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Item 1. Financial Statements

2025-07-23 compared with 2025-04-23 · 206 added, 104 removed, 571 unchanged (35% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended March 31,

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

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

10 unchanged sentences

Selling, general and administrative expense 60.9 57.4 115.4 112.2

Asset impairments 2.4 — 2.4 —

Transaction expense, net 1.1 0.6 1.5 4.7

10 unchanged sentences

Net income attributable to noncontrolling interest 0.7 0.9 1.2 0.9

Net income and comprehensive income attributable to

Churchill Downs Incorporated $ 76.7 $ 80.4

Net income attributable to Churchill Downs Incorporated $ 216.9 $ 209.3 $ 293.6 $ 289.7

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

5 unchanged sentences

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

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

CHURCHILL DOWNS INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

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

(in millions) June 30, 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 MARCH 31, 2025

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 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 216.9 216.9

Repurchase of common stock ( 2.6 ) ( 5.3 ) ( 245.1 ) ( 250.4 )

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

Stock-based compensation 5.4 5.4

Other ( 1.9 ) ( 1.9 )

Balance, June 30, 2025 70.2 $ — $ 1,042.6 $ ( 1.0 ) $ 1,041.6

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

CHURCHILL DOWNS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

Common Stock Retained

9 unchanged sentences

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

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

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

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

CHURCHILL DOWNS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(in millions) 2025 2024

7 unchanged sentences

Deferred income taxes 3.5 19.7

Asset impairments 2.4 —

Amortization of operating lease assets 3.2 2.7

8 unchanged sentences

Capital project expenditures ( 133.3 ) ( 257.2 )

Other ( 1.3 ) 1.9

Net cash used in investing activities ( 166.1 ) ( 290.1 )

5 unchanged sentences

Taxes paid related to net share settlement of stock awards ( 4.0 ) ( 10.5 )

Debt issuance costs ( 0.3 ) —

Change in bank overdraft ( 5.0 ) 2.6

1 unchanged sentence

Net cash used in financing activities ( 287.1 ) ( 173.5 )

Cash flows from discontinued operations:

Operating activities of discontinued operations — 1.0

Net increase in cash, cash equivalents and restricted cash 32.9 9.1

2 unchanged sentences

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

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

CHURCHILL DOWNS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

Three Months Ended March 31,

Six Months Ended June 30,

(in millions) 2025 2024

9 unchanged sentences

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

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

Churchill Downs Incorporated

29 unchanged sentences

Early adoption is permitted.

The amendments are expected to be applied prospectively to all annual periods beginning after December 15, 2024.

The additional disclosure requirements from this ASU will be incorporated into the Company's 2025 Annual Report on Form 10-K.

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

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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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill was $ 900.2 million as of June 30, 2025 and December 31, 2024.

We performed our annual goodwill impairment analysis as of April 1, 2025, 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:

March 31, 2025 December 31, 2024

June 30, 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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These potential impacts could increase the risk of a future impairment of assets at Presque Isle.

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.

We performed our annual indefinite-lived intangible assets impairment analysis as of April 1, 2025.

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.

The Company’s effective income tax rates of 25.5 % and 28.6 % for the three months ended June 30, 2025 and June 30, 2024, respectively, were 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 rates of 24.0 % and 26.6 % for the six months ended June 30, 2025 and June 30, 2024, respectively, were 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 tax benefits from the remeasurement of deferred income tax liabilities, as a result of certain entity classification elections that were made in the first quarters of 2025 and 2024, which decreased income attributable to states with higher tax rates compared to prior year.

SHAREHOLDERS' EQUITY

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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.

The 2025 Stock Repurchase Program includes and is not in addition to the $ 125.6 million remaining under 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 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,

We had approximately $ 184.2 million of repurchase authority remaining under the 2025 Stock Repurchase Program at June 30, 2025, based on trade date.

See Note 16, "Subsequent Events", for information on an updated stock repurchase program approved by the Board of Directors in July 2025.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

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

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

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

Repurchase Program Shares Aggregate Purchase Price Shares Aggregate Purchase Price

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

2025 Stock Repurchase Program 2,565,964 $ 250.4 — $ — 3,152,202 $ 315.8 — $ —

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Total 2,565,964 $ 250.4 93,874 $ 13.0 3,364,214 $ 339.8 278,695 $ 35.0

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

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

As of June 30, 2025 and December 31, 2024, we had $ 1.9 million and $ 3.0 million, respectively, accrued for the future cash settlement of executed repurchases of our common stock.

STOCK-BASED COMPENSATION PLANS

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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").

We have stock-based employee compensation plans with awards outstanding under the 2016 Plan, the 2025 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 $ 7.2 million and $ 10.8 million for the three months and six months ended June 30, 2025 and $ 8.9 million and $ 16.1 million for the three months and six months ended June 30, 2024, respectively.

At June 30, 2025 and December 31, 2024, the Company had $ 9.5 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 six months ended June 30, 2025, the Company awarded RSUs to employees, as well as RSUs and PSUs to certain named executive officers ("NEOs"), and RSAs and RSUs to directors.

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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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):

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

A summary of the RSAs, 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

2025 RSU 12 One -year service period ending in 2025

2025 RSA 2 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) March 31, 2025 December 31, 2024

(in millions) June 30, 2025 December 31, 2024

Term Loan B-1 due 2028 $ 287.2 $ 288.8

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Credit Agreement

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.

At June 30, 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"), $ 287.2 million senior secured term loan B-1 (the "Term Loan B-1"), $ 1.1 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.

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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 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.

As of June 30, 2025, that applicable margin was 150 basis points which was based on the pricing grid in the Credit Agreement.

The Company had $ 686.9 million available borrowing capacity, after consideration of $ 9.1 million in outstanding letters of credit, under the Revolver as of June 30, 2025.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

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

For the period ended June 30, 2025, the Company's commitment fee rate was 0.25 %.

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").

As of June 30, 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 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 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.

As of June 30, 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 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").

As of June 30, 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 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").

As of June 30, 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.

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.

The Company may redeem some or all of the 2031 Senior Notes at redemption prices set forth in the Indenture.

REVENUE FROM CONTRACTS WITH CUSTOMERS

Performance Obligations

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.

As of June 30, 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 $ 233.9 million.

The revenue we expect to recognize on these remaining performance obligations is $ 1.8 million for the remainder of 2025, $ 66.9 million in 2026, $ 52.6 million in 2027, and the remainder thereafter.

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.

As of June 30, 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 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.

As of June 30, 2025 and December 31, 2024, contract assets were not material.

As of June 30, 2025 and December 31, 2024, contract liabilities were $ 44.8 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 decrease was primarily due to the recognition of previously deferred revenue related to the 151st Kentucky Derby.

We recognized $ 47.9 million and $ 53.9 million of revenue during the three months and six months ended June 30, 2025, respectively, which was included in the contract liabilities balance at December 31, 2024.

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.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

Disaggregation of Revenue

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• 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, historical racing, racing event-related services, gaming, and other services.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

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:

Three Months Ended March 31,

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

(in millions) 2025 2024 2025 2024

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Intercompany net revenue $ — $ — $ — $ —

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

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

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Total $ 509.9 $ 158.4 $ 266.0 $ 934.3 $ 0.1 $ 934.4

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

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

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(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 $ 14.4 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

These amounts were $ 15.6 million for the three months ended June 30, 2025 and $ 14.2 million for the three months ended June 30, 2024.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

Six Months Ended June 30, 2025

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

Net revenue from external customers

Live and simulcast racing $ 64.8 $ 205.4 $ 15.0 $ 285.2 $ — $ 285.2

Historical racing (a)

488.9 — 13.7 502.6 — 502.6

Racing event-related services 173.7 — 0.9 174.6 — 174.6

6.3 7.9 439.5 453.7 — 453.7

48.7 52.0 60.1 160.8 0.1 160.9

Total $ 782.4 $ 265.3 $ 529.2 $ 1,576.9 $ 0.1 $ 1,577.0

Six Months Ended June 30, 2024

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

Net revenue from external customers

Live and simulcast racing $ 61.4 $ 195.2 $ 15.1 $ 271.7 $ — $ 271.7

Historical racing (a)

424.2 — 18.1 442.3 — 442.3

Racing event-related services 177.1 — 3.6 180.7 — 180.7

6.4 10.0 421.2 437.6 — 437.6

40.7 53.1 55.4 149.2 0.1 149.3

Total $ 709.8 $ 258.3 $ 513.4 $ 1,481.5 $ 0.1 $ 1,481.6

These amounts were $ 30.0 million for the six months ended June 30, 2025 and $ 27.6 million for the six months ended June 30, 2024.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

SUPPLEMENTAL BALANCE SHEET INFORMATION

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Accounts receivable is comprised of the following:

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

(in millions) June 30, 2025 December 31, 2024

Trade receivables $ 49.1 $ 37.3

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Other current assets

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

(in millions) June 30, 2025 December 31, 2024

Inventory $ 12.6 $ 11.6

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Accrued expenses and other current liabilities consisted of the following:

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

(in millions) June 30, 2025 December 31, 2024

Account wagering deposits liability $ 79.2 $ 63.1

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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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

Churchill Downs Incorporated

7 unchanged sentences

Redemption value adjustment 1.6

Balance, March 31, 2025 $ 21.4

Balance, June 30, 2025 $ 22.5

INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES

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").

Investments in and advances to unconsolidated affiliates as of June 30, 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 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.

As of June 30, 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 $ 833.1 million.

Our investment in Rivers Des Plaines was $ 554.7 million and $ 547.1 million as of June 30, 2025 and December 31, 2024, respectively.

The Company received distributions from Rivers Des Plaines of $ 39.8 million and $ 58.7 million for the six months ended June 30, 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 $ 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.

Our investment in MVG was $ 114.1 million as of June 30, 2025 and December 31, 2024.

The Company received distributions from MVG of $ 23.0 million for the six months ended June 30, 2025 and 2024.

Summarized Financial Results for our Unconsolidated Affiliates

Summarized below are the financial results for our unconsolidated affiliates.

Three Months Ended March 31,

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

(in millions) 2025 2024 2025 2024

5 unchanged sentences

Net income $ 65.0 $ 65.3 $ 123.2 $ 130.0

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

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

(in millions) June 30, 2025 December 31, 2024

Current assets $ 100.1 $ 100.5

16 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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

Churchill Downs Incorporated

1 unchanged sentence

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

March 31, 2025

June 30, 2025

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

34 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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

Churchill Downs Incorporated

2 unchanged sentences

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

Three Months Ended March 31,

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

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

17 unchanged sentences

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

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

Adjusted EBITDA includes the following adjustments:

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

Adjusted EBITDA excludes:

Adjusted EBITDA excludes, as applicable:

• Transaction expense, net which includes:

8 unchanged sentences

• Other charges, recoveries and expenses

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

Churchill Downs Incorporated

6 unchanged sentences

Net revenue by segment is comprised of the following:

Three Months Ended March 31,

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

(in millions) 2025 2024 2025 2024

4 unchanged sentences

Net Revenue $ 934.4 $ 890.7 $ 1,577.0 $ 1,481.6

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

Churchill Downs Incorporated

1 unchanged sentence

Adjusted EBITDA by segment is comprised of the following:

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

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

10 unchanged sentences

Other operating expense ( 34.1 ) ( 14.5 ) ( 15.7 )

( 16.9 ) ( 9.7 ) ( 16.8 )

Equity in income of unconsolidated affiliates — — 46.7

1 unchanged sentence

Adjusted EBITDA $ 296.5 $ 48.0 $ 127.3

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

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

10 unchanged sentences

Other operating expense ( 26.3 ) ( 14.2 ) ( 15.0 )

( 13.4 ) ( 10.0 ) ( 14.6 )

Equity in income of unconsolidated affiliates — — 48.2

1 unchanged sentence

Adjusted EBITDA $ 279.2 $ 46.2 $ 140.7

(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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

Three Months Ended March 31,

Six Months Ended June 30, 2025

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

Revenues $ 817.3 $ 284.2 $ 533.5

Pari-mutuel taxes and purses ( 187.7 ) ( 12.1 ) ( 22.1 )

Gaming taxes ( 2.9 ) ( 0.9 ) ( 152.4 )

Marketing and advertising ( 29.5 ) ( 6.6 ) ( 17.0 )

Salaries and benefits ( 69.7 ) ( 17.1 ) ( 87.0 )

Content expense ( 3.3 ) ( 120.6 ) ( 4.4 )

Selling, general and administrative expense ( 21.3 ) ( 9.9 ) ( 21.7 )

