LOUISVILLE, KY., (October 25, 2023) – Churchill Downs Incorporated (Nasdaq: CHDN) (the
"Company", "CDI") today reported business results for the third quarter ended September 30, 2023.

Company Highlights

• Third quarter results:
  • Record net revenue of $572.5 million, up 49% compared to the prior year quarter.
  • Net income of $61.0 million, up 7% compared to the prior year quarter.
  • Record Adjusted EBITDA of $218.2 million, up 34% compared to the prior year quarter.
• Delivered record third quarter revenue and Adjusted EBITDA across our Live and Historical
  Racing and Gaming segments and record third quarter Adjusted EBITDA in our TwinSpires
  segment:
  • Live and Historical Racing revenue up 120% and Adjusted EBITDA up 134% compared to
    the prior year quarter.
  • Derby City Gaming delivered all-time record Adjusted EBITDA in third quarter
    and Oak Grove delivered record third quarter Adjusted EBITDA.
  • TwinSpires revenue up 5% and Adjusted EBITDA up 9% compared to the prior year
    quarter.
  • Gaming revenue up 32% and Adjusted EBITDA up 10% compared to the prior year
    quarter.
• We completed the acquisition of Exacta Systems, LLC ("Exacta") on August 22, 2023.
• We opened Rosie's Gaming Emporium in Emporia, Virginia on September 26, 2023. This
  represents our seventh Rosie's HRM entertainment venue in Virginia.
• We are finalizing design and construction plans for a new HRM entertainment facility on a 20-acre
  site with convenient access to Highway 60 in Eastern Daviess County near Owensboro, Kentucky
  with a target opening date in first quarter 2025 and a target total spend of $100 to $110 million.
• We opened six race and sports books at our Kentucky properties on September 7, 2023.
• Our joint venture, RVA Entertainment Holdings, LLC, launched a November 2023 referendum
  campaign to win approval to develop a casino in Richmond, Virginia.
• We launched a November 2023 referendum campaign to win approval to develop our eighth HRM
  entertainment venue in Manassas Park, Virginia.
• We ended the third quarter with net bank leverage of 4.1x and maintained our commitment to
  returning capital to shareholders through $37.3 million of share repurchases in the third quarter and
  by announcing our Board's approval of a $0.382 per share dividend to shareholders of record as of
  December 1, 2023 and payable on January 5, 2024. This represents the thirteenth consecutive year
  of increased dividend per share.

The summaries below present revenue from external customers and intercompany revenue from each of
our reportable segments. All comparisons discussed below are referencing the third quarter of 2023 as
compared to the second quarter of 2022.

Live and Historical Racing

For the third quarter of 2023, revenue increased $123.1 million driven by an $89.0 million increase
attributable to the Virginia properties acquired in the P2E Transaction, a $14.7 million increase
attributable to the properties acquired in the Ellis Park and Chasers Transactions, an $8.8 million increase
primarily due to the opening of Turfway Park in Northern Kentucky in September 2022, a $7.4 million
increase from our Derby City Gaming property in Louisville, and a $4.3 million increase from our Oak
Grove property in Southwestern Kentucky. These increases were partially offset by a $1.1 million
decrease at Churchill Downs Racetrack due to the decision to move July race days as part of the Churchill
Downs Racetrack Spring Meet to Ellis Park.

Adjusted EBITDA increased $46.4 million driven by a $38.3 million increase attributable to the Virginia
properties acquired in the P2E Transaction and a portion of the benefit from the Exacta Transaction, a $7.3
million increase from continued growth at our Derby City Gaming property in Louisville and our Oak
Grove property in Southwestern Kentucky, and a $2.9 million increase attributable to our other Live and
Historical Racing properties. These increases were partially offset by a $2.1 million decrease at Churchill
Downs Racetrack primarily due to the decision to move July race days as part of the Churchill Downs
Racetrack Spring Meet to Ellis Park.

TwinSpires

For the third quarter of 2023, revenue increased $5.0 million driven by a $5.5 million increase attributable
to the Exacta Transaction and a $0.9 million increase in all other Horse Racing revenue primarily from the
B2B expansion strategy associated with United Tote totalisator fees. These increases were partially offset
by a $1.4 million reduction in Sports and Casino revenue.

Adjusted EBITDA increased $2.8 million driven by a $3.1 million increase attributable to the Exacta
Transaction, partially offset by a $0.3 million net decrease in Horse Racing and Sports and Casino.

Gaming

For the third quarter of 2023, revenue increased $59.0 million driven by a $70.2 million increase
attributable to the New York and Iowa properties acquired in the P2E Transaction, partially offset by an
$8.7 million decrease in Pennsylvania primarily due to our decision not to renew the management
agreement at Lady Luck, and a $2.5 million net decrease from our other gaming properties.

Adjusted EBITDA increased $10.7 million driven by a $25.0 million increase attributable to the New
York and Iowa properties acquired in the P2E Transaction, partially offset by a $6.5 million decrease from
our equity investments, a $4.9 million decrease from our other wholly-owned gaming properties, and a
$2.9 million decrease attributable to proceeds for business interruption insurance claims related to
Hurricane Ida. We received $4.1 million of business interruption insurance proceeds in the third quarter of
2022, compared to $1.2 million during the third quarter of 2023.

All Other

For the third quarter of 2023, Adjusted EBITDA decreased $4.9 million primarily driven by increased
corporate compensation and benefits related expenses and legal and professional fees.

Exacta Systems, LLC
On August 22, 2023, the Company completed its previously announced acquisition of Exacta.

Share Repurchase Program
The Company repurchased $37.3 million of its common stock in the third quarter of 2023 and had
approximately $232.9 million of repurchase authority remaining under the Company's share repurchase
program as of September 30, 2023, based on trade date.

Annual Dividend
On October 24, 2023, the Company's Board of Directors approved an annual cash dividend on the
Company's common stock of $0.382 per outstanding share, a seven percent increase over the prior year on
a split adjusted basis. The dividend is payable on January 5, 2024, to shareholders of record as of the close
of business on December 1, 2023, with the aggregate cash dividend paid to each shareholder rounded to
the nearest whole cent. This marks the thirteenth consecutive year that the Company has increased the
dividend per share.

