ý | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
¨ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
FLORIDA | 59-0709342 | |
(State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) |
ONE DAYTONA BOULEVARD, DAYTONA BEACH, FLORIDA | 32114 | |
(Address of principal executive offices) | (Zip code) |
Large accelerated filer | ý | Accelerated filer | o | |||
Non-accelerated filer | o | (Do not check if a smaller reporting company) | Smaller reporting company | o |
Class A Common Stock | 25,869,138 shares | as of August 31, 2016 | ||
Class B Common Stock | 19,770,282 shares | as of August 31, 2016 |
TABLE OF CONTENTS | ||||
PART I. | FINANCIAL INFORMATION |
ITEM 1. | FINANCIAL STATEMENTS |
November 30, 2015 | August 31, 2016 | |||||||
(Unaudited) | ||||||||
(In Thousands, Except Share and Per Share Amounts) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and cash equivalents | $ | 160,548 | $ | 265,329 | ||||
Receivables, less allowance of $1,000 in 2015 and 2016, respectively | 42,112 | 42,846 | ||||||
Inventories | 1,639 | 1,731 | ||||||
Income taxes receivable | 572 | 1,492 | ||||||
Prepaid expenses and other current assets | 60,673 | 22,817 | ||||||
Total Current Assets | 265,544 | 334,215 | ||||||
Property and Equipment, net of accumulated depreciation of $839,039 and $913,656 respectively | 1,448,964 | 1,450,279 | ||||||
Other Assets: | ||||||||
Equity investments | 103,249 | 95,864 | ||||||
Intangible assets, net | 178,626 | 178,630 | ||||||
Goodwill | 118,791 | 118,791 | ||||||
Other | 4,489 | 6,775 | ||||||
405,155 | 400,060 | |||||||
Total Assets | $ | 2,119,663 | $ | 2,184,554 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current Liabilities: | ||||||||
Current portion of long-term debt | $ | 3,074 | $ | 3,115 | ||||
Accounts payable | 56,968 | 26,116 | ||||||
Deferred income | 38,243 | 84,053 | ||||||
Other current liabilities | 20,344 | 20,358 | ||||||
Total Current Liabilities | 118,629 | 133,642 | ||||||
Long-Term Debt | 262,762 | 262,386 | ||||||
Deferred Income Taxes | 336,232 | 396,550 | ||||||
Long-Term Deferred Income | 6,969 | 6,245 | ||||||
Other Long-Term Liabilities | 1,856 | 2,443 | ||||||
Commitments and Contingencies | — | — | ||||||
Shareholders’ Equity: | ||||||||
Class A Common Stock, $.01 par value, 80,000,000 shares authorized; 26,348,051 and 25,479,145 issued and outstanding in 2015 and 2016, respectively | 263 | 255 | ||||||
Class B Common Stock, $.01 par value, 40,000,000 shares authorized; 19,942,136 and 19,770,282 issued and outstanding in 2015 and 2016, respectively | 199 | 197 | ||||||
Additional paid-in capital | 449,136 | 440,479 | ||||||
Retained earnings | 946,940 | 945,182 | ||||||
Accumulated other comprehensive loss | (3,323 | ) | (2,825 | ) | ||||
Total Shareholders’ Equity | 1,393,215 | 1,383,288 | ||||||
Total Liabilities and Shareholders’ Equity | $ | 2,119,663 | $ | 2,184,554 |
Three Months Ended | ||||||||
August 31, 2015 | August 31, 2016 | |||||||
(Unaudited) | ||||||||
(In Thousands, Except Share and Per Share Amounts) | ||||||||
REVENUES: | ||||||||
Admissions, net | $ | 24,038 | $ | 22,835 | ||||
Motorsports and other event related | 86,628 | 90,245 | ||||||
Food, beverage and merchandise | 10,521 | 10,845 | ||||||
Other | 4,303 | 5,061 | ||||||
125,490 | 128,986 | |||||||
EXPENSES: | ||||||||
Direct: | ||||||||
NASCAR event management fees | 31,824 | 31,330 | ||||||
Motorsports and other event related | 34,503 | 31,973 | ||||||
Food, beverage and merchandise | 9,266 | 8,553 | ||||||
General and administrative | 27,446 | 27,221 | ||||||
Depreciation and amortization | 24,224 | 25,996 | ||||||
Losses on asset retirements | 5,365 | 176 | ||||||
132,628 | 125,249 | |||||||
Operating (loss) income | (7,138 | ) | 3,737 | |||||
Interest income | 41 | 71 | ||||||
Interest expense | (2,668 | ) | (3,625 | ) | ||||
Equity in net income from equity investments | 3,486 | 3,346 | ||||||
Other | (32 | ) | — | |||||
(Loss) income before income taxes | (6,311 | ) | 3,529 | |||||
Income taxes | (2,355 | ) | 1,356 | |||||
Net (loss) income | $ | (3,956 | ) | $ | 2,173 | |||
(Loss) earnings per share: | ||||||||
Basic and diluted | $ | (0.08 | ) | $ | 0.05 | |||
Basic weighted average shares outstanding | 46,647,480 | 45,720,814 | ||||||
Diluted weighted average shares outstanding | 46,647,480 | 45,734,854 |
Nine Months Ended | ||||||||
August 31, 2015 | August 31, 2016 | |||||||
(Unaudited) | ||||||||
(In Thousands, Except Share and Per Share Amounts) | ||||||||
REVENUES: | ||||||||
Admissions, net | $ | 87,842 | $ | 85,163 | ||||
Motorsports and other event related | 289,143 | 309,970 | ||||||
Food, beverage and merchandise | 36,830 | 29,450 | ||||||
Other | 12,237 | 14,594 | ||||||
426,052 | 439,177 | |||||||
EXPENSES: | ||||||||
Direct: | ||||||||
NASCAR event management fees | 104,022 | 105,894 | ||||||
Motorsports and other event related | 92,091 | 92,920 | ||||||
Food, beverage and merchandise | 30,671 | 22,358 | ||||||
General and administrative | 80,982 | 81,289 | ||||||
Depreciation and amortization | 72,990 | 77,028 | ||||||
Losses on asset retirements | 11,626 | 1,106 | ||||||
392,382 | 380,595 | |||||||
Operating income | 33,670 | 58,582 | ||||||
Interest income | 85 | 157 | ||||||
Interest expense | (6,738 | ) | (10,398 | ) | ||||
Equity in net income from equity investments | 11,232 | 11,485 | ||||||
Other | 621 | 12,000 | ||||||
Income before income taxes | 38,870 | 71,826 | ||||||
Income taxes | 14,518 | 27,924 | ||||||
Net income | $ | 24,352 | $ | 43,902 | ||||
Dividends per share | $ | 0.26 | $ | 0.41 | ||||
Earnings per share: | ||||||||
Basic and diluted | $ | 0.52 | $ | 0.95 | ||||
Basic weighted average shares outstanding | 46,611,656 | 46,189,413 | ||||||
Diluted weighted average shares outstanding | 46,626,223 | 46,203,963 |
Three Months Ended | ||||||||
August 31, 2015 | August 31, 2016 | |||||||
(Unaudited) | ||||||||
(In Thousands) | ||||||||
Net (loss) income | $ | (3,956 | ) | $ | 2,173 | |||
Other comprehensive income: | ||||||||
Amortization of terminated interest rate swap, net of tax benefit of $106 and $104, respectively | 164 | 166 | ||||||
Comprehensive income | $ | (3,792 | ) | $ | 2,339 |
Nine Months Ended | ||||||||
August 31, 2015 | August 31, 2016 | |||||||
(Unaudited) | ||||||||
(In Thousands) | ||||||||
Net income | $ | 24,352 | $ | 43,902 | ||||
Other comprehensive income: | ||||||||
Amortization of terminated interest rate swap, net of tax benefit of $318 and $313, respectively | 493 | 498 | ||||||
Comprehensive income | $ | 24,845 | $ | 44,400 |
Class A Common Stock $.01 Par Value | Class B Common Stock $.01 Par Value | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders’ Equity | |||||||||||||||||||
(Unaudited) (In Thousands) | ||||||||||||||||||||||||
Balance at November 30, 2015 | $ | 263 | $ | 199 | $ | 449,136 | $ | 946,940 | $ | (3,323 | ) | $ | 1,393,215 | |||||||||||
Activity 12/1/15 — 8/31/16: | ||||||||||||||||||||||||
Net income | — | — | — | 43,902 | — | 43,902 | ||||||||||||||||||
Comprehensive income | — | — | — | — | 498 | 498 | ||||||||||||||||||
Cash dividend ($0.41 per share) | — | — | — | (18,859 | ) | — | (18,859 | ) | ||||||||||||||||
Exercise of stock options | — | — | 136 | — | — | 136 | ||||||||||||||||||
Reacquisition of previously issued common stock | (11 | ) | — | (11,158 | ) | (26,801 | ) | — | (37,970 | ) | ||||||||||||||
Conversion of Class B Common Stock to Class A Common Stock | 2 | (2 | ) | — | — | — | — | |||||||||||||||||
Other | 1 | — | (26 | ) | — | — | (25 | ) | ||||||||||||||||
Stock-based compensation | — | — | 2,391 | — | — | 2,391 | ||||||||||||||||||
Balance at August 31, 2016 | $ | 255 | $ | 197 | $ | 440,479 | $ | 945,182 | $ | (2,825 | ) | $ | 1,383,288 |
Nine Months Ended | ||||||||
August 31, 2015 | August 31, 2016 | |||||||
(Unaudited) | ||||||||
(In Thousands) | ||||||||
OPERATING ACTIVITIES | ||||||||
Net income | $ | 24,352 | $ | 43,902 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Gain on sale of Staten Island property | — | (13,631 | ) | |||||
Depreciation and amortization | 72,990 | 77,028 | ||||||
Stock-based compensation | 2,194 | 2,391 | ||||||
Amortization of financing costs | 1,333 | 1,328 | ||||||
Interest and other consideration received on Staten Island note receivable | 3,486 | 1,162 | ||||||
Deferred income taxes | (12,548 | ) | 60,005 | |||||
Income from equity investments | (11,232 | ) | (11,485 | ) | ||||
Distribution from equity investee | 12,094 | 12,347 | ||||||
Loss on retirements of long-lived assets, non-cash | 428 | 892 | ||||||
Other, net | (602 | ) | (225 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Receivables, net | (7,314 | ) | (734 | ) | ||||
Inventories, prepaid expenses and other assets | (7,024 | ) | (19,054 | ) | ||||
Accounts payable and other liabilities | 6 | 555 | ||||||
Deferred income | 48,538 | 45,086 | ||||||
Income taxes | (9,365 | ) | (945 | ) | ||||
Net cash provided by operating activities | 117,336 | 198,622 | ||||||
INVESTING ACTIVITIES | ||||||||
Capital expenditures | (105,737 | ) | (110,234 | ) | ||||
Distribution from equity investee | 12,656 | 6,653 | ||||||
Equity investments and advances to affiliate | — | (130 | ) | |||||
Proceeds from sale of Staten Island property | — | 66,728 | ||||||
