What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-10-23 compared with 2024-07-24 · 114 added, 92 removed, 663 unchanged (24% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended June 30, Six Months Ended June 30,

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

(in millions, except per common share data) 2024 2023 2024 2023

32 unchanged sentences

The accompanying notes are an integral part of the condensed consolidated financial statements.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

CHURCHILL DOWNS INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions) June 30, 2024 December 31, 2023

(in millions) September 30, 2024 December 31, 2023

Current assets:

42 unchanged sentences

The accompanying notes are an integral part of the condensed consolidated financial statements.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

CHURCHILL DOWNS INCORPORATED

17 unchanged sentences

Balance, June 30, 2024 73.4 — 1,031.9 ( 1.0 ) 1,030.9

Net income attributable to Churchill Downs Incorporated 65.4 65.4

Issuance of common stock 0.2 4.2 4.2

Repurchase of common stock ( 0.1 ) ( 9.0 ) ( 9.0 )

Taxes paid related to net share settlement of stock awards ( 0.1 ) ( 0.1 )

Stock-based compensation 7.1 7.1

Other ( 0.5 ) ( 1.0 ) ( 1.5 )

Balance, September 30, 2024 73.5 $ 1.7 $ 1,096.3 $ ( 1.0 ) $ 1,097.0

The accompanying notes are an integral part of the condensed consolidated financial statements.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

CHURCHILL DOWNS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

Common Stock Retained

13 unchanged sentences

Balance, June 30, 2023 74.9 8.0 846.7 ( 0.9 ) 853.8

Net income 61.0 61.0

Issuance of common stock 3.1 3.1

Repurchase of common stock ( 0.3 ) ( 19.2 ) ( 18.1 ) ( 37.3 )

Stock-based compensation 8.1 8.1

Balance, September 30, 2023 74.6 $ — $ 889.6 $ ( 0.9 ) $ 888.7

The accompanying notes are an integral part of the condensed consolidated financial statements.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

CHURCHILL DOWNS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions) 2024 2023

19 unchanged sentences

Capital project expenditures ( 367.8 ) ( 445.7 )

Acquisition of businesses, net of cash acquired — ( 241.3 )

Proceeds from sale of Arlington — 195.7

10 unchanged sentences

Other ( 1.6 ) 1.7

Net cash used in financing activities ( 173.5 ) ( 47.7 )

Net cash (used in) provided by financing activities ( 216.7 ) 38.7

Cash flows from discontinued operations:

Operating activities of discontinued operations 1.0 0.5

Net increase in cash, cash equivalents and restricted cash 9.1 236.4

Net increase (decrease) in cash, cash equivalents and restricted cash 9.6 ( 11.5 )

Cash, cash equivalents and restricted cash, beginning of period 221.8 204.7

1 unchanged sentence

The accompanying notes are an integral part of the condensed consolidated financial statements.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

CHURCHILL DOWNS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions) 2024 2023

8 unchanged sentences

Repurchase of common stock included in accrued expense and other current liabilities 9.0 —

Deferred payments for acquisition of business included in other liabilities 1.2 6.9

The accompanying notes are an integral part of the condensed consolidated financial statements.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

Churchill Downs Incorporated

35 unchanged sentences

The Company is currently evaluating the impact of this standard on the consolidated financial statements and related disclosures.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

Churchill Downs Incorporated

2 unchanged sentences

On August 22, 2023, the Company completed its acquisition of Exacta Systems, LLC ("Exacta") for a purchase consideration of $ 248.2 million, net of cash acquired, which consisted of a $ 241.3 million cash payment and $ 6.9 million of deferred payments, which are payable over two years from acquisition (the "Exacta Transaction").

As of June 30, 2024, there were $ 4.9 million deferred payments remaining.

As of September 30, 2024, there were $ 1.2 million deferred payments remaining.

Exacta is a leading provider of central determinate system technology in Historical Racing Machines ("HRMs") across the country.

8 unchanged sentences

Adjustments 0.1 0.2 — — 0.3

Balances as of June 30, 2024 $ 376.3 $ 233.6 $ 290.3 $ — $ 900.2

Balances as of September 30, 2024 $ 376.3 $ 233.6 $ 290.3 $ — $ 900.2

We performed our annual goodwill impairment analysis as of April 1, 2024, and no adjustment to the carrying value of goodwill was required.

2 unchanged sentences

Other intangible assets are comprised of the following:

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

(in millions) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount

9 unchanged sentences

Based on the results of these analyses, no indefinite-lived intangible asset impairments were identified in connection with our annual impairment testing.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

The Company’s effective income tax rate for the three months ended June 30, 2024 was higher than the U.S.

