What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-29 compared with 2026-04-22 · 118 added, 75 removed, 210 unchanged (48% of the section changed)

10 unchanged sentences

• the effect of economic conditions on our consumers' confidence and discretionary spending or our access to credit, including the impact of inflation;

• changes in, or new interpretations of, applicable tax laws or rulings that could result in additional tax liabilities;

• changes in, or new interpretations of, applicable tax law or rulings that could result in additional tax liabilities;

• the impact of any pandemics, epidemics, or outbreaks of infectious diseases, and related economic matters on our results of operations, financial conditions, and prospects;

8 unchanged sentences

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

• cybersecurity risk, including cyber-security breaches, or loss or misuse of our confidential information as a result of a breach including customers’ personal information, or IT system operational disruptions, could lead to government enforcement actions or other litigation;

• cybersecurity risk, including cybersecurity breaches, or loss or misuse of our confidential information as a result of a breach including customers’ personal information, or IT system operational disruptions, could lead to government enforcement actions or other litigation;

• costs of compliance with increasingly complex laws and regulations regarding data privacy and protection of personal information;

3 unchanged sentences

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

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

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

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

9 unchanged sentences

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

• whether the objective of a strategic alternative review process will be achieved;

the terms, structure, benefits and costs of any strategic transaction;

the timing of any strategic transaction and whether any strategic transaction will be consummated on the terms proposed or at all;

the risk that the announcement or exploration of strategic alternatives could have an adverse effect on our ability to retain key personnel and maintain relationships with partners, suppliers, employees, shareholders and other business relationships;

the risk of any unexpected costs or expenses resulting from the exploration of strategic alternatives;

the risk of any litigation relating to the exploration of strategic alternatives or any strategic transaction;

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

4 unchanged sentences

This report should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025, including Part I - Item 1A, "Risk Factors" of our Form 10-K for a discussion regarding some of the reasons that actual results may be materially different from those we anticipate.

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

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

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

27 unchanged sentences

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

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

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

Governmental Regulations and Legislative Changes

3 unchanged sentences

The following update on our regulatory and legislative actions should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025, including Part I - Item 1, "Business" for a discussion of regulatory and legislative changes.

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

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

Specific State Gaming Regulations

12 unchanged sentences

The following table reflects our net revenue, operating income, net income attributable to Churchill Downs Incorporated, Adjusted EBITDA, and certain other financial information:

Three Months Ended March 31,

(in millions) 2026 2025 Change

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

(in millions) 2026 2025 Change 2026 2025 Change

Net revenue $ 980 $ 934 $ 46 $ 1,643 $ 1,577 $ 66

3 unchanged sentences

Adjusted EBITDA 477 451 26 734 696 38

Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025

• Net revenue increased $20 million driven by a $24 million increase from the Live and Historical Racing segment primarily due to continued growth at our HRM venues and a $2 million increase from Wagering Services and Solutions, partially offset by a $6 million decrease from the Gaming segment primarily driven by the cessation of HRM operations in Louisiana in May 2025.

• Operating income increased $8 million driven by a $15 million increase from the Live and Historical Racing segment and a $1 million increase in the Wagering Services and Solutions segment.

These increases were partially offset by a $2 million decrease in the Gaming segment operating income, a $1 million increase in All Other operating expenses, a $4 million increase in selling, general and administrative expenses, and a $1 million increase in transaction expenses.

Three Months Ended June 30, 2026, Compared to Three Months Ended June 30, 2025

• Net revenue increased $46 million driven by a $33 million increase from the Live and Historical Racing segment primarily due to a record-breaking Derby Week at Churchill Downs Racetrack, a $9 million increase from the Wagering Services and Solutions segment, and a $4 million increase from the Gaming segment.

• Operating income increased $30 million driven by a $21 million increase from the Live and Historical Racing segment primarily due to a record-breaking Derby Week at Churchill Downs Racetrack, a $4 million increase from the Wagering Services and Solutions segment, a $3 million increase from the Gaming segment, a $2 million increase attributable to the non-cash impairment charge of Virginia HRMs that did not recur in the current period, and $1 million decrease in transaction costs.

