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<SEC-DOCUMENT>0000020212-04-000045.txt : 20041118
<SEC-HEADER>0000020212-04-000045.hdr.sgml : 20041118
<ACCEPTANCE-DATETIME>20041117200424
ACCESSION NUMBER:		0000020212-04-000045
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20041117
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Material Impairments
ITEM INFORMATION:		Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20041118
DATE AS OF CHANGE:		20041117

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CHURCHILL DOWNS INC
		CENTRAL INDEX KEY:			0000020212
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-RACING, INCLUDING TRACK OPERATION [7948]
		IRS NUMBER:				610156015
		STATE OF INCORPORATION:			KY
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-01469
		FILM NUMBER:		041153490

	BUSINESS ADDRESS:	
		STREET 1:		700 CENTRAL AVE
		CITY:			LOUISVILLE
		STATE:			KY
		ZIP:			40208
		BUSINESS PHONE:		5026364400

	MAIL ADDRESS:	
		STREET 1:		700 CENTRAL AVENUE
		STREET 2:		700 CENTRAL AVENUE
		CITY:			LOUIVILLE
		STATE:			KY
		ZIP:			40208
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>f8kpradjustedearnings11704.htm
<DESCRIPTION>PRESS RELEASE 11/17/04
<TEXT>
<HTML>
<HEAD>
<TITLE>8-K Press Release dated 11-18-04</TITLE>
</HEAD>
<BODY>
<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>UNITED STATES<BR>SECURITIES AND EXCHANGE COMMISSION<BR>
        WASHINGTON, D.C. 20549<BR> <BR>
        <B>FORM 8-K <BR><BR>
        CURRENT REPORT <BR>
        PURSUANT TO SECTION 13 OR 15(d) OF THE <BR>
        SECURITIES EXCHANGE ACT OF 1934 <BR><BR>
        Date of Report (Date of earliest event reported): November 17, 2004</B> </FONT></P>

<P ALIGN="Center"><IMG SRC="smalllogo.gif" ALIGN="MIDDLE"></P>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Exact name of
registrant as specified in its charter)</FONT></P>

<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 ALIGN=Center WIDTH=100%>
<TR VALIGN=Bottom>
     <TD WIDTH="37%" ALIGN="Center"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Kentucky</U></FONT></TD>
     <TD WIDTH="28%" ALIGN="Center"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>0-1469</U></FONT></TD>
     <TD WIDTH="35%" ALIGN="Center"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>61-0156015</U></FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="Center"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(State or other jurisdiction of</FONT></TD>
     <TD ALIGN="Center"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Commission File Number)</FONT></TD>
     <TD ALIGN="Center"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(IRS Employer Identification No.)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="Center"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>incorporation or organization)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN="Center"><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD></TR>
</TABLE>

<!-- MARKER FORMAT-SHEET="Head Center Underline-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>700 Central Avenue,
Louisville, KY 40208 </U><BR>(Address of principal executive offices)<BR> (Zip Code)<BR><BR> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Center Underline-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>(502) 636-4400 </U><BR>
        (Registrant&#146;s telephone number, including area code)<BR><BR> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Center Underline-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>Not Applicable</U><BR>
        (Former name or former address, if changed since last report) </FONT></P>
<!-- MARKER FORMAT-SHEET="Head Sub 2 Left" FSL="Default" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of
the following provisions (see General Instruction A.2. below):<BR><BR>

[ ]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)<BR><BR>

[ ]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)<BR><BR>

[ ]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<BR><BR>

[ ]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<BR><BR>
</FONT></P>




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               Page 1</FONT></TD>
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<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CHURCHILL DOWNS INCORPORATED<BR><BR>INDEX </FONT></H1>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 2.02. Results of Operations and
Financial Condition.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
copy of the news release issued by Churchill Downs Incorporated (the &#147;Company&#148;)
on November 17, 2004 describing the restatement of certain financial results for the
fiscal years ended December 31, 2003 and December 31, 2002 is attached hereto as Exhibit
99.1. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 2.06. Material Impairments.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
November 17, 2004, in connection with the preparation of the Company&#146;s third quarter
financial statements, the Company determined that a $6.2 million investment in the
Company&#146;s Ellis Park Facility was impaired. The impairment charges were triggered as
a result of Ellis Park&#146;s poor live race meet performance during the third quarter of
2004. Management&#146;s review, based on consideration of current fiscal year operating
results and the forecasted operating results of the facility, indicated that the estimated
future cash flows were insufficient to recover the carrying value of long-lived assets.
Accordingly, the carrying value of these long-lived assets, including grandstands and
building ($3,549,000), furniture and fixture ($85,000), equipment ($217,000), improvements
($512,000) and goodwill ($1,839,000) were adjusted to management&#146;s estimated fair
value, resulting in non-cash impairment charges of $6.2 million. The impairment charges
are included in the Company&#146;s condensed consolidated statements of net earnings
(loss) for the three and nine months ended September 30, 2004. The Company anticipates
that the current carrying value of Ellis Park will be supported by ongoing operations,
however, should the Company&#146;s plans for expected operating results at Ellis Park not
be realized, an additional write down of these assets could occur. For additional
information, reference is made to the Company&#146;s quarterly report on Form 10-Q filed
November 17, 2004. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 4.02.</B> Non-Reliance on Previously
Issued Financial Statements or a Related Audit Report or Completed Interim Review. </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Project" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a)&nbsp;&nbsp;&nbsp;&nbsp;
          In its Form 10-Q for the third quarter and nine months ended September 30, 2004,
          filed November 17, 2004, the Company revised its consolidated financial
          statements to correct an accounting error for purse overpayments. Purse
          overpayments are created when, at the end of a race meeting, the purses paid to
          horsemen exceed the purses generated from pari-mutuel operations during the race
          meeting. In accordance with industry practice, the Company has historically
          recorded these overpayments as receivables, subject to any necessary valuation
          allowances. The contractual arrangements that exist between the horsemen&#146;s
          organizations at the Company&#146;s various racetracks provide that if an
          overpayment exists at the end of the meeting, such overpayment may be recovered
          through reductions of purses otherwise paid in the subsequent race meeting(s).
          With the corrected accounting treatment, any overpayment position will be
          expensed to operations as incurred, and overpayments will be reflected as a
          credit to future purse expenses. Accordingly, the Company will restate its
          financial statements as previously reported in its Annual Report on Form 10-K
          for the years ended December 31, 2003 and 2002. </FONT></P>
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        <TD COLSPAN=3 ALIGN="center"><HR SIZE=5 NOSHADE></TD>
</TR>
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</TABLE>
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<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On
November 16, 2004, the Company&#146;s Audit Committee Chairman and senior management
discussed the matters disclosed in this item with the Company&#146;s independent
registered public accounting firm, PricewaterhouseCoopers, LLP. On November 16, 2004, the
Company decided to restate its financial statements as described above. Investors should
look to the revised financial information regarding the restatement in the Company&#146;s
Form 10-Q for the quarter ended September 30, 2004, filed November 17, 2004, and to the
restated financial statements for the fiscal years ended 2003 and 2004, to be filed by
amendment to the Company&#146;s 10-K for the fiscal year ended December 31, 2003. </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Item 9.01 Financial
Statements and Exhibits.</B> </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Project" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(c) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibits </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;99.1 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Press release dated
November 17, 2004 issued by Churchill Downs Incorporated. </FONT></P>
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        <TD COLSPAN=3 ALIGN="center"><FONT FACE="Times New Roman, Times, Serif" size=2>
               Page 3</FONT></TD>
</TR>
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        <TD COLSPAN=3 ALIGN="center"><HR SIZE=5 NOSHADE></TD>
</TR>
<!-- BLANK LINE--><TR><TD>&nbsp;</TD></TR>
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</TABLE>
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<!-- MARKER FORMAT-SHEET="Head Major Center Bold" FSL="Default" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SIGNATURES </FONT></H1>

<!-- MARKER FORMAT-SHEET="Para Flush" FSL="Default" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized. </FONT></P>

<TABLE WIDTH=100% BORDER="0" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH WIDTH="50%"><FONT SIZE="2"></FONT></TH>
     <TH WIDTH="50%" ALIGN="left"><FONT SIZE="2">CHURCHILL DOWNS INCORPORATED<BR><BR><BR><BR></FONT></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>November 17, 2004</FONT></TD>
     <TD WIDTH="50%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><U>/s/Michael E. Miller</U><BR>
                                                     Michael E. Miller<BR>
                                                     Executive Vice President and<BR>Chief Financial Officer<BR>
                                                     (Principal Financial and Accounting Officer)
                                                     </FONT></TD></TR>
</TABLE>
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</TR>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>3
<FILENAME>ex901pr111704.htm
<DESCRIPTION>PRESS RELEASE ADJUSTED EARNINGS 11-17-04
<TEXT>
<HTML>
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<TITLE>Exhibit 99.1 Press Release dated September 24, 2004</TITLE>
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     <TD WIDTH=54% ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>FOR IMMEDIATE RELEASE</FONT></TD>
     <TD WIDTH=46% ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
                Contact: Mike Ogburn<BR>
                (502) 636-4415 (office)<BR>
                (502) 262-0224 (cellular)<BR>
                <U>mogburn@kyderby.com</U></FONT></TD></TR>
</TABLE>
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>CHURCHILL
DOWNS INCORPORATED FILES 10-Q AND CORRECTS ACCOUNTING <BR>TREATMENT FOR &#145;PURSE
OVERPAYMENTS&#146;</B></FONT></H1>

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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>&nbsp;&nbsp;&nbsp;</I></FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>LOUISVILLE, Ky. (Nov. 17,
2004)</B> &#150; In filing its Form 10-Q for the third quarter and nine months ended Sept.
30, 2004, Churchill Downs Incorporated (Nasdaq: CHDN) (&#147;CDI&#148; or
&#147;Company&#148;) today revised its consolidated financial statements to correct an
accounting error for &#147;purse overpayments.&#148; The revised accounting treatment will
serve to reduce 2002 and 2003 pre-tax earnings by $2.2 million and approximately $1
million, respectively, and is currently estimated to have a minimal impact on 2004
earnings. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purse
overpayments occur when the purses paid to horsemen exceed the purses generated from
pari-mutuel operations during the race meeting. In accordance with industry practice, the
Company has historically recorded purse overpayments as receivables to be recovered
through reductions of purses otherwise paid in subsequent race meetings. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
this correction, any overpayment position will now be expensed to operations as incurred.
The recovery of these overpayments will be reflected as a credit to future purse expenses.
Accordingly, the Company adjusted its accounting practices and revised its Sept. 30, 2004,
consolidated financial statements in today&#146;s filing. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
revised accounting serves to delay the recognition of the recovery of purse overpayments
until the period in which they are actually recovered. Historically, the Company has
successfully recovered any such overpayments as allowed through its contractual agreements
with horsemen&#146;s groups. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Michael
E. Miller, the Company&#146;s chief financial officer, stated, &#147;Other than slightly
delaying our third quarter 10-Q filing, this adjustment will have minimal impact for the
full year of 2004. Additionally, we do not anticipate the change in accounting will have a
material impact going forward.&#148; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Churchill
Downs Incorporated, headquartered in Louisville, Ky., owns and operates world-renowned
horse racing venues throughout the United States. The Company&#146;s seven racetracks in
California, Florida, Illinois, Indiana, Kentucky and Louisiana host 123 graded-stakes
events and many of North America&#146;s most prestigious races, including the Kentucky
Derby and Kentucky Oaks, Hollywood Gold Cup and Arlington Million. CDI racetracks have
hosted nine Breeders&#146; Cup World Thoroughbred Championships &#150; more than any other
North American racing company. CDI also owns off-track betting facilities and has
interests in various television production, telecommunications and racing services
companies that support CDI&#146;s network of simulcasting and racing operations. CDI
trades on the Nasdaq National Market under the symbol CHDN and can be found on the
Internet at <U>www.churchilldownsincorporated.com</U>. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>This
news release contains forward-looking statements made pursuant to the &#147;safe
harbor&#148; provisions of the Private Securities Litigation Reform Act of 1995. The
reader is cautioned that such forward-looking statements involve risks and uncertainties
that could cause our actual operating results and financial condition to differ
materially. Forward-looking statements are typically identified by the use of terms such
as &#147;anticipate,&#148; &#147;believe,&#148; &#147;could,&#148; &#147;estimate,&#148;
&#147;expect,&#148; &#147;intend,&#148; &#147;may,&#148; &#147;might,&#148;
&#147;plan,&#148; &#147;predict,&#148; &#147;project,&#148; &#147;should,&#148;
&#147;will,&#148; and similar words, 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 our expectations include: the effect of global economic conditions; the
effect (including possible increases in the cost of doing business) resulting from future
war and terrorist activities or political uncertainties; the economic environment; the
impact of increasing insurance costs; the impact of interest rate fluctuations; the
financial performance of our racing operations; the effect of any change in the
Company&#146;s accounting policies or practices; the impact of gaming competition
(including lotteries and riverboat, cruise ship and land-based casinos) and other sports
and entertainment options in those markets in which we operate; the impact of live racing
day competition with other Florida and California racetracks within those respective
markets; costs associated with our efforts in support of alternative gaming initiatives;
costs associated with our Customer Relationship Management initiatives; a substantial
change in law or regulations affecting our pari-mutuel and gaming activities; a
substantial change in allocation of live racing days; litigation surrounding the Rosemont,
Illinois, riverboat casino; changes in Illinois law that impact revenues of racing
operations in Illinois; a decrease in riverboat admissions subsidy revenue from our
Indiana operations; the impact of an additional racetrack near our Indiana operations; our
continued ability to effectively compete for the country&#146;s top horses and trainers
necessary to field high-quality horse racing; our continued ability to grow our share of
the interstate simulcast market; our ability to execute our acquisition strategy and to
complete or successfully operate planned expansion projects; our ability to adequately
integrate acquired businesses; market reaction to our expansion projects; any business
disruption associated with our facility renovations; the loss of our totalisator companies
or their inability to keep their technology current; our accountability for environmental
contamination; the loss of key personnel and the volatility of our stock price.</I> </FONT></P>

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