XML 31 R22.htm IDEA: XBRL DOCUMENT
v3.22.1

Segment Information | 3 Months Ended
--- | ---
Mar. 31, 2022
Segment Reporting [Abstract] |
Segment Information | SEGMENT INFORMATION We manage our operations through three reportable segments: •Live and Historical Racing The Live and Historical Racing segment includes live and historical pari-mutuel racing related revenue and expenses at Churchill Downs Racetrack, Derby City Gaming, Oak Grove, Turfway Park, and Newport. Churchill Downs Racetrack is the home of the Kentucky Derby and conducts live racing during the year. Derby City Gaming is an historical racing machine ("HRM") facility that operates under the Churchill Downs pari-mutuel racing license at its ancillary training facility in Louisville, Kentucky. Oak Grove conducts live harness racing during the year and operates a HRM facility under its pari-mutuel racing license. Turfway Park conducts live racing during the year, and Newport is an ancillary HRM facility that operates under the Turfway Park pari-mutuel racing license. Our Live and Historical Racing properties earn commissions primarily from pari-mutuel wagering on live and historical races; simulcast fees earned from other wagering sites; admissions, personal seat licenses, sponsorships, television rights, and other miscellaneous services (collectively "racing event-related services"), as well as food and beverage services. •TwinSpires The TwinSpires segment includes the revenue and expenses for the online horse racing and the retail and online Sports and Casino business. TwinSpires Horse Racing operates online horse racing wagering for TwinSpires.com, BetAmerica.com, and other white-label platforms; facilitates high dollar wagering by international customers (through Velocity); and provides the Bloodstock Research Information Services platform for horse racing statistical data. Also included in TwinSpires Horse Racing is our United Tote business which provides totalisator services to patrons who wager on horse races. Our TwinSpires Sports and Casino business includes the retail and online sports and casino gaming operations. Our TwinSpires Sports and Casino business operates our sports betting and casino iGaming platform in multiple states. The TwinSpires Sports and Casino business includes the mobile and online sports betting and casino results and the results of eight of our retail sportsbooks, which include our wholly-owned properties at Harlow’s Casino Resort and Spa ("Harlow’s"), Presque Isle, Riverwalk Casino Hotel (“Riverwalk”), and Ocean Downs Casino and Racetrack ("Ocean Downs"), as well as in Arizona, Colorado, Indiana and Michigan which utilize a third party's casino license. On February 24, 2022 the Company announced its plans to exit the direct online Sports and Casino business and pursue monetization of its online market access licenses. •Gaming The Gaming segment includes revenue and expenses for the casino properties and associated racetrack or jai alai facilities which support the casino license. The Gaming segment has approximately 11,000 slot machines and video lottery terminals ("VLTs") and 200 table games located in eight states. The Gaming segment revenue and Adjusted EBITDA includes the following properties: ◦Calder ◦Fair Grounds and VSI ◦Harlow’s ◦Lady Luck Casino Nemacolin ("Lady Luck Nemacolin") management agreement ◦Ocean Downs ◦Oxford Casino and Hotel ("Oxford") ◦Presque Isle ◦Riverwalk The Gaming segment Adjusted EBITDA also includes the Adjusted EBITDA related to the Company’s equity investments in the following: ◦61.3% equity investment in Rivers Des Plaines ◦50% equity investment in MVG The Gaming segment generates revenue and expenses from slot machines, table games, VLTs, video poker, retail sports betting, ancillary food and beverage services, hotel services, commission on pari-mutuel wagering, racing event-related services, and / or other miscellaneous operations. We have aggregated the following businesses as well as certain corporate operations, and other immaterial joint ventures in "All Other" to reconcile to consolidated results: •Arlington •Corporate We conduct our business through these reportable segments and report net revenue and operating expense associated with these reportable segments in the accompanying condensed consolidated statements of comprehensive income. Eliminations include the elimination of intersegment transactions. We utilize non-GAAP measures, including EBITDA (earnings before interest, taxes, depreciation and amortization) and Adjusted EBITDA. Our chief operating decision maker utilizes Adjusted EBITDA to evaluate segment performance, develop strategy and allocate resources. Adjusted EBITDA includes the following adjustments: Adjusted EBITDA includes our portion of EBITDA from our equity investments. Adjusted EBITDA excludes: •Transaction expense, net which includes: –Acquisition, disposition, and land sale related charges; –Direct online Sports and Casino business costs; and –Other transaction expense, including legal, accounting, and other deal-related expense; •Stock-based compensation expense; •Rivers Des Plaines' impact on our investments in unconsolidated affiliates from: –The impact of changes in fair value of interest rate swaps; and –Legal reserves and transaction costs; •Asset impairments; •Legal reserves; •Pre-opening expense; and •Other charges, recoveries and expenses As of December 31, 2021, Arlington ceased racing and simulcast operations given the pending sale of the property to the Chicago Bears. Arlington's operating loss in the current year quarter was treated as an adjustment to EBITDA and is included in Other expenses, net in the Reconciliation of Comprehensive Income to Adjusted EBITDA. 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. For segment reporting, Adjusted EBITDA includes intercompany revenue and expense totals that are eliminated in the accompanying condensed consolidated statements of comprehensive income. The tables below present net revenue from external customers and intercompany revenue from each of our segments, net revenue from external customers for each group of similar services, Adjusted EBITDA by segment, and a reconciliation of comprehensive income to Adjusted EBITDA:
|  |  | Three Months Ended March 31,
(in millions) |  |  |  |  | 2022 |  | 2021
Net revenue from external customers: |  |  |  |  |  |  |
Live and Historical Racing: |  |  |  |  |  |  |
Churchill Downs Racetrack |  |  |  |  | $ | 2.0 |  |  | $ | 2.0 |
Derby City Gaming |  |  |  |  | 42.8 |  |  | 32.9 |
Oak Grove |  |  |  |  | 30.4 |  |  | 19.4 |
Turfway Park |  |  |  |  | 4.5 |  |  | 4.5 |
Newport |  |  |  |  | 6.3 |  |  | 4.4 |
Total Live and Historical Racing |  |  |  |  | 86.0 |  |  | 63.2 |
TwinSpires: |  |  |  |  |  |  |
Horse Racing |  |  |  |  | 90.0 |  |  | 96.5 |
Sports and Casino |  |  |  |  | 10.3 |  |  | 7.0 |
Total TwinSpires |  |  |  |  | 100.3 |  |  | 103.5 |
Gaming: |  |  |  |  |  |  |
Fair Grounds and VSI |  |  |  |  | 41.5 |  |  | 38.3 |
Presque Isle |  |  |  |  | 27.2 |  |  | 23.8 |