These increases were offset by a $1 million decrease from All Other.

• Net income attributable to Churchill Downs Incorporated increased $24 million.

The following impacted the comparability of the Company's net income for the three months ended March 31, 2026 compared to the three months ended March 31, 2025:

a $3 million after-tax decrease in other recoveries, partially offset by a $2 million after-tax increase in transaction, pre-opening, and other expenses.

Excluding these items, net income increased $5 million primarily due to a $3 million after-tax increase from the results of our operations, and a $2 million after-tax increase in equity income from our unconsolidated affiliates.

• Adjusted EBITDA increased $12 million driven by a $11 million increase from the Live and Historical Racing segment and a $4 million increase from the Wagering Services and Solutions segment.

These increases were partially offset by a $1 million decrease from the Gaming segment and a $2 million decrease in All Other.

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

The following impacted the comparability of the Company's net income for the three months ended June 30, 2026 compared to the three months ended June 30, 2025:

a $4 million after-tax decrease in transaction, pre-opening, and other expenses and a $2 million after-tax decrease related to an impairment charge in the prior year quarter related to a write-off of obsolete HRMs in Virginia.

Excluding these items, net income increased $18 million due to a $10 million after-tax increase primarily driven by the results of our operations, a $4 million after-tax increase in equity income from our unconsolidated affiliates, and a $4 million after-tax decrease in interest expense.

• Adjusted EBITDA increased $26 million driven by a $21 million increase from the Live and Historical Racing segment primarily due to a record-breaking Derby Week at Churchill Downs Racetrack, a $4 million increase from the Wagering Services and Solutions segment, and a $6 million increase from the Gaming segment.

These increases were partially offset by $5 million decrease from All Other.

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

Six Months Ended June 30, 2026, Compared to Six Months Ended June 30, 2025

• Net revenue increased $66 million driven by a $57 million increase from the Live and Historical Racing segment primarily due to a record-breaking Derby Week at Churchill Downs Racetrack, and an $11 million increase from the Wagering Services and Solutions segment.

These increases were partially offset by a $2 million decrease from the Gaming segment.

• Operating income increased $38 million driven by an $36 million increase from the Live and Historical Racing segment primarily due to a record-breaking Derby Week at Churchill Downs Racetrack, a $5 million increase from the Wagering Services and Solutions segment, a $1 million increase from the Gaming segment, and a $2 million increase attributable to the non-cash impairment charge of Virginia HRMs that did not recur in the current period.

These increases were offset by a $4 million increase in selling, general and administrative expenses and a $2 million decrease from All Other.

• Net income attributable to Churchill Downs Incorporated increased $30 million.

The following impacted the comparability of the Company's net income for the six months ended June 30, 2026 compared to the six months ended June 30, 2025:

a $3 million after-tax decrease in other charges and recoveries, a $2 million after-tax decrease in transaction, pre-opening, and other expenses, and a $2 million after-tax decrease related to an impairment charge in the prior year quarter related to a write-off of obsolete HRMs in Virginia.

Excluding these items, net income increased $23 million due to a $13 million after-tax increase primarily driven by the results of our operations, a $6 million after-tax increase in equity income from our unconsolidated affiliates, and a $4 million after-tax decrease in interest expense.

• Adjusted EBITDA increased $38 million driven by a $32 million increase from the Live and Historical Racing segment primarily due to a record-breaking Derby Week at Churchill Downs Racetrack, an $8 million increase from the Wagering Services and Solutions segment, and a $5 million increase from the Gaming segment.

These increases were partially offset by a $7 million decrease from All Other.

