Smart, right? The hyphen acts as a minus sign, so Google knows not to return results including those words or phrases. The same logic also works with a plus sign, so if you're looking for a super-specific result (like that movie title that is right on the tip of your tongue), use the + sign in between search terms to narrow down your search.
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Google is smart. Really smart. Take this tip, which I recently read in the latest issue of Real Simple: to narrow down your search, use a hyphen before words you don't want included in the search results. Say you want to find information on ravens — the actual bird, not the football team from Baltimore. So enter "ravens -football -Baltimore." The returned results will omit those including football.