NEW YORK, May 08, 2019 (GLOBE NEWSWIRE) -- The Madison Square Garden Company (NYSE: MSG) today reported financial results for the fiscal third quarter ended March 31, 2019.
For the fiscal 2019 third quarter, the Company generated revenues of $517.2 million, operating income of $38.5 million and adjusted operating income of $84.1 million.(1)(2) Prior period results have not been restated to reflect the adoption of ASC Topic 606 and, therefore, the Company’s consolidated and segment results for the fiscal 2019 third quarter are not directly comparable to the results for the third quarter of fiscal 2018.(3)
Excluding the impact of ASC Topic 606, fiscal 2019 third quarter revenues would have been $475.8 million, an increase of 4% as compared with the prior year period. In addition, fiscal 2019 third quarter operating income would have decreased by $15.7 million to a loss of $7.4 million and adjusted operating income would have decreased by $11.9 million to $38.2 million, both as compared to the prior year period.(4) Fiscal 2019 third quarter financial results, both including and excluding the impact of ASC Topic 606, reflect $8.3 million in revenue, operating income and adjusted operating income related to prior periods due to the renewal of an agreement with the Company's key ticketing platform provider.
Executive Chairman and CEO Jim Dolan said, “We remain confident that we are executing on a plan that positions us for long-term growth. This plan includes our MSG Sphere initiative, where we made important progress this past quarter, as well as the proposed spin-off of our sports business, which remains on track to be completed during the second half of this calendar year.”
Results from Operations
Segment results for the quarters ended March 31, 2019 and 2018 are as follows:
| | Revenues | Operating
Income (Loss) | Adjusted Operating
Income (Loss) |
| $ millions | F’Q3
2019
| | F’Q3
2018
| | %
Change
| F’Q3
2019
| | F’Q3
2018
| | %
Change
| F’Q3
2019
| | F’Q3
2018
| | %
Change
|
| MSG Entertainment | $ | 166.5 | | $ | 159.6 | | 4% | $ | (1.7 | ) | $ | 2.4 | | NM | $ | 7.2 | | $ | 9.8 | | (26)% |
| MSG Sports | | 351.6 | | | 300.1 | | 17% | | 96.5 | | | 53.6 | | 80 % | | 103.1 | | | 59.2 | | 74 % |
| Corporate and Other (5) | | (0.9 | ) | | (0.1 | ) | NM | | (51.4 | ) | | (41.5 | ) | (24)% | | (26.2 | ) | | (18.8 | ) | (40)% |
| Purchase accounting adjustments | | — | | | — | | NM | | (4.9 | ) | | (6.2 | ) | 21 % | | — | | | — | | NM |
| Total Company | $ | 517.2 | | $ | 459.6 | | 13% | $ | 38.5 | | $ | 8.3 | | NM | $ | 84.1 | | $ | 50.1 | | 68% |
Note: Does not foot due to rounding
- See page 3 of this earnings release for the definition of adjusted operating income (loss) included in the discussion of non-GAAP financial measures.
- The Company records TAO Group’s operating results in its consolidated statements of operations on a three-month lag basis.
- Effective July 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (ASC Topic 606), the new accounting standard for revenue recognition. The most significant impact of ASC Topic 606 in fiscal 2019 is a change in the timing of when certain Company revenue streams and professional sports team-related fulfillment expenses are recognized during the fiscal year.
- See page 7 of this earnings release for a reconciliation of adjusted operating income (loss) to adjusted operating income (loss) excluding the impact of ASC Topic 606.
- Corporate and Other primarily consists of unallocated corporate general and administrative costs (including costs associated with business development initiatives) and unallocated venue-related depreciation and amortization expense, as well as inter-segment eliminations.
MSG Entertainment
For the fiscal 2019 third quarter, MSG Entertainment revenues of $166.5 million increased 4%, as compared to the prior year period. This primarily reflects higher TAO Group revenues and increased revenues for the Christmas Spectacular Starring the Radio City Rockettes production, partially offset by other net revenue decreases. The increase in TAO Group revenues reflects the impact of new venue openings, partially offset by the impact of one less week in the quarter as compared to the prior year period due to the timing of the retail calendar. Increased Christmas Spectacular production revenues primarily reflects higher ticket-related revenue, a result of 13 performances in the current year quarter as compared with three performances in the fiscal 2018 third quarter and revenue related to prior periods due to the renewal of the ticketing agreement, partially offset by lower average per-show paid attendance in the current year quarter.
Fiscal 2019 third quarter operating income decreased by $4.1 million to a loss of $1.7 million and adjusted operating income decreased by $2.5 million to $7.2 million, both as compared to the prior year period. This primarily reflects higher direct operating expenses and selling, general and administrative expenses, partially offset by the increase in revenues. The increase in direct operating expenses was primarily due to higher TAO Group expenses and, to a lesser extent, higher expenses for the Christmas Spectacular production, partially offset by other net expense decreases. The increase in selling, general and administrative expenses was primarily due to higher professional fees, employee compensation and related benefits and corporate general and administrative expenses, partially offset by other net cost decreases.
Excluding the impact of ASC Topic 606, fiscal 2019 third quarter MSG Entertainment revenues would have been $170.3 million, an increase of 7% as compared to the prior year period. In addition, fiscal 2019 third quarter operating income would have decreased by $4.6 million to a loss of $2.2 million and adjusted operating income would have decreased by $3.0 million to $6.7 million, both as compared to the prior year period. Financial results for the fiscal 2019 third quarter include $3.7 million in revenue, operating income and adjusted operating income related to prior periods due to the renewal of the ticketing agreement.
MSG Sports
For the fiscal 2019 third quarter, MSG Sports revenues of $351.6 million increased 17%, as compared to the prior year period. This primarily reflects increases in local media rights fees from MSG Networks Inc., professional sports teams’ pre/regular season ticket-related revenue and suite license fee revenue, all mainly due to the impact of ASC Topic 606.
Third quarter operating income of $96.5 million increased by 80% and adjusted operating income of $103.1 million increased by 74%, both as compared to the prior year period. This reflects the increase in revenues, partially offset by higher direct operating expenses and selling, general and administrative expenses. The increase in direct operating expenses was primarily driven by higher net provisions for certain team personnel transactions and, to a lesser extent, higher other team operating expenses, partially offset by lower team personnel compensation costs. The increase in selling, general and administrative expenses was primarily due to higher employee compensation and related benefits, marketing costs, and corporate general and administrative costs, partially offset by other cost decreases.
Excluding the impact of ASC Topic 606, fiscal 2019 third quarter MSG Sports revenues would have been $306.3 million, an increase of 2% as compared to the prior year period. In addition, fiscal 2019 third quarter operating income would have been $51.1 million, a decrease of $2.6 million, and adjusted operating income would have been $57.7 million, a decrease of $1.4 million, both as compared to the prior year period. Financial results for the fiscal 2019 third quarter include $4.6 million in revenue, operating income and adjusted operating income related to prior periods due to the renewal of the ticketing agreement.
Corporate and Other
For the fiscal 2019 third quarter, Corporate and Other’s operating loss of $51.4 million and adjusted operating loss of $26.2 million increased by 24% and 40%, respectively, both as compared with the prior year period, mainly due to higher selling, general and administrative expenses. The increase in selling, general and administrative expenses was primarily due to higher employee compensation and related benefits, as well as higher expenses related to the Company's business development initiatives and costs associated with the proposed spin-off transaction.
About The Madison Square Garden Company
The Madison Square Garden Company (MSG) is a world leader in live sports and entertainment experiences. The company presents or hosts a broad array of premier events in its diverse collection of iconic venues: New York’s Madison Square Garden, Hulu Theater at Madison Square Garden, Radio City Music Hall and Beacon Theatre; the Forum in Inglewood, CA; and The Chicago Theatre. Other MSG properties include legendary sports franchises: the New York Knicks (NBA) and the New York Rangers (NHL); two development league teams - the Westchester Knicks (NBAGL) and the Hartford Wolf Pack (AHL); and esports teams through Counter Logic Gaming, a leading North American esports organization, and Knicks Gaming, MSG’s NBA 2K League franchise. In addition, the Company features the popular original production - the Christmas Spectacular Starring the Radio City Rockettes - and through Boston Calling Events, produces New England’s preeminent Boston Calling Music Festival. Also under the MSG umbrella is TAO Group, a world-class hospitality group with globally-recognized entertainment dining and nightlife brands: Tao, Marquee, Lavo, Avenue, Beauty & Essex and Vandal. More information is available at www.themadisonsquaregardencompany.com.
Non-GAAP Financial Measures
We define adjusted operating income (loss), 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, 3) restructuring charges or credits, 4) gains or losses on sales or dispositions of businesses and 5) the impact of purchase accounting adjustments related to business acquisitions. Because it is based upon operating income (loss), adjusted operating income (loss) 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 the settlement of an obligation that is not expected to be made in cash. Effective July 1, 2018, we adopted ASU 2014-09, Revenue from Contracts with Customers (ASC Topic 606), the new accounting standard for revenue recognition. The most significant impact of ASC Topic 606 in fiscal year 2019 is a change in the timing of when certain Company revenue streams and professional sports team-related fulfillment expenses are recognized during the fiscal year. During fiscal year 2019, while we are presenting transition disclosures related to ASC Topic 606, we also present adjusted operating income (loss) excluding the impact of ASC Topic 606.
We believe adjusted operating income (loss) including and excluding the impact of ASC Topic 606 are appropriate measures for evaluating the operating performance of our business segments and the Company on a consolidated basis. Adjusted operating income (loss) and similar measures with similar titles are common performance measures used by investors and analysts to analyze our performance. Internally, we use revenues and adjusted operating income (loss) as the most important indicators of our business performance, and evaluate management’s effectiveness with specific reference to these indicators, including, during fiscal year 2019, evaluating management's performance with reference to adjusted operating income (loss) excluding the impact of ASC Topic 606. Adjusted operating income (loss) 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 adjusted operating income (loss) 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 operating income (loss) to adjusted operating income (loss), please see page 5 of this release. For a reconciliation of adjusted operating income (loss) to adjusted operating income (loss) excluding the impact of ASC Topic 606, please see pages 7 and 8 of this release.
Forward-Looking Statements
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, developments and events 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.
Contacts:
Kimberly Kerns
Chief Communications Officer
The Madison Square Garden Company
(212) 465-6442 | Ari Danes, CFA
Senior Vice President, Investor Relations & Treasury
The Madison Square Garden Company
(212) 465-6072 |
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 1866379
Conference call replay number is 855-859-2056 / Conference ID Number 1866379 until May 15, 2019
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| | | Three Months Ended | | Nine Months Ended |
| | | March 31, | | March 31, |
| | | 2019 | | 2018 | | 2019 | | 2018 |
| Revenues | | $ | 517,190 | | | $ | 459,621 | | | $ | 1,367,512 | | | $ | 1,241,138 | |
| Direct operating expenses | | 310,792 | | | 299,420 | | | 821,510 | | | 735,440 | |
| Selling, general and administrative expenses | | 138,949 | | | 121,447 | | | 391,205 | | | 346,934 | |
| Depreciation and amortization | | 28,936 | | | 30,429 | | | 88,792 | | | 91,519 | |
| Operating income | | 38,513 | | | 8,325 | | | 66,005 | | | 67,245 | |
| Other income (expense): | | | | | | | | |
| Earnings (loss) in equity method investments | | (2,881 | ) | | (678 | ) | | 17,131 | | | 1,439 | |
| Interest income | | 7,988 | | | 5,224 | | | 22,061 | | | 14,988 | |
| Interest expense | | (4,405 | ) | | (3,965 | ) | | (13,614 | ) | | (11,474 | ) |
| Miscellaneous income (expense), net | | 6,201 | | | (440 | ) | | (2,895 | ) | | (2,678 | ) |
| Income from operations before income taxes | | 45,416 | | | 8,466 | | | 88,688 | | | 69,520 | |
