MGM MIRAGE 2004 ANNUAL REPORT Defining Momentum
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MGM MIRAGE 2004 ANNUAL REPORT defining momentum POINTS IN TIME DEFINING MOMENTS OF MGM MIRAGE 19 96 THE NEW YORK-NEW YORK SKYLINE BECOMES 19 A TOWERING PRESENCE IN THE PORTFOLIO. We acquired Primadonna Resorts to gain full 93 ownership of the spectacular New York-New York as well as three hotel-casinos on the Nevada state line and two championship golf courses. IT ALL BEGINS WITH MGM GRAND. MGM Grand, the largest hotel-casino in the world, opened to great fanfare. “The City of Entertainment” redefined the urban resort and provided the foundation for our company’s momentous growth. MANDALAY RESORT GROUP AND MGM MIRAGE ANNOUNCE MERGER. Mandalay Resort Group will add iconic resorts and great people to our family. We will own 832 acres in the heart of Las Vegas, the fastest growing 20 city in the United States. 04 BELLAGIO ADDS A JEWEL TO THE FAMILY CROWN. The Mirage Resorts merger provided outstanding resorts, people and land, and has propelled our earnings and provided an unparalleled platform for future growth. 20 00 20 09 BORGATA CHANGES THE FACE OF ATLANTIC CITY. Borgata is launched in Atlantic City with our joint-venture partner Boyd Gaming. Borgata has been a tremendous success, raising the bar for casino entertainment in that market. 20 SOON, A SPECTACULAR NEW CITY WILL RISE. Project CityCenter – an ambitious multi-dimensional 03 urban plan – will contribute to the remarkable transformation of Las Vegas as an emerging city of global significance. TO OUR SHAREHOLDERS MGM MIRAGE DEFINES MOMENTUM “Your company has undergone several defining moments throughout its history.” rom its roots some 35 years ago with the opening myriad of elements that will propel Las Vegas into a new of the International Hotel, we have played a generation of urban sophistication. F leading role in continuously redefining the Las While additional details of this extraordinary develop- Vegas experience. ment will come in the months ahead, I am pleased to tell We announced two significant initiatives in 2004 that, you that we have secured the services of the internationally taken together, give your company unrivaled momentum acclaimed architect Cesar Pelli to design our anchor resort to set industry standards for creativity, performance and at the heart of Project CityCenter. responsibility for decades to come. Cesar Pelli & Associates has worked with corporate, government and private clients to design major public Defining Momentum for Las Vegas spaces, museums, airports, research centers, performing arts Our merger agreement with Mandalay Resort Group centers, academic buildings, hotels, office and residential and our plans to develop Project CityCenter on the Las towers and mixed-use projects. Vegas Strip are among the most significant announcements The work of Cesar Pelli is not constrained by a personal in Las Vegas history. As this fabled city begins its second style or a signature that would limit his architecture; instead, hundred years, MGM MIRAGE is positioned like no other it celebrates the unique characteristics of each project. Using company to take advantage of unsurpassed growth oppor- this approach, he has designed several exceptional buildings tunities in the most dynamic gaming and entertainment in the United States and abroad. market in the world. We are very excited about our partnership with Mr. Project CityCenter will uniquely re-position Las Vegas Pelli and his colleagues and believe they will deliver for like no other project before it. Far more than simply MGM MIRAGE and the residents of Southern Nevada another casino-hotel, Project CityCenter encompasses a a building of iconic stature around the world. J. TERRENCE LANNI Chairman & Chief Executive Officer BELLAGIO SPA TOWER SHIBUYA MGM GRAND CRAVINGS THE MIRAGE The quintessential luxury Designed by superstar team The zenith of all-you-can-eat. hotel is now even more Yabu Pushelberg, Shibuya Designed by Adam Tihany, Cravings opulent. This expansion features stellar sushi and the boasts 11 cooking stations, a includes 928 rooms and widest sake selection this street of unique restaurants, suites, 80,000 square feet side of the Pacific, all served and an array of temptations in of convention space, retail in a sleek, airy ambiance. what’s unquestionably the ultimate outlets, and restaurants. buffet dining experience. 02 Defining Momentum for Our Industry We also will have at Mandalay Bay the fifth largest But the bricks and mortar tell only part of the story The gaming industry in America is maturing, and convention center in the United States, providing the com- of this transaction. At the heart of Mandalay is its people. international expansion, while exciting in select markets, pany with a great resource to further develop the business Mandalay employees at all levels are energetic and talented remains challenging. As a result, your company has travel and convention market. and will be a tremendous asset to us. Together, we will become pursued a growth strategy that calls for maximizing the a family in excess of 70,000 people committed to delivering assets we currently own and seeking prudent development the best possible experiences for our guests. The transaction opportunities and strategic acquisitions. also will create unparalleled opportunities for our entire family Upon completion of our merger with Mandalay, of employees. MGM MIRAGE will be the world’s leading gaming and In short, this groundbreaking transaction creates leisure company. The combination will result in a well- unstoppable momentum for all stakeholders in the capitalized company uniquely situated to invest in its MGM MIRAGE family. current portfolio in addition to creating new projects in the United States and around the world. Defining Momentum in our Properties We believe this is an outstanding In 2004, your company invested over $690 million of transaction for the shareholders of capital in the creation of new restaurants, clubs, shows and both companies. With this nightspots as well as the development of strategic enhance- acquisition, we will own, ments to existing amenities. These investments generated operate and have investments exceptional returns in a time when competition for the in 28 properties throughout Nevada, Mississippi, entertainment dollar has never been higher. Illinois, Michigan, and New Jersey. The combined company will have an asset portfolio which includes some of the most widely recognized brand names in the world. These properties cater to a broad customer base, ranging from value-oriented to the ultra- high end. Each resort provides a unique customer experience through its specific personality and combination of amenities. 2004 $2.85 FIX BELLAGIO Classic American fare using the 2003 $1.61 freshest fish, meat, and SHARE S PER poultry cooked to order on G 2002 $1.83 a wood-burning grill. Costa Rican Padouk wood inspires a warm environment in a unique, vibrant design. EARNIN $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 Mystère® by Cirque du Soleil® $0.00 03 TO OUR SHAREHOLDERS EXPANDING WITH EXCELLENCE BELLAGIO underwent a significant expansion during 2004 result- These investments in your company’s future paid ing in the opening of the Spa Tower and several important new dividends even before the year was out. We established a amenities at this AAA Five Diamond property. Bellagio remains new record for net revenues posting $4.2 billion, a 10% Las Vegas’ first and only hotel-casino to receive this prestigious increase over 2003. recognition. These new additions add dimension and depth to the world-famous experience awaiting guests at Bellagio. Your company’s resorts produced record EBITDA of $1.46 billion, an increase of 23% over 2003, while operating MGM GRAND LAS VEGAS completed a transformation, begun income was $951 million, an increase of 36%, with record in 2003, of its food and beverage and entertainment offerings. results at Bellagio, MGM Grand Las Vegas and Beau Rivage. MGM Grand is one of the must-see attractions of Las Vegas, with Cirque du Soleil’s newest pro- `TM Defining Momentum in the Community duction, KA , and several of the Strip’s 18.0% finest restaurants and hottest nightspots. I’ve spent 27 years in this profession and the incredible generosity of our employees never TI’s transformation was no less extensive, 14.9% KÀ The most spectacular production ever, by a troupe renowned for its 47.6% ceases to amaze me. Shortly after the merger pageantry. Cirque du Soleil’s KÀ debuted at a new theatre at MGM Grand as the property’s management team with Mirage Resorts in 2000, we established in the fourth quarter of 2004. conceived and implemented a program to 19.5% 47.6%19.5% enliven the property with new restaurants the Voice Foundation. This allows employees to and nightlife. 14.9% express themselves in the communities we serve by providing them a mechanism to raise monies for What exactly is a defining THE MIRAGE was the site of a revolution in 18.0% worthy causes. It’s their money and they decide Las Vegas’ history as the venerable buffet was given where it goes. Your company provides the marketing moment? Try a multi-billion new life as a top dining establishment, Cravings. 2004 Revenue Mix and administrative support. Others may follow this lead, but The Mirage was Casino dollar project centered in the Rooms the first property to breathe new life into what In each year since we established the program, Food & Beverage remained of the last bastion of “old” Las Vegas. Entertainment, Retail, employees have given record amounts to support a heart of Las Vegas. & Other SKYLOFTS MGM Grand BELLAGIO SPA Unique TEATRO MGM Grand A new A private sanctuary of sleek, design elements, combined genre of Las Vegas nightlife elegant two-story accommo- with an international array of where European club influ- dations, offering discerning innovative treatments and ences permeate.