Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 23, 2018 | Jun. 30, 2017 | |
Entity Registrant Name | DOVER MOTORSPORTS INC | ||
Entity Central Index Key | 1,017,673 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 32,850,875 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Common Stock | Common Stock | |||
Entity Common Stock, Shares Outstanding | 18,312,559 | ||
Common Stock | Class A Common Stock | |||
Entity Common Stock, Shares Outstanding | 18,509,975 |
CONSOLIDATED STATEMENTS OF EARN
CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | |||
Admissions | $ 6,657,000 | $ 6,937,000 | $ 7,967,000 |
Event-related | 8,303,000 | 8,264,000 | 8,832,000 |
Broadcasting | 31,775,000 | 30,658,000 | 29,734,000 |
Other | 7,000 | 14,000 | 6,000 |
Total revenues | 46,742,000 | 45,873,000 | 46,539,000 |
Expenses: | |||
Operating and marketing | 28,764,000 | 28,197,000 | 27,818,000 |
General and administrative | 7,314,000 | 7,399,000 | 7,414,000 |
Costs to remove long-lived assets | 286,000 | 203,000 | 40,000 |
Depreciation | 3,566,000 | 3,433,000 | 5,326,000 |
Total expenses | 39,930,000 | 39,232,000 | 40,598,000 |
Income from assets held for sale | 2,900,000 | ||
Operating earnings | 6,812,000 | 6,641,000 | 8,841,000 |
Interest expense, net | (169,000) | (199,000) | (323,000) |
(Provision) benefit for contingent obligation | (158,000) | (75,000) | 86,000 |
Other income (expense) | 52,000 | 23,000 | (5,000) |
Earnings before income taxes | 6,537,000 | 6,390,000 | 8,599,000 |
Income tax benefit (expense) | 1,889,000 | (2,589,000) | (3,314,000) |
Net earnings | 8,426,000 | 3,801,000 | 5,285,000 |
Unrealized gain (loss) on available-for-sale securities, net of income taxes | 22,000 | 8,000 | (17,000) |
Change in pension net actuarial loss and prior service cost, net of income taxes | (70,000) | (279,000) | 223,000 |
Comprehensive income | $ 8,378,000 | $ 3,530,000 | $ 5,491,000 |
Net earnings per common share (Note 2): | |||
Basic (in dollars per share) | $ 0.23 | $ 0.10 | $ 0.14 |
Diluted (in dollars per share) | $ 0.23 | $ 0.10 | $ 0.14 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash | $ 1 | $ 1 |
Accounts receivable | 476 | 419 |
Inventories | 15 | 17 |
Prepaid expenses and other | 1,119 | 1,104 |
Income taxes receivable | 562 | |
Assets held for sale | 2,455 | 2,455 |
Total current assets | 4,628 | 3,996 |
Property and equipment, net | 51,000 | 52,723 |
Nashville Superspeedway facility reported as long term assets | 23,545 | 23,545 |
Other assets | 1,107 | 1,022 |
Total assets | 80,280 | 81,286 |
Current liabilities: | ||
Accounts payable | 61 | 347 |
Accrued liabilities | 3,049 | 2,955 |
Payable to Dover Downs Gaming & Entertainment, Inc. | 7 | 7 |
Income taxes payable | 218 | |
Deferred revenue | 1,249 | 1,355 |
Total current liabilities | 4,366 | 4,882 |
Revolving line of credit | 3,240 | 3,840 |
Liability for pension benefits | 2,819 | 4,046 |
Provision for contingent obligation | 1,960 | 1,802 |
Deferred income taxes | 8,673 | 12,911 |
Total liabilities | 21,058 | 27,481 |
Commitments and contingencies (see Notes to the Consolidated Financial Statements) | ||
Stockholders' equity: | ||
Preferred stock, $0.10 par value; 1,000,000 shares authorized; shares issued and outstanding: none | ||
Additional paid-in capital | 101,844 | 101,858 |
Accumulated deficit | (42,858) | (48,340) |
Accumulated other comprehensive loss | (3,440) | (3,392) |
Total stockholders' equity | 59,222 | 53,805 |
Total liabilities and stockholders' equity | 80,280 | 81,286 |
Common Stock | Common Stock | ||
Stockholders' equity: | ||
Common stock | 1,825 | 1,828 |
Common Stock | Class A Common Stock | ||
Stockholders' equity: | ||
Common stock | 1,851 | 1,851 |
Total stockholders' equity | $ 1,851 | $ 1,851 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Stock | Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 18,250,440 | 18,276,360 |
Common stock, shares outstanding | 18,250,440 | 18,276,360 |
Common Stock | Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized | 55,000,000 | 55,000,000 |
Common stock, shares issued | 18,509,975 | 18,509,975 |
Common stock, shares outstanding | 18,509,975 | 18,509,975 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities: | |||
Net earnings | $ 8,426,000 | $ 3,801,000 | $ 5,285,000 |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation | 3,566,000 | 3,433,000 | 5,326,000 |
Amortization of credit facility fees | 65,000 | 87,000 | 96,000 |
Stock-based compensation | 364,000 | 284,000 | 316,000 |
Excess tax benefits from stock-based compensation | (27,000) | ||
Deferred income taxes | (4,286,000) | (661,000) | (828,000) |
Provision (benefit) for contingent obligation | 158,000 | 75,000 | (86,000) |
Income from assets held for sale | (2,900,000) | ||
Changes in assets and liabilities: | |||
Accounts receivable | (57,000) | (246,000) | (34,000) |
Inventories | 2,000 | 55,000 | (2,000) |
Prepaid expenses and other | (97,000) | (44,000) | (125,000) |
Income taxes receivable/payable | (699,000) | 223,000 | 182,000 |
Accounts payable | (252,000) | 176,000 | 64,000 |
Accrued liabilities | (3,000) | (442,000) | (77,000) |
Payable to/ receivable from Dover Downs Gaming & Entertainment, Inc | 51,000 | (66,000) | |
Deferred revenue | (106,000) | 77,000 | (70,000) |
Liability for pension benefits | (1,248,000) | (32,000) | (18,000) |
Net cash provided by operating activities | 5,833,000 | 6,810,000 | 7,063,000 |
Investing activities: | |||
Capital expenditures | (1,877,000) | (2,580,000) | (1,448,000) |
Purchases of available-for-sale securities | (176,000) | (293,000) | (40,000) |
Proceeds from sale of available-for-sale securities | 145,000 | 203,000 | 20,000 |
Non-refundable deposit received on expected sale of facility | 1,200,000 | ||
Net cash used in investing activities | (1,908,000) | (2,670,000) | (268,000) |
Financing activities: | |||
Borrowings from revolving line of credit | 25,680,000 | 28,820,000 | 29,740,000 |
Repayments on revolving line of credit | (26,280,000) | (30,880,000) | (34,600,000) |
Dividends paid | (2,944,000) | (1,840,000) | (1,837,000) |
Repurchase of common stock | (381,000) | (189,000) | (121,000) |
Excess tax benefits from stock-based compensation | 27,000 | ||
Credit facility fees | (78,000) | ||
Net cash used in financing activities | (3,925,000) | (4,140,000) | (6,818,000) |
Net change in cash | (23,000) | ||
Cash, beginning of year | 1,000 | 1,000 | 24,000 |
Cash, end of year | 1,000 | 1,000 | 1,000 |
Supplemental information: | |||
Interest paid | 368,000 | 367,000 | 453,000 |
Income tax payments | 3,097,000 | 3,025,000 | 3,960,000 |
Change in accounts payable for capital expenditures | $ (34,000) | $ 34,000 | $ (816,000) |
Business Operations
Business Operations | 12 Months Ended |
Dec. 31, 2017 | |
Business Operations | |
Business Operations | NOTE 1 — Business Operations References in this document to “we,” “us” and “our” mean Dover Motorsports, Inc. and/or its wholly owned subsidiaries, as appropriate. Dover Motorsports, Inc. is a public holding company that is a leading marketer and promoter of motorsports entertainment in the United States. Through our subsidiaries, we own and operate Dover International Speedway ® in Dover, Delaware and Nashville Superspeedway ® near Nashville, Tennessee. Our Dover facility promoted the following six events during 2017, all of which were under the auspices of the premier sanctioning body in motorsports - the National Association for Stock Car Auto Racing (“NASCAR”): · 2 NASCAR Cup Series events; · 2 NASCAR XFINITY Series events; · 1 NASCAR Camping World Truck Series event; and · 1 NASCAR K&N Pro Series East event. In 2018, we are scheduled to promote these same six events at Dover International Speedway. Total revenues from these events were approximately 96%, 97% and 97% of total revenues in 2017, 2016 and 2015, respectively. We have hosted the Firefly Music Festival (“Firefly”) on our property in Dover, Delaware for six consecutive years and it is scheduled to return on June 14-17, 2018. The inaugural three day festival with 40 musical acts was held in July 2012 and the 2017 event was held on June 15-18, 2017 with over 140 musical acts. In September 2014, Red Frog Events LLC formed RFGV Festivals LLC - a joint venture with Goldenvoice that promotes Firefly. Goldenvoice is owned by AEG Live, one of the world’s largest presenters of live music and entertainment events. We entered into an amended agreement with RFGV Festivals granting them two 5 year options to extend our facility rental agreement through 2032 (from its original expiration date of 2022) in exchange for a rental commitment to secure our property for up to two festivals per year. Rent is at differing rates depending on how many events are actually held. On June 26-28, 2015, the Big Barrel Country Music Festival was held at our facility. The three day festival was promoted by RFGV Festivals and featured 40 musical acts. On January 28, 2016, RFGV Festivals announced it would not promote the Big Barrel Country Music Festival in 2016 and a second festival was not held in 2017. In addition to the facility rental fee, we also receive a percentage of the concession sales we manage at the events. Nashville Superspeedway no longer promotes motorsports events and has not entered into sanction agreements with NASCAR since 2011. We lease the facility on a short term basis to third parties from time to time. On May 29, 2014, we entered into an agreement to sell the facility for $27 million in cash and the assumption by the potential buyer of obligations of ours under certain Variable Rate Tax Exempt Infrastructure Revenue Bonds. The sales agreement was amended several times extending the closing date. In consideration for these amendments, during 2014 we received $1,700,000 in non-refundable deposits from the potential buyer which was to be applied against the purchase price at closing. In 2015, we received $1,200,000 in non-refundable deposits to extend closing under the agreement, a portion of which was to be applied against the purchase price depending on the closing date. During the first and second quarters of 2015, $427,000 and $606,000, respectively, was recorded as income from assets held for sale in our consolidated statements of operations as those deposit amounts were not to be applied against the purchase price at closing based on the terms of the amendments. On June 1, 2015, the potential buyer defaulted under the agreement and did not subsequently cure the default. The amended closing date under the agreement was July 27, 2015; therefore, the agreement expired by its terms. Accordingly, we recorded as income from assets held for sale the remaining deposits of $1,867,000 in the third quarter of 2015. On August 17, 2017, we entered into an agreement with an entity owned by Panattoni Development Company relative to the sale of approximately 147 acres at a purchase price of $35,000 per acre. On January 22, 2018, we entered into an amendment to that agreement whereby the purchaser was required to deposit into escrow the remainder of the purchase price. The total purchase price of $5,151,300 has now been placed into escrow. In accordance with the terms of the amendment, closing will occur within three business days after the plat for the property has been fully executed by all required regulatory authorities, which is expected to occur in the first quarter of 2018. On September 1, 2017, we also awarded to the purchaser a three year option for 88.03 additional acres at a purchase price of $55,000 per acre. On February 9, 2018, we amended the option agreement to extend its term and to add additional acreage to the option. The option is for three years beginning on the earliest to occur of March 1, 2018 or the date of closing of the initial 147 acres, but is only operative once closing occurs under the purchase agreement for the initial 147 acres. An additional 86.45 acres were added to the option at a purchase price of $66,685 per acre and an additional 50.51 acres were added at a purchase price of $35,000 per acre. The option may only be exercised for all of the 224.99 acres at one time for a total purchase price of $12,374,418. We will continue with our effort to sell the remaining Nashville Superspeedway property. As of December 31, 2016, all of the assets of Nashville Superspeedway were previously reported as assets held for sale in our consolidated balance sheets. While management remains committed to selling the Nashville property, with the exception of the 147 acres discussed above, we no longer believe it is probable that the remaining property will be sold within the next twelve months. As such, we reclassified $23,545,000 to long term assets and $2,455,000 representing 147 acres of the total Nashville Superspeedway property was reported as assets held for sale in our consolidated balance sheets at December 31, 2017. In addition, the December 31, 2016 consolidated balance sheet was retrospectively adjusted to conform to the current-period presentation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | NOTE 2 — Summary of Significant Accounting Policies Basis of consolidation and presentation— The accompanying consolidated financial statements include the accounts of Dover Motorsports, Inc. and our wholly owned subsidiaries. Intercompany transactions and balances have been eliminated. Investments— Investments, which consist of mutual funds, are classified as available-for-sale and reported at fair-value in other assets in our consolidated balance sheets. Changes in fair value are reported in other comprehensive income. See NOTE 7 — Pension Plans, NOTE 8 — Stockholders’ Equity and NOTE 9 — Fair Value Measurements for further discussion. Accounts receivable— Accounts receivable are stated at their estimated collectible amount and do not bear interest. Inventories— Inventories of items for resale are stated at the lower of cost or net realizable value with cost being determined on the first-in, first-out basis. Property and equipment— Property and equipment is stated at cost. Depreciation is provided using the straight-line method over the following estimated useful lives: Facilities 10-40 years Furniture, fixtures and equipment 3-10 years Impairment of long-lived assets— Long-lived assets are assessed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss is measured as the amount by which the carrying amount of the asset exceeds its fair value. Generally, fair value is determined using valuation techniques such as the comparable sales approach based on either independent third party appraisals or pending/completed sales transactions. Income taxes— Deferred income taxes are provided on all differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements based upon enacted statutory tax rates in effect at the balance sheet date. We record a valuation allowance to reduce our deferred tax assets when uncertainty regarding their realizability exists. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that has a greater than 50% likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. As of December 31, 2017, our valuation allowance on state net operating loss carry-forwards net of federal income taxes was $8,291,000, which decreased by $163,000 in 2017. These state net operating losses are related to our Midwest facilities that have not produced taxable income. As such, the valuation allowances fully reserve the state net operating loss carryforwards, net of federal tax benefit. Revenue recognition— We classify our revenues as admissions, event-related, broadcasting and other. “Admissions” revenue includes ticket sales for all of our events. “Event-related” revenue includes amounts received from sponsorship fees; luxury suite rentals; hospitality tent rentals and catering; concessions and vendor commissions for the right to sell concessions and souvenirs at our facilities; sales of programs; track rentals; broadcasting rights other than domestic television broadcasting revenue and other event-related revenues. Additionally, event related revenue includes amounts received for the use of our property and a portion of the concession sales we manage from the Firefly Music Festival and the Big Barrel Country Music Festival (in 2015 only). “Broadcasting” revenue includes rights fees obtained for domestic television broadcasts of events held at our speedway. Revenues pertaining to specific events are deferred until the event is held. Concession and souvenir revenues are recorded at the time of sale. Revenues and related expenses from barter transactions in which we provide sponsorship packages in exchange for goods or services are recorded at fair value. Barter transactions accounted for $612,000, $400,000 and $721,000 of total revenues for the years ended December 31, 2017, 2016 and 2015, respectively. Under the terms of our sanction agreements with NASCAR, we receive a portion of the broadcast revenue NASCAR negotiates with various television networks. NASCAR retains 10% of the gross broadcast rights fees allocated to each NASCAR-sanctioned event as a component of its sanction fee. The remaining 90% is recorded as revenue. The event promoter is required to pay 25% of the gross broadcast rights fees to the event as part of the awards to the competitors, which we record as operating expenses. Expense recognition— The cost of non-event related advertising, promotion and marketing programs is expensed as incurred. Certain direct expenses pertaining to specific events, including prize and point fund monies and sanction fees paid to NASCAR, a majority of our marketing expenses and other expenses associated with the promotion of our racing events are deferred until the event is held, at which point they are expensed. Advertising expenses were $1,195,000, $1,202,000 and $1,364,000 in 2017, 2016 and 2015, respectively. Net earnings per common share— Nonvested share-based payment awards that include rights to dividends or dividend equivalents, whether paid or unpaid, are considered participating securities, and the two-class method of computing basic and diluted net earnings per common share (“EPS”) is applied for all periods presented. The following table sets forth the computation of EPS (in thousands, except per share amounts): 2017 2016 2015 Net earnings per common share — basic and diluted: Net earnings $ $ $ Allocation to nonvested restricted stock awards Net earnings available to common stockholders $ $ $ Weighted-average shares outstanding Net earnings per common share — basic and diluted $ $ $ There were no options outstanding during 2017, 2016 or 2015. Accounting for stock-based compensation— We recorded total stock-based compensation expense for our restricted stock awards of $364,000, $284,000 and $316,000 as general and administrative expenses for the years ended December 31, 2017, 2016 and 2015, respectively. We recorded income tax benefits of $167,000, $115,000 and $128,000 for the years ended December 31, 2017, 2016 and 2015, respectively, related to vesting of our restricted stock awards. Use of estimates— The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the reported amounts of assets and liabilities, disclosures about contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on our best estimates and judgment. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which we believe to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. Volatility in credit and equity markets and declines in consumer spending have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. Recent accounting pronouncements —In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which provides the option to reclassify certain income tax effects related to the Tax Cuts and Jobs Act passed in December of 2017 between accumulated other comprehensive income and retained earnings and also requires additional disclosures. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. Adoption of this ASU is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the tax laws or rates were recognized. We are currently analyzing the impact of this ASU and, at this time, we have not yet determined whether we will elect to make this optional reclassification. In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (Topic 715) . ASU 2017-07 provides guidance on the presentation of the service cost component and the other components of net period pension cost in the consolidated statements of earnings. The standard is effective for annual and interim reporting periods beginning after December 15, 2017 and requires retrospective adoption. We adopted this ASU in the first quarter of 2018, which did not have a material impact to our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments , which provides guidance on how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The update is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We adopted this ASU in the first quarter of 2018. The adoption of this ASU did not have an impact on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , which is intended to simplify various aspects of the accounting for share-based payments, including treatment of excess tax benefits, forfeitures, consideration of minimum statutory tax withholding requirements and classification on the statement of cash flows. The update is effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods. We adopted this ASU in the first quarter of 2017, which did not have a material impact to our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires that lessees recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position and also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. The update is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within those fiscal years. Early adoption is permitted. We are currently analyzing the impact of this ASU and, at this time, we are unable to determine the impact on the new standard, if any, on our consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory , which requires companies to measure inventory at lower of cost and net realizable value, versus lower of cost or market. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The update is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. We adopted this ASU in the first quarter of 2017, which did not have an impact to our consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which supersedes nearly all existing revenue recognition guidance under accounting principles generally accepted in the United States of America. The FASB issued several amendments to the standard, including clarification on accounting for and identifying performance obligations. The standard can be applied using the full retrospective method or retrospectively with the cumulative effect initially applying the guidance recognized at the date of initial application. The new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The update is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We will adopt this standard effective January 1, 2018 using the retrospective with cumulative effect method. We are in the process of finalizing our review of our sponsorship agreements, sanctioning agreements and other contracts, as well as our review of the accounting for certain costs associated with our events. While we continue to assess all potential impacts of the new standard, including quarterly impacts, we do not currently expect that the adoption of the new revenue standard will have a material impact on our annual revenues, results of operations or financial position. However, we will expand certain disclosures as required. Reclassifications— Certain amounts in the prior year financial statements have been reclassified to conform to the current-year presentation. The impact of the reclassifications made to prior year amounts are not material and did not affect net earnings. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment | |
Property and Equipment | NOTE 3 — Property and Equipment Property and equipment consists of the following as of December 31: 2017 2016 Land $ $ Facilities Furniture, fixtures and equipment Construction in progress Less accumulated depreciation ) ) $ $ In the fourth quarter of 2017, we made the decision to not complete certain facility improvements. Costs previously capitalized of $186,000 were charged to depreciation expense in 2017. In the fourth quarter of 2016, we began removing certain grandstand seating that had been taken out of service and written-off in 2015. We incurred costs of $203,000 in the fourth quarter of 2016 and $286,000 in the first quarter of 2017 to remove the seating which is included in costs to remove long-lived assets in our consolidated statements of earnings. As of March 31, 2017, these assets had been removed and no further costs have been incurred. In the first quarter of 2016, we began a renovation project of certain track related assets that was completed in the first quarter of 2017. As a result, we adjusted the service lives of those assets to properly reflect their shortened estimated useful life. We recorded depreciation expense of $208,000 in 2016 related to these assets. As of December 31, 2016, these assets were fully depreciated. In the first quarter of 2015, we identified certain track related assets that, as a result of our planned reduction of grandstand seating, were retired at the end of our 2015 race season. As a result, we adjusted the service lives of those assets to properly reflect their shortened estimated useful life. We recorded depreciation expense of $2,216,000 in 2015 related to these assets. As of December 31, 2015, these assets were fully depreciated. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Liabilities | |
Accrued Liabilities | NOTE 4 — Accrued Liabilities Accrued liabilities consist of the following as of December 31: 2017 2016 Payroll and related items $ $ Real estate taxes Pension Other $ $ |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2017 | |
Long-Term Debt | |
Long-Term Debt | NOTE 5 — Long-Term Debt At December 31, 2017, Dover Motorsports, Inc. and its wholly owned subsidiaries Dover International Speedway, Inc. and Nashville Speedway, USA, Inc., as co-borrowers had a $35,000,000 credit agreement with a bank group. The credit facility expires on July 31, 2020. Interest is based upon LIBOR plus a margin that varies between 125 and 175 basis points depending on the leverage ratio (125 basis points at December 31, 2017). The credit facility contains certain covenants including maximum funded debt to earnings before interest, taxes, depreciation and amortization (“leverage ratio”) and a minimum fixed charge coverage ratio. Material adverse changes in our results of operations could impact our ability to maintain financial ratios necessary to satisfy these requirements. In addition, the credit agreement includes a material adverse change clause. The credit facility also provides that if we default under any other loan agreement, that would be a default under this facility. At December 31, 2017, there was $3,240,000 outstanding under the credit facility at an interest rate of 2.82%. The credit facility provides for seasonal funding needs, capital improvements, letter of credit requirements and other general corporate purposes. At December 31, 2017, we were in compliance with the terms of the credit facility. After consideration of stand-by letters of credit outstanding, the remaining maximum borrowings available pursuant to the credit facility were $16,102,000 at December 31, 2017. We expect to be in compliance with the financial covenants, and all other covenants, for all measurement periods during the next twelve months. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Income Taxes | NOTE 6 — Income Taxes The current and deferred income tax benefit (expense) is as follows: Years ended December 31, 2017 2016 2015 Current: Federal $ ) $ ) $ ) State ) ) ) ) ) ) Deferred: Federal State ) Total income tax benefit (expense) $ $ ) $ ) A reconciliation of the effective income tax rate with the applicable statutory federal income tax rate is as follows: Years ended December 31, 2017 2016 2015 Federal tax at statutory rate % % % State taxes, net of federal benefit % % % Valuation allowance )% )% )% Tax Cuts and Jobs Act )% — — Other )% )% )% Effective income tax rate )% % % Deferred income tax assets and liabilities are comprised of the following as of December 31: 2017 2016 Deferred income tax assets: Accruals not currently deductible for income taxes $ $ Net operating loss carry-forwards Total deferred income tax assets Valuation allowance ) ) Net deferred income tax assets Deferred income tax liabilities: Depreciation ) ) Total deferred income tax liabilities ) ) Net deferred income tax liability $ ) $ ) Amounts recognized in the consolidated balance sheets: Noncurrent deferred income tax liabilities $ ) $ ) Deferred income taxes relate to the temporary differences between financial accounting income and taxable income and are primarily attributable to differences between the book and tax basis of property and equipment and net operating loss carry-forwards (expiring through 2032). At December 31, 2017, we have available state net operating loss carryforwards of $163,998,000. Valuation allowances which fully reserve the state net operating loss carryforwards, net of federal tax benefit, decreased in 2017, 2016 and 2015 by $163,000, $1,872,000 and $78,000, respectively. The passage of the Tax Cuts and Jobs Act in December of 2017 lowered our federal income tax rate to 21% beginning in 2018 requiring us to revalue our net deferred federal tax liabilities at December 31, 2017. This resulted in a $4,531,000 decrease in our net deferred income tax liabilities, with a corresponding deferred income tax benefit. We recognize interest expense and penalties on uncertain income tax positions as a component of interest expense. No interest expense or penalties were recorded for uncertain income tax matters in 2017, 2016 or 2015. As of December 31, 2017 and 2016, we had no liabilities for uncertain income tax matters. We file income tax returns with the Internal Revenue Service and the states in which we conduct business. We have identified the U.S. federal and state of Delaware as our major tax jurisdictions. As of December 31, 2017, tax years after 2013 remain open to examination for federal and Delaware income tax purposes. |
