What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-11-08 compared with 2024-05-09 · 116 added, 245 removed, 179 unchanged (67% of the section changed)

7 unchanged sentences

• the level of our expenses, including our corporate expenses;

• the level of our revenues, which depends in part on the popularity of the Christmas Spectacular Starring the Radio City Rockettes ( the “Christmas Spectacular”) , the sports teams whose games are played at Madison Square Garden (“The Garden”), and other events which are presented in our venues, and our ability to attract such events;

• the level of our revenues, which depends in part on the popularity of the Christmas Spectacular Starring the Radio City Rockettes ( the “Christmas Spectacular”) , the professional sports teams whose games are played at Madison Square Garden (“The Garden”) and other events which are presented in our venues, and our ability to attract such events;

• the on-ice and on-court performance of the professional sports teams whose games we host in our venues;

3 unchanged sentences

• competition, for example, from other venues and sports and entertainment options, including of new competing venues;

• our ability to effectively manage any impacts of a pandemic or other public health emergency (including COVID-19 variants) as well as renewed actions taken in response by governmental authorities or certain professional sports leagues, including ensuring compliance with rules and regulations imposed upon our venues, to the extent applicable;

• the effect of any postponements or cancellations by third-parties or the Company as a result of a pandemic or other public health emergency due to operational challenges and other health and safety concerns (such as the partial cancellation of the 2021 production of the Christmas Spectacular );

• the effect of any postponements or cancellations by third-parties or the Company of scheduled events, whether as a result of a pandemic or other public health emergency due to operational challenges and other health and safety concerns or otherwise;

• the extent to which attendance at our venues may be impacted by government actions, renewed health concerns by potential attendees and reduced tourism;

5 unchanged sentences

• business, reputational and litigation risk if there is a cyber or other security incident resulting in loss, disclosure or misappropriation of stored personal information, or disclosure of confidential information or other breaches of our information security;

• activities or other developments (such as pandemics, including the COVID-19 pandemic) that discourage or may discourage congregation at prominent places of public assembly, including our venues;

• activities or other developments (such as a pandemic or other public health emergency) that discourage or may discourage congregation at prominent places of public assembly, including our venues;

• the acquisition or disposition of assets or businesses and/or the impact of, and our ability to successfully pursue, acquisitions or other strategic transactions;

9 unchanged sentences

(together with its subsidiaries, as applicable, “MSG Sports”) of its obligations under various agreements with the Company and ongoing commercial arrangements, including the Arena License Agreements;

• the tax-free treatment of the MSGE Distribution (as defined below);

• our ability to achieve the intended benefits of the MSGE Distribution;

• the tax-free treatment of the Distribution (as defined below);

• our ability to achieve the intended benefits of the Distribution;

• failure of the Company or Sphere Entertainment Co.

(together with its subsidiaries, as applicable, “Sphere Entertainment”) to satisfy its obligations under transition services agreements, or other agreements entered into in connection with the MSGE Distribution;

• lack of operating history as a stand-alone public company and costs associated with being an independent public company;

• our status as an emerging growth company;

• the additional factors described under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended June 30, 2024 filed with the Securities and Exchange Commission (the “SEC”) on August 16, 2024 (the “2024 Form 10-K”).

5 unchanged sentences

All dollar amounts included in the following MD&A are presented in thousands, except as otherwise noted.

This MD&A is provided as a supplement to, and should be read in conjunction with, the Company’s unaudited financial statements and accompanying notes thereto included in this Quarterly Report on Form 10-Q, as well as the Company’s audited consolidated and combined financial statements and notes thereto as of June 30, 2023 and 2022 and for the three years ended June 30, 2023, 2022 and 2021 (“Audited Consolidated and Combined Annual Financial Statements”) included in the 2023 Form 10-K, to help provide an understanding of our financial condition, changes in financial condition and results of operations .

This MD&A is provided as a supplement to, and should be read in conjunction with, the Company’s unaudited financial statements and accompanying notes thereto included in this Quarterly Report on Form 10-Q, as well as the Company’s audited consolidated and combined financial statements and notes thereto as of June 30, 2024 and 2023 and for the three years ended June 30, 2024, 2023 and 2022 (the “Audited Consolidated and Combined Annual Financial Statements”) included in the 2024 Form 10-K, to help provide an understanding of our financial condition, changes in financial condition and results of operations .

The Company reports on a fiscal year basis ending on June 30th (“Fiscal Year”).

In this MD&A, the years ending and ended on June 30, 2025, 2024 and 2023, respectively, are referred to as “Fiscal Year 2025,” “Fiscal Year 2024” and “Fiscal Year 2023,” respectively.

Our MD&A is organized as follows:

Business Overview.

This section provides a general description of our business, as well as other matters that we believe are important in understanding our results of operations and financial condition and in anticipating future trends.

Results of Operations.

This section provides an analysis of our unaudited results of operations for the three months ended September 30, 2024 and 2023.

Liquidity and Capital Resources.

This section provides a discussion of our financial condition and liquidity, an analysis of our cash flows for the three months ended September 30, 2024 and 2023, as well as certain contractual obligations.

Seasonality of Our Business.

This section discusses the seasonal performance of our business.

Recently Issued Accounting Pronouncements and Critical Accounting Estimates.

This section discusses accounting pronouncements that have been adopted by the Company and recently issued accounting pronouncements not yet adopted by the Company.

This section should be read together with our critical accounting estimates, which are discussed in the 2024 Form 10-K under “Management's Discussion and Analysis of Financial Condition and Results of Operations — Recently Issued Accounting Pronouncements and Critical Accounting Estimates — Critical Accounting Estimates” and in the notes to the Audited Consolidated and Combined Annual Financial Statements of the Company included therein.

Business Overview

We are a live entertainment company comprised of iconic venues and marquee entertainment content.

9 unchanged sentences

MSG Entertainment Distribution

On April 20, 2023 (the “MSGE Distribution Date”), Sphere Entertainment distributed approximately 67% of the outstanding common stock of the Company to its stockholders (the “MSGE Distribution”), with Sphere Entertainment retaining approximately 33% of the outstanding common stock of MSG Entertainment in the form of Class A common stock, $0.01 par value per share (“Class A Common Stock”) immediately following the MSGE Distribution (the “Retained Interest”).

As a result, the Company became an independent publicly traded company on April 21, 2023 through the MSGE Distribution.

On April 20, 2023, Sphere Entertainment distributed approximately 67% of the outstanding common stock of the Company to its stockholders (the “Distribution”), with Sphere Entertainment retaining approximately 33% of the outstanding common stock of MSG Entertainment in the form of Class A common stock, $0.01 par value per share (“Class A Common Stock”), immediately following the Distribution (the “Retained Interest”).

