ITEM 1. BUSINESS
GENERAL
International Speedway Corporation (together with its wholly-owned subsidiaries, "ISC" or the "Company" unless otherwise required by the context), a leading promoter of motorsports activities in the United States, owns and/or operates five of the nation's premier motorsports facilities--Daytona International Speedway in Florida; Talladega Superspeedway in Alabama; Phoenix International Raceway in Arizona; Darlington Raceway in South Carolina; and the Watkins Glen International road course facility in upstate New York. Other motorsports interests include the operation of Tucson Raceway Park in Arizona, a 45% indirect interest in the operations of the Miami Homestead Speedway in Miami, Florida and an approximately 12% indirect interest in Penske Motorsports, Inc. The Company currently promotes over 80 stock car, sports car, truck, motorcycle and other racing events annually, including eight NASCAR Winston Cup Series championship point races, two Winston Cup Series non-championship point events, five Busch Grand National Series races, the premier sports car endurance event in the United States (the Rolex 24 at Daytona) and a number of prestigious motorcycle races. The Company also owns and operates MRN Radio, the nation's largest independent sports radio network, and DAYTONA USA--The Ultimate Motorsports Attraction, a motorsports-themed entertainment complex that includes interactive media, theaters, historical memorabilia, exhibits and tours of Daytona International Speedway. In fiscal 1998, NASCAR-sanctioned races at the Company's facilities accounted for approximately 79% of the Company's total revenues.
DEVELOPMENTS DURING FISCAL 1998
During fiscal 1998, the Company continued to expand and enhance its existing facilities. The Company added approximately 41,800 grandstand seats, growing the Company's seating capacity by approximately 11%. In addition to grandstand seating, 43 luxury suites were added at the Company's superspeedways. This 43 percent increase in luxury suites includes 28 "Superstretch" additions at Daytona, marking the first time that suites have been added on the famed backstretch of the historic facility. The Company also completed the $5.8 million track lighting project at Daytona that permits night racing events.
In March 1998, the Company sold its entire equity interest in Grand Prix Association of Long Beach, Inc., for approximately $5.3 million. The Company recorded a gain of approximately $1.2 million from the sale. The after tax impact of this transaction was a gain of approximately $850,000.
In May 1998, the Company entered into a five-year unsecured, $100 million revolving line of credit facility (the "Credit Facility"). The Credit Facility is intended to be used for short-term working capital and to finance the development and/or acquisition of additional motorsports facilities. There were no borrowings under the Credit Facility at November 30, 1998.
In July 1998, the Company announced the postponement of the NASCAR Winston Cup Series Pepsi 400 at Daytona from July 4, 1998 to October 17, 1998 as a result of the nationally publicized forest fire emergency throughout the state of Florida. This resulted in event-related revenues and expenses being recognized in the fourth quarter of fiscal 1998, compared to the third quarter of fiscal 1997. Despite the postponement and rescheduling of the 1998 Pepsi 400 at Daytona, the event marked the first ever NASCAR Winston Cup Series event run under the new lights at Daytona and the first sellout of that event since its inception.
During July of 1998, the Company sold an additional 4,600,000 shares of Class A Common Stock in a primary offering, including the Underwriters' over- allotment, at a price to the public of $27.00. The net proceeds to the Company were approximately $117.7 million, after deduction of underwriting discounts and commissions and expenses of the offering. As of November 30, 1998, the Company had used approximately $24.4 million of the net proceeds for the acquisition of land and preliminary construction related to Kansas International Speedway and designated an additional $53.5 million for the further funding of its investment in that facility. The Company intends to use the remaining net proceeds to partially fund completion of additions and improvements to the Company's existing motorsports facilities, and for working capital and other corporate purposes, including the pursuit of further expansion opportunities.
As noted above, the Company continued to pursue the development of Kansas International Speedway during fiscal 1998. An agreement was formed between the Company and the Unified Government of Wyandotte County/Kansas City, Kansas ("Unified Government") for the construction of a 1.5-mile oval motor speedway near Kansas City, Kansas. The aggregate cost of acquiring and developing the first phase of Kansas International Speedway (which will accommodate approximately 75,000 spectators) is estimated to be approximately $224 million, which will be financed through a variety of mechanisms and government incentives. See "Managements' Discussion and Analysis - Future Liquidity".
During the year the Company continued to explore potential locations for development of a motorsports facility in the Chicago area through the Motorsports Alliance (owned 50% by the Company and 50% by Indianapolis Motor Speedway). Subsequent to year end, the Motorsports Alliance announced that the City Council of Joliet, Illinois had approved plans to build a 1.5-mile oval superspeedway on land contiguous to the existing Route 66 Raceway. The aggregate cost of acquiring the approximately 930 acres and developing the facility (which will accommodate approximately 75,000 spectators) is estimated to be $100 million.
OPERATIONS
The Company's operations consist principally of racing events at its six tracks. The Company also owns a 45% indirect interest in the operations of the Miami Homestead Speedway in Florida and an approximately 12% indirect interest in Penske Motorsports, Inc. In addition, the Company owns and operates the DAYTONA USA motorsports-themed entertainment complex, provides catering, merchandising and concession services at certain of its facilities through its wholly-owned subsidiary, Americrown Service Corporation ("Americrown"), and operates two radio networks--MRN Radio and the NASCAR Truck Network (collectively "MRN Radio").
Approximately $149 million, or 79%, of the Company's fiscal 1998 revenues were attributable to NASCAR-sanctioned races at the Company's facilities, including applicable admissions, luxury suite rentals, sponsorship, television and MRN Radio broadcast rights fees, food and beverage concession and catering, souvenir, advertising and other revenues.
The Company's fiscal 1998 revenues that were not attributable to NASCAR-sanctioned races at the Company's facilities were derived from a number of sources, including (i) admission and luxury suite rental revenue from racing events sanctioned by bodies other than NASCAR, (ii) admissions and sponsorship fees attributable to DAYTONA USA, (iii) MRN Radio's revenues from the sale of advertising and rights fees paid by broadcast affiliates with respect to events other than NASCAR-sanctioned races at the Company's facilities, (iv) merchandising, food and beverage revenues from the gift shop and snackbar adjacent to DAYTONA USA, (v) Americrown's catering, merchandising and concession revenues for the Company's non-NASCAR racing events, (vi) broadcast and sponsorship fees for such non-NASCAR racing events, and (vii) other revenues unrelated to racing events such as hangar rentals and gas sales at the Talladega Municipal Airport. None of the foregoing non-NASCAR revenue sources accounted for over 5% of the Company's fiscal 1998 revenues.
RACING EVENTS
The 1998 race schedule for the Company included eight NASCAR Winston Cup Series races (not including the Bud Shootout at Daytona all star event or the Gatorade 125s qualifying races for the Daytona 500), five NASCAR Busch Series - - Grand National Division races and approximately 50 other NASCAR races and events. In addition, in fiscal 1998 the Company promoted over 20 other stock car, sports car, motorcycle and go-kart racing events, including events sanctioned by the United States Road Racing Championship ("USRRC"), the Automobile Racing Club of America ("ARCA"), the Indy Racing League ("IRL"), the United States Auto Club ("USAC"), the Sports Car Club of America ("SCCA"), the American Motorcyclist Association ("AMA"), the World Karting Association ("WKA"), the Championship Cup Series ("CCS"), the American Historic Racing Motorcycle Association ("AHRMA"), Historic Sportscar Racing ("HSR"), and the Sportscar Vintage Racing Association ("SVRA").
Racing events compete not only with other sports and other recreational events scheduled at the same dates, but with other racing events sanctioned by various racing bodies such as NASCAR, IRL, Championship Auto Racing Teams, Inc. ("CART"), USAC, SCCA, USRRC, ARCA and others. Racing events sanctioned by different organizations are often held on the same dates at separate tracks. Management believes that the type and caliber of promoted racing events, facility location, sight lines, pricing and level of customer conveniences are the principal factors that distinguish competing motorsports facilities.
OTHER OPERATIONS
MIAMI HOMESTEAD SPEEDWAY. In July 1997, the Company acquired a 40% indirect interest in the operations of the Miami Homestead Speedway located south of Miami, Florida. The Company increased its stake to 45% in March 1998. The Miami facility has a 1.5 mile oval racing track on 320 acres of leased property. The state-of-the-art facility has grandstands that seat approximately 36,000 spectators, 50 suites containing an additional 2,260 seats, and temporary seating for approximately 5,700 additional persons. The Miami facility was the site of a number of significant racing events in 1998, including the Grand Prix of Miami (a CART event) and a NASCAR Busch Series - Grand National Division event. In addition, the facility was recently awarded a NASCAR Winston Cup Series event to be held in November 1999.
PENSKE MOTORSPORTS. The Company beneficially owns an approximately 12% indirect interest in Penske Motorsports, Inc. ("PMI"), a publicly traded promoter and marketer of motorsports events. PMI owns and operates The California Speedway near Los Angeles, California, Michigan International Speedway in Brooklyn, Michigan, North Carolina Motor Speedway in Rockingham, North Carolina and Nazareth Speedway in Nazareth, Pennsylvania. Major racing events promoted by Penske Motorsports in 1998 included five NASCAR Winston Cup
Series races, five NASCAR Busch Series - Grand National Division races and three Champ Car races sanctioned by CART. Two of the Company's directors serve on the Board of Directors of Penske Motorsports.
DAYTONA USA. The Company's DAYTONA USA--The Ultimate Motorsports Attraction motorsports-themed entertainment complex is located adjacent to the Daytona International Speedway. DAYTONA USA includes (i) the Velocitorium, which covers approximately 50,000 square feet, stands nearly four stories high and contains numerous highly interactive motorsports exhibits, many of which are sponsored by leading consumer brands; (ii) Speedway Tours, a tram tour of the Daytona International Speedway's garage area, pit road and high banked track; (iii) the Richard Petty Riding Experience at Daytona; and (iv) for groups of fifteen or more, the VIP Tour, which includes a tour of the Winston Tower. Adjoining DAYTONA USA are (a) the Daytona Beach Area Convention and Visitors Official Welcome Center; (b) the Daytona ticket office; (c) a high tech arcade using state of the art video technology and computerized, "virtual" racing simulators; (d) the Pit Shop, which sells DAYTONA USA, Daytona International Speedway, NASCAR and race team clothing, books, collectibles and other officially licensed merchandise; and (e) the Fourth Turn Grill concessions facility. Management believes that DAYTONA USA and these adjoining facilities appeal to individual tourists, tour groups, conventions and the Company's corporate sponsors, thereby (i) increasing the use of the Company's Daytona facility, (ii) expanding the Company's concessions and souvenir sales, and (iii) providing greater visibility for the Company's business and motorsports generally, which in turn is expected to increase spectator interest.
MRN RADIO. MRN Radio, which includes the NASCAR Truck Network, produces and syndicates NASCAR Winston Cup Series, NASCAR Busch Series - Grand National Division, Craftsman Truck Series and other races promoted by the Company and others. These networks also produce daily and weekly NASCAR racing programs. Network radio programs are currently carried by over 600 radio stations. The Company derives revenue from the sale of advertising on the networks and rights fees paid by broadcast affiliates. In addition, management believes that MRN Radio and the NASCAR Truck Network enhance the Company through increased media exposure to an expanding radio audience.
AMERICROWN. The Company's Americrown subsidiary conducts the food, beverage and souvenir concession operations at Daytona, Talladega and Darlington. Americrown also provides catering services to corporate customers both in suites and entertainment chalets at these facilities and at Miami.
Americrown was formed in 1989 to conduct concessions operations as part of the Company's ongoing efforts to enhance race spectators' total entertainment experience.
OTHER ACTIVITIES
The Company from time to time uses its track facilities for car shows, auto fairs, vehicle testing and settings for television commercials, print advertisements and motion pictures. For example, Harley Davidson uses Talladega Superspeedway as a test facility for its motorcycles. The Company also operates Talladega Municipal Airport, which is located adjacent to the Talladega Superspeedway.
As of November 30, 1998, the Company had approximately 440 full-time employees. The Company also engages a significant number of temporary personnel to assist during periods of peak attendance at its events. For example, the Daytona International Speedway engages approximately 2,500 persons during Speedweeks, some of whom are volunteers. None of the Company's
employees are represented by a labor union. Management believes that the Company enjoys a good relationship with its employees.
ITEM 2.
ITEM 2. PROPERTIES
MOTORSPORTS FACILITIES
The following table sets forth certain information relating to each of the Company's speedway facilities.
- - ---------------- *At November 30, 1998 and consisting of seating in grandstands and luxury suites (excludes infield admission).
DAYTONA INTERNATIONAL SPEEDWAY. The Daytona International Speedway is a high banked, asphalt superspeedway which also includes a 3.6 mile road course. Management believes that this superspeedway, completed in 1959, includes a number of unique features that provide a significant competitive advantage, including (i) a tri-oval design which provides optimum viewing for race fans, (ii) a twin tunnel underground entry system which offers easy access to the infield before and during events, and (iii) 31-degree banking which, when combined with the track's 2.5 mile length, permits exceptionally high lap speeds. Daytona International Speedway is located on approximately 440 acres of leased land in Daytona Beach, Florida. The Company's lease with the Daytona Beach Racing and Recreational Authority expires in 2032, including renewal options. The Company also owns approximately 15 acres of property adjacent to the Daytona International Speedway. The Company has recently completed a $5.8 million track lighting project that will permit night racing events, which included The Pepsi 400 at Daytona in October 1998.
At November 30, 1998, Daytona International Speedway had 142,295 grandstand seats, 66 suites (including air conditioned luxury sky boxes and Winston Tower suites that include access to hospitality areas) that include a total of 3,528 additional seats, and 40 "Paddock Club" suites that provide seating for 2,000 along "Pit Road" in Daytona's infield. During major events, The Company also uses chalet villages and other pre-race hospitality facilities that service approximately 15,000. Pending capital improvement projects include (i) approximately 6,000 premium grandstand seats in the Winston Tower, and (ii) approximately 7,400 seats on the "superstretch", including approximately 3,100 premium seats.
TALLADEGA SUPERSPEEDWAY. Talladega Superspeedway, which holds the record for the fastest lap speed attained in stock car racing, is a high banked, tri-oval track with an infield road course. The facility is located about 90 minutes from Atlanta, Georgia and 45 minutes from Birmingham, Alabama. The track and related parking areas are located on approximately 1,365 acres owned by The Company, most of which is reserved for agricultural uses. The Company also owns an additional 115 acres of undeveloped property located immediately north of the entrance to the Talladega track. At November
30, 1998, the facility included 119,022 grandstand seats, 30 luxury suites containing an additional 2,040 seats, a Paddock Club Suite for up to 244 spectators, and pre-race hospitality chalets providing service for approximately 10,000. The facility also includes a 400-acre campground facility, the International Motorsports Hall of Fame owned by the State of Alabama and hospitality and souvenir villages. Pending capital improvement projects include (i) additional grandstand seating for approximately 10,000 spectators, (ii) renovation of the facility's hospitality village and garage area, and (iii) the purchase of an additional 630 acres of land.
PHOENIX INTERNATIONAL RACEWAY. The Phoenix International Raceway motorsports complex is located near Phoenix, Arizona on 440 acres owned by The Company. The complex, which was acquired by The Company in July 1997, has a 1- mile oval racing surface and a 1.5 mile road course. At November 30, 1998, the facility included 70,770 grandstand seats and 31 suites that provide seating for an additional 1,772 spectators. Pending capital improvement projects include (i) additional grandstand seating for approximately 6,000 spectators, (ii) the purchase of an additional 320 acres of land, and (iii) a variety of other facility improvements.
DARLINGTON RACEWAY. Darlington Raceway, the first superspeedway to host a NASCAR-sanctioned race, is a high banked track located on approximately 230 acres owned by The Company. The Darlington facility includes the 1.3 mile, "egg shaped" oval track commonly known as "too tough to tame," grandstands that seat 54,419 spectators, ten luxury suites containing an additional 962 seats and pre-race hospitality chalets providing service for approximately 4,700. Pending capital improvement projects include additional grandstand seating for approximately 4,500 spectators.
WATKINS GLEN INTERNATIONAL. Watkins Glen International includes 3.4 mile and 2.4 mile road course tracks located on approximately 1,377 acres owned by The Company. The Watkins Glen International facility includes grandstands that seat 35,244 spectators, five suites containing an additional 640 seats and pre-race hospitality chalets providing service for approximately 8,900. Additional temporary seating for approximately 3,000 spectators was added for the NASCAR Winston Cup Series event held in August 1998. Pending capital improvement projects include (i) extensive track paving, and (ii) a variety of other facility improvements.
TUCSON RACEWAY PARK. Tucson Raceway Park includes a progressively banked, 3/8 mile paved oval track, grandstands providing seating for 5,372 spectators, a luxury suite and other spectator facilities located on part of the Pima County Fairgrounds. The Company's sublease with the fairground manager expires in 2013, including renewals. The Company has no current plans to expand this facility.
OTHER FACILITIES. The Company's 67,000 square foot corporate headquarters, acquired and renovated in fiscal 1997, is located on approximately nine acres across International Speedway Boulevard from Daytona International Speedway. The Company also owns approximately 14 acres of real property (including three buildings containing an aggregate of approximately 180,000 square feet) located in close proximity to Daytona International Speedway and The Company's corporate headquarters, as well as concession facilities in Daytona Beach and in Talladega. In addition, The Company leases real estate and office space in Talladega, and the property and premises at the Talladega Municipal Airport. The lease for The Company's Talladega business offices, located within the International Motorsports Hall of Fame, expires in 2002, including renewals. The Company's lease for the Talladega Municipal Airport expires in 2022, including renewals. The Company's wholly- owned subsidiaries ISC Properties and Kansas International Speedway
Corporation lease administrative office space in Charlotte, North Carolina and Kansas City, Kansas, respectively.
TRADEMARKS. The Company has various registered and common law trademark rights, including "DAYTONA USA," the "Daytona 500," "Daytona International Speedway," "Talladega Superspeedway," "Darlington," "World Center of Racing," "Watkins Glen International," "Phoenix International Raceway" and related logos. The Company also has licenses from NASCAR, various drivers and other businesses to use names and logos for merchandising programs and product sales. Management's policy is to protect its intellectual property rights vigorously, through litigation if necessary, chiefly because of their proprietary value in merchandise and promotional sales.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
The Company is from time to time a party to routine litigation incidental to its business. Management does not believe that the resolution of any or all of such litigation is likely to have a material adverse effect on the Company's financial condition or results of operations. In addition to such routine litigation incident to its business the Company faces exposure from other legal proceedings as described below.
The Company's indirect corporate subsidiary, Americrown Service Corporation ("Americrown"), is the sole defendant in a class action proceeding in the Circuit Court of Talladega County, Alabama which was filed in October 1996. The plaintiffs allege, among other things, that Americrown engaged in price-fixing activities in connection with the sale of racing souvenirs and merchandise at the Talladega Superspeedway. The suit seeks to recover at least $500 for each member of the class but does not otherwise seek to recover compensatory or punitive damages or statutory attorneys' fees. A class consisting of persons who purchased racing souvenirs at Talladega Superspeedway since September 1992 was certified on July 30, 1998 by the court. Americrown has moved for reconsideration and intends to appeal the ruling to the Alabama Supreme Court. Americrown disputes the allegations and intends to defend the action fully and vigorously.
In March 1997, two purported class action companion lawsuits were filed in the United States District Court, Northern District of Georgia, against the Company, Americrown, and a number of other persons alleging, in substance, that the defendants unlawfully conspired to fix prices of souvenirs and merchandise sold to consumers in violation of federal antitrust laws. One suit was filed by Florida residents and the other suit was filed by Georgia residents. Both suits seek damages and injunctive relief on behalf of all persons who purchased souvenirs or merchandise from certain vendors at any NASCAR Winston Cup race or supporting event in the United States during the period 1991 to present. The two suits have been consolidated and the court is considering class certification. Discovery has been concluded. The Company and Americrown dispute the allegations and intend to defend the actions fully and vigorously.
Management is presently unable to predict or quantify the outcome of these matters
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted during the fourth quarter of the fiscal year covered by this report to vote of security holders.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
At November 30, 1998 International Speedway Corporation had two issued classes of capital stock: Class A Common Stock, $.01 par value per share and Class B Common Stock, $.01 par value per share. The Class A Common Stock is traded on the NASDAQ National Market System under the symbol "ISCA". The Class B Common Stock is traded on NASDAQ's Over-The-Counter Bulletin Board under the symbol "ISCB" and, at the option of the holder, is convertible to Class A Common Stock at any time. As of November 30, 1998 there were approximately 2,800 record holders of both classes of stock.
The reported high and low sales prices or high and low bid information as applicable for each quarter indicated are as follows:
- - ---------------- (1) ISCB quotations were obtained from the OTC Bulletin Board and represent prices between dealers and do not include mark-up, mark-down or commission. Such quotations do not necessarily represent actual transactions.
DIVIDENDS
Annual dividends of 6 cents per share were declared in the quarter ending in May and paid in June in fiscal years 1997 and 1998 on all classes of common stock which existed at the time.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
For comparability, certain prior period results have been reclassified to conform to the presentation adopted in fiscal 1998. The following selected financial data should be read in conjunction with the Company's Consolidated Financial Statements, including the notes thereto, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this Report.
- ----------------------
(1) The Company changed its fiscal year end to November 30 effective December 1, 1996. This resulted in a three-month transition period commencing September 1, 1996 and ending November 30, 1996. The unaudited results of the 12-month period November 30, 1996 are presented for the purpose of comparison to the fiscal year ended November 30, 1997.
(2) Earnings per share amounts prior to 1998 have been restated as required to comply with Statement of Financial Accounting Standards No. 128. See Note 1 of Notes to the Company's audited financial statements.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL
The Company derives revenues primarily from (i) admissions to racing events and motorsports activities held at its facilities, (ii) revenue generated in conjunction with or as a result of motorsports events conducted at the Company's facilities, and (iii) catering, concession and souvenir sales made during or as a result of such events and activities.
"Admissions" revenue includes ticket sales from all of the Company's events and DAYTONA USA's Track Tour and Velocitorium. Admissions revenue for racing events is recorded upon completion of the related motorsports event.
"Motorsports related income" primarily includes television and radio broadcast rights fees, promotion and sponsorship fees, hospitality rentals (including luxury suites and chalets), advertising revenues, royalties from licenses of the Company's trademarks and track rentals. The Company negotiates directly with television and cable networks for coverage of substantially all of its televised motorsports events. The Company's revenues from corporate sponsorships are paid in accordance with negotiated contracts, with the identities of sponsors and the terms of sponsorship changing from time to time.
"Food, beverage and souvenir income" includes revenues from concession stands, hospitality catering and direct sales of souvenirs, programs and other merchandise, as well as fees paid by third party vendors for the right to sell souvenirs and concessions at the Company's facilities.
Expenses include (i) prize and point fund monies and NASCAR sanction fees, (ii) motorsports related expenses, which include costs of competition paid to sanctioning bodies other than NASCAR, labor, advertising and other expenses associated with the Company's promotion of its racing events, and (iii) food, beverage and souvenir expenses, consisting primarily of labor and costs of goods sold.
The following table sets forth, for each of the indicated periods, certain selected income statement data as a percentage of total revenues:
IMPACT OF THE YEAR 2000
The Year 2000 issue is the result of computer programs and other business systems being written using two digits rather than four to represent the year. Many of the time sensitive applications and business systems of the Company and its business partners may recognize a date using "00" as the year 1900 rather than the year 2000, which could result in system failure or disruption of operations. The Year 2000 problem will impact the Company and its business partners.
An assessment of the Year 2000 exposure related to information technology systems has been made and the plans to resolve the related issues are being implemented. Most major information technology systems have already been updated or replaced with applications that are Year 2000 compliant in the normal course of business. The Company believes it will be able to achieve Year 2000 readiness with regard to information technology systems during fiscal 1999.
The Company suspects that some of its non-information technology systems, such as exhibit controllers, elevators, heating and air-conditioning systems, etc., with date sensitive software and embedded microprocessors may be affected, and evaluation is underway. Preliminary estimates of the costs of correcting or replacing critical non-information technology systems indicate that these costs will not be material.
The Company has also developed a plan of communication with significant business partners to identify and minimize disruptions to the Company's operations resulting from the Year 2000 issue. There can be no certainty that the computer programs and business systems of third parties on which the Company relies will not have an adverse effect on the Company's operations. However, because of the nature of its business, the Company believes at this time that a failure of the Company's vendors, sponsors or customers to resolve issues involving the Year 2000 problem will not be material.
The Company anticipates completing substantially all of its Year 2000 preparation during fiscal 1999. In the event the Company falls behind on its timetable for achieving Year 2000 compliance, additional internal resources will be focused on completing critical projects and developing contingency plans. The Company at this time believes that it will satisfactorily resolve all significant Year 2000 problems. Preliminary estimates of costs to correct the identified potential problems related to the Year 2000 indicate that these costs will not exceed $500,000. Estimates of Year 2000 related costs are
based on numerous assumptions, including the continued availability of certain resources, the ability to correct all relevant information and non-information technology systems and third party modification plans. There is no guarantee that the estimates will be achieved and actual costs could differ materially from those anticipated.
FACTORS THAT MAY AFFECT OPERATING RESULTS
Statements contained in this document that state the Company's or Management's anticipations, beliefs, expectations, hopes, intentions, predictions and/or strategies which are not purely historical fact or which apply prospectively are "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21 of the Securities Exchange Act of 1934. All forward-looking statements contained in this document are based on information available to the Company on the date hereof, and the Company assumes no obligation to update any such forward-looking statements. It is important to note that the Company's actual results could differ materially from those contained or projected in, or even implied by, such forward-looking statements. Some of the factors that could cause the actual results to differ materially are set forth below. Additional information concerning these, or other, factors which could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company's other SEC filings. Copies of those filings are available from the Company and/or the SEC.
DEPENDENCY UPON NASCAR
The Company's success has been and will remain dependent upon maintaining a good working relationship with NASCAR, the sanctioning body for NASCAR's Winston Cup Series, the Busch Series - Grand National Division and certain other races promoted by the Company. The Company has sanctioning agreements to promote and market eight NASCAR Winston Cup Series championship point races, two NASCAR Winston Cup Series non-championship point races, five NASCAR Busch Series - Grand National Division races and a number of other NASCAR races for the 1998 racing season. Each NASCAR event sanctioning agreement is awarded on an annual basis. In fiscal 1998, NASCAR-sanctioned races at the Company's facilities accounted for approximately 79% of the Company's total revenues. Although William C. France and James C. France presently control both the Company and NASCAR and management believes that the Company will continue to maintain an excellent relationship with NASCAR for the foreseeable future, NASCAR is under no obligation to continue to enter into sanctioning agreements with the Company to promote any event. Failure to obtain a sanctioning agreement for a major NASCAR event would have a material adverse effect on the Company's financial condition and results of operations. Moreover, although the Company's general growth strategy includes the possible development and/or acquisition of additional motorsports facilities, there can be no assurance that NASCAR will enter into sanctioning agreements with the Company to promote races at such facilities.
DEPENDENCE ON KEY PERSONNEL
The Company's continued success will depend upon the availability and performance of its senior management team, particularly William C. France, the Company's Chairman of the Board and Chief Executive Officer, James C. France, its President and Chief Operating Officer, and Lesa D. Kennedy, its Executive Vice President (collectively the "France Family Executives"), each of whom possesses unique and extensive industry knowledge and experience. While the Company believes that its senior management team has significant depth, the loss of any of the Company's key personnel or its inability to attract and retain key employees in the future could have a material adverse effect on the Company's operations and business plans.
UNCERTAIN PROSPECTS OF NEW MOTORSPORTS FACILITIES
The Company's growth strategy includes the potential acquisition and/or development of new motorsports facilities, including the proposed Kansas International Speedway and the possible development of a motorsports facility near Chicago, Illinois. The Company's ability to implement successfully this element of its growth strategy will depend on a number of factors, including (i) the Company's ability to obtain one or more additional sanctioning agreements to promote NASCAR Winston Cup, NASCAR Busch Series - Grand National Division or other major events at these new facilities, (ii) the cooperation of local government officials, (iii) the Company's capital resources, (iv) the Company's ability to control construction and operating costs, (v) the Company's ability to hire and retain qualified personnel and (vi) with respect to the proposed Kansas International Speedway, the resolution of certain pending litigation. The Company's inability to implement its expansion plans for any reason could adversely affect its business prospects. In addition, expenses associated with developing, constructing and opening a new facility may have a negative effect on the Company's financial condition and results of operations in one or more future reporting periods. The cost of any such transaction will depend on a number of factors, including the facility's location, the extent of the Company's ownership interest and the degree of any municipal or other public support. Moreover, although management believes that it will be able to obtain financing to fund the acquisition, development and/or construction of additional motorsports facilities should the Company implement this element of its growth strategy, there can be no assurance that adequate debt or equity financing will be available on satisfactory terms.
INDUSTRY SPONSORSHIPS AND GOVERNMENT REGULATION
The motorsports industry generates significant recurring revenue from the promotion, sponsorship and advertising of various companies and their products. Actual or proposed government regulation can adversely impact the availability to motorsports of this promotion, sponsorship and advertising revenue. Advertising by the tobacco and alcoholic beverage industries is generally subject to greater governmental regulation than advertising by other sponsors of the Corporations's events. Since August of 1996 there have been several thus far unsuccessful governmental attempts to impose restrictions on the advertising and promotion of cigarettes and smokeless tobacco, including sponsorship of motorsports activities. These regulatory efforts if successfully implemented would have prohibited the present practice of tobacco brand name sponsorship of, or identification with, motorsports events, entries and teams. At this point the ultimate outcome of these or future government regulatory and legislative efforts to regulate the advertising and promotion of cigarettes and smokeless tobacco is uncertain and the impact, if any, on the motorsports industry is unclear. Recently major United States companies engaged in the manufacture of cigarettes and smokeless tobacco (collectively the "tobacco industry") entered into various agreements with the Attorneys General of all 50 states to settle certain state initiated litigation against the tobacco industry. These settlement agreements will, among other things, place limits upon the sponsorship of motorsports activities by the tobacco industry. The actual impact of these settlement agreements upon the Company's future revenues has not yet been determined. Even more recently the executive branch of the United States government has publicly stated its intention to initiate certain litigation against the tobacco industry which would be similar to that initiated by the states which was recently settled. The exact parameters of the proposed litigation and the impact, if any, of this proposed litigation upon the Company's future revenues is presently unclear.
The Company is not aware of any proposed governmental regulation which would materially limit the availability to motorsports of promotion, sponsorship or
advertising revenue from the alcoholic beverage industry. The combined advertising and sponsorship revenue from the tobacco and alcoholic beverage industries accounted for approximately 1.5% and 1.6% of the Company's total revenues in fiscal 1997 and fiscal 1998, respectively. In addition, the tobacco and alcoholic beverage industries provide financial support to the motorsports industry through, among other things, their purchase of advertising time, their sponsorship of racing teams and their sponsorship of racing series such as NASCAR's Winston Cup Series and Busch Series - Grand National Division.
LEGAL PROCEEDINGS
The Company and its indirect subsidiary, Americrown Service Corporation, are parties to certain legal proceedings alleging price-fixing activities in connection with the sale of racing souvenirs and merchandise as described in "Part II - Other Information". While the Company and Americrown dispute the allegations and intend to defend the actions fully and vigorously, neither the cost of defending the suits nor the potential damages or other remedies for which the Company and Americrown might be liable is insured. Management is presently unable to predict or quantify the outcome of these matters. But, there can be no assurance the defense of the suits, or a possible adverse resolution, will not require material expenditures by the Company.
POTENTIAL CONFLICTS OF INTEREST
William C. France and James C. France beneficially own all of NASCAR's capital stock, and each of the France Family Executives, the Company's Vice President--Administration, the Company's General Counsel and certain other non-officer employees (collectively the "Shared Employees") devote portions of their time to NASCAR's affairs. Each of the Shared Employees devotes substantial time to the Company's affairs and all of the Company's other executive officers are available to the Company on a full-time basis. In addition, the Company strives to ensure, and management believes, that the terms of the Company's transactions with NASCAR are no less favorable to the Company than those which could be obtained in arms'-length negotiations. Nevertheless, certain potential conflicts of interest between the Company and NASCAR exist with respect to, among other things, (i) the terms of any sanctioning agreements that may be awarded to the Company by NASCAR, (ii) the amount of time devoted by the Shared Employees and certain other Company employees to NASCAR's affairs, and (iii) the amounts charged or paid to NASCAR for office rental, transportation costs, shared executives, administrative expenses and similar items.
COMPETITION
The Company's racing events face competition from other spectator-oriented sporting events and other leisure and recreational activities, including professional football, basketball and baseball. As a result, the Company's revenues will be affected by the general popularity of motorsports, the availability of alternative forms of recreation and changing consumer preferences. The Company's racing events also compete with other racing events sanctioned by various racing bodies such as NASCAR, Championship Auto Racing Teams, Inc. ("CART"), Indy Racing League ("IRL"), the United States Auto Club ("USAC"), the National Hot Rod Association ("NHRA"), the Sports Car Club of America ("SCCA"), the United States Road Racing Championship ("USRRC"), the Automobile Racing Club of America ("ARCA") and others. Management believes that the primary elements of competition in attracting motorsports spectators and corporate sponsors to a racing event and facility are the type and caliber of promoted racing events, facility location, sight lines, pricing and customer conveniences that contribute to a total entertainment experience.
Many sports and entertainment businesses have resources that exceed those of the Company.
IMPACT OF CONSUMER SPENDING ON RESULTS
The success of the Company's operations depends to a significant extent upon a number of factors relating to discretionary consumer spending, including economic conditions affecting disposable consumer income such as employment, business conditions, interest rates and taxation. These factors can impact both attendance at the Company's events and the financial results of the motorsports industry's principal sponsors. There can be no assurance that consumer spending will not be adversely affected by economic conditions, thereby impacting the Company's growth, revenue and profitability.
FINANCIAL IMPACT OF BAD WEATHER
The Company promotes outdoor motorsports events. Weather conditions affect sales of, among other things, tickets, concessions and souvenirs at these events. Although the Company sells tickets well in advance of its most popular events, poor weather conditions could have a material adverse effect on the Company's results of operations, particularly any interruption of the Company's February "Speedweeks" events.
LIABILITY FOR PERSONAL INJURIES
Motorsports can be dangerous to participants and to spectators. The Company maintains insurance policies that provide coverage within limits that management believes should generally be sufficient to protect the Company from material financial loss due to liability for personal injuries sustained by persons on the Company's premises in the ordinary course of Company business. Nevertheless, there can be no assurance that such insurance will be adequate or available at all times and in all circumstances. The Company's financial condition and results of operations would be adversely affected to the extent claims and associated expenses exceed insurance recoveries.
OTHER REGULATORY MATTERS
Management believes that the Company's operations are in substantial compliance with all applicable federal, state and local environmental laws and regulations. Nonetheless, if damage to persons or property or contamination of the environment is determined to have been caused or exacerbated by the conduct of the Company's business or by pollutants, substances, contaminants or wastes used, generated or disposed of by the Company, or which may be found on the property of the Company, the Company may be held liable for such damage and may be required to pay the cost of investigation and/or remediation of such contamination or any related damage. The amount of such liability as to which the Company is self-insured could be material. State and local laws relating to the protection of the environment also include noise abatement laws that may be applicable to the Company's racing events. Changes in the provisions or application of federal, state or local environmental laws, regulations or requirements, or the discovery of theretofore unknown conditions, could also require additional material expenditures by the Company.
In addition, the development of new motorsports facilities (and, to a lesser extent, the expansion of existing facilities) requires compliance with applicable federal, state and local land use planning, zoning and environmental regulations. Regulations governing the use and development of real estate may prevent the Company from acquiring or developing prime locations for motorsports facilities, substantially delay or complicate the
process of improving existing facilities, and/or materially increase the costs of any of such activities.
ITEM 7A.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The Company's interest income and expense are most sensitive to changes in the general level of U.S. interest rates. In this regard, changes in U. S. interest rates affect the interest earned on the Company's cash equivalents and short term investments as well as interest paid on its debt.
The objective of the Company's asset management activities is to provide an adequate level of interest income and liquidity to fund operations and capital expansion, while minimizing market risk. The Company utilizes short term investments consisting of certificates of deposit and obligations of U.S. Government agencies and municipal securities to minimize the interest rate risk. The Company does not believe that its interest rate risk related to its cash equivalents and short term investments is material due to the short term nature of the investments.
The Company does not believe that its interest rate risk related to its debt is material due to the balance of approximately $2.8 million.
Additionally, the Company maintained its certificates of deposit with one financial institution at November 30, 1998. The Company believes that it is not exposed to any significant credit risk on its certificates of deposit due to the strength of the financial institution and the short term nature of the certificates of deposit.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors and Shareholders International Speedway Corporation
We have audited the accompanying consolidated balance sheets of International Speedway Corporation and subsidiaries as of November 30, 1997 and 1998, and the related consolidated statements of income, shareholders' equity and cash flows for the year ended August 31, 1996, the three month period ended November 30, 1996, and the years ended November 30, 1997 and 1998. Our audits also included the financial statement schedule listed in the index at Item 14(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of International Speedway Corporation and subsidiaries at November 30, 1997 and 1998, and the consolidated results of their operations and their cash flows for the year ended August 31, 1996, the three month period ended November 30, 1996 and the years ended November 30, 1997 and 1998, in conformity with generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
Ernst & Young LLP
Jacksonville, Florida January 22, 1999
INTERNATIONAL SPEEDWAY CORPORATION CONSOLIDATED BALANCE SHEETS
See accompanying notes.
INTERNATIONAL SPEEDWAY CORPORATION CONSOLIDATED STATEMENTS OF INCOME
See accompanying notes.
INTERNATIONAL SPEEDWAY CORPORATION CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
See accompanying notes.
INTERNATIONAL SPEEDWAY CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS
See accompanying notes.
INTERNATIONAL SPEEDWAY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOVEMBER 30, 1998
NOTE 1 - DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
DESCRIPTION OF BUSINESS: International Speedway Corporation and its wholly-owned subsidiaries (the "Company") is a leading promoter of motorsports activities in the United States. The Company owns and operates five premier motorsports facilities--Daytona International Speedway ("Daytona"), a 2.5 mile, tri-oval track located in Daytona Beach, Florida; Talladega Superspeedway, a 2.6 mile, tri-oval track located in Talladega, Alabama; Phoenix International Raceway ("Phoenix"), a one mile oval track located outside of Phoenix, Arizona (See Note 3); Darlington Raceway, a 1.3 mile track located in Darlington, South Carolina; and Watkins Glen International ("Watkins Glen"), a 3.4 mile road course located in Watkins Glen, New York (See Note 3). The Company also operates Tucson Raceway Park in Pima County Arizona.
At these facilities the Company promoted over 80 stock car, sports car, truck, motorcycle and other racing events in 1998, including eight NASCAR Winston Cup Series championship point races, two NASCAR Winston Cup Series non-championship point races, five NASCAR Busch Series--Grand National Division races, three NASCAR Craftsman Truck Series races, and a number of prestigious sports car and motorcycle races.
The Company also has investments in other motorsports entertainment companies. The Company holds a 45% interest in Homestead-Miami Speedway, LLC ("Miami"), the operator of the Miami Homestead Speedway. The Company also holds an approximately 12% indirect interest in Penske Motorsports, Inc. ("PMI"), which owns and operates Michigan International Speedway, Pennsylvania's Nazareth Speedway, the California Speedway, and the North Carolina Motor Speedway.
The Company owns and operates DAYTONA USA--The Ultimate Motorsports Attraction, a motorsports theme-entertainment complex that includes interactive media, theaters, historical memorabilia and exhibits and tours of Daytona International Speedway.
Americrown Service Corporation ("Americrown"), one of the Company's wholly-owned subsidiaries, conducts the food, beverage and souvenir concession operations at the Daytona, Talladega and Darlington facilities. Americrown is also responsible for providing catering services to corporate customers both in suites and entertainment chalets at these facilities and at unaffiliated sporting events.
The Company's proprietary MRN radio network and NASCAR Truck Network produces and syndicates NASCAR Winston Cup Series, NASCAR Busch Series--Grand National Division, NASCAR Craftsman Truck Series and other races promoted by the Company and others. MRN Radio also produces daily and weekly NASCAR racing programs.
BASIS OF PRESENTATION: On September 5, 1996 the Company's Board of Directors approved a recapitalization of the Company which became effective November 4, 1996, concurrently with the effectiveness of the Registration Statement filed on September 6, 1996 with the Securities and Exchange Commission in connection with the offering of 4,000,000 shares of the Company's newly authorized Class A Common Stock (discussed below). The recapitalization modified the Company's authorized capital to include one million shares of Preferred Stock, eighty million shares of Class A Common
Stock and forty million shares of Class B Common Stock. Pursuant to the recapitalization, all of the Company's existing outstanding shares of Common Stock were automatically converted, on a 15-for-one basis, into the newly authorized shares of Class B Common Stock and the shares of Common Stock previously held as treasury stock were retired. Shareholders' equity and all share information and per share data have been adjusted to give effect to the recapitalization and related stock split.
Effective December 1, 1996, the Company changed its fiscal year end from August 31 to November 30. This resulted in a three-month transition period commencing September 1, 1996 and ending November 30, 1996.
SIGNIFICANT ACCOUNTING POLICIES:
PRINCIPLES OF CONSOLIDATION: The accompanying consolidated financial statements include the accounts of International Speedway Corporation and its wholly-owned subsidiaries. All material intercompany accounts and transactions have been eliminated in consolidation.
CASH AND CASH EQUIVALENTS: For purposes of reporting cash flows, cash and cash equivalents include cash on hand, bank demand deposit accounts, repurchase agreements and money market accounts at investment firms. Cash and cash equivalents exclude certificates of deposit, obligations of U.S. Government Agencies, U.S. Treasury Notes and U.S. Treasury Bills, regardless of original maturity.
INVESTMENTS (NOTE 4): The Company accounts for investments in accordance with Statement of Financial Accounting Standard (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities."
The Company determines the appropriate classification of investments at the time of purchase and reevaluates such designation as of each balance sheet date. Debt securities are classified as held-to-maturity based on the Company's positive intent and ability to hold the securities to maturity. These securities are stated at cost. Interest and dividends are included in interest income.
Short-term investments consist of certificates of deposit and securities held-to-maturity which are due in one year or less. Certificates of deposit are readily convertible to cash and are stated at cost.
Long-term investments consist of securities held-to-maturity which are due after one year and are stated at cost.
INVENTORIES: Inventories of items for resale are stated at the lower of cost, determined on the first-in, first-out basis, or market.
PROPERTY AND EQUIPMENT: Property and equipment, including improvements to existing facilities, are stated at cost. Depreciation is provided for financial reporting purposes using either the straight-line or accelerated methods over estimated useful lives as follows:
Buildings, grandstands and tracks ......... 5-34 years Furniture and equipment ................... 3-20 years
EQUITY INVESTMENTS (NOTE 2): Equity investments at November 30, 1997, represent a 40% ownership interest in Miami, a 20% ownership interest in PSH Corp (resulting in an approximately 11% indirect interest in PMI) and an approximately 7% interest in Grand Prix Association of Long Beach ("Long Beach"). At November 30, 1998, equity investments represent a 45% interest in Miami and a 20% ownership interest in PSH Corp. (resulting in an approximately
12% indirect interest in PMI). These investments are accounted for using the equity method of accounting. The Company's equity in the net income from equity investments is recorded as income with a corresponding increase in the investment. Dividends received and amortization of the Company's investment in excess of its pro rata share of the underlying assets reduce the investment. The Company's investment in excess of its pro rata share of the underlying assets is amortized by the straight-line method over 20-40 years. The Company recognizes the effects of transactions involving the sale or distribution by an equity investee of its common stock as capital transactions.
GOODWILL (NOTE 3): Goodwill resulting from acquisitions is being amortized by the straight-line method over 40 years. Recoverability of intangibles is assessed using estimated undiscounted cash flows of related operations. The amount amortized for the years ended November 30, 1997 and November 30, 1998, was approximately $382,000 and $1,004,000, respectively.
FAIR VALUE OF FINANCIAL INSTRUMENTS: The Company's financial instruments consist of cash, short- and long-term investments, accounts receivable and accounts payable. The carrying value of these financial instruments approximates their fair value at November 30, 1998.
INCOME TAXES (NOTE 5): Income taxes have been provided using the liability method in accordance with SFAS No. 109, "Accounting for Income Taxes." Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
ADMISSION INCOME AND RACE RELATED REVENUE: Admission income and all race-related revenue is earned upon completion of an event and is stated net of admission and sales taxes collected. Refundable advance ticket sales and all race-related revenue on future events are deferred until earned.
ADVERTISING EXPENSE: Advertising costs are expensed as incurred or, as in the case of race-related advertising, upon the completion of the event. Advertising expense was approximately $1.7 million, $290,000, $2.4 million and $3.8 million for the year ended August 31, 1996, the three months ended November 30, 1996 and the years ended November 30, 1997 and 1998, respectively.
AMORTIZATION OF UNEARNED COMPENSATION (NOTE 11): The Company accounts for its long-term incentive stock plans in accordance with APB 25.
EARNINGS PER SHARE: The Company adopted Statement of Financial Accounting Standards No. 128, "Earnings Per Share", during its first quarter ended February 28, 1998. This statement requires the Company to present "Basic" and "Diluted" earnings per share on the face of the income statement for current periods and to restate earnings per share for prior periods. Weighted average shares outstanding for the periods presented are:
The difference between basic weighted average shares and diluted weighted average shares is related to shares issued under the Company's long-term
incentive stock plans, using the treasury stock method as prescribed by the standard.
USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
NEW ACCOUNTING PRONOUNCEMENTS: In June 1997, SFAS No. 130, "Reporting Comprehensive Income," was issued. SFAS No. 130 establishes standards for the reporting and display of comprehensive income and its components in a full set of general-purpose financial statements and is effective for fiscal years beginning after December 15, 1997. The Company will adopt SFAS No. 130 in the first quarter of fiscal 1999. SFAS No. 130 expands or modifies disclosures and, accordingly, will have no impact on the Company's reported financial position, results of operations or cash flows.
In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information," was issued. SFAS No. 131 establishes standards for the way that public business enterprises report information about operating segments in annual financial statements and reporting selected information about operating segments in interim financial reports and is effective for fiscal years beginning after December 15, 1997. The Company will adopt SFAS 131 in its November 30, 1999 annual financial statements. SFAS 131 expands or modifies disclosures and, accordingly, will have no impact on the Company's reported financial position, results of operations or cash flows.
COMPARABILITY: For comparability, certain 1996 and 1997 amounts have been reclassified where appropriate to conform with the presentation adopted in 1998.
NOTE 2--EQUITY INVESTMENTS
Equity investments includes the following:
During 1998, PMI issued an additional 60,558 shares of common stock in conjunction with the 1997 investment in North Carolina Motor Speedway. The Company recorded an increase in its equity investment of PSH Corp. of approximately $190,000 and recorded a corresponding increase in deferred income taxes and additional paid-in capital of approximately $75,000 and $115,000, respectively.
During 1998 PMI announced plans to repurchase, from time to time, up to $10 million of PMI's common stock in open market transactions. As of the Company's year end, 242,500 shares had been repurchased at prices ranging from $19.875 to $22.50 per share. As a result of these transactions, the Company recorded a reduction in its equity investment of PSH Corp. of approximately $200,000 and recorded a corresponding decrease in deferred income taxes and
additional paid-in capital of approximately $80,000 and $120,000, respectively.
In March of 1998, the Company acquired an additional 5% ownership interest in Miami for approximately $2.8 million, which was substantially financed by a 7.5% interest bearing note, payable on December 31, 2001. The borrower has the option of calling $500,000 of this note on December 31, 2000.
In March, 1998, the Company sold its entire equity interest in Long Beach for approximately $5.3 million. The Company recorded a pre-tax gain of approximately $1.2 million from the sale.
The Company's investment in excess of its share of underlying net assets in equity investments net of amortization amounted to $8.8 million and $8.0 million in 1997 and 1998, respectively. Amortization of the excess over the Company's share of the underlying net assets for the years ended November 30, 1997 and 1998 was approximately $416,000 and $444,000, respectively.
