International Speedway Corp.
Annual Report 2014

Plain-text annual report

I N T E R N A T I O N A L S P E E D W A Y C O R P O R A T I O N • 2 0 1 4 A N N U A L R E P O R T C O M I N G J A N U A R Y 2 0 1 6 INTERNATIONAL MOTORSPORTS CENTER One Daytona Boulevard Daytona Beach, Florida 32114-1252 www.internationalspeedwaycorporation.com dRIvEN TO bE ThE wORLd LEAdER IN MOTORsPORTs ENTERTAINMENT bY PROvIdING sUPERIOR, INNOvATIvE, ANd ThRILLING GUEsT ExPERIENCEs. International Speedway Corporation, (“ISC”) founded in 1953, is a leading promoter of motorsports-themed entertainment activities in the United States. The Company owns and/or operates 13 of the nation’s premier motorsports entertainment facilities, which in total, have approximately 831,500 grandstand seats and 527 suites. ISC’s facilities are located in six of the nation’s top 13 media markets and nearly 80 percent of the country’s population is located within the primary trading areas of its facilities. ISC promotes major motorsports events in every month of the racing season — more than any other motorsports promoter. • Daytona International Speedway® in Florida • Darlington Raceway® in South Carolina • Talladega Superspeedway® in Alabama • Chicagoland Speedway® near Chicago, Illinois • Kansas Speedway® in Kansas City, Kansas • Martinsville Speedway® in Virginia • Richmond International Raceway® in Virginia • Phoenix International Raceway® in Arizona • Michigan International Speedway® located outside Detroit • Homestead-Miami SpeedwaySM in Florida • Auto Club Speedway of Southern CaliforniaSM • Watkins Glen International® in New York near Los Angeles • Route 66 RacewaySM near Chicago, Illinois The Company also owns and operates Motor Racing Network Radio, the nation’s largest independent sports radio network, Americrown Service CorporationSM, a subsidiary that provides catering, food and beverage concessions, and services at certain of our motorsports entertainment facilities, and Motorsports Authentics, which sells officially licensed NASCAR and race teams merchandise. In addition, the Company has a 50 percent interest in the Hollywood Casino at Kansas Speedway. The National Association for Stock Car Auto Racing (“NASCAR”) is the most prominent sanctioning body in stock car racing, based on such factors as geographic presence, number of members and sanctioned events. ISC derives approximately 86 percent of its revenues from NASCAR-sanctioned racing events. ISC attributes its solid revenues and profits to an operating strategy that produces significant operating cash flow which is reinvested in strategic opportunities to grow the business and deliver shareholder value. OUR bOARd OF DIRECTORS. JAMES C. FRANCE Chairman of the Board International Speedway Corporation LESA FRANCE KENNEDY Vice Chair and Chief Executive Officer International Speedway Corporation WILLIAM P. GRAVES1 President and Chief Executive Officer American Trucking Associations SONIA MARIA GREEN1 Nationally recognized leader in marketing and brand communications. J. HYATT BROWN1 Chairman Brown & Brown, Inc. BRIAN Z. FRANCE Chairman and and Chief Executive Officer NASCAR, Inc. MORI HOSSEINI1 Chairman and Chief Executive Officer of Intervest Construction, Inc. LARRY AIELLO, JR.1 Retired as President and Chief Executive Officer Corning Cable Systems EDSEL B. FORD II1 Board Director Ford Motor Company CHRISTY F. HARRIS Attorney in private practice of business and commercial law LARRY D. WOODARD1 President and CEO of Graham Stanley Advertising 1 Independent Board Member DEAR INTERNATIONAL SPEEDWAY CORPORATION SHAREHOLDERS, PARTNERS AND EMPLOYEES: At ISC, our vision is to be the world leader in motorsports entertainment by providing superior, innovative and thrilling guest experiences. In 2014, we aggressively pursued this vision with improved amenities at our motorsports facilities and leveraging NASCAR’s groundbreaking competition advancements that build on the 2013 launch of the Gen 6 car, new crowd pleasing qualifying formats and for the first time a Chase for the Sprint Cup Championship that included three elimination rounds leading up to a four-car showdown in the Ford EcoBoost 400 during Championship Weekend at Homestead-Miami Speedway. We reported solid financial performance for 2014 and continue with positive momentum from capacity management and consumer marketing strategies, coupled with strong corporate sales and excitement generated by the new Chase format. We achieved sellouts at Auto Club Speedway, Homestead-Miami Speedway and for four consecutive years, at Phoenix International Raceway in November. 2015 is the first year of the new 10-year TV broadcast agreements with FOX and NBC. We are optimistic the sport can carry forward the fan enthusiasm that peaked during the final rounds of the Chase, and, with some tail wind from strengthening consumer confidence, translate into solid consumer sales and TV ratings in the coming year. Going into 2015, we will continue successful execution of the Company’s consumer marketing and corporate sales strategies, while continuing to benefit from NASCAR’s Industry Action Plan, all of which will support revenue growth for ISC. DAYTONA Rising, the redevelopment of the frontstretch of Daytona International Speedway, continues to progress on time and on budget, debuting approximately 40,000 newly constructed seats and supporting infrastructure for Speedweeks 2015. In 2014, we announced some of the Company’s longest term deals with Toyota and Florida Hospital as Founding Partners for the project, providing for sponsorship on two of the five Injectors. We are optimistic that elevating the experience at the most iconic motorsports facility in North America will take the DAYTONA 500 brand to a whole new level, and favorably impact our 12 other major motorsports facilities’ brands. We maintain a solid financial position, developed over many years, that affords us the ability to follow our disciplined capital allocation strategy and maintain our leadership position in the motorsports industry. Building on this foundation we will continue to execute our five- year, $600 million capital allocation plan through 2017. For the future, we are well positioned to balance the strategic capital needs of our business with returning capital to our shareholders. We appreciate your continued support and look forward to seeing you at the races! VICE CHAIR AND CHIEF EXECUTIVE OFFICER PRESIDENT This page was intentionally left blank. 10-K 2014 This page was intentionally left blank. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________ FORM 10-K ________________________________ (Mark One) !Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended November 30, 2014 or "Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _____ to _____ Commission File Number 000-02384 ________________________________ INTERNATIONAL SPEEDWAY CORPORATION (Exact name of registrant as specified in its charter) ________________________________ FLORIDA 59-0709342 (State or other jurisdiction of incorporation) (I.R.S. Employer Identification No.) ONE DAYTONA BOULEVARD, DAYTONA BEACH, FLORIDA (Address of principal executive offices) 32114 (Zip code) Registrant’s telephone number, including area code: (386) 254-2700 ________________________________ Securities registered pursuant to Section 12(b) of the Act: Title of each class Class A Common Stock — $.01 par value Name of each exchange on which registered NASDAQ/National Market System Securities registered pursuant to Section 12 (g) of the Act: Common Stock — $.10 par value Class B Common Stock — $.01 par value (Title of Class) ________________________________ Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES ! NO " YES " NO ! Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ! NO " UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________ FORM 10-K ________________________________ (Mark One) !Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended November 30, 2014 or "Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _____ to _____ Commission File Number 000-02384 ________________________________ INTERNATIONAL SPEEDWAY CORPORATION (Exact name of registrant as specified in its charter) ________________________________ FLORIDA 59-0709342 (State or other jurisdiction of incorporation) (I.R.S. Employer Identification No.) ONE DAYTONA BOULEVARD, DAYTONA BEACH, FLORIDA (Address of principal executive offices) 32114 (Zip code) Registrant’s telephone number, including area code: (386) 254-2700 ________________________________ Securities registered pursuant to Section 12(b) of the Act: Title of each class Class A Common Stock — $.01 par value Name of each exchange on which registered NASDAQ/National Market System Securities registered pursuant to Section 12 (g) of the Act: Common Stock — $.10 par value Class B Common Stock — $.01 par value (Title of Class) ________________________________ Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ! NO " Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES " NO ! Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ! NO " ISC // 2014 ANNUAL REPORT // FORM 10-K // 1 Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ! NO " Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ! Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer Non-accelerated filer ! # (Do not check if a smaller reporting company) Accelerated filer " Smaller reporting company " PART II Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES " NO ! The aggregate market value of the voting stock held by nonaffiliates of the registrant as of May 31, 2014 was $869,495,739.00 based upon the last reported sale price of the Class A Common Stock on the NASDAQ National Market System on Thursday, May 31, 2014 and the assumption that all directors and executive officers of the Company, and their families, are affiliates. At December 31, 2014, there were outstanding: No shares of Common Stock, $.10 par value per share, 26,617,267 shares of Class A Common Stock, $.01 par value per share, and 19,966,996 shares of Class B Common Stock, $.01 par value per share. DOCUMENTS INCORPORATED BY REFERENCE. The information required by Part III is to be incorporated by reference from the definitive information statement which involves the election of directors at our April 2015 Annual Meeting of Shareholders and which is to be filed with the Commission not later than 120 days after November 30, 2014. EXCEPT AS EXPRESSLY INDICATED OR UNLESS THE CONTEXT OTHERWISE REQUIRES, “ISC,” “WE,” “OUR,” “COMPANY,” “US,” OR “INTERNATIONAL SPEEDWAY” MEAN INTERNATIONAL SPEEDWAY CORPORATION, A FLORIDA CORPORATION, AND ITS SUBSIDIARIES. INTERNATIONAL SPEEDWAY CORPORATION FORM 10-K FOR THE FISCAL YEAR ENDED NOVEMBER 30, 2014 TABLE OF CONTENTS PART I ITEM 1. BUSINESS ITEM 1A. RISK FACTORS ITEM 1B. UNRESOLVED STAFF COMMENTS ITEM 2. PROPERTIES ITEM 3. LEGAL PROCEEDINGS ITEM 4. MINE SAFETY DISCLOSURES ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ITEM 6. SELECTED FINANCIAL DATA ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE ITEM 9A. CONTROLS AND PROCEDURES ITEM 9B. OTHER INFORMATION PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE ITEM 11. EXECUTIVE COMPENSATION ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES PART IV SIGNATURES ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES Page 4 4 6 10 11 12 12 13 13 15 20 43 44 70 71 71 72 72 72 72 72 72 72 72 75 ISC // 2014 ANNUAL REPORT // FORM 10-K // 2 2 Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES ! NO " Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ! Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ! Non-accelerated filer # (Do not check if a smaller reporting company) Smaller reporting company " Accelerated filer " Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES " NO ! The aggregate market value of the voting stock held by nonaffiliates of the registrant as of May 31, 2014 was $869,495,739.00 based upon the last reported sale price of the Class A Common Stock on the NASDAQ National Market System on Thursday, May 31, 2014 and the assumption that all directors and executive officers of the Company, and their families, are affiliates. At December 31, 2014, there were outstanding: No shares of Common Stock, $.10 par value per share, 26,617,267 shares of Class A Common Stock, $.01 par value per share, and 19,966,996 shares of Class B Common Stock, $.01 par value per share. DOCUMENTS INCORPORATED BY REFERENCE. The information required by Part III is to be incorporated by reference from the definitive information statement which involves the election of directors at our April 2015 Annual Meeting of Shareholders and which is to be filed with the Commission not later than 120 days after November 30, 2014. EXCEPT AS EXPRESSLY INDICATED OR UNLESS THE CONTEXT OTHERWISE REQUIRES, “ISC,” “WE,” “OUR,” “COMPANY,” “US,” OR “INTERNATIONAL SPEEDWAY” MEAN INTERNATIONAL SPEEDWAY CORPORATION, A FLORIDA CORPORATION, AND ITS SUBSIDIARIES. INTERNATIONAL SPEEDWAY CORPORATION FORM 10-K FOR THE FISCAL YEAR ENDED NOVEMBER 30, 2014 TABLE OF CONTENTS PART I ITEM 1. BUSINESS ITEM 1A. RISK FACTORS ITEM 1B. UNRESOLVED STAFF COMMENTS ITEM 2. PROPERTIES ITEM 3. LEGAL PROCEEDINGS ITEM 4. MINE SAFETY DISCLOSURES PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES ITEM 6. SELECTED FINANCIAL DATA ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE ITEM 9A. CONTROLS AND PROCEDURES ITEM 9B. OTHER INFORMATION PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE ITEM 11. EXECUTIVE COMPENSATION ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES SIGNATURES Page 4 4 6 10 11 12 12 13 13 15 20 43 44 70 71 71 72 72 72 72 72 72 72 72 75 2 ISC // 2014 ANNUAL REPORT // FORM 10-K // 3 PART I ITEM 1. BUSINESS GENERAL We are a leading owner of major motorsports entertainment facilities and promoter of motorsports themed entertainment activities in the United States. Our motorsports themed event operations consist principally of racing events at our major motorsports entertainment facilities. We currently own and/or operate 13 of the nation’s major motorsports entertainment facilities: (cid:127) Daytona International Speedway® ("Daytona") in Florida; (cid:127) Talladega Superspeedway® ("Talladega") in Alabama; (cid:127) Kansas Speedway® ("Kansas") in Kansas; (cid:127) Richmond International Raceway® ("Richmond") in Virginia; (cid:127) Michigan International Speedway® ("Michigan") in Michigan; (cid:127) Auto Club Speedway of Southern CaliforniaSM ("Auto Club Speedway") in California; (cid:127) Darlington Raceway® ("Darlington") in South Carolina; (cid:127) Chicagoland Speedway® ("Chicagoland") in Illinois; (cid:127) Martinsville Speedway® ("Martinsville") in Virginia; (cid:127) Phoenix International Raceway® ("Phoenix") in Arizona; (cid:127) Homestead-Miami SpeedwaySM ("Homestead") in Florida; (cid:127) Watkins Glen International® ("Watkins Glen") in New York; and (cid:127) Route 66 RacewaySM ("Route 66") in Illinois. In 2014, these motorsports entertainment facilities promoted well over 100 stock car, open wheel, sports car, truck, motorcycle and other racing events, including: (cid:127) 21 National Association for Stock Car Auto Racing (“NASCAR”) Sprint Cup Series events; (cid:127) 15 NASCAR Xfinity Series events; (cid:127) 9 NASCAR Camping World Truck Series events; (cid:127) 3 International Motor Sports Association (“IMSA”) Tudor United SportsCar Championship Series events including the premier sports car endurance event in the United States, the Rolex 24 at Daytona; (cid:127) One National Hot Rod Association (“NHRA”) Mellow Yellow drag racing series event; (cid:127) One IndyCar ("IndyCar") Series event; and (cid:127) A number of other prestigious stock car, sports car, open wheel and motorcycle events. Our business consists principally of promoting racing events at these major motorsports entertainment facilities, which, in total, currently have approximately 831,500 grandstand seats and 527 suites. We earn revenues and generate substantial cash flows primarily from admissions, television media rights fees, promotion and sponsorship fees, hospitality rentals (including luxury suites, chalets and the hospitality portion of club seating), advertising revenues, royalties from licenses of our trademarks, parking and camping, and track rentals. We own Americrown Service Corporation (“Americrown”), which provides catering, concessions and services at certain of our motorsports entertainment facilities and Motorsports Authentics ("MA") which sells officially licensed NASCAR and race team merchandise at our motorsports entertainment facilities as well as certain facilities we do not own. We also own and operate the Motor Racing Network, Inc. ("MRN") radio network, also doing business under the name “MRN Radio”, the nation’s largest independent motorsports radio network in terms of event programming. We also have an equity investment in a Hollywood Casino at Kansas Speedway that has generated substantial equity earnings and cash distributions to us since its opening in fiscal year 2012. At the beginning of fiscal 2015, the NASCAR Nationwide Series became the NASCAR Xfinity Series. Throughout this document, the naming convention for this series is consistent with the current branding. We were incorporated in 1953 under the laws of the State of Florida under the name “Bill France Racing, Inc.” and changed our name to “Daytona International Speedway Corporation” in 1957. With the groundbreaking for Talladega Superspeedway in 1968, we changed our name to “International Speedway Corporation.” Our principal executive offices are located at One Daytona Boulevard, Daytona Beach, Florida 32114, and our telephone number is (386) 254-2700. We maintain a website at http://www.internationalspeedwaycorporation.com/. The information on our website is not part of this report. INCORPORATION OPERATIONS The general nature of our business is a motorsports themed amusement enterprise, furnishing amusement to the public in the form of motorsports themed entertainment. Our motorsports themed event operations consist principally of racing events at our major motorsports entertainment facilities, which include providing catering, and food and beverage concessions at our motorsports entertainment facilities that host NASCAR Sprint Cup Series events except for catering, and food and beverage concessions at Chicagoland and Route 66 . Our other operations include MRN; our 50.0 percent equity investment in the joint venture Kansas Entertainment, LLC ("Kansas Entertainment"), which operates the Hollywood Casino at Kansas Speedway; and certain other activities including souvenir merchandising operations. We derived approximately 86.3 percent of our 2014 revenues from NASCAR-sanctioned racing events at our wholly owned motorsports entertainment facilities. In addition to events sanctioned by NASCAR, in fiscal 2014, we promoted other stock car, sports car, open wheel, motorcycle and go-kart racing events. Food, Beverage and Merchandise Operations We conduct, either through operations of the particular facility or through our wholly owned subsidiary, Americrown, souvenir merchandising operations, food and beverage concession operations and catering services, both in suites and chalets, for customers at each of our motorsports entertainment facilities with the exception of food and beverage concessions and catering services at Chicagoland and Route 66. We also sell officially licensed NASCAR and race team merchandise at our motorsports entertainment facilities as well as certain facilities we do not own, through our wholly owned subsidiary, MA. In January 2015, the Company entered into a 10-year agreement with Fanatics Retail Group Concessions, Inc. ("Fanatics") for Fanatics to have exclusive retail merchandise rights for its track trademarks and certain other intellectual property at all ISC tracks (see Merchandising Operations in Future Trends In Operating Results of MANAGEMENT'S DISCUSSION AND ANALYSIS). Motor Racing Network, Inc. Our wholly owned subsidiary, MRN, also does business under the name “MRN Radio”. While not a radio station, MRN creates motorsports-related programming content carried on radio stations around the country, as well as a national satellite radio service, Sirius XM Radio. MRN produces and syndicates to radio stations live coverage of the NASCAR Sprint Cup, Xfinity and Camping World Truck series races and certain other races conducted at our motorsports entertainment facilities, as well as some races conducted at motorsports entertainment facilities we do not own. Sirius XM Radio also compensates MRN for the contemporaneous re-airing of race broadcasts and certain other production services. MRN produces and provides unique content to its website, http://www.motorracingnetwork.com/, and derives revenue from the sale of advertising on such website. Each motorsports entertainment facility has the ability to separately contract for the rights to radio broadcasts of NASCAR and certain other events held at its location. In addition, MRN provides production services for Sprint Vision, the trackside large screen video display units, at NASCAR Sprint Cup Series event weekends that take place at our motorsports facilities, as well as at Dover International Speedway and Pocono Raceway. MRN also produces and syndicates daily and weekly NASCAR racing-themed programs. MRN derives revenue from the sale of national advertising contained in its syndicated programming, the sale of advertising and audio and video production services for Sprint Vision, as well as from rights fees paid by radio stations that broadcast the programming. EQUITY INVESTMENT Hollywood Casino at Kansas Speedway We have a 50/50 partnership with Penn Hollywood Kansas Inc. (“Penn”), a subsidiary of Penn National Gaming Inc., which operates a Hollywood-themed and branded destination entertainment facility, overlooking turn two at Kansas. Penn is the managing member of Kansas Entertainment and is responsible for the operation of the casino. ISC // 2014 ANNUAL REPORT // FORM 10-K // 4 3 4 PART I ITEM 1. BUSINESS GENERAL facilities: We are a leading owner of major motorsports entertainment facilities and promoter of motorsports themed entertainment activities in the United States. Our motorsports themed event operations consist principally of racing events at our major motorsports entertainment facilities. We currently own and/or operate 13 of the nation’s major motorsports entertainment (cid:127) Auto Club Speedway of Southern CaliforniaSM ("Auto Club Speedway") in California; (cid:127) Daytona International Speedway® ("Daytona") in Florida; (cid:127) Talladega Superspeedway® ("Talladega") in Alabama; (cid:127) Kansas Speedway® ("Kansas") in Kansas; (cid:127) Richmond International Raceway® ("Richmond") in Virginia; (cid:127) Michigan International Speedway® ("Michigan") in Michigan; (cid:127) Darlington Raceway® ("Darlington") in South Carolina; (cid:127) Chicagoland Speedway® ("Chicagoland") in Illinois; (cid:127) Martinsville Speedway® ("Martinsville") in Virginia; (cid:127) Phoenix International Raceway® ("Phoenix") in Arizona; (cid:127) Homestead-Miami SpeedwaySM ("Homestead") in Florida; (cid:127) Watkins Glen International® ("Watkins Glen") in New York; and (cid:127) Route 66 RacewaySM ("Route 66") in Illinois. In 2014, these motorsports entertainment facilities promoted well over 100 stock car, open wheel, sports car, truck, motorcycle and other racing events, including: (cid:127) 21 National Association for Stock Car Auto Racing (“NASCAR”) Sprint Cup Series events; (cid:127) 15 NASCAR Xfinity Series events; (cid:127) 9 NASCAR Camping World Truck Series events; (cid:127) 3 International Motor Sports Association (“IMSA”) Tudor United SportsCar Championship Series events including the premier sports car endurance event in the United States, the Rolex 24 at Daytona; (cid:127) One National Hot Rod Association (“NHRA”) Mellow Yellow drag racing series event; (cid:127) One IndyCar ("IndyCar") Series event; and (cid:127) A number of other prestigious stock car, sports car, open wheel and motorcycle events. Our business consists principally of promoting racing events at these major motorsports entertainment facilities, which, in total, currently have approximately 831,500 grandstand seats and 527 suites. We earn revenues and generate substantial cash flows primarily from admissions, television media rights fees, promotion and sponsorship fees, hospitality rentals (including luxury suites, chalets and the hospitality portion of club seating), advertising revenues, royalties from licenses of our trademarks, parking and camping, and track rentals. We own Americrown Service Corporation (“Americrown”), which provides catering, concessions and services at certain of our motorsports entertainment facilities and Motorsports Authentics ("MA") which sells officially licensed NASCAR and race team merchandise at our motorsports entertainment facilities as well as certain facilities we do not own. We also own and operate the Motor Racing Network, Inc. ("MRN") radio network, also doing business under the name “MRN Radio”, the nation’s largest independent motorsports radio network in terms of event programming. We also INCORPORATION We were incorporated in 1953 under the laws of the State of Florida under the name “Bill France Racing, Inc.” and changed our name to “Daytona International Speedway Corporation” in 1957. With the groundbreaking for Talladega Superspeedway in 1968, we changed our name to “International Speedway Corporation.” Our principal executive offices are located at One Daytona Boulevard, Daytona Beach, Florida 32114, and our telephone number is (386) 254-2700. We maintain a website at http://www.internationalspeedwaycorporation.com/. The information on our website is not part of this report. OPERATIONS The general nature of our business is a motorsports themed amusement enterprise, furnishing amusement to the public in the form of motorsports themed entertainment. Our motorsports themed event operations consist principally of racing events at our major motorsports entertainment facilities, which include providing catering, and food and beverage concessions at our motorsports entertainment facilities that host NASCAR Sprint Cup Series events except for catering, and food and beverage concessions at Chicagoland and Route 66 . Our other operations include MRN; our 50.0 percent equity investment in the joint venture Kansas Entertainment, LLC ("Kansas Entertainment"), which operates the Hollywood Casino at Kansas Speedway; and certain other activities including souvenir merchandising operations. We derived approximately 86.3 percent of our 2014 revenues from NASCAR-sanctioned racing events at our wholly owned motorsports entertainment facilities. In addition to events sanctioned by NASCAR, in fiscal 2014, we promoted other stock car, sports car, open wheel, motorcycle and go-kart racing events. Food, Beverage and Merchandise Operations We conduct, either through operations of the particular facility or through our wholly owned subsidiary, Americrown, souvenir merchandising operations, food and beverage concession operations and catering services, both in suites and chalets, for customers at each of our motorsports entertainment facilities with the exception of food and beverage concessions and catering services at Chicagoland and Route 66. We also sell officially licensed NASCAR and race team merchandise at our motorsports entertainment facilities as well as certain facilities we do not own, through our wholly owned subsidiary, MA. In January 2015, the Company entered into a 10-year agreement with Fanatics Retail Group Concessions, Inc. ("Fanatics") for Fanatics to have exclusive retail merchandise rights for its track trademarks and certain other intellectual property at all ISC tracks (see Merchandising Operations in Future Trends In Operating Results of MANAGEMENT'S DISCUSSION AND ANALYSIS). Motor Racing Network, Inc. Our wholly owned subsidiary, MRN, also does business under the name “MRN Radio”. While not a radio station, MRN creates motorsports-related programming content carried on radio stations around the country, as well as a national satellite radio service, Sirius XM Radio. MRN produces and syndicates to radio stations live coverage of the NASCAR Sprint Cup, Xfinity and Camping World Truck series races and certain other races conducted at our motorsports entertainment facilities, as well as some races conducted at motorsports entertainment facilities we do not own. Sirius XM Radio also compensates MRN for the contemporaneous re-airing of race broadcasts and certain other production services. MRN produces and provides unique content to its website, http://www.motorracingnetwork.com/, and derives revenue from the sale of advertising on such website. Each motorsports entertainment facility has the ability to separately contract for the rights to radio broadcasts of NASCAR and certain other events held at its location. In addition, MRN provides production services for Sprint Vision, the trackside large screen video display units, at NASCAR Sprint Cup Series event weekends that take place at our motorsports facilities, as well as at Dover International Speedway and Pocono Raceway. MRN also produces and syndicates daily and weekly NASCAR racing-themed programs. MRN derives revenue from the sale of national advertising contained in its syndicated programming, the sale of advertising and audio and video production services for Sprint Vision, as well as from rights fees paid by radio stations that broadcast the programming. have an equity investment in a Hollywood Casino at Kansas Speedway that has generated substantial equity earnings and cash EQUITY INVESTMENT distributions to us since its opening in fiscal year 2012. Hollywood Casino at Kansas Speedway At the beginning of fiscal 2015, the NASCAR Nationwide Series became the NASCAR Xfinity Series. Throughout this document, the naming convention for this series is consistent with the current branding. 3 We have a 50/50 partnership with Penn Hollywood Kansas Inc. (“Penn”), a subsidiary of Penn National Gaming Inc., which operates a Hollywood-themed and branded destination entertainment facility, overlooking turn two at Kansas. Penn is the managing member of Kansas Entertainment and is responsible for the operation of the casino. 4 ISC // 2014 ANNUAL REPORT // FORM 10-K // 5 Other Activities From time to time, we use our motorsports entertainment facilities for testing for teams, driving schools, riding experiences, car shows, auto fairs, concerts and settings for television commercials, print advertisements and motion pictures. We also rent “show cars” for promotional events. Competition We are among the largest owners of major motorsports themed entertainment facilities based on revenues, number of facilities owned and/or operated, number of motorsports themed events promoted and market capitalization. Racing events compete with other professional sports such as football, basketball, hockey and baseball, as well as other recreational events and activities. Our events also compete with other racing events sanctioned by various racing bodies such as NASCAR, the American Sportbike Racing Association — Championship Cup Series, United States Auto Club (“USAC”), Sports Car Club of America (“SCCA”), IMSA, IndyCar Series, Automobile Racing Club of America (“ARCA”) and others, many of which are often held on the same dates at separate motorsports entertainment facilities. We believe that the type and caliber of promoted racing events, facility location, sight lines, pricing, variety of motorsports themed amusement options and level of customer conveniences and amenities are the principal factors that distinguish competing motorsports entertainment facilities. Employees As of November 30, 2014 we had over 845 full-time employees. We also engage a significant number of temporary personnel to assist during periods of peak attendance at our events, some of whom are volunteers. None of our employees are represented by a labor union. We believe that we enjoy a good relationship with our employees. Company Website Access and SEC Filings The Company’s website may be accessed at http://www.internationalspeedwaycorporation.com/. Through a link on the Investor Relations portion of our internet website, you can access all of our filings with the Securities and Exchange Commission (“SEC”). However, in the event that the website is inaccessible our filings are available to the public over the internet at the SEC’s website at http://www.sec.gov/. You may also read and copy any document we file with the SEC at its public reference facilities at 100 F Street, NE, Washington, D.C. 20549. You can also obtain copies of the documents at prescribed rates by writing to the Public Reference Room of the SEC at 100 F Street, NE, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities. You can also obtain information about us at the offices of the National Association of Securities Dealers, 1735 K St., N.W., Washington, D.C. 20006. ITEM 1A. RISK FACTORS Forward-looking statements This report contains forward-looking statements. The documents incorporated into this report by reference may also contain forward-looking statements. You can identify a forward-looking statement by our use of the words “anticipate,” “estimate,” “expect,” “may,” “believe,” “objective,” “projection,” “forecast,” “goal,” and similar expressions. Forward-looking statements include our statements regarding the timing of future events, our anticipated future operations and our anticipated future financial position and cash requirements. We believe that the expectations reflected in our forward-looking statements are reasonable. We do not know whether our expectations will ultimately prove correct. In the section that follows below, in cautionary statements made elsewhere in this report, and in other filings we have made with the SEC, we list the important factors that could cause our actual results to differ from our expectations. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors described below and other factors set forth in or incorporated by reference in this report. These factors and cautionary statements apply to all future forward-looking statements we make. Many of these factors are beyond our ability to control or predict. Do not put undue reliance on forward-looking statements or project any future results based on such statements or on present or prior earnings levels. Additional information concerning these or other factors, which could cause the actual results to differ materially from those in our forward-looking statements is contained from time to time in our other SEC filings. Copies of those filings are available from us and/or the SEC. practices, could limit our future success Adverse changes in our relationships with NASCAR and other motorsports sanctioning bodies, or their present sanctioning Our success has been, and is expected to remain, dependent on maintaining good working relationships with the organizations that sanction the races we promote at our facilities, particularly NASCAR. NASCAR-sanctioned races conducted at our wholly owned motorsports entertainment facilities accounted for approximately 86.3 percent of our total revenues in fiscal 2014. Each NASCAR sanctioning agreement (and the accompanying media rights fees revenue) is awarded on an annual basis and NASCAR is not required to continue to enter into, renew or extend sanctioning agreements with us to conduct any event. Any adverse change in the present sanctioning practices, or the present economic model, could adversely impact our operations and revenue. Moreover, although our general growth strategy includes the possible development and/or acquisition of additional motorsports entertainment facilities, we have no assurance that any sanctioning body, including NASCAR, will enter into sanctioning agreements with us to conduct races at any newly developed or acquired motorsports entertainment facilities. Failure to obtain a sanctioning agreement for a major NASCAR event could negatively affect us. Similarly, although NASCAR has in the past approved our requests for realignment of sanctioned events, NASCAR is not obligated to modify its race schedules to allow us to schedule our races more efficiently or profitably. Changes to media rights revenues could adversely affect us Domestic broadcast and ancillary media rights fees revenues derived from NASCAR's three national touring series -- the NASCAR Sprint Cup Series, Xfinity Series, and Camping World Truck Series -- are an important component of our revenue and earnings stream and any adverse changes to such rights fees revenues could adversely impact our results. Any material changes in the media industry that could lead to differences in historical practices or decreases in the term and/or financial value of future broadcast agreements could have a material adverse effect on our revenues and financial results. Changes, declines and delays in consumer and corporate spending as well as illiquid credit markets could adversely affect us Our financial results depend significantly upon a number of factors relating to discretionary consumer and corporate spending, including economic conditions affecting disposable consumer income and corporate budgets such as: (cid:127) Employment; (cid:127) Business conditions; (cid:127) Interest rates; and (cid:127) Taxation rates. These factors can impact both attendance at our events and advertising and marketing dollars available from the motorsports industry’s principal sponsors and potential sponsors. Economic and other lifestyle conditions such as illiquid consumer and business credit markets adversely affect consumer and corporate spending thereby impacting our revenue, profitability and financial results. Further, changes in consumer behavior such as deferred purchasing decisions and decreased spending budgets adversely impact our cash flow visibility and revenues. The significant economic deterioration that began in fiscal 2008, for example, has impacted these areas of our business and our revenues and financial results. Unavailability of credit on favorable terms can adversely impact our growth, development and capital spending plans. General economic conditions were significantly and negatively impacted by the September 11, 2001 terrorist attacks and could be similarly affected by any future attacks, by a terrorist attack at any mass gathering or fear of such attacks, or by other acts or prospects of war. Any future attacks or wars or related threats could also increase our expenses related to insurance, security or other related matters. A weakened economic and business climate, as well as consumer uncertainty and the loss of consumer confidence created by such a climate, could adversely affect our financial results. Finally, our financial results could also be adversely impacted by a widespread outbreak of a severe epidemiological crisis. ISC // 2014 ANNUAL REPORT // FORM 10-K // 6 5 6 From time to time, we use our motorsports entertainment facilities for testing for teams, driving schools, riding experiences, car shows, auto fairs, concerts and settings for television commercials, print advertisements and motion pictures. We also rent Other Activities “show cars” for promotional events. Competition We are among the largest owners of major motorsports themed entertainment facilities based on revenues, number of facilities owned and/or operated, number of motorsports themed events promoted and market capitalization. Racing events compete with other professional sports such as football, basketball, hockey and baseball, as well as other recreational events and activities. Our events also compete with other racing events sanctioned by various racing bodies such as NASCAR, the American Sportbike Racing Association — Championship Cup Series, United States Auto Club (“USAC”), Sports Car Club of America (“SCCA”), IMSA, IndyCar Series, Automobile Racing Club of America (“ARCA”) and others, many of which are often held on the same dates at separate motorsports entertainment facilities. We believe that the type and caliber of promoted racing events, facility location, sight lines, pricing, variety of motorsports themed amusement options and level of customer conveniences and amenities are the principal factors that distinguish competing motorsports entertainment facilities. Employees As of November 30, 2014 we had over 845 full-time employees. We also engage a significant number of temporary personnel to assist during periods of peak attendance at our events, some of whom are volunteers. None of our employees are represented by a labor union. We believe that we enjoy a good relationship with our employees. Company Website Access and SEC Filings The Company’s website may be accessed at http://www.internationalspeedwaycorporation.com/. Through a link on the Investor Relations portion of our internet website, you can access all of our filings with the Securities and Exchange Commission (“SEC”). However, in the event that the website is inaccessible our filings are available to the public over the internet at the SEC’s website at http://www.sec.gov/. You may also read and copy any document we file with the SEC at its public reference facilities at 100 F Street, NE, Washington, D.C. 20549. You can also obtain copies of the documents at prescribed rates by writing to the Public Reference Room of the SEC at 100 F Street, NE, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities. You can also obtain information about us at the offices of the National Association of Securities Dealers, 1735 K St., N.W., Washington, D.C. 20006. ITEM 1A. RISK FACTORS Forward-looking statements This report contains forward-looking statements. The documents incorporated into this report by reference may also contain forward-looking statements. You can identify a forward-looking statement by our use of the words “anticipate,” “estimate,” “expect,” “may,” “believe,” “objective,” “projection,” “forecast,” “goal,” and similar expressions. Forward-looking statements include our statements regarding the timing of future events, our anticipated future operations and our anticipated future financial position and cash requirements. expectations will ultimately prove correct. We believe that the expectations reflected in our forward-looking statements are reasonable. We do not know whether our In the section that follows below, in cautionary statements made elsewhere in this report, and in other filings we have made with the SEC, we list the important factors that could cause our actual results to differ from our expectations. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors described below and other factors set forth in or incorporated by reference in this report. These factors and cautionary statements apply to all future forward-looking statements we make. Many of these factors are beyond our ability to control or predict. Do not put undue reliance on forward-looking statements or project any future results based on such statements or on present or prior earnings levels. Additional information concerning these or other factors, which could cause the actual results to differ materially from those in our forward-looking statements is contained from time to time in our other SEC filings. Copies of those filings are available from us and/or the SEC. Adverse changes in our relationships with NASCAR and other motorsports sanctioning bodies, or their present sanctioning practices, could limit our future success Our success has been, and is expected to remain, dependent on maintaining good working relationships with the organizations that sanction the races we promote at our facilities, particularly NASCAR. NASCAR-sanctioned races conducted at our wholly owned motorsports entertainment facilities accounted for approximately 86.3 percent of our total revenues in fiscal 2014. Each NASCAR sanctioning agreement (and the accompanying media rights fees revenue) is awarded on an annual basis and NASCAR is not required to continue to enter into, renew or extend sanctioning agreements with us to conduct any event. Any adverse change in the present sanctioning practices, or the present economic model, could adversely impact our operations and revenue. Moreover, although our general growth strategy includes the possible development and/or acquisition of additional motorsports entertainment facilities, we have no assurance that any sanctioning body, including NASCAR, will enter into sanctioning agreements with us to conduct races at any newly developed or acquired motorsports entertainment facilities. Failure to obtain a sanctioning agreement for a major NASCAR event could negatively affect us. Similarly, although NASCAR has in the past approved our requests for realignment of sanctioned events, NASCAR is not obligated to modify its race schedules to allow us to schedule our races more efficiently or profitably. Changes to media rights revenues could adversely affect us Domestic broadcast and ancillary media rights fees revenues derived from NASCAR's three national touring series -- the NASCAR Sprint Cup Series, Xfinity Series, and Camping World Truck Series -- are an important component of our revenue and earnings stream and any adverse changes to such rights fees revenues could adversely impact our results. Any material changes in the media industry that could lead to differences in historical practices or decreases in the term and/or financial value of future broadcast agreements could have a material adverse effect on our revenues and financial results. Changes, declines and delays in consumer and corporate spending as well as illiquid credit markets could adversely affect us Our financial results depend significantly upon a number of factors relating to discretionary consumer and corporate spending, including economic conditions affecting disposable consumer income and corporate budgets such as: (cid:127) Employment; (cid:127) Business conditions; (cid:127) Interest rates; and (cid:127) Taxation rates. These factors can impact both attendance at our events and advertising and marketing dollars available from the motorsports industry’s principal sponsors and potential sponsors. Economic and other lifestyle conditions such as illiquid consumer and business credit markets adversely affect consumer and corporate spending thereby impacting our revenue, profitability and financial results. Further, changes in consumer behavior such as deferred purchasing decisions and decreased spending budgets adversely impact our cash flow visibility and revenues. The significant economic deterioration that began in fiscal 2008, for example, has impacted these areas of our business and our revenues and financial results. Unavailability of credit on favorable terms can adversely impact our growth, development and capital spending plans. General economic conditions were significantly and negatively impacted by the September 11, 2001 terrorist attacks and could be similarly affected by any future attacks, by a terrorist attack at any mass gathering or fear of such attacks, or by other acts or prospects of war. Any future attacks or wars or related threats could also increase our expenses related to insurance, security or other related matters. A weakened economic and business climate, as well as consumer uncertainty and the loss of consumer confidence created by such a climate, could adversely affect our financial results. Finally, our financial results could also be adversely impacted by a widespread outbreak of a severe epidemiological crisis. 5 6 ISC // 2014 ANNUAL REPORT // FORM 10-K // 7 Delay, postponement or cancellation of major motorsports events because of weather or other factors could adversely affect us expected to realize the full benefits from these projects, such as increased revenue, or the benefits may ultimately be smaller We promote outdoor motorsports entertainment events. Weather conditions affect sales of, among other things, tickets, food, drinks and merchandise at these events. Poor weather conditions prior to an event, or even the forecast of poor weather conditions, could have a negative impact on us, particularly for walk-up ticket sales to events which are not sold out in advance, as well as renewals for the following year. If an event scheduled for one of our facilities is delayed or postponed because of weather or other reasons such as, for example, the general postponement of all major sporting events in the United States following the September 11, 2001 terrorism attacks, we could incur increased expenses associated with conducting the rescheduled event, as well as possible decreased revenues from tickets, food, drinks and merchandise at the rescheduled event. If such an event is canceled, we would incur the expenses associated with preparing to conduct the event as well as losing the revenues, including any live broadcast revenues, associated with the event. If a canceled event is part of the NASCAR Sprint Cup, Xfinity or Camping World Truck series, in the year of cancellation we could experience a reduction in the amount of money we expect to receive from television revenues for all of our NASCAR- sanctioned events in the series that experienced the cancellation. This would occur if, as a result of the cancellation, and without regard to whether the canceled event was scheduled for one of our facilities, NASCAR experienced a reduction in television revenues greater than the amount scheduled to be paid to the promoter of the canceled event. France Family Group control of NASCAR creates conflicts of interest Members of the France Family Group own and control NASCAR. James C. France, our Chairman of the Board, and Lesa France Kennedy, our Vice Chairwoman and Chief Executive Officer, are both members of the France Family Group in addition to holding positions with NASCAR. Each of them, as well as our general counsel, spends part of his or her time on NASCAR’s business. Because of these relationships, even though all related party transactions are approved by our Audit Committee, certain potential conflicts of interest between us and NASCAR exist with respect to, among other things: (cid:127) The terms of any sanctioning agreements that may be awarded to us by NASCAR; (cid:127) The amount of time the employees mentioned above and certain of our other employees devote to NASCAR’s affairs; and (cid:127) The amounts charged or paid to NASCAR for office rental, transportation costs, shared executives, administrative expenses and similar items. France Family Group members, together, beneficially own approximately 39.0 percent of our capital stock and control over 72.0 percent of the combined voting power of both classes of our common stock. Historically members of the France Family Group have voted their shares of common stock in the same manner. Accordingly, they can (without the approval of our other shareholders) elect our entire Board of Directors and determine the outcome of various matters submitted to shareholders for approval, including fundamental corporate transactions and have done so in the past. If holders of class B common stock other than the France Family Group elect to convert their beneficially owned shares of class B common stock into shares of class A common stock and members of the France Family Group do not convert their shares, the relative voting power of the France Family Group will increase. Voting control by the France Family Group may discourage certain types of transactions involving an actual or potential change in control of us, including transactions in which the holders of class A common stock might receive a premium for their shares over prevailing market prices. Our success depends on the availability and performance of key personnel Our continued success depends upon the availability and performance of our senior management team, which possesses unique and extensive industry knowledge and experience. Our inability to retain and attract key employees in the future, could have a negative effect on our operations and business plans. Our capital allocation plan may not achieve anticipated results Enhancing the live event experience for our guests by investing in our major motorsports facilities is a critical strategy for our growth, and our Board of Directors has endorsed a capital allocation plan for fiscal 2013 through fiscal 2017 related to this strategy, which includes DAYTONA Rising. This plan involves significant challenges and risks including that the projects do not advance our business strategy or that we do not realize a satisfactory return on our investment. It may take longer than than anticipated or may not be realized. These events could harm our operating results or financial condition. Further, these projects may not be completed on time, which could result in a negative financial impact. Future impairment or loss on disposal of goodwill and other intangible assets or long-lived assets by us or our equity investments and joint ventures could adversely affect our financial results Our consolidated balance sheets include significant amounts of goodwill and other intangible assets and long-lived assets which could be subject to impairment or loss on retirement. During the fiscal years ended November 30, 2012, 2013 and 2014 we recorded before-tax charges as losses on retirements of long-lived assets primarily attributable to the removal of certain other long-lived assets located at our motorsports facilities totaling approximately $11.1 million, $16.6 million and $10.1 million, respectively. As of November 30, 2014, goodwill and other intangible assets and property and equipment accounts for approximately $1.7 billion, or 80.8 percent of our total assets. We account for our goodwill and other intangible assets in accordance with Accounting Standards Codification (“ASC”) 350, “Intangibles — Goodwill and Other”, and for our long-lived assets in accordance with ASC 360, “Property, Plant and Equipment.” Both ASC 350 and 360 require testing goodwill and other intangible assets and long-lived assets for impairment based on assumptions regarding our future business outlook. While we continue to review and analyze many factors that can impact our business prospects in the future, our analyses are subjective and are based on conditions existing at and trends leading up to the time the assumptions are made. Actual results could differ materially from these assumptions. Our judgments with regard to our future business prospects could impact whether or not an impairment is deemed to have occurred, as well as the timing of the recognition of such an impairment charge. If future testing for impairment of goodwill and other intangible assets or long-lived assets results in a reduction in their carrying value, we will be required to take the amount of the reduction in such goodwill and other intangible assets or long-lived assets as a non-cash charge against operating income, which would also reduce shareholders’ equity. In addition, our growth strategy includes investing in certain joint venture opportunities. In these equity investments we exert significant influence on the investee but do not have effective control over the investee. These equity investments add an additional element of risk where they may not advance our business strategy or that we do not realize a satisfactory return on our investment. It may take longer than expected to realize the full benefits from these equity investments, or the benefits may ultimately be smaller than anticipated or may not be realized. These events could harm our operating results or financial condition. Our equity investments total approximately $122.6 million at November 30, 2014. Personal injuries to spectators and participants could adversely affect financial results Motorsports can be dangerous to participants and spectators. We maintain insurance policies that provide coverage within limits that we believe should generally be sufficient to protect us from a large financial loss due to liability for personal injuries sustained by persons on our property in the ordinary course of our business. There can be no assurance, however, that the insurance will be adequate or available at all times and in all circumstances. Our financial condition and results of operations could be affected negatively to the extent claims and expenses in connection with these injuries are greater than insurance recoveries or if insurance coverage for these exposures becomes unavailable or prohibitively expensive. In addition, sanctioning bodies could impose more stringent rules and regulations for safety, security and operational activities. Such regulations include, for example, the improvements and additions of retaining walls at our facilities, which have increased our capital expenditures, and increased security procedures, which have increased our operational expenses. We operate in a highly competitive environment As an entertainment company, our racing events face competition from other spectator-oriented sporting events and other leisure, entertainment and recreational activities, including professional football, basketball, hockey and baseball. As a result, our revenues are affected by the general popularity of motorsports, the availability of alternative forms of recreation and changing consumer preferences and habits, including how consumers consume entertainment. Our racing events also compete with other racing events sanctioned by various racing bodies such as NASCAR, USAC, NHRA, SCCA, IMSA, ARCA and others. Many sports and entertainment businesses have resources that exceed ours. ISC // 2014 ANNUAL REPORT // FORM 10-K // 8 7 8 Delay, postponement or cancellation of major motorsports events because of weather or other factors could adversely affect us We promote outdoor motorsports entertainment events. Weather conditions affect sales of, among other things, tickets, food, drinks and merchandise at these events. Poor weather conditions prior to an event, or even the forecast of poor weather conditions, could have a negative impact on us, particularly for walk-up ticket sales to events which are not sold out in advance, as well as renewals for the following year. If an event scheduled for one of our facilities is delayed or postponed because of weather or other reasons such as, for example, the general postponement of all major sporting events in the United States following the September 11, 2001 terrorism attacks, we could incur increased expenses associated with conducting the rescheduled event, as well as possible decreased revenues from tickets, food, drinks and merchandise at the rescheduled event. If such an event is canceled, we would incur the expenses associated with preparing to conduct the event as well as losing the revenues, including any live broadcast revenues, associated with the event. If a canceled event is part of the NASCAR Sprint Cup, Xfinity or Camping World Truck series, in the year of cancellation we could experience a reduction in the amount of money we expect to receive from television revenues for all of our NASCAR- sanctioned events in the series that experienced the cancellation. This would occur if, as a result of the cancellation, and without regard to whether the canceled event was scheduled for one of our facilities, NASCAR experienced a reduction in television revenues greater than the amount scheduled to be paid to the promoter of the canceled event. France Family Group control of NASCAR creates conflicts of interest Members of the France Family Group own and control NASCAR. James C. France, our Chairman of the Board, and Lesa France Kennedy, our Vice Chairwoman and Chief Executive Officer, are both members of the France Family Group in addition to holding positions with NASCAR. Each of them, as well as our general counsel, spends part of his or her time on NASCAR’s business. Because of these relationships, even though all related party transactions are approved by our Audit Committee, certain potential conflicts of interest between us and NASCAR exist with respect to, among other things: (cid:127) The terms of any sanctioning agreements that may be awarded to us by NASCAR; (cid:127) The amount of time the employees mentioned above and certain of our other employees devote to NASCAR’s affairs; (cid:127) The amounts charged or paid to NASCAR for office rental, transportation costs, shared executives, administrative and expenses and similar items. France Family Group members, together, beneficially own approximately 39.0 percent of our capital stock and control over 72.0 percent of the combined voting power of both classes of our common stock. Historically members of the France Family Group have voted their shares of common stock in the same manner. Accordingly, they can (without the approval of our other shareholders) elect our entire Board of Directors and determine the outcome of various matters submitted to shareholders for approval, including fundamental corporate transactions and have done so in the past. If holders of class B common stock other than the France Family Group elect to convert their beneficially owned shares of class B common stock into shares of class A common stock and members of the France Family Group do not convert their shares, the relative voting power of the France Family Group will increase. Voting control by the France Family Group may discourage certain types of transactions involving an actual or potential change in control of us, including transactions in which the holders of class A common stock might receive a premium for their shares over prevailing market prices. Our success depends on the availability and performance of key personnel Our continued success depends upon the availability and performance of our senior management team, which possesses unique and extensive industry knowledge and experience. Our inability to retain and attract key employees in the future, could have a negative effect on our operations and business plans. Our capital allocation plan may not achieve anticipated results Enhancing the live event experience for our guests by investing in our major motorsports facilities is a critical strategy for our growth, and our Board of Directors has endorsed a capital allocation plan for fiscal 2013 through fiscal 2017 related to this strategy, which includes DAYTONA Rising. This plan involves significant challenges and risks including that the projects do not advance our business strategy or that we do not realize a satisfactory return on our investment. It may take longer than expected to realize the full benefits from these projects, such as increased revenue, or the benefits may ultimately be smaller than anticipated or may not be realized. These events could harm our operating results or financial condition. Further, these projects may not be completed on time, which could result in a negative financial impact. Future impairment or loss on disposal of goodwill and other intangible assets or long-lived assets by us or our equity investments and joint ventures could adversely affect our financial results Our consolidated balance sheets include significant amounts of goodwill and other intangible assets and long-lived assets which could be subject to impairment or loss on retirement. During the fiscal years ended November 30, 2012, 2013 and 2014 we recorded before-tax charges as losses on retirements of long-lived assets primarily attributable to the removal of certain other long-lived assets located at our motorsports facilities totaling approximately $11.1 million, $16.6 million and $10.1 million, respectively. As of November 30, 2014, goodwill and other intangible assets and property and equipment accounts for approximately $1.7 billion, or 80.8 percent of our total assets. We account for our goodwill and other intangible assets in accordance with Accounting Standards Codification (“ASC”) 350, “Intangibles — Goodwill and Other”, and for our long-lived assets in accordance with ASC 360, “Property, Plant and Equipment.” Both ASC 350 and 360 require testing goodwill and other intangible assets and long-lived assets for impairment based on assumptions regarding our future business outlook. While we continue to review and analyze many factors that can impact our business prospects in the future, our analyses are subjective and are based on conditions existing at and trends leading up to the time the assumptions are made. Actual results could differ materially from these assumptions. Our judgments with regard to our future business prospects could impact whether or not an impairment is deemed to have occurred, as well as the timing of the recognition of such an impairment charge. If future testing for impairment of goodwill and other intangible assets or long-lived assets results in a reduction in their carrying value, we will be required to take the amount of the reduction in such goodwill and other intangible assets or long-lived assets as a non-cash charge against operating income, which would also reduce shareholders’ equity. In addition, our growth strategy includes investing in certain joint venture opportunities. In these equity investments we exert significant influence on the investee but do not have effective control over the investee. These equity investments add an additional element of risk where they may not advance our business strategy or that we do not realize a satisfactory return on our investment. It may take longer than expected to realize the full benefits from these equity investments, or the benefits may ultimately be smaller than anticipated or may not be realized. These events could harm our operating results or financial condition. Our equity investments total approximately $122.6 million at November 30, 2014. Personal injuries to spectators and participants could adversely affect financial results Motorsports can be dangerous to participants and spectators. We maintain insurance policies that provide coverage within limits that we believe should generally be sufficient to protect us from a large financial loss due to liability for personal injuries sustained by persons on our property in the ordinary course of our business. There can be no assurance, however, that the insurance will be adequate or available at all times and in all circumstances. Our financial condition and results of operations could be affected negatively to the extent claims and expenses in connection with these injuries are greater than insurance recoveries or if insurance coverage for these exposures becomes unavailable or prohibitively expensive. In addition, sanctioning bodies could impose more stringent rules and regulations for safety, security and operational activities. Such regulations include, for example, the improvements and additions of retaining walls at our facilities, which have increased our capital expenditures, and increased security procedures, which have increased our operational expenses. We operate in a highly competitive environment As an entertainment company, our racing events face competition from other spectator-oriented sporting events and other leisure, entertainment and recreational activities, including professional football, basketball, hockey and baseball. As a result, our revenues are affected by the general popularity of motorsports, the availability of alternative forms of recreation and changing consumer preferences and habits, including how consumers consume entertainment. Our racing events also compete with other racing events sanctioned by various racing bodies such as NASCAR, USAC, NHRA, SCCA, IMSA, ARCA and others. Many sports and entertainment businesses have resources that exceed ours. 7 8 ISC // 2014 ANNUAL REPORT // FORM 10-K // 9 We are subject to changing governmental regulations and legal standards that could increase our expenses ITEM 2. PROPERTIES We believe that our operations are in material compliance with all applicable federal, state and local environmental, land use and other laws and regulations. If it is determined that damage to persons or property or contamination of the environment has been caused or exacerbated by the operation or conduct of our business or by pollutants, substances, contaminants or wastes used, generated or disposed of by us, or if pollutants, substances, contaminants or wastes are found on property currently or previously owned or operated by us, we 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 we are self-insured could be material. State and local laws relating to the protection of the environment also can include noise abatement laws that may be applicable to our racing events. Our existing facilities continue to be used in situations where the standards for new facilities to comply with certain laws and regulations, including the Americans with Disabilities Act, are constantly evolving. Changes in the provisions or application of federal, state or local environmental, land use or other laws, regulations or requirements to our facilities or operations, or the discovery of previously unknown conditions, also could require us to make additional material expenditures to remediate or attain compliance. Regulations governing the use and development of real estate may prevent us from acquiring or developing prime locations for motorsports entertainment facilities, substantially delay or complicate the process of improving existing facilities, and/or increase the costs of any of such activities. If we do not maintain the security of customer-related information, we could damage our reputation with customers, incur substantial additional costs and become subject to litigation In the ordinary course of our business, we collect and store certain personal information including but not limited to name, address and payment account information from individuals, such as our customers, employees and business partners. We also process customer payment card transactions. In addition, our online operations depend upon the secure transmission of confidential, personal and payment account information over public networks, including information permitting cashless payments. We limit the amount of payment information by using “tokens” which is an industry best practice that does not require the credit card number to be stored. Significant resources are dedicated both internally and with external experts to help us manage information security, network security, data encryption, and other security practices to protect our systems and data, but these security measures cannot provide absolute security. As with all companies, these security measures are subject to third-party security breaches, employee error or malfeasance, or other unanticipated situations. Such a compromise of our security systems that results in personal or payment network information being obtained by unauthorized persons could adversely affect our reputation with our customers, the credit card brands (such as VISA, MasterCard and American Express) and others. Such a compromise could also adversely affect our operations, results of operations, financial condition and liquidity, and could result in litigation against us, the imposition of penalties, restrictions or other requirements by regulatory bodies or the credit card brands. In addition, a security breach could require that we expend significant additional resources related to our information security systems and could result in a disruption of our operations, particularly our sales operations. While we maintain insurance against this risk, not all losses would be covered by such insurance. Our quarterly results are subject to seasonality and variability We derive most of our income from a limited number of NASCAR-sanctioned races. As a result, our business has been, and is expected to remain, highly seasonal based on the timing of major racing events. Future schedule changes as determined by NASCAR or other sanctioning bodies, as well as the acquisition of additional, or divestiture of existing, motorsports entertainment facilities could impact the timing of our major events in comparison to prior or future periods. ITEM 1B. UNRESOLVED STAFF COMMENTS None Motorsports Entertainment Facilities November 30, 2014: The following table sets forth current information relating to each of our motorsports entertainment facilities as of TRACK NAME LOCATION SEATS SUITES EVENTS EVENTS(1) 2014 YEAR END CAPACITY NASCAR SPRINT CUP OTHER MAJOR Daytona International Daytona Beach, 147,000 103 Speedway Talladega Superspeedway Florida Talladega, Alabama Kansas City, Virginia Brooklyn, Michigan Fontana, California Darlington, Kansas Speedway Kansas Richmond International Richmond, Raceway Michigan International Speedway Auto Club Speedway of Southern California Darlington Raceway South Carolina Chicagoland Speedway Joliet, Illinois 55,500 Martinsville, Martinsville Speedway Virginia Phoenix International Raceway Phoenix, Arizona Homestead-Miami Speedway Watkins Glen International Homestead, Florida Watkins Glen, New York 78,000 74,000 71,000 71,000 68,000 58,000 55,000 51,000 46,000 33,000 30 56 40 46 80 13 24 20 45 66 4 4 2 2 2 2 1 1 1 2 2 1 1 6 3 3 2 3 2 2 4 2 3 5 3 1 MARKETS SERVED MEDIA MARKET RANK Orlando/ Central Florida Atlanta/ Birmingham 18 9/43 Kansas City Washington D.C. Detroit Los Angeles Columbia Chicago Greensboro/ High Point Phoenix Miami Buffalo/ Rochester 31 8 12 2 77 3 46 11 16 3 52/78 Route 66 Raceway Joliet, Illinois 24,000 n/a — (2) Chicago (1) Other major events include NASCAR Xfinity and Camping World Truck series; ARCA; IMSA; IndyCar; and, AMA Pro Racing. (2) Route 66's other major event includes an NHRA Mellow Yellow Drag Racing Series event. DAYTONA INTERNATIONAL SPEEDWAY. Daytona is a 2.5 mile high-banked, lighted, asphalt, tri-oval superspeedway that also includes a 3.6-mile road course. We lease the land on which Daytona International Speedway is located from the City of Daytona Beach. The lease on the property expires in 2054, including renewal options. The facility is situated on 440 acres and is located in Daytona Beach, Florida. TALLADEGA SUPERSPEEDWAY. Talladega is a 2.7 mile high-banked, asphalt, tri-oval superspeedway with a 1.3-mile infield road course. The facility is situated on 1,435 acres and is located about 100 miles from Atlanta, Georgia and approximately 50 miles from Birmingham, Alabama. KANSAS SPEEDWAY. Kansas is a 1.5 mile variable-degree banked, asphalt, tri-oval superspeedway with a 0.9-mile infield road course. The facility is situated on 1,000 acres and is located in Kansas City, Kansas. Overlooking turn two of Kansas is a Hollywood-themed and branded destination entertainment facility (see Equity Investments). RICHMOND INTERNATIONAL RACEWAY. Richmond is a 0.8 mile moderately-banked, lighted, asphalt, oval, intermediate speedway. The facility is situated on 635 acres and is located approximately 10 miles from downtown Richmond, Virginia. ISC // 2014 ANNUAL REPORT // FORM 10-K // 10 9 10 and other laws and regulations. If it is determined that damage to persons or property or contamination of the environment has been caused or exacerbated by the operation or conduct of our business or by pollutants, substances, contaminants or wastes used, generated or disposed of by us, or if pollutants, substances, contaminants or wastes are found on property currently or previously owned or operated by us, we 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 we are self-insured could be material. State and local laws relating to the protection of the environment also can include noise abatement laws that may be applicable to our racing events. attain compliance. Our existing facilities continue to be used in situations where the standards for new facilities to comply with certain laws and regulations, including the Americans with Disabilities Act, are constantly evolving. Changes in the provisions or application of federal, state or local environmental, land use or other laws, regulations or requirements to our facilities or operations, or the discovery of previously unknown conditions, also could require us to make additional material expenditures to remediate or Regulations governing the use and development of real estate may prevent us from acquiring or developing prime locations for motorsports entertainment facilities, substantially delay or complicate the process of improving existing facilities, and/or increase the costs of any of such activities. If we do not maintain the security of customer-related information, we could damage our reputation with customers, incur substantial additional costs and become subject to litigation In the ordinary course of our business, we collect and store certain personal information including but not limited to name, address and payment account information from individuals, such as our customers, employees and business partners. We also process customer payment card transactions. In addition, our online operations depend upon the secure transmission of confidential, personal and payment account information over public networks, including information permitting cashless payments. We limit the amount of payment information by using “tokens” which is an industry best practice that does not require the credit card number to be stored. Significant resources are dedicated both internally and with external experts to help us manage information security, network security, data encryption, and other security practices to protect our systems and data, but these security measures cannot provide absolute security. As with all companies, these security measures are subject to third-party security breaches, employee error or malfeasance, or other unanticipated situations. Such a compromise of our security systems that results in personal or payment network information being obtained by unauthorized persons could adversely affect our reputation with our customers, the credit card brands (such as VISA, MasterCard and American Express) and others. Such a compromise could also adversely affect our operations, results of operations, financial condition and liquidity, and could result in litigation against us, the imposition of penalties, restrictions or other requirements by regulatory bodies or the credit card brands. In addition, a security breach could require that we expend significant additional resources related to our information security systems and could result in a disruption of our operations, particularly our sales operations. While we maintain insurance against this risk, not all losses would be covered by such insurance. Our quarterly results are subject to seasonality and variability We derive most of our income from a limited number of NASCAR-sanctioned races. As a result, our business has been, and is expected to remain, highly seasonal based on the timing of major racing events. Future schedule changes as determined by NASCAR or other sanctioning bodies, as well as the acquisition of additional, or divestiture of existing, motorsports entertainment facilities could impact the timing of our major events in comparison to prior or future periods. ITEM 1B. UNRESOLVED STAFF COMMENTS None We are subject to changing governmental regulations and legal standards that could increase our expenses ITEM 2. PROPERTIES We believe that our operations are in material compliance with all applicable federal, state and local environmental, land use Motorsports Entertainment Facilities The following table sets forth current information relating to each of our motorsports entertainment facilities as of November 30, 2014: TRACK NAME LOCATION SEATS SUITES 2014 YEAR END CAPACITY NASCAR SPRINT CUP EVENTS OTHER MAJOR EVENTS(1) MARKETS SERVED MEDIA MARKET RANK Daytona International Speedway Talladega Superspeedway Kansas Speedway Richmond International Raceway Michigan International Speedway Auto Club Speedway of Southern California Daytona Beach, Florida Talladega, Alabama Kansas City, Kansas Richmond, Virginia Brooklyn, Michigan Fontana, California Darlington, Darlington Raceway South Carolina Chicagoland Speedway Joliet, Illinois Martinsville, Virginia Phoenix, Arizona Homestead, Florida Watkins Glen, New York Martinsville Speedway Phoenix International Raceway Homestead-Miami Speedway Watkins Glen International 147,000 103 78,000 74,000 71,000 71,000 68,000 58,000 55,500 55,000 51,000 46,000 33,000 30 56 40 46 80 13 24 20 45 66 4 4 2 2 2 2 1 1 1 2 2 1 1 Route 66 Raceway Joliet, Illinois 24,000 n/a — 6 3 3 2 3 2 2 4 2 3 5 3 1 Orlando/ Central Florida Atlanta/ Birmingham 18 9/43 Kansas City Washington D.C. Detroit Los Angeles Columbia Chicago Greensboro/ High Point Phoenix Miami Buffalo/ Rochester 31 8 12 2 77 3 46 11 16 52/78 (2) Chicago 3 (1) Other major events include NASCAR Xfinity and Camping World Truck series; ARCA; IMSA; IndyCar; and, AMA Pro Racing. (2) Route 66's other major event includes an NHRA Mellow Yellow Drag Racing Series event. DAYTONA INTERNATIONAL SPEEDWAY. Daytona is a 2.5 mile high-banked, lighted, asphalt, tri-oval superspeedway that also includes a 3.6-mile road course. We lease the land on which Daytona International Speedway is located from the City of Daytona Beach. The lease on the property expires in 2054, including renewal options. The facility is situated on 440 acres and is located in Daytona Beach, Florida. TALLADEGA SUPERSPEEDWAY. Talladega is a 2.7 mile high-banked, asphalt, tri-oval superspeedway with a 1.3-mile infield road course. The facility is situated on 1,435 acres and is located about 100 miles from Atlanta, Georgia and approximately 50 miles from Birmingham, Alabama. KANSAS SPEEDWAY. Kansas is a 1.5 mile variable-degree banked, asphalt, tri-oval superspeedway with a 0.9-mile infield road course. The facility is situated on 1,000 acres and is located in Kansas City, Kansas. Overlooking turn two of Kansas is a Hollywood-themed and branded destination entertainment facility (see Equity Investments). RICHMOND INTERNATIONAL RACEWAY. Richmond is a 0.8 mile moderately-banked, lighted, asphalt, oval, intermediate speedway. The facility is situated on 635 acres and is located approximately 10 miles from downtown Richmond, Virginia. 9 10 ISC // 2014 ANNUAL REPORT // FORM 10-K // 11 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES At November 30, 2014, we 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 the Over-The-Counter Bulletin Board under the symbol “ISCB.OB” and, at the option of the holder, is convertible to class A common stock at any time. As of November 30, 2014, there were approximately 2,006 record holders of class A common stock and approximately 336 record holders of class B The reported high and low sales prices or high and low bid information, as applicable, for each quarter indicated are as follows: Fiscal 2013 Fiscal 2014 First Quarter Second Quarter Third Quarter Fourth Quarter First Quarter Second Quarter Third Quarter Fourth Quarter ISCA ISCB.OB(1) High Low High Low $ 31.09 $ 25.96 $ 31.00 $ 35.75 35.77 34.99 29.30 30.61 30.14 35.00 34.75 37.59 $ 38.01 $ 30.02 $ 37.40 $ 34.96 35.32 33.98 29.90 29.67 28.09 34.00 34.67 33.50 25.70 29.70 31.30 30.34 32.35 29.72 29.00 31.00 (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. MICHIGAN INTERNATIONAL SPEEDWAY. Michigan is a 2.0 mile moderately-banked, asphalt, tri-oval superspeedway. The facility is situated on 1,180 acres and is located in Brooklyn, Michigan, approximately 70 miles southwest of Detroit. AUTO CLUB SPEEDWAY OF SOUTHERN CALIFORNIA. Auto Club Speedway is a 2.0 mile moderately-banked, lighted, asphalt, tri-oval superspeedway. The facility is situated on 566 acres and is located approximately 40 miles east of Los Angeles in Fontana, California. The facility also includes a quarter mile drag strip and a 2.8-mile road course. DARLINGTON RACEWAY. Darlington is a 1.3 mile high-banked, lighted, asphalt, egg-shaped superspeedway. The facility is situated on 230 acres and is located in Darlington, South Carolina. CHICAGOLAND SPEEDWAY. Chicagoland is a 1.5 mile moderately-banked, lighted, asphalt, tri-oval superspeedway. The facility is situated on 930 acres and is located in Joliet, Illinois, approximately 35 miles from Chicago, Illinois. common stock. MARTINSVILLE SPEEDWAY. Martinsville is a 0.5 mile moderately-banked, asphalt and concrete, oval speedway. The facility is situated on 250 acres and is located in Martinsville, Virginia, approximately 50 miles north of Winston-Salem, North Carolina. PHOENIX INTERNATIONAL RACEWAY. Phoenix is a 1.0 mile low-banked, lighted, asphalt, oval superspeedway. The facility is situated on 598 acres that also includes a 1.5-mile road course located near Phoenix, Arizona. HOMESTEAD-MIAMI SPEEDWAY. Homestead is a 1.5 mile variable-degree banked, lighted, asphalt, oval superspeedway. The facility is situated on 404 acres and is located in Homestead, Florida. Homestead is owned by the City of Homestead, however we operate Homestead under an agreement that expires in 2075, including renewal options. WATKINS GLEN INTERNATIONAL. Watkins Glen includes 3.4-mile and 2.4-mile road course tracks. The facility is situated on 1,377 acres and is located near Watkins Glen, New York. ROUTE 66 RACEWAY. Route 66 includes a quarter mile drag strip and dirt oval speedway. The facility, adjacent to Chicagoland, is situated on 240 acres and is located in Joliet, Illinois, approximately 35 miles from Chicago, Illinois. OTHER FACILITIES: We own approximately 245 acres of real property near Daytona which is home to our corporate headquarters and other offices and facilities. In addition, we also own 410 acres near Daytona on which we conduct agricultural operations except during events when they are used for parking and other ancillary purposes. We lease real estate and office space in Talladega, Alabama and the property and premises at the Talladega Municipal Airport. We lease office space in Watkins Glen, New York, in Concord, North Carolina and in Avondale, Arizona. Intellectual Property We have various registered and common law trademark rights, including, but not limited to, “California Speedway,” “Chicagoland Speedway,” “Darlington Raceway,” “The Great American Race,” “Southern 500,” “Too Tough to Tame,” “Daytona International Speedway,” “ Daytona 500 EXperience,” the “Daytona 500,” the “24 Hours of Daytona,” “Acceleration Alley,” “Daytona Dream Laps,” “Speedweeks,” “World Center of Racing,” “Homestead-Miami Speedway,” “Kansas Speedway,” “Martinsville Speedway,” “Michigan International Speedway,” “Phoenix International Raceway,” “Richmond International Raceway,” “Route 66 Raceway,” “The Action Track,” “Talladega Superspeedway,” “Watkins Glen International,” “The Glen,” “Americrown,” “Motor Racing Network,” “MRN,” and related logos. We also have licenses from NASCAR, various drivers and other businesses to use names and logos for merchandising programs and product sales. Our policy is to protect our intellectual property rights vigorously, through litigation, if necessary, chiefly because of their proprietary value in merchandise and promotional sales. ITEM 3. LEGAL PROCEEDINGS From time to time, we are a party to routine litigation incidental to our business. We do not believe that the resolution of any or all of such litigation will have a material adverse effect on our financial condition or results of operations. ITEM 4. MINE SAFETY DISCLOSURES None ISC // 2014 ANNUAL REPORT // FORM 10-K // 12 11 12 MICHIGAN INTERNATIONAL SPEEDWAY. Michigan is a 2.0 mile moderately-banked, asphalt, tri-oval superspeedway. The facility is situated on 1,180 acres and is located in Brooklyn, Michigan, approximately 70 miles southwest of Detroit. AUTO CLUB SPEEDWAY OF SOUTHERN CALIFORNIA. Auto Club Speedway is a 2.0 mile moderately-banked, lighted, asphalt, tri-oval superspeedway. The facility is situated on 566 acres and is located approximately 40 miles east of Los Angeles in Fontana, California. The facility also includes a quarter mile drag strip and a 2.8-mile road course. DARLINGTON RACEWAY. Darlington is a 1.3 mile high-banked, lighted, asphalt, egg-shaped superspeedway. The facility is situated on 230 acres and is located in Darlington, South Carolina. CHICAGOLAND SPEEDWAY. Chicagoland is a 1.5 mile moderately-banked, lighted, asphalt, tri-oval superspeedway. The facility is situated on 930 acres and is located in Joliet, Illinois, approximately 35 miles from Chicago, Illinois. MARTINSVILLE SPEEDWAY. Martinsville is a 0.5 mile moderately-banked, asphalt and concrete, oval speedway. The facility is situated on 250 acres and is located in Martinsville, Virginia, approximately 50 miles north of Winston-Salem, North Carolina. PHOENIX INTERNATIONAL RACEWAY. Phoenix is a 1.0 mile low-banked, lighted, asphalt, oval superspeedway. The facility is situated on 598 acres that also includes a 1.5-mile road course located near Phoenix, Arizona. HOMESTEAD-MIAMI SPEEDWAY. Homestead is a 1.5 mile variable-degree banked, lighted, asphalt, oval superspeedway. The facility is situated on 404 acres and is located in Homestead, Florida. Homestead is owned by the City of Homestead, however we operate Homestead under an agreement that expires in 2075, including renewal options. WATKINS GLEN INTERNATIONAL. Watkins Glen includes 3.4-mile and 2.4-mile road course tracks. The facility is situated on 1,377 acres and is located near Watkins Glen, New York. ROUTE 66 RACEWAY. Route 66 includes a quarter mile drag strip and dirt oval speedway. The facility, adjacent to Chicagoland, is situated on 240 acres and is located in Joliet, Illinois, approximately 35 miles from Chicago, Illinois. OTHER FACILITIES: We own approximately 245 acres of real property near Daytona which is home to our corporate headquarters and other offices and facilities. In addition, we also own 410 acres near Daytona on which we conduct agricultural operations except during events when they are used for parking and other ancillary purposes. We lease real estate and office space in Talladega, Alabama and the property and premises at the Talladega Municipal Airport. We lease office space in Watkins Glen, New York, in Concord, North Carolina and in Avondale, Arizona. Intellectual Property We have various registered and common law trademark rights, including, but not limited to, “California Speedway,” “Chicagoland Speedway,” “Darlington Raceway,” “The Great American Race,” “Southern 500,” “Too Tough to Tame,” “Daytona International Speedway,” “ Daytona 500 EXperience,” the “Daytona 500,” the “24 Hours of Daytona,” “Acceleration Alley,” “Daytona Dream Laps,” “Speedweeks,” “World Center of Racing,” “Homestead-Miami Speedway,” “Kansas Speedway,” “Martinsville Speedway,” “Michigan International Speedway,” “Phoenix International Raceway,” “Richmond International Raceway,” “Route 66 Raceway,” “The Action Track,” “Talladega Superspeedway,” “Watkins Glen International,” “The Glen,” “Americrown,” “Motor Racing Network,” “MRN,” and related logos. We also have licenses from NASCAR, various drivers and other businesses to use names and logos for merchandising programs and product sales. Our policy is to protect our intellectual property rights vigorously, through litigation, if necessary, chiefly because of their proprietary value in merchandise and promotional sales. ITEM 3. LEGAL PROCEEDINGS From time to time, we are a party to routine litigation incidental to our business. We do not believe that the resolution of any or all of such litigation will have a material adverse effect on our financial condition or results of operations. ITEM 4. MINE SAFETY DISCLOSURES None 11 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES At November 30, 2014, we 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 the Over-The-Counter Bulletin Board under the symbol “ISCB.OB” and, at the option of the holder, is convertible to class A common stock at any time. As of November 30, 2014, there were approximately 2,006 record holders of class A common stock and approximately 336 record holders of class B common stock. The reported high and low sales prices or high and low bid information, as applicable, for each quarter indicated are as follows: Fiscal 2013 First Quarter Second Quarter Third Quarter Fourth Quarter Fiscal 2014 First Quarter Second Quarter Third Quarter Fourth Quarter ISCA ISCB.OB(1) High Low High Low $ $ 31.09 $ 35.75 35.77 34.99 38.01 $ 34.96 35.32 33.98 25.96 $ 29.30 30.61 30.14 30.02 $ 29.90 29.67 28.09 31.00 $ 35.00 34.75 37.59 37.40 $ 34.00 34.67 33.50 25.70 29.70 31.30 30.34 32.35 29.72 29.00 31.00 (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. 