Sports Spin Unlocks Value, Much Already Captured

August 1, 2018 04:52 AM GMT The Madison Square Garden Company Sports Spin Unlocks Value, Much Already Captured Stock Rating Equal-weight Industry View In-Line Price Target $315.00 The capital-intensive Sphere project may deliver a transformative experience to consumers, but it also increases uncertainty for MSG shareholders. The contemplated spin helps alleviate that uncertainty, while at the same time moving to capture more of the value of its iconic sports assets. WHAT'S CHANGED The Madison Square Garden From To Company (MSG.N) Price Target $260.00 $315.00 Spinning two birds with one stone: Our downgrade of MSG shares last year was a result of a significant narrowing of the discount to its sum-of-the-parts (SotP), combined with the shift the company was making in investment priorities towards big bets on venue expansion (see "MSG's Sphere a Long-Duration Bet on Technology & Live Entertainment"). The contemplated spin by MSG's board, not yet finalized but in our view plausible, could accomplish two related goals. First, creating a pure play publicly traded holding company of two marquee sports franchises in the Knicks and Rangers. This has already narrowed the gap between the public equity and the underlying private market value, and likely will continue to. Second, by parking ⅓ of the SportsCo in EntCo, it could move to monetize that stake and establish a valuation mark on those assets while at the same time raising needed capital to help fund and de-risk its Sphere bets. Three key assumptions drive our updated valuation: First, an appropriate discount to fair value for the sports teams to trade at inside SportsCo. Second, the right multiple on the EntCo EBITDA. Finally, tax treatment on the ⅓ stake of SportsCo held by EntCo. There are no perfect comps to either standalone company, but we see Liberty Braves (BATRK) as a reasonable starting point for the SportsCo. We estimate BATRK trades at a roughly 20% discount to its SotP, and its asset value is 65% the Atlanta Braves franchise and the remainder the Stadium and Battery, a surrounding mixed use real estate holding. On EntCo's multiple and post-spin EBITDA, there is clearly a wide range of reasonable assumptions. Live Nation may be the best publicly traded comp, although given the earnings power of Live Nation stems primarily from ticketing, it is imperfect. Finally, we have assumed the ⅓ stake in SportsCo is valued pre-tax inside EntCo. While a cash sale would trigger a taxable gain, we assume MSG will work to minimize or eliminate those taxes by utilizing its existing NOL and benefiting from the annual taxable depreciation of its Sphere project. MORGAN STANLEY & CO. LLC Benjamin Swinburne, CFA EQUITY ANALYST Benjamin.Swinburne@morganstanley.com Cameron Mansson-Perrone RESEARCH ASSOCIATE Cameron.Mansson-Perrone@morganstanley.com Madison Square Garden Co ( MSG.N, MSG US ) Media / United States of America +1 212 761-7527 +1 212 761-7079 Stock Rating Equal-weight Industry View In-Line Price target $315.00 Shr price, close (Jul 31, 2018) $312.18 Mkt cap, curr (mm) $7,449 52-Week Range $330.00-205.73 Fiscal Year Ending 06/17 06/18e 06/19e 06/20e ModelWare EPS ($) (1.39) 6.97 2.01 1.66 Prior ModelWare EPS - 6.58 1.94 1.69 ($) P/E NM 44.5 155.7 188.3 Consensus EPS ($) (0.77) 5.85 1.13 1.97 Div yld (%) 0.0 0.0 0.0 0.0 Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare framework = Consensus data is provided by Thomson Reuters Estimates e = Morgan Stanley Research estimates QUARTERLY MODELWARE EPS ($) 2018e 2018e 2019e 2019e Quarter 2017 Prior Current Prior Current Q1 (0.14) - 0.72a - - Q2 3.40-9.19a - - Q3 0.98-1.56a - - Q4 (1.52) (0.24) (0.10) - - e = Morgan Stanley Research estimates, a = Actual Company reported data Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision. For analyst certification and other important disclosures, refer to the Disclosure Section, located at the end of this report. 1

Taking up our SoTP and estimates, raising PT to $315 but staying EW after 15% run over last month: Our revised base, bull, and bear cases are $315, $380, and $230. Our base case assumes the teams trade at a 15% discount to most recent Forbes value (tighter than BATRK due to potential sale of stake), and that the EntCo trades at 14x EV / base case EBITDA (broadly in-line with LYV) with roughly $300-350 mm for excess value not captured in its earnings base. Our bull case assumes zero discount to Forbes, triggered by a hypothetical sale of ⅓ of the teams to a strategic investor, and 18x EV / bull case EBITDA for EntCo. Our bear case assumes the discount widens to 40%, as no sale is consummated for the ⅓ stake and the EntCo trades at 10x EV/bear case EBITDA. MSG shares are up ~15% since the close prior to announcing its spin consideration on June 27. With a fairly balanced risk/reward, we see other options in Media we prefer and will reassess MSG as we learn more about the spin specifics. Process from here: The MSG board must confirm it is moving ahead with the plan to spin off SportsCo, file a Form 10, and then hold a shareholder vote. Using past MSG spin-offs as proxies, the entire process is likely to take 10-11 months from first announcement - or until April/May of 2019. 2

Risk Reward MSG Current Trading Level vs. Base, Bull, and Bear Cases $ 400 Investment Thesis $380.00 (+22%) 350 We estimate that MSG's sports teams and $312.03 $315.00 (+1%) venue assets currently collectively trade at a 300 near 20% discount to private market value, 250 tight historically given expectations for the $230.00 (-26%) 200 spin-off of the Sports business. While we believe upcoming venue investments around 150 Sphere and new launches at TAO create room 100 for value creation from here, they also bring 50 uncertainty and drive a balanced risk/reward, in our view. 0 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Source: Company data, Morgan Stanley Research Price Target (Jul-19) Historical Stock Performance Current Stock Price WARNINGDONOTEDIT_RRS4RL~MSG.N~ Price Target $315 Our FYE19 price target is based on our base case valuation. It is over twice our DCF-driven FMV, reflecting the higher private market value of MSG's sports teams / venue assets. Bull $380 No discount to teams private mkt value, EntCo at 18x EV / fwd EBITDA Successful sale of all or part of proposed Sports Co. closes discount to private market value: MSG announces a sale of 'trophy' assets (Knicks, Rangers, Garden), or other action that market sees paving way to a sale. This fully closes teams discount to estimated private market value. Healthy growth at EntCo drives improved outlook and positivity around Sphere investments and results in 18x fwd. EBITDA multiple in our bull case. Base $315 Teams at ~15% discount to private mkt value, EntCo at 14x EV / fwd EBITDA Sports/Ent. trades at ~15% discount to private market value: Lacking further catalysts to fully close the gap, the spin-off nevertheless tightens the teams' discount to private value to ~15% on higher perceived likelihood of asset monetization and increased simplicity of asset portfolio. The Entertainment company grows adj. EBITDA at an avg. CAGR of ~20% over the next five years, and trades at 14x EV / fwd. EBITDA. Bear $230 Teams at ~40% disc. to private mkt value, Ent at 10x EV / fwd EBITDA No spin-off, discount to private market value widens to ~40%: The proposed spin-off does not occur and teams trade at a ~40% discount to private value, reflecting reduced optimism for a monetization event in the near-term. Market concern surrounding the company's investment plans at the Entertainment company drive it to trade at 10x EV / fwd. EBITDA. Key Value Drivers Our PT assumes the current NAV discount tightens over the next year. The proposed asset spin would likely be perceived as precursors to tax-efficient asset monetization, which could narrow the discount. NBA / NHL team value estimates will likely be driven by future team sales. While visibility is low, we see potential for healthy growth here, particularly with regard to sponsorship. MSG had a ~$1.1 bn net cash balance at CYE17. A large share of this is slated to be used towards the company's Sphere projects. Success / failure with these projects could create / destroy value. Potential Catalysts Successful execution of MSG Sphere investments. Strong team performance or comparable team sales could lift perceived team values. Corporate actions (spins, sales, etc.) could close the estimated discount to private market value. Risks to Achieving Price Target MSG invests in unsuccessful venues; poor team performance or comparable team sales at lower than expected values; consumer downturn could hurt live entertainment industry, depressing venue values; higher Knicks payroll could drive higher luxury tax penalties, diminishing Sports profitability. 3

