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MGM Resorts International 10-Q 2005

Documents found in this filing:

  1. 10-Q
  2. Ex-31.1
  3. Ex-31.2
  4. Ex-32.1
  5. Ex-32.2
  6. Ex-32.2
e10vq
Table of Contents

 
 
UNITED STATES
SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
     
þ   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2005
OR
     
o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File No. 0-16760
MGM MIRAGE
 
(Exact name of registrant as specified in its charter)
     
Delaware   88-0215232
     
(State or other jurisdiction of
incorporation or organization)
  (I.R.S. Employer Identification No.)
3600 Las Vegas Boulevard South, Las Vegas, Nevada 89109
 
(Address of principal executive offices — Zip Code)
(702) 693-7120
 
(Registrant’s telephone number, including area code)
 
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes o No
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act): þ Yes o No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
     
Class
Common Stock, $.01 par value
  Outstanding at August 5, 2005
288,286,997 shares
 
 

 


MGM MIRAGE AND SUBSIDIARIES
FORM 10-Q
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 EX-31.1
 EX-31.2
 EX-32.1
 EX-32.2

 


Table of Contents

Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
MGM MIRAGE AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
(Unaudited)
                 
    June 30,   December 31,
    2005   2004
ASSETS
               
Current assets
               
Cash and cash equivalents
  $ 306,495     $ 435,128  
Accounts receivable, net
    301,919       204,151  
Inventories
    114,451       70,333  
Deferred income taxes
    115,878       28,928  
Prepaid expenses and other
    203,455       81,662  
 
               
Total current assets
    1,042,198       820,202  
 
               
 
               
Property and equipment, net
    16,538,104       8,914,142  
 
               
Other assets
               
Investments in unconsolidated affiliates
    886,301       842,640  
Goodwill and other intangible assets, net
    1,664,867       233,335  
Deposits and other assets, net
    375,145       304,710  
 
               
Total other assets
    2,926,313       1,380,685  
 
               
 
  $ 20,506,615     $ 11,115,029  
 
               
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
 
               
Current liabilities
               
Accounts payable
  $ 182,930     $ 198,050  
Income taxes payable
    168,470       4,991  
Current portion of long-term debt
    14       14  
Accrued interest on long-term debt
    199,985       116,997  
Other accrued liabilities
    961,867       607,925  
 
               
Total current liabilities
    1,513,266       927,977  
 
               
 
               
Deferred income taxes
    3,365,146       1,802,008  
Long-term debt
    12,268,883       5,458,848  
Other long-term obligations
    183,306       154,492  
 
               
Commitments and contingencies (Note 10)
               
 
               
Stockholders’ equity
               
Common stock, $.01 par value: authorized 600,000,000 shares; issued 353,938,925 and 347,147,868 shares; outstanding 287,273,210 and 280,739,868 shares
    3,539       3,472  
Capital in excess of par value
    2,504,680       2,346,329  
Deferred compensation
    (7,079 )     (10,878 )
Treasury stock, at cost 66,665,715 and 66,408,000 shares
    (1,120,528 )     (1,110,551 )
Retained earnings
    1,796,716       1,544,499  
Accumulated other comprehensive loss
    (1,314 )     (1,167 )
 
               
Total stockholders’ equity
    3,176,014       2,771,704  
 
               
 
  $ 20,506,615     $ 11,115,029  
 
               
The accompanying notes are an integral part of these consolidated financial statements.

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Table of Contents

MGM MIRAGE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
                                 
    Three Months Ended   Six Months Ended
    June 30,   June 30,
    2005   2004   2005   2004
Revenues
                               
Casino
  $ 764,378     $ 551,691     $ 1,379,191     $ 1,110,414  
Rooms
    455,761       232,304       729,815       467,265  
Food and beverage
    352,184       212,040       595,662       429,804  
Entertainment
    115,711       65,971       203,858       133,213  
Retail
    69,463       48,072       114,342       93,170  
Other
    106,973       66,015       167,808       117,101  
 
                               
 
    1,864,470       1,176,093       3,190,676       2,350,967  
Less: Promotional allowances
    (148,514 )     (103,568 )     (270,585 )     (212,006 )
 
                               
 
    1,715,956       1,072,525       2,920,091       2,138,961  
 
                               
Expenses
                               
Casino
    389,767       266,677       700,556       550,597  
Rooms
    125,405       62,774       194,884       124,985  
Food and beverage
    220,466       120,709       354,777       240,329  
Entertainment
    84,801       47,580       144,866       94,213  
Retail
    45,233       30,593       74,817       59,139  
Other
    64,517       38,335       103,982       71,224  
General and administrative
    249,713       151,403       408,077       297,701  
Corporate expense
    31,651       18,458       58,442       34,196  
Preopening and start-up expenses
    3,897       1,619       6,421       2,000  
Restructuring costs (credit)
    (4 )     3,900       (70 )     4,314  
Property transactions, net
    1,793       1,938       5,996       3,677  
Depreciation and amortization
    151,673       97,484       262,168       195,037  
 
                               
 
    1,368,912       841,470       2,314,916       1,677,412  
 
                               
Income from unconsolidated affiliates
    30,885       29,542       65,930       53,714  
 
                               
 
Operating income
    377,929       260,597       671,105       515,263  
 
                               
 
                               
Non-operating income (expense)
                               
Interest income
    5,319       1,116       7,016       2,019  
Interest expense, net
    (167,348 )     (92,622 )     (268,816 )     (182,432 )
Non-operating items from unconsolidated affiliates
    (4,404 )     (6,690 )     (7,191 )     (12,895 )
Other, net
    (1,781 )     (2,573 )     (17,472 )     (9,727 )
 
                               
 
    (168,214 )     (100,769 )     (286,463 )     (203,035 )
 
                               
 
                               
Income from continuing operations before income taxes
    209,715       159,828       384,642       312,228  
Provision for income taxes
    (68,547 )     (58,165 )     (132,395 )     (113,425 )
 
                               
Income from continuing operations
    141,168       101,663       252,247       198,803  
 
                               
 
                               
Discontinued operations
                               
Income from discontinued operations, including gain on disposal of $8,186 (six months 2004)
          4,809             18,678  
Provision for income taxes
          (1,755 )           (6,916 )
 
                               
 
          3,054             11,762  
 
                               
Net income
  $ 141,168     $ 104,717     $ 252,247     $ 210,565  
 
                               
 
                               
Basic earnings per share of common stock
                               
Income from continuing operations
  $ 0.49     $ 0.36     $ 0.89     $ 0.71  
Discontinued operations
          0.01             0.04  
 
                               
Net income per share
  $ 0.49     $ 0.37     $ 0.89     $ 0.75  
 
                               
 
                               
Diluted earnings per share of common stock
                               
Income from continuing operations
  $ 0.48     $ 0.35     $ 0.85     $ 0.68  
Discontinued operations
          0.01             0.04  
 
                               
Net income per share
  $ 0.48     $ 0.36     $ 0.85     $ 0.72  
 
                               
The accompanying notes are an integral part of these consolidated financial statements.

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Table of Contents

MGM MIRAGE AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                 
    Six Months Ended
    June 30,
    2005   2004
Cash flows from operating activities
               
Net income
  $ 252,247     $ 210,565  
Adjustments to reconcile net income to net cash provided by operating activities:
               
Depreciation and amortization
    262,168       195,531  
Provision for doubtful accounts
    15,761       4,069  
Property transactions, net
    5,996       3,677  
Net loss on early extinguishment of debt
    18,139       5,527  
Gain on disposal of discontinued operations
          (8,186 )
Income from unconsolidated affiliates
    (58,739 )     (40,819 )
Distributions from unconsolidated affiliates
    43,039       22,500  
Deferred income taxes
    (27,239 )     (32,822 )
Tax benefit from stock-based compensation
    60,833       22,501  
Change in assets and liabilities:
               
Accounts receivable
    (7,492 )     (28,414 )
Inventories
    (5,153 )     (986 )
Income taxes receivable and payable
    53,635       48,875  
Prepaid expenses and other
    13,168       6,122  
Accounts payable and accrued liabilities
    (5,715 )     (49,531 )
Other
    (1,723 )     11,291  
 
               
Net cash provided by operating activities
    618,925       369,900  
 
               
 
               
Cash flows from investing activities
               
Acquisition of Mandalay Resort Group, net of cash acquired
    (4,427,085 )      
Purchases of property and equipment
    (232,242 )     (347,349 )
Dispositions of property and equipment
    654       14,415  
Proceeds from sale of the Golden Nugget Subsidiaries, net
          210,119  
Investments in unconsolidated affiliates
    (177,000 )     (13,791 )
Change in construction payable
    (38,539 )     14,471  
Other
    (10,851 )     (9,863 )
 
               
Net cash used in investing activities
    (4,885,063 )     (131,998 )
 
               
 
               
Cash flows from financing activities
               
Net borrowings (repayments) under bank credit facilities with maturities of 90 days or less
    1,200,000       (475,332 )
Borrowings under bank credit facilities with maturities longer than 90 days
    3,500,000        
Issuance of long-term debt
    500,000       522,207  
Repayment of long-term debt
    (1,102,171 )     (52,149 )
Debt issuance costs
    (47,126 )     (5,360 )
Issuance of common stock
    97,554       86,275  
Repurchase of common stock
          (343,856 )
Other
    (10,752 )     (2,486 )
 
               
Net cash provided by (used in) financing activities
    4,137,505       (270,701 )
 
               
 
               
Cash and cash equivalents
               
Net decrease for the period
    (128,633 )     (32,799 )
Cash related to discontinued operations
          (10,303 )
Balance, beginning of period
    435,128       279,606  
 
               
Balance, end of period
  $ 306,495     $ 236,504  
 
               
 
               
Supplemental cash flow disclosures
               
Interest paid, net of amounts capitalized
  $ 177,697     $ 161,788  
Federal, state and foreign income taxes paid, net of refunds
    41,684       79,215  
The accompanying notes are an integral part of these consolidated financial statements.

