Management’s Discussion and Analysis of Financial Condition and Results of Operations30
United Kingdom. In anticipation of reforms to gambling legislation currently
before the United Kingdom’s House of Parliament, we have made several strategic
agreements in the United Kingdom, including the following:
In May 2003, we purchased a 25% interest in Metro Casinos Limited, a company
which was developing a new casino in Bristol. Metro Casinos Limited is a sub-
sidiary of R J Bown (Holdings) Ltd, the owner of the Westcliff Casino, one of the
largest United Kingdom provincial casinos.  We received regulatory approval for our
investment in Metro Casinos Limited from the Gaming Board for Great Britain in
November 2003. The Bristol facility opened in February 2004.
In October 2003, we entered into an agreement with the Earls Court and Olympia
Group, which operates large exhibition and trade show facilities in London, to form a
jointly owned company which would develop an entertainment and gaming facility,
which we would operate in space leased from the Earls Court and Olympia Group, to
complement the existing Olympia facilities. We made a deposit of £2 million ($4 mil-
lion based on exchange rates at December 31, 2004), which is refundable if proposed
gaming law reforms are not implemented by December 2005. Otherwise, the deposit
will be applied to the first year’s rent on a lease between the new company and the Earls
Court and Olympia Group. We would make a nominal equity investment and would
provide a loan for half of the estimated development costs. The agreement is subject to
the implementation of proposed gaming law reforms and a tax structure acceptable to
us, and obtaining required planning and other approvals. We own 82.5% of the entity.
In November 2003, we entered into an agreement with Newcastle United PLC to
create a 50-50 joint venture which would build a major new mixed-use develop-
ment, including casino development, on a site adjacent to Newcastle’s football 
stadium. Newcastle United PLC contributed the land to the joint venture, and we
made an equity investment of £5 million ($10 million based on ex change rates at
December 31, 2004), which is refundable if certain conditions have not been met
by January 2008. We would develop and operate the complex, as well as own the
casino development in leased premises within the complex. The complex is expected
to be financed through project-specific borrowings. The agreement is subject to the
implementation of proposed gaming law reforms and a tax structure acceptable to
us, and obtaining required planning and other approvals.
In February 2004, we announced an agreement in principle with The British Land
Company PLC whereby we would operate a casino in leased premises within a
newly developed leisure and entertainment complex adjacent to the Meadowhall
Shopping Centre in Sheffield. The agreement is subject to the implementation of
proposed gaming law reforms and a tax structure acceptable to us, and obtaining
required planning and other approvals.
Macau. In June 2004, we entered into a joint venture agreement with Pansy Ho
Chiu-king to develop, build and operate a hotel-casino resort in Macau S.A.R. The
facility, which will use the “MGM Grand” name, will be located on a prime water -
front site and will include world-class resort amenities including a hotel, restaurants,
entertainment facilities, convention, retail and spa facilities in addition to a 
significant gaming component. The agreement is subject to, among other things,
the approval of the government of Macau S.A.R. and other regulatory approvals as
well as the entry into a subconcession agreement with Sociedade de Jogos de Macau
(SJM), the holder of one of the existing concessions to operate a casino in Macau.
The Company has committed to invest up to $280 million in the entity in the
form of capital contributions and shareholder loans. The complete design, timing,