Aztar Results Down

11 February 2004

PHOENIX, Arizona – (Press Release) -- Aztar Corporation (NYSE: AZR) today reported its fourth-quarter 2003 financial results. Revenue and EBITDA were lower in the quarter primarily as a result of the impact on operations from the collapse of a parking garage under construction at the Tropicana Atlantic City. Consolidated EBITDA was $30.2 million, which does not include potential profit recovery from claims made under the company's business interruption insurance, compared to $40.3 million in the 2002 quarter. Diluted earnings per share in the 2003 fourth quarter were 32 cents which include 19 cents from an IRS settlement; diluted earnings per share in the 2002 fourth quarter were 31 cents which include three cents from an IRS settlement.

Disruption to Operations from Construction Accident

Operating results in the fourth quarter of 2003 were significantly impacted by the decline in revenue caused by the disruption that followed the tragic accident that occurred on October 30, 2003 at the site of the expansion of the Tropicana Atlantic City. The garage collapse resulted in the temporary evacuation of 600 hotel rooms; the closure of two blocks of Pacific Avenue and two blocks of Brighton Avenue; and obstruction of access to the Tropicana's porte cochere, self-park garage and bus terminal. While Pacific Avenue reopened on January 30, 2004, normal traffic patterns are still hindered by the continuing closure of one block of Brighton Avenue. As a result, the bus terminal remains closed and access to the porte cochere and the self-park garage continues to be accomplished via secondary routes.

Claims for business interruption for fiscal November and December have been filed with the company's insurers in the amount of $7.0 million of EBITDA, and additional claims will be filed for continuing business interruption in 2004. Profit recovery from business interruption insurance will be recorded when the amount of recovery, which may be different from the amount claimed, is agreed to by the insurers. In the fourth quarter, had the insurers agreed to the amount of the claims filed by the company, that recovery would have contributed approximately 12 cents to diluted earnings per share for the quarter.

"With Pacific Avenue now reopened, in early February the Tropicana began augmenting its marketing programs to offset the loss of business caused by the continuing physical disruption as well as the perception of disruption caused by the accident," said Paul E. Rubeli, Aztar chairman of the board and chief executive officer. "The marketing emphasis is on substantially increasing advertising, entertainment and promotions, not on increasing coin giveaways or complimentaries. A new promotion called 'Derby Days' was launched this month and will be heavily advertised; entertainment schedules in our lounges have been significantly expanded; and our hotel room packages will be promoted heavily on television, radio and in newspapers. It is our goal to remain competitive in an aggressive and productive way while we await the opening of our expansion later this year."

Construction Status

As previously reported, construction has resumed on the new 500-room hotel tower and portions of the 200,000-square-foot dining, entertainment and retail complex to be known as The Quarter.

Preparation for removal of the garage debris is underway. Although a final schedule for the reconstruction must await completion of the debris removal and further inspection of the adjacent structure, the preliminary schedule calls for the opening of the expansion by the end of September 2004. The focus of the planning is to open the entire expansion, consisting of The Quarter, a 20,000-square-foot conference center, the hotel tower and a 2,400-space garage, at the same time in a complete and first-class manner.

Income Taxes

The company and the Internal Revenue Service settled some unresolved issues in connection with the examination of the company's income tax returns for the years 1994 through 1999. The settlement resulted in a tax benefit in the 2003 fourth quarter of $6.7 million, equivalent to 19 cents diluted earnings per share. In the fourth quarter of 2002, the company settled the same issues with the IRS in connection with the 1992 and 1993 examination, resulting in a tax benefit of $1.0 million, equivalent to three cents diluted earnings per share.

Capital Expenditures and Share Repurchase

In the fourth quarter of 2003, purchases of property and equipment totaled $44 million. Approximately $13 million of the total was spent on routine expenditures, and $31 million (including $2.6 million of capitalized interest) went for development. There were no share repurchases during the fourth quarter.

Fiscal Year Results

For fiscal 2003, the company reported EBITDA of $175.9 million, compared with $187.0 million in 2002. Diluted earnings per share were $1.66, to which an IRS settlement contributed 19 cents; diluted earnings per share in 2002 were $1.51, to which an IRS settlement contributed three cents.