Segment Information

3 Months Ended

Mar. 31, 2012

Segment Information [Abstract]

Segment Information

NOTE 9 — SEGMENT INFORMATION

The Company operates in the following four segments: (1) Racing Operations, which includes Churchill Downs Racetrack, Arlington Park Race Course and its eleven OTBs, Calder Race Course and Fair Grounds Race Course and the pari-mutuel activity generated at its eleven OTBs; (2) Gaming, which includes video poker and gaming operations at Calder Casino, Fair Grounds Slots, Harlow's and Video Services, LLC ("VSI"); (3) Online Business, which includes TwinSpires, our Advance Deposit Wagering ("ADW") business, Fair Grounds Account Wagering, Bloodstock Research Information Services and Velocity, a business focused on high wagering-volume international customers, as well as the Company's equity investment in HRTV, LLC; and (4) Other Investments, which includes United Tote, MVG, Bluff and the Company's other minor investments. Eliminations include the elimination of intersegment transactions.

The accounting policies of the segments are the same as those described in the "Summary of Significant Accounting Policies" in Note 1 to the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2011. The Company uses EBITDA (defined as earnings before interest, taxes, depreciation and amortization) as a key performance measure of the results of operations for purposes of evaluating performance internally. Management believes that the use of this measure enables management and investors to evaluate and compare from period to period the Company's operating performance in a meaningful and consistent manner. However, EBITDA should not be considered as an alternative to, or more meaningful than, net earnings (as determined in accordance with accounting principles generally accepted in the United States of America) as a measure of our operating results. A reconciliation of EBITDA to net earnings (loss) is provided in the following table.

The table below presents information about the reported segments for the three months ended March 31, 2012 and 2011 (in thousands):

	Three Months Ended March 31,
	2012			2011
Net revenues from external customers:
Churchill Downs	$	2,550		$	2,322
Arlington Park		9,417			9,348
Calder		1,868			2,668
Fair Grounds		16,347			17,290
Total Racing Operations		30,182			31,628
Calder Casino		21,879			20,612
Fair Grounds Slots		12,031			12,171
VSI		9,563			9,427
Harlow's Casino		15,863			16,877
Total Gaming		59,336			59,087
Online Business		44,035			36,803
Other Investments		4,502			3,965
Corporate		141			71
Net revenues from external customers	$	138,196		$	131,554
Intercompany net revenues:
Churchill Downs	$	186		$	148
Arlington Park		556			533
Calder		10			61
Fair Grounds		747			778
Total Racing Operations		1,499			1,520
Online Business		206			196
Other Investments		750			599
Eliminations		(2,455	)		(2,315	)
Net revenues	$	—		$	—
Reconciliation of Segment EBITDA to net earnings (loss):
Racing Operations	$	(11,539	)	$	(12,638	)
Gaming		20,389			17,533
Online Business		10,421			7,545
Other Investments		(330	)		(92	)
Corporate		(1,601	)		(1,174	)
Total EBITDA		17,340			11,174
Depreciation and amortization		(13,807	)		(13,986	)
Interest income (expense), net		(1,205	)		(2,392	)
Income tax (provision) benefit		(974	)		2,018
Earnings (loss) from continuing operations		1,354			(3,186	)
Discontinued operations, net of income taxes		(1	)		1
Net earnings (loss) and comprehensive earnings	$	1,353		$	(3,185	)

The table below presents information about equity in earnings (losses) of unconsolidated investments included in the Company's reported segments for the three months ended March 31, 2012 and 2011 (in thousands):

	Three Months Ended March 31,
	2012			2011
Online Business	$	(38	)	$	(446	)
Other Investments		(182	)		30
	$	(220	)	$	(416	)

The table below presents total asset information for the reported segments (in thousands):

	March 31,		December 31,
	2012		2011
Total assets:
Racing Operations	$	502,934	$	504,749
Gaming		219,319		242,174
Online Business		183,601		183,397
Other Investments		31,334		17,702
	$	937,188	$	948,022

The table below presents total capital expenditure information for the reported segments (in thousands):

	Three Months Ended March 31,
	2012		2011
Capital expenditures, net:
Racing Operations	$	1,573	$	1,802
Gaming		1,201		2,793
Online Business		1,062		492
Other Investments		5,284		430
	$	9,120	$	5,517