TABLE OF CONTENTS

PART I
	ITEM 1. BUSINESS
	ITEM 1A. RISK FACTORS
	ITEM 1B. UNRESOLVED STAFF COMMENTS
	ITEM 2. PROPERTIES
	ITEM 3. LEGAL PROCEEDINGS
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
PART II
	ITEM 5. MARKET PRICE OF AND DIVIDENDS ON REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
	ITEM 6. SELECTED FINANCIAL DATA
	ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
	ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
	ITEM 9A. CONTROLS AND PROCEDURES
PART III
PART IV
	ITEM 15. EXHIBITS, CONSOLIDATED FINANCIAL STATEMENT SCHEDULES
SIGNATURES
EX-10.2 FIRST AMENDMENT TO DAYTONA PROPERTY LEASE
EX-10.3 SECOND AMENDMENT TO DAYTONA PROPERTY LEASE
EX-21 SUBSIDIARIES OF THE REGISTRANT
EX-23.1 CONSENT OF PUBLIC ACCOUNTING FIRM
EX-31.1 SECTION 302 CERTIFICATIONS
EX-31.2 SECTION 302 CERTIFICATIONS
EX-31.3 SECTION 302 CERTIFICATION
EX-32 SECTION 906 CERTIFICATION

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(1)		ISCB quotations were obtained from the OTC Bulletin Board and represent prices between dealers and do not include mark-up, mark-down or commission. Such quotations do not necessarily represent actual transactions.

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(1)		Reflects the accounting for discontinued operations of North Carolina Speedway, which was sold on July 1, 2004, and Nazareth Speedway which is currently held for sale. The loss from discontinued operations in fiscal 2002 includes the adoption of Statement of Financial Accounting Standard (“SFAS”) No. 142, which resulted in a non-cash after-tax charge of approximately $64.0 million. The loss from discontinued operations in fiscal 2004 includes the non-cash after-tax impairment of Nazareth’s long-lived assets of approximately $8.6 million. The discontinued operations in fiscal 2005 includes the subsequent non-cash after-tax write-up of certain grandstand assets at Nazareth, which were relocated to and used at Darlington Raceway (“Darlington”) in fiscal 2006, of approximately $471,000.
(2)		Reflects the adoption of SFAS No. 142, which resulted in a non-cash after-tax charge of approximately $453.2 million in the first quarter of fiscal 2002. Included in this charge is approximately $3.4 million associated with our equity investment in Raceway Associates.

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Economic conditions may impact our ability to secure revenues from corporate marketing partnerships. However, we believe that our presence in key markets and impressive portfolio of events are beneficial as we continue to pursue renewal and expansion of existing marketing partnerships and establish new corporate marketing partners. We believe that revenues from our corporate marketing partnerships will continue to grow over the long term.

An important component of our operating strategy has been our long-standing practice of focusing closely on supply and demand regarding additional capacity at our facilities. We continually evaluate the demand for our most popular racing events in order to add capacity that we believe will provide an acceptable rate of return on invested capital. Through prudent expansion, we attempt to keep demand at a higher level than supply, which stimulates ticket renewals and advance sales. Advance ticket sales result in earlier cash flow and reduce the potential negative impact of actual and forecasted inclement weather on ticket sales. While we will join with sponsors to offer promotions to generate additional ticket sales, we avoid rewarding last-minute ticket buyers by discounting tickets. We believe it is more important to encourage advance ticket sales and maintain price integrity to achieve long-term growth than to capture short-term incremental revenue. We recognize that a number of factors relating to discretionary consumer spending, including economic conditions affecting disposable consumer income such as employment and other lifestyle and business conditions, can negatively impact attendance at our events. Accordingly, we have instituted only modest increases in our weighted average ticket prices for fiscal 2007. In addition, we are limiting the expansion of our facilities in fiscal 2007 to projects at our Richmond International Raceway (“Richmond”) which will be completed in time for its NASCAR NEXTEL Cup and Busch series spring events. Richmond will be removing approximately 2,900 obstructed view grandstand seats from Turns 3 and 4 and are adding approximately 7,800 grandstand seats in a new, state-of-the-art, 18-story structure located in Turn 1. The new, three-tiered grandstand will also include a 700-person, members-only Club for individual fans looking to enjoy a race weekend in style or businesses seeking to entertain clients. The Club will also serve as a unique site for special events on non-race weekends throughout the year. We will continue to evaluate expansion opportunities, as well as the pricing and packaging of our tickets and other products, on an ongoing basis. Over the long term, we plan to continue to expand capacity at our speedways.

Since we compete with newer entertainment venues for patrons and sponsors, we will continue to evaluate opportunities to enhance our facilities, thereby producing additional revenue generating opportunities for us and improving the experience for our guests. One major example of these efforts is the infield renovation at Daytona International Speedway (“Daytona”) that was completed for the start of the 2005 racing season. The infield renovation features numerous fan amenities and unique revenue generating opportunities, including garage walk-through areas, additional merchandise and concessions vending areas, waterfront luxury recreational vehicle parking areas, a large tunnel to accommodate team haulers and guest recreational vehicles in and out of the infield and other special amenities such as the infield’s signature structure, the Daytona 500 Club. The fan and guest response to our renovation efforts at Daytona has been overwhelmingly positive and has resulted in incremental direct and, we believe, indirect revenue generation. Another example of our efforts to enhance the fan experience includes the fiscal 2005 renovation of Michigan International Speedway’s (“Michigan”) front stretch, including new ticket gates, new vendor and display areas, and several new concession stands, as well as the addition of club seats and luxury suites. For fiscal 2006, we completed additional renovation projects at California Speedway (“California”) and Talladega Superspeedway (“Talladega”). At California, we renovated and expanded the facility’s front midway area. The new plaza features a full-service outdoor café with cuisine by celebrity chef Wolfgang Puck, in addition to a town center, retail store and concert stage. Other highlights include shade features, modified entry gates, expanded hospitality areas, radio broadcast locations, giant video walls, leisure areas and grass and water accents. This project was the direct result of fan feedback, and further demonstrates our commitment to providing a premium entertainment environment for our guests. We also repaved Talladega’s 2.6 mile oval in time for that facility’s fall NASCAR NEXTEL Cup weekend. Talladega’s racing surface had not been repaved since 1979, and we believe the newly paved racing surface enhanced the thrilling on-track competition.

Daytona International Speedway Lease Extension

On March 29, 2006, Daytona amended its lease agreement with the Daytona Beach Racing and Recreational Facilities District (the “District”). The amended lease extends the relationship between Daytona and the District through November 7, 2054.

The new lease required an initial annual payment, excluding applicable sales taxes, of $500,000 and includes scheduled rent increases every five years. Accounting principles generally accepted in the United States require the total lease cost over the revised lease term to be recognized on a straight-line basis. As a result, this lease expense in fiscal 2006, including sales taxes, totaled approximately $500,000. For fiscal years 2007 through 2054, we anticipate this lease expense, including sales taxes, to approximate $800,000 per year.

Current Litigation

From time to time, we are a party to routine litigation incidental to our business. We do not believe that the resolution of any or all of such litigation will have a material adverse effect on our financial condition or results of operations.

In addition to such routine litigation incident to our business, we are a party to the litigation described below.

In July 2005, Kentucky Speedway, LLC filed a civil action in the Eastern District of Kentucky against NASCAR and us alleging that “NASCAR and ISC have acted, and continue to act, individually and in combination and collusion with each other and other companies that control motorsports entertainment facilities hosting NASCAR NEXTEL Cup Series, to illegally restrict the award of ... NASCAR NEXTEL Cup Series [races].” The complaint seeks damages and an injunction requiring NASCAR to establish a competitive bidding process for NEXTEL Cup events and prohibiting further violations of the antitrust laws. Other than some vaguely conclusory allegations, the complaint fails to specify any conduct by International Speedway Corporation (“ISC”) other than conducting and growing its motorsports entertainment business for the benefit of its shareholders. We believe the allegations to be without merit and intend to defend ourself vigorously. We have retained counsel and are pursuing defenses to the suit while maintaining potential counterclaim remedies available to us to recover the damages caused by the filing of the suit. The court has established a February 1, 2007 deadline for the completion of pre-trial discovery factual matters which is to be followed by discovery of expert opinion matters. Based upon the current timeline a trial on the merits of the case is scheduled for no earlier than Fall 2007. While it is premature to quantify either the likelihood or the potential magnitude of an adverse decision, the fees and expenses associated with the defense of this suit are not covered by insurance and could adversely impact our financial condition or results of operations and cash flows, even if we ultimately prevail. Further, the time devoted to this matter by management and the possible impact of litigation on business negotiations occurring prior to resolution of this matter could also adversely impact our financial condition or results of operations and cash flows. Finally, even if the direct effect of the resolution of this case does not result in a material adverse impact on us, it is possible that the resolution of this case could result in industry-wide changes in the way race schedules are determined by sanctioning bodies, which could indirectly have a material adverse impact on us.

