CART MEDIA CONFERENCE

December 9, 1998

Andrew Craig

Dario Franchitti

Barry Green

Bert Kremer

Paul Tracy

BERT KREMER: Thank you, Greg. First of all, I'd like to thank everyone for taking the time out to join us today. Several years ago when the Brown and Williamson tobacco industry was evaluating the possibility of a major sponsorship program, we determined that motor sports was the fastest growing spectator sport in the United States; that fit our need. We wanted a program that would help improve the image of our KOOL brand that would instill pride in our employees and it would allow us to give something back by helping to provide an entertainment property enjoyed by millions of Americans. But in motor sports, we felt that CART open-wheel racing team with KOOL Green accomplished these goals and we certainly haven't been disappointed. In just three short seasons, team KOOL Green has become a major force in open-wheel racing, which has established our company and our brand as leaders in the sponsorship arena. During the relatively short time period, our company has also forged a very strong relationship with team own Barry Green, an association that began as a two-car team KOOL Green effort in 1996 and has grown quite considerably since to include (inaudible). We believe that team KOOL Green is once of the best two-car tandems in the FedEx Championship Series today, and Paul TRACY and Dario Franchitti two of the most successful drivers in 1999. They are proven winners and will certainly contend for the championship in 1999. And as a partner of Barry Green, we at Brown and Williamson are committed as ever to helping him win other championships. It's my pleasure to announce Brown and Williamson has reached a new long-term agreement with team owner Barry Green. Through our KOOL brand, we will invest over $50 million sponsoring the team over a three-year period through the 2001 season. This new agreement we believe exemplifies our enormous confidence in Barry Green, all of the members from team KOOL Green and in CART open-wheel racing. With this agreement, our team KOOL Green sponsorship will remain a program for Brown and Williamson through the next millennium. With that, now let me allow Barry Green to have an opportunity to share with you more news about the future of team KOOL Green.

BARRY GREEN: Good morning, everyone, and thank you for joining us today. Obviously, I'm delighted KOOL has renewed negotiations with our team and that we'll be racing together for three more seasons. Three years ago we developed a pretty ambitious plan with Bert, Bob Stowe, Bob Faxon and their associates. Along the way we hit a few bumps in the road but KOOL never wavered and last year we all began to see the fruits of our combined efforts. I want to thank KOOL for their support over the past three seasons, to say once again how much we're looking forward to our continued association, and a team we are so proud to be associated with KOOL and all the folks at Brown and Williamson. I'm happy to announce today that Dario Franchitti has agreed to an extension of his agreement with us, and he will be driving for team KOOL Green at least through the end of the year 2000. I'm certain that next year we will pick up right where we left off with Dario, after a great run to 3rd in the 1998 FedEx Championship. As many of you know, we recently resigned Paul TRACY to drive for team KOOL Green for three more years. We're all very excited to have him with us throughout the duration of our new agreement with KOOL. I'd also like to welcome a new member to our team, Donny Cane. Donny is a friend of Dario's and first came to see us this the middle of last year. Very persistent in seeking an opportunity to test drive our car. We tested him several times in Indy Lights car and we were very, very impressed. He'll be driving for us in the 1999 Dayton Indy Lights Championship. Both in addition to resigning KOOL, I'm very pleased to say that we've also resigned Kline Tools. Kline has been a fantastic sponsor for us since 1994 and we will continue that association. Also, our partners Honda, Firestone, Reynard will be back with this team next year. We are extremely fortunate to have their products -- are even prouder of the names they have on our cars. I have the best equipment. I have the best sponsors. I have a fantastic team. I am really looking forward to 1999. And with that ladies and gentlemen, I am handing it over to Andrew Craig, the president and CEO of Championship Auto Racing. Thanks very much.

