Third Quarter 2020 Highlights/Update on Operations
- Net revenue of
$337.8 million , up 10% over the prior year quarter - Net income(a) of
$43.2 million compared to$14.8 million in the prior year quarter- Adjusted net income(a) of
$47.8 million , compared to$22.3 million in the prior year quarter
- Adjusted net income(a) of
- Adjusted EBITDA of
$121.9 million , up 39% compared to$88.0 million in the prior year quarter - Ran the 146th Kentucky Oaks and Derby on
September 4th and 5th - TwinSpires delivered record revenue of
$116.0 million , up 77% over the prior year quarter - Maintained strong margins in our wholly-owned casinos
Opened Oak Grove Racing ,Gaming & Hotel inOak Grove, Kentucky Opened Newport Racing & Gaming inNewport, Kentucky
(a) Reflects amounts attributable to CDI.
CONSOLIDATED RESULTS | Third Quarter | ||||||
(in millions, except per share data) | 2020 | 2019 | |||||
Net revenue | $ | 337.8 | $ | 306.3 | |||
Net income(a) | $ | 43.2 | $ | 14.8 | |||
Diluted EPS(a) | $ | 1.08 | $ | 0.36 | |||
Adjusted net income(a)(b) | $ | 47.8 | $ | 22.3 | |||
Adjusted diluted EPS(a)(b) | $ | 1.19 | $ | 0.55 | |||
Adjusted EBITDA(b) | $ | 121.9 | $ | 88.0 | |||
(a) Reflects amounts attributable to CDI. | |||||||
(b) These are non-GAAP measures. See explanation of non-GAAP measures below. |
"Our properties' extensive operating protocols have been extremely effective and have allowed us to operate safely during the pandemic," said
Third Quarter 2020 Net Income Attributable to CDI
The Company's third quarter of 2020 net income attributable to CDI was
The following items impacted the comparability of the Company's third quarter net income from continuing operations:
$3 .3 million after-tax expense decrease related to our equity portion of the non-cash change in fair value of Midwest Gaming's (the parent company ofRivers Des Plaines ) interest rate swaps;$3.0 million after-tax decrease in expenses due to legal reserves in the prior year quarter that did not recur in the current year quarter; and$0 .5 million non-cash tax impact related to the re-measurement of our net deferred tax liabilities in the third quarter of 2019 that did not recur in the current year quarter based on an increase in revenue related to states with higher tax rates.- Partially offset by a
$4.3 million after-tax increase in higher transaction, pre-opening and other expenses.
Excluding these items, net income from continuing operations increased
$27 .6 million after-tax increase driven by the results of our operations and equity income from our unconsolidated affiliates.- Partially offset by
$2 .2 million after-tax increase in interest expense associated with higher outstanding debt balances.
COVID-19 Update
The supplemental information in this release provides additional detail on the temporary closures and the respective reopening dates by segment and property for our Company as a result of the COVID-19 pandemic. As of
Our third quarter of 2020 financial results were materially impacted by the rescheduling of the 146th Kentucky Oaks and Derby from the second quarter of 2020 to the third quarter of 2020 without spectators, by the temporary suspended operations at certain properties, and continued restrictions at the properties that have reopened.
On
Effective
The Company also invested
BetAmerica Update
On
In
Segment Results
The summaries below present net revenue from external customers and intercompany revenue from each of our reportable segments:
Churchill Downs | Third Quarter | ||||||
(in millions) | 2020 | 2019 | |||||
Net revenue | $ | 68.0 | $ | 32.7 | |||
Adjusted EBITDA | 23.9 | 5.2 |
For the third quarter of 2020, net revenue increased
Adjusted EBITDA increased
Online Wagering | Third Quarter | ||||||
(in millions) | 2020 | 2019 | |||||
Net revenue | $ | 126.4 | $ | 70.4 | |||
Adjusted EBITDA | 31.9 | 15.0 |
For the third quarter of 2020, net revenue increased
Our online sports betting and iGaming net revenues increased
Adjusted EBITDA increased
Gaming | Third Quarter | ||||||
(in millions) | 2020 | 2019 | |||||
Net revenue | $ | 134.9 | $ | 178.6 | |||
Adjusted EBITDA | 75.4 | 71.7 |
For the third quarter of 2020, net revenue decreased
Adjusted EBITDA increased
All Other
For the third quarter of 2020, All Other Adjusted EBITDA decreased
Annual Dividend
In
Conference Call
A conference call regarding this news release is scheduled for
Use of Non-GAAP Measures
In addition to the results provided in accordance with GAAP, the Company also uses non-GAAP measures, including adjusted net income, adjusted diluted EPS, EBITDA (earnings before interest, taxes, depreciation and amortization) and Adjusted EBITDA.
The Company uses non-GAAP measures as a key performance measure of the results of operations for purposes of evaluating performance internally. These measures facilitate comparison of operating performance between periods and help investors to better understand the operating results of the Company by excluding certain items that may not be indicative of the Company's core business or operating results. The Company believes the use of these measures enables management and investors to evaluate and compare, from period to period, the Company’s operating performance in a meaningful and consistent manner. The non-GAAP measures are a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP, and should not be considered as an alternative to, or more meaningful than, net income or diluted EPS (as determined in accordance with GAAP) as a measure of our operating results.
