UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934*
Amendment No. 2
Metro-Goldwyn-Mayer Inc.
- ------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $.01 par value
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Title of Class of Securities)
591610100
- ------------------------------------------------------------------------------
(CUSIP Number)
==============================================================================
Richard E. Sobelle, Esq.
Tracinda Corporation
4835 Koval Lane
Las Vegas, Nevada 89109
(702) 737-8060
==============================================================================
(Name, Address and Telephone Number of Persons Authorized to Receive Notices
and Communications)
July 24, 1998
- ------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b) (3) or (4), check the
following box |_|.
Check the following box if a fee is being paid with this statement
|_|. (A fee is not required only if the reporting person: (1) has a
previous statement on file reporting beneficial ownership of more than five
percent of the class of securities described in Item 1; and (2) has filed
no amendment subsequent thereto reporting beneficial ownership of five
percent or less of such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Act (however, see the Notes).
SCHEDULE 13D
CUSIP No. Page 1 of Pages 6
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Tracinda Corporation
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
BK
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada
NUMBER OF 7 SOLE VOTING POWER
SHARES 42,856,251
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH N/A
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 42,856,251
10 SHARED DISPOSITIVE POWER
N/A
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
42,856,251
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
65.0%
14 TYPE OF REPORTING PERSON*
CO
SCHEDULE 13D
CUSIP No. Page 2 of Pages 6
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
Kirk Kerkorian
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [x]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
N/A
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.A.
NUMBER OF 7 SOLE VOTING POWER
SHARES 42,856,251
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH N/A
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH 42,856,251
10 SHARED DISPOSITIVE POWER
N/A
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
42,856,251
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES*
Not applicable
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
65.0%
14 TYPE OF REPORTING PERSON*
IN
This Amendment No. 2 amends and supplements the Statement on Schedule 13D
filed on November 18, 1997, as amended on or about November 25, 1997 (as so
amended, the "Schedule 13D"), relating to the common stock, par value $.01
per share (the "Shares"), of Metro-Goldwyn-Mayer Inc., a Delaware
corporation (the "Company"), previously filed by Tracinda Corporation
("Tracinda") and Mr. Kirk Kerkorian. Capitalized terms used and not defined
in this Amendment have the meanings set forth in the Schedule 13D.
1. Item 3 of the Schedule 13D is hereby amended to add the following
information:
Since the filing of Amendment No. 1 to the Schedule 13D on or about
November 25, 1997, in November and December of 1997, Tracinda acquired an
aggregate of 459,763 additional Shares. The purchase price for such Shares
($9,934,895.27) is being funded from funds provided to Tracinda pursuant to
the Credit Agreement. A copy of the Credit Agreement has been filed as an
exhibit to the Schedule 13D and is incorporated herein by reference.
Tracinda has pledged such shares pursuant to the Credit Agreement and a
related Stock Pledge Agreement.
2. Item 4 of the Schedule 13D is hereby amended to add the following
information:
On July 24, 1998, the Company issued a press release, a copy of which
is attached hereto as Exhibit 7.11, announcing that the Board of Directors
of the Company has approved the raising of $250 million in additional
equity capital and that the Board intends to evaluate alternative forms of
such financing and other options while continuing to pursue its previously
stated goal of becoming an integrated entertainment company. The press
release also states that among these alternatives is a possible rights
offering, pursuant to which the Company's existing stockholders, including
Tracinda, would receive transferable rights to purchase shares of Common
Stock of the Company on a pro rata basis. Tracinda has advised the Company
that it supports the equity financing efforts. In addition, Tracinda has
advised the Company that it would subscribe, at a minimum, for its pro rata
share of the $250 million in additional equity capital.
If there is a rights offering, Tracinda would agree to acquire any
shares not subscribed to by other shareholders. Seven Network Limited
("Seven"), the holder of approximately 25% of the outstanding shares of
Common Stock of the Company, has advised the Company and Tracinda that
although it supports the equity financing it does not intend to invest in
the equity financing. However, Tracinda and Seven have agreed in principle
that for a period of up to one year after completion of any such financing,
Seven will have the right to acquire from Tracinda, for an amount equal to
Tracinda's cost, a number of shares of Common Stock equal to the number of
shares that Seven would have acquired if it had subscribed for its pro rata
share of the $250 million in equity capital.
3. Item 5 of the Schedule 13D is hereby amended to add the following
information:
(a) Tracinda and Mr. Kerkorian are the beneficial owners of 42,856,251
Shares or approximately 65.0% of the Shares outstanding as of April 3,
1998, based upon the number of Shares outstanding as reported in the
Company's Proxy Statement dated April 17, 1998.
(b) Mr. Kerkorian has the sole power to vote or to direct the vote and
the sole power to dispose or direct the disposition of the 459,763
additional Shares purchased by Tracinda.
4. Item 6 of the Schedule 13D is hereby amended to add the following
information:
The 459,763 Shares purchased by Tracinda have been pledged pursuant to
the Credit Agreement.
See also response to Item 4 in this Amendment No. 2.
5. Item 7 of the Schedule 13D is hereby amended to add the following
information:
Exhibit 7.11 Press Release issued by the Company on July 24, 1998.
6. Except as specifically provided herein, this Amendment does not modify
any of the information previously reported on the Schedule 13D.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: July 27, 1998
TRACINDA CORPORATION
a Nevada corporation
By:/s/ Anthony L. Mandekic
--------------------------
Name: Anthony L. Mandekic
Title: Secretary/Treasurer
KIRK KERKORIAN
By:/s/ Anthony L. Mandekic
--------------------------
Anthony L. Mandekic
Attorney-in-Fact
Exhibit 7.11
PRESS RELEASE
For immediate release Contact: Craig Parsons
July 24, 1998 (310) 449-3660
METRO-GOLDWYN-MAYER REPORTS 1998 SECOND QUARTER RESULTS;
PLANS TO RAISE $250 MILLION IN EQUITY CAPITAL
Santa Monica, CA - Metro-Goldwyn-Mayer Inc. (NYSE:MGM) today reported
results for the second quarter and six months ended June 30, 1998. Prior
year results are not comparable due to the acquisition of Orion Pictures
Corporation and certain of its subsidiaries in July 1997. The Company also
announced that its Board of Directors has approved the raising of $250
million in additional equity capital and intends to evaluate alternative
forms of such financing and other options while continuing to pursue its
previously stated objective of becoming an integrated global entertainment
company. Among these alternatives is a possible rights offering, pursuant
to which its existing stockholders would receive transferable rights to
purchase shares of the Common Stock of the Company.
MGM's principal stockholders, Tracinda Corporation and Seven Network
Ltd, have advised the Company that they support the equity financing
efforts. In addition, Tracinda has advised the Company that it would
subscribe, at a minimum, for its pro rata share of the $250 million in
equity capital. If there is a rights offering, other shareholders would
have the opportunity to participate on a similar basis and Tracinda would
agree to acquire any shares not subscribed to by other shareholders. Seven
Network has advised that it does not intend to invest in the equity
financing. However, Tracinda and Seven Network have advised the Company
that they have agreed in principle that for a period of up to one year
after completion of the financing, Seven Network will have the right to
acquire from Tracinda, for an amount equal to Tracinda's cost, a number of
shares of Common Stock equal to the number of shares that Seven Network
would have acquired if it had subscribed for its pro rata share of the $250
million in equity capital. Tracinda and Seven Network currently own 65% and
25%, respectively, of the outstanding Common Stock of the Company.
The Company is seeking this proposed capital infusion as a result of
several factors. First, the Company is making substantial investments that
are more extensive than previously anticipated in connection with new
television production. This new television production consists of
additional commitments from Showtime Networks for 44 new episodes of MGM's
Stargate SG-1 for a total of 88 episodes, 32 new episodes of The Outer
Limits for a total of 122 episodes, and 22 new episodes of Dead Man's Gun
for a total of 44 episodes; an additional 13 episodes of The Magnificent
Seven for CBS for a total of 23 episodes; two new seasons (44 episodes) of
Flipper: The New Adventures for PAX NET for a total of 88 episodes; and a
fourth season (130 episodes) of LAPD: Life on the Beat in syndication. MGM
will have two new animated series in syndication this fall - The Lionhearts
and RoboCop: Alpha Commando.
Secondly, although the Company's Tomorrow Never Dies and The Man In
The Iron Mask have performed better than anticipated, other recent films
have been materially below expectations. While the timing of cash receipts
is affected by these individual performances, the Company expects to
realize its planned film and television revenues in the aggregate from
these films. Furthermore, the Company's recent sales experience in
television syndication and home video markets indicates it will realize
cash from these sources more slowly than originally anticipated.
During the six months ended June 30, 1998, the Company accelerated
production of new films in anticipation of an industry strike since
averted. At June 30, the Company had a total of nine films for which
principal photography was completed or which were scheduled for completion
by the end of July.
As a result of the impact of all of these factors, the Company's
outstanding bank debt at June 30 was $1.145 billion under its $1.3 billion
credit facility. The Company is seeking requisite amendments to certain
financial covenants that will become applicable later this year in its
principal credit facility. While the Company believes that it will be able
to negotiate these amendments, no assurances can be given in this regard.
For the 1998 second quarter ended June 30, 1998, EBITDA (earnings
before interest, taxes, depreciation and amortization) reflected a loss of
$28.0 million, while the net loss for the period was $55.0 million, or $.84
per share, based on 65.8 million weighted average shares outstanding.
Revenues for the quarter ended June 30, 1998 were $279.5 million. The
company released three new feature films domestically and one
internationally during the period.
EBITDA for the 1998 second quarter reflected a writedown related to
certain feature films in release during the quarter, as well as litigation
and other expenses. These costs were partially offset by profit
contributions from television programming and other businesses.
For the six months ended June 30, 1998, EBITDA was a loss of $20.8
million, while the net loss was $73.6 million, or $1.12 per share, based on
65.8 million weighted average shares outstanding. Revenues were $596.0
million for the six-month 1998 period, during which the Company released
eight new feature films domestically and three new films internationally.
During the six months, the Company continued to invest in creating new
assets, specifically accelerating film production and additional television
programming that aggregated $125 million net of amortization at June 30,
1998.
If the financing takes the form of a rights offering or other public
sale of securities, a registration statement will be filed with the
Securities and Exchange Commission. This press release shall not constitute
an offer to sell or the solicitation of an offer to buy securities of the
Company, nor shall there by any offer, solicitation or sale of such
securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to the registration or qualification of such offer,
solicitation or sale under the securities laws of such jurisdiction. Any
public offering of securities will be made only by means of a prospectus.
Metro-Goldwyn-Mayer Inc. is actively engaged in the worldwide
production and distribution of entertainment product, including motion
pictures, television programming, home video, interactive media, music,
licensed merchandise, a 4,000-title film library, a 6,700-title home video
library, and a significant television library. The company's operating
units include MGM Pictures, United Artists Pictures, Orion Pictures,
Goldwyn Films, MGM Worldwide Television Group, MGM Distribution Co., MGM
Home Entertainment and Consumer Products Group, MGM Music, and MGM
Interactive, among others. For more information on MGM, visit the 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, the
successful completion of the $250 million financing, the receipt of the
consent of the Company's lenders to the requisite amendments to the
Company's principal credit facility, future competitive and market
conditions, whether the company's products achieve customer acceptance,
future business decisions, and other factors 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.
###
<TABLE>
Metro-Goldwyn-Mayer Inc.
Condensed Consolidated Statement of Operations
(Amounts in Thousands, Except Share Data)
-----------------------------------------
<CAPTION>
Quarter Ended June 30, Six Months Ended June 30,
1998 1997 1998 1997
------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Feature films ......... $ 217,160 $ 128,249 $ 471,297 $ 296,197
Television programs ... 47,093 20,134 105,839 47,914
Other ................. 15,281 5,002 18,858 6,903
------------ ------------ ------------ ------------
Total revenues .......... $ 279,534 $ 153,385 $ 595,994 $ 351,014
============ ============ ============ ============
EBITDA:
Feature films ......... $ (14,953) $ 22,540 $ 18,103 $ 48,546
Television programs ... 4,572 (1,343) 9,417 (3,215)
Other ................. 6,472 (6,533) (1,639) (12,229)
------------ ------------ ------------ ------------
EBITDA before general
and administration .... (3,909) 14,664 25,881 33,102
expenses
General and
administration expenses (24,081) (14,592) (46,729) (31,904)
------------ ------------ ------------ ------------
EBITDA .................. (27,990) 72 (20,848) 1,198
Depreciation and non-film
amortization .......... (5,631) (3,547) (10,844) (7,057)
------------ ------------ ------------ ------------
Operating loss .......... (33,021) (3,475) (31,692) (5,859)
Interest expense, net of
amounts capitalized ... (20,174) (9,583) (38,428) (20,599)
Interest and other income
(expense), net ........ 1,070 (242) 1,745 1,388
------------ ------------ ------------
Loss before provision for
income taxes .......... (52,725) (13,300) (68,375) (25,070)
Income tax provision .... (2,269) (1,512) (5,262) (3,935)
------------ ------------ ------------ ------------
Net loss ................ $ (54,994) $ (14,812) $ (73,637) $ (29,005)
============ ============ ============ ============
Basic and diluted loss
per share ............. $ (.84) $ (.88) $ (1.12) $ (1.73)
Weighted average number
of common shares ...... 65,790,698 16,810,509 65,781,329 16,766,426
outstanding
- -------------------
* Share and per share information has been retroactively restated to give
effect to the conversion of the previously outstanding preferred stock
into common stock and a subsequent stock split, both completed on
November 18, 1997.
* Results from operations for the 1998 period include the results of Orion
Pictures Corporation, which was acquired on July 10, 1997.
</TABLE>