ANDREW CRAIG: Thanks, Barry, and good morning ladies and gentlemen. It's a real pleasure on behalf of Championship Auto Racing to be here today. We are extremely proud that Brown and Williamson has selected CART for their sole sponsorship of the KOOL brand. KOOL has been with us now for three years and throughout that time they have proven consistently that they are one of the world's most professional sponsors. KOOL understands the sponsorship medium. KOOL knows how to make this thing work. We believe this announcement from KOOL today really underscores the team sponsorship in the FedEx Championship Series is a powerful and effective marketing tool. That's also great to be here today in Louisville, the home of the Kentucky Derby, one of the great events in sports. Just to put our sport, the FedEx Championship Series, in perspective for one moment: This year 146,000 spectators attended the Kentucky Derby. Now, 146,000 is exactly the same number as the average number of spectators at each and every event of the FedEx Championship Series. So I hope from that you can see that we're a big sport, and with the hope of companies like Brown and Williamson, we're a growing sport. Once again, we are immensely proud of this announcement. We are immensely proud of our relationship with Brown and Williamson. (Inaudible).

DARIO FRANCHITTI: Basically, I won the Formula 3 Championship in Britain three years ago, tried to do Formula 3000 this year with not a great amount of success, and looked to America for progression from Indy Lights to championship cars seems to be one that's looked upon very keenly. And the last few champions have all moved on to champ cars and that's obviously what I want to try and do.

DARIO FRANCHITTI: Obviously, Team Green is a fantastic team, too. It is a great sponsor. I am pleased that they have both given me the chance to be here and I think finishing in the Top 3 in the championship is certainly not out of the question.

BERT KREMER: Well, as you can imagine, the recent State settlement in the tobacco company is a very complex agreement, and obviously it will take a bit of time to be able to sort through that agreement entirely and understand it totally. As it relates to the sponsorships, the agreement basically precludes certain types of sponsorships, prohibits those, and it does allow each manufacturer, however, within allowable categories of sponsorship to continue to sponsor one -- have one brand name sponsorship for the foreseeable future. There are obviously limitations that go along with that in terms of how companies can exploit their sponsorship. Those limitations will mean probably in the future companies like us will not get quite as much value out of it, but we are still confident in the program.

BERT KREMER: Absolutely. As I said before, the restrictions that come down with the State settlement do not preclude us from continuing our motor sports sponsorship. And I think the fact that we're here today making this announcement exemplifies our confidence in continuing with our Team KOOL Green sponsorship into the future.

PAUL TRACY: I think for, myself we've got a long-term arrangement with Barry, myself and KOOL and Kline Tools. And my future in the sport is here with this team. They have supported me through this year. My teammates had have supported me through this year. We've got a lot of work to do over this winter. We've been testing really well, and we've got our new car, and Dario is going to continue to test this week and me the following week. Obviously, you know, to win a championship we -- I need to be consistent, as well as the team to be consistent. We need to have good strong finishes every weekend. And I think we have all the capability of doing that with the team that Barry put together and the group of people that we have. We've hired on some new engineers, some aerodynamicists some new crew guys, truck drivers. We've really put all the pieces together to make this thing work and that's what our plan is and that's what our focus is right now.

DARIO FRANCHITTI: That would be a nice headache to have to have two people playing for the championship. I think we can both challenge for the championship next season. It's going to take consistency, as Paul said, from the team and from both of us. We're going to have to work together. I think that was one of the advantages and one of the things I was able to take advantage of this year, especially towards the end of the season, was that Paul and myself worked so well together, and we collected information and that worked well for me and maybe it didn't work as well for Paul. But I'm confident that's going to change next year. We're going to have a very strong showing from the whole Team KOOL Green.

PAUL TRACY: From my standpoint, I feel that Dario is probably one of the favorites to win the championship. Obviously, he's going to be competition for me and I feel that I'll be one of the favorites. I feel confident about this year. I feel good about the changes that Reynard have made to the new car, that will hopefully help my driving style and hopefully we can give Barry some headaches. And those are good headaches to have, though.

BARRY GREEN: Plenty of aspirin, but it's a great problem to have. I think we were strongest in the first part of the season, and I think we'll have the advantage going into the latter part. I'm sure they will both be very strong. Dario was quick pretty much all year. Paul was quick at some places, and certainly later in the season he proved that he could be as fast as Dario and I'm looking forward to it.