Pension Plans
Pension Plans | 12 Months Ended |
Dec. 31, 2017 | |
Pension Plans | |
Pension Plans | NOTE 7 — Pension Plans We maintain a non-contributory tax qualified defined benefit pension plan that has been frozen since July 2011. All of our full time employees were eligible to participate in the qualified plan. Benefits provided by our qualified pension plan were based on years of service and employees’ remuneration over their employment period. Compensation earned by employees up to July 31, 2011 is used for purposes of calculating benefits under our pension plan with no future benefit accruals after this date. We also maintain a non-qualified, non-contributory defined benefit pension plan, the excess plan, for certain employees that has been frozen since July 2011. This excess plan provided benefits that would otherwise be provided under the qualified pension plan but for maximum benefit and compensation limits applicable under federal tax law. The cost associated with the excess plan is determined using the same actuarial methods and assumptions as those used for our qualified pension plan. The assets for the excess plan aggregate $1,052,000 and $932,000 as of December 31, 2017 and 2016, respectively, and are recorded in other assets in our consolidated balance sheets (see NOTE 9 — Fair Value Measurements). The following table sets forth the defined benefit plans’ funded status and amounts recognized in our consolidated balance sheets as of December 31: 2017 2016 Change in benefit obligation: Benefit obligation at beginning of year $ $ Interest cost Actuarial loss Benefits paid ) ) Benefit obligation at end of year Change in plan assets: Fair value of plan assets at beginning of year Actual gain on plan assets Employer contribution — Benefits paid ) ) Other Fair value of plan assets at end of year Unfunded status $ ) $ ) The following table presents the amounts recognized in our consolidated balance sheets as of December 31: 2017 2016 Accrued liabilities $ ) $ ) Liability for pension benefits ) ) $ ) $ ) Amounts recognized in accumulated other comprehensive loss that have not yet been recognized as components of net periodic benefit (expense) at December 31 are as follows: 2017 2016 Net actuarial loss, pre-tax $ $ The components of net periodic pension benefit for our defined benefit pension plans for the years ended December 31, 2017, 2016 and 2015 are as follows: 2017 2016 2015 Interest cost $ $ $ Expected return on plan assets ) ) ) Recognized net actuarial loss $ ) $ ) $ ) For the year ending December 31, 2018, we expect to recognize the following amount as a component of net periodic benefit (expense) which is included in accumulated other comprehensive loss as of December 31, 2017: Actuarial loss $ The principal assumptions used to determine the net periodic pension benefit for the years ended December 31, 2017, 2016 and 2015, and the actuarial value of the benefit obligation at December 31, 2017 and 2016 (the measurement dates) for our pension plans are as follows: Net Periodic Pension Cost Benefit Obligation 2017 2016 2015 2017 2016 Weighted-average discount rate % % % % % Weighted-average rate of compensation increase n/a n/a n/a n/a n/a Expected long-term rate of return on plan assets % % % n/a n/a Historically, we used a single weighted-average discount rate approach to determine the pension benefit obligation and the subsequent years’ interest cost component of the net periodic pension benefit. The weighted-average discount rate was determined by matching estimated benefit payment cash flows to a yield curve derived from long-term, high-quality corporate bond curves. This method represented the constant annual rate that would be required to discount all future benefit payments related to past service from the date of expected future payment to the measurement date. As of December 31, 2015, we elected to use a refined method, known as the spot rate approach, to determine the benefit obligation and the subsequent years’ interest cost component of the net periodic pension benefit. This method uses individual spot rates along the yield curve that correspond with the timing of each benefit payment and will provide a more precise measurement of the interest cost by improving the correlation between projected benefit cash flows and the corresponding spot yield curve rates. The change in method did not impact the December 31, 2015 benefit obligation, but resulted in a slight decrease in the interest component of the net periodic pension benefit in 2016. We accounted for this as a change in estimate on a prospective basis. For 2017, we assumed a long-term rate of return on plan assets of 8.0%. In developing the expected long-term rate of return assumption, we reviewed asset class return expectations and long-term inflation assumptions and considered our historical compounded return, which was consistent with our long-term rate of return assumption. In determining the 2016 pension liability, we used the Society of Actuaries’ (“SOA”) RP-2014 mortality tables and the MP-2016 mortality improvement tables, which along with a lower discount rate, resulted in an increase in our benefit obligation and accumulated other comprehensive loss at December 31, 2016. For 2017, we adopted the updated MP-2017 mortality improvement tables. These new mortality tables, along with the lower discount rate, resulted in an increase in our benefit obligation and accumulated other comprehensive loss at December 31, 2017. Our investment goals are to achieve a combination of moderate growth of capital and income with moderate risk. Acceptable investment vehicles will include mutual funds, exchange-traded funds (ETFs), limited partnerships, and individual securities. Our target allocations for plan assets are 60% equities and 40% fixed income. Of the equity portion, 50% will be invested in passively managed securities using ETFs and the other 50% will be invested in actively managed investment vehicles. We address diversification by investing in mutual funds and ETFs which hold large, mid and small capitalization U.S. stocks, international (non-U.S.) equity, REITS, and real assets (consisting of inflation-linked bonds, real estate and natural resources). A sufficient percentage of investments will be readily marketable in order to be sold to fund benefit payment obligations as they become payable. The fair values of our pension assets as of December 31, 2017 by asset category are as follows (refer to NOTE 9 — Fair Value Measurements for a description of Level 1, Level 2 and Level 3 categories): Asset Category Total Level 1 Level 2 Level 3 Mutual funds/ETFs: Equity-large cap $ $ — — Equity-mid cap — — Equity-small cap — — Equity-international — — Fixed income — — Money market — — Total mutual funds/ETFs $ $ — — The fair values of our pension assets as of December 31, 2016 by asset category are as follows (refer to NOTE 9 — Fair Value Measurements for a description of Level 1, Level 2 and Level 3 categories): Asset Category Total Level 1 Level 2 Level 3 Corporate common stocks $ $ $ — $ — Mutual funds/ETFs: Equity-large cap — — Equity-mid cap — — Equity-small cap — — Equity-international — — Fixed income — — Real estate — — Money market — — Total mutual funds/ETFs — — Grand total $ $ $ — $ — We have no minimum required pension contributions for 2018, but will consider making additional contributions. Estimated future benefit payments are as follows: 2018 $ 2019 $ 2020 $ 2021 $ 2022 $ 2023-2027 $ We also maintain a non-elective, non-qualified supplemental executive retirement plan (“SERP”) which provides deferred compensation to certain highly compensated employees that approximates the value of benefits lost by the freezing of the pension plan which are not offset by our enhanced matching contributions in our 401(k) plan. The SERP is a discretionary defined contribution plan and contributions made to the SERP in any given year are not guaranteed and will be at the sole discretion of our Compensation and Stock Incentive Committee. In 2017, 2016 and 2015, we recorded expenses of $80,000, $96,000 and $81,000, respectively, related to the SERP. During 2017, 2016 and 2015, we contributed $96,000, $81,000 and $72,000 to the plan, respectively. The liability for SERP pension benefits was $81,000 and $97,000 as of December 31, 2017 and 2016, respectively, and is included in accrued liabilities in our consolidated balance sheets. We maintain a defined contribution 401(k) plan that permits participation by substantially all employees. Our matching contributions to the 401(k) plan were $123,000, $128,000 and $124,000 in 2017, 2016 and 2015, respectively. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity | |
Stockholders' Equity | NOTE 8 — Stockholders’ Equity Changes in the components of stockholders’ equity are as follows (in thousands, except per share amounts): Common Class A Additional Accumulated Accumulated Balance at December 31, 2014 $ $ $ $ ) $ ) Net earnings — — — — Dividends paid, $0.05 per share — — — ) — Issuance of restricted stock awards, net of forfeitures — ) — — Stock-based compensation — — — — Repurchase and retirement of common stock ) — ) — — Unrealized loss on available-for-sale securities, net of income tax benefit of $12 — — — — ) Change in net actuarial loss and prior service cost, net of income tax expense of $152 — — — — Excess tax benefit on restricted stock — — — — Balance at December 31, 2015 ) ) Net earnings — — — — Dividends paid, $0.05 per share — — — ) — Issuance of restricted stock awards, net of forfeitures — ) — — Stock-based compensation — — — — Repurchase and retirement of common stock ) — ) — — Unrealized gain on available-for-sale securities, net of income tax expense of $6 — — — — Change in net actuarial loss and prior service cost, net of income tax benefit of $191 — — — — ) Excess tax benefit on restricted stock — — — — Balance at December 31, 2016 ) ) Net earnings — — — — Dividends paid, $0.08 per share — — — ) — Issuance of restricted stock awards, net of forfeitures — ) — — Stock-based compensation — — — — Repurchase and retirement of common stock ) — ) — — Unrealized gain on available-for-sale securities, net of income tax expense of $15 — — — — Change in net actuarial loss and prior service cost, net of income tax benefit of $48 — — — — ) Balance at December 31, 2017 $ $ $ $ ) $ ) As of December 31, 2017 and 2016, accumulated other comprehensive loss, net of income taxes, consists of the following: 2017 2016 Net actuarial loss and prior service cost not yet recognized in net periodic benefit cost, net of income tax benefit of $2,410,000 and $2,362,000, respectively $ ) $ ) Accumulated unrealized gain on available-for-sale securities, net of income tax expense of $52,000 and $37,000, respectively Accumulated other comprehensive loss $ ) $ ) Holders of common stock have one vote per share and holders of Class A common stock have ten votes per share. There is no cumulative voting. Shares of Class A common stock are convertible at any time into shares of common stock on a share for share basis at the option of the holder thereof. Dividends on Class A common stock cannot exceed dividends on common stock on a per share basis. Dividends on common stock may be paid at a higher rate than dividends on Class A common stock. The terms and conditions of each issue of preferred stock are determined by our Board of Directors. No preferred shares have been issued. Effective June 14, 2016, we adopted a stockholder rights plan. The rights are attached to and trade in tandem with our common stock. The rights, unless earlier redeemed by our board of directors, will detach and trade separately from our common stock only upon the occurrence of certain events such as the unsolicited acquisition by a third party of beneficial ownership of 10% or more of our outstanding combined common stock and Class A common stock or the announcement by a third party of the intent to commence a tender or exchange offer for 10% or more of our outstanding combined common stock and Class A common stock. After the rights have detached, the holders of such rights would generally have the ability to purchase such number of either shares of our common stock or stock of an acquirer of our company having a market value equal to twice the exercise price of the right being exercised, thereby causing substantial dilution to a person or group of persons attempting to acquire control of our company. The rights may serve as a significant deterrent to unsolicited attempts to acquire control of us, including transactions involving a premium to the market price of our stock. The rights expire on June 13, 2026, unless