) | 2021 | 2020 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | 144.4 | $ | (142.3) | |||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 52.0 | 44.1 | |||||||||
Distributions from unconsolidated affiliates | 47.5 | 4.8 | |||||||||
Equity in (income) loss of unconsolidated affiliates | (61.3) | 14.4 | |||||||||
Stock-based compensation | 12.6 | 10.4 | |||||||||
Deferred income taxes | 7.4 | (24.8) | |||||||||
Asset impairments | 11.2 | 17.5 | |||||||||
Amortization of operating lease assets | 2.7 | 2.5 | |||||||||
Other | 3.1 | 1.8 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Income taxes | 39.5 | (22.4) | |||||||||
Deferred revenue | (12.6) | 43.5 | |||||||||
Current liabilities of discontinued operations | (124.0) | 124.0 | |||||||||
Other assets and liabilities | 87.8 | 3.4 | |||||||||
Net cash provided by operating activities | 210.3 | 76.9 | |||||||||
Cash flows from investing activities: | |||||||||||
Capital maintenance expenditures | (13.7) | (13.2) | |||||||||
Capital project expenditures | (15.9) | (118.1) | |||||||||
Other | (0.9) | (0.5) | |||||||||
Net cash used in investing activities | (30.5) | (131.8) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from borrowings under long-term debt obligations | 780.8 | 726.1 | |||||||||
Repayments of borrowings under long-term debt obligations | (427.4) | (33.4) | |||||||||
Payment of dividends | (24.8) | (23.4) | |||||||||
Repurchase of common stock | (193.9) | (28.4) | |||||||||
Cash settlement of stock awards | — | (12.7) | |||||||||
Taxes paid related to net share settlement of stock awards | (12.6) | (15.1) | |||||||||
Debt issuance costs | (6.8) | (1.7) | |||||||||
Change in bank overdraft | (6.1) | — | |||||||||
Other | 1.4 | — | |||||||||
Net cash provided by financing activities | 110.6 | 611.4 | |||||||||
Net increase in cash, cash equivalents and restricted cash | 290.4 | 556.5 | |||||||||
Cash, cash equivalents and restricted cash, beginning of period | 121.0 | 142.5 | |||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 411.4 | $ | 699.0 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
GAAP net income (loss) attributable to Churchill Downs Incorporated | $ | 108.3 | $ | (118.8) | $ | 144.4 | $ | (142.2) | |||||||||||||||
Adjustments, continuing operations: | |||||||||||||||||||||||
Changes in fair value of interest rate swaps related to Rivers Des Plaines | (1.8) | 1.3 | (6.0) | 16.2 | |||||||||||||||||||
Legal reserves and transaction costs related to Rivers Des Plaines | 6.7 | — | 8.0 | — | |||||||||||||||||||
Transaction, pre-opening, and other expense | 1.7 | 2.1 | 2.4 | 4.1 | |||||||||||||||||||
Asset impairments | 11.2 | — | 11.2 | 17.5 | |||||||||||||||||||
Income tax impact on net income (loss) adjustments (a) | (5.0) | (0.9) | (4.3) | (10.7) | |||||||||||||||||||
Total adjustments, continuing operations | 12.8 | 2.5 | 11.3 | 27.1 | |||||||||||||||||||
Big Fish Games net loss (b) | — | 95.2 | — | 96.1 | |||||||||||||||||||
Total adjustments | 12.8 | 97.7 | 11.3 | 123.2 | |||||||||||||||||||
Adjusted net income (loss) attributable to Churchill Downs Incorporated | $ | 121.1 | $ | (21.1) | $ | 155.7 | $ | (19.0) | |||||||||||||||
Adjusted diluted EPS | $ | 3.08 | $ | (0.53) | $ | 3.95 | $ | (0.48) | |||||||||||||||
Weighted average shares outstanding - Diluted (c) | 39.3 | 39.5 | 39.4 | 39.6 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Total Handle | |||||||||||||||||||||||
Churchill Downs Racetrack | $ | 529.4 | $ | 242.8 | $ | 533.2 | $ | 248.0 | |||||||||||||||
TwinSpires Horse Racing(a) | 620.4 | 569.5 | 1,063.5 | 899.3 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Net revenue from external customers: | |||||||||||||||||||||||
Live and Historical Racing: | |||||||||||||||||||||||
Churchill Downs Racetrack | $ | 105.2 | $ | 15.6 | $ | 107.2 | $ | 17.5 | |||||||||||||||
Derby City Gaming | 39.9 | 7.7 | 72.8 | 29.3 | |||||||||||||||||||
Oak Grove | 25.6 | — | 45.0 | — | |||||||||||||||||||
Turfway Park | 0.7 | — | 5.1 | 4.6 | |||||||||||||||||||
Newport | 4.5 | — | 9.0 | — | |||||||||||||||||||
Total Live and Historical Racing | 175.9 | 23.3 | 239.1 | 51.4 | |||||||||||||||||||
TwinSpires: | |||||||||||||||||||||||
Horse Racing | 127.2 | 119.9 | 219.9 | 186.5 | |||||||||||||||||||
Sports and Casino | 8.4 | 1.4 | 15.4 | 3.9 | |||||||||||||||||||
Total TwinSpires | 135.6 | 121.3 | 235.3 | 190.4 | |||||||||||||||||||
Gaming: | |||||||||||||||||||||||
Fair Grounds and VSI | 35.1 | 11.1 | 73.4 | 42.7 | |||||||||||||||||||
Presque Isle | 30.5 | 1.9 | 54.3 | 28.9 | |||||||||||||||||||
Calder | 27.4 | 5.7 | 48.3 | 27.5 | |||||||||||||||||||
Ocean Downs | 27.0 | 3.1 | 47.0 | 17.9 | |||||||||||||||||||
Oxford Casino | 24.6 | 0.1 | 40.3 | 20.2 | |||||||||||||||||||
Riverwalk Casino | 18.4 | 7.4 | 32.8 | 19.4 | |||||||||||||||||||
Harlow’s Casino | 16.6 | 5.7 | 30.6 | 17.0 | |||||||||||||||||||
Lady Luck Nemacolin | 6.4 | 2.3 | 11.3 | 9.6 | |||||||||||||||||||
Total Gaming | 186.0 | 37.3 | 338.0 | 183.2 | |||||||||||||||||||
All Other | 17.6 | 3.2 | 27.0 | 13.0 | |||||||||||||||||||
Net revenue from external customers | $ | 515.1 | $ | 185.1 | $ | 839.4 | $ | 438.0 | |||||||||||||||
Intercompany net revenue: | |||||||||||||||||||||||
Live and Historical Racing | $ | 14.6 | $ | 7.0 | $ | 16.1 | $ | 8.0 | |||||||||||||||
TwinSpires | 0.3 | 0.4 | 0.7 | 0.7 | |||||||||||||||||||
Gaming | — | — | 2.0 | 1.5 | |||||||||||||||||||
All Other | 3.9 | 2.8 | 6.6 | 5.2 | |||||||||||||||||||
Eliminations | (18.8) | (10.2) | (25.4) | (15.4) | |||||||||||||||||||
Intercompany net revenue | $ | — | $ | — | $ | — | $ | — |
Three Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Total | |||||||||||||||||||||||||||||
Net revenue from external customers | |||||||||||||||||||||||||||||||||||
Pari-mutuel: | |||||||||||||||||||||||||||||||||||
Live and simulcast racing | $ | 39.6 | $ | 121.6 | $ | 4.4 | $ | 165.6 | $ | 9.5 | $ | 175.1 | |||||||||||||||||||||||
Historical racing(a) | 64.9 | — | — | 64.9 | — | 64.9 | |||||||||||||||||||||||||||||
Racing event-related services | 63.5 | — | 0.2 | 63.7 | 1.9 | 65.6 | |||||||||||||||||||||||||||||
Gaming(a) | — | 8.4 | 170.2 | 178.6 | — | 178.6 | |||||||||||||||||||||||||||||
Other(a) | 7.9 | 5.6 | 11.2 | 24.7 | 6.2 | 30.9 | |||||||||||||||||||||||||||||
Total | $ | 175.9 | $ | 135.6 | $ | 186.0 | $ | 497.5 | $ | 17.6 | $ | 515.1 |
Three Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Total | |||||||||||||||||||||||||||||
Net revenue from external customers | |||||||||||||||||||||||||||||||||||
Pari-mutuel: | |||||||||||||||||||||||||||||||||||
Live and simulcast racing | $ | 14.9 | $ | 115.6 | $ | 1.7 | $ | 132.2 | $ | 0.8 | $ | 133.0 | |||||||||||||||||||||||
Historical racing(a) | 7.3 | — | — | 7.3 | — | 7.3 | |||||||||||||||||||||||||||||
Racing event-related services | 0.5 | — | 0.7 | 1.2 | — | 1.2 | |||||||||||||||||||||||||||||
Gaming(a) | — | 1.4 | 33.4 | 34.8 | — | 34.8 | |||||||||||||||||||||||||||||
Other(a) | 0.6 | 4.3 | 1.5 | 6.4 | 2.4 | 8.8 | |||||||||||||||||||||||||||||
Total | $ | 23.3 | $ | 121.3 | $ | 37.3 | $ | 181.9 | $ | 3.2 | $ | 185.1 |
Six Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Total | |||||||||||||||||||||||||||||
Net revenue from external customers | |||||||||||||||||||||||||||||||||||
Pari-mutuel: | |||||||||||||||||||||||||||||||||||
Live and simulcast racing | $ | 45.5 | $ | 210.8 | $ | 16.1 | $ | 272.4 | $ | 14.6 | $ | 287.0 | |||||||||||||||||||||||
Historical racing(a) | 117.8 | — | — | 117.8 | — | 117.8 | |||||||||||||||||||||||||||||
Racing event-related services | 63.5 | — | 0.9 | 64.4 | 1.9 | 66.3 | |||||||||||||||||||||||||||||
Gaming(a) | — | 15.4 | 302.7 | 318.1 | — | 318.1 | |||||||||||||||||||||||||||||
Other(a) | 12.3 | 9.1 | 18.3 | 39.7 | 10.5 | 50.2 | |||||||||||||||||||||||||||||
Total | $ | 239.1 | $ | 235.3 | $ | 338.0 | $ | 812.4 | $ | 27.0 | $ | 839.4 |
Six Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total segment | All Other | Total | |||||||||||||||||||||||||||||
Net revenue from external customers | |||||||||||||||||||||||||||||||||||
Pari-mutuel: | |||||||||||||||||||||||||||||||||||
Live and simulcast racing | $ | 20.1 | $ | 179.5 | $ | 11.6 | $ | 211.2 | $ | 6.5 | $ | 217.7 | |||||||||||||||||||||||
Historical racing(a) | 27.7 | — | — | 27.7 | — | 27.7 | |||||||||||||||||||||||||||||
Racing event-related services | 0.5 | — | 2.0 | 2.5 | 0.1 | 2.6 | |||||||||||||||||||||||||||||
Gaming(a) | — | 3.9 | 153.2 | 157.1 | — | 157.1 | |||||||||||||||||||||||||||||
Other(a) | 3.1 | 7.0 | 16.4 | 26.5 | 6.4 | 32.9 | |||||||||||||||||||||||||||||
Total | $ | 51.4 | $ | 190.4 | $ | 183.2 | $ | 425.0 | $ | 13.0 | $ | 438.0 |
Three Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Eliminations | Total | ||||||||||||||||||||||||||||||||||
Net revenue | $ | 190.5 | $ | 135.9 | $ | 186.0 | $ | 512.4 | $ | 21.5 | $ | (18.8) | $ | 515.1 | |||||||||||||||||||||||||||
Taxes and purses | (50.8) | (8.3) | (70.0) | (129.1) | (3.9) | — | (133.0) | ||||||||||||||||||||||||||||||||||
Marketing and advertising | (4.9) | (16.7) | (2.5) | (24.1) | — | — | (24.1) | ||||||||||||||||||||||||||||||||||
Salaries and benefits | (15.3) | (3.2) | (20.6) | (39.1) | (5.9) | — | (45.0) | ||||||||||||||||||||||||||||||||||
Content expense | (0.8) | (68.5) | (1.3) | (70.6) | (1.8) | 18.4 | (54.0) | ||||||||||||||||||||||||||||||||||
Selling, general and administrative expense | (3.1) | (2.4) | (5.9) | (11.4) | (13.9) | 0.4 | (24.9) | ||||||||||||||||||||||||||||||||||
Other operating expense | (17.3) | (13.7) | (17.7) | (48.7) | (4.0) | — | (52.7) | ||||||||||||||||||||||||||||||||||
Other income | 0.1 | — | 51.8 | 51.9 | — | — | 51.9 | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 98.4 | $ | 23.1 | $ | 119.8 | $ | 241.3 | $ | (8.0) | $ | — | $ | 233.3 |
Three Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Eliminations | Total | ||||||||||||||||||||||||||||||||||
Net revenue | $ | 30.3 | $ | 121.7 | $ | 37.3 | $ | 189.3 | $ | 6.0 | $ | (10.2) | $ | 185.1 | |||||||||||||||||||||||||||
Taxes and purses | (14.0) | (6.7) | (14.3) | (35.0) | (1.6) | — | (36.6) | ||||||||||||||||||||||||||||||||||
Marketing and advertising | (0.3) | (2.9) | (0.4) | (3.6) | — | — | (3.6) | ||||||||||||||||||||||||||||||||||
Salaries and benefits | (5.3) | (3.0) | (9.0) | (17.3) | (3.0) | — | (20.3) | ||||||||||||||||||||||||||||||||||
Content expense | (0.1) | (59.1) | (0.4) | (59.6) | (0.1) | 9.7 | (50.0) | ||||||||||||||||||||||||||||||||||
Selling, general and administrative expense | (1.2) | (1.7) | (3.9) | (6.8) | (9.0) | 0.5 | (15.3) | ||||||||||||||||||||||||||||||||||
Other operating expense | (5.8) | (9.7) | (11.0) | (26.5) | (2.9) | — | (29.4) | ||||||||||||||||||||||||||||||||||
Other income | — | 0.1 | (0.1) | — | 0.2 | — | 0.2 | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 3.6 | $ | 38.7 | $ | (1.8) | $ | 40.5 | $ | (10.4) | $ | — | $ | 30.1 |
Six Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Eliminations | Total | ||||||||||||||||||||||||||||||||||
Net revenue | $ | 255.2 | $ | 236.0 | $ | 340.0 | $ | 831.2 | $ | 33.6 | $ | (25.4) | $ | 839.4 | |||||||||||||||||||||||||||
Taxes and purses | (70.8) | (14.7) | (129.3) | (214.8) | (7.0) | — | (221.8) | ||||||||||||||||||||||||||||||||||
Marketing and advertising | (7.0) | (25.2) | (3.9) | (36.1) | (0.1) | — | (36.2) | ||||||||||||||||||||||||||||||||||
Salaries and benefits | (25.3) | (6.3) | (40.5) | (72.1) | (10.2) | — | (82.3) | ||||||||||||||||||||||||||||||||||
Content expense | (1.4) | (115.0) | (2.3) | (118.7) | (3.1) | 24.6 | (97.2) | ||||||||||||||||||||||||||||||||||
Selling, general and administrative expense | (6.1) | (4.6) | (11.9) | (22.6) | (26.9) | 0.7 | (48.8) | ||||||||||||||||||||||||||||||||||
Other operating expense | (28.0) | (24.6) | (33.2) | (85.8) | (7.0) | 0.1 | (92.7) | ||||||||||||||||||||||||||||||||||
Other income | 0.1 | — | 83.3 | 83.4 | 0.1 | — | 83.5 | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 116.7 | $ | 45.6 | $ | 202.2 | $ | 364.5 | $ | (20.6) | $ | — | $ | 343.9 |
Six Months Ended June 30, 2020 | |||||||||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Eliminations | Total | ||||||||||||||||||||||||||||||||||
Net revenue | $ | 59.4 | $ | 191.1 | $ | 184.7 | $ | 435.2 | $ | 18.2 | $ | (15.4) | $ | 438.0 | |||||||||||||||||||||||||||
Taxes and purses | (23.5) | (11.0) | (73.0) | (107.5) | (4.8) | — | (112.3) | ||||||||||||||||||||||||||||||||||
Marketing and advertising | (1.5) | (6.4) | (5.7) | (13.6) | (0.1) | 0.2 | (13.5) | ||||||||||||||||||||||||||||||||||
Salaries and benefits | (12.5) | (6.5) | (38.5) | (57.5) | (8.1) | — | (65.6) | ||||||||||||||||||||||||||||||||||
Content expense | (0.8) | (91.7) | (1.4) | (93.9) | (1.4) | 14.4 | (80.9) | ||||||||||||||||||||||||||||||||||
Selling, general and administrative expense | (2.9) | (3.1) | (10.6) | (16.6) | (17.7) | 0.7 | (33.6) | ||||||||||||||||||||||||||||||||||
Other operating expense | (13.6) | (17.8) | (30.5) | (61.9) | (6.3) | 0.1 | (68.1) | ||||||||||||||||||||||||||||||||||
Other income | — | 0.1 | 21.1 | 21.2 | 0.2 | — | 21.4 | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 4.6 | $ | 54.7 | $ | 46.1 | $ | 105.4 | $ | (20.0) | $ | — | $ | 85.4 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Reconciliation of Comprehensive Income (Loss) to Adjusted EBITDA: | |||||||||||||||||||||||
Net income (loss) attributable to Churchill Downs Incorporated | $ | 108.3 | $ | (118.8) | $ | 144.4 | $ | (142.2) | |||||||||||||||
Net loss attributable to noncontrolling interest | — | — | — | 0.1 | |||||||||||||||||||
Net income (loss) before noncontrolling interest | 108.3 | (118.8) | 144.4 | (142.3) | |||||||||||||||||||
