QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2024 and 2023 | ||||||||
Condensed Consolidated Balance Sheets at March 31, 2024 and December 31, 2023 | ||||||||
Condensed Consolidated Statements of Shareholders' Equity for the three months ended March 31, 2024 and 2023 | ||||||||
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 | ||||||||
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
2 |
Three Months Ended March 31, | ||||||||||||||
(in millions, except per common share data) | 2024 | 2023 | ||||||||||||
Net revenue: | ||||||||||||||
Live and Historical Racing | $ | $ | ||||||||||||
TwinSpires | ||||||||||||||
Gaming | ||||||||||||||
All Other | ||||||||||||||
Total net revenue | ||||||||||||||
Operating expense: | ||||||||||||||
Live and Historical Racing | ||||||||||||||
TwinSpires | ||||||||||||||
Gaming | ||||||||||||||
All Other | ||||||||||||||
Selling, general and administrative expense | ||||||||||||||
Transaction expense, net | ( | |||||||||||||
Total operating expense | ||||||||||||||
Operating income | ||||||||||||||
Other (expense) income: | ||||||||||||||
Interest expense, net | ( | ( | ||||||||||||
Equity in income of unconsolidated affiliates | ||||||||||||||
Gain on sale of Arlington | ||||||||||||||
Miscellaneous, net | ||||||||||||||
Total other (expense) income | ( | |||||||||||||
Income from operations before provision for income taxes | ||||||||||||||
Income tax provision | ( | ( | ||||||||||||
Net income | $ | $ | ||||||||||||
Net income per common share data: | ||||||||||||||
Basic net income | $ | $ | ||||||||||||
Diluted net income | $ | $ | ||||||||||||
Weighted average shares outstanding: | ||||||||||||||
Basic | ||||||||||||||
Diluted |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
3 |
(in millions) | March 31, 2024 | December 31, 2023 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Accounts receivable, net | |||||||||||
Income taxes receivable | |||||||||||
Other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Investment in and advances to unconsolidated affiliates | |||||||||||
Goodwill | |||||||||||
Other intangible assets, net | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued expenses and other current liabilities | |||||||||||
Income taxes payable | |||||||||||
Current deferred revenue | |||||||||||
Current maturities of long-term debt | |||||||||||
Dividends payable | |||||||||||
Total current liabilities | |||||||||||
Long-term debt, net of current maturities and loan origination fees | |||||||||||
Notes payable, net of debt issuance costs | |||||||||||
Non-current deferred revenue | |||||||||||
Deferred income taxes | |||||||||||
Other liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Shareholders' equity: | |||||||||||
Preferred stock | |||||||||||
Common stock | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total shareholders' equity | |||||||||||
Total liabilities and shareholders' equity | $ | $ |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
4 |
Common Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | ||||||||||||||||||||||||||
(in millions) | Shares | Amount | |||||||||||||||||||||||||||
Balance, December 31, 2023 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||
Issuance of common stock | — | ||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | ( | ( | |||||||||||||||||||||||||
Taxes paid related to net share settlement of stock awards | ( | ( | ( | ||||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||||||||
Balance, March 31, 2024 | $ | $ | $ | ( | $ |
Common Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders' Equity | ||||||||||||||||||||||||||
(in millions) | Shares | Amount | |||||||||||||||||||||||||||
Balance, December 31, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Net income | |||||||||||||||||||||||||||||
Issuance of common stock | — | ||||||||||||||||||||||||||||
Taxes paid related to net share settlement of stock awards | ( | ( | ( | ( | |||||||||||||||||||||||||
Stock-based compensation | |||||||||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||||||||
Balance, March 31, 2023 | $ | $ | $ | ( | $ |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
5 |
Three Months Ended March 31, | |||||||||||
(in millions) | 2024 | 2023 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Distributions from unconsolidated affiliates | |||||||||||
Equity in income of unconsolidated affiliates | ( | ( | |||||||||
Stock-based compensation | |||||||||||
Deferred income taxes | |||||||||||
Amortization of operating lease assets | |||||||||||
Gain on sale of Arlington | ( | ||||||||||
Other | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Income taxes | |||||||||||
Deferred revenue | |||||||||||
Other assets and liabilities | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Capital maintenance expenditures | ( | ( | |||||||||
Capital project expenditures | ( | ( | |||||||||
Proceeds from sale of Arlington | |||||||||||
Other | ( | ||||||||||
Net cash (used in) provided by investing activities | ( | ||||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from borrowings under long-term debt obligations | |||||||||||
Repayments of borrowings under long-term debt obligations | ( | ( | |||||||||
Payment of dividends | ( | ( | |||||||||
Repurchase of common stock | ( | ( | |||||||||
Taxes paid related to net share settlement of stock awards | ( | ( | |||||||||
Debt issuance costs | ( | ||||||||||
Change in bank overdraft | ( | ( | |||||||||
Other | ( | ( | |||||||||
Net cash used in financing activities | ( | ( | |||||||||
Net increase in cash, cash equivalents and restricted cash | |||||||||||
Cash, cash equivalents and restricted cash, beginning of period | |||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | $ |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
6 |
Three Months Ended March 31, | |||||||||||
(in millions) | 2024 | 2023 | |||||||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Cash paid for income taxes | |||||||||||
Cash received from income tax refunds | |||||||||||
Schedule of non-cash operating, investing and financing activities: | |||||||||||
Property and equipment additions included in accounts payable and accrued expenses | $ | $ | |||||||||
Right-of-use assets obtained in exchange for lease obligations in operating leases | |||||||||||
Right-of-use assets obtained in exchange for lease obligations in finance leases | |||||||||||
Repurchase of common stock included in accrued expense and other current liabilities |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
7 |
Churchill Downs Incorporated | ||||||||
Notes to Condensed Consolidated Financial Statements | ||||||||
(Unaudited) |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
8 |
Churchill Downs Incorporated | ||||||||
Notes to Condensed Consolidated Financial Statements | ||||||||
(Unaudited) |
(in millions) | Live and Historical | TwinSpires | Gaming | All Other | Total | ||||||||||||||||||||||||
Balances as of December 31, 2023 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Adjustments | |||||||||||||||||||||||||||||
Balances as of March 31, 2024 | $ | $ | $ | $ | $ |
March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||||||||||||||
(in millions) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||||||||
Definite-lived intangible assets | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Indefinite-lived intangible assets | |||||||||||||||||||||||||||||||||||
Total | $ | $ |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
9 |
Churchill Downs Incorporated | ||||||||
