CHDN

This report contains various "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Act"), which provides certain "safe harbor" provisions for forward-looking statements. All forward-looking statements made in this report are made pursuant to the Act. The reader is cautioned that such forward-looking statements are based on information available at the time and / or management’s good faith belief with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements. Forward-looking statements speak only as of the date that the statement was made. We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. Forward-looking statements are typically identified by the use of terms such as "anticipate," "believe," "could," "estimate," "expect," '"intend," "may," "might," "plan," "predict," "project," "seek," "should," "will," "scheduled," and similar words or similar expressions (or negative versions of such words or expressions), although some forward-looking statements are expressed differently. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors that could cause actual results to differ materially from expectations include the following: •the occurrence of extraordinary events, such as terrorist attacks, public health threats, civil unrest, and inclement weather, including as a result of climate change; •the effect of economic conditions on our consumers' confidence and discretionary spending or our access to credit, including the impact of inflation; •changes in, or new interpretations of, applicable tax law or rulings that could result in additional tax liabilities; •the impact of any pandemics, epidemics, or outbreaks of infectious diseases, and related economic matters on our results of operations, financial conditions, and prospects; •lack of confidence in the integrity of our core businesses or any deterioration in our reputation; •negative shifts in public opinion regarding gambling that could result in increased regulation of, or new restrictions on, the gaming industry; •loss of key or highly skilled personnel, as well as general disruptions in the general labor market; •the impact of significant competition, and the expectation that competition levels will increase; •changes in consumer preferences, attendance, wagering, and sponsorships; •risks associated with equity investments, strategic alliances, and other third-party agreements; •inability to respond to rapid technological changes in a timely manner; •concentration and evolution of slot machine and historical racing machine ("HRM") manufacturing and other technology conditions that could impose additional costs; •failure to enter into or maintain agreements with industry constituents, including horsemen and other racetracks; •cybersecurity risk, including cybersecurity breaches, or loss or misuse of our confidential information as a result of a breach including customers’ personal information, or IT system operational disruptions, could lead to government enforcement actions or other litigation; •costs of compliance with increasingly complex laws and regulations regarding data privacy and protection of personal information; •reliance on our technology services and catastrophic events, system failures, errors or defects disrupting our operations; •inability to identify, complete, or fully realize the benefits of, our proposed acquisitions, divestitures, development of new venues or the expansion of existing facilities on time, on budget, or as planned; •difficulty in integrating recent or future acquisitions into our operations; •cost overruns and other uncertainties associated with the development of new venues and the expansion of existing facilities; FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026 28 •general risks related to real estate ownership and significant expenditures, including risks related to environmental liabilities; •personal injury litigation related to injuries occurring at our racetracks; •compliance with the Foreign Corrupt Practices Act or other similar laws and regulations, or applicable anti-money laundering regulations; •payment-related risks, such as risk associated with fraudulent credit card or debit card use; •work stoppages and labor problems; •risks related to pending or future legal proceedings and other actions; •highly regulated operations and changes in the regulatory environment could adversely affect our business; •restrictions in our debt facilities limiting our flexibility to operate our business; •failure to comply with the financial ratios and other covenants in our debt facilities and other indebtedness; •increases to interest rates, disruption in the credit markets or changes to our credit ratings may adversely affect our business; •increase in our insurance costs, or inability to obtain similar insurance coverage