12 ISC // 2014 ANNUAL REPORT // FORM 10-K // 13 Stock Purchase Plan An important component of our capital allocation strategy is returning capital to shareholders. We have solid operating margins that generate substantial operating cash flow. Using these internally generated proceeds, we have returned a significant amount of capital to shareholders primarily through our share repurchase program. The Company has a share repurchase program (“Stock Purchase Plan”) under which it is authorized to purchase up to $330.0 million of its outstanding Class A common shares. The timing and amount of any shares repurchased under the Stock Purchase Plan will depend on a variety of factors, including price, corporate and regulatory requirements, capital availability and other market conditions. The Stock Purchase Plan may be suspended or discontinued at any time without prior notice. No shares have been or will be knowingly purchased from Company insiders or their affiliates. (c) Total number of shares purchased as part of publicly announced plans or Programs (d) Maximum number of shares (or approximate dollar value of shares) that may yet be purchased under the plans or programs (in thousands) — $ — — — — — 61,741 61,741 61,741 61,741 (a) Total number of shares purchased (b) Average price paid per share — $ 10,015 — 32.34 — — — 10,015 — — — Period December 1, 2013 — August 31, 2014 Repurchase program(1) Employee transactions(2) September 1, 2014 — September 30, 2014 Repurchase program(1) October 1, 2014 — October 31, 2014 Repurchase program(1) November 1, 2014 — November 30, 2014 Repurchase program(1) (1) Since inception of the Stock Purchase Plan through November 30, 2014, we have purchased 7,063,962 shares of our Class A common shares, for a total of approximately $268.3 million. Included in these totals are the purchases of 405,538 shares of the Company’s Class A common shares at an average cost of approximately $25.40 per share (including commissions), for a total of approximately $10.3 million , during the fiscal year ended November 30, 2012. These transactions occurred in open market purchases and pursuant to a trading plan under Rule 10b5-1. There were no purchases, under the Stock Purchase Plan, of the Company's Class A common shares during fiscal 2013 and 2014. At November 30, 2014, we have approximately $61.7 million remaining repurchase authority under the current Stock Purchase Plan. (2) Represents shares of our common stock delivered to us in satisfaction of the minimum statutory tax withholding obligation of holders of restricted shares that vested during the period. Annual dividends were declared in the quarter ended in May and paid in June in the fiscal years reported below on all common stock that was issued at the time (amount per share): Dividends Fiscal Year: 2010 2011 2012 2013 2014 Securities Authorized For Issuance Under Equity Compensation Plans Equity Compensation Plan Information Annual Dividend $ 0.16 0.18 0.20 0.22 0.24 Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted-average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) 163,048 $ — 163,048 39.82 — 39.82 477,084 — 477,084 Equity compensation plans approved by security holders Equity compensation plans not approved by security holders Plan Category Total ITEM 6. SELECTED FINANCIAL DATA The following table sets forth our selected financial data as of and for each of the last five fiscal years in the period ended November 30, 2014. The income statement data for the three fiscal years in the period ended November 30, 2014, and the balance sheet data as of November 30, 2013 and November 30, 2014, have been derived from our audited historical consolidated financial statements included elsewhere in this report. The balance sheet data as of November 30, 2012, and the income statement data and the balance sheet data as of and for the fiscal years ended November 30, 2011 and 2010, have been derived from our audited historical consolidated financial statements, which are available on our website. You should read the selected financial data set forth below in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the accompanying notes included elsewhere in this report. ISC // 2014 ANNUAL REPORT // FORM 10-K // 14 13 14 Stock Purchase Plan Dividends An important component of our capital allocation strategy is returning capital to shareholders. We have solid operating margins that generate substantial operating cash flow. Using these internally generated proceeds, we have returned a significant amount Annual dividends were declared in the quarter ended in May and paid in June in the fiscal years reported below on all common stock that was issued at the time (amount per share): of capital to shareholders primarily through our share repurchase program. The Company has a share repurchase program (“Stock Purchase Plan”) under which it is authorized to purchase up to $330.0 million of its outstanding Class A common shares. The timing and amount of any shares repurchased under the Stock Purchase Plan will depend on a variety of factors, including price, corporate and regulatory requirements, capital availability and other market conditions. The Stock Purchase Plan may be suspended or discontinued at any time without prior notice. No shares have been or will be knowingly purchased from Company insiders or their affiliates. (c) Total number of shares purchased as part of publicly announced plans or Programs (d) Maximum number of shares (or approximate dollar value of shares) that may yet be purchased under the plans or programs (in thousands) — $ — — — — — 61,741 61,741 61,741 61,741 (a) Total number of shares purchased (b) Average price paid per share — $ 10,015 — 32.34 — — — 10,015 — — — Period December 1, 2013 — August 31, 2014 Repurchase program(1) Employee transactions(2) September 1, 2014 — September 30, 2014 Repurchase program(1) October 1, 2014 — October 31, 2014 Repurchase program(1) November 1, 2014 — November 30, 2014 Repurchase program(1) (1) Since inception of the Stock Purchase Plan through November 30, 2014, we have purchased 7,063,962 shares of our Class A common shares, for a total of approximately $268.3 million. Included in these totals are the purchases of 405,538 shares of the Company’s Class A common shares at an average cost of approximately $25.40 per share (including commissions), for a total of approximately $10.3 million , during the fiscal year ended November 30, 2012. These transactions occurred in open market purchases and pursuant to a trading plan under Rule 10b5-1. There were no purchases, under the Stock Purchase Plan, of the Company's Class A common shares during fiscal 2013 and 2014. At November 30, 2014, we have approximately $61.7 million remaining repurchase authority under the current Stock Purchase Plan. (2) Represents shares of our common stock delivered to us in satisfaction of the minimum statutory tax withholding obligation of holders of restricted shares that vested during the period. Fiscal Year: 2010 2011 2012 2013 2014 Securities Authorized For Issuance Under Equity Compensation Plans Equity Compensation Plan Information Plan Category Equity compensation plans approved by security holders Equity compensation plans not approved by security holders Total ITEM 6. SELECTED FINANCIAL DATA Annual Dividend $ 0.16 0.18 0.20 0.22 0.24 Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted-average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) 163,048 $ — 163,048 39.82 — 39.82 477,084 — 477,084 The following table sets forth our selected financial data as of and for each of the last five fiscal years in the period ended November 30, 2014. The income statement data for the three fiscal years in the period ended November 30, 2014, and the balance sheet data as of November 30, 2013 and November 30, 2014, have been derived from our audited historical consolidated financial statements included elsewhere in this report. The balance sheet data as of November 30, 2012, and the income statement data and the balance sheet data as of and for the fiscal years ended November 30, 2011 and 2010, have been derived from our audited historical consolidated financial statements, which are available on our website. You should read the selected financial data set forth below in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the accompanying notes included elsewhere in this report. 13 14 ISC // 2014 ANNUAL REPORT // FORM 10-K // 15 For the Year Ended November 30, (1) Fiscal year 2014 includes consolidated operations of MA following Speedway Motorsports, Inc.'s ("SMI") abandonment 2010 2011 2012 2013 2014 (in thousands, except share and per share data) Income Statement Data: Revenues: Admissions, net Motorsports related Food, beverage and merchandise (1) Other $ Total revenues 160,476 $ 420,910 52,527 11,444 645,357 144,433 $ 425,655 47,863 11,734 629,685 136,099 $ 416,699 45,985 13,584 612,367 129,824 $ 425,530 44,046 13,240 612,640 129,688 433,738 72,880 15,630 651,936 Expenses: Direct: Prize and point fund monies and NASCAR sanction fees Motorsports related Food, beverage and merchandise (1) General and administrative Depreciation and amortization (2) Impairments / losses on retirements of long-lived assets (3) Total expenses Operating income Interest income (4) Interest expense (5) Interest rate swap expense (6) Loss on early redemption of debt (7) Other (8) Equity in net (loss) income from equity investments (9) Income from continuing operations before income taxes Income taxes (10) Income from continuing operations Loss from discontinued operations Net income Basic and diluted earnings per share: Income from continuing operations Loss from discontinued operations Net income Dividends per share Weighted average shares outstanding: Basic Diluted Balance Sheet Data (at end of period): Cash and cash equivalents Working capital Total assets Long-term debt Total debt Total shareholders’ equity 157,571 142,603 36,949 102,733 74,465 8,859 523,180 122,177 170 (15,216 ) (23,878 ) (6,535 ) — 154,562 124,861 36,744 98,795 76,871 4,687 496,520 133,165 139 (14,710 ) — — — 154,673 125,072 35,642 102,958 77,870 11,143 507,358 105,009 102 (13,501 ) — (9,144 ) 1,008 159,349 125,928 33,150 104,925 93,989 16,607 533,948 78,692 96 (15,221 ) — — 75 162,988 128,229 58,265 108,563 90,352 10,148 558,545 93,391 2,107 (9,182 ) — — 5,380 (1,904 ) (4,177 ) 2,757 9,434 8,916 74,814 20,236 54,578 (47 ) 54,531 $ 114,417 44,993 69,424 — 69,424 $ 1.13 $ 0.00 1.13 $ 0.16 $ 1.46 $ — 1.46 $ 0.18 $ 86,231 31,653 54,578 — 54,578 $ 1.18 $ — 1.18 $ 0.20 $ 73,076 27,784 45,292 — 45,292 $ 100,612 33,233 67,379 — 67,379 0.97 $ — 0.97 $ 0.22 $ 1.45 — 1.45 0.24 48,242,555 48,242,555 47,602,574 47,611,179 46,386,355 46,396,631 46,470,647 46,486,561 46,559,232 46,573,038 84,166 $ 58,267 1,878,749 303,074 306,290 1,187,177 110,078 $ 75,759 1,944,639 313,888 316,152 1,212,466 78,379 $ 50,868 1,941,741 274,419 276,932 1,248,810 172,827 $ 153,780 2,017,506 271,680 274,487 1,287,155 158,847 110,783 2,077,651 268,311 271,746 1,346,432 $ $ $ $ $ of its interest and rights in SMISC, LLC on January 31, 2014. As a result, ISC recognized merchandise revenue and operating expenses totaling approximately $25.7 million and $24.7 million, respectively, for the 10-month period February 1, 2014 through November 30, 2014. (2) Fiscal year 2013 includes accelerated depreciation that was recorded due to the shortening the service lives of certain assets associated with DAYTONA Rising and capacity management initiatives totaling approximately $15.4 million. Fiscal year 2014 includes accelerated depreciation that was recorded due to the shortening the service lives of certain assets associated with DAYTONA Rising totaling approximately $11.1 million. (3) Fiscal 2010 impairment/losses on asset retirements is primarily attributable to the non-cash impairment of certain costs related to a previous Daytona development project and, to a much lesser extent, losses on the removal of certain other long-lived assets. Fiscal 2011 losses associated with the retirements of certain other long-lived assets is primarily attributable to the removal of certain assets in connection with the repaving of the track and grandstand enhancements at Phoenix as well as grandstand enhancements at Kansas and Talladega. Fiscal 2012 losses associated with the retirements of certain other long-lived assets is primarily attributable to the removal of certain assets in connection with the repaving of the track at Kansas, and certain other long-lived assets located at our motorsports facilities. Fiscal 2013 losses associated with the retirements of certain other long-lived assets is primarily attributable to the removal of assets not fully depreciated in connection with DAYTONA Rising, capacity management initiatives and other capital improvements. Fiscal 2014 losses associated with demolition costs in connection with DAYTONA Rising, capacity management initiatives and other capital improvements. Fiscal 2014 includes approximately $1.8 million related to settlement of interest income on a long-term receivable. Fiscal 2013 and 2014 include approximately $0.8 million and $7.2 million, respectively, related to capitalized interest for DAYTONA Rising, (see DAYTONA Rising in Liquidity and Capital Resources of MANAGEMENT'S DISCUSSION AND ANALYSIS). Fiscal year 2010 include expenses related to an interest rate swap. In fiscal 2010, we recorded a loss on early redemption of debt related to a cash tender offer where we purchased approximately $63.0 million of outstanding senior notes. In fiscal 2012, we recorded a loss on early redemption of debt related to the redemption of $87.0 million of outstanding senior notes maturing in 2014. (8) Fiscal 2014 includes the valuation adjustment related to consolidation of MA, representing the fair value over the carrying value as of January 31, 2014. Fiscal 2012 includes the net gain on sale of certain assets. (9) Equity in net (loss) income from equity investments includes the Company’s 50.0 percent portion of Kansas Entertainment’s net income, more fully discussed in Management's Discussion and Analysis, Equity and Other Investments. Fiscal 2010 and 2011 include pre-development operating expenses not capitalized prior to commencement of operations in February 2012. Fiscal 2012 reflects a partial year of operations from the Casino opening in February 2012 through November 30, 2012. Included in the Company's equity income in fiscal 2013 is a one-time property tax refund of approximately $1.1 million, and, in fiscal 2014, an expense equal to 1.0 percent of gross gaming revenue, approximately $0.6 million, since it did not proceed with construction of a hotel by the original deadline. (10) Fiscal 2010 income taxes include the de-recognition of potential interest and penalties associated with certain state tax settlements of approximately $6.3 million. (4) (5) (6) (7) ISC // 2014 ANNUAL REPORT // FORM 10-K // 16 15 16 For the Year Ended November 30, 2010 2011 2012 2013 2014 (in thousands, except share and per share data) Income Statement Data: Revenues: Admissions, net Motorsports related Food, beverage and merchandise (1) $ 160,476 $ 144,433 $ 136,099 $ 129,824 $ 420,910 52,527 11,444 425,655 416,699 47,863 11,734 45,985 13,584 425,530 44,046 13,240 Total revenues 645,357 629,685 612,367 612,640 129,688 433,738 72,880 15,630 651,936 162,988 128,229 58,265 108,563 90,352 10,148 558,545 93,391 2,107 (9,182 ) — — 5,380 8,916 100,612 33,233 67,379 — 157,571 142,603 36,949 102,733 74,465 8,859 523,180 122,177 170 (15,216 ) (23,878 ) (6,535 ) — 154,562 124,861 36,744 98,795 76,871 4,687 496,520 133,165 139 — — — 154,673 125,072 35,642 102,958 77,870 11,143 507,358 105,009 102 — (9,144 ) 1,008 159,349 125,928 33,150 104,925 93,989 16,607 533,948 78,692 96 — — 75 (14,710 ) (13,501 ) (15,221 ) (1,904 ) (4,177 ) 2,757 9,434 74,814 20,236 54,578 (47 ) 114,417 44,993 69,424 — 86,231 31,653 54,578 — 73,076 27,784 45,292 — Net income 54,531 $ 69,424 $ 54,578 $ 45,292 $ 67,379 Balance Sheet Data (at end of period): Cash and cash equivalents $ 84,166 $ 110,078 $ 78,379 $ 172,827 $ 1.13 $ 0.00 1.13 $ 0.16 $ 1.46 $ — 1.46 $ 0.18 $ 1.18 $ — 1.18 $ 0.20 $ 0.97 $ — 0.97 $ 0.22 $ 1.45 — 1.45 0.24 48,242,555 47,602,574 46,386,355 46,470,647 46,559,232 48,242,555 47,611,179 46,396,631 46,486,561 46,573,038 58,267 75,759 50,868 153,780 1,878,749 1,944,639 1,941,741 2,017,506 2,077,651 303,074 306,290 313,888 316,152 274,419 276,932 271,680 274,487 158,847 110,783 268,311 271,746 Total shareholders’ equity 1,187,177 1,212,466 1,248,810 1,287,155 1,346,432 Other Expenses: Direct: Prize and point fund monies and NASCAR sanction fees Motorsports related Food, beverage and merchandise (1) General and administrative Depreciation and amortization (2) Impairments / losses on retirements of long-lived assets (3) Total expenses Operating income Interest income (4) Interest expense (5) Interest rate swap expense (6) Loss on early redemption of debt (7) Other (8) Equity in net (loss) income from equity investments (9) Income from continuing operations before income taxes Income taxes (10) Income from continuing operations Loss from discontinued operations Basic and diluted earnings per share: Income from continuing operations Loss from discontinued operations Net income Dividends per share Weighted average shares outstanding: $ $ $ $ Basic Diluted Working capital Total assets Long-term debt Total debt (1) (2) (3) (4) (5) (6) (7) (8) (9) Fiscal year 2014 includes consolidated operations of MA following Speedway Motorsports, Inc.'s ("SMI") abandonment of its interest and rights in SMISC, LLC on January 31, 2014. As a result, ISC recognized merchandise revenue and operating expenses totaling approximately $25.7 million and $24.7 million, respectively, for the 10-month period February 1, 2014 through November 30, 2014. Fiscal year 2013 includes accelerated depreciation that was recorded due to the shortening the service lives of certain assets associated with DAYTONA Rising and capacity management initiatives totaling approximately $15.4 million. Fiscal year 2014 includes accelerated depreciation that was recorded due to the shortening the service lives of certain assets associated with DAYTONA Rising totaling approximately $11.1 million. Fiscal 2010 impairment/losses on asset retirements is primarily attributable to the non-cash impairment of certain costs related to a previous Daytona development project and, to a much lesser extent, losses on the removal of certain other long-lived assets. Fiscal 2011 losses associated with the retirements of certain other long-lived assets is primarily attributable to the removal of certain assets in connection with the repaving of the track and grandstand enhancements at Phoenix as well as grandstand enhancements at Kansas and Talladega. Fiscal 2012 losses associated with the retirements of certain other long-lived assets is primarily attributable to the removal of certain assets in connection with the repaving of the track at Kansas, and certain other long-lived assets located at our motorsports facilities. Fiscal 2013 losses associated with the retirements of certain other long-lived assets is primarily attributable to the removal of assets not fully depreciated in connection with DAYTONA Rising, capacity management initiatives and other capital improvements. Fiscal 2014 losses associated with demolition costs in connection with DAYTONA Rising, capacity management initiatives and other capital improvements. Fiscal 2014 includes approximately $1.8 million related to settlement of interest income on a long-term receivable. Fiscal 2013 and 2014 include approximately $0.8 million and $7.2 million, respectively, related to capitalized interest for DAYTONA Rising, (see DAYTONA Rising in Liquidity and Capital Resources of MANAGEMENT'S DISCUSSION AND ANALYSIS). Fiscal year 2010 include expenses related to an interest rate swap. In fiscal 2010, we recorded a loss on early redemption of debt related to a cash tender offer where we purchased approximately $63.0 million of outstanding senior notes. In fiscal 2012, we recorded a loss on early redemption of debt related to the redemption of $87.0 million of outstanding senior notes maturing in 2014. Fiscal 2014 includes the valuation adjustment related to consolidation of MA, representing the fair value over the carrying value as of January 31, 2014. Fiscal 2012 includes the net gain on sale of certain assets. Equity in net (loss) income from equity investments includes the Company’s 50.0 percent portion of Kansas Entertainment’s net income, more fully discussed in Management's Discussion and Analysis, Equity and Other Investments. Fiscal 2010 and 2011 include pre-development operating expenses not capitalized prior to commencement of operations in February 2012. Fiscal 2012 reflects a partial year of operations from the Casino opening in February 2012 through November 30, 2012. Included in the Company's equity income in fiscal 2013 is a one-time property tax refund of approximately $1.1 million, and, in fiscal 2014, an expense equal to 1.0 percent of gross gaming revenue, approximately $0.6 million, since it did not proceed with construction of a hotel by the original deadline. (10) Fiscal 2010 income taxes include the de-recognition of potential interest and penalties associated with certain state tax settlements of approximately $6.3 million. 15 16 ISC // 2014 ANNUAL REPORT // FORM 10-K // 17 GAAP to Non-GAAP Reconciliation The following financial information is presented below using other than U.S. generally accepted accounting principles (“non- GAAP”), and is reconciled to comparable information presented using GAAP. Non-GAAP net income and diluted earnings per share below are derived by adjusting amounts determined in accordance with GAAP for certain items presented in the accompanying selected operating statement data, net of taxes. We believe such non-GAAP information is useful and meaningful, and is used by investors to assess our core operations, which consist of the ongoing promotion of racing events at our major motorsports entertainment facilities. Such non-GAAP information identifies and separately displays the equity investment earnings and losses of MA and Kansas Entertainment (prior to becoming part of our core operations in fiscal 2012) and adjusts for items that are not considered to be reflective of our continuing core operations at our motorsports entertainment facilities. We believe that such non-GAAP information improves the comparability of the operating results and provides a better understanding of the performance of our core operations for the periods presented. We use this non-GAAP information to analyze the current performance and trends and make decisions regarding future ongoing operations. This non-GAAP financial information may not be comparable to similarly titled measures used by other entities and should not be considered as an alternative to operating income, net income or diluted earnings per share, which are determined in accordance with GAAP. The presentation of this non-GAAP financial information is not intended to be considered independent of or as a substitute for results prepared in accordance with GAAP. Management uses both GAAP and non-GAAP information in evaluating and operating the business and as such deemed it important to provide such information to investors. The adjustments for 2010 relate to the pre-opening expenses for Hollywood Casino at Kansas Speedway — equity in net loss from equity investment, impairment/loss on retirements of long-lived assets primarily attributable to certain costs related to a previous Daytona development project, which were capitalized and are no longer expected to benefit the future development of the project and, to a much lesser extent, losses associated with the retirements of certain other long-lived assets, interest rate swap expense, the loss on early redemption of debt, and, the de-recognition of potential interest and penalties associated with certain state tax settlements. The adjustments for 2011 relate to the pre-opening expenses for Hollywood Casino at Kansas Speedway — equity in net loss from equity investment, carrying costs of our the Staten Island property, and losses associated with the retirements of certain other long-lived assets. The adjustments for 2012 relate to carrying costs of our Staten Island property, settlement of litigation, marketing and consulting costs incurred associated with DAYTONA Rising, losses associated with the retirements of certain other long-lived assets, loss on early redemption of debt, and net gain on sale of certain assets. The adjustments for 2013 relate to carrying costs of our Staten Island property, legal judgment, marketing and consulting costs incurred associated with DAYTONA Rising, accelerated depreciation associated with DAYTONA Rising and capacity management initiatives, losses associated with the retirements of certain other long-lived assets, capitalized interest associated with DAYTONA Rising and net gain on sale of certain assets. The adjustments for 2014 relate to legal settlement, marketing and consulting costs incurred associated with DAYTONA Rising, accelerated depreciation, losses associated with the retirements of certain other long-lived assets, impairment of MA long-lived intangible asset, settlement of interest income related to long-term receivable, DAYTONA Rising project capitalized interest, MA fair value adjustment and income tax benefits, and net loss on sale of certain assets. ISC // 2014 ANNUAL REPORT // FORM 10-K // 18 17 Non-GAAP diluted earnings per share $ 1.61 $ 1.51 $ 1.44 $ Carrying costs related to Staten Island 1,664 Losses on retirements of long-lived assets 5,373 2,845 Net income Net loss from discontinued operations Income from continuing operations Equity in net loss from equity investments, net of tax Consolidated income from continuing operations excluding equity in net loss from equity investments Adjustments, net of tax: Legal settlement/judgment DAYTONA Rising project Accelerated depreciation Impairment of MA's long lived intangible asset Interest settlement on long-term receivable DAYTONA Rising project capitalized interest Interest rate swap expense Loss on early redemption of debt MA fair value adjustment and income tax benefits Net loss (gain) on sale of certain assets State tax settlements Non-GAAP net income Diluted earnings per share Net loss from discontinued operations Diluted earnings per share from continuing operations of tax Equity in net loss from equity investments, net Consolidated income from continuing operations excluding equity in net loss from equity investments Adjustments, net of tax: Carrying costs related to Staten Island Legal settlement/judgment DAYTONA Rising project Accelerated depreciation Impairment of MA's long lived intangible asset Interest settlement on long-term receivable DAYTONA Rising project capitalized interest Interest rate swap expense Loss on early redemption of debt MA fair value adjustment and income tax benefits Net loss (gain) on sale of certain assets State tax settlements 2010 2011 2012 2013 2014 For the Year Ended November 30 (in thousands, except per share data) $ 54,531 $ 69,424 $ 54,578 $ 45,292 $ 67,379 47 54,578 — 69,424 54,578 — 45,292 — 67,379 1,155 2,534 — — 55,733 71,958 54,578 45,292 67,379 — — 2,780 714 229 — 6,775 — — — — 5,560 — (566 ) — 0.06 0.01 — — 0.15 — — — — 0.12 — (0.01 ) — 1,728 310 913 9,358 10,097 — — (467 ) — — — (46 ) — 0.04 0.01 0.02 0.20 0.21 — — (0.01 ) — — — — — — (386 ) 672 6,758 5,802 605 (1,116 ) (4,387 ) (9,455 ) — — 41 — 1.45 — 1.45 — — (0.01 ) 0.02 0.14 0.12 0.01 (0.02 ) (0.09 ) — — (0.20 ) — — 1.42 — — — — — — — — — — — 1.46 0.05 0.04 — — — — — — — — — — — — — — — — — — 14,473 3,963 — — (6,338 ) 1.13 0.03 — — — — — — — 0.30 0.08 — — (0.13 ) 1.52 $ 18 $ $ 73,204 $ 76,467 $ 70,070 $ 67,185 $ 65,913 1.13 $ 0.00 1.46 $ 0.00 1.18 $ — 0.97 $ — 1.18 — 0.97 — 1.16 1.51 1.18 0.97 1.45 Losses on retirements of long-lived assets 0.11 0.06 GAAP to Non-GAAP Reconciliation The following financial information is presented below using other than U.S. generally accepted accounting principles (“non- GAAP”), and is reconciled to comparable information presented using GAAP. Non-GAAP net income and diluted earnings per share below are derived by adjusting amounts determined in accordance with GAAP for certain items presented in the accompanying selected operating statement data, net of taxes. We believe such non-GAAP information is useful and meaningful, and is used by investors to assess our core operations, which consist of the ongoing promotion of racing events at our major motorsports entertainment facilities. Such non-GAAP information identifies and separately displays the equity investment earnings and losses of MA and Kansas Entertainment (prior to becoming part of our core operations in fiscal 2012) and adjusts for items that are not considered to be reflective of our continuing core operations at our motorsports entertainment facilities. We believe that such non-GAAP information improves the comparability of the operating results and provides a better understanding of the performance of our core operations for the periods presented. We use this non-GAAP information to analyze the current performance and trends and make decisions regarding future ongoing operations. This non-GAAP financial information may not be comparable to similarly titled measures used by other entities and should not be considered as an alternative to operating income, net income or diluted earnings per share, which are determined in accordance with GAAP. The presentation of this non-GAAP financial information is not intended to be considered independent of or as a substitute for results prepared in accordance with GAAP. Management uses both GAAP and non-GAAP information in evaluating and operating the business and as such deemed it important to provide such information to investors. The adjustments for 2010 relate to the pre-opening expenses for Hollywood Casino at Kansas Speedway — equity in net loss from equity investment, impairment/loss on retirements of long-lived assets primarily attributable to certain costs related to a previous Daytona development project, which were capitalized and are no longer expected to benefit the future development of the project and, to a much lesser extent, losses associated with the retirements of certain other long-lived assets, interest rate swap expense, the loss on early redemption of debt, and, the de-recognition of potential interest and penalties associated with certain state tax settlements. other long-lived assets. The adjustments for 2011 relate to the pre-opening expenses for Hollywood Casino at Kansas Speedway — equity in net loss from equity investment, carrying costs of our the Staten Island property, and losses associated with the retirements of certain The adjustments for 2012 relate to carrying costs of our Staten Island property, settlement of litigation, marketing and consulting costs incurred associated with DAYTONA Rising, losses associated with the retirements of certain other long-lived assets, loss on early redemption of debt, and net gain on sale of certain assets. The adjustments for 2013 relate to carrying costs of our Staten Island property, legal judgment, marketing and consulting costs incurred associated with DAYTONA Rising, accelerated depreciation associated with DAYTONA Rising and capacity management initiatives, losses associated with the retirements of certain other long-lived assets, capitalized interest associated with DAYTONA Rising and net gain on sale of certain assets. The adjustments for 2014 relate to legal settlement, marketing and consulting costs incurred associated with DAYTONA Rising, accelerated depreciation, losses associated with the retirements of certain other long-lived assets, impairment of MA long-lived intangible asset, settlement of interest income related to long-term receivable, DAYTONA Rising project capitalized interest, MA fair value adjustment and income tax benefits, and net loss on sale of certain assets. Net income Net loss from discontinued operations Income from continuing operations Equity in net loss from equity investments, net of tax Consolidated income from continuing operations excluding equity in net loss from equity investments Adjustments, net of tax: Carrying costs related to Staten Island Legal settlement/judgment DAYTONA Rising project Accelerated depreciation Losses on retirements of long-lived assets Impairment of MA's long lived intangible asset Interest settlement on long-term receivable DAYTONA Rising project capitalized interest Interest rate swap expense Loss on early redemption of debt MA fair value adjustment and income tax benefits Net loss (gain) on sale of certain assets State tax settlements Non-GAAP net income Diluted earnings per share Net loss from discontinued operations Diluted earnings per share from continuing operations Equity in net loss from equity investments, net of tax Consolidated income from continuing operations excluding equity in net loss from equity investments Adjustments, net of tax: Carrying costs related to Staten Island Legal settlement/judgment DAYTONA Rising project Accelerated depreciation Losses on retirements of long-lived assets Impairment of MA's long lived intangible asset Interest settlement on long-term receivable DAYTONA Rising project capitalized interest Interest rate swap expense Loss on early redemption of debt MA fair value adjustment and income tax benefits Net loss (gain) on sale of certain assets 17 State tax settlements Non-GAAP diluted earnings per share $ 2010 2011 2012 2013 2014 For the Year Ended November 30 $ 54,531 $ 47 54,578 (in thousands, except per share data) 69,424 $ — 69,424 54,578 $ — 54,578 45,292 $ — 45,292 67,379 — 67,379 1,155 2,534 — — — 55,733 71,958 54,578 45,292 67,379 — — — — 5,373 — — — 14,473 3,963 1,664 — — — 2,845 — — — — — 2,780 714 229 — 6,775 — — — — 5,560 1,728 310 913 9,358 10,097 — — (467 ) — — $ $ — — (6,338 ) 73,204 $ — — — 76,467 $ — — (566 ) — 70,070 $ (46 ) — 67,185 $ 1.13 $ 0.00 1.46 $ 0.00 1.18 $ — 0.97 $ — 1.13 0.03 1.46 0.05 1.18 — 0.97 — — (386 ) 672 6,758 5,802 605 (1,116 ) (4,387 ) — — (9,455 ) 41 — 65,913 1.45 — 1.45 — 1.16 1.51 1.18 0.97 1.45 — — — — 0.11 — — — 0.30 0.08 — — (0.13 ) 1.52 $ 18 0.04 — — — 0.06 — — — — — 0.06 0.01 — — 0.15 — — — — 0.12 0.04 0.01 0.02 0.20 0.21 — — (0.01 ) — — — — — 1.61 $ — (0.01 ) — 1.51 $ — — — 1.44 $ — (0.01 ) 0.02 0.14 0.12 0.01 (0.02 ) (0.09 ) — — (0.20 ) — — 1.42 ISC // 2014 ANNUAL REPORT // FORM 10-K // 19 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Revenue Recognition. Advance ticket sales and event-related revenues for future events are deferred until earned, which is generally once the events are conducted. The recognition of event-related expenses is matched with the recognition of event- Results of Operations General The general nature of our business is a motorsports themed amusement enterprise, furnishing amusement to the public in the form of motorsports themed entertainment. We derive revenues primarily from (i) admissions to motorsports events and motorsports themed amusement activities held at our facilities, (ii) revenue generated in conjunction with or as a result of motorsports events and motorsports themed amusement activities conducted at our facilities, and (iii) catering, concession and merchandising services during or as a result of these events and amusement activities. “Admissions, net” revenue includes ticket sales for all of our racing events and other motorsports activities and amusements, net of any applicable taxes. allocated to the event. “Motorsports related” revenue primarily includes television and ancillary media rights fees, promotion and sponsorship fees, hospitality rentals (including luxury suites, chalets and the hospitality portion of club seating), advertising revenues, royalties from licenses of our trademarks, parking and camping revenues, and track rental fees. “Food, beverage and merchandise” revenue includes revenues from concession stands, direct sales of souvenirs, hospitality catering, programs and other merchandise and fees paid by third party vendors for the right to occupy space to sell souvenirs and concessions at our motorsports entertainment facilities. Direct expenses include (i) prize and point fund monies and NASCAR sanction fees, (ii) motorsports related expenses, which include labor, advertising, costs of competition paid to sanctioning bodies other than NASCAR and other expenses associated with the promotion of all of our motorsports events and activities, and (iii) food, beverage and merchandise expenses, consisting primarily of labor and costs of goods sold. Critical Accounting Policies and Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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. While our estimates and assumptions are based on conditions existing at and trends leading up to the time the estimates and assumptions are made, actual results could differ materially from those estimates and assumptions. We continually review our accounting policies, how they are applied and how they are reported and disclosed in the financial statements. The following is a summary of our critical accounting policies and estimates and how they are applied in the preparation of the financial statements. Basis of Presentation and Consolidation. We consolidate all entities we control by ownership of a majority voting interest and variable interest entities for which we have the power to direct activities and the obligation to absorb losses. Our judgment in determining if we consolidate a variable interest entity includes assessing which party, if any, has the power and benefits. Therefore, we evaluate which activities most significantly affect the variable interest entities economic performance and determine whether we, or another party, have the power to direct these activities. We apply the equity method of accounting for our investments in joint ventures and other investees whenever we can exert significant influence on the investee but do not have effective control over the investee. Our consolidated net income includes our share of the net earnings or losses from these investees. Our judgment regarding the level of influence over each equity method investee includes considering factors such as our ownership interest, board representation and policy making decisions. We periodically evaluate these equity investments for potential impairment where a decline in value is determined to be other than temporary. We eliminate all significant intercompany transactions from financial results. ISC // 2014 ANNUAL REPORT // FORM 10-K // 20 19 20 related revenues. NASCAR contracts directly with certain network providers for television rights to the entire NASCAR Sprint Cup, Xfinity and Camping World Truck series schedules. Event promoters share in the television rights fees in accordance with the provision of the sanction agreement for each NASCAR Sprint Cup, Xfinity and Camping World Truck series event. Under the terms of this arrangement, NASCAR retains 10.0 percent of the gross broadcast rights fees allocated to each NASCAR Sprint Cup, Xfinity and Camping World Truck series event as a component of its sanction fees. The promoter records 90.0 percent of the gross broadcast rights fees as revenue and then records 25.0 percent of the gross broadcast rights fees as part of its awards to the competitors. Ultimately, the promoter retains 65.0 percent of the net cash proceeds from the gross broadcast rights fees Our revenues from marketing partnerships are paid in accordance with negotiated contracts, with the identities of partners and the terms of sponsorship changing from time to time. Some of our marketing partnership agreements are for multiple facilities and/or events and include multiple specified elements, such as tickets, hospitality chalets, suites, display space and signage for each included event. The allocation of such marketing partnership revenues between the multiple elements, events and facilities is based on relative selling price. The sponsorship revenue allocated to an event is recognized when the event is conducted. Revenues and related costs from the sale of merchandise to retail customers, internet sales and direct sales to dealers are recognized at the time of sale. Business Combinations. All business combinations are accounted for under the acquisition method. Whether net assets or common stock is acquired, fair values are determined and assigned to the purchased assets and assumed liabilities of the acquired entity. The excess of the cost of the acquisition over fair value of the net assets acquired is recorded as goodwill. Business combinations involving existing motorsports entertainment facilities commonly result in a significant portion of the purchase price being allocated to the fair value of the contract-based intangible asset associated with long-term relationships manifest in the sanction agreements with sanctioning bodies, such as NASCAR and IMSA series. The continuity of sanction agreements with these bodies has historically enabled the facility operator to host motorsports events year after year. While individual sanction agreements may be of terms as short as one year, a significant portion of the purchase price in excess of the fair value of acquired tangible assets is commonly paid to acquire anticipated future cash flows from events promoted pursuant to these agreements which are expected to continue for the foreseeable future and therefore, in accordance with ASC 805-50, “Business Combinations,” are recorded as indefinite-lived intangible assets recognized apart from goodwill. Capitalization and Depreciation Policies. Property and equipment are stated at cost. Maintenance and repairs that neither materially add to the value of the property nor appreciably prolong its life are charged to expense as incurred. Depreciation and amortization for financial statement purposes are provided on a straight-line basis over the estimated useful lives of the assets. When we construct assets, we capitalize costs of the project, including, but not limited to, certain pre-acquisition costs, permitting costs, fees paid to architects and contractors, certain costs of our design and construction subsidiary, property taxes and interest. We must make estimates and assumptions when accounting for capital expenditures. Whether an expenditure is considered an operating expense or a capital asset is a matter of judgment. When constructing or purchasing assets, we must determine whether existing assets are being replaced or otherwise impaired, which also is a matter of judgment. Our depreciation expense for financial statement purposes is highly dependent on the assumptions we make about our assets’ estimated useful lives. We determine the estimated useful lives based upon our experience with similar assets, industry, legal and regulatory factors, and our expectations of the usage of the asset. Whenever events or circumstances occur which change the estimated useful life of an asset, we account for the change prospectively. Interest costs associated with major development and construction projects are capitalized as part of the cost of the project. Interest is typically capitalized on amounts expended using the weighted-average cost of our outstanding borrowings, since we typically do not borrow funds directly related to a development or construction project. We capitalize interest on a project when development or construction activities begin, and cease when such activities are substantially complete or are suspended for more than a brief period. ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations General The general nature of our business is a motorsports themed amusement enterprise, furnishing amusement to the public in the form of motorsports themed entertainment. We derive revenues primarily from (i) admissions to motorsports events and motorsports themed amusement activities held at our facilities, (ii) revenue generated in conjunction with or as a result of motorsports events and motorsports themed amusement activities conducted at our facilities, and (iii) catering, concession and merchandising services during or as a result of these events and amusement activities. “Admissions, net” revenue includes ticket sales for all of our racing events and other motorsports activities and amusements, net of any applicable taxes. “Motorsports related” revenue primarily includes television and ancillary media rights fees, promotion and sponsorship fees, hospitality rentals (including luxury suites, chalets and the hospitality portion of club seating), advertising revenues, royalties from licenses of our trademarks, parking and camping revenues, and track rental fees. “Food, beverage and merchandise” revenue includes revenues from concession stands, direct sales of souvenirs, hospitality catering, programs and other merchandise and fees paid by third party vendors for the right to occupy space to sell souvenirs and concessions at our motorsports entertainment facilities. Direct expenses include (i) prize and point fund monies and NASCAR sanction fees, (ii) motorsports related expenses, which include labor, advertising, costs of competition paid to sanctioning bodies other than NASCAR and other expenses associated with the promotion of all of our motorsports events and activities, and (iii) food, beverage and merchandise expenses, consisting primarily of labor and costs of goods sold. Critical Accounting Policies and Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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. While our estimates and assumptions are based on conditions existing at and trends leading up to the time the estimates and assumptions are made, actual results could differ materially from those estimates and assumptions. We continually review our accounting policies, how they are applied and how they are reported and disclosed in the financial The following is a summary of our critical accounting policies and estimates and how they are applied in the preparation of the statements. financial statements. Basis of Presentation and Consolidation. We consolidate all entities we control by ownership of a majority voting interest and variable interest entities for which we have the power to direct activities and the obligation to absorb losses. Our judgment in determining if we consolidate a variable interest entity includes assessing which party, if any, has the power and benefits. Therefore, we evaluate which activities most significantly affect the variable interest entities economic performance and determine whether we, or another party, have the power to direct these activities. We apply the equity method of accounting for our investments in joint ventures and other investees whenever we can exert significant influence on the investee but do not have effective control over the investee. Our consolidated net income includes our share of the net earnings or losses from these investees. Our judgment regarding the level of influence over each equity method investee includes considering factors such as our ownership interest, board representation and policy making decisions. We periodically evaluate these equity investments for potential impairment where a decline in value is determined to be other than temporary. We eliminate all significant intercompany transactions from financial results. Revenue Recognition. Advance ticket sales and event-related revenues for future events are deferred until earned, which is generally once the events are conducted. The recognition of event-related expenses is matched with the recognition of event- related revenues. NASCAR contracts directly with certain network providers for television rights to the entire NASCAR Sprint Cup, Xfinity and Camping World Truck series schedules. Event promoters share in the television rights fees in accordance with the provision of the sanction agreement for each NASCAR Sprint Cup, Xfinity and Camping World Truck series event. Under the terms of this arrangement, NASCAR retains 10.0 percent of the gross broadcast rights fees allocated to each NASCAR Sprint Cup, Xfinity and Camping World Truck series event as a component of its sanction fees. The promoter records 90.0 percent of the gross broadcast rights fees as revenue and then records 25.0 percent of the gross broadcast rights fees as part of its awards to the competitors. Ultimately, the promoter retains 65.0 percent of the net cash proceeds from the gross broadcast rights fees allocated to the event. Our revenues from marketing partnerships are paid in accordance with negotiated contracts, with the identities of partners and the terms of sponsorship changing from time to time. Some of our marketing partnership agreements are for multiple facilities and/or events and include multiple specified elements, such as tickets, hospitality chalets, suites, display space and signage for each included event. The allocation of such marketing partnership revenues between the multiple elements, events and facilities is based on relative selling price. The sponsorship revenue allocated to an event is recognized when the event is conducted. Revenues and related costs from the sale of merchandise to retail customers, internet sales and direct sales to dealers are recognized at the time of sale. Business Combinations. All business combinations are accounted for under the acquisition method. Whether net assets or common stock is acquired, fair values are determined and assigned to the purchased assets and assumed liabilities of the acquired entity. The excess of the cost of the acquisition over fair value of the net assets acquired is recorded as goodwill. Business combinations involving existing motorsports entertainment facilities commonly result in a significant portion of the purchase price being allocated to the fair value of the contract-based intangible asset associated with long-term relationships manifest in the sanction agreements with sanctioning bodies, such as NASCAR and IMSA series. The continuity of sanction agreements with these bodies has historically enabled the facility operator to host motorsports events year after year. While individual sanction agreements may be of terms as short as one year, a significant portion of the purchase price in excess of the fair value of acquired tangible assets is commonly paid to acquire anticipated future cash flows from events promoted pursuant to these agreements which are expected to continue for the foreseeable future and therefore, in accordance with ASC 805-50, “Business Combinations,” are recorded as indefinite-lived intangible assets recognized apart from goodwill. Capitalization and Depreciation Policies. Property and equipment are stated at cost. Maintenance and repairs that neither materially add to the value of the property nor appreciably prolong its life are charged to expense as incurred. Depreciation and amortization for financial statement purposes are provided on a straight-line basis over the estimated useful lives of the assets. When we construct assets, we capitalize costs of the project, including, but not limited to, certain pre-acquisition costs, permitting costs, fees paid to architects and contractors, certain costs of our design and construction subsidiary, property taxes and interest. We must make estimates and assumptions when accounting for capital expenditures. Whether an expenditure is considered an operating expense or a capital asset is a matter of judgment. When constructing or purchasing assets, we must determine whether existing assets are being replaced or otherwise impaired, which also is a matter of judgment. Our depreciation expense for financial statement purposes is highly dependent on the assumptions we make about our assets’ estimated useful lives. We determine the estimated useful lives based upon our experience with similar assets, industry, legal and regulatory factors, and our expectations of the usage of the asset. Whenever events or circumstances occur which change the estimated useful life of an asset, we account for the change prospectively. Interest costs associated with major development and construction projects are capitalized as part of the cost of the project. Interest is typically capitalized on amounts expended using the weighted-average cost of our outstanding borrowings, since we typically do not borrow funds directly related to a development or construction project. We capitalize interest on a project when development or construction activities begin, and cease when such activities are substantially complete or are suspended for more than a brief period. 19 20 ISC // 2014 ANNUAL REPORT // FORM 10-K // 21 Impairments / Losses on Retirements of Long-Lived Assets, Goodwill and Other Intangible Assets. Our consolidated balance sheets include significant amounts of long-lived assets, goodwill and other intangible assets, which could be subject to impairments / losses on retirements. During the fiscal years ended November 30, 2012, 2013 and 2014 we recorded before-tax charges as losses on retirements of long-lived assets primarily attributable to costs to remove certain other long-lived assets located at our motorsports facilities totaling approximately $11.1 million, $16.6 million and $10.1 million, respectively. As of November 30, 2014, goodwill and other intangible assets and property and equipment account for approximately $1.7 billion, or 80.8 percent of our total assets. We account for our goodwill and other intangible assets in accordance with ASC 350 and for our long-lived assets in accordance with ASC 360. We follow applicable authoritative guidance on accounting for goodwill and other intangible assets which specifies, among other things, non-amortization of goodwill and other intangible assets with indefinite useful lives and requires testing for possible impairment, either upon the occurrence of an impairment indicator or at least annually. We complete our annual testing in our fiscal fourth quarter, based on assumptions regarding our future business outlook and expected future discounted cash flows attributable to such assets (using the fair value assessment provision of applicable authoritative guidance), supported by quoted market prices or comparable transactions where available or applicable. While we continue to review and analyze many factors that can impact our business prospects in the future (as further described in “Risk Factors”), our analysis is subjective and is based on conditions existing at, and trends leading up to, the time the estimates and assumptions are made. Different conditions or assumptions, or changes in cash flows or profitability, if significant, could have a material adverse effect on the outcome of the impairment evaluation and our future condition or results of operations. In connection with our fiscal 2014 assessment of goodwill and intangible assets for possible impairment we used the methodology described above. We believe our methods used to determine fair value and evaluate possible impairment were appropriate, relevant, and represent methods customarily available and used for such purposes. Our latest annual assessment of goodwill and other intangible assets in the fourth quarter of fiscal 2014 indicated there had been no impairment and the fair value substantially exceeded the carrying value for the respective reporting units. In addition, our growth strategy includes investing in certain joint venture opportunities. In these equity investments we exert significant influence on the investee but do not have effective control over the investee, which adds an additional element of risk that could harm our operating results or financial condition. The carrying value of our equity investment was $122.6 million at November 30, 2014. Income Taxes. The tax law requires that certain items be included in our tax return at different times than when these items are reflected in our consolidated financial statements. Some of these differences are permanent, such as expenses not deductible on our tax return. However, some differences reverse over time, such as depreciation expense, and these temporary differences create deferred tax assets and liabilities. Our estimates of deferred income taxes and the significant items giving rise to deferred tax assets and liabilities reflect our assessment of actual future taxes to be paid on items reflected in our financial statements, giving consideration to both timing and probability of realization. Actual income taxes could vary significantly from these estimates due to future changes in income tax law or changes or adjustments resulting from final review of our tax returns by taxing authorities, which could also adversely impact our cash flow. In the ordinary course of business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Accruals for uncertain tax positions are provided for in accordance with the requirements of ASC 740, “Income Taxes.” Under this guidance, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50.0 percent likelihood of being realized upon the ultimate settlement. This interpretation also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. Judgment is required in assessing the future tax consequences of events that have been recognized in our financial statements or tax returns. Although we believe the estimates are reasonable, no assurance can be given that the final outcome of these matters will not be different than what is reflected in the historical income tax provisions and accruals. Such differences could have a material impact on the income tax provision and operating results in the period in which such determination is made. Contingent Liabilities. Our determination of the treatment of contingent liabilities in the financial statements is based on our view of the expected outcome of the applicable contingency. In the ordinary course of business, we consult with legal counsel on matters related to litigation and other experts both within and outside our Company. We accrue a liability if the likelihood of an adverse outcome is probable and the amount of loss is reasonably estimable. We disclose the matter but do not accrue a liability if the likelihood of an adverse outcome is reasonably possible and an estimate of loss is not determinable. Legal and other costs incurred in conjunction with loss contingencies are expensed as incurred. Equity and Other Investments Hollywood Casino at Kansas Speedway Kansas Entertainment, a 50/50 joint venture of Penn, a subsidiary of Penn National Gaming, Inc. and Kansas Speedway Development Corporation (“KSDC”), a wholly owned indirect subsidiary of ISC, operates the Hollywood-themed casino and branded destination entertainment facility, overlooking turn two at Kansas Speedway. Penn is the managing member of Kansas Entertainment and is responsible for the operations of the casino. We have accounted for Kansas Entertainment as an equity investment in our financial statements as of November 30, 2014. Start up and related costs through opening were expensed through equity in net loss from equity investments. Our 50.0 percent portion of Kansas Entertainment’s net income was approximately $2.8 million, $9.4 million and $8.9 million for fiscal years 2012, 2013 and 2014, respectively, and is included in equity in net income from equity investments in our consolidated statements of operations. Included in our fiscal 2013 income from equity investment amount is approximately $1.1 million related to a one-time property tax refund. Per the Development Agreement with the Unified Government of Wyandotte County/Kansas City, Kansas (“Unified Government”), the casino is subject to a 1.0 percent of gross gaming revenue penalty if it had not commenced construction on an adjacent hotel by the second anniversary of its opening, which was February 2014. In June 2014, the Unified Government approved an extension of the construction commencement date to give the Unified Government time to complete a feasibility analysis for a new convention center that could be integrated with the hotel. Recently, the Unified Government decided not to proceed with the integrated development, leaving Kansas Entertainment 100 days after the Unified Government’s notification of its decision. Consequently, Kansas Entertainment has until April 10, 2015, subject to any additional time taking into account that groundbreaking cannot realistically occur during winter conditions, to commence construction prior to the enforcement of the aforementioned penalty. The final decision to move forward with the proposed hotel will be market-based and subject to approval by Kansas Entertainment’s board. Should Kansas Entertainment ultimately not build the hotel it will be subject to the penalty from the second anniversary of its opening forward. Accordingly, beginning February 2014, Kansas Entertainment began recording expense equal to 1.0 percent of gross gaming revenue since it did not proceed with construction of a hotel by the original deadline. Included in our income from equity investment amounts for fiscal 2014 is approximately $0.6 million expense related to this penalty. Distributions from Kansas Entertainment, for the year ended November 30, 2014, totaling $22.0 million, consist of $10.1 million received as a distribution from its profits included in net cash provided by operating activities on our statement of cash flows; the remaining $11.9 million received was recognized as a return of capital from investing activities on our statement of cash flows. Subsequent to November 30, 2014, we received an additional $5.5 million distribution from Kansas Entertainment. We received total distributions of approximately $21.5 million in fiscal 2013. Motorsports Authentics Prior to January 31, 2014, the Company was a partner with SMI in a 50/50 joint venture, SMISC, LLC, which, through its wholly owned subsidiary Motorsports Authentics, LLC conducts business under the name MA. MA designs, promotes, markets and distributes motorsports licensed merchandise. On January 31, 2014, SMI abandoned its interest and rights in SMISC, LLC, consequently bringing the Company's ownership to 100.0 percent. MA's operations are included in the Company's consolidated ISC // 2014 ANNUAL REPORT // FORM 10-K // 22 21 22 Impairments / Losses on Retirements of Long-Lived Assets, Goodwill and Other Intangible Assets. Our consolidated balance sheets include significant amounts of long-lived assets, goodwill and other intangible assets, which could be subject to impairments / losses on retirements. During the fiscal years ended November 30, 2012, 2013 and 2014 we recorded before-tax charges as losses on retirements of long-lived assets primarily attributable to costs to remove certain other long-lived assets located at our motorsports facilities totaling approximately $11.1 million, $16.6 million and $10.1 million, respectively. As of November 30, 2014, goodwill and other intangible assets and property and equipment account for approximately $1.7 billion, or 80.8 percent of our total assets. We account for our goodwill and other intangible assets in accordance with ASC 350 and for our long-lived assets in accordance with ASC 360. We follow applicable authoritative guidance on accounting for goodwill and other intangible assets which specifies, among other things, non-amortization of goodwill and other intangible assets with indefinite useful lives and requires testing for possible impairment, either upon the occurrence of an impairment indicator or at least annually. We complete our annual testing in our fiscal fourth quarter, based on assumptions regarding our future business outlook and expected future discounted cash flows attributable to such assets (using the fair value assessment provision of applicable authoritative guidance), supported by quoted market prices or comparable transactions where available or applicable. While we continue to review and analyze many factors that can impact our business prospects in the future (as further described in “Risk Factors”), our analysis is subjective and is based on conditions existing at, and trends leading up to, the time the estimates and assumptions are made. Different conditions or assumptions, or changes in cash flows or profitability, if significant, could have a material adverse effect on the outcome of the impairment evaluation and our future condition or results of operations. In connection with our fiscal 2014 assessment of goodwill and intangible assets for possible impairment we used the methodology described above. We believe our methods used to determine fair value and evaluate possible impairment were appropriate, relevant, and represent methods customarily available and used for such purposes. Our latest annual assessment of goodwill and other intangible assets in the fourth quarter of fiscal 2014 indicated there had been no impairment and the fair value substantially exceeded the carrying value for the respective reporting units. In addition, our growth strategy includes investing in certain joint venture opportunities. In these equity investments we exert significant influence on the investee but do not have effective control over the investee, which adds an additional element of risk that could harm our operating results or financial condition. The carrying value of our equity investment was $122.6 million at November 30, 2014. Income Taxes. The tax law requires that certain items be included in our tax return at different times than when these items are reflected in our consolidated financial statements. Some of these differences are permanent, such as expenses not deductible on our tax return. However, some differences reverse over time, such as depreciation expense, and these temporary differences create deferred tax assets and liabilities. Our estimates of deferred income taxes and the significant items giving rise to deferred tax assets and liabilities reflect our assessment of actual future taxes to be paid on items reflected in our financial statements, giving consideration to both timing and probability of realization. Actual income taxes could vary significantly from these estimates due to future changes in income tax law or changes or adjustments resulting from final review of our tax returns by taxing authorities, which could also adversely impact our cash flow. In the ordinary course of business, there are many transactions and calculations where the ultimate tax outcome is uncertain. Accruals for uncertain tax positions are provided for in accordance with the requirements of ASC 740, “Income Taxes.” Under this guidance, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50.0 percent likelihood of being realized upon the ultimate settlement. This interpretation also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. Judgment is required in assessing the future tax consequences of events that have been recognized in our financial statements or tax returns. Although we believe the estimates are reasonable, no assurance can be given that the final outcome of these matters will not be different than what is reflected in the historical income tax provisions and accruals. Such differences could have a material impact on the income tax provision and operating results in the period in which such determination is made. Contingent Liabilities. Our determination of the treatment of contingent liabilities in the financial statements is based on our view of the expected outcome of the applicable contingency. In the ordinary course of business, we consult with legal counsel on matters related to litigation and other experts both within and outside our Company. We accrue a liability if the likelihood of an adverse outcome is probable and the amount of loss is reasonably estimable. We disclose the matter but do not accrue a liability if the likelihood of an adverse outcome is reasonably possible and an estimate of loss is not determinable. Legal and other costs incurred in conjunction with loss contingencies are expensed as incurred. Equity and Other Investments Hollywood Casino at Kansas Speedway Kansas Entertainment, a 50/50 joint venture of Penn, a subsidiary of Penn National Gaming, Inc. and Kansas Speedway Development Corporation (“KSDC”), a wholly owned indirect subsidiary of ISC, operates the Hollywood-themed casino and branded destination entertainment facility, overlooking turn two at Kansas Speedway. Penn is the managing member of Kansas Entertainment and is responsible for the operations of the casino. We have accounted for Kansas Entertainment as an equity investment in our financial statements as of November 30, 2014. Start up and related costs through opening were expensed through equity in net loss from equity investments. Our 50.0 percent portion of Kansas Entertainment’s net income was approximately $2.8 million, $9.4 million and $8.9 million for fiscal years 2012, 2013 and 2014, respectively, and is included in equity in net income from equity investments in our consolidated statements of operations. Included in our fiscal 2013 income from equity investment amount is approximately $1.1 million related to a one-time property tax refund. Per the Development Agreement with the Unified Government of Wyandotte County/Kansas City, Kansas (“Unified Government”), the casino is subject to a 1.0 percent of gross gaming revenue penalty if it had not commenced construction on an adjacent hotel by the second anniversary of its opening, which was February 2014. In June 2014, the Unified Government approved an extension of the construction commencement date to give the Unified Government time to complete a feasibility analysis for a new convention center that could be integrated with the hotel. Recently, the Unified Government decided not to proceed with the integrated development, leaving Kansas Entertainment 100 days after the Unified Government’s notification of its decision. Consequently, Kansas Entertainment has until April 10, 2015, subject to any additional time taking into account that groundbreaking cannot realistically occur during winter conditions, to commence construction prior to the enforcement of the aforementioned penalty. The final decision to move forward with the proposed hotel will be market-based and subject to approval by Kansas Entertainment’s board. Should Kansas Entertainment ultimately not build the hotel it will be subject to the penalty from the second anniversary of its opening forward. Accordingly, beginning February 2014, Kansas Entertainment began recording expense equal to 1.0 percent of gross gaming revenue since it did not proceed with construction of a hotel by the original deadline. Included in our income from equity investment amounts for fiscal 2014 is approximately $0.6 million expense related to this penalty. Distributions from Kansas Entertainment, for the year ended November 30, 2014, totaling $22.0 million, consist of $10.1 million received as a distribution from its profits included in net cash provided by operating activities on our statement of cash flows; the remaining $11.9 million received was recognized as a return of capital from investing activities on our statement of cash flows. Subsequent to November 30, 2014, we received an additional $5.5 million distribution from Kansas Entertainment. We received total distributions of approximately $21.5 million in fiscal 2013. Motorsports Authentics Prior to January 31, 2014, the Company was a partner with SMI in a 50/50 joint venture, SMISC, LLC, which, through its wholly owned subsidiary Motorsports Authentics, LLC conducts business under the name MA. MA designs, promotes, markets and distributes motorsports licensed merchandise. On January 31, 2014, SMI abandoned its interest and rights in SMISC, LLC, consequently bringing the Company's ownership to 100.0 percent. MA's operations are included in the Company's consolidated 21 22 ISC // 2014 ANNUAL REPORT // FORM 10-K // 23 operations subsequent to the date of SMI's abandonment. Prior to January 31, 2014, MA was accounted for as an equity investment in the Company's financial statements. November 30, 2013. reduction of approximately $12.3 million in our long-term deferred income tax liabilities at November 30, 2014 as compared to As a result of SMI's abandonment of their interest in SMISC, LLC, we recorded other income of approximately $5.4 million, representing the fair value of MA, over the carrying value, as of January 31, 2014. In addition, we recognized tax benefits of approximately $4.0 million, representing the tax benefit associated with various operating loss carryforwards of MA that are expected to be realized in its consolidated tax filings in the future and certain other tax filing positions of SMISC, LLC. MA's operating income contribution, subsequent to consolidation, was immaterial. Prior to the SMI abandonment of SMISC, LLC, we did not recognize any equity income in prior periods, as MA operated at breakeven (see Merchandise Operations in Future Trends In Operating Results of MANAGEMENT'S DISCUSSION AND ANALYSIS ). Staten Island Property On August 5, 2013, we announced that we sold our 676 acre parcel of property located in Staten Island, New York, to Staten Island Marine Development, LLC (“Marine Development”). Marine Development purchased 100 percent of the outstanding equity membership interests of 380 Development LLC (“380 Development”), a wholly owned indirect subsidiary of ISC and owner of the Staten Island property, for a total sales price of $80.0 million. In addition, we previously received approximately $4.2 million for an option provided to the purchaser that is nonrefundable and does not apply to the $80.0 million sales price. We received $7.5 million, less closing and other administrative costs, of the sales price at closing. The remaining sales price was financed with us holding a secured mortgage interest in 380 Development as well as the underlying property. The mortgage balance bears interest at an annual rate of 7.0 percent. In accordance with the terms of the agreement, we have received a principal payment of approximately $6.1 million plus interest on the mortgage balance through November 30, 2014, and we will receive the remaining purchase price of $66.4 million, due March 5, 2016. Interest on the remaining mortgage balance is due quarterly, in arrears, and Marine Development is current with all payments through January 2015. Based on the level of Marine Development's initial investment at closing and continuing investment, we have accounted for the transaction using the cost recovery method and have deferred the recognition of profit of approximately $1.9 million, and interest totaling approximately $5.6 million at November 30, 2014, until the carrying amount of the property is recovered, which will not be until the final payment is made. The net proceeds from the sale, combined with the mortgage interest and related total cash tax benefit, will provide us with approximately $118.0 million in incremental cash flow through the term of the mortgage. Income Taxes The reduction in the valuation allowance associated with the wind-up of certain Canadian business operations is the principal cause of the decreased effective income tax rate as compared to the statutory income tax rate, for the fiscal year ended November 30, 2012. Certain state settlements are the principal cause of the decreased effective income tax rate as compared to the statutory income tax rate, for the fiscal year ended November 30, 2013. The principal causes of the decreased income tax rate for the fiscal year ended November 30, 2014 are the tax treatment related to the other income recognized as a result of SMI's abandonment of their interest in SMISC, LLC on January 31, 2014, including the related tax benefits associated with various operating loss and other carryforwards of MA and certain tax filing positions of SMISC, LLC totaling approximately $4.0 million, along with certain state income tax adjustments. As a result of the above items, our effective income tax rate decreased from the statutory income rate to approximately 36.7 percent, 38.0 percent and 33.0 percent for the fiscal years ended November 30, 2012, 2013 and 2014, respectively. Also of note, while not impacting the combined current and deferred income tax expense and related income tax rate during the fiscal year ended November 30, 2014, as compared to the prior fiscal year, the tax benefit realized in fiscal 2013 attributable to the aforementioned sale of our Staten Island property, as well as the effect of the December 2013 expiration of certain tax legislation impacting depreciation deductions contributed substantially to increased current income taxes paid during the fiscal year ended November 30, 2014 totaling approximately $51.3 million as compared to approximately $18.1 million during fiscal 2013. In addition this overall impact to the current fiscal year tax depreciation deduction substantially contributed to the overall In December 2014, Congress passed the Tax Increase Prevention Act which included a retroactive renewal back to January 1, 2014, of the previously expired tax legislation. The impact of this retroactive tax legislation will not affect our fiscal 2015 effective tax rate, but will reduce related income tax payments. Future Trends in Operating Results International Speedway Corporation is the leading owner of major motorsports entertainment facilities and promoter of motorsports-themed entertainment activities in the United States. We compete for discretionary spending and leisure time with many other entertainment alternatives and are subject to factors that generally affect the recreation, leisure and sports industry, including general economic conditions. Our operations are also sensitive to factors that affect corporate budgets. Such factors include, but are not limited to, general economic conditions, employment levels, business conditions, interest and taxation rates, relative commodity prices, and changes in consumer tastes and spending habits. The unprecedented adverse economic conditions that began in 2008, which significantly impacted consumer confidence and disproportionately affected different demographics of our target customers, continue to influence the frequency with which guests attend our major motorsports entertainment events. Recurring global and regional uncertainty, lack of a broad based middle class economic recovery, and/or further weakening in the domestic economy may continue to adversely impact attendance levels, guest spending levels, and our ability to secure corporate marketing partnerships in the future. Reductions in any of these categories can directly and negatively affect revenues and profitability. Beginning in 2009 we mitigated the decline of certain revenue categories with sustainable cost containment initiatives. Beginning in 2012, we re-instituted regular merit pay increases to more normalized levels. Certain non-controllable costs, such as NASCAR sanction fees, have increased this year and we may continue to experience incremental increases. While we are sustaining the significant cost reductions previously implemented, we do not expect further significant cost reductions. Looking ahead, we expect to benefit from the continuing slow but uneven, recovery in the overall U.S. economy, which we anticipate will improve attendance-related and corporate partnership revenues. Our industry will further benefit from NASCAR securing its broadcast rights through the 2024 season with the largest broadcast rights deal in the sport's 66-year history. Consistent with major sports properties throughout the world, broadcast rights represent our company's largest revenue segment. Expanding and extending this contracted revenue will provide us unparalleled long-term cash flow visibility. We also believe the strategic initiatives we and the motorsports industry have undertaken to grow the sport will continue to strengthen the long-term health of our Company. The industry and its stakeholders have demonstrated their commitment to growing the sport by aligning with and executing upon growth initiatives supporting NASCAR's Industry Action Plan (“IAP”). The IAP's objective is to build upon NASCAR's appeal by enhancing the connection with existing fans, as well as attracting and engaging new Gen Y, youth and multicultural consumers in motorsports. Additional areas of focus within the IAP include building greater product relevance, cultivating driver star power, growing social media activities and enhancing the event experience. In recent years NASCAR has introduced several successful on-track innovations such as the Gen 6 Car design, new qualifying formats and enhancements to the Chase for the Championship that are direct results of IAP initiatives. In January 2014 NASCAR announced a new championship format that puts greater emphasis on winning races all season long, expands the current Chase for the NASCAR Sprint Cup field to 16 drivers, and implements a new round-by-round advancement format that ultimately rewards a battle-tested, worthy champion. The format makes every race matter even more, diminishes points racing, puts a premium on winning races and concludes with a best-of-the-best, first-to-the-finish line showdown race – all of which is exactly what fans want. The new Chase structure is expected to drive NASCAR Sprint Cup competition to a whole new level with a thrilling, easy to understand format. The completion of the 2014 NASCAR season at Homestead-Miami Speedway saw very encouraging results for both at-track consumer and corporate interest, as well as improving year-over-year digital and media (television viewership, on-line/social-media) consumption for the 2014 Chase events. We support NASCAR's IAP on a number of fronts. As referenced above, we are committed to improving our major motorsports facilities to create stronger fan engagement. In particular and one of the most important projects in our history is ISC // 2014 ANNUAL REPORT // FORM 10-K // 24 23 24 operations subsequent to the date of SMI's abandonment. Prior to January 31, 2014, MA was accounted for as an equity investment in the Company's financial statements. reduction of approximately $12.3 million in our long-term deferred income tax liabilities at November 30, 2014 as compared to November 30, 2013. As a result of SMI's abandonment of their interest in SMISC, LLC, we recorded other income of approximately $5.4 million, representing the fair value of MA, over the carrying value, as of January 31, 2014. In addition, we recognized tax benefits of approximately $4.0 million, representing the tax benefit associated with various operating loss carryforwards of MA that are expected to be realized in its consolidated tax filings in the future and certain other tax filing positions of SMISC, LLC. MA's operating income contribution, subsequent to consolidation, was immaterial. Prior to the SMI abandonment of SMISC, LLC, we did not recognize any equity income in prior periods, as MA operated at breakeven (see Merchandise Operations in Future Trends In Operating Results of MANAGEMENT'S DISCUSSION AND ANALYSIS ). Staten Island Property On August 5, 2013, we announced that we sold our 676 acre parcel of property located in Staten Island, New York, to Staten Island Marine Development, LLC (“Marine Development”). Marine Development purchased 100 percent of the outstanding equity membership interests of 380 Development LLC (“380 Development”), a wholly owned indirect subsidiary of ISC and owner of the Staten Island property, for a total sales price of $80.0 million. In addition, we previously received approximately $4.2 million for an option provided to the purchaser that is nonrefundable and does not apply to the $80.0 million sales price. We received $7.5 million, less closing and other administrative costs, of the sales price at closing. The remaining sales price was financed with us holding a secured mortgage interest in 380 Development as well as the underlying property. The mortgage balance bears interest at an annual rate of 7.0 percent. In accordance with the terms of the agreement, we have received a principal payment of approximately $6.1 million plus interest on the mortgage balance through November 30, 2014, and we will receive the remaining purchase price of $66.4 million, due March 5, 2016. Interest on the remaining mortgage balance is due quarterly, in arrears, and Marine Development is current with all payments through January 2015. Based on the level of Marine Development's initial investment at closing and continuing investment, we have accounted for the transaction using the cost recovery method and have deferred the recognition of profit of approximately $1.9 million, and interest totaling approximately $5.6 million at November 30, 2014, until the carrying amount of the property is recovered, which will not be until the final payment is made. The net proceeds from the sale, combined with the mortgage interest and related total cash tax benefit, will provide us with approximately $118.0 million in incremental cash flow through the term of the mortgage. Income Taxes The reduction in the valuation allowance associated with the wind-up of certain Canadian business operations is the principal cause of the decreased effective income tax rate as compared to the statutory income tax rate, for the fiscal year ended November 30, 2012. Certain state settlements are the principal cause of the decreased effective income tax rate as compared to the statutory income tax rate, for the fiscal year ended November 30, 2013. The principal causes of the decreased income tax rate for the fiscal year ended November 30, 2014 are the tax treatment related to the other income recognized as a result of SMI's abandonment of their interest in SMISC, LLC on January 31, 2014, including the related tax benefits associated with various operating loss and other carryforwards of MA and certain tax filing positions of SMISC, LLC totaling approximately $4.0 million, along with certain state income tax adjustments. As a result of the above items, our effective income tax rate decreased from the statutory income rate to approximately 36.7 percent, 38.0 percent and 33.0 percent for the fiscal years ended November 30, 2012, 2013 and 2014, respectively. Also of note, while not impacting the combined current and deferred income tax expense and related income tax rate during the fiscal year ended November 30, 2014, as compared to the prior fiscal year, the tax benefit realized in fiscal 2013 attributable to the aforementioned sale of our Staten Island property, as well as the effect of the December 2013 expiration of certain tax legislation impacting depreciation deductions contributed substantially to increased current income taxes paid during the fiscal year ended November 30, 2014 totaling approximately $51.3 million as compared to approximately $18.1 million during fiscal 2013. In addition this overall impact to the current fiscal year tax depreciation deduction substantially contributed to the overall In December 2014, Congress passed the Tax Increase Prevention Act which included a retroactive renewal back to January 1, 2014, of the previously expired tax legislation. The impact of this retroactive tax legislation will not affect our fiscal 2015 effective tax rate, but will reduce related income tax payments. Future Trends in Operating Results International Speedway Corporation is the leading owner of major motorsports entertainment facilities and promoter of motorsports-themed entertainment activities in the United States. We compete for discretionary spending and leisure time with many other entertainment alternatives and are subject to factors that generally affect the recreation, leisure and sports industry, including general economic conditions. Our operations are also sensitive to factors that affect corporate budgets. Such factors include, but are not limited to, general economic conditions, employment levels, business conditions, interest and taxation rates, relative commodity prices, and changes in consumer tastes and spending habits. The unprecedented adverse economic conditions that began in 2008, which significantly impacted consumer confidence and disproportionately affected different demographics of our target customers, continue to influence the frequency with which guests attend our major motorsports entertainment events. Recurring global and regional uncertainty, lack of a broad based middle class economic recovery, and/or further weakening in the domestic economy may continue to adversely impact attendance levels, guest spending levels, and our ability to secure corporate marketing partnerships in the future. Reductions in any of these categories can directly and negatively affect revenues and profitability. Beginning in 2009 we mitigated the decline of certain revenue categories with sustainable cost containment initiatives. Beginning in 2012, we re-instituted regular merit pay increases to more normalized levels. Certain non-controllable costs, such as NASCAR sanction fees, have increased this year and we may continue to experience incremental increases. While we are sustaining the significant cost reductions previously implemented, we do not expect further significant cost reductions. Looking ahead, we expect to benefit from the continuing slow but uneven, recovery in the overall U.S. economy, which we anticipate will improve attendance-related and corporate partnership revenues. Our industry will further benefit from NASCAR securing its broadcast rights through the 2024 season with the largest broadcast rights deal in the sport's 66-year history. Consistent with major sports properties throughout the world, broadcast rights represent our company's largest revenue segment. Expanding and extending this contracted revenue will provide us unparalleled long-term cash flow visibility. We also believe the strategic initiatives we and the motorsports industry have undertaken to grow the sport will continue to strengthen the long-term health of our Company. The industry and its stakeholders have demonstrated their commitment to growing the sport by aligning with and executing upon growth initiatives supporting NASCAR's Industry Action Plan (“IAP”). The IAP's objective is to build upon NASCAR's appeal by enhancing the connection with existing fans, as well as attracting and engaging new Gen Y, youth and multicultural consumers in motorsports. Additional areas of focus within the IAP include building greater product relevance, cultivating driver star power, growing social media activities and enhancing the event experience. In recent years NASCAR has introduced several successful on-track innovations such as the Gen 6 Car design, new qualifying formats and enhancements to the Chase for the Championship that are direct results of IAP initiatives. In January 2014 NASCAR announced a new championship format that puts greater emphasis on winning races all season long, expands the current Chase for the NASCAR Sprint Cup field to 16 drivers, and implements a new round-by-round advancement format that ultimately rewards a battle-tested, worthy champion. The format makes every race matter even more, diminishes points racing, puts a premium on winning races and concludes with a best-of-the-best, first-to-the-finish line showdown race – all of which is exactly what fans want. The new Chase structure is expected to drive NASCAR Sprint Cup competition to a whole new level with a thrilling, easy to understand format. The completion of the 2014 NASCAR season at Homestead-Miami Speedway saw very encouraging results for both at-track consumer and corporate interest, as well as improving year-over-year digital and media (television viewership, on-line/social-media) consumption for the 2014 Chase events. We support NASCAR's IAP on a number of fronts. As referenced above, we are committed to improving our major motorsports facilities to create stronger fan engagement. In particular and one of the most important projects in our history is 23 24 ISC // 2014 ANNUAL REPORT // FORM 10-K // 25 the redevelopment of the frontstretch of Daytona, the Company's 55-year-old flagship motorsports facility, to enhance the event experience for our fans, marketing partners, broadcasters and the motorsports industry (See "DAYTONA Rising: Reimagining an American Icon"). We are confident that elevating the experience at the most important motorsports facility in North America will grow the Daytona 500 brand, our 12 other major motorsports facilities' brands and NASCAR's brand. Ultimately this strategic project will positively influence attendance trends, corporate involvement in the sport, and the long-term strength of future broadcast media rights revenues. Admissions Achieving event sellouts and creating excess demand are crucial to the optimal performance of our major motorsports facilities that host NASCAR Sprint Cup Series events. An important component of our operating strategy has been our long-standing practice of focusing on supply and demand when evaluating ticket pricing and adjusting capacity at our facilities. By effectively managing both ticket prices and seating capacity, we have historically shown the ability to stimulate ticket renewals and advance ticket sales. Advance ticket sales result in earlier cash flow and reduce the potential negative impact of actual, as well as forecasted, inclement weather. With any ticketing initiative, we first examine our ticket pricing structure for each segmented area within our major motorsports entertainment facilities to ensure prices are on target with market demand. When determined necessary, we adjust ticket pricing. We believe our ticket pricing is consistent with current demand, providing attractive price points for all income levels. It is important that we maintain the integrity of our ticket pricing model by ensuring our customers who purchase tickets during the renewal period get preferential pricing. We do not adjust pricing downward inside of the sales cycle to avoid rewarding last-minute ticket buyers by discounting tickets. Further, we closely monitor and manage the availability of promotional tickets. Encouraging late cycle buying and offering excess promotional tickets could have a detrimental effect on our ticket pricing model and long-term value of our business. We believe it is more important to encourage advance ticket sales and maintain price integrity to achieve long-term growth rather than to capture short-term incremental revenue at the expense of our customers who purchased tickets during the renewal period. We continue to explore and implement innovative ticket pricing strategies whereby prices increase over time as well as price increases week of/day of races to capture incremental revenues. Adjusting seating capacity is another consumer-focused strategy to promote sellouts, create excess demand and in turn increase capacity utilization at our major motorsports facilities. Over the past few years, we have reduced capacity at our major motorsports facilities. A significant portion of the capacity reduction was a result of our goal to provide improved fan amenities such as wider seating, create social zones with greater fan interaction/engagement for our guests, and remove sections that do not provide adequate sight lines. Based on our experience and the continual evolution of modern sports facilities, ticket demand relies strongly on creating a more personal experience for the fans. Enhancing the live event experience to compete with the at- home television experience is a critical strategy for our future growth. Other benefits from capacity management include improved pricing power for our events; increasing tickets sold in the renewal cycle; increasing customer retention; driving greater attendance to our lead-in events, such as NASCAR's Xfinity and Camping World Truck series events; driving stronger interest from corporate sponsors; and creating a more visually compelling event for the television audience. Other key strategic focus areas to build fan engagement include providing enhanced at-track audio and visual experiences, additional concession and merchandise points-of-sale, more social zones and greater