Notes to Condensed Consolidated Financial Statements | ||||||||
(Unaudited) |
Three Months Ended March 31, | |||||||||||||||||||||||
(in millions, except share data) | 2024 | 2023 | |||||||||||||||||||||
Repurchase Program | Shares | Aggregate Purchase Price | Shares | Aggregate Purchase Price | |||||||||||||||||||
2021 Stock Repurchase Program | $ | $ |
Grant Year | Award Type | Number of Units Awarded(1) | Vesting Terms | |||||||||||||||||
2024 | RSU | Vest equally over service periods ending in 2026 | ||||||||||||||||||
2024 | PSU | -year performance and service period ending in 2026 |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
10 |
Churchill Downs Incorporated | ||||||||
Notes to Condensed Consolidated Financial Statements | ||||||||
(Unaudited) |
(in millions) | March 31, 2024 | December 31, 2023 | |||||||||
Term Loan B-1 due 2028 | $ | $ | |||||||||
Term Loan A due 2027 | |||||||||||
Revolver | |||||||||||
2027 Senior Notes | |||||||||||
2028 Senior Notes | |||||||||||
2030 Senior Notes | |||||||||||
2031 Senior Notes | |||||||||||
Total debt | |||||||||||
Current maturities of long-term debt | ( | ( | |||||||||
Unamortized premium and deferred finance charges | ( | ( | |||||||||
Total debt, net of current maturities and costs | $ | $ |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
11 |
Churchill Downs Incorporated | ||||||||
Notes to Condensed Consolidated Financial Statements | ||||||||
(Unaudited) |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
12 |
Churchill Downs Incorporated | ||||||||
Notes to Condensed Consolidated Financial Statements | ||||||||
(Unaudited) |
Three Months Ended March 31, | ||||||||||||||
(in millions) | 2024 | 2023 | ||||||||||||
Net revenue from external customers: | ||||||||||||||
Live and Historical Racing: | ||||||||||||||
Churchill Downs Racetrack | $ | $ | ||||||||||||
Louisville | ||||||||||||||
Northern Kentucky | ||||||||||||||
Southwestern Kentucky | ||||||||||||||
Western Kentucky | ||||||||||||||
Virginia | ||||||||||||||
New Hampshire | ||||||||||||||
Total Live and Historical Racing | $ | $ | ||||||||||||
TwinSpires: | $ | $ | ||||||||||||
Gaming: | ||||||||||||||
Florida | $ | $ | ||||||||||||
Iowa | ||||||||||||||
Louisiana | ||||||||||||||
Maine | ||||||||||||||
Maryland | ||||||||||||||
Mississippi | ||||||||||||||
New York | ||||||||||||||
Pennsylvania | ||||||||||||||
Total Gaming | ||||||||||||||
All Other | ||||||||||||||
Net revenue from external customers | $ | $ | ||||||||||||
Intercompany net revenues: | ||||||||||||||
Live and Historical Racing | $ | $ | ||||||||||||
TwinSpires | ||||||||||||||
Gaming | ||||||||||||||
All Other | ||||||||||||||
Eliminations | ( | ( | ||||||||||||
Intercompany net revenue | $ | $ |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
13 |
Churchill Downs Incorporated | ||||||||
Notes to Condensed Consolidated Financial Statements | ||||||||
(Unaudited) |
Three Months Ended March 31, 2024 | |||||||||||||||||||||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | Total Segments | All Other | Total | |||||||||||||||||||||||||||||
Net revenue from external customers | |||||||||||||||||||||||||||||||||||
Pari-mutuel: | |||||||||||||||||||||||||||||||||||
Live and simulcast racing | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Historical racing(a) | |||||||||||||||||||||||||||||||||||
Racing event-related services | |||||||||||||||||||||||||||||||||||
Gaming(a) | |||||||||||||||||||||||||||||||||||
Other(a) | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
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 | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Historical racing(a) | |||||||||||||||||||||||||||||||||||
Racing event-related services | |||||||||||||||||||||||||||||||||||
Gaming(a) | |||||||||||||||||||||||||||||||||||
Other(a) | |||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
14 |
Churchill Downs Incorporated | ||||||||
Notes to Condensed Consolidated Financial Statements | ||||||||
(Unaudited) |
(in millions) | March 31, 2024 | December 31, 2023 | |||||||||
Trade receivables | $ | $ | |||||||||
Simulcast and online wagering receivables | |||||||||||
Other receivables | |||||||||||
Allowance for credit losses | ( | ( | |||||||||
Total | $ | $ |
(in millions) | March 31, 2024 | December 31, 2023 | |||||||||
Account wagering deposits liability | $ | $ | |||||||||
Accrued salaries and related benefits | |||||||||||
Purses payable | |||||||||||
Accrued interest | |||||||||||
Accrued fixed assets | |||||||||||
Accrued gaming liabilities | |||||||||||
Other | |||||||||||
Total | $ | $ |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
15 |
Churchill Downs Incorporated | ||||||||
Notes to Condensed Consolidated Financial Statements | ||||||||
(Unaudited) |
Three Months Ended March 31, | |||||||||||
(in millions) | 2024 | 2023 | |||||||||
Net revenue | $ | $ | |||||||||
Operating and SG&A expense | |||||||||||
Depreciation and amortization | |||||||||||
Total operating expense | |||||||||||
Operating income | |||||||||||
Interest and other, net | ( | ( | |||||||||
Net income | $ | $ |
(in millions) | March 31, 2024 | December 31, 2023 | |||||||||
Assets | |||||||||||
Current assets | $ | $ | |||||||||
Property and equipment, net | |||||||||||
Other assets, net | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Members' Deficit | |||||||||||
Current liabilities | $ | $ | |||||||||
Long-term debt | |||||||||||
Other liabilities | |||||||||||
Members' deficit | ( | ( | |||||||||
Total liabilities and members' deficit | $ | $ |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
16 |
Churchill Downs Incorporated | ||||||||
Notes to Condensed Consolidated Financial Statements | ||||||||
(Unaudited) |
March 31, 2024 | |||||||||||||||||||||||||||||
(in millions) | Carrying Amount | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||
Restricted cash | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||
Term Loan B-1 | |||||||||||||||||||||||||||||
Term Loan A | |||||||||||||||||||||||||||||
Revolver | |||||||||||||||||||||||||||||
2027 Senior Notes | |||||||||||||||||||||||||||||
2028 Senior Notes | |||||||||||||||||||||||||||||
2030 Senior Notes | |||||||||||||||||||||||||||||
2031 Senior Notes | |||||||||||||||||||||||||||||
December 31, 2023 | |||||||||||||||||||||||||||||
(in millions) | Carrying Amount | Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
Financial assets: | |||||||||||||||||||||||||||||
Restricted cash | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Financial liabilities: | |||||||||||||||||||||||||||||
Term Loan B-1 | |||||||||||||||||||||||||||||
Term Loan A | |||||||||||||||||||||||||||||
Revolver | |||||||||||||||||||||||||||||
2027 Senior Notes | |||||||||||||||||||||||||||||
2028 Senior Notes | |||||||||||||||||||||||||||||
2030 Senior Notes | |||||||||||||||||||||||||||||
2031 Senior Notes |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
17 |
Churchill Downs Incorporated | ||||||||
Notes to Condensed Consolidated Financial Statements | ||||||||
(Unaudited) |
Three Months Ended March 31, | ||||||||||||||
(in millions, except per share data) | 2024 | 2023 | ||||||||||||
Numerator for basic and diluted net income per common share: | ||||||||||||||
Net income | $ | $ | ||||||||||||
Denominator for net income per common share: | ||||||||||||||
Basic | ||||||||||||||
Plus dilutive effect of stock awards | ||||||||||||||
Diluted | ||||||||||||||
Net income per common share data: | ||||||||||||||
Basic net income | $ | $ | ||||||||||||
