An expansion of casino gaming and online wagering were the primary drivers behind a 19% increase in net revenue for 2011 at Churchill Downs Inc.
Net earnings from operations for 2011 were $60.8 million, or $3.55 per diluted common share, compared to net earnings from operations of $19.6 million, or $1.26 per diluted common share, in 2010.
"The record financial results in the fourth quarter and for the entire year; our strong cash flows that enabled us to reduce long-term debt by $137.5 million, from $265.1 million at year-end 2010 to $127.6 million at year-end 2011; the 20% increase in our annual dividend to shareholders, from $0.50 per share to $0.60 per share; and the 20.1% increase in our stock price, from $43.40 at year-end 2010 to $52.13 at year-end 2011, all reflect the strategy we have developed and executed over the last several years," said Robert Evans, CDI's chairman and chief executive officer.
In its quarterly report released March 12, Churchill Downs stated its net revenues for the year rose to $696.9 million compared with 2010. The growth was attributed to acquisitions of Youbet.com and the Harlow's Casino Resort & Hotel in Greenville, Miss., along the Mississippi River and about 30 miles north of the Arkansas/Louisiana stateline. Other growth came at the Calder Casino & Race Course, which reported a $17.6 million increase in total revenue.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the year nearly doubled to $158.7 million from $80.4 million in 2010. Harlow's Casino generated $17.5 million of EBITDA even though the casino was closed for 25 days last May due to flooding from the Mississippi River. Calder's casino contributed another $13.7 million in EBITDA compared with $3.7 million the previous year. Fair Grounds slots EBITDA increased $2.2 million to $25.8 million during 2011.
Racing operations earnings increased $27.8 million largely to the release of the Illinois Horse Racing Equity Trust Fund proceeds. The trust fund was approximately $140 million generated by a 3% tax on Illinois riverboat casinos. The money, which had been designated to help stabilize Illinois' horse racing industry, had been held in escow pending legal challenges to the state law that created both the tax and the trust fund. Proceeds from the fund were approximately $19.3 million. An additonal $6.4 million in earnings for CDI came from increased profits during the week leading up to the Kentucky Derby Presented by Yum! Brands (gr. I) and the Kentucky Oaks (gr. I).