10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

For the fiscal year ended December 31, 2005

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

For the transition period                      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	(I.R.S. Employer
incorporation or organization)	Identification Number)

3600 Las Vegas Boulevard South – Las Vegas, Nevada 89109
(Address of principal executive office) (Zip Code)

(702) 693-7120
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

	Name of each exchange
Title of each class	on which registered
Common Stock, $.01 Par Value	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

     Indicate by check mark whether the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No o

     Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No þ

     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: Yes þ No o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K:                    

     Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act (check one):

Large accelerated filer þ     Accelerated filer o     Non-accelerated filer o

     Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act): Yes o No þ

     The aggregate market value of the Registrant’s Common Stock held by non-affiliates of the Registrant as of June 30, 2005 (based on the closing price on the New York Stock Exchange Composite Tape on June 30, 2005 was $5.1 billion. As of March 10, 2006, 284,758,777 shares of Registrant’s Common Stock, $.01 par value, were outstanding.

     Portions of the Registrant’s definitive Proxy Statement for its 2006 Annual Meeting of Stockholders are incorporated by reference into Part III of this Form 10-K.

TABLE OF CONTENTS

PART I
	ITEM 1.BUSINESS
	ITEM 1A. RISK FACTORS
	ITEM 1B. UNRESOLVED STAFF COMMENTS
	ITEM 2. PROPERTIES
	ITEM 3. LEGAL PROCEEDINGS
	ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
PART II
	ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
	ITEM 6. SELECTED FINANCIAL DATA
	ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
	ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
	ITEM 9A. CONTROLS AND PROCEDURES
	ITEM 9B. OTHER INFORMATION
PART III
	ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
	ITEM 11. EXECUTIVE COMPENSATION
	ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
	ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
	ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES
PART IV
	ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
SIGNATURES
Exhibit Index
Exhibit 10.1(30)
Exhibit 10.3(9)
Exhibit 10.4(5)
Exhibit 21
Exhibit 23
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
Exhibit 99

PART I

ITEM 1. BUSINESS

Overview

     MGM MIRAGE is one of the largest gaming companies in the world. We believe that we own the world’s finest collection of casino resorts. Our strategy is predicated on creating resorts of memorable character, treating our employees well and providing superior service for our guests. MGM MIRAGE was organized as MGM Grand, Inc. on January 29, 1986 and is a Delaware corporation. MGM MIRAGE acts largely as a holding company and its operations are conducted through wholly-owned subsidiaries. MGM MIRAGE is referred to as the “Company” or the “Registrant,” and together with our subsidiaries may also be referred to as “we,” “us” or “our.”

Acquisition of Mandalay Resort Group

     On April 25, 2005, we closed our merger with Mandalay Resort Group (“Mandalay”) under which we acquired Mandalay for $71 in cash for each share of common stock of Mandalay. The total acquisition cost, including the assumption of debt and transaction costs, was approximately $7.3 billion. As a result of the acquisition we are a much larger company, with ownership of or investments in 26 casino resorts versus 13, over 66,000 employees versus 40,000, and total assets of over $20 billion versus $11 billion. The acquisition expands our portfolio of resorts on the Las Vegas Strip, provides additional sites for future development and expands our employee and customer bases significantly.

Our Operating Casino Resorts

     We have provided below certain information about our casino resorts as of December 31, 2005. Except as otherwise indicated, we wholly own and operate the resorts shown below.

	Number of		Approximate
	Guestrooms		Casino Square				Gaming
Name and Location	and Suites		Footage		Slots (1)		Tables (2)
Las Vegas Strip, Nevada (3)
Bellagio		3,933		155,000		2,409		143
MGM Grand Las Vegas		5,044		156,000		2,593		172
Mandalay Bay (4)		4,756		157,000		1,949		127
The Mirage		3,044		118,000		2,056		109
Luxor		4,403		100,000		1,778		88
Treasure Island (“TI”)		2,885		90,000		1,800		64
New York-New York		2,024		84,000		1,867		85
Excalibur		3,990		100,000		1,762		73
Monte Carlo		3,002		102,000		1,726		74
Circus Circus Las Vegas (5)		3,764		133,000		2,364		92
Subtotal		36,845		1,195,000		20,304		1,027
Other Nevada
Primm Valley Resorts (Primm) (6)		2,642		137,000		2,854		94
Circus Circus Reno (Reno)		1,572		69,000		1,369		52
Silver Legacy — 50% owned (Reno)		1,710		87,000		1,707		68
Gold Strike (Jean)		811		37,000		737		15
Nevada Landing (Jean)		303		36,000		733		14
Colorado Belle (Laughlin)		1,173		50,000		1,167		39
Edgewater (Laughlin)		1,356		57,000		1,099		33
Railroad Pass (Henderson)		120		13,000		347		6
Other Domestic Operations
MGM Grand Detroit (Detroit, Michigan)		N/A		75,000		2,841		72
Beau Rivage (Biloxi, Mississippi) (7)		N/A		N/A		N/A		N/A
Gold Strike (Tunica, Mississippi)		1,133		40,000		1,345		48
Borgata — 50% owned (Atlantic City, NewJersey)		2,000		125,000		3,572		133
Grand Victoria — 50% owned (Elgin, Illinois)		N/A		34,000		1,100		37
Grand Total		49,665		1,955,000		39,175		1,638

(1)	Includes slot machines, video poker machines and other electronic gaming devices.
(2)	Includes blackjack (“21”), baccarat, craps, roulette and other table games; does not include poker.
(3)	Excludes Boardwalk, which closed in January 2006.
(4)	Includes the Four Seasons Hotel with 424 guest rooms and THEhotel with 1,117 suites.
(5)	Includes Slots-a-Fun.
(6)	Includes Primm Valley, Buffalo Bill’s and Whiskey Pete’s, along with the Primm Center gas station and convenience store.
(7)	Beau Rivage sustained significant damage in late August 2005 as a result of Hurricane Katrina and has been closed since. We expect to reopen Beau Rivage in the third quarter of 2006.

Bellagio

     Bellagio is widely recognized as one of the premier destination resorts in the world. Located at the heart of the Las Vegas Strip, Bellagio is the only casino resort to earn the prestigious Five Diamond award from the American Automobile Association (“AAA”), which it has earned for the last five years. The resort is richly decorated, including a conservatory filled with unique botanical displays that change with the seasons. At the front of Bellagio is an eight-acre lake featuring over 1,000 fountains that come alive at regular intervals in a choreographed ballet of water, music and lights. Bellagio features 200,000 square feet of convention space for the discerning group planner. For both business and leisure customers, Bellagio’s restaurants offer the finest choices, including Five Diamond award winners Picasso and Le Cirque. Entertainment options include O, produced and performed by Cirque du Soleil, the Light nightclub, and several other bars and lounges. Leisure travelers can also enjoy Bellagio’s expansive pool, world-class spa and Gallery of Fine Arts.

MGM Grand Las Vegas

     MGM Grand Las Vegas, located on the corner of the Las Vegas Strip and Tropicana Avenue, is one of the largest casino resorts in the world, and is the largest to receive the AAA's Four Diamond award. The resort’s guest rooms feature unique themes, including: West Wing, a recently remodeled area offering boutique-style rooms; Skylofts, ultra-suites on the 29^th floor featuring the ultimate in personal service; and the exclusive Mansion for premium gaming customers. MGM Grand Las Vegas features an extensive array of restaurants, including two new restaurants by renowned chef Joël Robuchon, Craftsteak, NOBHILL, SeaBlue, Pearl, Shibuya and Fiamma Trattoria. Other amenities include the Studio 54 nightclub, Tabu, the Ultra Lounge, Teatro, numerous retail shopping outlets, a 380,000 square foot state-of-the-art conference center, and an extensive pool and spa complex. During 2005, the resort opened a state-of-the-art poker room and a renovated sports book.

     Entertainment options at MGM Grand Las Vegas include KÀ, by Cirque du Soleil, performed in a custom-designed theatre seating almost 2,000 guests; headliner entertainment in the Hollywood Theatre; and La Femme. The MGM Grand Garden is a special events center with a seating capacity of over 16,000 that provides a venue for concerts by such stars as Madonna, Paul McCartney, the Rolling Stones, U2 and others, as well as championship boxing and other sporting events.

     We own a 50% interest in The Signature at MGM Grand, a condominium hotel development adjacent to the resort. The other 50% is owned by an affiliate of Turnberry Associates. All three luxury condominium towers are currently under construction. When complete, The Signature at MGM Grand will consist of over 1,700 total residences, and we will have the opportunity to rent the condominiums to third parties on behalf of owners who elect to have us do so.

Mandalay Bay

     Mandalay Bay is the first major resort on the Las Vegas Strip to greet visitors arriving by automobile from southern California. This AAA Four Diamond, South Seas-themed resort features numerous restaurants, such as Charlie Palmer’s Aureole, Wolfgang Puck’s Trattoria Del Lupo, China Grill, Hubert Keller’s Fleur de Lys, and Border Grill. Mandalay Bay’s pool area consists of an 11-acre tropical lagoon with numerous pools, a surfing beach, a lazy river, and Moorea Beach, a European-style “ultra” beach. Mandalay Bay also has a 30,000-square-foot spa. Mandalay Bay offers multiple entertainment venues that include a 12,000-seat special events arena, a 1,760-seat showroom featuring the Broadway hit Mamma Mia!, the House of Blues, and the Rumjungle restaurant and nightclub. In addition, Mandalay Bay features the Shark Reef, exhibiting sharks and rare sea predators.

     Included within Mandalay Bay is a Four Seasons Hotel with its own lobby, restaurants and pool and spa, providing visitors with a luxury “five-diamond” hospitality experience. THEhotel is an all-suite hotel tower within the Mandalay Bay complex. THEhotel includes its own spa and fitness center, a lounge and two restaurants, including Mix Las Vegas, created by famed chef Alain Ducasse and located on the top floor of THEhotel.

     The Mandalay Bay Conference Center is a convention and meeting complex adjacent to Mandalay Bay. The complex includes more than one million square feet of exhibit space. With this building and Mandalay Bay’s original conference center, Mandalay Bay offers almost two million gross square feet of conference and exhibit space. Connecting Mandalay Bay to Luxor is Mandalay Place, a retail center that includes approximately 90,000 square feet of retail space and approximately 40 boutique stores and restaurants, including stores by GF Ferre, Nike Golf and Urban Outfitters, restaurants by celebrity chefs Pierro Selvaggio, Hubert Keller and Rick Moonen, and the burlesque club Forty Deuce.

2

The Mirage

     The Mirage is a luxurious, tropically-themed resort located on a site shared with TI at the center of the Las Vegas Strip. The Mirage is recognized by AAA as a Four Diamond resort. The exterior of the resort is landscaped with palm trees, abundant foliage and more than four acres of lagoons and other water features centered around a 54-foot volcano and waterfall. Each evening, the volcano erupts at regular intervals, with flames that spectacularly illuminate the front of the resort. Inside the front entrance is an atrium with a tropical garden and additional water features capped by a 100-foot-high glass dome, designed to replicate the sights, sounds and fragrances of the South Seas. Located at the rear of the hotel, adjacent to the swimming pool area, is a dolphin habitat featuring Atlantic bottlenose dolphins and The Secret Garden of Siegfried & Roy, an attraction that allows guests to view the beautiful exotic animals of Siegfried & Roy, the world-famous illusionists.

     The Mirage features a wide array of restaurants, including Kokomos, Fin, Stack, Cravings, and Carnegie Deli. Several of these restaurants have been recently opened or renovated. Entertainment at The Mirage includes a show featuring Danny Gans, the renowned singer/impersonator, in The Danny Gans Theatre. We recently opened Jet, a 16,000-square foot nightclub. We are also constructing a custom theatre for a new Cirque du Soleil production based on the works of The Beatles, scheduled to open in mid-2006. The Mirage also has numerous retail shopping outlets and 170,000 square feet of convention space, including the 90,000-square foot Mirage Events Center.

Luxor

     Luxor is an Egyptian-themed hotel and casino complex situated between Mandalay Bay and Excalibur, which are all connected by a tram. Luxor offers 20,000 square feet of convention space, a 20,000-square-foot spa, the RA nightclub, and food and entertainment venues on three different levels beneath a soaring hotel atrium. Above the pyramid’s casino, the property offers a special format motion base ride and an IMAX 2D/3D theater. Luxor’s other public areas include restaurants, several cocktail lounges and a variety of specialty shops. Recently, the Luxor opened the Broadway hit musical Hairspray and added new headline entertainment from comedian Carrot Top.

Treasure Island (“TI”)

     TI is a Caribbean-themed resort located next to The Mirage and also holds the AAA Four Diamond rating. TI and The Mirage are connected by a monorail and a pedestrian bridge links TI to the Fashion Show Mall through a re-designed north entrance. TI features several restaurants, including Dishes, Isla Mexican Kitchen, Kahunaville, and Canter’s Deli. Bars and lounges at TI include Mist and Tangerine, which features indoor/outdoor space with views of the Las Vegas Strip and nightly burlesque entertainment. The showroom at TI features Mystère, produced and performed by Cirque du Soleil. The Sirens of TI Show is performed at the front of the resort, providing a significant presence to visitors on the Las Vegas Strip and beckoning visitors into TI.

New York-New York

     New York-New York is located at the corner of the Las Vegas Strip and Tropicana Avenue. Pedestrian bridges link New York-New York with both MGM Grand Las Vegas and Excalibur. The architecture at New York-New York replicates many of New York City’s landmark buildings and icons, including the Statue of Liberty, the Empire State Building, Central Park, the Brooklyn Bridge and a Coney Island-style roller coaster. The casino features highly themed interiors including Park Avenue with retail shops, a Central Park setting in the central casino area, and Little Italy with its traditional food court set inside a typical residential neighborhood. New York-New York also features several restaurants and numerous bars and lounges, including nationally recognized Coyote Ugly and ESPNZone and Nine Fine Irishmen, an authentic Irish Pub. Entertainment includes Zumanity by Cirque du Soleil and headline performer Rita Rudner.

Excalibur

     Excalibur is a castle-themed hotel and casino complex situated immediately north of Luxor at the corner of the Las Vegas Strip and Tropicana Avenue. Excalibur’s public areas include a Renaissance fair, a medieval village, an amphitheater with a seating capacity of nearly 1,000 where mock jousting tournaments and costume drama are presented nightly, two dynamic motion theaters, various artisans’ booths and medieval games of skill. In addition, Excalibur has a buffet restaurant, several themed restaurants, as well as several snack bars, cocktail lounges and a variety of specialty shops. The property also features a 13,000-square-foot spa. Excalibur, Luxor and Mandalay are connected by a tram, allowing guests to easily travel among these resorts.

3

Monte Carlo

     Through the acquisition of Mandalay we now own 100% of Monte Carlo, which is located on the Las Vegas Strip adjacent to New York-New York. Monte Carlo has a palatial style reminiscent of the Belle Époque, the French Victorian architecture of the late 19th century. The resort has amenities such as fine dining at Andre’s, a brew pub featuring live entertainment, a health spa, a beauty salon, and a 1,200-seat theatre featuring the world-renowned magician Lance Burton.

Circus Circus Las Vegas

     Circus Circus Las Vegas is a circus-themed hotel and casino complex situated on the north end of the Las Vegas Strip. From a “Big Top” above the casino, Circus Circus Las Vegas offers its guests a variety of circus acts performed daily, free of charge. A mezzanine area overlooking the casino has a circus midway with carnival-style games and an arcade that offers a variety of amusements and electronic games. Specialty restaurants, a buffet, a coffee shop, snack bars, several cocktail bars and a variety of specialty shops are also available to guests. The Adventuredome, covering approximately five acres, offers theme park entertainment that includes thrills rides for adults and children, themed carnival-style midway games, an arcade, food kiosks and souvenir shops, all in a climate-controlled setting under a giant space-frame dome.

Primm Valley Resorts

     The Primm Valley Resorts consist of three hotel-casinos on both sides of Interstate 15 at the California/Nevada state line in Primm, Nevada, approximately 40 miles south of Las Vegas. Buffalo Bill’s Resort & Casino, Primm Valley Resort & Casino, Whiskey Pete’s Hotel & Casino, Primm Valley Golf Club and three gas stations including the Primm Center (collectively, the “Primm Valley Resorts”) form a major destination location and offer visitors driving from California the first opportunity to wager upon entering Nevada and the last opportunity before leaving.

     Primm Valley Resorts offer an array of amenities and attractions, including a 25,000-square foot conference center, numerous restaurants, and a variety of amusement rides. The 6,100-seat Star of the Desert Arena hosts top-name entertainers. Connected to Primm Valley Resorts is the Fashion Outlet of Las Vegas, a shopping mall containing approximately 400,000 square feet of retail space with over 100 retail outlet stores. The Fashion Outlet is owned and operated by a third party.

Circus Circus Reno

     Circus Circus Reno is a circus-themed hotel and casino complex situated in downtown Reno, Nevada. Like its sister property in Las Vegas, Circus Circus Reno offers its guests a variety of circus acts performed daily, free of charge. A mezzanine area has a circus midway with carnival-style games and an arcade that offers a variety of amusements and electronic games. The property also has specialty restaurants, a buffet, a coffee shop, a deli/bakery, a snack bar, cocktail lounges, a gift shop and specialty shops.

Silver Legacy

     Through a wholly-owned entity, we are a 50% participant with Eldorado Limited Liability Company in Circus and Eldorado Joint Venture, which owns and operates Silver Legacy, a hotel-casino and entertainment complex situated in downtown Reno, Nevada. Silver Legacy is located between Circus Circus Reno and the Eldorado Hotel & Casino, which is owned and operated by an affiliate of our joint venture partner at Silver Legacy. Silver Legacy is connected at the mezzanine level with Circus Circus Reno and the Eldorado by enclosed climate-controlled skyways above the streets between the respective properties. The resort’s exterior is themed to evoke images of historical Reno. Silver Legacy features several restaurants and bars, a special events center, custom retail shops, a health spa and an outdoor pool and sun deck.

Gold Strike

     This property is an “Old West”-themed hotel-casino located on the east side of Interstate-15 in Jean, Nevada. Jean is located approximately 25 miles south of Las Vegas and approximately 15 miles north of the California-Nevada state line. The property has, among other amenities, a swimming pool and spa, several restaurants, a banquet center, a gift shop and an arcade. The casino has a stage bar with regularly scheduled live entertainment and a casino bar.

4

Nevada Landing

     Nevada Landing is a turn-of-the-century riverboat-themed hotel-casino located in Jean across Interstate 15 from Gold Strike. Nevada Landing includes a specialty restaurant, a full-service coffee shop, a buffet, a snack bar, a gift shop, a swimming pool and spa and a 300-guest banquet facility.

Colorado Belle

     Colorado Belle is situated on the bank of the Colorado River in Laughlin, Nevada, approximately 90 miles south of Las Vegas. Colorado Belle features a 600-foot replica of a Mississippi riverboat, and also includes a buffet, a coffee shop, specialty restaurants, a microbrewery, snack bars and cocktail lounges, as well as a gift shop and other specialty shops.

Edgewater

     Edgewater is located adjacent to Colorado Belle along the Colorado River. Edgewater’s facilities include a specialty restaurant, a coffee shop, a buffet, a snack bar and cocktail lounges.

Railroad Pass

     Railroad Pass is located in Henderson, Nevada, a suburb located southeast of Las Vegas, and is situated along US Highway 93, the direct route between Las Vegas and Phoenix, Arizona. The property includes, among other amenities, full-service restaurants, a buffet, a gift shop, a swimming pool and a banquet facility. In contrast with our other Nevada properties, Railroad Pass caters to local residents, particularly from Henderson and Boulder City.

MGM Grand Detroit

     MGM Grand Detroit is our interim casino facility in Detroit, Michigan. MGM Grand Detroit is one of three casinos licensed in Detroit and is operated by MGM Grand Detroit, LLC. MGM Grand Detroit, Inc., our wholly-owned subsidiary, holds a controlling interest in MGM Grand Detroit, LLC. A minority interest in MGM Grand Detroit, LLC is held by Partners Detroit, LLC, a Michigan limited liability company owned by residents and entities located in the Detroit metropolitan area. MGM Grand Detroit’s interior is decorated in an Art Deco motif with themed bars, a VIP lounge and several restaurants. The site is conveniently located off the Howard Street exit from the John C. Lodge Expressway in downtown Detroit, and has parking for over 3,000 vehicles in two parking garages and additional on-site covered parking.

Beau Rivage

     Beau Rivage sustained significant damage in late August 2005 as a result of Hurricane Katrina and has been closed since. We expect to reopen Beau Rivage in stages beginning in the third quarter of 2006. The damage was primarily concentrated on the lower levels, including the casino, restaurant and retail areas. We intend to rebuild Beau Rivage at its existing beachfront site where Interstate 110 meets the Gulf Coast in Biloxi, Mississippi. When fully reopened, Beau Rivage will include 1,740 guest rooms, over 2,000 slot machines and 90 table games, new and restored restaurants, a state-of-the-art convention center, and pool and spa amenities. Construction is also continuing on a world-class golf course, Fallen Oak, designed by renowned golf course architect Tom Fazio, to be located approximately 20 miles from the resort and scheduled to open in November 2006.

Gold Strike-Tunica

     Gold-Strike Tunica is a dockside casino located along the Mississippi River, 20 miles south of Memphis and approximately three miles west of Mississippi State Highway 61, a major north/south highway connecting Memphis with Tunica County. The property features an 800-seat showroom, a coffee shop, a specialty restaurant, a buffet, a snack bar and several cocktail lounges. Gold Strike-Tunica is part of a three-casino development covering approximately 72 acres. The other two casinos are owned and operated by unaffiliated third parties. We also own an undivided one-half interest in an additional 388 acres of land that may be used for future development.

5

Borgata

     The Borgata Hotel Casino and Spa is located at Renaissance Pointe in Atlantic City, New Jersey. In addition to its 2,000 guest rooms and suites and extensive gaming floor, Borgata includes several specialty restaurants, retail shops, a European-style health spa, meeting space and unique entertainment venues. Borgata was the first new casino in Atlantic City in over 13 years when it opened in July 2003. Through a wholly-owned subsidiary, we own 50% of the limited liability company that owns Borgata. Boyd Gaming Corporation (“Boyd”) owns the other 50% and also operates the resort.

     Borgata is currently expanding its gaming and non-gaming amenities, adding 36 casino table games and 500 slot machines, expanding its poker room and race book, and adding additional restaurant, entertainment and other amenities. This $200 million project is expected to be completed in the second quarter of 2006. Additionally, Borgata has plans to add another hotel tower, the Water Club at Borgata, featuring 800 guestrooms and suites, along with a new spa, parking garage and meeting rooms. This $325 million project is expected to be completed in late 2007. Neither project is expected to require contributions from us, as existing operating cash flow and Borgata’s recently renegotiated bank credit facility is anticipated to provide for the cost of the expansions.

Grand Victoria

     Through wholly-owned entities, we are a 50% participant with RBG, L.P. in an entity which owns Grand Victoria, a Victorian-themed riverboat casino and land-based entertainment complex in Elgin, Illinois, a suburb approximately 40 miles northwest of downtown Chicago. The riverboat offers dockside gaming, which means its operation is conducted at dockside without cruising. The property also features a dockside complex that contains an approximately 83,000-square-foot pavilion with a buffet, a fine dining restaurant, a VIP lounge and a gift shop.

Golf Courses

     We own and operate an exclusive world-class golf course, Shadow Creek, designed by Tom Fazio and located approximately ten miles north of our Las Vegas Strip resorts. Shadow Creek is ranked 3^rd in Golf Digest’s ranking of America’s 100 Greatest Public Courses. We also own and operate the Primm Valley Golf Club, located four miles south of the Primm Valley Resorts in California, which includes two 18-hole championship courses. These golf courses were also designed by Tom Fazio.

Future Development

Project CityCenter

     In November 2004 we announced a plan to develop a multi-billion dollar urban metropolis, Project CityCenter, on 66 acres of land on the Las Vegas Strip, between Bellagio and Monte Carlo. Project CityCenter will feature a 4,000-room casino resort designed by world-famous architect Cesar Pelli; two 400-room non-gaming boutique hotels, one of which will be managed by luxury hotelier Mandarin Oriental; approximately 470,000 square feet of retail shops, dining and entertainment venues; and approximately 2.3 million square feet of residential space in over 2,900 luxury condominium and condominium-hotel units in multiple towers.

     As currently contemplated, we believe Project CityCenter will cost approximately $7 billion, excluding preopening and land costs. After estimated proceeds of $2.5 billion from the sale of residential units, we believe the net project cost will be approximately $4.5 billion. We expect to complete the design work for Project CityCenter in mid-2006 and expect the project to open in 2009. The design, budget and schedule of Project CityCenter are still preliminary, and the ultimate timing, cost and scope of Project CityCenter are subject to risks attendant to large-scale projects.

Detroit, Michigan

     MGM Grand Detroit, LLC has operated an interim casino facility in downtown Detroit since July 1999. In August 2002 the Detroit City Council approved revised development agreements with our subsidiary and two other developers. The revised development agreement released us and the City from certain of the obligations under the original agreement and significantly changed other provisions of the original agreement.

     In April 2005, the 6^th Circuit Court of Appeals lifted its injunction prohibiting commencement of construction of the permanent hotel and casino complexes. We have obtained land and began construction on our permanent facility, which will be located near the site of our interim facility. The permanent facility is expected to open in late 2007 at a cost of approximately $765 million, including land and preopening costs, and will feature a 400-room hotel, 100,000-square foot casino, numerous restaurant and entertainment amenities, and spa and convention facilities. The complete design, timing and cost of the permanent facility are at a preliminary stage, and are subject to risks attendant to large-scale projects.

6

Macau

     We own 50% of MGM Grand Paradise Limited, an entity which is developing, and will operate, MGM Grand Macau, a hotel-casino resort in Macau S.A.R. Pansy Ho Chiu-king owns the other 50% of MGM Grand Paradise Limited. MGM Grand Macau will be located on a prime waterfront site and will feature at least 345 table games and 1,035 slots with room for significant expansion. Other features will include a 600-room hotel, a luxurious spa, convertible convention space, a variety of dining destinations, and other attractions. Construction of MGM Grand Macau, which is estimated to cost $1.1 billion including license and land rights and preopening costs, began in the second quarter of 2005 and the resort is anticipated to open in late 2007. The complete design, timing, cost and scope of the project are at a preliminary stage and are subject to the risks attendant to large-scale projects. We have invested $180 million in the venture, and are committed to loaning the venture up to $100 million. The venture has obtained commitments from lenders for a credit facility sufficient, along with equity contributions and shareholder loans, to fund the construction of MGM Grand Macau.

New York Racing Association

     We have 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. We 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 us is not fully repaid, for a fee. Recent legislative changes will allow us to operate the VLTs past the expiration date of the current NYRA franchise agreement.

Atlantic City, New Jersey

     We own approximately 130 acres on Renaissance Pointe in Atlantic City, New Jersey. We lease 10 acres to Borgata under long-term leases for use in its current operations and for its expansion. Of the remaining 120 acres, approximately 72 acres are suitable for development. We lease nine of these acres to Borgata on a short-term basis for surface parking and a portion of the remaining acres consists of common roads, landscaping and master plan improvements which we designed and developed as required by our agreement with Boyd. We own an additional 15 developable acres in the Marina District near Renaissance Pointe.

     We must apply for and receive numerous governmental permits and satisfy other conditions before construction of a new resort on the Renaissance Pointe site could begin. No assurance can be given that we will develop a casino resort in New Jersey, or its ultimate schedule, size, configuration or cost if we do develop a casino resort.

United Kingdom

     We continue to pursue development opportunities in the United Kingdom. We have entered into agreements or have formed strategic alliances with several companies in order to further these development efforts. We are currently pursuing opportunities in Birmingham, Glasgow, Newcastle and Sheffield. These opportunities are subject to certain conditions, including obtaining regional casino licenses and regulatory approvals, and the implementation of an acceptable tax regime. The Gambling Act 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 Gambling Act 2005 allows for an increase in the number of regional casinos, but it is uncertain whether more regional casinos will be approved in the near term.

Singapore

     In 2005 we agreed to form a joint venture with CapitaLand, a listed company in Singapore, to pursue one of two gaming licenses in Singapore. We will own 60% of the joint venture and would manage the resort. In April 2005, we and our partner CapitaLand, together with 11 other applicants, were successful in qualifying for the second round of the proposal process for the development of an integrated resort complex in the Marina Bayfront of Singapore. The Singapore government issued the request for proposals in the fourth quarter of 2005 and we are in the process of preparing our proposal response. Only three other bidders have indicated they expect to submit responses for the Marina site.

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Other

     We regularly evaluate possible expansion and acquisition opportunities in both the domestic and international markets. These opportunities may include the ownership, management and operation of gaming and other entertainment facilities in Nevada or in states other than Nevada or outside of the United States. We may undertake these opportunities either alone or in cooperation with one or more third parties. Development and operation of any gaming facility in a new jurisdiction is subject to many contingencies. Several of these contingencies are outside of our control and may include the passage of appropriate gaming legislation, the issuance of necessary permits, licenses and approvals, the availability of appropriate financing and the satisfaction of other conditions. We cannot be sure that we will decide or be able to proceed with any acquisition or expansion opportunities.

Operations

     We operate primarily in one segment, the operation of casino resorts, which includes offering gaming, hotel, dining, entertainment, retail and other resort amenities. Giving effect to the Mandalay merger, over half of our net revenue is 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 our competitive advantage.

     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 the high-end gaming segment, which can cause variability in our results.

     Most of our revenue is essentially cash-based, through customers wagering with cash or paying for non-gaming services with cash or credit cards. Our resorts, like many in the industry, generate significant operating cash flow. Our industry is capital intensive and we rely heavily on the ability of our resorts to generate operating cash flow to repay debt financing, fund maintenance capital expenditures and provide excess cash for future development.

     Our results of operations do not tend to be seasonal in nature, though a variety of factors can affect the results of any interim period, including the timing of major Las Vegas conventions, the amount and timing of marketing and special events for our high-end customers, and the level of play during major holidays, including New Year and Chinese New Year. Our significant convention and meeting facilities allow us to maximize hotel occupancy and customer volumes during off-peak times such as mid-week or during traditionally slower leisure travel periods, which also leads to better labor utilization.

     All of our casino resorts operate 24 hours each day, every day of the year, with the exception of Grand Victoria which operates 22 hours a day, every day of the year. Our primary casino operations are owned and managed by us. Other resort amenities may be owned and operated by us, owned by us but managed by third parties for a fee, or leased to third parties. We generally have an operating philosophy that prefers ownership of amenities, since guests have direct contact with staff in these areas and we prefer to control all aspects of the guest experience. However, we do lease space to retail and food and beverage operators in certain situations, particularly for branding opportunities. We also operate many “managed” outlets, utilizing third party management for specific expertise in areas such as restaurants and nightclubs, as well as for branding opportunities. Since we believe that the number of walk-in customers also affects the success of our casino resorts, we design our facilities to maximize their attraction to guests of other hotels.

     We utilize technology to maximize revenue and efficiency in our operations. We are in the process of combining our Players Club with Mandalay’s One Club program. When the process is complete, Players Club will link our major resorts, and consolidate all slots and table games activity for customers with a Players Club account. Under the combined program, customers will qualify for benefits across all of these resorts, regardless of where they play. We believe that our Players Club enables us to more effectively market to our customers. A significant portion of the slot machines at our resorts operate with International Game Technology’s EZ-Pay™ cashless gaming system, including the Mandalay resorts where we recently converted many of the slot machines to EZ-Pay™. We believe that this system enhances the customer experience and increases the revenue potential of our slot machines.

     Technology is a critical part of our strategy in non-gaming operations and administrative areas as well. Our hotel systems include yield management modules which allow us to maximize occupancy and room rates. Additionally, these systems capture most charges made by our customers during their stay, including allowing customers of any of our resorts to charge meals and services at other MGM MIRAGE resorts to their hotel accounts. We are implementing a new hotel management system at all our resorts in 2006 and 2007, which we expect will enhance our guest service and improve our yield management across our portfolio of resorts.

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Marketing and Competition

General

     Our casino resorts generally operate in highly competitive environments. We compete against other gaming companies as well as other hospitality and leisure and business travel companies. Our primary methods of competing successfully in a competitive environment include:

• Locating our resorts in desirable leisure and business travel markets, and operating at superior sites within those markets.

• Constructing and maintaining high-quality resorts and facilities, including luxurious guestrooms along with premier dining, entertainment and retail amenities;

• Recruiting, training and retaining well-qualified and motivated employees who provide superior and friendly customer service;

• Providing unique, “must-see” entertainment attractions; and

• Developing distinctive and memorable marketing and promotional programs.

Customers and Competition

     Our Las Vegas casino resorts compete for customers with a large number of other hotel-casinos in the Las Vegas area, including major hotel-casinos on or near the Las Vegas Strip, major hotel-casinos in the downtown area, which is about five miles from the center of the Strip, and several major facilities elsewhere in the Las Vegas area. According to the Las Vegas Convention and Visitors Authority, there were approximately 133,200 guestrooms in Las Vegas at December 31, 2005, up 1% from approximately 131,500 rooms at December 31, 2004. Las Vegas visitor volume was 38.6 million in 2005, a 3% increase from the 37.4 million reported for 2004. The principal segments of the Las Vegas gaming market are leisure travel, premium gaming customers, conventions, including small meetings and corporate incentive programs, and tour and travel. Our high-end properties, which include Bellagio, MGM Grand Las Vegas, Mandalay Bay, and The Mirage, appeal to the upper end of each market segment, balancing their business by using the convention and tour and travel segments to fill the mid-week and off-peak periods. Our marketing strategy for TI, New York-New York, Luxor and Monte Carlo is aimed at attracting middle- to upper-middle-income wagerers, largely from the leisure travel and, to a lesser extent, the tour and travel segments. Excalibur and Circus Circus Las Vegas generally cater to the value-oriented and middle-income leisure travel and tour and travel segments.

     Outside Las Vegas, our other wholly-owned Nevada operations, including those in Reno and Laughlin, compete with each other and with many other similar sized and larger operations. A significant portion of our customers at these resorts come from California. We believe the expansion of Native American gaming has had a negative impact on all of our Nevada resorts not located on the Las Vegas Strip, and the anticipated additional expansion in California could have a further adverse effect on these resorts. Our Nevada resorts not located in Las Vegas appeal primarily to middle-income customers attracted by room, food and beverage and entertainment prices that are lower than those offered by major Las Vegas hotel-casinos. Our target customer for these resorts is the value-oriented leisure traveler and the value-oriented local customer.

     Outside Nevada, our wholly-owned resorts mainly compete for customers in local gaming markets, where location is a critical success factor. In Tunica, Mississippi, one of our competitors is closer to Memphis, the area’s principal market. In addition, we compete with gaming operations in surrounding jurisdictions and other leisure destinations in each region. For instance, in Detroit, Michigan we also compete with a casino in nearby Windsor, Canada. In Biloxi, Mississippi we also compete with regional riverboat and land-based casinos in Louisiana, Native American casinos in central Mississippi, the south Florida leisure market, and with casinos in the Bahamas.

     Our unconsolidated affiliates mainly compete for customers against casino resorts in their respective markets, and in some cases against our wholly-owned operations. Much like our wholly-owned resorts, our unconsolidated affiliates compete through the quality of amenities, the value of the experience offered to guests, and the location of their resorts.

     Our Company’s facilities also compete for gaming customers with hotel-casino operations located in other areas of the United States and other parts of the world, and for leisure and business travelers with non-gaming tourist destinations such as Hawaii, Florida and cruise ships. Our hotel-casinos compete to a lesser extent with state-sponsored lotteries, off-track wagering, card parlors, and other forms of legalized gaming in the United States.

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Marketing

     We advertise on radio, television and billboards and in newspapers and magazines in selected cities throughout the United States and overseas, as well as on the Internet and by direct mail. We also advertise through our regional marketing offices located in major United States and foreign cities. A key element of marketing to premium gaming customers is personal contact by our marketing personnel. Direct marketing is also important in the convention segment. We maintain Internet websites which inform customers about our resorts and allow our customers to reserve hotel rooms and make restaurant and show reservations. We also operate call centers to allow customer contact by phone to make hotel, restaurant and show reservations.

     We utilize our world-class golf courses in marketing programs at our Las Vegas Strip and other Nevada resorts. Our major Las Vegas resorts offer luxury suite packages that include golf privileges at Shadow Creek. In connection with our marketing activities, we also invite our premium gaming customers to play Shadow Creek on a complimentary basis. We use Primm Valley Golf Club for marketing purposes at our Las Vegas and Primm resorts, including offering room and golf packages at special rates.

Competitive Risks

     The principal negative factors relating to our competitive position are:

• Our limited geographic diversification-our major resorts are concentrated on the Las Vegas Strip and some of our largest competitors operate in more gaming markets than we do;

• There are a number of gaming facilities located closer to where our customers live than our resorts;

• Our guestroom, dining and entertainment prices are often higher than those of most of our competitors in each market, although we believe that the quality of our facilities and services is also higher;

• Our hotel-casinos compete to some extent with each other for customers. Bellagio, MGM Grand Las Vegas, Mandalay Bay and The Mirage, in particular, compete for some of the same premium gaming customers; and

• Additional new hotel-casinos and expansion projects at existing Las Vegas hotel-casinos are under construction or have been proposed. We are unable to determine to what extent increased competition will affect our future operating results.

Control Over Gaming Activities

General

     In connection with the supervision of gaming activities at our casinos, we maintain stringent controls on the recording of all receipts and disbursements. These controls include:

• Locked cash boxes on the casino floor;

• Daily cash and coin counts performed by employees who are independent of casino operations;

• Constant observation and supervision of the gaming area;

• Observation and recording of gaming and other areas by closed-circuit television;

• Constant computer monitoring of our slot machines; and

• Timely analysis of deviations from expected performance.

Issuance of Markers

     Marker play represents a significant portion of the table games volume at Bellagio, MGM Grand Las Vegas, Mandalay Bay and The Mirage. Our other facilities do not emphasize marker play to the same extent, although we offer markers to customers at certain of those casinos as well.

     We maintain strict controls over the issuance of markers and aggressively pursue collection from those customers who fail to pay their marker balances timely. These collection efforts are similar to those used by most large corporations when dealing with overdue customer accounts, including the mailing of statements and delinquency notices, personal contacts, the use of outside collection agencies and civil litigation. A significant portion of our Company’s accounts receivable, for amounts unpaid resulting from markers which are not collectible through banking channels, is owed by major casino customers from the Far East. The collectibility of unpaid markers is affected by a number of factors, including changes in currency exchange rates and economic conditions in the customers’ home countries.

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     In Nevada, Mississippi, Michigan, and Illinois, amounts owed for markers which are not timely paid are enforceable under state laws. All other states are required to enforce a judgment for amounts owed for markers entered into in Nevada, Mississippi, Illinois or Michigan which are not timely paid, pursuant to the Full Faith and Credit Clause of the United States Constitution. Amounts owed for markers which are not timely paid are not legally enforceable in some foreign countries, but the United States assets of foreign customers may be reached to satisfy judgments entered in the United States.

Employees and Labor Relations

     As of December 31, 2005, we had approximately 54,500 full-time and 12,000 part-time employees. At that date, we had collective bargaining contracts with unions covering approximately 29,000 of our employees. We consider our employee relations to be good.

Regulation and Licensing

     The gaming industry is highly regulated, and we must maintain our licenses and pay gaming taxes to continue our operations. Each of our casinos is subject to extensive regulation under the laws, rules and regulations of the jurisdiction where it is located. These laws, rules and regulations generally concern the responsibility, financial stability and character of the owners, managers, and persons with financial interest in the gaming operations. Violations of laws in one jurisdiction could result in disciplinary action in other jurisdictions. A more detailed description of the regulations to which we are subject is contained in Exhibit 99 to this Annual Report on Form 10-K, which Exhibit is incorporated herein by reference.

     Our businesses are subject to various federal, state and local laws and regulations in addition to gaming regulations. These laws and regulations include, but are not limited to, restrictions and conditions concerning alcoholic beverages, environmental matters, employees, currency transactions, taxation, zoning and building codes, and marketing and advertising. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our operating results.

Forward-looking Statements

(Cautionary Statements Under the Private Securities Litigation Reform Act of 1995)

     This Form 10-K and our 2005 Annual Report to Stockholders contain some forward-looking statements. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They contain words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “may,” “could,” “might” and other words or phrases of similar meaning in connection with any discussion of future operating or financial performance. In particular, these include statements relating to future actions, new projects, future performance, the outcome of contingencies such as legal proceedings and future financial results. From time to time, we also provide oral or written forward-looking statements in our Forms 10-Q and 8-K, press releases and other materials we release to the public. Any or all of our forward-looking statements in this Form 10-K, in our 2005 Annual Report to Stockholders and in any other public statements we make may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Many factors mentioned in this Form 10-K — for example, government regulation and the competitive environment — will be important in determining our future results. Consequently, no forward-looking statement can be guaranteed. Our actual future results may differ materially.

     We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our Forms 10-K, 10-Q and 8-K reports to the Securities and Exchange Commission. Also note that we provide the following discussion of risks, uncertainties and possible inaccurate assumptions relevant to our business. This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995.

       You should also be aware that while we from time to time communicate with securities analysts, we do not disclose to them any material non-public information, internal forecasts or other confidential business information. Therefore, you should not assume that we agree with any statement or report issued by any analyst, irrespective of the content of the statement or report. To the extent that reports issued by securities analysts contain projections, forecasts or opinions, those reports are not our responsibility.

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Factors that May Affect Our Future Results

     You should be aware that the occurrence of any of the events described in this section and elsewhere in this report or in any other of our filings with the SEC could have a material adverse effect on our business, financial position, results of operations and cash flows. In evaluating us, you should consider carefully, among other things, the risks described below.

• We have significant indebtedness. At December 31, 2005, we had approximately $12.4 billion of indebtedness. The interest rate on a large portion of our long-term debt will be subject to fluctuation based on changes in short-term interest rates and the level of debt-to-EBITDA (as defined) under the provisions of our senior credit facility. Our current bank credit agreements and the indentures governing our debt securities do not prohibit us from borrowing additional funds in the future. Our interest expense could increase as a result of these factors. Additionally, our indebtedness could increase our vulnerability to general adverse economic and industry conditions, limit our flexibility in planning for or reacting to changes in our business and industry, limit our ability to borrow additional funds and place us at a competitive disadvantage compared to other less leveraged competitors. Our ability to reduce our outstanding debt will be subject to our future cash flows, other capital requirements and other factors, some of which are not within our control.

• Our casinos in Las Vegas and elsewhere are destination resorts that compete with other destination travel locations throughout the United States and the world. We do not believe that our competition is limited to a particular geographic area, and gaming operations in other states or countries could attract our customers. To the extent that new casinos enter our markets or hotel room capacity is expanded by others in major destination locations, competition will increase. Major competitors, including new entrants, have either recently expanded their hotel room capacity or are currently expanding their capacity or constructing new resorts in Las Vegas. Also, the recent growth of gaming in areas outside Las Vegas, including California, has increased the competition faced by our operations in Las Vegas and elsewhere. In particular, as large scale gaming operations in Native American tribal lands increase, competition will increase.

• The expansion of Native American gaming in California has already impacted our operations. According to the California Gambling Control Commission, more than 60 compacts with tribes had been approved by the federal government as of December 31, 2005, with more than 50 of the tribes legally operating casinos in California in accordance with these compacts. Additional expansion of gaming in California could have an adverse impact on our results of operations.

• The ownership and operation of gaming facilities are subject to extensive federal, state and local laws, regulations and ordinances, which are administered by the relevant regulatory agencies in each jurisdiction. These laws, regulations and ordinances vary from jurisdiction to jurisdiction, but generally concern the responsibility, financial stability and character of the owners and managers of gaming operations as well as persons financially interested or involved in gaming operations. As such, our gaming regulators can require us to disassociate ourselves from suppliers or business partners found unsuitable by the regulators. For a summary of gaming regulations that affect our business, see “Regulation and Licensing.” The regulatory environment in any particular jurisdiction may change in the future and any such change could have a material adverse effect on our results of operations. In addition, we are subject to various gaming taxes, which are subject to possible increase at any time. For instance, the gaming tax rate in Michigan was increased in 2004.

• Our business is affected by economic and market conditions in the markets in which we operate and in the locations our customers reside. Bellagio, MGM Grand Las Vegas, Mandalay Bay and The Mirage are particularly affected by economic conditions in the Far East, and all of our Nevada resorts are affected by economic conditions in the United States, and California in particular. A recession or economic slowdown could cause a reduction in visitation to our resorts, which would adversely affect our operating results.

• Certain of our casino properties are located in areas that may be subject to extreme weather conditions, including, but not limited to, hurricanes. Such extreme weather conditions may interrupt our operations, damage our properties, and reduce the number of customers who visit our facilities in such areas. Although we maintain both property and business interruption insurance coverage for certain extreme weather conditions, such coverage is subject to deductibles and limits on maximum benefits, including limitation on the coverage period for business interruption, and we cannot assure you that we will be able to fully insure such losses or fully collect, if at all, on claims resulting from such extreme weather conditions. Furthermore, such extreme weather conditions may interrupt or impede access to our affected properties and may cause visits to our affected properties to decrease for an indefinite period. For example, in August 2005, Hurricane Katrina caused significant damage to our Beau Rivage resort. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Statement Impact of Hurricane Katrina.”

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•	We are a large consumer of electricity and other energy. Accordingly, increases in energy costs, such as those experienced recently may have a negative impact on our operating results. Additionally, higher energy and gasoline prices which affect our customers may result in reduced visitation to our resorts and a reduction in our revenues. For example, Nevada Power, which supplies power to our Las Vegas resorts, recently submitted a rate request which would significantly increase our cost of electricity at those resorts.
•	Many of our customers travel by air. As a result, the cost and availability of air service and the impact of events like those of September 11, 2001, can affect our business. Additionally, there is one principal interstate highway between Las Vegas and Southern California, where a large number of our customers reside. Capacity constraints of that highway or any other traffic disruptions may affect the number of customers who visit our facilities.
•	Leisure and business travel, especially travel by air, are particularly susceptible to global geopolitical events, such as terrorist attacks or acts of war or hostility, which can create economic and political uncertainties that could adversely impact our business levels. Furthermore, although we have been able to purchase some insurance coverage for certain types of terrorist acts, insurance coverage against loss or business interruption resulting from war and some forms of terrorism continues to be unavailable.
•	Our joint venture for the construction and operation of a hotel-casino in Macau S.A.R. involves significant risks. In June 2004, we announced that we entered into a joint venture agreement with Pansy Ho Chiu-king to develop, build and operate a major hotel-casino resort in Macau S.A.R. The facility, MGM Grand Macau, will be jointly owned and operated by the two shareholders. MGM Grand Macau’s operations will be subject to unique risks, including risks related to: (a) Macau’s regulatory framework; (b) our ability to adapt to the different regulatory and gaming environment in Macau while remaining in compliance with the requirements of the gaming regulatory authorities in the jurisdictions in which we currently operate, as well as other applicable federal, state, or local laws in the United States and Macau; (c) the transition of Macau from a Portuguese colony to a special administrative region of the People’s Republic of China; and (d) the extreme weather conditions in the region.
	Furthermore, any such operations in Macau or any future operations in which we may engage in any other foreign territories are subject to risk pertaining to international operations, including foreign currency risks, foreign government regulations that may make it difficult for us to operate in a profitable manner in such jurisdiction, inability to adequately enforce our rights in such jurisdiction, general geopolitical risks such as political and economic instability, hostilities with neighboring countries and changes in diplomatic and trade relationships, and potentially adverse tax consequences.
•	Our plans for future construction can be affected by a number of factors, including time delays in obtaining necessary governmental permits and approvals and legal challenges. We may make changes in project scope, budgets and schedules for competitive, aesthetic or other reasons, and these changes may also result from circumstances beyond our control. These circumstances include weather interference, shortages of materials and labor, work stoppages, labor disputes, unforeseen engineering, environmental or geological problems and unanticipated cost increases. Any of these circumstances could give rise to delays or cost overruns. Major expansion projects at our existing resorts can also result in disruption of our business during the construction period.
•	Claims have been brought against us and our subsidiaries in various legal proceedings, and additional legal and tax claims arise from time to time. It is possible that our cash flows and results of operations could be affected by the resolution of these claims. We believe that the ultimate disposition of current matters will not have a material impact on our financial condition or results of operations. Please see the further discussion under “Legal Proceedings.”
•	There is intense competition to attract and retain qualified management and other employees in the gaming industry. Our inability to recruit or retain personnel could adversely affect our business.
•	Tracinda Corporation beneficially owns approximately 56% of our outstanding common stock as of December 31, 2005. As a result, Tracinda Corporation has the ability to elect our entire Board of Directors and determine the outcome of other matters submitted to our stockholders, such as the approval of significant transactions.