We use Adjusted EBITDA to evaluate segment performance, develop strategy and allocate resources. We utilize the Adjusted EBITDA metric to provide a more accurate measure of our core operating results and enable management and investors to evaluate and compare from period to period our operating performance in a meaningful and consistent manner. 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. Our calculation of Adjusted EBITDA may be different from the calculation used by other companies and, therefore, comparability may be limited.
Adjusted net income and adjusted diluted EPS exclude discontinued operations net income or loss; net income or loss attributable to noncontrolling interest; changes in fair value for interest rate swaps related to Midwest Gaming; recapitalization costs related to the Midwest Gaming transaction; transaction expense, which includes acquisition and disposition related charges, Calder racing exit costs, as well as legal, accounting, and other deal-related expense; pre-opening expense; and certain other gains, charges, recoveries, and expenses.
Adjusted EBITDA includes the Company's portion of EBITDA from our equity investments.
Adjusted EBITDA excludes:
- Transaction expense, net which includes:
- Acquisition and disposition related charges;
- Calder racing exit costs; and
- Other transaction expense, including legal, accounting, and other deal-related expense;
- Stock-based compensation expense;
- Midwest Gaming's impact on our investments in unconsolidated affiliates from:
- The impact of changes in fair value of interest rate swaps; and
- Recapitalization and transaction costs;
- Asset impairments;
- Gain on
Ocean Downs /Saratoga Transaction; - Legal reserves;
- Pre-opening expense; and
- Other charges, recoveries and expenses
For segment reporting, Adjusted EBITDA includes intercompany revenue and expense totals that are eliminated in the condensed consolidated statements of comprehensive (loss) income. Refer to the reconciliation of comprehensive income to Adjusted EBITDA included herewith for additional information.
About
Certain statements made in this news release contain various “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “seek,” “should,” “will,” and similar words or similar expressions (or negative versions of such words or expressions).
Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors, among others, that may materially affect actual results or outcomes include the following: the impact of the novel coronavirus (COVID-19) pandemic and related economic matters on our results of operations, financial conditions and prospects; the effect of economic conditions on our consumers' confidence and discretionary spending or our access to credit; additional or increased taxes and fees; public perceptions or lack of confidence in the integrity of our business or any deterioration in our reputation; loss of key or highly skilled personnel; restrictions in our debt facilities limiting our flexibility to operate our business; general risks related to real estate ownership, including fluctuations in market values and environmental regulations; catastrophic events and system failures disrupting our operations; online security risk, including cyber-security breaches; inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events; increases in insurance costs and inability to obtain similar insurance coverage in the future; inability to identify and complete acquisition, expansion or divestiture projects, on time, on budget or as planned; difficulty in integrating recent or future acquisitions into our operations; costs and uncertainties relating to the development of new venues and expansion of existing facilities; risks associated with equity investments, strategic alliances and other third-party agreements; inability to respond to rapid technological changes in a timely manner; inadvertent infringement of the intellectual property of others; inability to protect our own intellectual property rights; payment-related risks, such as risk associated with fraudulent credit card and debit card use; compliance with the Foreign Corrupt Practices Act or applicable money-laundering regulations; risks related to pending or future legal proceedings and other actions; inability to negotiate agreements with industry constituents, including horsemen and other racetracks; work stoppages and labor issues; changes in consumer preferences, attendance, wagering and sponsorship with respect to
