Churchill Downs Incorporated (Nasdaq: CHDN) (the "Company", "CDI")
today reported business results for the third quarter ended
September 30, 2023.
Company Highlights
- Third quarter
results:
- Record net
revenue of $572.5 million, up 49% compared to the prior year
quarter.
- Net income of
$61.0 million, up 7% compared to the prior year quarter.
- Record Adjusted
EBITDA of $218.2 million, up 34% compared to the prior year
quarter.
- Delivered record third quarter revenue and Adjusted EBITDA
across our Live and Historical Racing and Gaming segments and
record third quarter Adjusted EBITDA in our TwinSpires segment:
- Live and Historical Racing revenue up 120% and Adjusted EBITDA
up 134% compared to the prior year quarter.
- Derby City Gaming delivered all-time record Adjusted EBITDA in
third quarter and Oak Grove delivered record third quarter Adjusted
EBITDA.
- TwinSpires revenue up 5% and Adjusted EBITDA up 9% compared to
the prior year quarter.
- Gaming revenue up 32% and Adjusted EBITDA up 10% compared to
the prior year quarter.
- We completed the acquisition of Exacta Systems, LLC ("Exacta")
on August 22, 2023.
- We opened Rosie's Gaming Emporium in Emporia, Virginia on
September 26, 2023. This represents our seventh Rosie's HRM
entertainment venue in Virginia.
- We are finalizing design and construction plans for a new HRM
entertainment facility on a 20-acre site with convenient access to
Highway 60 in Eastern Daviess County near Owensboro, Kentucky with
a target opening date in first quarter 2025 and a target total
spend of $100 to $110 million.
- We opened six race and sports books at our Kentucky properties
on September 7, 2023.
- Our joint venture, RVA Entertainment Holdings, LLC, launched a
November 2023 referendum campaign to win approval to develop a
casino in Richmond, Virginia.
- We launched a November 2023 referendum campaign to win approval
to develop our eighth HRM entertainment venue in Manassas Park,
Virginia.
- We ended the third quarter with net bank leverage of 4.1x and
maintained our commitment to returning capital to shareholders
through $37.3 million of share repurchases in the third quarter and
by announcing our Board's approval of a $0.382 per share dividend
to shareholders of record as of December 1, 2023 and payable on
January 5, 2024. This represents the thirteenth consecutive year of
increased dividend per share.
CONSOLIDATED RESULTS |
|
|
Third Quarter |
(in millions, except per share data) |
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Net
revenue |
$ |
572.5 |
|
|
$ |
383.1 |
|
Net income |
$ |
61.0 |
|
|
$ |
57.0 |
|
Diluted
EPS (a) |
$ |
0.79 |
|
|
$ |
0.74 |
|
Adjusted EBITDA(b) |
$ |
218.2 |
|
|
$ |
163.2 |
|
|
(a) The number of
shares have been adjusted for the 2023 stock split. |
(b) This is a
non-GAAP measure. See explanation of non-GAAP measures below. |
|
|
The summaries below present revenue from
external customers and intercompany revenue from each of our
reportable segments. All comparisons discussed below are
referencing the third quarter of 2023 as compared to the third
quarter of 2022.
Live and Historical Racing
|
Third Quarter |
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Revenue |
$ |
225.5 |
|
|
$ |
102.4 |
|
Adjusted EBITDA |
|
80.9 |
|
|
|
34.5 |
|
|
|
|
|
|
|
|
|
For the third quarter of 2023, revenue increased
$123.1 million driven by an $89.0 million increase attributable to
the Virginia properties acquired in the P2E Transaction, a $14.7
million increase attributable to the properties acquired in the
Ellis Park and Chasers Transactions, an $8.8 million increase
primarily due to the opening of Turfway Park in Northern Kentucky
in September 2022, a $7.4 million increase from our Derby City
Gaming property in Louisville, and a $4.3 million increase from our
Oak Grove property in Southwestern Kentucky. These increases were
partially offset by a $1.1 million decrease at Churchill Downs
Racetrack due to the decision to move July race days as part of the
Churchill Downs Racetrack Spring Meet to Ellis Park.
Adjusted EBITDA increased $46.4 million driven
by a $38.3 million increase attributable to the Virginia properties
acquired in the P2E Transaction and a portion of the benefit from
the Exacta Transaction, a $7.3 million increase from continued
growth at our Derby City Gaming property in Louisville and our Oak
Grove property in Southwestern Kentucky, and a $2.9 million
increase attributable to our other Live and Historical Racing
properties. These increases were partially offset by a $2.1 million
decrease at Churchill Downs Racetrack primarily due to the decision
to move July race days as part of the Churchill Downs Racetrack
Spring Meet to Ellis Park.
TwinSpires
|
Third Quarter |
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Revenue |
$ |
112.4 |
|
|
$ |
107.4 |
|
Adjusted EBITDA |
|
33.9 |
|
|
|
31.1 |
|
|
|
|
|
|
|
|
|
For the third quarter of 2023, revenue increased
$5.0 million driven by a $5.5 million increase attributable to the
Exacta Transaction and a $0.9 million increase in all other Horse
Racing revenue primarily from the B2B expansion strategy associated
with United Tote totalisator fees. These increases were partially
offset by a $1.4 million reduction in Sports and Casino
revenue.
Adjusted EBITDA increased $2.8 million driven by
a $3.1 million increase attributable to the Exacta Transaction,
partially offset by a $0.3 million net decrease in Horse Racing and
Sports and Casino.
Gaming
|
Third Quarter |
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Revenue |
$ |
244.9 |
|
|
$ |
185.9 |
|
Adjusted EBITDA |
|
122.3 |
|
|
|
111.6 |
|
|
|
|
|
|
|
|
|
For the third quarter of 2023, revenue increased
$59.0 million driven by a $70.2 million increase attributable to
the New York and Iowa properties acquired in the P2E Transaction,
partially offset by an $8.7 million decrease in Pennsylvania
primarily due to our decision not to renew the management agreement
at Lady Luck, and a $2.5 million net decrease from our other gaming
properties.
Adjusted EBITDA increased $10.7 million driven
by a $25.0 million increase attributable to the New York and Iowa
properties acquired in the P2E Transaction, partially offset by a
$6.5 million decrease from our equity investments, a $4.9 million
decrease from our other wholly-owned gaming properties, and a $2.9
million decrease attributable to proceeds for business interruption
insurance claims related to Hurricane Ida. We received $4.1 million
of business interruption insurance proceeds in the third quarter of
2022, compared to $1.2 million during the third quarter of
2023.
All Other
|
Third Quarter |
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Revenue |
$ |
0.2 |
|
|
$ |
1.2 |
|
Adjusted EBITDA |
|
(18.9 |
) |
|
|
(14.0 |
) |
For the third quarter of 2023, Adjusted EBITDA
decreased $4.9 million primarily driven by increased corporate
compensation and benefits related expenses and legal and
professional fees.
Exacta Systems, LLC
On August 22, 2023, the Company completed its
previously announced acquisition of Exacta.