wireless connectivity. We continue to monitor market demand and explore next generation live-sports entertainment fan amenities, all of which could further impact how we manage capacity and spend capital at our major motorsports facilities. Corporate Partnerships NASCAR is a powerful brand with a loyal fan base that is aware of, appreciates and supports corporate participation to a greater extent than fans of any other sports property. The combination of brand power and fan loyalty provides an attractive platform for robust corporate partnerships. The number of Fortune 500 companies invested in NASCAR remains higher than any other sport. Approximately one-in-four Fortune 500 companies use NASCAR as part of their marketing strategy and the trend is increasing. The number of Fortune 500 companies investing in NASCAR increased three percent in 2014 versus prior year; and is an eleven percent improvement versus 2008. We believe that our presence in key metropolitan statistical areas, year-round event schedule, impressive portfolio of major motorsports events and attractive fan demographics are beneficial as we continue to pursue renewal and expansion of existing corporate marketing partnerships and establish new corporate relationships. Companies are demanding more quantifiable return on investment from their sports marketing strategies and our company is focused on delivering enhanced value through our strategic initiatives. This includes enhanced facilities, more frequent and diverse content at our facilities, and deeper understanding of and integration with our customers' business, among other things. From an entitlement perspective, we secured all NASCAR Sprint Cup and Xfinity and Camping World Truck series event entitlements for the 2014 fiscal year, which allowed the sales team to focus more resources on media advertising, prospecting and growing official status categories. As a result, for our 2014 fiscal year, our corporate sales were within one percentage point of our 2014 target. Excluding soft media sales, the company grew gross corporate partnership revenue (versus prior year) for the first time since the beginning of the recession. Looking forward to 2015, we continue to be encouraged by corporate sales trends that have us better positioned than at the same time in recent prior years. As of late December 2015, we have sold all but one NASCAR Sprint Cup race entitlement, three Xfinity Series entitlements, and two Camping World Truck Series entitlements and have secured 74.0 percent of our total 2015 corporate sales target compared to 72.0 percent at this point for 2014. In addition, we have secured two long-term founding partnerships for DAYTONA Rising in Toyota and Florida Hospital, both in excess of ten year partnerships. Television Broadcast and Ancillary Media Rights Domestic broadcast and ancillary media rights fees revenues are ISC's largest revenue segment, accounting for approximately 46.5 percent of 2014 total revenues. Starting in 2007, NASCAR entered into combined eight-year agreements with Fox Sports Group (“FOX”), ABC/ESPN, TNT and SPEED for the domestic broadcast and related rights for its three national touring series - Sprint Cup, Xfinity and Camping World Truck. For the first 26 regular season events in fiscal 2014 (i.e. through Richmond fall race), NASCAR Sprint Cup events were the number one or two sporting event on television for 21 of the 26 weekends (i.e. Texas Sprint Cup event aired on Monday due to rain). Through 36 broadcast events culminating in the season finale at Homestead-Miami Speedway, the NASCAR Sprint Cup Series averaged 5.3 million viewers per event with approximately 62 million total unique viewers. As the Chase for the Championship progressed under the new format, viewership ramped up. The final two events of the 2014 NASCAR Sprint Cup season saw an approximately ten percent television viewership increase over the same events in 2013. NASCAR has solidified its place among top major televised sports, placing only second to the NFL for average viewership per event. Also, the NASCAR Xfinity Series and NASCAR Camping World Truck Series rank as the second and third highest rated motorsports series (respectively) on television after the NASCAR Sprint Cup Series. As part of the IAP, NASCAR and FOX Deportes, the number one U.S. Latino Sports network, joined together to provide the sport's most expansive Spanish-language broadcast offering with coverage of 15 Sprint Cup Series races, including for the first time, a Spanish-language broadcast of the 2013 Daytona 500. For the 2014 season, Hispanic viewership for the NASCAR Sprint Cup Series continued the double digit growth-trend, building on growth from the 2013 season that saw a 40.0 percent increase in that important demographic. In August 2013, NASCAR finalized multi-platform broadcast rights agreements with NBCUniversal (“NBC”) and FOX for 10 years, beginning in 2015 through the 2024 season, for the broadcast and related rights for NASCAR's three national touring series. Financial terms were not disclosed but leading industry sources value the combined agreements at approximately $8.2 billion over the 10 years. The agreements include Spanish-language rights and 'TV Everywhere rights', which will allow NASCAR content to stream over the broadcasters'-affiliated websites. FOX has exclusive rights to the first 16 NASCAR Sprint Cup Series point races beginning each year with the prestigious Daytona 500. In addition, FOX retains the rights to the NASCAR Sprint All-Star Race, The Sprint Unlimited, Budweiser Duel, 14 NASCAR Xfinity Series events and the entire NASCAR Camping World Truck Series. NBC has exclusive rights to the final 20 NASCAR Sprint Cup Series points races, final 19 NASCAR Xfinity Series events, select NASCAR Regional & Touring Series events and other live content beginning in 2015. In total, NASCAR will have the same number of Sprint Cup races on network television, 16; 9 on FOX and 7 on NBC; as it does in the 2007 to 2014 television package. ISC // 2014 ANNUAL REPORT // FORM 10-K // 26 25 26 the redevelopment of the frontstretch of Daytona, the Company's 55-year-old flagship motorsports facility, to enhance the event experience for our fans, marketing partners, broadcasters and the motorsports industry (See "DAYTONA Rising: Reimagining an American Icon"). We are confident that elevating the experience at the most important motorsports facility in North America will grow the Daytona 500 brand, our 12 other major motorsports facilities' brands and NASCAR's brand. Ultimately this strategic project will positively influence attendance trends, corporate involvement in the sport, and the long-term strength of future broadcast media rights revenues. Admissions Achieving event sellouts and creating excess demand are crucial to the optimal performance of our major motorsports facilities that host NASCAR Sprint Cup Series events. An important component of our operating strategy has been our long-standing practice of focusing on supply and demand when evaluating ticket pricing and adjusting capacity at our facilities. By effectively managing both ticket prices and seating capacity, we have historically shown the ability to stimulate ticket renewals and advance ticket sales. Advance ticket sales result in earlier cash flow and reduce the potential negative impact of actual, as well as forecasted, inclement weather. With any ticketing initiative, we first examine our ticket pricing structure for each segmented area within our major motorsports entertainment facilities to ensure prices are on target with market demand. When determined necessary, we adjust ticket pricing. We believe our ticket pricing is consistent with current demand, providing attractive price points for all It is important that we maintain the integrity of our ticket pricing model by ensuring our customers who purchase tickets during the renewal period get preferential pricing. We do not adjust pricing downward inside of the sales cycle to avoid rewarding last-minute ticket buyers by discounting tickets. Further, we closely monitor and manage the availability of promotional tickets. Encouraging late cycle buying and offering excess promotional tickets could have a detrimental effect on our ticket pricing model and long-term value of our business. We believe it is more important to encourage advance ticket sales and maintain price integrity to achieve long-term growth rather than to capture short-term incremental revenue at the expense of our customers who purchased tickets during the renewal period. We continue to explore and implement innovative ticket pricing strategies whereby prices increase over time as well as price increases week of/day of races to capture incremental revenues. Adjusting seating capacity is another consumer-focused strategy to promote sellouts, create excess demand and in turn increase capacity utilization at our major motorsports facilities. Over the past few years, we have reduced capacity at our major motorsports facilities. A significant portion of the capacity reduction was a result of our goal to provide improved fan amenities such as wider seating, create social zones with greater fan interaction/engagement for our guests, and remove sections that do not provide adequate sight lines. Based on our experience and the continual evolution of modern sports facilities, ticket demand relies strongly on creating a more personal experience for the fans. Enhancing the live event experience to compete with the at- home television experience is a critical strategy for our future growth. Other benefits from capacity management include improved pricing power for our events; increasing tickets sold in the renewal cycle; increasing customer retention; driving greater attendance to our lead-in events, such as NASCAR's Xfinity and Camping World Truck series events; driving stronger interest from corporate sponsors; and creating a more visually compelling event for the television audience. Other key strategic focus areas to build fan engagement include providing enhanced at-track audio and visual experiences, additional concession and merchandise points-of-sale, more social zones and greater wireless connectivity. We continue to monitor market demand and explore next generation live-sports entertainment fan amenities, all of which could further impact how we manage capacity and spend capital at our major motorsports facilities. Corporate Partnerships NASCAR is a powerful brand with a loyal fan base that is aware of, appreciates and supports corporate participation to a greater extent than fans of any other sports property. The combination of brand power and fan loyalty provides an attractive platform for robust corporate partnerships. The number of Fortune 500 companies invested in NASCAR remains higher than any other sport. Approximately one-in-four Fortune 500 companies use NASCAR as part of their marketing strategy and the trend is increasing. The number of Fortune 500 companies investing in NASCAR increased three percent in 2014 versus prior year; and is an eleven percent improvement versus 2008. We believe that our presence in key metropolitan statistical areas, year-round event schedule, impressive portfolio of major motorsports events and attractive fan demographics are beneficial as we continue to pursue renewal and expansion of existing corporate marketing partnerships and establish new corporate relationships. Companies are demanding more quantifiable return on investment from their sports marketing strategies and our company is focused on delivering enhanced value through our strategic initiatives. This includes enhanced facilities, more frequent and diverse content at our facilities, and deeper understanding of and integration with our customers' business, among other things. From an entitlement perspective, we secured all NASCAR Sprint Cup and Xfinity and Camping World Truck series event entitlements for the 2014 fiscal year, which allowed the sales team to focus more resources on media advertising, prospecting and growing official status categories. As a result, for our 2014 fiscal year, our corporate sales were within one percentage point of our 2014 target. Excluding soft media sales, the company grew gross corporate partnership revenue (versus prior year) for the first time since the beginning of the recession. Looking forward to 2015, we continue to be encouraged by corporate sales trends that have us better positioned than at the same time in recent prior years. As of late December 2015, we have sold all but one NASCAR Sprint Cup race entitlement, three Xfinity Series entitlements, and two Camping World Truck Series entitlements and have secured 74.0 percent of our total 2015 corporate sales target compared to 72.0 percent at this point for 2014. In addition, we have secured two long-term founding partnerships for DAYTONA Rising in Toyota and Florida Hospital, both in excess of ten year partnerships. income levels. Television Broadcast and Ancillary Media Rights Domestic broadcast and ancillary media rights fees revenues are ISC's largest revenue segment, accounting for approximately 46.5 percent of 2014 total revenues. Starting in 2007, NASCAR entered into combined eight-year agreements with Fox Sports Group (“FOX”), ABC/ESPN, TNT and SPEED for the domestic broadcast and related rights for its three national touring series - Sprint Cup, Xfinity and Camping World Truck. For the first 26 regular season events in fiscal 2014 (i.e. through Richmond fall race), NASCAR Sprint Cup events were the number one or two sporting event on television for 21 of the 26 weekends (i.e. Texas Sprint Cup event aired on Monday due to rain). Through 36 broadcast events culminating in the season finale at Homestead-Miami Speedway, the NASCAR Sprint Cup Series averaged 5.3 million viewers per event with approximately 62 million total unique viewers. As the Chase for the Championship progressed under the new format, viewership ramped up. The final two events of the 2014 NASCAR Sprint Cup season saw an approximately ten percent television viewership increase over the same events in 2013. NASCAR has solidified its place among top major televised sports, placing only second to the NFL for average viewership per event. Also, the NASCAR Xfinity Series and NASCAR Camping World Truck Series rank as the second and third highest rated motorsports series (respectively) on television after the NASCAR Sprint Cup Series. As part of the IAP, NASCAR and FOX Deportes, the number one U.S. Latino Sports network, joined together to provide the sport's most expansive Spanish-language broadcast offering with coverage of 15 Sprint Cup Series races, including for the first time, a Spanish-language broadcast of the 2013 Daytona 500. For the 2014 season, Hispanic viewership for the NASCAR Sprint Cup Series continued the double digit growth-trend, building on growth from the 2013 season that saw a 40.0 percent increase in that important demographic. In August 2013, NASCAR finalized multi-platform broadcast rights agreements with NBCUniversal (“NBC”) and FOX for 10 years, beginning in 2015 through the 2024 season, for the broadcast and related rights for NASCAR's three national touring series. Financial terms were not disclosed but leading industry sources value the combined agreements at approximately $8.2 billion over the 10 years. The agreements include Spanish-language rights and 'TV Everywhere rights', which will allow NASCAR content to stream over the broadcasters'-affiliated websites. FOX has exclusive rights to the first 16 NASCAR Sprint Cup Series point races beginning each year with the prestigious Daytona 500. In addition, FOX retains the rights to the NASCAR Sprint All-Star Race, The Sprint Unlimited, Budweiser Duel, 14 NASCAR Xfinity Series events and the entire NASCAR Camping World Truck Series. NBC has exclusive rights to the final 20 NASCAR Sprint Cup Series points races, final 19 NASCAR Xfinity Series events, select NASCAR Regional & Touring Series events and other live content beginning in 2015. In total, NASCAR will have the same number of Sprint Cup races on network television, 16; 9 on FOX and 7 on NBC; as it does in the 2007 to 2014 television package. 25 26 ISC // 2014 ANNUAL REPORT // FORM 10-K // 27 NASCAR's solid ratings as well as other factors such as the strong demand for live broadcasting and the proliferation of digital video recorders (“DVR”), tablets, and on-demand content were significant factors for NASCAR signing the largest broadcast rights deal in the sport's 66-year history. In August 2013, FOX debuted its 24-hour Fox Sports 1 network to compete with ESPN. Fox Sports 1 is available in approximately 90 million TV households. In addition to NASCAR (beginning in 2015), Fox Sports 1 has new or renewed deals for Major League Baseball, college football and basketball, Ultimate Fighting Championship, Major League Soccer ("MLS"), United States Golf Association, as well as other sports. Fox Sports 1 represents the latest in the long migration of marquee sports from broadcast TV to cable/satellite, who generally can support a higher investment due to subscriber fees that are not available to traditional networks. In early 2014, the network performed exceptionally well broadcasting NASCAR events leading up to the DAYTONA 500. The partnership continues in 2015 with Fox Sports 1 broadcasting 7 live NASCAR Sprint Cup events and 11 NASCAR Xfinity events. NBC Sports Network is in more than 79 million homes, and in addition to NASCAR (beginning in 2015) serves sports fans by airing coverage of the Olympic Games and Trials as well as the National Hockey League ("NHL"), MLS, IndyCar Series, Tour de France, major college football and basketball, and horse racing surrounding the Triple Crown, among other events. Domestic broadcast media rights fees provide significant cash flow visibility to us, race teams and NASCAR over the contract term. Television broadcast and ancillary rights fees received from NASCAR for the NASCAR Sprint Cup, Xfinity and Camping World Truck series events conducted at our facilities under these agreements, and recorded as part of motorsports related revenue, were approximately $281.2 million, $292.5 million and $302.9 million for fiscal 2012, 2013 and 2014, respectively. Operating income generated by these media rights were approximately $204.4 million, $213.0 million and $220.1 million for fiscal 2012, 2013 and 2014, respectively. Looking forward, television broadcast revenues under the new broadcast rights agreements beginning in 2015 will increase by 3.8 percent over 2014; and our broadcast rights revenues under the new contracts are expected to increase between 3 percent and 5 percent annually over the 10-year contract term for an average of 3.9 percent. Locking in our largest revenue source provides the company with a number of significant benefits. This includes greater cash flow visibility and growth providing a solid base to continue smartly reinvesting in our facilities. We are also confident that working with best-in-class media partners will take NASCAR to the next level, ultimately growing consumer and corporate participation. As media rights revenues fluctuate so do the variable costs tied to the percentage of broadcast rights fees required to be paid to competitors as part of NASCAR Sprint Cup, Xfinity and Camping World Truck series sanction agreements. NASCAR prize and point fund monies, as well as sanction fees (“NASCAR direct expenses”), are outlined in the sanction agreement for each event and are negotiated in advance of an event. As previously discussed, included in these NASCAR direct expenses are amounts equal to 25.0 percent of the gross domestic television broadcast rights fees allocated to our NASCAR Sprint Cup, Xfinity and Camping World Truck series events, as part of prize and point fund money (See “Critical Accounting Policies and Estimates - Revenue Recognition”). These annually negotiated contractual amounts paid to NASCAR contribute to the support and growth of the sport of NASCAR stock car racing through payments to the teams and sanction fees paid to NASCAR. As such, we do not expect these costs to materially decrease in the future as a percentage of admissions and motorsports related income. A rapidly-growing element of our media platform is an expanded focus and investment in the digital media environment. This includes mobile applications and social media engagement. A November 2014 study of broad based digital media consumption habits found that amount of time spent on mobile devices has increased twenty percent since 2010, digital video viewing time has doubled since 2012, and 52 percent of on-line retail traffic now originates from mobile devices. Traditional consumption channels like television and radio still make up a majority of the average time spent per adult day, but on-line consumption whether using a desktop or mobile device now equals almost 25 percent of average daily time consuming audio and video content, skewing higher for younger demographics. Responding to shifts in the way sports fans consume content, in 2013 and 2014 NASCAR made enhancements to NASCAR.com and NASCAR Mobile Apps that have strengthened the Industry's digital presence. In addition, NASCAR also created the Fan and Media Engagement Center to better understand digital conversations and optimize engagement with the social community. In only the second full year of managing its digital rights in-house, NASCAR experienced significant growth, exceeding one billion aggregate page views across NASCAR.com, NASCAR mobile web and the NASCAR Mobile app in 2014. The billion page view milestone marks a 45 percent year-over-year increase in engagement on the platform, according to data from Adobe Omniture SiteCatalyst. In the 2014 NASCAR season, NASCAR.com averaged 1.4 million unique visitors on NASCAR Sprint Cup race days; and the NASCAR Mobile applications were downloaded 4.5 million times. We expect these channels will continue to grow and the industry is well positioned to engage and monetize these digital channels as our fans (mirroring society-at-large) consume more content via this way. Sanctioning Bodies Our success has been, and is expected to remain, dependent on maintaining good working relationships with the organizations that sanction events at our facilities, particularly with NASCAR, whose sanctioned events at our wholly owned facilities accounted for approximately 86.3 percent of our revenues in fiscal 2014. NASCAR continues to entertain and discuss proposals from track operators regarding potential realignment of their portfolio of NASCAR Sprint Cup Series dates to more geographically diverse and potentially more desirable markets where there may be greater demand, resulting in an opportunity for increased revenues to the track operators. We believe that realignments have provided, and will continue to provide, incremental net positive revenue and earnings as well as further enhance the sport's exposure in highly desirable markets, which we believe benefits the sport's fans, teams, sponsors and television broadcast partners as well as promoters. Merchandise Operations In 2015, NASCAR and NASCAR Team Properties announced a 10-year agreement with Fanatics to operate NASCAR’s entire at-track merchandise business and deliver fans an enhanced, experiential at-track shopping environment. As part of the agreement, Fanatics will be the exclusive retailer of NASCAR and driver merchandise at trackside for all 38 NASCAR Sprint Cup Series events. In addition, Fanatics also has contracted with ISC for 10 year exclusive retail merchandise rights for its track trademarks and certain other intellectual property at all ISC tracks. The new trackside retail model operated by Fanatics will evolve from using solely haulers for each specific team or driver to displaying all merchandise in a climate-controlled superstore retail environment supported by, in instances, smaller satellite retail touch points around the track. The new model will provide a more personal and convenient shopping experience for race fans. We believe this improved trackside merchandise model, combined with an upgraded online and mobile experience, will better position ISC and the industry to maximize merchandise sales while delivering top quality experience to our fans. Consequently, ISC's wholly owned subsidiaries, Americrown and MA, will no longer provide at track merchandise to fans at motorsports events and therefore will no longer recognize related revenues. Instead, the Company will receive a percentage of sales from Fanatics, recorded as part of Food, Beverage and Merchandise Revenue. For fiscal 2015, we are projecting a reduction in operating income of approximately $4.0 million to $5.0 million related to this new merchandise business model. Contributing significantly to this reduction are one-time, non-recurring operating expenses totaling $3.5 million to $4.5 million related to partial year operations, for which there is no associated revenue, and restructuring costs to effectively transition merchandise operations. Capital Improvements Enhancing the live event experience for our guests is a critical strategy for our future growth. We compete for the consumers' discretionary dollar with other entertainment options such as concerts and other major sporting events not just motorsports events. In addition, fans continue to demonstrate willingness to pay for more unique, inversive, and segmented experiences that cannot be duplicated at-home. Today's consumer wants improved traffic flow, comfortable and wider seating, clean and available facilities, more points of sale, enhanced audio and visual engagement, social zones and greater connectivity. Providing these enhancements often requires capital spending. We remain confident that our focus on driving incremental earnings by improving the fan experience will, in time, lead to increased ticket sales with better pricing power, growth in sponsorship and hospitality sales, better prospects for continued growth in broadcast media rights fees agreements, and greater potential to capture market share. As such, ISC's Board of Directors endorsed a capital allocation plan for fiscal 2013 through fiscal 2017 to not exceed $600.0 million. The five-year capital expenditure plan encompasses capital expenditures for ISC's 13 major sports facilities, including DAYTONA Rising (see "DAYTONA Rising: Reimagining an American Icon"), as well as any commitments to undertake ONE DAYTONA (see "ONE DAYTONA"). It is vital that we continue to elevate our Daytona brand to ensure that it remains the pinnacle of motorsports facilities, which will generate further profitability and cash flow to the Company. We also anticipate modest capital spending on other projects for maintenance, safety and regulatory requirements. We are confident that by delivering ISC // 2014 ANNUAL REPORT // FORM 10-K // 28 27 28 NASCAR's solid ratings as well as other factors such as the strong demand for live broadcasting and the proliferation of digital video recorders (“DVR”), tablets, and on-demand content were significant factors for NASCAR signing the largest broadcast rights deal in the sport's 66-year history. In August 2013, FOX debuted its 24-hour Fox Sports 1 network to compete with ESPN. Fox Sports 1 is available in approximately 90 million TV households. In addition to NASCAR (beginning in 2015), Fox Sports 1 has new or renewed deals for Major League Baseball, college football and basketball, Ultimate Fighting Championship, Major League Soccer ("MLS"), sports from broadcast TV to cable/satellite, who generally can support a higher investment due to subscriber fees that are not available to traditional networks. In early 2014, the network performed exceptionally well broadcasting NASCAR events leading up to the DAYTONA 500. The partnership continues in 2015 with Fox Sports 1 broadcasting 7 live NASCAR Sprint Cup events and 11 NASCAR Xfinity events. NBC Sports Network is in more than 79 million homes, and in addition to NASCAR (beginning in 2015) serves sports fans by airing coverage of the Olympic Games and Trials as well as the National Hockey League ("NHL"), MLS, IndyCar Series, Tour de France, major college football and basketball, and horse racing surrounding the Triple Crown, among other events. Domestic broadcast media rights fees provide significant cash flow visibility to us, race teams and NASCAR over the contract Camping World Truck series events conducted at our facilities under these agreements, and recorded as part of motorsports related revenue, were approximately $281.2 million, $292.5 million and $302.9 million for fiscal 2012, 2013 and 2014, respectively. Operating income generated by these media rights were approximately $204.4 million, $213.0 million and $220.1 million for fiscal 2012, 2013 and 2014, respectively. Looking forward, television broadcast revenues under the new broadcast rights agreements beginning in 2015 will increase by 3.8 percent over 2014; and our broadcast rights revenues under the new contracts are expected to increase between 3 percent and 5 percent annually over the 10-year contract term for an average of 3.9 percent. Locking in our largest revenue source provides the company with a number of significant benefits. This includes greater cash flow visibility and growth providing a solid base to continue smartly reinvesting in our facilities. We are also confident that working with best-in-class media partners will take NASCAR to the next level, ultimately growing consumer and corporate participation. As media rights revenues fluctuate so do the variable costs tied to the percentage of broadcast rights fees required to be paid to competitors as part of NASCAR Sprint Cup, Xfinity and Camping World Truck series sanction agreements. NASCAR prize and point fund monies, as well as sanction fees (“NASCAR direct expenses”), are outlined in the sanction agreement for each event and are negotiated in advance of an event. As previously discussed, included in these NASCAR direct expenses are amounts equal to 25.0 percent of the gross domestic television broadcast rights fees allocated to our NASCAR Sprint Cup, Xfinity and Camping World Truck series events, as part of prize and point fund money (See “Critical Accounting Policies and and growth of the sport of NASCAR stock car racing through payments to the teams and sanction fees paid to NASCAR. As such, we do not expect these costs to materially decrease in the future as a percentage of admissions and motorsports related income. A rapidly-growing element of our media platform is an expanded focus and investment in the digital media environment. This includes mobile applications and social media engagement. A November 2014 study of broad based digital media consumption habits found that amount of time spent on mobile devices has increased twenty percent since 2010, digital video viewing time has doubled since 2012, and 52 percent of on-line retail traffic now originates from mobile devices. Traditional consumption channels like television and radio still make up a majority of the average time spent per adult day, but on-line consumption whether using a desktop or mobile device now equals almost 25 percent of average daily time consuming audio and video content, skewing higher for younger demographics. Responding to shifts in the way sports fans consume content, in 2013 and 2014 NASCAR made enhancements to NASCAR.com and NASCAR Mobile Apps that have strengthened the Industry's digital presence. In addition, NASCAR also created the Fan and Media Engagement Center to better understand digital conversations and optimize engagement with the social community. In only the second full year of managing its digital rights in-house, NASCAR experienced significant United States Golf Association, as well as other sports. Fox Sports 1 represents the latest in the long migration of marquee Sanctioning Bodies growth, exceeding one billion aggregate page views across NASCAR.com, NASCAR mobile web and the NASCAR Mobile app in 2014. The billion page view milestone marks a 45 percent year-over-year increase in engagement on the platform, according to data from Adobe Omniture SiteCatalyst. In the 2014 NASCAR season, NASCAR.com averaged 1.4 million unique visitors on NASCAR Sprint Cup race days; and the NASCAR Mobile applications were downloaded 4.5 million times. We expect these channels will continue to grow and the industry is well positioned to engage and monetize these digital channels as our fans (mirroring society-at-large) consume more content via this way. Our success has been, and is expected to remain, dependent on maintaining good working relationships with the organizations that sanction events at our facilities, particularly with NASCAR, whose sanctioned events at our wholly owned facilities accounted for approximately 86.3 percent of our revenues in fiscal 2014. NASCAR continues to entertain and discuss proposals from track operators regarding potential realignment of their portfolio of NASCAR Sprint Cup Series dates to more geographically diverse and potentially more desirable markets where there may be greater demand, resulting in an opportunity for increased revenues to the track operators. We believe that realignments have provided, and will continue to provide, incremental net positive revenue and earnings as well as further enhance the sport's exposure in highly desirable markets, which we believe benefits the sport's fans, teams, sponsors and television broadcast partners as well as promoters. term. Television broadcast and ancillary rights fees received from NASCAR for the NASCAR Sprint Cup, Xfinity and Merchandise Operations In 2015, NASCAR and NASCAR Team Properties announced a 10-year agreement with Fanatics to operate NASCAR’s entire at-track merchandise business and deliver fans an enhanced, experiential at-track shopping environment. As part of the agreement, Fanatics will be the exclusive retailer of NASCAR and driver merchandise at trackside for all 38 NASCAR Sprint Cup Series events. In addition, Fanatics also has contracted with ISC for 10 year exclusive retail merchandise rights for its track trademarks and certain other intellectual property at all ISC tracks. The new trackside retail model operated by Fanatics will evolve from using solely haulers for each specific team or driver to displaying all merchandise in a climate-controlled superstore retail environment supported by, in instances, smaller satellite retail touch points around the track. The new model will provide a more personal and convenient shopping experience for race fans. We believe this improved trackside merchandise model, combined with an upgraded online and mobile experience, will better position ISC and the industry to maximize merchandise sales while delivering top quality experience to our fans. Consequently, ISC's wholly owned subsidiaries, Americrown and MA, will no longer provide at track merchandise to fans at motorsports events and therefore will no longer recognize related revenues. Instead, the Company will receive a percentage of sales from Fanatics, recorded as part of Food, Beverage and Merchandise Revenue. For fiscal 2015, we are projecting a reduction in operating income of approximately $4.0 million to $5.0 million related to this new merchandise business model. Contributing significantly to this reduction are one-time, non-recurring operating expenses totaling $3.5 million to $4.5 million related to partial year operations, for which there is no associated revenue, and restructuring costs to effectively transition merchandise operations. Estimates - Revenue Recognition”). These annually negotiated contractual amounts paid to NASCAR contribute to the support Capital Improvements Enhancing the live event experience for our guests is a critical strategy for our future growth. We compete for the consumers' discretionary dollar with other entertainment options such as concerts and other major sporting events not just motorsports events. In addition, fans continue to demonstrate willingness to pay for more unique, inversive, and segmented experiences that cannot be duplicated at-home. Today's consumer wants improved traffic flow, comfortable and wider seating, clean and available facilities, more points of sale, enhanced audio and visual engagement, social zones and greater connectivity. Providing these enhancements often requires capital spending. We remain confident that our focus on driving incremental earnings by improving the fan experience will, in time, lead to increased ticket sales with better pricing power, growth in sponsorship and hospitality sales, better prospects for continued growth in broadcast media rights fees agreements, and greater potential to capture market share. As such, ISC's Board of Directors endorsed a capital allocation plan for fiscal 2013 through fiscal 2017 to not exceed $600.0 million. The five-year capital expenditure plan encompasses capital expenditures for ISC's 13 major sports facilities, including DAYTONA Rising (see "DAYTONA Rising: Reimagining an American Icon"), as well as any commitments to undertake ONE DAYTONA (see "ONE DAYTONA"). It is vital that we continue to elevate our Daytona brand to ensure that it remains the pinnacle of motorsports facilities, which will generate further profitability and cash flow to the Company. We also anticipate modest capital spending on other projects for maintenance, safety and regulatory requirements. We are confident that by delivering 27 28 ISC // 2014 ANNUAL REPORT // FORM 10-K // 29 memorable guest experiences, along with attractive pricing and fantastic racing, we will generate increased revenues as well as bottom-line results. Comparison of Fiscal 2014 to Fiscal 2013 The comparison of fiscal 2014 to fiscal 2013 is impacted by the following factors: While we focus on allocating our capital to generate returns in excess of our cost of capital, certain of our capital improvement investments may not provide immediate, directly traceable near term positive returns on invested capital but over the longer term will better enable us to effectively compete with other entertainment venues for consumer and corporate spending. (cid:127) Drag racing events were held at Auto Club Speedway in fiscal 2014 that were not held in fiscal 2013; (cid:127) The second annual Faster Horses music festival held during the third quarter of fiscal 2014 includes consolidation of concessions revenue and expense as compared to similar services provided by a third party for this event held the same Growth Strategies Our growth strategies also include exploring ways to grow our businesses through acquisitions and external developments that offer attractive financial returns. This has been demonstrated through our joint venture to develop and operate a Hollywood- themed and branded entertainment destination facility overlooking turn two of Kansas Speedway (see “Hollywood Casino at Kansas Speedway”). The Hollywood Casino at Kansas Speedway provided positive cash flow to us and included positive equity income in our consolidated statement of operations for fiscal 2012, 2013 and 2014. We expect for our 2015 fiscal year that our share of the cash flow from the casino's operations will be approximately $20.0 million to $22.0 million dollars. Also, we entered into a 50/50 joint venture with Atlanta-based Jacoby Development, Inc. to develop a mixed-use entertainment destination, named ONE DAYTONA, located on 189 acres we own located directly across from our Daytona motorsports entertainment facility (see “Liquidity and Capital Resources - ONE DAYTONA”). We remain interested in pursuing further ancillary developments at certain of our other motorsports facilities which enhance our core business, are market-driven, and provide a prudent return on investment. Current Operations Comparison The following table sets forth, for each of the indicated periods, certain selected statement of operations data as a percentage of total revenues: Revenues: Admissions, net Motorsports related Food, beverage and merchandise Other Total revenues Expenses: Direct: Prize and point fund monies and NASCAR sanction fees Motorsports related Food, beverage and merchandise General and administrative Depreciation and amortization Losses on retirements of long-lived assets Total expenses Operating income Interest expense, net Loss on early redemption of debt Other Equity in net income from equity investments Income before income taxes Income taxes Net income For the Year Ended 2012 2013 2014 22.2 % 68.1 7.5 2.2 100.0 25.3 20.5 5.8 16.8 12.7 1.8 82.9 17.1 (2.2 ) (1.5 ) 0.2 0.5 14.1 5.2 8.9 % 21.2 % 69.5 7.2 2.1 100.0 26.0 20.6 5.4 17.1 15.3 2.7 87.1 12.9 (2.5 ) — — 1.5 11.9 4.5 7.4 % 19.9 % 66.5 11.2 2.4 100.0 25.0 19.7 8.9 16.7 13.9 1.5 85.7 14.3 (1.1 ) — 0.8 1.4 15.4 5.1 10.3 % period in fiscal 2013; (cid:127) On January 31, 2014, SMI abandoned its interest and rights in MA, consequently bringing our ownership of MA to 100.0 percent. MA's operations are included in our consolidated operations subsequent to the date of SMI's abandonment. Prior to January 31, 2014, MA was accounted for as an equity investment in our financial statements. As a result of SMI's abandonment of their interest in MA, we recorded other income of approximately $5.4 million representing the fair value of MA, over the carrying value, as of January 31, 2014. In addition we recognized tax benefits relating to MA of approximately $4.0 million for fiscal 2014 (see “Equity and Other Investments” and “Income Taxes”). In addition, we recognized an impairment of a long-lived intangible asset, related to MA, of approximately $0.6 million, or $0.01 per diluted share. There was no comparable item in the same period of fiscal 2013; (cid:127) During fiscal 2013, we expensed approximately $2.8 million, or $0.04 per diluted share, of certain ongoing carrying costs related to our Staten Island property. There were no comparable costs in the same periods of fiscal 2014; (cid:127) During fiscal 2014, we received a favorable settlement relating to a legal judgment of litigation involving certain ancillary operations of approximately $0.6 million, or $0.01 per diluted share. During fiscal 2013, we recognized a charge relating to a settlement of a litigation involving certain ancillary facility operations of approximately $0.5 million; (cid:127) In fiscal 2014, we recognized approximately $1.1 million, or $0.02 per diluted share, in marketing and consulting costs that are included in general and administrative expense related to DAYTONA Rising. During fiscal 2013, we recognized approximately $1.5 million, or $0.02 per diluted share, of similar costs; (cid:127) During fiscal 2014, we recognized approximately $11.1 million, or $0.14 per diluted share, of accelerated depreciation that was recorded due to the shortening the service lives of certain assets associated with DAYTONA Rising. During fiscal 2013, we recognized approximately $15.4 million, or $0.20 per diluted share, of accelerated depreciation that was recorded due to the shortening the service lives of certain assets associated with DAYTONA Rising and capacity management initiatives; (cid:127) In fiscal 2014, we recognized approximately $10.1 million, or $0.12 per diluted share, of losses associated with asset retirements of losses primarily attributable to demolition and/or asset relocation costs in connection with DAYTONA Rising, capacity management initiatives and other capital improvements. Included in these losses were approximately $7.5 million of expenditures related to demolition and/or asset relocation costs, the remaining charges were non-cash, which included an impairment of a long-lived intangible asset related to MA, discussed above. During fiscal 2013, we recognized approximately $16.6 million, or $0.21 per diluted share, of similar charges, of which approximately $6.6 million of expenditures related to demolition and/or asset relocation costs, the remaining charges were non-cash; (cid:127) During fiscal 2014, we recognized approximately $7.2 million, or $0.09 per diluted share, in capitalized interest related to DAYTONA Rising. During fiscal 2013, we recognized approximately $0.8 million, or $0.01 per diluted share, of similar capitalized interest; and (cid:127) During fiscal 2014, we recognized approximately $8.9 million of income from equity investments associated with our Hollywood Casino at Kansas Speedway. During fiscal 2013, we recognized income of approximately $9.4 million from this equity investment, which included a $1.1 million credit for previously paid property taxes related to resolution of amounts under appeal. higher average ticket prices include: Fiscal 2014 admissions revenue of $129.7 million was comparable to fiscal 2013. Factors driving attendance increases and (cid:127) A schedule change for the Spring Cup event at Kansas featuring the first running of this event in the evening under the facility’s lights; (cid:127) IMSA and Sprint Cup events at Watkins Glen; ISC // 2014 ANNUAL REPORT // FORM 10-K // 30 29 30 bottom-line results. Growth Strategies Kansas Speedway”). investments may not provide immediate, directly traceable near term positive returns on invested capital but over the longer term will better enable us to effectively compete with other entertainment venues for consumer and corporate spending. Our growth strategies also include exploring ways to grow our businesses through acquisitions and external developments that offer attractive financial returns. This has been demonstrated through our joint venture to develop and operate a Hollywood- themed and branded entertainment destination facility overlooking turn two of Kansas Speedway (see “Hollywood Casino at The Hollywood Casino at Kansas Speedway provided positive cash flow to us and included positive equity income in our consolidated statement of operations for fiscal 2012, 2013 and 2014. We expect for our 2015 fiscal year that our share of the cash flow from the casino's operations will be approximately $20.0 million to $22.0 million dollars. Also, we entered into a 50/50 joint venture with Atlanta-based Jacoby Development, Inc. to develop a mixed-use entertainment destination, named ONE DAYTONA, located on 189 acres we own located directly across from our Daytona motorsports entertainment facility (see “Liquidity and Capital Resources - ONE DAYTONA”). We remain interested in pursuing further ancillary developments at certain of our other motorsports facilities which enhance our core business, are market-driven, and provide a prudent return on investment. Current Operations Comparison total revenues: The following table sets forth, for each of the indicated periods, certain selected statement of operations data as a percentage of Prize and point fund monies and NASCAR sanction fees Revenues: Admissions, net Motorsports related Food, beverage and merchandise Other Total revenues Expenses: Direct: Motorsports related Food, beverage and merchandise General and administrative Depreciation and amortization Losses on retirements of long-lived assets Total expenses Operating income Interest expense, net Loss on early redemption of debt Other Equity in net income from equity investments Income before income taxes Income taxes Net income For the Year Ended 2012 2013 2014 22.2 % 21.2 % 19.9 % 68.1 7.5 2.2 100.0 25.3 20.5 5.8 16.8 12.7 1.8 82.9 17.1 0.2 0.5 14.1 5.2 (2.2 ) (1.5 ) 69.5 7.2 2.1 100.0 26.0 20.6 5.4 17.1 15.3 2.7 87.1 12.9 (2.5 ) — — 1.5 11.9 4.5 66.5 11.2 2.4 100.0 25.0 19.7 8.9 16.7 13.9 1.5 85.7 14.3 (1.1 ) — 0.8 1.4 15.4 5.1 memorable guest experiences, along with attractive pricing and fantastic racing, we will generate increased revenues as well as Comparison of Fiscal 2014 to Fiscal 2013 The comparison of fiscal 2014 to fiscal 2013 is impacted by the following factors: While we focus on allocating our capital to generate returns in excess of our cost of capital, certain of our capital improvement (cid:127) Drag racing events were held at Auto Club Speedway in fiscal 2014 that were not held in fiscal 2013; (cid:127) The second annual Faster Horses music festival held during the third quarter of fiscal 2014 includes consolidation of concessions revenue and expense as compared to similar services provided by a third party for this event held the same period in fiscal 2013; (cid:127) On January 31, 2014, SMI abandoned its interest and rights in MA, consequently bringing our ownership of MA to 100.0 percent. MA's operations are included in our consolidated operations subsequent to the date of SMI's abandonment. Prior to January 31, 2014, MA was accounted for as an equity investment in our financial statements. As a result of SMI's abandonment of their interest in MA, we recorded other income of approximately $5.4 million representing the fair value of MA, over the carrying value, as of January 31, 2014. In addition we recognized tax benefits relating to MA of approximately $4.0 million for fiscal 2014 (see “Equity and Other Investments” and “Income Taxes”). In addition, we recognized an impairment of a long-lived intangible asset, related to MA, of approximately $0.6 million, or $0.01 per diluted share. There was no comparable item in the same period of fiscal 2013; (cid:127) During fiscal 2013, we expensed approximately $2.8 million, or $0.04 per diluted share, of certain ongoing carrying costs related to our Staten Island property. There were no comparable costs in the same periods of fiscal 2014; (cid:127) During fiscal 2014, we received a favorable settlement relating to a legal judgment of litigation involving certain ancillary operations of approximately $0.6 million, or $0.01 per diluted share. During fiscal 2013, we recognized a charge relating to a settlement of a litigation involving certain ancillary facility operations of approximately $0.5 million; (cid:127) In fiscal 2014, we recognized approximately $1.1 million, or $0.02 per diluted share, in marketing and consulting costs that are included in general and administrative expense related to DAYTONA Rising. During fiscal 2013, we recognized approximately $1.5 million, or $0.02 per diluted share, of similar costs; (cid:127) During fiscal 2014, we recognized approximately $11.1 million, or $0.14 per diluted share, of accelerated depreciation that was recorded due to the shortening the service lives of certain assets associated with DAYTONA Rising. During fiscal 2013, we recognized approximately $15.4 million, or $0.20 per diluted share, of accelerated depreciation that was recorded due to the shortening the service lives of certain assets associated with DAYTONA Rising and capacity management initiatives; (cid:127) In fiscal 2014, we recognized approximately $10.1 million, or $0.12 per diluted share, of losses associated with asset retirements of losses primarily attributable to demolition and/or asset relocation costs in connection with DAYTONA Rising, capacity management initiatives and other capital improvements. Included in these losses were approximately $7.5 million of expenditures related to demolition and/or asset relocation costs, the remaining charges were non-cash, which included an impairment of a long-lived intangible asset related to MA, discussed above. During fiscal 2013, we recognized approximately $16.6 million, or $0.21 per diluted share, of similar charges, of which approximately $6.6 million of expenditures related to demolition and/or asset relocation costs, the remaining charges were non-cash; (cid:127) During fiscal 2014, we recognized approximately $7.2 million, or $0.09 per diluted share, in capitalized interest related to DAYTONA Rising. During fiscal 2013, we recognized approximately $0.8 million, or $0.01 per diluted share, of similar capitalized interest; and (cid:127) During fiscal 2014, we recognized approximately $8.9 million of income from equity investments associated with our Hollywood Casino at Kansas Speedway. During fiscal 2013, we recognized income of approximately $9.4 million from this equity investment, which included a $1.1 million credit for previously paid property taxes related to resolution of amounts under appeal. Fiscal 2014 admissions revenue of $129.7 million was comparable to fiscal 2013. Factors driving attendance increases and higher average ticket prices include: (cid:127) A schedule change for the Spring Cup event at Kansas featuring the first running of this event in the evening under the facility’s lights; 8.9 % 7.4 % 10.3 % (cid:127) IMSA and Sprint Cup events at Watkins Glen; 29 30 ISC // 2014 ANNUAL REPORT // FORM 10-K // 31 (cid:127) Increased attendance for Sprint Cup Chase for the Championship events at Martinsville and Talladega as well as sold out events for the Fall Phoenix and Homestead Sprint Cup races; and (cid:127) Certain non-NASCAR events new to the Company’s event schedule in 2014. Several factors contributed to attendance decreases which offset the noted increases, including: (cid:127) (cid:127) (cid:127) Inclement weather and the threat of inclement weather during Speedweeks, resulting in a six hour rain delay for the Daytona 500; Inclement weather resulting in postponement of the July Coke Zero 400 at Daytona to the following day; Inclement weather impacting major events at Richmond and Martinsville; (cid:127) Moving the Budweiser Duel during Speedweeks at Daytona from its historical Thursday afternoon schedule to an early evening time slot; and (cid:127) Other decreases in certain markets. Motorsports related revenue increased approximately $8.2 million, or 1.9 percent, in fiscal 2014 as compared to fiscal 2013. The increase is largely attributable to increases in television broadcast revenue of approximately $12.1 million. Also contributing to the increase were increased hospitality revenues of approximately $1.5 million, as well as the aforementioned drag race events held at Auto Club Speedway totaling approximately $1.0 million. Partially offsetting the increase was lower MRN advertising and Sprint Vision revenues of approximately $2.5 million, as well as decreased sponsorship revenues of approximately $2.2 million, and an adjustment in the 2013 first quarter to increase the ancillary rights fees attributable to fiscal 2012, of approximately $1.7 million, with no comparable adjustment in fiscal 2014. Food, beverage and merchandise revenue increased approximately $28.8 million, or 65.5 percent, in fiscal 2014 as compared to fiscal 2013. predominately due to the aforementioned consolidation of MA, of approximately $25.7 million. Also contributing to the increase were concession sales of approximately $1.1 million related to the aforementioned non-motorsports event held in the third quarter of fiscal 2014, for which there was no comparable event in fiscal 2013. Prize and point fund monies and NASCAR sanction fees increased by approximately $3.6 million, or 2.3 percent, in fiscal 2014 as compared to fiscal 2013. The increases are primarily due to increases in television broadcast rights fees for the NASCAR Sprint Cup, Xfinity and Camping World Truck series events held during the period as standard NASCAR sanctioning agreements require a specific percentage of television broadcast rights fees to be paid to competitors. Motorsports related expense increased by approximately $2.3 million, or 1.8 percent, in fiscal 2014 as compared to fiscal 2013. The increase is primarily due to personnel related expenses, incremental costs for certain events largely driven by inclement weather, and the aforementioned events held in fiscal 2014 for which there were no comparable events in fiscal 2013, as well as advertising costs. Partially offsetting the increase were decreases in net purchased services of approximately $0.1 million. Motorsports related expenses as a percentage of combined admissions and motorsports related revenue remained consistent at approximately 22.8 percent for fiscal 2014, as compared to 22.7 percent for the same period in the prior year. Food, beverage and merchandise expense increased approximately $25.1 million, or 75.8 percent, in fiscal 2014 as compared to fiscal 2013. The increase is predominately attributable to the aforementioned consolidation of MA which increased related expenses by approximately $21.4 million. Also contributing to the increase were increased catering and merchandise sales, as well as concession sales related to the aforementioned non-motorsports event held in the third quarter of fiscal 2014, for which there was no comparable event in fiscal 2013. Food, beverage and merchandise expense as a percentage of food, beverage and merchandise revenue increased to approximately 79.9 percent for fiscal 2014, as compared to 75.3 percent for the same period in the prior year. The decrease in margin is primarily a result of the aforementioned consolidation of MA and the aforementioned non-motorsports event. Excluding MA and the non-motorsports event, food, beverage and merchandise expense as a percentage of food, beverage and merchandise revenue is comparable to the same periods in 2013. General and administrative expense increased approximately $3.6 million, or 3.5 percent, in fiscal 2014 as compared to fiscal 2013. The increase is predominately due to certain administrative costs and ancillary facility operations, totaling approximately $7.9 million, of which approximately $2.5 million was related to MA. Partially offsetting the increase was certain ongoing carrying costs related to our Staten Island property, of approximately $2.8 million, that occurred in fiscal 2013, for which there were no comparable costs in the same period of fiscal 2014. Also contributing to offsetting the increase was a net decrease to our general liability reserve of approximately $1.5 million, due to certain claims not reaching their full exposure, as was estimated, prior to being resolved. General and administrative expenses as a percentage of total revenues decreased negligibly to approximately 16.7 percent for fiscal 2014, as compared to 17.1 percent for fiscal 2013. The margin improvement was predominately due to the aforementioned adjustments in our general liability insurance reserves in the 2014 period as well as carrying costs related to our Staten Island property. Depreciation and amortization expense decreased approximately $3.6 million, or 3.9 percent, in fiscal 2014 as compared to fiscal 2013. The decrease was primarily attributable to the service lives of certain assets associated with DAYTONA Rising and grandstand seating at Talladega and Richmond whose lives were reduced in the fiscal 2013 period and became fully depreciated in the same period of fiscal 2014. Partially offsetting the decrease are new assets going into service, predominately associated with DAYTONA Rising. Losses on retirements of long-lived assets of approximately $10.1 million during fiscal 2014 is primarily attributable to demolition costs in connection with DAYTONA Rising, capacity management initiatives and other capital improvements. The losses on retirements of long-lived assets of approximately $16.6 million in fiscal 2013 is primarily attributable to the removal of certain assets not fully depreciated in connection with DAYTONA Rising and grandstand seating at Talladega, as well as guest enhancements at our other facilities. Interest income during fiscal 2014 increased approximately $2.0 million as compared to fiscal 2013. The increase is predominately due to a settlement reached in fiscal 2014 related to prior years interest associated with a long-term receivable. Interest expense decreased approximately $6.0 million, or 39.7 percent, in fiscal 2014, as compared to fiscal 2013. The decrease was predominately due to higher capitalized interest associated with DAYTONA Rising. Equity in net income from equity investments in fiscal 2014 and 2013, respectively, represents our 50.0 percent equity investments in Hollywood Casino at Kansas Speedway (see “Equity and Other Investments”). We did not recognize any net income or loss from our equity investment in MA in fiscal 2014 or in fiscal 2013 (see “Equity and Other Investments”). Our effective income tax rate decreased from approximately 38.0 percent to approximately 33.0 percent during fiscal 2014 compared to fiscal 2013 (see “Income Taxes”). As a result of the foregoing, net income increased approximately $22.1 million, or $0.48 per diluted share, for fiscal 2014 as compared to fiscal 2013. Comparison of Fiscal 2013 to Fiscal 2012 The comparison of fiscal 2013 to fiscal 2012 is impacted by the following factors: (cid:127) Economic conditions, including those affecting disposable consumer income and corporate budgets such as employment, business conditions, interest rates and taxation rates, continued to impact our ability to sell tickets to our events and to secure revenues from corporate marketing partnerships. We believe that unprecedented adverse economic trends, particularly the decline in consumer confidence and the level of unemployment, contributed to the decrease in attendance related as well as corporate partner revenues for certain of our motorsports entertainment events beginning in mid-2008; (cid:127) In fiscal 2013, we expensed approximately $2.8 million, or $0.04 per diluted share, of certain ongoing carrying costs related to our Staten Island property. During fiscal 2012, we expensed approximately $4.6 million of similar costs; (cid:127) During fiscal 2013, we recognized a charge relating to a legal judgment of litigation involving certain ancillary facility operations of approximately $0.5 million, or $0.01 per diluted share. During fiscal 2012, we recognized a charge relating to a settlement of a litigation involving certain ancillary facility operations of approximately $1.2 million; (cid:127) In fiscal 2013, we recognized approximately $1.5 million, or $0.02 per diluted share, in marketing and consulting costs that are included in general and administrative expense related to DAYTONA Rising. During fiscal 2012, we recognized approximately $0.4 million of similar costs; ISC // 2014 ANNUAL REPORT // FORM 10-K // 32 31 32 (cid:127) Increased attendance for Sprint Cup Chase for the Championship events at Martinsville and Talladega as well as sold out events for the Fall Phoenix and Homestead Sprint Cup races; and (cid:127) Certain non-NASCAR events new to the Company’s event schedule in 2014. Several factors contributed to attendance decreases which offset the noted increases, including: (cid:127) Inclement weather and the threat of inclement weather during Speedweeks, resulting in a six hour rain delay for the Daytona 500; (cid:127) (cid:127) Inclement weather resulting in postponement of the July Coke Zero 400 at Daytona to the following day; Inclement weather impacting major events at Richmond and Martinsville; (cid:127) Moving the Budweiser Duel during Speedweeks at Daytona from its historical Thursday afternoon schedule to an early evening time slot; and (cid:127) Other decreases in certain markets. Motorsports related revenue increased approximately $8.2 million, or 1.9 percent, in fiscal 2014 as compared to fiscal 2013. The increase is largely attributable to increases in television broadcast revenue of approximately $12.1 million. Also contributing to the increase were increased hospitality revenues of approximately $1.5 million, as well as the aforementioned drag race events held at Auto Club Speedway totaling approximately $1.0 million. Partially offsetting the increase was lower MRN advertising and Sprint Vision revenues of approximately $2.5 million, as well as decreased sponsorship revenues of approximately $2.2 million, and an adjustment in the 2013 first quarter to increase the ancillary rights fees attributable to fiscal 2012, of approximately $1.7 million, with no comparable adjustment in fiscal 2014. Food, beverage and merchandise revenue increased approximately $28.8 million, or 65.5 percent, in fiscal 2014 as compared to fiscal 2013. predominately due to the aforementioned consolidation of MA, of approximately $25.7 million. Also contributing to the increase were concession sales of approximately $1.1 million related to the aforementioned non-motorsports event held in the third quarter of fiscal 2014, for which there was no comparable event in fiscal 2013. Prize and point fund monies and NASCAR sanction fees increased by approximately $3.6 million, or 2.3 percent, in fiscal 2014 as compared to fiscal 2013. The increases are primarily due to increases in television broadcast rights fees for the NASCAR Sprint Cup, Xfinity and Camping World Truck series events held during the period as standard NASCAR sanctioning agreements require a specific percentage of television broadcast rights fees to be paid to competitors. Motorsports related expense increased by approximately $2.3 million, or 1.8 percent, in fiscal 2014 as compared to fiscal 2013. The increase is primarily due to personnel related expenses, incremental costs for certain events largely driven by inclement weather, and the aforementioned events held in fiscal 2014 for which there were no comparable events in fiscal 2013, as well as advertising costs. Partially offsetting the increase were decreases in net purchased services of approximately $0.1 million. approximately 22.8 percent for fiscal 2014, as compared to 22.7 percent for the same period in the prior year. Food, beverage and merchandise expense increased approximately $25.1 million, or 75.8 percent, in fiscal 2014 as compared to fiscal 2013. The increase is predominately attributable to the aforementioned consolidation of MA which increased related expenses by approximately $21.4 million. Also contributing to the increase were increased catering and merchandise sales, as well as concession sales related to the aforementioned non-motorsports event held in the third quarter of fiscal 2014, for which there was no comparable event in fiscal 2013. Food, beverage and merchandise expense as a percentage of food, beverage and merchandise revenue increased to approximately 79.9 percent for fiscal 2014, as compared to 75.3 percent for the same period in the prior year. The decrease in margin is primarily a result of the aforementioned consolidation of MA and the aforementioned non-motorsports event. Excluding MA and the non-motorsports event, food, beverage and merchandise expense as a percentage of food, beverage and merchandise revenue is comparable to the same periods in 2013. General and administrative expense increased approximately $3.6 million, or 3.5 percent, in fiscal 2014 as compared to fiscal 2013. The increase is predominately due to certain administrative costs and ancillary facility operations, totaling approximately $7.9 million, of which approximately $2.5 million was related to MA. Partially offsetting the increase was certain ongoing carrying costs related to our Staten Island property, of approximately $2.8 million, that occurred in fiscal 2013, for which there were no comparable costs in the same period of fiscal 2014. Also contributing to offsetting the increase was a net decrease to our general liability reserve of approximately $1.5 million, due to certain claims not reaching their full exposure, as was estimated, prior to being resolved. General and administrative expenses as a percentage of total revenues decreased negligibly to approximately 16.7 percent for fiscal 2014, as compared to 17.1 percent for fiscal 2013. The margin improvement was predominately due to the aforementioned adjustments in our general liability insurance reserves in the 2014 period as well as carrying costs related to our Staten Island property. Depreciation and amortization expense decreased approximately $3.6 million, or 3.9 percent, in fiscal 2014 as compared to fiscal 2013. The decrease was primarily attributable to the service lives of certain assets associated with DAYTONA Rising and grandstand seating at Talladega and Richmond whose lives were reduced in the fiscal 2013 period and became fully depreciated in the same period of fiscal 2014. Partially offsetting the decrease are new assets going into service, predominately associated with DAYTONA Rising. Losses on retirements of long-lived assets of approximately $10.1 million during fiscal 2014 is primarily attributable to demolition costs in connection with DAYTONA Rising, capacity management initiatives and other capital improvements. The losses on retirements of long-lived assets of approximately $16.6 million in fiscal 2013 is primarily attributable to the removal of certain assets not fully depreciated in connection with DAYTONA Rising and grandstand seating at Talladega, as well as guest enhancements at our other facilities. Interest income during fiscal 2014 increased approximately $2.0 million as compared to fiscal 2013. The increase is predominately due to a settlement reached in fiscal 2014 related to prior years interest associated with a long-term receivable. Interest expense decreased approximately $6.0 million, or 39.7 percent, in fiscal 2014, as compared to fiscal 2013. The decrease was predominately due to higher capitalized interest associated with DAYTONA Rising. Equity in net income from equity investments in fiscal 2014 and 2013, respectively, represents our 50.0 percent equity investments in Hollywood Casino at Kansas Speedway (see “Equity and Other Investments”). We did not recognize any net income or loss from our equity investment in MA in fiscal 2014 or in fiscal 2013 (see “Equity and Other Investments”). Our effective income tax rate decreased from approximately 38.0 percent to approximately 33.0 percent during fiscal 2014 compared to fiscal 2013 (see “Income Taxes”). As a result of the foregoing, net income increased approximately $22.1 million, or $0.48 per diluted share, for fiscal 2014 as compared to fiscal 2013. Comparison of Fiscal 2013 to Fiscal 2012 The comparison of fiscal 2013 to fiscal 2012 is impacted by the following factors: Motorsports related expenses as a percentage of combined admissions and motorsports related revenue remained consistent at (cid:127) Economic conditions, including those affecting disposable consumer income and corporate budgets such as employment, business conditions, interest rates and taxation rates, continued to impact our ability to sell tickets to our events and to secure revenues from corporate marketing partnerships. We believe that unprecedented adverse economic trends, particularly the decline in consumer confidence and the level of unemployment, contributed to the decrease in attendance related as well as corporate partner revenues for certain of our motorsports entertainment events beginning in mid-2008; (cid:127) In fiscal 2013, we expensed approximately $2.8 million, or $0.04 per diluted share, of certain ongoing carrying costs related to our Staten Island property. During fiscal 2012, we expensed approximately $4.6 million of similar costs; (cid:127) During fiscal 2013, we recognized a charge relating to a legal judgment of litigation involving certain ancillary facility operations of approximately $0.5 million, or $0.01 per diluted share. During fiscal 2012, we recognized a charge relating to a settlement of a litigation involving certain ancillary facility operations of approximately $1.2 million; (cid:127) In fiscal 2013, we recognized approximately $1.5 million, or $0.02 per diluted share, in marketing and consulting costs that are included in general and administrative expense related to DAYTONA Rising. During fiscal 2012, we recognized approximately $0.4 million of similar costs; 31 32 ISC // 2014 ANNUAL REPORT // FORM 10-K // 33 (cid:127) During fiscal 2013, we recognized approximately $15.4 million, or $0.20 per diluted share, of accelerated depreciation that was recorded due to the shortening the service lives of certain assets associated with DAYTONA Rising and capacity management initiatives. There were no comparable amounts in fiscal 2012; (cid:127) In fiscal 2013, we recognized approximately $16.6 million, or $0.21 per diluted share, of losses associated with asset retirements primarily attributable to the removal of assets not fully depreciated in connection with DAYTONA Rising, capacity management initiatives and other capital improvements. Included in these losses were approximately $6.6 million of expenditures related to demolition and/or asset relocation costs, the remaining charges were non-cash. During fiscal 2012, we recognized approximately $11.1 million of similar charges; (cid:127) In fiscal 2013, we recognized approximately $0.8 million, or $0.01 per diluted share, in capitalized interest related to DAYTONA Rising. There was no comparable amounts related to DAYTONA Rising in fiscal 2012; (cid:127) During fiscal 2012, we recognized approximately $9.1 million in expenses, or $0.12 per diluted share, related to the redemption of the remaining $87.0 million principal 5.40 percent Senior Notes maturing in 2014; (cid:127) In fiscal 2013, we recorded approximately $0.1 million, or less than $0.01 per diluted share, net gain on the sale of certain assets. In fiscal 2012, we recognized approximately $0.9 million of similar net gains; and (cid:127) During fiscal 2013, we recognized approximately $9.4 million of income from equity investments associated with our facilities. Hollywood Casino at Kansas Speedway, which included a $1.1 million credit for previously paid property taxes related to resolution of amounts under appeal. During fiscal 2012, we recognized income of approximately $2.8 million from this equity investment, which included results of operations beginning in February 2012, net of charges related to certain startup costs through the opening. Admissions revenue decreased approximately $6.3 million, or 4.6 percent, in fiscal 2013 as compared to fiscal 2012. The decrease is largely attributable to decreased attendance for certain events held during fiscal 2013, including certain events held during Speedweeks at Daytona and the impact of inclement weather at Talladega and Chicagoland. To a lesser extent, a lower weighted average ticket price for certain of the events contributed to the decline. The 2012 Daytona 500 was postponed for a day due to inclement weather. Historically, rain delayed or postponed events due to inclement weather have a negative impact on the following year's ticket renewals for those events. As a result of the postponement in 2012, we believe the 2013 Daytona 500 renewals were negatively impacted, which contributed to a significant portion of the fiscal 2013 decline. Motorsports related revenue increased approximately $8.8 million, or 2.1 percent, in fiscal 2013 as compared to fiscal 2012. The increase is largely attributable to increases in television broadcast revenue. Also contributing to the increase was an incremental payout of fiscal 2012 ancillary rights fees during fiscal 2013. Partially offsetting the increases were lower MRN advertising and Sprint Vision revenues. Food, beverage and merchandise revenue decreased approximately $1.9 million, or 4.2 percent, in fiscal 2013 as compared to fiscal 2012. The decrease is largely due to attendance decreases and lower catering revenues for certain events. To a lesser extent, higher sales in fiscal 2012 driven by an extra day of selling opportunity as a result of the aforementioned rain delayed and rescheduled Daytona 500 contributed to the decrease in the current year. Prize and point fund monies and NASCAR sanction fees increased by approximately $4.7 million, or 3.0 percent, in fiscal 2013 as compared to fiscal 2012. The increase is due to higher television broadcast rights fees for the NASCAR Sprint Cup, Xfinity and Camping World Truck series events held during the periods as standard NASCAR sanctioning agreements require a specific percentage of television broadcast rights fees to be paid to competitors. Higher sanction fees paid to NASCAR also contributed to the increases. Motorsports related expense increased slightly by approximately $0.9 million, or 0.7 percent, in fiscal 2013 as compared to fiscal 2012. The slight increase is related to aforementioned merit pay increases, advertising costs, maintenance costs and other purchased services as well as a net increase in costs for certain non-comparable events year over year. Motorsports related expenses as a percentage of combined admissions and motorsports related revenue remained consistent at approximately 22.7 percent for fiscal 2013, as compared to 22.6 percent for the same period in the prior year. Food, beverage and merchandise expense decreased approximately $2.5 million, or 7.0 percent, in fiscal 2013 as compared to fiscal 2012. The decrease is substantially attributable to lower catering and merchandise sales as well as improved margin on catering and concession sales for events held during the periods. Food, beverage and merchandise expense as a percentage of food, beverage and merchandise revenue decreased to approximately 75.3 percent for fiscal 2013, as compared to 77.5 percent for the same period in the prior year. The increase in margin is a result of streamlined menus throughout our facilities aimed at reducing overall food costs by leveraging purchasing power while elevating quality and delivery. General and administrative expense increased approximately $2.0 million, or 1.9 percent, in fiscal 2013 as compared to fiscal 2012. The increase is primarily attributable to certain costs related to DAYTONA Rising, the loss accrual associated with the incident at Daytona, a judgment in litigation involving certain ancillary facility operations, and certain administrative costs including the aforementioned merit pay increases. Slightly offsetting the increases were reductions in property taxes at certain facilities and the settlement of litigation involving certain ancillary facility operations in fiscal 2012. General and administrative expenses as a percentage of total revenues increased negligibly to approximately 17.1 percent for fiscal 2013, as compared to 16.8 percent for fiscal 2012. Depreciation and amortization expense increased approximately $16.1 million, or 20.7 percent, in fiscal 2013 as compared to fiscal 2012. The increase was primarily attributable accelerated depreciation resulting from shortening the service lives of certain assets associated with DAYTONA Rising and the aforementioned capacity management initiatives at certain of our Losses on retirements of long-lived assets of approximately $16.6 million during fiscal 2013 is primarily attributable to the aforementioned capacity management initiatives at certain of our facilities, removal of certain assets related to DAYTONA Rising, as well as guest enhancements at our other facilities. The losses on retirements of long-lived assets of approximately $11.1 million in fiscal 2012 is primarily attributable to the removal of certain assets not fully depreciated in connection with the repaving of the track at Kansas, as well as guest enhancements at our other facilities. Interest income during fiscal 2013 was comparable to fiscal 2012. Interest expense increased approximately $1.7 million, or 12.7 percent, in fiscal 2013, as compared to fiscal 2012. The increase is due to lower capitalized interest, as well as interest on the $100.0 million principal 3.95 percent Senior Notes, issued in September 2012. Significantly offsetting the increase was the redemption of the remaining $87.0 million principal 5.40 percent Senior Notes in March 2012 as well as there being no borrowings outstanding on our $300.0 million revolving credit facility during fiscal 2013. Equity in net income from equity investments in fiscal 2013 and 2012, respectively, represents our 50.0 percent equity investments in Hollywood Casino at Kansas Speedway (see “Equity and Other Investments”). We did not recognize any net income or loss from our equity investment in MA in fiscal 2013 or in fiscal 2012. Our effective income tax rate increased from approximately 36.7 percent to approximately 38.0 percent during fiscal 2013 compared to fiscal 2012 (see “Income Taxes”). As a result of the foregoing, net income decreased approximately $9.3 million, or $0.21 per diluted share, for fiscal 2013 as compared to fiscal 2012. Liquidity and Capital Resources General We have historically generated sufficient cash flow from operations to fund our working capital needs, capital expenditures at existing facilities, and return of capital through payments of an annual cash dividend and repurchase of our shares under our Stock Purchase Plan. In addition, we have used the proceeds from offerings of our Class A Common Stock, the net proceeds from the issuance of long-term debt, borrowings under our credit facilities and state and local mechanisms to fund acquisitions and development projects. The following table sets forth certain selected financial information as of November 30, (in thousands): ISC // 2014 ANNUAL REPORT // FORM 10-K // 34 33 34 (cid:127) During fiscal 2013, we recognized approximately $15.4 million, or $0.20 per diluted share, of accelerated depreciation that was recorded due to the shortening the service lives of certain assets associated with DAYTONA Rising and capacity management initiatives. There were no comparable amounts in fiscal 2012; (cid:127) In fiscal 2013, we recognized approximately $16.6 million, or $0.21 per diluted share, of losses associated with asset retirements primarily attributable to the removal of assets not fully depreciated in connection with DAYTONA Rising, capacity management initiatives and other capital improvements. Included in these losses were approximately $6.6 million of expenditures related to demolition and/or asset relocation costs, the remaining charges were non-cash. During fiscal 2012, we recognized approximately $11.1 million of similar charges; (cid:127) In fiscal 2013, we recognized approximately $0.8 million, or $0.01 per diluted share, in capitalized interest related to DAYTONA Rising. There was no comparable amounts related to DAYTONA Rising in fiscal 2012; (cid:127) During fiscal 2012, we recognized approximately $9.1 million in expenses, or $0.12 per diluted share, related to the redemption of the remaining $87.0 million principal 5.40 percent Senior Notes maturing in 2014; (cid:127) In fiscal 2013, we recorded approximately $0.1 million, or less than $0.01 per diluted share, net gain on the sale of certain assets. In fiscal 2012, we recognized approximately $0.9 million of similar net gains; and (cid:127) During fiscal 2013, we recognized approximately $9.4 million of income from equity investments associated with our Hollywood Casino at Kansas Speedway, which included a $1.1 million credit for previously paid property taxes related to resolution of amounts under appeal. During fiscal 2012, we recognized income of approximately $2.8 million from this equity investment, which included results of operations beginning in February 2012, net of charges related to certain startup costs through the opening. Admissions revenue decreased approximately $6.3 million, or 4.6 percent, in fiscal 2013 as compared to fiscal 2012. The decrease is largely attributable to decreased attendance for certain events held during fiscal 2013, including certain events held during Speedweeks at Daytona and the impact of inclement weather at Talladega and Chicagoland. To a lesser extent, a lower weighted average ticket price for certain of the events contributed to the decline. The 2012 Daytona 500 was postponed for a day due to inclement weather. Historically, rain delayed or postponed events due to inclement weather have a negative impact on the following year's ticket renewals for those events. As a result of the postponement in 2012, we believe the 2013 Daytona 500 renewals were negatively impacted, which contributed to a significant portion of the fiscal 2013 decline. Motorsports related revenue increased approximately $8.8 million, or 2.1 percent, in fiscal 2013 as compared to fiscal 2012. The increase is largely attributable to increases in television broadcast revenue. Also contributing to the increase was an incremental payout of fiscal 2012 ancillary rights fees during fiscal 2013. Partially offsetting the increases were lower MRN advertising and Sprint Vision revenues. Food, beverage and merchandise revenue decreased approximately $1.9 million, or 4.2 percent, in fiscal 2013 as compared to fiscal 2012. The decrease is largely due to attendance decreases and lower catering revenues for certain events. To a lesser extent, higher sales in fiscal 2012 driven by an extra day of selling opportunity as a result of the aforementioned rain delayed and rescheduled Daytona 500 contributed to the decrease in the current year. Prize and point fund monies and NASCAR sanction fees increased by approximately $4.7 million, or 3.0 percent, in fiscal 2013 as compared to fiscal 2012. The increase is due to higher television broadcast rights fees for the NASCAR Sprint Cup, Xfinity and Camping World Truck series events held during the periods as standard NASCAR sanctioning agreements require a specific percentage of television broadcast rights fees to be paid to competitors. Higher sanction fees paid to NASCAR also contributed to the increases. Motorsports related expense increased slightly by approximately $0.9 million, or 0.7 percent, in fiscal 2013 as compared to fiscal 2012. The slight increase is related to aforementioned merit pay increases, advertising costs, maintenance costs and other purchased services as well as a net increase in costs for certain non-comparable events year over year. Motorsports related expenses as a percentage of combined admissions and motorsports related revenue remained consistent at approximately 22.7 percent for fiscal 2013, as compared to 22.6 percent for the same period in the prior year. Food, beverage and merchandise expense decreased approximately $2.5 million, or 7.0 percent, in fiscal 2013 as compared to fiscal 2012. The decrease is substantially attributable to lower catering and merchandise sales as well as improved margin on catering and concession sales for events held during the periods. Food, beverage and merchandise expense as a percentage of food, beverage and merchandise revenue decreased to approximately 75.3 percent for fiscal 2013, as compared to 77.5 percent for the same period in the prior year. The increase in margin is a result of streamlined menus throughout our facilities aimed at reducing overall food costs by leveraging purchasing power while elevating quality and delivery. General and administrative expense increased approximately $2.0 million, or 1.9 percent, in fiscal 2013 as compared to fiscal 2012. The increase is primarily attributable to certain costs related to DAYTONA Rising, the loss accrual associated with the incident at Daytona, a judgment in litigation involving certain ancillary facility operations, and certain administrative costs including the aforementioned merit pay increases. Slightly offsetting the increases were reductions in property taxes at certain facilities and the settlement of litigation involving certain ancillary facility operations in fiscal 2012. General and administrative expenses as a percentage of total revenues increased negligibly to approximately 17.1 percent for fiscal 2013, as compared to 16.8 percent for fiscal 2012. Depreciation and amortization expense increased approximately $16.1 million, or 20.7 percent, in fiscal 2013 as compared to fiscal 2012. The increase was primarily attributable accelerated depreciation resulting from shortening the service lives of certain assets associated with DAYTONA Rising and the aforementioned capacity management initiatives at certain of our facilities. Losses on retirements of long-lived assets of approximately $16.6 million during fiscal 2013 is primarily attributable to the aforementioned capacity management initiatives at certain of our facilities, removal of certain assets related to DAYTONA Rising, as well as guest enhancements at our other facilities. The losses on retirements of long-lived assets of approximately $11.1 million in fiscal 2012 is primarily attributable to the removal of certain assets not fully depreciated in connection with the repaving of the track at Kansas, as well as guest enhancements at our other facilities. Interest income during fiscal 2013 was comparable to fiscal 2012. Interest expense increased approximately $1.7 million, or 12.7 percent, in fiscal 2013, as compared to fiscal 2012. The increase is due to lower capitalized interest, as well as interest on the $100.0 million principal 3.95 percent Senior Notes, issued in September 2012. Significantly offsetting the increase was the redemption of the remaining $87.0 million principal 5.40 percent Senior Notes in March 2012 as well as there being no borrowings outstanding on our $300.0 million revolving credit facility during fiscal 2013. Equity in net income from equity investments in fiscal 2013 and 2012, respectively, represents our 50.0 percent equity investments in Hollywood Casino at Kansas Speedway (see “Equity and Other Investments”). We did not recognize any net income or loss from our equity investment in MA in fiscal 2013 or in fiscal 2012. Our effective income tax rate increased from approximately 36.7 percent to approximately 38.0 percent during fiscal 2013 compared to fiscal 2012 (see “Income Taxes”). As a result of the foregoing, net income decreased approximately $9.3 million, or $0.21 per diluted share, for fiscal 2013 as compared to fiscal 2012. Liquidity and Capital Resources General We have historically generated sufficient cash flow from operations to fund our working capital needs, capital expenditures at existing facilities, and return of capital through payments of an annual cash dividend and repurchase of our shares under our Stock Purchase Plan. In addition, we have used the proceeds from offerings of our Class A Common Stock, the net proceeds from the issuance of long-term debt, borrowings under our credit facilities and state and local mechanisms to fund acquisitions and development projects. The following table sets forth certain selected financial information as of November 30, (in thousands): 33 34 ISC // 2014 ANNUAL REPORT // FORM 10-K // 35 Cash and cash equivalents Working capital Total debt 2012 2013 2014 $ 78,379 $ 50,868 276,932 172,827 $ 153,780 274,487 158,847 110,783 271,746 approximately $183.9 million for our 2014 fiscal year. In addition, we incurred charges of approximately $10.1 million of losses on asset retirements, of which approximately $7.5 million of these charges were cash expenditures related to demolition and/or asset relocation costs. In comparison, we spent approximately $85.5 million for fiscal 2013, on capital expenditures for projects at our existing facilities. At November 30, 2014, our working capital was primarily supported by our cash and cash equivalents totaling approximately $158.8 million, a decrease of approximately $14.0 million from November 30, 2013. Significant cash flow items during fiscal the fiscal years ended November 30 are as follows (in thousands): Net cash provided by operating activities (1) Capital expenditures (2) Distribution from equity investee and affiliate (3) Proceeds from sale of Staten Island property Equity investments and advances to affiliate (4) Net payments related to our credit facility Net proceeds (payments) related to long-term debt Dividends paid and reacquisitions of previously issued common stock $ 2012 2013 2014 150,925 $ (82,872 ) 11,000 — (51,984 ) (50,000 ) 10,694 173,395 $ (85,539 ) 21,500 5,322 — — (2,513 ) 162,847 (183,936 ) 22,000 6,100 (1,322 ) — (2,807 ) Future Liquidity General (19,839 ) (10,488 ) (11,504 ) are not limited to, general economic conditions, employment levels, business conditions, interest and taxation rates, relative (1) Variances in net cash provided by operating activities were predominately due to the amount and timing of cash payments for income taxes (see "Income Taxes") (2) Increase in capital expenditures is predominately due to DAYTONA Rising (see "Capital Expenditures") (3) Distributions from equity investee and affiliates, consists of amounts received as distribution from their profits and returns of capital as detailed in our statement of cash flows (4) Amounts relate to Hollywood Casino at Kansas Speedway (see “Equity and Other Investments”) and ONE DAYTONA (see "ONE DAYTONA"), respectively fund: Our liquidity is primarily generated from our ongoing motorsports operations, and we expect our strong operating cash flow to continue in the future. In addition, as of November 30, 2014, we have approximately $296.0 million available to draw upon under our 2012 Credit Facility, if needed. See “Future Liquidity” for additional disclosures relating to our credit facility and certain risks that may affect our near term operating results and liquidity. Allocation of capital is driven by our long-term strategic planning and initiatives that encompass our mission, vision and values. Our primary uses of capital are to maintain modest debt levels that are consistent with our current investment grade debt rating from Standard and Poor’s. We will invest in our facilities to improve the guest experience and we will make investments in strategic projects that complement our core business and provide value for our shareholders, all of which is balanced with returning capital to our shareholders through share repurchases and dividends. Capital Expenditures As discussed in “Future Trends in Operating Results,” an important strategy for our future growth will come from investing in our major motorsports facilities to enhance the live event experience and better enable us to effectively compete with other entertainment venues for consumer and corporate spending. In June 2013, ISC's board of directors endorsed a capital allocation plan for fiscal 2013 through fiscal 2017 not to exceed $600.0 million in capital expenditures over that period. The five-year capital allocation plan encompasses all the capital expenditures for ISC's 13 major motorsports facilities, including DAYTONA Rising, as well as any equity commitments to undertake ONE DAYTONA. Of the endorsed five-year capital allocation plan, DAYTONA Rising will account for approximately $400.0 million of the $600.0 million. Capital expenditures for projects at existing facilities, including those related to DAYTONA Rising, grandstand seating enhancements at Talladega; concourse improvements at Richmond; and a variety of other improvements and renovations, was