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The Madison Square Garden Company Reports Fiscal 2014 Second Quarter Results



The Madison Square Garden Company Reports Fiscal 2014 Second Quarter Results

 Second quarter revenues of $509.4 million, a 31% increase compared to prior
                             year second quarter

 Second quarter AOCF of $126.6 million, a 17% increase compared to prior year
                                second quarter

 Second quarter operating income of $96.5 million, a 19% increase compared to
                          prior year second quarter

       Reinvented Forum in Inglewood, CA re-opened on January 15, 2014

NEW YORK, Feb. 7, 2014 (GLOBE NEWSWIRE) -- The Madison Square Garden Company
(Nasdaq:MSG) today reported financial results for the fiscal 2014 second
quarter ended December 31, 2013.

Fiscal 2014 second quarter revenues of $509.4 million grew 31%, as compared to
the prior year second quarter, as all three of the Company's business segments
delivered increased revenues, partially offset by an increase in inter-segment
eliminations. Fiscal 2014 second quarter adjusted operating cash flow
("AOCF")^(1) of $126.6 million increased 17%, as compared to the prior year
second quarter, primarily due to an AOCF increase in the MSG Sports and MSG
Entertainment segments, partially offset by lower AOCF in the MSG Media
segment. Fiscal 2014 second quarter operating income of $96.5 million
increased 19% and net income of $60.5 million ($0.77 per diluted share)
increased 29%, both as compared to the prior year second quarter.

The comparability of fiscal 2014 second quarter results to the prior year
second quarter was significantly impacted by last year's NHL work stoppage,
which delayed the start of the 2012-13 regular season by approximately three
months to January 19, 2013 and led to a shortened 48-game regular season. As a
result, the New York Rangers did not play regular season games in the fiscal
2013 second quarter versus playing a combined 41 home and away games in the
fiscal 2014 second quarter. In addition, MSG Networks, which serves as the
local broadcast home to four NHL teams, did not broadcast NHL regular season
games in the fiscal 2013 second quarter versus broadcasting a combined 154
games in the fiscal 2014 second quarter.

President and CEO Hank Ratner said: "Our Company delivered solid increases in
total company revenues and AOCF in the second quarter, as we benefited from
the return to a full NHL regular season, the continued positive impact of the
Transformation project and improvement in our entertainment business. At the
same time, we're approaching the end of a significant capital investment cycle
for our Company with the successful completion of two important milestones --
the October debut of the fully transformed Madison Square Garden Arena,
followed by the January re-opening of the reinvented Forum in Inglewood,
California. With the completion of these historic projects, we have
successfully established two world-class venues in two of the country's top
entertainment markets, further expanding our position as one of the country's
premier live entertainment companies. Looking ahead, we remain focused on
maximizing growth from our existing asset portfolio, while pursuing additional
investment opportunities to drive continued value creation over the
long-term."

Results from Operations

Segment results for the quarters ended December 31, 2013 and 2012 are as
follows:

              Revenues             AOCF                    Operating Income (Loss)
$ millions    F'Q2   F'Q2   %      F'Q2   F'Q2 2013 %      F'Q2   F'Q2 2013 %
              2014   2013   Change 2014             Change 2014             Change
MSG Media     $180.7 $156.8 15%    $85.8  $95.6     (10)%  $80.7  $90.2     (11)%
MSG           163.1  151.1  8%     42.3   30.0      41%    38.2   26.2      46%
Entertainment
MSG Sports    183.4  89.9   104%   1.1    (14.5)    --     (2.9)  (18.3)    84%
Other
(includes     (17.8) (9.9)  (80)%  (2.6)  (2.9)     8%     (19.4) (17.1)    (14)%
eliminations)
Total Company $509.4 $387.9 31%    $126.6 $108.3    17%    $96.5  $81.0     19%

Note: Does not foot due to rounding

1. See definition of adjusted operating cash flow ("AOCF") included in the
discussion of non-GAAP financial measures below.

MSG Media

For the fiscal 2014 second quarter as compared to the prior year period, MSG
Media revenues of $180.7 million increased 15%. Affiliation fee revenue
increased $22.2 million, primarily due to the return to a full NHL regular
season schedule and, to a lesser extent, higher affiliation rates. Advertising
revenue increased $5.9 million, primarily due to the return to a full NHL
regular season schedule, partially offset by other net advertising revenue
decreases. Other revenues decreased $4.2 million, primarily due to the
expiration in April 2013 of a short-term programming licensing
agreement. Second quarter AOCF of $85.8 million decreased 10% and operating
income of $80.7 million decreased 11%, both primarily due to an increase in
direct operating expenses, largely offset by the increase in revenues and, to
a lesser extent, a decrease in selling, general and administrative
expenses. The increase in direct operating expenses was mainly due to the
return to a full NHL regular season schedule.

MSG Entertainment

For the fiscal 2014 second quarter as compared to the prior year period, MSG
Entertainment revenues of $163.1 million increased 8%. The increase was
primarily due to higher revenues for the Radio City Christmas Spectacular
franchise, higher event-related revenues at the Beacon Theatre and The Theater
at Madison Square Garden, as well as higher venue-related sponsorship and
signage and suite rental fee revenues, which include the continued positive
impact of the Transformation. Second quarter AOCF of $42.3 million increased
41% and operating income of $38.2 million increased 46%, both primarily due to
the increase in revenues and, to a lesser extent, a decrease in direct
operating expenses, partially offset by an increase in selling, general and
administrative expenses. Direct operating expenses in the prior year second
quarter included a $5.0 million impairment charge related to a production of
the Radio City Christmas Spectacular outside of New York.

MSG Sports

For the fiscal 2014 second quarter as compared to the prior year period, MSG
Sports revenues of $183.4 million increased 104%. The increase in total
segment revenues was primarily attributable to the return of the New York
Rangers to a full regular season schedule. In addition, segment revenues were
positively impacted by the continued benefits of the Transformation
project. On an overall basis, the increase in revenues was primarily due to
higher professional sports team ticket-related revenue, suite rental fee
revenue, food, beverage and merchandise sales, sponsorship and signage
revenues, inter-segment broadcast rights fees, and revenues from league
distributions. Second quarter AOCF of $1.1 million improved by $15.6 million
and the operating loss of $2.9 million improved by $15.4 million, both mainly
due to the increase in revenues, largely offset by higher direct operating
expenses (primarily a result of the return to a full Rangers regular season
schedule) and, to a lesser extent, higher selling, general and administrative
expenses. On an overall basis, the increase in direct operating expenses was
primarily due to higher team personnel compensation expenses, net provisions
for NBA luxury tax and NBA and NHL revenue sharing expense, as well as higher
other team operating expenses.

About The Madison Square Garden Company

The Madison Square Garden Company is a fully integrated sports, media and
entertainment business. The Company is comprised of three business segments:
MSG Sports, MSG Media and MSG Entertainment, which are strategically aligned
to work together to drive the Company's overall business, which is built on a
foundation of iconic venues and compelling content that the Company creates,
produces, presents and/or distributes through its programming networks and
other media assets. MSG Sports owns and operates the following sports
franchises: the New York Knicks (NBA), the New York Rangers (NHL), the New
York Liberty (WNBA), and the Hartford Wolf Pack (AHL). MSG Sports also
features the presentation of a wide variety of live sporting events including
professional boxing, college basketball, bull riding and tennis. MSG Media is
a leader in production and content development for multiple distribution
platforms, including content originating from the Company's venues. MSG
Media's television networks consist of regional sports networks, MSG Network
and MSG+, collectively referred to as MSG Networks; and Fuse, a national
television network dedicated to music. MSG Networks also include
high-definition channels, MSG HD and MSG+ HD, and Fuse includes its
high-definition channel, Fuse HD. MSG Entertainment is one of the country's
leaders in live entertainment. MSG Entertainment creates, produces and/or
presents a variety of live productions, including the Radio City Christmas
Spectacular featuring the Radio City Rockettes. MSG Entertainment also
presents or hosts other live entertainment events such as concerts, family
shows and special events in the Company's diverse collection of venues. These
venues consist of Madison Square Garden, The Theater at Madison Square Garden,
Radio City Music Hall, the Beacon Theatre, the Forum in Inglewood, CA, The
Chicago Theatre, and the Wang Theatre in Boston, MA. More information is
available at www.themadisonsquaregardencompany.com.

The Madison Square Garden Company logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=15647

Non-GAAP Financial Measures

We define adjusted operating cash flow ("AOCF"), which is a non-GAAP financial
measure, as operating income (loss) before 1) depreciation, amortization and
impairments of property and equipment and intangible assets, 2) share-based
compensation expense or benefit, and 3) restructuring charges or credits.
Because it is based upon operating income (loss), AOCF also excludes interest
expense (including cash interest expense) and other non-operating income and
expense items. We believe that the exclusion of share-based compensation
expense or benefit allows investors to better track the performance of the
various operating units of our business without regard to either the
distortive effects of fluctuating stock prices or the settlement of an
obligation that is not expected to be made in cash.

We believe AOCF is an appropriate measure for evaluating the operating
performance of our business segments and the Company on a consolidated basis.
AOCF and similar measures with similar titles are common performance measures
used by investors and analysts to analyze our performance. Internally, we use
revenues and AOCF measures as the most important indicators of our business
performance, and evaluate management's effectiveness with specific reference
to these indicators. AOCF should be viewed as a supplement to and not a
substitute for operating income (loss), net income (loss), cash flows from
operating activities, and other measures of performance and/or liquidity
presented in accordance with U.S. generally accepted accounting principles
("GAAP"). Since AOCF is not a measure of performance calculated in accordance
with GAAP, this measure may not be comparable to similar measures with similar
titles used by other companies. For a reconciliation of AOCF to operating
income (loss), please see below.

This press release may contain statements that constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. Investors are cautioned that any such forward-looking statements are
not guarantees of future performance or results and involve risks and
uncertainties, and that actual results or developments may differ materially
from those in the forward-looking statements as a result of various factors,
including financial community and rating agency perceptions of the Company and
its business, operations, financial condition and the industry in which it
operates and the factors described in the Company's filings with the
Securities and Exchange Commission, including the sections titled "Risk
Factors" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" contained therein. The Company disclaims any obligation
to update any forward-looking statements contained herein.

Conference Call Information:

The conference call will be Webcast live today at 10:00 a.m. ET at
www.themadisonsquaregardencompany.com

Conference call dial-in number is 877-347-9170 / Conference ID Number 35383953

Conference call replay number is 855-859-2056 / Conference ID Number 35383953
until February 14, 2014

THE MADISON SQUARE GARDEN COMPANY
                                                                       
CONSOLIDATED OPERATIONS DATA AND RECONCILIATION
(In thousands, except per share data)
(Unaudited)
                                                                       
                                          Three Months Ended Six Months Ended
                                          December 31,       December 31,
                                          2013      2012     2013     2012
                                                                       
Revenues                                  $509,379  $387,886 $724,964 $592,052
                                                                       
Adjusted operating cash flow              $126,572  $108,288 $192,072 $171,597
Share-based compensation expense          (5,637)   (5,521)  (8,467)  (8,940)
Operating income before depreciation and  120,935   102,767  183,605  162,657
amortization
Depreciation and amortization (incl.      (24,388)  (21,744) (47,195) (41,444)
impairments)
Operating income                          96,547    81,023   136,410  121,213
Other income (expense):                                                
Equity in loss of nonconsolidated         (738)     --       (738)    --
affiliates^(1)
Interest expense, net                     (1,213)   (1,284)  (2,501)  (2,414)
Miscellaneous                             17        66       23       102
Income from operations before income      94,613    79,805   133,194  118,901
taxes
Income tax expense                        (34,104)  (32,894) (48,817) (51,385)
Net income                                $60,509   $46,911  $84,377  $67,516
Basic earnings per common share           $0.79     $0.62    $1.10    $0.89
Diluted earnings per common share         $0.77     $0.60    $1.08    $0.87
                                                                       
Basic weighted-average number of common   77,035    75,914   77,024   75,770
shares outstanding
Diluted weighted-average number of common 78,116    77,889   78,109   77,829
shares outstanding

  ADJUSTMENTS TO RECONCILE ADJUSTED OPERATING CASH FLOW TO OPERATING INCOME
                                    (LOSS)

The following is a description of the adjustments to operating income (loss)
in arriving at adjusted operating cash flow as described in this earnings
release:

  * Depreciation and amortization. This adjustment eliminates depreciation,
    amortization and impairments of property and equipment and intangible
    assets in all periods.
  * Share-based compensation expense. This adjustment eliminates the
    compensation expense relating to restricted stock, restricted stock units,
    stock options and stock appreciation rights granted under our employee
    stock plans and non-employee director plans in all periods.

1. Equity in loss of nonconsolidated affiliates for the three and six months
ended December 31, 2013 solely reflects amortization expense for intangible
assets associated with the investments.

THE MADISON SQUARE GARDEN COMPANY
 
CONSOLIDATED OPERATIONS DATA
(Dollars in thousands)
(Unaudited)
 
REVENUES
                                                     Three Months Ended  
                                                     December 31,       %
                                                     2013      2012     Change
                                                                         
MSG Media                                            $180,709  $156,770 15%
MSG Entertainment                                    163,100   151,122  8%
MSG Sports                                           183,389   89,903   104%
Other (including
Inter-segment                                        (17,819)  (9,909)  (80)%
eliminations)
Total Madison Square                                 $509,379  $387,886 31%
Garden Company.
                                                                         
                                                     Six Months Ended    
                                                     December 31,       %
                                                     2013      2012     Change
                                                                         
MSG Media                                            $347,324  $316,308 10%
MSG Entertainment                                    191,725   181,899  5%
MSG Sports                                           221,554   121,467  82%
Other (including
Inter-segment                                        (35,639)  (27,622) (29)%
eliminations)
Total Madison Square                                 $724,964  $592,052 22%
Garden Company.
                                                                         
ADJUSTED OPERATING CASH FLOW AND OPERATING INCOME (LOSS)
                                                                         
                           Adjusted Operating        Operating Income    
                           Cash Flow                 (Loss)              
                           Three Months Ended        Three Months Ended  
                           December 31,       %      December 31,       %
                           2013      2012     Change 2013      2012     Change
                                                                         
MSG Media                  $85,794   $95,618  (10)%  $80,664   $90,183  (11)%
MSG Entertainment          42,320    30,036   41%    38,183    26,228   46%
MSG Sports                 1,102     (14,484) --     (2,911)   (18,322) 84%
All other                  (2,644)   (2,882)  8%     (19,389)  (17,066) (14)%
Total Madison Square       $126,572  $108,288 17%    $96,547   $81,023  19%
Garden Company
                                                                         
                           Adjusted Operating        Operating Income    
                           Cash Flow                 (Loss)              
                           Six Months Ended          Six Months Ended    
                           December 31,       %      December 31,       %
                           2013      2012     Change 2013      2012     Change
                                                                         
MSG Media                  $167,244  $172,322 (3)%   $157,367  $161,196 (2)%
MSG Entertainment          27,310    17,477   56%    19,774    10,198   94%
MSG Sports                 4,025     (13,023) --     (3,321)   (20,422) 84%
All other                  (6,507)   (5,179)  (26)%  (37,410)  (29,759) (26)%
Total Madison Square       $192,072  $171,597 12%    $136,410  $121,213 13%
Garden Company

                                                                  
THE MADISON SQUARE GARDEN COMPANY                                 
                                                                  
CONSOLIDATED BALANCE SHEETS                                       
(In thousands, except per share data)                             
(Unaudited)                                                       
                                                                  
                                               December 31, 2013 June 30, 2013
ASSETS                                                            
Current Assets:                                                   
Cash and cash equivalents                      $154,529          $277,913
Restricted cash                                12,402            8,413
Accounts receivable, net                       149,953           145,728
Net related party receivables                  26,413            18,565
Prepaid expenses                               53,525            41,215
Other current assets                           25,215            20,339
Total current assets                           422,037           512,173
Investments in and loans to nonconsolidated    150,405           --
affiliates
Property and equipment, net                    1,293,156         1,135,180
Amortizable intangible assets, net             85,506            90,705
Indefinite-lived intangible assets             158,636           158,636
Goodwill                                       742,492           742,492
Other assets                                   94,958            93,028
                                               $2,947,190        $2,732,214
                                                                  
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY                              
Current Liabilities:                                              
Accounts payable                               $29,092           $16,006
Net related party payables                     1,122             283
Accrued liabilities:                                              
Employee related costs                         59,785            70,663
Other accrued liabilities                      246,869           221,405
Deferred revenue                               328,977           237,537
Total current liabilities                      665,845           545,894
Defined benefit and other postretirement       58,872            59,726
obligations
Other employee related costs                   40,974            45,370
Other liabilities                              57,040            58,536
Deferred tax liability                         553,403           543,753
Total liabilities                              1,376,134         1,253,279
Commitments and contingencies                                     
Stockholders' Equity:                                             
Class A Common stock, par value $0.01, 360,000
shares authorized; 63,320 and 63,268 shares    639               639
outstanding as of December 31, 2013 and June
30, 2013, respectively
Class B Common stock, par value $0.01, 90,000
shares authorized; 13,589 shares outstanding   136               136
as of December 31, 2013 and June 30, 2013
Preferred stock, par value $0.01, 45,000       --                --
shares authorized; none outstanding
Additional paid-in capital                     1,077,151         1,070,764
Treasury stock, at cost, 555 and 596 shares as
of December 31, 2013 and June 30, 2013,        (13,200)          (14,179)
respectively
Retained earnings                              522,171           437,794
Accumulated other comprehensive loss           (15,841)          (16,219)
Total stockholders' equity                     1,571,056         1,478,935
                                               $2,947,190        $2,732,214

 
THE MADISON SQUARE GARDEN COMPANY
                                                                 
SELECTED CASH FLOW INFORMATION
(Dollars in thousands)
(Unaudited)
                                                                 
                                                 Six Months Ended December 31,
                                                 2013           2012
Net cash provided by operating activities        $223,867       $203,965
Net cash used in investing activities            (345,994)      (159,313)
Net cash used in financing activities            (1,257)        (2,558)
Net increase (decrease) in cash and cash         (123,384)      42,094
equivalents
Cash and cash equivalents at beginning of period 277,913        206,500
Cash and cash equivalents at end of period       $154,529       $248,594

CONTACT: Kimberly Kerns
         Senior Vice President
         Communications
         The Madison Square Garden Company
         (212) 465-6442
        
         Ari Danes, CFA
         Vice President
         Investor Relations
         The Madison Square Garden Company
         (212) 465-6072

The Madison Square Garden Company logo
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