Churchill Downs Incorporated Reports 2015 Second-Quarter Results

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

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


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

(in millions, except per share data):

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

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

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

(in millions):

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

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

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

(in millions):

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

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

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

(in millions):

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

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

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

(in millions):

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

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

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


A conference call regarding this news release is scheduled for Thursday, July 30, 2015, at 9 a.m. ET. Investors and other interested parties may listen to the teleconference by accessing the online, real-time webcast and broadcast of the call at, or by dialing (877) 372-0878 and entering the pass code 59263186 at least 10 minutes before the appointed time. International callers should dial (253) 237-1169. The online replay will be available at approximately noon EDT and continue for two weeks. A copy of the Company’s news release announcing quarterly results and relevant financial and statistical information about the period will be accessible at

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


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

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

The reader is cautioned that such forward-looking statements are based on information available at the time and/or management’s good faith belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements.  Forward-looking statements speak only as of the date the statement was made.  We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information.  Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “should,” “will,” and similar words, although some forward-looking statements are expressed differently.

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

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

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

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

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

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

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

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

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

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

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

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

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



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