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Executive Officers of the Registrant

     The following table sets forth, as of March 1, 2006, the name, age and position of each of our executive officers. Executive officers are elected by and serve at the pleasure of the Board of Directors.

Name	Age		Position
J. Terrence Lanni		62	Chairman and Chief Executive Officer
James J. Murren		44	President, Chief Financial Officer, Treasurer and Director
John T. Redmond		47	President and Chief Executive Officer of MGM Grand Resorts, LLC and Director
Robert H. Baldwin		55	President and Chief Executive Officer of Mirage Resorts, Incorporated, President of Project CityCenter and Director
Gary N. Jacobs		60	Executive Vice President, General Counsel, Secretary and Director
Glenn D. Bonner		54	Senior Vice President and Chief Information Officer
Daniel J. D’Arrigo		37	Senior Vice President—Finance
Alan Feldman		47	Senior Vice President—Public Affairs
Bruce Gebhardt		58	Senior Vice President—Global Security
Phyllis A. James		53	Senior Vice President and Senior Counsel
Punam Mathur		45	Senior Vice President—Corporate Diversity and Community Affairs
Cynthia Kiser Murphey		48	Senior Vice President—Human Resources
Shawn T. Sani		40	Senior Vice President—Taxes
Robert C. Selwood		50	Senior Vice President—Accounting
Bryan L. Wright		42	Senior Vice President, Assistant General Counsel and Assistant Secretary

     Mr. Lanni has served as Chairman of the Company since July 1995. He served as Chief Executive Officer of the Company from June 1995 to December 1999, and since March 2001. Prior thereto, he served in various executive capacities at Caesars World, Inc., including its President and Chief Operating Officer from 1981 to 1995.

     Mr. Murren has served as President of the Company since December 1999, as Chief Financial Officer since January 1998 and as Treasurer since November 2001. He served as Executive Vice President of the Company from January 1998 to December 1999. Prior thereto, he was Managing Director and Co-Director of Research for Deutsche Morgan Grenfell, having served that firm in various other capacities since 1984.

     Mr. Redmond has served as President and Chief Executive Officer of MGM Grand Resorts, LLC since March 2001. He served as Co-Chief Executive Officer of the Company from December 1999 to March 2001. He served as President and Chief Operating Officer of Primadonna Resorts from March 1999 to December 1999. He served as Vice Chairman of MGM Grand Detroit, LLC from April 1998 to February 2000, and as its Chairman since February 2000. He served as Senior Vice President of MGM Grand Development, Inc. from August 1996 to September 1998. Prior thereto, he was Senior Vice President and Chief Financial Officer of Caesars World, Inc.’s Caesars Palace and Desert Inn hotel-casinos and served in various other senior operational and development positions with Caesars World, Inc.

     Mr. Baldwin has served as President and Chief Executive Officer of Mirage Resorts since June 2000 and as President of Project CityCenter since March 2005. He served as Chief Financial Officer and Treasurer of Mirage Resorts from September 1999 to June 2000. He was President and Chief Executive Officer of Bellagio, LLC from June 1996 to March 2005. He served as President and Chief Executive Officer of The Mirage from August 1987 to April 1997.

     Mr. Jacobs has served as Executive Vice President and General Counsel of the Company since June 2000 and as Secretary since January 2002. Prior thereto, he was a partner with the law firm of Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP, and is currently of counsel to that firm.

     Mr. Bonner has served as Senior Vice President and Chief Information Officer of the Company since January 2005. He served as Vice President—Chief Information Officer of the Company from June 2000 to January 2005. He served as Chief Information Officer of Mirage Resorts from January 1997 to May 2000. Prior thereto, he was a Managing Consultant with Microsoft Corporation from October 1994 to January 1997.

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     Mr. D’Arrigo has served as Senior Vice President—Finance of the Company since February 2005. He served as Vice President—Finance of the Company from December 2000 to February 2005. He served as Assistant Vice President of the Company from January 2000 to December 2000. Prior thereto, he served as Director of Corporate Finance of the Company from January 1997 to January 2000 and as Manager of Corporate Finance of the Company from October 1995 to January 1997.

     Mr. Feldman has served as Senior Vice President—Public Affairs of the Company since September 2001. He served as Vice President — Public Affairs of the Company from June 2000 to September 2001, and served as Vice President of Public Affairs for Mirage Resorts from March 1990 to May 2000.

     Mr. Gebhardt has served as Senior Vice President—Global Security of the Company since November 2004. Prior thereto, he served as a Special Agent of the Federal Bureau of Investigation for over 30 years, and was the FBI’s Deputy Director for two years prior to his retirement in October 2004.

     Ms. James has served as Senior Vice President and Senior Counsel of the Company since March 2002. From 1994 to 2001 she served as Corporation (General) Counsel and Law Department Director for the City of Detroit. In that capacity she also served on various public and quasi-public boards and commissions on behalf of the City, including the Election Commission, the Detroit Building Authority and the Board of Ethics. Prior thereto, from 1985 until 1994, she practiced law as a partner with the firm of Pillsbury, Madison & Sutro.

     Ms. Mathur has served as Senior Vice President—Corporate Diversity and Community Affairs of the Company since May 2004. She served as Vice President—Corporate Diversity and Community Affairs of the Company from December 2001 to May 2004. She served as Vice President—Community Affairs of the Company from November 2000 to December 2001 and as Director of Community Affairs of the Company from June 2000 to October 2000. She served as Director of Community Affairs of Mirage Resorts from April 1996 to May 2000.

     Ms. Murphey has served as Senior Vice President—Human Resources of the Company since November 2000. She served as Senior Vice President—Human Resources and Administration of MGM Grand Las Vegas from November 1995 to October 2000.

     Mr. Sani has served as Senior Vice President—Taxes of the Company since July 2005. He served as Vice President—Taxes of the Company from June 2002 to July 2005. Prior thereto he was a partner in the Transaction Advisory Services practice of Arthur Andersen LLP, having served that firm in various other capacities since 1988.

     Mr. Selwood has served as Senior Vice President—Accounting of the Company since February 2005. He served as Vice President—Accounting of the Company from December 2000 to February 2005. He served as Director of Corporate Finance of Mirage Resorts from April 1993 to December 2000.

     Mr. Wright has served as Senior Vice President and Assistant General Counsel of the Company since March 2005. He served as Vice President and Assistant General Counsel of the Company from July 2001 to March 2005. He has served as Assistant Secretary of the Company since January 2002. Prior to joining the Company, Mr. Wright served as Vice President and Assistant General Counsel of Boyd Gaming Corporation from February 2000 to July 2001 and as Associate General Counsel of Boyd Gaming Corporation from September 1993 to February 2000.

Available Information

     We maintain a website, www.mgmmirage.com, which includes financial and other information for investors. We provide access to our SEC filings on our website, free of charge, through a link to the SEC’s EDGAR database. Through that link, our filings are available as soon as reasonably practicable after we file the documents.

ITEM 1A. RISK FACTORS

     We incorporate by reference the information appearing under “Factors that May Affect Our Future Results” in Item 1 of this Form 10-K .

ITEM 1B. UNRESOLVED STAFF COMMENTS

     None.

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ITEM 2. PROPERTIES

     Our principal executive offices are located at Bellagio. The following table lists our significant land holdings. Unless otherwise indicated, all properties are wholly-owned.

	Approximate
Name and Location	Acres	Notes
Las Vegas, Nevada operations:
Bellagio	78	One acre is subject to a ground lease that expires (giving effect to our options to renew) in 2073.
MGM Grand Las Vegas	104
Mandalay Bay	100
The Mirage	100	Site is shared with TI.
Luxor	60
TI	NA	See The Mirage.
New York-New York	24	Approximately 2 acres will be used for the Project CityCenter residential sales office.
Excalibur	52
Monte Carlo	28	Approximately 4 acres will be used for Project CityCenter.
Circus Circus Las Vegas	69	Includes Slots-a-Fun.
Shadow Creek Golf Course	240
Other Nevada operations:
Circus Circus Reno	7	A portion of the site is subject to two ground leases, which expire in 2032 and 2033, respectively.
Primm Valley Resorts	143	Substantially all leased under a ground lease that expires (giving effect to our renewal option) in 2068.
Primm Valley Golf Club	448	Located in California, 4 miles from the Primm Valley Resorts.
Laughlin properties	38	Colorado Belle occupies 22 acres; Edgewater occupies 16 acres.
Jean, Nevada properties	106	Gold Strike occupies 51 acres; Nevada Landing occupies 55 acres.
Railroad Pass, Aenderson, Nevada	9
Other domestic operations:
MGM Grand Detroit	8
Beau Rivage, Biloxi, Mississippi	41	Includes 10 acres of tidelands leased from the State of Mississippi under a lease that expires (giving effect to our option to renew) in 2049.
Gold Strike, Tunica, Mississippi	24
Other land:
Las Vegas Strip – central	66	Future site of Project CityCenter; includes the site of the former Boardwalk.
	10	Located immediately behind New York-New York; a portion of this site will be used for temporary facilities related to construction of Project CityCenter.
Las Vegas Strip — south	20	Located immediately south of Mandalay Bay.
	15	Located across the Las Vegas Strip from Luxor.
North Las Vegas, Nevada	66	Located adjacent to Shadow Creek.
Henderson, Nevada	47	Adjacent to Railroad Pass.
Primm, Nevada	141	Approximately 16 acres immediately north of Buffalo Bill’s and approximately 125 acres adjacent to Primm Valley Golf Club.
Jean, Nevada	61	Located adjacent to Gold Strike.
Sloan, Nevada	89
Detroit, Michigan	25	Future site of permanent MGM Grand Detroit casino.
Biloxi, Mississippi	508	Future site of Fallen Oak Golf Course.
Tunica, Mississippi	388	We own an undivided 50% interest in this site with another, unaffiliated, gaming company.
Atlantic City, New Jersey	153	Approximately 19 acres are leased to Borgata, including nine acres under a short-term lease. Of the remaining land, approximately 77 acres are suitable for development.

     Prior to February 2005, substantially all of the Company’s assets other than assets of its foreign subsidiaries and certain assets in use at MGM Grand Detroit were pledged as collateral for our senior notes and principal credit facilities. As a result of the redemption of our 6.875% Senior Notes due February 2008 and the repayment of our 6.95% senior notes due February 2005, we applied for, and received, release of collateral under our credit facility and senior notes.

     We have contributed approximately 7 acres of land adjacent to MGM Grand Las Vegas to ventures formed with Turnberry Associates to develop The Signature at MGM Grand. The land is collateralized by construction financing for Towers 1 and 2 in the amount of up to $440 million. As of December 31, 2005, $121 million was outstanding under the construction financing.

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     Silver Legacy occupies approximately 5 acres in Reno, Nevada, adjacent to Circus Circus Reno. The site is collateralized by a mortgage securing Silver Legacy’s senior credit facility and 10.125% mortgage notes. As of December 31, 2005, $160 million of principal of the 10.125% mortgage notes were outstanding.

     Primm Valley Resorts are not served by a municipal water system. We have rights to water in various wells located on federal land in the vicinity of the Primm Valley Resorts and have received permits to pipe the water to the Primm Valley Resorts. These permits and rights are subject to the jurisdiction and ongoing regulatory authority of the U.S. Bureau of Land Management, the States of Nevada and California and local governmental units. We believe that adequate water for the Primm Valley Resorts is available; however, we cannot be certain that the future needs will be within the permitted allowance. Also, we can give no assurance that any future requests for additional water will be approved or that no further requirements will be imposed by governmental agencies on our use and delivery of water for the Primm Valley Resorts.

     Borgata occupies approximately 46 acres at Renaissance Pointe, including 19 acres we lease to Borgata. Borgata owns approximately 27 acres which are collateralized by a mortgage securing bank credit facilities in the amount of up to $750 million. As of December 31, 2005, $342 million was outstanding under the bank credit facility.

     We also own or lease various other improved and unimproved property in Las Vegas and other locations in the United States and certain foreign countries.

ITEM 3. LEGAL PROCEEDINGS

Poulos Slot Machine Litigation

     On April 26, 1994, an individual filed a complaint in a class action lawsuit in the United States District Court for the Middle District of Florida against 41 manufacturers, distributors and casino operators of video poker and electronic slot machines, including the Company. On May 10, 1994, another plaintiff filed a complaint in a class action lawsuit alleging substantially the same claims in the same court against 48 defendants, including the Company. On September 26, 1995, another plaintiff filed a complaint in a class action lawsuit alleging substantially the same claims in the United States District Court for the District of Nevada against 45 defendants, including the Company. The court consolidated the three cases in the United States District Court for the District of Nevada.

     The consolidated complaint claims that we and the other defendants have engaged in a course of fraudulent and misleading conduct intended to induce people to play video poker and electronic slot machines based on a false belief concerning how the gaming machines operate, as well as the chances of winning. Specifically, the plaintiffs allege that the gaming machines are not truly random as advertised to the public, but are pre-programmed in a predictable and manipulative manner. The complaint alleges violations of the Racketeer Influenced and Corrupt Organizations Act, as well as claims of common law fraud, unjust enrichment and negligent misrepresentation, and asks for unspecified compensatory and punitive damages. In December 1997, the court granted in part and denied in part the defendants’ motions to dismiss the complaint for failure to state a claim and ordered the plaintiffs to file an amended complaint, which they filed in February 1998. We, along with most of the other defendants, answered the amended complaint and continue to deny the allegations contained in the amended complaint. The parties have fully briefed the issues regarding class certification, which are currently pending before the court.

     In June 2002, the U.S. District Court in Nevada ruled that the plaintiffs met certain prerequisite requirements for class action status, but the court denied the plaintiffs’ motion for class action certification, on the grounds that the proposed class lacked the cohesiveness required to settle common claims against the casino industry. The court had previously stayed discovery pending resolution of these class certification issues. In August 2004, the Ninth Circuit Court of Appeals affirmed the District Court’s ruling denying class action status for the case. In November 2004, the District Court set a discovery deadline of April 2005 and trial in September 2005. After plaintiffs’ dismissal of certain operator and cruise ship defendants, the remaining defendants in April 2005 filed dispositive motions for summary judgment. In September 2005, the District Court entered an order granting summary judgment to all defendants that remained in the case on all of plaintiffs’ claims, dismissed the case in its entirety and entered judgment in favor of defendants. In October 2005, plaintiffs filed an appeal to the Ninth Circuit Court of Appeals of the judgment granting summary judgment to defendants, and of two prior discovery orders that had been entered in the case. The appeal remains pending.

17

Boardwalk Shareholder Litigation

     On September 28, 1999, a former stockholder of our subsidiary which owns and, until January 2006 operated, the Boardwalk Hotel and Casino filed a first amended complaint in a putative class action lawsuit in District Court for Clark County, Nevada against Mirage Resorts and certain former directors and principal stockholders of the Boardwalk subsidiary. The complaint alleged that Mirage Resorts induced the other defendants to breach their fiduciary duties to Boardwalk’s minority stockholders by devising and implementing a scheme by which Mirage Resorts acquired Boardwalk at significantly less than the true value of its shares. The complaint sought an unspecified amount of compensatory damages from Mirage Resorts and punitive damages from the other defendants, whom we are required to defend and indemnify.

     In June 2000, the court granted our motion to dismiss the complaint for failure to state a claim upon which relief may be granted. The plaintiff appealed the ruling to the Nevada Supreme Court. The parties filed briefs with the Nevada Supreme Court, and oral arguments were conducted in October 2001. In February 2003, the Nevada Supreme Court overturned the District Court’s order granting our motion to dismiss the complaint and remanded the case to the District Court for further proceedings on the elements of the lawsuit involving wrongful conduct in approving the merger and/or in the valuation of the merged corporation’s shares. The Nevada Supreme Court affirmed the District Court’s dismissal of the plaintiff’s claims for lost profits and mismanagement. The Nevada Supreme Court’s ruling relates only to the District Court’s ruling on our motion to dismiss and is not a determination of the merits of the plaintiff’s case. The plaintiff filed an amended complaint, and in November 2003, the District Court certified the action as a class action.

     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 in the process of documentation and 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 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 in June 2004 in the 8^th Judicial District Court for Clark County, Nevada, and Robert Lowinger v. Mandalay Resort Group, et al., which was filed in June 2004, also in the 8^th 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. In December 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. In January 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 in April 2005. In October 2005, the Nevada District Court issued a minute order dismissing the Ham case. In November 2005, a formal decision, order and judgment of dismissal of the case was entered. Plaintiff in the Lowinger case has indicated his intention to file a voluntary dismissal of his action, but the dismissal has not yet been filed. The Company will continue to monitor and protect its interest in these cases until their final conclusion.

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 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There were no matters submitted to a vote of our security holders during the fourth quarter of 2005.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

     Effective May 2, 2005, our common stock is traded on the New York Stock Exchange under the symbol “MGM” — formerly our stock trading symbol was “MGG.” The following table sets forth, for the calendar quarters indicated, the high and low sale prices of our common stock on the New York Stock Exchange Composite Tape. These prices, along with all share and per share information in this Form 10-K, have been adjusted for a 2-for-1 stock split effected in May 2005.

	2005				2004
	High		Low		High		Low
First quarter	$	39.80	$	34.50	$	23.09	$	18.36
Second quarter		42.98		32.58		24.89		20.50
Third quarter		46.75		39.30		25.07		19.81
Fourth quarter		44.75		35.30		36.75		24.58

     There were approximately 3,703 record holders of our common stock as of March 1, 2006.

     We have not paid dividends on our common stock in the last two fiscal years. We intend to retain our earnings to fund the operation of our business, to service and repay our debt, to make strategic investments in high return growth projects at our proven resorts, to repurchase shares of common stock and to reserve our capital to raise our capacity to capture investment opportunities overseas and in emerging domestic markets. Furthermore, as a holding company with no independent operations, our ability to pay dividends will depend upon the receipt of dividends and other payments from our subsidiaries. Our senior credit facility contains financial covenants that could restrict our ability to pay dividends. Our Board of Directors periodically reviews our policy with respect to dividends, and any determination to pay dividends in the future will be at the sole discretion of the Board of Directors.

     The following table includes information about our stock option plans at December 31, 2005:

	Number of securities				Number of securities
	to be issued upon		Weighted average		remaining available
	exercise of		exercise price of		for future issuance
	outstanding options,		outstanding options,		under equity
	warrants and rights		warrants and rights		compensation plans
	(in thousands, except per share data)
Equity compensation plans approved by security holders		34,607	$	22.85		6,540
Equity compensation plans not approved by security holders (1)		—		—		—

(1) In May 2002, the Board of Directors approved a restricted stock plan, not approved by security holders, under which 1,806,000 shares were issued. In November 2002, the Board of Directors determined that no more restricted stock awards would be granted. At December 31, 2005, there were 834,000 restricted shares outstanding, all of which will become unrestricted in 2006.

     Our share repurchases are only conducted under repurchase programs approved by our Board of Directors and publicly announced. The following table includes information about our share repurchases for the quarter ended December 31, 2005:

					Shares Purchased		Maximum
	Total		Average		As Part of a		Shares Still
	Shares		Price Per		Publicly-Announced		Available for
	Purchased		Share		Program		Repurchase
October 1 – October 31, 2005		1,107,000	$	37.59		1,107,000		16,893,000	(1)
November 1 – November 30, 2005		2,393,000		37.92		2,393,000		14,500,000	(1)
December 1 – December 31, 2005		—		—		—		14,500,000	(1)
		3,500,000				3,500,000

(1) The July 2004 repurchase program allows for the repurchase of up to 20 million shares with no expiration.

     The amounts in the above table exclude approximately 3,200 shares surrendered by certain recipients of restricted shares who elected to use a portion of the shares on which restrictions lapsed in October 2005 to pay required withholding taxes.

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ITEM 6. SELECTED FINANCIAL DATA

	For the Years Ended December 31,
	2005		2004		2003		2002		2001
	(In thousands, except per share data)
Net revenues	$	6,481,967	$	4,238,104	$	3,862,743	$	3,756,928	$	3,699,852
Operating income		1,357,208		950,860		699,729		746,538		599,892
Income from continuing operations		443,256		349,856		230,273		289,476		160,440
Net income		443,256		412,332		243,697		292,435		169,815
Basic earnings per share
Income from continuing operations	$	1.56	$	1.25	$	0.77	$	0.92	$	0.51
Net income per share		1.56		1.48		0.82		0.93		0.53
Weighted average number of shares		284,943		279,325		297,861		315,618		317,542
Diluted earnings per share
Income from continuing operations	$	1.50	$	1.21	$	0.76	$	0.90	$	0.50
Net income per share		1.50		1.43		0.80		0.91		0.53
Weighted average number of shares		296,334		289,333		303,184		319,880		321,644
At year-end
Total assets	$	20,699,420	$	11,115,029	$	10,811,269	$	10,568,698	$	10,542,568
Total debt, including capital leases		12,358,829		5,463,619		5,533,462		5,222,195		5,465,608
Stockholders’ equity		3,235,072		2,771,704		2,533,788		2,664,144		2,510,700
Stockholders’ equity per share	$	11.35	$	9.87	$	8.85	$	8.62	$	7.98
Number of shares outstanding		285,070		280,740		286,192		309,148		314,792

     In June 2003, we ceased operations of PLAYMGMMIRAGE.com, our online gaming website (“Online”). In January 2004, we sold the Golden Nugget Las Vegas and the Golden Nugget Laughlin including substantially all of the assets and liabilities of those resorts (the “Golden Nugget Subsidiaries”). In July 2004, we sold the subsidiaries that owned and operated MGM Grand Australia. The results of Online, the Golden Nugget Subsidiaries and MGM Grand Australia are classified as discontinued operations for all periods presented. The Mandalay acquisition occurred on April 25, 2005.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Executive Overview

  Current Operations

     At December 31, 2005, our 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 (Boardwalk closed in January 2006 in preparation for Project CityCenter – see “Other Factors Affecting Liquidity”).

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 Signature at MGM Grand, a condominium-hotel development adjacent to MGM Grand Las Vegas; and a 50% investment in MGM Grand Paradise Limited, which is constructing a casino resort in Macau.

  Mandalay Acquisition

     On April 25, 2005, we closed our merger with Mandalay Resort Group (“Mandalay”) under which we acquired Mandalay for $71 in cash for each share of common stock of Mandalay. The total acquisition cost of $7.3 billion included equity value of approximately $4.8 billion, the assumption or repayment of outstanding Mandalay debt with a fair value of approximately $2.9 billion and $0.1 billion of transaction costs, offset by the $0.5 billion received by Mandalay from the sale of its interest in MotorCity Casino in Detroit, Michigan.

     The Mandalay acquisition expands 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. The purchase price allocation is preliminary and may be adjusted up to one year after the acquisition. In particular, we are still evaluating certain customer relationship intangible assets related to individual and group hotel reservations as well as gaming loyalty program members. We did not incur any significant employee termination costs or other exit costs in connection with the Mandalay acquisition.

  Key Performance Indicators

     We operate primarily in one segment, the operation of casino resorts, which includes offering gaming, hotel, dining, entertainment, retail and other resort amenities. Giving effect to the Mandalay merger, over half of our net revenue is 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 our competitive advantage.

     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 the high-end gaming segment, which can cause variability in our results. Key performance indicators related to revenue are:

• Gaming revenue indicators – table games drop and slots 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 slots win percentage is in the range of 6.5% to 7.5% of slots 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.

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     Most of our revenue is essentially cash-based, through customers wagering with cash or paying for non-gaming services with cash or credit cards. Our resorts, like many in the industry, generate significant operating cash flow. Our industry is capital intensive and we rely heavily on the ability of our resorts to generate operating cash flow to repay debt financing, fund maintenance capital expenditures and provide excess cash for future development.

     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.

     Our results of operations do not tend to be seasonal in nature, though a variety of factors can affect the results of any interim period, including the timing of major Las Vegas conventions, the amount and timing of marketing and special events for our high-end customers, and the level of play during major holidays, including New Year and Chinese New Year. Our results do not depend on key individual customers, though our success in marketing to customer groups, such as convention customers, or the financial health of customer groups, such as business travelers or high-end gaming customers from a particular country or region, can impact our results.

  Overall Outlook

     We have invested heavily in our existing operations in the past three years, and expect to continue to do so on a targeted basis in 2006. Our Las Vegas Strip resorts require ongoing capital investment to maintain their competitive advantages. We believe these investments in additional non-gaming amenities have enhanced our ability to generate increased visitor volume and allowed us to charge premium prices for our amenities.

     The most likely significant factors affecting operating results at our existing resorts in 2006 will be the addition of Mandalay, the expected continued positive impact of our targeted capital improvements, and the completion of Towers 1 and 2 of The Signature at MGM Grand. The Mandalay acquisition will continue to affect year-over-year comparisons through April 2006 as a result of the net revenues and operating income of these resorts, which includes the impact on depreciation and amortization expense of recognizing depreciable real property and amortizable intangible assets at fair value, and additional interest expense as a result of financing the merger through borrowings under our senior credit facility. Additionally, ongoing impacts of cost savings and revenue enhancements will positively affect earnings throughout 2006.

     Some of the capital improvements we made in 2005 were made towards the end of the year, so 2006 will be the first full year of results including these improvements, particularly at The Mirage, where the Jet nightclub and several restaurants were added at or near year-end. In addition, this resort will benefit from the Beatles-themed show by Cirque du Soleil expected to open in mid-2006. These improvements, along with improvements at other resorts, are expected to drive continued increases in REVPAR and increased customer volumes in gaming areas, restaurants, shops, entertainment venues and our other resort amenities.

     Towers 1 and 2 of The Signature at MGM Grand are expected to be completed in the second and fourth quarters of 2006, respectively. At that time, we will recognize our share of the venture’s net income, which will consist of the sales and costs associated with the sales of the condominium units, along with deferred profit from our contribution of land to the venture, within “income from unconsolidated affiliates” in the consolidated statement of income. Upon completion of each tower, we will have the opportunity to rent the condominiums to third parties on behalf of owners who elect to have us do so, providing a potential ongoing revenue stream.

  Financial Statement Impact of Hurricane Katrina

     Beau Rivage sustained significant damage in late August 2005 as a result of Hurricane Katrina and has been closed since. We expect to reopen Beau Rivage in the third quarter of 2006, although some of the resort’s rooms, restaurants and other amenities will not reopen until the fourth quarter. The Company maintains insurance covering both property damage and business interruption as a result of the storm. The deductible under this coverage is approximately $15 million, based on the amount of damage incurred. Based on current estimates, insurance proceeds are expected to exceed the net book value of damaged assets; therefore, the Company will not record an impairment charge related to the storm and upon ultimate settlement of the claim will likely record a gain. The damaged assets have been written off and a corresponding insurance receivable, classified within “Other long-term assets” in the accompanying consolidated balance sheets, has been recorded.

     Business interruption coverage covers lost profits and other costs incurred during the period of closure and up to six months following the reopening of the facility. The costs expected to be incurred during the interruption period are less than the anticipated business interruption proceeds; therefore, post-storm costs are being offset by the expected recoveries. All post-storm costs and expected recoveries are recorded net within “General and administrative” expenses in the accompanying consolidated statements of income, except for depreciation of non-damaged assets, which is classified as “Depreciation and amortization.”

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Results of Operations

  Summary Financial Results

     The following table summarizes our financial results:

	Year Ended December 31,
			Percentage					Percentage
	2005		Change			2004		Change			2003
	(In thousands, except per share data)
Net revenues	$	6,481,967		53	%	$	4,238,104		10	%	$	3,862,743
Operating income		1,357,208		43	%		950,860		36	%		699,729
Income from continuing operations		443,256		27	%		349,856		52	%		230,273
Diluted income from continuing operations per share	$	1.50		24	%	$	1.21		59	%	$	0.76

     References to “same-store” results throughout Management’s Discussion and Analysis exclude the Mandalay resorts and Monte Carlo for all periods. Same-store results also exclude Beau Rivage for all periods.

     On a consolidated basis, the most important factors and trends contributing to our performance over the last three years have been:

• The addition of Mandalay’s resorts on April 25, 2005. For the eight months we owned the Mandalay resorts, net revenue for these operations was $1.9 billion and operating income was $433 million;

• The ongoing capital investments in our resorts, which we believe is allowing us to market more effectively to visitors, capture a greater share of our visitors’ increased travel budgets, and generate premium pricing for our resorts’ rooms and other amenities. These investments include the Spa Tower at Bellagio, which opened in December 2004, and the repositioning of MGM Grand Las Vegas, highlighted by KÀ, by Cirque du Soleil, and the Skylofts and West Wing room enhancements;

• The overall positive economic environment in the United States since early 2004, particularly in the leisure and business travel segments, resulting in increases in room pricing and increased visitation, particularly at our Las Vegas Strip resorts;

• The closure of Beau Rivage in August 2005 after Hurricane Katrina. Operating income was $60 million at Beau Rivage in 2004 and decreased to $40 million in 2005 as a result of only having eight months of operations;

• The war with Iraq and the outbreak of SARS in Asia, both of which negatively impacted leisure travel and our high-end gaming business in late 2003 and early 2004;

• The new labor contract covering employees at our Las Vegas Strip resorts since mid-2002, which provides for significant annual wage and benefits increases through 2007.

     As a result of the above trends, our net revenues increased 53% in 2005, and 11% on a same-store basis. Operating margins were relatively flat with 2004 – 21% in 2005 compared to 22% in 2004. The 2004 margin was a significant increase over the 18% operating margin in 2003. See further discussion of operating income and operating margins in “Operating Results” below. The increase in income from continuing operations generally resulted from the increased operating income, offset in part by increased interest expense, discussed below in “Non-operating Results.”

 Operating Results

     The following table includes key information about our operating results:

	Year Ended December 31,
			Percentage					Percentage
	2005		Change			2004		Change			2003
	(In thousands)
Net revenues	$	6,481,967		53	%	$	4,238,104		10	%	$	3,862,743
Operating expenses:
Casino and hotel operations		3,547,059		55	%		2,289,249		6	%		2,152,236
General and administrative		958,263		56	%		612,632		5	%		585,161
Corporate expense		130,633		68	%		77,910		27	%		61,541
Preopening, restructuring and property transactions, net		52,573		114	%		24,566		45	%		16,922
Depreciation and amortization		588,102		46	%		402,545		1	%		400,766
		5,276,630		55	%		3,406,902		6	%		3,216,626
Income from unconsolidated affiliates		151,871		27	%		119,658		123	%		53,612
Operating income	$	1,357,208		43	%	$	950,860		36	%	$	699,729

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     The 2005 increase in net revenues resulted from the addition of Mandalay and an 11% increase in same-store net revenues. Same-store net revenues increased largely as a result of strong room pricing and increased volumes in slots and across all non-gaming areas. These trends were particularly prominent at Bellagio and MGM Grand Las Vegas as a result of new and expanded amenities at those resorts.

     The 2004 increase in net revenues was largely due to strong room pricing, increased gaming volumes, and the impact of targeted capital investments in 2003 and 2004 at New York-New York and MGM Grand Las Vegas.

     In 2005, operating income did not increase to the same extent as net revenues, largely due to already strong operating margins, a lower-than-normal bad debt provision in 2004, higher corporate expense and higher preopening, restructuring and property transactions, net. This resulted in an operating margin of 21% versus 22% in 2004. Corporate expense increased as a percentage of revenue due primarily to merger integration costs.

     Our operating income in 2004 increased 36%, due primarily to the strong revenue trends and a full year of Borgata’s results. The increase in income from unconsolidated affiliates was responsible for approximately one-third of the increase in operating income, while improvements at our operating resorts, particularly Bellagio, MGM Grand Las Vegas and New York-New York, made up the rest of the increase. Operating income at MGM Grand Detroit was essentially flat in 2004 compared to 2003, despite an increase in the gaming tax rate from 18% to 24% effective September 2004.

     We expect operating margins to stay relatively consistent with current levels in 2006. Anticipated revenue gains at Mandalay resorts and continued realization of merger cost savings will offset typical increases in labor costs, the additional 2% gaming tax payable to the City of Detroit beginning January 1, 2006, and the inclusion of stock compensation expense (see “Recently issued Accounting Standards”).

  Operating Results – Detailed Revenue Information

     The following table presents detail of our net revenues:

	Year Ended December 31,
				Percentage						Percentage
	2005			Change			2004			Change			2003
							(In thousands)
Casino revenue, net:
Table games	$	1,140,053			21	%	$	943,343			9	%	$	866,096
Slots		1,741,556			43	%		1,218,589			9	%		1,115,029
Other		100,042			61	%		62,033			10	%		56,389
Casino revenue, net		2,981,651			34	%		2,223,965			9	%		2,037,514
Non-casino revenue:
Rooms		1,673,696			84	%		911,259			9	%		833,272
Food and beverage		1,330,210			58	%		841,147			11	%		757,278
Entertainment, retail and other		1,098,612			58	%		696,117			7	%		647,702
Non-casino revenue		4,102,518			68	%		2,448,523			9	%		2,238,252
		7,084,169			52	%		4,672,488			9	%		4,275,766
Less: Promotional allowances		(602,202	)		39	%		(434,384	)		5	%		(413,023	)
	$	6,481,967			53	%	$	4,238,104			10	%	$	3,862,743

     Table games revenue, including baccarat, was flat on a same-store basis in 2005. A 4% increase in table games volume was offset by a slightly lower hold percentage, though hold percentages were within our normal range for all three years presented. In 2004, table games volume increased 9%, with particular strength in baccarat volume, up 18%. In both 2005 and 2004, key events such as New Year, Chinese New Year and other marketing events, were well-attended.

     Slots revenue increased 8% on a same-store basis, following a 9% increase in 2004. Additional volume in 2005 was generated by the Spa Tower at Bellagio — Bellagio’s slots revenue increased over 30% — and the traffic generated by KÀ and other amenities at MGM Grand Las Vegas, where slots revenue increased almost 10%. In both periods, we benefited from the continued success of our Players Club affinity program and marketing events targeted at repeat customers.

     Hotel revenue increased 19% on a same-store basis in 2005. We had more rooms available as a result of the Bellagio expansion and 2004 room remodel activity at MGM Grand Las Vegas, and our company-wide same-store REVPAR increased 13% to $140. This was on top of a 10% increase in 2004 over 2003. The increase in REVPAR in 2005 was entirely rate-driven, as same-store occupancy was consistent at 92%. The 2004 increase was also largely rate-driven.

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     Other non-gaming revenue was also up in 2005, with KÀ leading to a 35% increase in same-store entertainment revenue, and several new restaurants and bars at MGM Grand Las Vegas, Bellagio, TI and The Mirage leading to a 14% increase in same-store food and beverage revenue. These results followed similar trends experienced in 2004 compared to 2003. We expect these increases to continue in 2006, as we will open a new Beatles-themed Cirque du Soleil show at The Mirage, along with more new restaurants and lounges across our resort portfolio, including the recently opened Jet nightclub and several restaurants at The Mirage.

  Operating Results – Details of Certain Charges

     Preopening and start-up expenses consisted of the following:

	Year Ended December 31,
	2005		2004		2003
			(In thousands)
Project CityCenter	$	5,173	$	—	$	—
MGM Grand Macau		1,914		—		—
Jet nightclub at The Mirage		1,891		—		—
Bellagio expansion		665		3,805		—
KÀ		1,871		3,655		—
Borgata		—		—		19,326
New York-New York (Zumanity, Nine Fine Irishmen)		—		—		4,310
Players Club		—		—		3,051
Other		4,238		2,816		2,579
	$	15,752	$	10,276	$	29,266

     Preopening and start-up expenses at MGM Grand Macau relate to our share of the operating results of that venture prior to its opening. Preopening and start-up expenses related to Borgata represent our share of the operating results of Borgata prior to its July 2003 opening. We expect preopening and start-up expenses for Project CityCenter and MGM Grand Macau to increase in 2006. In addition, we will incur preopening and start-up expenses related to the permanent facility at MGM Grand Detroit and the new Beatles-themed show by Cirque du Soleil at The Mirage.

     Restructuring costs (credit) consisted of the following:

	Year Ended December 31,
	2005			2004		2003
				(In thousands)
Contract termination costs	$	—		$	3,693	$	4,049
Siegfried & Roy show closure – The Mirage		—			—		1,623
Other		(59	)		1,932		925
	$	(59	)	$	5,625	$	6,597

     There were no material restructuring activities in 2005. At December 31, 2005, there were no material restructuring accruals. All material restructuring costs have been fully paid or otherwise resolved.

     In 2004, restructuring costs include $3 million for contract termination costs related to the Aqua restaurant at Bellagio and $2 million of workforce reduction costs at MGM Grand Detroit as a result of our efforts to minimize the impact of a gaming tax increase in Michigan.

     In 2003, restructuring costs included $2 million related to the closure of the Siegfried & Roy show, primarily for severance costs of employees involved in the show’s production. Also, we terminated a restaurant lease and closed two marketing offices, resulting in $4 million of contract termination charges. Other severance of $1 million in 2003 related primarily to restructuring of table games staffing at several resorts.

     Property transactions, net consisted of the following:

	Year Ended December 31,
	2005		2004		2003
			(In thousands)
Impairment of assets to be disposed of	$	22,651	$	473	$	7,172
Write-off of abandoned capital projects		5,971		—		—
Demolition costs		5,362		7,057		6,614
Gain on sale of North Las Vegas land		—		—		(36,776	)
Other net losses on asset sales or disposals		2,896		1,135		4,049
	$	36,880	$	8,665	$	(18,941	)

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     In 2005, recognized impairments relate primarily to assets removed from service in connection with new capital projects at several resorts, including Bellagio, TI, The Mirage and Mandalay Bay. The amount of the impairments was based on the net book value of the disposed assets. Abandoned projects included individually insignificant projects at several resorts. Demolition costs related primarily to room remodel activity at MGM Grand Las Vegas and the new showroom at The Mirage.

     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. Also in 2003, we recorded write-downs and impairments of assets abandoned or replaced with new construction, primarily at MGM Grand Las Vegas in preparation for new restaurants and the KÀ theatre. Demolition costs in 2004 and 2003 related primarily to preparation for the Bellagio standard room remodel, Bellagio expansion and KÀ theatre at MGM Grand Las Vegas.

 Non-operating Results

     The following table summarizes information related to interest on our long-term debt:

	Year Ended December 31,
	2005			2004			2003
	(In thousands)
Interest cost	$	685,686		$	401,391		$	352,820
Less: Capitalized interest		(29,527	)		(23,005	)		(15,234	)
Interest expense, net	$	656,159		$	378,386		$	337,586
Cash paid for interest, net of amounts capitalized	$	588,587		$	321,008		$	308,198
Weighted average total debt balance	$10.1 billion			$5.5 billion			$5.2 billion
Weighted average interest rate		6.8	%		7.3	%		6.7	%

     Interest cost was higher in 2005 due to the funding of the cash consideration in the Mandalay acquisition through senior credit facility borrowings, and the assumption of debt in the Mandalay acquisition. While variable market interest rates continued to increase in 2005, our effective interest rate decreased due to a more normalized ratio of variable rate debt in 2005; our variable interest rate under our senior credit facility has been lower than the interest rates on our fixed-rate borrowings. Capitalized interest increased in 2005 as we began capitalizing interest on Project CityCenter and our investment in MGM Grand Paradise Limited. We expect capitalized interest to increase in 2006 as we will start capitalizing interest on a longer portion of the land related to Project City Center and as we spend more on the construction of Project CityCenter.

     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 fixed rate debt in the second half of 2004 in anticipation of the Mandalay merger. Capitalized interest increased in 2004 due to the ongoing Bellagio expansion and KÀ theatre projects offset partially by the cessation of interest capitalization on our investment in Borgata in July 2003.

     Non-operating items from unconsolidated affiliates, primarily our share of interest expense at Borgata and Silver Legacy and state income taxes at Borgata, increased from $12 million in 2004 to $16 million in 2005. Borgata’s lower interest expense was largely offset by the addition of Silver Legacy’s interest expense, and the remaining decrease resulted from a reduction in state income taxes in the fourth quarter of 2004 at Borgata as a result of recording the benefit of certain investment tax credits. In 2004, non-operating items from unconsolidated affiliates was higher than 2003, $12 million versus $10 million, due to the full year of Borgata’s results, offset by the reduction to state income taxes in the fourth quarter of 2004 described above.

     The following table summarizes information related to our income taxes:

	Year Ended December 31,
	2005			2004			2003
				(In thousands)
Income from continuing operations before income tax	$	678,900		$	555,815		$	343,660
Income tax provision		235,644			205,959			113,387
Effective income tax rate		34.7	%		37.1	%		33.0	%
Cash paid for income taxes	$	75,776		$	128,393		$	94,932

     The effective income tax rate in 2005 was lower than in 2004 due primarily to a tax benefit realized from the repatriation of foreign earnings from Australia as a result of the provisions of the American Jobs Creation Act of 2004 that provided for a special one-time deduction of 85 percent on certain repatriated earnings of foreign subsidiaries. Additionally, in 2004 the Company accrued additional state deferred taxes related to capital investments in New Jersey and incurred non-deductible costs related to a Michigan ballot initiative; neither of these items recurred in 2005.

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     The effective income tax rate in 2004 was higher than in 2003 primarily due to the additional New Jersey taxes and non-deductible Michigan ballot initiative costs discussed above, as well as overseas development costs for which no tax benefit was provided and the reversal of a greater amount of tax reserves in 2003 compared to 2004 as a result of completion of audits and the expiration of statutes of limitations.

     In 2005, taxes paid decreased from 2004, in part due to increased tax benefits from stock option exercises and one-time benefit plan deductions, partially offset by decreased accelerated tax depreciation deductions and increased pre-tax income. In addition, a federal tax overpayment from 2004 was applied to 2005, reducing the 2005 tax payments. In 2004, taxes paid increased from 2003, primarily due to increased pre-tax income and the full utilization of tax credit carryforwards in 2003. We expect cash paid for income taxes to increase significantly in 2006 due to the required payment of taxes on the gain on Mandalay’s sale of MotorCity Casino, required tax payments on the income associated with Towers 1 and 2 of The Signature at MGM Grand, and continued increases in income resulting from the Mandalay merger and continued improvements in operating results.

Liquidity and Capital Resources

  Cash Flows – Summary

     Our cash flows consisted of the following:

	Year Ended December 31,
	2005			2004			2003
				(In thousands)
Net cash provided by operations	$	1,182,796		$	829,247		$	740,812
Investing cash flows:
Acquisition of Mandalay Resort Group, net		(4,420,990	)		—			—
Capital expenditures		(759,949	)		(702,862	)		(550,232	)
Proceeds from the sale of subsidiaries, net		—			345,730			—
Investments in unconsolidated affiliates		(183,000	)		(11,602	)		(41,350	)
Other		61,122			20,981			35,894
Net cash used in investing activities		(5,302,817	)		(347,753	)		(555,688	)
Financing cash flows:
Net borrowing (repayment) under bank credit facilities		4,725,000			(1,574,489	)		(285,087	)
Issuance of long-term debt		880,156			1,528,957			600,000
Repayment of long-term debt		(1,408,992	)		(52,149	)		(28,011	)
Issuance of common stock		145,761			135,910			36,254
Purchase of treasury stock		(217,316	)		(348,895	)		(442,864	)
Other		(61,783	)		(15,306	)		(45,527	)
Net cash provided by (used in) financing activities		4,062,826			(325,972	)		(165,235	)
Net increase (decrease) in cash and cash equivalents	$	(57,195	)	$	155,522		$	19,889

  Cash Flows – Operating Activities

     Trends in our operating cash flows tend to follow trends in our operating income, excluding non-cash charges, since our business is primarily cash-based. Cash flow from operations has increased in each of the last two years due to higher operating income offset by higher combined interest and tax payments.

     At December 31, 2005 and 2004, we held cash and cash equivalents of $378 million and $435 million, respectively. We require a certain amount of cash on hand to operate our resorts. Beyond our cash on hand, we utilize a company-wide cash management system to minimize the amount of cash held in banks. Funds are swept from accounts at our resorts daily into central bank accounts, and excess funds are invested overnight or are used to repay borrowings under our bank credit facilities. Included in cash and cash equivalents at December 31, 2004 was $141 million received from the sale of MGM Grand Australia and still held in Australia. These funds, net of amounts paid for Australia taxes on the sale, were repatriated to the United States in 2005 and used to fund capital expenditures during the year.

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  Cash Flows – Investing Activities

     The acquisition of Mandalay closed on April 25, 2005, at a cost of $4.4 billion, net of cash acquired, plus the assumption of $2.9 billion of Mandalay debt.

     Capital expenditures in 2005 included maintenance capital spending at our resorts — such as room remodel activity at MGM Grand Las Vegas, including the completion of the Skylofts and West Wing room enhancements — and spending on the following key expansion and development projects:

• Project CityCenter;

• The permanent casino at MGM Grand Detroit, including costs of purchasing land;

• The new theatre at The Mirage for the Beatles-themed show by Cirque du Soleil, along with new restaurants and other amenities at this resort;

• Rebuilding costs at Beau Rivage.

     Capital expenditures in 2004 consisted of large capital projects, such as the Bellagio expansion and the KÀ theatre at MGM Grand Las Vegas, and maintenance capital activities, such as room remodel projects at New York – New York and MGM Grand Las Vegas and new restaurant and entertainment amenities at several resorts. Capital expenditures in 2003 included major projects at our existing resorts, including projects described above which began in 2003, the Zumanity theatre at New York-New York, the Bellagio room remodel and slot technology improvements.

     The sale of the Golden Nugget Subsidiaries closed in January 2004 with net proceeds to the Company of $210 million. The sale of MGM Grand Australia closed in July 2004 with net proceeds to the Company of $136 million.

     Investments in unconsolidated affiliates in 2005 consists primarily of our required contributions to MGM Grand Paradise Limited, which is developing MGM Grand Macau. In 2004, such investments related primarily to The Signature at MGM Grand, and in 2003 such investments related primarily to Borgata.

  Cash Flows – Financing Activities

     Our primary financing activities in 2005 related to the Mandalay acquisition. The cash purchase price of Mandalay, $4.4 billion, was funded from borrowings under our senior credit facility. We also issued $875 million of fixed rate debt in various issuances:

• In June 2005, we issued $500 million of 6.625% senior notes due 2015;

• In September 2005, we issued $375 million of 6.625% senior notes due 2015.

     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. The redemption of the 2008 senior notes resulted in a loss on early retirement of debt of $20 million, which is classified as “Other, net” in the accompanying consolidated statements of income. With the redemption of the 2008 senior notes and the repayment of the 6.95% senior notes, the Company’s senior 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 floating rate convertible senior debentures with a principal amount of $394 million had the right to redeem the debentures for $566 million through June 30, 2005. $388 million of principal of the convertible debentures were tendered for redemption and redeemed for $558 million. Since the Mandalay acquisition we have reduced net debt by $419 million.

     In 2004, we issued $1.5 billion of fixed rate debt in various issuances:

• In February and March 2004, we issued $525 million of 5.875% senior notes due 2014;

• In August 2004, we issued $550 million of 6.75% senior notes due 2012;

• In September 2004, we issued $450 million of 6% senior notes due 2009 at a premium to yield 5.65%.

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     In 2004, we repaid a net $1.6 billion on our bank credit facilities and repurchased $49 million of our existing senior notes for $52 million, resulting in a loss on early retirement of debt of $6 million, including the write-off of unamortized original issue discount, which is classified as “Other, net” in the accompanying consolidated statements of income.

     In 2003, we issued $600 million of 6% senior notes, due 2009 and repaid a net $285 million on our bank credit facilities. The net proceeds of these financing activities were used to supplement operating cash flows, fund capital expenditures and repurchase shares of our common stock.

