(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 October 26, 2022 issued by Churchill Downs Incorporated | |||||||||||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
CHURCHILL DOWNS INCORPORATED | ||||||||
October 26, 2022 | /s/ Marcia. A Dall | |||||||
By: Marcia A. Dall | ||||||||
Title: Executive Vice President and Chief Financial Officer | ||||||||
(Principal Financial and Accounting Officer) |
CONSOLIDATED RESULTS |
Third Quarter | |||||||||||
(in millions, except per share data) | 2022 | 2021 | |||||||||
Net revenue | $ | 383.1 | $ | 393.0 | |||||||
Net income | $ | 57.0 | $ | 61.4 | |||||||
Diluted EPS | $ | 1.49 | $ | 1.57 | |||||||
Adjusted EBITDA(a) | $ | 163.2 | $ | 156.1 | |||||||
(a) This is a non-GAAP measure. See explanation of non-GAAP measures below. |
SEGMENT RESULTS |
Third Quarter | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Net revenue | $ | 102.4 | $ | 81.5 | |||||||
Adjusted EBITDA | 34.5 | 27.7 | |||||||||
Third Quarter | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Net revenue | $ | 107.4 | $ | 109.0 | |||||||
Adjusted EBITDA | 31.1 | 22.1 | |||||||||
Third Quarter | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Net revenue | $ | 185.9 | $ | 185.6 | |||||||
Adjusted EBITDA | 111.6 | 110.7 |
ACQUISITION / DISPOSITION UPDATE |
CAPITAL MANAGEMENT |
NET INCOME |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions, except per common share data) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Net revenue: | |||||||||||||||||||||||
Live and Historical Racing | $ | 92.3 | $ | 79.7 | $ | 439.2 | $ | 318.8 | |||||||||||||||
TwinSpires | 106.2 | 107.5 | 343.3 | 351.8 | |||||||||||||||||||
Gaming | 183.4 | 185.3 | 545.0 | 523.3 | |||||||||||||||||||
All Other | 1.2 | 20.5 | 2.2 | 38.5 | |||||||||||||||||||
Total net revenue | 383.1 | 393.0 | 1,329.7 | 1,232.4 | |||||||||||||||||||
Operating expense: | |||||||||||||||||||||||
Live and Historical Racing | 80.1 | 62.3 | 269.2 | 217.3 | |||||||||||||||||||
TwinSpires | 64.5 | 83.0 | 229.6 | 262.6 | |||||||||||||||||||
Gaming | 133.0 | 127.7 | 387.0 | 355.0 | |||||||||||||||||||
All Other | 2.9 | 14.3 | 8.8 | 34.8 | |||||||||||||||||||
Selling, general and administrative expense | 38.4 | 36.1 | 112.7 | 99.7 | |||||||||||||||||||
Asset impairments | — | — | 4.9 | 11.2 | |||||||||||||||||||
Transaction expense, net | 1.2 | 2.0 | 7.4 | 2.1 | |||||||||||||||||||
Total operating expense | 320.1 | 325.4 | 1,019.6 | 982.7 | |||||||||||||||||||
Operating income | 63.0 | 67.6 | 310.1 | 249.7 | |||||||||||||||||||
Other income (expense): | |||||||||||||||||||||||
Interest expense, net | (36.2) | (21.7) | (92.6) | (63.1) | |||||||||||||||||||
Equity in income of unconsolidated affiliates | 42.4 | 41.7 | 115.4 | 103.0 | |||||||||||||||||||
Gain on Calder land sale | — | — | 274.6 | — | |||||||||||||||||||
Miscellaneous, net | 4.2 | 0.1 | 4.4 | 0.3 | |||||||||||||||||||
Total other income | 10.4 | 20.1 | 301.8 | 40.2 | |||||||||||||||||||
Income from operations before provision for income taxes | 73.4 | 87.7 | 611.9 | 289.9 | |||||||||||||||||||
Income tax provision | (16.4) | (26.3) | (173.5) | (84.1) | |||||||||||||||||||
Net income | $ | 57.0 | $ | 61.4 | $ | 438.4 | $ | 205.8 | |||||||||||||||
Net income per common share data: | |||||||||||||||||||||||