The Company's third quarter of 2023 net income was $61.0 million compared to $57.0 million in the prior
year quarter.

The following impacted the comparability of the Company's third quarter net income:

• $0.9 million after-tax net increase in other nonrecurring expenses.

Excluding the items above, third quarter 2023 net income increased $4.9 million primarily due to the
following:

• $34.5 million after-tax increase primarily driven by the addition of the properties acquired as part
  of the P2E Transaction in the results of our operations;
• Partially offset by a $22.7 million after-tax increase in interest expense associated with higher
  outstanding debt balances and higher interest rates, and a $6.9 million after-tax decrease in the
  equity income from our unconsolidated affiliates.

Conference Call

A conference call regarding this news release is scheduled for Thursday, October 26, 2023 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 registering
in advance via teleconference here. Once registration is completed, participants will be provided with a
dial-in number containing a personalized conference code to access the call. All participants are
encouraged to dial-in 15 minutes prior to the start time. An online replay will be available by noon ET on
Thursday, October 26, 2023. A copy of the Company’s news release announcing quarterly results and
relevant financial and statistical information about the period will be accessible at http://
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 our portion of EBITDA from our equity investments.

Adjusted EBITDA excludes:

• Transaction expense, net which includes:
  • Acquisition, disposition, and property 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;
• Gain on property and asset sales;
• Legal reserves;
• Pre-opening expense; and
• Other charges, recoveries, and expenses.

On June 26, 2023, the Company's management agreement for Lady Luck Casino Nemacolin expired and
was not renewed. The Company completed the sale of substantially all of its assets at Lady Luck Casino
Nemacolin for an immaterial amount.

As of December 31, 2021, Arlington ceased racing and simulcast operations and the property was sold on
February 15, 2023 to the Chicago Bears. Arlington's results and exit costs in 2022 and 2023 are treated as
an adjustment to EBITDA.

For segment reporting, Adjusted EBITDA includes intercompany revenue and expense totals that are
eliminated in the Consolidated Statements of Comprehensive Income. See the Reconciliation of
Comprehensive Income to Adjusted EBITDA included herewith for additional information.

To view and download the full 2023 Third Quarter Results Press Release, please visit our Investor Relations Website.

About Churchill Downs Incorporated

Churchill Downs Incorporated (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. More information is available at http://www.churchilldownsincorporated.com.

This news release contains various "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"), which provides certain "safe harbor" provisions for forward-looking statements. All forward-looking statements made in this news release 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 that 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," "seek," "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 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 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; 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; cyber security risk, including 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; the impact of significant competition, and the expectation the 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 and Casino business and effectively compete; 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 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; increase to interest rates (due to inflation or otherwise), disruptions 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 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 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.

LOUISVILLE, KY., (July 26, 2023) – Churchill Downs Incorporated (Nasdaq: CHDN) ("CDI" or "Company") today reported business results for the second quarter ended June 30, 2023.

Second Quarter 2023 Highlights

• Second quarter results:
  • Record net revenue of $768.5 million compared to $582.5 million in second quarter 2022
  • Net income of $143.0 million compared to $339.3 million in second quarter 2022
  • Record Adjusted EBITDA of $363.7 million compared to $291.2 million in second quarter
    2022
• Our Live and Historical Racing segment delivered all-time record revenue and Adjusted EBITDA,
  with revenue up 48% and Adjusted EBITDA up 36% compared to the second quarter of 2022
  • Churchill Downs Racetrack ran the 149th Kentucky Derby with record Derby Week all sources
    handle, record Derby Week contribution to Adjusted EBITDA and the debut of the
    new First Turn Experience
  • We opened a new 123-room hotel, chop house, bourbon bar and sports bar at Derby City
    Gaming and Hotel in Louisville, Kentucky in June 2023
• Our Gaming segment delivered record second quarter revenue and Adjusted EBITDA, with revenue up 34% and Adjusted EBITDA up 16% compared to the second quarter of 2022
• We closed an offering of $600 million of 6.750% senior notes due 2031 on April 25, 2023
• Effective May 22, 2023, the Company's common stock was split two-for-one with a proportionate
  increase in the number of its authorized shares of common stock

The summaries below present revenue from external customers and intercompany revenue from each of
our reportable segments. All comparisons discussed below are referencing the second quarter of 2023 as
compared to the second quarter of 2022.

Live and Historical Racing

For the second quarter of 2023, revenue increased $132.1 million due to a $94.6 million increase
attributable to the Virginia properties acquired in the P2E Transaction, a $20.5 million increase due to a
record-breaking Derby Week at Churchill Downs Racetrack, a $12.0 million increase attributable to the
properties acquired in the Ellis Park and Chasers Transactions, a $10.3 million increase primarily due to
the opening of Turfway Park in Northern Kentucky in September 2022, a $3.5 million increase from our
Oak Grove property in Southwestern Kentucky, and a $1.1 million increase from our Derby City Gaming
property in Louisville. These increases were partially offset by a $9.9 million decrease for non-Derby
Week racing operations primarily due to the decision to move a portion of the Churchill Downs Racetrack
Spring Meet to Ellis Park in June 2023.

Adjusted EBITDA increased $59.6 million due to a $43.7 million increase attributable to the Virginia
properties acquired in the P2E Transaction, a $16.8 million increase due to a record-breaking Derby Week
at Churchill Downs Racetrack, and a $2.8 million increase due to continued growth at our Oak Grove
property in Southwestern Kentucky. The remaining properties contributed a $1.9 million increase in
Adjusted EBITDA. These increases were partially offset by a $5.6 million decrease for non-Derby Week
racing operations primarily due to the decision to move a portion of the Churchill Downs Racetrack
Spring Meet to Ellis Park in June 2023.

TwinSpires

For the second quarter of 2023, revenue increased $0.6 million primarily due to a $3.4 million increase in
revenue related to Horse Racing primarily from United Tote which reflects the portion of the B2B Horse
Racing expansion strategy associated with totalisator fees. This increase was partially offset by a $2.8
million reduction in Sports and Casino revenue due to the decision to exit the direct online Sports and
Casino business in the first quarter of 2022.

