Notes to Consolidated Financial Statements52
Had the Company accounted for these plans under the fair value method allowed
by SFAS 123, the Company’s net income and earnings per share would have been
reduced to recognize the fair value of employee stock options. The following are
required disclosures under SFAS 123 and SFAS 148:
(In thousands, except per share amount)
Year Ended December 31 2004 2003 2002
Net income
As reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 412,332 243,697 $ 292,435
Stock-based compensation under SFAS 123 . . . . (22,963) (43,310) (47,761)
Pro forma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 389,369 $ 200,387 $ 244,674
Basic earnings per share
As reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.95 $ 1.64 $ 1.85
Stock-based compensation under SFAS 123 . . . . (0.16) (0.29) (0.30)
Pro forma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.79 $ 1.35 $ 1.55
Diluted earnings per share
As reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.85 $ 1.61 $ 1.83
Stock-based compensation under SFAS 123 . . . . (0.16) (0.29) (0.30)
Pro forma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.69 $ 1.32 $ 1.53
Reported net income includes $5 million, $5 million and $3 million, net of tax, of
amortization of restricted stock and non-employee stock option compensation for the
years ended December 31, 2004, 2003 and 2002, respectively. For purposes of com-
puting the pro forma compensation, the fair value of each option grant was estimated
on the date of grant using the Black-Scholes option-pricing model with the following
weighted-average assumptions: risk-free interest rates of 3% in 2004, 3% in 2003, and
4% in 2002; no expected dividend yields for the years presented; expected lives of 5
years for the years presented; and expected volatility of 42% in 2004, 42% in 2003
and 50% in 2002. The estimated weighted average fair value of options granted in
2004, 2003 and 2002 was $19.10, $10.64 and $16.32, respectively.
Currency translation. The Company accounts for currency translation in accor-
dance with Statement of Financial Accounting Standards No. 52, “Foreign Currency
Translation”. Balance sheet accounts are translated at the exchange rate in effect at
each balance sheet date. Income statement accounts are translated at the average rate
of exchange prevailing during the period. T ranslation adjustments resulting from this
process are charged or credited to other comprehensive income (loss).
Comprehensive income. Comprehensive income includes net income and all other
non-stockholder changes in equity, or other comprehensive income. Elements of the
Company’s other comprehensive income are reported in the accompanying 
consolidated statement of stockholders’equity, and the cumulative balance of these
elements consisted of the following:
At December 31 (In thousands) 2004 2003
Derivative loss from unconsolidated affiliate, net. . . . . . . . . . . . . . . . . . . . $ (1,863) $ (4,687)
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . 696 11,032
$ (1,167) $ 6,345
Reclassifications. The consolidated financial statements for prior y ears reflect cer-
tain reclassifications, which have no effect on previously reported net income, to
conform to the current year presentation. 
NOTE 3 — DISCONTINUED OPERATIONS
In June 2003, the Company entered into an agreement to sell the Golden Nugget
Subsidiaries, including substantially all of the assets and liabilities of those resorts,
for approximately $215 million, subject to cer tain working capital adjustments.
This transaction closed in January 2004, with net proceeds to the Company of
$210 million. Also in June 2003, the Company ceased operations of 
PLAYMGMMIRAGE.com, its online gaming website (“Online”).  In February
2004, the Company entered into an agreement to sell the subsidiaries that own