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MGM MIRAGE AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 1 — ORGANIZATION AND BASIS OF PRESENTATION
     Organization. MGM MIRAGE (the “Company”) is a Delaware corporation, incorporated on January 29, 1986. As of June 30, 2005, approximately 55% of the outstanding shares of the Company’s common stock was owned by Tracinda Corporation, a Nevada corporation wholly-owned by Kirk Kerkorian. MGM MIRAGE acts largely as a holding company and, through wholly-owned subsidiaries, primarily operates and invests in casino resorts. On April 25, 2005, the Company completed its merger with Mandalay Resort Group (“Mandalay”).
     The Company owns and operates the following casino resorts in Las Vegas, Nevada: Bellagio, MGM Grand Las Vegas, Mandalay Bay, The Mirage, Luxor, Treasure Island (“TI”), New York-New York, Excalibur, Monte Carlo, Circus Circus Las Vegas, Slots-A-Fun and Boardwalk. The Company owns three resorts in Primm, Nevada, at the California/Nevada state line — Whiskey Pete’s, Buffalo Bill’s and the Primm Valley Resort — as well as two championship golf courses located near the resorts. Other Nevada holdings include Circus Circus Reno, Colorado Belle and Edgewater in Laughlin, Gold Strike and Nevada Landing in Jean, and Railroad Pass in Henderson. The Company has a 50% investment in Silver Legacy in Reno, adjacent to Circus Circus Reno. In addition, the Company owns a 50% interest in The Residences at MGM Grand, adjacent to MGM Grand Las Vegas. The Residences is a condominium-hotel development, with Towers 1 and 2 under construction and Tower 3 in the sales phase. The Company also owns Shadow Creek, an exclusive world-class golf course located approximately ten miles north of its Las Vegas Strip resorts.
     The Company and its local partners own MGM Grand Detroit, LLC, which operates a casino in an interim facility located in downtown Detroit, Michigan. The Company also owns and operates two resorts in Mississippi — Beau Rivage in Biloxi and Gold Strike Tunica. The Company has 50% interests in two resorts outside of Nevada — Borgata and Grand Victoria. Borgata is a casino resort located on Renaissance Point in the Marina area of Atlantic City, New Jersey. Boyd Gaming Corporation owns the other 50% of Borgata and also operates the resort. The Company owns additional land adjacent to Borgata, a portion of which consists of common roads, landscaping and master plan improvements, a portion of which is being utilized for an expansion of Borgata, and a portion of which is available for future development. Grand Victoria is a riverboat in Elgin, Illinois previously owned by Mandalay. Mandalay’s interest in Grand Victoria was placed in escrow until the Company is licensed by the Illinois Gaming Board.
     The Company owns 50% of MGM Grand Paradise Limited, a joint venture with Pansy Ho Chiu-king formed to develop, build and operate a hotel-casino resort, MGM Grand Macau, in Macau S.A.R. In April 2005, MGM Grand Paradise Limited obtained a subconcession allowing it to conduct gaming operations. Construction of MGM Grand Macau, which is budgeted to cost $975 million, began in the second quarter of 2005 and the resort is anticipated to open in the second half of 2007.
     The Company owns 66 acres adjacent to Bellagio on which it is developing Project CityCenter. The first phase of Project CityCenter is anticipated to open in 2009 and will consist of a 4,000-room casino resort, significant retail and entertainment facilities, boutique hotels and residential developments at an estimated cost of $5 billion.
     Basis of presentation. As permitted by the rules and regulations of the Securities and Exchange Commission, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with the Company’s 2004 annual consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2004.
     In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (which include only normal recurring adjustments) necessary to present fairly the Company’s financial position as of June 30, 2005, and the results of its operations for the three and six month periods ended June 30, 2005 and 2004. The results of operations for such periods are not necessarily indicative of the results to be expected for the full year. Certain reclassifications, which have no effect on previously reported net income, have been made to the 2004 financial statements to conform to the 2005 presentation.

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     Stock split. In May 2005, the Company completed a 2-for-1 stock split effected in the form of a 100% stock dividend. The additional shares were issued on May 18, 2005 to stockholders of record on May 4, 2005. All share and per share data in the accompanying financial statements and notes thereto have been restated for all periods presented to reflect the 100% stock dividend.
NOTE 2 — ACQUISITION
     On April 25, 2005, the Company closed its merger with Mandalay under which the Company acquired 100% of the outstanding common stock of Mandalay for $71.00 in cash for each share of Mandalay’s common stock. The Company believes that the acquisition enhances the Company’s portfolio of resorts on the Las Vegas Strip, provides additional sites for future development and expands the Company’s employee and customer bases significantly. These factors result in the recognition of certain intangible assets, discussed below, and significant goodwill. The total merger consideration included (in thousands):
         
Cash consideration for outstanding Mandalay shares and stock options
  $ 4,831,944  
Estimated fair value of Mandalay long-term debt
    2,849,225  
Transaction costs and expenses and other
    111,127  
 
       
 
    7,792,296  
Less: Net proceeds from the sale of MotorCity Casino
    (519,685 )
 
       
 
  $ 7,272,611  
 
       
     Cash paid, net of cash acquired, was $4.4 billion. The transaction was accounted for as a purchase and, accordingly, the purchase price was allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of the acquisition. The allocation is preliminary and may be adjusted up to one year after the acquisition. The following table sets forth the preliminary allocation of purchase price (in thousands):
         
Current assets (including cash of $134,245)
  $ 414,207  
Property and equipment
    7,229,492  
Goodwill
    1,199,301  
Other intangible assets
    245,940  
Other assets
    283,930  
Assumed liabilities, excluding long-term debt
    (597,372 )
Deferred taxes
    (1,502,887 )
 
       
 
  $ 7,272,611  
 
       
     The amount allocated to intangible assets includes existing Mandalay intangible assets and the recognition of customer lists with an estimated value of $12 million and an estimated useful life of five years and trade names and trademarks with an estimated value of $234 million and an indefinite life. Goodwill and indefinite-lived intangible assets are not amortized.
     The operating results for Mandalay are included in the accompanying consolidated statements of income from the date of the acquisition. The following unaudited pro forma consolidated financial information for the Company has been prepared assuming the Mandalay acquisition had occurred on January 1, 2004.
                                 
    Three Months   Six Months
For the periods ended June 30,   2005   2004   2005   2004
    (In thousands, except per share amounts)
Net revenues
  $ 1,921,772     $ 1,763,286     $ 3,822,750     $ 3,499,244  
Operating income
    413,310       403,760       836,419       794,885  
Net income
    140,144       126,742       263,775       253,056  
Basic earnings per share
  $ 0.49     $ 0.45     $ 0.93     $ 0.90  
Diluted earnings per share
    0.47       0.44       0.89       0.87  

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NOTE 3 — GOODWILL AND OTHER INTANGIBLE ASSETS
     Goodwill and other intangible assets consisted of the following:
                 
    June 30,   December 31,
    2005   2004
    (In thousands)
Goodwill:
               
Mandalay acquisition (2005)
  $ 1,199,301     $  
Mirage acquisition (2000)
    76,342       76,342  
Other
    7,415       7,415  
 
               
 
    1,283,058       83,757  
 
               
Indefinite-lived intangible assets:
               
Detroit development rights
    102,556       115,056  
Trademarks, license rights and other
    250,594       17,554  
 
               
 
    353,150       132,610  
 
               
Other intangible assets
    28,659       16,968  
 
               
 
  $ 1,664,867     $ 233,335  
 
               
NOTE 4 — DISCONTINUED OPERATIONS
     In January 2004, the Company completed the sale of the Golden Nugget Las Vegas in downtown Las Vegas and the Golden Nugget Laughlin in Laughlin, Nevada (the “Golden Nugget Subsidiaries”), with net proceeds to the Company of $210 million. In July 2004, the Company completed the sale of the subsidiaries that own and operate MGM Grand Australia with net proceeds to the Company of $136 million.
     The results of the Golden Nugget Subsidiaries and MGM Grand Australia are classified as discontinued operations in the accompanying consolidated statements of income for the three and six months ended June 30, 2004. Net revenues of discontinued operations were $14 million and $41 million, respectively, for the three and six months ended June 30, 2004. Included in income from discontinued operations is an allocation of interest expense ($1 million and $2 million, respectively, for the three and six months ended June 30, 2004) based on the ratio of the net assets of the discontinued operations to the total consolidated net assets and debt of the Company. Included in discontinued operations for the six months ended June 30, 2004 is a gain on the sale of the Golden Nugget Subsidiaries of $8 million.
NOTE 5 — INVESTMENTS IN UNCONSOLIDATED AFFILIATES
     Investments in unconsolidated affiliates consisted of the following:
                 