Diluted net income | $ | $ |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
18 |
Churchill Downs Incorporated | ||||||||
Notes to Condensed Consolidated Financial Statements | ||||||||
(Unaudited) |
Three Months Ended March 31, | ||||||||||||||
(in millions) | 2024 | 2023 | ||||||||||||
Live and Historical Racing | $ | $ | ||||||||||||
TwinSpires | ||||||||||||||
Gaming | ||||||||||||||
All Other | ||||||||||||||
Net Revenue | $ | $ |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
19 |
Churchill Downs Incorporated | ||||||||
Notes to Condensed Consolidated Financial Statements | ||||||||
(Unaudited) |
Three Months Ended March 31, 2024 | |||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | ||||||||||||||
Revenues | $ | $ | $ | ||||||||||||||
Gaming taxes and purses | ( | ( | ( | ||||||||||||||
Marketing and advertising | ( | ( | ( | ||||||||||||||
Salaries and benefits | ( | ( | ( | ||||||||||||||
Content expense | ( | ( | ( | ||||||||||||||
Selling, general and administrative expense | ( | ( | ( | ||||||||||||||
Maintenance, insurance and utilities | ( | ( | ( | ||||||||||||||
Property and other taxes | ( | ( | ( | ||||||||||||||
Other operating expense | ( | ( | ( | ||||||||||||||
Other income | |||||||||||||||||
Adjusted EBITDA | $ | $ | $ |
Three Months Ended March 31, 2023 | |||||||||||||||||
(in millions) | Live and Historical Racing | TwinSpires | Gaming | ||||||||||||||
Revenues | $ | $ | $ | ||||||||||||||
Gaming taxes and purses | ( | ( | ( | ||||||||||||||
Marketing and advertising | ( | ( | ( | ||||||||||||||
Salaries and benefits | ( | ( | ( | ||||||||||||||
Content expense | ( | ( | ( | ||||||||||||||
Selling, general and administrative expense | ( | ( | ( | ||||||||||||||
Maintenance, insurance and utilities | ( | ( | ( | ||||||||||||||
Property and other taxes | ( | ( | |||||||||||||||
Other operating expense | ( | ( | ( | ||||||||||||||
Other income | |||||||||||||||||
Adjusted EBITDA | $ | $ | $ |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
20 |
Churchill Downs Incorporated | ||||||||
Notes to Condensed Consolidated Financial Statements | ||||||||
(Unaudited) |
Three Months Ended March 31, | ||||||||||||||
(in millions) | 2024 | 2023 | ||||||||||||
Reconciliation of Comprehensive Income to Adjusted EBITDA: | ||||||||||||||
Net income and comprehensive income | $ | $ | ||||||||||||
Additions: | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Interest expense | ||||||||||||||
Income tax provision | ||||||||||||||
EBITDA | $ | $ | ||||||||||||
Adjustments to EBITDA: | ||||||||||||||
Stock-based compensation expense | $ | $ | ||||||||||||
Pre-opening expense | ||||||||||||||
Other expenses, net | ||||||||||||||
Transaction expense, net | ( | |||||||||||||
Other income, expense: | ||||||||||||||
Interest, depreciation and amortization expense related to equity investments | ||||||||||||||
Other charges and recoveries, net | ( | |||||||||||||
Gain on sale of Arlington | ( | |||||||||||||
Total adjustments to EBITDA | ( | |||||||||||||
Adjusted EBITDA | $ | $ | ||||||||||||
Adjusted EBITDA by segment: | ||||||||||||||
Live and Historical Racing | $ | $ | ||||||||||||
TwinSpires | ||||||||||||||
Gaming | ||||||||||||||
Total segment Adjusted EBITDA | ||||||||||||||
All Other | ( | ( | ||||||||||||
Total Adjusted EBITDA | $ | $ |
(in millions) | March 31, 2024 | December 31, 2023 | |||||||||
Total assets: | |||||||||||
Live and Historical Racing | $ | $ | |||||||||
TwinSpires | |||||||||||
Gaming | |||||||||||
Total segment assets | |||||||||||
All Other | |||||||||||
Total assets | $ | $ |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
21 |
Churchill Downs Incorporated | ||||||||
Notes to Condensed Consolidated Financial Statements | ||||||||
(Unaudited) |
Three Months Ended March 31, | |||||||||||
(in millions) | 2024 | 2023 | |||||||||
Capital expenditures: | |||||||||||
Live and Historical Racing | $ | $ | |||||||||
TwinSpires | |||||||||||
Gaming | |||||||||||
Total segment capital expenditures | |||||||||||
All Other | |||||||||||
Total capital expenditures | $ | $ |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
22 |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
23 |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
24 |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
25 |
Three Months Ended March 31, | ||||||||||||||||||||
(in millions) | 2024 | 2023 | Change | |||||||||||||||||
Net revenue | $ | 590.9 | $ | 559.5 | $ | 31.4 | ||||||||||||||
Operating income | 126.3 | 119.9 | 6.4 | |||||||||||||||||
Operating income margin | 21 | % | 21 | % | ||||||||||||||||
Net income | 80.4 | 155.7 | (75.3) | |||||||||||||||||
Adjusted EBITDA | 242.5 | 222.9 | 19.6 |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
26 |
Three Months Ended March 31, | Change | ||||||||||||||||
(in millions) | 2024 | 2023 | |||||||||||||||
Live and Historical Racing | $ | 248.9 | $ | 215.8 | $ | 33.1 | |||||||||||
TwinSpires | 114.1 | 96.3 | 17.8 | ||||||||||||||
Gaming | 243.2 | 251.6 | (8.4) | ||||||||||||||
All Other | — | 0.3 | (0.3) | ||||||||||||||
Eliminations | (15.3) | (4.5) | (10.8) | ||||||||||||||
Net Revenue | $ | 590.9 | $ | 559.5 | $ | 31.4 |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
27 |
Three Months Ended March 31, | Change | ||||||||||||||||
(in millions) | 2024 | 2023 | |||||||||||||||
Gaming taxes and purses | $ | 150.4 | $ | 145.5 | $ | 4.9 | |||||||||||
Salaries and benefits | 74.9 | 62.9 | 12.0 | ||||||||||||||
Content expense | 38.2 | 42.4 | (4.2) | ||||||||||||||
Selling, general and administrative expense | 54.8 | 52.3 | 2.5 | ||||||||||||||
Depreciation and amortization | 46.9 | 37.9 | 9.0 | ||||||||||||||
Marketing and advertising | 19.2 | 18.0 | 1.2 | ||||||||||||||
Maintenance, insurance and utilities | 20.9 | 20.9 | — | ||||||||||||||
Property and other taxes | 6.4 | 6.8 | (0.4) | ||||||||||||||
Transaction expense, net | 4.1 | (0.2) | 4.3 | ||||||||||||||
Other operating expense | 48.8 | 53.1 | (4.3) | ||||||||||||||
Total expense | $ | 464.6 | $ | 439.6 | $ | 25.0 |
Three Months Ended March 31, | Change | ||||||||||||||||
(in millions) | 2024 | 2023 | |||||||||||||||
Live and Historical Racing | $ | 100.8 | $ | 82.1 | $ | 18.7 | |||||||||||
TwinSpires | 39.6 | 29.4 | 10.2 | ||||||||||||||
Gaming | 122.8 | 129.5 | (6.7) | ||||||||||||||
Total Segment Adjusted EBITDA | 263.2 | 241.0 | 22.2 | ||||||||||||||
All Other | (20.7) | (18.1) | (2.6) | ||||||||||||||
Total Adjusted EBITDA | $ | 242.5 | $ | 222.9 | $ | 19.6 |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
28 |
Three Months Ended March 31, | Change | ||||||||||||||||
(in millions) | 2024 | 2023 | |||||||||||||||
Net income and comprehensive income | $ | 80.4 | $ | 155.7 | $ | (75.3) | |||||||||||
Additions: | |||||||||||||||||
Depreciation and amortization | 46.9 | 37.9 | 9.0 | ||||||||||||||
Interest expense | 70.4 | 64.7 | 5.7 | ||||||||||||||
Income tax provision | 21.4 | 53.2 | (31.8) | ||||||||||||||
EBITDA | $ | 219.1 | $ | 311.5 | $ | (92.4) | |||||||||||
Adjustments to EBITDA: | |||||||||||||||||
Stock-based compensation expense | $ | 7.2 | $ | 8.6 | $ | (1.4) | |||||||||||
Pre-opening expense | 8.3 | 3.2 | 5.1 | ||||||||||||||
Other expense, net | 0.2 | 3.7 | (3.5) | ||||||||||||||
Transaction expense, net | 4.1 | (0.2) | 4.3 | ||||||||||||||
Other income, expense: | |||||||||||||||||
Interest, depreciation and amortization expense related to equity investments | 10.3 | 9.8 | 0.5 | ||||||||||||||
Other charges and recoveries, net | (6.7) | 0.3 | (7.0) | ||||||||||||||
