<PAGE>
REGISTRATION FILED PURSUANT TO RULE 424(b)(2) AND 424(b)(5)
REGISTRATION NUMBER 333-35950
REGISTRATION NUMBER 333-82775
Prospectus Supplement
(to Prospectus dated May 5, 2000)
[LOGO OF METRO GOLDWYN MAYER INC.]
METRO-GOLDWYN-MAYER INC.
5,000,000
Shares of
Common Stock
----------------
We are a premier global entertainment content company, one of only seven
major film and television studios worldwide. We develop, produce and
distribute worldwide theatrical motion pictures and television programs. Our
subsidiaries include Metro-Goldwyn-Mayer Studios Inc., United Artists
Corporation and Orion Pictures Corporation.
The shares of common stock offered hereby are being offered and sold
directly by Metro-Goldwyn-Mayer Inc. to institutions and other financially
sophisticated investors. The purchase price for the shares offered hereby will
be negotiated with each of the purchasers. We will not pay any underwriter's
discount or broker's commissions in connection with this offering. The shares
offered hereby will be sold in more than one transaction. The offering is not
conditioned on a minimum number of shares being sold. We expect to deliver the
shares we sell three business days after the date we enter into a sales
agreement.
Our common stock trades on the New York Stock Exchange under the symbol
"MGM." On August 8, 2000, the closing price of our common stock was $25 13/16
per share.
----------------
Investment in these securities involves a high degree of risk. See "Risk
Factors" beginning on page S-3.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has determined whether this prospectus supplement or the
accompanying prospectus are truthful or complete. Nor have they made, nor will
they make, any determination as to whether anyone should buy these securities.
Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is August 9, 2000.
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TABLE OF CONTENTS
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Prospectus Supplement
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Page
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Risk Factors............................................................... S-3
Use of Proceeds............................................................ S-8
Price Range of Common Stock................................................ S-8
Dividend Policy............................................................ S-9
Capitalization............................................................. S-9
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Page
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Plan of Distribution....................................................... S-10
Legal Matters.............................................................. S-10
Experts.................................................................... S-10
Forward-Looking Statements................................................. S-10
Where You Can Find More Information........................................ S-11
</TABLE>
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Prospectus
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About this Prospectus...................................................... 2
Forward-Looking Statements................................................. 2
Risk Factors............................................................... 3
Use of Proceeds............................................................ 8
Price Range of Common Stock................................................ 8
Dividend Policy............................................................ 8
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<TABLE>
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Page
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The Company................................................................ 9
Description of Common Stock................................................ 11
Plan of Distribution....................................................... 12
Legal Matters.............................................................. 13
Experts.................................................................... 13
Where You Can Find More Information........................................ 14
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You should rely only on the information incorporated by reference or
provided in this prospectus supplement and the accompanying prospectus. We
have not authorized anyone else to provide you with different information. We
are offering shares of our common stock and seeking offers to buy shares of
our common stock only in jurisdictions where offers and sales are permitted.
You should not assume that the information in this prospectus supplement and
the accompanying prospectus is accurate as of any date other than the date on
the front of these documents regardless of the time of delivery of this
prospectus supplement or any sale of shares of our common stock.
S-2
<PAGE>
RISK FACTORS
Before you invest in our securities, you should be aware that there are
various risks, including those described below. We urge you to carefully
consider these risk factors, together with all of the other information
included in this prospectus supplement and the accompanying prospectus as well
as the information incorporated by reference in this prospectus supplement and
the accompanying prospectus, before you decide to invest in our securities.
We have had significant losses, and we may have future losses.
We have not reported an operating profit for any fiscal year since 1988,
and while controlled by former management in 1991, our subsidiary MGM Studios
was the subject of an involuntary bankruptcy. We cannot assure you when, or
if, we will have a profitable year.
The accounting standards our financial statements are governed by have
changed.
In June 2000, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 139, which, effective for financial
statements for fiscal years beginning after December 15, 2000, rescinds
Statement of Financial Accounting Standards No. 53. The companies that were
previously subject to the requirement of Statement of Financial Accounting
Standards No. 53 shall now follow the guidance in American Institute of
Certified Public Accountants Statement of Position 00-2, "Accounting by
Producers or Distributors of Films," issued in June 2000. Statement of
Position 00-2 establishes new accounting and reporting standards for all
producers and distributors that own or hold the rights to distribute or
exploit films. Statement of Position 00-2 provides that the cumulative effect
of changes in accounting principles caused by its adoption should be included
in the determination of net income in conformity with Accounting Principles
Board Opinion No. 20, "Accounting Changes." We intend to adopt the statement
of position beginning January 1, 2001. We are currently quantifying the effect
of this new pronouncement on the financial statements. Although we have not
yet quantified the impact of the adoption of Statement of Position 00-2, it is
expected to result in a reduction in film costs with a corresponding one-time
non-cash charge to earnings. We anticipate that the new rules will impact our
results of operations for the foreseeable future.
We are adversely affected by gaps in our motion picture production schedule.
Our revenues and operating results have been and may continue to be
adversely affected by the change in ownership of MGM Studios in 1996 and by
recent management changes. Such changes may result in a degree of uncertainty
among top artistic and creative talent about the viability of projects, which
could result in projects first being offered to our competitors. Additionally,
management changes have resulted in delays in commencement of production of
motion pictures. We released nine motion pictures between August 1, 1996 and
August 1, 1997, most of which were produced by others, ten motion pictures in
1999, and we expect to release less than ten motion pictures in 2000.
We require outside financing to meet our anticipated cash requirements.
Our operations are capital intensive and our capacity to generate cash from
operations is presently insufficient to meet our anticipated cash
requirements. Accordingly, we must obtain substantial sources of outside
financing. Such financing may not be available in sufficient amounts for us to
implement our business plan or may be available only on terms which are
disadvantageous to our stockholders.
Our cash flow in 1999 was adversely affected by the following factors,
among others:
. Our slate of motion pictures released during the first half of 1999
performed below expectations;
. We paid PolyGram N.V. $235 million to acquire certain of the PolyGram
film libraries;
S-3
<PAGE>
. We paid Warner Home Video $225 million, plus interest, under our
agreement to terminate Warner Home Video's right to distribute our
product in the home video market;
. We incurred corporate restructuring expenses;
. We incurred approximately $9 million in costs to integrate the PolyGram
library into our operations and transition to domestic home video self-
distribution; and
. We funded 50 percent of the expenses of MGM Networks Latin America,
approximately $6.1 million.
Under our current strategy and business plan, we will continue to require a
substantial amount of cash for the following reasons:
. We will continue to make substantial investments in the production of
new feature films and television programs; and
. We may make additional investments to develop new distribution channels
to further exploit our motion picture library; however, we will evaluate
the level of our investments in light of our available capital and
changing market conditions.