    June 30,   December 31,
    2005   2004
    (In thousands)
Marina District Development Company — Borgata (50%)
  $ 428,754     $ 405,322  
Elgin Riverboat Resort—Riverboat Casino — Grand Victoria (50%)
    244,338        
MGM Grand Paradise Limited — Macau (50%)
    180,565       3,002  
Circus and Eldorado Joint Venture — Silver Legacy (50%)
    23,620        
MGM Grand Newcastle (Holdings) Ltd. (50%)
    9,024       9,633  
Victoria Partners — Monte Carlo (50%)
          424,683  
 
               
 
  $ 886,301     $ 842,640  
 
               
     The Company also owns 50% of The Residences at MGM Grand, along with Turnberry Associates. At June 30, 2005 and December 31, 2004, the Company had a negative investment balance of $5 million and $3 million, respectively, recorded as other long-term liabilities in the accompanying consolidated balance sheets, representing cumulative losses of the venture.
     As discussed in Note 1, the investment in Grand Victoria was held in escrow at June 30, 2005, pending the Company’s licensure by the Illinois Gaming Board. However, the Company is accounting for this interest as if it was owned, including recording its share of income from the venture, since all the benefits and risks of ownership accrue to MGM MIRAGE during the escrow period.

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     The Company’s original investment in MGM Grand Paradise Limited (“Paradise”) consists of a $112.5 million payment for 50% of Paradise’s ordinary share capital and a non-interest bearing shareholder loan of $67.5 million. The Company has committed to make available to Paradise an interest bearing loan facility of $100 million which is subordinated to third party financing, repayment of the shareholder loans and required shareholder distributions (which begin once the shareholder loans have been repaid).
     The Company recorded its share of the results of operations of unconsolidated affiliates as follows (including the Company’s share of Monte Carlo’s results through April 25, 2005):
                                 
    Three Months   Six Months
For the periods ended June 30,   2005   2004   2005   2004
    (In thousands)
Income from unconsolidated affiliates
  $ 30,885     $ 29,542     $ 65,930     $ 53,714  
Preopening and start-up expenses
    (2,338 )           (2,407 )      
Non-operating items from unconsolidated affiliates
    (4,404 )     (6,690 )     (7,191 )     (12,895 )
 
                               
 
  $ 24,143     $ 22,852     $ 56,332     $ 40,819  
 
                               
NOTE 6 — LONG-TERM DEBT
     Long-term debt consisted of the following:
                 
    June 30,   December 31,
    2005   2004
    (In thousands)
Senior credit facility
  $ 4,750,000     $ 50,000  
$300 million 6.95% senior notes, repaid at maturity in 2005, net
          300,087  
$176.4 million 6.625% senior notes, repaid at maturity in 2005, net
          176,096  
$200 million 6.45% senior notes, due 2006, net
    201,559        
$244.5 million 7.25% senior notes, due 2006, net
    237,876       235,511  
$710 million 9.75% senior subordinated notes, due 2007, net
    707,595       706,968  
$200 million 6.75% senior notes, due 2007, net
    190,993       189,115  
$492.2 million 10.25% senior subordinated notes, due 2007, net
    538,553        
$180.4 million 6.75% senior notes, due 2008, net
    170,527       168,908  
$196.2 million 9.5% senior notes, due 2008, net
    215,851        
$200 million 6.875% senior notes, redeemed in 2005, net
          199,095  
$226.3 million 6.5% senior notes, due 2009, net
    228,788        
$1.05 billion 6% senior notes, due 2009, net
    1,055,851       1,056,453  
$297.6 million 9.375% senior subordinated notes, due 2010, net
    328,222        
$825 million 8.5% senior notes, due 2010, net
    822,460       822,214  
$400 million 8.375% senior subordinated notes, due 2011
    400,000       400,000  
$132.4 million 6.375% senior notes, due 2011, net
    133,818        
$550 million 6.75% senior notes, due 2012
    550,000       550,000  
$150 million 7.625% senior subordinated debentures, due 2013, net
    156,277        
$525 million 5.875% senior notes, due 2014, net
    522,491       522,301  
$500 million 6.625% senior notes, due 2015
    500,000        
$100 million 7.25% senior debentures, due 2017, net
    82,300       81,919  
Floating rate convertible senior debentures due 2033
    315,293        
$150 million 7% debentures due 2036, net
    155,990        
$4.3 million 6.7% debentures, due 2096
    4,265        
Other notes
    188       195  
 
               
 
    12,268,897       5,458,862  
Less: Current portion
    (14 )     (14 )
 
               
 
  $ 12,268,883     $ 5,458,848  
 
               
     Total interest incurred for the three month periods ended June 30, 2005 and 2004 was $174 million and $98 million, respectively, of which $7 million and $5 million, respectively, was capitalized. Total interest incurred for the six month periods ended June 30, 2005 and 2004 was $279 million and $190 million, respectively, of which $10 million and $8 million, respectively, was capitalized.

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     At June 30, 2005, the senior credit facility had total capacity of $7.0 billion. The senior credit facility matures in 2010 and consists of a $5.5 billion revolving credit facility and $1.5 billion term loan facility.
     In June 2005, the Company issued $500 million of 6.625% senior notes due 2015 through a Rule 144A offering. As required by the indenture, the Company will exchange the Rule 144A notes for notes registered under the Securities Exchange Act of 1933.
     In May 2005, the Company initiated a tender offer for several issuances of Mandalay’s senior notes and senior subordinated notes totaling $1.5 billion, as required by the change of control provisions contained in the respective indentures. Holders of $155 million of Mandalay’s senior notes and senior subordinated notes redeemed their holdings, resulting in a gain on early retirement of debt of $1 million, classified as “Other, net” in the accompanying consolidated statement of income. Holders of Mandalay’s $400 million principal floating rate convertible senior debentures had the right to redeem the debentures for $574 million through June 30, 2005. Through June 30, 2005, holders of $394 million of principal of the convertible senior debentures had either redeemed or given notice of redemption.
     In February 2005, the Company redeemed all of its outstanding 6.875% senior notes due February 2008 at the present value of future interest payments plus accrued interest at the date of redemption. The Company recorded a loss on retirement of debt of $20 million in the first quarter of 2005, classified as “Other, net” in the accompanying consolidated statement of income. As a result of the redemption of the February 2008 senior notes and the repayment of the $300 million 6.95% senior notes that matured in February 2005, the Company applied for, and received, release of collateral under its senior credit facility and all of its senior notes. Therefore, the Company’s senior credit facility and senior notes are now unsecured, but are still subject to guarantees by the Company and each of its subsidiaries, excluding MGM Grand Detroit, LLC and certain minor subsidiaries.
     The Company attempts to limit its exposure to interest rate risk by managing the mix of its long-term fixed rate borrowings and short-term borrowings under its bank credit facilities. In the past, the Company has utilized interest rate swap agreements to manage this risk. At June 30, 2005, the Company had no outstanding interest rate swaps. All of the Company’s interest rate swaps have met the criteria for using the “shortcut method” allowed under Statement of Financial Accounting Standards No. 133. The amounts received for the termination of past interest rate swaps, including the last $100 million swap terminated in May 2005, have been added to the carrying value of the related debt obligations and are being amortized and recorded as a reduction of interest expense over the remaining life of that debt.
     The Company’s long-term debt obligations contain certain customary covenants requiring the Company to maintain certain financial ratios. At June 30, 2005, the Company was required to maintain a maximum leverage ratio (debt to EBITDA, as defined) of 7.5:1 and a maximum senior leverage ratio of 5.75:1. Also at June 30, 2005, the Company was required to maintain a minimum coverage ratio (EBITDA to interest charges, as defined) of 2.0:1. As of June 30, 2005, the Company’s leverage, senior leverage and interest coverage ratios were 5.5:1, 4.5:1 and 3.1:1, respectively.
NOTE 7 — INCOME PER SHARE OF COMMON STOCK
     The weighted-average number of common and common equivalent shares used in the calculation of basic and diluted earnings per share consisted of the following:
                                 
    Three Months   Six Months
For the periods ended June 30,   2005   2004   2005   2004
    (In thousands)
Weighted-average common shares outstanding (used in the calculation of basic earnings per share)
    285,546       279,809       284,031       282,035  
Potential dilution from stock options and restricted stock
    11,179       9,688       11,654       9,576  
 
                               
Weighted-average common and common equivalent shares (used in the calculation of diluted earnings per share)
    296,725       289,497       295,685       291,611  
 
                               

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NOTE 8 — COMPREHENSIVE INCOME
     Comprehensive income consisted of the following:
                                 
    Three Months   Six Months
For the periods ended June 30,   2005   2004   2005   2004
    (In thousands)
Net income
  $ 141,168     $ 104,717     $ 252,247     $ 210,565  
Currency translation adjustment
    (831 )     (5,813 )     (1,152 )     (5,113 )
Derivative income from unconsolidated affiliate, net of tax
    393       1,532       1,005       1,616  
 
                               
Comprehensive income
  $ 140,730     $ 100,436     $ 252,100     $ 207,068  
 
                               
NOTE 9 — STOCK OPTION PLANS AND STOCK-BASED COMPENSATION
     A summary of the status of the Company’s stock option plans is presented below:
                 
            Weighted
            Average
    Shares   Exercise
Six months ended June 30, 2005   (000’s)   Price
Outstanding at beginning of period
    30,729     $ 14.15  
Granted
    13,757       34.80  
Exercised
    (6,780 )     14.39  
Terminated
    (94 )     9.52  
 
               
Outstanding at end of period
    37,612       21.67  
 
               
Exercisable at end of period
    11,698       14.18  
 
               
     As of June 30, 2005, the aggregate number of shares subject to options available for grant under the Company’s 2005 Omnibus Incentive Plan was 7.0 million.
     The Company accounts for stock-based compensation, including employee stock option plans, in accordance with Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” and the Financial Accounting Standards Board’s Interpretation No. 44, “Accounting for Certain Transactions involving Stock Compensation, an interpretation of APB Opinion No. 25.” Had the Company accounted for these plans under the fair value method allowed by Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation” (“SFAS 123”), as amended by Statement of Financial Accounting Standards No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure” (“SFAS 148”), 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:
                                 
    Three Months   Six Months
For the periods ended June 30,   2005   2004   2005   2004
    (In thousands, except per share amounts)
Net income
                               
As reported
  $ 141,168     $ 104,717     $ 252,247     $ 210,565  
Stock-based compensation under SFAS 123
    (12,168 )     (6,224 )     (16,350 )     (11,919 )
 
                               
Pro forma
  $ 129,000     $ 98,493     $ 235,897     $ 198,646  
 
                               
Basic earnings per share
                               
As reported
  $ 0.49     $ 0.37     $ 0.89     $ 0.75  
Stock-based compensation under SFAS 123
    (0.04 )     (0.02 )     (0.06 )     (0.05 )
 
                               
Pro forma
  $ 0.45     $ 0.35     $ 0.83     $ 0.70  
 
                               
Diluted earnings per share
                               
As reported
  $ 0.48     $ 0.36     $ 0.85     $ 0.72  
Stock-based compensation under SFAS 123
    (0.05 )     (0.02 )     (0.05 )     (0.04 )
 
                               
Pro forma
  $ 0.43     $ 0.34     $ 0.80     $ 0.68  
 
                               

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     The stock-based compensation included in the table above represents the after-tax amount of pro forma compensation related to stock option plans. Reported net income includes $1 million, net of tax, of amortization of restricted stock compensation for each of the three month periods ended June 30, 2005 and 2004 and $2 million, net of tax, for each of the six month periods ended June 30, 2005 and 2004.
     In December 2004, the FASB issued FASB Statement No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123(R)”). Under the original standard, SFAS No. 123, companies had the option of recording stock options issued to employees at fair value or intrinsic value, which generally leads to no expense being recorded. The Company opted to use this intrinsic value method and make required disclosures of fair value expense. SFAS 123(R) eliminates this intrinsic value alternative. SFAS 123(R) is effective for the Company on January 1, 2006, at which time share-based payments must be recorded at fair value.
NOTE 10 — COMMITMENTS AND CONTINGENCIES
     Detroit Development Agreement. Under the August 2002 revised development agreement with the City of Detroit, MGM Grand Detroit, LLC and the Company are subject to certain obligations in exchange for the ability to develop a permanent casino complex. The Company recorded an intangible asset (development rights, deemed to have an indefinite life) in connection with its obligations under the revised development agreement. Outstanding obligations include continued letter of credit support for $50 million of bonds issued by the Economic Development Corporation of the City of Detroit, which mature in 2009. In addition, the City required an indemnification of up to $20 million related to the Lac Vieux and certain other litigation, of which $2.5 million had been paid as of June 30, 2005. In addition to the above obligations, the Company will pay the City of Detroit 1% of gaming revenues (2% if annual revenues exceed $400 million) beginning January 1, 2006.
     Until April 2005, the ability to construct the permanent casino facility was subject to resolution of the Lac Vieux litigation. In April 2005, the 6th Circuit Court of Appeals ruled on the three pending appeals, approved the settlement agreement between Lac Vieux and the two other Detroit casino developers, dismissed Lac Vieux’s request for a reselection process for our subsidiary’s casino franchise and lifted the injunction prohibiting the City and the Detroit developers from commencing construction of the permanent hotel and casino complexes. As a result of the resolution of the Lac Vieux litigation, the Company determined that the necessary accrual for the indemnification to the City was $5 million, and recorded a reduction in accrued liabilities and a corresponding reduction in the development rights intangible asset.
     The Company is currently in the process of obtaining land and developing plans for the permanent casino facility. The design, budget and schedule of the permanent facility are not finalized, and the ultimate timing, cost and scope of the project are subject to risks attendant to large-scale projects.
     New York Racing Association. The Company has entered into a definitive agreement with the New York Racing Association (“NYRA”) to manage video lottery terminals (“VLTs”) at NYRA’s Aqueduct horseracing facility in metropolitan New York. The Company will assist in the development of the approximately $170 million facility, including providing project financing, and will manage the facility for a term of five years (extended automatically if the financing provided by the Company is not fully repaid) for a fee. Recent legislative changes will allow the Company to operate the VLTs past the expiration date of the current Aqueduct franchise agreement.

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     United Kingdom. The Company has been pursuing several development opportunities in the United Kingdom. Legislation approved in April 2005 includes authorization for only one initial regional casino (unlimited table games and a maximum of 1,250 slot machines) and eight large casinos (unlimited table games and a maximum of 150 slot machines), a significant reduction from previous proposals. The Company entered into the agreements described below to further its development efforts. The agreements are cancelable, and any related investments refundable, if certain conditions are not met within specified time frames, including appropriate gaming legislation and tax thresholds, as well as required planning and other approvals.
     The Company has an agreement with the Earls Court and Olympia Group, which operates large trade show facilities in London, to form a venture to develop an entertainment and gaming facility, which the Company would operate in space leased from Olympia. The Company made a refundable deposit of £1.8 million ($3.1 million based on exchange rates at June 30, 2005) and owns 82.5% of the entity.
     The Company has an agreement with Newcastle United PLC to create a 50-50 joint venture which would build a major new mixed-use development, including casino development, on a site adjacent to Newcastle’s football stadium. Newcastle United PLC contributed the land to the joint venture, and the Company made a refundable equity investment of £5 million ($9.0 million based on exchange rates at June 30, 2005).
     The Residences at MGM Grand. In July 2004, the venture obtained construction financing for up to $210 million for the development of Tower 1. The Company has provided a guaranty for up to 50% of the interest and principal obligations on the construction financing and a completion guaranty. The Company recorded the value of the guaranty obligation, approximately $2 million, in other long-term liabilities.
NOTE 11 — EMPLOYEE BENEFIT PLANS
     Mandalay Supplemental Executive Retirement Plan. Mandalay sponsored a defined benefit pension plan (the “Mandalay SERP”) under which certain key employees earned supplemental pension benefits based upon their respective years of service, compensation and tier category set out in the plan document. The Mandalay SERP has been terminated and lump-sum payouts to the plan participants in the aggregate amount of $145 million were made in July 2005. In purchase accounting, all previously recognized amounts related to the SERP are eliminated and a liability is recorded – typically that liability is the projected benefit obligation as of the date of the merger; however, since the plan is being terminated, the liability was recorded at the value of the lump-sum payouts as of the date of the merger, approximately $146 million, and is included in “Other accrued liabilities” in the accompanying consolidated balance sheet. Related investments intended to fund the Mandalay SERP of $96 million were included in “Prepaid expenses and other” in the accompanying consolidated balance sheet at June 30, 2005. These investments were liquidated in July 2005 and used to fund a portion of the lump-sum payouts.
NOTE 12 — PROPERTY TRANSACTIONS, NET
     Net property transactions consist of the following:
                                 
    Three Months   Six Months
For the periods ended June 30,   2005   2004   2005   2004
    (In thousands)
Demolition costs
  $ 1,155     $ 3,071     $ 4,265     $ 3,919  
Net (gains) losses on sale or disposal of fixed assets
    638       (1,133 )     1,731       (242 )
 
                               
 
  $ 1,793     $ 1,938     $ 5,996     $ 3,677  
 
                               
     During 2005, demolition costs related primarily to room remodel activity at MGM Grand Las Vegas and construction of a new showroom at The Mirage. During 2004, demolition costs related primarily to the Bellagio expansion and room remodel projects and site preparation for The Residences at MGM Grand.

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NOTE 13 — CONSOLIDATING CONDENSED FINANCIAL INFORMATION
     The Company’s subsidiaries (excluding MGM Grand Detroit, LLC and certain minor subsidiaries) have fully and unconditionally guaranteed, on a joint and several basis, payment of the senior credit facility, the senior notes and the senior subordinated notes. Separate condensed financial statement information for the subsidiary guarantors and non-guarantors as of June 30, 2005 and December 31, 2004 and for the three and six month periods ended June 30, 2005 and 2004 is as follows:
CONDENSED CONSOLIDATING BALANCE SHEET INFORMATION
                                         
    As of June 30, 2005
            Guarantor   Non-Guarantor        
    Parent   Subsidiaries   Subsidiaries   Elimination   Consolidated
                    (In thousands)                
Current assets
  $ 125,667     $ 835,821     $ 80,710     $     $ 1,042,198  
Property and equipment, net
    7,758       16,447,025       95,293       (11,972 )     16,538,104  
Investments in subsidiaries
    13,960,331       170,984             (14,131,315 )      
Investments in unconsolidated affiliates
    127,902       856,226       244,338       (342,165 )     886,301  
Other non-current assets
    91,383       1,834,000       114,629             2,040,012  
 
                                       
 
  $ 14,313,041     $ 20,144,056     $ 534,970     $ (14,485,452 )   $ 20,506,615  
 
                                       
 
                                       
Current liabilities
  $ 315,992     $ 1,153,363     $ 43,911     $     $ 1,513,266  
Intercompany accounts
    (607,762 )     645,320       (37,558 )            
Deferred income taxes
    2,118,950       1,246,196                   3,365,146  
Long-term debt
    9,308,398       2,910,557       49,928             12,268,883  
Other non-current liabilities
    1,449       181,715       142             183,306  
Stockholders’ equity
    3,176,014       14,006,905       478,547       (14,485,452 )     3,176,014  
 
                                       
 
  $ 14,313,041     $ 20,144,056     $ 534,970     $ (14,485,452 )   $ 20,506,615  
 
                                       
                                         
    As of December 31, 2004
            Guarantor   Non-Guarantor        
    Parent   Subsidiaries   Subsidiaries   Elimination   Consolidated
                    (In thousands)                
Current assets
  $ 48,477     $ 541,537     $ 230,188     $     $ 820,202  
Property and equipment, net
    8,266       8,820,342       97,506       (11,972 )     8,914,142  
Investments in subsidiaries
    8,830,922       192,290             (9,023,212 )      
Investments in unconsolidated affiliates
    127,902       1,056,903             (342,165 )     842,640  
Other non-current assets
    67,672       346,201       124,172             538,045  
 
                                       
 
  $ 9,083,239     $ 10,957,273     $ 451,866     $ (9,377,349 )   $ 11,115,029  
 
                                       
 
                                       
Current liabilities
  $ 132,279     $ 726,581     $ 69,117     $     $ 927,977  
Intercompany accounts
    (231,630 )     206,698       24,932              
Deferred income taxes
    1,802,008                         1,802,008  
Long-term debt
    4,607,118       851,730                   5,458,848  
Other non-current liabilities
    1,760       102,595       50,137             154,492  
Stockholders’ equity
    2,771,704       9,069,669       307,680       (9,377,349 )     2,771,704  
 
                                       
 
  $ 9,083,239     $ 10,957,273     $ 451,866     $ (9,377,349 )   $ 11,115,029  
 
                                       

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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION
                                         
    For the Three Months Ended June 30, 2005
            Guarantor   Non-Guarantor        
    Parent   Subsidiaries   Subsidiaries   Elimination   Consolidated
                    (In thousands)                
Net revenues
  $     $ 1,606,254     $ 109,702     $     $ 1,715,956  
Equity in subsidiaries’ earnings
    343,429       31,477             (374,906 )      
Expenses:
                                       
Casino and hotel operations
          872,955       57,234             930,189  
General and administrative
          236,303       13,410             249,713  
Corporate expense
    2,874       28,777                   31,651  
Preopening and start-up expenses
          3,897                   3,897  
Restructuring costs (credit)
          (4 )                 (4 )
Property transactions, net
          1,491       302             1,793  
Depreciation and amortization
    606       144,670       6,397             151,673  
 
                                       
 
    3,480       1,288,089       77,343             1,368,912  
 
                                       
Income from unconsolidated affiliates
          26,033       4,852             30,885  
 
                                       
Operating income
    339,949       375,675       37,211       (374,906 )     377,929  
Interest expense, net
    (131,488 )     (31,563 )     1,022             (162,029 )
Other, net
          (6,287 )     102             (6,185 )
 
                                       
Income before income taxes
    208,461       337,825       38,335       (374,906 )     209,715  
Provision for income taxes
    (67,293 )           (1,254 )           (68,547 )
 
                                       
Net income
  $ 141,168     $ 337,825     $ 37,081     $ (374,906 )   $ 141,168  
 
                                       
                                         
    For the Three Months Ended June 30, 2004
            Guarantor   Non-Guarantor        
    Parent   Subsidiaries   Subsidiaries   Elimination   Consolidated
                    (In thousands)                
Net revenues
  $     $ 960,458     $ 112,067     $     $ 1,072,525  
Equity in subsidiaries’ earnings
    240,809       35,780             (276,589 )      
Expenses:
                                       
Casino and hotel operations
          513,388       53,280             566,668  
General and administrative
          137,020       14,383             151,403  
Corporate expense
    2,261       16,197                   18,458  
Preopening and start-up expenses
          1,619                   1,619  
Restructuring costs
          3,900                   3,900  
Property transactions, net
    (1,466 )     3,447       (43 )           1,938  
Depreciation and amortization
    260       89,850       7,374             97,484  
 
                                       
 
    1,055       765,421       74,994             841,470  
 
                                       
Income from unconsolidated affiliates
          29,542                   29,542  
 
                                       
Operating income
    239,754       260,359       37,073       (276,589 )     260,597  
Interest expense, net
    (77,824 )     (13,376 )     (306 )           (91,506 )
Other, net
    500       (9,768 )     5             (9,263 )
 
                                       
Income from continuing operations before income taxes
    162,430       237,215       36,772       (276,589 )     159,828  
Provision for income taxes
    (57,173 )           (992 )           (58,165 )
 
                                       
Income from continuing operations
    105,257       237,215       35,780       (276,589 )     101,663  
Discontinued operations, net
    (540 )           3,594             3,054  
 
                                       
Net income
  $ 104,717     $ 237,215     $ 39,374     $ (276,589 )   $ 104,717  
 
                                       

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CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS INFORMATION
                                         
    For the Six Months Ended June 30, 2005
            Guarantor   Non-Guarantor        
    Parent   Subsidiaries   Subsidiaries   Elimination   Consolidated
                    (In thousands)                
Net revenues
  $     $ 2,696,689     $ 223,402     $     $ 2,920,091  
Equity in subsidiaries’ earnings
    627,590       66,987             (694,577 )      
Expenses:
                                       
Casino and hotel operations
          1,456,696       117,186             1,573,882  
General and administrative
          379,801       28,276             408,077  
Corporate expense
    6,863       51,579                   58,442  
Preopening and start-up expenses
          6,421                   6,421  
Restructuring costs (credit)
          (70 )                 (70 )
Property transactions, net
          5,692       304             5,996  
Depreciation and amortization
    977       247,779       13,412             262,168  
 
                                       
 
    7,840       2,147,898       159,178             2,314,916  
 
                                       
Income from unconsolidated affiliates
          61,078       4,852             65,930  
 
                                       
Operating income
    619,750       676,856       69,076       (694,577 )     671,105  
Interest expense, net
    (218,017 )     (44,989 )     1,206             (261,800 )
Other, net
    (19,500 )     (5,100 )     (63 )           (24,663 )
 
                                       
Income before income taxes
    382,233       626,767       70,219       (694,577 )     384,642  
Provision for income taxes
    (129,986 )           (2,409 )           (132,395 )
 
                                       
Net income
  $ 252,247     $ 626,767     $ 67,810     $ (694,577 )   $ 252,247  
 
                                       
                                         
    For the Six Months Ended June 30, 2004
            Guarantor   Non-Guarantor        
    Parent   Subsidiaries   Subsidiaries   Elimination   Consolidated
                    (In thousands)                
Net revenues
  $     $ 1,922,977     $ 215,984     $     $ 2,138,961  
Equity in subsidiaries’ earnings
    480,779       66,164             (546,943 )      
Expenses:
                                       
Casino and hotel operations
          1,035,401       105,086             1,140,487  
General and administrative
          269,770       27,931             297,701  
Corporate expense
    4,758       29,438                   34,196  
Preopening and start-up expenses
    129       1,871                   2,000  
Restructuring costs
          4,314                   4,314  
Property transactions, net
    (1,466 )     4,797       346             3,677  
Depreciation and amortization
    522       179,667       14,848             195,037  
 
                                       
 
    3,943       1,525,258       148,211             1,677,412  
 
                                       
Income from unconsolidated affiliates
          53,714                   53,714  
 
                                       
Operating income
    476,836       517,597       67,773       (546,943 )     515,263  
Interest expense, net
    (151,397 )     (27,985 )     (1,031 )           (180,413 )
Other, net
    (581 )     (22,048 )     7             (22,622 )
 
                                       
Income from continuing operations before income taxes
    324,858       467,564       66,749       (546,943 )     312,228  
Provision for income taxes
    (112,840 )           (585 )           (113,425 )
 
                                       
Income from continuing operations
    212,018       467,564       66,164       (546,943 )     198,803  
Discontinued operations, net
    (1,453 )     7,362       5,853             11,762  
 
                                       
Net income
  $ 210,565     $ 474,926     $ 72,017     $ (546,943 )   $ 210,565  
 
                                       
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS INFORMATION
                                         
    For the Six Months Ended June 30, 2005
            Guarantor   Non-Guarantor        
    Parent   Subsidiaries   Subsidiaries   Elimination   Consolidated
                    (In thousands)                
Net cash provided by (used in) operating activities
  $ (181,632 )   $ 740,512     $ 60,045     $     $ 618,925  
Net cash used in investing activities
    (4,587,820 )     (292,843 )     (2,210 )     (2,190 )     (4,885,063 )
Net cash provided by (used in) financing activities
    4,761,697       421,781       (204,601 )     2,190       4,137,505  
                                         
    For the Six Months Ended June 30, 2004
            Guarantor   Non-Guarantor        
    Parent   Subsidiaries   Subsidiaries   Elimination   Consolidated
                    (In thousands)                
Net cash provided by (used in) operating activities
  $ (187,993 )   $ 472,313     $ 85,580     $     $ 369,900  
Net cash used in investing activities
    (2,655 )     (123,048 )     (4,208 )     (2,087 )     (131,998 )
Net cash provided by (used in) financing activities
    194,439       (431,750 )     (35,477 )     2,087       (270,701 )

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Results of Operations
     Overview
     At June 30, 2005, our primary operations consisted of 24 wholly-owned casino resorts and 50% investments in three other casino resorts, including:
         
Las Vegas, Nevada:
      Bellagio, MGM Grand Las Vegas, Mandalay Bay, The Mirage, Luxor, TI, New York-New York, Excalibur, Monte Carlo, Circus Circus Las Vegas, Slots-A-Fun and Boardwalk.
 
       
Other domestic:
      The Primm Valley Resorts (Whiskey Pete’s, Buffalo Bill’s and Primm Valley Resort) in Primm, Nevada; Circus Circus Reno and Silver Legacy (50% owned) in Reno, Nevada; Colorado Belle and Edgewater in Laughlin, Nevada; Gold Strike and Nevada Landing in Jean, Nevada; Railroad Pass in Henderson, Nevada; MGM Grand Detroit; Beau Rivage in Biloxi, Mississippi and Gold Strike Tunica in Tunica, Mississippi; Borgata (50% owned) in Atlantic City, New Jersey; and Grand Victoria (50% owned) in Elgin, Illinois.
     Other operations include the Shadow Creek golf course in North Las Vegas; two golf courses at Primm Valley; a 50% investment in The Residences at MGM Grand, a hotel condominium development in Las Vegas; and a 50% investment in MGM Grand Paradise Limited, which is constructing a casino resort in Macau.
     On April 25, 2005, we closed our merger with Mandalay Resort Group (“Mandalay”) under which we acquired Mandalay for $71.00 in cash for each share of common stock of Mandalay. Mandalay’s interest in Grand Victoria was placed in escrow until we are licensed by the Illinois Gaming Board. The total merger consideration included equity value of approximately $4.83 billion, the assumption or repayment of other outstanding Mandalay debt with a fair value of approximately $2.85 billion and $110 million of transaction costs, offset by the $520 million received by Mandalay from the sale of its interest in MotorCity Casino in Detroit, Michigan. We believe that the acquisition enhances our portfolio of resorts on the Las Vegas Strip, provides additional sites for future development and expands our employee and customer bases significantly. These factors result in the recognition of certain intangible assets and significant goodwill.
     We operate primarily in one segment, the operation of casino resorts, which includes offering gaming, hotel, dining, entertainment, retail, convention services and other resort amenities. Giving effect to the Mandalay merger, over half of our net revenues are now derived from non-gaming activities, a higher percentage than many of our competitors, as our operating philosophy is to provide a complete resort experience for our guests, including non-gaming amenities which command a premium price based on their quality. We believe that we own several of the premier casino resorts in the world, and a main focus of our strategy is to continually reinvest in these resorts to maintain that competitive advantage.
     We generate a majority of our net revenues and operating income from our resorts in Las Vegas, Nevada, which exposes us to certain risks outside of our control, such as competition from other recently opened Las Vegas resorts, including several expanded resorts and a major new competitor, and the impact from expansion of gaming in California. We are also exposed to risks related to tourism and the general economy, including national and global economic conditions and terrorist attacks or other global events.

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     As a resort-based company, our operating results are highly dependent on the volume of customers at our resorts, which in turn impacts the price we can charge for our hotel rooms and other amenities. We also generate a significant portion of our operating income from high-end gaming customers, which can cause variability in our results. Key performance indicators related to revenue are:
  Gaming revenue indicators — table games drop and slot handle (volume indicators); “win” or “hold” percentage, which is not fully controllable by us. Our normal table games win percentage is in the range of 18% to 22% of table games drop and our normal slot win percentage is in the range of 6% to 7% of slot handle;
 
  Hotel revenue indicators — hotel occupancy (volume indicator); average daily rate (“ADR”, price indicator); revenue per available room (“REVPAR”), a summary measure of hotel results combining ADR and occupancy rate.
     A full description of our operations, key performance indicators and outlook can be found in our Annual Report on Form 10-K for the year ended December 31, 2004.
     Financial Results
     The following discussion is based on our consolidated financial statements for the three and six months ended June 30, 2005 and 2004. On a consolidated basis, the most important factors and trends contributing to our operating performance for the period were:
  The addition of Mandalay’s resorts on April 25, 2005. For the two months we owned the Mandalay resorts, net revenues for those operations was $524 million and operating income was $131 million.
 
  Strong hotel and gaming operating trends, despite a major new market competitor which opened in April 2005. We experienced strong first quarter gaming volumes during key casino events such as the Super Bowl, Chinese New Year and March Madness, and second quarter trends continue to indicate growth in these areas;
 
  Continued year-over-year increases in room pricing and increased visitation, driving hotel occupancy and increased revenues at our restaurants, entertainment venues and other resort amenities;
 
  The December 2004 opening of the Spa Tower and related amenities at Bellagio and the ongoing repositioning of MGM Grand Las Vegas, highlighted by KÀ, the new Cirque du Soleil show, and the West Wing and SKYLOFTS room enhancements;
 
  The continued success of Borgata, of which we own 50%.
     As a result of the above factors and trends, our net revenues increased 60% in the quarter over the second quarter of 2004. On a same-store basis (excluding the Mandalay resorts), revenue growth was 11%.
     Our operating income in 2005 increased 45% for the quarter, due to the strong revenue trends and the addition of Mandalay. Also positively impacting operating income in the quarter and year-to-date periods was increased income from Borgata. Negatively affecting operating margins in the second quarter of 2005 was a lower table games hold percentage than prior year, additional expense of $10 million resulting from our re-evaluation of workers compensation reserves and a lower-than-normal bad debt provision in the 2004 quarter. In addition, the gaming tax rate applicable to MGM Grand Detroit increased from 18% to 24% in September 2004, negatively impacting operating income at that resort in the three and six month periods. For the year-to-date period, net revenues were up 37% (12% excluding Mandalay), and operating income was up 30%.
     Income from continuing operations increased 39% and 27% over the 2004 quarter and six month periods, respectively. Increased operating income was offset in part by higher interest expense resulting from the Mandalay merger.

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     Operating Results — Detailed Revenue Information
     The following table presents detail of our net revenues:
                                                 
    Three Months Ended June 30,   Six Months Ended June 30,
        Percentage           Percentage    
    2005   Change   2004   2005   Change   2004
    (Dollars in thousands)
Casino revenue, net:
                                               
Table games
  $ 294,402       26 %   $ 234,264     $ 558,509       16 %   $ 482,024  
Slots
    445,869       47 %     302,909       776,410       30 %     596,056  
Other
    24,107       66 %     14,518       44,272       37 %     32,334  
 
                                               
Casino revenue, net
    764,378       39 %     551,691       1,379,191       24 %     1,110,414  
 
                                               
Non-casino revenue:
                                               
Rooms
    455,761       96 %     232,304       729,815       56 %     467,265  
Food and beverage
    352,184       66 %     212,040       595,662       39 %     429,804  
Entertainment, retail and other
    292,147       62 %     180,058       486,008       41 %     343,484  
 
                                               
Non-casino revenue
    1,100,092       76 %     624,402       1,811,485       46 %     1,240,553  
 
                                               
 
    1,864,470       59 %     1,176,093       3,190,676       36 %     2,350,967  
Less: Promotional allowances
    (148,514 )     43 %     (103,568 )     (270,585 )     28 %     (212,006 )
 
                                               
 
  $ 1,715,956       60 %   $ 1,072,525     $ 2,920,091       37 %   $ 2,138,961  
 
                                               
     On a same-store basis, table games revenue decreased slightly in the second quarter as volume increased 3%, but the hold percentage was almost 100 basis points lower than the 2004 quarter, though still within the Company’s normal range in both periods. Slot revenue increased 7% on a same-store basis, on top of a 10% year-over-year increase in 2004, demonstrating the momentum of the Company’s technology and marketing programs. The addition of the Spa Tower also led to increased slot utilization at Bellagio, as Bellagio’s slot revenues increased over 30%. The MGM Grand Las Vegas benefited from increased customers from KÀ, with slot revenues up 13%.
     Non-casino revenue increased in 2005 primarily due to strong conference and group business and higher room rates in all segments, as well as the success of the Spa Tower and other amenities in garnering an increased share of customer spending. In the second quarter of 2005, REVPAR was $142, up 16% from the prior year quarter on a same-store basis. At our same-store Las Vegas resorts, REVPAR was $164 in the 2005 quarter, an increase of 15%. Other non-gaming revenue increased due to successful new restaurants and lounges and the addition of KÀ at MGM Grand Las Vegas and the Spa Tower at Bellagio.
     Operating Results — Details of Certain Charges
     Preopening and start-up expenses were $4 million in the 2005 quarter versus $2 million in 2004, and included amounts related primarily to MGM Grand Macau, Project CityCenter, The Residences at MGM Grand, and KÀ and other projects at MGM Grand Las Vegas, such as the new poker room and new restaurants.
     Property transactions, net consisted of the following:
                                 
    Three Months   Six Months
For the periods ended June 30,   2005   2004   2005   2004
            (In thousands)        
Demolition costs
  $ 1,155     $ 3,071     $ 4,265     $ 3,919  
Net (gains) losses on sale or disposal of fixed assets
    638       (1,133 )     1,731       (242 )
 
                               
 
  $ 1,793     $ 1,938     $ 5,996     $ 3,677  
 
                               
     During 2005, demolition costs related primarily to room remodel activity at MGM Grand Las Vegas and construction of a new showroom at The Mirage. During 2004, demolition costs related primarily to the Bellagio expansion and room remodel projects and site preparation for The Residences at MGM Grand.

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     Non-operating Results
     Net interest expense increased to $167 million in the 2005 second quarter and $269 million for the year-to-date from $93 million and $182 million in the respective 2004 periods, due primarily to the funding of the Mandalay merger with bank credit facility borrowings. “Other, net” includes a $20 million loss on early retirement of debt related to the early redemption of our 6.875% senior notes due 2008 in the first quarter of 2005, a $1 million gain on redemption of Mandalay debt in the second quarter of 2005, and $7 million of income in the first quarter of 2005 from the favorable resolution of a pre-acquisition contingency related to the Mirage Resorts acquisition. In 2004, “Other, net” for the six month period included a $6 million loss on early retirement of debt related to the repurchase of $49 million of our senior notes.
     Our effective income tax rate on continuing operations was 33% and 34%, respectively, for the quarter and six months ended June 30, 2005. This includes the impact of two tax adjustments in the second quarter. We recorded a tax benefit of $11 million related to the repatriated proceeds from the sale of MGM Grand Australia, which qualified for a special one-time tax deduction of 85 percent on certain repatriated earnings of foreign subsidiaries. We also recorded additional provision of $3 million relating to state deferred income taxes in Illinois resulting from the Mandalay merger. Excluding these adjustments, our tax rate for the quarter and six months was 36%, which is consistent with the prior year periods.
     Discontinued Operations
     Income from discontinued operations in 2004 represented the operations of MGM Grand Australia for the full six months and the Golden Nugget Subsidiaries through their sale in January, and the first quarter 2004 after-tax gain of $5 million from the sale of the Golden Nugget Subsidiaries.
Liquidity and Capital Resources
     Cash Flows — Operating Activities
     Operating cash flow was $619 million for the six months ended June 30, 2005, a significant increase from $370 million in the prior year period. This largely reflects the additional operating income, excluding depreciation and amortization, from Mandalay. In addition, we had lower tax payments in the current year and interest payments only increased slightly, even with the additional debt to fund the Mandalay merger. We have higher scheduled interest payments in the third and fourth quarters of 2005. At June 30, 2005, we held cash and cash equivalents of $306 million. Despite the addition of Mandalay, the June 30, 2004 balance is lower than the year-end balance due to the repatriation of the MGM Grand Australia sales proceeds in 2005, the implementation of our centralized treasury management at the Mandalay resorts, and the typical higher cash balances held at our resorts at year-end.
     Cash Flows — Investing Activities
     Our primary investing cash flows for the six months ended June 30, 2005 were the $4.4 billion purchase of Mandalay, $232 million of capital expenditures and the $177 million investment in MGM Grand Paradise. Capital expenditures were made primarily for:
    Ongoing room enhancements — West Wing and SKYLOFTS — MGM Grand Las Vegas;
 
    Other projects at MGM Grand Las Vegas, including a new poker room, new lounge, relocated race and sports book, and new restaurants;
 
    The remodeled theatre at The Mirage in preparation for a new show by Cirque du Soleil based on the music of the Beatles, along with other projects at The Mirage;
 
    A new golf course at Beau Rivage.
     In 2004, capital expenditures were higher, $347 million, as we were constructing two major projects — the Spa Tower at Bellagio and the KÀ theatre at MGM Grand Las Vegas.

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     Cash Flows — Financing Activities
     In the six months ended June 30, 2005, we borrowed net debt of $4.1 billion; however, we repaid net debt of $513 million after the Mandalay merger. We used borrowings from our bank credit facility to fund the Mandalay acquisition and make payments on fixed-rate long-term debt. At June 30, 2005 our bank credit facility had a balance of $4.8 billion, with available liquidity of $2.2 billion.
     In the first quarter of 2005, we repaid at their scheduled maturity two issues of senior notes due in 2005 ($176.4 million of 6.625% senior notes and $300 million of 6.95% senior notes) and redeemed one issue of senior notes due in 2008 ($200 million of 6.875% senior notes). With the redemption of the 2008 senior notes and the repayment of the 6.95% senior notes, the Company’s bank credit facility and senior notes are now unsecured.
     In addition, in the second quarter of 2005, we initiated a tender offer for several issuances of Mandalay’s senior notes and senior subordinated notes totaling $1.5 billion. Holders of $155 million of Mandalay’s senior notes and senior subordinated notes redeemed their holdings. Holders of Mandalay’s $400 million principal floating rate convertible senior debentures had the right to redeem the debentures for $574 million through June 30, 2005. We paid $250 million to holders of the convertible debentures in the second quarter of 2005.
     In the second quarter of 2005, we issued $500 million of 6.625% senior notes due 2015 through a Rule 144A offering. As required by the indenture, we will exchange the Rule 144A notes for notes registered under the Securities Exchange Act of 1933.
     We did not repurchase any shares of our common stock in the first six months of 2005, but have a current authorization to repurchase up to 20 million shares of our common stock. We received proceeds of $98 million from the exercise of stock options in the six months ended June 30, 2005.
     Other Factors Affecting Liquidity
     We have several projects and proposed developments which will or could require significant funding in the next several years. The Company is currently in the process of obtaining land and developing plans for the permanent casino facility in Detroit, Michigan. The design, budget and schedule of the permanent facility are not finalized, and the ultimate timing, cost and scope of the project are subject to risks attendant to large-scale projects.
     We have committed to providing project financing for the VLT facility at NYRA’s Aqueduct horseracing facility. The facility is estimated to cost $170 million, and we will assist in the development and will manage the facility for a fee.
     We have committed to make available an interest bearing loan facility of $100 million to MGM Grand Paradise Limited, and the venture intends to obtain third party financing to fund the remaining project costs for MGM Grand Macau. Construction on MGM Grand Macau, which is budgeted to cost $975 million, began in the second quarter of 2005, and the resort is anticipated to open in the second half of 2007.
     In November 2004, we announced a plan to develop Project CityCenter, a multi-billion dollar urban metropolis, on 66 acres of land on the Las Vegas Strip, between Bellagio and Monte Carlo. We anticipate that the first phase of Project CityCenter will include a 4,000-room casino resort, boutique hotels, approximately 550,000 square feet of retail shops, dining and entertainment venues, and 1,650 residential units. We expect that construction of Project CityCenter will begin in 2006 and that the first phase will open in 2009 at a cost of approximately $5 billion. The design, budget and schedule of Project CityCenter are still preliminary, however, and the ultimate timing, cost and scope are subject to risks attendant to large-scale projects. Construction has begun on the Bellagio employee parking garage, which is necessary to clear the Project CityCenter site, a portion of which is currently used as surface parking for Bellagio employees.
     In April 2005, we and our partner CapitaLand, together with 11 other applicants, were successful in qualifying for the second round of the Request for Proposals process for the development of an integrated resort complex in the Marina Bayfront of Singapore. The Singapore government is currently in the process of finalizing the Request fro Proposals, which is scheduled to be issued in the third quarter of 2005.

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Market Risk
     Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. Our primary exposure to market risk is interest rate risk associated with our variable rate long-term debt. We attempt to limit our exposure to interest rate risk by managing the mix of our long-term fixed rate borrowings and short-term borrowings under our bank credit facilities.
     As of June 30, 2005, long-term fixed rate borrowings represented approximately 59% of our total borrowings. Assuming a 100 basis-point change in LIBOR at June 30, 2005, our annual interest cost would change by approximately $51 million.
Safe Harbor Provision
     The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in this report contains statements that are forward-looking, such as statements relating to plans for future expansion and other business development activities, as well as other capital spending, financing sources, the effects of regulation (including gaming and tax regulations) and competition. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the Company. These risks and uncertainties include, but are not limited to, those relating to competition, development and construction activities, risks associated with the Mandalay merger, dependence on existing management, leverage and debt service (including sensitivity to fluctuations in interest rates), domestic or international economic conditions (including sensitivity to fluctuations in foreign currencies), pending or future legal proceedings, changes in federal or state tax laws or the administration of such laws, changes in gaming laws or regulations (including the legalization of gaming in certain jurisdictions) and application for licenses and approvals under applicable jurisdictional laws and regulations (including gaming laws and regulations). For a complete description of risk factors, see our Annual Report on Form 10-K for the year ended December 31, 2004.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
     We incorporate by reference the information appearing under “Market Risk” in Part I, Item 2 of this Form 10-Q.
Item 4. Controls and Procedures
     Our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) have concluded that the design and operation of our disclosure controls and procedures are effective as of June 30, 2005. This conclusion is based on an evaluation conducted under the supervision and with the participation of Company management. Disclosure controls and procedures are those controls and procedures which ensure that information required to be disclosed in this filing is accumulated and communicated to management and is recorded, processed, summarized and reported in a timely manner and in accordance with Securities and Exchange Commission rules and regulations.
     During the quarter ended June 30, 2005, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. In making our assessment of changes in internal control over financial reporting as of June 30, 2005, we have excluded the Mandalay operations because these operations were acquired in a business combination in 2005. These operations represent approximately 50% of our total assets at June 30, 2005 and approximately 30% of our total net revenues for the quarter ended June 30, 2005. We intend to disclose any material changes in internal control over financial reporting at the Mandalay operations in the first annual assessment of internal control over financial reporting in which we are required to include Mandalay.

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Part II. OTHER INFORMATION
Item 1. Legal Proceedings
     Lac Vieux Litigation
     For a complete description of the facts and circumstances surrounding the case of Lac Vieux Desert Band of Lake Superior Chippewa Indians v. Michigan Gaming Control Board, et. al., see our Annual report on Form 10-K for the year ended December 31, 2004. As of December 31, 2004, the casino developers, including our subsidiary, were prohibited from developing permanent casino complexes under an injunction issued by the 6th Circuit Court of Appeals. In April 2005, the 6th Circuit Court filed an unpublished opinion which effectively resolved all the outstanding issues of the case, and affirmed the District Court’s approval of the settlement agreement between Lac Vieux and the two other Detroit developers, dismissed the Lac Vieux Tribe’s appeal requesting reselection of our subsidiary’s casino franchise, and dissolved the previously-entered injunction which prohibited construction of the permanent casino facilities. The ruling became final in July 2005 after the expiration of the Lac Vieux Tribe’s period for application for reconsideration by the 6th Circuit Court and/or petition for writ of certiorari to the U.S. Supreme Court.
     Boardwalk Shareholder Litigation
     For a complete description of the facts and circumstances surrounding this litigation, see our Annual Report on Form 10-K for the year ended December 31, 2004. In March 2005, the District Court for Clark County, Nevada granted summary judgment in our favor. In May 2005 plaintiffs filed an appeal of the dismissal to the Nevada Supreme Court. At a mediation conference mandated by court rule, the parties reached a settlement agreement on terms favorable to us, which is subject to final approval by the Nevada Supreme Court.
     Mandalay Resort Group Shareholder Litigation
     On April 25, 2005, the Company consummated its acquisition of Mandalay Resort Group, a Nevada corporation (“Mandalay”), pursuant to an Agreement and Plan of Merger, dated as of June 15, 2004 (the “Merger Agreement”), among the Company, MGM MIRAGE Acquisition Co. #61, a Nevada corporation, that was a wholly owned subsidiary of the Company (“Merger Sub”), and Mandalay. The acquisition was effected by merging Merger Sub with and into Mandalay (the “Merger”), with Mandalay continuing as the surviving corporation.
     In connection with the Merger, Mandalay and its directors were named defendants in Stephen Ham, Trustee for the J.C. Ham Residuary Trust v. Mandalay Resort Group, et al., which was filed on June 11, 2004 in the 8th Judicial District Court for Clark County, Nevada, and Robert Lowinger v. Mandalay Resort Group, et al., which was filed on June 7, 2004 also in the 8th Judicial District Court for Clark County, Nevada. Both of these actions make claims concerning the Merger, including claims of breach of fiduciary duty against Mandalay’s directors, and seek injunctive relief and unspecified monetary damages. The plaintiffs in both actions agreed that Mandalay and the directors did not need to respond to the pending complaints, as they intended to file a joint amended complaint and consolidate both actions. On December 3, 2004, the plaintiff in Ham filed a motion for temporary restraining order and motion for preliminary injunction enjoining the Mandalay shareholder vote on the proposed merger and for an order shortening time to allow plaintiff to conduct expedited discovery. The plaintiff’s motion was denied. On January 27, 2005, the plaintiff in Ham filed an amended complaint for breach of fiduciary duty in connection with the defendants’ approval of the proposed merger. Mandalay moved to dismiss the amended complaint on April 4, 2005. The court has not yet ruled on the Ham motion. The Lowinger case remains pending. The Company intends to vigorously defend its positions in these cases.

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     Other
     We and our subsidiaries are also defendants in various other lawsuits most of which relate to routine matters incidental to our business. We do not believe that the outcome of this other pending litigation, considered in the aggregate, will have a material adverse effect on the Company.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
     Our share repurchases are only conducted under repurchase programs approved by our Board of Directors and publicly announced. There were no shares repurchased during the three months ended June 30, 2005. Under a July 2004 authorization by the Board of Directors, the Company had 20 million shares available for repurchase at June 30, 2005.
Item 4. Submission of Matters to a Vote of Security Holders
  (a)   The Company’s 2005 Annual Meeting of Stockholders was held on May 3, 2005.
 
  (c)   At the Annual Meeting, the following individuals were elected to serve one-year terms as members of the Board of Directors:
                 
          Name   Shares Voted For   Shares Withheld
James D. Aljian
    111,194,561       19,915,469  
Robert H. Baldwin
    110,058,475       21,051,555  
Terry Christensen
    111,016,198       20,093,832  
Willie D. Davis
    114,132,860       16,977,170  
Alexander M. Haig, Jr.
    110,871,691       20,238,339  
Alexis Herman
    129,833,760       1,276,270  
Roland Hernandez
    129,768,478       1,341,552  
Gary N. Jacobs
    110,799,734       20,310,296  
Kirk Kerkorian
    114,490,234       16,619,796  
J. Terrence Lanni
    112,132,246       18,977,784  
George J. Mason
    125,959,553       5,150,477  
James J. Murren
    110,800,430       20,309,600  
Ronald M. Popeil
    127,220,912       3,889,118  
John T. Redmond
    111,809,816       19,300,214  
Daniel M. Wade
    111,924,843       19,185,187  
Melvin B. Wolzinger
    127,227,486       3,882,544  
Alex Yemenidjian
    124,197,929       6,912,101  
     Additionally, a proposal to amend the Company’s Certificate of Incorporation to increase the number of authorized shares of our common stock from 300,000,000 to 600,000,000 was approved by a vote of 128,843,304 shares in favor, 2,236,209 shares opposed and 30,516 shares abstaining.
     Additionally, a proposal to approve the 2005 Omnibus Incentive Plan was approved, by a vote of 98,247,471 shares in favor, 25,414,862 shares opposed, and 64,272 shares abstaining.
     Additionally, a proposal to ratify the selection of Deloitte & Touche LLP to serve as the Company’s independent registered public accounting firm for the year ending December 31, 2005 was approved, by a vote of 130,897,008 shares in favor, 173,770 shares opposed and 39,250 shares abstaining.

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Item 6. Exhibits
             
 
    10.1     MGM MIRAGE 2005 Omnibus Incentive Plan (incorporated by reference to Exhibit 10 to the Company’s Registration Statement on Form S-8 filed May 12, 2005).
 
           
 
    10.2     Indenture, dated June 20, 2005, among MGM MIRAGE, certain subsidiaries of MGM MIRAGE, and U.S. Bank National Association (incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K dated June 20, 2005 (the “June 2005 8-K”)).
 
           
 
    10.3     Registration Rights Agreement, dated June 20, 2005, among MGM MIRAGE, certain subsidiaries of MGM MIRAGE, and certain initial purchasers parties thereto (incorporated by reference to Exhibit 99.2 to the June 2005 8-K).
 
           
 
    31.1     Certification of Chief Executive Officer of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a).
 
           
 
    31.2     Certification of Chief Financial Officer of Periodic Report Pursuant to Rule 13a-14(a) and Rule 15d-14(a).
 
           
 
    32.1     Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.
 
           
 
    32.2     Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.

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SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
                                                             MGM MIRAGE
         
Date: August 9, 2005
  By:   /s/ J. TERRENCE LANNI
 
       
 
      J. Terrence Lanni
Chairman and Chief Executive Officer
(Principal Executive Officer)
 
       
Date: August 9, 2005
      /s/ JAMES J. MURREN
 
       
 
      James J. Murren
President, Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)

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