SPEEDWAY MOTORSPORTS INC, 10-Q filed on 11/7/2018
Quarterly Report
v3.10.0.1
Document And Entity Information - shares
9 Months Ended
Sep. 30, 2018
Nov. 05, 2018
Document Information [Line Items]    
Entity Registrant Name SPEEDWAY MOTORSPORTS INC  
Entity Central Index Key 0000934648  
Trading Symbol trk  
Current Fiscal Year End Date --12-31  
Entity Filer Category Accelerated Filer  
Entity Current Reporting Status Yes  
Entity Emerging Growth Company false  
Entity Small Business false  
Entity Common Stock, Shares Outstanding (in shares)   40,832,440
Document Type 10-Q  
Document Period End Date Sep. 30, 2018  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q3  
Amendment Flag false  
v3.10.0.1
Consolidated Balance Sheets (Current Period Unaudited) - USD ($)
$ in Thousands
Sep. 30, 2018
Dec. 31, 2017
Current Assets:    
Cash and cash equivalents $ 80,501 $ 81,924
Accounts receivable, net 43,852 28,459
Prepaid and refundable income taxes 7 2,135
Inventories, net 8,689 7,283
Prepaid expenses 2,727 3,533
Total Current Assets 135,776 123,334
Notes Receivable 661 799
Other Assets 23,982 23,724
Property and Equipment, Net (Note 2) 947,866 958,215
Other Intangible Assets, Net 298,383 298,383
Goodwill 46,225 46,225
Total 1,452,893 1,450,680
Current Liabilities:    
Current maturities of long-term debt 3,167 7,662
Accounts payable 23,315 12,017
Deferred race event and other income, net 24,228 40,779
Accrued income taxes 1,731 383
Accrued interest 1,727 4,307
Accrued expenses and other current liabilities 24,533 23,585
Total Current Liabilities 78,701 88,733
Long-term Debt 197,697 219,452
Deferred Income (Note 2) 2,501 3,054
Deferred Income Taxes, Net 202,330 201,760
Other Liabilities 19,017 18,458
Total Liabilities 500,246 531,457
Commitments and Contingencies
Stockholders’ Equity:    
Preferred Stock, $.10 par value, shares authorized – 3,000,000, no shares issued
Common Stock, $.01 par value, shares authorized – 200,000,000, issued and outstanding – 40,856,000 in 2018 and 40,992,000 in 2017 462 461
Additional Paid-in Capital 265,477 262,885
Retained Earnings 802,602 767,859
Treasury Stock at cost, shares – 5,350,000 in 2018 and 5,137,000 in 2017 (115,894) (111,982)
Total Stockholders’ Equity 952,647 919,223
Total $ 1,452,893 $ 1,450,680
v3.10.0.1
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares
Sep. 30, 2018
Dec. 31, 2017
Preferred stock par value (in dollars per share) $ 0.10 $ 0.10
Preferred stock, shares authorized (in shares) 3,000,000 3,000,000
Preferred stock, shares issued (in shares) 0 0
Common Stock, par value (in dollars per share) $ 0.01 $ 0.01
Common Stock, shares authorized (in shares) 200,000,000 200,000,000
Common Stock, shares issued (in shares) 40,856,000 40,992,000
Common Stock, shares outstanding (in shares) 40,856,000 40,992,000
Treasury Stock at cost, shares (in shares) 5,350,000 5,137,000
v3.10.0.1
Consolidated Statements of Operations (Unaudited) - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Sep. 30, 2018
Sep. 30, 2017
Revenues:        
Revenues $ 160,085 $ 130,723 $ 400,297 $ 377,178
Expenses and Other:        
General and administrative 26,277 25,793 77,925 75,323
Depreciation and amortization 13,252 13,834 39,480 44,808
Interest expense, net 2,771 3,054 8,681 9,222
Other expense (income), net 60 (157) (2,186) 45
Total Expenses and Other 127,923 116,072 330,996 324,009
Income Before Income Taxes 32,162 14,651 69,301 53,169
Provision for Income Taxes (8,089) (5,440) (16,059) (18,587)
Net Income $ 24,073 $ 9,211 $ 53,242 $ 34,582
Basic Earnings Per Share (in dollars per share) $ 0.59 $ 0.22 $ 1.30 $ 0.84
Weighted Average Shares Outstanding (in shares) 40,882 41,004 40,936 41,046
Diluted Earnings Per Share (in dollars per share) $ 0.59 $ 0.22 $ 1.30 $ 0.84
Weighted Average Shares Outstanding (in shares) 40,895 41,022 40,951 41,062
Impairment of goodwill (Note 4)     $ 1,117
Admissions [Member]        
Revenues:        
Revenues $ 30,536 $ 27,641 66,811 71,532
Event Related [Member]        
Revenues:        
Revenues 45,099 34,452 112,082 103,491
NASCAR Broadcasting Revenue [Member]        
Revenues:        
Revenues 78,374 61,962 201,246 180,065
Other Operating Revneues [Member]        
Revenues:        
Revenues 6,076 6,668 20,158 22,090
Direct Expense of Events [Member]        
Expenses and Other:        
Cost of goods and services sold 35,597 32,732 80,864 78,420
NASCAR Event Management Fees [Member]        
Expenses and Other:        
Cost of goods and services sold 45,731 36,453 112,559 100,540
Other Direct Operating Expense [Member]        
Expenses and Other:        
Cost of goods and services sold $ 4,235 $ 4,363 $ 13,673 $ 14,534
v3.10.0.1
Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)
$ in Thousands
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Treasury Stock [Member]
Total
Balance (in shares) at Dec. 31, 2016 41,098,000        
Balance at Dec. 31, 2016 $ 459 $ 258,880 $ 644,308 $ (105,864) $ 797,783
Net income 34,582 34,582
Share-based compensation (in shares) 76,000        
Share-based compensation $ 1 2,532     2,533
Quarterly cash dividends of $0.15 per share of common stock (18,551) (18,551)
Repurchases of common stock (in shares) (220,000)        
Repurchases of common stock (4,348) (4,348)
Exercise of stock options (in shares) 31,000        
Exercise of stock options 482 482
Balance (in shares) at Sep. 30, 2017 40,985,000        
Balance at Sep. 30, 2017 $ 460 261,894 660,339 (110,212) 812,481
Balance (in shares) at Dec. 31, 2017 40,992,000        
Balance at Dec. 31, 2017 $ 461 262,885 767,859 (111,982) 919,223
Net income 53,242 53,242
Share-based compensation (in shares) 77,000        
Share-based compensation $ 1 2,592     2,593
Quarterly cash dividends of $0.15 per share of common stock (18,499) (18,499)
Repurchases of common stock (in shares) (213,000)        
Repurchases of common stock (3,912) $ (3,912)
Exercise of stock options (in shares)         0
Balance (in shares) at Sep. 30, 2018 40,856,000        
Balance at Sep. 30, 2018 $ 462 $ 265,477 $ 802,602 $ (115,894) $ 952,647
v3.10.0.1
Consolidated Statements of Stockholders' Equity (Unaudited) (Parentheticals) - $ / shares
9 Months Ended
Jul. 25, 2018
Apr. 23, 2018
Feb. 12, 2018
Sep. 30, 2018
Sep. 30, 2017
Cash dividends, per share of common stock (in dollars per share) $ 0.15 $ 0.15 $ 0.15 $ 0.15 $ 0.15
v3.10.0.1
Consolidated Statements of Cash Flows (Unaudited) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2018
Sep. 30, 2017
Cash Flows from Operating Activities:    
Net income $ 53,242 $ 34,582
Adjustments to reconcile net income to net cash provided by operating activities:    
Impairment of goodwill 1,117
Deferred loan cost amortization 1,132 1,155
Gain on disposals of property and equipment and other assets (2,260) (308)
Depreciation and amortization 39,480 44,808
Amortization of deferred income (615) (700)
Deferred income tax provision 989 (6,265)
Share-based compensation 2,593 2,533
Changes in operating assets and liabilities:    
Accounts receivable (15,387) (4,902)
Prepaid, refundable and accrued income taxes 3,476 11,572
Inventories (1,406) 683
Prepaid expenses 806 1,162
Accounts payable 7,395 3,762
Deferred race event and other income (16,567) (10,606)
Accrued interest (2,580) (2,577)
Accrued expenses and other liabilities 1,641 2,510
Deferred income 78 189
Other assets and liabilities (420) (155)
Net Cash Provided By Operating Activities 71,597 78,560
Cash Flows from Financing Activities:    
Principal payments on long-term debt (27,162) (31,157)
Exercise of common stock options 482
Dividend payments on common stock (18,499) (18,551)
Repurchases of common stock (3,912) (4,348)
Net Cash Used By Financing Activities (49,573) (53,574)
Cash Flows from Investing Activities:    
Payments for capital expenditures (25,025) (21,960)
Proceeds from sales, net of payments for disposals, of property and equipment and other assets 1,422 3,027
Repayment of note receivable 132 405
Net Cash Used By Investing Activities (23,471) (18,528)
Net (Decrease) Increase in Cash and Cash Equivalents (1,447) 6,458
Cash and Cash Equivalents at Beginning of Period 82,200 79,568
Cash and Cash Equivalents at End of Period 80,753 86,026
Supplemental Cash Flow Information:    
Cash paid for interest, net of amounts capitalized 11,615 12,220
Supplemental Non-Cash Investing and Financing Activities Information:    
Increase (decrease) in accounts payable for capital expenditures $ 4,153 $ (526)
v3.10.0.1
Note 1 - Description of Business
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Nature of Operations [Text Block]
1.
DESCRIPTION OF BUSINESS
 
Basis of Presentation
– The consolidated financial statements include the accounts of Speedway Motorsports, Inc. and all of its wholly-owned and operating subsidiaries: Atlanta Motor Speedway LLC (AMS), Bristol Motor Speedway LLC (BMS), Charlotte Motor Speedway LLC (CMS), Kentucky Raceway LLC d/b/a Kentucky Speedway (KyS), Nevada Speedway LLC d/b/a Las Vegas Motor Speedway (LVMS), New Hampshire Motor Speedway, Inc. (NHMS), North Wilkesboro Speedway, Inc. (NWS), Speedway Sonoma LLC (Sonoma Raceway or SR), Texas Motor Speedway, Inc. (TMS), SMISC Holdings LLC d/b/a SMI Properties (SMI Properties or SMIP), US Legend Cars International, Inc. (Legend Cars), Oil-Chem Research Corporation (Oil-Chem), SMI Trackside LLC (SMI Trackside), Speedway Funding LLC, Speedway Properties Company LLC a/k/a Performance Racing Network (PRN), Speedway Media LLC a/k/a Racing Country USA (RCU), and TSI Management Company LLC d/b/a The Source International LLC (TSI) (collectively, the Company, SMI, we, our or us). Hereafter, references to “the Company’s” or “eight” speedways exclude NWS, which presently has
no
significant operations and assets consist primarily of real estate which has
no
significant fair value. See Notes
1
and
2
to the Consolidated Financial Statements in our
2017
Annual Report on Form
10
-K (
2017
Annual Report) for further description of our business operations, properties and scheduled events.
 
Racing Events
– In
2018,
we are holding
24
major annual racing events sanctioned by the National Association for Stock Car Auto Racing, Inc. (NASCAR), including
13
Monster Energy Cup and
11
Xfinity Series racing events. We also are holding
eight
NASCAR Camping World Truck Series,
five
NASCAR K&N Pro Series,
three
NASCAR Whelen Modified Tour,
two
IndyCar Series,
six
major National Hot Rod Association (NHRA),
one
Automobile Racing Club of America (ARCA) and
three
World of Outlaws (WOO) racing events. In
2017,
we held
24
major annual racing events sanctioned by NASCAR, including
13
Monster Energy Cup and
11
Xfinity Series racing events. We also held
eight
NASCAR Camping World Truck Series,
three
NASCAR K&N Pro Series,
four
NASCAR Whelen Modified Tour,
two
IndyCar Series,
six
major NHRA,
one
ARCA and
three
WOO racing events.
 
