Notes to Consolidated Financial Statements60
At December 31, 2004, there is a $6 million valuation allowance provided on 
certain New Jersey state net operating loss carryforwards and other New Jersey state
deferred tax assets because management believes these assets do not meet the “more
likely than not” criteria for recognition under SFAS 109. Management believes all
other deferred tax assets are more likely than not to be realized because of the future
reversal of existing taxable temporary differences and expected future taxable
income. Accordingly, there are no other valuation allowances provided at 
December 31, 2004.
The Company is evaluating the impact of provisions of the American Jobs Creation
Act of 2004 (the “Act”) that provide for a special one-time tax deduction of 85 
percent on certain repatriated earnings of foreign subsidiaries. Additional guidance
from Congress and/or the United States T reasury Department will be necessary for
the Company to complete its evaluation, as it is not clear at this time whether the
Act will provide a benefit to the Company. The Company will complete the 
evaluation as promptly as practicable following the issuance of such guidance and
adjust taxes accordingly, if necessary.
The Company has not yet repatriated the net proceeds from the sale of MGM
Grand Australia pending the evaluation. Nonetheless, the Company provided in
2004 deferred U.S. income taxes of $11 million on the basis that such pr oceeds
would be repatriated without the benefit of the 85 per cent one-time deduction.
Such amount was included in the provision for income taxes on discontinued 
operations for 2004. The Company considered the earnings of its Australia 
operations permanently reinvested prior to the sale of such operations.
If guidance is issued that indicates the planned repatriation qualifies for the 
one-time deduction, the Company will recognize a tax benefit of approximately 
$7 million as part of continuing operations in the quarter in which such guidance is
issued. If no such guidance is issued within the applicable timeframe, then the
Company will attempt to permanently reinvest the proceeds in another foreign
jurisdiction, such as Macau. In such case, the Company would recognize a tax 
benefit of $11 million as part of continuing operations in the quarter in which the
reinvestment is made. The Company currently does not have a plan to reinvest the
proceeds in such manner.
NOTE 10 — COMMITMENTS AND CONTINGENCIES
Leases. The Company leases real estate and various equipment under operating
and, to a lesser extent, capital lease arrangements. Certain real estate leases provide
for escalation of rent based upon a specified price index and/or based upon 
periodic appraisals.
At December 31, 2004, the Company was obligated under non-cancelable operat-
ing leases and capital leases to make future minimum lease payments as follows:
Operating Capital
Years Ending December 31 (In thousands) Leases Leases
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,809 $ 1,996
2006. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,311 1,973
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,131 1,514
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,962 524
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,937 127
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332,239 —
Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 373,389 6,134
Less: Amounts representing interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,377)
Total obligations under capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,757