INTERNATIONAL SPEEDWAY CORP, 10-Q, 1999-07-15

INTERNATIONAL SPEEDWAY CORP
10-Q, 1999-07-15
RACING, INCLUDING TRACK OPERATION

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934

For the quarterly period ended May 31, 1999.

Commission file Number 0-2384

International Speedway Corporation
(Exact name of registrant as specified in its charter.)

Florida, U.S.A. 59-0709342
(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

1801 West International Speedway Boulevard, Daytona Beach, Florida 32114-1243
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (904) 254-2700

Indicate by check mark whether the registrant(1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES [X] NO [ ]

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date:

Class A Common Stock, - 12,683,881 shares as of June 30, 1999.
Class B Common Stock, - 30,410,971 shares as of June 30, 1999.

PART I. - FINANCIAL INFORMATION
Item 1. - Financial Statements

INTERNATIONAL SPEEDWAY CORPORATION
Condensed Consolidated Balance Sheets

<TABLE>
<CAPTION>
November 30, May 31,
1998 1999
(Unaudited)
-------------- -------------
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents ................................... $ 38,676 $ 32,448
Short-term investments ...................................... 54,127 64,177
Receivables, less allowances of $100 and $500, respectively . 9,445 11,181
Inventories ................................................. 953 1,534
Prepaid expenses and other current assets ................... 5,243 5,079
------------ ------------
Total Current Assets ......................................... 108,444 114,419

Property and Equipment - at cost - less accumulated
depreciation of $65,529 and $72,504, respectively ........... 225,831 257,892

Other Assets:
Equity investments (Note 2) ................................. 44,087 54,948
Goodwill, less accumulated amortization of $1,386 and
$1,890, respectively ......................................... 38,927 38,423
Restricted investments (Note 4).............................. 53,500 105,567
Other ....................................................... 6,029 11,127
------------ ------------
142,543 210,065
------------ ------------
Total Assets ................................................. $476,818 $582,376
============ ============

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable ............................................ $ 10,367 $ 5,009
Income taxes payable ........................................ 5,088 2,817
Deferred income ............................................. 62,253 68,092
Current portion of long-term debt ........................... 598 685
Other current liabilities ................................... 2,648 5,202
------------ ------------
Total Current Liabilities .................................... 80,954 81,805

Long-term debt (Note 4) ...................................... 2,775 71,745
Deferred income taxes ........................................ 26,234 31,299
Commitments and contingencies
Shareholders' Equity (Note 1)
Class A Common Stock, $.01 par value, 80,000,000 shares
authorized; 11,529,590 and 12,672,894 issued at November 30
and May 31, respectively.................................... 115 127
Class B Common Stock, $.01 par value, 40,000,000 shares
authorized; 31,573,043 and 30,421,958 issued at November 30
and May 31, respectively.................................... 316 304
Additional paid-in capital .................................. 205,089 206,886
Retained earnings ........................................... 163,201 192,602
------------ ------------
368,721 399,919
Less unearned compensation-restricted stock ................. 1,866 2,392
------------ ------------
Total Shareholders' Equity ................................... 366,855 397,527
------------ ------------
Total Liabilities and Shareholders' Equity ................... $476,818 $582,376
============ ============
</TABLE>
See accompanying notes.
<PAGE>
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
Condensed Consolidated Statements of Income
<TABLE>
<CAPTION>
Three Months ended
May 31, May 31,
1998 1999
(Unaudited) (Unaudited)
_________________________
(In Thousands, Except
Per Share Data)
<S> <C> <C>
REVENUES:
Admissions, net.................................... $17,359 $20,665
Motorsports related income......................... 13,752 16,005
Food, beverage and souvenir income................. 6,646 7,479
Other income....................................... 434 486
___________ __________
38,191 44,635
EXPENSES:
Direct expenses:
Prize and point fund monies
and NASCAR sanction fees....................... 6,192 6,645
Motorsports related expenses..................... 8,516 10,420
Food, beverage and souvenir expenses............. 3,639 4,126
General and administrative expenses................ 8,817 9,952
Depreciation and amortization ..................... 3,243 3,905
___________ __________
30,407 35,048
___________ __________
Operating income..................................... 7,784 9,587
Interest income ..................................... 628 2,627
Interest expense .................................... (128) (628)
Equity in net income (loss) from equity investments.. 179 (491)
Gain on sale of equity investment ................... 1,245
___________ __________
Income before income taxes........................... 9,708 11,095
Income taxes......................................... 3,662 4,251
___________ __________

Net Income........................................... $ 6,046 $ 6,844
=========== ===========
Basic earnings per share ............................ $ 0.16 $ 0.16
=========== ===========
Diluted earnings per share .......................... $ 0.16 $ 0.16
=========== ===========
Dividends per share.................................. $ 0.06 $ 0.06
=========== ===========
Basic weighted average shares outstanding ...........38,212,217 42,883,332
=========== ===========
Diluted weighted average shares outstanding .........38,369,699 43,000,904
=========== ===========
</TABLE>
See accompanying notes.
<PAGE>
INTERNATIONAL SPEEDWAY CORPORATION
Condensed Consolidated Statements of Income
<TABLE>
<CAPTION>
Six months ended
May 31, May 31,
1998 1999
(Unaudited) (Unaudited)
_________________________
(In Thousands, Except
Per Share Data)
<S> <C> <C>
REVENUES:
Admissions, net................................. $ 49,248 $ 58,279
Motorsports related income...................... 40,917 50,449
Food, beverage and souvenir income.............. 15,612 18,313
Other income.................................... 698 830
___________ __________
106,475 127,871
EXPENSES:
Direct expenses:
Prize and point fund monies
and NASCAR sanction fees.................... 17,284 19,449
Motorsports related expenses.................. 16,670 21,500
Food, beverage and souvenir expenses.......... 8,108 9,365
General and administrative expenses............. 17,345 20,206
Depreciation and amortization .................. 6,284 7,531
___________ __________
65,691 78,051
___________ __________
Operating Income.................................. 40,784 49,820
Interest income .................................. 1,069 4,713
Interest expense ................................. (441) (925)
Equity in net loss from equity investments ....... (242) (466)
Gain on sale of equity investment ................ 1,245
___________ __________
Income before income taxes........................ 42,415 53,142
Income taxes...................................... 16,220 20,359
___________ __________
Net Income........................................ $26,195 $32,783
=========== ==========
Basic earnings per share ......................... $ 0.69 $ 0.76
=========== ==========
Diluted earnings per share ....................... $ 0.68 $ 0.76
=========== ==========
Dividends per share............................... $ 0.06 $ 0.06
=========== ==========
Basic weighted average shares outstanding ........ 38,208,374 42,871,220
=========== ==========
Diluted weighted average shares outstanding ...... 38,366,990 42,997,923
=========== ==========
</TABLE>
See accompanying notes.
<PAGE>
<PAGE> International Speedway Corporation
Condensed Consolidated Statements of Shareholders' Equity
<TABLE>
<CAPTION>

CLASS A CLASS B
COMMON COMMON UNEARNED
STOCK STOCK ADDITIONAL COMPENSATION- TOTAL
$.01 PAR $.01 PAR PAID-IN RETAINED RESTRICTED SHAREHOLDERS'
VALUE VALUE CAPITAL EARNINGS STOCK EQUITY
-------- --------- --------- --------- ----------- --------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>

BALANCE AT NOVEMBER 30, 1997 $ 53 $332 $ 86,437 $125,457 $(2,372) $209,907

Activity 12/1/97 - 5/31/98 - unaudited:
Net Income ........................... - -- -- 26,195 -- 26,195
Cash dividends declared ($.06 per share) - - - (2,310) -- (2,310)
Change in equity investment .......... - -- 115 -- -- 115
Restricted stock granted ............. - - 680 -- (680) --
Reacquisition of previously issued
common stock ....................... - -- (57) (138) -- (195)
Conversion of Class B Common Stock to
Class A Common Stock ............... 4 (4) -- -- -- --
Forfeiture of restricted shares ...... - -- (110) -- 110 --
Income tax benefit related to restricted
stock plan ......................... - -- 492 -- -- 492
Amortization of unearned compensation. - -- -- -- 486 486
----- ----- --------- --------- -------- ---------
BALANCE AT MAY 31, 1998 - unaudited 57 328 87,557 149,204 (2,456) 234,690