As a result, the Company became an independent publicly traded company on April 21, 2023.

Following the completion of the secondary offering by Sphere Entertainment of the Company’s Class A Common Stock on September 22, 2023, Sphere Entertainment no longer owns any of the Company’s outstanding common stock.

Description of Business and Basis of Presentation to the Company’s Audited Consolidated and Combined Annual Financial Statements for more information regarding the MSGE Distribution.

Our MD&A is organized as follows:

Results of Operations.

This section provides an analysis of our unaudited results of operations for the three and nine months ended March 31, 2024 and 2023.

Liquidity and Capital Resources.

This section provides a discussion of our financial condition and liquidity, an analysis of our cash flows for the nine months ended March 31, 2024 and 2023, as well as certain contractual obligations.

Seasonality of Our Business.

This section discusses the seasonal performance of our business.

Recently Issued Accounting Pronouncements and Critical Accounting Estimates.

This section discusses accounting pronouncements that have been adopted by the Company and recently issued accounting pronouncements not yet adopted by the Company.

This section should be read together with our critical accounting estimates, which are discussed in the 2023 Form 10-K under “Management's Discussion and Analysis of Financial Condition and Results of Operations — Recently Issued Accounting Pronouncements and Critical Accounting Estimates — Critical Accounting Estimates” and in the notes to the Audited Consolidated and Combined Annual Financial Statements of the Company included therein.

Description of Business and Basis of Presentation to the Company’s Audited Consolidated and Combined Annual Financial Statements for more information regarding the Distribution.

Factors Affecting Results of Operations

The consolidated statement of operations for the three and nine months ended March 31, 2024 is presented on a consolidated basis, as the Company became a standalone public company on April 21, 2023.

The Company’s combined statement of operations for the three and nine months ended March 31, 2023 was prepared on a stand-alone basis derived from the consolidated financial statements and accounting records of Sphere Entertainment, and is presented as a carve-out financial statement, because the Company was not a standalone public company prior to the MSGE Distribution.

Description of Business and Basis of Presentation to the consolidated and combined financial statements included in “Part I — Item 1.

Financial Statements” of this Quarterly Report on Form 10-Q for additional information.

Our operating results are largely dependent on our ability to attract concerts and other events to our venues, revenues under various agreements entered into with MSG Sports, and the continuing popularity of the Christmas Spectacular .

Certain of these factors in turn depend on the popularity and/or performance of the professional sports teams whose games we host at The Garden.

In addition, Fiscal Year 2024 has been and will continue to be impacted by increased rent expense relative to Fiscal Year 2023 due to our new corporate office lease, which runs through 2046.

Our Company’s future performance is dependent in part on general economic conditions and the effect of these conditions on our customers.

2 unchanged sentences

An economic downturn could adversely affect our business and results of operations.

Factors Affecting Comparability

MSGE Distribution

The condensed combined statements of operations for the three and nine months ended March 31, 2023 includes allocations for certain support functions that were provided on a centralized basis and not historically recorded at the business unit level by Sphere Entertainment, such as expenses related to executive management, finance, legal, human resources, government affairs, information technology, and venue operations among others.

As part of the MSGE Distribution, certain corporate and operational support functions were transferred to the Company and therefore, charges were reflected in order to burden all business units comprising Sphere Entertainment’s historical operations.

These expenses were allocated on the basis of direct usage when identifiable, with the remainder allocated on a pro-rata basis of combined assets, headcount or other measures of the Company and Sphere Entertainment, which are recorded as a reduction of either direct operating expenses or selling, general, and administrative expenses.

Management believes the assumptions underlying the combined financial statements, including the assumptions regarding allocating general corporate expenses, are reasonable.

Nevertheless, the combined financial statements do not include all of the actual expenses that would have been incurred by the Company and may not reflect its combined results of operations, financial position and cash flows had it been a separate, standalone company during the periods presented.

Actual costs that would have been incurred if the Company had been a separate, standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure.

Description of Business and Basis of Presentation to the condensed consolidated and combined financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.

The costs to operate our business as an independent, publicly-traded company, including pursuant to terms of the transition services agreement, are expected to vary from those historical allocations.

Such costs principally relate to areas that include, but are not limited to:

• corporate personnel overhead expenses as a result of the Company operating on a stand-alone basis;

• professional fees associated with internal and external audits including compliance with Sarbanes-Oxley Act, tax, legal and other services;

• anticipated executive compensation costs related to existing and new executive management and excluding future share-based compensation expense;

• fees for preparing and distributing periodic filings with the Securities and Exchange Commission.

These costs will not be fully reflected in a complete year of the Company’s financial statements until the year ending June 30, 2024, because, for periods prior to April 20, 2023, the Company’s financial statements were presented on a carve-out basis.

Advertising Sales Representation Agreement Termination

Prior to December 31, 2022, the Company was a party to an advertising sales representation agreement (the “Networks Advertising Sales Representation Agreement”) with Sphere Entertainment’s subsidiary, MSGN Holdings, L.P.

(“MSG Networks”), pursuant to which the Company had the exclusive right and obligation to sell MSG Networks advertising availabilities for a commission.

The Networks Advertising Sales Representation Agreement was terminated effective as of December 31, 2022.

As a result, after December 31, 2022, the Company no longer recognizes advertising sales commission revenue or the employee costs related to the Networks Advertising Sales Representation Agreement.

For the three and nine months ended March 31, 2023, the Company recognized $0 and $8,802, respectively, of revenues under the Networks Advertising Sales Representation Agreement.

The termination of the Networks Advertising Sales Representation Agreement impacted the operating results of the Company for Fiscal Year 2023 and will impact the operating results of the Company on a go forward basis.

Results of Operations

Effective for the third quarter of Fiscal 2024, the Company modified its presentation of revenues and direct operating expenses.

Total revenue is now presented in three categories consisting of i) Revenues from entertainment offerings, ii) Food, beverage, and merchandise revenues, and iii) Arena license fees and other leasing revenues.

In addition, total direct operating expenses is now presented in two categories consisting of i) Entertainment offerings and leasing direct operating expenses and ii) food, beverage, and merchandise direct operating expenses.

Total revenue is presented in three categories consisting of (i) Revenues from entertainment offerings, (ii) Food, beverage, and merchandise revenues, and (iii) Arena license fees and other leasing revenues.

In addition, total direct operating expenses is presented in two categories consisting of (i) Entertainment offerings and leasing direct operating expenses and (ii) food, beverage, and merchandise direct operating expenses.