in the future, and any inability to recover under our insurance policies for damages sustained at our properties in the event of inclement weather and casualty events; •whether the objective of a strategic alternative review process will be achieved; the terms, structure, benefits and costs of any strategic transaction; the timing of any strategic transaction and whether any strategic transaction will be consummated on the terms proposed or at all; the risk that the announcement or exploration of strategic alternatives could have an adverse effect on our ability to retain key personnel and maintain relationships with partners, suppliers, employees, shareholders and other business relationships; the risk of any unexpected costs or expenses resulting from the exploration of strategic alternatives; the risk of any litigation relating to the exploration of strategic alternatives or any strategic transaction; and •other factors 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. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. The following information is unaudited. Tabular dollars are in millions, except per share amounts. All per share amounts assume dilution unless otherwise noted. This report should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025, including Part I - Item 1A, "Risk Factors" of our Form 10-K for a discussion regarding some of the reasons that actual results may be materially different from those we anticipate. FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026 29 Our Business Churchill Downs Incorporated ("CDI" or the "Company") has been creating extraordinary entertainment experiences for over 150 years, beginning with the Company’s most iconic and enduring asset, the Kentucky Derby. Headquartered in Louisville, Kentucky, CDI has expanded through the development of live and historical racing entertainment venues, the growth of the horse racing online wagering business, expanded pari-mutuel content and technology services to B2C platforms, and the operation and development of regional casino gaming properties. We conduct our business through three reportable segments: Live and Historical Racing, Wagering Services and Solutions, and Gaming. We aggregate our other businesses as well as certain corporate operations in All Other. Key Indicators to Evaluate Business Results and Financial Condition Our management monitors a variety of key indicators to evaluate our business results and financial condition. These indicators include changes in net revenue, operating expense, operating income, earnings per share, outstanding debt balance, operating cash flow, and capital spend. Our consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP"). We also use non-GAAP measures, including EBITDA (earnings before interest, taxes, depreciation and amortization) and Adjusted EBITDA. We believe that the use of Adjusted EBITDA as a key performance measure of results of operations enables management and investors to evaluate and compare from period to period our operating performance in a meaningful and consistent manner. Our chief operating decision maker utilizes Adjusted EBITDA to evaluate segment performance, develop strategy, and allocate resources. Adjusted EBITDA is a supplemental measure of our performance that is not required by, or presented in accordance with, GAAP. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (as determined in accordance with GAAP) as a measure of our operating results. Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, adjusted for the following: Adjusted EBITDA includes our portion of EBITDA from our equity investments and the portion of EBITDA attributable to noncontrolling interests. Adjusted EBITDA excludes: •Transaction expense, net, which includes: –Acquisition, disposition, and property sale related charges; 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 legal reserves and transaction costs; •Asset impairments, net; •Gain on property sales; •Legal reserves; •Pre-opening expense; and •Other charges, recoveries and expenses For segment reporting, Adjusted EBITDA includes intercompany revenue and expense totals that are eliminated in the Condensed Consolidated Statements of Comprehensive Income. See the Reconciliation of Net Income to Adjusted EBITDA included in this section for additional information. Governmental Regulations and Legislative Changes We are subject to various federal, state, and international laws and regulations that affect our businesses. The ownership, operation, and management of our Live and Historical Racing, Wagering Services and Solutions, and Gaming segments, as well as our other operations, are subject to regulation under the laws and regulations of each of the jurisdictions in which we operate. The ownership, operation, and management