James L. Gagliano: Thank you, Chairman Phipps, and good morning, everyone. I, too, would like to thank everyone who is here today or watching on the live video stream. We take great pride in preparing this annual event, and we appreciate your participation. Like the sport of Thoroughbred racing, The Jockey Club has a long history.

Recently, I came across a newspaper article that described the meeting of eight patrons of the turf in New York City in 1893 that led to the formation of The Jockey Club just a few months later.

I'd like to read two sentences from that account.

The mission was to create an association which would assure order instead of the growing chaos of racing. The chaos born of a young nation's vigorous growth. Eight racing leaders, chaired by James R. Keene, adopted a resolution which read, in part, that the organization's

"purpose be, not only to encourage the development of the thoroughbred horse, but to establish racing on such a footing that it may command the interests as well as the confidence and favorable opinion of the public."

It was the last part of that resolution that really resonated with me. "Establish such footing that may command the interest as well as the confidence and favorable opinion of the public."

While that language might be considered a little old fashioned, it's a simple yet elegant phrase. And 120 years later, I can't think of a better way to describe the main purpose and philosophy of The Jockey Club.

In contemporary times that phrase also reflects a more specific and ongoing strategic commitment of The Jockey Club.

Maintaining the integrity of the American Stud Book; operating the commercial companies at the highest level of service and innovation; embracing wide ranging advocacy programs to advance the integrity and safety of our athletes; and deploying the fan and owner development initiatives identified in the 2011 McKinsey Study. This week's announcement about our partnership with FOX Sports is just one prime example.

So you can see that The Jockey Club is and has always been much more than just a breed registry. From this stage and in many of our publications, we've often explained that the growth and success of our commercial subsidiaries has enabled The Jockey Club to fund various initiatives that are very important to the sport. Details about our commercial companies and the markets they serve, as well as our charities can be found in the booklet at your seats or also online at jockeyclub.com.

Before I talk about a few of our more recent initiatives, I'd like to share some news and statistics from our registry.

Yesterday, as many of you know, we announced a projected foal crop for 2014 of 22,000. We also revised downward our projections for 2012 and 2013 crops. As the foal crops have declined in recent years, we've seen a growing affect on field size, which we believe should cause racetracks, horsemen, and racing commissions to seriously begin to reconsider the allocation of race dates.

Here's why: As you see, there were more than 78,000 starters a decade ago, that figure dropped to 62,000 last year. If we project out with the current foal crop and the starts per horse as constants, we think that will drop below 50,000 starters in 2015. This will likely translate into a significant drop in field size, and in the very near future, this will no doubt affect the lifeblood of the sport, which is handle.

The same point was made weeks ago when Rick Pitino voiced his concerns over racing saturation. I know many of you would prefer to see the uniforms in blue and red, but I prefer the black and white of my alma mater.

As our distinguished guests from Japan and Ireland will affirm later in the program, racing is truly an international sport, and The Jockey Club continues to play an active role here and abroad to develop and promote best practices and uniform rules. By my count, we're involved in more than a dozen worldwide committees and organizations, including many of those listed on the screen here. How deep is the commitment to command the interests as well as the confidence and favorable opinion of the public?

In addition to our marketing projects, we invest each year into a series of advocacy programs, and here are a few recent highlights.

Medication reform continues to be one of our highest priorities. To that end, The Jockey Club, in conjunction with TOBA, built horseracingreform.org, an advocacy built and designed to improve regulatory standards for horse racing. In just one year, horseracingreform.org has attracted more than 23,000 unique visitors and has been widely embraced in social media circles.

More significantly, it has stirred activism. Thousands of visitors to the site have signed petitions in support of reform campaigns. In fact, more than 300 visitors just last month signed an online petition to support changes to the West Virginia's Racing Commission's new medication regulations, and shortly thereafter, West Virginia became the first state to formally adopt the Mid Atlantic Medication Reform Program.

The Jockey Club maintains a deep seated commitment to equine health. Over the last several years we've created a number of programs designed to enhance thoroughbreds when their racing and breeding careers have concluded. Our support of the Thoroughbred Aftercare Alliance and the thoroughbred incentive program are two such examples.

The TAA, organized last year with seed money from the Breeders' Cup, Keeneland and The Jockey Club, now serves as both the accrediting body for aftercare facilities and the central fundraiser. In March, the TAA announced the accreditation of its initial reorganizations. Those shown here, and approximately 30 additional organizations, have applied for accreditation.

The Thoroughbred Incentive Program was created in 2011 to encourage the retraining of thoroughbreds into other disciplines, and it's also been immensely successful.

T.I.P, as we call it, now offers sponsorships in a variety of classes and divisions. More than 400 horse shows offer T.I.P awards with more than 4,000 horses eligible for T.I.P prizes.

So you can see from my comments today and the materials we've provided, all of our efforts remain consistent with what those eight gentlemen said way back in 1893.

But I'd prefer to conclude my presentation today with the reiteration of the remarks I made from this podium just a year ago:

"We can provide the best possible services to our respective customers. We can reach out to new fans. We can attract new owners. We can procure sponsorships and television programming. But I assure you, those marketing efforts will be seriously and dangerously compromised if we don't reform our medication policies and improve our drug testing standards, and our penalty systems."

We ask you to keep all of this in mind during the duration of today's program. Thank you for your time.