Sum-of-the-Parts Analysis We are raising our price target from $260 to $315. Driving this increase is a reduction of our assumed discount on the two marquee sports franchises, the Knicks and the Rangers, from 30% to 15% following the announced spin consideration. Summary of Assumptions: (1) Teams: Our estimates for the value of the teams are based on the most recent Forbes estimates. We then assume that the teams trade at a discount of ~15%, modestly tighter than our expectations for Liberty Braves (BATRK), which also owns underlying sports assets. The tighter discount is due to (a) higher expectations for a near-term monetization event and (b) pure-play team assets vs. real estate holdings at Braves. (2) Entertainment multiple: Our base case reflects an estimate of the Entertainment business' EV assuming an EV/fwd. EBITDA mulitple of 14x, broadly consistent with Live Nation (LYV, not covered). Other potential trading comps include Liberty Formula One (FWONK) and Lionsgate (LGFb), which trade at 27x times and 16.5x times EV/fwd. EBITDA, respectively. (3) Sports lease payment: Our EBITDA estimates for the proposed Entertainment business reflect revenue from the fair market lease the Sports company would need to pay the Garden on behalf of the Knicks and Rangers, which we estimate would have been $7 mm in FY18. (4) Excess value of Garden: We include ~20% of the estimated value for the Garden, or $300-350 mm, of excess value related to the company's air rights. (5) MSG Sphere: For the time being, we conservatively value MSG Sphere at cost, reflecting estimated related capital expenditures through FYE19. (6) Cash: We estimate that subsequent to the proposed spin-off the Sports company would be allocated $200 mm of cash, with the remaining balance allocated to the Entertainment business. The company's press release stated that the Entertainment company would hold $1 billion in cash. Our estimate reflects our expectation for the $1.1 bn on the company's balance sheet at FYE18 to be reduced by both ~$480 mm of capex in FY19 as Sphere spending begins in earnest, and $200 mm of share repurchases. To the extent MSG raises additional debt to fund higher cash balance at spin for SportsCo, it is value neutral to MSG shares today. (7) Debt: We estimate no debt at the Sports company at FYE19 and no change to the current ~$100 mm of TAO-related debt at the Entertainment entity. 4

Exhibit 1: MSG Sum-of-the-Parts Analysis FYE19 MSG Sports Assets MSe Private MV ($M) Methodology New MSe Public MV ($M) Source NY Knicks (NBA) $3,600.0-15% Discount $3,060.0 Forbes NY Rangers (NHL) 1,500.0-15% 1,275.0 Forbes NY Liberty (WNBA) / Connecticut Whale (AHL) 10.0-15% 8.5 Forbes Enterprise Value $5,110.0-15% $4,343.5 Plus: Cash & Equivalents $200.0 MSe allocated $200.0 MSe Less: Debt 0.0 0.0 Less: Minority stake held at Ent. Co. (1,770.0) 14.0x EV/EBITDA (1,514.5) MSe Equity Value $3,540.0 $3,029.0 Dilutive Shares Outstanding 23.1 23.1 SportsCo per Share $153 $131 MSG Entertainment Assets MSe Private MV ($M) Methodology New MSe Public MV ($M) MSG Arena & Complex (O&O) $1,597.2 20% of Total $319.4 MSe Radio City/Beacon Theater (LT lease) + Rockettes franchise 100.0 NA 0.0 Reflected in Chicago Theater (O&O) 26.9 NA 0.0 Consolidated L.A. Forum 200.0 NA 0.0 MSG Sphere 485.0 Cost 485.0 MSe Total Venues $2,409.2 $804.5 Consolidated Operations NA 14.0x EV/EBITDA $1,221.7 MSe Plus: 33% Stake in MSG Sports $1,770.0 Pre-Tax Value $1,514.5 MSe Plus: Stakes in TAO & Boston Calling 339.9 Cost 339.9 Company data Enterprise Value $4,519.1 $3,880.5 Implied FYE19E fwd. EBITDA multiple 28.0x 24.1x Plus: Cash & unconsolidated assets $680.1 $680.1 Less: Debt ($105.4) ($105.4) Less: Boston Calling (49% minority interest) (131.2) (131.2) Less: TAO Group (37.5% minority interest) (15.2) (15.2) Less: Other Lilabilities (64.9) (64.9) Equity Value $4,882.5 $4,244.0 EntCo Per Share $212 $184 MSG per Share Value $365 $315 MSG Current Market Equity Value MSe Private MV ($M) New MSe Public MV ($M) Equity Value $7,201.0 $7,201.0 Per share $312.03 $312.03 Plus: Debt 105.4 105.4 Less: Cash (665.4) (665.4) Plus: Boston Calling Minority (49%) 15.2 15.2 Plus: TAO Group Minority (37.5%) 131.2 131.2 Less: Other Assets (214.7) (214.7) MSG Current Market-Implied EV, FYE19 $6,572.7 $6,572.7 Implied FYE19E fwd. EBITDA multiple 40.8x 40.8x Implied Sports/Ent. EV Discount to Pvt Mkt Value -17% -3% Source: Company data, Forbes, NYC Department of Finance Assessment, Morgan Stanley Research Our EBITDA estimate for the pro forma Entertainment company assumes that total MSG corporate overhead is split equally between the Sports and Entertainment businesses. Additionally, it reflects the inclusion of lease revenue outlined above, and includes 10% of Sports segment EBITDA to account for a portion of economics that will change to the Entertainment business, per the company's press release. Exhibit 2: Estimated pro forma EBITDA for standalone Entertainment company FY18 FY19 FY20 FY21 FY22 Ent. Co. Segment EBITDA $99.3 $113.7 $115.7 $143.3 $175.1 Consolidated corporate overhead ($91.8) ($98.1) ($101.0) ($104.1) ($107.2) Percentage allocable to Ent. Co. 50% 50% 50% 50% 50% Less: Ent. Co allocable overhead ($45.9) ($49.0) ($50.5) ($52.0) ($53.6) Plus: Lease revenue from Sports Co. $7.0 $7.2 $7.4 $7.6 $7.9 Plus: SportsCo adj. EBITDA now at EntCo 12.8 15.1 14.7 15.1 16.7 Pro forma Ent. Co. EBITDA $73.2 $87.0 $87.3 $114.0 $146.0 PF Growth % 19% 0% 31% 28% Source: Company data, Morgan Stanley Research 5