Postponement and/or Cancellation of Major Motorsports Events

The postponement or cancellation of one or more major motorsports events could adversely impact our future operating results. A postponement or cancellation could be caused by a number of factors, including, but not limited to, inclement weather, a widespread outbreak of a severe epidemiological crisis, a general postponement or cancellation of all major sporting events in this country (as occurred following the September 11, 2001 terrorist attacks), a terrorist attack at any mass gathering or fear of such an attack, conditions resulting from the war in Iraq or other acts or prospects of war.

The following table sets forth, for each of the indicated periods, certain selected statement of operations data as a percentage of total revenues:

		For the Year Ended November 30,
		2004				2005				2006
Revenues:
Admissions, net			34.4	%			31.7	%			29.5	%
Motorsports related			51.7				55.2				58.4
Food, beverage and merchandise			12.8				11.8				10.9
Other			1.1				1.3				1.2
Total revenues			100.0				100.0				100.0
Expenses:
Direct:
Prize and point fund monies and NASCAR sanction fees			18.4				18.5				18.9
Motorsports related			17.4				18.1				18.1
Food, beverage and merchandise			8.1				7.7				6.7
General and administrative			13.9				13.0				13.4
Depreciation and amortization			6.9				6.9				7.1
Impairment of long-lived assets			—				—				10.9
Total expenses			64.7				64.2				75.1
Operating income			35.3				35.8				24.9
Interest expense, net			(2.7	)			(1.0	)			(0.9	)
Equity in net income from equity investments			0.4				0.5				0.1
Loss on early redemption of debt			(0.8	)			—				—
Income from continuing operations before income taxes			32.2				35.3				24.1
Income taxes			12.7				13.8				9.5
Income from continuing operations			19.5				21.5				14.6
(Loss) income from discontinued operations			(1.0	)			—				—
Gain on sale of discontinued operations			5.6				—				—
Net income			24.1	%			21.5	%			14.6	%

Comparison of Fiscal 2006 to Fiscal 2005

The comparison of fiscal 2006 to fiscal 2005 is impacted by the following factors:

•    IRL events were conducted at California and Phoenix International Raceway (“Phoenix”) during fiscal 2005 while no corresponding events were conducted in fiscal 2006;

•    A NASCAR Busch series event was conducted at Martinsville in fiscal 2006 while no corresponding event was conducted by us in fiscal 2005;

•    A NASCAR Craftsman Truck series event was realigned from Richmond in fiscal 2005 to Talladega in fiscal 2006 resulting in a significant attendance increase for the event; and

•    In fiscal 2005, we reached settlement with the CART Liquidation Trust that allowed a claim in our favor of approximately $1.8 million in the Championship Auto Racing Teams (“CART”) bankruptcy.

Admissions revenue increased approximately $483,000, or 0.2 percent, in fiscal 2006 compared to fiscal 2005. Increased admissions revenue resulted from an increase in the weighted average price of tickets sold for the majority of our events and increases in attendance for events at Homestead-Miami Speedway (“Miami”), Darlington, Talladega and certain NASCAR events conducted during Speedweeks at Daytona supporting our sold out Daytona 500 are largely offset by the previously discussed absence of IRL events in the fiscal 2006 event schedules for California and Phoenix as well as decreased attendance for the Pepsi 400 weekend at Daytona and events at Michigan.

Motorsports related revenue increased approximately $57.6 million, or 14.1 percent, in fiscal 2006 compared to fiscal 2005. The increase is primarily due to television broadcast rights fees for our NASCAR NEXTEL Cup and Busch series events and, to a lesser extent, increased sponsorship, hospitality, advertising and other race related revenues. These increases are partially offset by the net decrease in revenues from non-comparable events and activities described above.

Food, beverage and merchandise revenue in fiscal 2006 is consistent with fiscal 2005. Increases in catering and concessions revenues for fiscal 2006 are largely offset by a net decrease in revenues from non-comparable events and activities described above.

Prize and point fund monies and NASCAR sanction fees increased approximately $14.4 million, or 10.5 percent, in fiscal 2006, as compared to fiscal 2005. The increase is primarily attributable to the increase in television broadcast rights fees for comparable NASCAR NEXTEL Cup and Busch series events held at our facilities as standard NASCAR sanctioning agreements require that a specified percentage of television broadcast rights fees be paid to competitors. The addition of the NASCAR Busch Series event at Martinsville in fiscal 2006 also contributed to the current year increase.

Motorsports related expenses increased approximately $10.1 million, or 7.5 percent, in fiscal 2006 compared to fiscal 2005. The increase is primarily related to increased operating expenses for comparable events, MRN operating expenses supporting additional revenue growth, certain

consumer marketing and sales initiatives, and a net increase in a variety of other costs. These increases are partially offset by event expenses related to the Phoenix and California IRL events that were held in 2005, but not in 2006, and other non-comparable events and activities year over year. Motorsports related expenses as a percentage of combined admissions and motorsports related revenue decreased from approximately 20.9 percent in fiscal 2005 to approximately 20.6 percent for fiscal 2006. The decrease is primarily attributable to increased television broadcast rights fees partially offset by the previously discussed expense increases.

Food, beverage and merchandise expense decreased $3.6 million, or 6.4 percent, during fiscal 2006 as compared to fiscal 2005. The decrease is primarily attributable to margin improvement on certain catering and concession sales, operational cost containment, variable costs associated with decreased attendance at certain events, a decrease in merchandise inventory write-downs in 2006 as compared to 2005 and inventory donated to hurricane relief efforts in 2005. Food, beverage and merchandise expense as a percentage of food, beverage and merchandise revenue decreased from approximately 65.1 percent in fiscal 2005 to approximately 60.9 percent for 2006. This decrease is attributable to the previously discussed margin improvement and cost containment.

General and administrative expenses increased approximately $10.5 million, or 10.9 percent, during fiscal 2006 as compared to fiscal 2005. These increases are primarily related to legal fees, certain expenses paid in connection with our development of a commercial mixed-use entertainment and shopping complex in Daytona Beach, Florida, and a net increase in certain costs related to the growth of our core business, partially offset by certain state taxes and non-recurring charges in the prior year. The comparison of fiscal 2006 to fiscal 2005 general and administrative expenses is also impacted by the fiscal 2005 recovery of $1.8 million of previously recorded bad debt expense related to our claim against CART (see the discussion of general and administrative expenses under “Comparison of Fiscal 2005 to Fiscal 2004”). General and administrative expenses as a percentage of total revenues increased slightly from approximately 13.0 percent in fiscal 2005 to 13.3 percent for fiscal 2006 primarily due to the previously noted net increase in general and administrative expenses largely offset by the increase in television broadcast rights fees.

Depreciation and amortization expense increased approximately $5.9 million, or 11.7 percent, during fiscal 2006 as compared to fiscal 2005. The increase was primarily attributable to certain retail technology projects, the Miami and Phoenix suite and grandstand additions, the Michigan and Daytona renovations, and a variety of other ongoing capital improvements.

We recently announced our intention to discontinue our speedway development efforts on Staten Island which resulted in a non-cash, pre-tax charge for the impairment of long-lived assets of approximately $84.7 million, or $1.01 per diluted share, in the fourth quarter of fiscal 2006 (see “Future Liquidity”). To a much lesser extent, certain other asset impairments also contributed to the charge.

Interest income increased by approximately $452,000, or 9.3 percent, during fiscal 2006 as compared to fiscal 2005. The increase was primarily due to higher yield on short-term investments in the current periods partially offset by lower outstanding cash and short term investment balances.

Interest expense decreased approximately $344,000, or 2.7 percent, during fiscal 2006 compared to fiscal 2005. The decrease is primarily due to an increase in capitalized interest, primarily related to land, land improvement and development costs for the Staten Island project and, to a lesser extent,

certain other construction projects as well as lower fees related to our new credit facility.

