Churchill Downs Incorporated (Nasdaq: CHDN) (the “Company”, “CDI”)
today reported business results for the quarter and full year ended
December 31, 2023.
Company Highlights
- Record 2023 net
revenue of $2.5 billion, up 36% compared to $1.8 billion in the
prior year.
- 2023 net income
of $417 million, down 5% compared to $439 million in the prior
year.
- Record 2023
Adjusted EBITDA of $1.0 billion, up 34% compared to $0.8 billion in
the prior year.
- We successfully
ran the 149th Kentucky Derby on the first Saturday in May
generating record Derby Week all-sources handle and record Derby
Week contribution to Adjusted EBITDA.
- Derby City
Gaming expanded its gaming floor and amenities and opened a new
123-room hotel in June 2023.
- Rosie's Gaming
Emporium opened in Emporia, Virginia in September 2023 as our
seventh Rosie's HRM entertainment venue in Virginia.
- Derby City
Gaming Downtown opened in Louisville, Kentucky in December 2023.
This represents our sixth HRM entertainment venue in Kentucky.
- We completed the
acquisition of Exacta Systems, LLC ("Exacta") on August 22, 2023
(the "Exacta Transaction").
- We closed the
sale of our Arlington Heights, Illinois property to the Chicago
Bears for $197.2 million on February 15, 2023.
- We ended 2023
with net bank leverage of 4.0x and maintained our commitment to
returning capital to shareholders:
- We repurchased
$55.3 million of shares under our share repurchase program in
2023.
- On December 18,
2023, we entered into a privately negotiated agreement with an
affiliate of The Duchossois Group Inc. to repurchase 1,000,000
shares for $123.75 per share and closed the transaction on January
2, 2024.
- On January 5,
2024, we paid a $0.382 per share dividend to shareholders of record
which represents the thirteenth consecutive year of increased
dividend per share.
| |
Fourth Quarter |
|
Years Ended December 31, |
|
(in millions, except per share data) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| |
|
|
|
|
|
|
|
| Net
revenue |
$ |
561.2 |
|
|
$ |
480.1 |
|
|
$ |
2,461.7 |
|
|
$ |
1,809.8 |
|
|
Net income |
$ |
57.6 |
|
|
$ |
1.0 |
|
|
$ |
417.3 |
|
|
$ |
439.4 |
|
| Diluted
EPS |
$ |
0.76 |
|
|
$ |
0.01 |
|
|
$ |
5.49 |
|
|
$ |
5.71 |
|
|
Adjusted EBITDA(a) |
$ |
219.1 |
|
|
$ |
180.7 |
|
|
$ |
1,023.9 |
|
|
$ |
763.6 |
|
| |
|
|
|
|
|
|
|
| (a) 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.
Live and Historical Racing
| |
Fourth Quarter |
|
Years Ended December 31, |
|
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| |
|
|
|
|
|
|
|
| Revenue |
$ |
235.3 |
|
|
$ |
180.9 |
|
|
$ |
1,084.6 |
|
|
$ |
646.4 |
|
| Adjusted EBITDA |
|
88.9 |
|
|
|
61.2 |
|
|
|
475.4 |
|
|
|
287.5 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter 2023
- Revenue for the
fourth quarter of 2023 increased $54.4 million from the prior year
quarter primarily due to $32.8 million in revenue attributable to
the Virginia properties acquired in the P2E Transaction, a $9.5
million increase from Derby City Gaming and the opening of Derby
City Gaming Downtown in December 2023 in Louisville, Kentucky, a
$6.3 million increase driven by continued growth at Turfway and
Newport in Northern Kentucky, a $2.5 million increase driven by
continued growth from Oak Grove in Southwestern Kentucky, a $2.2
million increase attributable to the Ellis Park and Chasers
Transactions, and a $1.1 million increase at Churchill Downs
Racetrack.
- Adjusted EBITDA
for the fourth quarter of 2023 increased $27.7 million from the
prior year quarter primarily due to a $16.2 million increase
attributable to the Virginia properties acquired in the P2E
Transaction which includes $5.1 million of savings from the Exacta
Transaction, a $4.4 million increase from our Northern Kentucky
properties, a $3.2 million increase from our Louisville properties,
a $2.8 million increase driven by our Southwestern Kentucky
property, and a $1.1 million increase attributable to the Ellis
Park and Chasers Transactions.
Total Year 2023
- Revenue for 2023
increased $438.2 million driven by a $313.9 million increase
attributable to the Virginia properties acquired in the P2E
Transaction, a $41.2 million increase in Northern Kentucky
primarily due to the opening of Turfway Park in September 2022, a
$36.4 million increase attributable to properties acquired in the
Ellis Park and Chasers Transactions, a $20.7 million increase due
to a record-breaking Derby Week at Churchill Downs Racetrack, a
$19.2 million increase due to growth from our Derby City Gaming
property and the opening of Derby City Gaming Downtown in December
2023 in Louisville, Kentucky, and a $16.5 million increase from our
Oak Grove property in Southwestern Kentucky. These increases were
partially offset by a $9.7 million decrease for non-Derby Week
racing operations primarily due to the decision to move a portion
of the Churchill Downs Racetrack Spring Meet to Ellis Park.
- Adjusted EBITDA
for 2023 increased $187.9 million driven by a $145.0 million
increase attributable to the Virginia properties acquired in the
P2E Transaction and savings as a result of the Exacta Transaction,
a $15.7 million increase due to a record-breaking Derby Week at
Churchill Downs Racetrack, a $13.1 million increase from continued
growth at Oak Grove in Southwestern Kentucky, an $8.6 million
increase in Northern Kentucky primarily due to the opening of
Turfway Park in September 2022, a $7.2 million increase due to
growth from our Derby City Gaming property and the opening of Derby
City Gaming Downtown in December 2023 in Louisville, Kentucky, and
a $5.4 million increase attributable to our other Live and
Historical Racing properties. These increases were partially offset
by a $7.1 million decrease for non-Derby Week racing operations
primarily driven by the decision to move a portion of the Churchill
Downs Racetrack Spring Meet to Ellis Park in 2023.
TwinSpires
| |
Fourth Quarter |
|
Years Ended December 31, |
|
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| |
|
|
|
|
|
|
|
| Revenue |
$ |
110.6 |
|
|
$ |
94.3 |
|
|
$ |
458.4 |
|
|
$ |
441.6 |
|
| Adjusted EBITDA |
|
34.9 |
|
|
|
25.0 |
|
|
|
132.1 |
|
|
|
114.1 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter 2023
- Revenue for the
fourth quarter of 2023 increased $16.3 million from the prior year
quarter driven by a $13.6 million increase attributable to the
Exacta Transaction, a $2.1 million increase in all other Horse
Racing revenue primarily driven by increased handle from our
higher-wagering volume customer base, partially offset by lower
retail Horse Racing handle due to industry race day cancellations,
and a $0.6 million increase from our sports betting business.
- Adjusted EBITDA
for the fourth quarter of 2023 increased $9.9 million from the
prior year quarter driven by an $8.7 million increase attributable
to the Exacta Transaction and a $1.7 million increase primarily
from cost reductions associated with the exit of the direct online
Sports and Casino business, partially offset by a $0.5 million
decrease in all other Horse Racing driven by lower revenue.
