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<SEC-DOCUMENT>0000020212-05-000031.txt : 20050809
<SEC-HEADER>0000020212-05-000031.hdr.sgml : 20050809
<ACCEPTANCE-DATETIME>20050809152952
ACCESSION NUMBER:		0000020212-05-000031
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20050803
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20050809
DATE AS OF CHANGE:		20050809

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:		051009581

	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>t8kearnings2q05.htm
<DESCRIPTION>TRANSCRIPT 2005 2Q EARNINGS
<TEXT>
<html>
  <head>
    <title>
      Transcript 2005 2Q Earnings
</title><!-- Licensed to: Churchill Downs-->
<!-- Document Created using EDGARIZER HTML 3.0.0.39895 -->
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  <body bgcolor="#ffffff"><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>UNITED
      STATES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>SECURITIES
      AND EXCHANGE COMMISSION</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>WASHINGTON,
      D.C. 20549</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman">FORM
      8-K</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CURRENT
      REPORT</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>PURSUANT
      TO SECTION 13 OR 15(d) of the</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SECURITIES
      EXCHANGE ACT OF 1934</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-WEIGHT: bold; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Date
      of Report (Date of earliest event reported): August 3,
      2005</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><img src="smalllogo.jpg" alt="Churchill Downs Incorporated Logo"></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Exact
      name of registrant as specified in its charter)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td valign="top" width="29%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Kentucky</u></font></div>
            </td>
            <td valign="top" width="22%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>0-1469</u></font></div>
            </td>
            <td valign="top" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>61-0156015</u></font></div>
            </td>
          </tr>
          <tr>
            <td valign="top" width="29%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(State
                or other jurisdiction of incorporation or organization)</font></div>
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                File Number)</font></div>
            </td>
            <td valign="top" width="26%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(IRS
                Employer</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Identification
                No.)</font></div>
            </td>
          </tr>

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      Central Avenue, Louisville, Kentucky 40208</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Address
      of principal executive offices)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Zip
      Code)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>(502)
      636-4400</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Registrant's
      telephone number, including area code)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><u>Not
      Applicable</u></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(Former
      name or former address, if changed since last report)</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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:</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="justify" valign="top" width="4%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[
                ]</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
            <td align="justify" valign="top" width="73%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Written
                communications pursuant to Rule 425 under the Securities Act (17
                CFR
                230.425)</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="4%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[
                ]</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
            <td align="justify" valign="top" width="73%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Soliciting
                material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
                240.14a-12)</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="4%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[
                ]</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
            <td align="justify" valign="top" width="73%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
                communications pursuant to Rule 14d-2(b) under the Exchange Act (17
                CFR
                240.14d-2(b))</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="4%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">[
                ]</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
            <td align="justify" valign="top" width="73%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Pre-commencement
                communications pursuant to Rule 13e-4(c) under the Exchange Act (17
                CFR
                240.13e-4(c))</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
          </tr>

      </table>
    </div><br>
    <div>
      <hr style="COLOR: #f0da82" align="left" noshade size="3" width="100%">
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CHURCHILL
      DOWNS INCORPORATED</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>INDEX</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="justify" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
                2.02</strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
            <td align="justify" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Results
                of Operations and Financial Condition</strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="10%">&#160;</td>
            <td align="justify" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Attached
                and incorporated herein by reference as Exhibit 99.1 is a copy of
                the
                earnings release conference call transcript, dated August 3, 2005,
                reporting the Registrant's financial results for the second quarter
                of
                2005.</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="10%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Item
                9.01</strong></font></div>
            </td>
            <td align="justify" valign="top" width="67%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Financial
                Statements and Exhibits</strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            </td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="10%">&#160;</td>
            <td align="justify" valign="top" width="67%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">(c)&#160;
              Exhibits</font>&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="10%">&#160;</td>
            <td align="justify" valign="top" width="67%">&#160;</td>
          </tr>
          <tr>
            <td align="justify" valign="top" width="10%">&#160;</td>
            <td align="justify" valign="top" width="67%"><font size="2">Exhibit
              99.1
              Earnings release conference call transcript dated August 3,
              2005.</font></td>
          </tr>

      </table>
    </div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">2</font></div>
    <div>
      <hr style="COLOR: #f0da82" align="left" noshade size="2" width="100%">
    </div><br>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>SIGNATURES</strong></font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">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 hereunto
      duly authorized.</font></div>
    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
    <div>
      <table cellpadding="0" cellspacing="0" width="100%">

          <tr>
            <td align="left" valign="top" width="39%">&#160;</td>
            <td align="left" valign="top" width="37%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CHURCHILL
                DOWNS INCORPORATED</strong></font></div>
            </td>
          </tr>
          <tr>
            <td align="left" valign="top" width="39%">&#160;</td>
            <td align="left" valign="top" width="37%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="39%">&#160;</td>
            <td align="left" valign="top" width="37%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="39%">&#160;</td>
            <td align="left" valign="top" width="37%">&#160;</td>
          </tr>
          <tr>
            <td align="left" valign="top" width="39%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">August
                8, 2005</font></div>
            </td>
            <td align="left" valign="top" width="37%" style="BORDER-BOTTOM: black thin solid">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">/s/
                Michael W. Anderson</font></div>
            </td>
          </tr>
          <tr>
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            <td align="left" valign="top" width="37%">
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Michael
                W. Anderson</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Vice
                President Finance and Treasurer</font></div>
            </td>
          </tr>

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<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>ex991.htm
<DESCRIPTION>CONFERENCE CALL AUGUST 8, 2005
<TEXT>
<html>
  <head>
    <title>
      Conference call August 8, 2005
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    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>CHURCHILL
        DOWNS</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>Moderator:
        Mike Ogburn</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>August
        3, 2005</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman"><strong>8:00
        a.m. CT</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operator:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Good
                  day, and welcome to the Churchill Downs Incorporated conference
                  call.
                  Today&#8217;s call is being recorded. At this time for opening remarks and
                  introduction, I would like to turn the call over to Mr. Mike Ogburn.