Equity in net income from equity investments represents our pro rata share of the current income and losses from our 37.5 percent equity investment in Raceway Associates and our 50.0 percent equity investment in SMISC. Raceway Associates owns and operates Chicagoland Speedway and Route 66 raceway. SMISC owns and operate Motorsports Authentics, which is a leader in design, promotion, marketing, and distribution of motorsports licensed merchandise.

Our effective tax rate increased from 39.0 percent to 39.2 percent during fiscal 2006 compared to fiscal 2005. This increase is primarily a result of certain state tax implications relating to the aforementioned impairment of long-lived assets. The increase is partially offset by one time benefits relating to discrete items in the second fiscal quarter of 2006, including the implementation of certain restructuring initiatives, the finalization of certain state tax matters and deposits made during fiscal 2005 and 2006 with the Service to stop the accrual of interest on contested items in our ongoing federal tax examination. See “Future Liquidity” for further discussion regarding the examination of our federal income tax returns.

As a result of the foregoing, our income from continuing operations decreased from approximately $159.1 million to approximately $117.0 million, or 26.5 percent, during fiscal 2006, as compared to the same period of the prior year.

The operations of Nazareth are presented as discontinued operations, net of tax, for all periods presented in accordance with SFAS No. 144. In fiscal 2005, discontinued operations include a $471,000 after-tax non-cash gain related to the decision made in the fourth quarter to relocate and use certain grandstand assets from Nazareth to Darlington, which had previously been written off.

As a result of the foregoing, our net income decreased approximately $42.6 million, or $0.80 per diluted share, for fiscal 2006 compared to fiscal 2005.

Comparison of Fiscal 2005 to Fiscal 2004

The comparison of fiscal 2005 to fiscal 2004 is impacted by the following factors:

	•		In July 2004, we acquired the assets and assumed the operations and certain liabilities of Martinsville. The timing of the acquisition in fiscal 2004 resulted in an incremental NASCAR NEXTEL Cup and Craftsman Truck series event during fiscal 2005;
	•		During fiscal 2004, we sold the assets and operations of North Carolina and made a decision to pursue the sale of Nazareth due to the realignment of Nazareth’s events to our Watkins Glen facility starting with the 2005 event season. Accordingly, the results of operations for North Carolina and Nazareth are recorded as discontinued operations for all periods presented in accordance with SFAS No. 144 “Accounting for the Impairment or Disposal of Long-Lived Assets”. Watkins Glen hosted a NASCAR Busch Series event and an IRL event included in our continuing operations during fiscal year 2005, while the corresponding events held at Nazareth during the prior fiscal year are recorded as part of discontinued operations;

	•		As part of NASCAR’s fiscal 2005 event date realignments, a NASCAR NEXTEL Cup and Busch series weekend historically hosted by Darlington was realigned to Phoenix;
	•		Speedweeks at Daytona was highlighted by the debut of the facility’s previously discussed newly renovated infield;
	•		In fiscal 2005, we reached settlement with the CART Liquidation Trust that allowed a claim in our favor of $1.8 million in the CART bankruptcy; and
	•		In fiscal 2004, we refinanced our outstanding $225.0 million senior notes originally due in October 2004 and paid a redemption premium on the previously outstanding senior notes.

Admissions revenue increased approximately $12.2 million, or 5.5 percent, in fiscal 2005 compared to fiscal 2004. The increase is primarily due to:

	•		The previously discussed timing of the acquisition of Martinsville;
	•		Realignment of events to Watkins Glen;
	•		The net impact of the realignment of events to Phoenix from Darlington;
	•		Increased attendance for the NASCAR events conducted during Speedweeks at Daytona supporting our sold out Daytona 500;
	•		Rescheduling of the NASCAR Craftsman Truck Series event at Michigan from the IRL weekend in fiscal 2004 to the June NASCAR NEXTEL Cup weekend in fiscal 2005, resulting in increased attendance and weighted average ticket price; and
	•		Increased attendance for the remaining Darlington NASCAR weekend.

These increases are partially offset by certain admissions decreases including attendance for the California NASCAR NEXTEL Cup and Busch series events conducted in the first quarter of fiscal 2005.

Motorsports related revenue increased approximately $73.6 million, or 22.0 percent, in fiscal 2005 compared to fiscal 2004. The increase is primarily due to increased television broadcast rights fees, sponsorship, hospitality and other race related revenues for comparable NASCAR NEXTEL Cup weekends hosted at our facilities as well the timing of the acquisition of Martinsville and the realignment of events to Watkins Glen. The net impact of realignment of events to Phoenix from Darlington also contributed to the current year increase.

Food, beverage and merchandise revenue increased approximately $4.0 million, or 4.8 percent, in fiscal 2005 compared to fiscal 2004. The increase is primarily due to catering, merchandise and concession operations for comparable NASCAR NEXTEL Cup weekends, the net impact of realignment of events to Phoenix from Darlington, the timing of the acquisition of Martinsville and higher revenues resulting from increased attendance, hospitality units and additional points of sale in the newly renovated infield for events during Speedweeks at Daytona. These increases are partially offset by decreases primarily related to our Americrown subsidiary performing services at non-ISC venues in fiscal 2004.

Prize and point fund monies and NASCAR sanction fees increased approximately $17.5 million, or 14.7 percent, in fiscal 2005, as compared to fiscal 2004. The increase is primarily attributable to the increase in television broadcast rights fees for comparable NASCAR NEXTEL Cup and Busch series events held at

our facilities as standard NASCAR sanctioning agreements require that a specified percentage of television broadcast rights fees be paid to competitors. The previously discussed realignment of the NASCAR Busch Series event to Watkins Glen also contributed to the increase, as well as the timing of the acquisition of Martinsville.

Motorsports related expenses increased approximately $21.3 million, or 18.9 percent, in fiscal 2005 compared to fiscal 2004. The increase is primarily related to increased operating expenses for comparable events during the periods, including operating expenses associated with the previously discussed Daytona infield renovation, certain strategic consumer and corporate marketing initiatives and services donated to hurricane relief efforts. Increases during fiscal 2005 also included the realignment of events to Watkins Glen, the net impact of realignment of events to Phoenix from Darlington and the timing of the acquisition of Martinsville. Motorsports related expenses as a percentage of combined admissions and motorsports related revenue increased to approximately 20.9 percent for fiscal 2005, as compared to 20.3 percent for fiscal 2004, primarily due to the previously discussed expenses as well as the expenses and the sanction fee for the realigned Watkins Glen IRL event. These increases are partially offset by increased revenues from the television broadcast rights fees and the timing of the Martinsville acquisition.

Food, beverage and merchandise expense increased $4.5 million, or 8.6 percent, during fiscal 2005 as compared to fiscal 2004. The increase is primarily attributable to event related costs, including increases associated with the additional events at Martinsville and the realignment of events to Phoenix from Darlington, certain merchandise inventory writedowns and inventory donated to hurricane relief efforts. These increases are partially offset by services at non-ISC venues in fiscal 2004. Food, beverage and merchandise expense as a percentage of food, beverage merchandise revenue increased to approximately 65.1 percent for fiscal 2005 as compared to 62.8 percent for fiscal 2004. The increases are primarily related to previously discussed inventory writedowns, increased operating and selling costs associated with an expanded merchandising strategy implemented in late-fiscal 2004 and donated merchandise. Also contributing to the increase for fiscal 2005 is the lower margin upscale catering cuisine offered in the new NEXTEL FANZONE and Daytona 500 Club during Speedweeks. These increases are partially offset by our Americrown subsidiary performing lower margin services at non-ISC venues in fiscal year 2004 and the realignment of events to Phoenix from Darlington.