of our businesses and properties are also subject to legislative actions at both the federal and state level. The following update on our regulatory and legislative actions should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2025, including Part I - Item 1, "Business" for a discussion of regulatory and legislative changes. FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026 30 Specific State Gaming Regulations Louisiana In Louisiana, the 2021 Historical Horse Racing Act (the "2021 HHR Act") allows off-track betting facilities ("OTBs") to have up to 50 HRMs in each OTB. The Company installed approximately 500 HRMs across our 13 OTBs after the 2021 HHR Act was approved. On October 25, 2022, a number of individual plaintiffs associated with video poker and truck stops, filed a lawsuit in the 19th Judicial District Court in East Baton Rouge, Louisiana, against certain racetracks in Louisiana, including our Fair Grounds Race Course and Slots business, alleging that the 2021 HHR Act was unconstitutional to the extent it purports to permit historical racing in a parish without a referendum. On February 23, 2024, the judge issued a ruling in favor of plaintiffs granting summary judgment stating that: (i) historical horseracing is a new form of gaming not specifically authorized by law prior to 1996; (ii) historical horseracing may not be conducted in any parish of the state unless voters approve it through referendum; and (iii) the 2021 HHR Act that authorized historical horseracing is unconstitutional. The Louisiana Supreme Court opinion affirming the ruling of the District Court became final and enforceable May 8, 2025. The Company discontinued its HRM operations in Louisiana on May 8, 2025 and moved the HRMs in the Louisiana OTBs to other HRM venues, primarily located in Virginia. The reduction in revenues resulting from the removal of the HRMs from our OTBs in Louisiana has negatively impacted the comparability of the 2026 Louisiana results to the prior year. The results of the HRMs in Louisiana operations were reported in our Gaming segment. Consolidated Financial Results The following table reflects our net revenue, operating income, net income attributable to Churchill Downs Incorporated, Adjusted EBITDA, and certain other financial information: Three Months Ended June 30, Six Months Ended June 30, (in millions) 2026 2025 Change 2026 2025 Change Net revenue $ 980 $ 934 $ 46 $ 1,643 $ 1,577 $ 66 Operating income 357 327 30 500 462 38 Operating income margin 36 % 35 % 30 % 29 % Net income attributable to Churchill Downs Incorporated 241 217 24 324 294 30 Adjusted EBITDA 477 451 26 734 696 38 Three Months Ended June 30, 2026, Compared to Three Months Ended June 30, 2025 •Net revenue increased $46 million driven by a $33 million increase from the Live and Historical Racing segment primarily due to a record-breaking Derby Week at Churchill Downs Racetrack, a $9 million increase from the Wagering Services and Solutions segment, and a $4 million increase from the Gaming segment. •Operating income increased $30 million driven by a $21 million increase from the Live and Historical Racing segment primarily due to a record-breaking Derby Week at Churchill Downs Racetrack, a $4 million increase from the Wagering Services and Solutions segment, a $3 million increase from the Gaming segment, a $2 million increase attributable to the non-cash impairment charge of Virginia HRMs that did not recur in the current period, and $1 million decrease in transaction costs. These increases were offset by a $1 million decrease from All Other. •Net income attributable to Churchill Downs Incorporated increased $24 million. The following impacted the comparability of the Company's net income for the three months ended June 30, 2026 compared to the three months ended June 30, 2025: a $4 million after-tax decrease in transaction, pre-opening, and other expenses and a $2 million after-tax decrease related to an impairment charge in the prior year quarter related to a write-off of obsolete HRMs in Virginia. Excluding these items, net income increased $18 million due to a $10 million after-tax increase primarily driven by the results of our operations, a $4 million after-tax increase in equity income from our unconsolidated affiliates, and a $4 million after-tax decrease in interest expense. •Adjusted EBITDA increased $26 million driven by a $21 million increase from the Live and Historical Racing segment primarily due to a record-breaking Derby Week at Churchill Downs Racetrack, a $4 million increase from the Wagering Services and Solutions segment, and a $6 million increase from the Gaming segment. These increases were partially offset by $5 million decrease from All Other. FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026 31 Six Months Ended June 30, 2026, Compared to Six Months Ended June 30, 2025 •Net revenue increased $66 million driven by a $57 million increase from the Live and Historical Racing segment primarily due to a record-breaking Derby Week at Churchill Downs Racetrack, and an $11 million increase from the Wagering Services and Solutions segment. These increases were partially offset by a $2 million decrease from the Gaming segment. •Operating income increased $38 million driven by an $36 million increase from the Live and Historical Racing segment primarily due to a record-breaking Derby Week at Churchill Downs Racetrack, a $5 million increase from the Wagering Services and Solutions segment, a $1 million increase from the Gaming segment, and a $2 million increase attributable to the non-cash impairment charge of Virginia HRMs that did not recur in the current period. These increases were offset by a $4 million increase in selling, general and administrative expenses and a $2 million decrease from All Other. •Net income attributable to Churchill Downs Incorporated increased $30 million. The following impacted the comparability of the Company's net income for the six months ended June 30, 2026 compared to the six months ended June 30, 2025: a $3 million after-tax decrease in other charges and recoveries, a $2 million after-tax decrease in transaction, pre-opening, and other expenses, and a $2 million after-tax decrease related to an impairment charge in the prior year quarter related to a write-off of obsolete HRMs in Virginia. Excluding these items, net income increased $23 million due to a $13 million after-tax increase primarily driven by the results of our operations, a $6 million after-tax increase in equity income from our unconsolidated affiliates, and a $4 million after-tax decrease in interest expense. •Adjusted EBITDA increased $38 million driven by a $32 million increase from the Live and Historical Racing segment primarily due to a record-breaking Derby Week at Churchill Downs Racetrack, an $8 million increase from the Wagering Services and Solutions segment, and a $5 million increase from the Gaming segment. These increases were partially offset by a $7 million decrease from All Other. Revenue by Segment The following table presents net revenue for our segments, including intercompany revenue: Three Months Ended June 30, Change Six Months Ended June 30, Change (in millions) 2026 2025 2026 2025 Live and Historical Racing $ 575 $ 541 $ 34 $ 876 $ 818 $ 58 Wagering Services and Solutions 178 168 10 296 284 12 Gaming 270 266 4 532 533 (1) All Other 2 2 — 4 4 — Eliminations (45) (43) (2) (65) (62) (3) Net Revenue $ 980 $ 934 $ 46 $ 1,643 $ 1,577 $ 66 Three Months Ended June 30, 2026, Compared to Three Months Ended June 30, 2025 •Live and Historical Racing revenue increased $34 million due to a $21 million increase from Churchill Downs Racetrack, a $12 million increase from our Kentucky HRM venues, and a $1 million increase from our Virginia HRM venues. The Churchill Downs Racetrack increase was primarily due to a record-breaking Derby Week, including increased NBC broadcast revenue, increased ticketing revenue, increased sponsorship and licensing revenue, and increased wagering revenue. The Kentucky HRM increase was due to a $5 million increase from our Southwestern Kentucky venues, a $3 million increase from our Northern Kentucky venues, a $3 million increase from our Western Kentucky venues, and a $1 million increase from our Louisville venues. The Virginia HRM increase was due to a $5 million net increase primarily from our Northern Virginia venues, partially offset by a $4 million net decrease from our Central Virginia venues primarily from increased competition. •Wagering Services and Solutions revenue increased $10 million due to $9 million growth in our Horse Racing business from record-breaking Derby Week wagering and a $1 million increase from our Exacta business. •Gaming revenue increased $4 million primarily due to an $8 million increase primarily from our New York, Indiana, and Maryland properties, partially offset by a $4 million decrease primarily from the cessation of HRM operations in Louisiana in May 2025. FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026 32 •All Other revenue is consistent with the prior year. All intercompany captive revenue is eliminated in consolidation. Six Months Ended June 30, 2026, Compared to Six Months Ended June 30, 2025 •Live and Historical Racing revenue increased $58 million due to a $20 million increase from Churchill Downs Racetrack, a $29 million increase from our Kentucky HRM venues, a $6 million increase from our Virginia HRM venues, and a $3 million increase primarily from New Hampshire venues. The Churchill Downs Racetrack increase was primarily due to a record-breaking Derby