| Income tax benefit (expense) | | (11,253 | ) | | (652 | ) | | (12,605 | ) | | 115,418 | |
| Net income | | 34,163 | | | 7,814 | | | 76,083 | | | 184,938 | |
| Less: Net income (loss) attributable to redeemable noncontrolling interests | | (7 | ) | | 389 | | | (3,662 | ) | | 522 | |
| Less: Net loss attributable to nonredeemable noncontrolling interests | | (1,101 | ) | | (1,716 | ) | | (4,913 | ) | | (3,231 | ) |
| Net income attributable to The Madison Square Garden Company’s stockholders | | $ | 35,271 | | | $ | 9,141 | | | $ | 84,658 | | | $ | 187,647 | |
| Basic earnings per common share attributable to The Madison Square Garden Company’s stockholders | | $ | 1.48 | | | $ | 0.39 | | | $ | 3.56 | | | $ | 7.94 | |
| Diluted earnings per common share attributable to The Madison Square Garden Company’s stockholders | | $ | 1.48 | | | $ | 0.38 | | | $ | 3.55 | | | $ | 7.87 | |
| Basic weighted-average number of common shares outstanding | | 23,792 | | | 23,683 | | | 23,759 | | | 23,623 | |
| Diluted weighted-average number of common shares outstanding | | 23,881 | | | 23,809 | | | 23,868 | | | 23,843 | |
In the first quarter of fiscal 2019, the Company adopted ASU No. 2017-07. The adoption of this standard resulted in the non-service cost components of net periodic benefit cost to be presented separately in the income statement from the service cost component and the non-service cost components to no longer be included in the subtotal for operating income. As this standard was applied retrospectively, the Company reclassified $0.3 million and $0.7 million of net periodic benefit cost from direct operating expenses and selling, general and administrative expenses, respectively, to miscellaneous income (expense) within other income (expense) in the accompanying consolidated statements of operations for the three months ended March 31, 2018. For the nine months ended March 31, 2018, the Company reclassified $0.8 million and $2.2 million of net periodic benefit cost from direct operating expenses and selling, general and administrative expenses, respectively, to miscellaneous income (expense) within other income (expense) in the accompanying consolidated statements of operations. Furthermore, all prior period amounts presented throughout this release reflect reclassifications made as a result of the adoption of ASU No. 2017-07.
ADJUSTMENTS TO RECONCILE OPERATING INCOME (LOSS) TO
ADJUSTED OPERATING INCOME (LOSS)
The following is a description of the adjustments to operating income (loss) in arriving at adjusted operating income (loss) as described in this earnings release:
- Share-based compensation expense. This adjustment eliminates the compensation expense relating to restricted stock units and stock options granted under our employee stock plan and non-employee director plan in all periods.
- Depreciation and amortization. This adjustment eliminates depreciation, amortization and impairments of property and equipment and intangible assets in all periods.
- Purchase accounting adjustments. This adjustment eliminates the impact of various purchase accounting adjustments related to business acquisitions, primarily favorable / unfavorable lease agreements of the acquiree.
| | | Three Months Ended | | Nine Months Ended |
| | | March 31, | | March 31, |
| | | 2019 | | 2018 | | 2019 | | 2018 |
| Operating income | | $ | 38,513 | | | $ | 8,325 | | | $ | 66,005 | | | $ | 67,245 | |
| Share-based compensation | | 15,580 | | | 10,076 | | | 45,984 | | | 36,892 | |
| Depreciation and amortization (1) | | 28,936 | | | 30,429 | | | 88,792 | | | 91,519 | |
| Other purchase accounting adjustments | | 1,119 | | | 1,312 | | | 3,867 | | | 3,636 | |
| Adjusted operating income | | $ | 84,148 | | | $ | 50,142 | | | $ | 204,648 | | | $ | 199,292 | |
_________________
- Includes depreciation and amortization related to purchase accounting adjustments.
CONSOLIDATED OPERATIONS DATA
(Dollars in thousands)
(Unaudited)
REVENUES
| | | Three Months Ended | | |
| | | March 31, | | |
| | | 2019 | | 2018 | | % Change |
| MSG Entertainment | | $ | 166,452 | | | $ | 159,586 | | | 4% |
| MSG Sports | | 351,594 | | | 300,148 | | | 17% |
| Inter-segment eliminations | | (856 | ) | | (113 | ) | | NM |
| The Madison Square Garden Company Total | | $ | 517,190 | | | $ | 459,621 | | | 13% |
| | | | | | | |
| | | Nine Months Ended | | |
| | | March 31, | | |
| | | 2019 | | 2018 | | % Change |
| MSG Entertainment | | $ | 645,919 | | | $ | 595,083 | | | 9% |
| MSG Sports | | 722,789 | | | 646,168 | | | 12% |
| Inter-segment eliminations | | (1,196 | ) | | (113 | ) | | NM |
| The Madison Square Garden Company Total | | $ | 1,367,512 | | | $ | 1,241,138 | | | 10% |
OPERATING INCOME (LOSS) AND ADJUSTED OPERATING INCOME (LOSS)
| | | | | | | | | | | | | |
| | | Operating Income
(Loss) | | | | Adjusted Operating Income
(Loss) | | |
| | | Three Months Ended
March 31, | | | | Three Months Ended
March 31, | | |
| | | 2019 | | 2018 | | % Change | | 2019 | | 2018 | | % Change |
| MSG Entertainment | | $ | (1,684 | ) | | $ | 2,388 | | | NM | | $ | 7,237 | | | $ | 9,755 | | | (26)% |
| MSG Sports | | 96,463 | | | 53,643 | | | 80 % | | 103,129 | | | 59,165 | | | 74 % |
| Corporate and Other | | (51,368 | ) | | (41,505 | ) | | (24)% | | (26,218 | ) | | (18,778 | ) | | (40)% |
| Purchase accounting adjustments | | (4,898 | ) | | (6,201 | ) | | 21 % | | — | | | — | | | NM |
| The Madison Square Garden Company Total | | $ | 38,513 | | | $ | 8,325 | | | NM | | $ | 84,148 | | | $ | 50,142 | | | 68 % |
| | | | | | | | | | | | | |
| | | Operating Income
(Loss) | | | | Adjusted Operating Income
(Loss) | | |
| | | Nine Months Ended
March 31, | | | | Nine Months Ended
March 31, | | |
| | | 2019 | | 2018 | | % Change | | 2019 | | 2018 | | % Change |
| MSG Entertainment | | $ | 93,307 | | | $ | 87,385 | | | 7 % | | $ | 117,280 | | | $ | 110,227 | | | 6 % |
| MSG Sports | | 134,169 | | | 123,887 | | | 8 % | | 152,351 | | | 141,305 | | | 8 % |
| Corporate and Other | | (144,363 | ) | | (126,579 | ) | | (14)% | | (64,983 | ) | | (52,240 | ) | | (24)% |
| Purchase accounting adjustments | | (17,108 | ) | | (17,448 | ) | | 2 % | | — | | | — | | | NM |
| The Madison Square Garden Company Total | | $ | 66,005 | | | $ | 67,245 | | | (2)% | | $ | 204,648 | | | $ | 199,292 | | | 3 % |
| | | | | | | | | | | | | | | | | | | | | |
IMPACT FROM ADOPTION OF ASC TOPIC 606
(Dollars in thousands)
(Unaudited)
| | | Three Months Ended March 31, 2019 | | | | |
| | | As Reported
under ASC
Topic 606 | | Impact from
the adoption
of
ASC Topic
606 | | Amounts
without
adoption
of ASC Topic
606 | | Three Months
Ended
March 31,
2018,
As Reported |
| MSG Entertainment: | | | | | | | | |
| Revenues | | $ | 166,452 | | | $ | 3,878 | | | $ | 170,330 | | | $ | 159,586 | |
| Operating income (loss) | | (1,684 | ) | | (510 | ) | | (2,194 | ) | | 2,388 | |
| Share-based compensation | | 4,022 | | | — | | | 4,022 | | | 2,681 | |
| Depreciation and amortization | | 4,899 | | | — | | | 4,899 | | | 4,686 | |
| Adjusted operating income | | $ | 7,237 | | | $ | (510 | ) | | $ | 6,727 | | | $ | 9,755 | |
| | | | | | | | | |
| MSG Sports: | | | | | | | | |
| Revenues | | $ | 351,594 | | | $ | (45,270 | ) | | $ | 306,324 | | | $ | 300,148 | |
| Operating income | | 96,463 | | | (45,400 | ) | | 51,063 | | | 53,643 | |
| Share-based compensation | | 4,767 | | | — | | | 4,767 | | | 3,733 | |
| Depreciation and amortization | | 1,899 | | | — | | | 1,899 | | | 1,789 | |
| Adjusted operating income | | $ | 103,129 | | | $ | (45,400 | ) | | $ | 57,729 | | | $ | 59,165 | |
| | | | | | | | | |
| The Madison Square Garden Company Total: | | | | | | | | |
| Revenues | | $ | 517,190 | | | $ | (41,392 | ) | | $ | 475,798 | | | $ | 459,621 | |
| Operating income (loss) | | 38,513 | | | (45,910 | ) | | (7,397 | ) | | 8,325 | |
| Share-based compensation | | 15,580 | | | — | | | 15,580 | | | 10,076 | |
| Depreciation and amortization | | 28,936 | | | — | | | 28,936 | | | 30,429 | |
| Other purchase accounting adjustments | | 1,119 | | | — | | | 1,119 | | | 1,312 | |
| Adjusted operating income | | $ | 84,148 | | | $ | (45,910 | ) | | $ | 38,238 | | | $ | 50,142 | |
| | | | | | | | | |
IMPACT FROM ADOPTION OF ASC TOPIC 606 (Continued)
(Dollars in thousands)
(Unaudited)
| | | Nine Months Ended March 31, 2019 | | | | |
| | | As Reported
under ASC
Topic 606 | | Impact from
the adoption
of
ASC Topic
606 | | Amounts
without
adoption
of ASC Topic
606 | | Nine Months
Ended
March 31,
2018,
As Reported |
| MSG Entertainment: | | | | | | | | |
| Revenues | | $ | 645,919 | | | $ | 17,423 | | | $ | 663,342 | | | $ | 595,083 | |
| Operating income | | 93,307 | | | (2,680 | ) | | 90,627 | | | 87,385 | |
| Share-based compensation | | 10,823 | | | — | | | 10,823 | | | 9,633 | |
| Depreciation and amortization | | 13,150 | | | — | | | 13,150 | | | 13,209 | |
| Adjusted operating income | | $ | 117,280 | | | $ | (2,680 | ) | | $ | 114,600 | | | $ | 110,227 | |
| | | | | | | | | |
| MSG Sports: | | | | | | | | |
| Revenues | | $ | 722,789 | | | $ | (57,046 | ) | | $ | 665,743 | | | $ | 646,168 | |
| Operating income | | 134,169 | | | (39,125 | ) | | 95,044 | | | 123,887 | |
| Share-based compensation | | 12,357 | | | — | | | 12,357 | | | 11,874 | |
| Depreciation and amortization | | 5,825 | | | — | | | 5,825 | | | 5,544 | |
| Adjusted operating income | | $ | 152,351 | | | $ | (39,125 | ) | | $ | 113,226 | | | $ | 141,305 | |
| | | | | | | | | |
| The Madison Square Garden Company Total: | | | | | | | | |
| Revenues | | $ | 1,367,512 | | | $ | (39,623 | ) | | $ | 1,327,889 | | | $ | 1,241,138 | |
| Operating income | | 66,005 | | | (41,805 | ) | | 24,200 | | | 67,245 | |
| Share-based compensation | | 45,984 | | | — | | | 45,984 | | | 36,892 | |
| Depreciation and amortization | | 88,792 | | | — | | | 88,792 | | | 91,519 | |
| Other purchase accounting adjustments | | 3,867 | | | — | | | 3,867 | | | 3,636 | |
| Adjusted operating income | | $ | 204,648 | | | $ | (41,805 | ) | | $ | 162,843 | | | $ | 199,292 | |
| | | | | | | | | |
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(Unaudited)
| | | March 31,
2019 | | June 30,
2018 |
| ASSETS | | | | |
| Current Assets: | | | | |
| Cash and cash equivalents | | $ | 1,153,060 | | | $ | 1,225,638 | |
| Restricted cash | | 29,033 | | | 30,982 | |
| Short-term investments | | 110,924 | | | — | |
| Accounts receivable, net | | 195,851 | | | 100,725 | |
| Net related party receivables | | 1,429 | | | 567 | |
| Prepaid expenses | | 55,065 | | | 28,761 | |
| Other current assets | | 69,189 | | | 28,996 | |
| Total current assets | | 1,614,551 | | | 1,415,669 | |
| Investments and loans to nonconsolidated affiliates | | 91,361 | | | 209,951 | |
| Property and equipment, net of accumulated depreciation and amortization of $785,712 and $713,357 as of March 31, 2019 and June 30, 2018, respectively | | 1,317,688 | | | 1,253,671 | |
| Amortizable intangible assets, net | | 226,949 | | | 243,806 | |
| Indefinite-lived intangible assets | | 175,985 | | | 175,985 | |
| Goodwill | | 392,513 | | | 392,513 | |
| Other assets | | 99,406 | | | 44,578 | |
| Total assets | | $ | 3,918,453 | | | $ | 3,736,173 | |
| LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | | | | |
| Current Liabilities: | | | | |
| Accounts payable | | $ | 24,776 | | | $ | 28,939 | |
| Net related party payables, current | | 32,195 | | | 13,675 | |
| Current portion of long-term debt, net of deferred financing costs | | 12,097 | | | 4,365 | |
| Accrued liabilities: | | | | |
| Employee related costs | | 152,026 | | | 123,992 | |
| Other accrued liabilities | | 205,047 | | | 180,272 | |
| Collections due to promoters | | 72,560 | | | 89,513 | |
| Deferred revenue | | 282,125 | | | 324,749 | |
| Total current liabilities | | 780,826 | | | 765,505 | |
| Related party payables, noncurrent | | 172 | | | — | |
| Long-term debt, net of deferred financing costs | | 90,984 | | | 101,335 | |
| Defined benefit and other postretirement obligations | | 39,492 | | | 49,240 | |
| Other employee related costs | | 63,907 | | | 53,501 | |
| Deferred tax liabilities, net | | 91,080 | | | 78,968 | |
| Other liabilities | | 71,277 | | | 56,905 | |
| Total liabilities | | 1,137,738 | | | 1,105,454 | |
| Commitments and contingencies | | | | |
| Redeemable noncontrolling interests | | 71,759 | | | 76,684 | |
| The Madison Square Garden Company Stockholders’ Equity: | | | | |
| Class A Common stock, par value $0.01, 120,000 shares authorized; 19,229 and 19,136 shares outstanding as of March 31, 2019 and June 30, 2018, respectively | | 204 | | | 204 | |
| Class B Common stock, par value $0.01, 30,000 shares authorized; 4,530 shares outstanding as of March 31, 2019 and June 30, 2018 | | 45 | | | 45 | |
| Preferred stock, par value $0.01, 15,000 shares authorized; none outstanding as of March 31, 2019 and June 30, 2018 | | — | | | — | |
| Additional paid-in capital | | 2,830,411 | | | 2,817,873 | |
| Treasury stock, at cost, 1,219 and 1,312 shares as of March 31, 2019 and June 30, 2018, respectively | | (207,790 | ) | | (223,662 | ) |
| Retained earnings (accumulated deficit) | | 102,234 | | | (11,059 | ) |
| Accumulated other comprehensive loss | | (37,187 | ) | | (46,918 | ) |
| Total The Madison Square Garden Company stockholders’ equity | | 2,687,917 | | | 2,536,483 | |
| Nonredeemable noncontrolling interests | | 21,039 | | | 17,552 | |
| Total equity | | 2,708,956 | | | 2,554,035 | |
| Total liabilities, redeemable noncontrolling interests and equity | | $ | 3,918,453 | | | $ | 3,736,173 | |
| | | | | | | | | |
SELECTED CASH FLOW INFORMATION
(Dollars in thousands)
(Unaudited)
| | | Nine Months Ended |
| | | March 31, |
| | | 2019 | | 2018 |
| Net cash provided by operating activities | | $ | 97,344 | | | $ | 165,017 | |
| Net cash used in investing activities | | (159,760 | ) | | (183,433 | ) |
| Net cash used in financing activities | | (18,551 | ) | | (50,231 | ) |
| Effect of exchange rates on cash, cash equivalents and restricted cash | | 6,440 | | | 924 | |
| Net decrease in cash, cash equivalents and restricted cash | | (74,527 | ) | | (67,723 | ) |
| Cash, cash equivalents and restricted cash at beginning of period | | 1,256,620 | | | 1,272,114 | |
| Cash, cash equivalents and restricted cash at end of period | | $ | 1,182,093 | | | $ | 1,204,391 | |
