Commenting on these results, Alex Yemenidjian, Chairman and CEO, said: MGM’s near-term outlook is very bright. Our home video and television distribution operations, which provide MGM with predictable and growing cash flow, had an excellent second quarter. And our international channels, a key component of our long-term growth, made meaningful progress during the quarter.

Vice Chairman and COO Chris McGurk added, In 2001, MGM has had three films open at number one at the box office, including Legally Blonde, which was MGM’s biggest comedy debut ever. It has now generated over $50 million at the box office and will be extremely profitable. We believe that our balanced portfolio of films for the remainder of 2001 and for 2002 will deliver strong performance.

Second quarter revenues were $274.9 million compared to $294.5 million in the prior year period. Revenues in the second quarter of 2000 included over $67 million from the home video release of The World is Not Enough.

EBITDA (Earnings before interest, taxes, depreciation and amortization) was a loss of $35.9 million compared to positive EBITDA of $24.1 million last year. The EBITDA decline was principally due to two disappointing films in the quarter. The change to new industry-wide accounting standards also reduced EBITDA by $6.3 million in the quarter.

Net income was a loss of $61.3 million compared to positive net income of $6.3 million in last year’s second quarter.

Earnings per share were a loss of $0.26 compared to a positive $0.03 in the second quarter of 2000.

Library revenues grew 30% in the quarter.

DVD sales have increased 33% in the first half of 2001, even with the release of The World Is Not Enough in the second quarter of 2000.

In Worldwide Television, Stargate SG-1 started its fifth season on Showtime on June 29th. The series will also launch year four in syndication in September.

The Outer Limits is in its seventh year of first run episodes, premiering for the first time on the Sci-Fi Channel. The series is also in its sixth year in syndication.

In domestic distribution, MGM and United Paramount Network (UPN) announced an innovative partnership whereby UPN will broadcast 57 MGM feature films during Saturday afternoons starting this fall. MGM will sell advertising for the time period.

MGM Networks launched a channel in Israel on June 1st.

MGM Networks also debuted on the basic tier for Sky Mexico on June 15th to over 600,000 subscribers.

Channels in Brazil, Mexico, Argentina and Chile recorded significant ratings increases and Argentina recorded significant subscriber growth.

SOURCE: COMPANY PRESS RELEASE