Management’s Discussion and Analysis of Financial Condition and Results of Operations 21
Overall Outlook
We have invested heavily in our existing operations in 2003 and 2004, and expect
to continue to do so on a targeted basis in 2005. Our Las Vegas Strip resorts require
ongoing capital investment to maintain their competitive advantages. We believe
the investments in additional non-gaming amenities we made in 2003 and 2004
have enhanced our ability to generate increased visitor volume and allowed us to
charge premium prices for our amenities.
The most likely significant factors affecting operating results at our existing resorts
in 2005 will be the expected continued strength of the leisure and convention travel
segments, the expansion of Bellagio and the opening of KÀ and other amenities at
MGM Grand Las Vegas, and new competition from Wynn Las Vegas on the Las
Vegas Strip. Various lodging market observers, such as PricewaterhouseCoopers 
and Smith T ravel Research, are forecasting mid-single digit percentage growth in
REVPAR in 2005, with greater REVPAR gains in full service hotels. Our REVPAR
growth, and REVPAR growth in Las Vegas in general, has outpaced that of the
national market, and we expect that trend to continue. 
The Bellagio expansion opened in late 2004 and added o ver 30% to the resort’s
room base. In addition, we added new meeting, retail and dining space and signifi-
cantly expanded the spa and salon. KÀ opened in late November 2004 at MGM
Grand Las Vegas, which had been without a featured production show for almost
two years. Along with the numerous restaurant and other entertainment additions
at MGM Grand Las Vegas, KÀ will enhance our ability to generate visitor traffic
and capture a greater share of our guests’ spending. 
Wynn Las Vegas will add room capacity to the Las Vegas market, with its 2,700
rooms representing a 2% increase in Las Vegas room supply. Wynn Las Vegas will
also feature numerous upscale restaurants and generally target customers who might
otherwise choose Bellagio, MGM Grand Las Vegas or The Mirage. We believe there
will be some impact on these resorts from Wynn Las Vegas, but also believe that the
breadth of amenities in our portfolio of resorts and our loyalty and other marketing
programs will help minimize these competitive pressures. The proximity of Wynn
Las Vegas to TI and The Mirage, along with pedestrian bridges linking TI with the
Fashion Show Mall and Venetian, will also benefit these resorts.
Mandalay Merger
On June 16, 2004, we announced that we had entered into a definitive merger
agreement with Mandalay Resort Group (“Mandalay”), a publicly traded company,
under which we will acquire Mandalay for $71.00 in cash for each shar e of 
common stock of Mandalay. Mandalay owns and operates eleven properties in
Nevada, including Mandalay Bay, Luxor, Excalibur, Circus Circus, and Slots-A-Fun
in Las Vegas, Circus Circus-Reno in Reno, Colorado Belle and Edgewater in
Laughlin, Gold Strike and Nevada Landing in Jean, and Railroad Pass in
Henderson. Mandalay also owns and operates Gold Strike, a hotel/casino in T unica
County, Mississippi. In addition, Mandalay owns a 50% interest in Silver Legacy in
Reno, a 50% interest in Monte Carlo in Las Vegas, a 50% interest in Grand
Victoria, a riverboat in Elgin, Illinois, and a 53.5% interest in MotorCity in
Detroit, Michigan. The total consideration is approximately $8.1 billion, including
equity value of approximately $4.8 billion, convertible debentures with a redemp-
tion value of approximately $574 million, the assumption or r epayment of other
outstanding Mandalay debt with a fair value of approximately $2.6 billion as of
December 31, 2004, and $100 million of estimated transaction costs. The transac-
tion is structured as a merger of one of our wholly-owned subsidiaries with and into
Mandalay. The transaction will be accounted for as a purchase and is anticipated to
close during the first quarter of 2005.