ANDREW CRAIG: This is "El Presidente" speaking. Unfortunately, my executive powers don't go that far. I think it's very important to recognize that first and foremost, this is a sporting endeavor and the rules on the playing field are enforced by those officiating the races. And I think in all seriousness, I think it would be a very sad day if we ever lost sight of that. Because when a sponsor becomes involved in a sport, what we want to acquire is the inherent values of the sport, the independent values of the sport and hopefully transfer some of those values to their product and their brand. I think as soon as you start messing with the competition at the management level, then you undermine those values and over time, you dilute the very thing the company wanted to get involved in. And quite frankly, to say it again, this is a sport and it will always remain a sport. There will be good days and there will be bad days. I'm sure that Paul has a terrific season ahead of him. What's in the past is in the past and we're moving on.

BERT KREMER: With our current brand, KOOL, no, we didn't. We chose this program for the variety of reasons that I mentioned earlier and we have no thoughts planned for anything to change from CART open-wheel racing. We're just thankful that the agreement with the States has allowed us to go forward with this in the future.

ANDREW CRAIG: As you recently, recently there have been some announcements from the Speedway with respect to the IRL and their engine formula. We looked at those very carefully. I think would summarize as follows: We obviously would like a reconciliation with Speedway and I think we made that clear. If that takes a little while to achieve, and that may well be the case, I think that we have to always work to try to find a resolution, but at the same time won't -- but that shouldn't be misread. (Inaudible) but that would be in the best interests of the sport as a whole, CART's interest, Speedway's interest.

DARIO FRANCHITTI: Obviously, as I've said before, Formula One is something I'd like to do in the future. But I was sitting down thinking about it and the first thing I would say is I enjoy myself so much over here. I had a chance to win a couple races this year and I just felt that it would -- it made me happy to stay here, basically. That was the decision. I thought, why would I leave somewhere where I am enjoying it, where I can win races, to go to somewhere that might not be the ideal situation. I'm looking forward to it and Barry made a big commitment to me last year, and I think some people were surprised that he did that, and this year hopefully we can prove those people wrong and do some great things together in the next year.

DARIO FRANCHITTI: I think that -- even if Zanardi was here next year, I think the title would certainly be more open than it has this season. The second half of the season, Alex wasn't really the quickest guy out there. He didn't win a lot of races out there, but making mistakes. I think it's going to be a little bit easier now that he's not here because he was one of the guys that you can count on in there day in and day out. For me, it's a double-edged sword. I enjoyed racing against him. I enjoyed the competition. But there's going to be a lot of people, especially this guy on my right here, Paul, we're going to be fighting for the championship next season and it's going to make it exciting and it's what the FedEx Championship is all about.

PAUL TRACY: I'd have to agree with Dario. Although Zanardi and I, we had our moments, but I can say that from my heart that he was probably one of the toughest competitors that I've ever driven against. I rate him very highly as a driver. He's a fantastic spokesman for Indy cars. He's a fantastic showman. Somebody that was -- I think is really good for the sport and I think he will be missed by everybody. I know there are a lot of the drivers that are happy to see him to go because he's pretty tenacious. But he's somebody that I think will be missed from our sport. And hopefully he'll do well for us in Formula One.

BERT KREMER: First of all, in the tobacco industry, as you probably know (inaudible) -- quite some number of years. Little bit more in this recent State settlement, so we will utilize the program and we will market our association in accordance with the State settlement and the bounds that it has set for us.

BARRY GREEN: Well, the actual suspension we got is -- cannot appeal as per the rule book. So it will stand and Paul will not drive in the first race.

DARIO FRANCHITTI: First of all, I've had no thoughts of a one-off deal to race at the speedway, one race, because I got my plate pretty full trying to win the temp car series. As to how Mickey mouse it's going to be, I think it will be a little bit like more fish swimming in a big pool in the world or something. I think it will be very difficult to identify the cars from the grandstand. I think the track is going to be dwarfed by the speedway.

PAUL TRACY: For me, myself, I don't have any plans for trying to compete in that. I'm obviously on contract with Barry Green and Team Green; so it's -- my responsibility, lies with what concerns the team and what our focus is, and that's champ car racing. As for the race at Indianapolis, we'll have to wait to see what happens. I'd like to see a really good race in America for Formula One'. And hopefully if that comes off and every everything is good, then that's great for motor sports in the United States.