Share Repurchase Program
The Company repurchased $37.3 million of its
common stock in the third quarter of 2023 and had approximately
$232.9 million of repurchase authority remaining under the
Company's share repurchase program as of September 30, 2023, based
on trade date.
Annual Dividend
On October 24, 2023, the Company's Board of
Directors approved an annual cash dividend on the Company's common
stock of $0.382 per outstanding share, a seven percent increase
over the prior year on a split adjusted basis. The dividend is
payable on January 5, 2024, to shareholders of record as of the
close of business on December 1, 2023, with the aggregate cash
dividend paid to each shareholder rounded to the nearest whole
cent. This marks the thirteenth consecutive year that the Company
has increased the dividend per share.
The Company's third quarter of 2023 net income
was $61.0 million compared to $57.0 million in the prior year
quarter.
The following impacted the comparability of the
Company's third quarter net income:
-
$0.9 million after-tax net increase in other nonrecurring
expenses.
Excluding the items above, third quarter 2023
net income increased $4.9 million primarily due to the
following:
-
$34.5 million after-tax increase primarily driven by the
addition of the properties acquired as part of the P2E Transaction
in the results of our operations;
-
Partially offset by a $22.7 million after-tax increase in interest
expense associated with higher outstanding debt balances and higher
interest rates, and a $6.9 million after-tax decrease in the equity
income from our unconsolidated affiliates.
Conference Call
A conference call regarding this news release is
scheduled for Thursday, October 26, 2023 at 9 a.m. ET. Investors
and other interested parties may listen to the teleconference by
accessing the online, real-time webcast and broadcast of the call
at http://ir.churchilldownsincorporated.com/events.cfm, or by
registering in advance via teleconference here. Once registration
is completed, participants will be provided with a dial-in number
containing a personalized conference code to access the call. All
participants are encouraged to dial-in 15 minutes prior to the
start time. An online replay will be available by noon ET on
Thursday, October 26, 2023. A copy of the Company’s news release
announcing quarterly results and relevant financial and statistical
information about the period will be accessible at
http://www.churchilldownsincorporated.com.
Use of Non-GAAP Measures
In addition to the results provided in
accordance with GAAP, the Company also uses non-GAAP measures,
including adjusted net income, adjusted diluted EPS, EBITDA
(earnings before interest, taxes, depreciation and amortization),
and Adjusted EBITDA.
The Company uses non-GAAP measures as a key
performance measure of the results of operations for purposes of
evaluating performance internally. These measures facilitate
comparison of operating performance between periods and help
investors to better understand the operating results of the Company
by excluding certain items that may not be indicative of the
Company's core business or operating results. The Company believes
the use of these measures enables management and investors to
evaluate and compare, from period to period, the Company’s
operating performance in a meaningful and consistent manner. The
non-GAAP measures are a supplemental measure of our performance
that is not required by, or presented in accordance with, GAAP, and
should not be considered as an alternative to, or more meaningful
than, net income or diluted EPS (as determined in accordance with
GAAP) as a measure of our operating results.
We use Adjusted EBITDA to evaluate segment
performance, develop strategy, and allocate resources. 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.
Adjusted net income and adjusted diluted EPS
exclude discontinued operations net income or loss; net income or
loss attributable to noncontrolling interest; changes in fair value
for interest rate swaps related to Rivers Des Plaines; Rivers Des
Plaines' legal reserves and transaction costs; transaction expense,
which includes acquisition and disposition related charges, as well
as legal, accounting, and other deal-related expense; pre-opening
expense; and certain other gains, charges, recoveries, and
expenses.
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;
- Direct online
Sports and Casino business exit costs; and
- Other
transaction expense, including legal, accounting, and other
deal-related expense;
- Stock-based
compensation expense;
- Rivers Des
Plaines' impact on our investments in unconsolidated affiliates
from:
- The impact of
changes in fair value of interest rate swaps; and
- Legal reserves
and transaction costs;
- Asset
impairments;
- Gain on property
and asset sales;
- Legal
reserves;
- Pre-opening
expense; and
- Other charges,
recoveries, and expenses.
On June 26, 2023, the Company's management
agreement for Lady Luck Casino Nemacolin expired and was not
renewed. The Company completed the sale of substantially all of its
assets at Lady Luck Casino Nemacolin for an immaterial amount.
As of December 31, 2021, 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
2022 and 2023 are treated as an adjustment to EBITDA.
For segment reporting, Adjusted EBITDA includes
intercompany revenue and expense totals that are eliminated in the
Consolidated Statements of Comprehensive Income. See the
Reconciliation of Comprehensive Income to Adjusted EBITDA included
herewith for additional information.
About Churchill Downs
Incorporated
Churchill Downs Incorporated (NASDAQ: CHDN) has
been creating extraordinary entertainment experiences for nearly
150 years, beginning with the Company’s most iconic and enduring
asset, the Kentucky Derby. Headquartered in Louisville, Kentucky,
CDI has expanded through the development of live and historical
racing entertainment venues, the growth of the TwinSpires horse
racing online wagering business, and the operation and development
of regional casino gaming properties. More information is available
at http://www.churchilldownsincorporated.com.
Contact: Kaitlin Buzzetto(502)
394-1091Kaitlin.Buzzetto@kyderby.com
This news release contains various
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Act"), which
provides certain "safe harbor" provisions for forward-looking
statements. All forward-looking statements made in this news
release are made pursuant to the Act. The reader is cautioned that
such forward-looking statements are based on information available
at the time and / or management’s good faith belief with respect to
future events, and are subject to risks and uncertainties that
could cause actual performance or results to differ materially from
those expressed in the statements. Forward-looking statements speak
only as of the date that the statement was made. We assume no
obligation to update forward-looking information to reflect actual
results, changes in assumptions or changes in other factors
affecting forward-looking information. Forward-looking statements
are typically identified by the use of terms such as “anticipate,”
"believe," "could," "estimate," "expect," "intend," "may," "might,"
"plan," "predict," "project," "seek," "should," "will," and similar
words, although some forward-looking statements are expressed
differently.
Although we believe that the expectations
reflected in such forward-looking statements are reasonable, we can
give no assurance that such expectations will prove to be correct.
