MGM MGM Resorts International

MGM Announces Improved Second Quarter Results Company Continues to Generate Strong Cash Flow From Operations LOS ANGELES, July 29 /PRNewswire-FirstCall/ -- Metro-Goldwyn-Mayer Inc. (NYSE:MGM) today announced a sharply reduced net loss and $33.6 million of net cash provided by operating activities in the quarter ended June 30, 2004. (Logo: http://www.newscom.com/cgi-bin/prnh/20011119/MGMLOGO ) Second quarter revenues totaled $406.1 million, compared to $487.7 million in the prior year period. Last year's second quarter revenues included $140.1 million in home entertainment revenues from "Die Another Day," the most successful home entertainment release in the Company's history. The Company reported a reduced net loss of $19.7 million, or $0.08 per share, which included a non-cash charge of $7.0 million, or $0.03 per share, for the Company's early election to expense employee stock options. The net loss of $133.6 million, or $0.55 per share, in the second quarter of 2003 included a loss of $93.1 million, or $0.38 per share, from the sale of the Company's interest in three Rainbow Media cable networks. Commenting on these results, Alex Yemenidjian, Chairman and Chief Executive, said: "Our ability to consistently generate cash flow afforded us the opportunity to reward our shareholders, yet again, with a tax-free, extraordinary dividend of $8.00 per share during the second quarter." Chris McGurk, Vice-Chairman and Chief Operating Officer, added: "Our worldwide home entertainment business continues to post strong growth. In addition, our 'Stargate' franchise has solidified its position as the most successful science-fiction programming on television today." OPERATING HIGHLIGHTS * MGM's "Walking Tall" and United Artists' "Saved," released in the second quarter, will be profitable. * Worldwide DVD unit shipments in the quarter increased 11 percent to approximately 34 million. * "Stargate SG-1" began its eighth season with the program's highest ratings ever on the Sci-Fi Channel. The premiere episode was the highest rated series telecast in the history of the Sci-Fi Channel. * MGM Television's new series, "Stargate Atlantis," premiered on the Sci-Fi Channel one week after "Stargate SG-1" and again delivered the Sci-Fi Channel's highest ratings ever. * "Dead Like Me" successfully premiered its second season on Showtime to solid ratings and critical acclaim. * MGM Networks launched a branded channel in Spain in an alliance with Media Park, one of Spain's leading cable television distributors. * In its Pan-Asian alliance with CNBC, MGM Networks expanded to Singapore and Macau. * In May, the Company paid an extraordinary dividend of $8 per share which qualified as a tax-free return of capital to shareholders. 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 Direct. In addition, MGM has ownership interests in international television channels reaching over 100 countries around the globe. For more information on MGM, visit us 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 Quarters and Six Months Ended June 30, 2004 and 2003 Quarters Ended Six Months Ended June 30, June 30, In thousands, except share and per share data (unaudited) 2004 2003 2004 2003 Revenues: Feature films $347,451 $427,487 $756,275 $783,556 Television programming 44,492 50,149 91,076 81,677 Other 14,164 10,066 22,752 17,660 Total revenues $406,107 $487,702 $870,103 $882,893 *EBITDA: Feature films $32,483 $8,421 $ 59,485 $(158) Television programming 12,636 3,103 10,589 661 Other 6,742 7,464 11,984 10,901 General and administration expenses (43,877) (32,462) (87,464) (58,694) EBITDA 7,984 (13,474) (5,406) (47,290) Depreciation and non-film amortization (3,743) (5,013) (7,169) (10,252) Operating income (loss) 4,241 (18,487) (12,575) (57,542) Write-down on investment in cable channels -- (93,059) -- (93,059) Equity in net earnings (losses) of investees (614) (1,211) (1,813) 1,279 Interest expense, net of amounts capitalized (20,752) (18,863) (21,839) (36,812) Interest and other income, net 2,044 3,069 3,989 6,377 Other non-recurring costs (1,173) -- (1,173) -- Loss before provision for income taxes (16,254) (128,551) (33,411) (179,757) Income tax provision (3,412) (5,028) (7,525) (9,644) Net loss $(19,666) $(133,579) $(40,936) $(189,401) Loss per share: Basic and diluted Net loss $(0.08) $(0.55) $(0.17) $(0.77) Weighted average number of common shares outstanding: Basic and diluted 235,961,448 244,807,107 236,803,698 246,628,261 * EBITDA, which is reconciled to operating loss and net loss in the above table, is defined as operating loss before depreciation. The Company believes that EBITDA should be considered in addition to, not as a substitute for or superior to, operating income, net earnings, net cash provided by operating activities and other measures of financial performance prepared in accordance with generally accepted accounting principles ("GAAP"). The Company uses EBITDA as one of many measures to evaluate both the operating performance of its business segments and performance for compensation purposes. MGM believes that EBITDA is also used by many investors, equity analysts and others as a measure of performance to make informed investment decisions. The EBITDA presented may not be comparable to similarly titled measures reported by other companies. Metro-Goldwyn-Mayer Inc. Condensed Consolidated Balance Sheet June 30, 2004 and December 31, 2003 (In thousands, except share data) June 30, December 31, 2004 2003 ASSETS (unaudited) Cash and cash equivalents $39,072 $ 61,894 Accounts and contracts receivable (net of allowance for doubtful accounts of $46,798 and $46,671, respectively) 553,612 615,907 Film and television costs, net 1,889,313 1,788,225 Investments in and advances to affiliates 23,535 24,050 Property and equipment, net 66,991 68,657 Goodwill 516,706 516,706 Other assets 39,201 31,132 $3,128,430 $3,106,571 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Bank and other debt $2,000,235 $813 Accounts payable and accrued liabilities 249,114 234,397 Accrued participants' share 315,937 320,347 Income taxes payable 39,313 37,129 Advances and deferred revenues 96,966 72,908 Other liabilities 159,678 112,606 Total liabilities 2,861,243 778,200 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 shares issued 2,520 2,520 Additional paid-in capital 2,048,095 3,915,777 Accumulated other comprehensive income (loss) (82) 2,046 Deficit (1,548,509) (1,507,573) Less: treasury stock, at cost, 15,560,808 and 7,347,530 shares, respectively (234,837) (84,399) Total stockholders' equity 267,187 2,328,371 $3,128,430 $3,106,571 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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