Nasdaq:CHDN

Churchill Downs Incorporated Reports 2022 First Quarter Results

Published

2 years ago

May 2, 2022

LOUISVILLE, Ky., April 27, 2022 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (Nasdaq: CHDN) (the “Company”, “we”, “us”, “our”) today reported business results for the first quarter ended March 31, 2022.

First Quarter 2022 Highlights

Record First Quarter 2022 results:
- Record net revenue of $364.1 million compared to $324.3 million in first quarter 2021
- Record net income of $42.1 million compared to $36.1 million in first quarter 2021
- Record Adjusted EBITDA of $128.5 million compared to $110.6 million in first quarter 2021
Our Gaming segment delivered double digit revenue and Adjusted EBITDA growth in first quarter 2022 compared to first quarter 2021
Announced a definitive agreement to acquire substantially all of the assets of Peninsula Pacific Entertainment LLC (“P2E”) for total consideration of $2.485 billion
- Completed the financing for the P2E acquisition by closing a $1.2 billion senior secured revolver due 2027, an $800 million senior secured delayed draw term loan A due 2027, and issuing $1.2 billion of senior secured notes due 2030 on April 13, 2022
Completed the first two phases of the previously announced $90 million expansion of Rivers Casino Des Plaines (“Rivers Des Plaines”)
Announced a definitive agreement to acquire Chasers Poker Room in Salem, New Hampshire, with plans to develop an expanded charitable gaming facility to accommodate historical racing machines (“HRMs”) with a total investment of up to $150 million

CONSOLIDATED RESULTS

	First Quarter
(in millions, except per share data)		2022		2021

Net revenue	$	364.1	$	324.3
Net income	$	42.1	$	36.1
Diluted EPS	$	1.08	$	0.91
Adjusted EBITDA^(a)	$	128.5	$	110.6

(a) This is a non-GAAP measure. See explanation of non-GAAP measures below.

First Quarter 2022 Results

The Company’s first quarter of 2022 net income was $42.1 million compared to $36.1 million in the prior year’s first quarter.

The following items impacted the comparability of the Company’s first quarter net income:

$6.3 million after-tax increase in transaction, pre-opening and other expenses from the prior year quarter related primarily to pre-opening expenses for Turfway Park and P2E transaction expenses;
$3.5 million after-tax non-cash impairment charge driven by the decision to exit the direct online Sports and Casino business; and
$0.7 million primarily related to our equity portion of Miami Valley Gaming’s after-tax non-cash impairment charge related to prior expansion plans.

These increases were partially offset by:

$4.5 million after-tax benefit increase related to our equity portion of the non-cash change in the fair value of Rivers Des Plaines’ interest rate swaps; and
$0.7 million after-tax decrease related to our equity portion of Rivers Des Plaines’ legal reserves and transaction costs.

Excluding the items above, first quarter 2022 net income increased $11.3 million primarily due to the following:

$12.9 million after-tax increase from the prior year quarter driven by the results of our operations and equity income from our unconsolidated affiliates,
Partially offset by $1.6 million after-tax increase from the prior year quarter in interest expense associated with higher outstanding debt balances.

SEGMENT RESULTS

During the first quarter of 2022, we updated our operating segments to include the results of our United Tote business in the TwinSpires segment. We are evolving our strategy to integrate the United Tote offering with TwinSpires Horse Racing, which we believe will create additional business to business revenue opportunities. Results of our United Tote business were previously included in our All Other segment.

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

Live and Historical Racing

	First Quarter
(in millions)		2022		2021

Net revenue	$	87.2	$	64.7
Adjusted EBITDA		27.9		18.3

For the first quarter of 2022, net revenue increased $22.5 million due primarily to an $11.0 million increase at Oak Grove Racing, Gaming and Hotel (“Oak Grove”), a $9.9 million increase from Derby City Gaming, and a $1.9 million increase at Newport Racing & Gaming (“Newport”). Oak Grove and Derby City Gaming reflected the benefit of the elimination of the operating restrictions that were in place during the first quarter of 2021 and overall continued growth in the businesses.

Adjusted EBITDA increased $9.6 million due to a $5.3 million increase at Oak Grove, a $5.2 million increase at Derby City Gaming, and a $0.7 million increase at Newport from the increase in net revenue. Partially offsetting these increases was a $1.2 million decrease at Churchill Downs Racetrack due to the timing of Derby Week expenses and a $0.4 million decrease from higher expenses at Turfway Park.

TwinSpires

	First Quarter
(in millions)		2022		2021

Net revenue	$	101.4	$	105.0
Adjusted EBITDA		24.1		23.1

For the first quarter of 2022, net revenue decreased $3.6 million from the prior year quarter primarily due to a $6.9 million decrease from Horse Racing that was partially offset by a $3.3 million increase from Sports and Casino. Horse Racing net revenue decreased as a portion of our patrons returned to wagering at brick-and-mortar facilities in the current quarter instead of wagering online. Sports and Casino net revenue increased as a result of our expansion into additional states during 2021.