Basic net income | $ | 1.51 | $ | 1.59 | $ | 11.52 | $ | 5.31 | |||||||||||||||
Diluted net income | $ | 1.49 | $ | 1.57 | $ | 11.36 | $ | 5.23 | |||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | 37.8 | 38.6 | 38.1 | 38.7 | |||||||||||||||||||
Diluted | 38.4 | 39.2 | 38.6 | 39.3 |
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 110.6 | $ | 291.3 | |||||||
Restricted cash | 1,582.6 | 64.3 | |||||||||
Accounts receivable, net | 69.4 | 42.3 | |||||||||
Income taxes receivable | — | 66.0 | |||||||||
Other current assets | 43.7 | 37.6 | |||||||||
Total current assets | 1,806.3 | 501.5 | |||||||||
Property and equipment, net | 1,240.9 | 994.9 | |||||||||
Investment in and advances to unconsolidated affiliates | 661.0 | 663.6 | |||||||||
Goodwill | 375.7 | 366.8 | |||||||||
Other intangible assets, net | 485.0 | 348.1 | |||||||||
Other assets | 23.2 | 18.9 | |||||||||
Long-term assets held for sale | 82.0 | 87.8 | |||||||||
Total assets | $ | 4,674.1 | $ | 2,981.6 | |||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 109.1 | $ | 81.6 | |||||||
Accrued expenses and other current liabilities | 300.2 | 231.7 | |||||||||
Income taxes payable | 60.9 | 0.9 | |||||||||
Current deferred revenue | 14.5 | 47.7 | |||||||||
Current maturities of long-term debt | 7.0 | 7.0 | |||||||||
Dividends payable | — | 26.1 | |||||||||
Total current liabilities | 491.7 | 395.0 | |||||||||
Long-term debt, net of current maturities and loan origination fees | 684.4 | 668.6 | |||||||||
Notes payable, net of debt issuance costs | 2,489.4 | 1,292.4 | |||||||||
Non-current deferred revenue | 11.9 | 13.3 | |||||||||
Deferred income taxes | 279.6 | 252.9 | |||||||||
Other liabilities | 104.4 | 52.6 | |||||||||
Total liabilities | 4,061.4 | 2,674.8 | |||||||||
Commitments and contingencies | |||||||||||
Shareholders' equity: | |||||||||||
Preferred stock | — | — | |||||||||
Common stock | — | — | |||||||||
Retained earnings | 613.6 | 307.7 | |||||||||
Accumulated other comprehensive loss | (0.9) | (0.9) | |||||||||
Total shareholders' equity | 612.7 | 306.8 | |||||||||
Total liabilities and shareholders' equity | $ | 4,674.1 | $ | 2,981.6 |
Nine Months Ended September 30, | |||||||||||
(in millions) | 2022 | 2021 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 438.4 | $ | 205.8 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 78.7 | 77.9 | |||||||||
Distributions from unconsolidated affiliates | 117.9 | 77.7 | |||||||||
Equity in income of unconsolidated affiliates | (115.4) | (103.0) | |||||||||
Stock-based compensation | 23.5 | 20.4 | |||||||||
Deferred income taxes | 26.7 | 12.8 | |||||||||
Asset impairments | 4.9 | 11.2 | |||||||||
Amortization of operating lease assets | 3.9 | 4.3 | |||||||||
Gain on Calder land sale | (274.6) | — | |||||||||
Other | 5.8 | 5.9 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Income taxes | 127.3 | 23.8 | |||||||||
Deferred revenue | (34.6) | (11.6) | |||||||||
Other assets and liabilities | 22.0 | 65.8 | |||||||||
Net cash provided by operating activities | 424.5 | 391.0 | |||||||||
Cash flows from investing activities: | |||||||||||
Capital maintenance expenditures | (37.1) | (22.3) | |||||||||
Capital project expenditures | (226.6) | (29.8) | |||||||||
Acquisition of businesses, net of cash acquired | (81.7) | — | |||||||||