Gain on sale of Arlington | — | (114.0) | 114.0 | ||||||||||||||
Total adjustments to EBITDA | 23.4 | (88.6) | 112.0 | ||||||||||||||
Adjusted EBITDA | $ | 242.5 | $ | 222.9 | $ | 19.6 |
(in millions) | March 31, 2024 | December 31, 2023 | Change | ||||||||||||||
Total assets | $ | 7,066.8 | $ | 6,955.5 | $ | 111.3 | |||||||||||
Total liabilities | 6,239.9 | 6,061.9 | 178.0 | ||||||||||||||
Total shareholders' equity | 826.9 | 893.6 | (66.7) |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
29 |
(in millions) | Three Months Ended March 31, | Change | |||||||||||||||
Cash flows from: | 2024 | 2023 | |||||||||||||||
Operating activities | $ | 254.7 | $ | 215.9 | $ | 38.8 | |||||||||||
Investing activities | (153.4) | 54.5 | (207.9) | ||||||||||||||
Financing activities | (101.1) | (237.7) | 136.6 |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
30 |
(in millions) | March 31, 2024 | December 31, 2023 | Change | ||||||||||||||
Revolver | $ | 353.0 | $ | 247.2 | $ | 105.8 | |||||||||||
Term Loan B-1 due 2028 | 291.0 | 291.8 | (0.8) | ||||||||||||||
Term Loan A due 2027 | 1,218.7 | 1,235.0 | (16.3) | ||||||||||||||
2027 Senior Notes | 600.0 | 600.0 | — | ||||||||||||||
2028 Senior Notes | 700.0 | 700.0 | — | ||||||||||||||
2030 Senior Notes | 1,200.0 | 1,200.0 | — | ||||||||||||||
2031 Senior Notes | 600.0 | 600.0 | — | ||||||||||||||
Total debt | 4,962.7 | 4,874.0 | 88.7 | ||||||||||||||
Current maturities of long-term debt | (68.0) | (68.0) | — | ||||||||||||||
Total debt, net of current maturities | 4,894.7 | 4,806.0 | 88.7 | ||||||||||||||
Issuance costs, net of premiums and discounts | (35.8) | (37.7) | 1.9 | ||||||||||||||
Net debt | $ | 4,858.9 | $ | 4,768.3 | $ | 90.6 |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
31 |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
32 |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
33 |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (in millions) (1) | ||||||||||||||||||||||
January 2024(2) | 1,000,000 | $ | 123.75 | — | $ | 214.9 | ||||||||||||||||||||
February 2024 | 61,463 | 122.83 | — | 214.9 | ||||||||||||||||||||||
March 2024 | 184,964 | 118.74 | 184,821 | 192.9 | ||||||||||||||||||||||
Total | 1,246,427 | $ | 122.96 | 184,821 |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
34 |
Number | Description | By reference to: | ||||||||||||
Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | ||||||||||||||
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | ||||||||||||||
Certification of Chief Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished pursuant to Rule 13a – 14(b))** | ||||||||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document* | |||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document* | |||||||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document* | |||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document* | |||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document* | |||||||||||||
104 | Cover Page Interactive Data File (embedded as Inline XBRL and contained in Exhibit 101) | |||||||||||||
*filed herewith | ||||||||||||||
**furnished herewith |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
35 |
CHURCHILL DOWNS INCORPORATED | |||||
April 24, 2024 | /s/ William C. Carstanjen | ||||
William C. Carstanjen | |||||
Chief Executive Officer | |||||
(Principal Executive Officer) | |||||
April 24, 2024 | /s/ Marcia A. Dall | ||||
Marcia A. Dall | |||||
Executive Vice President and Chief Financial Officer | |||||
(Principal Financial and Accounting Officer) |
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024 | ||||||||
36 |
Date: | April 24, 2024 | /s/ William C. Carstanjen | |||||||||
William C. Carstanjen Chief Executive Officer (Principal Executive Officer) |
Date: | April 24, 2024 | /s/ Marcia A. Dall | |||||||||
Marcia A. Dall Executive Vice President and Chief Financial Officer (Principal Financial & Accounting Officer) |
/s/ William C. Carstanjen | |||||
William C. Carstanjen Chief Executive Officer (Principal Executive Officer) | |||||
April 24, 2024 | |||||
/s/ Marcia A. Dall | |||||
Marcia A. Dall Executive Vice President and Chief Financial Officer (Principal Financial & Accounting Officer) | |||||
April 24, 2024 |
Description of Business |
3 Months Ended |
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Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | 1. DESCRIPTION OF BUSINESS Basis of Presentation Churchill Downs Incorporated (the "Company" or "CDI") financial statements are presented in conformity with the requirements of this Quarterly Report on Form 10-Q and consequently do not include all of the disclosures normally required by U.S. generally accepted accounting principles ("GAAP") or those normally made in our Annual Report on Form 10-K. The December 31, 2023 Condensed Consolidated Balance Sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. The following information is unaudited. All per share amounts assume dilution unless otherwise noted. This report should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2023. In the opinion of management, all adjustments necessary for a fair statement of this information have been made, and all such adjustments are of a normal, recurring nature. We conduct our business through three reportable segments: Live and Historical Racing, TwinSpires, and Gaming. We aggregate our other businesses as well as certain corporate operations, and other immaterial joint ventures, in All Other. We report net revenue and operating expense associated with these reportable segments in the accompanying Condensed Consolidated Statements of Comprehensive Income.
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Recent Accounting Pronouncements |
3 Months Ended |
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Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | 2. RECENT ACCOUNTING PRONOUNCEMENTS Recent Accounting Pronouncements - effective in 2024 or thereafter In October 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-06, Disclosure Improvements: Codification Amendments in Response to the Securities and Exchange Commission’s ("SEC") Disclosure Update and Simplification Initiative, to amend certain disclosure and presentation requirements for a variety of topics within FASB's Accounting Standards Codification ("ASC"). These amendments align the requirements in the ASC regarding the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K, announced by the SEC. The effective date for each amended topic in the ASC is either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or on June 30, 2027, if the SEC has not removed the requirements by that date. Early adoption is prohibited. The Company is currently evaluating the impact of this standard on the consolidated financial statements and related disclosures. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which enhances the disclosures required for operating segments in the Company’s annual and interim consolidated financial statements. The amendments are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption of the amendment is permitted, including adoption in any interim periods for which financial statements have not been issued. The Company is currently evaluating the impact of this standard on the consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. Early adoption is permitted. The amendments are expected to be applied prospectively to all annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of this standard on the consolidated financial statements and related disclosures.
