Investor Presentaiton
Definition of Non-GAAP Financial Measures
Churchill Downs Incorporated (the “Company”, “we”, “our”) 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 EBITDA is defined as earnings before interest, taxes, depreciation and amortization, adjusted for the following:
Adjusted EBITDA includes our portion of the 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 property and asset sales;
Legal reserves;
Pre-opening expense; and
Other charges, recoveries and expenses
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CHURCHILL DOWNS
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