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Item 2. Management’s Discussion and Analysis

2024-04-24 compared with 2023-10-25 · 119 added, 195 removed, 162 unchanged (66% of the section changed)

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We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information.

Forward-looking statements are typically identified by the use of terms such as “anticipate,” "believe," "could," "estimate," "expect," "intend," "may," "might," "plan," "predict," "project," "seek," "should," "will," and similar words, although some forward-looking statements are expressed differently.

Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “seek,” “should,” “will,” “scheduled”, and similar words or similar expressions (or negative versions of such words or expressions), although some forward-looking statements are expressed differently.

Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct.

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• additional or increased taxes and fees;

• the impact of the novel coronavirus (COVID-19) pandemic, including the emergence of variant strains, and related economic matters on our results of operations, financial conditions and prospects;

• the impact of any pandemics, epidemics, or outbreaks of infectious diseases, including possible new variants of COVID-19, and related economic matters on our results of operations, financial conditions, and prospects;

• lack of confidence in the integrity of our core businesses or any deterioration in our reputation;

• loss of key or highly skilled personnel, as well as general disruptions in the general labor market;

• cyber security risk, including breaches, or loss or misuse of our stored information as a result of a breach, including customers’ personal information, could lead to government enforcement actions or other litigation;

• the impact of significant competition, and the expectation the competition levels will increase;

• the impact of significant competition, and the expectation that competition levels will increase;

• changes in consumer preferences, attendance, wagering, and sponsorships;

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• failure to enter into or maintain agreements with industry constituents, including horsemen and other racetracks:

inability to successfully focus on market access and retail operations for our TwinSpires Sports and Casino business and effectively compete;

• inability to successfully focus on market access and retail operations for our TwinSpires sports betting business and effectively compete;

• online security risk, including cyber-security breaches, or loss or misuse of our stored information as a result of a breach including customers’ personal information could lead to government enforcement actions or other litigation;

• reliance on our technology services and catastrophic events and system failures disrupting our operations;

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• cost overruns and other uncertainties associated with the development of new venues and the expansion of existing facilities;

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

• general risks related to real estate ownership and significant expenditures, including risks related to environmental liabilities;

• personal injury litigation related to injuries occurring at our racetracks;

• compliance with the Foreign Corrupt Practices Act or applicable money-laundering regulations;

• payment-related risks, such as risk associated with fraudulent credit card and debit card use;

• work stoppages and labor issues;

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

• compliance with the Foreign Corrupt Practices Act or other similar laws and regulations, or applicable anti-money laundering regulations;

• payment-related risks, such as risk associated with fraudulent credit card or debit card use;

• work stoppages and labor problems;

• risks related to pending or future legal proceedings and other actions;

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• failure to comply with the financial ratios and other covenants in our debt facilities and other indebtedness;

• increase to interest rates (due to inflation or otherwise);

• disruptions in the credit markets or changes to our credit ratings may adversely affect our business;

• increase in our insurance costs, or inability to obtain similar insurance coverage in the future, and inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events;

• other factors described in our most recent Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission.

• increases to interest rates (due to inflation or otherwise);

• disruption in the credit markets or changes to our credit ratings may adversely affect our business;

• increase in our insurance costs, or inability to obtain similar insurance coverage in the future, and any inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events;

• other factors described under the heading “Risk Factors” in our most recent Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission.

We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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This report should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2023, including Part I - Item 1A, "Risk Factors" of our Form 10-K for a discussion regarding some of the reasons that actual results may be materially different from those we anticipate.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

Churchill Downs Incorporated ("CDI" or the "Company") has been creating extraordinary entertainment experiences for nearly 150 years, beginning with the Company’s most iconic and enduring asset, the Kentucky Derby.

Headquartered in Louisville, Kentucky, CDI has expanded through the development of live and historical racing entertainment venues, the growth of the TwinSpires horse racing online wagering business and the operation and development of regional casino gaming properties.

Headquartered in Louisville, Kentucky, CDI has expanded through the development of live and historical racing entertainment venues, the growth of the TwinSpires horse racing online wagering business, expanded pari-mutuel content and technology services to B2C platforms, and the operation and development of regional casino gaming properties.

We conduct our business through three reportable segments:

Live and Historical Racing, TwinSpires, and Gaming.

We aggregate our other businesses as well as certain corporate operations, in All Other.

For additional information about our segments, refer to Note 17, Segment Information in the notes to our Condensed Consolidated Financial Statements.

Acquisition of Exacta Systems

On August 22, 2023, the Company completed its previously-announced acquisition of Exacta Systems, LLC ("Exacta").

Refer to Note 3, Acquisitions in the notes to our Condensed Consolidated Financial Statements for further information on the transaction.

Lady Luck Casino Nemacolin

On June 26, 2023, the Company's management agreement for Lady Luck Casino Nemacolin ("Lady Luck") in Farmington, Pennsylvania expired and was not renewed.

The Company completed the sale of substantially all its assets at Lady Luck for an immaterial amount.

Effective May 22, 2023, the Company's common stock was split two-for-one with a proportionate increase in the number of its authorized shares of common stock.

Presque Isle Impairment

During the second quarter, we evaluated economic conditions subsequent to the date of our annual impairment assessment on April 1, 2023, including competition in the market and inflationary pressures, which increased during the second quarter of 2023, and impacted the performance and outlook of Presque Isle Downs and Casino ("Presque Isle").

As a result, the Company concluded that a trigger event for impairment testing occurred related to the Presque Isle gaming rights, trademark, and the reporting unit's goodwill at the end of the second quarter.

Based on the 2023 trigger event, the Company evaluated and subsequently updated the projected cash flows and discount rate to reflect the current environment.

As a result, the Company recognized a non-cash impairment charge of $24.5 million in the second quarter of 2023 for the Presque Isle gaming rights and trademark.

Refer to Note 5, Asset Impairments in the notes to our Condensed Consolidated Financial Statements for further information on the impairment.

Arlington Sale

On February 15, 2023, we closed on the sale of the Arlington property in Arlington Heights, Illinois.