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Acquisitions |
3 Months Ended |
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Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | 3. ACQUISITIONS Exacta Systems On August 22, 2023, the Company completed its acquisition of Exacta Systems, LLC ("Exacta") for a purchase consideration of $248.2 million, net of cash acquired, which consisted of a $241.3 million cash payment and $6.9 million of deferred payments, which are payable over two years from acquisition (the "Exacta Transaction"). As of March 31, 2024, there were $4.9 million deferred payments remaining. Exacta is a leading provider of central determinate system technology in Historical Racing Machines ("HRMs") across the country. The Exacta Transaction is enabling the Company to realize significant synergies related to the Company’s HRM operations. Exacta operates within the Company’s TwinSpires segment and will continue to service its growing portfolio of third-party HRM operators in Kentucky, Wyoming, and New Hampshire. Goodwill of $177.4 million related to the Exacta Transaction was recognized, of which $96.0 million was allocated to the Live and Historical Racing segment and $81.4 million was allocated to the TwinSpires segment. The goodwill related to the Exacta Transaction is deductible for tax purposes.
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Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | 4. GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill, by segment, is composed of the following:
Other intangible assets are comprised of the following:
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Income Taxes |
3 Months Ended |
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Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 5. INCOME TAXES The Company’s effective income tax rate for the three months ended March 31, 2024 was equal to the U.S. federal statutory rate of 21.0%. The Company's income tax rate for the three months ended March 31, 2024 includes an unfavorable impact from state income taxes and non-deductible officer’s compensation, that was offset by a $5.6 million benefit from the remeasurement of deferred income tax liabilities as a result of certain entity classification elections that were made in the first quarter of 2024 decreasing income attributable to states with higher tax rates compared to prior year. The Company’s effective income tax rate for the three months ended March 31, 2023 was higher than the U.S. federal statutory rate of 21.0% primarily resulting from state income taxes and non-deductible officer’s compensation.
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Shareholders' Equity |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | 6. SHAREHOLDERS' EQUITY Stock Repurchase Programs On September 29, 2021, the Board of Directors of the Company approved a common stock repurchase program of up to $500.0 million (the "2021 Stock Repurchase Program"). The 2021 Stock Repurchase Program includes and is not in addition to any unspent amount remaining under the prior program authorization. Repurchases may be made at management’s discretion from time to time on the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions. The repurchase program has no time limit and may be suspended or discontinued at any time. We had approximately $192.9 million of repurchase authority remaining under the 2021 Stock Repurchase Program at March 31, 2024, based on trade date. We repurchased the following shares under the 2021 Stock Repurchase Program:
On January 2, 2024, the Company closed on an agreement, dated December 18, 2023, with an affiliate of The Duchossois Group ("TDG") to repurchase 1,000,000 shares of the Company’s common stock, for $123.75 per share in a privately negotiated transaction for an aggregate purchase price of $123.8 million. This represented a discount of 4.03% to the closing price on December 15, 2023 of $128.95. The repurchase of shares of common stock from TDG was approved by the Company's Board of Directors separately from and did not reduce the authorized amount remaining under any existing common stock repurchase programs. The repurchase of the shares was funded using available cash and borrowings under the Company’s senior secured credit facility. Two for One Stock Split Effective May 22, 2023, the Company's common stock was split two-for-one with a proportionate increase in the number of its authorized shares of common stock. All share and per-share amounts in the Company’s condensed consolidated financial statements and related notes have been retroactively adjusted to reflect the effects of the stock split.
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Stock-based Compensation Plans |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation Plans | We have stock-based employee compensation plans with awards outstanding under the Churchill Downs Incorporated 2016 Omnibus Stock Incentive Plan (the "2016 Plan") and the Executive Long-Term Incentive Compensation Plan, which was adopted pursuant to the 2016 Plan. Our total stock-based compensation expense, which includes expenses related to restricted stock awards, restricted stock unit awards ("RSUs"), performance share unit awards ("PSUs"), and stock options associated with our employee stock purchase plan was $7.2 million for the three months ended March 31, 2024 and $8.6 million for the three months ended March 31, 2023. During the three months ended March 31, 2024, the Company awarded RSUs to employees, RSUs and PSUs to certain named executive officers ("NEOs"), and RSUs to directors. The vesting criteria for the PSU awards granted in 2024 were based on a three-year service period with two performance conditions and a market condition related to relative total shareholder return ("TSR") consistent with prior year grants. The total compensation cost we will recognize under the PSUs is determined using the Monte Carlo valuation methodology, which factors in the value of the TSR market condition when determining the grant date fair value of the PSU. Compensation cost for each PSU is recognized during the performance and service period based on the probable achievement of the two performance criteria. The PSUs are converted into shares of our common stock at the time the PSU award value is finalized. A summary of the RSUs and PSUs granted during 2024 is presented below (units in thousands):
(1) PSUs reflect the target number of units for the original PSU grant.
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | 8. DEBT The following table presents our total debt outstanding:
Credit Agreement At March 31, 2024, the Company’s senior secured credit facility (as amended from time to time, the “Credit Agreement") consisted of a $1.2 billion revolving credit facility (the "Revolver"), $300.0 million senior secured term loan B-1 due 2028 (the "Term Loan B-1"), $1.3 billion senior secured term loan A due 2027 (the "Term Loan A"), and $100.0 million swing line commitment. Term Loan B-1 bears interest at the Secured Overnight Financing Rate ("SOFR") plus 210 basis points and requires quarterly payments of 0.25% of the original $300.0 million balance. The Term Loan B-1 may be subject to additional mandatory prepayment from excess cash flow on an annual basis per the provisions of the Credit Agreement. The Revolver and Term Loan A bear interest at SOFR plus 10 basis points, plus a variable applicable margin which is determined by the Company's net leverage ratio. As of March 31, 2024, that applicable margin was 150 basis points which was based on the pricing grid in the Credit Agreement. The Company had $841.9 million available borrowing capacity, after consideration of $5.1 million in outstanding letters of credit, under the Revolver as of March 31, 2024. The Company is required to pay a commitment fee on the unused portion of the Revolver as determined by a pricing grid based on the consolidated total net secured leverage ratio of the Company. For the period ended March 31, 2024, the Company's commitment fee rate was 0.25%. 2027 Senior Notes As of March 31, 2024, we had $600.0 million in aggregate principal amount of 5.500% senior unsecured notes that mature on April 1, 2027 (the "2027 Senior Notes"). The 2027 Senior Notes were issued at par in a private offering to qualified institutional buyers, with interest payable in arrears on April 1st and October 1st of each year, commencing on October 1st, 2019. The Company may redeem some or all of the 2027 Senior Notes at redemption prices set forth in the 2027 Indenture. 2028 Senior Notes As of March 31, 2024, we had a total of $700.0 million in aggregate principal amount of 4.750% senior unsecured notes (the “2028 Senior Notes”) maturing on January 15, 2028. The 2028 Senior Notes consist of $500.0 million notes issued at par and $200.0 million notes issued at 103.25%. The 2028 Senior Notes were issued in a private offering to qualified institutional buyers, with interest payable in arrears on January 15th and July 15th of each year, commencing on July 15th, 2018. The 3.25% premium is being amortized through interest expense, net over the term of the notes. The Company may redeem some or all the 2028 Senior Notes at redemption prices set forth in the 2028 Indenture. 2030 Senior Notes As of March 31, 2024, we had $1.2 billion in aggregate principal amount of 5.750% senior unsecured notes that mature on April 13, 2030 (the "2030 Senior Notes"). The 2030 Senior Notes were issued at par in a private offering to qualified institutional buyers, with interest payable in arrears on April 1st and October 1st of each year, commencing on October 1st, 2022. The Company may redeem some or all the 2030 Senior Notes at redemption prices set forth in the 2030 Indenture. 2031 Senior Notes As of March 31, 2024, we had $600.0 million in aggregate principal amount of 6.750% senior unsecured notes that mature on April 25, 2031 (the "2031 Senior Notes"). The 2031 Senior Notes were issued at par in a private offering to qualified institutional buyers, with interest payable in arrears on May 1st and November 1st of each year, commencing on November 1st, 2023. The Company may redeem some or all of the 2031 Notes at any time prior to April 25, 2025, at redemption prices set forth in the 2031 Offering Memorandum.
