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Segment Information | 12 Months Ended
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Dec. 31, 2014
Segment Reporting [Abstract] |
Segment Information | SEGMENT INFORMATION The Company operates in the following five segments: (1) Racing, which includes Churchill Downs, Arlington and its ten OTBs, Fair Grounds and its twelve OTBs and Calder, which ceased pari-mutuel operations on July 1, 2014; (2) Casinos, which includes video poker and gaming operations at Calder Casino, Fair Grounds Slots, Harlow’s, Riverwalk, Oxford, MVG and VSI; (3) TwinSpires, which includes TwinSpires, our ADW business, Fair Grounds Account Wagering, Bloodstock Research Information Services, Velocity and Luckity, until the cessation of its operations on November 4, 2014, as well as the Company's equity investment in HRTV, LLC; (4) Big Fish Games; and (5) Other Investments, which includes United Tote, Bluff and the Company's other minor investments. Eliminations include the elimination of intersegment transactions. On January 1, 2014, the Company reclassified its equity investment in MVG from Other Investments to Casinos, to coincide with the first full period of operations for the venture, which opened on December 12, 2013. MVG's results of operations for the year ended December 31, 2013 have been reclassified to the Casinos segment. In order to evaluate the performance of these operating segments internally, the Company uses Adjusted EBITDA (defined as earnings before interest, taxes, depreciation, amortization, and adjusted for insurance recoveries net of losses, HRE Trust Fund proceeds, share-based compensation expenses, pre-opening expenses, the impairment of assets, Big Fish Games transaction expenses, Big Fish Games acquisition-related charges, changes in Big Fish Games deferred revenue and other charges or recoveries). Big Fish Games transaction expenses include legal, accounting and other deal-related expenses. Big Fish Games acquisition-related charges reflect the change in fair value of the Big Fish Games earnout and deferred consideration liability recorded each reporting period. Changes in Big Fish Games deferred revenue reflect reductions in revenue from business combination accounting rules when deferred revenue balances assumed as part of an acquisition are adjusted to their fair values. Fair value approximates the cost of fulfilling the service obligation, plus a reasonable profit margin. Adjusted EBITDA also includes 50% of the operating income or loss of our joint venture, MVG. During the year ended December 31, 2013, the Company implemented the Adjusted EBITDA metric because it believes the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a more accurate measure of its core operating results and enables management and investors to evaluate and compare from period to period our operating performance in a meaningful and consistent manner. The 2012 financial information has been retrospectively revised to reflect the change in the segment profitability reporting measure. 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. The Company's calculation of Adjusted EBITDA may be different from the calculation used by other companies and, therefore, comparability may be limited. The accounting policies of the segments are the same as those described in the “Summary of Significant Accounting Policies” in Note 1. The table below presents information about reported segments for the years ended December 31, 2014, 2013 and 2012 (in thousands):
| Year Ended December 31,
| 2014 |  | 2013 |  | 2012
Net revenues from external customers: |  |  |  |  |
Churchill Downs | $ | 143,191 |  |  | $ | 132,845 |  |  | $ | 124,255 |
Arlington | 60,312 |  |  | 64,483 |  |  | 69,077 |
Calder | 19,325 |  |  | 36,264 |  |  | 64,566 |
Fair Grounds | 38,625 |  |  | 40,677 |  |  | 44,190 |
Total Racing | 261,453 |  |  | 274,269 |  |  | 302,088 |
Calder Casino | 77,003 |  |  | 78,951 |  |  | 77,864 |
Fair Grounds Slots | 40,774 |  |  | 42,156 |  |  | 42,881 |
VSI | 34,369 |  |  | 35,931 |  |  | 35,433 |
Harlow’s Casino | 50,199 |  |  | 52,440 |  |  | 56,604 |
Oxford Casino | 76,526 |  |  | 34,350 |  |  | — |
Riverwalk Casino | 50,139 |  |  | 53,645 |  |  | 10,330 |
Total Casinos | 329,010 |  |  | 297,473 |  |  | 223,112 |
TwinSpires | 190,333 |  |  | 184,541 |  |  | 183,279 |
Big Fish Games | 13,855 |  |  | — |  |  | — |
Other Investments | 17,125 |  |  | 21,899 |  |  | 21,785 |
Corporate | 1,158 |  |  | 1,143 |  |  | 1,032 |
Net revenues from external customers | $ | 812,934 |  |  | $ | 779,325 |  |  | $ | 731,296 |
Intercompany net revenues: |  |  |  |  |
Churchill Downs | $ | 7,038 |  |  | $ | 6,686 |  |  | $ | 5,592 |
Arlington | 5,767 |  |  | 3,395 |  |  | 4,712 |
Calder | 707 |  |  | 1,263 |  |  | 1,583 |
Fair Grounds | 1,089 |  |  | 1,151 |  |  | 1,270 |
Total Racing | 14,601 |  |  | 12,495 |  |  | 13,157 |
TwinSpires | 958 |  |  | 853 |  |  | 836 |
Other Investments | 4,130 |  |  | 4,409 |  |  | 3,466 |
Eliminations | (19,689 | ) |  | (17,757 | ) |  | (17,459 | )
Net revenues | $ | — |  |  | $ | — |  |  | $ | — |
| Year Ended December 31,
| 2014 |  | 2013 |  | 2012
Reconciliation of segment Adjusted EBITDA to net earnings: |  |  |  |  |
Racing | $ | 61,160 |  |  | $ | 50,275 |  |  | $ | 54,357 |
Casinos | 101,106 |  |  | 80,631 |  |  | 64,231 |
TwinSpires | 45,282 |  |  | 49,122 |  |  | 44,618 |
Big Fish Games | 3,837 |  |  | — |  |  | — |
Other Investments | (3,857 | ) |  | 809 |  |  | (117 | )
Total segment Adjusted EBITDA | 207,528 |  |  | 180,837 |  |  | 163,089 |
Corporate Adjusted EBITDA | (5,037 | ) |  | (4,606 | ) |  | (4,834 | )
Insurance recoveries, net of losses | 431 |  |  | 375 |  |  | 7,006 |
Big Fish Games acquisition charges | (3,826 | ) |  | — |  |  | — |
Big Fish Games transaction expenses | (6,367 | ) |  | — |  |  | — |
Big Fish Games changes in deferred revenue | (4,497 | ) |  | — |  |  | — |
HRE Trust Fund proceeds | — |  |  | 4,541 |  |  | — |
Share-based compensation expense | (11,932 | ) |  | (21,482 | ) |  | (13,993 | )
Pre-opening expenses | (27 | ) |  | (3,620 | ) |  | — |
MVG interest expense, net | (2,546 | ) |  | (170 | ) |  | — |
Asset impairment charges | (4,843 | ) |  | — |  |  | — |
Other charges | (3,287 | ) |  | (2,500 | ) |  | — |
Depreciation and amortization | (68,257 | ) |  | (61,750 | ) |  | (55,600 | )
Interest income (expense), net | (20,822 | ) |  | (6,119 | ) |  | (4,441 | )
Income tax provision | (30,161 | ) |  | (30,473 | ) |  | (33,075 | )
Earnings from continuing operations | 46,357 |  |  | 55,033 |  |  | 58,152 |
Discontinued operations, net of income taxes | — |  |  | (133 | ) |  | 124 |
Net earnings | 46,357 |  |  | 54,900 |  |  | 58,276 |
Foreign currency translation, net of tax | (125 | ) |  | — |  |  | — |
Comprehensive income | $ | 46,232 |  |  | $ | 54,900 |  |  | $ | 58,276 |
The table below presents information about equity in (losses) earnings of unconsolidated investments included in the Company's reported segments for the years ended December 31, 2014, 2013 and 2012 (in thousands):
| Year Ended December 31,
| 2014 |  | 2013 |  | 2012
Casinos | $ | 8,900 |  |  | $ | (3,718 | ) |  | $ | (610 | )
TwinSpires | (68 | ) |  | (848 | ) |  | (1,413 | )
Other Investments | (2,504 | ) |  | 424 |  |  | 322 |
| $ | 6,328 |  |  | $ | (4,142 | ) |  | $ | (1,701 | )
The tables below present total asset information about reported segments as of December 31, 2014 and 2013 and capital expenditures for the years ended December 31, 2014, 2013 and 2012 (in thousands):
| As of December 31,
| 2014 |  | 2013
Total assets: |  |  |
Racing | $ | 518,517 |  |  | $ | 513,345 |
Casinos | 621,240 |  |  | 622,038 |
TwinSpires | 182,322 |  |  | 186,621 |
Big Fish Games | 1,007,438 |  |  | — |
Other Investments | 30,757 |  |  | 30,257 |
| $ | 2,360,274 |  |  | $ | 1,352,261 |
| Year Ended December 31,
| 2014 |  | 2013 |  | 2012
Capital expenditures, net: |  |  |  |  |
Racing | $ | 35,637 |  |  | $ | 20,184 |  |  | $ | 14,027 |
Casinos | 7,715 |  |  | 13,643 |  |  | 14,524 |
TwinSpires | 5,778 |  |  | 5,908 |  |  | 4,427 |
Big Fish Games | 116 |  |  | — |  |  | — |
Other Investments | 5,240 |  |  | 9,036 |  |  | 8,320 |
| $ | 54,486 |  |  | $ | 48,771 |  |  | $ | 41,298 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 + Details
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