Activity 6/1/98 - 11/30/98 - unaudited:
Net income ........................... - - -- 13,997 -- 13,997
Public offering - Class A Common Stock 46 - 117,654 -- -- 117,700
Change in equity investment .......... - -- (122) -- -- (122)
Conversion of Class B Common Stock to
Class A Common Stock ............... 12 (12) -- -- -- --
Amortization of unearned compensation. - -- -- -- 590 590
----- ----- --------- --------- -------- ---------
BALANCE AT NOVEMBER 30, 1998 115 316 205,089 163,201 (1,866) 366,855

Activity 12/1/98 - 5/31/99 - unaudited:
Net income ........................... -- -- -- 32,783 -- 32,783
Cash dividends declared ($.06 per share) - - -- (2,586) -- (2,586)
Restricted stock granted ............. - -- 1,035 -- (1,035) --
Change in equity investment .......... - -- (53) -- -- (53)
Reacquisition of previously issued
common stock ....................... -- -- (314) (796) -- (1,110)
Conversion of Class B Common Stock to
Class A Common Stock ............... 12 (12) -- -- -- --
Income tax benefit related to restricted
stock plan ......................... - -- 1,129 -- -- 1,129
Amortization of unearned compensation. - -- -- -- 509 509
----- ----- --------- --------- -------- ---------
BALANCE AT MAY 31, 1999 - unaudited $127 $304 $206,886 $192,602 $(2,392) $397,527
===== ===== ========= ========= ======== =========

</TABLE>

See accompanying notes.
<PAGE>
<PAGE>
International Speedway Corporation
Condensed Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Six months ended
May 31, May 31,
1998 1999
(Unaudited) (Unaudited)
______________________________
(In Thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Net income...................................... $ 26,195 $ 32,783
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization .............. 6,284 7,531
Amortization of unearned compensation....... 486 509
Deferred income taxes....................... 4,981 5,099
Undistributed loss from equity
investments .............................. 242 466
Gain on sale of equity investment .......... (1,245)
Changes in operating assets and liabilities:
Receivables................................. (2,212) (1,736)
Inventories................................. (639) (581)
Prepaid expenses and other current assets... (919) 164
Other assets................................ (901)
Accounts payable............................ (204) (5,358)
Income taxes payable........................ 2,823 (1,142)
Deferred income............................. 6,398 5,839
Other current liabilities................... 881 (100)
__________________________
Net cash provided by operating activities....... 42,170 43,474

INVESTING ACTIVITIES
Change in short-term investments, net ........ 20,905 (9,550)
Capital expenditures.......................... (22,722) (38,955)
Cash surrender value of life insurance........ (103) (126)
Equity investments ........................... (410) (11,038)
Increase in restricted investments, net ...... - (52,067)
Proceeds from sale of equity investment ...... 5,270
__________________________
Net cash provided by (used in) by investing
activities.................................... 2,940 (111,736)

FINANCING ACTIVITIES
Payment of long-term debt .................... (12,455) (530)
Reacquisition of previously issued
common stock................................. (195) (1,110)
Proceeds from TIF bonds, net ................. - 63,674
__________________________
Net cash (used in) provided by financing
activities .................................. (12,650) 62,034
__________________________
Net increase (decrease) in cash and cash
equivalents ................................. 32,460 (6,228)
Cash and cash equivalents at beginning of period 9,974 38,676
__________________________
Cash and cash equivalents at end of period ..... $ 42,434 $ 32,448
==========================
</TABLE>
See accompanying notes.
<PAGE>
<PAGE>
International Speedway Corporation
Notes to Condensed Consolidated Financial Statements
November 30, 1998 and May 31, 1999
(Unaudited)

1. Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared
in compliance with Rule 10-01 of Regulation S-X and generally accepted
accounting principles but do not include all of the information and disclosures
required 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"). 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. Certain reclassifications have been made to
conform to the financial presentation at May 31, 1999.

Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income", became effective for the Company during the first
quarter of fiscal year 1999. The Company has no items of other comprehensive
income and therefore no additional disclosure requirements.

Because of the seasonal concentration of racing events, the results of
operations for the three-month and six-month periods ended May 31, 1998 and
1999 are not indicative of the results to be expected for the year.

2. Equity Investments

On May 5, 1999, the Motorsports Alliance, LLC ("MSA") (owned 50% by the Company
and 50% by Indianapolis Motor Speedway) and the owners of Route 66 Raceway,
LLC, formed a new company, Raceway Associates, LLC, ("Raceway Associates")
which is owned 75% by MSA and 25% by the former owners of the Route 66 Raceway,
LLC. As a result of this transaction, Raceway Associates owns the 240 acre
Route 66 Raceway motorsports complex located in Joliet, Illinois, approximately
35 miles from downtown Chicago. Raceway Associates has also purchased 930
acres adjacent to the existing Route 66 complex for the proposed construction
of a 1.5 mile oval motor speedway, which will initially accommodate
approximately 75,000 spectators. The proposed new superspeedway development
will be financed through equity of approximately $50 million from MSA and a
borrowing of approximately $50 million by Raceway Associates. The members of
MSA will guarantee up to $50 million in borrowings of Raceway Associates on a
pro rata basis until such time as the operations of Raceway Associates meet
certain financial criteria. During the six months ended May 31, 1999, the
Company contributed approximately $11 million to MSA, approximately $9 million
of which has been applied towards the Company's portion of the capital
commitment for the acquisition of land and development of the new facility.

3. Proposed Acquisition

On May 10, 1999, the Company, 88 Corp., a merger subsidiary wholly owned by the
Company, and Penske Motorsports, Inc. ("PMI") entered into an Agreement and
Plan of Merger ("PMI Merger Agreement"). Upon satisfaction of the conditions
set forth in the PMI Merger Agreement, PMI will merge into 88 Corp. ("the PMI
Merger") and, upon consummation of the PMI Merger, PMI will be a wholly owned
subsidiary of the Company.

In connection with the proposed PMI Merger, the Company, Penske Performance,
Inc., Penske Corporation, (the sole shareholder of Penske Performance, Inc.,)
and PSH Corp., (which owns approximately 56% of the issued and outstanding
shares of PMI), entered into an Agreement and Plan of Merger which, upon
satisfaction of the conditions set forth in that agreement, will result in the
merger of PSH Corp. into the Company ("PSH Merger"). In addition, PSH Corp. has
agreed in the PSH Merger Agreement to vote the shares owned by it in favor of
the approval of the PMI Merger Agreement. It is anticipated that the PSH
Merger will occur on the same date as the PMI Merger. Under certain
circumstances, the PSH Merger can still be consummated even if the PMI Merger
Agreement were to be terminated. Collectively, the PMI Merger and the PSH
Merger and the related agreements are referred to as the "Merger" and "Merger
Agreements".

Pursuant to the Merger Agreements, the Company will acquire the approximately
88%, or 12.2 million outstanding common shares, of PMI stock that it does not
already own for $50.00 per share, subject to a collar provision. PMI
shareholders can elect to receive this consideration as $15.00 cash and $35.00
worth of the Company's Class A Common Stock or $50.00 worth of the Company's
Class A Common Stock. The total transaction value of the PMI equity (including
the approximately 12% of PMI currently owned by the Company) is approximately
$692 million with a net value of approximately $611 million. If all PMI
shareholders elected to receive 30% of their consideration as cash ($15.00 per
PMI share), the expected cash required to purchase the shares would be
approximately $183 million. The Company has obtained a definitive commitment
from First Union Capital Markets Corp. for a $300 million, five-year revolving
credit facility, which will be used in part, to finance the Mergers.