earlier redeemed. On July 28, 2004, our Board of Directors authorized the repurchase of up to 2,000,000 shares of our outstanding common stock. The purchases may be made in the open market or in privately negotiated transactions as conditions warrant. The repurchase authorization has no expiration date, does not obligate us to acquire any specific number of shares and may be suspended at any time. During 2017 and 2016, we purchased and retired 130,741 and 37,813 shares of our outstanding common stock at an average purchase price of $2.07 and $2.22 per share, respectively, not including nominal brokerage commissions. At December 31, 2017, we had remaining repurchase authority of 1,009,577 shares. During the years ended December 31, 2017, 2016 and 2015, we purchased and retired 46,179, 44,311 and 49,078 shares of our outstanding common stock at an average purchase price of $2.27, $2.33 and $2.46 per share, respectively. These purchases were made from employees in connection with the vesting of restricted stock awards under our Stock Incentive Plan and were not pursuant to the aforementioned repurchase authorization. Since the vesting of a restricted stock award is a taxable event to our employees for which income tax withholding is required, the plan allows employees to surrender to us some of the shares that would otherwise have transferred to the employee in satisfaction of their tax liability. The surrender of these shares is treated by us as a purchase of the shares. We have a stock incentive plan, adopted in 2014, which provides for the grant of up to 2,000,000 shares of common stock to our officers and key employees through stock options and/or awards valued in whole or in part by reference to our common stock, such as nonvested restricted stock awards. Under the plan, nonvested restricted stock vests an aggregate of twenty percent each year beginning on the second anniversary date of the grant. The aggregate market value of the nonvested restricted stock at the date of issuance is being amortized on a straight-line basis over the six-year period. As of December 31, 2017, there were 1,572,059 shares available for granting options or stock awards. Nonvested restricted stock activity for the year ended December 31, 2017 was as follows: Number of Weighted Nonvested at December 31, 2016 $ Granted $ Vested ) $ Nonvested at December 31, 2017 $ The aggregate market value of the nonvested restricted stock at the date of issuance is being amortized on a straight-line basis over the six-year service period or the service period remaining until normal retirement age, if shorter. The total fair value of shares vested during the years ended December 31, 2017, 2016 and 2015 based on the weighted average grant date fair value was $267,000, $261,000 and $274,000, respectively. The grant-date fair value per share of nonvested restricted stock awards granted during the years ended December 31, 2017, 2016 and 2015 was $2.27, $2.33 and $2.44, respectively. We recorded compensation expense of $364,000, $284,000 and $316,000 related to restricted stock awards for the years ended December 31, 2017, 2016 and 2015, respectively. As of December 31, 2017, there was $691,000 of total unrecognized compensation cost related to nonvested restricted stock awards granted to employees under our stock incentive plan. That cost is expected to be recognized over a weighted-average period of 3.8 years. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | NOTE 9 — Fair Value Measurements Our financial instruments are classified and disclosed in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). The following table summarizes the valuation of our financial instrument pricing levels as of December 31, 2017 and 2016: Total Level 1 Level 2 Level 3 2017 Available-for-sale securities $ $ $ — $ — 2016 Available-for-sale securities $ $ $ — $ — Our investments in available-for-sale securities consist of mutual funds. These investments are included in other assets on our consolidated balance sheets. The carrying amounts of other financial instruments reported in our consolidated balance sheets for current assets and current liabilities approximate their fair values because of the short maturity of these instruments. At December 31, 2017 and 2016, there was $3,240,000 and $3,840,000, respectively, outstanding under our revolving credit agreement. The borrowings under our revolving credit agreement bear interest at the variable rate described in NOTE 5 — Long-Term Debt and therefore we believe approximate fair value. The following table summarizes the valuation of our pricing levels for non-financial assets that are measured at fair value on a non-recurring basis as of December 31, 2017 and 2016: Total Level 1 Level 2 Level 3 Long-lived assets held for sale $ $ — $ — $ Fair value of the long-lived assets held for sale was determined using a valuation methodology which gave specific consideration to the value of the owned real estate. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions | |
Related Party Transactions | NOTE 10 — Related Party Transactions During the years ended December 31, 2017, 2016 and 2015, Dover Downs Gaming & Entertainment, Inc. (“Gaming”), a company related through common ownership, allocated costs of $1,862,000, $1,952,000 and $1,851,000, respectively, to us for certain administrative and operating services, including leased space. We allocated certain administrative and operating service costs of $187,000, $158,000 and $252,000, respectively, to Gaming for the years ended December 31, 2017, 2016 and 2015. The allocations were based on an analysis of each company’s share of the costs. In connection with our NASCAR event weekends at Dover International Speedway, Gaming provided certain services, primarily catering, for which we were invoiced $903,000, $876,000 and $836,000, during the years ended December 31, 2017, 2016 and 2015, respectively. Additionally, we invoiced Gaming $224,000, $200,000 and $230,000, during 2017, 2016 and 2015, respectively, for tickets, display space, our commission for suite catering and other services to the events. As of December 31, 2017 and 2016, our consolidated balance sheets included $7,000 of payables to Gaming for the aforementioned items. We settled these items in January of 2018 and 2017. The net costs incurred by each company for these services are not necessarily indicative of the costs that would have been incurred if the companies had been unrelated entities and/or had otherwise independently managed these functions; however, management believes that these costs are reasonable. Prior to the spin-off of Gaming from our company in 2002, both companies shared certain real property in Dover, Delaware. At the time of the spin-off, some of this real property was transferred to Gaming to ensure that the real property holdings of each company was aligned with its past uses and future business needs. During its harness racing season, Gaming has historically used the 5/8-mile harness racing track that is located on our property and is on the inside of our one-mile motorsports superspeedway. In order to continue this historic use, we granted a perpetual easement to the harness track to Gaming at the time of the spin-off. This perpetual easement allows Gaming to have exclusive use of the harness track during the period beginning November 1 of each year and ending April 30 of the following year, together with set up and tear down rights for the two weeks before and after such period. The easement requires that Gaming maintain the harness track but does not require the payment of any rent. Various easements and agreements relative to access, utilities and parking have also been entered into between us and Gaming relative to our respective Dover, Delaware facilities. We pay rent to Gaming for the lease of our principal executive office space. Gaming also allows us to use its indoor grandstands in connection with our two annual motorsports weekends. This occasional grandstand use is not material to us and Gaming does not assess rent for it; Gaming may also discontinue our use at its discretion. In April of 2002, we spun-off our gaming business which was then owned by our subsidiary, Dover Downs Gaming & Entertainment, Inc. On a tax-free basis, we made a pro rata distribution of all of the capital stock of Gaming to our stockholders. Our continuing operations subsequent to the spin-off consist solely of our motorsports activities. In conjunction with the spin-off of Gaming by us, the two companies entered into various agreements that addressed the allocation of assets and liabilities between the two companies and that define the companies’ relationship after the separation. Among these are the Real Property Agreement and the Transition Support Services Agreement. The Real Property Agreement governs certain real property transfers, leases and easements affecting our Dover, Delaware facility. The Transition Support Services Agreement provides for each of the two companies to provide each other with certain administrative and operational services. The party receiving the services is required to pay for them within 30 business days after receipt of an invoice at rates agreed upon by the companies. The agreement may be terminated in whole or in part 90 days after the request of the party receiving the services or 180 days after the request of the party providing the services. Henry B. Tippie, Chairman of our Board of Directors, controls in excess of fifty percent of our voting power. Mr. Tippie’s voting control emanates from his direct and indirect holdings of common stock and Class A common stock and from his status as trustee of the RMT Trust, our largest stockholder. This means that Mr. Tippie has the ability to determine the outcome of the election of directors and to determine the outcome of many significant corporate transactions, many of which only require the approval of a majority of our voting power. Patrick J. Bagley, Timothy R. Horne, Denis McGlynn, Jeffrey W. Rollins, R. Randall Rollins, Richard K. Struthers and Henry B. Tippie are all Directors of Dover Motorsports, Inc. and Gaming. Denis McGlynn is the President and Chief Executive Officer of both companies, Klaus M. Belohoubek is the Senior Vice President — General Counsel and Secretary of both companies and Timothy R. Horne is the Senior Vice President — Finance and Chief Financial Officer of both companies. Mr. Tippie controls in excess of fifty percent of the voting power of Gaming. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | NOTE 11 — Commitments and Contingencies We lease equipment with leases expiring at various dates through 2021. Total rental expense charged to operations amounted to $67,000, $68,000 and $77,000 for the years ended December 31, 2017, 2016 and 2015, respectively. In September 1999, the Sports Authority of the County of Wilson (Tennessee) issued $25,900,000 in Variable Rate Tax Exempt Infrastructure Revenue Bonds, Series 1999, to acquire, construct and develop certain public infrastructure improvements which benefit Nashville Superspeedway, of which $15,400,000 was outstanding at December 31, 2017. Annual principal payments range from $1,000,000 in September 2018 to $1,600,000 in 2029 and are payable solely from sales taxes and incremental property taxes generated from the facility. These bonds are direct obligations of the Sports Authority and therefore have historically not been required to be recorded on our consolidated balance sheet. If the sales taxes and incremental property taxes (“applicable taxes”) are insufficient for the payment of principal and interest on the bonds, we would become responsible for the difference. In the event we were unable to make the payments, they would be made pursuant to a $15,658,000 irrevocable direct-pay letter of credit issued by our bank group. We are exposed to fluctuations in interest rates for these bonds. As of December 31, 2017 and 2016, $1,479,000 and $1,761,000, respectively, was available in the sales and incremental property tax fund maintained by the Sports Authority to pay the remaining principal and interest due under the bonds. During 2017, we paid $970,000 into the sales and incremental property tax fund and $1,252,000 was deducted from the fund for debt service. If we fail to maintain the letter of credit that secures the bonds or we allow an uncured event of default to exist under our reimbursement agreement relative to the letter of credit, the bonds would be immediately redeemable. Nashville Superspeedway no longer promotes motorsports events and has not entered into sanction agreements with NASCAR since 2011. We lease the facility on a short term basis to third parties from time to time. In 2011 we recorded a $2,250,000 provision for contingent obligation reflecting the present value of the estimated portion of the revenue bonds debt service that may not be covered by the projected sales and incremental property taxes from the facility. Due to changing interest rates, the provision for contingent obligation increased (decreased) by $158,000, $75,000 and ($86,000) in 2017, 2016 and 2015, respectively, and is $1,960,000 at December 31, 2017. An increase in the bonds’ interest rates would result in an increase in the portion of debt service not covered by applicable taxes and therefore an increase in our liability. We have employment, severance and noncompete agreements with certain of our officers and directors under which certain change of control, severance and noncompete payments and benefits might become payable in the event of a change in our control, defined to include a tender offer or the closing of a merger or similar corporate transactions. In the event of such a change in control and the subsequent termination of employment of all employees covered under these agreements, we estimate that the maximum contingent liability would range from $7,300,000 to $9,000,000 depending on the tax treatment of the payments. To the extent that any of the potential payments or benefits due under the agreements constitute an excess “parachute payment” under the Internal Revenue Code and result in the imposition of an excise tax, each agreement requires that we pay the amount of such excise tax plus any additional amounts necessary to place the officer or director in the same after-tax position as he would have been had no excise tax been imposed. We estimate that the tax gross ups that could be paid under the agreements in the event the agreements were triggered due to a change of control could be between $1,000,000 and $2,700,000 and these amounts have been included in the maximum contingent liability disclosed above. This maximum tax gross up figure assumes that none of the payments made after the hypothetical change in control would be characterized as reasonable compensation for services rendered. Each agreement with an executive officer provides that fifty percent of the monthly amount paid during the term is paid in consideration of the executive officer’s non-compete covenants. The exclusion of these amounts would reduce the calculated amount of excess parachute payments subject to tax. We are unable to conclude whether the Internal Revenue Service would characterize all or some of these non-compete payments as reasonable compensation for services rendered. We are also a party to ordinary routine litigation incidental to our business. Management does not believe that the resolution of any of these matters is likely to have a material adverse effect on our results of operations, financial position or cash flows. |