Prior period financial information has been revised to conform with the current period presentation.

Comparison of the three and nine months ended March 31, 2024 versus the three and nine months ended March 31, 2023.

Comparison of the three months ended September 30, 2024 versus the three months ended September 30, 2023.

Three Months Ended

March 31, Change

2024 2023 Amount Percentage

Revenues from entertainment offerings

$ 146,221 $ 129,260 $ 16,961 13 %

Food, beverage, and merchandise revenues 45,380 39,954 5,426 14 %

Arena license fees and other leasing revenue

36,712 32,015 4,697 15 %

Total revenues 228,313 201,229 27,084 13 %

Direct operating expenses

Entertainment offerings, arena license fees, and other leasing direct operating expenses

(112,997) (90,296) (22,701) (25) %

Food, beverage, and merchandise direct operating expenses

(29,024) (24,837) (4,187) (17) %

Total Direct operating expenses (142,021) (115,133) (26,888) (23) %

Selling, general, and administrative expenses

(53,945) (44,122) (9,823) (22) %

Depreciation and amortization (13,182) (14,798) 1,616 11 %

Loss, net on dispositions — (51) 51 NM

Restructuring charges (2,362) (2,461) 99 4 %

Operating income 16,803 24,664 (7,861) (32) %

Interest income 341 2,482 (2,141) (86) %

Interest expense (14,425) (13,423) (1,002) (7) %

Other income, net 78 8,070 (7,992) (99) %

Income from operations before income taxes 2,797 21,793 (18,996) (87) %

Income tax expense (2) (73) 71 97 %

Net income attributable to MSG Entertainment’s stockholders $ 2,795 $ 21,720 $ (18,925) (87) %

Nine Months Ended

March 31, Change

September 30, Change

2024 2023 Amount Percentage

5 unchanged sentences

Total revenues 138,714 142,212 (3,498) (2) %

773,191 703,561 69,630 10 %

Direct operating expenses

8 unchanged sentences

Depreciation and amortization (13,781) (13,585) (196) (1) %

Gains, net on dispositions — 4,361 (4,361) NM

Restructuring charges (14,803) (9,820) (4,983) (51) %

Operating income 120,801 126,798 (5,997) (5) %

Restructuring credits (charges) 40 (11,553) 11,593 100 %

Operating loss

(18,482) (33,425) 14,943 45 %

Interest income 372 851 (479) (56) %

Interest expense (14,043) (14,287) 244 2 %

Other (expense) income, net (1,545) 6,784 (8,329) NM

Income from operations before income taxes 77,770 101,331 (23,561) (23) %

Income tax expense (397) (804) 407 51 %

Net income 77,373 100,527 (23,154) (23) %

Net loss attributable to nonredeemable noncontrolling interest — (553) 553 NM

Net income attributable to MSG Entertainment’s stockholders $ 77,373 $ 101,080 $ (23,707) (23) %

_________________

NM — Absolute percentages greater than 200% and comparisons from positive to negative values or to zero values are considered not meaningful.

Revenues for the three and nine months ended March 31, 2024 increased $27,084 and $69,630, respectively, as compared to the prior year period.

The changes in revenues were attributable to the following:

Three Months Ended Change

2024 March 31,

Revenues from entertainment offerings

$ 146,221 $ 129,260 $ 16,961

Food, beverage, and merchandise revenues 45,380 39,954 5,426

Arena license fees and other leasing revenue

36,712 32,015 4,697

Other expense, net

(769) (4,469) 3,700 83 %

Nine Months Ended Change

2024 March 31,

Revenues from entertainment offerings

Loss from operations before income taxes

(32,922) (51,330) 18,408 36 %

Food, beverage, and merchandise revenues 127,379 112,412 14,967

Arena license fees and other leasing revenue

Income tax benefit 13,601 659 12,942 NM

Net loss attributable to MSG Entertainment’s stockholders

$ (19,321) $ (50,671) $ 31,350 62 %

________________________________________________________

NM — Absolute percentages greater than 200% and comparisons from positive to negative values or to zero values are considered not meaningful.

Revenues for the three months ended September 30, 2024 decreased $3,498 as compared to the prior year period.

Revenues from Entertainment Offerings

For the three months ended March 31, 2024 the increase in revenues from entertainment offerings was primarily due to (i) higher event-related revenues of $10,667 and (ii) an increase in revenues subject to the sharing economics with MSG Sports pursuant to the Arena License Agreements of $6,796.

For the three months ended March 31, 2024, the increase in event-related revenues reflects higher revenues from concerts of $16,855, primarily due to an increase in the number of concerts at the Company’s venues, partially offset by lower revenues from other live entertainment and sporting events (excluding the Knicks and Rangers) of $6,188, primarily due to the absence of a marquee sporting event that took place in the prior year period.

For the three months ended March 31, 2024, the increase in revenues subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements primarily reflects higher suite license fee revenue and, to a lesser extent, higher commissions on merchandise sales in the current year period.

For the nine months ended March 31, 2024, the increase in revenues from entertainment offerings was primarily due to (i) higher event-related revenues of $36,784, (ii) ticket related revenues from the presentation of the Christmas Spectacular production of $15,786, (iii) an increase in revenues subject to the sharing economics with MSG Sports pursuant to the Arena License Agreements of $9,520, partially offset by (iv) lower revenues of $8,802 due to the termination of the Networks Advertising Sales Representation Agreement.

For the nine months ended March 31, 2024, the increase in event-related revenues primarily reflects higher revenues from concerts of $30,191, due to an increase in the number of concerts at the Company’s venues, and to a lesser extent, higher average per-concert revenue in the current year period.

For the nine months ended March 31, 2024, the increase in revenues from the presentation of the Christmas Spectacular production, as compared to the prior year period, was primarily due to higher ticket-related revenues.

This reflected higher per-show revenue and, to a lesser extent, an increase in the number of performances as compared to the prior year periods.

The increase in per-show ticket-related revenues was due to higher average ticket yield and higher average per-show attendance as compared to the prior year periods.

For the nine months ended March 31, 2024, the increase in revenues subject to the sharing of economics with MSG Sports pursuant to the Arena License Agreements primarily reflects higher suite license fee revenue and, to a lesser extent, higher commissions on merchandise sales, both as compared to the prior year period.

For the three months ended September 30, 2024 the decrease in Revenues from entertainment offerings was primarily due to lower event-related revenues of $1,534.

The decrease in event-related revenues reflects (i) lower revenues from concerts of $990, which reflects lower per-concert revenues due to a shift in the mix of the events at The Garden from promoted events to rentals and a decrease in the number of events at the Company’s theaters, partially offset by an increase in the number of concerts at The Garden, and (ii) lower revenues from other live entertainment and sporting events (excluding the Knicks and Rangers) of $543.

Food, Beverage, and Merchandise Revenues

For the three months ended March 31, 2024, the increase in food, beverage and merchandise revenues was primarily due to higher food and beverage sales at Knicks and Rangers games, and to a lesser extent, higher food and beverage sales at concerts at the Company’s venues.

For the three months ended March 31, 2024, the increase in food and beverage sales at Knicks and Rangers games was primarily due to the impact of five more Knicks games played at The Garden, as compared to the prior year quarter, and to a lesser extent, higher average per-game revenues in the current year quarter.

For the three months ended March 31, 2024, the increase in food and beverage sales at concerts, was primarily due to the increase in the number of concerts held at the Company’s venues, as compared to the prior year period, partially offset by lower per-concert food and beverage revenues, which reflects a mix shift to more concerts at the Company’s theaters during the quarter.

For the nine months ended March 31, 2024, the increase in food, beverage and merchandise revenues was primarily due to higher food and beverage sales at concerts held at the Company’s venues, and to a lesser extent, higher food, beverage, and merchandise sales from the presentation of the Christmas Spectacular production.

For the nine months ended March 31, 2024 the increase in food and beverage sales at concerts was due to an increase in the number of concerts held at the Company’s venues and to a lesser extent, higher average per-concert revenues in the current year period.

For the three months ended September 30, 2024, the decrease in food, beverage and merchandise revenues was primarily due to lower food and beverage sales at concerts at the Company’s venues, as compared to the prior year period, which was primarily due to lower

per-concert food and beverage revenues and, to a lesser extent, the decrease in the number of events at the Company’s theaters, partially offset by the increase in the number of events at the Garden.

Arena License Fees and Other Leasing Revenue

For the three months ended March 31, 2024, the increase in revenues was primarily due to higher arena license fees from MSG Sports pursuant to the Arena License Agreements due to five more Knicks games played at The Garden in the current year period.

For the nine months ended March 31, 2024, the decrease in revenues was due to lower arena license fees from MSG Sports pursuant to

the Arena License Agreements due to four fewer Knicks and Rangers games played at The Garden in the current year period, partially offset by an increase in other leasing revenue.

In the three and nine months ended March 31, 2024, the Knicks and Rangers played a combined 45 and 79 pre/regular season games at The Garden, respectively, as compared to 40 and 83 combined pre/regular season games, respectively, in the prior year periods.

For the three months ended September 30, 2024, the increase in revenues was due to other leasing revenue.

Direct operating expenses

Direct operating expenses for the three and nine months ended March 31, 2024 increased $26,888 and $49,061 as compared to the prior year period.

The changes in direct operating expenses were attributable to the following:

Three Months Ended Change

2024 March 31,

Entertainment offerings, arena license fees, and other leasing direct operating expenses (a)

$ 112,997 $ 90,296 $ 22,701

Food, beverage, and merchandise direct operating expenses (a)

29,024 24,837 4,187

$ 142,021 $ 115,133 $ 26,888

Nine Months Ended Change

2024 March 31,

Entertainment offerings, arena license fees, and other leasing direct operating expenses (a)

$ 375,786 $ 332,290 $ 43,496

Food, beverage, and merchandise direct operating expenses (a)

70,673 65,108 5,565

$ 446,459 $ 397,398 $ 49,061

________________

(a) Venue operations and infrastructure costs are not specifically allocated to each revenue stream, but are instead attributed in their entirety to service revenue which is the Company’s principal revenue stream.

Leasing direct operating expenses materially consist of venue operations and infrastructure costs.

As a result, the Company combines service and leasing direct operating expenses as “Entertainment offerings, arena license fees, and other leasing direct operating expenses” for presentation purposes.

Direct operating expenses for the three months ended September 30, 2024 decreased $3,968 as compared to the prior year period.

Direct Operating Expenses Associated with Entertainment Offerings, Arena License Fees and Other Leasing

For the three and nine months ended March 31, 2024, the increase in direct operating expenses associated with entertainment offerings, arena license fees, and other leasing reflects (i) higher event-related expenses of $12,038, and $24,978, respectively, (ii) higher expenses associated with the sharing economics with MSG Sports pursuant to the Arena License Agreements of $6,041, and $8,974, respectively, and (iii) higher venue operating costs of $2,584, and $1,094, respectively.

For the nine months ended March 31, 2024, the increase in direct operating expenses also reflects higher expenses related to the presentation of the Christmas Spectacular production of $4,337.

For the three and nine months ended March 31, 2024, the increase in event-related expenses was primarily due to higher direct operating expenses from concerts of $11,665, and $18,905, respectively, which was primarily due to the increase in the number of concerts at the Company’s venues and, to a lesser extent, higher per-concert expenses.

For the three and nine months ended March 31, 2024, the increase in expenses associated with the sharing of economics with MSG Sports pursuant to the Arena License Agreements primarily reflects direct operating expenses incurred as a result of the increase in suite license fee revenues.

For the three months ended September 30, 2024, the decrease in direct operating expenses associated with entertainment offerings, arena license fees, and other leasing primarily reflects lower event-related expenses of $3,488.

The decrease in event-related expenses reflects (i) lower direct operating expenses from concerts of $3,103, primarily due to lower per-concert expenses due to a shift in the mix of events at The Garden from promoted events to rentals, partially offset by an increase in the number of events at The Garden, and (ii) lower direct operating expenses from other live entertainment and sporting events (excluding the Knicks and Rangers) of $385.

Direct Operating Expenses Associated with Food, Beverage, and Merchandise

For the three months ended March 31, 2024, the increase in food, beverage and merchandise direct operating expenses was primarily driven by the related increase in food and beverage sales at Knicks and Rangers games and, to a lesser extent, the increase in food and beverage sales at concerts held at the Company’s venues.

For the nine months ended March 31, 2024,the increase in food, beverage and merchandise direct operating expenses was primarily driven by the related increase in food and beverage sales at concerts held at the Company’s venues and, to a lesser extent, the increase in food, beverage, and merchandise sales related to the presentation of the Christmas Spectacular production.

For the three months ended September 30, 2024, the increase in food, beverage and merchandise direct operating expenses was primarily driven by an increase in food and beverage costs related to concerts held at the Company’s venues partially offset by a decrease in food and beverage costs related to other live entertainment and sporting events held at the Company’s venues.

Selling, general, and administrative expenses

For the three and nine months ended March 31, 2024, selling, general, and administrative expenses increased $9,823 and $23,619, respectively, as compared to the prior year periods.

Results for Fiscal Year 2024 reflect MSG Entertainment on a fully standalone basis.

Results for the first nine months of Fiscal Year 2023 reflect the allocation of corporate and administrative costs based on the accounting requirements for the preparation of carve-out financial statements.

These results do not include all of the expenses that would have been incurred by MSG Entertainment had it been a standalone public company for the prior year periods.

This was the primary driver of the overall increase in selling, general and administrative expenses, partially offset by the impact of the Company’s transition services agreement with Sphere Entertainment.

For the three months ended September 30, 2024, selling, general, and administrative expenses decreased $3,076, as compared to the prior year period.

The decrease was primarily due to (i) lower professional fees, mainly due to the absence of non-recurring costs incurred and paid by the Company in the prior year period for the sale of the Retained Interest by Sphere Entertainment;

(ii) a decrease in employee compensation and benefits;

and (iii) lower other costs, partially offset by higher rent expense.

Depreciation and amortization

For the three and nine months ended March 31, 2024, depreciation and amortization decreased $1,616 and $6,397, respectively, as compared to the prior year period primarily due to certain intangible assets being fully amortized in the current year as well as the disposal of a corporate aircraft during Fiscal Year 2023.

(Loss) gains, net on dispositions

(Loss) gains, net on dispositions for the three and nine months ended March 31, 2024 were $0 as compared to a net loss of $51 and a net gain of $4,361 in the three and nine months ended March 31, 2023.

The net gains in the prior year nine month period were due to the gain on sale of the Company’s controlling interest in Boston Calling Events, LLC, partially offset by the loss on the disposal of a corporate aircraft during Fiscal Year 2023.

Restructuring charges

For the three and nine months ended March 31, 2024, the Company recorded restructuring charges of $2,362 and $14,803, respectively, which r elated to termination benefits for certain corporate executives and employees.

For the three and nine months ended March 31, 2023, the Company recorded restructuring charges of $2,461 and $9,820, respectively which related to the termination benefits provided due to a workforce reduction of certain executives and employees as part of Sphere Entertainment’s cost reduction program implemented in Fiscal Year 2023.

Operating income

For the three and nine months ended March 31, 2024, operating income decreased by $7,861 and $5,997, respectively.

The decrease in operating income for the three months and nine months ended March 31, 2024 was primarily due to an increase in direct operating expenses and higher selling, general and administrative expenses, partially offset by an increase in revenues and decrease in depreciation and amortization, as compared to the prior year period.

For the three months ended September 30, 2024, depreciation and amortization increased $196, as compared to the prior year period primarily due to the increase in fixed assets in the first quarter of Fiscal Year 2025.

Restructuring credits (charges)

For the three months ended September 30, 2024, restructuring charges decreased $11,593, as compared to the prior year period, which reflects termination benefits provided in the prior year period due to a workforce reduction of certain executives and employees.

Operating loss

For the three months ended September 30, 2024, operating loss improved by $14,943.

The improvement in operating loss for the three months ended September 30, 2024 was primarily due to lower restructuring charges and, to a lesser extent, a decrease in direct operating expenses, and selling, general and administrative expenses, partially offset by a decrease in revenues, as compared to the prior year period.

Interest income

For the three and nine months ended March 31, 2024, interest income decreased $2,141 and $3,529, respectively, as compared to the prior year period primarily due to (i) the impact of the MSGE Distribution, which impacted the year-over-year comparability of results since the prior year period included carve-out allocation costs and (ii) lower average balances in the Company’s cash, cash equivalents and restricted cash, partially offset by higher interest rates.

For the three months ended September 30, 2024, interest income decreased $479, as compared to the prior year period primarily due to lower average balances and lower interest rates in the Company’s cash, cash equivalents and restricted cash.

Interest expense

For the three and nine months ended March 31, 2024, interest expense increased $1,002 and $5,706, respectively, as compared to the prior year period primarily due to higher interest rates on borrowings and higher revolver borrowings under the National Properties Facilities.

Other income (expense), net

For the three months ended March 31, 2024, other income, net was $78 as compared to $8,070 for the three months ended March 31, 2023, a decrease of $7,992.

The change was primarily due to (i) a decrease in unrealized gains of $1,689 associated with the investment in Townsquare Media, Inc., (ii) the absence of a $5,104 unrealized gain associated with the investment in DraftKings Inc.

recognized in the prior period, and (iii) higher net periodic benefit costs of $1,079 associated with the Company’s funded and unfunded and qualified and non-qualified defined benefit plans (the “Pension Plans”).

For the nine months ended March 31, 2024, other income (expense), net decreased $8,329 as compared to the prior year period.

The change was primarily due to (i) an increase in unrealized loss of $980 associated with the investment in Townsquare Media, Inc., (ii)

the absence of a gain of $4,916 associated with the investment in DraftKings Inc.

recognized in the prior period, and (iii) higher net periodic benefit costs of $3,140 associated with the Pension Plans.

Income tax expense

For the three months ended September 30, 2024, interest expense decreased $244, as compared to the prior year period primarily due to lower average borrowings and lower interest rates under the National Properties Facilities (as defined below under Liquidity and Capital Resources).

Other expense, net

For the three months ended September 30, 2024, other expense, net was $769 as compared to $4,469 for the three months ended September 30, 2023, a decrease of $3,700.

The change was primarily due to (i) a change in unrealized gains to an unrealized loss of $5,348, net, associated with the investment in Townsquare Media, Inc., offset by (ii) the absence of a $1,548 gain associated with the investment in DraftKings Inc.

recognized in the prior year period, and (iii) higher net periodic benefit costs of $207 associated with the Company’s funded and unfunded and qualified and non-qualified defined benefit plans.

Income tax benefit

In general, the Company is required to use an estimated annual effective tax rate to measure the tax benefit or tax expense recognized in an interim period.

Income tax expense for the three and nine months ended March 31, 2024 of $2 and $397, respectively, reflects effective tax rates of 0% and 1%, respectively.

Income tax expense for the three and nine months ended March 31, 2023 of $73 and $804, respectively, reflects effective tax rates of 0% and 1%, respectively.

The estimated annual effective tax rate is lower than the statutory federal tax rate of 21% primarily due to the offset of the valuation allowance.

The estimated annual effective tax rate is revised on a quarterly basis.

Adjusted operating income (“AOI”)

The Company has amended the definition of adjusted operating income so that the impact of the non-cash portion of operating lease costs related to the Company’s Arena License Agreements with MSG Sports is no longer excluded in all periods presented.

Income tax benefit for the three months ended September 30, 2024 of $13,601, reflects an effective tax rate of 41%.

The estimated annual effective tax rate exceeds the statutory federal tax rate of 21% primarily due to state taxes and excess tax deficiencies related to share-based compensation.

The Company expects to utilize its net operating losses during Fiscal Year 2025 and as such will become a federal taxpayer by the end of Fiscal Year 2025.

Income tax benefit for the three months ended September 30, 2023 of $659, reflects an effective tax rate of 1%.

The estimated annual effective tax rate is lower than the statutory federal tax rate of 21% primarily due to a decrease in the valuation allowance, partially offset by state taxes.

Adjusted operating income (loss) (“AOI”)

During the third quarter of Fiscal Year 2024, the Company amended the definition of adjusted operating income so that the non-cash portion of operating lease revenue related to the Company’s Arena License Agreements with MSG Sports is no longer excluded in all periods presented.

The Company evaluates its performance based on several factors, of which the key financial measure is adjusted operating income (loss), a non-GAAP financial measure.

6 unchanged sentences

(vi) the impact of purchase accounting adjustments related to business acquisitions,

(vii) gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan, and

(viii) amortization for capitalized cloud computing arrangement costs.

(vii) amortization for capitalized cloud computing arrangement costs and,

(viii) gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan.

The Company believes that the exclusion of share-based compensation expense or benefit allows investors to better track the performance of the Company’s business without regard to the settlement of an obligation that is not expected to be made in cash.

1 unchanged sentence

In addition, management believes that the exclusion of gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan, provides investors with a clearer picture of the Company’s operating performance given that, in accordance with GAAP, gains and losses related to the remeasurement of liabilities under the executive deferred compensation plan are recognized in Operating (income) loss whereas gains and losses related to the remeasurement of the assets under the executive deferred compensation plan, which are equal to and therefore fully offset the gains and losses related to the remeasurement of liabilities, are recognized in Other income (expense), net, which is not reflected in Operating income (loss).

The Company believes AOI is an appropriate measure for evaluating the operating performance of the Company on a consolidated and combined basis.

The Company believes AOI is an appropriate measure for evaluating the operating performance of the Company on a consolidated basis.

AOI and similar measures with similar titles are common performance measures used by investors and analysts to analyze the Company’s performance.

3 unchanged sentences

The Company has presented the components that reconcile operating income (loss), the most directly comparable GAAP financial measure, to AOI.

The following is a reconciliation of operating income to adjusted operating income for the three and nine months ended March 31, 2024 as compared to the prior year periods:

The following is a reconciliation of operating loss to adjusted operating income (loss) for the three months ended September 30, 2024 as compared to the prior year periods:

Three Months Ended

March 31, Change

September 30, Change

2024 2023 Amount Percentage

Operating income $ 16,803 $ 24,664 $ (7,861) (32) %

Depreciation and amortization 13,182 14,798 (1,616) (11) %

Share-based compensation (excluding share-based compensation in restructuring charges)

5,611 8,014 (2,403) (30) %

Loss, net on dispositions

Restructuring charges 2,362 2,461 (99) (4) %

Amortization for capitalized cloud computing arrangement costs 388 65 323 NM

Remeasurement of deferred compensation plan liabilities 191 126 65 52 %

Adjusted operating income (a)

Operating loss $ (18,482) $ (33,425) $ 14,943 45 %

Share-based compensation (excluding share-based compensation included in restructuring charges)

6,262 6,177 85 1 %

Nine Months Ended

March 31, Change

2024 2023 Amount Percentage

Operating income $ 120,801 $ 126,798 $ (5,997) (5) %

Depreciation and amortization 13,781 13,585 196 1 %

Share-based compensation (excluding share-based compensation in restructuring charges)

Restructuring (credits) charges

(40) 11,553 (11,593) (100) %

Gains, net on dispositions — (4,361) 4,361 NM

Restructuring charges 14,803 9,820 4,983 51 %

Merger, spin-off , and acquisition-related costs (b)

Merger, spin-off , and acquisition-related costs (a)

— 2,035 (2,035) NM

Amortization for capitalized cloud computing arrangement costs 168 — 168 NM

Remeasurement of deferred compensation plan liabilities 389 132 257 195 %

Adjusted operating income (a)

$ 198,397 $ 200,906 $ (2,509) (1) %

Remeasurement of deferred compensation plan liabilities 220 (145) 365 NM

Adjusted operating income (loss) (b)

$ 1,909 $ (220) $ 2,129 NM

________________________________________________________

(a) The Company has amended the definition of adjusted operating income so that the impact of the non-cash portion of operating lease revenue related to the Company’s Arena License Agreements with MSG Sports is no longer excluded in all periods presented.

(a) This adjustment represents non-recurring costs incurred and paid by the Company for the sale of the Retained Interest by Sphere Entertainment.

(b) During the third quarter of Fiscal Year 2024, the Company amended the definition of adjusted operating income (loss) so that the non-cash portion of operating lease revenue related to the Company’s Arena License Agreements with MSG Sports is no longer excluded in all periods presented.

Pursuant to GAAP, recognition of operating lease revenue is recorded on a straight-line basis over the term of the agreement based upon the value of total future payments under the arrangement.

As a result, operating lease revenue is comprised of a contractual cash component plus or minus a non-cash component for each period presented.

Adjusted operating income includes operating lease revenue of (i) $22,372 and $38,610 of revenue collected in cash for the three and nine months ended March 31, 2024, respectively, and $19,014 and $39,234 of revenue collected in cash for the three and nine months ended March 31, 2023, respectively, and (ii) a non-cash portion of $13,216 and $22,831 for the three and nine months ended March 31, 2024, respectively, and $12,149 and $25,078 for the three and nine months ended March 31, 2023, respectively.

(b) This adjustment represents non-recurring costs incurred and paid by the Company for the sale of the Retained Interest by Sphere Entertainment.

Adjusted operating income (loss) includes operating lease revenue of (i) $854 and $829 of revenue collected in cash for the three months ended September 30, 2024 and 2023, respectively, and (ii) a non-cash portion of $470 and $495 for the three months ended September 30, 2024 and 2023, respectively.

NM — Absolute percentages greater than 200% and comparisons from positive to negative values or to zero values are considered not meaningful .

Net loss attributable to nonredeemable noncontrolling interests

For the three and nine months ended March 31, 2024, the Company recorded $0 of net loss attributable to nonredeemable noncontrolling interests as compared to $0 and $553 of net loss attributable to nonredeemable noncontrolling interests for the three and nine months ended March 31, 2023.

