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Aztar Reports Results Down

24 October 2002

PHOENIX, Arizona – (Press Release) -- Aztar Corporation (NYSE: AZR) today announced results for its fiscal third quarter of 2002. Highlights of the quarter, which ended on October 3, 2002, were:

-- Earnings per share of 43 cents, diluted, compared with 46 cents per share in the year-earlier quarter.

-- Operating income of $36.9 million, compared with $37.3 million.

-- EBITDAR of $52.7 million, compared with $54.5 million in the 2001 quarter.

The company's third quarter results were adversely impacted by an unusually low table games hold percentage at the Tropicana Atlantic City. At a normal hold percentage, casino revenues would have been $2.4 million higher and diluted earnings per share would have been approximately 46 cents. But if the Trop's table games hold percentage this quarter had been equal to last year's quarter's unusually high hold percentage, the property's casino revenue would have been $5.8 million higher and the company's diluted earnings per share would have been approximately 49 cents.

"The performance of our riverboat casino in Indiana was a significant positive factor in the third quarter," said Robert M. Haddock, Aztar president and chief financial officer. "After only two months of dockside gaming in Indiana, EBITDAR from our operation was up 21% for the quarter. Early results in October indicate that the strong increases in Indiana in the third quarter are likely to be sustained in the fourth quarter."

The construction of the company's expansion of the Tropicana Atlantic City continues to move forward with minimal, if any, disruptions to current operations. The expansion project, scheduled to open by March 1, 2004, will create the largest hotel, third largest casino and only indoor Las Vegas-style retail/dining/entertainment complex in Atlantic City.

"We are pleased with the progress of our expansion project in Atlantic City and believe more than ever that very high returns will be generated by our investment," said Paul E. Rubeli, chairman of the board and chief executive officer. "The Atlantic City market is strong and vibrant, and 2003 will witness the beginning of a new era with the focus on new projects and new non-casino attractions throughout the city. To maintain our competitive position while our project is being completed, the Tropicana is implementing a series of innovative product-centered marketing initiatives and capital enhancements beginning this quarter and continuing throughout 2003."

Tropicana Atlantic City

Occupancy at the Tropicana Casino and Resort in Atlantic City increased to 97% compared to 94% in last year's quarter. Revenue was $122.6 million, compared with $125.9 million in the year-earlier quarter. The decline in revenue reflects for the most part a decline in table games revenue resulting from a significantly lower hold percentage of 14.6% in the most recent quarter compared with 17.6% a year earlier. Normal table games hold percentage in Atlantic City is 15.8%. Slot revenue for the quarter was up 1%. EBITDAR was $34.8 million compared with $38.5 million; EBITDAR margin was 28.5% versus 30.6%.

Tropicana Las Vegas

The Tropicana Resort and Casino in Las Vegas reported third-quarter revenue of $37.3 million compared with $37.8 million in the year-earlier quarter. EBITDAR was $5.7 million, compared with $5.6 million. EBITDAR margin increased to 15.2% versus 14.8%. Hotel occupancy was 94%, flat with last year, but at a room rate that was lower by more than 4%.

Ramada Express Laughlin

Ramada Express Hotel and Casino in Laughlin, Nevada, reported third-quarter revenue of $21.2 million, compared with $21.7 million. EBITDAR was $4.0 million, compared with $3.8 million. EBITDAR margin increased to 18.7% versus 17.5%. Hotel occupancy was lower in the quarter compared to last year, but room rates were increased by over 13%.

Casino Aztar Evansville

Casino Aztar, the company's riverboat casino in Evansville, Indiana, reported revenue of $31.0 million, up from $26.5 million. The property benefited from a change in State of Indiana rules of operation permitting open boarding of casino patrons that went into effect August 1, 2002. EBITDAR was $10.2 million compared with $8.4 million. EBITDAR margin increased to 33.0% compared with 31.7%.

Casino Aztar Caruthersville

Casino Aztar, the company's riverboat casino in Caruthersville, Missouri, reported third-quarter revenue of $6.0 million, compared with $6.2 million. EBITDAR was $1.1 million compared with $1.0 million. EBITDAR margin increased to 17.9% compared with 16.3%.

Goodwill and Other Intangible Assets

In accordance with Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets," we ceased amortizing the cost of our initial gaming licenses beginning January 4, 2002. If this statement had been effective last year, our third-quarter 2001 diluted earnings per share would have been 47 cents, or one cent higher than reported.

Balance Sheet Items

Cash and cash equivalents were $52 million at the end of the third quarter compared with $57 million at the end of the 2002 second quarter. Long-term debt, including the current portion, was $526 million at the end of the third quarter, compared with $547 million at the end of the second quarter. Our ratio of long-term debt to EBITDA was 2.8 times and EBITDA coverage of interest expense before the reduction for capitalized interest was 4.3 times. There were 37.3 million shares of common stock outstanding at the end of the third quarter.

Year-to-Date Results

For the first nine months of 2002, the company reported consolidated revenue of $635.2 million compared with $637.3 million in the comparable 2001 period. EBITDAR was $156.4 million compared with $153.9 million. EBITDAR margin was 24.6% compared with 24.1%. Operating income was $108.6 million compared with $101.1 million. Net income for the 2002 first nine months was $46.8 million, or $1.19 per share, fully diluted, compared with $45.2 million, or $1.15 per share, fully diluted, for the first nine months of 2001.

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