Revenue by Segment

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

Three Months Ended March 31, Change

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

(in millions) 2026 2025 2026 2025

5 unchanged sentences

Net Revenue $ 980 $ 934 $ 46 $ 1,643 $ 1,577 $ 66

Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025

• Live and Historical Racing revenue increased $24 million due to a $17 million increase from our Kentucky HRM venues, a $5 million increase from our Virginia HRM venues, and a $3 million increase from our New Hampshire venues, partially offset by a $1 million decrease from Churchill Downs Racetrack.

The Kentucky HRM increase was due to a $6 million increase from our Western Kentucky venues, a $4 million increase from our Northern Kentucky venues, a $4 million increase from our Southwestern Kentucky venues, and a $3 million increase from our Louisville venues.

The Virginia HRM increase was primarily due to a $5 million net increase from our Northern Virginia venues and a $1 million increase from our Western Virginia venue, partially offset by a $1 million net decrease from our Central Virginia venues primarily from increased competition and unfavorable weather.

• Wagering Services and Solutions revenue increased $2 million primarily from our retail sports betting business.

• Gaming revenue decreased $5 million due to a $9 million decrease primarily from the cessation of HRM operations in Louisiana in May 2025 and a $2 million decrease primarily from our Florida and Mississippi properties.

These decreases were partially offset by a $6 million increase primarily from our New York, Indiana, and Maryland properties.

Three Months Ended June 30, 2026, Compared to Three Months Ended June 30, 2025

• Live and Historical Racing revenue increased $34 million due to a $21 million increase from Churchill Downs Racetrack, a $12 million increase from our Kentucky HRM venues, and a $1 million increase from our Virginia HRM venues.

The Churchill Downs Racetrack increase was primarily due to a record-breaking Derby Week, including increased NBC broadcast revenue, increased ticketing revenue, increased sponsorship and licensing revenue, and increased wagering revenue.

The Kentucky HRM increase was due to a $5 million increase from our Southwestern Kentucky venues, a $3 million increase from our Northern Kentucky venues, a $3 million increase from our Western Kentucky venues, and a $1 million increase from our Louisville venues.

The Virginia HRM increase was due to a $5 million net increase primarily from our Northern Virginia venues, partially offset by a $4 million net decrease from our Central Virginia venues primarily from increased competition.

• Wagering Services and Solutions revenue increased $10 million due to $9 million growth in our Horse Racing business from record-breaking Derby Week wagering and a $1 million increase from our Exacta business.

• Gaming revenue increased $4 million primarily due to an $8 million increase primarily from our New York, Indiana, and Maryland properties, partially offset by a $4 million decrease primarily from the cessation of HRM operations in Louisiana in May 2025.

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

• All Other revenue is consistent with the prior year.

All intercompany captive revenue is eliminated in consolidation.

Six Months Ended June 30, 2026, Compared to Six Months Ended June 30, 2025

• Live and Historical Racing revenue increased $58 million due to a $20 million increase from Churchill Downs Racetrack, a $29 million increase from our Kentucky HRM venues, a $6 million increase from our Virginia HRM venues, and a $3 million increase primarily from New Hampshire venues.

The Kentucky HRM increase was primarily due to a $9 million increase from our Western Kentucky venues, an $8 million increase from our Southwestern Kentucky venues, an $8 million increase from our Northern Kentucky venues, and a $4 million increase from our Louisville venues.

The Virginia HRM increase was primarily due to a $10 million net increase from our Northern Virginia venues and a $1 million increase from our Western Virginia venue, partially offset by a net $5 million decrease from Central Virginia venues primarily from increased competition.

• Wagering Services and Solutions revenue increased $12 million due to $9 million growth in our Horse Racing business from record-breaking Derby Week wagering, a $2 million net increase in our retail and online sportsbooks, and a $1 million increase from our Exacta business.

• Gaming revenue decreased $1 million primarily due to a $14 million net decrease from our Louisiana, Florida, and Mississippi properties primarily from the cessation of HRM operations in Louisiana in May 2025, partially offset by a $13 million increase in our New York, Indiana, Maryland, and Iowa properties.

• All Other revenue is consistent with the prior year.

