UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(MARK ONE)

[X] 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, 1994.

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

For the transition period from to
------------------------- -------------------

COMMISSION FILE NUMBER 0-16760

MGM GRAND, INC.
(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 NO.)

3799 LAS VEGAS BOULEVARD SOUTH
LAS VEGAS, NEVADA 89109
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE) (ZIP CODE)

(702) 891-3333
(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 (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 X No
---- ----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K ((S)229.405 of this chapter) is not contained herein, and
will not be contained, to the best of 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. [X]

The aggregate market value of Registrant's Common Stock held by non-
affiliates (based on the closing price on the New York Stock Exchange--
Composite Transactions on March 15, 1995) was approximately $298.8 billion. As
of March 15, 1995, 47,941,010 shares of Registrant's Common Stock, $.01 par
value, were outstanding.

Portions of the Annual Report to Stockholders for the fiscal year ended
December 31, 1994 are incorporated by reference into Part II of this Form 10-K.
Portions of the Registrant's Proxy Statement dated March 30, 1995 are
incorporated by reference into Part III of this Form 10-K.

PART 1

ITEM 1. BUSINESS

GENERAL

MGM Grand, Inc. (the "Company") was organized as a Delaware corporation on
January 29, 1986.

Through its wholly-owned subsidiary, MGM Grand Hotel, Inc. ("MGM Grand
Hotel"), the Company commenced operations on December 18, 1993 of the MGM Grand
Hotel and Casino, a large-scale integrated hotel/casino entertainment complex.
The resort is located on approximately 112 acres on Las Vegas Boulevard South
(the "Strip") in Las Vegas, Nevada, across the street from Excalibur and the
Tropicana Hotel/Casino. MGM Grand Hotel Finance Corp. ("MGM Finance"), a
wholly-owned subsidiary of the Company, was formed to issue First Mortgage
Notes to the public, to incur bank debt (the "Bank Loan"), and to lend the
aggregate proceeds thereof to MGM Grand Hotel to finance the construction and
opening of the MGM Grand Hotel and Casino.

In December 1993, the Company entered into an agreement with Bally's for the
joint development and operation of an elevated monorail linking the MGM Grand
Hotel and Casino with the corner of Flamingo Road and the Las Vegas Strip. The
project is a one-mile, high-capacity, transit-grade system with an estimated
cost of $25 million. The project costs are shared equally with Bally's. The
system is scheduled to be operational by June 1995.

On December 28, 1994, the Company and Primadonna Resorts, Inc. ("Primadonna")
executed the definitive agreement for their joint development of a $350 million
themed hotel casino called NEW YORK-NEW YORK. The project, which will be owned
equally by the Company and Primadonna, will be located on the northwest corner
of Tropicana Avenue and Las Vegas Boulevard, across from the MGM Grand Hotel.
The preliminary plans for NEW YORK-NEW YORK call for the destination resort to
include a 2,200-room hotel and casino, themed entertainment attractions and
restaurant/retail outlets. The Company and Primadonna will jointly own, develop
and operate NEW YORK-NEW YORK, which is expected to break ground during the
first quarter of 1995. The 18-acre site, located on the busiest intersection in
Nevada, was contributed to the venture by the Company during January 1995, and
in February 1, 1995, the venture acquired an adjacent two acre parcel.

The Company operated MGM Grand Air, a scheduled and charter airline service,
through its wholly-owned subsidiary, MGM Grand Air, Inc., from September 1987
until December 31, 1994, when MGM Grand Air was sold.

For certain information about the Company's industry segments, see Note 18 to
the Company's Consolidated Financial Statements.

The Company's principal executive offices are located at 3799 Las Vegas
Boulevard South, Las Vegas, Nevada 89109. The Company's telephone number is
(702) 891-3333.

HOTELS AND GAMING

MGM Grand Hotel and Casino

MGM Grand Hotel opened the MGM Grand Hotel and Casino on December 18, 1993.
The new resort is located on approximately 112 acres on the Strip in Las Vegas
Nevada, across the street from Excalibur and the Tropicana Hotel/Casino.

MGM Grand Hotel and Casino is a multi-themed destination resort which
management believes is a "must see" attraction for visitors to Las Vegas. The
resort has over 350 feet of frontage on the Strip and 1,450 feet on Tropicana
Avenue. The complex is easily accessible from McCarran International Airport
and from Interstate 15 via Tropicana Avenue.

