The Madison Square Garden Company Reports Fourth Quarter and Fiscal 2014 Results

The Madison Square Garden Company Reports Fourth Quarter and Fiscal 2014
Results

NEW YORK, Aug. 20, 2014 (GLOBE NEWSWIRE) -- The Madison Square Garden Company
(Nasdaq:MSG) today reported financial results for the fourth quarter and
fiscal year ended June 30, 2014.

Fiscal 2014 revenues of approximately $1.56 billion grew 16%, as compared to
the prior year, with increases in all three of the Company's business
segments. Adjusted operating cash flow ("AOCF")^(1) of $312.8 million
decreased 12%, as compared to the prior year, primarily due to lower AOCF
results in the MSG Sports segment and an increase in unallocated corporate
expenses ("Other"). Operating income of $184.1 million decreased 27% and net
income of $115.1 million ($1.47 per diluted share) decreased 19%, both as
compared to the prior year. Excluding the impact of the exercise of an NHL
compliance buyout in the fourth quarter, as well as increased expenses related
to executive management transition costs and the postponement of the Company's
new large-scale theatrical production in the third quarter, fiscal 2014 total
company AOCF would have been $363.7 million and operating income would have
been $239.5 million.

Fiscal 2014 fourth quarter revenues of $371.7 million grew 10%, as compared to
the prior year fourth quarter, primarily due to an increase in revenues in the
MSG Entertainment and MSG Sports segments. AOCF of $55.0 million decreased
40%, as compared to the prior year fourth quarter, due to lower AOCF results
in the MSG Sports segment along with an increase in unallocated corporate
expenses, partially offset by improved AOCF results at the MSG Media and MSG
Entertainment segments. Operating income of $20.3 million decreased 69% and
net income of $11.6 million ($0.15 per diluted share) decreased 68%, both as
compared to the prior year fourth quarter.Excluding the impact of the
exercise of the NHL compliance buyout, AOCF would have been $84.6 million and
operating income would have been $49.8 million.

President and CEO Tad Smith said: "Over the course of fiscal 2014, we
strengthened our Company's foundation in many ways, which should benefit MSG
for years to come.This includes the successful completion of the
Transformation project and the reinvention of the Forum.The Company also
reached an agreement to sell Fuse and successfully concluded the transaction
in July.We remain focused on creating meaningful value for our shareholders
and, looking ahead, believe that our Company has ample opportunities to drive
growth."

Results from Operations

Segment results for the quarters ended June 30, 2014 and 2013 are as follows:

               
               Revenues             AOCF                 Operating Income
                                                          (Loss)
               F'Q4   F'Q4   %      F'Q4   F'Q4   %      F'Q4   F'Q4   %
$ millions      2014   2013   Change 2014   2013   Change 2014   2013   Change
MSG Media       $176.4 $176.8 (0)%   $84.3  $81.8  3%     $78.7  $77.6  1%
MSG             56.5   34.8   62%    (11.4) (14.6) 22%    (15.3) (17.8) 14%
Entertainment
MSG Sports      156.8  140.7  11%    (10.3) 28.4   --     (16.0) 25.8   --
Other (includes (18.0) (15.9) (13)%  (7.6)  (3.4)  (126)% (27.1) (19.4) (40)%
eliminations)
Total Company   $371.7 $336.4 10%    $55.0  $92.2  (40)%  $20.3  $66.1  (69)%
                                                               
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 fourth quarter as compared to the prior year period, MSG
Media revenues of $176.4 million decreased slightly.Affiliation fee revenue
increased $6.4 million, primarily due to higher affiliation rates, partially
offset by the impact of a small decrease in subscribers at MSG
Networks.Advertising revenue decreased $5.8 million, primarily due to lower
New York Knicks-related advertising revenue, mainly a result of the absence of
playoff telecasts versus the prior year quarter, as well as lower advertising
revenue at Fuse.Other revenues decreased $1.0 million, primarily due to the
expiration in April 2013 of a short-term programming licensing
agreement.Fourth quarter AOCF of $84.3 million increased 3% and operating
income of $78.7 million increased 1%, both primarily due to a decrease in
direct operating expenses, partially offset by an increase in selling, general
and administrative expenses and, to a lesser extent, the slight decrease in
revenues.The decrease in direct operating expenses was due to lower
programming expenses at Fuse.

MSG Entertainment

For the fiscal 2014 fourth quarter as compared to the prior year period, MSG
Entertainment revenues of $56.5 million increased 62%.The increase was
primarily due to higher event-related revenues at all of the Company's venues,
led by The Theater at Madison Square Garden, the Madison Square Garden Arena,
the Forum and The Chicago Theatre, as well as higher venue-related sponsorship
and signage and suite rental fee revenues.Fourth quarter AOCF loss of $11.4
million improved by $3.2 million and operating loss of $15.3 million improved
by $2.5 million, both due to the increase in revenues, mostly offset by an
increase in direct operating expenses and, to a lesser extent, an increase in
selling, general and administrative expenses.The increase in direct operating
expenses was primarily due to higher event-related operating expenses. 

MSG Sports

For the fiscal 2014 fourth quarter as compared to the prior year period, MSG
Sports revenues of $156.8 million increased 11%.The increase in revenues was
primarily due to higher playoff-related revenues, inter-segment media rights
revenue, professional sports team regular season ticket-related revenue, suite
rental fee revenue, revenues from other live sporting events and professional
sports team sponsorship and signage revenues.AOCF decreased by $38.7 million
to a loss of $10.3 million and operating income decreased by $41.8 million to
a loss of $16.0 million, both primarily due to an increase in direct operating
expenses and, to a lesser extent, higher selling, general and administrative
expenses, partially offset by the increase in revenues.The increase in direct
operating expenses was primarily due to a $37.3 million increase in net
provisions for certain team personnel transactions and, to a lesser extent,
higher net provisions for NBA luxury tax and NBA and NHL revenue sharing
expense, other team operating expenses and team personnel compensation
expense. Excluding the impact of the exercise of the NHL compliance buyout,
MSG Sports AOCF would have been $19.2 million and operating income would have
been $13.5 million.

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), the Westchester Knicks (NBADL) 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.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 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
72305196
Conference call replay number is 855-859-2056 / Conference ID Number 72305196
until August 27, 2014


THE MADISON SQUARE GARDEN COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)

                                  Three Months Ended  Twelve Months Ended
                                  June 30,            June 30,
                                  2014      2013      2014        2013
                                                               
Revenues                          $371,674 $336,360 $1,555,594 $1,340,818
                                                               
Operating expenses:                                             
Direct operating                   (217,337) (164,669) (899,383)   (691,029)
Selling, general and               (104,002) (80,908)  (365,148)   (309,568)
administrative
Depreciation and amortization      (30,081)  (24,693)  (106,950)   (89,132)
Operating income                   20,254    66,090    184,113     251,089
Other income (expense):                                         
Equity in earnings (loss) of       (1,248)   --        (1,323)     --
nonconsolidated affiliates
Interest expense, net              (1,262)   (2,115)   (4,898)     (5,722)
Miscellaneous                      (1,441)   22        (1,346)     3,497
Income from operations before      16,303    63,997    176,546     248,864
income taxes
Income tax expense                 (4,666)  (27,580)  (61,478)   (106,482)
Net income                         $11,637  $36,417  $115,068   $142,382
Basic earnings per common share    $0.15    $0.47    $1.49      $1.87
Diluted earnings per common share  $0.15    $0.47    $1.47      $1.83
                                                               
Basic weighted-average number of   77,361    77,009    77,142      76,268
common shares outstanding
Diluted weighted-average number of 78,244    78,067    78,167      77,940
common 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.

                                                 Three Months      Twelve Months Ended
                                                  Ended
                                                 June 30,          June 30,
                                                 2014     2013     2014      2013
                                                                          
Operating income                                  $20,254 $66,090 $184,113 $251,089
Share-based compensation                          4,693    1,442    21,750    15,340
Depreciation and                                  30,081   24,693   106,950   89,132
amortization
Adjusted operating cash flow                      $55,028 $92,225 $312,813 $355,561



THE MADISON SQUARE GARDEN COMPANY
                                                                 
CONSOLIDATED OPERATIONS DATA
(Dollars in thousands)
(Unaudited)
REVENUES                                                          
                                             Three Months Ended    
                                             June 30,              
                                                                 %
                                             2014       2013       Change
                                                                  
MSG Media                                    $176,365   $176,759   (0)%
MSG Entertainment                            56,488     34,805     62%
MSG Sports                                    156,778    140,743    11%
Other (including Inter-segment eliminations) (17,957)  (15,947)  (13)%
Total Madison Square Garden Company          $371,674   $336,360   10%
                                                                 
                                                                 
                                             Twelve Months Ended   
                                             June 30,              
                                                                 %
                                             2014       2013       Change
                                                                  
MSG Media                                    $714,514   $677,733   5%
MSG Entertainment                            300,998    252,195    19%
MSG Sports                                    612,071    470,290    30%
Other (including Inter-segment eliminations) (71,989)  (59,400)  (21)%
Total Madison Square Garden Company          $1,555,594 $1,340,818 16%



ADJUSTED OPERATING CASH FLOW AND OPERATING INCOME (LOSS)
                                                                  
                      Adjusted Operating        Operating Income    
                      Cash Flow                  (Loss)               
                      Three Months Ended        Three Months Ended  
                      June 30,             %      June 30,             %
                      2014       2013      Change 2014       2013      Change
                                                                  
MSG Media              $84,303    $81,794   3%     $78,730    $77,587   1%
MSG Entertainment      (11,394)  (14,604) 22%    (15,338)  (17,828) 14%
MSG Sports             (10,296)  28,388   --     (16,014)  25,753   --
All other              (7,585)   (3,353)  (126)% (27,124)  (19,422) (40)%
Total Madison Square   $55,028    $92,225   (40)%  $20,254    $66,090   (69)%
Garden Company
                                                                  
                                                                  
                      Adjusted Operating        Operating Income    
                      Cash Flow                  (Loss)               
                      Twelve Months Ended       Twelve Months Ended 
                      June 30,             %      June 30,             %
                      2014       2013      Change 2014       2013      Change
                                                                  
MSG Media              $343,497   $349,506  (2)%   $323,168   $328,569  (2)%
MSG Entertainment      (4,284)   (10,205) 58%    (19,750)  (24,732) 20%
MSG Sports             3,575     27,014   (87)%  (13,463)  13,474   --
All other              (29,975)  (10,754) (179)% (105,842) (66,222) (60)%
Total Madison Square   $312,813   $355,561  (12)%  $184,113   $251,089  (27)%
Garden Company

                                      

THE MADISON SQUARE GARDEN COMPANY

CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)

                                                      June 30,    June 30,
                                                      2014        2013
ASSETS                                                 
Current Assets:                                                   
Cash and cash equivalents                              $92,251    $277,913
Restricted cash                                        9,823       8,413
Accounts receivable, net                               135,369     145,728
Net related party receivables                          25,156      18,565
Prepaid expenses                                       37,108      41,215
Other current assets                                   23,216      20,339
Assets held for sale                                   77,056      --
Total current assets                                   399,979     512,173
                                                                 
Investments in and loans to nonconsolidated affiliates 225,632     --
Property and equipment, net                            1,252,467   1,135,180
Amortizable intangible assets, net                     80,306      90,705
Indefinite-lived intangible assets                     163,850     158,636
Goodwill                                               701,674     742,492
Other assets                                           102,053     93,028
Total assets                                           $ 2,925,961 $ 2,732,214

                                                                 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:                                              
Accounts payable                                       $16,710   $16,006
Net related party payables                             283       283
Accrued liabilities:                                              
Employee related costs                                 102,097    70,663
Other accrued liabilities                              173,003     221,405
Deferred revenue                                       300,937     237,537
Liabilities held for sale                              11,171      --
Total current liabilities                             604,201     545,894
                                                                 
Defined benefit and other postretirement obligations   75,728      59,726
Other employee related costs                           61,284      45,370
Other liabilities                                      59,970      58,536
Deferred tax liability                                 520,334     543,753
Total liabilities                                      1,321,517   1,253,279
Commitments and contingencies                                     
Stockholders' Equity:                                             
Class A Common stock, par value $0.01, 360,000 shares
authorized; 63,606 and 63,268 shares outstanding as of 639         639
June 30, 2014 and 2013, respectively.
Class B Common stock, par value $0.01, 90,000 shares
authorized; 13,589 shares outstanding as of June 30,   136         136
2014 and 2013
Preferred stock, par value $0.01, 45,000 shares        --          --
authorized; none outstanding
Additional paid-in capital                             1,081,055   1,070,764
Treasury stock, at cost, 317 and 596 shares as of June (7,537)     (14,179)
30, 2014 and 2013, respectively
Retained earnings                                      552,862     437,794
Accumulated other comprehensive loss                   (22,711)    (16,219)
Total stockholders' equity                             1,604,444  1,478,935
Total liabilities and stockholders' equity             $ 2,925,961 $ 2,732,214



THE MADISON SQUARE GARDEN COMPANY

SELECTED CASH FLOW INFORMATION
(Dollars in thousands)
(Unaudited)
                                                        
                                                        Twelve Months Ended
                                                        June 30,
                                                        2014      2013
Net cash provided by operating activities                $342,555 $263,055
Net cash used in investing activities                    (516,398)  (185,361)
Net cash used in financing activities                    (11,819)   (6,281)
Net increase (decrease) in cash and cash                 (185,662)  71,413
equivalents
Cash and cash equivalents at beginning of period         277,913    206,500
Cash and cash equivalents at end of period               $92,251   $277,913

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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