MGM MGM Resorts International

MGM Announces Better Than Expected Third Quarter Cash Flow Company Retires $1.15 Billion of Term Debt LOS ANGELES, Oct. 28 /PRNewswire-FirstCall/ -- Metro-Goldwyn-Mayer Inc. announced today that net cash provided by operating activities in the quarter ended September 30, 2003 was $21.0 million, representing a positive swing of $119.6 million from the $98.6 million of cash used by operating activities in the third quarter of 2002. (Logo: http://www.newscom.com/cgi-bin/prnh/20011119/MGMLOGO ) For the first nine months of 2003, net cash from operating activities was $180.6 million, exceeding the upper range of the Company's full-year guidance of $100 to $150 million. Revenues increased by 20 percent to $457.1 million in the quarter, compared to $381.2 million in the prior year period. The Company reported a net loss of $32.6 million, or $.13 per share, in the September quarter, better than prior guidance of a loss of $.14 to $.17 per share. The quarterly results exceeded expectations, even after a one-time charge to earnings of $5.1 million, or $.02 per share, for costs incurred in connection with MGM's bid for Vivendi Universal Entertainment. Separately, MGM announced today that it has paid off its term debt of $1.15 billion. Commenting on these results, Alex Yemenidjian, Chairman & Chief Executive Officer, said: "Our better-than-expected free cash flow this year and our outlook for the next few years give us extraordinary flexibility in reviewing our capital allocation opportunities and priorities." Chris McGurk, Vice Chairman & Chief Operating Officer added: "This year's film slate will be the most profitable in MGM's seven-year history as a public company. Our Home Entertainment Group and television operations continue to generate solid growth. As a result, MGM is now in as strong a position operationally as it has ever been." THIRD QUARTER 2003 OPERATING HIGHLIGHTS. * Worldwide home entertainment revenues increased 57 percent. * Worldwide DVD unit shipments increased 52 percent. * "Die Another Day" and "Agent Cody Banks" were MGM's top selling newly released home entertainment titles. * MGM's U.S. DVD library market share in the third quarter for 2003 year-to-date was 19 percent, compared to 17 percent at the start of the year. * The Company's three feature films released in the quarter, "Legally Blonde 2: Red, White & Blonde," "Uptown Girls" and "Jeepers Creepers" 2, will all contribute strong first cycle profits. * In television, since its premiere in June, "Dead Like Me" accounted for 7 of Showtime's top 10 highest rated episodes in 2003. Showtime has already renewed the program for a second season. * MGM Networks announced an agreement with CNBC Asia Pacific to launch a Chinese subtitled MGM Channel in Greater China and Southeast Asia starting in the fourth quarter of 2003. * With the announcement of new branded channels in three European countries, Switzerland, Liechtenstein and Iceland, MGM Networks' reach now extends to over 100 countries. Metro-Goldwyn-Mayer Inc. (NYSE:MGM), through its Metro-Goldwyn-Mayer Studios Inc. subsidiary, is actively engaged in the worldwide production and distribution of entertainment product, including motion pictures, television programming, home video, interactive media, music, and licensed merchandise. The Company owns the largest modern film library in the world, consisting of approximately 4,000 titles. Its operating units include MGM Pictures, United Artists, MGM Television Entertainment, MGM Networks, MGM Distribution Co., MGM Worldwide Television Distribution, MGM Home Entertainment, MGM On Stage, MGM Consumer Products, MGM Music, MGM Interactive and MGM Online. In addition, MGM has ownership interests in international television channels reaching over 100 countries around the globe. For more information on MGM, visit MGM Online at http://www.mgm.com/ . This news release contains forward-looking statements that are based upon the Company's estimates and expectations concerning future events and are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. These risks and uncertainties include, among other things, future competitive and market conditions, whether the Company's products achieve customer acceptance, future business decisions, and other factors, including those described in the Company's filings with the Securities and Exchange Commission, all of which are difficult or impossible to predict accurately and many of which are beyond the control of MGM. In light of the significant uncertainties inherent in the forward-looking information herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the Company's objectives or plans will be realized. This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities of the Company. For further information, please contact Joseph Fitzgerald of Metro-Goldwyn-Mayer Inc., +1-310-449-3660. Metro-Goldwyn-Mayer Inc. Condensed Consolidated Results of Operations Quarter and Nine Months Ended September 30, 2003 and 2002 In thousands, except Quarter Ended Nine Months Ended share and per share September 30, September 30, data (unaudited) 2003 2002 2003 2002 Revenues: Feature films $385,536 $305,716 $1,169,092 $883,727 Television programming 62,445 67,331 144,122 122,507 Other 9,070 8,109 26,730 26,973 Total revenues $457,051 $381,156 $1,339,944 $1,033,207 EBITDA: Feature films $9,011 $29,168 $8,853 $(89,225) Television programming 16,357 16,410 17,018 8,079 Other 1,874 3,875 12,775 13,326 General and administrative expenses (37,149) (20,793) (95,843) (59,694) EBITDA (9,907) 28,660 (57,197) (127,514) Depreciation and non-film amortization (3,476) (4,928) (13,728) (14,405) Operating income (loss) (13,383) 23,732 (70,925) (141,919) Write-down on investment in cable channels -- -- (93,059) -- Equity in net earnings (losses) of investees (684) 7,140 595 6,325 Interest expense, net of amounts capitalized (14,744) (18,107) (51,556) (60,732) Interest and other income, net 5,010 2,339 11,387 3,964 Due diligence expenses (5,099) -- (5,099) -- Income (loss) before provision for income taxes (28,900) 15,104 (208,657) (192,362) Income tax provision (3,713) (3,409) (13,357) (8,544) Net income (loss) $(32,613) $11,695 $(222,014) $(200,906) Income (loss) per share: Basic and diluted Net income (loss) $(0.13) $0.05 $(0.90) $(0.81) Weighted average number of common shares outstanding: Basic 244,526,208 250,708,242 245,919,877 248,099,306 Diluted 244,526,208 250,714,711 245,919,877 248,099,306 Metro-Goldwyn-Mayer Inc. Condensed Consolidated Balance Sheets September 30, 2003 and December 31, 2002 (In thousands, except share data) ASSETS September 30, December 31, 2003 2002 (unaudited) Cash and cash equivalents $974,136 $593,131 Short-term investments 2,028 6,488 Accounts and contracts receivable (net of allowance for doubtful accounts of $41,357 and $40,980, respectively) 509,014 605,739 Note receivable 245,077 -- Film and television costs, net 1,847,672 1,870,692 Investments in and advances to affiliates 24,381 620,132 Property and equipment, net 59,186 41,397 Goodwill 516,706 516,706 Other assets 29,319 29,791 $4,207,519 $4,284,076 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Bank and other debt $1,151,428 $1,156,725 Accounts payable and accrued liabilities 275,412 212,792 Accrued participants' share 305,140 278,172 Income taxes payable 35,630 33,030 Advances and deferred revenues 67,781 65,051 Other liabilities 109,519 23,840 Total liabilities 1,944,910 1,769,610 Commitments and contingencies Stockholders' equity: Preferred stock, $.01 par value, 25,000,000 shares authorized, none issued -- -- Common stock, $.01 par value, 500,000,000 shares authorized, 251,960,505 and 251,960,505 shares issued 2,520 2,520 Additional paid-in capital 3,915,422 3,914,923 Accumulated other comprehensive loss (2,512) (18,361) Deficit (1,567,826) (1,345,812) Treasury stock, at cost (84,995) (38,804) Total stockholders' equity 2,262,609 2,514,466 $4,207,519 $4,284,076 Metro-Goldwyn-Mayer Inc. Supplemental Financial Information: Consolidated and Unconsolidated Companies Quarter and Nine Months Ended September 30, 2003 and 2002 Quarter Ended Nine Months Ended In thousands September 30, September 30, (unaudited) 2003 2002 2003 2002 Revenues: Consolidated companies Feature films $385,536 $305,716 $1,169,092 $883,727 Television programming 62,445 67,331 144,122 122,507 Other 9,070 8,109 26,730 26,973 Total consolidated revenues 457,051 381,156 1,339,944 1,033,207 Unconsolidated companies Cable channels 9,656 31,835 46,746 95,563 Total consolidated and unconsolidated revenues $466,707 $412,991 $1,386,690 $1,128,770 EBITDA: Consolidated companies Feature films $9,011 $29,168 $8,853 $(89,225) Television programming 16,357 16,410 17,018 8,079 Other 1,874 3,875 12,775 13,326 General and administrative expenses (37,149) (20,793) (95,843) (59,694) Total consolidated EBITDA (9,907) 28,660 (57,197) (127,514) Unconsolidated companies Cable channels 290 7,988 4,752 18,564 Total consolidated and unconsolidated EBITDA $(9,617) $36,648 $(52,445) $(108,950) http://www.newscom.com/cgi-bin/prnh/20011119/MGMLOGO http://photoarchive.ap.org/ DATASOURCE: Metro-Goldwyn-Mayer Inc. CONTACT: Joseph Fitzgerald of Metro-Goldwyn-Mayer Inc., +1-310-449-3660 Web site: http://www.mgm.com/

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