MGM Grand Hotel creates an exciting and unique gaming and entertainment
experience which is intended to appeal to all segments of the Las Vegas
market. The entrance to the hotel and casino on the Strip is highlighted by a
seven story lion through which visitors proceed to a 70 foot high reproduction
of the Emerald City, inspired by "The Wizard of Oz".

The casino is approximately 171,500 square feet in size, and is one of the
largest casinos in the world. The casino has 3,500 slot machines and 155 table
games, a state of the art baccarat pit, a poker room, a race and sports book,
and a keno lounge. The casino features four separate themed areas which
enhance the entertainment experience of the casino patron: Emerald City,
Hollywood, Monte Carlo, and Sports.

The hotel, which management believes is the largest in the world, has 5,005
rooms, including approximately 4,254 typical guest rooms decorated in five
different themes: Deep South, Hollywood, Monte Carlo, Emerald, and Casablanca.
The hotel also has 751 luxury suites, more than any other Las Vegas hotel.
These suites range in size from 675 to 6,040 square feet. The hotel provides
guests with a state of the art health spa, a swimming pool, and four lighted
tennis courts.

MGM Grand Hotel has Las Vegas' only full scale theme park. Situated on 33
acres, the park has 12 rides and attractions, extensive food and beverage
outlets, ten retail shops, and a large craft area where visitors can view
handcrafts being made.

Other entertainment facilities include: a 31,000 square foot Midway
containing 30 carnival games of skill; an extensive video arcade including
virtual reality simulators; a 600 seat showroom providing celebrity
entertainment; a 1,700 seat showroom specifically designed for the EFX
production show, the Company's original grand spectacle special effects stage
production; eight restaurants and a food court; and a 15,200 seat special
events center, providing a venue for great entertainers such as Barbra
Streisand and Luther Vandross, as well as sporting events.

MGM Grand Hotel uses the unique characteristics of the property to target
the following segments of the Las Vegas market: (i) free and independent
travelers; (ii) tour and travel; (iii) special events/conventions; (iv) high
end gaming; and (v) local.

Las Vegas Market

The MGM Grand Hotel and Casino operates in the Las Vegas market, and is
located on the Strip. Las Vegas is the largest city in Nevada, with a
metropolitan area population in excess of approximately 1,000,000, and one of
the largest resort destinations in the world.

Gaming has continued to be a strong and growing business in Las Vegas. Since
1984, Las Vegas Strip gaming revenues have increased at a compound annual
growth rate of 9.8% from $1.4 billion in 1984 to $3.5 billion in 1994.

The hotel industry in Las Vegas is highly competitive. In 1993 two other
major themed resort hotels opened on the Strip; the Luxor with 2,500 rooms and
100,000 square feet of gaming space, and Treasure Island with 3,000 rooms and
90,000 square feet of gaming space. Several additional competing projects are
in various stages of development. While all of the large themed resorts pose
direct competition with the MGM Grand Hotel and Casino, Las Vegas Convention
and Visitors Authority ("LVCVA") statistics show that tourism growth more than
offset the increased capacity, as visitor volume for 1994 increased 19% over
1993 levels. Total visitors for 1994 topped 28 million.

MGM Grand Hotel competes with gaming and resort facilities in their
respective markets as well as gaming and resort facilities elsewhere in the
world. To some extent, state lotteries and state-authorized card rooms, such
as those operating in California, compete with the Company.

Gambling, with various limitations and conditions, is now legal in numerous
locations throughout the United States. The proliferation of such gaming
facilities on riverboats and elsewhere is increasing. Also, as a result of
certain legislative and court decisions, casino-type operations are being
established

at various Native American reservations throughout the country. The development
of fully operating casinos in California would likely have a negative effect on
MGM Grand Hotel's operations in Nevada.

Insurance

The MGM Grand Hotel carries insurance of the type customary in the hotel and
casino industry and in amounts deemed adequate by management to protect the
properties. The policies provide customary business and commercial coverages,
including workers' compensation, third party liability, property damage, boiler
and machinery and business interruption.

Government Regulation

The ownership and operation of casino gaming facilities in Nevada are subject
to: (i) the Nevada Gaming Control Act and the regulations promulgated
thereunder (collectively, the "Nevada Act"); and (ii) various local regulation.
The Company's 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 the Clark County Liquor
and Gaming Licensing Board (the "CCLGLB"). The Nevada Commission, the Nevada
Board, and the CCLGLB 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: (i) the prevention of unsavory or unsuitable persons
from having a direct or indirect involvement with gaming at any time or in any
capacity; (ii) the establishment and maintenance of responsible accounting
practices and procedures; (iii) 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; (iv) the prevention of
cheating and fraudulent practices; and (v) to provide a source of state and
local revenues through taxation and licensing fees. Change in such laws,
regulations and procedures could have an adverse effect on the Company's gaming
operations.

MGM Grand Hotel operates the casino and is required to be licensed by the
Nevada Gaming Authorities. The gaming license requires the periodic payment of
fees and taxes and is not transferable. MGM Grand Hotel is also licensed as a
manufacturer and distributor of gaming devices. Another wholly-owned subsidiary
of the Company, MGM Dist., Inc. ("MGM Dist."), is also licensed by the Nevada
Gaming Authorities as a manufacturer and distributor of gaming devices, subject
to certain conditions and limitations imposed by the Nevada Commission. The
Company is required to be registered by the Nevada Commission as a publicly
traded corporation ("Registered Corporation") and as such, it 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 of, or receive any percentage of
profits from, MGM Grand Hotel or MGM Dist. without first obtaining licenses and
approvals from the Nevada Gaming Authorities. The Company, MGM Grand Hotel and
MGM Dist. 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 Company, MGM Grand
Hotel or MGM Dist. in order 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 MGM Grand Hotel and MGM Dist. must file
applications with the Nevada Gaming Authorities and may be required to be
licensed or found suitable by the Nevada Gaming Authorities. Officers,
directors and key employees of the Company who are actively and directly
involved in the gaming activities of MGM Grand Hotel or MGM Dist. may be
required to be licensed or

found suitable by the Nevada Gaming Authorities. The Nevada Gaming Authorities
may deny an application for licensing 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 license by whom 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 unsuitable to continue having a
relationship with the Company, MGM Grand Hotel or MGM Dist., the companies
involved would have to sever all relationships with such person. In addition,
the Nevada Commission may require the Company, MGM Grand Hotel or MGM Dist. 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 Company, MGM Grand Hotel and MGM Dist. are required to submit detailed
financial and operating reports to the Nevada Commission. Substantially all
material loans, leases, sales of securities and similar financing transactions
by MGM Grand Hotel and MGM Dist., must be reported to or approved by the Nevada
Commission.

If it was determined that the Nevada Act was violated by MGM Grand Hotel or
MGM Dist., the gaming licenses they hold could be limited, conditioned,
suspended or revoked, subject to compliance with certain statutory and
regulatory procedures. In addition, MGM Grand Hotel, MGM Dist., the Company 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 Company's gaming property and, under certain circumstances, earnings
generated during the supervisor's appointment (except for the reasonable rental
value of the Company's gaming property) 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 the Company's gaming operations.

Any beneficial holder of the Company's voting securities, regardless of the
number of shares owned, may be required to file an application, be
investigated, and have his suitability as a beneficial holder of the Company's
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 the Company's
voting securities to report the acquisition to the Nevada Commission. The
Nevada Act requires that beneficial owners of more than 10% of the Company's
voting securities apply to the Nevada Commission for a finding of suitability
within thirty days after the Chairman of the Nevada Board mails a 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 the Company's 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. 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 Company, any change in the Company's
corporate charter, bylaws, management, policies or operations of the Company or
any of its gaming affiliates, or any other action which the Nevada Commission
finds to be inconsistent with holding the Company's voting securities for
investment purposes only. Activities that

are not deemed to be inconsistent with holding voting securities for investment
purposes only include: (i) voting on all matters voted on by stockholders; (ii)
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 (iii) 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 thirty 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 the common stock
of a Registered Corporation beyond such period of time as may be prescribed by
the Nevada Commission may be guilty of a criminal offense. The Company is
subject to disciplinary action if, after it receives notice that a person is
unsuitable to be a stockholder or to have any other relationship with the
Company, MGM Grand Hotel or MGM Dist., the Company (i) pays that person any
dividend or interest upon voting securities of the Company, (ii) allows that
person to exercise, directly or indirectly, any voting right conferred through
securities held by that person, (iii) pays remuneration in any form to that
person for services rendered or otherwise, or (iv) fails to pursue all lawful
efforts to require such unsuitable person to relinquish his voting securities
for cash at fair market value. Additionally, the CCLGLB has taken the position
that it has the authority to approve all persons owning or controlling the
stock of any corporation controlling a gaming license.

The Nevada Commission may, in its discretion, require the holder of any debt
security of a Registered Corporation to file applications, be investigated and
be found suitable to own the debt security of a Registered Corporation. 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: (i) pays to the unsuitable person any dividend,
interest, or any distribution whatsoever; (ii) recognizes any voting right by
such unsuitable person in connection with such securities; (iii) pays the
unsuitable person remuneration in any form; or (iv) makes any payment to the
unsuitable person by way of principal, redemption, conversion, exchange,
liquidation, or similar transaction.

The Company is 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. The Company is also required to render maximum assistance in
determining the identity of the beneficial owner. The Nevada Commission has the
power to require the Company's 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 Company.

The Company 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 such
purposes. Such 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, 1994, the Nevada Commission granted the Company prior approval to
make public offerings for a period of one year, subject to certain conditions
(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 the investment merits of the securities offered. Any
representation to the contrary is unlawful.

Changes in control of the Company through merger, consolidation, stock or
asset acquisitions, management or consulting agreements, or any act or conduct
by a person whereby he 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 such
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 of the transaction.

The Nevada legislature has declared that some corporate acquisitions opposed
by management, repurchases of voting securities and corporate defense 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: (i) assure the
financial stability of corporate gaming operators and their affiliates; (ii)
preserve the beneficial aspects of conducting business in the corporate form;
and(iii) promote a neutral environment for the orderly governance of corporate
affairs. Approvals are, in certain circumstances, required from the Nevada
Commission before the Company can make exceptional repurchases of voting
securities above the current market price thereof 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 the Company's
board of directors in response to a tender offer made directly to the
Registered Corporation's stockholders for the purposes of acquiring control of
the Registered 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 Clark
County, Nevada. Depending upon the particular fee or tax involved, these fees
and taxes are payable either monthly, quarterly or annually and are based upon
either: (i) a percentage of the gross revenues received; (ii) the number of
gaming devices operated; or (iii) the number of table games operated. A casino
entertainment tax is also paid by MGM Grand Hotel where entertainment is
furnished in connection with the selling of food or refreshments. Nevada
licensees that hold a license as an operator of a slot machine route, a
manufacturer or a distributor, such as MGM Grand Hotel and MGM Dist., also pay
certain fees and taxes to the State of Nevada.

Any person who is licensed, required to be licensed, registered, required to
be registered, or is under common control with such persons (collectively,
"Licensees"), and who proposes to become involved in a gaming venture outside
of Nevada, is 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 of the Nevada Board of their participation in such foreign
gaming. The revolving fund is subject to increase or decrease in the discretion
of the Nevada Commission. Thereafter, Licensees are also required to comply
with certain reporting requirements imposed by the Nevada Act. Licensees are
also subject to disciplinary action by the Nevada Commission if they 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 activities that are harmful to the State of Nevada or its ability to collect
gaming taxes and fees, or employ a person in the foreign operation who has been
denied a license or a finding of suitability in Nevada on the ground of
personal unsuitability.

The sale of alcoholic beverages by MGM Grand Hotel 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
operations of MGM Grand Hotel.

Pursuant to a 1985 agreement between the State of Nevada and the United
States Department of the Treasury (the "Treasury"), the Nevada Commission and
the Nevada Board have authority to enforce their own cash transaction reporting
laws applicable to casinos which substantially parallel the federal Bank
Secrecy Act. Under the Money Laundering Suppression Act of 1994, which was
passed by Congress, the Secretary of the Treasury retained the ability to
permit states, including Nevada, to continue to enforce their own cash
transaction reporting laws applicable to casinos. The Nevada Act requires most
gaming licensees to file reports related to cash purchases of chips, cash
wagers, cash deposits or cash payment of gaming debts, if any such transactions
aggregate more than $10,000 in a 24-hour period. Casinos are required to
monitor receipts and disbursements of currency in excess of $10,000 and report
them to the Treasury. Although it is not possible to quantify the full impact
of these requirements on the Company's business, the changes are believed to
have had some adverse effect on results of operations since 1985.

On November 28, 1994, the Treasury enacted amendments (effective December 1,
1994) to the federal regulations under the Bank Secrecy Act. The amendments
require casinos subject to the Bank Secrecy Act to implement written programs
no later than June 1, 1995 to assure and monitor compliance with the Bank
Secrecy Act. Such programs must include "know your customer" and suspicious
transacting reporting components. It is anticipated that the Nevada Commission
will enact amendments to the Nevada Act which will parallel the amendments to
the Bank Secrecy Act. As a result, the Company will, in the future, be required
to implement such a program.

Competition

The hotel industry is highly competitive. Hotels located on or near the strip
(" Strip Hotels") compete primarily with other Strip Hotels and with a few
major hotels in downtown Las Vegas. Strip Hotels offering similar prices
compete with each other primarily on the basis of quality of rooms, restaurants
and facilities, entertainment offered, complimentary goods and services given,
credit limits and quality of personal attention offered to guests and casino
customers. The Company's hotel/casino operations also compete with a large
number of hotels and motels, and gaming facilities not related to hotels or
motels, located in and near Las Vegas. The Theme Park competes with all other
forms of entertainment, lodging and recreational activities, including other
theme parks, especially those located in southern California. Some of the
Company's competitors are larger than the Company and may have greater
resources.

According to the LVCVA, as of December 31, 1994, there were approximately
86,000 hotel and motel rooms in the Las Vegas area. In addition, the LVCVA
reports proposals to construct approximately 37,000 more hotel and motel rooms,
including proposals for three themed hotel/casino properties on the Strip
between Tropicana and Flamingo Avenues, one of which is the Company's NEW YORK-
NEW YORK project. The Company cannot make any prediction as to how many
additional rooms will be constructed in Las Vegas. The Company's future
operating results could be adversely affected by excess Las Vegas room and
gaming capacity.

In addition to competing with hotel/casino facilities elsewhere in Nevada
(i.e., the Reno/Lake Tahoe area and the rapidly expanding Laughlin area) and in
Atlantic City, the Company competes with hotel/casino facilities elsewhere in
the world and with state lotteries. Certain states have recently legalized, and
several other states are currently considering, legalizing casino gaming in
specific geographic areas, including Colorado, Illinois, Iowa, Louisiana,
Mississippi, Missouri, Oregon, South

Dakota and Tennessee. Legalized casino gambling in other states could adversely
affect the Company's activities in Las Vegas, particularly if such legalization
were to occur in areas close to Nevada, such as California. Additionally,
certain gaming operations are conducted or have been proposed on federal Indian
reservations, including those located in the primary market to be served by the
MGM Grand Hotel. In addition, with respect to group bookings, the Company's
hotel/casino facilities in Las Vegas also compete with hotels and resorts,
which do not include casinos, throughout the United States.

MGM GRAND AIR

On December 31, 1994, in an effort to focus all the Company's efforts on the
conduct and expansion of its core entertainment, hotel and gaming business, the
Company completed the sale of MGM Grand Air, which it had operated since 1987
as a scheduled and charter airline service.

Summary Operating Data for Passenger Service

The following table (unaudited) sets forth selected operating data relating
to MGM Grand Air's passenger service for the periods indicated.

1993 QUARTERS 1994 QUARTERS
----------------------------------- -------------------------------
FIRST SECOND THIRD FOURTH FIRST SECOND THIRD FOURTH
------- ------- ------- -------- ------ ------ ------- -------

Operating Revenues (000) $ 4,938 $ 4,719 $ 4,732 $ 6,644 $4,144 $5,841 $ 4,889 $ 6,944
Depreciation and amorti-
zation (000) (1) $ 1,596 $ 1,567 $ 1,568 $ 1,641 $ 43 $ 106 $ 210 $ 233
Operating income (loss)
(000) (2) $(2,326) $(2,799) $(2,429) $(70,890) $ (280) $ 464 $(2,822) $(2,091)
Aircraft block hours
flown 1,066 964 813 1,004 703 935 1,190 2,315
Yield per block hour
flown (3) $ 4,632 $ 4,895 $ 5,820 $ 6,618 $5,895 $6,247 $ 4,108 $ 3,000

- --------
(1) Excludes 1993 fourth quarter depreciation/amortization adjustment--see also
(2).
(2) Includes 1993 fourth quarter depreciation/amortization expense adjustment
of $68,948,000.
(3) The average revenues per block hour flown.

EMPLOYEES

As of December 31, 1994, the Company employed approximately 7,120 full time
equivalent employees at MGM Grand Hotel and its corporate offices.

None of the Company's employees are covered by collective bargaining
agreements.

ITEM 2. PROPERTIES

The Company's principal executive offices are located at 3799 Las Vegas
Boulevard South, Las Vegas, Nevada 89109, where it rents approximately 7,028
square feet from MGM Grand Hotel.