2018
Monster Energy NASCAR Cup, Xfinity and Camping World Truck Series Race Date Realignments to Las Vegas Motor Speedway 
– We realigned
one
annual Monster Energy Cup Series and
one
annual Camping World Truck Series racing event from NHMS, and an annual Xfinity Series racing event from KyS, to LVMS beginning in
September 2018.
We considered many factors, including the popularity, demand, alternative uses and revenues, and potential net increase in long-term future profitability from conducting additional annual NASCAR racing events in the LVMS market. 
v3.10.0.1
Note 2 - Significant Accounting Policies and Other Disclosures
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Significant Accounting Policies [Text Block]
2.
SIGNIFICANT ACCOUNTING POLICIES AND OTHER DISCLOSURES
 
These unaudited consolidated financial statements should be read in conjunction with our consolidated financial statements included in our
2017
Annual Report. In management's opinion, these unaudited consolidated financial statements contain all adjustments necessary for their fair statement at interim periods in accordance with accounting principles generally accepted in the United States. All such adjustments are of a normal recurring nature unless otherwise noted. The results of operations for interim periods are
not
necessarily indicative of operating results that
may
be expected for the entire year due to the seasonal nature of the Company's motorsports business. See Note
2
to the Consolidated Financial Statements in our
2017
Annual Report for further discussion of significant accounting policies.
 
NASCAR Broadcasting Revenues and NASCAR Event Management (formerly purse and sanction) Fees
– Under event management agreements, NASCAR typically retains
10%
of gross broadcasting revenues as a component of their event management fees. We recognize
90%
of gross broadcasting revenues as revenue, and
25%
of gross revenues for purses awarded to race participants for each race. The remainder represents additional annually negotiated event management fees paid to NASCAR by the Company for each race. We historically presented the
10%
portion of broadcast rights fees retained by NASCAR as both broadcasting revenues and related event management fees. We have determined that such amounts should be presented net, and have revised the presentation of our previously issued financial statements. We concluded the effect on our previously reported interim financial statements was
not
material. In addition, management believes the revised presentation provides consistency with that used by other companies that promote NASCAR racing events. We revised NASCAR broadcasting revenue and NASCAR event management fees by
$6,885,000
and
$20,008,000
in the
three
and
nine
months ended
September 30, 2017 (
comparable amounts were
$8,709,000
and
$22,361,000
for the
three
and
nine
months ended
September 30, 2018).
The revision had
no
impact on our net income or loss, earnings or loss per share, balance sheet or cash flows.
 
Quarterly Reporting
– We recognize revenues and operating expenses for all events in the calendar quarter in which conducted. Changes in race schedules at our speedways from time to time, including speedway acquisitions, can lessen the comparability of operating results between quarterly financial statements of successive years and increase or decrease the seasonal nature of our motorsports business. The more significant races affected by poor weather and other racing schedule changes for the
three
and
nine
months ended
September 30, 2018
as compared to
2017
include:
 
Poor weather or excessive heat surrounded Monster Energy NASCAR Cup race weekends at AMS and LVMS in the
first
quarter
2018,
at BMS, CMS, SR and TMS in the
second
quarter
2018,
and at BMS, LVMS and NHMS in the
third
quarter
2018
One NASCAR Monster Energy Cup and
one
annual Camping World Truck Series racing event from NHMS, and
one
Xfinity Series racing event from KyS, were realigned to LVMS in the
third
quarter
2018
(all were held in the
third
quarter
2017
)
CMS held
one
NASCAR Monster Energy and
one
Xfinity Series race in the
third
quarter
2018
that were held in the
fourth
quarter
2017
CMS held
one
major NHRA racing event in the
third
quarter
2017
that is being held in the
fourth
quarter
2018
Poor weather also surrounded certain smaller non-NASCAR events at CMS and TMS in the
second
quarter
2018
LVMS held
one
NASCAR Camping World Truck Series race in the
first
quarter
2018
that was held in the
third
quarter
2017
 
Consolidated Statements of Cash Flows
– Under Accounting Standards Update
No.
2016
-
15
adopted as of
January 1, 2018 (
see “Recently Issued Accounting Standards” below), we now include restricted cash balances in Cash and Cash Equivalents on our Consolidated Statements of Cash Flows for all periods presented. Restricted cash balances are insignificant and included in Other Assets on our Consolidated Balance Sheets.
 
Income Taxes
– We provide for income taxes at the end of each interim period based on management’s best estimate of the annual estimated effective income tax rate. Cumulative adjustments to our annual estimated effective income tax rate are recorded in the interim period in which a change in the annual estimated effective income tax rate is determined. Cash paid for income taxes excludes any previous overpayments the Company
may
have elected to apply to income tax liabilities. The Company has
no
undistributed foreign earnings or cash or cash equivalents held outside of the US. See Notes
2
and
8
to the Consolidated Financial Statements in our
2017
Annual Report for additional information on our accounting for income taxes.
 
Our effective income tax rate for the
three
months ended
September 30, 2018
and
2017
was
25.2%
and
37.1%,
and for the
nine
months ended
September 30, 2018
and
2017
was
23.2%
and
35.0%,
respectively. The
2018
tax rates reflect the lower US corporate federal tax rate under the Tax Cuts and Jobs Act further described below, and a
second
quarter
2018
non-recurring tax benefit of
$1,110,000
resulting from certain state income tax law changes. Our tax rates for the
nine
months ended
September 30, 2017 
reflect reduced net deferred income tax liabilities of
$1,791,000
for anticipated lower state income tax rates associated with race date realignments, and other lower effective state income tax rates. The tax rate for the
nine
months ended
September 30, 2017
was partially offset by reduced deferred tax assets associated with certain state net operating loss carryforwards of
$515,000.
We paid cash of
$11,625,000
and
$12,855,000
for income taxes in the
nine
months ended
September 30, 2018
and
2017.
 
Accounting for Uncertainty in Income Taxes
– Income tax liabilities for unrecognized tax benefits approximate
$11,711,000
at both
September 30, 2018
and
December 31, 2017,
all of which relates to our previously discontinued operation. Of those amounts,
$11,534,000
is included in noncurrent other liabilities, all of which would favorably impact our effective tax rate if recognized, and
$177,000
is included in deferred tax liabilities at both
September 30, 2018
and
December 31, 2017.
As of
September 30, 2018
and
December 31, 2017,
management believes $
823,000
of unrecognized tax benefits will be recognized within the next
twelve
months. Interest and penalties associated with unrecognized tax benefits were insignificant for the
three
and
nine
months ended
September 30, 2018
and
2017.
As of
September 30, 2018
and
December 31, 2017,
we had
$660,000
and
$241,000
accrued for the payment of interest and penalties on uncertain tax positions, which is included in other noncurrent liabilities. The tax years that remain open to examination include
2015
through
2017
by the Internal Revenue Service, and
2013
 through
2017
by other state taxing jurisdictions to which we are subject. 
 
December 2017
Tax Cuts and Jobs Act Enactment
On
December 22, 2017,
the Tax Cuts and Jobs Act (the Tax Act) was enacted and substantially amended the Internal Revenue Code. Effective
January 1, 2018,
the Act reduces US corporate federal tax rates from
35%
to
21%,
provides for
100%
expensing of certain qualified capital investments through
2022,
repeals the corporate Alternative Minimum Tax, eliminates loss carrybacks, limits using future losses, and further limits the deductibility of certain executive compensation, among other provisions. Current accounting guidance provides for a provisional
one
-year measurement period for entities to finalize their accounting for certain income tax effects of the Tax Act.
 
As of
December 31, 2017,
we recognized provisional tax expense related to non-deductible executive compensation as we anticipated that performance-based compensation would
no
longer be tax deductible. During the
three
and
nine
months ended
September 30, 2018,
we recognized
$56,000
of tax benefit related to changes made to the provisional amounts, primarily related to the revaluation of deferred tax assets and liabilities. We expect to continue to refine the calculations as additional analysis is completed and as the Internal Revenue Service issues additional guidance. We plan to finalize the accounting for those provisional amounts in the
fourth
quarter
2018
upon filing our corporate income tax returns. Final amounts
may
differ from provisional amounts after further analysis, changes in interpretation and assumptions, or additional regulatory guidance that
may
be issued, among other things.
 
Income Tax Benefits
– Applicable accounting guidance
may
require establishing valuation allowances for certain deferred tax assets or income tax liabilities for unrecognized tax benefits, notwithstanding management believes associated tax filing positions are sustainable and are or will be reflected in its tax filings. At
September 30, 2018
and
December 31, 2017,
liabilities for unrecognized tax benefits totaled
$11.7
million. Should those tax positions
not
be fully sustained if examined, an acceleration of material income taxes payable could occur. Where
no
net income tax benefit had been previously reflected because of providing a valuation allowance on related deferred tax assets, our future results of operations might
not
be significantly impacted. However, resulting cash required for payments of income taxes could be material in the period in which such determination is made.
 
Advertising Expenses
– Event specific advertising costs are expensed when an associated event is held and included principally in direct expense of events. Non-event related advertising costs are expensed as incurred and included principally in other direct operating expense. Advertising expense amounted to
$4,449,000
and
$3,831,000
for the
three
months ended
September 30, 2018
and
2017,
and
$10,879,000
and
$10,854,000
for the
nine
months ended
September 30, 2018
and
2017.
There were
no
deferred direct-response advertising costs at
September 30, 2018
or
December 31, 2017.
 
TMS Mineral Rights
Lease Receipts
– We recognized royalty revenue of
$334,000
and
$508,000
in the
three
months ended
September 30, 2018
and
2017,
and
$1,077,000
and
$1,486,000
in the
nine
months ended
September 30, 2018
and
2017
under a natural gas mineral rights lease agreement and a joint exploration agreement entitling TMS to stipulated stand-alone and shared royalties. Such revenues can vary due to associated volatility in natural gas price levels and common diminishing well production, as well as other factors outside of TMS’s control. At this time, while extraction activities continue,
no
new wells are being explored, and management is unable to determine ongoing volumes of production if any or for how long (including common diminishing well production over time), or if natural gas price levels will further decline, remain steady or adequate. The agreements stipulate that TMS distribute
25%
of production royalty revenues to the lessee, and obligate TMS to spend amounts equal to royalties received on TMS facility and road infrastructure improvements beginning in
2017,
up to specified cumulative amounts. At this time, management believes
2018
revenues will
not
differ significantly from
2017,
and that our infrastructure spending will continue to exceed anticipated future royalties similar to
2017.
As of
September 30, 2018
and
December 31, 2017,
there was
no
deferred income associated with these agreements.
 
Fair Value of Financial Instruments
– We follow applicable authoritative guidance which requires that financial and non-financial assets and liabilities measured and reported on a fair value basis be classified, disclosed and categorized as further described below. Fair value estimates are based on relevant market information and single broker quoted market prices where available at a specific point in time, and changes in assumptions or market conditions could significantly affect estimates. The carrying values of cash and cash equivalents, accounts receivable, certain other assets and accounts payable approximate fair value because of the short maturity of these financial instruments. Cash surrender values are carried at fair value based on binding broker quoted market prices. Notes receivable and bank revolving credit facility and term loan borrowings are variable interest rate financial instruments and, therefore, carrying values approximate fair value. The fixed rate senior notes payable are publicly traded and estimated fair values are based on single broker quoted market prices. Other long-term debt bears interest approximating market rates; therefore, carrying values approximate market value. There have been
no
changes or transfers between category levels or classes.
 
The following table presents estimated fair values and categorization levels of our financial instruments as of
September 30, 2018
and
December 31, 2017 (
in thousands):
 
             
2018
   
2017
 
   
Level
 
Class
 
Carrying
Value
   
Fair Value
   
Carrying
Value
   
Fair Value
 
Assets
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
   
1
 
R
  $
80,501
    $
80,501
    $
81,924
    $
81,924
 
Note receivable
   
2
 
NR
   
661
     
661
     
799
     
799
 
Cash surrender values
   
2
 
NR
   
10,369
     
10,369
     
9,822
     
9,822
 
                                           
Liabilities
(principal)
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Floating rate revolving Credit Facility, including Term Loan
   
2
 
NR
   
3,000
     
3,000
     
30,000
     
30,000
 
5.125% Senior Notes due 2023
   
2
 
NR
   
200,000
     
198,000
     
200,000
     
205,000
 
Other long-term debt
   
2
 
NR
   
887
     
887
     
1,049
     
1,049
 
 
Level
1
 :
Quoted market prices in active markets for identical assets or liabilities.
Level
2:
Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level
3:
Unobservable inputs that are
not
corroborated by market data.
Class R:
Measured at fair value on recurring basis, subsequent to initial recognition.
Class NR:
Measured at fair value on nonrecurring basis, subsequent to initial recognition.
 
