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Information Technology : Semiconductors & Semiconductor Equipment | Mid Cap Value
Company profile

ON Semiconductor Corporation offers a portfolio of sensors, power management, connectivity, custom and system on chip (SoC), analog, logic, timing, and discrete devices. The Company's segments include Power Solutions Group, Analog Solutions Group and Image Sensor Group. The Power Solutions Group offers a range of discrete, module and integrated semiconductor products. The Analog Solutions Group designs and develops analog, mixed-signal and logic application specific integrated circuits (ASICs) and application specific standard products (ASSPs), and power solutions. The Image Sensor Group designs and develops complementary metal oxide semiconductor (CMOS) and charge-coupled device (CCD) image sensors, as well as proximity sensors, image signal processors, and actuator drivers for autofocus and image stabilization for various end users in the automotive, industrial, consumer, wireless, medical, and aerospace/defense markets.

Closing Price
$26.16
Day's Change
0.24 (0.93%)
Bid
--
Ask
--
B/A Size
--
Day's High
26.24
Day's Low
25.78
Volume
(Light)
Volume:
3,608,752

10-day average volume:
7,259,567
3,608,752

Churchill Downs Incorporated Reports 2020 Second Quarter Results

4:35 pm ET July 29, 2020 (Globe Newswire) Print

Churchill Downs Incorporated (Nasdaq: CHDN) ("CDI" or the "Company") today reported business results for the second quarter ended June 30, 2020.

Second Quarter 2020 Highlights/Update on Operations

-- Net revenue of $185.1 million, down 61% over the prior year quarter

-- Net loss of $118.8 million compared to net income of $107.1 million in the prior year quarter

    -- Adjusted net loss of $21.1 million, compared to adjusted net income of $115.0 million in the prior year quarter

    -- Adjusted net loss of $21.1 million, compared to adjusted net income of $115.0 million in the prior year quarter

    -- Adjusted EBITDA of $30.1 million, down 86% compared to $215.0 million in the prior year quarter

    -- Strong performance from TwinSpires with $18.3 million of Adjusted EBITDA growth and $100.7 million of handle growth, or 21.6%, over the prior year quarter despite the rescheduling of the 146th Kentucky Oaks and Derby to September

    -- All of our gaming properties are now reopened except for Calder Casino in Miami, Florida

    -- Strong performance from our wholly-owned regional casino properties post reopening with 9% growth in net revenue, 38% growth in Adjusted EBITDA and a 9 percentage point improvement in margin for the period the properties were open in May and/or June through June 30, 2020 compared to the same period in the prior year

    (a) Reflects amounts attributable to CDI.

    (b) Excludes racing related operations at the gaming properties.

    CONSOLIDATED RESULTS                 Second Quarter
    (in millions, except per share data) 2020                  2019
    Net revenue                          $        185.1        $        477.4
    Net (loss) income                    $        (118.8   )   $        107.1
    Diluted EPS                          $        (3.00    )   $        2.63
    Adjusted net (loss) income           $        (21.1    )   $        115.0
    Adjusted diluted EPS                 $        (0.53    )   $        2.83
    Adjusted EBITDA                      $        30.1         $        215.0
    (a) Reflects amounts attributable to CDI.
    (b) These are non-GAAP measures. See explanation of non-GAAP measures below.
    

    "Our teams have been excited to welcome our guests back to our properties with enhanced safety and social distancing protocols," said Bill Carstanjen, Chief Executive Officer. "Our team is looking forward to a safe and successful 146th Kentucky Derby on September 5th when we can come together to celebrate this time-honored great American tradition."

    Second Quarter 2020 Net Loss Attributable to CDI

    The Company's second quarter of 2020 net loss attributable to CDI was $118.8 million compared to net income attributable to CDI of $107.1 million in the prior year quarter. The Company's second quarter of 2020 net loss from continuing operations was $23.6 million compared to net income from continuing operations of $108.3 million in the prior year quarter. CDI had $95.2 million in net loss from discontinued operations in the second quarter of 2020 compared to $1.2 million in the prior year quarter.

    The following items impacted the comparability of the Company's second quarter net (loss) income from continuing operations:

    -- $4.8 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 of Rivers Des Plaines) interest rate swaps; and

    -- $0.6 million after-tax decrease of our equity portion of Midwest Gaming's recapitalization and transaction costs in the second quarter of 2019 that did not recur in the current year quarter;

    -- Partially offset by:

      -- $0.6 million non-cash tax impact related to the re-measurement of our net deferred tax liabilities in the second 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; and

      -- $0.6 million non-cash tax impact related to the re-measurement of our net deferred tax liabilities in the second 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; and

      -- $0.6 million after-tax increase in expenses related to lower transaction, pre-opening and other expenses in the current year quarter compared to the prior year quarter.

      Excluding these items, net (loss) income from continuing operations decreased $136.1 million primarily due to the following:

      -- $135.2 million after-tax decrease driven by the results of our operations and equity income from our unconsolidated affiliates primarily due to the temporary closure of our gaming facilities as a result of the COVID-19 pandemic; and

      -- $0.9 million after-tax increase in interest expense associated with higher outstanding debt balances.

      The Company's second quarter 2020 net loss from discontinued operations increased by $94.0 million compared to the prior year quarter primarily due to the settlement of the Kater and Thimmegowda lawsuits during the second quarter of 2020 for $124.0 million ($95.0 million after-tax).