All intercompany captive revenue is eliminated in consolidation.

Consolidated Operating Expense

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

Three Months Ended March 31, Change

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

(in millions) 2026 2025 2026 2025

8 unchanged sentences

Transaction expense, net 1 2 (1) 2 2 —

Asset impairments, net — 2 (2) — 2 (2)

Other operating expense 82 76 6 134 129 5

Total expense $ 623 $ 607 $ 16 $ 1,143 $ 1,115 $ 28

Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025

Operating expenses increased $12 million for the three months ended March 31, 2026 compared to March 31, 2025 primarily due to the opening of Marshall Yards in Kentucky in February 2026.

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

Three and Six Months Ended June 30, 2026, Compared to Three and Six Months Ended June 30, 2025

Operating expenses increased $16 million and $28 million for the three and six months ended June 30, 2026 compared to June 30, 2025 primarily due to higher gaming taxes as a result of increased revenues.

The remaining increase is primarily driven by normal inflationary activity resulting in increased operational costs.

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

Adjusted EBITDA

2 unchanged sentences

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

Three Months Ended March 31, Change

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

(in millions) 2026 2025 2026 2025

5 unchanged sentences

Total Adjusted EBITDA $ 477 $ 451 $ 26 $ 734 $ 696 $ 38

Three Months Ended March 31, 2026, Compared to Three Months Ended March 31, 2025

• Live and Historical Racing Adjusted EBITDA increased $11 million due to a $9 million increase from our Kentucky HRM venues, a $3 million net increase from our Virginia HRM venues, and a $1 million net increase from our New Hampshire venues, partially offset by $2 million decrease at Churchill Downs Racetrack.

The Kentucky HRM increase was due to a $3 million increase from our Western Kentucky venues, a $3 million increase from our Northern Kentucky venues, and a $3 million increase from our Louisville venues.

The Virginia HRM increase was primarily due to a $7 million net increase from our Northern Virginia venues, partially offset by a $4 million net decrease from our Central Virginia venues primarily from increased competition and unfavorable weather.

• Wagering Services and Solutions Adjusted EBITDA increased $4 million primarily from lower legal expenses in our Horse Racing business and growth in our retail sports betting business.

• Gaming Adjusted EBITDA decreased $1 million.

Our wholly-owned gaming properties decreased $3 million primarily from the cessation of HRMs in Louisiana in May 2025 that was partially offset by an increase from our New York property.

Three Months Ended June 30, 2026, Compared to Three Months Ended June 30, 2025

• Live and Historical Racing Adjusted EBITDA increased $21 million due to a $16 million increase from Churchill Downs Racetrack, a $6 million increase from our Kentucky HRM venues, and a $1 million increase from our Virginia HRM venues, partially offset by a $2 million decrease at our New Hampshire venues primarily due to the planned closure of our temporary Casino Salem venue during the construction of the Rockingham Grand Casino venue.

The Kentucky HRM increase was due to a $2 million increase from our Northern Kentucky venues, a $2 million increase from our Southwestern Kentucky venues, and a $2 million increase from our Western Kentucky venues.

The Virginia HRM increase was primarily due to a $4 million net increase from our Northern Virginia venues, a $1 million increase from our Western Virginia venue, and a $1 million increase from our Southern Virginia venues, partially offset by a $5 million net decrease from our Central Virginia venues primarily from increased competition.

• Wagering Services and Solutions Adjusted EBITDA increased $4 million due to a $3 million increase from our Horse Racing business and a $1 million increase from our Exacta business.

• Gaming Adjusted EBITDA increased $6 million.

Our equity investments increased $4 million from strong performance at Rivers Des Plaines in Illinois and Miami Valley Gaming in Ohio.

• All Other Adjusted EBITDA decreased $2 million primarily due to claim development within our captive insurance company.

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

Reconciliation of Comprehensive Income to Adjusted EBITDA

Three Months Ended March 31, Change

Our wholly-owned gaming properties increased $4 million from strong performance at our New York venue, partially offset by a $2 million decrease primarily from the cessation of HRM operations in Louisiana in May 2025.