Important factors, that could cause actual results to differ
materially from expectations include the following: the occurrence
of extraordinary events, such as terrorist attacks, public health
threats, civil unrest, and inclement weather, including as a result
of climate change; the effect of economic conditions on our
consumers' confidence and discretionary spending or our access to
credit, including the impact of inflation; additional or increased
taxes and fees; the impact of the novel coronavirus (COVID-19)
pandemic, including the emergence of variant strains, and related
economic matters on our results of operations, financial conditions
and prospects; lack of confidence in the integrity of our core
businesses or any deterioration in our reputation; loss of key or
highly skilled personnel, as well as general disruptions in the
general labor market; cyber security risk, including breaches, or
loss or misuse of our stored information as a result of a breach,
including customers’ personal information, could lead to government
enforcement actions or other litigation; the impact of significant
competition, and the expectation the competition levels will
increase; changes in consumer preferences, attendance, wagering,
and sponsorships; risks associated with equity investments,
strategic alliances and other third-party agreements; inability to
respond to rapid technological changes in a timely manner;
concentration and evolution of slot machine and historical racing
machine (HRM) manufacturing and other technology conditions that
could impose additional costs; failure to enter into or maintain
agreements with industry constituents, including horsemen and other
racetracks; inability to successfully focus on market access and
retail operations for our TwinSpires Sports and Casino business and
effectively compete; reliance on our technology services and
catastrophic events and system failures disrupting our operations;
inability to identify, complete, or fully realize the benefits of,
our proposed acquisitions, divestitures, development of new venues
or the expansion of existing facilities on time, on budget, or as
planned; difficulty in integrating recent or future acquisitions
into our operations; cost overruns and other uncertainties
associated with the development of new venues and the expansion of
existing facilities; general risks related to real estate ownership
and significant expenditures, including risks related to
environmental liabilities; personal injury litigation related to
injuries occurring at our racetracks; compliance with the Foreign
Corrupt Practices Act or applicable money-laundering regulations;
payment-related risks, such as risk associated with fraudulent
credit card and debit card use; work stoppages and labor issues;
risks related to pending or future legal proceedings and other
actions; highly regulated operations and changes in the regulatory
environment could adversely affect our business; restrictions in
our debt facilities limiting our flexibility to operate our
business; failure to comply with the financial ratios and other
covenants in our debt facilities and other indebtedness; increase
to interest rates (due to inflation or otherwise), disruptions in
the credit markets or changes to our credit ratings may adversely
affect our business; increase in our insurance costs, or inability
to obtain similar insurance coverage in the future, and inability
to recover under our insurance policies for damages sustained at
our properties in the event of inclement weather and casualty
events; and other factors described in our most recent Annual
Report on Form 10-K and in other filings we make with the
Securities and Exchange Commission.
We do not undertake any obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
law.
CHURCHILL DOWNS INCORPORATEDCONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME(Unaudited) |
|
Three Months Ended |
|
Nine Months Ended |
|
September 30, |
|
September 30, |
(in millions, except per common share data) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net revenue: |
|
|
|
|
|
|
|
Live and Historical Racing |
$ |
219.5 |
|
|
$ |
92.3 |
|
|
$ |
818.9 |
|
|
$ |
439.2 |
|
TwinSpires |
|
108.5 |
|
|
|
106.2 |
|
|
|
340.7 |
|
|
|
343.3 |
|
Gaming |
|
244.3 |
|
|
|
183.4 |
|
|
|
740.2 |
|
|
|
545.0 |
|
All Other |
|
0.2 |
|
|
|
1.2 |
|
|
|
0.7 |
|
|
|
2.2 |
|
Total net revenue |
|
572.5 |
|
|
|
383.1 |
|
|
|
1,900.5 |
|
|
|
1,329.7 |
|
Operating expense: |
|
|
|
|
|
|
|
Live and Historical Racing |
|
158.2 |
|
|
|
80.1 |
|
|
|
505.7 |
|
|
|
269.2 |
|
TwinSpires |
|
73.4 |
|
|
|
64.5 |
|
|
|
219.8 |
|
|
|
229.6 |
|
Gaming |
|
175.6 |
|
|
|
133.0 |
|
|
|
528.3 |
|
|
|
387.0 |
|
All Other |
|
1.3 |
|
|
|
2.9 |
|
|
|
12.0 |
|
|
|
8.8 |
|
Selling, general and administrative expense |
|
50.2 |
|
|
|
38.4 |
|
|
|
150.6 |
|
|
|
112.7 |
|
Asset impairments |
|
— |
|
|
|
— |
|
|
|
24.5 |
|
|
|
4.9 |
|
Transaction expense, net |
|
1.5 |
|
|
|
1.2 |
|
|
|
1.8 |
|
|
|
7.4 |
|
Total operating expense |
|
460.2 |
|
|
|
320.1 |
|
|
|
1,442.7 |
|
|
|
1,019.6 |
|
Operating income |
|
112.3 |
|
|
|
63.0 |
|
|
|
457.8 |
|
|
|
310.1 |
|
Other (expense) income: |
|
|
|
|
|
|
|
Interest expense, net |
|
(67.9 |
) |
|
|
(36.2 |
) |
|
|
(197.8 |
) |
|
|
(92.6 |
) |
Equity in income of unconsolidated affiliates |
|
33.3 |
|
|
|
42.4 |
|
|
|
110.4 |
|
|
|
115.4 |
|
Gain on sale of assets |
|
— |
|
|
|
— |
|
|
|
114.0 |
|
|
|
274.6 |
|
Miscellaneous, net |
|
4.1 |
|
|
|
4.2 |
|
|
|
5.5 |
|
|
|
4.4 |
|
Total other (expense) income |
|
(30.5 |
) |
|
|
10.4 |
|
|
|
32.1 |
|
|
|
301.8 |
|
Income from operations before provision for income taxes |
|
81.8 |
|
|
|
73.4 |
|
|
|
489.9 |
|
|
|
611.9 |
|
Income tax provision |
|
(20.8 |
) |
|
|
(16.4 |
) |
|
|
(130.2 |
) |
|
|
(173.5 |
) |
Net income |
$ |
61.0 |
|
|
$ |
57.0 |
|
|
$ |
359.7 |
|
|
$ |
438.4 |
|
|
|
|
|
|
|
|
|
Net income per common share data: |
|
|
|
|
|
|
|
Basic net income |
$ |
0.81 |
|
|
$ |
0.75 |
|
|
$ |
4.78 |
|
|
$ |
5.76 |
|
Diluted net income |
$ |
0.79 |
|
|
$ |
0.74 |
|
|
$ |
4.69 |
|
|
$ |
5.68 |
|
Weighted average shares outstanding(a): |
|
|
|
|
|
|
|
Basic |
|
75.2 |
|
|
|
75.6 |
|
|
|
75.3 |
|
|
|
76.1 |
|
Diluted |
|
77.1 |
|
|
|
76.7 |
|
|
|
76.7 |
|
|
|
77.2 |
|
|
|
|
|
|
|
|
|
(a) The number of shares have been
adjusted for the 2023 stock split.