Prior vs. Current Exhibit 3: MSG Prior vs. Current Madison Square Garden In millions except per share FY4Q18 FY2018E FY2019E FY2020E Prior Current Change Prior Current Change Prior Current Change Prior Current Change MSG Entertainment Revenue $151 $155 +4 $735 $750 +15 $767 $782 +15 $789 $800 +11 % Growth 96% 100% +474bp 45% 48% +300bp 4% 4% (15)bp 3% 2% (56)bp Adj. EBITDA 1 3 +2 112 112 +1 127 127 +0 132 130 (2) Margin 0.6% 2.1% +151bp 15.2% 15.0% (21)bp 16.6% 16.3% (27)bp 16.7% 16.2% (51)bp MSG Sports Revenue $139 $138 (1) $787 $784 (3) $834 $832 (3) $866 $864 (3) % Growth -55% -55% (38)bp -3% -3% (32)bp 6% 6% +1bp 4% 4% +0bp Adj. EBITDA 3 4 +1 133 144 +11 167 168 +0 163 164 +0 Margin 2.3% 3.1% +86bp 16.9% 18.3% +148bp 20.1% 20.1% +8bp 18.9% 18.9% +7bp Corporate, Eliminations and Other Revenue $0 $0 +0 ($0) ($0) (0) $0 $0 +0 $0 $0 +0 Adj. EBITDA ($20) ($19) +1 ($74) ($71) +2 ($78) ($76) +2 ($80) ($78) +2 MSG Consolidated Revenue $291 $293 +3 $1,522 $1,534 +13 $1,601 $1,614 +12 $1,656 $1,664 +8 % Growth -5% -4% +82bp 15% 16% +95bp 5% 5% (7)bp 3% 3% (28)bp Adj. EBITDA (16) (11) +5 171 185 +14 216 219 +3 215 216 +0 Margin -5.5% -3.9% +159bp 11.2% 12.0% +82bp 13.5% 13.6% +8bp 13.0% 13.0% (5)bp % Growth 60% 14% (4,555)bp 30% 41% +1,071bp 27% 19% (809)bp -1% -2% (116)bp Stock-based comp 12 12 +0 51 49 (2) 54 52 (2) 56 54 (2) EBITDA (28) (24) +5 120 136 +16 162 167 +5 159 161 +2 Margin -10% -8% +163bp 8% 9% +98bp 10% 10% +23bp 10% 10% +10bp % Growth 36% 15% (2,197)bp 33% 51% +1,777bp 35% 23% (1,238)bp -2% -3% (144)bp D&A 31 31 (1) 123 122 (1) 126 127 +2 127 129 +2 EBIT (59) (54) +5 (4) 13 +17 36 40 +3 32 32 +0 Margin -20% -19% +192bp 0% 1% +111bp 2% 2% +19bp 2% 2% +1bp Interest inc/(exp) 2 2 +0 5 5 +0 (4) (4) +0 (9) (9) (0) Other income 0 0 +0 (0) (2) (1) 0 0 +0 0 0 +0 Pre-tax income (58) (52) +5 1 17 +16 33 36 +3 23 23 +0 Taxes 20 18 (2) 137 134 (3) (10) (11) (1) (7) (7) (0) Net income (38) (34) +4 138 151 +13 23 25 +2 16 16 +0 Net income (minority adj.) (39) (36) +3 136 152 +16 15 18 +3 8 8 +1 CapEx 16 25 +9 161 184 +23 478 496 +17 532 550 +18 FCF N/A N/A N/A (40) (52) (12) (323) (335) (12) (385) (400) (15) Per share N/A N/A N/A ($1.70) ($2.22) ($0.52) ($13.96) ($14.34) ($0.38) ($17.12) ($17.50) ($0.38) EPS (adj.) ($1.64) ($1.50) +$0.15 $5.81 $6.58 +$0.77 $0.66 $0.76 +$0.11 $0.34 $0.36 +$0.02 Source: Company data, Morgan Stanley Research 6