The Company's share of undistributed equity in the earnings from equity investments included in retained earnings at November 30, 1997 and 1998 was approximately $2.3 million and $2.1 million, respectively.
Summarized financial information for the Company's affiliated companies accounted for by the equity method is as follows (in thousands):
NOTE 3--ACQUISITIONS
On April 1, 1997, the Company exercised its contractual option to acquire the 50% interest it did not already own in Watkins Glen from Corning, Inc. for approximately $3.1 million. The transaction price represented the stock's book value at December 31, 1996.
The Company's equity in Watkins Glen's net loss through March 31, 1997 is included in equity in net income from equity investments at November 30, 1997. The acquisition of the additional 50% interest was accounted for under the purchase method. Subsequent to the acquisition on April 1, 1997, Watkins Glen International is accounted for on a consolidated basis.
On July 14, 1997, Phoenix Speedway Corporation, a newly formed wholly-owned subsidiary of the Company, acquired substantially all of the assets comprising the business and motorsports complex known as "Phoenix International Raceway" for consideration consisting of $46.4 million in cash, notes payable of $13.8 million, and related acquisition costs. Interest is being accrued on the note payable to the former principal and shareholder at an annual rate of 9%.
The Phoenix acquisition has been accounted for under the purchase method of accounting, and accordingly, the results of operations have been included in the Company's consolidated statements of income since the date of
acquisition. The purchase price was allocated to the assets and liabilities acquired based on estimated fair values at the acquisition date. The excess of the purchase price over the fair value of the net assets acquired was approximately $40.8 million and was recorded as goodwill. During fiscal 1998, a reduction of the purchase price in accordance with the original purchase agreement resulted in an approximately $469,000 adjustment to goodwill and notes payable.
The following unaudited pro forma financial information presents a summary of consolidated results of operations as if the Phoenix transaction had occurred as of September 1, 1995 after giving effect to certain adjustments, including depreciation, amortization of goodwill, interest income, interest expense on acquisition debt and related income tax effects. The pro forma results have been prepared for comparative purposes only and do not purport to be indicative of what would have occurred had the acquisition been made on that date, nor are they necessarily indicative of results which may occur in the future.
NOTE 4--INVESTMENTS
The following is a summary of short-term, long-term and designated investments:
At November 30, 1998, approximately $53.5 million of short-term investments are designated for the Company's investment in Kansas International Speedway. See Note 14.
The cost and market values of held-to-maturity securities include accrued investment income of approximately $12,000 and $25,000 at November 30, 1997 and 1998, respectively.
The cost and estimated market value of the held-to-maturity securities at November 30, 1998, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because the issuers of certain securities have the right to prepay obligations.
The Company maintained its certificates of deposit with one financial institution at November 30, 1998. The Company believes that it is not exposed to any significant credit risk on its certificates of deposit due to the strength of the financial institution and the short-term nature of the certificates of deposit.
NOTE 5--FEDERAL AND STATE INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Substantially all of the deferred tax liability results from the excess of tax accelerated depreciation over depreciation for financial reporting purposes and from different bases in the equity investments for tax and financial reporting purposes.
Significant components of the provision for income taxes are as follows:
The reconciliation of income tax computed at the federal statutory tax rates to income tax expense is as follows:
NOTE 6 CREDIT FACILITY
In May of 1998, the Company entered into a five-year, unsecured, $100 million revolving line of credit facility. Borrowings under the Credit Facility will bear interest at the applicable LIBOR rate plus 40-80 basis points depending on certain financial criteria. The Credit Facility includes customary representations and warranties, covenants, defaults and conditions. At November 30, 1998 there were no borrowings under the Credit Facility.
NOTE 7--CAPITAL STOCK
The Company's authorized capital includes 80 million shares of Class A Common Stock, par value $.01 ("Class A Common Stock"), 40 million shares of Class B Common Stock, par value $.01 ("Class B Common Stock"), and one million shares of Preferred Stock, par value $.01 (the "Preferred Stock"). The shares of Class A Common Stock and Class B Common Stock are identical in all respects, except for voting rights and certain dividend and conversion rights as described below. Each share of Class A Common Stock entitles the holder to one-fifth (1/5) vote on each matter submitted to a vote of the Company's shareholders and each share of Class B Common Stock entitles the holder to one (1) vote on each such matter, in each case including the election of directors. Holders of Class A Common Stock and Class B Common Stock are entitled to receive dividends at the same rate if and when declared by the Board of Directors out of funds legally available therefrom, subject to the dividend and liquidation rights of any Preferred Stock that may be issued and outstanding. Class A Common Stock has no conversion rights. Class B Common Stock is convertible into Class A Common Stock, in whole or in part, at any time at the option of the holder on the basis of one share of Class A Common Stock for each share of Class B Common Stock converted. Each share of Class B Common Stock will also automatically convert into one share of Class A Common Stock if, on the record date of any meeting of the shareholders, the number of shares of Class B Common Stock then outstanding is less than 10% of the aggregate number of shares of Class A Common Stock and Class B Common Stock then outstanding.
The Board of Directors of the Company is authorized, without further shareholder action, to divide any or all shares of the authorized Preferred Stock into series and fix and determine the designations, preferences and relative rights and qualifications, limitations, or restrictions thereon of any series so established, including voting powers, dividend rights, liquidation preferences, redemption rights and conversion privileges. The
Board of Directors has not authorized any series of Preferred Stock, and there are no plans, agreements or understandings for the authorization or issuance of any shares of Preferred Stock.
No shares of Preferred Stock are outstanding. See also Note 1--Basis of Presentation.
During July of 1998, the Company sold an additional 4,600,000 shares of Class A Common Stock in a primary offering, including the Underwriters' over- allotment, at a price to the public of $27.00. The net proceeds to the Company were approximately $117.7 million, after deduction of underwriting discounts and commissions and expenses of the offering. As of November 30, 1998, the Company had used approximately $24.4 million of the net proceeds for the acquisition of land and preliminary construction related to Kansas International Speedway and designated an additional $53.5 million for the further funding of its investment in that facility. The Company intends to use the remaining proceeds to partially fund completion of additions and improvements to the Company's existing motorsports facilities, and for working capital and other corporate purposes, including the pursuit of further expansion opportunities.
NOTE 8--COMMITMENTS AND CONTINGENCIES
A. In 1985, International Speedway Corporation ("ISC") established a salary incentive plan designed to qualify under Section 401(k) of the Internal Revenue Code. Employees of ISC and certain participating subsidiaries who have completed 1,000 hours and 12 months continuous service are eligible to participate in the plan. Matching contributions are made to a savings trust (subject to certain limits) concurrent with employees' contributions. The level of the matching contribution depends upon the amount of the employee contribution. Employees become 100% vested upon entrance to the plan.
The contribution expense for the plan was approximately $307,000, $85,000, $376,000 and $ 523,000 for the year ended August 31, 1996, for the three month period ended November 30, 1996 and the years ended November 30, 1997 and 1998, respectively.
B. The estimated cost to complete construction in progress at November 30, 1998 for existing facilities is approximately $34.3 million. At November 30, 1998, approximately $53.5 million of short-term investments is designated for the Company's investment in Kansas International Speedway.
C. The Company is from time to time a party to routine litigation incidental to its business. Management does not believe that the resolution of any or all of such litigation is likely to have a material adverse effect on the Company's financial condition or results of operations. In addition to such routine litigation incident to its business the Company faces exposure from other legal proceedings as described below.
The Company's indirect corporate subsidiary, Americrown Service Corporation ("Americrown"), is the sole defendant in a class action proceeding in the Circuit Court of Talladega County, Alabama which was filed in October 1996. The plaintiffs allege, among other things, that Americrown engaged in price-fixing activities in connection with the sale of racing souvenirs and merchandise at the Talladega Superspeedway. The suit seeks to recover at least $500 for each member of the class but does not otherwise seek to recover compensatory or punitive damages or statutory attorneys' fees. A class consisting of persons who purchased racing souvenirs at Talladega Superspeedway since September 1992 was certified on July 30, 1998 by the court. Americrown has moved for reconsideration and intends to appeal the
ruling to the Alabama Supreme Court. Americrown disputes the allegations and intends to defend the action fully and vigorously.
In March 1997, two purported class action companion lawsuits were filed in the United States District Court, Northern District of Georgia, against the Company, Americrown, and a number of other persons alleging, in substance, that the defendants unlawfully conspired to fix prices of souvenirs and merchandise sold to consumers in violation of federal antitrust laws. One suit was filed by Florida residents and the other suit was filed by Georgia residents. Both suits seek damages and injunctive relief on behalf of all persons who purchased souvenirs or merchandise from certain vendors at any NASCAR Winston Cup race or supporting event in the United States during the period 1991 to present. The two suits have been consolidated and the court is considering class certification. Discovery has been concluded. The Company and Americrown dispute the allegations and intend to defend the actions fully and vigorously.
Management is presently unable to predict or quantify the outcome of these matters
NOTE 9--RELATED PARTY DISCLOSURES AND TRANSACTIONS
All of the racing events that take place during the Company's fiscal year are sanctioned by various racing organizations such as the American Historic Racing Motorcycle Association ("AHRMA"), the American Motorcyclist Association ("AMA"), the Automobile Racing Club of America ("ARCA"), the Championship Cup Series ("CCS"), the Federation Internationale de l'Automobile ("FIA"), the Federation Internationale Motocycliste ("FIM"), Historic Sportscar Racing ("HSR"), the International Race of Champions ("IROC"), the Indy Racing League ("IRL"), the National Association for Stock Car Auto Racing, Inc. ("NASCAR"), the Sports Car Club of America ("SCCA"), the Sportscar Vintage Racing Association ("SVRA"), the United States Auto Club ("USAC"), the United States Road Racing Championship ("USRRC"), and the World Karting Association ("WKA"). NASCAR, which sanctions some of the Company's principal racing events, is a member of the France Family Group which controls in excess of 60% of the combined voting power of the outstanding stock of the Company and some members of which serve as directors and officers. Standard NASCAR sanction agreements require racetrack operators to pay sanction fees and prize and point fund monies for each sanctioned event conducted. The prize and point fund monies are distributed by NASCAR to participants in the events. Prize and point fund monies paid by the Company to NASCAR for disbursement to competitors totaled approximately $11.6, $17.0 and $23.1 million for the years ended August 31, 1996, and November 30, 1997 and 1998, respectively. For the three month period ended November 30, 1996, monies paid by the Company to NASCAR for disbursements to competitors totaled approximately $1.1 million.
The Company entered into collateral assignment split-dollar insurance agreements covering the lives of William C. France and James C. France and their respective spouses in October 1995. Pursuant to the agreements, the Company will advance the annual premiums of approximately $1,205,000 each year for a period of eight years. Upon surrender of the policies or payment of the death benefits thereunder, the Company is entitled to repayment of an amount equal to the cumulative premiums previously paid by the Company. The Company may cause the agreements to be terminated and the policies surrendered at any time after the cash surrender value of the policies equals the cumulative premiums advanced under the agreements. The Company records a net insurance expense representing the excess of the premiums paid over the increase in cash surrender value of the policies associated with these agreements. During the years ended November 30, 1997 and 1998, premiums paid were approximately equal to the increase in the cash surrender value of the policies.
Poe & Brown, Inc., the servicing agent for the split-dollar insurance agreements, received a commission from an insurance company for its participation in the transactions. J. Hyatt Brown, President and Chief Executive Officer of Poe & Brown, Inc., is a Director of the Company.
NOTE 10--SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for income taxes and interest for respective periods is summarized as follows:
See Note 2 for discussion of non-cash equity investment transactions.
NOTE 11--LONG-TERM INCENTIVE STOCK PLANS
In November 1993, the Company's Board of Directors and a majority of the Company shareholders approved the "International Speedway Corporation 1994 Long-Term Incentive Plan" (the "1994 Plan") for certain officers and managers of the Company. Under the 1994 Plan, up to 750,000 shares of the Company's Class B Common Stock were authorized to be granted as restricted stock at no cost to 1994 Plan participants. Awards were granted under the 1994 Plan based upon the Company's performance in fiscal years 1994, 1995 and 1996. The ability to issue additional shares under the 1994 Plan expired with the grants based on fiscal 1996 results, which were granted January 1, 1997.
In September 1996, the Company's Board of Directors and a majority of the Company shareholders approved the "1996 Long-Term Incentive Plan" (the "1996 Plan") for certain officers, employees and consultants of the Company. The 1996 Plan authorizes the grant of stock options (incentive and nonstatutory), stock appreciation rights ("SARs") and restricted stock. The Company has reserved an aggregate of 1,000,000 shares (subject to adjustment for stock splits and similar capital changes) of the Company's Class A Common Stock for grants under the 1996 Plan. In April 1998, the first awards of restricted stock under the 1996 Plan were made at no cost to Plan participants based upon fiscal 1997 results. There have been no grants of stock options or SARs under the 1996 Plan.
Shares of restricted stock awarded under the 1994 and 1996 Plans vest at the rate of 50% of each award on the third anniversary of the award date and the remaining 50% on the fifth anniversary of the award date. Shares awarded under the 1994 and 1996 Plans generally are subject to forfeiture in the event of termination of employment prior to the vesting dates. The 1994 and 1996 Plan participants own the shares and may vote and receive dividends, but are subject to certain restrictions. Restrictions include the prohibition of the sale or transfer of the shares during the period prior to vesting of the shares. The Company also has the right of first refusal to purchase any shares of stock issued under the 1994 and 1996 Plans which are offered for sale subsequent to vesting.
On January 1, 1996 and 1997 a total of 102,075 and 98,010 of the Company's Class B Common Stock , respectively, were awarded to certain officers and managers under the 1994 Plan. On April 1, 1998, 22,236 restricted shares of the Company's Class A Common Stock were awarded to certain officers and managers under the 1996 Plan. The market value of shares awarded on January 1, 1996 and 1997 and April 1, 1998 amounted to approximately $1,600,000, $1,985,000 and $680,000, respectively, and has been recorded as "Unearned compensation - restricted stock", which is shown as a separate component of shareholders' equity in the accompanying consolidated balance sheets. The unearned compensation is being amortized over the vesting periods of the shares. In accordance with APB 25, the Company will recognize a compensation charge over the vesting periods equal to the fair market value of these shares on the date awarded. The expense measured under SFAS No. 123 does not differ from that measured under APB25.
The tax effect of income tax deductions that differ from expense under these plans is credited or charged to additional paid-in capital.
NOTE 12--CHANGE IN FISCAL YEAR END
Effective December 1, 1996, the Company changed its fiscal year end from August 31 to November 30. This resulted in a three-month transition period commencing September 1, 1996 and ending November 30, 1996. Consequently, the consolidated audited financial statements contain information as of and for the three months ended November 30, 1996. The following supplemental unaudited consolidated statement of operations and unaudited consolidated statement of cash flows for the three months ended November 30, 1995 are presented for comparative purposes only and were presented in the Transition Form 10-Q filed for the period ended November 30, 1996.
CONSOLIDATED STATEMENT OF OPERATIONS
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTE 13--QUARTERLY DATA (UNAUDITED)
The Company derives most of its income from event admissions and related revenue from a limited number of NASCAR-sanctioned races. As a result, the Company's business has been, and is expected to remain, highly seasonal based on the timing of major events. For example, one of Darlington Raceway's Winston Cup Series events is traditionally held on the Sunday preceding Labor Day. Accordingly, the timing of the Labor Day holiday in 1997 and 1998 resulted in the revenue and expenses for that race and the related supporting events being recognized in the quarter ended August 31 in fiscal 1997, while not being recognized until the quarter ending November 30 in fiscal 1998. Further, in July 1998 the Company announced the postponement of the NASCAR Winston Cup Series Pepsi 400 at Daytona from July 4, 1998 to October 17, 1998 as a result of the nationally publicized forest fire emergency throughout the state of Florida. The rescheduling of the Pepsi 400 at Daytona resulted in event-related revenues and expenses being recognized in the quarter ending November 30, 1998 while corresponding revenues and expenses were recognized in the quarter ended August 31 in fiscal 1997. Accordingly, the Company's results of operations are not necessarily comparable on a period-to-period basis.
The following table presents certain unaudited financial data for each fiscal quarter of fiscal 1997 and fiscal 1998 (in thousands, except per share amounts):
NOTE 14 -- SUBSEQUENT EVENTS
In January 1999, the Unified Government of Wyandotte County/Kansas City, Kansas ("Unified Government") issued approximately $71.3 million in taxable special obligation revenue ("TIF") bonds and approximately $24.3 million in sales tax special obligation revenue ("STAR") bonds, in connection with the financing of the phase I construction of the proposed Kansas International Speedway. The STAR bonds will be retired with state and local taxes generated within the project's boundaries. The TIF bonds will be a liability of the Company and will be recorded as long term debt in the Company's first quarter of fiscal 1999. Commencing in 1999 and continuing through 2027, the Company will be required to make principal and interest payments escalating from an annual rate of approximately $4.8 million in 1999 to $7.7 million in 2027. The Company has granted a mortgage and security interest in the Kansas project for its TIF Bond debt service obligations.
The Company's phase I equity contribution to Kansas International Speedway is approximately $77.9 million, of which $24.4 million was funded during fiscal 1998, primarily for land acquisition.
Subsequent to November 30, 1998, the Company invested an additional approximately $2.5 million in Kansas International Speedway and deposited approximately $51 million into a trust account concurrent with the Unified Government's January 1999 issuance of the TIF and STAR bonds described above. TIF and STAR bond proceeds are awaiting disbursement subject to certain conditions of the bond insurer.
Schedule II Valuation and Qualifying Accounts
Additions Balance Charged to Balance Beginning Costs and Deductions at End Description of Period Expenses (A) Period _____________________________________________ (Thousands of Dollars)
For the year ended November 30, 1998
Allowance for doubtful accounts $100 $ 79 $ 79 $ 100
For the year ended November 30, 1997
Allowance for doubtful accounts $ 35 $ 170 $ 105 $ 100
For the three months ended November 30, 1996
Allowance for doubtful accounts $ 35 $ (2) $ (2) $ 35
For the year ended August 31, 1996
Allowance for doubtful accounts $ 35 $ 52 $ 52 $ 35
(A) Uncollectible accounts written off, net of recoveries.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers, directors and nominees for directors of the Company are as follows:
The Company's Articles provide that the Board of Directors be divided into three classes, with regular three year staggered terms. Messrs. James C. France, Cooper, Brian Z. France, Mason and Reuss will hold office until the annual meeting of shareholders to be held in 1999, Ms. Kennedy and Messrs. Brown, Dyson, Rensi and Staed will hold office until the annual meeting of shareholders to be held in 2000, and Messrs. William C. France, Combs, Foster, Harris and Root will hold office until the annual meeting of shareholders to be held in 2001.
William C. France and James C. France are brothers. Lesa D. Kennedy and Brian Z. France are the children of William C. France. There are no other family relationships among the Company's executive officers and directors.
Mr. William C. France, a director since 1958, has served as Chairman of the Board of the Company since 1987 and as Chief Executive Officer since 1981. Mr. France also serves as a director of Penske Motorsports.
Mr. James C. France, a director since 1970, has served as President and Chief Operating Officer of the Company since 1987.
Ms. Lesa D. Kennedy, a director since 1984, was appointed Executive Vice President of the Company in January 1996. Ms. Kennedy served as the Company's Secretary from 1987 until January 1996 and served as its Treasurer from 1989 until January 1996.
Mr. H. Lee Combs, a director since 1987, was appointed the Company's Senior Vice President-Operations in January 1996. Mr. Combs served as a Vice President and the Company's Chief Financial Officer from 1987 until such time. He also serves as a director of Penske Motorsports and Grand Prix Association of Long Beach, Inc.
Mr. Robert E. Smith has served as Vice President--Administration of the Company for more than five years.
Ms. Susan G. Schandel was appointed the Company's Treasurer and Chief Financial Officer in January 1996. From November 1992 until such time, Ms. Schandel served as the Company's Controller.
Mr. Gregory J. Sullivan, appointed the Company's Vice President-Marketing in November 1994, joined the Company in September 1994. Prior to joining the Company, Mr. Sullivan was employed by Kraft Foods (a division of Phillip Morris) for more than five years, where he most recently served as Director of Marketing Services for Kraft's Maxwell House division.
Mr. John E. Graham, Jr., appointed as a Vice President in November 1994, joined the Company as President of Daytona International Speedway in September 1994. Prior to joining the Company, Mr. Graham was employed by First Union National Bank of Florida for more than five years, where he most recently served as President of First Union National Bank of Volusia and Flagler Counties.
Mr. W. Grant Lynch, Jr. has served as a Vice President and as President of Talladega Superspeedway since joining the Company in November 1993. Prior to such time, Mr. Lynch was employed by R.J. Reynolds Tobacco Company, Sports Marketing Division, where from 1990 until 1993 he served as Senior Operations and Public Relations Manager for the Winston Cup Racing Program.
Mr. James H. Hunter has served as a Vice President and as President of Darlington Raceway since joining the Company in November 1993. Prior to joining the Company, Mr. Hunter served as NASCAR's Vice President of Administration and Marketing for more than five years.
Mr. John R. Saunders has served as a Vice President since 1997 and was President of Watkins Glen International from 1983 until 1997.
Mr. W. Garrett Crotty has served as Secretary and General Counsel since 1996. Prior to that time he had been in the private practice of law for more than five years.
Mr. J. Hyatt Brown, a director since 1987, serves as the President and Chief Executive Officer of Poe & Brown, Inc. and has been in the insurance business with Brown & Brown, Inc., its predecessor, since 1959. Mr. Brown also serves as a director of Rock Tenn Co, SunTrust Banks, Inc., BellSouth Corporation, and FPL Group, Inc.
Mr. John R. Cooper, a director since 1987, served as Vice President - Corporate Development of the Company from December 1987 until July 1994. Beginning January 1996 Mr. Cooper rejoined the Company staff.
Mr. Robert R. Dyson, a director since January 1997, has served as Chairman and Chief Executive Officer of the Dyson-Kissner-Moran Corporation (DKM) since November 1992.
Mr. James H. Foster, a director since 1968, served as the Company's Senior Vice President - Special Projects from January 1994 until his retirement in 1997. Mr. Foster served as President of Daytona International Speedway from 1988 until 1994.
Mr. Brian Z. France, a director since 1994, has served as NASCAR's Vice President of Marketing and Corporate Communications since December 1992 and as the Company's Manager--Group Projects since February 1994. From 1983 until such time, Mr. France served in a number of other capacities with NASCAR,
including Winston Racing Series Administrative Assistant and National Tour Director.
Mr. Christy F. Harris, a director since 1984, has been engaged in the private practice of business and commercial law with Harris, Midyette, Geary, Darby, & Morrell, P.A. for more than twenty years.
Mr. Raymond K. Mason, Jr., a director since 1981, had served as Chairman and President of American Banks of Florida, Inc., Jacksonville, Florida, from 1978 until its sale in 1998.
Mr. Lloyd E. Reuss, a director since January 1996, served as President of General Motors Corporation from 1990 until his retirement in January 1993. Mr. Reuss also serves as a director of Handleman Co., Detroit Mortgage and Realty, Co. and United States Sugar Company.
Mr. Edward H. Rensi, a director since January 1997, is an executive consultant with McDonald's Corporation. He served as President and Chief Executive Officer of McDonald's USA from 1991 until 1997. He is a Director of McDonald's Corporation and Snap-On Incorporated.
Mr. Chapman Root, II, a director since 1992, has served as President of the Root Company, a private investment company, since 1989. Mr. Root also serves as a director of First Financial Corp. and Terre Haute First National Bank.
Mr. Thomas W. Staed, a director since 1987, has served as President of Oceans Eleven Resorts, Inc., a hotel/motel business, for more than five years.
DIRECTOR COMPENSATION
The Company pays each non-employee director a monthly retainer of $500, a $1,000 fee for each meeting of the Board of Directors attended and a $500 fee for each Board committee meeting attended. The aggregate retainers and fees paid to directors with respect to fiscal 1998 services totaled approximately $111,000. The Company also reimburses directors for all expenses incurred in connection with their activities as directors.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon a review of Forms 3 and 4 and amendments thereto furnished to the Company during the fiscal year ended November 30, 1998, Forms 5 and amendments thereto furnished to the Company with respect to the fiscal year ended November 30, 1998, and written representations furnished to the Company, James H. Foster and Christy F. Harris have been identified as failing to file on a timely basis reports required by section 16(a) of the Exchange Act during the fiscal year ended November 30, 1998. Mr. Foster and Mr. Harris each had one transaction which should have been reported on Form 4 which was reported late on Form 5. Mr. Harris' Form 5 was filed late. Based solely on the review, there is no other person who, at any time during the fiscal year, was a director, officer, beneficial owner of more than ten percent of any class of the Company's securities that failed to file on a timely basis reports required by section 16(a) of the Exchange Act during the fiscal year ended November 30, 1998.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth the total compensation paid by the Company, for services rendered during the last three fiscal years, to the Company's Chief Executive Officer and the Company's other four most highly compensated executive officers during fiscal 1998 (collectively the "Named Officers").
Summary Compensation Table
(1) For fiscal years prior to 1998, reflects the aggregate market value of shares awarded under the Company's 1994 Long-Term Incentive Plan (calculated as of the date of the award). The indicated awards were made in January with respect to services rendered in the prior fiscal year. For fiscal year 1998, reflects the aggregate market value of shares awarded under the Company's 1996 Long-Term Incentive Plan (calculated as of the date of the award). The indicated awards were made in April with respect to services rendered in the prior fiscal year. See Note 11 of Notes to the Company's Consolidated Financial Statements.
(2) The compensation reported in this column consists of (i) payments for insurance, including premium payments and related expense for split-dollar and other life insurance, accidental death and dismemberment insurance, group health insurance, and long term disability insurance, (ii) medical expense reimbursements, and (iii) contributions to the Company's 401(k) plan. The amounts applicable to each Named Officer for each category for fiscal 1998 are as follows: William C. France ($773,577, $864 and $0, respectively); James C. France ($468,161, $2,758 and $6,400, respectively); Lesa D. Kennedy ($3,159, $0 and $6,400, respectively); H. Lee Combs ($3,142, $3,614 and $6,400, respectively); and W. Grant Lynch, Jr. ($3,031, $394 and $6,400, respectively). Pursuant to the Company's split-dollar life insurance arrangements, the premiums will be repaid to the Company in future periods. See Note 9 of Notes to the Company's Consolidated Financial Statements.
(3) The bonus for the Chairman/CEO and President COO are the Company's estimates for fiscal 1998, which have not yet been approved by the Board of Directors of the Company.
COMMITTEE REPORT ON EXECUTIVE OFFICER COMPENSATION
The Company's Executive Officer Compensation is overseen by the Compensation Committee of the Board of Directors which is composed entirely of independent directors.
PHILOSOPHY AND POLICIES. Executive Officer Compensation is structured and administered to offer competitive compensation based on the Executive Officer's contribution and personal performance in support of the Company's strategic plan and business mission.
In 1989, based upon recommendation of the Compensation Committee, the Company retained TPF&C to perform a salary study to determine benchmark salary ranges. TPF&C made recommendations to the Company concerning salary ranges and a bonus structure. The recommendations were followed in establishing the corporate compensation plan which is reviewed and reevaluated every year. As part of the overall compensation plan the Company's Executive Officers are grouped in structured pay grades based upon job responsibility and description. Each grade has an established range for annual salary. The salary ranges for each grade were originally established based upon the TPF&C salary study and have been reevaluated and adjusted annually by the Compensation Committee based upon changes in market conditions and company performance factors.
CORPORATE PERFORMANCE MEASURES USED TO DETERMINE EXECUTIVE OFFICER COMPENSATION. Based on Company performance (determined subjectively by the Committee in accordance with the sound business judgment of its members after consideration of earnings per share, revenue growth and established salary ranges, the Committee established a total pool of dollars which was used to provide for increases in annual salary compensation to all employees including the Executive Officers other than the Chairman/CEO and President/COO. The Compensation Committee recommended a proposed salary for the Chairman/CEO and President/COO to the entire Board of Directors (other than the Chairman/CEO and President/COO) which approved the salaries as recommended.
SALARY COMPENSATION. All other Executive Officers' annual salaries were set by the Chairman/CEO and President/COO who were given the authority to set all salaries other than their own so long as (1) the total pool of available dollars allocated for annual salary compensation for Executive Officers was not exceeded and (2) provided each Executive Officer's annual salary was within the established range for the salary grade. In setting Executive Officer salaries the Chairman/CEO and President/COO considered (1) Company performance as measured against management goals approved by the Board of Directors, (2) personal performance in support of Company goals as measured by annual evaluation criteria, and (3) intangible factors and criteria such as payments by competitors for similar positions although no particular weighting of the factors or formula was used.
In recommending the annual salaries of the Chairman/CEO and President/COO, the Committee considered similar criteria as well as the Committee members' assessment of the Company's financial size and condition.
INCENTIVE COMPENSATION. The Company has an Annual Incentive Compensation Plan for Management in which the Executive Officers participate. As a result Executive Officer Compensation is significantly at risk. Incentive compensation for Executive Officers can be as high as 29% of total annual compensation.
Each Executive Officer is assigned a target bonus opportunity based on corporate and personal goals for the year. The actual bonus for each Executive Officer will range from 0% to 125% of the target depending upon
results of corporate and personal performance during the year. The current corporate financial measurements are earnings per share and revenue growth. These may vary from year to year as established by the Compensation Committee. Personal performance factors are based on individual (functional) objectives and are tailored for each Executive Officer. A portion of each Executive Officer's incentive award will be based upon the Chairman/CEO and President/COO's discretionary judgment of the individual's overall performance during the plan year.
The incentive compensation for the Chairman/CEO and President/COO is, again, proposed by the Compensation Committee and presented to the full Board of Directors for ratification.
LONG TERM INCENTIVE PLAN COMPENSATION
1994 LONG-TERM INCENTIVE PLAN. In 1993, based upon recommendation of the Compensation Committee, the Company retained the HayGroup to assist in the design of a long term incentive compensation plan for specified key employees, which is known as the "International Speedway Corporation 1994 Long-Term Incentive Plan" (the "1994 Plan"). The 1994 Plan was recommended by the Compensation Committee of the Board of Directors, unanimously approved by all outside directors and ratified by the entire Board of Directors on November 17, 1993. It was approved by the written consent of the holders of a majority of the outstanding shares of the Company on the same date. The purpose of the 1994 Plan was to attract and retain qualified and competent executives by providing significant opportunities for capital accumulation and to enhance the growth and profitability of International Speedway Corporation (the "Company") by focusing on long-term goals and creation of increases in shareholder value. The 1994 Plan set aside restricted stock in the amount of 50,000 old pre 15-1 split shares of common stock for its implementation, which were converted, on the 15-1 basis, into 750,000 shares of Class B Common Stock. Awards of restricted shares of stock were assigned to officers and key employees who were capable of having a significant impact on the performance of the Company. The amount of shares for each initial participant was based primarily on an analysis and recommendations by compensation specialists of the HayGroup. Awards were granted based upon Company performance in fiscal years 1994, 1995 and 1996. The ability to issue additional shares under the 1994 Plan expired after the grants based on fiscal 1996 results. The restricted shares were granted to participants each year based upon the Company's performance as measured against annual financial goals established in advance by the Board of Directors. Several aspects of the 1994 Plan and its implementation are subject to the discretion of the Compensation Committee.
The shares which were granted under the 1994 Plan are initially restricted and do not immediately vest to the participant, but, instead carry a continued employment restriction of 3 years on 50% of the grant and 5 years on the other 50% of the grant. If employment ends prior to the expiration of the vesting period for reasons acceptable to the Compensation Committee (death, disability, retirement, etc.) the Company may determine to vest all or a portion of the unvested and unearned restricted shares. Termination of employment for any other reason will result in forfeiture of all unvested and unearned shares.
Prior to vesting the participant may vote the shares and receive dividends on the restricted shares as granted. Prior to vesting the certificates for the restricted shares are held in escrow by the Company. After vesting the certificates for the restricted shares will be delivered to the participant. The Company has the right of first refusal to buy any stock issued (and vested) under the 1994 Plan which any participant wishes to sell.
1996 LONG-TERM INCENTIVE PLAN. The Company's 1996 Long-term Incentive Plan (the "1996 Plan") was adopted by the Board of Directors in September 1996. The purpose of the 1996 Plan is to attract and retain key employees and consultants of the Company, to provide an incentive for them to achieve long-range performance goals, and to enable them to participate in the long-term growth of the Company.
The 1996 Plan authorizes the grant of stock options (incentive and nonstatutory), stock appreciation rights ("SARs") and restricted stock to employees and consultants of the Company capable of contributing to the Company's performance. The Company has reserved an aggregate of 1,000,000 shares (subject to adjustment for stock splits and similar capital changes) of Class A Common Stock for grants under the 1996 Plan. Incentive Stock Options may be granted only to employees eligible to receive them under the Internal Revenue Code of 1996, as amended.
The Board of Directors has appointed the Compensation Committee (the "Committee") to administer the 1996 Plan. Awards under the 1996 Plan will contain such terms and conditions consistent with the 1996 Plan as the Committee in its discretion approves.
The Committee has discretion to administer the 1996 Plan in the manner which it determines, from time to time, is in the best interest of the Company. For example, the Committee will fix the terms of stock options, SARs and restricted stock grants and determine whether, in the case of options and SARs, they may be exercised immediately or at a later date or dates. Awards may also be granted subject to conditions relating to continued employment and restrictions on transfer. In addition, the Committee may provide, at the time an award is made or at any time thereafter, for the acceleration of a participant's rights or cash settlement upon a change in control of the Company. The terms and conditions of awards need not be the same for each participant. The foregoing examples illustrate, but do not limit, the manner in which the Committee may exercise its authority in administering the 1996 Plan. In addition, all questions of interpretation of the 1996 Plan will be determined by the Committee. The first awards under the 1996 Plan were made in April 1998, based upon fiscal 1997 results. The amount of the awards was based upon the Company's performance as measured against annual financial goals established in advance by the Board of Directors. These awards were restricted shares of Class A Common Stock and are initially restricted and will not immediately vest to the participant, but, instead carry a continued employment restriction of 3 years on 50% of the grant and 5 years on the other 50% of the grant. If employment ends prior to the expiration of the vesting period for reasons acceptable to the Compensation Committee (death, disability, retirement, etc.) the Company may determine to vest all or a portion of the unvested and unearned restricted shares. Termination of employment for any other reason will result in forfeiture of all unvested and unearned shares. Awards under the 1996 Plan are to be made in April 1999, based upon fiscal 1998 results and will carry restrictions equivalent to those imposed on the awards in 1998.
Prior to vesting the participant may vote the shares and receive dividends on the restricted shares as granted. Prior to vesting the certificates for the restricted shares will be held in escrow by the Company. After vesting the certificates for the restricted shares will be delivered to the participant. The Company has the right of first refusal to buy any stock issued (and vested) under the 1996 Plan which any participant wishes to sell.
COLLATERAL ASSIGNMENT SPLIT-DOLLAR INSURANCE
In October 1995, based upon evaluation and recommendation of the Compensation Committee, the Company entered into collateral assignment split- dollar insurance agreements covering the lives of the Chairman/CEO, the President/COO and their respective spouses. Pursuant to the agreements, the Company will advance annual premiums of approximately $1,205,000 each year for a period of eight years. Upon surrender of the policies or payment of the death benefits thereunder, the Company is entitled to the repayment of an amount equal to the cumulative premiums paid by the Company. Although Securities and Exchange Commission (SEC) rules require disclosure of the entire premium advanced by the Company in the Summary Compensation Table, the Compensation Committee determined the compensation aspect of the plan was actually less than the total premium because of the repayment requirement and represented reasonable and appropriate compensation to the covered executives, when considered in light of their total compensation package.
CHAIRMAN/CEO COMPENSATION BASES. The Compensation Committee determined a 15% increase in Chairman/CEO compensation was appropriate in light of the continued growth in earnings per share in 1997.
Thomas W. Staed Chapman J. Root, II Lloyd E. Reuss
PERFORMANCE GRAPH
The rules of the Securities and Exchange Commission ("SEC") require the Company to provide a line graph covering at least the last five fiscal years and comparing the yearly percentage change in the Company's total shareholder return on common stock with the cumulative total return of a broad equity index assuming reinvestment of dividends and the cumulative total return, assuming reinvestment of dividends, of a published industry or line-of-business index; peer issuers selected in good faith; or issuers with similar market capitalization. The graph below compares the cumulative total five year return of the Company's common stock (upon the assumption that an original $100 investment was made in pre-split common stock which automatically converted to Class B Common Stock on November 4, 1996) with that of the NASDAQ Stock Market Index (U.S. Companies) and with the 40 NASDAQ issues (U.S. companies) listed in SIC codes 7900-7999, which encompasses service businesses in the amusement, sports and recreation industry, which includes indoor operations which are not subject to the impact of weather on operations and pari-mutual and other wagering operations. The Company conducts large outdoor sporting and entertainment events which are subject to the impact of weather, and is not involved in pari-mutual or other wagering. The stock price shown has been estimated from the high and low prices for each quarter for which the close is not available. Because of the unique nature of the Company's business and the fact that only short-term public information is available concerning a limited number of companies involved in the same line of business, and no public information is available concerning other companies in that line of business, the Company does not believe that the information presented below is meaningful.
COMPARISON OF FIVE YEAR CUMULATIVE RETURN AMONG INTERNATIONAL SPEEDWAY CORP., NASDAQ Market Index and NASDAQ SIC 7900 Index [The line graph on the information statement furnished to shareholders depicts the plotting of the following information.]
Measurement Period ISC NASDAQ NASDAQ (Fiscal Year Covered) Market SIC 7900 Index Index
Measurement Pt - 11/30/93 $100.00 $100.00 $100.00
FYE* 11/30/94 $102.85 $100.20 $ 59.85 FYE* 11/30/95 $246.24 $142.87 $ 48.28 FYE* 11/30/96 $308.62 $174.91 $ 43.11 FYE 11/30/97 $317.15 $217.89 $ 52.94 FYE 11/30/98 $533.51 $267.00 $ 48.60
* Adjusted to reflect current fiscal year end for comparability purposes.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of February 8, 1999, the Company had 11,783,548 shares of Class A Common Stock and 31,291,621 shares of Class B Common Stock issued and outstanding. Each share of the Class A Common Stock is entitled to one-fifth of one vote on matters submitted to shareholder approval or a vote of shareholders. Each share of the Class B Common Stock is entitled to one vote on matters submitted to shareholder approval or a vote of shareholders. The following table sets forth certain information as of February 8, 1999 with respect to the beneficial ownership of each class of the Company's common stock by: (i) each person known by the Company to be the beneficial owner of more than 5% of the outstanding shares of each class of common stock, (ii) each director of the Company who beneficially owns any such shares, (iii) each of the Company's executive officers who beneficially owns any such shares, and (iv) all directors and executive officers of the Company as a group. As described in the notes to the table, voting and/or investment power with respect to certain shares of common stock is shared by the named individuals. Consequently, such shares may be shown as beneficially owned by more than one person.
- ------------------------------- * Less than 1%. (1) Unless otherwise indicated the address of each of the beneficial owners identified is c/o the Company, 1801 West International Speedway Boulevard, Daytona Beach, Florida 32114. (2) Unless otherwise indicated, each person has sole voting and investment power with respect to all such shares. (3) Reflects the aggregate of 7,600 Class A and 20,325,448 Class B shares indicated in the table as beneficially owned by James C. France, William C. France, Lesa D. Kennedy and Brian Z. France, as well as 4,500 Class A shares held of record and 832,633 Class B shares held beneficially by the adult children of James C. France. See footnotes (4), (5) and (9). (4) Includes (i) 1,500 Class A shares held of record and 304,725 Class B shares held beneficially by Sharon M. France, his spouse, (ii) 9,115,125 Class B shares held of record by Western Opportunity Limited Partnership ("Western Opportunity"), (iii) 4,052,369 Class B shares held of record by Carl Investment Limited Partnership ("Carl"), and (iv) 1,880,502 Class B shares held of record by White River Investment Limited Partnership ("White River"). James C. France is the sole shareholder and director of (x) Principal Investment Company, one of the two general partners of Western Opportunity, (y) Quaternary Investment Company, the general partner of Carl, and (z) Secondary Investment Company, one of the two general partners of White River. Also see footnote (5). Does not include an aggregate of 4,500 Class A and 832,633 Class B shares held of record by the adult children of James C. France. (5) Includes (i) 600 Class A shares held of record by Betty Jane France, his spouse, (ii) 9,115,125 Class B shares held of record by Western Opportunity, (iii) 3,763,750 Class B shares held of record by Polk City Limited Partnership ("Polk City"), and (iv) 1,880,502 Class B shares held of record by White River. William C. France is the sole shareholder and director of each of (x) Sierra Central Corp., one of the two general partners of Western Opportunity, (y) Boone County Corporation, the general partner of Polk City, and (z) Cen Rock Corp., one of the two general partners of White River. Also see footnote (4). Does not include the aggregate of 3,000 Class A and 645,095 Class B shares shown in the table as beneficially owned by Lesa D. Kennedy and Brian Z. France, adult children of William C. France. (6) This owner's address is One Post Office Square, Boston, Massachusetts 02109. Shares reported for Putnam Investment Management, Inc. and The Putnam Advisory Company, Inc. are included. (7) This owner's address is One Post Office Square, Boston, Massachusetts 02109. Shares reported are also included in those reported for Putnam Investments, Inc. (8) This owner's address is One Post Office Square, Boston, Massachusetts 02109. Shares reported are also included in those reported for Putnam Investments, Inc. (9) Includes (i) 1,500 Class A shares held of record by Ms. Kennedy as custodian for her minor son, Benjamin, (ii) 1,500 Class A shares held jointly with her spouse, and (iii) 343,950 Class B shares held of record by BBL Limited Partnership. Mrs. Kennedy is the sole shareholder and a director of BBL Company, the sole general partner of BBL Limited Partnership. (10) Includes 75 Class B shares owned by The Raymond K. Mason, III Trust, as to which Mr. Mason disclaims beneficial ownership. (11) Includes (i) 75,000 Class B shares held of record by Mr. Foster as trustee, and (ii) 65,000 Class B shares held of record by Barbara S. Foster, his spouse, as trustee, as to which Mr. Foster disclaims beneficial ownership. (12) Owned jointly with Barbara Staed, his spouse. (13) Includes 5,000 Class A shares held in the Robert R. Dyson 1987 Family Trust and 7,000 Class A Shares held as Trustee of the Charles H. Dyson Trust No. 2, U/A dated 4/15/76. (14) Includes 795 Class B shares held of record as joint tenants with his spouse. (15) Held of record as joint tenants with Cynthia R. Brown, his spouse. (16) Includes 100 Class B shares held by Mr. Crotty as Trustee for his son and 1,500 shares held by Bellows Falls Investment, Inc. (17) Includes (i) 500 Class A shares held by M. Dale Harris, his spouse, (ii) 1,500 Class A shares held by Mr. Harris as trustee of The Harris, Midyette, Geary, Darby & Morrell, P.A. Profit Sharing Plan and Trust, (iii) 100 Class A shares held by Mr. Harris as Trustee of the Harris Children's Trust as to which Mr. Harris disclaims beneficial ownership. (18) See footnotes (4),(5), and (9) through (17).
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
NASCAR, which sanctions most of the Company's major racing events, is controlled by William C. France and James C. France. Standard NASCAR sanction agreements require racetrack operators to pay various monies to NASCAR for each sanction event conducted. Included are sanction fees and prize and point fund monies. The prize and point fund monies are distributed by NASCAR to participants in the events. The aggregate NASCAR sanction fees and prize and point fund monies paid by the Company with respect to fiscal 1996, 1997 and 1998 were $13.9 million, $20.6 million, and $28.8 million respectively.
In addition, NASCAR and the Company share a variety of expenses in the ordinary course of business. NASCAR pays rent to the Company for office space based upon estimated fair market lease rates for comparable facilities. NASCAR also reimburses the Company for 50% of the compensation paid to personnel working in the Company's legal and risk management departments, as well as 50% of the compensation expense associated with receptionists and the Company's archive departments. The Company's payments to NASCAR for MRN Radio's broadcast rights to Craftsman Truck Series races represents an agreed-upon percentage of the Company's advertising revenues attributable to such race broadcasts. NASCAR's reimbursement for use of the Company's mail room, graphics and publications departments, and the Company's reimbursement of NASCAR for use of corporate aircraft, is based on actual usage. The aggregate amount paid by the Company to NASCAR for shared expenses, net of the amounts received from NASCAR for shared expenses, totaled approximately $359,000, $720,000, and $160,000 during fiscal 1996, 1997 and 1998, respectively. The Company strives to ensure, and management believes that, the terms of the Company's transactions with NASCAR are no less favorable to the Company than could be obtained in arms'-length negotiations.
J. Hyatt Brown, a director of the Company, serves as President and Chief Executive Officer of Poe & Brown, Inc. ("Poe"). Poe has received commissions for serving as the Company's insurance broker for several of the Company's insurance policies, including its property and casualty policy, certain employee benefit programs and the split-dollar arrangements established for the benefit of William C. France, James C. France and their respective spouses. The aggregate commissions received by Poe in connection with Company policies were approximately $294,000, $166,000, and $240,000 during fiscal 1996, 1997 and 1998, respectively.
All of these transactions, payments and exchanges are considered normal in the ordinary course of business. Transactions, payments and exchanges similar to all of the above are planned during the Company's current fiscal year.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, CONSOLIDATED FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Documents filed as a part of this report
1. Consolidated Financial Statements listed below:
Consolidated Balance Sheets - November 30, 1997 and 1998
Consolidated Statements of Income - Year ended August 31, 1996, three months ended November 30, 1996 and years ended November 30, 1997 and 1998
Consolidated Statements of Shareholders' Equity - Year ended August 31, 1996, three months ended November 30, 1996 and years ended November 30, 1997 and 1998
Consolidated Statements of Cash Flows - Year ended August 31, 1996, three months ended November 30, 1996 and years ended November 30, 1997 and 1998
Notes to Consolidated Financial Statements
2. Consolidated Financial Statement Schedules listed below:
II - Valuation and qualifying accounts
All other schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the financial statements and notes thereto.
3. Exhibits:
Exhibit Number Description of Exhibit Filing Status
1. (3)(i) - Articles of Incorporation filed herewith 2. (3)(ii) - By-Laws filed herewith 3. (10) - Daytona Property Lease filed herewith 4. (10) - 1994 Long-Term Incentive Plan* filed herewith 5. (10) - 1996 Long-Term Incentive Plan* filed herewith 6. (10) - Split-Dollar Agreement (WCF)* filed herewith 7. (10) - Split-Dollar Agreement (JCF)* filed herewith 8. (22) - Subsidiaries of the Registrant filed herewith 9. (27) - Financial Data Schedule filed herewith
* Compensatory Plan required to be filed as an exhibit pursuant to Item 14(c).
(b) Reports on Form 8-K
During the fourth quarter of the period covered by this report the Company filed no reports on Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
INTERNATIONAL SPEEDWAY CORPORATION
DATE: February 9, 1999 /s/ William C. France William C. France, Chairman, Chief Executive Officer & Director
DATE: February 9, 1999 /s/ Susan G. Schandel Susan G. Schandel Chief Financial Officer
DATE: February 9, 1999 /s/ James C. France James C. France Director
DATE: February 9, 1999 /s/ Lesa D. Kennedy Lesa D. Kennedy Director
DATE: February 9, 1999 /s/ H. Lee Combs H. Lee Combs Director
DATE: February 9, 1999 /s/ James H. Foster James H. Foster Director
DATE: February 9, 1999 /s/ J. Hyatt Brown J. Hyatt Brown Director
DATE: February 9, 1999 /s/ Brian Z. France Brian Z. France Director
DATE: February 9, 1999 /s/ Raymond K. Mason, Jr. Raymond K. Mason, Jr. Director
DATE: February 9, 1999 /s/ Daniel W. Houser Daniel W. Houser Controller