SIGNIFICANT ACCOUNTING POLICIES AND OTHER DISCLOSURES

These unaudited consolidated financial statements should be read in conjunction with our consolidated financial statements included in our

2016

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

to the Consolidated Financial Statements in our

2016

Annual Report for further discussion of significant accounting policies.

Quarterly Reporting and Certain Schedule Changes

– 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.

Racing Schedule Changes.

The more significant racing schedule changes for the

three

and

nine

months ended

September 30, 2017

as compared to

2016

include:

•	LVMS held one NASCAR Camping World Truck Series race in the third quarter 2017 that was held in the fourth quarter 2016
•	Poor weather resulted in delaying the start of one NASCAR Camping World Truck race at BMS and one NASCAR Xfinity race at NHMS in the third quarter 2017
•	Poor weather resulted in postponing and next-day rescheduling one Monster Energy NASCAR Cup race, and delaying the completion of one NASCAR Xfinity race, at BMS in the second quarter 2017
•	Poor weather resulted in delaying the completion of one Monster Energy NASCAR Cup race at CMS in the second quarter 2017
•	TMS held one IndyCar race in the second quarter 2017; poor weather at TMS resulted in rescheduling an IndyCar race from the second quarter 2016 to the third quarter 2016 as further discussed below

Poor weather resulted in postponing and rescheduling

an IndyCar race at TMS from the

second

quarter

2016

to the

third

quarter

2016.

The Company offered to honor unused tickets through exchange for race tickets to TMS’s Monster Energy NASCAR Cup race in

April 2017

or IndyCar race in

June 2017.

The exchange offer expired in

June 2017,

and cash refunds were

not

offered. Tickets exchanged for race events held in

2017

were

not

significant. As of

December 31, 2016,

we had deferred race event income of

$524,000

for unredeemed tickets associated with TMS’s

2016

IndyCar race, all of which was recognized in the

second

quarter

2017.

The Battle at Bristol

2016.

In the

third

quarter

2016,

BMS hosted

two

collegiate football games,

one

of which (the Battle at Bristol - including a large preceding concert) was substantially larger than the other due to team standings and public interest. Under the same accounting policy for our racing events, we previously deferred advance revenues and direct expenses pertaining to these events in “deferred race event and other income, net”, all of which were recognized when held in the

third

quarter

2016.

These events had a material positive effect on our operating results for the

three

and

nine

months ended

September 30, 2016,

and associated revenues and direct expenses are reflected in “other operating revenue” and “other direct operating expense” in our Consolidated Statements of Operations, and in our “all other” reporting segment (see Note

). Management believes reporting these results separate from our core business of motorsports operations is appropriate as we do

not

have additional football games scheduled at this time (nor have any been held before). These results are

not

indicative of future results that can be expected or forecast.

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

undistributed foreign earnings or cash or cash equivalents held outside of the US. See Notes

and

to the Consolidated Financial Statements in our

2016

Annual Report for additional information on our accounting for income taxes.

Our effective income tax rate for the

three

months ended

September 30, 2017

and

2016

was

37.1%

and

33.1%,

and for the

nine

months ended

September 30, 2017

and

2016

was

35.0%

and

35.8%,

respectively. The 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.

Our effective tax rates for the

three

and

nine

months ended

September 30, 2016

reflect non-recurring tax benefits of

$507,000

resulting from certain state income tax law changes. We paid cash of

$12,855,000

and

$650,000

for income taxes in the

nine

months ended

September 30, 2017

and

2016.

Accounting for Uncertainty in Income Taxes

– Income tax liabilities for unrecognized tax benefits approximate

$12,006,000

September 30, 2017

and

December 31, 2016,

$11,746,000

of which relates to our discontinued operation (see Note

to the Consolidated Financial Statements in our

2016

Annual Report). Of those amounts,

$11,794,000

is included in noncurrent other liabilities, all of which would favorably impact our effective tax rate if recognized

and

$212,000

is included in deferred tax liabilities, at both

September 30, 2017

and

December 31, 2016.

As of

September 30, 2017

and

December 31, 2016,

management believes

$260,000

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, 2017

and

2016.

As of

September 30, 2017

and

December 31, 2016,

we had

$216,000

and

$140,000

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

2014

through

2016

by the Internal Revenue Service, and

2012

through

2016

by other state taxing jurisdictions to which we are subject.

Income Tax Benefits

– Applicable accounting guidance

may

require establishing valuation allowances for certain deferred tax assets or income tax liabilities for unrecognized tax benefits, although management believes associated tax filing positions are sustainable and properly reflected in its tax filings. At

September 30, 2017,

liabilities for unrecognized tax benefits totaled

$12.0

million. Should those tax positions

not

be fully sustained if examined, an acceleration of material income taxes payable could occur. Where

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.

Taxes Collected from Customers

– We report sales, admission and other taxes collected from customers on both a gross and net basis in operations. Such taxes reported on a gross basis for the

three

months ended

September 30, 2017

and

2016

were

$1,386,000

and

$3,610,000,

and for the

nine

months ended

September 30, 2017

and

2016

were

$4,115,000

and

$6,427,000.

Advertising Expenses

– Event specific advertising costs are expensed when an associated event is held and included principally in direct expense of events (costs associated with the

2016

Battle at Bristol are included in other direct operating expense). Non-event related advertising costs are expensed as incurred and included principally in other direct operating expense. Advertising expense amounted to

$3,831,000

and

$5,724

,000

for the

three

months ended

September 30, 2017

and

2016,

and

$10,854,000

and

$13,306

,000

for the

nine

months ended

September 30, 2017

and

2016.

There were

deferred direct-response advertising costs at

September 30, 2017

December 31, 2016.

TMS Mineral Rights Lease

Receipts

– We recognized royalty revenue of

$508,000

and

$615,000

in the

three

months ended

September 30, 2017

and

2016,

and

$1,486,000

and

$1,666,000

in the

nine

months ended

September 30, 2017

and

2016

under a natural gas mineral rights lease agreement and a joint exploration agreement entitling TMS to stipulated stand-alone and shared royalties, as further described in Note

to the Consolidated Financial Statements in our

2016

Annual Report. Such revenues can vary from associated volatility in natural gas price levels and common diminishing well production. 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. However, at this time, management believes

2017

revenues will

not

differ significantly from

2016,

and that our infrastructure spending will continue to exceed anticipated future royalties. As of

September 30, 2017

and

December 31, 2016,

there was

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 or where non-interest bearing is discounted based on estimated current cost of borrowings; therefore, carrying values approximate market value. There have been

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, 2017

and

December 31, 2016 (

in thousands):

				2017				2016
	Level		Class	Carrying Value		Fair Value		Carrying Value		Fair Value

Assets
Cash and cash equivalents		1	R	$	85,82 7	$	85,82 7	$	79,342	$	79,342
Notes receivable		2	NR		1,018		1,018		1,143		1,143
Cash surrender values		2	NR		9,5 87		9,5 87		8,919		8,919

Liabilities (principal)
Floating rate revolving Credit Facility, including Term Loan		2	NR		35,000		35,000		66,000		66,000
5.125% Senior Notes Payable due 2023		2	NR		200,000		206,500		200,000		202,500
Other long-term debt		2	NR		1,049		1,049		1,206		1,206

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

– In the

three

and

nine

months ended

September 30, 2017,

we recorded gains of

$403,000

and

$855,000

from disposal of certain TMS property. In the

three

and

nine

months ended

September 30, 2016,

we recorded accelerated depreciation of

$357,000

associated with removal of certain TMS assets and a

$1,519,000

gain from disposal of certain AMS property.

From time to time, we

may

decide to repurpose various seating, suites and other

areas at our speedways for modernizing our facilities, alternative marketing or development purposes such as offering expanded premium hospitality, RV camping and advertising areas, or wider seating and improved sight lines. When management decides on repurpose and removal, depreciation is accelerated and 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 approximately

7,000

seats at CMS,

17,000

seats at KyS and

12,000

seats at NHMS, which was substantially completed in the

first

half of

2017.

As such, we recorded pre-tax charges for accelerated depreciation and costs of removal (included in other expense, net) aggregating approximately

$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

Recently Issued Accounting Standards

– The Financial Accounting Standards Board (FASB) issued Accounting Standards Update

No.

2014

"Revenue from Contracts with Customers (Topic

606

): Section A - Summary and Amendments That Create Revenue from Contracts with Customers and Other Assets and Deferred Costs - Contracts with Customers (Subtopic

340

)" which enhances comparability and clarifies principles of revenue recognition arising from contracts with customers that supersedes most current revenue recognition guidance. 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. The FASB has recently issued several amendments to the new standard, including Update

No.

2016

"Revenue from Contracts with Customers (Topic

606

) - Principal versus Agent Considerations" clarifying implementation guidance for those considerations in Update

No.

2014

09,

and Update

No.

2016

"Revenue from Contracts with Customers (Topic

606

) - Identifying Performance Obligations and Licensing" amending the guidance in Update

No.

2014

related to those items. The FASB issued Update

No.

2015

approving deferral of Update

No.

2014

for

one

year, with such guidance now effective for annual reporting periods beginning after

December 15, 2017,

including interim periods within that reporting period. Early application is permitted as of annual reporting periods beginning after

December 15, 2016,

including interim reporting periods within that reporting period. The guidance

may

be applied retrospectively to each prior period presented or retrospectively with cumulative effects recognized as of the date of adoption. The Company continues to evaluate the potential impact that adoption

may

have on its financial statements, including associated accounting policies, processes, and system requirements to enable timely and accurate reporting. We are analyzing our revenue streams and associated contracts using the

five

-step model provided in the new revenue standard, and are gathering information for required disclosures. The Company plans to adopt this new guidance as of

January 1, 2018

using the modified retrospective method of adoption. At this time, we believe adoption will

not

result in a significant initial adjustment or materially impact our future operating results or classification of revenues.

The FASB issued Accounting Standards Update

No.

2015

"Inventory (Topic

330

): Simplifying the Measurement of Inventory” which requires measuring inventory at the lower of cost and net realizable value based on estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation (changed from the previous guidance of lower of cost or market). This update also clarified various other inventory measurement and disclosure requirements. The update does

not

apply to inventory measured using the LIFO or retail inventory methods. The guidance is effective for annual reporting periods beginning after

December 15, 2016,

including interim periods within that reporting period, and applied prospectively. The Company

’s adoption of this guidance as of

January 1, 2017

had

significant impact on its financial statements or disclosures.

The FASB issued Accounting Standards Update

No.

2016

“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. 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 guidance is effective for fiscal years beginning after

December 15, 2018,

and interim periods within those fiscal years. Early adoption is permitted. The guidance is required to be applied using the modified retrospective approach for all leases existing as of the effective date, requires application at the beginning of the earliest comparative period presented, and provides for certain practical expedients. The Company is currently evaluating the potential impact that adoption

may

have on its financial statements.

The FASB issued Accounting Standards Update

No.

2016

“Statement of Cash Flows (Topic

) - 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 should be applied using a retrospective transition method to each period presented. Early adoption is permitted, and any amendments must be adopted in the same period. At this time, the Company believes adoption will have

significant impact on its financial statements, and plans to apply this guidance to future classifications when applicable.

The FASB issued Accounting Standards Update

No.

2017

“Intangibles

– Goodwill and Other (Topic

350

): Simplifying the Test of Goodwill Impairment” which simplifies how an entity is required to test goodwill for impairment by eliminating Step

(measuring goodwill impairment loss by comparing implied fair value of a reporting unit’s goodwill to the carrying amount of that goodwill) from the impairment test. Under this update, entities should perform goodwill impairment testing by comparing the fair value of a reporting unit with its carrying amount, and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The same impairment assessment applies to all reporting units, and entities still have the option to perform qualitative assessment for a reporting unit to determine if quantitative impairment testing is necessary. This update modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. Entities will

longer determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. The Company is required to adopt this guidance for its annual or any interim goodwill impairment tests in fiscal years beginning after

December 15, 2019,

and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after

January 1, 2017.

The Company early adopted this guidance for its annual impairment testing performed in the

second

quarter

2017

(see Note