Bull/Bear/Base Case Estimates Exhibit 4: MSG Operating Bull/Bear/Base Estimates MSG Scenarios Base Case Bear Case Bull Case ($ millions) FY18E FY19E FY20E ($ millions) FY18E FY19E FY20E ($ millions) FY18E FY19E FY20E EPS $6.58 $0.76 $0.36 EPS $5.55 ($1.10) ($0.91) EPS $6.64 $1.23 $1.61 Growth % 275.3% -88.4% -52.8% Growth % 216.5% -119.9% -17.3% Growth % 278.6% -81.5% 31.4% Revenue 1,534 1,614 1,664 Revenue 1,527 1,581 1,636 Revenue 1,538 1,634 1,692 Growth % 16.4% 5.2% 3.1% Growth % 15.8% 3.5% 3.5% Growth % 16.6% 6.2% 3.6% Operating Expenses 930 964 1,008 Operating Expenses 960 993 1,022 Operating Expenses 932 968 996 Growth % 13.7% 3.6% 4.6% Growth % 17.4% 3.4% 2.8% Growth % 13.9% 3.9% 2.8% SG&A 419 430 440 SG&A 419 430 440 SG&A 419 430 440 Growth % 13.6% 2.7% 2.2% Growth % 13.6% 2.7% 2.2% Growth % 13.6% 2.7% 2.2% Total Expenses 1,349 1,394 1,448 Total Expenses 1,379 1,424 1,461 Total Expenses 1,351 1,399 1,436 Growth % 13.7% 3.3% 3.9% Growth % 16.2% 3.2% 2.7% Growth % 13.8% 3.6% 2.6% Adj. EBITDA 185 219 216 Adj. EBITDA 148 157 175 Adj. EBITDA 187 235 257 Growth % 40.8% 18.6% -1.7% Growth % 12.5% 6.5% 11.0% Growth % 42.4% 25.7% 9.3% Margin % 12.0% 13.6% 13.0% Margin % 9.7% 9.9% 10.7% Margin % 12.2% 14.4% 15.2% EBITDA 136 167 161 EBITDA 98 105 120 EBITDA 138 182 202 Growth % 50.6% 23.0% -3.4% Growth % 9.3% 6.5% 14.7% Growth % 52.9% 32.4% 11.0% Margin % 8.8% 10.3% 9.7% Margin % 6.4% 6.6% 7.4% Margin % 9.0% 11.2% 12.0% EBIT 13 40 32 EBIT (24) (22) (9) EBIT 16 55 73 Growth % -178.2% 193.7% -19.5% Growth % 37.3% -5.6% -59.4% Growth % -190.3% 254.0% 32.4% Margin % 0.9% 2.5% 1.9% Margin % -1.6% -1.4% -0.6% Margin % 1.0% 3.4% 4.3% MSG Entertainment MSG Entertainment MSG Entertainment Total Revenue $750 $782 $800 Total Revenue $743 $749 $772 Total Revenue $754 $802 $829 Growth % 48.1% 4.2% 2.3% Growth % 46.7% 0.9% 3.1% Growth % 48.8% 6.4% 3.3% Adj. EBITDA 112 127 130 Adj. EBITDA 108 100 106 Adj. EBITDA 115 143 151 Adj. EBITDA margin 15.0% 16.3% 16.2% Adj. EBITDA margin 14.6% 13.4% 13.7% Adj. EBITDA margin 15.2% 17.8% 18.2% MSG Sports MSG Sports MSG Sports Total Revenue $784 $832 $864 Total Revenue $784 $832 $864 Total Revenue $784 $832 $864 Growth % -3.4% 6.1% 3.8% Growth % -3.4% 6.1% 3.8% Growth % -3.4% 6.1% 3.8% Adj. EBITDA 144 168 164 Adj. EBITDA 111 132 147 Adj. EBITDA 144 168 184 Adj. EBITDA margin 18.3% 20.1% 18.9% Adj. EBITDA margin 14.1% 15.9% 17.0% Adj. EBITDA margin 18.3% 20.1% 21.3% Other Items Other Items Other Items Capex $184 $496 $550 Capex $184 $495 $549 Capex $185 $496 $551 Gross Debt / Adj. EBITDA 0.6x 0.5x 0.5x Gross Debt / Adj. EBITDA 0.7x 0.7x 0.6x Gross Debt / Adj. EBITDA 0.6x 0.4x 0.4x Net Debt / Adj. EBITDA (5.6)x (2.6)x (0.1)x Net Debt / Adj. EBITDA (6.9x) (3.2x) 0.2x Net Debt / Adj. EBITDA (5.6x) (2.2x) 0.1x Free Cash Flow ($52) ($335) ($400) Free Cash Flow ($83) ($397) ($441) Free Cash Flow ($51) ($320) ($360) FCF/Share ($2.22) ($14.34) ($17.50) FCF/Share ($3.54) ($17.02) ($19.41) FCF/Share ($2.17) ($13.70) ($15.75) Normalized FCF/Share ($3.85) ($16.02) ($19.25) Normalized FCF/Share ($5.17) ($18.70) ($21.17) Normalized FCF/Share ($3.80) ($15.38) ($17.50) SOTP SportsCo Discount -15% -40% 0% SportsCo Equity $3,029.0 $2,177.3 $3,540.0 SportsCo Share Price $131 $95 $153 EntCo Multiple 14.0x 10.0x 18.0x EntCo EBITDA $87.3 $61.4 $110.1 EntCo EV $3,880.5 $2,846.8 $4,895.5 EntCo Equity $4,244.0 $3,158.9 $5,224.3 EntCo Share Price $184 $138 $226 Implies SOTP Target Price $315 $232 $380 Price Target $315 $230 $380 Current Price $312 $312 $312 Upside 1% -26% 22% Source: Company data, Morgan Stanley Research; Note: FYE June 30 7

Exhibit 5: MSG Multiples Analysis Current Price Target Price 2018E 2019E 2020E 2018E 2019E 2020E MSG - Stock Price $312.03 $312.03 $312.03 $315.00 $315.00 $315.00 Class A Common Stock - Dilutive Shares Out. 19.2 18.5 18.1 19.2 18.5 18.1 Class B Common Stock - Dilutive Shares Out. 4.5 4.5 4.5 4.5 4.5 4.5 Total Market Value $7,392.3 $7,201.0 $7,065.9 $7,462.6 $7,269.5 $7,133.2 Plus: Year End Debt $105.4 $105.4 $105.4 $105.4 $105.4 $105.4 Minority interest - Boston Calling (49%) 14.1 15.2 16.4 14.1 15.2 16.4 Minority interest - TAO Group (37.5%) 121.5 131.2 141.7 121.5 131.2 141.7 Less: Cash 1,148.4 665.4 119.5 1,148.4 665.4 119.5 Unconsolidated/ Other Assets Unconsolidated/ Other Assets 195.2 214.7 236.2 195.2 214.7 236.2 Total Other Assets 195.2 214.7 236.2 195.2 214.7 236.2 Enterprise Value $6,289.6 $6,572.7 $6,973.8 $6,360.0 $6,641.3 $7,041.0 EBITDA (adj) $135.7 $166.9 $161.3 $135.7 $166.9 $161.3 EV / EBITDA 46.4x 39.4x 43.2x 46.9x 39.8x 43.7x Forward EBITDA (adj) $166.9 $161.3 $190.2 $166.9 $161.3 $190.2 EV / Forward EBITDA 37.7x 40.8x 36.7x 38.1x 41.2x 37.0x Unlevered Free Cash Flow ($94.1) ($372.5) ($435.0) ($94.1) ($372.5) ($435.0) EV / Unlevered FCF NM NM NM NM NM NM Forward Unlevered Free Cash Flow ($372.5) ($435.0) ($418.7) ($372.5) ($435.0) ($418.7) EV / Fwd. Unlevered FCF NM NM NM NM NM NM FCF ($90.8) ($374.6) ($440.1) ($90.8) ($374.6) ($440.1) Adj. P / FCF NM NM NM NM NM NM Forward FCF ($374.6) ($440.1) ($431.7) ($374.6) ($440.1) ($431.7) Adj. P / FCF (Fwd) NM NM NM NM NM NM Adj. EPS $6.58 $0.76 $0.36 $6.58 $0.76 $0.36 Adj. P / E 47.4x 408.2x 865.7x 47.9x 412.1x 874.0x Forward Adj. EPS $0.76 $0.36 $0.15 $0.76 $0.36 $0.15 Adj. P / E (fwd) 408.2x 865.7x 2,093.4x 412.1x 874.0x 2,113.3x Source: Company data, Morgan Stanley Research; Note: FYE June 30 Exhibit 6: MSG Free Cash Flow Analysis (in millions) 2016A 2017A 2018E 2019E 2020E 2021E EBITDA (adj.) $85.7 $90.1 $135.7 $166.9 $161.3 $190.2 Net Interest Income (Expense) 4.8 7.6 5.4 (3.5) (8.6) (21.7) Capital Expenditures (71.7) (44.2) (184.5) (495.8) (549.8) (556.4) Cash Taxes (5.5) 0.0 (6.0) 0.0 0.0 0.0 Increase in Working Capital 87.5 110.9 (3.0) (3.0) (3.0) (3.0) Free Cash Flow $100.7 $164.4 ($52.3) ($335.4) ($400.1) ($390.9) Avg. Fully Diluted Shares 24.8 23.9 23.6 23.4 22.9 22.4 FCF / Share $4.07 $6.89 ($2.22) ($14.34) ($17.50) ($17.46) Growth % 124.5% 69.6% -132.2% NM NM NM Normalized FCF / Share $2.57 $5.31 ($3.85) ($16.02) ($19.25) ($19.28) Growth % 164.9% 106.5% -172.5% NM NM NM Adj. EPS / Share $0.83 $1.75 $6.58 $0.76 $0.36 $0.15 Growth % NM 110.8% 275.3% -88.4% -52.8% -58.6% Unlevered FCF $97.9 $159.8 ($55.6) ($333.3) ($395.0) ($377.9) Unlevered FCF / Share $3.95 $6.70 ($2.36) ($14.25) ($17.28) ($16.88) % Change 116.5% 69.6% -135.2% NM NM NM Normalized Unlevered FCF $60.9 $122.1 ($94.1) ($372.5) ($435.0) ($418.7) Normalized Unlevered FCF / Share $2.46 $5.12 ($3.99) ($15.93) ($19.03) ($18.70) % Change 149.5% 108.3% -177.9% NM NM NM Source: Company data, Morgan Stanley Research; Note: FYE June 30 8