Property and Equipment
– From time to time, we renovate various seating, suite and other areas at our speedways for modernizing our facilities, alternative marketing or development purposes such as offering unique fan zones, expanded premium hospitality and RV camping areas, or wider seating and improved sight lines. When management decides on renovation and removal, accelerated depreciation is recorded prospectively over shortened estimated remaining useful lives of the assets, and accounted for as a change in estimate, beginning when management contracts and begins removal. In the
first
quarter
2017,
we contracted and began removing certain seating at CMS, KyS and NHMS. As such, we recorded pre-tax charges for accelerated depreciation and costs of removal (included in other expense, net) aggregating
$4,597,000,
before income tax benefits of
$1,700,000,
in the
first
quarter
2017.
These charges are included in our "motorsports event related" reporting segment (see Note
10
).
 
Recently Issued Accounting Standards
– The Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)
No.
2016
-
15
“Statement of Cash Flows (Topic
23
) - Classification of Certain Cash Receipts and Cash Payments” which provides specific guidance on
eight
cash flow classification issues. The guidance is effective for fiscal years beginning after
December 15, 2017,
and interim periods within those fiscal years, and was applied using a retrospective transition method to each period presented. Our adoption of this new guidance as of
January 1, 2018
had an immaterial impact on our financial statements.
 
The FASB issued ASU
No.
2016
-
02
“Leases (Subtopic
842
)” which replaces all current US GAAP guidance on this topic, and requires lessees to recognize assets and liabilities arising from leases as well as extensive quantitative and qualitative disclosures. The FASB issued ASU
No.
2018
-
10
“Codification Improvements to Topic
842,
Leases” which clarifies certain transitional and application guidance. Lessees will need to recognize on their balance sheets right-of-use assets and lease liabilities for the majority of their leases (other than leases meeting the definition of a short-term lease). Right-of-use assets will be measured at lease liability amounts, adjusted for lease prepayments, lease incentives received and lessee’s initial direct costs. Lease liabilities will equal the present value of lease payments. Assets will be based on the liability, subject to adjustment, such as for initial direct costs. Operating leases
may
typically result in straight-line expense, while finance leases similar to front-loaded expense pattern. Classification will be based on criteria largely similar to those applied in current lease accounting. The FASB also issued ASU
No.
2018
-
11
“Leases (Topic
842
), Targeted Improvements” which provides entities with an optional cumulative-effect adjustment transition method for adopting the new leases standard, and a practical expedient related to accounting for separate leasing and non-leasing components of a contract. Entities also have the option of applying the guidance using the modified retrospective approach for all leases existing as of the effective date, which requires application at the beginning of the earliest comparative period presented. The guidance is effective for fiscal years beginning after
December 15, 2018,
and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the adoption alternatives and potential impact that adoption
may
have on our financial statements, including ongoing analysis of transactional data, underlying contracts and associated accounting policies, and continue to gather information for required presentation and disclosures. Also, we are implementing processes, internal controls and technology solutions to help enable timely and accurate reporting.
 
The FASB issued ASU
No.
2018–01
"Leases (Topic
842
): Land Easement Practical Expedient for Transition to Topic
842"
which provides an optional transition practical expedient to
not
evaluate existing or expired land easements that were
not
previously accounted for as leases under current lease guidance. Entities that elect this practical expedient should evaluate new or modified land easements at the date of adoption, which should be applied consistently to all existing or expired land easements
not
previously accounted for as leases. Entities that do
not
elect this practical expedient should evaluate all existing or expired land easements to assess whether they meet the definition of a lease. This Update affects entities with land easements that existed or expired before adoption, provided the entity does
not
account for those land easements as leases under current guidance. Once adopted, this Update should be applied prospectively to all new or modified land easements to determine whether any arrangements should be accounted for as a lease. Entities should continue to apply its current accounting policy for accounting for land easements that existed before adoption of this Update. This guidance is effective beginning in the same periods as Update
No.
2016
-
02
described above. We are currently evaluating the potential impact that adoption
may
have on our financial statements.
 
Revenue from Contracts with Customers
– As of
January 1, 2018,
we adopted Accounting Standards Update
No.
2014
-
09
"Revenue from Contracts with Customers (Topic
606
)” and associated amendments, using the modified retrospective method of adoption (ASC
606
). We applied, and are continuing to apply, the
five
-step model provided in this new standard. The guidance includes the core principle that entities recognize revenue to depict transfers of promised goods or services to customers in amounts that reflect the consideration entities expect to be entitled in exchange for those goods or services, and expands required financial statement disclosures regarding revenue recognition. Adoption did
not
result in an initial cumulative adjustment that impacted our retained earnings. There was
no
impact on the measurement or recognition of revenue of prior periods, and management believes adoption will
not
materially impact our future timing or classification of revenue recognition. Management believes
no
unusual or significant estimation was necessary to apply the new revenue guidance to existing customer contracts. Our main types of revenue contracts and performance obligations are further described below. Our evaluation under ASC
606
determined that certain accounts receivable should be classified as contract assets, and corresponding deferred revenues should be classified as contract liabilities. These future contracted revenues, as further described below, include various event related marketing agreements, and event tickets purchased under extended payment terms that have
not
yet been paid in full, and related performance obligations have
not
been satisfied. Under ASC
606,
contract assets and contract liabilities in a contract are reportable on a net basis.
 
Disaggregated Revenues
– Based on economic factors, including their nature, timing and certainty as further described below, we have disaggregated the composition of our revenues in the following table. The table includes our admissions, NASCAR broadcasting, and sponsorships and other event related revenues that are reported in our Motorsports Event Related segment, and souvenir and other merchandise and other revenues that are reported in that segment and our All Other segment (see Note
10
). This disaggregation corresponds with our segment reporting except as described below. Management believes there are
no
unusual or significant uncertainties or conditions regarding our revenues or cash flows, except should uncontrollable circumstances such as poor weather, adverse incidents or geopolitical events involving large gatherings of people prevent a major NASCAR race from being held during the racing season. All such races have been held within their scheduled calendar year over the years.
 
   
Three Months Ended
September 30:
   
Nine Months Ended
September 30:
 
   
2018
   
2017
   
2018
   
2017
 
Admissions
  $
30,536
    $
27,641
    $
66,811
    $
71,532
 
NASCAR broadcasting
   
78,374
     
61,962
     
201,246
     
180,065
 
Sponsorships and other event related
   
42,092
     
31,965
     
105,038
     
96,786
 
Souvenir and other merchandise
   
5,368
     
4,958
     
14,671
     
14,673
 
Other
   
3,715
     
4,197
     
12,531
     
14,122
 
Total Revenue
  $
160,085
    $
130,723
    $
400,297
    $
377,178
 
 
The following describes the composition of our disaggregated revenues and associated performance obligations:
 
Admissions
– We sell tickets to individuals, corporate customers and other groups, including contracted admissions and other access, to our motorsport and non-motorsports events.
 
NASCAR Broadcasting
– NASCAR contracts directly with certain television networks on broadcasting rights for all NASCAR-sanctioned racing events. We receive television broadcasting revenues under contractual sanction agreements for each such race. SMI has separate
five
-year Event Management Agreements (formerly purse and sanction) with NASCAR under which our speedways will conduct such racing events through
2020.
 
Sponsorships
and
Other Event Related
– Sponsorships generally consist of event and official sponsorship agreements. These various marketing agreements can be event, speedway or period specific, or pertain to multiple events, speedways or years. Marketing agreements that are
not
event specific typically contain stated fiscal year periods. We receive payments based on contracted terms. Our marketing agreements sometimes include multiple specified elements such as sponsorships, tickets, hospitality, suites or on-site advertising in varying combinations for
one
or more events or contract periods, although there is typically a predominant element. Contracted revenues are allocated between admissions and event related revenue financial statement categories based on relative fair or stand-alone selling price of the respective multiple elements as such events or activities are conducted each year in accordance with underlying agreement terms.
 
We derive other event related revenue from various marketing agreements for on-site advertising, hospitality and other promotion related activities. We derive revenue based commissioned payments from a long-term contracted
third
 party for food and beverage sales during motorsports and non-motorsports events, speedway catered “hospitality” receptions and private parties. We also derive revenue from luxury suite rentals, parking and other event and speedway related activities. Our speedways and related facilities are frequently leased to others for use in driving schools, testing, research and development of race cars and racing products, concerts, settings for commercials and motion pictures, and other outdoor events. We derive event related revenue from the sale of commercial time and other radio broadcast programming on PRN, and from ancillary broadcasting rights other than NASCAR broadcasting revenue.
 
Souvenir and Other Merchandise
– We derive event related revenue from sales of owned motorsports related souvenir merchandise and commissioned souvenir merchandise sales during racing and non-racing events and in our speedway gift shops throughout the year. Souvenir merchandise is sold in concession areas to individual, group, corporate and other customers. Fees and sales based commissions are paid to us by
third
-party vendors to allow on-site selling of merchandise and promotional items during our events and activities. We also derive other operating revenue from our Legend Cars and from Oil-Chem operations, and sales of souvenir merchandising, including screen-printing, embroidery, services and products to
third
parties that typically are
not
event specific.
 
Other
– We derive other operating revenue from dining and entertainment facilities at The Speedway Clubs at CMS and TMS. We also derive other operating revenue from leasing of SR’s industrial park to individuals, corporate and other customers, including race teams and driving schools, from leasing of office towers located at several of our speedways, TMS natural gas mineral rights, and from sanctioning US Legend Cars circuit races.
 
Accounting Recognition for Event Related Revenues and Associated Net Deferred Event Income
– We recognize admissions, NASCAR broadcasting and event related revenues when an event is held. Deferred race event income, and associated direct event expenses, pertain to scheduled events to be held in upcoming periods, are recognized when an event is held, and are reflected net as current liabilities in deferred race event and other income. We recognize contracted sponsorship and other marketing arrangement fee revenues, and associated expenses, as events or activities are conducted each year in accordance with the respective agreement terms. Event souvenir merchandise sales and commission based net revenues from food and beverage sales are recognized at time of sale. Advance revenues and associated direct expenses pertaining to specific events are deferred until the event is held. Deferred expenses often include NASCAR Event Management Fees, race purses and sanction fees for other racing events, sales commissions, event specific advertising, signage and other marketing costs, sales and admission taxes, and credit card processing fees on advance revenues associated with our upcoming events.
 
If circumstances prevent a race from being held during the racing season: (i) generally advance revenue is refundable, (ii) all deferred direct event expenses would be immediately recognized except for race event management fees which would be refundable from NASCAR or other sanctioning bodies, and (iii) sales and admission taxes would be refundable from taxing authorities. Management believes this accounting policy results in appropriate matching of revenues and expenses associated with our racing events and helps ensure comparability and consistency between our financial statements. Advance revenues, and associated direct expenses, if any, for track rentals, driving schools and similar activities are deferred and recognized when the activities take place.
 
Accounting Recognition for Non-Event Souvenir Merchandise and Other Revenues
– We recognize revenue (including associated shipping and handling which is insignificant) when products are shipped, title transfers to customers, right of return or cancellation provisions expire, sales prices are final and collection is probable. Product sold on consignment with right of return or cancellation provisions has
not
been significant.
 
Accounting Recognition for Noncurrent Net Deferred Income
– We recognize revenue associated with Preferred Seat License (PSL) agreements whereby licensees are entitled to purchase annual season ticket packages for sanctioned racing events under specified terms and conditions. Among other items, licensees are required to purchase all season ticket packages as offered each year. License agreements automatically terminate without refund should licensees
not
purchase any offered ticket and are transferable once each year subject to certain terms and conditions. Licensees are
not
entitled to refunds for postponement or cancellation of events due to weather or certain other conditions. Net PSL fees are deferred when received and amortized into income over the estimated useful life of those facilities or recognized upon license agreement termination.
 