The Company received early termination of the Hart-Scott-Rodino Act waiting
period for the Mergers effective June 1, 1999 and subsequently mailed the Joint
Proxy Statement/Prospectus for the transaction to stockholders of the Company
and PMI. The transaction is still pending approval by PMI shareholders and
approval of the issuance of the Company's stock for the Mergers by the
Company's shareholders. The Company anticipates the Mergers closing on July 26,
1999 pending shareholder approval. The transaction will be accounted for under
the purchase method of accounting and, accordingly, the results of the acquired
operations will be included in the Company's consolidated statements of
operation beginning on the date of acquisition.

4. Long-Term Debt

Long-term debt consists of the following (in thousands):

November 30 May 31
1998 1999
_____________________________________
TIF bond debt service funding
commitment, net of discount of $1,685 $ 0 $ 69,655

Notes payable 3,373 2,775
_______ ________
3,373 72,430
Less current portion 598 685
________ ________
$2,775 $ 71,745
======== ========

The note payable at May 31, 1999 for approximately $2.8 million bears interest
at 7.5% and is payable on December 31, 2001. Scheduled principal payments on
the TIF bond debt service funding commitment ("Funding Commitment") for the
five fiscal years following 1998 are as follows:

(In Thousands)

1999 $ 685
2000 155
2001 165
2002 175
2003 275
Thereafter 69,885
_______
71,340
Discount 1,685
_______
$69,655
=======

In January 1999, the Unified Government of Wyandotte County/Kansas City, Kansas
("Unified Government"), issued approximately $71.3 million in taxable special
obligation revenue ("TIF") bonds and approximately $24.3 million in sales tax
special obligation revenue ("STAR") bonds, in connection with the financing of
phase I construction of the speedway in Kansas. The net proceeds were
deposited into trust accounts. The STAR bonds will be retired with state and
local taxes generated within the project's boundaries. The TIF bonds are
comprised of a $26.1 million, 6.15% term bond due December 1, 2017 and a $49.7
million, 6.75% term bond due December 1, 2027. The TIF bonds are serviced
through payments by the Unified Government, which are funded through payments
made by the Company to the Unified Government in lieu of property taxes.
Principal (mandatory redemption) payments per the Funding Commitment are
payable by the Company on October 1 of each year beginning in 1999. The semi-
annual interest component of the Funding Commitment is payable on each April 1
and October 1, beginning on April 1, 1999.

Simultaneous with the issuance of the STAR and TIF bonds in January 1999, the
Company deposited into a trust account the unexpended portion of its $77.9
million equity commitment to the Kansas project. Prior to the issuance of the
STAR and TIF bonds, the Company had spent approximately $29.9 million related
to the construction of the speedway in Kansas.

The TIF bond proceeds and the Company's equity contribution remaining in the
trust accounts are classified as restricted investments on the Company's
balance sheet. The funds held in trust have been invested in a guaranteed
investment contract earning an interest rate of approximately 4.75% with a
maturity date of April 2001.

The Company has granted a mortgage and security interest in the Kansas project
for its Funding Commitment obligation.

Total interest incurred by the Company was approximately $128,000 and $628,000
for the three months ended May 31, 1998 and 1999, respectively, and $441,000
and $925,000, for the six months ended May 31, 1998 and 1999, respectively.
Total interest capitalized for the three months and six months ended May 31,
1999 was approximately $617,000 and $892,000, respectively.

Financing costs associated with the TIF bonds of approximately $6.0 million
have been deferred and are included in other assets. These costs are being
amortized on a straight-line basis over the life of the TIF bonds.

5. Related Party Disclosures and Transactions

All of the racing events that take place during the Company's fiscal year are
sanctioned by various racing organizations such as the American Historic Racing
Motorcycle Association ("AHRMA"), the American Motorcyclist Association
("AMA"), the Automobile Racing Club of America ("ARCA"), the Championship Cup
Series ("CCS"), the Federation Internationale de l'Automobile ("FIA"), the
Federation Internationale Motocycliste ("FIM"), Historic Sportscar Racing
("HSR"), the International Race of Champions ("IROC"), the Indy Racing League
("IRL"), the National Association for Stock Car Auto Racing, Inc. ("NASCAR"),
the Sports Car Club of America ("SCCA"), the Sportscar Vintage Racing
Association ("SVRA"), the United States Auto Club ("USAC"), the United States
Road Racing Championship ("USRRC"), and the World Karting Association ("WKA").
NASCAR, which sanctions some of the Company's principal racing events, is a
member of the France Family Group which controls in excess of 60% of the
combined voting power of the outstanding stock of the Company and some members
of which serve as directors and officers. Standard NASCAR sanction agreements
require racetrack operators to pay sanction fees and prize and point fund
monies for each sanctioned event conducted. The prize and point fund monies are
distributed by NASCAR to participants in the events. Prize and point fund
monies paid by the Company to NASCAR for disbursement to competitors totaled
approximately $5.0 million and $13.9 million for the three and six-month
periods ended May 31, 1998, respectively, and approximately $ 5.3 million and
$15.5 million for the three-month and six-month periods ended May 31, 1999,
respectively.

6. Supplemental Disclosures of Cash Flow Information

Cash paid for income taxes and interest for the six months ended May 31, 1998
and 1999 is as follows:

1998 1999
________________________________
(Thousands of Dollars)

Income taxes paid $7,875 $16,396
=================================
Interest paid $ 778 $ 1,855
=================================

7. Legal Proceedings

The Company's indirect corporate subsidiary, Americrown Service Corporation
("Americrown"), is the sole defendant in a class action proceeding in the
Circuit Court of Talladega County, Alabama which was filed in October 1996.
The plaintiffs allege, among other things, that Americrown engaged in
price-fixing activities in connection with the sale of racing souvenirs and
merchandise at the Talladega Superspeedway. The suit seeks to recover at least
$500 for each member of the class but does not otherwise seek to recover
compensatory or punitive damages or statutory attorneys' fees. A class
consisting of persons who purchased racing souvenirs at Talladega Superspeedway
since September 1992 was certified on July 30, 1998 by the court. Americrown
has moved for reconsideration and intends to appeal the ruling to the Alabama
Supreme Court. Americrown disputes the allegations and intends to defend the
action fully and vigorously.

In March 1997, two purported class action companion lawsuits were filed in the
United States District Court, Northern District of Georgia, against the
Company, Americrown, and a number of other persons alleging, in substance, that
the defendants unlawfully conspired to fix prices of souvenirs and merchandise
sold to consumers in violation of federal antitrust laws. One suit was filed
by Florida residents and the other suit was filed by Georgia residents. Both
suits seek damages and injunctive relief on behalf of all persons who purchased
souvenirs or merchandise from certain vendors at any NASCAR Winston Cup race or
supporting event in the United States during the period 1991 to present. The
two suits have been consolidated and the court is considering class
certification. Discovery has been concluded. The Company and Americrown
dispute the allegations and intend to defend the actions fully and vigorously.

Management is presently unable to predict or quantify the outcome of these
matters.

8. Long-Term Incentive Plans

On April 1, 1998 and 1999, a total of 22,236 and 19,633 restricted shares of
the Company's Class A Common Stock, respectively, were awarded to certain
officers and managers under the Company's Long-term Incentive Plan (the "1996
Plan"). The market value of shares awarded amounted to approximately $680,000
and $1,035,000 respectively, which has been recorded as unearned compensation -
- - restricted stock, and is shown as a separate component of shareholders'
equity in the accompanying condensed consolidated balance sheets. The unearned
compensation is being amortized over the vesting period of the shares. The
total expense for restricted stock awards charged against operations during the
six months ended May 31, 1998 and May 31, 1999 was approximately $486,000 and
$509,000, respectively.
<PAGE>
<PAGE>
PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Results of Operations

General

The Company derives revenues primarily from (i) admissions to racing events and
motorsports activities held at its facilities, (ii) revenue generated in
conjunction with or as a result of motorsports events conducted at its
facilities, and (iii) catering, concession and souvenir sales made during or as
a result of such events and activities.

"Admissions" revenue includes ticket sales from all of the Company's events and
DAYTONA USA's Track Tours and Velocitorium. Admissions revenue for racing
events is recorded upon completion of the related motorsports event.

"Motorsports related income" primarily includes television and radio broadcast
rights fees, promotion and sponsorship fees, hospitality rentals (including
luxury suites, chalets and the hospitality portion of club seating),
advertising revenues, royalties from licenses of the Company's trademarks, and
track rentals. The Company currently negotiates directly with television and
cable networks for coverage of substantially all of its televised motorsports
events. NASCAR has announced it will retain these rights and negotiate
television contracts as they expire, beginning in the year 2000. The Company
expects that the percentage of television broadcast rights fees that the
Company currently retains from each contract will be the same under the future
arrangement. The Company's revenues from corporate sponsorships are paid in
accordance with negotiated contracts, with the identities of sponsors and the
terms of sponsorship changing from time to time.

"Food, beverage and souvenir income" includes revenues from concession stands,
hospitality catering and direct sales of souvenirs, programs and other
merchandise, as well as fees paid by third party vendors for the right to sell
souvenirs and concessions at the Company's facilities.

Expenses include (i) prize and point fund monies and NASCAR sanction fees, (ii)
motorsports related expenses, which include costs of competition paid to
sanctioning bodies other than NASCAR, labor, advertising and other expenses
associated with the Company's promotion of its racing events, and (iii) food,
beverage and souvenir expenses, consisting primarily of labor and costs of
goods sold.

The following table sets forth, for each of the indicated periods, certain
selected income statement data as a percentage of total revenues:
<TABLE>
<CAPTION>
Three Months ended Six Months Ended
May 31, May 31,
1998 1999 1998 1999
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
_________________________ _________________________

<S> <C> <C> <C> <C>
Revenues:

Admissions, net............................. 45.5% 46.3% 46.2% 45.6%
Motorsports related income.................. 36.0 35.9 38.4 39.5
Food, beverage and souvenir income.......... 17.4 16.7 14.7 14.3
Other income................................ 1.1 1.1 .7 .6
________ ________ ________ _______
Total revenues ........................... 100.0% 100.0% 100.0% 100.0%

Expenses:

Direct expenses:
Prize and point fund monies
and NASCAR sanction fees................ 16.2 14.9 16.2 15.2
Motorsports related expenses.............. 22.3 23.3 15.7 16.8
Food, beverage and souvenir expenses...... 9.5 9.2 7.6 7.3
General and administrative expenses......... 23.1 22.3 16.3 15.8
Depreciation and amortization .............. 8.5 8.8 5.9 5.9
________ ________ ________ _______
Total expenses ........................... 79.6 78.5 61.7 61.0
________ ________ ________ _______
Operating income.............................. 20.4 21.5 38.3 39.0
Interest income .............................. 1.6 5.9 1.0 3.7
Interest expense ............................. (.3) (1.4) (.4) (0.7)
Equity in net loss from equity investments.... 0.5 -- (.2) --
Gain on sale of equity investment ............ 3.2 (1.1) 1.1 (0.4)
________ ________ ________ _______
Income before income taxes.................... 25.4 24.9 39.8 41.6
Income tax expense............................ 9.6 9.6 15.2 16.0
________ ________ ________ _______
Net income.................................... 15.8% 15.3% 24.6% 25.6%
</TABLE>

Comparison of the Results for the Three and Six Months Ended May 31, 1999 to
the Results for the Three and Six Months Ended May 31, 1998

Admissions revenue increased approximately $3.3 million, or 19.0%, for the
three months ended May 31, 1999 as compared to the three months ended May 31,
1998. While the Company experienced an increase in attendance for all of its
second quarter event weekends in 1999 compared to the same event weekend in the
prior year, the overall increase in admissions revenue was primarily related to
the NASCAR events conducted at Talladega Superspeedway ("Talladega"). This
increase was a result of increased seating capacity and attendance and, to a
lesser extent, an increase in the weighted average price of the tickets sold
for the NASCAR Winston Cup Series event.

Admissions revenue increased approximately $9.0 million, or 18.3%, for the six
months ended May 31, 1999, as compared to six months ended May 31, 1998. This
increase was primarily related to the increase in the weighted average price of
tickets sold as well as increased seating capacity and attendance at the
Speedweeks events held at Daytona International Speedway ("Daytona"), and, to a
lesser extent, events conducted at Talladega in the second quarter.

Motorsports related income increased approximately $2.3 million , or 16.4%,
during the three months ended May 31, 1999 as compared to the three months
ended May 31, 1998. Over one-half of this increase was attributable to the
NASCAR events held at Talladega and Darlington Raceway ("Darlington"), which
experienced growth in television broadcast rights fees, sponsorship revenues
and luxury suites and hospitality rentals. Strong advertising and royalty
revenues also contributed to the remaining increase for the three months ended
May 31, 1999.

Motorsports related income increased approximately $9.5 million, or 23.3%, for
the six months ended May 31, 1999 as compared to the six months ended May 31,
1998. Over three-quarters of this increase was attributable to increased
television broadcast rights fees, expanded luxury suite and hospitality
facilities and increased sponsorship revenues for the Speedweeks events at
Daytona, and to a lesser extent, events at the Company's other facilities. The
remaining increase was primarily attributable to increased royalty and
advertising revenue.

Food, beverage and souvenir income increased approximately $833,000, or
12.5%, during the three months ended May 31, 1999 as compared to the three
months ended May 31, 1998. This increase was primarily attributable to strong
sales of souvenirs, food and beverage and catering resulting from increased
attendance and seating capacity, as well as expanded hospitality facilities, at
the Talladega events.

Food, beverage and souvenir income increased approximately $2.7 million, or
17.3%, for the six months ended May 31, 1999 as compared to the six months
ended May 31, 1998. Over one-half of the increase related to increased
catering revenues from expanded luxury suite and hospitality facilities at
Daytona's Speedweeks events. The remaining increase was primarily
attributable to increased attendance and seating capacity for NASCAR events
conducted at the Company's superspeedways.

Prize and point fund monies and NASCAR sanction fees increased by approximately
$453,000, or 7.3%, and $2.2 million, or 12.5%, for the three months and six
months ended May 31, 1999, respectively, as compared to the same periods of the
prior year. Approximately three-quarters of this increase was due to increased
prize and point fund monies paid by NASCAR to participants in NASCAR events.
Growth in television broadcast rights fees contributed significantly to these
increases as standard NASCAR sanctioning agreements require that a specified
percentage of broadcast rights fees be paid as part of the prize money.

Motorsports related expenses increased approximately $1.9 million, or 22.4%,
and $4.8 million, or 29.0% for the three and six months ended May 31, 1999,
respectively, as compared to the same periods of the prior year. The increase
was primarily attributable to personnel costs, hospitality services and
supplies and, to a lesser extent, a variety of other fan amenities and
operating expenses. Motorsports related expenses as a percentage of combined
admissions and motorsports related income increased approximately 1.0% and 1.3%
for the three months and six months ended May 31, 1999 respectively, as
compared to the same periods for the prior year. The slight increase in costs
for the three months ended May 31, 1999 related primarily to increased costs of
events at Talladega, including sanction fees for non-NASCAR events and
continued expansion of fan amenities. The increase for the six months ended
May 31, 1999 was primarily due to the margins associated with certain
hospitality packages introduced during Speedweeks of 1999.

Food, beverage and souvenir expenses increased approximately $487,000, or
13.4%, and $1.3 million, or 15.5%, for the three months and six months ended
May 31, 1999, respectively, as compared to the same periods of the prior year.
These increased expenses were primarily related to increased product and
personnel costs. Food, beverage and souvenir expenses as a percentage of food,
beverage and souvenir income remained relatively consistent for the three
months and six months ended May 31, 1999, as compared to the same periods of
the prior year.