Adjusted EBITDA increased $1.0 million primarily due to a $3.7 million increase from our Sports and Casino business due to decreased marketing and promotional activities and a $0.6 million increase at United Tote. Partially offsetting these increases was a decrease from Horse Racing of $3.3 million due to the reduction in net revenue.

Gaming

	First Quarter
(in millions)		2022		2021

Net revenue	$	179.2	$	154.0
Adjusted EBITDA		91.1		82.4

For the first quarter of 2022, net revenue increased $25.2 million primarily due to certain capacity restrictions on patrons and gaming during the prior year quarter that were no longer in place at Oxford, Calder, and Presque Isle.

Adjusted EBITDA increased $8.7 million driven by a $5.6 million increase at our wholly-owned Gaming properties due to increased net revenue and a $3.1 million increase from our equity investments, both of which were due to certain capacity restrictions on patrons and gaming during the prior year quarter.

All Other

For the first quarter of 2022, All Other Adjusted EBITDA decreased $1.4 million driven by a $2.6 million increase in legal fees and timing of other Corporate expenses that was partially offset by a $1.2 million decrease in the Arlington operating loss in the current year quarter compared to the prior year quarter as a result of Arlington ceasing racing and simulcast operations at the end of 2021. We are excluding Arlington’s operating results from Adjusted EBITDA in 2022 pending the sale of the property to the Chicago Bears.

CAPITAL MANAGEMENT

Share Repurchase Program:

The Company repurchased 116,863 shares of its common stock in conjunction with its publicly announced share repurchase program at a total cost of $25.0 million in the first quarter of 2022. We had approximately $420.6 million repurchase authority remaining under this program as of March 31, 2022.

April 2022 Financing Transactions:

On April 13, 2022, the Company announced an amendment of its senior secured credit agreement (the “Credit Agreement Amendment”) to extend the maturity date of its existing revolving credit facility to 2027 and to increase the commitments under the existing revolving credit facility from $700 million to $1.2 billion (the “Revolver”). The Credit Agreement Amendment also provides for a senior secured delayed draw term loan A credit facility due 2027 in the amount of $800 million (the “Delayed Draw Term Loan A”) and makes certain other changes to its existing credit agreement. The interest rate applicable to borrowings on the Revolver and Delayed Draw Term Loan A will be secured financing overnight rate-based plus a spread, determined by the Company’s total net leverage ratio. The Company also successfully closed into escrow the previously announced offering of $1.2 billion in aggregate principal amount of its 5.750% senior notes due 2030.

Conference Call

A conference call regarding this news release is scheduled for Thursday, April 28, 2022, 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 9395627 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, April 28, 2022, 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 Rivers Des Plaines; Rivers Des Plaines’ legal reserves and transaction costs; transaction expense, which includes acquisition and disposition related charges, 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, disposition, and land sale related charges;
- Direct online Sports and Casino business exit 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 Other expenses, net in the Reconciliation of Comprehensive Income to Adjusted EBITDA.

For segment reporting, Adjusted EBITDA includes intercompany revenue and expense totals that are eliminated in the consolidated statements of comprehensive income. Refer to the Reconciliation of Comprehensive Income to Adjusted EBITDA included herewith for additional information.

About Churchill Downs Incorporated

Churchill Downs Incorporated is an industry-leading racing, online wagering and gaming entertainment company anchored by our iconic flagship event, the Kentucky Derby. We own and operate three entertainment venues with approximately 3,050 HRMs in Kentucky. We also own and operate TwinSpires, one of the largest and most profitable online wagering platforms for horse racing in the U.S. and we have nine retail sportsbooks. We are also a leader in brick-and-mortar casino gaming in eight states with approximately 11,000 slot machines and video lottery terminals and 200 table games. Additional information about Churchill Downs Incorporated can be found online at www.churchilldownsincorporated.com.

