CHURCHILL DOWNS INCORPORATED
Recast Segment Operating Results
(unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Year Ended December 31, |
| (in millions) | March 31,
2018 | | June 30,
2018 | | September 30,
2018 | | December 31, 2018 | | 2018 | | 2017 |
| Net revenue: | | | | | | | | | | | |
| Churchill Downs | $ | 2.0 |
| | $ | 154.9 |
| | $ | 10.8 |
| | $ | 28.1 |
| | $ | 195.8 |
| | $ | 161.3 |
|
| Online Wagering | 63.2 |
| | 93.7 |
| | 71.8 |
| | 61.5 |
| | 290.2 |
| | 255.6 |
|
| Gaming | 111.5 |
| | 108.1 |
| | 110.4 |
| | 119.5 |
| | 449.5 |
| | 389.3 |
|
| All Other | 12.6 |
| | 22.7 |
| | 28.3 |
| | 9.9 |
| | 73.5 |
| | 76.4 |
|
| Total net revenue | 189.3 |
| | 379.4 |
| | 221.3 |
| | 219.0 |
| | 1,009.0 |
| | 882.6 |
|
| Operating expense: | | | | | | | | | | | |
| Churchill Downs | 9.9 |
| | 58.0 |
| | 19.5 |
| | 28.9 |
| | 116.3 |
| | 89.5 |
|
| Online Wagering | 44.0 |
| | 59.4 |
| | 49.2 |
| | 43.5 |
| | 196.1 |
| | 170.2 |
|
| Gaming | 79.6 |
| | 78.1 |
| | 81.2 |
| | 92.1 |
| | 331.0 |
| | 293.8 |
|
| All Other | 16.3 |
| | 22.0 |
| | 23.7 |
| | 13.9 |
| | 75.9 |
| | 75.9 |
|
| Selling, general and administrative expense | 18.4 |
| | 23.2 |
| | 21.8 |
| | 27.2 |
| | 90.6 |
| | 83.5 |
|
| Impairment of tangible and other intangible assets | — |
| | — |
| | — |
| | — |
| | — |
| | 21.7 |
|
| Transaction expense, net | 1.4 |
| | 2.1 |
| | 5.4 |
| | 1.4 |
| | 10.3 |
| | 2.3 |
|
| Total operating expense | 169.6 |
| | 242.8 |
| | 200.8 |
| | 207.0 |
| | 820.2 |
| | 736.9 |
|
| Operating income | $ | 19.7 |
| | $ | 136.6 |
| | $ | 20.5 |
| | $ | 12.0 |
| | $ | 188.8 |
| | $ | 145.7 |
|
NOTE: There were no changes to line items in our consolidated statements of comprehensive income below operating income for any annual or interim period.
CHURCHILL DOWNS INCORPORATED
Recast Segment Revenue
(unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Year Ended December 31, |
| (in millions) | March 31,
2018 | | June 30,
2018 | | September 30,
2018 | | December 31, 2018 | | 2018 | | 2017 |
| Net revenue from external customers: | | | | | | | | | | | |
| Churchill Downs: | | | | | | | | | | | |
| Churchill Downs Racetrack | $ | 2.0 |
| | $ | 154.9 |
| | $ | 8.5 |
| | $ | 15.6 |
| | $ | 181.0 |
| | $ | 161.3 |
|
| Derby City Gaming | — |
| | — |
| | 2.3 |
| | 12.5 |
| | 14.8 |
| | — |
|
| Total Churchill Downs | 2.0 |
| | 154.9 |
| | 10.8 |
| | 28.1 |
| | 195.8 |
| | 161.3 |
|
| Online Wagering: | | | | | | | | | | | |
| TwinSpires | 63.2 |
| | 93.7 |
| | 71.8 |
| | 61.5 |
| | 290.2 |
| | 255.6 |
|