BERT KREMER: As I said before and I don't know if you were on at that point in time, but we will spend in excess of $50 million sponsoring this team over the next three years, to provide additional details in terms of that actual spending, I'm afraid I'm not at liberty, really, to get into the details.

ANDREW GREEN: This is Andrew here. Good morning. First of all, we think that having an all-in-one race, we think it's great news. We think it's good for racing. We think it's good for open-wheel racing in particular and anything that's good for open-wheel racing is absolutely good for us. We think it's terrific news for the sport as a whole to have a Grand Prix in the States. Whether or not it fundamentally changes the nature of the Indy 500 going forward. I'm really not going to speculate about that. Obviously the speedway is how home to three very important races rather than one, but I don't want to get into. That would be nothing more than speculation as to whether it's good or bad or hurts or hinders that event. Your specific point as to whether it increases or reduces the likelihood of return by Championship Auto Racing to the speedway I think it's pretty neutral. I don't think it affects that one way or the other.

BARRY GREEN: Really, I think I just echo Andrew's thoughts. I think it's great that they are coming here. I love Formula One racing. In the meantime we've got a 20-race program on our plate and one that we're going to have to focus all our thoughts and efforts to win and that's what we'll do. But I think it's great. I don't really know what sort of effects it will have on the Speedway. They are really the Speedway's problems and we'll just focus on our game.

BERT KREMER: I'm not sure I exactly know what litigation you're referring to. I mean, the tobacco industry just reached an agreement several weeks ago that does allow us to continue to bring this program into the future as we're announcing here today.

BERT KREMER: Now I understand. We're very, very confident -- obviously, in Barry Green in his arguments and what they can accomplish and I think they have proven it again this year and they certainly have proven it in the past with winning a championship, winning many races in the past. We're going to be with Barry Green for the next three years and been with him through some lean times in the past and think that exhibits that we're going to be with him -- there are if there are lean times in the future.

PAUL TRACY: Yes, he is.

PAUL TRACY: Well, I think that there's been a lot of growing pains, a lot of adjustment not only from my side by also from John's side the way that he's operated in the past. And it did take us a long time to really get our minds on the same -- on the same track and towards the end of the year, everything started to flow and come together, and, you know, Barry, we obviously had a lot of discussion; had a lot of things going on during the year and we kept that and we kept focusing. Barry has taken a step forward and hired an aerodynamics engineer that we've been doing a lot of wind tunnel work the last couple of weeks. I think we've had an opportunity in this five-, six-week break since the season ended to really look at the engineering program, to get into the wind tunnel, to figure out some missing pieces to the puzzle that we were missing, and we went out and tested a couple weeks ago with the '98 car a couple weeks ago and really had a test with the car and were able to do some work with Firestone and really has put myself and John on the right track for '99 and we'll make a run at the championship.

PAUL TRACY: I think it did. For me, I think it was really the only thing that I had a base of and the only car that I had knowledge of. Basically my whole champ career other than one season was in a Penske car. My mentality or capacity for doing things and changes to the car were based around a Penske. A lot of that didn't translate to what a Reynard needed and what it took to make a Reynard work, and it took a long time to kind of break some habits and try to focus my attention to somewhere else on the car to make the car work. And I think that by the end of the year we started to understand that and performance came. Knowing that now and with the new car that's coming and the changes that we've made with some of the aerodynamic stuff, I think that the car is -- I think I'll be able to get more suited to the car and obviously be able to qualify better. And that's the main thing is qualifying, if you can be up front you can run at the front.

BARRY GREEN: I don't know the breakdown of Honda and Firestone. That will depend on how everything is going with Honda and with Firestone. We'll do 50 days between the two drivers, 50 car days with the two drivers over the season. And then on the Indy Lights side -- we'll do probably at least 30 days on the Indy Lights side, we just test as much as we can without hurting preparation for the next race.

JOHNNY: Obviously, this season has been very difficult for me and I'm hoping that this will relaunch my career. Up until last season, I had won every championship I'd been in and I don't want next year to be any different. Obviously, I've never driven on an oval before. At Homestead will be my first time; looking forward to that. I don't know how much I'm be looking forward it, but I'm looking forward to it. So this year will be difficult with all the ovals but I do think a good finish in the championships is in the cards and it's in the Top 3, all well and good; and if not, obviously have to try for the following year and build on what we've got this year. And that's what I want to do. America seems to be the place to be at the moment, although everybody has a dream of getting into Formula One, and Champ Car is an excellent series and the Indy Lights seems to be a good progression to that.

BARRY GREEN: Well, Ron, I think we went into this last year thinking we could make a run for the championship. While we got off to a fast start we didn't get off to a strong start. We didn't score the points on race day. And we were fast. We were fast in every race with both cars. It was very, very frustrating. I mean, you can be fast -- and not winning races, is hard. When you're slow and not winning races, at least you can go back to work and try and figure out how to get some speed out of the cars and the drivers and get up to the front. But we were fast, and we just couldn't quite get the job done. And we made a couple of mistakes in the pit crew. The drivers made a couple of mistakes. It was very frustrating in the first half of the season, and it was also a point where the team could have changed its plan and stopped believing in themselves, and in this case we kept talking and convincing ourselves and our team members that were doing the right thing and going about it the right way. And we just stuck to our plan and it all turned around for us and we proved in the last half of the season how strong we can be. And I think it's great going into next season. We've made very, very few changes. We've just add a few weapons to the team and looking forward to next year.

BERT KREMER: I didn't catch the first part of the question.

BERT KREMER: Well, practically speaking, winning always makes it a little bit easier. There's no doubt about it. But we've had -- always, from the day we entered into our first agreement with Barry Green, confidence that we would get to that level and that we would get there reasonably quick. And I think you have to remember as a sponsor in this sport, really, 1998. As far as our sponsorship of a champ car team, it's only the second year that we've been in the sport. And only two years -- to get the wins that we got in our second year I think is a tremendous accomplishment for us.

BERT KREMER: Obviously, we, like any of the sponsors and has Andrew has echoed we would prefer to be back at the Indianapolis 500 racing there, under the right conditions. But, by the same token we're quite happy with the Champ Car Series. Champ Car Series is a very popular series and it's a growing series, a very professional series. And I think like the series, we keep our eye on what the series does because what's where we are at this point in time. If the Indianapolis comes back on stream in the future, so much the better.

BARRY GREEN: We haven't sat down and decided what we'll do for that first race. We do know that Paul won't be driving in that race. He didn't finish that race last year; so I don't see that it really is going to hurt his chance from the championship. He'll start the second race in the same positioning. We real don't really know what the answer is yet. We've been very, very busy putting this program together finalizing some of the new crew members and the wind tunnel program and working hard on our off-season testing which is very, very important for the start of the next season; so we need to sit down and face that issue here in the near future.

BARRY GREEN: He's going to change Dario's right front.

PAUL TRACY: Obviously, I will be at the race. Obviously, I'm not pleased with what the outcome is and I'll be there. I'll be out there to support the team and try to help out as much as I can. My feeling -- towards the championship I think that one race for me -- it will be a 19 race-schedule and still present a lot of opportunity. There's people that are going to have DNF. That obviously will happen to drivers. So I don't think it's going to hurt my championship. It's just going to have to make us work a little harder than everybody else and have myself work a little harder than the rest of the guys out there, and that's what it takes to win a championship. And if we can achieve that, then we can say that we won a championship with one less race than everybody.

BARRY GREEN: I think it's very, very important. Had a very strong team this year but while I wouldn't admit it at the start of the season I do think we were weak at the start of the season knowing, certainly, in Paul's case getting down to the Reynard (inaudible). But really just the people, that's what was missing in the first half of the season. We won't have that problem this year. Really just added a few people. No major changes whatsoever. So everyone knows where there driver suit is and where the helmet is and who the people are working on the team. That doesn't by any means say that we'll be relaxing in the off-season. The off-season is so important in the preparation for the first race. All the guys, I think, on the team well know that the job they did this year to win races won't win races next year. And you've got to look at the big picture and focus on that championship and make sure that we come away in the first three or four races. I'm very, very pleased with last year, just frustrated in the first half and couldn't be more happier with the two drivers that we've got. I think we'll do well.