This news release contains 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 receipt of regulatory approvals on terms desired or anticipated, unanticipated difficulties or expenditures relating to the proposed transaction, including, without limitation, difficulties that result in the failure to realize expected synergies, efficiencies and cost savings from the proposed transaction within the expected time period (if at all), our ability to obtain financing on the anticipated terms and schedule, disruptions of our or P2E’s current plans, operations and relationships with customers and suppliers caused by the announcement and pendency of the proposed transaction, our and P2E’s ability to consummate a sale-leaseback transaction with respect to the Hard Rock Sioux City on terms desired or anticipated, the impact of the novel coronavirus (COVID-19) pandemic, including the emergence of variant strains, and related economic matters on our results of operations, financial conditions and prospects; the occurrence of extraordinary events, such as terrorist attacks, public health threats, civil unrest, and inclement weather; the effect of economic conditions on our consumers’ confidence and discretionary spending or our access to credit; additional or increased taxes and fees; the impact of significant competition, and the expectation the competition levels will increase; changes in consumer preferences, attendance, wagering, and sponsorships; loss of key or highly skilled personnel; lack of confidence in the integrity of our core businesses or any deterioration in our reputation; risks associated with equity investments, strategic alliances and other third-party agreements; inability to respond to rapid technological changes in a timely manner; concentration and evolution of slot machine and HRM manufacturing and other technology conditions that could impose additional costs; inability to negotiate agreements with industry constituents, including horsemen and other racetracks; inability to successfully focus on market access and retail operations for our TwinSpires Sports and Casino business and effectively compete; inability to identify and / or complete acquisitions, divestitures, development of new venues or the expansion of existing facilities on time, on budget, or as planned; general risks related to real estate ownership and significant expenditures, including fluctuations in market values and environmental regulations; reliance on our technology services and catastrophic events and system failures disrupting our operations; online security risk, including cyber-security breaches, or loss or misuse of our stored information as a result of a breach, including customers’ personal information, could lead to government enforcement actions or other litigation; personal injury litigation related to injuries occurring at our racetracks; compliance with the Foreign Corrupt Practices Act or applicable money-laundering regulations; payment-related risks, such as risk associated with fraudulent credit card and debit card use; work stoppages and labor issues; risks related to pending or future legal proceedings and other actions; highly regulated operations and changes in the regulatory environment could adversely affect our business; restrictions in our debt facilities limiting our flexibility to operate our business; failure to comply with the financial ratios and other covenants in our debt facilities and other indebtedness; and increase in our insurance costs, or obtain similar insurance coverage in the future, and inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events.

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 INCOME
(Unaudited)

	Three Months Ended March 31,
(in millions, except per common share data)		2022			2021
Net revenue:
Live and Historical Racing	$	86.0		$	63.2
TwinSpires		100.3			103.5
Gaming		177.3			152.0
All Other		0.5			5.6
Total net revenue		364.1			324.3
Operating expense:
Live and Historical Racing		67.7			54.7
TwinSpires		74.9			77.5
Gaming		125.2			106.3
All Other		3.1			8.8
Selling, general and administrative expense		35.9			30.2
Asset impairments		4.9			—
Transaction expense, net		5.0			0.1
Total operating expense		316.7			277.6
Operating income		47.4			46.7
Other income (expense):
Interest expense, net		(21.3	)		(19.4	)
Equity in income of unconsolidated affiliates		32.5			24.9
Miscellaneous, net		—			0.1
Total other income (expense)		11.2			5.6
Income from operations before provision for income taxes		58.6			52.3
Income tax provision		(16.5	)		(16.2	)
Net income	$	42.1		$	36.1

Net income per common share data:
Basic net income	$	1.10		$	0.93
Diluted net income	$	1.08		$	0.91
Weighted average shares outstanding:
Basic		38.3			39.0
Diluted		38.8			39.6

CHURCHILL DOWNS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Unaudited)

(in millions)	March 31, 2022			December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	294.5		$	291.3
Restricted cash		65.5			64.3
Accounts receivable, net		46.0			42.3
Income taxes receivable		59.8			66.0
Other current assets		54.5			37.6
Total current assets		520.3			501.5
Property and equipment, net		1,035.8			994.9
Investment in and advances to unconsolidated affiliates		655.5			663.6
Goodwill		366.8			366.8
Other intangible assets, net		351.9			348.1
Other assets		18.8			18.9
Long-term assets held for sale		87.8			87.8
Total assets	$	3,036.9		$	2,981.6
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	96.9		$	81.6
Accrued expenses and other current liabilities		224.3			232.6
Current deferred revenue		104.0			47.7
Current maturities of long-term debt		7.0			7.0
Dividends payable		—			26.1
Total current liabilities		432.2			395.0
Long-term debt, net of current maturities and loan origination fees		667.2			668.6
Notes payable, net of debt issuance costs		1,292.7			1,292.4
Non-current deferred revenue		13.3			13.3
Deferred income taxes		263.1			252.9
Other liabilities		50.6			52.6
Total liabilities		2,719.1			2,674.8
Commitments and contingencies
Shareholders’ equity:
Preferred stock		—			—
Common stock		—			—
Retained earnings		318.7			307.7
Accumulated other comprehensive loss		(0.9	)		(0.9	)
Total shareholders’ equity		317.8			306.8
Total liabilities and shareholders’ equity	$	3,036.9		$	2,981.6