MGM Grand Hotel's principal executive offices are also located at 3799 Las
Vegas Boulevard South, Las Vegas, Nevada, 89109. Certain other office and
warehouse space is leased by MGM Grand Hotel consisting of approximately
132,000 square feet located in Las Vegas, Nevada, for an annual rent of
approximately $374,000.

Through the date of sale of MGM Grand Air on December 31, 1994, MGM Grand Air
maintained its headquarters at 1500 Rosecrans Avenue, Suite 350, Manhattan
Beach, California 90266. The purchaser of MGM Grand Air assumed all lease
liabilities, including a lease for approximately 12,300 square feet, 3,100 of
which is sublet to an unrelated party. MGM Grand Air's annual aggregate rent
payments for its office, terminal and other facilities were approximately
$405,000.

ITEM 3. LEGAL PROCEEDINGS

None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

EXECUTIVE OFFICERS OF THE REGISTRANT

FRED BENNINGER (age 78) has served as a Director of the Company since
February 1986, and as Chairman of the Board since August 1987. He also served
as President of the Company from August 1987 to March 1990. He served as
Chairman of the Executive Committee on the Board of Directors of MGM/UA
Communications Co. from July 1988 to January 1990. He was President of Tracinda
from March 1982 to July 1987 and Chairman of the Executive Committee of MGM
Grand Hotels, Inc. from 1971 to April 1986.

ROBERT R. MAXEY (age 57) has served as President, Chief Executive Officer and
Director of the Company since January 1991. Prior thereto, he was President and
Chief Executive Officer of MarCor Resort Properties, Inc. a hotel/casino
operator.

ALEX YEMENIDJIAN (age 39) has served as Chief Financial Officer of the
Company since May 1994, and Executive Vice President of the Company since June
1992, as Chairman of the Executive Committee from January 1991 to June 1992,
and as President and Chief Operating Officer of the Company from March 1990 to
January 1991. Since January 1990, he has also served as an executive of
Tracinda. Chairman of the Executive Committee and Director of MGM/UA
Communications Co. from January to November 1990. For more than five years
prior thereto, he served as managing partner of Parks, Palmer, Turner and
Yemenidjian, a public accounting firm.

K. EUGENE SHUTLER (age 56) has served as Executive Vice President and General
Counsel and Director of the Company since February 1991. For more than 5 years
prior thereto, he was a member of the law firm of Troy and Gould Professional
Corporation.

SCOTT LANGSNER (age 41) has served as Secretary/Treasurer of the Company
since July 1987.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's Common Stock is listed on the New York Stock Exchange. For
price information with respect to such Common Stock, see page 42 of the
Company's 1994 Annual Report to Stockholders, which information is incorporated
herein by this reference.

As of March 15, 1995, there were approximately 2,827 record holders of the
Company's Common Stock.

The Company has not paid any dividends to date on the Common Stock. The
declaration of dividends (which is within the discretion of the Company's Board
of Directors) will depend on the earnings, financial position and capital
requirements of the Company and other relevant factors existing at the time.

ITEM 6. SELECTED FINANCIAL DATA

The information set forth on page 1 of the Company's 1994 Annual Report to
Stockholders is incorporated herein by this reference.

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

The information set forth on pages 26 to 27 of the Company's 1994 Annual
Report to Stockholders is incorporated herein by this reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information set forth on pages 28 to 42 of the Company's 1994 Annual
Report to Stockholders is incorporated herein by this reference.

ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None

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

Information called for by PART III (Items 10, 11, 12 and 13) has been
omitted, as the Company intends to file with the Securities and Exchange
Commission not later than 120 days after the end of its fiscal year a
definitive Proxy Statement pursuant to Regulation 14A, except that the
information regarding the Company's executive officers called for by Item 10 of
PART III has been included in PART I of this Form 10-K under the heading
"Executive Officers of the Registrant."

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) The financial statements and schedules listed in the accompanying Index
to Financial Statements at page 14 herein are filed as part of this Form 10-K.

(b) Exhibits

The exhibits listed in the accompanying Exhibit Index on pages 17-18 are
filed as part of this Form 10-K.

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 GRAND, INC.

By: Robert R. Maxey
--------------------------------
Robert R. Maxey
President and Chief Executive
Officer
(Principal Executive Officer)

By: Alex Yemenidjian
--------------------------------
Alex Yemenidjian
Executive Vice President and Chief
Financial Officer

Dated: March 20, 1995

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
--------- ----- ----

Fred Benninger Chairman of the Board March 20, 1995
- -----------------------------------
Fred Benninger

Robert R. Maxey President and Chief March 20, 1995
- ----------------------------------- Executive Officer and
Robert R. Maxey Director

James D. Aljian Director March 20, 1995
- -----------------------------------
James D. Aljian

Terry N. Christensen Director March 20, 1995
- -----------------------------------
Terry N. Christensen
Director March , 1995
- -----------------------------------
Glenn C. Cramer
Director March , 1995
- -----------------------------------
Willie D. Davis
Director March , 1995
- -----------------------------------
Alexander M. Haig, Jr.
Director March , 1995
- -----------------------------------
Lee A. Iacocca

SIGNATURE TITLE DATE
--------- ----- ----

Director March , 1995
- -----------------------------------
Kirk Kerkorian

Walter M. Sharp Director March 20, 1995
- -----------------------------------
Walter M. Sharp

K. Eugene Shutler Executive Vice President and March 20, 1995
- ----------------------------------- Director
K. Eugene Shutler

Director March , 1995
- -----------------------------------
E. Parry Thomas

Alex Yemenidjian Executive Vice President, March 20, 1995
- ----------------------------------- Chief Financial Officer,
Alex Yemenidjian and Director

INDEX TO FINANCIAL STATEMENTS
(ITEM 14(A))

ANNUAL
REPORT TO FORM
STOCKHOLDERS 10-K
PAGE PAGE
------------ ----

Report of Independent Public Accountants...................... 41
Consolidated Statements of Operations--For the years ended
December 31, 1994, 1993 and 1992............................. 28
Consolidated Balance Sheets as of December 31, 1994 and 1993.. 29
Consolidated Statements of Cash Flows--For the years ended
December 31, 1994, 1993 and 1992............................. 30
Consolidated Statements of Stockholders' Equity--For the years
ended December 31, 1994, 1993 and 1992....................... 31
Notes to Consolidated Financial Statements.................... 32
Selected Quarterly Financial Results (unaudited).............. 42
Report of Independent Public Accountants on Supplemental
Schedule..................................................... 15
Schedule II--Valuation and Qualifying Accounts................ 16

All other schedules have been omitted either as inapplicable or not required
under the instructions contained in Regulation S-X or because the information
is included in the financial statements or the notes thereto.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SUPPLEMENTAL SCHEDULE

To MGM Grand, Inc.:

We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in MGM Grand, Inc.'s Annual Report
to stockholders incorporated by reference in this Form 10-K, and have issued
our report thereon dated February 17, 1995. Our audits were made for the
purpose of forming an opinion on those statements taken as a whole. The
supplemental Schedule II as shown on page 16 is the responsibility of the
Company's management, is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
consolidated financial statements. This schedule has been subjected to the
auditing procedures applied in the audits of the basic consolidated financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.

Arthur Andersen LLP

Las Vegas, Nevada
February 17, 1995

MGM GRAND, INC. AND SUBSIDIARIES

SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS

YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992

(IN THOUSANDS)

ADDITIONS
CHARGED
BALANCE AT TO COSTS AMOUNTS BALANCE
BEGINNING AND WRITTEN AT END OF
DESCRIPTION OF PERIOD EXPENSES OFF PERIOD
----------- ---------- --------- ------- ---------

FOR THE YEAR ENDED DECEMBER 31, 1994:
Allowances for doubtful accounts...... $ 4,733 $17,166 $4,275 $17,624
======= ======= ====== =======
FOR THE YEAR ENDED DECEMBER 31, 1993:
Allowances for doubtful accounts...... $ 1,531 $ 3,855 $ 653 $ 4,733
======= ======= ====== =======
FOR THE YEAR ENDED DECEMBER 31, 1992:
Allowances for doubtful accounts...... $10,682 $ 238 $9,389 $ 1,531
======= ======= ====== =======

EXHIBIT INDEX

EXHIBIT
NUMBER DESCRIPTION
------- -----------

3(1) Certificate of Incorporation of Company, as amended (incorporated by
reference to Exhibit 3(1) to Registration Statement No. 33-3305).
3(2) Bylaws of Company, as amended (incorporated by reference to Exhibit
3(2) to Registration Statement No. 33-30337).
4 Indenture, dated as of May 1, 1992, among MGM Grand Hotel Finance
Corp. ("MGM Finance"), as issuer, the Company, as guarantor, MGM
Grand Hotel, Inc. ("MGM Grand Hotel"), as obligor with respect to
certain covenants, and U.S. Trust Company of California, N.A., a
national banking corporation validly organized and existing under
the laws of the United States, as Trustee (the "Trustee"), relating
to First Mortgage Notes, including forms of First Mortgage Notes
(incorporated by reference to Exhibit (A)(IV) of the Company's
Quarterly Report on Form 10-Q for the quarterly period ended March
31, 1992).
10(1)* MGM Grand, Inc. Nonqualified Stock Option Plan (incorporated by
reference to Exhibit A to Proxy Statement dated March 30, 1990).
10(2)* MGM Grand, Inc. Incentive Stock Option Plan (incorporated by refer-
ence to Exhibit B to Proxy Statement dated March 30, 1990).
10(3) Credit Agreement among MGM Finance, MGM Grand Hotel and Bank of
America N.T. & S.A. ("Bank Agent") and the banks named therein (the
"Banks") (incorporated by reference to Exhibit 10(8) of the
Company's 1992 10-K), together with amendments.
10(4) Guaranty executed by the Company in favor of Bank Agent and the
Banks (incorporated by reference to Exhibit 10(9) of the Company's
1992 10-K).
10(5) Intercreditor Agreement by and among the Trustee, Bank Agent and
Continental Bank, N.A., a national banking association ("Secured
Lenders' Agent"), together with the consent thereto of MGM Finance
(incorporated by reference to Exhibit 10(10) of the Company's 1992
10-K).
10(6) Collateral Assignment by MGM Finance in favor of Secured Lender's
Agent, together with the consent thereto of the Company, MGM Grand
Hotel, and MGM Grand Movieworld, Inc., a Nevada corporation
("Movieworld") (incorporated by reference to Exhibit 10(11) of the
Company's 1992 10-K).
10(7) Stock Pledge Agreement by and between the Company and Secured Lend-
ers' Agent (incorporated by reference to Exhibit 10(12) of the
Company's 1992 10-K).
10(8) Loan Agreement between MGM Grand Hotel and MGM Finance (incorporated
by reference to Exhibit 10(13) of the Company's 1992 10-K).
10(9) Secured Promissory Note by MGM Grand Hotel in favor of MGM Finance
(incorporated by reference to Exhibit 10(14) of the Company's 1992
10-K).
10(10) Deed of Trust, Assignment of Rents and Security Agreement (the "Deed
of Trust") by MGM Grand Hotel to Nevada Title Company, a Nevada cor-
poration, as trustee, for the benefit of MGM Finance, as beneficiary
(incorporated by reference to Exhibit 10(15) of the Company's 1992
10-K).
10(11) Loan Guaranty by the Company in favor of MGM Finance (incorporated
by reference to Exhibit 10(16) of the Company's 1992 10-K).
10(12)* Letter Agreements, dated December 21, 1990 and February 9, 1993,
between the Company and Robert Maxey (incorporated by reference to
Exhibit 10(17) of the Company's 1992 10-K).
10(13)* Letter Agreements, dated December 13, 1990 and February 26, 1993,
between the Company and K. Eugene Shutler (incorporated by reference
to Exhibit 10(18) of the Company's 1992 10-K).

EXHIBIT
NUMBER DESCRIPTION
- ------ -----------

10(14)* Letter Agreements, dated January 3, 1991 and February 9, 1993, between the Company
and Alex Yemenidjian (incorporated by reference to Exhibit 10(19) of the Company's
1992 10-K).
10(15)* Letter Agreement, dated February 9, 1993, between the Company and Fred Benninger
(incorporated by reference to Exhibit 10(20) of the Company's 1992 10-K).
10(16) Operating Agreement of NEW YORK-NEW YORK HOTEL, LLC. by and between MGM Grand,
Inc. and PRMA Las Vegas, Inc. dated as of December 26, 1994.
10(17) Contribution Agreement with Joint Escrow Instructions by and among PRMA Las Vegas,
Inc. and the Company and NEW YORK-NEW YORK HOTEL, LLC dated as of December 26,
1994.
13** The Company's 1994 Annual Report to Stockholders.
21 List of Subsidiaries.
27 Financial Data Schedule

- --------
* Management contract.
** Except for those portions which are expressly incorporated herein by
reference, such Annual Report is furnished for the information of the
Securities and Exchange Commission and is not to be deemed "filed" as part
of the Report.