Quarterly Results (unaudited)
Quarterly Results (unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Results (unaudited) | |
Quarterly Results (unaudited) | NOTE 12 — Quarterly Results ( unaudited) March 31(a)(b) June 30(b) September 30(b) December 31(a)(b) Year Ended December 31, 2017 Revenues $ $ $ $ Operating (loss) earnings $ ) $ $ ) $ Net (loss) earnings $ ) $ $ ) $ Net (loss) earnings per share — basic and diluted $ ) $ $ ) $ Year Ended December 31, 2016 Revenues $ $ $ $ Operating (loss) earnings $ ) $ $ ) $ Net (loss) earnings $ ) $ $ ) $ Net (loss) earnings per share — basic and diluted $ ) $ $ ) $ (a) During the first quarter of 2017 and fourth quarter of 2016, we recorded costs to remove long-lived assets of $286,000 ($167,000 after income taxes) and $203,000 ($121,000 after income taxes), respectively, related to the removal and disposal of certain grandstand seating. See NOTE 3 — Property and Equipment. In the fourth quarter of 2017, we made the decision to not complete certain facility improvements. Costs previously capitalized of $186,000 ($110,000 after income taxes) were charged to depreciation expense. See NOTE 3 — Property and Equipment. In the fourth quarter of 2017, the passage of the Tax Cuts and Jobs Act lowered our future federal income tax rate to 21% requiring us to revalue net deferred federal tax liabilities. As a result, net earnings and net earnings per share — basic and diluted increased by $4,531,000 and $0.13, respectively. See NOTE 6 — Income Taxes. (b) In the first quarter of 2016, we began a renovation project of certain track related assets that was completed in the first quarter of 2017. As a result, we adjusted the service lives of those assets to properly reflect their shortened estimated useful life. This resulted in accelerated depreciation of $91,000 ($54,000 after income taxes), $68,000 ($40,000 after income taxes), $25,000 ($15,000 after income taxes) and $24,000 ($14,000 after income taxes) being recorded in the first, second, third and fourth quarters of 2016, respectively. See NOTE 3 — Property and Equipment. Per share data amounts for the quarters have each been calculated separately. Accordingly, quarterly amounts may not add to the annual amounts due to differences in the weighted-average common shares outstanding during each period. Our operations are seasonal in nature. In 2017, three NASCAR racing events were held in the second quarter, two were held in the third quarter and one was held in the fourth quarter. In 2016, we promoted three NASCAR racing events in the second quarter, one in the third quarter and two in the fourth quarter. |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Basis of consolidation and presentation | Basis of consolidation and presentation— The accompanying consolidated financial statements include the accounts of Dover Motorsports, Inc. and our wholly owned subsidiaries. Intercompany transactions and balances have been eliminated. |
Investments | Investments— Investments, which consist of mutual funds, are classified as available-for-sale and reported at fair-value in other assets in our consolidated balance sheets. Changes in fair value are reported in other comprehensive income. See NOTE 7 — Pension Plans, NOTE 8 — Stockholders’ Equity and NOTE 9 — Fair Value Measurements for further discussion. |
Accounts receivable | Accounts receivable— Accounts receivable are stated at their estimated collectible amount and do not bear interest. |
Inventories | Inventories— Inventories of items for resale are stated at the lower of cost or net realizable value with cost being determined on the first-in, first-out basis. |
Property and equipment | Property and equipment— Property and equipment is stated at cost. Depreciation is provided using the straight-line method over the following estimated useful lives: Facilities 10-40 years Furniture, fixtures and equipment 3-10 years |
Impairment of long-lived assets | Impairment of long-lived assets— Long-lived assets are assessed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss is measured as the amount by which the carrying amount of the asset exceeds its fair value. Generally, fair value is determined using valuation techniques such as the comparable sales approach based on either independent third party appraisals or pending/completed sales transactions. |
Income taxes | Income taxes— Deferred income taxes are provided on all differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements based upon enacted statutory tax rates in effect at the balance sheet date. We record a valuation allowance to reduce our deferred tax assets when uncertainty regarding their realizability exists. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that has a greater than 50% likelihood of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. As of December 31, 2017, our valuation allowance on state net operating loss carry-forwards net of federal income taxes was $8,291,000, which decreased by $163,000 in 2017. These state net operating losses are related to our Midwest facilities that have not produced taxable income. As such, the valuation allowances fully reserve the state net operating loss carryforwards, net of federal tax benefit. |
Revenue recognition | Revenue recognition— We classify our revenues as admissions, event-related, broadcasting and other. “Admissions” revenue includes ticket sales for all of our events. “Event-related” revenue includes amounts received from sponsorship fees; luxury suite rentals; hospitality tent rentals and catering; concessions and vendor commissions for the right to sell concessions and souvenirs at our facilities; sales of programs; track rentals; broadcasting rights other than domestic television broadcasting revenue and other event-related revenues. Additionally, event related revenue includes amounts received for the use of our property and a portion of the concession sales we manage from the Firefly Music Festival and the Big Barrel Country Music Festival (in 2015 only). “Broadcasting” revenue includes rights fees obtained for domestic television broadcasts of events held at our speedway. Revenues pertaining to specific events are deferred until the event is held. Concession and souvenir revenues are recorded at the time of sale. Revenues and related expenses from barter transactions in which we provide sponsorship packages in exchange for goods or services are recorded at fair value. Barter transactions accounted for $612,000, $400,000 and $721,000 of total revenues for the years ended December 31, 2017, 2016 and 2015, respectively. Under the terms of our sanction agreements with NASCAR, we receive a portion of the broadcast revenue NASCAR negotiates with various television networks. NASCAR retains 10% of the gross broadcast rights fees allocated to each NASCAR-sanctioned event as a component of its sanction fee. The remaining 90% is recorded as revenue. The event promoter is required to pay 25% of the gross broadcast rights fees to the event as part of the awards to the competitors, which we record as operating expenses. |
Expense recognition | Expense recognition— The cost of non-event related advertising, promotion and marketing programs is expensed as incurred. Certain direct expenses pertaining to specific events, including prize and point fund monies and sanction fees paid to NASCAR, a majority of our marketing expenses and other expenses associated with the promotion of our racing events are deferred until the event is held, at which point they are expensed. Advertising expenses were $1,195,000, $1,202,000 and $1,364,000 in 2017, 2016 and 2015, respectively. |
Net earnings per common share | Net earnings per common share— Nonvested share-based payment awards that include rights to dividends or dividend equivalents, whether paid or unpaid, are considered participating securities, and the two-class method of computing basic and diluted net earnings per common share (“EPS”) is applied for all periods presented. The following table sets forth the computation of EPS (in thousands, except per share amounts): 2017 2016 2015 Net earnings per common share — basic and diluted: Net earnings $ $ $ Allocation to nonvested restricted stock awards Net earnings available to common stockholders $ $ $ Weighted-average shares outstanding Net earnings per common share — basic and diluted $ $ $ There were no options outstanding during 2017, 2016 or 2015. |
Accounting for stock-based compensation | Accounting for stock-based compensation— We recorded total stock-based compensation expense for our restricted stock awards of $364,000, $284,000 and $316,000 as general and administrative expenses for the years ended December 31, 2017, 2016 and 2015, respectively. We recorded income tax benefits of $167,000, $115,000 and $128,000 for the years ended December 31, 2017, 2016 and 2015, respectively, related to vesting of our restricted stock awards. |
Use of estimates | Use of estimates— The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the reported amounts of assets and liabilities, disclosures about contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions are based on our best estimates and judgment. We evaluate our estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment, which we believe to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. Volatility in credit and equity markets and declines in consumer spending have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual results could differ from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the consolidated financial statements in future periods. |
Recent accounting pronouncements | Recent accounting pronouncements —In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which provides the option to reclassify certain income tax effects related to the Tax Cuts and Jobs Act passed in December of 2017 between accumulated other comprehensive income and retained earnings and also requires additional disclosures. The amendments in this ASU are effective for all entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, with early adoption permitted. Adoption of this ASU is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the tax laws or rates were recognized. We are currently analyzing the impact of this ASU and, at this time, we have not yet determined whether we will elect to make this optional reclassification. In March 2017, the FASB issued ASU No. 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (Topic 715) . ASU 2017-07 provides guidance on the presentation of the service cost component and the other components of net period pension cost in the consolidated statements of earnings. The standard is effective for annual and interim reporting periods beginning after December 15, 2017 and requires retrospective adoption. We adopted this ASU in the first quarter of 2018, which did not have a material impact to our consolidated financial statements. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments , which provides guidance on how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The update is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We adopted this ASU in the first quarter of 2018. The adoption of this ASU did not have an impact on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , which is intended to simplify various aspects of the accounting for share-based payments, including treatment of excess tax benefits, forfeitures, consideration of minimum statutory tax withholding requirements and classification on the statement of cash flows. The update is effective for annual periods beginning after December 15, 2016, including interim periods within those annual periods. We adopted this ASU in the first quarter of 2017, which did not have a material impact to our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires that lessees recognize assets and liabilities for leases with lease terms greater than twelve months in the statement of financial position and also requires improved disclosures to help users of financial statements better understand the amount, timing and uncertainty of cash flows arising from leases. The update is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within those fiscal years. Early adoption is permitted. We are currently analyzing the impact of this ASU and, at this time, we are unable to determine the impact on the new standard, if any, on our consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory , which requires companies to measure inventory at lower of cost and net realizable value, versus lower of cost or market. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The update is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. We adopted this ASU in the first quarter of 2017, which did not have an impact to our consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers , which supersedes nearly all existing revenue recognition guidance under accounting principles generally accepted in the United States of America. The FASB issued several amendments to the standard, including clarification on accounting for and identifying performance obligations. The standard can be applied using the full retrospective method or retrospectively with the cumulative effect initially applying the guidance recognized at the date of initial application. The new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. Additionally, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The update is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We will adopt this standard effective January 1, 2018 using the retrospective with cumulative effect method. We are in the process of finalizing our review of our sponsorship agreements, sanctioning agreements and other contracts, as well as our review of the accounting for certain costs associated with our events. While we continue to assess all potential impacts of the new standard, including quarterly impacts, we do not currently expect that the adoption of the new revenue standard will have a material impact on our annual revenues, results of operations or financial position. However, we will expand certain disclosures as required. |
Reclassifications | Reclassifications— Certain amounts in the prior year financial statements have been reclassified to conform to the current-year presentation. The impact of the reclassifications made to prior year amounts are not material and did not affect net earnings. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Significant Accounting Policies | |
Schedule of estimated useful lives of property and equipment | Facilities 10-40 years Furniture, fixtures and equipment 3-10 years |
Schedule of the computation of EPS | The following table sets forth the computation of EPS (in thousands, except per share amounts): 2017 2016 2015 Net earnings per common share — basic and diluted: Net earnings $ $ $ Allocation to nonvested restricted stock awards Net earnings available to common stockholders $ $ $ Weighted-average shares outstanding Net earnings per common share — basic and diluted $ $ $ |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property and Equipment | |
Schedule of components of property and equipment | 2017 2016 Land $ $ Facilities Furniture, fixtures and equipment Construction in progress Less accumulated depreciation ) ) $ $ |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accrued Liabilities | |
Schedule of accrued liabilities | 2017 2016 Payroll and related items $ $ Real estate taxes Pension Other $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Taxes | |
Schedule of current and deferred income tax benefit (expense) | Years ended December 31, 2017 2016 2015 Current: Federal $ ) $ ) $ ) State ) ) ) ) ) ) Deferred: Federal State ) Total income tax benefit (expense) $ $ ) $ ) |
Schedule of reconciliation of the effective income tax rate with the applicable statutory federal income tax rate | Years ended December 31, 2017 2016 2015 Federal tax at statutory rate % % % State taxes, net of federal benefit % % % Valuation allowance )% )% )% Tax Cuts and Jobs Act )% — — Other )% )% )% Effective income tax rate )% % % |
Schedule of deferred income tax assets and liabilities | 2017 2016 Deferred income tax assets: Accruals not currently deductible for income taxes $ $ Net operating loss carry-forwards Total deferred income tax assets Valuation allowance ) ) Net deferred income tax assets Deferred income tax liabilities: Depreciation ) ) Total deferred income tax liabilities ) ) Net deferred income tax liability $ ) $ ) Amounts recognized in the consolidated balance sheets: Noncurrent deferred income tax liabilities $ ) $ ) |
Pension Plans (Tables)
Pension Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Pension Plans | |
Schedule of defined benefit plans' funded status and amounts recognized in the entity's consolidated balance sheets | 2017 2016 Change in benefit obligation: Benefit obligation at beginning of year $ $ Interest cost Actuarial loss Benefits paid ) ) Benefit obligation at end of year Change in plan assets: Fair value of plan assets at beginning of year Actual gain on plan assets Employer contribution — Benefits paid ) ) Other Fair value of plan assets at end of year Unfunded status $ ) $ ) |
Schedule of amounts recognized in the entity's consolidated balance sheets | 2017 2016 Accrued liabilities $ ) $ ) Liability for pension benefits ) ) $ ) $ ) |
Schedule of amounts expected to recognized as components of net periodic benefit (expense), which are included in accumulated other comprehensive loss | 2017 2016 Net actuarial loss, pre-tax $ $ |
Schedule of components of net periodic pension benefit for defined benefit pension plans | 2017 2016 2015 Interest cost $ $ $ Expected return on plan assets ) ) ) Recognized net actuarial loss $ ) $ ) $ ) |
Schedule of amounts included in accumulated comprehensive loss which are expected to be recognized as components of net periodic benefit (expense) in next fiscal year | Actuarial loss $ |
Schedule of principal assumptions used to determine the net periodic pension benefit and the actuarial value of the benefit obligation | Net Periodic Pension Cost Benefit Obligation 2017 2016 2015 2017 2016 Weighted-average discount rate % % % % % Weighted-average rate of compensation increase n/a n/a n/a n/a n/a Expected long-term rate of return on plan assets % % % n/a n/a |
Schedule of fair values of the entity's pension assets | The fair values of our pension assets as of December 31, 2017 by asset category are as follows (refer to NOTE 9 — Fair Value Measurements for a description of Level 1, Level 2 and Level 3 categories): Asset Category Total Level 1 Level 2 Level 3 Mutual funds/ETFs: Equity-large cap $ $ — — Equity-mid cap — — Equity-small cap — — Equity-international — — Fixed income — — Money market — — Total mutual funds/ETFs $ $ — — The fair values of our pension assets as of December 31, 2016 by asset category are as follows (refer to NOTE 9 — Fair Value Measurements for a description of Level 1, Level 2 and Level 3 categories): Asset Category Total Level 1 Level 2 Level 3 Corporate common stocks $ $ $ — $ — Mutual funds/ETFs: Equity-large cap — — Equity-mid cap — — Equity-small cap — — Equity-international — — Fixed income — — Real estate — — Money market — — Total mutual funds/ETFs — — Grand total $ $ $ — $ — |
Schedule of estimated future benefit payments | 2018 $ 2019 $ 2020 $ 2021 $ 2022 $ 2023-2027 $ |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity | |
Schedule of the changes in the components of stockholders' equity | Changes in the components of stockholders’ equity are as follows (in thousands, except per share amounts): Common Class A Additional Accumulated Accumulated Balance at December 31, 2014 $ $ $ $ ) $ ) Net earnings — — — — Dividends paid, $0.05 per share — — — ) — Issuance of restricted stock awards, net of forfeitures — ) — — Stock-based compensation — — — — Repurchase and retirement of common stock ) — ) — — Unrealized loss on available-for-sale securities, net of income tax benefit of $12 — — — — ) Change in net actuarial loss and prior service cost, net of income tax expense of $152 — — — — Excess tax benefit on restricted stock — — — — Balance at December 31, 2015 ) ) Net earnings — — — — Dividends paid, $0.05 per share — — — ) — Issuance of restricted stock awards, net of forfeitures — ) — — Stock-based compensation — — — — Repurchase and retirement of common stock ) — ) — — Unrealized gain on available-for-sale securities, net of income tax expense of $6 — — — — Change in net actuarial loss and prior service cost, net of income tax benefit of $191 — — — — ) Excess tax benefit on restricted stock — — — — Balance at December 31, 2016 ) ) Net earnings — — — — Dividends paid, $0.08 per share — — — ) — Issuance of restricted stock awards, net of forfeitures — ) — — Stock-based compensation — — — — Repurchase and retirement of common stock ) — ) — — Unrealized gain on available-for-sale securities, net of income tax expense of $15 — — — — Change in net actuarial loss and prior service cost, net of income tax benefit of $48 — — — — ) Balance at December 31, 2017 $ $ $ $ ) $ ) |
Schedule of accumulated other comprehensive loss, net of income taxes | 2017 2016 Net actuarial loss and prior service cost not yet recognized in net periodic benefit cost, net of income tax benefit of $2,410,000 and $2,362,000, respectively $ ) $ ) Accumulated unrealized gain on available-for-sale securities, net of income tax expense of $52,000 and $37,000, respectively Accumulated other comprehensive loss $ ) $ ) |
Schedule of nonvested restricted stock activity | Number of Weighted Nonvested at December 31, 2016 $ Granted $ Vested ) $ Nonvested at December 31, 2017 $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Measurements | |
Summary of the valuation of financial instrument pricing levels | Total Level 1 Level 2 Level 3 2017 Available-for-sale securities $ $ $ — $ — 2016 Available-for-sale securities $ $ $ — $ — |
Summary of the valuation of pricing levels for non-financial assets that are measured at fair value on a non-recurring basis | Total Level 1 Level 2 Level 3 Long-lived assets held for sale $ $ — $ — $ |
Quarterly Results (unaudited) (
Quarterly Results (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Results (unaudited) | |
Schedule of quarterly results | March 31(a)(b) June 30(b) September 30(b) December 31(a)(b) Year Ended December 31, 2017 Revenues $ $ $ $ Operating (loss) earnings $ ) $ $ ) $ Net (loss) earnings $ ) $ $ ) $ Net (loss) earnings per share — basic and diluted $ ) $ $ ) $ Year Ended December 31, 2016 Revenues $ $ $ $ Operating (loss) earnings $ ) $ $ ) $ Net (loss) earnings $ ) $ $ ) $ Net (loss) earnings per share — basic and diluted $ ) $ $ ) $ (a) During the first quarter of 2017 and fourth quarter of 2016, we recorded costs to remove long-lived assets of $286,000 ($167,000 after income taxes) and $203,000 ($121,000 after income taxes), respectively, related to the removal and disposal of certain grandstand seating. See NOTE 3 — Property and Equipment. In the fourth quarter of 2017, we made the decision to not complete certain facility improvements. Costs previously capitalized of $186,000 ($110,000 after income taxes) were charged to depreciation expense. See NOTE 3 — Property and Equipment. In the fourth quarter of 2017, the passage of the Tax Cuts and Jobs Act lowered our future federal income tax rate to 21% requiring us to revalue net deferred federal tax liabilities. As a result, net earnings and net earnings per share — basic and diluted increased by $4,531,000 and $0.13, respectively. See NOTE 6 — Income Taxes. (b) In the first quarter of 2016, we began a renovation project of certain track related assets that was completed in the first quarter of 2017. As a result, we adjusted the service lives of those assets to properly reflect their shortened estimated useful life. This resulted in accelerated depreciation of $91,000 ($54,000 after income taxes), $68,000 ($40,000 after income taxes), $25,000 ($15,000 after income taxes) and $24,000 ($14,000 after income taxes) being recorded in the first, second, third and fourth quarters of 2016, respectively. See NOTE 3 — Property and Equipment. |
Business Operations (Details)
Business Operations (Details) - item | Jun. 18, 2017 | Jun. 28, 2015 | Jul. 31, 2012 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Operations | ||||||||||||
Number of events promoted | 1 | 2 | 3 | 2 | 1 | 3 | ||||||
Dover International Speedway | ||||||||||||
Business Operations | ||||||||||||
Number of events scheduled to be promoted | 6 | |||||||||||
RFGV Festivals | Dover International Speedway | ||||||||||||
Business Operations | ||||||||||||
Number of years Firefly Music Festival hosted | 5 years | |||||||||||
Number of options granted to extend rent agreement | 2 | |||||||||||
Dover Facility | ||||||||||||
Business Operations | ||||||||||||
Number of events promoted | 6 | |||||||||||
Percentage of total revenues | 96.00% | 97.00% | 97.00% | |||||||||
Number of years Firefly Music Festival hosted | 6 years | |||||||||||
Dover Facility | RFGV Festivals | Maximum | ||||||||||||
Business Operations | ||||||||||||
Number of events scheduled to be promoted | 2 | |||||||||||
Dover Facility | NASCAR Cup Series events | ||||||||||||
Business Operations | ||||||||||||
Number of events promoted | 2 | |||||||||||
Dover Facility | NASCAR XFINITY Series events | ||||||||||||
Business Operations | ||||||||||||
Number of events promoted | 2 | |||||||||||
Dover Facility | NASCAR Camping World Truck Series event | ||||||||||||
Business Operations | ||||||||||||
Number of events promoted | 1 | |||||||||||
Dover Facility | NASCAR K&N Pro Series East event | ||||||||||||
Business Operations | ||||||||||||
Number of events promoted | 1 | |||||||||||
Dover Facility | Firefly Music Festival ("Firefly") | ||||||||||||
Business Operations | ||||||||||||
Number of days the event is held | 3 days | |||||||||||
Number of music acts featured in the event | 140 | 40 | ||||||||||
Dover Facility | Big Barrel Country Music Festival | ||||||||||||
Business Operations | ||||||||||||
Number of days the event is held | 3 days | |||||||||||
Number of music acts featured in the event | 40 |
Business Operations - Assets he
Business Operations - Assets held for sale (Details) | Feb. 09, 2018USD ($)a | Jan. 22, 2018USD ($) | Sep. 01, 2017USD ($)a | May 29, 2014USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2017USD ($)a | Aug. 17, 2017USD ($)a | Dec. 31, 2016USD ($) |
Business Operations. | ||||||||||||
Assets held for sale | $ 2,455,000 | $ 2,455,000 | ||||||||||
Non-refundable deposit received on expected sale of facility | $ 1,200,000 | |||||||||||
Income from assets held for sale | 2,900,000 | |||||||||||
Nashville Superspeedway facility reported as long term assets | 23,545,000 | $ 23,545,000 | ||||||||||
Nashville Superspeedway | ||||||||||||
Business Operations. | ||||||||||||
Purchase price deposited into escrow | $ 5,151,300 | |||||||||||
Proceeds from sale of facility | $ 27,000,000 | |||||||||||
Non-refundable deposit received on expected sale of facility | $ 1,200,000 | $ 1,700,000 | ||||||||||
Income from assets held for sale | $ 1,867,000 | $ 606,000 | $ 427,000 | |||||||||
Number of business days | 3 days | |||||||||||
Nashville Superspeedway facility reported as long term assets | 23,545,000 | |||||||||||
Nashville Superspeedway | 147 Acres of Property | ||||||||||||
Business Operations. | ||||||||||||
Assets held for sale | $ 2,455,000 | |||||||||||
Number of acres of property | a | 147 | 147 | ||||||||||
Purchase price per acre | $ 35,000 | |||||||||||
Period of option to execute the agreement | 3 years | |||||||||||
Nashville Superspeedway | Additional 88.03 Acres of Property | ||||||||||||
Business Operations. | ||||||||||||
Number of acres of property | a | 88.03 | |||||||||||
Purchase price per acre | $ 55,000 | |||||||||||
Period of option to execute the agreement | 3 years | |||||||||||
Nashville Superspeedway | Additional 86.45 Acres of Property | ||||||||||||
Business Operations. | ||||||||||||
Number of acres of property | a | 86.45 | |||||||||||
Purchase price per acre | $ 66,685 | |||||||||||
Nashville Superspeedway | Additional 50.51 Acres of Property | ||||||||||||
Business Operations. | ||||||||||||
Number of acres of property | a | 50.51 | |||||||||||
Purchase price per acre | $ 35,000 | |||||||||||
Nashville Superspeedway | Total 224.99 Acres of Property | ||||||||||||
Business Operations. | ||||||||||||
Number of acres of property | a | 224.99 | |||||||||||
Total Purchase price | $ 12,374,418 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Facilities | Minimum | |
Property and equipment | |
Estimated useful lives | 10 years |
Facilities | Maximum | |
Property and equipment | |
Estimated useful lives | 40 years |
Furniture, fixtures and equipment | Minimum | |
Property and equipment | |
Estimated useful lives | 3 years |
Furniture, fixtures and equipment | Maximum | |
Property and equipment | |
Estimated useful lives | 10 years |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Income taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating loss carryforwards | |||
Valuation allowance for deferred tax assets | $ 8,291,000 | $ 8,454,000 | |
State and Local Jurisdiction | |||
Operating loss carryforwards | |||
Valuation allowance for deferred tax assets | 8,291,000 | ||
Decrease in valuation allowances | $ 163,000 | $ 1,872,000 | $ 78,000 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Revenue recognition (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue recognition | |||||||||||
Revenues from barter transaction providing sponsorship packages in exchange for goods or services | $ 612,000 | $ 400,000 | $ 721,000 | ||||||||
Percentage of gross broadcast rights fees retained by NASCAR | 10.00% | 10.00% | |||||||||
Percentage of gross broadcast rights fees recorded as revenue | 90.00% | 90.00% | |||||||||
Percentage of gross broadcast rights fees payable to the event as part of the awards to the competitors | 25.00% | 25.00% | |||||||||
Expense recognition | |||||||||||
Advertising expenses | $ 1,195,000 | 1,202,000 | 1,364,000 | ||||||||
Net earnings per common share - basic and diluted: | |||||||||||
Net earnings | 8,426,000 | 3,801,000 | 5,285,000 | ||||||||
Allocation to nonvested restricted stock awards | 133,000 | 61,000 | 82,000 | ||||||||
Net earnings available to common stockholders | $ 8,293,000 | $ 3,740,000 | $ 5,203,000 | ||||||||
Weighted-average shares outstanding | 36,275,000 | 36,232,000 | 36,156,000 | ||||||||
Net earnings per common share - basic and diluted | $ 0.21 | $ (0.06) | $ 0.14 | $ (0.07) | $ 0.09 | $ (0.06) | $ 0.14 | $ (0.06) | $ 0.23 | $ 0.10 | $ 0.14 |
Options outstanding (in shares) | 0 | 0 | 0 | 0 | 0 | ||||||
Restricted Stock | |||||||||||
Net earnings per common share - basic and diluted: | |||||||||||
Stock-based compensation expense | $ 364,000 | $ 284,000 | $ 316,000 | ||||||||
Income tax benefits related to vesting of restricted stock awards | $ 167,000 | $ 115,000 | $ 128,000 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property and equipment | ||||||
Gross | $ 110,787,000 | $ 109,837,000 | $ 110,787,000 | $ 109,837,000 | ||
Less accumulated depreciation | (59,787,000) | (57,114,000) | (59,787,000) | (57,114,000) | ||
Net | 51,000,000 | 52,723,000 | 51,000,000 | 52,723,000 | ||
Capitalized costs charged to depreciation | 186,000 | |||||
Depreciation | 3,566,000 | 3,433,000 | $ 5,326,000 | |||
Costs to remove long-lived assets | $ 286,000 | 203,000 | 286,000 | 203,000 | 40,000 | |
Land | ||||||
Property and equipment | ||||||
Gross | 15,916,000 | 15,916,000 | 15,916,000 | 15,916,000 | ||
Facilities | ||||||
Property and equipment | ||||||
Gross | 86,282,000 | 84,462,000 | 86,282,000 | 84,462,000 | ||
Furniture, fixtures and equipment | ||||||
Property and equipment | ||||||
Gross | 8,490,000 | 8,425,000 | 8,490,000 | 8,425,000 | ||
Construction in progress | ||||||
Property and equipment | ||||||
Gross | $ 99,000 | $ 1,034,000 | $ 99,000 | 1,034,000 | ||
Track Related Assets | ||||||
Property and equipment | ||||||
Depreciation | $ 208,000 | $ 2,216,000 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Accrued Liabilities | ||
Payroll and related items | $ 370,000 | $ 369,000 |
Real estate taxes | 972,000 | 996,000 |
Pension | 1,150,000 | 1,053,000 |
Other | 557,000 | 537,000 |
Total | $ 3,049,000 | $ 2,955,000 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Long-Term Debt | ||
Amount outstanding under the credit facility | $ 3,240,000 | $ 3,840,000 |
Credit Facility | ||
Long-Term Debt | ||
Maximum borrowing capacity under the credit facility | $ 35,000,000 | |
Reference rate | LIBOR | |
Amount outstanding under the credit facility | $ 3,240,000 | |
Interest rate on the amount outstanding (as a percent) | 2.82% | |
Remaining maximum borrowings available pursuant to the credit facility | $ 16,102,000 | |
Credit Facility | LIBOR | ||
Long-Term Debt | ||
Percentage points added to the reference rate | 125.00% | |
Credit Facility | LIBOR | Minimum | ||
Long-Term Debt | ||
Percentage points added to the reference rate | 125.00% | |
Credit Facility | LIBOR | Maximum | ||
Long-Term Debt | ||
Percentage points added to the reference rate | 175.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current: | |||
Federal | $ (1,835,000) | $ (2,456,000) | $ (3,349,000) |
State | (562,000) | (794,000) | (793,000) |
Total | (2,397,000) | (3,250,000) | (4,142,000) |
Deferred: | |||
Federal | 4,353,000 | 520,000 | 652,000 |
State | (67,000) | 141,000 | 176,000 |
Total | 4,286,000 | 661,000 | 828,000 |
Total income tax benefit (expense) | $ 1,889,000 | $ (2,589,000) | $ (3,314,000) |
Reconciliation of the effective income tax rate with the applicable statutory federal income tax rate | |||
Federal tax at statutory rate (as a percent) | 35.00% | 35.00% | 35.00% |
State taxes, net of federal benefit (as a percent) | 8.80% | 36.00% | 5.60% |
Valuation allowance (as a percent) | (2.50%) | (29.20%) | (0.90%) |
Tax Cuts and Jobs Act (as a percent) | (69.30%) | ||
Other (as a percent) | (0.90%) | (1.30%) | (1.20%) |
Effective income tax rate (as a percent) | (28.90%) | 40.50% | 38.50% |
Deferred income tax assets: | |||
Accruals not currently deductible for income taxes | $ 1,906,000 | $ 3,122,000 | |
Net operating loss carry-forwards | 8,928,000 | 8,990,000 | |
Total deferred income tax assets | 10,834,000 | 12,112,000 | |
Valuation allowance | (8,291,000) | (8,454,000) | |
Net deferred income tax assets | 2,543,000 | 3,658,000 | |
Deferred income tax liabilities: | |||
Depreciation | (11,216,000) | (16,569,000) | |
Total deferred income tax liability | (11,216,000) | (16,569,000) | |
Net deferred income tax liability | (8,673,000) | (12,911,000) | |
Amounts recognized in the consolidated balance sheets: | |||
Noncurrent deferred income tax liabilities | $ (8,673,000) | $ (12,911,000) |
Income Taxes - Carryforward and
Income Taxes - Carryforward and Valuation allowances (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Tax Cuts and Jobs Act, 2017 | |||||
Federal income tax rate (as a percent) | 35.00% | 35.00% | 35.00% | ||
Deferred income tax liabilities due to revalue of net deferred federal tax liabilities | $ 4,531,000 | ||||
Deferred income tax benefit due to decrease in net deferred income tax liabilities | $ 4,531,000 | ||||
Uncertain income tax positions | |||||
Interest expense recorded | 0 | $ 0 | $ 0 | ||
Liability for uncertain income tax matters | 0 | 0 | 0 | ||
Forecast | |||||
Tax Cuts and Jobs Act, 2017 | |||||
Federal income tax rate (as a percent) | 21.00% | ||||
State and Local Jurisdiction | |||||
Operating loss carryforwards | |||||
Net operating loss carryforwards | $ 163,998,000 | 163,998,000 | |||
Decrease in valuation allowances | $ (163,000) | $ (1,872,000) | $ (78,000) |
Pension Plans (Details)
Pension Plans (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Pension plans | |||
Fair values of pension assets | $ 10,299,000 | $ 8,166,000 | $ 7,956,000 |
The excess plan | |||
Pension plans | |||
Fair values of pension assets | $ 1,052,000 | $ 932,000 |
Pension Plans - Defined benefit
Pension Plans - Defined benefit plan (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Change in benefit obligation: | |||
Benefit obligation at beginning of year | $ 13,265,000 | $ 12,618,000 | |
Interest cost | 468,000 | 462,000 | $ 515,000 |
Actuarial loss | 914,000 | 447,000 | |
Benefits paid | (379,000) | (262,000) | |
Benefit obligation at end of year | 14,268,000 | 13,265,000 | 12,618,000 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 8,166,000 | 7,956,000 | |
Actual gain on plan assets | 1,293,000 | 468,000 | |
Employer contribution | 1,216,000 | ||
Benefits paid | (379,000) | (262,000) | |
Other | 3,000 | 4,000 | |
Fair value of plan assets at end of year | 10,299,000 | 8,166,000 | 7,956,000 |
Unfunded status | (3,969,000) | (5,099,000) | |
Amounts recognized in consolidated balance sheets | |||
Accrued liabilities | (1,150,000) | (1,053,000) | |
Liability for pension benefits | (2,819,000) | (4,046,000) | |
Total | (3,969,000) | (5,099,000) | |
Amounts recognized in accumulated other comprehensive loss that have not been recognized as components of net periodic benefit (expense) | |||
Net actuarial loss, pre-tax | 5,923,000 | 5,805,000 | |
Components of net periodic pension benefit | |||
Interest cost | 468,000 | 462,000 | 515,000 |
Expected return on plan assets | (644,000) | (622,000) | (643,000) |
Recognized net actuarial loss | 143,000 | 126,000 | 122,000 |
Total net periodic pension cost | (33,000) | $ (34,000) | $ (6,000) |
Amounts expected to recognized as components of net periodic benefit (expense), which are included in accumulated other comprehensive loss | |||
Actuarial loss | $ 146,000 | ||
Net Periodic Pension Cost | |||
Weighted-average discount rate (as a percent) | 4.20% | 4.40% | 4.10% |
Expected long-term rate of return on plan assets (as a percent) | 8.00% | 8.00% | 8.00% |
Benefit Obligation | |||
Weighted-average discount rate (as a percent) | 3.80% | 4.20% |
Pension Plans - Fair Value of P
Pension Plans - Fair Value of Pension and Estimated future benefit (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Pension plans | |||
Fair values of pension assets | $ 10,299,000 | $ 8,166,000 | $ 7,956,000 |
Minimum required pension contributions for 2018 | 0 | ||
Estimated future benefit payments | |||
2,018 | 1,621,000 | ||
2,019 | 519,000 | ||
2,020 | 540,000 | ||
2,021 | 547,000 | ||
2,022 | 552,000 | ||
2023-2027 | $ 3,209,000 | ||
Total | |||
Pension plans | |||
Fair values of pension assets | 8,166,000 | ||
Level 1 | |||
Pension plans | |||
Fair values of pension assets | 8,166,000 | ||
Equity Funds | |||
Pension plans | |||
Target allocations for plan assets (as a percent) | 60.00% | ||
Passively Managed Exchange Traded Funds | |||
Pension plans | |||
Target allocations for plan assets (as a percent) | 50.00% | ||
Actively Managed Exchange Traded Funds | |||
Pension plans | |||
Target allocations for plan assets (as a percent) | 50.00% | ||
Common Stock | Total | |||
Pension plans | |||
Fair values of pension assets | 665,000 | ||
Common Stock | Level 1 | |||
Pension plans | |||
Fair values of pension assets | 665,000 | ||
Total mutual funds/ETFs | Total | |||
Pension plans | |||
Fair values of pension assets | $ 10,299,000 | 7,501,000 | |
Total mutual funds/ETFs | Level 1 | |||
Pension plans | |||
Fair values of pension assets | 10,299,000 | 7,501,000 | |
Equity-large cap | Total | |||
Pension plans | |||
Fair values of pension assets | 2,347,000 | 1,906,000 | |
Equity-large cap | Level 1 | |||
Pension plans | |||
Fair values of pension assets | 2,347,000 | 1,906,000 | |
Equity-mid cap | Total | |||
Pension plans | |||
Fair values of pension assets | 1,298,000 | 791,000 | |
Equity-mid cap | Level 1 | |||
Pension plans | |||
Fair values of pension assets | 1,298,000 | 791,000 | |
Equity-small cap | Total | |||
Pension plans | |||
Fair values of pension assets | 1,200,000 | 161,000 | |
Equity-small cap | Level 1 | |||
Pension plans | |||
Fair values of pension assets | 1,200,000 | 161,000 | |
Equity-international | Total | |||
Pension plans | |||
Fair values of pension assets | 1,651,000 | 908,000 | |
Equity-international | Level 1 | |||
Pension plans | |||
Fair values of pension assets | $ 1,651,000 | 908,000 | |
Fixed income | |||
Pension plans | |||
Target allocations for plan assets (as a percent) | 40.00% | ||
Fixed income | Total | |||
Pension plans | |||
Fair values of pension assets | $ 2,520,000 | 3,065,000 | |
Fixed income | Level 1 | |||
Pension plans | |||
Fair values of pension assets | 2,520,000 | 3,065,000 | |
Real estate | Total | |||
Pension plans | |||
Fair values of pension assets | 453,000 | ||
Real estate | Level 1 | |||
Pension plans | |||
Fair values of pension assets | 453,000 | ||
Money market | Total | |||
Pension plans | |||
Fair values of pension assets | 1,283,000 | 217,000 | |
Money market | Level 1 | |||
Pension plans | |||
Fair values of pension assets | $ 1,283,000 | $ 217,000 |
Pension Plans - SERP (Details)
Pension Plans - SERP (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
SERP | |||
Deferred contribution plan | |||
Expenses recorded | $ 80,000 | $ 96,000 | $ 81,000 |
Employer contributions | 96,000 | 81,000 | 72,000 |
SERP | Accrued liabilities | |||
Deferred contribution plan | |||
Liability for pension benefits | 81,000 | 97,000 | |
401(k) plan | |||
Deferred contribution plan | |||
Expenses recorded | $ 123,000 | $ 128,000 | $ 124,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 12 Months Ended | |||
Dec. 31, 2017USD ($)Vote$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Jul. 28, 2004shares | |
Changes in the components of stockholders' equity | ||||
