Management’s Discussion and Analysis of Financial Condition and Results of Operations34
31, 2002 was $41 million. In November 2004, we announced the development of
Project CityCenter in Las Vegas. In connection with this announcement and the
start of design activities, we began capitalizing interest associated with this project,
including capitalizing interest on land costs for the portion of the Project
CityCenter site not currently being utilized in operations. Interest capitalized on
this project for the year ended December 31, 2004 was $2 million.
Impairment of Long-lived Assets
We evaluate our property and equipment and other long-lived assets for impairment
in accordance with Statement of Financial Accounting Standards No. 144,
“Accounting for the Impairment or Disposal of Long-Lived Assets.” For assets to be
disposed of, we recognize the asset at the lower of carrying value or fair market value
less costs of disposal, as estimated based on comparable asset sales, solicited offers, or a
discounted cash flow model. For assets to be held and used, we review for impairment
whenever indicators of impairment exist. We then compare the estimated future cash
flows of the asset, on an undiscounted basis, to the carrying value of the asset. If the
undiscounted cash flows exceed the carrying value, no impairment is indicated. If the
undiscounted cash flows do not exceed the carrying value, then an impairment is
recorded based on the fair value of the asset, typically measured using a discounted
cash flow model. If an asset is still under development, future cash flows include
remaining construction costs. All recognized impairment losses, whether for assets to
be disposed of or assets to be held and used, are recorded as operating expenses.
There are several estimates, assumptions and decisions in measuring impairments of
long-lived assets. First, management must determine the usage of the asset. T o the
extent management decides that an asset will be sold, it is more likely that an 
impairment may be recognized. Assets must be tested at the lowest level for which
identifiable cash flows exist. This means that some assets must be grouped, and man-
agement has some discretion in the grouping of assets. Future cash flow estimates are,
by their nature, subjective and actual results may differ materially from our estimates.
On a quarterly basis, we review our major long-lived assets to determine if events have
occurred or circumstances exist that indicate a potential impairment. We estimate
future cash flows using our internal budgets. When appropriate, we discount future
cash flows using our weighted-average cost of capital, developed using a standard capital
asset pricing model. Whenever an impairment loss is recorded, or a test for impair-
ment is made, we discuss the facts and circumstances with the audit committee. 
See “Results of Operations” for discussion of write-downs and impairments recorded in
2002, 2003 and 2004. In October 2002, we announced the suspension of our develop-
ment activities on our wholly-owned project on the Renaissance Pointe land in Atlantic
City. In connection therewith, we reviewed the land for potential impairment, and
determined no impairment was indicated. In December 2002, in connection with
our agreement with T urnberry Associates whereby we are required to contribute land
to the venture, we reviewed the land for potential impairment, and determined no
impairment was indicated. In June 2003, we entered into an agreement to sell the
Golden Nugget Subsidiaries. The fair value less costs to sell exceeds the carrying
value, therefore no impairment was indicated. In February 2004, we entered into an
agreement to sell MGM Grand Australia. The fair value less costs to sell exceeds the
carrying value, therefore no impairment was indicated.
Other than the above items, we are not aware of events or circumstances that would
cause us to review any material long-lived assets for impairment.
Income taxes