Maintenance, insurance and utilities ( 21.6 ) ( 2.0 ) ( 19.2 )

Gaming equipment rental and technology costs ( 24.4 ) ( 1.5 ) ( 8.6 )

Food and beverage costs ( 7.5 ) — ( 8.3 )

Other operating expense ( 51.0 ) ( 24.2 ) ( 32.5 )

Equity in income of unconsolidated affiliates — — 89.9

Other income 0.1 — 0.6

Adjusted EBITDA $ 398.5 $ 89.3 $ 250.8

Six Months Ended June 30, 2024

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

Revenues $ 739.1 $ 274.0 $ 517.6

Pari-mutuel taxes and purses ( 162.0 ) ( 10.9 ) ( 23.7 )

Gaming taxes ( 3.0 ) ( 1.3 ) ( 140.3 )

Marketing and advertising ( 21.8 ) ( 6.1 ) ( 17.0 )

Salaries and benefits ( 63.3 ) ( 15.9 ) ( 78.3 )

Content expense ( 3.4 ) ( 117.3 ) ( 4.4 )

Selling, general and administrative expense ( 17.3 ) ( 8.8 ) ( 22.0 )

Maintenance, insurance and utilities ( 21.8 ) ( 2.0 ) ( 20.7 )

Gaming equipment rental and technology costs ( 20.6 ) ( 1.7 ) ( 7.5 )

Food and beverage costs ( 6.4 ) — ( 8.1 )

Other operating expense ( 39.7 ) ( 24.2 ) ( 29.6 )

Equity in income of unconsolidated affiliates — — 95.7

Other income 0.2 — 1.8

Adjusted EBITDA $ 380.0 $ 85.8 $ 263.5

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

Adjusted EBITDA by segment is comprised of the following:

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

(in millions) 2025 2024 2025 2024

9 unchanged sentences

Other expenses, net 5.2 0.1 4.8 0.3

Asset impairments 2.4 — 2.4 —

Transaction expense, net 1.1 0.6 1.5 4.7

1 unchanged sentence

Interest, depreciation and amortization expense related to equity investments 9.6 10.5 19.5 20.8

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

Other charges and recoveries, net ( 1.0 ) ( 0.1 ) ( 1.0 ) ( 6.8 )

8 unchanged sentences

Total Adjusted EBITDA $ 450.9 $ 444.8 $ 696.0 $ 687.3

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

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

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

(in millions) June 30, 2025 December 31, 2024

Total assets:

5 unchanged sentences

Total assets $ 7,375.7 $ 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:

Three Months Ended March 31,

Six Months Ended June 30,

(in millions) 2025 2024

6 unchanged sentences

Total capital expenditures $ 164.8 $ 292.0

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

SUBSEQUENT EVENTS

On July 4, 2025, the United States enacted H.R.

1, a new federal tax and spending bill.

Many of the tax provisions included in the bill are retroactive and will have a significant favorable impact on the Company’s current year cash tax expense, primarily due to the permanent reinstatements of 100% bonus depreciation rules and a 30% of EBITDA-based interest expense deduction limitation.

As a result of this change, the Company will begin utilizing the $ 91.2 million deferred tax asset related to interest expense previously subject to limitation.

The expected reduction in cash paid taxes as a result of these new tax provisions will increase cash flow from operating activities.

On July 14, 2025, the Company announced that it had entered into definitive agreements to acquire 90 % of the outstanding equity interests of PPE Casino Resorts NH Holdings, LLC in Salem, New Hampshire ("Casino Salem"), for total consideration of $ 180.0 million in cash (the "Salem Transaction"), subject to certain working capital and other purchase price adjustments.

Casino Salem is located at The Mall at Rockingham Park, which is approximately 30 minutes from downtown Boston.

Pursuant to the Salem Transaction, the Company will assume responsibility for the development of a charitable gaming, entertainment and dining destination.

The Company will continue to operate Chasers Poker Room in Salem and is still evaluating the impact, if any, to the existing operations.

On July 22, 2025, the Board of Directors of the Company approved a common stock repurchase program of up to $ 500.0 million ("July 2025 Stock Repurchase Program").

The July 2025 Stock Repurchase Program includes and is not in addition to any repurchase authority remaining under the prior 2025 Stock Repurchase Program.

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