CHURCHILL DOWNS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

	Three Months Ended March 31,
(in millions)		2022			2021
Cash flows from operating activities:
Net income	$	42.1		$	36.1
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		25.1			26.0
Distributions from unconsolidated affiliates		40.6			22.0
Equity in income of unconsolidated affiliates		(32.5	)		(24.9	)
Stock-based compensation		7.0			5.5
Deferred income taxes		10.2			5.7
Asset impairments		4.9			—
Amortization of operating lease assets		1.3			0.2
Other		1.2			1.2
Changes in operating assets and liabilities:
Income taxes		6.4			9.2
Deferred revenue		56.3			21.0
Other assets and liabilities		(27.4	)		2.2
Net cash provided by operating activities		135.2			104.2
Cash flows from investing activities:
Capital maintenance expenditures		(10.0	)		(4.7	)
Capital project expenditures		(45.5	)		(7.6	)
Other		(7.3	)		—
Net cash used in investing activities		(62.8	)		(12.3	)
Cash flows from financing activities:
Proceeds from borrowings under long-term debt obligations		—			780.8
Repayments of borrowings under long-term debt obligations		(1.8	)		(425.7	)
Payment of dividends		(25.7	)		(24.8	)
Repurchase of common stock		(24.3	)		(193.9	)
Taxes paid related to net share settlement of stock awards		(13.1	)		(12.6	)
Debt issuance costs		—			(5.8	)
Change in bank overdraft		(3.0	)		(12.8	)
Other		(0.1	)		1.6
Net cash (used in) provided by financing activities		(68.0	)		106.8
Cash flows from discontinued operations:
Operating activities of discontinued operations		—			(124.0	)
Net increase in cash, cash equivalents and restricted cash		4.4			74.7
Cash, cash equivalents and restricted cash, beginning of period		355.6			121.0
Cash, cash equivalents and restricted cash, end of period	$	360.0		$	195.7

CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)

	Three Months Ended March 31,
(in millions)		2022			2021
GAAP net income	$	42.1		$	36.1

Adjustments, continuing operations:
Changes in fair value of interest rate swaps related to Rivers Des Plaines		(10.4	)		(4.2	)
Legal reserves and transaction costs related to Rivers Des Plaines		0.3			1.3
Other charges		1.0			—
Transaction, pre-opening, and other expense		9.6			0.7
Asset impairments		4.9			—
Income tax impact on net income adjustments^(a)		(1.6	)		0.7
Total adjustments		3.8			(1.5	)
Adjusted net income attributable to Churchill Downs Incorporated	$	45.9		$	34.6

Adjusted diluted EPS	$	1.18		$	0.87

Weighted average shares outstanding – Diluted		38.8			39.6

(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 March 31,
(in millions)		2022		2021
Total Handle
Churchill Downs Racetrack	$	4.4	$	3.8
TwinSpires Horse Racing^(a)		394.9		443.1

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

CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)

	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

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	$	—		$	—

CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)

	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 racing 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.

CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)

Adjusted EBITDA by segment is comprised of the following:

	Three Months Ended March 31, 2022
(in millions)	Live and Historical Racing			TwinSpires			Gaming			Total Segments			All Other			Eliminations			Total
Net revenue	$	87.2		$	101.4		$	179.2		$	367.8		$	0.1		$	(4.2	)	$	363.7

Taxes and purses		(26.8	)		(7.5	)		(67.3	)		(101.6	)		—			—			(101.6	)
Marketing and advertising		(2.9	)		(5.1	)		(3.5	)		(11.5	)		—			—			(11.5	)
Salaries and benefits		(10.9	)		(6.7	)		(23.9	)		(41.5	)		—			—			(41.5	)
Content expense		(0.6	)		(43.1	)		(1.5	)		(45.2	)		—			3.9			(41.3	)
Selling, general and administrative expense		(3.3	)		(2.6	)		(6.6	)		(12.5	)		(14.5	)		0.3			(26.7	)
Other operating expense		(14.8	)		(12.3	)		(20.0	)		(47.1	)		(0.2	)		—			(47.3	)
Other income		—			—			34.7			34.7			—			—			34.7
Adjusted EBITDA	$	27.9		$	24.1		$	91.1		$	143.1		$	(14.6	)	$	—		$	128.5

	Three Months Ended March 31, 2021
(in millions)	Live and Historical Racing			TwinSpires			Gaming			Total Segments			All Other			Eliminations			Total
Net revenue	$	64.7		$	105.0		$	154.0		$	323.7		$	7.2		$	(6.6	)	$	324.3

Taxes and purses		(20.0	)		(6.4	)		(59.3	)		(85.7	)		(3.1	)		—			(88.8	)
Marketing and advertising		(2.1	)		(8.5	)		(1.4	)		(12.0	)		(0.1	)		—			(12.1	)
Salaries and benefits		(10.0	)		(6.2	)		(19.9	)		(36.1	)		(1.2	)		—			(37.3	)
Content expense		(0.6	)		(46.5	)		(1.0	)		(48.1	)		(1.3	)		6.2			(43.2	)
Selling, general and administrative expense		(3.0	)		(2.6	)		(6.0	)		(11.6	)		(12.6	)		0.3			(23.9	)
Other operating expense		(10.7	)		(11.7	)		(15.5	)		(37.9	)		(2.2	)		0.1			(40.0	)
Other income		—			—			31.5			31.5			0.1			—			31.6
Adjusted EBITDA	$	18.3		$	23.1		$	82.4		$	123.8		$	(13.2	)	$	—		$	110.6

CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)

	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

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 March 31,
(in millions)		2022		2021
Net revenue	$	177.2	$	138.7

Operating and SG&A expense		118.2		85.6
Depreciation and amortization		5.3		4.3
Total operating expense		123.5		89.9
Operating income		53.7		48.8
Interest and other expense, net		4.1		(4.6	)
Net income	$	57.8	$	44.2

	Summarized Balance Sheet
(in millions)	March 31, 2022			December 31, 2021
Assets
Current assets	$	96.8		$	96.0
Property and equipment, net		336.4			312.3
Other assets, net		263.5			264.1
Total assets	$	696.7		$	672.4

Liabilities and Members’ Deficit
Current liabilities	$	128.6		$	95.3
Long-term debt		807.4			786.9
Other liabilities		3.6			20.6
Members’ deficit		(242.9	)		(230.4	)
Total liabilities and members’ deficit	$	696.7		$	672.4

CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)

Planned capital projects for the Company are as follows:

(in millions)	Project	Target Completion	Planned Spend

Live and Historical Racing Segment
Churchill Downs Racetrack	Home Stretch Club	May 2022	$45
	Turn 1 Experience	May 2023	$90
	Paddock Project	May 2024	$185 – $200
Turfway Park	HRM Facility	September 2022	$148
Derby City Gaming	Expansion and Hotel	Late 2022 / Second Quarter 2023	$76
Derby City Gaming Downtown	Property Build Out	Second Quarter 2023	$80
Oak Grove	Oak Grove Annex	TBD	TBD
New Hampshire Charitable Gaming Facility	Acquisition and Property Build Out	TBD	$150

Gaming Segment
Managed Properties
Queen of Terre Haute Casino Resort	Property Build Out	Late 2023	up to $260
Fair Grounds and VSI	HRMs in OTBs	2022	$35
Equity Investments
Rivers Des Plaines^(a)	Expansion	Spring 2022	$90
Miami Valley Gaming^(a)	Outdoor Gaming Patio Expansion	Third Quarter 2022	$12

(a) Capital investments at Rivers Des Plaines and Miami Valley Gaming are funded through operating cash flow and debt facilities at the joint venture entity and are not funded by CDI.

Contact: Nick Zangari
(502) 394-1157
[email protected]

Nasdaq:CHDN

Churchill Downs Incorporated and NBC Sports Extend Historic Partnership

Published

1 day ago

May 5, 2024

GlobeNewswire

churchill-downs-incorporated-and-nbc-sports-extend-historic-partnership

Kentucky Derby to be Presented on NBC and Peacock through 2032

LOUISVILLE, Ky., May 04, 2024 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (Nasdaq: CHDN) (“CDI”) announced today that NBC Sports will continue to host the Kentucky Derby on NBC and Peacock through 2032. CDI’s partnership with NBC Sports began in 2001. This multi-year partnership extension will make NBC the first media company to present the most prestigious event in horse racing for over three decades.

“As we celebrate the 150^th running of the Kentucky Derby, Churchill Downs is proud to extend the relationship with NBC Sports,” said Churchill Downs CEO Bill Carstanjen. “As our media partner for the last 23 years, NBC has artfully captured the most exciting two minutes in sports and the spectacle of the senses that surrounds it.”

“Telling the rich stories surrounding the Kentucky Derby on the first Saturday in May is part of the fabric of NBC Sports, and we are thrilled to continue that tradition with Churchill Downs,” said Rick Cordella, President, NBC Sports. “We look forward to surrounding the Kentucky Oaks and Kentucky Derby with wall-to-wall coverage and extensive promotion on the platforms of NBCUniversal.”

The extension includes multiplatform rights to the Kentucky Derby, Kentucky Oaks, and Derby and Oaks Day programming, which will be presented on NBC, Peacock, USA Network and additional NBCU platforms.

About Churchill Downs Incorporated

Churchill Downs Incorporated (“CDI”) (Nasdaq: CHDN) has been creating extraordinary entertainment experiences for nearly 150 years, beginning with the company’s most iconic and enduring asset, the Kentucky Derby. Headquartered in Louisville, Kentucky, CDI has expanded through the development of live and historical racing entertainment venues, the growth of the TwinSpires horse racing online wagering business and the operation and development of regional casino gaming properties. www.churchilldownsincorporated.com

This news release contains 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,” “scheduled,” and similar words or similar expressions (or negative versions of such words or expressions), although some forward-looking statements are expressed differently.

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, that could cause actual results to differ materially from expectations include the following: the occurrence of extraordinary events, such as terrorist attacks, public health threats, civil unrest, and inclement weather, including as a result of climate change; the effect of economic conditions on our consumers’ confidence and discretionary spending or our access to credit, including the impact of inflation; additional or increased taxes and fees; the impact of any pandemics, epidemics, or outbreaks of infectious diseases, including possible new variants of COVID-19, and related economic matters on our results of operations, financial conditions and prospects; lack of confidence in the integrity of our core businesses or any deterioration in our reputation; loss of key or highly skilled personnel, as well as general disruptions in the general labor market; the impact of significant competition, and the expectation that competition levels will increase; changes in consumer preferences, attendance, wagering, and sponsorships; risks associated with equity investments, strategic alliances and other third-party agreements; inability to respond to rapid technological changes in a timely manner; concentration and evolution of slot machine and historical racing machine (HRM) manufacturing and other technology conditions that could impose additional costs; failure to enter into or maintain agreements with industry constituents, including horsemen and other racetracks; inability to successfully focus on market access and retail operations for our TwinSpires sports betting business and effectively compete; online security risk, including cyber-security breaches, or loss or misuse of our stored information as a result of a breach including customers’ personal information could lead to government enforcement actions or other litigation; reliance on our technology services and catastrophic events and system failures disrupting our operations; inability to identify, complete, or fully realize the benefits of our proposed acquisitions, divestitures, development of new venues or the expansion of existing facilities on time, on budget, or as planned; difficulty in integrating recent or future acquisitions into our operations; cost overruns and other uncertainties associated with the development of new venues and the expansion of existing facilities; general risks related to real estate ownership and significant expenditures, including risks related to environmental liabilities; personal injury litigation related to injuries occurring at our racetracks; compliance with the Foreign Corrupt Practices Act or other similar laws and regulations, or applicable anti-money laundering regulations; payment-related risks, such as risk associated with fraudulent credit card or debit card use; work stoppages and labor problems; risks related to pending or future legal proceedings and other actions; highly regulated operations and changes in the regulatory environment could adversely affect our business; restrictions in our debt facilities limiting our flexibility to operate our business; failure to comply with the financial ratios and other covenants in our debt facilities and other indebtedness; increases to interest rates (due to inflation or otherwise), disruption in the credit markets or changes to our credit ratings may adversely affect our business; increase in our insurance costs, or inability to obtain similar insurance coverage in the future, and any inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events; and other factors described under the heading “Risk Factors” in our most recent Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission.

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.


Investor Contact: Kaitlin Buzzetto		Media Contact: Tonya Abeln
(502) 394-1091		(502) 386-1742
[email protected]		[email protected]

Nasdaq:CHDN

Mystik Dan Wins the Historic 150th Running of the Kentucky Derby Presented by Woodford Reserve

Published

1 day ago

May 5, 2024

GlobeNewswire

mystik-dan-wins-the-historic-150th-running-of-the-kentucky-derby-presented-by-woodford-reserve

New All-Time Handle Record Set for the Kentucky Derby Race, Kentucky Derby Day Program, and Kentucky Derby Week Races

LOUISVILLE, Ky., May 04, 2024 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (Nasdaq: CHDN) (the “Company”, “CDI”) announced today that a jubilant crowd of nearly 157,000 Derby fans gathered at Churchill Downs Racetrack (“Churchill Downs”) to celebrate and witness Mystik Dan claim the Garland of Roses at the 150^th running of the Kentucky Derby presented by Woodford Reserve at 18-1 odds under mostly cloudy skies. Wagering from all sources was the highest all-time on the Kentucky Derby race, the Kentucky Derby Day program, and Kentucky Derby Week races.

Mystik Dan, owned by 4 G Racing, LLC (Brent Gasaway), Lance Gasaway, Daniel Hamby, III, and Valley View Farm, LLC (Scott Hamby), trained by Kenneth McPeek, bred in Kentucky by Lance Gasaway, Daniel Hamby, and 4 G Racing, LLC, and ridden by Brian Hernandez Jr., rallied from off the pace to win by a nose in a photo finish. Mystik Dan covered the mile and a quarter in 2:03.34 over a fast track. This marks an extraordinary weekend of racing for trainer Kenneth McPeek and jockey Brian Hernandez Jr. who scored victories in both the Kentucky Oaks and Kentucky Derby.

Wagering from all sources on the Kentucky Derby Day program set a new record of $320.5 million, beating last year’s record of $288.7 million. All-sources wagering on the Kentucky Derby race was a new record of $210.7 million, beating the previous record of $188.7 million set in 2023. All-sources handle for Derby Week rose to a new record of $446.6 million, beating last year’s record of $412.0 million.

TwinSpires, the official betting partner of the Kentucky Derby, handled a new record of $92.1 million in wagering on Churchill Downs races for the Kentucky Derby Day program, compared to last year’s record of $75.5, including all settled future wagers and affiliate wagering. TwinSpires’ handle on the Kentucky Derby race was a new record of $60.9 million, beating last year’s record of $48.9 million, including all settled future wagers and affiliate wagering.

The Kentucky Derby race continued to attract global attention with two starters from Japan with Forever Young finishing third and T O Password finishing fifth. Forever Young was the winner of the UAE Derby in Dubai and T O Password qualified through the Japan Road to the Derby. All-sources wagering from Japan on the Kentucky Derby race was a new record of $10.1 million, beating the previous record of $8.3 million in 2022.

CDI debuted the all-new Paddock with two new luxury reserved seating areas – The Woodford Reserve Paddock Club and Sports Illustrated’s Club SI. These luxury reserved seating areas offer customers an opportunity to view horses as they are saddled in the paddock and experience the thrill of the races from the rail of the racetrack.

“The Kentucky Derby is a testament to the enduring spirit of sportsmanship, unity and the power of tradition. We were honored to debut our transformational new Paddock as we celebrated this milestone 150^th Run for the Roses. The new Paddock has fundamentally enhanced the experience of all of our guests as they pass through our front gates and is a stepping stone to the next chapter of this time-honored event,” said Bill Carstanjen, CEO of CDI. “We expect the Kentucky Derby Week Adjusted EBITDA to reflect a new record with $26 to $28 million of growth over the prior record set last year. As we reflect on 150 years of our storied past, we remain committed to innovating new experiences for Derby fans.”

Use of Non-GAAP Measures

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 EBITDA includes our portion of EBITDA from our equity investments.

Adjusted EBITDA excludes:

Transaction expense, net which includes:
- Acquisition, disposition, and property sale related charges;
- Other transaction expense, including legal, accounting, and other deal-related expense;
Stock-based compensation expense;
Asset impairments;
Gain on property sales;
Legal reserves;
Pre-opening expense; and
Other charges, recoveries, and expenses.

About Churchill Downs Incorporated

This news release contains 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,” “scheduled,” and similar words or similar expressions (or negative versions of such words or expressions), although some forward-looking statements are expressed differently.

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, that could cause actual results to differ materially from expectations include the following: the occurrence of extraordinary events, such as terrorist attacks, public health threats, civil unrest, and inclement weather, including as a result of climate change; the effect of economic conditions on our consumers’ confidence and discretionary spending or our access to credit, including the impact of inflation; additional or increased taxes and fees; the impact of any pandemics, epidemics, or outbreaks of infectious diseases, including possible new variants of COVID-19, and related economic matters on our results of operations, financial conditions and prospects; lack of confidence in the integrity of our core businesses or any deterioration in our reputation; loss of key or highly skilled personnel, as well as general disruptions in the general labor market; the impact of significant competition, and the expectation that competition levels will increase; changes in consumer preferences, attendance, wagering, and sponsorships; risks associated with equity investments, strategic alliances and other third-party agreements; inability to respond to rapid technological changes in a timely manner; concentration and evolution of slot machine and historical racing machine (HRM) manufacturing and other technology conditions that could impose additional costs; failure to enter into or maintain agreements with industry constituents, including horsemen and other racetracks; inability to successfully focus on market access and retail operations for our TwinSpires sports betting business and effectively compete; online security risk, including cyber-security breaches, or loss or misuse of our stored information as a result of a breach including customers’ personal information could lead to government enforcement actions or other litigation; reliance on our technology services and catastrophic events and system failures disrupting our operations; inability to identify, complete, or fully realize the benefits of our proposed acquisitions, divestitures, development of new venues or the expansion of existing facilities on time, on budget, or as planned; difficulty in integrating recent or future acquisitions into our operations; cost overruns and other uncertainties associated with the development of new venues and the expansion of existing facilities; general risks related to real estate ownership and significant expenditures, including risks related to environmental liabilities; personal injury litigation related to injuries occurring at our racetracks; compliance with the Foreign Corrupt Practices Act or other similar laws and regulations, or applicable anti-money laundering regulations; payment-related risks, such as risk associated with fraudulent credit card or debit card use; work stoppages and labor problems; risks related to pending or future legal proceedings and other actions; highly regulated operations and changes in the regulatory environment could adversely affect our business; restrictions in our debt facilities limiting our flexibility to operate our business; failure to comply with the financial ratios and other covenants in our debt facilities and other indebtedness; increases to interest rates (due to inflation or otherwise), disruption in the credit markets or changes to our credit ratings may adversely affect our business; increase in our insurance costs, or inability to obtain similar insurance coverage in the future, and any inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events; and other factors described under the heading “Risk Factors” in our most recent Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission.

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.


Investor Contact: Kaitlin Buzzetto		Media Contact: Tonya Abeln
(502) 394-1091		(502) 386-1742
[email protected]		[email protected]

Nasdaq:CHDN

Thorpedo Anna Claims the Lilies for the 150th Running of the Longines Kentucky Oaks

Published

2 days ago

May 4, 2024

GlobeNewswire

thorpedo-anna-claims-the-lilies-for-the-150th-running-of-the-longines-kentucky-oaks

Kentucky Oaks Day Record Handle

LOUISVILLE, KY., May 03, 2024 (GLOBE NEWSWIRE) — Churchill Downs Incorporated (Nasdaq: CHDN) (the “Company”, “CDI”, “we”) announced a new Kentucky Oaks Day handle record at Churchill Downs Racetrack as Thorpedo Anna captured the Lilies in the 150^th running of the Longines Kentucky Oaks. Even under cloudy skies, 107,236 enthusiastic race goers gathered to watch America’s premier race for 3-year-old fillies.