Acquisition of gaming rights, net of cash acquired | (33.3) | — | |||||||||
Proceeds from Calder land sale | 279.0 | — | |||||||||
Other | (7.3) | (3.1) | |||||||||
Net cash used in investing activities | (107.0) | (55.2) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from borrowings under long-term debt obligations | 1,220.0 | 780.8 | |||||||||
Repayments of borrowings under long-term debt obligations | (5.3) | (429.2) | |||||||||
Payment of dividends | (25.7) | (24.8) | |||||||||
Repurchase of common stock | (143.5) | (242.4) | |||||||||
Taxes paid related to net share settlement of stock awards | (13.2) | (12.9) | |||||||||
Debt issuance costs | (12.8) | (6.9) | |||||||||
Change in bank overdraft | (1.8) | (13.4) | |||||||||
Other | 2.4 | 2.3 | |||||||||
Net cash provided by financing activities | 1,020.1 | 53.5 | |||||||||
Cash flows from discontinued operations: | |||||||||||
Operating activities of discontinued operations | — | (124.0) | |||||||||
Net increase in cash, cash equivalents and restricted cash | 1,337.6 | 265.3 | |||||||||
Cash, cash equivalents and restricted cash, beginning of period | 355.6 | 121.0 | |||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 1,693.2 | $ | 386.3 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
GAAP net income | $ | 57.0 | $ | 61.4 | $ | 438.4 | $ | 205.8 | |||||||||||||||
Adjustments, continuing operations: | |||||||||||||||||||||||
Changes in fair value of interest rate swaps related to Rivers Des Plaines | — | (2.0) | (12.6) | (8.0) | |||||||||||||||||||
Legal reserves and transaction costs related to Rivers Des Plaines | 0.1 | 0.6 | 0.6 | 8.6 | |||||||||||||||||||
Other charges | — | — | 1.0 | — | |||||||||||||||||||
Transaction, pre-opening, and other expense | 6.8 | 3.7 | 22.0 | 6.1 | |||||||||||||||||||
Legal reserves | — | — | 3.2 | — | |||||||||||||||||||
Asset impairments | — | — | 4.9 | 11.2 | |||||||||||||||||||
Gain on Calder land sale | — | — | (274.6) | — | |||||||||||||||||||
Income tax impact on net income adjustments (a) | (1.8) | (0.7) | 75.9 | (5.2) | |||||||||||||||||||
Total adjustments | 5.1 | 1.6 | (179.6) | 12.7 | |||||||||||||||||||
Adjusted net income attributable to Churchill Downs Incorporated | $ | 62.1 | $ | 63.0 | $ | 258.8 | $ | 218.5 | |||||||||||||||
Adjusted diluted EPS | $ | 1.62 | $ | 1.61 | $ | 6.70 | $ | 5.56 | |||||||||||||||
Weighted average shares outstanding - Diluted | 38.4 | 39.2 | 38.6 | 39.3 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Total Handle | |||||||||||||||||||||||
Churchill Downs Racetrack | $ | 115.3 | $ | 51.3 | $ | 745.3 | $ | 584.5 | |||||||||||||||
TwinSpires Horse Racing(a) | 522.1 | 481.9 | 1,527.6 | 1,545.4 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Net revenue from external customers: | |||||||||||||||||||||||
Live and Historical Racing: | |||||||||||||||||||||||
Churchill Downs Racetrack | $ | 6.4 | $ | 7.4 | $ | 182.6 | $ | 114.6 | |||||||||||||||
Derby City Gaming | 41.5 | 40.2 | 128.5 | 113.0 | |||||||||||||||||||
Oak Grove | 33.3 | 27.1 | 97.8 | 72.1 | |||||||||||||||||||
Turfway Park | 3.1 | 0.7 | 8.6 | 5.9 | |||||||||||||||||||
Newport | 6.9 | 4.3 | 20.6 | 13.2 | |||||||||||||||||||
Chasers | 0.9 | — | 0.9 | — | |||||||||||||||||||
Ellis Park | 0.2 | — | 0.2 | — | |||||||||||||||||||
