Document And Entity Information
Document And Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Feb. 19, 2016 | Jun. 30, 2015 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | CHURCHILL DOWNS INC | ||
Entity Central Index Key | 20,212 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 16,594,321 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 1,706,838,462 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 74,528 | $ 67,936 |
Restricted cash | 29,686 | 26,065 |
Accounts receivable, net of allowance for doubtful accounts of $3,761 in 2015 and $4,246 in 2014 | 67,715 | 75,890 |
Deferred income taxes | 0 | 18,519 |
Income taxes receivable | 1,037 | 29,455 |
Game technology and rights, net | 10,339 | 530 |
Other current assets | 39,524 | 24,135 |
Total current assets | 222,829 | 242,530 |
Property and equipment, net | 573,172 | 595,315 |
Investment in and advances to unconsolidated affiliates | 129,746 | 109,548 |
Goodwill | 841,724 | 840,947 |
Other intangible assets, net | 496,153 | 549,972 |
Other assets | 13,820 | 17,941 |
Total assets | 2,277,444 | 2,356,253 |
Current liabilities: | ||
Accounts payable | 39,120 | 45,182 |
Purses payable | 12,139 | 11,169 |
Account wagering deposit liabilities | 20,351 | 18,137 |
Accrued expense | 97,836 | 93,286 |
Tax refund due to Big Fish Games former equity holders | 426 | 18,087 |
Deferred revenue | 46,029 | 51,833 |
Deferred revenue - Big Fish Games | 81,301 | 41,747 |
Big Fish Games deferred payment, current | 28,050 | 28,139 |
Big Fish Games earnout liability, current | 279,490 | 0 |
Current maturities of long-term debt | 16,250 | 11,250 |
Dividends payable | 19,110 | 17,419 |
Total current liabilities | 640,102 | 336,249 |
Long-term debt (net of current maturities and loan origination fees of $638 in 2015 and $787 in 2014) | 171,862 | 458,318 |
Notes payable (including premium of $2,978 in 2015 and net of debt issuance costs of $9,308 in 2015 and $5,464 in 2014) | 593,670 | 294,536 |
Big Fish Games deferred payment, net of current amount due | 26,670 | 51,620 |
Big Fish Games earnout liability | 65,710 | 327,800 |
Deferred revenue | 16,068 | 16,489 |
Deferred income taxes | 127,883 | 149,522 |
Other liabilities | 18,282 | 21,718 |
Total liabilities | $ 1,660,247 | $ 1,656,252 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Preferred stock, no par value; 250 shares authorized; no shares issued | $ 0 | $ 0 |
Common stock, no par value; 50,000 shares authorized; 16,600 shares issued at December 31, 2015 and 17,472 shares issued at December 31, 2014 | 134,026 | 262,280 |
Retained earnings | 483,759 | 437,846 |
Accumulated other comprehensive loss | (588) | (125) |
Total shareholders’ equity | 617,197 | 700,001 |
Total liabilities and shareholders’ equity | $ 2,277,444 | $ 2,356,253 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 3,761 | $ 4,246 |
Long-term debt, current maturities and loan origination fees | 638 | 787 |
Notes payable, premium | 2,978 | |
Notes payable, debt issuance costs | $ 9,308 | $ 5,464 |
Preferred stock, no par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized | 250 | 250 |
Preferred stock, shares issued | 0 | 0 |
Common stock, no par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 50,000 | 50,000 |
Common stock, shares issued | 16,600 | 17,472 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net revenue: | |||
Racing | $ 248,603 | $ 261,453 | $ 274,269 |
Casinos | 332,299 | 328,294 | 297,176 |
TwinSpires | 200,168 | 190,333 | 184,541 |
Big Fish Games | 413,685 | 13,855 | 0 |
Other Investments | 16,636 | 17,125 | 21,899 |
Corporate | 910 | 1,158 | 1,143 |
Net revenue | 1,212,301 | 812,218 | 779,028 |
Operating expense: | |||
Racing | 190,225 | 216,269 | 233,286 |
Casinos | 240,868 | 243,335 | 222,581 |
TwinSpires | 133,302 | 133,553 | 123,449 |
Big Fish Games | 340,088 | 15,971 | 0 |
Other Investments | 18,418 | 22,247 | 25,079 |
Corporate | 0 | 1,941 | 1,462 |
Selling, general and administrative expense | 90,787 | 82,385 | 83,071 |
Research and development | 39,399 | 0 | 0 |
Calder exit costs | 13,854 | 2,298 | 0 |
Acquisition-related charges | 21,748 | 3,826 | 0 |
Operating income | 123,612 | 90,393 | 90,100 |
Other income (expense): | |||
Interest income | 42 | 20 | 112 |
Interest expense | (28,595) | (20,842) | (6,231) |
Equity in income (losses) of unconsolidated investments | 11,180 | 6,328 | (4,142) |
Miscellaneous, net | 5,850 | 619 | 5,667 |
Total other income (expense) | (11,523) | (13,875) | (4,594) |
Income from continuing operations before provision for income taxes | 112,089 | 76,518 | 85,506 |
Income tax provision | (46,892) | (30,161) | (30,473) |
Income from continuing operations | 65,197 | 46,357 | 55,033 |
Discontinued operations, net of income taxes: | |||
Loss from operations | 0 | 0 | (50) |
Loss on sale of assets | 0 | 0 | (83) |
Net income | $ 65,197 | $ 46,357 | $ 54,900 |
Basic | |||
Income from continuing operations (in dollars per share) | $ 3.75 | $ 2.67 | $ 3.13 |
Discontinued operations (in dollars per share) | 0 | 0 | (0.01) |
Net income (in dollars per share) | 3.75 | 2.67 | 3.12 |
Diluted | |||
Income from continuing operations (in dollars per share) | 3.71 | 2.64 | 3.07 |
Discontinued operations (in dollars per share) | 0 | 0 | (0.01) |
Net income (in dollars per share) | $ 3.71 | $ 2.64 | $ 3.06 |
Weighted average shares outstanding: | |||
Basic (in shares) | 17,225 | 17,271 | 17,294 |
Diluted (in shares) | 17,576 | 17,589 | 17,938 |
Foreign currency translation, net of tax | $ (463) | $ (125) | $ 0 |
Other comprehensive loss | (463) | (125) | 0 |
Comprehensive income | $ 64,734 | $ 46,232 | $ 54,900 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive Loss |
Shares, Outstanding, Beginning of Period (in shares) at Dec. 31, 2012 | 17,448,000 | |||
Shareholders' Equity Attributable to Parent, Beginning of Period at Dec. 31, 2012 | $ 644,295,000 | $ 274,709,000 | $ 369,586,000 | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income and comprehensive income | 54,900,000 | 54,900,000 | ||
Stock Issued During Period, Shares, New Issues | 198,000 | |||
Issuance of common stock | 7,506,000 | $ 7,506,000 | ||
Tax windfall from stock-based compensation | 2,981,000 | $ 2,981,000 | ||
Repurchase of common stock (in shares) | (133,000) | |||
Repurchase of common stock | (10,723,000) | $ (10,723,000) | ||
Grant of restricted stock, net of forfeitures (in shares) | 435,000 | |||
Grants of restricted stock, net of forfeitures | 0 | |||
Stock-based compensation | 21,482,000 | $ 21,482,000 | ||
Cash & restricted stock dividends | (15,652,000) | (15,652,000) | ||
Foreign currency translation, net of tax | 0 | |||
Shares, Outstanding, End of Period (in shares) at Dec. 31, 2013 | 17,948,000 | |||
Shareholders' Equity Attributable to Parent, End of Period at Dec. 31, 2013 | 704,789,000 | $ 295,955,000 | 408,834,000 | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income and comprehensive income | 46,357,000 | 46,357,000 | ||
Stock Issued During Period, Shares, New Issues | 358,000 | |||
Issuance of common stock | 23,268,000 | $ 23,268,000 | ||
Tax windfall from stock-based compensation | $ 7,708,000 | $ 7,708,000 | ||
Repurchase of common stock (in shares) | (691,000) | (851,000) | ||
Repurchase of common stock | $ (76,582,000) | $ (76,582,000) | ||
Grant of restricted stock, net of forfeitures (in shares) | 17,000 | |||
Grants of restricted stock, net of forfeitures | 0 | |||
Stock-based compensation | 11,931,000 | $ 11,931,000 | ||
Cash & restricted stock dividends | (17,345,000) | (17,345,000) | ||
Foreign currency translation, net of tax | (125,000) | (125,000) | ||
Shares, Outstanding, End of Period (in shares) at Dec. 31, 2014 | 17,472,000 | |||
Shareholders' Equity Attributable to Parent, End of Period at Dec. 31, 2014 | 700,001,000 | $ 262,280,000 | 437,846,000 | (125,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income and comprehensive income | 65,197,000 | 65,197,000 | ||
Stock Issued During Period, Shares, New Issues | 17,000 | |||
Issuance of common stock | 3,484,000 | $ 3,484,000 | ||
Tax windfall from stock-based compensation | 5,553,000 | $ 5,553,000 | ||
Repurchase of common stock (in shares) | (1,049,000) | |||
Repurchase of common stock | (151,140,000) | $ (151,140,000) | ||
Grant of restricted stock, net of forfeitures (in shares) | 160,000 | |||
Grants of restricted stock, net of forfeitures | 0 | |||
Stock-based compensation | 13,849,000 | $ 13,849,000 | ||
Cash & restricted stock dividends | (19,284,000) | (19,284,000) | ||
Foreign currency translation, net of tax | (463,000) | (463,000) | ||
Shares, Outstanding, End of Period (in shares) at Dec. 31, 2015 | 16,600,000 | |||
Shareholders' Equity Attributable to Parent, End of Period at Dec. 31, 2015 | $ 617,197,000 | $ 134,026,000 | $ 483,759,000 | $ (588,000) |
Consolidated Statements of Sha6
Consolidated Statements of Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash & restricted stock dividends (in dollars per share) | $ 1.15 | $ 1 | $ 0.87 |
Foreign currency translation adjustment, tax effect | $ (239) | $ (70) |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities: | |||
Net income | $ 65,197 | $ 46,357 | $ 54,900 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 109,706 | 68,257 | 61,750 |
Game technology and rights amortization | 9,678 | 0 | 0 |
Impairment and acquisition charges | 34,696 | 7,073 | 0 |
Gain on sale of equity investments | (5,817) | 0 | 0 |
Dividend from investment in unconsolidated affiliates | 15,250 | 0 | 0 |
Equity in (income) losses of unconsolidated investments | (11,180) | (6,328) | 4,142 |
Stock-based compensation | 13,849 | 11,931 | 21,482 |
Deferred tax (benefit) provision | (3,444) | 14,839 | 5,284 |
Loss (gain) on sale of business and asset dispositions | 281 | (382) | (366) |
Other | 4,659 | 619 | 689 |
Increase (decrease) in cash resulting from changes in operating assets and liabilities, net of business acquisitions and dispositions: | |||
Other current assets | (15,295) | (3,255) | 1,372 |
Game technology and rights | (19,800) | 0 | 0 |
Income taxes | 28,488 | 206 | (11,023) |
Deferred revenue | 38,333 | 639 | 6,029 |
Other assets and liabilities | (75) | 1,663 | 656 |
Net cash provided by operating activities | 264,526 | 141,619 | 144,915 |
Cash flows from investing activities: | |||
Additions to property and equipment | (43,510) | (54,486) | (48,771) |
Acquisition of businesses, net of cash acquired | (959) | (366,045) | (154,872) |
Acquisition of gaming licenses | (2,250) | (2,250) | (2,650) |
Investment in joint ventures | (460) | (17,906) | (70,500) |
Proceeds from sale of equity investment | 6,000 | 0 | 0 |
Purchases of minority investments | (24,519) | (602) | (902) |
Proceeds from sale of assets | 213 | 981 | 15 |
Net cash used in investing activities | (65,485) | (440,308) | (277,680) |
Cash flows from financing activities: | |||
Borrowings on bank line of credit | 704,178 | 804,986 | 740,131 |
Repayments of bank line of credit | (985,783) | (403,822) | (880,667) |
Big Fish Games deferred payment | (28,428) | 0 | 0 |
Tax refund payments to Big Fish Games equity holders | (17,711) | 0 | 0 |
Proceeds from note issuance | 300,000 | 0 | 300,000 |
Payment of dividends | (17,419) | (15,186) | 0 |
Repurchase of common stock | (147,554) | (76,582) | (10,723) |
Common stock issued | 1,213 | 7,475 | 1,135 |
Windfall tax provision from stock-based compensation | 5,553 | 7,708 | 2,981 |
Loan origination fees and debt issuance costs | (4,626) | (2,101) | (7,508) |
Other | (67) | (429) | (5,053) |
Net cash (used in) provided by financing activities | (190,644) | 322,049 | 140,296 |
Net increase in cash and cash equivalents | 8,397 | 23,360 | 7,531 |
Effect of exchange rate changes on cash | (1,805) | (132) | 0 |
Cash and cash equivalents, beginning of year | 67,936 | 44,708 | 37,177 |
Cash and cash equivalents, end of year | 74,528 | 67,936 | 44,708 |
Supplemental disclosures of cash flow information: | |||
Interest | 63,864 | 17,517 | 4,032 |
State tax credits | 0 | 0 | 1,298 |
Income taxes | 41,500 | 16,982 | 31,324 |
Schedule of non-cash investing and financing activities: | |||
Earnout liability for acquisition of Big Fish Games | 0 | 324,747 | 0 |
Deferred payment for acquisition of Big Fish Games | 0 | 97,073 | 0 |
Issuance of common stock in connection with the Company LTIP, the New Company LTIP and other restricted stock plans | 27,744 | 2,991 | 30,678 |
Dividends payable | 19,110 | 17,419 | 15,186 |
Repurchase of common stock in payment of income taxes on stock-based compensation | 3,586 | 0 | 0 |
Property and equipment additions included in accounts payable and accrued expense | 1,471 | 1,269 | 3,769 |
Issuance Of Common Stock For Extinguishment Of Convertible Note Payable | |||
Schedule of non-cash investing and financing activities: | |||
Issuance of common stock for acquisition of Big Fish Games | $ 0 | $ 15,793 | $ 0 |
Basis Of Presentation and Summa
Basis Of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis Of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations Churchill Downs Incorporated (the "Company", "we", "us", "our") is one of the world's largest producers and distributors of online and mobile casual games. We are also a diversified provider of casino gaming, online account wagering on horse racing, and pari-mutuel horse racing. The accompanying consolidated financial statements include the accounts of our wholly-owned subsidiaries consisting of Churchill Downs Racetrack, LLC ("Churchill Downs"); Arlington International Race Course, LLC ("Arlington"); Churchill Downs Louisiana Horseracing Company, LLC ("Fair Grounds Slots" and "Fair Grounds"); Calder Race Course, Inc. and Tropical Park, Inc. ("Calder"); BB Development, LLC ("Oxford"); Magnolia Hill, LLC ("Riverwalk"); SW Gaming, LLC ("Harlow’s"); Video Services, LLC ("VSI"); Churchill Downs Technology Initiatives Company ("CDTIC"), the owner and operator of TwinSpires; Velocity Wagering Limited ("Velocity"); Big Fish Games, Inc. ("Big Fish Games"); Churchill Downs Interactive Gaming ("I-Gaming"); United Tote Company, Inc. ("United Tote") and Bluff Media ("Bluff"). In addition, we include our 50% joint venture in Miami Valley Gaming LLC ("MVG") and our 25% investment in Saratoga Casino Holding, LLC ("SCH"). All intercompany balances and transactions have been eliminated in consolidation. The Consolidated Statements of Comprehensive Income include net revenue and operating expense associated with our Racing, Casinos, TwinSpires, Big Fish Games, Other Investments and Corporate operating segments which are defined as follows: Racing: primarily commissions earned on wagering at our racetracks, off-track betting facilities ("OTBs"), simulcast fees earned from other wagering sites, and the operations include ancillary admissions, sponsorships and licensing rights, food and beverage services and alternative uses of our pari-mutuel facilities. Casinos: slot machines, table games, video poker ancillary food and beverage services and hotel and other miscellaneous operations. In addition, we include our 50% joint venture in MVG and our 25% equity investment in SCH. TwinSpires: Advance Deposit Wagering ("ADW") business from wagering through the Internet, telephone or other mobile devices on pari-mutuel events; high dollar wagering by international customers; and horseracing statistical data generated by our information business that provides data information and processing services to the equine industry. Big Fish Games: social casino, casual and mid-core free to play, and premium paid games for PC, Mac, and mobile devices. Other Investments: pari-mutuel wagering systems for racetracks and an Internet real-money gaming operation. Corporate: other revenue and general and administrative expense not allocated to our other operating segments. Reclassifications We have reclassified certain items in the Consolidated Financial Statements for prior years to be comparable with 2015 classifications. In 2015, prior year amounts for severance and employee benefit costs of $2.3 million related to the cessation of Calder pari-mutuel operations have been reclassified from selling, general and administrative expense to Calder exit costs on our Consolidated Statement of Comprehensive Income. During the year ended December 31, 2013, we completed the sale of 100% of the assets of Fight! Magazine ("Fight"), a division of Bluff which we acquired in February 2012. Net revenue, operating expense and the loss on the sale of Fight for the year ended December 31, 2013 have been reclassified to discontinued operations on our Consolidated Statements of Comprehensive Income. There was no impact from these reclassifications on net income or cash flows. Summary of Significant Accounting Policies Basis of presentation and use of estimates Our financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") and are based upon certain critical accounting policies. These policies may require management to make estimates, judgments and assumptions that we believe are reasonable based on our historical experience, contract terms, observance of known trends in our Company and the industry as a whole and information available from other outside sources. Our estimates affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results may differ from those initial estimates. Our most critical estimates relate to revenue recognition, goodwill and other intangible assets, property and equipment, and income taxes. Revenue Recognition Racing and TwinSpires Revenue Recognition Our Racing and TwinSpires revenue and income are influenced by our racing calendar. Therefore, revenue and operating results for any interim quarter are not generally indicative of the revenue and operating results for the year and may not be comparable with results for the corresponding period of the previous year. We historically have had fewer live racing days during the first quarter of each year, and the majority of our live racing revenue occurs during the second quarter with the running of the Kentucky Oaks and Kentucky Derby. Pari-mutuel revenue is recognized upon occurrence of the live race that is presented for wagering and after that live race is made official by the respective state’s racing regulatory body. Other operating revenue from admissions, programs and concession are recognized once delivery of the product or services has occurred. Racing and TwinSpires revenue is generated by pari-mutuel wagering on live and simulcast racing content. Live racing handle includes patron wagers made on live races at our racetracks and also wagers made on imported simulcast signals by patrons at our racetracks during live meets. Import simulcasting handle includes wagers on imported signals at our racetracks when the respective tracks are not conducting live racing meets, at our OTBs and through our ADW providers throughout the year. Export handle includes all patron wagers made on live racing signals sent to other tracks, OTBs and ADW providers. Advance deposit wagering consists of patron wagers through an advance deposit account. The gross percentages earned in 2015 approximated 19% of handle for the TwinSpires segment and 11% of handle for the Racing segment. Deferred revenue includes advance sales related to the Kentucky Oaks and Kentucky Derby races and other advance billings on racing events. Revenue from these advance billings are recognized when the related event occurs. Deferred revenue also includes advance sales of Personal Seat Licenses ("PSLs") and luxury suites. PSLs represent the ownership of a specific seat for the Kentucky Oaks, Kentucky Derby and Breeders’ Cup races at Churchill Downs and have a contractual life of either one , two , three , five or thirty years. Revenue from PSLs is recognized when the Kentucky Oaks, Kentucky Derby and Breeders’ Cup races occur on a ratable basis over the term of the contract. Luxury suites are sold for specific racing events as well as for a predetermined contractual term. Revenue related to the sale of luxury suites is recognized as they are utilized when the related event occurs. Casinos Revenue Recognition Casino revenue represents net casino wins which is the difference between casino wins and losses. Other operating revenue, such as concession revenue, is recognized once delivery of the product or service has occurred. Big Fish Games Big Fish Games revenue is primarily derived from the sale of in-app purchases within our free-to-play games and sales of our premium paid games. We offer social casino and casual and mid-core free-to-play games that customers can play at no cost. Customers can purchase virtual currency that can be used to buy virtual items to enhance the game playing experience. These games are distributed primarily through third party mobile platform providers, including but not limited to, Apple and Google. We receive and utilize reports from these third party mobile platform providers which break down the virtual goods purchased in our casual mid-core and casino free-to-play games for a given time period. The proceeds from the sale of virtual goods are initially recorded as deferred revenue and recognized as revenue when persuasive evidence of an arrangement exists, the service has been provided to the user, the price paid by the user is fixed or determinable, and collectability is reasonably assured. Determining whether and when some of these criteria have been satisfied requires judgments that may have a significant impact on the timing and amount of revenue we report in each period. For the purpose of determining when the service has been provided to the player, we have determined that an implied obligation exists to the paying user to continue to make available the purchased virtual goods within the game over the estimated life of the virtual goods. For casino games, the life of the virtual goods is estimated to be the time period over which virtual goods are consumed, approximating three days. For all other casual games, the average playing period of paying players of approximately four months represents our best estimate of the average life of virtual goods. The proceeds from the sale of virtual goods are recorded as deferred revenue and recognized as revenue over the estimated life of the virtual goods. Premium game revenue is derived from our PC subscription business, the Big Fish Game Club, and from the sale of individual games on PC, Mac and mobile devices. Subscribers receive a game credit each month with their subscription. The value of the game credit is recognized when a customer redeems the game credit. We record breakage revenue related to outstanding premium game credits. For credits that are subject to expiration, breakage revenue is recorded when the credits have legally expired. Breakage revenue is recorded for game credits with no legal expiration when we have determined the likelihood of redemption is remote based on historical game credit redemption patterns. Other Estimates and Judgments We estimate revenue from digital storefronts, such as Apple and Google, in the current period when reasonable estimates of these amounts can be made. The digital storefronts provide reliable interim preliminary sales reporting data within a reasonable time frame following the end of each month, which, when validated against our internal data, allows us to make reasonable estimates of revenue and therefore to recognize revenue during the reporting period. Determination of the appropriate amount of revenue recognized involves judgments and estimates that we believe are reasonable, but it is possible that actual results may differ from our estimates. When we receive the final reports, to the extent not received within a reasonable time frame following the end of each month, we record any differences between estimated revenue and actual revenue in the reporting period when we determine the actual amounts. Historically, the revenue on the final revenue report has not differed significantly from the reported revenue for the period. Principal Agent Considerations In accordance with Accounting Standards Codification ("ASC"), we evaluate our digital storefront agreements in order to determine whether or not we are acting as the principal or as an agent when selling our games, which we consider in determining if revenue should be reported gross or net. We primarily use digital storefronts for distributing our casino and casual free-to-play games. Key indicators that we evaluate in order to reach this determination include: • the terms and conditions of our contracts with the digital storefronts; • the party responsible for billing and collecting fees from the end-users, including the resolution of billing disputes; • whether we are paid a fixed percentage of the arrangement’s consideration or a fixed fee for each game; • the party which sets the pricing with the end-user, has the credit risk and provides customer support; and • the party responsible for the fulfillment of the game and that determines the specifications of the game. Based on the evaluation of the above indicators, we have determined that we are generally acting as a principal and are the primary obligor to end-users for games distributed through digital storefronts; and therefore, we recognize revenue related to these arrangements on a gross basis. Goodwill and Indefinite Intangible Assets We perform an annual review for impairment of goodwill and indefinite-lived intangible assets as of March 31 of each fiscal year, or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. Adverse industry or economic trends, lower projections of profitability, or a sustained decline in our market capitalization, among other items, may be indications of potential impairment issues, which are triggering events requiring the testing of an asset’s carrying value for recoverability. Goodwill is allocated and evaluated for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. Goodwill and intangible assets can or may be required to be tested using a two-step impairment test. We assess qualitative factors to determine whether it is necessary to complete the two-step impairment test using a more likely than not criteria. If an entity believes it is more likely than not that the fair value of a reporting unit is greater than its carrying value, including goodwill, the two-step process can be bypassed. Qualitative factors include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, among others. These factors require significant judgments and estimates, and application of alternative assumptions could produce significantly different results. Evaluations of possible impairment utilizing the two-step approach require us to estimate, among other factors, forecasts of future operating results, revenue growth, EBITDA margin, tax rates, capital expenditures, depreciation, working capital, weighted average cost of capital, long-term growth rates, risk premiums, terminal values and fair market values of our reporting units and assets. Changes in estimates or the application of alternative assumptions could produce significantly different results. We completed step one of the two-step test during the first quarter of 2015, and there were no impairments to our goodwill in 2015. Our slots gaming rights and casinos' trade names are considered indefinite-lived intangible assets that do not require amortization based on our future expectations to operate our gaming facilities and use the trade names indefinitely and our historical experience in renewing these intangible assets at minimal cost with various state gaming commissions. Our Big Fish Games trade name is also considered an indefinite-lived intangible asset. These indefinite intangible assets are tested annually, or more frequently, if indicators of impairment exist, by comparing the fair value of the recorded assets to their carrying amount. If the carrying amount of the slots gaming rights and trade name intangible assets exceed fair value, an impairment loss is recognized. There were no impairments to our indefinite-lived intangible assets in 2015. Property and Equipment We have a significant investment in long-lived property and equipment. Property and equipment are recorded at cost. Judgments are made in determining the estimated useful lives of assets, the salvage values to be assigned to assets and if or when an asset has been impaired. The accuracy of these estimates affects the amount of depreciation expense recognized in the financial results and whether to record a gain or loss on disposition of an asset. We review the carrying value of our property and equipment used in our operations whenever events or circumstances indicate that the carrying value of an asset may not be recoverable from estimated future undiscounted cash flows expected to result from its use and eventual disposition. Adverse industry or economic trends, lower projections of profitability, or a significant adverse change in legal factors or in the business climate, among other items, may be indications of potential impairment issues. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, an impairment is recorded based on the fair value of the asset. There are three generally accepted approaches available in developing an opinion of value: 1) the cost approach which is the price a prudent investor would pay to produce or construct a similar new item; 2) the market approach which is typically used for land valuations by analyzing recent sales transactions of similar sites; and 3) the income approach which is based on a discounted cash flow model using the estimated future results of the relevant reporting unit discounted using our weighted-average cost of capital and market indicators of terminal year free cash flow multiples. If necessary, we solicit third-party valuation expertise to assist in the valuation of our assets. We apply the most indicative approach to the overall valuation, or in some cases, a weighted analysis of any or all of these methods. The determination of fair value uses accounting judgments and estimates, including market conditions, and the reliability is dependent upon the availability and comparability of the market data uncovered, as well as the decision making criteria used by marketing participants when evaluating a property. Changes in estimates or application of alternative assumptions could produce significantly different results. In 2015, we recorded a $12.7 million impairment charge related to the Calder grandstand in continuing operations. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets as follows: 10 to 40 years for grandstands and buildings, 2 to 10 years for equipment, 2 to 10 years for furniture and fixtures and 10 to 20 years for tracks and other improvements. Income Taxes We use estimates and judgments for financial reporting to determine our current tax liability and deferred taxes. In accordance with the liability method of accounting for income taxes, we recognize the amount of taxes payable or refundable for the current year and deferred tax assets and liabilities for the future tax consequences of events that have been recognized in the consolidated financial statements or tax returns. Adjustments to deferred taxes are determined based upon the changes in differences between the book basis and tax basis of our assets and liabilities and measured by enacted tax rates we estimate will be applicable when these differences are expected to reverse. Changes in current tax laws, enacted tax rates or the estimated level of taxable income or non-deductible expense could change the valuation of deferred tax assets and liabilities and affect the overall effective tax rate and tax provision. When tax returns are filed, it is highly certain that some positions taken will be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that will be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with the tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet, along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Cash and Cash Equivalents We consider investments with original maturities of three months or less to be cash equivalents. We have, from time to time, cash in the bank in excess of federally insured limits. Checks issued but not presented to banks frequently result in overdraft balances for accounting purposes and are classified as a current liability in the Consolidated Balance Sheets. Restricted Cash and Account Wagering Deposit Liabilities Restricted cash represents amounts due to horsemen for purses, stakes and awards as well as customer deposits collected for advance deposit wagering. Account wagering deposit liabilities consist of deposits received from TwinSpires.com and Velocity customers to be used to fund wagering through the TwinSpires players' accounts. Foreign Currency Transactions The functional currency of our international subsidiaries is the U.S. dollar, with the exception of the Big Fish Games Luxembourg subsidiary, whose functional currency is the Euro. For subsidiaries with a functional currency of the U.S. dollar, foreign currency denominated monetary assets and liabilities are remeasured into U.S. dollars at current exchange rates and foreign currency denominated nonmonetary assets and liabilities are remeasured into U.S. dollars at historical exchange rates. Foreign currency denominated revenue and expense are remeasured at historical exchange rates. Gains or losses from foreign currency remeasurement are included in other income and expense. For the Luxembourg subsidiary, assets and liabilities are translated into U.S. dollars using exchange rates in effect at the end of a reporting period. Income and expense accounts are translated into U.S. dollars using average rates of exchange. The net gain or loss resulting from translation is recorded as foreign currency translation adjustment and included in accumulated other comprehensive income in shareholders' equity. Allowance for Doubtful Accounts Receivable We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The allowance is maintained at a level considered appropriate based on historical and other factors that affect collectability. Uncollectible accounts receivable are written off against the allowance for doubtful accounts receivable when management determines that the probability of payment is remote and collection efforts have ceased. Game Technology and Rights Game technology and rights are purchased from third-party developers of casual and mid-core free-to-play and premium paid games. Such rights may be purchased before or after the production or launch of the related games. Where technology and rights are purchased prior to a games' launch, we generally pay amounts to these developers as they reach agreed-upon milestones. Once the game is launched, we amortize our game technology and rights related to premium paid games on an accelerated basis, corresponding to historical sales patterns, over the estimated useful life of the premium paid game, which is generally one year. Game technology and rights related to casual and mid-core free-to-play games are amortized on a straight-line basis over the estimated useful life of eighteen months. The carrying amounts of game technology and rights are assessed for potential impairment at the game-specific level when facts and circumstances indicate that the carrying amount may not be recoverable. Internal Use Software and Research & Development We capitalize internal use software in accordance with accounting guidance governing computer software developed or obtained for internal use primarily related to TwinSpires and I-Gaming of approximately $8.9 million in 2015, $7.4 million in 2014 and $7.4 million in 2013. The estimated useful life of capitalized software is generally three years, once a project has commenced. We incurred amortization expense of approximately $7.0 million in 2015, $6.0 million in 2014 and $5.1 million in 2013 for projects which had been placed in service. Capitalized internal use software is included in property and equipment, net. Research & development expenditures are expensed as incurred. In 2015, $39.4 million was expensed. Long-lived Assets-Impairments In the event that facts and circumstances indicate that the carrying amount of tangible assets and other long-lived assets or groups of assets may be impaired, an evaluation of recoverability is performed. If an evaluation is required, the estimated future undiscounted cash flows associated with the assets is compared to the assets’ carrying amount to determine if an impairment loss should be recorded. The impairment loss is based on the excess, if any, of the carrying value over the fair value of the assets. Fair Value of Assets and Liabilities We adhere to a hierarchy for ranking the quality and reliability of the information used to determine fair values. Assets and liabilities that are carried at fair value are classified and disclosed in one of the following three categories: Level 1: Unadjusted quoted market prices in active markets for identical assets or liabilities; Level 2: Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability; and Level 3: Unobservable inputs for the asset or liability. We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. Investments in and Advances to Unconsolidated Affiliates We have investments in unconsolidated affiliates accounted for under the equity method. Under the equity method, carrying value is adjusted for our share of the investees' income and losses, amortization of certain basis differences as well as capital contributions to and distributions from these companies. Distributions in excess of equity method income are recognized as a return of investment and recorded as investing cash inflows in the consolidated statements of cash flows. We classify income and losses as well as gains and impairments related to our investments in unconsolidated affiliates as a component of other income (expense). We evaluate our investments in unconsolidated affiliates for impairment whenever events or changes in circumstances indicate that the carrying value of the investment may have experienced an "other-than-temporary" decline in value. If such conditions exist, we compare the estimated fair value of the investment to its carrying value to determine if an impairment is indicated and determine whether the impairment is "other-than-temporary" based on an assessment of all relevant factors, including consideration of our intent and ability to retain our investment until the recovery of the unrealized loss. We estimate fair value using a discounted cash flow analysis based on estimated future results of the investee. Debt Issuance Costs and Loan Origination Fees We incurred debt issuance costs and loan origination fees associated with our long-term debt and notes payable, which are being amortized as interest expense over the remaining term of the credit facility. These amounts are presented as a direct deduction from the carrying amount of the associated liability. Casino and Pari-mutuel Taxes We recognize casino and pari-mutuel tax expense based on the statutorily required percentage of revenue that is required to be paid to state and local jurisdictions in the states in which wagering occurs. Individual states and local jurisdictions set tax rates which range from 1.5% to 46% of net casino revenue and from 0.5% to 10.0% of the total pari-mutuel handle wagered by patrons. Purse Expense We recognize purse expense based on the statutorily determined percentage of revenue that is required to be paid out in the form of purses to the qualifying finishers of horseraces run at our racetracks in the period in which wagering occurs. We incur a liability for all unpaid purses to be paid out. We may pay out purses in excess of statutorily required amounts resulting in purse overpayments, which are expensed as incurred. Recoveries of purse overpayments are recognized in the period they are realized. Self-insurance Accruals We are self-insured up to certain limits for costs associated with general liability, workers’ compensation and employee health coverage, and we purchase insurance for claims that exceed our self-insurance retention or deductible levels. We record self-insurance reserves that include accruals of estimated settlements for known claims ("Case Reserves"), as well as accruals of third-party actuarial estimates for claims incurred but not yet reported ("IBNR"). Case Reserves represent estimated liabilities for unpaid losses, based on a claims administrator's estimates of future payments on individual reported claims, including allocated loss adjustment expense, which generally include claims settlement costs such as legal fees. IBNR includes the provision for unreported claims, changes in case reserves and future payments on reopened claims. Key variables and assumptions include, but are not limited to, loss development factors and trend factors such as changes in workers' compensation laws, medical care costs and wages. These loss development factors and trend factors are developed using our actual historical losses. It is possible that reasonable alternative selections would produce materially different reserve estimates. We believe the estimates of future liability are reasonable based upon this methodology; however, changes in key variables and assumptions, or generally in health care costs, accident frequency and severity could materially affect the estimate for these reserves. Advertising and Marketing We expense the costs of general advertising, marketing and associated promotional expenditures at the time the costs are incurred. We incurred advertising and marketing expense of approximately $130.7 million in 2015, $28.8 million in 2014 and $23.7 million in 2013. Stock-Based Compensation All stock-based payments to employees, including grants of employee stock options and restricted stock, are recognized as compensation expense over the service period based on the fair value on the date of grant. Computation of Net Income per Common Share Net income per common share is presented for both basic earnings per common share ("Basic EPS") and diluted earnings per common share ("Diluted EPS"). Earnings attributable to securities that are deemed to be participating securities are excluded from the calculation of Basic EPS using the two-class method. We have determined that employee restricted stock grants, including awards granted under our long-term incentive plans, are participating securities. Basic EPS is based upon the weighted average number of common shares outstanding during the period, excluding unvested restricted stock and stock options held by employees. Diluted EPS is based upon the weighted average number of common and potential common shares outstanding during the period. Potential common shares result from the assumed exercise of outstanding stock options as well as unvested restricted stock, the proceeds of which are then assumed to have been used to repurchase outstanding common stock using the treasury stock method. For periods in which we report a net loss, all potential common shares are considered anti-dilutive and are excluded from calculations of Diluted EPS. For periods in which we report net income, potential common shares with exercise prices in excess of our average common stock fair value for the related period are considered anti-dilutive and are excluded from calculations of Diluted EPS. Recent Accounting Pronouncements In November 2015, the FASB issued Accounting Standards Update ("ASU") 2015-17, Balance Sheet Classification of Deferred Taxes , which simplifies the presentation of deferred tax assets and liabilities by requi |
Acquisitions And New Ventures
Acquisitions And New Ventures | 12 Months Ended |
Dec. 31, 2015 | |
Acquisitions and New Ventures [Abstract] | |
Acquisitions and New Ventures | ACQUISITIONS AND NEW VENTURES California Internet Gaming During May 2015, our Internet real-money gaming operation, I-Gaming, entered into an agreement with a licensed card room operator to provide Internet-based interactive gaming services within California, should enabling legislation be enacted in California which would permit such activities. The term of the agreement commences after enabling legislation and upon the acceptance of the first customer wager and will then continue for a ten -year period. Under the agreement, I-Gaming and the licensed operator will jointly provide a platform for operations, obtain and maintain required licenses and regulatory approvals, and operate Internet-based interactive gaming services that will be marketed to California residents and may include poker and other real-money gaming activities. At this time, it is difficult to assess whether this legislation will be enacted into law, and the effect it would have on our business. Big Fish Games On December 16, 2014, we completed the acquisition of Big Fish Games, a global producer and distributor of social casino, casual and mid-core free-to-play, and premium paid games for PC, Mac and mobile devices. Big Fish Games is headquartered in Seattle, Washington, and has locations in Oakland, California and Luxembourg with approximately 604 employees. We acquired Big Fish Games to leverage its casino and casual game experience, assembled workforce and to position ourselves in the mobile and online game industry. We financed the acquisition with borrowings under our Amended and Restated Credit Agreement (the "Senior Secured Credit Facility") and the addition of a $200 million Term Loan Facility ("Term Loan") to the existing Senior Secured Credit Facility. The purchase price consideration was $838.3 million , composed of $401.7 million in cash, a deferred payment to the founder of Big Fish Games of $85.3 million , payable over three years and recorded at fair value of $78.0 million as of the acquisition date, an estimated payable to the Big Fish Games equity holders related to an income tax refund of $18.1 million and $15.8 million payable in 157,115 shares of our common stock. In addition, we are required to pay additional variable cash consideration based upon the achievement of certain performance milestones of Big Fish Games through December 31, 2015, limited to a maximum of $350 million based on achievement of certain non-GAAP earnings targets before interest and tax. In 2015, Big Fish Games achieved its earnout milestones, and we are committed to paying $281.6 million in 2016 and $68.4 million in 2017. The estimated fair value of the earnout liability at the acquisition date was $324.7 million . We estimated the fair value of the deferred payment and the earnout liability using a discounted cash flows analysis over the period in which the obligation is expected to be settled, and applied a discount rate based on our cost of debt. The cost of debt as of the closing date was based on the observed market yields of our Senior Unsecured Notes issued in December of 2013 and was adjusted for the difference in seniority and term of the deferred payment and the earnout liability. Refer to Note 16—Fair Value of Assets and Liabilities for further discussion of the fair value measurement of the deferred payment and the earnout liability. Goodwill of $540.3 million arising from the acquisition consisted largely of projected future revenue and profit growth, including benefits from Big Fish Games’ expertise in the mobile and online games industry, particularly social casinos. All of the goodwill was assigned to Big Fish Games, which remains a stand-alone business for purposes of segment reporting. None of the goodwill recognized will be deducted for tax purposes. The acquisition of Big Fish Games is included in Acquisition of businesses, net of cash acquired in the investing section of the Consolidated Statements of Cash Flows in the amount of $366.0 million , net of cash acquired of $34.7 million . Included in non-cash investing activities is common stock issued in connection with the acquisition of $15.8 million , earnout liability of $324.7 million , and deferred payments of $97.1 million . Acquisition-related costs in the amount of $6.4 million were charged directly to operations and were included in selling, general and administrative expense in the Consolidated Statements of Comprehensive Income. Acquisition-related costs included legal, advisory, valuation, accounting and other fees incurred to effect the business combination. During 2015, we obtained additional information to assist us in determining the values of the liabilities assumed at the acquisition date and changes which occurred during the measurement period. A measurement period adjustment was recorded related to estimated payroll taxes associated with the earnout liability. We retroactively adjusted the December 31, 2014 Condensed Consolidated Balance Sheet and increased deferred tax assets by $0.8 million , increased goodwill by $1.4 million and increased accrued expense by $2.2 million . We completed our valuation during the fourth quarter of 2015. During 2015, we made payments of $18.7 million to Big Fish Games former equity holders for the receipt of federal and state income tax refunds and working capital adjustments related to the acquisition and we made a scheduled deferred founder payment of $28.4 million . The following table summarizes the final fair value of the assets acquired and liabilities assumed, net of cash acquired of $34.7 million , at the date of acquisition. (in thousands) Total Accounts receivable $ 19,361 Income taxes receivable 18,107 Prepaid expense 9,727 Deferred income taxes 1,682 Other assets 1,780 Property and equipment 14,632 Goodwill 540,306 Other intangible assets 362,863 Total assets acquired 968,458 Accounts payable 9,064 Accrued expense 19,217 Income taxes payable 210 Deferred revenue 37,250 Deferred income taxes 96,238 Other liabilities 2,821 Total liabilities acquired 164,800 Purchase price, net of cash acquired $ 803,658 The final fair value of other intangible assets consists of the following: (in thousands) Fair Value Recognized Weighted-Average Useful Life Tradename $ 200,000 N/A Customer relationships 32,663 3.0 years Developed Technology 87,000 4.0 years In-Process Research & Development 12,700 5.0 years Strategic Developer Relationships 30,500 6.0 years Total intangible assets $ 362,863 We engaged a third-party valuation firm to assist in our analysis of the fair value of tangible and intangible assets acquired. All estimates, key assumptions and forecasts were either provided by or reviewed by us. While we chose to utilize a third-party valuation firm, the fair value analysis and related valuation represents the conclusions of management and not the conclusions of any third party. Depreciation of property and equipment is calculated using the straight-line method over the estimated useful lives of the related assets as follows: 1 to 5 years for computer hardware and software and 2 to 10 years for office furniture, fixtures and equipment. The estimated useful lives for leasehold improvements is 3 to 10 years based on the shorter of the estimated useful life of the improvement or the lease term. The tradename was valued using the relief-from-royalty method of the income approach, which estimates the fair value of the intangible asset by discounting the fair value of the hypothetical royalty payments a market participant would be willing to pay to enjoy the benefits of the asset. A royalty rate of 5.0% was used based on a review of third-party licensing agreements given Big Fish Games’ brand recognition and competitive position in the market. The tradename was assigned an indefinite life based on our intention to keep the Big Fish Games name for an indefinite period of time. In valuing the customer relationships, the replacement cost method of the cost approach was used. The value was determined based on the number of paying customers and average cost per customer. Developed technology was valued using the relief-from-royalty method of the income approach based upon revenue derived from games within the premium paid, casino and casual free-to-play categories. Big Fish Games pays royalties of 10.0% and 25.0% to its developers and these rates were used in the valuation. As of the valuation date, Big Fish Games had a portfolio of free-to-play games expected to launch in 2015 and one game expected to launch in 2016. We estimated that the majority of the revenue associated with games launched in 2015 would be 5 years and the game launched in 2016 would be 6 years. The fair value was calculated using the relief-from-royalty method of the income approach and a royalty rate of 10.0% was used in the valuation. Strategic developers are third-party alliance partners that develop content exclusively for Big Fish Games. In the valuation of strategic developer relationships, the comparative method of the income approach was used to calculate the fair value. In estimating the fair value, the analysis considered the differences in the present value of the cash flows associated with the strategic developers and without the strategic developers. As of the valuation date, the fair value of Big Fish Games’ deferred revenue was $37.3 million , which reflects the costs including network and delivery, royalties, third party platform fees, game operations and corporate expense, plus a market participant margin. During the period from December 16, 2014 through December 31, 2014, Big Fish Games contributed revenue of $13.9 million and loss from continuing operations before provision for income taxes of $2.9 million . Pro Forma Information (unaudited) The following table illustrates the effect on net revenue and earnings from continuing operations as if we had acquired Big Fish Games as of the beginning of 2013. The pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations that would have occurred had the acquisitions of Big Fish Games been consummated at the beginning of 2014 and 2013. In 2013, earnings from continuing operations included $23.1 million of nonrecurring acquisition costs for us and Big Fish Games. (in thousands) Year ended December 31, 2014 2013 Net revenue $ 1,126,592 $ 1,085,518 Earnings from continuing operations $ 64,145 $ 11,182 Saratoga Harness Racing Inc. ("SHRI") Joint Venture In 2014, we entered into a 50% joint venture with SHRI which unsuccessfully bid on the development of a destination casino and resort in the Capital Region of New York. Our remaining investment of $0.8 million , included in other assets on our Consolidated Balance Sheets, reflects our share of land owned by the venture. In 2014, we incurred $1.0 million in equity losses in our Other Investments segment associated with the license application process and funded $3.3 million to the joint venture. As a result of the bid decision, we recorded an impairment loss of $1.6 million to reduce our investment in the joint venture to its fair value. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | DISCONTINUED OPERATIONS Sale of Fight! Magazine On December 16, 2013, we completed the sale of 100% of the assets of Fight! Magazine ("Fight"). Fight is a division of Bluff which was acquired by us in February 2012. Net revenue, operating expense and the loss on sale of Fight for the year ended December 31, 2013, have been reclassified to discontinued operations, net of income taxes, in the Consolidated Statements of Comprehensive Income. Set forth below is a summary of the results of operations of discontinued businesses: (in thousands) 2013 Net revenue $ 632 Operating expense 857 Selling, general and administrative expense — Operating (loss) gain (225 ) Other income (expense) 145 (Loss) earnings from operations before income taxes (80 ) Income tax benefit (provision) 30 (Loss) gain from operations (50 ) Loss on sale of assets, net of income taxes (83 ) Net (loss) gain $ (133 ) |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2015 | |
Accounts Receivable Additional Disclosures [Abstract] | |
Accounts Receivable | ACCOUNTS RECEIVABLE Accounts receivable is comprised of the following: (in thousands) 2015 2014 Trade receivables $ 33,016 $ 33,340 Derby-related receivables 17,638 24,522 Simulcast and ADW receivables 14,753 17,282 Other receivables 6,069 4,992 71,476 80,136 Allowance for doubtful accounts (3,761 ) (4,246 ) Total $ 67,715 $ 75,890 Big Fish Games' accounts receivable was $25.7 million in 2015 and $28.9 million in 2014. These amounts were included within trade receivables and primarily represent amounts due from mobile, retail and publishing partners. We recognized $0.9 million in 2015, $0.7 million in 2014 and $0.5 million in 2013 of bad debt expense in our TwinSpires segment associated with customer wagering on TwinSpires.com; and in 2013, we recognized $2.5 million of bad debt expense associated with the write-off of a receivable related to an Internet gaming license. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | PROPERTY AND EQUIPMENT Property and equipment is comprised of the following: (in thousands) 2015 2014 Grandstands and buildings $ 412,394 $ 439,625 Equipment 252,110 237,867 Tracks and other improvements 142,774 142,975 Land 118,694 118,658 Furniture and fixtures 52,154 49,765 Construction in progress 22,780 15,427 Artwork 2,066 2,050 1,002,972 1,006,367 Accumulated depreciation (429,800 ) (411,052 ) Total $ 573,172 $ 595,315 Depreciation expense was $ 53.6 million in 2015 , $ 55.0 million in 2014 and $ 49.6 million in 2013 and is classified in operating expense in the Consolidated Statements of Comprehensive Income. In 2014, we recognized accelerated depreciation expense of $2.4 million , primarily related to Calder's barns which are not expected to be utilized subsequent to December 31, 2014. On November 4, 2014, we ceased operations of Luckity and recorded an impairment charge of $3.2 million in our TwinSpires segment for property and equipment specifically associated with Luckity. |
Calder Exit Costs
Calder Exit Costs | 12 Months Ended |
Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Calder Exit Costs | CALDER EXIT COSTS On July 1, 2014, we finalized an agreement with The Stronach Group ("TSG") that expires on December 31, 2020 under which we permit TSG to operate and manage Calder's racetrack and certain other racing and training facilities and to provide live horseracing under Calder’s racing permits. During the term of the agreement, TSG pays Calder a racing services fee and is responsible for the direct and indirect costs of maintaining the racing premises, including the training facilities and applicable barns, and TSG receives the associated revenue from the operation. During 2015, we continued our assessment of potential alternative uses of the Calder property that is not associated with the TSG lease agreement. Based on our analysis, we razed the barns that were not associated with the TSG agreement and commenced the demolition of the grandstand and certain ancillary facilities. In 2015, we recognized Calder exit costs of $13.9 million consisting of a non-cash impairment charge of $12.7 million to reduce the net book value of the grandstand assets to zero and $1.2 million for demolition costs related to the removal of the grandstand and the barns and to prepare the stable area for alternate future uses. We expect to obtain operational efficiencies as a result of the demolition including savings in property taxes, repair and maintenance, utilities, permitting and environmental maintenance expenditures. We reclassified $2.3 million of severance and other benefit costs which were previously reported in selling, general and administrative expense in 2014 into Calder exits costs in the Consolidated Statements of Comprehensive Income. |
Investment In and Advances To U
Investment In and Advances To Unconsolidated Affiliates | 12 Months Ended |
Dec. 31, 2015 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
Investments In and Advances to Unconsolidated Affiliates | INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES Miami Valley Gaming Joint Venture During March 2012, we entered into a 50% joint venture with Delaware North Companies Gaming & Entertainment Inc. ("DNC") to develop a new harness racetrack and video lottery terminal ("VLT") gaming facility in Lebanon, Ohio. Through the joint venture agreement, we formed a new company with DNC, MVG, to manage both our and DNC’s interests in the development and operation of the racetrack and VLT gaming facility. On December 21, 2012, MVG completed the purchase of the harness racing licenses and certain assets held by Lebanon Trotting Club Inc. and Miami Valley Trotting Inc. ("MVG Sellers") for total consideration of $60.0 million , of which $10.0 million was funded at closing with the remainder funded through a $50.0 million note payable with a six year term effective upon the commencement of gaming operations. There is a potential contingent consideration payment of $10.0 million based on the financial performance of the facility during the seven -year period after gaming operations commence. On December 12, 2013, the new facility opened in Lebanon, Ohio on a 120 -acre site. The facility includes a 5/8 -mile harness racing track and an 186,000 -square-foot gaming facility with approximately 1,590 VLTs. Since both DNC and ourselves have participating rights over MVG, and both must consent to MVG's operating, investing and financing decisions, we account for MVG using the equity method. Summarized financial information for MVG is comprised of the following: December 31, (in thousands) 2015 2014 Assets Current assets $ 24,502 $ 24,096 Property and equipment, net 119,675 130,868 Other assets, net 106,660 105,906 Total assets $ 250,837 $ 260,870 Liabilities and Members' Equity Current liabilities $ 21,620 $ 16,783 Current portion of long-term debt 8,333 8,332 Long-term debt, excluding current portion 20,520 26,584 Other liabilities 75 75 Members' equity 200,289 209,096 Total liabilities and members' equity $ 250,837 $ 260,870 Years Ended December 31, (in thousands) 2015 2014 2013 Casino revenue $ 130,327 $ 126,374 $ 6,144 Non-casino revenue 6,568 6,257 5,479 Net revenue 136,895 132,631 11,623 Operating and SG&A expense 98,688 97,648 10,926 Depreciation & amortization expense 12,816 12,299 935 Pre-opening expense — 54 7,240 Operating income (loss) 25,391 22,630 (7,478 ) Interest and other expense, net (4,197 ) (4,829 ) (397 ) Net income (loss) $ 21,194 $ 17,801 $ (7,875 ) The joint venture's long-term debt consists of a $50 million secured note payable from MVG to the MVG Sellers payable quarterly over 6 years through August 2019 at a 5.0% interest rate for which it has funded $16.7 million in principal repayments. In 2015 , we received distributions from MVG totaling $15.0 million . Our 50% share of MVG's results has been included in the Consolidated Statements of Comprehensive Income: Years Ended December 31, (in thousands) 2015 2014 2013 Equity in income (losses) of unconsolidated investments $ 10,597 $ 8,900 $ (3,718 ) SHRI Equity Investment On October 2, 2015, we completed the acquisition of a 25% equity investment in SCH which owns Saratoga Casino and Raceway ("Saratoga") in Saratoga Springs, New York, for $24.5 million from SHRI. Saratoga has a casino facility with approximately 1,700 VLTs, a 1/2 -mile harness racetrack with a racing simulcast center, and three dining facilities. Saratoga has a 50% interest in a joint venture with DNC to manage the Gideon Putnam Hotel and Resort. We signed a five-year management agreement with SCH to manage Saratoga for which we receive management fee revenue. Saratoga expects to complete a $40.0 million expansion including a 117 -room hotel, expanding dining facilities and a 3,000 square-foot multi-functional event space in 2016. In addition, SHRI agreed to transfer its controlling interest in Saratoga Casino Black Hawk in Black Hawk, Colorado to SCH upon approval from the Colorado Division of Gaming. When the approval is received and the transfer is completed, we expect to pay the remainder of the purchase price of approximately $6.4 million to SHRI for our pro-rata ownership of the Colorado operations, and we expect to sign a five-year management agreement with SCH to manage Saratoga Casino Black Hawk for which we expect to receive management fee revenue. Our investment in SCH recorded under the equity method included our share of the basis difference between the fair value of property and equipment and definite-lived intangible assets of $3.7 million and $2.7 million , respectively. These basis differences will be charged to expense over the remaining estimated useful lives of the property and equipment and intangible assets and are recorded as a component of equity in income (loss) of unconsolidated investments. Basis differences related to non-depreciable assets, such as land and indefinite lived-intangible assets, are not being amortized. In 2015, we received distributions from SCH of $0.3 million . |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | GOODWILL Goodwill is comprised of the following: (in thousands) Racing Casinos TwinSpires Big Fish Games Other Investments Total Balance as of December 31, 2013 $ 51,659 $ 117,659 $ 127,364 $ — $ 3,934 $ 300,616 Additions — — — 540,331 — 540,331 Balance as of December 31, 2014 51,659 117,659 127,364 540,331 3,934 840,947 Adjustments — — 802 (25 ) — 777 Balance as of December 31, 2015 $ 51,659 $ 117,659 $ 128,166 $ 540,306 $ 3,934 $ 841,724 We performed our annual goodwill impairment analysis for 2015 in accordance with ASU No. 2011-08, Intangibles-Goodwill and Other: Testing Goodwill for Impairment. This analysis included an assessment of quantitative factors to determine whether it is more likely than not that the fair values of the reporting units are less than the carrying amounts. We assessed our goodwill by performing step one fair value calculations on a quantitative basis for each of our reporting units. We concluded that the fair values of our reporting units exceeded the carrying values and therefore step two of the assessment was not required. We concluded that goodwill had not been impaired based on the annual goodwill impairment analysis for 2015 and 2014. |
Other Intangible Assets
Other Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Other Intangible Assets | OTHER INTANGIBLE ASSETS Other intangible assets are comprised of the following: December 31, 2015 December 31, 2014 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Definite-lived intangible assets: Developed technology $ 87,000 $ (23,264 ) $ 63,736 $ 87,000 $ (931 ) $ 86,069 Customer relationships 75,133 (47,149 ) 27,984 89,203 (39,399 ) 49,804 Strategic development 30,500 (6,585 ) 23,915 30,500 (263 ) 30,237 In-process research & development 12,700 (2,622 ) 10,078 12,700 (105 ) 12,595 Favorable contracts 11,000 (5,554 ) 5,446 11,000 (4,907 ) 6,093 Other 3,699 (356 ) 3,343 3,719 (326 ) 3,393 Slots gaming license 2,250 (1,125 ) 1,125 2,250 (1,125 ) 1,125 Table games license 2,493 (310 ) 2,183 2,493 (180 ) 2,313 $ 224,775 $ (86,965 ) $ 137,810 $ 238,865 $ (47,236 ) $ 191,629 Indefinite-lived intangible assets: Trademarks 225,729 225,729 Slots gaming rights 128,890 128,890 Illinois Horseracing Equity Trust 3,307 3,307 Other 417 417 Total $ 496,153 $ 549,972 Amortization expense for definite-lived intangible assets was approximately $56.1 million in 2015, $13.3 million in 2014 and $12.2 million in 2013 and is classified in operating expense. We submitted payments of $2.3 million for 2015 and 2014 for annual license fees for Calder Casino. Payments are being amortized to expense over the annual license period. Indefinite-lived intangible assets consist primarily of state gaming licenses in Maine, Mississippi and Florida, rights to participate in the Horse Racing Equity Fund and trademarks. In 2015, we reduced our customer relationships intangible asset and accumulated amortization for TwinSpires by $14.0 million as this amount was fully amortized. In 2014, we established definite-lived intangible assets of $162.9 million and indefinite-lived intangible assets of $200.0 million related to the Big Fish Games acquisition. We performed our annual indefinite-lived intangible asset impairment analysis for 2015 in accordance with ASU No. 2012-02, Intangibles-Goodwill and Other: Testing Indefinite-Lived Intangible Assets for Impairment. This analysis included an assessment of quantitative factors to determine whether it is more likely than not that the fair values of the indefinite-lived intangible assets are less than the carrying amounts. We assessed our indefinite-lived intangible assets by performing fair value calculations for each of our indefinite-lived intangible assets. We concluded that the fair values of our indefinite-lived intangible assets exceeded the carrying values. Based on the annual indefinite-lived intangible asset impairment analysis for 2015 and 2014, we concluded that indefinite-lived intangible assets had not been impaired. Future estimated aggregate amortization expense on existing definite-lived intangible assets for each of the next five fiscal years is as follows (in thousands): Year Ended December 31, Estimated Amortization Expense 2016 $ 50,687 2017 $ 36,760 2018 $ 18,716 2019 $ 16,638 2020 $ 4,586 Future estimated amortization expense does not include additional payments of $2.3 million in 2016 and in each year thereafter for the ongoing amortization of future expected annual Florida slots gaming license fees not yet incurred or paid. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Components of the provision for income taxes are as follows: Years Ended December 31, (in thousands) 2015 2014 2013 Current provision: Federal $ 46,138 $ 13,236 $ 22,727 State and local 3,822 2,008 2,462 Foreign 376 78 — 50,336 15,322 25,189 Deferred: Federal (1,797 ) 19,672 5,788 State and local 9 81 (504 ) Foreign (1,656 ) (4,914 ) — (3,444 ) 14,839 5,284 $ 46,892 $ 30,161 $ 30,473 Income from continuing operations before provision for income taxes were as follows: Years Ended December 31, (in thousands) 2015 2014 2013 Domestic $ 114,380 $ 76,023 $ 84,742 Foreign (2,291 ) 495 764 $ 112,089 $ 76,518 $ 85,506 Our income tax expense is different from the amount computed by applying the federal statutory income tax rate to income before taxes as follows: Years Ended December 31, (in thousands) 2015 2014 2013 Federal statutory tax on earnings before income taxes $ 39,231 $ 26,782 $ 29,928 State income taxes, net of federal income tax benefit 1,772 1,388 1,514 Non-deductible expense 2,629 999 723 Non-deductible acquisition-related charges 6,567 1,339 — Accruals and settlements related to tax audits 181 529 (395 ) Change in effective state tax rates 93 (401 ) (383 ) Manufacturing deduction (1,960 ) — — Tax credits and incentives (999 ) (1,209 ) (663 ) Other (622 ) 734 (251 ) $ 46,892 $ 30,161 $ 30,473 During 2003, we entered into a Tax Increment Financing ("TIF") Agreement with the Commonwealth of Kentucky. Pursuant to this agreement, we are entitled to receive reimbursement for 80% of the increase in Kentucky income and sales tax resulting from our 2005 renovation of the Churchill Downs facility. We recognized reductions in operating expense of $0.6 million in 2015, $0.6 million in 2014 and $0.8 million in 2013. We recognized reductions to our income tax expense, net of federal taxes, of $0.6 million in 2015, less than $0.1 million in 2014 and $0.3 million in 2013. As of December 31, 2015, we have received $6.4 million of combined benefits and established a sales tax receivable of $1.2 million and an income tax receivable of $0.7 million related to the reimbursement. Components of our deferred tax assets and liabilities are as follows: (in thousands) 2015 2014 Deferred tax assets: Deferred compensation plans $ 34,080 $ 31,520 Deferred income 14,336 752 Allowance for uncollectible receivables 1,251 1,323 Deferred liabilities 1,869 4,625 Net operating losses and credit carryforward 11,680 32,573 Deferred tax assets 63,216 70,793 Valuation allowance (1,052 ) (1,274 ) Net deferred tax asset 62,164 69,519 Deferred tax liabilities: Intangible assets in excess of tax basis 142,970 151,210 Property and equipment in excess of tax basis 31,216 37,827 Other 15,861 11,485 Deferred tax liabilities 190,047 200,522 Net deferred tax liability $ (127,883 ) $ (131,003 ) Income taxes are classified in the balance sheet as follows: Net current deferred tax asset $ — $ 18,519 Net non-current deferred tax liability (127,883 ) (149,522 ) $ (127,883 ) $ (131,003 ) On December 31, 2015, we adopted ASU 2015-17, Balance Sheet Classification of Deferred Taxes and all deferred taxes were prospectively recorded as non-current liabilities. As of December 31, 2015, we have federal net operating losses of $7.0 million which were acquired in conjunction with the acquisitions of Youbet.com. The utilization of these losses, which expire between 2019 and 2030, is limited on an annual basis pursuant to IRC § 382. We believe that we will be able to fully utilize all of these losses. In addition, we have $2.4 million of state net operating losses, $1.3 million of which was acquired in conjunction with the acquisitions of Youbet.com and Big Fish Games. These losses, which expire between 2016 and 2034, may be subject to annual limitations similar to IRC § 382. We have recorded a valuation allowance of $0.6 million against the state net operating losses due to the fact that it is unlikely that we will generate income in certain states which is necessary to utilize the assets. The changes in the valuation allowance for deferred tax assets are as follows: (in thousands) 2015 2014 Balance at beginning of the year $ 1,274 $ 1,213 Charged to costs and expense (313 ) 158 Charged to other accounts 91 (83 ) Deductions — (14 ) Balance at end of the year $ 1,052 $ 1,274 The IRS has audited us through 2012. Subsequent years are open to examination. Big Fish Games was recently notified of an IRS audit for the tax year ended December 16, 2014 which is the last tax year prior to our acquisition of Big Fish Games. As a result of the indemnity provided by the acquisition agreement, any cash liability arising from this audit will be the liability of the prior shareholders of Big Fish Games at the time of the acquisition. However, any audit adjustment impacting post-acquisition tax attributes, such as net operating losses or credits would be our liability. We do not expect this issue to have a material adverse impact on our business. State and local tax years open for examination vary by jurisdiction. As of December 31, 2015, we have approximately $2.5 million of total gross unrecognized tax benefits, excluding interest of less than $0.1 million . Of this amount, $0.9 million was related to tax positions acquired in the Big Fish Games acquisition. If the total gross unrecognized tax benefits were recognized, there would be a $1.9 million effect to the annual effective tax rate and an additional $0.2 million would be reimbursed by the pre-acquisition shareholders of Big Fish Games, in conjunction with a tax indemnity agreement. We anticipate a decrease in our unrecognized tax positions of approximately $0.2 million during the next twelve months primarily due to the expiration of statutes of limitation. During October 2012, we funded a $2.9 million income tax payment to the State of Illinois related to a dispute over state income tax apportionment methodology which was recorded in other assets as a receivable at December 31, 2014. We filed our state income tax returns related to the years 2002 through 2005 following the methodology prescribed by Illinois statute; however the State of Illinois has taken a contrary tax position. We filed a formal protest with the State of Illinois during the fourth quarter of 2012. We won our protest and the state has elected not to appeal the court decision. We received the $2.9 million refund during the third quarter of 2015. The refund did not have an impact on our tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (in thousands) 2015 2014 2013 Balance as of January 1 $ 2,926 $ 582 $ 8,565 Additions for tax positions related to the current year 310 573 190 Additions for tax positions of prior years 302 2,097 207 Reductions for tax positions of prior years (1,018 ) (326 ) (8,380 ) Balance as of December 31 $ 2,520 $ 2,926 $ 582 The decrease in the uncertain tax position during 2015 resulted from the expiration of the statute of limitations on a position that was taken by Big Fish Games prior to our acquisition. The increase in the uncertain tax position during 2014 was primarily related to the acquisition of Big Fish Games. We recognize interest accrued related to unrecognized tax benefits in income tax expense and penalties in selling, general and administrative expense in the Consolidated Statements of Comprehensive Income. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Shareholders' Equity | SHAREHOLDERS’ EQUITY Stock Repurchase Program On April 23, 2013, our Board of Directors authorized the repurchase of up to $100 million of our stock in a stock repurchase program. In 2014, we repurchased 691,000 shares for $61.6 million in a privately negotiated transaction. The shares were retired, and the cost of the shares acquired was treated as a deduction from shareholders' equity. We funded this repurchase using available cash and borrowings under our Senior Secured Credit Facility. On October 28, 2015, our Board of Directors authorized the repurchase of up to $150.0 million of our stock in a stock repurchase program. This amount included and was not in addition to any unspent amounts remaining under the prior authorization which would have expired at the end of 2015. Repurchases may be made at management’s discretion from time to time on the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions. The repurchase program has no time limit and may be suspended for periods or discontinued at any time. On November 19, 2015, we repurchased approximately 945,000 common shares for $138.1 million in a privately negotiated transaction with a related party, The Duchossois Group, our largest shareholder. The aggregate purchase price for the transaction was based on a share price of $146.13 which was the average of the twenty -day trailing closing price for our common stock through November 18, 2015. The shares were retired, and the cost of the shares acquired was treated as a deduction from shareholders' equity. We funded this repurchase using available cash and borrowings under our Senior Secured Credit Facility. On February 24, 2016, our Board of Directors authorized the repurchase of up to $150.0 million of our common stock in a stock repurchase program. The new program replaced the prior $150.0 million plan which was in effect at December 31, 2015 and had unused authorization of $11.9 million . Repurchases may be made at management’s discretion from time to time on the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions. The repurchase program has no time limit and may be suspended for periods or discontinued at any time. Shareholder Rights Plan On March 13, 2008, our Board of Directors approved a shareholder rights plan which granted each shareholder the right, in certain circumstances, to purchase a fraction of a share of Series A Junior Participating Preferred Stock at the rate of one right for each share of our common stock. If a person or group, together with its affiliates and associates, become an acquiring person, defined as the beneficial owner of 15% or more of our common stock, each holder of a right (other than the person or group who has become an acquiring person) will have the right to receive, upon exercise, shares of our common stock having a value equal to two times the exercise price of the right. Certain persons and transactions are exempted from the definition of acquiring person. In the event that, at any time following the date such person or group becomes an acquiring person, (i) we engage in a merger or other business combination transaction in which we are not the surviving corporation (other than with an entity that acquired the shares pursuant to an offer for all outstanding shares of common stock that a majority of the independent directors determines to be fair and not inadequate and to otherwise be in the best interests of us and our shareholders, after receiving advice from one or more investment banking firms (a "Qualifying Offer") ), (ii) we engage in a merger or other business combination transaction (other than with an entity that acquired the shares pursuant to a Qualifying Offer) in which we are the surviving corporation and our common stock is changed or exchanged, or (iii) 50% or more of our assets, cash flow or earnings power is sold or transferred, each holder of a right (other than the person or group who has become an acquiring person) shall thereafter have the right to receive, upon exercise, common stock of the surviving entity having a value equal to two times the exercise price of the right. At any time after a person or group becomes an acquiring person, and prior to the acquisition by such person or group of fifty percent (50)% or more of the outstanding common stock, the Board of Directors may exchange the rights (other than rights owned by such acquiring person), in whole or in part, for common stock at an exchange ratio of one share of common stock, or one one-thousandth of a share of preferred stock (or of a share of a class or series of our preferred stock having equivalent rights, preferences and privileges), per right (subject to adjustment). |
Director and Employee Benefit P
Director and Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Director and Employee Benefit Plans | DIRECTOR AND EMPLOYEE BENEFIT PLANS Directors and Officers Retirement Plan We provide eligible executives and directors an opportunity to defer to a future date the receipt of base and bonus compensation for services as well as director’s fees through the 2005 Deferred Compensation Plan (the "Deferred Plan"). Our matching contribution on base compensation deferral of executives equals the matching contribution of our profit-sharing plan with certain limits. Our directors may elect to invest the deferred director fee compensation into our common stock within the Deferred Plan. Investments in our common stock are credited as hypothetical shares of common stock based on the market price of the stock at the time the compensation was earned. Upon the end of the director's service, common stock shares are issued to the director. Historically, we recognized a liability for the deferred director fee compensation which was invested in hypothetical shares of common stock. In addition, we recognized income or expense within our Corporate operating expense for changes in the fair value of the common stock during each reporting period. During the fourth quarter of 2015, we determined that changes in the fair value of the hypothetical shares should not have been marked-to-market each reporting period, with a corresponding adjustment to operating expense. As such, we recognized a correcting benefit in operating expense of $2.8 million during the three months ended December 31, 2015, which represented the life-to-date appreciation of hypothetical shares from the inception of the Deferred Plan to September 30, 2015. Of that amount, $1.5 million was appreciation which had been previously recognized as expense during 2015. The remaining $1.3 million was previously recognized as an operating expense during the years from 2006 to 2014. We determined that the error was not material to any of our current or prior annual and/or interim period financial statements. Other Retirement Plans We have a profit-sharing plan that covers all employees, other than Big Fish Games employees and others not participating in an associated profit-sharing plan, with three months or more of service. We will match contributions made by employees up to 3% of the employee’s annual compensation and match at 50% contributions made by the employee up to an additional 2% of compensation with certain limits. We may also contribute a discretionary amount determined annually by the Board of Directors as well as a year-end discretionary match not to exceed 4% of compensation. Our cash contribution to the plan was approximately $3.4 million in 2015, $2.5 million in 2014 and $2.3 million in 2013. Big Fish Games has a defined contribution plan that covers all employees and matches employee contributions to the plan at 3% of the employee's annual compensation. We are a member of a noncontributory defined benefit multi-employer retirement plan for all members of the Pari-mutuel Clerk’s Union of Kentucky and several other collectively bargained retirement plans, which are administered by unions. Cash contributions are made in accordance with negotiated labor contracts. Retirement plan expense was $0.6 million in 2015, $0.7 million in 2014 and $0.6 million in 2013. Our policy is to fund this expense as accrued, and we currently estimate that future contributions to these plans will not increase significantly from prior years. |
Total Debt
Total Debt | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Total Debt | TOTAL DEBT The following table presents our total debt outstanding: December 31, 2015 Unamortized Premium, Debt Issuance Costs and Loan Origination Fees (in thousands) Outstanding Principal Premium Issuance Costs and Fees Long-Term Debt, Net Senior Secured Credit Facility: Senior Secured Credit Facility due 2018 $ — $ — $ — $ — Term Loan A due 2019 188,750 — 638 188,112 Swing line of credit — — — — Total Senior Secured Credit Facility 188,750 — 638 188,112 5.375% Senior Unsecured Notes due 2021 600,000 2,978 9,308 593,670 Total debt 788,750 2,978 9,946 781,782 Current maturities of long-term debt 16,250 — — 16,250 Total debt, net of current maturities $ 772,500 $ 2,978 $ 9,946 $ 765,532 December 31, 2014 Unamortized Premium, Debt Issuance Costs and Loan Origination Fees Outstanding Principal Premium Issuance Costs and Fees Long-Term Debt, Net Senior Secured Credit Facility: Senior Secured Credit Facility due 2018 $ 258,000 $ — $ — $ 258,000 Term Loan A due 2019 200,000 — 787 199,213 Swing line of credit 12,355 — — 12,355 Total Senior Secured Credit Facility 470,355 — 787 469,568 5.375% Senior Unsecured Notes due 2021 300,000 — 5,464 294,536 Total debt 770,355 — 6,251 764,104 Current maturities of long-term debt 11,250 — — 11,250 Total debt, net of current maturities $ 759,105 $ — $ 6,251 $ 752,854 Senior Secured Credit Facility On February 17, 2016, we entered into an amendment to our Fourth Amended and Restated Credit Agreement (the "New Agreement") which amends certain provisions of the credit agreement including extending the maturity of both the Senior Secured Credit Facility and the Term Loan (collectively the "Facilities") through February 2021, coterminous with one another. Refer to Note 23 Subsequent Event of the Notes to Consolidated Financial Statements for information regarding the execution of the New Agreement. On December 1, 2014, we executed the Fourth Amended and Restated Credit Agreement (the "Senior Secured Credit Facility") whereby we added a $200 million Term Loan Facility ("Term Loan") to the existing Senior Secured Credit Facility and amended certain definitions and provisions of the credit agreement including Consolidated Funded Indebtedness, EBITDA and calculation of the Total Leverage Ratio. We incurred loan origination fees of $0.9 million in connection with this amendment, which were incurred and are being amortized as interest expense over the remaining term of the Senior Secured Credit Facility. At December 31, 2015, the Senior Secured Credit Facility was set to mature on May 17, 2018. The Term Loan was set to mature on December 1, 2019; however, in the event the Senior Secured Credit Facility had not, prior to May 17, 2018, been extended to a maturity date of December 1, 2019, the Term Loan was set to mature on May 17, 2018. Following the execution of the New Agreement, the new maturity date for both Facilities is February 17, 2021. Regarding the Term Loan, we were required to make quarterly principal payments that commenced on March 31, 2015, per the amortization schedule laid out in the Fourth Amended and Restated Credit Agreement. Upon the execution of the New Agreement, the amortization schedule was modified based on $188.8 million outstanding Term Loan balance. Payments are set to occur on the last day of each quarter through the new maturity date with annual paydown requirements of 5% , 7.5% , 10% , 12.5% , 15% and a bullet payment due at maturity. The new amortization schedule calls for quarterly principal payments of $2.4 million to commence on March 31, 2016 and increase in increments of $1.2 million on March 31 of each year to reach final year quarterly payment amounts of $7.1 million . If no additional payments are made, the balance due at termination will be $94.4 million . Generally, borrowings made pursuant to the Senior Secured Credit Facility bear interest at a LIBOR -based rate per annum plus an applicable percentage ranging from 1.125% to 3.0% depending on our total leverage ratio. In addition, under the Senior Secured Credit Facility, we agreed to pay a commitment fee at rates that range from 0.175% to 0.45% of the available aggregate commitment, depending on our leverage ratio. The Term Loan is not subject to, nor included in the calculation of, the commitment fee. The weighted average interest rate on outstanding borrowings was 1.73% at December 31, 2015 and 2.19% at December 31, 2014. The Senior Secured Credit Facility contains customary affirmative and negative covenants for credit facilities of this type, including limitations on us and our subsidiaries with respect to indebtedness, restricted payments, liens, investments, mergers and acquisitions, disposition of assets, sale-leaseback transactions and transactions with affiliates. The covenants permit us to use proceeds of the credit extended under the agreement for general corporate purposes, restricted payments and acquisition needs. The Senior Secured Credit Facility also contains financial covenants that require us (i) to maintain an interest coverage ratio (i.e., consolidated adjusted EBITDA to consolidated interest expense) that is greater than 3.0 to 1.0; (ii) not to permit the total leverage ratio (i.e., total consolidated funded indebtedness to consolidated adjusted EBITDA) to be greater than 4.5 to 1.0, provided that if a certain minimum consolidated adjusted EBITDA is reached then the total leverage ratio will be increased to 5.0 to 1.0 for such periods that the minimum is maintained; and (iii) not to permit the senior secured leverage ratio (i.e. senior secured consolidated funded indebtedness to consolidated adjusted EBITDA) to be greater than 3.5 to 1.0. As of December 31, 2015, we were in compliance with all covenants under the Senior Secured Credit Facility, and substantially all of our assets continue to be pledged as collateral under the Senior Secured Credit Facility. On December 31, 2015, we had $492.1 million of borrowing capacity under the Senior Secured Credit Facility. 5.375% Senior Unsecured Notes On December 16, 2013, we completed an offering of $300 million in aggregate principal amount of 5.375% Senior Unsecured Notes that mature on December 15, 2021 (the "Initial Senior Unsecured Notes" or the "Existing Notes"). The Initial Senior Unsecured Notes were issued at par, with interest payable on June 15 th and December 15 th of each year. We received net proceeds of $295 million , after deducting underwriting fees, and used the net proceeds from the offering to repay a portion of our outstanding borrowings, and accrued and unpaid interest outstanding under our (then) Third Amended and Restated Credit Agreement ("Senior Secured Credit Facility"). In connection with the issuance, we capitalized $6.3 million of debt issuance costs which are being amortized as interest expense over the remaining term of the Initial Senior Unsecured Notes. On December 16, 2015, we completed an additional offering of $300 million in aggregate principal amount of 5.375% Senior Unsecured Notes that mature on December 15, 2021 (the "Tack-on Notes"). The Tack-on Notes were issued under the December 16, 2013 indenture governing the $300 million Existing Notes, and form a part of the same series as the Existing Notes for purposes of the indenture. The Tack-on Notes were issued at 101% with interest payable on June 15 th and December 15 th of each year. We received net proceeds of $299 million , after deducting underwriting fees, and used the net proceeds from the offering to repay its outstanding revolver borrowings along with accrued and unpaid interest outstanding under its Fourth Amended and Restated Credit Agreement ("Senior Secured Credit Facility). In connection with the issuance, we capitalized $4.7 million of debt issuance costs which are being amortized as interest expense over the remaining term of the Tack-on Notes. Upon completion of this Tack-on Notes offering, the aggregate principal amount of the outstanding notes under this series is $600 million (collectively the "Senior Unsecured Notes.") The Tack-on Notes were offered with different CUSIP and ISIN numbers from the Existing Notes and as a result thereof, will not trade fungibly until they have been assigned the same CUSIP and ISIN numbers. It is expected that the Tack-on Notes will be exchanged into the unrestricted CUSIP and ISIN numbers currently assigned to the Existing Notes one year from the date of issuance. Both series of the Senior Unsecured Notes were issued in private offerings that were exempt from registration under the Securities Act of 1933, as amended, and are senior unsecured obligations. The total Senior Unsecured Notes are guaranteed by each of our domestic subsidiaries that guarantee our Senior Secured Credit Facility and will rank equally with our existing and future senior obligations. At any time prior to December 15, 2016, we may redeem all or part of the total Senior Unsecured Notes at a price equal to 100% of the principal amount of the notes redeemed plus a "make-whole" premium, together with accrued and unpaid interest and additional interest, if any, to the redemption date. On or after December 15, 2016, we may redeem all or part of the Senior Unsecured Notes at a redemption price of 104.0% which gradually reduces to par by 2019. In accordance with ASU 2015-03, Imputation of Interest - Simplifying the Presentation of Debt Issuance Costs, as of December 31, 2015 and 2014, we presented the debt issuance costs and loan origination costs on the balance sheet as a direct deduction from the carrying value of the debt liability. Future aggregate maturities of total debt are as follows (in thousands): Year Ended December 31, 2016 $ 9,437 2017 14,156 2018 18,876 2019 23,594 2020 28,312 Thereafter 694,375 Total $ 788,750 |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
Operating Leases | OPERATING LEASES Future minimum operating lease payments, in non-cancelable leases, are as follows, not including the variable portion of contingent leases: Year Ended December 31, (in thousands) 2016 $ 13,534 2017 11,005 2018 5,412 2019 2,758 2020 1,975 Thereafter 2,485 Total $ 37,169 We also lease totalisator equipment, audio/visual equipment and operate certain facilities that are partially contingent on handle revenue, bandwidth usage or race days. Total annual rent expense for contingent lease payments, including totalisator equipment, audio/visual equipment, land and facilities, was approximately $3.5 million in 2015, $3.6 million in 2014 and $3.7 million in 2013 . Our total rent expense for all operating leases, including the contingent lease payments, was $25.4 million in 2015, $20.2 million in 2014 and $20.2 million in 2013 . During 2015, the increase in total rent expense primarily reflects a full year of Big Fish Games lease expense. In 2002, as part of financing improvements to the Churchill Downs facility, we transferred title of the Churchill Downs facility to the City of Louisville, Kentucky and leased back the facility. Subject to the terms of the lease, we can re-acquire the facility at any time for $1.00 . |
Stock-Based Compensation Plans
Stock-Based Compensation Plans | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation Plans | STOCK-BASED COMPENSATION PLANS On December 31, 2015, we have stock-based employee compensation plans as described below. Our total compensation expense, which includes expense related to restricted stock awards, restricted stock unit awards, restricted performance units awards, stock option awards, and stock options associated with our employee stock purchase plan was $13.8 million in 2015, $11.9 million in 2014 and $21.5 million in 2013. Retirement of Executive Chairman of the Board of Directors Our former Executive Chairman of the Board of Directors and Chief Executive Officer, Robert L. Evans, retired effective September 30, 2015. Mr. Evans continues as our non-executive Chairman of the Board. In conjunction with Mr. Evans' retirement, we amended his previous Change in Control, Severance, and Indemnity Agreement and upon his retirement, we accelerated vesting on 29,218 shares of restricted stock which were previously awarded and recognized compensation expense of $1.3 million in 2015 for the acceleration of the restricted stock awards. Employee Stock Options We award stock compensation under the Churchill Downs Incorporated 2007 Omnibus Stock Incentive Plan (the "2007 Incentive Plan"). The 2007 Incentive Plan provides that the exercise price of any incentive stock option may not be less than the fair market value of the common stock on the date of grant. Outstanding stock options under the 2007 Incentive Plan have contractual terms of ten years and generally vest ratably on each anniversary of the grant date over a three year period. Activity for our stock options outstanding is presented below: (in thousands, except per average exercise price) Number of Shares Under Option Weighted Average Exercise Price Balance as of December 31, 2012 201 $ 36.30 Granted — $ — Exercises (7 ) $ 42.94 Canceled/forfeited (1 ) $ 36.12 Balance as of December 31, 2013 193 $ 36.04 Granted — $ — Exercises (182 ) $ 35.26 Canceled/forfeited (1 ) $ 49.95 Balance as of December 31, 2014 10 $ 48.63 Granted — $ — Exercises (1 ) $ 49.95 Canceled/forfeited — $ — Balance as of December 31, 2015 9 $ 48.37 During 2014, Mr. Evans, our non-executive Chairman of the Board of Directors, exercised options for 180,000 shares of our common stock which were granted at $35.19 per share, for common stock prices ranging from $85.00 to $91.33 per share. On December 31, 2015, all outstanding options were vested and exercisable. The following table summarizes information about stock options outstanding on December 31, 2015: (in thousands, except contractual life and per share data) Shares Under Option Remaining Contractual Life Average Exercise Price Per Share Intrinsic Value per Share (1) Aggregate Intrinsic Value Options exercisable and vested at December 31, 2015 9 2.3 $ 48.37 $ 93.12 $ 800 (1) Computed based upon the amount by which the fair market value of our common stock on December 31, 2015 of $141.49 per share exceeded the weighted average exercise price. The total intrinsic value of stock options exercised was $0.1 million in 2015, $9.6 million in 2014 and $0.3 million in 2013. Cash received from stock option exercises totaled $0.1 million in 2015, $6.4 million in 2014 and $0.3 million in 2013. On December 31, 2014, there were 10 thousand options exercisable with a weighted average exercise price of $48.63 . Restricted Shares and Restricted Stock Units The 2007 Incentive Plan permits the award of restricted shares or restricted stock units to directors and key employees, including our officers who are from time to time responsible for the management, growth and protection of our business. Restricted shares granted under the 2007 Incentive Plan generally vest in full three years from the date of grant or upon retirement at or after age 60. The fair value of restricted shares under 2007 Incentive Plan is determined by the product of the number of shares granted and the grant date market price of our common stock, discounted to consider the fact that dividends are not paid on these shares. 2015 Awards On September 22, 2015, the Board of Directors approved the adoption of the Executive Long-Term Incentive Compensation Plan (the "ELTI Plan"), pursuant to which certain named executive officers ("NEOs") and other key executives ("Grantees") may earn variable equity payouts based upon us achieving certain key performance metrics over a 30 -month period ending December 31, 2017, and fixed equity payouts over service periods ending December 31, 2016 and December 31, 2017. The ELTI Plan was adopted pursuant to the Churchill Downs Incorporated 2007 Omnibus Stock Incentive Plan (the "New Company LTIP"), which was previously approved by our shareholders. As a way to continue to encourage innovation, an entrepreneurial approach, and careful risk assessment, and in order to retain key executives, the ELTI Plan and New Company LTIP offer long-term incentive compensation to our NEOs and Grantees as further described in our Schedule14A Proxy Statement filed on March 23, 2015. During 2015, NEOs and Grantees received 22,142 restricted stock units ("RSU") vesting equally over two service periods ending December 31, 2016 and December 31, 2017, and 27,282 performance share units ("PSU") with vesting contingent on financial performance measures at the end of a 30 -month performance period ending December 31, 2017. The performance criteria for the PSUs consists of the following financial measures during the performance period: (i) cumulative Adjusted EBITDA; (ii) cumulative free cash flow; and (iii) our relative total shareholder return ("TSR"). Our TSR will be ranked versus the companies in the Russell 2000 index and will be calculated based on our relative placement against the Russell 2000 index. Measurement against these criteria will be determined against a payout curve which provides a maximum number of performance share units of 250% of the original award. The total compensation cost we will recognize under the PSUs will be based upon the results of the two financial measures. In 2015, we recognized compensation expense of $0.9 million related to the RSU and PSU awards. On December 31, 2015, unrecognized compensation expense attributable to unvested RSU and PSU awards was $2.5 million and $3.8 million , respectively, and the weighted average period over which we expect to recognize the compensation expense approximates 18 months and 24 months, respectively. Other Awards In 2015, NEOs, Grantees and certain other employees received approximately 167,800 restricted shares of our common stock vesting over service periods ranging from seven months to three years. In 2015, we recognized $6.2 million of compensation expense related to these awards. On December 31, 2015, unrecognized compensation expense attributable to unvested service period awards was $9.7 million . The weighted average period over which we expect to recognize the remaining compensation expense under the service period awards approximates 23 months. In 2013, NEOs and the Grantees received 92,000 restricted shares of our common stock vesting over approximately four years and 324,000 restricted shares of common stock with vesting contingent upon the common stock reaching certain closing prices on NASDAQ for twenty consecutive trading days. In 2013, 2014 and 2015, we achieved the twenty consecutive trading days closing price stock requirement for the entire 324,000 contingently vesting restricted shares. In 2015, we recognized compensation expense of $1.9 million related to the 2013 New Company LTIP, $1.3 million for the accelerated vesting of restricted stock upon the retirement of our prior chief executive officer and $2.9 million for all other stock-based compensation. There is $0.8 million of unrecognized expense under the service period vesting awards and no remaining unrecognized expense under the market condition awards. Activity for the ELTI Plan, the 2013 New Company LTIP, the 2007 Incentive Plan and awards made outside of stock-based compensation plans is presented below: Market Condition & Performance-Based Awards Service Period Awards Total (in thousands, except grant date values) Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Balance as of December 31, 2012 60 $ 45.90 319 $ 42.42 379 $ 42.97 Granted 324 $ 53.71 287 $ 67.55 611 $ 60.21 Vested (60 ) $ 45.90 (256 ) $ 59.54 (316 ) $ 53.90 Canceled/forfeited — $ — (1 ) $ 38.75 (1 ) $ 38.75 Balance as of December 31, 2013 324 $ 53.71 349 $ 53.58 673 $ 53.64 Granted — $ — 26 $ 88.58 26 $ 88.58 Vested (239 ) $ 53.49 (107 ) $ 54.15 (346 ) $ 53.70 Canceled/forfeited — $ — (12 ) $ 60.41 (12 ) $ 60.41 Balance as of December 31, 2014 85 $ 54.32 256 $ 56.24 341 $ 55.77 Granted 27 $ 154.90 190 $ 102.09 217 $ 108.73 Vested (85 ) $ 48.31 (150 ) $ 64.87 (235 ) $ 58.91 Canceled/forfeited — $ — (9 ) $ 93.04 (9 ) $ 93.04 Balance as of December 31, 2015 27 $ 154.90 287 $ 80.90 314 $ 87.31 On December 31, 2015, there was $16.0 million of unrecognized stock-based compensation expense related to nonvested restricted share, RSU and PSU awards that we expect to recognize over a weighted average period of 1.9 years. On December 31, 2015, NEOs and Grantees held 27,282 restricted shares subject to performance-based vesting criteria (all of which are considered performance based restricted shares), which were issued during the year ended December 31, 2015. The number of these shares that vest is based upon established performance-based performance targets that will be assessed on an ongoing basis. Employee Stock Purchase Plan Under the Employee Stock Purchase Plan (the "ESP Plan"), we are authorized to sell, pursuant to short-term stock options, shares of our common stock to our full-time and qualifying part-time employees at a discount from our common stock’s fair market value. The ESP Plan operates on the basis of recurring, consecutive one-year periods. Each period commences on August 1 and ends on the following July 31. Each August 1, we offer eligible employees the opportunity to purchase common stock. Employees who elect to participate for each period have a designated percentage of their after-tax compensation withheld and applied to the purchase of shares of common stock on the last day of the period, July 31. The ESP Plan allows withdrawals, terminations and reductions on the amounts being deducted. The purchase price for the common stock is 85% of the lesser of the fair market value of the common stock on (i) the first day of the period, or (ii) the last day of the period. No employee may purchase common stock under the ESP Plan valued at more than $25 thousand for each calendar year. In 2015, employees purchased approximately fifteen thousand shares of common stock pursuant to options granted on August 1, 2014, and exercised on July 31, 2015. Because the plan year overlaps our fiscal year, the number of shares to be sold pursuant to options granted on August 1, 2015, can only be estimated because the 2015 plan year is not yet complete. Our estimate of options granted in 2015 under the ESP Plan is based on the number of shares sold to employees under the ESP Plan for the 2014 plan year, adjusted to reflect the change in the number of employees participating in the ESP Plan in 2015. We recognized compensation expense related to the ESP Plan of $0.6 million 2015 and $0.4 million in each of 2014 and 2013. |
Fair Value Of Assets And Liabil
Fair Value Of Assets And Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Of Assets And Liabilities | FAIR VALUE OF ASSETS AND LIABILITIES We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The following tables present our assets and liabilities measured at fair value on a recurring basis: (in thousands) December 31, 2015 Level 1 Level 3 Cash equivalents and restricted cash $ 30,072 $ — Big Fish Games deferred payments — 54,720 Big Fish Games earnout liability — 345,200 Bluff contingent consideration liability — 2,331 Total $ 30,072 $ 402,251 December 31, 2014 Level 1 Level 3 Cash equivalents and restricted cash $ 27,464 $ — Big Fish Games deferred payments — 78,800 Big Fish Games earnout liability — 327,800 Bluff contingent consideration liability — 2,331 Total $ 27,464 408,931 The following table presents the change in fair value of our Level 3: (in thousands) Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Big Fish Games Deferred Payments Big Fish Games Earnout Liability Bluff Contingent Consideration Total Balance as of December 31, 2014 $ 78,800 $ 327,800 $ 2,331 $ 408,931 Payments (28,428 ) — — (28,428 ) Change in fair value 4,348 17,400 — 21,748 Balance as of December 31, 2015 $ 54,720 $ 345,200 $ 2,331 $ 402,251 Our cash equivalents and restricted cash, which are held in interest-bearing accounts, qualify for Level 1 in the fair value hierarchy which includes unadjusted quoted market prices in active markets for identical assets. We estimated the fair value of the Big Fish Games deferred payment and earnout liability as of December 31, 2015 using a discounted cash flows analysis over the period in which the obligation is expected to be settled, and applied a discount rate of 2.8% based on our cost of debt. The cost of debt was based on the observed market yields of our Senior Unsecured Notes, a Level 3 fair value measurement, and was adjusted for the difference in seniority and term of the deferred payments and earnout liability. The increase in fair values of the Big Fish Games deferred payment and earnout liability of $21.7 million in 2015 was recorded as acquisition-related charges in the Consolidated Statements of Comprehensive Income. In December 2015, we made our first deferred founder’s payment totaling $28.4 million . Changes to our cost of debt could lead to a different fair value estimate for the deferred payments and earnout liability. A one-percentage point change in the discount rate would increase or decrease the fair value of the Big Fish Games deferred payment and earnout liability by $2.5 million . Our accrued liability for a contingent consideration recorded in conjunction with the Bluff acquisition was based on significant inputs not observed in the market and represent a Level 3 fair value measurement. The estimate of the contingent consideration liability uses an income approach and is based on the probability of achieving enabling legislation which permits Internet poker gaming and the probability-weighted discounted cash flows. Any change in the fair value of the Bluff contingent consideration subsequent to the acquisition date will be recognized in our Consolidated Statements of Comprehensive Income. We currently have no other assets or liabilities subject to fair value measurement on a recurring basis. Our $600 million par value Senior Unsecured Notes are disclosed at fair value which is based on unadjusted quoted prices for similar liabilities in markets that are not active. The fair value of the Senior Unsecured Notes was $604.1 million at December 31, 2015 and $299.3 million at December 31, 2014. The following methods and assumptions were used in estimating our fair value disclosures for financial instruments: Cash Equivalents—The carrying amount reported in the balance sheet for cash equivalents approximates our fair value due to the short-term maturity of these instruments. Long-Term Debt: Senior Secured Credit Facility—The carrying amounts of the borrowings under the Senior Secured Credit Facility approximate fair value, based upon current interest rates and represent a Level 2 fair value measurement. We did not measure any assets at fair value on a non-recurring basis for 2014 and 2015. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | CONTINGENCIES We are involved in litigation arising in the ordinary course of conducting business. We carry insurance for general liability and workers' compensation claims from our employees, independent contractors, customers and guests. We are self-insured up to an aggregate stop loss for our general liability and workers' compensation coverages. We review all litigation on an ongoing basis when making accrual and disclosure decisions. For certain legal proceedings, we cannot reasonably estimate losses or a range of loss, if any, particularly for proceedings that are in the early stages of development or where the plaintiffs seek indeterminate damages. Various factors, including, but not limited to, the outcome of potentially lengthy discovery and the resolution of important factual questions, may need to be determined before probability can be established or before a loss or range of loss can be reasonably estimated. In accordance with current accounting standards for loss contingencies and based upon information currently known to us, we establish reserves for litigation when it is probable that a loss associated with a claim or proceeding has been incurred and the amount of the loss or range of loss can be reasonably estimated. When no amount within the range of loss is a better estimate than any other amount, we accrue the minimum amount of the estimable loss. To the extent that such litigation against us may have an exposure to a loss in excess of the amount we have accrued, we believe that such excess would not be material to our consolidated financial condition, results of operations, or cash flows. Legal fees are expensed as incurred. If the loss contingency in question is not both probable and reasonably estimable, we do not establish an accrual and the matter will continue to be monitored for any developments that would make the loss contingency both probable and reasonably estimable. In the event that a legal proceeding results in a substantial judgment against, or settlement by us, there can be no assurance that any resulting liability or financial commitment would not have a material adverse impact on our business. |
Net Income Per Common Share Com
Net Income Per Common Share Computations | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share Computations | NET INCOME PER COMMON SHARE COMPUTATIONS The following is a reconciliation of the numerator and denominator of the net income per common share computations: (in thousands, except per share data) Year Ended December 31, 2015 2014 2013 Numerator for basic income from continuing operations per common share: Income from continuing operations $ 65,197 $ 46,357 $ 55,033 Income from continuing operations allocated to participating securities (595 ) (267 ) (873 ) Numerator for basic income from continuing operations per common share $ 64,602 $ 46,090 $ 54,160 Numerator for basic income per common share: Net income $ 65,197 $ 46,357 $ 54,900 Net income allocated to participating securities (595 ) (267 ) (870 ) Numerator for basic net income per common share $ 64,602 $ 46,090 $ 54,030 Numerator for diluted income from continuing operations per common share: $ 65,197 $ 46,357 $ 55,033 Numerator for diluted income per common share $ 65,197 $ 46,357 $ 54,900 Denominator for net income per common share: Basic 17,225 17,271 17,294 Plus dilutive effect of stock options and restricted stock 121 153 248 Plus dilutive effect of participating securities 230 165 396 Diluted 17,576 17,589 17,938 Income (loss) per common share: Basic Income from continuing operations $ 3.75 $ 2.67 $ 3.13 Discontinued operations — — (0.01 ) Net income $ 3.75 $ 2.67 $ 3.12 Diluted Income from continuing operations $ 3.71 $ 2.64 $ 3.07 Discontinued operations — — (0.01 ) Net income $ 3.71 $ 2.64 $ 3.06 |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION We manage our operations through six operating segments: Racing, Casinos, TwinSpires, Big Fish Games, Other Investments and Corporate. Eliminations include the elimination of intersegment transactions. Our chief operating decision maker utilizes Adjusted EBITDA to evaluate segment performance, develop strategy and allocate resources. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, adjusted for the following: Adjusted EBITDA includes: • Changes in Big Fish Games deferred revenue; • 50% of the operating income or loss of our joint venture, MVG; • 25% of the operating income from our Saratoga Casino Holdings LLC ("SCH") equity investment; and • Intercompany revenue and expense totals that are eliminated in the Consolidated Statements of Comprehensive Income Adjusted EBITDA excludes: • Big Fish Games adjustments which include: ◦ Acquisition-related charges, including the change in fair value of the Big Fish Games earnout and deferred consideration liability recorded each reporting period; and ◦ Transaction expense, including legal, accounting, and other deal-related expense • Stock-based compensation expense; • Miami Valley Gaming, LLC ("MVG") interest expense, net; • Calder exit costs; and • Other charges and recoveries. On January 1, 2014, we reclassified our equity investment in MVG from Other Investments to Casinos, to coincide with the first full period of operations for the venture. MVG's results of operations for the year ended December 31, 2013 have been reclassified to the Casinos segment. As of December 31, 2015, we have identified Corporate as its own operating segment and have retrospectively adjusted segment disclosures for prior periods to reflect this reclassification. We utilize the Adjusted EBITDA metric because we believe the inclusion or exclusion of certain recurring items is necessary to provide a more accurate measure of our core operating results and enables 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 U.S. GAAP. Our calculation of Adjusted EBITDA may be different from the calculation used by other companies and, therefore, comparability may be limited. The table below presents net revenue from external customers and intercompany revenue from each of our operating segments: Year Ended December 31, (in thousands) 2015 2014 2013 Net revenue from external customers: Racing: Churchill Downs $ 151,125 $ 143,191 $ 132,845 Arlington 54,405 60,312 64,483 Fair Grounds 40,343 38,625 40,677 Calder 2,730 19,325 36,264 Total Racing 248,603 261,453 274,269 Casinos: Oxford Casino 80,405 76,526 34,350 Riverwalk Casino 49,758 50,139 53,645 Harlow’s Casino 48,978 50,199 52,440 Calder Casino 77,421 77,003 78,951 Fair Grounds Slots 38,408 40,774 42,156 VSI 36,913 33,653 35,634 Saratoga 416 — — Total Casinos 332,299 328,294 297,176 TwinSpires 200,168 190,333 184,541 Big Fish Games: Casino 193,428 7,627 — Casual free-to-play 125,321 2,098 — Premium 94,936 4,130 — Total Big Fish Games 413,685 13,855 — Other Investments 16,636 17,125 21,899 Corporate 910 1,158 1,143 Net revenue from external customers $ 1,212,301 $ 812,218 $ 779,028 Intercompany net revenue: Racing: Churchill Downs $ 7,832 $ 7,038 $ 6,686 Arlington 5,063 5,767 3,395 Fair Grounds 1,306 1,089 1,151 Calder — 707 1,263 Total Racing 14,201 14,601 12,495 TwinSpires 1,032 958 853 Other Investments 3,532 4,130 4,409 Eliminations (18,765 ) (19,689 ) (17,757 ) Net revenue $ — $ — $ — Year Ended December 31, (in thousands) 2015 2014 2013 Reconciliation of segment Adjusted EBITDA to comprehensive income: Racing $ 71,841 $ 61,160 $ 50,275 Casinos 108,516 101,106 80,631 TwinSpires 51,533 45,282 49,122 Big Fish Games 108,018 3,837 — Other Investments (37 ) (3,857 ) 809 Corporate (4,253 ) (5,037 ) (4,606 ) Total segment Adjusted EBITDA 335,618 202,491 176,231 Change in Big Fish Games deferred revenue (39,554 ) (4,497 ) — Big Fish Games adjustments (21,748 ) (10,193 ) — Stock-based compensation expense (13,849 ) (11,931 ) (21,482 ) MVG interest expense, net (2,098 ) (2,546 ) (170 ) Calder exit costs (13,854 ) (2,298 ) — Other charges and recoveries, net 5,833 (5,429 ) (1,204 ) Depreciation and amortization (109,706 ) (68,257 ) (61,750 ) Interest income (expense), net (28,553 ) (20,822 ) (6,119 ) Income tax provision (46,892 ) (30,161 ) (30,473 ) Net income from continuing operations 65,197 46,357 55,033 Discontinued operations, net of income taxes — — (133 ) Net income 65,197 46,357 54,900 Foreign currency translation, net of tax (463 ) (125 ) — Comprehensive income $ 64,734 $ 46,232 $ 54,900 The table below presents information about equity in income (losses) of unconsolidated investments included in our reported segments: Year Ended December 31, (in thousands) 2015 2014 2013 Casinos $ 10,929 $ 8,900 $ (3,718 ) TwinSpires — (68 ) (848 ) Other Investments 251 (2,504 ) 424 $ 11,180 $ 6,328 $ (4,142 ) The table below presents total asset information for each of our operating segments: As of December 31, (in thousands) 2015 2014 Total assets: Racing $ 437,070 $ 456,034 Casinos 631,280 621,489 TwinSpires 177,624 178,694 Big Fish Games 947,112 996,918 Other Investments 37,033 34,083 Corporate 47,325 69,035 $ 2,277,444 $ 2,356,253 The table below presents capital expenditures for each of our operating segments: Year Ended December 31, (in thousands) 2015 2014 2013 Capital expenditures, net: Racing $ 12,280 $ 33,919 $ 20,184 Casinos 18,784 7,715 13,643 TwinSpires 4,306 5,778 5,908 Big Fish Games 6,431 116 — Other Investments 809 5,240 8,375 Corporate 900 1,718 661 $ 43,510 $ 54,486 $ 48,771 |
HRTV Equity Investment Divestit
HRTV Equity Investment Divestiture | 12 Months Ended |
Dec. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
HRTV Equity Investment Divestiture | HRTV EQUITY INVESTMENT DIVESTITURE As part of the TSG agreement related to the cessation of Calder pari-mutuel operations in 2014, we modified our HRTV, LLC ("HRTV") operating and ownership agreement with TSG resulting in the divestiture of our interest in HRTV effective January 2, 2015. In January 2015, we received $6.0 million in proceeds from the sale of the ownership interest and we recorded a gain of $5.8 million in our Other Investments segment, which has been excluded from Segment Adjusted EBITDA and is included in other charges and recoveries in the reconciliation of Segment Adjusted EBITDA to comprehensive income. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Directors and employees may from time to time own or have interests in horses racing at our racetracks. All such races are conducted, as applicable, under the regulations of each state’s respective regulatory agency, and no director receives any extra or special benefit with regard to having his or her horses selected to run in races or in connection with the actual running of races. There is no material financial statement impact attributable to directors who may have interests in horses racing at our racetracks. In the ordinary course of business, we may enter into transactions with certain of our officers and directors for the sale of personal seat licenses and suite accommodations at its racetracks, and tickets for its live racing events. We believe that each such transaction has been on terms no less favorable for us than could have been obtained in a transaction with a third party, and no such person received any extra or special benefit in connection with such transactions. On November 19, 2015, we repurchased approximately 945,000 common shares for $138.1 million in a privately negotiated transaction with a related party, The Duchossois Group, our largest shareholder. The aggregate purchase price for the transaction was based on a share price of $146.13 , which was the average of the twenty -day trailing closing price for our common stock through November 18, 2015. The shares were retired, and the cost of the shares acquired was treated as a deduction from shareholders' equity. We funded this repurchase using available cash and borrowings under our Senior Secured Credit Facility. |
HRE Trust Fund Proceeds
HRE Trust Fund Proceeds | 12 Months Ended |
Dec. 31, 2015 | |
HRE Trust Fund Proceeds [Abstract] | |
HRE Trust Fund Proceeds | HRE TRUST FUND PROCEEDS Under legislation enacted in 1999, the HRE Trust Fund was scheduled to receive amounts equal to 15% of the adjusted gross receipts generated by a tenth riverboat casino license to be granted in Illinois. The funds were to be distributed to racetracks in Illinois for purses as well as racetrack discretionary spending. During December 2008, the Illinois Gaming Board awarded the tenth riverboat license to a casino in Des Plaines, Illinois. This casino opened during July 2011, entitling the Illinois racing industry to receive an amount equal to 15% of the adjusted gross receipts of this casino from the gaming taxes generated by that casino, once the accumulated funds were appropriated by the state. On July 10, 2013, the Governor of Illinois signed Illinois House Bill 214 into law, providing for the release of $23.0 million of funds collected from the tenth riverboat licensee since its opening during 2011. In 2013, Arlington received $7.9 million as its share of the proceeds, of which $3.6 million was designated for Arlington purses. The remaining $4.2 million was recognized as miscellaneous other income in our Consolidated Statements of Comprehensive Income in 2013. No additional proceeds related to future funds of the tenth riverboat are expected to be distributed to Illinois racetracks under the provisions of House Bill 214. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On February 17, 2016, we entered into an amendment to the Fourth Amended and Restated Credit Agreement which amends certain provisions of the credit agreement including extending the maturity of both the Senior Secured Credit Facility and the Term Loan (collectively the "Facilities") through February 2021, coterminous with one another. The maximum aggregate commitment for the Senior Secured Credit Facility remains at $500 million and the unamortized Term Loan of $188.75 million was refinanced as part of this amendment and restatement. On February 24, 2016, our Board of Directors authorized the repurchase of up to $150.0 million of our common stock in a stock repurchase program. The new program replaced the prior $150.0 million plan which was in effect at December 31, 2015 and which had unused authorization of $11.9 million . Repurchases may be made at management’s discretion from time to time on the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions. The repurchase program has no time limit and may be suspended for periods or discontinued at any time. |
Quarterly Results of Operations
Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results of Operations (Unaudited) | QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (in thousands, except per common share data) For the Year Ended December 31, 2015 First Quarter Second Quarter Third Quarter Fourth Quarter (1) Net revenue $ 250,910 $ 409,239 $ 279,765 $ 272,387 (Loss) income from operations (1,558 ) 55,044 4,203 7,508 Basic net (loss) income per common share $ (0.09 ) $ 3.12 $ 0.24 $ 0.44 Diluted net (loss) income per common share $ (0.09 ) $ 3.10 $ 0.24 $ 0.43 (in thousands, except per common share data) For the Year Ended December 31, 2014 First Quarter Second Quarter Third Quarter Fourth Quarter Net revenue $ 167,141 $ 303,472 $ 173,483 $ 168,122 (Loss) income from operations (700 ) 57,333 3,531 (13,807 ) Basic net (loss) income per common share $ (0.04 ) $ 3.23 $ 0.21 $ (0.81 ) Diluted net (loss) income per common share $ (0.04 ) $ 3.21 $ 0.20 $ (0.81 ) (1) Refer to Note 12—Director and Employee Benefit Plans for discussion of an out of period adjustment during the fourth quarter of 2015. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | CHURCHILL DOWNS INCORPORATED SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS Balance Beginning of Year Acquired Balances Charged to Expense Deductions Balance End of Year Allowance for doubtful accounts: 2015 $ 4,246 $ — $ 1,265 $ (1,750 ) $ 3,761 2014 $ 4,338 $ — $ 1,710 $ (1,802 ) $ 4,246 2013 $ 1,885 $ — $ 3,785 $ (1,332 ) $ 4,338 Balance Beginning of Year Additions Deductions Balance End of Year Deferred income tax asset valuation allowance: 2015 $ 1,274 $ (222 ) $ — $ 1,052 2014 $ 1,213 $ 75 $ (14 ) $ 1,274 2013 $ 1,334 $ 168 $ (289 ) $ 1,213 |
Basis Of Presentation and Sum33
Basis Of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of presentation | Our financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("U.S. GAAP") and are based upon certain critical accounting policies. Nature of Operations Churchill Downs Incorporated (the "Company", "we", "us", "our") is one of the world's largest producers and distributors of online and mobile casual games. We are also a diversified provider of casino gaming, online account wagering on horse racing, and pari-mutuel horse racing. The accompanying consolidated financial statements include the accounts of our wholly-owned subsidiaries consisting of Churchill Downs Racetrack, LLC ("Churchill Downs"); Arlington International Race Course, LLC ("Arlington"); Churchill Downs Louisiana Horseracing Company, LLC ("Fair Grounds Slots" and "Fair Grounds"); Calder Race Course, Inc. and Tropical Park, Inc. ("Calder"); BB Development, LLC ("Oxford"); Magnolia Hill, LLC ("Riverwalk"); SW Gaming, LLC ("Harlow’s"); Video Services, LLC ("VSI"); Churchill Downs Technology Initiatives Company ("CDTIC"), the owner and operator of TwinSpires; Velocity Wagering Limited ("Velocity"); Big Fish Games, Inc. ("Big Fish Games"); Churchill Downs Interactive Gaming ("I-Gaming"); United Tote Company, Inc. ("United Tote") and Bluff Media ("Bluff"). In addition, we include our 50% joint venture in Miami Valley Gaming LLC ("MVG") and our 25% investment in Saratoga Casino Holding, LLC ("SCH"). All intercompany balances and transactions have been eliminated in consolidation. The Consolidated Statements of Comprehensive Income include net revenue and operating expense associated with our Racing, Casinos, TwinSpires, Big Fish Games, Other Investments and Corporate operating segments which are defined as follows: Racing: primarily commissions earned on wagering at our racetracks, off-track betting facilities ("OTBs"), simulcast fees earned from other wagering sites, and the operations include ancillary admissions, sponsorships and licensing rights, food and beverage services and alternative uses of our pari-mutuel facilities. Casinos: slot machines, table games, video poker ancillary food and beverage services and hotel and other miscellaneous operations. In addition, we include our 50% joint venture in MVG and our 25% equity investment in SCH. TwinSpires: Advance Deposit Wagering ("ADW") business from wagering through the Internet, telephone or other mobile devices on pari-mutuel events; high dollar wagering by international customers; and horseracing statistical data generated by our information business that provides data information and processing services to the equine industry. Big Fish Games: social casino, casual and mid-core free to play, and premium paid games for PC, Mac, and mobile devices. Other Investments: pari-mutuel wagering systems for racetracks and an Internet real-money gaming operation. Corporate: other revenue and general and administrative expense not allocated to our other operating segments. |
Reclassifications | Reclassifications We have reclassified certain items in the Consolidated Financial Statements for prior years to be comparable with 2015 classifications. In 2015, prior year amounts for severance and employee benefit costs of $2.3 million related to the cessation of Calder pari-mutuel operations have been reclassified from selling, general and administrative expense to Calder exit costs on our Consolidated Statement of Comprehensive Income. During the year ended December 31, 2013, we completed the sale of 100% of the assets of Fight! Magazine ("Fight"), a division of Bluff which we acquired in February 2012. Net revenue, operating expense and the loss on the sale of Fight for the year ended December 31, 2013 have been reclassified to discontinued operations on our Consolidated Statements of Comprehensive Income. There was no impact from these reclassifications on net income or cash flows. |
Use of estimates | These policies may require management to make estimates, judgments and assumptions that we believe are reasonable based on our historical experience, contract terms, observance of known trends in our Company and the industry as a whole and information available from other outside sources. Our estimates affect the reported amounts of assets and liabilities and related disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results may differ from those initial estimates. Our most critical estimates relate to revenue recognition, goodwill and other intangible assets, property and equipment, and income taxes. |
Revenue Recognition | Revenue Recognition Racing and TwinSpires Revenue Recognition Our Racing and TwinSpires revenue and income are influenced by our racing calendar. Therefore, revenue and operating results for any interim quarter are not generally indicative of the revenue and operating results for the year and may not be comparable with results for the corresponding period of the previous year. We historically have had fewer live racing days during the first quarter of each year, and the majority of our live racing revenue occurs during the second quarter with the running of the Kentucky Oaks and Kentucky Derby. Pari-mutuel revenue is recognized upon occurrence of the live race that is presented for wagering and after that live race is made official by the respective state’s racing regulatory body. Other operating revenue from admissions, programs and concession are recognized once delivery of the product or services has occurred. Racing and TwinSpires revenue is generated by pari-mutuel wagering on live and simulcast racing content. Live racing handle includes patron wagers made on live races at our racetracks and also wagers made on imported simulcast signals by patrons at our racetracks during live meets. Import simulcasting handle includes wagers on imported signals at our racetracks when the respective tracks are not conducting live racing meets, at our OTBs and through our ADW providers throughout the year. Export handle includes all patron wagers made on live racing signals sent to other tracks, OTBs and ADW providers. Advance deposit wagering consists of patron wagers through an advance deposit account. The gross percentages earned in 2015 approximated 19% of handle for the TwinSpires segment and 11% of handle for the Racing segment. Casinos Revenue Recognition Casino revenue represents net casino wins which is the difference between casino wins and losses. Other operating revenue, such as concession revenue, is recognized once delivery of the product or service has occurred. Big Fish Games Big Fish Games revenue is primarily derived from the sale of in-app purchases within our free-to-play games and sales of our premium paid games. We offer social casino and casual and mid-core free-to-play games that customers can play at no cost. Customers can purchase virtual currency that can be used to buy virtual items to enhance the game playing experience. These games are distributed primarily through third party mobile platform providers, including but not limited to, Apple and Google. We receive and utilize reports from these third party mobile platform providers which break down the virtual goods purchased in our casual mid-core and casino free-to-play games for a given time period. The proceeds from the sale of virtual goods are initially recorded as deferred revenue and recognized as revenue when persuasive evidence of an arrangement exists, the service has been provided to the user, the price paid by the user is fixed or determinable, and collectability is reasonably assured. Determining whether and when some of these criteria have been satisfied requires judgments that may have a significant impact on the timing and amount of revenue we report in each period. For the purpose of determining when the service has been provided to the player, we have determined that an implied obligation exists to the paying user to continue to make available the purchased virtual goods within the game over the estimated life of the virtual goods. For casino games, the life of the virtual goods is estimated to be the time period over which virtual goods are consumed, approximating three days. For all other casual games, the average playing period of paying players of approximately four months represents our best estimate of the average life of virtual goods. The proceeds from the sale of virtual goods are recorded as deferred revenue and recognized as revenue over the estimated life of the virtual goods. Premium game revenue is derived from our PC subscription business, the Big Fish Game Club, and from the sale of individual games on PC, Mac and mobile devices. Subscribers receive a game credit each month with their subscription. The value of the game credit is recognized when a customer redeems the game credit. We record breakage revenue related to outstanding premium game credits. For credits that are subject to expiration, breakage revenue is recorded when the credits have legally expired. Breakage revenue is recorded for game credits with no legal expiration when we have determined the likelihood of redemption is remote based on historical game credit redemption patterns. Other Estimates and Judgments We estimate revenue from digital storefronts, such as Apple and Google, in the current period when reasonable estimates of these amounts can be made. The digital storefronts provide reliable interim preliminary sales reporting data within a reasonable time frame following the end of each month, which, when validated against our internal data, allows us to make reasonable estimates of revenue and therefore to recognize revenue during the reporting period. Determination of the appropriate amount of revenue recognized involves judgments and estimates that we believe are reasonable, but it is possible that actual results may differ from our estimates. When we receive the final reports, to the extent not received within a reasonable time frame following the end of each month, we record any differences between estimated revenue and actual revenue in the reporting period when we determine the actual amounts. Historically, the revenue on the final revenue report has not differed significantly from the reported revenue for the period. Principal Agent Considerations In accordance with Accounting Standards Codification ("ASC"), we evaluate our digital storefront agreements in order to determine whether or not we are acting as the principal or as an agent when selling our games, which we consider in determining if revenue should be reported gross or net. We primarily use digital storefronts for distributing our casino and casual free-to-play games. Key indicators that we evaluate in order to reach this determination include: • the terms and conditions of our contracts with the digital storefronts; • the party responsible for billing and collecting fees from the end-users, including the resolution of billing disputes; • whether we are paid a fixed percentage of the arrangement’s consideration or a fixed fee for each game; • the party which sets the pricing with the end-user, has the credit risk and provides customer support; and • the party responsible for the fulfillment of the game and that determines the specifications of the game. Based on the evaluation of the above indicators, we have determined that we are generally acting as a principal and are the primary obligor to end-users for games distributed through digital storefronts; and therefore, we recognize revenue related to these arrangements on a gross basis. |
Deferred revenue | Deferred revenue includes advance sales related to the Kentucky Oaks and Kentucky Derby races and other advance billings on racing events. Revenue from these advance billings are recognized when the related event occurs. Deferred revenue also includes advance sales of Personal Seat Licenses ("PSLs") and luxury suites. PSLs represent the ownership of a specific seat for the Kentucky Oaks, Kentucky Derby and Breeders’ Cup races at Churchill Downs and have a contractual life of either one , two , three , five or thirty years. Revenue from PSLs is recognized when the Kentucky Oaks, Kentucky Derby and Breeders’ Cup races occur on a ratable basis over the term of the contract. Luxury suites are sold for specific racing events as well as for a predetermined contractual term. Revenue related to the sale of luxury suites is recognized as they are utilized when the related event occurs. |
Goodwill and Indefinite Intangible Assets | Goodwill and Indefinite Intangible Assets We perform an annual review for impairment of goodwill and indefinite-lived intangible assets as of March 31 of each fiscal year, or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. Adverse industry or economic trends, lower projections of profitability, or a sustained decline in our market capitalization, among other items, may be indications of potential impairment issues, which are triggering events requiring the testing of an asset’s carrying value for recoverability. Goodwill is allocated and evaluated for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. Goodwill and intangible assets can or may be required to be tested using a two-step impairment test. We assess qualitative factors to determine whether it is necessary to complete the two-step impairment test using a more likely than not criteria. If an entity believes it is more likely than not that the fair value of a reporting unit is greater than its carrying value, including goodwill, the two-step process can be bypassed. Qualitative factors include macroeconomic conditions, industry and market conditions, cost factors, overall financial performance, among others. These factors require significant judgments and estimates, and application of alternative assumptions could produce significantly different results. Evaluations of possible impairment utilizing the two-step approach require us to estimate, among other factors, forecasts of future operating results, revenue growth, EBITDA margin, tax rates, capital expenditures, depreciation, working capital, weighted average cost of capital, long-term growth rates, risk premiums, terminal values and fair market values of our reporting units and assets. Changes in estimates or the application of alternative assumptions could produce significantly different results. We completed step one of the two-step test during the first quarter of 2015, and there were no impairments to our goodwill in 2015. Our slots gaming rights and casinos' trade names are considered indefinite-lived intangible assets that do not require amortization based on our future expectations to operate our gaming facilities and use the trade names indefinitely and our historical experience in renewing these intangible assets at minimal cost with various state gaming commissions. Our Big Fish Games trade name is also considered an indefinite-lived intangible asset. These indefinite intangible assets are tested annually, or more frequently, if indicators of impairment exist, by comparing the fair value of the recorded assets to their carrying amount. If the carrying amount of the slots gaming rights and trade name intangible assets exceed fair value, an impairment loss is recognized. There were no impairments to our indefinite-lived intangible assets in 2015. |
Property and Equipment | Property and Equipment We have a significant investment in long-lived property and equipment. Property and equipment are recorded at cost. Judgments are made in determining the estimated useful lives of assets, the salvage values to be assigned to assets and if or when an asset has been impaired. The accuracy of these estimates affects the amount of depreciation expense recognized in the financial results and whether to record a gain or loss on disposition of an asset. We review the carrying value of our property and equipment used in our operations whenever events or circumstances indicate that the carrying value of an asset may not be recoverable from estimated future undiscounted cash flows expected to result from its use and eventual disposition. Adverse industry or economic trends, lower projections of profitability, or a significant adverse change in legal factors or in the business climate, among other items, may be indications of potential impairment issues. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, an impairment is recorded based on the fair value of the asset. There are three generally accepted approaches available in developing an opinion of value: 1) the cost approach which is the price a prudent investor would pay to produce or construct a similar new item; 2) the market approach which is typically used for land valuations by analyzing recent sales transactions of similar sites; and 3) the income approach which is based on a discounted cash flow model using the estimated future results of the relevant reporting unit discounted using our weighted-average cost of capital and market indicators of terminal year free cash flow multiples. If necessary, we solicit third-party valuation expertise to assist in the valuation of our assets. We apply the most indicative approach to the overall valuation, or in some cases, a weighted analysis of any or all of these methods. The determination of fair value uses accounting judgments and estimates, including market conditions, and the reliability is dependent upon the availability and comparability of the market data uncovered, as well as the decision making criteria used by marketing participants when evaluating a property. Changes in estimates or application of alternative assumptions could produce significantly different results. In 2015, we recorded a $12.7 million impairment charge related to the Calder grandstand in continuing operations. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets as follows: 10 to 40 years for grandstands and buildings, 2 to 10 years for equipment, 2 to 10 years for furniture and fixtures and 10 to 20 years for tracks and other improvements. |
Income Taxes | Income Taxes We use estimates and judgments for financial reporting to determine our current tax liability and deferred taxes. In accordance with the liability method of accounting for income taxes, we recognize the amount of taxes payable or refundable for the current year and deferred tax assets and liabilities for the future tax consequences of events that have been recognized in the consolidated financial statements or tax returns. Adjustments to deferred taxes are determined based upon the changes in differences between the book basis and tax basis of our assets and liabilities and measured by enacted tax rates we estimate will be applicable when these differences are expected to reverse. Changes in current tax laws, enacted tax rates or the estimated level of taxable income or non-deductible expense could change the valuation of deferred tax assets and liabilities and affect the overall effective tax rate and tax provision. When tax returns are filed, it is highly certain that some positions taken will be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that will be ultimately sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with the tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits in the accompanying balance sheet, along with any associated interest and penalties that would be payable to the taxing authorities upon examination. |
Cash and Cash Equivalents | Cash and Cash Equivalents We consider investments with original maturities of three months or less to be cash equivalents. We have, from time to time, cash in the bank in excess of federally insured limits. Checks issued but not presented to banks frequently result in overdraft balances for accounting purposes and are classified as a current liability in the Consolidated Balance Sheets. |
Restricted Cash | Restricted cash represents amounts due to horsemen for purses, stakes and awards as well as customer deposits collected for advance deposit wagering. |
Account Wagering Deposit Liabilities | Account wagering deposit liabilities consist of deposits received from TwinSpires.com and Velocity customers to be used to fund wagering through the TwinSpires players' accounts. |
Foreign Currency Transactions | Foreign Currency Transactions The functional currency of our international subsidiaries is the U.S. dollar, with the exception of the Big Fish Games Luxembourg subsidiary, whose functional currency is the Euro. For subsidiaries with a functional currency of the U.S. dollar, foreign currency denominated monetary assets and liabilities are remeasured into U.S. dollars at current exchange rates and foreign currency denominated nonmonetary assets and liabilities are remeasured into U.S. dollars at historical exchange rates. Foreign currency denominated revenue and expense are remeasured at historical exchange rates. Gains or losses from foreign currency remeasurement are included in other income and expense. For the Luxembourg subsidiary, assets and liabilities are translated into U.S. dollars using exchange rates in effect at the end of a reporting period. Income and expense accounts are translated into U.S. dollars using average rates of exchange. The net gain or loss resulting from translation is recorded as foreign currency translation adjustment and included in accumulated other comprehensive income in shareholders' equity. |
Allowance for Doubtful Accounts Receivable | Allowance for Doubtful Accounts Receivable We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. The allowance is maintained at a level considered appropriate based on historical and other factors that affect collectability. Uncollectible accounts receivable are written off against the allowance for doubtful accounts receivable when management determines that the probability of payment is remote and collection efforts have ceased. |
Game Technology and Rights | Game Technology and Rights Game technology and rights are purchased from third-party developers of casual and mid-core free-to-play and premium paid games. Such rights may be purchased before or after the production or launch of the related games. Where technology and rights are purchased prior to a games' launch, we generally pay amounts to these developers as they reach agreed-upon milestones. Once the game is launched, we amortize our game technology and rights related to premium paid games on an accelerated basis, corresponding to historical sales patterns, over the estimated useful life of the premium paid game, which is generally one year. Game technology and rights related to casual and mid-core free-to-play games are amortized on a straight-line basis over the estimated useful life of eighteen months. The carrying amounts of game technology and rights are assessed for potential impairment at the game-specific level when facts and circumstances indicate that the carrying amount may not be recoverable. |
Internal Use Software | Internal Use Software and Research & Development We capitalize internal use software in accordance with accounting guidance governing computer software developed or obtained for internal use primarily related to TwinSpires and I-Gaming of approximately $8.9 million in 2015, $7.4 million in 2014 and $7.4 million in 2013. The estimated useful life of capitalized software is generally three years, once a project has commenced. We incurred amortization expense of approximately $7.0 million in 2015, $6.0 million in 2014 and $5.1 million in 2013 for projects which had been placed in service. Capitalized internal use software is included in property and equipment, net. |
Research & Development | Research & development expenditures are expensed as incurred. |
Long-lived Assets-Impairments | Long-lived Assets-Impairments In the event that facts and circumstances indicate that the carrying amount of tangible assets and other long-lived assets or groups of assets may be impaired, an evaluation of recoverability is performed. If an evaluation is required, the estimated future undiscounted cash flows associated with the assets is compared to the assets’ carrying amount to determine if an impairment loss should be recorded. The impairment loss is based on the excess, if any, of the carrying value over the fair value of the assets. |
Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities We adhere to a hierarchy for ranking the quality and reliability of the information used to determine fair values. Assets and liabilities that are carried at fair value are classified and disclosed in one of the following three categories: Level 1: Unadjusted quoted market prices in active markets for identical assets or liabilities; Level 2: Unadjusted quoted prices in active markets for similar assets or liabilities, unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability; and Level 3: Unobservable inputs for the asset or liability. We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. |
Investments in and Advances to Unconsolidated Affiliates | Investments in and Advances to Unconsolidated Affiliates We have investments in unconsolidated affiliates accounted for under the equity method. Under the equity method, carrying value is adjusted for our share of the investees' income and losses, amortization of certain basis differences as well as capital contributions to and distributions from these companies. Distributions in excess of equity method income are recognized as a return of investment and recorded as investing cash inflows in the consolidated statements of cash flows. We classify income and losses as well as gains and impairments related to our investments in unconsolidated affiliates as a component of other income (expense). We evaluate our investments in unconsolidated affiliates for impairment whenever events or changes in circumstances indicate that the carrying value of the investment may have experienced an "other-than-temporary" decline in value. If such conditions exist, we compare the estimated fair value of the investment to its carrying value to determine if an impairment is indicated and determine whether the impairment is "other-than-temporary" based on an assessment of all relevant factors, including consideration of our intent and ability to retain our investment until the recovery of the unrealized loss. We estimate fair value using a discounted cash flow analysis based on estimated future results of the investee. |
Debt Issuance Costs and Loan Origination Fees | Debt Issuance Costs and Loan Origination Fees We incurred debt issuance costs and loan origination fees associated with our long-term debt and notes payable, which are being amortized as interest expense over the remaining term of the credit facility. These amounts are presented as a direct deduction from the carrying amount of the associated liability. |
Casino and Pari-mutuel Taxes | Casino and Pari-mutuel Taxes We recognize casino and pari-mutuel tax expense based on the statutorily required percentage of revenue that is required to be paid to state and local jurisdictions in the states in which wagering occurs. Individual states and local jurisdictions set tax rates which range from 1.5% to 46% of net casino revenue and from 0.5% to 10.0% of the total pari-mutuel handle wagered by patrons. |
Purse Expense | Purse Expense We recognize purse expense based on the statutorily determined percentage of revenue that is required to be paid out in the form of purses to the qualifying finishers of horseraces run at our racetracks in the period in which wagering occurs. We incur a liability for all unpaid purses to be paid out. We may pay out purses in excess of statutorily required amounts resulting in purse overpayments, which are expensed as incurred. Recoveries of purse overpayments are recognized in the period they are realized. |
Self-Insurance Accruals | Self-insurance Accruals We are self-insured up to certain limits for costs associated with general liability, workers’ compensation and employee health coverage, and we purchase insurance for claims that exceed our self-insurance retention or deductible levels. We record self-insurance reserves that include accruals of estimated settlements for known claims ("Case Reserves"), as well as accruals of third-party actuarial estimates for claims incurred but not yet reported ("IBNR"). Case Reserves represent estimated liabilities for unpaid losses, based on a claims administrator's estimates of future payments on individual reported claims, including allocated loss adjustment expense, which generally include claims settlement costs such as legal fees. IBNR includes the provision for unreported claims, changes in case reserves and future payments on reopened claims. Key variables and assumptions include, but are not limited to, loss development factors and trend factors such as changes in workers' compensation laws, medical care costs and wages. These loss development factors and trend factors are developed using our actual historical losses. It is possible that reasonable alternative selections would produce materially different reserve estimates. We believe the estimates of future liability are reasonable based upon this methodology; however, changes in key variables and assumptions, or generally in health care costs, accident frequency and severity could materially affect the estimate for these reserves. |
Advertising | Advertising and Marketing We expense the costs of general advertising, marketing and associated promotional expenditures at the time the costs are incurred. |
Stock-Based Compensation | Stock-Based Compensation All stock-based payments to employees, including grants of employee stock options and restricted stock, are recognized as compensation expense over the service period based on the fair value on the date of grant. |
Computation of Net Income per Common Share | Computation of Net Income per Common Share Net income per common share is presented for both basic earnings per common share ("Basic EPS") and diluted earnings per common share ("Diluted EPS"). Earnings attributable to securities that are deemed to be participating securities are excluded from the calculation of Basic EPS using the two-class method. We have determined that employee restricted stock grants, including awards granted under our long-term incentive plans, are participating securities. Basic EPS is based upon the weighted average number of common shares outstanding during the period, excluding unvested restricted stock and stock options held by employees. Diluted EPS is based upon the weighted average number of common and potential common shares outstanding during the period. Potential common shares result from the assumed exercise of outstanding stock options as well as unvested restricted stock, the proceeds of which are then assumed to have been used to repurchase outstanding common stock using the treasury stock method. For periods in which we report a net loss, all potential common shares are considered anti-dilutive and are excluded from calculations of Diluted EPS. For periods in which we report net income, potential common shares with exercise prices in excess of our average common stock fair value for the related period are considered anti-dilutive and are excluded from calculations of Diluted EPS. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2015, the FASB issued Accounting Standards Update ("ASU") 2015-17, Balance Sheet Classification of Deferred Taxes , which simplifies the presentation of deferred tax assets and liabilities by requiring the deferred tax assets and liabilities be presented as non-current on the balance sheet. We early adopted this guidance, prospectively, as of January 1, 2015. In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement Period Adjustments , which requires companies to recognize adjustments to provisional amounts associated with an acquisition that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. Prior to the issuance of the standard, adjustments were required to be retrospectively presented in the balance sheet at the acquisition date. We adopted the new standard as of September 30, 2015, and it did not have a material impact on our business. In August 2015, the FASB issued ASU No. 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements , which confirms that an entity should continue to present fees related to line-of-credit arrangements as an asset, and amortized over the term of the line-of-credit arrangement. In April 2015, the FASB issued ASU No. 2015-03, Imputation of Interest - Simplifying the Presentation of Debt Issuance Costs which established that debt issuance costs related to term loans and long-term debt issuances should be presented as a direct deduction from the carrying amount of the associated debt liability. We early adopted both of these pronouncements on a retrospective basis as of December 31, 2015 and reclassified $6.3 million of such costs from other non-current assets to long-term debt and notes payable, net, as of December 31, 2014. In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern , which explicitly requires management to assess an entity's ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. Management will be required to assess, in each interim and annual period, if there is substantial doubt of an entity's ability to continue as a going concern as evidenced by relevant known or knowable conditions including an entity's ability to meet its future obligations. Management will be required to provide disclosures regardless of whether substantial doubt is alleviated by management's plans. The guidance will become effective for annual fiscal periods ending after December 15, 2016. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue in a manner that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The revised guidance will become effective for annual periods beginning after December 15, 2017 and will be applied retrospectively to each period presented or as a cumulative- effect adjustment as of the date of adoption. We are assessing the impact of the new accounting guidance and currently cannot estimate the financial statement impact of adoption. |
Acquisitions And New Ventures (
Acquisitions And New Ventures (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Acquisition [Line Items] | |
Business Acquisition, Pro Forma Information | Pro Forma Information (unaudited) The following table illustrates the effect on net revenue and earnings from continuing operations as if we had acquired Big Fish Games as of the beginning of 2013. The pro forma results have been prepared for comparative purposes only and do not purport to be indicative of the results of operations that would have occurred had the acquisitions of Big Fish Games been consummated at the beginning of 2014 and 2013. In 2013, earnings from continuing operations included $23.1 million of nonrecurring acquisition costs for us and Big Fish Games. (in thousands) Year ended December 31, 2014 2013 Net revenue $ 1,126,592 $ 1,085,518 Earnings from continuing operations $ 64,145 $ 11,182 |
Big Fish Games | |
Business Acquisition [Line Items] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the final fair value of the assets acquired and liabilities assumed, net of cash acquired of $34.7 million , at the date of acquisition. (in thousands) Total Accounts receivable $ 19,361 Income taxes receivable 18,107 Prepaid expense 9,727 Deferred income taxes 1,682 Other assets 1,780 Property and equipment 14,632 Goodwill 540,306 Other intangible assets 362,863 Total assets acquired 968,458 Accounts payable 9,064 Accrued expense 19,217 Income taxes payable 210 Deferred revenue 37,250 Deferred income taxes 96,238 Other liabilities 2,821 Total liabilities acquired 164,800 Purchase price, net of cash acquired $ 803,658 |
Schedule of Intangible Assets Acquired as Part of Business Combination | The final fair value of other intangible assets consists of the following: (in thousands) Fair Value Recognized Weighted-Average Useful Life Tradename $ 200,000 N/A Customer relationships 32,663 3.0 years Developed Technology 87,000 4.0 years In-Process Research & Development 12,700 5.0 years Strategic Developer Relationships 30,500 6.0 years Total intangible assets $ 362,863 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Results of Operations of Discontinued Businesses | Set forth below is a summary of the results of operations of discontinued businesses: (in thousands) 2013 Net revenue $ 632 Operating expense 857 Selling, general and administrative expense — Operating (loss) gain (225 ) Other income (expense) 145 (Loss) earnings from operations before income taxes (80 ) Income tax benefit (provision) 30 (Loss) gain from operations (50 ) Loss on sale of assets, net of income taxes (83 ) Net (loss) gain $ (133 ) |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounts Receivable Additional Disclosures [Abstract] | |
Schedule of Accounts Receivable | Accounts receivable is comprised of the following: (in thousands) 2015 2014 Trade receivables $ 33,016 $ 33,340 Derby-related receivables 17,638 24,522 Simulcast and ADW receivables 14,753 17,282 Other receivables 6,069 4,992 71,476 80,136 Allowance for doubtful accounts (3,761 ) (4,246 ) Total $ 67,715 $ 75,890 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment is comprised of the following: (in thousands) 2015 2014 Grandstands and buildings $ 412,394 $ 439,625 Equipment 252,110 237,867 Tracks and other improvements 142,774 142,975 Land 118,694 118,658 Furniture and fixtures 52,154 49,765 Construction in progress 22,780 15,427 Artwork 2,066 2,050 1,002,972 1,006,367 Accumulated depreciation (429,800 ) (411,052 ) Total $ 573,172 $ 595,315 |
Investment In and Advances To38
Investment In and Advances To Unconsolidated Affiliates (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
Affiliate Balance Sheet | Summarized financial information for MVG is comprised of the following: December 31, (in thousands) 2015 2014 Assets Current assets $ 24,502 $ 24,096 Property and equipment, net 119,675 130,868 Other assets, net 106,660 105,906 Total assets $ 250,837 $ 260,870 Liabilities and Members' Equity Current liabilities $ 21,620 $ 16,783 Current portion of long-term debt 8,333 8,332 Long-term debt, excluding current portion 20,520 26,584 Other liabilities 75 75 Members' equity 200,289 209,096 Total liabilities and members' equity $ 250,837 $ 260,870 |
Affiliate Income Statement | Years Ended December 31, (in thousands) 2015 2014 2013 Casino revenue $ 130,327 $ 126,374 $ 6,144 Non-casino revenue 6,568 6,257 5,479 Net revenue 136,895 132,631 11,623 Operating and SG&A expense 98,688 97,648 10,926 Depreciation & amortization expense 12,816 12,299 935 Pre-opening expense — 54 7,240 Operating income (loss) 25,391 22,630 (7,478 ) Interest and other expense, net (4,197 ) (4,829 ) (397 ) Net income (loss) $ 21,194 $ 17,801 $ (7,875 ) |
Investments in and Advances to Affiliates | Our 50% share of MVG's results has been included in the Consolidated Statements of Comprehensive Income: Years Ended December 31, (in thousands) 2015 2014 2013 Equity in income (losses) of unconsolidated investments $ 10,597 $ 8,900 $ (3,718 ) |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill is comprised of the following: (in thousands) Racing Casinos TwinSpires Big Fish Games Other Investments Total Balance as of December 31, 2013 $ 51,659 $ 117,659 $ 127,364 $ — $ 3,934 $ 300,616 Additions — — — 540,331 — 540,331 Balance as of December 31, 2014 51,659 117,659 127,364 540,331 3,934 840,947 Adjustments — — 802 (25 ) — 777 Balance as of December 31, 2015 $ 51,659 $ 117,659 $ 128,166 $ 540,306 $ 3,934 $ 841,724 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
Schedule of Other Intangible Assets | Other intangible assets are comprised of the following: December 31, 2015 December 31, 2014 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Definite-lived intangible assets: Developed technology $ 87,000 $ (23,264 ) $ 63,736 $ 87,000 $ (931 ) $ 86,069 Customer relationships 75,133 (47,149 ) 27,984 89,203 (39,399 ) 49,804 Strategic development 30,500 (6,585 ) 23,915 30,500 (263 ) 30,237 In-process research & development 12,700 (2,622 ) 10,078 12,700 (105 ) 12,595 Favorable contracts 11,000 (5,554 ) 5,446 11,000 (4,907 ) 6,093 Other 3,699 (356 ) 3,343 3,719 (326 ) 3,393 Slots gaming license 2,250 (1,125 ) 1,125 2,250 (1,125 ) 1,125 Table games license 2,493 (310 ) 2,183 2,493 (180 ) 2,313 $ 224,775 $ (86,965 ) $ 137,810 $ 238,865 $ (47,236 ) $ 191,629 Indefinite-lived intangible assets: Trademarks 225,729 225,729 Slots gaming rights 128,890 128,890 Illinois Horseracing Equity Trust 3,307 3,307 Other 417 417 Total $ 496,153 $ 549,972 |
Schedule of Future Estimated Amortization Expense | Future estimated aggregate amortization expense on existing definite-lived intangible assets for each of the next five fiscal years is as follows (in thousands): Year Ended December 31, Estimated Amortization Expense 2016 $ 50,687 2017 $ 36,760 2018 $ 18,716 2019 $ 16,638 2020 $ 4,586 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Provision for Income Taxes | Components of the provision for income taxes are as follows: Years Ended December 31, (in thousands) 2015 2014 2013 Current provision: Federal $ 46,138 $ 13,236 $ 22,727 State and local 3,822 2,008 2,462 Foreign 376 78 — 50,336 15,322 25,189 Deferred: Federal (1,797 ) 19,672 5,788 State and local 9 81 (504 ) Foreign (1,656 ) (4,914 ) — (3,444 ) 14,839 5,284 $ 46,892 $ 30,161 $ 30,473 |
Schedule of Income before Provision for Income Tax, Domestic and Foreign | Income from continuing operations before provision for income taxes were as follows: Years Ended December 31, (in thousands) 2015 2014 2013 Domestic $ 114,380 $ 76,023 $ 84,742 Foreign (2,291 ) 495 764 $ 112,089 $ 76,518 $ 85,506 |
Reconciliation of Amount Computed by Applying the Federal Statutory Income Tax Rate | Our income tax expense is different from the amount computed by applying the federal statutory income tax rate to income before taxes as follows: Years Ended December 31, (in thousands) 2015 2014 2013 Federal statutory tax on earnings before income taxes $ 39,231 $ 26,782 $ 29,928 State income taxes, net of federal income tax benefit 1,772 1,388 1,514 Non-deductible expense 2,629 999 723 Non-deductible acquisition-related charges 6,567 1,339 — Accruals and settlements related to tax audits 181 529 (395 ) Change in effective state tax rates 93 (401 ) (383 ) Manufacturing deduction (1,960 ) — — Tax credits and incentives (999 ) (1,209 ) (663 ) Other (622 ) 734 (251 ) $ 46,892 $ 30,161 $ 30,473 |
Schedule of Deferred Tax Assets and Liabilities | Components of our deferred tax assets and liabilities are as follows: (in thousands) 2015 2014 Deferred tax assets: Deferred compensation plans $ 34,080 $ 31,520 Deferred income 14,336 752 Allowance for uncollectible receivables 1,251 1,323 Deferred liabilities 1,869 4,625 Net operating losses and credit carryforward 11,680 32,573 Deferred tax assets 63,216 70,793 Valuation allowance (1,052 ) (1,274 ) Net deferred tax asset 62,164 69,519 Deferred tax liabilities: Intangible assets in excess of tax basis 142,970 151,210 Property and equipment in excess of tax basis 31,216 37,827 Other 15,861 11,485 Deferred tax liabilities 190,047 200,522 Net deferred tax liability $ (127,883 ) $ (131,003 ) Income taxes are classified in the balance sheet as follows: Net current deferred tax asset $ — $ 18,519 Net non-current deferred tax liability (127,883 ) (149,522 ) $ (127,883 ) $ (131,003 ) |
Schedule of Valuation Allowance for Deferred Tax Assets | The changes in the valuation allowance for deferred tax assets are as follows: (in thousands) 2015 2014 Balance at beginning of the year $ 1,274 $ 1,213 Charged to costs and expense (313 ) 158 Charged to other accounts 91 (83 ) Deductions — (14 ) Balance at end of the year $ 1,052 $ 1,274 |
Reconciliation of Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: (in thousands) 2015 2014 2013 Balance as of January 1 $ 2,926 $ 582 $ 8,565 Additions for tax positions related to the current year 310 573 190 Additions for tax positions of prior years 302 2,097 207 Reductions for tax positions of prior years (1,018 ) (326 ) (8,380 ) Balance as of December 31 $ 2,520 $ 2,926 $ 582 |
Total Debt (Tables)
Total Debt (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table presents our total debt outstanding: December 31, 2015 Unamortized Premium, Debt Issuance Costs and Loan Origination Fees (in thousands) Outstanding Principal Premium Issuance Costs and Fees Long-Term Debt, Net Senior Secured Credit Facility: Senior Secured Credit Facility due 2018 $ — $ — $ — $ — Term Loan A due 2019 188,750 — 638 188,112 Swing line of credit — — — — Total Senior Secured Credit Facility 188,750 — 638 188,112 5.375% Senior Unsecured Notes due 2021 600,000 2,978 9,308 593,670 Total debt 788,750 2,978 9,946 781,782 Current maturities of long-term debt 16,250 — — 16,250 Total debt, net of current maturities $ 772,500 $ 2,978 $ 9,946 $ 765,532 December 31, 2014 Unamortized Premium, Debt Issuance Costs and Loan Origination Fees Outstanding Principal Premium Issuance Costs and Fees Long-Term Debt, Net Senior Secured Credit Facility: Senior Secured Credit Facility due 2018 $ 258,000 $ — $ — $ 258,000 Term Loan A due 2019 200,000 — 787 199,213 Swing line of credit 12,355 — — 12,355 Total Senior Secured Credit Facility 470,355 — 787 469,568 5.375% Senior Unsecured Notes due 2021 300,000 — 5,464 294,536 Total debt 770,355 — 6,251 764,104 Current maturities of long-term debt 11,250 — — 11,250 Total debt, net of current maturities $ 759,105 $ — $ 6,251 $ 752,854 |
Schedule of Maturities of Long-term Debt | Future aggregate maturities of total debt are as follows (in thousands): Year Ended December 31, 2016 $ 9,437 2017 14,156 2018 18,876 2019 23,594 2020 28,312 Thereafter 694,375 Total $ 788,750 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Leases [Abstract] | |
Future Minimum Operating Lease Payments | Future minimum operating lease payments, in non-cancelable leases, are as follows, not including the variable portion of contingent leases: Year Ended December 31, (in thousands) 2016 $ 13,534 2017 11,005 2018 5,412 2019 2,758 2020 1,975 Thereafter 2,485 Total $ 37,169 |
Stock-Based Compensation Plans
Stock-Based Compensation Plans (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of stock option activity | Activity for our stock options outstanding is presented below: (in thousands, except per average exercise price) Number of Shares Under Option Weighted Average Exercise Price Balance as of December 31, 2012 201 $ 36.30 Granted — $ — Exercises (7 ) $ 42.94 Canceled/forfeited (1 ) $ 36.12 Balance as of December 31, 2013 193 $ 36.04 Granted — $ — Exercises (182 ) $ 35.26 Canceled/forfeited (1 ) $ 49.95 Balance as of December 31, 2014 10 $ 48.63 Granted — $ — Exercises (1 ) $ 49.95 Canceled/forfeited — $ — Balance as of December 31, 2015 9 $ 48.37 |
Disclosure of share based compensation award activity | The following table summarizes information about stock options outstanding on December 31, 2015: (in thousands, except contractual life and per share data) Shares Under Option Remaining Contractual Life Average Exercise Price Per Share Intrinsic Value per Share (1) Aggregate Intrinsic Value Options exercisable and vested at December 31, 2015 9 2.3 $ 48.37 $ 93.12 $ 800 (1) Computed based upon the amount by which the fair market value of our common stock on December 31, 2015 of $141.49 per share exceeded the weighted average exercise price. |
Activity for awards made outside of share-based compensation plans | Activity for the ELTI Plan, the 2013 New Company LTIP, the 2007 Incentive Plan and awards made outside of stock-based compensation plans is presented below: Market Condition & Performance-Based Awards Service Period Awards Total (in thousands, except grant date values) Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Balance as of December 31, 2012 60 $ 45.90 319 $ 42.42 379 $ 42.97 Granted 324 $ 53.71 287 $ 67.55 611 $ 60.21 Vested (60 ) $ 45.90 (256 ) $ 59.54 (316 ) $ 53.90 Canceled/forfeited — $ — (1 ) $ 38.75 (1 ) $ 38.75 Balance as of December 31, 2013 324 $ 53.71 349 $ 53.58 673 $ 53.64 Granted — $ — 26 $ 88.58 26 $ 88.58 Vested (239 ) $ 53.49 (107 ) $ 54.15 (346 ) $ 53.70 Canceled/forfeited — $ — (12 ) $ 60.41 (12 ) $ 60.41 Balance as of December 31, 2014 85 $ 54.32 256 $ 56.24 341 $ 55.77 Granted 27 $ 154.90 190 $ 102.09 217 $ 108.73 Vested (85 ) $ 48.31 (150 ) $ 64.87 (235 ) $ 58.91 Canceled/forfeited — $ — (9 ) $ 93.04 (9 ) $ 93.04 Balance as of December 31, 2015 27 $ 154.90 287 $ 80.90 314 $ 87.31 |
Fair Value Of Assets And Liab45
Fair Value Of Assets And Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements on a Recurring Basis | The following tables present our assets and liabilities measured at fair value on a recurring basis: (in thousands) December 31, 2015 Level 1 Level 3 Cash equivalents and restricted cash $ 30,072 $ — Big Fish Games deferred payments — 54,720 Big Fish Games earnout liability — 345,200 Bluff contingent consideration liability — 2,331 Total $ 30,072 $ 402,251 December 31, 2014 Level 1 Level 3 Cash equivalents and restricted cash $ 27,464 $ — Big Fish Games deferred payments — 78,800 Big Fish Games earnout liability — 327,800 Bluff contingent consideration liability — 2,331 Total $ 27,464 408,931 The following table presents the change in fair value of our Level 3: (in thousands) Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Big Fish Games Deferred Payments Big Fish Games Earnout Liability Bluff Contingent Consideration Total Balance as of December 31, 2014 $ 78,800 $ 327,800 $ 2,331 $ 408,931 Payments (28,428 ) — — (28,428 ) Change in fair value 4,348 17,400 — 21,748 Balance as of December 31, 2015 $ 54,720 $ 345,200 $ 2,331 $ 402,251 |
Net Income Per Common Share C46
Net Income Per Common Share Computations (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following is a reconciliation of the numerator and denominator of the net income per common share computations: (in thousands, except per share data) Year Ended December 31, 2015 2014 2013 Numerator for basic income from continuing operations per common share: Income from continuing operations $ 65,197 $ 46,357 $ 55,033 Income from continuing operations allocated to participating securities (595 ) (267 ) (873 ) Numerator for basic income from continuing operations per common share $ 64,602 $ 46,090 $ 54,160 Numerator for basic income per common share: Net income $ 65,197 $ 46,357 $ 54,900 Net income allocated to participating securities (595 ) (267 ) (870 ) Numerator for basic net income per common share $ 64,602 $ 46,090 $ 54,030 Numerator for diluted income from continuing operations per common share: $ 65,197 $ 46,357 $ 55,033 Numerator for diluted income per common share $ 65,197 $ 46,357 $ 54,900 Denominator for net income per common share: Basic 17,225 17,271 17,294 Plus dilutive effect of stock options and restricted stock 121 153 248 Plus dilutive effect of participating securities 230 165 396 Diluted 17,576 17,589 17,938 Income (loss) per common share: Basic Income from continuing operations $ 3.75 $ 2.67 $ 3.13 Discontinued operations — — (0.01 ) Net income $ 3.75 $ 2.67 $ 3.12 Diluted Income from continuing operations $ 3.71 $ 2.64 $ 3.07 Discontinued operations — — (0.01 ) Net income $ 3.71 $ 2.64 $ 3.06 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The table below presents net revenue from external customers and intercompany revenue from each of our operating segments: Year Ended December 31, (in thousands) 2015 2014 2013 Net revenue from external customers: Racing: Churchill Downs $ 151,125 $ 143,191 $ 132,845 Arlington 54,405 60,312 64,483 Fair Grounds 40,343 38,625 40,677 Calder 2,730 19,325 36,264 Total Racing 248,603 261,453 274,269 Casinos: Oxford Casino 80,405 76,526 34,350 Riverwalk Casino 49,758 50,139 53,645 Harlow’s Casino 48,978 50,199 52,440 Calder Casino 77,421 77,003 78,951 Fair Grounds Slots 38,408 40,774 42,156 VSI 36,913 33,653 35,634 Saratoga 416 — — Total Casinos 332,299 328,294 297,176 TwinSpires 200,168 190,333 184,541 Big Fish Games: Casino 193,428 7,627 — Casual free-to-play 125,321 2,098 — Premium 94,936 4,130 — Total Big Fish Games 413,685 13,855 — Other Investments 16,636 17,125 21,899 Corporate 910 1,158 1,143 Net revenue from external customers $ 1,212,301 $ 812,218 $ 779,028 Intercompany net revenue: Racing: Churchill Downs $ 7,832 $ 7,038 $ 6,686 Arlington 5,063 5,767 3,395 Fair Grounds 1,306 1,089 1,151 Calder — 707 1,263 Total Racing 14,201 14,601 12,495 TwinSpires 1,032 958 853 Other Investments 3,532 4,130 4,409 Eliminations (18,765 ) (19,689 ) (17,757 ) Net revenue $ — $ — $ — Year Ended December 31, (in thousands) 2015 2014 2013 Reconciliation of segment Adjusted EBITDA to comprehensive income: Racing $ 71,841 $ 61,160 $ 50,275 Casinos 108,516 101,106 80,631 TwinSpires 51,533 45,282 49,122 Big Fish Games 108,018 3,837 — Other Investments (37 ) (3,857 ) 809 Corporate (4,253 ) (5,037 ) (4,606 ) Total segment Adjusted EBITDA 335,618 202,491 176,231 Change in Big Fish Games deferred revenue (39,554 ) (4,497 ) — Big Fish Games adjustments (21,748 ) (10,193 ) — Stock-based compensation expense (13,849 ) (11,931 ) (21,482 ) MVG interest expense, net (2,098 ) (2,546 ) (170 ) Calder exit costs (13,854 ) (2,298 ) — Other charges and recoveries, net 5,833 (5,429 ) (1,204 ) Depreciation and amortization (109,706 ) (68,257 ) (61,750 ) Interest income (expense), net (28,553 ) (20,822 ) (6,119 ) Income tax provision (46,892 ) (30,161 ) (30,473 ) Net income from continuing operations 65,197 46,357 55,033 Discontinued operations, net of income taxes — — (133 ) Net income 65,197 46,357 54,900 Foreign currency translation, net of tax (463 ) (125 ) — Comprehensive income $ 64,734 $ 46,232 $ 54,900 The table below presents information about equity in income (losses) of unconsolidated investments included in our reported segments: Year Ended December 31, (in thousands) 2015 2014 2013 Casinos $ 10,929 $ 8,900 $ (3,718 ) TwinSpires — (68 ) (848 ) Other Investments 251 (2,504 ) 424 $ 11,180 $ 6,328 $ (4,142 ) |
Reconciliation of Assets from Segment to Consolidated | The table below presents total asset information for each of our operating segments: As of December 31, (in thousands) 2015 2014 Total assets: Racing $ 437,070 $ 456,034 Casinos 631,280 621,489 TwinSpires 177,624 178,694 Big Fish Games 947,112 996,918 Other Investments 37,033 34,083 Corporate 47,325 69,035 $ 2,277,444 $ 2,356,253 The table below presents capital expenditures for each of our operating segments: Year Ended December 31, (in thousands) 2015 2014 2013 Capital expenditures, net: Racing $ 12,280 $ 33,919 $ 20,184 Casinos 18,784 7,715 13,643 TwinSpires 4,306 5,778 5,908 Big Fish Games 6,431 116 — Other Investments 809 5,240 8,375 Corporate 900 1,718 661 $ 43,510 $ 54,486 $ 48,771 |
Quarterly Results of Operatio48
Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Results of Operations | (in thousands, except per common share data) For the Year Ended December 31, 2015 First Quarter Second Quarter Third Quarter Fourth Quarter (1) Net revenue $ 250,910 $ 409,239 $ 279,765 $ 272,387 (Loss) income from operations (1,558 ) 55,044 4,203 7,508 Basic net (loss) income per common share $ (0.09 ) $ 3.12 $ 0.24 $ 0.44 Diluted net (loss) income per common share $ (0.09 ) $ 3.10 $ 0.24 $ 0.43 (in thousands, except per common share data) For the Year Ended December 31, 2014 First Quarter Second Quarter Third Quarter Fourth Quarter Net revenue $ 167,141 $ 303,472 $ 173,483 $ 168,122 (Loss) income from operations (700 ) 57,333 3,531 (13,807 ) Basic net (loss) income per common share $ (0.04 ) $ 3.23 $ 0.21 $ (0.81 ) Diluted net (loss) income per common share $ (0.04 ) $ 3.21 $ 0.20 $ (0.81 ) (1) Refer to Note 12—Director and Employee Benefit Plans for discussion of an out of period adjustment during the fourth quarter of 2015. |
Basis of Presentation and Sum49
Basis of Presentation and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Nov. 04, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Oct. 02, 2015 | Mar. 31, 2012 |
Variable Interest Entity [Line Items] | ||||||
Calder exit costs | $ 13,854 | $ 2,298 | $ 0 | |||
Advanced Sales of Personal Seat Licenses, Contractual Life, Term One | 1 year | |||||
Advanced Sales of Personal Seat Licenses, Contractual Life, Term Two | 2 years | |||||
Advanced Sales of Personal Seat Licenses, Contractual Life, Term Three | 3 years | |||||
Advanced Sales of Personal Seat Licenses, Contractual Life, Term Four | 5 years | |||||
Advanced Sales of Personal Seat Licenses, Contractual Life, Term Five | 30 years | |||||
Asset impairment charge | $ 12,700 | |||||
Research & development expenditures | 39,399 | 0 | 0 | |||
Advertising and marketing expense | $ 130,700 | 28,800 | $ 23,700 | |||
Minimum | ||||||
Variable Interest Entity [Line Items] | ||||||
Gaming Tax Rate | 1.50% | |||||
Pari-Mutuel Tax Rate | 0.50% | |||||
Maximum | ||||||
Variable Interest Entity [Line Items] | ||||||
Gaming Tax Rate | 46.00% | |||||
Pari-Mutuel Tax Rate | 10.00% | |||||
Racing | ||||||
Variable Interest Entity [Line Items] | ||||||
Percentage earned on total amount wagered | 11.00% | |||||
TwinSpires | ||||||
Variable Interest Entity [Line Items] | ||||||
Percentage earned on total amount wagered | 19.00% | |||||
Asset impairment charge | $ 3,200 | |||||
Adjustment | Selling, General and Administrative Expense | ||||||
Variable Interest Entity [Line Items] | ||||||
Calder exit costs | $ (2,300) | |||||
Adjustment | Calder Exit Costs | ||||||
Variable Interest Entity [Line Items] | ||||||
Calder exit costs | 2,300 | |||||
New Accounting Pronouncement, Early Adoption, Effect | Non-current assets | ||||||
Variable Interest Entity [Line Items] | ||||||
Debt issuance costs | $ (6,300) | |||||
New Accounting Pronouncement, Early Adoption, Effect | Long-term debt and notes payable, net | ||||||
Variable Interest Entity [Line Items] | ||||||
Debt issuance costs | $ 6,300 | |||||
Miami Valley Gaming LLC | ||||||
Variable Interest Entity [Line Items] | ||||||
Equity method investment, ownership percentage | 50.00% | 50.00% | ||||
Saratoga | ||||||
Variable Interest Entity [Line Items] | ||||||
Equity method investment, ownership percentage | 25.00% | 25.00% | ||||
Fight! Magazine | ||||||
Variable Interest Entity [Line Items] | ||||||
Percentage of assets sold | 100.00% |
Basis Of Presentation and Sum50
Basis Of Presentation and Summary of Significant Accounting Policies - Property, Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Grandstands and buildings | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 10 years | ||
Grandstands and buildings | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 40 years | ||
Equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 2 years | ||
Equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 10 years | ||
Furniture and fixtures | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 2 years | ||
Furniture and fixtures | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 10 years | ||
Tracks and other improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 10 years | ||
Tracks and other improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 20 years | ||
Internal use software | |||
Property, Plant and Equipment [Line Items] | |||
Capitalized internal use software | $ 8.9 | $ 7.4 | $ 7.4 |
Estimated useful life of capitalized costs | 3 years | ||
Capitalized costs, amortization | $ 7 | $ 6 | $ 5.1 |
Game technology and rights, premium paid game | |||
Property, Plant and Equipment [Line Items] | |||
Intangible asset estimated useful life | 1 year | ||
Game technology and rights, casual and mid-core free-to-play games | |||
Property, Plant and Equipment [Line Items] | |||
Intangible asset estimated useful life | 18 months |
Acquisitions And New Ventures51
Acquisitions And New Ventures (Details) | Dec. 16, 2014USD ($)employeeshares | Dec. 31, 2015USD ($)game | May. 31, 2015 | Dec. 31, 2014USD ($) | Dec. 31, 2015USD ($)game | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 01, 2014USD ($) |
Business Acquisition [Line Items] | ||||||||
Tax refund due to Big Fish Games former equity holders | $ 426,000 | $ 18,087,000 | $ 426,000 | $ 18,087,000 | ||||
Acquisition of businesses, net of cash acquired | 959,000 | 366,045,000 | $ 154,872,000 | |||||
Earnout liability for acquisition of Big Fish Games | 0 | 324,747,000 | 0 | |||||
Deferred payment for acquisition of Big Fish Games | 0 | 97,073,000 | 0 | |||||
Increase in deferred tax assets for business combination | 800,000 | |||||||
Purchase accounting adjustments for goodwill | 1,400,000 | |||||||
Increase in accrued expense for business combination | 2,200,000 | |||||||
Big Fish Games deferred payment | $ 28,428,000 | 0 | 0 | |||||
Royalty rate, fair value input | 2.80% | |||||||
Net revenue | $ 0 | 0 | 0 | |||||
Loss from continuing operations before provision for income taxes | (112,089,000) | (76,518,000) | (85,506,000) | |||||
Equity in income (losses) of unconsolidated investments | 11,180,000 | 6,328,000 | (4,142,000) | |||||
Payments to acquire interest in joint venture | 460,000 | 17,906,000 | 70,500,000 | |||||
Big Fish Games | ||||||||
Business Acquisition [Line Items] | ||||||||
Number of employees | employee | 604 | |||||||
Purchase price consideration | $ 838,300,000 | |||||||
Purchase price consideration, cash paid | 401,700,000 | |||||||
Deferred payment to founder | 85,300,000 | |||||||
Length of deferred founder payment payable (in years) | 3 years | |||||||
Big Fish Games deferred payments fair value | 78,000,000 | |||||||
Tax refund due to Big Fish Games former equity holders | $ 18,100,000 | |||||||
Business acquisition, equity interest issued or issuable, number of shares | shares | 157,115 | |||||||
Maximum additional variable cash consideration for achievement of certain performance milestones | $ 350,000,000 | |||||||
Commitment to pay in 2016 if earnout milestones achieved | 281,600,000 | 281,600,000 | ||||||
Commitment to pay in 2017 if earnout milestones achieved | 68,400,000 | 68,400,000 | ||||||
Big Fish Games earnout liability | 324,700,000 | |||||||
Goodwill from acquisition | 540,306,000 | |||||||
Acquisition of businesses, net of cash acquired | $ 366,000,000 | |||||||
Cash acquired in business combination | 34,700,000 | |||||||
Payments to Big Fish Games former equity holders | 18,700,000 | |||||||
Big Fish Games deferred payment | $ 28,400,000 | $ 28,400,000 | ||||||
Number of games expected to launch in next fiscal year | game | 1 | 1 | ||||||
Deferred revenue | $ 37,250,000 | |||||||
Net revenue | $ 13,900,000 | |||||||
Loss from continuing operations before provision for income taxes | $ 2,900,000 | |||||||
Minimum | Computer Equipment and Software | Big Fish Games | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 1 year | |||||||
Minimum | Equipment | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 2 years | |||||||
Minimum | Equipment | Big Fish Games | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 2 years | |||||||
Minimum | Furniture and fixtures | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 2 years | |||||||
Minimum | Furniture and fixtures | Big Fish Games | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 2 years | |||||||
Minimum | Leasehold Improvements | Big Fish Games | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 3 years | |||||||
Maximum | Computer Equipment and Software | Big Fish Games | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 5 years | |||||||
Maximum | Equipment | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 10 years | |||||||
Maximum | Equipment | Big Fish Games | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 10 years | |||||||
Maximum | Furniture and fixtures | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 10 years | |||||||
Maximum | Furniture and fixtures | Big Fish Games | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 10 years | |||||||
Maximum | Leasehold Improvements | Big Fish Games | ||||||||
Business Acquisition [Line Items] | ||||||||
Useful life | 10 years | |||||||
New York Joint Venture | ||||||||
Business Acquisition [Line Items] | ||||||||
Equity method investment, ownership percentage | 50.00% | 50.00% | ||||||
Equity in income (losses) of unconsolidated investments | $ 1,000,000 | |||||||
Payments to acquire interest in joint venture | 3,300,000 | |||||||
Impairment loss on investment in joint venture | 1,600,000 | |||||||
Other assets | New York Joint Venture | ||||||||
Business Acquisition [Line Items] | ||||||||
Equity method investments | $ 800,000 | $ 800,000 | ||||||
Secured Debt | ||||||||
Business Acquisition [Line Items] | ||||||||
Term Loan Facility | $ 188,800,000 | 188,800,000 | $ 200,000,000 | |||||
Issuance Of Common Stock For Extinguishment Of Convertible Note Payable | ||||||||
Business Acquisition [Line Items] | ||||||||
Issuance of common stock for acquisition of Big Fish Games | $ 15,800,000 | $ 0 | 15,793,000 | $ 0 | ||||
Trademarks | ||||||||
Business Acquisition [Line Items] | ||||||||
Royalty rate, fair value input | 5.00% | |||||||
Customer relationships | ||||||||
Business Acquisition [Line Items] | ||||||||
Royalty rate, fair value input | 10.00% | |||||||
Developed Technology Rights | ||||||||
Business Acquisition [Line Items] | ||||||||
Royalty rate, fair value input | 25.00% | |||||||
In-process research & development | ||||||||
Business Acquisition [Line Items] | ||||||||
Royalty rate, fair value input | 10.00% | |||||||
Selling, General and Administrative Expense | ||||||||
Business Acquisition [Line Items] | ||||||||
Acquisition related charges | $ 6,400,000 | |||||||
I-Gaming | ||||||||
Business Acquisition [Line Items] | ||||||||
Term of agreement for internet-based interactive gaming services within California (in years) | 10 years |
Acquisitions And New Ventures -
Acquisitions And New Ventures - Identifiable Assets Acquired and Liabilities Assumed (Details) - Big Fish Games $ in Thousands | Dec. 16, 2014USD ($) |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |
Accounts receivable | $ 19,361 |
Income taxes receivable | 18,107 |
Prepaid expense | 9,727 |
Deferred income taxes | 1,682 |
Other assets | 1,780 |
Property and equipment | 14,632 |
Goodwill | 540,306 |
Other intangible assets | 362,863 |
Total assets acquired | 968,458 |
Accounts payable | 9,064 |
Accrued expense | 19,217 |
Income taxes payable | 210 |
Deferred revenue | 37,250 |
Deferred income taxes | 96,238 |
Other liabilities | 2,821 |
Total liabilities acquired | 164,800 |
Purchase price, net of cash acquired | 803,658 |
Tradename | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |
Other intangible assets | 200,000 |
Customer relationships | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |
Other intangible assets | $ 32,663 |
Finite-Lived Intangible Asset, Useful Life | 3 years |
Developed technology | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |
Other intangible assets | $ 87,000 |
Finite-Lived Intangible Asset, Useful Life | 4 years |
In-process research & development | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |
Other intangible assets | $ 12,700 |
Finite-Lived Intangible Asset, Useful Life | 5 years |
Strategic development | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract] | |
Other intangible assets | $ 30,500 |
Finite-Lived Intangible Asset, Useful Life | 6 years |
Acquisitions And New Ventures53
Acquisitions And New Ventures - Pro Forma Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Acquisitions and New Ventures [Abstract] | ||
Business Acquisition, Non-recurring Acquisition Costs | $ 23,100 | |
Business Acquisition, Pro Forma Information [Abstract] | ||
Net revenue | $ 1,126,592 | 1,085,518 |
Earnings from continuing operations | $ 64,145 | $ 11,182 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Net revenue | $ 632 | ||
Operating expense | 857 | ||
Selling, general and administrative expense | 0 | ||
Operating (loss) gain | (225) | ||
Other income (expense) | 145 | ||
(Loss) earnings from operations before income taxes | (80) | ||
Income tax benefit (provision) | 30 | ||
(Loss) gain from operations | $ 0 | $ 0 | (50) |
Loss on sale of assets, net of income taxes | $ 0 | $ 0 | (83) |
Net (loss) gain | $ (133) | ||
Fight! Magazine | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Percentage of assets sold | 100.00% |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounts Receivable, Net, Current [Abstract] | |||
Accounts receivable, gross | $ 71,476 | $ 80,136 | |
Allowance for doubtful accounts | (3,761) | (4,246) | |
Accounts receivable, net | 67,715 | 75,890 | |
Bad debt expense | $ 2,500 | ||
Big Fish Games | |||
Accounts Receivable, Net, Current [Abstract] | |||
Accounts receivable, net | 25,700 | 28,900 | |
TwinSpires | |||
Accounts Receivable, Net, Current [Abstract] | |||
Bad debt expense | 900 | 700 | $ 500 |
Trade receivables | |||
Accounts Receivable, Net, Current [Abstract] | |||
Accounts receivable, gross | 33,016 | 33,340 | |
Derby-related receivables | |||
Accounts Receivable, Net, Current [Abstract] | |||
Accounts receivable, gross | 17,638 | 24,522 | |
Simulcast and ADW receivables | |||
Accounts Receivable, Net, Current [Abstract] | |||
Accounts receivable, gross | 14,753 | 17,282 | |
Other receivables | |||
Accounts Receivable, Net, Current [Abstract] | |||
Accounts receivable, gross | $ 6,069 | $ 4,992 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Nov. 04, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Gross | $ 1,002,972 | $ 1,006,367 | ||
Accumulated depreciation | (429,800) | (411,052) | ||
Property, Plant and Equipment, Net | 573,172 | 595,315 | ||
Depreciation | 53,600 | 55,000 | $ 49,600 | |
Restructuring and Related Cost, Accelerated Depreciation | 2,400 | |||
Asset impairment charge | 12,700 | |||
Grandstands and buildings | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Gross | 412,394 | 439,625 | ||
Equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Gross | 252,110 | 237,867 | ||
Tracks and other improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Gross | 142,774 | 142,975 | ||
Land | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Gross | 118,694 | 118,658 | ||
Furniture and fixtures | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Gross | 52,154 | 49,765 | ||
Construction in progress | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Gross | 22,780 | 15,427 | ||
Artwork | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Gross | $ 2,066 | $ 2,050 | ||
TwinSpires | ||||
Property, Plant and Equipment [Line Items] | ||||
Asset impairment charge | $ 3,200 |
Calder Exit Costs (Details)
Calder Exit Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Restructuring Cost and Reserve [Line Items] | |||
Calder exit costs | $ 13,854 | $ 2,298 | $ 0 |
Calder grandstand impairment charge | 12,700 | ||
Adjustment | Selling, General and Administrative Expense | |||
Restructuring Cost and Reserve [Line Items] | |||
Calder exit costs | (2,300) | ||
Adjustment | Calder Exit Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Calder exit costs | 2,300 | ||
Calder Exit Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Calder exit costs | 13,900 | ||
Demolition costs | 1,200 | ||
Calder Exit Costs | Adjustment | Selling, General and Administrative Expense | |||
Restructuring Cost and Reserve [Line Items] | |||
Calder exit costs | (2,300) | ||
Calder Exit Costs | Adjustment | Calder Exit Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Calder exit costs | $ 2,300 | ||
Grandstand assets | Calder Exit Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Calder grandstand impairment charge | $ 12,700 |
Investment In and Advances To58
Investment In and Advances To Unconsolidated Affiliates - Miami Valley Gaming Joint Venture (Details) $ in Thousands | Dec. 21, 2012USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Dec. 31, 2015USD ($) | Dec. 12, 2013ft²aterminalmi | Mar. 31, 2012 |
Investments in and Advances to Affiliates [Line Items] | |||||||
Equity Method Investment, Summarized Financial Information, Current Assets | $ 24,502 | $ 24,096 | $ 24,502 | ||||
Investment Affiliate-Property Plant & Equipment | 119,675 | 130,868 | 119,675 | ||||
Equity Method Investment, Summarized Financial Information, Noncurrent Assets | 106,660 | 105,906 | 106,660 | ||||
Equity Method Investment, Summarized Financial Information, Assets | 250,837 | 260,870 | 250,837 | ||||
Equity Method Investment, Summarized Financial Information, Current Liabilities | 21,620 | 16,783 | 21,620 | ||||
Equity Method Investment-Long-term Debt, Current Maturities | 8,333 | 8,332 | 8,333 | ||||
Equity Method Investment, Summarized Financial Information, Noncurrent Liabilities | 20,520 | 26,584 | 20,520 | ||||
Investment Affiliate-Other Liabilities | 75 | 75 | 75 | ||||
Equity Method Investment Summarized Financial Information, Equity | 200,289 | 209,096 | 200,289 | ||||
Equity Method Investment, Summarized Financial Information, Liabilities and Equity | 250,837 | 260,870 | $ 250,837 | ||||
Investment Affiliate-Gaming Revenue | 130,327 | 126,374 | $ 6,144 | ||||
Investment Affiliate-Non-Gaming Revenue | 6,568 | 6,257 | 5,479 | ||||
Equity Method Investment, Summarized Financial Information, Revenue | 136,895 | 132,631 | 11,623 | ||||
Investment Affiliate-Expenses | 98,688 | 97,648 | 10,926 | ||||
Equity Method, Depreciation & Amortization | 12,816 | 12,299 | 935 | ||||
Investment Affiliate-Pre-Opening Expenses | 0 | 54 | 7,240 | ||||
Equity Method Investment Operating Income Loss | 25,391 | 22,630 | (7,478) | ||||
Investment Affiliate-Interest | (4,197) | (4,829) | (397) | ||||
Equity Method Investment, Summarized Financial Information, Net Income (Loss) | 21,194 | 17,801 | (7,875) | ||||
Dividend from investment in unconsolidated affiliates | 15,250 | 0 | 0 | ||||
Equity in income (losses) of unconsolidated investments | $ 11,180 | 6,328 | (4,142) | ||||
Miami Valley Gaming LLC | |||||||
Investments in and Advances to Affiliates [Line Items] | |||||||
Equity method investment, ownership percentage | 50.00% | 50.00% | 50.00% | ||||
Equity method investments | $ 60,000 | ||||||
Note Payable, Term | 6 years | ||||||
Equity Method Investments, Contingent Payable | $ 10,000 | ||||||
Financial Performance Period To Determine Potential Contingent Consideration Payment | 7 years | ||||||
Acres | a | 120 | ||||||
Race track, length | mi | 0.625 | ||||||
Number of lottery terminals | terminal | 1,590 | ||||||
Square footage of Casino | ft² | 186,000 | ||||||
Equity Method Investment, Summarized Financial Information, Noncurrent Liabilities | $ 50,000 | ||||||
Long-term Debt, Percentage Bearing Fixed Interest, Percentage Rate | 5.00% | ||||||
Repayments of Notes Payable | $ 16,700 | ||||||
Dividend from investment in unconsolidated affiliates | $ 15,000 | ||||||
Equity in income (losses) of unconsolidated investments | $ 10,597 | $ 8,900 | $ (3,718) | ||||
Funded at Closing | Miami Valley Gaming LLC | |||||||
Investments in and Advances to Affiliates [Line Items] | |||||||
Equity method investments | $ 10,000 | ||||||
Notes Payable, Other Payables | Miami Valley Gaming LLC | |||||||
Investments in and Advances to Affiliates [Line Items] | |||||||
Equity method investments | $ 50,000 |
Investment In and Advances To59
Investment In and Advances To Unconsolidated Affiliates - SHRI Equity Investment (Details) ft² in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015USD ($)ft²hotel_room | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | Oct. 02, 2015USD ($)terminalmi | |
Investments in and Advances to Affiliates [Line Items] | ||||
Dividend from investment in unconsolidated affiliates | $ 15,250 | $ 0 | $ 0 | |
Saratoga | ||||
Investments in and Advances to Affiliates [Line Items] | ||||
Equity method investment, ownership percentage | 25.00% | 25.00% | ||
Equity method investments | $ 24,500 | |||
Number of lottery terminals | terminal | 1,700 | |||
Race track, length | mi | 0.5 | |||
Future payment for investment in equity method investee | $ 6,400 | |||
Property, Plant, and Equipment, Fair Value Disclosure | $ 3,700 | |||
Finite-lived Intangible Assets, Fair Value Disclosure | $ 2,700 | |||
Dividend from investment in unconsolidated affiliates | 300 | |||
Saratoga | ||||
Investments in and Advances to Affiliates [Line Items] | ||||
Future expansion costs | $ 40,000 | |||
Future number of hotel rooms | hotel_room | 117 | |||
Future square footage of multi-functional event space | ft² | 3 | |||
Saratoga | DNC | ||||
Investments in and Advances to Affiliates [Line Items] | ||||
Equity method investment, ownership percentage | 50.00% |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill [Roll Forward] | ||
Balance, beginning of period | $ 840,947 | $ 300,616 |
Additions | 540,331 | |
Adjustments | 777 | |
Balance, end of period | 841,724 | 840,947 |
Racing | ||
Goodwill [Roll Forward] | ||
Balance, beginning of period | 51,659 | 51,659 |
Additions | 0 | |
Adjustments | 0 | |
Balance, end of period | 51,659 | 51,659 |
Casinos | ||
Goodwill [Roll Forward] | ||
Balance, beginning of period | 117,659 | 117,659 |
Additions | 0 | |
Adjustments | 0 | |
Balance, end of period | 117,659 | 117,659 |
TwinSpires | ||
Goodwill [Roll Forward] | ||
Balance, beginning of period | 127,364 | 127,364 |
Additions | 0 | |
Adjustments | 802 | |
Balance, end of period | 128,166 | 127,364 |
Big Fish Games | ||
Goodwill [Roll Forward] | ||
Balance, beginning of period | 540,331 | 0 |
Additions | 540,331 | |
Adjustments | (25) | |
Balance, end of period | 540,306 | 540,331 |
Other Investments | ||
Goodwill [Roll Forward] | ||
Balance, beginning of period | 3,934 | 3,934 |
Additions | 0 | |
Adjustments | 0 | |
Balance, end of period | $ 3,934 | $ 3,934 |
Other Intangible Assets (Detail
Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | $ 224,775 | $ 238,865 | |
Accumulated Amortization | (86,965) | (47,236) | |
Net Carrying Amount | 137,810 | 191,629 | |
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 496,153 | 549,972 | |
Amortization expense | 56,100 | 13,300 | $ 12,200 |
Big Fish Games | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 162,900 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Indefinite-Lived Intangible Assets | 200,000 | ||
Calder | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | |||
Annual license fees paid | 2,300 | 2,300 | |
Trademarks | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 225,729 | 225,729 | |
Slots gaming rights | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 128,890 | 128,890 | |
Illinois Horseracing Equity Trust | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 3,307 | 3,307 | |
Other | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | |||
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 417 | 417 | |
Developed technology | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 87,000 | 87,000 | |
Accumulated Amortization | (23,264) | (931) | |
Net Carrying Amount | 63,736 | 86,069 | |
Customer relationships | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 75,133 | 89,203 | |
Accumulated Amortization | (47,149) | (39,399) | |
Net Carrying Amount | 27,984 | 49,804 | |
Strategic development | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 30,500 | 30,500 | |
Accumulated Amortization | (6,585) | (263) | |
Net Carrying Amount | 23,915 | 30,237 | |
In-process research & development | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 12,700 | 12,700 | |
Accumulated Amortization | (2,622) | (105) | |
Net Carrying Amount | 10,078 | 12,595 | |
Favorable contracts | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 11,000 | 11,000 | |
Accumulated Amortization | (5,554) | (4,907) | |
Net Carrying Amount | 5,446 | 6,093 | |
Other | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 3,699 | 3,719 | |
Accumulated Amortization | (356) | (326) | |
Net Carrying Amount | 3,343 | 3,393 | |
Slots gaming license | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 2,250 | 2,250 | |
Accumulated Amortization | (1,125) | (1,125) | |
Net Carrying Amount | 1,125 | 1,125 | |
Table games license | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | 2,493 | 2,493 | |
Accumulated Amortization | (310) | (180) | |
Net Carrying Amount | 2,183 | $ 2,313 | |
TwinSpires | Customer relationships | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Gross Carrying Amount | (14,000) | ||
Accumulated Amortization | $ 14,000 |
Finite-Lived Intangible, Amorti
Finite-Lived Intangible, Amortization Expense (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | |
2,016 | $ 50,687 |
2,017 | 36,760 |
2,018 | 18,716 |
2,019 | 16,638 |
2,020 | 4,586 |
Additional payments not included in future estimated amortization expense | $ 2,300 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Current Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||
Federal | $ 46,138 | $ 13,236 | $ 22,727 |
State and local | 3,822 | 2,008 | 2,462 |
Foreign | 376 | 78 | 0 |
Current Income Tax Expense (Benefit) | 50,336 | 15,322 | 25,189 |
Deferred Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||
Federal | (1,797) | 19,672 | 5,788 |
State and local | 9 | 81 | (504) |
Foreign | (1,656) | (4,914) | 0 |
Deferred Income Tax Expense (Benefit) | (3,444) | 14,839 | 5,284 |
Income Tax Expense (Benefit), Continuing Operations | $ 46,892 | $ 30,161 | $ 30,473 |
Income Taxes - Income Before in
Income Taxes - Income Before income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 114,380 | $ 76,023 | $ 84,742 |
Foreign | (2,291) | 495 | 764 |
Income from continuing operations before provision for income taxes | $ 112,089 | $ 76,518 | $ 85,506 |
Income Taxes - Income Tax Recon
Income Taxes - Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract] | |||
Federal statutory tax on earnings before income taxes | $ 39,231 | $ 26,782 | $ 29,928 |
State income taxes, net of federal income tax benefit | 1,772 | 1,388 | 1,514 |
Non-deductible expense | 2,629 | 999 | 723 |
Non-deductible acquisition-related charges | 6,567 | 1,339 | 0 |
Accruals and settlements related to tax audits | 181 | 529 | (395) |
Change in effective state tax rates | 93 | (401) | (383) |
Manufacturing deduction | (1,960) | 0 | 0 |
Tax credits and incentives | (999) | (1,209) | (663) |
Other | (622) | 734 | (251) |
Income Tax Expense (Benefit), Continuing Operations | $ 46,892 | $ 30,161 | $ 30,473 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||
Oct. 31, 2012 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2003 | Sep. 30, 2015 | Dec. 16, 2014 | Dec. 31, 2012 | |
Income Taxes [Line Items] | ||||||||
Income tax provision | $ 46,892 | $ 30,161 | $ 30,473 | |||||
Combined benefits received | 6,400 | |||||||
Sales tax receivable | 1,200 | |||||||
Income tax receivable recorded | 700 | |||||||
Unrecognized Tax Benefits | 2,520 | 2,926 | 582 | $ 8,565 | ||||
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued (less than) | 100 | |||||||
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 1,900 | |||||||
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Amount of Unrecorded Benefit | 200 | |||||||
Adjustment | ||||||||
Income Taxes [Line Items] | ||||||||
Reduction in operating expense | (600) | (600) | (800) | |||||
Income tax provision | (600) | $ (100) | $ (300) | |||||
State | ||||||||
Income Taxes [Line Items] | ||||||||
Operating Loss Carryforwards | 2,400 | |||||||
Operating Loss Carryforwards, Valuation Allowance | 600 | |||||||
Youbet.com | Federal | ||||||||
Income Taxes [Line Items] | ||||||||
Operating Loss Carryforwards | 7,000 | |||||||
Youbet.com and Big Fish Games | State | ||||||||
Income Taxes [Line Items] | ||||||||
Operating Loss Carryforwards | 1,300 | |||||||
Big Fish Games | ||||||||
Income Taxes [Line Items] | ||||||||
Unrecognized Tax Benefits | $ 900 | |||||||
Business Combination, Indemnification Assets, Amount as of Acquisition Date | $ 200 | |||||||
KENTUCKY | State | ||||||||
Income Taxes [Line Items] | ||||||||
Reimbursement percentage of income and sales tax | 80.00% | |||||||
ILLINOIS | State | ||||||||
Income Taxes [Line Items] | ||||||||
Income taxes paid | $ 2,900 | |||||||
Income tax refund received for settlement of state income tax apportionment methodology | $ 2,900 |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Components of Deferred Tax Assets [Abstract] | ||
Deferred compensation plans | $ 34,080 | $ 31,520 |
Deferred income | 14,336 | 752 |
Allowance for uncollectible receivables | 1,251 | 1,323 |
Deferred liabilities | 1,869 | 4,625 |
Net operating losses and credit carryforward | 11,680 | 32,573 |
Deferred tax assets | 63,216 | 70,793 |
Valuation allowance | (1,052) | (1,274) |
Net deferred tax asset | 62,164 | 69,519 |
Deferred Tax Liabilities, Gross [Abstract] | ||
Intangible assets in excess of tax basis | 142,970 | 151,210 |
Property and equipment in excess of tax basis | 31,216 | 37,827 |
Other | 15,861 | 11,485 |
Deferred tax liabilities | 190,047 | 200,522 |
Net deferred tax liability | (127,883) | (131,003) |
Net current deferred tax asset | 0 | 18,519 |
Net non-current deferred tax liability | $ (127,883) | $ (149,522) |
Income Taxes - Valuation allowa
Income Taxes - Valuation allowance for deferred tax assets (Details) - Deferred income tax asset valuation allowance: - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Valuation allowance for deferred tax assets [Roll Forward] | |||
Balance Beginning of Year | $ 1,274 | $ 1,213 | $ 1,334 |
Charged to costs and expense | (313) | 158 | |
Charged to other accounts | 91 | (83) | |
Deductions | 0 | (14) | (289) |
Balance End of Year | $ 1,052 | $ 1,274 | $ 1,213 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefit, beginning of period | $ 2,926 | $ 582 | $ 8,565 |
Additions for tax positions related to the current year | 310 | 573 | 190 |
Additions for tax positions of prior years | 302 | 2,097 | 207 |
Reductions for tax positions of prior years | (1,018) | (326) | (8,380) |
Unrecognized tax benefit, end of period | $ 2,520 | $ 2,926 | $ 582 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) | Nov. 19, 2015USD ($)$ / sharesshares | Mar. 13, 2008right / sharesshares / rightfirm | Dec. 31, 2014USD ($)shares | Feb. 24, 2016USD ($) | Dec. 31, 2015USD ($) | Oct. 28, 2015USD ($) | Apr. 23, 2013USD ($) |
Authorized stock repurchase amount | $ 150,000,000 | $ 150,000,000 | $ 100,000,000 | ||||
Stock Repurchased During Period (in shares) | shares | 691,000 | ||||||
Stock Repurchased and Retired During Period, Value | $ 61,600,000 | ||||||
Number of days for average common stock repurchase price | 20 days | ||||||
Remaining unused authorization for stock repurchase program | $ 11,900,000 | ||||||
Percent of common stock issued | 200.00% | ||||||
Number of investment banking firms consulting with company | firm | 1 | ||||||
Maximum percentage of companies assets, cash flow or earnings power before shareholders will lose right to exercise shares | 50.00% | ||||||
Class of Warrant or Right, Triggering Event, Repurchase, Beneficial Owner, Percentage | 50.00% | ||||||
Minimum | |||||||
Beneficial ownership percentage | 15.00% | ||||||
Common Stock | Common Stock | |||||||
Class or Warrant or Right, Percent of Common Stock Issued | 200.00% | ||||||
Class of Warrant or Right, Repurchase Rate | shares / right | 1 | ||||||
Common Stock | Series A Preferred Stock | |||||||
Class of Warrant or Right, Repurchase Rate | shares / right | 0.0001 | ||||||
Series A Preferred Stock | Common Stock | |||||||
Class of Warrant or Right, Issuance Rate | right / shares | 1 | ||||||
The Duchossois Group | |||||||
Stock Repurchased During Period (in shares) | shares | 945,000 | ||||||
Stock Repurchased and Retired During Period, Value | $ 138,100,000 | ||||||
Repurchase price (in dollars per share) | $ / shares | $ 146.13 | ||||||
Subsequent Event | |||||||
Authorized stock repurchase amount | $ 150,000,000 |
Director and Employee Benefit71
Director and Employee Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Defined Benefit Plan and Defined Contribution Plan Disclosure [Line Items] | ||||
Operating income | $ 123,612 | $ 90,393 | $ 90,100 | |
Employer matching contribution, percent | 3.00% | |||
Maximum annual contribution per employee, percent | 50.00% | |||
Employer's maximum additional match, percentage | 2.00% | |||
Employer's discretionary matching contribution | 4.00% | |||
Cash contribution to profit-sharing plan | $ 3,400 | 2,500 | 2,300 | |
Noncontributory Defined Benefit Multi-Employer Retirement Plan | ||||
Defined Benefit Plan and Defined Contribution Plan Disclosure [Line Items] | ||||
Retirement plan expense | $ 600 | $ 700 | $ 600 | |
Big Fish Games | ||||
Defined Benefit Plan and Defined Contribution Plan Disclosure [Line Items] | ||||
Employer matching contribution, percent | 3.00% | |||
Restatement Adjustment | Correcting benefit for life-to-date appreciation of hypothetical shares from inception of the deferred plan | ||||
Defined Benefit Plan and Defined Contribution Plan Disclosure [Line Items] | ||||
Operating income | $ 2,800 | |||
Restatement Adjustment | Correcting benefit previously recognized as operating expense in 2015 | ||||
Defined Benefit Plan and Defined Contribution Plan Disclosure [Line Items] | ||||
Operating income | 1,500 | |||
Restatement Adjustment | Correcting benefit previously recognized as operating expense in 2006 to 2014 | ||||
Defined Benefit Plan and Defined Contribution Plan Disclosure [Line Items] | ||||
Operating income | $ 1,300 |
Total Debt - Schedule of debt
Total Debt - Schedule of debt outstanding (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 16, 2015 | Dec. 31, 2014 | Dec. 16, 2013 |
Debt Instrument [Line Items] | ||||
Outstanding Principal | $ 788,750 | $ 770,355 | ||
Debt, Unamortized Premium | 2,978 | 0 | ||
Unamortized Debt Issuance Costs and Loan Origination Fees | 9,946 | 6,251 | ||
Long-term Debt, Net | 781,782 | 764,104 | ||
Current maturities of long-term debt | 16,250 | 11,250 | ||
Total Debt, Net of Current Maturities, Outstanding Principal | 772,500 | 759,105 | ||
Long-term Debt, Excluding Current Maturities | 765,532 | 752,854 | ||
Debt interest rate | 5.375% | 5.375% | ||
Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Outstanding Principal | 188,750 | 470,355 | ||
Debt, Unamortized Premium | 0 | 0 | ||
Unamortized Debt Issuance Costs and Loan Origination Fees | 638 | 787 | ||
Long-term Debt, Net | 188,112 | 469,568 | ||
Unsecured Debt | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Excluding Current Maturities | 600,000 | |||
Senior Secured Credit Facility due 2018 | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Outstanding Principal | 0 | 258,000 | ||
Debt, Unamortized Premium | 0 | 0 | ||
Unamortized Debt Issuance Costs and Loan Origination Fees | 0 | 0 | ||
Long-term Debt, Net | 0 | 258,000 | ||
Term Loan A due 2019 | Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Outstanding Principal | 188,750 | 200,000 | ||
Debt, Unamortized Premium | 0 | 0 | ||
Unamortized Debt Issuance Costs and Loan Origination Fees | 638 | 787 | ||
Long-term Debt, Net | 188,112 | 199,213 | ||
Swing line of credit | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Outstanding Principal | 0 | 12,355 | ||
Debt, Unamortized Premium | 0 | 0 | ||
Unamortized Debt Issuance Costs and Loan Origination Fees | 0 | 0 | ||
Long-term Debt, Net | 0 | 12,355 | ||
5.375% Senior Unsecured Notes due 2021 | Unsecured Debt | ||||
Debt Instrument [Line Items] | ||||
Outstanding Principal | 600,000 | 300,000 | ||
Debt, Unamortized Premium | 2,978 | 0 | ||
Unamortized Debt Issuance Costs and Loan Origination Fees | 9,308 | 5,464 | ||
Long-term Debt, Net | $ 593,670 | $ 294,536 | ||
Debt interest rate | 5.375% | 5.375% |
Total Debt - Narrative (Details
Total Debt - Narrative (Details) | Dec. 16, 2015USD ($) | Dec. 01, 2014USD ($) | Dec. 16, 2013USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Debt Instrument [Line Items] | |||||
Loan origination fees | $ 900,000 | ||||
Debt weighted average interest rate | 1.73% | 2.19% | |||
Notes payable | $ 593,670,000 | $ 294,536,000 | |||
Debt interest rate | 5.375% | 5.375% | |||
Proceeds from Issuance of Unsecured Debt | $ 299,000,000 | $ 295,000,000 | |||
Debt Instrument, Redemption Price, Percentage of Principal Amount Redeemed | 104.031% | ||||
Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Term Loan Facility | $ 200,000,000 | $ 188,800,000 | |||
Annual paydown requirements year one | 5.00% | ||||
Annual paydown requirements year two | 7.50% | ||||
Annual paydown requirements year three | 10.00% | ||||
Annual paydown requirements year four | 12.50% | ||||
Annual paydown requirements year five | 15.00% | ||||
Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Variable rate basis | LIBOR | ||||
Remaining borrowing capacity | $ 492,100,000 | ||||
Unsecured Debt | |||||
Debt Instrument [Line Items] | |||||
Notes payable | $ 300,000,000 | 300,000,000 | 600,000,000 | ||
Premium Percent for Debt Issuance | 101.00% | ||||
Debt issuance costs | $ 4,700,000 | $ 6,300,000 | |||
Quarterly Principal Payments | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Long-term Line of Credit, Noncurrent | 2,400,000 | ||||
Incremental Quarterly Principal Payments | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Long-term Line of Credit, Noncurrent | 1,200,000 | ||||
Maximum Quarterly Principal Payments | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Long-term Line of Credit, Noncurrent | 7,100,000 | ||||
Final Balance Due | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Long-term Line of Credit, Noncurrent | $ 94,400,000 | ||||
Minimum | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Margin on variable rate | 1.125% | ||||
Commitment fee, unused capacity | 0.175% | ||||
Debt covenant, interest coverage ratio | 3 | ||||
Debt covenant, leverage ratio | 4.5 | ||||
Maximum [Member] | Revolving Credit Facility | London Interbank Offered Rate (LIBOR) | |||||
Debt Instrument [Line Items] | |||||
Margin on variable rate | 3.00% | ||||
Commitment fee, unused capacity | 0.45% | ||||
Debt covenant, leverage ratio | 5 | ||||
Line of Credit Facility, Covenant Terms, Senior Secured Leverage Ratio | 3.5 | ||||
5.375% Senior Unsecured Notes due 2021 | Unsecured Debt | |||||
Debt Instrument [Line Items] | |||||
Percent of principal amount of notes redeemed prior to make-whole premium | 100.00% | ||||
Debt interest rate | 5.375% | 5.375% |
Total Debt - Fiscal Year Maturi
Total Debt - Fiscal Year Maturities (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
2,016 | $ 9,437 |
2,017 | 14,156 |
2,018 | 18,876 |
2,019 | 23,594 |
2,020 | 28,312 |
Thereafter | 694,375 |
Total debt | $ 788,750 |
Operating Leases (Details)
Operating Leases (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2002 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
2,016 | $ 13,534,000 | |||
2,017 | 11,005,000 | |||
2,018 | 5,412,000 | |||
2,019 | 2,758,000 | |||
2,020 | 1,975,000 | |||
Thereafter | 2,485,000 | |||
Operating Leases, Future Minimum Payments Due | 37,169,000 | |||
Rent expense for contingent lease payments | 3,500,000 | $ 3,600,000 | $ 3,700,000 | |
Total rent expense for all operating leases | $ 25,400,000 | $ 20,200,000 | $ 20,200,000 | |
Payment to re-acquire Churchill Downs facility in future period | $ 1 |
Stock-Based Compensation Plan76
Stock-Based Compensation Plans - Options Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 13,849 | $ 11,931 | $ 21,482 | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 167,800 | 92,000 | ||
Restricted stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 29,218 | |||
Compensation expense recognized | $ 1,300 | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares exercised (in shares) | 1,000 | 182,000 | 7,000 | |
Total intrinsic value of options exercised | $ 100 | $ 9,600 | $ 300 | |
Cash received from exercised options | $ 100 | $ 6,400 | $ 300 | |
Shares exercisable at period end (in shares) | 10,000 | |||
Shares exercised, weighted average exercise price (in dollars per share) | $ 48.63 | |||
2007 Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock options, contractual term (in years) | 10 years | |||
Award vesting period (in years) | 3 years | |||
Employee Agreement | Common Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares exercised (in shares) | 180,000 | |||
Shares granted (in dollars per share) | $ 35.19 | |||
Shares exercised, minimum price (in dollars per share) | 85 | |||
Shares exercised, maximum price (in dollars per share) | $ 91.33 |
Stock-Based Compensation Plan77
Stock-Based Compensation Plans - Stock Option Activity (Details) - Stock Options - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Shares outstanding, beginning of period (in shares) | 10 | 193 | 201 |
Shares granted (in shares) | 0 | 0 | 0 |
Shares exercised (in shares) | (1) | (182) | (7) |
Shares cancelled/forfeited (in shares) | 0 | (1) | (1) |
Shares outstanding, end of period (in shares) | 9 | 10 | 193 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||
Shares outstanding, weighted average exercise price, beginning of period (in dollars per share) | $ 48.63 | $ 36.04 | $ 36.30 |
Shares granted, weighted average exercise price (in dollars per share) | 0 | 0 | 0 |
Shares exercised, weighted average exercise price (in dollars per share) | 49.95 | 35.26 | 42.94 |
Shares cancelled/forfeited, weighted average exercise price (in dollars per share) | 0 | 49.95 | 36.12 |
Shares outstanding, weighted average exercise price, end of period (in dollars per share) | $ 48.37 | $ 48.63 | $ 36.04 |
Stock-Based Compensation Plan78
Stock-Based Compensation Plans - Activity of Stock Options Exercisable and Outstanding (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2015USD ($)$ / sharesshares | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract] | ||
Exercisable and vested options at period end, shares under option (in shares) | shares | 9 | |
Exercisable and vested options at period end, remaining contractual life (in years) | 2 years 3 months 18 days | |
Exercisable and vested options at period end, average exercise price per share (in dollars per share) | $ 48.37 | |
Exercisable and vested options at period end, intrinsic value per share (in dollars per share) | $ 93.12 | [1] |
Exercisable and vested options at period end, aggregate intrinsic value | $ | $ 800 | |
Common stock, market fair value (in dollars per share) | $ 141.49 | |
[1] | Computed based upon the amount by which the fair market value of our common stock on December 31, 2015 of $141.49 per share exceeded the weighted average exercise price. |
Stock-Based Compensation Plan79
Stock-Based Compensation Plans - Restricted Shares and Restricted Stock Units (Details) $ in Thousands | Sep. 22, 2015 | Dec. 31, 2015USD ($)trading_dayservice_periodshares | Dec. 31, 2014USD ($)shares | Dec. 31, 2013USD ($)shares | Sep. 30, 2015shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 13,849 | $ 11,931 | $ 21,482 | ||
Unrecognized compensation expense | $ 9,700 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | shares | 167,800 | 92,000 | |||
Number of Consecutive Trading Days Common Stock Must Reach Certain Closing Price For Restricted Stock to Fully Vest | trading_day | 20 | ||||
Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation expense | $ 16,000 | ||||
Weighted average period over which unrecognized compensation is expected to be recognized for equity-based compensation plan | 1 year 10 months 24 days | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | shares | 29,218 | ||||
Stock-based compensation expense | $ 1,300 | ||||
Other awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 2,900 | ||||
2007 Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period (in years) | 3 years | ||||
2007 Incentive Plan | Restricted Stock Units (RSU) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period (in years) | 3 years | ||||
Executive Long-Term Incentive Compensation Plan (the “ELTI Plan”) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Performance and service period under adopted ELTI Plan | 30 months | ||||
Executive Long-Term Incentive Compensation Plan (the “ELTI Plan”) | Restricted Stock Units (RSU) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of units received by NEOs and Grantees under adopted ELTI Plan (in shares) | shares | 22,142 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Vesting Service Periods | service_period | 2 | ||||
Unrecognized compensation expense | $ 2,500 | ||||
Weighted average period over which unrecognized compensation is expected to be recognized for equity-based compensation plan | 18 months | ||||
Executive Long-Term Incentive Compensation Plan (the “ELTI Plan”) | Performance Share Units (PSU) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Performance and service period under adopted ELTI Plan | 30 months | ||||
Number of units received by NEOs and Grantees under adopted ELTI Plan (in shares) | shares | 27,282 | ||||
Maximum number of performance share units as percentage of original award (in percent) | 250.00% | ||||
Unrecognized compensation expense | $ 3,800 | ||||
Weighted average period over which unrecognized compensation is expected to be recognized for equity-based compensation plan | 24 months | ||||
Executive Long-Term Incentive Compensation Plan (the “ELTI Plan”) | RSU and PSU awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 900 | ||||
NEOs, Grantees and certain other employees | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | 6,200 | ||||
NEOs, Grantees and certain other employees | Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period (in years) | 4 years | ||||
2013 New Company LTIP | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 1,900 | ||||
Minimum | Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 7 months | ||||
Maximum | Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted average period over which unrecognized compensation is expected to be recognized for equity-based compensation plan | 23 months | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term | 3 years | ||||
Performance-Based Awards | Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | shares | 324,000 | ||||
Number of vested shares after achievement of consecutive trading days closing price stock requirement | shares | 324,000 | 324,000 | 324,000 | ||
Performance-Based Awards | NEOs, Grantees and certain other employees | Restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number | shares | 27,282 | ||||
Service Period Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation expense | $ 800 |
Stock-Based Compensation Plan80
Stock-Based Compensation Plans - Activity for the ELTI Plan, 2013 New Company LTIP, 2007 Incentive Plan and awards made outside of the stock-based compensation plans (Details) - Restricted stock - $ / shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
ELTI Plan, the 2013 New Company LTIP, the 2007 Incentive Plan and awards made outside of stock-based compensation plans | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Shares outstanding, beginning of period (in shares) | 341,000 | 673,000 | 379,000 |
Shares, granted (in shares) | 217,000 | 26,000 | 611,000 |
Shares, vested (in shares) | (235,000) | (346,000) | (316,000) |
Shares cancelled/forfeited (in shares) | (9,000) | (12,000) | (1,000) |
Shares outstanding, end of period (in shares) | 314,000 | 341,000 | 673,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Shares outstanding, weighted average grant date fair value, beginning of period (in dollars per share) | $ 55.77 | $ 53.64 | $ 42.97 |
Shares, weighted average grant date fair value, vested (in dollars per share) | 58.91 | 53.70 | 53.90 |
Shares, weighted average grant date fair value, granted (in dollars per share) | 108.73 | 88.58 | 60.21 |
Shares, weighted average grant date fair value, cancelled/forfeited (in dollars per share) | 93.04 | 60.41 | 38.75 |
Shares outstanding, weighted average grant date fair value, end of period (in dollars per share) | $ 87.31 | $ 55.77 | $ 53.64 |
Market Condition & Performance-Based Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Shares outstanding, beginning of period (in shares) | 324,000 | ||
Shares outstanding, end of period (in shares) | 324,000 | ||
Market Condition & Performance-Based Awards | ELTI Plan, the 2013 New Company LTIP, the 2007 Incentive Plan and awards made outside of stock-based compensation plans | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Shares outstanding, beginning of period (in shares) | 85,000 | 324,000 | 60,000 |
Shares, granted (in shares) | 27,000 | 0 | 324,000 |
Shares, vested (in shares) | (85,000) | (239,000) | (60,000) |
Shares cancelled/forfeited (in shares) | 0 | 0 | 0 |
Shares outstanding, end of period (in shares) | 27,000 | 85,000 | 324,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Shares outstanding, weighted average grant date fair value, beginning of period (in dollars per share) | $ 54.32 | $ 53.71 | $ 45.90 |
Shares, weighted average grant date fair value, vested (in dollars per share) | 48.31 | 53.49 | 45.90 |
Shares, weighted average grant date fair value, granted (in dollars per share) | 154.90 | 0 | 53.71 |
Shares, weighted average grant date fair value, cancelled/forfeited (in dollars per share) | 0 | 0 | 0 |
Shares outstanding, weighted average grant date fair value, end of period (in dollars per share) | $ 154.90 | $ 54.32 | $ 53.71 |
Service Period Awards | ELTI Plan, the 2013 New Company LTIP, the 2007 Incentive Plan and awards made outside of stock-based compensation plans | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |||
Shares outstanding, beginning of period (in shares) | 256,000 | 349,000 | 319,000 |
Shares, granted (in shares) | 190,000 | 26,000 | 287,000 |
Shares, vested (in shares) | (150,000) | (107,000) | (256,000) |
Shares cancelled/forfeited (in shares) | (9,000) | (12,000) | (1,000) |
Shares outstanding, end of period (in shares) | 287,000 | 256,000 | 349,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | |||
Shares outstanding, weighted average grant date fair value, beginning of period (in dollars per share) | $ 56.24 | $ 53.58 | $ 42.42 |
Shares, weighted average grant date fair value, vested (in dollars per share) | 64.87 | 54.15 | 59.54 |
Shares, weighted average grant date fair value, granted (in dollars per share) | 102.09 | 88.58 | 67.55 |
Shares, weighted average grant date fair value, cancelled/forfeited (in dollars per share) | 93.04 | 60.41 | 38.75 |
Shares outstanding, weighted average grant date fair value, end of period (in dollars per share) | $ 80.90 | $ 56.24 | $ 53.58 |
Stock-Based Compensation Plan81
Stock-Based Compensation Plans - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - USD ($) shares in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Employee Stock Purchase Plan [Abstract] | |||
Percentage of common stock purchase price that employee allowed to purchase at | 85.00% | ||
Maximum stock allowed to be purchased by employee in one year, value | $ 25,000 | ||
Stock sold by company to employees (in shares) | 15 | ||
Stock-based compensation expense | $ 600,000 | $ 400,000 | $ 400,000 |
Fair Value Of Assets And Liab82
Fair Value Of Assets And Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Big Fish Games deferred payment | $ (28,428) | $ 0 | $ 0 |
Change in fair value, Total Big Fish Games | 21,700 | ||
Fair Value, Inputs, Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents and restricted cash | 30,072 | 27,464 | |
Assets, Fair Value Disclosure | 30,072 | 27,464 | |
Fair Value, Inputs, Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Big Fish Games deferred payments | 54,720 | 78,800 | |
Big Fish Games earnout liability | 345,200 | 327,800 | |
Bluff contingent consideration liability | 2,331 | 2,331 | |
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value | 402,251 | $ 408,931 | |
Big Fish Games deferred payment | (28,428) | ||
Change in fair value, Big Fish Games Deferred Payments | 4,348 | ||
Change in fair value, Big Fish Games Earnout Liability | 17,400 | ||
Change in fair value, Total Big Fish Games | $ 21,748 |
Fair Value Of Assets And Liab83
Fair Value Of Assets And Liabilities - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Discount rate, fair value input | 2.80% | |||
Increase in fair values of Big Fish Games deferred payment and earnout liability | $ 21,700 | |||
Big Fish Games deferred payment | 28,428 | $ 0 | $ 0 | |
Amount one-percentage point change in discount rate would increase or decrease the fair value of Big Fish Games deferred payment and earnout liability | 2,500 | |||
Long-term debt | $ 765,532 | 765,532 | 752,854 | |
Unsecured Debt | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Long-term debt | 600,000 | 600,000 | ||
Fair value of long-term debt | 604,100 | 604,100 | $ 299,300 | |
Big Fish Games | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Big Fish Games deferred payment | $ 28,400 | $ 28,400 |
Net Income Per Common Share C84
Net Income Per Common Share Computations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015 | [1] | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Earnings Per Share [Abstract] | ||||||||||||
Income from continuing operations | $ 7,508 | $ 4,203 | $ 55,044 | $ (1,558) | $ (13,807) | $ 3,531 | $ 57,333 | $ (700) | $ 65,197 | $ 46,357 | $ 55,033 | |
Income from continuing operations allocated to participating securities | (595) | (267) | (873) | |||||||||
Numerator for basic income from continuing operations per common share | 64,602 | 46,090 | 54,160 | |||||||||
Net income | 65,197 | 46,357 | 54,900 | |||||||||
Net income allocated to participating securities | (595) | (267) | (870) | |||||||||
Numerator for basic net income per common share | 64,602 | 46,090 | 54,030 | |||||||||
Numerator for diluted income from continuing operations per common share: | 65,197 | 46,357 | 55,033 | |||||||||
Numerator for diluted income per common share | $ 65,197 | $ 46,357 | $ 54,900 | |||||||||
Denominator for net income per common share: | ||||||||||||
Basic (in shares) | 17,225 | 17,271 | 17,294 | |||||||||
Plus dilutive effect of stock options and restricted stock (in shares) | 121 | 153 | 248 | |||||||||
Plus dilutive effect of participating securities (in shares) | 230 | 165 | 396 | |||||||||
Diluted (in shares) | 17,576 | 17,589 | 17,938 | |||||||||
Basic | ||||||||||||
Income from continuing operations (in dollars per share) | $ 3.75 | $ 2.67 | $ 3.13 | |||||||||
Discontinued operations (in dollars per share) | 0 | 0 | (0.01) | |||||||||
Basic net (loss) income per common share (in dollars per share) | $ 0.44 | $ 0.24 | $ 3.12 | $ (0.09) | $ (0.81) | $ 0.21 | $ 3.23 | $ (0.04) | 3.75 | 2.67 | 3.12 | |
Diluted | ||||||||||||
Income from continuing operations (in dollars per share) | 3.71 | 2.64 | 3.07 | |||||||||
Discontinued operations (in dollars per share) | 0 | 0 | (0.01) | |||||||||
Diluted net (loss) income per common share (in dollars per share) | $ 0.43 | $ 0.24 | $ 3.10 | $ (0.09) | $ (0.81) | $ 0.20 | $ 3.21 | $ (0.04) | $ 3.71 | $ 2.64 | $ 3.06 | |
[1] | Refer to Note 12—Director and Employee Benefit Plans for discussion of an out of period adjustment during the fourth quarter of 2015. |
Segment Information - Informati
Segment Information - Information About Reported Segments (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015USD ($) | [1] | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Sep. 30, 2014USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2015USD ($)Segment | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Segment Reporting Information [Line Items] | ||||||||||||
Number of operating segments | Segment | 6 | |||||||||||
Net revenue | $ 272,387 | $ 279,765 | $ 409,239 | $ 250,910 | $ 168,122 | $ 173,483 | $ 303,472 | $ 167,141 | $ 1,212,301 | $ 812,218 | $ 779,028 | |
Net revenue | 0 | 0 | 0 | |||||||||
Racing: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 248,603 | 261,453 | 274,269 | |||||||||
Net revenue | 14,201 | 14,601 | 12,495 | |||||||||
Casinos: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 332,299 | 328,294 | 297,176 | |||||||||
TwinSpires | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 200,168 | 190,333 | 184,541 | |||||||||
Net revenue | 1,032 | 958 | 853 | |||||||||
Big Fish Games: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 413,685 | 13,855 | 0 | |||||||||
Other Investments | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 16,636 | 17,125 | 21,899 | |||||||||
Net revenue | 3,532 | 4,130 | 4,409 | |||||||||
Corporate | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 910 | 1,158 | 1,143 | |||||||||
Eliminations | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | (18,765) | (19,689) | (17,757) | |||||||||
Casino | Big Fish Games: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 193,428 | 7,627 | 0 | |||||||||
Casual free-to-play | Big Fish Games: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 125,321 | 2,098 | 0 | |||||||||
Premium | Big Fish Games: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 94,936 | 4,130 | 0 | |||||||||
Oxford Casino | Casinos: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 80,405 | 76,526 | 34,350 | |||||||||
Riverwalk Casino | Casinos: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 49,758 | 50,139 | 53,645 | |||||||||
Harlow’s Casino | Casinos: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 48,978 | 50,199 | 52,440 | |||||||||
Calder Casinos | Casinos: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 77,421 | 77,003 | 78,951 | |||||||||
Fair Grounds Slots | Casinos: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 38,408 | 40,774 | 42,156 | |||||||||
VSI | Casinos: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 36,913 | 33,653 | 35,634 | |||||||||
Saratoga | Casinos: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 416 | 0 | 0 | |||||||||
Churchill Downs | Racing: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 151,125 | 143,191 | 132,845 | |||||||||
Net revenue | 7,832 | 7,038 | 6,686 | |||||||||
Arlington | Racing: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 54,405 | 60,312 | 64,483 | |||||||||
Net revenue | 5,063 | 5,767 | 3,395 | |||||||||
Fair Grounds | Racing: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 40,343 | 38,625 | 40,677 | |||||||||
Net revenue | 1,306 | 1,089 | 1,151 | |||||||||
Calder | Racing: | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net revenue | 2,730 | 19,325 | 36,264 | |||||||||
Net revenue | $ 0 | $ 707 | $ 1,263 | |||||||||
[1] | Refer to Note 12—Director and Employee Benefit Plans for discussion of an out of period adjustment during the fourth quarter of 2015. |
Segment Information - Reconcili
Segment Information - Reconciliation of segment Adjusted EBITDA to net income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015 | [1] | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting Information [Line Items] | ||||||||||||
Segment Adjusted EBITDA | $ 335,618 | $ 202,491 | $ 176,231 | |||||||||
Change in Big Fish Games deferred revenue | (39,554) | (4,497) | 0 | |||||||||
Big Fish Games adjustments | (21,748) | (10,193) | 0 | |||||||||
Stock-based compensation expense | (13,849) | (11,931) | (21,482) | |||||||||
MVG interest expense, net | (2,098) | (2,546) | (170) | |||||||||
Calder exit costs | (13,854) | (2,298) | 0 | |||||||||
Other charges and recoveries, net | 5,833 | (5,429) | (1,204) | |||||||||
Depreciation and amortization | (109,706) | (68,257) | (61,750) | |||||||||
Interest income (expense), net | (28,553) | (20,822) | (6,119) | |||||||||
Income tax provision | (46,892) | (30,161) | (30,473) | |||||||||
Income from continuing operations | $ 7,508 | $ 4,203 | $ 55,044 | $ (1,558) | $ (13,807) | $ 3,531 | $ 57,333 | $ (700) | 65,197 | 46,357 | 55,033 | |
Discontinued operations, net of income taxes | 0 | 0 | (133) | |||||||||
Net income | 65,197 | 46,357 | 54,900 | |||||||||
Foreign currency translation, net of tax | (463) | (125) | 0 | |||||||||
Comprehensive income | 64,734 | 46,232 | 54,900 | |||||||||
Racing | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Segment Adjusted EBITDA | 71,841 | 61,160 | 50,275 | |||||||||
Casinos | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Segment Adjusted EBITDA | 108,516 | 101,106 | 80,631 | |||||||||
TwinSpires | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Segment Adjusted EBITDA | 51,533 | 45,282 | 49,122 | |||||||||
Big Fish Games | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Segment Adjusted EBITDA | 108,018 | 3,837 | 0 | |||||||||
Other Investments | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Segment Adjusted EBITDA | (37) | (3,857) | 809 | |||||||||
Corporate | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Segment Adjusted EBITDA | $ (4,253) | $ (5,037) | $ (4,606) | |||||||||
[1] | Refer to Note 12—Director and Employee Benefit Plans for discussion of an out of period adjustment during the fourth quarter of 2015. |
Segment Information - Equity in
Segment Information - Equity in Earnings (Losses) of Unconsolidated Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Equity in income (losses) of unconsolidated investments | $ 11,180 | $ 6,328 | $ (4,142) |
Casinos | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Equity in income (losses) of unconsolidated investments | 10,929 | 8,900 | (3,718) |
TwinSpires | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Equity in income (losses) of unconsolidated investments | 0 | (68) | (848) |
Other Investments | |||
Segment Reporting, Other Significant Reconciling Item [Line Items] | |||
Equity in income (losses) of unconsolidated investments | $ 251 | $ (2,504) | $ 424 |
Segment Information - Total Ass
Segment Information - Total Asset Information For Segments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | $ 2,277,444 | $ 2,356,253 | |
Capital expenditures | 43,510 | 54,486 | $ 48,771 |
Racing | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | 437,070 | 456,034 | |
Capital expenditures | 12,280 | 33,919 | 20,184 |
Casinos | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | 631,280 | 621,489 | |
Capital expenditures | 18,784 | 7,715 | 13,643 |
TwinSpires | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | 177,624 | 178,694 | |
Capital expenditures | 4,306 | 5,778 | 5,908 |
Big Fish Games | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | 947,112 | 996,918 | |
Capital expenditures | 6,431 | 116 | 0 |
Other Investments | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | 37,033 | 34,083 | |
Capital expenditures | 809 | 5,240 | 8,375 |
Corporate | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Assets | 47,325 | 69,035 | |
Capital expenditures | $ 900 | $ 1,718 | $ 661 |
HRTV Equity Investment Divest89
HRTV Equity Investment Divestiture (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Schedule of Equity Method Investments [Line Items] | ||||
Proceeds from sale of equity investment | $ 6,000 | $ 0 | $ 0 | |
Gain from sale of ownership interest | $ 5,817 | $ 0 | $ 0 | |
HRTV, LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Proceeds from sale of equity investment | $ 6,000 | |||
Other Investments | HRTV, LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Gain from sale of ownership interest | $ 5,800 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 19, 2015 | Dec. 31, 2014 |
Related Party Transaction [Line Items] | ||
Stock Repurchased During Period (in shares) | 691,000 | |
Stock Repurchased and Retired During Period, Value | $ 61.6 | |
Number of days for average common stock repurchase price | 20 days | |
The Duchossois Group | ||
Related Party Transaction [Line Items] | ||
Stock Repurchased During Period (in shares) | 945,000 | |
Stock Repurchased and Retired During Period, Value | $ 138.1 | |
Repurchase price (in dollars per share) | $ 146.13 |
HRE Trust Fund Proceeds (Detail
HRE Trust Fund Proceeds (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Dec. 31, 2013 | Jul. 10, 2013 |
HRE Trust Fund Proceeds [Line Items] | |||
HRE Trust Fund Proceeds | 15.00% | ||
Gross Proceeds from HRE Trust | $ 7.9 | $ 23 | |
Purses | |||
HRE Trust Fund Proceeds [Line Items] | |||
Gross Proceeds from HRE Trust | 3.6 | ||
Other Income | |||
HRE Trust Fund Proceeds [Line Items] | |||
Gross Proceeds from HRE Trust | $ 4.2 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Feb. 24, 2016 | Feb. 17, 2016 | Dec. 31, 2015 | Oct. 28, 2015 | Dec. 01, 2014 | Apr. 23, 2013 |
Subsequent Event [Line Items] | ||||||
Authorized stock repurchase amount | $ 150,000,000 | $ 150,000,000 | $ 100,000,000 | |||
Remaining unused authorization for stock repurchase program | 11,900,000 | |||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Authorized stock repurchase amount | $ 150,000,000 | |||||
Secured Debt | ||||||
Subsequent Event [Line Items] | ||||||
Term Loan | $ 188,800,000 | $ 200,000,000 | ||||
Secured Debt | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Maximum aggregate commitment for Senior Secured Credit Facility | $ 500,000,000 | |||||
Term Loan | $ 188,750,000 |
Quarterly Results of Operatio93
Quarterly Results of Operations (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2015 | [1] | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||
Net revenue | $ 272,387 | $ 279,765 | $ 409,239 | $ 250,910 | $ 168,122 | $ 173,483 | $ 303,472 | $ 167,141 | $ 1,212,301 | $ 812,218 | $ 779,028 | |
(Loss) income from operations | $ 7,508 | $ 4,203 | $ 55,044 | $ (1,558) | $ (13,807) | $ 3,531 | $ 57,333 | $ (700) | $ 65,197 | $ 46,357 | $ 55,033 | |
Basic net (loss) income per common share (in dollars per share) | $ 0.44 | $ 0.24 | $ 3.12 | $ (0.09) | $ (0.81) | $ 0.21 | $ 3.23 | $ (0.04) | $ 3.75 | $ 2.67 | $ 3.12 | |
Diluted net (loss) income per common share (in dollars per share) | $ 0.43 | $ 0.24 | $ 3.10 | $ (0.09) | $ (0.81) | $ 0.20 | $ 3.21 | $ (0.04) | $ 3.71 | $ 2.64 | $ 3.06 | |
[1] | Refer to Note 12—Director and Employee Benefit Plans for discussion of an out of period adjustment during the fourth quarter of 2015. |
Schedule II - Valuation and Q94
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for doubtful accounts: | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance Beginning of Year | $ 4,246 | $ 4,338 | $ 1,885 |
Acquired Balances | 0 | 0 | 0 |
Charged to Expense | 1,265 | 1,710 | 3,785 |
Deductions | (1,750) | (1,802) | (1,332) |
Balance End of Year | 3,761 | 4,246 | 4,338 |
Deferred income tax asset valuation allowance: | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance Beginning of Year | 1,274 | 1,213 | 1,334 |
Additions | (222) | 75 | 168 |
Charged to Expense | (313) | 158 | |
Deductions | 0 | (14) | (289) |
Balance End of Year | $ 1,052 | $ 1,274 | $ 1,213 |