MGM projects $420m for DAD, and $900m in free cash flow through 2006

Reuters/Variety are reporting that Yahoo Chief Executive Officer Alex Yemenidjian said MGM expects "Die Another Day", which was released in November, to take in $420 million at global box offices before ending its run. He broke that figure down into $160 million in the United States and Canada and the rest in international markets.

"It will do way over $100 million in net profit for us before it goes into the film library," he said.

He attributed two-thirds of the fourth quarter upside MGM has enjoyed to the Bond film, but added that the movie`s solid box office was likely already figured into the stock price.

MGM also expects to generate some $900 million in free cash flow through 2006. That figure assumes MGM hits its target of a 13 percent internal rate of return on the films it makes, but if MGM breaks even on making movies, it expects free cash to reach $600 million in the same period from the sale of movies on DVD, licensing, TV production and other businesses, Yemenidjian said at a Salomon Bros. investor conference in southern California.

The figures are up from previously targeted numbers of $800 million in free cash flow based on the 13 percent internal rate of return and $400 million if MGM breaks even on films.

MGM defines free cash flow as its operating cash less film and TV production expenses and interest on its debt.

Thanks to Rumpole for the alert.

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