Kentucky (State of incorporation) | 001-33998 (Commission file number) | 61-0156015 (IRS Employer Identification No.) | ||
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule l4a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). | |
Emerging growth company | o | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | o |
(d) | Exhibits | |
Press Release dated October 31, 2018 issued by Churchill Downs Incorporated |
CHURCHILL DOWNS INCORPORATED | ||
October 31, 2018 | /s/ Marcia A. Dall | |
By: Marcia A. Dall | ||
Title: Executive Vice President and Chief Financial Officer | ||
(Principal Financial and Accounting Officer) |
• | Net revenue of $221.3 million, 12% increase over the prior year |
• | Net income of $56.3 million compared to $16.7 million in the prior year |
◦ | Adjusted net income of $21.9 million compared to $13.6 million in the prior year |
• | Diluted earnings per share ("EPS") of $4.12 compared to $1.08 in the prior year |
◦ | Adjusted diluted EPS of $1.60 compared to $0.88 in the prior year |
• | Adjusted EBITDA of $62.1 million, 7% increase over the prior year |
CONSOLIDATED RESULTS | Third Quarter | ||||||
(in millions, except per share data) | 2018 | 2017 | |||||
Net revenue | $ | 221.3 | $ | 196.9 | |||
Net income | $ | 56.3 | $ | 16.7 | |||
Adjusted net income(a) | $ | 21.9 | $ | 13.6 | |||
Diluted EPS | $ | 4.12 | $ | 1.08 | |||
Adjusted diluted EPS(a) | $ | 1.60 | $ | 0.88 | |||
Adjusted EBITDA(a) | $ | 62.1 | $ | 58.1 | |||
(a) This is a non-GAAP measure. See explanation of non-GAAP measures below. |
• | $42.3 million net of tax gain on the acquisition of the remaining 50% equity interest in Ocean Downs in exchange for the 25% equity interest in Saratoga New York and Saratoga Colorado properties; |
• | $6.2 million decrease in our income tax provision excluding the book tax on the Ocean Downs/Saratoga Transaction primarily from the reduction in the federal statutory corporate tax rate from 35% to 21% as a result of the Tax Cuts and Jobs Act; |
• | $2.7 million decrease in net interest expense associated with lower outstanding debt balances; and |
• | $0.2 million increase from other sources. |
• | Partially offset by a: |
◦ | $6.5 million decrease in operating income driven primarily by the $5.0 million termination fee related to the July 2018 termination of the definitive purchase agreement for Lady Luck Casino Vicksburg in Vicksburg, Mississippi; and |
◦ | $5.3 million decrease in Big Fish Games' net income. |
Racing | Third Quarter | ||||||
(in millions) | 2018 | 2017 | |||||
Net revenue | $ | 41.0 | $ | 41.9 | |||
Adjusted EBITDA | (1.2 | ) | 1.7 |
TwinSpires | Third Quarter | ||||||
(in millions) | 2018 | 2017 | |||||
Net revenue | $ | 72.1 | $ | 66.1 | |||
Adjusted EBITDA | 19.3 | 18.8 |
Casino | Third Quarter | ||||||
(in millions) | 2018 | 2017 | |||||
Net revenue | $ | 105.0 | $ | 87.5 | |||
Adjusted EBITDA | 45.7 | 39.5 |
• | $8.1 million increase at Ocean Downs due to the Ocean Downs/Saratoga Transaction, which resulted in the Company consolidating Ocean Downs results beginning on September 1, 2018; |
• | $4.0 million increase at Calder due to competitor disruptions and the addition of a new smoking and gaming patio; |
• | $3.7 million increase at Oxford primarily due to the hotel opening in December 2017 and the expanded gaming floor; and |
• | $1.7 million increase at our Louisiana properties primarily from successful marketing and promotional activities. |
• | $6.7 million increase from our wholly-owned Casino properties, including a $2.9 million increase at Ocean Downs, $1.9 million increase at Oxford, a $1.6 million increase at Calder, and a $0.3 million increase from our other properties, all of which were primarily driven by the increases in net revenue; |
• | Partially offset by a $0.5 million decrease in our equity investments due to the Ocean Downs/Saratoga Transaction, which was partially offset by a strong performance at Miami Valley Gaming property. |
• | declaration of an annual cash dividend of $1.63 per share, to be paid on January 4, 2019 to all shareholders of record as of December 7, 2018; |
• | a three-for-one stock split of the Company's common stock and a proportionate increase in the number of its authorized shares of common stock. The additional shares will be distributed on January 25, 2019 to shareholders of record on January 11, 2019. The Company's common stock will begin trading at the split-adjusted price on January 28, 2019; and |
• | a new common stock repurchase program of up to $300.0 million. The new program will replace the prior $250.0 million program that was authorized in April 2017 and had unused authorization of $78.3 million. The new authorized amount includes and is not in addition to any unspent amount remaining under the prior authorization. Repurchases may be made at management’s discretion from time to time on the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions. The repurchase program has no time limit and may be suspended or discontinued at any time. |
• | Transaction expense, net which includes: |
◦ | Acquisition and disposition related charges, including fair value adjustments related to earnouts and deferred payments; and |
◦ | Other transaction expense, including legal, accounting, and other deal-related expense; |
• | Stock-based compensation expense; |
• | Asset impairments; |
• | Gain on Ocean Downs/Saratoga Transaction; |
• | Gain on Calder land sale; |
• | Calder exit costs; |
• | Loss on extinguishment of debt; |
• | Pre-opening expense; and |
• | Other charges, recoveries and expenses |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions, except per common share data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net revenue: | |||||||||||||||
Racing | $ | 37.6 | $ | 38.8 | $ | 243.8 | $ | 228.0 | |||||||
TwinSpires | 71.8 | 65.9 | 228.7 | 198.4 | |||||||||||
Casino | 105.0 | 87.5 | 301.3 | 263.3 | |||||||||||
Other Investments | 6.9 | 4.7 | 16.2 | 14.0 | |||||||||||
Total net revenue | 221.3 | 196.9 | 790.0 | 703.7 | |||||||||||
Operating expense: | |||||||||||||||
Racing | 43.9 | 40.8 | 165.1 | 153.7 | |||||||||||
TwinSpires | 49.2 | 42.8 | 152.6 | 130.6 | |||||||||||
Casinos | 72.2 | 60.7 | 204.3 | 185.5 | |||||||||||
Other Investments | 7.8 | 4.3 | 17.4 | 13.1 | |||||||||||
Corporate | 0.6 | 0.6 | 1.7 | 1.8 | |||||||||||
Selling, general and administrative expense | 21.7 | 19.9 | 63.2 | 58.7 | |||||||||||
Calder exit costs | — | 0.2 | — | 0.8 | |||||||||||
Transaction expense, net | 5.4 | 0.6 | 8.9 | 1.1 | |||||||||||
Total operating expense | 200.8 | 169.9 | 613.2 | 545.3 | |||||||||||
Operating income | 20.5 | 27.0 | 176.8 | 158.4 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense, net | (9.9 | ) | (12.6 | ) | (29.2 | ) | (36.0 | ) | |||||||
Equity in income of unconsolidated investments | 9.1 | 8.9 | 24.4 | 22.7 | |||||||||||
Gain on Ocean Downs/Saratoga transaction | 54.9 | — | 54.9 | — | |||||||||||
Miscellaneous, net | 0.1 | 0.1 | 0.5 | 0.8 | |||||||||||
Total other income (expense) | 54.2 | (3.6 | ) | 50.6 | (12.5 | ) | |||||||||
Income from continuing operations before provision for income taxes | 74.7 | 23.4 | 227.4 | 145.9 | |||||||||||
Income tax provision | (16.7 | ) | (10.3 | ) | (52.1 | ) | (57.9 | ) | |||||||
Income from continuing operations, net of tax | 58.0 | 13.1 | 175.3 | 88.0 | |||||||||||
(Loss) income from discontinued operations, net of tax | (1.7 | ) | 3.6 | 166.1 | 14.3 | ||||||||||
Net income | $ | 56.3 | $ | 16.7 | $ | 341.4 | $ | 102.3 | |||||||
Net income (loss) per common share data - basic: | |||||||||||||||
Continuing operations | $ | 4.27 | $ | 0.85 | $ | 12.65 | $ | 5.53 | |||||||
Discontinued operations | $ | (0.12 | ) | $ | 0.24 | $ | 11.99 | $ | 0.90 | ||||||
Net income per common share data - basic: | $ | 4.15 | $ | 1.09 | $ | 24.64 | $ | 6.43 | |||||||
Net income (loss) per common share data - diluted: | |||||||||||||||
Continuing operations | $ | 4.24 | $ | 0.84 | $ | 12.58 | $ | 5.44 | |||||||
Discontinued operations | $ | (0.12 | ) | $ | 0.24 | $ | 11.92 | $ | 0.88 | ||||||
Net income per common share data - diluted: | $ | 4.12 | $ | 1.08 | $ | 24.50 | $ | 6.32 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 13.6 | 15.3 | 13.8 | 15.9 | |||||||||||
Diluted | 13.7 | 15.5 | 13.9 | 16.2 | |||||||||||
Other comprehensive income: | |||||||||||||||
Foreign currency translation, net of tax | $ | 0.4 | $ | 0.5 | $ | 0.4 | $ | 0.1 | |||||||
Change in pension benefits, net of tax | 0.2 | 0.1 | — | 0.1 | |||||||||||
Other comprehensive income | 0.6 | 0.6 | 0.4 | 0.2 | |||||||||||
Comprehensive income | $ | 56.9 | $ | 17.3 | $ | 341.8 | $ | 102.5 |
(in millions) | September 30, 2018 | December 31, 2017 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 131.3 | $ | 51.7 | |||
Restricted cash | 38.8 | 31.2 | |||||
Accounts receivable, net | 33.8 | 49.6 | |||||
Income taxes receivable | — | 35.6 | |||||
Other current assets | 26.4 | 18.9 | |||||
Current assets of discontinued operations held for sale | — | 69.1 | |||||
Total current assets | 230.3 | 256.1 | |||||
Property and equipment, net | 753.4 | 608.0 | |||||
Investment in and advances to unconsolidated affiliates | 107.9 | 171.3 | |||||
Goodwill | 337.8 | 317.6 | |||||
Other intangible assets, net | 264.8 | 169.4 | |||||
Other assets | 17.5 | 13.6 | |||||
Long-term assets of discontinued operations held for sale | — | 823.4 | |||||
Total assets | $ | 1,711.7 | $ | 2,359.4 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 60.1 | $ | 54.1 | |||
Purses payable | 20.8 | 12.5 | |||||
Account wagering deposit liabilities | 29.7 | 24.0 | |||||
Accrued expense | 83.0 | 75.8 | |||||
Income taxes payable | 0.5 | — | |||||
Current deferred revenue | 12.8 | 70.9 | |||||
Current maturities of long-term debt | 4.0 | 4.0 | |||||
Dividends payable | — | 23.7 | |||||
Current liabilities of discontinued operations held for sale | — | 188.2 | |||||
Total current liabilities | 210.9 | 453.2 | |||||
Long-term debt, net of current maturities and loan origination fees | 388.2 | 632.9 | |||||
Notes payable, net of debt issuance costs | 492.9 | 492.3 | |||||
Non-current deferred revenue | 21.1 | 29.3 | |||||
Deferred income taxes | 66.4 | 40.6 | |||||
Other liabilities | 17.5 | 16.0 | |||||
Non-current liabilities of discontinued operations held for sale | — | 54.8 | |||||
Total liabilities | 1,197.0 | 1,719.1 | |||||
Commitments and contingencies | |||||||
Shareholders' equity: | |||||||
Preferred stock, no par value; 0.3 shares authorized; no shares issued or outstanding | — | — | |||||
Common stock, no par value; 50.0 shares authorized; 13.6 shares issued and outstanding at September 30, 2018 and 15.4 shares at December 31, 2017 | 11.5 | 7.3 | |||||
Retained earnings | 504.1 | 634.3 | |||||
Accumulated other comprehensive loss | (0.9 | ) | (1.3 | ) | |||
Total shareholders' equity | 514.7 | 640.3 | |||||
Total liabilities and shareholders' equity | $ | 1,711.7 | $ | 2,359.4 |
CHURCHILL DOWNS INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (unaudited) | |||||||
Nine Months Ended September 30, | |||||||
(in millions) | 2018 | 2017 | |||||
Cash flows from operating activities: | |||||||
Net income | $ | 341.4 | $ | 102.3 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 45.8 | 73.3 | |||||
Game technology and rights amortization | 0.4 | 13.5 | |||||
Acquisition expenses, net | — | 1.7 | |||||
Gain on sale of Big Fish Games | (219.5 | ) | — | ||||
Gain on Ocean Downs/Saratoga transaction | (54.9 | ) | — | ||||
Distributed earnings from equity investments | 14.4 | 11.7 | |||||
Big Fish Games earnout payment | (2.4 | ) | (2.5 | ) | |||
Big Fish Games deferred payment | (2.0 | ) | — | ||||
Equity in income of unconsolidated investments | (24.4 | ) | (22.7 | ) | |||
Stock-based compensation | 16.5 | 17.5 | |||||
Deferred income taxes | 24.7 | (13.0 | ) | ||||
Other | 2.2 | 1.0 | |||||
Increase (decrease) in cash resulting from changes in operating assets and liabilities, net of business acquisitions and dispositions: | |||||||
Game software development | (0.3 | ) | (17.1 | ) | |||
Income taxes | 31.2 | 24.5 | |||||
Deferred revenue | (43.6 | ) | (27.4 | ) | |||
Other assets and liabilities | 5.9 | 4.4 | |||||
Net cash provided by operating activities | 135.4 | 167.2 | |||||
Cash flows from investing activities: | |||||||
Capital maintenance expenditures | (19.9 | ) | (26.7 | ) | |||
Capital project expenditures | (105.6 | ) | (62.4 | ) | |||
Receivable from escrow | — | 13.6 | |||||
Acquisition of businesses, net of cash acquired | 13.1 | (23.1 | ) | ||||
Proceeds from sale of Big Fish Games | 970.7 | — | |||||
Investment in joint venture | — | (24.0 | ) | ||||
Other | (9.4 | ) | (2.0 | ) | |||
Net cash provided by (used in) investing activities | 848.9 | (124.6 | ) | ||||
Cash flows from financing activities: | |||||||
Proceeds from borrowings under long-term debt obligations | 129.7 | 769.1 | |||||
Repayments of borrowings under long-term debt obligations | (374.7 | ) | (567.7 | ) | |||
Repayment of Ocean Downs debt | (54.7 | ) | — | ||||
Big Fish Games earnout payment | (31.8 | ) | (31.7 | ) | |||
Big Fish Games deferred payment | (26.4 | ) | — | ||||
Payment of dividends | (23.5 | ) | (21.8 | ) | |||
Repurchase of common stock | (514.7 | ) | (181.1 | ) | |||
Other | (3.0 | ) | 1.5 | ||||
Net cash used in financing activities | (899.1 | ) | (31.7 | ) | |||
Net increase in cash, cash equivalents and restricted cash | 85.2 | 10.9 | |||||
Effect of exchange rate changes on cash flows | (0.6 | ) | 1.2 | ||||
Cash, cash equivalents and restricted cash, beginning of period | 85.5 | 83.0 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 170.1 | $ | 95.1 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
GAAP net income | $ | 56.3 | $ | 16.7 | $ | 341.4 | $ | 102.3 | |||||||
Adjustments, continuing operations: | |||||||||||||||
Transaction expense, net | 5.4 | 0.6 | 8.9 | 1.1 | |||||||||||
Calder exit costs | — | 0.2 | — | 0.8 | |||||||||||
Pre-opening expense included in other investments | 2.6 | 0.2 | 3.9 | 0.4 | |||||||||||
Gain on Ocean Downs/Saratoga transaction | (54.9 | ) | — | (54.9 | ) | — | |||||||||
Other | 0.2 | — | 0.2 | — | |||||||||||
Income tax impact on net income adjustments(a) | 10.6 | (0.5 | ) | 7.5 | (0.9 | ) | |||||||||
Total adjustments, continuing operations | (36.1 | ) | 0.5 | (34.4 | ) | 1.4 | |||||||||
Gain on Big Fish Transaction, net of tax(b) | — | — | (168.3 | ) | — | ||||||||||
Big Fish Games net loss (income)(b) | 1.7 | (3.6 | ) | 2.2 | (14.3 | ) | |||||||||
Total adjustments | (34.4 | ) | (3.1 | ) | (200.5 | ) | (12.9 | ) | |||||||
Adjusted net income | $ | 21.9 | $ | 13.6 | $ | 140.9 | $ | 89.4 | |||||||
Adjusted diluted EPS | $ | 1.60 | $ | 0.88 | $ | 10.11 | $ | 5.53 | |||||||
Weighted average shares outstanding - Diluted | 13.7 | 15.5 | 13.9 | 16.2 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net revenue from external customers: | |||||||||||||||
Racing: | |||||||||||||||
Churchill Downs | $ | 8.5 | $ | 8.1 | $ | 165.4 | $ | 147.1 | |||||||
Arlington | 23.7 | 25.0 | 49.7 | 51.5 | |||||||||||
Fair Grounds | 4.8 | 5.0 | 26.8 | 27.5 | |||||||||||
Calder | 0.6 | 0.7 | 1.9 | 1.9 | |||||||||||
Total Racing | 37.6 | 38.8 | 243.8 | 228.0 | |||||||||||
TwinSpires | 71.8 | 65.9 | 228.7 | 198.4 | |||||||||||
Casino: | |||||||||||||||
Oxford Casino | 28.9 | 25.2 | 79.3 | 69.2 | |||||||||||
Calder Casino | 23.4 | 19.4 | 73.0 | 62.6 | |||||||||||
Riverwalk Casino | 12.8 | 12.2 | 40.8 | 35.7 | |||||||||||
Harlow’s Casino | 12.1 | 12.3 | 37.9 | 38.3 | |||||||||||
VSI | 10.6 | 9.3 | 32.7 | 28.8 | |||||||||||
Fair Grounds Slots | 9.1 | 8.7 | 28.9 | 27.7 | |||||||||||
Ocean Downs | 8.1 | — | 8.1 | — | |||||||||||
Saratoga | — | 0.4 | 0.6 | 1.0 | |||||||||||
Total Casino | 105.0 | 87.5 | 301.3 | 263.3 | |||||||||||
Other Investments | 6.9 | 4.7 | 16.2 | 14.0 | |||||||||||
Net revenue from external customers | $ | 221.3 | $ | 196.9 | $ | 790.0 | $ | 703.7 | |||||||
Intercompany net revenue: | |||||||||||||||
Racing: | |||||||||||||||
Churchill Downs | $ | 1.0 | $ | 0.9 | $ | 10.7 | $ | 9.6 | |||||||
Arlington | 2.3 | 2.2 | 5.6 | 5.1 | |||||||||||
Fair Grounds | — | — | 1.1 | 1.0 | |||||||||||
Calder | 0.1 | — | 0.1 | — | |||||||||||
Total Racing | 3.4 | 3.1 | 17.5 | 15.7 | |||||||||||
TwinSpires | 0.3 | 0.2 | 1.1 | 0.8 | |||||||||||
Other Investments | 0.9 | 1.0 | 3.6 | 3.7 | |||||||||||
Eliminations | (4.6 | ) | (4.3 | ) | (22.2 | ) | (20.2 | ) | |||||||
Intercompany net revenue | $ | — | $ | — | $ | — | $ | — |
Three Months Ended September 30, 2018 | |||||||||||||||||||||||||||
(in millions) | Racing | TwinSpires | Casino | Other Investments | Corporate | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 41.0 | $ | 72.1 | $ | 105.0 | $ | 7.8 | $ | — | $ | (4.6 | ) | $ | 221.3 | ||||||||||||
Taxes & purses | (11.0 | ) | (4.2 | ) | (36.0 | ) | (0.7 | ) | — | — | (51.9 | ) | |||||||||||||||
Marketing & advertising | (1.2 | ) | (0.6 | ) | (3.4 | ) | (0.1 | ) | — | 0.1 | (5.2 | ) | |||||||||||||||
Salaries & benefits | (10.6 | ) | (2.1 | ) | (14.6 | ) | (3.4 | ) | — | — | (30.7 | ) | |||||||||||||||
Content expense | (3.4 | ) | (37.3 | ) | — | — | — | 4.2 | (36.5 | ) | |||||||||||||||||
Selling, general & administrative expense | (4.2 | ) | (2.9 | ) | (6.2 | ) | (1.2 | ) | (2.6 | ) | 0.2 | (16.9 | ) | ||||||||||||||
Other operating expense | (11.8 | ) | (5.7 | ) | (11.8 | ) | (1.3 | ) | (0.2 | ) | 0.1 | (30.7 | ) | ||||||||||||||
Other income | — | — | 12.7 | — | — | — | 12.7 | ||||||||||||||||||||
Adjusted EBITDA | $ | (1.2 | ) | $ | 19.3 | $ | 45.7 | $ | 1.1 | $ | (2.8 | ) | $ | — | $ | 62.1 |
Three Months Ended September 30, 2017 | |||||||||||||||||||||||||||
(in millions) | Racing | TwinSpires | Casino | Other Investments | Corporate(d) | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 41.9 | $ | 66.1 | $ | 87.5 | $ | 5.7 | $ | — | $ | (4.3 | ) | $ | 196.9 | ||||||||||||
Taxes & purses | (11.2 | ) | (4.5 | ) | (28.9 | ) | — | — | — | (44.6 | ) | ||||||||||||||||
Marketing & advertising | (1.0 | ) | (1.1 | ) | (3.1 | ) | — | — | — | (5.2 | ) | ||||||||||||||||
Salaries & benefits | (10.3 | ) | (2.3 | ) | (13.5 | ) | (2.9 | ) | — | — | (29.0 | ) | |||||||||||||||
Content expense | (3.8 | ) | (30.9 | ) | — | — | — | 4.0 | (30.7 | ) | |||||||||||||||||
Selling, general & administrative expense | (3.9 | ) | (3.2 | ) | (5.5 | ) | (0.8 | ) | (3.1 | ) | 0.6 | (15.9 | ) | ||||||||||||||
Other operating expense | (10.1 | ) | (5.3 | ) | (9.8 | ) | (1.1 | ) | 0.1 | — | (26.2 | ) | |||||||||||||||
Other income | 0.1 | — | 12.8 | 0.2 | — | (0.3 | ) | 12.8 | |||||||||||||||||||
Adjusted EBITDA | $ | 1.7 | $ | 18.8 | $ | 39.5 | $ | 1.1 | $ | (3.0 | ) | $ | — | $ | 58.1 |
Nine Months Ended September 30, 2018 | |||||||||||||||||||||||||||
(in millions) | Racing | TwinSpires | Casino | Other Investments | Corporate | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 261.3 | $ | 229.8 | $ | 301.3 | $ | 19.8 | $ | — | $ | (22.2 | ) | $ | 790.0 | ||||||||||||
Taxes & purses | (55.7 | ) | (12.2 | ) | (101.8 | ) | (0.7 | ) | — | — | (170.4 | ) | |||||||||||||||
Marketing & advertising | (5.6 | ) | (4.5 | ) | (10.1 | ) | (0.2 | ) | — | 0.3 | (20.1 | ) | |||||||||||||||
Salaries & benefits | (34.5 | ) | (6.6 | ) | (41.7 | ) | (10.2 | ) | — | — | (93.0 | ) | |||||||||||||||
Content expense | (11.2 | ) | (119.3 | ) | — | — | — | 20.3 | (110.2 | ) | |||||||||||||||||
Selling, general & administrative expense | (12.8 | ) | (8.6 | ) | (17.2 | ) | (2.6 | ) | (7.6 | ) | 0.9 | (47.9 | ) | ||||||||||||||
Other operating expense | (43.4 | ) | (19.7 | ) | (33.0 | ) | (3.7 | ) | (0.5 | ) | 0.7 | (99.6 | ) | ||||||||||||||
Other income | 0.4 | — | 36.4 | 0.1 | 0.1 | — | 37.0 | ||||||||||||||||||||
Adjusted EBITDA | $ | 98.5 | $ | 58.9 | $ | 133.9 | $ | 2.5 | $ | (8.0 | ) | $ | — | $ | 285.8 |
Nine Months Ended September 30, 2017 | |||||||||||||||||||||||||||
(in millions) | Racing | TwinSpires | Casino | Other Investments | Corporate(e) | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 243.7 | $ | 199.2 | $ | 263.3 | $ | 17.7 | $ | — | $ | (20.2 | ) | $ | 703.7 | ||||||||||||
Taxes & purses | (54.3 | ) | (11.6 | ) | (87.7 | ) | — | — | — | (153.6 | ) | ||||||||||||||||
Marketing & advertising | (3.9 | ) | (6.7 | ) | (9.1 | ) | — | — | 0.3 | (19.4 | ) | ||||||||||||||||
Salaries & benefits | (32.4 | ) | (7.1 | ) | (40.0 | ) | (9.1 | ) | — | — | (88.6 | ) | |||||||||||||||
Content expense | (11.7 | ) | (96.5 | ) | — | — | — | 18.1 | (90.1 | ) | |||||||||||||||||
Selling, general & administrative expense | (11.9 | ) | (8.9 | ) | (16.3 | ) | (2.3 | ) | (8.5 | ) | 1.2 | (46.7 | ) | ||||||||||||||
Other operating expense | (39.4 | ) | (17.1 | ) | (31.0 | ) | (3.6 | ) | (0.4 | ) | 0.6 | (90.9 | ) | ||||||||||||||
Other income | 0.6 | — | 33.1 | 0.3 | — | — | 34.0 | ||||||||||||||||||||
Adjusted EBITDA | $ | 90.7 | $ | 51.3 | $ | 112.3 | $ | 3.0 | $ | (8.9 | ) | $ | — | $ | 248.4 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Reconciliation of Comprehensive Income to Adjusted EBITDA: | |||||||||||||||
Comprehensive income | $ | 56.9 | $ | 17.3 | $ | 341.8 | $ | 102.5 | |||||||
Foreign currency translation, net of tax | (0.4 | ) | (0.5 | ) | (0.4 | ) | (0.1 | ) | |||||||
Change in pension benefits, net of tax | (0.2 | ) | (0.1 | ) | — | (0.1 | ) | ||||||||
Net income | 56.3 | 16.7 | 341.4 | 102.3 | |||||||||||
Loss (income) from discontinued operations, net of tax | 1.7 | (3.6 | ) | (166.1 | ) | (14.3 | ) | ||||||||
Income from continuing operations, net of tax | 58.0 | 13.1 | 175.3 | 88.0 | |||||||||||
Additions: | |||||||||||||||
Depreciation and amortization | 16.7 | 13.4 | 45.8 | 42.0 | |||||||||||
Interest expense | 9.9 | 12.6 | 29.2 | 36.0 | |||||||||||
Income tax provision | 16.7 | 10.3 | 52.1 | 57.9 | |||||||||||
EBITDA | $ | 101.3 | $ | 49.4 | $ | 302.4 | $ | 223.9 | |||||||
Adjustments to EBITDA: | |||||||||||||||
Selling, general and administrative: | |||||||||||||||
Stock-based compensation expense | $ | 3.9 | $ | 3.9 | $ | 13.1 | $ | 11.7 | |||||||
Other charges | 0.2 | — | 0.2 | — | |||||||||||
Pre-opening expense | 2.6 | — | 3.9 | 0.3 | |||||||||||
Other income, expense: | |||||||||||||||
Interest, depreciation and amortization expense related to equity investments | 3.6 | 4.0 | 12.2 | 10.6 | |||||||||||
Gain on Ocean Downs/Saratoga transaction | (54.9 | ) | — | (54.9 | ) | — | |||||||||
Transaction expense, net | 5.4 | 0.6 | 8.9 | 1.1 | |||||||||||
Calder exit costs | — | 0.2 | — | 0.8 | |||||||||||
Total adjustments to EBITDA | (39.2 | ) | 8.7 | (16.6 | ) | 24.5 | |||||||||
Adjusted EBITDA | $ | 62.1 | $ | 58.1 | $ | 285.8 | $ | 248.4 | |||||||
Adjusted EBITDA by segment: | |||||||||||||||
Racing | $ | (1.2 | ) | $ | 1.7 | $ | 98.5 | $ | 90.7 | ||||||
TwinSpires | 19.3 | 18.8 | 58.9 | 51.3 | |||||||||||
Casinos | 45.7 | 39.5 | 133.9 | 112.3 | |||||||||||
Other Investments | 1.1 | 1.1 | 2.5 | 3.0 | |||||||||||
Corporate(d) | (2.8 | ) | (3.0 | ) | (8.0 | ) | (8.9 | ) | |||||||
Adjusted EBITDA | $ | 62.1 | $ | 58.1 | $ | 285.8 | $ | 248.4 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Corporate allocated expense: | |||||||||||||||
Racing | $ | (1.6 | ) | $ | (1.5 | ) | $ | (4.7 | ) | $ | (4.3 | ) | |||
TwinSpires | (1.5 | ) | (1.4 | ) | (4.2 | ) | (3.9 | ) | |||||||
Casinos | (2.2 | ) | (1.8 | ) | (6.3 | ) | (5.3 | ) | |||||||
Other Investments | (0.4 | ) | (0.3 | ) | (1.1 | ) | (1.0 | ) | |||||||
Corporate allocated expense | 5.7 | 5.0 | 16.3 | 14.5 | |||||||||||
Total Corporate allocated expense | $ | — | $ | — | $ | — | $ | — |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net revenue | $ | 105.2 | $ | 128.4 | $ | 322.1 | $ | 340.9 | |||||||
Operating and SG&A expense | 76.4 | 97.9 | 240.5 | 263.3 | |||||||||||
Depreciation and amortization | 5.9 | 5.2 | 19.0 | 16.1 | |||||||||||
Total operating expense | 82.3 | 103.1 | 259.5 | 279.4 | |||||||||||
Operating income | 22.9 | 25.3 | 62.6 | 61.5 | |||||||||||
Interest and other, net | (1.0 | ) | 0.3 | (5.6 | ) | (4.7 | ) | ||||||||
Net income | $ | 21.9 | $ | 25.6 | $ | 57.0 | $ | 56.8 |
(in millions) | September 30, 2018 | December 31, 2017 | |||||
Assets | |||||||
Current assets | $ | 21.5 | $ | 64.5 | |||
Property and equipment, net | 98.0 | 234.6 | |||||
Other assets, net | 107.0 | 236.5 | |||||
Total assets | $ | 226.5 | $ | 535.6 | |||
Liabilities and Members' Equity | |||||||
Current liabilities | $ | 19.3 | $ | 100.3 | |||
Long-term debt, excluding current portion | 1.6 | 110.1 | |||||
Other liabilities | 0.1 | 0.1 | |||||
Members' equity | 205.5 | 325.1 | |||||
Total liabilities and members' equity | $ | 226.5 | $ | 535.6 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net revenue | $ | 44.7 | $ | 39.6 | $ | 132.5 | $ | 123.0 | |||||||
Operating and SG&A expense | 30.9 | 28.1 | 91.4 | 85.7 | |||||||||||
Depreciation and amortization | 3.5 | 3.2 | 10.4 | 9.5 | |||||||||||
Total operating expense | 34.4 | 31.3 | 101.8 | 95.2 | |||||||||||
Operating income | 10.3 | 8.3 | 30.7 | 27.8 | |||||||||||
Interest and other, net | (0.3 | ) | (0.6 | ) | (1.2 | ) | (1.9 | ) | |||||||
Net income | $ | 9.9 | $ | 7.7 | $ | 29.5 | $ | 25.9 |
(in millions) | September 30, 2018 | December 31, 2017 | |||||
Assets | |||||||
Current assets | $ | 20.4 | $ | 18.1 | |||
Property and equipment, net | 97.7 | 103.5 | |||||
Other assets, net | 107.0 | 106.6 | |||||
Total assets | $ | 225.1 | $ | 228.2 | |||
Liabilities and Members' Equity | |||||||
Current liabilities | $ | 18.9 | $ | 19.0 | |||
Long-term debt | 1.6 | 7.1 | |||||
Other liabilities | 0.1 | 0.1 | |||||
Members' equity | 204.5 | 202.0 | |||||
Total liabilities and members' equity | $ | 225.1 | $ | 228.2 |