We manage our operations through five operating segments:


•	Racing, which includes Churchill Downs Racetrack ("Churchill Downs"), Arlington International Race Course ("Arlington"), Fair Grounds Race Course ("Fair Grounds") and Calder Race Course ("Calder");


•	TwinSpires, which includes TwinSpires.com, Fair Grounds Account Wagering, Velocity, BetAmerica and Bloodstock Research Information Services;


•	Casino, which includes Oxford Casino ("Oxford"), Riverwalk Casino ("Riverwalk"), Harlow's Casino ("Harlow’s"), Calder Casino, Fair Grounds Slots, Video Services, LLC ("VSI"), 50% equity investment in MVG, 50% equity investment in Ocean Downs and 25% equity investment in SCH, which includes investments in Saratoga Casino Hotel, Saratoga Casino Black Hawk and Ocean Downs;


•	Other Investments, which includes United Tote and other minor investments; and


•	Corporate, which includes miscellaneous and other revenue, compensation expense, professional fees and other general and administrative expense not allocated to our other operating segments.

Big Fish Games is a global producer and distributor of social casino, casual and mid-core free-to-play, and premium paid games for PC, Mac and mobile devices. On January 9, 2018, we closed the Big Fish Transaction, at which time Big Fish Games ceased to be an operating segment. Due to the Big Fish Transaction, the Company has presented Big Fish Games as held for sale and discontinued operations in the accompanying condensed consolidated financial statements and these notes. The Company has not allocated corporate and other certain expenses to Big Fish Games consistent with the discontinued operations presentation in the accompanying condensed consolidated statements of comprehensive income. Accordingly, the prior year amounts were reclassified to conform to this presentation.

Eliminations include the elimination of intersegment transactions. We utilize non-GAAP measures, including EBITDA (earnings before interest, taxes, depreciation and amortization) and adjusted EBITDA. Our chief operating decision maker utilizes adjusted EBITDA to evaluate segment performance, develop strategy and allocate resources. Adjusted EBITDA includes the following adjustments:

Adjusted EBITDA includes our portion of the EBITDA from our equity investments.

Adjusted EBITDA excludes:


•	Transaction expense, net which includes:


•	Acquisition and disposition related charges, including fair value adjustments related to earnouts and deferred payments; and


•	Other transaction expense, including legal, accounting, and other deal-related expense;


•	Stock-based compensation expense;


•	Asset impairments;


•	Gain on Calder land sale;


•	Calder exit costs;


•	Loss on extinguishment of debt; and


•	Other charges, recoveries and expenses

We utilize the adjusted EBITDA metric because we believe the inclusion or exclusion of certain non-recurring items is necessary to provide a more accurate measure of our core operating results and enables 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. For segment reporting, adjusted EBITDA includes intercompany revenue and expense totals that are eliminated in the accompanying condensed consolidated statements of comprehensive income.

The tables below present net revenue from external customers and intercompany revenue from each of our operating segments, adjusted EBITDA by segment and reconciles comprehensive income to adjusted EBITDA:



	Three Months Ended March, 31
(in millions)	2018		2017
Net revenue from external customers:
Racing:
Churchill Downs	$	2.0	$	2.3
Arlington	8.3		8.5
Fair Grounds	12.8		12.5
Calder	0.6		0.6
Total Racing	23.7		23.9
TwinSpires	63.2		52.0
Casino:
Oxford Casino	24.2		20.9
Riverwalk Casino	14.4		11.5
Harlow’s Casino	13.3		13.5
Calder Casino	24.3		21.4
Fair Grounds Slots	10.6		10.2
VSI	11.0		9.7
Saratoga	0.3		0.3
Total Casino	98.1		87.5
Other Investments	4.3		4.1
Net revenue from external customers	$	189.3	$	167.5



	Three Months Ended March, 31
(in millions)	2018			2017
Intercompany net revenue:
Racing:
Churchill Downs	$	0.3		$	0.3
Arlington	1.2			1.0
Fair Grounds	1.0			0.9
Total Racing	2.5			2.2
TwinSpires	0.4			0.3
Other Investments	1.2			1.4
Eliminations	(4.1		)	(3.9		)
Intercompany net revenue	$	—		$	—

Adjusted EBITDA by segment is comprised of the following:



