UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For year ended December 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________ to _________________
Commission File Number 0-1469
CHURCHILL DOWNS INCORPORATED
Exact name of registrant as specified in its charter
KENTUCKY 61-0156015
State or other jurisdiction of IRS Employer Identification No.
incorporation or organization
700 CENTRAL AVENUE, LOUISVILLE, KENTUCKY 40208
Address of principal executive offices Zip Code
Registrant's telephone number, including area code 502-636-4400
Securities registered pursuant to Section 12(b) of the Act:
None None
Title of each class registered Name of each exchange on which registered
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, NO PAR VALUE
Title of class
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment of this
Form 10-K. (_________)
As of March 14, 2001, 13,048,717 shares of the Registrant's Common Stock were
outstanding, and the aggregate market value of the shares held by nonaffiliates
of the Registrant was $166,432,105.
Portions of the Registrant's Proxy Statement for its Annual Meeting of
Shareholders to be held on June 21, 2001 are incorporated by reference herein in
response to Items 10, 11, 12 and 13 of Part III of Form 10-K. The exhibit index
is located on pages 56 to 59.
1
CHURCHILL DOWNS INCORPORATED
I N D E X
Pages
ITEM 8. Financial Statements and Supplementary Data 3
SIGNATURES Signature Page 27
EXHIBIT 23 Consent of PricewaterhouseCoopers LLP 28
2
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
Churchill Downs Incorporated
In our opinion, the consolidated financial statements listed in the index
appearing under Item 14 (a) (1), present fairly, in all material respects, the
financial position of Churchill Downs Incorporated and its subsidiaries as of
December 31, 2000, 1999 and 1998, and the results of their operations and their
cash flows for each of the three years in the period ended December 31, 2000, in
conformity with accounting principles generally accepted in the United States of
America. In addition, in our opinion, the financial statement schedule listed in
the index appearing under Item 14 (a) (2), presents fairly, in all material
respects, the information set forth therein when read in conjunction with the
related consolidated financial statements. These financial statements and
financial statement schedule are the responsibility of management; our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits. We conducted our audits of
these statements in accordance with auditing standards generally accepted in the
United States of America which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
\s\ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Louisville, Kentucky
February 27, 2001
3
CHURCHILL DOWNS INCORPORATED
CONSOLIDATED BALANCE SHEETS
December 31,
(in thousands)
ASSETS 2000 1999 1998
---- ---- ----
Current assets:
Cash and cash equivalents $ 10,807 $ 29,060 $ 6,380
Restricted cash 9,006 - -
Accounts receivable 32,535 24,279 11,968
Other current assets 2,932 2,751 1,049
--------- --------- ---------
Total current assets 55,280 56,090 19,397
Other assets 8,116 4,740 3,796
Plant and equipment, net 342,767 274,882 83,088
Intangible assets, net 63,841 62,334 8,370
--------- --------- ---------
$470,004 $398,046 $114,651
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 38,396 $ 23,012 $ 6,381
Accrued expenses 27,115 15,603 8,248
Dividends payable 6,508 4,927 3,762
Income taxes payable 1,091 336 258
Deferred revenue 11,353 10,860 8,412
Long-term debt, current portion 2,324 552 127
--------- --------- ---------
Total current liabilities 86,787 55,290 27,188
Long-term debt 155,716 180,898 13,538
Other liabilities 9,837 8,263 1,756
Deferred income taxes 15,179 15,474 6,938
Commitments and contingencies - - -
Shareholders' equity:
Preferred stock, no par value;
250 shares authorized; no shares issued - - -
Common stock, no par value; 50,000 shares
authorized; issued: 13,019 shares in
2000; 9,854 shares in 1999; and 7,525
shares in 1998 123,227 71,634 8,927
Retained earnings 79,323 66,667 56,599
Note receivable for common stock (65) (65) (65)
Deferred compensation costs - (115) (230)
--------- --------- ---------
202,485 138,121 65,231
--------- --------- ---------
$470,004 $398,046 $114,651
========= ========= ---------
The accompanying notes are an integral part of the consolidated
financial statements.
4
CHURCHILL DOWNS INCORPORATED
CONSOLIDATED STATEMENTS OF EARNINGS
Years ended December 31,
(in thousands, except per share data)
2000 1999 1998
---- ---- ----
Net revenues $362,016 $258,427 $147,300
Operating expenses:
Purses 128,982 97,585 50,193
Other direct expenses 158,624 109,783 68,788
--------- --------- ---------
287,606 207,368 118,981
--------- --------- ---------
Gross profit 74,410 51,059 28,319
Selling, general and administrative
expenses 27,832 18,546 11,176
--------- --------- ---------
Operating income 46,578 32,513 17,143
--------- --------- ---------
Other income (expense):
Interest income 1,023 847 680
Interest expense (14,848) (7,839) (896)
Miscellaneous, net (166) 334 342
--------- --------- ---------
(13,991) (6,658) 126
--------- --------- ---------
Earnings before provision for income
taxes 32,587 25,855 17,269
Provision for income taxes (13,423) (10,879) (6,751)
--------- --------- ---------
Net earnings $ 19,164 $ 14,976 $ 10,518
========= ========= =========
Earnings per common share data:
Basic $1.77 $1.74 $1.41
Diluted $1.75 $1.72 $1.40
Weighted average shares outstanding:
Basic 10,849 8,598 7,460
Diluted 10,940 8,718 7,539
The accompanying notes are an integral part of the consolidated
financial statements.
