Mgm Mirage 2005 Annual Report
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M G M M I R A G E 2005 Annual Report Annual what if what if MGM MIRAGE e g a P e t Top Row • • i Bellagio New York-New York Mandalay Bay s o Middle Row Monte Carlo • MGM Grand • Excalibur p p Bottom Row • • Luxor TI The Mirage O PUTTING THE 60 $1.50 WHEELS IN MOTION $1. 40 000 $1. $1.21 $7, $6,482 These two simple words convey we pick up the pieces of 20 500 What if? What if... $1. $6, the spirit of creativity and innovation a broken community and rebuild our 00 000 that runs throughout your company. business and, in doing so, enrich many $1. $6, 80 $0.76 500 lives along the Gulf coast? We can, if we $0. $5, respond quickly and set our sights on an 60 000 $0. $5, even greater Beau Rivage for the future. 0 40 $0. $4,50 $4,238 0 $3,863 What if... we create a culture within $0.20 $4,00 MGM MIRAGE that reflects the changing ‘03 ‘04 ‘05 0 ‘03 ‘04 ‘05 $0.00 $3,50 demographic of the marketplace in an EARNINGS PER SHARE NET REVENUE ever-changing world? We can, if we define From Continuing Operations our company’s culture not in terms of outdated political policies about people, As we seek to implement our growth but based on a leading edge vision to strategy in an ever more competitive create a value-based corporate community can be measured in many ways— environment, we are constantly asking that recognizes and values the contributions tremendous revenue growth and industry- ourselves, “What if?” It spurs us to consider of all people. leading profit margins, for example. But solutions and alternative approaches that my personal favorite is the fact that lead to innovation and success. All of these things and more have employee turnover in the legacy Mandalay been happening within your company. As properties has reached an all-time low. It What if... we merge with one of our a result of our employees’ creativity, hard became obvious to us that as individuals, largest competitors and, by doing so, grow work and dedication, 2005 was a record- our new employees recognized the same stronger together? We can, if we welcome breaking year in every sense. In addition, opportunity we saw as a company. our new colleagues into a secure and stable we are perfectly positioned for sustained We also saw far beyond the immediate working environment that is simultaneously growth throughout the coming years. positive impact of these newly acquired comforting and invigorating. As we considered the merger resorts; we saw an enormous potential with Mandalay Resort Group, we saw a for future development on the vast What if... we create a new era in company that matched ours in many ways. combined real estate holdings of a merged development for Las Vegas, and change By combining, we would be able to offer company—Mandalay’s real estate was the way we think about this city forever? the widest possible array of choices for our vastly undervalued considering recent real We can, if we assemble a team of the customers and position ourselves to better estate pricing trends along the Las Vegas greatest architects and urban planners take advantage of the boundless oppor- Strip and the fact that we would now own in the world. tunities for resort development on the Las most of the prime remaining development annual report 2005 Vegas Strip and elsewhere. To do so, we parcels on the Las Vegas Strip. On this MGM MIRAGE had to be certain that our new colleagues land, in the years to come, your company from Mandalay were made to feel welcome will continue to build exciting new projects Page Opposite J. Terrence Lanni and secure in their positions within that will further enhance both the Las Bellagio Chairman and CEO • MGM MIRAGE MGM MIRAGE. The success of the merger Vegas experience and shareholder value. 2 “We continually reinvest in our resorts, maintaining their world-class status.” Opposite Page The opening of future projects will Your company has assembled a team of Our confidence in the Las Vegas real From left to right be made all the easier as a result of the world-class architects never before imagined estate market was proven correct by the tremendous community of MGM MIRAGE for one project: Cesar Pelli, Kohn Pederson exceptional sales performance of The L’Atelier at MGM Grand employees. Our pre-eminent family of industry Fox, Lord Norman Foster, Rafael Viñoly, Signature at MGM Grand. The first tower will JET Nightclub at The Mirage professionals positions us for growth as we Helmut Jahn, David Rockwell and Daniel soon open to the public, and almost all of the Skylofts at MGM Grand have the most experienced workforce from Libeskind. Few cities can claim to benefit from 1,600 units at