CHURCHILL DOWNS INCORPORATEDCONSOLIDATED
BALANCE SHEETS(Unaudited) |
(in millions) |
September 30, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
129.9 |
|
|
$ |
129.8 |
|
Restricted cash |
|
63.3 |
|
|
|
74.9 |
|
Accounts receivable, net |
|
102.2 |
|
|
|
81.5 |
|
Income taxes receivable |
|
5.9 |
|
|
|
14.0 |
|
Other current assets |
|
69.3 |
|
|
|
44.3 |
|
Total current assets |
|
370.6 |
|
|
|
344.5 |
|
Property and equipment, net |
|
2,383.6 |
|
|
|
1,978.3 |
|
Investment in and advances to unconsolidated affiliates |
|
660.1 |
|
|
|
659.4 |
|
Goodwill |
|
899.9 |
|
|
|
723.8 |
|
Other
intangible assets, net |
|
2,417.3 |
|
|
|
2,391.8 |
|
Other
assets |
|
19.0 |
|
|
|
27.0 |
|
Long-term assets held for sale |
|
— |
|
|
|
82.0 |
|
Total assets |
$ |
6,750.5 |
|
|
$ |
6,206.8 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
$ |
169.0 |
|
|
$ |
145.5 |
|
Accrued expenses and other current liabilities |
|
401.4 |
|
|
|
363.1 |
|
Current deferred revenue |
|
30.5 |
|
|
|
39.0 |
|
Current maturities of long-term debt |
|
68.0 |
|
|
|
47.0 |
|
Dividends payable |
|
1.0 |
|
|
|
27.0 |
|
Total current liabilities |
|
669.9 |
|
|
|
621.6 |
|
Long-term debt, net of current maturities and loan origination
fees |
|
1,585.0 |
|
|
|
2,081.6 |
|
Notes
payable, net of debt issuance costs |
|
3,069.8 |
|
|
|
2,477.1 |
|
Non-current deferred revenue |
|
9.5 |
|
|
|
11.8 |
|
Deferred income taxes |
|
386.1 |
|
|
|
340.8 |
|
Other
liabilities |
|
141.5 |
|
|
|
122.4 |
|
Total liabilities |
|
5,861.8 |
|
|
|
5,655.3 |
|
Commitments and contingencies |
|
|
|
Shareholders' equity: |
|
|
|
Preferred stock |
|
— |
|
|
|
— |
|
Common stock |
|
— |
|
|
|
— |
|
Retained earnings |
|
889.6 |
|
|
|
552.4 |
|
Accumulated other comprehensive loss |
|
(0.9 |
) |
|
|
(0.9 |
) |
Total shareholders' equity |
|
888.7 |
|
|
|
551.5 |
|
Total liabilities and shareholders'
equity |
$ |
6,750.5 |
|
|
$ |
6,206.8 |
|
CHURCHILL DOWNS INCORPORATEDCONSOLIDATED
STATEMENTS OF CASH FLOWS(Unaudited) |
|
Nine Months Ended September 30, |
(in millions) |
|
2023 |
|
|
|
2022 |
|
Cash flows from operating activities: |
|
|
|
Net income |
$ |
359.7 |
|
|
$ |
438.4 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
Depreciation and amortization |
|
121.8 |
|
|
|
78.7 |
|
Distributions from unconsolidated affiliates |
|
126.6 |
|
|
|
117.9 |
|
Equity in income of unconsolidated affiliates |
|
(110.4 |
) |
|
|
(115.4 |
) |
Stock-based compensation |
|
24.8 |
|
|
|
23.5 |
|
Deferred income taxes |
|
45.3 |
|
|
|
26.7 |
|
Asset impairments |
|
24.5 |
|
|
|
4.9 |
|
Amortization of operating lease assets |
|
4.8 |
|
|
|
3.9 |
|
Gain on sale of assets |
|
(114.0 |
) |
|
|
(274.6 |
) |
Other |
|
6.5 |
|
|
|
5.8 |
|
Changes in operating assets and liabilities: |
|
|
|
Income taxes |
|
6.0 |
|
|
|
127.3 |
|
Deferred revenue |
|
(10.8 |
) |
|
|
(34.6 |
) |
Other assets and liabilities |
|
14.0 |
|
|
|
22.0 |
|
Net cash provided by operating activities |
|
498.8 |
|
|
|
424.5 |
|
Cash flows from investing activities: |
|
|
|
Capital maintenance expenditures |
|
(52.4 |
) |
|
|
(37.1 |
) |
Capital project expenditures |
|
(445.7 |
) |
|
|
(226.6 |
) |
Acquisition of businesses, net of cash acquired |
|
(241.3 |
) |
|
|
(81.7 |
) |
Acquisition of gaming rights, net of cash acquired |
|
— |
|
|
|
(33.3 |
) |
Proceeds from sale of assets |
|
195.7 |
|
|
|
279.0 |
|
Other |
|
(5.8 |
) |
|
|
(7.3 |
) |
Net cash used in investing activities |
|
(549.5 |
) |
|
|
(107.0 |
) |
Cash flows from financing activities: |
|
|
|
Proceeds from borrowings under long-term debt obligations |
|
1,420.8 |
|
|
|
1,220.0 |
|
Repayments of borrowings under long-term debt obligations |
|
(1,297.1 |
) |
|
|
(5.3 |
) |
Payment of dividends |
|
(26.8 |
) |
|
|
(25.7 |
) |
Repurchase of common stock |
|
(35.8 |
) |
|
|
(143.5 |
) |
Taxes paid related to net share settlement of stock awards |
|
(13.2 |
) |
|
|
(13.2 |
) |
Debt issuance costs |
|
(12.3 |
) |
|
|
(12.8 |
) |
Change in bank overdraft |
|
1.4 |
|
|
|
(1.8 |
) |
Other |
|
1.7 |
|
|
|
2.4 |
|
Net cash provided by financing activities |
|
38.7 |
|
|
|
1,020.1 |
|
Cash flows from discontinued operations: |
|
|
|
Operating activities of discontinued operations |
|
0.5 |
|
|
|
— |
|
Net (decrease) increase in cash, cash equivalents and
restricted cash |
|
(11.5 |
) |
|
|
1,337.6 |
|
Cash,
cash equivalents and restricted cash, beginning of period |
|
204.7 |
|
|
|
355.6 |
|
Cash, cash equivalents and restricted cash, end of
period |
$ |
193.2 |
|
|
$ |
1,693.2 |
|
CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL
INFORMATION(Unaudited) |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
GAAP net income |
$ |
61.0 |
|
|
$ |
57.0 |
|
|
$ |
359.7 |
|
|
$ |
438.4 |
|
|
|
|
|
|
|
|
|
Adjustments, continuing
operations: |
|
|
|
|
|
|
|
Changes in fair value of interest rate swaps related to Rivers Des
Plaines |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(12.6 |
) |
Legal reserves and transaction costs related to Rivers Des
Plaines |
|
— |
|
|
|
0.1 |
|
|
|
— |
|
|
|
0.6 |
|
Other charges |
|
0.9 |
|
|
|
— |
|
|
|
— |
|
|
|
1.0 |
|
Transaction, pre-opening, and other expense |
|
7.3 |
|
|
|
6.8 |
|
|
|
30.2 |
|
|
|
22.0 |
|
Legal reserves |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3.2 |
|
Asset impairments |
|
— |
|
|
|
— |
|
|
|
24.5 |
|
|
|
4.9 |
|
Gain on Dispositions |
|
— |
|
|
|
— |
|
|
|
(114.0 |
) |
|
|
(274.6 |
) |
Income tax impact on net income adjustments (a) |
|
(2.2 |
) |
|
|
(1.8 |
) |
|
|
13.6 |
|
|
|
75.9 |
|
Total adjustments |
|
6.0 |
|
|
|
5.1 |
|
|
|
(45.7 |
) |
|
|
(179.6 |
) |
Adjusted net income
attributable to Churchill Downs Incorporated |
$ |
67.0 |
|
|
$ |
62.1 |
|
|
$ |
314.0 |
|
|
$ |
258.8 |
|
|
|
|
|
|
|
|
|
Adjusted diluted EPS (b) |
$ |
0.87 |
|
|
$ |
0.81 |
|
|
$ |
4.09 |
|
|
$ |
3.35 |
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding - Diluted (b) |
|
77.1 |
|
|
|
76.7 |
|
|
|
76.7 |
|
|
|
77.2 |
|
(a) The income tax impact for each
adjustment is derived by applying the effective tax rate, including
current and deferred income tax expense, based upon the
jurisdiction and the nature of the adjustment.(b) The number of
shares have been adjusted for the 2023 stock split.
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Total
Handle |
|
|
|
|
|
|
|
TwinSpires Horse Racing(a) |
$ |
507.2 |
|
|
$ |
522.1 |
|
|
$ |
1,554.1 |
|
|
$ |
1,527.6 |
|
(a) Total handle generated by
Velocity is not included in total handle from TwinSpires Horse
Racing.
CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL
INFORMATION (Unaudited) |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net revenue from
external customers: |
|
|
|
|
|
|
|
Live and Historical Racing: |
|
|
|
|
|
|
|
Churchill Downs Racetrack |
$ |
10.6 |
|
|
$ |
6.4 |
|
|
$ |
191.3 |
|
|
$ |
182.6 |
|
Louisville |
|
48.9 |
|
|
|
41.5 |
|
|
|
138.2 |
|
|
|
128.5 |
|
Northern Kentucky |
|
19.5 |
|
|
|
10.0 |
|
|
|
63.1 |
|
|
|
29.2 |
|
Southwestern Kentucky |
|
37.6 |
|
|
|
33.3 |
|
|
|
111.7 |
|
|
|
97.8 |
|
Western Kentucky |
|
11.6 |
|
|
|
0.2 |
|
|
|
25.8 |
|
|
|
0.2 |
|
Virginia |
|
88.1 |
|
|
|
— |
|
|
|
280.4 |
|
|
|
— |
|
New Hampshire |
|
3.2 |
|
|
|
0.9 |
|
|
|
8.4 |
|
|
|
0.9 |
|
Total Live and Historical Racing |
$ |
219.5 |
|
|
$ |
92.3 |
|
|
$ |
818.9 |
|
|
$ |
439.2 |
|
|
|
|
|
|
|
|
|
TwinSpires: |
$ |
108.5 |
|
|
$ |
106.2 |
|
|
$ |
340.7 |
|
|
$ |
343.3 |
|
|
|
|
|
|
|
|
|
Gaming: |
|
|
|
|
|
|
|
Florida |
$ |
24.4 |
|
|
$ |
26.3 |
|
|
$ |
76.5 |
|
|
$ |
81.2 |
|
Iowa |
|
24.0 |
|
|
|
— |
|
|
|
72.5 |
|
|
|
— |
|
Louisiana |
|
32.2 |
|
|
|
28.5 |
|
|
|
110.1 |
|
|
|
107.2 |
|
Maine |
|
30.9 |
|
|
|
31.6 |
|
|
|
88.1 |
|
|
|
87.8 |
|
Maryland |
|
32.0 |
|
|
|
33.3 |
|
|
|
82.9 |
|
|
|
82.0 |
|
Mississippi |
|
24.2 |
|
|
|
24.5 |
|
|
|
77.5 |
|
|
|
78.0 |
|
New York |
|
46.2 |
|
|
|
— |
|
|
|
135.3 |
|
|
|
— |
|
Pennsylvania |
|
30.4 |
|
|
|
39.2 |
|
|
|
97.3 |
|
|
|
108.8 |
|
Total Gaming |
$ |
244.3 |
|
|
$ |
183.4 |
|
|
$ |
740.2 |
|
|
$ |
545.0 |
|
All Other |
|
0.2 |
|
|
|
1.2 |
|
|
|
0.7 |
|
|
|
2.2 |
|
Net revenue from external customers |
$ |
572.5 |
|
|
$ |
383.1 |
|
|
$ |
1,900.5 |
|
|
$ |
1,329.7 |
|
|
|
|
|
|
|
|
|
Intercompany net
revenues: |
|
|
|
|
|
|
|
Live and Historical Racing |
$ |
6.0 |
|
|
$ |
10.1 |
|
|
$ |
30.4 |
|
|
$ |
26.3 |
|
TwinSpires |
|
3.9 |
|
|
|
1.2 |
|
|
|
7.1 |
|
|
|
4.0 |
|
Gaming |
|
0.6 |
|
|
|
2.5 |
|
|
|
4.2 |
|
|
|
4.6 |
|
All Other |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Eliminations |
|
(10.5 |
) |
|
|
(13.8 |
) |
|
|
(41.7 |
) |
|
|
(34.9 |
) |
Intercompany net revenue |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL
INFORMATION(Unaudited) |
|
Three Months Ended September 30, 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 |
$ |
16.0 |
|
|
$ |
86.3 |
|
|
$ |
5.1 |
|
|
$ |
107.4 |
|
|
$ |
— |
|
|
$ |
107.4 |
|
Historical racing(a) |
|
179.9 |
|
|
|
— |
|
|
|
7.5 |
|
|
|
187.4 |
|
|
|
— |
|
|
|
187.4 |
|
Racing event-related
services |
|
3.3 |
|
|
|
— |
|
|
|
1.4 |
|
|
|
4.7 |
|
|
|
— |
|
|
|
4.7 |
|
Gaming(a) |
|
3.1 |
|
|
|
5.3 |
|
|
|
203.0 |
|
|
|
211.4 |
|
|
|
— |
|
|
|
211.4 |
|
Other(a) |
|
17.2 |
|
|
|
16.9 |
|
|
|
27.3 |
|
|
|
61.4 |
|
|
|
0.2 |
|
|
|
61.6 |
|
Total |
$ |
219.5 |
|
|
$ |
108.5 |
|
|
$ |
244.3 |
|
|
$ |
572.3 |
|
|
$ |
0.2 |
|
|
$ |
572.5 |
|
|
Three Months Ended September 30, 2022 |
(in millions) |
Live and Historical Racing |
|
TwinSpires |
|
Gaming |
|
Total Segments |
|
All Other |
|
Total |
Net revenue from
external customers |
|
|
|
|
|
|
|
|
|
|
|
Pari-mutuel: |
|
|
|
|
|
|
|
|
|
|
|
Live and simulcast racing |
$ |
1.8 |
|
|
$ |
91.0 |
|
|
$ |
3.6 |
|
|
$ |
96.4 |
|
|
$ |
— |
|
|
$ |
96.4 |
|
Historical racing(a) |
|
78.7 |
|
|
|
— |
|
|
|
3.5 |
|
|
|
82.2 |
|
|
|
— |
|
|
|
82.2 |
|
Racing event-related
services |
|
3.0 |
|
|
|
— |
|
|
|
0.1 |
|
|
|
3.1 |
|
|
|
— |
|
|
|
3.1 |
|
Gaming(a) |
|
0.9 |
|
|
|
5.3 |
|
|
|
160.6 |
|
|
|
166.8 |
|
|
|
— |
|
|
|
166.8 |
|
Other(a) |
|
7.9 |
|
|
|
9.9 |
|
|
|
15.6 |
|
|
|
33.4 |
|
|
|
1.2 |
|
|
|
34.6 |
|
Total |
$ |
92.3 |
|
|
$ |
106.2 |
|
|
$ |
183.4 |
|
|
$ |
381.9 |
|
|
$ |
1.2 |
|
|
$ |
383.1 |
|
(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 $13.3 million for the three months ended
September 30, 2023 and $8.4 million for the three months
ended September 30, 2022.
CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL
INFORMATION(Unaudited) |
|
Nine Months Ended September 30, 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 |
$ |
67.2 |
|
|
$ |
283.2 |
|
|
$ |
19.9 |
|
|
$ |
370.3 |
|
|
$ |
— |
|
|
$ |
370.3 |
|
Historical racing(a) |
|
549.3 |
|
|
|
— |
|
|
|
20.5 |
|
|
|
569.8 |
|
|
|
— |
|
|
|
569.8 |
|
Racing event-related
services |
|
141.0 |
|
|
|
— |
|
|
|
4.8 |
|
|
|
145.8 |
|
|
|
— |
|
|
|
145.8 |
|
Gaming(a) |
|
8.2 |
|
|
|
10.9 |
|
|
|
615.4 |
|
|
|
634.5 |
|
|
|
— |
|
|
|
634.5 |
|
Other(a) |
|
53.2 |
|
|
|
46.6 |
|
|
|
79.6 |
|
|
|
179.4 |
|
|
|
0.7 |
|
|
|
180.1 |
|
Total |
$ |
818.9 |
|
|
$ |
340.7 |
|
|
$ |
740.2 |
|
|
$ |
1,899.8 |
|
|
$ |
0.7 |
|
|
$ |
1,900.5 |
|
|
Nine Months Ended September 30, 2022 |
(in millions) |
Live and Historical Racing |
|
TwinSpires |
|
Gaming |
|
Total Segments |
|
All Other |
|
Total |
Net revenue from
external customers |
|
|
|
|
|
|
|
|
|
|
|
Pari-mutuel: |
|
|
|
|
|
|
|
|
|
|
|
Live and simulcast racing |
$ |
53.9 |
|
|
$ |
290.9 |
|
|
$ |
22.0 |
|
|
$ |
366.8 |
|
|
$ |
— |
|
|
$ |
366.8 |
|
Historical racing(a) |
|
230.7 |
|
|
|
— |
|
|
|
4.8 |
|
|
|
235.5 |
|
|
|
— |
|
|
|
235.5 |
|
Racing event-related
services |
|
125.4 |
|
|
|
— |
|
|
|
0.7 |
|
|
|
126.1 |
|
|
|
— |
|
|
|
126.1 |
|
Gaming(a) |
|
0.9 |
|
|
|
21.8 |
|
|
|
469.6 |
|
|
|
492.3 |
|
|
|
— |
|
|
|
492.3 |
|
Other(a) |
|
28.3 |
|
|
|
30.6 |
|
|
|
47.9 |
|
|
|
106.8 |
|
|
|
2.2 |
|
|
|
109.0 |
|
Total |
$ |
439.2 |
|
|
$ |
343.3 |
|
|
$ |
545.0 |
|
|
$ |
1,327.5 |
|
|
$ |
2.2 |
|
|
$ |
1,329.7 |
|
(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 $37.8 million for the nine months ended
September 30, 2023 and $23.2 million for the nine months
ended September 30, 2022.
CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL
INFORMATION(Unaudited) |
Adjusted EBITDA by segment is comprised of the
following:
|
Three Months Ended September 30, 2023 |
(in millions) |
Live and Historical Racing |
|
TwinSpires |
|
Gaming |
|
Total Segments |
|
All Other |
|
Eliminations |
|
Total |
Revenue |
$ |
225.5 |
|
|
$ |
112.4 |
|
|
$ |
244.9 |
|
|
$ |
582.8 |
|
|
$ |
0.2 |
|
|
$ |
(10.5 |
) |
|
$ |
572.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes and purses |
|
(62.0 |
) |
|
|
(5.8 |
) |
|
|
(81.4 |
) |
|
|
(149.2 |
) |
|
|
— |
|
|
|
— |
|
|
|
(149.2 |
) |
Marketing and advertising |
|
(7.6 |
) |
|
|
(1.3 |
) |
|
|
(8.9 |
) |
|
|
(17.8 |
) |
|
|
(0.1 |
) |
|
|
— |
|
|
|
(17.9 |
) |
Salaries and benefits |
|
(27.9 |
) |
|
|
(7.0 |
) |
|
|
(35.2 |
) |
|
|
(70.1 |
) |
|
|
— |
|
|
|
— |
|
|
|
(70.1 |
) |
Content expense |
|
(1.6 |
) |
|
|
(49.4 |
) |
|
|
(2.4 |
) |
|
|
(53.4 |
) |
|
|
— |
|
|
|
7.3 |
|
|
|
(46.1 |
) |
Selling, general and
administrative expense |
|
(7.4 |
) |
|
|
(3.0 |
) |
|
|
(9.9 |
) |
|
|
(20.3 |
) |
|
|
(19.0 |
) |
|
|
0.4 |
|
|
|
(38.9 |
) |
Other operating expense |
|
(39.0 |
) |
|
|
(12.0 |
) |
|
|
(32.1 |
) |
|
|
(83.1 |
) |
|
|
— |
|
|
|
2.8 |
|
|
|
(80.3 |
) |
Other income |
|
0.9 |
|
|
|
— |
|
|
|
47.3 |
|
|
|
48.2 |
|
|
|
— |
|
|
|
— |
|
|
|
48.2 |
|
Adjusted EBITDA |
$ |
80.9 |
|
|
$ |
33.9 |
|
|
$ |
122.3 |
|
|
$ |
237.1 |
|
|
$ |
(18.9 |
) |
|
$ |
— |
|
|
$ |
218.2 |
|
|
Three Months Ended September 30, 2022 |
(in millions) |
Live and Historical Racing |
|
TwinSpires |
|
Gaming |
|
Total Segments |
|
All Other(a) |
|
Eliminations |
|
Total |
Revenue |
$ |
102.4 |
|
|
$ |
107.4 |
|
|
$ |
185.9 |
|
|
$ |
395.7 |
|
|
$ |
0.1 |
|
|
$ |
(13.8 |
) |
|
$ |
382.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes and purses |
|
(31.6 |
) |
|
|
(6.6 |
) |
|
|
(70.6 |
) |
|
|
(108.8 |
) |
|
|
— |
|
|
|
— |
|
|
|
(108.8 |
) |
Marketing and advertising |
|
(3.6 |
) |
|
|
(1.3 |
) |
|
|
(4.1 |
) |
|
|
(9.0 |
) |
|
|
(0.2 |
) |
|
|
— |
|
|
|
(9.2 |
) |
Salaries and benefits |
|
(13.3 |
) |
|
|
(6.3 |
) |
|
|
(24.6 |
) |
|
|
(44.2 |
) |
|
|
0.1 |
|
|
|
— |
|
|
|
(44.1 |
) |
Content expense |
|
(0.6 |
) |
|
|
(49.3 |
) |
|
|
(2.7 |
) |
|
|
(52.6 |
) |
|
|
— |
|
|
|
13.4 |
|
|
|
(39.2 |
) |
Selling, general and
administrative expense |
|
(3.4 |
) |
|
|
(2.7 |
) |
|
|
(7.1 |
) |
|
|
(13.2 |
) |
|
|
(13.9 |
) |
|
|
1.1 |
|
|
|
(26.0 |
) |
Other operating expense |
|
(15.6 |
) |
|
|
(10.1 |
) |
|
|
(21.7 |
) |
|
|
(47.4 |
) |
|
|
(0.2 |
) |
|
|
(0.7 |
) |
|
|
(48.3 |
) |
Other income |
|
0.2 |
|
|
|
— |
|
|
|
56.5 |
|
|
|
56.7 |
|
|
|
0.1 |
|
|
|
— |
|
|
|
56.8 |
|
Adjusted EBITDA |
$ |
34.5 |
|
|
$ |
31.1 |
|
|
$ |
111.6 |
|
|
$ |
177.2 |
|
|
$ |
(14.0 |
) |
|
$ |
— |
|
|
$ |
163.2 |
|
(a) The revenue and
expenses associated with the Adjusted EBITDA for All Other excludes
the results of Arlington.
