Churchill Downs, Incorporated

Good day, ladies and gentlemen, and welcome to the Churchill Downs Incorporated First Quarter 2026 Results Conference Call. At this time, all participants are in the listen-only mode. Later, we'll conduct a question-and-answer session, and instructions will be given at that time. We ask all question-and-answer participants to please limit themselves to one question. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Mr. Sam Ulrich. Vice President, Investor Relations.

Thank you, Andrew. Good morning, and welcome to our first quarter 2026 earnings conference call. After the company's prepared remarks, we will open the call for your questions. The company's 2026 first quarter business results were released yesterday afternoon. A copy of this release announcing results and other financial and statistical information about the period to be presented in this conference call, including information required by Regulation G is available at the section of the company's website titled News, located at churchildownsincorporated.com, as well as in the website's investor section. Before we get started, I would like to remind you that some of the statements that we make today may include forward-looking statements. These statements involve a number of risks and uncertainties that could cause actual results to differ materially. All forward-looking statements should be considered in conjunction with the cautionary statements in our earnings release and the risk factors included in our filings with the SEC. specifically the most recent reports on Form 10Q and Form 10K. Any forward-looking statements that we make are based on assumptions as of today, and we undertake no obligation to update these statements as a result of new information or future events. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in yesterday's earnings press release. The press release and Form 10Q are available on our website at churchildownsincorporated.com. And now, I'll turn the call over to our Chief Executive Officer, Mr. Bill Carstangen.

Thanks, Sam. Good morning, everyone. With me today are several members of our team, including Bill Mudd, our President and Chief Operating Officer, Marcia Dahl, our Chief Financial Officer, and Brad Blackwell, our General Counsel. I will begin with a high-level overview of our first quarter performance and key strategic developments. Marcia will then walk through our financial results and capital management strategy in more detail. and then we will open up the call for your questions. Let me start with a few key highlights from the quarter. First, we delivered a strong start to the year with record first quarter net revenues of $663 million and record adjusted EBITDA of $257 million. These results reflect strong execution across our portfolio and continued momentum with our growth strategy. Second, We successfully opened our Marshall yards, historical racing machine venue in Calvert city, Kentucky on time and on budget. This marks our eighth HRM facility in the Commonwealth. Early performance has been encouraging and the property is already contributing to job creation, increased purse funding for Kentucky's horse racing industry and long-term shareholder value. Third, We continue to see strong progress in Virginia where we remain committed to supporting the renaissance of thoroughbred racing. We will host 48 race dates in 2026 and expect to generate significant purse funding from our HRM operations across the state that will be distributed during our race meet at Colonial Downs. We also ran a successful Virginia Derby in March. and we are excited that the winner, Incredibolt, will have the opportunity to compete in this year's Kentucky Derby. We were very pleased with several positive developments in Virginia during the closing stages of the 2026 legislative session. The governor vetoed legislation related to skill games and a proposed new casino in Fairfax County. iGaming also did not receive approval. These outcomes support a more attractive operating environment and we remain committed to continued investment and job creation in Virginia. Another example of our strategy around smart, transformative investments in the thoroughbred industry is reflected in our announcement earlier this week. We signed a definitive agreement to acquire the intellectual property rights to the Preakness Stakes and the Black Eyed Susan Stakes from a subsidiary of the Stronach Group. This includes all trademarks and associated rights with respect to the Preakness Stakes, which is the second leg of the Triple Crown which is the second leg of the three related races for the Phillies.