General and administrative expenses increased approximately $5.7 million, or 6.3 percent, during fiscal 2005 as compared to fiscal 2004. The increases are primarily related to a net increase in certain costs related to the growth of our core business, expenses associated with the timing of the acquisition of Martinsville, hurricane repair costs associated with storms in late fiscal 2004 and a non-cash charge associated with certain asset replacements at Richmond. These increases are partially offset by the recovery of a portion of the previously recorded bad debt expense related to our claim against CART, non-cash charges associated with the net book value of certain undepreciated assets removed during the renovation of Daytona’s infield and Michigan’s frontstretch during fiscal 2004, and a decrease in professional fees and strategic development expenses. During fiscal 2005, we reached settlement with the CART Liquidation Trust that allowed a claim in our favor of $1.8 million in the CART bankruptcy. The claim was based on the failure to return the sanction fee paid to CART, less allowable expenses, for the 2003 event scheduled in California that was canceled because of the state of emergency due to wildfires in Southern California at the time. The U.S. Bankruptcy Court, Southern District of Indiana, approved the good faith settlement at a hearing in May, and we recovered the full $1.8 million of the allowed claim. Accordingly, we recorded the $1.8 million recovery as a reduction of bad debt expense during fiscal 2005. General and administrative expenses as a percentage of total revenues decreased from approximately 13.9 percent to 13.0 percent primarily due to increased television broadcast revenues, the recovery in the CART settlement, decreases in professional and strategic development expenses, increases in revenues for Speedweeks at Daytona and the previously discussed incremental Martinsville events. The decreases are partially offset by previously

noted net increases in general and administrative expenses.

Depreciation and amortization expense increased approximately $6.5 million, or 14.5 percent, during fiscal 2005 as compared to fiscal 2004. The increase was primarily attributable to the Daytona infield renovation project, certain retail technology projects, the Michigan front stretch reconfiguration project, the acquisition of Martinsville, and other ongoing capital spending.

Interest income increased by approximately $807,000, or 19.9 percent, during fiscal 2005 as compared to fiscal 2004. These increases were primarily due to higher yield on short-term investments in the current periods partially offset by lower outstanding cash and short term investment balances.

Interest expense decreased approximately $9.0 million, or 41.6 percent, during fiscal 2005 compared to fiscal 2004. An increase in capitalized interest, primarily related to land purchased for the proposed construction of a speedway in Staten Island, New York and, to a lesser extent, certain other construction projects contributed to the decrease in interest expense. Also contributing to the decrease in fiscal 2005 is our May 28, 2004, refinancing of $225.0 million 7.9 percent senior notes issued in October 1999 and due October 15, 2004, (“1999 Senior Notes”) with $150.0 million 4.2 percent senior notes due 2009, and $150.0 million 5.4 percent senior notes due 2014 (collectively the “2004 Senior Notes”) issued on April 23, 2004. To a lesser extent, the incremental interest on the 1999 Senior Notes from April 23, 2004 to May 28, 2004 contributed to lower interest expense in fiscal 2005.

Equity in net income from equity investments represents our pro rata share of the current income from our 37.5 percent equity investment in Raceway Associates and our 50.0 percent equity investment in Motorsports Authentics. Raceway Associates owns and operates Chicagoland Speedway and Route 66 Raceway. Motorsports Authentics is the leader in design, promotion, marketing and distribution of motorsports licensed merchandise.

Our effective tax rate decreased from 39.4 percent to 39.0 percent during fiscal 2005 compared to fiscal 2004. This decrease is primarily a result of deposits made during fiscal 2005 with the Service to stop the accrual of interest on contested items in our ongoing federal tax examination combined with the increase in pretax income in fiscal 2005 compared to fiscal 2004. See “Future Liquidity” for further discussion regarding the examination of our federal income tax returns.

As a result of the foregoing, our income from continuing operations increased from approximately $126.3 million to approximately $159.1 million, or 26.0 percent, during fiscal 2005, as compared to the same period of the prior year.

The operations of North Carolina and Nazareth are presented as discontinued operations, net of tax, for all periods presented in accordance with SFAS No. 144. The fiscal 2004 periods include an approximately $36.3 million after-tax gain related to the sale of North Carolina’s assets. Also included in fiscal 2004 is an $8.6 million after-tax, non-cash charge for impairment of long-lived assets related to the realignment of the NASCAR and IRL race event dates from Nazareth to other facilities within our portfolio beginning in fiscal 2005. In fiscal 2005, discontinued operations include a $471,000 after-tax non-cash gain related to the decision made in the fourth quarter to relocate and use certain grandstand assets from Nazareth to Darlington, which had previously been written off.

As a result of the foregoing, our net income increased approximately $3.0 million, or $0.05 per diluted share, for fiscal 2005 compared to fiscal 2004.

Liquidity and Capital Resources

General

We have historically generated sufficient cash flow from operations to fund our working capital needs and capital expenditures at existing facilities, as well as to pay an annual cash dividend. In addition, we have used the proceeds from offerings of our Class A Common Stock, the net proceeds from the issuance of long-term debt, borrowings under our credit facilities and state and local mechanisms to fund acquisitions and development projects. At November 30, 2006, we had cash, cash equivalents and short-term investments totaling approximately $137.7 million, $300.0 million principal amount of senior notes outstanding and a debt service funding commitment of approximately $68.4 million principal amount related to the taxable special obligation revenue (“TIF”) bonds issued by the Unified Government of Wyandotte County/Kansas City, Kansas (“Unified Government”). We had working capital of approximately $7.3 million at November 30, 2006, compared to $14.9 million at November 30, 2005.

Our liquidity is primarily generated from our ongoing motorsports operations, and we expect our strong operating cash flow to continue in the future. In addition, as of November 30, 2006, we have approximately $300.0 million available to draw upon under our revolving credit facility, if needed. See “Future Liquidity” for additional disclosures relating to our credit facility and certain risks that may affect our near term operating results and liquidity.

Cash Flows

Net cash provided by operating activities was approximately $241.4 million for fiscal 2006, compared to approximately $146.8 million for fiscal 2005. The difference between our net income of approximately $116.8 million and the approximately $241.4 million of operating cash flow was primarily attributable to:

	•		impairments on long-lived assets of approximately $87.1 million;
	•		depreciation and amortization expense of approximately $56.8 million;
	•		stock-based compensation of approximately $2.7 million; and
	•		an increase in income taxes payable of approximately $2.6 million;

These differences were partially offset by deposits with the Internal Revenue Service of approximately $13.9 million, an increase in accounts receivable of approximately $7.1 million and deferred income taxes of approximately $4.2 million.

Net cash used in investing activities was approximately $307.1 million for fiscal 2006, compared to approximately $166.2 million for fiscal 2005. Our use of cash for investing activities reflects purchases of short-term investments of approximately $150.7 million, approximately $124.6 million for our equity investment in SMISC in connection with its acquisition of Action, approximately $110.4 million in capital expenditures and approximately $3.0 million in advances to affiliates. This use of cash is partially offset by approximately $80.9 million in proceeds from the sale of short-term investments.

Net cash used in financing activities was approximately $5.4 million for fiscal 2006, compared to approximately $10.8 million for fiscal 2005. Cash used in financing activities consists primarily of cash dividends paid totaling approximately $4.3 million. We also borrowed and repaid approximately $80.0 million under our credit facility during this period.

Capital Expenditures

Capital expenditures totaled approximately $110.4 million for fiscal 2006, compared to approximately $248.9 million for fiscal 2005. The capital expenditures for fiscal 2006, consisted primarily of seat, suite and club additions at Phoenix, seat additions at Darlington, capital expenditures related to the potential major speedway development in the New York City Borough of Staten Island (see “Future Liquidity”), repaving of Talladega’s racing surface and the renovation and expansion of California’s Midway area. The remaining capital expenditures were related to a variety of other improvements and renovations to our facilities.

At November 30, 2006, we have approximately $62.5 million in capital projects currently approved for our existing facilities. These projects include the acquisition of land and land improvements at various facilities for expansion of parking, camping capacity and other uses, seat and club additions at Richmond and a variety of other improvements and renovations to our facilities that enable us to effectively compete with other sports venues for consumer and corporate spending.

As a result of these currently approved projects and estimated additional approvals in fiscal 2007, we expect our total fiscal 2007 capital expenditures at our existing facilities will be approximately $80.0 million to $90.0 million, depending on the timing of certain projects.

We review the capital expenditure program periodically and modify it as required to meet current business needs.

Future Liquidity

Long-Term Obligations and Commitments

On April 23, 2004, we completed an offering of $300.0 million principal amount of unsecured senior notes in a private placement. On September 27, 2004, we completed an offer to exchange the senior notes for registered senior notes with substantially identical terms (“2004 Senior Notes”). At November 30, 2006, outstanding 2004 Senior Notes totaled approximately $300.8 million, net of unamortized discounts and premium, which is comprised of $150.0 million principal amount unsecured senior notes, which bear interest at 4.2 percent and are due April 2009, and $150.0 million principal amount unsecured senior notes, which bear interest at 5.4 percent and are due April 2014. The 2004 Senior Notes require semi-annual interest payments on April 15 and October 15 through their maturity. The 2004 Senior Notes may be redeemed in whole or in part, at our option, at any time or from time to time at redemption prices as defined in the indenture. Our subsidiaries are guarantors of the 2004 Senior Notes.

In January 1999, the Unified Government issued approximately $71.3 million in TIF bonds in connection with the financing of construction of Kansas Speedway. At November 30, 2006, outstanding TIF bonds totaled approximately $67.3 million, net of the unamortized discount, which is comprised of a $18.7 million principal amount, 6.2 percent term bond due December 1, 2017 and a $49.7 million principal amount, 6.8 percent term bond due December 1, 2027. The TIF bonds are repaid by the Unified Government with payments made in lieu of property taxes (“Funding Commitment”) by our wholly-owned subsidiary, Kansas Speedway Corporation. Principal (mandatory redemption) payments per the Funding Commitment are payable by Kansas Speedway Corporation on October 1 of each year. The semi-annual interest component of the Funding Commitment is payable on April 1 and October 1 of each year. Kansas Speedway Corporation granted a mortgage and security interest in the Kansas project for its Funding Commitment obligation.

In October 2002, the Unified Government issued subordinate sales tax special obligation revenue bonds (“2002 STAR Bonds”) totaling approximately $6.3 million to reimburse us for certain construction already completed on the second phase of the Kansas Speedway project and to fund certain additional construction. The 2002 STAR Bonds, which require annual debt service payments and are due December 1, 2022, will be retired with state and local taxes generated within the Kansas Speedway’s boundaries and are not our

obligation. Kansas Speedway Corporation has agreed to guarantee the payment of principal, any required premium and interest on the 2002 STAR Bonds. At November 30, 2006, the Unified Government had approximately $4.3 million in 2002 STAR Bonds outstanding. Under a keepwell agreement, we have agreed to provide financial assistance to Kansas Speedway Corporation, if necessary, to support its guarantee of the 2002 STAR Bonds.

On June 16, 2006, we entered into a $300.0 million revolving credit facility (“2006 Credit Facility”). The 2006 Credit Facility contains a feature that allows us to increase the credit facility to a total of $500.0 million, subject to certain conditions. Upon execution of the 2006 Credit Facility, we terminated our then existing $300.0 million credit facility. The 2006 Credit Facility is scheduled to mature in June 2011, and accrues interest at LIBOR plus 30.0 — 80.0 basis points, based on our highest debt rating as determined by specified rating agencies. At November 30, 2006, we did not have any borrowings outstanding under the Credit Facility.

We are a member of Motorsports Alliance (owned 50.0 percent by us and 50.0 percent by IMS), which owns 75.0 percent of Raceway Associates. Raceway Associates owns and operates Chicagoland Speedway and Route 66 Raceway. Raceway Associates has a term loan arrangement, which requires quarterly principal and interest payments and matures November 15, 2012, and a $15.0 million secured revolving credit facility, which matures in September 2008. At November 30, 2006, Raceway Associates had approximately $28.4 million outstanding under its term loan and no borrowings outstanding under its existing credit facility. Under a keepwell agreement, the members of Motorsports Alliance have agreed to provide financial assistance to Raceway Associates, if necessary, on a pro rata basis to support performance under its term loan and credit facility.

We have guaranteed minimum royalty payments under certain agreements through December 2015, with a remaining maximum exposure at November 30, 2006, of approximately $12.5 million.

At November 30, 2006 we had contractual cash obligations to repay debt and to make payments under operating agreements, leases and commercial commitments in the form of guarantees and unused lines of credit.

Payments due under these long-term obligations are as follows as of November 30, 2006 (in thousands):

						Obligations Due by Period
						Less Than												After
		Total				One Year				2-3 Years				4-5 Years				5 Years
Long-term debt		$	368,355			$	770			$	151,990			$	2,675			$	212,920
Motorsports entertainment facility operating agreement			38,100				2,220				4,440				4,440				27,000
Other operating leases			47,233				3,945				4,453				2,465				36,370
Total Contractual Cash Obligations		$	453,688			$	6,935			$	160,883			$	9,580			$	276,290

Commercial commitment expirations are as follows as of November 30, 2006 (in thousands):

						Commitment Expiration by Period
						Less Than												After
		Total				One Year				2-3 Years				4-5 Years				5 Years
Guarantees		$	16,770			$	515			$	905			$	595			$	14,755
Keepwell agreements			14,200				2,400				4,800				4,800				2,200
Unused credit facilities			302,082				2,082				—				300,000				—
Total Commercial Commitments		$	333,052			$	4,997			$	5,705			$	305,395			$	16,955

Raceway Associates Acquistion

In November 2006, we announced that, through a wholly-owned subsidiary, we had entered into a purchase agreement with IMS to indirectly acquire an additional 37.5 percent interest in Raceway Associates. As a result of the transaction we will own 100.0 percent of Motorsports Alliance, which owns 75.0 percent of Raceway Associates. Concurrent with the IMS transaction, we also exercised our right to purchase the minority partners’ remaining 25.0 percent interest in Raceway Associates pursuant to the 1999 Raceway Associates formation agreement.

All of the above transactions closed on February 2, 2007, for a total purchase price of approximately $102.4 million which was paid utilizing existing cash on hand and approximately $62.0 million in borrowings on our 2006 Credit Facility. In connection with these transactions, we acquired Raceway Associates net assets,

including approximately $39.7 million in third party debt. These transactions will be accounted for as a business combination.

Northwest US Speedway Development

In light of NASCAR’s publicly announced position regarding additional potential realignment of the NASCAR NEXTEL Cup Series schedule, we also believe there are potential development opportunities in other new, underserved markets across the country. As such, we have been and are exploring opportunities for public/private partnerships targeted to develop one or more motorsports entertainment facilities in new markets, including the Northwest US. In June 2005, we announced we had identified a preferred site for the development of a motorsports entertainment facility in Kitsap County, Washington, approximately 20 miles outside of Seattle, Washington, the country’s 13th largest media market. We have secured an option to purchase approximately 950 acres for the potential future home of a professional motorsports and entertainment and family recreation facility including a closed-course speedway, grandstands and other seating with capacity for at least 83,000 attendees, which could open in 2011. We are conducting ongoing project due diligence to review environmental impacts including traffic, noise, air quality, and others, if any.

State legislation is required to create a Public Speedway Authority (“PSA”) and authorize the issuance of general obligation bonds to help finance the project. These bonds would be repaid through a sales tax credit issued by the state to the PSA, and from a local tax on the facility. The legislation would require us to invest a minimum of approximately $180.0 million in the project, among other obligations. We expect to introduce the required legislation into the 2007 Session of the Washington Legislature in hopes of successfully completing this stage of the process. While we remain optimistic about our ability to construct a motorsports and multi-use recreational facility in this region of the country, it is too early to tell if the necessary public participation will materialize or if it will be sufficient to allow for the development of such a facility.

New York Metropolitan Speedway Development

During fiscal 1999, we announced our intention to search for a site for a major motorsports entertainment facility in the New York metropolitan area. Our efforts included the evaluation of many different locations. Most recently, we identified a combination of land parcels in the New York City borough of Staten Island aggregating approximately 676 acres that we targeted for the development of a major motorsports entertainment and retail development project. Our majority-owned subsidiary, 380 Development, purchased the total 676 acres for approximately $110.4 million in early fiscal 2005.

In December 2006, we announced our decision to discontinue pursuit of a speedway development on Staten Island. The decision was driven by a variety of factors, including: (1) the inability to secure the critical local political support that is necessary to secure the required land-use change approvals for a speedway development; (2) even if we had secured the necessary political support, it became apparent that we would have been faced with unacceptable approval requirements, including operational restrictions that would have made the facility difficult to operate and a significant challenge to market; and (3) the increased risk that these unacceptable approval requirements could result in higher construction spending and annual operating costs, which would have a significant negative impact on the financial model for the speedway development.

Our operating and development agreements with The Related Companies have been terminated, the note payable to us from Related which was secured by a pledge of Related’s 12.4 percent proportionate minority interest in 380 Development has been cancelled and the minority interest surrendered to us.

The decision to discontinue our speedway development efforts on Staten Island, in our fiscal 2006 fourth quarter, resulted in a non-cash, pre-tax charge in our results of approximately $84.7 million, or $1.01 per diluted share after-tax. Accounting rules generally accepted in the US require that the property be valued at its current fair value, which is estimated by an independent appraisal at approximately $65.0 million. Prior to the write-off, we had capitalized spending of approximately $150.0 million through November 30, 2006, including: (1) $123.0 million for land and related improvements, (2) $11.0 million for costs related solely to the development of the speedway, and (3) $16.0 million for capitalized interest and property taxes. The value of the property is expected to be in excess of $100.0 million once it is filled and ready for sale. In September 2006, as a result of communications from the New York State Department of Environmental Conservation (“DEC”) and the New York City Department of Sanitation (“DOS”), which provide oversight for the fill operations at the site, we ceased fill operations while we address certain issues they raised. We continue to work with these agencies to resolve these issues and anticipate being able to resume fill operations in the coming months.

We have begun to research and develop market demand studies to assist in the evaluation of various alternative strategies for the Staten Island acreage, including potentially selling the property in whole or in parts, or developing the property with a third party for some other use. Given that the property is the largest undeveloped acreage of land in the five boroughs of New York City, we believe it will be attractive to a wide range of developers and users. The site is currently zoned as-of-right for industrial use and could provide ease of access through a deep-water dock located on site. Also, the property can be easily accessed from the local highway system.

Although we are disappointed that our speedway development efforts were unsuccessful on Staten Island, we remain committed to pursuing the development of a motorsports entertainment facility in the region. Due to the considerable interest in and support for NASCAR racing in the metro New York market, we believe a premier motorsports entertainment facility will have a significant positive impact on the area’s economy and prove to be a long-term community asset.

Joint Venture Development

In May 2005, we announced we are pursuing a joint venture for the development of a commercial mixed-use entertainment shopping center project on approximately 71 acres we currently own. Located directly across International Speedway Boulevard (U.S. Highway 92) from our Daytona motorsports entertainment facility, the acreage currently includes several office buildings that house our corporate headquarters and certain related operations of ours and NASCAR. The total project, which will be developed by us and the

joint venture, is anticipated to be comprised of retail, entertainment, office and residential components designed to complement surrounding commercial developments. We are currently negotiating a joint venture agreement with a developer and are also completing our detailed feasibility study in which a number of key issues will be addressed. Provided we are able to enter into an agreement with this developer and the results of the feasibility study are favorable and appropriate leasing considerations are attained, we expect to move forward with the project within the next three months. If we proceed with the project it is expected that certain of our existing corporate headquarter offices and other buildings, which are not currently fully depreciated, will be razed during the next 6 to 24 months resulting in a yet to be determined, non-cash charge to earnings.

Internal Revenue Service Examination

The Service is currently performing a periodic examination of our federal income tax returns for the years ended November 30, 1999 through 2005 and has challenged the tax depreciation treatment of a significant portion of our motorsports entertainment facility assets. Through November 30, 2006, we have received reports from the Service requesting downward adjustments to our tax depreciation expense for the fiscal years ended November 30, 1999 through 2004, which could potentially result in the reclassification of approximately $94.5 million of income taxes from deferred to current. Including related interest, the combined after-tax cash flow impact of these requested adjustments is approximately $110.8 million. In order to prevent incurring additional interest, we have deposited approximately $110.8 million, with the Service. In December 2006, we received a report from the Service with respect to our fiscal year ended November 30, 2005, which could potentially result in the the reclassification of approximately $6.6 million of income taxes from deferred to current. Accordingly, in order to prevent incurring additional interest, we deposited an additional $7.1 million with the Service in January 2007. Additional adjustments to our tax depreciation expense are expected to be requested later by the Service for the fiscal year ended November 30, 2006. Including related interest, we estimate the combined after-tax cash flow impact of the additional federal tax adjustments for fiscal 2006, and related state tax revisions for all periods, to range between $30.0 million and $40.0 million at November 30, 2006. Our deposits are not a payment of tax, and we will receive accrued interest on any of these funds ultimately returned to us. At November 30, 2006, the approximately $110.8 million of previously discussed deposits with the Service are classified as long-term assets in our consolidated financial statements. We believe that our application of the federal income tax regulations in question, which have been applied consistently since being adopted in 1986 and have been subjected to previous IRS audits, is appropriate, and we intend to vigorously defend the merits of our position. Once commenced by the Service, the administrative appeals process is expected to take six to fifteen months to complete. If our appeal is not resolved satisfactorily, we will evaluate all of our options, including litigation. It is important to note the Federal American Jobs Creation Act of 2004 legislation, which was effective on October 23, 2004, provides owners of motorsports entertainment facility assets a seven-year recovery period for tax depreciation purposes. The motorsports provision applies prospectively from the date of enactment through January 1, 2008. We and others in the industry are pursuing a seven-year prospective tax depreciation provision. In accordance with SFAS No. 109 “Accounting for Income Taxes,” we have accrued a deferred tax liability based on the differences between our financial reporting and tax bases of such assets in our consolidated balance sheet as of November 30, 2006. While an adverse resolution of these matters could result in a material negative impact on cash flow, including payment of taxes from amounts currently on deposit with the Service, we believe that we have provided adequate reserves related to these matters including interest charges through November 30, 2006 totaling approximately $12.6 million, and, as a result, do not expect that such an outcome would have a material adverse effect on results of operations.

Future Cash Flows

Our cash flow from operations consists primarily of ticket, hospitality, merchandise, catering and concession sales and contracted revenues arising from television broadcast rights and marketing partnerships. We believe that cash flows from operations, along with existing cash, cash equivalents, short-term investments and available borrowings under our 2006 Credit Facility, will be sufficient to fund:

	•		operations and approved capital projects at existing facilities for the foreseeable future;
	•		payments required in connection with the purchase of additional interests in Raceway Associates;
	•		payments required in connection with the funding of the Unified Government’s debt service requirements related to the TIF bonds;
	•		payments related to our existing debt service commitments;
	•		any potential payments associated with our keepwell agreements;
	•		any payment of tax that may ultimately occur as a result of the examination by the Service; and
	•		the fees and expenses incurred in connection with the current legal proceeding discussed in Part II “Legal Proceedings.”

We intend to pursue further development and/or acquisition opportunities (including the possible development of new motorsports entertainment facilities, such as the New York metropolitan area, the Northwest US and other areas), the timing, size and success, as well as associated potential capital commitments, of which are unknown at this time. Accordingly, a material acceleration of our growth strategy could require us to obtain additional capital through debt and/or equity financings. Although there can be no assurance, we believe that adequate debt and equity financing will be available on satisfactory terms.

While we expect our strong operating cash flow to continue in the future, our financial results depend significantly on a number of factors relating to consumer and corporate spending, including economic conditions affecting marketing dollars available from the motorsports industry’s principal sponsors. Consumer and corporate spending could be adversely affected by economic, security and other lifestyle conditions resulting in lower than expected future operating cash flows. General economic conditions were significantly and negatively impacted by the September 11, 2001 terrorist attacks and the war in Iraq and could be similarly affected by any future attacks or fear of such attacks, or by conditions resulting from other acts or prospects of war. Any future attacks or wars or related threats could also increase our expenses related to insurance, security or other related matters. Also, our financial results could be adversely impacted by a widespread outbreak of a severe epidemiological crisis. The items discussed above could have a singular or compounded material adverse affect on our financial success and future cash flow.

Inflation

We do not believe that inflation has had a material impact on our operating costs and earnings.

Recent Accounting Pronouncements

In December 2004 the FASB issued revised SFAS No. 123(R), “Share-Based Payment.” SFAS No. 123(R) sets accounting requirements for “share-based” compensation to employees and requires companies to recognize in the income statement the grant-date fair value of stock options and other equity-based compensation. SFAS No. 123(R) is effective in annual periods beginning after June 15, 2005. We adopted SFAS No. 123(R) in the first quarter of fiscal 2006, using the modified-prospective-transition method and currently disclose the pro forma effect on net income and earnings per share of the fair value recognition provisions of SFAS No. 123(R) for periods prior to adoption. Our adoption of SFAS No. 123(R) did not have a material impact on our financial position, results of operations or cash flows.

In June 2006 the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes”, which clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes.” The interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. This interpretation also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. This interpretation is effective for fiscal years beginning after December 15, 2006. We are currently evaluating the potential impact that the adoption of this interpretation will have on its financial position and results of operations.

In June 2006 the Emerging Issues Task Force (“EITF”) reached a consensus on Issue No. 06-03, “How Taxes Collected from Customers and Remitted to Governmental Authorities Should Be Presented in the Income Statement.” EITF No. 06-03 addresses the accounting for externally imposed taxes on revenue-producing transactions that take place between a seller and its customer, including, but not limited to sales, use, value added, and certain excise taxes. EITF No. 06-03 also provides guidance on the disclosure of an entity’s accounting policies for presenting such taxes on a gross or net basis and the amount of such taxes reported on a gross basis. EITF No. 06-03 is effective for interim and fiscal years beginning after December 15, 2006. We are currently evaluating the potential effect that the adoption of this EITF will have on our financial statements.

In September 2006 the FASB issued SFAS No. 157, “Fair Value Measurements” which establishes a framework for measuring fair value in generally accepted accounting principles (“GAAP”), and expands disclosures about fair value measurements. SFAS No 157 applies under other accounting pronouncements that require or permit fair value measurements and, accordingly, SFAS No. 157 does not require any new fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. We are currently evaluating the potential impact that the adoption of this statement will have on our financial position and results of operations.

Factors That May Affect Operating Results

This report and the documents incorporated by reference may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify a forward-looking statement by our use of the words “anticipate,” “estimate,” “expect,” “may,” “believe,” “objective,” “projection,” “forecast,” “goal,” and similar expressions. These forward-looking statements include our statements regarding the timing of future events, our anticipated future operations and our anticipated future financial position and cash requirements. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we do not know whether our expectations will prove correct. We disclose the important factors that could cause our actual results to differ from our expectations in cautionary statements made in this report and in other filings we have made with the Securities and Exchange Commission. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of the risk factors described in this report and other factors set forth in or incorporated by reference in this report.

Many of these factors are beyond our ability to control or predict. We caution you not to put undue reliance on forward-looking statements or to project any future results based on such statements or on present or prior earnings levels. Additional information concerning these, or other factors, which could cause the actual results to differ materially from those in the forward-looking statements is contained from time to time in our other SEC filings. Copies of those filings are available from us and/or the SEC.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are exposed to market risk from changes in interest rates in the normal course of business. Our interest income and expense are most sensitive to changes in the general level of U.S. interest rates and the LIBOR rate. In order to manage this exposure, we use a combination of debt instruments, including the use of derivatives in the form of interest rate swap agreements. We do not enter into any derivatives for trading purposes.

The objective of our asset management activities is to provide an adequate level of interest income and liquidity to fund operations and capital expansion, while minimizing market risk. We utilize overnight sweep accounts and short-term investments to minimize the interest rate risk. We do not believe that our interest rate risk related to our cash equivalents and short-term investments is material due to the nature of the investments.

Our objective in managing our interest rate risk on our debt is to maintain a balance of fixed and variable rate debt that will lower our overall borrowing costs within reasonable risk parameters. Interest rate swaps are used from time to time to convert a portion of our debt portfolio from a variable rate to a fixed rate or from a fixed rate to a variable rate.

The following analysis provides quantitative information regarding our exposure to interest rate risk. We utilize valuation models to evaluate the sensitivity of the fair value of financial instruments with exposure to market risk that assume instantaneous, parallel shifts in interest rate yield curves. There are certain limitations inherent in the sensitivity analyses presented, primarily due to the assumption that interest rates change instantaneously. In addition, the analyses are unable to reflect the complex market reactions that normally would arise from the market shifts modeled.

As described in Note 7 to the consolidated financial statements, we have various debt instruments that are issued at fixed rates. These financial instruments, which have a fixed rate of interest, are exposed to fluctuations in fair value resulting from changes in market interest rates. The fair values of long-term debt are based on quoted market prices at the date of measurement. Our credit facilities approximate fair value as they bear interest rates that approximate market. At November 30, 2006, we did not have any variable debt outstanding; therefore, a hypothetical increase in interest rates by 1.0 percent would not result in an increase in our interest expense. At November 30, 2006, the fair value of our total long-term debt as determined by quotes from financial institutions was approximately $370.5 million. The potential decrease in fair value resulting from a hypothetical 10.0 percent shift in interest rates would be approximately $8.6 million at November 30, 2006.

From time to time we utilize derivative investments in the form of interest rate swaps to manage the fixed and floating interest rate mix of our total debt portfolio and related overall cost of borrowing. The notional amount, interest payment and maturity dates of the swaps match the terms of the debt they are intended to modify. At November 30, 2006 we did not have any interest rate swap agreements in place.

Credit risk arises from the possible inability of counterparties to meet the terms of their contracts on a net basis. However, we minimize such risk exposures for these instruments by limiting counterparties to large banks and financial institutions that meet established credit guidelines. We do not expect to incur any losses as a result of counterparty default.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders

International Speedway Corporation

We have audited the accompanying consolidated balance sheets of International Speedway Corporation and subsidiaries as of November 30, 2005 and 2006, and the related consolidated statements of operations, shareholders’ equity and cash flows for each of the three years in the period ended November 30, 2006. Our audits also included the financial statement schedule listed in Item 15a. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of International Speedway Corporation and subsidiaries at November 30, 2005 and 2006, and the consolidated results of their operations and their cash flows for each of the three years in the period ended November 30, 2006, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of International Speedway Corporation’s internal control over financial reporting as of November 30, 2006, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 6, 2007, expressed an unqualified opinion thereon.

Ernst & Young LLP

Certified Public Accountants

Jacksonville, Florida

February 6, 2007

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders

International Speedway Corporation

We have audited management’s assessment, included in the accompanying Report of Management on Internal Control Over Financial Reporting, that International Speedway Corporation maintained effective internal control over financial reporting as of November 30, 2006, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). International Speedway Corporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that International Speedway Corporation maintained effective internal control over financial reporting as of November 30, 2006, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, International Speedway Corporation maintained, in all material respects, effective internal control over financial reporting as of November 30, 2006, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of International Speedway Corporation and subsidiaries as of November 30, 2005 and 2006, and the related consolidated statements of operations, shareholders’ equity and cash flows for each of the three years in the period ended November 30, 2006, and our report dated February 6, 2007, expressed an unqualified opinion thereon.

Ernst & Young LLP

Certified Public Accountants

Jacksonville, Florida

February 6, 2007

INTERNATIONAL SPEEDWAY CORPORATION
Consolidated Balance Sheets

		November 30,
		2005				2006
		(In Thousands)
ASSETS
Current Assets:
Cash and cash equivalents		$	130,758			$	59,681
Short-term investments			8,200				78,000
Receivables, less allowance of $1,500 in 2005 and $1,000 in 2006			45,557				52,699
Inventories			6,528				3,976
Deferred income taxes			—				995
Prepaid expenses and other current assets			6,335				8,251
Total Current Assets			197,378				203,602
Property and Equipment, net			1,178,682				1,157,313
Other Assets:
Equity investments			51,160				175,915
Intangible assets, net			149,464				149,314
Goodwill			99,507				99,507
Deposits with Internal Revenue Service			96,913				110,813
Other			23,965				25,595
			421,009				561,144
Total Assets		$	1,797,069			$	1,922,059
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current portion of long-term debt		$	635			$	770
Accounts payable			19,274				29,577
Deferred income			123,870				124,254
Income taxes payable			20,067				22,477
Other current liabilities			18,645				19,226
Total Current Liabilities			182,491				196,304
Long-Term Debt			368,387				367,324
Deferred Income Taxes			194,825				191,642
Long-Term Deferred Income			11,342				10,808
Other Long-Term Liabilities			69				866
Commitments and Contingencies			—				—
Shareholders’ Equity:
Class A Common Stock, $.01 par value, 80,000,000 shares authorized; 29,394,344 and 31,078,307 issued and outstanding in 2005 and 2006, respectively			295				311
Class B Common Stock, $.01 par value, 40,000,000 shares authorized; 23,928,058 and 22,100,263 issued and outstanding in 2005 and 2006, respectively			239				221
Additional paid-in capital			699,879				698,396
Retained earnings			343,766				456,187
			1,044,179				1,155,115
Less unearned compensation — restricted stock			4,224				—
Total Shareholders’ Equity			1,039,955				1,155,115
Total Liabilities and Shareholders’ Equity		$	1,797,069			$	1,922,059

See accompanying notes

INTERNATIONAL SPEEDWAY CORPORATION
Consolidated Statements of Operations

		Year Ended November 30,
		2004				2005				2006
		(In Thousands, Except Per Share Amounts)
REVENUES:
Admissions, net		$	222,545			$	234,768			$	235,251
Motorsports related			334,943				408,514				466,095
Food, beverage and merchandise			83,236				87,269				87,288
Other			7,124				9,578				9,735
			647,848				740,129				798,369
EXPENSES:
Direct:
Prize and point fund monies and NASCAR sanction fees			119,322				136,816				151,203
Motorsports related			113,073				134,395				144,445
Food, beverage and merchandise			52,285				56,773				53,141
General and administrative			90,307				95,987				106,497
Depreciation and amortization			44,443				50,893				56,833
Impairment of long-lived assets			—				—				87,084
			419,430				474,864				599,203
Operating income			228,418				265,265				199,166
Interest income			4,053				4,860				5,312
Interest expense			(21,723	)			(12,693	)			(12,349	)
Equity in net income from equity investments			2,754				3,516				318
Loss on early redemption of debt			(4,988	)			—				—
Income from continuing operations before income taxes			208,514				260,948				192,447
Income taxes			82,218				101,876				75,467
Income from continuing operations			126,296				159,072				116,980
(Loss) income from discontinued operations, net of income taxes of ($3.7) million, $0 and ($268), respectively			(6,315	)			289				(176	)
Gain on sale of discontinued operations, net of income taxes of $27.6 million			36,337				—				—
Net income		$	156,318			$	159,361			$	116,804
Basic earnings per share:
Income from continuing operations		$	2.38			$	2.99			$	2.20
(Loss) income from discontinued operations			(0.12	)			0.01				—
Gain on sale of discontinued operations			0.68				—				—
Net income		$	2.94			$	3.00			$	2.20
Diluted earnings per share:
Income from continuing operations		$	2.37			$	2.99			$	2.20
(Loss) income from discontinued operations			(0.11	)			—				(0.01	)
Gain on sale of discontinued operations			0.68				—				—
Net income		$	2.94			$	2.99			$	2.19
Dividends per share		$	0.06			$	0.06			$	0.08
Basic weighted average shares outstanding			53,084,437				53,128,533				53,166,458
Diluted weighted average shares outstanding			53,182,776				53,240,183				53,270,623

See accompanying notes

INTERNATIONAL SPEEDWAY CORPORATION
Consolidated Statements of Changes in Shareholders’ Equity

		Class A				Class B												Accumulated
		Common				Common												Other				Unearned
		Stock				Stock				Additional								Comprehensive				Compensation-				Total
		$.01 Par				$.01 Par				Paid-in				Retained				(Loss)				Restricted				Shareholders’
		Value				Value				Capital				Earnings				Income				Stock				Equity
		(In Thousands)
Balance at November 30, 2003		$	283			$	249			$	694,719			$	34,602			$	(333	)		$	(3,055	)		$	726,465
Comprehensive income
Net income			—				—				—				156,318				—				—				156,318
Interest rate swap			—				—				—				—				311				—				311
Total comprehensive income																											156,629
Cash dividends ($.06 per share)			—				—				—				(3,196	)			—				—				(3,196	)
Exercise of stock options			—				—				442				—				—				—				442
Restricted stock grant			1				—				2,022				—				—				(2,023	)			—
Reacquisition of previously issued common stock			—				—				(361	)			(35	)			—				—				(396	)
Conversion of Class B Common Stock to Class A Common Stock			5				(5	)			—				—				—				—				—
Income tax benefit related to restricted stock plan			—				—				60				—				—				—				60
Amortization of unearned compensation			—				—				—				—				—				1,734				1,734
Balance at November 30, 2004			289				244				696,882				187,689				(22	)			(3,344	)			881,738
Comprehensive income
Net income			—				—				—				159,361				—				—				159,361
Interest rate swap			—				—				—				—				22				—				22
Total comprehensive income																											159,383
Cash dividends ($.06 per share)			—				—				—				(3,199	)			—				—				(3,199	)
Exercise of stock options			—				—				444				—				—				—				444
Restricted stock grant			1				—				2,906				—				—				(2,907	)			—
Reacquisition of previously issued common stock			—				—				(426	)			(85	)			—				—				(511	)
Conversion of Class B Common Stock to Class A Common Stock			5				(5	)			—				—				—				—				—
Forfeitures of restricted shares			—				—				(74	)			—				—				46				(28	)
Income tax benefit related to restricted stock plan			—				—				147				—				—				—				147
Amortization of unearned compensation			—				—				—				—				—				1,981				1,981
Balance at November 30, 2005			295				239				699,879				343,766				—				(4,224	)			1,039,955
Comprehensive income
Net income			—				—				—				116,804				—				—				116,804
Cash dividends ($.08 per share)			—				—				—				(4,270	)			—				—				(4,270	)
Exercise of stock options			—				—				189				—				—				—				189
Statement 123(R) transition impact on restricted stock plan			(3	)			—				(4,221	)			—				—				4,224				—
Reacquisition of previously issued common stock			—				—				(347	)			(113	)			—				—				(460	)
Conversion of Class B Common Stock to Class A Common Stock			18				(18	)			—				—				—				—				—
Award of shares granted under long-term stock incentive plan			1				—				(1	)			—				—				—				—
Income tax benefit related to stock-based compensation			—				—				197				—				—				—				197
Stock-based compensation			—				—				2,700				—				—				—				2,700
Balance at November 30, 2006		$	311			$	221			$	698,396			$	456,187			$	—			$	—			$	1,155,115

See accompanying notes

INTERNATIONAL SPEEDWAY CORPORATION
Consolidated Statements of Cash Flows

		Year Ended November 30,
		2004				2005				2006
		(In Thousands)
OPERATING ACTIVITIES
Net income		$	156,318			$	159,361			$	116,804
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			44,443				50,893				56,833
Discontinued operations depreciation			1,244				—				—
Stock-based compensation			1,734				1,953				2,700
Amortization of financing costs			250				569				538
Deferred income taxes			52,146				29,208				(4,178	)
Income from equity investments			(2,754	)			(3,516	)			(318	)
Impairment of long-lived assets			13,217				—				87,084
Gain on sale of discontinued operations			(63,926	)			—				—
Loss on early redemption of debt			4,988				—				—
Excess tax benefits relating to stock-based compensation			—				—				(185	)
Other, net			1,028				(248	)			23
Changes in operating assets and liabilities
Receivables, net			(10,959	)			7,304				(7,142	)
Inventories, prepaid expenses and other assets			(2,569	)			(644	)			336
Deposits with Internal Revenue Service			—				(96,913	)			(13,900	)
Accounts payable and other liabilities			9,215				(5,359	)			345
Deferred income			3,187				9,191				(150	)
Income taxes			18,424				(5,027	)			2,607
Net cash provided by operating activities			225,986				146,772				241,397
INVESTING ACTIVITIES
Capital expenditures			(135,218	)			(248,850	)			(110,374	)
Proceeds from asset disposals			86				31				182
Acquisition of businesses			(195,325	)			(12,660	)			—
Proceeds from sale of discontinued operations			100,391				—				—
Purchase of equity investments			(2,008	)			(11,642	)			(124,565	)
Proceeds from short-term investments			147,650				430,950				80,855
Purchases of short-term investments			(262,450	)			(324,150	)			(150,655	)
Proceeds from affiliate			—				487				128
Advance to affiliate			—				—				(3,000	)
Other, net			(1,442	)			(377	)			314
Net cash used in investing activities			(348,316	)			(166,211	)			(307,115	)
FINANCING ACTIVITIES
Proceeds under credit facility			—				—				80,000
Payments under credit facility			—				—				(80,000	)
Proceeds from long-term debt			299,570				—				—
Payment of long-term debt			(231,890	)			(7,505	)			(635	)
Payment of long-term debt redemption premium			(5,340	)			—				—
Deferred financing fees			(2,626	)			(10	)			(368	)
Proceeds from interest rate swap			2,771				—				—
Cash dividends paid			(3,196	)			(3,199	)			(4,270	)
Reacquisition of previously issued common stock			(396	)			(511	)			(460	)
Exercise of Class A common stock options			442				444				189
Excess tax benefits relating to stock-based compensation			—				—				185
Net cash provided by (used in) financing activities			59,335				(10,781	)			(5,359	)
Net decrease in cash and cash equivalents			(62,995	)			(30,220	)			(71,077	)
Cash and cash equivalents at beginning of year			223,973				160,978				130,758
Cash and cash equivalents at end of year		$	160,978			$	130,758			$	59,681