Churchill Downs Incorporated Reports 2015 Second-Quarter Results

  • Record net revenues of $409.2 million, up 35% over second-quarter 2014
  • Record Adjusted EBITDA of $157.2 million, 34% above 2014’s second-quarter
  • Record Kentucky Oaks and Derby week Adjusted EBITDA, grows $6.0 million over prior year
  • Record first half net cash from operating activities of $194.2 million, up 63% over prior year

LOUISVILLE, Ky. , July 29, 2015 (GLOBE NEWSWIRE) -- Churchill Downs Incorporated (NASDAQ:CHDN) (CDI or Company) today reported business results for the second-quarter ended June 30, 2015.


Bill Carstanjen, CDI’s Chief Executive Officer: “Our second-quarter delivered record revenues and Adjusted EBITDA driven primarily by a fantastic 2015 Kentucky Oaks and Derby and by the contributions of our Big Fish Games division. While all of our segments showed improvements, Big Fish Games was our largest growth catalyst for the quarter and further validates our strategy to enter the online and mobile games segment.”

(in millions, except per share data):

2015 2014 % Change
GAAP Measures:
Net revenues $409.2 $303.5 35
Net earnings 55.0 57.3 (4)
Diluted earnings from continuing operations per share $3.10 $3.21 (3)
Net cash flow provided by operating activities 194.2 119.1 63
Non-GAAP Measure:
Adjusted EBITDA $157.2 $117.0 34
U: > 100% unfavorable; F: > 100% favorable

During the second-quarter of 2015, CDI net revenues increased $105.8 million, or 35%, from the prior year, primarily due to additional revenues from Big Fish Games which the Company acquired in December 2014.

Total Adjusted EBITDA increased $40.2 million, or 34%, driven primarily by the addition of Big Fish Games’ Adjusted EBITDA of $28.2 million. In addition, Casino Adjusted EBITDA increased $1.8 million, as the majority of our properties improved either from strong revenue trends or margin improvements from operating cost efficiencies. TwinSpires Adjusted EBITDA increased $2.6 million driven by handle growth and the discontinuation of Finally, Racing Adjusted EBITDA improved $7.1 million due to another record Kentucky Oaks and Derby week growing year-over-year by $6.0 million and the 2014 leasing of Calder’s pari-mutuel operations to a third party.

(in millions):

2015 2014 (1) % Change
Casino $48.2 $ 36.8 31
Free-to-Play Casual 36.5 7.5 F
Premium 28.0 36.1 (22)
Total Bookings $112.7 $ 80.4 40
Net revenues $104.5 - F
Adjusted EBITDA 28.2 - F
(1) Big Fish Games bookings for period ended June 30, 2014, not included in the consolidated financial results for CDI. Included for comparative purposes only

The chart above includes second-quarter bookings for 2015 as well as pre-acquisition results for second-quarter 2014. Bookings are a non-GAAP financial measure equal to the revenue recognized plus the change in deferred revenue for the period.

During the second-quarter, Big Fish Games contributed revenues of $104.5 million and Adjusted EBITDA of $28.2 million. Comparing results to Big Fish Games before CDI’s acquisition, total bookings for the quarter increased $32.2 million, or 40%, driven by growth in both the Casino and Free-to-Play Casual segments. Casino bookings grew by $11.5 million, driven by a 24% increase in quarterly average paying users and a 6% increase in average bookings per paying user compared to the second-quarter of 2014. Free-to-Play Casual continues to enjoy the success of its Gummy Drop! product, which launched in the third-quarter of 2014, with total bookings’ growth of $29.0 million driven by a 173% increase in quarterly average paying users and a 78% increase in average bookings per paying user. Premium bookings declined $8.1 million, or 22%, primarily driven by customers continuing to shift from paid PC games to free-to-play mobile games. In addition, the strengthening U.S. dollar (USD) as compared to other currencies where our Premium segment operates resulted in conversion to lower USD bookings of approximately $1.4 million.

(in millions):

2015 2014 % Change
Net revenues $ 83.8 $ 81.8 2
Adjusted EBITDA 28.0 26.2 7

During the second-quarter of 2015, Casino revenues increased $2.0 million, or 2%, from the prior year. Oxford revenues increased $1.6 million, reflective of both total gaming market growth and increased market share. VSI revenues grew $0.9 million from the addition of new video poker machines throughout our Louisiana properties. Partially offsetting the overall growth was a decline in revenues of $0.5 million at Fair Grounds Slots due to a recently implemented smoking ban in Orleans Parish.