• All Other Adjusted EBITDA decreased $5 million primarily due to a reduction of corporate legal-related fees in the prior year quarter and claim development within our captive insurance company.

Six Months Ended June 30, 2026, Compared to Six Months Ended June 30, 2025

• Live and Historical Racing Adjusted EBITDA increased $32 million due to a $14 million increase from Churchill Downs Racetrack, a $15 million increase from our Kentucky HRM venues, and a $4 million increase from our Virginia HRM venues, partially offset by a $1 million decrease at our New Hampshire venues primarily due to the planned closure of our temporary Casino Salem venue during the construction of the Rockingham Grand Casino venue.

The Kentucky HRM increase was due to a $6 million increase from our Northern Kentucky venues, a $5 million increase from our Western Kentucky venues, a $2 million increase from our Southwestern Kentucky venues, and a $3 million increase from our Louisville venues.

The Virginia HRM increase was primarily due to an $11 million net increase from our Northern Virginia venues, and a $2 million net increase from our Western Virginia and Southern Virginia venues, partially offset by a $9 million net decrease from our Central Virginia venues primarily from increased competition.

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

• Wagering Services and Solutions Adjusted EBITDA increased $8 million due to a $5 million increase from our Horse Racing business, a $2 million increase in online and retail sports betting, and a $1 million increase from our Exacta business.

• Gaming Adjusted EBITDA increased $5 million due to a $6 million increase from strong performance at Rivers Des Plaines in Illinois and Miami Valley Gaming in Ohio.

Our wholly-owned gaming properties increased $7 million from our New York and Maryland venues, offset by a $8 million decrease from our other eight wholly-owned gaming venues.

• All Other Adjusted EBITDA decreased $7 million primarily due to a reduction of corporate legal-related fees in the prior year and claim development within our captive insurance company.

Reconciliation of Net Income to Adjusted EBITDA

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

(in millions) 2026 2025 2026 2025

Net income and comprehensive income attributable to Churchill Downs Incorporated $ 83 $ 77 $ 6

Net income attributable to noncontrolling interest — — —

Net income attributable to Churchill Downs Incorporated $ 241 $ 217 $ 24 $ 324 $ 294 $ 30

Net income attributable to noncontrolling interests 1 1 — 1 1 —

Net income 242 218 24 325 295 30

5 unchanged sentences

Other expense, net — 4 (4) 2 4 (2)

Asset impairments, net — 2 (2) — 2 (2)

Transaction expense, net 1 2 (1) 2 2 —

6 unchanged sentences

The following is a summary of our overall financial position:

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

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

Total assets $ 7,521 $ 7,485 $ 36

2 unchanged sentences

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

• Total assets remained consistent for the comparable periods.

• Total liabilities decreased $88 million driven primarily by paydowns of the Revolver and payment of the annual dividend, partially offset by an increase in deferred revenue related to advance ticket sales and sponsorships for the Kentucky Oaks and Derby.

• Total assets increased $36 million driven by an increase in restricted cash, accounts receivable, and other current assets, including prepaid insurance and information technology related items.

These increases were partially offset by a decrease in income taxes receivable.

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

• Total liabilities decreased $299 million driven primarily by a decrease in the outstanding balance on the Revolver, which is included in long-term debt, and decreases in current deferred revenue due to the recognition of revenue related to the 152nd Kentucky Derby, and a decrease in dividends payable due to the payment of the annual dividend.

These decreases were partially offset by an increase in accounts payable, income taxes payable and deferred income taxes.

• Total equity increased $331 million driven by net income.

1 unchanged sentence

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

(in millions) Three Months Ended March 31, Change

(in millions) Six Months Ended June 30, Change

Cash flows from:

2 unchanged sentences

Financing activities (387) (287) (100)

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

Three Months Ended March 31, 2026, Compared to the Three Months Ended March 31, 2025

• Cash flows provided by operating activities increased $48 million driven primarily by a decrease in cash used for working capital and an increase in net income and deferred taxes.