The Signature sold out faster KÁ • Cirque Du Soleil which to develop new teams of property staff. their individual contributions, let alone a single and at higher prices than we had originally Sensi at Bellagio As we considered options for our prime project on which they all collaborate. The best forecast. Even as I write this, only a handful Joël Robuchon at The Mansion at MGM Grand parcel of 66 acres at the heart of the Las builders, contractors and interior designers of units remain available for sale, at prices in Vegas Strip between Monte Carlo and will also be on board. Of course, we also excess of $1,000 per square foot. Bellagio, we quickly realized that the have an industry-leading management team As we were preparing to announce an development formula of the past fifteen assembled for Project CityCenter to ensure exciting new future for Las Vegas, we were “AS WE SEEK TO IMPLEMENT OUR GROWTH STRATEGY, WE ARE CONSTANTLY ASKING OURSELVES,“WHAT IF?” years, successful as it has been, must be that operating results are as spectacular as stunned by the developments of Hurricane re-engineered in order for Las Vegas to reach the buildings themselves. Where necessary, Katrina last August. Even before the water beyond its current paradigm. We envision we have hired top talent from outside had receded to the Gulf, we were underway the Las Vegas Strip as an even greater the industry, specialists in real estate and with planning the relief and rebuilding resort destination and, more importantly, residential development, and engaged efforts. Teams of people from Las Vegas an integral part of the next-generation Las outside experts to ensure we maximize were dispatched to set up an emergency Vegas, a true metropolitan community with the potential of this once-in-a-lifetime command center, and Beau Rivage employ- its own identity and character. Based on this development opportunity. We are readying ees were the first to receive paychecks, gain concept, we formulated the plans for a new for a May groundbreaking and anticipate access to Red Cross support and Internet urban metropolis—Project CityCenter. opening in late 2009. There is much to access to the Federal Government. There are many superlatives that can be done between now and then, but the We were also the first company to initiate be used when describing Project CityCenter. process itself is remarkable; one which clean-up and rebuilding efforts and, as a While it will be the largest single privately your company’s management and result, we intend to re-open a new and even funded development in the history of the employees are proud to be a part. better Beau Rivage on the first anniversary United States, that doesn’t tell the story of of Katrina, in August of this year. Project CityCenter’s potential impact on Las Vegas. Project CityCenter will redefine the Las Vegas experience for years to come, with stunning, iconic architecture as the visual attraction, and a full slate of residences, luxury hotels, casino, restaurants, retail shops and entertainment amenities to fulfill every need and desire of our residents and guests. Ken Rosevear President, MGM MIRAGE Development; John T. Redmond President & CEO, MGM Grand Resorts, LLC; J. Terrence Lanni Chairman & CEO, MGM MIRAGE; Robert H. Baldwin President & CEO, Mirage Resorts, Inc., & President, Project CityCenter; Gary N. Jacobs Executive Vice President, From left to right From General Counsel & Secretary, MGM MIRAGE; James J. Murren President, CFO & Treasurer, MGM MIRAGE Your management and employees are Your company is growing in Michigan, still asking “what if”—more now than ever. where our new $765 million casino hotel We are energized by the possibilities before complex is under construction. This 400- us: new co-workers, new development sites, Bellagio room, 100,000-square-foot casino will be open new profit opportunities, new cities rising • sometime late next year or in early 2008. from the ground. We are feeding off the The MGM Grand Detroit casino has momentum of 2005 to propel us forward, performed magnificently since its opening in Borgata and I have no doubt that we will report many Fontana Bar Fontana 1999, and we have even higher expectations architects and relied on our experience new and exciting ideas throughout 2006. of our new multi-faceted MGM Grand Detroit in operating some of the world’s top resort In closing, the MGM MIRAGE Board of casino hotel. properties to create and submit a thorough Directors sadly mourned the passing of two In Macau, the stunning MGM Grand proposal for an iconic resort, worthy of of its members during 2005 – George Mason Macau is rising from the ground soon to the unique Marina Bay location.