Week, including increased NBC broadcast revenue, increased ticketing revenue, increased sponsorship and licensing revenue, and increased wagering revenue. The Kentucky HRM increase was primarily due to a $9 million increase from our Western Kentucky venues, an $8 million increase from our Southwestern Kentucky venues, an $8 million increase from our Northern Kentucky venues, and a $4 million increase from our Louisville venues. The Virginia HRM increase was primarily due to a $10 million net increase from our Northern Virginia venues and a $1 million increase from our Western Virginia venue, partially offset by a net $5 million decrease from Central Virginia venues primarily from increased competition. •Wagering Services and Solutions revenue increased $12 million due to $9 million growth in our Horse Racing business from record-breaking Derby Week wagering, a $2 million net increase in our retail and online sportsbooks, and a $1 million increase from our Exacta business. •Gaming revenue decreased $1 million primarily due to a $14 million net decrease from our Louisiana, Florida, and Mississippi properties primarily from the cessation of HRM operations in Louisiana in May 2025, partially offset by a $13 million increase in our New York, Indiana, Maryland, and Iowa properties. •All Other revenue is consistent with the prior year. All intercompany captive revenue is eliminated in consolidation. Consolidated Operating Expense The following table is a summary of our consolidated operating expense: Three Months Ended June 30, Change Six Months Ended June 30, Change (in millions) 2026 2025 2026 2025 Gaming taxes and purses $ 217 $ 213 $ 4 $ 387 $ 378 $ 9 Salaries and benefits 90 88 2 176 174 2 Content expense 51 49 2 89 87 2 Selling, general and administrative expense 61 61 — 120 116 4 Depreciation and amortization 59 58 1 115 117 (2) Marketing and advertising 31 30 1 52 54 (2) Maintenance, insurance and utilities 22 22 — 49 43 6 Property and other taxes 9 6 3 19 13 6 Transaction expense, net 1 2 (1) 2 2 — Asset impairments, net — 2 (2) — 2 (2) Other operating expense 82 76 6 134 129 5 Total expense $ 623 $ 607 $ 16 $ 1,143 $ 1,115 $ 28 Three and Six Months Ended June 30, 2026, Compared to Three and Six Months Ended June 30, 2025 Operating expenses increased $16 million and $28 million for the three and six months ended June 30, 2026 compared to June 30, 2025 primarily due to higher gaming taxes as a result of increased revenues. The remaining increase is primarily driven by normal inflationary activity resulting in increased operational costs. FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026 33 Adjusted EBITDA We believe that the use of Adjusted EBITDA as a key performance measure of the results of operations enables management and investors to evaluate and compare from period to period our operating performance in a meaningful and consistent manner. Adjusted EBITDA is a supplemental measure of our performance that is not required by or presented in accordance with GAAP. 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. Three Months Ended June 30, Change Six Months Ended June 30, Change (in millions) 2026 2025 2026 2025 Live and Historical Racing $ 318 $ 297 $ 21 $ 431 $ 399 $ 32 Wagering Services and Solutions 52 48 4 97 89 8 Gaming 133 127 6 256 251 5 Total Segment Adjusted EBITDA 503 472 31 784 739 45 All Other (26) (21) (5) (50) (43) (7) Total Adjusted EBITDA $ 477 $ 451 $ 26 $ 734 $ 696 $ 38 Three Months Ended June 30, 2026, Compared to Three Months Ended June 30, 2025 •Live and Historical Racing Adjusted EBITDA increased $21 million due to a $16 million increase from Churchill Downs Racetrack, a $6 million increase from our Kentucky HRM venues, and a $1 million increase from our Virginia HRM venues, partially offset by a $2 million decrease at our New Hampshire venues primarily due to the planned closure of our temporary Casino Salem venue during the construction of the Rockingham Grand Casino venue. The Churchill Downs Racetrack increase was primarily due to a record-breaking Derby Week, including increased NBC broadcast revenue, increased ticketing revenue, increased sponsorship and licensing revenue, and increased wagering revenue, partially offset by higher operating expenses. The Kentucky HRM increase was due to a $2 million increase from our Northern Kentucky venues, a $2 million increase from our Southwestern Kentucky venues, and a $2 million increase from our Western Kentucky venues. The Virginia HRM increase was primarily due to a $4 million net increase from our Northern Virginia venues, a $1 million increase from our Western Virginia venue, and a $1 million increase from our Southern Virginia venues, partially offset by a $5 million net decrease from our Central Virginia venues primarily from increased