We sold 326-acres to the Chicago Bears for $197.2 million.

The net proceeds of $195.7 million were used to pay down the outstanding balance amount on our Revolver that was drawn on to fund the acquisition of substantially all the assets of Peninsula Pacific Entertainment ("P2E").

Refer to Note 4, Dispositions in the notes to our Condensed Consolidated Financial Statements for further information on the transaction.

Financing Transactions

On April 25, 2023, we completed an offering of $600.0 million in aggregate principal amount of 6.750% senior notes that mature in 2031.

The Company used a portion of the net proceeds from the offering to repay indebtedness outstanding under its Term Loan B Facility due 2024 and to fund related transaction fees and expenses, working capital and other general corporate purposes.

On February 24, 2023, we entered into an incremental joinder to our senior secured credit agreement to increase the loans under the existing Term Loan A credit facility due 2027 by $500.0 million.

This joinder increases the existing Term Loan A credit facility due 2027 from $800.0 million to $1.3 billion and makes certain other changes to the existing credit agreement.

The Company used the net proceeds from the borrowings under the increased Term Loan A to repay outstanding loans under its senior secured revolving credit facility, pay related transaction fees and expenses, and for general corporate purposes.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

Transaction Update

On August 11, 2022, the Company entered into an agreement to sell 49% of United Tote, a wholly-owned subsidiary of the Company to NYRA Content Management Solutions, LLC, a subsidiary of the New York Racing Association.

The transaction is subject to usual and customary closing conditions, including applicable regulatory notices and approvals, and is expected to close during the fourth quarter of 2023.

We aggregate our other businesses as well as certain corporate operations, and other immaterial joint ventures, in All Other.

Key Indicators to Evaluate Business Results and Financial Condition

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– Acquisition, disposition, and property sale related charges;

– Direct online Sports and Casino business exit costs;

– Other transaction expense, including legal, accounting and other deal-related expense;

• Stock-based compensation expense;

• Rivers Des Plaines' impact on our investments in unconsolidated affiliates from:

– The impact of changes in fair value of interest rate swaps, and

– Legal reserves and transaction costs;

• Asset impairments;

• Gain on property and asset sales;

• Gain on property sales;

• Legal reserves;

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• Other charges, recoveries and expenses

On June 26, 2023, the Company's management agreement for Lady Luck expired and was not renewed.

As of December 31, 2021, our property in Arlington Heights, Illinois ("Arlington") ceased racing and simulcast operations and the property was sold on February 15, 2023 to the Chicago Bears.

Arlington's results and exit costs in 2023 are treated as an adjustment to EBITDA and are included in other expenses, net in the Reconciliation of Comprehensive Income to Adjusted EBITDA .

On June 26, 2023, the Company's management agreement for Lady Luck Casino Nemacolin ("Lady Luck") in Farmington, Pennsylvania expired and was not renewed.

The Company completed the sale of substantially all its assets at Lady Luck for an immaterial amount.

As of December 31, 2021, Arlington ceased racing and simulcast operations and the property was sold on February 15, 2023 to the Chicago Bears.

Arlington's results and exit costs in 2022 and 2023 are treated as an adjustment to EBITDA.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

For segment reporting, Adjusted EBITDA includes intercompany revenue and expense totals that are eliminated in the Condensed Consolidated Statements of Comprehensive Income.

See the Reconciliation of Comprehensive Income to Adjusted EBITDA included in this section for additional information.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

Governmental Regulations and Legislative Changes

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Specific State Gaming Regulations

In 2023, the Kentucky General Assembly passed a bill to authorize the Kentucky Horse Racing Commission to regulate sports betting.

Only licensed racetracks and their extensions can operate retail sports betting.

Each racetrack is allowed to contract with up to three providers to carryout online or retail sports betting.

Retail sports betting commenced on September 7, 2023 and online sports betting began on September 28, 2023.

In Louisiana, the 2021 Historical Horse Racing Act (the "2021 HHR Act") allows off-track betting facilities ("OTBs") to have up to 50 HRMs.

On October 25, 2022, a number of individual plaintiffs associated with video poker and truckstops, filed a lawsuit in the 19th Judicial District Court in East Baton Rouge, Louisiana against certain racetracks in Louisiana, including our Fair Grounds Racecourse and Slots property, alleging that the 2021 HHR Act is unconstitutional to the extent it purports to permit historical racing in a parish without a referendum.

On June 8, 2023, plaintiffs filed a motion for summary judgment on the constitutional issues raised in their complaint and a hearing was conducted on September 11, 2023.

On February 23, 2024 the judge issued a ruling in favor of plaintiffs granting summary judgment stating that:

(i) historical horseracing is a new form of gaming not specifically authorized by law prior to 1996;

(ii) historical horseracing may not be conducted in any parish of the state unless voters approve it through referendum;

and (iii) the 2021 HHR Act that authorized historical horseracing is unconstitutional.

The summary judgment, which was certified as final for purposes of appeal, was entered on March 18, 2024, and the Company, along with other interested parties including the Louisiana Racing Commission, filed a joint motion for a suspensive appeal, which was entered on March 26, 2024.

The suspensive appeal allows the continued operation of HHR during the pendency of the appeal before the Louisiana Supreme Court.

The Company intends to vigorously defend the constitutionality of the HHR Act.

As of March 31, 2024, the Company had approximately 500 HRMs in OTBs in Louisiana.

If the 2021 HHR Act is determined to be unconstitutional it could have an adverse impact on our Louisiana HRM results which are reported in our Gaming segment.

Consolidated Financial Results

The following table reflects our net revenue, operating income, net income, Adjusted EBITDA, and certain other financial information:

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2023 2022 Change 2023 2022 Change

Three Months Ended March 31,

(in millions) 2024 2023 Change

Net revenue $ 590.9 $ 559.5 $ 31.4

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Adjusted EBITDA 242.5 222.9 19.6

Three Months Ended September 30, 2023, Compared to Three Months Ended September 30, 2022

• Net revenue increased $189.4 million driven by a $127.2 million increase in Live and Historical Racing revenue primarily due to the Virginia properties acquired in the P2E Transaction, the properties acquired in the Ellis Park and Chasers Transactions, the opening of Turfway Park in Northern Kentucky in September 2022, and continued growth at our other Kentucky properties, a $60.9 million increase in Gaming revenue primarily due to the New York and Iowa properties acquired in the P2E Transaction, and a $2.3 million increase in TwinSpires primarily due to the Exacta Transaction.

These increases were partially offset by a $1.0 million decrease in All Other net revenue.

• Operating income increased $49.3 million driven by a $49.1 million increase in Live and Historical Racing income primarily from the Virginia properties acquired in the P2E Transaction, an $18.3 million increase in Gaming income primarily from the New York and Iowa properties acquired in the P2E Transaction, and a $0.6 million increase in All Other.

These increases were partially offset by an $11.8 million increase in selling, general and administrative expenses primarily due to the P2E Transaction, a $6.6 million decrease in TwinSpires income, and a $0.3 million increase in transaction costs.

• Net income increased $4.0 million.

The following items impacted comparability of the Company's net income from continuing operations for the three months ended September 30, 2023, compared to three months ended September 30, 2022:

a $0.9 million after-tax net increase in other nonrecurring expenses.

Excluding these items, net income increased $4.9 million due to a $34.5 million after-tax increase primarily driven by the addition of the properties acquired as part of the P2E Transaction in the results of our operations, partially offset by a $22.7 million after-tax increase in interest expense associated with higher outstanding debt balances and higher interest rates, and a $6.9 million after-tax decrease in the equity income from our unconsolidated affiliates.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

• Adjusted EBITDA increased $55.0 million driven by a $46.4 million increase in Live and Historical Racing Adjusted EBITDA primarily from the Virginia properties acquired in the P2E Transaction and continued growth at our Kentucky HRM properties, a $10.7 million increase in Gaming Adjusted EBITDA primarily from the New York and Iowa properties acquired in the P2E Transaction, and a $2.8 million increase in TwinSpires Adjusted EBITDA primarily due to the Exacta Transaction, partially offset by a $4.9 million increase in corporate general administrative expenses.

Nine Months Ended September 30, 2023, Compared to Nine Months Ended September 30, 2022

• Net revenue increased $570.8 million driven by a $379.7 million increase in Live and Historical Racing revenue primarily attributable to the Virginia properties acquired in the P2E Transaction, the opening of Turfway Park in Northern Kentucky in September 2022, a record-breaking Derby Week at Churchill Downs Racetrack, the properties acquired in the Ellis Park and Chasers Transactions, and continued growth at our other Kentucky properties and a $195.2 million increase in Gaming revenue primarily due to our New York and Iowa properties acquired in the P2E Transaction.

These increases were partially offset by a $2.6 million decrease in TwinSpires revenue primarily due to the exit of the direct online Sports and Casino business in the first quarter of 2022 and a $1.5 million decrease in All Other net revenue.

• Operating income increased $147.7 million driven by a $143.2 million increase in Live and Historical Racing income primarily from the Virginia properties acquired in the P2E Transaction, a $53.9 million increase in Gaming income primarily from the New York and Iowa properties acquired in the P2E Transaction, a $7.2 million increase in TwinSpires income, and a $5.6 million decrease in transaction costs.

These increases were partially offset by a $37.9 million increase in selling, general and administrative expenses primarily due to the P2E Transaction, a $19.6 million increase in non-cash impairment costs due to the 2023 impairment of Presque Isle intangible assets, and a $4.7 million decrease in All Other operating income primarily related to Arlington exit costs.

Three Months Ended March 31, 2024, Compared to Three Months Ended March 31, 2023

• Net revenue increased $31.4 million driven by a $30.7 million increase from the Live and Historical Racing segment primarily due to the opening of our Rosie's Emporia property in September 2023 and growth at our other HRM properties and an $11.8 million increase from the TwinSpires segment primarily due the Exacta Transaction.

Partially offsetting these increases was an $11.1 million decrease primarily from the Gaming segment driven by our decision not to renew the management agreement at Lady Luck in June 2023 and inclement weather in January 2024 across many of our Gaming properties.

• Operating income increased $6.4 million due to a $16.8 million increase in the Live and Historical Racing segment primarily due to savings as a result of the Exacta Transaction, the opening of our Rosie's Emporia property in September 2023, and growth at our other HRM properties, a $9.6 million increase in the TwinSpires segment primarily due to the Exacta Transaction, and decreased All Other net operating expenses of $2.6 million primarily related to

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

Arlington exit costs in 2023.

Partially offsetting these increases to operating income was a $15.8 million decrease in the Gaming segment primarily due to inclement weather at many of our Gaming properties in January 2024, a $4.3 million increase in transaction expenses, and a $2.5 million increase in selling, general and administrative expenses.

• Net income decreased $75.3 million.

The following items impacted comparability of the Company's net income from continuing operations for the nine months ended September 30, 2023, compared to nine months ended September 30, 2022:

a $107.4 million decrease in after-tax gains on property sales, a $14.9 million increase in after-tax non-cash impairment costs, a $9.2 million after-tax benefit related to our equity portion of the non-cash change in the fair value of Rivers Des Plaines' interest rate swap that did not recur in 2023, and a $2.4 million increase in other nonrecurring costs.

Excluding these items, net income increased $55.2 million due to a $135.5 million after-tax increase primarily driven by the addition of the properties acquired as part of the P2E Transaction in the results of our operations, partially offset by a $76.0 million after-tax increase in interest expense associated with higher outstanding debt balances and higher interest rates, and a $4.3 million after-tax decrease in the equity income from our unconsolidated affiliates.

• Adjusted EBITDA increased $221.9 million driven by a $160.2 million increase in Live and Historical Racing Adjusted EBITDA primarily from the Virginia properties acquired in the P2E Transaction, a record-breaking Derby Week at Churchill Downs Racetrack, and continued growth at our other Kentucky properties, a $65.7 million increase in Gaming Adjusted EBITDA primarily from the New York and Iowa properties acquired in the P2E Transaction, and an $8.1 million increase in TwinSpires Adjusted EBITDA primarily due to the exit of the direct online Sports and Casino business in the first quarter of 2022 and the Exacta Transaction, partially offset by a $12.1 million increase in corporate general administrative expenses.

The following impacted the comparability of the Company's net income for the three months ended March 31, 2024 compared to the three months ended March 31, 2023:

an $86.2 million after-tax gain on the sale of the Arlington property in the prior year quarter and a $4.4 million after-tax net increase in adjustments related to transaction, pre-opening and other expenses, partially offset by a $5.2 million after-tax increase of other recoveries, net related to non-recurring insurance claim recoveries.

Excluding these items, net income increased $10.1 million primarily due to a $14.7 million after-tax increase primarily driven by the results of our operations, partially offset by a $4.6 million after-tax increase in interest expense associated with higher outstanding debt balances and higher interest rates.

• Adjusted EBITDA increased $19.6 million driven by an $18.7 million increase from the Live and Historical Racing segment primarily due to $5.8 million of savings as a result of the Exacta Transaction and a $12.9 million increase due to the growth at our HRM properties and the opening of our Rosie's Emporia property in September 2023, and a $10.2 million increase from the TwinSpires segment primarily attributable to the Exacta Transaction.

Partially offsetting these increases was a $6.7 million decrease from the Gaming segment primarily due to inclement weather in January 2024 at many of our Gaming properties and a decrease in All Other adjusted EBITDA of $2.6 million driven by increased corporate compensation expenses and administrative fees.

Revenue by Segment

The following table presents revenue for our segments, including intercompany revenue:

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2023 2022 Change 2023 2022 Change

The following table presents net revenue for our segments, including intercompany revenue:

Three Months Ended March 31, Change

(in millions) 2024 2023

Live and Historical Racing $ 248.9 $ 215.8 $ 33.1

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Net Revenue $ 590.9 $ 559.5 $ 31.4

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

Three Months Ended September 30, 2023, Compared to Three Months Ended September 30, 2022

• Live and Historical Racing revenue increased $123.1 million driven by an $89.0 million increase attributable to the Virginia properties acquired in the P2E Transaction, a $14.7 million increase attributable to the properties acquired in the Ellis Park and Chasers Transactions, an $8.8 million increase primarily due to the opening of Turfway Park in Northern Kentucky in September 2022, a $7.4 million increase from our Derby City Gaming property in Louisville, and a $4.3 million increase from our Oak Grove property in Southwestern Kentucky.

These increases were partially offset by a $1.1 million decrease at Churchill Downs Racetrack due to the decision to move July race days as part of the Churchill Downs Racetrack Spring Meet to Ellis Park.

• TwinSpires revenue increased $5.0 million driven by a $5.5 million increase attributable to the Exacta Transaction and a $0.9 million increase in all other Horse Racing revenue primarily from the B2B expansion strategy associated with United Tote totalisator fees.

These increases were partially offset by a $1.4 million reduction in Sports and Casino revenue.

• Gaming revenue increased $59.0 million driven by a $70.2 million increase attributable to the New York and Iowa properties acquired in the P2E Transaction, partially offset by an $8.7 million decrease in Pennsylvania primarily due to our decision not to renew the management agreement at Lady Luck, and a $2.5 million net decrease from our other gaming properties.

Nine Months Ended September 30, 2023, Compared to Nine Months Ended September 30, 2022

• Live and Historical Racing revenue increased $383.8 million driven by a $281.3 million increase attributable to the Virginia properties acquired in the P2E Transaction, a $34.8 million increase primarily due to the opening of Turfway Park in Northern Kentucky in September 2022, a $34.2 million increase attributable to properties acquired in the Ellis Park and Chasers Transactions, a $20.7 million increase due to a record-breaking Derby Week at Churchill Downs Racetrack, a $14.0 million increase from our Oak Grove property in Southwestern Kentucky, and a $9.6 million increase from our Derby City Gaming property in Louisville.

These increases were partially offset by a $10.8 million decrease for non-Derby Week racing operations primarily due to the decision to move a portion of the Churchill Downs Racetrack Spring Meet to Ellis Park.

• TwinSpires revenue increased $0.5 million driven by a $5.5 million increase attributable to the Exacta Transaction and a $5.2 million increase in all other Horse Racing revenue primarily from the B2B expansion strategy associated with United Tote totalisator fees, partially offset by a $10.2 million reduction in Sports and Casino revenue due to the exit of the direct online Sports and Casino business in the first quarter of 2022.

• Gaming revenue increased $194.8 million driven by a $207.8 million increase attributable to the New York and Iowa properties acquired in the P2E Transaction, partially offset by an $11.4 million decrease in Pennsylvania primarily due to our decision not to renew the management agreement at Lady Luck, and a $1.6 million net decrease from our other gaming properties.

Three Months Ended March 31, 2024, Compared to Three Months Ended March 31, 2023

• Live and Historical Racing revenue increased $33.1 million due to an $18.3 million increase attributable to growth at our Kentucky HRM properties, a $13.5 million increase attributable to growth at our Virginia properties and the opening of our Rosie's Emporia property in September 2023, and a $1.3 million increase at our other Live and Historical Racing properties.

• TwinSpires revenue increased $17.8 million due to a $14.3 million increase attributable to the Exacta Transaction, a $2.3 million increase attributable to our retail and online sports betting business, and a $1.2 million increase in Horse Racing revenue.

• Gaming revenue decreased $8.4 million due to a $6.3 million decrease in Pennsylvania primarily due to our decision not to renew the management agreement at Lady Luck in June 2023 and a $2.1 million net decrease at our other gaming properties primarily due to inclement weather in January 2024.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

Consolidated Operating Expense

The following table is a summary of our consolidated operating expense:

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2023 2022 Change 2023 2022 Change

Taxes and purses $ 149.1 $ 108.9 $ 40.2 $ 468.7 $ 345.5 $ 123.2

Three Months Ended March 31, Change

(in millions) 2024 2023

Gaming taxes and purses $ 150.4 $ 145.5 $ 4.9

Salaries and benefits 74.9 62.9 12.0

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Marketing and advertising 19.2 18.0 1.2

Maintenance, insurance and utilities 20.9 20.9 —

Property and other taxes 6.4 6.8 (0.4)

Transaction expense, net 4.1 (0.2) 4.3

Asset impairments — — — 24.5 4.9 19.6

Other operating expense 48.8 53.1 (4.3)

Total expense $ 464.6 $ 439.6 $ 25.0

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

Three Months Ended September 30, 2023, Compared to Three Months Ended September 30, 2022

Significant items affecting comparability of consolidated operating expense include:

• Taxes and purses, salaries and benefits, selling, general and administrative, marketing and advertising, depreciation and amortization, and other operating expenses increased due to the P2E, Ellis Park and Chasers Transactions, as well as the opening of Turfway Park in September of 2022.

Nine Months Ended September 30, 2023, Compared to Nine Months Ended September 30, 2022

Significant items affecting comparability of consolidated operating expense include:

• Asset impairments increased $19.6 million due to the non-cash impairment of Presque Isle intangible assets in the second quarter of 2023.

• Transaction expenses decreased $5.6 million due to the 2022 P2E Transaction.

Three Months Ended March 31, 2024, Compared to Three Months Ended March 31, 2023

Increased gaming taxes and purses, salaries and benefits, selling, general and administrative, marketing and advertising, and depreciation and amortization increased primarily due to the Exacta Transaction in August 2023, the opening of our Rosie's Emporia property in late September 2023 and our Derby City Gaming Downtown property in December 2023, and added costs related to Terre Haute Casino in Indiana that opened on April 5, 2024 and The Rose HRM entertainment facility that is scheduled to open in late September 2024.

Adjusted EBITDA

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Adjusted EBITDA should not be considered as an alternative to operating income as an indicator of performance, as an alternative to cash flows from operating activities as a measure of liquidity, or as an alternative to any other measure provided in accordance with GAAP.

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2023 2022 Change 2023 2022 Change

Three Months Ended March 31, Change

(in millions) 2024 2023

Live and Historical Racing $ 100.8 $ 82.1 $ 18.7

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Total Adjusted EBITDA $ 242.5 $ 222.9 $ 19.6

Thr ee Months Ended September 30, 2023, Compared to Three Months Ended September 30, 2022

• Live and Historical Racing Adjusted EBITDA increased $46.4 million driven by a $38.3 million increase attributable to the Virginia properties acquired in the P2E Transaction and a portion of the benefit from the Exacta Transaction, a $7.3 million increase from continued growth at our Derby City Gaming property in Louisville and our Oak Grove property in Southwestern Kentucky, and a $2.9 million increase attributable to our other Live and Historical Racing properties.

These increases were partially offset by a $2.1 million decrease at Churchill Downs Racetrack primarily due to the decision to move July race days as part of the Churchill Downs Racetrack Spring Meet to Ellis Park.

• TwinSpires Adjusted EBITDA increased $2.8 million driven by a $3.1 million increase attributable to the Exacta Transaction, partially offset by a $0.3 million net decrease in Horse Racing and Sports and Casino.

• Gaming Adjusted EBITDA increased $10.7 million driven by a $25.0 million increase attributable to the New York and Iowa properties acquired in the P2E Transaction, partially offset by a $6.5 million decrease from our equity investments, a $4.9 million decrease from our other wholly-owned gaming properties, and a $2.9 million decrease attributable to proceeds for business interruption insurance claims related to Hurricane Ida.

We received $4.1 million of proceeds in the third quarter of 2022, compared to $1.2 million received during the third quarter of 2023.

• All Other Adjusted EBITDA decreased $4.9 million primarily driven by increased corporate compensation and benefits related expenses and legal and professional fees.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

Nine Months Ended September 30, 2023, Compared to Nine Months Ended September 30, 2022

• Live and Historical Racing Adjusted EBITDA increased $160.2 million driven by a $128.8 million increase attributable to the Virginia properties acquired in the P2E Transaction and a portion of the benefit from the Exacta Transaction, a $16.3 million increase due to a record-breaking Derby Week at Churchill Downs Racetrack, a $14.3 million increase from continued growth at our Derby City Gaming property in Louisville and our Oak Grove property in Southwestern Kentucky, and an $8.5 million increase attributable to our other Live and Historical Racing properties.

These increases were partially offset by an $7.7 million decrease for non-Derby Week racing operations primarily driven by the decision to move a portion of the Churchill Downs Racetrack Spring Meet to Ellis Park in June 2023.

• TwinSpires Adjusted EBITDA increased $8.1 million driven by a $9.6 million increase in Sports and Casino from significant cost reductions associated with the exit of the direct online Sports and Casino business in the first quarter of 2022, a $3.3 million increase in Horse Racing primarily from the B2B expansion strategy associated with United Tote totalisator fees, and a $3.1 million increase from the Exacta Transaction.

These increases were partially offset by a $7.9 million decrease primarily as a result of lower retail Horse Racing handle due to industry race day cancellations and the decision to move a portion of the Churchill Downs Racetrack Spring Meet to Ellis Park in June 2023 as well as higher content related expenses and higher advance deposit wagering taxes in certain jurisdictions.

• Gaming Adjusted EBITDA increased $65.7 million driven by a $72.8 million increase attributable to the New York and Iowa properties acquired in the P2E Transaction and a $6.9 million increase from our equity investments.

These increases were partially offset by an $11.5 million decrease from our other wholly-owned gaming properties and a $2.5 million decrease attributable to proceeds for business interruption insurance claims related to Hurricane Ida.

We received $4.1 million of proceeds in 2022 compared to $1.6 million received in 2023.