5
CHURCHILL DOWNS INCORPORATED
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Years ended December 31, 2000, 1999 and 1998
(in thousands, except per share data)
Note Deferred
Common Stock Retained Receivable Compensation
Shares Amount Earnings Common Stock Costs Total
Balances December 31, 1997 7,317 $ 3,615 $49,843 $ (65) - $ 53,393
Net earnings 10,518 10,518
Deferred compensation 344 $ (344) -
Deferred compensation
amortization 114 114
Issuance of common stock at
$24.25 per share in conjunction
with RCA acquisition 200 4,850 4,850
Issuance of common stock for
employee benefit plans 8 118 118
Cash dividends, $.50 per share (3,762) (3,762)
------ -------- -------- ---------- ------------ ---------
Balances December 31, 1998 7,525 8,927 56,599 (65) (230) 65,231
Net earnings 14,976 14,976
Deferred compensation
amortization 115 115
Issuance of common stock at
$29.00 per share 2,300 62,122 62,122
Issuance of common stock for
employee benefit plans 29 585 19 604
Cash dividends, $.50 per share (4,927) (4,927)
------ -------- -------- ---------- ------------ ---------
Balances December 31, 1999 9,854 71,634 66,667 (65) (115) 138,121
Net earnings 19,164 19,164
Deferred compensation
amortization 115 115
Issuance of common stock at
$16.28 per share in conjunction
with Arlington merger 3,150 51,290 51,290
Issuance of common stock for
employee benefit plans 15 303 303
Cash dividends, $.50 per share (6,508) (6,508)
------ -------- -------- ---------- ------------ ---------
Balances December 31, 2000 13,019 $123,227 $79,323 $ (65) $ - $202,485
====== ======== ======== ========== ============ =========
The accompanying notes are an integral part of the consolidated
financial statements.
6
CHURCHILL DOWNS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended December 31,
(in thousands)
2000 1999 1998
--------- --------- --------
Cash flows from operating activities:
Net earnings $ 19,164 $ 14,976 $ 10,518
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization, includes
amortization of loan origination costs
classified as interest expense of $609
in 2000 and $463 in 1999 17,286 11,306 5,744
Deferred income taxes (275) (502) (121)
Deferred compensation 115 115 114
Increase (decrease) in cash resulting from
changes in operating assets and liabilities:
Restricted cash (9,006) - -
Accounts receivable 9,312 (8,971) (2,973)
Other current assets (32) (1,119) (293)
Accounts payable (2,474) 15,837 (2,211)
Accrued expenses (2,200) 2,932 386
Income taxes payable 755 98 71
Deferred revenue (4,631) (231) 758
Other assets and liabilities (783) 5,291 (1,177)
---------- ---------- ---------
Net cash provided by operating
activities 27,231 39,732 10,816
---------- ---------- ---------
Cash flows from investing activities:
Acquisition of businesses, net of cash acquired
of $4,200 in 1999 and $517 in 1998 - (228,303) (17,232)
Proceeds from the sale of Training Facility
assets 4,969 - -
Additions to plant and equipment, net (22,419) (12,083) (3,524)
---------- ---------- ---------
Net cash used in investing activities (17,450) (240,386) (20,756)
---------- ---------- ---------
Cash flows from financing activities:
Increase (decrease) in long-term debt, net 2,487 (1,295) (140)
Borrowings on bank line of credit 146,618 269,500 22,000
Repayments of bank line of credit (172,515) (102,500) (11,000)
Payment of loan origination costs - (2,867) (280)
Payment of dividends (4,927) (3,762) (3,658)
Capital contribution by minority interest in
subsidiary - 1,551 -
Common stock issued 303 62,707 118
---------- ---------- ---------
Net cash (used in) provided by financing
activities (28,034) 223,334 7,040
---------- ---------- ---------
Net (decrease) increase in cash and cash
equivalents (18,253) 22,680 (2,900)
Cash and cash equivalents, beginning of period 29,060 6,380 9,280
---------- ---------- ---------
Cash and cash equivalents, end of period $ 10,807 $ 29,060 $ 6,380
========== ========== =========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 13,794 $ 6,858 $ 497
Income taxes $ 13,117 $ 10,796 $ 7,130
Schedule of Non-cash Activities:
Issuance of common stock related to
merger with Arlington Park $ 51,291 - -
Issuance of common stock related to the
acquisition of RCA - - $ 4,850
Invoicing for future events $ 4,706 $ 2,678 $ 678
Plant & equipment additions included in
accounts payable $ 292 $ 502 $ 95
Compensation expense - - $ 344
The accompanying notes are an integral part of the consolidated
financial statements.
7
CHURCHILL DOWNS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share data)
1. Basis of Presentation and Summary of Significant Accounting Policies
--------------------------------------------------------------------
Basis of Presentation
Churchill Downs Incorporated (the "Company") conducts pari-mutuel wagering
on live race meetings for Thoroughbred horses and participates in
intrastate and interstate simulcast wagering at its racetracks in Kentucky,
California, Florida and Illinois. In addition, the Company, through its
subsidiary Hoosier Park L.P. ("Hoosier Park"), conducts pari-mutuel
wagering on live Thoroughbred, Quarter Horse and Standardbred horse races
and participates in interstate simulcast wagering. The Company's Kentucky,
California, Florida, Illinois and Indiana operations are subject to
regulation by the racing commissions of the respective states.
The accompanying consolidated financial statements include the accounts of
the Company, its wholly owned subsidiaries, Churchill Downs California
Company d/b/a Hollywood Park("Hollywood Park"), Calder Race Course, Inc.
and Tropical Park, Inc. which hold licenses to conduct horse racing at
Calder Race Course ("Calder Race Course"), Arlington International
Racecourse, Inc., Arlington Management Services, Inc. and Turf Club of
Illinois, Inc.(collectively referred to as "Arlington Park"), Ellis Park
Race Course, Inc. ("Ellis Park"), Churchill Downs Management Company
("CDMC"), Churchill Downs Investment Company ("CDIC") and Anderson Park
Inc. ("Anderson"), and its majority-owned subsidiary, Hoosier Park,
and Charlson Broadcast Technologies, LLC ("CBT"). All significant
intercompany balances and transactions have been eliminated.
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the dates of the financial statements and the reported
amounts of revenues and expenses during the reporting periods. Actual
results could differ from those estimates.
A Summary of Significant Accounting Policies Followed
Cash Equivalents
The Company considers investments with original maturities of three months
or less to be cash equivalents. The Company has, from time to time, cash in
the bank in excess of federally insured limits.
Restricted Cash
Restricted cash represents refundable deposits and amounts due to horsemen
for purses, stakes and awards.
8
CHURCHILL DOWNS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share data)
1. Basis of Presentation and Summary of Significant Accounting
-----------------------------------------------------------
Policies(cont'd)
---------
Plant and Equipment
Plant and equipment are recorded at cost. Depreciation is calculated using
the straight-line and accelerated methods over the estimated useful lives
of the related assets as follows: 10 to 40 years for grandstands and
buildings, 3 to 18 years for equipment, 5 to 10 years for furniture and
fixtures and 10 to 20 years for tracks and other improvements.
Intangible Assets
Amortization of the cost of acquisitions in excess of fair value of assets
acquired, the Indiana racing license and the Arlington Park trademarks are
provided over 40 years using the straight-line method. Loan origination
costs on the Company's line of credit are being amortized under the
effective interest method over 60 months, the term of the loan. The
intangible asset relating to the Illinois Horse Race Equity fund will not
be amortized until revenues relating to the intangible are recongnized.
Long-lived Assets
In the event thatfacts and circumstances indicate that the carrying amount
of tangible or intangible long-lived assets or groups of assets may be
impaired, an evaluation of recoverability would be performed. If an
evaluation is required, the estimated future undiscounted cash flows
associated with the assets would be compared to the assets' carrying amount
to determine if a write-down to market value or discounted cash flow value
is required.
Interest Rate Swaps
The Company utilizes interest rate swap contracts to hedge exposure to
interest rate fluctuations on its variable rate debt. The differential
between the fixed interest rate paid and the variable interest rate
received under the interest rate swap contracts is recognized as an
adjustment to interest expense in the period in which the differential
occurs. Differential amounts incurred under the rate swap contracts
but not settled in cash at the end of a reporting period are recorded as
receivables or payables in the balance sheet. Any gains or losses realized
on the early termination of interest rate swap contracts are deferred and
amortized as an adjustment to interest expense over the emaining term
of the underlying debt instrument.
Deferred Revenue
Deferred revenue includes primarily advance sales related to the Kentucky
Derby and Oaks races in Kentucky and other advanced billings on racing
events.
9
CHURCHILL DOWNS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share data)
1. Basis of Presentation and Summary of Significant Accounting
-----------------------------------------------------------
Policies (cont'd)
---------
Stock-Based Compensation
The Company accounts or stock-based compensation in accordance with
Accounting Principles Board Opinion No. 25 "Accounting for Stock Issued to
Employees". In accordance with Statement of Financial Accounting Standards
(SFAS) No. 123 "Accounting for Stock-based Compensation" pro forma
disclosure of net earnings and earnings per share are presented in Note
10 as if SFAS No. 123 had been applied.
Reclassifications
Certain financial statement amounts have been reclassified in the prior
years to conform to current year presentation.
2. Acquisitions and Other Transactions
-----------------------------------
On September 8, 2000, three of the Company's wholly owned subsidiaries
merged with Arlington International Racecourse, Inc., Arlington Management
Services, Inc. and Turf Club of Illinois, Inc. (collectively referred to as
"Arlington Park"). The Company issued 3.15 million shares of its common
stock, with a fair value of $51.3 million, to Duchossois Industries, Inc.
("DII") and could issue up to an additional 1.25 million shares of common
stock dependent upon the opening of the riverboat casino at Rosemont,
Illinois, and the amount of subsidies received by Arlington as a result
thereof. For this purpose, the purchase price was recorded based upon the
fair value of shares issued to DII at the announcement of the mergers on
June 23, 2000, plus approximately $2.2 million in merger-related costs.
The acquired tangible and intangible assets of $87.7 million and assumed
liabilities of $34.1 million of Arlington Park were recorded at their
estimated fair values on the merger date. The allocation of the purchase
price may require adjustment in the Company's future financial statements
based on a final determination of the fair value of certain liabilities
assumed in the merger. The Company also received $5.8 million in management
fees related to the Arlington Park management contract that was in effect
from July 1 through the closing of the Arlington Park merger on September
8,2000. The merger was accounted for by the Company as an asset purchase
and, accordingly, the financial position and results of operations of
Arlington Park have been included in the Company's consolidated financial
statements since the date of merger.
On April 21, 2000, Keeneland Association, Inc. purchased the Company's
Thoroughbred training and boarding facility known as Kentucky Horse Center
for a cash payment of $5.0 million, which approximated its carrying value.
10
CHURCHILL DOWNS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share data)
2. Acquisitions and Other Transactions (cont'd)
-----------------------------------
On September 10, 1999, the Company acquired the assets of the Hollywood
Park and the Hollywood Park Casino in Inglewood, California, including
approximately 240 acres of land upon which the racetrack and casino are
located, for a purchase price of $140.0 million plus approximately $2.5
million in transaction costs. The Company leases the Hollywood Park Casino
to the seller under a 10-year lease with one 10-year renewal option. The
lease provides for annual rent of $3.0 million, subject to adjustment
during the renewal period. The entire purchase price of $142.5 million was
allocated to the acquired assets and liabilities based on their fair
values on the acquisition date. The acquisition was accounted for by the
Company as an asset purchase and, accordingly, the financial position
and results of operations of Hollywood Park have been included in the
Company's consolidated financial statements since the date of acquisition.
On April 23, 1999, the Company acquired all of the outstanding stock of
Calder Race Course, Inc. and Tropical Park, Inc. from KE Acquisition Corp.
for a purchase price of $86 million cash plus a closing net working capital
adjustment of approximately $2.9 million cash and $0.6 million in
transaction costs. The purchase included Calder Race Course in Miami and
the licenses held by Calder Race Course, Inc. and Tropical Park, Inc. to
conduct horse racing at Calder Race Course. The purchase price, including
additional costs, of $89.5 million was allocated to the acquired tangible
and intangible assets of $103.9 million and assumed liabilities of $14.4
million based on their fair values on the acquisition date with the excess
of $49.4 million being recorded as goodwill, which is being amortized over
40 years. The acquisition was accounted for by the Company under the
purchase method of accounting and, accordingly, the financial position and
results of operations of Calder Race Course, Inc. and Tropical Park, Inc.
have been included in the Company's consolidated financial statements since
the date of acquisition.
On April 21, 1998, the Company acquired from TVI Corp. ("TVI") all of the
outstanding stock of Racing Corporation of America ("RCA"). As part of the
transaction, TVI received 0.2 million shares of the Company's common
stock valued at $4.9 million with the remaining balance of $17.1 million
paid from cash on hand and a draw on the Company's bank line of credit.
The purchase price of $22.6 million, including $0.6 million in transaction
costs was allocated to acquired tangible and intangible assets of $23.8
million and assumed liabilities of $7.9 million based on their fair values
on the acquisition date with the excess of $6.7 million being recorded as
goodwill which is being amortized over 40 years. The acquisition was
accounted for by the Company under the purchase method of accounting and,
accordingly, the results of operations of RCA subsequent to April 20,
1998, are included in the Company's consolidated results of operations.
11
CHURCHILL DOWNS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share data)
2. Acquisitions and Other Transactions (cont'd)
-----------------------------------
Following are the unaudited pro forma results of operations as if the
September 8, 2000 merger with Arlington Park, the September 10, 1999
acquisition of Hollywood Park, the July 20, 1999 stock issuance and the
April 23, 1999 acquisition of Calder Race Course all had occurred on
January 1,1999:
December 31,
2000 1999
---- ----
Net revenues $425,077 $357,284
Net earnings $18,556 $14,222
Earnings per common
share:
Basic $1.43 $1.10
Diluted $1.42 $1.09
Weighted average shares
outstanding:
Basic 13,015 12,983
Diluted 13,106 13,103
This unaudited pro forma financial information is not necessarily
indicative of the operating results that would have occurred had the
transactions been consummated as of January 1, 1999, nor is it necessarily
indicative of future operating results.
3. Plant and Equipment
-------------------
Plant and equipment is comprised of the following:
2000 1999 1998
---- ---- ----
Land $132,034 $ 98,445 $ 7,632
Grandstands and buildings 191,172 167,648 73,377
Equipment 23,703 15,845 4,979
Furniture and fixtures 20,342 8,057 5,341
Tracks and other
improvements 44,927 40,271 37,998
Construction in process 2,439 2,411 249
--------- --------- --------
414,617 332,677 129,576
Accumulated depreciation (71,850) (57,795) (46,488)
--------- --------- --------
$342,767 $274,882 $83,088
========= ========= ========
Depreciation expense was approximately $14,917, $9,506, and $5,490 for
the years ended December 31, 2000, 1999 and 1998.
12
CHURCHILL DOWNS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share data)
4. Intangibles assets
------------------
The Company's intangible assets are comprised of the following:
2000 1999 1998
---- ---- ----
Cost of acquisitions in excess of fair value
of net assets acquired $59,433 $59,433 $6,449
Illinois Horse Race Equity Fund 3,307 - -
Arlington Park trademarks 494 - -
Indiana racing license 2,085 2,085 2,085
Loan origination costs 3,076 3,076 280
--------- -------- -------
68,395 64,594 8,814
Accumulated amortization (4,554) (2,260) (444)
-------- -------- -------
$63,841 $62,334 $8,370
======== ======== =======
Amortization expense related to the loan origination costs of $609 and
$463 for the years ended December 31, 2000 and 1999 is classified as
interest expense. Amortization expense for other intangibles of
approximately $1,760, $1,353 and $253 for the years ended December 31,
2000, 1999 and 1998 is classified in operating expenses.
5. Income Taxes
------------
Components of the provision for income taxes are as follows:
2000 1999 1998
---- ---- ----
Currently payable:
Federal $11,347 $ 9,528 $5,795
State & local 2,374 1,853 1,077
-------- -------- -------
13,721 11,381 6,872
-------- -------- -------
Deferred:
Federal (246) (439) 46
State & local (52) (63) 6
-------- -------- -------
(298) (502) 52
-------- -------- -------
Reversal of valuation allowance - - (173)
-------- -------- -------
$13,423 $10,879 $6,751
======== ======== =======
The Company's income tax expense is different from the amount computed
by applying the statutory federal income tax rate to income before
taxes as follows:
2000 1999 1998
---- ---- ----
Federal statutory tax on
earnings before income tax $11,405 $9,049 $5,942
State income taxes, net of
federal income tax benefit 1,502 1,154 747
Permanent differences and other 516 676 235
Reversal of valuation allowance - - (173)
------- ------- -------
$13,423 $10,879 $6,751
======= ======= =======
13
CHURCHILL DOWNS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share data)
5. Income Taxes (cont'd)
------------
Components of the Company's deferred tax assets and liabilities are as
follows:
2000 1999 1998
---- ---- ----
Deferred tax liabilities:
Property & equipment in excess
of tax basis $15,419 $16,288 $7,805
Racing license in excess of tax basis 650 650 650
Other 189 66 -
------- ------- ------
Deferred tax liabilities 16,258 17,004 8,455
------- ------- ------
Deferred tax assets:
Supplemental benefit plan 372 337 316
State net operating loss carryforwards - 638 857
Allowance for uncollectible receivables 404 345 87
Other 926 830 437
------- ------- ------
Deferred tax assets 1,702 2,150 1,697
------- ------- ------
Net deferred tax liability $14,556 $14,854 $6,758
======= ======= ======
Income taxes are classified in the balance sheet as follows:
Net non-current deferred tax liability $15,179 $15,474 $6,938
Net current deferred tax asset (623) (620) (180)
-------- -------- -------
$14,556 $14,854 $6,758
======== ======== =======
6. Shareholders' Equity
--------------------
On September 8, 2000, the Company issued 3.15 million shares of the
Company's common stock to DII in conjunction with the Arlington Park
merger.
On July 20, 1999 the Company issued 2.3 million shares of the Company's
common stock at a price of $29 per share. The total proceeds net of
offering expenses was $62.1 million, and was used for the repayment of
bank borrowings.
On March 19, 1998, the Company's Board of Directors authorized a 2-for-1
stock split of its common stock effective March 30, 1998. All share and
per share amounts in the accompanying consolidated financial statements
have been restated to give effect to the stock split.
On March 19,1998, the Company's Board of Directors approved a stockholder
rights plan, which grants each shareholder the right to purchase a
fraction of a share of Series 1998 preferred stock at the rate of one
right for each share of the Company's common stock. This plan expires on
March 19, 2008.
14
CHURCHILL DOWNS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share data)
7. Employee Benefit Plans
----------------------
The Company has a profit-sharing plan that covers all employees with one
year or more of service and one thousand or more worked hours. The
Company will match contributions made by the employee up to 3% of the
employee's annual compensation. The Company will also match at 50%,
contributions made by the employee up to an additional 2%. The Company
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%. The Company's contribution to the plan for the years ended
December 31, 2000, 1999 and 1998 was approximately $840, $819 and $806
respectively.
The Company is 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. Contributions are
made in accordance with negotiated labor contracts. Retirement plan
expense for the years ended December 31, 2000, 1999 and 1998 was
approximately $1,706, $665 and $258, respectively. The Company's policy
is to fund this expense as accrued.
The estimated present value of future payments under a supplemental
benefit plan is charged to expense over the period of active employment
of the employees covered under the plan. Supplemental benefit plan
expense for the years ended December 31, 2000, 1999 and 1998 was
approximately $87, $55 and $55, respectively.
8. Long-Term Debt
--------------
The Company has a $250 million line of credit under a revolving loan
facility through a syndicate of banks to meet working capital and other
short-term requirements and to provide funding for acquisitions. The
interest rate on the borrowing is based upon LIBOR plus 75 to 250
additional basis points, which is determined by certain Company
financial ratios. The weighted average interest rate was 7.94% on the
outstanding balance at December 31, 2000. There was $153.2 million
outstanding on the line of credit at December 31, 2000 compared to
$178.0 million and $11.0 million outstanding at December 31, 1999 and
1998, respectively. The line of credit is collateralized by
substantially all of the assets of the Company and its wholly owned
subsidiaries, and matures in 2004.
The Company has entered into interest rate swap contracts with major
financial institutions. Under terms of these separate contracts we
receive a LIBOR based variable interest rate and pay a fixed interest
rate of 7.015% and 7.30% on notional amounts of $35.0 million each which
mature in March 2003 and May 2002, respectively. The Company has also
entered into a contract which pays a fixed interest rate of 6.40% on a
notional amount of $30.0 million and matures in November 2002. The
variable interest rate paid on the contracts is determined based on
LIBOR on the last day of each month, which is consistent with the
variable rate determination on the underlying debt.
15
CHURCHILL DOWNS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share data)
8. Long-Term Debt (cont'd)
--------------
On May 31, 1996, the Company entered into a Partnership Interest
Purchase Agreement with Conseco, LLC ("Conseco") for the sale of 10% of
the Company's partnership interest in Hoosier Park to Conseco. The
transaction also included assumption by Conseco of a loan to the Company
of approximately $2.6 million, of which the balance is $2.4 million at
December 31, 2000. The loan requires interest of prime plus 2% (11.5% at
December 31, 2000) payable monthly with principal due November 2004. The
note is collateralized by 10% of the assets of Hoosier Park.
During 2000 the Company entered into a short-term note payable which
expires in April 2001, bears interest at approximately prime, and is
secured by a blanket lien on CBT's assets. There was $2.0 million
outstanding on the note payable at December 31, 2000.
Future aggregate maturities of long-term debt are as follows:
2001 $ 2,324
2002 157
2003 17
2004 155,542
--------
$158,040
9. Operating Leases
----------------
The Company has a long-term operating lease for the land in Anderson,
Indiana on which its Hoosier Park facility is located and an operating
lease for the Indianapolis off-track betting facility ("OTB"). The
Anderson lease expires in 2003, with an option to extend the lease for
three additional ten year terms. The Indianapolis lease expires in 2009,
with an option to extend the lease for two additional five year terms.
The leases include provisions for minimum lease payments as well as
contingent lease payments based on handle or revenues.
The Company also has a long term operating lease agreement for land in
Arlington Heights, Illinois on which the backside facilities of
Arlington Park are located and two operating lease agreements for
Arlington Park OTBs. The Arlington lease expires in 2010 with an option
to purchase, the Mud Bug OTB lease expires in 2006 with an option to
extend the lease for an additional five years and the Waukegan OTB lease
expires in 2003, with an option to purchase.
The Company also leases certain totalisator and audio/visual equipment
and services as well as land and facilities. The Company's total rent
expense for all operating leases was approximately $7,629, $6,832 and
$4,022 for the years ended December 31, 2000, 1999 and 1998. Total annual
rent expense for contingent lease payments was approximately $6,991,
$6,287 and $3,942 for the years ended December 31, 2000, 1999 and 1998.
16
CHURCHILL DOWNS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share data)
9. Operating Leases (cont'd)
----------------
Future minimum operating lease payments are as follows:
Minimum Lease
Payment
-------
2001 $ 1,856
2002 1,725
2003 1,485
2004 1,270
2005 1,251
Thereafter 4,082
-------
$11,669
10. Stock-Based Compensation Plans
------------------------------
Employee Stock Options:
The Company sponsors both the "Churchill Downs Incorporated 1997 Stock
Option Plan" (the "97 Plan") and the "Churchill Downs Incorporated 1993
Stock Option Plan" (the "93 Plan"), stock-based incentive compensation
plans, which are described below. The Company applies APB Opinion 25 and
related interpretations in accounting for both the plans. However, pro
forma disclosures are as if the Company adopted the cost recognition
provisions of SFAS 123 are presented below.
The Company is authorized to issue up to 600 shares and 400 shares of
common stock (as adjusted for the stock split) under the 97 Plan and 93
Plan, respectively, pursuant to "Awards" granted in the form of
incentive stock options (intended to qualify under Section 422 of the
Internal Revenue Code of 1986, as amended) and non-qualified stock
options. Awards may be granted to selected employees of the Company or
any subsidiary.
Both the 97 Plan and the 93 Plan provide 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. The exercise price of any
nonqualified stock option is not so limited by the plans. The Company
granted stock options in 2000, 1999 and 1998. The stock options granted
in those years have contractual terms of 10 years and varying vesting
dates, ranging from one to three years following the date of grant. In
accordance with APB 25, the Company has not recognized any compensation
cost for these stock options.
17
CHURCHILL DOWNS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share data)
10. Stock-Based Compensation Plans (cont'd)
------------------------------
A summary of the status of the Company's stock options as of December
31, 2000, 1999 and 1998 and the changes during the year ended on those
dates is presented below:
2000 1999 1998
---------------------- ---------------------- ----------------------
Weighted Weighted Weighted
# of Shares Average # of Shares Average # of Shares Average
Underlying Exercise Underlying Exercise Underlying Exercise
Options Prices Options Prices Options Prices
Outstanding at beginning
of the year 600 $21.62 478 $20.86 426 $19.45
Granted 179 $27.60 154 $23.70 52 $32.50
Exercised 4 $19.56 22 $19.30 - -
Canceled - - - - - -
Forfeited 2 $30.24 10 $22.53 - -
Expired - - - - - -
Outstanding at end
of year 773 $22.98 600 $21.62 478 $20.86
Exercisable at
end of year 393 $19.46 311 $19.09 248 $21.02
Weighted-average fair value per
share of options granted
during the year $15.32 $12.01 $10.42
The fair value of each stock option granted is estimated on the date of
grant using the Black- Scholes option-pricing model with the following
weighted-average assumptions for grants in 2000, 1999 and 1998,
respectively: dividend yields ranging from 1.40% to 1.83%; risk- free
interest rates are different for each grant and range from 5.05% to
6.76%; and the expected lives of options are different for each grant
and range from approximately 6.5 to 9.3 years, and expected volatility
rates of 55.23%, 43.74%, and 24.86% for years ending December 31, 2000,
1999 and 1998.
The following table summarizes information about stock options
outstanding at December 31, 2000:
Options Outstanding Options Exercisable
---------------------------------------------- ----------------------------
Number Weighted Average Weighted Number Weighted
Range of Outstanding Remaining Average Exercisable Average
Exercise Prices at 12/31/00 Contributing Life Exercise Price at 12/31/00 Exercise Price
---------------- ------------ ----------------- -------------- ------------ --------------
$13.40 to $16.75 18 4.5 $15.75 18 $15.75
$16.76 to $20.10 273 5.2 $18.93 273 $18.93
$20.11 to $23.45 238 7.4 $22.17 102 $21.54
$23.46 to $26.80 8 9.1 $24.13 - -
$26.81 to $30.15 178 9.8 $27.84 - -
$30.16 to $33.50 58 8.0 $32.67 - -
---- --- ------ --- ------
TOTAL 773 7.2 $22.98 393 $19.09
18
CHURCHILL DOWNS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share data)
10. Stock-Based Compensation Plans (cont'd)
------------------------------
Employee Stock Purchase Plan:
Under the Company's Employee Stock Purchase Plan (the "Employee Stock
Purchase Plan"), the Company is authorized to sell, pursuant to
short-term stock options, shares of its common stock to its full-time
(or part-time for at least 20 hours per week and at least five months
per year) employees at a discount from the common stock's fair market
value. The Employee Stock Purchase Plan operates on the basis of
recurring, consecutive one-year periods. Each period commences on August
1 and ends on the next following July 31.
On the first day of each 12-month period, August 1, the Company offers
to each eligible employee the opportunity to purchase common stock.
Employees elect to participate for each period to have a designated
percentage of their compensation withheld (after-tax) and applied to the
purchase of shares of common stock on the last day of the period, July
31. The Employee Stock Purchase 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 Employee Stock
Purchase Plan valued at more than $25 for each calendar year.
Under the Employee Stock Purchase Plan, the Company sold 12 shares of
common stock to 173 employees pursuant to options granted on August 1,
1999, and exercised on July 30, 2000. Because the plan year overlaps the
Company's fiscal year, the number of shares to be sold pursuant to
options granted on August 1, 2000, can only be estimated because the
2000 plan year is not yet complete. The Company's estimate of options
granted in 2000 under the Plan is based on the number of shares sold to
employees under the Plan for the 1999 plan year, adjusted to reflect the
change in the number of employees participating in the Plan in 2000.
19
CHURCHILL DOWNS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share data)
10. Stock-Based Compensation Plans (cont'd)
------------------------------
A summary of the status of the Company's stock options under the
Employee Stock Purchase Plan as of December 31, 2000, 1999 and 1998 and
the changes during the year ended on those dates is presented below:
2000 1999 1998
-------------------- --------------------- ---------------------
Weighted Weighted Weighted
# of Shares Average # of Shares Average # of Shares Average
Underlying Exercise Underlying Exercise Underlying Exercise
Options Prices Options Prices Options Prices
Outstanding at beginning
of the year 9 $19.00 5 $24.00 8 $14.60
Adjustment to prior year
estimated grants 2 $19.00 2 $24.00 0 $14.60
Granted 16 $19.50 9 $23.90 5 $31.45
Exercised 11 $19.00 7 $24.00 8 $14.60
Forfeited - - - - - -
Expired - - - - - -
Outstanding at end
of year 16 $19.50 9 $23.90 5 $31.45
Exercisable at end
of year - - - - - -
Weighted-average
Fair value per share
of options granted
during the year $7.79 $8.67 $12.16
Had the compensation cost for the Company's stock-based compensation
plans been determined consistent with SFAS 123, the Company's net
earnings and earnings per common share for 2000, 1999 and 1998 would
approximate the pro forma amounts presented below:
2000 1999 1998
-------- ------- -------
Net earnings:
As reported .............. $19,164 $14,976 $10,518
Pro-forma ................ $18,286 $14,451 $10,087
Earnings per common share:
As reported
Basic ................ $1.77 $ 1.74 $1.41
Diluted .............. $1.75 $ 1.72 $1.40
Pro-forma
Basic ................ $1.69 $ 1.68 $1.35
Diluted .............. $1.67 $ 1.66 $1.34
The effects of applying SFAS 123 in this pro forma disclosure are not
indicative of future amounts. The Company anticipates making awards in
the future under its stock-based compensation plans.
20
CHURCHILL DOWNS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share data)
11. Fair Values of Financial Instruments
------------------------------------
The following methods and assumptions were used by the Company in
estimating its fair value disclosures for financial instruments:
Cash and Cash Equivalents - The carrying amount reported in the balance
sheet for cash and cash equivalents approximates its fair value.
Long-Term Debt - The carrying amounts of the Company's borrowings under
its line of credit agreements and other long-term debt approximates fair
value, based upon current interest rates.
Interest Rate Swaps - The carrying amounts of the Company's interest
rate swaps are a payable of an approximate mark-to-market value of $558
and $77, at December 31, 2000 and 1999, respectively, using current
interest rates.
12. Commitments and contingencies
-----------------------------
Hollywood Park received cease and desist orders from the California
Regional Water Quality Control Board addressing storm water runoff and
dry weather discharge issues. We retained an engineering firm to develop
a plan for compliance and to construct certain drainage and waste
disposal systems. The construction of the system has been completed. As
part of the 1999 asset acquisition of Hollywood Park, the seller agreed
to indemnify our Company in the amount of $5.0 million for costs
incurred in relation to the waste water runoff issue. Amounts under the
indemnification have been expended and the ultimate cost to the Company
was $1.7 million, incurred during 2000.
The septic system at the Ellis Park facility must be replaced with
hook-up to city sewers. The cost of the hook-up is estimated by the city
of Henderson, Kentucky to be $1.2 million. Ellis Park will seek partial
reimbursement from the state of Kentucky. The project is estimated to be
completed by November 2001.
It is not anticipated that the Company will have any material liability
as a result of compliance with environmental laws with respect to any of
the Company's property. Except as discussed herein, compliance with
environmental laws has not affected the ability to develop and operate
the Company's properties and the Company is not otherwise subject to any
material compliance costs in connection with federal or state
environmental laws.
21
CHURCHILL DOWNS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share data)
13. Earnings Per Common Share Computations
--------------------------------------
The following is a reconciliation of the numerator and denominator of
the earnings per common share computations:
2000 1999 1998
---- ---- ----
Net earnings (numerator) amounts used
for basic and diluted per share $19,164 $14,976 $10,518
======= ======= =======
Weighted average shares (denominator) of
common stock outstanding per share
computations:
Basic 10,849 8,598 7,460
Plus dilutive effect of stock options 91 120 79
------ ----- -----
Diluted 10,940 8,718 7,539
====== ===== =====
Earnings per common share:
Basic $1.77 $1.74 $1.41
Diluted $1.75 $1.72 $1.40
Options to purchase approximately 73, 47 and 41 shares for the years
ended December 31, 2000, 1999 and 1998, respectively, were not included
in the computation of earnings per common share-assuming dilution
because the options' exercise prices were greater than the average
market price of the common shares.
22
CHURCHILL DOWNS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share data)
14. Segment Information
-------------------
The Company has adopted SFAS No. 131 "Disclosures about Segments of an
Enterprise and Related Information." The Company has determined that it
currently operates in the following seven segments: (1) Churchill Downs
racetrack and the Louisville Sports Spectrum simulcast facility (2)
Hollywood Park racetrack and its on-site simulcast facility (3) Calder
Race Course (4) Arlington Park and its OTBs (5) Ellis Park racetrack and
its on- site simulcast facility, (6) Hoosier Park racetrack and its
on-site simulcast facility and the other three Indiana simulcast
facilities and (7) Other investments, including CBT and the Company's
other various equity interests, which are not material. Eliminations
include the elimination of management fees and other intersegment
transactions. As a result of a reorganization for internal reporting
during 2000, the Company's segment disclosures are presented on a new
basis to correspond with internal reporting for corporate revenues and
expenses which, for the years ended December 31, 2000 and 1999, are now
reported separate of Churchill Downs racetrack revenues and expenses.
The Company did not track corporate revenues and expenses during 1998,
therefore, corporate revenues and expenses for 1998 are not reported
separate of Churchill Downs racetrack reveneus and expenses.
Most of the Company's revenues are generated from commissions on
pari-mutuel wagering at the Company's racetracks and OTBs, plus
simulcast fees, Indiana riverboat admissions subsidy revenue,
admissions, concessions revenue, sponsorship revenues, licensing rights
and broadcast fees, lease income and other sources.
The accounting policies of the segments are the same as those described
in the "Summary of Significant Accounting Policies" in the Company's
annual report to stockholders for the year ended December 31, 2000.
Earnings before interest, taxes, depreciation and amortization
("EBITDA") should not be considered as an alternative to, or more
meaningful than, net income (as determined in accordance with accounting
principles generally accepted in the United States of America) as a
measure of our operating results or cash flows (as determined in
accordance with accounting principles generally accepted in the United
States of America) or as a measure of our liquidity.
23
CHURCHILL DOWNS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share data)
14. Segment Information (cont'd)
-------------------
The table below presents information about reported segments for the years ended
December 31, 2000, 1999 and 1998:
December 31,
------------
2000 1999 1998
---- ---- ----
Net revenues:
Churchill Downs $ 89,547 $ 82,429 $ 80,925
Hollywood Park 105,628 30,494 -
Calder Race Course 77,552 72,418 -
Arlington Park 14,781 - -
Hoosier Park 51,250 51,280 47,744
Ellis Park 16,119 19,653 17,386
Other investments 13,069 6,151 2,497
-------- --------- ---------
367,946 262,425 148,552
Corporate revenues 778 - -
Eliminations (6,708) (3,998) (1,252)
--------- --------- ---------
$362,016 $258,427 $147,300
========= ========= =========
EBITDA:
Churchill Downs $21,715 $17,789 $14,416
Hollywood Park 18,898 3,842 -
Calder Race Course 16,718 17,946 -
Arlington Park (427) - -
Hoosier Park 5,920 6,423 5,599
Ellis Park 936 2,071 2,305
Other investments 7,815 1,314 909
-------- -------- -------
71,575 49,385 23,229
Corporate expenses (8,486) (5,679) -
-------- -------- -------
$63,089 $43,706 $23,229
======== ======== =======
Operating income (loss):
Churchill Downs $17,857 $14,240 $10,700
Hollywood Park 14,407 2,574 -
Calder Race Course 13,397 15,564 -
Arlington Park (1,133) - -
Hoosier Park 4,538 5,246 4,499
Ellis Park (481) 721 1,422
Other investments 6,252 (153) 522
-------- -------- -------
54,837 38,192 17,143
Corporate expenses (8,259) (5,679) -
-------- -------- -------
$46,578 $32,513 $17,143
======== ======== =======
24
CHURCHILL DOWNS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(in thousands, except per share data)
14. Segment Information (cont'd)
-------------------
As of December 31,
-----------------
2000 1999 1998
---- ---- ----
Total Assets:
Churchill Downs $358,081 $345,909 $ 89,427
Hollywood Park 174,232 153,126 -
Calder Race Course 127,666 114,396 -
Arlington Park 74,554 - -
Hoosier Park 32,718 32,559 31,732
Ellis Park 21,381 25,015 23,038
Other investments 45,390 312,272 71,109
--------- --------- ---------
834,022 983,277 215,306
Eliminations (364,018) (585,231) (100,655)
--------- --------- ---------
$470,004 $398,046 $114,651
========= ========= =========
Following is a reconciliation of total EBITDA to income before provision for
income taxes:
December 31,
-----------
2000 1999 1998
---- ---- ----
Total EBITDA $63,089 $43,706 $23,229
Depreciation and amortization (16,677) (10,859) (5,744)
Interest income (expense), net (13,825) (6,992) (216)
-------- -------- --------
Earnings before provision
for income taxes $32,587 $25,855 $17,269
======== ======== ========
25
Supplementary Financial Information(Unaudited) Common Stock Information
(In thousands, except per share data) Per Share of Common Stock
-------------------------------------------------
Operating Net Basic Diluted
Net Income Earnings Earnings Earnings Bid Price
Revenues (Loss) (Loss) (Loss) (Loss) Dividends High Low
-------- ------- ------- ------ ------ --------- ---- ---
2000 $362,016 $46,578 $19,164 $1.77 $1.75
Fourth Quarter $100,897 $6,806 $2,286 $0.18 $0.17 $0.50 $35.69 $25.25
Third Quarter 103,536 15,824 7,303 0.69 0.68 25.88 21.69
Second Quarter 131,938 35,488 18,340 1.86 1.85 26.00 21.75
First Quarter 25,645 (11,540) (8,765) (0.89) (0.89) 26.25 21.00
- --------------------------------------------------------------------------------------------------
1999 $258,427 $32,513 $14,976 $1.74 $1.72
Fourth Quarter $93,548 $8,784 $3,128 $0.32 $0.31 $0.50 $26.00 $20.13
Third Quarter 63,076 3,635 1,192 0.13 0.12 33.63 22.50
Second Quarter 84,140 24,891 13,666 1.82 1.79 35.75 26.00
First Quarter 17,663 (4,797) (3,010) (0.40) (0.40) 38.75 26.25
- --------------------------------------------------------------------------------------------------
1998 $147,300 $17,143 $10,518 $1.41 $1.40
Fourth Quarter $31,242 $(1,291) $(780) $(0.10) $(0.10) $0.50 $36.44 $27.25
Third Quarter 33,299 (1,016) (655) (0.09) (0.09) 41.44 27.63
Second Quarter 67,374 22,220 13,522 1.81 1.79 43.25 24.00
First Quarter 15,385 (2,770) (1,569) (0.21) (0.21) 25.31 19.31
- --------------------------------------------------------------------------------------------------
The Company's Common Stock is traded on the National Association of Securities
Dealers, Inc.'s National Market("Nasdaq") under the symbol CHDN. As of March 14,
2001, there were approximately 3,420 shareholders of record.
Earnings (loss) per share and other per share amounts have been retroactively
adjusted for the 2-for-1 stock split with a record date of March 30, 1998.
On July 20, 1999 the Company issued 2.3 million shares of common stock at a
public offering price of $29 per share.
In September 2000, we issued 3.15 million shares of common stock at a price of
$16.28 related to the Arlington Park merger.
Quarterly earnings (loss) per share figures may not equal total earnings (loss)
per share for the year due in part to the fluctuation of the market price of the
stock.
The above table sets forth the high and low bid quotations (as reported by
Nasdaq) and dividend payment information for the Company's Common Stock during
its last three years.
26
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
CHURCHILL DOWNS INCORPORATED
March 23, 2001 /s/Robert L. Decker
----------------------------------
Robert L. Decker
Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)
March 23, 2001 /s/Michael E. Miller
----------------------------------
Michael E. Miller
Senior Vice President, Finance
(Principal Accounting Officer)
27