Balance at the beginning of the period | $ 53,805,000 | |||
Net earnings | 8,426,000 | $ 3,801,000 | $ 5,285,000 | |
Dividends paid | 2,944,000 | 1,840,000 | 1,837,000 | |
Unrealized gain (loss) on available-for-sale securities, net of income taxes | 22,000 | 8,000 | (17,000) | |
Change in net actuarial loss and prior service cost, net of income tax expense (benefit) | (70,000) | (279,000) | $ 223,000 | |
Balance at the end of the period | $ 59,222,000 | $ 53,805,000 | ||
Preferred stock, shares issued | shares | 0 | 0 | ||
Accumulated other comprehensive loss, net of income taxes | ||||
Net actuarial loss and prior service cost not yet recognized in net periodic benefit cost, net of income tax benefit of $2,410,000 and $2,362,000, respectively | $ (3,513,000) | $ (3,443,000) | ||
Accumulated unrealized gain on available-for-sale securities, net of income tax expense of $52,000 and $37,000, respectively | 73,000 | 51,000 | ||
Accumulated other comprehensive loss | (3,440,000) | (3,392,000) | ||
Income tax benefit on net actuarial loss and prior service cost not yet recognized in net periodic benefit cost | 2,410,000 | 2,362,000 | ||
Income tax expense on accumulated unrealized gain on available-for-sale securities | $ 52,000 | $ 37,000 | ||
Minimum percentage of common stock to be acquired for rights to detach and be traded separately from common stock | 10.00% | |||
Minimum percentage of common stock to be announced for tender or exchange for rights to detach and be traded separately from common stock | 10.00% | |||
Share Repurchase Authorization 2004 | ||||
Changes in the components of stockholders' equity | ||||
Number of shares purchased and retired | shares | 130,741 | 37,813 | ||
Average purchase price of shares purchased and retired (in dollars per share) | $ / shares | $ 2.07 | $ 2.22 | ||
Number of shares of common stock authorized to be repurchased | shares | 2,000,000 | |||
Remaining number of shares authorized to be repurchased | shares | 1,009,577 | |||
Restricted Stock | ||||
Changes in the components of stockholders' equity | ||||
Number of shares purchased and retired | shares | 46,179 | 44,311 | 49,078 | |
Average purchase price of shares purchased and retired (in dollars per share) | $ / shares | $ 2.27 | $ 2.33 | $ 2.46 | |
Class A Common Stock | ||||
Changes in the components of stockholders' equity | ||||
Number of votes per share | Vote | 10 | |||
Common Stock | Common Stock | ||||
Changes in the components of stockholders' equity | ||||
Balance at the beginning of the period | $ 1,828,000 | $ 1,822,000 | $ 1,812,000 | |
Issuance of restricted stock awards, net of forfeitures | 15,000 | 14,000 | 15,000 | |
Repurchase and retirement of common stock | (18,000) | (8,000) | (5,000) | |
Balance at the end of the period | $ 1,825,000 | 1,828,000 | 1,822,000 | |
Number of votes per share | Vote | 1 | |||
Common Stock | Class A Common Stock | ||||
Changes in the components of stockholders' equity | ||||
Balance at the beginning of the period | $ 1,851,000 | 1,851,000 | 1,851,000 | |
Balance at the end of the period | 1,851,000 | 1,851,000 | 1,851,000 | |
Additional Paid-in Capital | ||||
Changes in the components of stockholders' equity | ||||
Balance at the beginning of the period | 101,858,000 | 101,742,000 | 101,508,000 | |
Issuance of restricted stock awards, net of forfeitures | (15,000) | (14,000) | (15,000) | |
Stock-based compensation | 364,000 | 284,000 | 316,000 | |
Repurchase and retirement of common stock | (363,000) | (181,000) | (116,000) | |
Excess tax benefit on restricted stock | 27,000 | 49,000 | ||
Balance at the end of the period | 101,844,000 | 101,858,000 | 101,742,000 | |
Accumulated Deficit | ||||
Changes in the components of stockholders' equity | ||||
Balance at the beginning of the period | (48,340,000) | (50,301,000) | (53,749,000) | |
Net earnings | 8,426,000 | 3,801,000 | 5,285,000 | |
Dividends paid | $ (2,944,000) | $ (1,840,000) | $ (1,837,000) | |
Dividends paid (in dollars per share) | $ / shares | $ 0.08 | $ 0.05 | $ 0.05 | |
Balance at the end of the period | $ (42,858,000) | $ (48,340,000) | $ (50,301,000) | |
Accumulated Other Comprehensive Loss | ||||
Changes in the components of stockholders' equity | ||||
Balance at the beginning of the period | (3,392,000) | (3,121,000) | (3,327,000) | |
Unrealized gain (loss) on available-for-sale securities, net of income taxes | 22,000 | 8,000 | (17,000) | |
Change in net actuarial loss and prior service cost, net of income tax expense (benefit) | (70,000) | (279,000) | 223,000 | |
Balance at the end of the period | (3,440,000) | (3,392,000) | (3,121,000) | |
Income tax expense (benefit) on unrealized gain (loss) on available-for-sale securities | 15,000 | 6,000 | (12,000) | |
Income tax benefit (expense) on change in net actuarial loss and prior service cost | $ (48,000) | $ (191,000) | $ 152,000 |
Stockholders' Equity - Stock in
Stockholders' Equity - Stock incentive plan (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stockholders Equity | ||||
Maximum number of shares authorized for grant | 2,000,000 | |||
Number of shares available for granting options or stock awards | 1,572,059 | |||
Restricted Stock | ||||
Stockholders Equity | ||||
Vesting rights percentage each year beginning on the second anniversary date of the grant | 20.00% | |||
Service period over which the aggregate market value of stock is being amortized | 6 years | 6 years | ||
Number of shares purchased and retired | 46,179 | 44,311 | 49,078 | |
Average purchase price of shares purchased and retired (in dollars per share) | $ 2.27 | $ 2.33 | $ 2.46 | |
Number of Shares | ||||
Nonvested at the beginning of the period (in shares) | 570,600 | |||
Granted (in shares) | 151,000 | |||
Vested (in shares) | (138,600) | |||
Nonvested at the end of the period (in shares) | 583,000 | 570,600 | ||
Weighted Average Grant Date Fair Value | ||||
Nonvested at the beginning of the period (in dollars per share) | $ 2.17 | |||
Granted (in dollars per share) | 2.27 | $ 2.33 | $ 2.44 | |
Vested (in dollars per share) | 1.93 | |||
Nonvested at the end of the period (in dollars per share) | $ 2.25 | $ 2.17 | ||
Additional disclosure | ||||
Total fair value of shares vested during the period (in dollars) | $ 267,000 | $ 261,000 | $ 274,000 | |
Stock-based compensation expense | 364,000 | $ 284,000 | $ 316,000 | |
Total unrecognized compensation cost (in dollars) | $ 691,000 | |||
Weighted-average period for recognition of total unrecognized compensation cost | 3 years 9 months 18 days |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value Measurements | ||
Amount outstanding under revolving credit agreement | $ 3,240,000 | $ 3,840,000 |
Total | ||
Fair Value Measurements | ||
Available-for-sale securities | 1,052,000 | 932,000 |
Total | Fair Value, Measurements, Nonrecurring | ||
Fair Value Measurements | ||
Long-lived assets held for sale | 2,455,000 | |
Level 1 | ||
Fair Value Measurements | ||
Available-for-sale securities | 1,052,000 | $ 932,000 |
Level 3 | Fair Value, Measurements, Nonrecurring | ||
Fair Value Measurements | ||
Long-lived assets held for sale | $ 2,455,000 |
Related Party Transactions (Det
Related Party Transactions (Details) | 12 Months Ended | ||
Dec. 31, 2017USD ($)itemmi | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Dover Downs Gaming & Entertainment, Inc. | |||
Related Party Transactions | |||
Payable to Dover Downs Gaming & Entertainment, Inc. | $ 7,000 | $ 7,000 | |
Harness racing track length (in miles) | mi | 0.625 | ||
Number of annual motorsports weekends for which use of indoor grandstands is allowed by related party | item | 2 | ||
Dover Downs Gaming & Entertainment, Inc. | Various Agreements | |||
Related Party Transactions | |||
Number of companies between which assets and liabilities are allocated | item | 2 | ||
Dover Downs Gaming & Entertainment, Inc. | Transition Support Services Agreement | |||
Related Party Transactions | |||
Number of business days after receipt of an invoice within which the party receiving the services is required to pay | 30 days | ||
Period within which the agreement may be terminated after the request of the party receiving the services | 90 days | ||
Period within which the agreement may be terminated after the request of the party providing the services | 180 days | ||
Dover Downs Gaming & Entertainment, Inc. | Dover Facility | |||
Related Party Transactions | |||
Period for set up and tear down rights | 14 days | ||
Motorsports superspeedway length (in miles) | mi | 1 | ||
Certain administrative and operating services | |||
Related Party Transactions | |||
Allocations and invoicing from Gaming | $ 1,862,000 | 1,952,000 | $ 1,851,000 |
Allocations and invoicing to Gaming | $ 187,000 | 158,000 | 252,000 |
Board of Directors Chairman | |||
Related Party Transactions | |||
Minimum percentage of voting power controlled by related party | 50.00% | ||
Board of Directors Chairman | Dover Downs Gaming & Entertainment, Inc. | |||
Related Party Transactions | |||
Minimum percentage of voting power of Gaming controlled by other related party | 50.00% | ||
Nascar event weekends | Dover International Speedway | |||
Related Party Transactions | |||
Allocations and invoicing from Gaming | $ 903,000 | 876,000 | 836,000 |
Allocations and invoicing to Gaming | $ 224,000 | $ 200,000 | $ 230,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2011 | Sep. 30, 1999 | |
Commitments and Contingencies | |||||
Rental expense charged to operations | $ 67,000 | $ 68,000 | $ 77,000 | ||
Provision for contingent obligation | 158,000 | 75,000 | (86,000) | ||
Provision for contingent obligation at period end | 1,960,000 | 1,802,000 | |||
Indirect Guarantee of Indebtedness | |||||
Commitments and Contingencies | |||||
Balance available in the sales and incremental property tax fund | 1,479,000 | 1,761,000 | |||
Amount paid into the sales and incremental property tax fund | 970,000 | ||||
Deduction from the sales and incremental property tax fund for debt service | $ 1,252,000 | ||||
Excise Tax under Excess Parachute Payment | |||||
Commitments and Contingencies | |||||
Percentage of monthly amount paid in consideration of non-compete covenants | 50.00% | ||||
Minimum | Change in Control Severance and Non-compete Payments and Benefits | |||||
Commitments and Contingencies | |||||
Maximum contingent liability | $ 7,300,000 | ||||
Minimum | Excise Tax under Excess Parachute Payment | |||||
Commitments and Contingencies | |||||
Maximum contingent liability | 1,000,000 | ||||
Maximum | Change in Control Severance and Non-compete Payments and Benefits | |||||
Commitments and Contingencies | |||||
Maximum contingent liability | 9,000,000 | ||||
Maximum | Excise Tax under Excess Parachute Payment | |||||
Commitments and Contingencies | |||||
Maximum contingent liability | 2,700,000 | ||||
Nontaxable Municipal Bonds | Indirect Guarantee of Indebtedness | |||||
Commitments and Contingencies | |||||
Irrevocable direct-pay letter of credit issued | 15,658,000 | ||||
Nontaxable Municipal Bonds | Sports Authority of the County of Wilson (Tennessee) | Indirect Guarantee of Indebtedness | |||||
Commitments and Contingencies | |||||
Aggregate principal amount | $ 25,900,000 | ||||
Outstanding amount of debt | 15,400,000 | ||||
Nontaxable Municipal Bonds | Minimum | Sports Authority of the County of Wilson (Tennessee) | Indirect Guarantee of Indebtedness | |||||
Commitments and Contingencies | |||||
Range of annual principal payments, from September 2018 to 2029 | 1,000,000 | ||||
Nontaxable Municipal Bonds | Maximum | Sports Authority of the County of Wilson (Tennessee) | Indirect Guarantee of Indebtedness | |||||
Commitments and Contingencies | |||||
Range of annual principal payments, from September 2018 to 2029 | 1,600,000 | ||||
Nashville Superspeedway | Nontaxable Municipal Bonds | |||||
Commitments and Contingencies | |||||
Provision for contingent obligation | $ 2,250,000 | ||||
Increase (decrease) in the provision for contingent obligation due to changing interest rates | 158,000 | $ 75,000 | $ (86,000) | ||
Provision for contingent obligation at period end | $ 1,960,000 |
Quarterly Results (unaudited)46
Quarterly Results (unaudited) (Details) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2017USD ($)item$ / shares | Sep. 30, 2017USD ($)item$ / shares | Jun. 30, 2017USD ($)item$ / shares | Mar. 31, 2017USD ($)$ / shares | Dec. 31, 2016USD ($)item$ / shares | Sep. 30, 2016USD ($)item$ / shares | Jun. 30, 2016USD ($)item$ / shares | Mar. 31, 2016USD ($)$ / shares | Dec. 31, 2018 | Dec. 31, 2017USD ($)$ / shares | Dec. 31, 2016USD ($)$ / shares | Dec. 31, 2015USD ($)$ / shares | |
Quarterly Results (unaudited) | ||||||||||||
Revenues | $ 18,305,000 | $ 2,740,000 | $ 25,587,000 | $ 110,000 | $ 20,112,000 | $ 369,000 | $ 25,253,000 | $ 139,000 | ||||
Operating (loss) earnings | 5,368,000 | (3,378,000) | 8,881,000 | (4,059,000) | 5,484,000 | (3,645,000) | 8,719,000 | (3,917,000) | $ 6,812,000 | $ 6,641,000 | $ 8,841,000 | |
Net (loss) earnings | $ 7,643,000 | $ (2,015,000) | $ 5,203,000 | $ (2,405,000) | $ 3,245,000 | $ (2,167,000) | $ 5,066,000 | $ (2,343,000) | ||||
Net (loss) earnings per share - basic and diluted | $ / shares | $ 0.21 | $ (0.06) | $ 0.14 | $ (0.07) | $ 0.09 | $ (0.06) | $ 0.14 | $ (0.06) | $ 0.23 | $ 0.10 | $ 0.14 | |
Costs to remove long-lived assets | $ 286,000 | $ 203,000 | $ 286,000 | $ 203,000 | $ 40,000 | |||||||
Costs to remove long-lived assets, after income taxes | $ 167,000 | 121,000 | ||||||||||
Capitalized costs charged to depreciation | $ 186,000 | |||||||||||
Capitalized costs charged to depreciation, after income taxes | 110,000 | |||||||||||
Federal income tax rate (as a percent) | 35.00% | 35.00% | 35.00% | |||||||||
Net earnings due to revalue of net deferred federal tax liabilities | $ 4,531,000 | |||||||||||
Net earnings per share - basic and diluted due to revalue of net deferred federal tax liabilities | $ / shares | $ 0.13 | |||||||||||
Accelerated depreciation | 24,000 | $ 25,000 | $ 68,000 | $ 91,000 | ||||||||
Accelerated depreciation after income taxes | $ 14,000 | $ 15,000 | $ 40,000 | $ 54,000 | ||||||||
Number of events promoted | item | 1 | 2 | 3 | 2 | 1 | 3 | ||||||
Forecast | ||||||||||||
Quarterly Results (unaudited) | ||||||||||||
Federal income tax rate (as a percent) | 21.00% |