ISC // 2014 ANNUAL REPORT // FORM 10-K // 36 35 36 With the majority of the capital expenditures for DAYTONA Rising occurring in fiscal 2014 and 2015, we estimate capital expenditures, exclusive of capitalized interest, across all of ISC's existing facilities will be approximately $200.0 million for fiscal 2015, based on the timing of construction payments. With a target completion date for DAYTONA Rising in January 2016, capital expenditures will then decrease significantly with an expectation of capital expenditures for projects at all of ISC's existing facilities, exclusive of capitalized interest, to be between $60.0 to $70.0 million in fiscal 2016 and fiscal 2017. We review the capital expenditure program periodically and modify it as required to meet current business needs. As discussed in “Future Trends in Operating Results,” we compete for discretionary spending and leisure time with many other entertainment alternatives and are subject to factors that generally affect the recreation, leisure and sports industry, including general economic conditions. Our operations are also sensitive to factors that affect corporate budgets. Such factors include, but commodity prices, and changes in consumer tastes and spending habits. These factors may negatively impact year-over-year comparability for our revenue categories for the full year, with the exception of domestic broadcast media rights fees. While we are sustaining the significant cost reductions implemented subsequent to the unprecedented adverse economic conditions that began in 2008, we do not expect further significant cost reductions. Our cash flow from operations consists primarily of ticket, hospitality, merchandise, catering and concession sales and contracted revenues arising from television broadcast rights and marketing partnerships. We believe that cash flows from operations, along with existing cash, cash equivalents and available borrowings under our credit facility, will be sufficient to (cid:127) operations of our major motorsports facilities for the foreseeable future; (cid:127) the previously discussed five-year capital expenditures plan at our existing facilities, which includes DAYTONA Rising, any equity commitment to ONE DAYTONA, as well as any future fan and competitor safety, critical maintenance and regulatory compliance spending; (cid:127) payments required in connection with the funding of the Unified Government's debt service requirements related to the TIF bonds; (cid:127) payments related to our existing debt service commitments; (cid:127) contributions in connection with any future expansion of the Hollywood Casino at Kansas Speedway; and (cid:127) our annual dividend payment and share repurchases under our Stock Purchase Plan. We remain interested in pursuing acquisition and/or development opportunities that would increase shareholder value, of which the timing, size, success and associated potential capital commitments, are unknown at this time. Accordingly, a material acceleration of our growth strategy could require us to obtain additional capital through debt and/or equity financings. Although there can be no assurance, we believe that adequate debt and equity financing will be available on satisfactory terms. While we expect our strong operating cash flow to continue in the future, our financial results depend significantly on a number of factors. In addition to local, national, and global economic and financial market conditions, consumer and corporate spending could be adversely affected by security and other lifestyle conditions resulting in lower than expected future operating cash flows. General economic conditions were significantly and negatively impacted by the September 11, 2001 terrorist attacks and the wars in Iraq and Afghanistan and could be similarly affected by any future attacks or fear of such attacks, or by conditions resulting from other acts or prospects of war. Any future attacks or wars or related threats could also increase our expenses related to insurance, security or other related matters. Also, our financial results could be adversely impacted by a widespread outbreak of a severe epidemiological crisis. The items discussed above could have a singular or compounded material adverse effect on our financial success and future cash flow. Cash and cash equivalents Working capital Total debt 2012 2013 2014 $ 78,379 $ 50,868 276,932 172,827 $ 153,780 274,487 158,847 110,783 271,746 approximately $183.9 million for our 2014 fiscal year. In addition, we incurred charges of approximately $10.1 million of losses on asset retirements, of which approximately $7.5 million of these charges were cash expenditures related to demolition and/or asset relocation costs. In comparison, we spent approximately $85.5 million for fiscal 2013, on capital expenditures for projects at our existing facilities. At November 30, 2014, our working capital was primarily supported by our cash and cash equivalents totaling approximately $158.8 million, a decrease of approximately $14.0 million from November 30, 2013. Significant cash flow items during fiscal the fiscal years ended November 30 are as follows (in thousands): Net cash provided by operating activities (1) $ 150,925 $ 173,395 $ 2012 2013 2014 With the majority of the capital expenditures for DAYTONA Rising occurring in fiscal 2014 and 2015, we estimate capital expenditures, exclusive of capitalized interest, across all of ISC's existing facilities will be approximately $200.0 million for fiscal 2015, based on the timing of construction payments. With a target completion date for DAYTONA Rising in January 2016, capital expenditures will then decrease significantly with an expectation of capital expenditures for projects at all of ISC's existing facilities, exclusive of capitalized interest, to be between $60.0 to $70.0 million in fiscal 2016 and fiscal 2017. We review the capital expenditure program periodically and modify it as required to meet current business needs. Future Liquidity General As discussed in “Future Trends in Operating Results,” we compete for discretionary spending and leisure time with many other entertainment alternatives and are subject to factors that generally affect the recreation, leisure and sports industry, including general economic conditions. Our operations are also sensitive to factors that affect corporate budgets. Such factors include, but are not limited to, general economic conditions, employment levels, business conditions, interest and taxation rates, relative commodity prices, and changes in consumer tastes and spending habits. These factors may negatively impact year-over-year comparability for our revenue categories for the full year, with the exception of domestic broadcast media rights fees. While we are sustaining the significant cost reductions implemented subsequent to the unprecedented adverse economic conditions that began in 2008, we do not expect further significant cost reductions. Our cash flow from operations consists primarily of ticket, hospitality, merchandise, catering and concession sales and contracted revenues arising from television broadcast rights and marketing partnerships. We believe that cash flows from operations, along with existing cash, cash equivalents and available borrowings under our credit facility, will be sufficient to fund: (cid:127) operations of our major motorsports facilities for the foreseeable future; (cid:127) the previously discussed five-year capital expenditures plan at our existing facilities, which includes DAYTONA Rising, any equity commitment to ONE DAYTONA, as well as any future fan and competitor safety, critical maintenance and regulatory compliance spending; (cid:127) payments required in connection with the funding of the Unified Government's debt service requirements related to Allocation of capital is driven by our long-term strategic planning and initiatives that encompass our mission, vision and the TIF bonds; (cid:127) payments related to our existing debt service commitments; (cid:127) contributions in connection with any future expansion of the Hollywood Casino at Kansas Speedway; and (cid:127) our annual dividend payment and share repurchases under our Stock Purchase Plan. We remain interested in pursuing acquisition and/or development opportunities that would increase shareholder value, of which the timing, size, success and associated potential capital commitments, are unknown at this time. Accordingly, a material acceleration of our growth strategy could require us to obtain additional capital through debt and/or equity financings. Although there can be no assurance, we believe that adequate debt and equity financing will be available on satisfactory terms. While we expect our strong operating cash flow to continue in the future, our financial results depend significantly on a number of factors. In addition to local, national, and global economic and financial market conditions, consumer and corporate spending could be adversely affected by security and other lifestyle conditions resulting in lower than expected future operating cash flows. General economic conditions were significantly and negatively impacted by the September 11, 2001 terrorist attacks and the wars in Iraq and Afghanistan and could be similarly affected by any future attacks or fear of such attacks, or by conditions resulting from other acts or prospects of war. Any future attacks or wars or related threats could also increase our expenses related to insurance, security or other related matters. Also, our financial results could be adversely impacted by a widespread outbreak of a severe epidemiological crisis. The items discussed above could have a singular or compounded material adverse effect on our financial success and future cash flow. 35 36 ISC // 2014 ANNUAL REPORT // FORM 10-K // 37 Capital expenditures (2) Distribution from equity investee and affiliate (3) Proceeds from sale of Staten Island property Equity investments and advances to affiliate (4) Net payments related to our credit facility Net proceeds (payments) related to long-term debt (82,872 ) 11,000 — (51,984 ) (50,000 ) 10,694 (85,539 ) 21,500 5,322 — — (2,513 ) 162,847 (183,936 ) 22,000 6,100 (1,322 ) — (2,807 ) Dividends paid and reacquisitions of previously issued common stock (19,839 ) (10,488 ) (11,504 ) (1) Variances in net cash provided by operating activities were predominately due to the amount and timing of cash payments for income taxes (see "Income Taxes") (2) Increase in capital expenditures is predominately due to DAYTONA Rising (see "Capital Expenditures") (3) Distributions from equity investee and affiliates, consists of amounts received as distribution from their profits and returns of capital as detailed in our statement of cash flows (4) Amounts relate to Hollywood Casino at Kansas Speedway (see “Equity and Other Investments”) and ONE DAYTONA (see "ONE DAYTONA"), respectively Our liquidity is primarily generated from our ongoing motorsports operations, and we expect our strong operating cash flow to continue in the future. In addition, as of November 30, 2014, we have approximately $296.0 million available to draw upon under our 2012 Credit Facility, if needed. See “Future Liquidity” for additional disclosures relating to our credit facility and certain risks that may affect our near term operating results and liquidity. values. Our primary uses of capital are to maintain modest debt levels that are consistent with our current investment grade debt rating from Standard and Poor’s. We will invest in our facilities to improve the guest experience and we will make investments in strategic projects that complement our core business and provide value for our shareholders, all of which is balanced with returning capital to our shareholders through share repurchases and dividends. Capital Expenditures As discussed in “Future Trends in Operating Results,” an important strategy for our future growth will come from investing in our major motorsports facilities to enhance the live event experience and better enable us to effectively compete with other entertainment venues for consumer and corporate spending. In June 2013, ISC's board of directors endorsed a capital allocation plan for fiscal 2013 through fiscal 2017 not to exceed $600.0 million in capital expenditures over that period. The five-year capital allocation plan encompasses all the capital expenditures for ISC's 13 major motorsports facilities, including DAYTONA Rising, as well as any equity commitments to undertake ONE DAYTONA. Of the endorsed five-year capital allocation plan, DAYTONA Rising will account for approximately $400.0 million of the $600.0 million. Capital expenditures for projects at existing facilities, including those related to DAYTONA Rising, grandstand seating enhancements at Talladega; concourse improvements at Richmond; and a variety of other improvements and renovations, was Long-Term Obligations and Commitments Our $65.0 million principal amount of senior unsecured notes (“4.63 percent Senior Notes”) bear interest at 4.63 percent and are due January 2021, require semi-annual interest payments on January 18 and July 18 through their maturity. The 4.63 percent Senior Notes may be redeemed in whole or in part, at our option, at any time or from time to time at redemption prices as defined in the indenture. Certain of our wholly owned domestic subsidiaries are guarantors of the 4.63 percent Senior Notes. Certain restrictive covenants of the 4.63 percent Senior Notes require that the Company's ratio of its Consolidated Funded Indebtedness to its Consolidated EBITDA ("leverage ratio") does not exceed 3.50 to 1.0, and its Consolidated EBITDA to Consolidated Interest Expense ("interest coverage ratio") is not less than 2.0 to 1.0. In addition the Company may not permit the aggregate of certain Priority Debt to exceed 15.0 percent of its Consolidated Net Worth. The 4.63 percent Senior Notes contain various other affirmative and negative restrictive covenants including, among others, limitations on liens, sales of assets, mergers and consolidations and certain transactions with affiliates. As of November 30, 2014, the Company was in compliance with its various restrictive covenants. At November 30, 2014, outstanding principal on the 4.63 percent Senior Notes was approximately $65.0 million. Our $100.0 million principal amount of senior unsecured notes (“3.95 percent Senior Notes”) bear interest at 3.95 percent and are due September 2024. The 3.95 percent Senior Notes require semi-annual interest payments on March 13 and September 13 through their maturity. The 3.95 percent Senior Notes may be redeemed in whole or in part, at our option, at any time or from time to time at redemption prices as defined in the indenture. Certain of our wholly owned domestic subsidiaries are guarantors of the 3.95 percent Senior Notes. Certain restrictive covenants of the 3.95 percent Senior Notes require that the Company's leverage ratio does not exceed 3.50 to 1.0, and its interest coverage ratio is not less than 2.0 to 1.0. In addition the Company may not permit the aggregate of certain Priority Debt to exceed 15.0 percent of its Consolidated Net Worth. The 3.95 percent Senior Notes contain various other affirmative and negative restrictive covenants including, among others, limitations on liens, sales of assets, mergers and consolidations and certain transactions with affiliates. As of November 30, 2014, the Company was in compliance with its various restrictive covenants. At November 30, 2014, outstanding principal on the 3.95 percent Senior Notes was approximately $100.0 million. Our wholly owned subsidiary, Chicagoland Speedway, LLC, which owns and operates Chicagoland and Route 66, has debt outstanding in the form of revenue bonds payable (“4.82 percent Revenue Bonds”), consisting of economic development revenue bonds issued by the City of Joliet, Illinois to finance certain land improvements. The 4.82 percent Revenue Bonds have an interest rate of 4.82 percent and a monthly payment of approximately $29,000 principal and interest. At November 30, 2014, outstanding principal on the 4.82 percent Revenue Bonds was approximately $0.3 million. The term loan (“6.25 percent Term Loan”), related to our International Motorsports Center, has a 25 year term due October 2034, an interest rate of 6.25 percent, and a current monthly payment of approximately $292,000 principal and interest. At November 30, 2014, the outstanding principal on the 6.25 percent Term Loan was approximately $49.5 million. At November 30, 2014, outstanding TIF bonds totaled approximately $56.9 million, net of the unamortized discount, which is comprised of a $7.7 million principal amount, 6.15 percent term bond due December 1, 2017 and a $49.7 million principal amount, 6.75 percent term bond due December 1, 2027. The TIF bonds are repaid by the Unified Government with payments made in lieu of property taxes (“Funding Commitment”) by our wholly owned subsidiary, Kansas Speedway Corporation (“KSC”). Principal (mandatory redemption) payments per the Funding Commitment are payable by KSC on October 1 of each year. The semi-annual interest component of the Funding Commitment is payable on April 1 and October 1 of each year. KSC granted a mortgage and security interest in the Kansas project for its Funding Commitment obligation. In October 2002, the Unified Government issued subordinate sales tax special obligation revenue bonds (“2002 STAR Bonds”) totaling approximately $6.3 million to reimburse us for certain construction already completed on the second phase of the Kansas Speedway project and to fund certain additional construction. The 2002 STAR Bonds, which require annual debt service payments and are due December 1, 2022, will be retired with state and local taxes generated within the Kansas Speedway’s boundaries and are not our obligation. KSC has agreed to guarantee the payment of principal, any required premium and interest on the 2002 STAR Bonds. At November 30, 2014, the Unified Government had approximately $1.4 million in 2002 STAR Bonds outstanding. Under a keepwell agreement, we have agreed to provide financial assistance to KSC, if necessary, to support its guarantee of the 2002 STAR Bonds. The 2012 Credit Facility contains a feature that allows us to increase the credit facility from $300.0 million to a total of $500.0 million, subject to certain conditions, provides for separate sub-limits of $25.0 million for standby letters of credit and $10.0 million for swing line loans. The 2012 Credit Facility is scheduled to mature in November 2017. Interest accrues, at the Company's option, at either LIBOR plus 100.0 — 162.5 basis points or a base rate loan at the highest of i) Wells Fargo Bank's prime lending rate, ii) the Federal Funds rate, as in effect from time to time, plus 0.5 percent, and iii) one month LIBOR plus 1.0 percent. The 2012 Credit Facility also contains a commitment fee ranging from 0.125 percent to 0.225 percent of unused amounts available for borrowing. The interest rate margin on the LIBOR borrowings and commitment fee are variable depending on the better of the Company's debt rating as determined by specified rating agencies or its leverage ratio. Certain of the Company's wholly owned domestic subsidiaries are guarantors on the 2012 Credit Facility. The 2012 Credit Facility requires that the Company's leverage ratio does not exceed 3.50 to 1.0 (4.0 to 1.0 for the four quarters ending after any Permitted Acquisition), and its interest coverage ratio is not less than 2.5 to 1.0. The 2012 Credit Facility also contains various other affirmative and negative restrictive covenants including, among others, limitations on indebtedness, investments, sales of assets, certain transactions with affiliates, entering into certain restrictive agreements and making certain restricted payments as detailed in the agreement. As of November 30, 2014, the Company was in compliance with its various restrictive covenants. At November 30, 2014, the Company had no outstanding borrowings under the 2012 Credit Facility. At November 30, 2014 we had contractual cash obligations to repay debt and to make payments under operating agreements, leases and commercial commitments in the form of guarantees and unused lines of credit. Payments due under these long-term obligations are as follows as of November 30, 2014 (in thousands): Long-term debt Interest agreement Other operating leases Motorsports entertainment facility operating Obligations Due by Period Total 2-3 Years 4-5 Years Less Than One Year After 5 Years $ 272,263 $ 3,435 $ 7,146 $ 8,613 $ 253,069 129,690 13,870 27,124 26,175 62,521 20,340 43,783 2,220 4,033 2,207 5,373 2,110 3,586 13,803 30,791 Total Contractual Cash Obligations $ 466,076 $ 23,558 $ 41,850 $ 40,484 $ 360,184 Commercial commitment expirations are as follows as of November 30, 2014 (in thousands): Guarantees Unused credit facilities Commitment Expiration by Period Total Less Than One Year 2-3 Years 4-5 Years $ 1,410 $ 300,000 210 $ — 465 $ 300,000 After 5 Years 275 $ — 275 $ 460 — 460 Total Commercial Commitments $ 301,410 $ 210 $ 300,465 $ DAYTONA Rising: Reimagining an American Icon DAYTONA Rising is the redevelopment of the frontstretch at Daytona, ISC's 55-year-old flagship motorsports facility, to enhance the event experience for our fans, marketing partners, broadcasters and the motorsports industry. The vision for DAYTONA Rising places an emphasis on enhancing the complete fan experience, beginning with five expanded and redesigned fan entrances, or injectors. Each injector will lead directly to a series of escalators and elevators that will transport fans to any of three different concourse levels, each featuring spacious and strategically-placed social "neighborhoods" along the nearly mile-long frontstretch. As part of DAYTONA Rising, we entered into a Design-Build Agreement with Barton Malow Company (“Barton Malow”), which obligates us to pay Barton Malow approximately $316.0 million for the completion of the work described in the Design- Build Agreement. The amount is a stipulated sum to be paid for the work, which may not change unless we request a change in the scope of work. The Design-Build Agreement contains certain provisions and representations usual and customary for agreements of this type, including, among others, provisions regarding liquidated damages to be assessed for work that is not ISC // 2014 ANNUAL REPORT // FORM 10-K // 38 37 38 Long-Term Obligations and Commitments Our $65.0 million principal amount of senior unsecured notes (“4.63 percent Senior Notes”) bear interest at 4.63 percent and are due January 2021, require semi-annual interest payments on January 18 and July 18 through their maturity. The 4.63 percent Senior Notes may be redeemed in whole or in part, at our option, at any time or from time to time at redemption prices as defined in the indenture. Certain of our wholly owned domestic subsidiaries are guarantors of the 4.63 percent Senior Notes. Certain restrictive covenants of the 4.63 percent Senior Notes require that the Company's ratio of its Consolidated Funded Indebtedness to its Consolidated EBITDA ("leverage ratio") does not exceed 3.50 to 1.0, and its Consolidated EBITDA to Consolidated Interest Expense ("interest coverage ratio") is not less than 2.0 to 1.0. In addition the Company may not permit the aggregate of certain Priority Debt to exceed 15.0 percent of its Consolidated Net Worth. The 4.63 percent Senior Notes contain various other affirmative and negative restrictive covenants including, among others, limitations on liens, sales of assets, mergers and consolidations and certain transactions with affiliates. As of November 30, 2014, the Company was in compliance with its various restrictive covenants. At November 30, 2014, outstanding principal on the 4.63 percent Senior Notes was approximately $65.0 million. Our $100.0 million principal amount of senior unsecured notes (“3.95 percent Senior Notes”) bear interest at 3.95 percent and are due September 2024. The 3.95 percent Senior Notes require semi-annual interest payments on March 13 and September 13 through their maturity. The 3.95 percent Senior Notes may be redeemed in whole or in part, at our option, at any time or from time to time at redemption prices as defined in the indenture. Certain of our wholly owned domestic subsidiaries are guarantors of the 3.95 percent Senior Notes. Certain restrictive covenants of the 3.95 percent Senior Notes require that the Company's leverage ratio does not exceed 3.50 to 1.0, and its interest coverage ratio is not less than 2.0 to 1.0. In addition the Company may not permit the aggregate of certain Priority Debt to exceed 15.0 percent of its Consolidated Net Worth. The 3.95 percent Senior Notes contain various other affirmative and negative restrictive covenants including, among others, limitations on liens, sales of assets, mergers and consolidations and certain transactions with affiliates. As of November 30, 2014, the Company was in compliance with its various restrictive covenants. At November 30, 2014, outstanding principal on the 3.95 percent Senior Notes was approximately $100.0 million. Our wholly owned subsidiary, Chicagoland Speedway, LLC, which owns and operates Chicagoland and Route 66, has debt outstanding in the form of revenue bonds payable (“4.82 percent Revenue Bonds”), consisting of economic development revenue bonds issued by the City of Joliet, Illinois to finance certain land improvements. The 4.82 percent Revenue Bonds have an interest rate of 4.82 percent and a monthly payment of approximately $29,000 principal and interest. At November 30, 2014, outstanding principal on the 4.82 percent Revenue Bonds was approximately $0.3 million. The term loan (“6.25 percent Term Loan”), related to our International Motorsports Center, has a 25 year term due October 2034, an interest rate of 6.25 percent, and a current monthly payment of approximately $292,000 principal and interest. At November 30, 2014, the outstanding principal on the 6.25 percent Term Loan was approximately $49.5 million. At November 30, 2014, outstanding TIF bonds totaled approximately $56.9 million, net of the unamortized discount, which is comprised of a $7.7 million principal amount, 6.15 percent term bond due December 1, 2017 and a $49.7 million principal amount, 6.75 percent term bond due December 1, 2027. The TIF bonds are repaid by the Unified Government with payments made in lieu of property taxes (“Funding Commitment”) by our wholly owned subsidiary, Kansas Speedway Corporation (“KSC”). Principal (mandatory redemption) payments per the Funding Commitment are payable by KSC on October 1 of each year. The semi-annual interest component of the Funding Commitment is payable on April 1 and October 1 of each year. KSC granted a mortgage and security interest in the Kansas project for its Funding Commitment obligation. In October 2002, the Unified Government issued subordinate sales tax special obligation revenue bonds (“2002 STAR Bonds”) totaling approximately $6.3 million to reimburse us for certain construction already completed on the second phase of the Kansas Speedway project and to fund certain additional construction. The 2002 STAR Bonds, which require annual debt service payments and are due December 1, 2022, will be retired with state and local taxes generated within the Kansas Speedway’s boundaries and are not our obligation. KSC has agreed to guarantee the payment of principal, any required premium and interest on the 2002 STAR Bonds. At November 30, 2014, the Unified Government had approximately $1.4 million in 2002 STAR Bonds outstanding. Under a keepwell agreement, we have agreed to provide financial assistance to KSC, if necessary, to support its guarantee of the 2002 STAR Bonds. The 2012 Credit Facility contains a feature that allows us to increase the credit facility from $300.0 million to a total of $500.0 million, subject to certain conditions, provides for separate sub-limits of $25.0 million for standby letters of credit and $10.0 million for swing line loans. The 2012 Credit Facility is scheduled to mature in November 2017. Interest accrues, at the Company's option, at either LIBOR plus 100.0 — 162.5 basis points or a base rate loan at the highest of i) Wells Fargo Bank's prime lending rate, ii) the Federal Funds rate, as in effect from time to time, plus 0.5 percent, and iii) one month LIBOR plus 1.0 percent. The 2012 Credit Facility also contains a commitment fee ranging from 0.125 percent to 0.225 percent of unused amounts available for borrowing. The interest rate margin on the LIBOR borrowings and commitment fee are variable depending on the better of the Company's debt rating as determined by specified rating agencies or its leverage ratio. Certain of the Company's wholly owned domestic subsidiaries are guarantors on the 2012 Credit Facility. The 2012 Credit Facility requires that the Company's leverage ratio does not exceed 3.50 to 1.0 (4.0 to 1.0 for the four quarters ending after any Permitted Acquisition), and its interest coverage ratio is not less than 2.5 to 1.0. The 2012 Credit Facility also contains various other affirmative and negative restrictive covenants including, among others, limitations on indebtedness, investments, sales of assets, certain transactions with affiliates, entering into certain restrictive agreements and making certain restricted payments as detailed in the agreement. As of November 30, 2014, the Company was in compliance with its various restrictive covenants. At November 30, 2014, the Company had no outstanding borrowings under the 2012 Credit Facility. At November 30, 2014 we had contractual cash obligations to repay debt and to make payments under operating agreements, leases and commercial commitments in the form of guarantees and unused lines of credit. Payments due under these long-term obligations are as follows as of November 30, 2014 (in thousands): Long-term debt Interest Motorsports entertainment facility operating agreement Other operating leases Total Contractual Cash Obligations $ Obligations Due by Period $ Total 272,263 $ 129,690 Less Than One Year 2-3 Years 4-5 Years After 5 Years 3,435 $ 13,870 7,146 $ 27,124 8,613 $ 26,175 253,069 62,521 20,340 43,783 466,076 $ 2,220 4,033 23,558 $ 2,207 5,373 41,850 $ 2,110 3,586 40,484 $ 13,803 30,791 360,184 Commercial commitment expirations are as follows as of November 30, 2014 (in thousands): Guarantees Unused credit facilities Total Commercial Commitments Commitment Expiration by Period Total Less Than One Year 2-3 Years 4-5 Years After 5 Years $ $ 1,410 $ 300,000 301,410 $ 210 $ — 210 $ 465 $ 300,000 300,465 $ 275 $ — 275 $ 460 — 460 DAYTONA Rising: Reimagining an American Icon DAYTONA Rising is the redevelopment of the frontstretch at Daytona, ISC's 55-year-old flagship motorsports facility, to enhance the event experience for our fans, marketing partners, broadcasters and the motorsports industry. The vision for DAYTONA Rising places an emphasis on enhancing the complete fan experience, beginning with five expanded and redesigned fan entrances, or injectors. Each injector will lead directly to a series of escalators and elevators that will transport fans to any of three different concourse levels, each featuring spacious and strategically-placed social "neighborhoods" along the nearly mile-long frontstretch. As part of DAYTONA Rising, we entered into a Design-Build Agreement with Barton Malow Company (“Barton Malow”), which obligates us to pay Barton Malow approximately $316.0 million for the completion of the work described in the Design- Build Agreement. The amount is a stipulated sum to be paid for the work, which may not change unless we request a change in the scope of work. The Design-Build Agreement contains certain provisions and representations usual and customary for agreements of this type, including, among others, provisions regarding liquidated damages to be assessed for work that is not 37 38 ISC // 2014 ANNUAL REPORT // FORM 10-K // 39 completed according to the agreed upon schedule, provisions regarding payment schedules, and provisions regarding bonding and liability insurance policies applicable to the work. In addition, the Design-Build Agreement contains customary provisions regarding termination, review and inspection of the work, warranties and the use of subcontractors. forward looking amounts are management’s projections and we believe they are reasonable, our actual results may vary from these estimates due to unanticipated changes in projected attendance, lower than expected ticket prices, or lower than forecasted corporate sponsorships. We do not know whether these expectations will ultimately prove correct and actual A total of 11 neighborhoods, each measuring the size of a football field, will enable fans to meet and socialize during events without missing any on-track action, thanks to dozens of strategically-placed video screens in every neighborhood. The central neighborhood, dubbed the "World Center of Racing," features open sight-lines enabling fans to catch all the on-track action while celebrating the history of Daytona International Speedway and its many unforgettable moments throughout more than 50 years of racing. Every seat in Daytona's frontstretch will be replaced with wider, more comfortable seating that will provide pristine sight-lines. There will also be twice as many restrooms and three times as many concessions throughout the facility. For Budweiser Speedweeks 2015, fans can experience some of DAYTONA Rising’s new amenities including first-ever vertical transportation, approximately 40,000 new grandstand seats on the frontstretch near Turn 1, and new concessions and restrooms. In addition to improving the overall fan experience, the corporate entertainment platform at Daytona will be completely transformed. Corporate hospitality will be moved into permanent structures inside the new grandstand, providing premier facilities for corporate entertaining throughout our events. Over 60 new trackside corporate suites will provide our premium guests with breathtaking views and first-class amenities befitting the “World Center of Racing.” In February 2014, Daytona International Speedway announced Toyota as its first Founding Partner for DAYTONA Rising. Through this partnership, Toyota will sponsor Injector 4 and one of the neighborhoods, as well as receive 20,000 square feet of innovative fan engagement space that will enhance the overall guest experience, and nearly 50,000 square feet of interior and exterior branding space. The partnership runs through 2025. In November 2014, Florida Hospital was announced as the stadium’s second Founding Partner taking ownership of Injector 1. As with Toyota, the Florida Hospital brand will be represented on one of five fan injectors, including more than 20,000 square feet of engagement space. Within this injector, Florida Hospital will also have a presence in one of the “neighborhoods”. Beginning in January 2015, Florida Hospital will be the exclusive healthcare provider of Daytona, which includes providing medical equipment and personnel for all events, managing the care center operations and providing ambulances to handle emergency situations. In August 2014, Daytona announced that CommScope, Inc. ("CommScope"), a global leader in infrastructure solutions for communications networks, has become the first technology partner in the expanding DAYTONA Rising “We Built Daytona” marketing platform. CommScope will deploy a new communications infrastructure at Daytona providing the facility with the bandwidth and flexibility to offer services that will enhance a fan’s experience, as well as improve stadium operations. The “We Built Daytona” platform is designed to showcase partners involved in the construction of DAYTONA Rising through a marketing presence (once their role in the project begins). CommScope joins eight other companies including Kingspan, a market leader in sustainable building product technology; USG Corporation, a leading building products company; Sherwin- Williams, an industry leader in the development of technologically advanced paint and coatings; Big Ass Fans, a ceiling fan design and engineering company; P&S Paving, asphalt and paving company; Jones Signs, leading national sign company; Schneider Electric, global specialist in energy management; and ROSSETTI, an award-winning architectural design and planning firm that is leading the master planning of the DAYTONA Rising project. On October 15, 2014 Daytona hosted DAYTONA Rising’s topping out ceremony, commemorating a significant milestone - the midway mark of construction. Speedway officials, the France family and Barton Malow presided over the installation of the highest piece of steel on the project. We expect that by providing our fans with a better experience as well as an expansive platform for our marketing partners, including an elevated hospitality experience, DAYTONA Rising, upon completion in 2016, is expected to provide an immediate incremental lift in Daytona's revenues of approximately $20.0 million, and earnings before interest, taxes, depreciation and amortization ("EBITDA”) lift of approximately $15.0 million with a mid-single-digit growth rate. We also currently anticipate the project to be accretive to our net income per share within three years of completion. While these revenues and operating results may differ materially from these estimates. We currently anticipate DAYTONA Rising to cost approximately $400.0 million, excluding capitalized interest, which we expect to fund from cash on hand, cash from our operations, and we may use borrowings on our credit facility for a limited period of time. In June 2014, House Bill 7095 was signed in Florida creating the Florida Sports Development Program, establishing a process for distributing state tax revenue for the construction or improvement of professional sports facilities. The DAYTONA Rising project is among the eligible applicants to receive sales tax incentives based on the project’s capital investment and amount of sales tax generated by the facility. We filed our application and recently received approval from the state's Department of Economic Opportunity. The final approval must come from the Legislative Budget Committee, whose decision is anticipated later in the first quarter of fiscal 2015. The new bill could potentially provide additional capital for the project. Despite not anticipating the need for additional long-term debt to fund this project, accounting rules dictate that we capitalize a portion of the interest on existing outstanding debt during the construction period. We estimate that we will record approximately $11.0 million to $13.0 million of capitalized interest from fiscal 2013 through fiscal 2016, with roughly half of the capitalized interest recorded in fiscal 2014. Total spending incurred for DAYTONA Rising was approximately $119.3 million for fiscal 2014, and is approximately $170.5 million since the inception of the project. Based on our current expectations of DAYTONA Rising, we have identified existing assets that are expected to be impacted by the redevelopment and that those assets will require accelerated depreciation, certain removal costs and losses on asset retirements, totaling approximately $50.0 million over the approximate 26-month project time span. During fiscal 2014, we recognized accelerated depreciation, certain removal costs and losses on retirements of assets totaling approximately $15.8 million, with a total of approximately $28.0 million recognized since the inception of the project. In addition, our depreciation expense, related directly to DAYTONA Rising, will increase incrementally by approximately $12.0 million to $14.0 million in fiscal 2015, and an additional $9.0 million to $10.0 million in fiscal 2016, respectively. The incremental increase in depreciation expense for fiscal 2015 is based on the anticipation of opening approximately forty percent of the new stadium in time for Budweiser Speedweeks 2015. As a result, our total depreciation expense for fiscal 2015 is estimated to be between approximately $93.0 million and $97.0 million, and approximately $100.0 million to $105.0 million annually, in fiscal 2016, and then decreasing, due to lower capital spending, to approximately $85.0 million to $90.0 million beginning in fiscal 2019. ONE DAYTONA We entered into a 50/50 joint venture with Atlanta-based Jacoby Development, Inc. to develop a mixed-use entertainment destination, named ONE DAYTONA, located adjacent to our 188,000 square foot office building, the International Motorsports Center, on 189 acres we own located directly across from our Daytona motorsports entertainment facility. We announced that the ONE DAYTONA joint venture has selected Shaner Hotels and Prime Hospitality Group ("PHG") as its hotel partners. Shaner Hotels and PHG are planning a 145-room full-service boutique property and are working with global hospitality leader Marriott International to bring an exclusive Marriott Autograph Collection hotel to Daytona Beach and ONE DAYTONA. The joint venture continues to refine the conceptual design for the first phase of ONE DAYTONA. Bass Pro Shops®, America's most popular outdoor store, and Cobb Theatres, the highly respected Southeastern-based exhibitor, have executed leases to anchor ONE DAYTONA. The joint venture is in active discussions with other potential anchor tenants for ONE DAYTONA. We have approved land use entitlements for ONE DAYTONA to allow for up to 1.4 million square feet of retail/dining/entertainment, 2,500 seats in a movie theater, 660 hotel rooms, 1,350 units of residential, 567,000 square feet of additional office space and 500,000 square feet of commercial/industrial space. Final designs are being completed for ONE DAYTONA, and the joint venture will incorporate the results of market studies, project costs and financing structures. ISC // 2014 ANNUAL REPORT // FORM 10-K // 40 39 40 completed according to the agreed upon schedule, provisions regarding payment schedules, and provisions regarding bonding and liability insurance policies applicable to the work. In addition, the Design-Build Agreement contains customary provisions regarding termination, review and inspection of the work, warranties and the use of subcontractors. A total of 11 neighborhoods, each measuring the size of a football field, will enable fans to meet and socialize during events without missing any on-track action, thanks to dozens of strategically-placed video screens in every neighborhood. The central neighborhood, dubbed the "World Center of Racing," features open sight-lines enabling fans to catch all the on-track action while celebrating the history of Daytona International Speedway and its many unforgettable moments throughout more than 50 years of racing. Every seat in Daytona's frontstretch will be replaced with wider, more comfortable seating that will provide pristine sight-lines. There will also be twice as many restrooms and three times as many concessions throughout the facility. For Budweiser Speedweeks 2015, fans can experience some of DAYTONA Rising’s new amenities including first-ever vertical transportation, approximately 40,000 new grandstand seats on the frontstretch near Turn 1, and new concessions and restrooms. In addition to improving the overall fan experience, the corporate entertainment platform at Daytona will be completely transformed. Corporate hospitality will be moved into permanent structures inside the new grandstand, providing premier facilities for corporate entertaining throughout our events. Over 60 new trackside corporate suites will provide our premium guests with breathtaking views and first-class amenities befitting the “World Center of Racing.” In February 2014, Daytona International Speedway announced Toyota as its first Founding Partner for DAYTONA Rising. Through this partnership, Toyota will sponsor Injector 4 and one of the neighborhoods, as well as receive 20,000 square feet of innovative fan engagement space that will enhance the overall guest experience, and nearly 50,000 square feet of interior and exterior branding space. The partnership runs through 2025. In November 2014, Florida Hospital was announced as the stadium’s second Founding Partner taking ownership of Injector 1. As with Toyota, the Florida Hospital brand will be represented on one of five fan injectors, including more than 20,000 square feet of engagement space. Within this injector, Florida Hospital will also have a presence in one of the “neighborhoods”. Beginning in January 2015, Florida Hospital will be the exclusive healthcare provider of Daytona, which includes providing medical equipment and personnel for all events, managing the care center operations and providing ambulances to handle emergency situations. In August 2014, Daytona announced that CommScope, Inc. ("CommScope"), a global leader in infrastructure solutions for communications networks, has become the first technology partner in the expanding DAYTONA Rising “We Built Daytona” marketing platform. CommScope will deploy a new communications infrastructure at Daytona providing the facility with the bandwidth and flexibility to offer services that will enhance a fan’s experience, as well as improve stadium operations. The “We Built Daytona” platform is designed to showcase partners involved in the construction of DAYTONA Rising through a marketing presence (once their role in the project begins). CommScope joins eight other companies including Kingspan, a market leader in sustainable building product technology; USG Corporation, a leading building products company; Sherwin- Williams, an industry leader in the development of technologically advanced paint and coatings; Big Ass Fans, a ceiling fan design and engineering company; P&S Paving, asphalt and paving company; Jones Signs, leading national sign company; Schneider Electric, global specialist in energy management; and ROSSETTI, an award-winning architectural design and planning firm that is leading the master planning of the DAYTONA Rising project. On October 15, 2014 Daytona hosted DAYTONA Rising’s topping out ceremony, commemorating a significant milestone - the midway mark of construction. Speedway officials, the France family and Barton Malow presided over the installation of the highest piece of steel on the project. We expect that by providing our fans with a better experience as well as an expansive platform for our marketing partners, including an elevated hospitality experience, DAYTONA Rising, upon completion in 2016, is expected to provide an immediate incremental lift in Daytona's revenues of approximately $20.0 million, and earnings before interest, taxes, depreciation and amortization ("EBITDA”) lift of approximately $15.0 million with a mid-single-digit growth rate. We also currently anticipate the project to be accretive to our net income per share within three years of completion. While these forward looking amounts are management’s projections and we believe they are reasonable, our actual results may vary from these estimates due to unanticipated changes in projected attendance, lower than expected ticket prices, or lower than forecasted corporate sponsorships. We do not know whether these expectations will ultimately prove correct and actual revenues and operating results may differ materially from these estimates. We currently anticipate DAYTONA Rising to cost approximately $400.0 million, excluding capitalized interest, which we expect to fund from cash on hand, cash from our operations, and we may use borrowings on our credit facility for a limited period of time. In June 2014, House Bill 7095 was signed in Florida creating the Florida Sports Development Program, establishing a process for distributing state tax revenue for the construction or improvement of professional sports facilities. The DAYTONA Rising project is among the eligible applicants to receive sales tax incentives based on the project’s capital investment and amount of sales tax generated by the facility. We filed our application and recently received approval from the state's Department of Economic Opportunity. The final approval must come from the Legislative Budget Committee, whose decision is anticipated later in the first quarter of fiscal 2015. The new bill could potentially provide additional capital for the project. Despite not anticipating the need for additional long-term debt to fund this project, accounting rules dictate that we capitalize a portion of the interest on existing outstanding debt during the construction period. We estimate that we will record approximately $11.0 million to $13.0 million of capitalized interest from fiscal 2013 through fiscal 2016, with roughly half of the capitalized interest recorded in fiscal 2014. Total spending incurred for DAYTONA Rising was approximately $119.3 million for fiscal 2014, and is approximately $170.5 million since the inception of the project. Based on our current expectations of DAYTONA Rising, we have identified existing assets that are expected to be impacted by the redevelopment and that those assets will require accelerated depreciation, certain removal costs and losses on asset retirements, totaling approximately $50.0 million over the approximate 26-month project time span. During fiscal 2014, we recognized accelerated depreciation, certain removal costs and losses on retirements of assets totaling approximately $15.8 million, with a total of approximately $28.0 million recognized since the inception of the project. In addition, our depreciation expense, related directly to DAYTONA Rising, will increase incrementally by approximately $12.0 million to $14.0 million in fiscal 2015, and an additional $9.0 million to $10.0 million in fiscal 2016, respectively. The incremental increase in depreciation expense for fiscal 2015 is based on the anticipation of opening approximately forty percent of the new stadium in time for Budweiser Speedweeks 2015. As a result, our total depreciation expense for fiscal 2015 is estimated to be between approximately $93.0 million and $97.0 million, and approximately $100.0 million to $105.0 million annually, in fiscal 2016, and then decreasing, due to lower capital spending, to approximately $85.0 million to $90.0 million beginning in fiscal 2019. ONE DAYTONA We entered into a 50/50 joint venture with Atlanta-based Jacoby Development, Inc. to develop a mixed-use entertainment destination, named ONE DAYTONA, located adjacent to our 188,000 square foot office building, the International Motorsports Center, on 189 acres we own located directly across from our Daytona motorsports entertainment facility. We announced that the ONE DAYTONA joint venture has selected Shaner Hotels and Prime Hospitality Group ("PHG") as its hotel partners. Shaner Hotels and PHG are planning a 145-room full-service boutique property and are working with global hospitality leader Marriott International to bring an exclusive Marriott Autograph Collection hotel to Daytona Beach and ONE DAYTONA. The joint venture continues to refine the conceptual design for the first phase of ONE DAYTONA. Bass Pro Shops®, America's most popular outdoor store, and Cobb Theatres, the highly respected Southeastern-based exhibitor, have executed leases to anchor ONE DAYTONA. The joint venture is in active discussions with other potential anchor tenants for ONE DAYTONA. We have approved land use entitlements for ONE DAYTONA to allow for up to 1.4 million square feet of retail/dining/entertainment, 2,500 seats in a movie theater, 660 hotel rooms, 1,350 units of residential, 567,000 square feet of additional office space and 500,000 square feet of commercial/industrial space. Final designs are being completed for ONE DAYTONA, and the joint venture will incorporate the results of market studies, project costs and financing structures. 39 40 ISC // 2014 ANNUAL REPORT // FORM 10-K // 41 The joint venture has formed a Community Development District ("CDD") for the purpose of installing and maintaining public infrastructure at ONE DAYTONA. The CDD is a local, special purpose government framework authorized by Chapter 190 of the Florida Statutes for managing and financing infrastructure to support community development. us and/or the SEC. information concerning these, or other factors, which could cause the actual results to differ materially from those in the forward-looking statements is contained from time to time in our other SEC filings. Copies of those filings are available from The CDD has negotiated agreements with the City of Daytona Beach and Volusia County for a total of $40.0 million in incentives to finance a portion of the estimated $53.0 million in infrastructure required to move forward with the ONE DAYTONA project. We are currently proceeding with the leasing phase of the project while simultaneously completing the various necessary requirements for the CDD to access the incentives to start infrastructure work. Speedway Developments In light of NASCAR's publicly announced position regarding additional potential realignment of the NASCAR Sprint Cup Series schedule, we believe there are still potential development opportunities for public/private partnerships in new, underserved markets across the country that would create value for our shareholders. However, we are not currently pursuing any new speedway development opportunities. Inflation We do not believe that inflation has had a material impact on our operating costs and earnings. Recent Accounting Pronouncements In February 2013, the Financial Accounting Standards Board ("FASB") issued ASU No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”. The objective of this Update is to set requirements for presentation for significant items reclassified to net income in their entirety during the period and for items not reclassified to net income in their entirety during the period. For public entities, the amended requirements are effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. This statement only impacts disclosures of reclassification adjustments and is not material to our financial statement presentation. We have adopted the amendments of this statement in the first quarter of fiscal 2014. In May 2014, FASB, in conjunction with the International Accounting Standards Board, issued ASU No. 2014-09, "Revenue from Contracts with Customers". The objective of this Update is to significantly enhance comparability and clarify principles of revenue recognition practices across entities, industries, jurisdictions, and capital markets. For a public entity, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The standard can be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption. We are currently evaluating the impact of adopting this new guidance on our financial position and results of operations and will adopt the provisions of this statement in the first quarter of fiscal 2018. Factors That May Affect Operating Results This report and the documents incorporated by reference may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify a forward-looking statement by our use of the words “anticipate,” “estimate,” “expect,” “may,” “believe,” “objective,” “projection,” “forecast,” “goal,” and similar expressions. These forward-looking statements include our statements regarding the timing of future events, our anticipated future operations and our anticipated future financial position and cash requirements. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we do not know whether our expectations will prove correct. We disclose the important factors that could cause our actual results to differ from our expectations in cautionary statements made in this report and in other filings we have made with the SEC. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors described in this report and other factors set forth in or incorporated by reference in this report. Many of these factors are beyond our ability to control or predict. We caution you not to put undue reliance on forward-looking statements or to project any future results based on such statements or on present or prior earnings levels. Additional ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risk from changes in interest rates in the normal course of business. Our interest income and expense are most sensitive to changes in the general level of U.S. interest rates and the LIBOR rate. In order to manage this exposure, from time to time we use a combination of debt instruments, including the use of derivatives in the form of interest rate swap and lock agreements. We do not enter into any derivatives for trading purposes. The objective of our asset management activities is to provide an adequate level of interest income and liquidity to fund operations and capital expansion, while minimizing market risk. We utilize overnight sweep accounts and short-term investments to minimize the interest rate risk. We do not believe that our interest rate risk related to our cash equivalents and short-term investments is material due to the nature of the investments. Our objective in managing our interest rate risk on our debt is to negotiate the most favorable interest rate structures that we can and, as market conditions evolve, adjust our balance of fixed and variable rate debt to optimize our overall borrowing costs within reasonable risk parameters. Interest rate swaps and locks are used from time to time to convert a portion of our debt portfolio from a variable rate to a fixed rate or from a fixed rate to a variable rate as well as to lock in certain rates for future debt issuances. The following analysis provides quantitative information regarding our exposure to interest rate risk. We utilize valuation models to evaluate the sensitivity of the fair value of financial instruments with exposure to market risk that assume instantaneous, parallel shifts in interest rate yield curves. There are certain limitations inherent in the sensitivity analyses presented, primarily due to the assumption that interest rates change instantaneously. In addition, the analyses are unable to reflect the complex market reactions that normally would arise from the market shifts modeled. We have various debt instruments that are issued at fixed rates. These financial instruments, which have a fixed rate of interest, are exposed to fluctuations in fair value resulting from changes in market interest rates. The fair values of long-term debt are based on quoted market prices at the date of measurement. Our credit facilities approximate fair value as they bear interest rates that approximate market. At November 30, 2014, we had no variable debt outstanding. At November 30, 2014, the fair value of our total long-term debt as determined by quotes from financial institutions was approximately $291.2 million. The potential decrease in fair value resulting from a hypothetical 10.0 percent shift in interest rates would be approximately $6.7 million at November 30, 2014. Credit risk arises from the possible inability of counterparties to meet the terms of their contracts on a net basis. However, we minimize such risk exposures for these instruments by limiting counterparties to large banks and financial institutions that meet established credit guidelines. We do not expect to incur any losses as a result of counterparty default. ISC // 2014 ANNUAL REPORT // FORM 10-K // 42 41 42 The joint venture has formed a Community Development District ("CDD") for the purpose of installing and maintaining public infrastructure at ONE DAYTONA. The CDD is a local, special purpose government framework authorized by Chapter 190 of the Florida Statutes for managing and financing infrastructure to support community development. information concerning these, or other factors, which could cause the actual results to differ materially from those in the forward-looking statements is contained from time to time in our other SEC filings. Copies of those filings are available from us and/or the SEC. The CDD has negotiated agreements with the City of Daytona Beach and Volusia County for a total of $40.0 million in incentives to finance a portion of the estimated $53.0 million in infrastructure required to move forward with the ONE DAYTONA project. We are currently proceeding with the leasing phase of the project while simultaneously completing the various necessary requirements for the CDD to access the incentives to start infrastructure work. Speedway Developments In light of NASCAR's publicly announced position regarding additional potential realignment of the NASCAR Sprint Cup Series schedule, we believe there are still potential development opportunities for public/private partnerships in new, underserved markets across the country that would create value for our shareholders. However, we are not currently pursuing any new speedway development opportunities. Inflation Recent Accounting Pronouncements We do not believe that inflation has had a material impact on our operating costs and earnings. In February 2013, the Financial Accounting Standards Board ("FASB") issued ASU No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”. The objective of this Update is to set requirements for presentation for significant items reclassified to net income in their entirety during the period and for items not reclassified to net income in their entirety during the period. For public entities, the amended requirements are effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. This statement only impacts disclosures of reclassification adjustments and is not material to our financial statement presentation. We have adopted the amendments of this statement in the first quarter of fiscal 2014. In May 2014, FASB, in conjunction with the International Accounting Standards Board, issued ASU No. 2014-09, "Revenue from Contracts with Customers". The objective of this Update is to significantly enhance comparability and clarify principles of revenue recognition practices across entities, industries, jurisdictions, and capital markets. For a public entity, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The standard can be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption. We are currently evaluating the impact of adopting this new guidance on our financial position and results of operations and will adopt the provisions of this statement in the first quarter of fiscal 2018. Factors That May Affect Operating Results This report and the documents incorporated by reference may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify a forward-looking statement by our use of the words “anticipate,” “estimate,” “expect,” “may,” “believe,” “objective,” “projection,” “forecast,” “goal,” and similar expressions. These forward-looking statements include our statements regarding the timing of future events, our anticipated future operations and our anticipated future financial position and cash requirements. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we do not know whether our expectations will prove correct. We disclose the important factors that could cause our actual results to differ from our expectations in cautionary statements made in this report and in other filings we have made with the SEC. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors described in this report and other factors set forth in or incorporated by reference in this report. Many of these factors are beyond our ability to control or predict. We caution you not to put undue reliance on forward-looking statements or to project any future results based on such statements or on present or prior earnings levels. Additional ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risk from changes in interest rates in the normal course of business. Our interest income and expense are most sensitive to changes in the general level of U.S. interest rates and the LIBOR rate. In order to manage this exposure, from time to time we use a combination of debt instruments, including the use of derivatives in the form of interest rate swap and lock agreements. We do not enter into any derivatives for trading purposes. The objective of our asset management activities is to provide an adequate level of interest income and liquidity to fund operations and capital expansion, while minimizing market risk. We utilize overnight sweep accounts and short-term investments to minimize the interest rate risk. We do not believe that our interest rate risk related to our cash equivalents and short-term investments is material due to the nature of the investments. Our objective in managing our interest rate risk on our debt is to negotiate the most favorable interest rate structures that we can and, as market conditions evolve, adjust our balance of fixed and variable rate debt to optimize our overall borrowing costs within reasonable risk parameters. Interest rate swaps and locks are used from time to time to convert a portion of our debt portfolio from a variable rate to a fixed rate or from a fixed rate to a variable rate as well as to lock in certain rates for future debt issuances. The following analysis provides quantitative information regarding our exposure to interest rate risk. We utilize valuation models to evaluate the sensitivity of the fair value of financial instruments with exposure to market risk that assume instantaneous, parallel shifts in interest rate yield curves. There are certain limitations inherent in the sensitivity analyses presented, primarily due to the assumption that interest rates change instantaneously. In addition, the analyses are unable to reflect the complex market reactions that normally would arise from the market shifts modeled. We have various debt instruments that are issued at fixed rates. These financial instruments, which have a fixed rate of interest, are exposed to fluctuations in fair value resulting from changes in market interest rates. The fair values of long-term debt are based on quoted market prices at the date of measurement. Our credit facilities approximate fair value as they bear interest rates that approximate market. At November 30, 2014, we had no variable debt outstanding. At November 30, 2014, the fair value of our total long-term debt as determined by quotes from financial institutions was approximately $291.2 million. The potential decrease in fair value resulting from a hypothetical 10.0 percent shift in interest rates would be approximately $6.7 million at November 30, 2014. Credit risk arises from the possible inability of counterparties to meet the terms of their contracts on a net basis. However, we minimize such risk exposures for these instruments by limiting counterparties to large banks and financial institutions that meet established credit guidelines. We do not expect to incur any losses as a result of counterparty default. 41 42 ISC // 2014 ANNUAL REPORT // FORM 10-K // 43 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Shareholders International Speedway Corporation The Board of Directors and Shareholders International Speedway Corporation We have audited the accompanying consolidated balance sheets of International Speedway Corporation (the "Company") as of November 30, 2014 and 2013, and the related consolidated statements of operations, comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended November 30, 2014. Our audits also included the financial statement schedule listed in the Index at Item 15(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 and schedule based on our audits. We have audited International Speedway Corporation’s internal control over financial reporting as of November 30, 2014, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) (the COSO criteria). International Speedway Corporation’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides 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 at November 30, 2014 and 2013, and the consolidated results of its operations and its cash flows for each of the three years in the period ended November 30, 2014, in conformity with U.S. 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. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), International Speedway Corporation’s internal control over financial reporting as of November 30, 2014, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) and our report dated January 27, 2015, expressed an unqualified opinion thereon. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Jacksonville, Florida January 27, 2015 /s/ Ernst & Young LLP Certified Public Accountants In our opinion, International Speedway Corporation maintained, in all material respects, effective internal control over financial reporting as of November 30, 2014, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of International Speedway Corporation as of November 30, 2014 and 2013, and the related consolidated statements of operations, comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended November 30, 2014 of International Speedway Corporation and our report dated January 27, 2015 expressed an unqualified opinion thereon. ISC // 2014 ANNUAL REPORT // FORM 10-K // 44 43 44 Jacksonville, Florida January 27, 2015 /s/ Ernst & Young LLP Certified Public Accountants ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Shareholders International Speedway Corporation The Board of Directors and Shareholders International Speedway Corporation We have audited the accompanying consolidated balance sheets of International Speedway Corporation (the "Company") as of November 30, 2014 and 2013, and the related consolidated statements of operations, comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended November 30, 2014. Our audits also included the financial statement schedule listed in the Index at Item 15(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 and schedule based on our audits. We have audited International Speedway Corporation’s internal control over financial reporting as of November 30, 2014, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) (the COSO criteria). International Speedway Corporation’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides 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 at November 30, 2014 and 2013, and the consolidated results of its operations and its cash flows for each of the three years in the period ended November 30, 2014, in conformity with U.S. 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. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), International Speedway Corporation’s internal control over financial reporting as of November 30, 2014, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) and our report dated January 27, 2015, expressed an unqualified opinion thereon. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Jacksonville, Florida January 27, 2015 /s/ Ernst & Young LLP Certified Public Accountants In our opinion, International Speedway Corporation maintained, in all material respects, effective internal control over financial reporting as of November 30, 2014, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of International Speedway Corporation as of November 30, 2014 and 2013, and the related consolidated statements of operations, comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended November 30, 2014 of International Speedway Corporation and our report dated January 27, 2015 expressed an unqualified opinion thereon. 43 44 ISC // 2014 ANNUAL REPORT // FORM 10-K // 45 Jacksonville, Florida January 27, 2015 /s/ Ernst & Young LLP Certified Public Accountants INTERNATIONAL SPEEDWAY CORPORATION Consolidated Balance Sheets INTERNATIONAL SPEEDWAY CORPORATION Consolidated Statements of Operations ASSETS Current Assets: Cash and cash equivalents Receivables, less allowance of $1,000 in 2013 and 2014, respectively Inventories Income taxes receivable Deferred income taxes Prepaid expenses and other current assets Total Current Assets Property and Equipment, net Other Assets: Equity investments Intangible assets, net Goodwill Other Total Assets LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities: Current portion of long-term debt Accounts payable Deferred income Other current liabilities Total Current Liabilities Long-Term Debt Deferred Income Taxes Long-Term Deferred Income Other Long-Term Liabilities Commitments and Contingencies Shareholders’ Equity: $ $ $ November 30, 2013 2014 (in thousands, except share and per share amounts) 172,827 $ 25,910 2,619 17,399 3,122 13,965 235,842 1,276,976 134,327 178,628 118,791 72,942 504,688 2,017,506 $ 2,807 $ 27,669 35,679 15,907 82,062 271,680 366,531 8,604 1,474 — 158,847 27,598 4,030 6,202 2,789 8,099 207,565 1,381,190 122,565 178,629 118,791 68,911 488,896 2,077,651 3,435 41,491 33,043 18,813 96,782 268,311 354,276 9,548 2,302 — Class A Common Stock, $.01 par value, 80,000,000 shares authorized; 26,182,518 and 26,248,081 issued and outstanding in 2013 and 2014, respectively Class B Common Stock, $.01 par value, 40,000,000 shares authorized; 19,994,663 and 19,967,202 issued and outstanding in 2013 and 2014, respectively Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total Shareholders’ Equity Total Liabilities and Shareholders’ Equity See accompanying notes $ 261 262 200 445,097 846,235 (4,638 ) 1,287,155 2,017,506 $ 200 447,518 902,433 (3,981 ) 1,346,432 2,077,651 Prize and point fund monies and NASCAR sanction fees REVENUES: Admissions, net Motorsports related Food, beverage and merchandise Other EXPENSES: Direct: Motorsports related Food, beverage and merchandise General and administrative Depreciation and amortization Losses on retirements of long-lived assets Operating income Interest income Interest expense Loss on early redemption of debt Other Equity in net income from equity investments Income before income taxes Income taxes Net income Earnings per share: Basic and diluted Dividends per share Year Ended November 30, 2012 2013 2014 (in thousands, except share and per share amounts) $ 136,099 $ 129,824 $ 416,699 45,985 13,584 612,367 154,673 125,072 35,642 102,958 77,870 11,143 507,358 105,009 102 (13,501 ) (9,144 ) 1,008 2,757 86,231 31,653 425,530 44,046 13,240 612,640 159,349 125,928 33,150 104,925 93,989 16,607 533,948 78,692 (15,221 ) 96 — 75 9,434 73,076 27,784 $ $ $ 54,578 $ 45,292 $ 1.18 $ 0.97 $ 0.20 $ 0.22 $ 129,688 433,738 72,880 15,630 651,936 162,988 128,229 58,265 108,563 90,352 10,148 558,545 93,391 2,107 (9,182 ) — 5,380 8,916 100,612 33,233 67,379 1.45 0.24 Basic weighted average shares outstanding 46,386,355 46,470,647 46,559,232 Diluted weighted average shares outstanding 46,396,631 46,486,561 46,573,038 See accompanying notes ISC // 2014 ANNUAL REPORT // FORM 10-K // 46 45 46 Receivables, less allowance of $1,000 in 2013 and 2014, respectively $ 172,827 $ LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities: Current portion of long-term debt $ 2,017,506 $ 2,077,651 $ 2,807 $ Prepaid expenses and other current assets ASSETS Current Assets: Cash and cash equivalents Inventories Income taxes receivable Deferred income taxes Total Current Assets Property and Equipment, net Other Assets: Equity investments Intangible assets, net Goodwill Other Total Assets Accounts payable Deferred income Other current liabilities Total Current Liabilities Long-Term Debt Deferred Income Taxes Long-Term Deferred Income Other Long-Term Liabilities Commitments and Contingencies Shareholders’ Equity: November 30, 2013 2014 (in thousands, except share and per share amounts) 25,910 2,619 17,399 3,122 13,965 235,842 1,276,976 134,327 178,628 118,791 72,942 504,688 27,669 35,679 15,907 82,062 271,680 366,531 8,604 1,474 — 200 445,097 846,235 (4,638 ) 1,287,155 158,847 27,598 4,030 6,202 2,789 8,099 207,565 1,381,190 122,565 178,629 118,791 68,911 488,896 3,435 41,491 33,043 18,813 96,782 268,311 354,276 9,548 2,302 — 200 447,518 902,433 (3,981 ) 1,346,432 2,077,651 INTERNATIONAL SPEEDWAY CORPORATION Consolidated Balance Sheets INTERNATIONAL SPEEDWAY CORPORATION Consolidated Statements of Operations REVENUES: Admissions, net Motorsports related Food, beverage and merchandise Other EXPENSES: Direct: Prize and point fund monies and NASCAR sanction fees Motorsports related Food, beverage and merchandise General and administrative Depreciation and amortization Losses on retirements of long-lived assets Operating income Interest income Interest expense Loss on early redemption of debt Other Equity in net income from equity investments Income before income taxes Income taxes Net income Earnings per share: Basic and diluted Dividends per share Year Ended November 30, 2012 2013 2014 (in thousands, except share and per share amounts) $ $ $ $ 136,099 $ 416,699 45,985 13,584 612,367 154,673 125,072 35,642 102,958 77,870 11,143 507,358 105,009 102 (13,501 ) (9,144 ) 1,008 2,757 86,231 31,653 54,578 $ 129,824 $ 425,530 44,046 13,240 612,640 159,349 125,928 33,150 104,925 93,989 16,607 533,948 78,692 96 (15,221 ) — 75 9,434 73,076 27,784 45,292 $ 1.18 $ 0.97 $ 0.20 $ 0.22 $ 129,688 433,738 72,880 15,630 651,936 162,988 128,229 58,265 108,563 90,352 10,148 558,545 93,391 2,107 (9,182 ) — 5,380 8,916 100,612 33,233 67,379 1.45 0.24 Class A Common Stock, $.01 par value, 80,000,000 shares authorized; 26,182,518 and 26,248,081 issued and outstanding in 2013 and 2014, respectively Class B Common Stock, $.01 par value, 40,000,000 shares authorized; 19,994,663 and 19,967,202 issued and outstanding in 2013 and 2014, respectively Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total Shareholders’ Equity Total Liabilities and Shareholders’ Equity See accompanying notes $ 2,017,506 $ 261 262 Diluted weighted average shares outstanding 46,396,631 46,486,561 46,573,038 Basic weighted average shares outstanding 46,386,355 46,470,647 46,559,232 See accompanying notes 45 46 ISC // 2014 ANNUAL REPORT // FORM 10-K // 47 INTERNATIONAL SPEEDWAY CORPORATION Consolidated Statements of Comprehensive Income INTERNATIONAL SPEEDWAY CORPORATION Consolidated Statements of Changes in Shareholders’ Equity Net income Other comprehensive income: Year Ended November 30, 2012 2013 2014 (in thousands) $ 54,578 $ 45,292 $ 67,379 Foreign currency translation, net of tax benefit (expense) of ($8), $0 and $0, respectively Amortization of interest rate swap, net of tax benefit of $424, $424 and $425, respectively Comprehensive income (13 ) — $ 658 55,223 $ 658 45,950 $ — 657 68,036 See accompanying notes Balance at November 30, 2011 $ 264 $ 200 $ 445,005 $ 772,938 $ (5,941 ) $ 1,212,466 (in thousands) Class A Class B Common Common Stock Stock Additional $.01 Par $.01 Par Value Value Paid-in Capital Retained Earnings Comprehensive Shareholders’ (Loss) Income Equity Accumulated Other Total 260 200 442,474 811,172 (5,296 ) 1,248,810 — — — (4 ) — — — — 1 — — — — — — — — 1 — — — — — — — — — — — — — — — — — — — — — — — (3,491 ) (914 ) 1,874 — — 340 (259 ) 9 2,533 54,578 — (9,283 ) (7,061 ) — — 45,292 — — — — — — (10,229 ) — 67,379 — — — (11,181 ) (323 ) (82 ) 2,826 — — — — 645 — — — — — 658 — — — — — — 657 — — — — 54,578 645 (9,283 ) (10,556 ) (914 ) 1,874 45,292 658 341 (10,229 ) (259 ) 9 2,533 67,379 657 (11,181 ) (323 ) (81 ) 2,826 261 200 445,097 846,235 (4,638 ) 1,287,155 $ 262 $ 200 $ 447,518 $ 902,433 $ (3,981 ) $ 1,346,432 See accompanying notes Reacquisition of previously issued common stock Net income Other comprehensive income Cash dividends ($.20 per share) Other Stock-based compensation Balance at November 30, 2012 Net income Other comprehensive income Exercise of stock options Cash dividends ($.22 per share) Other Stock-based compensation Balance at November 30, 2013 Net income Other comprehensive income Cash dividends ($.24 per share) Other Stock-based compensation Balance at November 30, 2014 Reacquisition of previously issued common stock Reacquisition of previously issued common stock ISC // 2014 ANNUAL REPORT // FORM 10-K // 48 47 48 INTERNATIONAL SPEEDWAY CORPORATION Consolidated Statements of Comprehensive Income Net income Other comprehensive income: $0 and $0, respectively $424 and $425, respectively Comprehensive income Foreign currency translation, net of tax benefit (expense) of ($8), Amortization of interest rate swap, net of tax benefit of $424, See accompanying notes Year Ended November 30, 2012 2013 2014 (in thousands) $ 54,578 $ 45,292 $ 67,379 (13 ) 658 — 658 $ 55,223 $ 45,950 $ — 657 68,036 INTERNATIONAL SPEEDWAY CORPORATION Consolidated Statements of Changes in Shareholders’ Equity (in thousands) Class A Common Stock $.01 Par Value Class B Common Stock $.01 Par Value Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive (Loss) Income Total Shareholders’ Equity Balance at November 30, 2011 $ Net income Other comprehensive income Cash dividends ($.20 per share) Reacquisition of previously issued common stock Other Stock-based compensation Balance at November 30, 2012 Net income Other comprehensive income Exercise of stock options Cash dividends ($.22 per share) Reacquisition of previously issued common stock Other Stock-based compensation Balance at November 30, 2013 Net income Other comprehensive income Cash dividends ($.24 per share) Reacquisition of previously issued common stock Other Stock-based compensation Balance at November 30, 2014 $ 264 $ — — — (4 ) — — 260 — — 1 — — — — 261 — — — — 1 — 262 $ 200 $ 445,005 $ 772,938 $ 54,578 — — — — — (9,283 ) — — (7,061 ) (3,491 ) — — (914 ) — — — 1,874 200 442,474 811,172 45,292 — — — — — — 340 — (10,229 ) — — — (259 ) — — 9 — — — 2,533 200 445,097 846,235 — 67,379 — — — — (11,181 ) — — — (323 ) — — (82 ) — — — 2,826 200 $ 447,518 $ 902,433 $ See accompanying notes (5,941 ) $ 1,212,466 54,578 645 — 645 — — — — (5,296 ) — 658 — — — — — (4,638 ) — 657 — — — — (9,283 ) (10,556 ) (914 ) 1,874 1,248,810 45,292 658 341 (10,229 ) (259 ) 9 2,533 1,287,155 67,379 657 (11,181 ) (323 ) (81 ) 2,826 (3,981 ) $ 1,346,432 47 48 ISC // 2014 ANNUAL REPORT // FORM 10-K // 49 INTERNATIONAL SPEEDWAY CORPORATION Consolidated Statements of Cash Flows INTERNATIONAL SPEEDWAY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOVEMBER 30, 2014 OPERATING ACTIVITIES Net income Adjustments to reconcile net income to net cash provided by operating activities: Gain on assumption of controlling interest in equity investee Depreciation and amortization Stock-based compensation Amortization of financing costs Interest received on Staten Island note receivable Deferred income taxes Income from equity investments Distribution from equity investee Losses on retirements of long-lived assets, non-cash Other, net Changes in operating assets and liabilities Receivables, net Inventories, prepaid expenses and other assets Accounts payable and other liabilities Deferred income Income taxes Net cash provided by operating activities INVESTING ACTIVITIES Capital expenditures Distribution from equity investee and affiliate Equity investments and advances to affiliate Proceeds from sale of Staten Island property Cash included in assumption of ownership interest in equity investee Other, net Net cash used in investing activities FINANCING ACTIVITIES Proceeds under credit facility Payments under credit facility Proceeds from long-term debt Payment of long-term debt Deferred financing fees Exercise of Class A common stock options Cash dividends paid Reacquisition of previously issued common stock Net cash used in financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Year Ended November 30, 2012 2013 2014 (in thousands) $ 54,578 $ 45,292 $ 67,379 NOTE 1 — DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES DESCRIPTION OF BUSINESS: International Speedway Corporation (“ISC”), including its wholly owned subsidiaries (collectively the “Company”), is a leading promoter of motorsports themed entertainment activities in the United States. As of November 30, 2014, the Company owned and/or operated 13 of the nation’s major motorsports entertainment facilities as — 77,870 1,874 1,605 — 12,184 (2,757 ) — 8,055 (829 ) 5,268 966 (2,521 ) (3,023 ) (2,345 ) 150,925 (82,872 ) 11,000 (51,984 ) — — 1,423 (122,433 ) 130,000 (180,000 ) 100,000 (89,306 ) (1,046 ) — (9,283 ) (10,556 ) (60,191 ) (31,699 ) 110,078 78,379 $ — 93,989 2,533 1,397 — 36,012 (9,434 ) 8,216 10,023 (26 ) 4,920 (479 ) 3,658 (8,990 ) (13,716 ) 173,395 (85,539 ) 13,284 — 5,322 — 646 (66,287 ) — — — (2,513 ) — 341 (10,229 ) (259 ) (12,660 ) 94,448 78,379 172,827 $ (5,447 ) 90,352 2,826 1,779 5,087 (12,346 ) (8,916 ) 10,076 2,644 380 (1,776 ) 1,977 (517 ) (1,692 ) 11,041 162,847 (183,936 ) 11,924 (1,322 ) 6,100 4,686 32 (162,516 ) — — — (2,807 ) — — (11,181 ) (323 ) (14,311 ) (13,980 ) 172,827 158,847 $ Auto Club Speedway of Southern California follows: Track Name Daytona International Speedway Talladega Superspeedway Kansas Speedway Richmond International Raceway Michigan International Speedway Darlington Raceway Chicagoland Speedway Martinsville Speedway Phoenix International Raceway Homestead-Miami Speedway Watkins Glen International Route 66 Raceway and other racing events, including: Location Track Length Daytona Beach, Florida Talladega, Alabama Kansas City, Kansas Richmond, Virginia Brooklyn, Michigan Fontana, California Darlington, South Carolina Joliet, Illinois Martinsville, Virginia Phoenix, Arizona Homestead, Florida Watkins Glen, New York Joliet, Illinois 2.5 miles 2.7 miles 1.5 miles 0.8 miles 2.0 miles 2.0 miles 1.3 miles 1.5 miles 0.5 miles 1.0 miles 1.5 miles 3.4 miles 0.25 miles In 2014, these motorsports entertainment facilities promoted well over 100 stock car, open wheel, sports car, truck, motorcycle (cid:127) 21 National Association for Stock Car Auto Racing (“NASCAR”) Sprint Cup Series events; (cid:127) 15 NASCAR Xfinity Series events; (cid:127) 9 NASCAR Camping World Truck Series events; (cid:127) 3 International Motor Sports Association (“IMSA”) Tudor United SportsCar Championship Series events including the premier sports car endurance event in the United States, the Rolex 24 at Daytona; (cid:127) One National Hot Rod Association (“NHRA”) Mellow Yellow drag racing series event; (cid:127) One IndyCar ("IndyCar") Series event; and (cid:127) A number of other prestigious stock car, sports car, open wheel and motorcycle events. The general nature of the Company’s business is a motorsports themed amusement enterprise, furnishing amusement to the public in the form of motorsports themed entertainment. The Company’s motorsports themed event operations consist principally of racing events at these major motorsports entertainment facilities, which, in total, currently have approximately 831,500 grandstand seats and 527 suites. The Company also conducts, either through operations of the particular facility or through certain wholly owned subsidiaries operating under the name “Americrown,” souvenir merchandising operations, food and beverage concession operations and catering services, both in suites and chalets, for customers at its motorsports entertainment facilities. At the beginning of fiscal 2015, the NASCAR Nationwide Series became the NASCAR Xfinity Series. Throughout this document, the naming convention for this series is consistent with the current branding. Motor Racing Network, Inc. (“MRN”), the Company’s proprietary radio network, produces and syndicates to radio stations live coverage of the NASCAR Sprint Cup, Xfinity and Camping World Truck series races and certain other races conducted at the Company’s motorsports entertainment facilities, as well as some races from motorsports entertainment facilities the Company ISC // 2014 ANNUAL REPORT // FORM 10-K // 50 49 See accompanying notes 50 INTERNATIONAL SPEEDWAY CORPORATION Consolidated Statements of Cash Flows Year Ended November 30, 2012 2013 2014 (in thousands) $ 54,578 $ 45,292 $ 67,379 OPERATING ACTIVITIES Net income Adjustments to reconcile net income to net cash provided by operating activities: Gain on assumption of controlling interest in equity investee Depreciation and amortization Stock-based compensation Amortization of financing costs Deferred income taxes Income from equity investments Distribution from equity investee Interest received on Staten Island note receivable Losses on retirements of long-lived assets, non-cash Other, net Changes in operating assets and liabilities Receivables, net Inventories, prepaid expenses and other assets Accounts payable and other liabilities Deferred income Income taxes Net cash provided by operating activities INVESTING ACTIVITIES Capital expenditures Distribution from equity investee and affiliate Equity investments and advances to affiliate Proceeds from sale of Staten Island property Cash included in assumption of ownership interest in equity investee Other, net Net cash used in investing activities FINANCING ACTIVITIES Proceeds under credit facility Payments under credit facility Proceeds from long-term debt Payment of long-term debt Deferred financing fees Exercise of Class A common stock options Cash dividends paid Reacquisition of previously issued common stock Net cash used in financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year — 77,870 1,874 1,605 — 12,184 (2,757 ) — 8,055 (829 ) 5,268 966 (2,521 ) (3,023 ) (2,345 ) 150,925 (82,872 ) 11,000 (51,984 ) — — 1,423 130,000 (180,000 ) 100,000 (89,306 ) (1,046 ) — (9,283 ) (10,556 ) (60,191 ) (31,699 ) 110,078 — 93,989 2,533 1,397 — 36,012 (9,434 ) 8,216 10,023 (26 ) 4,920 (479 ) 3,658 (8,990 ) (13,716 ) 173,395 (85,539 ) 13,284 — 5,322 — 646 — — — (2,513 ) — 341 (10,229 ) (259 ) (12,660 ) 94,448 78,379 (5,447 ) 90,352 2,826 1,779 5,087 (12,346 ) (8,916 ) 10,076 2,644 380 (1,776 ) 1,977 (517 ) (1,692 ) 11,041 162,847 (183,936 ) 11,924 (1,322 ) 6,100 4,686 32 — — — — — (2,807 ) (11,181 ) (323 ) (14,311 ) (13,980 ) 172,827 158,847 Cash and cash equivalents at end of year $ 78,379 $ 172,827 $ See accompanying notes 49 INTERNATIONAL SPEEDWAY CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOVEMBER 30, 2014 NOTE 1 — DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES DESCRIPTION OF BUSINESS: International Speedway Corporation (“ISC”), including its wholly owned subsidiaries (collectively the “Company”), is a leading promoter of motorsports themed entertainment activities in the United States. As of November 30, 2014, the Company owned and/or operated 13 of the nation’s major motorsports entertainment facilities as follows: Track Name Daytona International Speedway Talladega Superspeedway Kansas Speedway Richmond International Raceway Michigan International Speedway Auto Club Speedway of Southern California Darlington Raceway Chicagoland Speedway Martinsville Speedway Phoenix International Raceway Homestead-Miami Speedway Watkins Glen International Route 66 Raceway Location Track Length Daytona Beach, Florida Talladega, Alabama Kansas City, Kansas Richmond, Virginia Brooklyn, Michigan Fontana, California Darlington, South Carolina Joliet, Illinois Martinsville, Virginia Phoenix, Arizona Homestead, Florida Watkins Glen, New York Joliet, Illinois 2.5 miles 2.7 miles 1.5 miles 0.8 miles 2.0 miles 2.0 miles 1.3 miles 1.5 miles 0.5 miles 1.0 miles 1.5 miles 3.4 miles 0.25 miles In 2014, these motorsports entertainment facilities promoted well over 100 stock car, open wheel, sports car, truck, motorcycle and other racing events, including: (cid:127) 21 National Association for Stock Car Auto Racing (“NASCAR”) Sprint Cup Series events; (cid:127) 15 NASCAR Xfinity Series events; (cid:127) 9 NASCAR Camping World Truck Series events; (cid:127) 3 International Motor Sports Association (“IMSA”) Tudor United SportsCar Championship Series events including the premier sports car endurance event in the United States, the Rolex 24 at Daytona; (cid:127) One National Hot Rod Association (“NHRA”) Mellow Yellow drag racing series event; (cid:127) One IndyCar ("IndyCar") Series event; and (122,433 ) (66,287 ) (162,516 ) (cid:127) A number of other prestigious stock car, sports car, open wheel and motorcycle events. The general nature of the Company’s business is a motorsports themed amusement enterprise, furnishing amusement to the public in the form of motorsports themed entertainment. The Company’s motorsports themed event operations consist principally of racing events at these major motorsports entertainment facilities, which, in total, currently have approximately 831,500 grandstand seats and 527 suites. The Company also conducts, either through operations of the particular facility or through certain wholly owned subsidiaries operating under the name “Americrown,” souvenir merchandising operations, food and beverage concession operations and catering services, both in suites and chalets, for customers at its motorsports entertainment facilities. At the beginning of fiscal 2015, the NASCAR Nationwide Series became the NASCAR Xfinity Series. Throughout this document, the naming convention for this series is consistent with the current branding. Motor Racing Network, Inc. (“MRN”), the Company’s proprietary radio network, produces and syndicates to radio stations live coverage of the NASCAR Sprint Cup, Xfinity and Camping World Truck series races and certain other races conducted at the Company’s motorsports entertainment facilities, as well as some races from motorsports entertainment facilities the Company 50 ISC // 2014 ANNUAL REPORT // FORM 10-K // 51 does not own. In addition, MRN provides production services for Sprint Vision, the trackside large screen video display units, at NASCAR Sprint Cup Series event weekends that take place at the Company's motorsports facilities, as well as at Dover International Speedway and Pocono Raceway. MRN also produces and syndicates daily and weekly NASCAR racing-themed programs. 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 and overnight sweep accounts used in the Company’s cash management program. All highly liquid investments with stated maturities of three months or less from the date of purchase are classified as cash equivalents. The Company maintained its cash and cash equivalents with a limited number of financial institutions at November 30, 2014. RECEIVABLES: Receivables are stated at their estimated collectible amounts. The allowance for doubtful accounts is estimated based on historical experience of write offs and current expectations of conditions that might impact the collectability of accounts. INVENTORIES: Inventories, consisting of finished goods, 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 the straight-line method over the estimated useful lives as follows: Buildings, grandstands and motorsports entertainment facilities Furniture and equipment 10-30 years 3-8 years COMPREHENSIVE INCOME: Comprehensive income is the changes in equity of an enterprise except those resulting from shareholder transactions. Accumulated other comprehensive income consists of the following as of November 30, (in Leasehold improvements are depreciated over the shorter of the related lease term or their estimated useful lives. The carrying values of property and equipment are evaluated for impairment upon the occurrence of an impairment indicator based upon expected future undiscounted cash flows. If events or circumstances indicate that the carrying value of an asset may not be recoverable, an impairment loss would be recognized equal to the difference between the carrying value of the asset and its fair value. EQUITY INVESTMENTS: The Company’s investments in joint ventures and other investees where it can exert significant influence on the investee, but does not have effective control over the investee, are accounted for using the equity method of accounting. The Company’s equity in the net income (loss) from equity method investments is recorded as income (loss) with a corresponding increase (decrease) in the investment. Distributions received from the equity investees reduce the investment. Distributions from equity investees representing the Company's share of the equity investee's earnings are treated as cash proceeds from operations while distributions in excess of the equity investee's earnings are considered a return of capital and treated as cash proceeds from investing activities in the Company's consolidated statement of cash flows. The Company recognizes the effects of transactions involving the sale or distribution by an equity investee of its common stock as capital transactions. GOODWILL AND INTANGIBLE ASSETS: All business combinations are accounted for under the purchase method. The excess of the cost of the acquisition over fair value of the net assets acquired (including recognized intangibles) is recorded as goodwill. Business combinations involving existing motorsports entertainment facilities commonly result in a significant portion of the purchase price being allocated to the fair value of the contract-based intangible asset associated with long-term relationships manifest in the sanction agreements with sanctioning bodies, such as NASCAR and IMSA. The continuity of sanction agreements with these bodies has historically enabled the Company to host these motorsports events year after year. While individual sanction agreements may be of terms as short as one year, a significant portion of the purchase price in excess of the fair value of acquired tangible assets is commonly paid to acquire anticipated future cash flows from events promoted ISC // 2014 ANNUAL REPORT // FORM 10-K // 52 51 52 pursuant to these agreements which are expected to continue for the foreseeable future and therefore, in accordance with Accounting Standards Codification (“ASC”) 805, are recorded as indefinite-lived intangible assets recognized apart from goodwill. The Company’s goodwill and other intangible assets are all associated with our Motorsports Event segment. The Company follows applicable authoritative guidance on accounting for goodwill and other intangible assets which specifies, among other things, non-amortization of goodwill and other intangible assets with indefinite useful lives and requires testing for possible impairment, either upon the occurrence of an impairment indicator or at least annually. The Company completes its annual testing in its fiscal fourth quarter, based on assumptions regarding the Company’s future business outlook and expected future discounted cash flows attributable to such assets (using the fair value assessment provision of applicable authoritative guidance), supported by quoted market prices or comparable transactions where available or applicable. In connection with the Company’s fiscal 2014 assessment of goodwill and intangible assets for possible impairment, the Company used the methodology described above. The Company believes its methods used to determine fair value and evaluate possible impairment were appropriate, relevant, and represent methods customarily available and used for such purposes. The Company’s latest annual assessment of goodwill and other intangible assets in the fourth quarter of fiscal 2014 indicated there had been no impairment and the fair value substantially exceeded the carrying value for the respective reporting units. During fiscal 2014, the Company believes there has been no significant change in the long-term fundamentals of its ongoing motorsports event business. The Company believes its present operational and cash flow outlook further support its conclusion. While the Company continues to review and analyze many factors that can impact its business prospects in the future, its analysis is subjective and is based on conditions existing at, and trends leading up to, the time the estimates and assumptions are made. Different conditions or assumptions, or changes in cash flows or profitability, if significant, could have a material adverse effect on the outcome of the impairment evaluation and the Company’s future condition or results of operations. DEFERRED FINANCING FEES: Deferred financing fees are amortized over the term of the related debt and are included in other non-current assets. thousands): Interest rate swap, net of tax benefit of $3,025 and $2,600, respectively $ (4,638 ) $ (3,981 ) 2013 2014 INCOME TAXES: Income taxes have been provided using the liability method. Under this method the Company’s estimates of deferred income taxes and the significant items giving rise to deferred tax assets and liabilities reflect its assessment of actual future taxes to be paid on items reflected in its financial statements, giving consideration to both timing and probability of realization. The Company establishes tax reserves related to certain matters, including penalties and interest, in the period when it is determined that it is probable that additional taxes, penalties and interest will be paid, and the amount is reasonably estimable. Such tax reserves are adjusted, as needed, in light of changing circumstances, such as statute of limitations expirations and other developments relating to uncertain tax positions and current tax items under examination, appeal or litigation. REVENUE RECOGNITION: Advance ticket sales and event-related revenues for future events are deferred until earned, which is generally once the events are conducted. The recognition of event-related expenses is matched with the recognition of event-related revenues. NASCAR contracts directly with certain network providers for television rights to the entire NASCAR Sprint Cup, Xfinity and Camping World Truck series schedules. Event promoters share in the television rights fees in accordance with the provision of the sanction agreement for each NASCAR Sprint Cup, Xfinity and Camping World Truck series event. Under the terms of this arrangement, NASCAR retains 10.0 percent of the gross broadcast rights fees allocated to each NASCAR Sprint Cup, Xfinity and Camping World Truck series event as a component of its sanction fees. The promoter records 90.0 percent of the gross broadcast rights fees as revenue and then records 25.0 percent of the gross broadcast rights fees as part of its awards to the does not own. In addition, MRN provides production services for Sprint Vision, the trackside large screen video display units, at NASCAR Sprint Cup Series event weekends that take place at the Company's motorsports facilities, as well as at Dover International Speedway and Pocono Raceway. MRN also produces and syndicates daily and weekly NASCAR racing-themed pursuant to these agreements which are expected to continue for the foreseeable future and therefore, in accordance with Accounting Standards Codification (“ASC”) 805, are recorded as indefinite-lived intangible assets recognized apart from goodwill. The Company’s goodwill and other intangible assets are all associated with our Motorsports Event segment. programs. 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 and overnight sweep accounts used in the Company’s cash management program. All highly liquid investments with stated maturities of three months or less from the date of purchase are classified as cash equivalents. The Company maintained its cash and cash equivalents with a limited number of financial institutions at November 30, 2014. RECEIVABLES: Receivables are stated at their estimated collectible amounts. The allowance for doubtful accounts is estimated based on historical experience of write offs and current expectations of conditions that might impact the collectability of accounts. basis, or market. follows: INVENTORIES: Inventories, consisting of finished goods, are stated at the lower of cost, determined on the first-in, first-out PROPERTY AND EQUIPMENT: Property and equipment, including improvements to existing facilities, are stated at cost. Depreciation is provided for financial reporting purposes using the straight-line method over the estimated useful lives as Buildings, grandstands and motorsports entertainment facilities Furniture and equipment 10-30 years 3-8 years Leasehold improvements are depreciated over the shorter of the related lease term or their estimated useful lives. The carrying values of property and equipment are evaluated for impairment upon the occurrence of an impairment indicator based upon expected future undiscounted cash flows. If events or circumstances indicate that the carrying value of an asset may not be recoverable, an impairment loss would be recognized equal to the difference between the carrying value of the asset and its fair value. EQUITY INVESTMENTS: The Company’s investments in joint ventures and other investees where it can exert significant influence on the investee, but does not have effective control over the investee, are accounted for using the equity method of accounting. The Company’s equity in the net income (loss) from equity method investments is recorded as income (loss) with a corresponding increase (decrease) in the investment. Distributions received from the equity investees reduce the investment. Distributions from equity investees representing the Company's share of the equity investee's earnings are treated as cash proceeds from operations while distributions in excess of the equity investee's earnings are considered a return of capital and treated as cash proceeds from investing activities in the Company's consolidated statement of cash flows. The Company recognizes the effects of transactions involving the sale or distribution by an equity investee of its common stock as capital transactions. GOODWILL AND INTANGIBLE ASSETS: All business combinations are accounted for under the purchase method. The excess of the cost of the acquisition over fair value of the net assets acquired (including recognized intangibles) is recorded as goodwill. Business combinations involving existing motorsports entertainment facilities commonly result in a significant portion of the purchase price being allocated to the fair value of the contract-based intangible asset associated with long-term relationships manifest in the sanction agreements with sanctioning bodies, such as NASCAR and IMSA. The continuity of sanction agreements with these bodies has historically enabled the Company to host these motorsports events year after year. While individual sanction agreements may be of terms as short as one year, a significant portion of the purchase price in excess of the fair value of acquired tangible assets is commonly paid to acquire anticipated future cash flows from events promoted The Company follows applicable authoritative guidance on accounting for goodwill and other intangible assets which specifies, among other things, non-amortization of goodwill and other intangible assets with indefinite useful lives and requires testing for possible impairment, either upon the occurrence of an impairment indicator or at least annually. The Company completes its annual testing in its fiscal fourth quarter, based on assumptions regarding the Company’s future business outlook and expected future discounted cash flows attributable to such assets (using the fair value assessment provision of applicable authoritative guidance), supported by quoted market prices or comparable transactions where available or applicable. In connection with the Company’s fiscal 2014 assessment of goodwill and intangible assets for possible impairment, the Company used the methodology described above. The Company believes its methods used to determine fair value and evaluate possible impairment were appropriate, relevant, and represent methods customarily available and used for such purposes. The Company’s latest annual assessment of goodwill and other intangible assets in the fourth quarter of fiscal 2014 indicated there had been no impairment and the fair value substantially exceeded the carrying value for the respective reporting units. During fiscal 2014, the Company believes there has been no significant change in the long-term fundamentals of its ongoing motorsports event business. The Company believes its present operational and cash flow outlook further support its conclusion. While the Company continues to review and analyze many factors that can impact its business prospects in the future, its analysis is subjective and is based on conditions existing at, and trends leading up to, the time the estimates and assumptions are made. Different conditions or assumptions, or changes in cash flows or profitability, if significant, could have a material adverse effect on the outcome of the impairment evaluation and the Company’s future condition or results of operations. DEFERRED FINANCING FEES: Deferred financing fees are amortized over the term of the related debt and are included in other non-current assets. COMPREHENSIVE INCOME: Comprehensive income is the changes in equity of an enterprise except those resulting from shareholder transactions. Accumulated other comprehensive income consists of the following as of November 30, (in thousands): Interest rate swap, net of tax benefit of $3,025 and $2,600, respectively $ (4,638 ) $ (3,981 ) 2013 2014 INCOME TAXES: Income taxes have been provided using the liability method. Under this method the Company’s estimates of deferred income taxes and the significant items giving rise to deferred tax assets and liabilities reflect its assessment of actual future taxes to be paid on items reflected in its financial statements, giving consideration to both timing and probability of realization. The Company establishes tax reserves related to certain matters, including penalties and interest, in the period when it is determined that it is probable that additional taxes, penalties and interest will be paid, and the amount is reasonably estimable. Such tax reserves are adjusted, as needed, in light of changing circumstances, such as statute of limitations expirations and other developments relating to uncertain tax positions and current tax items under examination, appeal or litigation. REVENUE RECOGNITION: Advance ticket sales and event-related revenues for future events are deferred until earned, which is generally once the events are conducted. The recognition of event-related expenses is matched with the recognition of event-related revenues. NASCAR contracts directly with certain network providers for television rights to the entire NASCAR Sprint Cup, Xfinity and Camping World Truck series schedules. Event promoters share in the television rights fees in accordance with the provision of the sanction agreement for each NASCAR Sprint Cup, Xfinity and Camping World Truck series event. Under the terms of this arrangement, NASCAR retains 10.0 percent of the gross broadcast rights fees allocated to each NASCAR Sprint Cup, Xfinity and Camping World Truck series event as a component of its sanction fees. The promoter records 90.0 percent of the gross broadcast rights fees as revenue and then records 25.0 percent of the gross broadcast rights fees as part of its awards to the 51 52 ISC // 2014 ANNUAL REPORT // FORM 10-K // 53 competitors. Ultimately, the promoter retains 65.0 percent of the net cash proceeds from the gross broadcast rights fees allocated to the event. The Company's revenues from marketing partnerships are paid in accordance with negotiated contracts, with the identities of partners and the terms of sponsorship changing from time to time. Some of our marketing partnership agreements are for multiple facilities and/or events and include multiple specified elements, such as tickets, hospitality chalets, suites, display space and signage for each included event. The allocation of such marketing partnership revenues between the multiple elements, events and facilities is based on relative selling price. The sponsorship revenue allocated to an event is recognized when the event is conducted. Revenues and related costs from the sale of merchandise to retail customers, internet sales and direct sales to dealers are recognized at the time of sale. Kansas Speedway ("Kansas") and Chicagoland Speedway ("Chicagoland") offer Preferred Access Speedway Seating (“PASS”) agreements, which give purchasers the exclusive right and obligation to purchase season-ticket packages for certain sanctioned racing events annually, under specified terms and conditions. Among the conditions, licensees are required to purchase all season-ticket packages when and as offered each year. PASS agreements automatically terminate without refund should owners not purchase any offered season tickets. Net fees received under PASS agreements are deferred and are amortized into income over the term of the agreements. Long- term deferred income under the PASS agreements totals approximately $6.5 million and $5.5 million at November 30, 2013 and 2014, respectively. ADVERTISING EXPENSE: Advertising costs are expensed as incurred. Advertising expense was approximately $15.3 million, $15.1 million and $16.5 million for the years ended November 30, 2012, 2013 and 2014, respectively. LOSS CONTINGENCIES: Legal and other costs incurred in conjunction with loss contingencies are expensed as incurred. USE OF ESTIMATES: The preparation of financial statements in conformity with U.S. 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 February 2013, the Financial Accounting Standards Board ("FASB") issued ASU No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”. The objective of this Update is to set requirements for presentation for significant items reclassified to net income in their entirety during the period and for items not reclassified to net income in their entirety during the period. For public entities, the amended requirements are effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. This statement only impacts disclosures of reclassification adjustments and is not material to the Company's financial statement presentation. The Company has adopted the amendments of this statement in the first quarter of fiscal 2014. In May 2014, FASB, in conjunction with the International Accounting Standards Board, issued ASU No. 2014-09, "Revenue from Contracts with Customers". The objective of this Update is to significantly enhance comparability and clarify principles of revenue recognition practices across entities, industries, jurisdictions, and capital markets. For a public entity, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The standard can be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption. The Company is currently evaluating the impact of adopting this new guidance on its financial position and results of operations and will adopt the provisions of this statement in the first quarter of fiscal 2018. NOTE 2 — EARNINGS PER SHARE thousands, except share and per share amounts): The following table sets forth the computation of basic and diluted earnings per share for the years ended November 30, (in Numerator: Net income Denominator: 2012 2013 2014 $ 54,578 $ 45,292 $ 67,379 Weighted average shares outstanding Common stock options 46,386,355 46,470,647 46,559,232 10,276 15,914 13,806 Diluted weighted average shares outstanding 46,396,631 46,486,561 46,573,038 Basic and diluted earnings per share $ 1.18 $ 0.97 $ 1.45 Anti-dilutive shares excluded in the computation of diluted earnings per share 231,496 143,656 121,462 NOTE 3 — PROPERTY AND EQUIPMENT Property and equipment consists of the following as of November 30, (in thousands): Land and leasehold improvements $ Buildings, grandstands and motorsports entertainment facilities Furniture and equipment Construction in progress Less accumulated depreciation 2013 2014 246,138 $ 1,520,405 169,979 87,318 2,023,840 746,864 247,883 1,529,904 175,845 245,642 2,199,274 818,084 1,381,190 $ 1,276,976 $ Depreciation expense was approximately $77.8 million, $94.0 million and $90.2 million for the years ended November 30, 2012, 2013 and 2014, respectively. The depreciation expense for the years ended November 30, 2013 and 2014 includes approximately $15.4 million and $11.1 million, respectively, of accelerated depreciation that was recorded due to the shortening the service lives of certain assets associated with DAYTONA Rising and capacity management initiatives. NOTE 4 — RETIREMENTS OF LONG-LIVED ASSETS The Company recorded before-tax charges relating to retirements of long-lived assets during the fiscal years ending November 30, as follows (in thousands): Losses on retirements of long-lived assets $ Less: cash portion of losses on asset retirements Non-cash losses on retirements of long-lived assets $ 11,143 $ 3,088 8,055 $ 16,607 $ 6,584 10,023 $ 10,148 7,504 2,644 2012 2013 2014 The fiscal 2012 retirements are primarily attributable to the ongoing removal of certain assets in connection with the repaving of the track and grandstand enhancements at Phoenix International Raceway (“Phoenix”) and the grandstand enhancements at Kansas and Talladega Superspeedway (“Talladega”). The fiscal 2013 retirements are primarily attributable to the ongoing removal of certain assets in connection with the track repaving at Kansas, as well as guest enhancements at Talladega, Richmond International Raceway (“Richmond”) and certain of the Company's other facilities. ISC // 2014 ANNUAL REPORT // FORM 10-K // 54 53 54 competitors. Ultimately, the promoter retains 65.0 percent of the net cash proceeds from the gross broadcast rights fees NOTE 2 — EARNINGS PER SHARE allocated to the event. The Company's revenues from marketing partnerships are paid in accordance with negotiated contracts, with the identities of partners and the terms of sponsorship changing from time to time. Some of our marketing partnership agreements are for multiple facilities and/or events and include multiple specified elements, such as tickets, hospitality chalets, suites, display space and signage for each included event. The allocation of such marketing partnership revenues between the multiple elements, events and facilities is based on relative selling price. The sponsorship revenue allocated to an event is recognized when the event is conducted. recognized at the time of sale. Revenues and related costs from the sale of merchandise to retail customers, internet sales and direct sales to dealers are Kansas Speedway ("Kansas") and Chicagoland Speedway ("Chicagoland") offer Preferred Access Speedway Seating (“PASS”) agreements, which give purchasers the exclusive right and obligation to purchase season-ticket packages for certain sanctioned racing events annually, under specified terms and conditions. Among the conditions, licensees are required to purchase all season-ticket packages when and as offered each year. PASS agreements automatically terminate without refund should owners not purchase any offered season tickets. Net fees received under PASS agreements are deferred and are amortized into income over the term of the agreements. Long- term deferred income under the PASS agreements totals approximately $6.5 million and $5.5 million at November 30, 2013 and 2014, respectively. ADVERTISING EXPENSE: Advertising costs are expensed as incurred. Advertising expense was approximately $15.3 million, $15.1 million and $16.5 million for the years ended November 30, 2012, 2013 and 2014, respectively. LOSS CONTINGENCIES: Legal and other costs incurred in conjunction with loss contingencies are expensed as incurred. USE OF ESTIMATES: The preparation of financial statements in conformity with U.S. 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 February 2013, the Financial Accounting Standards Board ("FASB") issued ASU No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”. The objective of this Update is to set requirements for presentation for significant items reclassified to net income in their entirety during the period and for items not reclassified to net income in their entirety during the period. For public entities, the amended requirements are effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. This statement only impacts disclosures of reclassification adjustments and is not material to the Company's financial statement presentation. The Company has adopted the amendments of this statement in the first quarter of fiscal 2014. In May 2014, FASB, in conjunction with the International Accounting Standards Board, issued ASU No. 2014-09, "Revenue from Contracts with Customers". The objective of this Update is to significantly enhance comparability and clarify principles of revenue recognition practices across entities, industries, jurisdictions, and capital markets. For a public entity, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. Early application is not permitted. The standard can be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption. The Company is currently evaluating the impact of adopting this new guidance on its financial position and results of operations and will adopt the provisions of this statement in the first quarter of fiscal 2018. The following table sets forth the computation of basic and diluted earnings per share for the years ended November 30, (in thousands, except share and per share amounts): Numerator: Net income Denominator: 2012 2013 2014 $ 54,578 $ 45,292 $ 67,379 Weighted average shares outstanding Common stock options Diluted weighted average shares outstanding 46,386,355 10,276 46,396,631 46,470,647 15,914 46,486,561 46,559,232 13,806 46,573,038 Basic and diluted earnings per share $ 1.18 $ 0.97 $ 1.45 Anti-dilutive shares excluded in the computation of diluted earnings per share 231,496 143,656 121,462 NOTE 3 — PROPERTY AND EQUIPMENT Property and equipment consists of the following as of November 30, (in thousands): Land and leasehold improvements Buildings, grandstands and motorsports entertainment facilities Furniture and equipment Construction in progress Less accumulated depreciation 2013 2014 246,138 $ 1,520,405 169,979 87,318 2,023,840 746,864 1,276,976 $ 247,883 1,529,904 175,845 245,642 2,199,274 818,084 1,381,190 $ $ Depreciation expense was approximately $77.8 million, $94.0 million and $90.2 million for the years ended November 30, 2012, 2013 and 2014, respectively. The depreciation expense for the years ended November 30, 2013 and 2014 includes approximately $15.4 million and $11.1 million, respectively, of accelerated depreciation that was recorded due to the shortening the service lives of certain assets associated with DAYTONA Rising and capacity management initiatives. NOTE 4 — RETIREMENTS OF LONG-LIVED ASSETS The Company recorded before-tax charges relating to retirements of long-lived assets during the fiscal years ending November 30, as follows (in thousands): Losses on retirements of long-lived assets $ Less: cash portion of losses on asset retirements Non-cash losses on retirements of long-lived assets $ 11,143 $ 3,088 8,055 $ 16,607 $ 6,584 10,023 $ 10,148 7,504 2,644 2012 2013 2014 The fiscal 2012 retirements are primarily attributable to the ongoing removal of certain assets in connection with the repaving of the track and grandstand enhancements at Phoenix International Raceway (“Phoenix”) and the grandstand enhancements at Kansas and Talladega Superspeedway (“Talladega”). The fiscal 2013 retirements are primarily attributable to the ongoing removal of certain assets in connection with the track repaving at Kansas, as well as guest enhancements at Talladega, Richmond International Raceway (“Richmond”) and certain of the Company's other facilities. 53 54 ISC // 2014 ANNUAL REPORT // FORM 10-K // 55 The fiscal 2014 retirements are primarily attributable to the removal of assets not fully depreciated in connection with DAYTONA Rising, capacity management initiatives and other capital improvements. Motorsports Authentics NOTE 5 — EQUITY AND OTHER INVESTMENTS Hollywood Casino at Kansas Speedway Kansas Entertainment, LLC, (“Kansas Entertainment”) a 50/50 joint venture of Penn Hollywood Kansas, Inc. (“Penn”), a subsidiary of Penn National Gaming, Inc. and Kansas Speedway Development Corporation (“KSDC”), a wholly owned indirect subsidiary of ISC, operates the Hollywood-themed casino and branded destination entertainment facility, overlooking turn two at Kansas Speedway. Penn is the managing member of Kansas Entertainment and is responsible for the operations of the casino. The Company has accounted for Kansas Entertainment as an equity investment in its financial statements as of November 30, 2014. The Company’s 50.0 percent portion of Kansas Entertainment’s net income was approximately $2.8 million , $9.4 million and $8.9 million for fiscal years 2012, 2013 and 2014, respectively, and is included in equity in net income from equity investments in the Company's consolidated statements of operations. Included in the Company's fiscal 2013 income from equity investment amount is approximately $1.1 million related to a one-time property tax refund. Beginning February 2014, Kansas Entertainment began recording expense equal to 1.0 percent of gross gaming revenue since it did not commence with construction of a hotel by the original deadline. Included in the Company's income from equity investment amounts for fiscal 2014 is approximately $0.6 million expense, respectively, related to this penalty. Distributions from Kansas Entertainment, for the years ended November 30, are as follows (in thousands): Summarized financial information of the Company’s equity investments as of and for the years ended November 30, are as Distribution from profits Distribution in excess of profits Total Distributions 2012 2013 2014 $ $ — $ 11,000 11,000 $ 8,216 $ 13,284 21,500 $ 10,076 11,924 22,000 Subsequent to November 30, 2014, the Company received an additional $5.5 million from Kansas Entertainment. Staten Island Property On August 5, 2013, the Company announced that it sold its 676 acre parcel of property located in Staten Island, New York, to Staten Island Marine Development, LLC (“Marine Development”). Marine Development purchased 100 percent of the outstanding equity membership interests of 380 Development LLC (“380 Development”), a wholly owned indirect subsidiary of ISC and owner of the Staten Island property, for a total sales price of $80.0 million. In addition, the Company previously received approximately $4.2 million for an option provided to the purchaser that is nonrefundable and does not apply to the $80.0 million sales price. The Company received $7.5 million, less closing and other administrative costs, of the sales price at closing. The remaining sales price was financed with the Company holding a secured mortgage interest in 380 Development as well as the underlying property. The mortgage balance bears interest at an annual rate of 7.0 percent. In accordance with the terms of the agreement, the Company has received a principal payment of approximately $6.1 million plus interest on this mortgage balance through November 30, 2014, and will receive the remaining purchase price of $66.4 million, due March 5, 2016. Interest on the remaining mortgage balance is due quarterly, in arrears, and Marine Development is current with all payments through January 2015. Based on the level of Marine Development's initial investment at closing and continuing investment, the Company has accounted for the transaction using the cost recovery method and has deferred the recognition of profit of approximately $1.9 million, and interest totaling approximately $5.6 million at November 30, 2014, until the carrying amount of the property is recovered, which will not be until the final payment is made. The net proceeds from the sale, combined with the mortgage interest and related total cash tax benefit, will provide the Company with approximately $118.0 million in incremental cash flow through the term of the mortgage. ISC // 2014 ANNUAL REPORT // FORM 10-K // 56 55 Prior to January 31, 2014, the Company was partners with Speedway Motorsports, Inc. ("SMI") in a 50/50 joint venture, SMISC, LLC, which, through its wholly owned subsidiary Motorsports Authentics, LLC conducts business under the name Motorsports Authentics (“MA”). MA designs, promotes, markets and distributes motorsports licensed merchandise. On January 31, 2014, SMI abandoned its interest and rights in SMISC, LLC, consequently bringing the Company's ownership to 100.0 percent. MA's operations are included in the Company's consolidated operations subsequent to the date of SMI's abandonment. Prior to January 31, 2014, MA was accounted for as an equity investment in the Company's financial statements. As a result of SMI's abandonment of their interest in SMISC, LLC, the Company recorded other income of approximately $5.4 million, representing the fair value of MA, over the carrying value, as of January 31, 2014. The fair value was based on a discounted cash flow analysis using level 3 inputs. Most of the fair value represents the value of MA's working capital and the fair value was not sensitive to assumptions used in the discounted cash flow analysis. In addition, the Company recognized tax benefits of approximately $4.0 million, representing the tax benefit associated with various operating loss carryforwards of MA that are expected to be realized in its consolidated tax filings in the future and certain other tax filing positions of SMISC, LLC. In November 2014, the Company recognized an impairment of a long-lived intangible asset of approximately $0.6 million, which is included in non-cash losses on retirements of long-lived assets. MA's operating income contribution, subsequent to consolidation, was immaterial, and is included in the Motorsports Event segment. Prior to the SMI abandonment of SMISC, LLC, no equity income was recognized in prior periods, by the Company, as MA operated at breakeven. follows (in thousands): Current assets Noncurrent assets Current liabilities Noncurrent liabilities Net sales Gross profit Operating income Net income 2012 2013 2014 $ 46,054 $ 43,062 $ 258,239 22,379 1,819 144,715 63,516 8,914 9,266 238,772 21,510 1,242 170,721 82,838 21,770 21,986 33,349 215,226 19,273 — 141,849 72,031 20,153 20,153 NOTE 6 — GOODWILL AND INTANGIBLE ASSETS The gross carrying value and accumulated amortization of the major classes of intangible assets relating to the Motorsports Event segment as of November 30, are as follows (in thousands): Amortized intangible assets: Food, beverage and merchandise contracts $ Total amortized intangible assets Non-amortized intangible assets: NASCAR — sanction agreements Other Other Total non-amortized intangible assets Total intangible assets $ 56 Gross Carrying Amount 2013 Accumulated Amortization Net Carrying Amount 10 $ 92 102 177,813 793 178,606 178,708 $ 8 $ 72 80 — — — 80 $ 2 20 22 177,813 793 178,606 178,628 The fiscal 2014 retirements are primarily attributable to the removal of assets not fully depreciated in connection with Motorsports Authentics DAYTONA Rising, capacity management initiatives and other capital improvements. NOTE 5 — EQUITY AND OTHER INVESTMENTS Hollywood Casino at Kansas Speedway Kansas Entertainment, LLC, (“Kansas Entertainment”) a 50/50 joint venture of Penn Hollywood Kansas, Inc. (“Penn”), a subsidiary of Penn National Gaming, Inc. and Kansas Speedway Development Corporation (“KSDC”), a wholly owned indirect subsidiary of ISC, operates the Hollywood-themed casino and branded destination entertainment facility, overlooking turn two at Kansas Speedway. Penn is the managing member of Kansas Entertainment and is responsible for the operations of the casino. The Company has accounted for Kansas Entertainment as an equity investment in its financial statements as of November 30, 2014. The Company’s 50.0 percent portion of Kansas Entertainment’s net income was approximately $2.8 million , $9.4 million and $8.9 million for fiscal years 2012, 2013 and 2014, respectively, and is included in equity in net income from equity investments in the Company's consolidated statements of operations. Included in the Company's fiscal 2013 income from equity investment amount is approximately $1.1 million related to a one-time property tax refund. Beginning February 2014, Kansas Entertainment began recording expense equal to 1.0 percent of gross gaming revenue since it did not commence with construction of a hotel by the original deadline. Included in the Company's income from equity investment amounts for fiscal 2014 is approximately $0.6 million expense, respectively, related to this penalty. Distributions from Kansas Entertainment, for the years ended November 30, are as follows (in thousands): 2012 2013 2014 $ $ — $ 11,000 11,000 $ 8,216 $ 13,284 21,500 $ 10,076 11,924 22,000 Distribution from profits Distribution in excess of profits Total Distributions Staten Island Property Subsequent to November 30, 2014, the Company received an additional $5.5 million from Kansas Entertainment. On August 5, 2013, the Company announced that it sold its 676 acre parcel of property located in Staten Island, New York, to Staten Island Marine Development, LLC (“Marine Development”). Marine Development purchased 100 percent of the outstanding equity membership interests of 380 Development LLC (“380 Development”), a wholly owned indirect subsidiary of ISC and owner of the Staten Island property, for a total sales price of $80.0 million. In addition, the Company previously received approximately $4.2 million for an option provided to the purchaser that is nonrefundable and does not apply to the $80.0 million sales price. The Company received $7.5 million, less closing and other administrative costs, of the sales price at closing. The remaining sales price was financed with the Company holding a secured mortgage interest in 380 Development as well as the underlying property. The mortgage balance bears interest at an annual rate of 7.0 percent. In accordance with the terms of the agreement, the Company has received a principal payment of approximately $6.1 million plus interest on this mortgage balance through November 30, 2014, and will receive the remaining purchase price of $66.4 million, due March 5, 2016. Interest on the remaining mortgage balance is due quarterly, in arrears, and Marine Development is current with all payments through January 2015. Based on the level of Marine Development's initial investment at closing and continuing investment, the Company has accounted for the transaction using the cost recovery method and has deferred the recognition of profit of approximately $1.9 million, and interest totaling approximately $5.6 million at November 30, 2014, until the carrying amount of the property is recovered, which will not be until the final payment is made. The net proceeds from the sale, combined with the mortgage interest and related total cash tax benefit, will provide the Company with approximately $118.0 million in incremental cash flow through the term of the mortgage. 55 Prior to January 31, 2014, the Company was partners with Speedway Motorsports, Inc. ("SMI") in a 50/50 joint venture, SMISC, LLC, which, through its wholly owned subsidiary Motorsports Authentics, LLC conducts business under the name Motorsports Authentics (“MA”). MA designs, promotes, markets and distributes motorsports licensed merchandise. On January 31, 2014, SMI abandoned its interest and rights in SMISC, LLC, consequently bringing the Company's ownership to 100.0 percent. MA's operations are included in the Company's consolidated operations subsequent to the date of SMI's abandonment. Prior to January 31, 2014, MA was accounted for as an equity investment in the Company's financial statements. As a result of SMI's abandonment of their interest in SMISC, LLC, the Company recorded other income of approximately $5.4 million, representing the fair value of MA, over the carrying value, as of January 31, 2014. The fair value was based on a discounted cash flow analysis using level 3 inputs. Most of the fair value represents the value of MA's working capital and the fair value was not sensitive to assumptions used in the discounted cash flow analysis. In addition, the Company recognized tax benefits of approximately $4.0 million, representing the tax benefit associated with various operating loss carryforwards of MA that are expected to be realized in its consolidated tax filings in the future and certain other tax filing positions of SMISC, LLC. In November 2014, the Company recognized an impairment of a long-lived intangible asset of approximately $0.6 million, which is included in non-cash losses on retirements of long-lived assets. MA's operating income contribution, subsequent to consolidation, was immaterial, and is included in the Motorsports Event segment. Prior to the SMI abandonment of SMISC, LLC, no equity income was recognized in prior periods, by the Company, as MA operated at breakeven. Summarized financial information of the Company’s equity investments as of and for the years ended November 30, are as follows (in thousands): Current assets Noncurrent assets Current liabilities Noncurrent liabilities Net sales Gross profit Operating income Net income $ 2012 2013 2014 46,054 $ 258,239 22,379 1,819 144,715 63,516 8,914 9,266 43,062 $ 238,772 21,510 1,242 170,721 82,838 21,770 21,986 33,349 215,226 19,273 — 141,849 72,031 20,153 20,153 NOTE 6 — GOODWILL AND INTANGIBLE ASSETS The gross carrying value and accumulated amortization of the major classes of intangible assets relating to the Motorsports Event segment as of November 30, are as follows (in thousands): Amortized intangible assets: Food, beverage and merchandise contracts Other Total amortized intangible assets Non-amortized intangible assets: NASCAR — sanction agreements Other Total non-amortized intangible assets Total intangible assets Gross Carrying Amount 2013 Accumulated Amortization Net Carrying Amount $ $ 10 $ 92 102 177,813 793 178,606 178,708 $ 8 $ 72 80 — — — 80 $ 2 20 22 177,813 793 178,606 178,628 56 ISC // 2014 ANNUAL REPORT // FORM 10-K // 57 Amortized intangible assets: Food, beverage and merchandise contracts Other Total amortized intangible assets Non-amortized intangible assets: NASCAR — sanction agreements Other Total non-amortized intangible assets Total intangible assets Gross Carrying Amount 2014 Accumulated Amortization Net Carrying Amount $ $ 10 $ 109 119 177,813 793 178,606 178,725 $ 9 $ 87 96 — — — 96 $ 1 22 23 177,813 793 178,606 178,629 The following table presents current and expected amortization expense of the existing intangible assets as of November 30, for each of the following periods (in thousands): For the year ending November 30: 2015 2016 2017 2018 2019 Thereafter Net premium Total Schedule of Payments (in thousands) $ $ 3,435 3,408 3,738 4,091 4,522 253,069 272,263 (517 ) 271,746 Amortization expense for the year ended November 30, 2014 Estimated amortization expense for the year ending November 30: $ 2015 2016 2017 2018 2019 16 7 3 1 1 1 There were no changes in the carrying value of goodwill during fiscal 2013 and 2014. NOTE 7 — LONG-TERM DEBT Long-term debt consists of the following as of November 30, (in thousands): 4.63 percent Senior Notes 3.95 percent Senior Notes 4.82 percent Revenue Bonds 6.25 percent Term Loan TIF bond debt service funding commitment Revolving Credit Facility Less: current portion 2013 2014 $ $ 65,000 $ 100,000 662 49,948 58,877 — 274,487 2,807 271,680 $ 65,000 100,000 339 49,524 56,883 — 271,746 3,435 268,311 ISC // 2014 ANNUAL REPORT // FORM 10-K // 58 57 The Company's $65.0 million principal amount of senior unsecured notes (“4.63 percent Senior Notes”) bear interest at 4.63 percent and are due January 2021, require semi-annual interest payments on January 18 and July 18 through their maturity. The 4.63 percent Senior Notes may be redeemed in whole or in part, at the Company’s option, at any time or from time to time at redemption prices as defined in the indenture. Certain of the Company’s wholly owned domestic subsidiaries are guarantors of the 4.63 percent Senior Notes. Certain restrictive covenants of the 4.63 percent Senior Notes require that the Company's ratio of its Consolidated Funded Indebtedness to its Consolidated EBITDA ("leverage ratio") does not exceed 3.50 to 1.0, and its Consolidated EBITDA to Consolidated Interest Expense ("interest coverage ratio") is not less than 2.0 to 1.0. In addition the Company may not permit the aggregate of certain Priority Debt to exceed 15.0 percent of its Consolidated Net Worth. The 4.63 percent Senior Notes contain various other affirmative and negative restrictive covenants including, among others, limitations on liens, sales of assets, mergers and consolidations and certain transactions with affiliates. As of November 30, 2014, the Company was in compliance with its various restrictive covenants. At November 30, 2014, outstanding principal on the 4.63 percent Senior Notes was approximately $65.0 million. The Company's $100.0 million principal amount of senior unsecured notes (“3.95 percent Senior Notes”) bear interest at 3.95 percent and are due September 2024. The 3.95 percent Senior Notes require semi-annual interest payments on March 13 and September 13 through their maturity. The 3.95 percent Senior Notes may be redeemed in whole or in part, at our option, at any time or from time to time at redemption prices as defined in the indenture. Certain of the Company's wholly owned domestic subsidiaries are guarantors of the 3.95 percent Senior Notes. Certain restrictive covenants of the 3.95 percent Senior Notes require that the Company's leverage ratio does not exceed 3.50 to 1.0, and its interest coverage ratio is not less than 2.0 to 1.0. In addition the Company may not permit the aggregate of certain Priority Debt to exceed 15.0 percent of its Consolidated Net Worth. The 3.95 percent Senior Notes contain various other affirmative and negative restrictive covenants including, among others, limitations on liens, sales of assets, mergers and consolidations and certain transactions with affiliates. As of November 30, 2014, the Company was in compliance with its various restrictive covenants. At November 30, 2014, outstanding principal on the 3.95 percent Senior Notes was approximately $100.0 million. Debt associated with the Company's wholly owned subsidiary, Chicagoland Speedway, LLC, which owns and operates Chicagoland and Route 66 Raceway, consists of revenue bonds payable (“4.82 percent Revenue Bonds”) consisting of economic development revenue bonds issued by the City of Joliet, Illinois to finance certain land improvements. The 4.82 percent Revenue Bonds have an interest rate of 4.82 percent and a monthly payment of approximately $29,000 principal and interest. At November 30, 2014, outstanding principal on the 4.82 percent Revenue Bonds was approximately $0.3 million. The term loan (“6.25 percent Term Loan”), related to the Company’s International Motorsports Center, has a 25 year term due October 2034, an interest rate of 6.25 percent, and a current monthly payment of approximately $292,000 principal and interest. At November 30, 2014, the outstanding principal on the 6.25 percent Term Loan was approximately $49.5 million. At November 30, 2014, in connection with the financing of Kansas Speedway, totaled approximately $56.9 million, net of the unamortized discount, which is comprised of a $7.7 million principal amount, 6.15 percent term bond due December 1, 2017 and a $49.7 million principal amount, 6.75 percent term bond due December 1, 2027. The TIF bonds are repaid by the Unified 58 Gross Carrying Amount 2014 Accumulated Amortization Net Carrying Amount For the year ending November 30: Schedule of Payments (in thousands) Amortized intangible assets: Food, beverage and merchandise contracts $ Total amortized intangible assets Non-amortized intangible assets: NASCAR — sanction agreements Other Other Total non-amortized intangible assets Total intangible assets $ 10 $ 109 119 177,813 793 178,606 178,725 $ The following table presents current and expected amortization expense of the existing intangible assets as of November 30, for each of the following periods (in thousands): Amortization expense for the year ended November 30, 2014 Estimated amortization expense for the year ending November 30: 2015 2016 2017 2018 2019 There were no changes in the carrying value of goodwill during fiscal 2013 and 2014. NOTE 7 — LONG-TERM DEBT Long-term debt consists of the following as of November 30, (in thousands): 9 $ 87 96 — — — 96 $ $ 1 22 23 177,813 793 178,606 178,629 16 7 3 1 1 1 65,000 100,000 339 49,524 56,883 — 271,746 3,435 268,311 2013 2014 $ 65,000 $ 100,000 662 49,948 58,877 — 274,487 2,807 $ 271,680 $ 4.63 percent Senior Notes 3.95 percent Senior Notes 4.82 percent Revenue Bonds 6.25 percent Term Loan TIF bond debt service funding commitment Revolving Credit Facility Less: current portion 57 2015 2016 2017 2018 2019 Thereafter Net premium Total $ $ 3,435 3,408 3,738 4,091 4,522 253,069 272,263 (517 ) 271,746 The Company's $65.0 million principal amount of senior unsecured notes (“4.63 percent Senior Notes”) bear interest at 4.63 percent and are due January 2021, require semi-annual interest payments on January 18 and July 18 through their maturity. The 4.63 percent Senior Notes may be redeemed in whole or in part, at the Company’s option, at any time or from time to time at redemption prices as defined in the indenture. Certain of the Company’s wholly owned domestic subsidiaries are guarantors of the 4.63 percent Senior Notes. Certain restrictive covenants of the 4.63 percent Senior Notes require that the Company's ratio of its Consolidated Funded Indebtedness to its Consolidated EBITDA ("leverage ratio") does not exceed 3.50 to 1.0, and its Consolidated EBITDA to Consolidated Interest Expense ("interest coverage ratio") is not less than 2.0 to 1.0. In addition the Company may not permit the aggregate of certain Priority Debt to exceed 15.0 percent of its Consolidated Net Worth. The 4.63 percent Senior Notes contain various other affirmative and negative restrictive covenants including, among others, limitations on liens, sales of assets, mergers and consolidations and certain transactions with affiliates. As of November 30, 2014, the Company was in compliance with its various restrictive covenants. At November 30, 2014, outstanding principal on the 4.63 percent Senior Notes was approximately $65.0 million. The Company's $100.0 million principal amount of senior unsecured notes (“3.95 percent Senior Notes”) bear interest at 3.95 percent and are due September 2024. The 3.95 percent Senior Notes require semi-annual interest payments on March 13 and September 13 through their maturity. The 3.95 percent Senior Notes may be redeemed in whole or in part, at our option, at any time or from time to time at redemption prices as defined in the indenture. Certain of the Company's wholly owned domestic subsidiaries are guarantors of the 3.95 percent Senior Notes. Certain restrictive covenants of the 3.95 percent Senior Notes require that the Company's leverage ratio does not exceed 3.50 to 1.0, and its interest coverage ratio is not less than 2.0 to 1.0. In addition the Company may not permit the aggregate of certain Priority Debt to exceed 15.0 percent of its Consolidated Net Worth. The 3.95 percent Senior Notes contain various other affirmative and negative restrictive covenants including, among others, limitations on liens, sales of assets, mergers and consolidations and certain transactions with affiliates. As of November 30, 2014, the Company was in compliance with its various restrictive covenants. At November 30, 2014, outstanding principal on the 3.95 percent Senior Notes was approximately $100.0 million. Debt associated with the Company's wholly owned subsidiary, Chicagoland Speedway, LLC, which owns and operates Chicagoland and Route 66 Raceway, consists of revenue bonds payable (“4.82 percent Revenue Bonds”) consisting of economic development revenue bonds issued by the City of Joliet, Illinois to finance certain land improvements. The 4.82 percent Revenue Bonds have an interest rate of 4.82 percent and a monthly payment of approximately $29,000 principal and interest. At November 30, 2014, outstanding principal on the 4.82 percent Revenue Bonds was approximately $0.3 million. The term loan (“6.25 percent Term Loan”), related to the Company’s International Motorsports Center, has a 25 year term due October 2034, an interest rate of 6.25 percent, and a current monthly payment of approximately $292,000 principal and interest. At November 30, 2014, the outstanding principal on the 6.25 percent Term Loan was approximately $49.5 million. At November 30, 2014, in connection with the financing of Kansas Speedway, totaled approximately $56.9 million, net of the unamortized discount, which is comprised of a $7.7 million principal amount, 6.15 percent term bond due December 1, 2017 and a $49.7 million principal amount, 6.75 percent term bond due December 1, 2027. The TIF bonds are repaid by the Unified 58 ISC // 2014 ANNUAL REPORT // FORM 10-K // 59 Government of Wyandotte County/Kansas City, Kansas (“Unified Government”) with payments made in lieu of property taxes (“Funding Commitment”) by the Company’s wholly owned subsidiary, Kansas Speedway Corporation (“KSC”). Principal (mandatory redemption) payments per the Funding Commitment are payable by KSC on October 1 of each year. The semi- annual interest component of the Funding Commitment is payable on April 1 and October 1 of each year. KSC granted a mortgage and security interest in the Kansas project for its Funding Commitment obligation. The Company's $300.0 million revolving credit facility (“2012 Credit Facility”) contains a feature that allows the Company to increase the credit facility to a total of $500.0 million, subject to certain conditions, provides for separate sub-limits of $25.0 million for standby letters of credit and $10.0 million for swing line loans. The 2012 Credit Facility is scheduled to mature in November 2017. Interest accrues, at the Company's option, at either LIBOR plus 100.0 — 162.5 basis points or a base rate loan at the highest of i) Wells Fargo Bank's prime lending rate, ii) the Federal Funds rate, as in effect from time to time, plus 0.5 percent, and iii) one month LIBOR plus 1.0 percent. The 2012 Credit Facility also contains a commitment fee ranging from 0.125 percent to 0.225 percent of unused amounts available for borrowing. The interest rate margin on the LIBOR borrowings and commitment fee are variable depending on the better of the Company's debt rating as determined by specified rating agencies or its leverage ratio. Certain of the Company's wholly owned domestic subsidiaries are guarantors on the 2012 Credit Facility. The 2012 Credit Facility requires that the Company's leverage ratio does not exceed 3.50 to 1.0 (4.0 to 1.0 for the four quarters ending after any Permitted Acquisition), and its interest coverage ratio is not less than 2.5 to 1.0. The 2012 Credit Facility also contains various other affirmative and negative restrictive covenants including, among others, limitations on indebtedness, investments, sales of assets, certain transactions with affiliates, entering into certain restrictive agreements and making certain restricted payments as detailed in the agreement. As of November 30, 2014, the Company was in compliance with its various restrictive covenants. At November 30, 2014, the Company had no outstanding borrowings under the 2012 Credit Facility. At November 30, 2014, the Company has approximately $4.0 million, net of tax, deferred in accumulated other comprehensive loss associated with a terminated interest rate swap which is being amortized as interest expense over life of the 4.63 percent Senior Notes (see above). The Company expects to recognize approximately $0.7 million, net of tax, of this balance during the next 12 months in the consolidated statement of operations. Total interest expense incurred by the Company for the years ended November 30, are as follows (in thousands): The components of the net deferred tax assets (liabilities) at November 30, are as follows (in thousands): Interest expense Less: capitalized interest Net interest expense 2012 2013 2014 $ $ 17,220 $ 3,719 13,501 $ 16,576 $ 1,355 15,221 $ 16,479 7,297 9,182 Financing costs of approximately $4.4 million and $3.7 million, net of accumulated amortization, have been deferred and are included in other assets at November 30, 2013 and 2014, respectively. These costs are being amortized on a straight line method, which approximates the effective yield method, over the life of the related financing. NOTE 8 — 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. Significant components of the provision for income taxes for the years ended November 30, are as follows (in thousands): Current tax expense (benefit): Deferred tax expense (benefit): Federal State Federal State Foreign 2012 2013 2014 $ 18,466 $ 1,003 (8,008 ) $ (220 ) 8,608 3,881 (305 ) 33,235 2,777 — Provision for income taxes $ 31,653 $ 27,784 $ The reconciliation of income tax expense computed at the federal statutory tax rates to income tax expense from continuing operations for the years ended November 30, is as follows (percent of pre-tax income): 42,243 3,336 (13,450 ) 1,104 — 33,233 35.0 % 3.8 (5.9 ) — — 0.1 33.0 % 13,518 3,313 4,649 3,556 4,077 895 30,008 (7,832 ) 22,176 (369,033 ) (4,285 ) (345 ) (373,663 ) (351,487 ) 2,789 (354,276 ) (351,487 ) 2012 2013 2014 35.0 % 4.5 — (2.7 ) (0.6 ) 0.5 36.7 % 35.0 % 4.2 — — — (1.2 ) 38.0 % 2013 2014 $ 9,919 $ 3,684 3,754 3,075 4,749 901 26,082 (1,363 ) 24,719 (381,144 ) (6,620 ) (364 ) (388,128 ) (363,409 ) $ 3,122 $ (366,531 ) (363,409 ) $ $ $ $ 60 Income tax computed at federal statutory rates State income taxes, net of federal tax benefit MA abandonment benefit Valuation allowance State tax credits, net of federal tax benefit Other, net Loss carryforwards Deferred revenues Accruals Compensation related Interest Other Deferred tax assets Valuation allowance Deferred tax assets, net of valuation allowance Amortization and depreciation Equity investment Other Deferred tax liabilities Net deferred tax liabilities Deferred tax assets — current Deferred tax liabilities — noncurrent Net deferred tax liabilities ISC // 2014 ANNUAL REPORT // FORM 10-K // 60 59 (“Funding Commitment”) by the Company’s wholly owned subsidiary, Kansas Speedway Corporation (“KSC”). Principal (mandatory redemption) payments per the Funding Commitment are payable by KSC on October 1 of each year. The semi- annual interest component of the Funding Commitment is payable on April 1 and October 1 of each year. KSC granted a mortgage and security interest in the Kansas project for its Funding Commitment obligation. The Company's $300.0 million revolving credit facility (“2012 Credit Facility”) contains a feature that allows the Company to increase the credit facility to a total of $500.0 million, subject to certain conditions, provides for separate sub-limits of $25.0 million for standby letters of credit and $10.0 million for swing line loans. The 2012 Credit Facility is scheduled to mature in November 2017. Interest accrues, at the Company's option, at either LIBOR plus 100.0 — 162.5 basis points or a time, plus 0.5 percent, and iii) one month LIBOR plus 1.0 percent. The 2012 Credit Facility also contains a commitment fee ranging from 0.125 percent to 0.225 percent of unused amounts available for borrowing. The interest rate margin on the LIBOR borrowings and commitment fee are variable depending on the better of the Company's debt rating as determined by specified rating agencies or its leverage ratio. Certain of the Company's wholly owned domestic subsidiaries are guarantors on the 2012 Credit Facility. The 2012 Credit Facility requires that the Company's leverage ratio does not exceed 3.50 to 1.0 (4.0 to 1.0 for the four quarters ending after any Permitted Acquisition), and its interest coverage ratio is not less than 2.5 to 1.0. The 2012 Credit Facility also contains various other affirmative and negative restrictive covenants including, among others, limitations on indebtedness, investments, sales of assets, certain transactions with affiliates, entering into certain restrictive agreements and making certain restricted payments as detailed in the agreement. As of November 30, 2014, the Company was in compliance with its various restrictive covenants. At November 30, 2014, the Company had no outstanding borrowings under the 2012 Credit Facility. Government of Wyandotte County/Kansas City, Kansas (“Unified Government”) with payments made in lieu of property taxes NOTE 8 — 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. Significant components of the provision for income taxes for the years ended November 30, are as follows (in thousands): base rate loan at the highest of i) Wells Fargo Bank's prime lending rate, ii) the Federal Funds rate, as in effect from time to Deferred tax expense (benefit): Current tax expense (benefit): Federal State Federal State Foreign Provision for income taxes 2012 2013 2014 $ $ 18,466 $ 1,003 8,608 3,881 (305 ) 31,653 $ (8,008 ) $ (220 ) 33,235 2,777 — 27,784 $ 42,243 3,336 (13,450 ) 1,104 — 33,233 At November 30, 2014, the Company has approximately $4.0 million, net of tax, deferred in accumulated other comprehensive Valuation allowance loss associated with a terminated interest rate swap which is being amortized as interest expense over life of the 4.63 percent Senior Notes (see above). The Company expects to recognize approximately $0.7 million, net of tax, of this balance during the State tax credits, net of federal tax benefit Other, net next 12 months in the consolidated statement of operations. Income tax computed at federal statutory rates State income taxes, net of federal tax benefit MA abandonment benefit 2012 2013 2014 35.0 % 4.5 — (2.7 ) (0.6 ) 0.5 36.7 % 35.0 % 4.2 — — — (1.2 ) 38.0 % 35.0 % 3.8 (5.9 ) — — 0.1 33.0 % Total interest expense incurred by the Company for the years ended November 30, are as follows (in thousands): The components of the net deferred tax assets (liabilities) at November 30, are as follows (in thousands): The reconciliation of income tax expense computed at the federal statutory tax rates to income tax expense from continuing operations for the years ended November 30, is as follows (percent of pre-tax income): Interest expense Less: capitalized interest Net interest expense 2012 2013 2014 $ $ 17,220 $ 3,719 13,501 $ 16,576 $ 1,355 15,221 $ 16,479 7,297 9,182 Financing costs of approximately $4.4 million and $3.7 million, net of accumulated amortization, have been deferred and are included in other assets at November 30, 2013 and 2014, respectively. These costs are being amortized on a straight line method, which approximates the effective yield method, over the life of the related financing. Loss carryforwards Deferred revenues Accruals Compensation related Interest Other Deferred tax assets Valuation allowance Deferred tax assets, net of valuation allowance Amortization and depreciation Equity investment Other Deferred tax liabilities Net deferred tax liabilities Deferred tax assets — current Deferred tax liabilities — noncurrent Net deferred tax liabilities 2013 2014 $ $ $ $ 9,919 $ 3,684 3,754 3,075 4,749 901 26,082 (1,363 ) 24,719 (381,144 ) (6,620 ) (364 ) (388,128 ) (363,409 ) $ 3,122 $ (366,531 ) (363,409 ) $ 13,518 3,313 4,649 3,556 4,077 895 30,008 (7,832 ) 22,176 (369,033 ) (4,285 ) (345 ) (373,663 ) (351,487 ) 2,789 (354,276 ) (351,487 ) 59 60 ISC // 2014 ANNUAL REPORT // FORM 10-K // 61 The increase in the valuation allowance at November 30, 2014 is primarily a result of the consolidation of MA and related various state loss carryforwards for which they carried a full valuation allowance. At November 30, 2014 the Company has deferred tax assets related to these and other various state loss carryforwards totaling approximately $13.5 million that expire in varying amounts beginning in fiscal 2019. The valuation allowance has been provided due to the uncertainty regarding the realization of state deferred tax assets associated with these loss carryforwards. In evaluating the Company’s ability to recover its deferred income tax assets it considers all available positive and negative evidence, including operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction by jurisdiction basis. Federal returns for fiscal years 2010 through 2013 remain open and subject to examination by the Internal Revenue Service. The Company files and remits state income taxes in various states where the Company has determined it is required to file state income taxes. The Company’s filings with those states remain open for audit for the fiscal years 2009 through 2013. A reconciliation of the beginning and ending amount of unrecognized tax liability is as follows (in thousands): Balance at December 1, 2013 Additions based on tax positions related to the current year Additions for tax positions of prior years Reductions for tax positions of prior years Balance at November 30, 2014 $ $ 430 — — (31 ) 399 The reduction in the valuation allowance associated with the wind-up of certain Canadian business operations is the principal cause of the decreased effective income tax rate as compared to the statutory income tax rate, for the fiscal year ended November 30, 2012. Certain state settlements are the principal cause of the decreased effective income tax rate as compared to the statutory income tax rate, for the fiscal year ended November 30, 2013. The principal causes of the decreased income tax rate for the fiscal year ended November 30, 2014 are the tax treatment related to the other income recognized as a result of SMI's abandonment of their interest in SMISC, LLC on January 31, 2014, including the related tax benefits associated with various operating loss and other carryforwards of MA and certain tax filing positions of SMISC, LLC totaling approximately $4.0 million along with certain state income tax adjustments. As a result of the above items, the Company’s effective income tax rate decreased from the statutory income rate to approximately 36.7 percent, 38.0 percent and 33.0 percent for the fiscal years ended November 30, 2012, 2013 and 2014, respectively. Also of note, while not impacting the combined current and deferred income tax expense and related income tax rate during the fiscal year ended November 30, 2014, as compared to the prior fiscal year, the tax benefit realized in fiscal 2013 attributable to the aforementioned sale of the Company's Staten Island property, as well as the effect of the December 2013 expiration of certain tax legislation impacting depreciation deductions contributed substantially to increased current income taxes paid during the fiscal year ended November 30, 2014 totaling approximately $51.3 million as compared to approximately $18.1 million during fiscal 2013. In addition this overall impact to the current fiscal year tax depreciation deduction substantially contributed to the overall reduction of approximately $12.3 million in our long-term deferred income tax liabilities at November 30, 2014 as compared to November 30, 2013. In December 2014, Congress passed the Tax Increase Prevention Act which included a retroactive renewal back to January 1, 2014, of the previously expired tax legislation. The impact of this retroactive tax legislation will not affect the Company's fiscal 2015 effective tax rate, but will reduce related income tax payments. ISC // 2014 ANNUAL REPORT // FORM 10-K // 62 61 NOTE 9 — CAPITAL STOCK The Company’s authorized capital includes 80.0 million shares of Class A Common Stock, par value $.01 (“Class A Common Stock”), 40.0 million shares of Class B Common Stock, par value $.01 (“Class B Common Stock”), and 1.0 million shares of Preferred Stock, par value $.01 (“Preferred Stock”). The shares of Class A Common Stock and Class B Common Stock are identical in all respects, except for voting rights 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 there from, 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 10.0 percent 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. No shares of Preferred Stock are outstanding. 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. Stock Purchase Plan The Company has a share repurchase program (“Stock Purchase Plan”) under which it is authorized to purchase up to $330.0 million of its outstanding Class A common shares. The timing and amount of any shares repurchased under the Stock Purchase Plan will depend on a variety of factors, including price, corporate and regulatory requirements, capital availability and other market conditions. The Stock Purchase Plan may be suspended or discontinued at any time without prior notice. No shares have been or will be knowingly purchased from Company insiders or their affiliates. Since inception of the Stock Purchase Plan through November 30, 2014, the Company has purchased 7,063,962 shares of its Class A common shares, for a total of approximately $268.3 million. There were no purchases of the Company's Class A shares during fiscal 2013 or 2014. Transactions occur in open market purchases and pursuant to a trading plan under Rule 10b5-1. At November 30, 2014, the Company has approximately $61.7 million remaining repurchase authority under the current Stock Purchase Plan. NOTE 10 — COMMITMENTS AND CONTINGENCIES International Speedway Corporation has a salary incentive plan (the “ISC Plan”) designed to qualify under Section 401(k) of the Internal Revenue Code. Employees of International Speedway Corporation and certain participating subsidiaries who have completed one month of continuous service are eligible to participate in the ISC Plan. After twelve months of continuous service, 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 percent vested upon entrance to the ISC Plan. The contribution expense for the ISC Plan was approximately $1.4 million, $1.4 million and $1.6 million for the years ended November 30, 2012, 2013 and 2014, respectively. The estimated cost to complete approved projects and current construction in progress at November 30, 2014 at the Company’s existing facilities is approximately $172.3 million. In October 2002, the Unified Government issued subordinate sales tax special obligation revenue bonds (“2002 STAR Bonds”) totaling approximately $6.3 million to reimburse the Company for certain construction already completed on the second phase 62 The increase in the valuation allowance at November 30, 2014 is primarily a result of the consolidation of MA and related NOTE 9 — CAPITAL STOCK various state loss carryforwards for which they carried a full valuation allowance. At November 30, 2014 the Company has deferred tax assets related to these and other various state loss carryforwards totaling approximately $13.5 million that expire in varying amounts beginning in fiscal 2019. The valuation allowance has been provided due to the uncertainty regarding the realization of state deferred tax assets associated with these loss carryforwards. In evaluating the Company’s ability to recover its deferred income tax assets it considers all available positive and negative evidence, including operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction by jurisdiction basis. Federal returns for fiscal years 2010 through 2013 remain open and subject to examination by the Internal Revenue Service. The Company files and remits state income taxes in various states where the Company has determined it is required to file state income taxes. The Company’s filings with those states remain open for audit for the fiscal years 2009 through 2013. A reconciliation of the beginning and ending amount of unrecognized tax liability is as follows (in thousands): Balance at December 1, 2013 Additions based on tax positions related to the current year Additions for tax positions of prior years Reductions for tax positions of prior years Balance at November 30, 2014 $ $ 430 — — (31 ) 399 The reduction in the valuation allowance associated with the wind-up of certain Canadian business operations is the principal cause of the decreased effective income tax rate as compared to the statutory income tax rate, for the fiscal year ended November 30, 2012. Certain state settlements are the principal cause of the decreased effective income tax rate as compared to the statutory income tax rate, for the fiscal year ended November 30, 2013. The principal causes of the decreased income tax rate for the fiscal year ended November 30, 2014 are the tax treatment related to the other income recognized as a result of SMI's abandonment of their interest in SMISC, LLC on January 31, 2014, including the related tax benefits associated with various operating loss and other carryforwards of MA and certain tax filing positions of SMISC, LLC totaling approximately $4.0 million along with certain state income tax adjustments. As a result of the above items, the Company’s effective income tax rate decreased from the statutory income rate to approximately 36.7 percent, 38.0 percent and 33.0 percent for the fiscal years ended November 30, 2012, 2013 and 2014, respectively. Also of note, while not impacting the combined current and deferred income tax expense and related income tax rate during the fiscal year ended November 30, 2014, as compared to the prior fiscal year, the tax benefit realized in fiscal 2013 attributable to the aforementioned sale of the Company's Staten Island property, as well as the effect of the December 2013 expiration of certain tax legislation impacting depreciation deductions contributed substantially to increased current income taxes paid during the fiscal year ended November 30, 2014 totaling approximately $51.3 million as compared to approximately $18.1 million during fiscal 2013. In addition this overall impact to the current fiscal year tax depreciation deduction substantially contributed to the overall reduction of approximately $12.3 million in our long-term deferred income tax liabilities at November 30, 2014 as compared to November 30, 2013. In December 2014, Congress passed the Tax Increase Prevention Act which included a retroactive renewal back to January 1, 2014, of the previously expired tax legislation. The impact of this retroactive tax legislation will not affect the Company's fiscal 2015 effective tax rate, but will reduce related income tax payments. The Company’s authorized capital includes 80.0 million shares of Class A Common Stock, par value $.01 (“Class A Common Stock”), 40.0 million shares of Class B Common Stock, par value $.01 (“Class B Common Stock”), and 1.0 million shares of Preferred Stock, par value $.01 (“Preferred Stock”). The shares of Class A Common Stock and Class B Common Stock are identical in all respects, except for voting rights 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 there from, 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 10.0 percent 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. No shares of Preferred Stock are outstanding. 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. Stock Purchase Plan The Company has a share repurchase program (“Stock Purchase Plan”) under which it is authorized to purchase up to $330.0 million of its outstanding Class A common shares. The timing and amount of any shares repurchased under the Stock Purchase Plan will depend on a variety of factors, including price, corporate and regulatory requirements, capital availability and other market conditions. The Stock Purchase Plan may be suspended or discontinued at any time without prior notice. No shares have been or will be knowingly purchased from Company insiders or their affiliates. Since inception of the Stock Purchase Plan through November 30, 2014, the Company has purchased 7,063,962 shares of its Class A common shares, for a total of approximately $268.3 million. There were no purchases of the Company's Class A shares during fiscal 2013 or 2014. Transactions occur in open market purchases and pursuant to a trading plan under Rule 10b5-1. At November 30, 2014, the Company has approximately $61.7 million remaining repurchase authority under the current Stock Purchase Plan. NOTE 10 — COMMITMENTS AND CONTINGENCIES International Speedway Corporation has a salary incentive plan (the “ISC Plan”) designed to qualify under Section 401(k) of the Internal Revenue Code. Employees of International Speedway Corporation and certain participating subsidiaries who have completed one month of continuous service are eligible to participate in the ISC Plan. After twelve months of continuous service, 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 percent vested upon entrance to the ISC Plan. The contribution expense for the ISC Plan was approximately $1.4 million, $1.4 million and $1.6 million for the years ended November 30, 2012, 2013 and 2014, respectively. The estimated cost to complete approved projects and current construction in progress at November 30, 2014 at the Company’s existing facilities is approximately $172.3 million. In October 2002, the Unified Government issued subordinate sales tax special obligation revenue bonds (“2002 STAR Bonds”) totaling approximately $6.3 million to reimburse the Company for certain construction already completed on the second phase 61 62 ISC // 2014 ANNUAL REPORT // FORM 10-K // 63 of the Kansas Speedway project and to fund certain additional construction. The 2002 STAR Bonds, which require annual debt service payments and are due December 1, 2022, will be retired with state and local taxes generated within the speedway’s boundaries and are not the Company’s obligation. KSC has agreed to guarantee the payment of principal, any required premium and interest on the 2002 STAR Bonds. At November 30, 2014, the Unified Government had approximately $1.4 million outstanding on 2002 STAR Bonds. Under a keepwell agreement, the Company has agreed to provide financial assistance to KSC, if necessary, to support KSC’s guarantee of the 2002 STAR Bonds. The Company operates Homestead-Miami Speedway under an operating agreement which expires December 31, 2032 and provides for subsequent renewal terms through December 31, 2075. The Company operates Daytona International Speedway under an operating lease agreement which expires November 7, 2054. The Company also has various operating leases for office space and equipment. The future minimum payments under the operating agreement and leases utilized by the Company having initial or remaining non-cancelable terms in excess of one year at November 30, 2014, are as follows (in thousands): For the year ending November 30: 2015 2016 2017 2018 2019 Thereafter Total Operating Agreement Operating Leases $ $ 2,220 $ 1,152 1,055 1,055 1,055 13,803 20,340 $ 4,033 2,974 2,399 2,005 1,581 30,791 43,783 Total expenses incurred under the track operating agreement, these operating leases and all other short-term rentals during the years ended November 30, 2012, 2013 and 2014 were approximately $13.5 million, $13.5 million, and $14.7 million, respectively. In connection with the Company’s automobile and workers’ compensation insurance coverages and certain construction contracts, the Company has standby letter of credit agreements in favor of third parties totaling approximately $4.0 million at November 30, 2014. At November 30, 2014, there were no amounts drawn on the standby letters of credit. Current Litigation 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 will have a material adverse effect on the Company’s financial condition or results of operations. NOTE 11 — 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, the American Motorcyclist Association, the Automobile Racing Club of America, the American Sportbike Racing Association — Championship Cup Series, the Federation Internationale de L’Automobile, the Federation Internationale Motocycliste, IMSA, Historic Sportscar Racing, IndyCar Series, NASCAR, NHRA, the Porsche Club of America, the Sports Car Club of America, the Sportscar Vintage Racing Association, the United States Auto Club and the World Karting Association. NASCAR, which sanctions many of the Company’s principal racing events, is a member of the France Family Group which controls over 72.0 percent of the combined voting power of the outstanding stock of the Company, as of November 30, 2014, and some members of which serve as directors and officers of the Company. 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, which are exclusive of NASCAR sanction fees, totaled approximately $128.7 million, $132.2 million and $134.5 million, for the years ended November 30, 2012, 2013 and 2014, respectively. The Company has outstanding receivables related to NASCAR and its affiliates of approximately $18.5 million and $19.3 million at November 30, 2013 and 2014, respectively. Under current agreements, NASCAR contracts directly with certain network providers for television rights to the entire NASCAR Sprint Cup, Xfinity and Camping World Truck series schedules. Under the terms of this arrangement, NASCAR retains 10.0 percent of the gross broadcast rights fees allocated to each NASCAR Sprint Cup, Xfinity and Camping World Truck series event as a component of its sanction fees. The promoter records 90.0 percent of the gross broadcast rights fees as revenue and then records 25.0 percent of the gross broadcast rights fees as part of its awards to the competitors. Ultimately, the promoter retains 65.0 percent of the net cash proceeds from the gross broadcast rights fees allocated to the event. The Company’s television broadcast and ancillary rights fees received from NASCAR for the NASCAR Sprint Cup, Xfinity and Camping World Truck series events conducted at its wholly owned facilities were approximately $281.2 million, $292.5 million and $302.9 million in fiscal years 2012, 2013 and 2014, respectively. In addition, NASCAR and the Company share a variety of expenses in the ordinary course of business. NASCAR pays rent, as well as a related maintenance fee (allocated based on square footage), to the Company for office space in Daytona Beach, Florida. NASCAR pays the Company for radio, program and strategic initiative advertising, hospitality and suite rentals, various tickets and credentials, catering services, participation in a NASCAR racing event banquet, and track and other equipment rentals based on similar prices paid by unrelated, third party purchasers of similar items. The Company pays NASCAR for certain advertising, participation in NASCAR racing series banquets, the use of NASCAR trademarks and intellectual images and production space for Sprint Vision based on similar prices paid by unrelated, third party purchasers of similar items. The Company’s payments to NASCAR for MRN’s broadcast rights to NASCAR Camping World Truck races represent an agreed-upon percentage of the Company’s advertising revenues attributable to such race broadcasts. NASCAR also reimburses the Company for 50.0 percent of the compensation paid to certain personnel working in the Company’s legal, risk management and transportation departments, as well as 50.0 percent of the compensation expense associated with certain receptionists. The Company reimburses NASCAR for 50.0 percent of the compensation paid to certain personnel working in NASCAR’s legal department. NASCAR’s reimbursement for use of the Company’s mailroom, janitorial services, security services, catering, graphic arts, photo and publishing services, telephone system and the Company’s reimbursement of NASCAR for use of corporate aircraft is based on actual usage or an allocation of total actual usage. The aggregate amount received from NASCAR by the Company for shared expenses, net of amounts paid by the Company for shared expenses, totaled approximately $8.6 million, $9.3 million and $10.5 million during fiscal 2012, 2013 and 2014, respectively. IMSA, a wholly owned subsidiary of NASCAR, sanctions various events at certain of the Company’s facilities. Standard IMSA 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 IMSA to participants in the events. Sanction fees paid by the Company to IMSA totaled approximately $1.2 million, $1.3 million and $1.3 million for the years ended November 30, 2012, 2013 and 2014, respectively. AMA Pro Racing, an entity controlled by a member of the France Family Group, sanctions various events at certain of the Company’s facilities. Standard AMA Pro Racing 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 AMA Pro Racing to participants in the events. Sanction fees paid by the Company to AMA Pro Racing totaled approximately $0.6 million, $0.6 million and $0.5 million during fiscal 2012, 2013 and 2014, respectively. The Company strives to ensure, and management believes that, the terms of the Company’s transactions with NASCAR, IMSA and AMA Pro Racing are no less favorable to the Company than could be obtained in arms-length negotiations. Certain members of the France Family Group paid the Company for the utilization of security services, event planning, event tickets, purchase of catering services, maintenance services, and certain equipment. The amounts paid for these items were based on actual costs incurred, similar prices paid by unrelated third party purchasers of similar items or estimated fair market values. The net amount received by the Company for these items, totaled approximately $318,000, $398,000 and $320,000 during fiscal 2012, 2013 and 2014, respectively. Crotty, Bartlett & Kelly, P.A. (“Crotty, Bartlett & Kelly”), is a law firm controlled by family members of W. Garrett Crotty, one of the Company’s executive officers. The Company engages Crotty, Bartlett & Kelly for certain legal and consulting services. The aggregate amount paid to Crotty, Bartlett & Kelly by the Company for legal and consulting services totaled approximately $30,000, $31,000 and $31,000 during fiscal 2012, 2013 and 2014, respectively. ISC // 2014 ANNUAL REPORT // FORM 10-K // 64 63 64 of the Kansas Speedway project and to fund certain additional construction. The 2002 STAR Bonds, which require annual debt service payments and are due December 1, 2022, will be retired with state and local taxes generated within the speedway’s boundaries and are not the Company’s obligation. KSC has agreed to guarantee the payment of principal, any required premium and interest on the 2002 STAR Bonds. At November 30, 2014, the Unified Government had approximately $1.4 million outstanding on 2002 STAR Bonds. Under a keepwell agreement, the Company has agreed to provide financial assistance to KSC, if necessary, to support KSC’s guarantee of the 2002 STAR Bonds. The Company operates Homestead-Miami Speedway under an operating agreement which expires December 31, 2032 and provides for subsequent renewal terms through December 31, 2075. The Company operates Daytona International Speedway under an operating lease agreement which expires November 7, 2054. The Company also has various operating leases for office space and equipment. The future minimum payments under the operating agreement and leases utilized by the Company having initial or remaining non-cancelable terms in excess of one year at November 30, 2014, are as follows (in thousands): Operating Agreement Operating Leases $ 2,220 $ 1,152 1,055 1,055 1,055 13,803 20,340 $ $ 4,033 2,974 2,399 2,005 1,581 30,791 43,783 For the year ending November 30: 2015 2016 2017 2018 2019 Thereafter Total respectively. Current Litigation operations. Total expenses incurred under the track operating agreement, these operating leases and all other short-term rentals during the years ended November 30, 2012, 2013 and 2014 were approximately $13.5 million, $13.5 million, and $14.7 million, In connection with the Company’s automobile and workers’ compensation insurance coverages and certain construction contracts, the Company has standby letter of credit agreements in favor of third parties totaling approximately $4.0 million at November 30, 2014. At November 30, 2014, there were no amounts drawn on the standby letters of credit. 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 will have a material adverse effect on the Company’s financial condition or results of NOTE 11 — 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, the American Motorcyclist Association, the Automobile Racing Club of America, the American Sportbike Racing Association — Championship Cup Series, the Federation Internationale de L’Automobile, the Federation Internationale Motocycliste, IMSA, Historic Sportscar Racing, IndyCar Series, NASCAR, NHRA, the Porsche Club of America, the Sports Car Club of America, the Sportscar Vintage Racing Association, the United States Auto Club and the World Karting Association. NASCAR, which sanctions many of the Company’s principal racing events, is a member of the France Family Group which controls over 72.0 percent of the combined voting power of the outstanding stock of the Company, as of November 30, 2014, and some members of which serve as directors and officers of the Company. 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, which are exclusive of NASCAR sanction fees, totaled approximately $128.7 million, $132.2 million and $134.5 million, for the years ended November 30, 2012, 2013 and 2014, respectively. The Company has outstanding receivables related to NASCAR and its affiliates of approximately $18.5 million and $19.3 million at November 30, 2013 and 2014, respectively. Under current agreements, NASCAR contracts directly with certain network providers for television rights to the entire NASCAR Sprint Cup, Xfinity and Camping World Truck series schedules. Under the terms of this arrangement, NASCAR retains 10.0 percent of the gross broadcast rights fees allocated to each NASCAR Sprint Cup, Xfinity and Camping World Truck series event as a component of its sanction fees. The promoter records 90.0 percent of the gross broadcast rights fees as revenue and then records 25.0 percent of the gross broadcast rights fees as part of its awards to the competitors. Ultimately, the promoter retains 65.0 percent of the net cash proceeds from the gross broadcast rights fees allocated to the event. The Company’s television broadcast and ancillary rights fees received from NASCAR for the NASCAR Sprint Cup, Xfinity and Camping World Truck series events conducted at its wholly owned facilities were approximately $281.2 million, $292.5 million and $302.9 million in fiscal years 2012, 2013 and 2014, respectively. In addition, NASCAR and the Company share a variety of expenses in the ordinary course of business. NASCAR pays rent, as well as a related maintenance fee (allocated based on square footage), to the Company for office space in Daytona Beach, Florida. NASCAR pays the Company for radio, program and strategic initiative advertising, hospitality and suite rentals, various tickets and credentials, catering services, participation in a NASCAR racing event banquet, and track and other equipment rentals based on similar prices paid by unrelated, third party purchasers of similar items. The Company pays NASCAR for certain advertising, participation in NASCAR racing series banquets, the use of NASCAR trademarks and intellectual images and production space for Sprint Vision based on similar prices paid by unrelated, third party purchasers of similar items. The Company’s payments to NASCAR for MRN’s broadcast rights to NASCAR Camping World Truck races represent an agreed-upon percentage of the Company’s advertising revenues attributable to such race broadcasts. NASCAR also reimburses the Company for 50.0 percent of the compensation paid to certain personnel working in the Company’s legal, risk management and transportation departments, as well as 50.0 percent of the compensation expense associated with certain receptionists. The Company reimburses NASCAR for 50.0 percent of the compensation paid to certain personnel working in NASCAR’s legal department. NASCAR’s reimbursement for use of the Company’s mailroom, janitorial services, security services, catering, graphic arts, photo and publishing services, telephone system and the Company’s reimbursement of NASCAR for use of corporate aircraft is based on actual usage or an allocation of total actual usage. The aggregate amount received from NASCAR by the Company for shared expenses, net of amounts paid by the Company for shared expenses, totaled approximately $8.6 million, $9.3 million and $10.5 million during fiscal 2012, 2013 and 2014, respectively. IMSA, a wholly owned subsidiary of NASCAR, sanctions various events at certain of the Company’s facilities. Standard IMSA 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 IMSA to participants in the events. Sanction fees paid by the Company to IMSA totaled approximately $1.2 million, $1.3 million and $1.3 million for the years ended November 30, 2012, 2013 and 2014, respectively. AMA Pro Racing, an entity controlled by a member of the France Family Group, sanctions various events at certain of the Company’s facilities. Standard AMA Pro Racing 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 AMA Pro Racing to participants in the events. Sanction fees paid by the Company to AMA Pro Racing totaled approximately $0.6 million, $0.6 million and $0.5 million during fiscal 2012, 2013 and 2014, respectively. The Company strives to ensure, and management believes that, the terms of the Company’s transactions with NASCAR, IMSA and AMA Pro Racing are no less favorable to the Company than could be obtained in arms-length negotiations. Certain members of the France Family Group paid the Company for the utilization of security services, event planning, event tickets, purchase of catering services, maintenance services, and certain equipment. The amounts paid for these items were based on actual costs incurred, similar prices paid by unrelated third party purchasers of similar items or estimated fair market values. The net amount received by the Company for these items, totaled approximately $318,000, $398,000 and $320,000 during fiscal 2012, 2013 and 2014, respectively. Crotty, Bartlett & Kelly, P.A. (“Crotty, Bartlett & Kelly”), is a law firm controlled by family members of W. Garrett Crotty, one of the Company’s executive officers. The Company engages Crotty, Bartlett & Kelly for certain legal and consulting services. The aggregate amount paid to Crotty, Bartlett & Kelly by the Company for legal and consulting services totaled approximately $30,000, $31,000 and $31,000 during fiscal 2012, 2013 and 2014, respectively. 63 64 ISC // 2014 ANNUAL REPORT // FORM 10-K // 65 J. Hyatt Brown, one of the Company’s directors, serves as Chairman of Brown & Brown, Inc. (“Brown & Brown”). Brown & Brown has received commissions for serving as the Company’s insurance broker for several of the Company’s insurance policies, including the Company’s property and casualty policy and certain employee benefit programs. The aggregate commissions received by Brown & Brown in connection with the Company’s policies were approximately $466,000, $487,000 and $492,000 during fiscal 2012, 2013 and 2014, respectively. In fiscal 2013 and 2014, Brown & Brown paid the Company approximately $122,000 and $100,000, respectively, for the purchase of tickets. The amounts paid for these items were based on actual costs incurred, similar prices paid by unrelated third party purchasers of similar items or estimated fair market values. One of the Company’s directors, Christy F. Harris, is Of Counsel to Kinsey, Vincent Pyle, L.C., a law firm that provided legal services to the Company during fiscal 2012, 2013 and 2014. The Company paid approximately $83,000, $114,000 and $78,000 for these services in fiscal 2012, 2013 and 2014, respectively, which were charged to the Company on the same basis as those provided other clients. NOTE 12 — SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid for income taxes and interest for the years ended November 30, is summarized as follows (in thousands): Income taxes paid Interest paid 2012 2013 2014 20,923 $ 18,141 $ 51,314 15,099 $ 14,731 $ 14,429 $ $ NOTE 13 — LONG-TERM STOCK INCENTIVE PLAN On November 30, 2014, the Company has two share-based compensation plans, which are described below. Compensation cost included in operating expenses in the accompanying statement of operations for those plans was $1.9 million, $2.5 million, and $2.8 million for the years ended November 30, 2012, 2013 and 2014, respectively. The total income tax benefit recognized in the income statement for share-based compensation arrangements was approximately $0.7 million, $1.0 million and $1.2 million for the years ended November 30, 2012, 2013 and 2014, respectively. The Company’s 1996 Long-Term Stock Incentive Plan (the “1996 Plan”) authorized the grant of stock options (incentive and nonqualified), stock appreciation rights and restricted stock. The Company 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. The 1996 Plan terminated in September 2006. All unvested stock options and restricted stock granted prior to the termination will continue to vest and will continue to be exercisable in accordance with their original terms. In April, 2006, the Company’s shareholders’ approved the 2006 Long-Term Incentive Plan (the “2006 Plan”) which authorizes the grant of stock options (incentive and non-qualified), stock appreciation rights, restricted and unrestricted stock, cash awards and Performance Units (as defined in the 2006 Plan) to employees, consultants and advisors 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 the Company’s Class A Common Stock for grants under the 2006 Plan. Incentive Stock Options may be granted only to employees eligible to receive them under the Internal Revenue Code of 1996, as amended. The 2006 Plan approved by the shareholders appoints the Compensation Committee (the “Committee”) to administer the 2006 Plan. Awards under the 2006 Plan will contain such terms and conditions not inconsistent with the 2006 Plan as the Committee in its discretion approves. The Committee has discretion to administer the 2006 Plan in the manner which it determines, from time to time, is in the best interest of the Company. Restricted Stock Awards Restricted stock awarded under the 1996 Plan and 2006 Plan (collectively the “Plans”) generally is subject to forfeiture in the event of termination of employment prior to vesting dates. Prior to vesting, the Plans 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 Plans which are offered for sale subsequent to vesting. In accordance with ASC 718, “Compensation - Stock Compensation” the Company is recognizing stock-based compensation on these restricted shares awarded on the accelerated method over the requisite service period. The fair value of nonvested restricted stock is determined based on the opening trading price of the Company’s Class A Common Stock on the grant date. The Company granted 171,802, 80,514 and 91,076 shares of restricted stock awards of the Company’s Class A Common Stock during the fiscal years ended November 30, 2012, 2013 and 2014, respectively, to certain officers, managers, and other employees under the Plans. The shares of restricted stock awarded vest at the rate of 50.0 percent on the third anniversary of the award date and the remaining 50.0 percent on the fifth anniversary of the award date. The weighted average grant date fair value of these restricted stock awards was $26.69, $32.87 and $31.44 per share, respectively. The Company granted 9,168, 9,540 and 8,118 shares of restricted stock awards of the Company’s Class A Common Stock during the fiscal years ended November 30, 2012, 2013 and 2014, respectively, to non-employee directors as partial compensation for their service as a director. The shares of restricted stock awarded vest at the rate of 100.0 percent on the one year anniversary after the date of grant. The weighted average grant date fair value of these restricted share awards was $26.18, $31.47 and $33.28 per share, respectively. November 30, 2014, is presented as follows: A summary of the status of the Company’s restricted stock as of November 30, 2014, and changes during the fiscal year ended Weighted- Average Grant- Date Fair Value (Per Share) Weighted- Average Remaining Contractual Term (Years) Restricted Shares 338,389 $ 99,194 (48,316 ) (20,287 ) 368,980 28.88 31.59 28.28 29.16 29.68 Unvested at November 30, 2013 Granted Vested Forfeited Unvested at November 30, 2014 3.5 As of November 30, 2014, there was approximately $5.2 million of total unrecognized compensation cost related to unvested restricted stock awards granted under the Stock Plans. This cost is expected to be recognized over a weighted-average period of approximately 3.5 years . The total fair value of restricted stock awards vested during the fiscal years ended November 30, 2012, 2013 and 2014, was approximately $1.3 million, $1.3 million and $1.5 million, respectively. Nonqualified and Incentive Stock Options In fiscal 2010 a portion of each non-employee director’s compensation for their service as a director is through awards of options to acquire shares of the Company’s Class A Common Stock under the Plans. These options become exercisable one year after the date of grant and expire on the tenth anniversary of the date of grant. The Company also grants options to certain non-officer managers to purchase the Company’s Class A Common Stock under the Plans. These options generally vest over a two and one-half year period and expire on the tenth anniversary of the date of grant. The Company records stock-based compensation cost on its stock options awarded on the straight-line method over the requisite service period. The fair value of each option granted is estimated on the grant date using the Black-Scholes-Merton option-pricing valuation model that uses the assumptions noted in the following table. Expected volatilities are based on implied volatilities from historical volatility of the Company’s stock and other factors. The Company uses historical data to estimate option exercises and employee terminations within the valuation model. Separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected term of options granted is estimated based on historical exercise behavior and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. ISC // 2014 ANNUAL REPORT // FORM 10-K // 66 65 66 J. Hyatt Brown, one of the Company’s directors, serves as Chairman of Brown & Brown, Inc. (“Brown & Brown”). Brown & Brown has received commissions for serving as the Company’s insurance broker for several of the Company’s insurance policies, including the Company’s property and casualty policy and certain employee benefit programs. The aggregate commissions received by Brown & Brown in connection with the Company’s policies were approximately $466,000, $487,000 and $492,000 during fiscal 2012, 2013 and 2014, respectively. In fiscal 2013 and 2014, Brown & Brown paid the Company approximately $122,000 and $100,000, respectively, for the purchase of tickets. The amounts paid for these items were based on actual costs incurred, similar prices paid by unrelated third party purchasers of similar items or estimated fair market values. One of the Company’s directors, Christy F. Harris, is Of Counsel to Kinsey, Vincent Pyle, L.C., a law firm that provided legal services to the Company during fiscal 2012, 2013 and 2014. The Company paid approximately $83,000, $114,000 and $78,000 for these services in fiscal 2012, 2013 and 2014, respectively, which were charged to the Company on the same basis as those provided other clients. NOTE 12 — SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid for income taxes and interest for the years ended November 30, is summarized as follows (in thousands): Income taxes paid Interest paid NOTE 13 — LONG-TERM STOCK INCENTIVE PLAN 2012 2013 2014 20,923 $ 18,141 $ 51,314 15,099 $ 14,731 $ 14,429 $ $ $2.8 million for the years ended November 30, 2012, 2013 and 2014, respectively. The total income tax benefit recognized in the income statement for share-based compensation arrangements was approximately $0.7 million, $1.0 million and $1.2 million for the years ended November 30, 2012, 2013 and 2014, respectively. The Company’s 1996 Long-Term Stock Incentive Plan (the “1996 Plan”) authorized the grant of stock options (incentive and nonqualified), stock appreciation rights and restricted stock. The Company 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. The 1996 Plan terminated in September 2006. All unvested stock options and restricted stock granted prior to the termination will continue to vest and will continue to be exercisable in accordance with their original terms. In April, 2006, the Company’s shareholders’ approved the 2006 Long-Term Incentive Plan (the “2006 Plan”) which authorizes the grant of stock options (incentive and non-qualified), stock appreciation rights, restricted and unrestricted stock, cash awards and Performance Units (as defined in the 2006 Plan) to employees, consultants and advisors 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 the Company’s Class A Common Stock for grants under the 2006 Plan. Incentive Stock Options may be granted only to employees eligible to receive them under the Internal Revenue Code of 1996, as amended. The 2006 Plan approved by the shareholders appoints the Compensation Committee (the “Committee”) to administer the 2006 Plan. Awards under the 2006 Plan will contain such terms and conditions not inconsistent with the 2006 Plan as the Committee in its discretion approves. The Committee has discretion to administer the 2006 Plan in the manner which it determines, from time to time, is in the best interest of the Company. Restricted Stock Awards Restricted stock awarded under the 1996 Plan and 2006 Plan (collectively the “Plans”) generally is subject to forfeiture in the event of termination of employment prior to vesting dates. Prior to vesting, the Plans 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 Plans which are offered for sale subsequent to vesting. In accordance with ASC 718, “Compensation - Stock Compensation” the Company is recognizing stock-based compensation on these restricted shares awarded on the accelerated method over the requisite service period. The fair value of nonvested restricted stock is determined based on the opening trading price of the Company’s Class A Common Stock on the grant date. The Company granted 171,802, 80,514 and 91,076 shares of restricted stock awards of the Company’s Class A Common Stock during the fiscal years ended November 30, 2012, 2013 and 2014, respectively, to certain officers, managers, and other employees under the Plans. The shares of restricted stock awarded vest at the rate of 50.0 percent on the third anniversary of the award date and the remaining 50.0 percent on the fifth anniversary of the award date. The weighted average grant date fair value of these restricted stock awards was $26.69, $32.87 and $31.44 per share, respectively. The Company granted 9,168, 9,540 and 8,118 shares of restricted stock awards of the Company’s Class A Common Stock during the fiscal years ended November 30, 2012, 2013 and 2014, respectively, to non-employee directors as partial compensation for their service as a director. The shares of restricted stock awarded vest at the rate of 100.0 percent on the one year anniversary after the date of grant. The weighted average grant date fair value of these restricted share awards was $26.18, $31.47 and $33.28 per share, respectively. A summary of the status of the Company’s restricted stock as of November 30, 2014, and changes during the fiscal year ended November 30, 2014, is presented as follows: On November 30, 2014, the Company has two share-based compensation plans, which are described below. Compensation cost included in operating expenses in the accompanying statement of operations for those plans was $1.9 million, $2.5 million, and Unvested at November 30, 2013 Granted Vested Forfeited Unvested at November 30, 2014 Weighted- Average Grant- Date Fair Value (Per Share) Weighted- Average Remaining Contractual Term (Years) 28.88 31.59 28.28 29.16 29.68 3.5 Restricted Shares 338,389 $ 99,194 (48,316 ) (20,287 ) 368,980 As of November 30, 2014, there was approximately $5.2 million of total unrecognized compensation cost related to unvested restricted stock awards granted under the Stock Plans. This cost is expected to be recognized over a weighted-average period of approximately 3.5 years . The total fair value of restricted stock awards vested during the fiscal years ended November 30, 2012, 2013 and 2014, was approximately $1.3 million, $1.3 million and $1.5 million, respectively. Nonqualified and Incentive Stock Options In fiscal 2010 a portion of each non-employee director’s compensation for their service as a director is through awards of options to acquire shares of the Company’s Class A Common Stock under the Plans. These options become exercisable one year after the date of grant and expire on the tenth anniversary of the date of grant. The Company also grants options to certain non-officer managers to purchase the Company’s Class A Common Stock under the Plans. These options generally vest over a two and one-half year period and expire on the tenth anniversary of the date of grant. The Company records stock-based compensation cost on its stock options awarded on the straight-line method over the requisite service period. The fair value of each option granted is estimated on the grant date using the Black-Scholes-Merton option-pricing valuation model that uses the assumptions noted in the following table. Expected volatilities are based on implied volatilities from historical volatility of the Company’s stock and other factors. The Company uses historical data to estimate option exercises and employee terminations within the valuation model. Separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. The expected term of options granted is estimated based on historical exercise behavior and represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. 65 66 ISC // 2014 ANNUAL REPORT // FORM 10-K // 67 A summary of option activity under the Stock Plan as of November 30, 2014, and changes during the year then ended is presented as follows: NOTE 15 — QUARTERLY DATA (UNAUDITED) Options Outstanding at November 30, 2013 Expired Exercised Forfeited Outstanding at November 30, 2014 Shares 194,073 $ (31,025 ) — — 163,048 Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value 41.03 47.38 — — 39.82 3.4 $ 324,338 Basic and diluted earnings (loss) per share The Company derives most of its income 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. The following table presents certain unaudited financial data for each quarter of fiscal 2013 and 2014 (in thousands, except per Vested and Exercisable at November 30, 2014 163,048 $ 39.82 3.4 $ 324,338 There were no options granted in fiscal years 2012, 2013 and 2014. There were zero, 13,250, and zero options exercised during fiscal years 2012, 2013and 2014, respectively. The total intrinsic value of options exercised during the fiscal years ended November 30, 2012, 2013 and 2014, respectively were approximately zero, $102,000 and zero, respectively. The actual tax benefit realized for the tax deductions from exercise of the stock options totaled approximately zero, $40,000 and zero for the fiscal years ended November 30, 2012, 2013and 2014, respectively. As of November 30, 2014, there was no unrecognized compensation cost related to unvested stock options granted under the Stock Plan. NOTE 14 — FINANCIAL INSTRUMENTS In accordance with the “Financial Instruments” Topic, ASC 825-10 and in accordance with the “Fair Value Measurements and Disclosures” Topic, ASC 820-10, these topics discuss key considerations in determining fair value in such markets, and expanding disclosures on recurring fair value measurements using unobservable inputs (Level 3), clarification and additional disclosure is required about the use of fair value measurements. Various inputs are considered when determining the carrying values of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities. These items approximate fair value due to the short-term maturities of these assets and liabilities. These inputs are summarized in the three broad levels listed below: (cid:127) Level 1 — observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets unit’s net revenues to total net revenues. (cid:127) Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) (cid:127) Level 3 — significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments) At November 30, 2014, the Company had money market funds totaling approximately $62.6 million and are included in cash and cash equivalents in consolidated balance sheets. All inputs used to determine fair value are considered level 1 inputs. Fair values of long-term debt are based on quoted market prices at the date of measurement. The Company’s credit facilities approximate fair value as they bear interest rates that approximate market. These inputs used to determine fair value are considered level 2 inputs. At November 30, 2014, the fair value of the long-term debt, as determined by quotes from financial institutions, was approximately $291.2 million compared to the carrying amount of approximately $271.7 million. The Company had no level 3 inputs as of November 30, 2014. ISC // 2014 ANNUAL REPORT // FORM 10-K // 68 67 68 share amounts): Total revenue Operating income Net income (loss) Total revenue Operating income (loss) Net income Basic and diluted earnings per share NOTE 16 — SEGMENT REPORTING Fiscal Quarter Ended February 28, 2013 May 31, 2013 August 31, 2013 November 30, 2013 $ 128,552 $ 178,374 $ 25,147 13,513 0.29 37,080 22,440 0.48 117,046 $ (13,067 ) (7,866 ) (0.17 ) 188,668 29,532 17,205 0.37 Fiscal Quarter Ended February 28, 2014 May 31, 2014 August 31, 2014 November 30, 2014 $ 131,789 $ 190,311 $ 130,083 $ 199,753 22,339 19,895 0.43 34,739 21,469 0.46 (3,525 ) 191 — 39,838 25,824 0.55 The general nature of the Company’s business is a motorsports themed amusement enterprise, furnishing amusement to the public in the form of motorsports themed entertainment. The Company’s motorsports event operations consist principally of racing events at its major motorsports entertainment facilities. The reporting units within the motorsports segment portfolio are reviewed together as the nature of the products and services, the production processes used, the type or class of customer using our products and services, and the methods used to distribute our products or provide their services are consistent in objectives and principles, and predominately uniform and centralized throughout the Company. The Company’s remaining business units, which are comprised of the radio network production and syndication of numerous racing events and programs, certain souvenir merchandising operations not associated with the promotion of motorsports events at the Company’s facilities, construction management services, leasing operations, and financing and licensing operations are included in the “All Other” segment. The Company evaluates financial performance of the business units on operating profit after allocation of corporate general and administrative (“G&A”) expenses. Corporate G&A expenses are allocated to business units based on each business The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Intersegment sales are accounted for at prices comparable to unaffiliated customers. Intersegment revenues were approximately $2.1 million, $2.4 million and $2.0 million for the years ended November 30, 2012, 2013 and 2014, respectively. The following table shows information by operating segment (in thousands): A summary of option activity under the Stock Plan as of November 30, 2014, and changes during the year then ended is NOTE 15 — QUARTERLY DATA (UNAUDITED) The Company derives most of its income 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. The following table presents certain unaudited financial data for each quarter of fiscal 2013 and 2014 (in thousands, except per share amounts): Total revenue Operating income Net income (loss) Basic and diluted earnings (loss) per share Total revenue Operating income (loss) Net income Basic and diluted earnings per share $ $ February 28, 2013 May 31, 2013 August 31, 2013 November 30, 2013 Fiscal Quarter Ended 128,552 $ 25,147 13,513 0.29 178,374 $ 37,080 22,440 0.48 117,046 $ (13,067 ) (7,866 ) (0.17 ) 188,668 29,532 17,205 0.37 February 28, 2014 May 31, 2014 August 31, 2014 November 30, 2014 Fiscal Quarter Ended 131,789 $ 22,339 19,895 0.43 190,311 $ 34,739 21,469 0.46 130,083 $ (3,525 ) 191 — 199,753 39,838 25,824 0.55 As of November 30, 2014, there was no unrecognized compensation cost related to unvested stock options granted under the NOTE 16 — SEGMENT REPORTING The general nature of the Company’s business is a motorsports themed amusement enterprise, furnishing amusement to the public in the form of motorsports themed entertainment. The Company’s motorsports event operations consist principally of racing events at its major motorsports entertainment facilities. The reporting units within the motorsports segment portfolio are reviewed together as the nature of the products and services, the production processes used, the type or class of customer using our products and services, and the methods used to distribute our products or provide their services are consistent in objectives and principles, and predominately uniform and centralized throughout the Company. The Company’s remaining business units, which are comprised of the radio network production and syndication of numerous racing events and programs, certain souvenir merchandising operations not associated with the promotion of motorsports events at the Company’s facilities, construction management services, leasing operations, and financing and licensing operations are included in the “All Other” segment. The Company evaluates financial performance of the business units on operating profit after allocation of corporate general and administrative (“G&A”) expenses. Corporate G&A expenses are allocated to business units based on each business unit’s net revenues to total net revenues. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Intersegment sales are accounted for at prices comparable to unaffiliated customers. Intersegment revenues were approximately $2.1 million, $2.4 million and $2.0 million for the years ended November 30, 2012, 2013 and 2014, respectively. The following table shows information by operating segment (in thousands): presented as follows: Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Options Outstanding at November 30, 2013 Expired Exercised Forfeited Shares 194,073 $ (31,025 ) — — 41.03 47.38 — — Outstanding at November 30, 2014 163,048 39.82 3.4 $ 324,338 Vested and Exercisable at November 30, 2014 163,048 $ 39.82 3.4 $ 324,338 There were no options granted in fiscal years 2012, 2013 and 2014. There were zero, 13,250, and zero options exercised during fiscal years 2012, 2013and 2014, respectively. The total intrinsic value of options exercised during the fiscal years ended November 30, 2012, 2013 and 2014, respectively were approximately zero, $102,000 and zero, respectively. The actual tax benefit realized for the tax deductions from exercise of the stock options totaled approximately zero, $40,000 and zero for the fiscal years ended November 30, 2012, 2013and 2014, respectively. Stock Plan. NOTE 14 — FINANCIAL INSTRUMENTS In accordance with the “Financial Instruments” Topic, ASC 825-10 and in accordance with the “Fair Value Measurements and Disclosures” Topic, ASC 820-10, these topics discuss key considerations in determining fair value in such markets, and expanding disclosures on recurring fair value measurements using unobservable inputs (Level 3), clarification and additional disclosure is required about the use of fair value measurements. Various inputs are considered when determining the carrying values of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities. These items approximate fair value due to the short-term maturities of these assets and liabilities. These inputs are summarized in the three broad levels listed below: (cid:127) Level 1 — observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets (cid:127) Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, (cid:127) Level 3 — significant unobservable inputs (including the Company’s own assumptions in determining the fair value of etc.) investments) At November 30, 2014, the Company had money market funds totaling approximately $62.6 million and are included in cash and cash equivalents in consolidated balance sheets. All inputs used to determine fair value are considered level 1 inputs. Fair values of long-term debt are based on quoted market prices at the date of measurement. The Company’s credit facilities approximate fair value as they bear interest rates that approximate market. These inputs used to determine fair value are considered level 2 inputs. At November 30, 2014, the fair value of the long-term debt, as determined by quotes from financial institutions, was approximately $291.2 million compared to the carrying amount of approximately $271.7 million. The Company had no level 3 inputs as of November 30, 2014. 67 68 ISC // 2014 ANNUAL REPORT // FORM 10-K // 69 Revenues Depreciation and amortization Operating income (loss) Equity investments income Capital expenditures Total assets Equity investments Revenues Depreciation and amortization Operating income (loss) Equity investments income Capital expenditures Total assets Equity investments Revenues Depreciation and amortization Operating income (loss) Equity investments income Capital expenditures Total assets Equity investments $ $ $ Motorsports Event For the Year Ended November 30, 2012 All Other Total 585,097 $ 71,781 107,118 — 79,334 1,598,551 — 29,338 $ 6,089 (2,109 ) 2,757 3,538 343,190 146,378 614,435 77,870 105,009 2,757 82,872 1,941,741 146,378 Motorsports Event For the Year Ended November 30, 2013 All Other Total 589,435 $ 88,499 82,500 — 81,938 1,520,069 — 25,618 $ 5,490 (3,808 ) 9,434 3,601 497,437 134,327 615,053 93,989 78,692 9,434 85,539 2,017,506 134,327 Motorsports Event For the Year Ended November 30, 2014 All Other Total 609,973 $ 84,614 99,332 — 177,318 1,621,726 — 43,981 $ 5,738 (5,941 ) 8,916 6,618 455,925 122,565 653,954 90,352 93,391 8,916 183,936 2,077,651 122,565 Schedule II — Valuation and Qualifying Accounts (in thousands) Description For the year ended November 30, 2012 Allowance for doubtful accounts For the year ended November 30, 2013 Allowance for doubtful accounts For the year ended November 30, 2014 Allowance for doubtful accounts (A) Uncollectible accounts written off, net of recoveries. Balance beginning of period Additions charged to costs and expenses Deductions (A) Balance at end of period $ 1,000 $ 341 $ 341 $ 1,000 1,000 1,000 382 101 382 101 1,000 1,000 ITEM 9A. CONTROLS AND PROCEDURES Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), under the supervision of and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures, subject to limitations as noted below, were effective at November 30, 2014, and during the period prior to and including the date of this report. Because of its inherent limitations, our disclosure controls and procedures may not prevent or detect misstatements. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Report of Management on Internal Control Over Financial Reporting January 27, 2015 We, as members of management of International Speedway Corporation, are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, our disclosure controls and procedures may not prevent or detect misstatements. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate. We, under the supervision of and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, assessed the Company’s internal control over financial reporting as of November 30, 2014, based on criteria for effective internal control over financial reporting described in “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework). Based on this assessment, we concluded that we maintained effective internal control over financial reporting as of November 30, 2014, based on the specified criteria. There were no changes in our internal control over financial reporting during the quarter ended November 30, 2014, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The effectiveness of our internal control over financial reporting has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9B. OTHER INFORMATION None ISC // 2014 ANNUAL REPORT // FORM 10-K // 70 69 70 Revenues Depreciation and amortization Operating income (loss) Equity investments income Capital expenditures Total assets Equity investments Revenues Depreciation and amortization Operating income (loss) Equity investments income Capital expenditures Total assets Equity investments Revenues Depreciation and amortization Operating income (loss) Equity investments income Capital expenditures Total assets Equity investments For the Year Ended November 30, 2012 ITEM 9A. CONTROLS AND PROCEDURES Motorsports Event All Other $ 585,097 $ 29,338 $ For the Year Ended November 30, 2013 Motorsports Event All Other Total $ 589,435 $ 25,618 $ 615,053 71,781 107,118 — 79,334 1,598,551 — 88,499 82,500 — 81,938 1,520,069 — 84,614 99,332 — 177,318 1,621,726 — Total 614,435 77,870 105,009 2,757 82,872 1,941,741 146,378 93,989 78,692 9,434 85,539 2,017,506 134,327 Total 653,954 90,352 93,391 8,916 183,936 2,077,651 122,565 6,089 (2,109 ) 2,757 3,538 343,190 146,378 5,490 (3,808 ) 9,434 3,601 497,437 134,327 5,738 (5,941 ) 8,916 6,618 455,925 122,565 For the Year Ended November 30, 2014 Motorsports Event All Other $ 609,973 $ 43,981 $ Balance beginning of period Additions charged to costs and expenses Deductions (A) Balance at end of period $ 1,000 $ 341 $ 341 $ 1,000 1,000 1,000 382 101 382 101 1,000 1,000 Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), under the supervision of and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures, subject to limitations as noted below, were effective at November 30, 2014, and during the period prior to and including the date of this report. Because of its inherent limitations, our disclosure controls and procedures may not prevent or detect misstatements. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Report of Management on Internal Control Over Financial Reporting January 27, 2015 We, as members of management of International Speedway Corporation, are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, our disclosure controls and procedures may not prevent or detect misstatements. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate. We, under the supervision of and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, assessed the Company’s internal control over financial reporting as of November 30, 2014, based on criteria for effective internal control over financial reporting described in “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework). Based on this assessment, we concluded that we maintained effective internal control over financial reporting as of November 30, 2014, based on the specified criteria. There were no changes in our internal control over financial reporting during the quarter ended November 30, 2014, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The effectiveness of our internal control over financial reporting has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included herein. ITEM 9B. OTHER INFORMATION None 69 70 ISC // 2014 ANNUAL REPORT // FORM 10-K // 71 Schedule II — Valuation and Qualifying Accounts (in thousands) Description accounts accounts accounts For the year ended November 30, 2012 Allowance for doubtful For the year ended November 30, 2013 Allowance for doubtful For the year ended November 30, 2014 Allowance for doubtful (A) Uncollectible accounts written off, net of recoveries. DISCLOSURE None. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this Item is set forth under the headings “Directors, Nominees, and Officers ” and under the subheading “Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s 2015 Proxy Statement to be filed with the U.S. Securities and Exchange Commission (“SEC”) within 120 days after November 30, 2014 in connection with the solicitation of proxies for the Company’s 2015 annual meeting of shareholders and is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION The information required by this Item is set forth under the heading “Executive Compensation” and under the heading “Directors, Nominees and Officers” in the Company’s 2015 Proxy Statement to be filed with the SEC within 120 days after November 30, 2014 and is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this Item is set forth under the headings “Voting Securities and Principal Holders” and under the heading “Directors, Nominees and Officers” in the Company’s 2015 Proxy Statement to be filed with the SEC within 120 days after November 30, 2014 and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE The information required by this Item is set forth under the heading under the subheading "Compensation Committee Interlocks and Insider Participation" under the heading "Executive Compensation" and under the subheadings "Directors Holding Office Until 2015 Annual Meeting", "Board Leadership" and “Certain Relationships and Related Transactions” under the heading “Directors, Nominees and Officers” in the Company’s 2015 Proxy Statement to be filed with the SEC within 120 days after November 30, 2014 and is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information required by this Item is set forth under the heading "Registered Independent Public Accounting Firm" and subheading “Policy on Audit Committee Pre-Approval Policies and Procedures” under the heading “Registered Independent Public Accounting Firm” in the Company’s 2015 Proxy Statement to be filed with the SEC within 120 days after November 30, 2014 and is incorporated herein by reference. ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES PART IV (a) Documents filed as a part of this report 1. Consolidated Financial Statements listed below: International Speedway Corporation Consolidated Balance Sheets — November 30, 2013 and 2014 Consolidated Statements of Operations — Years ended November 30, 2012, 2013, and 2014 Consolidated Statements of Comprehensive Income — Years ended November 30, 2012, 2013, and 2014 Consolidated Statements of Changes in Shareholders’ Equity — Years ended November 30, 2012, 2013, and 2014 ISC // 2014 ANNUAL REPORT // FORM 10-K // 72 71 Consolidated Statements of Cash Flows — Years ended November 30, 2012, 2013, and 2014 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 3.1 3.2 3.3 4.1 4.2 4.3 4.4 4.5 10.1 10.2 10.3 10.4 21 23.1 31.1 31.2 32 101.INS 101.SCH 101.CAL 101.DEF 101.LAB 101.PRE — — — — — — — — — — — — — — — — — — — — Description of Exhibit Articles of Amendment of the Restated and Amended Articles of Incorporation of the Company, as filed with the Florida Department of State on July 26, 1999. (3.1)* Conformed Copy of Amended and Restated Articles of Incorporation of the Company, as amended as of July 26, 1999. (3.2)* — Conformed Copy of Amended and Restated By-Laws of the Company. (3)(ii)** — Note Purchase Agreement, dated as of September 13, 2012, among the Company and purchasers party thereto. (4.2)*** — Form of Series 2012A Note due 2024 (included in Exhibit 4.1). (4.2)*** Amended and Restated Revolving Credit Agreement, dated as of November 15, 2012, among the Company, certain subsidiaries and the lenders party thereto. (10.1)**** Note Purchase Agreement, dated as of January 18, 2011, among the Company and purchasers party thereto. (10.1)***** Form of Series 2011A Note due 2021 (included in Exhibit 10.1). (10.1)***** Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer — filed herewith Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer — filed herewith. Daytona Property Lease. (10.4)****** 1996 Long-Term Incentive Plan. (10.6)****** 2006 Long-Term Incentive Plan. (4)******* Design-Build Agreement. (10.1) ******** Subsidiaries of the Registrant — filed herewith. Consent of Ernst &Young LLP — filed herewith. Section 1350 Certification — filed herewith. XBRL Instance Document XBRL Taxonomy Extension Schema XBRL Taxonomy Extension Calculation Linkbase XBRL Taxonomy Extension Definition Linkbase XBRL Taxonomy Extension Label Linkbase XBRL Taxonomy Extension Presentation Linkbase 72 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this Item is set forth under the headings “Directors, Nominees, and Officers ” and under the subheading “Section 16(a) Beneficial Ownership Reporting Compliance” in the Company’s 2015 Proxy Statement to be filed with the U.S. Securities and Exchange Commission (“SEC”) within 120 days after November 30, 2014 in connection with the Consolidated Statements of Cash Flows — Years ended November 30, 2012, 2013, and 2014 Notes to Consolidated Financial Statements 2. Consolidated Financial Statement Schedules listed below: solicitation of proxies for the Company’s 2015 annual meeting of shareholders and is incorporated herein by reference. II — Valuation and qualifying accounts ITEM 11. EXECUTIVE COMPENSATION The information required by this Item is set forth under the heading “Executive Compensation” and under the heading “Directors, Nominees and Officers” in the Company’s 2015 Proxy Statement to be filed with the SEC within 120 days after November 30, 2014 and is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this Item is set forth under the headings “Voting Securities and Principal Holders” and under the heading “Directors, Nominees and Officers” in the Company’s 2015 Proxy Statement to be filed with the SEC within 120 days after November 30, 2014 and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE The information required by this Item is set forth under the heading under the subheading "Compensation Committee Interlocks and Insider Participation" under the heading "Executive Compensation" and under the subheadings "Directors Holding Office Until 2015 Annual Meeting", "Board Leadership" and “Certain Relationships and Related Transactions” under the heading “Directors, Nominees and Officers” in the Company’s 2015 Proxy Statement to be filed with the SEC within 120 days after November 30, 2014 and is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information required by this Item is set forth under the heading "Registered Independent Public Accounting Firm" and subheading “Policy on Audit Committee Pre-Approval Policies and Procedures” under the heading “Registered Independent Public Accounting Firm” in the Company’s 2015 Proxy Statement to be filed with the SEC within 120 days after November 30, 2014 and is incorporated herein by reference. ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES PART IV (a) Documents filed as a part of this report 1. Consolidated Financial Statements listed below: International Speedway Corporation Consolidated Balance Sheets — November 30, 2013 and 2014 Consolidated Statements of Operations — Years ended November 30, 2012, 2013, and 2014 Consolidated Statements of Comprehensive Income — Years ended November 30, 2012, 2013, and 2014 Consolidated Statements of Changes in Shareholders’ Equity — Years ended November 30, 2012, 2013, and 2014 71 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 3.1 3.2 3.3 4.1 4.2 4.3 4.4 4.5 10.1 10.2 10.3 10.4 21 23.1 31.1 31.2 32 101.INS 101.SCH 101.CAL 101.DEF 101.LAB 101.PRE Description of Exhibit — — Articles of Amendment of the Restated and Amended Articles of Incorporation of the Company, as filed with the Florida Department of State on July 26, 1999. (3.1)* Conformed Copy of Amended and Restated Articles of Incorporation of the Company, as amended as of July 26, 1999. (3.2)* — — — — — — — — — — — — — — — — — — — — — Conformed Copy of Amended and Restated By-Laws of the Company. (3)(ii)** Note Purchase Agreement, dated as of September 13, 2012, among the Company and purchasers party thereto. (4.2)*** Form of Series 2012A Note due 2024 (included in Exhibit 4.1). (4.2)*** Amended and Restated Revolving Credit Agreement, dated as of November 15, 2012, among the Company, certain subsidiaries and the lenders party thereto. (10.1)**** Note Purchase Agreement, dated as of January 18, 2011, among the Company and purchasers party thereto. (10.1)***** Form of Series 2011A Note due 2021 (included in Exhibit 10.1). (10.1)***** Daytona Property Lease. (10.4)****** 1996 Long-Term Incentive Plan. (10.6)****** 2006 Long-Term Incentive Plan. (4)******* Design-Build Agreement. (10.1) ******** Subsidiaries of the Registrant — filed herewith. Consent of Ernst &Young LLP — filed herewith. Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer — filed herewith Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer — filed herewith. Section 1350 Certification — filed herewith. XBRL Instance Document XBRL Taxonomy Extension Schema XBRL Taxonomy Extension Calculation Linkbase XBRL Taxonomy Extension Definition Linkbase XBRL Taxonomy Extension Label Linkbase XBRL Taxonomy Extension Presentation Linkbase 72 ISC // 2014 ANNUAL REPORT // FORM 10-K // 73 * ** *** **** ***** ****** ******* ******** Incorporated by reference to the exhibit shown in parentheses and filed with the Company’s Report on Form 8- K dated July 26, 1999. Incorporated by reference to the exhibit shown in parentheses and filed with the Company’s report on Form 10- Q for the quarter ended February 28, 2003. Incorporated by reference to the exhibit shown in parentheses and filed with the Company’s report on Form 8-K filed on September 18, 2012. Incorporated by reference to the exhibit shown in parentheses and filed with the Company’s report on Form 8-K filed on November 19, 2012. Incorporated by reference to the exhibit shown in parentheses and filed with the Company’s report on Form 8-K filed on January 20, 2011. Incorporated by reference to the exhibit shown in parentheses and filed with the Company’s Report on Form 10- K for the year ended November 30, 1998. Incorporated by reference to the exhibit shown in parentheses and filed with the Company’s Registration Statement on Form S-8 as filed on February 11, 2010. Incorporated by reference to the exhibit shown in parentheses and filed with the Company's Amended Form 10- Q for the quarter ended May 31, 2013. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. International Speedway Corporation By: /s/ Daniel W. Houser Daniel W. Houser Senior Vice President and Chief Financial Officer Dated: January 27, 2015 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. ISC // 2014 ANNUAL REPORT // FORM 10-K // 74 73 74 Incorporated by reference to the exhibit shown in parentheses and filed with the Company’s Report on Form 8- SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ******* Incorporated by reference to the exhibit shown in parentheses and filed with the Company’s Registration Dated: January 27, 2015 ******** Incorporated by reference to the exhibit shown in parentheses and filed with the Company's Amended Form 10- 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 By: /s/ Daniel W. Houser Daniel W. Houser Senior Vice President and Chief Financial Officer * ** K dated July 26, 1999. Q for the quarter ended February 28, 2003. Incorporated by reference to the exhibit shown in parentheses and filed with the Company’s report on Form 10- *** Incorporated by reference to the exhibit shown in parentheses and filed with the Company’s report on Form 8-K **** Incorporated by reference to the exhibit shown in parentheses and filed with the Company’s report on Form 8-K ***** Incorporated by reference to the exhibit shown in parentheses and filed with the Company’s report on Form 8-K filed on September 18, 2012. filed on November 19, 2012. filed on January 20, 2011. ****** Incorporated by reference to the exhibit shown in parentheses and filed with the Company’s Report on Form 10- K for the year ended November 30, 1998. Statement on Form S-8 as filed on February 11, 2010. Q for the quarter ended May 31, 2013. 73 74 ISC // 2014 ANNUAL REPORT // FORM 10-K // 75 Signature Title Date /s/ Lesa France Kennedy Lesa France Kennedy /s/ Daniel W. Houser Daniel W. Houser /s/ James C. France James C. France /s/ Brian Z. France Brian Z. France /s/ Larry Aiello, Jr. Larry Aiello, Jr. /s/ J. Hyatt Brown J. Hyatt Brown /s/ William P. Graves William P. Graves /s/ Christy F. Harris Christy F. Harris /s/ Morteza Hosseini – Kargar Morteza Hosseini – Kargar /s/ Edsel B. Ford II Edsel B. Ford II /s/ Sonia M. Green Sonia M. Green /s/ Larry Woodard Larry Woodard Chief Executive Officer and Vice Chairman of the Board (Principal Executive Officer) January 27, 2015 Senior Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) January 27, 2015 Chairman of the Board January 27, 2015 Director Director Director Director Director Director Director Director Director January 27, 2015 January 27, 2015 January 27, 2015 January 27, 2015 January 27, 2015 January 27, 2015 January 27, 2015 January 27, 2015 January 27, 2015 ISC // 2014 ANNUAL REPORT // FORM 10-K // 76 75  INFORMATION STATEMENT 2015 This page was intentionally left blank. 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): UNITED STATES SECURITIES AND EXCHANGE COMMISSION Information Statement Pursuant to Section 14(c) of the Securities Exchange Act of 1934 Washington, D.C. 20549 SCHEDULE 14C INFORMATION (Amendment No. ) Filed by the Registrant ! Filed by a Party other than the Registrant " Check the appropriate box: ! Definitive Information Statement " Preliminary Information Statement " Confidential, for Use of Commission Only (as permitted by Rule 14c-5(d)(2)) INTERNATIONAL SPEEDWAY CORPORATION (Name of Registrant as Specified in Its Charter) Payment of Filing Fee (Check the appropriate box): ! No fee required " Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11. 1) Title of each class of securities to which transaction applies: 2) Aggregate number of securities to which transaction applies: " Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or 4) Proposed maximum aggregate value of transaction: 5) Total fee paid: " Fee paid previously with preliminary materials. Schedule and the date of its filing. 1) Amount Previously Paid: 2) Form, Schedule or Registration Statement No.: 3) Filing Party: 4) Date Filed: UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 14C INFORMATION Information Statement Pursuant to Section 14(c) of the Securities Exchange Act of 1934 (Amendment No. ) ! Filed by the Registrant Filed by a Party other than the Registrant " Check the appropriate box: " Preliminary Information Statement " Confidential, for Use of Commission Only (as permitted by Rule 14c-5(d)(2)) ! Definitive Information Statement INTERNATIONAL SPEEDWAY CORPORATION (Name of Registrant as Specified in Its Charter) Payment of Filing Fee (Check the appropriate box): ! No fee required " Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11. 1) Title of each class of securities to which transaction applies: 2) Aggregate number of securities to which transaction applies: 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): 4) Proposed maximum aggregate value of transaction: 5) Total fee paid: " Fee paid previously with preliminary materials. " Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: 2) Form, Schedule or Registration Statement No.: 3) Filing Party: 4) Date Filed: INTERNATIONAL SPEEDWAY CORPORATION One Daytona Boulevard Daytona Beach, Florida 32114 NOTICE OF 2015 ANNUAL MEETING OF SHAREHOLDERS To the Shareholders of International Speedway Corporation: The Annual Meeting of the Shareholders of International Speedway Corporation will be held at THE INTERNATIONAL MOTORSPORTS CENTER, One Daytona Boulevard, Daytona Beach, FL 32114 on Wednesday, the 8th day of April 2015, commencing at 9:00 A.M. (local time), for the following purposes: (a) (b) To elect four (4) Directors of the Corporation. To transact such other business as may properly come before the meeting. ALL Shareholders of record as of January 31, 2015, will be entitled to vote, either in person or by proxy. Due to logistical considerations, please be present by 8:45 A.M. Shareholder registration tables will open at 8:00 A.M. INTERNATIONAL SPEEDWAY CORPORATION One Daytona Boulevard Daytona Beach, Florida 32114 _______________________________________________ INFORMATION STATEMENT Pursuant to Section 14(c) of the Securities Exchange Act of 1934 and Regulation 14C and Schedule 14C thereunder _______________________________________________ WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY This Information Statement has been filed with the Securities and Exchange Commission (the “SEC”) and is first being mailed on or about March 10, 2015 to holders of record on January 31, 2015 (the “Record Date”) of shares of all classes of the common stock of International Speedway Corporation, a Florida corporation (the “Company”). This Information Statement relates to an Annual Meeting of Shareholders and the only matter to be acted upon at the meeting is the election of directors. By Order of the Board of Directors You are being provided with this Information Statement pursuant to Section 14(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation 14C and Schedule 14C thereunder. ii March 6, 2015 W. Garrett Crotty Senior Vice President, Secretary and General Counsel This Notice of 2015 Annual Meeting and the attached Information Statement dated March 6, 2015 should be read in combination with the Company’s annual report on Form 10-K for the fiscal year ended November 30, 2014 and the Annual Report. Collectively these documents contain all of the information and disclosures required in connection with the 2015 Annual Meeting of Shareholders. Copies of all of these materials can be found in the Financial Information/SEC Filings section of the Investor Relations page on our website at www.internationalspeedwaycorporation.com. INTERNATIONAL SPEEDWAY CORPORATION One Daytona Boulevard Daytona Beach, Florida 32114 NOTICE OF 2015 ANNUAL MEETING OF SHAREHOLDERS To the Shareholders of International Speedway Corporation: The Annual Meeting of the Shareholders of International Speedway Corporation will be held at THE INTERNATIONAL MOTORSPORTS CENTER, One Daytona Boulevard, Daytona Beach, FL 32114 on Wednesday, the 8th day of April 2015, commencing at 9:00 A.M. (local time), for the following purposes: (a) (b) To elect four (4) Directors of the Corporation. To transact such other business as may properly come before the meeting. ALL Shareholders of record as of January 31, 2015, will be entitled to vote, either in person or by proxy. Due to logistical considerations, please be present by 8:45 A.M. Shareholder registration tables will open at 8:00 A.M. By Order of the Board of Directors W. Garrett Crotty Senior Vice President, Secretary and General Counsel March 6, 2015 This Notice of 2015 Annual Meeting and the attached Information Statement dated March 6, 2015 should be read in combination with the Company’s annual report on Form 10-K for the fiscal year ended November 30, 2014 and the Annual Report. Collectively these documents contain all of the information and disclosures required in connection with the 2015 Annual Meeting of Shareholders. Copies of all of these materials can be found in the Financial Information/SEC Filings section of the Investor Relations page on our website at www.internationalspeedwaycorporation.com. INTERNATIONAL SPEEDWAY CORPORATION One Daytona Boulevard Daytona Beach, Florida 32114 _______________________________________________ INFORMATION STATEMENT Pursuant to Section 14(c) of the Securities Exchange Act of 1934 and Regulation 14C and Schedule 14C thereunder _______________________________________________ WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY This Information Statement has been filed with the Securities and Exchange Commission (the “SEC”) and is first being mailed on or about March 10, 2015 to holders of record on January 31, 2015 (the “Record Date”) of shares of all classes of the common stock of International Speedway Corporation, a Florida corporation (the “Company”). This Information Statement relates to an Annual Meeting of Shareholders and the only matter to be acted upon at the meeting is the election of directors. You are being provided with this Information Statement pursuant to Section 14(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulation 14C and Schedule 14C thereunder. ii This page was intentionally left blank. Contents DATE, TIME AND PLACE INFORMATION VOTING SECURITIES AND PRINCIPAL HOLDERS DIRECTORS, NOMINEES AND OFFICERS CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS DIRECTOR MEETINGS AND COMMITTEES BOARD LEADERSHIP RISK OVERSIGHT DIRECTOR NOMINATION PROCESS SHAREHOLDER COMMUNICATIONS TO THE BOARD CODE OF ETHICS SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES REPORT OF THE AUDIT COMMITTEE EXECUTIVE COMPENSATION COMPENSATION DISCUSSION AND ANALYSIS Overview and Objectives of Compensation Program Base Salary, Non-Equity Incentives and Cash Bonuses Long —Term Compensation - 2006 Long Term Incentive Plan Roles of Compensation Committee and Named Executives Other Compensation Compensation Implementation Determination of Compensation Compensation Consultants Equity Grant Practices Share Ownership Guidelines Tax Deductibility of Compensation Potential Impact on Compensation from Executive Misconduct Compensation for the Named Executive Officers in 2014 Company Performance CEO Compensation Other Named Officers SUMMARY COMPENSATION TABLE GRANTS OF PLAN-BASED AWARDS COMPENSATION OF DIRECTORS DIRECTOR COMPENSATION TABLE COMPENSATION COMMITTEE REPORT PERFORMANCE GRAPH VOTING PROCEDURE DISSENTERS’ RIGHT OF APPRAISAL AVAILABLE INFORMATION OUTSTANDING EQUITY AWARDS AT FISCAL YEAR -END OPTION EXERCISES AND STOCK VESTED POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE -IN-CONTROL COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION iii 1 1 4 7 8 9 10 10 11 12 12 12 12 13 14 14 14 14 14 15 15 15 16 17 17 17 18 18 19 19 19 20 22 23 24 26 26 26 27 28 28 29 30 30 30 Contents DATE, TIME AND PLACE INFORMATION VOTING SECURITIES AND PRINCIPAL HOLDERS DIRECTORS, NOMINEES AND OFFICERS CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS DIRECTOR MEETINGS AND COMMITTEES BOARD LEADERSHIP RISK OVERSIGHT DIRECTOR NOMINATION PROCESS SHAREHOLDER COMMUNICATIONS TO THE BOARD CODE OF ETHICS SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES REPORT OF THE AUDIT COMMITTEE EXECUTIVE COMPENSATION COMPENSATION DISCUSSION AND ANALYSIS Overview and Objectives of Compensation Program Base Salary, Non-Equity Incentives and Cash Bonuses Long —Term Compensation - 2006 Long Term Incentive Plan Other Compensation Compensation Implementation Determination of Compensation Roles of Compensation Committee and Named Executives Compensation Consultants Equity Grant Practices Share Ownership Guidelines Tax Deductibility of Compensation Potential Impact on Compensation from Executive Misconduct Compensation for the Named Executive Officers in 2014 Company Performance CEO Compensation Other Named Officers SUMMARY COMPENSATION TABLE GRANTS OF PLAN-BASED AWARDS OUTSTANDING EQUITY AWARDS AT FISCAL YEAR -END OPTION EXERCISES AND STOCK VESTED POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE -IN-CONTROL COMPENSATION OF DIRECTORS DIRECTOR COMPENSATION TABLE COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION COMPENSATION COMMITTEE REPORT PERFORMANCE GRAPH VOTING PROCEDURE DISSENTERS’ RIGHT OF APPRAISAL AVAILABLE INFORMATION iii 1 1 4 7 8 9 10 10 11 12 12 12 12 13 14 14 14 14 14 15 15 15 16 17 17 17 18 18 19 19 19 20 22 23 24 26 26 26 27 28 28 29 30 30 30 DATE, TIME AND PLACE INFORMATION (1) Unless otherwise indicated the address of each of the beneficial owners identified is c/o the Company, One Daytona Our Annual Meeting of Shareholders will be held on Wednesday, April 8, 2015 commencing at 9:00 A.M. (local time) at THE INTERNATIONAL MOTORSPORTS CENTER, One Daytona Boulevard, Daytona Beach, Florida, 32114. Shareholder registration tables will open at 8:00 A.M. The mailing address of our principal executive offices is One Daytona Boulevard, Daytona Beach, Florida 32114. VOTING SECURITIES AND PRINCIPAL HOLDERS stock. This Information Statement is being mailed commencing on or about March 10, 2015 to all of our shareholders of record as of the Record Date. The Record Date for the Annual Meeting is January 31, 2015. As of the Record Date, we had 26,616,977 shares of class A common stock and 19,966,496 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. Name of Beneficial Owner (1) France Family Group (8) James C. France (9) Betty Jane France (10) Ariel Investments, LLC (11) Blackrock, Inc. (12) Vanguard Group (13) River Road Asset Management, LLC (14) Lesa France Kennedy (15) Brian Z. France (16) John R. Saunders Edsel B. Ford II (17) J. Hyatt Brown (18) Christy F. Harris (19) Morteza Hosseini-Kargar (20) Daniel W. Houser Joel S. Chitwood Brian K. Wilson William P. Graves Sonia M. Green Larry D. Woodard All directors and executive officers as a group (22 persons)(21) Number of Shares of Common Stock Beneficially Owned (2) Class B (4) Class A (3) 18,338,213 6,214,471 6,244,474 6,415,756 2,188,222 1,591,061 1,582,260 794,577 378,140 62,107 35,637 25,147 22,002 21,997 21,350 14,934 14,501 13,747 1,856 1,856 18,179,581 6,121,757 6,244,474 0 0 0 0 732,717 359,056 11,286 0 9,000 150 0 0 0 0 0 0 0 Percentage of Common Stock Beneficially Owned Percentage of Combined Voting Power of Common Stock Class A (5) Class B (6) (7) 40.93 % 18.89 % 19.02 % 24.10 % 8.22 % 5.98 % 5.94 % 2.91 % 1.42 % 0.19 % 0.13 % 0.09 % 0.08 % 0.08 % 0.08 % 0.06 % 0.05 % 0.05 % 0.01 % 0.01 % 91.05 % 30.66 % 31.27 % 0.00 % 0.00 % 0.00 % 0.00 % 3.67 % 1.80 % 0.06 % 0.00 % 0.04 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 72.00 % 24.28 % 24.69 % 5.07 % 1.73 % 1.26 % 1.25 % 2.95 % 1.43 % 0.08 % 0.03 % 0.05 % 0.02 % 0.02 % 0.02 % 0.01 % 0.01 % 0.01 % 0.00 % 0.00 % 18,657,842 18,202,891 41.65 % 91.17 % 72.34 % No. 4 to Schedule 13G, which was filed with the SEC on February 13, 2015. The preceding table sets forth information regarding the beneficial ownership of our class A common stock and our class B common stock as of the Record Date by: (cid:127) All persons known to us who beneficially own 5% or more of either class of our common stock; (cid:127) Each “named executive officer” in the Summary Compensation Table in this Information Statement; (cid:127) Each of our directors and director nominees; and (cid:127) All of our directors, director nominees and officers as a group. As described in the following 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. ISC // 2015 INFORMATION STATEMENT // 1 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 number of shares held by the named beneficial owner assuming (i) the exercise of any options to acquire shares of class A common stock that are held by such beneficial owner that are exercisable within 60 days and (ii) the conversion of all shares of class B common stock held by such beneficial owner into shares of class A common (4) Assumes no conversion of shares of class B common stock into shares of class A common stock. (5) Assumes (i) the exercise of any options to acquire shares of class A common stock that are held by the named beneficial owner that are exercisable within 60 days, (ii) the conversion of all shares of class B common stock held by such beneficial owner into shares of class A common stock, and (iii) the assumption that no other named beneficial owner has exercised any such options or converted any such shares. (6) Reflects current ownership percentage of named beneficial owner’s shares of class B common stock without any conversion of shares of B common stock into shares of class A common stock. (7) Assumes no exercise of options or conversion of shares of class B common stock into shares of class A common stock. (8) The France Family Group consists of Betty Jane France, James C. France, Lesa France Kennedy, Brian Z. France and members of their families and entities controlled by the natural person members of the group. A complete list of all the members of the France Family Group can be found in its 21st amendment to Schedule 13G which was filed with the SEC on February 13, 2015. Amounts shown reflect the non-duplicative aggregate of 158,632 Class A and 13,458,878 Class B shares indicated in the table as beneficially owned by Betty Jane France, James C. France, Lesa France Kennedy and Brian Z. France, as well as 4,732,742 Class B shares held by the adult children of James C. France and the adult child of Lesa France Kennedy. See footnotes (9), (10), (15), and (16). (9) Includes (i) 1,500 Class B shares held of record by Sharon M. France, his spouse, (ii) 3,311,967 Class B shares held of record by Western Opportunity Limited Partnership (“Western Opportunity”), (iii) 29,238 Class B shares held of record by Carl Investment Limited Partnership (“Carl”), (iv) all of the 78,243 Class B shares held of record by Quaternary Investment Company, (v) 130 Class B shares held of record by Carl Two Limited Partnership (“Carl Two”), (vi) all of the 1,749,848 Class B shares held of record by Carl Three Limited Partnership (“Carl Three”), (vii) all of the 919 Class B shares held of record by Carl Two, LLC, (viii) 40,251 Class B shares held of record by Automotive Research Bureau (“ARB”), and (ix) all of the 547,166 Class B shares held of record by SM Holder Limited Partnership. James C. France is the sole shareholder and director of (x) Principal Investment Company, one of the two general partners of Western Opportunity and (y) Quaternary Investment Company, the general partner of Carl. He is also the sole member of Carl Two, LLC, the general partner of Carl Two, and Carl Three, LLC the general partner of Carl Three. Does not include shares held beneficially by the adult children of James C. France or their descendants. (10) Includes (i) 3,264,792 Class B shares held of record by Western Opportunity, (ii) 26,662 Class B shares held of record by WCF Family I, Inc., (iii) 22,194 Class B shares held of record by WCF Family I, Inc. through Western Opportunity, (iv) 40,251 Class B shares held of record by ARB, (v) 801,075 Class B shares held of record by WCF Silver State Limited Partnership, and (vi) 80 Class B shares held of record by WCF Nevada, LLC. (11) This owner’s address is 200 East Randolph Drive, Suite 2900, Chicago, Illinois 60601, as reflected on its Amendment (12) This owner’s address is 40 East 52nd Street, New York, NY 10022, as reflected on its Amendment No. 5 to Schedule 13G, which was filed with the SEC on January 23, 2015. (13) This owner's address is 100 Vanguard Blvd., Malvern, Pennsylvania 19355, as reflected on its Amendment No. 2 to Schedule 13G, which was filed with the SEC on February 10, 2015. (14) This owner’s address is 462 South 4th Street, Suite 1600, Louisville, Kentucky 40202, as reflected on its Schedule 13G, which was filed with the SEC on February 12, 2015. (15) Includes (i) 361,988 Class B shares held of record by BBL Limited Partnership, (ii) 76,071 Class B shares held of record by Western Opportunity, (iii) 26,662 Class B shares held of record by WCF Family I, Inc., (iv) 73,199 Class B shares held of record by Sierra Central LLC, and (v) 22,194 Class B shares held of record by WCF Family I, Inc. through Western Opportunity. Ms. Kennedy is the sole shareholder and a director of BBL Company, the sole general partner of DATE, TIME AND PLACE INFORMATION (1) Unless otherwise indicated the address of each of the beneficial owners identified is c/o the Company, One Daytona Our Annual Meeting of Shareholders will be held on Wednesday, April 8, 2015 commencing at 9:00 A.M. (local time) at THE INTERNATIONAL MOTORSPORTS CENTER, One Daytona Boulevard, Daytona Beach, Florida, 32114. Shareholder registration tables will open at 8:00 A.M. The mailing address of our principal executive offices is One Daytona Boulevard, Daytona Beach, Florida 32114. VOTING SECURITIES AND PRINCIPAL HOLDERS This Information Statement is being mailed commencing on or about March 10, 2015 to all of our shareholders of record as of the Record Date. The Record Date for the Annual Meeting is January 31, 2015. As of the Record Date, we had 26,616,977 shares of class A common stock and 19,966,496 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. 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 number of shares held by the named beneficial owner assuming (i) the exercise of any options to acquire shares of class A common stock that are held by such beneficial owner that are exercisable within 60 days and (ii) the conversion of all shares of class B common stock held by such beneficial owner into shares of class A common stock. (4) Assumes no conversion of shares of class B common stock into shares of class A common stock. (5) Assumes (i) the exercise of any options to acquire shares of class A common stock that are held by the named beneficial owner that are exercisable within 60 days, (ii) the conversion of all shares of class B common stock held by such beneficial owner into shares of class A common stock, and (iii) the assumption that no other named beneficial owner has exercised any such options or converted any such shares. (6) Reflects current ownership percentage of named beneficial owner’s shares of class B common stock without any conversion of shares of B common stock into shares of class A common stock. Number of Shares of Common Stock Beneficially Owned (2) Percentage of Common Stock Beneficially Owned Class A (5) Class B (6) (7) Class A (3) Class B (4) 18,338,213 18,179,581 6,121,757 6,244,474 Percentage of Combined Voting Power of Common Stock 91.05 % 30.66 % 31.27 % 72.00 % 24.28 % 24.69 % 6,214,471 6,244,474 6,415,756 2,188,222 1,591,061 1,582,260 794,577 378,140 62,107 35,637 25,147 22,002 21,997 21,350 14,934 14,501 13,747 1,856 1,856 732,717 359,056 11,286 0 9,000 150 0 0 0 0 0 0 0 0 0 0 0 40.93 % 18.89 % 19.02 % 24.10 % 8.22 % 5.98 % 5.94 % 2.91 % 1.42 % 0.19 % 0.13 % 0.09 % 0.08 % 0.08 % 0.08 % 0.06 % 0.05 % 0.05 % 0.01 % 0.01 % 0.00 % 0.00 % 0.00 % 0.00 % 3.67 % 1.80 % 0.06 % 0.00 % 0.04 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 5.07 % 1.73 % 1.26 % 1.25 % 2.95 % 1.43 % 0.08 % 0.03 % 0.05 % 0.02 % 0.02 % 0.02 % 0.01 % 0.01 % 0.01 % 0.00 % 0.00 % River Road Asset Management, LLC (14) Lesa France Kennedy (15) Name of Beneficial Owner (1) France Family Group (8) James C. France (9) Betty Jane France (10) Ariel Investments, LLC (11) Blackrock, Inc. (12) Vanguard Group (13) Morteza Hosseini-Kargar (20) Brian Z. France (16) John R. Saunders Edsel B. Ford II (17) J. Hyatt Brown (18) Christy F. Harris (19) Daniel W. Houser Joel S. Chitwood Brian K. Wilson William P. Graves Sonia M. Green Larry D. Woodard All directors and executive officers as a group (22 persons)(21) common stock as of the Record Date by: The preceding table sets forth information regarding the beneficial ownership of our class A common stock and our class B (cid:127) All persons known to us who beneficially own 5% or more of either class of our common stock; (cid:127) Each “named executive officer” in the Summary Compensation Table in this Information Statement; (cid:127) Each of our directors and director nominees; and (cid:127) All of our directors, director nominees and officers as a group. As described in the following 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. (9) (7) Assumes no exercise of options or conversion of shares of class B common stock into shares of class A common stock. (8) The France Family Group consists of Betty Jane France, James C. France, Lesa France Kennedy, Brian Z. France and members of their families and entities controlled by the natural person members of the group. A complete list of all the members of the France Family Group can be found in its 21st amendment to Schedule 13G which was filed with the SEC on February 13, 2015. Amounts shown reflect the non-duplicative aggregate of 158,632 Class A and 13,458,878 Class B shares indicated in the table as beneficially owned by Betty Jane France, James C. France, Lesa France Kennedy and Brian Z. France, as well as 4,732,742 Class B shares held by the adult children of James C. France and the adult child of Lesa France Kennedy. See footnotes (9), (10), (15), and (16). Includes (i) 1,500 Class B shares held of record by Sharon M. France, his spouse, (ii) 3,311,967 Class B shares held of record by Western Opportunity Limited Partnership (“Western Opportunity”), (iii) 29,238 Class B shares held of record by Carl Investment Limited Partnership (“Carl”), (iv) all of the 78,243 Class B shares held of record by Quaternary Investment Company, (v) 130 Class B shares held of record by Carl Two Limited Partnership (“Carl Two”), (vi) all of the 1,749,848 Class B shares held of record by Carl Three Limited Partnership (“Carl Three”), (vii) all of the 919 Class B shares held of record by Carl Two, LLC, (viii) 40,251 Class B shares held of record by Automotive Research Bureau (“ARB”), and (ix) all of the 547,166 Class B shares held of record by SM Holder Limited Partnership. James C. France is the sole shareholder and director of (x) Principal Investment Company, one of the two general partners of Western Opportunity and (y) Quaternary Investment Company, the general partner of Carl. He is also the sole member of Carl Two, LLC, the general partner of Carl Two, and Carl Three, LLC the general partner of Carl Three. Does not include shares held beneficially by the adult children of James C. France or their descendants. 18,657,842 18,202,891 41.65 % 91.17 % 72.34 % No. 4 to Schedule 13G, which was filed with the SEC on February 13, 2015. (10) Includes (i) 3,264,792 Class B shares held of record by Western Opportunity, (ii) 26,662 Class B shares held of record by WCF Family I, Inc., (iii) 22,194 Class B shares held of record by WCF Family I, Inc. through Western Opportunity, (iv) 40,251 Class B shares held of record by ARB, (v) 801,075 Class B shares held of record by WCF Silver State Limited Partnership, and (vi) 80 Class B shares held of record by WCF Nevada, LLC. (11) This owner’s address is 200 East Randolph Drive, Suite 2900, Chicago, Illinois 60601, as reflected on its Amendment (12) This owner’s address is 40 East 52nd Street, New York, NY 10022, as reflected on its Amendment No. 5 to Schedule 13G, which was filed with the SEC on January 23, 2015. (13) This owner's address is 100 Vanguard Blvd., Malvern, Pennsylvania 19355, as reflected on its Amendment No. 2 to Schedule 13G, which was filed with the SEC on February 10, 2015. (14) This owner’s address is 462 South 4th Street, Suite 1600, Louisville, Kentucky 40202, as reflected on its Schedule 13G, which was filed with the SEC on February 12, 2015. (15) Includes (i) 361,988 Class B shares held of record by BBL Limited Partnership, (ii) 76,071 Class B shares held of record by Western Opportunity, (iii) 26,662 Class B shares held of record by WCF Family I, Inc., (iv) 73,199 Class B shares held of record by Sierra Central LLC, and (v) 22,194 Class B shares held of record by WCF Family I, Inc. through Western Opportunity. Ms. Kennedy is the sole shareholder and a director of BBL Company, the sole general partner of ISC // 2015 INFORMATION STATEMENT // 2 (16) BBL Limited Partnership. She is also the sole member of Sierra Central LLC, one of the two general partners of Western Opportunity. Does not include shares held beneficially by the adult child of Lesa France Kennedy. Includes (i) 83,168 Class B shares held of record by Western Opportunity, (ii) 26,662 Class B shares held of record by WCF Family I, Inc., (iii) 15,695 Class B shares held of record by Western Opportunity as custodian for minor children, and (iv) 22,194 Class B shares held of record by WCF Family I, Inc. through Western Opportunity. As of the Record Date our officers, directors and nominees were as follows: DIRECTORS, NOMINEES AND OFFICERS (17) Includes 10,000 Class A shares held by a revocable trust. (18) Held of record as joint tenants with Cynthia R. Brown, his spouse. (19) Includes 300 Class A shares held by M. Dale Harris, his spouse, and 1,500 Class A shares held by Mr. Harris as trustee of a Profit Sharing Plan and Trust. Includes 5,000 Class A shares held as trustee of a qualified trust. (20) (21) See footnotes (8) through (10) and footnotes (15) through (20). Chairman of the Board, Assistant Treasurer and Director Vice Chairwoman, Chief Executive Officer and Director Position With the Company President Senior Vice President, Secretary and General Counsel Senior Vice President, Chief Financial Officer and Treasurer Senior Vice President, Business Development & Chief Digital Officer Senior Vice President, Chief Marketing Officer Vice President Vice President, Corporate Services Assistant Secretary Vice President — Deputy General Counsel, Chief Compliance Officer and Name James C. France Lesa France Kennedy John R. Saunders W. Garrett Crotty Daniel W. Houser Craig A. Neeb Daryl Q. Wolfe Joel S. Chitwood Laura E. Jackson Brett M. Scharback Larry Aiello, Jr. J. Hyatt Brown Edsel B. Ford, II Brian Z. France William P. Graves Sonia M. Green Christy F. Harris Morteza Hosseini-Kargar Larry D. Woodard Age 70 53 58 51 63 54 47 45 49 40 64 77 66 52 62 65 69 59 55 Director Director Director Director Director Director Director Director Director Our Board of Directors is divided into three classes, with regular three year staggered terms. Ms. Kennedy and Messrs. Aiello and Brown were elected to hold office until the annual meeting of shareholders to be held in 2015. Ms. Green was elected by the Board of Directors to complete the unexpired term of former director Edward Rensi, and is up for election at the annual meeting of shareholders to be held in 2015. Messrs. Ford, Graves, Harris and Hosseini were elected to hold office until the annual meeting of shareholders to be held in 2016. Messrs. James C. France, Brian Z. France and Woodard were elected to hold office until the annual meeting of shareholders to be held in 2017. For the election of directors at the Annual Meeting of Shareholders in April 2015, the Board has accepted the recommendation of the Nominating and Corporate Governance Committee and approved the nomination of Ms. Kennedy, Ms. Green and Messrs. Aiello and Brown as directors to serve three-year terms and hold office until the annual meeting of shareholders to be held in 2018. James C. France is the uncle of Lesa France Kennedy and Brian Z. France who are siblings. There are no other family relationships among our executive officers and directors. Directors Holding Office Until 2015 Annual Meeting Ms. Lesa France Kennedy, a director since 1984, became Vice Chairwoman July 2007 and was named our Chief Executive Officer in June 2009. Previously, she served as our President from April 2003 until June 2009. Ms. Kennedy served as our Executive Vice President from January 1996 until April 2003, Secretary from 1987 until January 1996 and served as our Treasurer from 1989 until January 1996. Ms. Kennedy is also Vice Chairwoman, Executive Vice President and Assistant Treasurer of NASCAR. Ms. Kennedy’s experience in the motorsports industry, her knowledge of our Company and proven leadership ability are among the factors the Board considered with respect to her nomination for re-election to the Board. Mr. Larry Aiello, Jr., a director since 2003, served as the President and Chief Executive Officer of Corning Cable Systems, which is part of Corning, Inc. from 2002 until his retirement in 2008. Mr. Aiello joined Corning, Inc. in 1973. He was named senior vice president and chief of staff-Corning Optical Communications in 2000. Mr. Aiello’s business background and experience enhance his ability to analyze and contribute valuable insight on matters such as financing and capital management. ISC // 2015 INFORMATION STATEMENT // 3 BBL Limited Partnership. She is also the sole member of Sierra Central LLC, one of the two general partners of Western Opportunity. Does not include shares held beneficially by the adult child of Lesa France Kennedy. (16) Includes (i) 83,168 Class B shares held of record by Western Opportunity, (ii) 26,662 Class B shares held of record by WCF Family I, Inc., (iii) 15,695 Class B shares held of record by Western Opportunity as custodian for minor children, and (iv) 22,194 Class B shares held of record by WCF Family I, Inc. through Western Opportunity. (19) Includes 300 Class A shares held by M. Dale Harris, his spouse, and 1,500 Class A shares held by Mr. Harris as trustee (17) Includes 10,000 Class A shares held by a revocable trust. (18) Held of record as joint tenants with Cynthia R. Brown, his spouse. of a Profit Sharing Plan and Trust. (20) Includes 5,000 Class A shares held as trustee of a qualified trust. (21) See footnotes (8) through (10) and footnotes (15) through (20). As of the Record Date our officers, directors and nominees were as follows: DIRECTORS, NOMINEES AND OFFICERS Name James C. France Lesa France Kennedy John R. Saunders W. Garrett Crotty Daniel W. Houser Craig A. Neeb Daryl Q. Wolfe Joel S. Chitwood Laura E. Jackson Brett M. Scharback Larry Aiello, Jr. J. Hyatt Brown Edsel B. Ford, II Brian Z. France William P. Graves Sonia M. Green Christy F. Harris Morteza Hosseini-Kargar Larry D. Woodard Age 70 53 58 51 63 54 47 45 49 40 64 77 66 52 62 65 69 59 55 Position With the Company Chairman of the Board, Assistant Treasurer and Director Vice Chairwoman, Chief Executive Officer and Director President Senior Vice President, Secretary and General Counsel Senior Vice President, Chief Financial Officer and Treasurer Senior Vice President, Business Development & Chief Digital Officer Senior Vice President, Chief Marketing Officer Vice President Vice President, Corporate Services Vice President — Deputy General Counsel, Chief Compliance Officer and Assistant Secretary Director Director Director Director Director Director Director Director Director Our Board of Directors is divided into three classes, with regular three year staggered terms. Ms. Kennedy and Messrs. Aiello and Brown were elected to hold office until the annual meeting of shareholders to be held in 2015. Ms. Green was elected by the Board of Directors to complete the unexpired term of former director Edward Rensi, and is up for election at the annual meeting of shareholders to be held in 2015. Messrs. Ford, Graves, Harris and Hosseini were elected to hold office until the annual meeting of shareholders to be held in 2016. Messrs. James C. France, Brian Z. France and Woodard were elected to hold office until the annual meeting of shareholders to be held in 2017. For the election of directors at the Annual Meeting of Shareholders in April 2015, the Board has accepted the recommendation of the Nominating and Corporate Governance Committee and approved the nomination of Ms. Kennedy, Ms. Green and Messrs. Aiello and Brown as directors to serve three-year terms and hold office until the annual meeting of shareholders to be held in 2018. James C. France is the uncle of Lesa France Kennedy and Brian Z. France who are siblings. There are no other family relationships among our executive officers and directors. Directors Holding Office Until 2015 Annual Meeting Ms. Lesa France Kennedy, a director since 1984, became Vice Chairwoman July 2007 and was named our Chief Executive Officer in June 2009. Previously, she served as our President from April 2003 until June 2009. Ms. Kennedy served as our Executive Vice President from January 1996 until April 2003, Secretary from 1987 until January 1996 and served as our Treasurer from 1989 until January 1996. Ms. Kennedy is also Vice Chairwoman, Executive Vice President and Assistant Treasurer of NASCAR. Ms. Kennedy’s experience in the motorsports industry, her knowledge of our Company and proven leadership ability are among the factors the Board considered with respect to her nomination for re-election to the Board. Mr. Larry Aiello, Jr., a director since 2003, served as the President and Chief Executive Officer of Corning Cable Systems, which is part of Corning, Inc. from 2002 until his retirement in 2008. Mr. Aiello joined Corning, Inc. in 1973. He was named senior vice president and chief of staff-Corning Optical Communications in 2000. Mr. Aiello’s business background and experience enhance his ability to analyze and contribute valuable insight on matters such as financing and capital management. ISC // 2015 INFORMATION STATEMENT // 4 In addition, his contributions as a member and then Chairman of our Audit Committee are among the factors the Board considered with respect to his nomination for re-election to the Board. of NASCAR. Mr. France’s extensive business and motorsports industry experience, knowledge of our Company and proven leadership ability are among the factors the Board considered in concluding he is qualified to serve as a Board member. Mr. J. Hyatt Brown, a director since 1987, serves as the Chairman of Brown & Brown, Inc. and has been in the insurance business since 1959. Mr. Brown also currently serves as a director of NextEra Energy, Inc. and Verisk Analytics, Inc. Until January 2010, Mr. Brown served on the Board of Rock-Tenn Company, until April 2008, he served on the Board of SunTrust Banks, Inc. and until December 2006, he served on the Board of BellSouth Corporation, each a publicly held company. Mr. Brown’s extensive business experience, service on boards of other publicly traded companies and proven leadership abilities are among the factors the Board considered with respect to his nomination for re-election to the Board. Mr. Brown is our lead independent director. The Board has adopted a guideline that Board candidates should not be eligible for election to the Board if 75 years of age or older, unless the Nominating and Corporate Governance Committee recommends to the Board a candidate because he or she continues to satisfy the Board's criteria and maintains relevant and current business experience. Because of the above experience and abilities, and his continued service as our lead independent director, the Nominating and Corporate Governance Committee (with Mr. Brown excusing himself from such vote) recommended Mr. Brown stand for election at the Annual Meeting of Shareholders in April 2015. Ms. Sonia M. Green, a director since April 2013, currently serves on the board of The Soup Kitchen of Boynton Beach and is a member of the 4Kids Business Development Council. From 2001 to 2008, Ms. Green served as Director of Diversity Marketing and Sales for General Motors Corporation. She also previously served on the board of the Greater Miami Chamber of Commerce and the Avon Products Foundation. Ms. Green’s nationally recognized leadership in marketing and brand communications for more than 20 years, with a specialty in multicultural/diversity marketing, as well as her experience as a trusted spokesperson on diversity and marketing issues for both Spanish and English media outlets, are among the factors the Board considered with respect to her nomination for re-election to the Board. Directors Holding Office Until 2016 Annual Meeting Mr. Edsel B. Ford, II, a director since November 2007, is a director and consultant for Ford Motor Company. Mr. Ford is a retired Vice President of Ford Motor Company and former President and Chief Operating Officer of Ford Motor Credit Company. Mr. Ford was an employee of Ford Motor Company for over 25 years. Mr. Ford’s experience as an executive at a major automobile manufacturer, along with his extensive experience in the motorsports industry are among the factors the Board considered in concluding he is qualified to serve as a Board member. Mr. William P. Graves, a director since September 2003, has served as President and Chief Executive Officer of the American Trucking Association since January 2003. Mr. Graves served as Governor of the State of Kansas from January 1995 until January 2003. Mr. Graves’ experience as a governor, as well as his knowledge of governmental affairs are among the factors the Board considered in concluding he is qualified to serve as a Board member. Mr. Christy F. Harris, a director since 1984, has been engaged in the private practice of business and commercial law for more than 40 years and currently is Of Counsel with Kinsey, Vincent, Pyle, P.L. Mr. Harris served as a Managing Director of AMA Pro Racing until 2013. Mr. Harris also has served on the Board of ACCUS (Automobile Competition Committee for the United States) for over five years and as a judge of the FIM International Tribunal for Motorsports Controversies and Disputes. Mr. Harris’ experience as an attorney and counselor to businesses and their management, along with his extensive knowledge of our business, are among the factors the Board considered in concluding he is qualified to serve as a Board member. Mr. Morteza Hosseini-Kargar, a director since 2007, is the Chairman and Chief Executive Officer of Intervest Construction, Inc. and has served in that role for over five years. Mr. Hosseini’s experience in real estate development and successful ownership and operation of businesses are among the factors the Board considered in concluding he is qualified to serve as a Board member. Directors Holding Office Until 2017 Annual Meeting Mr. James C. France, a director since 1970, has served as our Chairman since July 2007, and as our Assistant Treasurer since June 2009. Previously, he served as our Chairman and Chief Executive Officer from July 2007 until June 2009 and he served as Vice Chairman and Chief Executive Officer from April 2003 until July 2007. He also served as our President and Chief Operating Officer from 1987 until 2003. Mr. France is also Vice Chairman, Executive Vice President and Assistant Secretary ISC // 2015 INFORMATION STATEMENT // 5 Mr. Brian Z. France, a director since 1994, has served as NASCAR’s Chairman and Chief Executive Officer since September 2003, Executive Vice President from February 2001 to September 2003 and Vice Chairman from January 2003 to September 2003. Previously, he served as NASCAR’s Senior Vice President from 1999 to 2001. Mr. France’s extensive experience in and knowledge of the motorsports industry, in particular NASCAR, are among the factors the Board considered in concluding he is qualified to serve as a Board member. Mr. Larry D. Woodard, a director since April 2013, is President and CEO at Graham Stanley Advertising, a firm he founded in 2010, which integrates traditional and digital advertising. Prior to that, Mr. Woodard served as the President and CEO of Vigilante Advertising for over a decade. Mr. Woodard’s 26 years of experience as a highly regarded and successful advertising industry executive, his experience in business, and being a weekly columnist and on air commentator regarding advertising and marketing issues, are among the factors the Board considered in concluding he is qualified to serve as a Board member. Ms. Green and Messrs. Aiello, Brown, Ford, Graves, Hosseini and Woodard have been determined by the Board to be “independent” as that term is presently defined in Rule 4200(a)(15) of the NASDAQ listing standards. Officers Mr. Joel S. Chitwood has been a Vice President for us since August 2009, and in August 2010 was named President of Daytona International Speedway, one of our subsidiaries. Prior to that, he served as President and Chief Operating Officer of Indianapolis Motor Speedway from November 2004 through August 2009. He served as Senior Vice President, Business Affairs for Indianapolis Motor Speedway from October 2002 to November 2004. Mr. Chitwood also served as Vice President and General Manager of Raceway Associates, LLC, which oversaw construction of Chicagoland Speedway from 1999 to 2002. Mr. W. Garrett Crotty became a Senior Vice President in April 2004. Mr. Crotty was named a Vice President in July 1999 and since 1996 has served as Secretary and General Counsel. Mr. Crotty has also served as General Counsel of NASCAR since 1996 and as a member of NASCAR’s Board of Directors since 2006. Mr. Daniel W. Houser, a Certified Public Accountant, was named a Senior Vice President in June 2009. He became Chief Financial Officer in February 2009 and has been a Vice President since 2004. Prior to his appointment as our Chief Financial Officer, Mr. Houser had been our Controller and Chief Accounting Officer for over five years. Ms. Laura E. Jackson was named Vice President, Corporate Services in February 2013, after serving as our Vice President, Human Resources from April 2010 through January 2013. Prior to that, she had served as our Managing Director, Human Resources from January 2009 through March 2010. Prior to joining the Company, Ms. Jackson served as Senior Vice President, Human Resources for Textron, Inc. from September 2003 through January 2009. Mr. Craig A. Neeb has served as Senior Vice President, Business Development and Chief Digital Officer since April 2014. Mr. Neeb was named our Vice President, Business Development and Chief Digital Officer in February 2013, after serving as our Vice President — Multi Channel Marketing from June 2009 through January 2013. Mr. Neeb also served as our Chief Information Officer from November 2000 until February 2013. Mr. Neeb also served as our Managing Director of Marketing Services from 2008 to June 2009. Mr. John R. Saunders was appointed our President in June 2009. Previously he served as Executive Vice President from April 2004 until June 2009 and from April 2003 until June 2009 served as our Chief Operating Officer. He had served as Senior Vice President-Operations from July 1999 until April 2003, at which time he was appointed Senior Vice President and Chief Operating Officer. He had served as a Vice President since 1997 and was President of Watkins Glen International, a subsidiary of the Company, from 1983 until 1997. Mr. Brett M. Scharback has served as Vice President — Deputy General Counsel, Chief Compliance Officer and Assistant Secretary since April 2010. Prior to that, he served as Managing Director, Deputy General Counsel from May 2009 through March 2010 and served as our Associate General Counsel from October 2004 through April 2009. Prior to joining us, Mr. Scharback was an Associate in the Washington, D.C. office of Baker Botts L.L.P. Mr. J. Hyatt Brown, a director since 1987, serves as the Chairman of Brown & Brown, Inc. and has been in the insurance business since 1959. Mr. Brown also currently serves as a director of NextEra Energy, Inc. and Verisk Analytics, Inc. Until January 2010, Mr. Brown served on the Board of Rock-Tenn Company, until April 2008, he served on the Board of SunTrust Banks, Inc. and until December 2006, he served on the Board of BellSouth Corporation, each a publicly held company. Mr. Brown’s extensive business experience, service on boards of other publicly traded companies and proven leadership abilities are among the factors the Board considered with respect to his nomination for re-election to the Board. Mr. Brown is our lead independent director. The Board has adopted a guideline that Board candidates should not be eligible for election to the Board if 75 years of age or older, unless the Nominating and Corporate Governance Committee recommends to the Board a candidate because he or she continues to satisfy the Board's criteria and maintains relevant and current business experience. Because of the above experience and abilities, and his continued service as our lead independent director, the Nominating and Corporate Governance Committee (with Mr. Brown excusing himself from such vote) recommended Mr. Brown stand for election at the Annual Meeting of Shareholders in April 2015. Ms. Sonia M. Green, a director since April 2013, currently serves on the board of The Soup Kitchen of Boynton Beach and is a Marketing and Sales for General Motors Corporation. She also previously served on the board of the Greater Miami Chamber of Commerce and the Avon Products Foundation. Ms. Green’s nationally recognized leadership in marketing and brand communications for more than 20 years, with a specialty in multicultural/diversity marketing, as well as her experience as a trusted spokesperson on diversity and marketing issues for both Spanish and English media outlets, are among the factors the Board considered with respect to her nomination for re-election to the Board. Directors Holding Office Until 2016 Annual Meeting Mr. Edsel B. Ford, II, a director since November 2007, is a director and consultant for Ford Motor Company. Mr. Ford is a retired Vice President of Ford Motor Company and former President and Chief Operating Officer of Ford Motor Credit Company. Mr. Ford was an employee of Ford Motor Company for over 25 years. Mr. Ford’s experience as an executive at a major automobile manufacturer, along with his extensive experience in the motorsports industry are among the factors the Board considered in concluding he is qualified to serve as a Board member. Mr. William P. Graves, a director since September 2003, has served as President and Chief Executive Officer of the American Trucking Association since January 2003. Mr. Graves served as Governor of the State of Kansas from January 1995 until January 2003. Mr. Graves’ experience as a governor, as well as his knowledge of governmental affairs are among the factors the Board considered in concluding he is qualified to serve as a Board member. Mr. Christy F. Harris, a director since 1984, has been engaged in the private practice of business and commercial law for more than 40 years and currently is Of Counsel with Kinsey, Vincent, Pyle, P.L. Mr. Harris served as a Managing Director of AMA Pro Racing until 2013. Mr. Harris also has served on the Board of ACCUS (Automobile Competition Committee for the United States) for over five years and as a judge of the FIM International Tribunal for Motorsports Controversies and Disputes. Mr. Harris’ experience as an attorney and counselor to businesses and their management, along with his extensive knowledge of our business, are among the factors the Board considered in concluding he is qualified to serve as a Board member. Mr. Morteza Hosseini-Kargar, a director since 2007, is the Chairman and Chief Executive Officer of Intervest Construction, Inc. and has served in that role for over five years. Mr. Hosseini’s experience in real estate development and successful ownership and operation of businesses are among the factors the Board considered in concluding he is qualified to serve as a Board member. Directors Holding Office Until 2017 Annual Meeting Mr. James C. France, a director since 1970, has served as our Chairman since July 2007, and as our Assistant Treasurer since June 2009. Previously, he served as our Chairman and Chief Executive Officer from July 2007 until June 2009 and he served as Vice Chairman and Chief Executive Officer from April 2003 until July 2007. He also served as our President and Chief Operating Officer from 1987 until 2003. Mr. France is also Vice Chairman, Executive Vice President and Assistant Secretary In addition, his contributions as a member and then Chairman of our Audit Committee are among the factors the Board considered with respect to his nomination for re-election to the Board. of NASCAR. Mr. France’s extensive business and motorsports industry experience, knowledge of our Company and proven leadership ability are among the factors the Board considered in concluding he is qualified to serve as a Board member. Mr. Brian Z. France, a director since 1994, has served as NASCAR’s Chairman and Chief Executive Officer since September 2003, Executive Vice President from February 2001 to September 2003 and Vice Chairman from January 2003 to September 2003. Previously, he served as NASCAR’s Senior Vice President from 1999 to 2001. Mr. France’s extensive experience in and knowledge of the motorsports industry, in particular NASCAR, are among the factors the Board considered in concluding he is qualified to serve as a Board member. Mr. Larry D. Woodard, a director since April 2013, is President and CEO at Graham Stanley Advertising, a firm he founded in 2010, which integrates traditional and digital advertising. Prior to that, Mr. Woodard served as the President and CEO of Vigilante Advertising for over a decade. Mr. Woodard’s 26 years of experience as a highly regarded and successful advertising industry executive, his experience in business, and being a weekly columnist and on air commentator regarding advertising and marketing issues, are among the factors the Board considered in concluding he is qualified to serve as a Board member. Ms. Green and Messrs. Aiello, Brown, Ford, Graves, Hosseini and Woodard have been determined by the Board to be “independent” as that term is presently defined in Rule 4200(a)(15) of the NASDAQ listing standards. member of the 4Kids Business Development Council. From 2001 to 2008, Ms. Green served as Director of Diversity Officers Mr. Joel S. Chitwood has been a Vice President for us since August 2009, and in August 2010 was named President of Daytona International Speedway, one of our subsidiaries. Prior to that, he served as President and Chief Operating Officer of Indianapolis Motor Speedway from November 2004 through August 2009. He served as Senior Vice President, Business Affairs for Indianapolis Motor Speedway from October 2002 to November 2004. Mr. Chitwood also served as Vice President and General Manager of Raceway Associates, LLC, which oversaw construction of Chicagoland Speedway from 1999 to 2002. Mr. W. Garrett Crotty became a Senior Vice President in April 2004. Mr. Crotty was named a Vice President in July 1999 and since 1996 has served as Secretary and General Counsel. Mr. Crotty has also served as General Counsel of NASCAR since 1996 and as a member of NASCAR’s Board of Directors since 2006. Mr. Daniel W. Houser, a Certified Public Accountant, was named a Senior Vice President in June 2009. He became Chief Financial Officer in February 2009 and has been a Vice President since 2004. Prior to his appointment as our Chief Financial Officer, Mr. Houser had been our Controller and Chief Accounting Officer for over five years. Ms. Laura E. Jackson was named Vice President, Corporate Services in February 2013, after serving as our Vice President, Human Resources from April 2010 through January 2013. Prior to that, she had served as our Managing Director, Human Resources from January 2009 through March 2010. Prior to joining the Company, Ms. Jackson served as Senior Vice President, Human Resources for Textron, Inc. from September 2003 through January 2009. Mr. Craig A. Neeb has served as Senior Vice President, Business Development and Chief Digital Officer since April 2014. Mr. Neeb was named our Vice President, Business Development and Chief Digital Officer in February 2013, after serving as our Vice President — Multi Channel Marketing from June 2009 through January 2013. Mr. Neeb also served as our Chief Information Officer from November 2000 until February 2013. Mr. Neeb also served as our Managing Director of Marketing Services from 2008 to June 2009. Mr. John R. Saunders was appointed our President in June 2009. Previously he served as Executive Vice President from April 2004 until June 2009 and from April 2003 until June 2009 served as our Chief Operating Officer. He had served as Senior Vice President-Operations from July 1999 until April 2003, at which time he was appointed Senior Vice President and Chief Operating Officer. He had served as a Vice President since 1997 and was President of Watkins Glen International, a subsidiary of the Company, from 1983 until 1997. Mr. Brett M. Scharback has served as Vice President — Deputy General Counsel, Chief Compliance Officer and Assistant Secretary since April 2010. Prior to that, he served as Managing Director, Deputy General Counsel from May 2009 through March 2010 and served as our Associate General Counsel from October 2004 through April 2009. Prior to joining us, Mr. Scharback was an Associate in the Washington, D.C. office of Baker Botts L.L.P. ISC // 2015 INFORMATION STATEMENT // 6 Mr. Daryl Q. Wolfe has served as Senior Vice President, Chief Marketing Officer since April 2012. Prior to that, he served as Vice President, Chief Marketing Officer from April 2007 to April 2012. He had previously served as Vice President, Sales and Media from 2005 to 2007. Mr. Wolfe had served as Managing Director, Marketing Partnerships from 2003 to 2005, and as Senior Director, Marketing Partnerships from 2001 to 2003. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS All of the racing events that take place during our fiscal year (from December 1 to November 30) are sanctioned by various racing organizations such as the American Historic Racing Motorcycle Association, the American Motorcyclist Association, the Automobile Racing Club of America, the American Sportbike Racing Association - Championship Cup Series, the Federation Internationale de L’Automobile, the Federation Internationale Motocycliste, International Motor Sports Association (“IMSA”), Historic Sportscar Racing, IndyCar Series, NASCAR, National Hot Rod Association, the Porsche Club of America, the Sports Car Club of America, the Sportscar Vintage Racing Association, the United States Auto Club and the World Karting Association. NASCAR, which sanctions many of our principal racing events, is a member of the France Family Group which controls over 72.0 percent of the combined voting power of our outstanding stock and some members of which serve as directors and officers of our Company. In accordance with NASCAR's standard sanction agreements, we 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 us to NASCAR for disbursement to competitors, which are exclusive of NASCAR sanction fees, totaled approximately $134.5 million for the year ended November 30, 2014. We have outstanding receivables related to NASCAR and its affiliates of approximately $19.3 million at November 30, 2014. Under current agreements, NASCAR contracts directly with certain network providers for television rights to the entire NASCAR Sprint Cup, Xfinity and Camping World Truck series schedules. Under the terms of this arrangement, NASCAR retains 10.0 percent of the gross broadcast rights fees allocated to each NASCAR Sprint Cup, Xfinity and Camping World Truck series event as a component of its sanction fees. The promoter records 90.0 percent of the gross broadcast rights fees as revenue and then records 25.0 percent of the gross broadcast rights fees as part of its awards to the competitors. Ultimately, the promoter retains 65.0 percent of the net cash proceeds from the gross broadcast rights fees allocated to the event. Our television broadcast and ancillary rights fees received from NASCAR for the NASCAR Sprint Cup, Xfinity and Camping World Truck series events conducted at its wholly owned facilities were approximately $302.9 million in fiscal year 2014. In addition, we share a variety of expenses with NASCAR in the ordinary course of business. NASCAR pays rent, as well as a related maintenance fee (allocated based on square footage), to us for office space in Daytona Beach, Florida. NASCAR pays us for radio, program and strategic initiative advertising, hospitality and suite rentals, various tickets and credentials, catering services, participation in a NASCAR racing event banquet, and track and other equipment rentals based on similar prices paid by unrelated, third party purchasers of similar items. We pay NASCAR for certain advertising, participation in NASCAR racing series banquets, the use of NASCAR trademarks and intellectual images and production space for Sprint Vision based on similar prices paid by unrelated, third party purchasers of similar items. Our payments to NASCAR for Motor Racing Network’s broadcast rights to NASCAR Camping World Truck races represent an agreed-upon percentage of our advertising revenues attributable to such race broadcasts. NASCAR also reimburses us for 50.0 percent of the compensation paid to certain personnel working in our legal, risk management and transportation departments, as well as 50.0 percent of the compensation expense associated with certain receptionists. We reimburse NASCAR for 50.0 percent of the compensation paid to certain personnel working in NASCAR’s legal department. NASCAR’s reimbursement for use of our mailroom, janitorial services, security services, catering, graphic arts, photo and publishing services, telephone system and our reimbursement of NASCAR for use of corporate aircraft is based on actual usage or an allocation of total actual usage. The aggregate amount received from NASCAR by us for shared expenses, net of amounts paid by us for shared expenses, totaled approximately $10.5 million during fiscal 2014. IMSA, a wholly owned subsidiary of NASCAR, sanctions various events at certain of our facilities. Standard IMSA 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 IMSA to participants in the events. Sanction fees paid by us to IMSA totaled approximately $1.3 million for the year ended November 30, 2014. ISC // 2015 INFORMATION STATEMENT // 7 AMA Pro Racing, an entity controlled by a member of the France Family Group, sanctions various events at certain of our facilities. Standard AMA Pro Racing 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 AMA Pro Racing to participants in the events. Sanction fees paid by us to AMA Pro Racing totaled approximately $0.5 million during fiscal 2014. We strive to ensure, and management believes that, the terms of our transactions with NASCAR, IMSA and AMA Pro Racing are no less favorable to us than could be obtained in arms-length negotiations. Certain members of the France Family Group paid us for the utilization of security services, event planning, event tickets, purchase of catering services, maintenance services, and certain equipment. The amounts paid for these items were based on actual costs incurred; similar prices paid by unrelated third party purchasers of similar items or estimated fair market values. The net amount received by us for these items, totaled approximately $320,000 during fiscal 2014. Crotty, Bartlett & Kelly, P.A. (“Crotty, Bartlett & Kelly”), is a law firm controlled by family members of W. Garrett Crotty, one of our executive officers. We engage Crotty, Bartlett & Kelly for certain legal and consulting services. The aggregate amount paid to Crotty, Bartlett & Kelly by us for legal and consulting services totaled approximately $31,000 during fiscal 2014. J. Hyatt Brown, one of our directors, serves as Chairman of Brown & Brown, Inc. (“Brown & Brown”). Brown & Brown has received commissions for serving as our insurance broker for several of our insurance policies, including our property and casualty policy and certain employee benefit programs. The aggregate commissions received by Brown & Brown in connection with our policies were approximately $492,000 during fiscal 2014. In fiscal 2014, Brown & Brown paid us approximately $100,000 for the purchase of tickets. The amounts paid for these items were based on actual costs incurred; similar prices paid by unrelated third party purchasers of similar items or estimated fair market values. One of our directors, Christy F. Harris, is Of Counsel to Kinsey, Vincent Pyle, L.C., a law firm that provided legal services to us during fiscal 2014. We paid approximately $78,000 for these services in fiscal 2014, which were charged to us on the same basis as those provided other clients. Approval of Related Party Transactions We have adopted written policies and procedures for review, approval and ratification of transactions with related persons. These policies are evidenced in the Code of Conduct. In addition, our employees are subject to similar policies concerning conflicts of interest, business ethics and conduct, as contained in our Employee Handbook. The Audit Committee is charged in its Charter with the ultimate responsibility for the review and approval of all related party transactions meeting the thresholds that require disclosure pursuant to Item 404 of Regulation S-K. All proposed transactions (regardless of the amount involved) with any director or executive officer (or their affiliates) are required to be submitted to the Audit Committee for approval prior to the transaction taking place. As part of our disclosure controls, all related party transactions are reported monthly and reviewed by the Disclosure Committee quarterly, which includes the Chief Compliance Officer and the Director of Internal Audit. The Disclosure Committee is responsible for elevating matters for Audit Committee consideration. While the standard used to evaluate a transaction will vary depending upon the particular circumstances, the goal is to make sure that we are treated fairly and on the same basis as transactions with parties that are not related. There have been no instances during the last fiscal year where such policies and procedures were not followed, nor were there any transactions listed in “Certain Relationships and Related Transactions” that were not reviewed by the Audit Committee. DIRECTOR MEETINGS AND COMMITTEES Our Board of Directors met three times during fiscal 2014. Our Board of Directors has an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, a Growth & Development Committee and a Financing and Stock Repurchase Committee. The functions of the Audit Committee (which presently consists of Messrs. Aiello (Chair), Brown, and Graves) include (i) meeting with auditors to discuss the scope, fees, timing and results of the annual audit, (ii) reviewing our consolidated financial statements, and (iii) performing other duties deemed appropriate by the Board. The Board of Directors has adopted a written charter for the Audit Committee, which is available on our website at www.internationalspeedwaycorporation.com. The Board of Directors has determined that Messrs. Aiello and Brown are qualified as audit committee financial experts (as defined Mr. Daryl Q. Wolfe has served as Senior Vice President, Chief Marketing Officer since April 2012. Prior to that, he served as Vice President, Chief Marketing Officer from April 2007 to April 2012. He had previously served as Vice President, Sales and Media from 2005 to 2007. Mr. Wolfe had served as Managing Director, Marketing Partnerships from 2003 to 2005, and as Senior Director, Marketing Partnerships from 2001 to 2003. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS All of the racing events that take place during our fiscal year (from December 1 to November 30) are sanctioned by various racing organizations such as the American Historic Racing Motorcycle Association, the American Motorcyclist Association, the Automobile Racing Club of America, the American Sportbike Racing Association - Championship Cup Series, the Federation Internationale de L’Automobile, the Federation Internationale Motocycliste, International Motor Sports Association (“IMSA”), Historic Sportscar Racing, IndyCar Series, NASCAR, National Hot Rod Association, the Porsche Club of America, the Sports Car Club of America, the Sportscar Vintage Racing Association, the United States Auto Club and the World Karting Association. NASCAR, which sanctions many of our principal racing events, is a member of the France Family Group which controls over 72.0 percent of the combined voting power of our outstanding stock and some members of which serve as directors and officers of our Company. In accordance with NASCAR's standard sanction agreements, we 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 us to NASCAR for disbursement to competitors, which are exclusive of NASCAR sanction fees, totaled approximately $134.5 million for the year ended November 30, 2014. We have outstanding receivables related to NASCAR and its affiliates of approximately $19.3 million at November 30, 2014. Under current agreements, NASCAR contracts directly with certain network providers for television rights to the entire NASCAR Sprint Cup, Xfinity and Camping World Truck series schedules. Under the terms of this arrangement, NASCAR retains 10.0 percent of the gross broadcast rights fees allocated to each NASCAR Sprint Cup, Xfinity and Camping World Truck series event as a component of its sanction fees. The promoter records 90.0 percent of the gross broadcast rights fees as revenue and then records 25.0 percent of the gross broadcast rights fees as part of its awards to the competitors. Ultimately, the promoter retains 65.0 percent of the net cash proceeds from the gross broadcast rights fees allocated to the event. Our television series events conducted at its wholly owned facilities were approximately $302.9 million in fiscal year 2014. In addition, we share a variety of expenses with NASCAR in the ordinary course of business. NASCAR pays rent, as well as a related maintenance fee (allocated based on square footage), to us for office space in Daytona Beach, Florida. NASCAR pays us for radio, program and strategic initiative advertising, hospitality and suite rentals, various tickets and credentials, catering services, participation in a NASCAR racing event banquet, and track and other equipment rentals based on similar prices paid by unrelated, third party purchasers of similar items. We pay NASCAR for certain advertising, participation in NASCAR racing series banquets, the use of NASCAR trademarks and intellectual images and production space for Sprint Vision based on similar prices paid by unrelated, third party purchasers of similar items. Our payments to NASCAR for Motor Racing Network’s broadcast rights to NASCAR Camping World Truck races represent an agreed-upon percentage of our advertising revenues attributable to such race broadcasts. NASCAR also reimburses us for 50.0 percent of the compensation paid to certain personnel working in our legal, risk management and transportation departments, as well as 50.0 percent of the compensation expense associated with certain receptionists. We reimburse NASCAR for 50.0 percent of the compensation paid to certain personnel working in NASCAR’s legal department. NASCAR’s reimbursement for use of our mailroom, janitorial services, security services, catering, graphic arts, photo and publishing services, telephone system and our reimbursement of NASCAR for use of corporate aircraft is based on actual usage or an allocation of total actual usage. The aggregate amount received from NASCAR by us for shared expenses, net of amounts paid by us for shared expenses, totaled approximately $10.5 million during fiscal 2014. IMSA, a wholly owned subsidiary of NASCAR, sanctions various events at certain of our facilities. Standard IMSA 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 IMSA to participants in the events. Sanction fees paid by us to IMSA totaled approximately $1.3 million for the year ended November 30, 2014. AMA Pro Racing, an entity controlled by a member of the France Family Group, sanctions various events at certain of our facilities. Standard AMA Pro Racing 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 AMA Pro Racing to participants in the events. Sanction fees paid by us to AMA Pro Racing totaled approximately $0.5 million during fiscal 2014. We strive to ensure, and management believes that, the terms of our transactions with NASCAR, IMSA and AMA Pro Racing are no less favorable to us than could be obtained in arms-length negotiations. Certain members of the France Family Group paid us for the utilization of security services, event planning, event tickets, purchase of catering services, maintenance services, and certain equipment. The amounts paid for these items were based on actual costs incurred; similar prices paid by unrelated third party purchasers of similar items or estimated fair market values. The net amount received by us for these items, totaled approximately $320,000 during fiscal 2014. Crotty, Bartlett & Kelly, P.A. (“Crotty, Bartlett & Kelly”), is a law firm controlled by family members of W. Garrett Crotty, one of our executive officers. We engage Crotty, Bartlett & Kelly for certain legal and consulting services. The aggregate amount paid to Crotty, Bartlett & Kelly by us for legal and consulting services totaled approximately $31,000 during fiscal 2014. J. Hyatt Brown, one of our directors, serves as Chairman of Brown & Brown, Inc. (“Brown & Brown”). Brown & Brown has received commissions for serving as our insurance broker for several of our insurance policies, including our property and casualty policy and certain employee benefit programs. The aggregate commissions received by Brown & Brown in connection with our policies were approximately $492,000 during fiscal 2014. In fiscal 2014, Brown & Brown paid us approximately $100,000 for the purchase of tickets. The amounts paid for these items were based on actual costs incurred; similar prices paid by unrelated third party purchasers of similar items or estimated fair market values. One of our directors, Christy F. Harris, is Of Counsel to Kinsey, Vincent Pyle, L.C., a law firm that provided legal services to us during fiscal 2014. We paid approximately $78,000 for these services in fiscal 2014, which were charged to us on the same basis as those provided other clients. broadcast and ancillary rights fees received from NASCAR for the NASCAR Sprint Cup, Xfinity and Camping World Truck Approval of Related Party Transactions We have adopted written policies and procedures for review, approval and ratification of transactions with related persons. These policies are evidenced in the Code of Conduct. In addition, our employees are subject to similar policies concerning conflicts of interest, business ethics and conduct, as contained in our Employee Handbook. The Audit Committee is charged in its Charter with the ultimate responsibility for the review and approval of all related party transactions meeting the thresholds that require disclosure pursuant to Item 404 of Regulation S-K. All proposed transactions (regardless of the amount involved) with any director or executive officer (or their affiliates) are required to be submitted to the Audit Committee for approval prior to the transaction taking place. As part of our disclosure controls, all related party transactions are reported monthly and reviewed by the Disclosure Committee quarterly, which includes the Chief Compliance Officer and the Director of Internal Audit. The Disclosure Committee is responsible for elevating matters for Audit Committee consideration. While the standard used to evaluate a transaction will vary depending upon the particular circumstances, the goal is to make sure that we are treated fairly and on the same basis as transactions with parties that are not related. There have been no instances during the last fiscal year where such policies and procedures were not followed, nor were there any transactions listed in “Certain Relationships and Related Transactions” that were not reviewed by the Audit Committee. DIRECTOR MEETINGS AND COMMITTEES Our Board of Directors met three times during fiscal 2014. Our Board of Directors has an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, a Growth & Development Committee and a Financing and Stock Repurchase Committee. The functions of the Audit Committee (which presently consists of Messrs. Aiello (Chair), Brown, and Graves) include (i) meeting with auditors to discuss the scope, fees, timing and results of the annual audit, (ii) reviewing our consolidated financial statements, and (iii) performing other duties deemed appropriate by the Board. The Board of Directors has adopted a written charter for the Audit Committee, which is available on our website at www.internationalspeedwaycorporation.com. The Board of Directors has determined that Messrs. Aiello and Brown are qualified as audit committee financial experts (as defined ISC // 2015 INFORMATION STATEMENT // 8 by the SEC) and that all of the members of the Audit Committee are “independent” (as independence is presently defined in Rule 4200(a)(15) of the NASDAQ listing standards). The Audit Committee met five times during fiscal 2014. The functions of the Compensation Committee (which presently consists of Messrs. Ford (Chair), Graves and Woodard) include (i) reviewing existing compensation levels of executive officers, (ii) making compensation recommendations to management and the Board, and (iii) performing other duties deemed appropriate by the Board. The Board of Directors has adopted a written charter for the Compensation Committee, which is available on our website at www.internationalspeedwaycorporation.com. The Board has determined that all the members of the Compensation Committee are “independent” (as independence is presently defined in Rule 4200(a)(15) of the NASDAQ listing standards). The Compensation Committee met four times during fiscal 2014. The functions of the Nominating and Corporate Governance Committee (which presently consists of Messrs. Brown (Chair), Ford and Graves) include (i) selecting and recommending to the Board director nominees for election at each annual meeting of shareholders, as well as director nominees to fill vacancies arising between annual meetings, (ii) reviewing and recommending to the Board changes to the compensation package for directors, (iii) reviewing and, if appropriate, making changes to the responsibilities of directors and the qualifications for new nominees, (iv) annually assessing the Board’s effectiveness as a whole as well as the effectiveness of the individual directors and the Board’s various committees, (v) reviewing and recommending to the Board changes to the corporate governance standards for the Board and its committees, and (vi) performing other duties deemed appropriate by the Board. The Nominating and Corporate Governance Committee met once during fiscal 2014. The functions of the Growth and Development Committee (which presently consists of Ms. Green and Messrs. Aiello, Brown, Ford, Brian Z. France, Harris (Chair) and Hosseini) include (i) reviewing the actual and proposed internal growth and external development projects of the Company, (ii) making recommendations to management and the Board regarding matters that come before the Committee, and (iii) performing other duties deemed appropriate by the Board. The Growth and Development Committee met four times during fiscal 2014. The functions of the Financing and Stock Repurchase Committee (which presently consists of Messrs. Aiello, Brown, James C. France (Chair) and Harris) include (i) reviewing, as needed, the actual and proposed mechanisms used by the Company to obtain financing for the Company, (ii) overseeing and monitoring the stock repurchase activities of the Company, (iii) exercising authority delegated to it by the Board to approve changes to the Company’s stock repurchase program within limits established by the Board, (iv) making recommendations to management and the Board regarding matters that come before the Committee, and (v) performing other duties deemed appropriate by the Board. The Financing and Stock Repurchase Committee met twice during fiscal 2014. During fiscal 2014, all of the directors except Mr. Brian Z. France attended at least 75% of the aggregate of (1) the total number of meetings of the Board of Directors and (2) the total number of meetings held by all committees of the Board on which they served. BOARD LEADERSHIP Our Board has the flexibility to determine whether the roles of Chairman of the Board and Chief Executive Officer should be separated or combined. The Board makes this decision based on its evaluation of the circumstances and the Company’s specific needs. Effective June 2009, upon the retirement of James C. France from the position of Chief Executive Officer, the roles of Chairman and Chief Executive Officer were separated. James C. France continues to serve as Chairman of the Board, while Lesa France Kennedy serves as Vice Chair and Chief Executive Officer. Prior to June 2009, the positions of Chairman and Chief Executive Officer were held jointly by James C. France. We believe that this leadership structure is desirable under present circumstances because it allows Ms. Kennedy to focus her efforts on running our business and managing it in the best interests of our shareholders, while we are able to continue to benefit from Mr. James C. France’s extensive business and motorsports industry experience, knowledge of our Company and proven leadership ability. We believe that having Mr. James C. France as Chairman benefits the Company in that it allows him to use his expertise in both industry relationships and sanctioning body partnerships, as well as his extensive Company knowledge, in setting the strategic agenda of the Board. ISC // 2015 INFORMATION STATEMENT // 9 Our lead independent director, J. Hyatt Brown, coordinates providing feedback from other non-management members of the Board to the Chief Executive Officer and other management regarding business issues and risk. Mr. Brown, through his role as Chairman of the Nominating and Corporate Governance Committee, also manages the process of annual director self- assessment and evaluation of the Board as a whole. RISK OVERSIGHT Our Board of Directors takes an active role in the oversight of risks impacting our Company. While management is responsible for managing the Company’s risk on a daily basis and for bringing to the Board’s attention areas of risk which are most material to our business, the Board and management work closely to ensure that integrity and accountability are integrated into our operations. The Board, including through certain of its committees, discussed in more detail below (which are comprised solely of independent directors), and through regular meetings of the independent directors without management present, regularly reviews areas of risk (both compliance and business risk) to us and advises and directs management on the scope and implementation of policies, strategy and other actions designed to mitigate such risks. Many of the direct risk oversight functions are performed by the Audit Committee and our internal audit staff. Specific examples of risks primarily overseen by the Audit Committee include risks related to the preparation of our financial statements, disclosure controls and procedures, internal controls and procedures required by the Sarbanes-Oxley Act, accounting, financial and auditing risks, matters reported to the Audit Committee through our Internal Audit Department and through anonymous reporting procedures, cyber security, and regulations and risks associated with related party transactions. Through our regular compliance work related to the Sarbanes-Oxley Act, we have created entity level controls that are validated on a regular basis by our Internal Audit Department. These controls are designed to help prevent control failures as well as assist in the awareness of a control failure. Members of our management team also participate in an enterprise risk management committee, which regularly evaluates those risks deemed to be significant to us. The Audit Committee receives regular updates regarding those risks identified by the enterprise risk management committee. The Nominating and Corporate Governance Committee regularly monitors our compliance with corporate governance standards and regulations. The Compensation Committee reviews and evaluates potential risks related to compensation programs for executive and certain non-executive employees of the Company, as further described below in the section entitled “Compensation Discussion and Analysis.” The Growth and Development Committee reviews and evaluates risks related to any strategic ventures, transactions or capital expenditures. In addition to the foregoing, the Board has adopted a Code of Ethics, which is applicable to all of our employees, including the directors, our principal executive officer, the principal financial officer and the principal accounting officer. The Code of Ethics is designed, among other things, to deter wrongdoing and promote ethical conduct, full and accurate reporting in all our filings with the SEC, and compliance with applicable laws. The Code of Ethics mandates the maintenance of a 24 hour hotline that any employee can use to report, anonymously if they so choose, any suspected fraud, financial impropriety or other alleged wrongdoing. All calls are handled by the Chief Compliance Officer, Vice President, Corporate Services and/or Director of Internal Audit, as appropriate, who regularly report to the Audit Committee on calls received. A copy of the current Code of Ethics is available on our website at www.internationalspeedwaycorporation.com. DIRECTOR NOMINATION PROCESS A current copy of the Nominating and Corporate Governance Committee charter is available on our website at www.internationalspeedwaycorporation.com. Each director on the Nominating and Corporate Governance Committee has been determined by the Board to be “independent” (as independence is presently defined by the NASDAQ listing standards). As part of its process and procedures, the Nominating and Corporate Governance Committee considers director candidates recommended by shareholders. All recommendations of director candidates by shareholders following the proper procedures (as set forth below) will be furnished to the Nominating and Corporate Governance Committee and will be considered in the same manner and according to the same criteria as would all other director candidates. There have been no material changes to the procedures by which shareholders may recommend nominees to our Board. Shareholders who wish to nominate directors for election at an annual meeting of shareholders are required to follow the procedures contained in Article VI of our Amended and Restated Articles of Incorporation, which are available on our website by the SEC) and that all of the members of the Audit Committee are “independent” (as independence is presently defined in Rule 4200(a)(15) of the NASDAQ listing standards). The Audit Committee met five times during fiscal 2014. The functions of the Compensation Committee (which presently consists of Messrs. Ford (Chair), Graves and Woodard) include (i) reviewing existing compensation levels of executive officers, (ii) making compensation recommendations to management and the Board, and (iii) performing other duties deemed appropriate by the Board. The Board of Directors has adopted a written charter for the Compensation Committee, which is available on our website at www.internationalspeedwaycorporation.com. The Board has determined that all the members of the Compensation Committee are “independent” (as independence is presently defined in Rule 4200(a)(15) of the NASDAQ listing standards). The Compensation Committee met four times during fiscal 2014. The functions of the Nominating and Corporate Governance Committee (which presently consists of Messrs. Brown (Chair), Ford and Graves) include (i) selecting and recommending to the Board director nominees for election at each annual meeting of shareholders, as well as director nominees to fill vacancies arising between annual meetings, (ii) reviewing and recommending to the Board changes to the compensation package for directors, (iii) reviewing and, if appropriate, making changes to the responsibilities of directors and the qualifications for new nominees, (iv) annually assessing the Board’s effectiveness as a whole as well as the effectiveness of the individual directors and the Board’s various committees, (v) reviewing and recommending to the Board changes to the corporate governance standards for the Board and its committees, and (vi) performing other duties deemed appropriate by the Board. The Nominating and Corporate Governance Committee met once during fiscal 2014. The functions of the Growth and Development Committee (which presently consists of Ms. Green and Messrs. Aiello, Brown, Ford, Brian Z. France, Harris (Chair) and Hosseini) include (i) reviewing the actual and proposed internal growth and external development projects of the Company, (ii) making recommendations to management and the Board regarding matters that come before the Committee, and (iii) performing other duties deemed appropriate by the Board. The Growth and Development Committee met four times during fiscal 2014. The functions of the Financing and Stock Repurchase Committee (which presently consists of Messrs. Aiello, Brown, James C. France (Chair) and Harris) include (i) reviewing, as needed, the actual and proposed mechanisms used by the Company to obtain financing for the Company, (ii) overseeing and monitoring the stock repurchase activities of the Company, (iii) exercising authority delegated to it by the Board to approve changes to the Company’s stock repurchase program within limits established by the Board, (iv) making recommendations to management and the Board regarding matters that come before the Committee, and (v) performing other duties deemed appropriate by the Board. The Financing and Stock Repurchase Committee met twice during fiscal 2014. During fiscal 2014, all of the directors except Mr. Brian Z. France attended at least 75% of the aggregate of (1) the total number of meetings of the Board of Directors and (2) the total number of meetings held by all committees of the Board on which they served. BOARD LEADERSHIP needs. Effective June 2009, upon the retirement of James C. France from the position of Chief Executive Officer, the roles of Chairman and Chief Executive Officer were separated. James C. France continues to serve as Chairman of the Board, while Lesa France Kennedy serves as Vice Chair and Chief Executive Officer. Prior to June 2009, the positions of Chairman and Chief Executive Officer were held jointly by James C. France. We believe that this leadership structure is desirable under present circumstances because it allows Ms. Kennedy to focus her efforts on running our business and managing it in the best interests of our shareholders, while we are able to continue to benefit from Mr. James C. France’s extensive business and motorsports industry experience, knowledge of our Company and proven leadership ability. We believe that having Mr. James C. France as Chairman benefits the Company in that it allows him to use his expertise in both industry relationships and sanctioning body partnerships, as well as his extensive Company knowledge, in setting the strategic agenda of the Board. Our lead independent director, J. Hyatt Brown, coordinates providing feedback from other non-management members of the Board to the Chief Executive Officer and other management regarding business issues and risk. Mr. Brown, through his role as Chairman of the Nominating and Corporate Governance Committee, also manages the process of annual director self- assessment and evaluation of the Board as a whole. RISK OVERSIGHT Our Board of Directors takes an active role in the oversight of risks impacting our Company. While management is responsible for managing the Company’s risk on a daily basis and for bringing to the Board’s attention areas of risk which are most material to our business, the Board and management work closely to ensure that integrity and accountability are integrated into our operations. The Board, including through certain of its committees, discussed in more detail below (which are comprised solely of independent directors), and through regular meetings of the independent directors without management present, regularly reviews areas of risk (both compliance and business risk) to us and advises and directs management on the scope and implementation of policies, strategy and other actions designed to mitigate such risks. Many of the direct risk oversight functions are performed by the Audit Committee and our internal audit staff. Specific examples of risks primarily overseen by the Audit Committee include risks related to the preparation of our financial statements, disclosure controls and procedures, internal controls and procedures required by the Sarbanes-Oxley Act, accounting, financial and auditing risks, matters reported to the Audit Committee through our Internal Audit Department and through anonymous reporting procedures, cyber security, and regulations and risks associated with related party transactions. Through our regular compliance work related to the Sarbanes-Oxley Act, we have created entity level controls that are validated on a regular basis by our Internal Audit Department. These controls are designed to help prevent control failures as well as assist in the awareness of a control failure. Members of our management team also participate in an enterprise risk management committee, which regularly evaluates those risks deemed to be significant to us. The Audit Committee receives regular updates regarding those risks identified by the enterprise risk management committee. The Nominating and Corporate Governance Committee regularly monitors our compliance with corporate governance standards and regulations. The Compensation Committee reviews and evaluates potential risks related to compensation programs for executive and certain non-executive employees of the Company, as further described below in the section entitled “Compensation Discussion and Analysis.” The Growth and Development Committee reviews and evaluates risks related to any strategic ventures, transactions or capital expenditures. In addition to the foregoing, the Board has adopted a Code of Ethics, which is applicable to all of our employees, including the directors, our principal executive officer, the principal financial officer and the principal accounting officer. The Code of Ethics is designed, among other things, to deter wrongdoing and promote ethical conduct, full and accurate reporting in all our filings with the SEC, and compliance with applicable laws. The Code of Ethics mandates the maintenance of a 24 hour hotline that any employee can use to report, anonymously if they so choose, any suspected fraud, financial impropriety or other alleged wrongdoing. All calls are handled by the Chief Compliance Officer, Vice President, Corporate Services and/or Director of Internal Audit, as appropriate, who regularly report to the Audit Committee on calls received. A copy of the current Code of Ethics is available on our website at www.internationalspeedwaycorporation.com. Our Board has the flexibility to determine whether the roles of Chairman of the Board and Chief Executive Officer should be separated or combined. The Board makes this decision based on its evaluation of the circumstances and the Company’s specific DIRECTOR NOMINATION PROCESS A current copy of the Nominating and Corporate Governance Committee charter is available on our website at www.internationalspeedwaycorporation.com. Each director on the Nominating and Corporate Governance Committee has been determined by the Board to be “independent” (as independence is presently defined by the NASDAQ listing standards). As part of its process and procedures, the Nominating and Corporate Governance Committee considers director candidates recommended by shareholders. All recommendations of director candidates by shareholders following the proper procedures (as set forth below) will be furnished to the Nominating and Corporate Governance Committee and will be considered in the same manner and according to the same criteria as would all other director candidates. There have been no material changes to the procedures by which shareholders may recommend nominees to our Board. Shareholders who wish to nominate directors for election at an annual meeting of shareholders are required to follow the procedures contained in Article VI of our Amended and Restated Articles of Incorporation, which are available on our website ISC // 2015 INFORMATION STATEMENT // 10 at www.internationalspeedwaycorporation.com. Nominations must be in writing, addressed to the Secretary, and must be received in writing not less than 120 days nor more than 180 days prior to the first anniversary of the date of our notice of annual meeting of shareholders provided for the previous year’s annual meeting. The shareholder’s notice to the Secretary must set forth (i) certain information regarding the nominee, such as name, age and principal occupation, and (ii) certain information regarding the shareholder(s) such as the name and record address of the shareholder(s) and the number of shares of our capital stock such shareholder(s) own. No person nominated by shareholders will be eligible for election as a director unless nominated in accordance with these procedures. There were no shareholder nominations submitted for the 2015 annual meeting of shareholders. Nominations by shareholders for the 2016 annual meeting must be received by the Secretary between September 6, 2015 and November 5, 2015. As stated in its charter, the Nominating and Corporate Governance Committee will annually assess the Board’s effectiveness, including the core competencies and qualifications of members of the Board. If the Nominating and Corporate Governance Committee deems it necessary, it may select and retain an executive search firm to identify qualified candidates for nomination to serve as members of the Board. The Nominating and Corporate Governance Committee will consider all nominees to our Board of Directors, and make its recommendations to the full Board, which will then decide whether to nominate a Board candidate. The Nominating and Corporate Governance Committee will consider each nominee’s skill, experience, knowledge and judgment, and believes that members of and nominees to the Board should reflect expertise in one or more of the following areas important to us: accounting and finance, business of motorsports, mergers and acquisitions, leadership, business and management, strategic planning, government relations, investor relations, legal issues, executive leadership development and executive compensation. Further, the assessment of a nominee’s qualifications will include consideration of the nominee’s ability to use sound judgment; service on the boards of directors of other companies, public and private; integrity, honesty, fairness and independence; understanding of our business; and interest and willingness to serve on the Board and dedicate the requisite time and attention to service on the Board. All nominees to our Board will be considered by the Nominating and Corporate Governance Committee with these factors in mind. As part of the Nominating and Corporate Governance Committee’s assessment of a prospective director nominee’s skill, experience, knowledge and judgment, the committee considers diversity of background and personal experience. Ideally, the Board should be composed of persons having a diversity of skills, background and experience that are useful to us and our present and future needs. However, the Nominating and Corporate Governance Committee does not have a formal policy specifying how diversity of background and personal experience should be applied and assessed in identifying or evaluating director nominees. When considering potential nominees for the Board, the Nominating and Corporate Governance Committee considers the standards above and each potential nominee’s individual qualifications in light of the needs of the Board at such time and its anticipated needs in the future. It is our policy to hold the annual meeting of directors immediately following the annual meeting of shareholders. All Board members are invited to attend the annual meeting of shareholders and are expected to attend, but are not required to attend. In fiscal 2014, one member of the Board did not attend the annual meeting of shareholders. SHAREHOLDER COMMUNICATIONS TO THE BOARD Shareholders may contact an individual director, the Board as a group, or a specified Board committee or group, including the non-employee directors as a group, by mailing correspondence in the following manner: International Speedway Corporation c/o Legal Department One Daytona Blvd. Daytona Beach, Florida 32114 Attention: Board of Directors Each communication should specify the applicable addressee or addressees to be contacted as well as the general topic of the communication. Our Legal Department will initially receive and process communications before forwarding them to the addressee. All communications from shareholders will be promptly forwarded to the addressee(s). ISC // 2015 INFORMATION STATEMENT // 11 CODE OF ETHICS Our Audit Committee has adopted a code of ethics that applies to all of our employees, including our senior financial officers, our principal executive officer and our principal financial officer. A copy of that code of ethics is available on our website at www.internationalspeedwaycorporation.com. We intend to satisfy our disclosure obligations regarding any amendment to, or waiver from, any provision of our code of ethics that applies to any of our senior financial officers by posting that information on our website, as well as making all public disclosures required by the SEC. At the present time there have been no amendments or waivers. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Based upon a review of Forms 3 and 4 and amendments thereto furnished to us during the fiscal year ended November 30, 2014, Forms 5 and amendments thereto furnished to us with respect to the fiscal year ended November 30, 2014, and written representations furnished to us, there is no person who, at any time during the fiscal year, was a director, officer, or beneficial owner of more than ten percent of any class of our securities that failed to file on a timely basis the reports required by section 16(a) of the Exchange Act during the fiscal year ended November 30, 2014. REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM Ernst & Young LLP, and its predecessors have served as our auditors since 1966. Representatives of Ernst & Young LLP will be present at the Annual Meeting of Shareholders with the opportunity to make a statement, if they so desire, and will be available to respond to appropriate questions from shareholders. The following table presents fees for all professional services provided by Ernst & Young LLP for the audit of our consolidated financial statements for the years ended November 30, 2014 and 2013, and fees billed for other services rendered by Ernst & Young LLP during those periods. Fee Category Audit fees (1) Audit-related fees (2) Tax fees (3) All other fees (4) Fiscal Year 2014 2013 804,370 $ 793,735 — $ — $ — $ 175,000 — — $ $ $ $ (1) Audit fees consisted principally of professional services rendered for the annual integrated audit of our consolidated financial statements and the effectiveness of our internal control over financial reporting, the review of our quarterly consolidated financial statements and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements. (2) Audit-related fees consists of professional services rendered for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not included in Audit Fees above. There were no such services rendered during fiscal 2014 and 2013. (3) (4) Tax fees consisted principally of professional services rendered for tax compliance and tax advice. There were no other fees for products and services that are not disclosed in the previous categories. AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES The Audit Committee, or one of its members who has been delegated pre-approval authority, considers and has approval authority over all engagements of the independent auditors. If a decision on an engagement is made by an individual member, the decision is presented at the next meeting of the Audit Committee. All of the engagements resulting in the fees disclosed above for fiscal 2014 and 2013 were approved by the Audit Committee prior to the engagement. received in writing not less than 120 days nor more than 180 days prior to the first anniversary of the date of our notice of annual meeting of shareholders provided for the previous year’s annual meeting. The shareholder’s notice to the Secretary must set forth (i) certain information regarding the nominee, such as name, age and principal occupation, and (ii) certain information regarding the shareholder(s) such as the name and record address of the shareholder(s) and the number of shares of our capital stock such shareholder(s) own. No person nominated by shareholders will be eligible for election as a director unless nominated in accordance with these procedures. There were no shareholder nominations submitted for the 2015 annual meeting of shareholders. Nominations by shareholders for the 2016 annual meeting must be received by the Secretary between As stated in its charter, the Nominating and Corporate Governance Committee will annually assess the Board’s effectiveness, including the core competencies and qualifications of members of the Board. If the Nominating and Corporate Governance Committee deems it necessary, it may select and retain an executive search firm to identify qualified candidates for nomination to serve as members of the Board. The Nominating and Corporate Governance Committee will consider all nominees to our Board of Directors, and make its recommendations to the full Board, which will then decide whether to nominate a Board candidate. The Nominating and Corporate Governance Committee will consider each nominee’s skill, experience, knowledge and judgment, and believes that members of and nominees to the Board should reflect expertise in one or more of the following areas important to us: accounting and finance, business of motorsports, mergers and acquisitions, leadership, business and management, strategic planning, government relations, investor relations, legal issues, executive leadership development and executive compensation. Further, the assessment of a nominee’s qualifications will include consideration of the nominee’s ability to use sound judgment; service on the boards of directors of other companies, public and private; integrity, honesty, fairness and independence; understanding of our business; and interest and willingness to serve on the Board and dedicate the requisite time and attention to service on the Board. All nominees to our Board will be considered by the Nominating and Corporate Governance Committee with these factors in mind. As part of the Nominating and Corporate Governance Committee’s assessment of a prospective director nominee’s skill, experience, knowledge and judgment, the committee considers diversity of background and personal experience. Ideally, the Board should be composed of persons having a diversity of skills, background and experience that are useful to us and our present and future needs. However, the Nominating and Corporate Governance Committee does not have a formal policy specifying how diversity of background and personal experience should be applied and assessed in identifying or evaluating director nominees. When considering potential nominees for the Board, the Nominating and Corporate Governance Committee considers the standards above and each potential nominee’s individual qualifications in light of the needs of the Board at such time and its anticipated needs in the future. It is our policy to hold the annual meeting of directors immediately following the annual meeting of shareholders. All Board fiscal 2014, one member of the Board did not attend the annual meeting of shareholders. SHAREHOLDER COMMUNICATIONS TO THE BOARD Shareholders may contact an individual director, the Board as a group, or a specified Board committee or group, including the non-employee directors as a group, by mailing correspondence in the following manner: International Speedway Corporation c/o Legal Department One Daytona Blvd. Daytona Beach, Florida 32114 Attention: Board of Directors Each communication should specify the applicable addressee or addressees to be contacted as well as the general topic of the communication. Our Legal Department will initially receive and process communications before forwarding them to the addressee. All communications from shareholders will be promptly forwarded to the addressee(s). at www.internationalspeedwaycorporation.com. Nominations must be in writing, addressed to the Secretary, and must be CODE OF ETHICS Our Audit Committee has adopted a code of ethics that applies to all of our employees, including our senior financial officers, our principal executive officer and our principal financial officer. A copy of that code of ethics is available on our website at www.internationalspeedwaycorporation.com. We intend to satisfy our disclosure obligations regarding any amendment to, or waiver from, any provision of our code of ethics that applies to any of our senior financial officers by posting that information on our website, as well as making all public disclosures required by the SEC. At the present time there have been no amendments or waivers. September 6, 2015 and November 5, 2015. SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Based upon a review of Forms 3 and 4 and amendments thereto furnished to us during the fiscal year ended November 30, 2014, Forms 5 and amendments thereto furnished to us with respect to the fiscal year ended November 30, 2014, and written representations furnished to us, there is no person who, at any time during the fiscal year, was a director, officer, or beneficial owner of more than ten percent of any class of our securities that failed to file on a timely basis the reports required by section 16(a) of the Exchange Act during the fiscal year ended November 30, 2014. REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM Ernst & Young LLP, and its predecessors have served as our auditors since 1966. Representatives of Ernst & Young LLP will be present at the Annual Meeting of Shareholders with the opportunity to make a statement, if they so desire, and will be available to respond to appropriate questions from shareholders. The following table presents fees for all professional services provided by Ernst & Young LLP for the audit of our consolidated financial statements for the years ended November 30, 2014 and 2013, and fees billed for other services rendered by Ernst & Young LLP during those periods. Fee Category Audit fees (1) Audit-related fees (2) Tax fees (3) All other fees (4) Fiscal Year 2014 2013 $ $ $ $ 804,370 $ — $ — $ — $ 793,735 — 175,000 — (1) Audit fees consisted principally of professional services rendered for the annual integrated audit of our consolidated financial statements and the effectiveness of our internal control over financial reporting, the review of our quarterly consolidated financial statements and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements. members are invited to attend the annual meeting of shareholders and are expected to attend, but are not required to attend. In (2) Audit-related fees consists of professional services rendered for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and are not included in Audit Fees above. There were no such services rendered during fiscal 2014 and 2013. (3) (4) Tax fees consisted principally of professional services rendered for tax compliance and tax advice. There were no other fees for products and services that are not disclosed in the previous categories. AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES The Audit Committee, or one of its members who has been delegated pre-approval authority, considers and has approval authority over all engagements of the independent auditors. If a decision on an engagement is made by an individual member, the decision is presented at the next meeting of the Audit Committee. All of the engagements resulting in the fees disclosed above for fiscal 2014 and 2013 were approved by the Audit Committee prior to the engagement. ISC // 2015 INFORMATION STATEMENT // 12 REPORT OF THE AUDIT COMMITTEE EXECUTIVE COMPENSATION The following is the report of the Audit Committee with respect to the Company’s audited financial statements for the fiscal year ended November 30, 2014. The information contained in this report shall not be deemed “soliciting material” or otherwise considered “filed” with the SEC, and such information shall not be incorporated by reference into any future filing under the Securities Act or the Exchange Act except to the extent the Company specifically incorporates such information by reference of such filing. The Audit Committee consists of three members: Messrs. Aiello, Brown and Graves. The Board of Directors has adopted a written charter for the Audit Committee, which is available on our website at www.internationalspeedwaycorporation.com. The Board of Directors has determined that Messrs. Aiello and Brown are qualified as audit committee financial experts (as defined by the SEC) and that all of the members of the Audit Committee are “independent” (as independence is presently defined in Rule 4200(a)(15) of the NASDAQ listing standards). The Audit Committee oversees the Company's financial reporting process on behalf of the Board of Directors. The Audit Committee also is responsible for appointing the independent registered public accounting firm, reviewing services provided by the independent registered public accounting firm and internal audit department, evaluating the Company’s accounting policies and the Company’s system of internal controls that management and the Board of Directors have established, reviewing significant financial transactions, and overseeing enterprise risk management. The Audit Committee does not itself prepare financial statements or perform audits, and its members are not auditors or certifiers of the Company’s financial statements. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the audited consolidated financial statements in the Annual Report with Company management including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements. The Audit Committee reviewed with Ernst & Young LLP (“EY”), the Company's independent registered public accounting firm, which is responsible for expressing an opinion on the conformity of those audited consolidated financial statements with U.S. generally accepted accounting principles, its judgments as to the quality, not just the acceptability, of the Company's accounting principles and such other matters as are required to be discussed with the Audit Committee by Public Company Accounting Oversight Board Audit Standard No. 16, Communications with Audit Committee, other standards of the Public Company Accounting Oversight Board (United States), rules of the Securities and Exchange Commission, and other applicable regulations. In addition, the Audit Committee has discussed with the independent registered public accounting firm the firm's independence from Company management and the Company, including the matters in the letter from the firm required by PCAOB Rule 3526, Communication with Audit Committees Concerning Independence, and considered the scope of the audit, audit fees, and the compatibility of non-audit services with the independent registered public accounting firm's independence, including PCAOB Rule 3524, Audit Committee Pre-approval of Certain Tax Services. The Audit Committee approves the audit and non-audit services and related budget in advance and reviews a quarterly report on such fees. In April 2014, the Audit Committee approved the selection of EY which performed the fiscal 2014 annual audit of the Company's financial statements and the effectiveness of the Company's internal control over financial reporting. The Audit Committee has reviewed and discussed the audited financial statements for the year ended November 30, 2014 with the Company’s management and EY. The Audit Committee has also reviewed management's report on its assessment of the effectiveness of the Company's internal control over financial reporting and EY's report on the effectiveness of the Company's internal control over financial reporting. The Audit Committee met with the internal auditors and EY, with and without management present, to discuss the results of their examinations, their evaluations of the Company's internal control, including internal control over financial reporting, and the overall quality of the Company's financial reporting. The Audit Committee held five meetings during fiscal year 2014. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the financial statements referred to above be included in the Annual Report on Form 10-K for the year ended November 30, 2014 for filing with the Securities and Exchange Commission. COMPENSATION DISCUSSION AND ANALYSIS Overview and Objectives of Compensation Program The goal of the compensation programs for our named executive officers is to retain and reward leaders who create long-term value for our shareholders. This goal affects the compensation elements we use and our compensation decisions. We have designed and implemented our compensation programs for our named executives to: (cid:127) (cid:127) (cid:127) reward them for financial and operating performance; align their interests with those of our shareholders; and encourage them to remain with the Company. These elements consist of: (cid:127) salary and annual discretionary bonus; Most of our compensation elements simultaneously fulfill one or more of our performance, alignment and retention objectives. (cid:127) non-equity (cash) incentive compensation based upon annually determined performance criteria; (cid:127) equity incentive compensation based upon annually determined performance criteria combined with a time based vesting schedule; and (cid:127) other benefits. In deciding on the type and amount of compensation for each executive, we focus almost exclusively on each executive’s current pay, rather than historic pay. We combine the compensation elements for each executive in a manner we believe optimizes the value for our shareholders and supports the goals of our compensation programs. We provide a combination of pay elements with the goal of aligning executive incentives with shareholder value. The three major elements of our executive compensation — base salary, annual cash awards (which include bonuses and non-equity incentives) and long-term equity incentives — simultaneously fulfill one or more of our performance, alignment and retention The following summarizes the compensation elements we use as tools to reward, retain and align the performance expectations objectives. of our named executives. Base Salary, Non-Equity Incentives and Cash Bonuses Base salaries for our named executives are designed to provide competitive levels of compensation dependent on the scope of their responsibilities, their leadership skills and values, and their performance. For each named executive officer, we pay annual non-equity incentives each February for the prior year’s performance based upon management’s evaluation and the Compensation Committee’s qualitative assessment of the executives’ performance. This short term compensation element is in line with the stated goal of our compensation programs, namely retaining and rewarding leaders who create long-term value for our shareholders. The incentives were determined using the criteria approved by the Compensation Committee for performance against normalized corporate financial performance measures based on budget of revenue; operating margin based on budget, and capital allocation based on budget. For fiscal 2014, the corporate financial measurements for these non-equity incentives were weighted as follows: 1) revenue based on budget as 34%, 2) operating margin based on budget as 33% and 3) capital allocation based on budget as 33%. In addition to amounts paid pursuant to our non-equity incentive plan, the Compensation Committee retains discretion to award cash bonuses where performance may warrant. We also award a small annual holiday cash bonus based on seniority. Long —Term Compensation — 2006 Long Term Incentive Plan Larry Aiello, Jr., Chairman J. Hyatt Brown William P. Graves We emphasize long-term variable compensation at the senior executive levels because of our desire to reward effective long- term management decision making and our desire to retain executive officers who have the potential to impact both our short- term and long-term profitability. We believe that providing Restricted Stock Units (RSUs) is an effective means to focus our ISC // 2015 INFORMATION STATEMENT // 13 REPORT OF THE AUDIT COMMITTEE EXECUTIVE COMPENSATION The following is the report of the Audit Committee with respect to the Company’s audited financial statements for the fiscal year ended November 30, 2014. The information contained in this report shall not be deemed “soliciting material” or otherwise considered “filed” with the SEC, and such information shall not be incorporated by reference into any future filing under the Securities Act or the Exchange Act except to the extent the Company specifically incorporates such information by reference of such filing. The Audit Committee consists of three members: Messrs. Aiello, Brown and Graves. The Board of Directors has adopted a written charter for the Audit Committee, which is available on our website at www.internationalspeedwaycorporation.com. The Board of Directors has determined that Messrs. Aiello and Brown are qualified as audit committee financial experts (as defined by the SEC) and that all of the members of the Audit Committee are “independent” (as independence is presently defined in Rule 4200(a)(15) of the NASDAQ listing standards). The Audit Committee oversees the Company's financial reporting process on behalf of the Board of Directors. The Audit Committee also is responsible for appointing the independent registered public accounting firm, reviewing services provided by the independent registered public accounting firm and internal audit department, evaluating the Company’s accounting policies and the Company’s system of internal controls that management and the Board of Directors have established, reviewing significant financial transactions, and overseeing enterprise risk management. The Audit Committee does not itself prepare financial statements or perform audits, and its members are not auditors or certifiers of the Company’s financial statements. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the audited consolidated financial statements in the Annual Report with Company management including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements. The Audit Committee reviewed with Ernst & Young LLP (“EY”), the Company's independent registered public accounting firm, which is responsible for expressing an opinion on the conformity of those audited consolidated financial statements with U.S. generally accepted accounting principles, its judgments as to the quality, not just the acceptability, of the Company's accounting principles and such other matters as are required to be discussed with the Audit Committee by Public Company Accounting Oversight Board Audit Standard No. 16, Communications with Audit Committee, other standards of the Public Company Accounting Oversight Board (United States), rules of the Securities and Exchange Commission, and other applicable regulations. In addition, the Audit Committee has discussed with the independent registered public accounting firm the firm's independence from Company management and the Company, including the matters in the letter from the firm required by PCAOB Rule 3526, Communication with Audit Committees Concerning Independence, and considered the scope of the audit, audit fees, and the compatibility of non-audit services with the independent registered public accounting firm's independence, including PCAOB Rule 3524, Audit Committee Pre-approval of Certain Tax Services. The Audit Committee approves the audit and non-audit services and related budget in advance and reviews a quarterly report on such fees. In April 2014, the Audit Committee approved the selection of EY which performed the fiscal 2014 annual audit of the Company's financial statements and the effectiveness of the Company's internal control over financial reporting. The Audit Committee has reviewed and discussed the audited financial statements for the year ended November 30, 2014 with the Company’s management and EY. The Audit Committee has also reviewed management's report on its assessment of the effectiveness of the Company's internal control over financial reporting and EY's report on the effectiveness of the Company's internal control over financial reporting. The Audit Committee met with the internal auditors and EY, with and without management present, to discuss the results of their examinations, their evaluations of the Company's internal control, including internal control over financial reporting, and the overall quality of the Company's financial reporting. The Audit Committee held five meetings during fiscal year 2014. In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the financial statements referred to above be included in the Annual Report on Form 10-K for the year ended November 30, 2014 for filing with the Securities and Exchange Commission. COMPENSATION DISCUSSION AND ANALYSIS Overview and Objectives of Compensation Program The goal of the compensation programs for our named executive officers is to retain and reward leaders who create long-term value for our shareholders. This goal affects the compensation elements we use and our compensation decisions. We have designed and implemented our compensation programs for our named executives to: (cid:127) (cid:127) (cid:127) reward them for financial and operating performance; align their interests with those of our shareholders; and encourage them to remain with the Company. Most of our compensation elements simultaneously fulfill one or more of our performance, alignment and retention objectives. These elements consist of: (cid:127) salary and annual discretionary bonus; (cid:127) non-equity (cash) incentive compensation based upon annually determined performance criteria; (cid:127) equity incentive compensation based upon annually determined performance criteria combined with a time based vesting schedule; and (cid:127) other benefits. In deciding on the type and amount of compensation for each executive, we focus almost exclusively on each executive’s current pay, rather than historic pay. We combine the compensation elements for each executive in a manner we believe optimizes the value for our shareholders and supports the goals of our compensation programs. We provide a combination of pay elements with the goal of aligning executive incentives with shareholder value. The three major elements of our executive compensation — base salary, annual cash awards (which include bonuses and non-equity incentives) and long-term equity incentives — simultaneously fulfill one or more of our performance, alignment and retention objectives. The following summarizes the compensation elements we use as tools to reward, retain and align the performance expectations of our named executives. Base Salary, Non-Equity Incentives and Cash Bonuses Base salaries for our named executives are designed to provide competitive levels of compensation dependent on the scope of their responsibilities, their leadership skills and values, and their performance. For each named executive officer, we pay annual non-equity incentives each February for the prior year’s performance based upon management’s evaluation and the Compensation Committee’s qualitative assessment of the executives’ performance. This short term compensation element is in line with the stated goal of our compensation programs, namely retaining and rewarding leaders who create long-term value for our shareholders. The incentives were determined using the criteria approved by the Compensation Committee for performance against normalized corporate financial performance measures based on budget of revenue; operating margin based on budget, and capital allocation based on budget. For fiscal 2014, the corporate financial measurements for these non-equity incentives were weighted as follows: 1) revenue based on budget as 34%, 2) operating margin based on budget as 33% and 3) capital allocation based on budget as 33%. In addition to amounts paid pursuant to our non-equity incentive plan, the Compensation Committee retains discretion to award cash bonuses where performance may warrant. We also award a small annual holiday cash bonus based on seniority. Long —Term Compensation — 2006 Long Term Incentive Plan Larry Aiello, Jr., Chairman J. Hyatt Brown William P. Graves We emphasize long-term variable compensation at the senior executive levels because of our desire to reward effective long- term management decision making and our desire to retain executive officers who have the potential to impact both our short- term and long-term profitability. We believe that providing Restricted Stock Units (RSUs) is an effective means to focus our ISC // 2015 INFORMATION STATEMENT // 14 named executives on delivering long-term value to our shareholders. RSUs allow us to reward and retain the named executives by offering them the opportunity to receive shares of our stock on the date the restrictions lapse so long as they continue to be employed by the Company. Other Compensation We provide our named executive officers with other benefits, reflected in the All Other Compensation column in the Summary Compensation Table, that we believe are reasonable, competitive and consistent with our overall compensation program and goals. The costs of these benefits constitute only a small percentage of each named executive officer’s total compensation, and include premiums paid on life insurance policies and Company contributions to a 401(k) plan. The named executive officers also participate in the standard health insurance benefits offered to all employees. We also provide the use of a car provided by the Company and comprehensive physical examinations every other year. The named executive officers are encouraged to attend events at the motorsports entertainment facilities operated by the Company as part of their job function and permitted to bring a guest with them to these events at no charge to the executive. Compensation Implementation Determination of Compensation As part of our total overall compensation plan the compensation for our named executive officers depends on the scope of their responsibilities, their leadership skills and values, and their individual performance, as well as the Company's performance. Decisions regarding salary increases are affected by the named executives’ current salary and the amounts paid within and outside the Company. Base salary rates are reviewed on annual basis and adjusted when appropriate by the Compensation Committee based upon changes in market conditions and the Company’s performance factors. When making decisions regarding compensation, we focus almost exclusively on each executive's current pay, rather than historic pay. The Compensation Committee exercises its discretion in initially making compensation decisions, after reviewing the performance of the Company and evaluating an executive’s prospects and performance during the year against established goals, operational performance, business responsibilities, and current compensation arrangements. The following is a summary of key considerations affecting the determination of compensation for the named executives: Emphasis on Consistent Performance. Our compensation program provides a greater pay opportunity for executives who demonstrate superior performance for sustained periods of time. Each of our named officers has served us for many years, during which she/he has held diverse positions of increasing responsibility. The amount of their pay reflects their consistent contribution with the expectation of continued contribution to our success. Our emphasis on performance affects our discretionary annual cash bonus, non-equity incentives and equity incentive compensation. We incorporate current year and expected performance into our compensation decisions and percentage increases or decreases in the amount of annual compensation. For fiscal 2014, the criteria to determine overall compensation remained consistent with prior years and our stated philosophy. Discretion and Judgment. We generally adhere to our historic practices and formulas in determining the amount and mix of compensation elements. Because of our reliance on the formulaic achievement of annual Company financial goals in determining the amount of plan-based compensation, short term changes in business performance can have a significant impact on the compensation of the named executive officers. We consider competitive market compensation paid by other companies of similar size and market capitalization, but we do not attempt to maintain a certain target percentile within a peer group or otherwise rely on data of peer companies to determine executive compensation. We do not have any specific apportionment goal with respect to the mix between equity incentive awards and cash payments. We generally attempt to assess an executive’s total pay opportunities and whether we have provided the appropriate incentives to accomplish our compensation objectives. Our mix of compensation elements is designed to reward recent results and performance through a combination of non-equity (cash) and equity incentive awards. We also seek to balance compensation elements that are based on financial, operational and strategic metrics. We believe the most important indicator of whether our compensation objectives are being met is our ability to motivate our named executives to deliver superior performance and retain them. ISC // 2015 INFORMATION STATEMENT // 15 Significance of Company Results. The Compensation Committee primarily evaluates the named executives’ contributions to the Company’s overall performance rather than focusing only on their individual function. The Compensation Committee believes that the named executives share the responsibility to support the goals and performance of the Company, as the executive members of the Company’s leadership team. While this compensation philosophy influences all of the committee’s compensation decisions, it has the biggest impact on annual non-equity incentive awards and, generally, discretionary bonuses. Consideration of Risk. Our compensation programs are discretionary, balanced and focused on rewarding performance for both current year and long-term strategy. Under this structure, a greater amount of compensation can be achieved through consistent superior performance over sustained periods of time. Long term incentive plan compensation in the form of restricted stock is restricted to multiple vesting years with 50% vesting in three years and the remainder vesting in five years. We believe this provides strong incentives for our named executive officers to manage the Company for the long term while avoiding excessive risk-taking in the short term. Goals and objectives reflect a balanced mix of quantitative and qualitative performance measures to avoid excessive weight on a single performance measure. The elements of compensation are mixed among current non- equity (cash) payments and equity awards. With limited exceptions the Compensation Committee retains the ability to adjust compensation for quality of performance and adherence to our values. The Company does not believe that its compensation policies and practices are reasonably likely to have a material adverse effect on the Company. No Employment and Severance Agreements. None of our named executive officers have employment or change-of-control agreements nor do they have pre-negotiated severance agreements in place. Our named executive officers serve at the will of the Board, which enables the Company to terminate their employment with discretion as to the terms of any severance arrangement. This is consistent with our performance-based employment and compensation philosophy. Of course, the fact that our Chairman of the Board and our Vice Chairman and Chief Executive Officer are members of the France Family Group, which has the ability to elect the entire Board, does impact such discretion in their case. In addition, the time vesting of our plan–based restricted stock awards help retain our executives by subjecting to forfeiture any unvested shares if they leave the Company prior to retirement. There are change-of-control provisions associated with each award of such plan-based restricted stock awards. Change of control is defined in the individual participant plans for all participants in the restricted stock incentive program. A copy of the plan is on file with the SEC in connection with our Form S-8 registration statement, filed on February 11, 2010. Roles of Compensation Committee and Named Executives Executive officer compensation is overseen by the Compensation Committee of the Board of Directors, which is composed entirely of independent directors, pursuant to its charter. A copy of the charter may be viewed on the Company’s website at www.internationalspeedwaycorporation.com. Prior to the beginning of each fiscal year the Compensation Committee establishes a total pool of dollars to be used for increases in annual salary compensation for all of our employees, including all of the named executive officers. In setting this total pool of dollars the members of the Compensation Committee consider a variety of factors, including, but not limited to, historic and projected earnings per share, anticipated revenue growth, established salary ranges and market conditions. The committee members then use their collective business judgment to establish the total pool of dollars for increases in annual salary compensation. Under the direction of the CEO, the proposed salaries, individual performance goals and targeted bonuses for each of the named executive officers other than the CEO are presented to the Compensation Committee which reviews and approves them. The salary of the CEO is then separately considered and approved by the Compensation Committee. Although no particular weighting of the factors or formula is used, the Committee considers (1) Company and individual performance as measured against management goals approved by the Board of Directors, (2) personal performance in support of the Company’s goals as measured by annual evaluation criteria, and (3) intangible factors and criteria such as payments by competitors for similar positions and market movement. Each of the named executive officers is assigned a target non-equity incentive opportunity based on corporate and personal goals for the year. The actual non-equity incentive for each named executive officer will range from 0% to 150% of the target depending upon results of corporate performance and personal performance during the year. The 2014 fiscal year corporate financial measurements consist of three components which are weighted as follows: 1) revenue based on budget as 34%, 2) named executives on delivering long-term value to our shareholders. RSUs allow us to reward and retain the named executives by offering them the opportunity to receive shares of our stock on the date the restrictions lapse so long as they continue to be employed by the Company. Other Compensation We provide our named executive officers with other benefits, reflected in the All Other Compensation column in the Summary Compensation Table, that we believe are reasonable, competitive and consistent with our overall compensation program and goals. The costs of these benefits constitute only a small percentage of each named executive officer’s total compensation, and include premiums paid on life insurance policies and Company contributions to a 401(k) plan. The named executive officers also participate in the standard health insurance benefits offered to all employees. We also provide the use of a car provided by the Company and comprehensive physical examinations every other year. The named executive officers are encouraged to attend events at the motorsports entertainment facilities operated by the Company as part of their job function and permitted to bring a guest with them to these events at no charge to the executive. Compensation Implementation Determination of Compensation As part of our total overall compensation plan the compensation for our named executive officers depends on the scope of their responsibilities, their leadership skills and values, and their individual performance, as well as the Company's performance. Decisions regarding salary increases are affected by the named executives’ current salary and the amounts paid within and outside the Company. Base salary rates are reviewed on annual basis and adjusted when appropriate by the Compensation Committee based upon changes in market conditions and the Company’s performance factors. When making decisions regarding compensation, we focus almost exclusively on each executive's current pay, rather than historic pay. The Compensation Committee exercises its discretion in initially making compensation decisions, after reviewing the performance of the Company and evaluating an executive’s prospects and performance during the year against established goals, operational performance, business responsibilities, and current compensation arrangements. The following is a summary of key considerations affecting the determination of compensation for the named executives: demonstrate superior performance for sustained periods of time. Each of our named officers has served us for many years, during which she/he has held diverse positions of increasing responsibility. The amount of their pay reflects their consistent contribution with the expectation of continued contribution to our success. Our emphasis on performance affects our discretionary annual cash bonus, non-equity incentives and equity incentive compensation. We incorporate current year and expected performance into our compensation decisions and percentage increases or decreases in the amount of annual compensation. For fiscal 2014, the criteria to determine overall compensation remained consistent with prior years and our stated philosophy. Discretion and Judgment. We generally adhere to our historic practices and formulas in determining the amount and mix of compensation elements. Because of our reliance on the formulaic achievement of annual Company financial goals in determining the amount of plan-based compensation, short term changes in business performance can have a significant impact on the compensation of the named executive officers. We consider competitive market compensation paid by other companies of similar size and market capitalization, but we do not attempt to maintain a certain target percentile within a peer group or otherwise rely on data of peer companies to determine executive compensation. We do not have any specific apportionment goal with respect to the mix between equity incentive awards and cash payments. We generally attempt to assess an executive’s total pay opportunities and whether we have provided the appropriate incentives to accomplish our compensation objectives. Our mix of compensation elements is designed to reward recent results and performance through a combination of non-equity (cash) and equity incentive awards. We also seek to balance compensation elements that are based on financial, operational and strategic metrics. We believe the most important indicator of whether our compensation objectives are being met is our ability to motivate our named executives to deliver superior performance and retain them. Significance of Company Results. The Compensation Committee primarily evaluates the named executives’ contributions to the Company’s overall performance rather than focusing only on their individual function. The Compensation Committee believes that the named executives share the responsibility to support the goals and performance of the Company, as the executive members of the Company’s leadership team. While this compensation philosophy influences all of the committee’s compensation decisions, it has the biggest impact on annual non-equity incentive awards and, generally, discretionary bonuses. Consideration of Risk. Our compensation programs are discretionary, balanced and focused on rewarding performance for both current year and long-term strategy. Under this structure, a greater amount of compensation can be achieved through consistent superior performance over sustained periods of time. Long term incentive plan compensation in the form of restricted stock is restricted to multiple vesting years with 50% vesting in three years and the remainder vesting in five years. We believe this provides strong incentives for our named executive officers to manage the Company for the long term while avoiding excessive risk-taking in the short term. Goals and objectives reflect a balanced mix of quantitative and qualitative performance measures to avoid excessive weight on a single performance measure. The elements of compensation are mixed among current non- equity (cash) payments and equity awards. With limited exceptions the Compensation Committee retains the ability to adjust compensation for quality of performance and adherence to our values. The Company does not believe that its compensation policies and practices are reasonably likely to have a material adverse effect on the Company. No Employment and Severance Agreements. None of our named executive officers have employment or change-of-control agreements nor do they have pre-negotiated severance agreements in place. Our named executive officers serve at the will of the Board, which enables the Company to terminate their employment with discretion as to the terms of any severance arrangement. This is consistent with our performance-based employment and compensation philosophy. Of course, the fact that our Chairman of the Board and our Vice Chairman and Chief Executive Officer are members of the France Family Group, which has the ability to elect the entire Board, does impact such discretion in their case. In addition, the time vesting of our plan–based restricted stock awards help retain our executives by subjecting to forfeiture any unvested shares if they leave the Company prior to retirement. There are change-of-control provisions associated with each award of such plan-based restricted stock awards. Change of control is defined in the individual participant plans for all participants in the restricted stock incentive program. A copy of the plan is on file with the SEC in connection with our Form S-8 registration statement, filed on February 11, 2010. Emphasis on Consistent Performance. Our compensation program provides a greater pay opportunity for executives who Roles of Compensation Committee and Named Executives Executive officer compensation is overseen by the Compensation Committee of the Board of Directors, which is composed entirely of independent directors, pursuant to its charter. A copy of the charter may be viewed on the Company’s website at www.internationalspeedwaycorporation.com. Prior to the beginning of each fiscal year the Compensation Committee establishes a total pool of dollars to be used for increases in annual salary compensation for all of our employees, including all of the named executive officers. In setting this total pool of dollars the members of the Compensation Committee consider a variety of factors, including, but not limited to, historic and projected earnings per share, anticipated revenue growth, established salary ranges and market conditions. The committee members then use their collective business judgment to establish the total pool of dollars for increases in annual salary compensation. Under the direction of the CEO, the proposed salaries, individual performance goals and targeted bonuses for each of the named executive officers other than the CEO are presented to the Compensation Committee which reviews and approves them. The salary of the CEO is then separately considered and approved by the Compensation Committee. Although no particular weighting of the factors or formula is used, the Committee considers (1) Company and individual performance as measured against management goals approved by the Board of Directors, (2) personal performance in support of the Company’s goals as measured by annual evaluation criteria, and (3) intangible factors and criteria such as payments by competitors for similar positions and market movement. Each of the named executive officers is assigned a target non-equity incentive opportunity based on corporate and personal goals for the year. The actual non-equity incentive for each named executive officer will range from 0% to 150% of the target depending upon results of corporate performance and personal performance during the year. The 2014 fiscal year corporate financial measurements consist of three components which are weighted as follows: 1) revenue based on budget as 34%, 2) ISC // 2015 INFORMATION STATEMENT // 16 Tax Deductibility of Compensation Section 162(m) of the Internal Revenue Code of 1986, as amended, imposes a $1.0 million limit on the amount that a public company may deduct for compensation paid to the company’s CEO or any of the Company’s four other most highly compensated executive officers who are employed as of the end of the year. None of the individuals covered by Section 162(m) received taxable compensation in excess of the $1.0 million limit. The amounts shown in the Summary Compensation Table contain components which are not considered taxable income to the individuals under current Internal Revenue Code provisions. The Company does not presently structure any component of executive compensation to meet the requirements under Section 162(m) for “qualifying performance-based” compensation (i.e., compensation paid only if the individual’s performance meets pre-established objective goals based on performance criteria approved by shareholders). Potential Impact on Compensation from Executive Misconduct If the Board should determine that an executive officer has engaged in fraudulent or intentional misconduct, the Board could take action to remedy the misconduct, prevent its recurrence, and impose such discipline on the wrongdoers as would be appropriate. Discipline would vary depending on the facts and circumstances, and may include, without limitation, (1) termination of employment, (2) initiating an action for breach of fiduciary duty, and (3) if the misconduct resulted in a restatement of the Company’s financial results, seeking reimbursement of any portion of performance-based or incentive compensation paid or awarded to the executive that is greater than would have been paid or awarded if calculated based on the restated financial results. These remedies would be in addition to, and not in lieu of, any actions imposed by law enforcement agencies, regulators or other authorities. operating margin based on budget as 33% and 3) capital allocation based on budget as 33%. Both the targets and the actual performance are determined on a normalized basis and may vary from year to year as established by the Compensation Committee. For fiscal 2014, our named executive officers are: Ms. Lesa France Kennedy, Chief Executive Officer; Mr. James C. France, Chairman of the Board of Directors and Assistant Treasurer; Mr. John R. Saunders, President; Mr. Daniel W. Houser, Chief Financial Officer; and Mr. Joel S. Chitwood, our Vice President and President of Daytona International Speedway. Mr. Brian K. Wilson exited the position Vice President, Corporate Development effective September 30, 2014. The Compensation Committee reviews and approves the recommended corporate performance goals and objectives which are used in establishing plan-based incentive compensation for all of the named executive officers. Compensation Consultants Neither the Company nor the Compensation Committee has any contractual arrangement with any compensation consultant who has a role in determining or recommending the amount or form of senior executive or director compensation. Our named executive officers have not participated in the selection of any particular compensation consultant. The Company obtains market intelligence on compensation trends from a variety of sources through our human resources personnel, with the oversight of the Committee. Each year we participate in compensation surveys conducted by well-known compensation consultants as a means of understanding external market practices. Except for the foregoing, we have not used the services of any other compensation consultant in matters affecting senior executive or director compensation. In the future, either the Company or the Compensation Committee may engage or seek the advice of compensation consultants. Equity Grant Practices The only form of equity compensation currently provided to our named executive officers is awards of shares of restricted stock under our 2006 Long Term Incentive Plan. For each fiscal year the named executive officers are provided an opportunity to be awarded shares of restricted stock based upon the same normalized corporate financial performance measures established for non-equity incentive payments, as discussed above. The targeted number of shares is fixed by the Compensation Committee and represents a specified percentage of the named executive officer’s annual base salary based upon the average price of our publicly traded shares during the fiscal year prior to the establishment of the share target. This targeted share award amount is communicated to the named executive officers during the second quarter of our fiscal year. Upon completion of the fiscal year and the financial audit, our normalized performance against the financial performance measures is evaluated, a percentage of the targeted award to be actually awarded is determined, reviewed and approved by the Compensation Committee and the restricted shares are issued in the name of the named executive officers on May 1 following the completion of the fiscal year. The restricted shares then vest over time, with 50% vesting three years after issuance and the remaining 50% vesting five years after issuance. Prior to vesting the recipient may vote the shares and receive dividends on the restricted shares as granted. If employment ends prior to the expiration of the vesting period due to a change of control or for reasons acceptable to the Compensation Committee (death, disability, retirement, etc.) all or a portion of the unvested restricted shares may be allowed to vest. Termination of employment for any other reason will result in forfeiture of all unvested shares. The timing of calculations of opportunities, amounts, awards and vesting dates are made solely for administrative efficiency and without regard to earnings or other major announcements by the Company. There are change-of-control provisions associated with each award of restricted shares. Change of control is defined in the individual participant plans for all participants in the restricted stock incentive program. A copy of the plan is on file with the SEC in connection with our Form S-8 registration statement, filed on February 11, 2010. Share Ownership Guidelines The Company has no equity security ownership guidelines or requirements for the named executive officers. During 2012, we instituted share ownership guidelines for our non-employee directors, as more fully described below in the “Compensation of Directors” section. ISC // 2015 INFORMATION STATEMENT // 17 operating margin based on budget as 33% and 3) capital allocation based on budget as 33%. Both the targets and the actual performance are determined on a normalized basis and may vary from year to year as established by the Compensation Committee. For fiscal 2014, our named executive officers are: Ms. Lesa France Kennedy, Chief Executive Officer; Mr. James C. France, Chairman of the Board of Directors and Assistant Treasurer; Mr. John R. Saunders, President; Mr. Daniel W. Houser, Chief Financial Officer; and Mr. Joel S. Chitwood, our Vice President and President of Daytona International Speedway. Mr. Brian K. Wilson exited the position Vice President, Corporate Development effective September 30, 2014. The Compensation Committee reviews and approves the recommended corporate performance goals and objectives which are used in establishing plan-based incentive compensation for all of the named executive officers. Compensation Consultants Neither the Company nor the Compensation Committee has any contractual arrangement with any compensation consultant who has a role in determining or recommending the amount or form of senior executive or director compensation. Our named executive officers have not participated in the selection of any particular compensation consultant. The Company obtains market intelligence on compensation trends from a variety of sources through our human resources personnel, with the oversight of the Committee. Each year we participate in compensation surveys conducted by well-known compensation consultants as a means of understanding external market practices. Except for the foregoing, we have not used the services of any other compensation consultant in matters affecting senior executive or director compensation. In the future, either the Company or the Compensation Committee may engage or seek the advice of compensation consultants. Equity Grant Practices The only form of equity compensation currently provided to our named executive officers is awards of shares of restricted stock under our 2006 Long Term Incentive Plan. For each fiscal year the named executive officers are provided an opportunity to be awarded shares of restricted stock based upon the same normalized corporate financial performance measures established for non-equity incentive payments, as discussed above. The targeted number of shares is fixed by the Compensation Committee and represents a specified percentage of the named executive officer’s annual base salary based upon the average price of our publicly traded shares during the fiscal year prior to the establishment of the share target. This targeted share award amount is communicated to the named executive officers during the second quarter of our fiscal year. Upon completion of the fiscal year and the financial audit, our normalized performance against the financial performance measures is evaluated, a percentage of the targeted award to be actually awarded is determined, reviewed and approved by the Compensation Committee and the restricted shares are issued in the name of the named executive officers on May 1 following the completion of the fiscal year. The restricted shares then vest over time, with 50% vesting three years after issuance and the remaining 50% vesting five years after issuance. Prior to vesting the recipient may vote the shares and receive dividends on the restricted shares as granted. If employment ends prior to the expiration of the vesting period due to a change of control or for reasons acceptable to the Compensation Committee (death, disability, retirement, etc.) all or a portion of the unvested restricted shares may be allowed to vest. Termination of employment for any other reason will result in forfeiture of all unvested shares. The timing of calculations of opportunities, amounts, awards and vesting dates are made solely for administrative efficiency and without regard to earnings or other major announcements by the Company. There are change-of-control provisions associated with each award of restricted shares. Change of control is defined in the individual participant plans for all participants in the restricted stock incentive program. A copy of the plan is on file with the SEC in connection with our Form S-8 registration statement, filed on February 11, 2010. Share Ownership Guidelines Directors” section. The Company has no equity security ownership guidelines or requirements for the named executive officers. During 2012, we instituted share ownership guidelines for our non-employee directors, as more fully described below in the “Compensation of Tax Deductibility of Compensation Section 162(m) of the Internal Revenue Code of 1986, as amended, imposes a $1.0 million limit on the amount that a public company may deduct for compensation paid to the company’s CEO or any of the Company’s four other most highly compensated executive officers who are employed as of the end of the year. None of the individuals covered by Section 162(m) received taxable compensation in excess of the $1.0 million limit. The amounts shown in the Summary Compensation Table contain components which are not considered taxable income to the individuals under current Internal Revenue Code provisions. The Company does not presently structure any component of executive compensation to meet the requirements under Section 162(m) for “qualifying performance-based” compensation (i.e., compensation paid only if the individual’s performance meets pre-established objective goals based on performance criteria approved by shareholders). Potential Impact on Compensation from Executive Misconduct If the Board should determine that an executive officer has engaged in fraudulent or intentional misconduct, the Board could take action to remedy the misconduct, prevent its recurrence, and impose such discipline on the wrongdoers as would be appropriate. Discipline would vary depending on the facts and circumstances, and may include, without limitation, (1) termination of employment, (2) initiating an action for breach of fiduciary duty, and (3) if the misconduct resulted in a restatement of the Company’s financial results, seeking reimbursement of any portion of performance-based or incentive compensation paid or awarded to the executive that is greater than would have been paid or awarded if calculated based on the restated financial results. These remedies would be in addition to, and not in lieu of, any actions imposed by law enforcement agencies, regulators or other authorities. ISC // 2015 INFORMATION STATEMENT // 18 Compensation for the Named Executive Officers in 2014 Company Performance The specific compensation decisions made for each of the named executive officers for fiscal 2014 reflect the focus on the performance of the Company against specific financial and operational measurements. A significant portion of each of the named executive officer’s plan-based incentive compensation is based upon the Company’s performance against the normalized corporate financial performance measures and weighting of 1) revenue based on budget (34%), 2) operating margin based on budget (33%), and 3) capital allocation based on budget (33%). Based on the evaluation of the Company’s performance against these measures in fiscal 2014, the payout of plan based non-equity incentives was at 93% of the targeted opportunity, with weighted performance of 34% for the revenue target, 26% for the operating margin target and 33% for capital allocation based on budget. For fiscal 2014, the non-equity incentives further aligned earning opportunities in support of overall business cost containment measures, as well as the execution of long term strategic growth measures such as managing to budget our Daytona Rising project. Accordingly, and consistent with the Company's cost containment initiatives, the plan-based non-equity incentive was capped at 75% of the usual earning potential for named executive officers. Amounts described below regarding plan-based non-equity incentives are reflective of performance against this earning opportunity. Potential awards of restricted stock made pursuant to our long-term incentive plan continued to be at 100% of earning potential for the named executive officers. For the named executive officers eligible for plan-based non-equity incentives, 100% of the earning potential for fiscal 2014 (which, as noted above, is 75% of the usual earning potential) was as follows: $291,625 for Ms. Kennedy; $114,173 for Mr. Houser; $227,079 for Mr. Saunders; $72,838 for Mr. Wilson; and $84,186 for Mr. Chitwood. A more detailed analysis of our financial and operational performance is contained in the Management’s Discussion & Analysis section of our 2014 Annual Report on Form 10-K filed with the SEC. CEO Compensation In determining Ms. Kennedy’s base salary compensation for 2014, the Compensation Committee considered her performance as CEO and the performance of the Company in fiscal 2014. In addition, the Compensation Committee considered general trends of Company performance over the prior several years, outcomes related to growth and development activities and strategic initiatives, market conditions, as well as the responsibilities of the position and her strategic value to the Company. Ms. Kennedy and the Board continued to respond to the evolving economic conditions by focusing on the following performance framework (1) outperforming in a tough environment, (2) maintaining and maximizing financial flexibility, (3) optimizing sustainable cost containment and (4) protecting the Company’s reputation and long-term strategy. The Committee determined that Ms. Kennedy performed at a high level resulting in a 3.0% increase in base salary for Ms. Kennedy from the previous year. The Compensation Committee believes that Ms. Kennedy performed well in 2014 by executing on the established performance framework and in delivering a strong financial performance during a slow to recover economy. The Compensation Committee believes that the Company’s fiscal 2014 reflected leadership decisions that effectively mitigated revenue deterioration with sustainable cost containment, capital allocation discipline and execution against defined strategic initiatives, including meeting financial and schedule metrics for the complete reconstruction of Daytona International Speedway, the Company's flagship facility. In determining the bonus and incentive portions of her compensation for fiscal 2014, the Compensation Committee determined that Ms. Kennedy performed at a high level. In light of Ms. Kennedy's performance, she received a total plan- based non-equity incentive of $281,711, which was 97% of her $291,625 total target opportunity. This reflects a 93% payout due to performance against the corporate financial performance measures, as well as an additional amount related to her performance against individual goals set by the Compensation Committee. Ms. Kennedy also received 10,446 shares of restricted stock (valued at $328,422 as of the May 1, 2014 grant date) for her fiscal year 2013 leadership performance. This grant is pursuant to the established long-term incentive plan of the Company. The restricted stock is subject to a vesting schedule, with 50% vesting in three years and the remainder vesting in five years. The final value will be determined on the actual vesting date. ISC // 2015 INFORMATION STATEMENT // 19 In addition, pursuant to the aforementioned fiscal year 2014 performance factors, the Compensation Committee determined that Ms. Kennedy is eligible for a restricted stock award of 10,567 shares, the value of which will be determined based upon the May 1, 2015 grant date. This grant is pursuant to the established long-term incentive plan and based on annual financial performance of the Company. Other Named Officers In determining the base salary compensation of Mr. France, Mr. Saunders, Mr. Houser and Mr. Chitwood for fiscal 2014 the Compensation Committee considered the same criteria as for the CEO. The Compensation Committee also considered the recommendations based upon evaluation of individual functional area responsibilities and goals as submitted by the CEO. The non-equity incentive plan compensation was determined with the criteria for effectively mitigating revenue deterioration with sustainable cost containment, capital allocation discipline and execution against defined financial measures. James C. France: In fiscal 2014, per Mr. France’s role as Chairman of the Board of Directors and Assistant Treasurer, and adjusted responsibilities, he received no plan-based incentive and a $300 holiday cash bonus. Mr. France received an award of 4,897 shares of restricted stock (valued at $153,962 as of the May 1, 2014 grant date) for his fiscal year 2013 leadership performance. The restricted stock is subject to a vesting schedule, with 50% vesting in three years and the remainder vesting in five years. The final value will be determined on the actual vesting date. Mr. France continues to provide the Company significant benefit from his business and industry expertise, experience and leadership. The Compensation Committee recognizes Mr. France’s significant contribution and as such has determined that for fiscal year 2014, he is eligible for a restricted stock award of 4,953 shares, the value of which will be determined based upon the May 1, 2015 grant date. This grant is pursuant to the established long-term incentive plan of the Company. John R. Saunders: Mr. Saunders, in his position as President, had financial objectives that focused on the overall performance of the Company and were the same as Ms. Kennedy’s. His strategic and operational goals included providing operational and leadership support for the Company’s strategy development and execution against the Board approved strategic plan focusing on maintaining and growing the core business, leveraging the core business and driving a top performing organization. Mr. Saunders led the Company’s core business growth activities which included revenue generation and improving performance and cost competitiveness, and driving the achievement of key financial and schedule deliverables for the complete reconstruction of Daytona International Speedway. In fiscal 2014, Mr. Saunders led the Company in continuing to maintain cost containment initiatives. Mr. Saunders' base salary increased 3.0% in fiscal 2014. The Compensation Committee assessment of Mr. Saunders’ performance in 2014 aligned to support his receiving a plan-based non-equity incentive of $219,358, which was reflective of 97% of his $227,079 total target opportunity. This reflects a 93% payout due to performance against the corporate financial performance measures, as well as an additional amount related to his performance against individual goals set by the Compensation Committee. Mr. Saunders also received 7,345 shares of restricted stock (valued at $230,926 as of the May 1, 2014 grant date) for his fiscal year 2013 leadership performance. This grant is pursuant to the established long-term incentive plan of the Company. The restricted stock is subject to a vesting schedule, with 50% vesting in three years and the remainder vesting in five years. The final value will be determined on the actual vesting date. In addition, the Compensation Committee determined, based on Mr. Saunders’ significant performance in fiscal year 2014, that he is eligible for a restricted stock award of 7,430 shares, the value of which will be determined upon the May 1, 2015 grant date. This grant is pursuant to the established long-term incentive plan and based on annual financial performance of the Company. Daniel W. Houser: Mr. Houser has been our Chief Financial Officer since 2009 and is also a Senior Vice President of the Company. Mr. Houser’s financial objectives, as the leader of our finance organization, focused on the overall performance of the Company. His strategic and operational goals focused on providing operational support in achieving financial goals, including serving as the process driver for maintaining the Company's cost containment deliverables, balance sheet management, delivering on financial commitments for the Company's complete reconstruction of Daytona International Speedway, and leading the Company’s relationship with rating agencies. Compensation for the Named Executive Officers in 2014 Company Performance The specific compensation decisions made for each of the named executive officers for fiscal 2014 reflect the focus on the performance of the Company against specific financial and operational measurements. A significant portion of each of the named executive officer’s plan-based incentive compensation is based upon the Company’s performance against the normalized corporate financial performance measures and weighting of 1) revenue based on budget (34%), 2) operating margin based on budget (33%), and 3) capital allocation based on budget (33%). Based on the evaluation of the Company’s performance against these measures in fiscal 2014, the payout of plan based non-equity incentives was at 93% of the targeted opportunity, with weighted performance of 34% for the revenue target, 26% for the operating margin target and 33% for capital allocation based on budget. For fiscal 2014, the non-equity incentives further aligned earning opportunities in support of overall business cost containment measures, as well as the execution of long term strategic growth measures such as managing to budget our Daytona Rising project. Accordingly, and consistent with the Company's cost containment initiatives, the plan-based non-equity incentive was capped at 75% of the usual earning potential for named executive officers. Amounts described below regarding plan-based non-equity incentives are reflective of performance against this earning opportunity. Potential awards of restricted stock made pursuant to our long-term incentive plan continued to be at 100% of earning potential for the named executive officers. For the named executive officers eligible for plan-based non-equity incentives, 100% of the earning potential for fiscal 2014 (which, as noted above, is 75% of the usual earning potential) was as follows: $291,625 for Ms. Kennedy; $114,173 for Mr. Houser; $227,079 for Mr. Saunders; $72,838 for Mr. Wilson; and $84,186 for Mr. Chitwood. A more detailed analysis of our financial and operational performance is contained in the Management’s Discussion & Analysis section of our 2014 Annual Report on Form 10-K filed with the SEC. CEO Compensation In determining Ms. Kennedy’s base salary compensation for 2014, the Compensation Committee considered her performance as CEO and the performance of the Company in fiscal 2014. In addition, the Compensation Committee considered general trends of Company performance over the prior several years, outcomes related to growth and development activities and strategic initiatives, market conditions, as well as the responsibilities of the position and her strategic value to the Company. Ms. Kennedy and the Board continued to respond to the evolving economic conditions by focusing on the following performance framework (1) outperforming in a tough environment, (2) maintaining and maximizing financial flexibility, (3) optimizing sustainable cost containment and (4) protecting the Company’s reputation and long-term strategy. The Committee determined that Ms. Kennedy performed at a high level resulting in a 3.0% increase in base salary for Ms. Kennedy from the previous year. The Compensation Committee believes that Ms. Kennedy performed well in 2014 by executing on the established performance framework and in delivering a strong financial performance during a slow to recover economy. The Compensation Committee believes that the Company’s fiscal 2014 reflected leadership decisions that effectively mitigated revenue deterioration with sustainable cost containment, capital allocation discipline and execution against defined strategic initiatives, including meeting financial and schedule metrics for the complete reconstruction of Daytona International Speedway, the Company's flagship facility. In determining the bonus and incentive portions of her compensation for fiscal 2014, the Compensation Committee determined that Ms. Kennedy performed at a high level. In light of Ms. Kennedy's performance, she received a total plan- based non-equity incentive of $281,711, which was 97% of her $291,625 total target opportunity. This reflects a 93% payout due to performance against the corporate financial performance measures, as well as an additional amount related to her performance against individual goals set by the Compensation Committee. Ms. Kennedy also received 10,446 shares of restricted stock (valued at $328,422 as of the May 1, 2014 grant date) for her fiscal year 2013 leadership performance. This grant is pursuant to the established long-term incentive plan of the Company. The restricted stock is subject to a vesting schedule, with 50% vesting in three years and the remainder vesting in five years. The final value will be determined on the actual vesting date. In addition, pursuant to the aforementioned fiscal year 2014 performance factors, the Compensation Committee determined that Ms. Kennedy is eligible for a restricted stock award of 10,567 shares, the value of which will be determined based upon the May 1, 2015 grant date. This grant is pursuant to the established long-term incentive plan and based on annual financial performance of the Company. Other Named Officers In determining the base salary compensation of Mr. France, Mr. Saunders, Mr. Houser and Mr. Chitwood for fiscal 2014 the Compensation Committee considered the same criteria as for the CEO. The Compensation Committee also considered the recommendations based upon evaluation of individual functional area responsibilities and goals as submitted by the CEO. The non-equity incentive plan compensation was determined with the criteria for effectively mitigating revenue deterioration with sustainable cost containment, capital allocation discipline and execution against defined financial measures. James C. France: In fiscal 2014, per Mr. France’s role as Chairman of the Board of Directors and Assistant Treasurer, and adjusted responsibilities, he received no plan-based incentive and a $300 holiday cash bonus. Mr. France received an award of 4,897 shares of restricted stock (valued at $153,962 as of the May 1, 2014 grant date) for his fiscal year 2013 leadership performance. The restricted stock is subject to a vesting schedule, with 50% vesting in three years and the remainder vesting in five years. The final value will be determined on the actual vesting date. Mr. France continues to provide the Company significant benefit from his business and industry expertise, experience and leadership. The Compensation Committee recognizes Mr. France’s significant contribution and as such has determined that for fiscal year 2014, he is eligible for a restricted stock award of 4,953 shares, the value of which will be determined based upon the May 1, 2015 grant date. This grant is pursuant to the established long-term incentive plan of the Company. John R. Saunders: Mr. Saunders, in his position as President, had financial objectives that focused on the overall performance of the Company and were the same as Ms. Kennedy’s. His strategic and operational goals included providing operational and leadership support for the Company’s strategy development and execution against the Board approved strategic plan focusing on maintaining and growing the core business, leveraging the core business and driving a top performing organization. Mr. Saunders led the Company’s core business growth activities which included revenue generation and improving performance and cost competitiveness, and driving the achievement of key financial and schedule deliverables for the complete reconstruction of Daytona International Speedway. In fiscal 2014, Mr. Saunders led the Company in continuing to maintain cost containment initiatives. Mr. Saunders' base salary increased 3.0% in fiscal 2014. The Compensation Committee assessment of Mr. Saunders’ performance in 2014 aligned to support his receiving a plan-based non-equity incentive of $219,358, which was reflective of 97% of his $227,079 total target opportunity. This reflects a 93% payout due to performance against the corporate financial performance measures, as well as an additional amount related to his performance against individual goals set by the Compensation Committee. Mr. Saunders also received 7,345 shares of restricted stock (valued at $230,926 as of the May 1, 2014 grant date) for his fiscal year 2013 leadership performance. This grant is pursuant to the established long-term incentive plan of the Company. The restricted stock is subject to a vesting schedule, with 50% vesting in three years and the remainder vesting in five years. The final value will be determined on the actual vesting date. In addition, the Compensation Committee determined, based on Mr. Saunders’ significant performance in fiscal year 2014, that he is eligible for a restricted stock award of 7,430 shares, the value of which will be determined upon the May 1, 2015 grant date. This grant is pursuant to the established long-term incentive plan and based on annual financial performance of the Company. Daniel W. Houser: Mr. Houser has been our Chief Financial Officer since 2009 and is also a Senior Vice President of the Company. Mr. Houser’s financial objectives, as the leader of our finance organization, focused on the overall performance of the Company. His strategic and operational goals focused on providing operational support in achieving financial goals, including serving as the process driver for maintaining the Company's cost containment deliverables, balance sheet management, delivering on financial commitments for the Company's complete reconstruction of Daytona International Speedway, and leading the Company’s relationship with rating agencies. ISC // 2015 INFORMATION STATEMENT // 20 Mr. Houser's base salary increased 3.0% in fiscal 2014. The Compensation Committee assessment of Mr. Houser’s performance in fiscal 2014 aligned to support a non-equity incentive in the amount of $110,292, which was 97% of his $114,173 total target opportunity. This reflects a 93% payout due to performance against the corporate financial performance measures, as well as an additional amount related to his performance against individual goals set by the Compensation Committee. Mr. Houser also received 5,121 shares of restricted stock (valued at $161,004 as of the May 1, 2014 grant date) for his performance in fiscal year 2013. The restricted stock is subject to a vesting schedule, with 50% vesting in three years and the remainder vesting in five years. The final value will be determined on the actual vesting date. This grant is pursuant to the established long-term incentive plan of the Company. In addition, the Compensation Committee determined, based on Mr. Houser’s fiscal year 2014 performance, that he is eligible for a restricted stock award of 5,180 shares, the value of which will be determined upon the May 1, 2015 grant date. This grant is pursuant to the established long-term incentive plan and based on annual financial performance of the Company. Brian K. Wilson: Mr. Wilson, Vice President, Corporate Development, terminated employment with the Company effective September 30, 2014. In addition to the Company's overall financial and strategic goals, Mr. Wilson also had goals and objectives for his functional areas of responsibility. His strategic operational goals included oversight for corporate development and strategic planning and executing to monetize the Company's real estate holdings. In light of senior leadership's assessment of Mr. Wilson's performance during his tenure in fiscal 2014, he received a total non-equity incentive in the amount of $65,555, which was 90% of his $72,838 total target opportunity. Mr. Wilson also received 2,938 shares of restricted stock (valued at $92,371 as of the May 1, 2014 grant date) for his performance in fiscal year 2013. The restricted stock is subject to a vesting schedule, with 50% vesting in three years and the remainder vesting in five years. The final value will be determined on the actual vesting date. This grant is pursuant to the established long-term incentive plan of the Company. Mr. Wilson received no additional restricted stock for fiscal 2014 performance due to his exit from the Company prior to the close of fiscal year 2014. Joel S. Chitwood: Mr. Chitwood, in his position as Vice President of ISC and President of Daytona International Speedway, had financial objectives that focused on the overall performance of the Company, as well as goals and objectives for his functional area of responsibility in leading the strategic and revenue generation performance of Daytona International Speedway. His strategic goals included creating brand interest and demand for product, as well as focusing on elements of pricing strategies and margin rates to drive customer renewal and retention, and the overall guest experience. The Compensation Committee, based on Mr. Chitwood's fiscal year 2014 performance, determined to support receiving a non- equity incentive of $100,000 which was 119% of his $84,186 total target opportunity. This amount is reflective of his successful undertaking of the Daytona Rising project, as well as continued operational performance of Daytona International Speedway. Mr. Chitwood also received a grant of 3,754 shares of restricted stock (valued at $118,026 as of the May 1, 2014 grant date) for his fiscal year 2013 performance. The restricted stock is subject to a vesting schedule, with 50% vesting in three years and the remainder vesting in five years. The final value will be determined on the actual vesting date. This grant is pursuant to the established long-term incentive plan of the Company. In addition, the Compensation Committee determined, based on his fiscal year 2014 performance, that Mr. Chitwood is eligible for a restricted stock award of 3,795 shares, the value of which will be determined upon the May 1, 2015 grant date. This grant is pursuant to the established long-term incentive plan and based on annual financial performance of the Company. ISC // 2015 INFORMATION STATEMENT // 21 SUMMARY COMPENSATION TABLE Name and Principal Position Year Salary ($) Bonus (1) ($) (2) ($) 2014 $ 648,630 $ 2013 $ 629,908 $ 2012 $ 621,185 $ 2014 $ 331,134 $ 2013 $ 321,671 $ 2014 $ 416,551 $ 2013 $ 404,632 $ 2012 $ 401,602 $ 2014 $ 550,934 $ 2013 $ 535,076 $ Stock Awards Non-Equity Incentive Plan Compensation (3) ($) All Other Compensation (4) ($) Total ($) 300 $ 300 $ 300 $ 250 $ 200 $ 300 $ 300 $ 300 $ 300 $ 300 $ 328,422 $ 310,096 $ 281,711 $ 175,542 $ 19,077 $ 1,278,140 21,250 $ 1,137,096 482,235 $ 159,146 $ 21,148 $ 1,284,014 161,004 $ 110,292 $ 40,291 $ 642,971 151,991 $ 153,962 $ 145,351 $ 134,438 $ 68,726 $ 62,307 $ — $ — $ — $ 37,646 $ 580,234 31,443 $ 613,634 21,926 $ 592,739 33,934 $ 584,217 26,108 $ 562,448 230,927 $ 219,358 $ 43,158 $ 1,044,677 218,027 $ 136,688 $ 44,928 $ 935,019 2012 $ 317,231 $ 20,200 $ 182,453 $ 2012 $ 527,667 $ 300 $ 353,856 $ 123,921 $ 45,025 $ 1,050,769 2014 $ 247,464 $ — $ 92,371 $ 65,555 $ 332,062 $ 737,452 2014 $ 312,090 $ 100 $ 118,026 $ 100,000 $ 39,389 $ 569,605 2013 $ 300,454 $ 100 $ 111,429 $ 68,904 $ 33,186 $ 514,073 Lesa France Kennedy Vice Chairman and CEO Daniel W. Houser SVP, CFO, Treasurer James C. France Chairman and Asst. Treasurer John R. Saunders President Brian K. Wilson Vice President, Corporate Development Joel S. Chitwood President - Daytona International Speedway (1) Amounts shown in this column represent amounts for a small holiday bonus based on seniority. Mr. Houser received a cash bonus of $20,000 for services performed during fiscal 2012. (2) Amounts shown in this column represent stock awards made to each of the named executives pursuant to our 2006 Long-Term Incentive Plan as a result of the executives' prior fiscal year performance. All amounts reflected are as of the grant date. For further information on these awards, please see the discussion labeled “Compensation for the Named Executive Officers in 2014” beginning on page 19 herein. For fiscal 2012, amounts shown in this column also include stock awards pursuant to our 2006 Long-Term Incentive Plan made to Ms. Kennedy and Messrs. Houser and Saunders due to the suspension of the fiscal year 2011 cash bonus. The amounts for Stock Awards reflect the aggregate grant date fair value of such awards, computed in accordance with Financial Accounting Standards Board ASC Topic 718. See Note 13 — Long-Term Stock Incentive Plan to the Consolidated Financial Statements in our fiscal 2014 Annual Report on Form 10-K for additional information concerning this plan and related Stock Awards and valuation assumptions. (3) For additional information on our annual incentive compensation plan for management, please see the discussion labeled “Compensation for the Named Executive Officers in 2014” beginning on page 19 herein. (4) Amounts shown under the “All Other Compensation” column represent amounts paid for basic employee benefits available to all employees (i.e. group life insurance, accidental death and dismemberment insurance, group health insurance, long term disability insurance, and short term disability coverage), the annual lease value of Company- provided vehicles, travel related costs of guests in connection with attending events at the motorsports entertainment facilities operated by the Company, a NASCAR banquet, other business related travel, as well as other personal travel, and 401(K) contributions. Although the coverage limits for Life Insurance and long term disability are different for officers, the cost incurred by the Company to provide the executive benefit is the same as the cost for basic employee benefits. Mr. Wilson's "All Other Compensation" includes a severance payment in the amount of $303,493 made in accordance with a fully executed Separation Agreement and General Release. Mr. Wilson's satisfaction of performance Mr. Houser's base salary increased 3.0% in fiscal 2014. The Compensation Committee assessment of Mr. Houser’s SUMMARY COMPENSATION TABLE performance in fiscal 2014 aligned to support a non-equity incentive in the amount of $110,292, which was 97% of his $114,173 total target opportunity. This reflects a 93% payout due to performance against the corporate financial performance measures, as well as an additional amount related to his performance against individual goals set by the Compensation Committee. Mr. Houser also received 5,121 shares of restricted stock (valued at $161,004 as of the May 1, 2014 grant date) for his performance in fiscal year 2013. The restricted stock is subject to a vesting schedule, with 50% vesting in three years and the remainder vesting in five years. The final value will be determined on the actual vesting date. This grant is pursuant to the established long-term incentive plan of the Company. In addition, the Compensation Committee determined, based on Mr. Houser’s fiscal year 2014 performance, that he is eligible for a restricted stock award of 5,180 shares, the value of which will be determined upon the May 1, 2015 grant date. This grant is pursuant to the established long-term incentive plan and based on annual financial performance of the Company. Brian K. Wilson: Mr. Wilson, Vice President, Corporate Development, terminated employment with the Company effective September 30, 2014. In addition to the Company's overall financial and strategic goals, Mr. Wilson also had goals and objectives for his functional areas of responsibility. His strategic operational goals included oversight for corporate development and strategic planning and executing to monetize the Company's real estate holdings. In light of senior leadership's assessment of Mr. Wilson's performance during his tenure in fiscal 2014, he received a total non-equity incentive in the amount of $65,555, which was 90% of his $72,838 total target opportunity. Mr. Wilson also received 2,938 shares of restricted stock (valued at $92,371 as of the May 1, 2014 grant date) for his performance in fiscal year 2013. The restricted stock is subject to a vesting schedule, with 50% vesting in three years and the remainder vesting in five years. The final value will be determined on the actual vesting date. This grant is pursuant to the established long-term incentive plan of the Mr. Wilson received no additional restricted stock for fiscal 2014 performance due to his exit from the Company prior to the Company. close of fiscal year 2014. Joel S. Chitwood: Mr. Chitwood, in his position as Vice President of ISC and President of Daytona International Speedway, had financial objectives that focused on the overall performance of the Company, as well as goals and objectives for his functional area of responsibility in leading the strategic and revenue generation performance of Daytona International Speedway. His strategic goals included creating brand interest and demand for product, as well as focusing on elements of pricing strategies and margin rates to drive customer renewal and retention, and the overall guest experience. The Compensation Committee, based on Mr. Chitwood's fiscal year 2014 performance, determined to support receiving a non- equity incentive of $100,000 which was 119% of his $84,186 total target opportunity. This amount is reflective of his successful undertaking of the Daytona Rising project, as well as continued operational performance of Daytona International Speedway. Mr. Chitwood also received a grant of 3,754 shares of restricted stock (valued at $118,026 as of the May 1, 2014 grant date) for his fiscal year 2013 performance. The restricted stock is subject to a vesting schedule, with 50% vesting in three years and the remainder vesting in five years. The final value will be determined on the actual vesting date. This grant is pursuant to the established long-term incentive plan of the Company. In addition, the Compensation Committee determined, based on his fiscal year 2014 performance, that Mr. Chitwood is eligible for a restricted stock award of 3,795 shares, the value of which will be determined upon the May 1, 2015 grant date. This grant is pursuant to the established long-term incentive plan and based on annual financial performance of the Company. Name and Principal Position Lesa France Kennedy Vice Chairman and CEO Daniel W. Houser SVP, CFO, Treasurer James C. France Chairman and Asst. Treasurer John R. Saunders President Brian K. Wilson Vice President, Corporate Development Joel S. Chitwood President - Daytona International Speedway Salary ($) Bonus (1) ($) Year 2014 $ 2013 $ 2012 $ 2014 $ 2013 $ 2012 $ 2014 $ 2013 $ 2012 $ 2014 $ 2013 $ 2012 $ 2014 $ 648,630 $ 629,908 $ 621,185 $ 331,134 $ 321,671 $ 317,231 $ 416,551 $ 404,632 $ 401,602 $ 550,934 $ 535,076 $ 527,667 $ $ 247,464 Stock Awards (2) ($) 328,422 $ 310,096 $ 482,235 $ 161,004 $ 151,991 $ 182,453 $ 153,962 $ 145,351 $ 134,438 $ 230,927 $ 218,027 $ 353,856 $ $ 92,371 300 $ 300 $ 300 $ 250 $ 200 $ 20,200 $ 300 $ 300 $ 300 $ 300 $ 300 $ 300 $ $ — Non-Equity Incentive Plan Compensation (3) ($) All Other Compensation (4) ($) Total ($) 281,711 $ 175,542 $ 159,146 $ 110,292 $ 68,726 $ 62,307 $ — $ — $ — $ 219,358 $ 136,688 $ 123,921 $ $ 65,555 19,077 $ 1,278,140 21,250 $ 1,137,096 21,148 $ 1,284,014 642,971 40,291 $ 580,234 37,646 $ 613,634 31,443 $ 592,739 21,926 $ 33,934 $ 584,217 562,448 26,108 $ 43,158 $ 1,044,677 44,928 $ 935,019 45,025 $ 1,050,769 737,452 332,062 $ 2014 $ 2013 $ 312,090 $ 300,454 $ 100 $ 100 $ 118,026 $ 111,429 $ 100,000 $ 68,904 $ 39,389 $ 33,186 $ 569,605 514,073 (1) Amounts shown in this column represent amounts for a small holiday bonus based on seniority. Mr. Houser received a cash bonus of $20,000 for services performed during fiscal 2012. (2) Amounts shown in this column represent stock awards made to each of the named executives pursuant to our 2006 Long-Term Incentive Plan as a result of the executives' prior fiscal year performance. All amounts reflected are as of the grant date. For further information on these awards, please see the discussion labeled “Compensation for the Named Executive Officers in 2014” beginning on page 19 herein. For fiscal 2012, amounts shown in this column also include stock awards pursuant to our 2006 Long-Term Incentive Plan made to Ms. Kennedy and Messrs. Houser and Saunders due to the suspension of the fiscal year 2011 cash bonus. The amounts for Stock Awards reflect the aggregate grant date fair value of such awards, computed in accordance with Financial Accounting Standards Board ASC Topic 718. See Note 13 — Long-Term Stock Incentive Plan to the Consolidated Financial Statements in our fiscal 2014 Annual Report on Form 10-K for additional information concerning this plan and related Stock Awards and valuation assumptions. (3) For additional information on our annual incentive compensation plan for management, please see the discussion labeled “Compensation for the Named Executive Officers in 2014” beginning on page 19 herein. (4) Amounts shown under the “All Other Compensation” column represent amounts paid for basic employee benefits available to all employees (i.e. group life insurance, accidental death and dismemberment insurance, group health insurance, long term disability insurance, and short term disability coverage), the annual lease value of Company- provided vehicles, travel related costs of guests in connection with attending events at the motorsports entertainment facilities operated by the Company, a NASCAR banquet, other business related travel, as well as other personal travel, and 401(K) contributions. Although the coverage limits for Life Insurance and long term disability are different for officers, the cost incurred by the Company to provide the executive benefit is the same as the cost for basic employee benefits. Mr. Wilson's "All Other Compensation" includes a severance payment in the amount of $303,493 made in accordance with a fully executed Separation Agreement and General Release. Mr. Wilson's satisfaction of performance ISC // 2015 INFORMATION STATEMENT // 22 (3) The targeted number of shares is fixed by the Compensation Committee and represents a specified earning opportunity for the named executive officer’s annual base salary based upon the average price of our publicly traded shares during the fiscal year prior to the establishment of the share target. This targeted share award amount is communicated to the named executive officers during the second quarter of our fiscal year. Upon completion of the fiscal year and the financial audit, our normalized performance against the financial performance measures is evaluated, a percentage of the targeted award to be actually awarded is determined, reviewed and approved by the Compensation Committee and the restricted shares are issued in the name of the named executive officers on May 1 following the completion of the fiscal year. The maximum amount of the award is 1.5 times the target. In 2014, payout of the award was determined by actual performance against the budgeted normalized corporate financial performance measures approved by the Board. The approved measurements are weighted to calculate the total target, detailed as follows: (1) Revenue, (2) Operating Margin and (3) Capital Allocation. (4) The Grant Date Fair Value of Stock and Option Awards reflects the aggregate grant date fair value of the restricted stock granted pursuant to our 2006 Long-Term Incentive Plan computed in accordance with Financial Accounting Standards Board ASC Topic 718. See Note 13 – Long-Term Stock Incentive Plan to the Consolidated Financial Statements in our fiscal 2014 Annual Report on Form 10-K for additional information concerning this plan and related Stock Awards and valuation assumptions. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END Name Lesa France Kennedy Daniel W. Houser James C. France John R. Saunders Brian K. Wilson Joel S. Chitwood Stock Awards Number of Shares of Stock That Have Not Vested (1)(#) Market Value of Shares of Stock That Have Not Vested (2)($) 43,034 18,646 16,751 30,802 12,088 14,354 $ $ $ $ $ $ 1,346,104 583,247 523,971 963,487 378,113 448,993 objectives in the sale of the Company's Staten Island property was a consideration included in the terms of such agreement. GRANTS OF PLAN-BASED AWARDS Name Lesa France Kennedy Daniel W. Houser James C. France John R. Saunders Brian K. Wilson Joel S. Chitwood Grant Date 11/30/14 05/01/14 11/30/14 05/01/14 11/30/14 05/01/14 11/30/14 05/01/14 11/30/14 05/01/14 11/30/14 05/01/14 Author- ization Date 11/04/14 01/29/14 11/04/14 01/29/14 11/04/14 01/29/14 11/04/14 01/29/14 11/04/14 01/29/14 11/04/14 01/29/14 Estimated Future Payouts Under Non-Equity Incentive Plan Awards Thres- hold (1)($) $ — Maximum ($) $ 437,437 Target (2)($) $ 291,625 Estimated Future Payouts Under Equity Incentive Plan Awards Thres- hold (1)($) Target (3)($) Maximum ($) All Other Stock Awards: Number of Shares of Stock (#) Grant Date Fair Value of Stock and Option Awards (4)($) $ — $ 342,915 $ 514,372 — $ 328,422 $ — $ 114,173 $ 171,259 $ — $ — $ — $ — $ 227,078 $ 340,167 $ — $ 72,838 $ 109,257 $ — $ 84,186 $ 126,279 $ — $ 168,086 $ 252,129 — $ 161,004 $ — $ 160,741 $ 241,111 — $ 153,962 $ — $ 241,112 $ 361,668 — $ 230,927 $ — $ — $ — — $ 92,371 $ — $ 123,132 $ 184,698 — $ 118,026 (1) No thresholds are provided for in the applicable plan. The final award is determined through a calculation based on the weighted measurements as described below, and using the same formula as the equity based cash payout along with a discretionary amount based on performance against individual goals and achievement. (2) For fiscal 2014, a significant portion of the named executive officer’s plan-based non-equity incentive compensation is based upon the Company’s actual performance against the budgeted normalized corporate financial performance measures approved by the Board. The approved measurements are weighted to calculate the total target, detailed as follows: (1) Revenue 34%, (2) Operating Margin 33%, and (3) Capital Allocation metrics 33%. The calculated variance percentage of actual performance compared to budgeted performance is then used to determine the percentage payout for each respective measure, as represented in Table 1. Based on the evaluation of the Company’s performance against these measures for fiscal 2014, the portion of each named executive officer’s plan-based incentive compensation was set at 93% of the targeted opportunity, with weighted performance of 34% for the revenue target, 26% for the operating margin target and 33% for the capital allocation target. A more detailed analysis of our financial and operational performance is contained in the Management’s Discussion & Analysis section of our 2014 Annual Report on Form 10-K filed with the SEC. Table 1 Percent Variance > + 10% > 0.0% < - 2.5% < - 5.0% < - 6.5% < - 8.5% < - 10.0% > 10.0% ISC // 2015 INFORMATION STATEMENT // 23 Payout Discretionary 100 % 90 % 80 % 70 % 60 % 50 % 0 % objectives in the sale of the Company's Staten Island property was a consideration included in the terms of such (3) agreement. GRANTS OF PLAN-BASED AWARDS The targeted number of shares is fixed by the Compensation Committee and represents a specified earning opportunity for the named executive officer’s annual base salary based upon the average price of our publicly traded shares during the fiscal year prior to the establishment of the share target. This targeted share award amount is communicated to the named executive officers during the second quarter of our fiscal year. Upon completion of the fiscal year and the financial audit, our normalized performance against the financial performance measures is evaluated, a percentage of the targeted award to be actually awarded is determined, reviewed and approved by the Compensation Committee and the restricted shares are issued in the name of the named executive officers on May 1 following the completion of the fiscal year. The maximum amount of the award is 1.5 times the target. In 2014, payout of the award was determined by actual performance against the budgeted normalized corporate financial performance measures approved by the Board. The approved measurements are weighted to calculate the total target, detailed as follows: (1) Revenue, (2) Operating Margin and (3) Capital Allocation. (4) The Grant Date Fair Value of Stock and Option Awards reflects the aggregate grant date fair value of the restricted stock granted pursuant to our 2006 Long-Term Incentive Plan computed in accordance with Financial Accounting Standards Board ASC Topic 718. See Note 13 – Long-Term Stock Incentive Plan to the Consolidated Financial Statements in our fiscal 2014 Annual Report on Form 10-K for additional information concerning this plan and related Stock Awards and valuation assumptions. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END Name Lesa France Kennedy Daniel W. Houser James C. France John R. Saunders Brian K. Wilson Joel S. Chitwood Stock Awards Number of Shares of Stock That Have Not Vested (1)(#) 43,034 18,646 16,751 30,802 12,088 14,354 $ $ $ $ $ $ Market Value of Shares of Stock That Have Not Vested (2)($) 1,346,104 583,247 523,971 963,487 378,113 448,993 Estimated Future Payouts Under Non-Equity Incentive Plan Awards Estimated Future Payouts Under Equity Incentive Plan Awards Grant Date Author- ization Date Thres- hold (1)($) Target (2)($) Maximum ($) Target (3)($) Maximum ($) Thres- hold (1)($) All Other Stock Awards: Number of Shares of Stock (#) Value of Stock Grant Date Fair and Option Awards (4)($) 11/30/14 05/01/14 11/04/14 01/29/14 11/30/14 05/01/14 11/04/14 01/29/14 11/30/14 05/01/14 11/04/14 01/29/14 11/30/14 05/01/14 11/04/14 01/29/14 11/30/14 05/01/14 11/04/14 01/29/14 11/30/14 05/01/14 11/04/14 01/29/14 $ — $ 291,625 $ 437,437 $ — $ 114,173 $ 171,259 $ — $ — $ — $ — $ 227,078 $ 340,167 $ — $ 72,838 $ 109,257 $ — $ 84,186 $ 126,279 $ — $ 342,915 $ 514,372 — $ 328,422 $ — $ 168,086 $ 252,129 — $ 161,004 $ — $ 160,741 $ 241,111 — $ 153,962 $ — $ 241,112 $ 361,668 — $ 230,927 $ — $ — $ — — $ 92,371 $ — $ 123,132 $ 184,698 — $ 118,026 Name Lesa France Kennedy Daniel W. Houser James C. France John R. Saunders Brian K. Wilson Joel S. Chitwood (1) No thresholds are provided for in the applicable plan. The final award is determined through a calculation based on the weighted measurements as described below, and using the same formula as the equity based cash payout along with a discretionary amount based on performance against individual goals and achievement. (2) For fiscal 2014, a significant portion of the named executive officer’s plan-based non-equity incentive compensation is based upon the Company’s actual performance against the budgeted normalized corporate financial performance measures approved by the Board. The approved measurements are weighted to calculate the total target, detailed as follows: (1) Revenue 34%, (2) Operating Margin 33%, and (3) Capital Allocation metrics 33%. The calculated variance percentage of actual performance compared to budgeted performance is then used to determine the percentage payout for each respective measure, as represented in Table 1. Based on the evaluation of the Company’s performance against these measures for fiscal 2014, the portion of each named executive officer’s plan-based incentive compensation was set at 93% of the targeted opportunity, with weighted performance of 34% for the revenue target, 26% for the operating margin target and 33% for the capital allocation target. A more detailed analysis of our financial and operational performance is contained in the Management’s Discussion & Analysis section of our 2014 Annual Report on Form 10-K filed with the SEC. Table 1 Percent Variance > + 10% > 0.0% < - 2.5% < - 5.0% < - 6.5% < - 8.5% < - 10.0% > 10.0% Payout Discretionary 100 % 90 % 80 % 70 % 60 % 50 % 0 % ISC // 2015 INFORMATION STATEMENT // 24 (1) The table below shows the vesting dates for the number of shares of common stock underlying unvested restricted stock grants reflected in the Number of Shares of Stock That Have Not Vested column: OPTION EXERCISES AND STOCK VESTED Name Lesa France Kennedy Daniel W. Houser James C. France John R. Saunders Brian K. Wilson Joel S. Chitwood Vesting Date 05/01/2015 05/01/2016 05/01/2017 05/01/2018 05/01/2019 05/01/2015 05/01/2016 05/01/2017 05/01/2018 05/01/2019 05/01/2015 05/01/2016 05/01/2017 05/01/2018 05/01/2019 05/01/2015 05/01/2016 05/01/2017 05/01/2018 05/01/2019 05/01/2015 05/01/2016 05/01/2017 05/01/2018 05/01/2019 05/01/2015 05/01/2016 05/01/2017 05/01/2018 05/01/2019 Restricted Stock 11,062 7,775 14,257 4,717 5,223 4,241 3,554 5,979 2,312 2,560 3,485 3,640 4,967 2,211 2,448 8,034 5,478 10,302 3,316 3,672 2,896 2,385 3,802 1,536 1,469 3,462 2,544 4,776 1,695 1,877 (2) Amounts are calculated by multiplying $31.28, the closing price of our common stock on November 28, 2014, by the that these shares will vest in accordance with the original vesting schedule. applicable number of shares. (3) Amounts are calculated by multiplying $31.28, the closing price of our common stock on November 28, 2014, by the Stock Awards Number of Shares Acquired on Vesting (#) 4,343 1,808 3,568 3,010 1,230 849 Value Realized on Vesting (1) ($) 139,818 58,287 117,630 96,799 39,643 26,693 Number of Shares of Stock That Have Not Payment upon a Change-in-Control Vested (#) (3)($) 43,034 18,646 16,751 30,802 12,088 14,354 1,346,104 583,247 523,971 963,487 378,113 448,993 $ $ $ $ $ $ $ $ $ $ $ $ Name Lesa France Kennedy Daniel W. Houser James C. France John R. Saunders Brian K. Wilson Joel S. Chitwood Name Lesa France Kennedy (1) Daniel W. Houser (1) James C. France (1) John R. Saunders (1) Brian K. Wilson (2) Joel S. Chitwood (1) February 11, 2010. applicable number of shares. COMPENSATION OF DIRECTORS We pay our non-employee directors: a $20,000 annual cash fee; (cid:127) (cid:127) (cid:127) (cid:127) attended; (1) Amounts are calculated by multiplying the number of shares vesting by the market value of our common stock on the dates of stock vesting, 4/1/2014 and 5/1/2014, which were $33.99 and $31.44, respectively. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL The only potential payments for any of the named executive officers are related to the unvested shares of restricted stock as shown in the Outstanding Equity Awards at Fiscal Year End above. Upon the occurrence of a change of control as defined in the individual participant plans for all participants in the restricted stock incentive program all of the unvested shares would immediately vest for each participant. There are no other arrangements to be disclosed pursuant to this item. (1) Change-in-Control is defined in the individual participant plans for all participants in the restricted stock incentive program. A copy of the plan is on file with the SEC in connection with our Form S-8 registration statement, filed on (2) Mr. Wilson terminated employment with the Company effective September 30, 2014. Notwithstanding such termination, in accordance with a fully executed Separation Agreement and General Release, the Company has agreed an annual grant of restricted Class A common stock in an amount equal to $30,000 based on the stock price on the grant date of such restricted stock; a cash fee of $750 for each meeting of the board of directors attended; a cash fee of $500 for each meeting of each committee (other than the Audit Committee) of the board of directors ISC // 2015 INFORMATION STATEMENT // 25 Daniel W. Houser James C. France John R. Saunders Brian K. Wilson Joel S. Chitwood Vesting Date 05/01/2015 05/01/2016 05/01/2017 05/01/2018 05/01/2019 05/01/2015 05/01/2016 05/01/2017 05/01/2018 05/01/2019 05/01/2015 05/01/2016 05/01/2017 05/01/2018 05/01/2019 05/01/2015 05/01/2016 05/01/2017 05/01/2018 05/01/2019 05/01/2015 05/01/2016 05/01/2017 05/01/2018 05/01/2019 05/01/2015 05/01/2016 05/01/2017 05/01/2018 05/01/2019 11,062 7,775 14,257 4,717 5,223 4,241 3,554 5,979 2,312 2,560 3,485 3,640 4,967 2,211 2,448 8,034 5,478 3,316 3,672 2,896 2,385 3,802 1,536 1,469 3,462 2,544 4,776 1,695 1,877 10,302 (2) Amounts are calculated by multiplying $31.28, the closing price of our common stock on November 28, 2014, by the applicable number of shares. (1) The table below shows the vesting dates for the number of shares of common stock underlying unvested restricted stock OPTION EXERCISES AND STOCK VESTED grants reflected in the Number of Shares of Stock That Have Not Vested column: Name Lesa France Kennedy Restricted Stock Name Lesa France Kennedy Daniel W. Houser James C. France John R. Saunders Brian K. Wilson Joel S. Chitwood Stock Awards Number of Shares Acquired on Vesting (#) 4,343 1,808 3,568 3,010 1,230 849 $ $ $ $ $ $ Value Realized on Vesting (1) ($) 139,818 58,287 117,630 96,799 39,643 26,693 (1) Amounts are calculated by multiplying the number of shares vesting by the market value of our common stock on the dates of stock vesting, 4/1/2014 and 5/1/2014, which were $33.99 and $31.44, respectively. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL The only potential payments for any of the named executive officers are related to the unvested shares of restricted stock as shown in the Outstanding Equity Awards at Fiscal Year End above. Upon the occurrence of a change of control as defined in the individual participant plans for all participants in the restricted stock incentive program all of the unvested shares would immediately vest for each participant. There are no other arrangements to be disclosed pursuant to this item. Name Lesa France Kennedy (1) Daniel W. Houser (1) James C. France (1) John R. Saunders (1) Brian K. Wilson (2) Joel S. Chitwood (1) Number of Shares of Stock That Have Not Vested (#) 43,034 18,646 16,751 30,802 12,088 14,354 $ $ $ $ $ $ Payment upon a Change-in-Control (3)($) 1,346,104 583,247 523,971 963,487 378,113 448,993 (1) Change-in-Control is defined in the individual participant plans for all participants in the restricted stock incentive program. A copy of the plan is on file with the SEC in connection with our Form S-8 registration statement, filed on February 11, 2010. (2) Mr. Wilson terminated employment with the Company effective September 30, 2014. Notwithstanding such termination, in accordance with a fully executed Separation Agreement and General Release, the Company has agreed that these shares will vest in accordance with the original vesting schedule. (3) Amounts are calculated by multiplying $31.28, the closing price of our common stock on November 28, 2014, by the applicable number of shares. COMPENSATION OF DIRECTORS We pay our non-employee directors: (cid:127) (cid:127) (cid:127) (cid:127) a $20,000 annual cash fee; an annual grant of restricted Class A common stock in an amount equal to $30,000 based on the stock price on the grant date of such restricted stock; a cash fee of $750 for each meeting of the board of directors attended; a cash fee of $500 for each meeting of each committee (other than the Audit Committee) of the board of directors attended; ISC // 2015 INFORMATION STATEMENT // 26 (cid:127) members of the Audit Committee are paid a cash fee of $750 for each meeting of the Audit Committee attended; and As of November 30, 2014 the non-employee directors held the following shares of restricted stock and stock options to acquire (cid:127) the chairman of the Audit Committee is paid an additional $5,000 annual cash fee. shares of our Class A common stock: The number of restricted shares granted to each non-employee director are determined by dividing a dollar amount by the per- share closing price of our Class A common stock on the date of grant (rounded to the nearest whole share). These stock awards are issued pursuant to the 2006 Long-Term Stock Incentive Plan and vest after one year. All meeting fees are paid at the time of the meeting. In addition, we also reimburse non-employee directors for all expenses incurred in the performance of their duties. No non-employee director received perquisites and personal benefits with a total value of $10,000 or more during the fiscal year ended November 30, 2014. During fiscal 2012, the Board adopted share ownership guidelines applicable to non-employee directors. The guidelines provide that non-employee directors should, upon the later of (a) three years after the adoption of the guidelines in April 2012, and (b) three years of becoming a director, own and hold a minimum of common stock of the Company with a market value of at least $90,000. Each such non-employee director is required to maintain that level of stock ownership for so long as he or she serves on the Board. Restricted shares issued by the Company to a non-employee director are counted for purposes of determining a non-employee director's ownership. Name Larry Aiello, Jr. J. Hyatt Brown Edsel B. Ford, II Brian Z. France William P. Graves Sonia Green Christy F. Harris Morteza Hosseini-Kargar Larry Woodard Aggregate Option Awards Outstanding at 11/30/2014 (1)(#) Number of Shares of Stock That Have Not Vested (1)(#) 9,423 4,564 10,929 15,026 9,689 — 12,394 11,839 — 902 902 902 902 902 902 902 902 902 DIRECTOR COMPENSATION TABLE Name Larry Aiello, Jr. J. Hyatt Brown Edsel B. Ford, II Brian Z. France William P. Graves Sonia Green Christy F. Harris Morteza Hosseini-Kargar Larry Woodard Fees Earned or Paid in Cash ($)(1) Stock Awards ($)(2) Total ($) $ $ $ $ $ $ $ $ $ 35,000 $ 29,750 $ 26,250 $ 22,250 $ 28,500 $ 24,250 $ 26,250 $ 25,750 $ 24,250 $ 30,019 $ 30,019 $ 30,019 $ 30,019 $ 30,019 $ 30,019 $ 30,019 $ 30,019 $ 30,019 $ 65,019 59,769 56,269 52,269 58,519 54,269 56,269 55,769 54,269 (1) Amounts shown in the “Fees Earned or Paid in Cash” column represent the sum of all annual fee and meeting fee cash payments made to the indicated non-employee directors during the fiscal year ended November 30, 2014. It does not include any expense reimbursement. (2) Stock Awards were granted pursuant to our 2006 Long-Term Incentive Plan. The amounts for Stock Awards reflect the aggregate grant date fair value of such awards, computed in accordance with Financial Accounting Standards Board ASC Topic 718. See Note 13 — Long-Term Incentive Plan to the Consolidated Financial Statements in our fiscal 2014 Annual Report on Form 10-K for additional information concerning this plan and related Stock Awards and valuation assumptions. ISC // 2015 INFORMATION STATEMENT // 27 (1) Stock and Option Awards were granted pursuant to our 2006 Long-Term Incentive Plan. See also Note 13 — Long- Term Stock Incentive Plan to the Consolidated Financial Statements in our fiscal year 2014 Annual Report on Form 10- K for additional information concerning this plan and related Stock and Option Awards and valuation assumptions. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Compensation Committee members whose names appear on the Compensation Committee Report below were committee members during all of fiscal year 2014. No member of the Compensation Committee is or has been a former or current executive officer of the Company or had any relationships requiring disclosure by the Company under the SEC’s rules requiring disclosure of certain relationships and related party transactions. None of the Company’s executive officers served as a director or a member of a compensation committee (or other committee serving an equivalent function) of any other entity that has or has had one or more executive officers who served as a director or member of the Compensation Committee during the fiscal year ended November 30, 2014. COMPENSATION COMMITTEE REPORT The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management and recommended to the board of directors that the Compensation Discussion and Analysis be included in this information statement and our annual report on Form 10-K. Edsel B. Ford, II William P. Graves Larry D. Woodard (cid:127) members of the Audit Committee are paid a cash fee of $750 for each meeting of the Audit Committee attended; and (cid:127) the chairman of the Audit Committee is paid an additional $5,000 annual cash fee. As of November 30, 2014 the non-employee directors held the following shares of restricted stock and stock options to acquire shares of our Class A common stock: The number of restricted shares granted to each non-employee director are determined by dividing a dollar amount by the per- share closing price of our Class A common stock on the date of grant (rounded to the nearest whole share). These stock awards are issued pursuant to the 2006 Long-Term Stock Incentive Plan and vest after one year. All meeting fees are paid at the time of the meeting. In addition, we also reimburse non-employee directors for all expenses incurred in the performance of their duties. No non-employee director received perquisites and personal benefits with a total value of $10,000 or more during the fiscal year ended November 30, 2014. During fiscal 2012, the Board adopted share ownership guidelines applicable to non-employee directors. The guidelines provide that non-employee directors should, upon the later of (a) three years after the adoption of the guidelines in April 2012, and (b) three years of becoming a director, own and hold a minimum of common stock of the Company with a market value of at least $90,000. Each such non-employee director is required to maintain that level of stock ownership for so long as he or she serves on the Board. Restricted shares issued by the Company to a non-employee director are counted for purposes of determining a non-employee director's ownership. DIRECTOR COMPENSATION TABLE Name Larry Aiello, Jr. J. Hyatt Brown Edsel B. Ford, II Brian Z. France William P. Graves Sonia Green Christy F. Harris Morteza Hosseini-Kargar Larry Woodard Fees Earned or Paid in Cash ($)(1) Stock Awards ($)(2) Total ($) $ $ $ $ $ $ $ $ $ 35,000 $ 29,750 $ 26,250 $ 22,250 $ 28,500 $ 24,250 $ 26,250 $ 25,750 $ 24,250 $ 30,019 $ 30,019 $ 30,019 $ 30,019 $ 30,019 $ 30,019 $ 30,019 $ 30,019 $ 30,019 $ 65,019 59,769 56,269 52,269 58,519 54,269 56,269 55,769 54,269 (1) Amounts shown in the “Fees Earned or Paid in Cash” column represent the sum of all annual fee and meeting fee cash payments made to the indicated non-employee directors during the fiscal year ended November 30, 2014. It does not include any expense reimbursement. (2) Stock Awards were granted pursuant to our 2006 Long-Term Incentive Plan. The amounts for Stock Awards reflect the aggregate grant date fair value of such awards, computed in accordance with Financial Accounting Standards Board ASC Topic 718. See Note 13 — Long-Term Incentive Plan to the Consolidated Financial Statements in our fiscal 2014 Annual Report on Form 10-K for additional information concerning this plan and related Stock Awards and valuation assumptions. Name Larry Aiello, Jr. J. Hyatt Brown Edsel B. Ford, II Brian Z. France William P. Graves Sonia Green Christy F. Harris Morteza Hosseini-Kargar Larry Woodard Aggregate Option Awards Outstanding at 11/30/2014 (1)(#) 9,423 4,564 10,929 15,026 9,689 — 12,394 11,839 — Number of Shares of Stock That Have Not Vested (1)(#) 902 902 902 902 902 902 902 902 902 (1) Stock and Option Awards were granted pursuant to our 2006 Long-Term Incentive Plan. See also Note 13 — Long- Term Stock Incentive Plan to the Consolidated Financial Statements in our fiscal year 2014 Annual Report on Form 10- K for additional information concerning this plan and related Stock and Option Awards and valuation assumptions. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Compensation Committee members whose names appear on the Compensation Committee Report below were committee members during all of fiscal year 2014. No member of the Compensation Committee is or has been a former or current executive officer of the Company or had any relationships requiring disclosure by the Company under the SEC’s rules requiring disclosure of certain relationships and related party transactions. None of the Company’s executive officers served as a director or a member of a compensation committee (or other committee serving an equivalent function) of any other entity that has or has had one or more executive officers who served as a director or member of the Compensation Committee during the fiscal year ended November 30, 2014. COMPENSATION COMMITTEE REPORT The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management and recommended to the board of directors that the Compensation Discussion and Analysis be included in this information statement and our annual report on Form 10-K. Edsel B. Ford, II William P. Graves Larry D. Woodard ISC // 2015 INFORMATION STATEMENT // 28 PERFORMANCE GRAPH VOTING PROCEDURE With respect to the election of directors, the person receiving a plurality of the votes cast by shares entitled to vote for the position being filled shall be elected. We know of no other items to come before the meeting other than those stated above. On any other item that should come before the meeting, the matter shall be decided by a majority of the votes cast by shares entitled to vote at the meeting. In advance of the meeting we may appoint one or more inspectors of election or judges of the vote, as the case may be, to act at the meeting or any adjournment thereof. In case any person who may be appointed as an inspector or judge fails to appear or act, the vacancy may be filled at the meeting by the person presiding. In case of dispute the inspectors or judges, if any, shall determine the number of shares of stock outstanding and the voting power of each, the shares of stock represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots and consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate votes, ballots and consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all shareholders. On request of the person presiding at the meeting, the inspector or inspectors or judge or judges, if any, shall make a report in writing of any challenge, question or matter determined by him or them, and execute a certificate of any fact found by him or them. DISSENTERS’ RIGHT OF APPRAISAL rights of dissenters. We do not anticipate that any matter will be acted upon at the meeting that would give rise to rights of appraisal or similar AVAILABLE INFORMATION We file annual, quarterly and special reports, information statements and other information with the SEC. Our SEC filings are available to the public over the internet at the SEC’s web site at www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facilities at 100 F Street, NE, Washington, D.C. 20549. You can also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, NE, Washington D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities. You can also obtain information about us at the offices of the Financial Industry Regulatory Authority, 1735 K St., N.W., Washington, D.C. 20006. By Order of the Board of Directors W. Garrett Crotty Senior Vice President, Secretary and General Counsel * Assumes $100 investment in the common stock of International Speedway Corporation, Nasdaq Stocks SIC 7900- 7999 (US Companies) and Nasdaq Stock Market Indices on November 30, 2009 (US Companies) with dividend reinvestment. The rules of the SEC require us to provide a line graph covering at least the last five fiscal years and comparing the yearly percentage change in our total shareholder return on a class of our 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 above compares the cumulative total five year return of our class A common stock with that of the NASDAQ Stock Market Index (U.S. Companies) and with the 40 NASDAQ issuers (U.S. companies) listed in SIC codes 7900-7999, which encompasses service businesses in the amusement, sports and recreation industry, including indoor operations that are not subject to the impact of weather on operations, and pari-mutual and other wagering operations. We conduct large outdoor sporting and entertainment events that are subject to the impact of weather. 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 our business and the fact that public information is available concerning only a limited number of companies involved in the same line of business, and no public information is available concerning other companies in our line of business, we do not believe that the information presented above is meaningful. March 6, 2015 ISC // 2015 INFORMATION STATEMENT // 29 PERFORMANCE GRAPH VOTING PROCEDURE With respect to the election of directors, the person receiving a plurality of the votes cast by shares entitled to vote for the position being filled shall be elected. We know of no other items to come before the meeting other than those stated above. On any other item that should come before the meeting, the matter shall be decided by a majority of the votes cast by shares entitled to vote at the meeting. In advance of the meeting we may appoint one or more inspectors of election or judges of the vote, as the case may be, to act at the meeting or any adjournment thereof. In case any person who may be appointed as an inspector or judge fails to appear or act, the vacancy may be filled at the meeting by the person presiding. In case of dispute the inspectors or judges, if any, shall determine the number of shares of stock outstanding and the voting power of each, the shares of stock represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes, ballots and consents, hear and determine all challenges and questions arising in connection with the right to vote, count and tabulate votes, ballots and consents, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all shareholders. On request of the person presiding at the meeting, the inspector or inspectors or judge or judges, if any, shall make a report in writing of any challenge, question or matter determined by him or them, and execute a certificate of any fact found by him or them. DISSENTERS’ RIGHT OF APPRAISAL We do not anticipate that any matter will be acted upon at the meeting that would give rise to rights of appraisal or similar rights of dissenters. AVAILABLE INFORMATION We file annual, quarterly and special reports, information statements and other information with the SEC. Our SEC filings are available to the public over the internet at the SEC’s web site at www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facilities at 100 F Street, NE, Washington, D.C. 20549. You can also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, NE, Washington D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference facilities. You can also obtain information about us at the offices of the Financial Industry Regulatory Authority, 1735 K St., N.W., Washington, D.C. 20006. * Assumes $100 investment in the common stock of International Speedway Corporation, Nasdaq Stocks SIC 7900- 7999 (US Companies) and Nasdaq Stock Market Indices on November 30, 2009 (US Companies) with dividend reinvestment. The rules of the SEC require us to provide a line graph covering at least the last five fiscal years and comparing the yearly percentage change in our total shareholder return on a class of our 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 above compares the cumulative total five year return of our class A common stock with that of the NASDAQ Stock Market Index (U.S. Companies) and with the 40 NASDAQ issuers (U.S. companies) listed in SIC codes 7900-7999, which encompasses service businesses in the amusement, sports and recreation industry, including indoor operations that are not subject to the impact of weather on operations, and pari-mutual and other wagering operations. We conduct large outdoor sporting and entertainment events that are subject to the impact of weather. 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 our business and the fact that public information is available concerning only a limited number of companies involved in the same line of business, and no public information is available concerning other companies in our line of business, we do not believe that the information presented above is meaningful. March 6, 2015 By Order of the Board of Directors W. Garrett Crotty Senior Vice President, Secretary and General Counsel ISC // 2015 INFORMATION STATEMENT // 30 This page was intentionally left blank. This page was intentionally left blank. OUR CORPORATE OFFICERS. JAMES C. FRANCE Chairman of the Board LESA FRANCE KENNEDY Vice Chair and Chief Executive Officer JOHN R. SAUNDERS President W. GARRETT CROTTY Senior Vice President, General Counsel & Secretary DANIEL W. HOUSER Senior Vice President, Chief Financial Officer and Treasurer Investor Inquiries and 10-K For more information about International Speedway Corporation, contact: Investor and Corporate Communications International Speedway Corporation International Motorsports Center One Daytona Boulevard Daytona Beach, FL 32114 Phone: (386) 681-6516 www.internationalspeedwaycorporation.com CRAIG A. NEEB Senior Vice President, Business Development and Chief Digital Officer DARYL Q. WOLFE Senior Vice President and Chief Marketing Officer JOIE S. CHITWOOD III President of Daytona International Speedway and Vice President of ISC LAURA E. JACKSON Vice President, Corporate Services BRETT M. SCHARBACK Vice President - Deputy General Counsel, Chief Compliance Officer and Assistant Secretary Corporate Address International Speedway Corporation International Motorsports Center One Daytona Boulevard Daytona Beach, FL 32114-1243 Transfer Agent and Registrar Computershare P.O. Box 43078 Providence, RI 02940-3078 (800) 568-3476 Independent Auditors for 2014 Ernst & Young LLP, Jacksonville, FL dRIvEN TO bE ThE wORLd LEAdER IN MOTORsPORTs ENTERTAINMENT bY PROvIdING sUPERIOR, INNOvATIvE, ANd ThRILLING GUEsT ExPERIENCEs. International Speedway Corporation, (“ISC”) founded in 1953, is a leading promoter of motorsports-themed entertainment activities in the United States. The Company owns and/or operates 13 of the nation’s premier motorsports entertainment facilities, which in total, have approximately 831,500 grandstand seats and 527 suites. ISC’s facilities are located in six of the nation’s top 13 media markets and nearly 80 percent of the country’s population is located within the primary trading areas of its facilities. ISC promotes major motorsports events in every month of the racing season — more than any other motorsports promoter. • Daytona International Speedway® in Florida • Darlington Raceway® in South Carolina • Talladega Superspeedway® in Alabama • Chicagoland Speedway® near Chicago, Illinois • Kansas Speedway® in Kansas City, Kansas • Martinsville Speedway® in Virginia • Richmond International Raceway® in Virginia • Phoenix International Raceway® in Arizona • Michigan International Speedway® located outside Detroit • Homestead-Miami SpeedwaySM in Florida • Auto Club Speedway of Southern CaliforniaSM • Watkins Glen International® in New York near Los Angeles • Route 66 RacewaySM near Chicago, Illinois The Company also owns and operates Motor Racing Network Radio, the nation’s largest independent sports radio network, Americrown Service CorporationSM, a subsidiary that provides catering, food and beverage concessions, and services at certain of our motorsports entertainment facilities, and Motorsports Authentics, which sells officially licensed NASCAR and race teams merchandise. In addition, the Company has a 50 percent interest in the Hollywood Casino at Kansas Speedway. The National Association for Stock Car Auto Racing (“NASCAR”) is the most prominent sanctioning body in stock car racing, based on such factors as geographic presence, number of members and sanctioned events. ISC derives approximately 86 percent of its revenues from NASCAR-sanctioned racing events. ISC attributes its solid revenues and profits to an operating strategy that produces significant operating cash flow which is reinvested in strategic opportunities to grow the business and deliver shareholder value. OUR bOARd OF DIRECTORS. JAMES C. FRANCE Chairman of the Board International Speedway Corporation LESA FRANCE KENNEDY Vice Chair and Chief Executive Officer International Speedway Corporation LARRY AIELLO, JR.1 Retired as President and Chief Executive Officer Corning Cable Systems EDSEL B. FORD II1 Board Director Ford Motor Company J. HYATT BROWN1 Chairman Brown & Brown, Inc. BRIAN Z. FRANCE Chairman and and Chief Executive Officer NASCAR, Inc. WILLIAM P. GRAVES1 President and Chief Executive Officer American Trucking Associations SONIA MARIA GREEN1 Nationally recognized leader in marketing and brand communications. MORI HOSSEINI1 Chairman and Chief Executive Officer of Intervest Construction, Inc. CHRISTY F. HARRIS Attorney in private practice of business and commercial law LARRY D. WOODARD1 President and CEO of Graham Stanley Advertising 1 Independent Board Member I N T E R N A T I O N A L S P E E D W A Y C O R P O R A T I O N • 2 0 1 4 A N N U A L R E P O R T C O M I N G J A N U A R Y 2 0 1 6 INTERNATIONAL MOTORSPORTS CENTER One Daytona Boulevard Daytona Beach, Florida 32114-1252 www.internationalspeedwaycorporation.com 

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