competition. •Wagering Services and Solutions Adjusted EBITDA increased $4 million due to a $3 million increase from our Horse Racing business and a $1 million increase from our Exacta business. •Gaming Adjusted EBITDA increased $6 million. Our equity investments increased $4 million from strong performance at Rivers Des Plaines in Illinois and Miami Valley Gaming in Ohio. Our wholly-owned gaming properties increased $4 million from strong performance at our New York venue, partially offset by a $2 million decrease primarily from the cessation of HRM operations in Louisiana in May 2025. •All Other Adjusted EBITDA decreased $5 million primarily due to a reduction of corporate legal-related fees in the prior year quarter and claim development within our captive insurance company. Six Months Ended June 30, 2026, Compared to Six Months Ended June 30, 2025 •Live and Historical Racing Adjusted EBITDA increased $32 million due to a $14 million increase from Churchill Downs Racetrack, a $15 million increase from our Kentucky HRM venues, and a $4 million increase from our Virginia HRM venues, partially offset by a $1 million decrease at our New Hampshire venues primarily due to the planned closure of our temporary Casino Salem venue during the construction of the Rockingham Grand Casino venue. The Churchill Downs Racetrack increase was primarily due to a record-breaking Derby Week, including increased NBC broadcast revenue, increased ticketing revenue, increased sponsorship and licensing revenue, and increased wagering revenue, partially offset by higher operating expenses. The Kentucky HRM increase was due to a $6 million increase from our Northern Kentucky venues, a $5 million increase from our Western Kentucky venues, a $2 million increase from our Southwestern Kentucky venues, and a $3 million increase from our Louisville venues. The Virginia HRM increase was primarily due to an $11 million net increase from our Northern Virginia venues, and a $2 million net increase from our Western Virginia and Southern Virginia venues, partially offset by a $9 million net decrease from our Central Virginia venues primarily from increased competition. FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026 34 •Wagering Services and Solutions Adjusted EBITDA increased $8 million due to a $5 million increase from our Horse Racing business, a $2 million increase in online and retail sports betting, and a $1 million increase from our Exacta business. •Gaming Adjusted EBITDA increased $5 million due to a $6 million increase from strong performance at Rivers Des Plaines in Illinois and Miami Valley Gaming in Ohio. Our wholly-owned gaming properties increased $7 million from our New York and Maryland venues, offset by a $8 million decrease from our other eight wholly-owned gaming venues. •All Other Adjusted EBITDA decreased $7 million primarily due to a reduction of corporate legal-related fees in the prior year and claim development within our captive insurance company. Reconciliation of Net Income to Adjusted EBITDA Three Months Ended June 30, Change Six Months Ended June 30, Change (in millions) 2026 2025 2026 2025 Net income attributable to Churchill Downs Incorporated $ 241 $ 217 $ 24 $ 324 $ 294 $ 30 Net income attributable to noncontrolling interests 1 1 — 1 1 — Net income 242 218 24 325 295 30 Adjustments Depreciation and amortization 59 58 1 115 117 (2) Interest expense 70 75 (5) 142 147 (5) Income tax provision 86 74 12 116 93 23 Stock-based compensation expense 8 7 1 13 11 2 Pre-opening expense 2 2 — 5 6 (1) Other expense, net — 4 (4) 2 4 (2) Asset impairments, net — 2 (2) — 2 (2) Transaction expense, net 1 2 (1) 2 2 — Other income, expense: Interest, depreciation and amortization expense related to equity investments 10 10 — 19 20 (1) Other charges and recoveries, net (1) (1) — (5) (1) (4) Total adjustments 235 233 2 409 401 8 Adjusted EBITDA $ 477 $ 451 $ 26 $ 734 $ 696 $ 38 Consolidated Balance Sheet The following is a summary of our overall financial position: (in millions) June 30, 2026 December 31, 2025 Change Total assets $ 7,521 $ 7,485 $ 36 Total liabilities 6,130 6,429 (299) Total equity 1,341 1,010 331 Significant items affecting the comparability of our Condensed Consolidated Balance Sheets include: •Total assets increased $36 million driven by an increase in restricted cash, accounts receivable, and other current assets, including prepaid insurance and information technology related items. These increases were partially offset by a decrease in income taxes receivable. FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026 35 •Total liabilities decreased $299 million driven primarily by a decrease in the outstanding balance on the Revolver, which is included in long-term debt, and decreases in current deferred revenue due to the recognition of revenue related to the 152nd Kentucky Derby, and a decrease in dividends payable due to the payment of the annual dividend. These decreases were partially offset by an increase in accounts payable, income taxes payable and deferred income taxes. •Total equity increased $331 million driven by net income. Liquidity and Capital Resources The following table is a summary of our liquidity and cash flows: (in millions) Six Months Ended June 30, Change Cash flows from: 2026 2025 Operating activities $ 512 $ 487 $ 25 Investing activities (119) (166) 47 Financing activities (387) (287) (100) Six Months Ended June 30, 2026, Compared to the Six Months Ended June 30, 2025 •Cash flows provided by operating activities increased $25 million driven primarily by an increase in net income and deferred taxes, partially offset by a decrease in income taxes. We anticipate that cash flows from operations and availability of borrowings under our credit facility over the next twelve months will be adequate to fund our business operations and capital expenditures. •Cash flows used in investing activities decreased $47 million primarily driven by decreased capital expenditures in 2026. •Cash flows used in financing activities increased $100 million primarily driven by an increase in paydowns of the Revolver offset by the reduction of share repurchases in 2026. We have announced several project capital investments, including the following: Rockingham Grand Casino in New Hampshire and Victory Run at Churchill Downs Racetrack. We currently expect our project capital to be approximately $180 to $220 million in 2026, although this amount may vary significantly based on the timing of work completed, unanticipated delays, and timing of payments to third parties. Common Stock Repurchase Program On July 22, 2025, the Board of Directors of the Company approved a common stock repurchase program of up to $500 million (the "July 2025 Stock Repurchase Program"). The July 2025 Stock Repurchase Program includes and is not in addition to the $169 million previously remaining under the March 2025 Stock Repurchase Program. Share repurchases may be made at management’s discretion from time to time in the open market (either with or without a 10b5-1 plan) or through privately negotiated transactions. The repurchase program has no time limit and may be suspended or discontinued at any time. We had approximately $430 million of repurchase authority remaining under the July 2025 Stock Repurchase Program at June 30, 2026, based on trade date. On March 12, 2025, the Board of Directors of the Company approved a new common stock repurchase program of up to $500 million (the "March 2025 Stock Repurchase Program"). The March 2025 Stock Repurchase Program included and was not in addition to any unspent amount remaining under the prior authorization. As described above, the March 2025 Stock Repurchase Program has since been replaced by the July 2025 Stock Repurchase Program. FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026 36 Credit Facilities and Indebtedness The following table presents our debt outstanding: (in millions) June 30, 2026 December 31, 2025 Change Revolver $ 329 $ 657 $ (328) Term Loan B-1 due 2028 284 286 (2) Term Loan A due 2029 1,082 1,112 (30) 2027 Senior Notes 600 600 — 2028 Senior Notes 700 700 — 2030 Senior Notes 1,200 1,200 — 2031 Senior Notes 600 600 — Total debt 4,795 5,155 (360) Current maturities of long-term debt and notes payable (663) (63) (600) Total debt, net of current maturities 4,132 5,092 (960) Issuance costs, net of premiums and discounts (22) (25) 3 Net debt $ 4,110 $ 5,067 $ (957) Credit Agreement At June 30, 2026, the Company’s senior secured credit facility (as amended from time to time, the "Credit Agreement") consisted of a $1.2 billion revolving credit facility (the "Revolver"), $284 million senior secured term loan B-1 (the "Term Loan B-1"), $1.1 billion senior secured term loan A (the "Term Loan A"), and $100 million swing line commitment. On July 3, 2024, the Company closed an amendment of the Credit Agreement to (i) extend the maturity date of the Revolver and Term Loan A from 2027 to 2029 and (ii) amend certain other provisions to the Credit Agreement. On February 14, 2025, the Company announced that it closed the seventh amendment of the Credit Agreement. The seventh amendment to the Credit Agreement (i) reduced the interest rate margin applicable to the Term Loan B-1 by 0.25%, from Secured Overnight Financing Rate ("SOFR") plus 200 basis points to SOFR plus 175 basis points, (ii) eliminated the 0.10% credit spread adjustment previously applicable to the Term Loan B-1, and (iii) made certain other amendments to the Credit Agreement, as set forth therein. The Term Loan B-1 requires quarterly payments of 0.25% of the original $300 million balance. The Term Loan B-1 may be subject to additional mandatory prepayment from excess cash flow on an annual basis per the provisions of the Credit Agreement. The Revolver and Term Loan A bear interest at SOFR plus 10 basis points, plus a variable applicable margin which is determined by the Company's net leverage ratio. As of June 30, 2026, that applicable margin was 150 basis points which was based on the pricing grid in the Credit Agreement. The Company had $861 million available borrowing capacity, after consideration of $10 million in outstanding letters of credit, under the Revolver as of June 30, 2026. The Company is required to pay a commitment fee on the unused portion of the Revolver as determined by a pricing grid based on the consolidated total net secured leverage ratio of the Company. For the period ended June 30, 2026, the Company's commitment fee rate was 0.25%. The estimated contractual payments, including interest, under the Credit Agreement for the next twelve months are estimated to be $152 million assuming no change in the weighted average borrowing rate of 5.27%, which was in place as of June 30, 2026. During the six months ended June 30, 2026, we had repayments of principal and interest on the Credit Agreement of $1.1 billion. 2027 Senior Notes As of June 30, 2026, we had $600 million in aggregate principal amount of 5.500% senior unsecured notes that mature on April 1, 2027 (the "2027 Senior Notes"). The 2027 Senior Notes were issued at par in a private offering to qualified institutional buyers, with interest payable in arrears on April 1st and October 1st of each year, commencing on October 1st, 2019. The Company may redeem some or all of the 2027 Senior Notes at redemption prices set forth in the 2027 Indenture. FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2026 37 2028 Senior Notes As of June 30, 2026, we had a total of $700 million in aggregate principal amount of 4.750% senior unsecured notes (the "2028 Senior Notes") maturing on January 15, 2028. The 2028 Senior Notes consist of $500 million notes issued at par and $200 million notes issued at 103.25%. The 2028 Senior Notes were issued in a private offering to qualified institutional buyers, with interest payable in arrears on January 15th and July 15th of each year, commencing on July 15th, 2018. The 3.25% premium is being amortized through interest expense, net over the term of the notes. The Company may redeem some or all of the 2028 Senior Notes at redemption prices set forth in the 2028 Indenture. 2030 Senior Notes As of June 30, 2026, we had $1.2 billion in aggregate principal amount of 5.750% senior unsecured notes that mature on April 1, 2030 (the "2030 Senior Notes"). The 2030 Senior Notes were issued at par in a private offering to qualified institutional buyers, with interest payable in arrears on April 1st and October 1st of each year, commencing on October 1st, 2022. The Company may redeem some or all of the 2030 Senior Notes at redemption prices set forth in the 2030 Indenture. 2031 Senior Notes As of June 30, 2026, we had $600 million in aggregate principal amount of 6.750% senior unsecured notes that mature on May 1, 2031 (the "2031 Senior Notes"). The 2031 Senior Notes were issued at par in a private offering to qualified institutional buyers, with interest payable in arrears on May 1st and November 1st of each year, commencing on November 1st, 2023. The Company may redeem some or all of the 2031 Senior Notes at redemption prices set forth in the 2031 Indenture. Leases The Company leases certain real estate and other property. Most of our building and land leases have terms of 2 to 10 years and include one or more options to renew, with renewal terms that can extend the lease term by 1 to 5 years or more. Certain of our lease agreements include lease payments based on a percentage of net gaming revenue and others include periodic rental payment adjustments for inflation. As of June 30, 2026, minimum rent payable under operating leases was $52 million, with $7 million due in the next twelve months. As of June 30, 2026, minimum rent payable accounted for as financing obligations was $32 million, with $4 million due in the next twelve months. Other Contractual Obligations The Company has other contractual obligations with commitments of $9 million, $2 million of which is due within the next twelve months. The Company is exploring options to fund upcoming senior note maturities through a combination of cash on hand, cash generated from operations, available capacity under its revolving credit facility, and raising funds via debt markets. Our ability to raise debt and the terms under which we would fund the obligations are subject to our ability to access the debt markets and other economic conditions.