Segment Information

12 Months Ended

Dec. 31, 2011

Segment Information [Abstract]

Segment Information

NOTE 19—SEGMENT INFORMATION

The Company operates in the following four segments: (1) Racing Operations, which includes Churchill Downs, Calder, Arlington Park and its eleven OTBs and Fair Grounds and the pari-mutuel activity generated at its eleven OTBs; (2) Online Business, which includes TwinSpires, our ADW business, Youbet.com, LLC, an ADW business acquired on June 2, 2010, FAW, and BRIS as well as the Company's equity investment in HRTV, LLC; (3) Gaming, which includes video poker and gaming operations at Fair Grounds Slots, Calder Casino, Harlow's, a casino and hotel acquired on December 16, 2010 and VSI, an owner and operator of more than 800 video poker machines in Louisiana; and (4) Other Investments, which includes United Tote, a manufacturer and operator of pari-mutuel wagering systems acquired by the Company on June 2, 2010, CDSP and the Company's other minor investments. Eliminations include the elimination of intersegment transactions.

The accounting policies of the segments are the same as those described in the "Summary of Significant Accounting Policies" in Note 1. The Company uses revenues and EBITDA (defined as earnings before interest, taxes, depreciation and amortization) as key performance measures of the results of operations for purposes of evaluating performance internally. Management believes that the use of these measures enables management and investors to evaluate and compare from period to period the Company's operating performance in a meaningful and consistent manner. However, EBITDA should not be considered as an alternative to, or more meaningful than, net earnings (as determined in accordance with accounting principles generally accepted in the United States of America) as a measure of our operating results.

The table below presents information about reported segments for the years ended December 31, 2011, 2010 and 2009 (in thousands):

	Year Ended December 31,
	2011			2010			2009
Net revenues from external customers:
Churchill Downs	$	121,236		$	118,366		$	113,227
Arlington Park		69,694			71,851			86,076
Calder		62,715			71,302			75,226
Fair Grounds		44,625			46,025			50,041
Total Racing Operations		298,270			307,544			324,570
Calder Casino		82,819			65,211			152
Fair Grounds Slots		41,553			40,432			39,030
VSI		35,052			33,971			32,693
Harlow's Casino		53,205			2,659			—
Total Gaming		212,629			142,273			71,875
Online Business		165,416			121,407			71,986
Other Investments		20,213			13,980			1,516
Corporate		326			141			556
Net revenues from external customers	$	696,854		$	585,345		$	470,503
Intercompany net revenues:
Churchill Downs	$	5,088		$	3,850		$	3,137
Arlington Park		3,725			3,009			1,961
Calder		2,307			1,875			1,148
Fair Grounds		1,164			968			869
Total Racing Operations		12,284			9,702			7,115
Online Business		786			676			589
Other Investments		4,182			2,622			1,961
Eliminations		(17,252	)		(13,000	)		(9,665	)
Net revenues	$	—		$	—		$	—
Reconciliation of Segment EBITDA to net earnings:
Racing Operations	$	62,957		$	35,131		$	35,019
Online Business		37,740			17,226			13,949
Gaming		57,008			28,462			18,287
Other Investments		2,370			3,920			2,098
Corporate		(1,365	)		(4,323	)		(3,820	)
Total EBITDA		158,710			80,416			65,533
Depreciation and amortization		(55,170	)		(46,524	)		(30,256	)
Interest (expense) income, net		(8,456	)		(5,994	)		(761	)
Provision for income taxes		(34,289	)		(8,341	)		(16,835	)
Earnings from continuing operations		60,795			19,557			17,681
Discontinued operations, net of income taxes		3,560			(3,204	)		(853	)
Net earnings	$	64,355		$	16,353		$	16,828

The table below presents total asset information about reported segments as of December 31, 2011 and 2010 and capital expenditures for the years ended December 31, 2011, 2010, and 2009 (in thousands):

	As of December 31,
	2011			2010
Total assets:
Racing Operations	$	909,795		$	951,062
Gaming		242,174			254,237
Online Business		183,397			189,962
Other Investments		180,752			191,160
	$	1,516,118		$	1,586,421
Eliminations		(568,096	)		(568,702	)
	$	948,022		$	1,017,719

	Year Ended December 31,
	2011		2010		2009
Capital expenditures, net:
Racing Operations	$	7,484	$	35,295	$	13,432
Gaming		7,490		17,978		63,455
Online Business		2,774		5,995		2,394
Other Investments		4,919		2,684		2,659
	$	22,667	$	61,952	$	81,940

Capital expenditures, net for the year ended December 31, 2009 do not include the non-cash note payable of $24.0 million for the acquisition of land from The Duchossois Group ("TDG"), a related party, which was primarily financed through the issuance of a short-term note payable. See Note 20 for further discussion of the transaction.