DEF 14A: Churchill Downs Reports Record Revenue and Income in 2024, Eyes Continued Growth

Churchill Downs Incorporated announces record financial results for 2024, driven by key growth initiatives and strategic investments.

Summary

• Churchill Downs Incorporated (CHDN) reported record net revenue of $2.7 billion for 2024.
• The company also achieved record net income of $427 million and record Adjusted EBITDA of $1.2 billion.
• Key growth initiatives included the completion of the Paddock Project and the historic 150th Kentucky Derby.
• The Rose in Northern Virginia opened in November 2024, and the Terre Haute Casino Resort in Indiana opened in Spring 2024.
• Expansion continues with Owensboro Racing & Gaming in February 2025 and further projects planned through 2026.
• The company is focused on organic capital investments and strategic acquisitions to generate long-term shareholder returns.
• An annual meeting of shareholders is scheduled for April 22, 2025, to vote on director elections, auditor ratification, an omnibus stock and incentive plan, and executive compensation.

Sentiment

Score: 9

Explanation: The document expresses a highly positive sentiment due to record financial results, successful project completions, and a strong outlook for future growth. The tone is optimistic and confident, reflecting management's satisfaction with the company's performance.

Positives

• Record net revenue, net income, and Adjusted EBITDA indicate strong financial performance.
• Successful completion of key projects like the Paddock Project and new casino resorts.
• Continued expansion in the HRM market demonstrates growth and diversification.
• Strong balance sheet supports organic growth and strategic acquisitions.
• High shareholder support for the executive compensation program.
• The company's five-year total shareholder return for 2024 was 97.6% compared to 94.9% for the Russell 1000 and 97.0% for the S&P 500.

Risks

• The document mentions forward-looking statements are subject to risks described in the company's filings with the SEC.
• The document mentions important factors could cause actual results to differ materially from expectations are 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.

Future Outlook

The company is well-positioned for compelling growth, particularly through the Kentucky Derby and HRM opportunities in Virginia and Kentucky, and will pursue strategic acquisitions.

Management Comments

• We are pleased to report a resounding year of growth for our Company.
• We are well-positioned to deliver compelling growth in the coming years.
• We thank our leaders and team members for their contributions to the creation of long-term shareholder value.

Industry Context

The announcement reflects a broader trend in the gaming and entertainment industry of diversification and expansion into new markets, particularly in historical racing and regional casino gaming.

Comparison to Industry Standards

• The company's five-year total shareholder return for 2024 was 97.6% compared to 94.9% for the Russell 1000 and 97.0% for the S&P 500.
• Comparable companies in the gaming and entertainment sector include Aristocrat Leisure Limited, Boyd Gaming Corporation, Caesars Entertainment, Inc., and MGM Resorts International.
• Churchill Downs' performance in Adjusted EBITDA and revenue growth positions it competitively within the industry.

Related Party Transactions

• On January 2, 2024, the Company closed on a privately negotiated transaction entered into with CDI Holdings, LLC, an affiliate of The Duchossois Group, Inc. (TDG) on December 18, 2023 to repurchase 1,000,000 shares of the Companys Common Stock from TDG at a price per share equal to $123.75, for an aggregate purchase price of $123.75 million.

Stakeholder Impact

• Shareholders are expected to benefit from the company's strong financial performance and growth initiatives.
• Employees are recognized for their dedication and hard work in contributing to the company's success.
• Customers will experience enhanced entertainment offerings through new and improved facilities.
• The company's investments in communities are expected to have a positive impact on local economies.

Next Steps

• Shareholders are urged to vote prior to the Annual Meeting by telephone, Internet, or mail.
• The company will continue construction of the Marshall Yards Racing & Gaming HRM venue.
• The company will complete the Starting Gate Pavilion and Courtyard Project for the 151st Kentucky Derby.
• The company will strengthen its Virginia HRM portfolio by completing the Richmond HRM venue expansion and opening The Roseshire in Henrico County.

Key Dates

Keywords

Churchill Downs Incorporated, Kentucky Derby, Adjusted EBITDA, Net Revenue, Net Income, HRM, Gaming, Shareholders, Executive Compensation, Annual Meeting