|
|
|
|
|
|
|
|
|
|
||
Delaware
|
|
1-34434
|
|
27-0624498
|
||
(State or other Jurisdiction
of Incorporation)
|
|
(Commission
File Number)
|
|
(IRS Employer
Identification Number)
|
||
|
|
|
||||
|
|
|||||
11 Penn Plaza,
New York, NY
|
|
10001
|
||||
(Address of principal executive offices)
|
|
(Zip Code)
|
|
¨
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
¨
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
¨
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
¨
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Item 2.01
|
|
Completion of Acquisition or Disposition of Assets
|
Item 5.03
|
|
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
|
Item 9.01
|
|
Financial Statements and Exhibits
|
SIGNATURES
|
|
|
EX-3.1
|
|
|
EX-99.1
|
|
|
Item 2.01
|
Completion of Acquisition or Disposition of Assets
|
Item 5.03
|
Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
|
Item 9.01
|
Financial Statements and Exhibits
|
3.1
|
Amendment to the Amended and Restated Certificate of Incorporation of MSG Networks Inc., dated September 30, 2015.
|
3.2
|
Amended By-Laws of MSG Networks Inc.
|
99.1
|
Unaudited pro forma consolidated balance sheet of MSG Networks Inc. as of June 30, 2015 and the unaudited pro forma condensed consolidated statements of operations of MSG Networks Inc. for the years ended June 30, 2015, 2014 and 2013.
|
|
|
|
|
MSG NETWORKS INC.
|
|
||
|
|
|
|
By:
|
/s/ Bret Richter
|
|
|
|
Name:
|
Bret Richter
|
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
|
|
THE MADISON SQUARE GARDEN COMPANY
|
|
||
|
By:
|
/s/ Lawrence J. Burian
|
|
|
|
|
Name:
|
Lawrence J. Burian
|
|
|
|
Title:
|
Executive Vice President, General Counsel and Secretary
|
|
|
Article I Stockholders
|
1
|
(i)
|
The elimination of
certain general corporate overhead costs that do not meet the criteria for discontinued operations presentation; however, such expenses will no longer be incurred by the Registrant subsequent to the Distribution
;
|
(ii)
|
The impact of agreements between the Registrant and
MSG
, including media rights agreements, an advertising sales representation agreement and a transition services agreement between the Registrant and MSG ("Transition Services Agreement"); and
|
(iii)
|
The Registrant's post-
Distribution
capital structure, including debt financing of
$1,550,000
, of which
$1,450,000
was contributed to
MSG
in connection with the Distribution.
|
|
Historical
|
|
Historical Intercompany Eliminations (a)
|
|
Distribution of MSG (b)
|
|
Pro Forma Continuing Operations
(c)
|
|
Other Pro Forma Adjustments
|
|
Notes
|
|
Pro Forma (j)
|
|
||||||||||||
Revenues
|
$
|
1,621,562
|
|
|
$
|
80,999
|
|
|
$
|
(1,071,551
|
)
|
|
$
|
631,010
|
|
|
$
|
2,832
|
|
|
(d)
|
|
$
|
633,842
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Direct operating expenses
|
861,406
|
|
|
80,999
|
|
|
(724,212
|
)
|
|
218,193
|
|
|
52,411
|
|
|
(e)
|
|
270,604
|
|
|
||||||
Selling, general and administrative expenses
|
338,229
|
|
|
—
|
|
|
(181,518
|
)
|
|
156,711
|
|
|
(70,001
|
)
|
|
(f)
|
|
86,710
|
|
|
||||||
Depreciation and amortization
|
121,122
|
|
|
—
|
|
|
(103,483
|
)
|
|
17,639
|
|
|
—
|
|
|
|
|
17,639
|
|
|
||||||
Gain on sale of Fuse
|
(186,178
|
)
|
|
—
|
|
|
—
|
|
|
(186,178
|
)
|
|
—
|
|
|
|
|
(186,178
|
)
|
|
||||||
|
1,134,579
|
|
|
80,999
|
|
|
(1,009,213
|
)
|
|
206,365
|
|
|
(17,590
|
)
|
|
|
|
188,775
|
|
|
||||||
Operating income
|
486,983
|
|
|
—
|
|
|
(62,338
|
)
|
|
424,645
|
|
|
20,422
|
|
|
|
|
445,067
|
|
|
||||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equity in loss of nonconsolidated affiliates
|
(40,590
|
)
|
|
—
|
|
|
40,590
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
||||||
Interest income
|
3,954
|
|
|
—
|
|
|
(1,886
|
)
|
|
2,068
|
|
|
—
|
|
|
|
|
2,068
|
|
|
||||||
Interest expense
|
(6,507
|
)
|
|
—
|
|
|
2,467
|
|
|
(4,040
|
)
|
|
(33,655
|
)
|
|
(g)
|
|
(37,695
|
)
|
|
||||||
Miscellaneous
|
2,798
|
|
|
—
|
|
|
(190
|
)
|
|
2,608
|
|
|
—
|
|
|
|
|
2,608
|
|
|
||||||
|
(40,345
|
)
|
|
—
|
|
|
40,981
|
|
|
636
|
|
|
(33,655
|
)
|
|
|
|
(33,019
|
)
|
|
||||||
Income from continuing operations before income taxes
|
446,638
|
|
|
—
|
|
|
(21,357
|
)
|
|
425,281
|
|
|
(13,233
|
)
|
|
|
|
412,048
|
|
|
||||||
Income tax benefit (expense)
|
(191,937
|
)
|
|
—
|
|
|
15,032
|
|
|
(176,905
|
)
|
|
5,600
|
|
|
(h)
|
|
(171,305
|
)
|
|
||||||
Income from continuing operations
|
$
|
254,701
|
|
|
$
|
—
|
|
|
$
|
(6,325
|
)
|
|
$
|
248,376
|
|
|
$
|
(7,633
|
)
|
|
|
|
$
|
240,743
|
|
|
Earnings per share from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic earnings per common share
|
$
|
3.30
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3.12
|
|
(i)
|
||||||||
Diluted earnings per common share
|
$
|
3.28
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
3.10
|
|
(i)
|
||||||||
Weighted-average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
77,138
|
|
|
|
|
|
|
|
|
|
|
|
|
77,138
|
|
(i)
|
||||||||||
Diluted
|
77,687
|
|
|
|
|
|
|
|
|
|
|
|
|
77,687
|
|
(i)
|
|
Historical
|
|
Historical Intercompany Eliminations (a)
|
|
Distribution of MSG (b)
|
|
Pro Forma Continuing Operations
(c) |
|
||||||||
Revenues
|
$
|
1,555,594
|
|
|
$
|
72,535
|
|
|
$
|
(913,615
|
)
|
|
$
|
714,514
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Direct operating expenses
|
899,383
|
|
|
72,535
|
|
|
(712,484
|
)
|
|
259,434
|
|
|
||||
Selling, general and administrative expenses
|
365,148
|
|
|
—
|
|
|
(165,671
|
)
|
|
199,477
|
|
|
||||
Depreciation and amortization
|
106,950
|
|
|
—
|
|
|
(86,140
|
)
|
|
20,810
|
|
|
||||
|
1,371,481
|
|
|
72,535
|
|
|
(964,295
|
)
|
|
479,721
|
|
|
||||
Operating income
|
184,113
|
|
|
—
|
|
|
50,680
|
|
|
234,793
|
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
||||||||
Equity in loss of nonconsolidated affiliates
|
(1,323
|
)
|
|
—
|
|
|
1,323
|
|
|
—
|
|
|
||||
Interest income
|
2,508
|
|
|
—
|
|
|
(590
|
)
|
|
1,918
|
|
|
||||
Interest expense
|
(7,406
|
)
|
|
—
|
|
|
1,529
|
|
|
(5,877
|
)
|
|
||||
Miscellaneous
|
(1,346
|
)
|
|
—
|
|
|
(95
|
)
|
|
(1,441
|
)
|
|
||||
|
(7,567
|
)
|
|
—
|
|
|
2,167
|
|
|
(5,400
|
)
|
|
||||
Income from continuing operations before income taxes
|
176,546
|
|
|
—
|
|
|
52,847
|
|
|
229,393
|
|
|
||||
Income tax benefit (expense)
|
(61,478
|
)
|
|
—
|
|
|
(25,056
|
)
|
|
(86,534
|
)
|
|
||||
Income from continuing operations
|
$
|
115,068
|
|
|
$
|
—
|
|
|
$
|
27,791
|
|
|
$
|
142,859
|
|
|
Earnings per share from continuing operations
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share
|
$
|
1.49
|
|
|
|
|
|
|
$
|
1.85
|
|
(i)
|
||||
Diluted earnings per common share
|
$
|
1.47
|
|
|
|
|
|
|
$
|
1.83
|
|
(i)
|
||||
Weighted-average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
77,142
|
|
|
|
|
|
|
77,142
|
|
(i)
|
||||||
Diluted
|
78,167
|
|
|
|
|
|
|
78,167
|
|
(i)
|
|
Historical
|
|
Historical Intercompany Eliminations (a)
|
|
Distribution of MSG (b)
|
|
Pro Forma Continuing Operations
(c) |
|
||||||||
Revenues
|
$
|
1,340,818
|
|
|
$
|
59,858
|
|
|
$
|
(722,943
|
)
|
|
$
|
677,733
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Direct operating expenses
|
691,029
|
|
|
59,492
|
|
|
(531,856
|
)
|
|
218,665
|
|
|
||||
Selling, general and administrative expenses
|
309,568
|
|
|
366
|
|
|
(138,537
|
)
|
|
171,397
|
|
|
||||
Depreciation and amortization
|
89,132
|
|
|
—
|
|
|
(67,956
|
)
|
|
21,176
|
|
|
||||
|
1,089,729
|
|
|
59,858
|
|
|
(738,349
|
)
|
|
411,238
|
|
|
||||
Operating income
|
251,089
|
|
|
—
|
|
|
15,406
|
|
|
266,495
|
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
||||||||
Equity in loss of nonconsolidated affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||
Interest income
|
2,195
|
|
|
—
|
|
|
(7
|
)
|
|
2,188
|
|
|
||||
Interest expense
|
(7,917
|
)
|
|
—
|
|
|
2,202
|
|
|
(5,715
|
)
|
|
||||
Miscellaneous
|
3,497
|
|
|
—
|
|
|
(3,497
|
)
|
|
—
|
|
|
||||
|
(2,225
|
)
|
|
—
|
|
|
(1,302
|
)
|
|
(3,527
|
)
|
|
||||
Income from continuing operations before income taxes
|
248,864
|
|
|
—
|
|
|
14,104
|
|
|
262,968
|
|
|
||||
Income tax benefit (expense)
|
(106,482
|
)
|
|
—
|
|
|
(333
|
)
|
|
(106,815
|
)
|
|
||||
Income from continuing operations
|
$
|
142,382
|
|
|
$
|
—
|
|
|
$
|
13,771
|
|
|
$
|
156,153
|
|
|
Earnings per share from continuing operations
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share
|
$
|
1.87
|
|
|
|
|
|
|
$
|
2.05
|
|
(i)
|
||||
Diluted earnings per common share
|
$
|
1.83
|
|
|
|
|
|
|
$
|
2.00
|
|
(i)
|
||||
Weighted-average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
76,268
|
|
|
|
|
|
|
76,268
|
|
(i)
|
||||||
Diluted
|
77,940
|
|
|
|
|
|
|
77,940
|
|
(i)
|
|
Historical
|
|
Distribution of MSG (k)
|
|
Other Pro Forma Adjustments
|
|
Notes
|
|
Pro Forma
|
||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||
Current Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
218,685
|
|
|
$
|
(14,917
|
)
|
|
$
|
90,139
|
|
|
(l)
|
|
$
|
293,907
|
|
Restricted cash
|
21,593
|
|
|
(12,590
|
)
|
|
—
|
|
|
|
|
9,003
|
|
||||
Accounts receivable, net
|
136,743
|
|
|
(47,494
|
)
|
|
—
|
|
|
|
|
89,249
|
|
||||
Net related party receivables
|
27,100
|
|
|
823
|
|
|
—
|
|
|
|
|
27,923
|
|
||||
Prepaid expenses
|
69,922
|
|
|
(23,301
|
)
|
|
—
|
|
|
|
|
46,621
|
|
||||
Other current assets
|
24,310
|
|
|
(20,796
|
)
|
|
(1,174
|
)
|
|
(l)
|
|
2,340
|
|
||||
Total current assets
|
498,353
|
|
|
(118,275
|
)
|
|
88,965
|
|
|
|
|
469,043
|
|
||||
Investments in and loans to nonconsolidated affiliates
|
249,394
|
|
|
(249,394
|
)
|
|
—
|
|
|
|
|
—
|
|
||||
Property and equipment, net
|
1,208,219
|
|
|
(1,188,693
|
)
|
|
—
|
|
|
|
|
19,526
|
|
||||
Amortizable intangible assets, net
|
69,907
|
|
|
(22,324
|
)
|
|
—
|
|
|
|
|
47,583
|
|
||||
Indefinite-lived intangible assets
|
166,850
|
|
|
(166,850
|
)
|
|
—
|
|
|
|
|
—
|
|
||||
Goodwill
|
701,674
|
|
|
(277,166
|
)
|
|
—
|
|
|
|
|
424,508
|
|
||||
Other assets
|
125,432
|
|
|
(79,158
|
)
|
|
(2,827
|
)
|
|
(l)
|
|
43,447
|
|
||||
Total assets
|
$
|
3,019,829
|
|
|
$
|
(2,101,860
|
)
|
|
$
|
86,138
|
|
|
|
|
$
|
1,004,107
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||
Accounts payable
|
$
|
17,308
|
|
|
$
|
(5,949
|
)
|
|
$
|
—
|
|
|
|
|
$
|
11,359
|
|
Net related party payables
|
939
|
|
|
(519
|
)
|
|
4,870
|
|
|
(m)
|
|
5,290
|
|
||||
Current portion of long-term debt
|
—
|
|
|
—
|
|
|
69,768
|
|
|
(l)
|
|
69,768
|
|
||||
Income taxes payable
|
—
|
|
|
—
|
|
|
105,458
|
|
|
(n)
|
|
105,458
|
|
||||
Accrued liabilities:
|
|
|
|
|
|
|
|
|
|
|
|||||||
Employee related costs
|
99,734
|
|
|
(78,295
|
)
|
|
—
|
|
|
|
|
21,439
|
|
||||
Other accrued liabilities
|
127,826
|
|
|
(107,488
|
)
|
|
—
|
|
|
|
|
20,338
|
|
||||
Deferred revenue
|
328,727
|
|
|
(323,718
|
)
|
|
—
|
|
|
|
|
5,009
|
|
||||
Total current liabilities
|
574,534
|
|
|
(515,969
|
)
|
|
180,096
|
|
|
|
|
238,661
|
|
||||
Long-term debt, net of current portion
|
—
|
|
|
—
|
|
|
1,466,992
|
|
|
(l)
|
|
1,466,992
|
|
||||
Defined benefit and other postretirement obligations
|
85,216
|
|
|
(56,740
|
)
|
|
—
|
|
|
|
|
28,476
|
|
||||
Other employee related costs
|
57,005
|
|
|
(51,687
|
)
|
|
—
|
|
|
|
|
5,318
|
|
||||
Related party payable
|
—
|
|
|
—
|
|
|
3,488
|
|
|
(m)
|
|
3,488
|
|
||||
Other liabilities
|
55,890
|
|
|
(49,734
|
)
|
|
—
|
|
|
|
|
6,156
|
|
||||
Deferred tax liability
|
523,662
|
|
|
(171,928
|
)
|
|
—
|
|
|
|
|
351,734
|
|
||||
Total liabilities
|
1,296,307
|
|
|
(846,058
|
)
|
|
1,650,576
|
|
|
|
|
2,100,825
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
||||||||
Stockholders' Equity:
|
|
|
|
|
|
|
|
|
|
||||||||
Class A Common stock
|
643
|
|
|
—
|
|
|
—
|
|
|
|
|
643
|
|
||||
Class B Common stock
|
136
|
|
|
—
|
|
|
—
|
|
|
|
|
136
|
|
||||
Preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
||||
Additional paid-in capital
|
1,084,002
|
|
|
(1,084,002
|
)
|
|
—
|
|
|
(k)
|
|
—
|
|
||||
Treasury stock
|
(143,250
|
)
|
|
—
|
|
|
—
|
|
|
|
|
(143,250
|
)
|
||||
Retained earnings (accumulated deficit)
|
807,563
|
|
|
(191,649
|
)
|
|
(1,564,438
|
)
|
|
(k)
|
|
(948,524
|
)
|
||||
Accumulated other comprehensive loss
|
(25,572
|
)
|
|
19,849
|
|
|
—
|
|
|
|
|
(5,723
|
)
|
||||
Total stockholders' equity
|
1,723,522
|
|
|
(1,255,802
|
)
|
|
(1,564,438
|
)
|
|
|
|
(1,096,718
|
)
|
||||
Total liabilities and stockholders' equity
|
$
|
3,019,829
|
|
|
$
|
(2,101,860
|
)
|
|
$
|
86,138
|
|
|
|
|
$
|
1,004,107
|
|
(a)
|
Historical Intercompany Eliminations.
This column represents an adjustment to reflect revenues of
MSG
and operating expenses of the Registrant for transactions between the Registrant and
MSG
that were previously eliminated in the consolidation of the Registrant's historical results and will no longer be eliminated after the Distribution (primarily local media rights for Knicks and Rangers games).
|
(b)
|
Distribution of
MSG
.
Represents the results of operations of
MSG
for the years ended June 30, 2015, 2014 and 2013 that qualify as discontinued operations under GAAP. Note that for each period presented, the revenues of
MSG
include certain local media rights revenues that were previously eliminated in the historical consolidated statements of operations (see Note (a) above).
|
(c)
|
Pro Forma Continuing Operations
.
This column represents the Registrant's historical results of operations after the adjustments made to reflect the transactions associated with the Distribution that qualify as discontinued operations under GAAP. The results of operations for the years ended June 30, 2014 and 2013 include the results of Fuse, a national television network dedicated to music ("Fuse"). On July 1, 2014 the Registrant completed the sale of Fuse.
|
(d)
|
Revenues.
Represents the impact on revenues from (i) the elimination of certain advertising sales commissions, historically netted against revenues, which will be replaced with the commissions paid in connection with the new advertising sales representation agreement with
MSG
(see Note (f) below) and (ii) an increase in revenue for certain license fees.
|
(e)
|
Direct Operating Expenses.
|
i.
|
In connection with the
Distribution
, the Registrant has entered into media rights agreements with
MSG
covering the Knicks and the Rangers, which provide the Registrant with exclusive media rights to team games in their local markets. This adjustment primarily represents the incremental expense of
$49,001
which the Registrant will incur pursuant to the new media rights agreements with
MSG
in addition to the historical intercompany charge of $80,999, which is included in the column labeled "
Pro Forma Continuing Operations
."
|
ii.
|
Represents an increase in expense of
$3,410
related to agreements entered into with
MSG
and other related parties in connection with the Distribution.
|
(f)
|
Selling, General and Administrative Expenses.
|
i.
|
Elimination of
$81,817
of certain general corporate overhead costs that do not meet the criteria for discontinued operations presentation; however, such expenses will no longer be incurred by the Registrant subsequent to the Distribution as a result of certain corporate overhead being transferred to MSG. Following the Distribution, certain of these services will be provided by MSG to the Registrant via the Transition Services Agreement (see (iii) below). Management determined that certain general corporate overhead costs will be reduced as a result of the Distribution, primarily in the areas of information technology, finance, human resources and other corporate functions. In addition, the Registrant expects a further reduction to the general corporate overhead costs included in our pro forma results; however, these expenses were not be removed as they do not meet the criteria under SEC Regulation S-X Article 11 for pro forma adjustments.
|
ii.
|
Incremental net expenses of $3,048 associated with commission expense that the Registrant will be charged by
MSG
pursuant to an advertising sales representation agreement as compared to the historical costs, related to the Registrant's advertising sales personnel and associated corporate staff, that the Registrant will no longer incur as these personnel have been transferred to
MSG
. Under the advertising sales representation agreement,
MSG
will have the exclusive right and obligation to sell the Registrant’s advertising availabilities for an initial stated term of seven years, subject to certain termination rights, including
MSG
’s right to terminate if
|
iii.
|
Incremental expense of
$8,768
which represents the amount that the Registrant will be charged by
MSG
pursuant to the Transition Services Agreement, under which MSG will provide certain support functions for up to two years.
|
(g)
|
Interest Expense.
In connection with the Distribution,
the Registrant has incurred
$1,550,000
of long-term debt (the "New Debt"), from the proceeds of which
$1,450,000
was contributed to
MSG
on September 28, 2015. The New Debt and the revolving credit facility have a term of five years. The New Debt and borrowings under the revolving credit facility bear interest at a floating rate, which at the option of the Registrant may be either (a) a base rate plus an additional rate ranging from 0.50% to 1.25% per annum (determined based on a total leverage ratio) (the “Base Rate”), or (b) a Eurodollar rate plus an additional rate ranging from 1.50% to 2.25% per annum (determined based on a total leverage ratio) (the “Eurodollar Rate”), provided that for the period following the closing date until the delivery of the compliance certificate for the second full fiscal quarter following the closing date, the additional rate will be 1.00% with respect to Base Rate loans and 2.00% with respect to Eurodollar Rate loans. Additionally, the revolving credit facility requires the Registrant to pay a commitment fee of 0.30% in respect of the average daily unused commitments. The pro forma adjustment represents incremental interest expense related to the issuance of the New Debt and a
$250,000
revolving credit facility (see note (l) below). The adjustment also includes the amortization of deferred financing costs. The revolving credit facility was undrawn at closing and will be available to fund working capital needs and other general corporate purposes of the Registrant.
Interest expense presented above assumes an interest rate of 2.2%. A change of 1/8% in the interest rate of the New Debt would impact interest expense by $1,903 for the year ended June 30, 2015.
|
(h)
|
Income Tax Benefit (Expense).
Represents
a blended federal and state statutory rate of
42.3%
applied to the pro forma adjustments to the Registrant's unaudited pro forma condensed consolidated statement of operations for the year ended June 30, 2015.
|
(i)
|
Earnings Per Share.
Pro forma weighted-average basic and diluted shares outstanding reflect the effect of shares outstanding had the
Distribution
taken place during the periods presented. Additional share impacts resulting from the
Distribution
have been excluded as they are not currently determinable but will be reflected on a prospective basis after the
Distribution
.
|
(j)
|
Pro Forma.
The pro forma results for the year ended June 30, 2015 include share-based compensation expense of $4,159.
|
(k)
|
Distribution of
MSG
.
These adjustments represent the elimination of the historical assets and liabilities (excluding intercompany balances between the Registrant and
MSG
) of
MSG
from the Registrant's consolidated balance sheet as of June 30, 2015. In connection with the distribution of assets and liabilities of
MSG
, the cumulative additional paid-in capital ("APIC") of the Registrant was fully depleted. As a result, any further adjustments that would typically be recorded against APIC have been reflected as decreases in retained earnings (accumulated deficit). This includes the the impact of other pro forma adjustments discussed in further detail in footnotes (l), (m) and (n).
|
(l)
|
Issuance of long-term debt and cash contribution to MSG.
|
|
Cash and cash equivalents
|
Other current assets
|
Other assets
|
Current portion of long-term debt
|
Long-term debt, net of current portion
|
Retained earnings (accumulated deficit)
|
||||||||||||
Issuance of New Debt
|
$
|
1,550,000
|
|
$
|
—
|
|
$
|
—
|
|
$
|
72,416
|
|
$
|
1,477,584
|
|
$
|
—
|
|
Cash contribution to MSG
|
(1,450,000
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,450,000
|
)
|
||||||
Deferred financing costs incurred in connection with the New Debt
|
(9,861
|
)
|
274
|
|
1,096
|
|
(1,698
|
)
|
(6,793
|
)
|
—
|
|
||||||
Remove a portion of historical deferred financing costs
|
—
|
|
(162
|
)
|
(460
|
)
|
—
|
|
—
|
|
(622
|
)
|
||||||
Reclassifications related to historical deferred financing costs
|
—
|
|
(1,286
|
)
|
(3,463
|
)
|
(950
|
)
|
(3,799
|
)
|
—
|
|
||||||
|
$
|
90,139
|
|
$
|
(1,174
|
)
|
$
|
(2,827
|
)
|
$
|
69,768
|
|
$
|
1,466,992
|
|
$
|
(1,450,622
|
)
|
(m)
|
Related Party Payables.
Adjustments represent the Registrant's payables to MSG as reimbursement for certain employee-related expenses incurred prior to the Distribution.
|
(n)
|
Income Taxes Payable.
Prior to the
Distribution
, the Registrant's collection for ticket sales, sponsorships and suite rentals in advance were recorded as deferred revenue and were recognized as revenues when earned for both accounting and tax purposes. In connection with the reorganization transactions related to the
Distribution
, the tax recognition on most of these deferred revenues was accelerated to the date of the reorganization, rather than being recognized over the course of the year ending June 30, 2016. Assuming the
Distribution
occurred on June 30, 2015, the estimated tax on the acceleration of such deferred revenue is
$105,458
. However, the ultimate amount of tax to be paid by the Registrant related to acceleration of such deferred revenue is projected to be higher than $105,458 as it will also include activity for the fiscal 2016 first quarter, as the Distribution occurred on September 30, 2015 (versus June 30, 2015). Such tax will be paid by the Registrant and the Registrant will not be reimbursed by
MSG
.
|