Proceeds from sale of assets | — | 472 | ||||||
Other, net | 103 | (6 | ) | |||||
Net cash used in investing activities | (92,978 | ) | (36,517 | ) | ||||
FINANCING ACTIVITIES | ||||||||
Payment of long-term debt | (846 | ) | (631 | ) | ||||
Exercise of Class A common stock options | — | 136 | ||||||
Cash dividend paid | (12,127 | ) | (18,859 | ) | ||||
Reacquisition of previously issued common stock | (983 | ) | (37,970 | ) | ||||
Net cash used in financing activities | (13,956 | ) | (57,324 | ) | ||||
Net increase in cash and cash equivalents | 10,402 | 104,781 | ||||||
Cash and cash equivalents at beginning of period | 158,847 | 160,548 | ||||||
Cash and cash equivalents at end of period | $ | 169,249 | $ | 265,329 |
Three Months Ended | Nine Months Ended | ||||||||||||||
August 31, 2015 | August 31, 2016 | August 31, 2015 | August 31, 2016 | ||||||||||||
Numerator: | |||||||||||||||
Net (loss) income | $ | (3,956 | ) | $ | 2,173 | $ | 24,352 | $ | 43,902 | ||||||
Denominator: | |||||||||||||||
Weighted average shares outstanding | 46,647,480 | 45,720,814 | 46,611,656 | 46,189,413 | |||||||||||
Effect of dilutive securities | — | 14,040 | 14,567 | 14,550 | |||||||||||
Diluted weighted average shares outstanding | 46,647,480 | 45,734,854 | 46,626,223 | 46,203,963 | |||||||||||
Basic and diluted (loss) earnings per share | $ | (0.08 | ) | $ | 0.05 | $ | 0.52 | $ | 0.95 | ||||||
Anti-dilutive shares excluded in the computation of diluted earnings per share | 152,896 | 75,068 | 101,436 | 85,591 |
November 30, 2015 | ||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||
Amortized intangible assets: | ||||||||||||
Food, beverage and merchandise contracts | $ | 10 | $ | 10 | $ | — | ||||||
Other | 114 | 94 | 20 | |||||||||
Total amortized intangible assets | 124 | 104 | 20 | |||||||||
Non-amortized intangible assets: | ||||||||||||
NASCAR — sanction agreements | 177,813 | — | 177,813 | |||||||||
Other | 793 | — | 793 | |||||||||
Total non-amortized intangible assets | 178,606 | — | 178,606 | |||||||||
Total intangible assets | $ | 178,730 | $ | 104 | $ | 178,626 | ||||||
August 31, 2016 | ||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||
Amortized intangible assets: | ||||||||||||
Food, beverage and merchandise contracts | $ | 10 | $ | 10 | $ | — | ||||||
Other | 120 | 96 | 24 | |||||||||
Total amortized intangible assets | 130 | 106 | 24 | |||||||||
Non-amortized intangible assets: | ||||||||||||
NASCAR — sanction agreements | 177,813 | — | 177,813 | |||||||||
Other | 793 | — | 793 | |||||||||
Total non-amortized intangible assets | 178,606 | — | 178,606 | |||||||||
Total intangible assets | $ | 178,736 | $ | 106 | $ | 178,630 |
Amortization expense for the nine months ended August 31, 2016 | $ | 2 | |
Remaining estimated amortization expense for the year ending November 30: | |||
2016 | — | ||
2017 | 1 | ||
2018 | 1 | ||
2019 | 1 | ||
2020 and thereafter | 19 |
November 30, 2015 | August 31, 2016 | |||||||||||||||
Principal | Unamortized Discount and Debt Issuance Costs | Principal | Unamortized Discount and Debt Issuance Costs | |||||||||||||
4.63 percent Senior Notes | $ | 65,000 | $ | (261 | ) | $ | 65,000 | $ | (223 | ) | ||||||
3.95 percent Senior Notes | 100,000 | (370 | ) | 100,000 | (338 | ) | ||||||||||
6.25 percent Term Loan | 48,726 | — | 48,095 | — | ||||||||||||
TIF bond debt service funding commitment | 54,646 | (1,905 | ) | 54,692 | (1,725 | ) | ||||||||||
Revolving Credit Facility | — | — | — | — | ||||||||||||
268,372 | (2,536 | ) | 267,787 | (2,286 | ) | |||||||||||
Less: current portion | 3,408 | (334 | ) | 3,449 | (334 | ) | ||||||||||
$ | 264,964 | $ | (2,202 | ) | $ | 264,338 | $ | (1,952 | ) |
Three Months Ended | Nine Months Ended | ||||||||||||||
August 31, 2015 | August 31, 2016 | August 31, 2015 | August 31, 2016 | ||||||||||||
Interest expense | $ | 4,060 | $ | 4,015 | $ | 12,221 | $ | 12,052 | |||||||
Less: capitalized interest | 1,392 | 390 | 5,483 | 1,654 | |||||||||||
Net interest expense | $ | 2,668 | $ | 3,625 | $ | 6,738 | $ | 10,398 |
• | Level 1 — observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets |
• | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) |
• | Level 3 — significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments) |
November 30, 2015 | August 31, 2016 | |||||||
Terminated interest rate swap, net of tax benefit of $2,176 and $1,862, respectively | $ | 3,323 | $ | 2,825 |
Three Months Ended August 31, 2015 | ||||||||||||
Motorsports Event | All Other | Total | ||||||||||
Revenues | $ | 109,854 | $ | 16,024 | $ | 125,878 | ||||||
Depreciation and amortization | 23,009 | 1,215 | 24,224 | |||||||||
Operating income (loss) | (5,890 | ) | (1,248 | ) | (7,138 | ) | ||||||
Capital expenditures | 28,230 | 1,579 | 29,809 | |||||||||
Total assets | 1,674,431 | 460,766 | 2,135,197 | |||||||||
Equity investments | — | 107,721 | 107,721 | |||||||||
Three Months Ended August 31, 2016 | ||||||||||||
Motorsports Event | All Other | Total | ||||||||||
Revenues | $ | 118,531 | $ | 10,863 | $ | 129,394 | ||||||
Depreciation and amortization | 24,918 | 1,078 | 25,996 | |||||||||
Operating income (loss) | 2,939 | 798 | 3,737 | |||||||||
Capital expenditures | 18,844 | 9,612 | 28,456 | |||||||||
Total assets | 1,672,589 | 511,965 | 2,184,554 | |||||||||
Equity investments | — | 95,864 | 95,864 | |||||||||
Nine Months Ended August 31, 2015 | ||||||||||||
Motorsports Event | All Other | Total | ||||||||||
Revenues | $ | 395,434 | $ | 31,925 | $ | 427,359 | ||||||
Depreciation and amortization | 69,232 | 3,758 | 72,990 | |||||||||
Operating income (loss) | 37,573 | (3,903 | ) | 33,670 | ||||||||
Capital expenditures | 101,227 | 4,510 | 105,737 | |||||||||
Nine Months Ended August 31, 2016 | ||||||||||||
Motorsports Event | All Other | Total | ||||||||||
Revenues | $ | 415,707 | $ | 24,794 | $ | 440,501 | ||||||
Depreciation and amortization | 73,750 | 3,278 | 77,028 | |||||||||
Operating income (loss) | 57,748 | 834 | 58,582 | |||||||||
Capital expenditures | 89,678 | 20,556 | 110,234 |
PART I. | FINANCIAL INFORMATION |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• | sales of merchandise inventory to Fanatics and wholesale transactions by MA totaling approximately $10.4 million recognized in food, beverage and merchandise revenue and associated expenses totaling approximately $11.0 million recognized in food, beverage and merchandise expense; |
• | general and administrative expenses associated with the transition totaling approximately $1.3 million. |
Three Months Ended August 31, 2015 | ||||||||||||
(Loss) Income Before Taxes | Income Tax Effect | Net (Loss) Income | (Loss) Earnings Per Share | |||||||||
GAAP | $ | (6,311 | ) | $ | (2,355 | ) | $ | (3,956 | ) | $ | (0.08 | ) |
Adjustments: | ||||||||||||
DAYTONA Rising project | 420 | 165 | 255 | — | ||||||||
Accelerated depreciation | 974 | 381 | 593 | 0.01 | ||||||||
Losses on retirements of long-lived assets | 5,365 | 2,103 | 3,262 | 0.07 | ||||||||
Capitalized interest | (1,156 | ) | (453 | ) | (703 | ) | (0.01 | ) | ||||
Net gain on sale of certain assets | 32 | 13 | 19 | 0.00 | ||||||||
Non-GAAP | $ | (676 | ) | $ | (146 | ) | $ | (530 | ) | $ | (0.01 | ) |
Three Months Ended August 31, 2016 | ||||||||||||
Income Before Taxes | Income Tax Effect | Net Income | Earnings Per Share | |||||||||
GAAP | $ | 3,529 | $ | 1,356 | $ | 2,173 | $ | 0.05 | ||||
Adjustments: | ||||||||||||
Losses on retirements of long-lived assets | 176 | 68 | 108 | 0.00 | ||||||||
Legal settlement | (1,084 | ) | (418 | ) | (666 | ) | (0.02 | ) | ||||
Capitalized interest | (360 | ) | (139 | ) | (221 | ) | 0.00 | |||||
Non-GAAP | $ | 2,261 | $ | 867 | $ | 1,394 | $ | 0.03 | ||||
Nine Months Ended August 31, 2015 | ||||||||||||
Income Before Taxes | Income Tax Effect | Net Income | Earnings Per Share | |||||||||
GAAP | $ | 38,870 | $ | 14,518 | $ | 24,352 | $ | 0.52 | ||||
Adjustments: | ||||||||||||
DAYTONA Rising project | 1,097 | 430 | 667 | 0.01 | ||||||||
Accelerated depreciation | 6,945 | 2,723 | 4,222 | 0.09 | ||||||||
Losses on retirements of long-lived assets | 11,626 | 4,557 | 7,069 | 0.15 | ||||||||
Capitalized interest | (5,018 | ) | (1,967 | ) | (3,051 | ) | (0.06 | ) | ||||
Net gain on sale of certain assets | (621 | ) | (243 | ) | (378 | ) | (0.01 | ) | ||||
Non-GAAP | $ | 52,899 | $ | 20,018 | $ | 32,881 | $ | 0.70 | ||||
Nine Months Ended August 31, 2016 | ||||||||||||
Income Before Taxes | Income Tax Effect | Net Income | Earnings Per Share | |||||||||
GAAP | $ | 71,826 | $ | 27,924 | $ | 43,902 | $ | 0.95 | ||||
Adjustments: | ||||||||||||
DAYTONA Rising project | 787 | 304 | 483 | 0.01 | ||||||||
Losses on retirements of long-lived assets | 1,106 | 429 | 677 | 0.01 | ||||||||
Legal settlement | (1,084 | ) | (418 | ) | (666 | ) | (0.02 | ) | ||||
Capitalized interest | (987 | ) | (381 | ) | (606 | ) | (0.01 | ) | ||||
Gain on sale of Staten Island | (13,631 | ) | (5,262 | ) | (8,369 | ) | (0.18 | ) | ||||
Net gain on sale of certain assets | (277 | ) | (107 | ) | (170 | ) | 0.00 | |||||
Non-GAAP | $ | 57,740 | $ | 22,489 | $ | 35,251 | $ | 0.76 |
Nine Months Ended | |||||
August 31, 2015 | August 31, 2016 | ||||
(Unaudited) | |||||
REVENUES: | |||||
Admissions, net | 20.6 | % | 19.4 | % | |