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Revenue from Contracts with Customers |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contracts with Customers | 9. REVENUE FROM CONTRACTS WITH CUSTOMERS Performance Obligations As of March 31, 2024, our Live and Historical Racing segment had remaining performance obligations on contracts with a duration greater than one year relating to television rights, sponsorships, personal seat licenses, and admissions, with an aggregate transaction price of $157.6 million. The revenue we expect to recognize on these remaining performance obligations is $61.2 million for the remainder of 2024, $47.4 million in 2025, $23.3 million in 2026, and the remainder thereafter. As of March 31, 2024, our remaining performance obligations on contracts with a duration greater than one year in segments other than Live and Historical Racing were not material. Contract Assets and Contract Liabilities As of March 31, 2024 and December 31, 2023, contract assets were not material. As of March 31, 2024 and December 31, 2023, contract liabilities were $172.3 million and $92.3 million, respectively, which are included in current deferred revenue, non-current deferred revenue, and accrued expense in the accompanying Condensed Consolidated Balance Sheets. Contract liabilities primarily relate to the Live and Historical Racing segment and the increase was primarily due to deferred revenue related to the 150th Kentucky Derby. We recognized $5.8 million of revenue during the three months ended March 31, 2024, which was included in the contract liabilities balance at December 31, 2023. We recognized $3.6 million of revenue during the three months ended March 31, 2023, which was included in the contract liabilities balance at December 31, 2022. Disaggregation of Revenue The Company has included its disaggregated revenue disclosures as follows: •For the Live and Historical Racing segment, revenue is disaggregated between Churchill Downs Racetrack and historical racing properties given that our racing facilities revenues primarily revolve around live racing events while our historical racing properties revenues primarily revolve around historical racing. This segment is also disaggregated by location given the geographic economic factors that affect the revenue of service offerings. Within the Live and Historical Racing segment, revenue is further disaggregated between live and simulcast racing, historical racing, racing event-related services, and other services. • For the TwinSpires segment, revenue is disaggregated between live and simulcast racing, gaming, and other services. • For the Gaming segment, revenue is disaggregated by location given the geographic economic factors that affect the revenue of Gaming service offerings. Within the Gaming segment, revenue is further disaggregated between live and simulcast racing, racing event-related services, gaming, and other services. We believe that these disclosures depict how the amount, nature, timing, and uncertainty of cash flows are affected by economic factors. The tables below present net revenue from external customers and intercompany revenue from each of our segments:
(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 $13.4 million for the three months ended March 31, 2024 and $12.1 million for the three months ended March 31, 2023.
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Other Balance Sheet Items |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Balance Sheet Items | 10. OTHER BALANCE SHEET ITEMS Accounts receivable, net Accounts receivable is comprised of the following:
Accrued expenses and other current liabilities Accrued expenses and other current liabilities consisted of the following:
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Investments in and Advances to Unconsolidated Affiliates |
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Investments in and Advances to Affiliates [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in and Advances to Unconsolidated Affiliates | 11. INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES Investments in and advances to unconsolidated affiliates as of March 31, 2024 and December 31, 2023 primarily consisted of interests in Rivers Casino Des Plaines ("Rivers Des Plaines") and Miami Valley Gaming and Racing ("MVG"). Rivers Casino Des Plaines The ownership of Rivers Des Plaines is comprised of the following: (1) the Company owns 61.3%, (2) High Plaines Gaming, LLC ("High Plaines"), an affiliate of Rush Street Gaming, LLC, owns 36.0%, and (3) Casino Investors, LLC owns 2.7%. Both the Company and High Plaines have participating rights over Rivers Des Plaines, and both must consent to certain operating, investing and financing decisions. As a result, we account for Rivers Des Plaines using the equity method. As of March 31, 2024, the net aggregate basis difference between the Company’s investment in Rivers Des Plaines and the amounts of the underlying equity in net assets was $832.7 million. Our investment in Rivers Des Plaines was $532.6 million and $541.2 million as of March 31, 2024 and December 31, 2023, respectively. The Company received distributions from Rivers Des Plaines of $34.5 million and $33.8 million for the three months ended March 31, 2024 and 2023, respectively. Miami Valley Gaming and Racing The Company owns a 50% interest in MVG and Delaware North Companies Gaming & Entertainment Inc. ("DNC") owns the remaining 50% interest in MVG. Since both the Company and DNC have participating rights over MVG, and both must consent to certain operating, investing and financing decisions, we account for MVG using the equity method. Our investment in MVG was $115.2 million and $114.6 million as of March 31, 2024 and December 31, 2023, respectively. The Company received distributions from MVG of $10.5 million and $12.0 million for the three months ended March 31, 2024 and 2023, respectively. Summarized Financial Results for our Unconsolidated Affiliates Summarized below are the financial results for our unconsolidated affiliates.
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Fair Value of Assets And Liabilities |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Assets And Liabilities | 12. FAIR VALUE OF ASSETS AND LIABILITIES We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The following methods and assumptions are used to estimate the fair value of each class of financial instruments for which it is practicable to estimate. Restricted Cash Our restricted cash accounts held in money market and interest-bearing accounts qualify for Level 1 in the fair value hierarchy, which includes unadjusted quoted market prices in active markets for identical assets. Debt The fair value of the Company’s 2031 Senior Notes, 2030 Senior Notes, 2028 Senior Notes, and 2027 Senior Notes are estimated based on unadjusted quoted prices for identical or similar liabilities in markets that are not active and as such are Level 2 measurements. The fair values of the Company's Term Loan B-1, Term Loan A, and Revolver under the Credit Agreement approximate the gross carrying value of the variable rate debt and as such are Level 2 measurements. The carrying amounts and estimated fair values by input level of the Company's financial instruments are as follows:
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Contingencies |
3 Months Ended |
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Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 13. CONTINGENCIES We are involved in litigation arising in the ordinary course of conducting business. We carry insurance for workers' compensation claims from our employees and general liability for claims from independent contractors, customers, and guests. We are self-insured up to an aggregate stop loss for our general liability and workers' compensation coverages. We review all litigation on an ongoing basis when making accrual and disclosure decisions. For certain legal proceedings, we cannot reasonably estimate losses or a range of loss, if any, particularly for proceedings that are in the early stages of development or where the plaintiffs seek indeterminate damages. Various factors, including but not limited to, the outcome of potentially lengthy discovery and the resolution of important factual questions, may need to be determined before probability can be established or before a loss or range of loss can be reasonably estimated. In accordance with current accounting standards for loss contingencies and based upon information currently known to us, we establish reserves for litigation when it is probable that a loss associated with a claim or proceeding has been incurred and the amount of the loss or range of loss can be reasonably estimated. When no amount within the range of loss is a better estimate than any other amount, we accrue the minimum amount of the estimable loss. To the extent that such litigation against us may have an exposure to a loss in excess of the amount we have accrued, we believe that such excess would not be material to our consolidated financial condition, results of operations, or cash flows. Legal fees are expensed as incurred. If the loss contingency in question is not both probable and reasonably estimable, we do not establish an accrual and the matter will continue to be monitored for any developments that would make the loss contingency both probable and reasonably estimable. In the event that a legal proceeding results in a substantial judgment against us, or settlement by us, there can be no assurance that any resulting liability or financial commitment would not have a material adverse impact on our business.