If there are cash shortfalls, cash conserving measures may adversely affect
our long term prospects.
If necessary in order to manage our cash needs, we could delay or alter
production or release schedules or reduce our aggregate investment in new film
and television production costs. We cannot assure you that any of these steps
would be adequate or timely, or that acceptable arrangements could be reached
with third parties if necessary. In addition, although these steps would
improve our short-term cash flow and, in the case of partnering, reduce our
exposure should a motion picture perform below expectations, these steps could
reduce our long term cash flow and adversely affect our results of operations.
Our credit facility contains restrictive covenants.
While our credit facility was recently amended to eliminate restrictive
covenants relative to strategic investments and acquisitions, as well as off-
balance sheet film financings, it still contains various covenants limiting
indebtedness, dividends and capital expenditures and requires maintenance of
certain financial ratios. We cannot assure you that we will be able to comply
with these or other covenants or conditions in the future, or that we will
generate sufficient cash flow to repay our indebtedness. We further cannot
assure you that, in the event the need arises, we will be able to obtain
additional financing or to refinance our indebtedness on terms acceptable to
us, or at all.
Our substantial leverage could adversely affect our financial health.
We are highly leveraged. Our substantial indebtedness could have important
adverse consequences to you. For example, it could:
. require us to dedicate a substantial portion of our cash flow to the
repayment of our indebtedness, reducing the amount of cash flow
available to fund film and television production and other operating
expenses;
. limit our ability to obtain additional financing, if necessary, for
operating expenses;
. place us at a disadvantage compared to competitors with less debt or
greater financial resources;
. limit our flexibility in planning for, or reacting to, downturns in our
business, in our industry or in the economy in general; and
. limit our ability to pursue strategic acquisitions and other business
opportunities that may be in our best interests.
S-4
<PAGE>
Our revenues and results of operations may fluctuate significantly.
Our revenues and results of operations are dependent significantly upon the
commercial success of the motion pictures and television programming that we
distribute, which cannot be predicted with certainty, as well as the timing of
our releases. Accordingly, our revenues and results of operations may
fluctuate significantly from period to period, and the results of any one
period may not be indicative of the results for any future periods.
In addition, entertainment industry accounting practices may accentuate
fluctuations in our operating results. In accordance with generally accepted
accounting principles and industry practice, we amortize film and television
programming costs using the "individual-film-forecast" method. Under this
accounting method, we amortize film and television programming costs for each
film or television program based on the following ratio:
Revenue earned by title in the current period
----------------------------------
Estimated total revenues by title
We regularly review, and revise when necessary, our total revenue estimates
on a title-by-title basis. This may result in a change in the rate of
amortization and/or a write-down of the film or television asset to net
realizable value. Results of operations in future years depend upon our
amortization of our film and television costs. Periodic adjustments in
amortization rates may significantly affect these results. The likelihood of
our reporting of losses is increased because the industry's accounting method
requires the immediate recognition of the entire loss where it is expected
that a motion picture or television program will not recover our investment.
On the other hand, the profit of a successful motion picture or television
program must be recognized over the entire revenue stream expected to be
generated by the individual picture or television program.
We may have lower revenues as a result of our motion picture production
strategy.
Based on our current business plan, MGM's annual release slate may include
proportionately fewer large budget "event" motion pictures than the current
release slates of the other major studios. We also contemplate a stronger
focus on pictures which will appeal to a younger demographic and a greater
number of co-productions than our prior strategy. We cannot assure you that
our strategic approach will enable us to produce commercially successful
motion pictures. Additionally, our current motion picture strategy involves
co-producing or co-financing a substantial portion of our motion pictures.
These co-production arrangements could reduce our long-term cash flow from
pictures which perform above expectations.
We may not be able to meet our production goals and schedule.
The production, completion and distribution of motion pictures are subject
to numerous uncertainties, including financing requirements, the availability
of desired talent and quality material and the release schedule of the motion
pictures of our competitors. We cannot assure you that any of the pictures
scheduled for release in the remainder of 2000 or future periods will be
completed or released on schedule or budget, or at all.
We are limited in our ability to exploit our library.
Our rights to the titles in our library vary. In some cases we have only
the right to distribute titles in certain media and territories for a limited
term. Our rights in approximately 35 percent of our titles are limited in
time. Our rights with respect to approximately 20 percent of our titles will
expire before 2010. While in the past we have generally been able to renew
expiring rights on acceptable terms, we cannot assure you that we will
continue to be able to do so in the future. In accordance with industry
practice, for purposes of calculating the size of our library, we include any
title in which we have any distribution rights.
Additionally, a prior management granted long-term domestic and major
international television licenses covering a substantial portion of our
library, in exchange for pre-paid fees. A cross-section of our library is
subject to one or more of these licenses, including substantially all of the
MGM/UA titles produced prior to 1990,
S-5
<PAGE>
which have been licensed in the U.S. and Europe, and approximately 40 percent
of the Orion and PolyGram titles, which have been licensed in Europe. Until
these agreements expire and the rights revert to us, we expect contributions
to earnings and cash flow from these markets to continue to be below those of
our competitors for similar products. We cannot assure you that our sales or
profitability will increase after these agreements expire.
We may not be able to realize the anticipated benefits of acquisitions.
In January 1999, we acquired over 1,300 feature film titles in the PolyGram
film libraries. In addition, we may consider strategic acquisitions as
opportunities arise, subject to the obtaining of any necessary financing.
Acquisitions involve numerous risks, including diversion of our management's
attention away from our operating activities. We cannot assure you that we
will not encounter unanticipated problems or liabilities relating to any of
our previous acquisitions or the integration of an acquired company's
operations, nor can we assure you that we will realize the anticipated
benefits of any past or future acquisitions.
We face risks relating to the international distribution of our product.
Because we have historically derived approximately 40 percent of our
revenues from non-U.S. sources, our business is subject to risks inherent in
international trade, many of which are beyond our control. These risks
include:
. changes in laws and policies affecting trade, investment and taxes,
including laws and policies relating to the repatriation of funds and to
withholding taxes;
. differing degrees of protection for intellectual property;
. the instability of foreign economies and governments; and
. fluctuating foreign exchange rates.
Until October 31, 2000, we will distribute our motion pictures in
theatrical markets outside the U.S. and Canada through United International
Pictures B.V., or "UIP," a partnership among the company, Paramount Pictures
Corporation and Universal Studios, Inc. Effective November 1, 2000, we will
withdraw from UIP and our international theatrical distribution will be
conducted through Fox Filmed Entertainment. While our cost structure is lower,
we cannot assure that we will realize the anticipated revenue enhancements of
our withdrawal from UIP or the early termination of our agreement with Warner
Home Video.
Production of first-run syndicated television programming may involve
financial risks.
Our television products have historically been first-run syndicated
television programming that is generally licensed based on a pilot episode
that we finance. If an insufficient number of stations license the
programming, our pilot costs will not be recouped. There is also financial
exposure to us after the programming is licensed to the extent that
advertising revenues and/or license fees we receive are not sufficient to
cover production costs. In addition, we may have certain financial obligations
to the producer of a first-run syndicated series if we cancel production prior
to commencement of production for any broadcast season for which the series
was licensed.
Risks relating to implementing our branded cable and satellite programming
channels.
We may consider strategic opportunities to create branded cable and
satellite programming channels. We cannot assure you that we will have the
financing that may be necessary for such acquisitions or investments, that we
will consummate any such transactions or that we will be able to realize any
anticipated benefits from any such transactions.
S-6
<PAGE>
Advances in technology may create alternate forms of entertainment.
The entertainment industry in general, and the motion picture industry in
particular, continue to undergo significant changes, primarily due to
technological developments. Due to this rapid growth of technology and
shifting consumer tastes, we cannot accurately predict the overall effect that
such changes may have on the potential revenue from and profitability of
feature-length motion pictures and television programming.
Some of our competitors have greater financial resources than we do.
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, that can provide both a means of distributing their products
and stable sources of earnings and cash flows that offset fluctuations in the
financial performance of their motion picture and television operations. The
number of films released by our competitors, particularly the other major film
studios, in any given period may create an oversupply of product in the
market, thereby potentially reducing our share of gross box office admissions
and making it more difficult for our films to succeed. In addition, television
networks are now producing more programs internally and thus may reduce their
demand for outside programming.
The Tracinda Group owns a majority of our common stock and has the power to
elect our board of directors and influence our affairs.
Tracinda and one of its affiliates, which we refer to as the Tracinda
Group, beneficially own 179,276,977 shares, approximately 86.8 percent of our
outstanding common stock (approximately 84.7 percent when the shares offered
hereby are sold). In the aggregate, the Tracinda Group and our directors and
executive officers beneficially own approximately 87.3 percent of our
outstanding common stock (approximately 85.3 percent if all of the shares
offered hereby are sold). Our common stock does not have cumulative voting
rights and, since we anticipate that the Tracinda Group will continue to own
greater than 50 percent of our outstanding common stock for the foreseeable
future, it will have the ability to elect our entire board of directors and
determine the outcome of other matters submitted to our stockholders, such as
the approval of significant transactions, and otherwise to influence our
affairs.
Our common stock has a relatively small public "float."
Of the 206,638,742 shares of our common stock outstanding as of August 8,
2000, approximately 26,190,000 shares are owned by persons other than the
Tracinda Group and our executive officers and directors. Without a
significantly larger public float, our common stock will be less liquid than
the common stock of companies with broader public ownership and, as a result,
the trading prices for our common stock may be more volatile. Among other
things, trading of a relatively small volume of our common stock may have a
greater impact on the trading price for our stock than would be the case if
our public float were larger.
Future sales of shares of the common stock could decrease its market price.
We will have approximately 211,638,742 shares of our common stock
outstanding after giving effect to this offering, of which approximately
180,448,863 are "restricted" securities under Rule 144 of the Securities Act
and/or held by directors, officers or holders of ten percent or more of our
outstanding common stock. We have also granted, as of June 30, 2000, options
to purchase a total of 24,119,057 shares of our common stock. Furthermore, we
have granted to Tracinda, and certain other holders of our common stock or
outstanding options, registration rights with respect to the shares they own
or that we may issue to them. Possible or actual sales of any of these shares,
particularly by our directors and officers, under Rule 144 or otherwise, may
in the future decrease the price of shares of our common stock.
S-7
<PAGE>
USE OF PROCEEDS
We plan to use the net proceeds from the offering (approximately $124.5
million if the shares are sold at an assumed offering price of $25.00 per
share) for general corporate purposes.
PRICE RANGE OF COMMON STOCK
The common stock is listed on the NYSE and trades under the symbol "MGM."
The following table sets forth for the quarters indicated the high and low
composite per share closing sales prices as reported by the NYSE.
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High Low
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<S> <C> <C>
1998
First Quarter.......................................... $24 3/16 $17 3/4
Second Quarter......................................... 26 1/2 21 15/16
Third Quarter.......................................... 22 1/2 13 7/8
Fourth Quarter......................................... 13 3/4 8
1999
First Quarter.......................................... $13 9/16 $10 3/8
Second Quarter......................................... 18 5/8 12 11/16
Third Quarter.......................................... 21 5/8 16 7/8
Fourth Quarter......................................... 25 1/8 15 1/2
2000
First Quarter.......................................... $28 1/16 $21 11/16
Second Quarter......................................... 30 3/8 23 15/16
Third Quarter (through August 8)....................... 26 3/16 23 1/2
</TABLE>
The last reported sales price of the common stock on the NYSE on August 8,
2000 was $25 13/16 per share. As of August 8, 2000, there were more than 2,000
beneficial holders of our common stock.
DIVIDEND POLICY
We have not paid any dividends to date on the common stock and currently
intend to retain any earnings to fund the operation and expansion of our
business and to service and repay our debt. Therefore, we do not intend to pay
cash dividends on our common stock for the foreseeable future. Furthermore, as
a holding company with no independent operations, our ability to pay dividends
will depend upon the receipt of dividends or other payments from our
subsidiaries. In addition, our primary credit facility contains financial
covenants that restrict our ability to pay dividends. Subject to the
foregoing, our Board of Directors has the sole discretion to pay cash
dividends.
S-8
<PAGE>
CAPITALIZATION
The following table sets forth our consolidated cash and capitalization as
of June 30, 2000 (1) on a historical basis and (2) as adjusted to give effect
to this offering as if the foregoing had occurred as of June 30, 2000, with an
assumed offering price of $25.00 per share, with estimated expenses of $500,000
and the application of the estimated net proceeds therefrom as described under
"Use of Proceeds."
<TABLE>
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As of June 30, 2000
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Actual As Adjusted
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(unaudited)
(in thousands, except share data)
<S> <C> <C>
Cash....................................... $ 263,686 $ 388,186
================ ================
Debt:
Credit facility:
Term loans............................... $ 700,000 $ 700,000
Revolving credit facility................ -- --
Other borrowings........................... 13,884 13,884
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Total debt............................. 713,884 713,884
---------------- ----------------
Stockholders' equity:
Preferred stock, $.01 par value per share,
25,000,000 shares authorized;
none issued -- --
Common stock, $.01 par value per share,
500,000,000 shares authorized;
206,626,858 shares issued and
outstanding;
211,626,858 shares issued and
outstanding,
as adjusted............................. 2,066 2,116
Additional paid-in capital................ 3,058,757 3,183,207
Deficit................................... (804,997) (804,997)
Accumulated other comprehensive income.... 658 658
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Total stockholders' equity................. 2,256,484 2,380,984
---------------- ----------------
Total capitalization................... $ 2,970,368 $ 3,094,868
================ ================
</TABLE>
S-9
<PAGE>
PLAN OF DISTRIBUTION
We are offering shares of our common stock directly to institutions and
other financially sophisticated accredited investors at negotiated prices. No
underwriter, broker or finder is being used by us in connection with this
offering. Therefore, we will not pay any underwriter's discounts, broker's
commissions or finder's fees in connection with this offering. The shares
offered hereby will be sold to the purchasers in more than one transaction.
This offering is not conditioned upon a minimum number of shares being sold.
We expect to deliver the shares we sell three business days after the date we
enter into a sales agreement.
LEGAL MATTERS
The validity of the issuance of the securities offered hereby will be
passed upon for us by Christensen, Miller, Fink, Jacobs, Glaser, Weil &
Shapiro, LLP, Los Angeles, California.
EXPERTS
The audited consolidated financial statements and schedules for the years
ended December 31, 1999, 1998 and 1997, which are incorporated by reference
into this prospectus supplement and elsewhere in the registration statement
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are incorporated by
reference herein in reliance upon the authority of said firm as experts in
giving said reports.
FORWARD-LOOKING STATEMENTS
This prospectus supplement and the accompanying prospectus contain or
incorporate by reference forward-looking statements, within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act. Forward-looking statements typically can be identified by the use of
forward-looking words, such as "may," "will," "could," "project," "believe,"
"anticipate," "expect," "estimate," "continue," "potential," "plan," "intend,"
"forecast" and the like. These statements appear in a number of places in this
prospectus supplement and the accompanying prospectus and the information
incorporated by reference and include statements regarding our current
intentions, plans, strategies, beliefs and expectations.
Forward-looking statements do not guarantee future performance and involve
risks and uncertainties that could cause actual results to differ materially
from those anticipated. The information contained in this prospectus
supplement and the accompanying prospectus, including the information
contained in "Risk Factors" beginning on p. S-3, or incorporated by reference,
identifies important factors that could cause such differences.
S-10
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC, in accordance with the Securities Exchange Act of
1934. You may read and copy any document we file at the SEC's public reference
rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
rooms. Our SEC filings are also available to the public from the SEC's web
site at: http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus
supplement and the accompanying prospectus the information we file with them,
which means that we can disclose important information to you by referring to
our filed SEC documents. The information incorporated by reference is
considered to be part of this prospectus supplement and the accompanying
prospectus. Information we file with the SEC after the date of this document
will update and supersede the information in this prospectus supplement and
the accompanying prospectus. We incorporate by reference the documents listed
below and any future filings made with the SEC under Sections 13(a), 13(c),
14, or 15(d) of the Securities Exchange Act of 1934 until this offering is
completed:
(1) Our Annual Report on Form 10-K for the year ended December 31, 1999;
(2) Our Proxy Statement filed with the Commission on March 31, 2000;
(3) Our Quarterly Reports on Form 10-Q for the periods ended March 31 and
June 30, 2000; and
(4) The description of capital stock contained in Item 1 of our
Registration Statement on Form 8-A, filed with the SEC on October 14,
1997, as amended.
We have also filed a Registration Statement on Form S-3 with the SEC for
the securities offered by this prospectus supplement and the accompanying
prospectus. This prospectus supplement and the accompanying prospectus do not
contain all of the information set forth in the registration statement. You
should read the registration statement for further information about our
common stock and us. The registration statement can be found in the SEC's
public reference room or on the SEC's website referred to above, and you may
request a copy of any of these filings, at no cost, by writing or calling
William A. Jones, Senior Executive Vice President and Secretary of the
company, at:
Metro-Goldwyn-Mayer Inc.
2500 Broadway Street
Santa Monica, California 90404
(310) 449-3000
You can find additional information by visiting our website at:
http://www.mgm.com.
S-11
<PAGE>
PROSPECTUS
METRO-GOLDWYN-MAYER INC.
$750,000,000
Common Stock
----------------
We may use this prospectus to offer and sell from time to time, separately
or together, shares of our common stock. These securities will have a total
initial public offering price not to exceed $750,000,000 and will be offered
and sold at prices and on terms to be determined at the time of sale. The
terms of any offering will be set forth in one or more prospectus supplements
to this prospectus.
The prospectus supplement will also set forth, among other things, the
total number of shares offered, the offering price and the terms of the
offering. Our common stock trades on the New York Stock Exchange under the
symbol "MGM." On May 3, 2000, the closing price of our common stock was $27
3/4 per share.
As will be described in more detail in any prospectus supplement, the
securities may be offered through an underwriter or underwriting syndicates
represented by one or more managing underwriters, or through dealers. The
securities may also be sold directly or through agents to investors. See "Plan
of Distribution."
This prospectus may not be used to consummate sales of offered securities
unless accompanied by a prospectus supplement.
----------------
Investment in these securities involves a high degree of risk. See "Risk
Factors" beginning on page 3.
----------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.
The date of this prospectus is May 5, 2000.
<PAGE>
TABLE OF CONTENTS
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Page
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About this Prospectus...................................................... 2
Forward-Looking Statements................................................. 2
Risk Factors............................................................... 3
Use of Proceeds............................................................ 8
Price Range of Common Stock................................................ 8
Dividend Policy............................................................ 8
The Company................................................................ 9
Description of Common Stock................................................ 11
Plan of Distribution....................................................... 12
Legal Matters.............................................................. 13
Experts.................................................................... 13
Where You Can Find More Information........................................ 14
</TABLE>
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ABOUT THIS PROSPECTUS
This prospectus is part of a Registration Statement that we filed with the
Securities and Exchange Commission using a "shelf" registration process. Under
this shelf process, we may from time to time over approximately the next two
years, sell any combination of the securities described in this prospectus in
one or more offerings up to a total dollar amount of $750,000,000. This
prospectus provides you with a general description of the securities we may
offer. Each time we sell securities, we will provide a prospectus supplement
that will contain specific information about the terms of that offering. The
prospectus supplement also may add, update or change information contained in
this prospectus. You should read both this prospectus and any prospectus
supplement together with additional information described under the heading
"Where You Can Find More Information" on page below.
You should rely only on the information or representations incorporated by
reference or provided in this prospectus and in the accompanying prospectus
supplement. We have not authorized anyone to provide you with different
information. You may obtain copies of the Registration Statement, or any
document which we have filed as an exhibit to the Registration Statement or to
any other SEC filing, either from the SEC or from our Secretary as described
below. We are not making an offer of these securities in any state where the
offer is not permitted. You should not assume that the information in this
prospectus or in the accompanying prospectus supplement is accurate as of any
date other than the dates printed on the front of each such document.
FORWARD-LOOKING STATEMENTS
This prospectus contains or incorporates by reference forward-looking
statements, within the meaning of Section 27A of the Securities Act and
Section 21E of the Securities Exchange Act. Forward-looking statements
typically can be identified by the use of forward-looking words, such as
"may," "will," "could," "project," "believe," "anticipate," "expect,"
"estimate," "continue," "potential," "plan," "intend," "forecast" and the
like. These statements appear in a number of places in this prospectus and the
information incorporated by reference and include statements regarding our
current intentions, plans, strategies, beliefs and expectations.
Forward-looking statements do not guarantee future performance and involve
risks and uncertainties that could cause actual results to differ materially
from those anticipated. The information contained in this prospectus,
including the information contained in "Risk Factors" beginning on p. 3, or
incorporated by reference, identifies important factors that could cause such
differences.
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RISK FACTORS
Before you invest in our securities, you should be aware that there are
various risks, including those described below. We urge you to carefully
consider these risk factors, together with all of the other information
included in this prospectus and the information incorporated in this
prospectus by reference, before you decide to invest in our securities.
We have had significant losses, and we may have future losses.
We have not reported an operating profit for any fiscal year since 1988,
and while controlled by former management in 1991, our subsidiary MGM Studios
was the subject of an involuntary bankruptcy. We cannot assure you when, or
if, we will have a profitable year.
The accounting standards our financial statements are governed by are expected
to change.
The Financial Accounting Standards Board (known as FASB) is expected to
adopt certain changes that will alter reporting by motion picture companies.
FASB Statement No. 53, which previously allowed wide latitudes for booking
movie revenues and amortization, is expected to be rescinded shortly. The new
regulations will impose numerous changes to reporting, and many motion picture
companies will take a one-time, non-cash charge of significant proportions to
conform to the new rules.
We anticipate that the new rules will have a significant impact on our
results of operations for the foreseeable future. We are currently calculating
the financial impact of these new rules.
We are adversely affected by gaps in our motion picture production schedule.
Our revenues and operating results have been and may continue to be
adversely affected by the change in ownership of MGM Studios in 1996 and by
recent management changes. Such changes may result in a degree of uncertainty
among top artistic and creative talent about the viability of projects, which
could result in projects first being offered to our competitors. Additionally,
management changes have resulted in delays in commencement of production of
motion pictures. We released nine motion pictures between August 1, 1996 and
August 1, 1997, most of which were produced by others, ten motion pictures in
1999, and we expect to release less than ten motion pictures in 2000.
We require outside financing to meet our anticipated cash requirements.
Our operations are capital intensive and our capacity to generate cash from
operations is presently insufficient to meet our anticipated cash
requirements. Accordingly, we must obtain substantial sources of outside
financing. Such financing may not be available in sufficient amounts for us to
implement our business plan or may be available only on terms which are
disadvantageous to our stockholders.
Our cash flow in 1999 was adversely affected by the following factors,
among others:
. Our slate of motion pictures released during the first half of 1999
performed below expectations;
. We paid PolyGram N.V. $235 million to acquire certain of the PolyGram
film libraries;
. We paid Warner Home Video $225 million, plus interest, under our
agreement to terminate Warner Home Video's right to distribute our
product in the home video market;
. We incurred corporate restructuring expenses;
. We incurred approximately $9 million in costs to integrate the PolyGram
library into our operations and transition to domestic home video self-
distribution; and
. We funded 50 percent of the expenses of MGM Networks Latin America,
approximately $6.1 million.
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Under our current strategy and business plan, we will continue to require a
substantial amount of cash for the following reasons:
. We will continue to make substantial investments in the production of
new feature films and television programs; and
. We may make additional investments to develop new distribution channels
to further exploit our motion picture library; however, we will evaluate
the level of our investments in light of our available capital and
changing market conditions.
If there are cash shortfalls, cash conserving measures may adversely affect
our long term prospects.
If necessary in order to manage our cash needs, we could delay or alter
production or release schedules or reduce our aggregate investment in new film
and television production costs. We cannot assure you that any of these steps
would be adequate or timely, or that acceptable arrangements could be reached
with third parties if necessary. In addition, although these steps would
improve our short-term cash flow and, in the case of partnering, reduce our
exposure should a motion picture perform below expectations, these steps could
reduce our long term cash flow and adversely affect our results of operations.
Our credit facility contains restrictions which limit our operating
flexibility.
Our credit facility contains various covenants, including certain
limitations on indebtedness, dividends and capital expenditures and
maintenance of certain financial ratios. We cannot assure you that we will be
able to comply with these or other covenants or conditions in the future, or
that we will generate sufficient cash flow to repay our indebtedness. We
further cannot assure you that, in the event the need arises, we will be able
to obtain additional financing or to refinance our indebtedness on terms
acceptable to us, or at all.
Our substantial leverage could adversely affect our financial health.
We are highly leveraged. Our substantial indebtedness could have important
adverse consequences to you. For example, it could:
. require us to dedicate a substantial portion of our cash flow to the
repayment of our indebtedness, reducing the amount of cash flow
available to fund film and television production and other operating
expenses;
. limit our ability to obtain additional financing, if necessary, for
operating expenses;
. place us at a disadvantage compared to competitors with less debt or
greater financial resources;
. limit our flexibility in planning for, or reacting to, downturns in our
business, in our industry or in the economy in general; and
. limit our ability to pursue strategic acquisitions and other business
opportunities that may be in our best interests.
Our revenues and results of operations may fluctuate significantly.
Our revenues and results of operations are dependent significantly upon the
commercial success of the motion pictures and television programming that we
distribute, which cannot be predicted with certainty, as well as the timing of
our releases. Accordingly, our revenues and results of operations may
fluctuate significantly from period to period, and the results of any one
period may not be indicative of the results for any future periods.
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In addition, entertainment industry accounting practices may accentuate
fluctuations in our operating results. In accordance with generally accepted
accounting principles and industry practice, we amortize film and television
programming costs using the "individual-film-forecast" method. Under this
accounting method, we amortize film and television programming costs for each
film or television program based on the following ratio:
Revenue earned by title in the current period
----------------------------------
Estimated total revenues by title
We regularly review, and revise when necessary, our total revenue estimates
on a title-by-title basis. This may result in a change in the rate of
amortization and/or a write-down of the film or television asset to net
realizable value. Results of operations in future years depend upon our
amortization of our film and television costs. Periodic adjustments in
amortization rates may significantly affect these results. The likelihood of
our reporting of losses is increased because the industry's accounting method
requires the immediate recognition of the entire loss where it is expected
that a motion picture or television program will not recover our investment.
