James L. Gagliano: Thank you, Dinny. Good morning.

Traditionally, the Activities of The Jockey Club report provides this audience with an update on products, services and initiatives that have been introduced or undertaken in the past year by The Jockey Club family of companies.

Given that today's Round Table Conference agenda focuses entirely on issues concerning the health and safety of the horse and The Jockey Club's role in that regard, we thought it would be more appropriate to spend a few minutes going a little deeper into the past.

Specifically, we would like to talk about the history of how our company was built, the resources that we have developed along the way, and how those resources are being used to address some of the problems that the industry is now confronting.

Let's start with the Registry.

Formed in 1894, The Jockey Club is responsible for maintaining The American Stud Book, which ensures the correct pedigree and identification of every Thoroughbred foaled in the United States, Canada and Puerto Rico.

In order to register a Thoroughbred in North America, breeders must comply with the rules of registration as set forth in the Principal Rules and Requirements of the American Stud Book. I'm sure everybody in this room already knows that.

But what many people don't know is that The Jockey Club is a founding member of The International Stud Book Committee, which serves to coordinate the policies and practices of stud book authorities around the world. A key ingredient to accomplishing this is through the development of the internationally accepted "Definition of a Thoroughbred," as contained in Article 12 of the International Agreement on Breeding, Racing and Wagering.

There are currently 64 countries that are signatories to this important article. As signatories, each stud book authority, including The Jockey Club, incorporates the provisions of Article 12 into its own rules.

Neither Article 12 nor the Principal Rules and Requirements of The American Stud Book themselves promote specific attributes - such as the suggestion by some that we prohibit horses that perhaps competed on steroids. To do so would at best be subjective and potentially restrictive to fair trade and free market enterprise, not only in North America but around the world.

We have to say that we found it somewhat ironic when earlier this summer, amidst all of the complaints about the lack of uniformity in North American racing due to the decentralized state regulatory framework that racing operates under, some were questioning why The Jockey Club didn't promote specific attributes as a condition of registration.

The fact is that Article 12 is the best example of the global racing community achieving uniformity by harmonizing the rules of different jurisdictions in order to facilitate cross-border commerce. Think about it for just a minute.

If our 38 state racing jurisdictions could even come close to achieving the same uniformity with respect to the rules of racing - including medication and penalties - as The Jockey Club and the other 63 participating countries around the world do with their respective stud books, racing in North America would be dramatically improved.

But over the course of the past 20 years, The Jockey Club has become much more than simply a breed registry. Beginning in 1989, when the first of our commercial subsidiaries was incorporated, and continuing right through until today, The Jockey Club has assembled a group of commercial, for-profit subsidiaries and strategic commercial partnerships, each of which has a two-fold purpose:

• To serve specific segments within the industry utilizing highly efficient, state-of-the-art central database technology platforms, and
• To generate profits that can be used to help fund important industry initiatives.

Each of our companies are stand-alone, arm's length enterprises that operate at a profit. When they procure data or services from one another, they do so in accordance with license and service agreements that contain the same terms, conditions and fees that apply to arrangements with third parties.

For example, one common misconception is that The Jockey Club pedigree data is provided free for use by each of our subsidiaries, and that breeders, therefore, are subsidizing the activities of our commercial enterprises.

Let's put that one to rest right now. Both InCompass and The Jockey Club Information Systems pay market rates for pedigree and performance information that is licensed from The Jockey Club and Equibase, respectively. And Equibase does the same with the pedigree information that it licenses from The Jockey Club.

All of our inter-company activities are handled in exactly the same fashion.

Let's quickly go through each of our commercial enterprises.

The Jockey Club Information Systems, incorporated in 1989, serves industry professionals by providing the information-based tools that are needed in their daily operations, as well as the innovative technology to effectively manage them.

The data that serves as the foundation for these tools comes from three sources:

• The Jockey Club's pedigree data
• Equibase North American racing data
• International pedigree and racing data collected from appropriate racing authorities within each major racing country

The most popular product is Equineline, which offers a variety of pedigree products including the popular Portfolio Service. Nearly 2,000 of our customers have established portfolios seeking the most efficient way to manage their bloodstock.

Cataloguing Services serves customers such as Keeneland, Barretts, Ocala and a number of regional sales companies. We produce more than 30,000 camera-ready pages annually in support of the commercial sales market, and also provide the raw data that is used by other catalogue vendors who support this market.