• All Other Adjusted EBITDA decreased $12.1 million primarily driven by increased corporate compensation and benefits related expenses and legal and professional fees.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

Thre e Months Ended March 31, 2024, Compared to Three Months Ended March 31, 2023

• Live and Historical Racing Adjusted EBITDA increased $18.7 million due to a $12.9 million increase attributable to growth at our Virginia properties which includes $5.8 million of savings related to the Exacta Transaction, and an $8.5 million increase from our Kentucky HRM properties.

These increases were offset by a $2.7 million decrease at Churchill Downs Racetrack driven by increased maintenance and promotional expenses in preparation for the 150th Kentucky Oaks and Derby.

• TwinSpires Adjusted EBITDA increased $10.2 million due to a $9.4 million increase attributable to the Exacta Transaction and a $1.4 million increase attributable to our retail and online sports betting business, partially offset by a $0.6 million decrease in Horse Racing primarily driven by lower retail volume.

• Gaming Adjusted EBITDA decreased $6.7 million primarily due to inclement weather in January 2024 at many of our gaming properties.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

• All Other Adjusted EBITDA decreased $2.6 million driven primarily by increased corporate compensation related expenses and other corporate administrative expenses.

Reconciliation of Comprehensive Income to Adjusted EBITDA

Three Months Ended September 30, Nine Months Ended September 30,

(in millions) 2023 2022 Change 2023 2022 Change

Three Months Ended March 31, Change

(in millions) 2024 2023

Net income and comprehensive income $ 80.4 $ 155.7 $ (75.3)

Depreciation and amortization 46.9 37.9 9.0

Interest expense, net 67.9 36.2 31.7 197.8 92.6 105.2

Interest expense 70.4 64.7 5.7

Income tax provision 21.4 53.2 (31.8)

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Stock-based compensation expense $ 7.2 $ 8.6 $ (1.4)

Legal reserves — — — — 3.2 (3.2)

Pre-opening expense 8.3 3.2 5.1

Arlington exit costs 0.1 1.4 (1.3) 9.4 5.7 3.7

Other expense, net 0.2 3.7 (3.5)

Transaction expense, net 4.1 (0.2) 4.3

Asset impairments — — — 24.5 4.9 19.6

Other income, expense:

Interest, depreciation and amortization expense related to equity investments 10.3 9.8 0.5

Changes in fair value of Rivers Des Plaines' interest rate swaps — — — — (12.6) 12.6

Rivers Des Plaines' legal reserves and transactions costs — 0.1 (0.1) — 0.6 (0.6)

Other charges and recoveries, net (6.7) 0.3 (7.0)

Gain on sale of assets — — — (114.0) (274.6) 160.6

Gain on sale of Arlington — (114.0) 114.0

Total adjustments to EBITDA 23.4 (88.6) 112.0

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The following is a summary of our overall financial position:

(in millions) September 30, 2023 December 31, 2022 Change

(in millions) March 31, 2024 December 31, 2023 Change

Total assets $ 7,066.8 $ 6,955.5 $ 111.3

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Significant items affecting the comparability of our Condensed Consolidated Balance Sheets include:

• Total assets increased $543.7 million primarily driven by increased capital expenditures and assets acquired in the Exacta Transaction, partially offset by the sale of our Arlington property and the Presque Isle impairment in 2023.

• Total liabilities increased $206.5 million primarily driven by a net increase in long-term debt, income tax liabilities and increased accrued interest, partially offset by decreased dividends payable due to the payment of our annual dividends.

• Total shareholders’ equity increased $337.2 million driven by increased net income and stock-based compensation, partially offset by share repurchases.

• Total assets increased $111.3 million driven by increased capital expenditures primarily at the Terre Haute Casino Resort, Churchill Downs Racetrack, and The Rose Gaming Resort in Dumfries, Virginia.

• Total liabilities increased $178.0 million driven by increased long-term debt and deferred revenue primarily due to increased advanced ticket sales related to the 150th Kentucky Derby.

• Total shareholders’ equity decreased $66.7 million driven by current year share repurchases, partially offset by net income.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

Liquidity and Capital Resources

The following table is a summary of our liquidity and cash flows:

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

(in millions) Nine Months Ended September 30,

(in millions) Three Months Ended March 31, Change

Cash flows from:

2023 2022 Change

Operating activities $ 254.7 $ 215.9 $ 38.8

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Financing activities (101.1) (237.7) 136.6

Nine Months Ended September 30, 2023, Compared to the Nine Months Ended September 30, 2022

• Cash flows provided by operating activities increased $74.3 million driven by increased operating income and increased distributions from unconsolidated affiliates.

These increases were partially offset by an increase in net interest paid and net income taxes paid.

Three Months Ended March 31, 2024, Compared to the Three Months Ended March 31, 2023

• Cash flows provided by operating activities increased $38.8 million driven primarily by a decrease in cash used for working capital, an increase in operating income, and decreased interest paid in 2024.

We anticipate that cash flows from operations and availability of borrowings under our credit facility over the next twelve months will be adequate to fund our business operations and capital expenditures.

• Cash flows used in investing activities increased $442.5 million driven by increased capital project expenditures in 2023 primarily at Churchill Downs Racetrack and for the Dumfries project in Virginia, increased cash used in acquisitions, and decreased proceeds from the sale of assets.

• Cash flows provided by financing activities decreased $981.4 million primarily driven by repayments of long-term debt in 2023 and higher levels of financing than in the prior year period.

We have spent $445.7 million year to date on project capital investments.

We expect to spend approximately $575 to $675 million for the year on project capital investments.

The significant project capital investments planned for the fourth quarter of 2023 include:

Churchill Downs Racetrack Paddock Project, Derby City Gaming Downtown, the Ellis Park HRM facility in Eastern Daviess County, Kentucky, the Terre Haute Casino Resort in Vigo County, Indiana, a New Hampshire HRM Facility, and the Virginia HRM entertainment venue in Dumfries.

The planned amount may vary significantly based on the timing of work completed, unanticipated delays, and timing of payments to third parties.

