<PAGE>   1
 
================================================================================
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                                   FORM 10-K
 
                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
 
FOR FISCAL YEAR ENDED: DECEMBER 31, 1996         COMMISSION FILE NUMBER: 0-28044
 
                            PENSKE MOTORSPORTS, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<C>                                            <C>
                   DELAWARE                                      51-0369517
         (STATE OR OTHER JURISDICTION                          (IRS EMPLOYER
      OF INCORPORATION OR ORGANIZATION)                    IDENTIFICATION NUMBER)
 
            13400 WEST OUTER DRIVE
                 DETROIT, MI                                     48239-4001
   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                      (ZIP CODE)
</TABLE>
 
       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (313) 592-5258
                            ------------------------
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
 
<TABLE>
<CAPTION>
                                                                 NAME OF EACH EXCHANGE
          TITLE OF EACH CLASS                                     ON WHICH REGISTERED
          -------------------                                    ---------------------
<S>                                                     <C>
COMMON STOCK, PAR VALUE $0.01 PER SHARE                          NASDAQ NATIONAL MARKET
</TABLE>
 
                            ------------------------
 
        SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT: NONE
                            ------------------------
 
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES ACT OF 1934 DURING THE
PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED
TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR
THE PAST 90 DAYS.     [X] YES     [ ] NO.
 
INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K.  [[X]]
 
THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON-AFFILIATES OF THE
REGISTRANT WAS APPROXIMATELY $114,689,791 BASED UPON THE CLOSING SALES PRICE OF
THE REGISTRANT'S COMMON STOCK ON THE NASDAQ NATIONAL MARKET AT MARCH 21, 1997,
OF $30.50 PER SHARE. AS OF MARCH 21, 1997, 13,241,798 SHARES OF REGISTRANT'S
COMMON STOCK, $.01 PAR VALUE PER SHARE, WERE OUTSTANDING. PORTIONS OF THE
REGISTRANT'S DEFINITIVE PROXY STATEMENT TO BE FILED FOR ITS 1997 ANNUAL MEETING
OF STOCKHOLDERS ARE INCORPORATED BY REFERENCE INTO PART III OF THIS FORM 10-K.
 
================================================================================
<PAGE>   2
 
                               TABLE OF CONTENTS
 
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                                                                           PAGE
                                                                           ----
<S>        <C>                                                             <C>
PART I
Item 1.    Business....................................................      2
Item 2.    Properties..................................................     10
Item 3.    Legal Proceedings...........................................     10
Item 4.    Submission of Matters to a Vote of Security Holders.........     10
           Supplementary Item: Executive Officers of Registrant........     10
PART II
Item 5.    Market for the Registrant's Common Equity and Related
           Stockholder Matters.........................................     11
Item 6.    Selected Financial Data.....................................     12
Item 7.    Management's Discussion and Analysis of Financial Condition
           and Results of Operation....................................     13
Item 8.    Financial Statements and Supplementary Data.................     18
Item 9.    Changes in and Disagreements with Accountants on Accounting
           and Financial Disclosure....................................     30
PART III
Item 10.   Directors and Executive Officers of the Registrant..........     30
Item 11.   Executive Compensation......................................     30
Item 12.   Security Ownership of Certain Beneficial Owners and
           Management..................................................     30
Item 13.   Certain Relationships and Related Transactions..............     30
PART IV
Item 14.   Exhibits, Financial Statement Schedules, and Reports on Form
           8-K.........................................................     30
Signatures.............................................................     33
</TABLE>
 
                                        1
<PAGE>   3
 
                                     PART I
 
ITEM 1: BUSINESS
 
     Penske Motorsports, Inc. ("PMI") is a leading promoter and marketer of
professional motorsports in the United States. PMI owns and operates, through
its subsidiaries, the Michigan Speedway ("Michigan Speedway") in Brooklyn,
Michigan and the Nazareth Speedway ("Nazareth Speedway") in Nazareth,
Pennsylvania, and is constructing the California Speedway, a superspeedway near
Los Angeles, California which is expected to be completed and in operation
during the 1997 racing season ("California Speedway"). PMI also produces and
markets motorsports-related merchandise such as apparel, souvenirs and
collectibles, through its wholly-owned subsidiary, Motorsports International
Corp. ("MIC"). In addition, through its wholly-owned subsidiaries, Competition
Tire West, Inc. ("Competition Tire West") and Competition Tire South, Inc.,
("Competition Tire South" and, together with Competition Tire West, "Competition
Tire"), PMI distributes and sells Goodyear brand racing tires in the midwest and
southern regions of the United States.
 
     Unless the context otherwise requires, references herein to the "Company"
mean Penske Motorsports, Inc. ("PMI") and its subsidiaries considered as one
enterprise. "NASCAR(R)" and "Winston Cup(R)" are registered trademarks and
service marks of the National Association for Stock Car Auto Racing, Inc.,
("NASCAR").
 
     PMI promoted a total of nine major racing events at Michigan Speedway and
Nazareth Speedway in 1996 and expects to promote a total of fifteen major racing
events at Michigan Speedway, Nazareth Speedway, and California Speedway in 1997.
Of the nine 1996 events, six were stock car races, four of which were sanctioned
by NASCAR, two were Indy car races sanctioned by Championship Auto Racing Teams,
Inc. ("CART"), and one was a Craftsman Truck Series race sanctioned by NASCAR.
NASCAR events promoted by PMI in 1996 included two NASCAR races associated with
the Winston Cup Series, two races associated with the NASCAR Busch Grand
National Series, and one race associated with the NASCAR Craftsman Truck Series.
 
     On June 22, 1997, PMI will promote the California Speedway's inaugural race
which will be a NASCAR Winston Cup race. PMI will also promote at the California
Speedway the season finale for the PPG CART World Series on September 28, 1997.
In addition, on October 18 and 19, 1997, PMI will promote at the California
Speedway a NASCAR Busch Grand National event and a Craftsman Truck Series
Division event. The California Speedway will have 70,948 grandstand seats, 71
terrace suites and 55 chalets. The California Speedway is located 52 miles east
of downtown Los Angeles, 15 miles west of downtown San Bernardino and 30 miles
northeast of central Orange County. The Company expects to draw spectators from
throughout southern California, an area with a total population that exceeds
17.0 million people. The California Speedway is similar in design to the
Michigan Speedway, a premier superspeedway which is the home of the fastest 500
mile auto race (the 1990 Marlboro 500 at an average winning speed of 189.727
mph) and the world Indy car speed record (Jimmy Vassar's 234.665 mph qualifying
lap at the 1996 Marlboro 500).
 
     Management believes that spectator demand for its Winston Cup events at
Michigan Speedway exceeds existing permanent seating capacity, which was 98,276
at December 31, 1996, excluding infield capacity. Prior to the commencement of
the 1997 racing season, PMI expects to add approximately 8,500 grandstand seats
at the facility. Michigan Speedway also has 37 suites, 40 hospitality chalets
and 10 grandstand pavilions for corporate hospitality. PMI also expects to add
10,687 grandstand seats at Nazareth Speedway prior to the commencement of the
1997 racing season. Nazareth Speedway currently has permanent seating capacity
of 35,654, excluding infield capacity. In addition, PMI expects to add 36,000
new grandstand seats at the California Speedway prior to the year 2002. PMI has
received the necessary government approvals for these additional seats as well
as approval for a total capacity of 107,000 spectators at the California
Speedway.
 
COMPANY STRATEGY
 
     The Company's strategy is to continue to increase revenue and profitability
by hosting premier weekend events, completing the construction of the California
Speedway, expanding its existing seating capacity and
 
                                        2
<PAGE>   4
 
otherwise improving its facilities, increasing its sales of racing-related
merchandise and pursuing opportunities to expand into other markets. The key
elements of this strategy are as follows:
 
     -  Hosting Premier Weekend Events. The Company plans its racing events, and
        designs and maintains its facilities, to create an environment which
        maximizes the spectators' entertainment experience. Management believes
        that associating a less prestigious race with a Winston Cup or PPG CART
        World Series event helps to increase overall weekend attendance at the
        Company's facilities, in part by attracting spectators traveling longer
        distances. For example, in 1996, the Company hosted an ARCA-sanctioned
        race on the Saturday preceding the Miller 400, which is a Winston Cup
        event, and on the Saturday preceding the Marlboro 500, which is a
        CART-sanctioned event. As a result of this strategy, the Company
        generated virtually all of its 1996 speedway revenue in six weekends.
 
        To maximize the spectators' entertainment experience, the Company
        designs and maintains its facilities to maximize the comfort, view and
        amenities offered to the spectators. To that end, upon acquiring
        Michigan Speedway in 1973, management embarked upon a series of capital
        improvements, including the construction of additional permanent
        grandstand seating, new hospitality suites, improvements to the
        concession stands and innovative corporate entertainment facilities. At
        Michigan Speedway, spectators can see the entire track from the
        grandstands due to the banking of the track and the absence of
        obstruction in the infield. Following the purchase of Nazareth Speedway
        in 1986, PMI implemented a similar strategy by converting Nazareth
        Speedway from a dirt track to a one mile asphalt speedway and
        constructing grandstands and corporate entertainment facilities. In
        addition, in 1996 PMI constructed new food concessions and restroom
        facilities at Michigan Speedway and Nazareth Speedway to increase the
        comfort of race spectators. Capitalizing on its successful experience at
        Michigan Speedway and Nazareth Speedway, PMI has designed the California
        Speedway with state-of-the-art seating, concessions and amenities.
 
        Expanding corporate entertainment at racing events also offers the
        opportunity for increased revenue. PMI improved its corporate
        entertainment facilities by expanding its corporate concourses, which
        can currently entertain up to 5,000 people, and expanded and upgraded
        the chalet village at Michigan Speedway for the 1996 season. PMI
        currently has three full-time marketing employees who spend the majority
        of their time marketing Michigan Speedway and Nazareth Speedway events
        to corporate customers. In addition, PMI currently has three full-time
        marketing employees who spend the majority of their time marketing the
        California Speedway events to corporate customers.
 
        No speedway promotes more than two Winston Cup races per year. In
        addition, no speedway generally promotes more that one CART-sanctioned
        event per year. PMI will promote two Winston Cup events at Michigan
        Speedway in 1997 and one Winston Cup event at the California Speedway in
        1997. In addition, PMI will promote one CART-sanctioned event at each of
        Michigan Speedway, California Speedway, and Nazareth Speedway in 1997.
        Management of the Company intends to seek additional racing events for
        its facilities.
 
     -  Completion of Construction of the California Speedway. The California
        Speedway, a two mile banked superspeedway, is built on approximately 529
        acres located in the southwest portion of San Bernadino County, south of
        the foothills of the San Gabriel Mountains. The Company expects the
        construction of the California Speedway to be completed prior to the
        scheduled inaugural race on June 22, 1997. The superspeedway is located
        less than five miles from the I-15 and I-10 freeway interchange and is
        approximately 52 miles east of downtown Los Angeles, 15 miles west of
        downtown San Bernadino and 30 miles northeast of central Orange County.
        The California Speedway is modeled after Michigan Speedway, which is a
        premier superspeedway and home of the fastest 500 mile Indy car auto
        race and the Indy car speed record. The California Speedway will have
        70,948 grandstand seats, 71 terrace suites and 55 chalets.
 
        The Company believes that the California Speedway will draw spectators
        not only from Los Angeles, San Bernardino, Riverside and Orange
        Counties, but from throughout the Southern California region. The total
        population in the Southern California area exceeds 17.0 million people.
 
                                        3
<PAGE>   5
 
     -  Continued Expansion of Michigan Speedway and Nazareth Speedway. Since
        the acquisition of Michigan Speedway and Nazareth Speedway, PMI has
        constructed more than 109,000 grandstand seats at the two facilities.
        Management believes that spectator demand for its Winston Cup events
        continues to exceed the Company's existing permanent grandstand seating
        capacity at Michigan Speedway. PMI plans to continue to expand by adding
        permanent grandstand seating and luxury suites at both of Michigan
        Speedway and Nazareth Speedway. During the 1996 season, PMI added
        approximately 10,000 grandstand seats at Michigan Speedway and 5,000
        grandstand seats at Nazareth Speedway. In addition, during the 1996
        season, PMI added eight corporate suites along the pit area on the
        inside of the track at Michigan Speedway, all of which are committed to
        corporate customers for terms of no less than three years. Prior to the
        commencement of the 1997 racing season, PMI expects to add approximately
        8,500 grandstand seats at Michigan Speedway and approximately 10,687
        grandstand seats at Nazareth Speedway.
 
     - Sales of Merchandise, Tires and Accessories. The Company sells
       merchandise, such as apparel, souvenirs and collectibles, directly to
       spectators both at its facilities and at other NASCAR-sanctioned and
       CART-sanctioned events, to retail customers through its catalogue sales
       and through direct sales to dealers. The Company also rents "show cars"
       for promotional events to corporate customers. In addition to the
       anticipated incremental contribution to such revenue to be generated by
       the California Speedway, the Company expects to increase revenue derived
       from third party merchandisers as the number of merchandisers at the
       Company's races increase. The Company is also exploring additional
       distribution channels, such as the Internet.
 
       The Company also engages in the wholesale and retail sale and
       distribution of Goodyear brand racing tires for various types of racing
       events. The Company's strategy is to continue to increase sales of racing
       tires through the favorable reputation of the Goodyear tire, as well as
       capitalizing on the growing popularity of motorsports in the United
       States.
 
     - Pursuing Expansion Opportunities. The Company intends to consider
       expansion opportunities as they become available, including growth by
       acquisition. For example, in 1995 and 1996 the Company acquired
       approximately 4.0% of the issued and outstanding common stock of North
       Carolina Motor Speedway Inc. ("NCMS"), which owns and operates a
       superspeedway in Rockingham, North Carolina. NCMS hosted two Winston Cup
       events in the 1996 season and will host two Winston Cup events in the
       1997 season. PMI and the majority shareholder of NCMS each has reciprocal
       rights of first refusal on the other's shares of stock of NCMS.
 
                                        4
<PAGE>   6
 
EVENTS AND FACILITIES
 
Events
 
     PMI's operations in 1996 consisted principally of promoting racing and
related events conducted at its Michigan Speedway and Nazareth Speedway; 1997
operations will also include promotion of such events at the California
Speedway.
 
     PMI's 1997 scheduled racing events are as follows:
 
<TABLE>
<CAPTION>
        DATE                  RACE                           CIRCUIT                    FACILITY
        ----                  ----                           -------                    --------
    <S>            <C>                            <C>                              <C>
    April 27       Bosch Spark Plug Grand Prix    PPG CART World Series            Nazareth Speedway
                   Presented by Toyota
    May 18         CoreStates Advantage 200       NASCAR Busch Series Grand        Nazareth Speedway
                                                  National Division
    June 14        Jasper Engines 200             ARCA                             Michigan Speedway
    June 15        Miller 400                     NASCAR Winston Cup Series        Michigan Speedway
    June 21        Auto Club 200                  NASCAR Winston West Series       California Speedway
    June 21        IROC Round III                 IROC                             California Speedway
    June 22        California 500 Presented by    NASCAR Winston Cup Series        California Speedway
                   NAPA
    June 29        NAPA Auto Care 200             NASCAR Craftsman Truck Series    Nazareth Speedway
    July 26        ARCA 200                       ARCA                             Michigan Speedway
    July 27        IROC Series Round IV           IROC                             Michigan Speedway
    July 27        US 500 Presented by Toyota     PPG CART World Series            Michigan Speedway
    August 16      Detroit Gasket 200             NASCAR Busch Series Grand        Michigan Speedway
                                                  National Division
    August 17      DeVilbiss 400                  NASCAR Winston Cup Series        Michigan Speedway
    September 27   To Be Announced                                                 California Speedway
    September 28   Marlboro 500 Presented by      PPG CART World Series            California Speedway
                   Toyota
    October 18     To Be Announced                NASCAR Craftsman Truck Series    California Speedway
    October 19     To Be Announced                NASCAR Busch Series Grand        California Speedway
                                                  National Division
</TABLE>
 
     NASCAR grants sanctioning agreements on an annual basis for the next
succeeding year, while CART grants multiple year sanctioning agreements. Each
CART-sanctioned car race at PMI's facilities is scheduled through 1998. At
Michigan Speedway, the Company has hosted two Winston Cup races annually since
1973. In addition, the Company has hosted at least one CART-sanctioned event
since 1979. In addition to Michigan Speedway and Nazareth Speedway, management
has obtained a sanction agreement for an annual CART-sanctioned race at the
California Speedway through 1998 and for a NASCAR-sanctioned Winston Cup race at
the California Speedway in 1997.
 
Facilities
 
     MICHIGAN SPEEDWAY. Michigan Speedway is located in Brooklyn, Michigan,
approximately 70 miles southwest of Detroit and 18 miles southeast of Jackson.
Michigan Speedway has 98,276 grandstand seats, 37 suites, a chalet village
containing 40 hospitality tents and 10 grandstand pavilions. In 1996, PMI added
approximately 10,000 grandstand seats and eight corporate suites along the pit
area on the inside track at Michigan Speedway, which suites are committed to
corporate customers for terms of not less than three years.
 
     The speedway and all adjacent parking areas consist of approximately 977
acres, all of which is owned by PMI. Michigan Speedway is a premier
superspeedway with a full view of the track from the grandstand seats. Michigan
Speedway is the home of the fastest 500 mile auto race (the 1990 Marlboro 500 at
an average
 
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<PAGE>   7
 
winning speed of 189.727 mph) and the world Indy car speed record (Jimmy
Vassar's 234.665 mph qualifying lap at the 1996 Marlboro 500). Michigan Speedway
is a two-mile, tri-oval with 18 degree banking in the corners, 12 degrees on the
front straightaway and five degrees on the back straightaway. The track is 73
feet wide with a 10-foot apron on the turns and 45 feet wide with a 12-foot
apron on the straightaways. The backstretch is 2,242 feet in length. The pit
road is 2,299 feet long, 50 feet wide and contains space for 44 individual pit
areas. While PMI does not charge its customers for parking, the parking areas
can accommodate 50,000 cars. The Michigan Speedway oval was resurfaced in the
spring of 1995. PMI acquired Michigan Speedway in 1973.
 
     NAZARETH SPEEDWAY. Nazareth Speedway is located in Lower Nazareth Township,
Pennsylvania, approximately 12 miles from Allentown, 50 miles from Philadelphia
and 80 miles from New York City. Nazareth Speedway sits on approximately 107
acres and on race days uses more than 183 acres of land, some of which is
leased. Nazareth Speedway has permanent seating capacity of 35,654 (excluding
infield admission, temporary seats and general admission), including
approximately 5,000 grandstand seats which were added in 1996. The track is a
one mile speedway. Turn one is banked three degrees, turn two is banked four
degrees and turns three and four are banked six degrees. The track width varies
from 50 feet on the front stretch to 60 feet on the back stretch. Nazareth
Speedway has an elevation change of 34 feet. Nazareth Speedway also has an 18
foot wide warm up lane encompassing the entire inside of the track. This
provides a racing surface for drivers, traveling slower than race speeds, to
warm-up their engines and tires without interfering with faster cars. PMI
acquired Nazareth Speedway in 1986.
 
     CALIFORNIA SPEEDWAY. The California Speedway will have 70,948 grandstand
seats to which PMI expects to add 36,000 grandstand seats by the year 2002. PMI
has received the necessary governmental approvals for these additional seats as
well as approval for a total capacity of 107,000 spectators. In addition to its
grandstand seats, the California Speedway will have 71 terrace suites and 55
chalets. The California Speedway is also expected to generate additional revenue
from approximately 25 billboards, its sponsors and other concession and
merchandise revenue. The California Speedway consists of a two mile, tri-oval
track and is banked in a fashion similar to the Michigan Speedway facility.
 
     The infield area of the California Speedway contains a 44 space pit area,
100 auxiliary garages with team transport truck and motor coach parking, VIP
parking, press and team parking, restrooms, a medical care center and a helistop
for emergency medical evacuation. Each garage building has restroom and meeting
facilities. Shower facilities are also provided within the garage area for
driver and team use. Adjacent to the pit area, there is a two-story structure
housing infield suites on the upper level and work areas on the lower level. The
upper level includes 71 terrace suites, each capable of accommodating up to 40
persons to view races. Rooftop viewing areas will also be provided for the
suites. The lower level of the infield suite building is expected to house
approximately 54 units designed for miscellaneous functions.
 
     There will also be two scoring pylons at both ends of the oval area, with a
third scoring pylon located in the center of the facility. Parking on the
infield is expected to accommodate approximately 1,500 recreation vehicles.
Grandstands are being constructed along the south side of the California
Speedway. A concourse level is planned for the grandstand structure to
facilitate exiting. Concessions will be sold from the concourse, as well as at
ground level. Entry to the grandstands will be monitored through two ticket
entry gates. Atop the center of the grandstands, a 50 foot long race control
tower is being added to accommodate press rooms for print, television and radio
personnel, and race control and race directing rooms. The race control tower is
expected to be accessed by an elevator and two sets of stairs.
 
     The California Speedway includes a chalet village of hospitality tents with
a main kitchen/commissary facility for food services at the eastern end of the
grandstand area and a "retail midway" to the south of the main grandstand,
immediately outside of the gate entries. This midway will consist of large
concession trailers which travel the racing circuit selling clothing and
souvenirs for the various racing teams and sponsors. Four first aid stations are
located in the grandstand area.
 
     The California Speedway also includes a 10,000 square foot, one-story
administration building which houses the corporate office for the California
Speedway. In addition, adjacent to the administration building, the California
Speedway will include a second helistop, which will serve as a base for the
helicopter providing
 
                                        6
<PAGE>   8
 
traffic control and reporting. The California Speedway maintenance offices and
equipment are located in an 18,000 square foot maintenance building.
 
     While PMI does not charge its customers for parking, a total of 31,250
parking spaces will surround California Speedway for those seated within the
grandstand areas. Additionally, 125 spaces have been designated for bus parking.
This equates to a ratio of slightly more than one parking space for each three
grandstand seats. The California Speedway will also accommodate a Metrolink
station in the northeastern portion of the parking area, along the Atkinson
Topeka & Santa Fe rail line adjacent to the California Speedway, which is a
passenger rail line connecting the area with downtown Los Angeles, as well as to
Oceanside/San Diego, Oxnard/Camarillo and Lancaster.
 
     The development of the California Speedway commenced in April 1994 upon the
execution of an agreement between Michigan Speedway and Kaiser Ventures Inc.
(the "1994 Development Agreement") to pursue the development, construction and
operation of the California Speedway. Under the terms of the 1994 Development
Agreement, Penske Performance, Inc., and Kaiser Ventures Inc. ("Kaiser")
contributed funds for investigative, predevelopment and development activities
for the California Speedway.
 
     The transactions contemplated under the 1994 Development Agreement were
consummated on November 22, 1995. At the closing of these transactions, PMI
acquired from Kaiser all of the outstanding stock of Kaiser's wholly-owned
subsidiary, Speedway Development Corporation, which owned the property on which
the California Speedway is being built. In exchange for the Speedway Development
Corporation stock, Kaiser received preferred stock of PMI, which was converted
into Common Stock in 1996. Concurrent with the Kaiser transaction, Facility
Investments, Inc., a wholly-owned subsidiary of International Speedway
Corporation, acquired a 20% interest in PSH Corp., which owns approximately 59%
of the outstanding Common Stock of the Company. The construction of the
California Speedway began in the fourth quarter of 1995 and is expected to be
completed prior to the scheduled June 1997 Winston Cup event.
 
COMPETITION TIRE
 
     Two of PMI's subsidiaries, Competition Tire West and Competition Tire
South, engage in the wholesale and retail sale and distribution of Goodyear
brand racing tires for various types of racing events, excluding CART-sanctioned
events. Competition Tire West is a dealer of Goodyear brand racing tires.
Competition Tire West's area of primary responsibility includes Ohio, Indiana,
Michigan, Illinois, Wisconsin, Minnesota, North Dakota, South Dakota, Iowa,
Missouri and Kentucky. Competition Tire South is a dealer of Goodyear brand
sports car, dirt car and drag racing tires. Competition Tire South's area of
primary responsibility includes Florida, Georgia, Alabama, Tennessee, North
Carolina and South Carolina. Competition Tire South is also a dealer of Goodyear
brand sports car racing tires in Tennessee and North Carolina. Competition Tire
sells racing tires directly to end users of the tires and to retailers of the
tires and provides supplies of tires for use at racing events. Competition Tire
West and Competition Tire South distribute Goodyear brand tires pursuant to
Dealership Agreements with Goodyear which expire on December 31, 2000.
 
COMPETITION
 
     Racing events compete not only with other sports and other recreational
events scheduled on the same dates, but with other racing events sanctioned by
various racing bodies such as NASCAR, CART, the United States Auto Club
("USAC"), the National Hot Rod Association ("NHRA"), Sports Car Club of America
("SCCA"), the International Motor Sports Association ("IMSA"), the Automobile
Racing Club of America ("ARCA"), the Indy Racing League ("IRL") and others.
Racing events sanctioned by different organizations are often held on the same
dates at separate tracks, in competition with the NASCAR and CART event dates.
In addition, motorsports facilities compete with one another for the patronage
of motor racing spectators, with other track owners and with other sports and
entertainment businesses, many of which have resources that exceed those of the
Company. The quality of the competition, type of racing event, caliber of the
events, sight lines, ticket pricing, location, customer conveniences, among
others, distinguish the motorsports facilities.
 
                                        7
<PAGE>   9
 
     In addition, there have been and continue to be numerous attempts by other
parties to develop a permanent speedway to serve the large Southern California
market. Currently, projects have been announced for permanent sites in Long
Beach, Victorville, Lake Elsinore, San Jose and Coachella Valley, California.
None of these announced California projects is believed to be as advanced in the
permitting, development and construction work as the California Speedway. There
can be no assurance that PMI will maintain or improve its position in light of
such competition.
 
     MIC's principal competitors include other authorized (as well as
unauthorized) distributors and retailers of Penske Racing merchandise and
merchandise relating to its drivers. Competition Tire's principal competitors
are distributors and retailers of racing tires manufactured by companies other
than Goodyear, such as Hoosier and Firestone brand tires.
 
EMPLOYEES
 
     As of December 31, 1996, the Company had 113 full-time employees. The
Company engages a small number of temporary employees to assist during the
racing season and a large number of temporary personnel to assist during periods
of peak attendance at its events. For example, Michigan Speedway may engage up
to 4,000 persons for a race weekend at Michigan Speedway, some of whom are
volunteers. None of PMI's employees are represented by a labor union. Management
believes that PMI enjoys a good relationship with its employees.
 
ENVIRONMENTAL MATTERS
 
     Prior to the commencement of construction of the California Speedway,
portions of the site of the California Speedway were identified by Kaiser and
the applicable governmental agency as requiring remediation by Kaiser to comply
with applicable environmental laws. Property owned by Kaiser adjacent to the
site has also been identified as requiring remediation by Kaiser. Remediation
activities at the site, a former steel production facility, are being carried
out by Kaiser under a Consent Order between Kaiser and the California
Environmental Protection Agency, Department of Toxic Substances Control
("DTSC"), dated August 22, 1988. The primary area of potential environmental
concern at the site is an approximately 13 acre area which was the location of
Kaiser's former by-products plant and underground storage tanks. Under the
supervision of the DTSC, Kaiser has been able to undertake successful remedial
action at the site through a combination of remedial action alternatives
selected for implementation. Such remedial efforts by Kaiser at the site include
the installation of a low-permeability membrane and cap (and long-term
maintenance of this cap) in the 13 acre by-products and underground storage tank
area by Kaiser, installation of a vapor extraction system for impacted soils in
that area, excavation, treatment and off-site removal and disposal of impacted
soils and residual waste materials. Such efforts also include containment on the
site of potentially impacted soils after the DTSC considered the public health,
environmental protection, benefits derived from implementation of alternatives
and decreased levels of exposure over time.
 
     The DTSC has determined that the combination of remedial action
alternatives presented by Kaiser meets the DTSC's remedial action objectives for
the site because they significantly reduce or eliminate the potential migration
of contaminants to ground water, surface water and air, result in removal, as
necessary, of residual waste materials and impacted soil from the site, meet
regulatory standards, and are consistent with site development plans.
 
     Effective January 1, 1995, the California Speedway and Michigan Speedway
were released by the DTSC from various liabilities under California
environmental protection laws which might otherwise arise out of their ownership
of real estate or operations at the California Speedway site. In addition,
Kaiser has agreed to indemnify the California Speedway and Michigan Speedway
from environmental liabilities associated with the condition of the site and the
Company has obtained environmental liability insurance coverage to protect the
Company during the construction of the California Speedway and for subsequent
periods deemed to be necessary by the Company.
 
     Nevertheless, if damage to persons or property or contamination of the
environment is determined to have been caused or exacerbated by the conduct of
the Company's business, or by pollutants, substances,
 
                                        8
<PAGE>   10
 
contaminants or wastes used, generated or disposed of by the Company or which
may be found on the property of the Company, or should Kaiser fail to remediate
properly or not be able to honor its indemnification of the Company for such
remediation activities, there may be liability to various parties for such
damage and the Company or its subsidiaries may be required to pay the cost of
investigation or remediation, or both, of such contamination or damage caused
thereby. The amount of such liability, as to which the Company may be self-
insured or which is not subject to indemnification by Kaiser or to which Kaiser
does not financially respond, could also be material.
 
     Changes in federal, state or local laws, regulations or requirements, or
claims asserting liabilities under federal environmental protection laws and any
other laws outside the scope of the January 1, 1995 DTSC Release, or the
discovery of theretofore unknown conditions, could require material expenditures
by the Company.
 
     Kaiser has agreed to provide sanitary wastewater treatment services to the
California Speedway from a nearby treatment facility owned by Kaiser. The
Company has the option to purchase the facility at the fair market value at any
time. Kaiser has agreed not to voluntarily sell, lease or transfer the facility
to a third party without the Company's consent.
 
     Treated effluent from the site of the California Speedway has been
historically utilized by an unrelated party, California Steel Industries
("CSI"), in its industrial processes under an arrangement with Kaiser. The
Company believes that this utilization will continue into the future, but there
can be no assurance in this regard. Should CSI's utilization cease and a
replacement not be found, or should federal, state or local laws or regulations
change, it might be impracticable for the sewerage treatment facility serving
the site of the California Speedway to continue in operation. The Company would
then be required to connect to the public sewerage system. This could require
material expenditures by the Company either to acquire and/or upgrade the
treatment facility or to obtain other sanitary wastewater treatment services
from a public utility.
 
INSURANCE
 
     The Company, including the California Speedway, maintains insurance with
insurance companies against such risks and in such amounts, with such
deductibles, as are customarily maintained by similar businesses. Additionally,
the California Speedway presently maintains a $25 million contractor's pollution
liability policy and a pollution legal liability policy, on a shared limits,
claims made basis. The policy has a $500,000 per occurrence deductible and
generally covers the California Speedway's legal liability for bodily injury,
property damage and clean-up costs caused by pollution conditions (i) resulting
from construction activities at the site and which is not covered by the
construction contractors' policies, and (ii) which emanate from the site and
damage third parties as a result of existing conditions or on-going operations.
There can be no assurances that such policy will be sufficient to cover any
potential liability resulting from the environmental condition of the California
Speedway or from the construction of the California Speedway or that such policy
will be available in the future for the Company to purchase.
 
PATENTS AND TRADEMARKS
 
     PMI has various registered and common law trademark rights to "Michigan
Speedway", "Nazareth Speedway" and "California Speedway" and related logos and
has a license from a subsidiary of Penske Corporation to use the name "Penske"
in its trade name. MIC has licenses from various drivers and businesses to use
names and logos for merchandising programs and product sales. Management's
policy is to protect its intellectual property rights zealously, through
litigation if necessary, chiefly because of their proprietary value in
merchandise and promotional sales.
 
                                        9
<PAGE>   11
 
ITEM 2: PROPERTIES
 
     The following table sets forth the location, track name, approximate
acreage and track length for each of the Company's speedway facilities.
 
<TABLE>
<CAPTION>
                                             APPROXIMATE    LENGTH
       LOCATION             TRACK NAME        ACREAGE*     OF TRACK
       --------             ----------       -----------   --------
<S>                     <C>                  <C>           <C>
Brooklyn, Michigan      Michigan Speedway        977       2 miles
Nazareth, Pennsylvania  Nazareth Speedway        183        1 mile
Fontana, California     California Speedway      529       2 miles
</TABLE>
 
------------------------
* The Company owns all of the acreage listed in the table except for 77 acres of
  property located near the Nazareth Speedway which is leased from others to
  supply additional parking space.
 
     Additional information concerning the Company's facilities is set forth in
Item I (Business), under the caption "Events and Facilities -- Facilities."
 
ITEM 3: LEGAL PROCEEDINGS
 
     In March 1997, two purported class action companion lawsuits were filed in
the United States District Court, Northern District of Georgia, against
approximately 28 businesses, including PMI and MIC, many of which are involved
in the sale of souvenirs and merchandise at NASCAR Winston Cup races. The
lawsuits allege, in substance, that the defendants unlawfully conspired to fix
the prices of souvenirs and merchandise at these races in violation of federal
antitrust laws. The Company disputes the claims and expects to vigorously defend
itself.
 
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     During the fourth quarter of 1996, no matters were submitted to a vote of
security holders.
 
SUPPLEMENTARY ITEM: EXECUTIVE OFFICERS OF MANAGEMENT (PURSUANT TO INSTRUCTION 3
TO ITEM 401(B) OF REGULATION S-K).
 
<TABLE>
<CAPTION>
            NAME              AGE                     POSITION(S)
            ----              ---                     -----------
<S>                           <C>   <C>
James H. Harris.............  45    Senior Vice President and Treasurer
Gene Haskett................  53    Executive Vice President
Robert H. Kurnick, Jr. .....  35    Senior Vice President, General Counsel and
                                    Secretary
Les Richter.................  66    Executive Vice President
</TABLE>
 
     James H. Harris has been Senior Vice President and Treasurer of PMI since
January 1996 and, prior thereto, served as Controller of PMI. Mr. Harris has
also been the Controller for Penske Corporation since 1990. Prior to 1990, Mr.
Harris was with the CPA firm of Deloitte & Touche LLP.
 
     Gene Haskett has been Executive Vice President of PMI since January 1996
and, prior thereto, was a Vice President of PMI. Mr. Haskett is the President of
Michigan Speedway and Nazareth Speedway. Prior to January 1996, he was Vice
President and General Manager of MIS and has served in such capacity since 1987.
Mr. Haskett served as Vice President and General Manager of Indy Car Grand Prix,
Inc. from 1985 until 1993.
 
     Robert H. Kurnick, Jr. has been Senior Vice President, General Counsel and
Secretary of PMI since January 1996. Mr. Kurnick has also served as Assistant
General Counsel of Penske Corporation since January 1995 and Senior Vice
President, General Counsel and Secretary of Penske Auto Centers, Inc., which
owns and operates approximately 800 automotive service centers, since October
1995. Prior to January 1995, Mr. Kurnick was a partner in the Detroit law firm
of Honigman Miller Schwartz and Cohn.
 
                                       10
<PAGE>   12
 
     Les Richter has been Executive Vice President of PMI since July 1994. Since
1988, Mr. Richter has served as Chairman of the Board of the International Race
of Champions, Inc. and from 1992 to 1996, Mr. Richter served as Senior Vice
President - Operations of NASCAR.
 
                                    PART II
 
ITEM 5: MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
 
     The common stock of PMI, $.01 per share (the "Common Stock"), is currently
traded on the Nasdaq National Market ("Nasdaq") under the symbol "SPWY". The
Common Stock has traded on Nasdaq since the Company's initial public offering in
March 1996. As of March 21, 1997, 13,241,798 shares of Common Stock were
outstanding and there were approximately 1,151 record holders of Common Stock.
 
     The Company will consider the payment of cash dividends following
completion of the construction of the California Speedway. However, any
declaration and payment of dividends will be (i) dependent upon the Company's
results of operations, financial condition, cash requirements, capital
improvements and other relevant factors, (ii) subject to the discretion of the
Board of Directors of the Company and (iii) payable only out of the Company's
surplus or current net profits in accordance with the General Corporation Law of
the State of Delaware. No assurance can be given that the Company will be able
to pay such dividends following completion of the construction of the California
Speedway or at any time in the future.
 
     The following table sets forth the high and low closing sales prices for
the Company's Common Stock, as reported by Nasdaq for each calendar quarter
during the periods indicated. Prior to March 26, 1996, the Company was privately
held and there was no public market for the Common Stock.
 
<TABLE>
<CAPTION>
                            1996                                HIGH             LOW
                            ----                                ----             ---
<S>                                                             <C>  <C>         <C> <C>
First Quarter (from March 26, 1996).........................     $40 3/4         $28 1/2
Second Quarter..............................................     $38 1/4         $24 3/4
Third Quarter...............................................     $35 1/2         $23
Fourth Quarter..............................................     $35 1/2         $24 1/8
</TABLE>
 
                                       11
<PAGE>   13
 
ITEM 6: SELECTED FINANCIAL DATA
 
     Set forth below is selected consolidated financial data for each of the
past five fiscal years. The selected financial data should be read in
conjunction with Management's Discussion and Analysis of Financial Condition and
Results of Operations and the Company's Consolidated Financial Statements and
Notes included elsewhere in this report.
 
<TABLE>
<CAPTION>
                                                             YEAR ENDED DECEMBER 31,
                                                             -----------------------
                                            1996           1995         1994        1993         1992
                                            ----           ----         ----        ----         ----
                                                     ($ IN THOUSANDS, EXCEPT PER SHARE DATA)  (UNAUDITED)
<S>                                      <C>            <C>           <C>         <C>         <C>
STATEMENT OF INCOME:
  REVENUE
     Speedway admissions.............    $    20,248    $   17,375    $ 15,278    $ 13,997     $ 13,391
     Other speedway revenue..........         13,041         7,654       7,181       6,149        6,053
     Merchandise, tires and
       accessories...................         21,886        16,976      18,059      13,070        9,847
                                         -----------    ----------    --------    --------     --------
       Total Revenue.................         55,175        42,005      40,518      33,216       29,291
  EXPENSES
     Operating expenses..............         18,067        14,060      13,322      11,026       10,820
     Cost of sales...................         12,834         9,672      10,169       7,573        5,358
     Depreciation and amortization...          3,167         2,563       2,018       1,601        1,513
     Selling, general and
       administrative................          6,185         4,631       4,632       4,420        4,124
                                         -----------    ----------    --------    --------     --------
       Total Expenses................         40,253        30,926      30,141      24,620       21,815
     Operating Income................         14,922        11,079      10,377       8,596        7,476
  Interest income (expense), net.....          1,950          (895)     (1,005)       (875)        (793)
                                         -----------    ----------    --------    --------     --------
  Income before taxes................         16,872        10,184       9,372       7,721        6,683
  Income taxes.......................          5,992         3,410       3,032       2,528          753
                                         -----------    ----------    --------    --------     --------
  Net income.........................    $    10,880    $    6,774    $  6,340    $  5,193     $  5,930
                                         ===========    ==========    ========    ========     ========
  Pro forma net income per share.....    $      0.90    $     0.84
  Pro forma weighted average shares
     outstanding.....................     12,128,920     8,077,245
  SELECTED OPERATING DATA:
     Operating margin................           27.0%         26.4%       25.6%       25.9%        25.5%
     Number of seats
       Michigan Speedway.............         98,276        88,141      77,991      72,906       66,173
       Nazareth Speedway.............         35,654        30,534      30,534      26,668       24,270
     Total attendance................        599,480       518,396     448,168     414,937      362,502
     Number of events
       Winston Cup...................              2             2           2           2            2
       CART..........................              2             2           2           2            2
       Other.........................              5             4           5           4            3
</TABLE>
 
<TABLE>
<CAPTION>
                                                                   DECEMBER 31,
                                                                   ------------
                                             1996          1995        1994        1993         1992
                                             ----          ----        ----        ----         ----
                                                                                             (UNAUDITED)
<S>                                        <C>            <C>         <C>         <C>        <C>
BALANCE SHEET DATA:
  Total assets.........................    $183,997       $73,255     $34,510     $36,407      $27,406
  Total debt...........................       5,563           350      12,515      12,035       10,221
  Total stockholders' equity...........     145,402        45,812      10,187      13,467       11,062
</TABLE>
 
                                       12
<PAGE>   14
 
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS
 
GENERAL
 
     Penske Motorsports, Inc. classifies its revenues as speedway admissions,
other speedway revenue, and merchandise, tires and accessories revenue. Speedway
admissions includes ticket sales for racing events held at Michigan and Nazareth
Speedways. Other speedway revenue includes revenue from concessions sales,
corporate hospitality and sponsorship, broadcast revenues and billboard and
program advertising. Speedway admissions and other speedway revenue are
generally collected in advance and recorded as deferred revenue until the
completion of the related event. Merchandise, tires and accessories revenue
includes sales of motorsports related merchandise and revenue from showcar
appearance fees by MIC and sales of racing tires and accessories by Competition
Tire. Revenue from sales of merchandise, tires and accessories is recorded as
income at the time of the sale.
 
     The Company classifies its expenses as operating, cost of sales,
depreciation and amortization and selling, general and administrative expenses.
Operating expenses consist primarily of costs associated with conducting race
events, such as sanction fees and wages. Cost of sales relates entirely to sales
of merchandise, tires and accessories.
 
     In March 1996, the Company completed its initial public offering of
3,737,500 shares of common stock. The initial offering price was $24 per share
with net proceeds to the Company of $82.7 million. The net proceeds were used to
repay outstanding balances on the Company's credit facilities of approximately
$10.6 million, with the remainder to be used to fund the construction of the
California Speedway.
 
     Revenue for the year ended December 31, 1996 was $55.2 million, compared to
$42.0 million and $40.5 million, respectively, for the years ended December 31,
1995 and 1994. Net income for the year ended December 31, 1996 was $10.9
million, or $.90 per share, compared to $6.8 million, or $.84 per share, for the
year ended December 31, 1995 and $6.3 million for the year ended December 31,
1994. The increase in revenues and net income for the year ended December 31,
1996 is due primarily to increased ticket sales and increased broadcast and
concessions revenues at the speedways, an increase in sales of merchandise,
tires and accessories, including the impact of the acquisition of Competition
Tire South, and an increase in interest income from temporary investments of
proceeds from the Company's initial public offering.
 
     The Company is currently constructing the California Speedway, a two-mile
superspeedway located near Los Angeles, California, with an estimated cost of
approximately $105 million. The Company has incurred approximately $63 million
in construction costs through December 31, 1996. Three event weekends have been
scheduled for June, September and October of 1997. During 1996, the Company
acquired approximately 54 acres of commercial property located adjacent to the
property on which the Company is building the California Speedway from a
noncontrolling shareholder of the Company for $13.4 million, which the Company
paid in cash of $5 million and through the issuance of 254,298 shares of the
Company's common stock.
 
     During 1996, the Company acquired the stock in Pennsylvania International
Raceway (Nazareth Speedway) held by the minority shareholder in exchange for
92,500 shares of the Company's common stock. The Company also purchased all of
the outstanding common stock of Competition Tire West and Competition Tire South
during 1996. Competition Tire West was purchased for $7.4 million, of which $4.3
million was paid in cash with the balance payable over a term of five years with
interest at 8% per annum. Competition Tire West owned one-third of Competition
Tire South. The Company acquired the remaining two-thirds of Competition Tire
South for $2.2 million, paying $1.4 million in cash and issuing notes payable
over a term of five years at 8% interest per annum for the remaining $830,000.
 
     The Company does not believe that its financial performance has been
materially affected by inflation. The Company has been able to mitigate the
effects of inflation without adversely affecting attendance.
 
                                       13
<PAGE>   15
 
SEASONALITY AND QUARTERLY RESULTS
 
     The Company's weekend events usually include one premier Sunday event, such
as a NASCAR Winston Cup, NASCAR Busch Series Grand National Division or CART
event, coupled with a Saturday supporting event. The Company believes that
combining the races creates a more attractive weekend racing experience than an
isolated race event. As a result of this strategy, in 1996 the Company generated
virtually all of its speedway revenue in six weekends.
 
     The Company's weekend events are currently held between April and August.
As a result, the Company's business has been highly seasonal. In addition to the
existing weekend events, in 1997 the California Speedway will host events in
June, September and October.
 
     Set forth below is summary information with respect to the Company's
operations for the most recent eight quarters.
 
<TABLE>
<CAPTION>
                                                1996                                    1995
                                ------------------------------------    -------------------------------------
                                FIRST    SECOND     THIRD    FOURTH      FIRST    SECOND     THIRD    FOURTH
                                -----    ------     -----    ------      -----    ------     -----    ------
<S>                             <C>      <C>       <C>       <C>        <C>       <C>       <C>       <C>
Revenue.......................  $3,642   $24,614   $23,962   $ 2,957    $ 2,862   $17,310   $19,197   $ 2,636
Net income (loss).............    (990)    6,717     6,499    (1,346)    (1,157)    4,237     4,812    (1,118)
Event weekends................                 4         2                              3         2
</TABLE>
 
RESULTS OF OPERATIONS
 
     The percentage relationships between revenues and other elements of the
Company's Consolidated Statements of Income for the years ended December 31,
1996, 1995 and 1994 were:
 
<TABLE>
<CAPTION>
                                                                1996     1995     1994
                                                                ----     ----     ----
<S>                                                             <C>      <C>      <C>
REVENUE:
  Speedway admissions.......................................     36.7%    41.4%    37.7%
  Other speedway revenue....................................     23.6     18.2     17.7
  Merchandise, tires and accessories........................     39.7     40.4     44.6
                                                                -----    -----    -----
       TOTAL REVENUE........................................    100.0    100.0    100.0
                                                                -----    -----    -----
EXPENSES:
  Operating.................................................     32.8     33.5     32.9
  Cost of sales.............................................     23.3     23.0     25.1
  Depreciation and amortization.............................      5.7      6.1      5.0
  Selling, general and administrative.......................     11.2     11.0     11.4
                                                                -----    -----    -----
       TOTAL EXPENSES.......................................     73.0     73.6     74.4
                                                                -----    -----    -----
OPERATING INCOME............................................     27.0%    26.4%    25.6%
                                                                =====    =====    =====
</TABLE>
 
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
 
     Revenues -- Revenues for the year ended December 31, 1996 were $55.2
million, an increase of $13.2 million, or 31.4%, compared to the same period in
1995. This improvement was due to increases in all revenue components.
Admissions revenue for the year of $20.2 million increased $2.9 million, or
16.5%, from the same period in 1995 and reflects increased attendance at the
Company's events, as well as the addition of an event at Nazareth Speedway.
Other speedway revenue of $13.0 million increased $5.4 million, or 70.4%,
primarily due to incremental television broadcast revenue, increases in
concessions, hospitality and sponsorship revenue and revenue from leasing the
Michigan Speedway to CART to host the U.S. 500. Merchandise, tires and
accessories revenue of $21.9 million increased $4.9 million, or 28.9%, from the
same period in 1995, reflecting the acquisition of Competition Tire South as
well as increases in sales of race related apparel and tires and accessories.
The addition of three event weekends at the California Speedway in 1997 is
expected to result in a significant increase in speedway admissions and other
speedway revenue.
 
                                       14
<PAGE>   16
 
     Operating Expenses -- Operating expenses of $18.1 million for the year
ended December 31, 1996 increased $4.0 million, or 28.5%, from the year ended
December 31, 1995 as a result of higher sanction fees, costs associated with the
U.S. 500, the new event at Nazareth Speedway and the impact of the acquisition
of Competition Tire South. As a percentage of total revenue, operating expenses
were 32.8% for the year ended December 31, 1996 as compared to 33.5% for the
year ended December 31, 1995. The decrease in operating expenses as a percentage
of total revenue for 1996 reflects the Company's ability to add incremental
revenue without a corresponding increase in operating expenses.
 
     Cost of Sales -- Cost of sales, which relates entirely to sales of
merchandise, tires and accessories, was $12.8 million for the year ended
December 31, 1996, or 58.6% of merchandise, tires and accessories revenues,
compared to $9.7 million, or 57.0% of those same revenues, for 1995. The
increase in cost of sales as a percent of merchandise, tires and accessories
revenue reflects an increase in wholesale merchandise sales, which have a lower
gross profit margin.
 
     Depreciation and Amortization -- Depreciation and amortization expense of
$3.2 million for the year ended December 31, 1996 increased $.6 million, or
23.6%, compared to the year ended December 31, 1995. The increase reflects
capital improvements, primarily additional seating and repaving at the race
tracks, and the acquisition of Competition Tire South.
 
     Selling, General and Administrative -- Selling, general and administrative
expenses of $6.2 million for the year ended December 31, 1996 increased $1.6
million, or 33.6%, from $4.6 million in 1995 due to expenses incurred in
connection with the U.S. 500 and the new event at Nazareth Speedway. As a
percentage of revenues, selling, general and administrative expenses were
comparable, 11.2% in 1996 and 11.0% in 1995.
 
     Operating Income -- Operating income for the year ended December 31, 1996
was $14.9 million, an increase of $3.8 million, or 34.7%, from $11.1 million for
the year ended December 31, 1995. This resulted primarily from increased
speedway admissions and incremental broadcast and sponsorship revenue for
speedway events.
 
     Interest -- The Company recorded net interest income for the year ended
December 31, 1996 of $2.0 million, compared to net interest expense of $.9
million in 1995. The interest income resulted from temporarily investing the
proceeds of the initial public offering while the reduced interest expense
reflects the repayment of existing debt with the initial public offering
proceeds. The remaining proceeds of the initial public offering will be used in
1997 to complete the construction of the California Speedway and will not be
available for investment by the Company through 1997.
 
     Income Tax Expense -- The Company's effective tax rate for 1996 was 35.5%
compared to 33.5% in 1995. The increase primarily reflects the inclusion of
Competition Tire West in taxable income in 1996. Prior to 1996, Competition Tire
West was a Subchapter S Corporation, whereby its shareholders were taxed for
their proportionate share of the Company's taxable income.
 
     Net Income -- Net income for the year ended December 31, 1996 was $10.9
million, an increase of $4.1 million, or 60.6%, over 1995. The increase reflects
increases in speedway admissions and other speedway revenues, higher sales of
merchandise, tires and accessories and the benefit of interest earned on
invested initial public offering proceeds.
 
YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994
 
     Revenue -- Revenue of $42.0 million for the year ended December 31, 1995
increased by $1.5 million, or 3.7% from the year ended December 31, 1994. This
increase was the result of growth in speedway revenue of $2.6 million, offset by
a $1.1 million decline in revenue from merchandise, tires and accessories.
Speedway admissions revenue of $17.4 million increased by $2.1 million, or
13.7%, of which $1.5 million, or 9.8%, was attributable to increased attendance
and $.6 million, or 3.9%, was attributable to increases in ticket prices.
Merchandise, tires, and accessories revenue declined primarily due to the loss
of a license to use the "McDonald's" logo on merchandise and because Penske
Racing's Rusty Wallace Winston Cup race team experienced a less successful
season in 1995 than in 1994. This decline was partially offset by an increase in
sales of tires and accessories.
 
                                       15
<PAGE>   17
 
     Operating Expenses -- Operating expenses of $14.1 million for the year
ended December 31, 1995 increased by $.7 million, or 5.5%, from the year ended
December 31, 1994. As a percentage of total revenue, operating expenses were
33.5% for the year ended December 31, 1995 as compared to 32.9% for the year
ended December 31, 1994. The increase in operating expenses resulted primarily
from an increase in the sanction fees paid by the Company for the year ended
December 31, 1995, from the amounts paid in the year ended December 31, 1994.
 
     Cost of Sales -- Cost of sales of $9.7 million for the year ended December
31, 1995 decreased by $.5 million, or 4.9%, from the year ended December 31,
1994, reflecting lower sales volume.
 
     Selling, General and Administrative Expenses -- Selling, general and
administrative expenses of $4.6 million for the year ended December 31, 1995
remained comparable to that for the year ended December 31, 1994. As a
percentage of total revenue, selling, general and administrative expenses were
11.0% in the year ended December 31, 1995 as compared to 11.4% in the prior
year, reflecting the Company's ability to increase speedway revenue without a
corresponding increase in selling, general and administrative expenses.
 
     Depreciation and Amortization -- Depreciation and amortization expense of
$2.6 million for the year ended December 31, 1995 increased by $.5 million, or
27.0%, from the year ended December 31, 1994. The increase occurred as a result
of additional seating capacity and track paving at Michigan Speedway and other
improvements made during 1995.
 
     Operating Income -- Operating income of $11.1 million for the year ended
December 31, 1995 increased $.7 million, or 6.8%, from the year ended December
31, 1994. As a percentage of total revenue, operating income was 26.4% for the
year ended December 31, 1995 as compared to 25.6% for the year ended December
31, 1994. The increase in operating income resulted primarily from higher
revenue from a combination of increased attendance and higher ticket prices at
the speedway, partially offset by additional operating expenses associated with
promoting race events and increased depreciation expense related to capital
expansion for future growth.
 
     Interest Expense -- Interest expense of $.9 million for the year ended
December 31, 1995 was $.1 million less than 1994 due to reduced borrowings.
 
     Income Tax Expense -- The Company's effective tax rate was 33.5% and 32.4%
for the years ended December 31, 1995 and 1994, respectively. The effective tax
rate was less than the statutory rate primarily because Competition Tire West
was a Subchapter S Corporation.
 
     Net Income -- Net income of $6.8 million for the year ended December 31,
1995 increased $.4 million, or 6.8% from the year ended December 31, 1994. The
increase in net income resulted primarily from higher revenue from a combination
of increased attendance and higher ticket prices at the speedways, partially
offset by additional operating expenses associated with promoting race events
and increased depreciation expense related to capital expansion for future
growth.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     Historically, the Company has relied on cash flows from operating
activities supplemented, as necessary, by bank borrowings to finance working
capital, investments and capital expenditures. The Company used a portion of the
proceeds of its initial public offering to repay debt and is using the remainder
to fund construction of the California Speedway.
 
     For the year ended December 31, 1996, the Company generated $18.6 million
in cash flows from operating activities, an increase of $4.3 million from 1995,
primarily reflecting an increase in net income of $4.1 million and an increase
of $5.0 million in deferred revenue. For the year ended December 31, 1995 the
Company generated $14.3 million in cash flows from operating activities, an
increase of $6.2 million over operating cash flow of $8.1 million for the year
ended December 31, 1994. This improvement was primarily a reflection of the
timing of tax payments made to Penske Corporation in the year ended December 31,
1995.
 
     During the year ended December 31, 1996, the Company used $78.5 million for
investing activities. This consisted of $73.8 million in capital expenditures,
including $56.1 million for the construction of the California
 
                                       16
<PAGE>   18
 
Speedway and $5 million for the cash portion of the $13.4 million purchase price
of the commercial property located adjacent to the California Speedway, $4.1
million for the acquisition of Competition Tire and $.6 million for additional
investments in unconsolidated subsidiaries. Cash of $83.0 million was provided
by financing activities in 1996, primarily from the initial public offering,
which provided net cash of $82.7 million.
 
     During the year ended December 31, 1996, the Company obtained a $20 million
unsecured revolving line of credit, all of which was available as of December
31, 1996. This line of credit will be used for general working capital needs
and, if necessary, to finance the completion of the California Speedway and
other capital expenditures.
 
     The Company believes it has sufficient resources from existing cash
balances and from operating activities, and if necessary, from borrowing under
its line of credit to satisfy ongoing cash requirements for the next twelve
months, including construction of the California Speedway and other required
capital expenditures. The California Speedway is currently estimated to cost
approximately $105 million. The estimated construction cost has increased from
original estimates due to additional seating capacity, enhancements to customer
amenities and further upgrades to the quality of the facilities.
 
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995
 
     Except for the historical information contained herein, certain matters
discussed in this report are forward-looking statements which involve risks and
uncertainties, including but not limited to the Company's ability to maintain
good working relationships with the sanctioning bodies for its events, complete
on schedule the construction of the California Speedway and obtain sanctioning
agreements for events at the California Speedway, as well as other risks and
uncertainties affecting the Company's operations, such as competition,
environmental, industry sponsorships, governmental regulation, dependence on key
personnel, the Company's ability to control construction and operational costs,
the impact of bad weather at the Company's events and those other factors
discussed in the Company's filings with the Securities and Exchange Commission.
 
                                       17
<PAGE>   19
 
                   PENSKE MOTORSPORTS, INC. AND SUBSIDIARIES
 
                          CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1996 AND 1995
 
<TABLE>
<CAPTION>
                                                                  1996       1995
                                                                  ----       ----
                                                                 ($ IN THOUSANDS)
<S>                                                             <C>         <C>
                           ASSETS
Current Assets:
  Cash and cash equivalents.................................    $ 27,862    $ 4,805
  Receivables...............................................       2,365      1,708
  Inventories...............................................       2,060      1,370
  Prepaid expenses..........................................       1,272        575
                                                                --------    -------
     Total Current Assets...................................      33,559      8,458
Property and Equipment, net.................................     140,402     61,009
Note Receivable -- Related Party............................                  1,512
Goodwill, net...............................................       6,918      1,367
Other Assets................................................       3,118        909
                                                                --------    -------
     Total..................................................    $183,997    $73,255
                                                                ========    =======
            LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Current portion of long-term debt.........................    $  1,738    $   150
  Accounts payable..........................................       8,223      2,858
  Accrued expenses..........................................       1,715      3,790
  Deferred revenue, net.....................................      14,125      8,866
                                                                --------    -------
     Total Current Liabilities..............................      25,801     15,664
Long-Term Debt, less current portion........................       3,825        200
Advances -- Related Parties.................................                  1,254
Deferred Taxes..............................................       8,969      9,115
Minority Interest...........................................                  1,210
Commitments and Contingencies
Stockholders' Equity:
  Common stock, par value $ .01 share:
     Authorized 50,000,000 shares
     Issued and outstanding 13,241,798 shares and 9,157,500
      shares in 1996 and 1995, respectively.................         132         93
  Additional paid-in-capital................................     130,534     37,446
  Retained earnings.........................................      14,736      8,273
                                                                --------    -------
     Total Stockholders' Equity.............................     145,402     45,812
                                                                --------    -------
     Total..................................................    $183,997    $73,255
                                                                ========    =======
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       18
<PAGE>   20
 
                   PENSKE MOTORSPORTS, INC. AND SUBSIDIARIES
 
                       CONSOLIDATED STATEMENTS OF INCOME
                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
 
<TABLE>
<CAPTION>
                                                                  1996           1995       1994
                                                                  ----           ----       ----
                                                                ($ IN THOUSANDS EXCEPT FOR SHARE
                                                                       AND PER SHARE DATA)
<S>                                                            <C>            <C>          <C>
REVENUE:
  Speedway admissions......................................    $    20,248    $   17,375   $15,278
  Other speedway revenue...................................         13,041         7,654     7,181
  Merchandise, tires and accessories.......................         21,886        16,976    18,059
                                                               -----------    ----------   -------
     Total Revenue.........................................         55,175        42,005    40,518
EXPENSES:
  Operating expenses.......................................         18,067        14,060    13,322
  Cost of sales............................................         12,834         9,672    10,169
  Depreciation and amortization............................          3,167         2,563     2,018
  Selling, general and administrative......................          6,185         4,631     4,632
                                                               -----------    ----------   -------
  Total Expenses...........................................         40,253        30,926    30,141
Operating Income...........................................         14,922        11,079    10,377
Interest Income (Expense), net.............................          1,950          (895)   (1,005)
                                                               -----------    ----------   -------
Income Before Income Taxes.................................         16,872        10,184     9,372
Income Taxes...............................................          5,992         3,410     3,032
                                                               -----------    ----------   -------
  Net Income...............................................    $    10,880    $    6,774   $ 6,340
                                                               ===========    ==========   =======
  Pro Forma Net Income Per Share...........................    $       .90    $      .84
                                                               ===========    ==========
  Pro Forma Weighted Average Number of Shares..............     12,128,920     8,077,245
                                                               ===========    ==========
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       19
<PAGE>   21
 
                   PENSKE MOTORSPORTS, INC. AND SUBSIDIARIES
 
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                  YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
 
<TABLE>
<CAPTION>
                                                                    ADDITIONAL
                                                          COMMON     PAID-IN      RETAINED
                                                          STOCK      CAPITAL      EARNINGS     TOTAL
                                                          ------    ----------    --------     -----
                                                                        ($ IN THOUSANDS)
<S>                                                       <C>       <C>           <C>         <C>
Balance, January 1, 1994..............................     $ 78      $  2,485     $10,524     $ 13,087
  Net income..........................................                              6,340        6,340
  Dividends...........................................                             (9,240)      (9,240)
                                                           ----      --------     -------     --------
Balance, December 31, 1994............................       78         2,485       7,624       10,187
  Net income..........................................                              6,774        6,774
  Dividends...........................................                             (6,125)      (6,125)
  Capital contribution (Note 8).......................                 19,976                   19,976
  Stock issuance......................................       15        14,985                   15,000
                                                           ----      --------     -------     --------
Balance, December 31, 1995............................       93        37,446       8,273       45,812
  Sale of common stock................................       37        82,703                   82,740
  Competition Tire West, Inc. transaction (Note 3)....                    (28)     (4,417)      (4,445)
  Acquisition of minority interest (Note 3)...........                  2,063                    2,063
  Stock issuance (Note 4).............................        2         8,350                    8,352
  Net income..........................................                             10,880       10,880
                                                           ----      --------     -------     --------
Balance, December 31, 1996............................     $132      $130,534     $14,736     $145,402
                                                           ====      ========     =======     ========
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       20
<PAGE>   22
 
                   PENSKE MOTORSPORTS, INC. AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
 
<TABLE>
<CAPTION>
                                                                  1996        1995       1994
                                                                  ----        ----       ----
                                                                       ($ IN THOUSANDS)
<S>                                                             <C>         <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income................................................    $ 10,880    $  6,774    $ 6,340
  Adjustments to reconcile net income to net cash provided
     by operating activities:
     Depreciation and amortization..........................       3,167       2,563      2,018
     Changes in assets and liabilities which provided (used)
       cash:
       Receivables..........................................        (431)        (75)      (852)
       Inventories, prepaid expenses and other assets.......      (2,784)        323       (128)
       Accounts payable and accrued liabilities.............       2,522       4,461     (2,364)
       Deferred revenue.....................................       5,259         275      3,108
                                                                --------    --------    -------
     Net cash provided by operating activities..............      18,613      14,321      8,122
CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions of property and equipment, net..................     (73,812)    (14,205)    (5,602)
  Acquisition of Competition Tire South, Inc. (Note 3)......        (758)
  Competition Tire West, Inc. transaction (Note 3)..........      (3,326)
  Acquisitions of minority interest in subsidiaries.........        (622)       (520)      (200)
                                                                --------    --------    -------
     Net cash used in investing activities..................     (78,518)    (14,725)    (5,802)
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from sale of common stock........................      82,740
  Capital contribution......................................                  19,976
  Proceeds from issuance of debt............................      14,016       4,672      2,000
  Principal payments on long-term debt......................     (12,540)    (16,837)    (1,520)
  Distribution to Parent....................................                  (3,600)    (1,650)
  Dividends.................................................                    (385)      (240)
  Repayment of advances - related party.....................      (1,254)
                                                                --------    --------    -------
     Net cash provided by (used in) financing activities....      82,962       3,826     (1,410)
                                                                --------    --------    -------
Net Increase in Cash and Cash Equivalents...................      23,057       3,422        910
Cash and Cash Equivalents at Beginning of Period............       4,805       1,383        473
                                                                --------    --------    -------
Cash and Cash Equivalents at End of Period..................    $ 27,862    $  4,805    $ 1,383
                                                                ========    ========    =======
SUPPLEMENTAL CASH FLOW INFORMATION:
  Cash paid during the period for interest..................    $    133    $  1,041    $ 1,040
                                                                ========    ========    =======
  Cash paid during the period for taxes.....................    $  9,279    $  1,168    $ 2,528
                                                                ========    ========    =======
SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES:
  Increase in debt associated with acquisitions (Note 3)....    $  3,738
                                                                ========
  Decrease in minority interest from acquisitions (Note
     3).....................................................    $  1,210
                                                                ========
  Stock issued for land purchase (Note 4)...................    $  8,352
                                                                ========
</TABLE>
 
                See notes to consolidated financial statements.
 
                                       21
<PAGE>   23
 
                   PENSKE MOTORSPORTS, INC. AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
 
1. BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS
 
     The consolidated financial statements include the accounts of Penske
Motorsports, Inc. (the Company) and its wholly-owned subsidiaries Michigan
International Speedway, Inc. d/b/a Michigan Speedway (MS), Pennsylvania
International Raceway, Inc. d/b/a Nazareth Speedway (NS), The California
Speedway Corporation d/b/a California Speedway (TCS), Motorsports International
Corp. (MIC), Competition Tire West, Inc. (CTW) and Competition Tire South, Inc.
(CTS). The Company is a majority-owned subsidiary of Penske Corporation (the
Parent). All material intercompany balances and transactions have been
eliminated.
 
     Nature of Operations -- The Company generates a predominant portion of its
revenue from operating Michigan Speedway and Nazareth Speedway, and is
constructing the California Speedway, which will begin operations in 1997. The
Company also sells motorsports related merchandise and apparel and racing tires
and accessories.
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
     Cash and Cash Equivalents -- The Company considers all investments with a
maturity of three months or less, at purchase, as cash equivalents.
 
     Inventories -- Inventories are stated at the lower of cost or market, with
cost determined primarily by the first in, first out (FIFO) method.
 
     Property and Equipment and Goodwill -- Property and equipment is carried at
cost less accumulated depreciation. Depreciation is calculated using the
straight-line method over the estimated useful lives of the respective assets as
follows:
 
<TABLE>
<CAPTION>
                                                                 YEARS
                                                                 -----
<S>                                                             <C>
Buildings and Improvements..................................    10 - 40
Equipment...................................................     2 - 15
</TABLE>
 
     Goodwill represents the excess of the purchase price over the fair value of
net assets acquired and is being amortized primarily over a period of 40 years.
Accumulated amortization was $326,000 and $182,000 at December 31, 1996 and
1995, respectively.
 
     The carrying values of property and equipment and goodwill are evaluated
for impairment based upon expected future undiscounted cash flows.
 
     Investments -- The Company has a 4% ownership interest in the stock of
North Carolina Motor Speedway, Inc., which owns and operates Rockingham Motor
Speedway. This investment is recorded at cost, which was $1,131,000 as of
December 31, 1996. The Company has a right of first refusal to acquire a
controlling interest at fair market value should a sale occur.
 
     Revenue Recognition -- Race related revenue and expenses are recognized
upon completion of an event. Deferred revenue represents advance race related
revenue, net of expenses, on future races. Revenue from the sale of merchandise,
tires and accessories is recognized at the time of sale. Operating expenses
include race-related expenses and other operating costs. Cost of sales relates
entirely to merchandise, tires and accessories sales.
 
     Income Taxes -- Deferred taxes reflect the impact of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.
 
     Prior to the purchase of CTW by the Company in March, 1996, CTW was a
Subchapter S Corporation under the Internal Revenue Code whereby the
shareholders are taxed on the proportionate share of the Company's federal
taxable income. Therefore, no provision or liability for federal income taxes
was included in the consolidated financial statements prior to 1996 for CTW.
 
                                       22
<PAGE>   24
 
                   PENSKE MOTORSPORTS, INC. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
 
     Estimates -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the reporting period. Actual
results will likely differ from those which are estimated, however, such
differences are not expected to be material.
 
     Reclassifications -- Certain reclassifications have been made to prior
period financial statements to conform with the 1996 presentation.
 
3. INITIAL PUBLIC OFFERING AND RELATED ACQUISITIONS
 
     Initial Public Offering -- On March 27, 1996, the Company completed its
initial public offering (IPO) of 3,737,500 shares of common stock. The initial
offering price was $24 per share with net proceeds to the Company of $82.7
million. The net proceeds from the offering were used to repay outstanding
balances on the Company's credit facilities (approximately $10.6 million) with
the remainder to be used to fund the construction of the California Speedway
(Note 4).
 
     Acquisition of Minority Interest in NS -- Immediately prior to the
effective date of the IPO, an investor in NS exchanged 2,557 shares of NS for
92,500 shares of common stock of the Company. This transaction resulted in
recording goodwill of approximately $2 million.
 
     Acquisition of Minority Interest in CTW and Capital Distribution -- On
March 21, 1996, the Company acquired 100% of the common stock of CTW for $7.4
million, of which $4.3 million was paid to the two selling shareholders in cash
with the balance of $3.1 million payable over a term not to exceed five years
with interest at 8% per annum. The acquisition of the shares of the former 40%
CTW shareholder was accounted for as an acquisition of a minority interest and
resulted in recording goodwill of approximately $1.9 million. The former
controlling shareholder of CTW (60%) is also the controlling shareholder of the
Company, therefore, the excess of the amount paid for such shares over the net
book value of assets acquired (approximately $2.9 million) was recorded as a
capital distribution.
 
     CTW was included in the consolidated balance sheet at December 31, 1995
because of common control and as a result of the aforementioned transaction.
This transaction resulted in the ownership of CTW by the Company and the
elimination of the net book value (approximately $1.4 million) of the
controlling shareholder's interest in CTW from consolidated stockholder's
equity. Also, as part of this transaction, the $1.5 million note
receivable-related party was repaid.
 
     Acquisition of CTS Common Stock -- On March 21, 1996, the Company acquired
the common shares of CTS not owned by CTW (approximately 67%) for cash and notes
totaling approximately $2.2 million. Notes payable of approximately $830,000 are
payable over a term not to exceed five years with interest at 8% per annum. This
acquisition was accounted for using the purchase method of accounting and
resulted in recording $1.7 million of goodwill. CTS has been included in the
consolidated financial statements from the date acquired. Had the acquisition
occurred as of January 1, 1996, the pro-forma effect on revenues would have been
an increase of $1.4 million with an immaterial impact on net income and earnings
per share.
 
                                       23
<PAGE>   25
 
                   PENSKE MOTORSPORTS, INC. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
 
4. PROPERTY AND EQUIPMENT
 
     Property and equipment consists of the following:
 
<TABLE>
<CAPTION>
                                                               DECEMBER 31,
                                                            ------------------
                                                              1996      1995
                                                              ----      ----
                                                              (IN THOUSANDS)
<S>                                                         <C>        <C>
Land and improvements.....................................  $ 85,469   $35,976
Buildings and improvements................................    63,685    33,337
Equipment.................................................     6,929     4,656
                                                            --------   -------
                                                             156,083    73,969
Less accumulated depreciation.............................    15,681    12,960
                                                            --------   -------
                                                            $140,402   $61,009
                                                            ========   =======
</TABLE>
 
     The Company is currently constructing the California Speedway with an
estimated cost of approximately $105 million. Construction costs in-progress
through December 31, 1996 approximated $63 million.
 
     In December 1996, the Company acquired 54 acres of commercial property
located adjacent to the property on which the Company is building the California
Speedway from a noncontrolling shareholder of the Company. The purchase price
for the property was $13.4 million, which the Company paid in cash of $5 million
and by the issuance of 254,298 shares of the Company's common stock.
 
5. LONG-TERM DEBT
 
     Long-term debt consists of the following:
 
<TABLE>
<CAPTION>
                                                                 DECEMBER 31,
                                                                --------------
                                                                 1996     1995
                                                                 ----     ----
                                                                (IN THOUSANDS)
<S>                                                             <C>       <C>
Notes payable through 2006, bearing interest at rates
  ranging from 8.0% to 8.5%.................................    $5,563    $350
Less current portion........................................     1,738     150
                                                                ------    ----
                                                                $3,825    $200
                                                                ======    ====
</TABLE>
 
     The following table presents the expected repayment of the long-term debt
(in thousands):
 
<TABLE>
<S>                                                             <C>
1997........................................................    $1,738
1998........................................................     1,219
1999........................................................       876
2000........................................................       884
2001........................................................       117
2002 and thereafter.........................................       729
                                                                ------
                                                                $5,563
                                                                ======
</TABLE>
 
     Notes payable at December 31, 1996 include $3.1 million which is due to
related parties as a result of the purchase of CTW (see Note 3) and $1.7 million
which is secured by certain parcels of land included in property and equipment.
 
     At December 31, 1996 the carrying value of the debt approximates fair
value.
 
     The Company has a $20 million unsecured revolving line of credit, all of
which was available as of December 31, 1996.
 
                                       24
<PAGE>   26
 
                   PENSKE MOTORSPORTS, INC. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
 
6. EMPLOYEE BENEFIT PLANS
 
     The Company participates in a non-contributory profit-sharing plan which
covers employees who meet certain length of service requirements. Contributions
of approximately $100,000 were made to the plan during each of the years ended
December 31, 1996, 1995 and 1994.
 
     Employees are also covered by the Penske Corporation Savings Retirement
Plan, a defined contribution plan under Section 401(k) of the Internal Revenue
Code. The Company's expense related to this plan, which began in July 1994, was
$80,000 in 1996, $66,000 in 1995 and $20,000 in 1994.
 
7. TAXES
 
     The provision for income taxes consists of the following (in thousands):
 
<TABLE>
<CAPTION>
                                                                 1996      1995      1994
                                                                 ----      ----      ----
<S>                                                             <C>       <C>       <C>
Current.....................................................    $5,753    $3,466    $3,173
Deferred....................................................       239       (56)     (141)
                                                                ------    ------    ------
Total.......................................................    $5,992    $3,410    $3,032
                                                                ======    ======    ======
</TABLE>
 
     A reconciliation of taxes computed at the federal statutory rate and the
consolidated effective rate is as follows (in thousands):
 
<TABLE>
<CAPTION>
                                                         1996       1995       1994
                                                         ----       ----       ----
<S>                                                     <C>        <C>        <C>
Income before income taxes..........................    $16,872    $10,184    $9,372
                                                        -------    -------    ------
Taxes computed at statutory rate....................    $ 5,905    $ 3,463    $3,186
Earnings taxable at shareholder level - CTW.........        (10)      (179)     (181)
Other...............................................         97        126        27
                                                        -------    -------    ------
Total income tax expense............................    $ 5,992    $ 3,410    $3,032
                                                        -------    -------    ------
Effective tax rate..................................       35.5%      33.5%     32.4%
                                                        =======    =======    ======
</TABLE>
 
     Temporary differences which give rise to deferred tax (assets) and
liabilities are as follows (in thousands):
 
<TABLE>
<CAPTION>
                                                                 1996      1995
                                                                 ----      ----
<S>                                                             <C>       <C>
Property....................................................    $8,969    $9,083
Other.......................................................         3      (350)
                                                                ------    ------
Total.......................................................    $8,972    $8,733
                                                                ======    ======
Current.....................................................    $    3    $ (382)
Non-current.................................................     8,969     9,115
                                                                ------    ------
Total.......................................................    $8,972    $8,733
                                                                ======    ======
</TABLE>
 
                                       25
<PAGE>   27
 
                   PENSKE MOTORSPORTS, INC. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
 
8. RELATED PARTY TRANSACTIONS
 
     The following is a summary of significant related party balances and
transactions as of and for the years ended December 31 (in thousands):
 
<TABLE>
<CAPTION>
                                                         1996      1995       1994
                                                         ----      ----       ----
<S>                                                     <C>       <C>        <C>
Balances included in assets and liabilities:
  Accounts receivable - affiliates..................    $  339    $   158    $   165
                                                        ======    =======    =======
  Accounts payable - affiliates.....................    $1,702    $ 1,658    $   350
                                                        ======    =======    =======
  Accrued expenses payable to affiliates............    $  405
                                                        ======
Other transactions:
  Dividends.........................................              $ 6,125    $ 9,240
  Advances from affiliates..........................               (2,525)    (7,590)
                                                                  -------    -------
  Net distribution to Parent........................              $ 3,600    $ 1,650
                                                                  =======    =======
  Sales to affiliates...............................    $2,005    $ 1,786    $ 1,547
                                                        ======    =======    =======
  Purchases from affiliates.........................    $  587    $   223    $   296
                                                        ======    =======    =======
</TABLE>
 
     The Parent bills the Company for services rendered and expenses incurred by
the Parent for the benefit of the Company. During the year ended December 31,
1996, the Company paid the Parent $478,000 for general and operating expenses.
The Company also paid the Parent $1.5 million for its portion of taxes relating
to periods prior to the IPO. Prior to the IPO income taxes were charged to the
Company for its allocated share of income taxes on the basis of the Company as a
separate tax group.
 
     The following table reflects the components of the Parent company charges
prior to 1996:
 
<TABLE>
<CAPTION>
                                                                           GENERAL AND
                                                               INCOME       OPERATING
                                                               TAXES        EXPENSES        TOTAL
                                                               ------      -----------      -----
<S>                                                          <C>           <C>            <C>
1995.....................................................    $3,410,000    $1,051,000     $4,461,000
1994.....................................................     3,032,000       968,000      4,000,000
</TABLE>
 
     During 1995, the Company received a capital contribution of $19,976,000
from PSH Corp., an affiliate.
 
     The Company has a five-year agreement with a shareholder of the Company to
provide sanitary wastewater treatment services to the California Speedway. The
agreement provides for annual payments of $88,800, adjusted annually by
increases in the Consumer Price Index. The agreement also grants an option to
the Company to purchase such shareholder's wastewater treatment facility.
 
     The Company has an agreement to reimburse a shareholder of the Company
$1,137,500 for costs incurred by such shareholder in connection with the
preparation of the California Speedway for its development and construction. As
of December 31, 1996, $812,500 of this commitment had been paid with the balance
due in 1997.
 
     The Company pays fees to the sanctioning bodies which conduct racing events
at its speedways, including the National Association for Stock Car Auto Racing,
Inc. (NASCAR). NASCAR is an affiliate of a significant shareholder. The Company,
through its subsidiaries, paid NASCAR sanction fees, prize money and points
funds of $3.8 million, $2.8 million and $2.3 million for the years ended
December 31, 1996, 1995 and 1994, respectively.
 
                                       26
<PAGE>   28
 
                   PENSKE MOTORSPORTS, INC. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                  YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
 
9. COMMON STOCK AND STOCK OPTIONS
 
     Prior to the completion of the IPO, the Company effected a recapitalization
pursuant to which the Company (i) increased its authorized shares of common
stock to 50,000,000 shares, (ii) effected a 91.575-to-one share split, and (iii)
converted 15,000 shares of outstanding preferred stock to 1,373,625 shares of
common stock.
 
     The pro forma net income per share reflects the weighted average number of
post-split shares outstanding of 12,128,920 and 8,077,245 for the years ended
December 31, 1996 and 1995, including the dilutive effect of the number of
shares issued equivalent to the $2.9 million capital distribution of 121,667
shares based on the offering price of $24 per share.
 
     In March 1996, the stockholders of the Company approved a stock incentive
plan whereby key employees and certain outside consultants and advisors of the
Company and its subsidiaries may receive awards of stock options, stock
appreciation rights or restricted stock. A maximum of 400,000 shares of common
stock may be issued under this plan. During 1996, the Company granted options to
purchase 75,000 shares of common stock to certain officers of the Company at a
price of $24 per share, all of which were outstanding as of December 31, 1996.
These options may be exercised incrementally over a period of five years and
expire after ten years. As of December 31, 1996, 10%, or 7,500, of these options
were exercisable. The weighted average fair value of options granted during the
year is $9.90 per share.
 
     The Company applies APB Opinion 25 and related Interpretations in
accounting for stock options. Accordingly, no compensation cost has been
recognized in the consolidated statements of operations. If the Company had
recognized compensation cost in accordance with Statement of Financial
Accounting Standards No. 123, Accounting for Stock-Based Compensation, the
Company would have reported net income of $10.8 million and earnings per share
of $.89. The Black-Sholes valuation model was used, assuming an average life of
the options of five years, a discount rate of 6.15%, no dividend payout and a
volatility of 35%.
 
NOTE 10 -- SELECTED QUARTERLY DATA (UNAUDITED)
 
     The following table presents the Company's quarterly results for the most
recent eight quarters (in thousands, except per share amounts).
 
<TABLE>
<CAPTION>
                                  FIRST QUARTER      SECOND QUARTER       THIRD QUARTER      FOURTH QUARTER
                                -----------------   -----------------   -----------------   -----------------
                                 1996      1995      1996      1995      1996      1995      1996      1995
                                 ----      ----      ----      ----      ----      ----      ----      ----
<S>                             <C>       <C>       <C>       <C>       <C>       <C>       <C>       <C>
Revenue.......................  $ 3,642   $ 2,862   $24,614   $17,310   $23,962   $19,197   $ 2,957   $ 2,636
Operating income..............   (1,521)   (1,529)    9,829     6,631     9,321     7,393    (2,707)   (1,416)
Net income (loss).............     (990)   (1,157)    6,717     4,237     6,499     4,812    (1,346)   (1,118)
Net income (loss) per share...  $  (.10)  $  (.15)  $   .52   $   .54   $   .50   $   .61   $  (.10)  $  (.13)
</TABLE>
 
     Net income per share for the first quarter of 1996 and for each of the
quarters in 1995 are pro forma to reflect the dilutive effect of the number of
shares issued equivalent to the $2.9 million capital distribution of 121,667
shares based on the offering price of $24 per share (see notes 3 and 9).
 
                                       27
<PAGE>   29
 
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
                          INDEPENDENT AUDITORS' REPORT
 
Stockholders and Board of Directors
Penske Motorsports, Inc.
 
     We have audited the accompanying consolidated balance sheets of Penske
Motorsports, Inc., and subsidiaries as of December 31, 1996 and 1995, and the
related consolidated statements of income, stockholders' equity, and cash flows
for each of the three years in the period ended December 31, 1996. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
 
     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
 
     In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of the Company as of December 31,
1996 and 1995, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1996, in conformity with
generally accepted accounting principles.
 
DELOITTE & TOUCHE LLP     DELOITTE & TOUCHE LOGO
 
Detroit, Michigan
January 20, 1997
 
                                       28
<PAGE>   30
 
                              REPORT OF MANAGEMENT
 
     The consolidated financial statements of Penske Motorsports, Inc. and
subsidiaries (the Company) have been prepared by management and have been
audited by the Company's independent auditors, Deloitte & Touche LLP. Management
is responsible for the consolidated financial statements, which have been
prepared in conformity with generally accepted accounting principles and include
amounts based on management's judgments.
 
     Management is also responsible for maintaining internal accounting control
systems designed to provide reasonable assurance, at appropriate cost, that
assets are recorded in accordance with established policies and procedures. The
Company's systems are under continuing review and are supported by, among other
things, business conduct and other written guidelines and the selection and
training of qualified personnel.
 
     The Board of Directors is responsible for the Company's financial and
accounting policies, practices and reports. Its Audit Committee meets annually
with the independent auditors and representatives of management to discuss and
make inquiries into their activities. The independent auditors have free access
to the Audit Committee, with and without management representatives in
attendance, to discuss the results of the audit, the adequacy of internal
accounting controls, and the quality of the financial reporting.
 
     It is management's conclusion that the system of internal accounting
controls at December 31, 1996 provides reasonable assurance that the books and
records reflect the transactions of the Company and that the Company has
complied with its established policies and procedures.
 
ROGER S. PENSKE
Roger S. Penske
Chairman
RICHARD J. PETERS
Richard J. Peters
President and Chief Executive Officer
 
January 20, 1997
 
                                       29
<PAGE>   31
 
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE
 
     None.
 
                                    PART III
 
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
     Information regarding executive officers required by this Item is set forth
as a Supplementary Item at the end of Part I hereof (pursuant to Instruction 3
to Item 401(b) of Regulation S-K). Other information required by this Item will
be contained in the Company's definitive Proxy Statement for its 1997 Annual
Meeting of Stockholders, to be filed on or before April 29, 1997, and such
information is incorporated herein by reference.
 
ITEM 11: EXECUTIVE COMPENSATION
 
     Information required by this Item will be contained in the Company's
definitive Proxy Statement for its 1997 Annual Meeting of Stockholders to be
filed on or before April 29, 1997, and such information is incorporated herein
by reference.
 
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     Information required by this Item will be contained in the Company's
definitive Proxy Statement for its 1997 Annual Meeting of Stockholders to be
filed on or before April 29, 1997, and such information is incorporated herein
by reference.
 
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     Information required by this Item will be contained in the Company's
definitive Proxy Statement for its 1997 Annual Meeting of Stockholders to be
filed on or before April 29, 1997, and such information is incorporated herein
by reference.
 
                                    PART IV
 
ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
(a) Listing of Documents:
 
     (1) Financial Statements. The Company's consolidated Financial Statements
         included in Item 8 hereof, as required at December 31, 1996 and 1995,
         and for the years ended December 31, 1996, 1995, and 1994, consist of
         the following:
 
        Consolidated Balance Sheets
        Consolidated Statements of Income
        Consolidated Statements of Changes in Stockholder's Equity
        Consolidated Statements of Cash Flows
        Notes to Consolidated Financial Statements
 
     (2) Financial Statement Schedules for 1996, 1995, and 1994.
 
         None. These schedules are omitted because the information required to
         be contained therein is disclosed elsewhere in the financial statements
         or the amounts involved are not sufficient to require submission or the
         schedule is otherwise not required to be submitted.
 
                                       30
<PAGE>   32
 
     (3) Exhibits.
 
                                    EXHIBITS
 
<TABLE>
<CAPTION>
EXHIBIT
 NUMBER
-------
                                DOCUMENT
------------------------------------------------------------------------
<S>         <C>
(B)3.1      Amended and Restated Certificate of Incorporation of Penske
            Motorsports, Inc.
(B)3.2      Amended and Restated Bylaws of Penske Motorsports, Inc.
(B)4.1      Form of Common Stock Certificate
(C)10.1     Credit Agreement dated August 16, 1996 between Penske
            Motorsports, Inc., and NationsBank N.A.
(A)10.2     Purchase Agreement and Escrow Instructions dated October 8,
            1996 among Kaiser Ventures, Inc., The California Speedway
            Corporation and Penske Motorsports, Inc.
(A)10.3     Conditional Demand Registration Rights Agreement dated
            December 12, 1996, between Penske Motorsports, Inc., and
            Kaiser Ventures, Inc.
(A)10.4     Water Rights Agreement Extension dated December 11, 1996
            between Kaiser Ventures Inc., and The California Speedway
            Corporation
(B)10.11    Organization Agreement, dated November 22, 1995 by and among
            PSH Corp., Kaiser Ventures, Inc., and Penske Motorsports,
            Inc. (f/k/a Penske Speedway Holdings Corp.)
(B)10.12    Shareholders Agreement, dated November 22, 1995 by and among
            PSH Corp., Kaiser Ventures, Inc., and Penske Motorsports,
            Inc. (f/k/a Penske Speedway Holdings Corp.)
(B)10.13    Water Rights Agreement, dated November 21, 1995 by and
            between Kaiser Ventures, Inc., and The California Speedway
            Corporation (successor by merger to Speedway Development
            Corporation).
(B)10.14    Access Agreement, dated as of November 22, 1995, by and
            among Kaiser Ventures, Inc., Kaiser Land Development, Inc.,
            and The California Speedway Corporation.
(B)10.15    Sewer Services Agreement, dated as of November 21, 1995
            between Kaiser Ventures, Inc., and The California Speedway
            Corporation (successor by merger to Speedway Development
            Corporation).
(B)10.16*   1996 Penske Motorsports Stock Incentive Plan
(B)10.17    Lease Agreement, dated December 1, 1994, between Michigan
            Speedway, Inc. f/k/a Penske Speedway Inc.) and Motorsports
            International Corp.
(B)10.18    Trade Name and Trademark Agreement dated October 18, 1995,
            between Penske Speedway, Inc., Penske Speedways Holding
            Corp., and Penske System, Inc.
(B)10.24    Registration Rights Agreement, dated March 21, 1996, between
            Penske Motorsports, Inc., and Kaiser Ventures, Inc.
(B)10.25    First Amendment to Shareholders Agreement, dated March 21,
            1996, by and among PSH Corp., Kaiser Ventures, Inc., and
            Penske Motorsports, Inc. (f/k/a Penske Speedways Holding
            Corp.)
(B)10.26    Agreement, dated March 21, 1996, among PSH Corp., Penske
            Motorsports, Inc., and Kaiser Ventures, Inc., amending the
            Organization Agreement
(B)10.27    Stock Purchase Agreement, dated as of March 21, 1996, by and
            among Roger S. Penske and J.W.A. Woody, Jr., and Penske
            Motorsports, Inc.
(B)10.28    Stock Purchase Agreement, dated as of March 21, 1996, by and
            among Competition Tire West, Inc., Competition Tire East,
            Inc., Checkered Flag, Inc., and Penske Motorsports, Inc.
(B)10.29    Stock Purchase Agreement, dated as of March 6, 1996, by and
            among Penske Motorsports, Inc., and James E. Williams.
(B)21.1     Subsidiaries of Penske Motorsports, Inc.
(A)23.1     Consent of Deloitte & Touche, LLP
(A)27       Financial Data Schedule
</TABLE>
 
                                       31
<PAGE>   33
 
------------------------
LEGEND FOR EXHIBITS
 
(A) Filed herewith.
 
(B) Incorporated by reference from the Company's Registration Statement No.
    333-692 on Form S-1, filed with the SEC on January 29, 1996, as amended.
 
(C) Incorporated by reference from the Company's Quarterly Report on Form 1O-Q
    for the quarter ended September 30, 1996, filed with the Securities and
    Exchange Commission.
 
 *  Denotes a compensatory plan, contract or arrangement.
 
     (4) Undertakings. The Company will furnish to any stockholder a copy of the
above exhibits upon the written request of such stockholder and the payment to
the Company of the reasonable expenses incurred by the Company in furnishing
such copy.
 
(b) Reports on Form 8-K
 
     The Company filed no Reports on Form 8-K with the Securities and Exchange
     Commission during the quarter ended December 31, 1996.
 
                                       32
<PAGE>   34
 
                                   SIGNATURES
 
     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Detroit, State of Michigan, on the 26th day of March, 1997.
 
                                          PENSKE MOTORSPORTS, INC.
 
                                          By:      /s/ RICHARD J. PETERS
 
                                            ------------------------------------
                                                     RICHARD J. PETERS
                                                  Chief Executive Officer
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, the
report has been signed below by the following persons in the capacities and on
the date indicated.
 
<TABLE>
<CAPTION>
                       SIGNATURES                                     TITLE                  DATES
                       ----------                                     -----                  -----
<C>                                                       <S>                            <C>
                  /s/ ROGER S. PENSKE                     Chairman of the Board          March 26, 1997
--------------------------------------------------------
                    ROGER S. PENSKE
 
                /s/ WALTER P. CZARNECKI                   Vice Chairman of the Board     March 26, 1997
--------------------------------------------------------
                  WALTER P. CZARNECKI
 
                 /s/ RICHARD J. PETERS                    President, Chief Executive     March 26, 1997
--------------------------------------------------------    Officer and Director
                   RICHARD J. PETERS                        (Principal executive
                                                            officer)
 
                    /s/ H. LEE COMBS                      Director                       March 26, 1997
--------------------------------------------------------
                      H. LEE COMBS
 
                 /s/ GARY W. DICKINSON                    Director                       March 26, 1997
--------------------------------------------------------
                   GARY W. DICKINSON
 
                 /s/ WILLIAM C. FRANCE                    Director                       March 26, 1997
--------------------------------------------------------
                   WILLIAM C. FRANCE
 
                 /s/ GREGORY W. PENSKE                    Director                       March 26, 1997
--------------------------------------------------------
                   GREGORY W. PENSKE
 
                /s/ RICHARD E. STODDARD                   Director                       March 26, 1997
--------------------------------------------------------
                  RICHARD E. STODDARD
 
                 /s/ JAMES E. WILLIAMS                    Director                       March 26, 1997
--------------------------------------------------------
                   JAMES E. WILLIAMS
 
                  /s/ JAMES H. HARRIS                     Principal Financial and        March 26, 1997
--------------------------------------------------------    Accounting Officer
                    JAMES H. HARRIS
</TABLE>
 
                                       33
<PAGE>   35
                                   EXHIBITS
                                   --------


<TABLE>
<CAPTION>

EXHIBIT                 
NUMBER          DOCUMENT
------          --------
<S>             <C>

(B)3.1          Amended and Restated Certificate of Incorporation of Penske
                Motorsports, Inc. 
(B)3.2          Amended and Restated Bylaws of Penske Motorsports, Inc.
(B)4.1          Form of Common Stock Certificate
(C)10.1         Credit Agreement dated August 16, 1996 between Penske
                Motorsports, Inc., and NationsBank N.A. 
(A)10.2         Purchase Agreement and Escrow Instructions dated October 8, 1996
                among Kaiser Ventures, Inc., The California  
                Speedway Corporation and Penske Motorsports, Inc.
(A)10.3         Conditional Demand Registration Rights Agreement dated December
                12, 1996 between Penske Motorsports, Inc., and 
                Kaiser Ventures, Inc.
(A)10.4         Water Rights Agreement Extension dated December 11, 1996
                between Kaiser Ventures Inc., and The California Speedway 
                Corporation
(B)10.11        Organization Agreement, dated November 22, 1995 by and among
                PSH Corp., Kaiser Ventures, Inc., and Penske 
                Motorsports, Inc. (f/k/a Penske Speedway Holdings Corp.)
(B)10.12        Shareholders Agreement, dated November 22, 1995 by and among
                PSH Corp., Kaiser Ventures, Inc., and Penske 
                Motorsports, Inc. (f/k/a Speedway Holdings Corp.)
(B)10.13        Water Rights Agreement, dated November 21, 1995 by and between
                Kaiser Ventures, Inc., and The California Speedway Corporation
                (successor by merger to Speedway Development Corporation).
(B)10.14        Access Agreement, dated as of November 22, 1995, by and among
                Kaiser Ventures, Inc., Kaiser Land Development, Inc., and The
                California Speedway Corporation.
(B)10.15        Sewer Services Agreement, dated as of November 21, 1995 between
                Kaiser Ventures, Inc., and The California Speedway Corporation
                (successor by merger to Speedway Development Corporation).
(B)10.16*       1996 Penske Motorsports Stock Incentive Plan
(B)10.17        Lease Agreement, dated December 1, 1994, between Michigan
                Speedway, Inc. (f/k/a Penske Speedway Inc.) and Motorsports
                International Corp.
(B)10.18        Trade Name and Trademark Agreement dated October 18, 1995,
                between Penske Speedway, Inc., Penske Speedways Holding Corp.,
                and Penske System, Inc.
(B)10.24        Registration Rights Agreement, dated March 21, 1996, between
                Penske Motorsports, Inc. and Kaiser Ventures, Inc.
(B)10.25        First Amendment to Shareholders Agreement, dated March 21, 1996,
                by and among PSH Corp., Kaiser Ventures, Inc., and Penske
                Motorsports, Inc. (f/k/a Penske Speedways Holding Corp.)
(B)10.26        Agreement, dated March 21, 1996, among PSH Corp., Penske
                Motorsports, Inc., and Kaiser Ventures, Inc., amending the
                Organization Agreement 
(B)10.27        Stock Purchase Agreement, dated as of March 21, 1996, by and
                among Roger S. Penske and J.W.A. Woody, Jr., and Penske
                Motorsports, Inc.
(B)10.28        Stock Purchase Agreement, dated as of March 21, 1996, by and
                among Competition Tire West, Inc., Competition Tire East, Inc.,
                Checkered Flag, Inc., and Penske Motorsports, Inc.
(B)10.29        Stock Purchase Agreement, dated as of March 6, 1996, by and
                among Penske Motorsports, Inc., and James E. Williams.
(B)21.1         Subsidiaries of Penske Motorsports, Inc.
(A)23.1         Consent of Deloitte & Touche, LLP.
(A)27           Financial Data Schedule

--------------
LEGEND FOR EXHIBITS

(A)             Filed herewith.
(B)             Incorporated by reference from the Company's Registration
                Statement No. 333-692 on Form S-1, filed with the SEC on January
                29, 1996, as amended. 
(C)             Incorporated by reference from the Company's Quarterly Report on
                Form 10-Q for the quarter ended September 30, 1996, filed with
                the SEC.
--------------

*Denotes a compensatory plan, contract or arrangement.
</TABLE>