Performance Obligations
– A performance obligation is defined as a contracted promise to transfer a distinct good or service to the customer. Our performance obligations and associated accounting recognition are described above. Significantly, we are obligated to conduct events in the manner stipulated under terms and conditions of our sanctioning agreements. We typically require payment of event specific related contracts before associated events are held. Management believes we recognize revenues, and associated costs, when or as distinct and multiple performance obligations are satisfied. For non-event merchandise sales, we transfer control and recognize revenue when products are shipped and customers have accepted and obtained control of the goods. At that time, our obligations under customer contract terms have been satisfied and transfer of control of associated goods and services has occurred. Our contracts typically do
not
contain financing components, or variable consideration except for net commission based revenues for food and beverage sales described above. Our contracts are typically
not
modified, and returns, refunds and warranty costs for goods or services are
not
significant. Management believes there are
no
partially satisfied obligations based on the nature of our operations and contract terms.
 
We have contracted future revenues representing unsatisfied performance obligations, and the estimated revenue expected to be recognized in the future related to these performance obligations. These contracts contain initial terms typically ranging from
one
to
five
years, with some for
ten
-year periods, excluding renewal options. We have elected to use the following practical expedients under ASC
606
for disclosures related to unsatisfied performance obligations: (i) associated future costs to obtain or fulfill unrecorded performance obligations were
not
estimated, (ii) unsatisfied performance obligations expected to be satisfied within the next
twelve
months were excluded, and (iii) time bands, reflecting management’s best estimate of when we will transfer control to customers, are based on calendar years to comport with our seasonal business. We also excluded unsatisfied performance obligations for future NASCAR broadcasting revenue terms through
2024.
We anticipate recognizing unsatisfied performance obligations for the calendar year ending
2019
and beyond of approximately
$150,150,000
at
September 30, 2018. 
 
Contract Balances
– Our contract assets are comprised of accounts receivable and deferred event expenses (described above), and our contract liabilities are comprised of deferred event income and noncurrent deferred income (both described above). Costs to obtain and fulfill contracts (performance obligations) are comprised principally of such deferred event expenses. Significantly, such costs include NASCAR Event Management Fees which must be incurred enabling us to hold associated racing events and receive NASCAR broadcasting revenues. Our policy for expense recognition of contract assets associated with deferred event expenses is further described above. 
 
Changes in contract assets and liabilities during the
nine
months ended
September 30, 2018
result principally from recognition upon holding associated motorsport and non-motorsports events during the period. At
September 30, 2018
and
December 31, 2017,
contract assets aggregated
$5,686,000
and
$7,511,000,
and contract liabilities aggregated
$32,415,000
and
$51,344,000.
For the
nine
months ended
September 30, 2018,
we recognized revenue associated with contract liabilities amounting to
$42,413,000.
Our contract liabilities consist of current and noncurrent deferred revenue of
$29,914,000
and
$2,501,000
at
September 30, 2018,
and we anticipate recognizing current amounts in the upcoming
twelve
-month period and noncurrent amounts thereafter.
 
Taxes Collected from Customers
– We have elected to report sales, admission and other taxes collected from customers based on our applicable jurisdiction tax reporting requirements. As such, taxes are reported on both a gross and net basis in our operations, and those reported on a gross basis amounted to
$1,579,000
and
$1,386,000
in the
three
months ended
September 30, 2018
and
2017,
and
$3,967,000
and
$4,115,000
in the
nine
months ended
September 30, 2018
and
2017.
v3.10.0.1
Note 3 - Inventories
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Inventory Disclosure [Text Block]
3.
INVENTORIES
 
Inventories, net consist of the following components (in thousands):
 
   
September 30,
   
December 31,
 
   
2018
   
2017
 
Finished race cars, parts and accessories
  $
6,174
    $
4,507
 
Souvenirs and apparel
   
1,982
     
2,014
 
Micro-lubricant
®
and other
   
533
     
762
 
Total
  $
8,689
    $
7,283
 
v3.10.0.1
Note 4 - Goodwill and Other Intangible Assets
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Goodwill and Intangible Assets Disclosure [Text Block]
4.
GOODWILL AND OTHER INTANGIBLE ASSETS
 
Annual Impairment Assessment –
We evaluate goodwill and other intangible assets for possible impairment annually in the
second
quarter, or when events or circumstances indicate possible impairment
may
have occurred. Other intangible assets are comprised of nonamortizable race event sanctioning and renewal agreements. See Notes
2
and
5
to the Consolidated Financial Statements in our
2017
Annual Report for additional information on our goodwill and other intangible assets, and the methods, assumptions and business factors used in our annual impairment assessment.
 
Management's latest annual assessment in the
second
quarter
2018
was based predominately on management's best estimate of future discounted operating cash flows and profitability attributable to such assets for all individual reporting units. The impairment evaluation considered NASCAR’s approved realignment of
one
annual Monster Energy Cup Series and
one
annual Camping World Truck Series racing event from NHMS, and an annual Xfinity Series racing event from KyS, to LVMS beginning in
September 2018,
and anticipated associated net increases in future long-term cash flows and operating profits. Management also considered that the estimated market value for comparable NASCAR race event sanction and renewal agreements (we had agreements with NASCAR to annually conduct
thirteen
Monster Energy Cup,
eleven
Xfinity and
eight
Camping World Truck Series races as of the evaluation date), combined with the estimated fair value for all other Company net assets, substantially exceeds its current market capitalization. Among other factors, the latest assessment assumes projected cash flow and profitability using minimal or modest annual growth rates for projected revenue streams and operating costs (other than NASCAR broadcasting revenues and event management fees), and strategic amounts of planned capital expenditures. The assessment also reflects anticipated lower cash federal income taxes under the Tax Cuts and Jobs Act. Management projected annual increases in contracted NASCAR broadcasting rights revenues, and associated NASCAR event management fees, based on historical and anticipated rates which are supported by recently negotiated multi-year contracts. NASCAR event management fees for years after
2020
have
not
been negotiated, and future annual fees could differ substantially from those assumed in management’s impairment assessment. Management also considered control premiums and other market information related to our common stock from historical and forward-looking perspectives. Management believes the methods used to determine fair value and evaluate impairment were appropriate, relevant, and represent methods customarily available and used for such purposes and are the best available estimate of fair value.
 
Management's assessment found the estimated fair value of each reporting unit and each indefinite-lived race date intangible asset substantially exceeded its associated carrying value except for
three
race date agreements. We recorded sizable impairment charges in
2015
and earlier years to reduce the carrying values for
two
of those race date agreements to estimated fair values. As such, their adjusted carrying values approximated estimated fair values as of evaluation dates, and which are reflected in our current evaluation. As of
September 30, 2018
and
December 31, 2017,
the aggregate carrying value for those non-amortizable race date event sanctioning and renewal agreements was approximately
$298.4
million. The estimated excess of fair value of these identified intangible assets is relatively nominal at this time, heightening sensitivity to management’s assumptions used in estimating future discounted cash flows and profitability and associated risk of failing impairment testing. The evaluation reflects, similar to challenges faced by many major sports, reduced visibility on profit recovery due to factors such as changing demographics, evolving entertainment choices for fans, appealing “at-home viewing” experiences and retirement of popular long-standing “megastars”. We have lowered our expectations for forecasted growth rates for certain revenues and profit recovery. However, those expectations and forecasts are based on many factors out of our control, and could be found unachievable. Such ultimate outcome could adversely impact our estimates of fair values, particularly for those
three
race date intangible assets.
 
There have been
no
triggering events that indicate possible impairment, and management believes our operational and cash flow forecasts support our conclusions that
no
unrecognized impairment exists as of
September 30, 2018.
Our future profitability or success associated with any current or future NASCAR race realignments could significantly differ from management expectations and estimates, and are subject to numerous factors, conditions and assumptions, many of which are beyond our control. Different economic or industry conditions or assumptions, and changes in projected cash flows or profitability, if significantly negative or unfavorable, could have a material adverse effect on the impairment evaluation and our future financial condition or results of operations. The evaluations are subjective and based on conditions, trends and assumptions existing at the time of evaluation.
 
2017
Impairment of Goodwill
– Our
2017
annual assessment indicated that the carrying value of goodwill associated with SMIP, which conducts event and non-event souvenir merchandising, exceeded its estimated fair value because of potentially unfavorable merchandising business model developments. As such, a non-cash impairment charge of
$1,117,000,
before income tax benefits of
$419,000,
was reflected in the
second
quarter
2017
to reduce associated goodwill to
$0.
The
2017
impairment charge pertains to our “motorsports event related” reporting segment (see Note
10
).
 
 
Other Information
– There were
no
changes in the gross carrying value of other intangible assets or goodwill during the
nine
months ended
September 30, 2018.
Those carrying amounts include accumulated impairments of
$100.0
million for other intangible assets and
$149.7
million for goodwill at both
September 30, 2018
and
December 31, 2017.
There is
no
accumulated amortization for either asset class.
v3.10.0.1
Note 5 - Long-term Debt
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Long-term Debt [Text Block]
5.
LONG-TERM DEBT
 
Bank Credit Facility
Our Credit Facility, among other things: (i) provides for a
five
-year
$100,000,000
senior secured revolving credit facility, with separate sub-limits of
$50,000,000
for standby letters of credit and
$10,000,000
for swing line loans; (ii) provides for a
five
-year
$150,000,000
senior secured term loan (which was fully drawn) and a
five
-year delayed draw term loan of up to
$50,000,000
(which was fully drawn and repaid in
2015
) (the Term Loan); (iii) matures in
December 2019; (
iv) contains an accordion feature allowing the Company to increase revolving commitments or establish a term loan up to an aggregate additional
$100,000,000
or
$200,000,000,
respectively (or a combined aggregate additional amount of up to
$250,000,000
) with certain lender commitment conditions; (v) allows for annual aggregate payments of dividends and repurchases of SMI securities of up to
$50,000,000,
increasing up to
$75,000,000
subject to maintaining certain financial covenants; and (vi) limits annual capital expenditures to
$75,000,000
and provides for motor speedway acquisitions and related businesses. Term Loans require equal minimum quarterly principal payments of at least
5%
of initial amounts drawn on an annualized basis.
 
Interest is based, at the Company’s option, upon the Eurodollar Rate plus
1.25%
to
2.00%
or a base rate defined as the higher of Bank of America’s prime rate, the Federal Funds Rate plus
0.5%
or the Eurodollar Rate plus
1%,
plus
0.25%
to
1.00%.
The Credit Facility also contains a commitment fee ranging from
0.25%
to
0.40%
of unused amounts available for borrowing. The interest rate margins on borrowings and the commitment fee are adjustable periodically based upon certain consolidated total leverage ratios. The Credit Facility contains a number of affirmative and negative financial covenants, including requirements that we maintain certain consolidated total leverage ratios and consolidated interest coverage ratios.
 
We repaid Term Loan borrowings of
$4,000,000
and
$27,000,000
during the
three
and
nine
months ended
September 30, 2018,
and
$5,000,000
and
$31,000,000
during the
three
and
nine
months ended
September 30, 2017,
and there were
no
new borrowings under the Credit Facility. At
September 30, 2018
and
December 31, 2017,
outstanding borrowings under the Credit Facility were
$3,000,000
and
$30,000,000
(all Term Loan borrowings), and outstanding letters of credit amounted to
$6
62
,000
and
$698,000
. As of
September 30, 2018,
we had availability for borrowing up to an additional
$99,3
38
,000,
including up to an additional
$49,3
38
,000
in letters of credit, under the revolving Credit Facility, and
$50,000,000
under the delayed draw term loan provision.
 
2023
Senior Notes
– We completed a private placement of
5.125%
Senior Notes due
2023
in aggregate principal amount of
$200.0
million in
January 2015 (
the
2023
Senior Notes), and an exchange offer for substantially identical
2023
Senior Notes registered under the Securities Act in the
second
quarter
2015.
The
2023
Senior Notes were issued at par, and net proceeds were used to redeem a portion of our former
2019
Senior Notes as further described in Note
6
to the Consolidated Financial Statements in our
2017
Annual Report. The
2023
Senior Notes mature in
February 2023
and interest payments are due semi-annually on
February 
1
and
August 
1.
 
Other Notes Payable
– At
September 30, 2018
and
December 31, 2017,
long-term debt includes a
3%
interest bearing debt obligation of
$887,000
and
$1,049,000
associated with the purchase of real property at BMS, payable in
eight
annual installments of
$194,000
beginning
January 2016.
 
Deferred Financing Costs
– Deferred financing costs associated with our revolving Credit Facility are reported in other noncurrent assets, and those associated with our
2023
Senior Notes and bank Term Loan are reflected as a reduction of long-term debt. As of
September 30, 2018
and
December 31, 2017,
long-term debt reflects deferred financing costs, net of accumulated amortization, of
$3,023,000
and
$3,935,000.
 