The Software Consulting division's most widely used product is the Horse Farm Management System, with more than 500 farms and 150 trainers using these programs to track detailed health and breeding records and manage billing and accounts receivable functions.

Equibase Company, formed in 1990 as a partnership between The Jockey Club and the member racetracks of the Thoroughbred Racing Associations of North America, was created to provide a uniform database of racing information and statistics.

The fact that Equibase - and the data that it collects - is industry-owned is especially meaningful.

Decisions about Equibase's direction are made by the industry, for the industry. The best example of that was the role Equibase played in the expansion of simulcasting, when tracks went from producing just one card of past performances a day to literally dozens.

For that reason, considering the need for industry uniformity in many areas, we remain encouraged about what this industry can do when individual stakeholders set aside their private agendas and work together toward a common goal.

Formed in 2001 to merge two companies that The Jockey Club had acquired several years earlier, InCompass Solutions delivers state-of-the-art products to racing offices, horsemen's bookkeepers, and other racetrack departments. Its customer base now includes virtually every racetrack and simulcast outlet in North America.

Some of us may recall the days when racing office functions were largely conducted with paper, pen and glue - and the horsemen's bookkeeper's ledger was actually a sheet of paper several feet wide.

Thanks to InCompass, the racing office and related areas are now among the most modern at a racetrack, providing racing secretaries with tools to better manage their horse inventory, estimate field size and write a more precise condition book.

From this broad platform, InCompass has the unmatched ability to launch new products and services - such as InCompass Financial Services Account Access and Funds Transfer, which provide horse owners the ability to electronically manage their horsemen's bookkeeper accounts with software designed to be very similar to online banking.

And in a few minutes, David Haydon, and Dr. Mary Scollay are going to brief you on InCompass' latest innovation - the Equine Injury Database - the system that allows for the uniform collection of information about horse injuries.

The technology platform that supports each of The Jockey Club businesses is The Jockey Club Technology Services, also formed in 2001. Here again, our investment, initially made to serve our own internal needs, now extends benefits well beyond just our companies and we now also serve clients such as Daily Racing Form, Keeneland Association, New York Racing Association, TRPB and Sona Mobile.

I believe you'll see the many ways that The Jockey Club family of companies supports this industry on a day-to-day basis. But our mission does not stop there. When it comes to industry initiatives that are spearheaded or supported by The Jockey Club, it's a long list and it dates back many years.

Some of these are as a result of a call-to-action in a time of need. Others are just a case of us stepping up quietly to do the right thing, but including the provision of much needed capital.

In fact, in the past five years alone we have contributed close to $4 million to industry-wide initiatives as diverse as the Racing Medication & Testing Consortium, the Equine Drug Research Institute, the American Horse Council, the University of Arizona Race Track Industry Program and Hurricane Katrina relief efforts at Fair Grounds racetrack, among others.

We have also lent our technological expertise and contributed in-kind services to industry-wide initiatives. The creation and launch of the Equine Injury Database and the formation of the Thoroughbred Safety Committee are prime examples.

They further tell why The Jockey Club enterprise is uniquely suited to embrace and help to resolve industry problems: virtually every one of our companies has played some role in the work of these initiatives.

As I close, I do want to say a few words about our two charitable foundations: The Grayson-Jockey Club Research Foundation and The Jockey Club Foundation.

Both of these organizations' success is based in large part by the benevolence of members of The Jockey Club, such as Jack Oxley and the late Paul Mellon, and so many others who have contributed so generously throughout the years.

In just the past five years alone, The Jockey Club Foundation has provided almost $3 million to help individuals in need within our industry.

During that same time, The Grayson-Jockey Club Research Foundation has provided more than $4.4 million in support of close to 100 research projects aimed at improving the health and safety of horses.

In total, in the past five years The Jockey Club and its two foundations have provided more than $11 million for industry initiatives, equine research and welfare issues.

In closing, as is tradition, I want to share our estimate of the 2009 registered foal crop as announced yesterday.

We are estimating the foal crop to be 35,400, which is a 3.3% decline from our 2008 forecast.

Thank you for your time and attention this morning.

I would now like to introduce Matt Iuliano, who will share some information about the Thoroughbred breed.

Matt...