Management’s Discussion and Analysis of Financial Condition and Results of Operations 25
previously laid off or terminated employees, management determined in 2002 that
a portion of the remaining accrual was no longer necessary. This resulted in a
restructuring credit of $10 million in 2002.
Property transactions, net consisted of the following:
Year Ended December 31 (In thousands) 2004 2003 2002
Gain on sale of North Las Vegas land  . . . . . . . . . . . $ — $ (36,776) $ —
Siegfried & Roy theatre write-down – The Mirage . . . — 1,408 —
Storm damage – Beau Rivage  . . . . . . . . . . . . . . . . . — — 7,824
Write-off of Detroit development costs  . . . . . . . . . . . — — 4,754
Impairment of assets to be disposed of  . . . . . . . . . . 473 5,764 2,134
Demolition costs  . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,057 6,614 —
Other net losses on asset sales or disposals . . . . . . . 1,135 4,049 —
$ 8,665 $ (18,941) $ 14,712
In 2004, there were no material unusual property transactions. In 2003, we sold 315
acres of land in North Las Vegas, Nevada near Shadow Creek for approximately 
$55 million, resulting in the $37 million gain reflected above. Prior to 2003, we 
classified gains and losses on routine assets sales or disposals as a non-operating item at
some resorts and as an operating item at other resorts. We believe the preferable pres-
entation of these items is as an element of operating income. Prior period statements
have not been reclassified as such transactions were not material in periods prior to
2003. Until 2003, demolition costs were typically capitalized as part of new construc-
tion. We began expensing demolition costs on major construction projects as incurred
on January 1, 2003, and are accounting for this change in policy prospectively.
Demolition costs were not material in periods prior to 2003. Demolition costs in
2004 and 2003 related primarily to preparation for the Bellagio standard room
remodel, Bellagio expansion and new theatre at MGM Grand Las Vegas. Impairments
of assets to be disposed of in 2003 consisted primarily of assets related to the former
EFX! show and restaurants closed during 2003 at MGM Grand Las Vegas.
In 2002, T ropical Storm Isidore caused property damage at Beau Rivage totaling 
$8 million, including clean-up costs. The amount of the write-down for damaged assets
was determined based on the net book value of the assets and engineering estimates. In
connection with the revised development agreement in Detroit, we wrote off $5 million,
which was the net book value of previously incurred development costs associated with
the riverfront permanent casino site ($9 million), offset by previously accrued obliga-
tions no longer required under the revised development agreement ($4 million).
Non-operating Results
The following table summarizes information related to interest on our long-term debt:
Year Ended December 31 (In thousands) 2004 2003 2002
Interest cost  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 401,391 $ 352,820 $ 345,448
Less: Capitalized interest . . . . . . . . . . . . . . . . . . . . . . (23,005) (15,234) (61,712)
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . $ 378,386 $ 337,586 $ 283,736
Cash paid for interest, net of amounts capitalized  . . . $ 321,008 $ 308,198 $ 266,071
Average total debt balance  . . . . . . . . . . . . . . . . . . . . $ 5.5 billion $ 5.2 billion $ 5.2 billion
Weighted average interest rate  . . . . . . . . . . . . . . . . . 7.2% 6.9% 6.8%
Interest cost was higher in 2004 as we had a higher average borrowing rate due to
increases in variable interest rates and the issuance of significant fix ed rate debt in
the second half of 2004 in anticipation of the M andalay merger.
Capitalized interest increased in 2004 due to the ongoing Bellagio expansion and
KÀ theatre projects. Capitalized interest in 2005 will include interest capitalized on