Wagering from all sources on the full Kentucky Oaks race day card set a new record of $75.3 million, eclipsing last year’s record of $74.9 million despite inclement weather and a persistently sloppy track. All-sources wagering on the Kentucky Oaks race was $21.7 million, down 3% from last year.

Thorpedo Anna, owned by Brookdale Racing, Mark Edwards, breeder Judy Hicks and Magdalena Racing, trained by Kenny McPeek and ridden by Brian Hernandez Jr., sped to the finish line to win the Longines Kentucky Oaks by 4 ¾ lengths at odds of 4-1 and with a final time of 1:50.83. It is the first Oaks victory for the owners, trainer and jockey. The Kentucky-bred filly, sired by Fast Anna, now has lifetime earnings of $1.4 million bolstered by the newly increased Longines Kentucky Oaks purse.

“Congratulations to the connections of Thorpedo Anna on today’s win,” said Churchill Downs President Mike Anderson. “The 150^th Kentucky Oaks will be remembered as a historic day as we celebrate our deep-rooted traditions with our fans, sponsors, horsemen and horseplayers.”

CDI continued using Kentucky Oaks as a platform to raise money for women’s health initiatives and welcomed 150 breast and ovarian cancer survivors to walk the historic racetrack prior to the running of Longines Kentucky Oaks for the 16^th annual Survivors Parade. This year’s moving tradition was emphasized by a live performance during the Kentucky Oaks Survivors Parade as emerging country star Lana Scott thrilled the crowd with two original songs, sending a message of hope, courage, and strength to 150 fighters and survivors.

Churchill Downs’ Oaks charitable beneficiaries were Derby Divas representing the Norton Cancer Institute and Horses and Hope representing the Kentucky Cancer Program. Since its inception, the Oaks Survivors Parade charitable initiative has raised over $1.5 million for women’s health advocacy providing preventative access to underserved women throughout Kentucky, including those who work in the equine industry.

About Churchill Downs Incorporated

This news release contains 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,” “scheduled,” and similar words or similar expressions (or negative versions of such words or expressions), although some forward-looking statements are expressed differently.

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, that could cause actual results to differ materially from expectations include the following: the occurrence of extraordinary events, such as terrorist attacks, public health threats, civil unrest, and inclement weather, including as a result of climate change; the effect of economic conditions on our consumers’ confidence and discretionary spending or our access to credit, including the impact of inflation; additional or increased taxes and fees; the impact of any pandemics, epidemics, or outbreaks of infectious diseases, including possible new variants of COVID-19, and related economic matters on our results of operations, financial conditions and prospects; lack of confidence in the integrity of our core businesses or any deterioration in our reputation; loss of key or highly skilled personnel, as well as general disruptions in the general labor market; the impact of significant competition, and the expectation that competition levels will increase; changes in consumer preferences, attendance, wagering, and sponsorships; risks associated with equity investments, strategic alliances and other third-party agreements; inability to respond to rapid technological changes in a timely manner; concentration and evolution of slot machine and historical racing machine (HRM) manufacturing and other technology conditions that could impose additional costs; failure to enter into or maintain agreements with industry constituents, including horsemen and other racetracks; inability to successfully focus on market access and retail operations for our TwinSpires sports betting business and effectively compete; online security risk, including cyber-security breaches, or loss or misuse of our stored information as a result of a breach including customers’ personal information could lead to government enforcement actions or other litigation; reliance on our technology services and catastrophic events and system failures disrupting our operations; inability to identify, complete, or fully realize the benefits of our proposed acquisitions, divestitures, development of new venues or the expansion of existing facilities on time, on budget, or as planned; difficulty in integrating recent or future acquisitions into our operations; cost overruns and other uncertainties associated with the development of new venues and the expansion of existing facilities; general risks related to real estate ownership and significant expenditures, including risks related to environmental liabilities; personal injury litigation related to injuries occurring at our racetracks; compliance with the Foreign Corrupt Practices Act or other similar laws and regulations, or applicable anti-money laundering regulations; payment-related risks, such as risk associated with fraudulent credit card or debit card use; work stoppages and labor problems; risks related to pending or future legal proceedings and other actions; highly regulated operations and changes in the regulatory environment could adversely affect our business; restrictions in our debt facilities limiting our flexibility to operate our business; failure to comply with the financial ratios and other covenants in our debt facilities and other indebtedness; increases to interest rates (due to inflation or otherwise), disruption in the credit markets or changes to our credit ratings may adversely affect our business; increase in our insurance costs, or inability to obtain similar insurance coverage in the future, and any inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events; and other factors described under the heading “Risk Factors” in our most recent Annual Report on Form 10-K and in other filings we make with the Securities and Exchange Commission.

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.