Casino Adjusted EBITDA increased by $1.8 million due to improved margins and operating efficiencies at a majority of our properties plus stronger revenue trends at our Oxford Maine facility.

(in millions):

2015 2014 % Change
Net revenues $ 60.7 $ 57.1 6
Adjusted EBITDA 16.7 14.1 19
Total handle 289.4 266.5 9

During the second-quarter of 2015, TwinSpires revenues improved $3.7 million due to an 8.6% increase in handle and an increase of 17% in unique players.

TwinSpires Adjusted EBITDA increased $2.6 million, from organic revenue growth and a reduction in Pennsylvania pari-mutuel taxes from a favorable tax ruling received during the third quarter of 2014, partially offset by higher New York taxes.

(in millions):

2015 2014 % Change
Net revenues $155.4 $159.4 (3)
Adjusted EBITDA 85.2 78.1 9
Total handle 557.8 667.6 (16)

During the second-quarter of 2015, revenues generated by Racing decreased $4.0 million as the cessation of Calder's pari-mutuel operations on July 1, 2014, accounted for a loss of 40 live race days and a corresponding decline in revenues of $9.0 million as compared to the prior year. Declines in revenues at Arlington also contributed to the overall decrease. Arlington’s decline was a result of the reduction in state purse subsidies which led to a decrease in live race days and field sizes. Partially offsetting these declines was an increase at Churchill Downs of $8.4 million driven primarily from the successful Kentucky Oaks and Derby week.

Racing Adjusted EBITDA increased $7.1 million, due to a record-breaking Kentucky Oaks and Derby week with increased profitability of $6.0 million, as well as improved performance at Calder due to the cessation of pari-mutuel operations during July 2014.


A conference call regarding this news release is scheduled for Thursday, July 30, 2015, 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, or by dialing (877) 372-0878 and entering the pass code 59263186 at least 10 minutes before the appointed time. International callers should dial (253) 237-1169. The online replay will be available at approximately noon EDT and continue 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

In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company has provided a non-GAAP measurement, which presents a financial measure of earnings before interest, taxes, depreciation and amortization and certain other items as described in the Company’s Annual Report on Form 10K (“Adjusted EBITDA”). Churchill Downs Incorporated uses Adjusted EBITDA as a key performance measure of results of operations for purposes of evaluating performance internally. The Company believes the use of this measure enables management and investors to evaluate and compare, from period to period, the Company’s operating performance in a meaningful and consistent manner. This non-GAAP measurement is not intended to replace the presentation of the Company’s financial results in accordance with GAAP.


Churchill Downs Incorporated (CDI) (NASDAQ:CHDN), headquartered in Louisville, Ky., owns the world-renowned Churchill Downs Racetrack, home of the Kentucky Derby and Kentucky Oaks, as well as casino operations in Miami Gardens, Fla.; racetrack, casino and video poker operations in New Orleans, La.; racetrack operations in Arlington Heights, Ill.; a casino resort in Greenville, Miss.; a casino hotel in Vicksburg, Miss.; a casino in Oxford, Maine; and a 50 percent owned joint venture, Miami Valley Gaming and Racing LLC, in Lebanon, Ohio. CDI also owns Big Fish Games, Inc., one of the world’s largest producers and distributors of casual games; the country's premier online wagering company,; the totalisator company, United Tote; and a collection of racing-related telecommunications and data companies. Additional information about CDI can be found online at

Information set forth in this discussion and analysis contains various “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Private Securities Litigation Reform Act of 1995 (the “Act”) provides certain “safe harbor” provisions for forward-looking statements. All forward-looking statements made in this Quarterly Report on Form 10-Q are made pursuant to the Act.

The reader is cautioned that such forward-looking statements are based on information available at the time and/or management’s good faith belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Forward-looking statements speak only as of the date the statement was made. We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “should,” “will,” and similar words, 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 effect of global economic conditions, including any disruptions in the credit markets; a decrease in consumers’ discretionary income; the effect (including possible increases in the cost of doing business) resulting from future war and terrorist activities or political uncertainties; the impact of increasing insurance costs; the impact of interest rate fluctuations; maintaining favorable relationships we have with third-party mobile platforms, the inability to secure new content from third-party developers on favorable terms, keeping our games free from programming errors or flaws, the effect if smart phone and tablet usage does not continue to increase; the financial performance of our racing operations; the impact of casino competition (including lotteries, online gaming and riverboat, cruise ship and land-based casinos) and other sports and entertainment options in the markets in which we operate; our ability to maintain racing and gaming licenses to conduct our businesses; the impact of live racing day competition with other Kentucky, Illinois, Louisiana and Ohio racetracks within those respective markets; the impact of higher purses and other incentives in states that compete with our racetracks; costs associated with our efforts in support of alternative gaming initiatives; costs associated with customer relationship management initiatives; a substantial change in law or regulations affecting pari-mutuel or casino activities; a substantial change in allocation of live racing days; changes in Kentucky, Illinois, Louisiana or Ohio law or regulations that impact revenues or costs of racing in those states; the presence of wagering and casino operations at other states’ racetracks and casinos near our operations; our continued ability to effectively compete for the country’s horses and trainers necessary to achieve full field horse races; our continued ability to grow our share of the interstate simulcast market and obtain the consents of horsemen’s groups to interstate simulcasting; our ability to enter into agreements with other industry constituents for the purchase and sale of racing content for wagering purposes; our ability to execute our acquisition strategy and to complete or successfully operate acquisitions and planned expansion projects including the effect of required payments in the event we are unable to complete acquisitions; our ability to successfully complete any divestiture transaction; market reaction to our expansion projects; the inability of our totalisator company, United Tote, to maintain its processes accurately, keep its
technology current or maintain its significant customers; our accountability for environmental contamination; the ability of Big Fish Games or TwinSpires to prevent security breaches within their online technologies; the loss of key personnel; the impact of natural and other disasters on our operations and our ability to obtain insurance recoveries in respect of such losses (including losses related to business interruption); our ability to integrate any businesses we acquire into our existing operations, including our ability to maintain revenues at historic or anticipated levels and achieve anticipated cost savings; the impact of wagering laws, including changes in laws or enforcement of those laws by regulatory agencies; the outcome of pending or threatened litigation; changes in our relationships with horsemen’s groups and their memberships; our ability to reach agreement with horsemen’s groups on future purse and other agreements (including, without limitation, agreements on sharing of revenues from casinos and advance deposit wagering); the effect of claims of third parties to intellectual property rights; and the volatility of our stock price.

You should read this discussion in conjunction with the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2014 for further information, including Part I - Item 1A, "Risk Factors" of our Form 10-K for a discussion regarding some of the reasons that actual results may be materially different from those we anticipate.

(Unaudited) (in thousands, except per common share data)
Three Months Ended
June 30,
2015 2014 % Change
Net revenues:
Big Fish Games$104,526 $ F
Casinos83,770 81,779 2
TwinSpires60,748 57,076 6
Racing155,436 159,435 (3)
Other4,759 5,182 (8)
409,239 303,472 35
Operating expenses:
Big Fish Games83,446 U
Casinos61,062 62,005 (2)
TwinSpires37,607 36,811 2
Racing75,850 85,483 (11)
Other5,303 6,350 (16)
Research and development9,847 U
Selling, general and administrative expenses22,035 18,666 18
Acquisition related charges8,200 U
Operating income105,889 94,157 12
Other income (expense):
Interest income6 5 20
Interest expense(7,112) (4,961) 43
Equity in gains of unconsolidated investments2,907 2,506 16
Miscellaneous, net28 393 (93)
(4,171) (2,057) U
Earnings from continuing operations before provision for income taxes101,718 92,100 10
Income tax provision(46,674) (34,767) 34
Net earnings$55,044 $57,333 (4)
Net earnings per common share data:
Net earnings$3.12 $3.23 (3)
Net earnings$3.10 $3.21 (3)
Weighted average shares outstanding:
Basic17,331 17,531
Diluted17,735 17,880
Other comprehensive loss:
Foreign currency translation, net of tax effect(28) U
Other comprehensive loss(28) U
Comprehensive earnings$55,016 $57,333 (4)

(in thousands, except per common share data)
Six Months Ended
June 30,
2015 2014 % Change
Net revenues:
Big Fish Games$196,429 $ F
Casinos$169,185 $168,165 1
TwinSpires106,063 103,160 3
Racing179,874 190,014 (5)
Other8,598 9,274 (7)
660,149 470,613 40
Operating expenses:
Big Fish Games165,605 U
Casinos121,843 124,051 (2)
TwinSpires69,388 70,388 (1)
Racing112,360 128,703 (13)
Other10,906 12,048 (9)
Research and development20,079 U
Selling, general and administrative expenses43,607 40,131 9
Acquisition related charges14,600 U
Insurance recoveries, net of losses (431) (100)
Operating income101,761 95,723 6
Other income (expense):
Interest income224 9 F
Interest expense(14,596) (9,934) 47
Equity in gains of unconsolidated investments5,855 4,796 22
Gain on sale of equity investment5,817 F
Miscellaneous, net(160) 368 U
(2,860) (4,761) (40)
Earnings from continuing operations before provision for income taxes98,901 90,962 9
Income tax provision(45,415) (34,329) (32)
Net earnings53,486 56,633 (6)
Net earnings per common share data:
Net earnings$3.04 $3.20 (5)
Net earnings$3.02 $3.17 (5)
Weighted average shares outstanding:
Basic17,300 17,475
Diluted17,698 17,884
Other comprehensive loss:
Foreign currency translation, net of tax effect(415) U
Other comprehensive loss(415) U
Comprehensive earnings$53,071 $56,633 (6)

for the three months ended June 30,
(Unaudited) (in thousands, except per common share data)
2015 2014 % Change
Net revenues from external customers:
Big Fish Games$104,526 $ F
Calder Casino19,786 19,873
Fair Grounds Slots9,053 9,586 (6)
VSI9,389 8,479 11
Harlow's Casino12,050 11,777 2
Oxford Casino20,958 19,402 8
Riverwalk Casino12,534 12,662 (1)
Total Casinos83,770 81,779 2
TwinSpires60,748 57,076 6
Churchill Downs126,792 118,348 7
Arlington18,119 21,193 (15)
Calder717 9,714 (93)
Fair Grounds9,808 10,180 (4)
Total Racing155,436 159,435 (3)
Other Investments4,502 4,778 (6)
Corporate257 404 (36)
Net revenues from external customers$409,239 $303,472 35
Intercompany net revenues:
TwinSpires$250 $244 2
Churchill Downs5,384 4,945 9
Arlington1,486 1,777 (16)
Calder 351 (100)
Fair Grounds (3) (100)
Total Racing6,870 7,070 (3)
Other Investments1,093 1,210 (10)
Eliminations(8,213) (8,524) (4)
Net revenues$ $
Reconciliation of Adjusted EBITDA to net earnings:
Big Fish Games$28,238 $ F
Casinos27,955 26,174 7
TwinSpires16,717 14,087 19
Racing85,195 78,079 9
Other Investments781 (223) F
Corporate Adjusted EBITDA(1,687) (1,141) (48)
Total segment Adjusted EBITDA157,199 116,976 34
Big Fish Games acquisition charges(8,200) U
Big Fish Games changes in deferred revenue(8,220) U
Share-based compensation(3,372) (3,113) 8
MVG interest expense, net(536) (597) (10)
Other charges and recoveries, net(777) (450) 73
Depreciation and amortization(27,270) (15,760) 73
Interest (expense) income, net(7,106) (4,956) 43
Income tax provision(46,674) (34,767) 34
Earnings from continuing operations55,044 57,333 (4)
Foreign currency translation, net of tax effect(28) U
Comprehensive earnings$55,016 $57,333 (4)

for the six months ended June 30,
(Unaudited) (in thousands, except per common share data)
2015 2014 % Change
Net revenues from external customers:
Big Fish Games$196,429 $ F
Calder Casino40,165 40,456 (1)
Fair Grounds Slots20,535 21,370 (4)
VSI18,573 17,233 8
Harlow's Casino25,730 26,228 (2)
Oxford Casino38,461 36,921 4
Riverwalk Casino25,721 25,957 (1)
Total Casinos169,185 168,165 1
TwinSpires106,063 103,160 3
Churchill Downs128,800 120,490 7
Arlington23,931 27,315 (12)
Calder1,391 17,738 (92)
Fair Grounds25,752 24,471 5
Total Racing179,874 190,014 (5)
Other Investments8,107 8,615 (6)
Corporate491 659 (25)
Net revenues from external customers$660,149 $470,613 40
Intercompany net revenues:
TwinSpires$547 $474 15
Churchill Downs5,617 5,173 9
Arlington2,444 2,794 (13)
Calder 707 (100)
Fair Grounds858 729 18
Total Racing8,919 9,403 (5)
Other Investments1,888 2,108 (10)
Eliminations(11,354) (11,985) (5)
Net revenues$ $
Reconciliation of Adjusted EBITDA to net earnings:
Big Fish Games$48,264 $ F
Casinos56,742 53,425 6
TwinSpires27,907 24,037 16
Racing75,998 67,829 12
Other Investments113 (1,576) F
Corporate Adjusted EBITDA(3,554) (2,247) (58)
Total segment Adjusted EBITDA205,470 141,468 45
Insurance recoveries, net of losses 431 (100)
Big Fish Games acquisition charges(14,600) U
Big Fish Games changes in deferred revenue(21,096) U
Share-based compensation(6,095) (8,354) (27)
MVG interest expense, net(1,090) (1,137) (4)
Other charges and recoveries, net5,361 (477) F
Depreciation and amortization(54,677) (31,044) 76
Interest (expense) income, net(14,372) (9,925) 45
Income tax provision(45,415) (34,329) 32
Earnings from continuing operations53,486 56,633 (6)
Foreign currency translation, net of tax effect(415) U
Comprehensive earnings$53,071 $56,633 (6)

for the three and six months ended June 30,
(unaudited) (in thousands)
Three Months Ended June 30, Change
2015 2014 $ %
Intercompany management fee (expense) income:
Big Fish Games $(750) $ $(750) U
Casinos (1,008) (957) (51) (5)
TwinSpires (875) (802) (73) (9)
Racing (2,995) (3,200) 205 6
Other Investments (75) (80) 5 6
Corporate Income 5,703 5,039 664 13
Total management fees $ $ $

Six Months Ended June 30, Change
2015 2014 $ %
Intercompany management fee (expense) income:
Big Fish Games $(1,500) $ $(1,500) U
Casinos (3,332) (3,531) 199 6
TwinSpires (2,098) (2,233) 135 6
Racing (3,693) (4,178) 485 12
Other Investments (188) (213) 25 12
Corporate Income 10,811 10,155 656 6
Total management fees $ $ $

Six Months Ended June 30,
(unaudited) (in thousands)
2015 2014
Cash flows from operating activities:
Net earnings$ 53,486 $ 56,633
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 54,677 31,044
Game technology and rights amortization 3,060
Acquisition related charges 14,600
Asset impairment loss 250
Loss on asset disposals 393 66
Gain on sale of equity investment (5,817)
Equity in gains of unconsolidated investments (5,855) (4,796)
Dividend from investment in unconsolidated affiliate 7,500
Share-based compensation 6,095 8,354
Other 804 302
Increase (decrease) in cash resulting from changes in operating assets and liabilities, net of business acquisition:
Restricted cash (2,620) 2,385
Accounts receivable (13,431) (13,828)
Other current assets (8,615) (4,981)
Game technology and rights (11,217)
Accounts payable 26,972 28,433
Purses payable 10,321 2,036
Accrued expenses (1,028) (1,775)
Deferred revenue 422 (25,843)
Income taxes receivable and payable 59,045 38,967
Other assets and liabilities 5,136 2,091
Net cash provided by operating activities 194,178 119,088
Cash flows from investing activities:
Additions to property and equipment (22,681) (38,475)
Deferred payments to Big Fish Games former equity holders (959)
Investment in joint ventures (332) (6,500)
Proceeds from sale of equity investment 6,000
Purchases of minority investments (81) (273)
Proceeds on sale of property and equipment 81 88
Net cash used in investing activities (17,972) (45,160)
Cash flows from financing activities:
Borrowings on bank line of credit 189,871 210,854
Repayments on bank line of credit (346,484) (211,247)
Tax refund payments to Big Fish Games equity holders (11,773)
Change in bank overdraft 5,222 5,504
Payment of dividends (17,419) (15,186)
Repurchase of common stock (61,561)
Repurchase of common stock from share-based compensation (5,929) (8,121)
Common stock issued 88 4,525
Windfall tax benefit from share-based compensation 3,103 4,465
Loan origination fees (26) (170)
Debt issuance costs (1,029)
Net cash used in financing activities (183,347) (71,966)
Net (decrease) increase in cash and cash equivalents (7,141) 1,962
Effect of exchange rate changes on cash (1,551)
Cash and cash equivalents, beginning of year 67,936 44,708
Cash and cash equivalents, end of year$ 59,244 $ 46,670

(unaudited) (in thousands)
June 30,
December 31, 2014
Current assets:
Cash and cash equivalents$59,244 $67,936
Restricted cash28,685 26,065
Accounts receivable, net66,885 75,890
Deferred income taxes18,759 18,519
Income taxes receivable 29,455
Game technology and rights, net8,250 530
Other current assets33,243 24,135
Total current assets215,066 242,530
Property and equipment, net589,552 595,315
Investment in and advances to unconsolidated affiliate107,465 109,548
Goodwill840,947 840,947
Other intangible assets, net521,607 549,972
Other assets24,353 24,192
Total assets$2,298,990 $2,362,504
Current liabilities:
Accounts payable$66,291 $45,597
Bank overdraft5,766 544
Purses payable21,490 11,169
Account wagering deposit liabilities21,160 18,137
Accrued expenses92,665 93,286
Income taxes payable32,609
Tax refund due to Big Fish Games former equity holders6,313 18,087
Deferred revenue10,985 51,833
Deferred revenue - Big Fish Games62,844 41,747
Big Fish Games deferred payment, current28,100 27,180
Big Fish Games earnout liability, current272,850
Current maturities of long-term debt13,750 11,250
Dividends payable 17,419
Total current liabilities634,823 336,249
Long-term debt, net of current maturities299,992 459,105
Notes payable300,000 300,000
Big Fish Games deferred payment, net of current amount due54,200 51,620
Big Fish Games earnout liability, net of current amount due66,050 327,800
Other liabilities24,521 21,718
Deferred revenue13,641 16,489
Deferred income taxes149,326 149,522
Total liabilities1,542,553 1,662,503
Commitments and contingencies
Shareholders’ equity:
Preferred stock, no par value; 250 shares authorized; no shares issued
Common stock, no par value; 50,000 shares authorized; 17,580 shares issued at June 30, 2015 and 17,472 shares issued at December 31, 2014265,645 262,280
Accumulated other comprehensive loss(540) (125)
Retained earnings491,332 437,846
Total shareholders’ equity756,437 700,001
Total liabilities and shareholders’ equity$2,298,990 $2,362,504

for the three and six months ended June 30,
Summarized financial information for Miami Valley Gaming, LLC is comprised of the following (in thousands):
Three Months Ended June 30, Six Months Ended June 30,
2015 2014 % Change 2015 2014 % Change
Casino revenue$33,119 $33,124 —% $65,163 $64,287 1%
Non-casino revenue1,879 1,913 (2)% 3,836 3,544 8%
Net revenues34,998 35,037 —% 68,999 67,831 2%
Operating and SG&A expenses25,052 24,777 1% 49,686 48,988 1%
Adjusted EBITDA9,946 10,260 (3)% 19,313 18,843 2%
Depreciation & amortization expenses3,154 3,474 (9)% 6,298 6,841 (8)%
Pre-opening expenses N/A 54 (100)%
Operating income6,792 6,786 —% 13,015 11,948 9%
Interest (expense) income, net(1,073) (1,194) (10)% (2,181) (2,274) (4)%
Net income$5,719 $5,592 2% $10,834 $9,674 12%

Reconciliation of operating income to
Churchill Downs' Adjusted EBITDA
Three Months Ended June 30, Six Months Ended June 30,
2015 2014 % Change 2015 2014 % Change
Operating income$6,792 $6,786 % $13,015 $11,948 9%
Pre-opening expenses N/A 54 (100)%
6,792 6,786 % 13,015 12,002 8%
Churchill Downs' Adjusted EBITDA$3,396 $3,393 % $6,508 $6,001 8%

June 30, 2015 December 31, 2014
Current assets$23,382 $24,943
Property and equipment, net125,597 130,868
Other assets, net105,059 105,059
Total assets$254,038 $260,870
Liabilities and Members' Equity
Current liabilities$17,110 $16,775
Current portion of long-term debt8,332 8,332
Long-term debt, excluding current portion23,591 26,584
Other liabilities75 83
Members' equity204,930 209,096
Total liabilities and members' equity$254,038 $260,870

Contact: Courtney Yopp Norris (502) 636-4564

Source:Churchill Downs Incorporated