Notes to Consolidated Financial Statements 60 At December 31, 2004, 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 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, 2004. The Company is evaluating the impact of provisions of the American Jobs Creation Act of 2004 (the “Act”) that provide for a special one-time tax deduction of 85  percent on certain repatriated earnings of foreign subsidiaries. Additional guidance from Congress and/or the United States Treasury Department will be necessary for the Company to complete its evaluation, as it is not clear at this time whether the Act will provide a benefit to the Company. The Company will complete the  evaluation as promptly as practicable following the issuance of such guidance and adjust taxes accordingly, if necessary. The Company has not yet repatriated the net proceeds from the sale of MGM Grand Australia pending the evaluation. Nonetheless, the Company provided in 2004 deferred U.S. income taxes of $11 million on the basis that such proceeds would be repatriated without the benefit of the 85 percent one-time deduction. Such amount was included in the provision for income taxes on discontinued  operations for 2004. The Company considered the earnings of its Australia  operations permanently reinvested prior to the sale of such operations. If guidance is issued that indicates the planned repatriation qualifies for the  one-time deduction, the Company will recognize a tax benefit of approximately  $7 million as part of continuing operations in the quarter in which such guidance is issued. If no such guidance is issued within the applicable timeframe, then the Company will attempt to permanently reinvest the proceeds in another foreign jurisdiction, such as Macau. In such case, the Company would recognize a tax  benefit of $11 million as part of continuing operations in the quarter in which the reinvestment is made. The Company currently does not have a plan to reinvest the proceeds in such manner. NOTE 10 — 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. At December 31, 2004, the Company was obligated under non-cancelable operat- ing leases and capital leases to make future minimum lease payments as follows: Operating Capital Y ears Ending December 31 (In thousands) Leases Leases 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 9,809 $ 1,996 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,311 1,973 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,131 1,514 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6,962 524 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,937 127 Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 332,239 — Total minimum lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 373,389 6,134 Less: Amounts representing interest. . . . . . . . . . . . . . . . . . . . . . . . . . . .  (1,377) Total obligations under capital leases . . . . . . . . . . . . . . . . . . . . . . . . . . .  4,757 Less: Amounts due within one year . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,496) Amounts due after one year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  $ 3,261