Magna Income Decreases in First Quarter of 2003

Magna Entertainment Corp. reported a $6-million decrease in net income for the first quarter of 2003 compared with the same period in 2002, according to a financial statement released April 30.

Net income was $12.7 million in the three months that ended March 31, 2003. Diluted earnings per share decreased $0.10 per share for the first quarter of 2003 compared with the same period in 2002.

"The war in Iraq, severe weather conditions, and a generally weaker U.S. economy resulted in lower attendance and wagering at most MEC properties during the first quarter of 2003," Magna chief executive officer Jim McAlpine said. "These factors, together with the planned changes in the seasonality of our business, resulted in lower profits compared to the first quarter of 2002. In addition, we spent $6.5 million on items that we fully expect will benefit future years' income."

McAlpine said the company's strategic plan remains on track. "Through synergies, cost reductions, and revenue enhancements, we are well positioned for future growth in profitability which will result in improved shareholder value in the months and years ahead," he said.

Magna said the Sunshine Millions, a series of races at Gulfstream Park and Santa Anita Park in late January, contributed to attendance and handle gains of 41% and 32%, respectively, at MEC tracks.

The financial results for the first quarter of 2003 reflect operations for all of MEC racetracks and related wagering operations. Ontario Racing Inc., which owns Flamboro Downs, was "equity accounted for" in the first quarter of 2003 because the deal wasn't completed until April 16. The comparative results for the first quarter of 2002 don't reflect the operations of Lone Star Park, the Maryland Jockey Club, or Ontario Racing.

Revenue for the first three months of 2003 was $270.1 million, compared with $248.8 million for the three months that ended March 31, 2002.

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