Loss from discontinued operations, net of tax | — | 95.2 | — | 96.1 | |||||||||||||||||||
Income (loss) from continuing operations, net of tax | 108.3 | (23.6) | 144.4 | (46.2) | |||||||||||||||||||
Additions: | |||||||||||||||||||||||
Depreciation and amortization | 26.0 | 22.1 | 52.0 | 44.1 | |||||||||||||||||||
Interest expense | 22.0 | 20.3 | 41.4 | 39.6 | |||||||||||||||||||
Income tax provision (benefit) | 41.6 | (7.9) | 57.8 | (19.5) | |||||||||||||||||||
EBITDA | $ | 197.9 | $ | 10.9 | $ | 295.6 | $ | 18.0 | |||||||||||||||
Adjustments to EBITDA: | |||||||||||||||||||||||
Selling, general and administrative: | |||||||||||||||||||||||
Stock-based compensation expense | $ | 7.1 | $ | 6.1 | $ | 12.6 | $ | 10.4 | |||||||||||||||
Other charges | 0.2 | (0.1) | 0.2 | (0.1) | |||||||||||||||||||
Pre-opening expense and other expense | 1.5 | 1.9 | 2.1 | 3.6 | |||||||||||||||||||
Asset impairments | 11.2 | — | 11.2 | 17.5 | |||||||||||||||||||
Transaction expense, net | — | 0.2 | 0.1 | 0.5 | |||||||||||||||||||
Other income, expense: | |||||||||||||||||||||||
Interest, depreciation and amortization expense related to equity investments | 10.5 | 9.8 | 20.1 | 19.3 | |||||||||||||||||||
Changes in fair value of Rivers Des Plaines' interest rate swaps | (1.8) | 1.3 | (6.0) | 16.2 | |||||||||||||||||||
Rivers Des Plaines' legal reserves and transaction costs | 6.7 | — | 8.0 | — | |||||||||||||||||||
Total adjustments to EBITDA | 35.4 | 19.2 | 48.3 | 67.4 | |||||||||||||||||||
Adjusted EBITDA | $ | 233.3 | $ | 30.1 | $ | 343.9 | $ | 85.4 | |||||||||||||||
Adjusted EBITDA by segment: | |||||||||||||||||||||||
Live and Historical Racing | $ | 98.4 | $ | 3.6 | $ | 116.7 | $ | 4.6 | |||||||||||||||
TwinSpires | 23.1 | 38.7 | 45.6 | 54.7 | |||||||||||||||||||
Gaming | 119.8 | (1.8) | 202.2 | 46.1 | |||||||||||||||||||
Total segment Adjusted EBITDA | 241.3 | 40.5 | 364.5 | 105.4 | |||||||||||||||||||
All Other | (8.0) | (10.4) | (20.6) | (20.0) | |||||||||||||||||||
Total Adjusted EBITDA | $ | 233.3 | $ | 30.1 | $ | 343.9 | $ | 85.4 |
Summarized Income Statement | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in millions) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
Net revenue | $ | 197.9 | $ | 6.8 | $ | 336.6 | $ | 144.6 | |||||||||||||||
Operating and SG&A expense | 109.8 | 7.2 | 195.4 | 108.0 | |||||||||||||||||||
Depreciation and amortization | 4.4 | 4.1 | 8.7 | 8.3 | |||||||||||||||||||
Total operating expense | 114.2 | 11.3 | 204.1 | 116.3 | |||||||||||||||||||
Operating income (loss) | 83.7 | (4.5) | 132.5 | 28.3 | |||||||||||||||||||
Interest and other expense, net | (19.7) | (13.4) | (24.3) | (49.2) | |||||||||||||||||||
Net income (loss) | $ | 64.0 | $ | (17.9) | $ | 108.2 | $ | (20.9) |
Summarized Balance Sheet | |||||||||||
(in millions) | June 30, 2021 | December 31, 2020 | |||||||||
Assets | |||||||||||
Current assets | $ | 86.3 | $ | 132.8 | |||||||
Property and equipment, net | 268.1 | 267.5 | |||||||||
Other assets, net | 266.3 | 244.9 | |||||||||
Total assets | $ | 620.7 | $ | 645.2 | |||||||
Liabilities and Members' Deficit | |||||||||||
Current liabilities | $ | 78.0 | $ | 133.5 | |||||||
Long-term debt | 772.0 | 753.5 | |||||||||
Other liabilities | 32.7 | 42.3 | |||||||||
Members' deficit | (262.0) | (284.1) | |||||||||
Total liabilities and members' deficit | $ | 620.7 | $ | 645.2 |
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