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International Speedway Management Discusses Q2 2012 Results - Earnings Call Transcript

So with these formalities out of the way, I'll turn the call over to John Saunders. John?

John R. Saunders

Thank you, Charles, and good morning, everyone. Our fiscal second quarter financial results were positively impacted by scheduling changes, primarily due to hosting 2 additional NASCAR Sprint Cup Series events than in the comparable quarter. Other quarter-over-quarter comparisons are outlined in the earnings news release. Despite the favorable financial results quarter-over-quarter, attendance-related revenues at our events generated mixed results. Corporate sales for the quarter were slightly behind target, but we remain encouraged by the level of market activity supported by strong media sales.

For the year, we expect to be within a couple of percentage points of our corporate revenue target with the exception of 2 Sprint Cup events, which remain open or not yet announced. We have sold all remaining NASCAR Sprint Cup and nationwide entitlements, and we're confident that we will secure entitlement partners for both Watkins Glen and Phoenix's Sprint Cup events.

Turning to the consumer, we are seeing certain positive signs such as some growth in -- for caps for food, beverage and merchandise concessions. In addition, retention rates have experienced a slight uptick for comparable events. Positive signs indeed but attendance-related revenues continued to be challenged by the slower-than-expected economic recovery.

Deferred revenue, after adjusting for event schedule changes, is down year-over-year by approximately $11 million. Advanced ticket sales for our Sprint Cup events remain approximately 8% and 9% off from last year in units and revenue, respectively. Parts of these declines are associated with the timing of renewals and related programs. However, fans' purchasing decisions are still coming later in the sales cycle, closer to the race weekend. NASCAR core fan demographic, which is the working class, still has a lack of consumer confidence, seeing a lack of job growth and less income growth. Until these indicators improve, we expect our current consumer trends to remain under pressure.

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