DESCRIPTION OF UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
REFLECTING THE BUSINESS COMBINATION OF
INTERNATIONAL SPEEDWAY CORPORATION AND
PHOENIX INTERNATIONAL RACEWAY, INC.
The following unaudited pro forma financial statements have been prepared
giving effect to the acquisition by International Speedway Corporation's (ISC)
wholly-owned subsidiary, Phoenix Speedway Corporation, of Phoenix
International Raceway, Inc. (PIR) as if the transaction had taken place as of
May 31, 1997, for the pro forma combined balance sheet, and as of September 1,
1995, for the pro forma combined statements of operations for ISC and PIR for
the year ended August 31, 1996 and the pro forma combined statements of
operations for ISC and PIR for the six months ended May 31, 1997 and February
28, 1997, respectively. The combined unaudited pro forma financial statements
of PIR include the accounts of Phoenix International Raceway, Inc., Phoenix
International Raceway, L.L.C. and Phoenix International Raceway Limited
Partnership.
The acquisition has been accounted for using the purchase method in
accordance with Accounting Principles Board Opinion ("APB") No. 16. The
purchase price has been allocated to the assets and liabilities acquired at
their estimated fair market values at the acquisition date. The Company has
obtained an independent appraisal of PIR's land and property and equipment,
the fair and depreciated replacement cost values of which, respectively, have
been used to prepare the following pro forma financial statements.
The unaudited pro forma financial information is not necessarily
indicative of the results of operations or the financial position which would
have been attained had the acquisition been consummated at either of the
foregoing dates or which may be attained in the future. The pro forma
financial information should be read in conjunction with the audited financial
statements and notes of ISC and PIR.
PRO FORMA COMBINED BALANCE SHEET
INTERNATIONAL SPEEDWAY CORPORATION AND
PHOENIX INTERNATIONAL RACEWAY, INC
MAY 31, 1997
(Unaudited)
(In Thousands)
Historical
----------
ISC PIR Pro Forma Pro Forma 1997
1997 1997 Adjustments Adjustment Pro Forma
Notes Combined
________________________________________________________________________
ASSETS
Current Assets:
Cash and cash equivalents ....................... $ 9,708 $ 985 $ 2,155 (A) $ 12,848
Short-term investments .......................... 84,764 -- (46,941) (A) 37,823
Receivables ..................................... 9,071 228 505 (A) 9,804
Inventories ..................................... 1,268 -- -- 1,268
Prepaid expenses and other current assets ....... 3,190 101 67 (A) 3,358
_________ _______ ________ _________
Total Current Assets ............................. 108,001 1,314 (44,214) 65,101
Property and Equipment - at cost - less accumulated
depreciation of $48,682 ......................... 130,650 7,588 12,462 (B) 150,700
Deferred income taxes ............................ -- 297 (297) (E) --
Goodwill ......................................... -- -- 40,781 (C) 40,781
Other Assets:
Cash surrender value of life insurance .......... 2,404 -- -- 2,404
Equity investment. .............................. 25,276 -- -- 25,276
Long-term investments ........................... 500 -- -- 500
Other ........................................... 483 -- -- 483
_________ _______ ________ _________
28,663 -- -- 28,663
_________ _______ ________ _________
Total Assets ..................................... $267,314 $9,199 $8,732 $285,245
========= ======= ======== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable ................................ $ 6,025 $ 248 $ (248) (A) $ 6,025
Income taxes payable ............................ 1,293 -- -- 1,293
Deferred income ................................. 40,006 1,552 2,408 (G) 43,966
Note payable - current portion .................. -- 263 10,471 (D) (A) 10,734
Other current liabilities ....................... 3,590 226 (79) (A) 3,737
_________ _______ ________ _________
Total Current Liabilities ........................ 50,914 2,289 12,552 65,755
Note payable ..................................... -- -- 3,090 (D) 3,090
Deferred income taxes ............................ 16,739 -- -- 16,739
Commitments and Contingencies
Shareholders' Equity
Class A Common Stock, $.01 par value, 80,000,000 shares
authorized; 4,799,788 issued at May 31 ........ 48 -- -- 48
Class B Common Stock, $.01 par value, 40,000,000 shares
authorized; 33,697,174 issued at May 31 ....... 337 -- -- 337
Additional paid-in capital ...................... 84,575 -- -- 84,575
Retained earnings ............................... 117,622 -- -- 117,622
Net assets of acquired company .................. -- 6,910 (6,910) (F) --
_________ _______ ________ _________
202,582 6,910 (6,910) 202,582
Less unearned compensation-restricted stock ..... 2,921 -- -- 2,921
_________ _______ ________ _________
Total Shareholders' Equity ....................... 199,661 6,910 (6,910) 199,661
_________ _______ ________ _________
Total Liabilities and Shareholders' Equity ....... $ 267,314 $9,199 $ 8,732 $285,245
========= ======= ======== =========
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See notes to the pro forma financial statements.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
INTERNATIONAL SPEEDWAY CORPORATION AND
PHOENIX INTERNATIONAL RACEWAY, INC.
SIX MONTHS ENDED
(Unaudited)
(In Thousands except per share amounts)
Historical
__________
ISC PIR Pro Forma Pro Forma 1997
May 31 Feb. 28 Adjustments Adjustment Pro Forma
1997 1997 Notes Combined
__________________________________________________________________________
REVENUES:
Admissions, net.................................... $40,609 $ 4,793 $ -- $ 45,402
Motorsports related income......................... 25,874 3,059 -- 28,933
Food, beverage and souvenir income................. 14,298 894 -- 15,192
Other income....................................... 715 388 -- 1,103
________ ________ ________ _________
81,496 9,134 -- 90,630
EXPENSES:
Direct expenses:
Prize and point fund monies
and NASCAR sanction fees....................... 11,113 1,630 -- 12,743
Motorsports related expenses..................... 10,707 2,196 -- 12,903
Food, beverage and souvenir expenses............. 8,323 149 -- 8,472
General and administrative expenses................ 12,936 1,630 -- 14,566
Depreciation and amortization ..................... 4,239 264 725 (H) (J) 5,228
_______ ________ ________ _________
47,318 5,869 725 53,912
_______ ________ ________ _________
Operating income..................................... 34,178 3,265 (725) 36,718
Interest income, net ................................ 2,164 42 (1,218) (K) (L) 988
Equity in net loss from equity investments........... (792) -- -- (792)
_______ ________ ________ _________
Income before income taxes........................... 35,550 3,307 (1,943) 36,914
Income taxes......................................... 13,589 893 (495) (I) 13,987
_______ ________ _________ _________
Net Income........................................... $21,961 $ 2,414 $(1,448) $ 22,927
======= ======== ========= =========
Earnings per share .................................. $ 0.57 -- -- $ 0.58
======= ======== ========= =========
Dividends per share.................................. $ .06 -- -- $ .06
======= ======== ========= =========
See notes to the pro forma financial statements.
PRO FORMA COMBINED STATEMENT OF OPERATIONS
INTERNATIONAL SPEEDWAY CORPORATION AND
PHOENIX INTERNATIONAL RACEWAY, INC.
YEAR ENDED AUGUST 31, 1996
(In Thousands except per share data)
Historical
__________
ISC PIR Pro Forma Pro Forma 1996
(Unaudited) Adjustments Adjustment Pro Forma
Notes Combined
__________________________________________________________________________
REVENUES:
Admissions, net.................................... $50,140 $ 5,440 $ -- $ 55,580
Motorsports related income......................... 27,433 4,540 -- 31,973
Food, beverage and souvenir income................. 17,505 1,306 -- 18,811
Other income....................................... 964 15 -- 979
________ ________ ________ _________
96,042 11,301 -- 107,343
EXPENSES:
Direct expenses:
Prize and point fund monies
and NASCAR sanction fees....................... 13,865 1,549 -- 15,414
Motorsports related expenses..................... 15,336 3,516 -- 18,852
Food, beverage and souvenir expenses............. 10,278 221 -- 10,499
General and administrative expenses................ 20,930 3,053 -- 23,983
Depreciation....................................... 6,302 496 1,482 (H) (J) 8,280
________ ________ _________ _________
66,711 8,835 1,482 77,028
________ ________ _________ _________
Operating income..................................... 29,331 2,466 (1,482) 30,315
Interest income, net ................................ 872 30 (900) (K) (L) 2
Equity in net loss from equity investments........... 1,441 -- -- 1,441
________ ________ _________ _________
Income before income taxes........................... 31,644 2,496 (2,382) 31,758
Income taxes ........................................ 11,963 20 23 (I) 12,006
________ ________ _________ _________
Net Income........................................... $19,681 $ 2,476 $ (2,405) $ 19,752
======== ======== ========= =========
Earnings per share .................................. $ 0.57 -- -- $ .57
======== ======== ========= =========
Dividends per share ................................. $ .05 -- -- $ .05
======== ======== ========= =========
See notes to the pro forma financial statements.
Note (1): The Acquisition of PIR
The total purchase price is approximately $60.832 million and consists of the
following:
(In thousands)
Cash paid $46,381
Note payable 13,824
Related acquisition costs 627
_______
Total purchase price $60,832
=======
The preliminary allocation of the purchase price based on the fair value of
the net assets acquired is as follows:
(In thousands)
Current assets acquired $ 4,041
Land, property & equipment 20,050
Current liabilities assumed (4,041)
Goodwill 40,782
_______
$60,832
=======
The final purchase price is subject to adjustment as provided in the asset
purchase agreement.
Note (2): Pro Forma Adjustments
The pro forma adjustments to account for the purchase of the assets and
assumption of certain liabilities are referenced below:
(A) Cash payments for purchase price and related acquisition costs as
described in Note 1 above, funded from the Company's short-term investments.
(B) Adjustment to increase historical cost to fair value of the assets
acquired, as of July 14, 1997 (the date of the acquisition) as described in
Note 1 above.
(C) Excess of cost over fair values assigned to net assets acquired
(Goodwill).
(D) To record note payable to PIR principal and stockholder for purchase
price as described in Note 1 above and to record payment of PIR note of
$263,000 at closing.
(E) To eliminate deferred income taxes recorded by PIR.
(F) To eliminate historical equity of PIR.
(G) To record deferred race event income related to ticket sales received
and vendor deposits for future race events made between balance sheet and the
date of acquisition.
(H) Adjustment to reflect the depreciation that would have been recorded if
the transaction had occurred on September 1, 1995 assuming current fair
values.
(I) Adjustment to reflect ISC's effective tax rate for each of the
respective periods.
(J) Adjustment for the amortization of Goodwill over 40 years.
(K) Interest expense on the acquisition related debt.
(L) Reduction of interest income to reflect lower investment balances
resulting from the use of cash.