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 February 27, 2019 issued by Churchill Downs Incorporated. | ||
CHURCHILL DOWNS INCORPORATED | ||
February 27, 2019 | /s/ Marcia A. Dall | |
By: Marcia A. Dall | ||
Title: Executive Vice President and Chief Financial Officer | ||
(Principal Financial and Accounting Officer) |
• | Net revenue of $219.0 million, up 22% over the prior year quarter |
• | Net income from continuing operations of $7.3 million, compared to $34.4 million in prior year quarter |
• | Diluted earnings per share ("EPS") from continuing operations of $0.18, compared to $0.74 in the prior year quarter |
• | Net income of $11.4 million, compared to $38.2 million in prior year quarter |
◦ | Adjusted net income of $8.6 million, up 69%, compared to $5.1 million in the prior year quarter |
• | Diluted EPS of $0.28, compared to $0.82 in prior year quarter |
◦ | Adjusted diluted EPS of $0.21, up 91%, compared to $0.11 in the prior year quarter |
• | Adjusted EBITDA of $43.0 million, up 14%, compared to $37.8 million in the prior year quarter |
• | Net revenue of $1,009.0 million, up 14% over the prior year |
• | Net income from continuing operations of $182.6 million, compared to $122.4 million in the prior year |
• | Diluted EPS from continuing operations of $4.39, up 72%, compared to $2.55 in the prior year |
• | Net income of $352.8 million, compared to $140.5 million in the prior year |
◦ | Adjusted net income of $151.3 million, up 61%, compared to $94.1 million in the prior year |
• | Diluted EPS of $8.48, compared to $2.92 in the prior year |
◦ | Adjusted diluted EPS of $3.64, up 86%, compared to $1.96 in the prior year |
• | Adjusted EBITDA of $328.8 million, up 15% over the prior year |
CONSOLIDATED RESULTS | Fourth Quarter | Years Ended December 31, | |||||||||||||
(in millions, except per share data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net revenue | $ | 219.0 | $ | 178.9 | $ | 1,009.0 | $ | 882.6 | |||||||
Net income from continuing operations | $ | 7.3 | $ | 34.4 | $ | 182.6 | $ | 122.4 | |||||||
Diluted EPS from continuing operations | $ | 0.18 | $ | 0.74 | $ | 4.39 | $ | 2.55 | |||||||
Net income | $ | 11.4 | $ | 38.2 | $ | 352.8 | $ | 140.5 | |||||||
Diluted EPS | $ | 0.28 | $ | 0.82 | $ | 8.48 | $ | 2.92 | |||||||
Adjusted net income(a) | $ | 8.6 | $ | 5.1 | $ | 151.3 | $ | 94.1 | |||||||
Adjusted diluted EPS(a) | $ | 0.21 | $ | 0.11 | $ | 3.64 | $ | 1.96 | |||||||
Adjusted EBITDA(a) | $ | 43.0 | $ | 37.8 | $ | 328.8 | $ | 286.2 | |||||||
(a) This is a non-GAAP measure. See explanation of non-GAAP measures below. |
• | $57.7 million provisional tax benefit recorded in the fourth quarter of 2017 that did not recur in 2018 primarily related to the re-measurement of our net deferred tax liabilities associated with the Tax Cuts and Jobs Act ("Tax Act"), which reduced the U.S. corporate tax rate from 35% to 21%. |
• | Partially offset by: |
◦ | $26.5 million of non-cash after-tax asset impairments and loss on extinguishment of debt in the fourth quarter of 2017 that did not recur in 2018; and |
◦ | $1.4 million increase of after-tax other non-recurring expenses. |
• | $1.5 million decrease in after-tax net interest expense associated with lower outstanding debt balances; and |
• | $1.2 million after-tax increase driven by the results of our operating segments and equity in income of our unconsolidated affiliates. Included in our fourth quarter 2018 results was a $1.8 million after-tax increase in our bonus expense and stock-based compensation compared to the prior year quarter. |
• | $42.3 million net of tax gain on the Ocean Downs/Saratoga Transaction; |
• | $26.5 million of non-cash after-tax asset impairments and loss on extinguishment of debt in the fourth quarter of 2017 that did not recur in 2018; and |
• | $27.0 million decrease related to our income tax provision as a result of the Tax Act and reduction to the maximum federal corporate income tax rate from 35% to 21% effective January 1, 2018. |
• | Partially offset by the following: |
◦ | $57.7 million provisional tax benefit recorded in the fourth quarter of 2017 that did not recur in 2018 primarily related to the re-measurement of our net deferred tax liabilities associated with the Tax Act; and |
◦ | $5.5 million after-tax increase primarily related to higher transaction expenses and pre-opening costs related to Derby City Gaming. |
• | $21.8 million after-tax increase primarily driven by the results of our operating segments and equity in income of our unconsolidated affiliates; and |
• | $5.8 million decrease in after-tax net interest expense associated with lower outstanding debt balances. |
Racing | Fourth Quarter | Years Ended December 31, | |||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net revenue | $ | 34.1 | $ | 32.9 | $ | 295.4 | $ | 276.6 | |||||||
Adjusted EBITDA | (6.1 | ) | (6.2 | ) | 92.4 | 84.5 |
• | $9.3 million increase at Churchill Downs primarily from a successful Kentucky Derby and Oaks week driven by increased ticket sales and handle. |
• | Partially offset by: |
◦ | $1.1 million decrease at Arlington primarily due to decreased net revenue from lower meet attendance as a result of inclement weather; and |
◦ | $0.3 million decrease from other sources. |
Online Wagering | Fourth Quarter | Years Ended December 31, | |||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net revenue | $ | 61.7 | $ | 57.5 | $ | 291.5 | $ | 256.7 | |||||||
Adjusted EBITDA | 13.9 | 13.1 | 72.8 | 64.4 |
Casino | Fourth Quarter | Years Ended December 31, | |||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net revenue | $ | 109.9 | $ | 87.2 | $ | 411.2 | $ | 350.5 | |||||||
Adjusted EBITDA | 35.6 | 33.7 | 169.5 | 146.0 |
• | $17.8 million increase at Ocean Downs as a result of the Ocean Downs/Saratoga Transaction, which resulted in the Company consolidating Ocean Downs results beginning on September 1, 2018; |
• | $2.0 million increase at our Louisiana properties, a $1.2 million increase at Riverwalk, and a $0.6 million increase at Harlow's, all of which resulted primarily from successful marketing and promotional activities; and |
• | $1.1 million increase at Oxford primarily due to the hotel and expanded gaming floor opening in December 2017. |
• | $25.9 million increase at Ocean Downs as a result of the Ocean Downs/Saratoga Transaction, which resulted in the Company consolidating Ocean Downs results beginning on September 1, 2018; |
• | $11.2 million increase at Oxford due to the hotel and expanded gaming floor opening in December 2017; |
• | $10.7 million increase at Calder due to capital improvements and the temporary closure of a competitor due to Hurricane Irma which re-opened during the second quarter of 2018; and |
• | $7.1 million increase at our Louisiana properties and a $6.3 million increase at Riverwalk, both of which resulted from successful promotional activities. |
• | Partially offsetting these increases was a $0.5 million decrease from other sources. |
• | $23.1 million increase from our wholly-owned Casino properties, including a $7.2 million increase at Ocean Downs, a $4.9 million increase at Riverwalk, a $4.8 million increase at Calder, a $3.2 million increase at Oxford, and a $2.2 million increase at our Louisiana properties, all of which were primarily driven by the increases in net revenue. Harlow's also increased $0.8 million primarily due to favorable insurance reserve adjustments; and |
• | $0.4 million increase from our equity investments due to strong performance at MVG, partially offset by a decrease due to the Ocean Downs/Saratoga Transaction. |
Other Investments | Fourth Quarter | Years Ended December 31, | |||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net revenue | $ | 18.0 | $ | 6.0 | $ | 37.8 | $ | 23.7 | |||||||
Adjusted EBITDA | 2.8 | 0.7 | 5.3 | 3.7 |
• | Transaction expense, net which includes: |
◦ | Acquisition and disposition related charges, including fair value adjustments related to earnouts and deferred payments; |
◦ | Calder Racing exit costs; 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; |
• | Loss on extinguishment of debt; |
• | Pre-opening expense; and |
• | Other charges, recoveries and expenses |
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
(in millions, except per common share data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net revenue: | |||||||||||||||
Racing | $ | 30.5 | $ | 29.3 | $ | 274.3 | $ | 257.3 | |||||||
Online Wagering | 61.5 | 57.2 | 290.2 | 255.6 | |||||||||||
Casino | 109.9 | 87.2 | 411.2 | 350.5 | |||||||||||
Other Investments | 17.1 | 5.2 | 33.3 | 19.2 | |||||||||||
Total net revenue | 219.0 | 178.9 | 1,009.0 | 882.6 | |||||||||||
Operating expense: | |||||||||||||||
Racing | 39.8 | 38.8 | 204.9 | 192.5 | |||||||||||
Online Wagering | 43.5 | 39.6 | 196.1 | 170.2 | |||||||||||
Casino | 79.8 | 61.8 | 284.1 | 247.3 | |||||||||||
Other Investments | 14.8 | 4.7 | 32.2 | 17.8 | |||||||||||
Corporate | 0.4 | 0.2 | 2.1 | 2.0 | |||||||||||
Selling, general and administrative expense | 27.3 | 24.4 | 90.5 | 83.1 | |||||||||||
Impairment of tangible and other intangible assets | — | 21.7 | — | 21.7 | |||||||||||
Transaction expense, net | 1.4 | 0.4 | 10.3 | 2.3 | |||||||||||
Total operating expense | 207.0 | 191.6 | 820.2 | 736.9 | |||||||||||
Operating income (loss) | 12.0 | (12.7 | ) | 188.8 | 145.7 | ||||||||||
Other income (expense): | |||||||||||||||
Interest expense, net | (10.9 | ) | (13.3 | ) | (40.1 | ) | (49.3 | ) | |||||||
Loss on extinguishment of debt | — | (20.7 | ) | — | (20.7 | ) | |||||||||
Equity in income of unconsolidated investments | 5.2 | 2.8 | 29.6 | 25.5 | |||||||||||
Gain on Ocean Downs/Saratoga transaction | — | — | 54.9 | — | |||||||||||
Miscellaneous, net | 0.2 | 0.5 | 0.7 | 1.3 | |||||||||||
Total other (expense) income | (5.5 | ) | (30.7 | ) | 45.1 | (43.2 | ) | ||||||||
Income (loss) from continuing operations before provision for income taxes | 6.5 | (43.4 | ) | 233.9 | 102.5 | ||||||||||
Income tax benefit (provision) | 0.8 | 77.8 | (51.3 | ) | 19.9 | ||||||||||
Income from continuing operations, net of tax | 7.3 | 34.4 | 182.6 | 122.4 | |||||||||||
Income from discontinued operations, net of tax | 4.1 | 3.8 | 170.2 | 18.1 | |||||||||||
Net income | $ | 11.4 | $ | 38.2 | $ | 352.8 | $ | 140.5 | |||||||
Net income per common share data - basic: | |||||||||||||||
Continuing operations | $ | 0.18 | $ | 0.75 | $ | 4.42 | $ | 2.59 | |||||||
Discontinued operations | $ | 0.10 | $ | 0.08 | $ | 4.12 | $ | 0.38 | |||||||
Net income per common share - basic | $ | 0.28 | $ | 0.83 | $ | 8.54 | $ | 2.97 | |||||||
Net income per common share data - diluted: | |||||||||||||||
Continuing operations | $ | 0.18 | $ | 0.74 | $ | 4.39 | $ | 2.55 | |||||||
Discontinued operations | $ | 0.10 | $ | 0.08 | $ | 4.09 | $ | 0.37 | |||||||
Net income per common share - diluted | $ | 0.28 | $ | 0.82 | $ | 8.48 | $ | 2.92 | |||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 40.6 | 45.9 | 41.3 | 47.2 | |||||||||||
Diluted | 41.0 | 46.6 | 41.6 | 48.0 | |||||||||||
Other comprehensive income (loss): | |||||||||||||||
Foreign currency translation, net of tax | $ | 0.2 | $ | (0.2 | ) | $ | 0.6 | $ | (0.1 | ) | |||||
Change in pension benefits, net of tax | (0.2 | ) | (0.1 | ) | (0.2 | ) | — | ||||||||
Other comprehensive income (loss) | — | (0.3 | ) | 0.4 | (0.1 | ) | |||||||||
Comprehensive income | $ | 11.4 | $ | 37.9 | $ | 353.2 | $ | 140.4 |
(in millions) | 2018 | 2017 | |||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 133.3 | $ | 51.7 | |||
Restricted cash | 40.0 | 31.2 | |||||
Accounts receivable, net of allowance for doubtful accounts of $4.0 in 2018 and $3.6 in 2017 | 28.8 | 49.6 | |||||
Income taxes receivable | 17.0 | 35.6 | |||||
Other current assets | 22.4 | 18.9 | |||||
Current assets of discontinued operations held for sale | — | 69.1 | |||||
Total current assets | 241.5 | 256.1 | |||||
Property and equipment, net | 757.5 | 608.0 | |||||
Investment in and advances to unconsolidated affiliates | 108.1 | 171.3 | |||||
Goodwill | 338.0 | 317.6 | |||||
Other intangible assets, net | 264.0 | 169.4 | |||||
Other assets | 16.1 | 13.6 | |||||
Long-term assets of discontinued operations held for sale | — | 823.4 | |||||
Total assets | $ | 1,725.2 | $ | 2,359.4 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 47.0 | $ | 54.1 | |||
Purses payable | 15.8 | 12.5 | |||||
Account wagering deposit liabilities | 29.6 | 24.0 | |||||
Accrued expense | 89.8 | 75.8 | |||||
Current deferred revenue | 47.9 | 70.9 | |||||
Current maturities of long-term debt | 4.0 | 4.0 | |||||
Dividends payable | 22.5 | 23.7 | |||||
Current liabilities of discontinued operations held for sale | — | 188.2 | |||||
Total current liabilities | 256.6 | 453.2 | |||||
Long-term debt (net of current maturities and loan origination fees of $4.7 in 2018 and $5.1 in 2017) | 387.3 | 632.9 | |||||
Notes payable (net of debt issuance costs of $7.0 in 2018 and $7.7 in 2017) | 493.0 | 492.3 | |||||
Non-current deferred revenue | 21.1 | 29.3 | |||||
Deferred income taxes | 78.2 | 40.6 | |||||
Other liabilities | 15.7 | 16.0 | |||||
Non-current liabilities of discontinued operations held for sale | — | 54.8 | |||||
Total liabilities | 1,251.9 | 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; 150.0 shares authorized; 40.4 shares issued and outstanding in 2018 and 46.2 in 2017 | — | 7.3 | |||||
Retained earnings | 474.2 | 634.3 | |||||
Accumulated other comprehensive loss | (0.9 | ) | (1.3 | ) | |||
Total shareholders' equity | 473.3 | 640.3 | |||||
Total liabilities and shareholders' equity | $ | 1,725.2 | $ | 2,359.4 |
CHURCHILL DOWNS INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS for the years ended December 31, | |||||||
(in millions) | 2018 | 2017 | |||||
Cash flows from operating activities: | |||||||
Net income | $ | 352.8 | $ | 140.5 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 63.6 | 97.1 | |||||
Earnings from equity investments, net | (29.6 | ) | (25.5 | ) | |||
Distributed earnings from equity investments | 19.8 | 18.0 | |||||
Stock-based compensation | 21.1 | 27.1 | |||||
Deferred income taxes | 36.5 | (65.0 | ) | ||||
Loss on impairment of assets | — | 21.7 | |||||
Loss on extinguishment of debt | — | 20.7 | |||||
Gain on Ocean Downs/Saratoga transaction | (54.9 | ) | — | ||||
Loss on sale of assets | — | 0.1 | |||||
Gain on sale of Big Fish Games | (219.5 | ) | — | ||||
Big Fish Games earnout and deferred payments | (4.4 | ) | (2.4 | ) | |||
Game software development amortization | 0.4 | 17.5 | |||||
Other | 2.8 | 1.7 | |||||
Changes in operating assets and liabilities, net of businesses acquired and dispositions: | |||||||
Game software development | (0.3 | ) | (22.1 | ) | |||
Income taxes | 13.8 | (27.4 | ) | ||||
Deferred revenue | (10.3 | ) | 17.2 | ||||
Other assets and liabilities | 6.0 | (4.1 | ) | ||||
Net cash provided by operating activities | 197.8 | 215.1 | |||||
Cash flows from investing activities: | |||||||
Capital maintenance expenditures | (29.6 | ) | (33.3 | ) | |||
Capital project expenditures | (119.8 | ) | (83.6 | ) | |||
Acquisition of businesses, net of cash | 13.1 | (24.2 | ) | ||||
Investment in joint ventures | — | (24.0 | ) | ||||
Proceeds from sale of Big Fish Games | 970.7 | — | |||||
Receivable from escrow | — | 13.6 | |||||
Other | (10.3 | ) | (2.1 | ) | |||
Net cash provided by (used in) investing activities | 824.1 | (153.6 | ) | ||||
Cash flows from financing activities: | |||||||
Proceeds from borrowings under long-term debt obligations | 135.0 | 2,050.4 | |||||
Repayments of borrowings under long-term debt obligations | (381.0 | ) | (1,835.8 | ) | |||
Payment of dividends | (23.7 | ) | (21.5 | ) | |||
Repurchase of common stock | (547.0 | ) | (190.9 | ) | |||
Common stock issued | 1.5 | 2.1 | |||||
Repayment of Ocean Downs debt | (54.7 | ) | — | ||||
Big Fish Games earnout and deferred payments | (58.2 | ) | (31.8 | ) | |||
Call premium on 2021 Senior Notes | — | (16.1 | ) | ||||
Debt issuance costs | (0.8 | ) | (14.4 | ) | |||
Other | (4.4 | ) | (1.5 | ) | |||
Net cash used in financing activities | (933.3 | ) | (59.5 | ) | |||
Net increase (decrease) in cash, cash equivalents and restricted cash | 88.6 | 2.0 | |||||
Effect of exchange rate changes on cash | (0.8 | ) | 0.5 | ||||
Cash, cash equivalents and restricted cash, beginning of year | 85.5 | 83.0 | |||||
Cash, cash equivalents and restricted cash, end of year | $ | 173.3 | $ | 85.5 |
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
(in millions, except per common share data) | 2018 | 2017 | 2018 | 2017 | |||||||||||
GAAP net income | $ | 11.4 | $ | 38.2 | $ | 352.8 | $ | 140.5 | |||||||
Adjustments, continuing operations: | |||||||||||||||
Gain on Ocean Downs/Saratoga transaction | — | — | (54.9 | ) | — | ||||||||||
Transaction expense, net | 1.4 | 0.4 | 10.3 | 2.3 | |||||||||||
Pre-opening expense included in other investments | 0.9 | 0.1 | 4.8 | 0.5 | |||||||||||
Impairment of tangible and other intangible assets | — | 21.7 | — | 21.7 | |||||||||||
Loss on extinguishment of debt | — | 20.7 | — | 20.7 | |||||||||||
Other | (1.2 | ) | 2.6 | (1.0 | ) | 1.9 | |||||||||
Income tax impact on net income adjustments(a) | 0.2 | (17.1 | ) | 9.5 | (17.7 | ) | |||||||||
Non-recurring non-cash income benefit of the Tax Act | — | (57.7 | ) | — | (57.7 | ) | |||||||||
Total adjustments, continuing operations | 1.3 | (29.3 | ) | (31.3 | ) | (28.3 | ) | ||||||||
Gain on Big Fish Transaction, net of tax(b) | — | — | (168.3 | ) | — | ||||||||||
Big Fish Games net income(b) | (4.1 | ) | (3.8 | ) | (1.9 | ) | (18.1 | ) | |||||||
Total adjustments | (2.8 | ) | (33.1 | ) | (201.5 | ) | (46.4 | ) | |||||||
Adjusted net income | $ | 8.6 | $ | 5.1 | $ | 151.3 | $ | 94.1 | |||||||
Adjusted diluted EPS | $ | 0.21 | $ | 0.11 | $ | 3.64 | $ | 1.96 | |||||||
Weighted average shares outstanding - Diluted | 41.0 | 46.6 | 41.6 | 48.0 |
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net revenue from external customers: | |||||||||||||||
Racing: | |||||||||||||||
Churchill Downs | $ | 15.6 | $ | 14.2 | $ | 181.0 | $ | 161.3 | |||||||
Arlington | 5.3 | 5.7 | 55.0 | 57.2 | |||||||||||
Fair Grounds | 9.0 | 8.8 | 35.8 | 36.3 | |||||||||||
Calder Racing | 0.6 | 0.6 | 2.5 | 2.5 | |||||||||||
Total Racing | 30.5 | 29.3 | 274.3 | 257.3 | |||||||||||
Online Wagering | 61.5 | 57.2 | 290.2 | 255.6 | |||||||||||
Casino: | |||||||||||||||
Oxford | 22.7 | 21.6 | 102.0 | 90.8 | |||||||||||
Calder | 23.1 | 22.8 | 96.1 | 85.4 | |||||||||||
Fair Grounds Slots and VSI | 20.3 | 18.3 | 81.9 | 74.8 | |||||||||||
Riverwalk | 13.7 | 12.5 | 54.5 | 48.2 | |||||||||||
Harlow’s | 12.3 | 11.7 | 50.2 | 50.0 | |||||||||||
Ocean Downs | 17.8 | — | 25.9 | — | |||||||||||
Saratoga | — | 0.3 | 0.6 | 1.3 | |||||||||||
Total Casino | 109.9 | 87.2 | 411.2 | 350.5 | |||||||||||
Other Investments | 17.1 | 5.2 | 33.3 | 19.2 | |||||||||||
Net revenue from external customers | $ | 219.0 | $ | 178.9 | $ | 1,009.0 | $ | 882.6 | |||||||
Intercompany net revenue: | |||||||||||||||
Racing: | |||||||||||||||
Churchill Downs | $ | 2.0 | $ | 1.8 | $ | 12.7 | $ | 11.4 | |||||||
Arlington | 1.1 | 1.2 | 6.7 | 6.3 | |||||||||||
Fair Grounds | 0.5 | 0.6 | 1.6 | 1.6 | |||||||||||
Calder Racing | — | — | 0.1 | — | |||||||||||
Total Racing | 3.6 | 3.6 | 21.1 | 19.3 | |||||||||||
Online Wagering | 0.2 | 0.3 | 1.3 | 1.1 | |||||||||||
Other Investments | 0.9 | 0.8 | 4.5 | 4.5 | |||||||||||
Eliminations | (4.7 | ) | (4.7 | ) | (26.9 | ) | (24.9 | ) | |||||||
Intercompany net revenue | $ | — | $ | — | $ | — | $ | — |
Three Months Ended December 31, 2018 | |||||||||||||||||||||||||||
(in millions) | Racing | Online Wagering | Casino | Other Investments | Corporate | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 34.1 | 61.7 | $ | 109.9 | $ | 18.0 | $ | — | $ | (4.7 | ) | $ | 219.0 | |||||||||||||
Taxes & purses | (11.6 | ) | (3.0 | ) | (38.1 | ) | (3.6 | ) | — | — | (56.3 | ) | |||||||||||||||
Marketing & advertising | (0.9 | ) | (1.5 | ) | (4.6 | ) | (0.8 | ) | — | — | (7.8 | ) | |||||||||||||||
Salaries & benefits | (9.5 | ) | (2.6 | ) | (16.8 | ) | (4.8 | ) | — | — | (33.7 | ) | |||||||||||||||
Content expense | (3.2 | ) | (32.7 | ) | (0.3 | ) | — | — | 4.3 | (31.9 | ) | ||||||||||||||||
SG&A expense | (5.0 | ) | (3.5 | ) | (8.9 | ) | (2.7 | ) | (3.3 | ) | 0.2 | (23.2 | ) | ||||||||||||||
Other operating expense | (10.2 | ) | (4.5 | ) | (12.5 | ) | (3.3 | ) | 0.1 | 0.2 | (30.2 | ) | |||||||||||||||
Other income | 0.2 | — | 6.9 | — | — | — | 7.1 | ||||||||||||||||||||
Adjusted EBITDA | $ | (6.1 | ) | $ | 13.9 | $ | 35.6 | $ | 2.8 | $ | (3.2 | ) | $ | — | $ | 43.0 |
Three Months Ended December 31, 2017 | |||||||||||||||||||||||||||
(in millions) | Racing | Online Wagering | Casino | Other Investments | Corporate(a) | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 32.9 | $ | 57.5 | $ | 87.2 | $ | 6.0 | $ | — | $ | (4.7 | ) | $ | 178.9 | ||||||||||||
Taxes & purses | (11.1 | ) | (3.1 | ) | (29.3 | ) | — | — | — | (43.5 | ) | ||||||||||||||||
Marketing & advertising | (1.0 | ) | (1.5 | ) | (3.0 | ) | — | — | 0.1 | (5.4 | ) | ||||||||||||||||
Salaries & benefits | (9.3 | ) | (2.8 | ) | (13.2 | ) | (2.9 | ) | — | — | (28.2 | ) | |||||||||||||||
Content expense | (3.5 | ) | (28.5 | ) | — | — | — | 4.3 | (27.7 | ) | |||||||||||||||||
SG&A expense | (4.9 | ) | (3.5 | ) | (6.3 | ) | (1.0 | ) | (3.7 | ) | — | (19.4 | ) | ||||||||||||||
Other operating expense | (9.5 | ) | (5.0 | ) | (10.6 | ) | (1.5 | ) | (0.1 | ) | 0.3 | (26.4 | ) | ||||||||||||||
Other income | 0.2 | — | 8.9 | 0.1 | 0.3 | — | 9.5 | ||||||||||||||||||||
Adjusted EBITDA | $ | (6.2 | ) | $ | 13.1 | $ | 33.7 | $ | 0.7 | $ | (3.5 | ) | $ | — | $ | 37.8 |
Twelve Months Ended December 31, 2018 | |||||||||||||||||||||||||||
(in millions) | Racing | Online Wagering | Casino | Other Investments | Corporate | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 295.4 | $ | 291.5 | $ | 411.2 | $ | 37.8 | $ | — | $ | (26.9 | ) | $ | 1,009.0 | ||||||||||||
Taxes & purses | (67.3 | ) | (15.2 | ) | (139.9 | ) | (4.3 | ) | — | — | (226.7 | ) | |||||||||||||||
Marketing & advertising | (6.5 | ) | (6.0 | ) | (14.7 | ) | (1.0 | ) | — | 0.3 | (27.9 | ) | |||||||||||||||
Salaries & benefits | (44.0 | ) | (9.2 | ) | (58.5 | ) | (15.0 | ) | — | — | (126.7 | ) | |||||||||||||||
Content expense | (14.4 | ) | (152.0 | ) | (0.3 | ) | — | — | 24.6 | (142.1 | ) | ||||||||||||||||
SG&A expense | (17.8 | ) | (12.1 | ) | (26.1 | ) | (5.3 | ) | (11.0 | ) | 1.1 | (71.2 | ) | ||||||||||||||
Other operating expense | (53.6 | ) | (24.2 | ) | (45.5 | ) | (7.0 | ) | (0.4 | ) | 0.9 | (129.8 | ) | ||||||||||||||
Other income | 0.6 | — | 43.3 | 0.1 | 0.2 | — | 44.2 | ||||||||||||||||||||
Adjusted EBITDA | $ | 92.4 | $ | 72.8 | $ | 169.5 | $ | 5.3 | $ | (11.2 | ) | $ | — | $ | 328.8 |
Twelve Months Ended December 31, 2017 | |||||||||||||||||||||||||||
(in millions) | Racing | Online Wagering | Casino | Other Investments | Corporate(a) | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 276.6 | $ | 256.7 | $ | 350.5 | $ | 23.7 | $ | — | $ | (24.9 | ) | $ | 882.6 | ||||||||||||
Taxes & purses | (65.4 | ) | (14.7 | ) | (117.0 | ) | — | — | — | (197.1 | ) | ||||||||||||||||
Marketing & advertising | (4.9 | ) | (8.2 | ) | (12.1 | ) | — | — | 0.4 | (24.8 | ) | ||||||||||||||||
Salaries & benefits | (41.7 | ) | (9.9 | ) | (53.2 | ) | (12.0 | ) | — | — | (116.8 | ) | |||||||||||||||
Content expense | (15.2 | ) | (125.0 | ) | — | — | — | 22.4 | (117.8 | ) | |||||||||||||||||
SG&A expense | (16.8 | ) | (12.4 | ) | (22.6 | ) | (3.3 | ) | (12.2 | ) | 1.2 | (66.1 | ) | ||||||||||||||
Other operating expense | (48.9 | ) | (22.1 | ) | (41.6 | ) | (5.1 | ) | (0.5 | ) | 0.9 | (117.3 | ) | ||||||||||||||
Other income | 0.8 | — | 42.0 | 0.4 | 0.3 | — | 43.5 | ||||||||||||||||||||
Adjusted EBITDA | $ | 84.5 | $ | 64.4 | $ | 146.0 | $ | 3.7 | $ | (12.4 | ) | $ | — | $ | 286.2 |
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Reconciliation of Comprehensive Income to Adjusted EBITDA: | |||||||||||||||
Comprehensive income | $ | 11.4 | $ | 37.9 | $ | 353.2 | $ | 140.4 | |||||||
Foreign currency translation, net of tax | (0.2 | ) | 0.2 | (0.6 | ) | 0.1 | |||||||||
Change in pension benefits, net of tax | 0.2 | 0.1 | 0.2 | — | |||||||||||
Net income | 11.4 | 38.2 | 352.8 | 140.5 | |||||||||||
Income from discontinued operations, net of tax | (4.1 | ) | (3.8 | ) | (170.2 | ) | (18.1 | ) | |||||||
Income from continuing operations, net of tax | 7.3 | 34.4 | 182.6 | 122.4 | |||||||||||
Additions: | |||||||||||||||
Depreciation and amortization | 17.8 | 14.0 | 63.6 | 56.0 | |||||||||||
Interest expense | 10.9 | 13.3 | 40.1 | 49.3 | |||||||||||
Loss on extinguishment of debt | — | 20.7 | — | 20.7 | |||||||||||
Income tax (benefit) provision | (0.8 | ) | (77.8 | ) | 51.3 | (19.9 | ) | ||||||||
EBITDA | $ | 35.2 | $ | 4.6 | $ | 337.6 | $ | 228.5 | |||||||
Adjustments to EBITDA: | |||||||||||||||
Selling, general and administrative: | |||||||||||||||
Stock-based compensation expense | 4.6 | 4.3 | 17.7 | 16.0 | |||||||||||
Other, net | (0.8 | ) | 0.5 | (0.6 | ) | 0.5 | |||||||||
Pre-opening expense | 0.9 | 0.2 | 4.8 | 0.5 | |||||||||||
Other income, expense: | |||||||||||||||
Interest, depreciation and amortization expense related to equity investments | 1.7 | 6.1 | 13.9 | 16.7 | |||||||||||
Gain on Ocean Downs/Saratoga transaction | — | — | (54.9 | ) | — | ||||||||||
Transaction expense, net | 1.4 | 0.4 | 10.3 | 2.3 | |||||||||||
Impairment of tangible and other intangible assets | — | 21.7 | — | 21.7 | |||||||||||
Total adjustments to EBITDA | 7.8 | 33.2 | (8.8 | ) | 57.7 | ||||||||||
Adjusted EBITDA | $ | 43.0 | $ | 37.8 | $ | 328.8 | $ | 286.2 | |||||||
Adjusted EBITDA by segment: | |||||||||||||||
Racing | $ | (6.1 | ) | $ | (6.2 | ) | $ | 92.4 | $ | 84.5 | |||||
Online Wagering | 13.9 | 13.1 | 72.8 | 64.4 | |||||||||||
Casino | 35.6 | 33.7 | 169.5 | 146.0 | |||||||||||
Other Investments | 2.8 | 0.7 | 5.3 | 3.7 | |||||||||||
Corporate(d) | (3.2 | ) | (3.5 | ) | (11.2 | ) | (12.4 | ) | |||||||
Adjusted EBITDA | $ | 43.0 | $ | 37.8 | $ | 328.8 | $ | 286.2 |
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Corporate allocated expense: | |||||||||||||||
Racing | $ | (2.3 | ) | $ | (1.8 | ) | $ | (7.0 | ) | $ | (6.1 | ) | |||
Online Wagering | (2.0 | ) | (1.6 | ) | (6.2 | ) | (5.5 | ) | |||||||
Casino | (3.0 | ) | (2.2 | ) | (9.3 | ) | (7.5 | ) | |||||||
Other Investments | (1.3 | ) | (0.5 | ) | (2.4 | ) | (1.5 | ) | |||||||
Corporate allocated expense | 8.6 | 6.1 | 24.9 | 20.6 | |||||||||||
Total Corporate allocated expense | $ | — | $ | — | $ | — | $ | — |
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net revenue | $ | 45.1 | $ | 102.8 | $ | 367.2 | $ | 443.7 | |||||||
Operating and SG&A expense | 31.4 | 82.0 | 271.9 | 345.3 | |||||||||||
Depreciation and amortization | 3.2 | 9.8 | 22.2 | 25.9 | |||||||||||
Operating income | 10.5 | 11.0 | 73.1 | 72.5 | |||||||||||
Interest and other expense, net | (0.6 | ) | (3.8 | ) | (6.3 | ) | (8.5 | ) | |||||||
Net income | $ | 9.9 | $ | 7.2 | $ | 66.8 | $ | 64.0 |
December 31, | |||||||
(in millions) | 2018 | 2017 | |||||
Assets | |||||||
Current assets | $ | 24.0 | $ | 64.5 | |||
Property and equipment, net | 95.7 | 234.6 | |||||
Other assets, net | 106.7 | 236.5 | |||||
Total assets | $ | 226.4 | $ | 535.6 | |||
Liabilities and Members' Equity | |||||||
Current liabilities | $ | 21.2 | $ | 100.3 | |||
Long-term debt | — | 110.1 | |||||
Other liabilities | — | 0.1 | |||||
Members' equity | 205.2 | 325.1 | |||||
Total liabilities and members' equity | $ | 226.4 | $ | 535.6 |
Three Months Ended December 31, | Years Ended December 31, | ||||||||||||||
(in millions) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Net revenue | $ | 44.3 | $ | 39.0 | $ | 176.9 | $ | 165.7 | |||||||
Operating and SG&A expense | 30.6 | 27.8 | 122.0 | 117.2 | |||||||||||
Depreciation and amortization | 3.2 | 3.3 | 13.6 | 12.8 | |||||||||||
Operating income | 10.5 | 7.9 | 41.3 | 35.7 | |||||||||||
Interest and other expense, net | (0.3 | ) | (0.5 | ) | (1.5 | ) | (2.4 | ) | |||||||
Net income | $ | 10.2 | $ | 7.4 | $ | 39.8 | $ | 33.3 |
December 31, | |||||||
(in millions) | 2018 | 2017 | |||||
Assets | |||||||
Current assets | $ | 22.9 | $ | 18.1 | |||
Property and equipment, net | 95.4 | 103.5 | |||||
Other assets, net | 106.7 | 106.6 | |||||
Total assets | $ | 225.0 | $ | 228.2 | |||
Liabilities and Members' Equity | |||||||
Current liabilities | $ | 20.8 | $ | 19.0 | |||
Long-term debt | — | 7.1 | |||||
Other liabilities | — | 0.1 | |||||
Members' equity | 204.2 | 202.0 | |||||
Total liabilities and members' equity | $ | 225.0 | $ | 228.2 |