Total Live and Historical Racing | 92.3 | 79.7 | 439.2 | 318.8 | |||||||||||||||||||
TwinSpires: | |||||||||||||||||||||||
Horse Racing | 100.9 | 98.8 | 321.5 | 327.7 | |||||||||||||||||||
Sports and Casino | 5.3 | 8.7 | 21.8 | 24.1 | |||||||||||||||||||
Total TwinSpires | 106.2 | 107.5 | 343.3 | 351.8 | |||||||||||||||||||
Gaming: | |||||||||||||||||||||||
Fair Grounds and VSI | 28.5 | 24.8 | 107.2 | 98.2 | |||||||||||||||||||
Presque Isle | 33.2 | 35.9 | 90.7 | 90.2 | |||||||||||||||||||
Ocean Downs | 33.3 | 31.7 | 82.0 | 78.7 | |||||||||||||||||||
Calder | 26.3 | 25.9 | 81.2 | 74.2 | |||||||||||||||||||
Oxford | 31.6 | 31.8 | 87.8 | 72.1 | |||||||||||||||||||
Riverwalk | 12.6 | 14.5 | 41.0 | 47.3 | |||||||||||||||||||
Harlow’s | 11.9 | 13.3 | 37.0 | 43.9 | |||||||||||||||||||
Lady Luck Nemacolin | 6.0 | 7.4 | 18.1 | 18.7 | |||||||||||||||||||
Total Gaming | 183.4 | 185.3 | 545.0 | 523.3 | |||||||||||||||||||
All Other | 1.2 | 20.5 | 2.2 | 38.5 | |||||||||||||||||||
Net revenue from external customers | $ | 383.1 | $ | 393.0 | $ | 1,329.7 | $ | 1,232.4 | |||||||||||||||
Intercompany net revenue: | |||||||||||||||||||||||
Live and Historical Racing | $ | 10.1 | $ | 1.8 | $ | 26.3 | $ | 17.9 | |||||||||||||||
TwinSpires | 1.2 | 1.5 | 4.0 | 4.8 | |||||||||||||||||||
Gaming | 2.5 | 0.3 | 4.6 | 2.3 | |||||||||||||||||||
All Other | — | 2.5 | — | 6.5 | |||||||||||||||||||
Eliminations | (13.8) | (6.1) | (34.9) | (31.5) | |||||||||||||||||||
Intercompany net revenue | $ | — | $ | — | $ | — | $ | — |
Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Total | |||||||||||||||||||||||||||||
Net revenue from external customers | |||||||||||||||||||||||||||||||||||
Pari-mutuel: | |||||||||||||||||||||||||||||||||||
Live and simulcast racing | $ | 1.8 | $ | 91.0 | $ | 3.6 | $ | 96.4 | $ | — | $ | 96.4 | |||||||||||||||||||||||
Historical racing(a) | 78.7 | — | 3.5 | 82.2 | — | 82.2 | |||||||||||||||||||||||||||||
Racing event-related services | 3.0 | — | 0.1 | 3.1 | — | 3.1 | |||||||||||||||||||||||||||||
Gaming(a) | 0.9 | 5.3 | 160.6 | 166.8 | — | 166.8 | |||||||||||||||||||||||||||||
Other(a) | 7.9 | 9.9 | 15.6 | 33.4 | 1.2 | 34.6 | |||||||||||||||||||||||||||||
Total | $ | 92.3 | $ | 106.2 | $ | 183.4 | $ | 381.9 | $ | 1.2 | $ | 383.1 |
Three Months Ended September 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 | $ | 5.4 | $ | 89.4 | $ | 4.9 | $ | 99.7 | $ | 12.6 | $ | 112.3 | |||||||||||||||||||||||
Historical racing(a) | 66.2 | — | — | 66.2 | — | 66.2 | |||||||||||||||||||||||||||||
Racing event-related services | 1.8 | — | 0.1 | 1.9 | 5.0 | 6.9 | |||||||||||||||||||||||||||||
Gaming(a) | — | 8.7 | 166.6 | 175.3 | — | 175.3 | |||||||||||||||||||||||||||||
Other(a) | 6.3 | 9.4 | 13.7 | 29.4 | 2.9 | 32.3 | |||||||||||||||||||||||||||||
Total | $ | 79.7 | $ | 107.5 | $ | 185.3 | $ | 372.5 | $ | 20.5 | $ | 393.0 |
Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Total | |||||||||||||||||||||||||||||
Net revenue from external customers | |||||||||||||||||||||||||||||||||||
Pari-mutuel: | |||||||||||||||||||||||||||||||||||
Live and simulcast racing | $ | 53.9 | $ | 290.9 | $ | 22.0 | $ | 366.8 | $ | — | $ | 366.8 | |||||||||||||||||||||||
Historical racing(a) | 230.7 | — | 4.8 | 235.5 | — | 235.5 | |||||||||||||||||||||||||||||