On the other hand, the profit of a successful motion picture or television
program must be recognized over the entire revenue stream expected to be
generated by the individual picture or television program.
We may have lower revenues as a result of our motion picture production
strategy.
Based on our current business plan, MGM's annual release slate may include
proportionately fewer large budget "event" motion pictures than the current
release slates of the other major studios. We also contemplate a stronger
focus on pictures which will appeal to a younger demographic and a greater
number of co-productions than our prior strategy. We cannot assure you that
our strategic approach will enable us to produce commercially successful
motion pictures. Additionally, our current motion picture strategy involves
co-producing or co-financing a substantial portion of our motion pictures.
These co-production arrangements could reduce our long-term cash flow from
pictures which perform above expectations.
We may not be able to meet our production goals and schedule.
The production, completion and distribution of motion pictures are subject
to numerous uncertainties, including financing requirements, the availability
of desired talent and quality material and the release schedule of the motion
pictures of our competitors. We cannot assure you that any of the pictures
scheduled for release in the remainder of 2000 or future periods will be
completed or released on schedule or budget, or at all.
We are limited in our ability to exploit our library.
Our rights to the titles in our library vary. In some cases we have only
the right to distribute titles in certain media and territories for a limited
term. Our rights in approximately 35 percent of our titles are limited in
time. Our rights with respect to approximately 20 percent of our titles will
expire before 2010. While in the past we have generally been able to renew
expiring rights on acceptable terms, we cannot assure you that we will
continue to be able to do so in the future. In accordance with industry
practice, for purposes of calculating the size of our library, we include any
title in which we have any distribution rights.
Additionally, a prior management granted long-term domestic and major
international television licenses covering a substantial portion of our
library, in exchange for pre-paid fees. A cross-section of our library is
subject to one or more of these licenses, including substantially all of the
MGM/UA titles produced prior to 1990, which have been licensed in the U.S. and
Europe, and approximately 40 percent of the Orion and PolyGram titles, which
have been licensed in Europe. Until these agreements expire and the rights
revert to us, we expect contributions to earnings and cash flow from these
markets to continue to be below those of our competitors for similar products.
We cannot assure you that our sales or profitability will increase after these
agreements expire.
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We may not be able to realize the anticipated benefits of acquisitions.
In January 1999, we acquired over 1,300 feature film titles in the PolyGram
film libraries. In addition, we may consider strategic acquisitions as
opportunities arise, subject to the obtaining of any necessary financing.
Acquisitions involve numerous risks, including diversion of our management's
attention away from our operating activities. We cannot assure you that we
will not encounter unanticipated problems or liabilities relating to any of
our previous acquisitions or the integration of an acquired company's
operations, nor can we assure you that we will realize the anticipated
benefits of any past or future acquisitions.
We face risks relating to the international distribution of our product.
Because we have historically derived approximately 40 percent of our
revenues from non-U.S. sources, our business is subject to risks inherent in
international trade, many of which are beyond our control. These risks
include:
. changes in laws and policies affecting trade, investment and taxes,
including laws and policies relating to the repatriation of funds and to
withholding taxes;
. differing degrees of protection for intellectual property;
. the instability of foreign economies and governments; and
. fluctuating foreign exchange rates.
Until October 31, 2000, we will distribute our motion pictures in
theatrical markets outside the U.S. and Canada through United International
Pictures B.V., or "UIP," a partnership among the company, Paramount Pictures
Corporation and Universal Studios, Inc. Effective November 1, 2000, we will
withdraw from UIP and our international theatrical distribution will be
conducted through Fox Filmed Entertainment. While our cost structure is lower,
we cannot assure that we will realize the anticipated revenue enhancements of
our withdrawal from UIP or the early termination of our agreement with Warner
Home Video.
Production of first-run syndicated television programming may involve
financial risks.
First-run syndicated television programming is generally licensed based on
a pilot episode that we finance. If an insufficient number of stations license
the programming, our pilot costs will not be recouped. There is also financial
exposure to us after the programming is licensed to the extent that
advertising revenues and/or license fees we receive are not sufficient to
cover production costs. In addition, we may have certain financial obligations
to the producer of a first-run syndicated series if we cancel production prior
to commencement of production for any broadcast season for which the series
was licensed.
Risks relating to implementing our branded cable and satellite programming
channels.
We may consider strategic opportunities to create branded cable and
satellite programming channels. We cannot assure you that we will have the
financing that may be necessary for such acquisitions or investments, that we
will consummate any such transactions or that we will be able to realize any
anticipated benefits from any such transactions.
Advances in technology may create alternate forms of entertainment.
The entertainment industry in general, and the motion picture industry in
particular, continue to undergo significant changes, primarily due to
technological developments. Due to this rapid growth of technology and
shifting consumer tastes, we cannot accurately predict the overall effect that
such changes may have on the potential revenue from and profitability of
feature-length motion pictures and television programming.
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Some of our competitors have greater financial resources than we do.
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, that can provide both a means of distributing their products
and stable sources of earnings and cash flows that offset fluctuations in the
financial performance of their motion picture and television operations. The
number of films released by our competitors, particularly the other major film
studios, in any given period may create an oversupply of product in the
market, thereby potentially reducing our share of gross box office admissions
and making it more difficult for our films to succeed. In addition, television
networks are now producing more programs internally and thus may reduce their
demand for outside programming.
The Tracinda Group owns a majority of our common stock and has the power to
elect our board of directors and influence our affairs.
Tracinda and one of its affiliates, which we refer to as the Tracinda
Group, beneficially own 179,276,977 shares, approximately 89.0 percent of our
outstanding common stock. In the aggregate, the Tracinda Group and our
directors and executive officers beneficially own approximately 89.8 percent
of our outstanding common stock. Our common stock does not have cumulative
voting rights and, since we anticipate that the Tracinda Group will continue
to own greater than 50 percent of our outstanding common stock for the
foreseeable future, it will have the ability to elect our entire board of
directors and determine the outcome of other matters submitted to our
stockholders, such as the approval of significant transactions, and otherwise
to influence our affairs.
Our common stock has a relatively small public "float."
Of the 201,557,214 shares of our outstanding common stock, only
approximately 21,303,000 shares are owned by persons other than the Tracinda
Group and our executive officers and directors. Without a significantly larger
public float, our common stock will be less liquid than the common stock of
companies with broader public ownership and, as a result, the trading prices
for our common stock may be more volatile. Among other things, trading of a
relatively small volume of our common stock may have a greater impact on the
trading price for our stock than would be the case if our public float were
larger.
Future sales of shares of the common stock could decrease its market price.
We have approximately 201,557,214 shares of our common stock outstanding,
of which approximately 180,355,145 are "restricted" securities under Rule 144
of the Securities Act and/or held by directors, officers or holders of ten
percent or more of our outstanding common stock. We have also granted, as of
March 31, 2000, options to purchase a total of 23,712,023 shares of our common
stock. Furthermore, we have granted to Tracinda, and certain other holders of
our common stock or outstanding options, registration rights with respect to
the shares they own or that we may issue to them. Possible or actual sales of
any of these shares, particularly by our directors and officers, under Rule
144 or otherwise, may in the future decrease the price of shares of our common
stock.
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USE OF PROCEEDS
Unless otherwise specified in a prospectus supplement, we plan to use
substantially all of the net proceeds from the sale of the offered securities
for general corporate purposes.
PRICE RANGE OF COMMON STOCK
The common stock is listed on the NYSE and trades under the symbol "MGM."
The following table sets forth for the quarters indicated the high and low
composite per share closing sales prices as reported by the NYSE.
<TABLE>
<CAPTION>
High Low
---- ----
<S> <C> <C>
1998
First Quarter.......................................... $24 3/16 $17 3/4
Second Quarter......................................... 26 1/2 21 15/16
Third Quarter.......................................... 22 1/2 13 7/8
Fourth Quarter......................................... 13 3/4 8
1999
First Quarter.......................................... $13 9/16 $10 3/8
Second Quarter......................................... 18 5/8 12 11/16
Third Quarter.......................................... 21 5/8 16 7/8
Fourth Quarter......................................... 25 1/8 15 1/2
2000
First Quarter.......................................... $28 1/16 $21 11/16
Second Quarter (through May 3)......................... 30 3/8 23 15/16
</TABLE>
The last reported sales price of the common stock on the NYSE on May 3,
2000 was $27 3/4 per share. As of May 3, 2000, there were more than 2,000
beneficial holders of our common stock.
DIVIDEND POLICY
We have not paid any dividends to date on the common stock and currently
intend to retain any earnings to fund the operation and expansion of our
business and to service and repay our debt. Therefore, we do not intend to pay
cash dividends on our common stock for the foreseeable future. Furthermore, as
a holding company with no independent operations, our ability to pay dividends
will depend upon the receipt of dividends or other payments from our
subsidiaries. In addition, our primary credit facility contains financial
covenants that restrict our ability to pay dividends. Subject to the
foregoing, our Board of Directors has the sole discretion to pay cash
dividends.
8
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THE COMPANY
Overview
We develop, produce and distribute worldwide theatrical motion pictures and
television programs. Our subsidiaries include Metro-Goldwyn-Mayer Studios
Inc., United Artists Corporation and Orion Pictures Corporation. We are one of
only seven major film and television studios worldwide. Our library contains
over 4,100 theatrically released feature film titles and 8,900 television
episodes and is the largest collection of post-1948 feature films in the
world. Films in our library have won over 200 Academy Awards(R), including the
Best Picture Award for Annie Hall, The Apartment, The Best Years of Our Lives,
Dances with Wolves, Hamlet, In the Heat of the Night, Marty, Midnight Cowboy,
Platoon, Rain Man, Rocky, Silence of the Lambs, Tom Jones and West Side Story.
Our library also includes 21 titles in the James Bond film franchise, five
titles in the Rocky film franchise and nine titles in the Pink Panther film
franchise.
As used in this prospectus, the terms "we," "our," "us," "MGM" and "the
company" refer to Metro-Goldwyn-Mayer Inc. and our subsidiaries unless the
context indicates otherwise.
Business Strategy
Our goal is to become a fully-integrated global entertainment content
company, thereby maximizing the value of our assets, including our film and
television library and our film and television production and distribution
units. To achieve this goal we seek to:
Build and Leverage Our Library. We plan to build and leverage our film and
television library by:
. Producing new motion pictures and television episodes;
. Aggressively marketing and repackaging our library's titles;
. Developing new distribution channels;
. Capitalizing on developments in technology;
. Further penetrating emerging international markets; and
. Incentivizing our employees to drive growth in sales of our library's
titles.
Create Branded Cable and Satellite Programming Channels. We believe we can
create significant value by utilizing our library and current production to
establish MGM branded cable and satellite channels. We have been actively
exploring strategic alternatives to gain carriage for our proposed channels.
Increase Film and Television Production While Improving Our Risk
Profile. We intend to increase production in a financially disciplined manner
by:
. Tightly controlling development and production expenditures;
. Involving members of senior management from all areas of our company in
the greenlighting process for films;
. Aggressively seeking production agreements and/or co-financing partners
for our pictures and television product;
. Entering into production agreements and joint ventures with key
producers of motion pictures and television product;
. Increasing our focus on the production of commercially successful motion
pictures which appeal to a younger demographic; and
. Using our film library as a proven source for sequels and remakes and
the expansion of certain well-tested, familiar film franchises.
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We intend to produce or co-produce and distribute ten to 15 motion pictures
annually through MGM Pictures across a variety of genres. Through UA Films, we
also intend to distribute annually an additional seven to ten specialty motion
pictures that will have substantially lower average costs and will be produced
mainly by third parties.
We plan to develop, produce and distribute television programs focusing on
low financial risk formats, such as pre-clearing a television series for
distribution prior to committing to development expenditures, as well as joint
ventures, co-productions and other partnering arrangements for certain of our
series.
Increase Distribution Revenues. We have taken steps to obtain greater
flexibility in distributing our own product to enable us to realize additional
revenue opportunities while reducing the costs associated with distribution.
In 1999 we terminated our agreement with Warner Home Video so that, on
February 1, 2000, we regained full control over the home video exploitation of
our films. We have actively planned the transition of our international
distribution from Warner Home Video and United International Pictures or "UIP"
to Fox to gain more control over our international distribution and to
maximize our revenue opportunities.
We plan to increase distribution revenues by:
. Self-distributing in the U.S. and Canada our library, as well as all
motion pictures produced by MGM Pictures and UA Films;
. Distributing films that we co-produce with a third party in those
territories where we have distribution rights and capabilities; and
. Distributing motion pictures produced by others.
Capitalize On A Well Recognized Brand Name. We believe that the MGM name
and lion logo are among the most recognized in the world. We intend to
capitalize on the value inherent in our name and logo through the distribution
of branded programming and the development of consumer products.
Streamline Operations. We have taken steps to make our operating process
more efficient in the following ways:
. Consolidating overhead across the MGM Pictures and UA production units;
and
. Consolidating and centralizing operating and corporate functions.
We intend to continue to pursue our goal of becoming an integrated global
entertainment content company. In pursuit of this goal, we may consider
various strategic alternatives, such as business combinations with companies
with strengths complementary to ours, other acquisitions and joint ventures,
as opportunities arise. The nature, size and structure of any such transaction
could require us to seek additional financing. Acquisitions and other
strategic alternatives, however, involve numerous risks, including diversion
of management's attention away from our operative activities. We cannot assure
you that we will not encounter unanticipated problems or liabilities with
respect to any acquisitions that have been or may be completed by MGM or with
the integration of an acquired company's operations with those of MGM, and we
cannot assure you that the anticipated benefits of any acquisitions and
alternatives that have been, or will be, completed by us will be achieved.
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DESCRIPTION OF COMMON STOCK
Our authorized common stock consists of 500,000,000 shares of common stock.
All authorized shares of common stock have a par value of $0.01 per share and
are entitled to one vote per share on all matters submitted to a vote of
stockholders. In the event of a liquidation, dissolution or winding up of the
company, the holders of the common stock are entitled to share ratably in all
assets remaining after all liabilities and the liquidation preference
attributable to any outstanding preferred stock have been paid. The holders of
the common stock have no pre-emptive rights or cumulative voting rights and no
rights to convert their common stock into any other securities.
As of March 31, 2000, there were outstanding 201,557,214 shares of the
common stock. As of March 31, 2000, there were reserved for issuance upon the
exercise of options 30,156,251 shares of the common stock, of which options
for 23,868,274 shares are outstanding, 8,265,007 of which are vested and
exercisable or will become vested and exercisable within 60 days.
The transfer agent and registrar for our common stock is ChaseMellon
Shareholder Services, LLC, 400 S. Hope Street, Los Angeles, California 90071.
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PLAN OF DISTRIBUTION
We may sell the securities being offered hereby:
. directly to one or more purchasers;
. through agents;
. to or through one or more dealers;
. to or through one or more underwriters; or
. through a combination of any such methods of sales.
The distribution of such securities pursuant to any prospectus supplement
may occur from time to time in one or more transactions either:
. at a fixed price or prices which may be changed;
. at market prices prevailing at the time of sale;
. at prices related to such prevailing market prices; or
. at negotiated prices.
Offers to purchase the securities being offered hereby may be solicited
directly by us or by agents designated by us from time to time. Any such
agent, who may be deemed to be our "underwriter" as that term is defined in
the Securities Act, involved in the offer or sale of such securities will be
named, and any commissions payable by us to such agent will be set forth, in
the applicable prospectus supplement.
If a dealer is utilized in the sale of such securities, we will sell such
securities to the dealer, as principal. The dealer, who may be deemed to be an
"underwriter" as that term is defined in the Securities Act, may then resell
such securities to the public at varying prices to be determined by such
dealer at the time of resale.
If an underwriter is, or underwriters are, utilized in the sale, we will
execute an underwriting agreement with such underwriters at the time of sale
to them and the names of the underwriters will be set forth in the applicable
prospectus supplement, which will be used by the underwriters to make resales
of such shares to the public. In connection with the sale of such securities,
such underwriters may be deemed to have received compensation from us in the
form of underwriting discounts or commissions and may also receive commissions
from purchasers of such securities for whom they may act as agents.
Underwriters may sell such shares to or though dealers, and such dealers may
receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or commissions from the purchasers for whom they may act
as agents. Any underwriting compensation paid by us to underwriters in
connection with the offering of such securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in the applicable prospectus supplement.
Underwriters, dealers, agents, dealer managers, and other persons,
including the Tracinda group, may be entitled, under agreements that may be
entered into with us, to indemnification by us against certain civil
liabilities, including the liabilities under the Securities Act, or to
contribution with respect to payments which they may be required to make in
respect thereof. Underwriters, dealers, dealer managers and agents may engage
in transactions with, or perform services for us in the ordinary course of
business.
If so indicated in the applicable prospectus supplement, we will authorize
underwriters, dealers, dealer managers, or other persons to solicit offers by
certain institutions to purchase from us securities offered hereby pursuant to
contracts providing for payment and delivery on a future date or dates set
forth in the applicable
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prospectus supplement. Institutions with which such contacts may be made may
include, but are not limited to, commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others. The obligations of any purchaser under any such
contract will not be subject to any conditions except that (a) the purchase of
such securities shall not at the time of delivery be prohibited under the laws
of the jurisdiction to which such purchaser is subject and (b) if such
securities are also being sold to underwriters, we shall have sold to such
underwriters the securities offered hereby which are not sold for delayed
delivery. The underwriters, dealers, dealer managers and such other persons
will not have any responsibility in respect to the validity or performance of
such contracts. The prospectus supplement relating to such contracts will set
forth the price to be paid for such securities pursuant to such contracts, the
commissions payable for solicitation of such contracts and the date or dates
in the future for delivery of such shares pursuant to such contracts.
The anticipated date of delivery of securities offered hereby will be set
forth in the applicable prospectus supplement relating to each offer.
LEGAL MATTERS
The validity of the issuance of the securities offered hereby will be
passed upon for us by Christensen, Miller, Fink, Jacobs, Glaser, Weil &
Shapiro, LLP, Los Angeles, California.
EXPERTS
Our consolidated financial statements and schedules for the years ended
December 31, 1999, 1998 and 1997 incorporated by reference into this
prospectus and elsewhere in the registration statement have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are incorporated by reference herein in
reliance upon the authority of said firm as experts in giving said reports.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC, in accordance with the Securities Exchange Act of
1934. You may read and copy any document we file at the SEC's public reference
rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
rooms. Our SEC filings are also available to the public from the SEC's web
site at: http://www.sec.gov.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with them, which means that we can disclose important
information to you by referring to our filed SEC documents. The information
incorporated by reference is considered to be part of this prospectus.
Information we file with the SEC after the date of this document will update
and supersede the information in this prospectus. We incorporate by reference
the documents listed below and any future filings made with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until this offering is completed:
(1) Our Annual Report on Form 10-K for the year ended December 31, 1999;
and
(2) The description of capital stock contained in Item 1 of our
Registration Statement on Form 8-A, filed with the SEC on October 14,
1997, as amended.
We have also filed a Registration Statement on Form S-3 with the SEC for
the securities offered by this prospectus. This prospectus does not contain
all of the information set forth in the registration statement. You should
read the registration statement for further information about our common stock
and us. The registration statement can be found in the SEC's public reference
room or on the SEC's website referred to above, and you may request a copy of
any of these filings, at no cost, by writing or calling William A. Jones,
Senior Executive Vice President and Secretary of the company, at:
Metro-Goldwyn-Mayer Inc.
2500 Broadway Street
Santa Monica, California 90404
(310) 449-3000
You can find additional information by visiting our website at:
http://www.mgm.com.
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[LOGO OF METRO GOLDWYN MAYER INC.]
METRO-GOLDWYN-MAYER INC.
5,000,000 Shares of Common Stock
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PROSPECTUS SUPPLEMENT
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