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Net Income Per Common Share Computations |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Per Common Share Computations | 14. NET INCOME PER COMMON SHARE COMPUTATIONS The following is a reconciliation of the numerator and denominator of the net income per common share computations:
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Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | 15. SEGMENT INFORMATION We manage our operations through three reportable segments: Live and Historical Racing, TwinSpires, and Gaming. Our operating segments reflect the internal management reporting used by our chief operating decision maker to evaluate results of operations and to assess performance and allocate resources. On September 7, 2023, the Company began operating retail sports betting at its racetracks and HRM facilities in Kentucky. In addition to retail sports betting, third-party service providers began operating online sports wagering in partnership with the Company’s racetracks on September 28, 2023. Our retail and online sports betting business is included in the TwinSpires segment. Eliminations include the elimination of intersegment transactions. We utilize non-GAAP measures, including EBITDA (earnings before interest, taxes, depreciation and amortization) and Adjusted EBITDA. Our chief operating decision maker utilizes Adjusted EBITDA to evaluate segment performance, develop strategy, and allocate resources. Adjusted EBITDA includes the following adjustments: Adjusted EBITDA includes our portion of EBITDA from our equity investments. Adjusted EBITDA excludes: •Transaction expense, net which includes: –Acquisition, disposition, and property sale related charges; –Other transaction expense, including legal, accounting, and other deal-related expense; •Stock-based compensation expense; •Asset impairments; •Gain on property sales; •Legal reserves; •Pre-opening expense; and •Other charges, recoveries, and expenses As of December 31, 2021, our property in Arlington Heights, Illinois ("Arlington") ceased racing and simulcast operations and the property was sold on February 15, 2023 to the Chicago Bears. Arlington's results and exit costs in 2023 are treated as an adjustment to EBITDA and are included in other expenses, net in the Reconciliation of Comprehensive Income to Adjusted EBITDA. On June 26, 2023, the Company's management agreement for Lady Luck Casino Nemacolin ("Lady Luck") in Farmington, Pennsylvania expired and was not renewed. The Company completed the sale of substantially all its assets at Lady Luck for an immaterial amount. 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. For segment reporting, Adjusted EBITDA includes intercompany revenue and expense totals that are eliminated in the accompanying Condensed Consolidated Statements of Comprehensive Income. The tables below present net revenue from external customers, Adjusted EBITDA by segment and reconciles comprehensive income to Adjusted EBITDA: Net revenue by segment is comprised of the following:
Adjusted EBITDA by segment is comprised of the following:
Adjusted EBITDA by segment is comprised of the following:
The table below presents total asset information for each of our segments:
The table below presents total capital expenditures for each of our segments:
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Subsequent Event |
3 Months Ended |
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Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Event | 16. SUBSEQUENT EVENTS On April 8, 2024, the Company closed on the sale of 49% of the United Tote Company (“United Tote”), a wholly-owned subsidiary of CDI, to NYRA Content Management Solutions, LLC, a subsidiary of the New York Racing Association, Inc.
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Pay vs Performance Disclosure - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
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Pay vs Performance Disclosure | ||
Net income | $ 80.4 | $ 155.7 |
Insider Trading Arrangements |
3 Months Ended |
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Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Recent Accounting Pronouncements (Policies) |
3 Months Ended |
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Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements - Effective in 2024 or Thereafter | Recent Accounting Pronouncements - effective in 2024 or thereafter In October 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-06, Disclosure Improvements: Codification Amendments in Response to the Securities and Exchange Commission’s ("SEC") Disclosure Update and Simplification Initiative, to amend certain disclosure and presentation requirements for a variety of topics within FASB's Accounting Standards Codification ("ASC"). These amendments align the requirements in the ASC regarding the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K, announced by the SEC. The effective date for each amended topic in the ASC is either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or on June 30, 2027, if the SEC has not removed the requirements by that date. Early adoption is prohibited. The Company is currently evaluating the impact of this standard on the consolidated financial statements and related disclosures. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which enhances the disclosures required for operating segments in the Company’s annual and interim consolidated financial statements. The amendments are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption of the amendment is permitted, including adoption in any interim periods for which financial statements have not been issued. The Company is currently evaluating the impact of this standard on the consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. Early adoption is permitted. The amendments are expected to be applied prospectively to all annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of this standard on the consolidated financial statements and related disclosures.
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Goodwill And Other Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | Goodwill, by segment, is composed of the following:
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Schedule of Indefinite and Finite Lived Assets | Other intangible assets are comprised of the following:
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Shareholders' Equity (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Repurchase Agreements | We repurchased the following shares under the 2021 Stock Repurchase Program:
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Stock-based Compensation Plans (Tables) |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of RSUs and PSUs Granted | A summary of the RSUs and PSUs granted during 2024 is presented below (units in thousands):
(1) PSUs reflect the target number of units for the original PSU grant.
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-Term Debt Instruments | 8. DEBT The following table presents our total debt outstanding:
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Revenue from Contract with Customer (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Revenue From External Customers and Intercompany Revenue From Each Operating Segment | The tables below present net revenue from external customers and intercompany revenue from each of our segments:
(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 $13.4 million for the three months ended March 31, 2024 and $12.1 million for the three months ended March 31, 2023. The tables below present net revenue from external customers, Adjusted EBITDA by segment and reconciles comprehensive income to Adjusted EBITDA: Net revenue by segment is comprised of the following:
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Other Balance Sheet Items (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable | Accounts receivable is comprised of the following:
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Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following:
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Investments in and Advances to Unconsolidated Affiliates (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Investments in and Advances to Affiliates [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Affiliate Income Statement | Summarized below are the financial results for our unconsolidated affiliates.