Racing event-related services | 125.4 | — | 0.7 | 126.1 | — | 126.1 | |||||||||||||||||||||||||||||
Gaming(a) | 0.9 | 21.8 | 469.6 | 492.3 | — | 492.3 | |||||||||||||||||||||||||||||
Other(a) | 28.3 | 30.6 | 47.9 | 106.8 | 2.2 | 109.0 | |||||||||||||||||||||||||||||
Total | $ | 439.2 | $ | 343.3 | $ | 545.0 | $ | 1,327.5 | $ | 2.2 | $ | 1,329.7 |
Nine Months Ended September 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 | $ | 50.9 | $ | 300.2 | $ | 21.0 | $ | 372.1 | $ | 27.2 | $ | 399.3 | |||||||||||||||||||||||
Historical racing(a) | 184.0 | — | — | 184.0 | — | 184.0 | |||||||||||||||||||||||||||||
Racing event-related services | 65.3 | — | 1.0 | 66.3 | 6.9 | 73.2 | |||||||||||||||||||||||||||||
Gaming(a) | — | 24.1 | 469.3 | 493.4 | — | 493.4 | |||||||||||||||||||||||||||||
Other(a) | 18.6 | 27.5 | 32.0 | 78.1 | 4.4 | 82.5 | |||||||||||||||||||||||||||||
Total | $ | 318.8 | $ | 351.8 | $ | 523.3 | $ | 1,193.9 | $ | 38.5 | $ | 1,232.4 |
Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Eliminations | Total | ||||||||||||||||||||||||||||||||||
Net revenue | $ | 102.4 | $ | 107.4 | $ | 185.9 | $ | 395.7 | $ | 0.1 | $ | (13.8) | $ | 382.0 | |||||||||||||||||||||||||||
Taxes and purses | (31.6) | (6.6) | (70.6) | (108.8) | — | — | (108.8) | ||||||||||||||||||||||||||||||||||
Marketing and advertising | (3.6) | (1.3) | (4.1) | (9.0) | (0.2) | — | (9.2) | ||||||||||||||||||||||||||||||||||
Salaries and benefits | (13.3) | (6.3) | (24.6) | (44.2) | 0.1 | — | (44.1) | ||||||||||||||||||||||||||||||||||
Content expense | (0.6) | (49.3) | (2.7) | (52.6) | — | 13.4 | (39.2) | ||||||||||||||||||||||||||||||||||
Selling, general and administrative expense | (3.4) | (2.7) | (7.1) | (13.2) | (13.9) | 1.1 | (26.0) | ||||||||||||||||||||||||||||||||||
Other operating expense | (15.6) | (10.1) | (21.7) | (47.4) | (0.2) | (0.7) | (48.3) | ||||||||||||||||||||||||||||||||||
Other income | 0.2 | — | 56.5 | 56.7 | 0.1 | — | 56.8 | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 34.5 | $ | 31.1 | $ | 111.6 | $ | 177.2 | $ | (14.0) | $ | — | $ | 163.2 |
Three Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Eliminations | Total | ||||||||||||||||||||||||||||||||||
Net revenue | $ | 81.5 | $ | 109.0 | $ | 185.6 | $ | 376.1 | $ | 23.0 | $ | (6.1) | $ | 393.0 | |||||||||||||||||||||||||||
Taxes and purses | (24.6) | (8.0) | (71.8) | (104.4) | (4.9) | — | (109.3) | ||||||||||||||||||||||||||||||||||
Marketing and advertising | (2.9) | (10.6) | (3.6) | (17.1) | (0.3) | — | (17.4) | ||||||||||||||||||||||||||||||||||
Salaries and benefits | (10.9) | (7.0) | (22.5) | (40.4) | (3.1) | — | (43.5) | ||||||||||||||||||||||||||||||||||
Content expense | (0.5) | (47.1) | (1.2) | (48.8) | (1.4) | 5.6 | (44.6) | ||||||||||||||||||||||||||||||||||
Selling, general and administrative expense | (3.1) | (2.6) | (7.1) | (12.8) | (14.3) | 0.4 | (26.7) | ||||||||||||||||||||||||||||||||||
Other operating expense | (11.8) | (11.6) | (19.7) | (43.1) | (3.5) | 0.1 | (46.5) | ||||||||||||||||||||||||||||||||||
Other income | — | — | 51.0 | 51.0 | 0.1 | — | 51.1 | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 27.7 | $ | 22.1 | $ | 110.7 | $ | 160.5 | $ | (4.4) | $ | — | $ | 156.1 |
Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Eliminations | Total | ||||||||||||||||||||||||||||||||||
Net revenue | $ | 465.5 | $ | 347.3 | $ | 549.6 | $ | 1,362.4 | $ | 0.4 | $ | (34.9) | $ | 1,327.9 | |||||||||||||||||||||||||||
Taxes and purses | (118.0) | (21.3) | (206.1) | (345.4) | — | — | (345.4) | ||||||||||||||||||||||||||||||||||
Marketing and advertising | (12.9) | (11.4) | (11.3) | (35.6) | (0.2) | — | (35.8) | ||||||||||||||||||||||||||||||||||
Salaries and benefits | (43.1) | (19.9) | (72.0) | (135.0) | — | — | (135.0) | ||||||||||||||||||||||||||||||||||
Content expense | (2.2) | (160.5) | (6.4) | (169.1) | — | 33.7 | (135.4) | ||||||||||||||||||||||||||||||||||
Selling, general and administrative expense | (9.7) | (7.9) | (20.4) | (38.0) | (41.9) | 1.1 | (78.8) | ||||||||||||||||||||||||||||||||||
Other operating expense | (53.6) | (37.2) | (63.9) | (154.7) | (0.4) | 0.1 | (155.0) | ||||||||||||||||||||||||||||||||||
Other income | 0.3 | — | 140.0 | 140.3 | 0.1 | — | 140.4 | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 226.3 | $ | 89.1 | $ | 309.5 | $ | 624.9 | $ | (42.0) | $ | — | $ | 582.9 |
Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Eliminations | Total | ||||||||||||||||||||||||||||||||||
Net revenue | $ | 336.7 | $ | 356.6 | $ | 525.6 | $ | 1,218.9 | $ | 45.0 | $ | (31.5) | $ | 1,232.4 | |||||||||||||||||||||||||||
Taxes and purses | (95.4) | (22.7) | (201.1) | (319.2) | (11.9) | — | (331.1) | ||||||||||||||||||||||||||||||||||
Marketing and advertising | (9.9) | (35.8) | (7.5) | (53.2) | (0.4) | — | (53.6) | ||||||||||||||||||||||||||||||||||
Salaries and benefits | (36.2) | (20.0) | (63.0) | (119.2) | (6.6) | — | (125.8) | ||||||||||||||||||||||||||||||||||
Content expense | (1.9) | (162.1) | (3.5) | (167.5) | (4.5) | 30.2 | (141.8) | ||||||||||||||||||||||||||||||||||
Selling, general and administrative expense | (9.2) | (8.1) | (19.0) | (36.3) | (40.3) | 1.1 | (75.5) | ||||||||||||||||||||||||||||||||||
Other operating expense | (39.8) | (38.1) | (52.9) | (130.8) | (8.6) | 0.2 | (139.2) | ||||||||||||||||||||||||||||||||||
Other income | 0.1 | — | 134.3 | 134.4 | 0.2 | — | 134.6 | ||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 144.4 | $ | 69.8 | $ | 312.9 | $ | 527.1 | $ | (27.1) | $ | — | $ | 500.0 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Reconciliation of Comprehensive Income to Adjusted EBITDA: | |||||||||||||||||||||||
Net income and comprehensive income | $ | 57.0 | $ | 61.4 | $ | 438.4 | $ | 205.8 | |||||||||||||||
Additions: | |||||||||||||||||||||||
Depreciation and amortization | 27.5 | 25.9 | 78.7 | 77.9 | |||||||||||||||||||
Interest expense | 36.2 | 21.7 | 92.6 | 63.1 | |||||||||||||||||||
Income tax provision | 16.4 | 26.3 | 173.5 | 84.1 | |||||||||||||||||||
EBITDA | $ | 137.1 | $ | 135.3 | $ | 783.2 | $ | 430.9 | |||||||||||||||
Adjustments to EBITDA: | |||||||||||||||||||||||
Stock-based compensation expense | $ | 9.1 | $ | 7.8 | $ | 23.5 | $ | 20.4 | |||||||||||||||
Legal reserves | — | — | 3.2 | — | |||||||||||||||||||
Pre-opening expense | 4.2 | 1.7 | 8.9 | 3.8 | |||||||||||||||||||
Other expenses, net | 1.4 | — | 5.7 | 0.2 | |||||||||||||||||||
Asset impairments | — | — | 4.9 | 11.2 | |||||||||||||||||||
Transaction expense, net | 1.2 | 2.0 | 7.4 | 2.1 | |||||||||||||||||||
Other income, expense: | |||||||||||||||||||||||
Interest, depreciation and amortization expense related to equity investments | 10.1 | 10.7 | 31.7 | 30.8 | |||||||||||||||||||
Changes in fair value of Rivers Des Plaines' interest rate swaps | — | (2.0) | (12.6) | (8.0) | |||||||||||||||||||
Rivers Des Plaines' legal reserves and transaction costs | 0.1 | 0.6 | 0.6 | 8.6 | |||||||||||||||||||
Other charges | — | — | 1.0 | — | |||||||||||||||||||
Gain on Calder land sale | — | — | (274.6) | — | |||||||||||||||||||
Total adjustments to EBITDA | 26.1 | 20.8 | (200.3) | 69.1 | |||||||||||||||||||
Adjusted EBITDA | $ | 163.2 | $ | 156.1 | $ | 582.9 | $ | 500.0 | |||||||||||||||
Adjusted EBITDA by segment: | |||||||||||||||||||||||
Live and Historical Racing | $ | 34.5 | $ | 27.7 | $ | 226.3 | $ | 144.4 | |||||||||||||||
TwinSpires | 31.1 | 22.1 | 89.1 | 69.8 | |||||||||||||||||||
Gaming | 111.6 | 110.7 | 309.5 | 312.9 | |||||||||||||||||||
Total segment Adjusted EBITDA | 177.2 | 160.5 | 624.9 | 527.1 | |||||||||||||||||||
All Other | (14.0) | (4.4) | (42.0) | (27.1) | |||||||||||||||||||
Total Adjusted EBITDA | $ | 163.2 | $ | 156.1 | $ | 582.9 | $ | 500.0 |
Summarized Income Statement | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in millions) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
Net revenue | $ | 221.5 | $ | 202.4 | $ | 613.3 | $ | 539.0 | |||||||||||||||
Operating and SG&A expense | 131.5 | 115.2 | 380.4 | 310.6 | |||||||||||||||||||
Depreciation and amortization | 5.9 | 4.4 | 17.5 | 13.1 | |||||||||||||||||||
Total operating expense | 137.4 | 119.6 | 397.9 | 323.7 | |||||||||||||||||||
Operating income | 84.1 | 82.8 | 215.4 | 215.3 | |||||||||||||||||||
Interest and other expense, net | (10.6) | (10.4) | (13.8) | (34.7) | |||||||||||||||||||
Net income | $ | 73.5 | $ | 72.4 | $ | 201.6 | $ | 180.6 |
Summarized Balance Sheet | |||||||||||
(in millions) | September 30, 2022 | December 31, 2021 | |||||||||
Assets | |||||||||||
Current assets | $ | 89.9 | $ | 96.0 | |||||||
Property and equipment, net | 349.1 | 312.3 | |||||||||
Other assets, net | 263.6 | 264.1 | |||||||||
Total assets | $ | 702.6 | $ | 672.4 | |||||||
Liabilities and Members' Deficit | |||||||||||
Current liabilities | $ | 108.6 | $ | 95.3 | |||||||
Long-term debt | 826.2 | 786.9 | |||||||||
Other liabilities | — | 20.6 | |||||||||
Members' deficit | (232.2) | (230.4) | |||||||||
Total liabilities and members' deficit | $ | 702.6 | $ | 672.4 |
(in millions) | Project | Target Completion | Planned Spend | ||||||||
Live and Historical Racing Segment | |||||||||||
Churchill Downs Racetrack | Turn 1 Experience | May 2023 | $90 | ||||||||
Paddock / Under the Spires | May 2024 | $185 - $200 | |||||||||
Derby City Gaming | Expansion and Hotel | Late 2022 / Second Quarter 2023 | $80 | ||||||||
Derby City Gaming Downtown | Property Build Out | Second Half 2023 | $90 | ||||||||
Ellis Park / Owensboro Annex(a) | Property Improvement / Property Build Out | Fourth Quarter 2023 | $75 | ||||||||
New Hampshire Charitable Gaming Facility(b) | Acquisition and Property Build Out | Mid 2024 | Up to $150 | ||||||||
Oak Grove | Oak Grove Annex | TBD | TBD | ||||||||
Gaming Segment | |||||||||||
Fair Grounds and VSI | HRMs in OTBs | First Quarter 2023 | $35 | ||||||||
Queen of Terre Haute Casino Resort | Property Build Out | Early 2024 | Up to $290 |
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