| Online Sports Betting and iGaming | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Total Online Wagering | 63.2 |
| | 93.7 |
| | 71.8 |
| | 61.5 |
| | 290.2 |
| | 255.6 |
|
| Gaming: | | | | | | | | | | | |
| Oxford | 24.2 |
| | 26.2 |
| | 28.9 |
| | 22.7 |
| | 102.0 |
| | 90.8 |
|
| Riverwalk | 14.4 |
| | 13.6 |
| | 12.8 |
| | 13.7 |
| | 54.5 |
| | 48.2 |
|
| Harlow’s | 13.3 |
| | 12.5 |
| | 12.1 |
| | 12.3 |
| | 50.2 |
| | 50.0 |
|
| Calder | 24.9 |
| | 26.0 |
| | 24.0 |
| | 23.7 |
| | 98.6 |
| | 87.9 |
|
| Fair Grounds and VSI | 34.4 |
| | 29.5 |
| | 24.5 |
| | 29.3 |
| | 117.7 |
| | 111.1 |
|
| Ocean Downs | — |
| | — |
| | 8.1 |
| | 17.8 |
| | 25.9 |
| | — |
|
| Presque Isle | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Lady Luck Nemacolin | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Saratoga | 0.3 |
| | 0.3 |
| | — |
| | — |
| | 0.6 |
| | 1.3 |
|
| Total Gaming | 111.5 |
| | 108.1 |
| | 110.4 |
| | 119.5 |
| | 449.5 |
| | 389.3 |
|
| All Other | 12.6 |
| | 22.7 |
| | 28.3 |
| | 9.9 |
| | 73.5 |
| | 76.4 |
|
| Net revenue from external customers | $ | 189.3 |
| | $ | 379.4 |
| | $ | 221.3 |
| | $ | 219.0 |
| | $ | 1,009.0 |
| | $ | 882.6 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Year Ended December 31, |
| (in millions) | March 31,
2018 | | June 30,
2018 | | September 30,
2018 | | December 31, 2018 | | 2018 | | 2017 |
| Intercompany net revenue: | | | | | | | | | | | |
| Churchill Downs | $ | 0.3 |
| | $ | 9.4 |
| | $ | 1.0 |
| | $ | 2.0 |
| | $ | 12.7 |
| | $ | 11.4 |
|
| Online Wagering | 0.4 |
| | 0.4 |
| | 0.3 |
| | 0.2 |
| | 1.3 |
| | 1.1 |
|
| Gaming | 1.0 |
| | 0.1 |
| | 0.1 |
| | 0.5 |
| | 1.7 |
| | 1.6 |
|
| All Other | 2.4 |
| | 3.6 |
| | 3.2 |
| | 2.0 |
| | 11.2 |
| | 10.8 |
|
| Eliminations | (4.1 | ) | | (13.5 | ) | | (4.6 | ) | | (4.7 | ) | | (26.9 | ) | | (24.9 | ) |
| Intercompany net revenue | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
|
CHURCHILL DOWNS INCORPORATED
Recast Adjusted EBITDA by Segment
(unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, 2018 |
| (in millions) | Churchill Downs | | Online Wagering | | Gaming | | Total Segments | | All Other | | Eliminations | | Total |
| Net revenue | $ | 208.5 |
| | $ | 291.5 |
| | $ | 451.2 |
| | $ | 951.2 |
| | $ | 84.7 |
| | $ | (26.9 | ) | | $ | 1,009.0 |
|
| | | | | | | | | | | | | | |
| Taxes & purses | (41.3 | ) | | (15.2 | ) | | (153.4 | ) | | (209.9 | ) | | (16.9 | ) | | — |
| | (226.8 | ) |
| Marketing & advertising | (5.7 | ) | | (6.0 | ) | | (15.5 | ) | | (27.2 | ) | | (1.2 | ) | | 0.3 |
| | (28.1 | ) |
| Salaries & benefits | (23.7 | ) | | (9.2 | ) | | (68.9 | ) | | (101.8 | ) | | (24.9 | ) | | — |
| | (126.7 | ) |
| Content expense | (2.2 | ) | | (152.0 | ) | | (4.1 | ) | | (158.3 | ) | | (8.4 | ) | | 24.6 |
| | (142.1 | ) |
| Selling, general & administrative expense | (5.3 | ) | | (5.9 | ) | | (18.6 | ) | | (29.8 | ) | | (42.0 | ) | | 1.1 |
| | (70.7 | ) |
| Other operating expense | (28.0 | ) | | (24.2 | ) | | (60.0 | ) | | (112.2 | ) | | (18.5 | ) | | 0.9 |
| | (129.8 | ) |
| Other income | 0.1 |
| | — |
| | 43.3 |
| | 43.4 |
| | 0.6 |
| | — |
| | 44.0 |
|
| Adjusted EBITDA | $ | 102.4 |
| | $ | 79.0 |
| | $ | 174.0 |
| | $ | 355.4 |
| | $ | (26.6 | ) | | $ | — |
| | $ | 328.8 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, 2017 |
| (in millions) | Churchill Downs | | Online Wagering | | Gaming | | Total Segments | | All Other | | Eliminations | | Total |
| Net revenue | $ | 172.7 |
| | $ | 256.7 |
| | $ | 390.9 |
| | $ | 820.3 |
| | $ | 87.2 |
| | $ | (24.9 | ) | | $ | 882.6 |
|
| | | | | | | | | | | | | | |
| Taxes & purses | (34.1 | ) | | (14.7 | ) | | (130.7 | ) | | (179.5 | ) | | (17.6 | ) | | — |
| | (197.1 | ) |
| Marketing & advertising | (2.7 | ) | | (8.2 | ) | | (13.0 | ) | | (23.9 | ) | | (1.3 | ) | | 0.4 |
| | (24.8 | ) |
| Salaries & benefits | (19.3 | ) | | (9.9 | ) | | (63.4 | ) | | (92.6 | ) | | (24.2 | ) | | — |
| | (116.8 | ) |
| Content expense | (2.4 | ) | | (125.0 | ) | | (4.0 | ) | | (131.4 | ) | | (8.8 | ) | | 22.4 |
| | (117.8 | ) |
| Selling, general & administrative expense | (4.0 | ) | | (6.9 | ) | | (17.1 | ) | | (28.0 | ) | | (39.7 | ) | | 1.2 |
| | (66.5 | ) |
| Other operating expense | (21.3 | ) | | (22.1 | ) | | (56.1 | ) | | (99.5 | ) | | (18.3 | ) | | 0.9 |
| | (116.9 | ) |
| Other income | 0.1 |
| | — |
| | 42.0 |
| | 42.1 |
| | 1.4 |
| | — |
| | 43.5 |
|
| Adjusted EBITDA | $ | 89.0 |
| | $ | 69.9 |
| | $ | 148.6 |
| | $ | 307.5 |
| | $ | (21.3 | ) | | $ | — |
| | $ | 286.2 |
|
CHURCHILL DOWNS INCORPORATED
Recast Adjusted EBITDA by Segment
(unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2018 |
| (in millions) | Churchill Downs | | Online Wagering | | Gaming | | Total Segments | | All Other | | Eliminations | | Total |
| Net revenue | $ | 2.3 |
| | $ | 63.6 |
| | $ | 112.5 |
| | $ | 178.4 |
| | $ | 15.0 |
| | $ | (4.1 | ) | | $ | 189.3 |
|
| | | | | | | | | | | | | | |
| Taxes & purses | (0.7 | ) | | (3.4 | ) | | (38.0 | ) | | (42.1 | ) | | (4.0 | ) | | — |
| | (46.1 | ) |
| Marketing & advertising | (0.3 | ) | | (0.8 | ) | | (3.6 | ) | | (4.7 | ) | | (0.1 | ) | | 0.1 |
| | (4.7 | ) |
| Salaries & benefits | (3.1 | ) | | (2.1 | ) | | (16.9 | ) | | (22.1 | ) | | (5.3 | ) | | — |
| | (27.4 | ) |
| Content expense | (0.4 | ) | | (32.2 | ) | | (0.9 | ) | | (33.5 | ) | | (1.8 | ) | | 3.3 |
| | (32.0 | ) |
| Selling, general & administrative expense | (1.0 | ) | | (1.4 | ) | | (3.8 | ) | | (6.2 | ) | | (9.1 | ) | | 0.3 |
| | (15.0 | ) |
| Other operating expense | (2.8 | ) | | (5.8 | ) | | (13.7 | ) | | (22.3 | ) | | (3.9 | ) | | 0.4 |
| | (25.8 | ) |
| Other income | — |
| | — |
| | 10.8 |
| | 10.8 |
| | 0.1 |
| | — |
| | 10.9 |
|
| Adjusted EBITDA | $ | (6.0 | ) | | $ | 17.9 |
| | $ | 46.4 |
| | $ | 58.3 |
| | $ | (9.1 | ) | | $ | — |
| | $ | 49.2 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, 2018 |
| (in millions) | Churchill Downs | | Online Wagering | | Gaming | | Total Segments | | All Other | | Eliminations | | Total |
| Net revenue | $ | 164.3 |
| | $ | 94.1 |
| | $ | 108.2 |
| | $ | 366.6 |
| | $ | 26.3 |
| | $ | (13.5 | ) | | $ | 379.4 |
|
| | | | | | | | | | | | | | |
| Taxes & purses | (27.3 | ) | | (4.6 | ) | | (35.5 | ) | | (67.4 | ) | | (5.0 | ) | | — |
| | (72.4 | ) |
| Marketing & advertising | (3.2 | ) | | (3.1 | ) | | (3.5 | ) | | (9.8 | ) | | (0.5 | ) | | 0.1 |
| | (10.2 | ) |
| Salaries & benefits | (9.7 | ) | | (2.4 | ) | | (15.6 | ) | | (27.7 | ) | | (7.2 | ) | | — |
| | (34.9 | ) |
| Content expense | (0.9 | ) | | (49.8 | ) | | (1.1 | ) | | (51.8 | ) | | (2.7 | ) | | 12.8 |
| | (41.7 | ) |
| Selling, general & administrative expense | (1.2 | ) | | (1.6 | ) | | (4.0 | ) | | (6.8 | ) | | (9.6 | ) | | 0.4 |
| | (16.0 | ) |
| Other operating expense | (14.2 | ) | | (8.2 | ) | | (15.7 | ) | | (38.1 | ) | | (5.2 | ) | | 0.2 |
| | (43.1 | ) |
| Other income | 0.1 |
| | — |
| | 12.9 |
| | 13.0 |
| | 0.4 |
| | — |
| | 13.4 |
|
| Adjusted EBITDA | $ | 107.9 |
| | $ | 24.4 |
| | $ | 45.7 |
| | $ | 178.0 |
| | $ | (3.5 | ) | | $ | — |
| | $ | 174.5 |
|
CHURCHILL DOWNS INCORPORATED
Recast Adjusted EBITDA by Segment
(unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2018 |
| (in millions) | Churchill Downs | | Online Wagering | | Gaming | | Total Segments | | All Other | | Eliminations | | Total |
| Net revenue | $ | 11.8 |
| | $ | 72.1 |
| | $ | 110.5 |
| | $ | 194.4 |
| | $ | 31.5 |
| | $ | (4.6 | ) | | $ | 221.3 |
|
| | | | | | | | | | | | | | |
| Taxes & purses | (3.6 | ) | | (4.2 | ) | | (37.9 | ) | | (45.7 | ) | | (6.2 | ) | | — |
| | (51.9 | ) |
| Marketing & advertising | (0.6 | ) | | (0.6 | ) | | (3.6 | ) | | (4.8 | ) | | (0.6 | ) | | 0.1 |
| | (5.3 | ) |
| Salaries & benefits | (4.5 | ) | | (2.1 | ) | | (16.8 | ) | | (23.4 | ) | | (7.6 | ) | | — |
| | (31.0 | ) |
| Content expense | (0.5 | ) | | (37.3 | ) | | (0.9 | ) | | (38.7 | ) | | (2.0 | ) | | 4.2 |
| | (36.5 | ) |
| Selling, general & administrative expense | (0.8 | ) | | (1.4 | ) | | (4.5 | ) | | (6.7 | ) | | (10.0 | ) | | 0.2 |
| | (16.5 | ) |
| Other operating expense | (4.6 | ) | | (5.7 | ) | | (14.8 | ) | | (25.1 | ) | | (5.7 | ) | | 0.1 |
| | (30.7 | ) |
| Other income | — |
| | — |
| | 12.7 |
| | 12.7 |
| | — |
| | — |
| | 12.7 |
|
| Adjusted EBITDA | $ | (2.8 | ) | | $ | 20.8 |
| | $ | 44.7 |
| | $ | 62.7 |
| | $ | (0.6 | ) | | $ | — |
| | $ | 62.1 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended December 31, 2018 |
| (in millions) | Churchill Downs | | Online Wagering | | Gaming | | Total Segments | | All Other | | Eliminations | | Total |
| Net revenue | $ | 30.1 |
| | $ | 61.7 |
| | $ | 120.0 |
| | $ | 211.8 |
| | $ | 11.9 |
| | $ | (4.7 | ) | | $ | 219.0 |
|
| | | | | | | | | | | | | | |
| Taxes & purses | (9.7 | ) | | (3.0 | ) | | (42.0 | ) | | (54.7 | ) | | (1.7 | ) | | — |
| | (56.4 | ) |
| Marketing & advertising | (1.6 | ) | | (1.5 | ) | | (4.8 | ) | | (7.9 | ) | | — |
| | — |
| | (7.9 | ) |
| Salaries & benefits | (6.4 | ) | | (2.6 | ) | | (19.6 | ) | | (28.6 | ) | | (4.8 | ) | | — |
| | (33.4 | ) |
| Content expense | (0.4 | ) | | (32.7 | ) | | (1.2 | ) | | (34.3 | ) | | (1.9 | ) | | 4.3 |
| | (31.9 | ) |
| Selling, general & administrative expense | (2.3 | ) | | (1.5 | ) | | (6.3 | ) | | (10.1 | ) | | (13.3 | ) | | 0.2 |
| | (23.2 | ) |
| Other operating expense | (6.4 | ) | | (4.5 | ) | | (15.8 | ) | | (26.7 | ) | | (3.7 | ) | | 0.2 |
| | (30.2 | ) |
| Other income | — |
| | — |
| | 6.9 |
| | 6.9 |
| | 0.1 |
| | — |
| | 7.0 |
|
| Adjusted EBITDA | $ | 3.3 |
| | $ | 15.9 |
| | $ | 37.2 |
| | $ | 56.4 |
| | $ | (13.4 | ) | | $ | — |
| | $ | 43.0 |
|
CHURCHILL DOWNS INCORPORATED
Reconciliation of Comprehensive Income to Adjusted EBITDA
(unaudited)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Year Ended December 31, |
| (in millions) | March 31,
2018 | | June 30,
2018 | | September 30,
2018 | | December 31, 2018 | | 2018 | | 2017 |
| Comprehensive income | $ | 182.4 |
| | $ | 102.9 |
| | $ | 56.5 |
| | $ | 11.4 |
| | $ | 353.2 |
| | $ | 140.4 |
|
| Foreign currency translation, net of tax | (0.6 | ) | | — |
| | 0.2 |
| | (0.2 | ) | | (0.6 | ) | | 0.1 |
|
| Net change in pension benefits, net of tax | 0.2 |
| | 0.2 |
| | (0.4 | ) | | 0.2 |
| | 0.2 |
| | — |
|
| Net income | 182.0 |
| | 103.1 |
| | 56.3 |
| | 11.4 |
| | 352.8 |
| | 140.5 |
|
| Income from discontinued operations, net of tax | (167.9 | ) | | 0.1 |
| | 1.7 |
| | (4.1 | ) | | (170.2 | ) | | (18.1 | ) |
| Income from continuing operations, net of tax | 14.1 |
| | 103.2 |
| | 58.0 |
| | 7.3 |
| | 182.6 |
| | 122.4 |
|
| Additions: | | | | | | | | | | | |
| Depreciation and amortization | 13.8 |
| | 15.3 |
| | 16.7 |
| | 17.8 |
| | 63.6 |
| | 56.0 |
|
| Net interest expense | 9.6 |
| | 9.7 |
| | 9.9 |
| | 10.9 |
| | 40.1 |
| | 49.3 |
|
| Loss on extinguishment of debt | — |
| | — |
| | — |
| | — |
| | — |
| | 20.7 |
|
| Income tax provision | 2.6 |
| | 32.8 |
| | 16.7 |
| | (0.8 | ) | | 51.3 |
| | (19.9 | ) |
| EBITDA | $ | 40.1 |
| | $ | 161.0 |
| | $ | 101.3 |
| | $ | 35.2 |
| | $ | 337.6 |
| | $ | 228.5 |
|
| | | | | | | | | | | | |
| Adjustments to EBITDA: | | | | | | | | | | | |
| Selling, general and administrative: | | | | | | | | | | | |
| Stock-based compensation expense | $ | 2.8 |
| | $ | 6.4 |
| | $ | 3.9 |
| | $ | 4.6 |
| | 17.7 |
| | $ | 16.0 |
|
| Other, net | — |
| | — |
| | 0.2 |
| | (0.8 | ) | | (0.6 | ) | | 0.5 |
|
| Pre-opening expense | 0.6 |
| | 0.7 |
| | 2.6 |
| | 0.9 |
| | 4.8 |
| | 0.5 |
|
| Other income, expense: | | | | | | | | | | | |
| Interest, depreciation and amortization expense related to equity investments | 4.3 |
| | 4.3 |
| | 3.6 |
| | 1.7 |
| | 13.9 |
| | 16.7 |
|
| Gain on Ocean Downs/Saratoga transaction | — |
| | — |
| | (54.9 | ) | | — |
| | (54.9 | ) | | — |
|
| Transaction expense, net | 1.4 |
| | 2.1 |
| | 5.4 |
| | 1.4 |
| | 10.3 |
| | 2.3 |
|
| Impairment of tangible and intangible assets | — |
| | — |
| | — |
| | — |
| | — |
| | 21.7 |
|
| Total adjustments to EBITDA | 9.1 |
| | 13.5 |
| | (39.2 | ) | | 7.8 |
| | (8.8 | ) | | 57.7 |
|
| Total Adjusted EBITDA | $ | 49.2 |
| | $ | 174.5 |
| | $ | 62.1 |
| | $ | 43.0 |
| | $ | 328.8 |
| | $ | 286.2 |
|
| | | | | | | | | | | | |
| Adjusted EBITDA by segment: | | | | | | | | | | | |
| Churchill Downs | $ | (6.0 | ) | | $ | 107.9 |
| | $ | (3.0 | ) | | $ | 3.4 |
| | $ | 102.3 |
| | $ | 89.0 |
|
| Online Wagering | 17.9 |
| | 24.4 |
| | 20.8 |
| | 15.9 |
| | 79.0 |
| | 69.9 |
|
| Gaming | 46.4 |
| | 45.7 |
| | 44.9 |
| | 37.1 |
| | 174.1 |
| | 148.6 |
|
| Total Segments | 58.3 |
| | 178.0 |
| | 62.7 |
| | 56.4 |
| | 355.4 |
| | 307.5 |
|
| All Other | (9.1 | ) | | (3.5 | ) | | (0.6 | ) | | (13.4 | ) | | (26.6 | ) | | (21.3 | ) |
| Adjusted EBITDA | $ | 49.2 |
| | $ | 174.5 |
| | $ | 62.1 |
| | $ | 43.0 |
| | $ | 328.8 |
| | $ | 286.2 |
|