      COVID-19 Update

      The COVID-19 pandemic and measures taken to limit the impact of COVID-19, including shelter-in-place orders, social distancing measures, travel bans and restrictions, and business and government shutdowns, have resulted and continue to result in significant negative economic impacts in the United States and in relation to our business.

      In response to the measures taken to limit the impact of COVID-19 described above, and for the protection of our employees, customers, and communities, we temporarily suspended operations at our properties in March 2020. In May 2020, we began to reopen our properties with patron capacity limitations and gaming restrictions. We also implemented other initiatives to facilitate social distancing and enhanced cleaning, such as increased frequency of cleaning and sanitizing of all high-touch surfaces, mandatory temperature checks of all guests and team members upon entry and required training for all team members on safety protocols. Certain amenities at our properties have continued to be suspended, including all of our food buffets and valet services, and certain restaurants and food outlets. The supplemental information in this release provides additional detail on the temporary closures or suspended operations and the respective reopening dates by segment and property.

      On March 25, 2020, as a result of the temporary closures and suspended operations described above, the Company announced the temporary furlough of employees at its wholly-owned and managed gaming properties and certain racing operations. As the Company has reopened these properties, certain employees have returned to work while others remain on temporary furlough due to the capacity restrictions at these properties. The Company is providing health, dental, vision and life insurance benefits to furloughed employees through July 31, 2020.

      The Company also implemented a temporary salary reduction for all remaining non-furloughed salaried employees based on a percentage that varies dependent upon the amount of each employee's salary. The most senior level of executive management has received the largest salary decrease, based on both percentage and dollar amount. Salaries for non-furloughed employees will resume at their annual base salary beginning with the start of the employee's first full pay period subsequent to July 31, 2020.

      There have been a number of other aspects of our business that have been impacted by COVID-19 during the three and six months ended June 30, 2020, including the following:

      -- The Company rescheduled the 146th Kentucky Oaks and Derby from May 1-2, 2020 to September 4-5, 2020. On June 24, 2020, the Company received approval from the Governor of Kentucky and state public health officials for its plan to allow limited spectators to attend Kentucky Derby week events held September 1-5, 2020.

      -- Horse racing content for wagering on our TwinSpires business ("TwinSpires") decreased, although handle increased as our customers wagered more on the content that was available.

      -- Starting in mid-February 2020, U.S. and international sporting events were cancelled, which reduced sports betting content for our customers.

      Turfway Park

      On July 28, 2020, CDI's Board of Directors approved the final design plans for the HRM and grandstand facility at Turfway Park. The final plans reflect total project capital of $200.0 million, which includes the Turfway Park acquisition cost and other previously approved capital. The Turfway Park facility is expected to open in the fourth quarter of 2021.

      Segment Results

      The summaries below present net revenue from external customers and intercompany revenue from each of our reportable segments:

      Churchill Downs Second Quarter
      (in millions)   2020      2019
      Net revenue     $  30.2   $  193.1
      Adjusted EBITDA 4.5       121.9
      

      For the second quarter of 2020, net revenue decreased $162.9 million from the prior year quarter due to a $149.4 million decrease from Churchill Downs Racetrack primarily due to the rescheduling of the 146th Kentucky Oaks and Derby, and a $13.5 million decrease at Derby City Gaming due to the temporary suspension of operations.

      Adjusted EBITDA decreased $117.4 million in the second quarter of 2020 from the prior year quarter due to a $111.9 million decrease from Churchill Downs Racetrack primarily due to the rescheduling of the 146th Kentucky Oaks and Derby and a $5.5 million decrease at Derby City Gaming due to the temporary suspension of operations.

      Online Wagering Second Quarter
      (in millions)   2020       2019
      Net revenue     $  121.6   $  96.0
      Adjusted EBITDA 38.8       22.2
      

      For the second quarter of 2020, net revenue increased $25.6 million from the prior year quarter primarily due to a $24.4 million increase at TwinSpires. U.S. thoroughbred industry handle decreased 18.9% during the second quarter of 2020 compared to the prior year quarter. Although horse racing content for wagering decreased, TwinSpires handle grew $100.7 million, or 21.6%, compared to the prior year, despite the rescheduling of the 146th Kentucky Oaks and Derby, as our customers wagered more on the content that was available. Active players decreased 55.5% primarily due to the rescheduling of the 146th Kentucky Oaks and Derby; however, net revenue per active player increased 191.9%.

      Our online sports betting and iGaming net revenues increased $1.2 million compared to the prior year quarter primarily due to a full quarter of iGaming results in Pennsylvania for the second quarter of 2020 compared to the prior year quarter. Sports betting net revenue growth was impacted by the suspension of U.S. and international sporting events beginning in mid-February 2020.

      Adjusted EBITDA increased $16.6 million in the second quarter of 2020 from the prior year quarter primarily due to an $18.3 million increase from TwinSpires due to an increase in handle and net revenue per active player, partially offset by a $1.7 million decrease from increased marketing spend and costs associated with the continued build-out of our online sports betting and iGaming operations.

      Gaming          Second Quarter
      (in millions)   2020        2019
      Net revenue     $  37.3     $  177.8
      Adjusted EBITDA (2.0    )   76.1
      

      For the second quarter of 2020, net revenue decreased $140.5 million from the prior year quarter primarily due to the temporary suspension of operations of all of our Gaming properties and the related loss of revenue at each property.

