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Item 1. Financial Statements

2025-04-23 compared with 2024-10-23 · 176 added, 278 removed, 499 unchanged (48% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

Three Months Ended March 31,

(in millions, except per common share data) 2025 2024

Live and Historical Racing $ 272.5 $ 245.1

TwinSpires 111.3 108.5 369.6 340.7

Wagering Services and Solutions 106.9 106.6

Gaming 263.2 239.2

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Live and Historical Racing 189.7 157.2

TwinSpires 72.3 73.4 229.5 219.8

Wagering Services and Solutions 67.2 67.9

Gaming 192.1 178.5

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Selling, general and administrative expense 54.5 54.8

Asset impairments 3.9 — 3.9 24.5

Transaction expense, net 0.4 4.1

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Equity in income of unconsolidated affiliates 33.3 37.8

Gain on sale of Arlington — — — 114.0

Miscellaneous, net 0.3 8.1

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Net income attributable to noncontrolling interest 0.5 —

Net income attributable to Churchill Downs Incorporated $ 65.4 $ 61.0 $ 355.1 $ 359.7

Net income and comprehensive income attributable to

Churchill Downs Incorporated $ 76.7 $ 80.4

Net income attributable to Churchill Downs Incorporated per common share data:

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

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

CHURCHILL DOWNS INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(in millions) March 31, 2025 December 31, 2024

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 SEPTEMBER 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

CHURCHILL DOWNS INCORPORATED

11 unchanged sentences

Balance, March 31, 2025 72.8 $ — $ 1,072.7 $ ( 1.0 ) $ 1,071.7

Net income attributable to Churchill Downs Incorporated 209.3 209.3

Repurchase of common stock ( 0.1 ) ( 8.9 ) ( 4.1 ) ( 13.0 )

Taxes paid related to net share settlement of stock awards ( 0.2 ) ( 0.2 )

Stock-based compensation 8.9 8.9

Other ( 0.9 ) ( 0.1 ) ( 1.0 )

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

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Balance, December 31, 2023 74.5 $ — $ 894.5 $ ( 0.9 ) $ 893.6

Net income 155.7 155.7

Net income attributable to Churchill Downs Incorporated 80.4 80.4

Issuance of common stock 0.3 —

Repurchase of common stock ( 1.2 ) ( 7.2 ) ( 138.5 ) ( 145.7 )

Taxes paid related to net share settlement of stock awards ( 0.1 ) ( 7.6 ) ( 7.6 )

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Balance, March 31, 2024 73.5 $ — $ 827.8 $ ( 0.9 ) $ 826.9

Net income 143.0 143.0

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

Stock-based compensation 8.1 8.1

Other ( 1.4 ) ( 1.4 )

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 SEPTEMBER 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

CHURCHILL DOWNS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

(in millions) 2025 2024

7 unchanged sentences

Deferred income taxes — 4.9

Asset impairments 3.9 24.5

Amortization of operating lease assets 1.6 1.4

Gain on sale of Arlington — ( 114.0 )

Other 2.3 1.7

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Capital project expenditures ( 67.5 ) ( 142.6 )

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

Proceeds from sale of Arlington — 195.7

Other 1.8 ( 5.8 )

Net cash used in investing activities ( 80.1 ) ( 153.4 )

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Other ( 0.1 ) ( 0.6 )

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

Net cash used in financing activities ( 147.9 ) ( 101.1 )

Net increase in cash, cash equivalents and restricted cash 18.5 0.2

Cash, cash equivalents and restricted cash, beginning of period 252.7 221.8

1 unchanged sentence

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

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

CHURCHILL DOWNS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

Nine Months Ended September 30,

Three Months Ended March 31,

(in millions) 2025 2024

8 unchanged sentences

Repurchase of common stock included in accrued expense and other current liabilities 6.0 4.0

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 SEPTEMBER 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

Churchill Downs Incorporated

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We conduct our business through three reportable segments:

Live and Historical Racing, TwinSpires, and Gaming.

Live and Historical Racing, Wagering Services and Solutions, and Gaming.

The Wagering Services and Solutions segment was previously known as the TwinSpires segment.

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

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

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which enhances the disclosures required for operating segments in the Company’s annual and interim consolidated financial statements.

The amendments are effective for the Company in fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption of the amendment is permitted, including adoption in any interim periods for which financial statements have not been issued.

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

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

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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 SEPTEMBER 30, 2024

In November 2024, FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

Under ASU 2024-03, a public entity would be required to disclose information about purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depletion for each income statement line item that contains those expenses.

This standard is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

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

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill was $ 900.2 million as of March 31, 2025 and December 31, 2024.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

Exacta Systems

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 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.

The Exacta Transaction enables the Company to realize significant synergies related to the Company’s HRM operations.

Exacta operates within the Company’s TwinSpires segment and will continue to service its growing portfolio of third-party HRM operators in Kentucky, Wyoming, and New Hampshire and plans to expand its international presence.

Goodwill of $ 177.4 million related to the Exacta Transaction was recognized, of which $ 96.0 million was allocated to the Live and Historical Racing segment and $ 81.4 million was allocated to the TwinSpires segment.

The goodwill related to the Exacta Transaction is deductible for tax purposes.

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill, by segment, is composed of the following:

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

Balances as of December 31, 2023 $ 376.2 $ 233.4 $ 290.3 $ — $ 899.9

Adjustments 0.1 0.2 — — 0.3

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.

We assessed goodwill for impairment by performing qualitative or quantitative analyses for each reporting unit.

We concluded that the fair values of our reporting units exceeded their carrying values, and therefore no impairments were identified.

Other intangible assets are comprised of the following:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

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

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Total $ 2,406.3 $ 2,409.0

In the second quarter of 2023, the Company recognized a $ 24.5 million non-cash impairment charge for the Presque Isle Downs and Casino ("Presque Isle") gaming rights and trademark.

The Company continues to monitor the current economic conditions and the impacts on the results of operations of Presque Isle.

The Company is continuing to monitor the current economic conditions and the impacts on the results of operations of Presque Isle Downs and Casino due to historical impairments recorded in prior periods related to the gaming rights and trademark.

Future economic conditions could have a negative impact on the estimates and assumptions utilized in our asset impairment assessments.

These potential impacts could increase the risk of a future impairment of assets at Presque Isle.

We performed our annual indefinite-lived intangible assets impairment analysis as of April 1, 2024.

We assessed our indefinite-lived intangible assets for impairment by performing qualitative or quantitative analyses for each asset.

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 SEPTEMBER 30, 2024

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

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 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.

The Company’s effective income tax rate of 19.4 % for the three months ended March 31, 2025 was lower than the U.S.

federal statutory rate of 21.0% primarily resulting from a $ 6.0 million benefit from the remeasurement of deferred income tax liabilities, as a result of certain entity classification elections that were made in the first quarter of 2025 decreasing income attributable to states with higher tax rates compared to prior year, partially offset by an unfavorable impact from state income taxes and non-deductible officer’s compensation.

The Company’s effective income tax rate for the three months ended March 31, 2024 was equal to the U.S.

federal statutory rate of 21.0%.

The Company’s effective income tax rate for the three months ended March 31, 2024 included an unfavorable impact from state income taxes and non-deductible officer's compensation that was offset by a $ 5.6 million benefit from the remeasurement of deferred income tax liabilities as a result of certain entity classification elections that were made in the first quarter of 2024 decreasing income attributable to states with higher tax rates compared to prior year.

SHAREHOLDERS' EQUITY

Stock Repurchase Programs

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 any unspent amount remaining under the prior program 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.

On March 12, 2025, the Board of Directors of the Company approved a new common stock repurchase program of up to $ 500.0 million (the "2025 Stock Repurchase Program").

The 2025 Stock Repurchase Program includes and is not in addition to any unspent amount remaining under the prior authorizations, including an unused authorization of $ 125.6 million from the 2021 Stock Repurchase Program.

Share repurchases may be made at management's discretion from time to time in 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.

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

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

We had approximately $ 434.6 million of repurchase authority remaining under the 2025 Stock Repurchase Program at March 31, 2025, based on trade date.

During the three months ended March 31, 2025 and 2024, w e repurchased the following shares under our stock repurchase programs:

Three Months Ended March 31,

(in millions, except share data) 2025 2024

Repurchase Program Shares Aggregate Purchase Price Shares Aggregate Purchase Price Shares Aggregate Purchase Price Shares Aggregate Purchase Price

Repurchase Program Shares Aggregate Purchase Price Shares Aggregate Purchase Price

2025 Stock Repurchase Program 586,238 $ 65.4 — $ —

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

2021 Stock Repurchase Program 212,012 24.0 184,821 22.0

Total 798,250 $ 89.4 184,821 $ 22.0

As of March 31, 2025 and December 31, 2024, we had $ 6.0 million and $ 3.0 million, respectively, accrued for the future cash settlement of executed repurchases of our common stock.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

The Duchossois Group Share Repurchase

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.

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

Two for One Stock Split

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.

STOCK-BASED COMPENSATION PLANS

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 $ 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

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.

On February 18, 2025, our Board of Directors approved the replacement of the Churchill Downs Incorporated 2016 Omnibus Stock Incentive Plan (the "2016 Plan") with a new plan, the Churchill Downs Incorporated 2025 Omnibus Stock and Incentive Plan (the "2025 Plan").

The 2025 Plan was approved by shareholders at the Company's 2025 Annual Meeting of Shareholders held on April 22, 2025, and no further awards will be granted under the 2016 Plan.

We have stock-based employee compensation plans with awards outstanding under 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 $ 3.6 million for the three months ended March 31, 2025 and $ 7.2 million for the three months ended March 31, 2024.

At March 31, 2025 and December 31, 2024, the Company had $ 9.1 million and $ 25.0 million, respectively, recorded as liability-classified awards, which are included in accrued expense and other liabilities in the accompanying Condensed Consolidated Balance Sheets.

During the three months ended March 31, 2025, the Company awarded RSUs to employees, as well as RSUs and PSUs to certain named executive officers ("NEOs").

The vesting criteria for the PSU awards granted in 2025 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.

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

The PSUs are converted into shares of our common stock at the time the PSU award value is finalized.

A summary of the RSAs, RSUs and PSUs granted during 2024 is presented below (units in thousands):

The PSUs can be converted into shares of our common stock at the time the PSU award value is finalized.

A summary of the RSUs and PSUs granted during 2025 is presented below (units in thousands):

Grant Year Award Type Number of Units Awarded (1)

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2025 PSU 87 Three -year performance and service period ending in 2027

2024 RSA 4 One -year service period ending in 2025

(1) PSUs reflect the target number of units for the original PSU grant.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

The following table presents our total debt outstanding:

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

(in millions) March 31, 2025 December 31, 2024

Term Loan B-1 due 2028 $ 288.0 $ 288.8

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Credit Agreement

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.

At March 31, 2025, 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"), $ 288.0 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.

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.

On February 14, 2025, the Company announced that it closed the seventh amendment of the Credit Agreement.

The seventh amendment to the Credit Agreement (i) reduced the interest rate margin applicable to the Term Loan B-1 by 0.25 % from Secured Overnight Financing Rate ("SOFR") plus 200 basis points to SOFR plus 175 basis points, (ii) eliminated the 0.10 % credit spread adjustment previously applicable to the Term Loan B-1, and (iii) made certain other amendments to the Credit Agreement.

The Term Loan B-1 requires quarterly payments of 0.25 % of the original $ 300.0 million balance and 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, 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

As of March 31, 2025, that applicable margin was 150 basis points, which was based on the pricing grid in the Credit Agreement.

The Company had $ 830.9 million available borrowing capacity, after consideration of $ 7.4 million in outstanding letters of credit, under the Revolver as of March 31, 2025.

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 %.

For the period ended March 31, 2025, the Company's commitment fee rate was 0.25 %.

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").

As of March 31, 2025, 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.

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

2028 Senior Notes

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.

As of March 31, 2025, 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 %.

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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").

As of March 31, 2025, 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.

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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").

As of March 31, 2025, 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.

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Performance Obligations

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.

As of March 31, 2025, 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 $ 290.4 million.

The revenue we expect to recognize on these remaining performance obligations is $ 67.3 million for the remainder of 2025, $ 62.8 million in 2026, $ 49.6 million in 2027, and the remainder thereafter.

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.

As of March 31, 2025, 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 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 $ 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.

As of March 31, 2025 and December 31, 2024, contract assets were not material.

As of March 31, 2025 and December 31, 2024, contract liabilities were $ 174.2 million and $ 81.5 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 increase was primarily due to deferred revenue related to the 151st Kentucky Derby.

We recognized $ 6.0 million of revenue during the three months ended March 31, 2025, which was included in the contract liabilities balance at December 31, 2024.

We recognized $ 5.8 million of revenue during the three months ended March 31, 2024, which was included in the contract liabilities balance at December 31, 2023.

Disaggregation of Revenue

The Company has included its disaggregated revenue disclosures as follows:

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

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

• 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.

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.

• For the TwinSpires segment, revenue is disaggregated between live and simulcast racing, gaming, and other services.

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

• For the Wagering Services and Solutions segment, revenue is disaggregated between live and simulcast racing, gaming, and other services.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

• For the Gaming segment, revenue is disaggregated by location given the geographic economic factors that affect the revenue of Gaming service offerings.

Within the Gaming segment, revenue is further disaggregated between live and simulcast racing, racing event-related services, gaming, and other services.

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

We believe that these disclosures depict how the amount, nature, timing, and uncertainty of cash flows are affected by economic factors.

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

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,

Three Months Ended March 31,

(in millions) 2025 2024

9 unchanged sentences

Total Live and Historical Racing $ 272.5 $ 245.1

Wagering Services and Solutions:

$ 106.9 $ 106.6

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Live and Historical Racing $ 3.9 $ 3.8

TwinSpires 7.4 3.9 23.1 7.1

Wagering Services and Solutions 8.9 7.5

Gaming 4.0 4.0

2 unchanged sentences

Intercompany net revenue $ — $ —

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, 2024

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

Net revenue from external customers

Live and simulcast racing $ 15.2 $ 82.7 $ 5.0 $ 102.9 $ — $ 102.9

Historical racing (a)

205.9 — 9.3 215.2 — 215.2

Racing event-related services 5.0 — 1.4 6.4 — 6.4

3.1 4.4 224.3 231.8 — 231.8

18.3 24.2 29.7 72.2 — 72.2

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

Three Months Ended September 30, 2023

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

Net revenue from external customers

Live and simulcast racing $ 16.0 $ 86.3 $ 5.1 $ 107.4 $ — $ 107.4

Historical racing (a)

179.9 — 7.5 187.4 — 187.4

Racing event-related services 3.3 — 1.4 4.7 — 4.7

3.1 5.3 203.0 211.4 — 211.4

17.2 16.9 27.3 61.4 0.2 61.6

Total $ 219.5 $ 108.5 $ 244.3 $ 572.3 $ 0.2 $ 572.5

(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 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 SEPTEMBER 30, 2024

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

Nine Months Ended September 30, 2024

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

Three Months Ended March 31, 2025

(in millions) Live and Historical Racing Wagering Services and Solutions Gaming Total Segments All Other Total

Net revenue from external customers

6 unchanged sentences

Total $ 272.5 $ 106.9 $ 263.2 $ 642.6 $ — $ 642.6

Nine Months Ended September 30, 2023

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

Three Months Ended March 31, 2024

(in millions) Live and Historical Racing Wagering Services and Solutions Gaming Total Segments All Other Total

Net revenue from external customers

7 unchanged sentences

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

These amounts were $ 14.4 million for the three months ended March 31, 2025 and $ 13.4 million for the three months ended March 31, 2024.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

Churchill Downs Incorporated

3 unchanged sentences

Accounts receivable is comprised of the following:

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

(in millions) March 31, 2025 December 31, 2024

Trade receivables $ 36.3 $ 37.3

3 unchanged sentences

Total $ 108.6 $ 98.7

Other current assets

(in millions) March 31, 2025 December 31, 2024

Inventory $ 11.6 $ 11.6

Prepaid technology costs 12.0 6.4

Prepaid insurance and taxes 22.2 7.7

Other prepaid costs 22.9 16.0

Insurance deposits and other 3.9 4.7

Total $ 72.6 $ 46.4

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following:

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

(in millions) March 31, 2025 December 31, 2024

Account wagering deposits liability $ 72.6 $ 63.1

4 unchanged sentences

Accrued gaming liabilities 35.3 35.3

Accrued insurance 12.7 13.1

Accrued property taxes 12.8 9.7

Current lease liabilities 8.6 8.7

Other 85.1 88.1

4 unchanged sentences

NYRA's interest is treated as redeemable noncontrolling interest and is presented outside of permanent equity on the Company’s Condensed Consolidated Balance Sheets.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

The redeemable noncontrolling interest is initially accounted for at fair value and subsequently adjusted to the greater of the redemption value or the carrying value.

3 unchanged sentences

Balance, December 31, 2024 $ 19.7

Redeemable noncontrolling interest initial measurement 14.4

Net income attributable to redeemable noncontrolling interest 0.5

Redemption value adjustment 1.2

Balance, September 30, 2024 $ 17.9

Balance, March 31, 2025 $ 21.4

INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES

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

Notes to Condensed Consolidated Financial Statements

Investments in and advances to unconsolidated affiliates as of March 31, 2025 and December 31, 2024 primarily consisted of interests in Rivers Casino Des Plaines ("Rivers Des Plaines") and Miami Valley Gaming and Racing ("MVG").

Rivers Casino Des Plaines

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

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.

As of March 31, 2025 , 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 $ 833.0 million.

Our investment in Rivers Des Plaines was $ 548.4 million and $ 547.1 million as of March 31, 2025 and December 31, 2024, respectively.

The Company received distributions from Rivers Des Plaines of $ 20.9 million and $ 34.5 million for the three months ended March 31, 2025 and 2024, respectively.

Miami Valley Gaming and Racing

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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 $ 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.

Our investment in MVG was $ 114.7 million and $ 114.1 million as of March 31, 2025 and December 31, 2024, respectively.

The Company received distributions from MVG of $ 10.5 million in each of the three month periods ended March 31, 2025 and 2024.

Summarized Financial Results for our Unconsolidated Affiliates

Summarized below are the financial results for our unconsolidated affiliates.

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

Three Months Ended March 31,

(in millions) 2025 2024

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Depreciation and amortization 6.2 6.3

Total operating expense 139.0 141.0 419.4 424.8

Operating income 68.8 75.7

1 unchanged sentence

Net income $ 58.2 $ 64.7

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

(in millions) March 31, 2025 December 31, 2024

Current assets $ 103.5 $ 100.5

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 SEPTEMBER 30, 2024

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

Restricted Cash

2 unchanged sentences

The fair values of the Company's Term Loan B-1, Term Loan A, and Revolver under the Credit Agreement approximate the gross carrying value of the variable rate debt and as such are Level 2 measurements.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

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

September 30, 2024

March 31, 2025

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

27 unchanged sentences

For certain legal proceedings, we cannot reasonably estimate losses or a range of loss, if any, particularly for proceedings that are in the early stages of development or where the plaintiffs seek indeterminate damages.

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

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

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

can be established or before a loss or range of loss can be reasonably estimated.

Various factors, including but not limited to, the outcome of potentially lengthy discovery and the resolution of important factual questions, may need to be determined before probability can be established or before a loss or range of loss can be reasonably estimated.

In accordance with current accounting standards for loss contingencies and based upon information currently known to us, we establish reserves for litigation when it is probable that a loss associated with a claim or proceeding has been incurred and the amount of the loss or range of loss can be reasonably estimated.

4 unchanged sentences

In the event that a legal proceeding results in a substantial judgment against us, or settlement by us, there can be no assurance that any resulting liability or financial commitment would not have a material adverse impact on our business.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

NET INCOME PER COMMON SHARE COMPUTATIONS

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

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

Three Months Ended March 31,

(in millions, except per share data) 2025 2024

12 unchanged sentences

We manage our operations through three reportable segments:

Live and Historical Racing, TwinSpires, and Gaming.

Our operating segments reflect the internal management reporting used by our chief operating decision maker to evaluate results of operations and to assess performance and allocate resources.

On September 7, 2023, the Company began operating retail sports betting at its racetracks and HRM facilities in Kentucky.

In addition to retail sports betting, third-party service providers began operating online sports wagering in partnership with the Company’s racetracks on September 28, 2023.

Our retail and online sports betting business is included in the TwinSpires segment.

Live and Historical Racing, Wagering Services and Solutions, and Gaming.

Our operating segments reflect the internal management reporting used by our chief operating decision maker, our Chief Executive Officer, to evaluate results of operations and to assess performance and allocate resources.

Eliminations include the elimination of intersegment transactions.

1 unchanged sentence

Our chief operating decision maker utilizes Adjusted EBITDA to evaluate segment performance, develop strategy, and allocate resources.

Adjusted EBITDA includes the following adjustments:

Adjusted EBITDA includes the following adjustments, as applicable in each period:

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 SEPTEMBER 30, 2024

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

Adjusted EBITDA excludes:

3 unchanged sentences

• Stock-based compensation expense;

• Rivers Des Plaines' impact on our investments in unconsolidated affiliates from legal reserves and transaction costs;

• Asset impairments;

3 unchanged sentences

• Other charges, recoveries and expenses

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 .

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.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

We utilize the Adjusted EBITDA metric to provide a more accurate measure of our core operating results and enable management and investors to evaluate and compare from period to period our operating performance in a meaningful and consistent manner.

4 unchanged sentences

Net revenue by segment is comprised of the following:

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

Three Months Ended March 31,

(in millions) 2025 2024

Live and Historical Racing $ 272.5 $ 245.1

TwinSpires 111.3 108.5 369.6 340.7

Wagering Services and Solutions 106.9 106.6

Gaming 263.2 239.2

1 unchanged sentence

Net Revenue $ 642.6 $ 590.9

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

Churchill Downs Incorporated

1 unchanged sentence

Adjusted EBITDA by segment is comprised of the following:

Three Months Ended September 30, 2024

(in millions) Live and Historical Racing TwinSpires Gaming

Revenues $ 252.4 $ 118.7 $ 270.3

Gaming taxes and purses ( 66.7 ) ( 5.5 ) ( 87.8 )

Marketing and advertising ( 9.3 ) ( 1.4 ) ( 9.5 )

Salaries and benefits ( 31.1 ) ( 8.0 ) ( 42.7 )

Content expense ( 1.7 ) ( 45.9 ) ( 2.3 )

Selling, general and administrative expense ( 9.4 ) ( 4.2 ) ( 11.9 )

Maintenance, insurance and utilities ( 12.8 ) ( 1.1 ) ( 11.7 )

Property and other taxes ( 1.9 ) ( 0.1 ) ( 4.0 )

Other operating expense ( 26.6 ) ( 10.0 ) ( 21.1 )

Other income 0.1 — 44.0

Adjusted EBITDA $ 93.0 $ 42.5 $ 123.3

Three Months Ended September 30, 2023

(in millions) Live and Historical Racing TwinSpires Gaming

Revenues $ 225.5 $ 112.4 $ 244.9

Gaming taxes and purses ( 62.0 ) ( 5.8 ) ( 81.4 )

Marketing and advertising ( 7.6 ) ( 1.3 ) ( 8.9 )

Salaries and benefits ( 27.9 ) ( 7.0 ) ( 35.2 )

Content expense ( 1.6 ) ( 49.4 ) ( 2.4 )

Selling, general and administrative expense ( 7.4 ) ( 3.0 ) ( 9.9 )

Maintenance, insurance and utilities ( 12.5 ) ( 0.9 ) ( 10.3 )

Property and other taxes ( 1.7 ) ( 0.2 ) ( 3.6 )

Other operating expense ( 24.8 ) ( 10.9 ) ( 18.2 )

Other income 0.9 — 47.3

Adjusted EBITDA $ 80.9 $ 33.9 $ 122.3

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

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

Nine Months Ended September 30, 2024

(in millions) Live and Historical Racing TwinSpires Gaming

Three Months Ended March 31, 2025

(in millions) Live and Historical Racing Wagering Services and Solutions Gaming

Revenues $ 276.4 $ 115.8 $ 267.2

Gaming taxes and purses ( 231.7 ) ( 17.7 ) ( 251.8 )

Pari-mutuel taxes and purses ( 71.9 ) ( 4.4 ) ( 14.6 )

Gaming taxes ( 1.5 ) ( 0.4 ) ( 72.4 )

Marketing and advertising ( 13.8 ) ( 1.4 ) ( 8.2 )

3 unchanged sentences

Maintenance, insurance and utilities ( 10.4 ) ( 0.9 ) ( 9.5 )

Property and other taxes ( 6.4 ) ( 0.2 ) ( 10.7 )

Gaming equipment rental and technology costs ( 11.8 ) ( 0.7 ) ( 4.2 )

Food and beverage costs ( 3.6 ) — ( 4.2 )

Other operating expense (1)

( 16.9 ) ( 9.7 ) ( 16.8 )

Equity in income of unconsolidated affiliates — — 43.2

Other income 0.1 — 0.2

Adjusted EBITDA $ 102.0 $ 41.3 $ 123.5

Nine Months Ended September 30, 2023

(in millions) Live and Historical Racing TwinSpires Gaming

Three Months Ended March 31, 2024

(in millions) Live and Historical Racing Wagering Services and Solutions Gaming

Revenues $ 248.9 $ 114.1 $ 243.2

Gaming taxes and purses ( 203.9 ) ( 17.8 ) ( 246.7 )

Pari-mutuel taxes and purses ( 63.6 ) ( 4.1 ) ( 14.2 )

Gaming taxes ( 1.4 ) ( 0.8 ) ( 66.3 )

Marketing and advertising ( 9.3 ) ( 1.2 ) ( 7.8 )

3 unchanged sentences

Maintenance, insurance and utilities ( 10.3 ) ( 1.0 ) ( 9.6 )

Property and other taxes ( 4.4 ) ( 0.3 ) ( 9.9 )

Gaming equipment rental and technology costs ( 10.1 ) ( 1.0 ) ( 3.3 )

Food and beverage costs ( 3.1 ) — ( 3.8 )

Other operating expense (1)

( 13.4 ) ( 10.0 ) ( 14.6 )

Equity in income of unconsolidated affiliates — — 47.5

Other income — — 1.7

Adjusted EBITDA $ 100.8 $ 39.6 $ 122.8

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

(1) Other operating expense primarily includes supplies, regulatory licenses and fees, property taxes, and third-party service fees and costs.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

Adjusted EBITDA by segment is comprised of the following:

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

Three Months Ended March 31,

(in millions) 2025 2024

Reconciliation of Comprehensive Income to Adjusted EBITDA:

Net income attributable to Churchill Downs Incorporated $ 65.4 $ 61.0 $ 355.1 $ 359.7

Net income and comprehensive income attributable to Churchill Downs Incorporated $ 76.7 $ 80.4

Net income attributable to noncontrolling interest 0.5 —

Net income and comprehensive income 66.2 61.0 356.8 359.7

Net income 77.2 80.4

Depreciation and amortization 59.2 46.9

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Income tax provision 18.7 21.4

EBITDA $ 208.8 $ 191.8 $ 844.9 $ 809.5

Adjustments to EBITDA:

Stock-based compensation expense 3.6 7.2

Pre-opening expense 4.2 8.3

Arlington exit costs — 0.1 — 9.4

Other expenses, net ( 0.4 ) 0.2

Asset impairments 3.9 — 3.9 24.5

Transaction expense, net 0.4 4.1

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Interest, depreciation and amortization expense related to equity investments 9.9 10.3

Rivers Des Plaines' legal reserves and transaction costs — — 0.3 —

Other charges and recoveries, net — ( 6.7 )

Gain on sale of Arlington — — — ( 114.0 )

Total adjustments to EBITDA 26.5 26.4 77.7 ( 4.7 )

Total adjustments 167.9 162.1

Adjusted EBITDA $ 245.1 $ 242.5

1 unchanged sentence

Live and Historical Racing $ 102.0 $ 100.8

TwinSpires 42.5 33.9 128.3 97.2

Wagering Services and Solutions 41.3 39.6

Gaming 123.5 122.8

2 unchanged sentences

Total Adjusted EBITDA $ 245.1 $ 242.5

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) September 30, 2024 December 31, 2023

(in millions) March 31, 2025 December 31, 2024

Total assets:

Live and Historical Racing $ 4,192.0 $ 4,143.3

TwinSpires 465.6 473.9

Wagering Services and Solutions 479.7 460.6

Gaming 1,945.2 1,953.7

2 unchanged sentences

Total assets $ 7,347.1 $ 7,275.9

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

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

Nine Months Ended September 30,

Three Months Ended March 31,

(in millions) 2025 2024

1 unchanged sentence

Live and Historical Racing $ 67.6 $ 84.8

TwinSpires 14.2 12.0

Wagering Services and Solutions 6.6 3.8

Gaming 4.8 61.3

2 unchanged sentences

Total capital expenditures $ 80.1 $ 155.0

SUBSEQUENT EVENTS

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2025

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