Total Year 2023
- Revenue for 2023
increased $16.8 million driven by a $19.1 million increase
attributable to the Exacta Transaction, a $5.3 million increase
primarily from the B2B expansion strategy associated with United
Tote totalisator fees, a $1.9 million increase from our retail
sports betting business, and a $1.8 million increase in all other
Horse Racing revenue primarily driven by increased handle from our
higher-wagering volume customer base, partially offset by lower
retail Horse Racing handle due to industry race day cancellations
and the decision to move a portion of the Churchill Downs Racetrack
Spring Meet to Ellis Park in 2023 and an $11.3 million reduction
primarily due to the exit of the direct online Sports and Casino
business.
- Adjusted EBITDA
for 2023 increased $18.0 million driven by an $11.8 million
increase attributable to the Exacta Transaction, an $11.3 million
increase primarily from significant cost reductions associated with
the exit of the direct online Sports and Casino business, and a
$3.7 million increase primarily from the B2B expansion strategy
associated with United Tote totalisator fees. These increases were
partially offset by an $8.8 million decrease primarily as a result
of lower retail Horse Racing handle as well as higher
content-related expenses and higher advance deposit wagering taxes
in certain jurisdictions.
Gaming
| |
Fourth Quarter |
|
Years Ended December 31, |
|
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| |
|
|
|
|
|
|
|
| Revenue |
$ |
230.2 |
|
|
$ |
212.2 |
|
|
$ |
974.6 |
|
|
$ |
761.8 |
|
| Adjusted EBITDA |
|
113.4 |
|
|
|
112.4 |
|
|
|
488.6 |
|
|
|
421.9 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter 2023
- Revenue for the
fourth quarter of 2023 increased $18.0 million from the prior year
quarter primarily due to $22.3 million attributable to the New York
and Iowa properties and $3.0 million attributable to the Louisiana
and Maryland properties, partially offset by $5.0 million as a
result of our decision not to renew the management agreement at
Lady Luck and a $2.3 million decrease from our other wholly owned
properties in four states.
- Adjusted EBITDA
for the fourth quarter of 2023 increased $1.0 million from the
prior year quarter driven by a $6.0 million increase attributable
to our New York and Iowa properties, a $1.3 million increase
attributable to our Louisiana and Maryland properties, and a $0.2
million increase from our equity investments, partially offset by a
$4.2 million decrease at our other wholly owned properties and a
$2.3 million decrease attributable to proceeds for business
interruption insurance claims related to Hurricane Ida received in
the fourth quarter of 2022.
Total Year 2023
- Revenue for 2023
increased $212.8 million driven by a $230.0 million increase
attributable to the New York and Iowa properties acquired in the
P2E Transaction, partially offset by a $16.9 million decrease in
Pennsylvania primarily due to our decision not to renew the
management agreement at Lady Luck and a $0.3 million net decrease
from our other gaming properties.
- Adjusted EBITDA
for 2023 increased $66.7 million driven by a $78.9 million increase
attributable to the New York and Iowa properties acquired in the
P2E Transaction and a $7.1 million increase from our equity
investments. These increases were partially offset by a $14.6
million decrease from our other wholly owned Gaming properties
primarily driven by Florida, Mississippi, and Pennsylvania and a
$4.7 million decrease attributable to proceeds for business
interruption insurance claims related to Hurricane Ida. We received
$6.3 million of insurance proceeds in 2022 compared to $1.6 million
in 2023.
All Other
| |
Fourth Quarter |
|
Years Ended December 31, |
|
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| |
|
|
|
|
|
|
|
| Revenue |
$ |
0.2 |
|
|
$ |
1.1 |
|
|
$ |
0.9 |
|
|
$ |
3.3 |
|
| Adjusted EBITDA |
|
(18.1 |
) |
|
|
(17.9 |
) |
|
|
(72.2 |
) |
|
|
(59.9 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter 2023
- Net revenue for
the fourth quarter of 2023 decreased $0.9 million from the prior
year quarter primarily as a result of decreased revenue from
Arlington International Racecourse (“Arlington”) which ceased
racing and simulcast operations at the end of 2021.
- Adjusted EBITDA
for the fourth quarter of 2023 decreased $0.2 million from the
prior year quarter due to an increase in corporate compensation
expenses driven by enterprise growth.
Total Year 2023
- Net revenue for
2023 decreased $2.4 million primarily as a result of Arlington
ceasing racing and simulcast operations at the end of 2021.
- Adjusted EBITDA
for 2023 decreased $12.3 million primarily driven by increased
corporate compensation and benefits related expenses.
Share Repurchase Program
The Company repurchased 151,394 shares of its
common stock at an average share price of approximately $118.97
based on trade date under its share repurchase program in the
fourth quarter of 2023. The Company repurchased 461,761 shares of
its common stock at an average share price of approximately $119.81
based on trade date under its share repurchase program in 2023, at
a total cost of $55.3 million. We had $214.9 million of
repurchase authority remaining under this program on December 31,
2023.
The Duchossois Group Share
Repurchase
On December 18, 2023, the Company entered into
an agreement with an affiliate of The Duchossois Group 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 $123.75 million. The repurchase of the
shares closed on January 2, 2024 and was funded using available
cash and borrowings under the senior secured credit facility.
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 (7%)
increase over the prior year on a split adjusted basis. The
dividend was 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. The increase marks the thirteenth consecutive year that the
Company has increased the dividend per share.
Capital Investments
We currently expect our project capital to be
approximately $450 to $550 million in 2024, although this amount
may vary significantly based on the timing of work completed,
unanticipated delays, and timing of payments to third parties. We
plan to use our operating cash flows and existing revolving credit
facility to fund our capital project expenditures.
Fourth Quarter
2023 Results
The Company's fourth quarter 2023 net income was
$57.6 million compared to $1.0 million in the prior year
quarter.
The following items impacted the comparability
of the Company's fourth quarter net income:
- $25.2 million
after-tax decrease in asset impairments primarily associated with
the Presque Isle asset impairment not recurring in the current year
quarter;
- $22.2 million
after-tax decrease in expenses related to transaction, pre-opening
and other expenses, net; and
- $1.3 million
after-tax decrease in legal reserves.
Partially offset by:
- $1.7 million
after-tax increase in other charges.
Excluding the items above, fourth quarter 2023
adjusted net income increased $9.6 million primarily due to the
following:
- $20.7 million
after-tax increase from the prior year quarter driven by the
results of our operations; and
- Partially offset
by $11.1 million after-tax increase from the prior year quarter in
interest expense associated with higher outstanding debt
balances.
Full Year 2023
Results
The Company's 2023 net income was
$417.3 million compared to $439.4 million in the prior
year.
The following items impacted the comparability
of the Company's full year net income from continuing
operations:
- $112.4 million
decrease in after-tax gains on property sales; and
- $9.2 million
after-tax benefit related to our equity portion of the non-cash
change in fair value of Rivers Des Plaines' interest rate swap that
did not recur in 2023.
Partially offset by:
-
$16.6 million after-tax decrease in transaction, pre-opening,
and other expenses;
-
$10.1 million after-tax decrease in non-cash asset
impairments; and
- $3.1 million
decrease of other charges.
Excluding these items, 2023 adjusted net income
increased $69.7 million compared to the prior year primarily
due to the following:
-
$197.1 million after-tax increase primarily driven by the
results of our operations;
- Partially offset
by a $127.4 million after-tax increase in interest expense
associated with higher outstanding debt balances.
Conference Call
A conference call regarding this news release is
scheduled for Thursday, February 22, 2024 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, February 22, 2024. A copy of the Company’s news release
announcing quarterly results and relevant financial and statistical
information about the period will be accessible at
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.
This news release contains various
“forward-looking statements” within the meaning of the “safe
harbor” provisions of the Private Securities Litigation Reform Act
of 1995. 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,” “scheduled,” and similar words or similar
expressions (or negative versions of such words or
expressions).
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 any pandemics, epidemics, or
outbreaks of infectious diseases, including possible new variants
of COVID-19, 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; 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 betting
business and effectively compete; online security risk, including
cyber-security 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; 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 other similar laws and regulations, or applicable
anti-money laundering regulations; payment-related risks, such as
risk associated with fraudulent credit card or debit card use; work
stoppages and labor problems; 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; increases to interest rates (due to inflation
or otherwise), disruption 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 any 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
under the heading “Risk Factors” 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
except year ended 2023 and 2022 amounts) |
| |
| |
Three Months EndedDecember
31, |
|
Years EndedDecember 31, |
|
(in millions, except per common share data) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Net
revenue: |
|
|
|
|
|
|
|
|
Live and Historical Racing |
$ |
228.4 |
|
|
$ |
175.4 |
|
|
$ |
1,047.3 |
|
|
$ |
614.6 |
|
|
TwinSpires |
|
104.2 |
|
|
|
93.1 |
|
|
|
444.9 |
|
|
|
436.4 |
|
|
Gaming |
|
228.4 |
|
|
|
210.9 |
|
|
|
968.6 |
|
|
|
755.9 |
|
|
All Other |
|
0.2 |
|
|
|
0.7 |
|
|
|
0.9 |
|
|
|
2.9 |
|
|
Total net revenue |
|
561.2 |
|
|
|
480.1 |
|
|
|
2,461.7 |
|
|
|
1,809.8 |
|
| Operating
expense: |
|
|
|
|
|
|
|
|
Live and Historical Racing |
|
156.5 |
|
|
|
131.7 |
|
|
|
662.2 |
|
|
|
400.9 |
|
|
TwinSpires |
|
68.4 |
|
|
|
64.0 |
|
|
|
288.2 |
|
|
|
293.6 |
|
|
Gaming |
|
171.7 |
|
|
|
150.9 |
|
|
|
700.0 |
|
|
|
537.9 |
|
|
All Other |
|
3.6 |
|
|
|
2.2 |
|
|
|
15.6 |
|
|
|
11.0 |
|
|
Selling, general and administrative expense |
|
51.7 |
|
|
|
51.5 |
|
|
|
202.3 |
|
|
|
164.2 |
|
|
Asset impairments |
|
0.1 |
|
|
|
33.4 |
|
|
|
24.6 |
|
|
|
38.3 |
|
|
Transaction expense, net |
|
3.0 |
|
|
|
34.7 |
|
|
|
4.8 |
|
|
|
42.1 |
|
|
Total operating expense |
|
455.0 |
|
|
|
468.4 |
|
|
|
1,897.7 |
|
|
|
1,488.0 |
|
| Operating
income |
|
106.2 |
|
|
|
11.7 |
|
|
|
564.0 |
|
|
|
321.8 |
|
| Other (expense)
income: |
|
|
|
|
|
|
|
|
Interest expense, net |
|
(70.6 |
) |
|
|
(54.7 |
) |
|
|
(268.4 |
) |
|
|
(147.3 |
) |
|
Equity in income of unconsolidated affiliates |
|
35.9 |
|
|
|
37.3 |
|
|
|
146.3 |
|
|
|
152.7 |
|
|
Gain on the sale of assets |
|
— |
|
|
|
— |
|
|
|
114.0 |
|
|
|
274.6 |
|
|
Miscellaneous, net |
|
0.4 |
|
|
|
2.6 |
|
|
|
5.9 |
|
|
|
7.0 |
|
|
Total other (expense) income |
|
(34.3 |
) |
|
|
(14.8 |
) |
|
|
(2.2 |
) |
|
|
287.0 |
|
| Income before provision for
income taxes |
|
71.9 |
|
|
|
(3.1 |
) |
|
|
561.8 |
|
|
|
608.8 |
|
| Income tax (provision)
benefit |
|
(14.3 |
) |
|
|
4.1 |
|
|
|
(144.5 |
) |
|
|
(169.4 |
) |
|
Net income |
$ |
57.6 |
|
|
$ |
1.0 |
|
|
$ |
417.3 |
|
|
$ |
439.4 |
|
| |
|
|
|
|
|
|
|
|
Net income per common share - basic |
$ |
0.77 |
|
|
$ |
0.01 |
|
|
$ |
5.55 |
|
|
$ |
5.79 |
|
| |
|
|
|
|
|
|
|
|
Net income per common share - diluted |
$ |
0.76 |
|
|
$ |
0.01 |
|
|
$ |
5.49 |
|
|
$ |
5.71 |
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
75.1 |
|
|
|
75.2 |
|
|
|
75.2 |
|
|
|
75.9 |
|
|
Diluted |
|
75.8 |
|
|
|
76.3 |
|
|
|
76.1 |
|
|
|
77.0 |
|
| |
|
|
|
|
|
|
|
|
CHURCHILL DOWNS INCORPORATEDCONSOLIDATED
BALANCE SHEETSDecember 31, |
| |
|
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
ASSETS |
|
|
|
| Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
144.5 |
|
|
$ |
129.8 |
|
|
Restricted cash |
|
77.3 |
|
|
|
74.9 |
|
|
Accounts receivable, net |
|
106.9 |
|
|
|
81.5 |
|
|
Income taxes receivable |
|
12.6 |
|
|
|
14.0 |
|
|
Other current assets |
|
59.5 |
|
|
|
44.3 |
|
|
Total current assets |
|
400.8 |
|
|
|
344.5 |
|
|
Property and equipment, net |
|
2,561.2 |
|
|
|
1,978.3 |
|
|
Investment in and advances to unconsolidated affiliates |
|
655.9 |
|
|
|
659.4 |
|
|
Goodwill |
|
899.9 |
|
|
|
723.8 |
|
| Other
intangible assets, net |
|
2,418.4 |
|
|
|
2,391.8 |
|
| Other
assets |
|
19.3 |
|
|
|
27.0 |
|
|
Long-term assets held for sale |
|
— |
|
|
|
82.0 |
|
|
Total assets |
$ |
6,955.5 |
|
|
$ |
6,206.8 |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
$ |
158.5 |
|
|
$ |
145.5 |
|
|
Accrued expenses and other current liabilities |
|
426.8 |
|
|
|
363.1 |
|
|
Current deferred revenue |
|
73.2 |
|
|
|
39.0 |
|
|
Current maturities of long-term debt |
|
68.0 |
|
|
|
47.0 |
|
|
Dividends payable |
|
29.3 |
|
|
|
27.0 |
|
|
Total current liabilities |
|
755.8 |
|
|
|
621.6 |
|
|
Long-term debt (net of current maturities and loan origination fees
of $8.9 in 2023 and $10.2 in 2022) |
|
1,697.1 |
|
|
|
2,081.6 |
|
| Notes
payable (net of debt issuance costs of $28.8 in 2023 and $22.9 in
2022) |
|
3,071.2 |
|
|
|
2,477.1 |
|
|
Non-current deferred revenue |
|
11.8 |
|
|
|
11.8 |
|
|
Deferred income taxes |
|
388.2 |
|
|
|
340.8 |
|
| Other
liabilities |
|
137.8 |
|
|
|
122.4 |
|
|
Total liabilities |
|
6,061.9 |
|
|
|
5,655.3 |
|
|
Commitments and contingencies |
|
|
|
|
Shareholders' equity: |
|
|
|
|
Preferred stock, no par value; 0.3 shares authorized; no shares
issued or outstanding |
|
— |
|
|
|
— |
|
|
Common stock, no par value; 300.0 shares authorized; 74.5 shares
issued and outstanding December 31, 2023 and 74.8 shares at
December 31, 2022 |
|
— |
|
|
|
— |
|
|
Retained earnings |
|
894.5 |
|
|
|
552.4 |
|
|
Accumulated other comprehensive loss |
|
(0.9 |
) |
|
|
(0.9 |
) |
|
Total shareholders' equity |
|
893.6 |
|
|
|
551.5 |
|
|
Total liabilities and shareholders' equity |
$ |
6,955.5 |
|
|
$ |
6,206.8 |
|
|
CHURCHILL DOWNS INCORPORATEDCONSOLIDATED
STATEMENTS OF CASH FLOWSfor the years ended
December 31, |
| |
|
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
Cash flows from operating activities: |
|
|
|
|
Net income |
$ |
417.3 |
|
|
$ |
439.4 |
|
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
169.0 |
|
|
|
113.7 |
|
|
Equity in income of unconsolidated affiliates |
|
(146.3 |
) |
|
|
(152.7 |
) |
|
Distributions from unconsolidated affiliates |
|
155.1 |
|
|
|
156.9 |
|
|
Stock-based compensation |
|
32.9 |
|
|
|
31.8 |
|
|
Deferred income taxes |
|
47.4 |
|
|
|
108.7 |
|
|
Asset impairments |
|
24.6 |
|
|
|
38.3 |
|
|
Amortization of operating lease assets |
|
6.2 |
|
|
|
5.3 |
|
|
Gain on sale of assets |
|
(114.0 |
) |
|
|
(274.6 |
) |
|
Other |
|
5.4 |
|
|
|
7.4 |
|
|
Changes in operating assets and liabilities, net of businesses
acquired and dispositions: |
|
|
|
|
Income taxes |
|
(1.1 |
) |
|
|
28.2 |
|
|
Deferred revenue |
|
34.2 |
|
|
|
(12.7 |
) |
|
Other assets and liabilities |
|
(25.4 |
) |
|
|
21.1 |
|
|
Net cash provided by operating activities |
|
605.3 |
|
|
|
510.8 |
|
|
Cash flows from investing activities: |
|
|
|
|
Capital maintenance expenditures |
|
(77.7 |
) |
|
|
(50.2 |
) |
|
Capital project expenditures |
|
(598.8 |
) |
|
|
(373.3 |
) |
|
Acquisition of businesses, net of cash acquired |
|
(241.3 |
) |
|
|
(2,918.5 |
) |
|
Acquisition of gaming rights, net of cash acquired |
|
— |
|
|
|
(33.3 |
) |
|
Proceeds from sale of assets |
|
195.7 |
|
|
|
279.0 |
|
|
Other |
|
4.1 |
|
|
|
(7.4 |
) |
|
Net cash used in investing activities |
|
(718.0 |
) |
|
|
(3,103.7 |
) |
|
Cash flows from financing activities: |
|
|
|
|
Proceeds from borrowings under long-term debt obligations |
|
1,771.1 |
|
|
|
2,862.4 |
|
|
Repayments of borrowings under long-term debt obligations |
|
(1,536.0 |
) |
|
|
(205.4 |
) |
|
Payment of dividends |
|
(27.1 |
) |
|
|
(26.0 |
) |
|
Repurchase of common stock |
|
(55.9 |
) |
|
|
(174.9 |
) |
|
Taxes paid related to net share settlement of stock awards |
|
(25.5 |
) |
|
|
(28.4 |
) |
|
Proceeds from pending equity transaction |
|
14.4 |
|
|
|
— |
|
|
Debt issuance costs |
|
(13.0 |
) |
|
|
(27.3 |
) |
|
Change in bank overdraft |
|
2.0 |
|
|
|
13.3 |
|
|
Other |
|
(0.7 |
) |
|
|
2.3 |
|
|
Net cash provided by financing activities |
|
129.3 |
|
|
|
2,416.0 |
|
|
Cash flows from discontinued operations: |
|
|
|
|
Operating cash flows of discontinued operations |
|
0.5 |
|
|
|
26.0 |
|
|
Net increase (decrease) in cash, cash equivalents and
restricted cash |
|
17.1 |
|
|
|
(150.9 |
) |
| Cash,
cash equivalents and restricted cash, beginning of year |
|
204.7 |
|
|
|
355.6 |
|
| Cash,
cash equivalents and restricted cash, end of year |
$ |
221.8 |
|
|
$ |
204.7 |
|
|
CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL
INFORMATION(unaudited) |
| |
| |
Three Months Ended December 31, |
|
Years Ended December 31, |
|
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| GAAP net income |
$ |
57.6 |
|
|
$ |
1.0 |
|
|
$ |
417.3 |
|
|
$ |
439.4 |
|
| |
|
|
|
|
|
|
|
| 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 |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.6 |
|
|
Other charges |
|
2.4 |
|
|
|
— |
|
|
|
2.4 |
|
|
|
1.0 |
|
|
Transaction, pre-opening and other expense |
|
9.6 |
|
|
|
40.7 |
|
|
|
39.8 |
|
|
|
62.7 |
|
|
Legal reserves |
|
(1.2 |
) |
|
|
0.6 |
|
|
|
(1.2 |
) |
|
|
3.8 |
|
|
Asset impairments |
|
0.1 |
|
|
|
33.4 |
|
|
|
24.6 |
|
|
|
38.3 |
|
|
Gain on sale of assets |
|
— |
|
|
|
— |
|
|
|
(114.0 |
) |
|
|
(274.6 |
) |
|
Income tax impact on net income adjustments(a) |
|
(3.1 |
) |
|
|
(19.9 |
) |
|
|
10.6 |
|
|
|
51.2 |
|
| Total adjustments |
|
7.8 |
|
|
|
54.8 |
|
|
|
(37.8 |
) |
|
|
(129.6 |
) |
| Adjusted net income |
$ |
65.4 |
|
|
$ |
55.8 |
|
|
$ |
379.5 |
|
|
$ |
309.8 |
|
| |
|
|
|
|
|
|
|
| Adjusted diluted EPS |
$ |
0.86 |
|
|
$ |
0.73 |
|
|
$ |
4.99 |
|
|
$ |
4.02 |
|
| |
|
|
|
|
|
|
|
| Weighted average shares
outstanding - Diluted |
|
75.8 |
|
|
|
76.3 |
|
|
|
76.1 |
|
|
|
77.0 |
|
| (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. |
| |
Three Months Ended December 31, |
|
Years Ended December 31, |
|
(in millions) |
2023 |
|
2022 |
|
2023 |
|
2022 |
| Total
Handle |
|
|
|
|
|
|
|
|
TwinSpires Horse Racing |
439.1 |
|
431.0 |
|
1,991.9 |
|
1,958.6 |
|
CHURCHILL DOWNS INCORPORATEDSUPPLEMENTAL
INFORMATION(unaudited except year ended 2023 and
2022 amounts) |
| |
|
|
|
| |
Three Months Ended December 31, |
|
Years Ended December 31, |
|
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net revenue from external customers: |
|
|
|
|
|
|
|
|
Live and Historical Racing: |
|
|
|
|
|
|
|
|
Churchill Downs Racetrack |
$ |
14.5 |
|
|
$ |
14.2 |
|
|
$ |
205.8 |
|
|
$ |
196.8 |
|
|
Louisville |
|
50.8 |
|
|
|
41.4 |
|
|
|
189.0 |
|
|
|
169.9 |
|
|
Northern Kentucky |
|
22.7 |
|
|
|
16.9 |
|
|
|
85.8 |
|
|
|
46.1 |
|
|
Southwestern Kentucky |
|
36.1 |
|
|
|
33.6 |
|
|
|
147.8 |
|
|
|
131.4 |
|
|
Western Kentucky |
|
6.0 |
|
|
|
4.3 |
|
|
|
31.8 |
|
|
|
4.5 |
|
|
Virginia |
|
95.0 |
|
|
|
62.4 |
|
|
|
375.4 |
|
|
|
62.4 |
|
|
New Hampshire |
|
3.3 |
|
|
|
2.6 |
|
|
|
11.7 |
|
|
|
3.5 |
|
|
Total Live and Historical Racing |
|
228.4 |
|
|
|
175.4 |
|
|
|
1,047.3 |
|
|
|
614.6 |
|
| |
|
|
|
|
|
|
|
|
TwinSpires: |
|
104.2 |
|
|
|
93.1 |
|
|
|
444.9 |
|
|
|
436.4 |
|
|
|
|
|
|
|
|
|
|
|
Gaming: |
|
|
|
|
|
|
|
|
Florida |
|
24.2 |
|
|
|
25.0 |
|
|
|
100.7 |
|
|
|
106.2 |
|
|
Iowa |
|
23.5 |
|
|
|
15.6 |
|
|
|
96.0 |
|
|
|
15.6 |
|
|
Louisiana |
|
35.5 |
|
|
|
33.6 |
|
|
|
145.6 |
|
|
|
140.8 |
|
|
Maine |
|
26.0 |
|
|
|
26.6 |
|
|
|
114.1 |
|
|
|
114.4 |
|
|
Maryland |
|
24.0 |
|
|
|
23.3 |
|
|
|
106.9 |
|
|
|
105.3 |
|
|
Mississippi |
|
23.4 |
|
|
|
23.8 |
|
|
|
100.9 |
|
|
|
101.8 |
|
|
New York |
|
45.2 |
|
|
|
30.9 |
|
|
|
180.5 |
|
|
|
30.9 |
|
|
Pennsylvania |
|
26.6 |
|
|
|
32.1 |
|
|
|
123.9 |
|
|
|
140.9 |
|
|
Total Gaming |
|
228.4 |
|
|
|
210.9 |
|
|
|
968.6 |
|
|
|
755.9 |
|
|
All Other |
|
0.2 |
|
|
|
0.7 |
|
|
|
0.9 |
|
|
|
2.9 |
|
|
Net revenue from external customers |
$ |
561.2 |
|
|
$ |
480.1 |
|
|
$ |
2,461.7 |
|
|
$ |
1,809.8 |
|
| |
|
|
|
|
|
|
|
| Intercompany net
revenues: |
|
|
|
|
|
|
|
|
Live and Historical Racing |
$ |
6.9 |
|
|
$ |
5.5 |
|
|
$ |
37.3 |
|
|
$ |
31.8 |
|
|
TwinSpires |
|
6.5 |
|
|
|
1.2 |
|
|
|
13.5 |
|
|
|
5.2 |
|
|
Gaming |
|
1.8 |
|
|
|
1.3 |
|
|
|
6.0 |
|
|
|
5.9 |
|
|
All Other |
|
— |
|
|
|
0.4 |
|
|
|
— |
|
|
|
0.4 |
|
|
Eliminations |
|
(15.2 |
) |
|
|
(8.4 |
) |
|
|
(56.8 |
) |
|
|
(43.3 |
) |
|
Intercompany net revenue |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL
INFORMATION(unaudited except year ended 2023 and
2022 amounts) |
| |
| |
Three Months Ended December 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 |
$ |
14.7 |
|
|
$ |
76.5 |
|
|
$ |
6.7 |
|
|
$ |
97.9 |
|
|
$ |
— |
|
|
$ |
97.9 |
|
|
Historical racing(a) |
|
189.8 |
|
|
|
— |
|
|
|
8.1 |
|
|
|
197.9 |
|
|
|
— |
|
|
|
197.9 |
|
| Racing event-related
services |
|
4.9 |
|
|
|
— |
|
|
|
1.6 |
|
|
|
6.5 |
|
|
|
— |
|
|
|
6.5 |
|
| Gaming(a) |
|
3.2 |
|
|
|
6.4 |
|
|
|
188.1 |
|
|
|
197.7 |
|
|
|
— |
|
|
|
197.7 |
|
| Other(a) |
|
15.8 |
|
|
|
21.3 |
|
|
|
23.9 |
|
|
|
61.0 |
|
|
|
0.2 |
|
|
|
61.2 |
|
|
Total |
$ |
228.4 |
|
|
$ |
104.2 |
|
|
$ |
228.4 |
|
|
$ |
561.0 |
|
|
$ |
0.2 |
|
|
$ |
561.2 |
|
| |
Three Months Ended December 31, 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 |
$ |
12.9 |
|
|
$ |
76.5 |
|
|
$ |
6.1 |
|
|
$ |
95.5 |
|
|
$ |
— |
|
|
$ |
95.5 |
|
|
Historical racing(a) |
|
143.4 |
|
|
|
— |
|
|
|
5.0 |
|
|
|
148.4 |
|
|
|
— |
|
|
|
148.4 |
|
| Racing event-related
services |
|
4.4 |
|
|
|
— |
|
|
|
1.1 |
|
|
|
5.5 |
|
|
|
— |
|
|
|
5.5 |
|
| Gaming(a) |
|
2.6 |
|
|
|
6.4 |
|
|
|
177.8 |
|
|
|
186.8 |
|
|
|
— |
|
|
|
186.8 |
|
| Other(a) |
|
12.1 |
|
|
|
10.2 |
|
|
|
20.9 |
|
|
|
43.2 |
|
|
|
0.7 |
|
|
|
43.9 |
|
|
Total |
$ |
175.4 |
|
|
$ |
93.1 |
|
|
$ |
210.9 |
|
|
$ |
479.4 |
|
|
$ |
0.7 |
|
|
$ |
480.1 |
|
| (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 $13.1 million for the three months ended December 31, 2023 and
$10.7 million for the three months ended December 31, 2022. |
|
CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL
INFORMATION(unaudited except year ended 2023 and
2022 amounts) |
| |
|
| |
Year Ended December 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 |
$ |
81.9 |
|
|
$ |
359.7 |
|
|
$ |
26.6 |
|
|
$ |
468.2 |
|
|
$ |
— |
|
|
$ |
468.2 |
|
|
Historical racing(a) |
|
739.1 |
|
|
|
— |
|
|
|
28.6 |
|
|
|
767.7 |
|
|
|
— |
|
|
|
767.7 |
|
| Racing event-related
services |
|
145.9 |
|
|
|
— |
|
|
|
6.4 |
|
|
|
152.3 |
|
|
|
— |
|
|
|
152.3 |
|
| Gaming(a) |
|
11.4 |
|
|
|
17.3 |
|
|
|
803.5 |
|
|
|
832.2 |
|
|
|
— |
|
|
|
832.2 |
|
| Other(a) |
|
69.0 |
|
|
|
67.9 |
|
|
|
103.5 |
|
|
|
240.4 |
|
|
|
0.9 |
|
|
|
241.3 |
|
|
Total |
$ |
1,047.3 |
|
|
$ |
444.9 |
|
|
$ |
968.6 |
|
|
$ |
2,460.8 |
|
|
$ |
0.9 |
|
|
$ |
2,461.7 |
|
| |
Year Ended December 31, 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 |
$ |
66.8 |
|
|
$ |
367.4 |
|
|
$ |
28.1 |
|
|
$ |
462.3 |
|
|
$ |
— |
|
|
$ |
462.3 |
|
|
Historical racing(a) |
|
374.1 |
|
|
|
— |
|
|
|
9.8 |
|
|
|
383.9 |
|
|
|
— |
|
|
|
383.9 |
|
| Racing event-related
services |
|
129.8 |
|
|
|
— |
|
|
|
1.8 |
|
|
|
131.6 |
|
|
|
— |
|
|
|
131.6 |
|
| Gaming(a) |
|
3.5 |
|
|
|
28.2 |
|
|
|
647.4 |
|
|
|
679.1 |
|
|
|
— |
|
|
|
679.1 |
|
| Other(a) |
|
40.4 |
|
|
|
40.8 |
|
|
|
68.8 |
|
|
|
150.0 |
|
|
|
2.9 |
|
|
|
152.9 |
|
|
Total |
$ |
614.6 |
|
|
$ |
436.4 |
|
|
$ |
755.9 |
|
|
$ |
1,806.9 |
|
|
$ |
2.9 |
|
|
$ |
1,809.8 |
|
| (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 $50.9 million in 2023 and $33.9 million in
2022. |
|
CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL
INFORMATION(unaudited except year ended 2023 and
2022 amounts) |
| |
| Adjusted EBITDA
by segment is comprised of the following: |
| |
Three Months Ended December 31, 2023 |
| (in millions) |
Live and Historical Racing |
|
TwinSpires |
|
Gaming |
|
Total Segments |
|
All
Other(a) |
|
Eliminations |
|
Total |
|
Revenue |
$ |
235.3 |
|
|
$ |
110.6 |
|
|
$ |
230.2 |
|
|
$ |
576.1 |
|
|
$ |
0.2 |
|
|
$ |
(15.1 |
) |
|
$ |
561.2 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gaming taxes and purses |
|
(63.8 |
) |
|
|
(4.8 |
) |
|
|
(76.1 |
) |
|
|
(144.7 |
) |
|
|
— |
|
|
|
— |
|
|
|
(144.7 |
) |
| Marketing and advertising |
|
(9.7 |
) |
|
|
(1.8 |
) |
|
|
(8.9 |
) |
|
|
(20.4 |
) |
|
|
0.1 |
|
|
|
(0.1 |
) |
|
|
(20.4 |
) |
| Salaries and benefits |
|
(27.0 |
) |
|
|
(8.6 |
) |
|
|
(36.8 |
) |
|
|
(72.4 |
) |
|
|
— |
|
|
|
— |
|
|
|
(72.4 |
) |
| Content expenses |
|
(1.4 |
) |
|
|
(44.0 |
) |
|
|
(1.9 |
) |
|
|
(47.3 |
) |
|
|
— |
|
|
|
9.7 |
|
|
|
(37.6 |
) |
| Selling, general, and
administrative expense |
|
(8.5 |
) |
|
|
(4.3 |
) |
|
|
(10.3 |
) |
|
|
(23.1 |
) |
|
|
(18.1 |
) |
|
|
0.5 |
|
|
|
(40.7 |
) |
| Maintenance, insurance and
utilities |
|
(11.4 |
) |
|
|
(1.2 |
) |
|
|
(10.3 |
) |
|
|
(22.9 |
) |
|
|
(0.1 |
) |
|
|
— |
|
|
|
(23.0 |
) |
| Property and other taxes |
|
(1.6 |
) |
|
|
(1.1 |
) |
|
|
(3.6 |
) |
|
|
(6.3 |
) |
|
|
(0.1 |
) |
|
|
— |
|
|
|
(6.4 |
) |
| Other operating expense |
|
(23.2 |
) |
|
|
(9.8 |
) |
|
|
(17.7 |
) |
|
|
(50.7 |
) |
|
|
(0.1 |
) |
|
|
5.0 |
|
|
|
(45.8 |
) |
| Other income |
|
0.2 |
|
|
|
(0.1 |
) |
|
|
48.8 |
|
|
|
48.9 |
|
|
|
— |
|
|
|
— |
|
|
|
48.9 |
|
|
Adjusted EBITDA |
$ |
88.9 |
|
|
$ |
34.9 |
|
|
$ |
113.4 |
|
|
$ |
237.2 |
|
|
$ |
(18.1 |
) |
|
$ |
— |
|
|
$ |
219.1 |
|
| |
Three Months Ended December 31, 2022 |
| (in millions) |
Live and Historical Racing |
|
TwinSpires |
|
Gaming |
|
Total Segments |
|
All
Other(a) |
|
Eliminations |
|
Total |
|
Revenue |
$ |
180.9 |
|
|
$ |
94.3 |
|
|
$ |
212.2 |
|
|
$ |
487.4 |
|
|
$ |
0.4 |
|
|
$ |
(8.4 |
) |
|
$ |
479.4 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gaming taxes and purses |
|
(50.6 |
) |
|
|
(5.7 |
) |
|
|
(72.0 |
) |
|
|
(128.3 |
) |
|
|
— |
|
|
|
— |
|
|
|
(128.3 |
) |
| Marketing and advertising |
|
(6.9 |
) |
|
|
(1.6 |
) |
|
|
(7.6 |
) |
|
|
(16.1 |
) |
|
|
— |
|
|
|
0.2 |
|
|
|
(15.9 |
) |
| Salaries and benefits |
|
(20.3 |
) |
|
|
(6.9 |
) |
|
|
(30.7 |
) |
|
|
(57.9 |
) |
|
|
— |
|
|
|
— |
|
|
|
(57.9 |
) |
| Content expenses |
|
(1.2 |
) |
|
|
(42.8 |
) |
|
|
(1.9 |
) |
|
|
(45.9 |
) |
|
|
— |
|
|
|
7.7 |
|
|
|
(38.2 |
) |
| Selling, general, and
administrative expense |
|
(8.9 |
) |
|
|
(1.8 |
) |
|
|
(10.9 |
) |
|
|
(21.6 |
) |
|
|
(18.2 |
) |
|
|
0.2 |
|
|
|
(39.6 |
) |
| Maintenance, insurance and
utilities |
|
(8.9 |
) |
|
|
(0.9 |
) |
|
|
(10.0 |
) |
|
|
(19.8 |
) |
|
|
(0.1 |
) |
|
|
— |
|
|
|
(19.9 |
) |
| Property and other taxes |
|
(0.9 |
) |
|
|
(0.1 |
) |
|
|
(3.0 |
) |
|
|
(4.0 |
) |
|
|
— |
|
|
|
— |
|
|
|
(4.0 |
) |
| Other operating expense |
|
(22.1 |
) |
|
|
(9.6 |
) |
|
|
(14.6 |
) |
|
|
(46.3 |
) |
|
|
— |
|
|
|
0.3 |
|
|
|
(46.0 |
) |
| Other income |
|
0.1 |
|
|
|
0.1 |
|
|
|
50.9 |
|
|
|
51.1 |
|
|
|
— |
|
|
|
— |
|
|
|
51.1 |
|
| Adjusted EBITDA |
$ |
61.2 |
|
|
$ |
25.0 |
|
|
$ |
112.4 |
|
|
$ |
198.6 |
|
|
$ |
(17.9 |
) |
|
$ |
— |
|
|
$ |
180.7 |
|
| (a) |
The revenue and expenses associated with the Adjusted EBITDA for
All Other excludes the results of Arlington. |
|
CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL
INFORMATION(unaudited except year ended 2023 and
2022 amounts) |
| |
| Adjusted EBITDA
by segment is comprised of the following: |
| |
Year Ended December 31, 2023 |
| (in millions) |
Live and Historical Racing |
|
TwinSpires |
|
Gaming |
|
Total Segments |
|
All
Other(a) |
|
Eliminations |
|
Total |
|
Revenue |
$ |
1,084.6 |
|
|
$ |
458.4 |
|
|
$ |
974.6 |
|
|
$ |
2,517.6 |
|
|
$ |
0.9 |
|
|
$ |
(56.8 |
) |
|
$ |
2,461.7 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gaming taxes and purses |
|
(267.7 |
) |
|
|
(22.6 |
) |
|
|
(322.8 |
) |
|
|
(613.1 |
) |
|
|
— |
|
|
|
— |
|
|
|
(613.1 |
) |
| Marketing and advertising |
|
(37.6 |
) |
|
|
(9.8 |
) |
|
|
(35.4 |
) |
|
|
(82.8 |
) |
|
|
(0.1 |
) |
|
|
0.2 |
|
|
|
(82.7 |
) |
| Salaries and benefits |
|
(107.0 |
) |
|
|
(29.3 |
) |
|
|
(146.0 |
) |
|
|
(282.3 |
) |
|
|
— |
|
|
|
— |
|
|
|
(282.3 |
) |
| Content expenses |
|
(6.5 |
) |
|
|
(205.1 |
) |
|
|
(8.8 |
) |
|
|
(220.4 |
) |
|
|
— |
|
|
|
47.4 |
|
|
|
(173.0 |
) |
| Selling, general, and
administrative expense |
|
(31.9 |
) |
|
|
(12.4 |
) |
|
|
(42.7 |
) |
|
|
(87.0 |
) |
|
|
(72.2 |
) |
|
|
1.4 |
|
|
|
(157.8 |
) |
| Maintenance, insurance and
utilities |
|
(43.2 |
) |
|
|
(3.8 |
) |
|
|
(40.0 |
) |
|
|
(87.0 |
) |
|
|
(0.4 |
) |
|
|
— |
|
|
|
(87.4 |
) |
| Property and other taxes |
|
(6.0 |
) |
|
|
(0.2 |
) |
|
|
(13.5 |
) |
|
|
(19.7 |
) |
|
|
(0.4 |
) |
|
|
— |
|
|
|
(20.1 |
) |
| Other operating expense |
|
(110.6 |
) |
|
|
(44.1 |
) |
|
|
(70.2 |
) |
|
|
(224.9 |
) |
|
|
— |
|
|
|
7.8 |
|
|
|
(217.1 |
) |
| Other income |
|
1.3 |
|
|
|
1.0 |
|
|
|
193.4 |
|
|
|
195.7 |
|
|
|
— |
|
|
|
— |
|
|
|
195.7 |
|
| Adjusted EBITDA |
$ |
475.4 |
|
|
$ |
132.1 |
|
|
$ |
488.6 |
|
|
$ |
1,096.1 |
|
|
$ |
(72.2 |
) |
|
$ |
— |
|
|
$ |
1,023.9 |
|
| |
Year Ended December 31, 2022 |
| (in millions) |
Live and Historical Racing |
|
TwinSpires |
|
Gaming |
|
Total Segments |
|
All
Other(a) |
|
Eliminations |
|
Total |
|
Revenue |
$ |
646.4 |
|
|
$ |
441.6 |
|
|
$ |
761.8 |
|
|
$ |
1,849.8 |
|
|
$ |
0.8 |
|
|
$ |
(43.3 |
) |
|
$ |
1,807.3 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gaming taxes and purses |
|
(168.6 |
) |
|
|
(27.0 |
) |
|
|
(278.1 |
) |
|
|
(473.7 |
) |
|
|
— |
|
|
|
— |
|
|
|
(473.7 |
) |
| Marketing and advertising |
|
(19.8 |
) |
|
|
(13.0 |
) |
|
|
(18.9 |
) |
|
|
(51.7 |
) |
|
|
(0.2 |
) |
|
|
0.2 |
|
|
|
(51.7 |
) |
| Salaries and benefits |
|
(63.4 |
) |
|
|
(26.8 |
) |
|
|
(102.7 |
) |
|
|
(192.9 |
) |
|
|
— |
|
|
|
— |
|
|
|
(192.9 |
) |
| Content expenses |
|
(3.4 |
) |
|
|
(203.3 |
) |
|
|
(8.3 |
) |
|
|
(215.0 |
) |
|
|
— |
|
|
|
41.4 |
|
|
|
(173.6 |
) |
| Selling, general, and
administrative expense |
|
(18.6 |
) |
|
|
(9.7 |
) |
|
|
(31.3 |
) |
|
|
(59.6 |
) |
|
|
(60.1 |
) |
|
|
1.3 |
|
|
|
(118.4 |
) |
| Maintenance, insurance and
utilities |
|
(24.3 |
) |
|
|
(3.0 |
) |
|
|
(31.1 |
) |
|
|
(58.4 |
) |
|
|
(0.4 |
) |
|
|
— |
|
|
|
(58.8 |
) |
| Property and other taxes |
|
(2.6 |
) |
|
|
(0.2 |
) |
|
|
(10.5 |
) |
|
|
(13.3 |
) |
|
|
(0.1 |
) |
|
|
— |
|
|
|
(13.4 |
) |
| Other operating expense |
|
(58.6 |
) |
|
|
(44.6 |
) |
|
|
(49.9 |
) |
|
|
(153.1 |
) |
|
|
— |
|
|
|
0.4 |
|
|
|
(152.7 |
) |
| Other income |
|
0.4 |
|
|
|
0.1 |
|
|
|
190.9 |
|
|
|
191.4 |
|
|
|
0.1 |
|
|
|
— |
|
|
|
191.5 |
|
| Adjusted EBITDA |
$ |
287.5 |
|
|
$ |
114.1 |
|
|
$ |
421.9 |
|
|
$ |
823.5 |
|
|
$ |
(59.9 |
) |
|
$ |
— |
|
|
$ |
763.6 |
|
| (a) |
The revenue and expenses associated with the Adjusted EBITDA for
All Other excludes the results of Arlington. |
|
CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL
INFORMATION(unaudited except year ended 2023 and
2022 amounts) |
| |
| |
Three Months Ended December 31, |
|
Years Ended December 31, |
|
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net income and comprehensive income |
$ |
57.6 |
|
|
$ |
1.0 |
|
|
$ |
417.3 |
|
|
$ |
439.4 |
|
| Additions: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
47.2 |
|
|
|
35.0 |
|
|
|
169.0 |
|
|
|
113.7 |
|
|
Interest expense |
|
70.6 |
|
|
|
54.7 |
|
|
|
268.4 |
|
|
|
147.3 |
|
|
Income tax provision |
|
14.3 |
|
|
|
(4.1 |
) |
|
|
144.5 |
|
|
|
169.4 |
|
|
EBITDA |
$ |
189.7 |
|
|
$ |
86.6 |
|
|
$ |
999.2 |
|
|
$ |
869.8 |
|
| |
|
|
|
|
|
|
|
|
Adjustments to EBITDA: |
|
|
|
|
|
|
|
|
Stock-based compensation expense |
$ |
8.1 |
|
|
$ |
8.3 |
|
|
$ |
32.9 |
|
|
$ |
31.8 |
|
|
Legal reserves |
|
(1.2 |
) |
|
|
0.6 |
|
|
|
(1.2 |
) |
|
|
3.8 |
|
|
Pre-opening expense |
|
7.2 |
|
|
|
4.3 |
|
|
|
18.6 |
|
|
|
13.2 |
|
|
Arlington exit costs |
|
— |
|
|
|
— |
|
|
|
9.4 |
|
|
|
5.7 |
|
|
Other expense, net |
|
(0.6 |
) |
|
|
1.7 |
|
|
|
7.0 |
|
|
|
1.7 |
|
|
Transaction expense, net |
|
3.0 |
|
|
|
34.7 |
|
|
|
4.8 |
|
|
|
42.1 |
|
|
Asset impairments |
|
0.1 |
|
|
|
33.4 |
|
|
|
24.6 |
|
|
|
38.3 |
|
|
Other income, expense: |
|
|
|
|
|
|
|
|
Interest, depreciation and amortization expense related to equity
investments |
|
10.4 |
|
|
|
11.1 |
|
|
|
40.2 |
|
|
|
42.8 |
|
|
Changes in fair value of Rivers Des Plaines' interest rate
swaps |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(12.6 |
) |
|
Rivers Des Plaines' legal reserves and transactions costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.6 |
|
|
Other charges and recoveries, net |
|
2.4 |
|
|
|
— |
|
|
|
2.4 |
|
|
|
1.0 |
|
|
Gain on the sale of assets |
|
— |
|
|
|
— |
|
|
|
(114.0 |
) |
|
|
(274.6 |
) |
|
Total adjustments to EBITDA |
|
29.4 |
|
|
|
94.1 |
|
|
|
24.7 |
|
|
|
(106.2 |
) |
| Adjusted
EBITDA |
$ |
219.1 |
|
|
$ |
180.7 |
|
|
$ |
1,023.9 |
|
|
$ |
763.6 |
|
|
Adjusted EBITDA by segment: |
|
|
|
|
|
|
|
|
Live and Historical Racing |
$ |
88.9 |
|
|
$ |
61.2 |
|
|
$ |
475.4 |
|
|
$ |
287.5 |
|
|
TwinSpires |
|
34.9 |
|
|
|
25.0 |
|
|
|
132.1 |
|
|
|
114.1 |
|
|
Gaming |
|
113.4 |
|
|
|
112.4 |
|
|
|
488.6 |
|
|
|
421.9 |
|
|
Total segment Adjusted EBITDA |
|
237.2 |
|
|
|
198.6 |
|
|
|
1,096.1 |
|
|
|
823.5 |
|
|
All Other |
|
(18.1 |
) |
|
|
(17.9 |
) |
|
|
(72.2 |
) |
|
|
(59.9 |
) |
|
Total Adjusted EBITDA |
$ |
219.1 |
|
|
$ |
180.7 |
|
|
$ |
1,023.9 |
|
|
$ |
763.6 |
|
|
CHURCHILL DOWNS INCORPORATED SUPPLEMENTAL
JOINT VENTURE FINANCIAL
STATEMENTS(Unaudited) |
| |
| Summarized
financial information for our equity investments is comprised of
the following: |
| |
Three Months Ended December 31, |
|
Years Ended December 31, |
|
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Net revenue |
$ |
216.6 |
|
|
$ |
212.2 |
|
|
$ |
864.8 |
|
|
$ |
825.5 |
|
| Operating and SG&A
expense |
|
132.2 |
|
|
|
128.7 |
|
|
|
534.0 |
|
|
|
509.1 |
|
| Depreciation and
amortization |
|
6.3 |
|
|
|
8.3 |
|
|
|
23.8 |
|
|
|
25.8 |
|
|
Operating income |
|
78.1 |
|
|
|
75.2 |
|
|
|
307.0 |
|
|
|
290.6 |
|
| Interest and other expense,
net |
|
(11.2 |
) |
|
|
(11.0 |
) |
|
|
(43.9 |
) |
|
|
(24.8 |
) |
|
Net income |
$ |
66.9 |
|
|
$ |
64.2 |
|
|
$ |
263.1 |
|
|
$ |
265.8 |
|
| |
December 31, |
|
(in millions) |
|
2023 |
|
|
|
2022 |
|
| Assets |
|
|
|
| Current assets |
$ |
104.8 |
|
|
$ |
91.0 |
|
| Property and equipment,
net |
|
339.4 |
|
|
|
345.7 |
|
| Other assets, net |
|
266.1 |
|
|
|
265.0 |
|
|
Total assets |
$ |
710.3 |
|
|
$ |
701.7 |
|
| |
|
|
|
| Liabilities and
Members' Deficit |
|
|
|
| Current liabilities |
$ |
106.2 |
|
|
$ |
97.9 |
|
| Long-term debt |
|
847.2 |
|
|
|
838.6 |
|
| Other liabilities |
|
0.7 |
|
|
|
0.2 |
|
| Members' deficit |
|
(243.8 |
) |
|
|
(235.0 |
) |
|
Total liabilities and members' deficit |
$ |
710.3 |
|
|
$ |
701.7 |
|
| CHURCHILL
DOWNS INCORPORATED PLANNED CAPITAL
PROJECTS(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(Louisville, Kentucky) |
Paddock Project |
May 2024 |
$185 - $200 |
|
Jockey Club Suites |
May 2024 |
$14 |
|
The Rose (Northern Virginia) |
Property Build Out |
Late Third Quarter 2024 |
$460 |
|
Owensboro Racing and Gaming (Western Kentucky) |
Property Build Out |
First Quarter 2025 |
$100 |
|
New Hampshire HRM Facility |
Property Build Out |
TBD |
TBD |
|
|
|
|
|
| Gaming
Segment |
|
|
|
|
Terre Haute Casino Resort |
Property Build Out (Casino) |
April 2024 |
Up to $290 |
|
Property Build Out (Hotel) |
May 2024 |
Contact: Kaitlin Buzzetto(502)
394-1091Kaitlin.Buzzetto@kyderby.com
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