Ocean Downs |  |  |  |  | 21.3 |  |  | 20.0 |
Calder |  |  |  |  | 27.0 |  |  | 20.9 |
Oxford |  |  |  |  | 26.8 |  |  | 15.7 |
Riverwalk |  |  |  |  | 14.4 |  |  | 14.4 |
Harlow’s |  |  |  |  | 13.1 |  |  | 14.0 |
Lady Luck Nemacolin |  |  |  |  | 6.0 |  |  | 4.9 |
Total Gaming |  |  |  |  | 177.3 |  |  | 152.0 |
All Other |  |  |  |  | 0.5 |  |  | 5.6 |
Net revenue from external customers |  |  |  |  | $ | 364.1 |  |  | $ | 324.3 |
|  |  | Three Months Ended March 31,
(in millions) |  |  |  |  | 2022 |  | 2021
Intercompany net revenue: |  |  |  |  |  |  |
Live and Historical Racing |  |  |  |  | $ | 1.2 |  |  | $ | 1.5 |
TwinSpires |  |  |  |  | 1.1 |  | 1.5
Gaming |  |  |  |  | 1.9 |  |  | 2.0 |
All Other |  |  |  |  | — |  |  | 1.6 |
Eliminations |  |  |  |  | (4.2) |  |  | (6.6) |
Intercompany net revenue |  |  |  |  | $ | — |  |  | $ | — |
| Three Months Ended March 31, 2022
(in millions) | Live and Historical Racing |  | TwinSpires |  | Gaming |  | Total Segments |  | All Other |  | Total
Net revenue from external customers |  |  |  |  |  |  |  |  |  |  |
Pari-mutuel: |  |  |  |  |  |  |  |  |  |  |
Live and simulcast racing | $ | 5.6 |  |  | $ | 81.5 |  |  | $ | 12.9 |  |  | $ | 100.0 |  |  | $ | — |  |  | $ | 100.0 |
Historical racing(a) | 73.6 |  |  | — |  |  | — |  |  | 73.6 |  |  | — |  |  | 73.6 |
Racing event-related services | 0.5 |  |  | — |  |  | 0.4 |  |  | 0.9 |  |  | — |  |  | 0.9 |
Gaming(a) | — |  |  | 10.3 |  |  | 150.9 |  |  | 161.2 |  |  | — |  |  | 161.2 |
Other(a) | 6.3 |  |  | 8.5 |  |  | 13.1 |  |  | 27.9 |  |  | 0.5 |  |  | 28.4 |
Total | $ | 86.0 |  |  | $ | 100.3 |  |  | $ | 177.3 |  |  | $ | 363.6 |  |  | $ | 0.5 |  |  | $ | 364.1 |
| Three Months Ended March 31, 2021
(in millions) | Live and Historical Racing |  | TwinSpires |  | Gaming |  | Total Segments |  | All Other |  | Total
Net revenue from external customers |  |  |  |  |  |  |  |  |  |  |
Pari-mutuel: |  |  |  |  |  |  |  |  |  |  |
Live and simulcast racing | $ | 5.9 |  |  | $ | 89.2 |  |  | $ | 11.7 |  |  | $ | 106.8 |  |  | $ | 5.1 |  |  | $ | 111.9 |
Historical racing(a) | 52.9 |  |  | — |  |  | — |  |  | 52.9 |  |  | — |  |  | 52.9 |
Racing event-related services | — |  |  | — |  |  | 0.7 |  |  | 0.7 |  |  | — |  |  | 0.7 |
Gaming(a) | — |  |  | 7.0 |  |  | 132.5 |  |  | 139.5 |  |  | — |  |  | 139.5 |
Other(a) | 4.4 |  |  | 7.3 |  |  | 7.1 |  |  | 18.8 |  |  | 0.5 |  |  | 19.3 |
Total | $ | 63.2 |  |  | $ | 103.5 |  |  | $ | 152.0 |  |  | $ | 318.7 |  |  | $ | 5.6 |  |  | $ | 324.3 |
(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 Pari-mutuel revenue for HRMs or Gaming revenue for our casino properties. These amounts were $7.0 million for the three months ended March 31, 2022 and $3.7 million for the three months ended March 31, 2021. Adjusted EBITDA by segment is comprised of the following:
| Three Months Ended March 31, 2022
(in millions) | Live and Historical Racing |  | TwinSpires |  | Gaming
Net revenue | $ | 87.2 |  |  | $ | 101.4 |  |  | $ | 179.2 |
Taxes and purses | (26.8) |  |  | (7.5) |  |  | (67.3) |
Marketing and advertising | (2.9) |  |  | (5.1) |  |  | (3.5) |
Salaries and benefits | (10.9) |  |  | (6.7) |  |  | (23.9) |
Content expense | (0.6) |  |  | (43.1) |  |  | (1.5) |
Selling, general and administrative expense | (3.3) |  |  | (2.6) |  |  | (6.6) |
Other operating expense | (14.8) |  |  | (12.3) |  |  | (20.0) |
Other income | — |  |  | — |  |  | 34.7 |
Adjusted EBITDA | $ | 27.9 |  |  | $ | 24.1 |  |  | $ | 91.1 |
| Three Months Ended March 31, 2021
(in millions) | Live and Historical Racing |  | TwinSpires |  | Gaming
Net revenue | $ | 64.7 |  |  | $ | 105.0 |  |  | $ | 154.0 |
Taxes and purses | (20.0) |  |  | (6.4) |  |  | (59.3) |
Marketing and advertising | (2.1) |  |  | (8.5) |  |  | (1.4) |
Salaries and benefits | (10.0) |  |  | (6.2) |  |  | (19.9) |
Content expense | (0.6) |  |  | (46.5) |  |  | (1.0) |
Selling, general and administrative expense | (3.0) |  |  | (2.6) |  |  | (6.0) |
Other operating expense | (10.7) |  |  | (11.7) |  |  | (15.5) |
Other income | — |  |  | — |  |  | 31.5 |
Adjusted EBITDA | $ | 18.3 |  |  | $ | 23.1 |  |  | $ | 82.4 |
|  |  | Three Months Ended March 31,
(in millions) |  |  |  |  | 2022 |  | 2021
Reconciliation of Comprehensive Income to Adjusted EBITDA: |  |  |  |  |  |  |
Net income and comprehensive income |  |  |  |  | $ | 42.1 |  |  | $ | 36.1 |
Additions: |  |  |  |  |  |  |
Depreciation and amortization |  |  |  |  | 25.1 |  |  | 26.0 |
Interest expense |  |  |  |  | 21.3 |  |  | 19.4 |
Income tax provision |  |  |  |  | 16.5 |  |  | 16.2 |
EBITDA |  |  |  |  | $ | 105.0 |  |  | $ | 97.7 |
Adjustments to EBITDA: |  |  |  |  |  |  |
Stock-based compensation expense |  |  |  |  | $ | 7.0 |  |  | $ | 5.5 |
Pre-opening expense |  |  |  |  | 2.1 |  |  | 0.6 |
Other expenses, net |  |  |  |  | 2.5 |  |  | — |
Asset impairments |  |  |  |  | 4.9 |  |  | — |
Transaction expense, net |  |  |  |  | 5.0 |  |  | 0.1 |
Other income, expense: |  |  |  |  |  |  |
Interest, depreciation and amortization expense related to equity investments |  |  |  |  | 11.1 |  |  | 9.6 |
Changes in fair value of Rivers Des Plaines' interest rate swaps |  |  |  |  | (10.4) |  |  | (4.2) |
Rivers Des Plaines' legal reserves and transaction costs |  |  |  |  | 0.3 |  |  | 1.3 |
Other charges |  |  |  |  | 1.0 |  |  | — |
Total adjustments to EBITDA |  |  |  |  | 23.5 |  |  | 12.9 |
Adjusted EBITDA |  |  |  |  | $ | 128.5 |  |  | $ | 110.6 |
Adjusted EBITDA by segment: |  |  |  |  |  |  |
Live and Historical Racing |  |  |  |  | $ | 27.9 |  |  | $ | 18.3 |
TwinSpires |  |  |  |  | 24.1 |  |  | 23.1 |
Gaming |  |  |  |  | 91.1 |  |  | 82.4 |
Total segment Adjusted EBITDA |  |  |  |  | 143.1 |  |  | 123.8 |
All Other |  |  |  |  | (14.6) |  |  | (13.2) |
Total Adjusted EBITDA |  |  |  |  | $ | 128.5 |  |  | $ | 110.6 |
The table below presents information about equity in income of unconsolidated affiliates included in our reported segments:
|  |  | Three Months Ended March 31,
(in millions) |  |  |  |  | 2022 |  | 2021
Gaming |  |  |  |  | $ | 32.5 |  |  | $ | 24.9 |
The table below presents total asset information for each of our segments:
(in millions) | March 31, 2022 |  | December 31, 2021
Total assets: |  |  |
Live and Historical Racing | $ | 719.0 |  |  | $ | 682.7 |
TwinSpires | 286.0 |  |  | 289.6 |
Gaming | 1,003.3 |  |  | 1,003.3 |
Total segment assets | 2,008.3 |  |  | 1,975.6 |
All Other | 1,028.6 |  |  | 1,006.0 |
Total assets | $ | 3,036.9 |  |  | $ | 2,981.6 |
The table below presents total capital expenditures for each of our segments:
| Three Months Ended March 31,
(in millions) | 2022 |  | 2021
Capital expenditures, net: |  |  |
Live and Historical Racing | $ | 44.5 |  |  | $ | 7.8 |
TwinSpires | 3.1 |  |  | 2.4 |
Gaming | 7.5 |  |  | 1.6 |
Total segment capital expenditures | 55.1 |  |  | 11.8 |
All Other | 0.4 |  |  | 0.5 |
Total capital expenditures | $ | 55.5 |  |  | $ | 12.3 |

X
- References No definition available. + Details
Name: | us-gaap_SegmentReportingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration