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 August 31, 2000.

INTERNATIONAL SPEEDWAY CORPORATION

(Exact name of registrant as specified in its charter)

FLORIDA	O-2384	59-0709342
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

1801 WEST INTERNATIONAL SPEEDWAY BOULEVARD, DAYTONA BEACH, FLORIDA	32114
(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 - 23,520,457 shares as of September 30, 2000.

Class B Common Stock – 29,624,713 shares as of September 30, 2000

PART I . FINANCIAL INFORMATION

Item 1. Financial Statements

See accompanying notes.

INTERNATIONAL SPEEDWAY CORPORATION Condensed Consolidated Statements of Income
	Three Months ended
	August 31, 1999	August 31, 2000
	(Unaudited)
	(In Thousands, Except Per Share Data)
REVENUES:
Admissions, net	$      31,857	$    49,615
Motorsports related income	22,356	36,935
Food, beverage and merchandise income	11,600	19,704
Other income	413	921
	66,226	107,175
EXPENSES:
Direct expenses:
Prize and point fund monies and NASCAR sanction fees	8,803	14,171
Motorsports related expenses	10,958	21,380
Food, beverage and merchandise expenses	6,630	12,247
General and administrative expenses	16,608	19,275
Depreciation and amortization	6,405	12,617
	49,404	79,690
Operating income	16,822	27,485
Interest income	2,070	1,443
Interest expense	(1,586)	(7,406)
Equity in net (loss) income from equity investments	(1,006)	477
Minority interest	77	238
North Carolina Speedway litigation (Note 5)	-	-
Income before income taxes	16,377	22,237
Income taxes	6,742	9,454
Net income	$        9,635	$     12,783
Basic earnings per share	$0.21	$ 0.24
Diluted earnings per share	$0.20	$ 0.24
Dividends per share	$0.00	$ 0.00
Basic weighted average shares outstanding	46,917,080	52,967,222
Diluted weighted average shares outstanding	47,040,272	53,050,983

See accompanying notes.

 

See accompanying notes

INTERNATIONAL SPEEDWAY CORPORATION
Condensed Consolidated Statements of Shareholders' Equity
	CLASS A COMMON STOCK $.01 PAR VALUE	CLASS B COMMON STOCK $.01 PAR VALUE	ADDITIONAL PAID-IN CAPITAL	RETAINED EARNINGS	UNEARNED COMPENSATION- RESTRICTED STOCK	TOTAL SHAREHOLDERS’ EQUITY
	(In Thousands)
BALANCE AT NOVEMBER 30, 1998	$115	$316	$205,089	$163,201	$(1,866)	$366,855
Activity 12/1/98- 8/31/99 - unaudited:
Net income	-	-	-	42,418	-	42,418
Issuance of common stock for PMI       acquisition	100	-	480,472	-	-	480,572
Cash dividends ($.06 per share)	-	-	-	(2,586)	-	(2,586)
Change in equity investment	-	-	(90)	-	-	(90)
Restricted stock grant	-	-	1,035	-	(1,035)	-
Reacquisition of previously issued common       stock	-	-	(314)	(796)	-	(1,110)
Conversion of Class B Common Stock to      Class A  Common Stock	13	(13)	-	-	-	-
Income tax benefit related to restricted stock        plan	-	-	1,129	-	-	1,129
Amortization of unearned compensation	-	-	-	-	798	798
BALANCE AT AUGUST 31, 1999 –     unaudited	228	303	687,321	202,237	(2,103)	887,986
Activity 9/1/99 - 11/30/99 - unaudited:
Net income	-	-	-	14,195	-	14,195
Conversion of Class B Common Stock to       Class A Common Stock	1	(1)	-	-	-	-
Amortization of unearned compensation	-	-	-	-	289	289
BALANCE AT NOVEMBER 30, 1999	229	302	687,321	216,432	(1,814)	902,470
Activity 12/1/99- 8/31/00 - unaudited:
Net income	-	-	-	32,602	-	32,602
Cash dividends ($.06 per share)	-	-	-	(3,188)	-	(3,188)
Restricted stock grant	1	-	1,977	-	(1,978)	-
Reacquisition of previously issued common        stock	-	-	(354)	(824)	-	(1,178)
Conversion of Class B Common Stock to        Class A  Common Stock	5	(5)	-	-	-	-
Income tax benefit related to restricted stock        plan	-	-	1,170	-	-	1,170
Amortization of unearned compensation	-	-	-	-	843	843
BALANCE AT AUGUST 31, 2000 –      unaudited	$235	$297	$690,114	$245,022	$(2,949)	$932,719

See accompanying notes.

INTERNATIONAL SPEEDWAY CORPORATION
Condensed Consolidated Statements of Cash Flows
	Nine months ended
	August 31, 1999	August 31, 2000
	(Unaudited)
	(In Thousands)
OPERATING ACTIVITIES
Net income	$ 42,418	$ 32,602
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	13,936	37,924
Amortization of unearned compensation	798	843
Amortization of financing costs	34	1,066
Deferred income taxes	5,070	7,335
Undistributed loss from equity investments	1,472	552
Minority interest	(77)	(537)
Changes in operating assets and liabilities:
Receivables, net	(5,997)	(14,504)
Inventories, prepaid expenses and other assets	(1,496)	(10,398)
Accounts payable and other current liabilities	6,580	(8,312)
Deferred income	12,372	56,294
Income taxes payable	(5,088)	3,580
Net cash provided by operating activities	70,022	106,445
INVESTING ACTIVITIES
Change in short-term investments, net	53,946	690
Capital expenditures	(75,387)	(85,340)
Acquisition, net of cash acquired	(134,274)	(215,627)
Equity investments	(11,038)	(11,289)
Advances to affiliate	-	(4,313)
Change in restricted investments, net	(42,746)	245,094
Other, net	(119)	(790)
Net cash used in investing activities	(209,618)	(71,575)
FINANCING ACTIVITIES
Net payments under credit facilities	-	(16,000)
Payment of long-term debt	(74,876)	(2,500)
Proceeds from long-term debt	240,174	-
Reacquisition of previously issued common stock	(1,110)	(1,178)
Cash dividends paid	(2,586)	(3,188)
Other	(1,572)	(320)
Net cash provided by (used in) financing activities	160,030	(23,186)
Net increase in cash and cash equivalents	20,434	11,684
Cash and cash equivalents at beginning of period	38,676	37,811
Cash and cash equivalents at end of period	$ 59,110	$49,495

See accompanying notes.

International Speedway Corporation

Notes to Condensed Consolidated Financial Statements

November 30, 1999 and August 31, 2000

(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 majority-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 August 31, 2000.

Statement of Financial Accounting Standards (“SFAS”) No. 131, "Disclosures about Segments of an Enterprise and Related Information", became effective for the Company in 1999.  SFAS No. 131 establishes standards for the way that public business enterprises report information about operating segments in annual financial statements and interim financial reports. (See Note 7)

Earnings per share - Basic and diluted earnings per share are calculated in accordance with SFAS No. 128, "Earnings Per Share". The difference between basic weighted average shares and diluted weighted average shares is related to shares issued under the Company's long-term incentive stock plans, using the treasury stock method as prescribed by the standard.

Because of the seasonal concentration of racing events and the acquisitions in July and December 1999 (See Note 2), the results of operations for the three- and nine-month periods ended August 31, 1999 and 2000 are not indicative of the results to be expected for the year.

2.             Acquisitions

On July 26, 1999, the Company acquired the approximately 88%, or 12.2 million outstanding common shares, of Penske Motorsports, Inc. ("PMI") stock that it did not already own for approximately $129.8 million and 10,029,861 shares of the Company’s Class A Common Stock. Transaction costs, net of cash acquired in the transaction, totaled approximately $3.6 million. The total cash and stock consideration issued in the transaction was approximately $611.1 million.

Motorsports facilities acquired in the transaction include Michigan International  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 also acquired PMI’s 45% interest in Homestead-Miami Speedway, LLC ("Miami"), bringing the Company’s ownership in the operations of that facility to 90%, as well as other PMI merchandising subsidiaries. The acquisition has been accounted for under the purchase method of accounting and, accordingly, the results of operations of the former PMI, as well as Miami, have been included in the Company’s consolidated statements of income as of the date of acquisition.

The transaction purchase price has been allocated to the assets and liabilities of PMI and Miami based upon their fair market values at the acquisition date. The excess of the purchase price over the fair value of the net assets acquired has been allocated as goodwill of approximately $512.9 million and assembled workforce of approximately $1.5 million, which are being amortized on a straight line basis over 40 years and five years, respectively. The amount amortized during the three- and nine-month periods ended August 31, 2000 was approximately $3.3 million and $10.0 million, respectively, and $1.1 million during the three- and nine-month periods ended August 31, 1999, respectively.

On December 1, 1999, the Company acquired Richmond International Raceway ("Richmond") for approximately $215.6 million, including acquisition costs. The Richmond acquisition has been accounted for under the purchase method of accounting and, accordingly, the results of operations have been included in the Company's consolidated statements of income since the date of acquisition.

The purchase price was allocated to the assets and liabilities acquired based upon their fair market values at the acquisition date. The excess of the purchase price over the fair value of the net assets acquired was approximately $169.3 million and was recorded as goodwill, which is being amortized on a straight line basis over 40 years. The amount amortized during the three- and nine-month periods ended August 31, 2000 was approximately $1.1 million and $3.2 million, respectively.

As a result of the PMI and Richmond acquisitions, at August 31, 2000 the Company operates 11 major motorsports facilities across the United States.

The following unaudited pro forma financial information presents a summary of consolidated results of operations as if the PMI and Richmond acquisitions had occurred as of December 1, 1998 after giving effect to certain adjustments, including depreciation, amortization of goodwill, interest income, interest expense, equity earnings, minority interest and the related income tax effects. The pro forma results have been prepared for comparative purposes only and do not purport to be indicative of what would have occurred had the acquisition been made on that date, nor are they necessarily indicative of results which may occur in the future.

	(Proforma - unaudited) Nine Months Ended ___August 31, 1999_____ (In Thousands, Except Per Share Data)
Total revenues	$ 288,233
Net income	31,247
Basic income per share	0.59
Diluted income per share	0.59

3.              Long-Term Debt

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

	November 30, 1999	August 31, 2000
Senior Notes, net of discount of $338 and $286	$ 224,662	$ 224,714
Credit facilities	169,500	153,500
TIF bond debt service funding commitment, net of  discount of $1,645 and $1,585	69,010	69,070
Term debt	30,000	27,500
Notes payable	5,550	5,550
	498,722	480,334
Less current portion	2,655	4,155
	$ 496,067	$ 476,179

On October 6, 1999, the Company completed an offering of $225 million principal amount of senior notes ("Senior Notes") due October 15, 2004 in a private placement. The unsecured Senior Notes bear interest at 7.875% and rank equally with all of the Company’s other senior unsecured and unsubordinated indebtedness. The Senior Notes require semi-annual interest payments through maturity on October 15, 2004. The Senior Notes may be redeemed in whole or in part, at the option of the Company, at any time or from time to time at a redemption price as defined in the indenture. Certain of the Company’s subsidiaries are guarantors of the Senior Notes (See Note 8). The Senior Notes also contain various restrictive covenants. On March 17, 2000, the Company completed an offer to exchange the Senior Notes issued in the private placement for registered senior notes with substantially identical terms.

The total gross proceeds from the sale of the Senior Notes were $225 million, net of $349,000 discount and approximately $4.7 million of deferred financing fees. The deferred financing fees are being amortized over the life of the Senior Notes on an effective yield method.

In December, 1999, the Company's revolving credit facility ("Credit Facility") was increased from $200 million to $250 million. The Credit Facility matures on March 31, 2004, and accrues interest at LIBOR plus 50 -100 basis points. At August 31, 2000, the Company had borrowings of $140 million under the Credit Facility, which related to the financing of the Company's December 1999 Richmond acquisition (See Note 2). The Credit Facility contains various restrictive covenants.

In May 2000, the Company’s Miami subsidiary amended its credit agreement for a $20 million credit facility (“Miami Credit Facility”) and a $27.5 million term loan (“Term Loan”). The Miami Credit Facility and Term Loan are guaranteed by the Company and have the same interest terms and restrictive covenants as the Company’s Credit Facility. The Miami Credit Facility will be automatically reduced to $15 million on December 31, 2002 and will   mature on December 31, 2004. At August 31, 2000, the Company had borrowings of $13.5 million under the Miami Credit Facility. The Term Loan is payable in annual installments which range from $4.0 million to $7.0 million. The Company has an interest rate swap agreement that effectively fixes the floating rate on the outstanding balance under the Term Loan at 6.1% through December 31, 2000 and 6.6% for the remainder of the loan period.

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 construction of the speedway in Kansas. The net proceeds were deposited into separate interest-bearing trust accounts. The STAR bonds will be retired with state and local taxes generated within the project’s boundaries and are not an obligation of the Company. The TIF bonds are comprised of a $21.6 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 repaid by the Unified Government with payments made in lieu of property taxes (“Funding Commitment”) by the Company’s wholly-owned subsidiary, Kansas Speedway Corporation (“KSC”). Principal (mandatory redemption) payments per the Funding Commitment are payable by KSC on October 1 of each year. The semi-annual interest component of the Funding Commitment is payable on April 1 and October 1 of each year. KSC granted a mortgage and security interest in the Kansas project for its Funding Commitment obligation. The bond financing documents contain various restrictive covenants.   The Company has agreed to guarantee KSC’s Funding Commitment until certain financial conditions have been met.

Simultaneous with the issuance of the STAR and TIF bonds, KSC deposited into a trust account the unexpended portion of its initial $77.9 million equity commitment to the Kansas project. The unexpended portions of the TIF bond proceeds and KSC’s equity contribution 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.

Total interest incurred by the Company was approximately $1.6 million and $7.4 million for the three months ended August 31, 1999 and 2000, respectively, and $2.5 million and $23.3 million for the nine months ended August 31, 1999 and 2000, respectively. Total interest capitalized for the three months ended August 31, 1999 and 2000 was approximately $858,000 and $2.3 million, respectively, and $1.8 million and $5.6 million for the nine months ended August 31, 1999 and 2000, respectively.

Financing costs of approximately $11.0 million, net of accumulated amortization, have been deferred and are included in other assets at August 31, 2000. These costs are being amortized on an effective yield method over the life of the related financing.

4.             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"), Championship Auto Racing Teams ("CART"), the Federation Internationale de l'Automobile ("FIA"), the Grand American Road Racing Association ("GARRA"), 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"), 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 $8.8 million and $24.2 million for the three- and nine-month periods ended August 31, 1999, respectively, and approximately $11.1 million and $37.9 million for the three- and nine-month periods ended August 31, 2000, respectively.

5.              Legal Proceedings

Souvenir Litigation

As described below, the Company and certain subsidiaries were parties to legal proceedings alleging price-fixing activities in connection with the sale of souvenirs and merchandise which have been settled, the settlements have been given final approval by the courts and final orders have been entered in the legal proceedings on August 25, 2000. These matters are collectively referred to as the Souvenir Litigation.

The Company's indirect corporate subsidiary, Americrown Service Corporation ("Americrown"), was the sole defendant in a class action proceeding in the Circuit Court of Talladega County, Alabama which was filed in October 1996. A class consisting of persons who purchased racing souvenirs at Talladega Superspeedway since September 1992 was certified by the court on July 30, 1998. That suit sought to recover at least $500 for each member of the class but did not otherwise seek to recover compensatory or punitive damages or statutory attorneys' fees. 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 (including Motorsports International Corp. ("Motorsports International"), previously a subsidiary of PMI which was acquired by the Company in the PMI Acquisition). Both suits sought 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 since 1991.

Recently Americrown, Motorsports International and the Company entered into Settlement Agreements to completely settle the Souvenir Litigation, without any admission of wrongdoing on their part. Under the terms of the Settlement Agreements (which were given final approval by the respective courts on August 25, 2000) the Company, Americrown and Motorsports International have paid approximately $4.6 million in cash and agreed to redeem $6 million in souvenir merchandise discount coupons to settle with classes which encompass all purchasers of souvenirs and merchandise at NASCAR Winston Cup events during the period from January 1, 1991 to August 25, 2000. In the third quarter of fiscal 1999 the Company accrued approximately $2.8 million representing Americrown's cash portion of the proposed Souvenir Litigation settlement. The remaining $1.8 million is attributable to Motorsports International and was recorded as a part of the PMI merger purchase price. The effects of the discount coupon program will be recognized in future periods as coupons are redeemed. The cash payments have already been remitted.

North Carolina Speedway Litigation

In connection with PMI's acquisition of North Carolina Speedway in 1997, certain of the North Carolina Speedway stockholders (constituting more than 5% of the North Carolina Speedway shares outstanding prior to the acquisition) exercised their right under North Carolina law to dissent to the price paid for the common stock of North Carolina Speedway. These dissenting shareholders were originally paid $16.77 per share. These dissenters requested $55.00 per share and sued PMI, Penske Acquisition, Inc. and North Carolina Speedway in North Carolina Superior Court, Mecklenburg County, North Carolina. Under PMI's agreement with Mrs. DeWitt (the former majority stockholder of North Carolina Speedway), if a dissenting stockholder, which represented more than five percent of the North Carolina Speedway stock, received more consideration in a dissenters' action than PMI paid in connection with the acquisition of North Carolina Speedway, all stockholders of North Carolina Speedway at the time of the acquisition, other than PMI and its affiliates, would receive a per share amount equal to the award in dissenter's court less the per share amount paid in the acquisition ($19.61 per share to stockholders other than the dissenting shareholders). Because PMI acquired Mrs. DeWitt's shares prior to the completion of this acquisition, Mrs. DeWitt is not entitled to receive additional consideration for her shares.

On April 25, 2000, jurors in the North Carolina Speedway Dissenter’s Action case returned a verdict upon which a judgment was entered which entitled the dissenting shareholders to $23.47 per share, an amount $3.86 to $6.70 higher than the original consideration. The financial statements for the fiscal 2000 second quarter included an accrual of approximately $5.5 million, representing the judgment and related interest, amounts due to non-dissenting former shareholders and related legal fees.  In June 2000, substantially all of the amounts related to this judgment were paid by the Company.

6.             Long-Term Incentive Plans

On April 1, 1999 and 2000, a total of 19,633 and 44,017 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 $1.0 million and $2.0 million, 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 nine months ended August 31, 1999, and 2000 was approximately $798,000 and $843,000, respectively.

On April 5, 2000, a total of 11,030 options to purchase the Company’s Class A Common Stock, at an exercise price of $44.50 per share, were granted under the 1996 plan to certain non-employee Directors for their services as Directors. These options do not become exercisable until April 5, 2001, and expire on April 5, 2010.

7.              Segment Reporting

The following table provides segment reporting of the Company for the three- and nine-month periods ended August 31, 1999 and 2000:

	Three Months ended		Nine Months ended
	August 31, 1999	August 31, 2000	August 31, 1999	August 31, 2000
		(In Thousands)
Revenues:
Motorsports Events	$   55,220	$    91,656	$ 171,161	$    282,309
All Other	11,854	17,014	25,753	40,099
Total	$   67,074	$ 108,670	$ 196,914	$    322,408
Operating Income:
Motorsports Events	$    14,892	$    25,516	$    63,213	$      81,358
All Other	1,930	1,969	3,429	3,544
Total	$    16,822	$    27,485	$    66,642	$      84,902

	As of
	November 30, 1999	August 31, 2000
	(In Thousands)
Total Assets:
Motorsports Events	$1,547,510	$1,616,293
All Other	51,617	49,224
Total	$1,599,127	$1,665,517

Intersegment revenues were approximately $ 848,000 and $1.5 million for the three months ended August 31, 1999 and 2000, respectively, and $2.8 million and $4.9 million for the nine months ended August 31, 1999 and 2000, respectively.

8.             Condensed Consolidating Financial Statements

The following tables present the required condensed consolidating financial information for the Company and its subsidiary guarantors and non-guarantors.  During the nine-months ending August 31,2000, certain operations of the Company were segregated into wholly-owned guarantor subsidiaries of the Company.  As a result, the financial position, results of operations and cash flows of the Company in relation to its wholly-owned guarantor subsidiaries are not comparable on a period-to-period basis.

Included are condensed consolidating balance sheets as of August 31, 2000 and November 30, 1999, the condensed consolidating statements of income for the three- and nine-month periods ended August 31, 2000 and 1999, and the condensed consolidating statements of cash flows for the nine-month periods ended August 31, 2000 and 1999 of: (a) the Parent; (b) the guarantor subsidiaries; (c) the non-guarantor subsidiaries; (d) elimination entries necessary to consolidate Parent with guarantor and non-guarantor subsidiaries; and (e) the Company on a consolidated basis.

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 merchandising services during or as a result of such events and activities.

"Admissions" revenue includes ticket sales for all of the Company’s racing events and activities at DAYTONA USA. Admissions revenue for racing events is recognized 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’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. The Company has historically negotiated directly with television and cable networks for coverage of substantially all of its televised NASCAR events. NASCAR retained these television and ancillary media rights in sanction agreements beginning with the 2000 racing season, but agreed to allow existing agreements with television and cable networks to be honored. NASCAR then reached agreement with all of the television broadcasters of these events to release their contractual rights beginning with the 2001 racing season. In November 1999, NASCAR announced that it had reached an agreement on a six-year television contract with NBC Sports and Turner Sports, with the two media companies combining to develop a joint venture. In addition, NASCAR announced that it had reached an agreement on an eight-year television contract with FOX and its FX cable network. Both agreements relate solely to the domestic broadcast television rights to NASCAR's Winston Cup Series and Busch Series, Grand National Division events, and are effective beginning with the 2001 racing season. In January 2000, NASCAR announced that the total current estimate for television revenue in the year 2001 would be approximately $244 million with increases, on average, of approximately 17% per year through the 2006 season. This television revenue estimate for 2001 was based on the entire existing 2000 NASCAR Winston Cup Series and NASCAR Busch Series, Grand National Division schedules. Based upon information available after the announcement of the new NASCAR Winston Cup Series and NASCAR Busch Series, Grand National Division events for 2001 at the Chicagoland Speedway and the Kansas Speedway Corporation facility, the Company presently estimates the total television revenue for 2001 to be approximately $258 million. The percentage of television broadcast rights fees that the Company currently retains from each contract will be the same under the future arrangement.

"Food, beverage and merchandise income" includes revenues from concession stands, hospitality catering, direct sales of souvenirs, programs and other merchandise, fees paid by third party vendors for the right to occupy space to sell souvenirs and concessions at the Company’s facilities, and the wholesale and retail sale of racing tires and accessories for various types of racing events.

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 merchandise 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:

	Three Months ended August 31,		Nine Months Ended August 31,
	1999 (Unaudited)	2000 (Unaudited)	1999 (Unaudited)	2000 (Unaudited)
Revenues:
Admissions, net	48.1%	46.3%	46.4%	44.5%
Motorsports related income	33.8	34.4	37.5	38.1
Food, beverage and merchandise income	17.5	18.4	15.4	16.4
Other income	0.6	0.9	0.7	1.0
Total revenues	100.0%	100.0%	100.0%	100.0%
Expenses:
Direct expenses:
Prize and point fund monies and  NASCAR sanction fees	13.3	13.2	14.6	15.2
Motorsports related expenses	16.5	20.0	16.7	19.0
Food, beverage and merchandise  expenses	10.0	11.4	8.2	9.6
General and administrative expenses	25.1	18.0	19.0	17.6
Depreciation and amortization	9.7	11.8	7.2	11.9
Total expenses	74.6	74.4	65.7	73.3
Operating income	25.4	25.6	34.3	26.7
Interest income	3.1	1.4	3.5	1.5
Interest expense	(2.4)	(6.9)	(1.3)	(7.3)
Equity in net (loss) income from equity  investments	(1.5)	0.5	(0.8)	(0.2)
Minority interest	0.1	0.2	0.1	0.2
North Carolina Speedway litigation	-	-	-	(1.7)
Income before income taxes	24.7	20.8	35.8	19.2
Income taxes	10.1	8.9	13.9	8.9
Net income	14.6%	11.9%	21.9%	10.3%

Seasonality and Quarterly Results

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.

On July 26, 1999, the Company acquired the approximately 88% interest it did not already own in Penske Motorsports, Inc. ("PMI"). Motorsports facilities acquired in the transaction include Michigan International Speedway in Brooklyn, Michigan (“Michigan”); Nazareth Speedway in Nazareth, Pennsylvania; California Speedway in San Bernardino County, California; and North Carolina Speedway in Rockingham, North Carolina. The Company also acquired PMI’s 45% interest in Homestead-Miami Speedway, LLC ("Miami"), bringing the Company’s ownership in the operations of that facility to 90%, as well as other PMI merchandising subsidiaries. In addition, on December 1, 1999 the Company acquired Richmond International Raceway ("Richmond") which is located ten miles from downtown Richmond, Virginia (See "Acquisition" under Liquidity and Capital Resources). The Company currently operates 11 major motorsports facilities across the United States with more than 900,000 seats and 400 suites.

In addition to the incremental operating expenses and depreciation and amortization resulting from these transactions, the acquisitions of PMI and Richmond resulted in the inclusion of the following additional events during the nine months ended August 31, 2000 as compared to the same period of the prior year; four NASCAR Winston Cup Series events (one of which was conducted during the Company’s third fiscal quarter), four NASCAR Busch Series, Grand National Division events (one of which was conducted during the Company’s third fiscal quarter), three NASCAR Craftsman Truck Series events (two of which were conducted during the Company’s third fiscal quarter),  and three Championship Auto Racing Teams (“CART”) FedEx Championship Series events (one of which was conducted during the Company’s third fiscal quarter).  As a result of these incremental revenues and expenses and the addition of a NASCAR Craftsman Truck Series event at Daytona International Speedway (“Daytona”) during the Company’s first fiscal quarter, the Company’s results of operations, as well as the margins of certain expenses in relation to certain revenues, are not comparable on a period-to-period basis.

In May 2000, NASCAR and the Indy Racing League ("IRL") announced that both the Kansas and Chicagoland speedways were awarded three major events for their inaugural seasons in 2001.   Both facilities will host a NASCAR Winston Cup Series event, NASCAR Busch Series, Grand National Division event and an Indy Racing Northern Light Series event.   In June 2000, IRL announced additional Indy Racing Northern Light Series events to be hosted by Miami as well as Richmond starting in 2001.   Separately, CART announced its CART FedEx Championship Series would not return to Miami in 2001.  More recently, the Company announced that the Kansas speedway and Darlington Raceway were awarded NASCAR Craftsman Truck Series events for the 2001 season and that, due to scheduling conflicts, the NASCAR Craftsman Truck Series event at Michigan will be removed from its 2001 schedule.  As a result of these changes the fiscal 2000 and 2001 quarters will not necessarily be comparable on a period-to-period basis.

Comparison of the results for the three and nine months ended August 31, 2000 to the results for the three and nine months ended August 31, 1999.

Admissions revenue increased approximately $17.8 million, or 55.7%, for the three months ended August 31, 2000, as compared to the three months ended August 31, 1999.  Over three-quarters of the increase is a result of the events conducted at the Company’s newly acquired facilities during the period in which there were no comparable events in the prior year.  The remaining increase is attributable to the increased seating capacity and attendance for the August 2000 NASCAR Winston Cup Series event at Michigan and, to a lesser extent, an increase in the weighted average price of tickets sold for the August 2000 events conducted at Michigan and the Pepsi 400 at Daytona.

Admissions revenue increased approximately $51.1 million, or 56.7%, for the nine months ended August 31, 2000, as compared to the nine months ended August 31, 1999.  Over three-quarters of the increase is a result of the events conducted at the Company’s newly acquired facilities during the period in which there were no comparable events in the prior year.  The remaining increase is primarily attributable to an increase in seating capacity and attendance, as well as an increase in the weighted average price of tickets sold for the Speedweeks events at Daytona and events conducted at Talladega Superspeedway (“Talladega”) and Michigan.  To a lesser extent, a higher weighted average price of tickets sold for the Pepsi 400 at Daytona contributed to the increase.

Motorsports related income increased approximately $14.6 million, or 65.2%, for the three months ended August 31, 2000, as compared to the three months ended August 31, 1999.  Approximately three-quarters of the increase is a result of the events conducted at the Company’s newly acquired facilities during the period in which there were no comparable events in the prior year.  The remaining increase is attributable to increases in television broadcast rights fees for events conducted at Watkins Glen International (“Watkins Glen”), Daytona  and Michigan and, to a lesser extent, sponsorship fees, advertising and luxury suite and hospitality rentals at events conducted at Daytona and Michigan.

 

Motorsports related income increased approximately $48.1 million, or 66.1%, for the nine months ended August 31, 2000, as compared to the nine months ended August 31, 1999.  Approximately three-quarters of the increase is a result of the events conducted at the Company’s newly acquired facilities during the period in which there were no comparable events in the prior  year.  The remaining increase is primarily attributable to increased television broadcast rights fees, sponsorships and expanded luxury suite and hospitality facilities for the Speedweeks events at Daytona and, to a lesser extent, events at the Company’s other facilities.

Food, beverage and merchandise income increased approximately $8.1 million, or 69.9%, for the three months ended August 31, 2000, as compared to the three months ended August 31, 1999.  Virtually all of the increase is attributable to the sales of racing tires, accessories and other merchandise by subsidiaries acquired from PMI as well as food, beverage and merchandise operations for events at the Company ’s newly acquired facilities during the period in which there were no comparable events in the prior year. 

 

Food, beverage and merchandise income increased approximately $22.3 million, or 74.4%, for the nine months ended August 31, 2000, as compared to the nine months ended August 31, 1999.  Over three-quarters of the increase is attributable to the sales of racing tires, accessories and other merchandise by subsidiaries acquired from PMI as well as food, beverage and merchandise operations for events at the Company’s newly acquired facilities during the period in which there were no comparable events in the prior year.  Increased attendance and seating capacity for Speedweeks at Daytona and, to a lesser extent, events at the Company’s other facilities contributed to the remaining increase.

Other income increased approximately $508,000, or 123.0%, and $1.9 million, or 152.5%, for the three months and nine months ended August 31, 2000, respectively, as compared to the same period of the prior year.  The increase is primarily attributable to rental income from the Company’s newly acquired facilities.

Prize and point fund monies and NASCAR sanction fees increased approximately $5.4 million, or 61.0%, for the three months ended August 31, 2000, as compared to the three months ended August 31, 1999.  Over three-quarters of the increase is related to events conducted at the Company’s newly acquired facilities during the period in which there were no comparable expenses in the prior year.  The remaining increase is primarily attributable to the increased television broadcast rights fees for events conducted at Watkins Glen, Daytona and the August events at Michigan as standard NASCAR sanctioning agreements require that a specified percentage of broadcast rights fees be paid as part of prize money.

Prize and point fund monies and NASCAR sanction fees increased approximately $20.1 million, or 71.1%, for the nine months ended August 31, 2000, as compared to the nine months ended August 31, 1999.  Over three-quarters of this increase was attributable to the events conducted at the Company’s newly acquired facilities during the period in which there were no comparable expenses in the prior year as well as the new NASCAR Craftsman Truck Series event at Daytona.  The remaining increase is primarily attributable to the increased television broadcast rights fees for events held at Daytona, Watkins Glen, Talladega, Darlington and the August events at Michigan.

Motorsports related expenses increased approximately $10.4 million, or 95.1%, for the three months ended August 31, 2000, as compared to the three months ended August 31, 1999.  Approximately three-quarters of the increase is attributable to operating expenses for events conducted at the Company’s newly acquired facilities during the period in which there were no comparable expenses in the prior year, which included the sanction fees for the CART FedEx Championship Series and International Race of Champions (“IROC”) events at Michigan.  The remaining increase is attributable to personnel costs and a variety of other operating costs and fan amenities for the August events at Michigan and events conducted at Daytona and Watkins Glen. Motorsports related expenses as a percentage of combined admissions and motorsports related income increased approximately 4.5% during the three months ended August 31, 2000 as compared to the three months ended August 31, 1999.  This margin decrease was primarily attributable to incremental operating costs and timing of events at the newly acquired facilities as well as the sanction fees included in motorsports related expense for the CART FedEx Championship Series and IROC events at Michigan.  To a lesser extent, increased non-NASCAR sanction fees and operating expenses at the Daytona events contributed to the decrease.

Motorsports related expenses increased approximately $27.7 million, or 85.3%, for the nine months ended August 31, 2000, as compared to the three months ended August 31, 1999.  Over three-quarters of the increase is attributable to operating expenses for events conducted at the Company’s newly acquired facilities during the period in which there were no comparable expenses in the prior year, which included the sanction fees for the CART FedEx Championship Series events at Michigan, Nazareth and Miami and the IROC event at Michigan.  The remaining increase was primarily attributable to personnel costs and a variety of other operating costs and fan amenities for Daytona’s Speedweeks and Pepsi 400 events and, to a lesser extent, events conducted at the Company’s other facilities.  Motorsports related expenses as a percentage of combined admissions and motorsports related income increased approximately 3.0% during the nine months ended August 31, 2000 as compared to the nine months ended August 31, 1999.  This margin decrease is primarily attributable to incremental operating costs and timing of events at the newly acquired facilities as well as the sanction fees included in motorsports related expense for the CART FedEx Championship Series and IROC events discussed above.

Food, beverage and merchandise expense increased approximately $5.6 million, or 84.7%, and $14.3 million, or 89.4%, for the three months and nine months ended August 31, 2000, as compared to the three months and nine months ended August 31, 1999.  Substantially all of the increase is attributable to the product and operating costs related to the sales of racing tires, accessories and other merchandise by subsidiaries acquired in the PMI acquisition.  The remaining increase is primarily attributable to the product and personnel costs for events at the Company’s newly acquired facilities and, to a lesser extent during the nine month period ending August 31, 2000, the Speedweeks events at Daytona.  Food, beverage and merchandise expense as a percentage of food, beverage and merchandise income increased 5.0% and 4.6% during the three months and nine months ended August 31, 2000, as compared to the three months and nine months ended August 31, 1999, respectively.  This margin decrease is primarily attributable to the lower margin activities of certain merchandising subsidiaries acquired in the PMI acquisition. 

General and administrative expenses increased approximately $2.7 million, or 16.1%, and $19.1 million, or 51.9%, for the three months and nine months ended August 31, 2000, respectively, as compared to the same periods of the prior year.  General and administrative expenses for the three months and nine months ended August 31, 1999 include a charge of approximately $2.8 million related to the cash portion of the settlement in the Americrown Service Corporation (“Americrown”) souvenir litigation (See “Legal Proceedings”).  Over three-quarters of the increase, after excluding the effects of the prior year charge for the settlement, is due to the general and administrative expenses associated with the Company’s newly acquired operations during the period in which there were no comparable expenses in the prior year.  The remaining increase was due primarily to increased personnel and other costs associated with the ongoing expansion of the Company’ s business, exclusive of such costs associated with the Company’s newly acquired operations.  General and administrative expenses as a percentage of total revenues decreased to 18.0% for the three months ended August 31, 2000, as compared to 25.1% for the three months ended August 31, 1999.  This decrease is primarily attributable to the Americrown souvenir litigation charge in the prior year with the remaining decrease attributable to increased revenues from the newly acquired facilities during the period in which there were no comparable revenues in the prior year.  General and administrative expenses as a percentage of total revenues decreased to 17.6% for the nine months ended August 31, 2000, as compared to 19.0% for the nine months ended August 31, 1999.  This decrease is primarily attributable to the Americrown souvenir litigation charge in the prior year.

Depreciation and amortization expense increased approximately $6.2 million and $24.0 million for the three months and nine months ended August 31, 2000, respectively, as compared to the same periods of the prior year.  This increase was primarily due to the depreciation of assets acquired and amortization of goodwill recorded as a result of the PMI (which included the consolidation of Miami) and Richmond acquisitions during the period in which there were no comparable expenses in the prior year.  The remaining increase was a result of the ongoing expansion of the Company’s facilities.

Interest income decreased by approximately $627,000 and $1.9 million for the three months and nine months ended August 31, 2000, respectively, as compared to the same periods of the prior year.  This decrease is primarily due to lower average investment balances in the current year.

Interest expense increased by approximately $5.8 million and $20.8 million for the three months and nine months ended August 31, 2000, respectively, as compared to the same periods of the prior year.  Interest expense in fiscal 2000 was primarily attributable to interest on the $225 million principal amount of senior notes (“Senior Notes”) issued in October 1999, borrowings under the Company’s credit facilities and term loan arrangements and interest on the Company’s funding commitment related to the 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, net of capitalized interest (See “Future Liquidity”).  Interest expense during the same period of fiscal 1999 consisted primarily of the borrowings under the Company’s revolving credit facility associated with the July 1999 acquisition of PMI and interest on the Company’s TIF bond funding commitment, net of capitalized interest.

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.  During the three months and nine months ended August 31, 2000, this included the Company’s 50% investment in Motorsports Alliance, LLC (“MSA”), which is engaged in the development of the Chicagoland Speedway (See “Future Liquidity”).  For the three months and nine months ended August 31, 1999, this included the Company’s approximately 12% indirect investment in PMI and its 45% investment in Miami through the date of the PMI acquisition as well as its 50% investment in MSA.

Minority interest consists of the 10% interest in Miami that is not owned by the Company.

The North Carolina Speedway litigation expense represents the final resolution of the North Carolina Speedway dissenter’s action related to PMI’s acquisition of North Carolina Speedway in 1997 and includes the judgment and related interest, amounts due non-dissenting former shareholders and related legal fees.  The after tax impact of this expense was approximately $5.2 million. (See “Legal Proceedings”)

The increase in the Company’s effective income tax rate for the three months ended August 31, 2000, as compared to the same period of the prior year is primarily due to the amortization of non-deductible goodwill created in the PMI acquisition, partially offset by a decrease in the Company’s effective rate for certain state income taxes.  The increase in the effective income tax rate for the nine months ended August 31, 2000, as compared to the same period of the prior year, is primarily due to the amortization of non-deductible goodwill and the non-deductible portion of the North Carolina Speedway litigation incurred in the second quarter of fiscal 2000.  The Company’s effective income tax rate is expected to remain above historical levels primarily due to the amortization of non-deductible goodwill created in the PMI acquisition.

As a result of the foregoing, the Company’s net income increased approximately $3.1 million, or 32.7%, during the three months ended August 31, 2000, and decreased approximately $9.8 million, or 23.1%, during nine months ended August 31, 2000, as compared to the same periods of 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. In addition, the Company has used the proceeds from offerings of its Class A Common Stock and, more recently, the net proceeds from the issuance of Senior Notes, borrowings under its credit facilities and state and local mechanisms to fund acquisitions and development projects. At August 31, 2000 the Company had $225 million principal amount of Senior Notes outstanding, total borrowings of approximately $181.0 million under its credit facilities and term loan arrangements, and a debt service funding commitment of approximately $69.1 million, net of discount, related to the TIF bonds issued by the Unified Government (See "Future Liquidity"). The Company had working capital deficits of approximately $66.6 million and $51.9 million at August 31, 2000 and November 30, 1999, respectively.

Cash Flows

Net cash provided by operating activities was approximately $106.4 million for the nine months ended August 31, 2000, compared to approximately $70.0 million for the nine months ended August 31, 1999.  The difference between the Company’s net income of approximately $32.6 million and the $106.4 million of operating cash flow was primarily attributable to an increase in deferred income of $56.3 million, depreciation and amortization of $37.9 million, deferred income taxes of $7.3 million, an increase in income tax payable of $3.6 million and amortization of financing costs of $1.1 million, partially offset by an increase in receivables of $14.5 million, a combined increase in inventories, prepaid expenses and other current assets of $10.4 million and a decrease in accounts payable and other current liabilities of $8.3 million.

Net cash used in investing activities was approximately $71.6 million for the nine months ended August 31, 2000, compared to $209.6 million for the nine months ended August 31, 1999. The Company's use of cash for investing activities reflects $215.6 million for the Company’s acquisition of Richmond, $85.3 million in capital expenditures and $15.6 million to increase the Company's investment in and advances to the Chicago project, partially offset by a $245.1 million decrease in restricted investments related to the Richmond acquisition and the project in Kansas. (See "Capital Expenditures" and “Future Liquidity”)

Net cash used in financing activities was approximately $23.2 million for the nine months ended August 31, 2000, compared to net cash provided of approximately $160.0 million for the nine months ended August 31, 1999. The Company's use of cash for financing activities reflects net payments under credit facilities of $16.0 million, $3.2 million in cash dividends paid, $2.5 million in payments of long-term debt and $1.2 million used to reacquire previously issued common stock.

Capital Expenditures

Capital expenditures totaled approximately $85.3 million for the nine months ended August 31, 2000 as compared to $75.4 million for the nine months ended August 31, 1999. Over one-half of these expenditures were related to expenditures at the Company's existing facilities, including increased seating capacity at Michigan, Daytona, Talladega and Richmond, land purchased for expansion of parking capacity and a variety of other improvements. The remaining capital expenditures were primarily related to the construction of the speedway in Kansas.

The Company expects to make approximately $78.1 million of additional capital expenditures for approved projects at its facilities within the next 24 months to increase grandstand seating capacity, acquire land for expansion of parking capacity, construct 36 additional luxury suites at the Kansas facility and for a variety of additional improvements. The Company also expects to spend an additional $10.1 million for 36 additional luxury suites and an additional $5 million for design upgrades at the Kansas facility. The balance of the Company's capital expenditures related to the construction of the Kansas facility will be funded from restricted investments, as discussed below.

Acquisition

On December 1, 1999, the Company acquired Richmond for approximately $215.6 million, including acquisition costs. Located ten miles from downtown Richmond, Virginia, the 3/4 mile intermediate speedway seats over 94,000 grandstand spectators and offers luxury accommodations in the facility's 34 suites.

The acquisition has been accounted for under the purchase method of accounting and, accordingly, the results of operations have been included in the Company's consolidated statements of income since the date of acquisition.

The purchase price was allocated to the assets and liabilities acquired based upon their fair market values at the acquisition date. The excess of the purchase price over the fair value of the net assets acquired was approximately $169.3 million and was recorded as goodwill, which is being amortized on a straight line basis over 40 years. The amount amortized during the three- and nine-month periods ended August 31, 2000 was approximately $1.1 million and $3.2 million, respectively.

Future Liquidity

In December, 1999, the Company's revolving credit facility ("Credit Facility") was increased from $200 million to $250 million. The Credit Facility matures on March 31, 2004, and accrues interest at LIBOR plus 50-100 basis points. At August 31, 2000, the Company had borrowings of $140 million under the Credit Facility, which related to the financing of the Company's December 1999 Richmond acquisition (See "Acquisition").

In May 2000, the Company’s Miami subsidiary amended its credit agreement for a $20 million credit facility (“Miami Credit Facility”) and a $27.5 million term loan (“Term Loan”). The Miami Credit Facility and Term Loan are guaranteed by the Company and have the same interest terms and restrictive covenants as the Company’s Credit Facility. The Miami Credit Facility will be automatically reduced to $15 million on December 31, 2002 and will mature on December 31, 2004. At August 31, 2000, the Company had borrowings of $13.5 million under the Miami Credit Facility. The Term Loan is payable in annual installments which range from $4.0 million to $7.0 million. The Company has an interest rate swap agreement that effectively fixes the floating rate on the outstanding balance under the Term Loan at 6.1% through December 31, 2000 and 6.6% for the remainder of the loan period.

On October 6, 1999, the Company completed an offering of $225 million principal amount of Senior Notes due October 15, 2004 in a private placement. The unsecured Senior Notes bear interest at 7.875% and rank equally with all of the Company's other senior unsecured and unsubordinated indebtedness. The Company used approximately $176 million of the net proceeds from the transaction to repay the then outstanding borrowings under the Credit Facility, which were related to the PMI acquisition. The remaining net proceeds were used to partially fund the completion of certain additions and improvements to the Company's facilities and for working capital and other general corporate purposes. On March 17, 2000, the Company completed an offer to exchange the Senior Notes issued in the private placement for registered senior notes with substantially identical terms.

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, in connection with the financing of construction of the speedway in Kansas. The net proceeds were deposited into separate interest-bearing trust accounts. The STAR bonds will be retired with state and local taxes generated within the project’s boundaries and are not an obligation of the Company. The TIF bonds are comprised of a $21.6 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 repaid by the Unified Government, with payments made in lieu of property taxes (“Funding Commitment”) by the Company’s wholly-owned subsidiary, Kansas Speedway Corporation (“KSC”).   KSC granted a mortgage and security interest in the Kansas Project for its Funding Commitment obligation.  In addition, KSC’s initial equity commitment of approximately $77.9 million, along with the net TIF and STAR bond proceeds, were deposited into trustee administered accounts for the benefit of the construction of the Kansas facility.  At August 31, 2000, the unexpended portion of the Company’s equity contribution and TIF bond proceeds recorded as restricted investments totaled approximately $50.8 million.  Subsequent to August 31, 2000, KSC contributed an additional $5.0 million to these restricted funds in connection with the increased commitment to the Kansas facility (See “Capital Expenditures”).

On May 5, 1999, MSA (owned 50% by the Company and 50% by Indianapolis Motor Speedway Corp.) and the owners of Route 66 Raceway, LLC ("Route 66"), formed a new company, Raceway Associates, LLC, ("Raceway Associates") which is owned 75% by MSA and 25% by the former owners of Route 66. 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 also purchased 930 acres adjacent to the existing Route 66 complex on which it is constructing the Chicagoland Speedway, a 1.5 mile oval motor speedway, which will initially accommodate approximately 75,000 spectators. The current estimate for the new superspeedway development is approximately $130 million, $100 million of which will be financed through equity of approximately $50 million from MSA and approximately $50 million in future borrowings by Raceway Associates. The members of MSA have guaranteed up to $50 million in borrowings by Raceway Associates on a pro rata basis until such time as the operations of Raceway Associates meet certain financial criteria. In December 1999 the City of Joliet, Illinois sold approximately $9 million in 6.75% municipal bonds (which are to be repaid by Raceway Associates through property tax assessments over twelve years) to help fund a portion of the project costs that relate to public infrastructure for the speedway development project. It is anticipated that the members of Raceway Associates will fund the additional project costs in excess of $109 million on a pro rata basis during the construction period. In April 2000, the Company approved advances of approximately $6.9 million as its pro-rata portion of MSA’s additional funding commitment to the project. Through August 31, 2000, the Company has contributed approximately $32.4 million to MSA, including $25.0 million which has fulfilled the Company's portion of MSA's $50 million equity commitment, and approximately $3.9 million of the $6.9 million in advances.  At August 31, 2000, Raceway Associates has borrowed approximately $13.1 million for the Chicagoland Speedway construction under its construction and term loan arrangement discussed above, which is currently guaranteed by the members of the MSA.

During fiscal 1999, the Company announced its intention to search for a site for a major motorsports facility in the New York metro area. In January 2000, the Company announced that, through a wholly-owned subsidiary, it had entered into an exclusive agreement with the New Jersey Sports and Exposition Authority to conduct a feasibility study on the development of a motorsports facility at the Meadowlands Sports Complex in New Jersey. The feasibility study covers a period not to exceed twelve months. The Meadowlands Sports Complex, located five miles west of the Lincoln Tunnel, is the site of Giants Stadium, Continental Airlines Arena and Meadowlands Racetrack and is the home of certain professional sports franchises, horse racing, college athletics, concerts and family shows. The Company has not yet determined the feasibility of the Meadowlands (or any other) site, formulated an estimate of the costs to construct a major motorsports facility in the New York metropolitan area, nor established a timetable for completion, or even commencement, of such a project.

The Company believes that cash flow from operations, along with existing cash and available borrowings under the Company's credit facilities, will be sufficient to fund i) operations and approved capital projects at existing facilities for the foreseeable future, ii) payments required in connection with the funding of the Unified Government's debt service requirements related to the TIF bonds, iii) payments related to other currently existing debt service requirements, and iv) the Company's expected funding requirements for the Chicago project. The Company intends to pursue further development and/or acquisition opportunities (including the possible development of new motorsports facilities in Denver and the New York metropolitan area) the timing, size and success as well as associated potential capital commitments of which are unknown at this time. Accordingly, a material acceleration in our growth strategy could require the Company to obtain additional capital through debt and/or equity financings. Although there can be no assurance, the Company believes that adequate debt and equity financing will 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.

FACTORS THAT MAY AFFECT OPERATING RESULTS

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

DEPENDENCY UPON NASCAR

The Company's success has been and will remain dependent upon maintaining a good working relationship with NASCAR, the sanctioning body for the Winston Cup Series, the Busch Series, Grand National Division and certain other races promoted by the Company. The Company has sanctioning agreements to promote sixteen NASCAR Winston Cup Series championship point races, two NASCAR Winston Cup Series non-championship point races, fourteen NASCAR Busch Series, Grand National Division races and a number of other NASCAR races for the 2000 racing season. Each NASCAR event sanctioning agreement is awarded on an annual basis. In fiscal 1999, 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 Kansas and Chicagoland speedways. 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 and retain 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 an adverse 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, 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 Company’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% of the Company's total revenues in fiscal 1999. 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.

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 Vice President and 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 in advance of its most popular events, poor weather conditions could have a material adverse effect on the Company's results of operations.

LIABILITY FOR PERSONAL INJURIES

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

OTHER REGULATORY MATTERS

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

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

ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

During the nine months ended August  31, 2000 there have been no material changes in the Company’s market risk exposures.

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 has been a party to the other legal proceedings as described below which were terminated during the nine-months ended August 31, 2000.

Souvenir Litigation

As described below, the Company and certain subsidiaries were parties to legal proceedings alleging price-fixing activities in connection with the sale of souvenirs and merchandise. These matters are collectively referred to as the Souvenir Litigation. While the Company has settled the legal proceedings neither the cost of defending the suits, nor the cost of settlement is covered by insurance.

The Company's indirect corporate subsidiary, Americrown, was the sole defendant in a class action proceeding in the Circuit Court of Talladega County, Alabama which was filed in October 1996. A class consisting of persons who purchased racing souvenirs at Talladega Superspeedway since September 1992 was certified by the court on July 30, 1998. The suit sought to recover at least $500 for each member of the class but did not otherwise seek to recover compensatory or punitive damages or statutory attorneys' fees. Americrown disputed the allegations and defended 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 (including Motorsports International, previously a subsidiary of PMI which was acquired by the Company in the PMI Acquisition). Both suits sought 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 since 1991. The two suits were consolidated. The Company and Americrown disputed the allegations and defended the actions fully and vigorously.

Recently Americrown, Motorsports International and the Company have entered into Settlement Agreements to completely settle the Souvenir Litigation, without any admission of wrongdoing on their part. Under the terms of the Settlement Agreements the Company, Americrown and Motorsports International paid approximately $4.6 million in cash into a Settlement Fund and have agreed to redeem $6 million in souvenir merchandise discount coupons (the effects of the discount coupon program will be recognized in future periods as coupons are redeemed) to settle with classes which would encompass all purchasers of souvenirs and merchandise at NASCAR Winston Cup events during the period from January 1, 1991 to August 25, 2000. The Settlement Agreements have been approved by the respective courts and final orders ending the litigation were entered on August 25, 2000.

North Carolina Speedway Litigation

As previously reported in the Company’s Report on Form 10-Q for the quarterly period ended May 31, 2000, the North Carolina Speedway Dissenter’s Action case was ended on April 25, 2000, when jurors in the case returned a verdict upon which a judgment was entered which entitled the dissenting shareholders to $23.47 per share, an amount $3.86 to $6.70 higher than the original consideration. The financial statements in that Report on Form 10-Q for the 2000 second quarter included an accrual of approximately $5.5 million, representing the judgment and related interest, amounts due to non-dissenting former shareholders and related legal fees.  In June 2000, substantially all of the amounts related to this judgment were paid by the Company.

Item 6.    Exhibits and Reports on Form 8-K

(a) Exhibits none

(b)                     Reports on Form 8-K

On July 11, 2000 the Company filed a report on Form 8-K which reported under Item 5. the issuance of an press release reporting earnings for the second quarter and six months ended May 31, 2000 and providing guidance on future earnings estimates and the issuance of a second press release clarifying the guidance on future earnings estimates.

On October 5, 2000 the Company filed a report on Form 8-K which reported under Item 5. the issuance of an earnings release for the three-months and nine-months ended August 31, 2000.

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:	10/12/2000	/s/ Susan G. Schandel
		Susan G. Schandel, Vice President & Chief Financial Officer