 
Other General Terms and Conditions
– The Credit Facility and
2023
Senior Notes contain specific requirements and restrictive financial covenants and limits or prohibits various financial and transactional activities, and also contain cross-default and change of control provisions. We were in compliance with all applicable covenants under these debt agreements as of
September 30, 2018.
See Note
6
to the Consolidated Financial Statements included in our
2017
Annual Report for additional information on these debt agreements, including dividend, redemption, and right of payment provisions, pledged security and financial and restrictive covenants.
 
Subsidiary Guarantees
Amounts outstanding under our Credit Facility and
2023
Senior Notes are guaranteed by all of SMI’s material operative subsidiaries except for Oil-Chem and its subsidiaries (which are presently minor). These guarantees are full and unconditional, and joint and several with the
2023
Senior Notes on a senior unsecured basis. The parent company has
no
significant independent assets or operations. There are
no
restrictions on our subsidiaries’ ability to pay dividends or advance funds to the parent company.
 
Interest Expense, Net
Interest expense, interest income and capitalized interest costs are summarized as follows (in thousands):
 
   
Three Months Ended
September 30:
   
Nine Months Ended
September 30:
 
   
2018
   
2017
   
2018
   
2017
 
Gross interest costs
  $
3,021
    $
3,217
    $
9,383
    $
9,861
 
Less: capitalized interest costs
   
(100
)
   
(65
)
   
(348
)
   
(218
)
Interest expense
   
2,921
     
3,152
     
9,035
     
9,643
 
Interest income
   
(150
)
   
(98
)
   
(354
)
   
(421
)
Interest expense, net
  $
2,771
    $
3,054
    $
8,681
    $
9,222
 
Weighted-average interest rate on Credit Facility borrowings
   
3.3
%
   
2.5
%
   
3.0
%
   
2.3
%
v3.10.0.1
Note 6 - Per Share and Other Equity Information
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Stockholders Equity and Earnings Per Share [Text Block]
6.
PER SHARE AND OTHER EQUITY INFORMATION 
 
The following schedule reconciles basic and diluted earnings per share (where computations are anti-dilutive, reported basic and diluted per share amounts are the same) (in thousands except per share amounts):
 
   
Three Months Ended
September 30:
   
Nine Months Ended
September 30:
 
   
2018
   
2017
   
2018
   
2017
 
Net income applicable to common stockholders and assumed conversions
  $
24,073
    $
9,211
    $
53,242
    $
34,582
 
                                 
Weighted average common shares outstanding
   
40,882
     
41,004
     
40,936
     
41,046
 
Dilution effect of assumed conversions:
                               
Common stock equivalents—stock awards
   
13
     
18
     
15
     
16
 
Weighted average common shares outstanding and assumed conversions
   
40,895
     
41,022
     
40,951
     
41,062
 
                                 
Basic earnings per share
  $
0.59
    $
0.22
    $
1.30
    $
0.84
 
Diluted earnings per share
  $
0.59
    $
0.22
    $
1.30
    $
0.84
 
Anti-dilutive common stock equivalents excluded in computing diluted earnings per share
   
12
     
9
     
12
     
10
 
 
Stock Repurchase Program
– Our Board of Directors has approved a stock repurchase program authorizing SMI to repurchase up to an aggregate of
6,000,000
shares (increased from
5,000,000
shares with Board of Director approval on
February 12, 2018)
of our outstanding common stock from time to time, depending on market conditions, share price, applicable limitations under our debt agreements, and other factors the Board of Directors or its designees, in their sole discretion,
may
consider relevant. The purchases can be in the open market or private transactions. The stock repurchase program is presently funded using available cash and cash equivalents and
may
be suspended or discontinued at any time.
 
During the
three
and
nine
months ended
September 30, 2018,
we repurchased
63,000
and
185,000
shares of common stock for
$1,114,000
and
$3,371,000.
As of
September 30, 2018,
we could repurchase up to an additional
1,006,000
shares under the current authorization. During the
nine
months ended
September 30, 2018,
we repurchased approximately
28,000
shares of common stock for
$540,000
from management employees to settle income taxes on
62,000
restricted shares that vested during the period. As of and through
September 30, 2018,
treasury stock includes
356,000
shares of common stock delivered to the Company for such purposes.
 
Declaration of Cash Dividends –
To date in
2018,
our Board of Directors has approved the following quarterly cash dividends on common stock, which are being paid using available cash and cash equivalents on hand (in thousands except per share amounts):
 
Declaration date
 
February 12, 2018
   
April 23, 2018
   
July 25, 2018
   
October 22, 2018
 
Record date
 
March 1, 2018
   
May 15, 2018
   
August 15, 2018
   
November 12, 2018
 
Paid or payable to shareholders
 
March 15, 2018
   
June 5, 2018
   
September 5, 2018
   
December 3, 2018
 
Aggregate quarterly cash dividend
  $
6,224
    $
6,142
    $
6,133
   
Approximately $6,150
 
Dividend per common share
  $
0.15
    $
0.15
    $
0.15
    $
0.15
 
v3.10.0.1
Note 7 - Related Party Transactions
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Related Party Transactions Disclosure [Text Block]
7.
RELATED PARTY TRANSACTIONS
 
The Company and Sonic Financial Corporation (Sonic Financial), a Company affiliate through common ownership by our Executive Chairman and our Chief Executive Officer, and by a member of our Board of Directors, share various expenses in the ordinary course of business under a shared services agreement. The Company incurred expenses of
$301,000
and
$280,000
in the
three
months ended
September 30, 2018
and
2017,
and
$1,036,000
and
$686,000
in the
nine
months ended
September 30, 2018
and
2017
under the shared services agreement.
No
amounts were due from or payable to Sonic Financial at
September 30, 2018
and
December 31, 2017.
 
The Company and certain SMI subsidiaries lease office and warehouse facilities from companies affiliated through common ownership by our Executive Chairman and Chief Executive Officer, and by a member of our Board of Directors, under annually renewable lease agreements. Rent expense amounted to
$182,000
in both the
three
months ended
September 30, 2018
and
2017,
and
$544,000
in both the
nine
months ended
September 30, 2018
and
2017.
Amounts owed to these affiliated companies at
September 30, 2018
or
December 
31,
2017
were
not
significant.
 
Various SMI subsidiaries purchased new and used vehicles for operations and employee use from certain subsidiary dealerships of Sonic Automotive, Inc. (SAI), an entity in which our Executive Chairman is a controlling stockholder, for an aggregate of
$8,000
and
$28,000
in the
three
months ended
September 30, 2018
and
2017,
and
$189,000
and
$172,000
in the
nine
months ended
September 30, 2018
and
2017.
There were
no
vehicles sold to SAI in the
three
or
nine
months ended
September 30, 2018
and
2017.
Also, SMI sold through certain speedways and its SMIP merchandising subsidiary various event related inventory and merchandise to SAI totaling
$210,000
and
$203,000
in the
three
months ended
September 30, 2018
and
2017,
and
$662,000
and
$679,000
in the
nine
months ended
September 30, 2018
and
2017.
At
September 30, 2018
and
December 
31,
2017,
approximately
$159,000
and
$70,000
was due from SAI and is reflected in current assets.
 
Oil-Chem sold zMAX micro-lubricant
®
product to certain SAI dealerships for resale to service customers of the dealerships in the ordinary course of business. Total purchases from Oil-Chem by SAI dealerships were
$432,000
and
$449,000
in the
three
months ended
September 30, 2018
and
2017,
and
$1,262,000
and
$1,507,000
in the
nine
months ended
September 30, 2018
and
2017.
At
September 30, 2018
and
December 
31,
2017,
approximately
$191,000
and
$148,000
was due from SAI and is reflected in current assets.
 
The foregoing related party balances as of
September 30, 2018
and
December 31, 2017,
and transactions for the
three
and
nine
months ended
September 30, 2018
and
2017,
are summarized below (in thousands):
 
   
September 30,
2018
   
December 31,
2017
 
Accounts receivable
  $
350
    $
218
 
 
   
Three Months Ended
September 30:
   
Nine Months Ended
September 30:
 
   
2018
   
2017
   
2018
   
2017
 
Merchandise and vehicle purchases
  $
8
    $
28
    $
189
    $
172
 
Shared services expense
   
301
     
280
     
1,036
     
686
 
Merchandise sales
   
642
     
652
     
1,924
     
2,186
 
Rent expense
   
182
     
182
     
544
     
544
 
v3.10.0.1
Note 8 - Legal Proceedings and Contingencies
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]
8.
LEGAL PROCEEDINGS AND CONTINGENCIES
 
From time to time, we are party to routine litigation incidental to our business. We believe that the resolution of any or all of such litigation will
not
have a material effect on our financial condition, results of operations or cash flows.
v3.10.0.1
Note 9 - Stock Compensation Plans
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
9.
STOCK COMPENSATION PLANS
 
 
 
See Note
11
to the Consolidated Financial Statements in our
2017
Annual Report for additional information and terms of the Company’s stock compensation plans.
 
2013
Stock Incentive Plan, Amended and Restated as of
April 19, 2017
– The Compensation Committee of the Company’s Board of Directors approved grants of
35,000
restricted stock units to the Company’s Chief Executive Officer and President and
35,000
shares of restricted stock to the Company’s Vice Chairman and Chief Financial Officer in each of the
nine
months ended
September 30, 2018
and
2017.
These grants are to be settled in shares of common stock, vest in equal installments over
three
years and are subject to reaching certain defined full year earnings targets established at the beginning of each year by the Compensation Committee. Forfeitures in any given year result from differences between the Company’s actual results for the previous year as compared to the defined full year earnings target.
 
The following is a summary of restricted stock and restricted stock units granted, vested and forfeited under the
2013
Stock Incentive Plan for the indicated periods (shares in thousands):
 
   
Nine Months Ended September 30:
 
   
2018
   
2017
 
                                 
   
Restricted
Stock
   
Restricted
Stock
Units
   
Restricted
Stock
   
Restricted
Stock
Units
 
Outstanding, beginning of period
   
66
     
127
     
68
     
129
 
Granted
   
35
     
35
     
35
     
35
 
Vested
   
(31
)
   
(31
)
   
(32
)
   
(32
)
Forfeited
   
(5
)
   
(5
)
   
(5
)
   
(5
)
Outstanding, end of period
   
65
     
126
     
66
     
127
 
 
 
During the
nine
months ended
September 30, 2018
and
2017,
the Company repurchased
28,000
and
31,000
shares of common stock for
$540,000
and
$597,000
from executive management employees to settle income taxes on
62,000
and
64,000
shares that vested in each respective period.
 
2008
Formula Restricted Stock Plan, Amended and Restated as of
April 17, 2012
– The
2008
Formula Restricted Stock Plan (the
2008
Formula Plan) expired by its terms in
February 2018 (
see the
2018
Formula Restricted Stock Plan below). The
2008
Formula Plan constituted a “formula plan” within the meaning of SEC Rule
16b
-
3
of the Exchange Act and was administered by the Board of Directors, excluding non-employee directors. An aggregate of
15,572
shares granted under this plan in
April 2017
vested in
April 2018,
and
15,976
shares granted in
April 2016
vested in
April 2017.
No
further shares can be granted under this plan.
 
2018
Formula Restricted Stock Plan
– In
March 2018,
our Board of Directors adopted the
2018
Formula Restricted Stock Plan (the
2018
Formula Plan) which was approved by our stockholders at the
2018
Annual Meeting. The
2018
Formula Plan is intended to promote the interests of the Company and its stockholders by providing non-employee directors with Company ownership interests to more closely align their interests with our stockholders and enhance our ability to attract and retain highly qualified non-employee directors. The
2018
Formula Plan constitutes a “formula plan” within the meaning of SEC Rule
16b
-
3
of the Exchange Act. Approval of the
2018
Formula Plan, and expiration of the
2008
Formula Plan, did
not
adversely affect the rights of any outstanding awards previously granted under the
2008
Formula Plan. The
2018
Formula Plan is administered by the Board of Directors, excluding non-employee directors, who can amend, suspend or terminate the plan in whole or in part, provided that
no
such amendment, suspension or termination adversely affects previously granted awards without the consent of the award recipient. Any such amendment, suspension or termination
may
be subject to stockholder approval.
 