                  Please go ahead, sir.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mike
                  Ogburn:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Good
                  morning, and welcome to this Churchill Downs Incorporated conference
                  call
                  to review the company&#8217;s earnings results for the second quarter of 2005
                  The results were released yesterday afternoon in a press release
                  that has
                  been covered by the financial media.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">A
                  copy of this release announcing earnings and any other financial
                  and
                  statistical information about the period to be presented in this
                  conference call - including any information required by Regulation-D
                  - is
                  available at the section of the company&#8217;s Web site entitled Investor
                  Relations located at churchilldownsincorporated.com.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Let
                  me also note a release has been issued advising of the accessibility
                  of
                  this conference call on a listen-only basis over the
                  Internet.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
                  we start, let me express that some statements made in this call
                  will be
                  forward-looking statements as defined in the Private Securities
                  Litigation
                  Reform Act of 1995. Forward-looking statements are statements that
                  include
                  projections, expectations or beliefs about future events or results
                  or
                  otherwise are not statements of historical fact. Actual performance
                  of the
                  company may differ materially from that projected in such
                  statements.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        1</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">&#160;</div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Investors
                  should refer to statements included in reports filed by the company
                  with
                  the Securities and Exchange Commission for a discussion of additional
                  information concerning factors that could cause our actual results
                  of
                  operations to differ materially from the forward looking statements
                  made
                  in this call.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  information being provided today is of this date only, and Churchill
                  Downs
                  Incorporated expressly disclaims any obligation to release publicly
                  any
                  updates or revisions to these forward looking statements to reflect
                  any
                  changes in expectations.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I&#8217;ll
                  now turn the call to Tom Meeker, president and chief executive
                  officer</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tom
                  Meeker:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Good
                  morning, and thanks for joining us today. During today&#8217;s call, as I do
                  routinely, I&#8217;ll discuss in general terms the results from the second
                  quarter and Mike Miller, our CFO, will fill you in on the details
                  following my comments.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%">&#160;</td>
              <td align="left" valign="top" width="65%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;I</font><font size="2">&#8217;ll
                also highlight some of the accomplishments that occurred during
                the second quarter and finally, and I think most important, I&#8217;ll try to
                provide you a template for what we see as we&#8217;re moving forward in terms of
                growth.</font></td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Given
                  the challenges we faced during the second quarter, I was very pleased
                  with
                  the overall performance of the company at the revenue line. I was
                  very
                  pleased with the growth in revenues, which were largely attributable
                  to
                  two factors. One was the Kentucky operation, which performed extremely
                  well during Derby week and set all sorts of records in attendance
                  and
                  handle. Moreover, the putting on-line of new facilities at Churchill
                  Downs
                  racetrack provided additional revenues in the form of PSL (Personal
                  Seat
                  License) revenues and suite sales. And most important - and I was
                  very
                  encouraged by this - with the addition of all of the suites, we
                  expected a
                  decline in Marquis Village sales. Those did not occur and in fact,
                  we were
                  up in Marquis Village sales.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        2</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
        <div>&#160;</div>
      </div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  other factor was, of course, the Fair Grounds, which came into
                  operations
                  in the fourth quarter of last year and moved over into this year.
                  That
                  operation continues to operate very effectively and obviously provided
                  increased revenues during the first six months and marginally in
                  the
                  second quarter.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Likewise
                  I&#8217;m pleased with the EBITDA growth that we experienced from continuing
                  operations. Overall, these increases were dampened by several factors,
                  including a hurricane in Florida that occasioned the movement of
                  a major
                  event down at the Calder operation. We also had continuing record-breaking
                  rains in Florida for a substantial part of the second quarter while
                  Calder
                  was in operation.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Also
                  - as everyone knows and has been reported widely - throughout the
                  industry
                  there were a number of breakouts of Strangles and herpes of the
                  equine
                  type which adversely impacted the field sizes of our operations,
                  particularly in Calder. And most important, following the Derby,
                  we had
                  significant declines in our field sizes at Churchill
                  Downs.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Those
                  impacts in the weather - excepting heat which is now adversely
                  impacting
                  the Kentucky operation and the Chicago operation - those things
                  seem to
                  have gone away and I would expect as we move forward we will see
                  a more
                  routine kind of environment in terms of the overall
                  racing.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
                  Mike will explain in detail, the bottom-line earnings were adversely
                  impacted year over year due to several factors relating to corporate
                  development costs, personnel costs an anomaly in our tax rate and
                  depreciation costs.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        3</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
        <div>&#160;</div>
      </div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
                  the quarter, we aggressively moved ahead on various strategic projects.
                  The most important of which, obviously, is the sale of Hollywood
                  Park,
                  which is underway. We have not closed the transaction. We anticipate
                  closing the transaction in late September, and it is subject to
                  certain
                  conditions of closing, none of which we anticipate any problems
                  with. The
                  sale price is $260 million.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">That
                  project and that sale are important, obviously, for a number of
                  reasons.
                  Obviously, the monetizing of that property provides us significant
                  advantages in terms of our balance sheet.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  more important thing that we gain from the sale or the transaction
                  entered
                  into at Hollywood Park is a re-entry right into that market in
                  the event
                  that alternative gaming should pass in some form - be it some agreement
                  with the Native Americans and their gaming operations or some legislative
                  or statutory change that would allow alternative gaming to occur
                  at
                  racetracks in California.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
                  the event that were to occur, our re-entry right allows us to come
                  back
                  and take control with a majority position in that asset for a period
                  of
                  three years, and then subsequent to that, for an additional period
                  of time
                  we have the right to come back into that project in a minority
                  position.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
                  the quarter, we expended significant time and effort in obtaining
                  the
                  requisite licenses and permits that allow us to operate slots at
                  the Fair
                  Grounds. That process and the execution risks have been significantly
                  eliminated in that we have been granted, excuse me, we will be
                  granted on
                  August 18</font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Arial, sans-serif"><sup>th</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">
                  a
                  conditional use permit.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  process is largely complete and they are going through the second
                  reading
                  and the actual vote on August 18 on the ordinance itself, which
                  will allow
                  us to operate 500 machines and up to 700 machines at the Fair Grounds
                  operation in the event the Harrah&#8217;s operation continues to expand and grow
                  in revenues.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        4</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  decision-making process for us is much longer than we anticipated
                  and much
                  more complicated than we anticipated in respect to obtaining the
                  conditional use permit, but as I said, the road now is clear and
                  we can
                  start construction. We anticipated putting the slot operation online
                  mid-year of next year.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
                  the meantime, we are actively redeploying new machines or deploying
                  new
                  machines, VLTs (Video Lottery Terminals) at our various OTB (Off-Track
                  Betting) operations. And again, the deployment of those new machines
                  has
                  been slower than expected. The State of Louisiana allows us to
                  put those
                  machines on line at a rate of around 28 per week, which is largely
                  less
                  significantly less than we anticipated.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  performance of the new machines is very good, very positive and
                  much
                  better than the machines that we bought when we acquired that
                  asset.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">During
                  the quarter we also continued to build out our CRM (Customer Relationship
                  Management) technology platforms. We have experienced a number
                  of problems
                  of integrating our CRM systems with the various tote platforms
                  that we do
                  business across. And I think that problem highlights the absolute
                  imperative for the industry to improve and continue improving -the
                  tote
                  system to allow both an open architecture for the customer, in
                  terms of
                  customer interface, and on the output side of the tote, to allow
                  us to
                  obtain various data that is important data in terms of overall
                  identifying, valuing our customers and our ability to talk to our
                  customers as we move down the road.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
                  regards to the tote, we continue to work with other racing companies
                  to
                  restructure and redesign the overall industry tote architecture.