     Our share repurchases are only conducted under repurchase programs approved by our Board of Directors and publicly announced. Our share repurchase activity was as follows:

	Year Ended December 31,
	2005		2004		2003
			(In thousands)
August 2001 authorization (2.8 million shares purchased)	$	—	$	—	$	36,034
February 2003 authorization (20 million shares purchased)		—		—		335,911
November 2003 authorization (16 million and 4 million shares purchased)		—		348,895		70,919
July 2004 authorization (5.5 million shares purchased)		217,316		—		—
	$	217,316	$	348,895	$	442,864
Average price of shares repurchased	$	39.51	$	21.80	$	16.59

     At December 31, 2005, we had 14.5 million shares available for repurchase under a July 2004 authorization. We received $146 million, $136 million and $36 million in proceeds from the exercise of employee stock options in the years ended December 31, 2005, 2004 and 2003, respectively.

  Principal Debt Arrangements

     Our long-term debt consists of publicly held senior and subordinated notes and our senior credit facility. We pay fixed rates of interest ranging from 5.875% to 10.25% on the senior and subordinated notes. We pay variable interest based on LIBOR on our senior credit facility. Our current senior credit facility is a $7.0 billion, five-year credit facility with a syndicate of banks led by Bank of America, N.A., and consists of a $5.5 billion revolving credit facility and a $1.5 billion term loan facility. As of December 31, 2005, we had approximately $2.2 billion of available liquidity under our senior credit facility.

  Other Factors Affecting Liquidity

     Distributions from The Signature at MGM Grand. As discussed earlier, Towers 1 and 2 of The Signature at MGM Grand are expected to be completed in the second and fourth quarters of 2006, respectively. We expect to receive distributions totaling at least $100 million upon completion of these towers.

     Long-term Debt Payable in 2006. We repaid $200 million of long-term debt at maturity in February 2006 with available borrowings under our senior credit facility. Another $245 million of long-term debt matures later in 2006.

     Project CityCenter. In November 2004 we announced a plan to develop a multi-billion dollar urban metropolis, Project CityCenter, on 66 acres of land on the Las Vegas Strip, between Bellagio and Monte Carlo. Project CityCenter will feature a 4,000-room casino resort designed by world-famous architect Cesar Pelli; two 400-room boutique hotels, one of which will be managed by luxury hotelier Mandarin Oriental; approximately 470,000 square feet of retail shops, dining and entertainment venues; and approximately 2.3 million square feet of residential space in over 2,900 luxury condominium and condominium-hotel units in multiple towers.

     As currently contemplated, we believe Project CityCenter will cost approximately $7 billion, excluding preopening and land costs. After estimated proceeds of $2.5 billion from the sale of residential units, we believe the net project cost will be approximately $4.5 billion. We expect to complete the design work for Project CityCenter in mid-2006 and expect the project to open in 2009. The design, budget and schedule of Project CityCenter are still preliminary, and the ultimate timing, cost and scope of Project CityCenter are subject to risks attendant to large-scale projects.

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     Detroit Permanent Casino. MGM Grand Detroit, LLC has operated an interim casino facility in downtown Detroit since July 1999. In August 2002 the Detroit City Council approved revised development agreements with our subsidiary and two other developers. The revised development agreement released us and the City from certain of the obligations under the original agreement and significantly changed other provisions of the original agreement.

     In April 2005, the 6^th Circuit Court of Appeals lifted its injunction prohibiting commencement of construction of the permanent hotel and casino complexes. We have obtained land and began construction on our permanent facility, which will be located near the site of our interim facility. The permanent facility is expected to open in late 2007 at a cost of $765 million, including land and preopening costs, and will feature a 400-room hotel, 100,000-square foot casino, numerous restaurant and entertainment amenities, and spa and convention facilities. The complete design, timing and cost of the permanent facility are at a preliminary stage, and are subject to risks attendant to large-scale projects.

     MGM Grand Macau. We own 50% of MGM Grand Paradise Limited, an entity which is developing, and will operate, MGM Grand Macau, a hotel-casino resort in Macau S.A.R. Pansy Ho Chiu-king owns the other 50% of MGM Grand Paradise Limited. MGM Grand Macau will be located on a prime waterfront site and will feature at least 345 table games and 1,035 slots with room for significant expansion. Other features will include a 600-room hotel, a luxurious spa, convertible convention space, a variety of dining destinations, and other attractions. Construction of MGM Grand Macau, which is estimated to cost $1.1 billion including license and land rights and preopening costs, began in the second quarter of 2005 and the resort is anticipated to open in late 2007. The complete design, timing, cost and scope of the project are at a preliminary stage and are subject to the risks attendant to large-scale projects. We have invested $180 million in the venture, and are committed to loaning the venture up to $100 million. The venture has obtained commitments from lenders for a credit facility sufficient, along with equity contributions and shareholder loans, to fund the construction of MGM Grand Macau.

     Beau Rivage Rebuilding. We have already begun the process of rebuilding Beau Rivage. Damage was extensive on the main levels of the resort, largely destroying the casino floor and gaming equipment, the resort’s restaurants, the retail area and a portion of the parking garage. There was also damage, though to a lesser extent, in the hotel tower. We expect to reopen the resort in stages beginning in the third quarter of 2006. When fully reopened, Beau Rivage will include 1,740 guestrooms, over 2,000 slot machines and 90 table games, new and restored restaurants, a state-of-the-art convention center, and pool and spa amenities.

     We believe that a large portion of the costs to rebuild Beau Rivage will be covered under our insurance policies. However, we cannot determine the exact amount of reimbursement until we submit our claims and receive notice of approval from our insurers. It is also uncertain as to the timing of such reimbursements, and we have been funding the rebuilding costs in advance of receiving reimbursements from our insurers.

     New York Racing Association. We have 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. We 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 us is not fully repaid) for a fee. Recent legislative changes will allow us to operate the VLTs past the expiration date of the current NYRA franchise agreement.

  Off Balance Sheet Arrangements

     Our off balance sheet arrangements consist primarily of investments in unconsolidated affiliates, which currently consist primarily of our investments in Borgata, Grand Victoria, Silver Legacy, MGM Grand Macau and The Signature at MGM Grand. We have not entered into any transactions with special purpose entities, nor have we engaged in any derivative transactions other than straightforward interest rate swaps. Our joint venture and unconsolidated affiliate investments allow us to realize the benefits of owning a full-scale resort in a manner that minimizes our initial investment. We provided a guaranty for up to 50% of the interest and principal payment obligations on the construction financing for the first two towers of The Signature at MGM Grand. Otherwise, we have not guaranteed financing obtained by our investees, nor are there any other provisions of the venture agreements which are unusual or subject us to risks to which we would not be subjected if we had full ownership of the resort.

     At December 31, 2005, we had outstanding letters of credit totaling $53 million, of which $50 million support bonds issued by the Economic Development Corporation of the City of Detroit. These bonds are recorded as a liability in our consolidated balance sheets. This obligation was undertaken to secure our right to develop a permanent casino in Detroit.

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  Commitments and Contractual Obligations

     The following table summarizes our scheduled contractual commitments as of December 31, 2005:

	2006		2007		2008		2009		2010		Thereafter
	(In millions)
Long-term debt	$	445	$	1,402	$	377	$	1,276	$	5,898	$	2,893
Estimated interest payments on long-term debt (1)		853		769		688		659		559		811
Capital leases		2		1		1		—		—		—
Operating leases		13		11		9		9		8		338
Long-term liabilities (2)		61		9		9		58		8		5
Other purchase obligations:
Construction commitments (3)		432		146		54		28		4		—
Employment agreements		125		62		27		12		—		—
Entertainment agreements (4)		124		5		—		—		—		—
Other (5)		101		44		4		3		1		1
	$	2,156	$	2,449	$	1,169	$	2,045	$	6,478	$	4,048

(1)	Estimated interest payments on long-term debt are based on principal amounts outstanding at December 31, 2005 and forecasted LIBOR rates for our bank credit facility.
(2)	Includes our obligation to support $50 million of bonds issued by the Economic Development Corporation of the City of Detroit as part of our development agreement with the City. The bonds mature in 2009. Also includes the estimated payments of obligations under our deferred compensation and supplemental executive retirement plans, based on balances as of December 31, 2005 and assumptions of retirement based on plan provisions.
(3)	Included in construction commitments is $413 million related to Project CityCenter, consisting primarily of commitments related to design work and the Bellagio employee parking garage. While we have entered into a contract with a general contractor for the construction of most of Project CityCenter, we are not committed to any component of the project until we request and approve a guaranteed maximum price (“GMP”) for the component with the general contractor. We expect to approve GMPs for most or all of the components of Project CityCenter in 2006.
(4)	Our largest entertainment commitments consist of minimum contractual payments to Cirque du Soleil, which performs shows at several of our resorts. We are generally contractually committed for a period of 12 months based on our ability to exercise certain termination rights; however, we expect these shows to continue for longer periods.
(5)	The amount for 2006 includes approximately $61 million of open purchase orders. Other commitments are for various contracts, including corporate aircraft purchases, maintenance and other service agreements and advertising commitments.

  Summary of Expected Sources and Uses of Funds

     In addition to the contractual obligations disclosed above, other significant operating uses of cash in 2006 include tax payments. Other significant investing uses of cash flow in 2006 include uncommitted capital expenditures, expected to be approximately $850 million, excluding capitalized interest and spending at Beau Rivage.

     We plan to fund our contractual obligations and other estimated spending through a combination of operating cash flow, distributions from The Signature at MGM Grand, available borrowings under our senior credit facility and potential issuances of fixed rate long-term debt. We generated almost $1.2 billion in operating cash flow in 2005, which included deductions for interest payments, tax payments and certain contractually committed payments reflected in the above table, including operating leases, employment agreements and entertainment agreements. We expect to generate a higher level of operating cash flow in 2006 due primarily to the continued impact of the Mandalay acquisition, as well as expected increases in operating income at other resorts.

Critical Accounting Policies and Estimates

     Management’s discussion and analysis of our results of operations and liquidity and capital resources are based on our consolidated financial statements. To prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, we must make estimates and assumptions that affect the amounts reported in the consolidated financial statements. We regularly evaluate these estimates and assumptions, particularly in areas we consider to be critical accounting estimates, where changes in the estimates and assumptions could have a material impact on our results of operations, financial position or cash flows. Senior management and the Audit Committee of the Board of Directors have reviewed the disclosures included herein about our critical accounting estimates, and have reviewed the processes to determine those estimates.

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Allowance for Doubtful Casino Accounts Receivable

     Marker play represents a significant portion of the table games volume at Bellagio, MGM Grand Las Vegas, Mandalay Bay and The Mirage. Our other facilities do not emphasize marker play to the same extent, although we offer markers to customers at those casinos as well.

     We maintain strict controls over the issuance of markers and aggressively pursue collection from those customers who fail to pay their marker balances timely. These collection efforts are similar to those used by most large corporations when dealing with overdue customer accounts, including the mailing of statements and delinquency notices, personal contacts, the use of outside collection agencies and civil litigation. Markers are generally legally enforceable instruments in the United States. At December 31, 2005 and 2004, approximately 44% and 54%, respectively, of our casino accounts receivable was owed by customers from the United States. Markers are not legally enforceable instruments in some foreign countries, but the United States assets of foreign customers may be reached to satisfy judgments entered in the United States. At December 31, 2005 and 2004, approximately 42% and 25%, respectively, of our casino accounts receivable was owed by customers from the Far East.

     We maintain an allowance, or reserve, for doubtful casino accounts at all of our operating casino resorts. The provision for doubtful accounts, an operating expense, increases the allowance for doubtful accounts. We regularly evaluate the allowance for doubtful casino accounts. At resorts where marker play is not significant, the allowance is generally established by applying standard reserve percentages to aged account balances. At resorts where marker play is significant, we apply standard reserve percentages to aged account balances under a specified dollar amount and specifically analyze the collectibility of each account with a balance over the specified dollar amount, based on the age of the account, the customer’s financial condition, collection history and any other known information. We also monitor regional and global economic conditions and forecasts to determine if reserve levels are adequate.

     The collectibility of unpaid markers is affected by a number of factors, including changes in currency exchange rates and economic conditions in the customers’ home countries. Because individual customer account balances can be significant, the allowance and the provision can change significantly between periods, as information about a certain customer becomes known or as changes in a region’s economy occur.

     The following table shows key statistics related to our casino receivables:

	At December 31,
	2005			2004			2003
				(In thousands)
Casino accounts receivable	$	221,873		$	174,713		$	159,569
Allowance for doubtful casino accounts receivable		68,768			57,111			75,265
Allowance as a percentage of casino accounts receivable		31	%		33	%		47	%
Median age of casino accounts receivable	39 days			33 days			43 days
Percentage of casino accounts outstanding over 180 days		19	%		15	%		23	%

     The allowance for doubtful accounts as a percentage of casino accounts receivable has decreased in the last two years, particularly in 2004, as a result of improved collections leading to improved credit statistics. Our reserve percentages for 2004 and 2005 are consistent with the percentage before the September 11, 2001 attacks, and are representative of a more normalized collection experience and positive global economic conditions relative to the conditions in 2001 and 2002.

     At December 31, 2005, a 100 basis-point change in the allowance for doubtful accounts as a percentage of casino accounts receivable would change net income by $1.5 million, or less than $0.01 per share.

  Fixed asset capitalization and depreciation policies

     Property and equipment are stated at cost. For the majority of our property and equipment, cost has been determined based on estimated fair values in connection with the Mandalay acquisition and the May 2000 Mirage Resorts acquisition. Maintenance and repairs that neither materially add to the value of the property nor appreciably prolong its life are charged to expense as incurred. Depreciation and amortization are provided on a straight-line basis over the estimated useful lives of the assets. We account for construction projects in accordance with Statement of Financial Accounting Standards No. 67, “Accounting for Costs and Initial Rental Operations of Real Estate Projects.” When we construct assets, we capitalize direct costs of the project, including fees paid to architects and contractors, property taxes, and certain costs of our design and construction subsidiaries.

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     We must make estimates and assumptions when accounting for capital expenditures. Whether an expenditure is considered a maintenance expense or a capital asset is a matter of judgment. When constructing or purchasing assets, we must determine whether existing assets are being replaced or otherwise impaired, which also may be a matter of judgment. Our depreciation expense is highly dependent on the assumptions we make about our assets’ estimated useful lives. We determine the estimated useful lives based on our experience with similar assets, engineering studies, and our estimate of the usage of the asset. Whenever events or circumstances occur which change the estimated useful life of an asset, we account for the change prospectively.

     In accordance with Statement of Financial Accounting Standards No. 34, “Capitalization of Interest Cost” (“SFAS 34”), interest cost associated with major development and construction projects is capitalized as part of the cost of the project. Interest is typically capitalized on amounts expended on the project using the weighted-average cost of our outstanding borrowings, since we typically do not borrow funds directly related to a development project. Capitalization of interest starts when construction activities, as defined in SFAS 34, begin and ceases when construction is substantially complete or development activity is suspended for more than a brief period.

     Whether we capitalize interest on a project depends in part on management’s actions. In November 2004, we announced the development of Project CityCenter in Las Vegas. In connection with this announcement and the start of design activities, we began capitalizing interest associated with this project, including capitalizing interest on land costs for the portion of the Project CityCenter site not currently being utilized in operations. Interest capitalized on this project for the years ended December 31, 2004 and 2005 was $2 million and $12 million, respectively.

  Impairment of Long-lived Assets

     We evaluate our property and equipment and other long-lived assets for impairment in accordance with Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” For assets to be disposed of, we recognize the asset at the lower of carrying value or fair market value less costs of disposal, as estimated based on comparable asset sales, offers received, or a discounted cash flow model. For assets to be held and used, we review for impairment whenever indicators of impairment exist. We then compare the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then an impairment is recorded based on the fair value of the asset, typically measured using a discounted cash flow model. If an asset is still under development, future cash flows include remaining construction costs. All recognized impairment losses, whether for assets to be disposed of or assets to be held and used, are recorded as operating expenses.

     There are several estimates, assumptions and decisions in measuring impairments of long-lived assets. First, management must determine the usage of the asset. To the extent management decides that an asset will be sold, it is more likely that an impairment may be recognized. Assets must be tested at the lowest level for which identifiable cash flows exist. This means that some assets must be grouped, and management has some discretion in the grouping of assets. Future cash flow estimates are, by their nature, subjective and actual results may differ materially from our estimates.

     On a quarterly basis, we review our major long-lived assets to determine if events have occurred or circumstances exist that indicate a potential impairment. We estimate future cash flows using our internal budgets. When appropriate, we discount future cash flows using our weighted-average cost of capital, developed using a standard capital asset pricing model. Whenever an impairment loss is recorded, or a test for impairment is made, we discuss the facts and circumstances with the Audit Committee.

     See “Results of Operations” for discussion of write-downs and impairments recorded in 2003, 2004 and 2005. In June 2003, we entered into an agreement to sell the Golden Nugget Subsidiaries. The fair value less costs to sell exceeds the carrying value, therefore no impairment was indicated. In February 2004, we entered into an agreement to sell MGM Grand Australia. The fair value less costs to sell exceeds the carrying value, therefore no impairment was indicated. Other than the above items, we are not aware of events or circumstances that would cause us to review any material long-lived assets for impairment.

  Income taxes

     We are subject to income taxes in the United States, and in several states and foreign jurisdictions in which we operate. We account for income taxes in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS 109”). SFAS 109 requires the recognition of deferred tax assets, net of applicable reserves, related to net operating loss carryforwards and certain temporary differences. The standard requires recognition of a future tax benefit to the extent that realization of such benefit is more likely than not. Otherwise, a valuation allowance is applied.

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     As reflected in Note 11 to the accompanying consolidated financial statements, at December 31, 2005, we had $126 million of deferred tax assets and $3.4 billion of deferred tax liabilities. Except for certain New Jersey state net operating losses, certain other New Jersey state deferred tax assets and certain foreign deferred tax assets, we believe that it is more likely than not that our deferred tax assets are fully realizable because of the future reversal of existing taxable temporary differences and future projected taxable income. The valuation allowance at December 31, 2005 related to the New Jersey and foreign deferred tax assets were $6 million and $2 million, respectively.

     Our income tax returns are subject to examination by the Internal Revenue Service (“IRS”) and other tax authorities. While positions taken in tax returns are sometimes subject to uncertainty in the tax laws, we do not take such positions unless we have “substantial authority” to do so under the Internal Revenue Code and applicable regulations. We may take positions on our tax returns based on substantial authority that are not ultimately accepted by the IRS.

     We assess such potential unfavorable outcomes based on the criteria of Statement of Financial Accounting Standards No. 5, “Accounting for Contingencies” (“SFAS 5”). We establish a tax reserve if an unfavorable outcome is probable and the amount of the unfavorable outcome can be reasonably estimated. We assess the potential outcomes of tax uncertainties on a quarterly basis. In determining whether the probable criterion of SFAS 5 is met, we presume that the taxing authority will focus on the exposure and we assess the probable outcome of a particular issue based upon the relevant legal and technical merits. We also apply our judgment regarding the potential actions by the tax authorities and resolution through the settlement process.

     We maintain required tax reserves until such time as the underlying issue is resolved. When actual results differ from reserve estimates, we adjust the income tax provision and our tax reserves in the period resolved. For tax years that are examined by taxing authorities, we adjust tax reserves in the year the tax examinations are settled. For tax years that are not examined by taxing authorities, we adjust tax reserves in the year that the statute of limitations expires. Our estimate of the potential outcome for any uncertain tax issue is highly judgmental, and we believe we have adequately provided for any reasonable and foreseeable outcomes related to uncertain tax matters.

     During 2003, we filed amended returns for tax years subsequent to 1996 to reflect the impact of the IRS audits of the 1993 through 1996 tax years on those subsequent years. In the fourth quarter of 2003, the statutes of limitations expired for the 1997 through 1999 tax years, resulting in a reduction of our tax reserves of $13 million and a corresponding reduction in our provision for income taxes. In the third quarter of 2004, the statute of limitations expired for our 2000 tax return, resulting in a reduction of our tax reserves of $6 million and a corresponding reduction in our provision for income taxes. The IRS is currently auditing our 2001 and 2002 tax returns, and the tax returns for years after 2002 are subject to possible future examination.

     We classify reserves for tax uncertainties within “Other accrued liabilities” in the accompanying consolidated balance sheets, separate from any related income tax payable or deferred income taxes. Reserve amounts may relate to the deductibility of an item, as well as potential interest associated with those items.

     A portion of our tax reserves was assumed in the Mirage Resorts and Mandalay acquisitions. The IRS audit of the tax returns of Mirage Resorts through the merger date was settled in August 2003, resulting in a payment to the IRS of $45 million, including interest. These matters had been previously reserved for, so the settlement had no impact on our goodwill balances. Any future adjustments to the acquired Mirage Resorts and Mandalay tax reserves will be recorded as an adjustment to goodwill.

     Business Combinations

     We account for business combinations in accordance with Statement of Financial Accounting Standards No, 141, “Accounting for Business Combinations” (“SFAS 141”) and Statement of Financial Accounting Standards No. 142, “Accounting tor Goodwill and Other Intangible Assets” (“SFAS 142”), and related interpretations. SFAS 141 requires that we record the net assets of acquired businesses at fair value, and we must make estimates and assumptions to determine the fair value of these acquired assets and assumed liabilities.

     In determining the fair value of acquired assets and assumed liabilities in the Mandalay acquisition, we hired third-party valuation specialists to assist us with certain fair value estimates, primarily related to land, property and equipment and intangible assets. We and the third-party specialist applied significant judgment and utilized a variety of assumptions in determining the fair value of acquired assets and assumed liabilities, including market data, estimated future cash flows, growth rates, current replacement cost for similar capacity for certain fixed assets, market rate assumptions for contractual obligations and settlement plans for contingencies and liabilities.

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     The Mandalay purchase price allocation is preliminary and may be adjusted up to one year after the acquisition. In particular, the Company is still evaluating certain customer relationship intangible assets related to individual and group hotel reservations as well as gaming loyalty program members. Changes to the assumptions we used to estimate fair value could impact the recorded amounts for acquired assets and assumed liabilities and significant changes to these balances could have a material impact to our future reported results. For instance, lower or higher fair values assigned to property, plant, and equipment and certain amortizable intangible assets could result in lower or higher amounts of depreciation and amortization recorded.

Recently Issued Accounting Standards

  Stock-based Compensation

     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, “Accounting for Stock-Based Compensation” (“SFAS 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. Most companies, including us, 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) was effective for us on January 1, 2006, and all future share-based payments must be recorded at fair value. The following are the key impacts and decisions regarding implementation of SFAS 123(R).

     Valuation model. Under SFAS 123, stock options were generally valued using the Black-Scholes model. SFAS 123(R) does not specify which model must be used, but requires that certain assumptions be included in the chosen model, which may be a closed form model, such as the Black-Scholes model, or a binomial model. We have chosen to continue applying the Black-Scholes model.

     Vesting patterns. Under SFAS 123(R), awards with graded vesting, as all of our awards have, may be expensed in one of two time patterns: 1) On a straight-line basis over the complete vesting period, as though the entire award was one grant; or 2) On an accelerated basis, treating each vesting layer as a separate grant and amortizing each layer on a straight-line basis. For disclosure purposes under SFAS 123, we used the accelerated basis. We will use the straight-line method for future grants under SFAS 123(R). As discussed below under transition methods, such policy will only apply to future grants. Expense recognized under SFAS 123(R) for previously granted options will continue to be recorded on the accelerated basis.

     Estimating forfeitures. Under SFAS 123, we could choose whether to estimate forfeitures at the grant date or recognize actual forfeitures as they occur. Under SFAS 123(R), we must estimate forfeitures as of the grant date.

     Presentation of excess tax benefits in the statement of cash flows. Under SFAS 123(R), the excess of tax benefits realized from the exercise of employee stock options over the tax benefit associated with the financial reporting expense is shown as a financing cash inflow in the statement of cash flows. Previously, these excess benefits were shown as an operating cash inflow.

     Transition. There are two allowable transition alternatives – the modified-prospective transition or the modified-retrospective transition. We will apply the modified-prospective transition. Under the modified-prospective transition, we will begin applying the valuation and other criteria to stock options granted beginning January 1, 2006. We will begin recognizing expense for the unvested portion of previously issued grants at the same time, based on the valuation and attribution methods originally used to calculate the disclosures.

     The impact of adopting SFAS 123(R) on our operating results will depend in part on the amount of stock options or other share-based payments we grant in the future. The following table shows compensation expense, net of tax, related to options granted through December 31, 2005, based on the options’ vesting schedules:

	(In thousands)
2003 (Actual, included in our pro forma disclosures)	$	43,310
2004 (Actual, included in our pro forma disclosures)		22,963
2005 (Actual, included in our pro forma disclosures)		47,934
2006 (Estimated, to be recorded as expense)		45,595

     We do not believe the adoption of SFAS 123(R) will have a material impact on our cash flows or financial position.

  Rental costs incurred during a construction period

     In October 2005, the Financial Accounting Standards Board issued Staff Position FAS 13-1, “Accounting for Rental Costs Incurred during a Construction Period” (“FSP FAS 13-1”). FSP FAS 13-1 requires that rental costs associated with ground or building operating leases incurred during a construction period be expensed. Prevalent practice in real estate and hospitality industries had been to capitalize such rental costs during a construction period as a project cost.

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     FSP FAS 13-1 is effective for fiscal years beginning after December 15, 2005, with early adoption permitted. We will adopt FSP FAS 13-1 in the first quarter of 2006. We do not believe that the adoption of FSP FAS 13-1 will have a material impact on our cash flows or financial position. We have historically not had significant leases during construction. We will have some minor leases in connection with Project CityCenter, and MGM Grand Paradise Limited will have a land lease for the project site in Macau.

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 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 December 31, 2005, long-term fixed rate borrowings represented approximately 61% of our total borrowings. Based on December 31, 2005 debt levels, an assumed 100 basis-point change in LIBOR would cause our annual interest cost to change by approximately $48 million.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     We incorporate by reference the information appearing under “Market Risk” in Item 7 of this Form 10-K.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Our Consolidated Financial Statements and Notes to Consolidated Financial Statements, including the Independent Registered Public Accounting Firm’s Report thereon, referred to in Item 15(a)(1) of this Form 10-K, are included at pages 49 to 75 of this Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

     None.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure 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 December 31, 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.

Management’s Annual Report on Internal Control Over Financial Reporting

     Management’s Annual Report on Internal Control Over Financial Reporting, referred to in Item 15(a)(1) of this Form 10-K, is included at page 47 of this Form 10-K.

Attestation Report of the Independent Registered Public Accounting Firm

     The Independent Registered Public Accounting Firm’s Attestation Report on management’s assessment of our internal control over financial reporting referred to in Item 15(a)(1) of this Form 10-K, is included at page 48 of this Form 10-K.

Changes in Internal Control over Financial Reporting

     During the quarter ended December 31, 2005, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

     None.

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PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     We incorporate by reference the information appearing under “Executive Officers of the Registrant” in Item 1 of this Form 10-K and under “Election of Directors” in our definitive Proxy Statement for our 2006 Annual Meeting of Stockholders, which we expect to file with the Securities and Exchange Commission on or about April 3, 2006 (the “Proxy Statement”). We have adopted a code of conduct which is posted on our website, along with any amendments or waivers to the Code.

ITEM 11. EXECUTIVE COMPENSATION

     We incorporate by reference the information appearing under “Executive Compensation and Other Information” in the Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     We incorporate by reference the information appearing under “Principal Stockholders” in the Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     We incorporate by reference the information appearing under “Certain Transactions” in the Proxy Statement.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

     We incorporate by reference the information appearing under “Audit Committee Report” in the Proxy Statement.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a)(1). Financial Statements.

Included in Part II of this Report:

Management’s Annual Report on Internal Control Over Financial Reporting

Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting

Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements

Consolidated Balance Sheets — December 31, 2005 and 2004

Years Ended December 31, 2005, 2004 and 2003

Consolidated Statements of Income

Consolidated Statements of Cash Flows

Consolidated Statements of Stockholders’ Equity

Notes to Consolidated Financial Statements

(a)(2). Financial Statement Schedule.

Included in Part IV of this Report:

Years Ended December 31, 2005, 2004 and 2003

Schedule II — Valuation and Qualifying Accounts

     We have omitted schedules other than the one listed above because they are not required or are not applicable, or the required information is shown in the financial statements or notes to the financial statements.

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(a)(3). Exhibits.

Exhibit
Number		Description
2	(1)	Agreement and Plan of Merger, dated as of June 15, 2004, among MGM MIRAGE, Mandalay Resort Group and MGM MIRAGE Acquisition Co. #61, a wholly owned subsidiary of MGM MIRAGE (incorporated by reference to Exhibit 2.01 to the Company’s Current Report on Form 8-K dated June 17, 2004).
3	(1)	Certificate of Incorporation of the Company, as amended through 1997 (incorporated by reference to Exhibit 3(1) to Registration Statement No. 33-3305 and to Exhibit 3(a) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997).
3	(2)	Certificate of Amendment to Certificate of Incorporation of the Company, dated January 7, 2000, relating to an increase in the authorized shares of common stock (incorporated by reference to Exhibit 3(2) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999 (the “1999 10-K”)).
3	(3)	Certificate of Amendment to Certificate of Incorporation of the Company, dated January 7, 2000, relating to a 2-for-1 stock split (incorporated by reference to Exhibit 3(3) to the 1999 10-K).
3	(4)	Certificate of Amendment to Certificate of Incorporation of the Company, dated August 1, 2000 (incorporated by reference to Exhibit 3(i).4 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000 (the “September 2000 10-Q”)).
3	(5)	Certificate of Amendment to Certificate of Incorporation of the Company, dated June 3, 2003, relating to compliance with provisions of the New Jersey Casino Control Act relating to holders of Company securities (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2003 (the “June 2003 10-Q”)).
3	(6)	Certificate of Amendment to Certificate of Incorporation of the Company, dated May 3, 2005 (incorporated by reference to Exhibit 3.10 to Amendment No. 1 to the Company’s Form 8-A filed with the Commission on May 11, 2005).
3	(7)	Amended and Restated Bylaws of the Company, effective May 11, 2004 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2004 (the “June 2004 10-Q”).
4	(1)	Indenture by and between Mandalay and First Interstate Bank of Nevada, N.A., as Trustee with respect to Mandalay’s 7.625% Senior Subordinated Debentures due 2013 (incorporated by reference to Exhibit 4(a) to Mandalay’s Current Report on Form 8-K dated July 21, 1993).
4	(2)	Indenture, dated February 1, 1996, by and between Mandalay and First Interstate Bank of Nevada, N.A., as Trustee (incorporated by reference to Exhibit 4(b) to Mandalay’s Current Report on Form 8-K dated January 29, 1996 (the “Mandalay January 1996 8-K”)).
4	(3)	Supplemental Indenture, dated February 1, 1996, by and between Mandalay and First Interstate Bank of Nevada, N.A., as Trustee, with respect to Mandalay’s 6.45% Senior Notes due February 1, 2006 (incorporated by reference to Exhibit 4(c) to the Mandalay January 1996 8-K).
4	(4)	6.45% Senior Notes due February 1, 2006 in the principal amount of $200,000,000 (incorporated by reference to Exhibit 4(d) to the Mandalay January 1996 8-K).

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Exhibit
Number	Description
4 (5)	Indenture, dated as October 15, 1996, between MRI and Firstar Bank of Minnesota, N.A., as trustee (the “MRI 1996 Indenture”) (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q of Mirage Resorts Incorporated (“MRI”) (Commission File No. 01-6697) for the fiscal quarter ended September 30, 1996 (the “MRI September 1996 10-Q”)).
4 (6)	Supplemental Indenture, dated as October 15, 1996, to the MRI 1996 Indenture (incorporated by reference to Exhibit 4.2 to the MRI September 1996 10-Q).
4 (7)	Supplemental Indenture, dated as of November 15, 1996, to an indenture dated February 1, 1996, by and between Mandalay and Wells Fargo Bank (Colorado), N.A., as Trustee, with respect to Mandalay’s 6.70% Senior Notes due November 15, 2096 (incorporated by reference to Exhibit 4(c) to Mandalay’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 1996 (the “Mandalay October 1996 10-Q”)).
4 (8)	6.70% Senior Notes due February 15, 2096 in the principal amount of $150,000,000 (incorporated by reference to Exhibit 4(d) to the Mandalay October 1996 10-Q).
4 (9)	Indenture, dated November 15, 1996, by and between Mandalay and Wells Fargo Bank (Colorado), N.A., as Trustee (incorporated by reference to Exhibit 4(e) to the Mandalay October 1996 10-Q).
4 (10)	Supplemental Indenture, dated as of November 15, 1996, to an indenture dated November 15, 1996, by and between Mandalay and Wells Fargo Bank (Colorado), N.A., as Trustee, with respect to Mandalay’s 7.0% Senior Notes due November 15, 2036 (incorporated by reference to the Mandalay October 1996 10-Q).
4 (11)	7.0% Senior Notes due February 15, 2036, in the principal amount of $150,000,000 (incorporated by reference to Exhibit 4(g) to the Mandalay October 1996 10-q).
4 (12)	Indenture, dated as of August 1, 1997, between MRI and First Security Bank, National Association, as trustee (the “MRI 1997 Indenture”) (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q of MRI for the fiscal quarter ended June 30, 1997 (the “MRI June 1997 10-Q”)).
4 (13)	Supplemental Indenture, dated as of August 1, 1997, to the MRI 1997 Indenture (incorporated by reference to Exhibit 4.2 to the MRI June 1997 10-Q).
4 (14)	Indenture, dated as of February 4, 1998, between MRI and PNC Bank, National Association, as trustee (the “MRI 1998 Indenture”) (incorporated by reference to Exhibit 4(e) to the Annual Report on Form 10-K of MRI for the fiscal year ended December 31, 1997 (the “MRI 1997 10-K”)).
4 (15)	Supplemental Indenture, dated as of February 4, 1998, to the MRI 1998 Indenture (incorporated by reference to Exhibit 4(f) to the MRI 1997 10-K).
4 (16)	Indenture, dated as of May 31, 2000, among the Company, as issuer, the Subsidiary Guarantors parties thereto, as guarantors, and The Bank of New York, as trustee (incorporated by reference to Exhibit 4 to the Company’s Current Report on Form 8-K dated May 22, 2000 (the “May 2000 8-K”)).
4 (17)	Indenture dated as of July 24, 2000 by and between Mandalay and The Bank of New York with respect to $500 million aggregate principal amount of 10.25% Senior Subordinated Notes due 2007 (incorporated by reference to Exhibit 4.1 to Mandalay’s Form S-4 Registration Statement No. 333-44216).
4 (18)	Indenture dated as of August 16, 2000 by and between Mandalay and The Bank of New York, with respect to $200 million aggregate principal amount of 9.5% Senior Notes due 2008 (incorporated by reference to Exhibit 4.1 to Mandalay’s Form S-4 Registration Statement No. 333-44838).

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Exhibit
Number	Description
4(19)	Indenture, dated as of September 15, 2000, among the Company, as issuer, the Subsidiary Guarantors parties thereto, as guarantors, and U.S. Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4 to the Company’s Amended Current Report on Form 8-K/A dated September 12, 2000).
4(20)	First Supplemental Indenture, dated as of September 15, 2000, among the Company, Bellagio Merger Sub, LLC and U.S. Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4(11) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 (the “2000 10-K”)).
4(21)	First Supplemental Indenture, dated as of September 30, 2000, among the Company, Bellagio Merger Sub, LLC and The Bank of New York, as trustee (incorporated by reference to Exhibit 4(12) to the 2000 10-K).
4(22)	Second Supplemental Indenture, dated as of October 10, 2000, to the MRI 1996 Indenture (incorporated by reference to Exhibit 4(13) to the 2000 10-K).
4(23)	Second Supplemental Indenture, dated as of October 10, 2000, to the MRI 1997 Indenture (incorporated by reference to Exhibit 4(14) to the 2000 10-K).
4(24)	Second Supplemental Indenture, dated as of October 10, 2000, to the MRI 1998 Indenture (incorporated by reference to Exhibit 4(15) to the 2000 10-K).
4(25)	Second Supplemental Indenture, dated as of December 31, 2000, among the Company, MGM Grand Hotel & Casino Merger Sub, LLC and The Bank of New York, as trustee (incorporated by reference to Exhibit 4(16) to the 2000 10-K).
4(26)	Second Supplemental Indenture, dated as of December 31, 2000, among the Company, MGM Grand Hotel & Casino Merger Sub, LLC and U.S. Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4(17) to the 2000 10-K).
4(27)	Indenture, dated as of January 23, 2001, among the Company, as issuer, the Subsidiary Guarantors parties thereto, as guarantors, and United States Trust Company of New York, as trustee (incorporated by reference to Exhibit 4 to the Company’s Current Report on Form 8-K dated January 18, 2001).
4(28)	Indenture dated as of December 20, 2001 by and among Mandalay and The Bank of New York, with respect to $300 million aggregate principal amount of 9.375% Senior Subordinated Notes due 2010 (incorporated by reference to Exhibit 4.1 to Mandalay’s Form S-4 Registration Statement No. 333-82936).
4(29)	Indenture dated as of March 21, 2003 by and among Mandalay and The Bank of New York with respect to $400 million aggregate principal amount of Floating Rate Convertible Senior Debentures due 2033 (incorporated by reference to Exhibit 4.44 to Mandalay’s Annual Report on Form 10-K for the fiscal year ended January 31, 2003).
4(30)	First Supplemental Indenture dated as of July 26, 2004, relating to Mandalay’s Floating Rate Senior Convertible Debentures due 2033 (incorporated by reference to Exhibit 4 to Mandalay’s Current Report on Form 8-K dated July 26, 2004).
4(31)	Indenture, dated as of July 31, 2003, by and between Mandalay and The Bank of New York with respect to $250 million aggregate principal amount of 6.5% Senior Notes due 2009 (incorporated by reference to Exhibit 4.1 to Mandalay’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2003).
4(32)	Indenture, dated as of September 17, 2003, among the Company, as issuer, the Subsidiary Guarantors parties thereto, as guarantors, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated September 11, 2003).

40

Exhibit
Number		Description
4 (33)		Indenture, dated as of November 25, 2003, by and between Mandalay and The Bank of New York with respect to $250 million aggregate principal amount of 6.375% Senior Notes due 2011 (incorporated by reference to Exhibit 4.1 to Mandalay’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2003).
4 (34)		Indenture dated as of February 27, 2004, among the Company, as issuer, the Subsidiary Guarantors, as guarantors, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, dated February 27, 2004).
4 (35)		Indenture dated as of August 25, 2004, among the Company, as issuer, certain subsidiaries of the Company, as guarantors, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated August 25, 2004).
4 (36)		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).
4 (37)		Supplemental Indenture, dated September 9, 2005, among MGM MIRAGE, certain subsidiaries of MGM MIRAGE, and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated September 9, 2005).
10.1	(1)	Guarantee, dated as of May 31, 2000, by certain subsidiaries of the Company, in favor of The Chase Manhattan Bank, as successor in interest to PNC Bank, National Association, as trustee for the benefit of the holders of Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.4 to the May 2000 8-K).
10.1	(2)	Schedule setting forth material details of the Guarantee, dated as of May 31, 2000, by certain subsidiaries of the Company, in favor of U.S. Trust Company, National Association (formerly known as U.S. Trust Company of California, N.A.), as trustee for the benefit of the holders of Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.5 to the May 2000 8-K).
10.1	(3)	Guarantee (Mirage Resorts, Incorporated 7.25% Senior Notes Due October 15, 2006), dated as of May 31, 2000, by the Company and certain of its subsidiaries, in favor of Firstar Bank of Minnesota, N.A., as trustee for the benefit of the holders of Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.6 to the May 2000 8-K).
10.1	(4)	Schedule setting forth material details of the Guarantee (Mirage Resorts, Incorporated 6.75% Notes Due February 1, 2008), dated as of May 31, 2000, by the Company and certain of its subsidiaries, in favor of The Chase Manhattan Bank, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.7 to the May 2000 8-K).
10.1	(5)	Schedule setting forth material details of the Guarantee (Mirage Resorts, Incorporated 6.75% Notes Due August 1, 2007 and 7.25% Debentures Due August 1, 2017), dated as of May 31, 2000, by the Company and certain of its subsidiaries, in favor of First Security Bank, National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.8 to the May 2000 8-K).
10.1	(6)	Instrument of Joinder, dated as of May 31, 2000, by MRI and certain of its wholly owned subsidiaries, in favor of the beneficiaries of the Guarantees referred to therein (incorporated by reference to Exhibit 10.9 to the May 2000 8-K).
10.1	(7)	Guarantee (MGM MIRAGE 9.75% Senior Subordinated Notes due 2007) dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York N.A., as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2005 (the “September 2005 10-Q”)).

41

Exhibit
Number		Description
10.1	(8)	Guarantee (MGM MIRAGE 8.5% Senior Notes due 2010), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York N.A., as successor to U.S. Trust Company, National Association, for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.7 to the September 2005 10-Q).
10.1	(9)	Guarantee (Mirage Resorts, Incorporated 7.25% Senior Notes due 2006), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of U.S. Bank National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.8 to the September 2005 10-Q).
10.1	(10)	Guarantee (Mandalay Resort Group 7.625% Senior Subordinated Notes due 2013), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.9 to the September 2005 10-Q).
10.1	(11)	Guarantee (Mandalay Resort Group 6.45% Senior Notes due 2006), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of Wells Fargo Bank (Colorado), N.A., as successor in interest to First Interstate Bank of Nevada, N.A., as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.10 to the September 2005 10-Q).
10.1	(12)	Guarantee (MGM MIRAGE 8.375% Senior Subordinated Notes due 2011), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York N.A., successor to the United States Trust Company of New York, as trustee for the benefit of holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.11 to the September 2005 10-Q).
10.1	(13)	Guarantee (MGM MIRAGE 6.0% Senior Notes due 2009), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of U.S. Bank National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.12 to the September 2005 10-Q).
10.1	(14)	Guarantee (MGM MIRAGE 6.0% Senior Notes due 2009 (Exchange Notes)), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of U.S. Bank National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.13 to the September 2005 10-Q).
10.1	(15)	Guarantee (MGM MIRAGE 5.875% Senior Notes due 2014), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of U.S. Bank National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.14 to the September 2005 10-Q).
10.1	(16)	Guarantee (MGM MIRAGE 5.875% Senior Notes due 2014 (Exchange Notes)), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of U.S. Bank National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.15 to the September 2005 10-Q).
10.1	(17)	Guarantee (MGM MIRAGE 6.75% Senior Notes due 2012), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of U.S. Bank National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.16 to the September 2005 10-Q).
10.1	(18)	Guarantee (Mirage Resorts, Incorporated 6.75% Senior Notes due 2007 and 7.25% Debentures due 2017), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of Wells Fargo Bank Northwest, National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.17 to the September 2005 10-Q).

42

Exhibit
Number	Description
10.1(19)	Guarantee (Mirage Resorts, Incorporated 6.75% Senior Notes due 2008), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of JPMorgan Chase Bank, N.A., successor in interest to PNC Bank, National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.18 to the September 2005 10-Q).
10.1(20)	Guarantee (Mandalay Resort Group 10.25% Senior Subordinated Notes due 2007), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.19 to the September 2005 10-Q).
10.1(21)	Guarantee (Mandalay Resort Group 9.375% Senior Subordinated Notes due 2010), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.20 to the September 2005 10-Q).
10.1(22)	Guarantee (Mandalay Resort Group 6.70% Senior Notes due 2096), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York, as successor in interest to First Interstate Bank of Nevada, N.A., as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.21 to the September 2005 10-Q).
10.1(23)	Guarantee (Mandalay Resort Group 7.0% Senior Notes due 2036), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.22 to the September 2005 10-Q).
10.1(24)	Guarantee (Mandalay Resort Group 9.5% Senior Notes due 2008), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.23 to the September 2005 10-Q).
10.1(25)	Guarantee (Mandalay Resort Group Floating Rate Convertible Senior Debentures due 2033), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.24 to the September 2005 10-Q).
10.1(26)	Guarantee (Mandalay Resort Group 6.5% Senior Notes due 2009), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.25 to the September 2005 10-Q).
10.1(27)	Guarantee (Mandalay Resort Group 6.375% Senior Notes due 2011), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.26 to the September 2005 10-Q).
10.1(28)	Fourth Amended and Restated Loan Agreement, dated November 22, 2004, by and among the Company, as Borrower, MGM Grand Detroit, LLC, as a Co-Borrower, the Lenders and Co-Documentation Agents therein named, Bank of America, N.A., as the Administrative Agent, The Royal Bank of Scotland PLC, as the Syndication Agent, and Bank of America Securities LLC and The Royal Bank of Scotland PLC, as Joint Lead Arrangers and Joint Book Managers (incorporated by reference to Exhibit 10.1(10) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004).

43

Exhibit
Number		Description
10.1	(29)	Guaranty Agreement, dated August 16, 2004, by MGM MIRAGE in favor of Bank of America, N.A., as Administrative Agent for the benefit of the Lenders from time to time party to a Construction Loan Agreement with the Borrower, Turnberry/MGM Grand Towers, LLC (incorporated by reference to Exhibit 10.2 of the September 2004 10-Q).
10.1	(30)	Guaranty Agreement, dated September 21, 2005, by MGM MIRAGE in favor of Bank of America, N.A., as Administrative Agent for the benefit of the Lenders from time to time party to a Construction Loan Agreement with the Borrower, Turnberry/MGM Grand Tower B, LLC.
10.2	(1)	Lease, dated August 3, 1977, by and between B&D Properties, Inc., as lessor, and Mandalay, as lessee; Amendment of Lease, dated May 6, 1983 (incorporated by reference to Exhibit 10(h) to Mandalay’s Registration Statement (No. 2-85794) on Form S-1).
10.2	(2)	Lease by and between Robert Lewis Uccelli, guardian, as lessor, and Nevada Greens, a limited partnership, William N. Pennington, as trustee, and William G. Bennett, as trustee, and related Assignment of Lease (incorporated by reference to Exhibit 10(p) to Mandalay’s Registration Statement (No. 33-4475) on Form S-1).
10.2	(3)	Amended and Restated Ground Lease Agreement, dated July 1, 1993, between Primm South Real Estate Company and The Primadonna Corporation (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Primadonna Resorts, Inc. (Commission File No. 0-21732) for the fiscal quarter ended September 30, 1993).
10.2	(4)	First Amendment to the Amended and Restated Ground Lease Agreement and Consent and Waiver, dated as of August 25, 1997, between The Primadonna Corporation and Primm South Real Estate Company (incorporated by reference to Exhibit 10.31 to the Annual Report on Form 10-K of Primadonna Resorts, Inc. for the fiscal year ended December 31, 1997).
10.2	(5)	Public Trust Tidelands Lease, dated February 4, 1999, between the State of Mississippi and Beau Rivage Resorts, Inc. (without exhibits) (incorporated by reference to Exhibit 10.73 to the Annual Report on Form 10-K of MRI for the fiscal year ended December 31, 1999).
*10.3	(1)	Nonqualified Stock Option Plan (incorporated by reference to Exhibit 10(1) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996).
*10.3	(2)	1997 Nonqualified Stock Option Plan, Amended and Restated February 2, 2004 (incorporated by reference to Exhibit 10.1 of the June 2004 10-Q).
*10.3	(3)	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).
*10.3	(4)	Amended and Restated Annual Performance Based Incentive Plan for Executive Officers, giving effect to amendment approved by the Company’s shareholders on May 13, 2003 (incorporated by reference to Appendix B to the Company’s 2003 Proxy Statement).
*10.3	(5)	Non-Qualified Deferred Compensation Plan, dated as of January 1, 2001 (incorporated by reference to Exhibit 10.3(12) to the 2000 10-K).
*10.3	(6)	Supplemental Executive Retirement Plan, dated as of January 1, 2001 (incorporated by reference to Exhibit 10.3(13) to the 2000 10-K).
*10.3	(7)	Deferred Compensation Plan II, dated as of December 30, 2004 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated January 10, 2005 (the “January 2005 8-K”).