General and administrative expenses increased approximately $1.1 million, or
12.9%,and $2.9 million, or 16.5%, for the three and six months ended May 31,
1999 as compared to the same periods of the prior year. The increase in
expenses was primarily attributable to personnel costs and a variety of other
expenses, as well as a bad debt reserve primarily related to a single customer
incurred during the first quarter of fiscal 1999. General and administrative
expenses as a percentage of total revenues remained relatively constant for the
three months and six months ended May 31, 1999, as compared to the same periods
of the prior year.

Depreciation and amortization expense increased approximately $662,000, or
20.4%, and $1.2 million, or 19.8%, for the three months and six months ended
May 31, 1999, respectively, as compared to the same periods of the prior year
as a result of the ongoing expansion of the Company's facilities.

Interest income for the three months and six months ended May 31, 1999,
increased by approximately $2.0 million and $3.6 million, respectively, as
compared to the same periods of the prior year. This increase was primarily
due to the investment of the remaining proceeds of the July 1998 Class A Common
Stock Offering, including the Company's investments restricted to the funding
of the speedway in Kansas, and investment of the proceeds from the sale of
taxable special obligation revenue ("TIF") bonds issued in January 1999 by the
Unified Government of Wyandotte County/Kansas City, Kansas ("Unified
Government"), to partially fund the Kansas project (See "Future Liquidity").

Interest expense for the three months and six months ended May 31, 1999,
increased by approximately $500,000 and $484,000, respectively, as compared to
the same periods of the prior year. Interest expense in fiscal 1999 was
primarily attributable to the interest on the TIF bond debt service funding
commitment, net of capitalized interest, while interest expense in fiscal 1998
was primarily related to the note payable associated with the acquisition of
Phoenix.

Equity in net income (loss) from equity investments represents the Company's
pro rata share of the current income and losses from its equity investments and
the amortization of the Company's investment in excess of its share of the
investee's underlying net assets. During the three months and six months ended
May 31, 1999, this included the Company's approximately 12% indirect investment
in Penske Motorsports, Inc. ("PMI"), its 45% investment in Homestead-Miami
Speedway, LLC ("Miami") and its 50% investment in Motorsports Alliance, LLC,
which is pursuing development of a major motorsports facility in the Chicago
area (See "Future Liquidity"). For the three months and six months ended May
31, 1998, this included the Company's approximately 11% indirect investment in
PMI, its 40% investment in Miami, which increased to 45% in March of 1998, and
its 7% investment in Grand Prix Association of Long Beach ("Long Beach"), which
was sold in March of 1998.

In March of 1998 the Company recorded an approximately $1.2 million gain on the
sale of its equity investment in Long Beach. The Company sold its investment
in conjunction with Dover Downs Entertainment, Inc.'s announced plans to merge
with Long Beach. The after tax impact of this transaction was approximately
$850,000.

As a result of the foregoing, the Company's net income increased approximately
$798,000, or 13.2%, and $6.6 million, or 25.1%, for the three months and six
months ended May 31, 1999 as compared to the same periods in the prior year.

Liquidity and Capital Resources

General

The Company has historically generated sufficient cash flow from operations to
fund its working capital needs and capital expenditures at existing facilities,
as well as to pay an annual cash dividend. At May 31, 1999, the Company had
working capital of $32.6 million, compared to working capital of $27.5 million
at November 30, 1998. There were no borrowings under the Company's credit
facility at May 31, 1999. See "Future Liquidity".

Cash Flows

Net cash provided by operating activities was approximately $43.5 million for
the six months ended May 31, 1999 compared to $42.2 million for the six months
ended May 31, 1998. The difference between the Company's net income of $32.8
million and the $43.5 million of operating cash flow was primarily attributable
to depreciation and amortization of $7.5 million, an increase in deferred
revenue of $5.8 million and an increase in deferred income taxes of $5.1
million, partially offset by a decrease in accounts payable of $5.4 million, an
increase in receivables of $1.7 million and a decrease in income taxes payable
of $1.1 million.

Net cash used in investing activities was $111.7 million for the six months
ended May 31, 1999, compared to $2.9 million of net cash provided during the
six months ended May 31, 1998. The Company's use of cash for investing
activities reflects the $52.1 million net increase in restricted investments
for the project in Kansas, $39.0 million in capital expenditures, $11.0 million
for the Company's investment year to date in the Chicago project, and the net
acquisition of $9.6 million of short-term investments. See "Capital
Expenditures".

Net cash provided by financing activities of $62.0 million for the six months
ended May 31, 1999, compared to $12.7 million of net cash used during the six
months ended May 31, 1998, is related primarily to the net proceeds from the
issuance of the TIF bonds. See "Future Liquidity".

Capital Expenditures

Capital expenditures totaled approximately $39.0 million for the six months
ended May 31, 1999 as compared to $22.7 million for the six months ended May
31, 1998. Approximately sixty percent of these expenditures were related to
increased seating capacity at Daytona, Talladega, Phoenix International Raceway
and Darlington, as well as a variety of other improvements to the Company's
existing facilities. The remaining capital expenditures were primarily related
to the construction of the speedway in Kansas.

The Company expects to make approximately $70.0 million of additional capital
expenditures for approved projects at existing facilities within the next 24
months to increase grandstand seating capacity, acquire land for expansion of
parking capacity and for a variety of additional improvements to the Company's
motorsports facilities. In addition, the Company will continue to make capital
expenditures related to the construction of the Kansas facility which will be
funded from restricted investments, as discussed below.

Future Liquidity

On May 10, 1999, the Company, 88 Corp., a merger subsidiary wholly owned by the
Company, and PMI entered into an Agreement and Plan of Merger ("PMI Merger
Agreement"). Upon satisfaction of the conditions set forth in the PMI Merger
Agreement, PMI will merge into 88 Corp. ("the PMI Merger") and, upon
consummation of the PMI Merger, PMI will be a wholly owned subsidiary of the
Company.

In connection with the proposed PMI Merger, the Company, Penske Performance,
Inc., Penske Corporation, (the sole shareholder of Penske Performance, Inc.),
and PSH Corp., (which owns approximately 56% of the issued and outstanding
shares of PMI), entered into an Agreement and Plan of Merger which, upon
satisfaction of the conditions set forth in that agreement, will result in the
merger of PSH Corp. into the Company ("PSH Merger"). In addition, PSH Corp. has
agreed in the PSH Merger Agreement to vote the shares owned by it in favor of
the approval of the PMI Merger Agreement. It is anticipated that the PSH
Merger will occur on the same date as the PMI Merger. Under certain
circumstances, the PSH Merger can still be consummated even if the PMI Merger
Agreement were to be terminated. Collectively, the PMI Merger and PSH Merger
and the related agreements are referred to as the "Mergers" and "Merger
Agreements".

The Company received early termination of the Hart-Scott-Rodino Act waiting
period for the Mergers effective June 1, 1999 and subsequently mailed the Joint
Proxy Statement/Prospectus for the transaction to shareholders of the Company
and PMI. The Company anticipates the Mergers closing on July 26, 1999, pending
shareholder approval.

The Mergers will result in the Company's acquisition of Michigan Speedway in
Brooklyn, Michigan; Nazareth Speedway in Nazareth, Pennsylvania; California
Speedway in San Bernardino County, California; and North Carolina Speedway in
Rockingham, North Carolina. The Company will also acquire the 45% interest PMI
holds in Homestead-Miami Speedway, bringing the Company's ownership in that
facility to 90%, as well as other PMI merchandising subsidiaries. Upon
completion of the transaction, the Company will operate 10 motorsports
facilities across the United States with more than 800,000 seats and 400
suites.

On July 1, 1999, the Company announced that it had obtained a definitive
commitment from First Union Capital Markets Corp. which will be used in part to
finance the Mergers. The transaction is structured as a $300 million
fully-underwritten five-year revolving credit facility ("Credit Facility") to
be syndicated to a select group of lenders. This Credit Facility will replace
the Company's existing $100 million facility, under which no borrowings are
outstanding at May 31, 1999, and refinance outstanding borrowings under PMI's
existing credit facility at closing. In addition to financing the pending
Mergers, proceeds of the new credit facility will be used for working capital
and general corporate purposes. Borrowings under the Credit Facility will bear
interest at the applicable LIBOR rate plus 50-100 basis points depending on
certain financial criteria.

During the first quarter of 1999, the financing for the first phase of the
development of the Kansas facility, which is currently estimated to cost
approximately $224 million, was substantially completed. In January 1999, the
Unified Government issued approximately $71.3 million in TIF bonds and
approximately $24.3 million in sales tax special obligation revenue ("STAR")
bonds. The STAR bonds are retired with state and local taxes generated within
the project's boundaries. The TIF bonds will be serviced through payments by
the Unified Government escalating from an annual rate of approximately $4.8
million to $7.7 million, including interest at 6.15% to 6.75%, which are funded
by payments made by the Company to the Unified Government in lieu of property
taxes. In addition, the Company has committed equity of approximately $77.9
million of which $24.4 was funded during fiscal 1998, with the remaining $53.5
million funded in the first quarter of fiscal 1999. The net TIF and STAR bond
proceeds and the Company's equity contribution were deposited into trustee
administered accounts for the benefit of the construction of the Kansas
facility which will be owned and operated by the Company. At May 31, 1999, the
Company's $105.6 million of restricted investments includes the funds remaining
from the Company's equity contribution and the TIF bond proceeds.

On May 5, 1999, the Motorsports Alliance, LLC ("MSA") (owned 50% by the Company
and 50% by Indianapolis Motor Speedway) and the owners of Route 66 Raceway,
LLC, formed a new company, Raceway Associates, LLC, which is owned 75% by MSA
and 25% by the former owners of the Route 66 Raceway. As a result of this
transaction, Raceway Associates owns the 240 acre Route 66 Raceway motorsports
complex located in Joliet, Illinois, approximately 35 miles from downtown
Chicago. Raceway Associates has also purchased 930 acres adjacent to the
existing Route 66 complex for the proposed construction of a 1.5 mile oval
motor speedway, which will initially accommodate approximately 75,000
spectators. The proposed new superspeedway development will be financed
through equity of approximately $50 million from MSA and a borrowing of
approximately $50 million by Raceway Associates. The members of MSA will
guarantee up to $50 million in borrowings of Raceway Associates on a pro rata
basis until such time as the operations of Raceway Associates meet certain
financial criteria. During the six months ended May 31, 1999, the Company
contributed approximately $11 million to MSA, approximately $9 million of which
has been applied towards the Company's portion of the capital commitment for
the acquisition of land and development of the new facility.

In March 1999, the Company announced that it had entered into a development
agreement with The Trump Organization, a major real estate developer, to
identify and develop a site for a major motorsports facility in the metro New
York City area, which includes New York, New Jersey and Connecticut.
Preliminary evaluations are underway at several sites.

The Company believes that cash flow from operations, along with existing cash
and short-term investment balances and available borrowings under the new
Credit Facility, will be sufficient to fund i) the Company's operations and
approved capital projects at existing facilities for the foreseeable future,
ii) the maximum expected cash requirement for the proposed acquisition of the
outstanding common shares of PMI, iii) payments required in connection with the
funding of the Unified Government's debt service requirements related to the
TIF bonds described above prior to commencement of racing at the speedway in
Kansas, and iv) the Company's expected equity funding requirements for the
Chicago project. Also, the Company intends to pursue further developments
and/or acquisition opportunities (including the possible development of a new
motorsports facility in the metro New York City area) the timing, size and
success as well as associated potential capital commitments of which are
unpredictable. Accordingly, a material acceleration in the Company's growth
strategy could require the Company to obtain additional capital through debt
and/or equity financings. Although there can be no assurance, management
believes that adequate debt or equity financing would be available on
satisfactory terms.

Inflation

Management does not believe that inflation has had a material impact on
operating costs and earnings of the Company.

Impact of the Year 2000

The Year 2000 issue is the result of computer programs and other business
systems being written using two digits rather than four to represent the year.
Many of the time sensitive applications and business systems of the Company and
its business partners may recognize a date using "00" as the year 1900 rather
than the year 2000, which could result in system failure or disruption of
operations. The Year 2000 problem will impact the Company and its business
partners.

An assessment of the Year 2000 exposure related to information technology
systems has been made and the plans to resolve the related issues are being
implemented. Most major information technology systems have already been
updated or replaced with applications that are Year 2000 compliant in the
normal course of business. The Company believes it will be able to achieve
Year 2000 readiness with regard to information technology systems during the
fourth quarter of fiscal 1999.

The Company suspects that some of its non-information technology systems, such
as exhibit controllers, elevators, heating and air-conditioning systems, etc.,
with date sensitive software and embedded microprocessors may be affected, and
evaluation is underway. Preliminary estimates of the costs of correcting or
replacing critical non-information technology systems indicate that these costs
will not be material to the Company.

The Company has also developed and implemented a plan of communication with
significant business partners to identify and minimize disruptions to the
Company's operations resulting from the Year 2000 issue. There can be no
certainty that the computer programs and business systems of third parties on
which the Company relies will not have an adverse effect on the Company's
operations. However, because of the nature of its business, the Company
believes at this time that a failure of the Company's vendors, sponsors or
customers to resolve issues involving the Year 2000 problem will not be
material to the Company.

The Company anticipates completing substantially all of its Year 2000
preparation during fiscal 1999. In the event the Company falls behind on its
timetable for achieving Year 2000 compliance, additional internal resources
will be focused on completing critical projects and developing contingency
plans. The Company at this time believes that it will satisfactorily resolve
all significant Year 2000 problems. Preliminary estimates of costs to correct
the identified potential problems related to the Year 2000 indicate that these
costs will not exceed $500,000. Estimates of Year 2000 related costs are based
on numerous assumptions, including the continued availability of certain
resources, the ability to correct all relevant information and non-information
technology systems and third party modification plans. There is no guarantee
that the estimates will be achieved and actual costs could differ materially
from those anticipated.

Factors That May Affect Operating Results

Statements contained in this document that state the Company's or Management's
anticipations, beliefs, expectations, hopes, intentions, predictions and/or
strategies which are not purely historical fact or which apply prospectively
are "forward-looking" statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21 of the Securities Exchange Act of 1934.
All forward-looking statements contained in this document are based on
information available to the Company on the date hereof, and the Company
assumes no obligation to update any such forward-looking statements. It is
important to note that the Company's actual results could differ materially
from those contained or projected in, or even implied by, such forward-looking
statements. Some of the factors that could cause the actual results to differ
materially are set forth below. Additional information concerning these, or
other, factors which could cause actual results to differ materially from those
in the forward-looking statements is contained from time to time in the
Company's other SEC filings. Copies of those filings are available from the
Company and/or the SEC.

Risk Factors Related to the Mergers

As discussed in "Future Liquidity" in "Management's Discussion and Analysis of
Financial Condition and Results of Operations," the Company anticipates the
Mergers closing on July 26, 1999, subject to and pending shareholder approval.
There are risks associated with the anticipated Mergers. A more complete
description of the Mergers and the associated risks is contained in the Joint
Proxy Statement/Prospectus which has already been mailed to all shareholders of
the Company and PMI and in the registration statement on Form S-4 which was
filed with the SEC on June 23, 1999 (collectively the "Merger Filings"). Among
the risk factors contained in the Merger Filings are: Uncertainties in
Integrating Business Operations, Generation of Enhanced Revenues, and
Realization of Cost Savings; Dependence on NASCAR and CART; Dependence on Key
Personnel; Uncertain Prospects of New Motorsports Facilities; Industry
Sponsorships and Government Regulation; Legal Proceedings; Potential Conflicts
of Interest; Financial Impact of Bad Weather; Liability for Personal Injuries;
and Control of Combined Entity. Those risk factors related to the Mergers are
not restated in this report on Form 10-Q for the Company's quarter ended May
31, 1999. To the extent that a reader deems this document to contain forward
looking statements related to the Mergers, reference is made to the risk
factors contained in the Merger Filings.

Dependence Upon NASCAR

The Company's success has been and will remain dependent upon maintaining
a good working relationship with NASCAR, the sanctioning body for NASCAR's
Winston Cup Series, the Busch Series - Grand National Division and certain
other races promoted by the Company. The Company has sanctioning agreements to
promote and market eight NASCAR Winston Cup Series championship point races,
two NASCAR Winston Cup Series non-championship point races, five NASCAR Busch
Series - Grand National Division races and a number of other NASCAR races for
the 1998 racing season. Each NASCAR event sanctioning agreement is awarded on
an annual basis. In fiscal 1998, NASCAR-sanctioned races at the Company's
facilities accounted for approximately 79% of the Company's total revenues.
Although William C. France and James C. France presently control both the
Company and NASCAR and management believes that the Company will continue to
maintain an excellent relationship with NASCAR for the foreseeable future,
NASCAR is under no obligation to continue to enter into sanctioning agreements
with the Company to promote any event. Failure to obtain a sanctioning
agreement for a major NASCAR event would have a material adverse effect on the
Company's financial condition and results of operations. Moreover, although the
Company's general growth strategy includes the possible development and/or
acquisition of additional motorsports facilities, there can be no assurance
that NASCAR will enter into sanctioning agreements with the Company to promote
races at such facilities.

Dependence on Key Personnel

The Company's continued success will depend upon the availability and
performance of its senior management team, particularly William C. France, the
Company's Chairman of the Board and Chief Executive Officer, James C. France,
its President and Chief Operating Officer, and Lesa D. Kennedy, its Executive
Vice President (collectively the "France Family Executives"), each of whom
possesses unique and extensive industry knowledge and experience. While the
Company believes that its senior management team has significant depth, the
loss of any of the Company's key personnel or its inability to attract and
retain key employees in the future could have a material adverse effect on the
Company's operations and business plans.

Uncertain Prospects of New Motorsports Facilities

The Company's growth strategy includes the potential acquisition and/or
development of new motorsports facilities, including the proposed Kansas
International Speedway, the proposed motorsports facility near Chicago,
Illinois. and the possible development of a motorsports facility
near New York City. The Company's ability to implement successfully this
element of its growth strategy will depend on a number of factors, including
(i) the Company's ability to obtain one or more additional sanctioning
agreements to promote NASCAR Winston Cup, NASCAR Busch Series - Grand National
Division or other major events at these new facilities, (ii) the cooperation of
local government officials, (iii) the Company's capital resources, (iv) the
Company's ability to control construction and operating costs, and (v) the
Company's ability to hire and retain qualified personnel. The Company's
inability to implement its expansion plans for any reason could adversely
affect its business prospects. In addition, expenses associated with
developing, constructing and opening a new facility may have a negative effect
on the Company's financial condition and results of operations in one or more
future reporting periods. The cost of any such transaction will depend on a
number of factors, including the facility's location, the extent of the
Company's ownership interest and the degree of any municipal or other public
support. Moreover, although management believes that it will be able to obtain
financing to fund the acquisition, development and/or construction of
additional motorsports facilities should the Company implement this element of
its growth strategy, there can be no assurance that adequate debt or equity
financing will be available on satisfactory terms.

Industry Sponsorships and Government Regulation

The motorsports industry generates significant recurring revenue from the
promotion, sponsorship and advertising of various companies and their products.
Actual or proposed government regulation can adversely impact the availability
to motorsports of this promotion, sponsorship and advertising revenue.
Advertising by the tobacco and alcoholic beverage industries is generally
subject to greater governmental regulation than advertising by other sponsors
of the Corporations's events. Since August of 1996 there have been several
thus far unsuccessful governmental attempts to impose restrictions on the
advertising and promotion of cigarettes and smokeless tobacco, including
sponsorship of motorsports activities. These regulatory efforts if
successfully implemented would have prohibited the present practice of tobacco
brand name sponsorship of, or identification with, motorsports events, entries
and teams. At this point the ultimate outcome of these or future government
regulatory and legislative efforts to regulate the advertising and promotion of
cigarettes and smokeless tobacco is uncertain and the impact, if any, on the
motorsports industry is unclear. Recently major United States companies
engaged in the manufacture of cigarettes and smokeless tobacco (collectively
the "tobacco industry") entered into various agreements with the Attorneys
General of all 50 states to settle certain state initiated litigation against
the tobacco industry. These settlement agreements will, among other things,
place limits upon the sponsorship of motorsports activities by the tobacco
industry. The actual impact of these settlement agreements upon the Company's
future revenues has not yet been determined. Even more recently the executive
branch of the United States government has publicly stated its intention to
initiate certain litigation against the tobacco industry which would be similar
to that initiated by the states which was recently settled. The exact
parameters of the proposed litigation and the impact, if any, of this proposed
litigation upon the Company's future revenues is presently unclear.

The Company is not aware of any proposed governmental regulation which would
materially limit the availability to motorsports of promotion, sponsorship or
advertising revenue from the alcoholic beverage industry. The combined
advertising and sponsorship revenue from the tobacco and alcoholic beverage
industries accounted for approximately 1.5% and 1.6% of the Company's total
revenues in fiscal 1997 and fiscal 1998, respectively. In addition, the tobacco
and alcoholic beverage industries provide financial support to the motorsports
industry through, among other things, their purchase of advertising time, their
sponsorship of racing teams and their sponsorship of racing series such as
NASCAR's Winston Cup Series and Busch Series - Grand National Division.

Legal Proceedings

The Company and its indirect subsidiary, Americrown Service Corporation, are
parties to certain legal proceedings alleging price-fixing activities in
connection with the sale of racing souvenirs and merchandise as described in
"Part II - Other Information". While the Company and Americrown dispute the
allegations and intend to defend the actions fully and vigorously, neither the
cost of defending the suits nor the potential damages or other remedies for
which the Company and Americrown might be liable is insured. Management is
presently unable to predict or quantify the outcome of these matters. But,
there can be no assurance the defense of the suits, or a possible adverse
resolution, will not require material expenditures by the Company.

Potential Conflicts of Interest

William C. France and James C. France beneficially own all of NASCAR's
capital stock, and each of the France Family Executives, the Company's Vice
President--Administration, the Company's General Counsel and certain other
non-officer employees (collectively the "Shared Employees") devote portions of
their time to NASCAR's affairs. Each of the Shared Employees devotes
substantial time to the Company's affairs and all of the Company's other
executive officers are available to the Company on a full-time basis. In
addition, the Company strives to ensure, and management believes, that the
terms of the Company's transactions with NASCAR are no less favorable to the
Company than those which could be obtained in arms'-length negotiations.
Nevertheless, certain potential conflicts of interest between the Company and
NASCAR exist with respect to, among other things, (i) the terms of any
sanctioning agreements that may be awarded to the Company by NASCAR, (ii) the
amount of time devoted by the Shared Employees and certain other Company
employees to NASCAR's affairs, and (iii) the amounts charged or paid to NASCAR
for office rental, transportation costs, shared executives, administrative
expenses and similar items.

Competition

The Company's racing events face competition from other spectator-oriented
sporting events and other leisure and recreational activities, including
professional football, basketball and baseball. As a result, the Company's
revenues will be affected by the general popularity of motorsports, the
availability of alternative forms of recreation and changing consumer
preferences. The Company's racing events also compete with other racing events
sanctioned by various racing bodies such as NASCAR, Championship Auto Racing
Teams, Inc. ("CART"), Indy Racing League ("IRL"), the United States Auto Club
("USAC"), the National Hot Rod Association ("NHRA"), the Sports Car Club of
America ("SCCA"), the United States Road Racing Championship ("USRRC"), the
Automobile Racing Club of America ("ARCA") and others. Management believes that
the primary elements of competition in attracting motorsports spectators and
corporate sponsors to a racing event and facility are the type and caliber of
promoted racing events, facility location, sight lines, pricing and customer
conveniences that contribute to a total entertainment experience.

Many sports and entertainment businesses have resources that exceed those of
the Company.

Impact of Consumer Spending on Results

The success of the Company's operations depends to a significant extent
upon a number of factors relating to discretionary consumer spending, including
economic conditions affecting disposable consumer income such as employment,
business conditions, interest rates and taxation. These factors can impact both
attendance at the Company's events and the financial results of the motorsports
industry's principal sponsors. There can be no assurance that consumer spending
will not be adversely affected by economic conditions, thereby impacting the
Company's growth, revenue and profitability.

Financial Impact of Bad Weather

The Company promotes outdoor motorsports events. Weather conditions affect
sales of, among other things, tickets, concessions and souvenirs at these
events. Although the Company sells tickets well in advance of its most popular
events, poor weather conditions could have a material adverse effect on the
Company's results of operations, particularly any interruption of the Company's
February "Speedweeks" events.

Liability For Personal Injuries

Motorsports can be dangerous to participants and to spectators. The Company
maintains insurance policies that provide coverage within limits that
management believes should generally be sufficient to protect the Company from
material financial loss due to liability for personal injuries sustained by
persons on the Company's premises in the ordinary course of Company business.
Nevertheless, there can be no assurance that such insurance will be adequate or
available at all times and in all circumstances. The Company's financial
condition and results of operations would be adversely affected to the extent
claims and associated expenses exceed insurance recoveries.

Other Regulatory Matters

Management believes that the Company's operations are in substantial
compliance with all applicable federal, state and local environmental laws and
regulations. Nonetheless, if damage to persons or property or contamination of
the environment is determined to have been caused or exacerbated by the conduct
of the Company's business or by pollutants, substances, contaminants or wastes
used, generated or disposed of by the Company, or which may be found on the
property of the Company, the Company may be held liable for such damage and may
be required to pay the cost of investigation and/or remediation of such
contamination or any related damage. The amount of such liability as to which
the Company is self-insured could be material. State and local laws relating to
the protection of the environment also include noise abatement laws that may be
applicable to the Company's racing events. Changes in the provisions or
application of federal, state or local environmental laws, regulations or
requirements, or the discovery of theretofore unknown conditions, could also
require additional material expenditures by the Company.

In addition, the development of new motorsports facilities (and, to a
lesser extent, the expansion of existing facilities) requires compliance with
applicable federal, state and local land use planning, zoning and environmental
regulations. Regulations governing the use and development of real estate may
prevent the Company from acquiring or developing prime locations for
motorsports facilities, substantially delay or complicate the process of
improving existing facilities, and/or materially increase the costs of any of
such activities.

Seasonality and Quarterly Results

The Company derives most of its income from event admissions and related
revenue from a limited number of NASCAR-sanctioned races. As a result, the
Company's business has been, and is expected to remain, highly seasonal based
on the timing of major events. For example, one of Darlington Raceway's
Winston Cup Series events is traditionally held on the Sunday preceding Labor
Day. Accordingly, the revenue and expenses for that race and/or the related
supporting events may be recognized in either the fiscal quarter ending August
31 or the fiscal quarter ending November 30. Further, in July 1998 the Company
announced the postponement of the NASCAR Winston Cup Series Pepsi 400 at
Daytona from July 4, 1998 to October 17, 1998 as a result of the nationally
publicized forest fire emergency throughout the state of Florida. The
rescheduling of the Pepsi 400 at Daytona resulted in event-related revenues and
expenses being recognized in the quarter ending November 30, 1998 while
corresponding revenues and expenses have historically been recognized in the
quarter ending August 31. Accordingly, the Company's results of operations are
not necessarily comparable on a period-to-period basis.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The Company's interest income and expense are most sensitive to changes in the
general level of U.S. interest rates. In this regard, changes in U. S.
interest rates affect the interest earned on the Company's cash equivalents,
short term investments and restricted investments, as well as interest paid on
its debt.

The objective of the Company's asset management activities is to provide an
adequate level of interest income and liquidity to fund operations and capital
expansion, while minimizing market risk. The Company utilizes short term
investments consisting of certificates of deposit and obligations of U.S.
Government agencies and municipal securities to minimize the interest rate
risk. The Company does not believe that its interest rate risk related to its
cash equivalents and short term investments is material due to the short term
nature of the investments.

In January 1999, the Unified Government of Wyandotte County/Kansas City, Kansas
("Unified Government") issued approximately $71.3 million in taxable special
obligation revenue ("TIF") bonds in connection with the financing of the
construction of the speedway in Kansas. The TIF bonds are serviced through
payments by the Unified Government, which are funded through payments made by
the Company to the Unified Government in lieu of property taxes. The TIF bonds
are comprised of a $26.1 million, fixed rate (6.15%) term bond due December 1,
2017 and a $49.7 million fixed rate (6.75%) term bond due December 1, 2027.
The proceeds from the TIF bonds, along with the Company's equity commitment to
the Kansas City track were deposited in a trust account and are classified as
restricted investments on the Company's balance sheet. The trust account has
invested the funds in a guaranteed investment contract earning an interest rate
of approximately 4.75%.

Additionally, the Company maintained its certificates of deposit with one
financial institution at May 31, 1999. The Company believes that it is not
exposed to any significant credit risk on its certificates of deposit due to
the strength of the financial institution and the short term nature of the
certificates of deposit.

<PAGE>
<PAGE>
PART II - OTHER INFORMATION

Item 1. Legal Proceedings

The Company is from time to time a party to routine litigation incidental to
its business. Management does not believe that the resolution of any or all of
such litigation is likely to have a material adverse effect on the Company's
financial condition or results of operations. In addition to such routine
litigation incident to its business the Company faces exposure from other legal
proceedings as described below.

Management is presently unable to predict or quantify the outcome of these
matters

Item 6. Exhibits and Reports on Form 8-K

a. Exhibits

I. (27) - Article 5 Fin. Data Schedule for 2nd Qtr 10-Q

<PAGE>
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

INTERNATIONAL SPEEDWAY CORPORATION
(Registrant)

Date July 15, 1999 /s/ James C. France
_____________________________________
James C. France, President

Date July 15, 1999 /s/ Susan G. Schandel
_____________________________________
Susan G. Schandel,
Chief Financial Officer

<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE ACCOMPANYING CONDENSED CONSOLIDATED BALANCE SHEET OF INTERNATIONAL
SPEEDWAY CORPORATION AS OF MAY 31, 1999, AND THE RELATED CONDENSED
CONSOLIDATED STATEMENTS OF INCOME, SHAREHOLDERS' EQUITY AND CASH FLOWS FOR THE
SIX-MONTH PERIOD ENDED MAY 31, 1999, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
<MULTIPLIER> 1,000

<S> <C>
<FISCAL-YEAR-END> Nov-30-1999
<PERIOD-START> Dec-01-1998
<PERIOD-END> May-31-1999
<PERIOD-TYPE> 6-MOS
<CASH> 32,448
<SECURITIES> 64,177
<RECEIVABLES> 11,681
<ALLOWANCES> 500
<INVENTORY> 1,534
<CURRENT-ASSETS> 114,419
<PP&E> 330,396
<DEPRECIATION> 72,504
<TOTAL-ASSETS> 582,376
<CURRENT-LIABILITIES> 81,805
<BONDS> 0
0
0
<COMMON> 431
<OTHER-SE> 397,096
<TOTAL-LIABILITY-AND-EQUITY> 582,376
<SALES> 127,041
<TOTAL-REVENUES> 127,871
<CGS> 50,314
<TOTAL-COSTS> 50,314
<OTHER-EXPENSES> 27,737
<LOSS-PROVISION> 383
<INTEREST-EXPENSE> 925
<INCOME-PRETAX> 53,142
<INCOME-TAX> 20,359
<INCOME-CONTINUING> 32,783
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 32,783
<EPS-BASIC> .76
<EPS-DILUTED> .76

</TABLE>