Motorsports and other event related | 67.9 | 70.6 | |||
Food, beverage and merchandise | 8.6 | 6.7 | |||
Other | 2.9 | 3.3 | |||
Total revenues | 100.0 | 100.0 | |||
EXPENSES: | |||||
Direct: | |||||
NASCAR event management fees | 24.4 | 24.1 | |||
Motorsports and other event related | 21.6 | 21.2 | |||
Food, beverage and merchandise | 7.2 | 5.1 | |||
General and administrative | 19.0 | 18.5 | |||
Depreciation and amortization | 17.1 | 17.5 | |||
Losses on asset retirements | 2.7 | 0.3 | |||
Total expenses | 92.0 | 86.7 | |||
Operating income | 8.0 | 13.3 | |||
Interest income | 0.0 | 0.1 | |||
Interest expense | (1.6 | ) | (2.3 | ) | |
Equity in net income from equity investments | 2.6 | 2.6 | |||
Other | 0.1 | 2.7 | |||
Income before income taxes | 9.1 | 16.4 | |||
Income taxes | 3.4 | 6.4 | |||
Net income | 5.7 | % | 10.0 | % |
• | Year-over-year increases in operating revenues and expenses are significantly driven by the completion of the DAYTONA Rising project prior to the first quarter of fiscal 2016 events at Daytona International Speedway ("Daytona") (see "DAYTONA Rising: Reimagining an American Icon"); |
• | In the second quarter of fiscal 2016, we hosted an IndyCar event at Phoenix International Raceway ("Phoenix"). Comparatively, in the third quarter of fiscal 2015, we held an IndyCar event at Auto Club Speedway of Southern California ("Auto Club Speedway"); |
• | In the second quarter and third quarters of fiscal 2015 we held NASCAR Mexico series event at Phoenix and NASCAR Xfinity series event at Chicagoland Speedway ("Chicagoland"), respectively, for which there was no comparable events in fiscal 2016; |
• | In the second and third quarters of fiscal 2016 we hosted the Country 500 music festival at Daytona and HARD summer music festival at Auto Club Speedway, respectively. Comparatively, in the third quarter of fiscal 2015, we hosted the Phish Magnaball music festival at Watkins Glen International ("Watkins Glen"). For these aforementioned music festivals we earned a facility rental fee and revenue from the sale of concessions; |
• | For the three and nine months ended August 31, 2015, we had recognized non-recurring transactions of approximately $0.4 million and $6.5 million, respectively, of inventory sold to Fanatics and $0.3 million and $4.0 million, respectively, of wholesale transactions by MA, which drove a total of $1.0 million and $12.0 million, respectively, in |
• | During the three months ended February 29, 2016, we recognized approximately $0.8 million, or $0.01 per diluted share, in non-recurring, pre-opening costs that are included in general and administrative expense related to DAYTONA Rising. There were no similar costs incurred in the second and third quarters of fiscal 2016. During the three and nine months ended August 31, 2015, we recognized approximately $0.4 million, or less than $0.01 per diluted share, and $1.1 million, or $0.01 per diluted share, of similar costs; |
• | During the three and nine months ended August 31, 2015, we recognized approximately $1.0 million, or $0.01 per diluted share, and $6.9 million, or $0.09 per diluted share, respectively, of accelerated depreciation that was recorded due to shortening the service lives of certain assets associated with DAYTONA Rising and other projects. There were no similar costs during the three and nine months ended August 31, 2016; |
• | During the three and nine months ended August 31, 2016, we recognized approximately $0.2 million, or less than $0.01 per diluted share and $1.1 million, or $0.01 per diluted share, respectively, of losses primarily attributable to demolition and/or asset relocation costs in connection with capacity management initiatives and other facility capital improvements. During the three and nine months ended August 31, 2015, we recognized approximately $5.4 million, or $0.07 per diluted share, and $11.6 million, or $0.15 per diluted share, respectively, of similar losses associated in connection with DAYTONA Rising and capacity management initiatives; |
• | During the three months ended August 31, 2016, we capitalized approximately $0.4 million,or less than $0.01 per diluted share, of interest related to ONE DAYTONA. During the nine months ended August 31, 2016, we capitalized approximately $1.0 million, or $0.01 per diluted share, of interest, of which approximately $0.6 million, or approximately $0.01 per diluted share, related to DAYTONA Rising. During the three and nine months ended August 31, 2015, we capitalized approximately $1.2 million, or $0.01 per diluted share and $5.0 million, or $0.06 per diluted share, respectively, of interest related to DAYTONA Rising; |
• | In the second quarter of fiscal 2016, we completed an assignment of all rights, title and interest in the mortgage and underlying promissory note of our Staten Island property. As a result, we recorded a gain of approximately $13.6 million, or 0.18 per diluted share, comprised of deferred gain, interest, and other consideration paid. The deferred gain of $1.9 million is included in Other operating revenue in our consolidated statement of operations, and the interest, and additional consideration, received is included in Other in our consolidated statement of operations (see "Equity and Other Investments”). There was no comparable transaction in the prior year; and |
• | In the third quarter of fiscal 2016, we received a favorable settlement relating to certain ancillary operations of approximately $1.1 million or $0.02 per diluted share. There was no comparable activity in the prior year. |
• | The aforementioned events held in fiscal 2015 at Chicagoland and Auto Club Speedway, not held in fiscal 2016, partially offset by the Indy Car event held at Phoenix International Raceway (“Phoenix”) in the second quarter of fiscal 2016, that was not held in 2015; |
• | Decreased attendance and admissions at NASCAR events held at Kansas Speedway ("Kansas"), Phoenix, Auto Club Speedway of Southern California ("Auto Club Speedway"), Martinsville Speedway ("Martinsville") and Michigan International Speedway (“Michigan”); |
• | The NASCAR Sprint Cup event held at Richmond International Raceway ("Richmond") was moved from its traditional Saturday evening schedule to a Sunday afternoon time slot; |
• | The threat of inclement weather during the NASCAR events held at Talladega Superspeedway ("Talladega"); and, |
• | Partially offsetting the nine-month period decrease were increased attendance and admissions related to DAYTONA Rising for events held during Daytona Speedweeks, Bikeweek, the Coke Zero 400 and Rolex 24, as well as, NASCAR and IMSA weekends at Watkins Glen. |
November 30, 2015 | August 31, 2016 | |||||||
(Unaudited) | ||||||||
Cash and cash equivalents | $ | 160,548 | $ | 265,329 | ||||
Working capital | 146,915 | 200,573 | ||||||
Total debt | 265,836 | 265,501 |
August 31, 2015 | August 31, 2016 | |||||||
(Unaudited) | ||||||||
Net cash provided by operating activities (1) | $ | 117,336 | $ | 198,622 | ||||
Capital expenditures (2) | (105,737 | ) | (110,234 | ) | ||||
Distribution from equity investee (3) | 24,750 | 19,000 | ||||||
Proceeds from sale of Staten Island property (4) | — | 66,728 | ||||||
Dividends paid and reacquisition of previously issued common stock (5) | (13,110 | ) | (56,829 | ) |
• | Capital expenditures remaining under the existing $600.0 million capital expenditure plan adopted by our Board of Directors in June 2013, total approximately $130.0 million for fiscal 2016 and approximately $40.0 million for 2017, consisting of remaining payments to contractors for the completion of DAYTONA Rising in 2016 and certain planned capital projects at our remaining 12 motorsports facilities (see "Capital Expenditures"); |
• | From 2017 through 2021 we expect a total of $500.0 million in capital expenditures for existing facilities, which includes the $40.0 million for 2017 carried over from the 2013 $600.0 million plan. This allocation will fund a reinvestment at Phoenix, the first phase of redevelopment at Richmond, as well as all other maintenance and guest experience capital expenditures for the remaining existing facilities. In 2017 we will begin the redevelopment of Phoenix with completion targeted in late 2018. We expect to provide information on annual capital expenditure amounts for 2017 through 2021 as part of our fiscal 2017 guidance in late January 2017, however with the Phoenix construction planned for 2017 and 2018 we expect spending to be somewhat front-loaded. While many components of these expected projects will exceed weighted average cost of capital, considerable maintenance capital expenditures will likely result in a blended return of this invested capital in the mid to low single digits; |
• | In addition to the aforementioned $500 million in capital expenditures for existing facilities, we expect we will have an additional $95.0 million of capital expenditures in fiscal 2016 through 2017 related to phase one of ONE DAYTONA with approximately forty percent and sixty percent recorded in fiscal 2016 and 2017, respectively. We expect this investment to exceed our weighted average cost of capital (see "ONE DAYTONA"); |
