27 Management’s Discussion and Analysis of Financial Condition and Results of Operations 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 is $141 mil- lion received from the sale of MGM Grand Australia and still held in Australia, pending clarification of the tax rule for repatriated earnings, as discussed earlier. 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. Capital expenditures in 2004 increased over 2003 due to continued spending on major projects at several of our resorts, including: Spending on these two projects totaled approximately $325 million. Other capital expenditures were made for maintenance capital activities, including 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 were  significantly higher than 2002, due largely to 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. Capital expenditures in 2002 included general property improvements at our resorts, such as a room remodel project at The Mirage, new restaurant and nightclub  development at several of our resorts, and various other remodeling projects.  At December 31, 2004 and 2003, we held cash and cash equivalents of $435 mil- lion and $280 million, respectively. We require a certain amount of cash on hand to 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 in 2004 increased from 2003 due to higher operating income offset by higher tax payments. Cash flow from operations in 2003 decreased from 2002, resulting from the decrease in operating income and higher cash paid for taxes.  Our cash flows consisted of the following: Cash Flows – Summary LIQUIDITY AND CAPITAL RESOURCES Cash Flows – Investing Activities Cash Flows – Operating Activities • The Bellagio expansion completed in December 2004; • The theatre for  KÀ at MGM Grand Las Vegas, completed in November 2004. Y ear Ended December 31 (In thousands) 2004 2003 2002 Net cash provided by operations . . . . . . . . . . . . . . $ 829,247 $740,812 $ 846,546 Investing cash flows: Proceeds from the sale of subsidiaries, net . . . . . 345,730 — — Capital expenditures . . . . . . . . . . . . . . . . . . . . . . (702,862) (550,232) (300,039) Investments in unconsolidated affiliates . . . . . . . . (11,602) (41,350) (80,314) Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,981 35,894 9,143 Net cash used in investing activities . . . . . . . . (347,753) (555,688) (371,210) Financing cash flows: Net repayment under bank credit facilities . . . . . (1,574,489) (285,087) (270,126) Issuance of long-term debt . . . . . . . . . . . . . . . . . 1,528,957 600,000 — Purchase of treasury stock . . . . . . . . . . . . . . . . . (348,895) (442,864) (207,590) Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,455 (37,284) 23,231 Net cash used in financing activities . . . . . . . . (325,972) (165,235) (454,485) Net increase in cash and cash equivalents . . . . . . . $ 155,522 $ 19,889 $ 20,851