      Adjusted EBITDA decreased $78.1 million for the second quarter of 2020 from the prior year quarter primarily driven by a $50.2 million decrease at our wholly-owned Gaming properties from the decrease in net revenue and a $27.9 million decrease from our equity investments, both of which were due to the temporary suspension of operations of all of our Gaming properties.

      For the period in which the properties were open in May and/or June through June 30, 2020, our wholly-owned regional casino properties (excluding racing operations) outperformed the same period in the prior year with 9% growth in net revenue, 38% growth in adjusted EBITDA and a 9 percentage point improvement in margin.

      All Other

      For the second quarter of 2020, All Other Adjusted EBITDA decreased $6.0 million primarily due to a $4.4 million decrease from Arlington due to the temporary suspension of operations, a $2.1 million decrease from United Tote due to a decrease in net revenue, and a $0.7 million decrease due to unfavorable results from the acquisition of Turfway Park in October 2019. Partially offsetting these decreases was a $1.2 million increase at our corporate operations primarily due to a reduction in accrued bonuses.

      Capital Management

      There were no repurchases of common stock in conjunction with the Company's publicly announced share repurchase program in the second quarter of 2020. We had approximately $147.1 million repurchase authority remaining under this program as of June 30, 2020.

      Conference Call

      A conference call regarding this news release is scheduled for Thursday, July 30, 2020, at 9 a.m. ET. Investors and other interested parties may listen to the teleconference by accessing the online, real-time webcast and broadcast of the call at http://ir.churchilldownsincorporated.com/events.cfm, or by dialing (877) 372-0878 and entering the pass code 7780949 at least 10 minutes before the appointed time. International callers should dial (253) 237-1169. An online replay will be available at approximately noon ET on Thursday, July 30, 2020, and will continue to be available for two weeks. A copy of the Company's news release announcing quarterly results and relevant financial and statistical information about the period will be accessible at www.churchilldownsincorporated.com.

      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;

        -- 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

          -- 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 Churchill Downs Incorporated

          Churchill Downs Incorporated (the "Company", "we", "us", "our") is an industry-leading racing, online wagering and gaming entertainment company anchored by our iconic flagship event - The Kentucky Derby. We own and operate Derby City Gaming, a historical racing machine facility in Louisville, Kentucky. We also own and operate the largest online horse racing wagering platform in the U.S., TwinSpires.com, and we operate sports betting and iGaming through our BetAmerica platform in multiple states. We are also a leader in brick-and-mortar casino gaming with approximately 11,000 slot machines and video lottery terminals and 200 table games in eight states. Additional information about CDI can be found online at www.churchilldownsincorporated.com.

          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 Churchill Downs Racetrack and the Kentucky Derby; personal injury litigation related to injuries occurring at our racetracks; weather and other conditions affecting our ability to conduct live racing; the occurrence of extraordinary events, such as terrorist attacks, public health threats and civil unrest; changes in the regulatory environment of our racing operations; increased competition in the horse racing business; difficulty in attracting a sufficient number of horses and trainers for full field horse races; our inability to utilize and provide totalizator services; changes in regulatory environment of our online horse wagering business; a reduction in the number of people wagering on live horse races; increase in competition in our online horse racing wagering business; uncertainty and changes in the legal landscape relating to our online horse racing wagering business; continued legalization of online sports betting and iGaming in the United States and our ability to predict and capitalize on any such legalization; inability to expand our sports betting operations and effectively compete; failure to manage risks associated with sports betting; failure to comply with laws requiring us to block access to certain individuals could result in penalties or impairment with respect to our mobile and online wagering products; increased competition in our casino business; changes in regulatory environment of our casino business; concentration and evolution of slot machine manufacturing and other technology conditions that could impose additional costs; and inability to collect gaming receivables from the customers to whom we extend credit.

          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.

          CHURCHILL DOWNS INCORPORATED

          CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

          (Unaudited)

                                                                                     Three Months Ended June 30,      Six Months Ended June 30,
          (in millions, except per common share data)                                2020             2019            2020           2019
          Net revenue:
          Churchill Downs                                                            $   23.3         $   182.2       $  46.8        $  203.2
          Online Wagering                                                            121.2            95.6            188.5          158.7
          Gaming                                                                     37.3             177.6           184.9          346.4
          All Other                                                                  3.3              22.0            17.8           34.5
          Total net revenue                                                          185.1            477.4           438.0          742.8
          Operating expense:
          Churchill Downs                                                            31.1             73.6            57.7           97.0
          Online Wagering                                                            74.6             62.0            124.7          107.1
          Gaming                                                                     45.6             133.2           170.4          258.2
          All Other                                                                  11.6             21.5            32.7           37.0
          Selling, general and administrative expense                                22.4             30.1            46.5           55.0
          Impairment of intangible assets                                            --               --              17.5           --
          Transaction expense, net                                                   0.2              0.6             0.5            4.1
          Total operating expense                                                    185.5            321.0           450.0          558.4
          Operating (loss) income                                                    (0.4       )     156.4           (12.0     )    184.4
          Other income (expense):
          Interest expense, net                                                      (20.3      )     (19.4     )     (39.6     )    (33.1    )
          Equity in (loss) income of unconsolidated affiliates                       (11.1      )     9.5             (14.4     )    13.6
          Miscellaneous, net                                                         0.3              0.4             0.3            0.4
          Total other expense                                                        (31.1      )     (9.5      )     (53.7     )    (19.1    )
          (Loss) income from continuing operations before provision for income taxes (31.5      )     146.9           (65.7     )    165.3
          Income tax benefit (provision)                                             7.9              (38.6     )     19.5           (45.1    )
          (Loss) income from continuing operations, net of tax                       (23.6      )     108.3           (46.2     )    120.2
          Loss from discontinued operations, net of tax                              (95.2      )     (1.2      )     (96.1     )    (1.5     )
          Net (loss) income                                                          $   (118.8 )     $   107.1       $  (142.3 )    $  118.7
          Net loss attributable to noncontrolling interest                           --               --              (0.1      )    --
          Net (loss) and comprehensive (loss) income attributable to CDI             $   (118.8 )     $   107.1       $  (142.2 )    $  118.7
          Net (loss) income per common share data - basic:
          Continuing operations                                                      $   (0.59  )     $   2.69        $  (1.16  )    $  2.99
          Discontinued operations                                                    $   (2.41  )     $   (0.03 )     $  (2.43  )    $  (0.04 )
          Net (loss) income per common share - basic                                 $   (3.00  )     $   2.66        $  (3.59  )    $  2.95
          Net (loss) income per common share data - diluted:
          Continuing operations                                                      $   (0.59  )     $   2.66        $  (1.16  )    $  2.96
          Discontinued operations                                                    $   (2.41  )     $   (0.03 )     $  (2.43  )    $  (0.04 )
          Net (loss) income per common share - diluted                               $   (3.00  )     $   2.63        $  (3.59  )    $  2.92
          Weighted average shares outstanding:
          Basic                                                                      39.5             40.1            39.6           40.3
          Diluted                                                                    39.5             40.7            39.6           40.7
          

          CHURCHILL DOWNS INCORPORATED

          CONSOLIDATED BALANCE SHEETS

          (Unaudited)

          (in millions)                                                       June 30, 2020     December 31, 2019
          ASSETS
          Current assets:
          Cash and cash equivalents                                           $    649.2        $    96.2
          Restricted cash                                                     49.8              46.3
          Accounts receivable, net                                            47.5              37.3
          Income taxes receivable                                             36.8              14.5
          Other current assets                                                34.4              26.9
          Total current assets                                                817.7             221.2
          Property and equipment, net                                         1,043.2           937.3
          Investment in and advances to unconsolidated affiliates             615.4             634.5
          Goodwill                                                            366.8             367.1
          Other intangible assets, net                                        350.8             369.8
          Other assets                                                        22.1              21.1
          Total assets                                                        $    3,216.0      $    2,551.0
          LIABILITIES AND SHAREHOLDERS' EQUITY
          Current liabilities:
          Accounts payable                                                    $    105.8        $    57.8
          Accrued expenses and other current liabilities                      164.6             173.4
          Current deferred revenue                                            89.8              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                                           488.2             301.2
          Long-term debt, net of current maturities and loan origination fees 1,077.1           384.0
          Notes payable, net of debt issuance costs                           1,086.8           1,085.9
          Non-current deferred revenue                                        15.1              16.7
          Deferred income taxes                                               188.0             212.8
          Other liabilities                                                   38.1              39.4
          Total liabilities                                                   2,893.3           2,040.0
          Commitments and contingencies
          Shareholders' equity:
          Preferred stock                                                     --                --
          Common stock                                                        6.1               --
          Retained earnings                                                   314.9             509.2
          Accumulated other comprehensive loss                                (0.9          )   (0.9         )
          Total CDI shareholders' equity                                      320.1             508.3
          Noncontrolling interest                                             2.6               2.7
          Total shareholder's equity                                          322.7             511.0
          Total liabilities and shareholders' equity                          $    3,216.0      $    2,551.0
          

          CHURCHILL DOWNS INCORPORATED

          CONSOLIDATED STATEMENTS OF CASH FLOW

          (unaudited)

                                                                                                      Six Months Ended June 30,
          (in millions)                                                                               2020            2019
          Cash flows from operating activities:
          Net (loss) income                                                                           $   (142.3 )    $   118.7
          Adjustments to reconcile net (loss) income to net cash provided by operating activities:
          Depreciation and amortization                                                               44.1            42.3
          Distributions from unconsolidated affiliates                                                4.8             11.5
          Equity in loss (income) of unconsolidated affiliates                                        14.4            (13.6     )
          Stock-based compensation                                                                    10.4            12.1
          Deferred income taxes                                                                       (24.8      )    12.1
          Impairment of intangible assets                                                             17.5            --
          Amortization of operating lease assets                                                      2.5             2.2
          Other                                                                                       1.8             1.1
          Changes in operating assets and liabilities, net of business acquisitions and dispositions:
          Income taxes                                                                                (22.4      )    31.9
          Deferred revenue                                                                            43.5            (36.9     )
          Other assets and liabilities                                                                127.4           32.9
          Net cash provided by operating activities                                                   76.9            214.3
          Cash flows from investing activities:
          Capital maintenance expenditures                                                            (13.2      )    (26.2     )
          Capital project expenditures                                                                (118.1     )    (32.6     )
          Acquisition of businesses, net of cash acquired                                             --              (172.1    )
          Investments in and advances to unconsolidated affiliates                                    --              (410.1    )
          Distributions of capital from unconsolidated affiliates                                     --              8.1
          Acquisition of gaming licenses                                                              --              (22.1     )
          Other                                                                                       (0.5       )    1.1
          Net cash used in investing activities                                                       (131.8     )    (653.9    )
          Cash flows from financing activities:
          Proceeds from borrowings under long-term debt obligations                                   726.1           1,235.3
          Repayments of borrowings under long-term debt obligations                                   (33.4      )    (637.3    )
          Payment of dividends                                                                        (23.4      )    (22.2     )
          Repurchase of common stock                                                                  (28.4      )    (45.5     )
          Cash settlement of stock awards                                                             (12.7      )    --
          Taxes paid related to net share settlement of stock awards                                  (15.1      )    (7.6      )
          Debt issuance costs                                                                         (1.7       )    (8.6      )
          Other                                                                                       --              (2.3      )
          Net cash provided by financing activities                                                   611.4           511.8
          Net increase in cash, cash equivalents and restricted cash                                  556.5           72.2
          Cash, cash equivalents and restricted cash, beginning of period                             142.5           173.3
          Cash, cash equivalents and restricted cash, end of period                                   $   699.0       $   245.5
          

          CHURCHILL DOWNS INCORPORATED

          SUPPLEMENTAL INFORMATION

          (Unaudited)

                                                                                 Three Months Ended June 30,      Six Months Ended June 30,
          (in millions)                                                          2020             2019            2020           2019
          GAAP net (loss) income attributable to CDI                             $   (118.8 )     $   107.1       $  (142.2 )    $  118.7
          Adjustments, continuing operations:
          Changes in fair value of interest rate swaps related to Midwest Gaming 1.3              7.9             16.2           12.2
          Recapitalization and transaction costs related to Midwest Gaming       --               0.8             --             4.7
          Transaction, pre-opening, and other expense                            2.1              1.4             4.1            6.7
          Impairment of intangible assets                                        --               --              17.5           --
          Income tax impact on net income adjustments                            (0.9       )     (2.8      )     (10.7     )    (6.0     )
          Re-measurement of net deferred tax liabilities                         --               (0.6      )     --             2.2
          Total adjustments, continuing operations                               2.5              6.7             27.1           19.8
          Big Fish Games net loss                                                95.2             1.2             96.1           1.5
          Total adjustments                                                      97.7             7.9             123.2          21.3
          Adjusted net (loss) income attributable to CDI                         $   (21.1  )     $   115.0       $  (19.0  )    $  140.0
          Adjusted diluted EPS                                                   $   (0.53  )     $   2.83        $  (0.48  )    $  3.45
          Weighted average shares outstanding - Diluted                          39.5             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 June 30,  Six Months Ended June 30,
          (in millions)             2020        2019             2020        2019
          Total Handle
          Churchill Downs Racetrack $   242.8   $   515.7        $   248.0   $   523.0
          TwinSpires                569.5       468.8            899.3       773.2
          

          (a) Total handle generated by Velocity is not included in total handle from TwinSpires

          CHURCHILL DOWNS INCORPORATED

          SUPPLEMENTAL INFORMATION

          (Unaudited)

                                               Three Months Ended June 30,     Six Months Ended June 30,
          (in millions)                        2020            2019            2020          2019
          Net revenue from external customers:
          Churchill Downs:
          Churchill Downs Racetrack            $   15.6        $   161.0       $  17.5       $  163.3
          Derby City Gaming                    7.7             21.2            29.3          39.9
          Total Churchill Downs                23.3            182.2           46.8          203.2
          Online Wagering:
          TwinSpires                           119.9           95.6            186.5         158.6
          Online Sports Betting and iGaming    1.3             --              2.0           0.1
          Total Online Wagering                121.2           95.6            188.5         158.7
          Gaming:
          Oxford                               0.1             26.3            20.2          50.2
          Calder                               5.7             25.6            27.5          51.0
          Riverwalk Casino                     7.4             14.2            20.1          30.5
          Harlow's Casino                      5.6             13.3            17.3          28.6
          Fair Grounds and VSI                 11.1            30.9            42.7          68.4
          Ocean Downs                          3.1             21.9            17.9          40.3
          Presque Isle                         2.0             37.1            29.6          66.8
          Lady Luck Nemacolin                  2.3             8.3             9.6           10.6
          Total Gaming                         37.3            177.6           184.9         346.4
          All Other                            3.3             22.0            17.8          34.5
          Net revenue from external customers  $   185.1       $   477.4       $  438.0      $  742.8
          Intercompany net revenue:
          Churchill Downs                      $   6.9         $   10.9        $  7.2        $  11.3
          Online Wagering                      0.4             0.4             0.8           0.7
          Gaming                               --              0.2             1.5           1.5
          All Other                            2.9             3.4             5.9           5.6
          Eliminations                         (10.2     )     (14.9     )     (15.4    )    (19.1    )
          Intercompany net revenue             $   --          $   --          $  --         $  --
          

          CHURCHILL DOWNS INCORPORATED

          SUPPLEMENTAL INFORMATION

          (Unaudited)

                                              Three Months Ended June 30, 2020
          (in millions)                       Churchill Downs  Online Wagering  Gaming    Total Segments  All Other Total
          Net revenue from external customers
          Pari-mutuel:
          Live and simulcast racing           $     14.9       $     115.6      $  1.7    $    132.2      $   0.8   $  133.0
          Historical racing                   7.3              --               --        7.3             --        7.3
          Racing event-related services       0.5              --               0.7       1.2             --        1.2
          Gaming                              --               1.5              33.3      34.8            --        34.8
          Other                               0.6              4.1              1.6       6.3             2.5       8.8
          Total                               $     23.3       $     121.2      $  37.3   $    181.8      $   3.3   $  185.1
          
                                              Three Months Ended June 30, 2019
          (in millions)                       Churchill Downs  Online Wagering  Gaming     Total Segments  All Other  Total
          Net revenue from external customers
          Pari-mutuel:
          Live and simulcast racing           $     41.3       $     91.1       $  5.5     $    137.9      $   12.2   $  150.1
          Historical racing                   19.7             --               --         19.7            --         19.7
          Racing event-related services       113.4            --               0.8        114.2           2.2        116.4
          Gaming                              --               --               150.2      150.2           --         150.2
          Other                               7.8              4.5              21.1       33.4            7.6        41.0
          Total                               $     182.2      $     95.6       $  177.6   $    455.4      $   22.0   $  477.4
          

          (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 HRMs or gaming revenue for our casino properties. These amounts were $0.8 million for the three months ended June 30, 2020 and $7.9 million for the three months ended June 30, 2019.

                                              Six Months Ended June 30, 2020
          (in millions)                       Churchill Downs  Online Wagering  Gaming     Total Segments  All Other  Total
          Net revenue from external customers
          Pari-mutuel:
          Live and simulcast racing           $     15.9       $     179.5      $  11.6    $    207.0      $   10.7   $  217.7
          Historical racing                   27.7             --               --         27.7            --         27.7
          Racing event-related services       0.5              --               2.0        2.5             0.1        2.6
          Gaming                              --               2.2              154.9      157.1           --         157.1
          Other                               2.7              6.8              16.4       25.9            7.0        32.9
          Total                               $     46.8       $     188.5      $  184.9   $    420.2      $   17.8   $  438.0
          
                                              Six Months Ended June 30, 2019
          (in millions)                       Churchill Downs  Online Wagering  Gaming     Total Segments  All Other  Total
          Net revenue from external customers
          Pari-mutuel:
          Live and simulcast racing           $     42.7       $     151.6      $  17.7    $    212.0      $   19.7   $  231.7
          Historical racing                   37.4             --               --         $    37.4       --         37.4
          Racing event-related services       113.4            --               2.3        $    115.7      2.2        117.9
          Gaming                              --               0.1              289.2      $    289.3      --         289.3
          Other                               9.7              7.0              37.2       $    53.9       12.6       66.5
          Total                               $     203.2      $     158.7      $  346.4   $    708.3      $   34.5   $  742.8
          

          (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 $8.4 million for the six months ended June 30, 2020 and $15.5 million for the six months ended June 30, 2019.

          CHURCHILL DOWNS INCORPORATED

          SUPPLEMENTAL INFORMATION

          (Unaudited)

          Adjusted EBITDA by segment is comprised of the following:

                                                      Three Months Ended June 30, 2020
          (in millions)                               Churchill Downs  Online Wagering Gaming      Total Segments  All Other     Eliminations    Total
          Net revenue                                 $   30.2         $   121.6       $  37.3     $   189.1       $  6.2        $   (10.2 )     $  185.1
          Taxes and purses                            (13.9    )       (6.6      )     (14.4   )   (34.9     )     (1.7     )    --              (36.6    )
          Marketing and advertising                   (0.3     )       (2.9      )     (0.4    )   (3.6      )     --            --              (3.6     )
          Salaries and benefits                       (4.9     )       (3.0      )     (9.0    )   (16.9     )     (3.4     )    --              (20.3    )
          Content expense                             (0.1     )       (59.7     )     (0.4    )   (60.2     )     (0.1     )    9.7             (50.6    )
          Selling, general and administrative expense (1.2     )       (1.7      )     (3.9    )   (6.8      )     (9.0     )    0.5             (15.3    )
          Other operating expense                     (5.3     )       (9.0      )     (11.1   )   (25.4     )     (3.4     )    --              (28.8    )
          Other income                                --               0.1             (0.1    )   --              0.2           --              0.2
          Adjusted EBITDA                             $   4.5          $   38.8        $  (2.0 )   $   41.3        $  (11.2 )    $   --          $  30.1
          
                                                      Three Months Ended June 30, 2019
          (in millions)                               Churchill Downs Online Wagering  Gaming       Total Segments  All Other    Eliminations    Total
          Net revenue                                 $   193.1       $   96.0         $  177.8     $   466.9       $  25.4      $   (14.9 )     $   477.4
          Taxes and purses                            (35.7     )     (4.3     )       (68.5    )   (108.5    )     (4.5    )    --              (113.0    )
          Marketing and advertising                   (3.6      )     (4.5     )       (5.1     )   (13.2     )     (0.5    )    --              (13.7     )
          Salaries and benefits                       (12.5     )     (2.7     )       (25.4    )   (40.6     )     (6.8    )    --              (47.4     )
          Content expense                             (0.8      )     (51.8    )       (1.7     )   (54.3     )     (2.7    )    14.5            (42.5     )
          Selling, general and administrative expense (2.0      )     (1.9     )       (6.9     )   (10.8     )     (11.1   )    0.3             (21.6     )
          Other operating expense                     (16.6     )     (8.6     )       (21.8    )   (47.0     )     (5.2    )    0.1             (52.1     )
          Other income                                --              --               27.7         27.7            0.2          --              27.9
          Adjusted EBITDA                             $   121.9       $   22.2         $  76.1      $   220.2       $  (5.2 )    $   --          $   215.0
          
                                                      Six Months Ended June 30, 2020
          (in millions)                               Churchill Downs  Online Wagering Gaming       Total Segments  All Other     Eliminations    Total
          Net revenue                                 $   54.0         $   189.3       $  186.4     $   429.7       $  23.7       $   (15.4 )     $   438.0
          Taxes and purses                            (21.0    )       (10.5     )     (73.5    )   (105.0    )     (7.3     )    --              (112.3    )
          Marketing and advertising                   (1.4     )       (6.4      )     (5.7     )   (13.5     )     (0.1     )    0.2             (13.4     )
          Salaries and benefits                       (11.1    )       (6.5      )     (38.5    )   (56.1     )     (9.6     )    --              (65.7     )
          Content expense                             (0.5     )       (92.9     )     (1.6     )   (95.0     )     (1.7     )    14.4            (82.3     )
          Selling, general and administrative expense (2.7     )       (3.1      )     (10.6    )   (16.4     )     (17.9    )    0.7             (33.6     )
          Other operating expense                     (10.9    )       (16.2     )     (30.6    )   (57.7     )     (9.1     )    0.1             (66.7     )
          Other income                                --               0.1             21.1         21.2            0.2           --              21.4
          Adjusted EBITDA                             $   6.4          $   53.8        $  47.0      $   107.2       $  (21.8 )    $   --          $   85.4
          
                                                      Six Months Ended June 30, 2019
          (in millions)                               Churchill Downs Online Wagering Gaming        Total Segments  All Other     Eliminations    Total
          Net revenue                                 $   214.5       $   159.4       $   347.9     $   721.8       $  40.1       $   (19.1 )     $   742.8
          Taxes and purses                            (41.9     )     (7.6      )     (133.5    )   (183.0    )     (8.2     )    --              (191.2    )
          Marketing and advertising                   (4.7      )     (5.5      )     (10.2     )   (20.4     )     (0.6     )    0.2             (20.8     )
          Salaries and benefits                       (17.7     )     (5.2      )     (49.9     )   (72.8     )     (11.4    )    --              (84.2     )
          Content expense                             (1.3      )     (83.9     )     (2.9      )   (88.1     )     (4.5     )    18.2            (74.4     )
          Selling, general and administrative expense (3.7      )     (3.7      )     (13.3     )   (20.7     )     (20.6    )    0.5             (40.8     )
          Other operating expense                     (21.9     )     (14.4     )     (40.8     )   (77.1     )     (8.7     )    0.2             (85.6     )
          Other income                                --              --              43.6          43.6            0.2           --              43.8
          Adjusted EBITDA                             $   123.3       $   39.1        $   140.9     $   303.3       $  (13.7 )    $   --          $   289.6
          

          CHURCHILL DOWNS INCORPORATED

          SUPPLEMENTAL INFORMATION

          (Unaudited)

                                                                                        Three Months Ended June 30,      Six Months Ended June 30,
          (in millions)                                                                 2020             2019            2020            2019
          Reconciliation of Comprehensive Income to Adjusted EBITDA:
          Net (loss) income attributable to CDI                                         $   (118.8 )     $   107.1       $   (142.2 )    $  118.7
          Net loss attributable to noncontrolling interest                              --               --              0.1             --
          Net (loss) income before noncontrolling interest                              (118.8     )     107.1           (142.3     )    118.7
          Loss from discontinued operations, net of tax                                 95.2             1.2             96.1            1.5
          (Loss) income from continuing operations, net of tax                          (23.6      )     108.3           (46.2      )    120.2
          Additions:
          Depreciation and amortization                                                 22.1             21.5            44.1            42.3
          Interest expense                                                              20.3             19.4            39.6            33.1
          Income tax provision (benefit)                                                (7.9       )     38.6            (19.5      )    45.1
          EBITDA                                                                        $   10.9         $   187.8       $   18.0        $  240.7
          Adjustments to EBITDA:
          Selling, general and administrative:
          Stock-based compensation expense                                              $   6.1          $   7.4         $   10.4        $  12.1
          Other charges                                                                 (0.1       )     --              (0.1       )    0.5
          Pre-opening expense and other expense                                         1.9              0.9             3.6             2.2
          Impairment of intangible assets                                               --               --              17.5            --
          Transaction expense, net                                                      0.2              0.6             0.5             4.1
          Other income, expense:
          Interest, depreciation and amortization expense related to equity investments 9.8              9.7             19.3            13.2
          Changes in fair value of Midwest Gaming's interest rate swaps                 1.3              7.9             16.2            12.2
          Midwest Gaming's recapitalization and transactions costs                      --               0.8             --              4.7
          Other                                                                         --               (0.1      )     --              (0.1     )
          Total adjustments to EBITDA                                                   19.2             27.2            67.4            48.9
          Adjusted EBITDA                                                               $   30.1         $   215.0       $   85.4        $  289.6
          Adjusted EBITDA by segment:
          Churchill Downs                                                               $   4.5          $   121.9       $   6.4         $  123.3
          Online Wagering                                                               38.8             22.2            53.8            39.1
          Gaming                                                                        (2.0       )     76.1            47.0            140.9
          Total segment Adjusted EBITDA                                                 41.3             220.2           107.2           303.3
          All Other                                                                     (11.2      )     (5.2      )     (21.8      )    (13.7    )
          Total Adjusted EBITDA                                                         $   30.1         $   215.0       $   85.4        $  289.6
          

          CHURCHILL DOWNS INCORPORATED

          SUPPLEMENTAL OPERATIONAL METRICS

          (Unaudited)

                                                Three Months Ended June 30,                  Six Months Ended June 30,
          (in millions)                         2020           2019         Change           2020         2019         Change
          Gaming Segment
          Revenue                               $  37.3        $  177.8     $  (140.5 )      $  186.4     $  347.9     $  (161.5 )
          Adjusted EBITDA                       (2.0    )      76.1         (78.1     )      47.0         140.9        (93.9     )
          Margin                                (5.4    )  %   42.8     %   (48.2     )  %   25.2     %   40.5     %   (15.3     )  %
          Wholly-owned casino margin            1.3        %   29.7     %   (28.4     )  %   17.4     %   30.6     %   (13.2     )  %
          Same store wholly-owned casino margin 1.3        %   29.7     %   (28.4     )  %   24.9     %   34.7     %   (9.8      )  %
          

          (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) Same store wholly-owned casino margin excludes results from Presque Isle and Lady Luck Nemacolin for the six months ended June 30, 2020 and June 30, 2019. Presque Isle became a wholly-owned casino on January 11, 2019 and we acquired substantially all of the assets of Lady Luck Nemacolin on March 8, 2019. Therefore, both are included for the three months ended June 30, 2020 and are excluded for the six months ended June 30, 2020.

          CHURCHILL DOWNS INCORPORATED

          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 March 2020. In May 2020, we began to reopen our properties with certain patron capacity limitations and gaming restrictions as well as other initiatives to facilitate social distancing. Set forth below is a summary of the dates of closure and reopening of our properties, as well as regulatory and social distancing restrictions currently in place at each property:

                                                                                 Regulatory Restrictions:  Social Distancing Limitations:
                                           2020               2020               Patron Capacity           Slots/HRMs/VLTs Table Games
                                           Date of Closure    Date of Reopening
          Churchill Downs Segment
          Derby City Gaming                March 15           June 8             50%                       66%             N/A
          Gaming Segment
          Wholly-Owned Properties
          Calder Casino and Racing         March 16 / July 2  June 12            N/A                       N/A             N/A
          Fair Grounds Slots               March 16           June 13            25%                       50%             N/A
          Video Services, LLC              March 16           May 18             50%                       70%             N/A
          Harlow's Casino Resort and Spa   March 16           May 21             50%                       66%             60%
          Ocean Downs Casino and Racetrack March 15           June 19            50%                       70%             60%
          Oxford Casino and Hotel          March 16           July 9             200 Persons               N/A             N/A
          Presque Isle Downs and Casino    March 16           June 26            50%                       60%             60%
          Riverwalk Casino Hotel           March 16           May 21             50%                       66%             60%
          Managed Properties
          Lady Luck Nemacolin              March 16           June 12            50%                       50%             60%
          Equity Investments
          Miami Valley Gaming and Racing   March 14           June 19            50%                       50%             N/A
          Rivers Casino Des Plaines        March 15           July 1             50%                       66%             60%
          

          (a) CDI initially reopened Calder on June 12, 2020, but temporarily suspended operations a second time at Calder on July 2, 2020 following an emergency order issued by the mayor of Miami-Dade County to close entertainment venues in an effort to control the rise in COVID-19 cases.

          (b) In compliance with state requirements, Oxford Casino is currently operating under a total capacity limit of 200 people, inclusive of both patrons and employees.

          CHURCHILL DOWNS INCORPORATED

          SUPPLEMENTAL JOINT VENTURE FINANCIAL STATEMENTS

          (Unaudited)

          Summarized financial information for our equity investments is comprised of the following:

                                          Summarized Income Statement
                                          Three Months Ended June 30,     Six Months Ended June 30,
          (in millions)                   2020            2019            2020          2019
          Net revenue                     $   6.8         $   166.2       $  144.6      $  255.7
          Operating and SG&A expense      7.2             119.1           108.0         180.1
          Depreciation and amortization   4.1             3.3             8.3           5.5
          Total operating expense         11.3            122.4           116.3         185.6
          Operating income                (4.5      )     43.8            28.3          70.1
          Interest and other expense, net (13.4     )     (25.3     )     (49.2    )    (42.3    )
          Net (loss) income               $   (17.9 )     $   18.5        $  (20.9 )    $  27.8
          
                                                 Summarized Balance Sheet
          (in millions)                          June 30, 2020   December 31, 2019
          Assets
          Current assets                         $   98.3        $    64.0
          Property and equipment, net            271.2           256.1
          Other assets, net                      246.1           240.1
          Total assets                           $   615.6       $    560.2
          Liabilities and Members' Deficit
          Current liabilities                    $   91.3        $    73.3
          Long-term debt                         790.1           745.0
          Other liabilities                      43.9            20.6
          Members' deficit                       (309.7    )     (278.7     )
          Total liabilities and members' deficit $   615.6       $    560.2
          

          Contact: Nick Zangari

          (502) 394-1157

          Nick.Zangari@kyderby.com

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