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Item 1. Financial Statements

2026-07-29 compared with 2026-04-22 · 219 added, 119 removed, 547 unchanged (38% 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) 2026 2025 2026 2025

10 unchanged sentences

Selling, general and administrative expense 61 61 120 116

Asset impairments, net — 2 — 2

Transaction expense, net 1 2 2 2

9 unchanged sentences

Net income 242 218 325 295

Net income attributable to noncontrolling interest — —

Net income and comprehensive income attributable to

Churchill Downs Incorporated $ 83 $ 77

Net income attributable to noncontrolling interests 1 1 1 1

Net income attributable to Churchill Downs Incorporated $ 241 $ 217 $ 324 $ 294

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

2 unchanged sentences

Weighted average shares outstanding:

Basic 70 72 70 73

Diluted 70 72 70 73

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

CHURCHILL DOWNS INCORPORATED

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions) March 31, 2026 December 31, 2025

(in millions) June 30, 2026 December 31, 2025

Current assets:

13 unchanged sentences

Accrued expenses and other current liabilities 370 400

Income taxes payable 38 —

Current deferred revenue

Current maturities of long-term debt

Current maturities of long-term debt and notes payable

Dividends payable

1 unchanged sentence

Long-term debt, net of current maturities and loan origination fees

Notes payable, net of debt issuance costs

Notes payable, net of current maturities and debt issuance costs

Non-current deferred revenue 12 15

12 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, 2026

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

CHURCHILL DOWNS INCORPORATED

8 unchanged sentences

Balance, March 31, 2026 70 3 1,094 ( 1 ) 1,096

Net income attributable to Churchill Downs Incorporated 241 241

Stock-based compensation 4 4

Balance, June 30, 2026 70 $ 7 $ 1,335 $ ( 1 ) $ 1,341

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

CHURCHILL DOWNS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

Common Stock Retained

7 unchanged sentences

Balance, March 31, 2025 73 — 1,073 ( 1 ) 1,072

Net income attributable to Churchill Downs Incorporated 217 217

Repurchase of common stock ( 3 ) ( 5 ) ( 245 ) ( 250 )

Stock-based compensation 5 5

Other ( 2 ) ( 2 )

Balance, June 30, 2025 70 $ — $ 1,043 $ ( 1 ) $ 1,042

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

CHURCHILL DOWNS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(in millions) 2026 2025

7 unchanged sentences

Deferred income taxes 42 4

Asset impairments — 2

Amortization of operating lease assets 3 3

16 unchanged sentences

Change in bank overdraft 8 ( 5 )

Other ( 1 ) ( 2 )

Net cash used in financing activities ( 387 ) ( 287 )

3 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, 2026

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

CHURCHILL DOWNS INCORPORATED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

Three Months Ended March 31,

Six Months Ended June 30,

(in millions) 2026 2025

8 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, 2026

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

Churchill Downs Incorporated

11 unchanged sentences

The Company has assumed responsibility for the development of a charitable gaming, entertainment and dining destination at this location.

The Company announced in January 2026 that Casino Salem will be redeveloped as Rockingham Grand Casino.

Refer to Note 3, Acquisitions, and Note 11, Redeemable Noncontrolling Interest, for further information on the transaction.

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Early adoption is permitted.

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

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

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses:

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The update permits entities to elect a practical expedient for estimating expected credit losses on current trade receivables and current contract assets by assuming that conditions existing at the balance sheet date will remain unchanged over the life of those assets.

The updated standard is effective for fiscal years beginning after December 15, 2025, and interim periods beginning after December 15, 2026, with early adoption permitted.

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

The updated standard is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted.

The adoption of this standard did not have a material impact on our consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the accounting for internal-use software.

The update removes all references to software development stages and requires capitalization of software costs when management has committed to the software project and it is probable the software will be completed and perform its intended use.

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

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026

The update removes all references to software development stages and requires capitalization of software costs

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

periods within those annual reporting periods.

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

when management has committed to the software project and it is probable the software will be completed and perform its intended use.

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

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

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

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GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill was $ 900 million as of March 31, 2026 and December 31, 2025.

Goodwill was $ 900 million as of June 30, 2026 and December 31, 2025.

We performed our annual goodwill impairment analysis as of April 1, 2026, 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, 2026 December 31, 2025

June 30, 2026 December 31, 2025

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

2 unchanged sentences

Total $ 2,513 $ 2,515

The Company is continuing to monitor the current economic conditions and the impacts on the results of operations of Presque Isle Downs and Casino ("Presque Isle") 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.