                  We have
                  issued an RFP. We received significant interest from incumbent
                  providers,
                  as well as new providers, and it is anticipated that process will
                  come to
                  closure during the fourth quarter. And following that, we anticipate
                  it
                  will probably take in the order of two years, given the contracts
                  that the
                  various racing companies have with existing providers, to fully
                  deploy new
                  tote architecture across the
                  industry.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        5</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Last
                  month we also strengthened our management team with the addition
                  of Bill
                  Carstanjen to the team. Bill comes to us from G.E. (General Electric
                  Company). Prior to that he was with Cravath, and his focus in those
                  two
                  employments was in the area of development and deal-making, particularly
                  as it relates to various new projects that G.E. was involved with
                  in the
                  capital finance area.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  importance of adding Bill and his critical skill sets to the overall
                  management team is pretty obvious and I think he will have a significant
                  impact, together with the rest of our team members, in charting
                  the future
                  growth of the company.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Let
                  me also now turn our attention to legislative matters, and I&#8217;ll give you
                  kind of an overview of our sense of what is going on in the various
                  jurisdictions in which we do business.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">First
                  let&#8217;s talk about Florida. Florida continues to be in a state of turmoil
                  brought about by the passage of statewide referendum that called
                  for the
                  state legislative body to implement legislation by July 1</font><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Arial, sans-serif"><sup>st</sup></font><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">.
                  The referendum, statewide referendum, also authorized or required
                  a
                  passage of a local referendum in Broward and Miami Dade Counties.
                  As you
                  know Broward passed the local referendum. Miami Dade did not. It
                  failed by
                  only two percentage points.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  important thing, though - and the confusion that has been brought
                  about -
                  results from the failure of the state legislature to pass implementing
                  legislation as required under the statewide referendum by July
                  1, which
                  has thrown the whole process into turmoil. They are in court. A
                  court has
                  opined that absent the failure of the state legislature passing
                  and
                  implementing legislation per the demand of the statewide referendum,
                  the
                  operators are free to engage in slot activity or some form of gaming
                  without the state legislative body getting
                  involved.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        6</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I
                  don&#8217;t think that will happen. The sense down there is that there may
                  be a
                  special session as early as the next few months which will be designed
                  and
                  called for the specific purpose of passing the
                  legislation.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">But
                  the real question for us remains what is our potential for getting
                  involved through the Calder operation and alternative gaming in
                  the State
                  of Florida. And I think given the fact that we failed by only two
                  percentage points, we continue to believe that we have an excellent
                  opportunity to pass legislation in Miami Dade and as a consequence
                  we
                  continue to focus on that asset and on alternative gaming legislation
                  -
                  trying to get the correct implementing legislation passed. And,
                  we
                  continue to work in terms of developing relationships in the Miami
                  Dade
                  area with a view towards promoting a local referendum in the early
                  2007
                  time frame.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
                  terms of Illinois and Indiana, they are sort of a mirror image.
                  There
                  obviously is a keen awareness of the plight of racing in those
                  markets,
                  given the competitive forces being brought about by riverboat casinos
                  and
                  freestanding operations in Indiana.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">However,
                  not withstanding the fact there&#8217;s an awareness of the plight of racing in
                  those jurisdictions, there does not seem to be a clear consensus
                  among all
                  of the political decision makers in those jurisdictions. In Illinois,
                  for
                  instance, there is a dispute between the Governor and the Mayor
                  of Chicago
                  as it relates to the placement of new gaming operations in the
                  state and
                  there is an impasse there and as time goes on we will have to eliminate
                  that impasse if there is any
                  potential.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        7</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Indiana
                  still remains a potential, and I think the next session we will
                  see some
                  activity. Certainly there will be an initiative being presented
                  by the
                  racing folks in Indiana. Whether or not that will be successful
                  is a
                  matter of some conjecture.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
                  Kentucky, there are several things happening that provide some
                  degree of
                  optimism without any assurance of passage, but some degree of optimism
                  that certainly did not exist at this time of year in prior years
                  where
                  we&#8217;ll be looking forward to a new legislative session.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">An
                  organization called KEEP (Kentucky Equine Education Project), which
                  is a
                  grass roots industry organization, has done a particularly good
                  job in
                  providing grass roots awareness of the importance of the overall
                  equine
                  industry of the state of Kentucky.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
                  have garnered, additionally, large support from a number of organizations
                  both in terms of chambers of commerce, educational groups and business
                  groups throughout the state that shall provide good bedrock for
                  pursuing
                  alternative gaming legislation in the 2006 time frame. That is
                  going to be
                  critical and I think our efforts have been elevated significantly
                  as we
                  look forward to the 2006 session.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I
                  want to make a few comments also about the overall state of the
                  racing
                  industry. First there has been much said and written about the
                  problems
                  facing racing. Clearly, there are a number of endemic problems
                  ranging
                  from the short field issue, which I don&#8217;t think is just anecdotal. I think
                  there is an endemic problem with short fields resulting from a
                  myriad of
                  changes and dynamics in the industry, but that&#8217;s something that clearly
                  the industry must address as we move down the road.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  offshore competition industry continues to be out there, and that
                  is an
                  issue involving an economic model that is not the right model for
                  racing
                  and it needs to be changed. We have spoken about the tote technology,
                  and
                  there also exists an issue in terms of uniform medication as well
                  as
                  general racing rules throughout the
                  industry.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        8</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  solution to these problems, I believe, we believe, will provide
                  not only
                  the industry with new growth potential but in particular Churchill
                  Downs -
                  given its position in the industry - can expect new growth channels
                  if and
                  when these problems are solved.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Now
                  I said &#8220;if.&#8221; I believe that the industry today is making headway in
                  solving many of these problems. Internationally, we&#8217;re working on various
                  issues. Obviously, there is the tote issue - we have taken a lead
                  role in
                  that. Short field issues - we&#8217;re doing some things there. A good example
                  is what we&#8217;ve done at Ellis Park in terms of changing our racing program
                  where we&#8217;ve been able to anecdotally over the first three weeks of that
                  meet increase field sizes down there.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">So
                  there are fixes to each of these problems and I am very confident
                  that the
                  industry, with Churchill Downs involved, will find solutions to
                  these
                  problems.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  overall issue of alternative gaming I believe now has become an