Under the
2018
Formula Plan,
250,000
shares of SMI’s common stock are reserved for issuance and awards will be in the form of restricted stock. On the
first
business day following each annual meeting, each standing non-employee director will receive a grant of restricted stock consisting of the number of shares equaling
$75,000
divided by the average closing sale price for the
twenty
days immediately preceding the grant date. These grants of restricted stock fully vest on the earlier of (i) the
first
grant date anniversary or (ii) the day before our next annual meeting following the grant date. Non-employees appointed as a member of the Board of Directors after the annual meeting will receive a restricted stock grant effective as of the date of appointment. The number of shares granted are calculated in the same manner as previously described and fully vest on the
first
anniversary of the grant date. Vesting is subject to continued service as a director through scheduled vesting dates. These terms and conditions are similar to those of the expired
2008
Formula Plan. The Company awarded
4,226
shares of restricted stock to each of the Company’s
four
non-employee directors in
April 2018,
and
4,459
shares of restricted stock to a non-employee director appointed to the Board of Directors in
October 2018,
under this plan.
Share-Based Payments
– There were
no
significant changes in the characteristics of restricted stock or restricted stock units granted in
2018
or
2017
as compared to prior grants and
no
modifications of the terms of any share-based payment arrangements. There were
no
significant changes in estimates, assumptions or valuation methods used to estimate the fair value of share-based payment awards.
No
stock options were granted under any of the Company’s stock compensation plans during the
nine
months ended
September 30, 2018
or
2017.
No
stock options were exercised in the
nine
months ended
September 30, 2018.
A total of
30,500
stock options previously granted under the
2004
Plan were exercised in the
nine
months ended
September 30, 2017
at an exercise price of
$15.83.
Share-based compensation cost for the
three
months ended
September 30, 2018
and
2017
totaled
$881,000
and
$868,000,
before income taxes of
$222,000
and
$322,000,
and for the
nine
months ended
September 30, 2018
and
2017
totaled
$2,593,000
and
$2,533,000,
before income taxes of
$6
0
2,000
and
$887,000,
respectively, and is included in general and administrative expense. There were
no
capitalized share-based compensation costs at
September 30, 2018
or
December 31, 2017.
As of
September 30, 2018,
there was approximately
$2,920,000
of total unrecognized compensation cost related to non-vested restricted stock and restricted stock units granted under the Company's stock compensation plans that is expected to be recognized over a weighted average period of
0.8
year. As of
September 30, 2018,
all stock options were vested and there was
no
unrecognized compensation cost related to stock options granted under any of the Company’s stock compensation plans.
v3.10.0.1
Note 10 - Segment Disclosures
9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
10.
SEGMENT DISCLOSURES
 
Our operations are predominately comprised of promoting, marketing and sponsoring motorsports racing events, merchandising and other related activities conducted at our various major speedway facilities located in the United States. Our business activities, including those of our subsidiaries, are further described in Note
1
to this Quarterly Report on Form
10
-Q and in Notes 
1
and
2
to the Consolidated Financial Statements in our
2017
Annual Report. All Company assets are located in the United States, and our speedway names denote their respective geographical areas. Our “motorsports event related” segment consists of revenues and expenses associated with all admissions, event related, NASCAR broadcasting and event motorsports merchandising activities. The segment includes motorsports related events and operations for all Company speedways, NASCAR broadcasting and ancillary media rights, PRN and RCU motorsports radio programming, and SMI Properties and SMI Trackside motorsports merchandising at Company and non-Company speedways. These operating segments have been aggregated into the motorsports related reportable segment as each share similar types and classes of customers, similar methods for providing or distributing motorsports related services, souvenirs and other merchandise, and other similar economic characteristics. Our “all other” operations consist of SMIP subsidiary non-event motorsports and non-motorsports merchandising, Legend Cars non-event merchandising and sanctioning body activities, Oil-Chem micro-lubricant activities, TMS natural gas mineral rights lease and related revenues, and office rentals at certain Company speedways.
 
Segment information as presented below comports with information our chief operating decision maker and management use and focus on when assessing segment performance and allocating resources. Segment operating income or loss excludes interest, income taxes, other income or expense and specified non-recurring items, if any, and corporate general and administrative and depreciation costs are allocated to operating segments based on their respective revenues relative to consolidated revenues. The following tables present our segment information (in thousands):
 
   
Three Months Ended September 30:
 
   
2018
   
2017
 
   
Motorsports
Event
Related
   
 
All
Other
   
 
Consolidated
   
Motorsports
Event
Related
   
All
Other
   
 
Consolidated
 
Revenues
  $
156,203
    $
3,882
    $
160,085
    $
126,156
    $
4,567
    $
130,723
 
Depreciation and amortization
   
13,217
     
35
     
13,252
     
13,799
     
35
     
13,834
 
Segment operating income
   
34,496
     
497
     
34,993
     
16,609
     
939
     
17,548
 
 
   
Nine Months Ended September 30:
 
   
2018
   
2017
 
   
Motorsports
Event
Related
   
 
All
Other
   
 
Consolidated
   
Motorsports
Event
Related
   
All
Other
   
 
Consolidated
 
Revenues
  $
387,807
    $
12,490
    $
400,297
    $
362,275
    $
14,903
    $
377,178
 
Depreciation and amortization (Note 2)
   
39,374
     
106
     
39,480
     
44,700
     
108
     
44,808
 
Impairment of goodwill (Note 4)
   
     
     
     
1,117
     
     
1,117
 
Segment operating income
   
73,921
     
1,875
     
75,796
     
59,037
     
3,399
     
62,436
 
Capital expenditures
   
24,628
     
397
     
25,025
     
21,931
     
29
     
21,960
 
 
   
September 30, 2018
   
December 31, 2017
 
Other intangibles
  $
298,383
     
    $
298,383
    $
298,383
     
    $
298,383
 
Goodwill
   
46,225
     
     
46,225
     
46,225
     
     
46,225
 
Total assets
   
1,427,661
    $
25,232
     
1,452,893
     
1,427,557
    $
23,123
     
1,450,680
 
 
The following table reconciles segment operating income above to consolidated income before income taxes for the periods indicated (in thousands):
 
   
Three Months Ended
September 30:
   
Nine Months Ended
September 30:
 
   
2018
   
2017
   
2018
   
2017
 
Total segment operating income
  $
34,993
    $
17,548
    $
75,796
    $
62,436
 
Adjusted for:
                               
Interest expense, net
   
(2,771
)
   
(3,054
)
   
(8,681
)
   
(9,222
)
Other (expense) income, net
   
(60
)    
157
     
2,186
     
(45
)
Consolidated income before income taxes
  $
32,162
    $
14,651
    $
69,301
    $
53,169
 
 
v3.10.0.1
Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2018
Accounting Policies [Abstract]  
Revenue and Expense Recognition [Policy Text Block]
NASCAR Broadcasting Revenues and NASCAR Event Management (formerly purse and sanction) Fees
– Under event management agreements, NASCAR typically retains
10%
of gross broadcasting revenues as a component of their event management fees. We recognize
90%
of gross broadcasting revenues as revenue, and
25%
of gross revenues for purses awarded to race participants for each race. The remainder represents additional annually negotiated event management fees paid to NASCAR by the Company for each race. We historically presented the
10%
portion of broadcast rights fees retained by NASCAR as both broadcasting revenues and related event management fees. We have determined that such amounts should be presented net, and have revised the presentation of our previously issued financial statements. We concluded the effect on our previously reported interim financial statements was
not
material. In addition, management believes the revised presentation provides consistency with that used by other companies that promote NASCAR racing events. We revised NASCAR broadcasting revenue and NASCAR event management fees by
$6,885,000
and
$20,008,000
in the
three
and
nine
months ended
September 30, 2017 (
comparable amounts were
$8,709,000
and
$22,361,000
for the
three
and
nine
months ended
September 30, 2018).
The revision had
no
impact on our net income or loss, earnings or loss per share, balance sheet or cash flows.
Quarterly Reporting [Policy Text Block]
Quarterly Reporting
– We recognize revenues and operating expenses for all events in the calendar quarter in which conducted. Changes in race schedules at our speedways from time to time, including speedway acquisitions, can lessen the comparability of operating results between quarterly financial statements of successive years and increase or decrease the seasonal nature of our motorsports business. The more significant races affected by poor weather and other racing schedule changes for the
three
and
nine
months ended
September 30, 2018
as compared to
2017
include:
 
Poor weather or excessive heat surrounded Monster Energy NASCAR Cup race weekends at AMS and LVMS in the
first
quarter
2018,
at BMS, CMS, SR and TMS in the
second
quarter
2018,
and at BMS, LVMS and NHMS in the
third
quarter
2018
One NASCAR Monster Energy Cup and
one
annual Camping World Truck Series racing event from NHMS, and
one
Xfinity Series racing event from KyS, were realigned to LVMS in the
third
quarter
2018
(all were held in the
third
quarter
2017
)
CMS held
one
NASCAR Monster Energy and
one
Xfinity Series race in the
third
quarter
2018
that were held in the
fourth
quarter
2017
CMS held
one
major NHRA racing event in the
third
quarter
2017
that is being held in the
fourth
quarter
2018
Poor weather also surrounded certain smaller non-NASCAR events at CMS and TMS in the
second
quarter
2018
LVMS held
one
NASCAR Camping World Truck Series race in the
first
quarter
2018
that was held in the
third
quarter
2017
Statement of Cash Flows [Policy Text Block]
Consolidated Statements of Cash Flows
– Under Accounting Standards Update
No.
2016
-
15
adopted as of
January 1, 2018 (
see “Recently Issued Accounting Standards” below), we now include restricted cash balances in Cash and Cash Equivalents on our Consolidated Statements of Cash Flows for all periods presented. Restricted cash balances are insignificant and included in Other Assets on our Consolidated Balance Sheets.
Income Tax, Policy [Policy Text Block]
Income Taxes
– We provide for income taxes at the end of each interim period based on management’s best estimate of the annual estimated effective income tax rate. Cumulative adjustments to our annual estimated effective income tax rate are recorded in the interim period in which a change in the annual estimated effective income tax rate is determined. Cash paid for income taxes excludes any previous overpayments the Company
may
have elected to apply to income tax liabilities. The Company has
no
undistributed foreign earnings or cash or cash equivalents held outside of the US. See Notes
2
and
8
to the Consolidated Financial Statements in our
2017
Annual Report for additional information on our accounting for income taxes.
 
Our effective income tax rate for the
three
months ended
September 30, 2018
and
2017
was
25.2%
and
37.1%,
and for the
nine
months ended
September 30, 2018
and
2017
was
23.2%
and
35.0%,
respectively. The
2018
tax rates reflect the lower US corporate federal tax rate under the Tax Cuts and Jobs Act further described below, and a
second
quarter
2018
non-recurring tax benefit of
$1,110,000
resulting from certain state income tax law changes. Our tax rates for the
nine
months ended
September 30, 2017 
reflect reduced net deferred income tax liabilities of
$1,791,000
for anticipated lower state income tax rates associated with race date realignments, and other lower effective state income tax rates. The tax rate for the
nine
months ended
September 30, 2017
was partially offset by reduced deferred tax assets associated with certain state net operating loss carryforwards of
$515,000.
We paid cash of
$11,625,000
and
$12,855,000
for income taxes in the
nine
months ended
September 30, 2018
and
2017.
 
Accounting for Uncertainty in Income Taxes
– Income tax liabilities for unrecognized tax benefits approximate
$11,711,000
at both
September 30, 2018
and
December 31, 2017,
all of which relates to our previously discontinued operation. Of those amounts,
$11,534,000
is included in noncurrent other liabilities, all of which would favorably impact our effective tax rate if recognized, and
$177,000
is included in deferred tax liabilities at both
September 30, 2018
and
December 31, 2017.
As of
September 30, 2018
and
December 31, 2017,
management believes $
823,000
of unrecognized tax benefits will be recognized within the next
twelve
months. Interest and penalties associated with unrecognized tax benefits were insignificant for the
three
and
nine
months ended
September 30, 2018
and
2017.
As of
September 30, 2018
and
December 31, 2017,
we had
$660,000
and
$241,000
accrued for the payment of interest and penalties on uncertain tax positions, which is included in other noncurrent liabilities. The tax years that remain open to examination include
2015
through
2017
by the Internal Revenue Service, and
2013
 through
2017
by other state taxing jurisdictions to which we are subject. 
 
December 2017
Tax Cuts and Jobs Act Enactment
On
December 22, 2017,
the Tax Cuts and Jobs Act (the Tax Act) was enacted and substantially amended the Internal Revenue Code. Effective
January 1, 2018,
the Act reduces US corporate federal tax rates from
35%
to
21%,
provides for
100%
expensing of certain qualified capital investments through
2022,
repeals the corporate Alternative Minimum Tax, eliminates loss carrybacks, limits using future losses, and further limits the deductibility of certain executive compensation, among other provisions. Current accounting guidance provides for a provisional
one
-year measurement period for entities to finalize their accounting for certain income tax effects of the Tax Act.
 
As of
December 31, 2017,
we recognized provisional tax expense related to non-deductible executive compensation as we anticipated that performance-based compensation would
no
longer be tax deductible. During the
three
and
nine
months ended
September 30, 2018,
we recognized
$56,000
of tax benefit related to changes made to the provisional amounts, primarily related to the revaluation of deferred tax assets and liabilities. We expect to continue to refine the calculations as additional analysis is completed and as the Internal Revenue Service issues additional guidance. We plan to finalize the accounting for those provisional amounts in the
fourth
quarter
2018
upon filing our corporate income tax returns. Final amounts
may
differ from provisional amounts after further analysis, changes in interpretation and assumptions, or additional regulatory guidance that
may
be issued, among other things.
 
Income Tax Benefits
– Applicable accounting guidance
may
require establishing valuation allowances for certain deferred tax assets or income tax liabilities for unrecognized tax benefits, notwithstanding management believes associated tax filing positions are sustainable and are or will be reflected in its tax filings. At
September 30, 2018
and
December 31, 2017,
liabilities for unrecognized tax benefits totaled
$11.7
million. Should those tax positions
not
be fully sustained if examined, an acceleration of material income taxes payable could occur. Where
no
net income tax benefit had been previously reflected because of providing a valuation allowance on related deferred tax assets, our future results of operations might
not
be significantly impacted. However, resulting cash required for payments of income taxes could be material in the period in which such determination is made.
Advertising Costs, Policy [Policy Text Block]
Advertising Expenses
– Event specific advertising costs are expensed when an associated event is held and included principally in direct expense of events. Non-event related advertising costs are expensed as incurred and included principally in other direct operating expense. Advertising expense amounted to
$4,449,000
and
$3,831,000
for the
three
months ended
September 30, 2018
and
2017,
and
$10,879,000
and
$10,854,000
for the
nine
months ended
September 30, 2018
and
2017.
There were
no
deferred direct-response advertising costs at
September 30, 2018
or
December 31, 2017.
TMS Mineral Rights Lease Receipts, Policy [Policy Text Block]
TMS Mineral Rights
Lease Receipts
– We recognized royalty revenue of
$334,000
and
$508,000
in the
three
months ended
September 30, 2018
and
2017,
and
$1,077,000
and
$1,486,000
in the
nine
months ended
September 30, 2018
and
2017
under a natural gas mineral rights lease agreement and a joint exploration agreement entitling TMS to stipulated stand-alone and shared royalties. Such revenues can vary due to associated volatility in natural gas price levels and common diminishing well production, as well as other factors outside of TMS’s control. At this time, while extraction activities continue,
no
new wells are being explored, and management is unable to determine ongoing volumes of production if any or for how long (including common diminishing well production over time), or if natural gas price levels will further decline, remain steady or adequate. The agreements stipulate that TMS distribute
25%
of production royalty revenues to the lessee, and obligate TMS to spend amounts equal to royalties received on TMS facility and road infrastructure improvements beginning in
2017,
up to specified cumulative amounts. At this time, management believes
2018
revenues will
not
differ significantly from
2017,
and that our infrastructure spending will continue to exceed anticipated future royalties similar to
2017.
As of
September 30, 2018
and
December 31, 2017,
there was
no
deferred income associated with these agreements.
Fair Value of Financial Instruments, Policy [Policy Text Block]
Fair Value of Financial Instruments
– We follow applicable authoritative guidance which requires that financial and non-financial assets and liabilities measured and reported on a fair value basis be classified, disclosed and categorized as further described below. Fair value estimates are based on relevant market information and single broker quoted market prices where available at a specific point in time, and changes in assumptions or market conditions could significantly affect estimates. The carrying values of cash and cash equivalents, accounts receivable, certain other assets and accounts payable approximate fair value because of the short maturity of these financial instruments. Cash surrender values are carried at fair value based on binding broker quoted market prices. Notes receivable and bank revolving credit facility and term loan borrowings are variable interest rate financial instruments and, therefore, carrying values approximate fair value. The fixed rate senior notes payable are publicly traded and estimated fair values are based on single broker quoted market prices. Other long-term debt bears interest approximating market rates; therefore, carrying values approximate market value. There have been
no
changes or transfers between category levels or classes.
 
The following table presents estimated fair values and categorization levels of our financial instruments as of
September 30, 2018
and
December 31, 2017 (
in thousands):
 
             
2018
   
2017
 
   
Level
 
Class
 
Carrying
Value
   
Fair Value
   
Carrying
Value
   
Fair Value
 
Assets
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
   
1
 
R
  $
80,501
    $
80,501
    $
81,924
    $
81,924
 
Note receivable
   
2
 
NR
   
661
     
661
     
799
     
799
 
Cash surrender values
   
2
 
NR
   
10,369
     
10,369
     
9,822
     
9,822
 
                                           
Liabilities
(principal)
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Floating rate revolving Credit Facility, including Term Loan
   
2
 
NR
   
3,000
     
3,000
     
30,000
     
30,000
 
5.125% Senior Notes due 2023
   
2
 
NR
   
200,000
     
198,000
     
200,000
     
205,000
 
Other long-term debt
   
2
 
NR
   
887
     
887
     
1,049
     
1,049
 
 
Level
1
 :
Quoted market prices in active markets for identical assets or liabilities.
Level
2:
Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level
3:
Unobservable inputs that are
not
corroborated by market data.
Class R:
Measured at fair value on recurring basis, subsequent to initial recognition.
Class NR:
Measured at fair value on nonrecurring basis, subsequent to initial recognition.
Property, Plant and Equipment, Policy [Policy Text Block]
Property and Equipment
– From time to time, we renovate various seating, suite and other areas at our speedways for modernizing our facilities, alternative marketing or development purposes such as offering unique fan zones, expanded premium hospitality and RV camping areas, or wider seating and improved sight lines. When management decides on renovation and removal, accelerated depreciation is recorded prospectively over shortened estimated remaining useful lives of the assets, and accounted for as a change in estimate, beginning when management contracts and begins removal. In the
first
quarter
2017,
we contracted and began removing certain seating at CMS, KyS and NHMS. As such, we recorded pre-tax charges for accelerated depreciation and costs of removal (included in other expense, net) aggregating
$4,597,000,
before income tax benefits of
$1,700,000,
in the
first
quarter
2017.
These charges are included in our "motorsports event related" reporting segment (see Note
10
New Accounting Pronouncements, Policy [Policy Text Block]
Recently Issued Accounting Standards
– The Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)
No.
2016
-
15
“Statement of Cash Flows (Topic
23
) - Classification of Certain Cash Receipts and Cash Payments” which provides specific guidance on
eight
cash flow classification issues. The guidance is effective for fiscal years beginning after
December 15, 2017,
and interim periods within those fiscal years, and was applied using a retrospective transition method to each period presented. Our adoption of this new guidance as of
January 1, 2018
had an immaterial impact on our financial statements.
 
The FASB issued ASU
No.
2016
-
02
“Leases (Subtopic
842
)” which replaces all current US GAAP guidance on this topic, and requires lessees to recognize assets and liabilities arising from leases as well as extensive quantitative and qualitative disclosures. The FASB issued ASU
No.
2018
-
10
“Codification Improvements to Topic
842,
Leases” which clarifies certain transitional and application guidance. Lessees will need to recognize on their balance sheets right-of-use assets and lease liabilities for the majority of their leases (other than leases meeting the definition of a short-term lease). Right-of-use assets will be measured at lease liability amounts, adjusted for lease prepayments, lease incentives received and lessee’s initial direct costs. Lease liabilities will equal the present value of lease payments. Assets will be based on the liability, subject to adjustment, such as for initial direct costs. Operating leases
may
typically result in straight-line expense, while finance leases similar to front-loaded expense pattern. Classification will be based on criteria largely similar to those applied in current lease accounting. The FASB also issued ASU
No.
2018
-
11
“Leases (Topic
842
), Targeted Improvements” which provides entities with an optional cumulative-effect adjustment transition method for adopting the new leases standard, and a practical expedient related to accounting for separate leasing and non-leasing components of a contract. Entities also have the option of applying the guidance using the modified retrospective approach for all leases existing as of the effective date, which requires application at the beginning of the earliest comparative period presented. The guidance is effective for fiscal years beginning after
December 15, 2018,
and interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the adoption alternatives and potential impact that adoption
may
have on our financial statements, including ongoing analysis of transactional data, underlying contracts and associated accounting policies, and continue to gather information for required presentation and disclosures. Also, we are implementing processes, internal controls and technology solutions to help enable timely and accurate reporting.
 
The FASB issued ASU
No.
2018–01
"Leases (Topic
842
): Land Easement Practical Expedient for Transition to Topic
842"
which provides an optional transition practical expedient to
not
evaluate existing or expired land easements that were
not
previously accounted for as leases under current lease guidance. Entities that elect this practical expedient should evaluate new or modified land easements at the date of adoption, which should be applied consistently to all existing or expired land easements
not
previously accounted for as leases. Entities that do
not
elect this practical expedient should evaluate all existing or expired land easements to assess whether they meet the definition of a lease. This Update affects entities with land easements that existed or expired before adoption, provided the entity does
not
account for those land easements as leases under current guidance. Once adopted, this Update should be applied prospectively to all new or modified land easements to determine whether any arrangements should be accounted for as a lease. Entities should continue to apply its current accounting policy for accounting for land easements that existed before adoption of this Update. This guidance is effective beginning in the same periods as Update
No.
2016
-
02
described above. We are currently evaluating the potential impact that adoption
may
have on our financial statements.
Revenue Recognition, Policy [Policy Text Block]
Revenue from Contracts with Customers
– As of
January 1, 2018,
we adopted Accounting Standards Update
No.
2014
-
09
"Revenue from Contracts with Customers (Topic
606
)” and associated amendments, using the modified retrospective method of adoption (ASC
606
). We applied, and are continuing to apply, the
five
-step model provided in this new standard. The guidance includes the core principle that entities recognize revenue to depict transfers of promised goods or services to customers in amounts that reflect the consideration entities expect to be entitled in exchange for those goods or services, and expands required financial statement disclosures regarding revenue recognition. Adoption did
not
result in an initial cumulative adjustment that impacted our retained earnings. There was
no
impact on the measurement or recognition of revenue of prior periods, and management believes adoption will
not
materially impact our future timing or classification of revenue recognition. Management believes
no
unusual or significant estimation was necessary to apply the new revenue guidance to existing customer contracts. Our main types of revenue contracts and performance obligations are further described below. Our evaluation under ASC
606
determined that certain accounts receivable should be classified as contract assets, and corresponding deferred revenues should be classified as contract liabilities. These future contracted revenues, as further described below, include various event related marketing agreements, and event tickets purchased under extended payment terms that have
not
yet been paid in full, and related performance obligations have
not
been satisfied. Under ASC
606,
contract assets and contract liabilities in a contract are reportable on a net basis.
 
Disaggregated Revenues
– Based on economic factors, including their nature, timing and certainty as further described below, we have disaggregated the composition of our revenues in the following table. The table includes our admissions, NASCAR broadcasting, and sponsorships and other event related revenues that are reported in our Motorsports Event Related segment, and souvenir and other merchandise and other revenues that are reported in that segment and our All Other segment (see Note
10
). This disaggregation corresponds with our segment reporting except as described below. Management believes there are
no
unusual or significant uncertainties or conditions regarding our revenues or cash flows, except should uncontrollable circumstances such as poor weather, adverse incidents or geopolitical events involving large gatherings of people prevent a major NASCAR race from being held during the racing season. All such races have been held within their scheduled calendar year over the years.
 
   
Three Months Ended
September 30:
   
Nine Months Ended
September 30:
 
   
2018
   
2017
   
2018
   
2017
 
Admissions
  $
30,536
    $
27,641
    $
66,811
    $
71,532
 
NASCAR broadcasting
   
78,374
     
61,962
     
201,246
     
180,065
 
Sponsorships and other event related
   
42,092
     
31,965
     
105,038
     
96,786
 
Souvenir and other merchandise
   
5,368
     
4,958
     
14,671
     
14,673
 
Other
   
3,715
     
4,197
     
12,531
     
14,122
 
Total Revenue
  $
160,085
    $
130,723
    $
400,297
    $
377,178
 
 
The following describes the composition of our disaggregated revenues and associated performance obligations:
 
Admissions
– We sell tickets to individuals, corporate customers and other groups, including contracted admissions and other access, to our motorsport and non-motorsports events.
 
NASCAR Broadcasting
– NASCAR contracts directly with certain television networks on broadcasting rights for all NASCAR-sanctioned racing events. We receive television broadcasting revenues under contractual sanction agreements for each such race. SMI has separate
five
-year Event Management Agreements (formerly purse and sanction) with NASCAR under which our speedways will conduct such racing events through
2020.
 
Sponsorships
and
Other Event Related
– Sponsorships generally consist of event and official sponsorship agreements. These various marketing agreements can be event, speedway or period specific, or pertain to multiple events, speedways or years. Marketing agreements that are
not
event specific typically contain stated fiscal year periods. We receive payments based on contracted terms. Our marketing agreements sometimes include multiple specified elements such as sponsorships, tickets, hospitality, suites or on-site advertising in varying combinations for
one
or more events or contract periods, although there is typically a predominant element. Contracted revenues are allocated between admissions and event related revenue financial statement categories based on relative fair or stand-alone selling price of the respective multiple elements as such events or activities are conducted each year in accordance with underlying agreement terms.
 
We derive other event related revenue from various marketing agreements for on-site advertising, hospitality and other promotion related activities. We derive revenue based commissioned payments from a long-term contracted
third
 party for food and beverage sales during motorsports and non-motorsports events, speedway catered “hospitality” receptions and private parties. We also derive revenue from luxury suite rentals, parking and other event and speedway related activities. Our speedways and related facilities are frequently leased to others for use in driving schools, testing, research and development of race cars and racing products, concerts, settings for commercials and motion pictures, and other outdoor events. We derive event related revenue from the sale of commercial time and other radio broadcast programming on PRN, and from ancillary broadcasting rights other than NASCAR broadcasting revenue.
 
Souvenir and Other Merchandise
– We derive event related revenue from sales of owned motorsports related souvenir merchandise and commissioned souvenir merchandise sales during racing and non-racing events and in our speedway gift shops throughout the year. Souvenir merchandise is sold in concession areas to individual, group, corporate and other customers. Fees and sales based commissions are paid to us by
third
-party vendors to allow on-site selling of merchandise and promotional items during our events and activities. We also derive other operating revenue from our Legend Cars and from Oil-Chem operations, and sales of souvenir merchandising, including screen-printing, embroidery, services and products to
third
parties that typically are
not
event specific.
 
Other
– We derive other operating revenue from dining and entertainment facilities at The Speedway Clubs at CMS and TMS. We also derive other operating revenue from leasing of SR’s industrial park to individuals, corporate and other customers, including race teams and driving schools, from leasing of office towers located at several of our speedways, TMS natural gas mineral rights, and from sanctioning US Legend Cars circuit races.
 
Accounting Recognition for Event Related Revenues and Associated Net Deferred Event Income
– We recognize admissions, NASCAR broadcasting and event related revenues when an event is held. Deferred race event income, and associated direct event expenses, pertain to scheduled events to be held in upcoming periods, are recognized when an event is held, and are reflected net as current liabilities in deferred race event and other income. We recognize contracted sponsorship and other marketing arrangement fee revenues, and associated expenses, as events or activities are conducted each year in accordance with the respective agreement terms. Event souvenir merchandise sales and commission based net revenues from food and beverage sales are recognized at time of sale. Advance revenues and associated direct expenses pertaining to specific events are deferred until the event is held. Deferred expenses often include NASCAR Event Management Fees, race purses and sanction fees for other racing events, sales commissions, event specific advertising, signage and other marketing costs, sales and admission taxes, and credit card processing fees on advance revenues associated with our upcoming events.
 
If circumstances prevent a race from being held during the racing season: (i) generally advance revenue is refundable, (ii) all deferred direct event expenses would be immediately recognized except for race event management fees which would be refundable from NASCAR or other sanctioning bodies, and (iii) sales and admission taxes would be refundable from taxing authorities. Management believes this accounting policy results in appropriate matching of revenues and expenses associated with our racing events and helps ensure comparability and consistency between our financial statements. Advance revenues, and associated direct expenses, if any, for track rentals, driving schools and similar activities are deferred and recognized when the activities take place.
 
Accounting Recognition for Non-Event Souvenir Merchandise and Other Revenues
– We recognize revenue (including associated shipping and handling which is insignificant) when products are shipped, title transfers to customers, right of return or cancellation provisions expire, sales prices are final and collection is probable. Product sold on consignment with right of return or cancellation provisions has
not
been significant.
 
Accounting Recognition for Noncurrent Net Deferred Income
– We recognize revenue associated with Preferred Seat License (PSL) agreements whereby licensees are entitled to purchase annual season ticket packages for sanctioned racing events under specified terms and conditions. Among other items, licensees are required to purchase all season ticket packages as offered each year. License agreements automatically terminate without refund should licensees
not
purchase any offered ticket and are transferable once each year subject to certain terms and conditions. Licensees are
not
entitled to refunds for postponement or cancellation of events due to weather or certain other conditions. Net PSL fees are deferred when received and amortized into income over the estimated useful life of those facilities or recognized upon license agreement termination.
 
Performance Obligations
– A performance obligation is defined as a contracted promise to transfer a distinct good or service to the customer. Our performance obligations and associated accounting recognition are described above. Significantly, we are obligated to conduct events in the manner stipulated under terms and conditions of our sanctioning agreements. We typically require payment of event specific related contracts before associated events are held. Management believes we recognize revenues, and associated costs, when or as distinct and multiple performance obligations are satisfied. For non-event merchandise sales, we transfer control and recognize revenue when products are shipped and customers have accepted and obtained control of the goods. At that time, our obligations under customer contract terms have been satisfied and transfer of control of associated goods and services has occurred. Our contracts typically do
not
contain financing components, or variable consideration except for net commission based revenues for food and beverage sales described above. Our contracts are typically
not
modified, and returns, refunds and warranty costs for goods or services are
not
significant. Management believes there are
no
partially satisfied obligations based on the nature of our operations and contract terms.
 
We have contracted future revenues representing unsatisfied performance obligations, and the estimated revenue expected to be recognized in the future related to these performance obligations. These contracts contain initial terms typically ranging from
one
to
five
years, with some for
ten
-year periods, excluding renewal options. We have elected to use the following practical expedients under ASC
606
for disclosures related to unsatisfied performance obligations: (i) associated future costs to obtain or fulfill unrecorded performance obligations were
not
estimated, (ii) unsatisfied performance obligations expected to be satisfied within the next
twelve
months were excluded, and (iii) time bands, reflecting management’s best estimate of when we will transfer control to customers, are based on calendar years to comport with our seasonal business. We also excluded unsatisfied performance obligations for future NASCAR broadcasting revenue terms through
2024.
We anticipate recognizing unsatisfied performance obligations for the calendar year ending
2019
and beyond of approximately
$150,150,000
at
September 30, 2018. 
 
Contract Balances
– Our contract assets are comprised of accounts receivable and deferred event expenses (described above), and our contract liabilities are comprised of deferred event income and noncurrent deferred income (both described above). Costs to obtain and fulfill contracts (performance obligations) are comprised principally of such deferred event expenses. Significantly, such costs include NASCAR Event Management Fees which must be incurred enabling us to hold associated racing events and receive NASCAR broadcasting revenues. Our policy for expense recognition of contract assets associated with deferred event expenses is further described above. 
 
Changes in contract assets and liabilities during the
nine
months ended
September 30, 2018
result principally from recognition upon holding associated motorsport and non-motorsports events during the period. At
September 30, 2018
and
December 31, 2017,
contract assets aggregated
$5,686,000
and
$7,511,000,
and contract liabilities aggregated
$32,415,000
and
$51,344,000.
For the
nine
months ended
September 30, 2018,
we recognized revenue associated with contract liabilities amounting to
$42,413,000.
Our contract liabilities consist of current and noncurrent deferred revenue of
$29,914,000
and
$2,501,000
at
September 30, 2018,
and we anticipate recognizing current amounts in the upcoming
twelve
-month period and noncurrent amounts thereafter.
 
Taxes Collected from Customers
– We have elected to report sales, admission and other taxes collected from customers based on our applicable jurisdiction tax reporting requirements. As such, taxes are reported on both a gross and net basis in our operations, and those reported on a gross basis amounted to
$1,579,000
and
$1,386,000
in the
three
months ended
September 30, 2018
and
2017,
and
$3,967,000
and
$4,115,000
in the
nine
months ended
September 30, 2018
and
2017.
v3.10.0.1
Note 2 - Significant Accounting Policies and Other Disclosures (Tables)
9 Months Ended
Sep. 30, 2018
Notes Tables  
Fair Value Measurements, Recurring and Nonrecurring [Table Text Block]
             
2018
   
2017
 
   
Level
 
Class
 
Carrying
Value
   
Fair Value
   
Carrying
Value
   
Fair Value
 
Assets
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
   
1
 
R
  $
80,501
    $
80,501
    $
81,924
    $
81,924
 
Note receivable
   
2
 
NR
   
661
     
661
     
799
     
799
 
Cash surrender values
   
2
 
NR
   
10,369
     
10,369
     
9,822
     
9,822
 
                                           
Liabilities
(principal)
 
 
 
 
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Floating rate revolving Credit Facility, including Term Loan
   
2
 
NR
   
3,000
     
3,000
     
30,000
     
30,000
 
5.125% Senior Notes due 2023
   
2
 
NR
   
200,000
     
198,000
     
200,000
     
205,000
 
Other long-term debt
   
2
 
NR
   
887
     
887
     
1,049
     
1,049
 
Disaggregation of Revenue [Table Text Block]
   
Three Months Ended
September 30:
   
Nine Months Ended
September 30:
 
   
2018
   
2017
   
2018
   
2017
 
Admissions
  $
30,536
    $
27,641
    $
66,811
    $
71,532
 
NASCAR broadcasting
   
78,374
     
61,962
     
201,246
     
180,065
 
Sponsorships and other event related
   
42,092
     
31,965
     
105,038
     
96,786
 
Souvenir and other merchandise
   
5,368
     
4,958
     
14,671
     
14,673
 
Other
   
3,715
     
4,197
     
12,531
     
14,122
 
Total Revenue
  $
160,085
    $
130,723
    $
400,297
    $
377,178
 
v3.10.0.1
Note 3 - Inventories (Tables)
9 Months Ended
Sep. 30, 2018
Notes Tables  
Schedule of Inventory, Current [Table Text Block]
   
September 30,
   
December 31,
 
   
2018
   
2017
 
Finished race cars, parts and accessories
  $
6,174
    $
4,507
 
Souvenirs and apparel
   
1,982
     
2,014
 
Micro-lubricant
®
and other
   
533
     
762
 
Total
  $
8,689
    $
7,283
 
v3.10.0.1
Note 5 - Long-term Debt (Tables)
9 Months Ended
Sep. 30, 2018
Notes Tables  
Interest Income and Interest Expense Disclosure [Table Text Block]
   
Three Months Ended
September 30:
   
Nine Months Ended
September 30:
 
   
2018
   
2017
   
2018
   
2017
 
Gross interest costs
  $
3,021
    $
3,217
    $
9,383
    $
9,861
 
Less: capitalized interest costs
   
(100
)
   
(65
)
   
(348
)
   
(218
)
Interest expense
   
2,921
     
3,152
     
9,035
     
9,643
 
Interest income
   
(150
)
   
(98
)
   
(354
)
   
(421
)
Interest expense, net
  $
2,771