These amounts represent the share of net loss of BCE that were not attributable to the Company.

The Company disposed of its controlling interest in BCE on December 2, 2022.

Liquidity and Capital Resources

2 unchanged sentences

Our principal uses of cash include working capital-related items (including funding our operations), capital spending, debt service, investments and related loans and advances that we may fund from time to time.

We may also use cash to continue to repurchase shares of our Class Common A Stock pursuant to the share repurchase program authorized by our Board of Directors on March 29, 2023, of which there was approximately $110,000 remaining as of March 31, 2024.

Our decisions as to the use of our available liquidity will be based upon the ongoing review of the funding needs of the business, the optimal allocation of cash resources, and the timing of cash flow generation.

2 unchanged sentences

We regularly monitor and assess our ability to meet our net funding and investing requirements.

As of March 31, 2024, the Company’s unrestricted cash and cash equivalents balance was $28,008.

The principal balance of the Company’s total debt outstanding as of March 31, 2024 was $629,687 and the Company had $132,274 of available borrowing capacity under the National Properties Revolving Credit Facility.

As of September 30, 2024, the Company’s unrestricted cash and cash equivalents balance was $37,307.

The principal balance of the Company’s total debt outstanding as of September 30, 2024 was $676,563 and the Company had $76,174 of available borrowing capacity under the National Properties Revolving Credit Facility.

We believe we have sufficient liquidity from cash and cash equivalents, available borrowing capacity under our credit facilities and cash flows from operations to fund our operations and satisfy any obligations for the foreseeable future.

1 unchanged sentence

Credit Facilities, to the financial statements included in “— Item 1.

Financial Statements” of this Quarterly Report on Form 10-Q for discussions of the Company’s debt obligations and various financing agreements.

Financial Statements” of this Quarterly Report on Form 10-Q for discussions of the Company’s debt obligations and financing agreements.

National Properties Facilities

MSG National Properties, LLC (“MSG National Properties”), MSG Entertainment Holdings, LLC (“MSG Entertainment Holdings”) and certain subsidiaries of MSG National Properties are party to a credit agreement dated June 30, 2022 with JP Morgan Chase Bank, N.A., as administrative agent and the lenders and L/C issuers party thereto (as amended, the “National Properties Credit Agreement”), providing for a five-year, $650,000 senior secured term loan facility (the “National Properties Term Loan Facility”) and a five-year, $100,000 revolving credit facility (the “National Properties Revolving Credit Facility” and, together with the National Properties Term Loan Facility, the “National Properties Facilities”).

On September 15, 2023, the National Properties Credit Agreement was amended to, among other things, increase the National Properties Revolving Credit Facility by $50,000 to $150,000.

MSG National Properties, LLC (“MSG National Properties”), MSG Entertainment Holdings, LLC (“MSG Entertainment Holdings”) and certain subsidiaries of MSG National Properties are party to a credit agreement dated June 30, 2022 (as amended, the “National Properties Credit Agreement”) with JP Morgan Chase Bank, N.A., as administrative agent and the lenders and L/C issuers party thereto, providing for a five-year, $650,000 senior secured term loan facility (the “National Properties Term Loan Facility”) and a five-year, $150,000 revolving credit facility (the “National Properties Revolving Credit Facility” and, together with the National Properties Term Loan Facility, the “National Properties Facilities”).

Up to $25,000 of the National Properties Revolving Credit Facility is available for the issuance of letters of credit.

As of March 31, 2024 outstanding letters of credit were $17,726 and the remaining balance available under the National Properties Revolving Credit Facility was $132,274 .

As of September 30, 2024, outstanding letters of credit were $18,826 and the remaining balance available under the National Properties Revolving Credit Facility was $76,174 .

Interest Rates.

Borrowings under the current National Properties Facilities bear interest at a floating rate, which at the option of MSG National Properties may be either (a) a base rate plus an applicable margin ranging from 1.50% to 2.50% per annum, determined based on the total leverage ratio of MSG National Properties and its restricted subsidiaries (the “National Properties Base Rate”), or (b) adjusted Term SOFR (i.e., Term SOFR plus 0.10%) plus an applicable margin ranging from 2.50% to 3.50% per annum, determined based on the total leverage ratio of MSG National Properties and its restricted subsidiaries (the “National Properties SOFR Rate”).

Borrowings under the current National Properties Facilities bear interest at a floating rate, which at the option of MSG National Properties may be either (a) a base rate plus an applicable margin ranging from 1.50% to 2.50% per annum, determined based on the total leverage ratio of MSG National Properties and its restricted subsidiaries, or (b) adjusted Term SOFR (i.e., Term SOFR plus 0.10%) plus an applicable margin ranging from 2.50% to 3.50% per annum, determined based on the total leverage ratio of MSG National Properties and its restricted subsidiaries.

The National Properties Credit Agreement requires MSG National Properties to pay a commitment fee ranging from 0.30% to 0.50% in respect of the daily unused commitments under the National Properties Revolving Credit Facility.

MSG National Properties is also required to pay customary letter of credit fees, as well as fronting fees, to banks that issue letters of credit pursuant to the National Properties Credit Agreement.

The interest rate on the National Properties Facilities as of March 31, 2024 was 7.93%.

The interest rate on the National Properties Facilities as of September 30, 2024 was 7.45%.

Principal Repayments.

2 unchanged sentences

The principal obligations under the National Properties Term Loan Facility are to be repaid in quarterly installments beginning with the fiscal quarter ended March 31, 2023, in an aggregate amount equal to 2.50% per annum (0.625% per quarter), stepping up to 5.0% per annum (1.25% per quarter) in the fiscal quarter ending September 30, 2025, with the balance due at the maturity of the facility.

The principal obligations under the National Properties Revolving Credit Facility are due at the maturity of the facil ity.

Under certain circumstances, MSG National Properties is required to make mandatory prepayments on loans outstanding, including prepayments in an amount equal to the net cash proceeds of certain sales of assets or casualty insurance and/or condemnation recoveries (subject to certain reinvestment, repair or replacement rights), subject to certain exceptions.

1 unchanged sentence

The minimum liquidity level is set at $50,000, and is tested based on the level of average daily liquidity, consisting of cash and cash equivalents and available revolving commitments, over the last month of each quarter over the life of the National Properties Facilities.

The debt service coverage ratio covenant began testing in the fiscal quarter ended December 31, 2022, and is set at a ratio of 2:1 before stepping up to 2.5:1 in the fiscal quarter ending September 30, 2024.

The debt service coverage ratio covenant began testing in the fiscal quarter ended December 31, 2022, and was set at a ratio of 2:1 before stepping up to 2.5:1 in the fiscal quarter ended September 30, 2024.

The leverage ratio covenant began testing in the fiscal quarter ended June 30, 2023.

It is tested based on the ratio of MSG National Properties and its restricted subsidiaries’ consolidated total indebtedness to adjusted operating income, with an initial maximum ratio of 6:1, stepping down to 5.5:1 in the fiscal quarter ending June 30, 2024 and 4.5:1 in the fiscal quarter ending June 30, 2026.

As of March 31, 2024, MSG National Properties and its restricted subsidiaries were in compliance with the covenants of the National Properties Credit Agreement.

It is tested based on the ratio of MSG National Properties and its restricted subsidiaries’ consolidated total indebtedness to adjusted operating income, with an initial maximum ratio of 6:1, which stepped down to 5.5:1 in the fiscal quarter ended June 30, 2024 and steps down to 4.5:1 in the fiscal quarter ending June 30, 2026.

As of September 30, 2024, MSG National Properties and its restricted subsidiaries were in compliance with the covenants of the National Properties Credit Agreement.

In addition to the financial covenants discussed above, the National Properties Credit Agreement and the related security agreement contain certain customary representations and warranties, affirmative and negative covenants and events of default.

12 unchanged sentences

All obligations under the National Properties Facilities are guaranteed by MSG Entertainment Holdings and MSG National Properties’ existing and future direct and indirect domestic subsidiaries, other than the subsidiaries that own The Garden and certain other excluded subsidiaries (the “Subsidiary Guarantors”).

All obligations under the National Properties Facilities, including the guarantees of those obligations, are secured by certain of the assets of MSG National Properties and the Subsidiary Guarantors (collectively, “Collateral”) including, but not limited to, a pledge of some or all of the equity interests held directly or indirectly by MSG National Properties in each Subsidiary Guarantor.

indirectly by MSG National Properties in each Subsidiary Guarantor.

The Collateral does not include, among other things, any interests in The Garden or the leasehold interests in Radio City Music Hall and the Beacon Theatre.

Contractual Obligations

During the nine months ended March 31, 2024, the Company did not have any material changes in its non-cancelable contractual obligations other than the recognition of an additional lease obligation and right-of-use lease asset and activities in the ordinary course of business.

During the three months ended September 30, 2024, the Company did not have any material changes in its non-cancelable contractual obligations other than the recognition of an additional lease obligation and right-of-use lease asset and activities in the ordinary course of business.

Property and Equipment, Net and Note 8.

2 unchanged sentences

Cash Flow Discussion

As of March 31, 2024, cash, cash equivalents and restricted cash totaled $28,308, as compared to $84,355 as of June 30, 2023.

The following table summarizes the Company’s cash flow activities for the nine months ended March 31, 2024 and 2023:

Nine Months Ended

Net cash provided by operating activities

$ 111,054 $ 132,341

Net cash (used in) provided by investing activities

As of September 30, 2024, cash, cash equivalents and restricted cash totaled $37,613, as compared to $33,555 as of June 30, 2024.

The following table summarizes the Company’s cash flow activities for the three months ended September 30, 2024 and 2023:

Three Months Ended

September 30,

Net cash (used in) provided by operating activities

$ (27,359) $ 1,378

Net cash used in financing activities

Net cash used in investing activities

(6,690) (55,490)

Net (decrease) increase in cash, cash equivalents and restricted cash

Net cash provided by financing activities

Net increase (decrease) in cash, cash equivalents and restricted cash

$ 4,058 $ (44,839)

Operating Activities

Net cash provided by operating activities for the nine months ended March 31, 2024 decreased by $21,287 to $111,054 as compared to the prior year period, primarily due to lower net income in the current year period and changes in working capital which included (i) decrease in deferred revenue, (ii) increase in accounts receivable, net, and (iii) an increase in prepaid expenses and other current and non-current assets, partially offset by an increase in related party receivables and payables, net.

Net cash flows from operating activities for the three months ended September 30, 2024 decreased by $28,737 as compared to the prior year period, primarily due to (i) an increase in Net income adjusted for non-cash items of $7,695, and (ii) a decrease in cash flows from changes in working capital of $36,432.

The decrease in cash flows from changes in working capital were driven by negative net cash outflows from related party receivables and payables as compared to net cash inflows in the prior year period;

a larger decrease in accounts payable, accrued and other current and non-current liabilities;

and a smaller increase in deferred revenue, in each case as compared to the three months ended September 30, 2023.

Investing Activities

Net cash used in investing activities for the nine months ended March 31, 2024 increased by $85,886 to $72,625 as compared to the prior year period primarily due (i) to a loan to a related party under the DDTL facility, and (ii) the absence of proceeds received from the dispositions of BCE and the corporate aircraft recognized in the prior year period, partially offset by additional proceeds received from the sale of investments in the current year period as compared to the prior year period.

Net cash used in investing activities for the three months ended September 30, 2024 decreased by $48,800 to $6,690 as compared to the prior year period primarily due to (i) the absence of a loan to a related party under the DDTL Facility, partially offset by fewer proceeds received from the sale of investments in the current year period as compared to the prior year period.

Financing Activities

Net cash used in financing activities for the nine months ended March 31, 2024 increased by $9,282 to $94,476 as compared to the prior year period primarily due to (i) an increase in principal repayments on term loan and revolving credit facilities, (ii) increase in stock repurchases, and (iii) increase in taxes paid in lieu of shares for equity based compensation in the current period, partially offset by a decrease in net transfers to Sphere Entertainment and Sphere Entertainment’s subsidiaries under carve-out accounting principles in the current period and proceeds received from the National Properties Revolving Credit Facility.

Net cash provided by financing activities for the three months ended September 30, 2024 increased by $28,834 to $38,107 as compared to the prior year period primarily due to (i) the absence of stock repurchases in the current year period, partially offset by a decrease in proceeds received from the National Properties Revolving Credit Facility.

Seasonality of Our Business

2 unchanged sentences

Recently Issued and Adopted Accounting Pronouncements

Accounting Policies, to the financial statements included in “— Item 1.

Summary of Significant Accounting Policies, to the financial statements included in “— Item 1.

Financial Statements” of this Quarterly Report on Form 10-Q for discussion of recently issued accounting pronouncements.

Critical Accounting Estimates

There have been no material changes to the Company’s critical accounting estimates from those set forth in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

There have been no material changes to the Company’s critical accounting estimates from those set forth in 2024 Form 10-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis