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Earnings Calls: 
Speedway Motorsports Earnings Call, Second Quarter 2008
Author: Maclintosh Kuhlengisa
Last Update: 6:44 AM ET September 29 2008



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The promoter of motorsport entertainment reported an 18% rise in revenue to $212.8 million as income positively responded by 17% to $47 million or $1.08 a share. Admissions, concessions and souvenir merchandising revenues negatively impacted by declines in consumer spending.

Investors Question and Answers

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Marcus G. Smith: On both ends, it is cutting costs where they need to be cut and it is taken tough management and just tough decision making in the face of things to change what was done in the past and it is come along very well.

Eugene Fox, III: You all had a small gain in the quarter from an asset sale; elaborate on that?

William R. Brooks: We are buying and selling small amounts of land around our speedways and we had an option on some land that came up, the sale did not occur but we recognized the option proceeds.

Edward Williams: Discuss the attendance levels, how they performed with the various sanctioning groups and also on a track basis?

Marcus G. Smith: We had a slightly soft attendance at the facilities, some more than others, some close to flat and others down. NHRA attendance has been up this year at most of the events, car counts at smaller events have been very strong, and Legends Racing in Atlanta and Charlotte has been ahead of last year.

On a race-to-race basis we have been strong at those strong events like you would expect in a Las Vegas, in a Bristol.

Chris Sim: You mentioned the corporate sponsorships and the renewals you got this year and new sponsors. What are you seeing on the rates, what are you charging for those sponsors on a year-over-year basis?

Marcus G. Smith: We are seeing consistency where we have been able to grow the rates, certainly in a softer time we are more flexible to various negotiations but we have seen rates continue to go up slightly.

In the speedway business there has not been the same escalation in sponsorship pricing as a team for instance. That gives us a buffer and enables us to continue to raise the rates slightly.

Chris Sim: What have you been seeing on advance ticket sales and maybe the average ticket prices on those advance ticket sales?

William R. Brooks: The advance ticket sales are running about like our general admissions. People are deferring their purchase when they are able to do so and fewer are buying in advance. Ticket sales are somewhat weaker than what they were but surprisingly the tickets that sell first are almost always the premium tickets with the higher dollars.

Chris Sim: You have a significant draw down on the revolver and do you have any plans for refinancing that?

William R. Brooks: There is 18 months left on that revolver and we are reviewing whether we are going to do anything with it in this year or if we are going to wait to try to renew the revolver next year.

Bob Simonson: On the attendance stuff did Bristol sell out the spring race and how does it compare with last year?

William R. Brooks: It was lightened down from last year, was different by 300 or 500 tickets or something like that and the dollars were actually better than they were in the prior year if I recall correctly.

Bob Simonson: New Hampshire is the smallest seating track you have got. Do you have any plans for CapEx on New Hampshire?

Marcus G. Smith: We do not have quite as many seats in Sonoma as do in New Hampshire but we are developing plans now. We did make small capital improvements in New Hampshire between the time snows thawed and when we had first race there and the fans appreciated it and received it well.

We are evaluating what we can do and the windows where construction is possible but as in the New Hampshire area you have got a few months where you can build and the rest you are under snow.

Eugene Fox, III: Elaborate on what remains in terms of major sponsorship issues for 2009?

Marcus G. Smith: Our biggest opportunity for 2009 is in Las Vegas where we have our Cup race in the spring available for sponsorship. We are looking for the very best partner for us moving into the future there and feel very good about the opportunity that that presents, someone in our team is on that.
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