Adjusted EBITDA was flat for the comparative periods. Sports and Casino Adjusted EBITDA was up
$1.9 million as a result of an increase from retail sports betting and from significant cost reductions
associated with the exit of the direct online Sports and Casino business in the first quarter of 2022. United
Tote Adjusted EBITDA was up $2.0 million primarily as a result of the incremental revenue from the B2B
Horse Racing expansion strategy associated with totalisator fees. These increases were offset by a $3.9
million reduction in TwinSpires Adjusted EBITDA as a result of lower retail Horse Racing handle due to
industry race day cancellations and the decision to move a portion of the Churchill Downs Racetrack
Spring Meet to Ellis Park in June 2023 as well as higher content related expenses and higher advance
deposit wagering taxes in certain jurisdictions.

Gaming

For the second quarter of 2023, revenue increased $63.4 million primarily due to a $68.6 million increase
attributable to the New York and Iowa properties acquired in the P2E Transaction, partially offset by a
$5.2 million net decrease from our other gaming properties.

Adjusted EBITDA increased $16.6 million driven by a $21.4 million increase attributable to the New
York and Iowa properties acquired in the P2E Transaction, partially offset by a $4.8 million decrease from
our other gaming properties.

All Other

For the second quarter of 2023, Adjusted EBITDA decreased $3.7 million primarily driven by increased
corporate compensation and benefits related expenses.

2031 Senior Notes
On April 25, 2023, the Company closed an offering of $600 million in aggregate principal amount of its 6.750% senior notes due 2031. The Company used a portion of the net proceeds from the offering to repay indebtedness outstanding under its Term Loan B Facility due 2024 and to fund related transaction fees and expenses, and intends to use the remainder of the proceeds for working capital and other general corporate purposes.

Two-for-One Stock Split
Effective May 22, 2023, the Company's common stock was split two-for-one with a proportionate increase in the number of its authorized shares of common stock.

The Company's second quarter of 2023 net income was $143.0 million compared to $339.3 million in the
prior year quarter.
The following impacted the comparability of the Company's second quarter net income:

• $193.6 million after-tax gain on the sale of the Calder property in 2022;
• $18.5 million after-tax increase in costs in 2023 due to Presque Isle impairment;
• $6.0 million after-tax net increase in all other nonrecurring expenses

Excluding the items above, second quarter 2023 net income increased $21.8 million primarily due to the
following:

• $43.9 million after-tax increase primarily driven by the results of our operations;
• Partially offset by a $22.1 million after-tax increase in interest expense associated with higher
  outstanding debt balances.

Conference Call
A conference call regarding this news release is scheduled for Thursday, July 27, 2023 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 registering in advance via teleconference here. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are encouraged to dial-in 15 minutes prior to the start time. An online replay will be available by noon ET on Thursday, July 27, 2023. A copy of the Company’s news release announcing quarterly results and relevant financial and statistical information about the period will be accessible at http://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;
• Gain on Calder land sale;
• Legal reserves;
• Pre-opening expense; and
• Other charges, recoveries and expenses.

On June 26, 2023, the Company's management agreement for Lady Luck Casino Nemacolin expired and was not renewed. The Company completed the sale of substantially all of its assets at Lady Luck Casino Nemacolin for an immaterial amount.

As of December 31, 2021, Arlington ceased racing and simulcast operations given the pending sale of the property to the Chicago Bears. Arlington's operating loss in the current year quarter was treated as an adjustment to EBITDA and is included in Other expenses, net in the Reconciliation of Comprehensive Income to Adjusted EBITDA.

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.

To view and download the full 2023 Second Quarter Results Press Release, please visit our Investor Relations Website.

About Churchill Downs Incorporated

Churchill Downs Incorporated (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. More information is available at http://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, 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 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; 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 the 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 and Casino 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 litigations; 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.

LOUISVILLE, Ky., Feb. 22, 2023 (GLOBE NEWSWIRE) - Churchill Downs Incorporated (Nasdaq: CHDN) (the “Company”, “CDI”) today reported business results for the quarter and full year ended December 31, 2022.

Company Highlights

• Record 2022 net revenue of $1,809.8 million, up 13% compared to $1,597.2 million in the prior year
• Record 2022 net income of $439.4 million, up 76% compared to $249.1 million in the prior year
• Record 2022 Adjusted EBITDA of $763.6 million, up 22% compared to $627.0 million in the prior year
• We successfully ran the 148^th Kentucky Derby on the first Saturday in May generating record Adjusted EBITDA
• We completed the acquisition of substantially all the assets of Peninsula Pacific Entertainment LLC with a purchase price of $2.75 billion on November 1, 2022 (“P2E Transaction”)
• We completed the acquisition of Chasers Poker Room in Salem, New Hampshire on September 2, 2022, which will enable the Company to expand its historical racing machine (“HRM”) strategy with table games to the New England market (“Chasers Transaction”)
• We completed the acquisition of Ellis Park Racing & Gaming on September 26, 2022, which includes the rights to build a HRM entertainment venue in Owensboro, Kentucky (“Ellis Park Transaction”)
• We closed the sale of the excess Calder land for $291.0 million on June 17, 2022
• We closed the sale of our Arlington Heights, Illinois property to the Chicago Bears for $197.2 million on February 15, 2023

During the first quarter of 2022, we updated our operating segments to include the results of our United Tote business in the TwinSpires segment. Results of our United Tote business were previously included in our All Other segment. During the fourth quarter of 2022, we also updated our operating segments to reflect the geographies in which we operate.

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

Live and Historical Racing

Fourth Quarter 2022

• Net revenue for the fourth quarter of 2022 increased $87.0 million from the prior year quarter primarily due to $62.4 million in revenue attributable to the Virginia properties acquired in the P2E Transaction, $6.9 million in revenue attributable to properties acquired in the Ellis Park and Chasers Transactions, and a $17.7 million increase driven primarily by continued growth at our Oak Grove property and the opening of Turfway Park in September 2022.
• Adjusted EBITDA for the fourth quarter of 2022 increased $30.6 million from the prior year quarter primarily due to a $30.1 million increase attributable to the Virginia properties acquired in the P2E Transaction and a $0.5 million increase attributable to the Chasers Transaction. Adjusted EBITDA growth from our Oak Grove property was offset by a decrease from Turfway Park associated with its first quarter of operation and from Derby City Gaming due to disruption from construction associated with the gaming floor and hotel expansion.

Total Year 2022

• Net revenue for 2022 increased $215.8 million primarily due to $62.4 million in revenue attributable to the Virginia properties acquired in the P2E Transaction, $8.0 million in revenue attributable to properties acquired in the Ellis Park and Chasers Transactions, $77.6 million in increased revenue at Churchill Downs Racetrack primarily due to the running of the 2022 Kentucky Derby without capacity restrictions that were in place in 2021, and a $67.8 million increase driven primarily by growth at our Oak Grove property and at Derby City Gaming as well as the opening of Turfway Park in September 2022.
• Adjusted EBITDA for 2022 increased $112.5 million due to a $30.1 million increase attributable to the Virginia properties acquired in the P2E Transaction, a $0.7 million increase attributable to properties acquired in the Ellis Park and Chasers Transactions, a $59.1 million increase at Churchill Downs Racetrack primarily due to the running of the 2022 Kentucky Derby without capacity restrictions that were in place in 2021, and a $22.6 million increase primarily due to the continued growth at our Oak Grove property and at Derby City Gaming.

TwinSpires

Fourth Quarter 2022

• Net revenue for the fourth quarter of 2022 decreased $6.9 million from the prior year quarter primarily due to the decision to exit the direct online Sports and Casino business in the first quarter of 2022 and due to a decline in Horse Racing wagering.
• Adjusted EBITDA for the fourth quarter of 2022 increased $12.1 million from the prior year quarter due to a $14.3 million increase from our Sports and Casino business primarily due to decreased marketing and promotional activities and a $2.2 million decrease attributable to lower Horse Racing net revenue.

Total Year 2022

• Net revenue decreased $16.2 million primarily due to a decrease in pari-mutuel handle as a higher portion of our patrons returned to wagering at brick-and-mortar facilities instead of wagering online and the decision to exit the direct online Sports and Casino business in the first quarter of 2022.
• Adjusted EBITDA for 2022 increased $31.4 million primarily due to a $40.0 million increase from our Sports and Casino business primarily due to decreased marketing and promotional activities and an $8.6 million decrease attributable to lower Horse Racing net revenue.

Gaming

Fourth Quarter 2022

• Net revenue for the fourth quarter of 2022 increased $39.4 million from the prior year quarter primarily due to $46.5 million attributable to the New York and Iowa properties acquired in the P2E Transaction and a $7.1 million decrease from seven of our existing wholly-owned properties in five states that was partially offset by growth at our Ocean Downs property in Maryland.
• Adjusted EBITDA for the fourth quarter of 2022 increased $13.4 million from the prior year quarter driven by a $17.9 million increase attributable to the New York and Iowa properties acquired as part of the P2E Transaction, a $1.2 million increase from our equity investments, and a $5.7 million decrease at our existing wholly-owned properties.

Total Year 2022

• Net revenue increased $63.4 million primarily due to $46.5 million attributable to our New York and Iowa properties acquired in the P2E Transaction, $25.5 million in Maine, Florida, and Maryland as a result of certain capacity restrictions during the first half of 2021 and a $9.7 million increase in Louisiana as a result of the 2022 Jazz Festival that was not held in the prior year due to COVID-19 and shutdowns in 2021 due to Hurricane Ida that did not recur. Partially offsetting these increases was a decrease of $18.3 million primarily from our Mississippi and Pennsylvania properties due to the current economic conditions.
• Adjusted EBITDA for 2022 increased $10.0 million driven by a $17.9 million increase in New York and Iowa from the properties acquired as part of the P2E Transaction, an $11.6 million increase primarily from our properties in Maine, Florida, and Louisiana as a result of capacity restrictions in 2021 that did not recur, and a $2.8 million increase from our equity investments. Partially offsetting these increases was a decrease of $22.3 million primarily from our Mississippi and Pennsylvania properties due to the current economic conditions.

All Other

Fourth Quarter 2022

• Net revenue for the fourth quarter of 2022 decreased $3.1 million from the prior year quarter primarily as a result of Arlington International Racecourse (“Arlington”) ceasing racing and simulcast operations at the end of 2021.
• Adjusted EBITDA for the fourth quarter of 2022 decreased $2.4 million from the prior year quarter due to a $3.8 million increase in Corporate compensation related expenses driven by enterprise growth and increased legal fees that was partially offset by the elimination of the $1.4 million operating loss related to Arlington.

Total Year 2022

• Net revenue for 2022 decreased $45.9 million primarily as a result of Arlington ceasing racing and simulcast operations at the end of 2021.
• Adjusted EBITDA for 2022 decreased $17.3 million primarily due to the elimination of the $9.7 million operating income related to Arlington as a result of ceasing racing and simulcast operations at the end of 2021 and a $7.6 million increase in Corporate compensation related expenses, legal fees, and charitable donations.

Peninsula Pacific Entertainment LLC Acquisition

On November 1, 2022, the Company completed the acquisition of substantially all the assets of Peninsula Pacific Entertainment LLC (“P2E”) with a base purchase price of $2.75 billion subject to working capital and other purchase price adjustments. The P2E assets acquired included Colonial Downs Racetrack and six HRM entertainment venues in Virginia, del Lago Resort & Casino in New York, and Hard Rock Hotel & Casino in Iowa, as well as the development rights for two properties currently under development in Dumfries and Emporia, Virginia with up to five additional HRM entertainment venues, and ONE Casino & Resort in collaboration with Urban One.

Exacta Systems, LLC Acquisition

On December 19, 2022, the Company announced that it entered into a definitive agreement under which we would acquire all the outstanding equity interests of Exacta Systems, LLC for total consideration of $250.0 million in cash, subject to certain working capital and other purchase price adjustments. This transaction will provide the Company the ability to realize synergies related to the Company's recent acquisition of the HRM entertainment venues in Virginia.

Share Repurchase Program

The Company repurchased 146,724 shares of its common stock at an average share price of approximately $204.44 based on trade date in conjunction with its publicly announced share repurchase program at a total cost of $30.0 million in the fourth quarter of 2022. The Company repurchased 873,922 shares of its common stock at an average share price of approximately $200.78 based on trade date in conjunction with its publicly announced share repurchase program at a total cost of $175.5 million in 2022. We had $270.2 million of repurchase authority remaining under this program on December 31, 2022.

Annual Dividend

On October 25, 2022, the Company's Board of Directors approved an annual cash dividend on the Company's common stock of $0.714 per outstanding share, a 7% increase over the prior year. The dividend was payable on January 6, 2023 to shareholders of record as of the close of business on December 2, 2022, with the aggregate cash dividend paid to each shareholder rounded to the nearest whole cent. The 7% increase marks the twelfth consecutive year that the Company has increased the dividend.

Capital Investments

We currently expect our project capital to be approximately $575 to $675 million in 2023, although this amount may vary significantly based on the timing of work completed, unanticipated delays, and timing of payments to third parties. We plan to use our operating cash flows, cash on hand, and the proceeds from our land sales to fund our capital project expenditures.

Term Loan A Increase

CDI has received commitments to increase our existing term loan A due 2027 from $800 million to $1,300 million and to make certain other changes to its existing credit agreement. The interest rate applicable to such increased loans will be SOFR-based plus a spread, determined by our total net leverage ratio. Closing on our term loan A increase is subject to finalizing documentation, approvals from certain gaming regulators and satisfaction of closing conditions, which is planned to take place within the next week. We intend to use proceeds from the term loan A increase to repay outstanding borrowings under our revolving credit facility.

Fourth Quarter 2022 Results

The Company's fourth quarter 2022 net income was $1.0 million compared to $43.3 million in the prior year quarter.

The following items impacted the comparability of the Company's fourth quarter net income:

• $22.2 million increase in non-cash after-tax increase in asset impairments at Presque Isle;
• $23.3 million after-tax increase in expenses related to transaction, pre-opening and other expenses, net;
• $3.6 million after-tax reduction in the benefit related to our equity portion of the non-cash change in the fair value of Rivers Des Plaines' interest rate swaps; and
• $0.4 million after-tax increase in legal reserves.

Partially offset by:

• $1.0 million after-tax decrease in expenses related to our equity portion of Rivers Des Plaines' legal reserves and transaction costs that did not occur in the current year quarter.

Excluding the items above, fourth quarter 2022 adjusted net income increased $6.3 million primarily due to the following:

• $29.5 million after-tax increase from the prior year quarter driven by the results of our operations and equity income from our unconsolidated affiliates; and
• Partially offset by $23.2 million after-tax increase from the prior year quarter in interest expense associated with higher outstanding debt balances.

Full Year 2022 Results

The Company's 2022 net income attributable to Churchill Downs Incorporated was $439.4 million compared to $249.1 million in the prior year.

The following items impacted the comparability of the Company's full year net income from continuing operations:

• $198.7 million after tax gain on the sale of Calder assets; and
• $6.5 million after tax decrease in expense related to Rivers Des Plaines' legal reserves and transaction costs.

Partially offset by:

• $35.5 million after-tax increase in expenses related to transaction, pre-opening and other expenses, net;
• $17.8 million non-cash after-tax increase in asset impairments;
• $2.8 million after-tax increase in legal reserves; and
• $0.7 million of other charges.

Excluding these items, 2022 net income from continuing operations increased $41.8 million compared to the prior year primarily due to the following:

• $63.5 million after-tax increase driven by the results of our operations and equity in income from our unconsolidated affiliates;
• Partially offset by a $21.7 million after-tax increase in interest expense associated with higher outstanding debt balances.

Conference Call

A conference call regarding this news release is scheduled for Thursday, February 23, 2023 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 registering in advance via teleconference here. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are encouraged to dial-in 15 minutes prior to the start time. An online replay will be available by noon ET on Thursday, February 23, 2023. 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;
• Gain on Calder land sale;
• Legal reserves;
• Pre-opening expense; and
• Other charges, recoveries and expenses.

As of December 31, 2021, Arlington ceased racing and simulcast operations given the pending sale of the property to the Chicago Bears. Arlington's operating loss in the current year quarter was treated as an adjustment to EBITDA and is included in Other expenses, net in the Reconciliation of Comprehensive Income to Adjusted EBITDA.

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 (“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,” 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, 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 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 expand our TwinSpires Sports and Casino business and effectively compete; inability to identify and complete expansion, acquisition 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; 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.

LOUISVILLE, Ky., Oct. 26, 2022 (GLOBE NEWSWIRE) -- Churchill Downs Incorporated (Nasdaq: CHDN) (the "Company") today reported business results for the third quarter ended September 30, 2022.

Third Quarter 2022 Highlights

• Net revenue of $383.1 million compared to $393.0 million in third quarter 2021
• Net income of $57.0 million compared to $61.4 million in third quarter 2021
• Record third quarter Adjusted EBITDA of $163.2 million compared to $156.1 million in third quarter 2021
• Completed the previously-announced purchase of Chasers Poker Room in Salem, New Hampshire ("Chasers")
• Announced and closed on the acquisition of Ellis Park Racing & Gaming ("Ellis Park") in Henderson, Kentucky for total consideration of $79.0 million in cash
• Announced a multi-year agreement with FanDuel to enable FanDuel to create a fully integrated and seamless wagering experience with a single wallet for horse racing and sports

During the first quarter of 2022, we updated our operating segments to include the results of our United Tote business in the TwinSpires segment. 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

For the third quarter of 2022, net revenue increased $20.9 million due primarily to a $6.5 million increase at Churchill Downs Racetrack as a result of increased handle from holding more live race days in the third quarter of 2022 as compared to the same quarter of 2021, a $6.2 million increase at Oak Grove Racing, Gaming and Hotel ("Oak Grove"), a $3.2 million increase at Turfway Park as a result of the opening of the historical racing facility on September 1, 2022, a $2.6 million increase at Newport Racing & Gaming ("Newport"), a $1.3 million increase at Derby City Gaming, and a $1.1 million increase related to the acquisitions of Chasers and Ellis Park in September 2022.

Adjusted EBITDA increased $6.8 million due to a $1.8 million increase at Churchill Downs Racetrack driven by increased race days in the third quarter of 2022 as compared to the same quarter of 2021 and a $5.0 million increase at our HRM properties driven primarily by a $3.1 million increase at Oak Grove and a $1.6 million increase at Newport.

TwinSpires

For the third quarter of 2022, net revenue decreased $1.6 million from the prior year quarter primarily due to a decrease of $3.4 million from Sports and Casino and a $1.8 million increase from Horse Racing. The decrease in Sports and Casino was driven by the decision to exit the direct online Sports and Casino business in the first quarter of 2022. The increase in Horse Racing net revenue was driven by increased handle from our high wagering-volume customer base.

Adjusted EBITDA increased $9.0 million primarily due to an $11.1 million increase from our Sports and Casino business due to decreased online marketing and promotional activities in the current year quarter. This increase was offset by a $1.5 million decrease from Horse Racing due to increased content expenses and a $0.6 million decrease from United Tote.

Gaming

For the third quarter of 2022, net revenue increased $0.3 million primarily due to increases at Fair Grounds and Ocean Downs. Fair Grounds revenue increased $5.7 million as a result of closures in the prior year quarter from Hurricane Ida that did not recur and incremental historical racing revenue from machines installed at certain off-track betting facilities. Ocean Downs net revenue increased $1.6 million as a result of strong attendance during the summer months. These increases were nearly offset by decreases at our Mississippi and Pennsylvania properties as a result of current economic conditions and competitive pressures.

Adjusted EBITDA increased $0.9 million driven by a $1.4 million increase from our equity investments partially offset by a $0.5 million decrease at our wholly-owned Gaming properties. The increase in our equity investments was driven by increased revenue at Rivers Des Plaines. The decrease from our wholly-owned Gaming properties is the result of decreased revenue and increases in marketing and salaries expense. Gaming Adjusted EBITDA includes $4.1 million in proceeds received for business interruption insurance claims related to Hurricane Ida.

All Other

For the third quarter of 2022, All Other revenue and Adjusted EBITDA decreased primarily as a result of Arlington not conducting live racing in the third quarter of 2022 as we ceased 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.

Chasers Poker Room Acquisition:

On September 2, 2022, the Company completed its previously announced purchase of Chasers in Salem, New Hampshire. Chasers is a charitable gaming facility located approximately 30 miles from Boston, Massachusetts, that offers poker and a variety of table games. The Company plans to develop an expanded charitable gaming facility in Salem to accommodate historical racing machines and table games. As part of the acquisition, the Company made an initial payment to the sellers for rights to operate the poker room and to build a historical racing facility. Additional payments will be made once all necessary permits are obtained and the planned historical racing facility is opened. The Company expects the total investment in Salem, inclusive of the Chasers purchase price, to be approximately $150 million.

Ellis Park Acquisition:

On September 26, 2022, the Company completed the acquisition of Ellis Park in Henderson, Kentucky for total consideration of $79.0 million in cash, subject to certain working capital and other purchase price adjustments. Ellis Park is a Thoroughbred racetrack and gaming facility located north of the Ohio River and just south of Evansville, Indiana and features approximately 300 historical racing machines ("HRMs"). In acquiring Ellis Park, the Company also assumes the opportunity to construct a track extension facility with HRMs in Owensboro, Kentucky. Over the next year, the Company expects its total investment in Henderson and Daviess Counties to be approximately $75 million in addition to the purchase price.

Peninsula Pacific Entertainment LLC ("P2E") Acquisition:

The Company has entered into a definitive purchase agreement to acquire substantially all of the assets of P2E for total consideration of $2.75 billion (the “P2E Acquisition”). The P2E Acquisition contemplates the Company acquiring the following properties: Colonial Downs Racetrack in New Kent, Virginia, six historical racing entertainment venues across Virginia, del Lago Resort & Casino in Waterloo, New York, and Hard Rock Hotel & Casino in Sioux City, Iowa (“Hard Rock Sioux City”).

The P2E Acquisition also includes other development rights including the opportunity, under Virginia law, to develop up to five additional HRM entertainment venues in Virginia with collectively up to approximately 2,300 additional HRMs. These development rights include:

• The rights to build a new HRM entertainment venue with up to 1,150 HRMs in Dumfries, Virginia with potential for expansion up to 1,800 HRMs after initial build out. The Dumfries facility will replace the existing Rosie's Dumfries facility located in northern Virginia and the initial phase of the project is expected to open in 2023.
• The rights to develop one of the additional HRM entertainment venues with up to 150 HRMs in Emporia, Virginia. The Emporia Project will be located along I-95 near the North Carolina border and is expected to open in 2023.

The P2E Acquisition also includes the rights to P2E’s ongoing effort in partnership with Urban One, to develop ONE Casino + Resort, a $565 million destination casino in Richmond, Virginia.

The Company has obtained the acquisition of ownership interest approval for the Virginia properties from the Virginia Racing Commission and approval for Hard Rock Sioux City from the Iowa Racing and Gaming Commission. The P2E Transaction remains dependent on customary closing conditions, including the Company obtaining approval from the New York State Gaming Commission. The transaction is expected to close before the end of 2022.

Share Repurchase Program:

The Company repurchased 288,781 shares of its common stock at an average share price of approximately $204.04 based on trade date in conjunction with its publicly announced share repurchase program at a total cost of $59.0 million in the third quarter of 2022. We had approximately $300.2 million of repurchase authority remaining under this program as of September 30, 2022.

Annual Dividend:

On October 25, 2022, the company's Board of Directors approved an annual cash dividend on the Company's common stock of $0.714 per outstanding share, a 7 percent increase over the prior year. The dividend is payable on January 6, 2023, to shareholders of record as of the close of business on December 2, 2022, with the aggregate cash dividend paid to each shareholder rounded to the nearest whole cent. This marks the twelfth consecutive year that the Company has increased the dividend.

The Company's third quarter of 2022 net income was $57.0 million compared to $61.4 million in the prior year quarter.

The following items impacted the comparability of the Company's third quarter net income:

• $2.4 million after-tax increase in expenses related to transaction, pre-opening and other expenses, net; and
• $1.4 million after-tax reduction in the benefit related to our equity portion of the non-cash change in the fair value of Rivers Des Plaines' interest rate swaps.

These items were partially offset by:

• $0.3 million after-tax decrease in expenses related to our equity portion of Rivers Des Plaines' legal reserves and transaction costs.

Excluding the items above, third quarter 2022 adjusted net income decreased $0.9 million primarily due to the following:

• $11.5 million after-tax increase from the prior year quarter in interest expense associated with higher outstanding debt balances;
• Partially offset by $10.6 million after-tax increase from the prior year quarter driven by proceeds from business interruption insurance from Hurricane Ida and other nonrecurring income tax benefits.

Conference Call

A conference call regarding this news release is scheduled for Thursday, October 27, 2022, at 9 a.m. ET. Investors and other interested parties may listen to the teleconference by accessing the online, real-time webcast at http://ir.churchilldownsincorporated.com/events.cfm, or by registering in advance via teleconference here. Once registration is completed, participants will be provided with a dial-in number containing a personalized conference code to access the call. All participants are instructed to dial-in 15 minutes prior to the start time. An online replay will be available at approximately noon ET on Thursday, October 27, 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;
• Gain on Calder land sale;
• Legal reserves;
• Pre-opening expense; and
• Other charges, recoveries and expenses.

As of December 31, 2021, Arlington ceased racing and simulcast operations given the pending sale of the property to the Chicago Bears. Arlington's operating loss in the current year quarter was treated as an adjustment to EBITDA and is included in Other expenses, net in the Reconciliation of Comprehensive Income to Adjusted EBITDA.

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 (“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,” 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, 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 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 expand our TwinSpires Sports and Casino business and effectively compete; inability to identify and complete expansion, acquisition 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; 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.

LOUISVILLE, KY., (June 27, 2022) – Churchill Downs Incorporated (Nasdaq: CHDN) (the "Company") today reported business results for the second quarter ended June 30, 2022.

Second Quarter 2022 Highlights

• Record second quarter 2022 results:
  • Record net revenue of $582.5 million compared to $515.1 million in second quarter 2021
  • Record net income of $339.3 million compared to $108.3 million in second quarter 2021
  • Record Adjusted EBITDA of $291.2 million compared to $233.3 million in second quarter 2021
• Our Live and Historical Racing segment delivered record revenue and Adjusted EBITDA, with Adjusted EBITDA up 67% compared to the second quarter of 2021
  • Churchill Downs Racetrack ran the 148th Kentucky Derby with record Derby Week all-sources handle for Churchill Downs Racetrack, record Derby Week Adjusted EBITDA, and debuted the new Homestretch Club
• The TwinSpires segment delivered Adjusted EBITDA of $33.9 million, up 38% compared to the second quarter of 2021
• Closed on the sale of 115.7 acres of excess land near Calder Casino for $291 million

Second Quarter 2022 Results

The Company's second quarter of 2022 net income was $339.3 million compared to $108.3 million in the prior year quarter.

The following items impacted the comparability of the Company's second quarter net income:

• $193.6 million after-tax gain on the sale of Calder land;
• $8.1 million after-tax charge related to the 2021 asset impairment at Churchill Downs Racetrack that did not recur in 2022;
• $4.7 million after-tax decrease in expenses related to our equity portion of Rivers Des Plaines' legal reserves and transaction costs; and
• $0.3 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.

These increases were partially offset by:

• $2.8 million after-tax increase in expenses related to transaction, pre-opening and other expenses, net; and
• $2.3 million after-tax increase in legal reserves.

Excluding the items above, second quarter 2022 adjusted net income increased $29.4 million primarily due to the following:

• $38.6 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 $9.2 million after-tax increase from the prior year quarter in interest expense associated with higher outstanding debt balances.

During the first quarter of 2022, we updated our operating segments to include the results of our United Tote business in the TwinSpires segment. 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

For the second quarter of 2022, net revenue increased $85.4 million due primarily to a $69.3 million increase at Churchill Downs Racetrack due to the running of the Kentucky Derby in 2022 without capacity restrictions that were in place in 2021, an $8.5 million increase at Oak Grove Racing, Gaming and Hotel ("Oak Grove"), a $4.3 million increase from Derby City Gaming, a $2.9 million increase at Newport Racing & Gaming ("Newport"), and a $0.4 million increase at Turfway Park. The historical racing machine ("HRM") properties benefited from the elimination of the capacity restrictions that were in place during the second quarter of 2021 and overall continued growth in the businesses.

Adjusted EBITDA increased $65.5 million due to a $58.5 million increase at Churchill Downs Racetrack driven by the running of the Kentucky Derby in 2022 without capacity restrictions that were in place in 2021, a $4.0 million increase at Oak Grove, a $1.7 million increase at Derby City Gaming, and a $1.3 million increase at Newport, all of which were driven by increases in net revenue.

TwinSpires

For the second quarter of 2022, net revenue decreased $4.1 million from the prior year quarter primarily due to a decrease of $2.2 million from Sports and Casino and a $1.9 million decrease from Horse Racing. The decrease in Sports and Casino was driven by the decision to exit the direct online sports and casino business in the first quarter of 2022. Horse Racing net revenue decreased as a higher portion of our patrons returned to wagering at brick-and-mortar facilities instead of wagering online in the current quarter compared to the prior year quarter.

Adjusted EBITDA increased $9.3 million primarily due to a $10.8 million increase from our Sports and Casino business due to decreased online marketing and promotional activities. This increase was partially offset by a $1.2 million decrease from Horse Racing due to a reduction in net revenue and a $0.3 million decrease from United Tote.

Gaming

For the second quarter of 2022, net revenue decreased $1.5 million primarily due to a decrease of $4.6 million at Harlow's and a $4.4 million decrease at Riverwalk as a result of the current economic conditions, competitive pressures, and a mask mandate at Harlow's that was discontinued in early June 2022. These decreases were partially offset by a $4.8 million increase at Oxford due to the lifting of restrictions that were in place during the prior year quarter, a $2.1 million increase at Fair Grounds from the 2022 Jazz Festival that more than offset the decline in Fair Grounds Slots revenue due to current economic conditions and the ongoing closure of our Houma off-track betting facility (“OTB”), and a $0.6 million net increase in all other properties.

Adjusted EBITDA decreased $13.0 million driven by a $10.2 million decrease at our wholly-owned Gaming properties and a $2.8 million decrease from our equity investments. The decreases at our wholly-owned Gaming properties are the result of decreased revenue and increases in marketing and salaries expense. The decrease in our equity investments is also driven by increases in marketing and salaries expense.

All Other

For the second quarter of 2022, All Other Adjusted EBITDA decreased $3.9 million primarily driven by a $3.1 million decrease as a result of Arlington not conducting live racing in the second quarter of 2022 as we ceased 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, which we anticipate to close in the first quarter of 2023.

Peninsula Pacific Entertainment LLC ("P2E") Acquisition:

On February 18, 2022, the Company entered into a definitive purchase agreement to acquire substantially all of the assets of P2E for total consideration of $2.485 billion (the “P2E Acquisition”). The P2E Acquisition contemplates the Company acquiring the following properties: Colonial Downs Racetrack in New Kent, Virginia ("Colonial Downs"), six historical racing entertainment venues across Virginia, del Lago Resort & Casino ("del Lago") in Waterloo, New York, and the operations of Hard Rock Hotel & Casino in Sioux City, Iowa (“Hard Rock Sioux City”).

The Company has obtained the acquisition of ownership interest approval for the Virginia properties from the Virginia Racing Commission. The P2E Transaction remains dependent on customary closing conditions, including the Company obtaining approvals from the New York State Gaming Commission and the Iowa Racing and Gaming Commission. The transaction is expected to close before the end of 2022.

Calder Land Sale:

On June 17, 2022, the Company closed on the previously announced sale of 115.7 acres of excess land near Calder Casino for $291.0 million (or approximately $2.5 million per acre) to Link Logistics, a Blackstone portfolio company. The Company received cash proceeds of $279.0 million which was net of $12.0 million of transaction costs. We recognized a gain of $274.6 million on the sale of the land, which is included in other income (expense) in the accompanying Condensed Consolidated Statements of Comprehensive Income.

The Company is planning on using certain proceeds of the sale to purchase property as part of the previously announced P2E acquisition and to invest in other replacement properties that qualify as Internal Revenue Code §1031 transactions to defer the federal income tax on the gain on the Calder land sale. The Company has identified two reverse like-kind exchange transactions for property acquired prior to the sale of the Calder land and a forward like-kind exchange transaction to acquire additional property for the Internal Revenue Code §1031 transactions.

The first reverse like-kind exchange involved our $9.9 million investment in real property for the Derby City Gaming Downtown facility in Louisville, Kentucky. This reverse like-kind exchange was completed in June 2022.

The second reverse like-kind exchange involves the Company’s investment in real property for the Queen of Terre Haute Casino Resort (“Queen of Terre Haute”) property in Terre Haute, Indiana. As of June 30, 2022, $10.0 million had been invested in real property for the Queen of Terre Haute. The Company plans to make additional investments in real property for the Queen of Terre Haute and expects to complete this reverse like-kind exchange in fourth quarter 2022.

The Company is planning on utilizing the remainder of the proceeds from the Calder land sale to execute a forward like-kind exchange transaction by purchasing property as part of the previously announced P2E Acquisition. The Company anticipates closing the P2E Acquisition prior to the end of 2022. If the acquisition of replacement property is not completed within 180 days of the Calder land sale, all applicable income taxes will be assessed on the remaining gain that was not deferred by acquiring replacement property.

Chasers Poker Room Acquisition:

On March 22, 2022, the Company entered into a definitive purchase agreement to acquire Chasers Poker Room ("Chasers") in Salem, New Hampshire. Chasers is a charitable gaming facility located approximately 30 miles from Boston, Massachusetts, that offers poker and a variety of table games. Following the closing of the acquisition, the Company plans to develop an expanded charitable gaming facility in Salem to accommodate historical racing machines. The Company expects the total investment in Salem, inclusive of the Chasers purchase price to be approximately $150 million. The transaction is expected to close in the third quarter of 2022.

Share Repurchase Program:

The Company repurchased 321,554 shares of its common stock at an average share price of approximately $191.37 based on trade date in conjunction with its publicly announced share repurchase program at a total cost of $61.5 million in the second quarter of 2022. We had approximately $359.1 million of repurchase authority remaining under this program as of June 30, 2022.

April 2022 Financing Transactions:

On April 13, 2022, the Company entered into the fourth amendment of its Credit Agreement (the “Fourth Amendment to the Credit Agreement”) to extend the maturity of its existing revolving credit facility to April 13, 2027 and to increase the commitments under the existing revolving credit facility from $700 million to $1.2 billion (the “Revolver”). The Fourth Amendment to the Credit Agreement also provides for a senior secured Delayed Draw Term Loan A credit facility due April 13, 2027 in the amount of $800 million (the “Delayed Draw Term Loan A”) which is part of the financing for the P2E Acquisition. The interest rate applicable to the borrowings on the Revolver and Delayed Draw Term Loan A will be SOFR plus a spread, determined by the Company’s total net leverage ratio. We also successfully closed into escrow the previously announced offering of $1.2 billion in aggregate principal amount of 5.75% senior notes due 2030. The proceeds from the senior notes offering will also be used for the financing for the P2E Acquisition.

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;
• Gain on Calder land sale;
• Legal reserves;
• Pre-opening expense; and
• Other charges, recoveries and expenses.

As of December 31, 2021, Arlington ceased racing and simulcast operations given the pending sale of the property to the Chicago Bears. Arlington's operating loss in the current year quarter was treated as an adjustment to EBITDA and is included in Other expenses, net in the Reconciliation of Comprehensive Income to Adjusted EBITDA.

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.

CHURCHILL DOWNS INCORPORATED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)

CHURCHILL DOWNS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Unaudited)

CHURCHILL DOWNS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)

(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.

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

CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)

CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)

(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 $7.7 million for the three months ended June 30, 2022 and $5.2 million for the three months ended June 30, 2021.

CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)

(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 $14.8 million for the six months ended June 30, 2022 and $8.9 million for the six months ended June 30, 2021.

CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)

Adjusted EBITDA by segment is comprised of the following:

CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)

Adjusted EBITDA by segment is comprised of the following:

CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL INFORMATION
(Unaudited)

CHURCHILL DOWNS INCORPORATED
SUPPLEMENTAL JOINT VENTURE FINANCIAL STATEMENTS
(Unaudited)

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