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Aztar Results Down

22 July 2004

PHOENIX, Arizona – (PRESS RELEASE) -- Aztar Corporation (NYSE: AZR) today reported its second-quarter 2004 financial results. Consolidated EBITDA for the quarter was $46.7 million, which includes $5.0 million of insurance recovery as a result of the delay in the opening of the expansion of Tropicana Atlantic City, less $2.3 million of expenses related to the construction accident that may not be reimbursed by insurance. In the second quarter of 2003, EBITDA was $53.0 million. Diluted earnings per share in the 2004 second quarter were 25 cents, which is after 15 cents associated with a loss on early retirement of debt and which includes four cents attributable to the insurance recovery net of construction accident related expenses. Diluted earnings per share in the 2003 second quarter were 51 cents.

The highlight of the quarter was the strong performance of Tropicana Las Vegas, where EBITDA reached $10.1 million, 55 percent higher than in the prior year. In Atlantic City, the performance of the Tropicana was affected by disruption from the process of construction-accident debris removal, the continued closure of portions of Brighton Avenue, and impacts from the Borgata, which was not open in the prior-year quarter.

Following a recent and comprehensive review of the status of the project and the remaining work to be done, the opening of the Tropicana Atlantic City expansion is targeted now for mid-October 2004. "The opening of The Quarter, a massive dining, entertainment and retail complex which is part of the expansion, will be a remarkable event and milestone for Atlantic City," said Paul Rubeli, chairman of the board and chief executive officer. "Customers will be stunned by the size, beauty and architecture of The Quarter. They will be awed by the diversity of brand names, quality of offerings and opportunities to have fun in The Quarter. We believe customer acceptance and demand will be phenomenal," said Rubeli.

Disruption to Operations from Construction Accident

Operating results in the second quarter of 2004 continued to be impacted by the decline in revenue caused by the disruption that followed the construction accident that occurred on October 30, 2003, at the site of the expansion of Tropicana Atlantic City. Insurance claims for business interruption that occurred in the 2004 second quarter have been filed with the company's insurers in the amount of $6.0 million. Profit recovery from business interruption insurance is recorded when the amount of recovery, which may be different from the amount claimed, is agreed to by the insurers. If the insurers had agreed to the amount of the claims filed by the company on account of business interruption during the 2004 second quarter, that recovery would have contributed approximately 10 cents to diluted earnings per share for the quarter.

Construction Status

Construction at Tropicana Atlantic City progresses on the new 500-room hotel tower, 2,400-car garage, and the 200,000-square-foot dining, entertainment and retail complex to be known as The Quarter. Removal of the garage debris has been completed. The rebuilding of the portion of the garage that collapsed is underway. The opening of the project is targeted now for mid-October 2004.

Balance Sheet Items

Cash and cash equivalents were $50 million at the end of the second quarter of 2004 compared with $56 million at the end of the first quarter of 2004. Long-term debt, including the current portion, was $649 million at the end of the second quarter of 2004, compared with $633 million at the end of the first quarter of 2004.

Capital Expenditures

In the second quarter of 2004, purchases of property and equipment totaled $40 million. Approximately $12 million of the total was spent on routine expenditures, and $28 million (including $3.4 million of capitalized interest) went for development.

Year-to-date Results

For the first half of 2004, the company reported EBITDA of $93.4 million, compared with $97.1 million in the year-earlier half. Diluted earnings in the 2004 first half were 35 cents per share, which is after 15 cents associated with a loss on early retirement of debt and 31 cents associated with an adverse court ruling from the Indiana Tax Court recorded in the first quarter of 2004 and which includes 10 cents of insurance recovery net of construction accident related expense items. In the 2003 first half, diluted earnings were 87 cents per share.

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