• | Return of capital to shareholders is a significant pillar of our capital allocation. In fiscal 2016 we increased our dividend approximately 58.0 percent to $0.41 per share. We expect dividends to increase in 2017 and beyond by approximately four to five percent annually. For the nine months ended August 31, 2016, we repurchased 1,098,525 shares of ISCA on the open market at a weighted average share price of $34.04 for a total of approximately $37.4 million. For 2017 through 2021 we expect our return of capital program will be approximately $280 million, comprised of close to $100 million in total annual dividends and the balance being open market repurchase of ISCA shares over the five year period. At this time we expect this spending to be evenly allocated per year, although we will scale the repurchase program to buy opportunistically; and |
• | We will continue to explore development and/or acquisition opportunities beyond the initiatives discussed above that build shareholder value and exceed our weighted average cost of capital. Should additional development and/or acquisitions be pursued, we will provide discrete information on timing, scope, cost and expected returns of such opportunities. |
• | Federal tax legislation passed in December 2015 provides for extension of 7-year depreciation for tax purposes on certain motorsports facility assets placed in service during fiscal 2015 through 2016, and bonus depreciation on capital expenditures placed in service fiscal 2015 through 2019. While the tax legislation does not impact our overall tax liability, it does impact the timing of the annual payment of cash taxes. Cash taxes paid for federal and state taxes in fiscal 2015 was approximately $45.0 million. As a result of this legislation, which was passed subsequent to our fiscal 2015 year-end, but retroactive for all assets placed in service during 2015, we received a tax refund of approximately $47.0 million in fiscal 2016 related to overpayment of estimated taxes in prior years, primarily attributable to depreciation for assets placed in service related to DAYTONA Rising. Cash tax payments for fiscal 2016 are currently estimated to be between $30.0 million and $35.0 million. Cash tax payments for fiscal 2017 are currently estimated to be between $55.0 million to $60.0 million; and |
• | In March 2016, we completed an assignment of all rights, title and interest in the mortgage and underlying promissory note to an affiliate of Matrix Development Group, a New York/New Jersey area developer, and received the remaining |
• | operations of our major motorsports facilities for the foreseeable future; |
• | ONE DAYTONA (see "ONE DAYTONA"); |
• | the previously discussed capital allocation plans for our existing facilities; |
• | payments required in connection with the funding of the Unified Government's debt service requirements related to the TIF bonds; |
• | payments related to our other existing debt service commitments; |
• | contributions in connection with any future expansion of the Hollywood Casino at Kansas Speedway; and |
• | our annual dividend payment and share repurchases under our Stock Purchase Plan. |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
ITEM 4. | CONTROLS AND PROCEDURES |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Period | Total number of shares purchased | Average price paid per share | Total number of shares purchased as part of publicly announced plans or programs | Maximum number of shares (or approximate dollar value of shares) that may yet be purchased under the plans or programs (in thousands) | ||||||||||
June 1, 2016— June 30, 2016 | ||||||||||||||
Repurchase program (1) | 220,000 | $ | 33.31 | 220,000 | $ | 28,531 | ||||||||
July 1, 2016 — July 31, 2016 | ||||||||||||||
Repurchase program (1) | 108,913 | 34.78 | 108,913 | $ | 24,740 | |||||||||
August 1, 2016 — August 31, 2016 | ||||||||||||||
Repurchase program (1) | 11,941 | $ | 32.99 | 11,941 | $ | 24,346 | ||||||||
340,854 | 340,854 |
(1) | We have a share repurchase program (“Stock Purchase Plan”) under which we are authorized to purchase up to $330.0 million of our 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. |
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
Exhibit Number | Description of Exhibit | |
3.1 | 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 (incorporated by reference from exhibit 3.1 of the Company’s Report on Form 8-K dated July 26, 1999) | |
3.2 | Conformed copy of Amended and Restated Articles of Incorporation of the Company, as amended as of July 26, 1999 (incorporated by reference from exhibit 3.2 of the Company’s Report on Form 8-K dated July 26, 1999) | |
3.3 | Conformed copy of Amended and Restated By-Laws of the Company, as amended as of April 9, 2003. (incorporated by reference from exhibit 3.3 of the Company’s Report on Form 10-Q dated April 10, 2003) | |
31.1 | Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer — filed herewith | |
31.2 | Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer — filed herewith | |
32 | Section 1350 Certification — filed herewith | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |
101.LAB | XBRL Taxonomy Extension Label Linkbase | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
INTERNATIONAL SPEEDWAY CORPORATION (Registrant) | |||
Date: | October 6, 2016 | /s/ Daniel W. Houser | |
Daniel W. Houser, Executive Vice President, | |||
Chief Financial Officer, Treasurer |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | 10/4/2016 |
/s/ Lesa France Kennedy | |
Lesa France Kennedy | |
Chief Executive Officer |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | 10/4/2016 |
/s/ Daniel W. Houser | |
Daniel W. Houser | |
Executive Vice President, Chief Financial Officer and Treasurer |
/s/ Lesa France Kennedy | |
Lesa France Kennedy Chief Executive Officer | |
/s/ Daniel W. Houser | |
Daniel W. Houser Chief Financial Officer |
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Document and Entity Information |
9 Months Ended |
---|---|
Aug. 31, 2016
shares
| |
Document Information [Line Items] | |
Document Type | 10-Q |
Amendment Flag | false |
Document Period End Date | Aug. 31, 2016 |
Document Fiscal Year Focus | 2016 |
Document Fiscal Period Focus | Q3 |
Trading Symbol | ISCA |
Entity Registrant Name | INTERNATIONAL SPEEDWAY CORP |
Entity Central Index Key | 0000051548 |
Current Fiscal Year End Date | --11-30 |
Entity Filer Category | Large Accelerated Filer |
Class A Common Stock | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 25,869,138 |
Class B Common Stock | |
Document Information [Line Items] | |
Entity Common Stock, Shares Outstanding | 19,770,282 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Aug. 31, 2016 |
Nov. 30, 2015 |
---|---|---|
Allowance for receivables | $ 1,000 | $ 1,000 |
Property and Equipment, accumulated depreciation | $ 913,656 | $ 839,039 |
Class A Common Stock $.01 Par Value | ||
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized (in shares) | 80,000,000 | 80,000,000 |
Common Stock, shares issued (in shares) | 25,479,145 | 26,348,051 |
Common Stock, shares outstanding (in shares) | 25,479,145 | 26,348,051 |
Class B Common Stock $.01 Par Value | ||
Common Stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common Stock, shares issued (in shares) | 19,770,282 | 19,942,136 |
Common Stock, shares outstanding (in shares) | 19,770,282 | 19,942,136 |
Consolidated Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2016 |
Aug. 31, 2015 |
Aug. 31, 2016 |
Aug. 31, 2015 |
|
REVENUES: | ||||
Admissions, net | $ 22,835 | $ 24,038 | $ 85,163 | $ 87,842 |
Motorsports and other event related | 90,245 | 86,628 | 309,970 | 289,143 |
Food, beverage and merchandise | 10,845 | 10,521 | 29,450 | 36,830 |
Other | 5,061 | 4,303 | 14,594 | 12,237 |
Total revenues | 128,986 | 125,490 | 439,177 | 426,052 |
Direct: | ||||
NASCAR event management fees | 31,330 | 31,824 | 105,894 | 104,022 |
Motorsports and other event related | 31,973 | 34,503 | 92,920 | 92,091 |
Food, beverage and merchandise | 8,553 | 9,266 | 22,358 | 30,671 |
General and administrative | 27,221 | 27,446 | 81,289 | 80,982 |
Depreciation and amortization | 25,996 | 24,224 | 77,028 | 72,990 |
Losses on asset retirements | 176 | 5,365 | 1,106 | 11,626 |
Costs and Expenses, Total | 125,249 | 132,628 | 380,595 | 392,382 |
Operating income (loss) | 3,737 | (7,138) | 58,582 | 33,670 |
Interest income | 71 | 41 | 157 | 85 |
Interest expense | (3,625) | (2,668) | (10,398) | (6,738) |
Equity in net income from equity investments | 3,346 | 3,486 | 11,485 | 11,232 |
Other | 0 | (32) | 12,000 | 621 |
(Loss) income before income taxes | 3,529 | (6,311) | 71,826 | 38,870 |
Income taxes | 1,356 | (2,355) | 27,924 | 14,518 |
Net (loss) income | $ 2,173 | $ (3,956) | $ 43,902 | $ 24,352 |
Dividends per share (in dollars per share) | $ 0.41 | $ 0.26 | ||
(Loss) earnings per share: | ||||
Basic and diluted (in dollars per share) | $ 0.05 | $ (0.08) | $ 0.95 | $ 0.52 |
Basic weighted average shares outstanding (shares) | 45,720,814 | 46,647,480 | 46,189,413 | 46,611,656 |
Diluted weighted average shares outstanding (shares) | 45,734,854 | 46,647,480 | 46,203,963 | 46,626,223 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2016 |
Aug. 31, 2015 |
Aug. 31, 2016 |
Aug. 31, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 2,173 | $ (3,956) | $ 43,902 | $ 24,352 |
Other comprehensive income: | ||||
Amortization of terminated interest rate swap, net of tax benefit of $106, $104, $318 and $313, respectively | 166 | 164 | 498 | 493 |
Comprehensive income | $ 2,339 | $ (3,792) | $ 44,400 | $ 24,845 |
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2016 |
Aug. 31, 2015 |
Aug. 31, 2016 |
Aug. 31, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Amortization of interest rate swap, net of tax benefit | $ 104 | $ 106 | $ 313 | $ 318 |
Consolidated Statement of Shareholders' Equity - 9 months ended Aug. 31, 2016 - USD ($) $ in Thousands |
Total |
Common Stock
Class A Common Stock $.01 Par Value
|
Common Stock
Class B Common Stock $.01 Par Value
|
Additional Paid-in Capital |
Retained Earnings |
Accumulated Other Comprehensive Loss |
---|---|---|---|---|---|---|
Balance at Nov. 30, 2015 | $ 1,393,215 | $ 263 | $ 199 | $ 449,136 | $ 946,940 | $ (3,323) |
Activity 12/1/15 — 8/31/16: | ||||||
Net income | 43,902 | 43,902 | ||||
Comprehensive income | 498 | 498 | ||||
Common Stock Dividends Declared | (18,859) | (18,859) | ||||
Exercise of stock options | 136 | 136 | ||||
Reacquisition of previously issued common stock | (37,970) | (11) | (11,158) | (26,801) | ||
Conversion of Stock, Amount Converted | 2 | (2) | ||||
Other | (25) | 1 | (26) | |||
Stock-based compensation | 2,391 | 2,391 | ||||
Balance at Aug. 31, 2016 | $ 1,383,288 | $ 255 | $ 197 | $ 440,479 | $ 945,182 | $ (2,825) |
Consolidated Statement of Shareholders' Equity (Parenthetical) - $ / shares |
9 Months Ended | |
---|---|---|
Aug. 31, 2016 |
Aug. 31, 2015 |
|
Statement of Stockholders' Equity [Abstract] | ||
Dividend paid (in dollars per share) | $ 0.41 | $ 0.26 |
Basis of Presentation |
9 Months Ended |
---|---|
Aug. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated interim financial statements have been prepared in compliance with Rule 10-01 of Regulation S-X and accounting principles generally accepted in the United States for interim financial information but do not include all of the information and disclosures required for complete financial statements. The consolidated balance sheet at November 30, 2015, has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The statements should be read in conjunction with the consolidated financial statements and notes thereto included in the latest annual report on Form 10-K for International Speedway Corporation and its wholly-owned subsidiaries (the “Company” or “ISC”). In management’s opinion, the statements include all adjustments which are necessary for a fair presentation of the results for the interim periods. All such adjustments are of a normal recurring nature. Because of the seasonal concentration of racing events, the results of operations for the three and nine months ended August 31, 2015 and 2016, respectively, are not indicative of the results to be expected for the year. |
New Accounting Pronouncements |
9 Months Ended |
---|---|
Aug. 31, 2016 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB"), in conjunction with the International Accounting Standards Board ("IASB"), issued Accounting Standards Update ("ASU" or "Update") 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. On July 9, 2015, the FASB approved a one-year deferral of the effective date, while permitting entities to elect to adopt one year earlier on the original effective date. As a result, for a public entity, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. 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, results of operations, and cash flows, and will adopt the provisions of this statement in the first quarter of fiscal 2019. In April 2015, the FASB, in conjunction with the IASB, issued ASU No. 2015-03, "Interest - Imputation of Interest". The objective of this Update is to simplify the presentation of debt issuance costs. The amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. The Company has adopted the provisions of this statement in the first quarter of fiscal 2016 and prior periods have been retrospectively adjusted (see "Note 6. Long-Term Debt"). In August 2015, the FASB issued ASU No. 2015-15, "Interest - Imputation of Interest (Sub-Topic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements". Given the absence of authoritative guidance within Update 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company has adopted the provisions of this statement in the first quarter of fiscal 2016 and prior periods have been retrospectively adjusted. In November 2015, the FASB issued ASU No. 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes". The objective of this Update is to simplify the presentation of deferred income taxes. The amendments in this Update require that deferred assets and liabilities be classified as long-term on the balance sheet instead of separating the deferred taxes into current and non-current amounts. The Company believes that this treatment of deferred taxes reduces the complexity of financial reporting while improving the usefulness of the information provided to users of the financial statements. As a result the Company elected to early adopt this Update prospectively as of November 30, 2015. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842): "Leases". The objective of this Update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. To meet that objective, the FASB is amending the FASB Accounting Standards Codification and creating Topic 842, Leases. This Update, along with IFRS 16, Leases, are the results of the FASB’s and the International Accounting Standards Board’s (IASB’s) efforts to meet that objective and improve financial reporting. For a public entity, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application of the amendments in this Update is permitted for all entities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the impact of adopting this new guidance on its financial position, results of operations, and cash flows, and will adopt the provisions of this statement in the first quarter of fiscal 2020. |
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Earnings Per Share | Earnings Per Share Basic earnings per share is calculated using the Company's weighted-average outstanding common shares. Diluted earnings per share is calculated using the Company's weighted-average outstanding common shares including the dilutive effect of stock awards as determined under the treasury stock method. In periods when the Company recognizes a net loss, it excludes the impact of outstanding stock awards from the diluted loss per share calculation as their inclusion would have an anti-dilutive effect. The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended August 31, 2015 and 2016 (in thousands, except share and per share amounts):
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Equity and Other Investments |
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Equity [Abstract] | |
Equity and Other Investments | 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, as the managing member of Kansas Entertainment, is responsible for the operations of the casino. The Company has accounted for Kansas Entertainment as an equity investment in the consolidated financial statements as of August 31, 2015 and 2016. The Company's 50.0 percent portion of Kansas Entertainment’s net income, which is before income taxes as the joint venture is a disregarded entity for income tax purposes, was approximately $3.5 million and $3.3 million for the three months ended August 31, 2015 and 2016, respectively, and approximately $11.2 million and $11.5 million for the nine months ended August 31, 2015 and 2016, respectively, and is included in Equity in net income from equity investments in the consolidated statements of operations. Pre-tax distributions from Kansas Entertainment for the nine months ended August 31, 2016, totaling approximately $19.0 million, consist of approximately $12.3 million received as a distribution from its profits, were included in net cash provided by operating activities on the Company's consolidated statement of cash flows, with the remaining approximately $6.7 million received, recognized as a return of capital from investing activities on the Company's consolidated statement of cash flows. Pre-tax distributions from Kansas Entertainment for the nine months ended August 31, 2015, totaling $24.8 million, consisted of approximately $12.1 million received as a distribution from its profits, were included in net cash provided by operating activities on the Company's consolidated statement of cash flows, with the remaining approximate $12.7 million received, recognized as a return of capital from investing activities on the Company's consolidated statement of cash flows. Fairfield Inn Hotel at ONE DAYTONA Since June 2013, ISC has pursued development of ONE DAYTONA, the proposed premier mixed use and entertainment destination across from its Daytona International Speedway. Daytona Hotel Two, LLC ("Fairfield"), a joint venture of Daytona Hospitality Group II, LLC ("DHGII"), a subsidiary of Prime-Shaner Groups, and Daytona Beach Property Holdings Retail, LLC ("DBR"), a wholly owned indirect subsidiary of ISC, was formed to own, construct and operate a Fairfield Inn hotel. The hotel will be situated within the ONE DAYTONA development. As per the partnership agreement, the Company's 33.25 percent share of equity will be limited to its non-cash land contribution and it will share in the profits from the joint venture proportionately to its equity ownership. In June 2016, DBR contributed land to the joint venture as per the agreement. Vertical construction of the hotel has commenced and is expected to open in third quarter of fiscal 2017. DHGII is the managing member of the Fairfield and will be responsible for the development and operations of the hotel. There were no operations as of August 31, 2016. 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 by the Company through a secured mortgage interest in 380 Development as well as the underlying property. The mortgage balance bore interest at an annual rate of 7.0 percent. In accordance with the terms of the agreement, the Company received a principal payment of approximately $6.1 million plus interest on the mortgage balance through February 29, 2016. The remaining purchase price of $66.4 million was due in March 2016. 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 $11.4 million at May 31, 2016, until the carrying amount of the property was recovered, upon final payment. In March 2016, the Company completed an assignment of all rights, title and interest in the mortgage and underlying promissory note to an affiliate of Matrix Development Group, a New York/New Jersey area developer, and received the remaining principal balance of $66.4 million, plus additional consideration of approximately $0.3 million. The Company has no further commitments or contingencies related to the property or its sale. As a result, in the second quarter of fiscal 2016, the Company recorded a gain of approximately $13.6 million, comprised of the aforementioned deferred gain, interest, and other consideration paid. The deferred gain of $1.9 million is included in Other operating revenue in the Company's consolidated statement of operations, and the interest, and additional consideration received, is included in Other in the Company's consolidated statement of operations. The net proceeds from the sale, combined with the mortgage interest and related cash tax benefits, provided the Company with approximately $129.8 million in incremental cash flow through the term of the mortgage. |
Goodwill and Intangible Assets |
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Goodwill and Intangible Assets | Goodwill and Intangible Assets The gross carrying value, accumulated amortization and net carrying value of the major classes of intangible assets relating to the Motorsports Event segment are as follows (in thousands):
The following table presents current and expected amortization expense of the existing intangible assets as of August 31, 2016 for each of the following periods (in thousands):
There were no changes in the carrying value of goodwill during the three and nine months ended August 31, 2016. |
Long-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-Term Debt Long-term debt consists of the following (in thousands):
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. The 4.63 percent Senior Notes 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 August 31, 2016, the Company was in compliance with its various restrictive covenants. At August 31, 2016, 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 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 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 August 31, 2016, the Company was in compliance with its various restrictive covenants. At August 31, 2016, outstanding principal on the 3.95 percent Senior Notes was approximately $100.0 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 $323,000. At August 31, 2016, the outstanding principal on the 6.25 percent Term Loan was approximately $48.1 million. At August 31, 2016, outstanding taxable special obligation revenue (“TIF”) bonds, in connection with the financing of Kansas Speedway, totaled approximately $54.7 million, net of the unamortized discount, which is comprised of a $5.4 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 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. On September 27, 2016, the Company amended and extended its existing $300.0 million credit facility, maturing November 2017, and entered into a new $300.0 million revolving credit facility (“2016 Credit Facility”). The 2016 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 2016 Credit Facility is scheduled to mature five years from the date of inception, with two 1-year extension options. 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 2016 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 2016 Credit Facility. The 2016 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 2016 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 August 31, 2016, the Company was in compliance with its various restrictive covenants. At August 31, 2016, the Company had no outstanding borrowings under its credit facility. Financing costs related to the credit facility, net of accumulated amortization, of approximately $0.3 million, have been deferred and are included in other assets as of August 31, 2016. Financing costs are being amortized on a straight-line method, which approximates the effective yield method, over the life of the related financing. Total interest expense incurred by the Company for the three and nine months ended August 31, 2015 and August 31, 2016, is as follows (in thousands):
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Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||
Financial Instruments | Financial Instruments Various inputs are considered when determining the carrying values of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities, which 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:
At August 31, 2016, the Company had money market funds totaling approximately $68.4 million which are included in cash and cash equivalents in its consolidated balance sheet. 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. The fair value of the remaining long-term debt, as determined by quotes from financial institutions, was approximately $284.8 million compared to the carrying amount of approximately $268.4 million and approximately $296.5 million compared to the carrying amount of approximately $267.8 million at November 30, 2015 and August 31, 2016, respectively. The Company had no financial instruments that used level 3 inputs as of August 31, 2016. |
Capital Stock |
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Aug. 31, 2016 | |
Equity [Abstract] | |
Capital Stock | Capital 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 Plan through August 31, 2016, the Company has purchased 8,162,487 shares of its Class A common shares, for a total of approximately $305.7 million. We purchased 1,098,525 shares of our Class A common shares during the nine month period ended August 31, 2016, at an average cost of approximately $34.04 per share (including commissions), for a total of approximately $37.4 million. These transactions occurred in open market purchases and pursuant to a trading plan under Rule 10b5-1. At August 31, 2016, the Company had approximately $24.3 million remaining repurchase authority under the current Stock Purchase Plan. In April 2016, the Company's Board of Directors approved an annual dividend of $0.41 per share, for a total of approximately $18.9 million, paid on June 30, 2016, to common stockholders of record on May 31, 2016. |
Long-Term Stock Incentive Plan |
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Aug. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Long-Term Incentive Plan | Long-Term Stock Incentive Plan In May 2016, the Company awarded and issued a total of 92,583 restricted shares of the Company’s Class A common shares to certain officers and managers under the Company’s Long-Term Stock Incentive Plan (the “2006 Plan”). The shares of restricted stock awarded in May 2016, 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 share awards was $33.49 per share. In accordance with ASC 718, “Compensation — Stock Compensation” the Company is recognizing this stock-based compensation on these restricted shares awarded on the accelerated method over the requisite service period. In July 2016, the Company awarded and issued a total of 8,073 restricted shares of the Company’s Class A common shares to certain non-employee directors, under the 2006 Plan. The shares of restricted stock awarded in July 2016, vest at the rate of 100.0 percent on the one year anniversary of the award date. The weighted average grant date fair value of these restricted share awards was $33.45 per share. In accordance with ASC 718, “Compensation — Stock Compensation” the Company is recognizing this stock-based compensation on these restricted shares awarded on the straight-line method over the requisite service period. |
Comprehensive Income |
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Comprehensive Income | Comprehensive Income Comprehensive income is the change in equity of an enterprise except those resulting from shareholder transactions. Accumulated other comprehensive loss consists of the following (in thousands):