                  imperative
                  for the industry. It has become an imperative for several reasons
                  including asset utilization, competitive reasons and internally
                  it&#8217;s an
                  important ingredient to the overall ability of a racetrack or racing
                  company to promote quality field sizes in terms of their core operations
                  and the area of simulcasting.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">And
                  - as reflected in our decision in California where we have serious
                  concerns about the long term health of racing in California given
                  the
                  significant competitive challenges they face with the proliferation
                  of
                  Native American Gaming - we are going to continue looking at markets
                  in
                  which we do business. In those markets where there is not a good
                  potential
                  for alternative gaming legislation being passed, we are going to
                  consider
                  whether or not we should remain in those
                  markets.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        9</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">New
                  York is another important part of the overall racing fabric of
                  the United
                  States. Its importance just from a standpoint of a freestanding
                  operation
                  is clearly acknowledged. But it is also important to the overall
                  health of
                  the industry and as such, we are actively involved in looking at
                  what is
                  the right relationship between the state and a potential franchisee
                  in the
                  state of New York.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Obviously
                  given the size of the market, and the assets there are in place
                  - namely
                  Saratoga, Aqueduct and Belmont - in the event that a successful
                  bidder
                  does acquire those assets under some new relationship between the
                  state
                  and the franchisee, there is significant growth opportunity for
                  the
                  successful bidder.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I&#8217;m
                  confidant that CDI will become actively involved in the bidding
                  process
                  and we continue to focus our time and effort on working at finding
                  the
                  right solution for New York.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Now
                  let me talk a little bit about growth. First of all, I&#8217;ll give you a
                  general comment. I think Churchill Downs is as well positioned
                  today as it
                  has ever been to execute on various growth opportunities and to
                  pursue
                  various growth channels available to it.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">First
                  let&#8217;s look at core operations. We do see some growth, primarily in
                  the
                  non-pari-mutuel area, but some growth also in the pari-mutuel area
                  in such
                  operations as Kentucky and obviously the Kentucky Derby. We have
                  demonstrated that we have been able to grow significantly on
                  non-pari-mutuel revenues in the state of Kentucky at the Kentucky
                  operation. And as we move down the road, complemented by commitments
                  and
                  investments we&#8217;ve made in CRM, I think Kentucky enjoys a very bright
                  future.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Louisiana,
                  albeit a small operation, has significant growth opportunity in
                  a number
                  of areas. First of all, its overall racing I think has good growth
                  potential. We have demonstrated that. The first race meet under
                  the
                  Churchill Downs banner was very successful. The deployment of new
                  VLTs at
                  the OTB locations and a re-look and a redesign of our OTB operations
                  will
                  afford us new growth opportunities down
                  there.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        10</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">And
                  then finally, the addition of 500 to 700 slots provides an opportunity
                  for
                  increased growth and revenues.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Arlington
                  remains over the long term a significant value driver for the company.
                  It
                  is a huge facility, number one; and number two, it is one of the
                  best
                  racing facilities in North America. It is located in a large market
                  and as
                  demonstrated by attendance increases that we&#8217;ve experienced up there, in
                  the long term, Arlington represents at the core operation level
                  an
                  opportunity for the company.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">And
                  then finally without going into all of the details, we have concentrated
                  our efforts on better asset utilization at all of our facilities,
                  particularly at Arlington and at Churchill Downs, where we have
                  seen
                  off-season events occurring more frequently than in the past, including
                  better utilization on an ongoing basis of the new facilities that
                  we have
                  here at Churchill Downs. And as time goes on, we see those facilities
                  being a marginal growth driver as we move down the
                  road.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Simulcasting
                  is another growth channel for the company on several fronts, such
                  as
                  account wagering. We need to solve and rationalize the account
                  wagering
                  platforms in the United States. First and foremost, we believe
                  and will
                  continue to pursue ventures that will lead to a common account
                  wagering or
                  account management system for the industry that is more customer
                  friendly,
                  and allows portability of accounts across various platforms. We
                  believe
                  that there is growth potential just in that exercise. Moreover,
                  I think we
                  need as an industry to pursue opening new markets in the United
                  States
                  that will allow for expanded account wagering.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  offshore potential is great. There has been much speculation about
                  the
                  numbers that exist offshore in terms of raw handle, but they are
                  significant. And the offshore economic model that exists today
                  is
                  something that - if you held everything in check and just jiggered
                  the
                  economic model - would provide growth opportunities for those racing
                  operations that allow for the wagering through offshore
                  entities.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        11</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div>
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        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">And
                  I think that is a potential we are exploring and how that is to
                  occur is a
                  matter of some conjecture but I think that will be there. Point-to-point
                  simulcasting, hard asset to hard asset, is essentially a market
                  share
                  strategy and that&#8217;s where Churchill Downs has a significant advantage with
                  its CRM platforms behind it as well as the quality of its product.
                  We
                  believe that we can continue to capture additional market share
                  as we move
                  down the road.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">And
                  finally, there is international wagering. As we mentioned before,
                  the
                  international marketplace is a huge target for U.S. racing. And
                  as time
                  goes on, I think U.S. racing, through various mechanisms and delivery
                  platforms, will be able to enter that market. But I underscore
                  what I&#8217;ve
                  underscored before: and that is, it is going to be slow in developing.
                  It
                  is a matter of scale and it is a matter of changing various laws
                  and
                  regulations tax treaties and a myriad of other things. But in the
                  end, the
                  deployment of our signals - U.S. signals into the international
                  marketplace - is an extremely large growth opportunity for all
                  of
                  racing.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Alternative
                  gaming casino operations obviously is a growth channel that we
                  have been
                  focused on for several years and will continue to be focused on.
                  We are
                  perfectly positioned in large markets - Illinois, Florida, Kentucky
                  and
                  now, even with the sale of Hollywood Park and our reentry right,
                  we
                  continue to be positioned in the state of California. And over
                  time, just
                  one or two of these changes - passage of legislation in these markets
                  -
                  will have a significant impact on our company as well as other
                  companies
                  who do business in those jurisdictions.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
                  will continue to pursue various acquisitions and joint ventures
                  within the
                  industry and adjacent industries as we move down the road. And
                  the
                  Hollywood Park transaction obviously provides us new opportunities
                  in
                  terms of a clean balance sheet to execute on those strategies.
                  And as time
                  goes, on I believe you will see us involved in new activities with
                  new
                  partners down the road.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        12</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Finally,
                  one of the clear advantages our company has - and to some extent
                  is
                  reflected in what we&#8217;ve done with PSL sales, suite sales and various
                  sponsorship arrangements -our brand is a significant value to the
                  overall
                  company. And as we move down the road, we will continue to focus
                  on brand
                  extension both within the industry as well as outside the industry
                  in
                  adjacent businesses and we see that as a distinguishing characteristic
                  of
                  our company number one, and again as a significant growth channel
                  as we
                  move down the road.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">So
                  I hope those general comments have been helpful to you. At this
                  point of
                  the call, we are going to refocus on the activities during the
                  second
                  quarter and in that regard I&#8217;ll turn it over to Mike Miller, our
                  CFO.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mike
                  Miller:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Thank
                  you Tom, and good morning everyone. My comments on our results
                  of
                  operations will be directed primarily to the second quarter of
&#8217;05 versus
                  &#8217;04 and then I have some remarks to make about our balance sheet
                  at June
                  30 as compared with December 31 of &#8217;04.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I
                  then intend to provide some color about our ongoing expectations
                  focusing
                  on business trends, the Fair Grounds operation and impending sale
                  of
                  Hollywood Park.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">After
                  that then Tom and I will respond to any questions you may
                  have.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Now
                  as you probably have learned already by looking at the release,
                  our
                  P&amp;L is somewhat hard to follow given the new separation between
                  continuing and discontinued operations, although I think that it&#8217;s a very
                  fair way to look at our company now. But if my comments are not
                  completely
                  clear to you, please ask me to clarify during the Q&amp;A
                  session.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        13</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
        <div>&#160;</div>
      </div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">In
                  preparing our quarterly results from year to year, there are few
                  key
                  components that account for most of the difference - general business
                  conditions, interest expense, depreciation and tax rates. I will
                  speak to
                  each of these, as they are not necessarily apparent from examining
                  the
                  face of the statements.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I&#8217;m
                  also pleased to note now that all of the operating results of Hollywood
                  Park, including that portion of our CDSN (Churchill Downs Simulcast
                  Network) operation related to the Hollywood Park signal net of
                  taxes, are
                  included in one line on the face of the statement labeled as discontinued
                  operations. And they&#8217;ll be reported in this fashion from this point
                  forward.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">First,
                  our revenues from continuing operations increased by slightly more
                  than
                  $23 million year over year primarily resulting from the addition
                  of the
                  Fair Grounds as well as the impact of the total roll out of the
                  Master
                  Plan at Churchill and significant increases in wagering for Oaks
                  and
                  Derby.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I
                  am pleased to say now that the Master Plan has been completed.
                  It is going
                  to be coming in on budget with respect to the $121 million of capital.
                  And
                  I&#8217;m also pleased to say that the EBITDA - the incremental EBITDA
                  that we
                  expected years ago when we started this project - we will meet
                  or exceed
                  in all categories of the Master Plan.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
                  overall racing calendar produced five more days in &#8217;05, but the mix was
                  not favorable because we lost four Thoroughbred days at Churchill
                  that
                  were replaced by nine Standardbred days of racing, and the Thoroughbred
                  signal is more profitable than the standard bred
                  signal.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Our
                  EBITDA operating margins for the second quarter of &#8217;05 for continuing
                  operations decreased approximately 1.5 percentage points to 28.6
                  percent
                  for the quarter due to the addition of nearly $15 million of revenue
                  at
                  the Fair Grounds that produced very little EBITDA for the quarter.
                  And
                  I&#8217;ll speak about the Fair Grounds just a bit
                  later.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        14</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  primary difference between EBITDA and operating income is depreciation.
                  Our depreciation expense is approximately $2.1 million higher in
&#8217;05
                  primarily as the result of the now complete Master Plan project
                  as well as
                  the addition of the Fair Grounds assets. Our run rate for depreciation
                  for
                  the balance of the year should approximate what you see for the
                  second
                  quarter.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
                  the six months and to a lesser degree the second quarter, there&#8217;s a very
                  significant increase in the SG&amp;A line, which is due to several
                  factors: the referendum costs in Florida, which were approximately
                  $3.1
                  million; the first time inclusion of the Fair Grounds this year;
                  the
                  development costs in California; as well as higher corporate expenses
                  related to increased personnel costs, compliance with Sarbanes-Oxley
                  and
                  our CRM initiatives.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">These
                  increases were partially offset by a million dollars spent in lobbying
                  in
                  2004 for the California ballot initiative, which obviously did
                  not repeat
                  itself in 2005.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Below
                  the operating income line if you have reviewed our operating expenses
                  in
                  the past, you will notice the apparent significant decrease in
                  interest
                  expense. For both &#8216;05 and &#8217;04 as required by GAAP we have reported as part
                  of the discontinued operations line approximately $3.3 million
                  and
                  $903,000, respectively, of interest expense included in discontinued
                  operations.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  GAAP rationale for this treatment is that the way our current debt
                  agreements are configured, any proceeds from the sale of asset
                  of this
                  magnitude must be applied to outstanding debt balances. Obviously,
                  if we
                  decide to redeploy this capital in a manner other than reducing
                  debt, it
                  would require amendment of our debt agreements.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  increase in the overall interest expense from $970,000 to $3.3
                  million is
                  directly related to our outstanding debt balances, which again
                  are tied to
                  the Fair Grounds acquisition in &#8217;04 and the continued build out of that
                  property as well as the Master
                  Plan.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        15</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
        <div>&#160;</div>
      </div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Finally,
                  in explaining fluctuations between the two years, there are two
                  lines to
                  be discussed. First, included in the earnings from discontinued
                  operations
                  is a charge of $919,000 representing costs incurred in connection
                  with the
                  sale of Hollywood Park. Second, there is a considerable fluctuation
                  in the
                  effective tax rates from year to year of almost a full six percentage
                  points between &#8217;04 and &#8217;05, which is a second quarter and a first half
                  anomaly resulting from a significant amount of nondeductible legislative
                  costs incurred year to date in 2005 compared to last
                  year.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  full 47.2 percent rate is not apparent from the face of the statements
                  as
                  taxes are netted against operations and the discontinued line.
                  So taxes
                  are really manifested in two places now in the P&amp;L.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
                  the full year, we expect our tax rate to be approximately 40 percent,
                  so
                  we do have an anomaly again for not only the quarter but for the
                  first
                  half.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">All
                  of this resulted in EPS of continued operations of $1.69 compared
                  to $1.70
                  for 2004, which we think is reflective of our current business
                  trends.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">That&#8217;s
                  really it for the P&amp;L - a lot of moving parts, with results that
                  indicate a slight softness in business trends but better than the
                  industry
                  as a whole.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  impact of our investment activity - manifested in the increase
                  in
                  interest, depreciation and the anomaly of the income tax rate -
                  accounts
                  for approximately 38 cents of earnings when comparing the quarters
                  year to
                  year at the net earnings line.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">My
                  final comment relates to the disparity that exist when you compare
                  earnings from &#8217;04 to &#8217;05 at the two levels, a one cent drop on the
                  continuing operations line versus a 26 cent decline for net income.
                  This
                  difference really represents a validation of a strategic decision
                  we made
                  to sell Hollywood Park and underscores the impact that this redeployment
                  of capital may have.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        16</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
        <div>&#160;</div>
      </div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">My
                  final comment relates to the disparity that exist when you compare
                  earnings from &#8217;04 to &#8217;05 at the two levels, a one cent drop on the
                  continuing operations line versus a 26 cent decline for net income.
                  This
                  difference really represents a validation of a strategic decision
                  we made
                  to sell Hollywood Park and underscores the impact that this redeployment
                  of capital may have.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Turning
                  now to the balance sheet, there are a couple of things to highlight.
                  The
                  increase in total assets of 33.3 million is comprised of 23.9 million
                  in
                  net increases to plant and equipment and assets held for sale of
                  22.4
                  million, partially offset by decreases in cash and cash equivalents
                  of
                  11.9 million.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  assets held for sale increased primarily due to an increase of
                  cash, which
                  is a function of the timing of Hollywood&#8217;s live race meet. Total
                  liabilities increased by 25.9 million due to the time of settlement
                  of
                  various payables and accrued expenses, offset partially by the
                  first
                  quarter payment of dividends and the recognition of deferred revenues
                  related to Churchill Downs racetrack during the second
                  quarter.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Additionally,
                  the liabilities held for sale increased also as a result of the
                  timing of
                  Hollywood&#8217;s live race meet, which generates additional payables and
                  accrued expenses.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Let
                  me now turn your attention to a look ahead for the balance of the
                  year. We
                  talked about softness in the pari-mutuel business, which we believe
                  to be
                  primarily due to a decrease in field sizes - for all the reasons
                  that Tom
                  spoke of - which result in a less desirable wagering product. So,
                  we will
                  continue to fight that reality for the balance of the
                  year.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">That
                  having been said, we have continued to fare slightly better than
                  the
                  overall industry and our current business trends would indicate
                  that after
                  giving effect to the departure of Hollywood Park at the end of
                  the third
                  quarter and the Hollywood Park signal from CDSN, our operating
                  units
                  should perform at or near 2004 levels for the balance of the
                  year.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        17</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
        <div>&#160;</div>
      </div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">For
                  the Fair Grounds, we have previously communicated that we expect
                  to
                  produce a pre-tax profit in 2005 in spite of the historic losses
                  incurred
                  there in recent years. At this time, we now expect to incur a small
                  pre-tax loss, as we have been unable to introduce the new video
                  poker
                  machines or VLTs at the pace that we had formerly hoped. We are
                  very
                  pleased with the performance of the machines that have been deployed
                  and
                  are producing a significantly higher net win than the old machines.
                  Along
                  with the slots anticipated in the latter half of 2006, we anticipate
                  solid
                  gains in both cash flow and pre-tax earnings from this unit next
                  year.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  investment in people and systems in our corporate unit are now
                  virtually
                  complete and we are prepared to maximize the profitability of our
                  operating units and fully exploit our development
                  opportunities.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
                  mentioned in the release, it is too early to state what the financial
                  impact of the Hollywood Park transaction will be, but as of now,
                  it
                  appears that at worse we would be able to substantially pay down
                  our
                  existing debt, which would have the impact of avoided interest
                  expense in
                  the future.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
                  are exploring all avenues to determine the optimum use of this
                  capital and
                  should be able to provide more definitive information in the upcoming
                  months.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">As
                  we have done in the past and will continue to do, I want to update
                  you on
                  our capital spending. We stated at the last call that we expect
                  the year
                  to be in the range of $49 to $55 million and I&#8217;m just affirming that we
                  still expect to end up in that range. The only thing that might
                  change
                  that would be the rate of spend in Louisiana, as we now plan to
                  build out
                  that operation.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">That
                  concludes my remarks, and I will now turn it back over to the operator
                  for
                  your questions.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        18</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
        <div>&#160;</div>
      </div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operator:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
                  this time if you would like to ask a question or make a comment
                  please
                  press &#8220;star&#8221; and the number &#8220;one&#8221; on your touch-tone phone. If you no
                  longer wish to ask your question please press &#8220;star nine.&#8221; If you enter
                  the digits incorrectly please allow five seconds before you
                  reenter.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
                  this time, sir, you have two questions in queue. The first question
                  is
                  from Tim Rice of Rice Voelker. Your line is open</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tim
                  Rice:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Good
                  morning. Tom, I&#8217;ve got two questions. The first one relates to the
                  upcoming approval of interstate account wagering in Nevada. Could
                  you
                  comment on the potential impact of that and whether there&#8217;s any chance of
                  negotiating more favorable terms with those Nevada sports
                  books?</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tom
                  Meeker:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I
                  wish I could tell you something positive. Over the course of the
                  years,
                  all of these non-racetrack operators have been very reticent about
                  changing the economy model. Nevada has been the strongest because
                  they
                  have a joint purchasing arrangement down there where everything
                  goes
                  through a centralized group</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I
                  wouldn&#8217;t expect too much of improvement out of that quite honestly, to
                  be
                  very candid.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tim
                  Rice:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Okay,
                  the second question relates to Calder. I know this may sound like
                  a little
                  bit of a reach, but given the value of the property, is there any
                  possibility that you would consider the sale of the real estate
                  there and
                  consider possibly Calder a Gulfstream operation?</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tom
                  Meeker:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
                  are looking at Florida from a number of angles. The primary focus
                  right
                  now, in the prism that we&#8217;re looking through, is the alternative gaming
                  play. I think given the fact that we lost by such a narrow margin
                  there we
                  continue to believe that Calder represents a significant asset.
                  Huizinga
                  is looking to develop properties there right next door at Pro Player
                  and
                  with all of the access that it has to the interstate, Florida turnpike,
                  et
                  cetera, it is a significant opportunity. And I think before we
                  would
                  consider anything else we would have to be assured that our potential
                  for
                  executing on our alternative gaming strategy was not
                  real.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        19</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">With
                  all of the turmoil going on down there with the events going on
                  in
                  Tallahassee, potentially with respect to the enabling legislation
                  - not
                  withstanding the fact we lost the election - it does afford us
                  an
                  opportunity to really kind of fully evaluate that
                  asset.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
                  think a lot of the execution risks will be eliminated at or around
                  the
                  time of 2007 in that we will know the tax rate, we will know what
                  the
                  rules are and we will be able to, in a much better way, make a
                  determination of whether or not we&#8217;ll actively pursue and to what level we
                  will pursue in terms of dollars for the referendum in Miami
                  Dade.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">But
                  again, the prism we&#8217;re looking through right now says that we have to stay
                  in place. It is a terrific operation. It has been and will continue
                  to be
                  in terms of pure racing operation. It operates well. It is probably
                  one of
                  our more efficient operations. So, on the short term, we are going
                  to
                  continue to focus on racing and again, keep our eye on alternative
                  gaming.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tim
                  Rice:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Thanks
                  very much.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tom
                  Meeker:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Yes,
                  sir.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operator:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  next question comes from Ryan Worst of CL King. Your line is open,
                  sir.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan
                  Worst:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Good
                  morning.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mike
                  Miller, </font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tom
                  Meeker</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Good
                  morning, Ryan.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        20</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
        <div>&#160;</div>
      </div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan
                  Worst:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Just
                  a couple of questions. Could you go over what the lobbying expense
                  was in
                  the second quarter versus last year?</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mike
                  Miller:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Well,
                  &#8220;for the first half&#8221; I think maybe is a better way to look at the lobbying
                  expense Ryan, because the vote in Florida, as you recall, was in
                  March.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan
                  Worst:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Right.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mike
                  Miller:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">And
                  it was about $3.1 million in Florida and last year it was about
                  a million
                  in California. So that is kind of the $2.1 million increase. There
                  was not
                  any significant expense really in the second quarter of this year.
                  Now we
                  have got our ongoing efforts, which repeat pretty much the same
                  from year
                  to year, but in terms of a one-time element most of that was in
                  the first
                  quarter.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan
                  Worst:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Okay,
                  I just want to make sure. I thought I heard that wrong.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tom,
                  in the press release you stated that business levels for the balance
                  of
                  the year should be similar to the second half of last year. Are
                  you
                  talking revenue side because again, last year you obviously spent
                  a lot of
                  money on legislative issues in Florida in the second half. So are
                  you
                  talking about operating profit-wise or revenue-wise?</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mike
                  Miller:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan,
                  this is Mike. Let me respond to that. When we say that they&#8217;re going to be
                  approximately the same - I guess it wasn&#8217;t obvious but it was intended to
                  be obvious -that is excluding one-time type items. We&#8217;re talking about
                  general business conditions and general operating results. Primarily
                  the
                  EBITDA line is where that is referenced.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan
                  Worst:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">So,
                  excluding those costs in Florida&#8230;</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        21</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
        <div>&#160;</div>
      </div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mike
                  Miller:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Of
                  course. Now, you know, should there be some opportunity, which
                  we don&#8217;t
                  see today, as we have said before, we&#8217;ll continue to seed that, if there
                  is a legislative opportunity, and spend.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tom
                  Meeker:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">But
                  something could happen in New York that would require us to elevate
                  some
                  expense.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mike
                  Miller:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">But
                  the base for what you see there is I&#8217;m just talking about general business
                  operations and nothing to do with development opportunities or
                  legislative
                  expense.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan
                  Worst:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Do
                  you have any racing days at the Fair Grounds in the second
                  quarter?</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mike
                  Miller:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">No,
                  they ended their meet in March.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan
                  Worst:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Okay,
                  and then could you just go over - I kind of missed what you said
                  about all
                  the things that cost you about 38 cents relative to last
                  year.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mike
                  Miller:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Well,
                  it&#8217;s the increase in interest, as we had about a $2.3 million increase
                  in
                  interest expense; we had around a $2.1 million increase in depreciation;
                  and then we had that anomaly with respect to effective tax
                  rates.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan
                  Worst:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Okay.
                  And could you also go over again how that interest rate shows up
                  on the
                  income statement?</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mike
                  Miller:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
                  rate - the interest expense?</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan
                  Worst:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Interest
                  expense, I&#8217;m sorry.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mike
                  Miller:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">It&#8217;s
                  buried in the discontinued operations line for both
                  years.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        22</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
        <div>&#160;</div>
      </div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan
                  Worst:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">So
                  you&#8217;ve got like to like.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mike
                  Miller:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Yes
                  it&#8217;s comparable there - in discontinued operations, I want to get
                  back to
                  my notes here</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan
                  Worst:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">What&#8217;s
                  the benefit to this year&#8217;s operations at Hollywood
                  Park?</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mike
                  Miller:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">No
                  it&#8217;s not a benefit. The interest expense that we actually occurred
                  on our
                  outstanding debt is now reflected as part of discontinued operations.
                  We
                  had - I&#8217;m searching here for my notes, is it 3.3
                  million?</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mike
                  Miller:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Yes.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mike
                  Miller:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Three
                  point three million of interest this year and about $970,000 last
                  year of
                  real interest expense. It is just a question of where it is now
                  reflected
                  on the face of the statement and so you don&#8217;t see it. That is why I wanted
                  to point it out.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
                  had incurred and will continued to incur interest expense at least
                  through
                  the closing of the Hollywood Park sale and then it just depends
                  upon how
                  we deploy that capital as to what our interest expense beyond that
                  would
                  be.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan
                  Worst:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">So
                  your interest expense above the discontinued operations line assumes
                  that
                  you used the proceeds to pay down debt?</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mike
                  Miller:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Yes,
                  that&#8217;s an assumption that GAAP forces upon you and what it is based
                  upon.
                  They look at your debt agreements to see how those proceeds must
                  be used.
                  So barring a change in those agreements, which indeed we would
                  do if we
                  decide to re-deploy that capital in another direction, it would
                  pay down
                  debt and that&#8217;s why it&#8217;s reflected in discontinued
                  operations.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        23</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
        <div>&#160;</div>
      </div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan
                  Worst:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Okay.
                  And then Tom, just one last question - it was well publicized recently
                  that a competitor of yours, Magna, is looking for a strategic partner
                  to
                  develop some of their gaming operations. Churchill Downs, with
                  its healthy
                  balance sheet, you know, seems to me it would be a logical choice
                  as you
                  guys could work somehow to keep the proceeds of that untapped gaming
                  potential within the industry. Has there been any thought to pursuing
                  that
                  on Churchill Downs&#8217; behalf?</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tom
                  Meeker:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I
                  will answer yes, but beyond that I can&#8217;t make any
                  comment.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan
                  Worst:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Okay,
                  thank you.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tom
                  Meeker:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Thank
                  you, Ryan.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operator:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
                  this time there are no more questions in queue. Once again if you
                  would
                  like to ask a question or make a comment please press &#8220;star one&#8221; and the
                  number on your touch-tone phone.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
                  this time you have one last question in queue, Ryan Worst of CL
                  King.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan
                  Worst:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Hi
                  guys, just one more follow up. Now you talk about kind of the redesign
                  of
                  the tote system. Is the goal there more revenue enhancement or
                  cost
                  savings or both?</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tom
                  Meeker:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I
                  think depending on how much volume we put across it could result
                  in some
                  marginal declines in costs. But I think that is a foolish way of
                  looking
                  at the tote. It is a revenue enhancement. For instance, right now
                  as you
                  see with respect to our CRM, the integration of our CRM technologies
                  with
                  the tote system - where you&#8217;re trying to capture data about what and how
                  people bet and that sort of thing - is a very difficult job for
                  us. We
                  have to develop interfaces and all of this, that and the other
                  thing.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        24</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">We
                  need an architecture that is customer friendly on the customer
                  interface
                  so we can plug in virtually any type of customer interface from
                  a PDA to a
                  freestanding self-serve machine, to an attendant machine, to IVR.
                  All of
                  those technologies are sitting out there and we constantly find
                  ourselves
                  in a position of having to develop intermediate technologies to
                  allow us
                  to hook up to the tote.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">So
                  there is a revenue enhancement component to this as we are able
                  to deploy
                  on the front end new technologies and on the back end take out
                  valuable
                  information about our customers.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">But
                  the override is this whole question of integrity. And as we saw
                  what
                  occurred in Chicago at the Breeder&#8217;s Cup several years ago and with the
                  late odds changes that we continue to experience across the industry,
                  we
                  have to concentrate on the customer and make sure that the customer
                  firmly
                  believes -as indeed is the case -firmly believes in his or her
                  mind that
                  the system is secure. And today we don&#8217;t have that firm belief in the
                  minds of our customers.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">And
                  so it&#8217;s a number of things. There are some cost savings potentially but
                  I
                  think to go with that view and that view alone is foolhardy. There
                  is
                  revenue potential, but the most important thing is the customer
                  centric
                  focus for tote.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan
                  Worst:</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Okay.
                  Is it fair to say that maybe the allocation, the costs will switch
                  around
                  from less on the back end and more in the customer interface
                  direction?</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tom
                  Meeker</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">I&#8217;m
                  not sure I understand your question.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan
                  Worst</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Maybe
                  the outcome of this will be spending less on the kind of common
                  back end
                  of the tote and more on</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        25</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
        <div>&#160;</div>
      </div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tom
                  Meeker</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">No,
                  no. Let me just give you just a primer. If you look at it with
                  three
                  different functions lined across the top the customer interface,
                  that is
                  the machine, the technology that interfaces with the customer,
                  then you
                  have a communication link, which is part of the RFP and then you
                  have the
                  transactional part of the tote, which is the second box - the block
                  box we
                  are working on and focused on. If you had a black box with an open
                  architecture so that the content provider racetracks can hook up
                  to the
                  tote and to an open architecture. We don&#8217;t have that
                  today.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  third box is the output side and that is the output of data - be
                  it
                  graphic presentation data, real-time betting data ticker - just
                  like the
                  market ticker tape, real-time data spitting out the back end of
                  the tote,
                  which would allow us to do a number of things. One, it would improve
                  the
                  odds presentation for the customer, real time. Number two, it would
                  provide us an opportunity to capture the data with respect to various
                  transactions that would become proprietary in terms of our CRM
                  program and
                  use that data to parse the value of the customer to identify the
                  customers
                  preferences and design and develop products that are targeted to
                  that
                  customer.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">So
                  there are three different components. The relationship between
                  the tote
                  provider and the track would be primarily on the transactional
                  part, the
                  middle piece. Today if you are a United Tote subscriber, you have
                  to have
                  United Tote front ends. All the customer interfaces are United
                  Tote, as
                  contrasted to a casino operation that has a centralized computer
                  system
                  and on the front end but may have 10 different manufacturers of
                  machines
                  on their floor at any one time.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">So
                  the customer interface side that would be available to us under
                  the new
                  format would be available to the individual tracks to develop their
                  technologies with other vendors, et cetera.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">And
                  then on the back end side with the output, individual tracks or
                  organizations could then use the output side of the tote -, the
                  transactional part - to interface with their CRM technologies on
                  a
                  proprietary level to allow them to value, identify and develop
                  products
                  and services unique to a particular
                  customer.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Page
        26</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
        <div>
          <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%">
        </div>
        <div>&#160;</div>
      </div>
      <div align="left">
        <table border="0" cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Mike
                  Miller</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan,
                  this is Mike. I think it&#8217;s fair to say that the RFP and the very robust
                  structure that we are demanding now for </font></div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">this
                  new architecture could very well result in higher fees from a tote
                  company
                  in order to produce the results that Tom talked about. It is a
                  very
                  different machine than exist today and there is going to have to
                  be
                  capital deployed on their part. So although we don&#8217;t have any numbers, I
                  think there could be a general expectation that what we pay for
                  that
                  service could actually increase in the future</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Ryan
                  Worst</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Okay,
                  thanks very much.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Operator</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">At
                  this time there are no questions in queue. You many continue with
                  your
                  presentation or closing comments</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%">&#160;</td>
              <td align="left" valign="top" width="65%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Tom
                  Meeker</font></div>
              </td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">This
                  is I again. As we identified to you, we are very encouraged about
                  what we
                  see going on in the industry. And in terms of our operations, we
                  continue
                  to practice very strong discipline in terms of managing our core
                  operation. And I think to a large degree the execution risks that
                  we face
                  in various growth channels is mitigated by our disciplined approach
                  to
                  managing not only our operations but our development activities
                  and
                  finally, our balance sheet.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">The
                  company is positioned for growth. There are a number of opportunities
                  out
                  there, and complemented by our disciplined approach to things,
                  we think we
                  can surmount any of the execution risks that are
                  available.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%" style="BORDER-BOTTOM: medium none">&#160;</td>
              <td align="left" valign="top" width="65%" style="BORDER-BOTTOM: medium none">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">Again,
                  thank you for joining us this morning. We look forward to talking
                  to you
                  in the near future and certainly by the end of next
                  quarter.</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="14%">&#160;</td>
              <td align="left" valign="top" width="65%">&#160;</td>
            </tr>
            <tr>
              <td align="left" colspan="2" valign="top" width="79%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">&#160;Page
                  27</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" colspan="2" valign="top" width="79%">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">
                  <hr style="COLOR: #f0d97d" align="left" noshade size="3" width="100%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman">End</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
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