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Affiliate Balance Sheet |
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Fair Value Of Assets And Liabilities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements, Recurring and Nonrecurring | The carrying amounts and estimated fair values by input level of the Company's financial instruments are as follows:
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Net Income Per Common Share Computations (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following is a reconciliation of the numerator and denominator of the net income per common share computations:
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Segment Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Revenue From External Customers and Intercompany Revenue From Each Operating Segment | The tables below present net revenue from external customers and intercompany revenue from each of our segments:
(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 $13.4 million for the three months ended March 31, 2024 and $12.1 million for the three months ended March 31, 2023. The tables below present net revenue from external customers, Adjusted EBITDA by segment and reconciles comprehensive income to Adjusted EBITDA: Net revenue by segment is comprised of the following:
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Schedule of Segment Reporting Information | Adjusted EBITDA by segment is comprised of the following:
Adjusted EBITDA by segment is comprised of the following:
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Schedule of Total Assets and Capital Expenditures by Operating Segment | The table below presents total asset information for each of our segments:
The table below presents total capital expenditures for each of our segments:
|
Description of Business - Additional Information (Details) |
3 Months Ended |
---|---|
Mar. 31, 2024
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 3 |
Acquisitions - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Aug. 22, 2023 |
Mar. 31, 2024 |
Dec. 31, 2023 |
|
Business Acquisition [Line Items] | |||
Goodwill | $ 900.2 | $ 899.9 | |
Operating Segments | Live and Historical | |||
Business Acquisition [Line Items] | |||
Goodwill | 376.3 | 376.2 | |
Operating Segments | TwinSpires | |||
Business Acquisition [Line Items] | |||
Goodwill | 233.6 | $ 233.4 | |
Exacta Systems | |||
Business Acquisition [Line Items] | |||
Total consideration | $ 248.2 | ||
Cash payment | 241.3 | ||
Deferred payments | $ 6.9 | ||
Deferred payment term | 2 years | ||
Deferred payment liability | 4.9 | ||
Goodwill | 177.4 | ||
Exacta Systems | Operating Segments | Live and Historical | |||
Business Acquisition [Line Items] | |||
Goodwill additions | 96.0 | ||
Exacta Systems | Operating Segments | TwinSpires | |||
Business Acquisition [Line Items] | |||
Goodwill additions | $ 81.4 |
Goodwill and Other Intangible Assets - Goodwill (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
| |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | $ 899.9 |
Adjustments | 0.3 |
Goodwill, Ending Balance | 900.2 |
All Other | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 0.0 |
Adjustments | 0.0 |
Goodwill, Ending Balance | 0.0 |
Live and Historical | Operating Segments | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 376.2 |
Adjustments | 0.1 |
Goodwill, Ending Balance | 376.3 |
TwinSpires | Operating Segments | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 233.4 |
Adjustments | 0.2 |
Goodwill, Ending Balance | 233.6 |
Gaming | Operating Segments | |
Goodwill [Roll Forward] | |
Goodwill, Beginning Balance | 290.3 |
Adjustments | 0.0 |
Goodwill, Ending Balance | $ 290.3 |
Goodwill and Other Intangible Assets - Intangible Assets (Details) - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Gross Carrying Amount | $ 96.0 | $ 97.5 |
Accumulated Amortization | (28.3) | (26.4) |
Definite-lived intangible assets, Net Carrying Amount | 67.7 | 71.1 |
Indefinite-lived intangible assets, Net Carrying Amount | 2,347.3 | 2,347.3 |
Total intangible assets | $ 2,415.0 | $ 2,418.4 |
Goodwill and Other Intangible Assets - Additional Information (Details) $ in Millions |
3 Months Ended |
---|---|
Jun. 30, 2023
USD ($)
| |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Non-cash impairment charges | $ 24.5 |
Income Taxes (Details) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2024
USD ($)
| |
Income Tax Disclosure [Abstract] | |
Effective income tax benefit | $ 5.6 |
Shareholders' Equity - Schedule of Repurchase Agreements (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Share Repurchase Program [Line Items] | ||
Repurchase aggregate cost | $ 145.7 | |
2021 Stock Repurchase Program | ||
Share Repurchase Program [Line Items] | ||
Repurchase of common stock (in shares) | 184,821 | 0 |
Repurchase aggregate cost | $ 22.0 | $ 0.0 |
Stock-based Compensation Plans - Additional Information (Details) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024
USD ($)
performanceCriteria
performanceCondition
|
Mar. 31, 2023
USD ($)
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | $ 7.2 | $ 8.6 |
Number of performance criteria | performanceCriteria | 2 | |
Performance Shares (PSUs) | Churchill Downs Incorporated 2016 Omnibus Stock Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period (in years) | 3 years | |
Number of performance conditions | performanceCondition | 2 | |
Continuing Operations | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation | $ 7.2 | $ 8.6 |
Stock-based Compensation Plans - Summary of RSUs and PSUs Granted (Details) shares in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2024
shares
| |
Restricted Stock Units (RSUs) | Share-based Compensation Award, Tranche One | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Units Awarded (in shares) | 132 |
Award vesting period (in years) | 3 years |
Performance Shares (PSUs) | Share-based Compensation Award, Tranche One | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Units Awarded (in shares) | 63 |
Performance Shares (PSUs) | Share-based Compensation Award, Tranche Two | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Service period vested (in years) | 3 years |
Revenue from Contracts with Customers - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Revenue from Contract with Customer [Abstract] | |||
Contract with customer, revenue recognized | $ 5.8 | $ 3.6 | |
Contract with customer, liability | $ 172.3 | $ 92.3 |
Other Balance Sheet Items - Schedule of Accounts Receivable (Details) - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 120.3 | $ 111.9 |
Allowance for credit losses | (5.3) | (5.0) |
Accounts receivable, net | 115.0 | 106.9 |
Trade receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 35.2 | 42.6 |
Simulcast and online wagering receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | 49.4 | 44.9 |
Other receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Accounts receivable | $ 35.7 | $ 24.4 |
Other Balance Sheet Items - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Payables and Accruals [Abstract] | ||
Account wagering deposits liability | $ 53.3 | $ 58.7 |
Accrued salaries and related benefits | 28.2 | 45.1 |
Purses payable | 38.2 | 35.2 |
Accrued interest | 76.6 | 49.4 |
Accrued fixed assets | 69.5 | 88.6 |
Accrued gaming liabilities | 27.3 | 29.5 |
Other | 130.2 | 120.3 |
Total | $ 423.3 | $ 426.8 |
Investments in and Advances to Unconsolidated Affiliates - Affiliate Income Statement (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Investments in and Advances to Affiliates [Line Items] | ||
Net revenue | $ 590.9 | $ 559.5 |
Operating and SG&A expense | 54.8 | 52.3 |
Operating income | 126.3 | 119.9 |
Interest and other, net | (70.4) | (64.7) |
Net income | 80.4 | 155.7 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||
Investments in and Advances to Affiliates [Line Items] | ||
Net revenue | 216.9 | 220.6 |
Operating and SG&A expense | 134.9 | 137.2 |
Depreciation and amortization | 6.3 | 5.7 |
Total operating expense | 141.2 | 142.9 |
Operating income | 75.7 | 77.7 |
Interest and other, net | (11.0) | (10.9) |
Net income | $ 64.7 | $ 66.8 |
Investments in and Advances to Unconsolidated Affiliates - Affiliate Balance Sheet (Details) - USD ($) $ in Millions |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Assets | ||
Current assets | $ 416.0 | $ 400.8 |
Other assets, net | 19.3 | 19.3 |
Total assets | 7,066.8 | 6,955.5 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Current liabilities | 837.2 | 755.8 |
Other liabilities | 138.9 | 137.8 |
Members' deficit | 827.8 | 894.5 |
Total liabilities and shareholders' equity | 7,066.8 | 6,955.5 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||
Assets | ||
Current assets | 99.2 | 104.8 |
Property and equipment, net | 336.4 | 339.4 |
Other assets, net | 270.1 | 266.1 |
Total assets | 705.7 | 710.3 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Current liabilities | 116.4 | 106.2 |
Long-term debt | 845.6 | 847.2 |
Other liabilities | 0.8 | 0.7 |
Members' deficit | (257.1) | (243.8) |
Total liabilities and shareholders' equity | $ 705.7 | $ 710.3 |
Net Income Per Common Share Computations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Numerator for basic and diluted net income per common share: | ||
Net income | $ 80.4 | $ 155.7 |
Denominator for net income per common share: | ||
Basic (in shares) | 74,100 | 75,300 |
Plus dilutive effect of stock awards (in shares) | 600 | 800 |
Diluted (in shares) | 74,700 | 76,100 |
Basic | ||
Basic net income (in dollars per share) | $ 1.09 | $ 2.07 |
Diluted | ||
Diluted net income (in dollars per share) | $ 1.08 | $ 2.05 |
Segment Information - Additional Information (Details) |
3 Months Ended |
---|---|
Mar. 31, 2024
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Subsequent Event (Details) |
Apr. 08, 2024 |
---|---|
Subsequent Event | United Tote Company | |
Subsequent Event [Line Items] | |
Percent sold | 49.00% |
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