We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||||||
(in millions, except per common share data) | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
Net revenue: | |||||||||||||||||||
Churchill Downs | $ | 60.8 | $ | 31.4 | $ | 107.6 | $ | 234.6 | |||||||||||
Online Wagering | 125.9 | 70.2 | 314.4 | 228.9 | |||||||||||||||
Gaming | 134.8 | 178.3 | 319.7 | 524.7 | |||||||||||||||
All Other | 16.3 | 26.4 | 34.1 | 60.9 | |||||||||||||||
Total net revenue | 337.8 | 306.3 | 775.8 | 1,049.1 | |||||||||||||||
Operating expense: | |||||||||||||||||||
Churchill Downs | 48.3 | 30.8 | 106.0 | 127.8 | |||||||||||||||
Online Wagering | 83.5 | 52.2 | 208.2 | 159.3 | |||||||||||||||
Gaming | 96.7 | 137.3 | 267.1 | 395.5 | |||||||||||||||
All Other | 20.5 | 22.9 | 53.2 | 59.9 | |||||||||||||||
Selling, general and administrative expense | 38.8 | 34.4 | 85.3 | 89.4 | |||||||||||||||
Impairment of intangible assets | — | — | 17.5 | — | |||||||||||||||
Transaction expense, net | 0.5 | 0.9 | 1.0 | 5.0 | |||||||||||||||
Total operating expense | 288.3 | 278.5 | 738.3 | 836.9 | |||||||||||||||
Operating income | 49.5 | 27.8 | 37.5 | 212.2 | |||||||||||||||
Other income (expense): | |||||||||||||||||||
Interest expense, net | (19.7 | ) | (18.9 | ) | (59.3 | ) | (52.0 | ) | |||||||||||
Equity in income of unconsolidated affiliates | 27.6 | 14.1 | 13.2 | 27.7 | |||||||||||||||
Miscellaneous, net | (0.4 | ) | 0.2 | (0.1 | ) | 0.6 | |||||||||||||
Total other income (expense) | 7.5 | (4.6 | ) | (46.2 | ) | (23.7 | ) | ||||||||||||
Income (loss) from continuing operations before provision for income taxes | 57.0 | 23.2 | (8.7 | ) | 188.5 | ||||||||||||||
Income tax (provision) benefit | (13.9 | ) | (8.0 | ) | 5.6 | (53.1 | ) | ||||||||||||
Income (loss) from continuing operations, net of tax | 43.1 | 15.2 | (3.1 | ) | 135.4 | ||||||||||||||
Loss from discontinued operations, net of tax | — | (0.4 | ) | (96.1 | ) | (1.9 | ) | ||||||||||||
Net income (loss) | 43.1 | 14.8 | (99.2 | ) | 133.5 | ||||||||||||||
Net loss attributable to noncontrolling interest | (0.1 | ) | — | (0.2 | ) | — | |||||||||||||
Net income (loss) and comprehensive income (loss) attributable to CDI | $ | 43.2 | $ | 14.8 | $ | (99.0 | ) | $ | 133.5 | ||||||||||
Net income (loss) per common share data - basic: | |||||||||||||||||||
Continuing operations | $ | 1.09 | $ | 0.38 | $ | (0.07 | ) | $ | 3.37 | ||||||||||
Discontinued operations | $ | — | $ | (0.01 | ) | $ | (2.43 | ) | $ | (0.05 | ) | ||||||||
Net income (loss) per common share data - basic | $ | 1.09 | $ | 0.37 | $ | (2.50 | ) | $ | 3.32 | ||||||||||
Net income (loss) per common share data - diluted: | |||||||||||||||||||
Continuing operations | $ | 1.08 | $ | 0.37 | $ | (0.07 | ) | $ | 3.33 | ||||||||||
Discontinued operations | $ | — | $ | (0.01 | ) | $ | (2.43 | ) | $ | (0.05 | ) | ||||||||
Net income (loss) per common share data - diluted | $ | 1.08 | $ | 0.36 | $ | (2.50 | ) | $ | 3.28 | ||||||||||
Weighted average shares outstanding: | |||||||||||||||||||
Basic | 39.5 | 40.0 | 39.6 | 40.2 | |||||||||||||||
Diluted | 40.1 | 40.7 | 39.6 | 40.7 |
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in millions) | |||||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 622.0 | $ | 96.2 | |||||
Restricted cash | 57.6 | 46.3 | |||||||
Accounts receivable, net | 53.0 | 37.3 | |||||||
Income taxes receivable | 40.7 | 14.5 | |||||||
Other current assets | 33.3 | 26.9 | |||||||
Total current assets | 806.6 | 221.2 | |||||||
Property and equipment, net | 1,081.8 | 937.3 | |||||||
Investment in and advances to unconsolidated affiliates | 634.0 | 634.5 | |||||||
366.8 | 367.1 | ||||||||
Other intangible assets, net | 351.8 | 369.8 | |||||||
Other assets | 22.0 | 21.1 | |||||||
Total assets | $ | 3,263.0 | $ | 2,551.0 | |||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable | $ | 108.2 | $ | 57.8 | |||||
Accrued expenses and other current liabilities | 192.4 | 173.4 | |||||||
Current deferred revenue | 42.4 | 42.5 | |||||||
Current maturities of long-term debt | 4.0 | 4.0 | |||||||
Dividends payable | — | 23.5 | |||||||