• Cash flows used in investing activities increased $207.9 million driven by $195.7 million proceeds from the Arlington sale in 2023 and an increase in capital project expenditures in 2024 primarily at the Terre Haute Casino Resort, Churchill Downs Racetrack, and The Rose Gaming Resort in Dumfries, Virginia.

• Cash flows used in financing activities decreased $136.6 million primarily driven by a net paydown of debt in the first quarter of 2023, partially offset by share repurchases in the first quarter of 2024.

We have announced several project capital investments, including the following:

Churchill Downs Racetrack Paddock Project, Owensboro Racing & Gaming in Owensboro, Kentucky, a New Hampshire HRM facility, and The Rose Gaming Resort in Dumfries, Virginia.

We currently expect our project capital to be approximately $450.0 to $550.0 million in 2024, although this amount may vary significantly based on the timing of work completed, unanticipated delays, and timing of payments to third parties.

Common Stock Repurchase Program

On September 29, 2021, the Board of Directors of the Company approved a common stock repurchase program of up to $500.0 million ("2021 Stock Repurchase Program").

On September 29, 2021, the Board of Directors of the Company approved a common stock repurchase program of up to $500.0 million (the "2021 Stock Repurchase Program").

The 2021 Stock Repurchase Program includes and is not in addition to the unspent amount remaining under the prior authorization.

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 or discontinued at any time.

The Company repurchased $37.3 million of its common stock during the three months ended September 30, 2023 and had $232.9 million of repurchase authority remaining under this program on September 30, 2023, based on trade date.

During the first quarter of 2024, we repurchased 184,821 shares of the Company's common stock under the 2021 Stock Repurchase Program for a total cost of $22.0 million.

We had approximately $192.9 million of repurchase authority remaining under this program on March 31, 2024.

On January 2, 2024, the Company closed on an agreement, dated December 18, 2023, with an affiliate of The Duchossois Group ("TDG") to repurchase 1,000,000 shares of the Company’s common stock, for $123.75 per share in a privately negotiated transaction for an aggregate purchase price of $123.8 million.

This represented a discount of 4.03% to the closing price on December 15, 2023 of $128.95.

The repurchase of shares of common stock from TDG was approved by the Company's Board of Directors separately from and did not reduce the authorized amount remaining under the existing common stock repurchase program.

The repurchase of the shares was funded using available cash and borrowings under the Company’s senior secured credit facility.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

Credit Facilities and Indebtedness

The following table presents our debt outstanding:

(in millions) September 30, 2023 December 31, 2022 Change

(in millions) March 31, 2024 December 31, 2023 Change

Revolver $ 353.0 $ 247.2 $ 105.8

Term Loan B-1 due 2028 291.0 291.8 (0.8)

Term Loan B-1 due 2028 292.5 294.7 (2.2)

Term Loan A due 2027 1,218.7 1,235.0 (16.3)

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Net debt $ 4,858.9 $ 4,768.3 $ 90.6

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

Credit Agreement

At September 30, 2023, the Company’s senior secured credit facility (as amended from time to time, the “Credit Agreement") consisted of a $1.2 billion revolving credit facility (the "Revolver"), $300.0 million senior secured term loan B-1 due 2028 (the "Term Loan B-1"), $1.3 billion senior secured term loan A due 2027 (the "Term Loan A"), and $100.0 million swing line commitment.

Certain amendments to the Credit Agreement entered into during 2022 and 2023, are described below.

On April 13, 2022, we amended the Credit Agreement to extend the maturity date of its Revolver to April 13, 2027, to increase the commitments under the existing revolving credit facility from $700.0 million to $1.2 billion, and to increase the swing line commitment from $50.0 million to $100.0 million.

This amendment also provided for the senior secured Term Loan A due April 13, 2027 in the amount of $800.0 million, which was drawn on November 1, 2022 as part of the financing for the P2E Transaction.

Refer to Note 3, Acquisitions in the notes to our Condensed Consolidated Financial Statements for further information regarding the P2E Transaction.

The Company capitalized $3.5 million of debt issuance costs associated with the Revolver commitment increase and $6.4 million of debt issuance costs associated with the Term Loan A which are being amortized as interest expense over the 5-year term.

On February 24, 2023, we amended our Credit Agreement to increase the loans under the existing Term Loan A due 2027 from $800.0 million to $1.3 billion and made certain other changes to the existing credit agreement.

The Company used the net proceeds from the borrowings under the increased Term Loan A to repay outstanding loans under its Revolver, pay related transaction fees and expenses, and for general corporate purposes.

The Company capitalized $2.6 million of debt issuance costs associated with the increased Term Loan A which are being amortized as interest expense over the remainder of the 5-year term.

The Company is required to pay a commitment fee on the unused portion of the Revolver as determined by a pricing grid based on the consolidated total net secured leverage ratio of the Company.

For the period ended September 30, 2023, the Company's commitment fee rate was 0.25%.

At March 31, 2024, the Company’s senior secured credit facility (as amended from time to time, the “Credit Agreement") consisted of a $1.2 billion revolving credit facility (the "Revolver"), $300.0 million senior secured term loan B-1 due 2028 (the "Term Loan B-1"), $1.3 billion senior secured term loan A due 2027 (the "Term Loan A"), and $100.0 million swing line commitment.

Term Loan B-1 bears interest at the Secured Overnight Financing Rate ("SOFR") plus 210 basis points and requires quarterly payments of 0.25% of the original $300.0 million balance.

The Term Loan B-1 may be subject to additional mandatory prepayment from excess cash flow on an annual basis per the provisions of the Credit Agreement.

The Revolver and Term Loan A bear interest at SOFR plus 10 basis points, plus a variable applicable margin which is determined by the Company's net leverage ratio.

As of September 30, 2023, that applicable margin was 150 basis points.

The Term Loan B-1 bears interest at SOFR plus 210 basis points.

The estimated contractual payments, including interest, under the Credit Agreement for the next twelve months are estimated to be $181.2 million assuming no change in the weighted average borrowing rate of 7.01%, which was in place as of September 30, 2023.

During the nine months ended September 30, 2023, we had net repayments of principal and interest on the Revolver of $548.6 million.

The Company completed the transition of its financing from LIBOR to SOFR during the second quarter of 2023.

These transition activities did not have a material impact on the Company’s financial statements.

As of March 31, 2024, that applicable margin was 150 basis points which was based on the pricing grid in the Credit Agreement.

The Company had $841.9 million available borrowing capacity, after consideration of $5.1 million in outstanding letters of credit, under the Revolver as of March 31, 2024.

The Company is required to pay a commitment fee on the unused portion of the Revolver as determined by a pricing grid based on the consolidated total net secured leverage ratio of the Company.

For the period ended March 31, 2024, the Company's commitment fee rate was 0.25%.

The estimated contractual payments, including interest, under the Credit Agreement for the next twelve months are estimated to be $198.5 million assuming no change in the weighted average borrowing rate of 7.01%, which was in place as of March 31, 2024.

During the three months ended March 31, 2024, we had repayments of principal and interest on the Revolver of $136.2 million.

2027 Senior Notes

As of September 30, 2023, we had $600.0 million in aggregate principal amount of 5.500% senior unsecured notes that mature on April 1, 2027 (the "2027 Senior Notes").

The 2027 Senior Notes were issued at par in a private offering to qualified institutional buyers, with interest payable in arrears on April 1st and October 1st of each year, commencing on October 1, 2019.

As of March 31, 2024, we had $600.0 million in aggregate principal amount of 5.500% senior unsecured notes that mature on April 1, 2027 (the "2027 Senior Notes").

The Company may redeem some or all of the 2027 Senior Notes at redemption prices set forth in the 2027 Indenture.

2028 Senior Notes

As of September 30, 2023, we had a total of $700.0 million in aggregate principal amount of 4.750% senior unsecured notes (collectively, the “2028 Senior Notes”) maturing on January 15, 2028.

As of March 31, 2024, we had a total of $700.0 million in aggregate principal amount of 4.750% senior unsecured notes (the “2028 Senior Notes”) maturing on January 15, 2028.

The 2028 Senior Notes consist of $500.0 million notes issued at par and $200.0 million notes issued at 103.25%.

The 2028 Senior Notes were issued in a private offering to qualified institutional buyers, with interest payable in arrears on January 15th and July 15th of each year, commencing on July 15, 2018.

The 2028 Senior Notes were issued in a private offering to qualified institutional buyers, with interest payable in arrears on January 15th and July 15th of each year, commencing on July 15th, 2018.

The 3.25% premium is being amortized through interest expense, net over the term of the notes.

The Company may redeem some or all the 2028 Senior Notes at redemption prices set forth in the 2028 Indenture.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

2030 Senior Notes

As of September 30, 2023, we had $1.2 billion in aggregate principal amount of 5.750% senior unsecured notes that mature on April 13, 2030 (the "2030 Senior Notes").

The 2030 Senior Notes were issued at par in a private offering to qualified institutional buyers, with interest payable in arrears on April 1st and October 1st of each year, commencing on October 1, 2022.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2023

In connection with the offering, we capitalized $18.3 million of debt issuance costs which are being amortized as interest expense over the term of the 2030 Senior Notes.

The Company held the net proceeds of this transaction of $1.2 billion in escrow until the proceeds were utilized to complete the P2E Transaction on November 1, 2022.

As of March 31, 2024, we had $1.2 billion in aggregate principal amount of 5.750% senior unsecured notes that mature on April 13, 2030 (the "2030 Senior Notes").

The Company may redeem some or all the 2030 Senior Notes at redemption prices set forth in the 2030 Indenture.

2031 Senior Notes

On April 25, 2023, the Company completed an offering of $600.0 million in aggregate principal amount of 6.750% senior unsecured notes that mature on April 25, 2031 (the "2031 Senior Notes") in a private offering to qualified institutional buyers pursuant to Rule 144A that is exempt from registration under the Securities Act, and to certain non-U.S.

persons in accordance with Regulation S under the Securities Act.

The Company recognized a loss on extinguishment on Term Loan B of $1.3 million, which is included in miscellaneous, net in the accompanying Condensed Consolidated Statements of Comprehensive Income.

The Company capitalized $10.7 million of debt issuance costs associated with the 2031 Senior Notes which are being amortized as interest expense over the remainder of the 8-year term.

The 2031 Senior Notes were issued at 100% of the principal amount, plus interest deemed to have accrued from April 25, 2023, with interest payable in arrears on May 1st and November 1st of each year, commencing on November 1, 2023.

The 2031 Senior Notes will vote as one class under the indenture governing the 2031 Senior Notes.

The Company may redeem some or all of the 2031 Senior Notes at any time prior to April 25, 2025, at redemption prices set forth in the 2031 offering memorandum.

As of March 31, 2024, we had $600.0 million in aggregate principal amount of 6.750% senior unsecured notes that mature on April 25, 2031 (the "2031 Senior Notes").

The 2031 Senior Notes were issued at par in a private offering to qualified institutional buyers, with interest payable in arrears on May 1st and November 1st of each year, commencing on November 1st, 2023.

The Company may redeem some or all of the 2031 Notes at any time prior to April 25, 2025, at redemption prices set forth in the 2031 Offering Memorandum.

The Company leases certain real estate and other property.

1 unchanged sentence

Certain of our lease agreements include lease payments based on a percentage of net gaming revenue and others include rental payment adjustments periodically for inflation.

As of September 30, 2023, minimum rent payable under operating leases was $28.0 million, with $6.3 million due in the next twelve months.

As of September 30, 2023, minimum rent payable accounted for as financing obligations was $56.3 million, with $4.4 million due in the next twelve months.

As of March 31, 2024, minimum rent payable under operating leases was $24.4 million, with $5.9 million due in the next twelve months.

As of March 31, 2024, minimum rent payable accounted for as financing obligations was $58.7 million, with $4.9 million due in the next twelve months.

Other Contractual Obligations

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis