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Share Name | Share Symbol | Market | Type |
---|---|---|---|
MSG Networks Inc | NYSE:MSGN | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 14.17 | 0 | 01:00:00 |
|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
27-0624498
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
þ
|
Accelerated filer
o
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
Smaller reporting company
o
|
Emerging growth company
o
|
Class A Common Stock par value $0.01 per share
|
—
|
61,696,629
|
Class B Common Stock par value $0.01 per share
|
—
|
13,588,555
|
|
|
|
Page
|
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|
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December 31,
2017 |
|
June 30,
2017 |
||||
ASSETS
|
|
(unaudited)
|
|
|
||||
Current Assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
201,915
|
|
|
$
|
141,087
|
|
Accounts receivable, net
|
|
104,381
|
|
|
105,030
|
|
||
Net related party receivable
|
|
19,293
|
|
|
17,153
|
|
||
Prepaid income taxes
|
|
3,654
|
|
|
14,322
|
|
||
Prepaid expenses
|
|
5,452
|
|
|
6,468
|
|
||
Other current assets
|
|
3,467
|
|
|
2,343
|
|
||
Total current assets
|
|
338,162
|
|
|
286,403
|
|
||
Property and equipment, net
|
|
9,447
|
|
|
11,828
|
|
||
Amortizable intangible assets, net
|
|
38,933
|
|
|
40,663
|
|
||
Goodwill
|
|
424,508
|
|
|
424,508
|
|
||
Other assets
|
|
40,714
|
|
|
41,642
|
|
||
Total assets
|
|
$
|
851,764
|
|
|
$
|
805,044
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
|
|
|
|
|
||||
Current Liabilities:
|
|
|
|
|
||||
Accounts payable
|
|
$
|
1,398
|
|
|
$
|
1,241
|
|
Net related party payable
|
|
805
|
|
|
2,963
|
|
||
Current portion of long-term debt
|
|
72,414
|
|
|
72,414
|
|
||
Income taxes payable
|
|
7,400
|
|
|
11,483
|
|
||
Accrued liabilities:
|
|
|
|
|
||||
Employee related costs
|
|
9,284
|
|
|
14,238
|
|
||
Other accrued liabilities
|
|
13,927
|
|
|
10,050
|
|
||
Deferred revenue
|
|
3,370
|
|
|
5,071
|
|
||
Total current liabilities
|
|
108,598
|
|
|
117,460
|
|
||
Long-term debt, net of current portion
|
|
1,204,224
|
|
|
1,240,431
|
|
||
Defined benefit and other postretirement obligations
|
|
29,051
|
|
|
29,979
|
|
||
Other employee related costs
|
|
3,966
|
|
|
3,930
|
|
||
Other liabilities
|
|
5,566
|
|
|
5,597
|
|
||
Deferred tax liability
|
|
243,601
|
|
|
351,854
|
|
||
Total liabilities
|
|
1,595,006
|
|
|
1,749,251
|
|
||
Commitments and contingencies (see Note 7)
|
|
|
|
|
||||
Stockholders' Deficiency:
|
|
|
|
|
||||
Class A Common stock, par value $0.01, 360,000 shares authorized; 61,696 and 61,497 shares outstanding as of
December 31, 2017 and June 30, 2017, respectively |
|
643
|
|
|
643
|
|
||
Class B Common stock, par value $0.01, 90,000 shares authorized; 13,589 shares outstanding as of December 31, 2017 and June 30, 2017
|
|
136
|
|
|
136
|
|
||
Preferred stock, par value $0.01, 45,000 shares authorized; none outstanding
|
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
|
349
|
|
|
6,909
|
|
||
Treasury stock, at cost, 2,563 and 2,762 shares as of December 31, 2017 and June 30, 2017, respectively
|
|
(184,449
|
)
|
|
(198,800
|
)
|
||
Accumulated deficit
|
|
(553,535
|
)
|
|
(746,539
|
)
|
||
Accumulated other comprehensive loss
|
|
(6,386
|
)
|
|
(6,556
|
)
|
||
Total stockholders' deficiency
|
|
(743,242
|
)
|
|
(944,207
|
)
|
||
|
|
|
|
|
||||
Total liabilities and stockholders' deficiency
|
|
$
|
851,764
|
|
|
$
|
805,044
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 31,
|
|
December 31,
|
|||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Revenues
|
|
$
|
181,222
|
|
|
$
|
175,646
|
|
|
$
|
338,678
|
|
|
$
|
329,224
|
|
|
|
|
|
|
|
|
|
|
||||||||
Direct operating expenses (including related party expenses of $37,332 and $34,905 for the three months ended December 31, 2017 and 2016, respectively, and $74,013 and $70,169 for the six months ended December 31, 2017 and 2016, respectively)
|
|
78,902
|
|
|
69,924
|
|
|
141,993
|
|
|
130,699
|
|
||||
Selling, general and administrative expenses (including related party expenses of $7,429 and $6,866 for the three months ended December 31, 2017 and 2016, respectively, and $10,152 and $9,562 for the six months ended December 31, 2017 and 2016, respectively)
|
|
24,311
|
|
|
22,997
|
|
|
39,872
|
|
|
38,295
|
|
||||
Depreciation and amortization
|
|
2,423
|
|
|
2,580
|
|
|
4,874
|
|
|
5,158
|
|
||||
Operating income
|
|
75,586
|
|
|
80,145
|
|
|
151,939
|
|
|
155,072
|
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
|
999
|
|
|
649
|
|
|
1,877
|
|
|
1,276
|
|
||||
Interest expense
|
|
(10,242
|
)
|
|
(9,714
|
)
|
|
(20,885
|
)
|
|
(19,229
|
)
|
||||
Other components of net periodic benefit cost
|
|
(407
|
)
|
|
(346
|
)
|
|
(814
|
)
|
|
(766
|
)
|
||||
|
|
(9,650
|
)
|
|
(9,411
|
)
|
|
(19,822
|
)
|
|
(18,719
|
)
|
||||
Income from continuing operations before income taxes
|
|
65,936
|
|
|
70,734
|
|
|
132,117
|
|
|
136,353
|
|
||||
Income tax benefit (expense)
|
|
89,632
|
|
|
(27,479
|
)
|
|
64,608
|
|
|
(52,737
|
)
|
||||
Income from continuing operations
|
|
155,568
|
|
|
43,255
|
|
|
196,725
|
|
|
83,616
|
|
||||
Loss from discontinued operations, net of taxes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(120
|
)
|
||||
Net income
|
|
$
|
155,568
|
|
|
$
|
43,255
|
|
|
$
|
196,725
|
|
|
$
|
83,496
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
|
$
|
2.06
|
|
|
$
|
0.58
|
|
|
$
|
2.61
|
|
|
$
|
1.11
|
|
Loss from discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income
|
|
$
|
2.06
|
|
|
$
|
0.58
|
|
|
$
|
2.61
|
|
|
$
|
1.11
|
|
Diluted
|
|
|
|
|
|
|
|
|
||||||||
Income from continuing operations
|
|
$
|
2.05
|
|
|
$
|
0.57
|
|
|
$
|
2.60
|
|
|
$
|
1.11
|
|
Loss from discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income
|
|
$
|
2.05
|
|
|
$
|
0.57
|
|
|
$
|
2.60
|
|
|
$
|
1.11
|
|
Weighted-average number of common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
75,458
|
|
|
75,215
|
|
|
75,371
|
|
|
75,159
|
|
||||
Diluted
|
|
75,756
|
|
|
75,461
|
|
|
75,768
|
|
|
75,436
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
December 31,
|
|
December 31,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income
|
|
$
|
155,568
|
|
|
$
|
43,255
|
|
|
$
|
196,725
|
|
|
$
|
83,496
|
|
Other comprehensive income (loss) before income taxes:
|
|
|
|
|
|
|
|
|
||||||||
Pension plans and postretirement plan:
|
|
|
|
|
|
|
|
|
||||||||
Amounts reclassified from accumulated other comprehensive loss:
|
|
|
|
|
|
|
|
|
||||||||
Amortization of net actuarial loss included in net periodic benefit cost
|
|
149
|
|
|
175
|
|
|
298
|
|
|
350
|
|
||||
Amortization of net prior service credit included in net periodic benefit cost
|
|
(3
|
)
|
|
(6
|
)
|
|
(6
|
)
|
|
(12
|
)
|
||||
Settlement gain
|
|
—
|
|
|
(74
|
)
|
|
—
|
|
|
(74
|
)
|
||||
Other comprehensive income before income taxes
|
|
146
|
|
|
95
|
|
|
292
|
|
|
264
|
|
||||
Income tax expense related to items of other comprehensive income
|
|
(61
|
)
|
|
(40
|
)
|
|
(122
|
)
|
|
(111
|
)
|
||||
Other comprehensive income
|
|
85
|
|
|
55
|
|
|
170
|
|
|
153
|
|
||||
Comprehensive income
|
|
$
|
155,653
|
|
|
$
|
43,310
|
|
|
$
|
196,895
|
|
|
$
|
83,649
|
|
|
|
Six Months Ended
|
||||||
|
|
December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Cash flows from operating activities from continuing operations:
|
|
|
|
|
||||
Net income
|
|
$
|
196,725
|
|
|
$
|
83,496
|
|
Loss from discontinued operations, net of taxes
|
|
—
|
|
|
120
|
|
||
Income from continuing operations
|
|
196,725
|
|
|
83,616
|
|
||
Adjustments to reconcile net income to net cash provided by operating activities from continuing operations:
|
|
|
|
|
||||
Depreciation and amortization
|
|
4,874
|
|
|
5,158
|
|
||
Amortization of deferred financing costs
|
|
1,501
|
|
|
1,502
|
|
||
Share-based compensation expense
|
|
7,719
|
|
|
5,049
|
|
||
Provision for doubtful accounts
|
|
252
|
|
|
(162
|
)
|
||
Change in assets and liabilities:
|
|
|
|
|
||||
Accounts receivable, net
|
|
773
|
|
|
1,014
|
|
||
Net related party receivable
|
|
(3,387
|
)
|
|
(246
|
)
|
||
Prepaid expenses and other assets
|
|
612
|
|
|
899
|
|
||
Accounts payable
|
|
157
|
|
|
(1,055
|
)
|
||
Net related party payable, including payable to MSG
|
|
(2,163
|
)
|
|
(2,289
|
)
|
||
Prepaid/payable for income taxes
|
|
6,585
|
|
|
13,362
|
|
||
Accrued and other liabilities
|
|
(1,600
|
)
|
|
(1,310
|
)
|
||
Deferred revenue
|
|
(1,701
|
)
|
|
(2,566
|
)
|
||
Deferred income taxes
|
|
(108,375
|
)
|
|
(1,948
|
)
|
||
Net cash provided by operating activities from continuing operations
|
|
101,972
|
|
|
101,024
|
|
||
Cash flows from investing activities from continuing operations:
|
|
|
|
|
||||
Capital expenditures
|
|
(871
|
)
|
|
(2,242
|
)
|
||
Net cash used in investing activities from continuing operations
|
|
(871
|
)
|
|
(2,242
|
)
|
||
Cash flows from financing activities from continuing operations:
|
|
|
|
|
||||
Principal repayments on Term Loan Facility (see Note 6)
|
|
(37,500
|
)
|
|
(30,000
|
)
|
||
Taxes paid in lieu of shares issued for share-based compensation
|
|
(2,773
|
)
|
|
(2,254
|
)
|
||
Net cash used in financing activities from continuing operations
|
|
(40,273
|
)
|
|
(32,254
|
)
|
||
Net cash provided by continuing operations
|
|
60,828
|
|
|
66,528
|
|
||
Cash flows of discontinued operations:
|
|
|
|
|
||||
Net cash used in operating activities
|
|
—
|
|
|
(953
|
)
|
||
Net cash used in investing activities
|
|
—
|
|
|
—
|
|
||
Net cash used in financing activities
|
|
—
|
|
|
—
|
|
||
Net cash used in discontinued operations
|
|
—
|
|
|
(953
|
)
|
||
Net increase in cash and cash equivalents
|
|
60,828
|
|
|
65,575
|
|
||
Cash and cash equivalents at beginning of period
|
|
141,087
|
|
|
119,568
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
201,915
|
|
|
$
|
185,143
|
|
|
|
Common
Stock
Issued
|
|
Additional
Paid-In
Capital
|
|
Treasury
Stock
|
|
Accumulated Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
||||||||||||
Balance as of June 30, 2017
|
|
$
|
779
|
|
|
$
|
6,909
|
|
|
$
|
(198,800
|
)
|
|
$
|
(746,539
|
)
|
|
$
|
(6,556
|
)
|
|
$
|
(944,207
|
)
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
196,725
|
|
|
—
|
|
|
196,725
|
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
170
|
|
|
170
|
|
||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
196,895
|
|
|||||||||||
Share-based compensation expense
|
|
—
|
|
|
7,719
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,719
|
|
||||||
Tax withholding associated with shares issued for share-based compensation
|
|
—
|
|
|
(3,649
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,649
|
)
|
||||||
Shares issued upon distribution of Restricted Stock Units
|
|
—
|
|
|
(10,630
|
)
|
|
14,351
|
|
|
(3,721
|
)
|
|
—
|
|
|
—
|
|
||||||
Balance as of December 31, 2017
|
|
$
|
779
|
|
|
$
|
349
|
|
|
$
|
(184,449
|
)
|
|
$
|
(553,535
|
)
|
|
$
|
(6,386
|
)
|
|
$
|
(743,242
|
)
|
|
|
Common
Stock
Issued
|
|
Additional
Paid-In
Capital
|
|
Treasury
Stock
|
|
Accumulated Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
|
||||||||||||
Balance as of June 30, 2016
|
|
$
|
779
|
|
|
$
|
—
|
|
|
$
|
(207,796
|
)
|
|
$
|
(905,352
|
)
|
|
$
|
(7,589
|
)
|
|
$
|
(1,119,958
|
)
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83,496
|
|
|
—
|
|
|
83,496
|
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
153
|
|
|
153
|
|
||||||
Comprehensive income
|
|
|
|
|
|
|
|
|
|
|
|
83,649
|
|
|||||||||||
Exercise of stock options
|
|
—
|
|
|
(57
|
)
|
|
59
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||||
Share-based compensation expense
|
|
—
|
|
|
5,049
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,049
|
|
||||||
Tax withholding associated with shares issued for share-based compensation
|
|
—
|
|
|
(1,793
|
)
|
|
(423
|
)
|
|
(55
|
)
|
|
—
|
|
|
(2,271
|
)
|
||||||
Shares issued upon distribution of Restricted Stock Units
|
|
—
|
|
|
(86
|
)
|
|
10,448
|
|
|
(10,362
|
)
|
|
—
|
|
|
—
|
|
||||||
Adjustments related to the transfer of certain liabilities as a result of the Distribution
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(158
|
)
|
|
—
|
|
|
(158
|
)
|
||||||
Balance as of December 31, 2016
|
|
$
|
779
|
|
|
$
|
3,113
|
|
|
$
|
(197,712
|
)
|
|
$
|
(832,431
|
)
|
|
$
|
(7,436
|
)
|
|
$
|
(1,033,687
|
)
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||
|
|
December 31,
|
|
December 31,
|
||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Weighted-average number of shares for basic EPS
|
|
75,458
|
|
|
75,215
|
|
|
75,371
|
|
|
75,159
|
|
Dilutive effect of shares issuable under share-based compensation plans
|
|
298
|
|
|
246
|
|
|
397
|
|
|
277
|
|
Weighted-average number of shares for diluted EPS
|
|
75,756
|
|
|
75,461
|
|
|
75,768
|
|
|
75,436
|
|
Anti-dilutive shares
|
|
1,072
|
|
|
535
|
|
|
615
|
|
|
317
|
|
|
|
December 31, 2017
|
|
June 30,
2017 |
||||
Affiliate relationships
|
|
$
|
83,044
|
|
|
$
|
83,044
|
|
Less accumulated amortization
|
|
(44,111
|
)
|
|
(42,381
|
)
|
||
|
|
$
|
38,933
|
|
|
$
|
40,663
|
|
|
|
December 31,
2017 |
|
June 30,
2017 |
||||
Equipment
|
|
$
|
41,954
|
|
|
$
|
40,918
|
|
Furniture and fixtures
|
|
1,695
|
|
|
1,695
|
|
||
Leasehold improvements
|
|
19,285
|
|
|
19,285
|
|
||
Construction in progress
|
|
269
|
|
|
565
|
|
||
|
|
63,203
|
|
|
62,463
|
|
||
Less accumulated depreciation and amortization
|
|
(53,756
|
)
|
|
(50,635
|
)
|
||
|
|
$
|
9,447
|
|
|
$
|
11,828
|
|
Remainder of fiscal year ending June 30, 2018
|
|
$
|
37,500
|
|
Fiscal year ending June 30, 2019
|
|
75,000
|
|
|
Fiscal year ending June 30, 2020
|
|
114,375
|
|
|
Fiscal year ending June 30, 2021
|
|
1,056,875
|
|
|
|
|
$
|
1,283,750
|
|
|
|
Term Loan Facility
|
|
Deferred Financing Costs
|
|
Total
|
||||||
December 31, 2017
|
|
|
|
|
|
|
||||||
Current portion of long-term debt
|
|
$
|
75,000
|
|
|
$
|
(2,586
|
)
|
|
$
|
72,414
|
|
Long-term debt, net of current portion
|
|
1,208,750
|
|
|
(4,526
|
)
|
|
1,204,224
|
|
|||
Total
|
|
$
|
1,283,750
|
|
|
$
|
(7,112
|
)
|
|
$
|
1,276,638
|
|
June 30, 2017
|
|
|
|
|
|
|
||||||
Current portion of long-term debt
|
|
$
|
75,000
|
|
|
$
|
(2,586
|
)
|
|
$
|
72,414
|
|
Long-term debt, net of current portion
|
|
1,246,250
|
|
|
(5,819
|
)
|
|
1,240,431
|
|
|||
Total
|
|
$
|
1,321,250
|
|
|
$
|
(8,405
|
)
|
|
$
|
1,312,845
|
|
|
|
December 31, 2017
|
|
June 30, 2017
|
||||
|
|
|||||||
Other current assets
|
|
$
|
417
|
|
|
$
|
417
|
|
Other assets
|
|
730
|
|
|
938
|
|
•
|
Level I — Quoted prices for identical instruments in active markets.
|
•
|
Level II — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
|
•
|
Level III — Instruments whose significant value drivers are unobservable.
|
|
|
Level I
|
|
Level II
|
|
Level III
|
|
Total
|
||||||||
December 31, 2017
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Money market accounts
|
|
$
|
31,292
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31,292
|
|
Time deposits
|
|
170,623
|
|
|
—
|
|
|
—
|
|
|
170,623
|
|
||||
Total assets measured at fair value
|
|
$
|
201,915
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
201,915
|
|
June 30, 2017
|
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Money market accounts
|
|
$
|
34,128
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
34,128
|
|
Time deposits
|
|
106,482
|
|
|
—
|
|
|
—
|
|
|
106,482
|
|
||||
Total assets measured at fair value
|
|
$
|
140,610
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
140,610
|
|
|
|
Pension Plans
|
|
Postretirement Plan
|
||||||||||||
|
|
Three Months Ended
|
|
Three Months Ended
|
||||||||||||
|
|
December 31,
|
|
December 31,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
|
$
|
128
|
|
|
$
|
133
|
|
|
$
|
17
|
|
|
$
|
18
|
|
Interest cost
|
|
358
|
|
|
332
|
|
|
30
|
|
|
25
|
|
||||
Expected return on plan assets
|
|
(127
|
)
|
|
(106
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss
(a)
|
|
149
|
|
|
175
|
|
|
—
|
|
|
—
|
|
||||
Amortization of unrecognized prior service credit
(a)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(6
|
)
|
||||
Settlement gain
(a)
|
|
—
|
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
|
|
$
|
508
|
|
|
$
|
460
|
|
|
$
|
44
|
|
|
$
|
37
|
|
|
|
Pension Plans
|
|
Postretirement Plan
|
||||||||||||
|
|
Six Months Ended
|
|
Six Months Ended
|
||||||||||||
|
|
December 31,
|
|
December 31,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
|
$
|
256
|
|
|
$
|
266
|
|
|
$
|
34
|
|
|
$
|
36
|
|
Interest cost
|
|
716
|
|
|
664
|
|
|
60
|
|
|
50
|
|
||||
Expected return on plan assets
|
|
(254
|
)
|
|
(212
|
)
|
|
—
|
|
|
—
|
|
||||
Recognized actuarial loss
(a)
|
|
298
|
|
|
350
|
|
|
—
|
|
|
—
|
|
||||
Amortization of unrecognized prior service credit
(a)
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
(12
|
)
|
||||
Settlement gain
(a)
|
|
—
|
|
|
(74
|
)
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
|
|
$
|
1,016
|
|
|
$
|
994
|
|
|
$
|
88
|
|
|
$
|
74
|
|
|
Number of
|
|
Weighted-
Average
Exercise
Price Per
Share
|
|
Weighted-
Average
Remaining
Contractual
Term (In Years)
|
|
Aggregate Intrinsic
Value
|
||||||||
|
Nonperformance
Based
Vesting
Options |
|
Performance
Based
Vesting
Options |
|
|||||||||||
Balance as of June 30, 2017
|
535
|
|
|
534
|
|
|
$
|
17.81
|
|
|
6.71
|
|
$
|
4,960
|
|
Granted
|
426
|
|
|
427
|
|
|
21.60
|
|
|
|
|
|
|||
Balance as of December 31, 2017
|
961
|
|
|
961
|
|
|
$
|
19.49
|
|
|
6.19
|
|
$
|
2,608
|
|
Exercisable as of December 31, 2017
|
178
|
|
|
—
|
|
|
$
|
17.81
|
|
|
6.21
|
|
$
|
435
|
|
Risk-free interest rate
|
1.76
|
%
|
|
Expected term
|
5.25 years
|
|
|
Expected volatility
|
24.79
|
%
|
|
Number of
|
|
|
||||||
|
Nonperformance
Based
Vesting
RSUs
|
|
Performance
Based
Vesting
RSUs
|
|
Weighted-Average
Fair Value Per Share
At Date of Grant
|
||||
Unvested award balance as of June 30, 2017
|
544
|
|
|
597
|
|
|
$
|
25.79
|
|
Granted
|
181
|
|
|
340
|
|
|
21.31
|
|
|
Vested
|
(318
|
)
|
|
(132
|
)
|
|
33.25
|
|
|
Forfeited
|
(3
|
)
|
|
(2
|
)
|
|
35.99
|
|
|
Unvested award balance as of December 31, 2017
|
404
|
|
|
803
|
|
|
21.04
|
|
|
December 31,
2017 |
|
June 30,
2017 |
||
Customer A
|
26
|
%
|
|
26
|
%
|
Customer B
|
25
|
%
|
|
25
|
%
|
Customer C
|
23
|
%
|
|
22
|
%
|
Customer D
|
14
|
%
|
|
14
|
%
|
|
Three Months Ended December 31,
|
|
Six Months Ended December 31,
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Customer 1
|
23
|
%
|
|
24
|
%
|
|
24
|
%
|
|
25
|
%
|
Customer 2
|
22
|
%
|
|
22
|
%
|
|
24
|
%
|
|
24
|
%
|
Customer 3
|
20
|
%
|
|
19
|
%
|
|
22
|
%
|
|
21
|
%
|
Customer 4
|
9
|
%
|
|
10
|
%
|
|
10
|
%
|
|
11
|
%
|
Reported in
|
December 31, 2017
|
|
June 30,
2017 |
||||
Prepaid expenses
|
$
|
3,000
|
|
|
$
|
3,000
|
|
Other current assets
|
2,000
|
|
|
2,000
|
|
||
Other assets
|
40,000
|
|
|
41,000
|
|
||
|
$
|
45,000
|
|
|
$
|
46,000
|
|
•
|
the demand for our programming among cable, satellite, telephone and other platforms (“Distributors”) and the subscribers thereto, and our ability to enter into and renew affiliation agreements with Distributors, as well as the impact of consolidation among Distributors;
|
•
|
the level of our revenues, which depends in part on the popularity and competitiveness of the sports teams whose games are broadcast on our networks and the popularity of other content aired on our networks;
|
•
|
the ability of our Distributors to maintain subscriber levels;
|
•
|
the impact of subscribers downgrading their programming packages to levels that do not include our networks;
|
•
|
the security of our program signal and electronic data;
|
•
|
general economic conditions especially in the New York City metropolitan area where we conduct the majority of our operations;
|
•
|
the demand for advertising and sponsorship arrangements and viewer ratings for our networks;
|
•
|
competition, for example, from other regional sports networks;
|
•
|
the relocation or insolvency of professional sports teams with which we have a media rights agreement;
|
•
|
our ability to maintain, obtain or produce content, together with the cost of such content;
|
•
|
our ability to renew or replace our media rights agreements with professional sports teams;
|
•
|
the acquisition or disposition of assets and/or the impact of, and our ability to successfully pursue, acquisitions or other strategic transactions, and the operating and financial performance thereof (including those that we do not control);
|
•
|
the costs associated with, and the outcome of, litigation and other proceedings to the extent uninsured;
|
•
|
the impact of governmental regulations or laws and changes in such regulations or laws;
|
•
|
the impact of sports league rules, regulations and/or agreements and changes thereto;
|
•
|
cybersecurity and similar risks which could result in the disclosure of confidential information, disruption of our business or damage to our brands and reputation;
|
•
|
our substantial debt and high leverage;
|
•
|
any reduction in our access to capital markets or significant increases in costs to borrow;
|
•
|
financial community perceptions of our business, operations, financial condition and the industry in which we operate;
|
•
|
the impact of the Tax Cuts and Jobs Act on our income tax benefit (expense) and deferred tax liabilities;
|
•
|
the tax-free treatment of the Distribution; and
|
•
|
the factors described under “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended
June 30, 2017
.
|
|
|
Three Months Ended December 31,
|
|
Increase
(Decrease)
in Net
Income
|
||||||||||||||
|
|
2017
|
|
2016
|
|
|||||||||||||
|
|
Amount
|
|
% of
Revenues
|
|
Amount
|
|
% of
Revenues
|
|
|||||||||
Revenues
|
|
$
|
181,222
|
|
|
100
|
%
|
|
$
|
175,646
|
|
|
100
|
%
|
|
$
|
5,576
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Direct operating expenses
|
|
78,902
|
|
|
44
|
%
|
|
69,924
|
|
|
40
|
%
|
|
(8,978
|
)
|
|||
Selling, general and administrative expenses
|
|
24,311
|
|
|
13
|
%
|
|
22,997
|
|
|
13
|
%
|
|
(1,314
|
)
|
|||
Depreciation and amortization
|
|
2,423
|
|
|
1
|
%
|
|
2,580
|
|
|
1
|
%
|
|
157
|
|
|||
Operating income
|
|
75,586
|
|
|
42
|
%
|
|
80,145
|
|
|
46
|
%
|
|
(4,559
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
|
999
|
|
|
1
|
%
|
|
649
|
|
|
NM
|
|
|
350
|
|
|||
Interest expense
|
|
(10,242
|
)
|
|
(6
|
)%
|
|
(9,714
|
)
|
|
(6
|
)%
|
|
(528
|
)
|
|||
Other components of net periodic benefit cost
|
|
(407
|
)
|
|
NM
|
|
|
(346
|
)
|
|
NM
|
|
|
(61
|
)
|
|||
|
|
(9,650
|
)
|
|
(5
|
)%
|
|
(9,411
|
)
|
|
(5
|
)%
|
|
(239
|
)
|
|||
Income from operations before income taxes
|
|
65,936
|
|
|
36
|
%
|
|
70,734
|
|
|
40
|
%
|
|
(4,798
|
)
|
|||
Income tax benefit (expense)
|
|
89,632
|
|
|
49
|
%
|
|
(27,479
|
)
|
|
(16
|
)%
|
|
117,111
|
|
|||
Net income
|
|
$
|
155,568
|
|
|
86
|
%
|
|
$
|
43,255
|
|
|
25
|
%
|
|
$
|
112,313
|
|
Increase in affiliation fee revenue
|
$
|
4,359
|
|
Increase in advertising revenue
|
749
|
|
|
Other net increases
|
468
|
|
|
|
$
|
5,576
|
|
|
|
Three Months Ended
|
|
Increase (Decrease)
in AOI
|
||||||||
|
|
December 31,
|
|
|||||||||
|
|
2017
|
|
2016
|
|
|||||||
Operating income
|
|
$
|
75,586
|
|
|
$
|
80,145
|
|
|
$
|
(4,559
|
)
|
Share-based compensation
|
|
4,798
|
|
|
3,273
|
|
|
1,525
|
|
|||
Depreciation and amortization
|
|
2,423
|
|
|
2,580
|
|
|
(157
|
)
|
|||
Adjusted operating income
|
|
$
|
82,807
|
|
|
$
|
85,998
|
|
|
$
|
(3,191
|
)
|
|
|
Six Months Ended December 31,
|
|
Increase
(Decrease)
in Net
Income
|
||||||||||||||
|
|
2017
|
|
2016
|
|
|||||||||||||
|
|
Amount
|
|
% of
Revenues
|
|
Amount
|
|
% of
Revenues
|
|
|||||||||
Revenues
|
|
$
|
338,678
|
|
|
100
|
%
|
|
$
|
329,224
|
|
|
100
|
%
|
|
$
|
9,454
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Direct operating expenses
|
|
141,993
|
|
|
42
|
%
|
|
130,699
|
|
|
40
|
%
|
|
(11,294
|
)
|
|||
Selling, general and administrative expenses
|
|
39,872
|
|
|
12
|
%
|
|
38,295
|
|
|
12
|
%
|
|
(1,577
|
)
|
|||
Depreciation and amortization
|
|
4,874
|
|
|
1
|
%
|
|
5,158
|
|
|
2
|
%
|
|
284
|
|
|||
Operating income
|
|
151,939
|
|
|
45
|
%
|
|
155,072
|
|
|
47
|
%
|
|
(3,133
|
)
|
|||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest income
|
|
1,877
|
|
|
1
|
%
|
|
1,276
|
|
|
NM
|
|
|
601
|
|
|||
Interest expense
|
|
(20,885
|
)
|
|
(6
|
)%
|
|
(19,229
|
)
|
|
(6
|
)%
|
|
(1,656
|
)
|
|||
Other components of net periodic benefit cost
|
|
(814
|
)
|
|
NM
|
|
|
(766
|
)
|
|
NM
|
|
|
(48
|
)
|
|||
|
|
(19,822
|
)
|
|
(6
|
)%
|
|
(18,719
|
)
|
|
(6
|
)%
|
|
(1,103
|
)
|
|||
Income from continuing operations before income taxes
|
|
132,117
|
|
|
39
|
%
|
|
136,353
|
|
|
41
|
%
|
|
(4,236
|
)
|
|||
Income tax benefit (expense)
|
|
64,608
|
|
|
19
|
%
|
|
(52,737
|
)
|
|
(16
|
)%
|
|
117,345
|
|
|||
Income from continuing operations
|
|
196,725
|
|
|
58
|
%
|
|
83,616
|
|
|
25
|
%
|
|
113,109
|
|
|||
Loss from discontinued operations, net of taxes
|
|
—
|
|
|
NM
|
|
|
(120
|
)
|
|
NM
|
|
|
120
|
|
|||
Net income
|
|
$
|
196,725
|
|
|
58
|
%
|
|
$
|
83,496
|
|
|
25
|
%
|
|
$
|
113,229
|
|
Increase in affiliation fee revenue
|
$
|
8,206
|
|
Increase in advertising revenue
|
613
|
|
|
Other net increases
|
635
|
|
|
|
$
|
9,454
|
|
|
|
Six Months Ended
|
|
Increase (Decrease)
in AOI
|
||||||||
|
|
December 31,
|
|
|||||||||
|
|
2017
|
|
2016
|
|
|||||||
Operating income
|
|
$
|
151,939
|
|
|
$
|
155,072
|
|
|
$
|
(3,133
|
)
|
Share-based compensation
|
|
7,719
|
|
|
5,049
|
|
|
2,670
|
|
|||
Depreciation and amortization
|
|
4,874
|
|
|
5,158
|
|
|
(284
|
)
|
|||
Adjusted operating income
|
|
$
|
164,532
|
|
|
$
|
165,279
|
|
|
$
|
(747
|
)
|
•
|
Macroeconomic conditions;
|
•
|
Industry and market considerations;
|
•
|
Cost factors;
|
•
|
Overall financial performance;
|
•
|
Other relevant company-specific factors such as changes in management, strategy or customers; and
|
•
|
Relevant specific events such as changes in the carrying amount of net assets.
|
(a)
|
Index to Exhibits
|
EXHIBIT
NO.
|
|
DESCRIPTION
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
32.2
|
|
|
101.INS
|
|
XBRL Instance Document.
|
101.SCH
|
|
XBRL Taxonomy Extension Schema.
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase.
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase.
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase.
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase.
|
MSG Networks Inc.
|
||
|
|
|
By:
|
/
S
/ B
RET
R
ICHTER
|
|
|
Name:
|
Bret Richter
|
|
Title:
|
Executive Vice President,
|
|
|
Chief Financial Officer and Treasurer
|
1 Year MSG Networks Chart |
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