Boston Celtics Limited Partnership II and Subsidiaries presented these consolidated statements of income for 1998, 1997, and 1996.
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BOSTON CELTICS LIMITED PARTNERSHIP II AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
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For the Year Ended
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Revenues:
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June 30,
1998
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June 30,
1997
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June 30,
1996
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Basketball regular season
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$39,107,960
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$31,813,019
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$35,249,625
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Ticket sales
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28,002,469
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23,269,159
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22,071,992
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Television and radio broadcast rights fees
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8,569,485
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7,915,626
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7,458,651
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Other, principally promotional advertising
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75,679,914
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62,997,804
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64,780,268
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Costs and expenses:
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Basketball regular season
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Team
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40,401,643
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40,941,156
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27,891,264
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Game
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2,820,107
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2,386,042
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2,606,218
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General and administrative
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13,464,566
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13,913,893
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15,053,333
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Selling and promotional
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4,819,478
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4,680,168
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2,973,488
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Depreciation
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208,162
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189,324
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140,894
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Amortization of NBA franchise and other intangible assets
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165,035
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164,702
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164,703
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61,878,991
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62,275,285
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48,829,900
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13,800,923
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722,519
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15,950,368
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Interest expense
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6,017,737
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5,872,805
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6,387,598
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Interest income
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6,402,366
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6,609,541
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8,175,184
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Net realized gains (losses) on disposition of marketable
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securities and other shortterm investments
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Income from continuing operations before income taxes
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Provision for income taxes
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Income from continuing operations
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Discontinued operations:
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Income from discontinued operations (less applicable income taxes of $30,000)
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82,806
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Gain from disposal of discontinued operations (less applicable income taxes of $17,770,000)
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38,330,907
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NET INCOME
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12,267,317
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420,306
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54,200,529
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Net income applicable to interests of General Partners
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306,216
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62,246
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1,291,014
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Net income applicable to interests of Limited Partners
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$11,961,101
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$358,060
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$52,909,515
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Per unit:
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Income from continuing operations-basic
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$
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2.45
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$
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0.07
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$
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2.68
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Income from continuing operations-diluted
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$
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2.17
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$
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0.06
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$
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2.59
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Net income-basic
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$
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2.45
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$
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0.07
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$
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9.18
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Net income-diluted
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$
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2.17
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$
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0.06
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$
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8.89
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Distributions declared
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$
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2
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$
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1
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$
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1.5
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Required
a. Comment on Amortization of NBA Franchise and Other Intangible Assets.
b. Would the discontinued operations be included in projecting the future? Comment.
c. The costs and expenses include team costs and expenses. Speculate on the major reason for the increase in this expense between 1996 and 1997.
d. What were the major reasons for the increase in income from continuing operations between 1997 and 1998?
e. Speculate on why distributions declared were higher in 1998 than 1996. (Notice that net income was substantially higher in 1996.)