44

Exhibit
Number		Description
*10.3	(8)	Supplemental Executive Retirement Plan II, dated as of December 30, 2004 (incorporated by reference to Exhibit 10.1 to the January 2005 8-K).
*10.3	(9)	Amendment to Deferred Compensation Plan II, dated as of December 21, 2005.
*10.3	(10)	Employment Agreement, dated September 16, 2005 between the Company and J. Terrence Lanni (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated September 16, 2005 (the “September 16, 2005 8-K”)).
*10.3	(11)	Employment Agreement, dated September 16, 2005 between the Company and Robert H. Baldwin (incorporated by reference to Exhibit 10.2 to the September 16, 2005 8-K).
*10.3	(12)	Employment Agreement, dated September 16, 2005 between the Company and John Redmond (incorporated by reference to Exhibit 10.3 to the September 16, 2005 8-K).
*10.3	(13)	Employment Agreement, dated September 16, 2005 between the Company and James J. Murren (incorporated by reference to Exhibit 10.4 to the September 16, 2005 8-K).
*10.3	(14)	Employment Agreement, dated September 16, 2005 between the Company and Gary N. Jacobs (incorporated by reference to Exhibit 10.5 to the September 16, 2005 8-K).
10.4	(1)	Second Amended and Restated Joint Venture Agreement of Marina District Development Company, dated as of August 31, 2000, between MAC, CORP. and Boyd Atlantic City, Inc. (without exhibits) (incorporated by reference to Exhibit 10.2 to the September 2000 10-Q).
10.4	(2)	Contribution and Adoption Agreement, dated as of December 13, 2000, among Marina District Development Holding Co., LLC, MAC, CORP. and Boyd Atlantic City, Inc. (incorporated by reference to Exhibit 10.4(15) to the 2000 10-K).
10.4	(3)	Amended and Restated Agreement of Joint Venture of Circus and Eldorado Joint Venture by and between Eldorado Limited Liability Company and Galleon, Inc. (incorporated by reference to Exhibit 3.3 to the Form S-4 Registration Statement of Circus and Eldorado Joint Venture and Silver Legacy Capital Corp.—Commission File No. 333-87202).
10.4	(4)	Amended and Restated Joint Venture Agreement, dated as of June 25, 2002, between Nevada Landing Partnership and RBG, L.P. (incorporated by reference to Exhibit 10.1 to Mandalay’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2004.)
10.4	(5)	Amendment No.1 to Amended and Restated Joint Venture Agreement, dated as of April 25, 2005, by and among Nevada Landing Partnership, an Illinois general partnership, and RBG, L.P., an Illinois limited partnership.
10.4	(6)	Amended and Restated Subscription and Shareholders Agreement, dated June 19, 2004, among Pansy Ho, Grand Paradise Macau Limited, MGMM Macau, Ltd., MGM MIRAGE Macau, Ltd., MGM MIRAGE and MGM Grand Paradise Limited (formerly N.V. Limited) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 19, 2005).
10.5	(1)	Revised Development Agreement among the City of Detroit, The Economic Development Corporation of the City of Detroit and MGM Grand Detroit, LLC (incorporated by reference to Exhibit 10.10 to the June 2002 10-Q).
10.5	(2)	Revised Development Agreement effective August 2, 2002, by and among the City of Detroit, The Economic Development Corporation of the City of Detroit and Detroit Entertainment, L.L.C. (incorporated by reference to Exhibit 10.61 of Mandalay’s Annual Report on Form 10-K for the year ended January 31, 2005).
10.6	(1)	Agreement and Plan of Merger dated as of March 22, 2005 among Mandalay Resort Group, MGM MIRAGE, Circus Circus Michigan, Inc., CCM Merger Inc., and CCM Merger Sub., Inc. (incorporated by reference to Exhibit 2.01 to Mandalay’s Current Report on Form 8-K dated March 22, 2005).

45

Exhibit
Number	Description
10.6 (2)	Letter Agreement, dated March 22, 2005, between MGM MIRAGE and CCM Merger Inc. (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K dated March 22, 2005).
21	List of subsidiaries of the Company.
23	Consent of Deloitte & Touche LLP.
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.
99	Description of Regulation and Licensing.

*	Management contract or compensatory plan or arrangement.
**	Exhibits 32.1 and 32.2 shall not be deemed filed with the Securities and Exchange Commission, nor shall they be deemed incorporated by reference in any filing with the Securities and Exchange Commission under the Securities Exchange Act of 1934 or the Securities Act of 1933, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

46

MANAGEMENT’S ANNUAL REPORT
ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management’s Responsibilities

     Management is responsible for establishing and maintaining adequate internal control over financial reporting for MGM MIRAGE and subsidiaries (the “Company”).

  Objective of Internal Control Over Financial Reporting

     In establishing adequate internal control over financial reporting, management has developed and maintained a system of internal control, policies and procedures designed to provide reasonable assurance that information contained in the accompanying consolidated financial statements and other information presented in this annual report is reliable, does not contain any untrue statement of a material fact or omit to state a material fact, and fairly presents in all material respects the financial condition, results of operations and cash flows of the Company as of and for the periods presented in this annual report. Significant elements of the Company’s internal control over financial reporting include, for example:

• Hiring skilled accounting personnel and training them appropriately;

• Written accounting policies;

• Written documentation of accounting systems and procedures;

• Segregation of incompatible duties;

• Internal audit function to monitor the effectiveness of the system of internal control;

• Oversight by an independent Audit Committee of the Board of Directors.

Management’s Evaluation

     Management has evaluated the Company’s internal control over financial reporting using the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As permitted by the Securities and Exchange Commission, management’s evaluation as of December 31, 2005 excludes Mandalay Resort Group (“Mandalay”) and the business units acquired in the merger with Mandalay which closed on April 25, 2005. Such businesses represent approximately 47% of the Company’s total assets as of December 31, 2005 and 29% of the Company’s total revenues for the year ended December 31, 2005. Based on its evaluation as of December 31, 2005, management believes that the Company’s internal control over financial reporting, excluding Mandalay, is effective in achieving the objectives described above.

  Report of Independent Registered Public Accounting Firm

     Deloitte & Touche LLP audited the Company’s consolidated financial statements as of and for the period ended December 31, 2005 and issued their report thereon, which is included in this annual report. Deloitte & Touche LLP has also issued an attestation report on management’s assessment and on the effectiveness of the Company’s internal control over financial reporting, excluding Mandalay, and such report is also included in this annual report.

47

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
of MGM MIRAGE

     We have audited management’s assessment, included in the accompanying “Management’s Annual Report on Internal Control Over Financial Reporting,” that MGM MIRAGE and subsidiaries (the “Company”) maintained effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As described in “Management’s Annual Report on Internal Control Over Financial Reporting,” management excluded from their assessment the internal control over financial reporting of Mandalay Resort Group (“Mandalay”) and the business units acquired in the merger which closed on April 25, 2005. Such businesses represent approximately 47% of the Company’s total assets as of December 31, 2005 and 29% of the Company’s total revenues for the year ended December 31, 2005. Accordingly, our audit did not include the internal control over financial reporting of Mandalay and the business units acquired in the merger. The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Company’s internal control over financial reporting based on our audit.

     We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.

     A company’s internal control over financial reporting is a process designed by, or under the supervision of, the company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

     Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

     In our opinion, management’s assessment that the Company maintained effective internal control over financial reporting as of December 31, 2005, is fairly stated, in all material respects, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

     We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2005 of the Company and our report dated March 10, 2006 expressed an unqualified opinion on those financial statements and financial statement schedule.

/s/ DELOITTE & TOUCHE LLP

Las Vegas, Nevada

March 10, 2006

48

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders
of MGM MIRAGE

     We have audited the accompanying consolidated balance sheets of MGM MIRAGE and subsidiaries (the “Company”) as of December 31, 2005 and 2004, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2005. Our audits also included the financial statement schedule of Valuation and Qualifying Accounts included in Item 15(a)(2). These financial statements and the financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial statements and financial statement schedule based on our audits.

     We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2005 and 2004, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

     We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 10, 2006 expressed an unqualified opinion on management’s assessment of the effectiveness of the Company’s internal control over financial reporting and an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ DELOITTE & TOUCHE LLP

Las Vegas, Nevada

March 10, 2006

49

MGM MIRAGE AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)

	At December 31,
	2005			2004
ASSETS
Current assets
Cash and cash equivalents	$	377,933		$	435,128
Accounts receivable, net		352,673			204,151
Inventories		111,825			70,333
Deferred income taxes		65,518			28,928
Prepaid expenses and other		110,634			81,662
Total current assets		1,018,583			820,202
Property and equipment, net		16,541,651			8,914,142
Other assets
Investments in unconsolidated affiliates		931,154			842,640
Goodwill and other intangible assets, net		1,692,040			233,335
Deposits and other assets, net		515,992			304,710
Total other assets		3,139,186			1,380,685
	$	20,699,420		$	11,115,029
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	265,601		$	198,050
Income taxes payable		125,503			4,991
Current portion of long-term debt		14			14
Accrued interest on long-term debt		229,930			116,997
Other accrued liabilities		913,520			607,925
Total current liabilities		1,534,568			927,977
Deferred income taxes		3,378,371			1,802,008
Long-term debt		12,355,433			5,458,848
Other long-term obligations		195,976			154,492
Commitments and contingencies (Note 12)
Stockholders’ equity
Common stock, $.01 par value: authorized 600,000,000 shares, issued 357,262,405 and 347,147,868 shares; outstanding 285,069,516 and 280,739,868 shares		3,573			3,472
Capital in excess of par value		2,586,587			2,346,329
Deferred compensation		(3,618	)		(10,878	)
Treasury stock, at cost (72,192,889 and 66,408,000 shares)		(1,338,394	)		(1,110,551	)
Retained earnings		1,987,725			1,544,499
Accumulated other comprehensive loss		(801	)		(1,167	)
Total stockholders’ equity		3,235,072			2,771,704
	$	20,699,420		$	11,115,029

The accompanying notes are an integral part of these consolidated financial statements.

50

MGM MIRAGE AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)

	Year Ended December 31,
	2005			2004			2003
Revenues
Casino	$	2,981,651		$	2,223,965		$	2,037,514
Rooms		1,673,696			911,259			833,272
Food and beverage		1,330,210			841,147			757,278
Entertainment		428,606			270,799			255,995
Retail		260,182			184,438			180,935
Other		409,824			240,880			210,772
		7,084,169			4,672,488			4,275,766
Less: Promotional allowances		(602,202	)		(434,384	)		(413,023	)
		6,481,967			4,238,104			3,862,743
Expenses
Casino		1,536,611			1,101,892			1,050,397
Rooms		472,592			248,166			235,899
Food and beverage		816,570			482,079			436,929
Entertainment		307,596			192,465			183,056
Retail		169,667			118,470			115,235
Other		244,023			146,177			130,720
General and administrative		958,263			612,632			585,161
Corporate expense		130,633			77,910			61,541
Preopening and start-up expenses		15,752			10,276			29,266
Restructuring costs (credit)		(59	)		5,625			6,597
Property transactions, net		36,880			8,665			(18,941	)
Depreciation and amortization		588,102			402,545			400,766
		5,276,630			3,406,902			3,216,626
Income from unconsolidated affiliates		151,871			119,658			53,612
Operating income		1,357,208			950,860			699,729
Non-operating income (expense)
Interest income		12,110			5,664			4,078
Interest expense, net		(656,159	)		(378,386	)		(337,586	)
Non-operating items from unconsolidated affiliates		(15,825	)		(12,298	)		(10,401	)
Other, net		(18,434	)		(10,025	)		(12,160	)
		(678,308	)		(395,045	)		(356,069	)
Income from continuing operations before income taxes		678,900			555,815			343,660
Provision for income taxes		(235,644	)		(205,959	)		(113,387	)
Income from continuing operations		443,256			349,856			230,273
Discontinued operations
Income from discontinued operations, including gain (loss) on disposal of $82,538 (2004) and $(6,735) (2003)		—			94,207			16,075
Provision for income taxes		—			(31,731	)		(2,651	)
		—			62,476			13,424
Net income	$	443,256		$	412,332		$	243,697
Basic income per share of common stock
Income from continuing operations	$	1.56		$	1.25		$	0.77
Discontinued operations		—			0.23			0.05
Net income per share	$	1.56		$	1.48		$	0.82
Diluted income per share of common stock
Income from continuing operations	$	1.50		$	1.21		$	0.76
Discontinued operations		—			0.22			0.04
Net income per share	$	1.50		$	1.43		$	0.80

The accompanying notes are an integral part of these consolidated financial statements.

51

MGM MIRAGE AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

	Year Ended December 31,
	2005			2004			2003
Cash flows from operating activities
Net income	$	443,256		$	412,332		$	243,697
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		588,102			403,039			412,937
Amortizational debt discounts, premiums and issuance costs		5,791			31,217			35,826
Provision for doubtful accounts		25,846			(3,522	)		13,668
Property transactions, net		36,880			8,661			(18,336	)
Loss on early retirements of debt		18,139			5,527			3,244
(Gain) loss on disposal of discontinued operations		—			(82,538	)		6,735
Income from unconsolidated affiliates		(134,132	)		(107,360	)		(23,885	)
Distributions from unconsolidated affiliates		89,857			51,500			38,000
Deferred income taxes		51,759			55,647			28,362
Tax benefit from stock option exercises		94,083			38,911			9,505
Changes in current assets and liabilities:
Accounts receivable		(68,159	)		(48,533	)		(14,330	)
Inventories		(7,017	)		(8,557	)		(2,205	)
Income taxes receivable and payable		8,058			14,891			(10,538	)
Prepaid expenses and other		10,830			1,109			(8,500	)
Accounts payable and accrued liabilities		75,404			72,392			53,971
Change in Hurricane Katrina insurance receivable		(46,275	)		—			—
Other		(9,626	)		(15,469	)		(27,339	)
Net cash provided by operating activities		1,182,796			829,247			740,812
Cash flows from investing activities
Acquisition of Mandalay Resort Group, net of cash acquired		(4,420,990	)		—			—
Capital expenditures		(759,949	)		(702,862	)		(550,232	)
Proceeds from the sale of the Golden Nugget Subsidiaries and MGM Grand Australia, net		—			345,730			—
Hurricane Katrina insurance proceeds		46,250			—			—
Dispositions of property and equipment		7,828			32,978			56,614
Investments in unconsolidated affiliates		(183,000	)		(11,602	)		(41,350	)
Change in construction payable		40,803			17,329			12,953
Other		(33,759	)		(29,326	)		(33,673	)
Net cash used in investing activities		(5,302,817	)		(347,753	)		(555,688	)
Cash flows from financing activities
Net borrowings (repayments) under bank credit facilities with maturities of 90 days of less		325,000			(1,574,489	)		(285,087	)
Borrowings under bank credit facilities with maturities longer than 90 days		4,400,000			—			—
Issuance of long-term debt		880,156			1,528,957			600,000
Repayment of long-term debt		(1,408,992	)		(52,149	)		(28,011	)
Debt issuance costs		(50,331	)		(13,349	)		(25,374	)
Issuance of common stock		145,761			135,910			36,254
Purchases of treasury stock		(217,316	)		(348,895	)		(442,864	)
Other		(11,452	)		(1,957	)		(20,153	)
Net cash provided by (used in) financing activities		4,062,826			(325,972	)		(165,235	)
Cash and cash equivalents
Net increase (decrease) for the year		(57,195	)		155,522			19,889
Cash related to discontinued operations		—			—			(15,230	)
Balance, beginning of year		435,128			279,606			274,947
Balance, end of year	$	377,933		$	435,128		$	279,606
Supplemental cash flow disclosures
Interest paid, net of amounts capitalized	$	588,587		$	321,008		$	308,198
State, federal and foreign income taxes paid		75,776			128,393			94,932

The accompanying notes are an integral part of these consolidated financial statements.

52

MGM MIRAGE AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)

For the Years Ended December 31, 2005, 2004 and 2003

																		Accumulated Other
	Common Stock					Capital in												Comprehensive			Total
	Shares			Par		Excess of			Deferred			Treasury			Retained			Income			Stockholders’
	Outstanding			Value		Par Value			Compensation			Stock			Earnings			(Loss)			Equity
Balances, January 1, 2003		309,148		$	3,328	$	2,125,626		$	(27,034	)	$	(317,432	)	$	888,542		$	(8,886	)	$	2,664,144
Net income		—			—		—			—			—			243,697			—			243,697
Currency translation adjustment		—			—		—			—			—			—			12,313			12,313
Derivative income from unconsolidated affiliate, net		—			—		—			—			—			—			2,918			2,918
Total comprehensive income																						258,928
Cancellation of restricted stock		(20	)		—		(54	)		352			(298	)		—			—			—
Issuance of stock options to non-employees		—			—		313			(313	)		—			—			—			—
Amortization of deferred compensation		—			—		—			7,821			—			—			—			7,821
Issuance of common stock upon exercise of stock options		3,750			38		36,235			—			—			(19	)		—			36,254
Purchases of treasury stock		(26,686	)		—		—			—			(442,864	)		—			—			(442,864	)
Tax benefit from stock option exercises		—			—		9,505			—			—			—			—			9,505
Balances, December 31, 2003		286,192			3,366		2,171,625			(19,174	)		(760,594	)		1,132,220			6,345			2,533,788
Net income		—			—		—			—			—			412,332			—			412,332
Currency translation adjustment		—			—		—			—			—			—			(10,336	)		(10,336	)
Derivative income from unconsolidated affiliate, net		—			—		—			—			—			—			2,824			2,824
Total comprehensive income																						404,820
Cancellation of restricted stock		(64	)		—		(64	)		1,126			(1,062	)		—			—			—
Amortization of deferred compensation		—			—		—			7,170			—			—			—			7,170
Issuance of common stock upon exercise of stock options		10,612			106		135,857			—			—			(53	)		—			135,910
Purchases of treasury stock		(16,000	)		—		—			—			(348,895	)		—			—			(348,895	)
Tax benefit from stock option exercises		—			—		38,911			—			—			—			—			38,911
Balances, December 31, 2004		280,740			3,472		2,346,329			(10,878	)		(1,110,551	)		1,544,499			(1,167	)		2,771,704
Net income		—			—		—			—			—			443,256			—			443,256
Currency translation adjustment		—			—		—			—			—			—			(1,631	)		(1,631	)
Derivative income from unconsolidated affiliate, net		—			—		—			—			—			—			1,997			1,997
Total comprehensive income																						443,622
Cancellation of restricted stock		(24	)		—		—			422			(422	)		—			—			—
Issuance of stock options to non-employees		—			—		485			(485	)		—			—			—			—
Amortization of deferred compensation		—			—		—			7,323			—			—			—			7,323
Issuance of common stock upon exercise of stock options		10,115			101		145,690			—			—			(30	)		—			145,761
Purchases of treasury stock		(5,500	)		—		—			—			(217,316	)		—			—			(217,316	)
Restricted shares turned in for tax withholding		(261	)		—		—			—			(10,105	)		—			—			(10,105	)
Tax benefit from stock option exercises		—			—		94,083			—			—			—			—			94,083
Balances, December 31, 2005		285,070		$	3,573	$	2,586,587		$	(3,618	)	$	(1,338,394	)	$	1,987,725		$	(801	)	$	3,235,072

The accompanying notes are an integral part of these consolidated financial statements.

53

MGM MIRAGE AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — ORGANIZATION

     MGM MIRAGE (the “Company”) is a Delaware corporation, incorporated on January 29, 1986. As of December 31, 2005, approximately 56% of the outstanding shares of the Company’s common stock were 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, owns and/or operates casino resorts. On April 25, 2005, the Company completed its merger with Mandalay Resort Group (“Mandalay”) — see Note 3.

     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 and Slots-A-Fun. The Boardwalk was closed in early 2006 in preparation for Project CityCenter (see below). 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 operations 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, which is adjacent to Circus Circus Reno. In addition, the Company owns a 50% interest in The Signature at MGM Grand, which is adjacent to MGM Grand Las Vegas. The Signature at MGM Grand is a condominium-hotel development, with three towers currently under construction. 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. Beau Rivage sustained significant damage in late August 2005 as a result of Hurricane Katrina and has been closed since. The Company expects to reopen Beau Rivage in stages beginning in the third quarter of 2006. 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 that was previously owned by Mandalay. An affiliate of Hyatt Gaming owns the other 50% of Grand Victoria and also operates the resort.

     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 estimated to cost approximately $1.1 billion including land and license rights and preopening costs, began in the second quarter of 2005 and the resort is anticipated to open in late 2007.

     The Company owns 66 acres adjacent to Bellagio on which it is developing Project CityCenter. Project CityCenter will feature a 4,000-room casino resort designed by world-famous architect Cesar Pelli; two 400-room non-gaming boutique hotels, one of which will be managed by luxury hotelier Mandarin Oriental; approximately 470,000 square feet of retail shops, dining and entertainment venues; and approximately 2.3 million square feet of residential space in over 2,900 luxury condominium and condominium-hotel units in multiple towers. The overall cost of Project CityCenter is estimated at approximately $7 billion, excluding preopening and land costs. After estimated proceeds of $2.5 billion from the sale of residential units, net project cost is estimated at approximately $4.5 billion. Project City Center is expected to open in 2009.

     Until July 2004, the Company owned and operated MGM Grand Australia and until January 2004, the Company owned and operated the Golden Nugget Las Vegas in downtown Las Vegas and the Golden Nugget Laughlin in Laughlin, Nevada. Until June 2003, the Company operated PLAYMGMMIRAGE.com, the Company’s online gaming website based in the Isle of Man. See Note 4 for further information regarding these discontinued operations.

     Until 2005, the Company held an indirect interest in Triangle Casino in Bristol through its 25% ownership of Metro Casinos Limited, a United Kingdom gaming company. Metro Casinos Limited sold the Triangle Casino in 2005.

54

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

     Principles of consolidation. The consolidated financial statements include the accounts of the Company and its subsidiaries. Investments in unconsolidated affiliates which are 50% or less owned are accounted for under the equity method. All significant intercompany balances and transactions have been eliminated in consolidation. The Company’s operations are primarily in one segment – operation of casino resorts. Other operations, and foreign operations, are not material.

     Management’s use of estimates. The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America. Those principles require the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

     Financial statement impact of Hurricane Katrina. The Company maintains insurance covering both property damage and business interruption as a result of wind and flood damage sustained at Beau Rivage. The deductible under this coverage is approximately $15 million, based on the amount of damage incurred. Based on current estimates, insurance proceeds are expected to exceed the net book value of damaged assets; therefore, the Company will not record an impairment charge related to the storm and upon ultimate settlement of the claim will likely record a gain. Damaged assets with a net book value of $121 million have been written off, and a corresponding insurance receivable has been recorded.

     Business interruption coverage covers lost profits and other costs incurred during the closure period and up to six months following the reopening of the facility. Expected costs during the interruption period are less than the anticipated business interruption proceeds; therefore, post-storm costs of $50 million through December 31, 2005 were offset by the expected recoveries and a corresponding insurance receivable was recorded. Post-storm costs and expected recoveries are recorded net with “General and administrative” expenses in the accompanying consolidated statements of income, except for depreciation of non-damaged assets, which is classified as “Depreciation and amortization.”

     The insurance receivable is recorded within “Deposits and other assets, net” in the accompanying consolidated balance sheets. Through December 31, 2005, the Company received $46 million from its insurers, leaving a net receivable of $125 million at December 31, 2005.

     Cash and cash equivalents. Cash and cash equivalents include investments and interest bearing instruments with maturities of three months or less at the date of acquisition. Such investments are carried at cost which approximates market value. Book overdraft balances resulting from the Company’s cash management program are recorded as accounts payable.

     Accounts receivable and credit risk. Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of casino accounts receivable. The Company issues markers to approved casino customers following background checks and investigations of creditworthiness. At December 31, 2005, a substantial portion of the Company’s receivables were due from customers residing in foreign countries. Business or economic conditions or other significant events in these countries could affect the collectibility of such receivables.

     Trade receivables, including casino and hotel receivables, are typically non-interest bearing and are initially recorded at cost. Accounts are written off when management deems the account to be uncollectible. Recoveries of accounts previously written off are recorded when received. An estimated allowance for doubtful accounts is maintained to reduce the Company’s receivables to their carrying amount, which approximates fair value. The allowance is estimated based on specific review of customer accounts as well as historical collection experience and current economic and business conditions. Management believes that as of December 31, 2005, no significant concentrations of credit risk existed for which an allowance had not already been recorded.

     Inventories. Inventories consist of food and beverage, retail merchandise and operating supplies, and are stated at the lower of cost or market. Cost is determined primarily by the average cost method for food and beverage and supplies and the retail inventory or specific identification methods for retail merchandise.

     Property and equipment. Property and equipment are stated at cost. Gains or losses on dispositions of property and equipment are included in the determination of income. Maintenance costs are expensed as incurred. Property and equipment are generally depreciated over the following estimated useful lives on a straight-line basis:

Buildings and improvements	30 to 45 years
Land improvements	10 to 20 years
Furniture and fixtures	3 to 10 years
Equipment	3 to 20 years

55

     We evaluate our property and equipment and other long-lived assets for impairment in accordance with the Financial Accounting Standards Board’s Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” For assets to be disposed of, we recognize the asset to be sold at the lower of carrying value or fair value less costs of disposal. Fair value for assets to be disposed of is estimated based on comparable asset sales, offers received, or a discounted cash flow model.

     For assets to be held and used, we review fixed assets for impairment whenever indicators of impairment exist. If an indicator of impairment exists, we compare the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then an impairment is measured based on fair value compared to carrying value, with fair value typically based on a discounted cash flow model. If an asset is still under development, future cash flows include remaining construction costs. For a discussion of recognized impairment losses, see Note 16.

     Capitalized interest. The interest cost associated with major development and construction projects is capitalized and included in the cost of the project. When no debt is incurred specifically for a project, interest is capitalized on amounts expended on the project using the weighted-average cost of the Company’s outstanding borrowings. Capitalization of interest ceases when the project is substantially complete or development activity is suspended for more than a brief period.

     Goodwill and other intangible assets. Goodwill represents the excess of purchase price over fair market value of net assets acquired in business combinations. Goodwill and indefinite-lived intangible assets must be reviewed for impairment at least annually and between annual test dates in certain circumstances. The Company performs its annual impairment test for goodwill and indefinite-lived intangible assets in the fourth quarter of each fiscal year. No impairments were indicated as a result of the annual impairment reviews for goodwill and indefinite-lived intangible assets in 2005, 2004 or 2003.

     Revenue recognition and promotional allowances. Casino revenue is the aggregate net difference between gaming wins and losses, with liabilities recognized for funds deposited by customers before gaming play occurs (“casino front money”) and for chips in the customers’ possession (“outstanding chip liability”). Hotel, food and beverage, entertainment and other operating revenues are recognized as services are performed. Advance deposits on rooms and advance ticket sales are recorded as accrued liabilities until services are provided to the customer.

     Gaming revenues are recognized net of certain sales incentives, including discounts and points earned in point-loyalty programs. The retail value of accommodations, food and beverage, and other services furnished to guests without charge is included in gross revenue and then deducted as promotional allowances. The estimated cost of providing such promotional allowances is primarily included in casino expenses as follows:

	Year Ended December 31,
	2005		2004		2003
			(In thousands)
Rooms	$	82,009	$	63,652	$	64,103
Food and beverage		255,201		191,695		178,399
Other		35,242		25,213		21,560
	$	372,452	$	280,560	$	264,062

     Advertising. The Company expenses advertising costs the first time the advertising takes place. Advertising expense, which is generally included in general and administrative expenses, was $99 million, $57 million and $54 million for 2005, 2004 and 2003, respectively.

     Corporate expense. Corporate expense represents unallocated payroll and aircraft costs, professional fees and various other expenses not directly related to the Company’s casino resort operations. In addition, corporate expense includes the costs associated with the Company’s evaluation and pursuit of new business opportunities, which are expensed as incurred until development of a specific project has become probable.

     Preopening and start-up expenses. The Company accounts for costs incurred during the preopening and start-up phases of operations in accordance with Statement of Position 98-5, “Reporting on the Costs of Start-up Activities.” Preopening and start-up costs, including organizational costs, are expensed as incurred. Costs classified as preopening and start-up expenses include payroll, outside services, advertising, and other expenses related to new or start-up operations and new customer initiatives.

56

     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:

	Year Ended December 31,
	2005		2004		2003
			(In thousands)
Weighted-average common shares outstanding used in the calculation of basic earnings per share		284,943		279,325		297,861
Potential dilution from stock options and restricted stock		11,391		10,008		5,323
Weighted-average common and common equivalent shares used in the calculation of diluted earnings per share		296,334		289,333		303,184

     Stock-based compensation. The Company has accounted 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,” and has disclosed supplemental information in accordance with 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 has not incurred compensation expense for employee stock options when the exercise price is at least 100% of the market value of the Company’s common stock on the date of grant. For disclosure purposes, employee stock options have been measured at fair value using the Black-Scholes option-pricing model and compensation has been assumed to be amortized over the vesting periods of the options.

     In December 2004, the Financial Accounting Standards Board issued SFAS 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) was effective for the Company on January 1, 2006, and all future share-based payments must be recorded at fair value.

     The Company has adopted nonqualified stock option plans and incentive stock option plans which provide for the granting of stock options to eligible directors, officers and employees. The plans are administered by the Compensation and Stock Option Committee of the Board of Directors. Salaried officers, directors and other key employees of the Company and its subsidiaries are eligible to receive options. The exercise price in each instance is 100% of the fair market value of the Company’s common stock on the date of grant. The options have either 7-year or 10-year terms and in most cases are exercisable in either four or five equal annual installments.

     As of December 31, 2005, the aggregate number of stock options available for grant was 6.5 million. A summary of the status of the Company’s stock option plans is presented below:

	2005					2004					2003
				Weighted					Weighted					Weighted
				Average					Average					Average
	Shares			Exercise		Shares			Exercise		Shares			Exercise
	(000’s)			Price		(000’s)			Price		(000’s)			Price
Outstanding at beginning of year		30,728		$	14.16		41,735		$	13.69		28,646		$	13.59
Granted		14,625			35.26		551			22.93		17,382			13.05
Exercised		(10,115	)		14.43		(10,612	)		12.79		(3,750	)		9.67
Terminated		(631	)		22.28		(946	)		13.85		(543	)		16.39
Outstanding at end of year		34,607			22.85		30,728			14.16		41,735			13.68
Exercisable at end of year		9,291			14.33		14,979			14.50		17,671			13.50

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     The following table summarizes information about stock options outstanding at December 31, 2005:

	Options Outstanding						Options Exercisable
			Weighted
			Average		Weighted				Weighted
	Number		Remaining		Average		Number		Average
	Outstanding		Contractual		Exercise		Exercisable		Exercise
Range of Exercise Prices	(000’s)		Life (Years)		Price		(000’s)		Price
$5.49 - $6.66		826		2.5	$	6.65		826	$	6.65
$8.30 - $12.35		732		3.6		11.32		732		11.32
$12.58 - $18.87		18,111		6.8		14.20		7,596		15.31
$20.08 - $27.22		578		8.0		22.89		137		22.03
$34.05 - $45.64		14,360		6.7		35.27		—		—
		34,607		6.6		22.85		9,291		14.33

     Had the Company accounted for these plans under the fair value method allowed by SFAS 123, the Company’s net income and earnings per share would have been reduced to recognize the fair value of employee stock options. The following are required disclosures under SFAS 123 and SFAS 148:

	Year Ended December 31,
	2005			2004			2003
	(In thousands, except per share amounts)
Net income
As reported	$	443,256		$	412,332		$	243,697
Stock-based compensation under SFAS 123		(47,934	)		(22,963	)		(43,310	)
Pro forma	$	395,322		$	389,369		$	200,387
Basic earnings per share
As reported	$	1.56		$	1.48		$	0.82
Stock-based compensation under SFAS 123		(0.17	)		(0.09	)		(0.15	)
Pro forma	$	1.39		$	1.39		$	0.67
Diluted earnings per share
As reported	$	1.50		$	1.43		$	0.80
Stock-based compensation under SFAS 123		(0.17	)		(0.08	)		(0.14	)
Pro forma	$	1.33		$	1.35		$	0.66
Weighted-average assumptions used in the Black-Scholes model:
Expected volatility		37	%		42	%		42	%
Expected life	4.3 years			5.0 years			5.0 years
Expected dividend yield		0	%		0	%		0	%
Risk-free interest rate		3.8	%		3.4	%		3.2	%
Weighted average fair value of options granted	$	12.73		$	9.55		$	5.32

     Reported net income includes $5 million, net of tax, of amortization of restricted stock and non-employee stock option compensation for each of the years ended December 31, 2005, 2004 and 2003.

     Currency translation. The Company accounts for currency translation in accordance with Statement of Financial Accounting Standards No. 52, “Foreign Currency Translation.” Balance sheet accounts are translated at the exchange rate in effect at each balance sheet date. Income statement accounts are translated at the average rate of exchange prevailing during the period. Translation adjustments resulting from this process are charged or credited to other comprehensive loss.

     Comprehensive income. Comprehensive income includes net income and all other non-stockholder changes in equity, or other comprehensive income. Elements of the Company’s other comprehensive income are reported in the accompanying consolidated statement of stockholders’ equity, and the cumulative balance of these elements consisted of the following:

	At December 31,
	2005			2004
	(In thousands)
Derivative loss from unconsolidated affiliate, net	$	134		$	(1,863	)
Foreign currency translation adjustments		(935	)		696
	$	(801	)	$	(1,167	)

     Reclassifications. The consolidated financial statements for prior years reflect certain reclassifications, which have no effect on previously reported net income, to conform to the current year presentation.

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NOTE 3 — 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 in cash for each share of Mandalay’s common stock. The acquisition expands 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 acquisition cost included (in thousands):

Cash consideration for Mandalay’s outstanding shares and stock options	$	4,831,944
Estimated fair value of Mandalay’s long-term debt		2,849,225
Transaction costs and expenses and other		111,944
		7,793,113
Less: Net proceeds from the sale of MotorCity Casino		(526,597	)
	$	7,266,516

     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 purchase price allocation is preliminary and may be adjusted up to one year after the acquisition. In particular, the Company is still evaluating certain customer relationship intangible assets related to individual and group hotel reservations as well as gaming loyalty program members.

     The following table sets forth the preliminary allocation of purchase price (in thousands):

Current assets (including cash of $134,245)	$	414,326
Property and equipment		7,180,936
Goodwill		1,230,804
Other intangible assets		245,940
Other assets		283,931
Assumed liabilities, excluding long-term debt		(602,338	)
Deferred taxes		(1,487,083	)
	$	7,266,516

     The amount allocated to intangible assets includes 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.

	Year Ended December 31,
	2005		2004
	(In thousands, except per share amounts)
Net revenues	$	7,384,626	$	6,903,004
Operating income		1,519,500		1,423,324
Income from continuing operations		465,087		415,625
Net income		465,087		478,101
Basic earnings per share:
Income from continuing operations	$	1.63	$	1.49
Net income		1.63		1.71
Diluted earnings per share:
Income from continuing operations	$	1.57	$	1.44
Net income		1.57		1.65

NOTE 4 — DISCONTINUED OPERATIONS

     In June 2003, the Company ceased operations of PLAYMGMMIRAGE.com, its online gaming website (“Online”). 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 owned and operated MGM Grand Australia with net proceeds to the Company of $136 million.

59

     The results of the Golden Nugget Subsidiaries, Online and MGM Grand Australia are classified as discontinued operations in the accompanying consolidated statements of income for all periods presented. Net revenues of discontinued operations were $45 million and $231 million, respectively, for the years ended December 31, 2004 and 2003. Included in income from discontinued operations is an allocation of interest expense based on the ratio of the net assets of the discontinued operations to the total consolidated net assets and debt of the Company. Interest allocated to discontinued operations was $2 million and $9 million for the years ended December 31, 2004 and 2003, respectively. Included in discontinued operations for the year ended December 31, 2003 is a loss on disposal of Online of $7 million relating primarily to unrecoverable costs of computer hardware and software. Included in the tax benefit from discontinued operations for the year ended December 31, 2003 is $2 million of previously unrecognized tax benefits relating to prior year operating losses of Online. Included in discontinued operations for the year ended December 31, 2004 is a gain on the sale of the Golden Nugget Subsidiaries of $8 million and a gain on sale of MGM Grand Australia of $74 million.

NOTE 5 — ACCOUNTS RECEIVABLE, NET

     Accounts receivable consisted of the following:

	At December 31,
	2005			2004
	(In thousands)
Casino	$	221,873		$	174,713
Hotel		173,049			61,084
Other		35,021			28,114
		429,943			263,911
Less: Allowance for doubtful accounts		(77,270	)		(59,760	)
	$	352,673		$	204,151

NOTE 6 — PROPERTY AND EQUIPMENT, NET

     Property and equipment consisted of the following:

	At December 31,
	2005			2004
	(In thousands)
Land	$	8,018,301		$	4,089,106
Buildings, building improvements and land improvements		7,595,257			4,228,138
Furniture, fixtures and equipment		2,695,746			2,235,766
Construction in progress		607,447			299,148
		18,916,751			10,852,158
Less: Accumulated depreciation and amortization		(2,375,100	)		(1,938,016	)
	$	16,541,651		$	8,914,142

NOTE 7 — INVESTMENTS IN UNCONSOLIDATED AFFILIATES

     The Company has investments in unconsolidated affiliates accounted for under the equity method. Under the equity method, carrying value is adjusted for the Company’s share of the investees’ earnings and losses, as well as capital contributions to and distributions from these companies. Investments in unconsolidated affiliates consisted of the following:

	At December 31,
	2005			2004
	(In thousands)
Marina District Development Company — Borgata (50%)	$	461,211		$	405,322
Elgin Riverboat Resort-Riverboat Casino-Grand Victoria (50%)		241,279			—
MGM Grand Paradise Limited – Macau (50%)		187,568			3,002
Circus and Eldorado Joint Venture – Silver Legacy (50%)		26,492			—
Victoria Partners – Monte Carlo (50% in 2004)		—			424,683
Other		14,604			9,633
		931,154			842,640
Turnberry/MGM Grand Towers — The Signature at MGM Grand (50%)		(7,400	)		(3,231	)
	$	923,754		$	839,409

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     The negative investment balances in The Signature at MGM Grand, which represents cumulative losses of the venture, are classified as “Other long-term liabilities” in the accompanying consolidated balance sheets along with deferred income of $16 million related to the excess of equity credit over carrying value of land the Company contributed to the venture. The income will be recognized when the venture recognizes the profits on the sale of each tower’s units.

     Differences between the Company’s venture-level equity and investment balances are as follows:

	At December 31,
	2005		2004
	(In thousands)
Venture-level equity	$	603,015	$	419,035
Fair value adjustments		264,814		361,102
Capitalized interest		52,689		45,099
Other adjustments		3,236		14,173
	$	923,754	$	839,409

     The fair value adjustments at December 31, 2005 include $90 million related to Borgata, which was assigned to land, $210 million related to Grand Victoria, which has been assigned to goodwill on a preliminary basis, and a $35 million credit related to Silver Legacy, which was assigned to long-term assets and long-term debt and is being amortized accordingly. The amount related to Grand Victoria is subject to adjustment as the Mandalay purchase price allocation is preliminary. See Note 3 for further information. At December 31, 2004, fair value adjustments included the amount related to Borgata and an amount related to Monte Carlo which was assigned to land. Amounts related to capitalized interest are amortized over the life of the related building.

     The Company recorded its share of the results of operations of the unconsolidated affiliates as follows:

	Year Ended December 31,
	2005			2004			2003
	(In thousands)
Income from unconsolidated affiliates	$	151,871		$	119,658		$	53,612
Preopening and start-up expenses		(1,914	)		—			(19,326	)
Non-operating items from unconsolidated affiliates		(15,825	)		(12,298	)		(10,401	)
	$	134,132		$	107,360		$	23,885

     Summarized balance sheet information of the unconsolidated affiliates is as follows:

	At December 31,
	2005		2004
	(In thousands)
Current assets	$	220,708	$	129,009
Property and other assets, net		2,008,912		1,392,436
Current liabilities		213,135		106,111
Long-term debt and other liabilities		871,173		530,458
Equity		1,145,312		884,876

     Summarized results of operations of the unconsolidated affiliates are as follows:

	Year Ended December 31,
	2005			2004			2003
	(In thousands)
Net revenues	$	1,243,465		$	966,642		$	551,669
Operating expenses, except preopening expenses		(938,972	)		(721,998	)		(441,526	)
Preopening and start-up expenses		(3,829	)		—			(39,186	)
Operating income		300,664			244,644			70,957
Interest expense		(35,034	)		(34,698	)		(21,700	)
Other non-operating income (expense)		1,435			9,789			4,297
Net income	$	267,065		$	219,735		$	53,554

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NOTE 8 — GOODWILL AND OTHER INTANGIBLE ASSETS

     Goodwill and other intangible assets consisted of the following:

	At December 31,
	2005		2004
	(In thousands)
Goodwill:
Mandalay acquisition (2005)	$	1,230,804	$	—
Mirage Resorts acquisition (2000)		76,342		76,342
Other		7,415		7,415
		1,314,561		83,757
Indefinite-lived intangible assets:
Detroit development rights		100,056		115,056
Trademarks, license rights and other		251,754		17,554
		351,810		132,610
Other intangible assets, net		25,669		16,968
	$	1,692,040	$	233,335

     Goodwill related to the Mandalay acquisition was primarily assigned to Mandalay Bay, Luxor, Excalibur and Gold Strike Tunica. Goodwill related to the Mirage Resorts acquisition was assigned to Bellagio, The Mirage and TI. Other goodwill relates to the Company’s 2003 acquisition of majority interests in the entities that operate the nightclubs Light and Caramel, located in Bellagio, and Mist, located in TI. Changes in the recorded balances of goodwill are as follows:

	Year Ended December 31,
	2005		2004
	(In thousands)
Balance, beginning of period	$	83,757	$	118,434
Goodwill acquired during the period		1,230,804		—
Currency translation adjustment		—		(992	)
Goodwill assigned to discontinued operations		—		(33,267	)
Other		—		(418	)
Balance, end of the period	$	1,314,561	$	83,757

     The Company’s indefinite-lived intangible assets consist primarily of development rights in Detroit and trademarks. The Company’s finite–lived intangible assets consist primarily of customer lists amortized over five years, lease acquisition costs amortized over the life of the related leases, and certain license rights amortized over their contractual life.

NOTE 9 — OTHER ACCRUED LIABILITIES

     Other accrued liabilities consisted of the following:

	At December 31,
	2005		2004
	(In thousands)
Payroll and related	$	297,946	$	162,943
Advance deposits and ticket sales		120,830		65,810
Casino outstanding chip liability		100,621		85,086
Casino front money deposits		71,768		67,621
Other gaming related accruals		78,921		50,186
Taxes, other than income taxes		68,632		47,311
Other		174,802		128,968
	$	913,520	$	607,925

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NOTE 10 — LONG-TERM DEBT

     Long-term debt consisted of the following:

	At December 31,
	2005			2004
	(In thousands)
Senior credit facility	$	4,775,000		$	50,000
$300 million 6.95% senior notes, repaid at maturity in 2005		—			300,087
$176.4 million 6.625% senior notes, repaid at maturity in 2005		—			176,096
$200 million 6.45% senior notes, repaid at maturity in February 2006		200,223			—
$244.5 million 7.25% senior notes, due 2006, net		240,353			235,511
$710 million 9.75% senior subordinated notes, due 2007, net		708,223			706,968
$200 million 6.75% senior notes, due 2007, net		192,977			189,115
$492.2 million 10.25% senior subordinated notes, due 2007, net		527,879			—
$180.4 million 6.75% senior notes, due 2008, net		172,238			168,908
$196.2 million 9.5% senior notes, due 2008, net		212,895			—
$200 million 6.875% senior notes, redeemed in 2005		—			199,095
$226.3 million 6.5% senior notes, due 2009, net		228,518			—
$1.05 billion 6% senior notes, due 2009, net		1,055,232			1,056,453
$297.6 million 9.375% senior subordinated notes, due 2010, net		325,332			—
$825 million 8.5% senior notes, due 2010, net		822,705			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		133,725			—
$550 million 6.75% senior notes, due 2012		550,000			550,000
$150 million 7.625% senior subordinated debentures, due 2013, net		155,978			—
$525 million 5.875% senior notes, due 2014, net		522,604			522,301
$875 million 6.625% senior notes, due 2015, net		879,989			—
$100 million 7.25% senior debentures, due 2017, net		82,699			81,919
Floating rate convertible senior debentures due 2033		8,472			—
$150 million 7% debentures due 2036, net		155,961			—
$4.3 million 6.7% debentures, due 2096		4,265			—
Other notes		179			195
		12,355,447			5,458,862
Less: Current portion		(14	)		(14	)
	$	12,355,433		$	5,458,848

     Total interest incurred during 2005, 2004 and 2003 was $686 million, $401 million and $353 million, respectively, of which $30 million, $23 million and $15 million, respectively, was capitalized.

     At December 31, 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. The current senior credit facility was made available upon the closing of the Mandalay merger, and replaced the Company’s previous $2.5 billion senior credit facility.

     Interest on the senior credit facility is based on the bank reference rate or Eurodollar rate. The Company’s borrowing rate on the senior credit facility was approximately 5.3% at December 31, 2005 and 3.3% at December 31, 2004. Stand-by letters of credit totaling $53 million were outstanding as of December 31, 2005, thereby reducing the availability under the senior credit facility. At December 31, 2005, the Company had approximately $2.2 billion of available borrowings under the senior credit facility.

     In June 2005, the Company issued $500 million of 6.625% senior notes due 2015 and in September 2005, the Company issued an additional $375 million of 6.625% senior notes due 2015. In 2004, the Company issued $525 million of 5.875% senior notes due 2014, $550 million of 6.75% senior notes due 2012, and $450 million of 6% senior notes due 2009. The proceeds of the above offerings were used to reduce outstanding borrowings under the Company’s senior credit facility.

63

     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 statements of income. Holders of Mandalay’s floating rate convertible senior debentures with a principal amount of $394 million had the right to redeem the debentures for $566 million through June 30, 2005. $388 million of principal of the convertible senior debentures were tendered for redemption and redeemed for $558 million.

     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 statements 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.

     In August 2003, the Company’s Board of Directors authorized the repurchase of up to $100 million of the Company’s public debt securities. Subsequently, the Company repurchased $25 million of its senior notes and recorded a loss on early retirement of debt of $3 million related to repurchase premiums and unamortized debt issue costs. In 2004, the Company repurchased an additional $49 million of its senior notes for $52 million. This resulted in a loss on early retirement of debt of $6 million related to repurchase premiums and unamortized debt issuance costs. The losses in both periods are classified as “Other, net” in the accompanying consolidated statements of income. In December 2004, the Company’s Board of Directors renewed its authorization for up to $100 million of additional debt securities.

     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 also utilized interest rate swap agreements to manage this risk. At December 31, 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 and each of its material subsidiaries, excluding MGM Grand Detroit, LLC and the Company’s foreign subsidiaries, are directly liable for or unconditionally guarantee the senior credit facility, senior notes, senior debentures, and senior subordinated notes. MGM Grand Detroit, LLC is a guarantor under the senior credit facility, but only to the extent that the proceeds of borrowings under such facilities are made available to MGM Grand Detroit, LLC. See Note 18 for consolidating condensed financial information of the subsidiary guarantors and non-guarantors.

     The Company’s long-term debt obligations contain customary covenants requiring the Company to maintain certain financial ratios. At December 31, 2005, the Company was required to maintain a maximum leverage ratio (debt to EBITDA, as defined) of 7.25:1 and a maximum senior leverage ratio of 5.75:1. Also at December 31, 2005, the Company was required to maintain a minimum coverage ratio (EBITDA to interest charges, as defined) of 2.0:1. As of December 31, 2005, the Company’s leverage, senior leverage and interest coverage ratios were 5.4:1, 4.5:1 and 2.9:1, respectively.

     Maturities of the Company’s long-term debt as of December 31, 2005 are as follows:

	(In thousands)
Years ending December 31,
2006	$	444,526
2007		1,402,260
2008		376,649
2009		1,276,358
2010		5,897,584
Thereafter		2,892,571
		12,289,948
Debt premiums		63,315
Swap deferred gain		2,184
	$	12,355,447

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     Amounts due in 2006 that were refinanced, or are intended to be refinanced, through available capacity under the Company’s senior credit facility have been excluded from current liabilities in the accompanying consolidated balance sheet.

     The estimated fair value of the Company’s long-term debt at December 31, 2005 was approximately $12.5 billion, versus its book value of $12.4 billion. At December 31, 2004, the estimated fair value of the Company’s long-term debt was approximately $5.9 billion, versus its book value of $5.5 billion. The estimated fair value of the Company’s public debt securities was based on quoted market prices on or about December 31, 2005 and 2004. The estimated fair value of the Company’s senior credit facility was assumed to approximate book value due to the short-term nature of the borrowings.

NOTE 11 — INCOME TAXES

     The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (“SFAS 109”). SFAS 109 requires the recognition of deferred income tax assets, net of applicable reserves, related to net operating loss carryforwards and certain temporary differences. The standard requires recognition of a future tax benefit to the extent that realization of such benefit is more likely than not. Otherwise, a valuation allowance is applied.

     The income tax provision attributable to continuing operations and discontinued operations is as follows:

	Year Ended December 31,
	2005		2004		2003
	(In thousands)
Continuing operations	$	235,644	$	205,959	$	113,387
Discontinued operations		—		31,731		2,651
	$	235,644	$	237,690	$	116,038

     The income tax provision attributable to income from continuing operations before income taxes is as follows:

	Year Ended December 31,
	2005			2004			2003
	(In thousands)
Current—federal	$	224,850		$	200,419		$	68,760
Deferred—federal		2,140			(9,155	)		40,142
Provision for federal income taxes		226,990			191,264			108,902
Current—state		5,252			2,851			5,167
Deferred—state		6,811			11,420			(682	)
Provision for state income taxes		12,063			14,271			4,485
Current—foreign		(2,979	)		424			—
Deferred—foreign		(430	)		—			—
Provision for foreign income taxes		(3,409	)		424			—
	$	235,644		$	205,959		$	113,387

     A reconciliation of the federal income tax statutory rate and the Company’s effective tax rate is as follows:

	Year Ended December 31,
	2005			2004			2003
Federal income tax statutory rate		35.0	%		35.0	%		35.0	%
State income tax (net of federal benefit)		1.2			1.7			0.8
Reversal of reserves for prior tax years		—			(1.0	)		(3.9	)
Foreign earnings repatriation – benefit of American Job Creation Act of 2004		(1.5	)		—			—
Tax credits		(1.2	)		(0.6	)		(0.8	)
Permanent and other items, net		1.2			2.0			1.9
		34.7	%		37.1	%		33.0	%

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     The major tax effected components of the Company’s net deferred tax liability are as follows:

	At December 31,
	2005			2004
	(In thousands)
Deferred tax assets—federal and state
Bad debt reserve	$	32,490		$	25,168
Deferred compensation		31,230			25,131
Net operating loss carryforward		7,253			8,569
Preopening and start-up costs		3,801			4,305
Accruals, reserves and other		35,675			37,152
Investments in unconsolidated affiliates		265			(130,059	)
Long-term debt		20,902			(18,548	)
		131,616			(48,282	)
Less: Valuation allowance		(5,734	)		(5,608	)
		125,882			(53,890	)
Deferred tax liabilities—federal and state
Property and equipment		(3,350,365	)		(1,710,006	)
Intangibles		(88,800	)		1,966
Unremitted earnings of foreign subsidiary		—			(11,150	)
		(3,439,165	)		(1,719,190	)
Deferred taxes—foreign		2,027			1,660
Less: Valuation allowance		(1,597	)		(1,660	)
		430			—
Net deferred tax liability	$	(3,312,853	)	$	(1,773,080	)

     For U.S. federal income tax return purposes, the Company has a net operating loss carryforward of $2 million, which will begin to expire in 2012. For state income tax purposes, the Company has a New Jersey net operating loss carryforward of $112 million, which equates to a deferred tax asset of $7 million, after federal tax effect, and before valuation allowance. The New Jersey net operating loss carryforwards began to expire in 2005.

     At December 31, 2005, there is a $6 million valuation allowance provided on certain New Jersey state net operating loss carryforwards and other New Jersey state deferred tax assets and a $2 million valuation allowance related to certain foreign deferred tax assets because management believes these assets do not meet the “more likely than not” criteria for recognition under SFAS 109. Management believes all other deferred tax assets are more likely than not to be realized because of the future reversal of existing taxable temporary differences and expected future taxable income. Accordingly, there are no other valuation allowances provided at December 31, 2005.

     As anticipated, the United States Treasury issued guidance during 2005 that clarified provisions of the American Job Creation Act of 2004 (the “Act”) that provide for a special one-time deduction of 85 percent on certain repatriated earnings of foreign subsidiaries. This guidance clarified for the Company that the planned repatriation of the net proceeds of its Australia operations would qualify for the one-time deduction. Consequently, the Company repatriated the net proceeds during 2005 and secured the benefits of the deduction. Since the Company provided deferred taxes in 2004 on the basis that the net proceeds would be repatriated without the benefit of the one-time deduction, a tax benefit of $10 million was recorded in 2005 to reflect the benefit of the Act. The Company considered the earnings of its Australia operations permanently reinvested prior to the sale of such operations in 2004.

NOTE 12 — COMMITMENTS AND CONTINGENCIES

     Leases. The Company leases real estate and various equipment under operating and, to a lesser extent, capital lease arrangements. Certain real estate leases provide for escalation of rent based upon a specified price index and/or based upon periodic appraisals.

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     At December 31, 2005, the Company was obligated under non-cancelable operating leases and capital leases to make future minimum lease payments as follows:

	Operating		Capital
	Leases		Leases
	(In thousands)
Years ending December 31,
2006	$	13,462	$	1,979
2007		11,370		1,448
2008		9,447		512
2009		8,728		126
2010		8,263		—
Thereafter		337,989		—
Total minimum lease payments	$	389,259		4,065
Less: Amounts representing interest				(683	)
Total obligations under capital leases				3,382
Less: Amounts due within one year				(1,584	)
Amounts due after one year			$	1,798

     The current and long-term obligations under capital leases are included in “Other accrued liabilities” and “Other long-term obligations,” respectively, in the accompanying consolidated balance sheets. Rental expense for operating leases was $23 million, $19 million and $19 million for the years ended December 31, 2005, 2004 and 2003, respectively.

     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 December 31, 2005. In addition to the above obligations, the Company will pay the City of Detroit 2% of gaming revenues (1% if annual revenues do not 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 6^th 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 and the current status of the other litigation to which the indemnification relates, the Company determined that the necessary accrual for the indemnification to the City was $2.5 million, and recorded a reduction in accrued liabilities and a corresponding reduction in the development rights intangible asset.

     The Company has acquired the land and begun construction on the permanent casino facility. The permanent facility is expected to open in late 2007 at a cost of $765 million, including land and preopening costs, and will feature a 400-room hotel, 100,000-square foot casino, numerous restaurant and entertainment amenities, and spa and convention facilities. The complete design, timing and cost of the permanent facility are at a preliminary stage, and are subject to risks attendant to large-scale projects.

     Macau. In connection with its investment in MGM Grand Paradise Limited, the Company has committed to loan the entity up to $100 million, which will be accounted for as an additional element of the Company’s investment in the venture.

     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 NYRA franchise agreement.

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     United Kingdom. In November 2003, the Company entered into an agreement with Newcastle United PLC to create a 50-50 joint venture, which would build a major new mixed-use development, including a regional casino, on a site adjacent to Newcastle United’s football stadium. The Company made an equity investment of £5 million ($8.6 million based on exchange rates at December 31, 2005). The agreement is cancelable, and the equity investment is refundable, if certain conditions are not met within specified time frames, including obtaining a regional casino license and regulatory approvals, and the implementation of an acceptable tax regime.

     The Company had an agreement with the Earls Court and Olympia Group, which operates large trade show facilities in London, to develop an entertainment and gaming facility. In 2005, the agreement was terminated and the Company received a refund of its £1.75 million deposit ($3.2 million).

     The Signature at MGM Grand. In 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. The remaining 50% of interest and principal obligations is guaranteed by affiliates of the venture’s other member. These affiliates and the Company have also jointly and severally provided a completion guaranty.

     In 2005, the venture obtained construction financing for up to $230 million for the development of Tower 2. The Company has provided a guaranty for up to 50% of the interest and principal obligations on the construction financing, with such guaranty decreasing by 50% relative to the principal when construction is 50% complete. The remaining 50% of interest and principal obligations is guaranteed by affiliates of the venture’s other investor. These affiliates and the Company have also jointly and severally provided a completion guaranty. The Company recorded the value of its guaranty obligations for Towers 1 and 2, approximately $3 million, in “Other long-term liabilities” in the accompanying consolidated balance sheets.

     Other guarantees. The Company is party to various guarantee contracts in the normal course of business, which are generally supported by letters of credit issued by financial institutions. The Company’s senior credit facility limits the amount of letters of credit that can be issued to $250 million, and the amount of available borrowings under the senior credit facility is reduced by any outstanding letters of credit. At December 31, 2005, the Company had provided a $50 million letter of credit to support the Economic Development Corporation of the City of Detroit bonds referred to above, which are a liability of the Company.

     Litigation. The Company is a party to various legal proceedings, most of which relate to routine matters incidental to its business. Management does not believe that the outcome of such proceedings will have a material adverse effect on the Company’s financial position or results of operations.

NOTE 13 — STOCKHOLDERS’ EQUITY

     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.

     Stock repurchases. Share repurchases are only conducted under repurchase programs approved by the Board of Directors and publicly announced. Share repurchase activity was as follows:

	Year Ended December 31,
	2005		2004		2003
	(In thousands)
August 2001 authorization (2.8 million shares purchased)	$	—	$	—	$	36,034
February 2003 authorization (20 million shares purchased)		—		—		335,911
November 2003 authorization (16 million and 4 million shares purchased)		—		348,895		70,919
July 2004 authorization (5.5 million shares purchased)		217,316		—		—
	$	217,316	$	348,895	$	442,864
Average price of shares repurchased	$	39.51	$	21.80	$	16.59

     At December 31, 2005, we had 14.5 million shares available for repurchase under the July 2004 authorization.

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     Restricted stock. In May 2002, the Board of Directors approved a restricted stock plan. The plan allowed for the issuance of up to 2 million shares of Company common stock to certain key employees. The restrictions on selling 50% of these shares lapsed on the third anniversary date from the grant date and the restrictions lapse on the remaining 50% on the fourth anniversary date after the grant date. Through December 31, 2005, 1,806,000 shares were issued, with an aggregate value of $32 million. This amount was recorded as deferred compensation in the accompanying consolidated balance sheets and is being amortized to operating expenses on a straight-line basis through the period in which the restrictions fully lapse. Amortization of deferred compensation was $7 million, $7 million and $8 million for the years ended December 31, 2005, 2004 and 2003, respectively. In November 2002, the Board of Directors determined that no more awards would be granted under the plan.

     Through December 31, 2005, restrictions on 852,000 shares have lapsed and 120,000 shares were cancelled before the restrictions had lapsed, leaving 834,000 restricted shares outstanding, all of which will become unrestricted in 2006. In 2005, certain recipients of restricted shares elected to use a portion of the shares on which restrictions lapsed in 2005 to pay required withholding taxes. Approximately 261,000 shares were surrendered, and became treasury shares, as a result of these elections.

NOTE 14 — EMPLOYEE BENEFIT PLANS

     Employees of the Company who are members of various unions are covered by union-sponsored, collectively bargained, multi-employer health and welfare and defined benefit pension plans. The Company recorded an expense of $161 million in 2005, $86 million in 2004 and $77 million in 2003 under such plans. The plans’ sponsors have not provided sufficient information to permit the Company to determine its share of unfunded vested benefits, if any.

     The Company is self-insured for most health care benefits for its non-union employees. The liability for claims filed and estimates of claims incurred but not reported is included in “Other accrued liabilities” in the accompanying consolidated balance sheets.

     The Company has retirement savings plans under Section 401(k) of the Internal Revenue Code for eligible employees. The plans allow employees to defer, within prescribed limits, up to 30% of their income on a pre-tax basis through contributions to the plans. The Company matches, within prescribed limits, a portion of eligible employees’ contributions. In the case of certain union employees, the Company contributions to the plan are based on hours worked. The Company recorded charges for 401(k) contributions of $19 million in 2005, $12 million in 2004 and $10 million in 2003.

     The Company maintains a nonqualified deferred retirement plan for certain key employees. The plan allows participants to defer, on a pre-tax basis, a portion of their salary and bonus and accumulate tax deferred earnings, plus investment earnings on the deferred balances, as a retirement fund. Participants receive a Company match of up to 4% of salary, net of any Company match received under the Company’s 401(k) plan. All employee deferrals vest immediately. The Company matching contributions vest ratably over a three-year period. The Company recorded charges for matching contributions of $2 million in 2005, $1 million in 2004 and $2 million in 2003.

     The Company implemented a supplemental executive retirement plan (“SERP”) for certain key employees effective January 1, 2001. The SERP is a nonqualified plan under which the Company makes quarterly contributions which are intended to provide a retirement benefit that is a fixed percentage of a participant’s estimated final five-year average annual salary, up to a maximum of 65%. Company contributions and investment earnings on the contributions are tax-deferred and accumulate as a retirement fund. Employees do not make contributions under this plan. A portion of the Company contributions and investment earnings thereon vests after three years of SERP participation and the remaining portion vests after both five years of SERP participation and 10 years of continuous service. The Company recorded expense under this plan of $6 million in 2005, $5 million in 2004 and $5 million in 2003.

     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 was terminated in July 2005 and lump-sum payouts to the plan participants in the aggregate amount of $145 million were made. In purchase accounting, all previously recognized amounts related to the SERP were eliminated and a liability was recorded at the value of the lump-sum payouts as of the date of the merger, approximately $146 million. Related investments intended to fund the Mandalay SERP of $96 million were liquidated in July 2005 and used to fund a portion of the lump-sum payouts.

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NOTE 15 — RESTRUCTURING COSTS

     Restructuring costs (credit) consisted of the following:

	Year Ended December 31,
	2005			2004		2003
	(In thousands)
Contract termination costs	$	—		$	3,693	$	4,049
Siegfried & Roy show closure – The Mirage		—			—		1,623
Other		(59	)		1,932		925
	$	(59	)	$	5,625	$	6,597

     There were no material restructuring activities in 2005. At December 31, 2005, there were no material restructuring accruals. All material restructuring costs have been fully paid or otherwise resolved.

     In 2004, restructuring costs include $3 million for contract termination costs related to the Aqua restaurant at Bellagio and $2 million of workforce reduction costs at MGM Grand Detroit as a result of the Company’s efforts to minimize the impact of a gaming tax increase in Michigan.

     In 2003, restructuring costs included $2 million related to the closure of the Siegfried & Roy show, primarily for severance costs of employees involved in the show’s production. Also, the Company terminated a restaurant lease and closed two marketing offices, resulting in $4 million of contract termination charges. Other severance of $1 million in 2003 related primarily to restructuring of table games staffing at several resorts.

NOTE 16 — PROPERTY TRANSACTIONS, NET

     Property transactions, net consisted of the following:

	Year Ended December 31,
	2005		2004		2003
	(In thousands)
Impairment of assets to be disposed of	$	22,651	$	473	$	7,172
Write-off of abandoned capital projects		5,971		—		—
Demolition costs		5,362		7,057		6,614
Gain on sale of North Las Vegas land		—		—		(36,776	)
Other net losses on asset sales or disposals		2,896		1,135		4,049
	$	36,880	$	8,665	$	(18,941	)

     In 2005, recognized impairments relate primarily to assets removed from service in connection with new capital projects at several resorts, including Bellagio, TI, The Mirage and Mandalay Bay. The amount of the impairments was based on the net book value of the disposed assets. Abandoned projects included individually insignificant projects at several resorts. Demolition costs related primarily to room remodel activity at MGM Grand Las Vegas and the new showroom at The Mirage.

     In 2004, there were no material unusual property transactions. In 2003, the Company sold 315 acres of land in North Las Vegas, Nevada near Shadow Creek for approximately $55 million, which resulted in a pretax gain of approximately $37 million. Also in 2003, the Company recorded write-downs and impairments of assets abandoned or replaced with new construction, primarily at MGM Grand Las Vegas in preparation for new restaurants and the KÀ theatre. Demolition costs in 2004 and 2003 relate primarily to preparation for the Bellagio standard room remodel, Bellagio expansion and the KÀ theatre at MGM Grand Las Vegas.

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NOTE 17 — RELATED PARTY TRANSACTIONS

     The Company’s related party transactions consisted of the following:

	Year Ended December 31,
	2005		2004		2003
	(In thousands)
Revenue from related parties	$	1,081	$	635	$	871
Related party payments:
Professional fees	$	12,757	$	4,084	$	1,551
License payments		—		1,000		1,000
Other		1,866		248		469
	$	14,623	$	5,332	$	3,020
Transactions with unconsolidated affiliates:
Rent payments from Borgata	$	3,620	$	1,208	$	1,060
Net reimbursements from Borgata — Renaissance Pointe costs	$	522	$	575	$	9,969
Rent payments from The Signature at MGM Grand	$	770	$	785	$	—
Rent payments from Silver Legacy	$	40	$	—	$	—
Tram payments to Monte Carlo	$	1,021	$	3,950	$	3,876

     Borgata leases 10 acres from the Company on a long-term basis for use in its current operations and for its expansion. Additionally Borgata leases nine acres from the Company on a short-term basis for surface parking. The net reimbursements from Borgata are related to Borgata’s responsibility for a portion of the master plan improvements at Renaissance Pointe and the Company’s responsibility for environmental cleanup costs incurred by Borgata. The rent payments from The Signature of MGM Grand are for the sales office, which is located inside MGM Grand Las Vegas. The tram payments to Monte Carlo were compensation for lost business as a result of closing the tram between Bellagio and Monte Carlo in preparation for the Bellagio expansion.

     Primarily all of the professional fees paid to related parties were for legal fees to a firm affiliated with the Company’s general counsel and a former director of the Company. At December 31, 2005, the Company owed the firm $3.1 million.

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NOTE 18 — 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, and the senior and senior subordinated notes of the Company and its subsidiaries. Separate condensed financial statement information for the subsidiary guarantors and non-guarantors as of December 31, 2005 and 2004 and for the years ended December 31, 2005, 2004 and 2003 is as follows:

	As of and for the Year Ended December 31, 2005
				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Elimination			Consolidated
	(In thousands)
Balance Sheet
Current assets	$	89,153		$	885,991		$	43,439		$	—		$	1,018,583
Property and equipment, net		7,113			16,373,113			173,397			(11,972	)		16,541,651
Investments in subsidiaries		14,569,623			183,208			—			(14,752,831	)		—
Investments in unconsolidated affiliates		127,902			904,138			241,279			(342,165	)		931,154
Other non-current assets		86,011			2,018,809			103,212			—			2,208,032
	$	14,879,802		$	20,365,259		$	561,327		$	(15,106,968	)	$	20,699,420
Current liabilities	$	345,195		$	1,148,306		$	41,067		$	—		$	1,534,568
Intercompany accounts		(1,794,833	)		1,726,415			68,418			—			—
Deferred income taxes		3,378,371			—			—			—			3,378,371
Long-term debt		9,713,754			2,641,679			—			—			12,355,433
Other non-current liabilities		2,243			143,733			50,000			—			195,976
Stockholders’ equity		3,235,072			14,705,126			401,842			(15,106,968	)		3,235,072
	$	14,879,802		$	20,365,259		$	561,327		$	(15,106,968	)	$	20,699,420
Statement of Income
Net revenues	$	—		$	6,040,874		$	441,093		$	—		$	6,481,967
Equity in subsidiaries earnings		1,237,919			152,107			—			(1,390,026	)		—
Expenses:
Casino and hotel operations		—			3,313,176			233,883			—			3,547,059
General and administrative		—			902,623			55,640			—			958,263
Corporate expense		13,797			116,836			—			—			130,633
Preopening and start-up expenses		—			15,249			503			—			15,752
Restructuring costs (credit)		—			(59	)		—			—			(59	)
Property transactions, net		—			36,446			434			—			36,880
Depreciation and amortization		2,390			559,062			26,650			—			588,102
		16,187			4,943,333			317,110			—			5,276,630
Income from unconsolidated affiliates		—			120,330			31,541			—			151,871
Operating income		1,221,732			1,369,978			155,524			(1,390,026	)		1,357,208
Interest expense, net		(532,884	)		(112,567	)		1,402			—			(644,049	)
Other, net		(14,293	)		(20,005	)		39			—			(34,259	)
Income before income taxes		674,555			1,237,406			156,965			(1,390,026	)		678,900
Provision for income taxes		(231,299	)		—			(4,345	)		—			(235,644	)
Net income	$	443,256		$	1,237,406		$	152,620		$	(1,390,026	)	$	443,256
Statement of Cash Flows
Net cash provided by (used in) operating activities	$	(449,590	)	$	1,471,372		$	161,014		$	—		$	1,182,796
Net cash provided by (used in) investing activities		(4,587,820	)		(618,007	)		(93,687	)		(3,303	)		(5,302,817	)
Net cash provided by (used in) financing activities		5,043,152			(732,145	)		(251,484	)		3,303			4,062,826

72

	As of and for the Year Ended December 31, 2004
				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Elimination			Consolidated
	(In thousands)
Balance Sheet
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
Statement of Income
Net revenues	$	—		$	3,816,162		$	421,942		$	—		$	4,238,104
Equity in subsidiaries earnings		955,995			117,686						(1,073,681	)		—
Expenses:
Casino and hotel operations		—			2,077,863			211,386			—			2,289,249
General and administrative		—			552,907			59,725			—			612,632
Corporate expense		11,988			65,922			—			—			77,910
Preopening and start-up expenses		129			10,147			—			—			10,276
Restructuring costs		—			4,118			1,507			—			5,625
Property transactions, net		(1,521	)		9,831			355			—			8,665
Depreciation and amortization		1,039			371,229			30,277			—			402,545
		11,635			3,092,017			303,250			—			3,406,902
Income from unconsolidated affiliates		—			119,658			—			—			119,658
Operating income		944,360			961,489			118,692			(1,073,681	)		950,860
Interest expense, net		(322,627	)		(49,129	)		(966	)		—			(372,722	)
Other, net		162			(22,532	)		47			—			(22,323	)
Income from continuing operations before income taxes		621,895			889,828			117,773			(1,073,681	)		555,815
Provision for income taxes		(206,258	)		—			299			—			(205,959	)
Income from continuing operations		415,637			889,828			118,072			(1,073,681	)		349,856
Discontinued operations		(3,305	)		7,362			58,419			—			62,476
Net income	$	412,332		$	897,190		$	176,491		$	(1,073,681	)	$	412,332
Statement of Cash Flows
Net cash provided by (used in) operating activities	$	(351,000	)	$	1,038,957		$	141,290		$	—		$	829,247
Net cash provided by (used in) investing activities		(20,325	)		(448,995	)		125,856			(4,289	)		(347,753	)
Net cash provided by (used in) financing activities		381,467			(599,480	)		(112,248	)		4,289			(325,972	)

73

	For the Year Ended December 31, 2003
				Guarantor			Non-Guarantor
	Parent			Subsidiaries			Subsidiaries			Elimination			Consolidated
	(In thousands)
Statement of Income
Net revenues	$	—		$	3,466,394		$	396,349		$	—		$	3,862,743
Equity in subsidiaries earnings		646,997			110,528			—			(757,525	)		—
Expenses:
Casino and hotel operations		—			1,956,900			195,336			—			2,152,236
General and administrative		—			534,082			51,079			—			585,161
Corporate expense		5,892			55,649			—			—			61,541
Preopening and start-up expenses		105			28,711			450			—			29,266
Restructuring costs		248			6,349			—			—			6,597
Property transactions, net		363			(19,855	)		551			—			(18,941	)
Depreciation and amortization		1,081			367,030			32,655			—			400,766
		7,689			2,928,866			280,071			—			3,216,626
Income from unconsolidated affiliates		—			53,612			—			—			53,612
Operating income		639,308			701,668			116,278			(757,525	)		699,729
Interest expense, net		(278,122	)		(53,378	)		(2,008	)		—			(333,508	)
Other, net		(6,134	)		(16,427	)		—			—			(22,561	)
Income from continuing operations before income taxes		355,052			631,863			114,270			(757,525	)		343,660
Provision for income taxes		(109,645	)		—			(3,742	)		—			(113,387	)
Income from continuing operations		245,407			631,863			110,528			(757,525	)		230,273
Discontinued operations		(1,710	)		6,585			8,549			—			13,424
Net income	$	243,697		$	638,448		$	119,077		$	(757,525	)	$	243,697
Statement of Cash Flows
Net cash provided by (used in) operating activities	$	(306,665	)	$	904,743		$	142,681		$	53		$	740,812
Net cash provided by (used in) investing activities		(5,000	)		(525,983	)		(20,658	)		(4,047	)		(555,688	)
Net cash provided by (used in) financing activities		310,575			(385,004	)		(94,800	)		3,994			(165,235	)

74

NOTE 19 — SELECTED QUARTERLY FINANCIAL RESULTS (UNAUDITED)

	Quarter
	First		Second		Third		Fourth		Total
	(In thousands, except per share amounts)
2005
Net revenues	$	1,204,135	$	1,715,956	$	1,808,243	$	1,753,633	$	6,481,967
Operating income		293,176		377,929		339,999		346,104		1,357,208
Income from continuing operations		111,079		141,168		93,210		97,799		443,256
Net income		111,079		141,168		93,210		97,799		443,256
Basic income per share:
Income from continuing operations	$	0.39	$	0.49	$	0.33	$	0.34	$	1.56
Net income		0.39		0.49		0.33		0.34		1.56
Diluted income per share:
Income from continuing operations	$	0.38	$	0.48	$	0.31	$	0.33	$	1.50
Net income		0.38		0.48		0.31		0.33		1.50
2004
Net revenues	$	1,066,436	$	1,072,525	$	1,036,396	$	1,062,747	$	4,238,104
Operating income		254,666		260,597		222,357		213,240		950,860
Income from continuing operations		97,140		101,663		76,167		74,886		349,856
Net income		105,848		104,717		126,881		74,886		412,332
Basic income per share:
Income from continuing operations	$	0.34	$	0.36	$	0.28	$	0.27	$	1.25
Net income		0.37		0.37		0.46		0.27		1.48
Diluted income per share:
Income from continuing operations	$	0.33	$	0.35	$	0.27	$	0.26	$	1.21
Net income		0.36		0.36		0.45		0.26		1.43

     Because income per share amounts are calculated using the weighted average number of common and dilutive common equivalent shares outstanding during each quarter, the sum of the per share amounts for the four quarters may not equal the total income per share amounts for the year.

75

SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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
By:	/s/ J. Terrence Lanni
	J. Terrence Lanni, Chairman and Chief Executive Officer
	(Principal Executive Officer)
By:	/s/ James J. Murren
	James J. Murren, President, Chief Financial Officer and Treasurer
	(Principal Financial and Accounting Officer)

Dated: March 13, 2006

     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ J. Terrence Lanni	Chairman and Chief Executive Officer	March 13, 2006
J. Terrence Lanni	(Principal Executive Officer)
/s/ James J. Murren	President, Chief Financial Officer,	March 13, 2006
James J. Murren	Treasurer and Director (Principal Financial and Accounting Officer)
/s/ John T. Redmond	President and Chief Executive Officer —	March 13, 2006
John T. Redmond	MGM Grand Resorts, LLC and Director
/s/ Robert H. Baldwin	President and Chief Executive Officer —	March 13, 2006
Robert H. Baldwin	Mirage Resorts, Incorporated, President—
	Project CityCenter and Director
/s/ Gary N. Jacobs	Executive Vice President, General	March 13, 2006
Gary N. Jacobs	Counsel, Secretary and Director
/s/ James D. Aljian	Director	March 13, 2006
James D. Aljian

76

Signature	Title	Date
/s/ Willie D. Davis	Director	March 13, 2006
Willie D. Davis
/s/ Alexander M. Haig, Jr.	Director	March 13, 2006
Alexander M. Haig, Jr.
/s/ Alexis M. Herman	Director	March 13, 2006
Alexis M. Herman
/s/ Roland Hernandez	Director	March 13, 2006
Roland Hernandez
/s/ Kirk Kerkorian	Director	March 13, 2006
Kirk Kerkorian
/s/ Rose McKinney-James	Director	March 13, 2006
Rose McKinney-James
/s/ Ronald M. Popeil	Director	March 13, 2006
Ronald M. Popeil
/s/ Danny M. Wade	Director	March 13, 2006
Daniel M. Wade
/s/ Melvin B. Wolzinger	Director	March 13, 2006
Melvin B. Wolzinger

77

MGM MIRAGE

SCHEDULE II — VALUATION AND QUALIFYING ACCOUNTS

(In thousands)

						Additions					Deductions
	Balance at		Provision for			from		Write-offs,			related to			Balance at
	Beginning of		Doubtful			Mandalay		net of			Discontinued			End of
Description	Period		Accounts			Acquisition		Recoveries			Operations			Period
Allowance for Doubtful Accounts
Year Ended December 31, 2005	$	59,760	$	25,846		$	14,423	$	(22,759	)	$	—		$	77,270
Year Ended December 31, 2004		79,087		(3,629	)		—		(15,698	)		—			59,760
Year Ended December 31, 2003		90,471		12,570			—		(23,072	)		(882	)		79,087

78

EXHIBIT INDEX

Exhibit
Number	Description
2(1)	Agreement and Plan of Merger, dated as of June 15, 2004, among MGM MIRAGE, Mandalay Resort Group and MGM MIRAGE Acquisition Co. #61, a wholly owned subsidiary of MGM MIRAGE (incorporated by reference to Exhibit 2.01 to the Company’s Current Report on Form 8-K dated June 17, 2004).
3(1)	Certificate of Incorporation of the Company, as amended through 1997 (incorporated by reference to Exhibit 3(1) to Registration Statement No. 33-3305 and to Exhibit 3(a) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1997).
3(2)	Certificate of Amendment to Certificate of Incorporation of the Company, dated January 7, 2000, relating to an increase in the authorized shares of common stock (incorporated by reference to Exhibit 3(2) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999 (the “1999 10-K”)).
3(3)	Certificate of Amendment to Certificate of Incorporation of the Company, dated January 7, 2000, relating to a 2-for-1 stock split (incorporated by reference to Exhibit 3(3) to the 1999 10-K).
3(4)	Certificate of Amendment to Certificate of Incorporation of the Company, dated August 1, 2000 (incorporated by reference to Exhibit 3(i).4 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2000 (the “September 2000 10-Q”)).
3(5)	Certificate of Amendment to Certificate of Incorporation of the Company, dated June 3, 2003, relating to compliance with provisions of the New Jersey Casino Control Act relating to holders of Company securities (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2003 (the “June 2003 10-Q”)).
3(6)	Certificate of Amendment to Certificate of Incorporation of the Company, dated May 3, 2005 (incorporated by reference to Exhibit 3.10 to Amendment No. 1 to the Company’s Form 8-A filed with the Commission on May 11, 2005).
3(7)	Amended and Restated Bylaws of the Company, effective May 11, 2004 (incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2004 (the “June 2004 10-Q”).
4(1)	Indenture by and between Mandalay and First Interstate Bank of Nevada, N.A., as Trustee with respect to Mandalay’s 7.625% Senior Subordinated Debentures due 2013 (incorporated by reference to Exhibit 4(a) to Mandalay’s Current Report on Form 8-K dated July 21, 1993).
4(2)	Indenture, dated February 1, 1996, by and between Mandalay and First Interstate Bank of Nevada, N.A., as Trustee (incorporated by reference to Exhibit 4(b) to Mandalay’s Current Report on Form 8-K dated January 29, 1996 (the “Mandalay January 1996 8-K”)).
4(3)	Supplemental Indenture, dated February 1, 1996, by and between Mandalay and First Interstate Bank of Nevada, N.A., as Trustee, with respect to Mandalay’s 6.45% Senior Notes due February 1, 2006 (incorporated by reference to Exhibit 4(c) to the Mandalay January 1996 8-K).
4(4)	6.45% Senior Notes due February 1, 2006 in the principal amount of $200,000,000 (incorporated by reference to Exhibit 4(d) to the Mandalay January 1996 8-K).

Exhibit
Number	Description
4(5)	Indenture, dated as October 15, 1996, between MRI and Firstar Bank of Minnesota, N.A., as trustee (the “MRI 1996 Indenture”) (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q of Mirage Resorts, Incorporated (“MRI”) (Commission File No. 01-6697) for the fiscal quarter ended September 30, 1996 (the “MRI September 1996 10-Q”)).
4(6)	Supplemental Indenture, dated as October 15, 1996, to the MRI 1996 Indenture (incorporated by reference to Exhibit 4.2 to the MRI September 1996 10-Q).
4(7)	Supplemental Indenture, dated as of November 15, 1996, to an indenture dated February 1, 1996, by and between Mandalay and Wells Fargo Bank (Colorado), N.A., as Trustee, with respect to Mandalay’s 6.70% Senior Notes due November 15, 2096 (incorporated by reference to Exhibit 4(c) to Mandalay’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 1996 (the “Mandalay October 1996 10-Q”)).
4(8)	6.70% Senior Notes due February 15, 2096 in the principal amount of $150,000,000 (incorporated by reference to Exhibit 4(d) to the Mandalay October 1996 10-Q).
4(9)	Indenture, dated November 15, 1996, by and between Mandalay and Wells Fargo Bank (Colorado), N.A., as Trustee (incorporated by reference to Exhibit 4(e) to the Mandalay October 1996 10-Q).
4(10)	Supplemental Indenture, dated as of November 15, 1996, to an indenture dated November 15, 1996, by and between Mandalay and Wells Fargo Bank (Colorado), N.A., as Trustee, with respect to Mandalay’s 7.0% Senior Notes due November 15, 2036 (incorporated by reference to the Mandalay October 1996 10-Q).
4(11)	7.0% Senior Notes due February 15, 2036, in the principal amount of $150,000,000 (incorporated by reference to Exhibit 4(g) to the Mandalay October 1996 10-Q).
4(12)	Indenture, dated as of August 1, 1997, between MRI and First Security Bank, National Association, as trustee (the “MRI 1997 Indenture”) (incorporated by reference to Exhibit 4.1 to the Quarterly Report on Form 10-Q of MRI for the fiscal quarter ended June 30, 1997 (the “MRI June 1997 10-Q”)).
4(13)	Supplemental Indenture, dated as of August 1, 1997, to the MRI 1997 Indenture (incorporated by reference to Exhibit 4.2 to the MRI June 1997 10-Q).
4(14)	Indenture, dated as of February 4, 1998, between MRI and PNC Bank, National Association, as trustee (the “MRI 1998 Indenture”) (incorporated by reference to Exhibit 4(e) to the Annual Report on Form 10-K of MRI for the fiscal year ended December 31, 1997 (the “MRI 1997 10-K”)).
4(15)	Supplemental Indenture, dated as of February 4, 1998, to the MRI 1998 Indenture (incorporated by reference to Exhibit 4(f) to the MRI 1997 10-K).
4(16)	Indenture, dated as of May 31, 2000, among the Company, as issuer, the Subsidiary Guarantors parties thereto, as guarantors, and The Bank of New York, as trustee (incorporated by reference to Exhibit 4 to the Company’s Current Report on Form 8-K dated May 22, 2000 (the “May 2000 8-K”)).
4(17)	Indenture dated as of July 24, 2000 by and between Mandalay and The Bank of New York with respect to $500 million aggregate principal amount of 10.25% Senior Subordinated Notes due 2007 (incorporated by reference to Exhibit 4.1 to Mandalay’s Form S-4 Registration Statement No. 333-44216).
4(18)	Indenture dated as of August 16, 2000 by and between Mandalay and The Bank of New York, with respect to $200 million aggregate principal amount of 9.5% Senior Notes due 2008 (incorporated by reference to Exhibit 4.1 to Mandalay’s Form S-4 Registration Statement No. 333-44838).

Exhibit
Number	Description
4(19)	Indenture, dated as of September 15, 2000, among the Company, as issuer, the Subsidiary Guarantors parties thereto, as guarantors, and U.S. Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4 to the Company’s Amended Current Report on Form 8-K/A dated September 12, 2000).
4(20)	First Supplemental Indenture, dated as of September 15, 2000, among the Company, Bellagio Merger Sub, LLC and U.S. Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4(11) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000 (the “2000 10-K”)).
4(21)	First Supplemental Indenture, dated as of September 30, 2000, among the Company, Bellagio Merger Sub, LLC and The Bank of New York, as trustee (incorporated by reference to Exhibit 4(12) to the 2000 10-K).
4(22)	Second Supplemental Indenture, dated as of October 10, 2000, to the MRI 1996 Indenture (incorporated by reference to Exhibit 4(13) to the 2000 10-K).
4(23)	Second Supplemental Indenture, dated as of October 10, 2000, to the MRI 1997 Indenture (incorporated by reference to Exhibit 4(14) to the 2000 10-K).
4(24)	Second Supplemental Indenture, dated as of October 10, 2000, to the MRI 1998 Indenture (incorporated by reference to Exhibit 4(15) to the 2000 10-K).
4(25)	Second Supplemental Indenture, dated as of December 31, 2000, among the Company, MGM Grand Hotel & Casino Merger Sub, LLC and The Bank of New York, as trustee (incorporated by reference to Exhibit 4(16) to the 2000 10-K).
4(26)	Second Supplemental Indenture, dated as of December 31, 2000, among the Company, MGM Grand Hotel & Casino Merger Sub, LLC and U.S. Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4(17) to the 2000 10-K).
4(27)	Indenture, dated as of January 23, 2001, among the Company, as issuer, the Subsidiary Guarantors parties thereto, as guarantors, and United States Trust Company of New York, as trustee (incorporated by reference to Exhibit 4 to the Company’s Current Report on Form 8-K dated January 18, 2001).
4(28)	Indenture dated as of December 20, 2001 by and among Mandalay and The Bank of New York, with respect to $300 million aggregate principal amount of 9.375% Senior Subordinated Notes due 2010 (incorporated by reference to Exhibit 4.1 to Mandalay’s Form S-4 Registration Statement No. 333-82936).
4(29)	Indenture dated as of March 21, 2003 by and among Mandalay and The Bank of New York with respect to $400 million aggregate principal amount of Floating Rate Convertible Senior Debentures due 2033 (incorporated by reference to Exhibit 4.44 to Mandalay’s Annual Report on Form 10-K for the fiscal year ended January 31, 2003).
4(30)	First Supplemental Indenture dated as of July 26, 2004, relating to Mandalay’s Floating Rate Senior Convertible Debentures due 2033 (incorporated by reference to Exhibit 4 to Mandalay’s Current Report on Form 8-K dated July 26, 2004).
4(31)	Indenture, dated as of July 31, 2003, by and between Mandalay and The Bank of New York with respect to $250 million aggregate principal amount of 6.5% Senior Notes due 2009 (incorporated by reference to Exhibit 4.1 to Mandalay’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2003).
4(32)	Indenture, dated as of September 17, 2003, among the Company, as issuer, the Subsidiary Guarantors parties thereto, as guarantors, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated September 11, 2003).

Exhibit
Number	Description
4(33)	Indenture, dated as of November 25, 2003, by and between Mandalay and The Bank of New York with respect to $250 million aggregate principal amount of 6.375% Senior Notes due 2011 (incorporated by reference to Exhibit 4.1 to Mandalay’s Quarterly Report on Form 10-Q for the fiscal quarter ended October 31, 2003).
4(34)	Indenture dated as of February 27, 2004, among the Company, as issuer, the Subsidiary Guarantors, as guarantors, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, dated February 27, 2004).
4(35)	Indenture dated as of August 25, 2004, among the Company, as issuer, certain subsidiaries of the Company, as guarantors, and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated August 25, 2004).
4(36)	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).
4(37)	Supplemental Indenture, dated September 9, 2005, among MGM MIRAGE, certain subsidiaries of MGM MIRAGE, and U.S. Bank National Association (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K dated September 9, 2005).
10.1(1)	Guarantee, dated as of May 31, 2000, by certain subsidiaries of the Company, in favor of The Chase Manhattan Bank, as successor in interest to PNC Bank, National Association, as trustee for the benefit of the holders of Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.4 to the May 2000 8-K).
10.1(2)	Schedule setting forth material details of the Guarantee, dated as of May 31, 2000, by certain subsidiaries of the Company, in favor of U.S. Trust Company, National Association (formerly known as U.S. Trust Company of California, N.A.), as trustee for the benefit of the holders of Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.5 to the May 2000 8-K).
10.1(3)	Guarantee (Mirage Resorts, Incorporated 7.25% Senior Notes Due October 15, 2006), dated as of May 31, 2000, by the Company and certain of its subsidiaries, in favor of Firstar Bank of Minnesota, N.A., as trustee for the benefit of the holders of Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.6 to the May 2000 8-K).
10.1(4)	Schedule setting forth material details of the Guarantee (Mirage Resorts, Incorporated 6.75% Notes Due February 1, 2008), dated as of May 31, 2000, by the Company and certain of its subsidiaries, in favor of The Chase Manhattan Bank, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.7 to the May 2000 8-K).
10.1(5)	Schedule setting forth material details of the Guarantee (Mirage Resorts, Incorporated 6.75% Notes Due August 1, 2007 and 7.25% Debentures Due August 1, 2017), dated as of May 31, 2000, by the Company and certain of its subsidiaries, in favor of First Security Bank, National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.8 to the May 2000 8-K).
10.1(6)	Instrument of Joinder, dated as of May 31, 2000, by MRI and certain of its wholly owned subsidiaries, in favor of the beneficiaries of the Guarantees referred to therein (incorporated by reference to Exhibit 10.9 to the May 2000 8-K).
10.1(7)	Guarantee (MGM MIRAGE 9.75% Senior Subordinated Notes due 2007) dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York N.A., as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2005 (the “September 2005 10-Q”)).

Exhibit
Number	Description
10.1(8)	Guarantee (MGM MIRAGE 8.5% Senior Notes due 2010), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York N.A., as successor to U.S. Trust Company, National Association, for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.7 to the September 2005 10-Q).
10.1(9)	Guarantee (Mirage Resorts, Incorporated 7.25% Senior Notes due 2006), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of U.S. Bank National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.8 to the September 2005 10-Q).
10.1(10)	Guarantee (Mandalay Resort Group 7.625% Senior Subordinated Notes due 2013), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.9 to the September 2005 10-Q).
10.1(11)	Guarantee (Mandalay Resort Group 6.45% Senior Notes due 2006), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of Wells Fargo Bank (Colorado), N.A., as successor in interest to First Interstate Bank of Nevada, N.A., as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.10 to the September 2005 10-Q).
10.1(12)	Guarantee (MGM MIRAGE 8.375% Senior Subordinated Notes due 2011), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York N.A., successor to the United States Trust Company of New York, as trustee for the benefit of holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.11 to the September 2005 10-Q).
10.1(13)	Guarantee (MGM MIRAGE 6.0% Senior Notes due 2009), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of U.S. Bank National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.12 to the September 2005 10-Q).
10.1(14)	Guarantee (MGM MIRAGE 6.0% Senior Notes due 2009 (Exchange Notes)), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of U.S. Bank National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.13 to the September 2005 10-Q).
10.1(15)	Guarantee (MGM MIRAGE 5.875% Senior Notes due 2014), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of U.S. Bank National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.14 to the September 2005 10-Q).
10.1(16)	Guarantee (MGM MIRAGE 5.875% Senior Notes due 2014 (Exchange Notes)), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of U.S. Bank National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.15 to the September 2005 10-Q).
10.1(17)	Guarantee (MGM MIRAGE 6.75% Senior Notes due 2012), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of U.S. Bank National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.16 to the September 2005 10-Q).
10.1(18)	Guarantee (Mirage Resorts, Incorporated 6.75% Senior Notes due 2007 and 7.25% Debentures due 2017), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of Wells Fargo Bank Northwest, National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.17 to the September 2005 10-Q).

Exhibit
Number	Description
10.1(19)	Guarantee (Mirage Resorts, Incorporated 6.75% Senior Notes due 2008), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of JPMorgan Chase Bank, N.A., successor in interest to PNC Bank, National Association, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.18 to the September 2005 10-Q).
10.1(20)	Guarantee (Mandalay Resort Group 10.25% Senior Subordinated Notes due 2007), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.19 to the September 2005 10-Q).
10.1(21)	Guarantee (Mandalay Resort Group 9.375% Senior Subordinated Notes due 2010), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.20 to the September 2005 10-Q).
10.1(22)	Guarantee (Mandalay Resort Group 6.70% Senior Notes due 2096), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York, as successor in interest to First Interstate Bank of Nevada, N.A., as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.21 to the September 2005 10-Q).
10.1(23)	Guarantee (Mandalay Resort Group 7.0% Senior Notes due 2036), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.22 to the September 2005 10-Q).
10.1(24)	Guarantee (Mandalay Resort Group 9.5% Senior Notes due 2008), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.23 to the September 2005 10-Q).
10.1(25)	Guarantee (Mandalay Resort Group Floating Rate Convertible Senior Debentures due 2033), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.24 to the September 2005 10-Q).
10.1(26)	Guarantee (Mandalay Resort Group 6.5% Senior Notes due 2009), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.25 to the September 2005 10-Q).
10.1(27)	Guarantee (Mandalay Resort Group 6.375% Senior Notes due 2011), dated as of April 25, 2005, by certain subsidiaries of MGM MIRAGE, in favor of The Bank of New York, as trustee for the benefit of the holders of the Notes pursuant to the Indenture referred to therein (incorporated by reference to Exhibit 10.26 to the September 2005 10-Q).
10.1(28)	Fourth Amended and Restated Loan Agreement, dated November 22, 2004, by and among the Company, as Borrower, MGM Grand Detroit, LLC, as a Co-Borrower, the Lenders and Co-Documentation Agents therein named, Bank of America, N.A., as the Administrative Agent, The Royal Bank of Scotland PLC, as the Syndication Agent, and Bank of America Securities LLC and The Royal Bank of Scotland PLC, as Joint Lead Arrangers and Joint Book Managers (incorporated by reference to Exhibit 10.1(10) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2004).

Exhibit
Number	Description
10.1(29)	Guaranty Agreement, dated August 16, 2004, by MGM MIRAGE in favor of Bank of America, N.A., as Administrative Agent for the benefit of the Lenders from time to time party to a Construction Loan Agreement with the Borrower, Turnberry/MGM Grand Towers, LLC (incorporated by reference to Exhibit 10.2 of the September 2004 10-Q).
10.1(30)	Guaranty Agreement, dated September 21, 2005, by MGM MIRAGE in favor of Bank of America, N.A., as Administrative Agent for the benefit of the Lenders from time to time party to a Construction Loan Agreement with the Borrower, Turnberry/MGM Grand Tower B, LLC.
10.2(1)	Lease, dated August 3, 1977, by and between B&D Properties, Inc., as lessor, and Mandalay, as lessee; Amendment of Lease, dated May 6, 1983 (incorporated by reference to Exhibit 10(h) to Mandalay’s Registration Statement (No. 2-85794) on Form S-1).
10.2(2)	Lease by and between Robert Lewis Uccelli, guardian, as lessor, and Nevada Greens, a limited partnership, William N. Pennington, as trustee, and William G. Bennett, as trustee, and related Assignment of Lease (incorporated by reference to Exhibit 10(p) to Mandalay’s Registration Statement (No. 33-4475) on Form S-1).
10.2(3)	Amended and Restated Ground Lease Agreement, dated July 1, 1993, between Primm South Real Estate Company and The Primadonna Corporation (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q of Primadonna Resorts, Inc. (Commission File No. 0-21732) for the fiscal quarter ended September 30, 1993).
10.2(4)	First Amendment to the Amended and Restated Ground Lease Agreement and Consent and Waiver, dated as of August 25, 1997, between The Primadonna Corporation and Primm South Real Estate Company (incorporated by reference to Exhibit 10.31 to the Annual Report on Form 10-K of Primadonna Resorts, Inc. for the fiscal year ended December 31, 1997).
10.2(5)	Public Trust Tidelands Lease, dated February 4, 1999, between the State of Mississippi and Beau Rivage Resorts, Inc. (without exhibits) (incorporated by reference to Exhibit 10.73 to the Annual Report on Form 10-K of MRI for the fiscal year ended December 31, 1999).
*10.3(1)	Nonqualified Stock Option Plan (incorporated by reference to Exhibit 10(1) to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996).
*10.3(2)	1997 Nonqualified Stock Option Plan, Amended and Restated February 2, 2004 (incorporated by reference to Exhibit 10.1 of the June 2004 10-Q).
*10.3(3)	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).
*10.3(4)	Amended and Restated Annual Performance Based Incentive Plan for Executive Officers, giving effect to amendment approved by the Company’s shareholders on May 13, 2003 (incorporated by reference to Appendix B to the Company’s 2003 Proxy Statement).
*10.3(5)	Non-Qualified Deferred Compensation Plan, dated as of January 1, 2001 (incorporated by reference to Exhibit 10.3(12) to the 2000 10-K).
*10.3(6)	Supplemental Executive Retirement Plan, dated as of January 1, 2001 (incorporated by reference to Exhibit 10.3(13) to the 2000 10-K).
*10.3(7)	Deferred Compensation Plan II, dated as of December 30, 2004 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K dated January 10, 2005 (the “January 2005 8-K”).

Exhibit
Number	Description
*10.3(8)	Supplemental Executive Retirement Plan II, dated as of December 30, 2004 (incorporated by reference to Exhibit 10.1 to the January 2005 8-K).
*10.3(9)	Amendment to Deferred Compensation Plan II, dated as of December 21, 2005.
*10.3(10)	Employment Agreement, dated September 16, 2005 between the Company and J. Terrence Lanni (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated September 16, 2005 (the “September 16, 2005 8-K”)).
*10.3(11)	Employment Agreement, dated September 16, 2005 between the Company and Robert H. Baldwin (incorporated by reference to Exhibit 10.2 to the September 16, 2005 8-K).
*10.3(12)	Employment Agreement, dated September 16, 2005 between the Company and John Redmond (incorporated by reference to Exhibit 10.3 to the September 16, 2005 8-K).
*10.3(13)	Employment Agreement, dated September 16, 2005 between the Company and James J. Murren (incorporated by reference to Exhibit 10.4 to the September 16, 2005 8-K).
*10.3(14)	Employment Agreement, dated September 16, 2005 between the Company and Gary N. Jacobs (incorporated by reference to Exhibit 10.5 to the September 16, 2005 8-K).

10.4(1)	Second Amended and Restated Joint Venture Agreement of Marina District Development Company, dated as of August 31, 2000, between MAC, CORP. and Boyd Atlantic City, Inc. (without exhibits) (incorporated by reference to Exhibit 10.2 to the September 2000 10-Q).
10.4(2)	Contribution and Adoption Agreement, dated as of December 13, 2000, among Marina District Development Holding Co., LLC, MAC, CORP. and Boyd Atlantic City, Inc. (incorporated by reference to Exhibit 10.4(15) to the 2000 10-K).
10.4(3)	Amended and Restated Agreement of Joint Venture of Circus and Eldorado Joint Venture by and between Eldorado Limited Liability Company and Galleon, Inc. (incorporated by reference to Exhibit 3.3 to the Form S-4 Registration Statement of Circus and Eldorado Joint Venture and Silver Legacy Capital Corp.—Commission File No. 333-87202).
10.4(4)	Amended and Restated Joint Venture Agreement, dated as of June 25, 2002, between Nevada Landing Partnership and RBG, L.P. (incorporated by reference to Exhibit 10.1 to Mandalay’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31, 2004.)
10.4(5)	Amendment No.1 to Amended and Restated Joint Venture Agreement, dated as of April 25, 2005, by and among Nevada Landing Partnership, an Illinois general partnership, and RBG, L.P., an Illinois limited partnership.
10.4(6)	Amended and Restated Subscription and Shareholders Agreement, dated June 19, 2004, among Pansy Ho, Grand Paradise Macau Limited, MGMM Macau, Ltd., MGM MIRAGE Macau, Ltd., MGM MIRAGE and MGM Grand Paradise Limited (formerly N.V. Limited) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 19, 2005).
10.5(1)	Revised Development Agreement among the City of Detroit, The Economic Development Corporation of the City of Detroit and MGM Grand Detroit, LLC (incorporated by reference to Exhibit 10.10 to the June 2002 10-Q).
10.5(2)	Revised Development Agreement effective August 2, 2002, by and among the City of Detroit, The Economic Development Corporation of the City of Detroit and Detroit Entertainment, L.L.C. (incorporated by reference to Exhibit 10.61 of Mandalay’s Annual Report on Form 10-K for the year ended January 31, 2005).
10.6(1)	Agreement and Plan of Merger dated as of March 22, 2005 among Mandalay Resort Group, MGM MIRAGE, Circus Circus Michigan, Inc., CCM Merger Inc., and CCM Merger Sub., Inc. (incorporated by reference to Exhibit 2.01 to Mandalay’s Current Report on Form 8-K dated March 22, 2005).

Exhibit
Number	Description
10.6(2)	Letter Agreement, dated March 22, 2005, between MGM MIRAGE and CCM Merger Inc. (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K dated March 22, 2005).
21	List of subsidiaries of the Company.
23	Consent of Deloitte & Touche LLP.
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.
99	Description of Regulation and Licensing.

*	Management contract or compensatory plan or arrangement.
**	Exhibits 32.1 and 32.2 shall not be deemed filed with the Securities and Exchange Commission, nor shall they be deemed incorporated by reference in any filing with the Securities and Exchange Commission under the Securities Exchange Act of 1934 or the Securities Act of 1933, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

EX-10.1.30

EXHIBIT 10.1(30)

GUARANTY AGREEMENT

     This Guaranty Agreement (this “Guaranty”) is made as of the 21st day of September, 2005, by MGM MIRAGE, a Delaware corporation (the “Guarantor”), in favor of BANK OF AMERICA, N.A., a national banking association (“Administrative Agent”), as Administrative Agent for the benefit of the Lenders (individually a “Lender” and collectively the “Lenders”) from time to time party to a Construction Loan Agreement of even date herewith and between Borrower, Administrative Agent and Lenders.

Preliminary Statements

     Administrative Agent, Lenders and Turnberry/MGM Grand Tower B, LLC, a Nevada limited liability company (“Borrower”), have entered into, are entering into concurrently herewith, or contemplate entering into, that certain Construction Loan Agreement of even date herewith (herein called, as it may hereinafter be modified, supplemented, restated, extended or renewed and in effect from time to time, the “Loan Agreement”) which Loan Agreement sets forth the terms and conditions of a construction loan (the “Loan”) being made to Borrower to finance, in part, the construction of a condominium project containing 576 residential condominium units, one hotel condominium unit and related amenities, all to be located on an approximately three (3) acre parcel of land, said project to be known as “The Residences at MGM Grand – Tower B” and to be located in Clark County, Nevada, all as more particularly described in the Loan Agreement.

     A condition precedent to Lenders’ obligation to make the Loan to Borrower is Guarantor’s execution and delivery to Administrative Agent of this Guaranty.

     The Loan is, or will be, evidenced by various promissory notes each made of even date herewith by Borrower and payable to each of the Lenders in the aggregate stated principal amount of $170,000,000.00 (such notes, as they may hereafter be renewed, extended, supplemented, increased or modified and in effect from time to time, and all other notes given in substitution therefor, or in modification, renewal, or extension thereof, in whole or in part, are herein called the “Notes”).

     Borrower and Administrative Agent and/or any of the Lenders may from time to time enter into one or more “Swap Transactions” as defined in the Deed of Trust.

     This Guaranty is one of the Loan Documents described in the Loan Agreement. Any capitalized term used and not defined in this Guaranty shall have the meaning given to such term in the Loan Agreement. In addition, the following terms have the meanings set forth after each:

“Applicable Percentage” means 50%, provided that the Applicable Percentage shall be reduced to 25% at all times when each of the following conditions have been satisfied:

     (i) Administrative Agent shall have received and approved Contracts of Sale with aggregate projected Net Sales Proceeds of not less than $230,000,000, and each of such Contracts of Sale shall either remain in full force and effect, or have been closed with the Release Price therefor having been paid (“100% Sales Coverage”);

     (ii) construction of all Improvements shall be 50% complete, on time and in accordance with the Budget, as determined by Administrative Agent and its construction consultant; and

     (iii) there shall not then exist a Default or Potential Default.

If for any reason 100% Sales Coverage fails to be maintained after the Applicable Percentage has been reduced to 25%, then the Applicable Percentage shall revert to 50% until 100% Sales Coverage is again achieved.

“Other Monetary Obligations” means all interest (including interest accruing after the commencement of any bankruptcy or insolvency proceeding by or against Borrower, whether or not allowed in such proceeding), fees, late charges, costs, expenses, indemnification indebtedness, and other sums of money (other than the Principal Indebtedness) now or hereafter due and owing, or which Borrower is obligated to pay, pursuant to (a) the terms of the Notes, the Loan Agreement, the Deed of Trust, the Environmental Agreement, any application, agreement, note or other document executed and delivered in connection with any Letter of Credit, any Swap Transaction or any other Loan Documents, including the making of required Borrower’s Deposits, and any indemnifications contained in the Loan Documents, now or hereafter existing, and (b) all renewals, extensions, refinancings, future advances, modifications, supplements or amendments of such indebtedness, or any of the Loan Documents, or any part thereof.

“Principal Indebtedness” means all principal now or hereafter due and owing, or which Borrower is obligated to pay, pursuant to (a) the terms of the Notes, the Loan Agreement, the Deed of Trust, any application, agreement, note or other document executed and delivered in connection with any Letter of Credit, any Swap Transactions or any other Loan Documents, now or hereafter existing, and (b) all renewals, extensions, refinancings, future advances, modifications, supplements or amendments of such indebtedness, or any of the Loan Documents, or any part thereof.

Statement of Agreements

     For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, and as a material inducement to Administrative Agent and Lenders to extend credit to Borrower, Guarantor hereby guarantees to Administrative Agent for the benefit of Lenders, their respective successors, endorsees and assigns, the prompt and full payment and performance of the indebtedness and obligations described below in this Guaranty (collectively called the “Guaranteed Obligations”), this Guaranty being upon the following terms and conditions:

1. Guaranty of Principal Indebtedness. Guarantor hereby unconditionally and irrevocably guarantees to Administrative Agent for the benefit of Lenders, their respective successors, endorsees and assigns, the punctual payment when due, whether by lapse of time, by acceleration of maturity, or otherwise, of the Applicable Percentage of the Principal Indebtedness. Administrative Agent shall have the right to apply any sums paid by Guarantor to any portion of the Principal Indebtedness.

     This Guaranty covers the Applicable Percentage of all Principal Indebtedness, whether presently outstanding or arising subsequent to the date hereof, including all amounts advanced by Administrative Agent or any Lender in stages or installments. The guaranty as set forth in this Section 1: (a) shall not be limited, restricted or reduced by the terms of the guaranties set forth in Sections 2 and 3, (b) is not joint, but is several, separate and apart from, and non-cumulative with, the guaranty of payment of any other Loan guarantors, and (c) is a continuing guaranty of payment and not a guaranty of collection.

2. Guaranty of Other Monetary Obligations. Guarantor hereby unconditionally and irrevocably guarantees to Administrative Agent for the benefit of Lenders, their respective successors, endorsees and assigns, the punctual payment when due, whether by lapse of time, by acceleration of maturity, or otherwise, of 50% of all Other Monetary Obligations.

     This Guaranty covers 50% of all Other Monetary Obligations, whether presently outstanding or arising subsequent to the date hereof, including all amounts advanced by Administrative Agent or any Lender in stages or installments. The guaranty set forth in this Section 2: (a) shall not be limited, restricted or reduced by the terms of the guaranties set forth in Sections 1 and 3, (b) is not joint, but is several, separate and apart from, and non-cumulative with, the guaranty of payment of any other Loan guarantors, and (c) is a continuing guaranty of payment and not a guaranty of collection.

Guaranty Agreement
Page 2

3. Guaranty of Performance. Guarantor additionally hereby jointly and severally with all other guarantors of the Loan, unconditionally and irrevocably guarantees to Administrative Agent for the benefit of the Lenders the timely performance of all obligations of Borrower under all of the Loan Documents other than the Principal Indebtedness and the Other Monetary Obligations, including, without limiting the generality of the foregoing:

     (a) that the Improvements will be constructed in accordance with the Loan Agreement and with the Plans;

     (b) that the Improvements will be completed, lien free, and ready for occupancy, including delivery of any permits, certificates, or governmental approvals required by law or the Loan Agreement, on or before the Completion Date required in the Loan Agreement; and

     (c) that Borrower will duly and punctually perform and observe all other terms, covenants, and conditions of the Note, the Deed of Trust, the Loan Agreement, the Environmental Agreement or any other Loan Document, or any Swap Transaction whether according to the present terms thereof, at any earlier or accelerated date or dates as provided therein, or pursuant to any extension of time or to any change or changes in the terms, covenants, or conditions thereof now or hereafter made or granted.

     If a Default (as such term is defined in the Loan Agreement) has occurred and is continuing, Administrative Agent may, at its option, without notice to Guarantor or anyone else, complete the Improvements either before or after commencement of foreclosure proceedings or before or after exercise of any other right or remedy of Administrative Agent against Borrower or Guarantor, with such changes or modifications in the Plans as Administrative Agent deems necessary and expend such sums as Administrative Agent, in its sole and absolute discretion, deems necessary or advisable to complete the Improvements, and Guarantor hereby waives any right to contest any such expenditures by Administrative Agent. The amount of any and all expenditures made by Administrative Agent for the foregoing purposes shall bear interest from the date made until repaid to Administrative Agent, at a rate per annum equal to the interest rate provided for in the Loan Agreement and, together with such interest, shall be due and payable by Guarantor to Administrative Agent upon demand. Administrative Agent does not have and shall never have any obligation to complete the Improvements or take any other action. The obligations and liability of Guarantor under this Section 3 shall not be limited, restricted or reduced by the terms of the guaranties set forth in Sections 1 and 2.

4. Primary Liability of Guarantor.

     (a) This Guaranty is an absolute, irrevocable and unconditional guaranty of payment and performance. This Guaranty shall be effective as a waiver of, and Guarantor hereby expressly waives, any and all rights to which Guarantor may otherwise have been entitled under any suretyship laws in effect from time to time, including any right or privilege, whether existing under statute, at law or in equity, to require Administrative Agent to take prior recourse or proceedings against any collateral, security or Person (hereinafter defined) whatsoever.

     (b) Guarantor hereby agrees that in the event of (i) a Default by Borrower in payment or performance of the Guaranteed Obligations, or any part thereof, when such indebtedness or performance becomes due, either by its terms or as the result of the exercise of any power to accelerate, or (ii) the failure of Guarantor to perform completely and satisfactorily the covenants, terms and conditions of any of the Guaranteed Obligations as may be required pursuant to this Guaranty (individually and collectively a “Default”), then upon the occurrence of such Default, the Guaranteed Obligations, for purposes of this Guaranty, shall be deemed immediately due and payable at the election of Administrative Agent, and Guarantor shall, on demand and without presentment, protest, notice of protest, further notice of nonpayment or of dishonor, default or nonperformance, or notice of acceleration or of intent to accelerate, or any other notice whatsoever, without any notice having been given to Guarantor previous to such demand of the acceptance by Administrative Agent of this Guaranty, and without any notice having been given to Guarantor previous to such demand of the creating or incurring of such indebtedness or of such obligation to perform, all such notices being hereby waived by Guarantor, pay the amount due to Administrative Agent or perform or observe the agreement, covenant, term or condition, as the case may be, and pay all damages and all costs and expenses that may arise in consequence of such Default (including, without limitation, all reasonable attorneys’ fees and expenses, investigation costs, court costs, and any and all other costs and expenses incurred by

Guaranty Agreement
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Administrative Agent in connection with the collection and enforcement of the Notes or any other Loan Document), whether or not suit is filed thereon, or whether at maturity or by acceleration, or whether before or after maturity, or whether in connection with bankruptcy, insolvency or appeal. It shall not be necessary for Administrative Agent, in order to enforce such payment or performance by Guarantor, first to institute suit or pursue or exhaust any rights or remedies against Borrower or others liable on such indebtedness or for such performance, or to enforce any rights against any security that shall ever have been given to secure such indebtedness or performance, or to join Borrower or any others liable for the payment or performance of the Guaranteed Obligations or any part thereof in any action to enforce this Guaranty, or to resort to any other means of obtaining payment or performance of the Guaranteed Obligations; provided, however, that nothing herein contained shall prevent Administrative Agent from suing on the Notes or foreclosing the Deed of Trust or from exercising any other rights thereunder, and if such foreclosure or other remedy is availed of, only the net proceeds therefrom, after deduction of all charges and expenses of every kind and nature whatsoever, shall be applied in reduction of the amount due on the Notes and Deed of Trust, and Administrative Agent shall not be required to institute or prosecute proceedings to recover any deficiency as a condition of payment hereunder or enforcement hereof. At any sale of the Property or other collateral given for the Indebtedness or any part thereof, whether by foreclosure or otherwise, Administrative Agent may at its discretion purchase all or any part of the Property or collateral so sold or offered for sale for its own account and may, in payment of the amount bid therefor, deduct such amount from the balance due it pursuant to the terms of the Notes, Deed of Trust, and other Loan Documents.

     (c) After a Default, suit may be brought or demand may be made against Borrower or against all parties who have signed this Guaranty or any other guaranty covering all or any part of the Guaranteed Obligations, or against any one or more of them, separately or together, without impairing the rights of Administrative Agent against any party hereto. Any time that Administrative Agent is entitled to exercise its rights or remedies hereunder, after a Default it may in its discretion elect to demand payment and/or performance. After a Default, if Administrative Agent elects to demand performance, it shall at all times thereafter have the right to demand payment until all of the Guaranteed Obligations have been paid and performed in full. If Administrative Agent elects to demand payment, it shall at all times thereafter have the right to demand performance until all of the Guaranteed Obligations have been paid and performed in full.

5. Certain Agreements and Waivers by Guarantor.

     (a) Guarantor acknowledges that the obligations undertaken herein involve the guaranty of obligations of persons or entities other than Guarantor and, in full recognition of that fact, consents and agrees that Lender may, at any time and from time to time, without notice or demand, and without affecting the enforceability or continuing effectiveness hereof: (a) supplement, modify, amend, extend, renew, accelerate or otherwise change the time for payment or the terms of the Guaranteed Obligations or any part thereof, including any increase or decrease of the rate(s) of interest thereon; (b) supplement, modify, amend or waive, or enter into or give any agreement, approval or consent with respect to, the Guaranteed Obligations or any part thereof, or any of the Loan Documents to which Guarantor is not a party or any additional security or guaranties, or any condition, covenant, default, remedy, right, representation or term thereof or thereunder; (c) accept new or additional instruments, documents or agreements in exchange for or relative to any of the Loan Documents or the Guaranteed Obligations or any part thereof; (d) accept partial payments on the Guaranteed Obligations; (e) receive and hold additional security or guaranties for the Guaranteed Obligations or any part thereof; (f) release, reconvey, terminate, waive, abandon, fail to perfect, subordinate, exchange, substitute, transfer and/or enforce any security or guaranties, and apply any security and direct the order or manner of sale thereof as Lender in its sole and absolute discretion may determine; (g) release any Person from any personal liability with respect to the Guaranteed Obligations or any part thereof; (h) settle, release on terms satisfactory to Lender or by operation of applicable Laws or otherwise liquidate or enforce any Guaranteed Obligations and any security or guaranty therefor in any manner, consent to the transfer of any security and bid and purchase at any sale; and/or (i) consent to the merger, change or any other restructuring or termination of the limited liability company existence or other existence of Borrower or any other guarantor of the Loan, and correspondingly restructure the Guaranteed Obligations, and any such merger, change, restructuring or termination shall not affect the liability of Guarantor or the continuing effectiveness hereof, or the enforceability hereof with respect to all or any part of the Guaranteed Obligations.

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     Upon the occurrence and during the continuance of any Default, Lender may enforce this Guaranty independently as to Guarantor and independently of any other remedy or security Lender at any time may have or hold in connection with the Guaranteed Obligations. Guarantor expressly waives any right to require Lender to marshal assets in favor of Borrower, and agrees that Lender may proceed against Borrower, or against any other guarantor of the Loan, or upon or against any security or remedy, before proceeding to enforce this Guaranty, in such order as Lender shall determine in its sole and absolute discretion. Lender may file a separate action or actions against Borrower and/or any other guarantor of the Loan without respect to whether action is brought or prosecuted with respect to any security or against any other person or entity, or whether any other person or entity is joined in any such action or actions. Guarantor agrees that Lender and Borrower or any other guarantor of the Loan may deal with each other in connection with the Guaranteed Obligations or otherwise, or alter any contracts or agreements now or hereafter existing between any of them, in any manner whatsoever, all without in any way altering or affecting the security of this Guaranty. Lender’s rights hereunder shall be reinstated and revived, and the enforceability of this Guaranty shall continue, with respect to any amount at any time paid on account of the Guaranteed Obligations which thereafter shall be required to be restored or returned by Lender upon the bankruptcy, insolvency or reorganization of Borrower or any other guarantor of the Loan, all as though such amount had not been paid. The rights of Lender created or granted herein and the enforceability of this Guaranty with respect to Guarantor at all times shall remain effective to guaranty the full amount of all the Guaranteed Obligations, even though the Guaranteed Obligations, or any part thereof, or any security or guaranty therefor, may be or hereafter may become invalid or otherwise unenforceable as against Borrower or any other guarantor of the Loan or surety and whether or not Borrower or any other guarantor of the Loan shall have any personal liability with respect thereto. Guarantor expressly waives any and all defenses now or hereafter arising or asserted by reason of (a) any disability or other defense of Borrower or any other guarantor of the Loan with respect to the Guaranteed Obligations, (b) the unenforceability or invalidity of any security or guaranty for the Guaranteed Obligations or the lack of perfection or continuing perfection or failure of priority of any security for the Guaranteed Obligations, (c) the cessation for any cause whatsoever of the liability of Borrower or any other guarantor of the Loan (other than by reason of the full payment and performance of all Guaranteed Obligations), (d) any failure of Lender to marshal assets in favor of Borrower or any other guarantor of the Loan, (e) except as otherwise provided in this Guaranty, any failure of Lender to give notice of sale or other disposition of any collateral securing any Guaranteed Obligation to Guarantor or any other person or entity or any defect in any notice that may be given in connection with any sale or disposition of any collateral securing any Guaranteed Obligation, (f) any failure of Lender to comply with applicable Laws in connection with the sale or other disposition of any collateral securing any Guaranteed Obligation or other security for any Guaranteed Obligation, including without limitation, any failure of Lender to conduct a commercially reasonable sale or other disposition of any collateral securing any Guaranteed Obligation or other security for any Guaranteed Obligation, (g) any act or omission of Lender or others that directly or indirectly results in or aids the discharge or release of Borrower or any other guarantor of the Loan or the Guaranteed Obligations or any security or guaranty therefor by operation of law or otherwise, (h) any Law which provides that the obligation of a surety or guarantor must neither be larger in amount nor in other respects more burdensome than that of the principal or which reduces a surety’s or guarantor’s obligation in proportion to the principal obligation, (i) any failure of Lender to file or enforce a claim in any bankruptcy or other proceeding with respect to any person or entity, (j) the election by Lender, in any bankruptcy proceeding of any person or entity, of the application or non-application of Section 1111(b)(2) of the United States Bankruptcy Code, (k) any extension of credit or the grant of any lien under Section 364 of the United States Bankruptcy Code, (l) any use of cash collateral under Section 363 of the United States Bankruptcy Code, (m) any agreement or stipulation with respect to the provision of adequate protection in any bankruptcy proceeding of any Person, (n) the avoidance of any lien in favor of Lender for any reason, (o) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, liquidation or dissolution proceeding commenced by or against any person or entity, including any discharge of, or bar or stay against collecting, all or any of the Guaranteed Obligations (or any interest thereon) in or as a result of any such proceeding, or (p) any action taken by Lender that is authorized by this Section or any other provision of any Loan Document. Guarantor expressly waives all setoffs and counterclaims and all presentments, demands for payment or performance, notices of nonpayment or nonperformance, protests, notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever with respect to the Guaranteed Obligations, and all notices of acceptance of this Guaranty or of the existence, creation or incurrence of new or additional Guaranteed Obligations.

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     (b) In the event any payment by Borrower or any other Person to Administrative Agent is held to constitute a preference, fraudulent transfer or other voidable payment under any bankruptcy, insolvency or similar law, or if for any other reason Administrative Agent is required to refund such payment or pay the amount thereof to any other party, such payment by Borrower or any other party to Administrative Agent shall not constitute a release of Guarantor from any liability hereunder, and this Guaranty shall continue to be effective or shall be reinstated (notwithstanding any prior release, surrender or discharge by Administrative Agent of this Guaranty or of Guarantor), as the case may be, with respect to, and this Guaranty shall apply to, any and all amounts so refunded by Administrative Agent or paid by Administrative Agent to another Person (except Guarantor) (which amounts shall constitute part of the Guaranteed Obligations), and any interest paid by Administrative Agent and any reasonable attorneys’ fees, costs and expenses paid or incurred by Administrative Agent in connection with any such event. It is the intent of Guarantor and Administrative Agent that the obligations and liabilities of Guarantor hereunder are absolute and unconditional under any and all circumstances and that until the Guaranteed Obligations are fully and finally paid and performed, and not subject to refund or disgorgement, the obligations and liabilities of Guarantor hereunder shall not be discharged or released, in whole or in part, by any act or occurrence that might, but for the provisions of this Guaranty, be deemed a legal or equitable discharge or release of a guarantor. Administrative Agent shall be entitled to continue to hold this Guaranty in its possession for the longer of (i) the period after which any performance of obligations under the Environmental Agreement shall accrue, or (ii) a period (the “Post Payment and Performance Period”) of one year from the date the Guaranteed Obligations are paid and performed in full and for so long thereafter as may be necessary to enforce any obligation of Guarantor hereunder and/or to exercise any right or remedy of Administrative Agent hereunder.

     (c) If acceleration of the time for payment of any amount payable by Borrower under the Notes, the Loan Agreement, or any other Loan Document (other than this Guaranty) is stayed or delayed by any law or tribunal, all such amounts shall nonetheless be payable by Guarantor on demand by Administrative Agent.

     (d) Guarantor waives: (i) to the extent permitted in paragraph 40.495(4) of the Nevada Revised Statutes (“NRS”), the benefits of the one-action rule under NRS Section 40.430, and (ii) to the extent permitted by NRS 104.3605, discharge under NRS 104.3605(9).

6. Subordination. If, for any reason whatsoever, Borrower is now or hereafter becomes indebted to Guarantor:

     (a) such indebtedness and all liens, security interests and rights now or hereafter existing with respect to property of Borrower securing such indebtedness shall be subordinate to the Guaranteed Obligations and to all liens, security interests and rights now or hereafter existing to secure the Guaranteed Obligations;

     (b) Guarantor shall not be entitled to enforce or receive payment, directly or indirectly, of any such indebtedness of Borrower to Guarantor (except that prior to a Default, partnership or limited liability company distributions by Borrower in the ordinary course of Borrower’s business shall be permitted) until the Guaranteed Obligations have been fully and finally paid and performed, but such restriction shall not apply during the Post-Payment and Performance Period; and

     (c) in the event of receivership, bankruptcy, reorganization, arrangement or other debtor relief or insolvency proceedings involving Borrower as debtor, Administrative Agent shall have the right to prove its claim in any such proceeding so as to establish its rights hereunder and shall have the right to receive directly from the receiver, trustee or other custodian (whether or not a Default shall have occurred or be continuing under any of the Loan Documents), dividends and payments that are payable upon any obligation of Borrower to Guarantor now existing or hereafter arising, and to have all benefits of any security therefor, until the Guaranteed Obligations have been fully and finally paid and performed. If, notwithstanding the foregoing provisions, Guarantor should receive any payment, claim or distribution that is prohibited as provided above in this Section 6, Guarantor shall pay the same to Administrative Agent immediately, Guarantor hereby agreeing that it shall receive the payment, claim or distribution in trust for Administrative Agent and shall have absolutely no dominion over the same except to pay it immediately to Administrative Agent.

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7. Other Liability of Guarantor or Borrower. If Guarantor is or becomes liable, by endorsement or otherwise, for any indebtedness owing by Borrower to Administrative Agent other than under this Guaranty, such liability shall not be in any manner impaired or affected hereby, and the rights of Administrative Agent hereunder shall be cumulative of any and all other rights that Administrative Agent may have against Guarantor. If Borrower is or becomes indebted to Administrative Agent for any indebtedness other than or in excess of the Indebtedness for which Guarantor is liable under this Guaranty, any payment received or recovery realized upon such other indebtedness of Borrower to Administrative Agent may, except to the extent paid by Guarantor on the Indebtedness or specifically required by law or agreement of Administrative Agent to be applied to the Indebtedness, in Administrative Agent’s sole discretion, be applied upon indebtedness of Borrower to Administrative Agent other than the Indebtedness. This Guaranty is independent of (and shall not be limited by) any other guaranty now existing or hereafter given. Further, Guarantor’s liability under this Guaranty is in addition to any and all other liability Guarantor may have in any other capacity.

8. Lender Assigns. This Guaranty is for the benefit of Administrative Agent, as administrative agent for the Lenders, and their successors and assigns, and in the event of an assignment of the Guaranteed Obligations, or any part thereof, the rights and benefits hereunder, to the extent applicable to the Guaranteed Obligations so assigned, may be transferred with such Guaranteed Obligations. Guarantor waives notice of any transfer or assignment of the Guaranteed Obligations, or any part thereof, and agrees that failure to give notice of any such transfer or assignment will not affect the liabilities of Guarantor hereunder.

9. Binding Effect. This Guaranty is binding not only on Guarantor, but also on Guarantor’s successors and assigns. If this Guaranty is signed by more than one Person, then all of the obligations of Guarantor arising hereunder shall be jointly and severally binding on each of the undersigned, and their respective heirs, personal representatives, successors and assigns, and the term “Guarantor” shall mean all of such Persons and each of them individually.

10. Governing Law; Forum; Consent to Jurisdiction. The validity, enforcement, and interpretation of this Guaranty, shall for all purposes be governed by and construed in accordance with the laws of the State of Nevada and applicable United States federal law, and is intended to be performed in accordance with, and only to the extent permitted by, such laws. All obligations of Guarantor hereunder are payable and performable at the place or places where the Guaranteed Obligations are payable and performable. Guarantor hereby irrevocably submits generally and unconditionally for Guarantor and in respect of Guarantor’s property to the nonexclusive jurisdiction of any state court, or any United States federal court, sitting in the State of Nevada, and to the jurisdiction of any state or United States federal court sitting in the state in which any of the Land is located, over any suit, action or proceeding arising out of or relating to this Guaranty or the Guaranteed Obligations. Guarantor hereby irrevocably waives, to the fullest extent permitted by law, any objection that Guarantor may now or hereafter have to the laying of venue in any such court and any claim that any such court is an inconvenient forum. Final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon Guarantor and may be enforced in any court in which Guarantor is subject to jurisdiction. Guarantor hereby releases, to the extent permitted by applicable law, all errors and all rights of exemption, appeal, stay of execution, inquisition, and other rights to which Guarantor may otherwise be entitled under the laws of the United States of America or any State or possession of the United States of America now in force or which may hereinafter be enacted. The authority and power to appear for and enter judgment against the Guarantor shall not be exhausted by one or more exercises thereof or by any imperfect exercise thereof and shall not be extinguished by any judgment entered pursuant thereto. To the extent permitted by applicable law, such authority may be exercised on one or more occasions or from time to time in the same or different jurisdiction as often as the Administrative Agent shall deem necessary and desirable.

11. Invalidity of Certain Provisions. If any provision of this Guaranty or the application thereof to any Person or circumstance shall, for any reason and to any extent, be declared to be invalid or unenforceable, neither the remaining provisions of this Guaranty nor the application of such provision to any other Person or circumstance shall be affected thereby, and the remaining provisions of this Guaranty, or the applicability of such provision to other Persons or circumstances, as applicable, shall remain in effect and be enforceable to the maximum extent permitted by applicable law.

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12. Attorneys’ Fees and Costs of Collection. After a Default, Guarantor shall pay on demand all reasonable attorneys’ fees and all other reasonable costs and expenses incurred by Administrative Agent in the enforcement of or preservation of Administrative Agent’s rights under this Guaranty including, without limitation, all reasonable attorneys’ fees and expenses, investigation costs, and all court costs, whether or not suit is filed hereon, or whether at maturity or by acceleration, or whether before or after maturity, or whether in connection with bankruptcy, insolvency or appeal. Guarantor agrees to pay interest on any expenses or other sums due to Administrative Agent under this Section 12 that are not paid when due, at a rate per annum equal to the interest rate provided for in the Notes. Guarantor’s obligations and liabilities under this Section 12 shall survive any payment or discharge in full of the Guaranteed Obligations.

13. Payments. All sums payable under this Guaranty shall be paid in lawful money of the United States of America that at the time of payment is legal tender for the payment of public and private debts.

14. Controlling Agreement. It is not the intention of Administrative Agent or Guarantor to obligate Guarantor to pay interest in excess of that lawfully permitted to be paid by Guarantor under applicable law. Should it be determined that any portion of the Guaranteed Obligations or any other amount payable by Guarantor under this Guaranty constitutes interest in excess of the maximum amount of interest that Guarantor, in Guarantor’s capacity as guarantor, may lawfully be required to pay under applicable law, the obligation of Guarantor to pay such interest shall automatically be limited to the payment thereof in the maximum amount so permitted under applicable law. The provisions of this Section 14 shall override and control all other provisions of this Guaranty and of any other agreement between Guarantor and Administrative Agent.

15. Representations, Warranties, and Covenants of Guarantor. Guarantor hereby represents, warrants, and covenants that (a) Guarantor expects to derive a material and substantial benefit, directly or indirectly, from the making of the Loan to Borrower and from the making of this Guaranty by Guarantor; (b) this Guaranty is duly authorized and valid, and is binding upon and enforceable against Guarantor; (c) Guarantor is not, and the execution, delivery and performance by Guarantor of this Guaranty will not cause Guarantor to be, in violation of or in default with respect to any law or in default under any agreement or restriction by which Guarantor is bound or affected; and (d) Guarantor has full power and authority to enter into and perform this Guaranty.

     In addition to the foregoing, Guarantor represents and warrants to Lender that Guarantor has established adequate means of obtaining from Borrower, on a continuing basis, financial and other information pertaining to the business, operations and condition (financial and otherwise) of Borrower and its properties, and Guarantor now is and hereafter will be completely familiar with the businesses, operations and condition (financial and otherwise) of Borrower and its properties. Guarantor hereby expressly waives and relinquishes any duty on the part of Lender (should any such duty exist) to disclose to Guarantor any matter, fact or thing related to the businesses, operations or condition (financial or otherwise) of Borrower or its properties, whether now known or hereafter known by Lender during the life of this Guaranty. With respect to any of the Guaranteed Obligations, Lender need not inquire into the powers of Borrower or the members or employees acting or purporting to act on Borrower’s behalf, and all Guaranteed Obligations made or created in good faith reliance upon the professed exercise of such powers shall be secured hereby.

16. Notices. All notices, requests, consents, demands and other communications required or which any party desires to give hereunder or under any other Loan Document shall be in writing and, unless otherwise specifically provided in such other Loan Document, shall be deemed sufficiently given or furnished if delivered by personal delivery by nationally recognized overnight courier service, or by registered or certified United States mail, postage prepaid, addressed to the party to whom directed at the addresses specified in this Guaranty (unless changed by similar notice in writing given by the particular party whose address is to be changed) or by facsimile. Any such notice or communication shall be deemed to have been given either at the time of personal delivery or, in the case of courier or mail, as of the date of first attempted delivery at the address and in the manner provided herein, or, in the case of facsimile, upon receipt; provided that, service of a notice required by any applicable statute shall be considered complete when the requirements of that statute are met. Notwithstanding the foregoing, no notice of change of address shall be effective except upon actual receipt. This Section shall not be construed in any way to affect or impair any waiver of notice or demand provided in this Guaranty or in any Loan Document or to require giving of notice or demand to or upon any Person in any situation or for any reason.

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17. Cumulative Rights. The exercise by Administrative Agent of any right or remedy hereunder or under any other Loan Document, or at law or in equity, shall not preclude the concurrent or subsequent exercise of any other right or remedy. Administrative Agent shall have all rights, remedies and recourses afforded to Administrative Agent by reason of this Guaranty or any other Loan Document or by law or equity or otherwise, and the same (a) shall be cumulative and concurrent, (b) may be pursued separately, successively or concurrently against Guarantor or others obligated for the Guaranteed Obligations, or any part thereof, or against any one or more of them, or against any security or otherwise, at the sole and absolute discretion of Administrative Agent, (c) may be exercised as often as occasion therefor shall arise, it being agreed by Guarantor that the exercise of, discontinuance of the exercise of or failure to exercise any of such rights, remedies, or recourses shall in no event be construed as a waiver or release thereof or of any other right, remedy, or recourse, and (d) are intended to be, and shall be, nonexclusive. No waiver of any default on the part of Guarantor or of any breach of any of the provisions of this Guaranty or of any other document shall be considered a waiver of any other or subsequent default or breach, and no delay or omission in exercising or enforcing the rights and powers granted herein or in any other document shall be construed as a waiver of such rights and powers, and no exercise or enforcement of any rights or powers hereunder or under any other document shall be held to exhaust such rights and powers, and every such right and power may be exercised from time to time. The granting of any consent, approval or waiver by Administrative Agent shall be limited to the specific instance and purpose therefor and shall not constitute consent or approval in any other instance or for any other purpose. No notice to or demand on Guarantor in any case shall of itself entitle Guarantor to any other or further notice or demand in similar or other circumstances. No provision of this Guaranty or any right, remedy or recourse of Administrative Agent with respect hereto, or any default or breach, can be waived, nor can this Guaranty or Guarantor be released or discharged in any way or to any extent, except specifically in each case by a writing intended for that purpose (and which refers specifically to this Guaranty) executed, and delivered to Guarantor, by Administrative Agent.

18. Term of Guaranty. This Guaranty shall continue in effect until all the Guaranteed Obligations are fully and finally paid, performed and discharged.

19. Financial Statements. Guarantor shall provide to Administrative Agent, concurrently with the provision thereof to the Administrative Agent or other primary creditor representative under its Primary Senior Credit Agreement, as and when required by the terms of such Primary Senior Credit Agreement, copies of Guarantor’s quarterly and annual financial statements and other financial information required to be given in Article 7 of the Primary Senior Credit Agreement. The foregoing requirement may be satisfied by Guarantor’s provision of a hyperlink to an internet posting of such financial statements. “Primary Senior Credit Agreement” means the Fourth Amended and Restated Loan Agreement dated as of November 22, 2004, executed by, among others, MGM Mirage, as borrower, and Bank of America, N.A., as administrative agent, and any senior credit facility executed by the aforementioned parties which replaces same, as the same may be modified, amended or extended from time to time.

20. Disclosure of Information. Administrative Agent and/or any Lender may sell or offer to sell the Loan or interests in the Loan to one or more assignees or participants and may disclose to any such assignee or participant or prospective assignee or participant, to Administrative Agent’s or such Lender’s affiliates, including without limitation Banc of America Securities LLC, to any regulatory body having jurisdiction over Administrative Agent and/or such Lender and to any other parties as necessary or appropriate in Administrative Agent’s and/or such Lender’s reasonable judgment, any information Administrative Agent and/or such Lender now has or hereafter obtains pertaining to the Guaranteed Obligations, this Guaranty, or Guarantor, including, without limitation, information regarding any security for the Guaranteed Obligations or for this Guaranty, credit or other information on Guarantor, Borrower, and/or any other party liable, directly or indirectly, for any part of the Guaranteed Obligations.

21. Waiver of Rights of Subrogation. Notwithstanding anything to the contrary elsewhere contained herein or in any other Loan Document to which any Guarantor is a party, Guarantor hereby expressly waives with respect to Borrower and Borrower’s successors and assigns (including any surety) and any other person or entity which is directly or indirectly a creditor of Borrower, any and all rights at Law or in equity to subrogation, to reimbursement, to exoneration, to contribution, to setoff or to any other rights that could accrue to a surety against a principal, to a guarantor against a maker or obligor, to an accommodation party against the party accommodated, or to a holder or transferee against a maker, and which Guarantor may have or hereafter acquire against Borrower or any other such person or entity in connection with or as a result of Guarantor’s execution, delivery and/or performance of this

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Guaranty or any other Loan Document to which Guarantor is a party. Guarantor agrees that it shall not have or assert any such rights against Borrower or Borrower’s successors and assigns or any other person or entity (including any surety) which is directly or indirectly a creditor of Borrower, either directly or as an attempted setoff to any action commenced against Guarantor by Borrower (as borrower, co-borrower or in any other capacity), Lender or any other such person or entity. Guarantor hereby acknowledges and agrees that this waiver is intended to benefit Borrower and Lender and shall not limit or otherwise affect Guarantor’s liability hereunder, under any other Loan Document to which Guarantor is a Party, or the enforceability hereof or thereof.

22. No Fiduciary Relationship. The relationship between Administrative Agent and Lenders to the Guarantor is solely that of lenders and guarantor, by reason of this Guaranty. Administrative Agent and Lenders have no fiduciary or other special relationship with or duty to Guarantor and none is created hereby or may be inferred from any course of dealing or act or omission of Administrative Agent or Lenders.

23. Interpretation. The term “Lenders” shall be deemed to include any subsequent holder(s) of the Note(s). Whenever the context of any provisions hereof shall require it, words in the singular shall include the plural, and words in the plural shall include the singular. Captions and headings in the Loan Documents are for convenience only and shall not affect the construction of the Loan Documents.

24. Time of Essence. Time shall be of the essence in this Guaranty with respect to all of Guarantor’s obligations hereunder.

25. Counterparts. This Guaranty may be executed in multiple counterparts, each of which, for all purposes, shall be deemed an original, and all of which taken together shall constitute but one and the same agreement.

26. Entire Agreement. This Guaranty embodies the entire agreement between Administrative Agent and Guarantor with respect to the guaranty by Guarantor of the Guaranteed Obligations. This Guaranty supersedes all prior agreements and understandings, if any, with respect to the guaranty by Guarantor of the Guaranteed Obligations. No condition or conditions precedent to the effectiveness of this Guaranty exist. This Guaranty shall be effective upon execution by Guarantor and delivery to Administrative Agent. This Guaranty may not be modified, amended or superseded except in a writing signed by Administrative Agent and Guarantor referencing this Guaranty by its date and specifically identifying the portions hereof that are to be modified, amended or superseded.

27. Non-Involvement of Tracinda. The parties hereto acknowledge that neither Kirk Kerkorian nor Tracinda Corporation, individually or collectively, is a party to this Guaranty or any of the other Loan Documents executed as of the date hereof. Accordingly, the parties hereto hereby agree that in the event (i) there is any alleged breach or default by any party under this Agreement or any such Loan Document, or (ii) any party hereto has any claim arising from any such Loan Document, no party hereto, nor any party claiming through it (to the extent permitted by applicable Law), shall commence any proceedings or otherwise seek to impose any liability whatsoever against Mr. Kerkorian or Tracinda Corporation under any such Loan Document by reason of such alleged breach, default or claim.

28. Dispute Resolution.

     (a) Arbitration. Except to the extent expressly provided below, any Dispute (as defined below) shall, upon the request of either party, be determined by binding arbitration in accordance with the Federal Arbitration Act, Title 9, United States Code (or if not applicable, the applicable state law), the then-current rules for arbitration of financial services disputes of the American Arbitration Association, or any successor thereof (“AAA”) and the “Special Rules” set forth below. “Dispute” means any controversy, claim or dispute between or among the parties to this Guaranty, including any controversy, claim or dispute arising out of or relating to (a) this Guaranty, (b) any other Loan Documents, (c) any related agreements or instruments, or (d) the transaction contemplated herein or therein (including any claim based on or arising from an alleged personal injury or business tort). In the event of any inconsistency, the Special Rules shall control. The filing of a court action is not intended to constitute a waiver of the right of Borrower, Guarantor or Administrative Agent, including the suing party, thereafter to require submittal of the Dispute to arbitration. Any party to this Guaranty may bring an action, including a summary or expedited proceeding, to compel arbitration of any Dispute in any court having jurisdiction over such action. For the purposes of this Dispute Resolution Section only, the terms “party” and “parties” shall include any parent

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corporation, subsidiary or affiliate of Administrative Agent or any Lender involved in the servicing, management or administration of any obligation described in or evidenced by this Guaranty, together with the officers, employees, successors and assigns of each of the foregoing.

     (b) Special Rules.

          (i) The arbitration shall be conducted in any U.S. state where real or tangible personal property collateral is located, or if there is no such collateral, in the city and county where Administrative Agent is located pursuant to its address for notice purposes in this Guaranty.

          (ii) The arbitration shall be administered by AAA, who will appoint an arbitrator. If AAA is unwilling or unable to administer or legally precluded from administering the arbitration, or if AAA is unwilling or unable to enforce or legally precluded from enforcing any and all provisions of this Dispute Resolution Section, then any party to this Guaranty may substitute another arbitration organization that has similar procedures to AAA and that will observe and enforce any and all provisions of this Dispute Resolution Section. All Disputes shall be determined by one arbitrator; however, if the amount in controversy in a Dispute exceeds Five Million Dollars ($5,000,000), upon the request of any party, the Dispute shall be decided by three arbitrators (for purposes of this Guaranty, referred to collectively as the “arbitrator”).

          (iii) All arbitration hearings will be commenced within ninety (90) days of the demand for arbitration and completed within ninety (90) days from the date of commencement; provided, however, that upon a showing of good cause, the arbitrator shall be permitted to extend the commencement of such hearing for up to an additional sixty (60) days.

          (iv) The judgment and the award, if any, of the arbitrator shall be issued within thirty (30) days of the close of the hearing. The arbitrator shall provide a concise written statement setting forth the reasons for the judgment and for the award, if any. The arbitration award, if any, may be submitted to any court having jurisdiction to be confirmed and enforced, and such confirmation and enforcement shall not be subject to arbitration.

          (v) The arbitrator will give effect to statutes of limitations and any waivers thereof in determining the disposition of any Dispute and may dismiss one or more claims in the arbitration on the basis that such claim or claims is or are barred. For purposes of the application of the statute of limitations, the service on AAA under applicable AAA rules of a notice of Dispute is the equivalent of the filing of a lawsuit.

          (vi) Any dispute concerning this arbitration provision, including any such dispute as to the validity or enforceability of this provision, or whether a Dispute is arbitrable, shall be determined by the arbitrator; provided, however, that the arbitrator shall not be permitted to vary the express provisions of these Special Rules or the Reservations of Rights in subsection (c) below.

          (vii) The arbitrator shall have the power to award legal fees and costs pursuant to the terms of this Guaranty.

          (viii) The arbitration will take place on an individual basis without reference to, resort to, or consideration of any form of class or class action.

     (c) Reservations of Rights. Nothing in this Guaranty shall be deemed to (i) limit the applicability of any otherwise applicable statutes of limitation and any waivers contained in this Guaranty, or (ii) apply to or limit the right of Administrative Agent (A) to exercise self help remedies such as (but not limited to) setoff, or (B) to foreclose judicially or nonjudicially against any real or personal property collateral, or to exercise judicial or nonjudicial power of sale rights, (C) to obtain from a court provisional or ancillary remedies such as (but not limited to) injunctive relief, writ of possession, prejudgment attachment, or the appointment of a receiver, or (D) to pursue rights against a party to this Guaranty in a third-party proceeding in any action brought against Administrative Agent in a state, federal or international court, tribunal or hearing body (including actions in specialty courts, such as bankruptcy and patent courts). Administrative Agent may exercise the rights set forth in clauses (A) through (D), inclusive, before, during or after the pendency of any arbitration proceeding brought pursuant to this Guaranty. Neither the exercise of self help remedies nor the institution or maintenance of an action for foreclosure or

Guaranty Agreement
Page 11

provisional or ancillary remedies shall constitute a waiver of the right of any party, including the claimant in any such action, to arbitrate the merits of the Dispute occasioning resort to such remedies. No provision in the Loan Documents regarding submission to jurisdiction and/or venue in any court is intended or shall be construed to be in derogation of the provisions in any Loan Document for arbitration of any Dispute.

     (d) Conflicting Provisions for Dispute Resolution. If there is any conflict between the terms, conditions and provisions of this Section and those of any other provision or agreement for arbitration or dispute resolution, the terms, conditions and provisions of this Section shall prevail as to any Dispute arising out of or relating to (i) this Guaranty, (ii) any other Loan Document, (iii) any related agreements or instruments, or (iv) the transaction contemplated herein or therein (including any claim based on or arising from an alleged personal injury or business tort). In any other situation, if the resolution of a given Dispute is specifically governed by another provision or agreement for arbitration or dispute resolution, the other provision or agreement shall prevail with respect to said Dispute.

     (e) Jury Trial Waiver in Arbitration. By agreeing to this Section, the parties irrevocably and voluntarily waive any right they may have to a trial by jury in respect of any Dispute.

29. WAIVER OF JURY TRIAL. WITHOUT INTENDING IN ANY WAY TO LIMIT THE PARTIES’ AGREEMENT TO ARBITRATE ANY “DISPUTE” (FOR PURPOSES OF THIS SECTION, AS DEFINED IN SECTION 28 ABOVE) AS SET FORTH IN THIS AGREEMENT, TO THE EXTENT ANY “DISPUTE” IS NOT SUBMITTED TO ARBITRATION OR IS DEEMED BY THE ARBITRATOR OR BY ANY COURT WITH JURISDICTION TO BE NOT ARBITRABLE OR NOT REQUIRED TO BE ARBITRATED, GUARANTOR AND ADMINISTRATIVE AGENT WAIVE TRIAL BY JURY IN RESPECT OF ANY SUCH “DISPUTE” AND ANY ACTION ON SUCH “DISPUTE.” THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY GUARANTOR AND ADMINISTRATIVE AGENT, AND GUARANTOR AND ADMINISTRATIVE AGENT HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON OR ENTITY TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THE LOAN DOCUMENTS. GUARANTOR AND ADMINISTRATIVE AGENT ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL. GUARANTOR FURTHER REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

     THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[Signature page follows.]

Guaranty Agreement
Page 12

     IN WITNESS WHEREOF, Guarantor duly executed this Guaranty as of the date first written above.

	Guarantor:
Addresses of Guarantor:
3600 Las Vegas Blvd. South	MGM MIRAGE, a Delaware corporation
Las Vegas, Nevada 89109
Attn: Bryan L. Wright
Fax: 702-693-8677
bwright@mgmmirage.com	By:	/s/ Bryan L. Wright
		Bryan L. Wright, Sr. Vice President,
and		Assistant General Counsel and
		Assistant Secretary

3600 Las Vegas Blvd. South		(Corporate Seal)
Las Vegas, Nevada 89109
Attn:	Gary Jacobs,
	Executive Vice President, General Counsel
Fax: 702-693-7628
gary_jacobs@mgmmirage.com
Address of Administrative Agent:
Bank of America, N.A.
100 Southeast 2nd Street
14th Floor
Miami, Florida 33131-2100
Attn:	Real Estate Administration
	FL7-950-14-05
Fax No.: (305) 533-2456

STATE OF Nevada	)
	:ss
COUNTY OF Clark	)

     The foregoing instrument was acknowledged before me this 21st day of September, 2005, by Bryan L. Wright, as Sr. Vice President, Assistant General Counsel and Assistant Secretary of MGM Mirage, a Delaware corporation, who is personally known to me or produced ______ as identification.

/s/ Katherine M. Smith

Notary State of Nevada

Name of Notary: Katherine M. Smith

Notary Expiration Date: 6/28/06

(Notary Seal)

Guaranty Agreement
Page 13

EX-10.3.9

EXHIBIT 10.3(9)

Deferred Compensation Plan II
Amendment One

MGM MIRAGE, a Delaware corporation, hereby amends, effective as of January 1, 2005, the MGM MIRAGE Deferred Compensation Plan II (“Plan II”) as follows:

1.	Section 16.18 is added as follows:
	“Cancellation of Deferral Elections or Termination of Participation During 2005. Subject to the Committee’s approval, in its sole discretion, during the 2005 calendar year, a Participant or the Company may elect to (i) cancel, in whole or in part, the Participant’s deferral elections for amounts subject to Code Section 409A, or (ii) terminate the Participant’s participation in the plan for amounts subject to Code Section 409A. All amounts that are subject to the cancellation of deferral elections or the termination of plan participation shall be includible in the Participant’s income during 2005, or, if later, in the first taxable year in which the amounts become earned and vested. The foregoing is to be interpreted and administered in accordance Q&A-20 of IRS Notice 2005-1.”
2.	Except as expressly provided herein, the provisions of Plan II will continue in their entirety as set forth immediately prior to the effective date of this amendment.

This Amendment was signed as of the date written below.

Dated: December 21, 2005

MGM MIRAGE, a Delaware Corporation
By:	/s/ Gary N. Jacobs
Its:	Exec VP, Gen Counsel, Secretary

EX-10.4.5

EXHIBIT 10.4(5)

AMENDMENT NO. 1 TO
AMENDED AND RESTATED JOINT VENTURE AGREEMENT

     THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED JOINT VENTURE AGREEMENT (this “Amendment”) is made and entered into as of April 25, 2005, by and among Nevada Landing Partnership, an Illinois general partnership (“Nevada Group”), and RBG, L.P., an Illinois limited partnership (“Illinois Group”).

W I T N E S S E T H:

     WHEREAS, the Nevada Group and the Illinois Group are the Partners of Elgin Riverboat Resort-Riverboat Casino, an Illinois general partnership (the “Joint Venture”), each with a fifty (50%) percent Partnership Interest;

     WHEREAS, the Joint Venture is governed by that certain Amended and Restated Joint Venture Agreement, made and entered into as of June 25, 2002 (the “JV Agreement”);

     WHEREAS, the Nevada Group is an indirect wholly-owned subsidiary of Mandalay Resort Group, a Nevada corporation, which has agreed to merge with and into a wholly-owned subsidiary of MGM MIRAGE, a Delaware corporation (the “Merger”);

     WHEREAS, in connection with, and to facilitate the completion of the Merger, the Nevada Group desires to deposit with and J.P. Morgan Trust Company, National Association, as escrow agent (the “Escrow Agent”), and the Escrow Agent is willing to accept and receive into escrow, all of the Nevada Group’s Partnership Interest in the Joint Venture, effective immediately prior to the Merger (the “Escrow”), all as more fully described in and pursuant to the terms and conditions of a certain escrow agreement of even date herewith a copy of which is attached hereto as Annex 1 (the “Escrow Agreement”);

     WHEREAS, pursuant to Section 11.10 of the JV Agreement, the JV Agreement may be amended in a document duly executed by each Partner; and

     WHEREAS, the Partners desire to amend the JV Agreement to provide for, among other things, the rights and obligations of the Partners during the pendency of the Escrow.

     NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements herein contained, the parties hereto agree as follows:

     1. Definitions. Capitalized terms used but not defined herein shall have the respective meanings given to such terms in the JV Agreement.

     2. Amendments to Definitions. Article I of the JV Agreement is hereby amended to replace the word “Hotel” with “Joint Venture’s assets” in the definition of “Sale” and to add the following defined terms in alphabetical order to Article I to read as follows:

          “Amendment” shall mean that certain Amendment No. 1 to Amended and Restated Joint Venture Agreement, entered into as of April ___, 2005.

          “Deposits” shall have the meaning set forth in the Escrow Agreement.

          “Escrow Agent” shall mean J.P. Morgan Trust Company, National Association, in its capacity as escrow agent pursuant to the Escrow Agreement, or any permitted successor thereto.

          “Escrow Agreement” shall mean that certain Escrow Agreement, dated as of April ___, 2005, by and between the Nevada Group and the Escrow Agent a copy of which is attached to this Agreement as Exhibit A.

          “Escrowed Interest” shall mean the Nevada Group’s right, title and interest in and to its Partnership Interest in the Joint Venture deposited with the Escrow Agent, including all Deposits and Permitted Investments.

          “Independent Accountants” shall mean Deloitte & Touche LLP, or such other national accounting firm as selected by the Nevada Group and Illinois Group.

          “Interim Period” shall mean the period of time beginning on the date the Escrowed Interest is deposited into escrow pursuant to the Escrow Agreement and ending on the assignment of the Escrowed Interest out of escrow pursuant to the Escrow Agreement following approval thereof by the Illinois Gaming Board or as otherwise directed by the Illinois Gaming Board.

          “Merger” shall mean the merger of Mandalay Resort Group, a Nevada corporation, into a wholly-owned subsidiary of MGM MIRAGE, a Delaware corporation.

          “Permitted Investments” shall have the meaning set forth in the Escrow Agreement.

          “Subject Interest” shall mean the Partnership Interest of the Nevada Group, including the Escrowed Interest.

          “Subject Transactions” shall mean the Merger, the deposit of the Escrowed Interest into escrow pursuant to the Escrow Agreement and/or any of the transactions associated therewith or contemplated thereby; provided, however, that the term Subject Transactions shall not include actions by the Managing Joint Venture Partner in connection with the operation of the Joint Venture’s business or the provisions in this Agreement relating to the Preferred Distribution.

          “Tax Loss” shall mean the amount as determined by the Independent Accountants calculated as the difference between:

          (x) the sum of (1) the increased amount of state and federal income taxes owed by a Tax Termination Indemnitee (as defined in Section 9.4 of

2

the Agreement, as amended by this Amendment) as a result of a final determination, after all available appeals have been exhausted) that a sale or other transfer of a Partnership Interest has caused a tax termination of the Joint Venture for federal income tax purposes pursuant to Section 708(b) of the Code (including interest and penalties assessed) using such Tax Termination Indemnitee’s marginal income tax rates applicable to the income resulting from the adjusted allocation from the Joint Venture and the payment of the Tax Loss; and (2) the amount of increased state and federal income tax owed by such Tax Termination Indemnitee with respect to taxable years after the taxable years at issue in the final determination described above using the same marginal income tax rates used for clause (1) of this definition discounted to the date of payment of the Tax Loss at a rate equal to six percent (6%); and

          (y) the amount of decreased state and federal income taxes owed by such Tax Termination Indemnitee with respect to taxable years after the taxable years at issue in the final determination described above using the same marginal income tax rates used for clause (1) of this definition discounted to the date of payment at a rate equal to six percent (6%).

     3. Amendment related to Escrow. Article XI of the JV Agreement is hereby amended to add a new Section 11.14 to Article XI to read as follows:

          “11.14 Escrow-Related Matters. During the Interim Period and notwithstanding anything in this Agreement to the contrary, neither the Nevada Group nor the Escrow Agent shall be deemed to have any power or authority of a Partner hereunder and the Escrow Agent shall not be a substitute Partner; provided that (i) in accordance with the terms and conditions of the Escrow Agreement and applicable law, the Escrow Agent shall be entitled to receive and hold in escrow the Nevada Group’s share of the profits and the Nevada Group shall bear its share of losses as a Partner and (ii) the Nevada Group and, the Escrow Agent to the extent of the Deposits and Permitted Investments, shall be liable for 50% of the liabilities of the Joint Venture. In furtherance and not in limitation of the forgoing, the following provisions shall apply during the pendency of the Interim Period:

          (a) The Nevada Group hereby irrevocably authorizes and directs the Joint Venture to deposit with the Escrow Agent all cash and/or other distributions with respect to the Nevada Group’s Partnership Interest.

          (b) Neither the Nevada Group nor the Escrow Agent shall have any right to designate or elect any member of the Committee.

          (c) The members of the Committee appointed by the Nevada Group who serve on the Committee immediately prior to the commencement of the Interim Period are hereby removed from such positions by the Nevada Group

3

effective on the date hereof and the three (3) positions on the Committee to which the Nevada Group is entitled to appoint members shall remain vacant during the Interim Period. Any action taken by the remaining members of the Committee in conformity with this Agreement and applicable law shall be fully binding on all Partners (including, for this purpose, the Nevada Group and the Escrow Agent).

          (d) Any action that may be taken by a Partner pursuant to the terms of this Agreement may only be taken by the Managing Joint Venture Partner in conformity with this Agreement and applicable law; provided, that, unless required by the Illinois Gaming Board or the staff of the Illinois Gaming Board, the Managing Joint Venture Partner shall not have the authority to:

          (i) sell all or substantially all of the assets of the Joint Venture;

          (ii) re-brand the Joint Venture assets; or

          (iii) make calls for additional capital contributions to fund expenditures which are not in the ordinary course of business and which are not required for the operation of the Joint Venture assets as they are presently operated or proposed to be operated (as of the date hereof); provided, that the foregoing provisions of this sub-clause (iii) shall not limit the ability of the Managing Joint Venture Partner to make calls for additional capital contributions to the extent such additional capital contributions are: (A) reasonably necessary in the event of an emergency for the continued operation of the Joint Venture and its assets as they are operated immediately prior to the event giving rise to the emergency (but taking into account the nature and impact of the emergency); (B) consistent with past practice of the Nevada Group (in its capacity as Managing Joint Venture Partner); (C) reasonably necessary to maintain the competitive position of the Joint Venture and its assets so long as such expenditures are not of such disproportionate size or nature as to unreasonably change the nature of the Joint Venture and/or its assets; (D) used to fund the acquisition of additional gaming positions to the extent allowed by Illinois law, together with any additional expenditures reasonably necessary to support such additional gaming positions; (E) required by the Illinois Gaming Board in connection with re-licensing or otherwise; or (F) consistent with the most recent capital expenditure budget approved by the Committee.

          (e) Except as provided by the terms and provisions of the Escrow Agreement or as contemplated in this Agreement, the Nevada Group will

4

not, and will not cause the Escrow Agent to, sell, transfer, convey or assign or attempt to sell, transfer, convey or assign the Subject Interest.

          (f) The Escrow Agent, to the extent of the Deposits and the Permitted Investments, shall advance to the Joint Venture the Nevada Group’s pro rata share of any required additional capital contributions pursuant to Section 4.2 of this Agreement; provided, that the Nevada Group or its Affiliates shall be allowed to fund such capital calls to the extent that the Nevada Group or its Affiliates are permitted to do so by applicable law and the Illinois Gaming Board. Any amounts funded pursuant to this Section 11.4(f) shall be credited to the Nevada Group’s capital account.

          (g) The Committee shall continue to operate the Joint Venture in the ordinary course, consistent with past practice; provided that the foregoing shall not limit the ability of the Committee to take or authorize actions: (i) otherwise expressly contemplated by this Agreement, (ii) reasonably necessary in the event of an emergency for the continued operation of the Joint Venture and its assets as they are operated immediately prior to the event giving rise to the emergency (but taking into account the nature and impact of the emergency); (iii) reasonably necessary to maintain the competitive position of the Joint Venture and its assets so long as such expenditures are not of such disproportionate size or nature as to unreasonably change the nature of the Joint Venture and/or its assets; (iv) in connection with the acquisition of additional gaming positions to the extent allowed by Illinois law, together with any actions reasonably necessary to support such additional gaming positions; or (v) required by the Illinois Gaming Board.

          (h) Without limiting anything contained in this Agreement, the Managing Joint Venture Partner shall not have the unilateral right to effect any further amendments to this Agreement except to the extent required by applicable law or the Illinois Gaming Board.

            The Nevada Group and MGM MIRAGE, a Delaware corporation, shall jointly and severally indemnify, defend and hold the Joint Venture and the Illinois Group, and each officer, director, stockholder, partner, employee, agent, affiliate, subsidiary or assign of the Joint Venture or the Illinois Group (the “Escrow-Related Indemnitees”) free and harmless of, and from and against any expenses, losses, claims, costs, damages and liabilities, including without limitation, judgments, fines, amounts paid in settlement and expenses (including without limitation, attorneys fees and expenses, court costs, investigation costs and litigation costs) incurred by any Escrow-Related Indemnitee arising out of or in connection with (i) any claim, allegation or determination that the transactions contemplated by the Amendment, including, without limitation, the Subject Transactions, are prohibited by law or result or could result in a Loss of License, whether

5

before the Illinois Gaming Board or otherwise, (ii) any claim, allegation or determination that the transactions contemplated by the Amendment, including, without limitation, the Subject Transactions, result in a termination of the Joint Venture for federal or state income tax purposes, which indemnity shall be in accordance with Section 9.4 of this Agreement, as amended by the Amendment, and (iii) any action or omission of the Nevada Group or any equity holder, affiliate, subsidiary or assign of the Nevada Group in respect of the Joint Venture or the Illinois Group during the Interim Period, including any breach of this Joint Venture Agreement. Neither the Escrow Agent, Nevada Group nor any officer, director, stockholder, partner, employee, agent, affiliate, subsidiary or assign of the Nevada Group shall be entitled to indemnification from the Joint Venture (pursuant to Section 7.7 or otherwise) with respect to the matters specified in the immediately proceeding sentence. Notwithstanding the foregoing, the foregoing indemnification is not intended to apply to actions taken by the Managing Joint Venture Partner in connection with the operation of the Joint Venture’s business, which shall be governed solely by Section 7.7.

     If the Interim Period has not terminated within twelve (12) months from the date hereof, then the Illinois Group shall have the right to initiate and conduct, with the reasonable participation of the Nevada Group, an auction for the sale of all Partnership Interests in the Joint Venture and/or all or substantially all of the assets of the Joint Venture to a third party through a nationally recognized “bulge bracket” investment banking firm reasonably acceptable to the Nevada Group (the “Investment Bank”), and to cause the Nevada Group to sell its Partnership Interest in the Joint Venture in such a transaction or sell all or substantially all of the assets of the Joint Venture for the highest and best price obtained in the auction process concurrently with the sale of the Illinois Group’s Partnership Interest or the sale of all or substantially all of the assets of the Joint Venture. The Nevada Group agrees to cooperate (to the extent permitted by law) in the auction process in good faith and accept terms and conditions of the sale which are no less favorable to it than those to which the Illinois Group is subject.

     Immediately upon termination of the Interim Period, subject to the terms of this Agreement and applicable law, the Nevada Group or its transferee pursuant to the Escrow Agreement (subject to the other terms and conditions of this Agreement and the approval of the Illinois Gaming Board and any other applicable governmental authority) shall be restored in all of the power and authority of a Partner hereunder, including without limitation, its right to appoint three (3) members of the Committee pursuant to Section 7.1 of the Agreement.”

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     4. Amendments related to Managing Joint Venture Partner.

          (i) Section 7.1 of the JV Agreement is hereby amended to replace the fifth full paragraph of Section 7.1 (which, for the avoidance of doubt, begins with the words “The Managing Joint Venture Partner will not receive any fees but will receive ...”) with the following:

          “The Managing Joint Venture Partner shall be entitled to receive one percent (1%) of Adjusted Gross Receipts (as defined in the Illinois Riverboat Gambling Act) as a preferred distribution (the “Preferred Distribution”) (which shall be a guaranteed payment under Section 707(c) of the Code), to be made prior to any distributions in accordance with Partnership Percentages, for the exercise of its responsibilities as the Managing Joint Venture Partner. In addition, the Managing Joint Venture Partner shall be entitled to reimbursements for costs and expenses pursuant to Section 7.3 of this Agreement; provided that during the Interim Period, neither the Committee nor the Managing Joint Venture Partner shall have the right to approve the payment by or allocation to the Joint Venture of any salaries, fees, commissions or other compensation whatsoever of any Affiliate of the Managing Joint Venture Partner except to the extent such payment or allocation is consistent with the past practice of the Nevada Group (in its capacity as Managing Joint Venture Partner) and is otherwise on an arms’ length basis.”

          (ii) Section 7.1 of the JV Agreement is hereby amended to replace the sixth full paragraph of Section 7.1 (which, for the avoidance of doubt, begins with the words “In the event that Michael S. Ensign should cease to be either the Chief Operating Officer ...”) with the following:

          “Subject to the terms of this Agreement and applicable law, the Managing Joint Venture Partner shall have the right and authority to cause the Joint Venture to finance or refinance its assets with a third party lender or lenders that are not an Affiliate of either Partner on such commercially reasonable terms as determined in conjunction with an internationally recognized “bulge bracket” investment banking firm selected by the Managing Joint Venture Partner; provided, that any net proceeds of such financing or refinancing available for distribution shall be distributed to the Partners in accordance with the terms of this Agreement.”

     5. Amendments related to Transfers Causing Tax Termination.

          (i) Section 9.4 of the JV Agreement is hereby amended to delete clause (iv) of Section 9.4 in its entirety and to re-number the succeeding clauses of Section 9.4 accordingly.

          (ii) Section 9.4 of the JV Agreement is hereby amended to add a new sentence to the end of Section 9.4 to read as follows:

7

          “In connection with any sale or other transfer of a Partnership Interest, the selling or transferring Partner shall indemnify, defend and hold the Joint Venture and each of the other Partners (including, for this purpose, the Nevada Group), and each officer, director, stockholder, partner, employee, agent, affiliate, subsidiary or assign of the Joint Venture or such other Partner (the “Tax Termination Indemnitees”) free and harmless of, from and against any Tax Loss incurred by any Tax Termination Indemnitee arising out of or in connection with any claim, allegation or determination that such sale or other transfer results in a termination of the Joint Venture for federal or state income tax purposes.”

     6. Amendments related to Buy-Out Provisions.

          (i) Section 8.3 of the JV Agreement is hereby amended to replace the second sentence of Section 8.3 with the following:

          “The closing shall take place at the offices of the Joint Venture on the later of (x) the thirtieth (30th) day after delivery of the Buy-Out Notice or (y) the third (3^rd) day after all consents, approvals and authorizations of any governmental authority (including the Illinois Gaming Board) necessary to complete the buy out shall have been obtained and any applicable waiting period under applicable antitrust laws shall have expired or been terminated.”

          (ii) Section 8.3 of the JV Agreement is hereby amended to add a new sentence after the third sentence of Section 8.3 to read as follows:

          “The Responsible Partner shall be required to make the following representations and warranties to the Non-Responsible Partner at the closing: (i) good title to the Partnership Interest being sold, (ii) the absence of liens or other encumbrances with respect to the Partnership Interest, (iii) the Responsible Partner’s valid existence and good standing, (iv) the authority for, and validity and binding effect of (as against the Responsible Partner), any agreement entered into by the Responsible Partner’s in connection with such sale, and (v) all required material consents to the Responsible Partner’s sale and material governmental approvals having been obtained (excluding any securities laws).”

     7. Amendments Relating to Transfers. Section 9.5 of the JV Agreement is hereby amended by:

          (i) deleting the last sentence of the first paragraph thereof;

          (ii) deleting the clause “and upon admission of the transferee as a new partner” in the third paragraph thereof; and

          (iii) adding the following sentence at the end of Section 9.5:

8

          “Notwithstanding the foregoing, each Partner owning at least a fifty percent (50%) Partnership Interest shall be entitled to elect three (3) members of the Committee.”

     8. Amendments to Exhibits. The JV Agreement is hereby amended to add an Annex 1 to the JV Agreement to read as Annex 1 attached hereto.

     9. Matters related to Escrow Agreement. Without the prior written consent of the Illinois Group, neither the Nevada Group nor the Escrow Agent shall modify, amend or terminate, or waive or release any of its rights under, the Escrow Agreement, unless required by the Illinois Gaming Board. Any successor to the original Escrow Agent shall be subject to the prior written approval of the Illinois Group, which approval shall not be unreasonably withheld or delayed. The Illinois Group, the Nevada Group and the Escrow Agent agree that the terms of the JV Agreement, as amended, shall govern and control the rights and obligations associated with Partnership Interests and the operations of the Joint Venture.

     10. No Other Amendments. Except as specifically amended hereby, the JV Agreement shall continue in full force and effect as written.

     11. Governing Law. This Amendment is made pursuant to and shall be governed by and construed in accordance with the laws of the State of Illinois.

     12. Captions. All article and section headings or captions contained in this Amendment are inserted only as a matter of convenience and for reference and in no way define, limit, extend or describe the scope of this Amendment or the intent of any provision hereof.

     13. Severability. If any provision of this Amendment or application to any party or circumstances shall be determined by any court of competent jurisdiction to be invalid or unenforceable to any extent, the remainder of this Amendment or the application of such provision to such person or circumstances, other than as to which it is so determined invalid or unenforceable shall not be affected thereby, and each provision shall be valid and shall be enforced to the fullest extent permitted by law.

     14. Entire Agreement. The JV Agreement, as amended hereby, contains the entire understanding and agreement of the parties hereto with respect to the subject matter hereof and all prior agreements relative hereto which are not contained herein are terminated. All references in the JV Agreement to “this Agreement”, “hereof”, “hereby” and words of similar import shall refer to the JV Agreement as amended hereby.

     15. Counterparts. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, and all of which, when taken together, shall be deemed one agreement, but no counterpart shall be binding unless an identical counterpart shall have been executed and delivered by each of the other parties hereto.

9

     16. Further Assurances. The parties hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments or documents as any other party may reasonably request in order to carry out the intent and purposes of this Amendment.

     17. Illinois Gaming Laws. All of the provisions of this Amendment are subject to the Illinois Riverboat Gambling Act and the rules and regulations of the Illinois Gaming Board.

     18. Principal Stockholders. The parties acknowledge that neither Tracinda Corporation nor Kirk Kerkorian, individually or collectively, is a party to this Amendment, the JV Agreement or any exhibit or agreement provided for herein or therein. Accordingly, the parties hereby agree that in the event (i) there is any alleged breach or default by any party under this Amendment, the JV Agreement or any exhibit or agreement provided for herein or therein, or (ii) any party has any claim arising from or relating to any such agreement, no party, nor any party claiming through it (to the extent permitted by applicable law), shall commence any proceedings or otherwise seek to impose any liability whatsoever against Tracinda Corporation or Kirk Kerkorian by reason of such alleged breach, default or claim.

[SIGNATURE PAGE FOLLOWS]

10

     IN WITNESS WHEREOF, the parties hereto have duly caused this Amendment to be duly executed as of the day and year first written above.

PARTNERS:
ILLINOIS GROUP
RBG, L.P., an Illinois limited partnership
By:	HCCA CORPORATION, its general partner
By:	/s/ Peter M. Liguori
	Name: Peter M. Liguori
	Its: President
NEVADA GROUP
NEVADA LANDING PARTNERSHIP, an
Illinois general partnership
By:	M.S.E. INVESTMENTS, INCORPORATED, a general partner
By:	/s/ Michael S. Ensign
	Name: Michael S. Ensign
	Its:

LIMITED JOINDER

     WHEREAS, Nevada Landing Partnership, an Illinois general partnership (“Nevada Group”), and RBG, L.P., an Illinois limited partnership (“Illinois Group”), are the Partners of Elgin Riverboat Resort-Riverboat Casino, an Illinois general partnership (the “Joint Venture”):

     WHEREAS, the Joint Venture is governed by that certain Amended and Restated Joint Venture Agreement, made and entered into as of June 25, 2002 (the “JV Agreement”);

     WHEREAS, to induce the Illinois Group to enter into that certain Amendment No. 1 to Amended and Restated Joint Venture Agreement (the “Amendment”), dated as of the date hereof, the undersigned desires to join in the execution and delivery of the JV Agreement, as amended by the Amendment, solely with respect to the provisions set forth in Sections 11.3, 11.5, 11.6, 11.7, 11.8, 11.9, 11.11, 11.13 and 11.14 thereof (the “Applicable Sections”);

     NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the undersigned hereby joins in the execution and delivery of the JV Agreement, as amended by this Amendment, solely with respect to the provisions set forth in the Applicable Sections and agrees to be bound in all respects by the Applicable Sections as if the undersigned were a signatory thereto.

Dated: April 25, 2005	MGM MIRAGE, a Delaware corporation
	By:	/s/ Bryan L. Wright
		Name:	Bryan L. Wright
		Its:	Senior Vice President, Assistant General Counsel

ANNEX 1

Escrow Agreement

[See Attached]

EX-21

EXHIBIT 21

Subsidiaries of MGM MIRAGE

	Jurisdiction of
Subsidiary	Incorporation	Percentage Ownership
Destron, Inc.	Nevada		100	%
MGM MIRAGE International	Nevada		100	%
MGM MIRAGE Marketing, Ltd.	Hong Kong		100	%
M3 Nevada Insurance Company	Nevada		100	%
Metropolitan Marketing, LLC	Nevada		100	%
MMNY Land Company, Inc.	New York		100	%
MGM Grand Atlantic City, Inc.	New Jersey		100	%
MGM Grand Diamond, Inc.	Nevada		100	%
MGM Grand Australia Pty Ltd	Australia		(1	)
Mandalay Resort Group	Nevada		100	%
Circus Circus Casinos, Inc., dba Circus Circus Hotel and Casino-Las Vegas and Circus Circus Hotel and Casino-Reno	Nevada		100	%
Circus Circus Mississippi, Inc., dba Gold Strike Casino Resort	Mississippi		100	%
Circus Circus New Jersey, Inc.	New Jersey		100	%
Colorado Belle Corp., dba Colorado Belle Hotel and Casino	Nevada		100	%
Diamond Gold, Inc.	Nevada		100	%
Edgewater Hotel Corporation, dba Edgewater Hotel and Casino	Nevada		100	%
Galleon, Inc.	Nevada		100	%
Go Vegas	Nevada		100	%
Gold Strike Aviation Incorporated	Nevada		100	%
Revive Partners, LLC	Nevada		100	%
Gold Strike Finance Company, Inc.	Nevada		100	%
Gold Strike Investments, Incorporated (“GSI”)	Nevada		100	%
Last Chances Investments, Incorporated (“LSI”)	Nevada		100	%
M.S.E. Investments, Incorporated (“MSE”)	Nevada		100	%
Gold Strike Fuel Company	Nevada (2)		(3	)
Gold Strike L.V.	Nevada (2)		(4	)
Victoria Partners, dba Monte Carlo Resort and Casino	Nevada (2)		(5	)
Jean Development Company, dba Gold Strike Hotel and Gambling Hall	Nevada (2)		(6	)
Jean Development North	Nevada (2)		(7	)
Jean Development West, dba Nevada Landing Hotel and Casino	Nevada (2)		(8	)
Jean Fuel Company West	Nevada (2)		(9	)
Nevada Landing Partnership	Illinois (2)		(10	)
Railroad Pass Investment Group, dba Railroad Pass Hotel and Casino	Nevada (2)		(11	)
Mandalay Corp., dba Mandalay Bay Resort and Casino and Thehotel	Nevada		100	%
Mandalay Marketing and Events	Nevada		100	%
Mandalay Place	Nevada		100	%
Mandalay Vacation Resorts, Inc.	Nevada		100	%
MBG Insurance, Inc.	Hawaii (insurance)		100	%
MGM Grand Resorts Development	Nevada		100	%
MRG Macau, Inc.	Nevada		100	%
MRG Vegas Portal, Inc.	Nevada		100	%
New Castle Corp., dba Excalibur Hotel and Casino	Nevada		100	%
Oasis Development Company, Inc.	Nevada		100	%
Plane Truth, LLC	Nevada		100	%
Ramparts, Inc., dba Luxor Hotel and Casino	Nevada		100	%
Ramparts International	Nevada		100	%
Ramparts International PTE, LTD	Singapore		100	%

	Jurisdiction of
Subsidiary	Incorporation	Percentage Ownership
Slots-A-Fun, Inc., dba Slots-A-Fun Casino	Nevada		100	%
MGM Grand Resorts, LLC	Nevada		100	%
MGM Grand Detroit, Inc.	Delaware		100	%
MGM Grand Detroit, LLC, dba MGM Grand Detroit	Delaware		(12	)
MGM Grand Detroit II, LLC	Delaware		100	%
MGM Grand Hotel, LLC, dba MGM Grand Hotel & Casino	Nevada		100	%
Grand Laundry, Inc.	Nevada		100	%
MGM Grand Condominiums, LLC	Nevada		100	%
MGM Grand Condominiums II, LLC	Nevada		100	%
MGM Grand Condominiums III, LLC	Nevada		100	%
MGM Grand New York, LLC	Nevada		100	%
New PRMA Las Vegas, Inc.	Nevada		100	%
New York-New York Hotel & Casino, LLC, dba New York-New York Hotel & Casino	Nevada		(13	)
New York-New York Tower, LLC	Nevada		100	%
The Primadonna Company, LLC, dba Buffalo Bill’s Resort & Casino, Primm Valley Resort & Casino and Whiskey Pete’s Hotel & Casino	Nevada		100	%
MGM MIRAGE Advertising, Inc.	Nevada		100	%
MGM MIRAGE Aircraft Holdings, LLC	Nevada		100	%
MGM MIRAGE Development, Inc.	Nevada		100	%
MGM MIRAGE UK Holding Company, Inc.	Nevada		100	%
MGM MIRAGE Development, Ltd.	England and Wales		100	%
MGM Grand Olympia Ltd.	England and Wales		(14	)
MGMM International Holdings, Ltd.	Isle of Man		100	%
MGM MIRAGE Macau, Ltd.	Isle of Man		100	%
MGMM Macau, Ltd.	Isle of Man		100	%
MGM MIRAGE Entertainment and Sports	Nevada		100	%
MGM MIRAGE Macao, LLC	Nevada		100	%
MGM Grand (Macao) Limited	Macau		(15	)
MGM MIRAGE Online, LLC	Nevada		100	%
MGM MIRAGE Online Holdings Guernsey, Limited	Guernsey		100	%
MGM MIRAGE Online Isle of Man, Ltd.	Isle of Man		100	%
MGM MIRAGE Online Services United Kingdom, Ltd.	England and Wales		100	%
MGM MIRAGE Online United Kingdom, Ltd.	England and Wales		100	%
MGM MIRAGE Operations, Inc.	Nevada		100	%
MGM MIRAGE Retail	Nevada		100	%
MGMM Insurance Company	Vermont (insurance)		100	%
Mirage Resorts, Incorporated	Nevada		100	%
AC Holding Corp.	Nevada		100	%
AC Holding Corp. II	Nevada		100	%
The April Cook Companies	Nevada		100	%
Beau Rivage Resorts, Inc., dba Beau Rivage	Mississippi		100	%
Beau Rivage Distribution Corp.	Mississippi		100	%
Bellagio, LLC, dba Bellagio	Nevada		100	%
Bella Lounge, LLC	Nevada		(16	)
Bellagio II, LLC	Nevada		100	%
Light Las Vegas, LLC	Nevada		(17	)
Mist Lounge, LLC	Nevada		(16	)
MRGS Corp.	Nevada		100	%
Boardwalk Casino, Inc.	Nevada		100	%
Bungalow, Inc.	Mississippi		100	%

2

	Jurisdiction of
Subsidiary	Incorporation	Percentage Ownership
Country Star Las Vegas, LLC	Nevada		(18	)
LV Concrete Corp.	Nevada		100	%
MAC, CORP.	New Jersey		100	%
MGM MIRAGE Aviation Corp.	Nevada		100	%
MGM MIRAGE Corporate Services	Nevada		100	%
MGM MIRAGE Design Group	Nevada		100	%
MGM MIRAGE International Hong Kong Limited	Nevada		100	%
MGM MIRAGE Manufacturing Corp.	Nevada		100	%
M.I.R. Travel	Nevada		100	%
THE MIRAGE CASINO-HOTEL, dba The Mirage	Nevada		100	%
MH, INC., dba Shadow Creek	Nevada		100	%
Treasure Island Corp., dba Treasure Island at The Mirage	Nevada		100	%
Mirage Laundry Services Corp.	Nevada		100	%
Mirage Leasing Corp.	Nevada		100	%
Project CC, LLC	Nevada		100	%
Restaurant Ventures of Nevada, Inc.	Nevada		100	%
PRMA, LLC	Nevada		100	%
PRMA Land Development Company, dba Primm Valley Golf Club	Nevada		100	%
VidiAd	Nevada		100	%

(1)	50% of the voting securities are owned by MGM MIRAGE and 50% are owned by MGM Grand Diamond, Inc.
(2)	Entity is a general partnership.
(3)	The partnership interests are owned 16.67% by each of MSE, LSI and GSI and 50% by Oasis Development Company, Inc.
(4)	The partnership interests are owned 52% by MSE, 39% by LSI, 6.5% by GSI and 2.5% by Diamond Gold, Inc.
(5)	The partnership interests are owned 50% by Gold Strike L.V. and 50%by MRGS Corp.
(6)	The partnership interests are owned 40% by MSE, 40% by LSI and 20% by GSI.
(7)	The partnership interests are owned 47.5% by MSE, 38.5% by LSI, 5% by GSI and 9% by Diamond Gold, Inc.
(8)	The partnership interests are owned 40% by MSE, 40% by LSI , 12% by GSI and 8% by Diamond Gold, Inc.
(9)	The partnership interests are owned 40% by MSE, 40% by LSI, 12% by GSI and 8% by Oasis Development Company, Inc.
(10)	The partnership interests are owned 40% by MSE, 40% by LSI, 5% by GSI and 15% by Diamond Gold, Inc.
(11)	The partnership interests are owned 70% by MSE, 20% by LSI and 10% by GSI.
(12)	Approximately 97% of the voting securities are owned by MGM Grand Detroit, Inc. and 3% are owned by unrelated third parties.
(13)	50% of the voting securities are owned by MGM Grand Resorts, LLC and 50% are owned by New PRMA Las Vegas, Inc.
(14)	82.5% of the voting securities are owned by MGM MIRAGE Development, Ltd. and 17.5% are owned by an unrelated third party.
(15)	Approximately 90% of the voting securities are owned by MGM Mirage Macao, LLC and 10% are owned by an unrelated third party.
(16)	53% of the voting securities are owned by Bellagio, LLC and 47% are owned by unrelated third parties.
(17)	Approximately 56% of the voting securities are owned by Bellagio, LLC and 44% are owned by unrelated third parties.
(18)	99% of the voting securities are owned by Mirage Resorts, Incorporated and 1% are owned by Restaurant Ventures of Nevada, Inc.

3

EX-23

EXHIBIT 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statements File Nos. 333-00187, 333-73155, 333-77061, 333-42729, 333-37350, 333-50880, 333-89190 and 333-105964 of our reports dated March 10, 2006, relating to the consolidated financial statements and financial statement schedule of MGM MIRAGE and to management’s report on the effectiveness of internal control over financial reporting, appearing in this Annual Report on Form 10-K of MGM MIRAGE for the year ended December 31, 2005.

/s/ DELOITTE & TOUCHE LLP

Las Vegas, Nevada
March 10, 2006

EX-31.1

EXHIBIT 31.1

CERTIFICATION

I, J. Terrence Lanni, certify that:

1.	I have reviewed this annual report on Form 10-K of MGM MIRAGE;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 15(f) and 15d-15(f)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 13, 2006	/s/ J. Terrence Lanni
	J. Terrence Lanni
	Chairman of the Board and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION

I, James J. Murren, certify that:

1. I have reviewed this annual report on Form 10-K of MGM MIRAGE;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 15(f) and 15d-15(f)) for the registrant and have:

a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors:

a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 13, 2006	/s/ James J. Murren
	James J. Murren
	President, Chief Financial Officer and Treasurer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Annual Report of MGM MIRAGE (the “Company”) on Form 10-K for the period ending December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. Terrence Lanni, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ J. Terrence Lanni

J. Terrence Lanni

Chairman and Chief Executive Officer

March 13, 2006

A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Annual Report of MGM MIRAGE (the “Company”) on Form 10-K for the period ending December 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James J. Murren, President, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ James J. Murren

James J. Murren

President, Chief Financial Officer and Treasurer

March 13, 2006

A signed original of this certification has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99

EXHIBIT 99

DESCRIPTION OF REGULATION AND LICENSING

     The gaming industry is highly regulated, and we must maintain our licenses and pay gaming taxes to continue our operations. Each of our casinos is subject to extensive regulation under the laws, rules and regulations of the jurisdiction where it is located. These laws, rules and regulations generally concern the responsibility, financial stability and character of the owners, managers, and persons with financial interest in the gaming operations. Violations of laws in one jurisdiction could result in disciplinary action in other jurisdictions.

     Our businesses are subject to various federal, state and local laws and regulations in addition to gaming regulations. These laws and regulations include, but are not limited to, restrictions and conditions concerning alcoholic beverages, environmental matters, employees, currency transactions, taxation, zoning and building codes, and marketing and advertising. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our operating results.

   Nevada Government Regulation

     The ownership and operation of our casino gaming facilities in Nevada are subject to the Nevada Gaming Control Act and the regulations promulgated thereunder (collectively, the “Nevada Act”) and various local regulations. Our gaming operations are subject to the licensing and regulatory control of the Nevada Gaming Commission (the “Nevada Commission”), the Nevada State Gaming Control Board (the “Nevada Board”) and various county and city licensing agencies (the “local authorities”). The Nevada Commission, the Nevada Board, and the local authorities are collectively referred to as the “Nevada Gaming Authorities.”

     The laws, regulations and supervisory procedures of the Nevada Gaming Authorities are based upon declarations of public policy that are concerned with, among other things:

• the prevention of unsavory or unsuitable persons from having a direct or indirect involvement with gaming at any time or in any capacity;

• the establishment and maintenance of responsible accounting practices;

• the maintenance of effective controls over the financial practices of licensees, including the establishment of minimum procedures for internal fiscal affairs and the safeguarding of assets and revenues;

• providing reliable record keeping and requiring the filing of periodic reports with the Nevada Gaming Authorities;

• the prevention of cheating and fraudulent practices; and

• providing a source of state and local revenues through taxation and licensing fees.

     Any change in such laws, regulations and procedures could have an adverse effect on our gaming operations.

     Each of our subsidiaries that currently operate casinos in Nevada (the “casino licensees”) is required to be licensed by the Nevada Gaming Authorities. Each gaming license requires the periodic payment of fees and taxes and is not transferable. MGM Grand Hotel, LLC, New York-New York Hotel & Casino, LLC, The Primadonna Company, LLC, Bellagio, LLC, and MGM MIRAGE Manufacturing Corp., are also licensed as manufacturers and distributors of gaming devices (“manufacturer and distributor licensees”). Certain of our subsidiaries have also been licensed or found suitable as shareholders, members, or general partners, as relevant, of the casino licensees and of the manufacturer and distributor licensees. The casino licensees, manufacturer and distributor licensees, and the foregoing subsidiaries are collectively referred to as the “licensed subsidiaries.”

     We, along with Mirage Resorts, Incorporated and Mandalay, are required to be registered by the Nevada Commission as publicly traded corporations (collectively, the “registered corporations”) and as such, each of us is required periodically to submit detailed financial and operating reports to the Nevada Commission and furnish any other information that the Nevada Commission may require. No person may become a stockholder or member of, or receive any percentage of profits from the licensed subsidiaries without first obtaining licenses and approvals from the Nevada Gaming Authorities. Additionally, local authorities have taken the position that they have the authority to approve all persons owning or controlling the stock of any corporation controlling a gaming licensee. The registered corporations and the subsidiaries have obtained from the Nevada Gaming Authorities the various registrations, approvals, permits and licenses required in order to engage in gaming activities in Nevada.

     The Nevada Gaming Authorities may investigate any individual who has a material relationship to, or material involvement with, the registered corporations or any of the licensed subsidiaries to determine whether such individual is suitable or should be licensed as a business associate of a gaming licensee. Officers, directors and certain key employees of the licensed subsidiaries must file applications with the Nevada Gaming Authorities and may be required to be licensed by the Nevada Gaming Authorities. Officers, directors and key employees of the registered corporations who are actively and directly involved in the gaming activities of the licensed subsidiaries may be required to be licensed or found suitable by the Nevada Gaming Authorities. The Nevada Gaming Authorities may deny an application for licensing or a finding of suitability for any cause they deem reasonable. A finding of suitability is comparable to licensing, and both require submission of detailed personal and financial information followed by a thorough investigation. The applicant for licensing or a finding of suitability, or the gaming licensee by which the applicant is employed or for whom the applicant serves, must pay all the costs of the investigation. Changes in licensed positions must be reported to the Nevada Gaming Authorities, and in addition to their authority to deny an application for a finding of suitability or licensure, the Nevada Gaming Authorities have jurisdiction to disapprove a change in a corporate position.

     If the Nevada Gaming Authorities were to find an officer, director or key employee unsuitable for licensing or to continue having a relationship with the registered corporations or the licensed subsidiaries, such company or companies would have to sever all relationships with that person. In addition, the Nevada Commission may require the registered corporations or the licensed subsidiaries to terminate the employment of any person who refuses to file appropriate applications. Determinations of suitability or of questions pertaining to licensing are not subject to judicial review in Nevada.

     The registered corporations and the casino licensees are required to submit detailed financial and operating reports to the Nevada Commission. Substantially all of the registered corporations’ and the licensed subsidiaries’ material loans, leases, sales of securities and similar financing transactions must be reported to or approved by the Nevada Commission.

     If the Nevada Commission determined that we or a licensed subsidiary violated the Nevada Act, it could limit, condition, suspend or revoke, subject to compliance with certain statutory and regulatory procedures, our gaming licenses and those of our licensed subsidiaries. In addition, the registered corporations and the licensed subsidiaries and the persons involved could be subject to substantial fines for each separate violation of the Nevada Act at the discretion of the Nevada Commission. Further, a supervisor could be appointed by the Nevada Commission to operate the gaming establishments and, under certain circumstances, earnings generated during the supervisor’s appointment (except for the reasonable rental value of the gaming establishments) could be forfeited to the State of Nevada. Limitation, conditioning or suspension of any gaming license or the appointment of a supervisor could (and revocation of any gaming license would) materially adversely affect our gaming operations.

     Any beneficial holder of our voting securities, regardless of the number of shares owned, may be required to file an application, be investigated, and have his or her suitability as a beneficial holder of the voting securities determined if the Nevada Commission has reason to believe that such ownership would otherwise be inconsistent with the declared policies of the State of Nevada. The applicant must pay all costs of investigation incurred by the Nevada Gaming Authorities in conducting any such investigation.

     The Nevada Act requires any person who acquires more than 5% of any class of our voting securities to report the acquisition to the Nevada Commission. The Nevada Act requires that beneficial owners of more than 10% of any class of our voting securities apply to the Nevada Commission for a finding of suitability within thirty days after the Chairman of the Nevada Board mails the written notice requiring such filing. Under certain circumstances, an “institutional investor” as defined in the Nevada Act, which acquires more than 10% but not more than 15% of any class of our voting securities, may apply to the Nevada Commission for a waiver of such finding of suitability if such institutional investor holds the voting securities for investment purposes only.

2

     An institutional investor will be deemed to hold voting securities for investment purposes if it acquires and holds the voting securities in the ordinary course of business as an institutional investor and not for the purpose of causing, directly or indirectly, the election of a majority of the members of our board of directors, any change in our corporate charter, bylaws, management, policies or operations or any of our gaming affiliates, or any other action that the Nevada Commission finds to be inconsistent with holding our voting securities for investment purposes only. Activities that are not deemed to be inconsistent with holding voting securities for investment purposes only include:

• voting on all matters voted on by stockholders;

• making financial and other inquiries of management of the type normally made by securities analysts for informational purposes and not to cause a change in its management, policies or operations; and

• such other activities as the Nevada Commission may determine to be consistent with such investment intent.

     If the beneficial holder of voting securities who must be found suitable is a corporation, partnership or trust, it must submit detailed business and financial information including a list of beneficial owners. The applicant is required to pay all costs of investigation.

     Any person who fails or refuses to apply for a finding of suitability or a license within 30 days after being ordered to do so by the Nevada Commission or the Chairman of the Nevada Board may be found unsuitable. The same restrictions apply to a record owner if the record owner, after request, fails to identify the beneficial owner. Any stockholder found unsuitable and who holds, directly or indirectly, any beneficial ownership of our common stock beyond such period of time as may be prescribed by the Nevada Commission may be guilty of a criminal offense. We will be subject to disciplinary action if, after we receive notice that a person is unsuitable to be a stockholder or to have any other relationship with us or a licensed subsidiary, we or any of the licensed subsidiaries:

• pays that person any dividend or interest upon any of our voting securities;

• allows that person to exercise, directly or indirectly, any voting right conferred through securities held by that person,

• pays remuneration in any form to that person for services rendered or otherwise, or

• fails to pursue all lawful efforts to require such unsuitable person to relinquish his or her voting securities including if necessary, the immediate purchase of the voting securities for cash at fair market value.

     The Nevada Commission may, in its discretion, require the holder of any debt security of the registered corporations to file an application, be investigated and be found suitable to hold the debt security. If the Nevada Commission determines that a person is unsuitable to own such security, then pursuant to the Nevada Act, the registered corporation can be sanctioned, including the loss of its approvals, if without the prior approval of the Nevada Commission, it:

• pays to the unsuitable person any dividend, interest, or any distribution whatsoever;

• recognizes any voting right by such unsuitable person in connection with such securities;

• pays the unsuitable person remuneration in any form; or

• makes any payment to the unsuitable person by way of principal, redemption, conversion, exchange, liquidation or similar transaction.

     We are required to maintain a current stock ledger in Nevada that may be examined by the Nevada Gaming Authorities at any time. If any securities are held in trust by an agent or by a nominee, the record holder may be required to disclose the identity of the beneficial owner to the Nevada Gaming Authorities. A failure to make such disclosure may be grounds for finding the record holder unsuitable. We are also required to render maximum assistance in determining the identity of the beneficial owner. The Nevada Commission has the power to require the registered corporations’ stock certificates to bear a legend indicating that such securities are subject to the Nevada Act. However, to date, the Nevada Commission has not imposed such a requirement on the registered corporations.

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     The registered corporations may not make a public offering of any securities without the prior approval of the Nevada Commission if the securities or the proceeds therefrom are intended to be used to construct, acquire or finance gaming facilities in Nevada, or to retire or extend obligations incurred for those purposes or for similar purposes. An approval, if given, does not constitute a finding, recommendation or approval by the Nevada Commission or the Nevada Board as to the accuracy or adequacy of the prospectus or the investment merits of the securities. Any representation to the contrary is unlawful.

     On July 28, 2005, the Nevada Commission granted the registered corporations prior approval to make public offerings for a period of two years, subject to certain conditions (the “shelf approval”). The shelf approval also includes approval for the registered corporations to place restrictions on the transfer of any equity security issued by the licensed subsidiaries and to enter into agreements not to encumber such securities, pursuant to any public offering made under the shelf approval. However, the shelf approval may be rescinded for good cause without prior notice upon the issuance of an interlocutory stop order by the Chairman of the Nevada Board. The shelf approval does not constitute a finding, recommendation or approval by the Nevada Commission or the Nevada Board as to the accuracy or adequacy of the prospectus or other disclosure document by which securities are offered or the investment merits of the securities offered. Any representation to the contrary is unlawful.

     Changes in control of the registered corporations through merger, consolidation, stock or asset acquisitions, management or consulting agreements, or any act or conduct by a person whereby he or she obtains control, may not occur without the prior approval of the Nevada Commission. Entities seeking to acquire control of a registered corporation must satisfy the Nevada Board and the Nevada Commission concerning a variety of stringent standards prior to assuming control of the registered corporation. The Nevada Commission may also require controlling stockholders, officers, directors and other persons having a material relationship or involvement with the entity proposing to acquire control to be investigated and licensed as part of the approval process relating to the transaction.

     The Nevada legislature has declared that some corporate acquisitions opposed by management, repurchases of voting securities and corporate defensive tactics affecting Nevada gaming licensees, and registered corporations that are affiliated with those operations, may be injurious to stable and productive corporate gaming. The Nevada Commission has established a regulatory scheme to ameliorate the potentially adverse effects of these business practices upon Nevada’s gaming industry and to further Nevada’s policy to:

• assure the financial stability of corporate gaming operators and their affiliates;

• preserve the beneficial aspects of conducting business in the corporate form; and

• promote a neutral environment for the orderly governance of corporate affairs.

     Approvals are, in certain circumstances, required from the Nevada Commission before we can make exceptional repurchases of voting securities above the current market price and before a corporate acquisition opposed by management can be consummated. The Nevada Act also requires prior approval of a plan of recapitalization proposed by a registered corporation’s board of directors in response to a tender offer made directly to the registered corporation’s stockholders for the purpose of acquiring control of that corporation.

     License fees and taxes, computed in various ways depending on the type of gaming or activity involved, are payable to the State of Nevada and to local authorities. Depending upon the particular fee or tax involved, these fees and taxes are payable either monthly, quarterly or annually and are based upon either:

• a percentage of the gross revenues received;

• the number of gaming devices operated; or

• the number of table games operated.

     The tax on gross revenues received is generally 6.75%. A live entertainment tax is also paid on charges for admission to any facility where certain forms of live entertainment are provided. The manufacturer and distributor licensees also pay certain fees and taxes to the State of Nevada.

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     Because we are involved in gaming ventures outside of Nevada, we are required to deposit with the Nevada Board, and thereafter maintain, a revolving fund in the amount of $10,000 to pay the expenses of investigation by the Nevada Board of our participation in such foreign gaming. The revolving fund is subject to increase or decrease at the discretion of the Nevada Commission. Thereafter, we are also required to comply with certain reporting requirements imposed by the Nevada Act. We would be subject to disciplinary action by the Nevada Commission if we:

• knowingly violate any laws of the foreign jurisdiction pertaining to the foreign gaming operation,;

• fail to conduct the foreign gaming operation in accordance with the standards of honesty and integrity required of Nevada gaming operations;

• engage in any activity or enter into any association that is unsuitable because it poses an unreasonable threat to the control of gaming in Nevada, reflects or tends to reflect discredit or disrepute upon the State of Nevada or gaming in Nevada, or is contrary to the gaming policies of Nevada;

• engage in any activity or enter into any association that interferes with the ability of the State of Nevada to collect gaming taxes and fees; or

• employ, contract with or associate with any person in the foreign gaming operation who has been denied a license or a finding of suitability in Nevada on the ground of personal unsuitability, or who has been found guilty of cheating at gambling.

     The sale of alcoholic beverages by the licensed subsidiaries is subject to licensing, control and regulation by the applicable local authorities. All licenses are revocable and are not transferable. The agencies involved have full power to limit, condition, suspend or revoke any such license, and any such disciplinary action could (and revocation would) have a material adverse effect upon the Company’s operations.

     Pursuant to a 1985 agreement with the United States Department of the Treasury (the “Treasury”) and provisions of the Money Laundering Suppression Act of 1994, the Nevada Commission and the Nevada Board have authority, under Regulation 6A of the Nevada Act, to enforce their own cash transaction reporting laws applicable to casinos which substantially parallel the federal Bank Secrecy Act. Under the Nevada Act, the licensed subsidiaries are required to monitor receipts and disbursements of currency related to cash purchases of chips, cash wagers, cash deposits or cash payment of gaming debts in excess of $10,000 in a 24-hour period, and file reports of such transactions with the United States Internal Revenue Service. The licensed subsidiaries are required to file suspicious activity reports with the Treasury and provide copies thereof to the Nevada Board, and are also required to meet the reporting and record keeping requirements of Treasury regulations amended by the USA PATRIOT Act of 2001.

   Michigan Government Regulation and Taxation

     The Michigan Gaming Control and Revenue Act (the “Michigan Act”) subjects the owners and operators of casino gaming facilities to extensive state licensing and regulatory requirements. The Michigan Act also authorizes local regulation of casino gaming facilities by the City of Detroit, provided that any such local ordinances regulating casino gaming are consistent with the Michigan Act and rules promulgated to implement it. We are subject to the Michigan Act through our ownership interest in MGM Grand Detroit, LLC (the “licensed subsidiary”) which operates MGM Grand Detroit. Our ownership interest in MGM Grand Detroit, LLC is held by our wholly-owned subsidiary MGM Grand Detroit, Inc.

     The Michigan Act creates the Michigan Gaming Control Board (the “Michigan Board”) and authorizes it to grant casino licenses to not more than three applicants who have entered into development agreements with the City of Detroit. The Michigan Board is granted extensive authority to conduct background investigations and determine the suitability of casino license applicants, affiliated companies, officers, directors, or managerial employees of applicants and affiliated companies and persons or entities holding a one percent or greater direct or indirect interest in an applicant or affiliated company. Institutional investors holding less than certain specified amounts of our debt or equity securities are exempted from meeting the suitability requirements of the Michigan Act since we are a publicly traded corporation, and provided that the securities were purchased for investment purposes only and not for the purpose of influencing or affecting our affairs. Any person who supplies goods or services to the licensed subsidiary which are directly related to, used in connection with, or affecting gaming, and any person who supplies other goods or services to the licensed subsidiary on a regular and continuing basis, must obtain a supplier’s license from the Michigan Board. In addition, any individual employed by the licensed subsidiary or by a supplier licensee whose work duties are related to or involved in the gaming operation or are performed in a restricted area or a gaming area of the licensed subsidiary must obtain an occupational license from the Michigan Board.

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     The Michigan Act imposes the burden of proof on the applicant for a casino license to establish its suitability to receive and hold the license. The applicant must establish its suitability as to integrity, moral character and reputation, business probity, financial ability and experience, responsibility, and other criteria deemed appropriate by the Michigan Board. A casino license is valid for a period of one year and the Michigan Board may refuse to renew it upon a determination that the licensee no longer meets the requirements for licensure.

     The Michigan Board may, among other things, revoke, suspend or restrict the licensed subsidiary’s casino license. The licensed subsidiary is also subject to fines or forfeiture of assets for violations of gaming or liquor control laws or rules. In the event that the licensed subsidiary’s license is revoked or suspended for more than 120 days, the Michigan Act provides for the appointment of a conservator who, among other things, is required to preserve the assets to ensure that they shall continue to be operated in a sound and businesslike manner, or upon order of the Michigan Board, to sell or otherwise transfer the assets to another person or entity who meets the requirements of the Michigan Act for licensure, subject to certain approvals and consultations.

     The Michigan Board has adopted administrative rules to implement the terms of the Michigan Act. Among other things, the rules impose more detailed substantive and procedural requirements with respect to casino licensing and operations. Included are requirements regarding such things as licensing investigations and hearings, record keeping and retention, contracting, reports to the Michigan Board, internal control and accounting procedures, security and surveillance, extensions of credit to gaming patrons, conduct of gaming, and transfers of ownership interests in licensed casinos. The rules also establish numerous Michigan Board procedures regarding licensing, disciplinary and other hearings, and similar matters. The rules have the force of law and are binding on the Michigan Board as well as on applicants for or holders of casino licenses.

     The Michigan Liquor Control Commission licenses, controls and regulates the sale of alcoholic beverages by the licensed subsidiary pursuant to the Michigan Liquor Control Code of 1998. The Michigan Act also requires that the licensed subsidiary sell in a manner consistent with the Michigan Liquor Control Code.

     The Detroit City Council enacted an ordinance entitled “Casino Gaming Authorization and Casino Development Agreement Certification and Compliance.” The ordinance authorizes casino gaming only by operators who are licensed by the Michigan Board and are parties to a development agreement which has been approved and certified by the City Council and is currently in effect, or are acting on behalf of such parties. The development agreement among the City of Detroit, MGM Grand Detroit, LLC and the Economic Development Corporation of the City of Detroit has been so approved and certified and is currently in effect. Under the ordinance, the licensed subsidiary is required to submit to the Mayor of Detroit and to the City Council periodic reports regarding its compliance with the development agreement or, in the event of non-compliance, reasons for non-compliance and an explanation of efforts to comply. The ordinance requires the Mayor of Detroit to monitor each casino operator’s compliance with its development agreement, to take appropriate enforcement action in the event of default and to notify the City Council of defaults and enforcement action taken; and, if a development agreement is terminated, it requires the City Council to transmit notice of such action to the Michigan Board within five business days along with Detroit’s request that the Michigan Board revoke the relevant operator’s certificate of suitability or casino license. If a development agreement is terminated, the Michigan Act requires the Michigan Board to revoke the relevant operator’s casino license upon the request of Detroit.

     The administrative rules of the Michigan Board prohibit the licensed subsidiary or us from entering into a debt transaction affecting the capitalization or financial viability of MGM Grand Detroit without prior approval from the Michigan Board. On October 14, 2003, the Michigan Board authorized the licensed subsidiary to borrow under our credit facilities for the purpose of financing the development of its permanent casino and the future expansion thereof, maintenance capital expenditures for its temporary and permanent casinos and the cost of renovating the temporary casino facility for adaptive re-use and/or sale following the completion of the permanent casino, and to secure such borrowings with liens upon substantially all of its assets. In the same order, the Michigan Board authorized MGM Grand Detroit, Inc. to pledge its equity interest in MGM Grand Detroit, LLC to secure such borrowings.

     The Michigan Act effectively provides for a wagering tax equal to 24% of adjusted gross receipts (up from 18% prior to September 1, 2004 and subject to adjustment as described below), which tax is shared between Michigan and Detroit, an annual municipal service fee equal to the greater of $4 million or 1.25% of adjusted gross receipts to be paid to Detroit to defray its cost of hosting casinos, and an annual assessment, as adjusted annually based upon a consumer price index, in the initial amount of approximately $8.3 million to be paid to Michigan to defray its regulatory enforcement and other casino-related costs. These payments are in addition to the taxes, fees and assessments customarily paid by business entities situated in Detroit. The development agreement also obligates the licensed subsidiary to pay $34 million to Detroit and $10 million to Detroit’s Minority Business Development Fund, both of which payments have been made. From and after January 1,

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2006, the licensed subsidiary is also obligated to pay 1% of its adjusted gross receipts to Detroit, to be increased to 2% of its adjusted gross receipts in any calendar year in which adjusted gross receipts exceed $400 million. Once the licensed subsidiary has operated a permanent casino complex for 30 consecutive days and is determined to be in compliance with its development agreement with Detroit, the wagering tax rate effective under the Michigan Act will be reduced from 24% to 19%. However, if the licensed subsidiary does not commence such operations by July 1, 2009, the rate will increase annually on a graduated basis to a maximum of 27% until such operations have commenced.

     The Michigan Act provides that an entity holding more than a 10% ownership interest in one Michigan casino licensee is ineligible for licensure if it holds more than a 10% ownership interest in a second Michigan casino licensee. Therefore, upon consummation of our merger with Mandalay Resort Group, we disposed of our indirect ownership interest in Detroit Entertainment, L.L.C. (Motor City Casino) in accordance with the Michigan Act and Michigan Rules.

   Mississippi Government Regulation

     We conduct our Mississippi gaming operations through two indirect subsidiaries, Beau Rivage Resorts, Inc., which owns and operates Beau Rivage in Biloxi, Mississippi, and Circus Circus Mississippi, Inc., which owns and operates the Gold Strike Casino in Tunica County, Mississippi (collectively, the “casino licensees”). Beau Rivage Distribution Corp. (the “distribution licensee”), a wholly-owned subsidiary of Beau Rivage Resorts, Inc., is licensed as a Mississippi distributor of gaming devices. Collectively, the casino licensee and distributor licensee are referred to as the “licensed subsidiaries.” The ownership and operation of casino facilities in Mississippi are subject to extensive state and local regulation, but primarily the licensing and regulatory control of the Mississippi Gaming Commission and the Mississippi State Tax Commission.

     The Mississippi Gaming Control Act (the “Mississippi Act”), legalized casino gaming in Mississippi. Although not identical, the Mississippi Act is similar to the Nevada Gaming Control Act. The Mississippi Gaming Commission adopted regulations in furtherance of the Mississippi Act which are also similar in many respects to the Nevada gaming regulations. The laws, regulations and supervisory procedures of Mississippi and the Mississippi Gaming Commission seek to:

• prevent unsavory or unsuitable persons from having any direct or indirect involvement with gaming at any time or in any capacity;

• establish and maintain responsible accounting practices and procedures;

• maintain effective control over the financial practices of licensees, including establishing minimum procedures for internal fiscal affairs and safeguarding of assets and revenues, providing reliable record keeping and making periodic reports to the Mississippi Gaming Commission;

• prevent cheating and fraudulent practices;

• provide a source of state and local revenues through taxation and licensing fees; and

• ensure that gaming licensees, to the extent practicable, employ Mississippi residents.

     The regulations are subject to amendment and interpretation by the Mississippi Gaming Commission. Changes in Mississippi law or the regulations or the Mississippi Gaming Commission’s interpretations thereof may limit or otherwise materially affect the types of gaming that may be conducted, and could have a material adverse effect on us and our Mississippi gaming operations.

     The Mississippi Act provides for legalized gaming at the discretion of the 14 counties that either border the Gulf Coast or the Mississippi River, but only if the voters in such counties have not voted to prohibit gaming in that county. As of January 1, 2006, gaming was permissible in nine of the 14 eligible counties in the state and gaming operations had commenced in Adams, Coahoma, Hancock, Harrison, Tunica, Warren and Washington counties. Prior to Hurricane Katrina, Mississippi law required that gaming vessels be located on the Mississippi River or on navigable waters in eligible counties along the Mississippi River, or in the waters of the State of Mississippi lying south of the state in eligible counties along the Mississippi Gulf Coast. Subsequent to Hurricane Katrina, on October 17, 2005, changes to the law became effective which allowed gaming facilities to be constructed on land in the three Gulf Coast Counties, provided that no portion of the gaming facilities is located more than 800 feet from the mean high water line of the Mississippi Sound or designated bays on the Sound. The 800-foot limit does not apply to non-gaming facilities. The law permits unlimited stakes gaming on permanently moored dockside vessels or in land-based facilities on a 24-hour basis and does not restrict the percentage of space which may be utilized for gaming. There are no limitations on the number of gaming licenses which may be issued in Mississippi. The legal age for gaming in Mississippi is 21.

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     The licensed subsidiaries are subject to the licensing and regulatory control of the Mississippi Gaming Commission. Gaming licenses require the periodic payment of fees and taxes and are not transferable. Gaming licenses are issued for a maximum term of three years and must be renewed periodically thereafter. The current licenses of Beau Rivage Resorts, Inc. and Beau Rivage Distribution Corp. are effective through June 22, 2006. The current license of Circus Circus Mississippi, Inc. is effective through August 21, 2006.

     We are registered by the Mississippi Gaming Commission under the Mississippi Act as a publicly traded holding company of the licensed subsidiaries. As a registered publicly traded corporation, we are subject to the licensing and regulatory control of the Mississippi Gaming Commission, and are required to periodically submit detailed financial, operating and other reports to the Mississippi Gaming Commission and furnish any other information which the Mississippi Gaming Commission may require. If we are unable to satisfy the registration requirements of the Mississippi Act, we and our licensed subsidiaries cannot own or operate gaming facilities in Mississippi. The licensed subsidiaries are also required to periodically submit detailed financial, operating and other reports to the Mississippi Gaming Commission and the Mississippi State Tax Commission and to furnish any other information required thereby. No person may become a stockholder of or receive any percentage of profits from the licensed subsidiaries without first obtaining licenses and approvals from the Mississippi Gaming Commission.

     Certain of our officers, directors and employees must be found suitable or be licensed by the Mississippi Gaming Commission. We believe that we have applied for all necessary findings of suitability with respect to these persons, although the Mississippi Gaming Commission, in its discretion, may require additional persons to file applications for findings of suitability. In addition, any person having a material relationship or involvement with us may be required to be found suitable, in which case those persons must pay the costs and fees associated with the investigation. A finding of suitability requires submission of detailed personal and financial information followed by a thorough investigation. There can be no assurance that a person who is subject to a finding of suitability will be found suitable by the Mississippi Gaming Commission. The Mississippi Gaming Commission may deny an application for a finding of suitability for any cause that it deems reasonable. Findings of suitability must be periodically renewed.

     Changes in certain licensed positions must be reported to the Mississippi Gaming Commission. In addition to its authority to deny an application for a finding of suitability, the Mississippi Gaming Commission has jurisdiction to disapprove a change in a licensed position. The Mississippi Gaming Commission has the power to require us to suspend or dismiss officers, directors and other key employees or sever relationships with other persons who refuse to file appropriate applications or whom the authorities find unsuitable to act in their capacities.

     Employees associated with gaming must obtain work permits that are subject to immediate suspension. The Mississippi Gaming Commission will refuse to issue a work permit to a person convicted of a felony and it may refuse to issue a work permit to a gaming employee if the employee has committed various misdemeanors or knowingly violated the Mississippi Act or for any other reasonable cause.

     At any time, the Mississippi Gaming Commission has the power to investigate and require a finding of suitability of any of our record or beneficial stockholders, regardless of the percentage of ownership. Mississippi law requires any person who acquires more than 5% of our voting securities to report the acquisition to the Mississippi Gaming Commission, and that person may be required to be found suitable. Also, any person who becomes a beneficial owner of more than 10% of our voting securities, as reported to the Mississippi Gaming Commission, must apply for a finding of suitability by the Mississippi Gaming Commission. An applicant for finding of suitability must pay the costs and fees that the Mississippi Gaming Commission incurs in conducting the investigation. The Mississippi Gaming Commission has generally exercised its discretion to require a finding of suitability of any beneficial owner of more than 5% of a registered public or private company’s voting securities. However, the Mississippi Gaming Commission has adopted a regulation that permits certain institutional investors to own beneficially up to 15% and, under certain circumstances, up to 19%, of a registered or licensed company’s voting securities without a finding of suitability.

     Under the regulations, an “institutional investor,” as defined therein, may apply to the Executive Director of the Mississippi Gaming Commission for a waiver of a finding of suitability if such institutional investor (i) beneficially owns up to 15% (or, in certain circumstances, up to 19%) of the voting securities of a registered or licensed company, and (ii) holds the voting securities for investment purposes only. An institutional investor shall not be deemed to hold voting securities for investment purposes unless the voting securities were acquired and are held in the ordinary course of business as an institutional investor and not for the purpose of causing, directly or indirectly, the election of a majority of the members of the board of directors of the registered or licensed company, any change in the registered or licensed company’s corporate charter, bylaws, management, policies or operations of the registered public or private company or any of its gaming affiliates, or any other action which the Mississippi Gaming Commission finds to be inconsistent with holding the registered or licensed company’s voting securities for investment purposes only.

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     Activities that are not deemed to be inconsistent with holding voting securities for investment purposes only include:

• voting, directly or indirectly through the delivery of a proxy furnished by the board of directors, on all matters voted upon by the holders of such voting securities;

• serving as a member of any committee of creditors or security holders formed in connection with a debt restructuring;

• nominating any candidate for election or appointment to the board of directors in connection with a debt restructuring;

• accepting appointment or election (or having a representative accept appointment or election) as a member of the board of directors in connection with a debt restructuring and serving in that capacity until the conclusion of the member’s term;

• making financial and other inquiries of management of the type normally made by securities analysts for informational purposes and not to cause a change in management, policies or operations; and

• such other activities as the Mississippi Gaming Commission may determine to be consistent with such investment intent.

     If a stockholder who must be found suitable is a corporation, partnership or trust, it must submit detailed business and financial information including a list of beneficial owners. The Mississippi Gaming Commission may at any time dissolve, suspend, condition, limit or restrict a finding of suitability to own a registered public company’s equity interests for any cause it deems reasonable.

     We may be required to disclose to the Mississippi Gaming Commission upon request the identities of the holders of any of our debt or other securities. In addition, under the Mississippi Act, the Mississippi Gaming Commission may, in its discretion, require holders of our debt securities to file applications, investigate the holders, and require the holders to be found suitable to own the debt securities.

     Although the Mississippi Gaming Commission generally does not require the individual holders of obligations such as notes to be investigated and found suitable, the Mississippi Gaming Commission retains the discretion to do so for any reason, including but not limited to a default, or where the holder of the debt instrument exercises a material influence over the gaming operations of the entity in question. Any holder of debt securities required to apply for a finding of suitability must pay all investigative fees and costs of the Mississippi Gaming Commission in connection with the investigation.

     Any person who fails or refuses to apply for a finding of suitability or a license within 30 days after being ordered to do so by the Mississippi Gaming Commission may be found unsuitable. Any person found unsuitable and who holds, directly or indirectly, any beneficial ownership of our securities beyond the time that the Mississippi Gaming Commission prescribes, may be guilty of a misdemeanor. We will be subject to disciplinary action if, after receiving notice that a person is unsuitable to be a stockholder, a holder of our debt securities or to have any other relationship with us, we:

• pay the unsuitable person any dividend, interest or other distribution whatsoever;

• recognize the exercise, directly or indirectly, of any voting rights conferred through such securities held by the unsuitable person;

• pay the unsuitable person any remuneration in any form for services rendered or otherwise, except in limited and specific circumstances;

• make any payment to the unsuitable person by way of principal, redemption, conversion, exchange, liquidation or similar transaction; or

• fail to pursue all lawful efforts to require the unsuitable person to divest himself or herself of the securities, including, if necessary, the immediate purchase of the securities for cash at a fair market value.

     The licensed subsidiaries must maintain in Mississippi a current ledger with respect to the ownership of their equity securities and we must maintain in Mississippi a current list of our stockholders which must reflect the record ownership of each outstanding share of any equity security issued by us. The ledger and stockholder lists must be available for inspection by the Mississippi Gaming Commission at any time. If any of our securities are held in trust by an agent or by a nominee, the record holder may be required to disclose the identity of the beneficial owner to the Mississippi Gaming Commission. A failure to make that disclosure may be grounds for finding the record holder unsuitable. We must also render maximum assistance in determining the identity of the beneficial owner.

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     The Mississippi Act requires that the certificates representing securities of a registered publicly traded corporation bear a legend to the general effect that the securities are subject to the Mississippi Act and the regulations of the Mississippi Gaming Commission. On May 18, 2000, the Mississippi Gaming Commission granted us a waiver of this legend requirement. The Mississippi Gaming Commission has the power to impose additional restrictions on us and the holders of our securities at any time.

     Substantially all loans, leases, sales of securities and similar financing transactions by the licensed subsidiaries must be reported to or approved by the Mississippi Gaming Commission. The licensed subsidiaries may not make a public offering of their securities, but may pledge or mortgage casino facilities if it obtains the prior approval of the Mississippi Gaming Commission. We may not make a public offering of our securities without the prior approval of the Mississippi Gaming Commission if any part of the proceeds of the offering is to be used to finance the construction, acquisition or operation of gaming facilities in Mississippi or to retire or extend obligations incurred for those purposes. The approval, if given, does not constitute a recommendation or approval of the accuracy or adequacy of the prospectus or the investment merits of the securities subject to the offering. On September 29, 2005, the Mississippi Gaming Commission granted us a waiver of the prior approval requirement for our securities offerings for a period of two years, subject to certain conditions. The waiver may be rescinded for good cause without prior notice upon the issuance of an interlocutory stop order by the Executive Director of the Mississippi Gaming Commission.

     Under the regulations of the Mississippi Gaming Commission, the licensed subsidiaries may not guarantee a security issued by us pursuant to a public offering, or pledge their assets to secure payment or performance of the obligations evidenced by such a security issued by us, without the prior approval of the Mississippi Gaming Commission. Similarly, we may not pledge the stock or other ownership interests of the licensed subsidiaries, nor may the pledgee of such ownership interests foreclose on such a pledge, without the prior approval of the Mississippi Gaming Commission. Moreover, restrictions on the transfer of an equity security issued by us and agreements not to encumber such securities granted by us are ineffective without the prior approval of the Mississippi Gaming Commission. The waiver of the prior approval requirement for our securities offerings received from the Mississippi Gaming Commission on September 29, 2005 includes a waiver of the prior approval requirement for such guarantees, pledges and restrictions of the licensed subsidiaries, subject to certain conditions.

     We cannot change our control through merger, consolidation, acquisition of assets, management or consulting agreements or any form of takeover without the prior approval of the Mississippi Gaming Commission. The Mississippi Gaming Commission may also require controlling stockholders, officers, directors, and other persons having a material relationship or involvement with the entity proposing to acquire control, to be investigated and licensed as part of the approval process relating to the transaction.

     The Mississippi Legislature has declared that some corporate acquisitions opposed by management, repurchases of voting securities and other corporate defensive tactics that affect corporate gaming licensees in Mississippi and corporations whose stock is publicly traded that are affiliated with those licensees may be injurious to stable and productive corporate gaming. The Mississippi Gaming Commission has established a regulatory scheme to ameliorate the potentially adverse effects of these business practices upon Mississippi’s gaming industry and to further Mississippi’s policy to assure the financial stability of corporate gaming operators and their affiliates, preserve the beneficial aspects of conducting business in the corporate form, and promote a neutral environment for the orderly governance of corporate affairs.

     We may be required to obtain approval from the Mississippi Gaming Commission before we may make exceptional repurchases of voting securities in excess of the current market price of its common stock (commonly called “greenmail”) or before we may consummate a corporate acquisition opposed by management. The regulations also require prior approval by the Mississippi Gaming Commission if we adopt a plan of recapitalization proposed by our Board of Directors opposing a tender offer made directly to the stockholders for the purpose of acquiring control of us.

     Neither we nor the casino licensees may engage in gaming activities in Mississippi while we, the casino licensees and/or persons found suitable to be associated with the gaming license of the casino licensees conduct gaming operations outside of Mississippi without approval of the Mississippi Gaming Commission. The Mississippi Gaming Commission may require that it have access to information concerning our, and our affiliates’, out-of-state gaming operations. Our gaming operations in Nevada were approved when the casino licensee was first licensed in Mississippi. We have received waivers of foreign gaming approval from the Mississippi Gaming Commission for the conduct of active or planned gaming operations in Illinois, Michigan, New Jersey, California, New York, the United Kingdom and Macau, and for cruises with Royal Caribbean Cruise Lines or Carnival Cruise Lines which originate from the United States or British Columbia, Canada, and may be required to obtain the approval or a waiver of such approval from the Mississippi Gaming Commission before engaging in any additional future gaming operations outside of Mississippi.

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     If the Mississippi Gaming Commission decides that the licensed subsidiaries violated a gaming law or regulation, the Mississippi Gaming Commission could limit, condition, suspend or revoke the license of the subsidiary. In addition, we, the licensed subsidiaries and the persons involved could be subject to substantial fines for each separate violation. A violation under any of our other operating subsidiaries’ gaming licenses may be deemed a violation of the casino licensees’ gaming license. Because of a violation, the Mississippi Gaming Commission could attempt to appoint a supervisor to operate the casino facilities. Limitation, conditioning or suspension of the casino licensees’ gaming license or our registration as a publicly traded holding company, or the appointment of a supervisor could, and the revocation of any gaming license or registration would, materially adversely affect our Mississippi gaming operations.

     The licensed subsidiaries must pay license fees and taxes, computed in various ways depending on the type of gaming involved, to the State of Mississippi and to the county or city in which the licensed gaming subsidiary conducts operations. Depending upon the particular fee or tax involved, these fees and taxes are payable either monthly, quarterly or annually and are based upon a percentage of gross gaming revenues, the number of slot machines operated by the casino, and the number of table games operated by the casino.

     The license fee payable to the State of Mississippi is based upon “gross revenues,” generally defined as cash receipts less cash payouts to customers as winnings, and generally equals 8% of gross revenue. These license fees are allowed as a credit against our Mississippi income tax liability for the year paid. The gross revenue fee imposed by the Mississippi cities and counties in which casino operations are located is in addition to the fees payable to the State of Mississippi and equals approximately 4% of gross revenue.

     The Mississippi Gaming Commission adopted a regulation in 1994 requiring as a condition of licensure or license renewal that a gaming establishment’s plan include a 500-car parking facility in close proximity to the casino complex and infrastructure facilities which will amount to at least 25% of the casino cost. Infrastructure facilities are defined in the regulation to include a hotel with at least 250 rooms, theme park, golf course and other similar facilities. Beau Rivage and Gold Strike Tunica are in compliance with this requirement. On January 21, 1999, the Mississippi Gaming Commission adopted an amendment to this regulation which increased the infrastructure requirement to 100% from the existing 25%; however, the regulation grandfathers existing licensees and applies only to new casino projects and casinos that are not operating at the time of acquisition or purchase, and would therefore not apply to Beau Rivage and Gold Strike Tunica. In any event, Beau Rivage and Gold Strike Tunica would comply with such requirement.

     Both the local jurisdiction and the Alcoholic Beverage Control Division of the Mississippi State Tax Commission license, control and regulate the sale of alcoholic beverages by the casino licensees. Beau Rivage and Gold Strike Tunica are in areas designated as special resort areas, which allows casinos located therein to serve alcoholic beverages on a 24-hour basis. The Alcoholic Beverage Control Division requires that our key officers and managers and the casino licensees’ key officers and managers and all owners of more than 5% of the casino licensees’ equity submit detailed personal, and in some instances, financial information to the Alcoholic Beverage Control Division and be investigated and licensed. All such licenses are non-transferable. The Alcohol Beverage Control Division has the full power to limit, condition, suspend or revoke any license for the service of alcoholic beverages or to place a licensee on probation with or without conditions. Any disciplinary action could, and revocation would, have a material adverse effect upon the casino’s operations.

   New Jersey Government Regulation

     Our ownership and operation of hotel-casino facilities and gaming activities in Atlantic City, New Jersey is subject to extensive state regulation under the New Jersey Casino Control Act and the regulations of the New Jersey Casino Control Commission and other applicable laws. The New Jersey Act also established the New Jersey Division of Gaming Enforcement to investigate all license applications, enforce the provisions of the New Jersey Act and regulations and prosecute all proceedings for violations of the New Jersey Act and regulations before the New Jersey Commission. In order to own or operate a hotel-casino property in New Jersey, we must obtain a license or other approvals from the New Jersey Commission and obtain numerous other licenses, permits and approvals from other state as well as local governmental authorities.

     The New Jersey Commission has broad discretion regarding the issuance, renewal, revocation and suspension of casino licenses. The New Jersey Act and regulations concern primarily the good character, honesty, integrity and financial stability of casino licensees, their intermediary and holding companies, their employees, their security holders and others financially interested in casino operations; financial and accounting practices used in connection with casino operations; rules of games, levels of supervision of games and methods of selling and redeeming chips; manner of granting credit, duration of credit and enforceability of gaming debts; and distribution of alcoholic beverages.

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     On June 11, 2003, the New Jersey Commission issued a casino license to Borgata Hotel Casino & Spa (the “casino licensee”) and found us and certain of our wholly-owned subsidiaries, and their then officers, directors, and 5% or greater shareholders suitable. In June 2005, the casino license of Borgata was renewed for a term ending on June 30, 2010.

     The New Jersey act provides that certain beneficial owners of the securities issued by the casino licensee or any of its intermediary or holding companies be qualified by the New Jersey Commission, including those persons who, in the opinion of the New Jersey Commission:

• have the ability to control the casino licensee or its intermediary or holding companies;

• elect a majority of the board of directors of such companies;

• lenders and underwriters of such companies, other than a banking or other licensed lending institution which makes a loan or holds a mortgage or other lien acquired in the ordinary course of business.

     However, with respect to a holding company such as us, a waiver of qualification may be granted by the New Jersey Commission, with the concurrence of the Director of the New Jersey Division, if the New Jersey Commission determines that such persons or entities are not significantly involved in the activities of a casino licensee and in the case of security holders, do not have the ability to control us or elect one or more of our directors. There exists a rebuttable presumption that any person holding 5% or more of the equity securities of a casino licensee’s intermediary or holding company or a person having the ability to elect one or more of the directors of such a company has the ability to control the company and thus must obtain qualification from the New Jersey Commission.

     Notwithstanding this presumption of control, the New Jersey Act provides for a waiver of qualification for passive “institutional investors,” as defined by the New Jersey Act, if the institutional investor purchased publicly traded securities for investment purposes only and where such securities constitute less than 10% of the equity securities of a casino licensee’s holding or intermediary company or debt securities of a casino licensee’s holding or intermediary company representing a percentage of the outstanding debt of such company not exceeding 20% or a percentage of any issue of the outstanding debt of such company not exceeding 50%. The waiver of qualification is subject to certain conditions including, upon request of the New Jersey Commission, filing a certified statement that the institutional investor has no intention of influencing or affecting the affairs of the issuer, except that an institutional investor holding voting securities shall be permitted to vote on matters put to a vote of the holders of outstanding voting securities. Additionally, a waiver of qualification may also be granted to institutional investors holding a higher percentage of securities of a casino licensee’s holding or intermediary company upon a showing of good cause.

     The New Jersey Act requires our certificate of incorporation to provide that any of our securities are held subject to the condition that if a holder is found to be disqualified by the New Jersey Commission pursuant to the New Jersey Act, such holder shall dispose of his interest in such company. Accordingly, our certificate of incorporation provides that a holder of our securities must dispose of such securities if the holder is found disqualified under the New Jersey Act. In addition, our certificate of incorporation provides that we may redeem the stock of any holder found to be disqualified.

     If the New Jersey Commission should find one of the casino licensee’s security holders or one of our security holders to be unqualified, not only must the disqualified holder dispose of such securities but in addition, commencing on the date the New Jersey Commission serves notice upon the casino licensee or us of the determination of disqualification, it shall be unlawful for the disqualified holder to:

• receive any dividends or interest upon any such securities;

• exercise, directly or through any trustee or nominee, any right conferred by such securities; or

• receive any remuneration in any form from the licensee for services rendered or otherwise.

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     If the New Jersey Commission should find a security holder to be unqualified, the New Jersey Commission shall take any necessary action to protect the public interest, including the suspension or revocation of the casino license, except that if the disqualified person is the holder of our securities, the New Jersey Commission shall not take action against the casino license if:

• we have the corporate charter provisions concerning divestiture of securities by disqualified owners required by the New Jersey Act;

• we have made good faith efforts, including the pursuit of legal remedies, to comply with any order of the New Jersey Commission; and

• the disqualified holder does not have the ability to control us or elect one or more members of our board of directors.

     If the New Jersey Commission determines that the casino licensee has violated the New Jersey Act or regulations, or if any of our security holders or if any of the security holders of the casino licensee who is required to be qualified under the New Jersey Act is found to be disqualified but does not dispose of the securities, the casino licensee could be subject to fines or its license could be suspended or revoked. If the casino licensee’s license is revoked after issuance, the New Jersey Commission could appoint a conservator to operate and to dispose of the hotel-casino facilities operated by the casino licensee. Net proceeds of a sale by a conservator and net profits of operations by a conservator, at least up to an amount equal to a fair return on investment which is reasonable for casinos or hotels, would be paid to us and the other owner of the casino licensee.

     The New Jersey Act imposes an annual tax of 8% on gross casino revenues, as defined in the New Jersey Act, a 4.25% tax on the value of rooms, food beverage or entertainment provided at no cost or a reduced price, a $3 tax per day on each occupied hotel room, a $3 parking tax per day and, through June 30, 2006, a 7.5% tax on “adjusted net income”, as defined in the New Jersey Act, subject to certain minimums and limitations. In addition, casino licensees are required to invest 1.25% of gross casino revenues for the purchase of bonds to be issued by the Casino Reinvestment Development Authority or make other approved investments equal to that amount. In the event the investment requirement is not met, the casino licensee is subject to a tax in the amount of 2.5% on gross casino revenues. The New Jersey Commission has established fees for the issuance or renewal of casino licenses and hotel-casino alcoholic beverage licenses and an annual license fee on each slot machine.

     In addition to compliance with the New Jersey Act and regulations relating to gaming, any property built in Atlantic City by us must comply with the New Jersey and Atlantic City laws and regulations relating to, among other things, the Coastal Area Facilities Review Act, construction of buildings, environmental considerations and the operation of hotels. Any changes to such laws or the laws regarding gaming could have an adverse effect on the casino licensee and us.

   Illinois Government Regulation

     Our 50% joint venture ownership interest in Grand Victoria Riverboat Casino, located in Elgin, Illinois (“Grand Victoria”) is subject to extensive state regulation under the Illinois Riverboat Gambling Act (the “Illinois Act”) and the regulations of the Illinois Gaming Board (the “Illinois Board”).

     In February 1990, the State of Illinois legalized riverboat gambling. The Illinois Act authorizes the Illinois Board to issue up to ten riverboat gaming owners’ licenses on any water within the State of Illinois or any water other than Lake Michigan which constitutes a boundary of the State of Illinois. The Illinois Act restricts the location of certain of the ten owners’ licenses. Three of the licenses must be located on the Mississippi River. One license must be at a location on the Illinois River south of Marshall County and another license must be located on the Des Plaines River in Will County. The remaining licenses are not restricted as to location. Currently, nine owner’s licenses are in operation in Alton, Aurora, East Peoria, East St. Louis, Elgin, Metropolis, Rock Island and two licenses in Joliet. The tenth license, initially granted to an operator in East Dubuque, was relocated to Rosemont, Illinois. The tenth license has not been renewed by the Illinois Board and has been the subject of extensive on-going litigation. In December 2005, the Illinois Board issued a final order revoking the tenth license. No announcements have been made with respect to re-issuing the tenth license.

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     The Illinois Act strictly regulates the facilities, persons, associations and practices related to gaming operations. It grants the Illinois Board specific powers and duties, and all other powers necessary and proper to fully and effectively execute the Illinois Act for the purpose of administering, regulating and enforcing the system of riverboat gaming. The Illinois Board has authority over every person, association, corporation, partnership and trust involved in riverboat gaming operations in the State of Illinois.

     The Illinois Act requires the owner of a riverboat gaming operation to hold an owner’s license issued by the Illinois Board. Each owner’s license permits the holder to own up to two riverboats as part of its gaming operation, however, gaming participants are limited to 1,200 for any owner’s license. The number of gaming participants will be determined by the number of gaming positions available at any given time. Gaming positions are counted as follows:

• positions for electronic gaming devices will be determined as 90% of the total number of devices available for play;

• craps tables will be counted as having ten gaming positions; and

• games utilizing live gaming devices, except for craps, will be counted as having five gaming positions.

     Each owner’s license initially runs for a period of three years. Thereafter, the license must be renewed annually. The Board may renew an owner’s license for up to four years. An owner licensee is eligible for renewal upon payment of the applicable fee and a determination by the Illinois Board that the licensee continues to meet all of the requirements of the Illinois Act and Illinois Board rules. The owner’s license for Grand Victoria was issued in October 1994 and has been renewed for a four-year period that ends in October 2008. An ownership interest in an owner’s license may not be transferred or pledged as collateral without the prior approval of the Illinois Board.

     Pursuant to the Illinois Act, the Illinois Board established certain rules to follow in deciding whether to approve direct or indirect ownership or control of an owner’s license. The Illinois Board must consider the impact of any economic concentration caused by the ownership or control. No direct or indirect ownership or control may be approved which will result in undue economic concentration of the ownership of a riverboat gambling operation in Illinois. The Illinois Act specifies a number of criteria for the Illinois Board to consider in determining whether the approval of the issuance, transfer or holding of a license will create undue economic concentration. The application of such criteria could reduce the number of potential purchasers for the Grand Victoria or our 50% joint venture interest therein.

     The Illinois Act does not limit the maximum bet or per patron loss. Minimum and maximum wagers on games are set by the holder of the owner’s license. Wagering may not be conducted with money or other negotiable currency. No person under the age of 21 is permitted to wager and wagers only may be received from a person present on the riverboat. With respect to electronic gaming devices, the payout percentage may not be less than 80% nor more than 100%.

     Illinois imposes a number of taxes on Illinois casinos. Such taxes are subject to change by the Illinois legislature and have been increased in the past. The Illinois legislature also may impose new taxes on Grand Victoria’s activities. Illinois currently imposes an admission tax of $2.00 per person for an owner licensee that admitted 1,000,000 persons or fewer in the 2004 calendar year, and $3.00 per person for all other owner licensees (including Grand Victoria).

     Additionally, Illinois imposes a wagering tax on the adjusted gross receipts, as defined in the Illinois Act, of a riverboat operation. The owner licensee is required, on a daily basis, to wire the wagering tax payment to the Illinois Board. Currently, the wagering tax is:

• 15.0% of adjusted gross receipts up to and including $25.0 million;

• 22.5% of adjusted gross receipts in excess of $25.0 million but not exceeding $50.0 million;

• 27.5% of adjusted gross receipts in excess of $50.0 million but not exceeding $75.0 million;

• 32.5% of adjusted gross receipts in excess of $75.0 million but not exceeding $100.0 million;

• 37.5% of adjusted gross receipts in excess of $100.0 million but not exceeding $150.0 million;

• 45.0% of adjusted gross receipts in excess of $150.0 million but not exceeding $200.0 million; and

• 50.0% of adjusted gross receipts in excess of $200.0 million.

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     The Illinois Act also provides for a privilege tax which will require most Illinois casinos (including Grand Victoria) to pay wagering tax in each of fiscal years 2005 and 2006 in an amount that is not lower than the amount the casino paid from July 1, 2004 through June 30, 2005. The privilege tax terminates no later than July 1, 2007.

     A holder of any gaming license in Illinois is subject to imposition of fines, suspension or revocation of such license, or other action for any act or failure to act by the licensee or the licensee’s agents or employees, that is injurious to the public health, safety, morals, good order and general welfare of the people of the State of Illinois, or that would discredit or tend to discredit the Illinois gaming industry or the State of Illinois. The Illinois Board may revoke or suspend licenses, as the Illinois Board may determine and, in compliance with applicable Illinois law regarding administrative procedures, may suspend an owner’s license, without notice or hearing, upon a determination that the safety or health of patrons or employees is jeopardized by continuing a riverboat’s operation. The suspension may remain in effect until the Illinois Board determines that the cause for suspension has been abated and it may revoke the owner’s license upon a determination that the owner has not made satisfactory progress toward abating the hazard.

     If the Illinois Board has suspended, revoked or refused to renew an owner’s license or if a riverboat gambling operation is closing and the owner is voluntarily surrendering its owner’s license, the Illinois Board may petition the local circuit court in which the riverboat is situated for appointment of a receiver. The circuit court has sole jurisdiction over any and all issues pertaining to the appointment of a receiver. The Illinois Board specifies the specific powers, duties and limitations of the receiver.

     The Illinois Board requires that each “Key Person” of an owner licensee submit a Personal Disclosure or Business Entity Form and be investigated and approved by the Illinois Board. The Illinois Board determines which positions, individuals or Business Entities are required to be approved by the Board as Key Persons. Once approved, such Key Person status must be maintained. Key Persons include:

• any Business Entity and any individual with an ownership interest or voting rights of more than 5% in the licensee or applicant and the trustee of any trust holding such ownership interest or voting rights;

• the directors of the licensee or applicant and its chief executive officer, president and chief operating officer or their functional equivalents; and

• all other individuals or Business Entities that, upon review of the applicant’s or licensees Table of Organization, Ownership and Control the Board determines hold a position or a level of ownership, control or influence that is material to the regulatory concerns and obligations of the Illinois Board for the specified licensee or applicant.

     Each owner licensee must provide a means for the economic disassociation of a Key Person in the event such economic disassociation is required by an order of the Illinois Board. Based upon findings from an investigation into the character, reputation, experience, associations, business probity and financial integrity of a Key Person, the Illinois Board may enter an order upon the licensee or require the economic disassociation of the Key Person.

     Applicants for and holders of an owner’s license are required to obtain the Illinois Board’s approval for changes in the following: (i) Key Persons; (ii) type of entity; (iii) equity and debt capitalization of the entity; (iv) investors and/or debt holders; (v) source of funds; (vi) applicant’s economic development plan; (vii) riverboat capacity or significant design change; (viii) gaming positions; (ix) anticipated economic impact; or (x) agreements, oral or written, relating to the acquisition or disposition of property (real or personal) of a value greater than $1 million. Illinois regulations provide that a holder of an owner’s license may make distributions to its stockholders only to the extent that such distributions do not impair the financial viability of the owner.

     The Illinois Board requires each holder of an owner’s license to obtain the Illinois Board’s approval prior to issuing a guarantee of any indebtedness. Accordingly, we and Nevada Landing Partnership will petition the Illinois Board to allow Nevada Landing Partnership to issue a subsidiary guarantee of the notes. Although we and Nevada Landing Partnership believe the Illinois Board will approve the petition and allow Nevada Landing Partnership to guarantee the notes, there can be no assurance that the Illinois Board will grant the necessary approval.

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     The Illinois Board may waive any licensing requirement or procedure provided by rule if it determines that the waiver is in the best interests of the public and the gaming industry. Also, the Illinois Board may, from time to time, amend or change its rules.

     From time to time, various proposals have been introduced in the Illinois legislature that, if enacted, would affect the taxation, regulation, operation or other aspects of the gaming industry. Some of this legislation, if enacted, could adversely affect the gaming industry. No assurance can be given whether such or similar legislation will be enacted.

     Uncertainty exists regarding the Illinois gambling regulatory environment due to the limited experience of the Illinois Board, its staff and Illinois courts in interpreting the Illinois Act. The Illinois Act provides for a five-member Illinois Board that is appointed by the Illinois Governor and approved by the Illinois Senate. For a period of over six months during 2004 and 2005, the Illinois Board did not have enough members to constitute a quorum under the Illinois Act. Consequently, during such period, the Illinois Board was unable to take any action.

     Although the Illinois Board is currently fully constituted with five members, there is no assurance that the Illinois Board will continue at all times to have enough members to constitute a quorum. Failure of the Illinois Board to maintain a quorum may impede the Grand Victoria’s business by causing delays in the Illinois Board’s consideration of new or existing matters.

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