Management’s Discussion and Analysis of Financial Condition and Results of Operations20
RESULTS OF OPERATIONS
At December 31, 2004, our operations consisted of 11 wholly-owned casino resorts
and 50% investments in two other casino resorts, including:
Las Vegas, Nevada: Bellagio, MGM Grand Las Vegas, The Mirage, TI, New York-
New York, Boardwalk, and Monte Carlo (50% owned).
Other: The Primm Valley Resorts (Buffalo Bill’s, Primm Valley
Resort and Whiskey Pete’s) in Primm, Nevada; Beau Rivage
in Biloxi, Mississippi; MGM Grand Detroit; Borgata (50%
owned) in Atlantic City, New Jersey.
We operate in one segment, the operation of casino r esorts, which includes offering
gaming, hotel, dining, entertainment, retail and other resort amenities. Slightly over
half of our net revenues are derived from gaming activities, a lower percentage than
many of our competitors, as our operating philosophy is to provide a complete
resort experience for our guests, including non-gaming amenities which command
premium prices based on their quality.
We generate a majority of our net revenues and operating income from our Las
Vegas Strip resorts. In 2004, over 75% of our net revenues and operating income
was generated by wholly-owned Las Vegas Strip resorts. We believe that we own the
premier casino resorts on the Las Vegas Strip, and a main focus of our strategy is to
continually reinvest in these resorts to maintain that competitive advantage. Our
concentration on the Las Vegas Strip exposes us to certain risks outside of our 
control, such as competition from other Las Vegas Strip resorts as well as new or
expanded resorts in Las Vegas, including Wynn Las Vegas expected to open in 2005,
and the impact from potential expansion of gaming in California. This concentra-
tion also exposes us to risks related to tourism and the general economy, including
national and global economic conditions and terrorist attacks or other global events.
Key Performance Indicators
As a resort-based company, our operating results are highly dependent on the 
volume of customers at our resorts, which in turn impacts the price we can charge
for our hotel rooms and other amenities. We also generate a significant portion of
our operating income from the high-end gaming segment, which can cause 
variability in our results. Key performance indicators related to revenue are:
• Gaming revenue indicators – table games drop and slot handle (volume 
indicators); “win” or “hold” percentage, which is not fully controllable by us. Our
normal table games win percentage is in the range of 18% to 22% of table games
drop and our normal slot win percentage is in the range of 6% to 7% of slot
handle; 
• Hotel revenue indicators – hotel occupancy (volume indicator); average daily rate
(“ADR”, price indicator); revenue per available room (“REVPAR”), a summary
measure of hotel results, combining ADR and occupancy rate.
Most of our revenue is essentially cash-based, through customers wagering with cash
or paying for non-gaming services with cash or credit cards. Our resorts, like many
in the industry, generate significant operating cash flow. Our industry is capital
intensive and we rely heavily on the ability of our resorts to generate 
operating cash flow to repay debt financing, fund maintenance capital 
expenditures and provide excess cash for future development.
Our results of operations do not tend to be seasonal in natur e, though a variety of
factors can affect the results of any interim period, including the timing of major
Las Vegas conventions, the amount and timing of marketing and special events for
our high-end customers, and the level of play during major holidays, including New
Year and Chinese New Year.