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The Madison Square Garden Company Reports Results For Fiscal 2013 Second Quarter

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 Connecticut Whale (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 .

The Madison Square Garden Company logo is available at

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 the first table 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

Conference call dial-in number is 877-347-9170 / Conference ID Number 87313255

Conference call replay number is 855-859-2056 / Conference ID Number 87313255 until February 13, 2012
(In thousands, except per share data)
  Three Months Ended Six Months Ended
  December 31, December 31,
  2012 2011 2012 2011
Revenues $387,886 $373,007 $592,052 $550,646
Adjusted operating cash flow $108,288 $79,147 $171,597 $125,223
Share-based compensation expense  (5,521)  (7,097)  (8,940)  (10,446)
Operating income before depreciation and amortization  102,767  72,050  162,657  114,777
Depreciation and amortization (incl. impairments)  (21,744)  (24,094)  (41,444)  (40,458)
Operating income  81,023  47,956  121,213  74,319
Other income (expense):        
Interest expense, net  (1,284)  (1,311)  (2,414)  (2,513)
Miscellaneous  66  --   102  -- 
Income from operations before income taxes  79,805  46,645  118,901  71,806
Income tax expense  (32,894)  (21,026)  (51,385)  (24,899)
Net income $46,911 $25,619 $67,516 $46,907
Basic earnings per common share $0.62 $0.34 $0.89 $0.63
Diluted earnings per common share $0.60 $0.33 $0.87 $0.61
Basic weighted-average number of common shares outstanding 75,914 74,632 75,770 74,573
Diluted weighted-average number of common shares outstanding 77,889 77,379 77,829 77,283



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.
(Dollars in thousands)
  Three Months Ended  
  December 31,  %
  2012 2011  Change
MSG Media  $156,770 $142,408 10%
MSG Entertainment  151,122 151,224 (0)%
MSG Sports 89,903 88,622 1%
Other (including Inter-segment eliminations)   (9,909)  (9,247) (7)%
Total Madison Square Garden Company $387,886 $373,007 4%
  Six Months Ended  
  December 31,  %
  2012 2011  Change
MSG Media  $316,308 $281,038 13%
MSG Entertainment  181,899 178,826 2%
MSG Sports 121,467 117,436 3%
Other (including Inter-segment eliminations)   (27,622)  (26,654) (4)%
Total Madison Square Garden Company $592,052 $550,646 8%
  Adjusted Operating    Operating Income   
  Cash Flow   (Loss)
  Three Months Ended    Three Months Ended   
  December 31, % December 31, %
  2012 2011 Change 2012 2011 Change
MSG Media  $95,618 $63,555 50% $90,183 $53,128 70%
MSG Entertainment   30,036  37,173 (19)%  26,228  32,984 (20)%
MSG Sports  (14,484)  (19,920) 27%  (18,322)  (24,208) 24%
All other   (2,882)  (1,661) (74)%  (17,066)  (13,948) (22)%
Total Madison Square Garden Company  $108,288 $79,147 37% $81,023 $47,956 69%
  Adjusted Operating    Operating Income   
  Cash Flow   (Loss)
  Six Months Ended    Six Months Ended   
  December 31, % December 31, %
  2012 2011 Change 2012 2011 Change
MSG Media  $172,322 $127,371 35% $161,196 $110,292 46%
MSG Entertainment   17,477  23,381 (25)%  10,198  15,771 (35)%
MSG Sports  (13,023)  (20,383) 36%  (20,422)  (28,330) 28%
All other   (5,179)  (5,146) (1)%  (29,759)  (23,414) (27)%
Total Madison Square Garden Company  $171,597 $125,223 37% $121,213 $74,319 63%
(In thousands, except per share data)
  December 31, 2012 June 30, 2012
Current Assets:    
Cash and cash equivalents $248,594 $206,500
Restricted cash 250 5,789
Accounts receivable, net of allowance for doubtful accounts of $2,327 and $2,434 132,811 126,565
Net related party receivables 27,019 27,277
Prepaid expenses 60,363 29,700
Other current assets 19,166 19,980
Total current assets 488,203 415,811
Property and equipment, net of accumulated depreciation and amortization of $436,922 and $435,696 1,075,107 969,528
Amortizable intangible assets, net of accumulated amortization of $79,874 and $122,210 95,905 101,814
Indefinite-lived intangible assets 158,636 158,636
Goodwill 742,492 742,492
Other assets 135,560 136,403
  $2,695,903 $2,524,684
Current Liabilities:    
Accounts payable $17,985 $33,048
Net related party payables 376 362
Accrued liabilities:    
Employee related costs  68,834  82,886
Other accrued liabilities  215,716  188,410
Deferred revenue  295,897  211,639
Total current liabilities  598,808  516,345
Defined benefit and other postretirement obligations  62,290  58,817
Other employee related costs  40,176  36,689
Other liabilities  58,177  60,438
Deferred tax liability  539,387  532,382
Total liabilities  1,298,838  1,204,671
Commitments and contingencies    
Stockholders' Equity:    
Class A Common stock, par value $0.01, 360,000 shares authorized; 62,880 and 62,016 shares outstanding  637  628
Class B Common stock, par value $0.01, 90,000 shares authorized; 13,589 shares outstanding  136  136
Preferred stock, par value $0.01, 45,000 shares authorized; none outstanding  --   -- 
Additional paid-in capital  1,078,693  1,070,046
Treasury stock, at cost, 927 shares  (22,047)  (22,047)
Retained earnings  362,928  295,412
Accumulated other comprehensive loss  (23,282)  (24,162)
Total stockholders' equity 1,397,065 1,320,013
  $2,695,903 $2,524,684
(Dollars in thousands)
  Six Months Ended  December 31,
  2012 2011
Net cash provided by operating activities  $203,965 $180,947
Net cash used in investing activities   (159,313)  (268,498)
Net cash provided by (used in) financing activities   (2,558)  4,093
Net increase (decrease) in cash and cash equivalents   42,094  (83,458)
Cash and cash equivalents at beginning of period   206,500  304,876
Cash and cash equivalents at end of period  $248,594 $221,418
CONTACT: Kimberly Kerns
         Senior Vice President
         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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