The Company’s effective income tax rate for the three months ended September 30, 2024 was higher than the U.S.

federal statutory rate of 21.0% primarily resulting from state income taxes, non-deductible officer's compensation, and other non-deductible expense, partially offset by the excess tax benefit from the payment of restricted stock compensation and the tax benefit from the expiration of the statute of limitations for certain unrecognized tax benefits.

The Company's effective income tax rate for the nine months ended September 30, 2024 was higher than the U.S.

federal statutory rate of 21.0% primarily resulting from state income taxes and non-deductible officer's compensation.

The Company's effective income tax rate for the six months ended June 30, 2024 was higher than the U.S.

federal statutory rate of 21.0% primarily resulting from state income taxes and non-deductible officer's compensation, partially offset by a benefit from the remeasurement of deferred income tax liabilities, primarily related to certain entity classification elections made in the first quarter of 2024 that decreased income attributable to states with higher tax rates compared to the prior year.

The Company’s effective income tax rate for the three months and six months ended June 30, 2023 was higher than the U.S.

The Company’s effective income tax rate for the three months ended September 30, 2023 was higher than the U.S.

federal statutory rate of 21.0% primarily resulting from state income taxes.

The Company’s effective income tax rate for the nine months ended September 30, 2023 was higher than the U.S.

federal statutory rate of 21.0% primarily resulting from state income taxes and non-deductible officer’s compensation.

6 unchanged sentences

We repurchased the following shares under the 2021 Stock Repurchase Program:

Three Months Ended June 30, Six Months Ended June 30,

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

(in millions, except share data) 2024 2023 2024 2023

1 unchanged sentence

2021 Stock Repurchase Program 67,139 $ 9.0 310,367 $ 37.3 345,834 $ 43.9 310,367 $ 37.3

We had approximately $ 179.9 million of repurchase authority remaining under the 2021 Stock Repurchase Program at June 30, 2024, based on trade date.

We had approximately $ 170.9 million of repurchase authority remaining under the 2021 Stock Repurchase Program at September 30, 2024, based on trade date.

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.

6 unchanged sentences

We have stock-based employee compensation plans with awards outstanding under the Churchill Downs Incorporated 2016 Omnibus Stock Incentive Plan (the "2016 Plan") and the Executive Long-Term Incentive Compensation Plan, which was adopted pursuant to the 2016 Plan.

Our total stock-based compensation expense, which includes expenses related to restricted stock awards ("RSAs"), restricted stock unit awards ("RSUs"), performance share unit awards ("PSUs"), and stock options associated with our employee stock purchase plan was $ 8.9 million and $ 16.1 million for the three months and six months ended June 30, 2024 and $ 8.1 million and $ 16.7 million for the three months and six months ended June 30, 2023, respectively.

During the six months ended June 30, 2024, the Company awarded RSUs to employees, RSUs and PSUs to certain named executive officers ("NEOs"), and RSAs and RSUs to directors.

The vesting criteria for the PSU awards granted in 2024 were based on a three-year service period with two performance conditions and a market condition related to relative total shareholder return ("TSR") consistent with prior year grants.

The total compensation cost we will recognize under the PSUs is

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

Our total stock-based compensation expense, which includes expenses related to restricted stock awards ("RSAs"), restricted stock unit awards ("RSUs"), performance share unit awards ("PSUs"), and stock options associated with our employee stock purchase plan was $ 7.1 million and $ 23.2 million for the three months and nine months ended September 30, 2024 and $ 8.1 million and $ 24.8 million for the three months and nine months ended September 30, 2023, respectively.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

determined using the Monte Carlo valuation methodology, which factors in the value of the TSR market condition when determining the grant date fair value of the PSU.

During the nine months ended September 30, 2024, the Company awarded RSUs to employees, RSUs and PSUs to certain named executive officers ("NEOs"), and RSAs and RSUs to directors.

The total compensation cost we will recognize under the PSUs is determined using the Monte Carlo valuation methodology, which factors in the value of the TSR market condition when determining the grant date fair value of the PSU.

Compensation cost for each PSU is recognized during the performance and service period based on the probable achievement of the two performance criteria.

8 unchanged sentences

The following table presents our total debt outstanding:

(in millions) June 30, 2024 December 31, 2023

(in millions) September 30, 2024 December 31, 2023

Term Loan B-1 due 2028 $ 289.5 $ 291.8

10 unchanged sentences

Credit Agreement

At June 30, 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"), $ 290.2 million senior secured term loan B-1 (the "Term Loan B-1"), $ 1.2 billion senior secured term loan A (the "Term Loan A"), and $ 100.0 million swing line commitment.

At September 30, 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"), $ 289.5 million senior secured term loan B-1 (the "Term Loan B-1"), $ 1.2 billion senior secured term loan A (the "Term Loan A"), and $ 100.0 million swing line commitment.

On July 3, 2024, the Company closed an amendment of the Credit Agreement to (i) extend the maturity date of the Revolver and Term Loan A from 2027 to 2029 subject to an earlier “springing maturity” if certain indebtedness in respect of outstanding notes or other material indebtedness having a maturity date prior to July 3, 2029, is not refinanced or extended to a date after July 3, 2029, at least 91 days prior to such other debt’s stated maturity date, and (ii) amend certain other provisions of the Credit Agreement.

2 unchanged sentences

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 June 30, 2024, that applicable margin was 150 basis points which was based on the pricing grid in the Credit Agreement.

The Company had $ 893.5 million available borrowing capacity, after consideration of $ 6.0 million in outstanding letters of credit, under the Revolver as of June 30, 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 June 30, 2024, the Company's commitment fee rate was 0.25 %.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

As of September 30, 2024, that applicable margin was 150 basis points which was based on the pricing grid in the Credit Agreement.

The Company had $ 902.4 million available borrowing capacity, after consideration of $ 7.6 million in outstanding letters of credit, under the Revolver as of September 30, 2024.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

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, 2024, the Company's commitment fee rate was 0.25 %.

2027 Senior Notes

As of June 30, 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").

As of September 30, 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 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 1st, 2019.

1 unchanged sentence

2028 Senior Notes

As of June 30, 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.

As of September 30, 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 %.

3 unchanged sentences

2030 Senior Notes

As of June 30, 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").

As of September 30, 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 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 1st, 2022.

1 unchanged sentence

2031 Senior Notes

As of June 30, 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").

As of September 30, 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 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.

REVENUE FROM CONTRACTS WITH CUSTOMERS

Performance Obligations

As of June 30, 2024, our Live and Historical Racing segment had remaining performance obligations on contracts with a duration greater than one year relating to television rights, sponsorships, personal seat licenses, and admissions, with an aggregate transaction price of $ 252.3 million.

As of September 30, 2024, our Live and Historical Racing segment had remaining performance obligations on contracts with a duration greater than one year relating to television rights, sponsorships, personal seat licenses, and admissions, with an aggregate transaction price of $ 262.3 million.

The revenue we expect to recognize on these remaining performance obligations is $ 1.0 million for the remainder of 2024, $ 58.1 million in 2025, $ 57.1 million in 2026, and the remainder thereafter.

As of June 30, 2024, our remaining performance obligations on contracts with a duration greater than one year in segments other than Live and Historical Racing were not material.

As of September 30, 2024, our remaining performance obligations on contracts with a duration greater than one year in segments other than Live and Historical Racing were not material.

Contract Assets and Contract Liabilities

As of June 30, 2024 and December 31, 2023, contract assets were not material.

As of June 30, 2024 and December 31, 2023, contract liabilities were $ 46.6 million and $ 92.3 million, respectively, which are included in current deferred revenue, non-current deferred revenue, and accrued expense in the accompanying Condensed Consolidated Balance Sheets.

As of September 30, 2024 and December 31, 2023, contract assets were not material.

As of September 30, 2024 and December 31, 2023, contract liabilities were $ 54.9 million and $ 92.3 million, respectively, which are included in current deferred revenue, non-current deferred revenue, and accrued expense in the accompanying Condensed Consolidated Balance Sheets.

Contract liabilities primarily relate to the Live and Historical Racing segment and the decrease was primarily due to recognized deferred revenue related to the 150th Kentucky Derby.

We recognized $ 67.2 million and $ 73.0 million of revenue during the three months and six months ended June 30, 2024, respectively, which was included in the contract liabilities balance at December 31, 2023.

We recognized $ 38.8 million and $ 42.4 million of revenue during the three months and six months ended June 30, 2023, respectively, which was included in the contract liabilities balance at December 31, 2022.

We recognized $ 1.1 million and $ 74.1 million of revenue during the three months and nine months ended September 30, 2024, respectively, which was included in the contract liabilities balance at December 31, 2023.

We recognized $ 1.2 million and $ 43.6 million of revenue during the three months and nine months ended September 30, 2023, respectively, which was included in the contract liabilities balance at December 31, 2022.

Disaggregation of Revenue

The Company has included its disaggregated revenue disclosures as follows:

• For the Live and Historical Racing segment, revenue is disaggregated between Churchill Downs Racetrack and historical racing properties given that Churchill Downs Racetrack revenue primarily revolves around live racing events while our other Live and Historical Racing properties' revenues primarily revolve around historical racing.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

segment is also disaggregated by location given the geographic economic factors that affect the revenue of service offerings.

This segment is also disaggregated by location given the geographic economic factors that affect the revenue of service offerings.

Within the Live and Historical Racing segment, revenue is further disaggregated between live and simulcast racing, historical racing, racing event-related services, and other services.

4 unchanged sentences

The tables below present net revenue from external customers and intercompany revenue from each of our segments:

Three Months Ended June 30, Six Months Ended June 30,

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

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

(in millions) 2024 2023 2024 2023

29 unchanged sentences

Intercompany net revenue $ — $ — $ — $ —

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

(in millions) Live and Historical Racing TwinSpires Gaming Total Segments All Other Total

7 unchanged sentences

Total $ 247.5 $ 111.3 $ 269.7 $ 628.5 $ — $ 628.5

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

(in millions) Live and Historical Racing TwinSpires Gaming Total Segments All Other Total

8 unchanged sentences

(a) Food and beverage, hotel, and other services furnished to customers for free as an inducement to wager or through the redemption of our customers' loyalty points are recorded at the estimated standalone selling prices in other revenue with a corresponding offset recorded as a reduction in historical racing pari-mutuel revenue for HRMs or gaming revenue for our casino properties.

These amounts were $ 14.2 million for the three months ended June 30, 2024 and $ 12.3 million for the three months ended June 30, 2023.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

These amounts were $ 14.2 million for the three months ended September 30, 2024 and $ 13.3 million for the three months ended September 30, 2023.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

(in millions) Live and Historical Racing TwinSpires Gaming Total Segments All Other Total

7 unchanged sentences

Total $ 957.3 $ 369.6 $ 783.1 $ 2,110.0 $ 0.1 $ 2,110.1

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

(in millions) Live and Historical Racing TwinSpires Gaming Total Segments All Other Total

8 unchanged sentences

These amounts were $ 27.6 million for the six months ended June 30, 2024 and $ 24.5 million for the six months ended June 30, 2023.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

These amounts were $ 41.7 million for the nine months ended September 30, 2024 and $ 37.8 million for the nine months ended September 30, 2023.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

Churchill Downs Incorporated

3 unchanged sentences

Accounts receivable is comprised of the following:

(in millions) June 30, 2024 December 31, 2023

(in millions) September 30, 2024 December 31, 2023

Trade receivables $ 36.6 $ 42.6

5 unchanged sentences

Accrued expenses and other current liabilities consisted of the following:

(in millions) June 30, 2024 December 31, 2023

(in millions) September 30, 2024 December 31, 2023

Account wagering deposits liability $ 61.4 $ 58.7

18 unchanged sentences

Redemption value adjustment 1.8

Balance, June 30, 2024 $ 16.1

Balance, September 30, 2024 $ 17.9

INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES

Investments in and advances to unconsolidated affiliates as of June 30, 2024 and December 31, 2023 primarily consisted of interests in Rivers Casino Des Plaines ("Rivers Des Plaines") and Miami Valley Gaming and Racing ("MVG").

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

Investments in and advances to unconsolidated affiliates as of September 30, 2024 and December 31, 2023 primarily consisted of interests in Rivers Casino Des Plaines ("Rivers Des Plaines") and Miami Valley Gaming and Racing ("MVG").

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

Churchill Downs Incorporated

5 unchanged sentences

As a result, we account for Rivers Des Plaines using the equity method.

As of June 30, 2024 , the net aggregate basis difference between the Company’s investment in Rivers Des Plaines and the amounts of the underlying equity in net assets was $ 832.8 million.

Our investment in Rivers Des Plaines was $ 535.1 million and $ 541.2 million as of June 30, 2024 and December 31, 2023, respectively.

The Company received distributions from Rivers Des Plaines of $ 58.7 million and $ 68.2 million for the six months ended June 30, 2024 and 2023, respectively.

As of September 30, 2024 , the net aggregate basis difference between the Company’s investment in Rivers Des Plaines and the amounts of the underlying equity in net assets was $ 832.9 million.

Our investment in Rivers Des Plaines was $ 537.9 million and $ 541.2 million as of September 30, 2024 and December 31, 2023, respectively.

The Company received distributions from Rivers Des Plaines of $ 78.8 million and $ 93.1 million for the nine months ended September 30, 2024 and 2023, respectively.