Current liabilities of discontinued operations | 124.0 | — | |||||||
Total current liabilities | 471.0 | 301.2 | |||||||
Long-term debt, net of current maturities and loan origination fees | 1,076.3 | 384.0 | |||||||
Notes payable, net of debt issuance costs | 1,087.3 | 1,085.9 | |||||||
Non-current deferred revenue | 14.2 | 16.7 | |||||||
Deferred income taxes | 205.4 | 212.8 | |||||||
Other liabilities | 36.6 | 39.4 | |||||||
Total liabilities | 2,890.8 | 2,040.0 | |||||||
Commitments and contingencies | |||||||||
Shareholders' equity: | |||||||||
Preferred stock | — | — | |||||||
Common stock | 15.5 | — | |||||||
Retained earnings | 357.6 | 509.2 | |||||||
Accumulated other comprehensive loss | (0.9 | ) | (0.9 | ) | |||||
Total CDI shareholders' equity | 372.2 | 508.3 | |||||||
Noncontrolling interest | 0.0 | 2.7 | |||||||
Total shareholder's equity | 372.2 | 511.0 | |||||||
Total liabilities and shareholders' equity | $ | 3,263.0 | $ | 2,551.0 |
CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
Nine Months Ended | |||||||||
(in millions) | 2020 | 2019 | |||||||
Cash flows from operating activities: | |||||||||
Net (loss) income | $ | (99.2 | ) | $ | 133.5 | ||||
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | |||||||||
Depreciation and amortization | 66.5 | 64.3 | |||||||
Distributions from unconsolidated affiliates | 12.8 | 24.7 | |||||||
Equity in income of unconsolidated affiliates | (13.2 | ) | (27.7 | ) | |||||
Stock-based compensation | 17.3 | 17.6 | |||||||
Deferred income taxes | (7.4 | ) | 22.0 | ||||||
Impairment of intangible assets | 17.5 | — | |||||||
Amortization of operating lease assets | 3.7 | 3.3 | |||||||
Other | 3.5 | 2.0 | |||||||
Changes in operating assets and liabilities, net of business acquisitions and dispositions: | |||||||||
Income taxes | (26.2 | ) | 15.5 | ||||||
Deferred revenue | (1.9 | ) | (36.0 | ) | |||||
Other assets and liabilities | 163.9 | 41.0 | |||||||
Net cash provided by operating activities | 137.3 | 260.2 | |||||||
Cash flows from investing activities: | |||||||||
Capital maintenance expenditures | (18.2 | ) | (37.7 | ) | |||||
Capital project expenditures | (191.9 | ) | (53.3 | ) | |||||
Acquisition of businesses, net of cash acquired | — | (172.1 | ) | ||||||
Investments in and advances to unconsolidated affiliates | — | (410.1 | ) | ||||||
Distributions of capital from unconsolidated affiliates | — | 5.8 | |||||||
Acquisition of gaming licenses | — | (22.1 | ) | ||||||
Other | (2.7 | ) | (1.1 | ) | |||||
Net cash used in investing activities | (212.8 | ) | (690.6 | ) | |||||
Cash flows from financing activities: | |||||||||
Proceeds from borrowings under long-term debt obligations | 726.0 | 1,236.0 | |||||||
Repayments of borrowings under long-term debt obligations | (34.4 | ) | (639.0 | ) | |||||
Payment of dividends | (23.4 | ) | (22.2 | ) | |||||
Repurchase of common stock | (28.4 | ) | (66.8 | ) | |||||
Cash settlement of stock awards | (12.7 | ) | — | ||||||
Taxes paid related to net share settlement of stock awards | (15.1 | ) | (7.7 | ) | |||||
Debt issuance costs | (1.7 | ) | (8.9 | ) | |||||
Other | 2.3 | (0.5 | ) | ||||||
Net cash provided by financing activities | 612.6 | 490.9 | |||||||
Net increase in cash, cash equivalents and restricted cash | 537.1 | 60.5 | |||||||
Cash, cash equivalents and restricted cash, beginning of period | 142.5 | 173.3 | |||||||
Cash, cash equivalents and restricted cash, end of period | $ | 679.6 | $ | 233.8 |
SUPPLEMENTAL INFORMATION
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||
(in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
GAAP net (loss) income attributable to CDI | $ | 43.2 | $ | 14.8 | $ | (99.0 | ) | $ | 133.5 | ||||||
Adjustments, continuing operations: | |||||||||||||||
Changes in fair value of interest rate swaps related to Midwest Gaming | (1.5 | ) | 3.2 | 14.7 | 15.4 | ||||||||||
Recapitalization and transaction costs related to Midwest Gaming | — | — | — | 4.7 | |||||||||||
Transaction, pre-opening, and other expense | 7.5 | 2.1 | 11.5 | 8.6 | |||||||||||
Legal reserves | — | 3.3 | — | 3.6 | |||||||||||
Impairment of intangible assets | — | — | 17.5 | — | |||||||||||
Income tax impact on net income adjustments(a) | (1.4 | ) | (2.0 | ) | (11.9 | ) | (7.9 | ) | |||||||
Re-measurement of net deferred tax liabilities | — | 0.5 | — | 2.7 | |||||||||||
Total adjustments, continuing operations | 4.6 | 7.1 | 31.8 | 27.1 | |||||||||||
— | 0.4 | 96.1 | 1.9 | ||||||||||||
Total adjustments | 4.6 | 7.5 | 127.9 | 29.0 | |||||||||||
Adjusted net income attributable to CDI | $ | 47.8 | $ | 22.3 | $ | 28.9 | $ | 162.5 | |||||||
Adjusted diluted EPS | $ | 1.19 | $ | 0.55 | $ | 0.73 | $ | 4.00 | |||||||
Weighted average shares outstanding - Diluted | 40.1 | 40.7 | 39.6 | 40.7 |
(a) The income tax impact for each adjustment is derived by applying the effective tax rate, including current and deferred income tax expense, based upon the jurisdiction and the nature of the adjustment.
Three Months Ended | Nine Months Ended | ||||||||||||||
(in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Total Handle | |||||||||||||||
$ | 208.2 | $ | 53.4 | $ | 456.2 | $ | 576.4 | ||||||||
TwinSpires(a) | 622.4 | 368.7 | 1,522.3 | 1,142.3 |
(a) Total handle generated by Velocity is not included in total handle from TwinSpires
SUPPLEMENTAL INFORMATION
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||
(in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net revenue from external customers: | |||||||||||||||
Churchill Downs: | |||||||||||||||
$ | 34.9 | $ | 8.9 | $ | 52.4 | $ | 172.2 | ||||||||
Derby City Gaming | 25.9 | 22.5 | 55.2 | 62.4 | |||||||||||
Total Churchill Downs | 60.8 | 31.4 | 107.6 | 234.6 | |||||||||||
Online Wagering: | |||||||||||||||
TwinSpires | 124.1 | 70.2 | 310.6 | 228.8 | |||||||||||
Online Sports Betting and iGaming | 1.8 | — | 3.8 | 0.1 | |||||||||||
Total Online Wagering | 125.9 | 70.2 | 314.4 | 228.9 | |||||||||||
Gaming: | |||||||||||||||
12.2 | 27.2 | 32.4 | 77.4 | ||||||||||||
Calder | 6.5 | 24.4 | 34.0 | 75.4 | |||||||||||
16.0 | 13.6 | 36.1 | 44.1 | ||||||||||||
Harlow’s Casino | 13.0 | 13.3 | 30.3 | 41.9 | |||||||||||
Fair Grounds and VSI | 27.9 | 25.0 | 70.6 | 93.4 | |||||||||||
24.3 | 26.7 | 42.2 | 67.0 | ||||||||||||
27.7 | 38.1 | 57.3 | 104.9 | ||||||||||||
Lady Luck Nemacolin | 7.2 | 10.0 | 16.8 | 20.6 | |||||||||||
Total Gaming | 134.8 | 178.3 | 319.7 | 524.7 | |||||||||||
All Other | 16.3 | 26.4 | 34.1 | 60.9 | |||||||||||
Net revenue from external customers | $ | 337.8 | $ | 306.3 | $ | 775.8 | $ | 1,049.1 | |||||||
Intercompany net revenue: | |||||||||||||||
Churchill Downs | $ | 7.2 | $ | 1.3 | $ | 14.4 | $ | 12.6 | |||||||
Online Wagering | 0.5 | 0.2 | 1.3 | 0.9 | |||||||||||
Gaming | 0.1 | 0.3 | 1.6 | 1.8 | |||||||||||
All Other | 4.0 | 3.4 | 9.9 | 9.0 | |||||||||||
Eliminations | (11.8 | ) | (5.2 | ) | (27.2 | ) | (24.3 | ) | |||||||
Intercompany net revenue | $ | — | $ | — | $ | — | $ | — |
SUPPLEMENTAL INFORMATION
(Unaudited)
Three Months Ended | |||||||||||||||||||||||
(in millions) | Churchill Downs | Online Wagering | Gaming | Total Segments | All Other | Total | |||||||||||||||||
Net revenue from external customers | |||||||||||||||||||||||
Pari-mutuel: | |||||||||||||||||||||||
Live and simulcast racing | $ | 14.3 | $ | 119.0 | $ | 4.6 | $ | 137.9 | $ | 9.0 | $ | 146.9 | |||||||||||
Historical racing(a) | 24.9 | — | — | 24.9 | 2.2 | 27.1 | |||||||||||||||||
Racing event-related services | 19.1 | — | 0.7 | 19.8 | 0.2 | 20.0 | |||||||||||||||||
Gaming(a) | — | 1.6 | 123.6 | 125.2 | — | 125.2 | |||||||||||||||||
Other(a) | 2.5 | 5.3 | 5.9 | 13.7 | 4.9 | 18.6 | |||||||||||||||||
Total | $ | 60.8 | $ | 125.9 | $ | 134.8 | $ | 321.5 | $ | 16.3 | $ | 337.8 |
Three Months Ended | |||||||||||||||||||||||
(in millions) | Churchill Downs | Online Wagering | Gaming | Total Segments | All Other | Total | |||||||||||||||||
Net revenue from external customers | |||||||||||||||||||||||
Pari-mutuel: | |||||||||||||||||||||||
Live and simulcast racing | $ | 5.4 | $ | 67.1 | $ | 6.2 | $ | 78.7 | $ | 15.0 | $ | 93.7 | |||||||||||
Historical racing(a) | 21.3 | — | — | 21.3 | — | 21.3 | |||||||||||||||||
Racing event-related services | 1.6 | — | 0.8 | 2.4 | 3.1 | 5.5 | |||||||||||||||||
Gaming(a) | — | — | 153.2 | 153.2 | — | 153.2 | |||||||||||||||||
Other(a) | 3.1 | 3.1 | 18.1 | 24.3 | 8.3 | 32.6 | |||||||||||||||||
Total | $ | 31.4 | $ | 70.2 | $ | 178.3 | $ | 279.9 | $ | 26.4 | $ | 306.3 |
(a) Food and beverage, hotel, and other services furnished to customers for free as an inducement to wager or through the redemption of our customers' loyalty points are recorded at the estimated standalone selling prices in Other revenue with a corresponding offset recorded as a reduction in historical racing pari-mutuel revenue for historical racing machines or gaming revenue for our casino properties. These amounts were
Nine Months Ended | |||||||||||||||||||||||
(in millions) | Churchill Downs | Online Wagering | Gaming | Total Segments | All Other | Total | |||||||||||||||||
Net revenue from external customers | |||||||||||||||||||||||
Pari-mutuel: | |||||||||||||||||||||||
Live and simulcast racing | $ | 30.2 | $ | 298.5 | $ | 16.2 | $ | 344.9 | $ | 19.7 | $ | 364.6 | |||||||||||
Historical racing(b) | 52.6 | — | — | 52.6 | 2.2 | 54.8 | |||||||||||||||||
Racing event-related services | 19.6 | — | 2.7 | 22.3 | 0.3 | 22.6 | |||||||||||||||||
Gaming(b) | — | 3.8 | 278.5 | 282.3 | — | 282.3 | |||||||||||||||||
Other(b) | 5.2 | 12.1 | 22.3 | 39.6 | 11.9 | 51.5 | |||||||||||||||||
Total | $ | 107.6 | $ | 314.4 | $ | 319.7 | $ | 741.7 | $ | 34.1 | $ | 775.8 |
Nine Months Ended | |||||||||||||||||||||||
(in millions) | Churchill Downs | Online Wagering | Gaming | Total Segments | All Other | Total | |||||||||||||||||
Net revenue from external customers | |||||||||||||||||||||||
Pari-mutuel: | |||||||||||||||||||||||
Live and simulcast racing | $ | 48.1 | $ | 218.7 | $ | 23.9 | $ | 290.7 | $ | 34.7 | $ | 325.4 | |||||||||||
Historical racing(b) | 58.7 | — | — | $ | 58.7 | — | 58.7 | ||||||||||||||||
Racing event-related services | 115.0 | — | 3.1 | $ | 118.1 | 5.3 | 123.4 | ||||||||||||||||
Gaming(b) | — | 0.1 | 442.4 | $ | 442.5 | — | 442.5 | ||||||||||||||||
Other(b) | 12.8 | 10.1 | 55.3 | $ | 78.2 | 20.9 | 99.1 | ||||||||||||||||
Total | $ | 234.6 | $ | 228.9 | $ | 524.7 | $ | 988.2 | $ | 60.9 | $ | 1,049.1 |
(b) Food and beverage, hotel, and other services furnished to customers for free as an inducement to wager or through the redemption of our customers' loyalty points are recorded at the estimated standalone selling prices in Other revenue with a corresponding offset recorded as a reduction in historical racing pari-mutuel revenue for HRMs or gaming revenue for our casino properties. These amounts were
SUPPLEMENTAL INFORMATION
(Unaudited)
Adjusted EBITDA by segment is comprised of the following:
Three Months Ended | |||||||||||||||||||||||||||
(in millions) | Churchill Downs | Online Wagering | Gaming | Total Segments | All Other | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 68.0 | $ | 126.4 | $ | 134.9 | $ | 329.3 | $ | 20.3 | $ | (11.8 | ) | $ | 337.8 | ||||||||||||
Taxes and purses | (19.3 | ) | (8.0 | ) | (51.7 | ) | (79.0 | ) | (2.1 | ) | — | (81.1 | ) | ||||||||||||||
Marketing and advertising | (2.3 | ) | (6.9 | ) | (0.6 | ) | (9.8 | ) | (0.5 | ) | — | (10.3 | ) | ||||||||||||||
Salaries and benefits | (8.4 | ) | (3.1 | ) | (19.1 | ) | (30.6 | ) | (5.6 | ) | — | (36.2 | ) | ||||||||||||||
Content expense | (0.2 | ) | (63.5 | ) | (1.3 | ) | (65.0 | ) | (1.0 | ) | 11.2 | (54.8 | ) | ||||||||||||||
Selling, general and administrative expense | (2.6 | ) | (3.6 | ) | (8.3 | ) | (14.5 | ) | (15.0 | ) | 0.5 | (29.0 | ) | ||||||||||||||
Other operating expense | (11.3 | ) | (9.4 | ) | (14.4 | ) | (35.1 | ) | (5.0 | ) | 0.1 | (40.0 | ) | ||||||||||||||
Other income | — | — | 35.9 | 35.9 | (0.4 | ) | — | 35.5 | |||||||||||||||||||
Adjusted EBITDA | $ | 23.9 | $ | 31.9 | $ | 75.4 | $ | 131.2 | $ | (9.3 | ) | $ | — | $ | 121.9 |
Three Months Ended | |||||||||||||||||||||||||||
(in millions) | Churchill Downs | Online Wagering | Gaming | Total Segments | All Other | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 32.7 | $ | 70.4 | $ | 178.6 | $ | 281.7 | $ | 29.8 | $ | (5.2 | ) | $ | 306.3 | ||||||||||||
Taxes and purses | (10.2 | ) | (4.4 | ) | (71.2 | ) | (85.8 | ) | (5.5 | ) | — | (91.3 | ) | ||||||||||||||
Marketing and advertising | (1.1 | ) | (3.6 | ) | (5.5 | ) | (10.2 | ) | (0.5 | ) | 0.1 | (10.6 | ) | ||||||||||||||
Salaries and benefits | (6.8 | ) | (3.0 | ) | (26.6 | ) | (36.4 | ) | (7.1 | ) | — | (43.5 | ) | ||||||||||||||
Content expense | (0.5 | ) | (36.5 | ) | (1.6 | ) | (38.6 | ) | (1.7 | ) | 4.8 | (35.5 | ) | ||||||||||||||
Selling, general and administrative expense | (2.1 | ) | (1.8 | ) | (7.9 | ) | (11.8 | ) | (12.9 | ) | 0.3 | (24.4 | ) | ||||||||||||||
Other operating expense | (6.9 | ) | (6.1 | ) | (21.2 | ) | (34.2 | ) | (6.0 | ) | — | (40.2 | ) | ||||||||||||||
Other income | 0.1 | — | 27.1 | 27.2 | — | — | 27.2 | ||||||||||||||||||||
Adjusted EBITDA | $ | 5.2 | $ | 15.0 | $ | 71.7 | $ | 91.9 | $ | (3.9 | ) | $ | — | $ | 88.0 |
Nine Months Ended | |||||||||||||||||||||||||||
(in millions) | Churchill Downs | Online Wagering | Gaming | Total Segments | All Other | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 122.0 | $ | 315.7 | $ | 321.3 | $ | 759.0 | $ | 44.0 | $ | (27.2 | ) | $ | 775.8 | ||||||||||||
Taxes and purses | (40.3 | ) | (18.5 | ) | (125.2 | ) | (184.0 | ) | (9.4 | ) | — | (193.4 | ) | ||||||||||||||
Marketing and advertising | (3.7 | ) | (13.3 | ) | (6.3 | ) | (23.3 | ) | (0.6 | ) | 0.2 | (23.7 | ) | ||||||||||||||
Salaries and benefits | (19.5 | ) | (9.6 | ) | (57.6 | ) | (86.7 | ) | (15.2 | ) | — | (101.9 | ) | ||||||||||||||
Content expense | (0.7 | ) | (156.4 | ) | (2.9 | ) | (160.0 | ) | (2.7 | ) | 25.6 | (137.1 | ) | ||||||||||||||
Selling, general and administrative expense | (5.3 | ) | (6.7 | ) | (18.9 | ) | (30.9 | ) | (32.9 | ) | 1.2 | (62.6 | ) | ||||||||||||||
Other operating expense | (22.2 | ) | (25.6 | ) | (45.0 | ) | (92.8 | ) | (14.1 | ) | 0.2 | (106.7 | ) | ||||||||||||||
Other income | — | 0.1 | 57.0 | 57.1 | (0.2 | ) | — | 56.9 | |||||||||||||||||||
Adjusted EBITDA | $ | 30.3 | $ | 85.7 | $ | 122.4 | $ | 238.4 | $ | (31.1 | ) | $ | — | $ | 207.3 |
Nine Months Ended | |||||||||||||||||||||||||||
(in millions) | Churchill Downs | Online Wagering | Gaming | Total Segments | All Other | Eliminations | Total | ||||||||||||||||||||
Net revenue | $ | 247.2 | $ | 229.8 | $ | 526.5 | $ | 1,003.5 | $ | 69.9 | $ | (24.3 | ) | $ | 1,049.1 | ||||||||||||
Taxes and purses | (52.1 | ) | (12.0 | ) | (204.7 | ) | (268.8 | ) | (13.7 | ) | — | (282.5 | ) | ||||||||||||||
Marketing and advertising | (5.8 | ) | (9.1 | ) | (15.7 | ) | (30.6 | ) | (1.1 | ) | 0.3 | (31.4 | ) | ||||||||||||||
Salaries and benefits | (24.5 | ) | (8.2 | ) | (76.5 | ) | (109.2 | ) | (18.5 | ) | — | (127.7 | ) | ||||||||||||||
Content expense | (1.8 | ) | (120.4 | ) | (4.5 | ) | (126.7 | ) | (6.2 | ) | 23.0 | (109.9 | ) | ||||||||||||||
Selling, general and administrative expense | (5.8 | ) | (5.5 | ) | (21.2 | ) | (32.5 | ) | (33.5 | ) | 0.8 | (65.2 | ) | ||||||||||||||
Other operating expense | (28.8 | ) | (20.5 | ) | (62.0 | ) | (111.3 | ) | (14.7 | ) | 0.2 | (125.8 | ) | ||||||||||||||
Other income | 0.1 | — | 70.7 | 70.8 | 0.2 | — | 71.0 | ||||||||||||||||||||
Adjusted EBITDA | $ | 128.5 | $ | 54.1 | $ | 212.6 | $ | 395.2 | $ | (17.6 | ) | $ | — | $ | 377.6 |
SUPPLEMENTAL INFORMATION
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||
(in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Reconciliation of Comprehensive Income (Loss) to Adjusted EBITDA: | |||||||||||||||
Net income (loss) attributable to CDI | $ | 43.2 | $ | 14.8 | $ | (99.0 | ) | $ | 133.5 | ||||||
Net loss attributable to noncontrolling interest | 0.1 | — | 0.2 | — | |||||||||||
Net income (loss) before noncontrolling interest | 43.1 | 14.8 | (99.2 | ) | 133.5 | ||||||||||
Loss from discontinued operations, net of tax | — | 0.4 | 96.1 | 1.9 | |||||||||||
Income (loss) from continuing operations, net of tax | 43.1 | 15.2 | (3.1 | ) | 135.4 | ||||||||||
Additions: | |||||||||||||||
Depreciation and amortization | 22.4 | 22.0 | 66.5 | 64.3 | |||||||||||
Interest expense | 19.7 | 18.9 | 59.3 | 52.0 | |||||||||||
Income tax (benefit) provision | 13.9 | 8.0 | (5.6 | ) | 53.1 | ||||||||||
EBITDA | $ | 99.1 | $ | 64.1 | $ | 117.1 | $ | 304.8 | |||||||
Adjustments to EBITDA: | |||||||||||||||
Selling, general and administrative: | |||||||||||||||
Stock-based compensation expense | $ | 6.9 | $ | 5.5 | $ | 17.3 | $ | 17.6 | |||||||
Legal reserves | — | 3.3 | — | 3.6 | |||||||||||
Other charges | 0.8 | — | 0.7 | — | |||||||||||
Pre-opening expense and other expense | 6.2 | 1.2 | 9.8 | 3.6 | |||||||||||
Impairment of intangible assets | — | — | 17.5 | — | |||||||||||
Transaction expense, net | 0.5 | 0.9 | 1.0 | 5.0 | |||||||||||
Other income, expense: | |||||||||||||||
Interest, depreciation and amortization expense related to equity investments | 9.9 | 9.7 | 29.2 | 22.9 | |||||||||||
Changes in fair value of Midwest Gaming's interest rate swaps | (1.5 | ) | 3.2 | 14.7 | 15.4 | ||||||||||
Midwest Gaming's recapitalization and transactions costs | — | — | — | 4.7 | |||||||||||
Other | — | 0.1 | — | — | |||||||||||
Total adjustments to EBITDA | 22.8 | 23.9 | 90.2 | 72.8 | |||||||||||
Adjusted EBITDA | $ | 121.9 | $ | 88.0 | $ | 207.3 | $ | 377.6 | |||||||
Adjusted EBITDA by segment: | |||||||||||||||
Churchill Downs | $ | 23.9 | $ | 5.2 | $ | 30.3 | $ | 128.5 | |||||||
Online Wagering | 31.9 | 15.0 | 85.7 | 54.1 | |||||||||||
Gaming | 75.4 | 71.7 | 122.4 | 212.6 | |||||||||||
Total segment Adjusted EBITDA | 131.2 | 91.9 | 238.4 | 395.2 | |||||||||||
All Other | (9.3 | ) | (3.9 | ) | (31.1 | ) | (17.6 | ) | |||||||
Total Adjusted EBITDA | $ | 121.9 | $ | 88.0 | $ | 207.3 | $ | 377.6 |
SUPPLEMENTAL OPERATIONAL METRICS
(Unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
(in millions) | 2020 | 2019 | Change | 2020 | 2019 | Change | |||||||||||||||||||
Gaming Segment | |||||||||||||||||||||||||
Revenue | $ | 134.9 | $ | 178.6 | $ | (43.7 | ) | $ | 321.3 | $ | 526.5 | $ | (205.2 | ) | |||||||||||
Adjusted EBITDA | 75.4 | 71.7 | 3.7 | 122.4 | 212.6 | (90.2 | ) | ||||||||||||||||||
Margin | 55.9 | % | 40.1 | % | 15.8 | % | 38.1 | % | 40.4 | % | (2.3 | ) | % | ||||||||||||
Wholly-owned casino margin(a) | 33.2 | % | 28.4 | % | 4.8 | % | 24.2 | % | 29.8 | % | (5.6 | ) | % | ||||||||||||
Same store wholly-owned casino margin(b) | 33.2 | % | 28.4 | % | 4.8 | % | 31.1 | % | 34.2 | % | (3.1 | ) | % |
(a) Wholly-owned casino margin only includes the following casino-related results:
- Calder
- Fair Grounds Slots and VSI
- Harlow's
- Lady Luck Nemacolin
Ocean Downs Oxford Presque Isle - Riverwalk
(b)
SUPPLEMENTAL OPERATIONAL METRICS
(Unaudited)
In response to measures taken to limit the impact of COVID-19 and for the protection of our employees and customers, we temporarily suspended operations at our properties in
Regulatory Restrictions: | Social Distancing Limitations: | |||||||
2020 Date of Closure | 2020 Date of Reopening | Patron Capacity | Slots/HRMs/VLTs | Table Games | ||||
Churchill Downs Segment | ||||||||
Derby City Gaming | 75% | 66% | N/A | |||||
Gaming Segment | ||||||||
N/A | 56% | N/A | ||||||
Fair Grounds Slots | 25% | 75% | N/A | |||||
50% | 75% | N/A | ||||||
50% | 66% | 60% | ||||||
50% | 70% | 60% | ||||||
200 Persons(b) | N/A | N/A | ||||||
Presque Isle Downs and Casino(c) | 50% | 60% | 60% | |||||
50% | 66% | 60% | ||||||
Lady Luck Nemacolin(c) | 50% | 50% | 60% | |||||
Equity Investments | ||||||||
63% | 67% | N/A | ||||||
25% | 75% | 45% | ||||||
All Other Segment | ||||||||
N/A | 75% | 63% | N/A | |||||
N/A | 75% | 100% | N/A |
(a) CDI initially reopened Calder on
(b) In compliance with state requirements,
(c) Presque Isle and Lady Luck Nemacolin have temporary bans on alcohol and smoking on the gaming floor.
(d)
(e)
(f) Dates provided for
SUPPLEMENTAL JOINT VENTURE FINANCIAL STATEMENTS
(Unaudited)
Summarized financial information for our equity investments is comprised of the following:
Summarized Income Statement | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
(in millions) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Net revenue | $ | 148.2 | $ | 160.8 | $ | 292.8 | $ | 416.6 | |||||||
Operating and SG&A expense | 86.1 | 113.7 | 194.1 | 293.8 | |||||||||||
Depreciation and amortization | 4.3 | 3.6 | 12.6 | 9.1 | |||||||||||
Total operating expense | 90.4 | 117.3 | 206.7 | 302.9 | |||||||||||
Operating income | 57.8 | 43.5 | 86.1 | 113.7 | |||||||||||
Interest and other expense, net | (9.4 | ) | (17.6 | ) | (58.6 | ) | (59.9 | ) | |||||||
Net income | $ | 48.4 | $ | 25.9 | $ | 27.5 | $ | 53.8 |
Summarized Balance Sheet | |||||||
(in millions) | |||||||
Assets | |||||||
Current assets | $ | 151.3 | $ | 64.0 | |||
Property and equipment, net | 270.4 | 256.1 | |||||
Other assets, net | 246.3 | 240.1 | |||||
Total assets | $ | 668.0 | $ | 560.2 | |||
Liabilities and Members' Deficit | |||||||
Current liabilities | $ | 119.6 | $ | 73.3 | |||
Long-term debt | 783.0 | 745.0 | |||||
Other liabilities | 42.9 | 20.6 | |||||
Members' deficit | (277.5 | ) | (278.7 | ) | |||
Total liabilities and members' deficit | $ | 668.0 | $ | 560.2 |
Contact:
(502) 394-1157
Nick.Zangari@kyderby.com
Source:
2020 GlobeNewswire, Inc., source