CDI Posted Strong Fourth Quarter and Full Year 2021 Growth

Churchill Downs Incorporated (CDI) announced its fourth-quarter and full-year ended December 31, 2021, financial results posting solid growth year-over-year.

Key Financial Metrics

Casino and horse racing operator CDI posted Q4 2021 net income of $43.3 million, up 153% on $17.1 million registered in Q4 2020. The net income figure was derived from fourth-quarter revenue of $364.8 million, a 31% increase on $278.2 million in the respective quarter in the prior year.

For the full year 2021, revenue amounted to $1.597 billion, posting an increase of over 51% on the $1.054 billion CDI generated in 2020. Net income came at $249.1 million to reverse from a negative $81.9 million in the prior year.

Adjusted EBITDA in the fourth quarter and full-year 2021 was $127 million and $627 million, respectively, as compared to $79.2 million in Q4 2020 and $286.5 million for the full previous year.

Fourth Quarter Performance

CDI reported net income from continuing operations in Q4 2021 of $43.3 million, up 164% on $16.4 million in Q4 2020. The continuing operations income was impacted by a number of items while some of these negative effects were offset by other items, the company reported.

CDI’s continuing operations’ income was affected by $10.4 million tax benefit related to its net operating loss in 2020 that did not recur in the current year, $4.7 million after-tax increase in the transaction, pre-opening, and other expenses from the prior-year quarter, $3 million non-cash after-tax increase in asset impairments and $0.9 million after-tax increase related to Rivers Des Plaines’ reserves and transactions costs.

CDI partially offset the negative impact via a $2.3 million after-tax increase in the fair value of Rivers Des Plaines’ interest rate swaps (IRSs) and a $1.9 million non-cash tax decrease related to net deferred tax liabilities that did not recur in the current year.

Full Year Results

CDI reported net income from continuing operations for the full year 2021 of $249.1 million, compared to $13.3 million in 2020.

The full-year continuing operations’ income was impacted by $18.9 million after-tax benefit related to the change in fair value of Rivers Des Plains’ IRSs, $1.9 million non-cash tax decrease due to net deferred tax liabilities that did not recur in the current year, and $1 million non-cash after-tax decrease in asset impairments.

The bottom line was partially offset by $13.3 million tax benefit in 2020 tax operating loss that did not recur in the current year, $7.1 million after-tax increase related to the reserves and transaction costs of Rivers Des Plains, and $0.4 million after-tax increase in transaction, pre-opening and other expenses.

Among the company’s key highlights was the agreement reached with Peninsula Pacific Entertainment outside of the reported period for the acquisition of certain assets for a total price consideration of $2.485 billion.