Profile: Speedway Motorsports, Inc. (TRK)

Speedway Motorsports, Inc. (SMI), incorporated in 1994, is a promoter, marketer and sponsor of motorsports activities in the United States. The Company owns and operates, through its subsidiaries, Atlanta Motor Speedway (AMS), Bristol Motor Speedway (BMS), Infineon Raceway (IR), Kentucky Speedway (KS), Las Vegas Motor Speedway (LVMS), Lowe’s Motor Speedway (LMS), New Hampshire Motor Speedway (NHMS) and Texas Motor Speedway (TMS). The Company operates through two business segments: motorsports event related segment and all other segment. SMI also provides souvenir merchandising services, and food, beverage and hospitality catering services through its SMI Properties subsidiaries; provides radio programming, production and distribution through its Performance Racing Network (PRN) subsidiary; develops electronic media promotional programming and distributes wholesale and retail racing and other sports-related souvenir merchandise and apparel through The Source International (TSI) subsidiary, and manufactures and distributes smaller-scale, modified racing cars and parts through its 600 Racing subsidiary.

In January 2008, the Company acquired New Hampshire Speedway, Inc., doing business as New Hampshire International Speedway. The New Hampshire International Speedway was renamed New Hampshire Motor Speedway. NHMS owns and operates a multi-use complex located in Loudon, New Hampshire, featuring a 1.058-mile oval superspeedway and a 1.6-mile road course on approximately 1,180 acres. NHMS has approximately 96,000 premium permanent seats and 38 luxury suites. NHMS has sanction agreements to annually host two National Association for Stock Car Auto Racing (NASCAR) Sprint Cup Series, one NASCAR Nationwide Series and one NASCAR Camping World Truck Series races, and conducts other events and track rentals. SMI purchased substantially all of Kentucky Speedway, LLC assets on December 31, 2008. KS is located in Sparta, Kentucky, approximately one-half hour south of Cincinnati, Ohio, on approximately 820 acres. KS features a 1.5-mile lighted, tri-oval speedway with approximately 69,000 permanent grandstand seats and 53 luxury suites. KS annually hosts one NASCAR Nationwide Series, one NASCAR Camping World Truck Series, one IndyCar Series and other racing events.

The Company’s motorsports event related segment consists of revenues and expenses associated with all admissions, event related, NASCAR broadcasting and event motorsports merchandising activities, and joint venture equity investee earnings or losses associated with motorsports merchandising. The Company’s all other operations consist of TSI non-event motorsports and non-motorsports merchandising, 600 Racing non-event merchandising and sanctioning body activities, and Oil-Chem micro-lubricant activities, and office rentals at certain Company speedways. The Company’s equally owned joint venture with International Speedway Corporation (ISC), Motorsports Authentics (MA), produces, markets and sells motorsports licensed merchandise. SMI’s speedways are positioned in eight markets in the United States. At December 31, 2008, the Company had total permanent seating capacity of 916,000, with 846 luxury suites in its facilities. SMI derives revenues principally from activities, such as sales of tickets to motorsports races and other events held at its speedways; licensing of network television, cable television and radio rights to broadcast such events; sales of sponsorships, facility naming rights and promotions to companies that desire to advertise or sell their products or services surrounding SMI’s events; commissions earned on sales of food, beverages and hospitality catering; event sales and commissions from souvenir motorsports merchandise, and rental of luxury suites during events and other track facilities.

During the year ended December 31, 2008, SMI derived approximately 83% of its total revenues from NASCAR-sanctioned events. It also derived revenue from Indy Racing League (IRL), National Hot Rod Association (NHRA), World of Outlaws (WOO) and other racing series events, from TSI and certain SMI Properties non-event merchandising operations, 600 Racing, The Speedway Clubs at LMS and TMS, Oil-Chem, and Racing Country USA. Its revenue from corporate sponsorships is received in accordance with negotiated contracts. As of December 31, 2008, the Company had sponsorship contracts with manufacturing and consumer products companies and brands, such as Save Mart Supermarkets, Food City, Kobalt Tools, Pep Boys, O’Reilly Auto Parts, Snap-on Tools, Samsung, 7-Eleven, NAPA Auto Parts, Food Lion, Yokohama, Valvoline and Sharpie of Sanford North America Corporation. SMI derives event-related revenue from commissioned food, beverage and souvenir sales during racing and non-racing events and from fees paid for speedway catered hospitality receptions and private parties. It also derives revenue from luxury suite and track rentals, from parking and other event and speedway-related activities. As of December 31, 2008, its speedways had a total of approximately 846 luxury suites available for leasing to corporate sponsors or others. LMS has also constructed 40 open-air boxes, each containing 32 seats, which are available for renting by corporate sponsors or others.

The Company broadcasts most of its NASCAR Sprint Cup and Nationwide Series races over its Performance Racing Network, which also sponsors four weekly racing-oriented programs throughout the NASCAR season. SMI derives event-related revenue from the sale of commercial time on PRN, which is syndicated nationwide to more than 715 stations. The Company derives event-related revenue from sales of owned motorsports-related souvenir merchandise during racing and non-racing events, and in its speedway gift shops throughout the year. Souvenir merchandise is sold primarily in concession areas located on or near speedway concourses and other areas surrounding its speedway facilities to individual, group, corporate and other customers. Motorsports event-related merchandise revenue consists principally of revenues from SMI Properties and SMI Trackside who provide event souvenir merchandising for SMI’s speedways and third-party speedways. SMI Trackside is a wholly owned subsidiary of SMI Properties.

The Company derives other operating revenue from TSI, certain SMI Properties and Legends Car operations. SMI derives other operating revenue from Oil-Chem, which produces a micro-lubricant. SMI derives other operating revenue from The Speedway Club at LMS and The Texas Motor Speedway Club (together, the Speedway Clubs) dining and entertainment facilities located at the respective speedways, which serve individual, group, corporate and other clientele. It also derives other operating revenue from leasing of IR’s industrial park to individuals, corporate and other customers, including race teams and driving schools, from leasing of office towers located at several of its speedways to motorsports and non-motorsports associated corporate and other customers, and from the sanctioning of Legends Car Circuit races.

The Company competes with ISC.