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Income Taxes |
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Aug. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Changes in certain state tax rates are the principal causes of the increased effective income tax rate for the three and nine months ended August 31, 2016 as compared to three and nine months ended August 31, 2015. The Company's effective income tax rate was approximately 37.3 percent and 37.4 percent for the three and nine months ended August 31, 2015, respectively, and approximately 38.4 percent and 38.9 percent for the three and nine months ended August 31, 2016, respectively. |
Related Party Disclosures and Transactions |
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Aug. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Disclosures and Transactions | 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 National Association for Stock Car Auto Racing (“NASCAR”), 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”) - a wholly owned subsidiary of NASCAR, Historic Sportscar Racing, IndyCar Series, 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 and IMSA, which sanction many of the Company’s principal racing events, are members of the France Family Group, which controls approximately 72.5 percent of the combined voting power of the outstanding stock of the Company, as of November 30, 2015, and some members of which serve as directors and officers of the Company. 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, included in NASCAR event management fees (discussed below). 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, and recorded as part of motorsports related revenue, were approximately $56.3 million and $56.8 million for three months ended August 31, 2015 and August 31, 2016, respectively, and approximately $198.6 million and $205.1 million for the nine months ended August 31, 2015 and August 31, 2016, respectively. The Company recorded prize money of approximately $15.6 million and $15.7 million for the three months ended August 31, 2015 and August 31, 2016, and approximately $55.1 million and $56.5 million for the nine months ended August 31, 2015 and August 31, 2016, included in NASCAR event management fees (discussed below) related to the aforementioned 25.0 percent of gross broadcast rights fees ultimately paid to competitors. Standard NASCAR and IMSA sanction agreements require racetrack operators to pay event management fees (collectively "NASCAR event management or NEM fees"), which include 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. Total NEM fees paid by the Company were approximately $31.8 million and $31.3 million for the three months ended August 31, 2015 and August 31, 2016, respectively, and approximately $104.0 million and $105.9 million for the nine months ended August 31, 2015 and August 31, 2016, respectively. |
Commitments and Contingencies |
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Aug. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies 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 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. Kansas Speedway Corporation ("KSC"), wholly-owned subsidiary of the Company, has agreed to guarantee the payment of principal and any required premium and interest on the 2002 STAR Bonds. At August 31, 2016, the Unified Government had approximately $0.9 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. 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 $6.0 million at August 31, 2016. At August 31, 2016, 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. |
Segment Reporting |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | 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, concessions and catering operations for non-motorsports events, construction management services, building and facility 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. The following tables provide segment reporting of the Company for the three and nine months ended August 31, 2015 and August 31, 2016 (in thousands):
Intersegment revenues were approximately $0.4 million and $0.4 million for the three months ended August 31, 2015 and August 31, 2016, respectively and approximately $1.3 million and $1.3 million for the nine months ended August 31, 2015 and August 31, 2016, respectively. During the three and nine months ended August 31, 2015, the Company recognized non-recurring transactions of approximately $0.7 million and $10.5 million, respectively, of inventory sold to Fanatics and wholesale transactions by Motorsports Authentics ("MA"), which drove a total of $1.0 million and $12.0 million, respectively, in expense including product costs associated with these transactions, costs related to the transition of trackside merchandise operations to Fanatics, as well as partial period operating expenses incurred prior to the transition of Americrown and MA merchandise operations, for which there was no related revenue. During the nine months ended August 31, 2016, the Company recognized approximately $0.8 million in marketing and consulting costs that are included in general and administrative expense related to DAYTONA Rising. There were no similar costs incurred in the three months ended August 31, 2016. These costs were included in the Motorsports Event segment. During the three and nine months ended August 31, 2015, the Company recognized approximately $0.4 million and $1.1 million, respectively, of similar costs. During the three and nine months ended August 31, 2016, the Company did not recognize any accelerated depreciation, due to the shortening the service lives of certain assets, associated with DAYTONA Rising and other projects. During the three and nine months ended August 31, 2015, the Company recognized approximately $1.0 million and $6.9 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. During the three and nine months ended August 31, 2016, the Company recognized approximately $0.2 million and $1.1 million, respectively, of losses primarily attributable to removal of certain assets not not fully depreciated, and demolition costs, in connection with capacity management initiatives and other capital improvements. During the three and nine months ended August 31, 2015, the Company recognized approximately $5.4 million and $11.6 million, respectively of losses associated with asset retirements primarily attributable to the removal of assets not fully depreciated in connection with capacity management initiatives, DAYTONA Rising and other capital improvements. |
New Accounting Pronouncements (Policies) |
9 Months Ended |
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Aug. 31, 2016 | |
Accounting Policies [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB"), in conjunction with the International Accounting Standards Board ("IASB"), issued Accounting Standards Update ("ASU" or "Update") 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. On July 9, 2015, the FASB approved a one-year deferral of the effective date, while permitting entities to elect to adopt one year earlier on the original effective date. As a result, for a public entity, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. 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, results of operations, and cash flows, and will adopt the provisions of this statement in the first quarter of fiscal 2019. In April 2015, the FASB, in conjunction with the IASB, issued ASU No. 2015-03, "Interest - Imputation of Interest". The objective of this Update is to simplify the presentation of debt issuance costs. The amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. The Company has adopted the provisions of this statement in the first quarter of fiscal 2016 and prior periods have been retrospectively adjusted (see "Note 6. Long-Term Debt"). In August 2015, the FASB issued ASU No. 2015-15, "Interest - Imputation of Interest (Sub-Topic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements". Given the absence of authoritative guidance within Update 2015-03 for debt issuance costs related to line-of-credit arrangements, the SEC staff would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The Company has adopted the provisions of this statement in the first quarter of fiscal 2016 and prior periods have been retrospectively adjusted. In November 2015, the FASB issued ASU No. 2015-17, "Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes". The objective of this Update is to simplify the presentation of deferred income taxes. The amendments in this Update require that deferred assets and liabilities be classified as long-term on the balance sheet instead of separating the deferred taxes into current and non-current amounts. The Company believes that this treatment of deferred taxes reduces the complexity of financial reporting while improving the usefulness of the information provided to users of the financial statements. As a result the Company elected to early adopt this Update prospectively as of November 30, 2015. In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842): "Leases". The objective of this Update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. To meet that objective, the FASB is amending the FASB Accounting Standards Codification and creating Topic 842, Leases. This Update, along with IFRS 16, Leases, are the results of the FASB’s and the International Accounting Standards Board’s (IASB’s) efforts to meet that objective and improve financial reporting. For a public entity, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application of the amendments in this Update is permitted for all entities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The Company is currently evaluating the impact of adopting this new guidance on its financial position, results of operations, and cash flows, and will adopt the provisions of this statement in the first quarter of fiscal 2020. |
Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended August 31, 2015 and 2016 (in thousands, except share and per share amounts):
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Goodwill and Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Intangible Assets | The gross carrying value, accumulated amortization and net carrying value of the major classes of intangible assets relating to the Motorsports Event segment are as follows (in thousands):
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Current and Expected Amortization Expense of Intangible Assets | The following table presents current and expected amortization expense of the existing intangible assets as of August 31, 2016 for each of the following periods (in thousands):
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Long-Term Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | Long-term debt consists of the following (in thousands):
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Schedule of Interest Expense | Total interest expense incurred by the Company for the three and nine months ended August 31, 2015 and August 31, 2016, is as follows (in thousands):
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Comprehensive Income (Tables) |
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Statement of Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Comprehensive Income | Comprehensive income is the change in equity of an enterprise except those resulting from shareholder transactions. Accumulated other comprehensive loss consists of the following (in thousands):
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Segment Reporting (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | The following tables provide segment reporting of the Company for the three and nine months ended August 31, 2015 and August 31, 2016 (in thousands):
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Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2016 |
Aug. 31, 2015 |
Aug. 31, 2016 |
Aug. 31, 2015 |
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Numerator: | ||||
Net (loss) income | $ 2,173 | $ (3,956) | $ 43,902 | $ 24,352 |
Denominator: | ||||
Weighted average shares outstanding (shares) | 45,720,814 | 46,647,480 | 46,189,413 | 46,611,656 |
Effect of dilutive securities (shares) | 14,040 | 0 | 14,550 | 14,567 |
Diluted weighted average shares outstanding (shares) | 45,734,854 | 46,647,480 | 46,203,963 | 46,626,223 |
Basic and diluted (loss) earnings per share | ||||
Basic and diluted (loss) earnings per share (in dollars per share) | $ 0.05 | $ (0.08) | $ 0.95 | $ 0.52 |
Anti-dilutive shares excluded in the computation of diluted earnings per share (shares) | 75,068 | 152,896 | 85,591 | 101,436 |
Current and Expected Amortization Expense of Intangible Assets (Detail) $ in Thousands |
9 Months Ended |
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Aug. 31, 2016
USD ($)
| |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Amortization expense for the nine months ended August 31, 2016 | $ 2 |
Remaining estimated amortization expense for the year ending November 30: | |
2016 | 0 |
2017 | 1 |
2018 | 1 |
2019 | 1 |
2020 and thereafter | $ 19 |
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) |
3 Months Ended | 9 Months Ended |
---|---|---|
Aug. 31, 2016 |
Aug. 31, 2016 |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||
Changes in carrying value of goodwill | $ 0 | $ 0 |
Long-Term Debt - Non-printing (Detail) |
Aug. 31, 2016 |
Nov. 30, 2015 |
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4.63 percent Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt, interest rate | 4.63% | 4.63% |
3.95 percent Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt, interest rate | 3.95% | 3.95% |
6.25 percent Term Loan | ||
Debt Instrument [Line Items] | ||
Debt, interest rate | 6.25% | 6.25% |
Long-Term Debt Schedule of Interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2016 |
Aug. 31, 2015 |
Aug. 31, 2016 |
Aug. 31, 2015 |
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Debt Disclosure [Abstract] | ||||
Interest expense | $ 4,015 | $ 4,060 | $ 12,052 | $ 12,221 |
Less: capitalized interest | 390 | 1,392 | 1,654 | 5,483 |
Net interest expense | $ 3,625 | $ 2,668 | $ 10,398 | $ 6,738 |
Financial Instruments - Additional Information (Detail) - USD ($) $ in Millions |
Aug. 31, 2016 |
Nov. 30, 2015 |
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Fair Value, Inputs, Level 1 | ||
Fair Value, Measurement Inputs, Disclosure [Line Items] | ||
Money market funds | $ 68.4 | |
Fair Value, Inputs, Level 2 | ||
Fair Value, Measurement Inputs, Disclosure [Line Items] | ||
Long-term debt excluding credit facilities, fair value | 296.5 | $ 284.8 |
Long-term debt excluding credit facilities, carrying amount | $ 267.8 | $ 268.4 |
Capital Stock (Details) - USD ($) |
1 Months Ended | 9 Months Ended | 117 Months Ended | |
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Jun. 30, 2016 |
Apr. 30, 2016 |
Aug. 31, 2016 |
Aug. 31, 2016 |
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Equity, Class of Treasury Stock [Line Items] | ||||
Stock repurchased during the period | $ 37,970,000 | |||
Annual dividend approved (in dollars per share) | $ 0.41 | |||
Dividends paid | $ 18,900,000 | |||
Class A Common Stock | Stock Purchase Plan [Member] | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Authorized amount under Stock Purchase Plan | $ 330,000,000 | $ 330,000,000 | ||
Stock repurchased during the period (shares) | 1,098,525 | 8,162,487 | ||
Stock repurchased during the period | $ 37,400,000 | $ 305,700,000 | ||
Weighted average price of stock repurchased (in US$ per share) | $ 34.04 | |||
Remaining repurchase authority under the Stock Purchase Plan | $ 24,300,000 | $ 24,300,000 |
Comprehensive Income (Details) - USD ($) $ in Thousands |
Aug. 31, 2016 |
Nov. 30, 2015 |
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Statement of Comprehensive Income [Abstract] | ||
Terminated interest rate swap, net of tax benefit of $2,176 and $1,862, respectively | $ 2,825 | $ 3,323 |
Accumulated other comprehensive income (loss), terminated interest rate swap, tax | $ 1,862 | $ 2,176 |
Income Taxes - Additional Information (Detail) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2016 |
Aug. 31, 2015 |
Aug. 31, 2016 |
Aug. 31, 2015 |
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Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 38.40% | 37.30% | 38.90% | 37.40% |
Commitments and Contingencies - Additional Information (Detail) - USD ($) |
1 Months Ended | |
---|---|---|
Oct. 31, 2002 |
Aug. 31, 2016 |
|
2002 STAR Bonds | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Proceeds from long-term debt | $ 6,300,000 | |
Frequency of periodic payment | annual | |
Debt, maturity date | Dec. 01, 2022 | |
Long-term debt | $ 900,000 | |
Standby Letter of Credit | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Standby letter of credit agreements in favor of third parties | 6,000,000 | |
Amounts drawn on standby letter of credit | $ 0 |
Segment Reporting (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Aug. 31, 2016 |
Aug. 31, 2015 |
Aug. 31, 2016 |
Aug. 31, 2015 |
|
Segment Reporting Information [Line Items] | ||||
Revenues | $ 129,394 | $ 125,878 | $ 440,501 | $ 427,359 |
Depreciation and amortization | 25,996 | 24,224 | 77,028 | 72,990 |
Operating income (loss) | 3,737 | (7,138) | 58,582 | 33,670 |
Capital expenditures | 28,456 | 29,809 | 110,234 | 105,737 |
Total Assets | 2,184,554 | 2,135,197 | 2,184,554 | 2,135,197 |
Equity Investments | 95,864 | 107,721 | 95,864 | 107,721 |
Motorsports Event | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 118,531 | 109,854 | 415,707 | 395,434 |
Depreciation and amortization | 24,918 | 23,009 | 73,750 | 69,232 |
Operating income (loss) | 2,939 | (5,890) | 57,748 | 37,573 |
Capital expenditures | 18,844 | 28,230 | 89,678 | 101,227 |
Total Assets | 1,672,589 | 1,674,431 | 1,672,589 | 1,674,431 |
All Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 10,863 | 16,024 | 24,794 | 31,925 |
Depreciation and amortization | 1,078 | 1,215 | 3,278 | 3,758 |
Operating income (loss) | 798 | (1,248) | 834 | (3,903) |
Capital expenditures | 9,612 | 1,579 | 20,556 | 4,510 |
Total Assets | 511,965 | 460,766 | 511,965 | 460,766 |
Equity Investments | $ 95,864 | $ 107,721 | $ 95,864 | $ 107,721 |
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