Adjusted EBITDA by segment is comprised of the
following:
|
Nine Months Ended September 30, 2023 |
(in millions) |
Live and Historical Racing |
|
TwinSpires |
|
Gaming |
|
Total Segments |
|
All Other |
|
Eliminations |
|
Total |
Revenue |
$ |
849.3 |
|
|
$ |
347.8 |
|
|
$ |
744.4 |
|
|
$ |
1,941.5 |
|
|
$ |
0.7 |
|
|
$ |
(41.7 |
) |
|
$ |
1,900.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes and purses |
|
(203.9 |
) |
|
|
(17.8 |
) |
|
|
(246.7 |
) |
|
|
(468.4 |
) |
|
|
— |
|
|
|
— |
|
|
|
(468.4 |
) |
Marketing and advertising |
|
(27.9 |
) |
|
|
(8.0 |
) |
|
|
(26.5 |
) |
|
|
(62.4 |
) |
|
|
(0.2 |
) |
|
|
0.3 |
|
|
|
(62.3 |
) |
Salaries and benefits |
|
(80.0 |
) |
|
|
(20.7 |
) |
|
|
(109.2 |
) |
|
|
(209.9 |
) |
|
|
— |
|
|
|
— |
|
|
|
(209.9 |
) |
Content expense |
|
(5.1 |
) |
|
|
(161.1 |
) |
|
|
(6.9 |
) |
|
|
(173.1 |
) |
|
|
— |
|
|
|
37.7 |
|
|
|
(135.4 |
) |
Selling, general and
administrative expense |
|
(23.4 |
) |
|
|
(8.1 |
) |
|
|
(32.4 |
) |
|
|
(63.9 |
) |
|
|
(54.1 |
) |
|
|
0.9 |
|
|
|
(117.1 |
) |
Other operating expense |
|
(123.6 |
) |
|
|
(36.0 |
) |
|
|
(92.1 |
) |
|
|
(251.7 |
) |
|
|
(0.5 |
) |
|
|
2.8 |
|
|
|
(249.4 |
) |
Other income |
|
1.1 |
|
|
|
1.1 |
|
|
|
144.6 |
|
|
|
146.8 |
|
|
|
— |
|
|
|
— |
|
|
|
146.8 |
|
Adjusted EBITDA |
$ |
386.5 |
|
|
$ |
97.2 |
|
|
$ |
375.2 |
|
|
$ |
858.9 |
|
|
$ |
(54.1 |
) |
|
$ |
— |
|
|
$ |
804.8 |
|
|
Nine Months Ended September 30, 2022 |
(in millions) |
Live and Historical Racing |
|
TwinSpires |
|
Gaming |
|
Total Segments |
|
All Other(a) |
|
Eliminations |
|
Total |
Revenue |
$ |
465.5 |
|
|
$ |
347.3 |
|
|
$ |
549.6 |
|
|
$ |
1,362.4 |
|
|
$ |
0.4 |
|
|
$ |
(34.9 |
) |
|
$ |
1,327.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxes and purses |
|
(118.0 |
) |
|
|
(21.3 |
) |
|
|
(206.1 |
) |
|
|
(345.4 |
) |
|
|
— |
|
|
|
— |
|
|
|
(345.4 |
) |
Marketing and advertising |
|
(12.9 |
) |
|
|
(11.4 |
) |
|
|
(11.3 |
) |
|
|
(35.6 |
) |
|
|
(0.2 |
) |
|
|
— |
|
|
|
(35.8 |
) |
Salaries and benefits |
|
(43.1 |
) |
|
|
(19.9 |
) |
|
|
(72.0 |
) |
|
|
(135.0 |
) |
|
|
— |
|
|
|
— |
|
|
|
(135.0 |
) |
Content expense |
|
(2.2 |
) |
|
|
(160.5 |
) |
|
|
(6.4 |
) |
|
|
(169.1 |
) |
|
|
— |
|
|
|
33.7 |
|
|
|
(135.4 |
) |
Selling, general and
administrative expense |
|
(9.7 |
) |
|
|
(7.9 |
) |
|
|
(20.4 |
) |
|
|
(38.0 |
) |
|
|
(41.9 |
) |
|
|
1.1 |
|
|
|
(78.8 |
) |
Other operating expense |
|
(53.6 |
) |
|
|
(37.2 |
) |
|
|
(63.9 |
) |
|
|
(154.7 |
) |
|
|
(0.4 |
) |
|
|
0.1 |
|
|
|
(155.0 |
) |
Other income |
|
0.3 |
|
|
|
— |
|
|
|
140.0 |
|
|
|
140.3 |
|
|
|
0.1 |
|
|
|
— |
|
|
|
140.4 |
|
Adjusted EBITDA |
$ |
226.3 |
|
|
$ |
89.1 |
|
|
$ |
309.5 |
|
|
$ |
624.9 |
|
|
$ |
(42.0 |
) |
|
$ |
— |
|
|
$ |
582.9 |
|
(a) The revenue and
expenses associated with the Adjusted EBITDA for All Other excludes
the results of Arlington.
CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL
INFORMATION(Unaudited) |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Reconciliation of
Comprehensive Income to Adjusted EBITDA: |
|
|
|
|
|
|
|
Net income and
comprehensive income |
$ |
61.0 |
|
|
$ |
57.0 |
|
|
$ |
359.7 |
|
|
$ |
438.4 |
|
|
|
|
|
|
|
|
|
Additions: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
42.1 |
|
|
|
27.5 |
|
|
|
121.8 |
|
|
|
78.7 |
|
Interest expense, net |
|
67.9 |
|
|
|
36.2 |
|
|
|
197.8 |
|
|
|
92.6 |
|
Income tax provision |
|
20.8 |
|
|
|
16.4 |
|
|
|
130.2 |
|
|
|
173.5 |
|
EBITDA |
$ |
191.8 |
|
|
$ |
137.1 |
|
|
$ |
809.5 |
|
|
$ |
783.2 |
|
|
|
|
|
|
|
|
|
Adjustments to EBITDA: |
|
|
|
|
|
|
|
Stock-based compensation expense |
$ |
8.1 |
|
|
$ |
9.1 |
|
|
$ |
24.8 |
|
|
$ |
23.5 |
|
Legal reserves |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3.2 |
|
Pre-opening expense |
|
5.0 |
|
|
|
4.2 |
|
|
|
11.4 |
|
|
|
8.9 |
|
Arlington exit costs |
|
0.1 |
|
|
|
1.4 |
|
|
|
9.4 |
|
|
|
5.7 |
|
Other expenses, net |
|
0.7 |
|
|
|
— |
|
|
|
7.6 |
|
|
|
— |
|
Transaction expense, net |
|
1.5 |
|
|
|
1.2 |
|
|
|
1.8 |
|
|
|
7.4 |
|
Asset impairments |
|
— |
|
|
|
— |
|
|
|
24.5 |
|
|
|
4.9 |
|
Other income, expense: |
|
|
|
|
|
|
|
Interest, depreciation and amortization expense related to equity
investments |
|
10.1 |
|
|
|
10.1 |
|
|
|
29.8 |
|
|
|
31.7 |
|
Changes in fair value of Rivers Des Plaines' interest rate
swaps |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(12.6 |
) |
Rivers Des Plaines' legal reserves and transaction costs |
|
— |
|
|
|
0.1 |
|
|
|
— |
|
|
|
0.6 |
|
Other charges and recoveries, net |
|
0.9 |
|
|
|
— |
|
|
|
— |
|
|
|
1.0 |
|
Gain on sale of assets |
|
— |
|
|
|
— |
|
|
|
(114.0 |
) |
|
|
(274.6 |
) |
Total adjustments to EBITDA |
|
26.4 |
|
|
|
26.1 |
|
|
|
(4.7 |
) |
|
|
(200.3 |
) |
Adjusted
EBITDA |
$ |
218.2 |
|
|
$ |
163.2 |
|
|
$ |
804.8 |
|
|
$ |
582.9 |
|
Adjusted EBITDA by
segment: |
|
|
|
|
|
|
|
Live and Historical
Racing |
$ |
80.9 |
|
|
$ |
34.5 |
|
|
$ |
386.5 |
|
|
$ |
226.3 |
|
TwinSpires |
|
33.9 |
|
|
|
31.1 |
|
|
|
97.2 |
|
|
|
89.1 |
|
Gaming |
|
122.3 |
|
|
|
111.6 |
|
|
|
375.2 |
|
|
|
309.5 |
|
Total segment Adjusted EBITDA |
|
237.1 |
|
|
|
177.2 |
|
|
|
858.9 |
|
|
|
624.9 |
|
All Other |
|
(18.9 |
) |
|
|
(14.0 |
) |
|
|
(54.1 |
) |
|
|
(42.0 |
) |
Total Adjusted EBITDA |
$ |
218.2 |
|
|
$ |
163.2 |
|
|
$ |
804.8 |
|
|
$ |
582.9 |
|
CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL JOINT
VENTURE FINANCIAL
STATEMENTS(Unaudited) |
Summarized
financial information for our equity investments is comprised of
the following: |
|
Summarized Income Statement |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net revenue |
$ |
208.9 |
|
|
$ |
221.5 |
|
|
$ |
648.2 |
|
|
$ |
613.3 |
|
|
|
|
|
|
|
|
|
Operating and SG&A
expense |
|
135.1 |
|
|
|
131.5 |
|
|
|
407.3 |
|
|
|
380.4 |
|
Depreciation and
amortization |
|
5.9 |
|
|
|
5.9 |
|
|
|
17.5 |
|
|
|
17.5 |
|
Total operating expense |
|
141.0 |
|
|
|
137.4 |
|
|
|
424.8 |
|
|
|
397.9 |
|
Operating income |
|
67.9 |
|
|
|
84.1 |
|
|
|
223.4 |
|
|
|
215.4 |
|
Interest and other expense,
net |
|
(11.1 |
) |
|
|
(10.6 |
) |
|
|
(32.7 |
) |
|
|
(13.8 |
) |
Net income |
$ |
56.8 |
|
|
$ |
73.5 |
|
|
$ |
190.7 |
|
|
$ |
201.6 |
|
|
Summarized Balance Sheet |
(in millions) |
September 30, 2023 |
|
December 31, 2022 |
Assets |
|
|
|
Current assets |
$ |
127.7 |
|
|
$ |
91.0 |
|
Property and equipment,
net |
|
340.3 |
|
|
|
345.7 |
|
Other assets, net |
|
268.8 |
|
|
|
265.0 |
|
Total assets |
$ |
736.8 |
|
|
$ |
701.7 |
|
|
|
|
|
Liabilities and
Members' Deficit |
|
|
|
Current liabilities |
$ |
120.9 |
|
|
$ |
97.9 |
|
Long-term debt |
|
846.8 |
|
|
|
838.6 |
|
Other liabilities |
|
0.3 |
|
|
|
0.2 |
|
Members' deficit |
|
(231.2 |
) |
|
|
(235.0 |
) |
Total liabilities and members' deficit |
$ |
736.8 |
|
|
$ |
701.7 |
|
CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL
INFORMATION(Unaudited) |
Planned capital
projects for the Company are as follows: |
(in millions) |
Project |
Target Completion |
Planned Spend |
|
|
|
|
Live and Historical Racing Segment |
|
|
|
Churchill Downs Racetrack |
Paddock Project |
May 2024 |
$185 - $200 |
Jockey Club Suites |
May 2024 |
$14 |
Derby City Gaming Downtown |
Property Build Out |
December 2023 |
$90 |
Dumfries HRM Project (Northern Virginia) |
Property Build Out |
Late Second Quarter 2024 |
$400 |
Eastern Daviess County HRM Project (Owensboro, Kentucky) |
Property Build Out |
First Quarter 2025 |
$100-$110 |
New Hampshire HRM Facility |
Property Build Out |
TBD |
TBD |
|
|
|
|
Gaming Segment |
|
|
|
Terre Haute Casino Resort |
Property Build Out |
Second Quarter 2024 |
Up to $290 |
Churchill Downs (NASDAQ:CHDN)
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Churchill Downs (NASDAQ:CHDN)
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From May 2023 to May 2024