	Three Months Ended March 31, 2018
(in millions)	Racing			TwinSpires			Casino			Other Investments			Corporate
Net revenue	$	26.2		$	63.6		$	98.1		$	5.5		$	—

Taxes & purses	(10.3		)	(3.4		)	(32.4		)	—			—
Marketing & advertising	(0.8		)	(0.8		)	(3.2		)	—			—
Salaries & benefits	(8.6		)	(2.1		)	(13.5		)	(3.2		)	—
Content expense	(3.1		)	(32.2		)	—			—			—
SG&A expense	(4.0		)	(2.8		)	(5.4		)	(0.7		)	(2.4		)
Other operating expense	(8.8		)	(5.8		)	(10.1		)	(1.3		)	(0.2		)
Other income	—			—			10.8			—			0.1
Adjusted EBITDA	$	(9.4	)	$	16.5		$	44.3		$	0.3		$	(2.5	)



	Three Months Ended March 31, 2017
(in millions)	Racing			TwinSpires			Casino			Other Investments			Corporate ^(a)
Net revenue	$	26.1		$	52.3		$	87.5		$	5.5		$	—

Taxes & purses	(10.2		)	(3.0		)	(29.1		)	—			—
Marketing & advertising	(0.7		)	(1.0		)	(3.0		)	—			—
Salaries & benefits	(8.6		)	(2.2		)	(13.1		)	(2.9		)	—
Content expense	(3.2		)	(25.4		)	—			—			—
SG&A expense	(3.8		)	(2.7		)	(5.2		)	(0.8		)	(2.9		)
Other operating expense	(9.3		)	(4.8		)	(11.4		)	(1.3		)	(0.2		)
Other income	—			—			9.6			0.1			—
Adjusted EBITDA	$	(9.7	)	$	13.2		$	35.3		$	0.6		$	(3.1	)

(a) The Corporate segment includes corporate and other certain expenses of $0.7 million for the three months ended March 31, 2017 that have not been allocated to Big Fish Games as a result of the Big Fish Transaction. The Big Fish Games segment is reported as held for sale and discontinued operations in the accompanying condensed consolidated financial statements and these notes.



	Three Months Ended March, 31
(in millions)	2018			2017
Reconciliation of Comprehensive Income to Adjusted EBITDA:

Comprehensive income	$	182.0		$	7.2
Foreign currency translation, net of tax	—			0.1
Net income	182.0			7.3
Income from discontinued operations, net of tax	(167.9		)	(5.1		)
Income from continuing operations, net of tax	14.1			2.2

Additions:
Depreciation and amortization	13.8			14.2
Interest expense	9.6			11.8
Income tax provision	2.6			0.6
EBITDA	40.1			28.8

Adjustments to EBITDA:
Selling, general and administrative:
Stock-based compensation expense	2.8			3.4
Other charges	—			0.2
Pre-opening expense	0.6			—
Other income, expense:
Interest, depreciation and amortization expense related to equity investments	4.3			3.5
Transaction expense, net	1.4			—
Calder exit costs	—			0.4
Total adjustments to EBITDA	9.1			7.5
Adjusted EBITDA	$	49.2		$	36.3

Adjusted EBITDA by segment:
Racing	$	(9.4	)	$	(9.7	)
TwinSpires	16.5			13.2
Casino	44.3			35.3
Other Investments	0.3			0.6
Corporate(a)	(2.5		)	(3.1		)
Adjusted EBITDA	$	49.2		$	36.3

The table below presents information about equity in income of unconsolidated investments included in our reported segments:



	Three Months Ended March, 31
(in millions)	2018		2017
Casino	$	6.5	$	6.1

The table below presents total asset information for each of our operating segments:



(in millions)	March 31, 2018		December 31, 2017
Total assets:
Racing	$	484.8	$	483.0
TwinSpires	215.2		215.9
Casino	678.6		679.6
Other Investments	23.0		15.2
Corporate	199.4		73.2
Big Fish Games	—		892.5
	$	1,601.0	$	2,359.4

The table below presents total capital expenditures for each of our operating segments:



	Three Months Ended March, 31
(in millions)	2018		2017
Capital expenditures:
Racing	$	23.0	$	23.6
TwinSpires	2.3		3.2
Casino	3.4		8.1
Other Investments	4.6		0.4
Corporate	0.7		0.2
Big Fish Games	—		2.0
	$	34.0	$	37.5