The Company continues to monitor the regulatory and competitive environment and the impact on the results of operations of Presque Isle Downs and Casino ("Presque Isle").

Future regulatory changes and increased competition 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.

The Company’s effective income tax rate of 26.7 % for the three months ended March 31, 2026 was higher than the U.S.

federal statutory rate of 21.0 % primarily resulting from the impact of state income taxes and non-deductible expenses.

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 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 that decreased income attributable to states with higher tax rates compared to prior year, partially offset by the impact of state income taxes and non-deductible expenses.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026

We performed our annual indefinite-lived intangible assets impairment analysis as of April 1, 2026.

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 JUNE 30, 2026

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

The Company’s effective income tax rates of 26.2 % for the three months and 26.3 % for the six months ended June 30, 2026 were higher than the U.S.

federal statutory rate of 21.0 % primarily resulting from state income taxes and non-deductible expenses.

The Company’s effective income tax rate of 25.5 % for the three months ended June 30, 2025 was higher than the U.S.

federal statutory rate of 21.0 % primarily resulting from state income taxes and nondeductible officers’ compensation.

The Company’s effective income tax rate of 24.0 % for the six months ended June 30, 2025 was higher than the U.S.

federal statutory rate of 21.0 % primarily resulting from state income taxes and non-deductible officers’ 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 quarter of 2025, which decreased income attributable to states with higher tax rates compared to prior year.

SHAREHOLDERS' EQUITY

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The repurchase program has no time limit and may be suspended or discontinued at any time.

We had approximately $ 430 million of repurchase authority remaining under the July 2025 Stock Repurchase Program at March 31, 2026, based on trade date.

We had approximately $ 430 million of repurchase authority remaining under the July 2025 Stock Repurchase Program at June 30, 2026, based on trade date.

On March 12, 2025, the Board of Directors of the Company approved a new common stock repurchase program of up to $ 500 million (the "March 2025 Stock Repurchase Program").

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As described above, the March 2025 Stock Repurchase Program has since been replaced by the July 2025 Stock Repurchase Program.

During the three months ended March 31, 2026 and 2025, we repurchased the following shares under our stock repurchase programs:

Three Months Ended March 31,

During the three and six months ended June 30, 2026 and 2025, 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) 2026 2025 2026 2025

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

July 2025 Stock Repurchase Program — $ — — $ — — $ — — $ —

4 unchanged sentences

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.

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, the 2025 Plan, and the Executive Long-Term Incentive Compensation Plan, which was adopted pursuant to the 2016 Plan.

No further awards will be granted under 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 $ 5 million for the three months ended March 31, 2026 and $ 4 million for the three months ended March 31, 2025.

At March 31, 2026 and December 31, 2025, the Company had $ 11 million and $ 21 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, 2026, the Company awarded RSUs to employees, as well as RSUs and PSUs to certain named executive officers ("NEOs").

Our total stock-based compensation expense, which includes expenses related to restricted stock awards ("RSAs"), restricted stock unit awards ("RSUs"), performance share unit awards

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

("PSUs"), and stock options associated with our employee stock purchase plan was $ 8 million and $ 13 million fo r the three months and six months ended June 30, 2026 and $ 7 million and $ 11 million for the three months and six months ended June 30, 2025, respectively.

At June 30, 2026 and December 31, 2025, the Com pany had $ 14 million and $ 21 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, 2026, 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 2026 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.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

A summary of the RSUs and PSUs granted during 2026 is presented below (units in thousands):

A summary of the RSAs, RSUs and PSUs granted during 2026 is presented below (units in thousands):

Grant Year Award Type Number of Units Awarded (1)

2 unchanged sentences

2026 PSU 122 Three -year performance and service period ending in 2028

2026 RSU 9 One -year service period ending in 2027

2026 RSA 5 One -year service period ending in 2027

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

The following table presents our total debt outstanding:

(in millions) March 31, 2026 December 31, 2025

(in millions) June 30, 2026 December 31, 2025

Term Loan B-1 due 2028 $ 284 $ 286

6 unchanged sentences

Total debt 4,795 5,155

Current maturities of long-term debt ( 63 ) ( 63 )

Current maturities of long-term debt and notes payable

( 663 ) ( 63 )

Unamortized premium and deferred finance charges ( 22 ) ( 25 )

1 unchanged sentence

Credit Agreement

At March 31, 2026, 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"), $ 285 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 million swing line commitment.

At June 30, 2026, 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"), $ 284 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 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.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

On February 14, 2025, the Company announced that it closed the seventh amendment 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, 2026, that applicable margin was 150 basis points, which was based on the pricing grid in the Credit Agreement.

The Company had $ 722 million available borrowing capacity under the Revolver, after consideration of $ 8 million in outstanding letters of credit, as of March 31, 2026.

As of June 30, 2026, that applicable margin was 150 basis points which was based on the pricing grid in the Credit Agreement.

The Company had $ 861 million available borrowing capacity, after consideration of $ 10 million in outstanding letters of credit, under the Revolver as of June 30, 2026.

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, 2026, the Company's commitment fee rate was 0.25 %.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

For the period ended June 30, 2026, the Company's commitment fee rate was 0.25 %.

2027 Senior Notes

As of March 31, 2026, we had $ 600 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, 2026, we had $ 600 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.

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2028 Senior Notes

As of March 31, 2026, we had a total of $ 700 million in aggregate principal amount of 4.750 % senior unsecured notes (the "2028 Senior Notes") maturing on January 15, 2028.

As of June 30, 2026, we had a total of $ 700 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 million notes issued at par and $ 200 million notes issued at 103.25 %.

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

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

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

2030 Senior Notes

As of March 31, 2026, we had $ 1.2 billion in aggregate principal amount of 5.750 % senior unsecured notes that mature on April 1, 2030 (the "2030 Senior Notes").

As of June 30, 2026, we had $ 1.2 billion in aggregate principal amount of 5.750 % senior unsecured notes that mature on April 1, 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.

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

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

2031 Senior Notes

As of March 31, 2026, we had $ 600 million in aggregate principal amount of 6.750 % senior unsecured notes that mature on May 1, 2031 (the "2031 Senior Notes").

As of June 30, 2026, we had $ 600 million in aggregate principal amount of 6.750 % senior unsecured notes that mature on May 1, 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 March 31, 2026, 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 $ 270 million.

As of June 30, 2026, 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 $ 197 million.

The revenue we expect to recognize on these remaining performance obligations is $ 2 million for the remainder of 2026, $ 64 million in 2027, $ 39 million in 2028, and the remainder thereafter.

As of March 31, 2026, 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, 2026 and December 31, 2025, contract assets were not material.

As of March 31, 2026 and December 31, 2025, contract liabilities were $ 185 million and $ 80 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 152nd Kentucky Derby.

We recognized $ 6 million of revenue during the three months ended March 31, 2026, which was included in the contract liabilities balance at December 31, 2025.

We recognized $ 6 million of revenue during the three months ended March 31, 2025, which was included in the contract liabilities balance at December 31, 2024.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

As of June 30, 2026, our remaining performance obligations on contracts with a duration greater than one year in segments other than Live and Historical Racing were not material.

Contract Assets and Contract Liabilities

As of June 30, 2026 and December 31, 2025, contract assets were not material.

As of June 30, 2026 and December 31, 2025, contract liabilities were $ 51 million and $ 80 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 152nd Kentucky Derby.

We recognized $ 49 million and $ 55 million of revenue during the three months and six months ended June 30, 2026, respectively, which was included in the contract liabilities balance at December 31, 2025.

We recognized $ 48 million and $ 54 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.

Disaggregation of Revenue

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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 MARCH 31, 2026

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

Churchill Downs Incorporated

2 unchanged sentences

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) 2026 2025 2026 2025

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Wagering Services and Solutions:

$ 167 $ 158 $ 276 $ 265

Florida $ 24 $ 26 $ 48 $ 51

Iowa 24 23 48 47

Indiana 35 32 68 64

Louisiana 29 32 65 77

Maine 26 28 51 52

Maryland 28 25 49 46

8 unchanged sentences

Wagering Services and Solutions 11 10 20 19

Gaming — — 5 4

All Other 2 2 4 4

1 unchanged sentence

Intercompany net revenue $ — $ — $ — $ —

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

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

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Total $ 543 $ 167 $ 270 $ 980 $ — $ 980

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

8 unchanged sentences

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

These amounts were $ 16 million for the three months ended March 31, 2026 and $ 14 million for the three months ended March 31, 2025.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026

These amounts were $ 16 million in each of the three-month period ended June 30, 2026 and 2025.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

Six Months Ended June 30, 2026

(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 $ 214 $ 14 $ 292 $ — $ 292

Historical racing (a)

522 — — 522 — 522

Racing event-related services 193 — 1 194 — 194

7 10 450 467 — 467

54 52 62 168 — 168

Total $ 840 $ 276 $ 527 $ 1,643 $ — $ 1,643

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 $ 65 $ 205 $ 15 $ 285 $ — $ 285

Historical racing (a)

489 — 14 503 — 503

Racing event-related services 174 — 1 175 — 175

6 8 439 453 — 453

49 52 60 161 — 161

Total $ 783 $ 265 $ 529 $ 1,577 $ — $ 1,577

These amounts were $ 32 million for the six months ended June 30, 2026 and $ 30 million for the six months ended June 30, 2025.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

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, 2026 December 31, 2025

(in millions) June 30, 2026 December 31, 2025

Trade receivables $ 58 $ 34

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Other current assets

(in millions) March 31, 2026 December 31, 2025

Other current assets is comprised of the following:

(in millions) June 30, 2026 December 31, 2025

Inventory $ 11 $ 12

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Accrued expenses and other current liabilities consisted of the following:

(in millions) March 31, 2026 December 31, 2025

(in millions) June 30, 2026 December 31, 2025

Account wagering deposits liability $ 73 $ 68

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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 JUNE 30, 2026

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

In August 2025, the Company closed on the purchase of 90.0 % of Casino Salem, a joint venture with SL Salem, LLC and JPF Casino Enterprises, LLC (collectively, the "Casino Salem Minority Interest Holders").

1 unchanged sentence

The Casino Salem Minority Interest Holders' interests are treated as redeemable noncontrolling interest and are not included in the permanent equity on the Company’s Condensed Consolidated Balance Sheets.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026

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.

5 unchanged sentences

Balance, March 31, 2026 48

Net income attributable to redeemable noncontrolling interests 1

Redemption value adjustment 1

Balance, June 30, 2026 $ 50

INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED AFFILIATES

Investments in and advances to unconsolidated affiliates as of March 31, 2026 and December 31, 2025 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, 2026 and December 31, 2025, 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, 2026 , 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 million.

Our investment in Rivers Des Plaines was $ 573 million as of March 31, 2026 and December 31, 2025.

The Company received distributions from Rivers Des Plaines of $ 25 million and $ 21 million for the three months ended March 31, 2026 and 2025, respectively.

As of June 30, 2026 , 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 million.

Our investment in Rivers Des Plaines was $ 578 million and $ 573 million as of June 30, 2026 and December 31, 2025, respectively.

The Company received distributions from Rivers Des Plaines of $ 47 million and $ 40 million for the six months ended June 30, 2026 and 2025, respectively.

Miami Valley Gaming and Racing

2 unchanged sentences

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

Our investment in MVG was $ 112 million as of March 31, 2026 and December 31, 2025.

The Company received distributions from MVG of $ 11 million and $ 10 million for the three months ended March 31, 2026 and 2025, respectively.

Our investment in MVG was $ 112 million as of June 30, 2026 and December 31, 2025, respectively.

The Company received distributions from MVG of $ 25 million and $ 23 million for the six months ended June 30, 2026 and 2025, respectively.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

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) 2026 2025 2026 2025

3 unchanged sentences

Operating income 80 75 153 144

Interest and other, net ( 10 ) ( 11 )

Interest and other expense, net ( 9 ) ( 10 ) ( 19 ) ( 21 )

Net income $ 71 $ 65 $ 134 $ 123

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

(in millions) March 31, 2026 December 31, 2025

(in millions) June 30, 2026 December 31, 2025

Current assets $ 97 $ 109

5 unchanged sentences

Long-term debt 765 803

Other liabilities 1 —

Members' deficit ( 196 ) ( 203 )

8 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, 2026

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

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, 2026

June 30, 2026

(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, 2026

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

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) 2026 2025 2026 2025

1 unchanged sentence

Net income attributable to Churchill Downs Incorporated $ 241 $ 217 $ 324 $ 294

Adjustments related to redeemable noncontrolling interest 2 1

Adjustments related to redeemable noncontrolling interests ( 1 ) — ( 3 ) ( 2 )

Net income attributable to common shareholders $ 240 $ 217 $ 321 $ 292

Denominator for net income per common share:

Basic 70 72 70 73

Plus dilutive effect of stock awards — — — —

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

Adjusted EBITDA includes the following adjustments:

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

Adjusted EBITDA excludes:

9 unchanged sentences

• Other charges, recoveries and expenses

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

Churchill Downs Incorporated

4 unchanged sentences

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

The tables below present net revenue from external customers, Adjusted EBITDA by segment and reconciles comprehensive income to Adjusted EBITDA:

The tables below present net revenue from external customers, Adjusted EBITDA by segment and reconcile net income to Adjusted EBITDA:

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) 2026 2025 2026 2025

4 unchanged sentences

Net Revenue $ 980 $ 934 $ 1,643 $ 1,577

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

Churchill Downs Incorporated

1 unchanged sentence

Adjusted EBITDA by segment is comprised of the following:

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

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

14 unchanged sentences

Adjusted EBITDA $ 318 $ 52 $ 133

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

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

15 unchanged sentences

(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, 2026

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

Three Months Ended March 31,

Six Months Ended June 30, 2026

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

Revenues $ 876 $ 296 $ 532

Pari-mutuel taxes and purses ( 195 ) ( 12 ) ( 18 )

Gaming taxes ( 4 ) ( 1 ) ( 156 )

Marketing and advertising ( 28 ) ( 8 ) ( 16 )

Salaries and benefits ( 74 ) ( 17 ) ( 84 )

Content expense ( 2 ) ( 121 ) ( 3 )

Selling, general and administrative expense ( 25 ) ( 8 ) ( 24 )

Maintenance, insurance and utilities ( 25 ) ( 5 ) ( 19 )

Gaming equipment rental and technology costs ( 27 ) ( 3 ) ( 9 )

Food and beverage costs ( 8 ) — ( 9 )

Other operating expense (1)

( 57 ) ( 24 ) ( 35 )

Equity in income of unconsolidated affiliates — — 96

Other income — — 1

Adjusted EBITDA $ 431 $ 97 $ 256

Six Months Ended June 30, 2025

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

Revenues $ 818 $ 284 $ 533

Pari-mutuel taxes and purses ( 188 ) ( 12 ) ( 22 )

Gaming taxes ( 3 ) ( 1 ) ( 152 )

Marketing and advertising ( 30 ) ( 7 ) ( 17 )

Salaries and benefits ( 70 ) ( 17 ) ( 87 )

Content expense ( 3 ) ( 120 ) ( 4 )

Selling, general and administrative expense ( 21 ) ( 10 ) ( 22 )

Maintenance, insurance and utilities ( 22 ) ( 2 ) ( 19 )

Gaming equipment rental and technology costs ( 24 ) ( 2 ) ( 9 )

Food and beverage costs ( 8 ) — ( 8 )

Other operating expense (1)

( 50 ) ( 24 ) ( 33 )

Equity in income of unconsolidated affiliates — — 90

Other income — — 1

Adjusted EBITDA $ 399 $ 89 $ 251

(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 JUNE 30, 2026

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) 2026 2025 2026 2025

Reconciliation of Comprehensive Income to Adjusted EBITDA:

Net income and comprehensive income attributable to Churchill Downs Incorporated $ 83 $ 77

Net income attributable to noncontrolling interest — —

Reconciliation of Net Income to Adjusted EBITDA:

Net income attributable to Churchill Downs Incorporated $ 241 $ 217 $ 324 $ 294

Net income attributable to noncontrolling interests 1 1 1 1

Net income 242 218 325 295

5 unchanged sentences

Other expenses, net — 4 2 4

Asset impairments, net — 2 — 2

Transaction expense, net 1 2 2 2

12 unchanged sentences

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

Three Months Ended March 31,

Six Months Ended June 30,

(in millions) 2026 2025

5 unchanged sentences

Total capital expenditures $ 117 $ 165

Our chief operating decision maker does not review disaggregated assets by segment.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

Churchill Downs Incorporated

Notes to Condensed Consolidated Financial Statements

SUBSEQUENT EVENTS

On April 21, 2026 the Company announced that it entered into a definitive agreement to acquire the intellectual property, including all trademarks and associated rights, of the Preakness Stakes and Black-Eyed Susan Stakes (the “Preakness IP Rights”) from 1/ST Maryland LLC, an affiliate of 1/ST Racing, for a purchase price of $ 85 million, subject to customary closing conditions.

The Preakness IP Rights are subject to an Exclusive License Agreement pursuant to which the Company will license to the State of Maryland the intellectual property rights necessary to conduct the running of the Preakness Stakes and Black-Eyed Susan Stakes in exchange for an annual fee.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026

Our chief operating decision maker does not review disaggregated assets by segment.

The measure of segment assets is reported on the balance sheet as total consolidated assets.

FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026

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