Six Months Ended June 30, 2026, Compared to the Six Months Ended June 30, 2025

• Cash flows provided by operating activities increased $25 million driven primarily by an increase in net income and deferred taxes, partially offset by a decrease in income taxes.

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

2 unchanged sentences

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

Finish Line Suites, The Mansion, and Victory Run at Churchill Downs Racetrack, and plans to redevelop Casino Salem into Rockingham Grand Casino in New Hampshire.

Rockingham Grand Casino in New Hampshire and Victory Run at Churchill Downs Racetrack.

We currently expect our project capital to be approximately $180 to $220 million in 2026, although this amount may vary significantly based on the timing of work completed, unanticipated delays, and timing of payments to third parties.

1 unchanged sentence

On July 22, 2025, the Board of Directors of the Company approved a common stock repurchase program of up to $500 million (the "July 2025 Stock Repurchase Program").

The July 2025 Stock Repurchase Program includes and is not in addition to the $169 million previously remaining under the prior March 2025 Stock Repurchase Program.

The July 2025 Stock Repurchase Program includes and is not in addition to the $169 million previously remaining under the March 2025 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 $430 million of repurchase authority remaining under the July 2025 Stock Repurchase Program at March 31, 2026, based on trade date.

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

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").

The March 2025 Stock Repurchase Program included and was not in addition to any unspent amount remaining under the prior authorization.

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

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

Credit Facilities and Indebtedness

The following table presents our debt outstanding:

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

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

Revolver $ 329 $ 657 $ (328)

6 unchanged sentences

Total debt 4,795 5,155 (360)

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

Current maturities of long-term debt and notes payable

(663) (63) (600)

Total debt, net of current maturities 4,132 5,092 (960)

2 unchanged sentences

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 and (ii) amend certain other provisions to the Credit Agreement.

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

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, as set forth therein.

Term Loan B-1 requires quarterly payments of 0.25% of the original $300 million balance.

The Term Loan B-1 requires quarterly payments of 0.25% of the original $300 million balance.

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

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

As of 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%.

The estimated contractual payments, including interest, under the Credit Agreement for the next twelve months are estimated to be $161 million assuming no change in the weighted average borrowing rate of 5.30%, which was in place as of March 31, 2026.

During the three months ended March 31, 2026, we had repayments of principal and interest on the Credit Agreement of $475 million.

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

The estimated contractual payments, including interest, under the Credit Agreement for the next twelve months are estimated to be $152 million assuming no change in the weighted average borrowing rate of 5.27%, which was in place as of June 30, 2026.

During the six months ended June 30, 2026, we had repayments of principal and interest on the Credit Agreement of $1.1 billion.

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.

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 JUNE 30, 2026

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%.

1 unchanged sentence

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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The Company leases certain real estate and other property.

Most of our building and land leases have terms of 2 to 10 years and include one or more options to renew, with renewal terms that can extend the lease term from 1 to 5 years or more.

Most of our building and land leases have terms of 2 to 10 years and include one or more options to renew, with renewal terms that can extend the lease term by 1 to 5 years or more.

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

As of March 31, 2026, minimum rent payable under operating leases was $53 million, with $7 million due in the next twelve months.

As of March 31, 2026, minimum rent payable accounted for as financing obligations was $33 million, with $4 million due in the next twelve months.

As of June 30, 2026, minimum rent payable under operating leases was $52 million, with $7 million due in the next twelve months.

As of June 30, 2026, minimum rent payable accounted for as financing obligations was $32 million, with $4 million due in the next twelve months.

Other Contractual Obligations

The Company has other contractual obligations with commitments of $9 million, $2 million of which is due within the next twelve months.

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

The Company is exploring options to fund upcoming senior note maturities through a combination of cash on hand, cash generated from operations, available capacity under its revolving credit facility, and raising funds via debt markets.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis