Good day, ladies and gentlemen and welcome to the Churchill Downs’ Third Quarter Results Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session with instructions following at that time. (Operator Instructions) As a reminder, this conference is being recorded. Now, I will turn the conference over to your host, Courtney Norris, Director of Corporate Communications. Please begin.

Thank you, Tyrone. Good morning and welcome to Churchill Downs Incorporated conference call to review the company’s business results for the third quarter ended September 30, 2013. The company’s third quarter business results were released yesterday afternoon in a news release that has been covered by the financial media. A copy of this release announcing results and any other financial and statistical information about the period to be presented in this conference call, including any information required by Regulation G, is available at the section of the company’s website titled News located at churchilldownsincorporated.com as well as in the website’s Inventors section. Let me also note that a news release was issued advising of the accessibility of this conference call on a listen-only basis via phone and over the Internet. As we begin, let me express that some statements made during 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 facts. The actual performance of the company may differ materially from what is projected in such forward-looking statements. 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. 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 and expectations. I will now turn the call over to our Chairman and CEO, Mr. Bob Evans.

Thanks, Courtney. As I was putting together a few comments for today, I realized I was repeating the things that were already in our press release, but rather than I do that to you, I thought we’d just get comments from me, turn this over to Bill Mudd to talk to you through the numbers and then we will come back and answer whatever questions you might have. Bill?

Thanks Bob. Good morning everyone and Happy Halloween. Overall, it was a solid quarter setting new third quarter records for both revenues and adjusted EBITDA. Our third quarter total revenues were up 13% to $185.6 million and adjusted EBITDA was up 31% to $31.8 million. Net earnings from continuing operations for the quarter, was up 52% to $9.2 million. Year-to-date cash provided from operating activities was $114.4 million, up 12% over the prior year of $102.1 million. Year-to-date capital spending was $29.9 million, $13.8 million of which was for maintenance purposes, while $16.1 million was related to new projects, including the Churchill Downs Mansion and the renovations at Harlow’s, which were completed in the first half of the year. Long-term debt ended the quarter at $325 million, up approximately $115 million from year end 2012. In July, we added approximately $169 million of debt with the closing of the Oxford acquisition. Even with this added debt, our balance sheet remains in great shape. Now, let’s take a look at the performance of our segments during the third quarter. Our racing operations results were not surprising with revenues down 19%, or $12.2 million resulting in a $3 million decrease in adjusted EBITDA. The revenue decline was driven by a $14 million decline at our Calder property. $9.3 million of this decline was driven by the loss of hosting revenues that Calder has traditionally collected during its live racing meet. As mentioned in the second quarter earnings call, we believe that Florida law requires a racetrack to run no less than three days of live racing per week during consecutive weeks to qualify as a host track to redistribute out of state simulcast signals within Florida and to collect commission revenues on wagers on those tracks. Under this rule Calder is the…

Thanks, Bill. Tyrone, do we have any questions?

(Operator Instructions) First question is from Cameron McKnight of Wells Fargo. Your line is open.

Good morning. How are you?

Good morning, Cameron. How are you?

Good. Just a quick question on the regional properties, this is the second quarter where we have seen slightly weak results due to a soft macro environment, what’s the ability that you have to manage costs at those properties over, let’s say, the medium term?

Cameron, this is Bob. Did you say that the gaming properties? We didn’t hear the first part of the question.

The regional gaming properties and what’s your ability to manage – what’s your ability to manage costs in a self macro environment.

Bill Carstanjen, you want to take that one?

Sure. We do have some leverage to do that and that’s something that we have taken a very serious look at over the last few weeks as we start our budgeting planning for next year. So with consistent pressures like we are seeing right now, we will be looking hard at the cost structure and also free play comps, combination of those things as well.

Great, thanks very much. And then as a follow up, could you outline some just general thoughts on Penn’s conversion into a REIT and operating company and how that impacts the landscape for acquisitions and how you fit in?

I think I would rather pass on commenting on what other companies are doing. We are certainly aware of what they are doing and have looked into that in detail. I guess in the theory all other things being equal it might increase the value of the existing regional gaming properties, but so far at least I haven’t seen any specific evidence of that in any overwhelming manner. So I prefer not to comment on it and I will sort of agree with your perspective philosophically but I don’t know that I have seen the fact to back it up yet.

Great, thanks very much guys.

You’re welcome. Thank you.

Next question is from Amit Kappor of Gabelli & Company. Your line is open. Amit Kappor - Gabelli & Company: Thanks for taking my question. Can you guys comment on I mean the press release you announced or reiterated the support for the coalition in Kentucky. So can you talk give us more color around that and potentially talk about the goings on in Illinois as well on the gaming legalization front? Thank you.

Amit I will take, this is Bob I will take the Kentucky and Bill Carstanjen will take Illinois. Amit Kappor - Gabelli & Company: Thank you.

So there is a new coalition of business and specifically it has been created in Kentucky called Kentucky Wins, you can go to kentuckywins.com if you want some more information. There is also a Facebook page and that group of leaders is focused on trying to give them expanded gaming bill passed in order to address some, not all but some of the state’s significant budget shortfall problems. And the important thing about that approach is that while the principal goal is to solve the budget shortfall problems of the state we want to do that in the way that it doesn’t negatively impact the racing business. So that’s what Kentucky Wins is, it’s been out active at the local grassroots level trying to build support around this idea of passing an expanding gaming bill in 2014 to adjust the Kentucky budget shortfall, so in short that’s it is. If we have more questions I will try to go deeper. Let me toss it to Bill for a second to cover a little more and then if we haven’t addressed your question fully let me know.

So this is Bill talking expanded gaming in Illinois has been titled with recent couple of sessions through pension reform. So the governor has made it clear that he wants progress on pension reform in the state before he will address alternative gaming. That’s an environment where prior to the focus on the pension reform legislation was passed twice by the legislature but the governor didn’t sign either of those pieces of legislation. So generally, we like the environment in Illinois and we think the governor has expressed publicly an evolution of his views on expanded gaming. But right now the state I think in most people’s mind is facing a bigger problem and that’s addressing the pension issues. So we are always hopeful and optimistic, but I think in short veto session that’s occurring right now expanded game is not really not the focus. Amit Kappor - Gabelli & Company: Thank you. Just to follow-up so the Illinois bill that passed the senate is it live now or I guess active now and when is it active through if you guys have that.

Yes the bill was passed in the spring session is active through the end of this legislative session which I think goes to the end of next year Amit. Amit Kappor - Gabelli & Company: Thank you.

So I think this is passed by the senate, it still needs to be taken up in the house. Amit Kappor - Gabelli & Company: Thank you.

Our next question is from Steve Altebrando of Sidoti. Your line is open.

Good morning. Couple of questions, can you comment a little bit on the M&A pipeline whether there are deals out there right now to look at?

We don’t comment any specifically on any deals but there are always deals out there Steve it’s just a question of whether they are deals that we want to do and at prices we do them at so.

Okay, and then if you could remind me the small expansion in Oxford is that adding gaming machines?

Yes, we are adding four table games and 58 machines. It should open before – around mid- December.

Okay, and then the – getting back to the Illinois question that was previously asked. The bill that’s passed right now in the house is that you are saying it’s a life through the end 2014 or is it through this session which I thought ends the first week of 2014.

But through the session, I might be mistaken that it’s the end of next year. That’s what I thought it was, but it’s been a while since I have looked at it, Steve, but it’s I guess as theoretical as it could be in January. I’ll have to follow up on that one.

Okay. Okay, thank you.

(Operator Instructions) Next question is from Justin Sebastiano of Brean Capital. Your lien is open.

Thanks. Good morning guys. You mentioned low table hold at Harlow’s and Riverwalk as part of the reason for the weakness there, can you maybe quantify what you think the impact of that low table hold was on the EBITDA both properties?

Yes, give me one second it will take me a minute.

Sure. I guess in the meantime, Mississippi seemed to be more impacted by the soft macro environment, do you guys agree with that compared to your other regional properties and just what we have heard from your peers so far?

Yes, it is definitely more impacted than others, much higher unemployment. I think the higher payroll taxes had a disproportionate impact on discretionary income in that region.

Okay. While you are digging for that and just overall promotional environment across all of your properties, the casinos, I mean, how is that – does anyone market more or less rational than some others?

I think that ebbs and flows. I think I don’t if I can answer that quantitatively across all the markets off the top of my head, but I would tell you that for us, Mississippi right now is an area, where we are looking closely at that in terms of what the competitors are doing or what we are doing as we see sort of a consistent decline in the environment.

And that’s more to just manage it and be more targeted to sort of try to may be get rid of the unprofitable comps and just kind of try to drive EBITDA there or is it more if we are not quite there yet, where it’s gotten irrational, but it might go towards that?

Yes. When you see shifts in your environment, you have to look at all your segments to see generally if the way you are approaching the customers that within those segments still makes sense. So I don’t think you ever adopted or at least in our company, we haven’t adopted a philosophy that we stick to all the time, no matter what as we see changes in the macro environment. And in our macro environment, we revisit all of our assumptions on comps and free play and reinvestment. And we are doing that pretty significantly right now in Mississippi.

Okay. And….

So...

Go ahead, I am sorry.

At Harlow’s, the effect on EBITDA was around 300,000 and at Riverwalk is around 200,000.

Okay. And then forgive me I missed the very beginning when you guys are talking about the Florida host, what’s the public hearing date?

November 7.

Okay. And you expect to make up what you lost this quarter on the race, the 39 race days you are going to have in Q1, is that what you guy said?

Now, I said there are two pieces to it. One is the post revenues, which is about $9.3 million of revenues in the current period and $2.7 million of our share of that after taxes and purses, so that piece hopefully will get resolved in November 7 hearing. I don’t know how that will turn out, but that’s the intent. We did race 17 fewer days in the third quarter. We raced fewer days. We raced fewer days in second quarter as well. We are going to make up those by racing 39 days in the first quarter of next year. So there are two independent things and the timing of which, the only thing I can tell you is we will race 39 days in the first quarter.

Okay.

We haven’t actually raced any.

I am sorry, what was the revenue impact then for those loss racing days?

I think, we will see here, was it 4.3? That was 14 in total accounting. 9.3 was on host revenues and 4.4 is related to pure race days.

Got it. Okay, thank you for that. And then just lastly as far Steve mentioned the M&A pipeline, I won’t try to pin you down for specifics, but have you just in 30,000 foot view, have you seen multiples increase from the sellers? Have they asked for higher multiples over the past 12 months since Penn has done this re-conversion and as they have gotten closer and now basically converted to the REIT? Have you seen those multiples expand for what sellers are expecting?

As Bob said, we haven’t seen it yet. We disclosed in Oxford at a 7.5 multiple is what we thought ends up being a little bit less than that. So beyond that, I can’t really comment.

Okay, thanks guys.

Tyrone, any other questions?

Thank you. There are no further questions at this time sir.

Okay. Well, unless anybody has got anything else, I think we are finished. Thanks for joining us today. Have a Happy Halloween season. We will talk to you after the first of the year. Bye-bye.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes your program. You may now disconnect. Have a wonderful day.