| Metro-Goldwyn-Mayer, Inc. | |||
| Ticker: | MGM | 2500 Broadway Street | |
| Exchange: | New York Stock Exchange | Santa Monica, CA 90404 | |
| Industry: | Financial (SIC Code 6712) | (310) 449-3000 | |
| # of Employees: | 900 | ||
| Type of Shares: | Common Shares | Filing Date: | 9/11/97 | |
| U.S. Shares: | 7,200,000 | Offer Date: | 11/12/97 | |
| Non-U.S. Shares: | 1,800,000 | Filing Range: | $20.00 - $23.00 | |
| Primary Shares: | 9,000,000 | Offer Price: | $20.00 | |
| Secondary Shares: | 0 | Gross Spread: | $1.15 | |
| Offering Amount: | $193,500,000 | Selling: | $0.67 | |
| Expenses: | - | Reallowance: | $0.10 | |
| Shares Out After: | 65,210,000 |
| Manager | Tier | Phone |
| Merrill Lynch & Co. | Lead Manager | (212) 449-4600 |
| Bear, Stearns & Co. Inc. | Co-manager | (212) 272-4850 |
| Furman Selz Incorporated | Co-manager | (212) 309-8285 |
| J.P. Morgan Securities Inc. | Co-manager | (212) 648-0517 |
| Issuer's Law Firm: | Gibson, Dunn & Crutcher |
| Bank's Law Firm: | O'Melveny & Meyers |
| Auditor: | Arthur Andersen |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 6/30/97 | 6/30/96 | 6/30/97 | ||
| Revenue: | $1,315.13 | $351.01 | $595.13 | Assets: | $1,806.57 |
| Net Income: | $90.54 | -$29.00 | -$103.55 | Curr Assets: | |
| EPS: | Liabilities: | $929.87 | |||
| Prior EPS: | $160.06 | $328.81 | Curr Liabilities: | ||
| Cash Flow/Oper: | $124.68 | -$54.99 | Equity: | $876.71 | |
| Cash Flow/Fin: | -$280.60 | -$277.90 | Cash: | $20.25 | |
| Cash Flow/Inv: | -$280.60 | ||||
| Business Description |
| The company is engaged primarily in the development, production and worldwide distribution of theatrical motion pictures and television programs. The company includes MGM studios, United Artists, Orion Pictures and Goldwyn Entertainment and others. With approximately 4,000 film titles and over 8,200 episodes of television programming, the Company's library (the "Library") constitutes the largest collection of post-1948 feature films in the world. Motion pictures in the Library have won over 185 Academy Awards, including Best Picture Awards for Annie Hall, The Apartment, The Best Years of Our Lives, Dances With Wolves, The Deer Hunter, Hamlet, In the Heat of the Night, Marty, Midnight Cowboy, Platoon, Rain Man, Rocky, Silence of the Lambs, Tom Jones and West Side Story. The Library also includes 17 titles in the James Bond film franchise, five titles in the Rocky film franchise and nine titles in the Pink Panther film franchise. Tracinda Corporation ("Tracinda"), Seven Network Limited ("Seven") and senior management of MGM Studios formed the Company to acquire all of the outstanding capital stock of MGM Studios and its subsidiaries, including UA, in October 1996 for an aggregate consideration of $1.3 billion (the "MGM Acquisition"). Tracinda is wholly-owned by Kirk Kerkorian. Seven is one of the largest television broadcast networks in Australia with stations in five major Australian metropolitan areas and one regional television station. Frank G. Mancuso, Chairman and Chief Executive Officer of MGM Studios since July 1993 and of the Company since its formation, has approximately 35 years of entertainment industry experience. |
| Competition |
| Motion picture production and distribution are highly competitive businesses. The Company faces competition from companies within the entertainment business, as well as alternative forms of leisure entertainment. The Company competes with the other major studios, numerous independent motion picture and television production companies, television networks and pay television systems for the acquisition of literaryproperties, the services of performing artists, directors, producers and other creative and technical personnel and production financing. Numerous organizations with which the Company competes in the motion picture industry have significantly greater financial and other resources than does the Company, while the independent production companies may have less overhead than the Company. Most of the other major studios are part of large diversified corporate groups with a variety of other operations, including television networks and cable channels, which can provide both means of distributing their products and stable sources of earnings that offset the fluctuations in the financial performance of their motion picture and television operations.In addition, the Company's motion pictures compete for audience acceptance and exhibition outlets with motion pictures produced and distributed by other companies. As a result, the success of any of the Company's motion pictures is dependent not only on the quality and acceptance of a particular picture, but also on the quality and acceptance of other competing motion pictures released into the marketplace at or near the same time. The number of films released by the Company's competitors, particularly the other major film studios, in any given period may create an oversupply of product in the market, thereby potentially reducing the Company's share of gross box office admissions and may make it more difficult for the Company's films to succeed.Competition also is intense within the television industry. There are numerous suppliers of television programming, including the networks, the television production divisions of the major studios and independent producers, all of which compete actively for the limited number of available broadcast hours. The Company's programming competes with first-run programming, network reruns and programs produced by local television stations. Competition is also intense in supplying motion pictures and other programming for the pay television and home video markets. Numerous organizations with which the Company competes in the television industry have significantly greater financial and other resources than does the Company. |
| Business Plan |
| The company's goal is to enhance its position as a premier global entertainment content company by maximizing the value of its assets, including the Library and its film and television production units, under the direction of its experienced management team. To achieve this goal, the company intends to: (I) Build and Leverage the Library, (ii) Develop, Produce and Distribute Theatrical Motion Pictures, (iii) Develop, Produce and Distribute Television Programming and (iv) Leverage the MGM Brand Name. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used to reduce indebtedness of the company under the revolving portion of the amended credit facility, for general corporate purposes including the payment of motion picture and television development, production and distribution costs.. |
| Name of Shareholder | % Owned Before | % Owned After |
| Tracinda Corporation | 68.96% | |
| Seven Network Limited | 30.76% |
| Officer Name | Title | Age |
| Frank G. Mancuso | Chairman of the Board, Chief Executive Officer and Director | 64 |
| Michael G. Corrigan | Senior Executive Vice President and Chief Fianncial Officer | 39 |
| David G. Johnson | Senior Executive Vice President and General Counsel | 40 |
| William A. Jones | Senior Executive Vice President and Secretary | 55 |
| A. Robert Pisano | Vice Chairman | 54 |