The effective tax rate for the quarter decreased slightly to 39%.

As of February 28th, 2007 the firm has deposited $117.9 million with the service for requested downward adjustments to its reported fiscal 1999 through 2005 federal tax depreciation expense. This amount also includes interest related to the federal adjustments. By the end of the year, the management expects to receive a notice from the service regarding the 2006 federal income tax related to depreciation for assets placed in service before October 2004. Including related interests, the firm expects the combine 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 million and $40 million.

Income from continuing operations for the quarter was $35.8 million or 67 cents per share on approximately 53.2 million shares outstanding.

Excluding the previously discussed $2.6 million in additional depreciation associated with the building and office complex that the firm is no longer using and expect to raise, the firm posted earnings of 70 cents per share.

- The firm’s combined cash and short-term investments totaled $98.8 million
- The current deferred income was $197.4 million and shareholders’ equity was $1.2 billion.
- Total debt at quarter end was approximately $444 million including $301 million in senior notes, $67 million in TIF bonds associated with Kansas, $65 million in borrowings on the credit facility for the acquisition of Raceway Associates, and $11.2 million in debt associated with Chicagoland Speedway and Route 66 Raceway which is now consolidated. In March the company repaid $50 million of the revolver borrowings and anticipates paying off the remaining $15 million this month.
- During the first quarter the firm purchased 209,736 shares of its Class A stock for approximately $11 million. A total of $50 million is authorized under the firm’s share repurchase program.

The corporate partner spending was strong during the year’s first quarter, posting a nearly double-digit increase over the prior year.

Contributing to the revenue growth was the new relationship with DirecTV as the first ever presenting sponsor for Speedweeks at Daytona. The firm currently has three open door unannounced NEXTEL Cup entitlements, which is consistent in where the firm was at this point last year. Of note, the firm recently secured Citizens Bank as title sponsor of Michigan’s June Cup Race. The firm has two remaining race entitlements in Busch, Craftsman Truck and IndyCar series. Negotiations with potential sponsors are ongoing and the firm expects to announce additional entitlement partners in the coming months.

In mid February, the firm announced that it is exploring the possibility of pursuing a public-private partnership to develop a motorsports entertainment facility in Adams County near Denver International Airport.

The company is currently evaluating a number of land parcels and looks forward to working with public officials to explore the feasibility of a public-private partnership that will bring considerable economic impact to the Metro Den region while growing shareholder value.

The firm will no longer pursue the development of a motorsports and multi-use recreational facility project in Kitsap County, Washington.

Earlier this year, legislation concerning the public funding portion of the Speedway development was introduced into the Washington State Legislation. The bill was discussed in several State House and Senate Committee hearings and during this time, several modifications to the bill were proposed. The firm agrees substantially all of the proposed changes.

Despite the firm’s willingness to find common ground on the proposed modifications, it has recently become apparent that additional modifications would be proposed to the legislation that were unacceptable to ISC. Due to the increased risk that the collective modifications would have a significant negative impact on the project’s financial model, the management felt that was in the firm’s best long-term interest to discontinue the Speedway development at the site. The Pacific Northwest has the large motorsports fan base and the firm still believes that it represents an attractive future opportunity for the company. The firm remains interested in a future Speedway development in the region.

In New York, the firm’s search for a suitable site for potential Speedway development is ongoing.

The firm strongly believes that a premier facility in the nation’s No. 1 media market is a significant long-term opportunity for the company. The management also continues to evaluate alternatives for the 676 acres it currently owns on Staten Island, including the sale of the acreage in parcels or as a whole or the potential development of the property with the third party. As requested by the New York Department of Environmental Conservation, the company recently performed tests on fill that have been brought to the site by two different vendors and determine that a portion of that fill had contaminants slightly above permitted levels. As a result, the DEC has directed the firm to prepare plan for the removal of that fill.

At this present time, the firm cannot estimate the total cost related with the fill removal process, but it does not expect it to be material. However, it is important to note that the vendors are ultimately liable for testing and certifying the clean fill. The firm continues to work with the local and state agencies to resolve these issues and resume fill operations as soon as possible.

The company is proceeding with the preparation of its defense in the Kentucky litigation.

For 2007, the firm now expects litigation costs related to its defense to range between $4.5 million to $5.5 million or 5 cents to 6 cents per share. Note that the compliant was recently revised to seek in addition to damages, break-up for the France family ownership of ISC and NASCAR and divestiture by ISC of eight facilities. Based on their current timeline established by the court, a trial is scheduled for no earlier than fall of 2007. Given the materials and testimonies produced during the discovery process and reviewed to-date, the firm continues to believe that the vague allegations of the complaint are totally without merit. The firm will defend itself vigorously in this matter.

Over the last few months, there has been much public discussion regarding future economic uncertainty due to a weakness in the housing sector and rising oil prices.

Both of these factors are correlated to consumer discretionary spending, which is something that impacts the firm. The firm continually monitors these trends to anticipate challenges and hopefully mitigate their impact on its long-term operating results. The company continues to implement innovative consumer marketing strategies and invest in fan amenities to enhance the value proposition for the customers. The company’s national footprint helps the firm to offset the effects of regional economic softness on its overall businesses. Continued strength and corporate partners spending and hospitality, as well as, the firm’s significant revenue visibility from the television broadcast agreements place it in a solid position to weather potential near-term economic challenges.

In February, the firm closed on the acquisition of the remaining interest in Raceway Associates, owners and operators of Chicagoland Speedway and Route 66 Raceway.