Exhibit 7: MSG Income Statement, Annual US$ Millions 2016A 2017A 2018E 2019E 2020E 2021E Madison Square Garden: Income Statement Total Revenues 1,115.3 1,318.5 1,534.1 1,613.6 1,663.7 1,876.5 Operating Costs (OpEx + SG&A) 1,005.2 1,187.2 1,349.3 1,394.2 1,448.1 1,630.1 Total adj. EBITDA 110.1 131.3 184.8 219.3 215.6 246.4 Share-Based Comp Expense 24.5 41.1 49.1 52.4 54.3 56.2 Other Expense: Restructuring, etc. 0.0 0.0 0.0 0.0 0.0 0.0 Total EBITDA 85.7 90.1 135.7 166.9 161.3 190.2 Depreciation and amortization 102.5 107.4 122.2 127.3 129.4 151.3 Operating income (loss) (16.8) (17.3) 13.5 39.6 31.9 38.9 Other income (expense): Interest income (expense), net 4.8 7.6 5.4 (3.5) (8.6) (21.7) Miscellaneous (64.9) (71.6) (1.7) 0.0 0.0 0.0 Income (loss) from operations before income taxes (77.0) (81.2) 17.2 36.1 23.3 17.2 Income tax benefit (expense) (0.3) 4.4 133.7 (10.8) (7.0) (5.2) Income Tax Rate 0% 5% -779% 30% 30% 30% Current Taxes (5.5) 0.0 (6.0) 0.0 0.0 0.0 Net income (loss) - company level (77.3) (76.8) 150.9 25.3 16.3 12.0 Minority interest 0.0 4.1 1.1 (7.4) (8.1) (8.7) Net income (loss) (77.3) (72.7) 152.0 17.9 8.2 3.3 Basic EPS ($3.12) ($3.05) $6.46 $0.77 $0.36 $0.15 Diluted EPS ($3.12) ($3.05) $6.45 $0.76 $0.36 $0.15 Less: Non-recurring income (expense) per share ($3.95) ($4.80) ($0.13) $0.00 $0.00 $0.00 Diluted EPS, Adj. for Consensus $0.83 $1.75 $6.58 $0.76 $0.36 $0.15 Plus: Amortization per share $0.27 $0.33 $0.87 $0.87 $0.85 $0.75 Plus: Tax Impact from Amortization per share ($0.11) ($0.13) ($0.30) ($0.26) ($0.25) ($0.23) ModelWare EPS, Diluted $0.99 $1.95 $7.14 $1.37 $0.95 $0.67 MSG Class A Shares (from B/S) 19.8 19.0 19.0 18.5 18.0 17.6 MSG Class B Shares (from B/S) 4.5 4.5 4.5 4.5 4.5 4.5 Unvested RSUs (0.0) (0.1) 0.0 (0.1) 0.0 (0.0) Period End Basic Shares Out 24.3 23.5 23.6 23.0 22.6 22.1 Dilutive Options & RSUs (Treasury Method) 0.0 0.0 0.1 0.1 0.1 0.1 Period End Diluted Shares Out 24.3 23.5 23.7 23.1 22.6 22.1 Avg Basic Shares Out 24.8 23.9 23.5 23.3 22.8 22.3 Avg Fully Diluted Shares Out 24.8 23.9 23.6 23.4 22.9 22.4 Source: Company data, Morgan Stanley Research; Note: FYE June 30 9

Exhibit 8: MSG Income Statement, Quarterly 2017 2018 US$ Millions 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Madison Square Garden: Income Statement Total Revenues 181.7 445.2 386.0 305.6-245.0 536.3 459.6 293.1 Operating Costs (OpEx + SG&A) 180.1 349.2 342.4 315.5-216.1 418.3 410.5 304.5 Total adj. EBITDA 1.6 96.0 43.6 (9.9) - 29.0 118.0 49.1 (11.3) Share-Based Comp Expense 8.4 11.7 10.4 10.7-12.9 13.9 10.1 12.3 Other Expense: Restructuring, etc. 0.0 0.0 0.0 0.0-0.0 0.0 0.0 0.0 Total EBITDA (6.7) 84.2 33.2 (20.6) - 16.1 104.1 39.1 (23.6) Depreciation and amortization 26.1 26.0 26.5 28.8-30.5 30.5 30.4 30.7 Operating income (loss) (32.8) 58.3 6.7 (49.4) - (14.5) 73.6 8.6 (54.3) Other income (expense): Interest income (expense), net 2.0 2.2 2.2 1.3-0.7 1.6 1.3 1.9 Miscellaneous (1.0) 0.2 (26.3) (44.5) - 3.7 (4.0) (1.4) 0.0 Income (loss) from operations before income taxes (31.8) 60.7 (17.4) (92.6) - (10.1) 71.2 8.5 (52.3) Income tax benefit (expense) 2.9 (3.2) (0.4) 5.2 - (0.8) 116.8 (0.7) 18.3 Income Tax Rate 9.2% 5.4% -2.5% 5.6% -7.5% -164.2% 7.7% 35.0% Net income (loss) - company level (28.914) 57.421 (17.8) (87.5) - (10.9) 188.0 7.8 (34.0) Minority interest 0.3 0.3 0.3 3.2 - (0.2) 1.6 1.3 (1.6) Net income (loss) (28.6) 57.7 (17.5) (84.3) - (11.1) 189.6 9.1 (35.6) Basic EPS ($1.19) $2.41 ($0.74) ($3.58) ($0.47) $8.03 $0.39 ($1.51) Diluted EPS ($1.19) $2.39 ($0.74) ($3.58) ($0.47) $7.96 $0.38 ($1.50) Less: Non-recurring income (expense) per share ($0.07) $0.01 ($1.77) ($3.02) $0.25 ($0.28) ($0.10) $0.00 Diluted EPS, Adj. for Consensus ($1.12) $2.38 $1.03 ($0.55) ($0.72) $8.24 $0.48 ($1.50) Plus: Amortization per share $0.08 $0.08 $0.08 $0.08 $0.08 $0.08 $0.08 $0.08 Plus: Tax Impact from Amortization per share ($0.03) ($0.03) ($0.03) ($0.03) ($0.03) ($0.03) ($0.03) ($0.03) ModelWare EPS, Diluted ($1.08) $2.43 $1.08 ($0.50) ($0.67) $8.29 $0.54 ($1.44) MSG Class A Shares (from B/S) 19.4 19.4 19.0 19.0 19.1 19.0 19.1 19.0 MSG Class B Shares (from B/S) 4.5 4.5 4.5 4.5 4.5 4.5 4.5 4.5 Unvested RSUs 0.0 0.0 0.1 (0.1) 0.0 0.0 0.1 0.0 Period End Basic Shares Out 24.0 24.0 23.6 23.5 23.6 23.6 23.7 23.6 Dilutive Options & RSUs (Treasury Method) 0.0 0.2 0.0 0.0 0.0 0.2 0.1 0.1 Period End Diluted Shares Out 24.0 24.1 23.6 23.5 23.6 23.8 23.9 23.7 Avg Basic Shares Out 24.1 24.0 23.8 23.6 23.6 23.6 23.7 23.7 Avg Fully Diluted Shares Out 24.1 24.1 23.8 23.6 23.6 23.8 23.8 23.8 Source: Company data, Morgan Stanley Research; Note: FYE June 30 10

Exhibit 9: MSG Balance Sheet US$ Millions 2016A 2017A 2018E 2019E 2020E 2021E Current Assets: Cash and cash equivalents 1,444.3 1,238.1 1,148.4 665.4 119.5 100.0 Restricted cash 27.1 34.0 34.0 34.0 34.0 34.0 Accounts receivable 76.0 102.1 117.2 121.7 123.8 137.8 Net receivable due from Cablevision 4.1 2.7 2.7 2.7 2.7 2.7 Prepaid expenses 27.0 23.4 27.2 28.6 29.5 33.2 Other current assets 25.3 49.5 57.5 60.5 62.4 70.4 Total current assets 1,603.9 1,449.7 1,387.1 912.9 371.9 378.1 Advances due from Cablevision 1.7 0.0 0.0 0.0 0.0 0.0 Property and equipment, net of accumulated depreciation 1,160.6 1,159.3 1,242.1 1,630.9 2,070.6 2,492.5 Investments in affilliates 263.5 242.3 242.3 242.3 242.3 242.3 Other assets 54.5 57.6 65.4 67.2 67.6 74.4 Amortizable intangible assets, net of accumulated amortization 15.7 257.0 236.4 216.1 196.8 180.0 Indefinite-lived intangible assets 166.9 166.9 166.9 166.9 166.9 166.9 Goodwill 277.2 380.1 380.1 380.1 380.1 380.1 Total Assets 3,544.0 3,712.8 3,720.3 3,616.3 3,496.2 3,914.3 Current Liabilities: Short-term debt 0.0 0.0 0.0 0.0 0.0 0.0 Accounts payable 29.2 41.7 48.5 51.0 52.6 59.3 Accrued liabilities: Employee related costs 119.4 138.9 161.6 169.9 175.2 197.6 Other expenses 133.8 191.3 199.4 117.0 105.6 101.3 Deferred revenue 332.4 390.2 308.8 380.7 383.6 366.9 Total current liabilities 614.8 762.0 718.3 718.6 717.1 725.1 Long-term debt 0.0 105.4 105.4 105.4 105.4 620.7 Defined benefit and other postretirement obligations 66.0 53.0 61.7 64.9 66.9 75.4 Other employee related costs 32.9 29.4 34.2 36.0 37.1 41.8 Other liabilities 49.2 66.0 75.2 77.5 78.2 86.4 Deferred tax liability 194.6 196.4 56.7 67.5 74.5 79.7 Total liabilities 957.5 1,212.3 1,051.5 1,069.9 1,079.2 1,629.1 Combined Group Equity: Paid-in capital 2,704.7 2,683.0 2,651.3 2,451.2 2,251.1 2,051.1 Retained earnings (75.7) (148.4) 2.5 27.8 44.1 56.1 Accumulated other comprehensive loss (42.6) (34.1) 15.0 67.4 121.7 177.9 Combined Group equity 2,586.4 2,500.5 2,668.8 2,546.4 2,416.9 2,285.2 Total Liabilities & Equity 3,544.0 3,712.8 3,720.3 3,616.3 3,496.2 3,914.3 Source: Company data, Morgan Stanley Research; Note: FYE June 30 11

Exhibit 10: MSG Cash Flow Statement US$ Millions 2016A 2017A 2018E 2019E 2020E 2021E Cash flows from operating activities: Net income (loss) (77.3) (76.8) 150.9 25.3 16.3 12.0 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 102.5 107.4 122.2 127.3 129.4 151.3 Share-based compensation expense allocations, net 24.5 41.1 49.1 52.4 54.3 56.2 Cumulative effect of a change in accounting, net of tax 0.0 0.0 0.0 0.0 0.0 0.0 Gain on sale of operating asset 0.0 0.0 0.0 0.0 0.0 0.0 Gain on curtailment of pension plans 0.0 0.0 0.0 0.0 0.0 0.0 Amortization of purchase accounting liability 0.0 8.7 0.0 0.0 0.0 0.0 Loss on equity investment 19.1 30.8 0.0 0.0 0.0 0.0 Deemed capital contribution / Other 45.9 29.2 0.0 0.0 0.0 0.0 Provision for doubtful accounts 0.0 1.4 0.0 0.0 0.0 0.0 Change in assets and liabilities: Account receivable, net (25.1) (20.4) (15.2) (4.5) (2.1) (14.0) Net receivable due from Cablevision (5.1) 2.8 0.0 0.0 0.0 0.0 Prepaid expenses and other assets (34.4) 1.8 (19.8) (6.2) (3.2) (18.5) Accounts payable 9.1 2.0 6.8 2.5 1.6 6.7 Accrued and other liabilities 55.8 35.0 53.5 (66.8) (2.2) 39.5 Deferred revenue 10.4 53.4 (81.4) 72.0 2.9 (16.8) Deferred tax liability 0.3 0.0 (139.8) 10.8 7.0 5.2 Net cash provided by operating activities 125.8 216.6 126.5 212.8 204.0 221.7 Cash flows from investing activities: Capital expenditures (71.7) (44.2) (184.5) (495.8) (549.8) (556.4) Proceeds from sale of fixed assets 0.0 0.0 0.0 0.0 0.0 0.0 Restricted cash 0.0 0.0 0.0 0.0 0.0 0.0 Payments for acquisition of assets or equity interests (44.0) (220.1) 0.0 0.0 0.0 0.0 Net cash used in investing activities ($115.7) ($264.3) ($184.5) ($495.8) ($549.8) ($556.4) Cash flows from financing activities: Change In Debt (unfunded) 0.0 0.0 0.0 0.0 0.0 515.2 Debt: Repayments 0.0 0.0 0.0 0.0 0.0 0.0 Debt: Additional Borrowings 0.0 0.0 0.0 0.0 0.0 0.0 Dividends Paid 0.0 0.0 0.0 0.0 0.0 0.0 Sale of Common Stock (Repurchase)/ (Distributions) (105.7) (148.0) (31.8) (200.1) (200.0) (200.0) Advances to Cablevision 0.0 0.0 0.0 0.0 0.0 0.0 Repayment of advances to Cablevision 0.0 0.0 0.0 0.0 0.0 0.0 Principal payments on capital lease obligations 0.0 0.0 0.0 0.0 0.0 0.0 Deferred financing costs 0.0 0.0 0.0 0.0 0.0 0.0 Capital contributions / Other 1,525.7 (10.6) 0.0 0.0 0.0 0.0 Net cash provided by (used in) financing activities $1,420.0 ($158.5) ($31.8) ($200.1) ($200.0) $315.2 Net increase (decrease) in cash and cash equivalents 1,430.1 (206.2) (89.7) (483.0) (545.9) (19.5) Cash and cash equivalents at beginning of year 14.2 1,444.3 1,238.1 1,148.4 665.4 119.5 Cash and cash equivalents at end of year 1,444.3 1,238.1 1,148.4 665.4 119.5 100.0 Source: Company data, Morgan Stanley Research; Note: FYE June 30 Exhibit 11: MSG Capital Expenditures US$ Millions 2016A 2017A 2018E 2019E 2020E 2021E Segment-Level Capital Expenditures MSG Entertainment 5.0 11.5 25.1 19.5 22.0 26.9 MSG Sports 4.6 2.4 3.7 4.2 4.3 4.5 Total Segment-Level CapEx 9.6 13.9 28.8 23.7 26.3 31.4 Corporate-Level Capital Expenditures General Corporate 62.2 30.4 70.6 72.1 73.5 75.0 Garden Renovations 0.0 0.0 0.0 0.0 0.0 0.0 LA Forum / MSG Sphere 0.0 0.0 85.0 400.0 450.0 450.0 Total Corporate-Level CapEx 62.2 30.4 155.7 472.1 523.5 525.0 Total Capital Expenditures 71.7 44.2 184.5 495.8 549.8 556.4 CapEx as % of Revenue MSG Entertainment 1.2% 2.3% 3.3% 2.5% 2.8% 2.8% MSG Sports 0.7% 0.3% 0.5% 0.5% 0.5% 0.5% Source: Company data, Morgan Stanley Research; Note: FYE June 30 12

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For valuation methodology and risks associated with any recommendation, rating or price target referenced in this research report, please contact the Client Support Team as follows: US/Canada +1 800 303-2495; Hong Kong +852 2848-5999; Latin America +1 718 754-5444 (U.S.); London +44 (0)20-7425-8169; Singapore +65 6834-6860; Sydney +61 (0)2-9770-1505; Tokyo +81 (0)3-6836-9000. Alternatively you may contact your investment representative or Morgan Stanley Research at 1585 Broadway, (Attention: Research Management), New York, NY 10036 USA. Analyst Certification The following analysts hereby certify that their views about the companies and their securities discussed in this report are accurately expressed and that they have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report: Benjamin Swinburne, CFA. Unless otherwise stated, the individuals listed on the cover page of this report are research analysts. Global Research Conflict Management Policy Morgan Stanley Research has been published in accordance with our conflict management policy, which is available at www.morganstanley.com/institutional/research/conflictpolicies. Important US Regulatory Disclosures on Subject Companies As of June 29, 2018, Morgan Stanley beneficially owned 1% or more of a class of common equity securities of the following companies covered in Morgan Stanley Research: 21st Century Fox, CBS Corporation, Lions Gate Entertainment Corp., Madison Square Garden Co, MSG Networks Inc, Netflix Inc, Pandora Media Inc., Roku Inc., Spotify Technology SA, Viacom, Walt Disney Co. Within the last 12 months, Morgan Stanley managed or co-managed a public offering (or 144A offering) of securities of Liberty Braves Group, Liberty Formula One, Netflix Inc, Roku Inc.. Within the last 12 months, Morgan Stanley has received compensation for investment banking services from Interpublic Group, Lamar Advertising Co., Liberty Braves Group, Liberty Formula One, Netflix Inc, OUTFRONT MEDIA INC, Pandora Media Inc., Roku Inc., Spotify Technology SA, Viacom, Walt Disney Co. In the next 3 months, Morgan Stanley expects to receive or intends to seek compensation for investment banking services from 21st Century Fox, AMC Networks, Inc., CBS Corporation, Cinemark Holdings, Inc., Discovery Communications, Interpublic Group, Lamar Advertising Co., Liberty Braves Group, Liberty Formula One, Lions Gate Entertainment Corp., Madison Square Garden Co, MSG Networks Inc, Netflix Inc, Omnicom Group Inc., OUTFRONT MEDIA INC, Pandora Media Inc., Roku Inc., Spotify Technology SA, Viacom, Walt Disney Co, World Wrestling Entertainment Inc. Within the last 12 months, Morgan Stanley has received compensation for products and services other than investment banking services from AMC Networks, Inc., Cinemark Holdings, Inc., Discovery Communications, Interpublic Group, Lamar Advertising Co., Liberty Braves Group, Liberty Formula One, Spotify Technology SA, Walt Disney Co. Within the last 12 months, Morgan Stanley has provided or is providing investment banking services to, or has an investment banking client relationship with, the following company: 21st Century Fox, AMC Networks, Inc., CBS Corporation, Cinemark Holdings, Inc., Discovery Communications, Interpublic Group, Lamar Advertising Co., Liberty Braves Group, Liberty Formula One, Lions Gate Entertainment Corp., Madison Square Garden Co, MSG Networks Inc, Netflix Inc, Omnicom Group Inc., OUTFRONT MEDIA INC, Pandora Media Inc., Roku Inc., Spotify Technology SA, Viacom, Walt Disney Co, World Wrestling Entertainment Inc. Within the last 12 months, Morgan Stanley has either provided or is providing non-investment banking, securities-related services to and/or in the past has entered into an agreement to provide services or has a client relationship with the following company: AMC Networks, Inc., CBS Corporation, Cinemark Holdings, Inc., Discovery Communications, Interpublic Group, Lamar Advertising Co., Liberty Braves Group, Liberty Formula One, Netflix Inc, Pandora Media Inc., Spotify Technology SA, Walt Disney Co, World Wrestling Entertainment Inc. Morgan Stanley & Co. LLC makes a market in the securities of 21st Century Fox, AMC Networks, Inc., CBS Corporation, Cinemark Holdings, Inc., Discovery Communications, Interpublic Group, Lamar Advertising Co., Liberty Braves Group, Liberty Formula One, Madison Square Garden Co, MSG Networks Inc, Netflix Inc, Omnicom Group Inc., OUTFRONT MEDIA INC, Pandora Media Inc., Roku Inc., Viacom, Walt Disney Co, World Wrestling Entertainment Inc. The equity research analysts or strategists principally responsible for the preparation of Morgan Stanley Research have received compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors, firm revenues and overall investment banking revenues. Equity Research analysts' or strategists' compensation is not linked to investment banking or capital markets transactions performed by Morgan Stanley or the profitability or revenues of particular trading desks. Morgan Stanley and its affiliates do business that relates to companies/instruments covered in Morgan Stanley Research, including market making, providing liquidity, fund management, commercial banking, extension of credit, investment services and investment banking. Morgan Stanley sells to and buys from customers the securities/instruments of companies covered in Morgan Stanley Research on a principal basis. Morgan Stanley may have a position in the debt of the Company or instruments discussed in this report. Morgan Stanley trades or may trade as principal in the debt securities (or in related derivatives) that are the subject of the debt research report. Certain disclosures listed above are also for compliance with applicable regulations in non-us jurisdictions. STOCK RATINGS Morgan Stanley uses a relative rating system using terms such as Overweight, Equal-weight, Not-Rated or Underweight (see definitions below). Morgan Stanley does not assign ratings of Buy, Hold or Sell to the stocks we cover. Overweight, Equal-weight, Not-Rated and Underweight are not the equivalent of buy, hold and sell. Investors should carefully read the definitions of all ratings used in Morgan Stanley Research. In addition, since Morgan Stanley Research contains more complete information concerning the analyst's views, investors should carefully read Morgan Stanley Research, in its entirety, and not infer the contents from the rating alone. In any case, ratings (or research) should not be used or relied upon as investment advice. An investor's decision to buy or sell a stock should depend on individual circumstances (such as the investor's existing holdings) and other considerations. Global Stock Ratings Distribution (as of July 31, 2018) The Stock Ratings described below apply to Morgan Stanley's Fundamental Equity Research and do not apply to Debt Research produced by the Firm. For disclosure purposes only (in accordance with NASD and NYSE requirements), we include the category headings of Buy, Hold, and Sell alongside our ratings of Overweight, Equal-weight, Not-Rated and Underweight. Morgan Stanley does not assign ratings of Buy, Hold or Sell to the stocks we cover. Overweight, Equal-weight, Not-Rated and Underweight are not the equivalent of buy, hold, and sell but represent recommended relative weightings (see 13

definitions below). To satisfy regulatory requirements, we correspond Overweight, our most positive stock rating, with a buy recommendation; we correspond Equal-weight and Not-Rated to hold and Underweight to sell recommendations, respectively. STOCK RATING CATEGORY COVERAGE UNIVERSE INVESTMENT BANKING CLIENTS (IBC) OTHER MATERIAL INVESTMENT SERVICES CLIENTS (MISC) COUNT % OF TOTAL COUNT % OF TOTAL IBC % OF RATING CATEGORY COUNT % OF TOTAL OTHER MISC Overweight/Buy 1164 37% 306 41% 26% 544 38% Equal-weight/Hold 1347 43% 359 48% 27% 648 46% Not-Rated/Hold 49 2% 4 1% 8% 7 0% Underweight/Sell 546 18% 75 10% 14% 215 15% TOTAL 3,106 744 1414 Data include common stock and ADRs currently assigned ratings. Investment Banking Clients are companies from whom Morgan Stanley received investment banking compensation in the last 12 months. Due to rounding off of decimals, the percentages provided in the "% of total" column may not add up to exactly 100 percent. Analyst Stock Ratings Overweight (O). The stock's total return is expected to exceed the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months. Equal-weight (E). The stock's total return is expected to be in line with the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months. Not-Rated (NR). Currently the analyst does not have adequate conviction about the stock's total return relative to the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months. Underweight (U). The stock's total return is expected to be below the average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months. Unless otherwise specified, the time frame for price targets included in Morgan Stanley Research is 12 to 18 months. Analyst Industry Views Attractive (A): The analyst expects the performance of his or her industry coverage universe over the next 12-18 months to be attractive vs. the relevant broad market benchmark, as indicated below. In-Line (I): The analyst expects the performance of his or her industry coverage universe over the next 12-18 months to be in line with the relevant broad market benchmark, as indicated below. Cautious (C): The analyst views the performance of his or her industry coverage universe over the next 12-18 months with caution vs. the relevant broad market benchmark, as indicated below. Benchmarks for each region are as follows: North America - S&P 500; Latin America - relevant MSCI country index or MSCI Latin America Index; Europe - MSCI Europe; Japan - TOPIX; Asia - relevant MSCI country index or MSCI sub-regional index or MSCI AC Asia Pacific ex Japan Index. Stock Price, Price Target and Rating History (See Rating Definitions) 14

Important Disclosures for Morgan Stanley Smith Barney LLC Customers Important disclosures regarding the relationship between the companies that are the subject of Morgan Stanley Research and Morgan Stanley Smith Barney LLC or Morgan Stanley or any of their affiliates, are available on the Morgan Stanley Wealth Management disclosure website at www.morganstanley.com/online/researchdisclosures. For Morgan Stanley specific disclosures, you may refer to www.morganstanley.com/researchdisclosures. Each Morgan Stanley Equity Research report is reviewed and approved on behalf of Morgan Stanley Smith Barney LLC. This review and approval is conducted by the same person who reviews the Equity Research report on behalf of Morgan Stanley. This could create a conflict of interest. Other Important Disclosures Morgan Stanley & Co. International PLC and its affiliates have a significant financial interest in the debt securities of AMC Networks, Inc., CBS Corporation, Interpublic Group, Netflix Inc, Omnicom Group Inc., Pandora Media Inc., Viacom, Walt Disney Co. Morgan Stanley Research policy is to update research reports as and when the Research Analyst and Research Management deem appropriate, based on developments with the issuer, the sector, or the market that may have a material impact on the research views or opinions stated therein. In addition, certain Research publications are intended to be updated on a regular periodic basis (weekly/monthly/quarterly/annual) and will ordinarily be updated with that frequency, unless the Research Analyst and Research Management determine that a different publication schedule is appropriate based on current conditions. Morgan Stanley is not acting as a municipal advisor and the opinions or views contained herein are not intended to be, and do not constitute, advice within the meaning of Section 975 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Morgan Stanley produces an equity research product called a "Tactical Idea." Views contained in a "Tactical Idea" on a particular stock may be contrary to the recommendations or views expressed in research on the same stock. This may be the result of differing time horizons, methodologies, market events, or other factors. For all research available on a particular stock, please contact your sales representative or go to Matrix at http://www.morganstanley.com/matrix. Morgan Stanley Research is provided to our clients through our proprietary research portal on Matrix and also distributed electronically by Morgan Stanley to clients. Certain, but not all, Morgan Stanley Research products are also made available to clients through third-party vendors or redistributed to clients through alternate electronic means as a convenience. For access to all available Morgan Stanley Research, please contact your sales representative or go to Matrix at http://www.morganstanley.com/matrix. Any access and/or use of Morgan Stanley Research is subject to Morgan Stanley's Terms of Use (http://www.morganstanley.com/terms.html). By accessing and/or using Morgan Stanley Research, you are indicating that you have read and agree to be bound by our Terms of Use (http://www.morganstanley.com/terms.html). In addition you consent to Morgan Stanley processing your personal data and using cookies in accordance with our Privacy Policy and our Global Cookies Policy (http://www.morganstanley.com/privacy_pledge.html), including for the purposes of setting your preferences and to collect readership data so that we can deliver better and more personalized service and products to you. To find out more information about how Morgan Stanley processes personal data, how we use cookies and how to reject cookies see our Privacy Policy and our Global Cookies Policy (http://www.morganstanley.com/privacy_pledge.html). If you do not agree to our Terms of Use and/or if you do not wish to provide your consent to Morgan Stanley processing your personal data or using cookies please do not access our research. Morgan Stanley Research does not provide individually tailored investment advice. Morgan Stanley Research has been prepared without regard to the circumstances and objectives of those who receive it. Morgan Stanley recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial adviser. The appropriateness of an investment or strategy will depend on an investor's 15

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