Executives
Lesa France Kennedy - Vice Chairwoman and Chief Executive Officer
John R. Saunders - President
Daniel W. Houser - Chief Financial Officer, Chief Accounting Officer, Senior Vice President and Treasurer
Analysts
Stephen Altebrando - Sidoti & Company, LLC
Barry L. Lucas - G. Research, Inc.
International Speedway (ISCA) Q4 2013 Earnings Call January 28, 2014 9:00 AM ET
Operator
Good morning, and welcome to the International Speedway Corp. 2013 Fourth Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded on Tuesday, January 28, 2014. With us on this call this morning are Lesa France Kennedy, Chief Executive Officer; John Saunders, President; and Dan Houser, Senior Vice President and Chief Financial Officer. After formal remarks, a question-and-answer period will follow. The operator will instruct you on procedures at that time.
Before we start, the company would like to address forward-looking statements that may be addressed on the call. Forward-looking statements involve risks, uncertainties and assumptions. Actual future performance, outcomes and results may differ materially from those expressed in these forward-looking statements. Please refer to the documents filed by the International Speedway Corp. with the SEC, specifically, the most recent report on Form 10-K and 10-Q, which identify important risk factors which could cause actual results to differ from those contained in these forward-looking statements. So with these formalities out of the way, I will turn the call over to Lesa Kennedy. Lesa?
Lesa France Kennedy
Good morning, and thank you for participating on today's call. We are pleased to report solid results for our fourth quarter and the full year 2013. Despite softness in certain markets and inclement weather impacting fourth quarter admissions, we are seeing encouraging signs of stabilization on our core business, driven by slowly improving economic conditions and solid consumer and corporate marketing strategies.
2013 was a banner year for our sport with TV ratings up, the launch of the Gen 6 car, fan enthusiasm surrounding Danica Patrick's full season debut in the Sprint Cup series, and an increasing diversity in the NASCAR fan base. All of these are signs that the Industry Action Plan are working.
The 2013 NASCAR season was capped off with a sixth Sprint Cup championship for Jimmie Johnson, the 11th for Hendrick Motorsports.
Also, ISC's risk profile improved significantly during 2013 with the sale of our Staten Island property and NASCAR negotiating the largest TV rights contract in the sports history, which is giving us strong earnings visibility through 2024. What other industry has the largest revenue stream locked in for the next 11 years? As a result, we feel increasingly confident about our financial condition and strategic initiatives to grow our business.
In July, we broke ground on the redevelopment of the frontstretch of Daytona International Speedway and I am pleased to report that DAYTONA Rising is running at full speed on schedule and on budget. We are confident that elevating the experience at the most iconic motorsports facility in North America will take the DAYTONA 500 brand to a whole new level and not to mention the impact on our other 12 major motorsports facility brands and the NASCAR brand.
Over the longer term, we believe this initiative will influence attendance trends, corporate involvement in the sport and the long-term strength of future broadcast media rights revenues.
To this point, we are also excited to let you know that in February, we are hopeful to announce our first DAYTONA Rising founding sponsor with a blue chip brand that shares our vision. In addition, our proposed mixed-use and entertainment destination project located directly across from the Daytona International Speedway, ONE DAYTONA, is gaining steam.
In partnership with Jacoby Development, we are making steady progress on securing tenants to complement the previously anchors, Bass Pro Shops and Cobb Theatres. In addition, our teams are in discussions with local and state officials regarding the opportunities for public incentives to support the project. ONE DAYTONA will be a welcome addition to our growing list of value-building ancillary developments and will complement our hugely successful Hollywood Casino at the Kansas Speedway joint venture. As always, it is an exciting time of the year here in Daytona as we kick off the 2014 racing season, not only for ISC and NASCAR, but most importantly, for our fans and our sponsors.
So with that, I'll now turn it over to John Saunders who will tell you a little bit more about the outlook for the new year. Thank you.
John R. Saunders
Thank you, Lesa. And good morning, everyone. As Lesa mentioned, 2013 was a banner year for our sport and ISC. We experienced the launch of the Gen 6 car, a collaborative and far-reaching initiative undertaken by NASCAR, Toyota, Chevrolet and Ford to put the stock back in Stock Car and provide close competitive racing. The season witnessed 19 track qualifying records broken, a record number of Green Flag passes and the lowest margin of victory since 2005. Twenty races ended up with a margin of victory of less than 1 second, up from 17 in 2012.
From a viewership perspective, NASCAR remains a dominant regular-season sport with nearly 70 million unique viewers tuned into the NASCAR Sprint Cup series in 2013. The NASCAR Sprint Cup series averaged 5.8 million viewers per event in 2013, up 1% over 2012, with ratings for 23 of the 36 event weekends equal to or greater than last year. While overall viewership metrics were somewhat mixed, we saw improvement in key demographics, including female viewers, males aged 13 to 34, and very impressive growth in Hispanic viewership.
On track, an exciting chase of this -- for the Sprint Cup championship, featuring a hard-fought duel between the #20 Toyota Camry driven by Matt Kenseth and the #48 Lowe's Chevy SS, ended up at Homestead-Miami Speedway with Jimmie Johnson winning his sixth NASCAR Sprint Cup championship. Jimmie now trails NASCAR's legends, Richard Petty and Dale Earnhardt, senior by only 1 championship season, and has established himself as a member of the elite class of athletes worldwide. Jimmie is a fan and media favorite. And a long-term Hendrick Motorsports low sponsorship is an example of the great success that can come with corporate investment in NASCAR, both on the track and in market.
During the quarter, ISC hosted 7 NASCAR Sprint Cup weekends and 1 INDYCAR race at Auto Club Speedway. While we have been encouraged with attendance stabilization in many markets this year, the recent quarter was impacted by rain at Chicagoland and continuing challenges remain at Talladega and Richmond. Those results offset solid cup attendance at Martinsville, Phoenix and Homestead-Miami.
In addition, our average ticket price for all events held during the quarter decreased almost 3.5% from approximately $59.60 to $57.60. Driven by an increase in group sales for the Homestead weekend, certain total partnership revenues at Richmond and Chicagoland weighted more towards sponsorship and less to admissions than the prior year and the timing of the Camping World Truck, an ARCA event, held at Chicagoland in the third quarter of 2012 as compared to the fourth quarter in 2013. For the year, our average ticket price for NASCAR events declined less than 2%.
For 2014 events, both Talladega and Richmond are pursuing very aggressive plans to improve the guest experience, including moving fans from less-than-optimal seating areas to options providing a heightened experience and much-improved sight-lines.
Revenue from corporate partnerships was a bright spot for the quarter as well for the full year, exceeding expectations in prior year results for both periods when normalizing for the shortfall at MRN, advertising and Sprint Vision revenues discussed last quarter.
Another bright spot for our fourth quarter and throughout 2013 has been the performance of our joint venture, the Hollywood Casino at Kansas Speedway. The casino has met or exceeded expectations throughout the year, continuing to build market share. Our hats are off to our partners at Penn National Gaming who operate the casino extremely efficiently, maximizing revenue and controlling their costs. In addition to stellar performance, the successful resolution of a property tax dispute contributed to strong cash returns of approximately $21.5 million and equity earnings for the year of $9.4 million.
Increased visibility on our property taxes for the existing facility has led our casino joint venture to reopen consideration of the next phase, which is hotel and meeting space construction. Per the Development Agreement with the Unified Government of Wyandotte County, Kansas, the casino is subject to a 1% of gross gaming revenue penalty if it has not commenced construction on a hotel development within 2 years of the February 2012 opening.
Penn is currently evaluating construction costs, financing options and project returns for the hotel. Recently, the Unified Government agreed to extend the construction commencement date until 20 -- October 2014 if the casino joint venture commits to a timetable in May. Whether or not to move forward will be a market-based -- will be market-based and decided by the Penn ISC joint venture.
Looking forward, we are cautiously optimistic that we will see continued macroeconomic strengthening and most importantly, sustained improvement with consumer confidence. While consumer sentiment regarding general economic conditions appears to be rebounding from the dip around the government shutdown, consumers remain tentative with regards to optimisms surrounding their own financial stability. An upturn in this aspect, along with a more balanced and sustained recovery reaching mid- to lower-income households is what will signal a true tailwind for ticket sales.
As we head into 2014, we see many sport and company reasons for optimism, specifically, increasing momentum around the Industry Action Plan.
In December, NASCAR announced several competition enhancements for 2014. The package was developed after extensive on-track testing with teams as well as in-house analysis at the NASCAR Research and Development Center in North Carolina. The changes are expected to enhance competition on the series 1.5-mile and 2-mile venues.
In addition, NASCAR recently announced scoring enhancements focused on intensifying the natural rivalries between the auto manufacturers both on the racetrack and in the showroom. We believe aligning the manufacturer's point systems with the owner's points will create better understanding for the entire industry and bolster interest and excitement with our fan base, which has shown intense manufacturing loyalty throughout the sports history.
Just last week, in a move aimed toward enhancing the fan experience watching at the track and at home, NASCAR announced a new group qualifying format for its 3 national series that is far more compelling, more closely emulate actual on-track competition and underlines the sport's ongoing commitment to innovation.
But perhaps the biggest industry news is NASCAR has begun the process of briefing key industry stakeholders on potential concepts to evolve the Chase for the Sprint Cup series championship format. This dialogue is in the final phase of a multi-year process that has included the review of extensive fan research, partner and industry feedback and other data-driven insights.
Industry sources say NASCAR is planning a vast restructuring of the point system in the Sprint Cup series that would greatly emphasize winning races and feature eliminations in the Chase for the Cup. Reports say, in addition to expanding the Chase field from 12 to 16 drivers, a win in the season's first 26 races would virtually ensure a driver entry into the championship chase. If there were more than 16 winners, the 16 with the most wins and the highest endpoints would gain entry. Should 16 drivers not win races, the remaining slots would be filled by the driver's highest endpoints. Once the Chase field was -- is set, a round of eliminations, similar to NCAA Tournament, would take place after the third, sixth and ninth race of the Chase, culminating with the championship determined by a winner-takes-all season finale at Homestead-Miami Speedway. So you can see there are a lot of exciting developments planned for 2014.
Last weekend here in Daytona, the 56th anniversary of the Rolex 24, Daytona showcased the inaugural race of the Tudor United Sportscar Championship, the newly unified organization between Grand-Am Rolex Sports Car Series and the American LeMans Series. The weekend saw record crowds and an exciting finish that culminated with a victory of 1.4 seconds by previous Rolex 24 championship team Action Express. Sponsor and fan response to this historic launch of this new era in American motorsports sports cars racing exceeded everyone's expectations.
In 2014, we will continue our focus on shortening the sales cycle through multiple initiatives, including enhancement with the guest experience and managing capacity. In October, we unveiled our plan to provide race fans with the sport's first fully integrated multimedia race day experience across all motorsports facility, not just for the DAYTONA Rising project. The initiative will begin in 2014 and being completed over the next few years.
In addition to thrilling live on-track racing action, fans will be able to enjoy rich multimedia content directly on their Sprint smartphones and other handheld devices and on new high-definition video screens located throughout the racetrack. They will also enjoy enhanced connectivity to instantly share their race day experience with friends inside and outside the track via Twitter, Facebook and other social media platforms.
These enhancements focus on several key areas: First, digital high-definition video screens, beginning with Talladega Superspeedway in 24 and through 2016, new, large high-definition video boards will be installed across all ISC racetracks. These video boards will be located throughout each facility to ensure all fans in attendance have a clear view of the screens to enjoy all of the great content that it will deliver.
Secondly, Unique At-Track Content. ISC has deployed a fully integrated multimedia content strategy to deliver up-to-the-second live in-race and in-camera -- in-car camera views, instant race data and other interactive race day content to enhance the live on-track action and provide fans with the race day experience unlike any other in the industry.
And lastly, enhanced connectivity. Wi-Fi service will be provided in premium camping areas and other fan areas as well as high-traffic areas. These services were already installed at Michigan International Speedway and Auto Club Speedway of Southern California in 2013 and will be rolled out to other venues in the ISC family in 2014 and 2015.
In addition, ISC is working with American Tower Corporation to provide improved cellular coverage to include 4G connectivity for fans during race weekends. These systems have already been installed at Daytona, Kansas and Chicagoland and will be rolled out in Phoenix, Talladega and Auto Club Speedway in 2014 and the remaining ISC facilities in 2015.
In total, ISC and its partners have committed over $50 million to complete these enhancements through 2016. Our portion of this investment is included in the 500 -- the 5-year, $600 million capital allocation plan endorsed by our board of directors in June 2013.
Last quarter, I talked extensively about strategy behind ISC's capacity management initiatives. An extensive work at many of our facilities has been completed for the 2014 season. These initiatives aligned with our commitment to improve the At-Track experience and fan engagement through providing better sight-lines and greater access to the facilities' amenities, including pre-race experiences, points of sale and social zones. We believe improved fan engagement can lead to better pricing power, increased tickets sold earlier, thereby, reducing the impact of forecasted or actual inclement weather on ticket sales, increased customer retention and allowing for an increased level of promotion for our lead-in events, which will drive additional ticket sales. Further strong attendance and high-capacity utilization will attract corporate partners and enhance our broadcast relationships.
DAYTONA Rising is well underway and fans attending this year's events are getting a firsthand look at the dramatic progress being made. Today, we have poured over 60 million pounds of concrete and will have 40 million pounds of steel installed, representing approximately 1% of the annual steel production in the United States. We are proud of the progress thus far on the DAYTONA Rising project and equally excited to welcome fans and industry partners for the start of the 2014 race season. Throughout the Rolex 24 Daytona and the remainder of Budweiser Speedweeks, they have and will continue to get an up-close and personal look at all of the progress we've made to date and feedback has been very positive thus far. They are all starting to share the excitement that we've felt since the groundbreaking in July. Our construction partners at Barton Malow and ROSSETTI have put us in a great position to continue momentum for the DAYTONA Rising project, yet preparing the facility so we can deliver unforgettable experiences for our loyal race fans during our marquee events.
Track president, Joie Chitwood, and his DIS team have a robust marketing communications plan in place for DAYTONA Rising. The campaign will capitalize on built-in opportunities during Budweiser Speedweeks that maximizes messaging to race fans, drives greater value through deeper sponsor integration, focuses on media opportunities around construction milestones to generate ongoing awareness and provides a steady stream of information sharing to drive interest and activation.
And to further fuel enthusiasm, we are hopeful about an coming announcement in February surrounding our first major DAYTONA Rising sponsor. Complimenting this messaging is the continuing progress to our realization of the vision for ONE DAYTONA. This all adds up to another eventful year here at ISC. So now I will turn it over to Dan Houser who will give you a financial review of the quarter and guidance on 2014. Dan?
Daniel W. Houser
Thanks, John and good morning, everyone. We are pleased with our fiscal 2013 results, achieving the midrange of our earnings guidance for non-GAAP EPS. And even though we experienced year-over-year declines in attendance-related revenues, Q4 exceeded our expectations from a non-GAAP operating margin and EPS perspective.
During the quarter, we hosted 7 NASCAR Sprint Cup series events, 5 Nationwide series events, 5 Camping World Truck series events and an INDYCAR event. The quarter-over-quarter comparison was affected by Chicagoland Speedway's NASCAR Camping World Truck series event held in the fourth quarter of fiscal 2013, while the corresponding event was held in the third quarter of fiscal 2012.
Other factors impacting comparability for our fourth quarter 2013 results include: carrying costs incurred in the fourth quarter of 2012 related to the Staten Island property; similar costs were de minimis in our 2013 fourth quarter as the property was sold in August; marketing and consulting costs related to the DAYTONA Rising project; charges, primarily noncash, for accelerated depreciation and asset retirements related to the removal of assets not fully depreciated for DAYTONA Rising; capacity management initiatives and other capital improvements; and capitalized interest related to DAYTONA Rising. All of these are outlined in the earnings news release and are included in our GAAP to non-GAAP reconciliation, where appropriate.
Looking at the income statement, admissions revenue for the fourth quarter decreased to $37.9 million, largely attributable to lower attendance and average ticket prices with events at Chicagoland impacted by inclement weather. Partially offsetting the decrease was the net impact of scheduled changes.
For the quarter, the average ticket price for our comparable Sprint Cup events decreased approximately 3%. The increase in motorsports-related revenues to $135.1 million was primarily attributable to the increased TV broadcast rights. Increased sponsorship was offset by lower suite and hospitality sales and media advertising for MRN. ISC's domestic television broadcast and ancillary rights were $91.1 million for the quarter and $292.5 million for the year.
The decrease in food, beverage and merchandise revenue to $12.3 million is primarily attributable to lower attendance at Kansas, Richmond and Talladega events and declines in catering for corporate hospitality. While concession per caps were down approximately 4% for the quarter, we're pleased that for the full year, per caps increased over 7%.
Prize and point fund monies and NASCAR's sanction fees increased to $52.6 million. The increase is due to higher television broadcast rights for the NASCAR Sprint Cup Nationwide and Camping World Truck series events as standard NASCAR sanctioning agreements require a specific percentage of television broadcast rights be paid to competitors. The previously discussed schedule changes also contributed to the increase. Motorsports-related expense increased slightly to $38.5 million. The increase is largely related to the previously discussed schedule changes, partially offset by efforts to reduce scalable event-related cost.
Food, beverage and merchandise expense decreased to $9.4 million, largely due to improved margin on concession sales for events held during the quarter. This improvement is largely a result of streamlined menus aimed at reducing overall food cost by leveraging purchasing power while elevating quantity and delivery.
General and administrative expense was comparable to the same period in the prior year. Increases in certain administrative costs, including merit pay and marketing and consulting cost incurred for DAYTONA Rising, were offset by decreases in previously discussed carrying costs related to the Staten Island property.
Depreciation and amortization expense increased to $27.3 million for the quarter, largely attributable to shortening the service lives of certain assets related to DAYTONA Rising and capacity management initiatives. Excluding these charges, depreciation expense decreased $500,000 compared to the fourth quarter of fiscal 2012.
Specific to DAYTONA Rising, accounting conventions during the construction period and also when DAYTONA comes online will impact our reported financials. Based on our current plans for DAYTONA Rising, we have identified existing assets that are expected to be impacted by the redevelopment and will require mostly noncash charges for accelerated depreciation or loss on asset retirements, totaling approximately $50 million over the expected 26-month project time span. In addition, we will have significant capitalized interest through the project, which I will discuss shortly.
Losses on asset retirements increased to $6.3 million, primarily attributable to noncash charges for the removal of certain assets not fully depreciated in connection with ISC's capacity management initiative.
Interest income was comparable to the same period of the prior year. As mentioned in our earnings release, we sold our Staten Island property and we are holding a secured mortgage of $72.5 million, which includes annual interest of 7% on outstanding balances. However, we have accounted for this transaction using the cost-recovery method and we are deferring recognition of any profits and interest income until the final payment is made, which will be in the second quarter of 2016.
Interest expense increased to $3.6 million, with interest on our private placements partially offset by increased capitalized interest related to DAYTONA Rising and a 0 balance on our revolving credit facility.
Equity and net income from equity investments of approximately $2.3 million represents our 50% equity interest in the Hollywood Casino at Kansas Speedway. For the full year, fiscal 2013 equity and net income was $9.4 million. As mentioned on our previous earnings call, in June, the casino received a property tax credit as a result of successfully negotiating a resolution to its property tax appeal. Our share of that resolution attributable to prior year's property taxes contributes approximately $1.1 million to our fiscal 2013 results. During fiscal 2013, cash distributions from the casino to ISC totaled $21.5 million, of which $8.2 million is recorded as a distribution of profits and $13.3 million as a return of capital in the cash flow statement. We received another $4.5 million in December 2013.
Net income for the 3 months ended November 30, 2013 was $17.2 million or $0.37 per diluted share on approximately 46.5 million shares outstanding. However, when you exclude losses associated with the retirements of certain long-lived assets, as well as an accelerated depreciation driven by certain shortened service lives for certain assets in connection with DAYTONA Rising, capacity management initiatives and other capital improvements, marketing and consulting cost incurred for our DAYTONA Rising project and capitalized interest related to DAYTONA Rising, we posted earnings of $0.55 per diluted share for 2013 fiscal fourth quarter compared to our non-GAAP net income for the 2012 fourth quarter of $0.61 per diluted share.
As for the balance sheet and future liquidity, at November 30, our combined cash and cash equivalents totaled $172.8 million and shareholders' equity was $1.3 billion. Our deferred income was approximately $35.7 million, which was below this time last year, largely due to the timing of billing for partnership agreements and the ticket renewal schedule for certain 2014 events.
At the end of the quarter, total debt was approximately $274.5 million, which includes approximately $165 million in senior notes. $58.9 million in tip bonds associated with Kansas Speedway, $49.9 million for the -- for our term loan on our headquarter's office building and $660,000 in revenue bonds.
As it relates to capital spending, for the fiscal year 2013, we spent approximately $85.5 million on capital expenditures for projects at our existing facilities, which include spending for the DAYTONA Rising project.
In June of this past year, our board endorsed a capital investment plan for 2013 through 2017 not to exceed $600 million over that period. The 5-year plan encompasses CapEx for all of our 13 facilities, including DAYTONA Rising and any equity commitments to undertake ONE DAYTONA. The majority of DAYTONA Rising's construction will occur in fiscal 2014 and '15. We estimate ISC's total CapEx will be approximately $200 million and $180 million in fiscal 2014 and fiscal 2015, respectively. ,
With a target completion date for DAYTONA Rising in January 2016, spending will then decrease significantly with an expectation of capital expenditures for projects at all of ISC's existing facilities to be between $60 million and $70 million annually in fiscal 2016 and '17.
While we will leverage our revolver on a short-term basis, we will not take on additional long-term debt to fund DAYTONA Rising. However, accounting rules require that we capitalize a portion of the interest on our outstanding debt during the construction period. We estimate we will recognize approximately $22 million of cap I [ph] from 2014 through 2016, with roughly half being recorded in 2015.
In terms of our 2014 financial outlook, our 2014 events schedule will be similar to 2013. The earnings release provides details of major events by series and by quarter.
For 2014, we anticipate total revenues to range between $615 million and $630 million. Our expectation for the year, aside from the 3.9% increase in television rights fees for NASCAR's top 3 racing series to approximately $302.8 million, is for admissions, corporate and food and beverage and merchandise revenues to remain stable year-over-year. The low end of the range contemplates a similar decrease in consumer-related revenues that we experienced in 2013.
Revenue stability year-over-year for our core business is consistent with what we were seeing at this early stage of 2014. While advanced sales for the Daytona 500 are in line with achieving our expectations, as we have discussed in the past, we anticipate that late buying trends will continue and we were just entering a very active segment of the selling cycle with many promotions still to be activated.
Beyond Speedweeks, sales are encouraging. But again, we are in very early stages in those sales cycles. We expect the average ticket price for our events will be flat year-over-year.
From a marketing partnership perspective, we sold all of our 2013 NASCAR Sprint Cup and Nationwide series event entitlements and ended within 1% of our gross marketing partnership target for the year. The number of Fortune 500 companies investing in NASCAR remains higher than in any other sport. Nearly 1 in 4 Fortune 500 companies use NASCAR as part of their marketing mix. For the second consecutive year, the number of Fortune 500 companies involved in NASCAR increased, yielding an 8% improvement over 2008.
For fiscal 2014, ISC has agreements in place for approximately 72% of its gross marketing partnership revenue target. We have 3 of our 20 NASCAR Sprint Cup event entitlements and 8 of our 15 NASCAR Nationwide series entitlements either open or not announced. This is compared to last year at this time when we had approximately 76% of our gross marketing partnership revenue target sold and had entitlements for 1 Sprint Cup and 3 NASCAR Nationwide entitlements either open or not announced. We were very well positioned with corporate sales agreements in place and the number of major event entitlements secured as we entered 2013.
While we were slightly behind these marks as we entered the 2014 season, we compare well with the trends of previous years. As well, we are in discussion with prospective partners on over half of the open entitlements.
With regard to expenses, we expect certain increases for the year, including an approximate 2.2% increase in NASCAR's sanction fees and price and point fund monies, primarily attributable to increased television broadcast rights.
Additionally, while we have sustained cost reductions removed from the business in prior years, we expect approximately 3.5% increase to motorsports in general and administrative expenses, primarily related to employee costs and strategic spend supporting consumer marketing initiatives. As previously discussed, our strategies targeting food quality, guest experience and streamlined menus in our catering and concessions business have been successful, and we expect current margins to be maintained in fiscal 2014.
As a result, we currently expect our full year EBITDA margin to range between 30.5% and 31.5% of total revenues. And with depreciation and amortization expense at approximately $79 million on a non-GAAP basis, we expect our full year operating margin for 2014 to be between 17.5% and 19% of total revenues.
Our effective tax rate in 2014 is expected to be approximately 38.5% to 39.5% for the full year.
Our current expectation of cash distributions from the casino to ISC will be in the $18 million to $20 million range. Equity income from the casino is expected to be approximately $7 million to $9 million. The low end of the projection for 2014 include the penalty equal to 1% of gross gaming revenue if the casino has not commenced construction on a hotel development within 2 years of the February 2012 opening.
However, as John mentioned, the unified government recently agreed to extend the pre-penalty period. When considering expectations year-over-year, remember the results from the casino for fiscal 2013 included approximately $1.1 million related to a onetime property tax refund not recurring in 2014.
Based on all the above assumptions, we expect 2014 full year non-GAAP earnings to be between $1.30 and $1.50 per diluted share. Our fiscal 2014 non-GAAP earnings per share guidance excludes any income tax -- income statement impact attributable to the DAYTONA Rising project, including pre-opening, marketing and consulting costs, non-capitalized costs and accelerated depreciation for removal of assets not fully appreciated and capitalized interest.
Also excluded from non-GAAP earnings are any costs related to legal settlements, gains and loss on sale of fixed assets, accelerated depreciation and loss on asset retirements or relocations, which could be recorded as part of other capital improvement projects.
In closing, there is a tremendous opportunity for the company to grow stronger as we continually -- continue to successfully execute our strategic initiatives, particularly DAYTONA Rising. Its importance to us in the industry cannot be understated. We maintain that the rationale for this investment is straightforward; to build a deeper emotional bond between our customers, fans and corporate partners at Daytona. This will not only ensure our crown jewel property to remain relevant, but can also take our company and the sport to renewed heights.
We are focusing on our brand while elevating the sport's prominence. As we discussed last quarter, we estimate DAYTONA Rising, upon completion, will provide an immediate incremental lift in Daytona's revenues of approximately $20 million and an EBITDA lift of approximately $50 million, with a mid-single digit growth rate. We anticipate the project to be accretive to ISC's earnings within 3 years of completion and this doesn't include the intangibles, the positive long-term benefits to our sport, the potential lift we'll have to drive future broadcast revenues or how it will generate new interest across all our motorsports facilities.
Our long-term outlook has great potential. We have our largest revenue source secured for the next 11 years. The sport's most important facility, the one that shaped the industry into what it is today will carry on its tradition for decades to come. And we continue to strengthen our financial position while we explore and undertake ways to add new revenue streams to our business.
We look forward to speaking with you on our next earnings call in April. And with that, I'll turn it back over to the operator who will lead us to the Q&A portion of the call. Operator, please?
Question-and-Answer Session
Operator
[Operator Instructions] Your first question comes from the line of Steve Altebrando with Sidoti & Company.
Stephen Altebrando - Sidoti & Company, LLC
I was wondering if there's a timeline in terms of providing color on the escalators on the TV deal?
Daniel W. Houser
Well, Steve, we were certainly helpful that we were going to be telling you that either today or before now, I have reason to believe that it will be in the first quarter. I know that the discussions there between the broadcasters and NASCAR are ongoing. And it's my belief that they are reaching some conclusions there. But I think that it's certainly not something that we know at this point. I think that we will be -- we'll see a pretty steady curve off of the final year numbers. That's what I expect to see, but we'll have some official news for you, hopefully, during Q1.
Stephen Altebrando - Sidoti & Company, LLC
Okay. And then just lastly, I know you touched on the script a bit, but looks like you're at 72% of your gross marketing target, which, I believe, is down a few hundred basis points year-over-year, is this -- are you seeing any -- some weakness in that front or is that timing or maybe the target's higher year-over-year?
Daniel W. Houser
It's really a timing thing. Like I said, while as of today compared to last year, we're on a little better position on entitlements. We got several of them in pretty good discussions. We're excited about that. And it's really just timing a lot of things, similarly with deferred revenue and receivables and things like that.
Operator
[Operator Instructions] Your next question comes from the line of Barry Lucas with Gabelli & Company.
Barry L. Lucas - G. Research, Inc.
I've got a couple of -- Dan, as I look back at the numbers for 4Q and think about your comments going forward on the -- particularly on the admission side where you say that we're going to see some more stability, it was a degradation in admissions revenue by about 300 basis points. And I'm just wondering how much of that is attributable to Chicagoland either the timing or the weather?
Daniel W. Houser
Well, Chicagoland was the most significant piece of it for sure. And it's tough for those guys up there because they've got a great market. They've got a great spot on the calendar, but they've been impacted by the weather for seems like a few years now. So that one was a really tough one and was the biggest impact and -- but as John said in his comments, we continue to work on cracking the code at a few other facilities. We're excited that -- with where we're going on some of our capacity management initiatives that we really think that they're aimed at creating a better experience overall and that -- we're hopeful that word-of-mouth with that improved experience will really help in those markets and start to build some attention on advanced ticket sales. So that's our kind of intermediate term plan, and we feel optimistic about that for next year.
Barry L. Lucas - G. Research, Inc.
Well, let me see if I can connect some dots here. Because you saw -- I think the -- some of the conversations started with a solid attendance for the 24 Hours Daytona kind of an upbeat discussion about advance tickets for the 500. And I thought I saw online that average ticket prices -- average ticket pricing is up about 2.5%, 3% for the 500. So if I look through the other end of the telescope, why wouldn't you be more upbeat about the other revenue sources beyond TV rights given those issues and a slightly better economy, higher truck sales, better construction residential house, all of those things might suggest that you can actually do a little bit better than just flat?
Daniel W. Houser
Well, we would love to see that and we're certainly ready -- we got teams ready to sell those tickets, believe me, online, on the call center, at the ticket booth. From our -- as John said in his comment, I think what we have seen so far with the consumer is they're kind of -- they're feeling better generally, their feelings about their own situation or maybe not as bullish. And I think that there's a lot of pent-up demand for some of those more essential items that haven't been -- that have been waiting like -- probably vehicles and car and homes and things like that. We're hopeful we start to see a real tailwind with our demo. We're not sure that we see that yet. There's certainly great things lining up for this year. There's many, many things that are -- that John talked about that NASCAR's doing that really can fuel interest and excitement in the sport this year and give our folks at the intermediate tracks something promote against for the Chase. And so we're hopeful that these things all play out and that it will be a great year. We are just -- while we may sound a little bearish, we've been in this cycle for a few years now, and we would rather underpromise and overdeliver than the other way around. We feel pretty comfortable with the guidance that we've we think we've got a good year ahead.
Barry L. Lucas - G. Research, Inc.
Last one for me, Dan. Could you just recap those projections for DAYTONA Rising? The incremental revenue and EBITDA, is that all in fiscal '16?
Daniel W. Houser
Yes, we're -- that's what we hope for, that we see that out of the gate. We think that we definitely can drive a sellout that year and that we're already -- a lot of energy is going into the corporate side for that inaugural so that we're well positioned there. So we're hopeful that that's what were able to do out of the gate and we can then build upon that success.
Barry L. Lucas - G. Research, Inc.
That was $20 million in revenues and $15 million in EBITDA?
Daniel W. Houser
Yes.
Operator
And there are no further questions at this time. I would now like to turn the conference back over to John Saunders for any closing remarks.
John R. Saunders
We just want to thank all of you for joining us today for this fourth quarter and guidance call and look forward to talking to you at the end of the first quarter 2014. So once again, thanks for joining and have a great day.
Operator
Thank you for participating in today's conference. You may now disconnect.
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