Miami Valley Gaming and Racing

2 unchanged sentences

Since both the Company and DNC have participating rights over MVG, and both must consent to certain operating, investing and financing decisions, we account for MVG using the equity method.

Our investment in MVG was $ 113.7 million and $ 114.6 million as of June 30, 2024 and December 31, 2023, respectively.

The Company received distributions from MVG of $ 23.0 million and $ 23.5 million for the six months ended June 30, 2024 and 2023, respectively.

Our investment in MVG was $ 112.3 million and $ 114.6 million as of September 30, 2024 and December 31, 2023, respectively.

The Company received distributions from MVG of $ 35.0 million and $ 33.5 million for the nine months ended September 30, 2024 and 2023, respectively.

Summarized Financial Results for our Unconsolidated Affiliates

Summarized below are the financial results for our unconsolidated affiliates.

Three Months Ended June 30, Six Months Ended June 30,

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

(in millions) 2024 2023 2024 2023

6 unchanged sentences

Net income $ 58.3 $ 56.8 $ 188.3 $ 190.7

(in millions) June 30, 2024 December 31, 2023

(in millions) September 30, 2024 December 31, 2023

Current assets $ 93.9 $ 104.8

12 unchanged sentences

The following methods and assumptions are used to estimate the fair value of each class of financial instruments for which it is practicable to estimate.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

Churchill Downs Incorporated

5 unchanged sentences

The carrying amounts and estimated fair values by input level of the Company's financial instruments are as follows:

June 30, 2024

September 30, 2024

(in millions) Carrying Amount Fair Value Level 1 Level 2 Level 3

28 unchanged sentences

Various factors, including but not limited to, the outcome of potentially lengthy discovery and the resolution of important factual questions, may need to be determined before probability

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

Churchill Downs Incorporated

9 unchanged sentences

The following is a reconciliation of the numerator and denominator of the net income per common share computations:

Three Months Ended June 30, Six Months Ended June 30,

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

(in millions, except per share data) 2024 2023 2024 2023

22 unchanged sentences

Adjusted EBITDA includes our portion of EBITDA from our equity investments and the portion of EBITDA attributable to a noncontrolling interest.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

Churchill Downs Incorporated

11 unchanged sentences

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 .

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

6 unchanged sentences

Net revenue by segment is comprised of the following:

Three Months Ended June 30, Six Months Ended June 30,

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

(in millions) 2024 2023 2024 2023

4 unchanged sentences

Net Revenue $ 628.5 $ 572.5 $ 2,110.1 $ 1,900.5

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

Churchill Downs Incorporated

1 unchanged sentence

Adjusted EBITDA by segment is comprised of the following:

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

(in millions) Live and Historical Racing TwinSpires Gaming

10 unchanged sentences

Adjusted EBITDA $ 93.0 $ 42.5 $ 123.3

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

(in millions) Live and Historical Racing TwinSpires Gaming

10 unchanged sentences

Adjusted EBITDA $ 80.9 $ 33.9 $ 122.3

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

(in millions) Live and Historical Racing TwinSpires Gaming

10 unchanged sentences

Adjusted EBITDA $ 473.0 $ 128.3 $ 386.8

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

(in millions) Live and Historical Racing TwinSpires Gaming

10 unchanged sentences

Adjusted EBITDA $ 386.5 $ 97.2 $ 375.2

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

Churchill Downs Incorporated

1 unchanged sentence

Adjusted EBITDA by segment is comprised of the following:

Three Months Ended June 30, Six Months Ended June 30,

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

(in millions) 2024 2023 2024 2023

28 unchanged sentences

Total Adjusted EBITDA $ 235.3 $ 218.2 $ 922.6 $ 804.8

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

The table below presents total asset information for each of our segments:

(in millions) June 30, 2024 December 31, 2023

(in millions) September 30, 2024 December 31, 2023

Total assets:

6 unchanged sentences

The table below presents total capital expenditures for each of our segments:

Six Months Ended June 30,

Nine Months Ended September 30,

(in millions) 2024 2023

7 unchanged sentences

SUBSEQUENT EVENTS

On July 3, 2024, the Company closed an amendment of the Credit Agreement to (i) extend the maturity date of the Revolver and Term Loan A from 2027 to 2029 and (ii) amend certain other provisions of the Credit Agreement.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024

At its regularly scheduled meeting held on October 22, 2024, the Board of Directors of the Company declared an annual cash dividend on the Company's common stock of $ 0.409 per outstanding share, to be paid on January 3, 2025, to shareholders of record as of the close of business on December 6, 2024, with aggregate cash dividend paid to each shareholder rounded to the nearest whole cent.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2024

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 1. Financial Statements