SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

(X)	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 1, 2004 OR
For the quarterly period ended March 31, 2006 OR
( )	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-5440
AZTAR CORPORATION (Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation or organization)		86-0636534 (I.R.S. Employer Identification No.)
2390 East Camelback Road, Suite 400, Phoenix, Arizona 85016 (Address of principal executive offices) (Zip Code)
(602) 381-4100 (Registrant¢ s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes X No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one): Large Accelerated Filer X Accelerated Filer Non-Accelerated Filer
At July 29, 2004, the registrant had outstanding 34,611,751 shares of its common stock, $.01 par value.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No X
At April 30, 2006, the registrant had outstanding 36,035,321 shares of its common stock, $.01 par value.

AZTAR CORPORATION AND SUBSIDIARIES

FORM 10-Q

INDEX

PART I.	FINANCIAL INFORMATION		PAGE ----
Item 1.		Financial Statements
		Consolidated Balance Sheets at July 1, 2004 and January 1, 2004	3
		Consolidated Balance Sheets at March 31, 2006 and December 31, 2005	3
		Consolidated Statements of Operations for the quarters and six months ended July 1, 2004 and July 3, 2003	5
		Consolidated Statements of Operations for the quarters ended March 31, 2006 and March 31, 2005	5
		Consolidated Statements of Cash Flows for the six months ended July 1, 2004 and July 3, 2003	6
		Consolidated Statements of Cash Flows for the quarters ended March 31, 2006 and March 31, 2005	6
		Consolidated Statements of Shareholders' Equity for the six months ended July 1, 2004 and July 3, 2003	8
		Consolidated Statements of Shareholders' Equity for the quarters ended March 31, 2006 and March 31, 2005	8
		Notes to Consolidated Financial Statements	9
Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations	1819
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.		Controls and Procedures	30
PART II.	OTHER INFORMATION
Item 1.		Legal Proceedings	30
Item 2.		~~Changes~~Unregistered inSales ~~Securities, Use~~ of ~~Proceeds~~Equity Securities and ~~Issuer~~Use ~~Purchases~~ of ~~Equity Securities~~Proceeds	3231
Item 4.		Submission of Matters to a Vote of Security Holders	33
Item 6.		Exhibits	32
Item 6.		Exhibits and Reports on Form 8-K	33

AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except share data)

Assets Current assets: Cash and cash equivalents Accounts receivable, net Construction accident receivables Refundable income taxes Inventories Prepaid expenses Deferred income taxes Total current assets Investments Property and equipment: Buildings, riverboats and equipment, net Land Construction in progress Leased under capital leases, net Intangible assets Other assets ~~July~~March 131, ~~2004~~2006 $ 5070,~~014~~138 1623,~~741~~771 61,~~098~~599 --3,003 78,~~958~~196 1012,~~945~~519 1411,~~945~~026 ~~106~~130,~~701~~252 1925,~~662~~931 ~~724~~998,~~668~~699 216,~~109~~166 ~~217~~23,~~090~~348 354 1,~~157~~238,~~902~~217 3433,~~792~~591 5986,~~819~~176 $1,~~378~~514,~~876~~167 ========== ~~January~~December 131, ~~2004~~2005 $ 7088,~~586~~199 1726,~~043~~490 32,~~345~~949 51,~~587~~288 7,~~576~~382 1013,~~049~~543 1411,~~945~~026 ~~129~~150,~~131~~877 1925,~~586~~215 ~~738~~1,~~978~~008,372 216,~~103~~ 166 18,~~544~~463 449 1,~~121~~243,~~669~~010 3433,~~616~~722 42102,~~771~~510 $1,~~347~~555,~~773~~334 ==========

The accompanying notes are an integral part of these financial statements.

AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (unaudited)(continued)
(in thousands, except share data)

Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accruals Accrued payroll and employee benefits Accrued interest payable Accrued rent ~~Income taxes payable~~ Current portion of long-term debt Current portion of other long-term liabilities Total current liabilities Long-term debt Other long-term liabilities Deferred income taxes Contingencies and commitments Series B convertible preferred stock (redemption value $1420,~~662~~267 and $1215,~~187~~701) Shareholders' equity: Common stock, $.01 par value (3435,~~611~~922,~~751~~130 and 3435,~~270~~778,~~803~~952 shares outstanding) Paid-in capital Retained earnings Accumulated other comprehensive loss Less: Treasury stock Total shareholders' equity ~~July~~March 131, ~~2004~~2006 $ 6792,~~946~~323 2725,~~210~~839 89,~~551 10,~~566 ~~10,097~~576 1,~~355~~288 ~~972~~814 ~~126~~130,~~697~~406 ~~647~~675,~~474~~457 2016,~~576~~039 2945,~~057~~135 54,~~056~~474 ~~531~~547 ~~448~~479,~~360~~083 ~~304~~376,~~056~~678 (1,~~526~~899) (~~201~~211,~~405~~753) ~~550~~642,~~016~~656 $1,~~378~~514,~~876~~167 ========== ~~January~~December 131, ~~2004~~2005 $ 6592,~~746~~835 2826,~~133~~794 97,~~478~~577 ~~10,755~~760 ~~-- 16~~1,~~963~~293 ~~981~~824 ~~132~~130,~~056~~083 ~~628~~721,~~603~~676 1916,~~825~~419 2746,~~462~~006 54,~~253~~620 ~~526~~546 ~~441~~474,~~498~~637 ~~291~~373,~~573~~897 (1,~~526~~899) (~~197~~210,~~497~~651) ~~534~~636,~~574~~530 $1,~~347~~555,~~773~~334 ==========

The accompanying notes are an integral part of these financial statements.

AZTAR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) For the periods ended ~~July~~March 131, ~~2004~~2006 and ~~July~~March 331, ~~2003~~2005 (in thousands, except per share data)

	Second Quarter		Six Months
		First Quarter
Revenues Casino Rooms Food and beverage Other Costs and expenses Casino Rooms Food and beverage Other Marketing General and administrative Utilities Repairs and maintenance Provision for doubtful accounts Property taxes and insurance Rent Construction accident related Construction accident insurance recoveries Depreciation and amortization Operating income Interest income Interest expense Loss on early retirement of debt Income before income taxes Income taxes Net income Net income per common share Net income per common share assuming dilution Weighted-average common shares applicable to: Net income per common share Net income per common share assuming dilution	2004 $158,702 23,249 14,267 10,041 206,259 69,127 11,044 13,934 7,597 19,142 20,397 4,584 6,460 160 7,577 2,207 2,319 (5,000) 13,212 172,760 33,499 212 (8,735) (8,621) 16,355 (7,008) $ 9,347 ======== $ .26 $ .25 34,556 36,534	2003 $169,830 20,017 14,638 10,034 214,519 71,479 10,275 13,764 7,725 19,657 18,615 4,109 6,205 309 7,260 2,195 -- -- 12,954 174,547 39,972 204 (9,213) -- 30,963 (12,172) $ 18,791 ======== $ .53 $ .51 35,015 36,499	2004 $317,651 43,464 27,779 19,131 408,025 137,533 20,617 26,922 14,942 38,150 41,325 8,805 12,635 493 15,030 4,248 2,360 (8,500) 26,235 340,795 67,230 379 (17,409) (8,621) 41,579 (28,565) $ 13,014 ======== $ .36 $ .35 34,439 35,871	2003 $331,336 37,695 29,027 19,477 417,535 141,175 19,469 27,438 15,226 38,804 37,635 8,223 12,439 751 14,956 4,274 -- -- 25,502 345,892 71,643 396 (18,766) -- 53,273 (20,937) $ 32,336 ======== $ .90 $ .87 35,602 36,965
Revenues Casino Rooms Food and beverage Other Costs and expenses Casino Rooms Food and beverage Other Marketing General and administrative Utilities Repairs and maintenance Provision for doubtful accounts Property taxes and insurance Rent Construction accident related Construction accident insurance recoveries Merger related Depreciation and amortization Tropicana Las Vegas capitalized development costs write-off Operating income Other income Interest income Interest expense Income before income taxes Income taxes Net income Net income per common share Net income per common share assuming dilution Weighted-average common shares applicable to: Net income per common share Net income per common share assuming dilution		2006 $176,557 25,347 15,050 11,681 228,635 70,300 11,619 14,610 7,798 20,736 24,607 6,304 7,007 493 8,819 2,330 1,644 (4,789) 884 19,017 26,021 217,400 11,235 2,640 394 (14,136) 133 3,081 $ 3,214 ======== $ .08 $ .08 35,876 36,963	2005 $171,822 25,128 14,981 11,391 223,322 69,105 10,998 14,125 7,925 25,034 26,340 6,368 6,620 378 8,520 1,938 409 (225) -- 16,346 -- 193,881 29,441 1,573 242 (13,862) 17,394 (7,483) $ 9,911 ======== $ .28 $ .27 34,788 36,886

The accompanying notes are an integral part of these financial statements.

AZTAR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) For the periods ended ~~July~~March 131, ~~2004~~2006 and ~~July~~March 331, ~~2003~~2005 (in thousands)

	Six Months
	First Quarter
Cash Flows from Operating Activities Net income Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization Provision for losses on accounts receivable Loss on early retirement of debt Loss on reinvestment obligation Rent expense Deferred income taxes Change in assets and liabilities: (Increase) decrease in receivables (Increase) decrease in refundable income taxes (Increase) decrease in inventories and prepaid expenses Increase (decrease) in accounts payable, accrued expenses and income taxes payable Other items, net Net cash provided by (used in) operating activities Cash Flows from Investing Activities Reduction in investments Purchases of property and equipment Additions to other long-term assets Net cash provided by (used in) investing activities Cash Flows from Financing Activities Proceeds from issuance of long-term debt Proceeds from issuance of common stock Principal payments on long-term debt Premium paid on early retirement of debt Principal payments on other long-term liabilities Debt issuance costs Repurchase of common stock Preferred stock dividend Redemption of preferred stock Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2004 $ 13,014 27,013 493 8,621 347 229 1,595 (2,923) 5,587 (1,792) 16,546 626 69,356 1,851 (64,611) (16,434) (79,194) 447,200 1,941 (445,220) (6,354) (11) (5,700) (1,858) (206) (526) (10,734) (20,572) 70,586 $ 50,014 =========	2003 $ 32,336 26,253 751 -- 35 230 1,914 (1,010) 4,593 (2,547) (2,915) 567 60,207 1,388 (64,300) (13,248) (76,160) 178,100 29 (124,715) -- (24) -- (31,225) (221) (303) 21,641 5,688 52,896 $ 58,584 =========
Cash Flows from Operating Activities Net income Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization Tropicana Las Vegas capitalized development costs write-off Stock options compensation expense Provision for losses on accounts receivable Loss on reinvestment obligation Rent expense Deferred income taxes Proceeds from insurance Stock options tax benefit Change in assets and liabilities: (Increase) decrease in receivables (Increase) decrease in refundable income taxes (Increase) decrease in inventories and prepaid expenses Increase (decrease) in accounts payable, accrued expenses and income taxes payable Other items, net Net cash provided by (used in) operating activities Cash Flows from Investing Activities Reduction in investments Return of insurance deposits Proceeds from insurance Reduction in other assets Purchases of property and equipment Additions to other long-term assets Net cash provided by (used in) investing activities Cash Flows from Financing Activities Proceeds from issuance of long-term debt Proceeds from issuance of common stock Stock options tax benefit Principal payments on long-term debt Repurchase of common stock Preferred stock dividend Redemption of preferred stock Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2006 $ 3,214 19,591 26,021 1,136 493 461 332 (871) (3,754) (777) 3,463 (1,715) 202 (4,550) (279) 42,967 425 -- 3,754 3,011 (14,199) (9,279) (16,288) 79,640 1,996 777 (125,380) (1,102) (179) (492) (44,740) (18,061) 88,199 $ 70,138 =========	2005 $ 9,911 16,901 -- -- 378 251 150 373 -- -- (3,722) 19,457 574 7,511 (5,274) 46,510 243 6,000 -- 4,313 (39,409) (6,635) (35,488) 99,500 145 -- (108,871) -- (194) (177) (9,597) 1,425 52,908 $ 54,333 =========

The accompanying notes are an integral part of these financial statements.

AZTAR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)(continued) For the periods ended ~~July~~March 131, ~~2004~~2006 and ~~July~~March 331, ~~2003~~2005 (in thousands)

	Six Months
	First Quarter
Supplemental Cash Flow Disclosures Summary of non-cash investing and financing activities: Exchange of common stock in lieu of cash payments in connection with the exercise of stock options Current liabilities incurred for other assets Cash flow during the period for the following: Interest paid, net of amount capitalized Income taxes paid	2004 $ 2,050 -- $ 17,558 8,410	2003 $ -- 1,919 $ 18,108 11,518
Supplemental Cash Flow Disclosures Summary of non-cash investing and financing activities: Other long term liabilities reduced for property and equipment Cash flow during the period for the following: Interest paid, net of amount capitalized Income taxes paid (refunded)	2006 $ 795 $ 11,572 (1,810)	2005 $ -- $ 11,841 (17,973)

The accompanying notes are an integral part of these financial statements.

AZTAR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited) For the periods ended ~~July~~March 131, ~~2004~~2006 and ~~July~~March 331, ~~2003~~2005 (in thousands~~, except number of shares~~)

	Six Months
	Common Stock	Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss - Minimum Pension Liability Adjustment	Treasury Stock	Total
Common stock: Beginning balance Stock options exercised for 511,000 and 3,666 shares Ending balance Paid-in capital: Beginning balance Stock options exercised Tax benefit from stock options exercised Ending balance Retained earnings: Beginning balance Preferred stock dividend and losses on redemption Net income Ending balance Accumulated other comprehensive loss - minimum pension liability adjustment: Beginning and ending balance Treasury stock: Beginning balance Repurchase of 2,307,305 shares of common stock at cost in 2003 Repurchase of 170,052 shares of common stock, at cost, in connection with stock options exercised in 2004 Ending balance	2004 $ 526 5 531 441,498 3,986 2,876 448,360 291,573 (531) 13,014 304,056 (1,526) (197,497) -- (3,908) (201,405) $ 550,016 =========	2003 $ 524 -- 524 439,275 29 10 439,314 231,420 (348) 32,336 263,408 (612) (155,253) (31,225) -- (186,478) $ 516,156 =========
Balance, December 30, 2004 Net income Minimum pension liability adjustment, net of income tax Total comprehensive income Stock options exercised Tax benefit from stock options exercised Preferred stock dividend and losses on redemption Balance, March 31, 2005	$ 533 $ 533 ======	$451,404 145 157 $451,706 ========	$319,018 9,911 (220) $328,709 ========	$ (3,259) 1,556 $ (1,703) =========	$(201,405) $(201,405) =========	$566,291 9,911 1,556 11,467 145 157 (220) $577,840 ========

	Common Stock	Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss - Minimum Pension Liability Adjustment	Treasury Stock	Total
Balance, December 31, 2005 Net income Minimum pension liability adjustment, net of income tax Total comprehensive income Stock options compensation expense Stock options exercised Tax benefit from stock options exercised Preferred stock dividend and losses on redemption Balance, March 31, 2006	$ 546 1 $ 547 ======	$474,637 1,136 1,995 1,315 $479,083 ========	$373,897 3,214 (433) $376,678 ========	$ (1,899) -- $ (1,899) =========	$(210,651) (1,102) $(211,753) =========	$636,530 3,214 -- 3,214 1,136 894 1,315 (433) $642,656 ========

The accompanying notes are an integral part of these financial statements.

AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

Note 1: General The consolidated financial statements reflect all adjustments, such adjustments being normal recurring accruals, which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented; interim results, however, may not be indicative of the results for the full year. The Company changed its fiscal year to the calendar year, effective December 31, 2005. The Company previously used a 52/53 week fiscal year ending on the Thursday nearest December 31. The 2006 first quarter reflects the Company's results of operations for a 90-day period beginning January 1, 2006 and ending March 31, 2006. The 2005 first quarter contained 91 days, beginning on December 31, 2004 and ending on March 31, 2005. The notes to the interim consolidated financial statements are presented to enhance the understanding of the financial statements and do not necessarily represent complete disclosures required by generally accepted accounting principles. The interest that was capitalized during the ~~second~~first quarter ~~and six months~~ ended ~~2004~~2006 was $3110,~~428,~~000 and ~~$6,314,000, respectively; it was $1,860,000 and $3,353,000~~ during the ~~second~~first quarter ~~and~~ended ~~six~~2005, ~~months~~it ~~ended~~was ~~2003~~$12,000. Capitalized costs related to development projects, included in other assets, were $1610,~~271~~435,000 and $1125,~~612~~008,000 at ~~July~~March 131, ~~2004~~2006 and ~~January~~December 131, ~~2004~~2005, respectively. For additional information regarding significant accounting policies, long-term debt, lease obligations, stock options, accounting for the impact of the October 30, 2003 construction accident, and other matters applicable to the Company, reference should be made to the Company's Annual Report to Shareholders for the year ended ~~January~~December 131, ~~2004~~2005. Certain reclassifications have been made in the ~~January~~2005 1,Consolidated ~~2004~~Statement ~~Consolidated~~of ~~Balance~~Cash ~~Sheet~~Flows in order to be comparable with the ~~July~~2006 ~~1, 2004~~ presentation. Equity Instruments In ~~addition,~~December ~~business interruption insurance recovery of $3~~2004,~~500,000~~ ~~for~~ the ~~first~~Financial ~~quarter~~Accounting ~~ended~~Standards ~~April~~Board 1,issued ~~2004, was reclassified in the Consolidated~~ Statement of ~~Operations~~Financial ~~from~~Accounting ~~revenue~~Standards toNo. ~~construction~~123 ~~accident~~(revised ~~insurance~~2004), ~~recoveries~~"Share-Based inPayment". SFAS ~~operating~~123(R), ~~expenses~~which became effective for the ~~six~~Company ~~months~~on ~~ended~~January ~~July~~ 1, ~~2004. Equity~~2006, ~~Instruments The~~establishes ~~fair-value-based~~standards ~~method~~for ofthe accounting isfor ~~used~~transactions ~~for~~in ~~equity~~which ~~instruments~~an ~~issued~~entity toexchanges ~~nonemployees~~its equity instruments for goods or services. ~~The~~SFAS ~~intrinsic-value-based~~123(R) ~~method~~supersedes ~~of accounting is used for stock-based employee compensation plans. The Company has elected to follow~~ Accounting Principles Board Opinion No. 25, ~~entitled~~ "Accounting for Stock Issued to Employees" and related ~~Interpretations~~interpretations, inwhich ~~accounting for its stock-based employee compensation arrangements because~~ the ~~alternative~~Company ~~fair-value-based~~previously ~~method~~elected ofto ~~accounting~~follow. In ~~provided~~addition, ~~for~~SFAS ~~under~~123(R) replaces Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123, ~~entitled~~ "Accounting for Stock-Based Compensation". SFAS 123(R) requires ~~use~~a public entity to measure the cost of ~~option~~employee ~~valuation~~services ~~models~~received in exchange for an award of equity instruments based on the grant-date fair value of the award and the estimated number of awards that ~~were~~are ~~not~~expected ~~developed~~to ~~for~~vest. That ~~use~~cost inis ~~valuing~~recognized over the period during which an employee ~~stock~~is ~~options.~~required ~~Under~~to ~~APB~~provide 25service in exchange for the award, ~~because~~which is usually the ~~exercise~~vesting ~~price~~period. As ofpermitted under SFAS 123(R), the Company's ~~stock~~has ~~options~~elected ~~equals~~to apply a modified prospective application as the ~~market~~transition ~~price~~method offrom APB 25 to SFAS 123(R). Compensation cost for the ~~underlying~~portion ~~stock~~of onawards for which the ~~date~~requisite service has not been rendered that are outstanding as of ~~grant,~~the norequired ~~compensation~~effective ~~expense~~date is recognized~~. Stock~~ ~~options~~as ~~that~~the ~~were~~requisite ~~granted~~service ~~during~~is rendered on or after the ~~second~~required ~~quarter~~effective ~~and~~date ~~six~~based ~~months~~on ~~ended~~the ~~2004~~grant-date ~~were~~fair ~~525,000;~~value ~~there~~as ~~were~~previously ~~608,000~~determined ~~granted~~under ~~during~~SFAS 123. For periods before the ~~second~~required ~~quarter~~effective ~~and~~date, ~~six~~companies ~~months~~may ~~ended~~elect ~~2003. Pro~~to ~~forma~~adjust ~~information~~financial ~~regarding~~statements ~~net~~of ~~income~~prior ~~and~~periods ~~earnings~~on ~~per~~a ~~share~~basis isconsistent with the pro forma disclosures required for those periods by SFAS 123,. The ~~and~~Company has ~~been~~elected ~~determined~~not asto ifadjust ~~the~~its ~~Company~~financial ~~had~~statements ~~accounted~~ for ~~its~~prior ~~stock~~periods. The ~~option~~Company ~~plans~~recognized ~~under~~$1,136,000 of compensation expense in the ~~fair-value-based~~Consolidated ~~method~~Statement of ~~that~~Operations ~~Statement~~during the quarter ended March 31, 2006. ~~The~~After ~~fair~~the ~~value~~related ~~for~~income ~~these~~tax ~~options~~effect, ~~was~~this ~~estimated~~resulted atin ~~the~~a ~~date~~decrease ofin ~~grant~~net orincome, ~~modification~~net ~~using~~income aper ~~Black-Scholes~~common ~~option~~share ~~pricing~~and ~~model~~net income per common share assuming dilution of $728,000, $.02 and $.02, respectively. Under APB 25, there would not have been any compensation

AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

~~For~~expense. ~~purposes~~The Company classifies its stock-based compensation expense in the Consolidated Statement of Operations in a manner consistent with its classification of cash compensation paid to the same employees. Also during the quarter ended March 31, 2006, in the Consolidated Statement of Cash Flows, the Company decreased cash from operating activities and increased cash from financing activities by $777,000 related to tax benefits from stock options exercised. Under APB 25, the Company would not have decreased cash from operating activities or increased cash from financing activities by $777,000. As of March 31, 2006, the Company had $5,796,000 of unrecognized compensation cost related to awards granted under its stock option plans. The Company expects to recognize that cost over a weighted-average period of 1.8 years. Prior to January 1, 2006, the Company measured the cost of its stock options by applying the intrinsic-value-based method of accounting as prescribed by APB 25 and related interpretations. Under APB 25, because the exercise price of the Company's stock options equaled the market price of the underlying stock on the date of grant, no compensation expense was recognized. Because of the prior election to follow APB 25, the Company is required to continue providing pro forma ~~disclosures~~information regarding net income and earnings per share for all reporting periods ending prior to January 1, 2006 as if the ~~estimated~~Company had accounted for its stock option plans under the fair-value-based method of SFAS 123. The fair value for options granted was estimated at the date of grant or modification using a Black-Scholes option pricing model with the following weighted-average assumptions for the 2005 fiscal year: risk-free interest rate of 3.8%, no dividend, volatility factor of the expected market price of the Company's common stock of .36 and an expected life of the option of 5.0 years. The risk-free interest rate was derived from the annual interest yield on U.S. Treasury zero-coupon issues with a remaining term equal to the expected term of the options. The isannual interest yield was taken from an authoritative published source such as the Wall Street Journal on the date the options were granted. Expected volatility was estimated through a review of historical stock price volatility adjusted for future expectations. The expected term of the options represented the period of time options granted were expected to be outstanding and was estimated through a review of historical exercise behavior and other factors expected to influence behavior such as expected volatility and employees' ages and lengths of service. During the 2002 fiscal year, the Company began including a "retirement eligible" clause in its stock option grants, whereby stock options granted to employees who have reached the age of sixty and who have provided ten years of service automatically vest on the employee's retirement date. For purposes of the SFAS 123 pro forma disclosures, the Company has historically amortized the fair value of the options to expense over the options' vesting period, a methodology referred to as the nominal vesting approach. ~~The~~Under ~~pro~~the ~~forma~~nominal ~~information~~vesting approach, if a retirement eligible employee elected retirement before the end of the options' vesting period, the Company recognized an expense on the retirement date for the ~~periods~~remaining ~~ended~~unamortized ~~July~~compensation 1cost. Starting in 2006, ~~2004~~the ~~and~~Company ~~July~~adopted 3the non-substantive vesting approach for new options granted. Under the non-substantive approach, ~~2003~~the fair value of the options granted to retirement eligible employees is asexpensed ~~follows~~immediately ~~(in~~at ~~thousands~~the date of grant. For those employees who become retirement eligible during the vesting period, ~~except~~the ~~per~~expense ~~share~~is ~~data):~~amortized over the period from the grant date to the date of retirement eligibility. The Company will continue to use the nominal vesting approach after January 1, 2006 for all options granted prior to January 1, 2006. The computations of pro forma net income under SFAS 123 using both the nominal vesting approach and the non-substantive vesting approach are presented below.

	Second Quarter		Six Months
Net income, as reported Deduct: Total stock-based employee compensation expense determined under the fair-value-based method of accounting, net of income tax benefit Pro forma net income Net income per common share: As reported Pro forma Net income per common share assuming dilution: As reported Pro forma	2004 $ 9,347 (896) $ 8,451 ======== $ .26 $ .24 $ .25 $ .23	2003 $ 18,791 (849) $ 17,942 ======== $ .53 $ .51 $ .51 $ .49	2004 $ 13,014 (1,708) $ 11,306 ======== $ .36 $ .31 $ .35 $ .30	2003 $ 32,336 (1,557) $ 30,779 ======== $ .90 $ .85 $ .87 $ .83

Note 2: Las Vegas Tropicana Development

AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

The pro forma information for the period ended March 31, 2005 using the nominal vesting approach is as follows (in thousands, except per share data):

~~Note~~Net 3income, as reported Deduct: ~~Long~~ Total stock-~~term~~based ~~Debt Long~~employee compensation expense determined under the fair-~~term~~value-based ~~debt~~method ~~consists~~of accounting, net of ~~the~~income ~~following~~tax ~~(in~~benefit ~~thousands)~~Pro forma net income Net income per common share: As reported Pro forma Net income per common share assuming dilution: As reported Pro forma First Quarter 2005 $ 9,911 (1,623) $ 8,288 ======= $ .28 $ .23 $ .27 $ .22

8 The ~~7/8%~~pro ~~Senior~~forma ~~Subordinated~~information ~~Notes~~for ~~Due~~the ~~2007~~periods 9%ended ~~Senior~~March ~~Subordinated Notes Due 2011 7 7/8% Senior Subordinated Notes Due 2014 Revolver; floating rate~~31, ~~4.9%~~2006 atand ~~July~~March 131, ~~2004; matures June 30,~~ 2005 ~~Term~~assuming ~~Loan;~~the ~~floating~~Company ~~rate,~~had ~~5.5%~~previously atadopted ~~July~~the 1,non-substantive ~~2004;~~vesting ~~matures~~approach ~~June~~is ~~30,~~as ~~2005~~follows Tropicana Enterprises Loan; floating rate, 4.9% at July 1, 2004; matures June 30, 2005 Obligations under capital leases Less current portion July 1, 2004 $ 42,680 175,000 300,000 44,750 47,500 38,769 130 648,829 (~~1,355)~~in ~~$647~~thousands,~~474~~ ~~========~~except ~~January~~per 1,share ~~2004 $235,000 175,000 -- 146,500 47,750 41,116 200 645,566 (16,963~~data) ~~$628,603 ========~~:

On June 2, 2004, the Company issued $300,000,000 principal amount of 7 7/8% Senior Subordinated Notes due June 15, 2014 ("7 7/8% Notes"). Interest is payable semiannually on June 15 and December 15, beginning on December 15, 2004. The net proceeds from the issuance of the 7 7/8% Notes, after payment of the fees and expenses of the issuance, were approximately $294,300,000. A portion of the net proceeds of the 7 7/8% Notes was used for a redemption on June 2, 2004 of 8 7/8% Senior Subordinated Notes due 2007 ("8 7/8% Notes") that were tendered under an offer to purchase that was issued by the Company on April 22, 2004. The balance of the net proceeds of the 7 7/8% Notes was used to repay outstanding borrowings under the Revolver. On July 7, 2004, the Company redeemed the remaining principal amount of $42,680,000 of the 8 7/8% Notes at 102.958% of the principal amount plus accrued interest. The redemption was funded primarily by borrowings under the Revolver. At any time prior to June 15, 2009, the 7 7/8% Notes are redeemable at the option of the Company, in whole or in part, at a price of 100% of the principal amount plus a redemption premium plus accrued and unpaid interest. The redemption premium will be equal to the greater of (1) 1% of the principal amount or (2) the excess of (A) the sum of the present values of (i) 103.938% of the principal amount and (ii) all required interest payments through June 15, 2009, excluding accrued but unpaid interest, computed in each case using a discount rate equal to the treasury rate at the time of redemption plus 50 basis points over (B) the principal amount. On or after June 15, 2009, the 7 7/8% Notes are redeemable at the option of the Company, in whole or in part, at prices from 103.938% of the principal amount plus accrued and unpaid interest declining to 100% of the principal amount plus accrued and unpaid interest beginning June 15, 2012. At any time on or prior to June 15, 2007, the Company may redeem up to 35% of the aggregate principal amount of the notes issued under the indenture for the 7 7/8% Notes with the net proceeds of one or more equity offerings by the Company at a redemption price of 107.875% of the principal amount plus accrued and unpaid interest, provided that (1) at least 65% of the principal amount of the 7 7/8% Notes issued remains outstanding immediately after such redemption and (2) the redemption occurs within 60 days of the closing of such equity offering. The 7 7/8% Notes, ranked pari passu with the 8 7/8% Notes and 9% Senior Subordinated Notes due 2011 ("9% Notes"), are general unsecured obligations of the Company and are subordinated in right of payment to all present and future senior indebtedness (as defined) of the Company. Upon change of control of the Company, the holders of the 7 7/8% Notes would have the right to require repurchase of the notes at 101% of

	First Quarter
Net income, as reported Add (Deduct): Impact of stock-based employee compensation expense if the non-substantive approach had been used to amortize compensation expense determined under the fair- value-based method of accounting, net of income tax Pro forma net income Net income per common share: As reported Pro forma Net income per common share assuming dilution: As reported Pro forma	2006 $ 3,214 247 $ 3,461 ======= $ .08 $ .08 $ .08 $ .08	2005 $ 9,911 (648) $ 9,263 ======= $ .28 $ .26 $ .27 $ .25

AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

the principal amount plus accrued and unpaid interest. Certain covenants in the 7 7/8% Notes limit the ability of the Company to incur indebtedness, make certain payments or engage in mergers, consolidations or sales of assets. The Company's Revolver, Term Loan and Tropicana Enterprises Loan all mature on June 30, 2005. On July 22, 2004, the Company obtained a $675,000,000 senior secured credit facility that consists of a five-year revolving credit facility of $550,000,000 and a five-year term loan facility of $125,000,000. The Company used these credit facilities to pay off the Revolver, Term Loan and Tropicana Enterprises Loan. Accordingly, the Company classified all but $1,250,000 (which is the current portion of the new $125,000,000 term loan) of the Revolver, Term Loan and Tropicana Enterprises Loan as long-term at July 1, 2004. Note 42: ~~Other~~ Long-term ~~Liabilities~~ Debt ~~Other long~~Long-term ~~liabilities~~debt ~~consist~~consists of the following (in thousands):

~~Deferred~~9% ~~compensation~~Senior ~~and~~Subordinated ~~retirement~~Notes ~~plans~~Due ~~Deferred~~2011 ~~income~~7 ~~Las~~7/8% ~~Vegas~~Senior ~~Boulevard~~Subordinated ~~beautification~~Notes ~~assessment~~Due 2014 Revolver; floating rate, 6.5% at March 31, 2006; matures July 22, 2009 Term Loan; floating rate, 6.5% at March 31, 2006; matures July 22, 2009 Contract payable; 7.2%; matures 2014 Obligations under capital leases Less current portion ~~July~~March 131, ~~2004~~2006 $175,000 18300,~~839~~000 278,~~405~~600 ~~304~~122,813 21322 10 676,~~548~~745 (~~972~~1,288) $ 20675,~~576~~457 ======== ~~January~~December 131, ~~2004~~2005 $175,000 17300,~~960~~000 2124,~~531~~500 ~~315~~123,125 20328 16 722,~~806~~969 (~~981~~1,293) $ 19721,~~825~~676 ========

~~Note~~The Revolver and Term Loan contain quarterly financial tests, including a minimum fixed charge coverage ratio of 1.35 to 1.00 and maximum ratios of total debt and senior debt to operating cash flow of 4.5 to 1.0 and 2.5 to 1.0, respectively, at March 31, 2006. The actual fixed charge coverage ratio was 2.72 to 1.00 and the actual total debt and senior debt to operating cash flow ratios were 3.06 to 1.0 and 1.08 to 1.0, respectively at March 31, 2006. Since March 31, 2006, the Company has made borrowings and repayments under the Revolver. The outstanding balance of the Revolver on April 30, 2006 was $85,500,000. Note 3: ~~Benefit~~Other ~~Plans~~Long-term Liabilities Other long-term liabilities consist of the following (in thousands):

	Defined Benefit Plans Second Quarter		Defined Benefit Plans Six Months
	2004	2003	2004	2003
Service cost Interest cost Amortization of prior service cost Recognized net actuarial loss	$ 23 242 28 224 $ 517 ======	$ 21 203 55 107 $ 386 ======	$ 47 482 57 448 $1,034 ======	$ 45 407 112 216 $ 780 ======

Deferred compensation and retirement plans
Asset retirement obligations
Las Vegas Boulevard beautification
assessment

Less current portion

March 31,
    2006

$ 16,016
566

     271
16,853
    (814)
$ 16,039
========

December 31,
    2005

$ 15,630
1,342

     271
17,243
    (824)
$ 16,419
========

	Deferred Compensation Plan Second Quarter		Deferred Compensation Plan Six Months
	2004	2003	2004	2003
Service cost Interest cost Cash surrender value increase net of premium expense	$ 2 96 (85) $ 13 ======	$ 3 100 (73) $ 30 ======	$ 5 192 (170) $ 27 ======	$ 6 200 (155) $ 51 ======

Note 4: Stock Options

The Company's 1989 Stock Option and Incentive Plan ("1989 Plan") expired in June 1999. The 1989 Plan had authorized the grant of up to 6,000,000 shares of the Company's common stock pursuant to options, restricted shares and performance shares to officers and key employees of the Company. During 1999, the Company adopted the 1999 Employee Stock Option and Incentive Plan ("1999 Plan"). The 1999 Plan has authorized the grant of up to 4,000,000 shares of the Company's common stock pursuant to options, stock appreciation rights, restricted shares, deferred shares and performance shares to officers and key employees of the Company. During 2004, the Company adopted the 2004 Employee Stock Option and Incentive Plan ("2004 Plan"). The 2004 Plan has authorized the grant of up to 4,000,000 shares of the Company's common stock pursuant to options, stock appreciation rights, restricted shares, deferred shares and performance shares to officers and key employees of the Company. Options granted under the 1989, 1999 and 2004 Plans have 10-year terms and vest and become exercisable at the rate of 1/3 per year on each of the first three

AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

~~Note~~anniversary ~~6: Accounting~~dates ~~for the Impact~~ of the ~~October 30~~grant, ~~2003~~subject ~~Construction~~to ~~Accident An~~continued ~~accident~~employment ~~occurred~~ on ~~the~~those ~~site~~dates. Options ofgranted ~~the~~on ~~construction~~May of8, ~~the~~2002, ~~parking-garage~~or ~~component~~later, ofunder the ~~expansion~~1999 ofand ~~the~~2004 ~~Atlantic~~Plans ~~City~~include ~~Tropicana~~an onadditional ~~October~~provision ~~30,~~that ~~2003. The~~provides ~~accident~~for ~~resulted~~accelerated investing aunder ~~loss~~certain ofcircumstances ~~life~~related ~~and~~to ~~serious injuries~~retirement, asdisability ~~well~~or asdeath. The ~~extensive~~Company's ~~damage~~1990 toNonemployee ~~the~~Directors ~~facilities~~Stock ~~under~~Option ~~construction.~~Plan ~~Construction~~("1990 ~~progresses~~Plan") onexpired ~~the~~in ~~expansion~~July ~~project~~2000. ~~Removal~~The of1990 ~~the~~Plan ~~garage~~had ~~debris~~authorized ~~has been completed and~~ the ~~rebuilding~~grant of ~~the~~up ~~portion~~to of250,000 ~~the~~shares ~~garage~~of ~~that collapsed is underway. Business at~~ the ~~Tropicana~~Company's ~~Atlantic~~common ~~City~~stock ~~continues~~pursuant to ~~suffer~~options ~~adverse~~granted ~~impacts~~to ~~from~~nonemployee ~~the~~Directors ~~disruption~~of ~~that followed~~ the ~~accident~~Company. ~~One~~Options ~~street~~granted ~~adjacent~~under to the ~~property~~1990 ~~remained~~Plan ~~closed~~have ~~through~~10-year ~~July~~terms 1,and ~~2004,~~vested ~~limiting~~and ~~access~~became toexercisable on the ~~existing~~date ~~parking~~of ~~garages and~~ the ~~porte cochere~~grant. During ~~the second quarter of 2004~~2001, the Company's ~~incurred~~shareholders ~~approximately~~approved ~~$2,300,000~~the of2000 ~~construction~~Nonemployee ~~accident~~Directors ~~related~~Stock ~~costs~~Option ~~and~~Plan ~~expenses~~("2000 ~~that may not be reimbursed by insurance~~Plan"). ~~These~~The ~~costs~~2000 ~~and~~Plan ~~expenses~~has ~~primarily~~authorized ~~consist of supplemental marketing costs incurred to decrease~~ the ~~effect~~grant of ~~the~~up ~~business~~to ~~interruption caused by the accident as well as professional fees incurred as a result of the accident. At July 1~~250, ~~2004, approximately $2,100,~~000 ofshares ~~supplemental marketing costs incurred to decrease the effect~~ of the ~~business interruption that are reimbursable under the~~ Company's ~~business~~common ~~interruption~~stock ~~insurance~~pursuant ~~are~~to ~~classified~~options ingranted ~~the~~to ~~Consolidated~~nonemployee ~~Balance~~Directors ~~Sheet as part~~ of the ~~construction accident receivables~~Company. ~~During~~ Options ~~the~~granted ~~first~~under ~~quarter of 2004,~~ the ~~Company~~2000 ~~recorded~~Plan ~~$3,500,000~~have of10-year ~~business~~terms. The ~~interruption~~2000 ~~recovery,~~Plan ~~which~~provides ~~reflects~~for ~~a profit recovery applicable to~~ the ~~fourth~~granting ~~quarter~~ of ~~2003. During~~options ~~the~~that ~~second~~vest ~~quarter~~and ofbecome ~~2004,~~exercisable on the ~~Company~~date ~~recorded $5,000,000~~ of ~~insurance~~grant ~~recovery~~and ~~due~~provides tofor the ~~delay~~granting of ~~the~~options ~~opening~~whereby ~~of the expansion, which represents~~ a portion ofvests ~~the~~and ~~anticipated~~becomes ~~profit~~exercisable ~~that~~on wethe ~~would~~date ~~have~~of ~~recognized~~grant ~~had~~and the ~~expansion~~remainder ~~opened~~vests asand ~~originally~~becomes ~~projected~~exercisable asevenly ~~well~~over asvarying ~~some~~terms ~~reimbursement~~depending ~~for~~on ~~costs~~the ~~incurred~~date ~~as a result~~ of the ~~delay. These insurance recoveries totaling $8~~grant,~~500,000~~ ~~are~~subject ~~classified~~to asbeing ~~construction~~a ~~accident~~Company ~~insurance~~Director ~~recoveries~~on inthose ~~the Consolidated Statement of Operations~~dates. ~~Insurance~~ During ~~claims for business interruption that occurred from~~ the ~~date~~2006 ofand ~~the~~2005 ~~accident~~first ~~through~~quarters, the ~~end of the second quarter of 2004 have been filed with the~~ Company's ~~insurers~~received incash ~~the amount~~ of ~~approximately~~ $191,~~900~~996,000 ofand ~~which~~ $3145,~~500,~~000, ~~has~~respectively, ~~been~~in ~~received~~connection bywith ~~the~~stock ~~Company~~option exercises. InDuring ~~addition,~~ the ~~Company~~first ~~has~~quarter ~~filed insurance claims for lost profits and additional costs as a result~~ of ~~the~~2005, ~~delay in~~ the ~~opening~~Company ofissued ~~the expansion. The total of these claims is approximately $44~~20,~~600,~~000 shares of ~~which~~its ~~$5,000,000~~common ~~has~~stock ~~been~~in ~~received~~connection bywith ~~the~~stock ~~Company~~option exercises. ~~Profit~~During ~~recovery from business interruption insurance is recorded when~~ the ~~amount~~2006 offirst ~~recovery~~quarter, ~~which may be different from~~ the ~~amount~~Company ~~claimed~~accepted 36,154 isshares ~~agreed~~of toits bycommon ~~the~~stock ~~insurers. The~~in ~~Company~~satisfaction ~~has also filed insurance claims~~ of ~~approximately~~ $41,~~800~~102,000 ~~for~~of ~~other~~tax ~~costs~~obligations itassociated ~~has~~with ~~incurred~~the ~~that~~exercise ~~are~~of ~~related~~stock ~~to the construction accident~~options. ~~These~~Such ~~other~~shares ~~costs~~of ~~are~~common ~~primarily~~stock ~~supplemental~~are ~~marketing~~stated ~~costs. During~~at ~~2003,~~cost ~~the Company reduced construction in progress for the estimated asset loss~~ and ~~recorded~~held ~~a receivable of approximately $3,000,000, which is included in the Consolidated Balance Sheet~~ as ~~part~~treasury ofshares ~~the~~to ~~construction~~be ~~accident~~used ~~receivables~~for atgeneral ~~July~~corporate ~~1, 2004~~purposes. The Company ~~believes~~satisfies itstock isoption ~~probable~~exercises ~~that~~by ~~any~~authorizing ~~additional~~its ~~asset~~transfer ~~loss~~agent ~~will~~to beissue ~~recovered~~new ~~from~~shares ~~first~~after ~~party~~confirming ~~insurance~~that orall ~~from~~requisite ~~third~~consideration ~~parties or their insurers. Debris removal~~ has been ~~completed~~received ~~and~~from nothe ~~additional~~option ~~asset loss has been noted~~holder. The ~~full~~total ~~extent~~intrinsic ofvalue ~~additional asset loss, if any, will not be known until a full inspection~~ of ~~potential~~options ~~damages~~exercised isduring ~~performed. The dismantlement of~~ the ~~collapsed~~quarters ~~portion~~ended ofMarch ~~the~~31, ~~garage~~2006 and ~~the~~2005 ~~debris~~was ~~removal~~$3,658,000 ~~has~~and ~~been~~$449,000, ~~completed~~respectively. ~~There~~The istax abenefit ~~dispute~~realized ~~with~~for ~~the~~these ~~insurance~~option ~~carrier~~exercises aswas to$1,315,000 ~~the~~and ~~full~~$157,000, ~~coverage~~respectively, offor the ~~associated~~quarters ~~costs. It~~ended isMarch ~~reasonably possible that the Company may ultimately pay a portion of these costs~~31, ~~which~~2006 ~~would be expensed~~ and ~~the range is estimated to be from none to $9,000,000~~2005. ~~The~~ A ~~Company~~summary ~~will~~of ~~continue~~the toCompany's ~~assess~~stock ~~other~~option ~~potential~~activity ~~losses~~ and ~~costs~~related itinformation ~~might~~is ~~incur~~as ~~in relation to the construction accident.~~follows:

Options	Shares (000)	Weighted- Average Exercise Price	Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value ($000)
Outstanding at January 1, 2006 Granted Exercised Forfeited or expired Outstanding at March 31, 2006 Exercisable at March 31, 2006	3,750 -- (180) (18) 3,552 ======= 2,657 =======	$ 17.72 -- $ 11.13 $ 30.90 $ 17.99 ======== $ 14.95 ========	6.0 years ========== 5.2 years ==========	$ 85,263 ======== $ 71,853 ========

During the first quarter of 2005, 20,000 stock options were granted and the weighted-average grant-date fair value of these options was $11.57.

AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

Note 75: ~~Loss~~Benefit ~~on Early Retirement of Debt~~Plans ~~On June 2, 2004, the Company redeemed $192,320,000 of 8 7/8% Notes.~~ The ~~Company~~components ~~expensed the redemption premium~~ of $6,354,000 and the unamortized debt issuance costs of $2,267,000 for a total of $8,621,000. Note 8: Income Taxes During the first quarter of 2004, the Internal Revenue Service ("IRS") completed its examination of the Company's income tax returns for the years 2000 through 2002. The only issue in dispute involved the deductibility of a portion of payments on certain liabilities related to the restructuring of Ramada Inc. (the "Restructuring"). During the fourth quarter of 2003, the IRS completed its examination for the years 1994 through 1999 and settled one of the two remaining issues entirely and a portion of the other remaining issue, resulting in a tax benefit ofplan ~~$6,724,000. The~~expense issue that was settled entirely involved the deductibility of certain complimentaries provided to customers. The other issue involved the deductibility of a portion of payments on certain liabilities related to the Restructuring, the same issue as described above for the ~~2000~~periods ~~through~~ended ~~2002~~March ~~years. For the years 1994 through 2002~~31, ~~the~~2006 ~~Company has reserved the right to pursue the unagreed portion in court~~ and ~~would~~March ~~receive a refund~~31, if2005 successful. The New Jersey Division of Taxation is examining the New Jersey income tax returns for the years 1995 through 1998. Management believes that adequate provision for income taxes and interest has been made in the financial statements. The Company has received proposed assessments from the Indiana Department of Revenue ("IDR") in connection with the examination of the Company's Indiana income tax returns for the years 1996 through 2002. The assessments are based on the IDR's position that the Company's gaming taxes that are based on gaming revenue are not deductible for Indiana income tax purposes. The Company filed a petition in Indiana Tax Court for the 1996 and 1997 tax years and oral arguments were heard in April 2001. The Company has filed a formal protest for the years 1998 through 2000 and will be filing a formal protest for the years 2001 and 2002. In April 2004, the Indiana Tax Court ruled against the Company. The Company has asked the Indiana Supreme Court to review the ruling. If the ruling is not changed, the Company has estimated that it will be obligated to pay approximately $17,300,000 to cover assessments of taxes and interest from 1996 through the end of the first quarter of 2004. This amount would then be deductible for federal income tax purposes, resulting in a net effect of approximately $11,300,000, which has been recorded as anfollows ~~increase to income taxes payable and expense~~ (in ~~the first quarter of 2004. The ongoing effect of this issue is also included in income taxes after the first quarter of 2004. Note 9~~thousands): ~~Earnings Per Share~~ Net income per common share excludes dilution and is computed by dividing income applicable to common shareholders by the weighted-average number of common shares outstanding. Net income per common share, assuming dilution, is computed based on the weighted-average number of common shares outstanding after consideration of the dilutive effect of stock options and the assumed conversion of the preferred stock at the stated rate.

		Defined Benefit Plans First Quarter		Deferred Compensation Plan First Quarter
		2006	2005		2006	2005
Service cost Interest cost Amortization of prior service cost Recognized net actuarial loss Settlement loss (a) Cash surrender value increase net of premium expense		$ 34 173 19 284 -- -- $ 510 ======	$ 29 214 18 233 2,851 -- $3,345 ======		$ -- 84 -- -- -- (93) $ (9) ======	$ 1 88 -- -- -- (88) $ 1 ======
(a)	During the first quarter of 2005, the Company made a lump sum cash payment of $8,239 to a defined benefit plan participant in exchange for the participant's right to receive specified pension benefits. As a result, the Company recognized a settlement loss of $2,851. The recognition of this settlement loss resulted in a reduction of $1,556, net of income taxes of $838 in the accumulated other comprehensive loss relating to the minimum pension liability adjustment in the Consolidated Statement of Shareholders' Equity for the period ended March 31, 2005.

Note 6: Accounting for the Impact of the October 30, 2003 Construction Accident

An accident occurred on the site of the construction of the expansion of the Atlantic City Tropicana on October 30, 2003. The accident resulted in a loss of life and serious injuries, as well as extensive damage to the facilities under construction.

Construction on the expansion project was substantially completed by December 30, 2004. The expansion includes 502 additional hotel rooms, 20,000 square feet of meeting space, 2,400 parking spaces, and "The Quarter at Tropicana", a 200,000-square-foot dining, entertainment and retail center.

The Company incurred $1,644,000 and $409,000 of construction accident related costs and expenses that may not be reimbursed by insurance during the first quarters ended 2006 and 2005, respectively. These costs and expenses primarily consist of professional fees incurred as a result of the accident.

During the first quarters ended 2006 and 2005, the Company recorded $4,789,000 and $225,000, respectively, of insurance recoveries due to the delay of the opening of the expansion, which represent a portion of the anticipated profit that the Company would have recognized had the expansion opened as originally projected as well as some reimbursement for costs incurred as a result of the delay. These insurance recoveries were classified as construction accident insurance recoveries in the Consolidated Statements of Operations. Insurance claims for business interruption that occurred from the date of the accident through December 31, 2005 have been filed with the Company's insurers in the amount of approximately $52,100,000, of which $3,500,000 has been received by the Company. In addition, the Company has filed insurance claims for lost profits and additional costs as a result of the delay in the opening of the expansion. The total of these claims is approximately $70,100,000, of which approximately $14,700,000 has been received by the Company.

AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

Profit recovery from insurance is recorded when the amount of recovery, which may be different than the amount claimed, is agreed to by the insurers. The ~~computations~~Company has also filed insurance claims of ~~net~~approximately ~~income~~$9,000,000 ~~per~~for ~~common~~other costs it has incurred that are related to the construction accident, of which $1,500,000 has been received by the Company. These other costs are primarily supplemental marketing costs and approximately $1,600,000 was included in the Consolidated Balance Sheet as construction accident receivables at March 31, 2006. In order to ensure that the construction proceed expeditiously and in order to settle certain disputes, the Company and the general contractor entered into a settlement agreement on October 6, 2004 that delineates how the Company and its contractor will share the cost of and the insurance proceeds received for the dismantlement, debris removal and rebuild. During the first quarters ended 2006 and 2005, the Company recorded $2,640,000 and $1,573,000, respectively, of insurance recoveries associated with the rebuild, net of direct costs to obtain the recoveries. These amounts were classified as other income ~~per~~in ~~common~~the ~~share~~Consolidated Statements of Operations. In addition, ~~assuming~~at ~~dilution~~March 31, 2006, the Company's share of claims outstanding for dismantlement, debris removal and rebuild was approximately $31,000,000. Note 7: Merger Related On March 13, 2006, the ~~periods~~Company ~~ended~~entered ~~July~~into 1an Agreement and Plan of Merger (the "Merger Agreement") with Pinnacle Entertainment, ~~2004~~Inc. ("Pinnacle") and ~~July~~Pinnacle's 3wholly-owned subsidiary, ~~2003~~PNK Development 1, ~~are~~Inc. Under the terms of the Merger Agreement, Pinnacle agreed to pay $38.00 in cash for each share of the Company's common stock and $401.90 in cash for each share of the Company's Series B convertible preferred stock outstanding at the Effective Time (as ~~follows~~defined in the Merger Agreement). On April 18, 2006, the Company entered into an amendment (the "First Amendment") to the Merger Agreement with Pinnacle. Pursuant to the First Amendment, the purchase price for each share of the Company's common stock was increased to $43.00 in ~~thousands~~cash and the purchase price for each share of the Company's Series B convertible preferred stock was increased to $454.79 in cash. On April 23, ~~except~~2006, ~~per~~the Company entered into a second amendment (the "Second Amendment") to the Merger Agreement with Pinnacle. Pursuant to the Second Amendment, the purchase price for each share ~~data~~of the Company's common stock was increased to $45.00 in cash and the purchase price for each share of the Company's Series B convertible preferred stock was increased to $475.94 in cash. On April 28, 2006, the Company entered into an Amended and Restated Merger Agreement (the "Restated Agreement") with Pinnacle. Pursuant to the Restated Agreement, each share of Aztar common stock will be exchanged for $45.00 in cash and a fraction of a share of Pinnacle common stock equal to $3.00 divided by the trading price of a share of Pinnacle common stock over a specified trading period, but no more than 0.12976 shares and no fewer than 0.08651 shares, and each share of Aztar preferred stock will be exchanged for $475.94 in cash plus $31.73 of Pinnacle common stock, subject to a collar provision. The transaction is subject to approval by our shareholders and the satisfaction of customary closing conditions, including the receipt of necessary regulatory and governmental approvals. The Restated Agreement contains a termination fee provision of $49.575 million plus the reimbursement of up to $16 million of merger-related costs incurred by Pinnacle. Since the signing of the Merger Agreement with Pinnacle on March 13, 2006, the Company has received additional unsolicited offers from other companies. During the 2006 first quarter, the Company recorded $884,000 of merger related costs and expenses. These costs and expenses primarily consist of professional fees. Note 8: Tropicana Las Vegas Capitalized Development Costs Write-Off During the 2006 first quarter, the Company concluded that it was not probable that it would implement its plans for redevelopment of Tropicana Las Vegas. As a result, the Company wrote off $26,021,000 of capitalized development costs.

	Second Quarter		Six Months
Net income Less: preferred stock dividends and losses on redemption Income available to common shareholders Plus: income impact of assumed conversion of dilutive preferred stock Income available to common shareholders plus dilutive potential common shares Weighted-average common shares applicable to net income per common share Effect of dilutive securities: Stock option incremental shares Assumed conversion of preferred stock Dilutive potential common shares Weighted-average common shares applicable to net income per common share assuming dilution Net income per common share Net income per common share assuming dilution	2004 $ 9,347 (267) 9,080 101 $ 9,181 ======== 34,556 1,443 535 1,978 36,534 ======== $ .26 ======== $ .25 ========	2003 $ 18,791 (183) 18,608 108 $ 18,716 ======== 35,015 910 574 1,484 36,499 ======== $ .53 ======== $ .51 ========	2004 $ 13,014 (531) 12,483 -- $ 12,483 ======== 34,439 1,432 -- 1,432 35,871 ======== $ .36 ======== $ .35 ========	2003 $ 32,336 (348) 31,988 217 $ 32,205 ======== 35,602 789 574 1,363 36,965 ======== $ .90 ======== $ .87 ========

Stock options that were excluded from the earnings per share computations because their effect would have been antidilutive were 1,247,000 at July 3, 2003. No stock

AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

Note 109: ~~Segment~~Income ~~Information~~Taxes ~~The~~In ~~Company~~the ~~reviews~~first ~~results~~quarter of ~~operations~~2006, ~~based~~the Company reached a favorable settlement with the Internal Revenue Service on ~~distinct~~the ~~geographic~~only ~~gaming~~remaining ~~market~~issue ~~segments~~in dispute for the examinations of the Company's federal income tax returns for the years 1994 through 2003. The issue involved the deductibility of a portion of payments on certain liabilities related to the restructuring of Ramada, Inc. (the "Restructuring"). As a result of the settlement, the Company recorded an income tax benefit of $1,383,000. Also in the first quarter of 2006, the Company's ~~chief~~application ~~operating~~for ~~decision~~tax ~~maker~~credits ~~uses~~available ~~only~~from ~~EBITDA~~New inJersey ~~assessing~~was ~~segment~~approved. As ~~performance~~a result of the approval, the Company recognized, net of a federal income tax effect, a non-recurring income tax benefit of $1,993,000. Note 10: Earnings Per Share Net income per common share excludes dilution and ~~deciding~~is ~~how~~computed by dividing income applicable to ~~allocate~~common ~~resources~~shareholders by the weighted-average number of common shares outstanding. ~~The~~Net ~~Company's~~income ~~segment~~per ~~information~~common share, assuming dilution, is ascomputed ~~follows~~based on the weighted-average number of common shares outstanding after consideration of the dilutive effect of stock options and the assumed conversion of the preferred stock at the stated rate. The computations of net income per common share and net income per common share, assuming dilution, for the periods ended ~~July~~March 131, ~~2004~~2006 and ~~July~~March 331, ~~2003~~2005, are as follows (in thousands, except per share data):

		Second Quarter		Six Months
			First Quarter
Revenues Tropicana Atlantic City Tropicana Las Vegas Ramada Express Laughlin Casino Aztar Evansville Casino Aztar Caruthersville Total consolidated EBITDA (a) Tropicana Atlantic City Tropicana Las Vegas Ramada Express Laughlin Casino Aztar Evansville Casino Aztar Caruthersville Property EBITDA Corporate Depreciation and amortization Operating income Interest income Interest expense Loss on early retirement of debt Income taxes Net income		2004 $102,417 42,626 23,405 32,449 5,362 $206,259 ======== $ 24,367 10,125 5,971 9,564 901 50,928 (4,217) (13,212) 33,499 212 (8,735) (8,621) (7,008) $ 9,347 ========	2003 $115,642 38,478 22,788 31,720 5,891 $214,519 ======== $ 34,201 6,580 5,854 8,858 1,076 56,569 (3,643) (12,954) 39,972 204 (9,213) -- (12,172) $ 18,791 ========	2004 $198,491 83,627 48,188 66,099 11,620 $408,025 ======== $ 47,815 19,359 13,225 19,758 2,232 102,389 (8,924) (26,235) 67,230 379 (17,409) (8,621) (28,565) $ 13,014 ========	2003 $219,743 76,826 47,177 61,870 11,919 $417,535 ======== $ 59,332 12,744 12,527 17,975 2,257 104,835 (7,690) (25,502) 71,643 396 (18,766) -- (20,937) $ 32,336 ========
Net income Less: preferred stock dividend and losses on redemption Income available to common shareholders Plus: income impact of assumed conversion of dilutive preferred stock Income available to common shareholders plus dilutive potential common shares Weighted-average common shares applicable to net income per common share Effect of dilutive securities: Stock option incremental shares Assumed conversion of preferred stock Dilutive potential common shares Weighted-average common shares applicable to net income per common share assuming dilution Net income per common share Net income per common share assuming dilution			2006 $ 3,214 (433) 2,781 -- $ 2,781 ======== 35,876 1,087 -- 1,087 36,963 ======== $ .08 ======== $ .08 ========	2005 $ 9,911 (220) 9,691 97 $ 9,788 ======== 34,788 1,584 514 2,098 36,886 ======== $ .28 ======== $ .27 ========
(a)	EBITDA is net income before income taxes, loss on early retirement of debt, interest expense, interest income, and depreciation and amortization. EBITDA should not be construed as a substitute for either operating income or net income as they are determined in accordance with generally accepted accounting principles (GAAP). The Company uses EBITDA as a measure to compare operating results among its properties and between accounting periods. The Company manages cash and finances its operations at the corporate level. The Company manages the allocation of capital among properties at the corporate level. The Company also files a consolidated income tax return. The Company accordingly believes EBITDA is useful as a measure of operating results at the property level because it reflects the results of operating decisions at that level separated from the effects of tax and financing decisions that are managed at the corporate level. The Company also uses EBITDA as the primary operating performance measure in its bonus programs for executive officers. The Company also believes that EBITDA is a commonly used measure of operating performance in the gaming industry and is an important basis for the valuation of gaming companies. The Company's calculation of EBITDA may not be comparable to similarly titled measures reported by other companies and, therefore, any such differences must be considered when comparing performance among different companies. While the Company believes EBITDA provides a useful perspective for some purposes, EBITDA has material limitations as an analytical tool. For example, among other things, although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA does not reflect the requirements for such replacements. Interest expense, net of interest income, loss on early retirement of debt, and income taxes are also not reflected in EBITDA. Therefore, the Company does not consider EBITDA in isolation, and it should not be considered as a substitute for measures determined in accordance with GAAP. A reconciliation of EBITDA with operating income and net income as determined in accordance with GAAP is reflected in the above summary.

Stock options that were excluded from the earnings per share computations because their effect would have been antidilutive were 538,500 and 20,000 at March 31, 2006 and March 31, 2005, respectively.

AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

~~Note~~At ~~11: Contingencies~~March and Commitments The Company agreed to indemnify Ramada Inc. ("Ramada") against all monetary judgments in lawsuits pending against Ramada and its subsidiaries as of the conclusion of the Restructuring on December 2031, ~~1989~~2006, ~~as well as all related attorneys' fees and expenses not paid at that time, except for any judgments, fees or expenses accrued on~~ the ~~hotel~~assumed ~~business~~conversion ~~balance sheet and except for any unaccrued and unreserved aggregate amount up to $5,000,000~~ of ~~judgments,~~preferred ~~fees~~stock ~~or expenses related exclusively~~ to the hotel business. Aztar is entitled to the benefit of any crossclaims or counterclaims related to such lawsuits and of any insurance proceeds received. There is no limit to the term or the maximum potential future payment under this indemnification. In addition473, the Company agreed to indemnify Ramada for certain lease guarantees made by Ramada. The lease terms potentially extend through 2015 and Ramada guaranteed all obligations under these leases. The Company has recourse against a subsequent purchaser of the operations covered by these leases. The estimated maximum potential amount of future payments the Company could be required to make under these indemnifications is $7,600,000 atequivalent ~~July~~common 1,shares ~~2004. The~~was ~~Company~~excluded ~~would~~from ~~be required to perform under this guarantee 1) if monetary judgments and related expenses in lawsuits pending against Ramada and its subsidiaries as of~~ the ~~conclusion~~earnings ofper ~~the~~share ~~Restructuring~~computations ~~exceeded~~because ~~the above described amount, or 2) if lessees with lease guarantees failed to perform under~~ their ~~leases,~~effect ~~the~~would ~~lessee~~have ~~and~~been ~~lessor could not reach a negotiated settlement and the lessor was able to successfully proceed against Ramada, who in turn was able to successfully proceed against the Company~~antidilutive. In Note ~~connection~~11: Segment ~~with these matters, the Company's accrued liability was $3,833,000 at both July 1, 2004 and January 1, 2004.~~Information The Casino Reinvestment Development Authority ("CRDA") has issued bonds that are being serviced by its parking fee revenue. A series of these bonds is collateralized by a portion, $695,000 at July 1, 2004, of the Company's ~~CRDA~~reviews ~~deposits. The~~results ~~portion that serves as collateral is a varying percentage~~ of aoperations ~~portion of CRDA deposits that satisfy the Company's investment obligation~~ based upon its New Jersey casino revenue. In the event that the CRDA's parking fees are insufficient to service its bonds, these deposits can be used for that purpose. To the extent the Company's CRDA deposits are used to service these bonds, the Company would receive credit against future investment obligations. The Company's CRDA deposits serve as collateral for a one-year period, after which they become available for eligible investments. This arrangement continues through 2013. The Company received a fee for this arrangement that is being amortized on adistinct ~~straight-line~~geographic ~~basis~~gaming ~~through~~market ~~2013~~segments. The Company's ~~estimate~~chief ofoperating ~~the~~decision ~~maximum~~maker ~~potential~~uses ~~deposits~~only ~~that~~EBITDA ~~could be used to service CRDA bonds is $18,000,000 at July 1, 2004. The Company is a party to various other claims, legal actions and complaints arising~~ in ~~the~~assessing ~~ordinary~~segment ~~course~~performance ~~of business or asserted by way of defense or counterclaim in actions filed by the Company. Management believes that its defenses are substantial in each of these matters~~ and ~~that~~deciding ~~the~~how ~~Company's~~to ~~legal~~allocate ~~posture can be successfully defended without material adverse effect on its consolidated financial position, results of operations or cash flows~~resources. The Company ~~has severance agreements with certain of its senior executives. Severance benefits range from a lump-sum cash payment equal to three times the sum of the executive~~'s ~~annual~~segment ~~base~~information ~~salary~~is and the average of the executive's annual bonuses awarded in the preceding three years plus payment of the value in the executive's outstanding stock options and vesting and distribution of any restricted stock to a lump-sum cash payment equal to one half of the executive's annual base salary. In certain agreements, the termination must be as afollows ~~result~~for ~~of a change in control of~~ the ~~Company. Based~~periods ~~upon~~ended ~~salary~~March ~~levels and stock options at July 1~~31, ~~2004,~~2006 the aggregate commitment under the severance agreements should all these executives be terminated was approximately $72,000,000 at July 1, 2004. At July 1, 2004, the Company had commitments of approximately $46,000,000 for the Atlantic City Tropicana expansion project and ~~approximately~~March $131,~~800,000~~ ~~for~~2005 an(in ~~executive conference center project at Casino Aztar Evansville.~~ thousands):

AZTAR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)

~~Note~~Las ~~12: Subsequent~~Vegas ~~Events On~~capitalized ~~July~~development 7,costs 2004, the Company redeemed the remaining principal amount of $42,680,000 of the 8 7/8% Notes at 102.958% of the principal amount plus accrued interest. The redemption was funded primarily by borrowings under the Revolver. On July 22, 2004, the Company obtained a $675,000,000 senior secured credit facility that consists of a fivewrite-~~year revolving credit facility of $550,000,000 and a five-year term loan facility of $125,000,000. The Company used these credit facilities to pay~~ off ~~the Revolver~~, ~~Term~~other ~~Loan and Tropicana Enterprises Loan. Item 2. Management's Discussion and Analysis Financial Condition On June 2~~income, ~~2004,~~interest ~~we completed a $300 million private placement offering of 7 7/8% Senior Subordinated Notes due 2014. Also on June 2~~expense, 2004, we announced the expiration of our cash tender offer and consent solicitation for all of our $235 million aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2007. We accepted and paid for all 8 7/8% Notes tendered pursuant to the Offer, which totaled approximately $192.3 million. A portion of the proceeds from the offering, net of ~~related~~interest ~~fees and expenses~~income, was used to redeem the 8 7/8% Notes tendered. The remaining proceeds were used to pay down our revolving credit facility. In connection with the Offer, we recognized a loss on early retirement of debt of $8.6 million in the 2004 second quarter. The loss on early retirement of debt consisted of a redemption premium of $6.3 million and ~~the~~income ~~write-off~~taxes ofare ~~unamortized~~also ~~debt~~not ~~issuance~~reflected costs of $2.3 million. On July 7, 2004, we redeemed the remaining principal amount of the 8 7/8% Notes totaling $42.7 million primarily by drawing on our revolving credit facility. As a result, we recognized a loss on early retirement of debt in ~~July 2004 totaling approximately $1~~EBITDA.8 ~~million~~Therefore, ~~consisting of a redemption premium of $1.3 million and a write-off of unamortized debt issuance costs of $0.5 million. Interest on~~ the ~~7 7/8%~~Company ~~Notes~~does isnot ~~payable~~consider ~~semiannually~~EBITDA ~~on June 15 and December 15, beginning on December 15, 2004. At any time prior to June 15, 2009, the 7 7/8% Notes are redeemable at the option of the Company,~~ in ~~whole or in part~~isolation, ~~at a price of 100% of the principal amount plus a redemption premium plus accrued~~ and ~~unpaid~~it ~~interest. The~~should ~~redemption~~not ~~premium will~~ be ~~equal~~considered toas the greater of (1) 1% of the principal amount or (2) the excess of (A) the sum of the present values of (i) 103.938% of the principal amount and (ii) all required interest payments through June 15, 2009, excluding accrued but unpaid interest, computed in each case using a ~~discount~~substitute ~~rate~~for ~~equal~~measures todetermined ~~the treasury rate at the time of redemption plus 50 basis points over (B) the principal amount. On or after June 15, 2009, the 7 7/8% Notes are redeemable at the option of the Company,~~ in ~~whole~~accordance or in part, at prices from 103.938% of the principal amount plus accrued and unpaid interest declining to 100% of the principal amount plus accrued and unpaid interest beginning June 15, 2012. At any time on or prior to June 15, 2007, the Company may redeem up to 35% of the aggregate principal amount of the notes issued under the indenture for the 7 7/8% Notes with ~~the net proceeds of one or more equity offerings by the Company at a redemption price of 107~~GAAP.~~875%~~ ofA ~~the~~reconciliation ~~principal amount plus accrued and unpaid interest; provided that (1) at least 65%~~ of ~~the~~EBITDA principal amount of the 7 7/8% Notes issued remains outstanding immediately after such redemption and (2) the redemption occurs within 60 days of the closing of such equity offering. The 7 7/8% Notes, ranked pari passu with ~~the~~operating 8income ~~7/8% Notes~~ and 9%net ~~Senior~~income ~~Subordinated~~as ~~Notes~~determined ~~due 2011, are general unsecured obligations of the Company and are subordinated~~ in ~~right~~accordance ofwith ~~payment~~GAAP tois ~~all~~reflected present and future senior indebtedness (as defined) of the Company. Upon change of control of the Company, the holders of the 7 7/8% Notes would have the right to require repurchase of the notes at 101% of the principal amount plus accrued and unpaid interest. Certain covenants in the ~~7 7/8%~~above ~~Notes limit the ability of the Company to incur indebtedness, make certain payments or engage in mergers, consolidations or sales of assets~~summary.

Note 12: Contingencies and Commitments

The Company agreed to indemnify Ramada Inc. ("Ramada") against all monetary judgments in lawsuits pending against Ramada and its subsidiaries as of the conclusion of the Restructuring on December 20, 1989, as well as all related attorneys' fees and expenses not paid at that time, except for any judgments, fees or expenses accrued on the hotel business balance sheet and except for any unaccrued and unreserved aggregate amount up to $5,000,000 of judgments, fees or expenses related exclusively to the hotel business. Aztar is entitled to the benefit of any crossclaims or counterclaims related to such lawsuits and of any insurance proceeds received. There is no limit to the term or the maximum potential future payment under this indemnification. In addition, the Company agreed to indemnify Ramada for certain lease guarantees made by Ramada. The lease terms potentially extend through 2015 and Ramada guaranteed all obligations under these leases. The Company has recourse against a subsequent purchaser of the operations covered by these leases. The estimated maximum potential amount of future payments the Company could be required to make under these indemnifications is $6,500,000 at March 31, 2006. The Company would be required to perform under this guarantee 1) if monetary judgments and related expenses in lawsuits pending against Ramada and its subsidiaries as of the conclusion of the Restructuring exceeded the above described amount, or 2) if lessees with lease guarantees failed to perform under their leases, the lessee and lessor could not reach a negotiated settlement and the lessor was able to successfully proceed against Ramada, who in turn was able to successfully proceed against the Company. In connection with these matters, the Company established a liability at the time of the Restructuring and the Company's remaining accrued liability was $3,821,000 and $3,833,000 at March 31, 2006 and December 31, 2005, respectively.

The Company is a party to various other claims, legal actions and complaints arising in the course of business or asserted by way of defense or counterclaim in actions filed by the Company. Management believes that its defenses are substantial in each of these matters and that the Company's legal posture can be successfully defended without material adverse effect on its consolidated financial position, results of operations or cash flows.

The Company has severance agreements with certain of its senior executives. Severance benefits range from a lump-sum cash payment equal to three times the sum of the executive's annual base salary and the average of the executive's annual bonuses awarded in the preceding three years plus payment of the value in the executive's outstanding stock options and vesting and distribution of any restricted stock to a lump-sum cash payment equal to the executive's annual base salary. In certain agreements, the termination must be as a result of a change in control of the Company. Based upon salary levels and stock options at March 31, 2006, the aggregate commitment under the severance agreements should all these executives be terminated was approximately $66,000,000 at March 31, 2006.

At March 31, 2006, the Company had commitments of approximately $15,000,000 for a hotel and entertainment complex project at Casino Aztar Evansville.

AZTAR CORPORATION AND SUBSIDIARIES

~~During~~Item ~~the~~2. Management's ~~first~~Discussion ~~half~~and ofAnalysis Merger ~~2004~~Agreement On March 13, ~~the~~2006, ~~outstanding~~Aztar ~~balance~~entered oninto ~~our~~an ~~revolving~~Agreement ~~credit~~and ~~facility~~Plan ~~decreased~~of toMerger ~~$44.8~~(the ~~million~~"Merger ~~from~~Agreement") ~~$146~~with Pinnacle Entertainment, Inc.5 ~~million~~("Pinnacle") atand ~~January~~PNK Development 1, ~~2004~~Inc. On ~~July~~(the ~~22,~~"Merger ~~2004~~Subsidiary"), ~~we obtained~~ a ~~new~~wholly-owned ~~$675~~subsidiary ~~million~~of ~~senior~~Pinnacle, ~~secured~~that ~~credit~~provides ~~facility~~for ~~consisting~~the ofMerger aSubsidiary ~~five-year~~to ~~revolving~~merge ~~credit~~with ~~facility~~and ofinto ~~$550~~Aztar ~~million~~with ~~and~~Aztar asurviving ~~five-year~~the ~~term~~merger. ~~loan~~Under ~~facility~~the terms of ~~$125~~the ~~million. Also~~Merger ~~on July 22~~Agreement, ~~2004,~~each weshare ~~used~~of ~~the~~Aztar ~~new~~common ~~credit~~stock ~~facility~~would tobe ~~pay~~exchanged ~~off~~for the ~~outstanding~~right ~~principal~~to ~~amount~~receive on$38.00 ~~our~~in ~~prior~~cash ~~revolving~~and ~~credit~~each ~~facility. In~~share ~~addition,~~of weAztar ~~paid~~Series ~~off~~B ~~our~~convertible ~~prior~~preferred ~~term~~stock ~~loan~~would ~~and~~be ~~our~~exchanged ~~Tropicana~~for ~~Enterprises~~the ~~loan,~~right ~~which~~to ~~were~~receive $47401.590 ~~million~~in ~~and $38~~cash.~~8 million, respectively.~~ On April 2218, ~~2002~~2006, wethe ~~commenced~~Company ~~construction~~entered oninto an ~~expansion~~amendment of(the ~~our~~"First ~~Tropicana~~Amendment") ~~Atlantic~~to ~~City. The~~the ~~expansion~~Merger ~~includes~~Agreement ~~502~~with ~~additional~~Pinnacle. Pursuant ~~hotel~~to ~~rooms,~~the 20First Amendment,~~000~~ ~~square~~the ~~feet~~purchase ofprice ~~meeting~~for ~~space,~~each ~~2,400~~share ~~parking~~of ~~spaces, and~~ the ~~"Quarter," the project~~Company's ~~centerpiece,~~common astock ~~200,000-square-foot~~was ~~dining,~~increased ~~entertainment~~to ~~and retail center~~$43. On00 ~~October~~in ~~30,~~cash ~~2003,~~and ~~an accident occurred on~~ the ~~site~~purchase ofprice ~~the~~for ~~parking-garage~~each ~~component~~share of the ~~expansion~~Company's ofSeries ~~the~~B ~~Atlantic~~convertible ~~City~~preferred ~~Tropicana~~stock ~~that~~was ~~brought~~increased ~~construction~~ to ~~a halt~~$454.79 ~~Debris~~in ~~removal~~cash. On onApril ~~the~~23, ~~portion~~2006, of the ~~garage~~Company ~~that~~entered ~~collapsed~~into isa ~~complete~~second ~~and~~amendment ~~construction~~(the ~~has~~"Second ~~recommenced~~Amendment") onto ~~all~~the ~~portions~~Merger ofAgreement ~~the~~with ~~project~~Pinnacle. InPursuant ~~2003,~~to wethe ~~reduced~~Second ~~construction~~Amendment, inthe ~~progress~~purchase price for ~~the~~each ~~estimated~~share ~~asset~~of ~~loss~~the ~~and~~Company's ~~recorded~~common astock ~~receivable~~was ofincreased ~~approximately~~to $~~3 million~~45. We00 ~~believe~~in itcash isand ~~probable~~the ~~that~~purchase ~~any~~price ~~additional~~for ~~asset~~each ~~loss~~share ~~will~~of bethe ~~recovered~~Company's ~~from~~Series ~~first~~B ~~party~~convertible ~~insurance~~preferred orstock ~~from~~was ~~third~~increased ~~parties~~to ~~or their insurers~~$475. No94 ~~additional~~in ~~asset loss has been noted after the debris removal~~cash. ~~The~~On ~~full~~April ~~extent~~28, ~~of additional asset loss~~2006, ifthe ~~any,~~Company ~~will~~entered ~~not~~into bean ~~known~~Amended ~~until~~and aRestated ~~full~~Merger ~~inspection~~Agreement of(the ~~potential~~"Restated ~~damages~~Agreement") iswith ~~performed~~Pinnacle. WePursuant ~~will continue~~ to ~~assess~~the ~~other~~Restated ~~potential~~Agreement, ~~losses~~each ~~and~~share ~~costs~~of weAztar ~~might~~Common ~~incur~~stock inwill ~~relation~~be toexchanged ~~the~~for ~~construction accident~~$45.00 ~~Following~~in acash ~~recent~~ and ~~comprehensive~~a ~~review~~fraction of ~~the~~a ~~status~~share of ~~the~~Pinnacle ~~project~~common ~~and~~stock ~~the~~equal ~~remaining work~~ to be$3.00 ~~done,~~divided ~~the~~by ~~opening of~~ the ~~expansion~~trading ~~project~~price isof ~~targeted~~a ~~for~~share ~~mid-October~~of ~~2004. We~~Pinnacle ~~are~~common ~~depending~~stock onover ~~the~~a ~~general~~specified ~~contractor~~trading toperiod, ~~perform~~but ~~under~~no ~~the~~more ~~terms~~than of0.12976 ~~the~~shares ~~contract~~ and tono ~~deliver~~fewer athan ~~completed project~~0. We08651 ~~are~~shares, ~~also~~and ~~depending~~each onshare ~~the~~of ~~tenants~~Aztar inpreferred ~~our~~stock ~~dining/entertainment/retail~~will ~~complex~~be toexchanged ~~timely~~for ~~perform~~$475.94 ~~under~~in ~~the~~cash ~~terms~~plus ~~of their leases~~$31. ~~The~~73 ~~cost~~ of ~~the~~Pinnacle ~~expansion~~common ~~was~~stock, ~~targeted~~subject to bea ~~$225~~collar ~~million;~~provision. weThe ~~also~~transaction ~~anticipated~~is ~~providing~~subject ~~$20~~to ~~million~~approval ofby ~~tenant~~our ~~allowances. Due~~shareholders toand the ~~revised~~satisfaction ~~estimates~~of ~~for~~customary ~~tenant~~closing ~~allowances~~conditions, ~~and~~including ~~incremental~~the ~~project~~receipt ~~costs~~of ~~resulting~~necessary ~~from~~regulatory ~~construction~~and ~~delays~~governmental ~~related~~approvals. The toRestated ~~the~~Agreement ~~accident~~contains ~~that~~a ~~may~~termination ~~not~~fee beprovision ~~recoverable~~of ~~under~~$49.575 ~~our~~million ~~insurance,~~plus the ~~expansion~~reimbursement ~~project~~of ~~may~~up ~~cost~~to $2516 million toof ~~$30~~merger-related ~~million~~costs ~~more~~incurred ~~than~~by ~~originally estimated~~Pinnacle. It Since isthe ~~reasonably~~signing ~~possible~~of ~~that~~the ~~some~~Merger ofAgreement ~~these~~with ~~costs~~Pinnacle ~~may~~on beMarch ~~expensed~~13, ~~and~~2006, ~~the~~we ~~range~~have isreceived ~~estimated~~additional tounsolicited beoffers from ~~none~~other ~~to $9 million~~companies. ~~Portions~~ Financial ofCondition During the ~~incremental~~2006 ~~delay~~three-~~related~~month ~~costs may be recoverable from third parties and their insurers~~period, ~~but~~ the ~~amount~~outstanding ~~and~~balance ~~the~~on ~~timing~~our ofrevolving ~~any~~credit ~~such~~facility ~~recoveries~~decreased ~~are~~to ~~unknown~~$78.6 atmillion ~~this~~from ~~time~~$124. It5 ismillion ~~also~~at ~~reasonably~~December ~~possible~~31, ~~that~~2005, ~~this~~leaving ~~estimate~~$415.5 ~~could~~million ~~change~~available infor ~~the~~ future ~~because~~borrowing, ~~there~~after isconsideration ~~still~~of ~~uncertainty~~outstanding ~~about~~letters ~~the final costs~~ of ~~reconstruction~~credit, ~~and~~subject ~~the~~to ~~prospect~~quarterly offinancial ~~recovery~~tests ~~under~~as ~~insurance~~described below. ~~Since~~The ~~these~~maximum ~~issues~~amount ~~may~~available ~~not~~under beour ~~resolved~~revolving ~~for~~credit ~~some~~facility ~~time,~~is ~~and~~expected ~~in order~~ to ~~avoid~~decrease ~~additional~~by ~~delays,~~$125 wemillion ~~paid~~on ~~the~~June ~~contractor~~30, ~~for~~2006 ~~the~~since ~~estimated~~we ~~amount~~are ~~of work performed but~~ not ~~billed,~~commencing ~~and~~redevelopment weof ~~may~~the ~~make~~Las ~~payments~~Vegas ~~for~~Tropicana ~~change~~property ~~orders~~or ~~from~~entering ~~subcontractors~~into ~~for~~an ~~increased~~alternative ~~costs~~project ~~due~~approved toby ~~delays,~~lenders ~~and~~holding ~~for~~a ~~the~~majority ~~costs~~ of ~~dismantlement~~the ~~and rebuild~~commitments. At ~~Funds~~March ~~for the expansion will come in part from public sector subsidies~~31, ~~tax rebates and other credits~~2006, the ~~present~~outstanding ~~value~~balance of ~~which~~our ~~could~~term beloan upfacility towas $60122.8 million. We The ~~are~~Revolver ~~planning~~and ~~that~~Term ~~the~~Loan ~~costs~~contain toquarterly befinancial ~~borne by us would be funded largely from our operating cash flow~~tests, ~~with~~including ~~additional~~a ~~needs~~minimum ~~met~~fixed bycharge ~~our~~coverage ~~revolving~~ratio ~~credit~~of ~~facility~~1. ~~During~~35 ~~the~~to ~~first~~1.00 ~~half~~and ofmaximum ~~2004,~~ratios ~~our purchases~~ of ~~property~~total debt and ~~equipment~~senior ondebt anto ~~accrual~~operating ~~basis,~~cash ~~including~~flow ~~capitalized interest~~ of $64.35 ~~million,~~to ~~were $37~~1.80 ~~million for this project~~ and ~~our~~2.5 ~~expenditures~~to ~~for~~1.0, ~~tenant~~respectively, ~~allowances~~at ~~were~~March ~~$2.7~~31, ~~million~~2006. ~~Our~~ The ~~master~~actual ~~plan~~fixed ~~for~~charge acoverage ~~potential~~ratio ~~development~~was of2.72 ~~our~~to ~~Las~~1.00 ~~Vegas~~and ~~Tropicana~~the ~~site~~actual ~~envisions~~total ~~the~~debt ~~creation~~and ofsenior ~~two~~debt ~~separate~~to ~~but~~operating ~~essentially~~cash ~~equal~~flow ~~and~~ratios ~~inter-connected~~were ~~17-acre sites~~3. ~~The~~06 ~~north~~to ~~site~~1.00 ~~would~~and be1.08 ~~developed~~to ~~by us~~1. ~~The~~0, ~~south~~respectively ~~site~~at ~~would~~March be31, ~~held~~2006. During ~~for~~the ~~our~~2006 ~~future~~first ~~development~~quarter, ~~joint~~we ~~venture~~received ~~development,~~$2.0 ormillion ~~sale~~in ~~for~~cash ~~development~~in byconnection ~~another~~with ~~party~~stock option exercises. ~~For~~We ~~development~~accepted of36,154 ashares ~~potential~~of ~~project~~our oncommon ~~the~~stock ~~north~~in ~~site,~~satisfaction aof ~~detailed~~$1.1 ~~design~~million ~~has~~of ~~almost~~tax ~~been~~obligations ~~completed. The~~paid ~~design~~by ~~concept~~the ~~that~~company weduring ~~are~~the ~~finalizing~~2006 ~~calls~~first ~~for 2~~quarter,~~500~~ ~~hotel~~which ~~rooms~~were ~~and~~associated ~~suites,~~with ~~200,000~~the ~~square~~exercise ~~feet~~ of ~~dining,~~stock ~~entertainment~~options. ~~and~~ During ~~retail~~the ~~facilities,~~2006 afirst ~~120~~quarter,~~000-square-foot~~ ~~casino,~~our apurchases ~~3,800-car~~of ~~parking~~property ~~garage,~~ and aequipment, ~~four-acre~~other ~~rooftop~~than ~~pool~~those ~~recreation~~pertaining ~~deck~~to ~~overlooking~~ the ~~Strip. We~~development ~~plan~~in toEvansville, ~~complete~~Indiana ~~construction~~discussed ~~documents~~below, bywere ~~the~~primarily ~~end~~ of ~~the~~a ~~third~~routine ~~quarter of 2004~~nature. ~~During the first~~

AZTAR CORPORATION AND SUBSIDIARIES

~~half~~On ofApril ~~2004~~22, 2002, we ~~capitalized~~commenced ~~$4.6~~construction ~~million~~on ~~for~~an ~~design~~expansion ~~development~~of ~~costs~~our ~~included~~Tropicana inAtlantic ~~other assets~~City. WeThe ~~will~~expansion ~~decide~~includes by502 ~~the~~additional ~~end~~hotel ofrooms, ~~the~~20,000 ~~first~~square ~~quarter~~feet of ~~2005~~meeting ~~whether~~space, ~~to proceed~~2,400 ~~whether~~parking ~~to delay~~spaces, orand ~~whether~~"The ~~not~~Quarter ~~to proceed~~ at ~~all~~Tropicana," ~~with~~the ~~development~~project's ofcenterpiece, a ~~project~~200,000-square-foot ondining, ~~the~~entertainment ~~north~~and ~~site~~retail center. ~~The~~ ~~amount~~On ~~and~~October ~~timing~~30, of2003, ~~any~~an ~~future~~accident ~~expenditure,~~occurred ~~and~~on the ~~extent~~site of ~~any~~the ~~impact~~expansion onthat ~~existing~~brought ~~operations,~~construction ~~will~~to ~~depend~~a onhalt. ~~the~~The ~~nature~~accident ~~and~~resulted ~~timing~~in of the ~~development~~loss weof ~~ultimately~~life ~~undertake~~and serious injuries, ifas ~~any. If~~well weas ~~decide~~extensive damage to ~~abandon~~the ~~any~~ facilities inunder ~~the~~construction. ~~development~~Insurance ~~process,~~claims wefor ~~would~~business ~~have~~interruption tothat ~~conduct~~occurred afrom ~~review~~the ~~for~~date ~~impairment~~of ~~with~~the aaccident ~~possible~~through ~~write-down~~December ~~and~~31, ~~review~~2005 ~~their~~have ~~useful~~been ~~lives~~filed with aour ~~possible~~insurers ~~adjustment~~in tothe ~~depreciation~~amount ~~and~~of ~~amortization~~$52.1 ~~expense~~million of which $3. ~~These~~5 ~~reviews~~million ~~could~~has ~~result~~been inreceived. In ~~adjustments~~addition, ~~that~~we have afiled ~~material~~insurance ~~adverse~~claims ~~effect~~for onlost ~~our~~profits ~~consolidated~~and ~~results~~additional ofcosts ~~operations. The~~as ~~net~~a ~~book~~result ~~value~~ of the ~~property~~delay ~~and equipment used~~ in the ~~operation~~opening of the ~~Las~~expansion. The ~~Vegas~~total ~~Tropicana,~~of ~~excluding~~these ~~land~~claims atis ~~a cost of~~ $~~110~~70.1 million, ~~was~~of which $5814.27 million athas ~~July~~been ~~1, 2004~~received. ~~The~~ ~~net~~Profit ~~book~~recovery ~~value~~from ofinsurance ~~accounts~~is ~~receivable,~~recorded ~~inventories~~when ~~and~~the ~~prepaid~~amount ~~expenses~~of atrecovery, ~~the~~which ~~Las~~may ~~Vegas~~be ~~Tropicana~~different ~~was~~than ~~$7.8~~the ~~million~~amount ~~at July 1~~claimed, ~~2004. At~~is ~~Casino~~agreed ~~Aztar~~to ~~Evansville,~~by wethe ~~are~~insurers. We ~~adding~~have analso ~~executive~~filed ~~conference~~insurance ~~center~~claims ~~that~~of is$9.0 ~~currently~~million ~~under~~for ~~construction~~other ~~and~~costs iswe ~~scheduled~~have ~~for~~incurred ~~completion~~that ~~during~~are ~~2004. During~~related to the ~~first~~construction ~~half~~accident, of ~~2004,~~which ~~our~~$1.5 ~~purchases~~million ofhas ~~property~~been ~~and~~received. These ~~equipment~~other oncosts anare ~~accrual~~primarily ~~basis~~supplemental ~~were~~marketing costs and $3.1.6 million ~~related~~was toincluded ~~this~~in ~~project. Effective~~construction ~~January~~accident 3,receivables ~~2003,~~at weMarch ~~established~~31, ~~the~~2006. ~~Aztar~~In ~~Corporation~~order ~~Nonqualified~~to ~~Retirement~~ensure ~~Plan~~that ~~Trust for~~ the ~~benefit~~construction ofproceed ~~employees~~expeditiously ~~covered~~and byin ~~one~~order ofto ~~our~~settle ~~nonqualified~~certain ~~defined~~disputes, ~~benefit~~we ~~pension~~and ~~plans. We~~the ~~contributed~~general ~~approximately~~contractor ~~$2.0~~entered ~~million~~into toa ~~this~~settlement ~~trust~~agreement inon ~~March~~October 6, 2004. Wethat ~~will~~delineates ~~make~~how ~~periodic~~we ~~contributions~~and to the ~~trust~~contractor sowill ~~that~~share ~~funds in~~ the ~~trust~~cost ~~equal~~of and the ~~benefit~~insurance ~~obligation.~~proceeds ~~The~~received ~~funds~~for in the ~~trust~~dismantlement, ~~continue~~debris toremoval beand ~~assets of Aztar~~rebuild. We During ~~accepted 89,207 shares of our common stock in~~ the 2006 first quarter, ofwe ~~2004~~received in$3.2 ~~lieu~~million of ~~cash~~insurance ~~due~~recovery toassociated ~~the company in connection~~ with the ~~exercise of stock options~~rebuild. WeThe ~~also~~recovery ~~accepted~~was anclassified ~~additional~~as ~~80,845~~other ~~shares~~income inand ~~satisfaction~~was ofoffset ~~the~~by ~~related~~ $10.96 million ~~tax~~of ~~obligation~~direct ~~that~~costs ~~was~~incurred ~~paid~~to byobtain the ~~company during the 2004 first quarter~~recovery. ~~Such~~ ~~shares~~In ofaddition, ~~common~~at ~~stock~~March ~~are~~31, ~~stated~~2006, atour ~~cost~~share ~~and~~of ~~held~~claims asoutstanding ~~treasury~~for ~~shares~~dismantlement, todebris beremoval ~~used~~and ~~for~~rebuild ~~general~~was ~~corporate~~approximately ~~purposes~~$31 million. WeDuring ~~have~~2005, ~~received~~we ~~proposed~~began ~~assessments~~phase ~~from~~one ~~the~~of ~~Indiana~~our ~~Department~~development ofin ~~Revenue~~Evansville, inIndiana, ~~connection~~which ~~with~~includes the ~~examination~~construction of ~~our~~a ~~Indiana~~100-room ~~income~~boutique ~~tax~~hotel ~~returns~~and ~~for~~a ~~the~~multi-venue ~~years~~entertainment ~~1996 through 2002~~complex. ~~The~~ ~~assessments~~During ~~are based on~~ the ~~IDR's~~2006 ~~position~~first ~~that~~quarter, our ~~gaming~~purchases ~~taxes~~of ~~that~~property ~~are~~and ~~based~~equipment on ~~gaming~~an ~~revenue~~accrual ~~are~~basis, ~~not~~including ~~deductible~~capitalized ~~for~~interest ~~Indiana~~of ~~income tax purposes~~$0.1 Wemillion, ~~filed~~were a$4.1 ~~petition~~million infor ~~Indiana~~this ~~Tax~~project. ~~Court~~ During ~~for~~ the ~~1996~~2006 ~~and~~first ~~1997~~quarter, ~~tax~~we ~~years~~capitalized ~~and oral arguments were heard in April 2001~~$8.3 Wemillion ~~filed a formal protest~~ for ~~the~~site ~~1998~~acquisition, ~~through~~design ~~2000~~development ~~tax years~~ and ~~will~~licensing becosts ~~filing~~related ato ~~formal~~our ~~protest~~planned ~~for~~investment ~~the~~in ~~2001~~Allentown, ~~and 2002 tax years~~Pennsylvania. If Inwe ~~April~~ultimately ~~2004,~~fail ~~the~~to ~~Indiana~~obtain ~~Tax~~a ~~Court~~license ~~ruled~~ in ~~favor~~Pennsylvania, ofwe ~~the~~would ~~Indiana~~expense ~~Department~~any ofdevelopment ~~Revenue.~~costs Weunrelated ~~have~~to ~~asked~~land ~~the~~acquisitions, ~~Indiana~~which ~~Supreme~~were ~~Court~~approximately to$0.8 ~~review~~million ~~the~~at ~~ruling~~March 31, 2006. If During the ~~ruling~~2006 isfirst ~~not changed~~quarter, we ~~have~~determined ~~estimated~~ that wethe ~~will~~carrying beamount ~~obligated~~of tothe ~~pay~~deferred ~~approximately~~costs ~~$17.3~~associated ~~million~~with toour ~~cover~~potential ~~assessments~~redevelopment of ~~taxes~~the ~~and~~Las ~~interest~~Vegas ~~from~~Tropicana ~~1996~~was ~~through~~not ~~the~~recoverable ~~end~~because of the ~~first~~likelihood ~~quarter~~ of ~~2004. This~~proceeding ~~amount~~with ~~would~~a ~~then~~redevelopment bewas ~~deductible~~assessed ~~for~~as ~~federal~~less ~~income~~than ~~tax~~probable. As ~~purposes~~a result, ~~resulting~~we inrecognized aan ~~net~~expense ~~effect~~ of ~~approximately~~ $~~11.3~~26 million, which ~~has~~was ~~been~~classified ~~recorded~~ as anTropicana ~~increase~~Las toVegas ~~income~~capitalized ~~taxes~~development ~~payable~~costs ~~and~~write-off ~~expense~~ in the 2006 first quarter Consolidated Statement of ~~2004~~Operations. We have severance agreements with certain of our senior executives. Severance benefits range from a lump-sum cash payment equal to three times the sum of the executive's annual base salary and the average of the executive's annual bonuses awarded in the preceding three years plus payment of the value in the executive's outstanding stock options and vesting and distribution of any restricted stock to a lump-sum cash payment equal to ~~one half of~~ the executive's annual base salary. In certain agreements, the termination must be as a result of a change in control of Aztar. Based upon salary levels and stock options at ~~July~~March 131, ~~2004~~2006, the aggregate commitment under the severance agreements should all these executives be terminated was approximately $7266 million at ~~July~~March 131, ~~2004~~2006. At ~~July~~March 131, ~~2004~~2006, we had commitments of approximately $4615 million for the ~~Tropicana~~hotel ~~Atlantic City expansion project~~ and ~~approximately~~entertainment ~~$1.8~~complex ~~million for the executive conference center~~ at Casino Aztar Evansville.

AZTAR CORPORATION AND SUBSIDIARIES

Results of Operations The following table sets forth, in millions, our ~~revenues~~segment ~~and~~information ~~EBITDA~~for onrevenues ~~a consolidated basis~~ and ~~the portions thereof generated by each of our five casino properties~~EBITDA. Our chief operating decision maker uses only EBITDA in assessing segment performance and deciding how to allocate resources.

	Second Quarter		Six Months
			First Quarter
Revenues Tropicana Atlantic City Tropicana Las Vegas Ramada Express Laughlin Casino Aztar Evansville Casino Aztar Caruthersville Total consolidated EBITDA (a) Tropicana Atlantic City Tropicana Las Vegas Ramada Express Laughlin Casino Aztar Evansville Casino Aztar Caruthersville Corporate Total consolidated Depreciation and amortization Operating income Interest income Interest expense Loss on early retirement of debt Income taxes Net income	2004 $ 102.4 42.6 23.4 32.5 5.4 $ 206.3 ======== $ 24.3 10.1 6.0 9.6 0.9 (4.2) 46.7 (13.2) 33.5 0.2 (8.8) (8.6) (7.0) $ 9.3 ========	2003 $ 115.6 38.5 22.8 31.7 5.9 $ 214.5 ======== $ 34.2 6.5 5.9 8.9 1.1 (3.6) 53.0 (13.0) 40.0 0.2 (9.2) -- (12.2) $ 18.8 ========	2004 $ 198.5 83.6 48.2 66.1 11.6 $ 408.0 ======== $ 47.8 19.4 13.2 19.7 2.2 (8.9) 93.4 (26.2) 67.2 0.4 (17.4) (8.6) (28.6) $ 13.0 ========	2003 $ 219.7 76.8 47.2 61.9 11.9 $ 417.5 ======== $ 59.3 12.7 12.5 18.0 2.3 (7.7) 97.1 (25.5) 71.6 0.4 (18.8) -- (20.9) $ 32.3 ========
Revenues Tropicana Atlantic City Tropicana Las Vegas Ramada Express Laughlin Casino Aztar Evansville Casino Aztar Caruthersville Total consolidated EBITDA (a) Tropicana Atlantic City Tropicana Las Vegas Ramada Express Laughlin Casino Aztar Evansville Casino Aztar Caruthersville Property EBITDA Corporate Depreciation and amortization Operating income Other income Interest income Interest expense Income taxes Net income			2006 $ 116.7 40.9 27.4 36.2 7.4 $ 228.6 ======== $ 31.2 9.6 8.7 11.1 2.0 62.6 (32.4) (19.0) 11.2 2.6 0.4 (14.1) 3.1 $ 3.2 ========	2005 $ 111.7 42.2 26.5 35.5 7.4 $ 223.3 ======== $ 21.0 11.0 8.7 11.0 1.9 53.6 (7.9) (16.3) 29.4 1.6 0.2 (13.8) (7.5) $ 9.9 ========
(a)	EBITDA is net income before income taxes, interest expense, interest income, other income, Tropicana Las Vegas capitalized development costs write-off, and depreciation and amortization. EBITDA should not be construed as a substitute for either operating income or net income as they are determined in accordance with generally accepted accounting principles (GAAP). Management uses EBITDA as a measure to compare operating results among our properties and between accounting periods. We manage cash and finance our operations at the corporate level. We manage the allocation of capital among properties at the corporate level. We also file a consolidated income tax return. Management accordingly believes EBITDA is useful as a measure of operating results at the property level because it reflects the results of operating decisions at that level separated from the effects of tax and financing decisions that are managed at the corporate level. We also use EBITDA as the primary operating performance measure in our bonus programs for executive officers. Management also believes that EBITDA is a commonly used measure of operating performance in the gaming industry and is an important basis for the valuation of gaming companies. Our calculation of EBITDA may not be comparable to similarly titled measures reported by other companies and, therefore, any such differences must be considered when comparing performance among different companies. While management believes EBITDA provides a useful perspective for some purposes, EBITDA has material limitations as an analytical tool. For example, among other things, although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA does not reflect the requirements for such replacements. Tropicana Las Vegas capitalized development costs write-off, other income, interest expense, net of interest income, and income taxes are also not reflected in EBITDA. Therefore, management does not consider EBITDA in isolation, and it should not be considered as a substitute for measures determined in

(a) EBITDA is net income before income taxes, loss on early retirement of debt, interest expense, interest income, and depreciation and amortization. EBITDA should not be construed as a substitute for either operating income or net income as they are determined in accordance with generally accepted accounting principles (GAAP). Management uses EBITDA as a measure to compare operating results among our properties and between accounting periods. We manage cash and finance our operations at the corporate level. We manage the allocation of capital among properties at the corporate level. We also file a consolidated income tax return. Management accordingly believes EBITDA is useful as a measure of operating results at the property level because it reflects the results of operating decisions at that level separated from the effects of tax and financing decisions that are managed at the corporate level. We also use EBITDA as the primary operating performance measure in our bonus programs for executive officers. Management also believes that EBITDA is a commonly used measure of operating performance in the gaming industry and is an important basis for the valuation of gaming companies. Our calculation of EBITDA may not be comparable to similarly titled measures reported by other companies and, therefore, any such differences must be considered when comparing performance among different companies. While management believes EBITDA provides a useful perspective for some purposes, EBITDA has material limitations as an analytical tool. For example, among other things, although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA does not reflect the requirements for such replacements. Interest expense, net of interest income, loss on early retirement of debt, and income taxes are also not reflected in EBITDA. Therefore, management does not consider EBITDA in isolation, and

AZTAR CORPORATION AND SUBSIDIARIES

~~it should not be considered as a substitute for measures determined in~~ accordance with GAAP. A reconciliation of EBITDA with operating income and net income as determined in accordance with GAAP is reflected in the above summary.

~~Results~~Quarter ~~of Operations Six Months~~ Ended ~~July~~March 131, ~~2004~~2006 Compared to ~~Six~~Quarter ~~Months~~ Ended ~~July~~March 331, ~~2003~~2005 ~~Consolidated~~During ~~casino~~the ~~revenue~~2005 ~~was~~fourth ~~$317.7~~quarter, ~~million~~we inchanged from a 52/53 week fiscal year (ending on the ~~first~~Thursday ~~half~~nearest ofDecember ~~2004,~~31) ~~down~~to 4%a ~~from~~calendar ~~$331~~year ending December 31.3 ~~million~~As ina result, the 2006 first ~~half~~quarter contains 90 days and the 2005 first quarter, which began on December 31, 2004, contains 91 days and includes the benefit of ~~2003~~New Year's Eve. The ~~decrease~~2006 ~~was~~first ~~attributable~~quarter ~~primarily~~did tonot ~~the~~have ~~Atlantic~~a ~~City~~New ~~Tropicana,~~Year's ~~where~~Eve. Consolidated casino revenue ~~decreased~~was by $18176.96 million ~~during~~in the 2006 first ~~half~~quarter, ofup ~~2004~~$4.8 ~~versus~~million or 3% from $171.8 million in the 2005 first ~~half~~quarter. The increase consisted primarily of ~~2003~~a $3.2 ~~This~~million ~~decrease~~increase ~~was~~at ~~primarily~~Tropicana ~~attributable~~Atlantic toCity ~~business~~and ~~interruption~~a ~~resulting~~$0.7 ~~from~~million ~~the~~increase ~~October~~at ~~30,~~Ramada ~~2003~~Express ~~construction~~Laughlin. The ~~accident~~increase ~~and~~at ~~the~~Tropicana ~~July~~Atlantic 3,City ~~2003~~was ~~opening~~driven ofby ~~the~~an ~~Borgata~~increase ~~Hotel,~~in ~~Casino~~the ~~and~~volume ~~Spa.~~of ~~The~~slot ~~decrease~~play inwhile ~~casino~~the ~~revenue~~increase at ~~the~~Ramada ~~Atlantic~~Express ~~City~~Laughlin ~~Tropicana~~ was ~~partially~~driven ~~offset~~ by aan ~~$4.1 million~~ increase in ~~casino~~the ~~revenue~~slot atwin ~~Casino Aztar Evansville~~percentage. Consolidated casino costs were $70.3 million in the 2006 first quarter, up 2% or $1.62 million ~~lower~~from ~~during~~$69.1 ~~the~~million ~~2004~~in ~~versus~~the ~~2003~~2005 ~~six-month~~first ~~period,~~quarter. The ~~primarily~~increase was due primarily to athe ~~decrease~~increase in ~~consolidated~~ casino revenue. ~~Consolidated~~at ~~rooms~~Tropicana ~~revenue~~Atlantic ~~was~~City ~~$43.5~~and ~~million~~an increase in ~~the~~player ~~first~~complimentaries ~~half~~at ofRamada ~~2004~~Express Laughlin. Consolidated marketing expense decreased $4.3 million, updown 1517% from $3725.70 million in the 2005 first ~~half~~quarter. Of ofthis ~~2003~~decrease, $3.7 ~~The~~million ~~increase~~ was attributable ~~primarily~~ to ~~the~~ Tropicana ~~Las~~Atlantic ~~Vegas~~City, ~~where~~which ~~the~~incurred ~~average~~higher ~~daily~~advertising ~~rate~~and ~~increased~~other ~~24%~~marketing ~~during~~costs in the 2005 first ~~half~~quarter because of ~~2004~~efforts ~~compared~~to ~~with~~promote the ~~first~~Tropicana ~~half~~Atlantic ofCity ~~2003. The~~expansion ~~increase~~project, which opened on a limited basis in ~~the~~late ~~average~~November ~~daily~~2004 ~~rate~~and was ~~primarily~~substantially ~~attributable~~completed toby ~~increased~~December ~~tourism~~2004. Other factors contributing to the ~~Las~~decrease ~~Vegas~~at ~~market.~~Tropicana ~~The~~Atlantic ~~increase~~City include a reduction in ~~consolidated~~payroll ~~rooms~~costs ~~revenue~~and ~~was~~the ~~offset~~impact byof acosts ~~$1.1~~associated ~~million~~with ~~increase~~New inYear's ~~consolidated~~Eve ~~rooms~~special ~~expense. The~~event ~~increase~~functions, which due to the change in ~~consolidated~~our ~~rooms~~fiscal ~~expense~~year ~~was~~described ~~due~~above, ~~primarily~~were toincurred in the ~~increase~~2005 infirst ~~rooms~~quarter ~~revenue~~but atnot in the ~~Tropicana~~2006 ~~Las~~first ~~Vegas~~quarter. Consolidated general and administrative expenses ~~increased~~were $324.76 million ~~or 10%~~ in the 2006 first ~~half~~quarter, ofdown ~~2004~~$1.7 million or 6% from $3726.63 million ~~during~~in the 2005 first ~~half of 2003~~quarter. The ~~increase~~decrease was due to ~~increases~~corporate atwhere ~~corporate~~general and ~~all~~administrative ofexpenses ~~our~~decreased ~~operating~~by ~~properties~~$2.5 ~~with~~million. The ~~the~~decrease ~~exception~~at ofcorporate ~~Casino~~consisted ~~Aztar~~primarily ~~Caruthersville. The~~of ~~increase~~a issettlement ~~not~~loss ~~attributable~~of to$2.9 ~~any~~million ~~one~~recognized ~~significant~~in ~~factor~~the ~~but~~2005 ~~instead~~first ~~due~~quarter related to a ~~combination~~lump ofsum ~~many~~cash ~~smaller~~payment ~~factors,~~made ~~including~~to ~~rising~~a ~~employee~~defined benefit ~~and~~plan ~~salary costs~~participant. Construction accident related expense was $21.46 million in the 2006 first ~~half~~quarter, ofup ~~2004~~$1. ~~The~~2 ~~expense~~million ~~relates~~from ~~primarily~~$0.4 tomillion ~~supplemental~~in ~~marketing costs incurred to decrease~~ the ~~effect~~2005 offirst ~~the~~quarter. The ~~business~~costs ~~interruption~~and ~~caused~~expenses byin the ~~October~~2006 ~~30,~~and ~~2003~~2005 ~~construction~~first ~~accident~~quarters asconsist ~~well~~of as professional fees incurred as a result of the October 30, 2003 construction accident. Construction accident insurance recoveries were $84.58 million in the 2006 first ~~half~~quarter ofas ~~2004~~compared with $0.2 ~~These~~million ~~recoveries~~in ~~consist~~the of2005 afirst ~~business~~quarter. The ~~interruption~~2006 ~~recovery~~and of2005 ~~$3.5~~first ~~million~~quarter ~~and~~recoveries aconsisted ~~recovery~~of recoveries due to the delay in the opening of the Atlantic City Tropicana expansion project ~~of $5~~.~~0 million.~~ The ~~business~~recoveries ~~interruption~~represent ~~recovery reflects~~ a ~~profit recovery applicable to the fourth quarter of 2003. The recovery from the delay in the opening of the expansion project represents a~~ portion of the anticipated profit that we would have recognized had the expansion opened as originally projected as well as some reimbursement for costs incurred as a result of the delay. ~~Both~~These types of insurance recoveries ~~were~~are ~~recognized~~recorded when they are agreed to by our insurers. ~~Consolidated~~Merger ~~interest~~related ~~expense~~expenses ~~was~~were $170.49 million in the ~~first~~2006 ~~half of 2004 compared with $18.8 million in the~~ first ~~half of 2003~~quarter. ~~The~~These ~~decrease~~expenses inrelate ~~interest expense was~~ primarily ato ~~result~~professional offees anincurred ~~increase~~ in ~~capitalized~~connection ~~interest~~with ~~relating~~merger toactivities. Consolidated ~~the~~depreciation ~~Atlantic~~and ~~City~~amortization ~~Tropicana~~expense ~~expansion, partially offset by~~ increased ~~interest due to a higher level of debt outstanding. Capitalized interest was~~ $32.07 million ~~higher~~ in the ~~2004~~2006 ~~versus~~first ~~2003~~quarter, ~~six-month~~up ~~period. Loss~~17% onfrom ~~early retirement of debt was~~ $816.63 million in the 2005 first ~~half of 2004~~quarter. ~~The~~Approximately ~~loss, which resulted from the June 2, 2004 redemption of~~ $~~192~~2.35 million of ~~our~~the ~~outstanding~~increase 8was ~~7/8%~~attributable ~~Senior~~to ~~Subordinated~~Tropicana ~~Notes,~~Atlantic ~~consisted~~City ofand awas ~~redemption~~due ~~premium~~primarily ofto ~~$6.3~~a ~~million~~reduction ~~and~~in the ~~write-off~~useful lives of ~~unamortized~~certain ~~debt~~assets ~~issuance~~that ~~costs~~are ofbeing $2renovated.~~3 million.~~

AZTAR CORPORATION AND SUBSIDIARIES

~~Consolidated~~Tropicana ~~income~~Las ~~taxes~~Vegas ~~were~~capitalized development costs write-off was $2826.60 million in the 2006 first ~~half~~quarter. We ofdetermined ~~2004~~that ~~compared~~the ~~with~~carrying ~~$20.9~~amount ~~million~~of in the ~~first~~deferred ~~half~~costs ofassociated ~~2003. The~~with ~~increase~~our ~~was~~potential ~~largely~~redevelopment ~~due~~of tothe anLas ~~increase~~Vegas inTropicana ~~our~~was ~~Indiana~~not ~~income~~recoverable ~~tax~~because ~~provision,~~the ~~partially~~likelihood ~~offset~~of byproceeding with a ~~decrease~~redevelopment inwas ~~income~~assessed ~~before~~as ~~income~~less ~~taxes~~than probable. In ~~connection~~ Other ~~with~~income awas ~~review~~$2.6 ofmillion ~~our~~in ~~Indiana~~the ~~income~~2006 ~~tax~~first ~~returns~~quarter, ~~for~~up ~~the~~$1.0 ~~years~~million ~~1996~~from ~~through~~$1.6 ~~2002,~~million in the ~~Indiana~~2005 ~~Department~~first quarter. Other income consists of ~~Revenue~~insurance ~~took~~recovery ~~the~~associated ~~position~~with ~~that~~the ~~our~~rebuilding ~~gaming~~of ~~taxes~~the ~~that~~expansion ~~are~~at ~~based~~the onAtlantic ~~gaming~~City ~~revenue~~Tropicana, ~~are~~net ~~not~~of ~~deductible~~direct ~~for~~costs ~~Indiana~~to ~~income~~obtain ~~tax~~the ~~purposes~~recovery. In Consolidated ~~response~~income totax ~~the~~benefit ~~position~~was ~~taken~~$3.1 bymillion in the ~~Indiana~~first ~~Department~~quarter of ~~Revenue,~~2006 wecompared ~~filed~~with a ~~petition~~consolidated ~~with~~provision ~~the~~for ~~Indiana~~income ~~Tax~~taxes ~~Court~~of ~~for~~$7.5 million in the ~~1996~~first ~~and~~quarter ~~1997~~of ~~tax~~2005. The ~~years~~decrease ~~and~~of we$10.6 ~~filed~~million was largely due to a ~~formal~~decrease ~~protest~~in ~~for~~income ~~the~~before ~~1998~~income ~~through~~taxes ~~2000~~in ~~tax~~the ~~years~~2006 ~~and~~versus ~~will~~2005 befirst ~~filing~~quarter aas ~~formal~~well ~~protest~~as ~~for~~$3.4 ~~the~~million ~~2001~~of ~~and~~non-recurring ~~2002~~income tax ~~years. In~~benefits ~~April~~that ~~2004,~~were recognized during the ~~Indiana~~2006 ~~Tax~~first ~~Court~~quarter. ~~ruled~~During inthe ~~favor~~2006 offirst ~~the~~quarter, ~~Indiana~~we ~~Department~~reached ofa ~~Revenue. We~~favorable ~~have~~settlement ~~asked~~with the ~~Indiana~~Internal ~~Supreme~~Revenue ~~Court~~Service toon ~~review~~ the ~~ruling. If~~only ~~the~~remaining ~~ruling~~issue isin ~~not~~dispute ~~changed,~~for wethe ~~have~~examinations ~~estimated~~of ~~that~~our wefederal ~~will~~income betax ~~obligated~~returns tofor ~~pay~~the ~~approximately~~years ~~$17~~1994 through 2003.3 The ~~million~~issue toinvolved ~~cover~~the ~~assessments~~deductibility of ~~taxes~~a ~~and~~portion ~~interest~~of ~~from~~payments ~~1996~~on ~~through~~certain ~~the~~liabilities ~~end~~related ofto the ~~first~~restructuring ~~quarter~~ of ~~2004~~Ramada, Inc. ~~This~~As ~~amount~~a ~~would~~result ~~then~~of bethe ~~deductible~~settlement, ~~for~~we ~~federal~~recognized an income tax ~~purposes,~~benefit ~~resulting in a net effect~~ of ~~approximately~~ $111.34 million,. Also ~~which~~in ~~has~~the ~~been~~2006 ~~recorded~~first asquarter, anour ~~increase~~application tofor ~~income~~tax ~~taxes~~credits ~~payable~~available ~~and~~from ~~expense~~New inJersey ~~the~~was ~~first quarter of 2004~~approved. ~~The~~As ~~ongoing~~a ~~effect~~result of ~~this~~the ~~issue~~approval, iswe ~~also~~recognized, ~~included~~net inof a federal income ~~taxes~~tax ~~after~~effect, ~~the~~a ~~first~~non-recurring ~~quarter~~income tax benefit of ~~2004~~$2.0 million. TROPICANA ATLANTIC CITY Casino revenue ~~decreased~~was by $1899.93 million ~~or 10%~~ in the 2006 first ~~half~~quarter, ofup ~~2004~~3% from $~~193~~96.81 million in the 2005 first ~~half of 2003~~quarter. The ~~decrease~~increase ~~in casino revenue~~ consisted ~~primarily~~ of ana $113.92 million ~~decrease~~increase in slot revenue, ~~and~~which awas ~~$7.0~~due ~~million~~in ~~decrease~~part into ~~games~~an ~~revenue. The~~increase ~~decrease~~in ~~was~~the ~~primarily~~use ~~attributable~~of tocash ~~the~~incentives. ~~disruption~~Casino ~~that~~costs ~~followed~~increased ~~the~~$0.4 ~~October~~million ~~30,~~in ~~2003~~the ~~construction~~2006 ~~accident~~versus ~~and~~2005 ~~the~~first ~~July~~quarter 3,primarily ~~2003~~as ~~opening~~a result of the ~~Borgata~~increase ~~Hotel,~~in ~~Casino~~casino ~~and Spa~~revenue. ~~Casino~~ Rooms ~~costs~~revenue ~~decreased~~was $28.71 million in the 2006 first ~~half~~quarter, ofup ~~2004~~23% ~~compared~~from to$6.6 million in the 2005 first ~~half~~quarter. ofThe ~~2003,~~increase ~~primarily~~was ~~due~~attributable to aan ~~decrease~~increase in ~~casino~~the ~~revenue. As~~number ~~noted~~of ~~above,~~rooms ~~construction~~occupied ~~accident~~on ~~insurance~~a ~~recoveries~~non-complimentary ~~were~~basis ~~$8.5~~and ~~million~~an increase in the ~~first~~average ~~half~~daily ~~of 2004~~rate. The ~~These~~total ~~recoveries~~number ~~consist~~ of arooms ~~business~~occupied ~~interruption~~on ~~recovery~~a ofnon-complimentary ~~$3.5~~basis ~~million~~increased 17% and athe ~~recovery~~average ~~due~~daily torate ~~the~~increased ~~delay~~6% induring the ~~opening~~2006 ofversus ~~the~~2005 ~~Atlantic~~first ~~City~~quarter. ~~Tropicana~~Rooms ~~expansion~~costs ~~project~~increased ofslightly, up $5.0.4 million~~. The~~ ~~business~~in ~~interruption~~the ~~recovery~~2006 ~~reflects~~versus a2005 ~~profit~~first ~~recovery~~quarter ~~applicable~~primarily toas a result of the ~~fourth~~increase ~~quarter~~in ofrooms ~~2003~~revenue. Marketing ~~The~~expense ~~recovery~~decreased ~~from~~$3.7 ~~the~~million, ~~delay~~down in20% ~~the~~from ~~opening~~$18.3 ofmillion in the ~~expansion~~2005 ~~project~~first ~~represents~~quarter. Tropicana aAtlantic ~~portion~~City ofincurred ~~the~~higher ~~anticipated~~advertising ~~profit~~and ~~that~~other wemarketing ~~would~~costs ~~have~~in ~~recognized~~the ~~had~~2005 ~~the~~first ~~expansion~~quarter ~~opened~~because asof ~~originally~~efforts ~~projected~~to aspromote ~~well~~the asTropicana ~~some~~Atlantic ~~reimbursement~~City ~~for~~expansion ~~costs~~project, ~~incurred~~which asopened on a ~~result~~limited ofbasis ~~the~~in ~~delay. Both~~late ~~recoveries~~November ~~were~~2004 ~~recognized~~and ~~when~~was ~~agreed~~substantially tocompleted by ~~our~~December ~~insurers~~2004. Other ~~Construction~~factors ~~accident~~contributing ~~related~~to ~~expense~~the ~~was~~decrease ~~$2.4~~include ~~million~~a reduction in ~~the~~payroll ~~first~~costs ~~half~~and ofthe ~~2004. As~~impact ~~noted~~of ~~above,~~costs ~~this~~associated ~~expense~~with ~~relates~~New ~~primarily~~Year's toEve ~~supplemental~~special ~~marketing~~event ~~costs~~functions, ~~incurred~~which due to ~~decrease~~ the ~~effect~~change ofin ~~the~~our ~~business~~fiscal ~~interruption~~year asdescribed ~~well~~above, aswere ~~professional~~incurred ~~fees~~in ~~incurred~~the as2005 afirst ~~result~~quarter ofbut not in the ~~construction~~2006 ~~accident~~first quarter. ~~TROPICANA~~Construction ~~LAS~~accident ~~VEGAS~~related ~~Rooms~~expense ~~revenue~~was ~~increased~~ $61.06 million in the 2006 first ~~half of 2004~~quarter, up ~~30%~~$1.2 million from $200.34 million in the 2005 first ~~half of 2003~~quarter. The ~~increase~~costs ~~was~~and ~~attributable~~expenses ~~to a 24% increase~~ in the ~~average~~2006 ~~daily~~and ~~rate~~2005 ~~and~~first aquarters 5%consist ~~increase~~of inprofessional ~~rooms~~fees ~~occupied~~incurred onas a ~~non-complimentary~~result ~~basis. The~~of ~~increased~~the ~~average~~October ~~daily~~30, ~~rate~~2003 ~~and~~construction ~~higher~~accident. Construction ~~occupancy~~accident ~~during~~insurance ~~the~~recoveries ~~first~~were ~~half~~$4.8 ofmillion ~~2004~~in ~~are~~the ~~due~~2006 ~~primarily~~first toquarter ~~increased~~as ~~tourism~~compared towith ~~the Las Vegas market~~$0. ~~The~~2 ~~increase~~million in ~~rooms~~the ~~revenue~~2005 ~~was~~first ~~offset~~quarter. byThe a2006 ~~$0.9~~and ~~million~~2005 ~~increase~~first inquarter ~~rooms~~recoveries ~~cost. CASINO~~consisted ~~AZTAR~~of ~~EVANSVILLE Casino~~recoveries ~~revenue~~due ~~was~~to ~~$60.4~~the ~~million~~delay in the ~~first~~opening ~~half~~ of ~~2004,~~the upexpansion $4project.1 The ~~million~~recoveries orrepresent 7%a ~~from~~portion ~~$56.3~~of ~~million in~~ the ~~first~~anticipated ~~half~~profit ofthat ~~2003.~~we ~~The~~would ~~increase~~have inrecognized ~~casino~~had ~~revenue~~the ~~consisted~~expansion ofopened aas $4originally ~~million~~projected ~~increase~~as inwell ~~slot~~as ~~revenue.~~some ~~This~~reimbursement ~~increase~~for ~~was~~costs ~~primarily~~incurred ~~due~~as toa anresult ~~increase~~of in the ~~total~~delay. ~~number~~These types of ~~patrons~~insurance ~~visiting~~recoveries ~~our~~are ~~riverboat. Mild~~recorded ~~weather~~when ~~conditions~~they ~~during~~are ~~the~~agreed ~~2004~~to ~~first~~by ~~quarter~~our ~~contrasted with severe weather during the~~insurers.

AZTAR CORPORATION AND SUBSIDIARIES

~~2003~~Depreciation expense was $13.1 million in the 2006 first quarter, ~~contributed~~up $2.5 million or 24% from $10.6 million in the 2005 first quarter. The increase was due primarily to a reduction in the useful lives of certain assets that are being renovated. TROPICANA LAS VEGAS Rooms revenue decreased $1.4 million in the first quarter of 2006, down 9% from $15.4 million in the first quarter of 2005. The decrease was primarily attributable to an 8% decrease in the average daily rate. RAMADA EXPRESS LAUGHLIN Casino revenue increased ~~number~~$0.7 million in the first quarter of ~~patrons~~2006, up 3% from $20.3 million in the first quarter of 2005. This increase was primarily due to a $0.6 million increase in slot revenue, which was driven by an increase in the slot win percentage. Casino costs increased by $0.5 million in the 2006 first quarter, up 8% from $6.5 million in the 2005 first quarter. The increase in casino costs was due primarily to an increase in player complimentaries. CORPORATE Corporate general and administrative expenses decreased $2.5 million during the first quarter of 2006, down 32% from $7.7 million in the first quarter of 2005. During the 2005 first quarter, we made a lump sum cash payment of $8.2 million to a defined benefit plan participant in exchange for the participant's right to receive specified pension benefits. The distribution resulted in a settlement loss of $2.9 million in the 2005 first quarter. Merger related expenses were $0.9 million in the 2006 first quarter. These expenses relate primarily to professional fees incurred in connection with merger activities. Tropicana Las Vegas capitalized development costs write-off was $26.0 million in the 2006 first quarter. We determined that the carrying amount of the deferred costs associated with our potential redevelopment of the Las Vegas Tropicana was not recoverable because the likelihood of proceeding with a redevelopment was assessed as less than probable. Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America that require us to make estimates and assumptions about the effects of matters that are inherently uncertain. Those estimates and assumptions affect the reported amounts and disclosures in our consolidated financial statements. Actual results inevitably will differ from those estimates, and such difference may be material to the financial statements. Of our accounting estimates, we believe the following may involve a higher degree of judgment and complexity. Property and equipment - At March 31, 2006, we have property and equipment of $1.2 billion, representing 82% of our total assets. We exercise judgment with regard to property and equipment in the following areas: (1) determining whether an expenditure is eligible for capitalization or if it should be expensed as incurred, (2) estimating the useful life and determining the depreciation method of a capitalized asset, (3) estimating the fair value of a legally enforceable asset retirement obligation and in situations where the timing and/or method of settlement are conditional on a future event, incorporating this uncertainty into the estimate of the obligation's fair value, and (4) if events or changes in circumstances warrant an assessment, determining if and to what extent an asset has been impaired. The accuracy of our judgments impacts the amount of depreciation expense we recognize, the amount of gain or loss on the disposal of these assets, the fair value of asset retirement obligations and the related accretion expense recognized in subsequent periods, whether or not an asset is impaired and, if an asset is impaired, the amount of the loss related to the impaired asset that is recognized.

AZTAR CORPORATION AND SUBSIDIARIES

~~Construction~~Our ~~accident~~judgments ~~insurance~~about ~~recoveries~~useful ~~were~~lives, ~~$5.0~~cash ~~million~~flows in ~~the~~connection ~~2004~~with ~~second~~asset ~~quarter.~~retirement Asobligations ~~noted~~as ~~above,~~well as the ~~October~~existence ~~30,~~and ~~2003~~degree ~~construction~~of ~~accident~~asset ~~resulted~~impairments incould ~~the~~be ~~delay~~affected inby ~~the~~future ~~opening~~events, ofsuch ~~the~~as ~~Atlantic~~property ~~City~~expansions, ~~Tropicana~~property ~~expansion~~developments, ~~project.~~obsolescence, ~~The~~new ~~recovery~~competition, ~~associated~~new ~~with~~regulations ~~this~~and ~~delay~~new ~~represents~~taxes, aand ~~portion~~other ofeconomic ~~profit~~factors. Historically, ~~that~~there wehave ~~would~~been ~~have~~no ~~generated~~events ~~had~~or ~~the~~changes ~~expansion~~in ~~opened~~circumstances asthat ~~originally~~have ~~projected~~resulted asin ~~well~~an asimpairment ~~some~~loss ~~reimbursement~~and ~~for~~our ~~costs~~other ~~incurred~~estimates as athey ~~result~~relate ofto ~~the~~property ~~delay. This~~and ~~recovery~~equipment ~~represents~~have ~~only~~not ~~the~~resulted ~~amount~~in significant changes. We don't anticipate that our ~~insurer~~current ~~has~~estimates ~~agreed~~are toreasonably ~~pay. Construction~~likely ~~accident~~to ~~related~~change ~~expense~~in ~~was~~the $2future.3 Expenditures ~~million~~associated inwith the ~~2004~~repair ~~second~~or ~~quarter.~~maintenance Asof ~~noted~~a ~~above,~~capital ~~this~~asset ~~expense~~are ~~relates~~expensed ~~primarily~~as toincurred. ~~supplemental~~Expenditures ~~marketing~~that ~~costs~~are ~~incurred~~expected to ~~decrease~~provide ~~the~~future ~~effect~~benefits ofto the ~~business~~company ~~interruption~~or ~~caused~~that byextend the ~~October~~useful ~~30,~~life ~~2003~~of ~~construction~~an ~~accident~~existing asasset ~~well~~are ascapitalized. The ~~professional~~useful ~~fees~~lives ~~incurred~~that aswe aassign ~~result~~to ofproperty and equipment represent the ~~construction~~estimated ~~accident. TROPICANA~~number ~~LAS~~of ~~VEGAS Rooms~~years ~~revenue~~that ~~increased~~the ~~$3.2~~property ~~million~~and inequipment ~~the~~is ~~2004~~expected ~~second~~to ~~quarter,~~contribute upto ~~32%~~the ~~from~~revenue ~~$9.9~~generating ~~million~~process inbased ~~the~~on ~~2003~~our ~~second~~current ~~quarter~~operating strategy. ~~The~~We ~~increase~~believe ~~was~~that ~~attributable~~the touseful alives ~~25%~~of ~~increase~~our inproperty ~~the~~and ~~average~~equipment ~~daily~~expire ~~rate~~evenly ~~and~~over atime. Accordingly, 7%we ~~increase~~depreciate inour ~~rooms~~property ~~occupied~~and equipment on a ~~non~~straight-~~complimentary~~line basis~~. The~~ ~~increased~~over ~~average~~their ~~daily~~useful ~~rate~~lives. When the acquisition and ~~higher~~(or) ~~occupancy~~normal ~~during~~operation ~~the~~of ~~2004~~a ~~second~~tangible ~~quarter~~long-lived ~~are~~asset ~~due~~legally ~~primarily~~obligates us to ~~increased~~perform ~~tourism~~or stand ready to ~~the~~perform ~~Las~~certain ~~Vegas~~retirement ~~market. The~~activities, ~~increase~~we inrecognize ~~rooms~~the ~~revenue~~fair ~~was~~value ~~offset~~of bythe aobligation ~~$0.6~~in ~~million~~the ~~increase~~period in ~~rooms~~which ~~cost~~it is incurred. ~~CASINO~~ The ~~AZTAR~~fair ~~EVANSVILLE~~value ~~Casino~~of ~~revenue~~the ~~was~~liability ~~$29.6~~is ~~million~~estimated inusing ~~the~~a ~~2004~~quoted ~~second~~market ~~quarter~~price or alternatively, upa 2%present ~~from~~value ~~$28.9~~technique ~~million~~based inon the ~~2003~~expected ~~second~~future ~~quarter.~~cash ~~The~~flows ~~casino~~of ~~revenue~~the ~~increase~~retirement ~~was~~activities. ~~primarily~~Uncertainty ~~due~~with regard to anthe ~~increase~~performance inand ~~the~~(or) ~~total~~timing ~~number~~ of ~~patrons~~the ~~visiting~~obligation ~~our~~is ~~riverboat~~factored ~~during~~into the ~~2004~~calculation ~~second~~of ~~quarter~~the obligation's fair value. The ~~Casino~~offset ~~costs~~to ~~were~~the ~~$0.8~~liability ~~million~~is orrecorded 7%as ~~lower~~an inincrease to the ~~2004~~carrying ~~versus~~value ~~2003~~of ~~second~~the ~~quarter~~asset, ~~due~~which ais ~~decrease~~subsequently inallocated ~~gaming~~to ~~tax~~depreciation expense~~. The~~ ~~decrease~~on ina ~~gaming~~straight-line ~~tax~~basis ~~expense~~over ~~was~~the ~~attributable~~remaining touseful ~~$1.3~~life ~~million~~of ~~recorded~~the asset. Accretion in the ~~second~~fair ~~quarter~~value of ~~2003~~the obligation is recognized as aaccretion ~~result~~expense ofand anis ~~Indiana~~measured ~~legislation~~by ~~change~~applying ~~requiring~~our ~~casino~~estimated ~~operators~~credit-adjusted torisk-free ~~retroactively~~interest ~~apply~~rate, ~~the~~which ~~dockside~~existed ~~graduated~~when ~~tax~~the ~~rates~~liability ~~effective~~was ~~July~~initially 1established, ~~2002~~to ~~versus~~the ~~August~~amount 1,of ~~2002,~~ the ~~date~~liability ~~dockside~~at ~~gaming~~the ~~came~~beginning ~~into~~of ~~effect~~each period. ~~The~~Changes ~~impact~~in the fair value of ~~this~~the ~~retroactive~~obligation ~~increase~~resulting from changes in the ~~second~~factors ~~quarter~~used ofto ~~2003~~determine ~~was~~it ~~partially~~are ~~offset~~recorded in the period of change by ana ~~increase~~corresponding change in ~~gaming~~the ~~taxes~~carrying invalue of the ~~second~~tangible ~~quarter~~long-lived asset and in the period of ~~2004,~~change ~~which~~and ~~are~~(or) ~~based~~in onsubsequent ~~casino~~periods ~~revenue. Critical~~by ~~Accounting~~changes ~~Estimates~~ in depreciation and accretion expenses. Our ~~consolidated~~recorded ~~financial~~obligations ~~statements~~for ~~are~~retirement ~~prepared~~activities intotaled ~~accordance~~$0.6 ~~with~~million ~~accounting~~at ~~principles~~March ~~generally~~31, ~~accepted~~2006. When events or changes in circumstances indicate the ~~United~~carrying ~~States~~value of ~~America~~an ~~that~~asset ~~require~~may usnot be recoverable, we group assets to ~~make~~the ~~estimates~~level ~~and~~where ~~assumptions~~we ~~about~~can identify future cash flows and estimate the ~~effects~~undiscounted offuture ~~matters~~cash flows that the assets are ~~inherently~~expected ~~uncertain~~to generate. ~~Those~~In ~~estimates~~the ~~and~~event ~~assumptions~~that ~~affect~~ the ~~reported~~sum ~~amounts~~of ~~and~~the ~~disclosures~~undiscounted infuture ~~our~~cash ~~consolidated~~flows ~~financial~~is ~~statements.~~less ~~Actual~~than ~~results~~the ~~inevitably~~carrying ~~will~~amount, ~~differ~~we ~~from~~would ~~those~~recognize ~~estimates,~~an ~~and~~impairment ~~such~~loss ~~difference~~equal ~~may~~to bethe ~~material~~excess toof the ~~financial~~carrying ~~statements.~~value Ofover ~~our~~the ~~accounting~~fair ~~estimates,~~value. Such wean ~~believe~~impairment ~~the~~loss ~~following~~would ~~may~~be ~~involve~~recognized as a ~~higher~~non-cash ~~degree~~component of ~~judgment~~operating ~~and complexity~~income. ~~Property~~ Our ability to determine and ~~equipment~~measure -an Atimpaired ~~July~~asset 1depends, ~~2004~~to a large extent, weon ~~have~~our ~~property~~ability ~~and~~to ~~equipment~~properly ofestimate ~~$1.2~~future ~~billion,~~cash ~~representing~~flows. ~~84%~~ Development ofCosts ~~our~~- ~~total~~During ~~assets.~~the We2006 ~~exercise~~first ~~judgment~~quarter, ~~with~~we ~~regard~~determined tothat ~~property~~the ~~and~~carrying ~~equipment~~amount inof the ~~following~~deferred ~~areas:~~development ~~(1)~~costs ~~determining~~associated ~~whether~~with anour ~~expenditure~~potential isredevelopment ~~eligible~~of ~~for~~the ~~capitalization~~Las orVegas ifTropicana itwas ~~should~~not berecoverable ~~expensed~~because asthe ~~incurred,~~likelihood ~~(2)~~of ~~estimating~~proceeding ~~the~~with ~~useful~~a ~~life~~redevelopment ~~and~~was ~~determining~~assessed ~~the~~as ~~depreciation~~less ~~method~~than ofprobable. As a ~~capitalized asset~~result, ~~and~~we ~~(3)~~recognized ifan ~~events~~expense orof ~~changes~~$26 inmillion, ~~circumstances~~which ~~warrant~~was anclassified ~~assessment,~~as ~~determining~~Tropicana ifLas ~~and~~Vegas tocapitalized ~~what~~development ~~extent~~costs anwrite-off ~~asset~~in ~~has~~the ~~been~~2006 ~~impaired~~first quarter Consolidated Statement of Operations. ~~The~~At ~~accuracy~~March of31, ~~our~~2006, ~~judgments~~capitalized ~~impacts~~development ~~the~~costs, ~~amount~~included ofas ~~depreciation~~part ~~expense~~of weother ~~recognize~~assets, ~~the~~totaled ~~amount~~$10.4 ofmillion. These ~~gain~~costs orinclude ~~loss~~site onacquisition, ~~the~~design ~~disposal~~development ofand ~~these~~licensing ~~assets,~~costs ~~whether~~incurred orin ~~not~~connection anwith ~~asset~~our isplanned ~~impaired~~investment ~~and~~in Allentown, ifPennsylvania, anwhich ~~asset~~ is ~~impaired,~~contingent ~~the~~upon ~~amount~~our ofobtaining ~~the~~a ~~loss~~Pennsylvania ~~related~~gaming tolicense. ~~the~~If ~~impaired~~we ~~asset~~ultimately ~~that~~fail isto ~~recognized. Our~~obtain ~~judgements~~a ~~about~~gaming ~~useful~~license ~~lives~~in asPennsylvania, ~~well~~we aswould ~~the~~expense ~~existence~~any ~~and~~development ~~degree~~costs ofunrelated ~~asset~~to ~~impairments~~land ~~could~~acquisitions, bewhich ~~affected~~were byapproximately ~~future~~$0.8 ~~events~~million at March 31, ~~such~~2006.

AZTAR CORPORATION AND SUBSIDIARIES

asStock-based ~~property~~compensation ~~expansions,~~- ~~property~~We ~~developments,~~measure ~~obsolescence,~~the ~~new~~cost ~~competition,~~of ~~new~~employee ~~regulations~~services ~~and~~received ~~new~~in ~~taxes,~~exchange ~~and~~for ~~other~~an ~~economic~~award ~~factors. Historically,~~of ~~there~~equity ~~have~~instruments ~~been~~based noon ~~events~~the orgrant-date ~~changes~~fair invalue ~~circumstances~~of ~~that~~the ~~have~~award ~~warranted~~and anthe ~~impairment~~estimated ~~review~~number ~~and~~of ~~our~~awards ~~other~~that ~~estimates~~are asexpected ~~they~~to ~~relate~~vest. The togrant-date ~~property~~fair ~~and~~value ~~equipment~~of ~~have~~stock ~~not~~options ~~resulted~~was inestimated ~~significant~~using ~~changes.~~a ~~With~~Black-Scholes ~~the~~option ~~exception~~pricing ofmodel, awhich ~~possible~~takes ~~impairment~~into ~~review~~account ~~with~~the ~~regard~~following tosix factors: (1) the ~~Tropicana~~current ~~Las~~price ~~Vegas~~of ~~development~~the ~~discussed~~underlying ~~below,~~stock weon ~~don't~~the ~~anticipate~~date ~~that~~of ~~our~~grant, ~~current~~(2) ~~estimates~~the ~~are~~exercise ~~reasonably~~price ~~likely~~of tothe ~~change~~option, in(3) the ~~future. Expenditures~~expected ~~associated~~dividend ~~with~~yield, (4) the ~~repair~~expected orvolatility ~~maintenance~~ of athe ~~capital~~underlying ~~asset~~stock ~~are~~over ~~expensed~~the asoption's ~~incurred.~~expected ~~Expenditures~~life, ~~that~~(5) ~~are~~the expected tolife ~~provide~~of ~~future~~the ~~benefits~~option, toand (6) the ~~company~~risk-free orinterest ~~that~~rate ~~extend~~during the ~~useful~~expected life of anthe ~~existing~~option. ~~asset~~Of ~~are~~these ~~capitalized. The~~factors, ~~useful~~we ~~lives~~exercise ~~that~~judgment wewith ~~assign~~regard to ~~property~~selecting ~~and~~both ~~equipment~~the ~~represent~~expected volatility of the ~~estimated~~underlying ~~number~~stock ofand ~~years~~the ~~that~~expected life of the ~~property~~option. ~~and~~Expected ~~equipment~~volatility is ~~expected~~estimated tothrough ~~contribute~~a toreview ~~the~~of ~~revenue~~historical ~~generating~~stock ~~process~~price ~~based~~volatility onadjusted ~~our~~for ~~current~~future ~~operating strategy~~expectations. We ~~believe~~The ~~that~~expected term of the ~~useful~~options ~~lives~~is estimated through a review of ~~our~~historical ~~property~~exercise behavior and ~~equipment~~other ~~expire~~factors ~~evenly~~expected ~~over~~to ~~time. Accordingly,~~influence webehavior ~~depreciate~~such ~~our~~as ~~property~~expected volatility and ~~equipment~~employees' onages aand ~~straight-line~~lengths ~~basis~~of ~~over~~service. ~~their~~We ~~useful~~also ~~lives. When~~exercise ~~events~~judgment orwith ~~changes~~regard into ~~circumstances~~estimating ~~indicate~~ the ~~carrying~~number ~~value~~ of anawards ~~asset~~that ~~may~~are ~~not~~expected beto ~~recoverable~~vest, wewhich ~~group~~is ~~assets~~based toon ~~the~~historical ~~level~~experience ~~where~~adjusted wefor ~~can identify~~ future ~~cash~~expectations. ~~flows~~Effective ~~and~~January ~~estimate~~1, ~~the~~2006, ~~undiscounted~~we ~~future~~began ~~cash~~recognizing ~~flows~~compensation ~~that~~cost ~~the~~for ~~assets~~stock ~~are~~options ~~expected~~under toSFAS ~~generate~~123(R). InCompensation ~~the~~cost ~~event~~for ~~that~~ the ~~sum~~portion of ~~the~~awards ~~undiscounted~~for ~~future~~which ~~cash~~the ~~flows~~requisite isservice ~~less~~had ~~than~~not ~~the~~been ~~carrying~~rendered ~~amount,~~that wewere ~~would~~outstanding ~~recognize~~on anJanuary ~~impairment~~1, ~~loss~~2006 ~~equal~~is torecognized over the ~~excess~~remaining ofvesting ~~the~~period ~~carrying~~based ~~value~~on ~~over~~ the grant-date fair value~~. Such~~ anthat ~~impairment~~was ~~loss~~previously ~~would~~established befor ~~recognized~~pro asforma apurposes ~~non-cash~~and ~~component~~disclosed ofin ~~operating~~the ~~income. Our~~notes ~~ability~~ to ~~determine~~the ~~and~~Consolidated ~~measure~~Financial anStatements ~~impaired~~for ~~asset~~reporting ~~depends,~~periods tothat aended ~~large~~prior ~~extent, on our ability~~ to ~~properly~~January ~~estimate~~1, ~~future cash flows~~2006. ~~Our~~ Income ~~master~~tax ~~plan~~liabilities ~~for~~- aWe ~~potential~~are ~~development~~subject ofto ~~our~~federal ~~Las~~income ~~Vegas~~taxes ~~Tropicana~~and ~~site~~state ~~envisions~~income ~~the~~taxes ~~creation~~in ofthose ~~two~~jurisdictions ~~separate~~in ~~but~~which ~~essentially~~our ~~equal~~properties ~~and inter-connected 17-acre sites~~operate. ~~The~~We ~~north~~exercise ~~site~~judgment ~~would~~with beregard ~~developed~~to byincome ~~us.~~taxes ~~The~~in ~~south~~the ~~site~~following ~~would~~areas: be(1) ~~held~~interpreting ~~for~~whether ~~our~~expenses ~~future~~are ~~development,~~deductible ~~joint~~in ~~venture~~accordance ~~development,~~with orfederal ~~sale~~income ~~for~~tax ~~development~~and bystate ~~another~~income ~~party. For~~tax ~~development~~codes, of(2) aestimating ~~potential~~annual ~~project~~effective onfederal ~~the~~and ~~north~~state ~~site,~~income atax ~~detailed~~rates ~~design~~and ~~has~~(3) ~~almost~~assessing ~~been~~whether ~~completed.~~deferred Wetax ~~plan~~assets toare, ~~complete~~more ~~construction~~likely ~~documents~~than bynot, ~~the~~expected ~~end~~to ofbe ~~the~~realized. The ~~third~~accuracy ~~quarter~~ of ~~2004.~~these Wejudgments ~~will~~impacts ~~decide by~~ the ~~end~~amount of ~~the~~income ~~first~~tax ~~quarter~~expense ofwe ~~2005~~recognize ~~whether~~each toperiod. As ~~proceed,~~a ~~whether~~matter toof ~~delay~~law, orwe ~~whether~~are ~~not~~subject to ~~proceed~~examination atby ~~all~~federal ~~with~~and ~~development~~state oftaxing aauthorities. We ~~project~~have onestimated ~~the~~and ~~north~~provided ~~site.~~for ~~The~~income ~~amount~~taxes ~~and~~in ~~timing~~accordance ofwith ~~any~~settlements ~~future~~reached ~~expenditure,~~with ~~and~~ the ~~extent~~Internal ofRevenue ~~any~~Service ~~impact~~in onprior ~~existing~~audits. Although ~~operations,~~we ~~will~~believe ~~depend~~that on the ~~nature~~amounts ~~and~~reflected ~~timing~~in ofour ~~the~~tax ~~development~~returns wesubstantially ~~ultimately~~comply ~~undertake,~~with ifthe ~~any. If~~applicable wefederal ~~decide~~and tostate ~~abandon~~tax ~~any~~regulations, ~~facilities~~both in the ~~development~~IRS ~~process,~~and wethe ~~would~~various ~~have~~state totaxing ~~conduct~~authorities acan ~~review~~and ~~for~~have ~~impairment~~taken ~~with~~positions acontrary ~~possible~~to ~~write-down~~ours ~~and~~based ~~review~~on their ~~useful~~interpretation ~~lives~~of ~~with~~the alaw. A ~~possible~~tax ~~adjustment~~position tothat ~~depreciation~~is ~~and~~challenged ~~amortization~~by ~~expense.~~a ~~These~~taxing ~~reviews~~authority could result in ~~adjustments~~an ~~that~~adjustment ~~have~~to aour ~~material~~income ~~adverse~~tax ~~effect~~liabilities onand ~~our~~related ~~consolidated~~tax ~~results~~provision. During of2005, ~~operations. The~~the ~~net~~IRS ~~book~~completed ~~value~~its examination of the ~~property~~company's ~~and~~income ~~equipment~~tax ~~used~~return infor the ~~operation~~year of2003. During ~~the Las Vegas Tropicana~~2004, ~~excluding~~the ~~land~~IRS atcompleted aits ~~cost~~examination of ~~$110~~the ~~million,~~company's ~~was~~income ~~$58.2~~tax ~~million~~returns atfor ~~July~~the 1,years ~~2004~~2000 through 2002. The ~~net~~only ~~book~~issue ~~value~~in ofdispute ~~accounts~~in ~~receivable,~~these ~~inventories,~~examinations ~~and~~involved ~~prepaid~~the ~~expenses~~deductibility atof ~~the~~a ~~Las~~portion ~~Vegas~~of ~~Tropicana~~the ~~was~~payments ~~$7.8~~on ~~million~~certain atliabilities ~~July~~related 1,to ~~2004. Development~~the ~~Costs~~restructuring -of AtRamada ~~July~~Inc. 1,During ~~2004~~2003, ~~capitalized~~the ~~development~~IRS ~~costs,~~completed ~~included~~its asexamination ~~part~~for ofthe ~~other~~years ~~assets,~~1994 ~~totaled~~through ~~$16.3~~1999 ~~million. These~~and ~~costs~~settled ~~relate~~one ~~primarily~~of tothe ~~expenditures~~two ~~incurred~~remaining inissues ~~connection~~entirely ~~with~~and a portion of the ~~master~~other ~~plan~~remaining ~~for~~issue, resulting in a ~~potential~~tax ~~development~~benefit of ~~our~~$6.7 ~~Las~~million. The ~~Vegas~~issue ~~Tropicana~~that ~~site,~~was ~~including~~settled aentirely ~~detailed~~involved ~~design~~the ~~plan~~deductibility ~~and~~of ~~construction~~certain ~~documents~~complimentaries provided to customers. WeThe ~~will~~other ~~decide~~issue byinvolved the ~~end~~deductibility of ~~the~~a ~~first~~portion ~~quarter~~ of ~~2005~~payments ~~whether~~on tocertain ~~proceed,~~liabilities ~~whether~~related to ~~delay~~the restructuring, orthe ~~whether~~same ~~not~~issue toas ~~proceed~~described atabove ~~all~~for ~~with~~ the ~~project~~2000 ~~development~~through 2003 years. IfDuring wethe ~~ultimately~~2006 ~~decide~~first toquarter, ~~abandon~~we ~~the~~reached ~~project~~a ~~and~~favorable ~~there~~settlement iswith nothe ~~other~~IRS ~~use~~on ~~for~~the ~~our~~only ~~plans,~~remaining weissue ~~would~~for ~~write~~the ~~off~~years ~~these~~1994 ~~development~~through ~~costs~~2003. ~~Our~~As ~~final decision could be impacted by~~ a ~~number~~result of ~~factors,~~the ~~including~~settlement, ~~but~~we ~~not~~recorded ~~limited~~an ~~to,~~income ~~changing~~tax ~~market~~benefit ~~conditions,~~of an$1.4 ~~inability~~million. to On ~~obtain~~July ~~sufficient~~2, ~~financing~~2002, ~~and~~the ~~act~~State of ~~terror,~~New ~~new~~Jersey ~~regulations~~enacted ~~and new laws,~~ the ~~estimated~~Business ~~construction~~Tax ~~costs,~~Reform ~~etc~~Act. ~~Income tax liabilities -~~ We ~~are~~have ~~subject~~provided tofor ~~federal~~New Jersey income taxes ~~and~~based ~~state~~on ~~income~~our ~~taxes~~best inestimate ~~those~~of ~~jurisdictions~~the ineffect ~~which~~of ~~our~~this ~~properties operate~~law. WeCertain ~~exercise~~provisions ~~judgment~~of ~~with~~the ~~regard~~Act toare ~~income~~subject ~~taxes~~to infuture ~~the~~rules ~~following~~and ~~areas:~~regulations ~~(1)~~and ~~interpreting~~the ~~whether~~discretion ~~expenses~~of ~~are~~the ~~deductible~~Director. inWe ~~accordance~~believe ~~with~~our ~~federal~~interpretation ~~income~~of ~~tax~~the ~~and~~law ~~state~~is ~~income~~reasonable ~~tax~~and ~~codes,~~we ~~(2)~~don't ~~estimating~~expect ~~annual~~material ~~effective~~adjustments; ~~federal~~however, ~~and~~we ~~state~~are ~~income~~unable ~~tax rates and (3)~~

AZTAR CORPORATION AND SUBSIDIARIES

~~assessing whether deferred tax assets are, more likely than not, expected~~ to bedetermine ~~realized. The accuracy of these judgments impacts~~ the ~~amount~~discretion of income tax expense we recognize each period. As a matter of law, we are subject to examination by federal and state taxing authorities. We have estimated and provided for income taxes in accordance with settlements reached with the ~~Internal Revenue Service in prior audits~~Director. ~~Although~~The weNew ~~believe~~Jersey ~~that~~Division the amounts reflected in our tax returns substantially comply with the applicable federal and state tax regulations, both the IRS and the various state taxing authorities can and have taken positions contrary to ours based on their interpretation of ~~the~~Taxation ~~law. A tax position that~~ is ~~challenged~~examining ~~by a taxing authority could result in an adjustment to our income tax liabilities and related tax provision. During~~ the ~~first~~New ~~quarter~~Jersey ~~of 2004, the IRS completed its examination of the company's~~ income tax returns for the years ~~2000~~1995 through ~~2002~~2001. The ~~only~~Indiana ~~issue~~Department ~~in dispute involved the deductibility~~ of aRevenue portion of the payments on certain liabilities related to the restructuring of Ramada Inc. During the fourth quarter of 2003, the IRS completed its examination for the years 1994 through 1999 and settled one of the two remaining issues entirely and a portion of the other remaining issue, resulting in a tax benefit of $6.7 million. The issue that was settled entirely involved the deductibility of certain complimentaries provided to customers. The other issue involved the deductibility of a portion of payments on certain liabilities related to the restructuring, the same issue as described above for the 2000 through 2002 years. We have reserved the right to pursue the unagreed portion of this issue in court for the years 1994 through 2002 and we would receive a refund, if successful. On July 2, 2002, the State of New Jersey enacted the Business Tax Reform Act. We have provided for New Jersey income taxes based on our best estimate of the effect of this law. Certain provisions of the Act are subject to future rules and regulations and the discretion of the Director. We believe our interpretation of the law is ~~reasonable and we don't expect material adjustments; however, we are unable to determine the discretion of the Director. The New Jersey Division of Taxation is~~ examining the ~~New~~Indiana ~~Jersey~~ income tax returns for the years ~~1995~~2003 ~~through~~and ~~1998~~2004. We believe that adequate provision for income taxes and interest has been made in the financial statements. Ramada indemnification - We have agreed to indemnify Ramada against all monetary judgments in lawsuits pending against Ramada and its subsidiaries as of the conclusion of the Restructuring on December 20, 1989, as well as all related attorney's fees and expenses not paid at that time, except for any judgments, fees or expenses accrued on the hotel business balance sheet and except for any unaccrued and unreserved aggregate amount up to $5.0 million of judgments, fees or expenses related exclusively to the hotel business. Aztar is entitled to the benefit of any crossclaims or counterclaims related to such lawsuits and of any insurance proceeds received. There is no limit to the term or the maximum potential future payment under this indemnification. In addition, we agreed to indemnify Ramada for certain lease guarantees made by Ramada. The lease terms potentially extend through 2015 and Ramada guaranteed all obligations under these leases. We have recourse against a subsequent purchaser of the operations covered by these leases. The estimated maximum potential amount of future payments we could be required to make under these indemnifications is $7.6.5 million at ~~July~~March 131, ~~2004~~2006. We would be required to perform under this guarantee 1) if monetary judgments and related expenses in lawsuits pending against Ramada and its subsidiaries as of the conclusion of the Restructuring exceeded the above described amount, or 2) if lessees with lease guarantees failed to perform under their leases, the lessee and lessor could not reach a negotiated settlement and the lessor was able to successfully proceed against Ramada, who in turn was able to successfully proceed against the company. In connection with these matters, we established a liability at the time of the Restructuring and our remaining accrued liability was $3.8 million at ~~July~~March 131, ~~2004~~2006. Impact ~~and~~of nothe ~~events~~October or30, ~~circumstances~~2003 ~~have~~construction accident - An accident occurred on the site of the expansion of the Atlantic City Tropicana. In order to ~~require~~ensure usthat the construction proceed expeditiously and in order to ~~change~~settle certain disputes, we and the ~~estimate~~general contractor entered into a settlement agreement on October 6, 2004 that delineates how we and the contractor will share the cost of and the insurance proceeds received for the dismantlement, debris removal and rebuild. ~~Impact~~During the 2006 first quarter, we recorded $3.2 million of insurance recovery for rebuild activities. The recovery was recognized as other income and was offset by $0.6 million of direct costs to obtain the ~~October~~recovery. Equity 30Instruments In December 2004, ~~2003~~the ~~construction~~Financial ~~accident~~Accounting Standards Board issued Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based AnPayment". SFAS ~~accident~~123(R), ~~occurred~~which became effective for the company on January 1, 2006, establishes standards for the ~~site~~accounting for transactions in which an entity exchanges its equity instruments for goods or services. SFAS 123(R) replaces Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation". In addition, SFAS 123(R) supersedes Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" and related interpretations, which we previously elected to follow. Prior to January 1, 2006, we measured the ~~parking~~cost of our stock options by applying the intrinsic-~~garage~~value-based ~~component~~method of accounting as prescribed by APB 25 and related interpretations. Under APB 25, because the ~~expansion~~exercise price of the ~~Atlantic~~company's ~~City~~stock options equaled the market price of the underlying stock on the date of grant, no compensation expense was recognized. SFAS 123(R) requires a public entity to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award and the estimated number of awards that are expected to vest. That cost is recognized over the period during which an employee is required to

AZTAR CORPORATION AND SUBSIDIARIES

~~Tropicana.~~provide ~~Debris~~service ~~removal~~in onexchange ~~the~~for ~~portion of~~ the ~~garage~~award, ~~that~~which ~~collapsed~~ is ~~complete~~usually ~~and~~the ~~construction~~vesting ~~has~~period. As ~~recommenced~~permitted onunder ~~all~~SFAS ~~portions of the project. In 2003~~123(R), we ~~reduced~~have ~~construction~~elected into ~~progress~~apply ~~for the estimated asset loss and recorded~~ a ~~receivable~~modified ofprospective ~~approximately~~application $3as ~~million. We~~the ~~believe~~transition itmethod ~~is probable that any additional asset loss will be recovered~~ from ~~first~~APB ~~party~~25 ~~insurance~~to orSFAS ~~from third parties or their insurers~~123(R). Compensation Nocost ~~additional~~for ~~asset loss has been noted after~~ the ~~debris~~portion ~~removal. The full extent~~ of ~~additional~~awards ~~asset~~for ~~loss,~~which ifthe ~~any,~~requisite ~~will~~service has not bebeen ~~known~~rendered ~~until~~that aare ~~full~~outstanding ~~inspection~~as of ~~potential~~the ~~damages~~required iseffective ~~performed. We~~date ~~will~~is ~~continue~~recognized toas ~~assess other potential losses and costs we might incur in relation to~~ the ~~construction~~requisite ~~accident.~~service Weis ~~are~~rendered ~~depending~~ on ~~the~~or ~~general~~after ~~contractor to perform under~~ the ~~terms~~required ofeffective ~~the~~date ~~contract~~based ~~and to deliver a completed project. We are also depending~~ on the ~~tenants~~grant-date infair ~~our~~value ~~dining/entertainment/retail~~as ~~complex~~previously todetermined ~~timely perform~~ under ~~the~~SFAS ~~terms of their leases~~123. ~~The~~For ~~cost~~periods ofbefore the ~~expansion~~required ~~was~~effective ~~targeted~~date, tocompanies bemay ~~$225~~elect ~~million;~~to weadjust ~~also~~financial ~~anticipated~~statements ~~providing $20 million~~ of ~~tenant~~prior ~~allowances. Due~~periods toon ~~revised~~a ~~estimates~~basis ~~for~~consistent ~~tenant~~with ~~allowances~~the ~~and~~pro ~~incremental~~forma ~~project~~disclosures ~~costs~~required ~~resulting~~for ~~from~~those ~~construction~~periods ~~delays~~by ~~related~~SFAS to123. We ~~the~~have ~~accident~~elected ~~that may~~ not beto ~~recoverable~~adjust ~~under~~ our ~~insurance,~~financial ~~the~~statements ~~expansion~~for ~~project~~prior ~~may~~periods. ~~cost~~We ~~$25~~recognized ~~million to~~ $301.1 million ~~more~~of ~~than~~compensation ~~originally~~expense ~~estimated. It~~in isthe ~~reasonably~~Consolidated ~~possible~~Statement ~~that some~~ of ~~these~~Operations ~~costs~~during ~~may be expensed and~~ the ~~range~~quarter isended ~~estimated~~March to31, ~~be from none to $9 million~~2006. ~~Portions~~After of the ~~incremental delay-~~related ~~costs~~income ~~may~~tax ~~be recoverable from third parties and their insurers~~effect, ~~but the amount and timing of any such recoveries are unknown at~~ this ~~time.~~resulted Itin isa ~~also~~decrease ~~reasonably possible that this estimate could change~~ in ~~the~~net ~~future~~income, ~~because~~net ~~there~~income isper ~~still~~common ~~uncertainty~~share ~~about~~and ~~the~~net ~~final~~income ~~costs~~per ofcommon ~~reconstruction~~share ~~and~~assuming ~~the~~dilution ~~prospect~~ of ~~recovery~~$0.7 ~~under~~million, ~~insurance~~$. ~~Stock~~02 ~~Option~~and ~~Accounting As~~$.02, ~~permitted~~respectively. Under ~~under~~APB ~~generally~~25, ~~accepted~~there ~~accounting~~would ~~principles,~~not we have ~~elected~~been toany ~~follow~~compensation ~~Accounting Principles Board Opinion No~~expense. Based 25on ~~entitled~~stock ~~"Accounting~~options ~~for~~granted ~~Stock~~through ~~Issued~~March to31, ~~Employees"~~2006, ~~and~~we ~~related~~estimate ~~Interpretations~~that inwe ~~accounting~~will ~~for~~record ~~our stock-based employee~~ compensation ~~arrangements~~expense ~~because the alternative fair-value-based method~~ of ~~accounting~~$2.7 ~~provided~~million for ~~under~~the ~~Financial~~remainder ~~Accounting Standards Board Statement~~ of ~~Financial~~2006, ~~Accounting Standards No~~$2.4 ~~123~~million ~~entitled "Accounting~~ for ~~Stock-Based~~2007 ~~Compensation"~~and ~~requires~~$0.7 ~~use~~million ~~of option valuation models that were not developed~~ for ~~use in valuing employee stock options~~2008. ~~Under~~As ~~APB 25, because the exercise price~~ of ~~our~~March ~~stock~~31, ~~options equals the market price of the underlying stock on the date of grant~~2006, nowe ~~compensation~~had ~~expense is recognized~~$5. ~~Under~~8 ~~SFAS~~million ~~123, the estimated fair value~~ of ~~our~~unrecognized ~~stock~~compensation ~~options~~cost ~~would be amortized to expense over their vesting period. Pro forma information regarding net income~~ and ~~earnings per share as if~~ we ~~had~~expect ~~accounted~~to ~~for~~recognize ~~our~~that ~~stock~~cost ~~options~~over ~~under~~a ~~the fair~~weighted-~~value-based~~average ~~method~~period of ~~accounting for the periods ended July~~ 1,.8 ~~2004 and July 3, 2003 is as follows (in millions, except per share data):~~years.

	Second Quarter		Six Months
Net income, as reported Deduct: Total stock-based employee compensation expense determined under the fair-value-based method of accounting, net of income tax benefit Pro forma net income Net income per common share: As reported Pro forma Net income per common share assuming dilution: As reported Pro forma	2004 $ 9.3 (0.9) $ 8.4 ======== $ .26 $ .24 $ .25 $ .23	2003 $ 18.8 (0.9) $ 17.9 ======== $ .53 $ .51 $ .51 $ .49	2004 $ 13.0 (1.7) $ 11.3 ======== $ .36 $ .31 $ .35 $ .30	2003 $ 32.3 (1.5) $ 30.8 ======== $ .90 $ .85 $ .87 $ .83

AZTAR CORPORATION AND SUBSIDIARIES

Private Securities Litigation Reform Act Certain information included in Aztar's Form 10-K for the year ended ~~January~~December 131, ~~2004~~2005, this Form 10-Q and other materials filed or to be filed with, or furnished or to be furnished to the Securities and Exchange Commission (as well as information included in oral statements or other written statements made or to be made by us, including those made in Aztar's ~~2003~~2005 annual report) contains statements that are forward-looking. These include forward-looking statements relating to the following ~~activities~~items, among others: operation and expansion of existing properties, ~~in particular the Atlantic City Tropicana,~~ including future performance; ~~development of the Las Vegas Tropicana and financing and/or concluding an arrangement with a partner for such development; other~~ business development activities; uses of free cash flow; stock repurchases; debt repayments; possible future debt refinancings; and ~~use~~expensing of ~~derivatives~~actuarial losses. These forward-looking statements generally can be identified by phrases such as we "believe," "expect," "anticipate," "foresee," "forecast," "estimate," "target," or other words or phrases of similar import. Similarly, statements that describe our business strategy, outlook, objectives, plans, intentions or goals are also forward-looking statements. Such forward-looking information involves important risks and uncertainties that could significantly affect results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements made by us or on our behalf. These risks and uncertainties include, but are not limited to, the following factors as well as other factors described from time to time in Aztar's reports filed with or furnished to the SEC: those factors relating to ~~terrorism~~war and terrorist activities, the ~~uncertainty~~price of ~~war~~fuel and other factors affecting discretionary consumer spending; uncertainties related to the extent and timing of our recoveries from our insurance carriers for our various losses suffered in connection with the accident on October 30, 2003; the extent to which ~~our~~we ~~existing~~realize ~~operations~~revenue ~~will continue to be adversely affected by the ongoing effects of the accident on October 30, 2003; uncertainties related to the extent~~ and ~~effects~~EBITDA ofincreases ~~the~~as ~~delay~~a inresult ~~the construction and completion~~ of the Tropicana Atlantic City expansion~~, which could be significantly greater and longer than we currently anticipate~~; ~~uncertainties in connection with the renegotiation of~~ our ~~collective bargaining agreements; our~~ ability to execute our development plans, estimates of development costs and returns on development capital; construction and development factors, including zoning and other regulatory issues, environmental restrictions, soil conditions, weather, fire, flood and other natural hazards, site access matters, shortages of material and skilled labor, labor disputes and work stoppages, and engineering and equipment problems; factors affecting leverage and debt service, including sensitivity to fluctuation in interest rates; access to available and feasible financing; regulatory and licensing matters; third-party consents, approvals and representations, and relations with ~~partners, owners,~~ suppliers and other third parties; reliance on key personnel; salaries and retirement dates of defined benefit plan participants; business and economic conditions; the cyclical nature of the hotel business and the gaming business; the effects of weather; market prices of our common stock; litigation outcomes, judicial actions, labor negotiations, legislative matters and referenda including the potential legalization of gaming in Maryland and New York and VLTs at the Meadowlands in New Jersey, and taxation including potential tax increases in Indiana, Missouri, Nevada and New Jersey; the impact of new competition on our operations including ~~the~~prospective ~~Borgata~~new incompetition ~~Atlantic City and gaming~~ in Pennsylvania; and the effects of other competition, including locations of competitors and operating and marketing competition. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and speak only as of the date made. Item 3. Quantitative and Qualitative Disclosures About Market Risk For current information that affects information incorporated by reference in Item 7A of the Company's Annual Report on Form 10-K for the fiscal year ended ~~January~~December 131, ~~2004~~2005 see "Note 32: Long-term Debt" ~~and "Note 12: Subsequent Events"~~ of the Notes to Consolidated Financial Statements included in this Form 10-Q under Item 1.

AZTAR CORPORATION AND SUBSIDIARIES

Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. We carried out an evaluation as of ~~July~~March 131, ~~2004~~2006, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our chief executive officer and chief financial officer concluded that the Company's disclosure controls and procedures were effective to provide reasonable assurance that the desired control objectives were achieved. Changes in Internal Control over Financial Reporting There have not been any changes in our internal control over financial reporting during the quarter ended ~~July~~March 131, ~~2004~~2006, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. PART II - OTHER INFORMATION Item 1. Legal Proceedings In connection with Case No. CV-S-94-1126-DAE(RJJ)-BASE FILE (the "Poulos/Ahearn Case"), Case No. CV-S-95-00923-DWH(RJJ) (the "Schreier Case") and Case No. CV-S-95-936-LDG(RLH) (the "Cruise Ship Case"), (collectively, the "Consolidated Cases" as Case No. CV-S-94-1126-RLH(RJJ)), as reported under Part I, Item 3 of the Company's Form 10-K for the year ended December 31, 2005, the defendants (including the Company) have filed cost bills seeking recovery of certain costs incurred in the litigation. The plaintiffs have opposed the awarding of these costs. The parties have agreed to delay the filing of briefs in the Ninth Circuit on the plaintiffs' appeal of the underlying case until the District Court rules on the defendants' motion for an award of their costs. As reported under Part I, Item 3 of the Company's Form 10-K for the year ended December 31, 2005, the Company was named as a defendant to an action brought by Aaron Dolgin. Currently, the Company is exploring a negotiated resolution of the Appeal and issues regarding the collection of the Judgment. Between approximately March 17, 2006 and April 24 2006, five substantially identical putative class actions were filed against Aztar and the members of our board of directors. Two of the lawsuits were filed in the Superior Court of the State of Arizona in and for the County of Maricopa, one was filed in the Nevada District Court in and for Clark County, and two were filed in the Court of Chancery of the State of Delaware in and for New Castle County. The Arizona complaints are captioned Plumbers Local Union No. 519 Pension Trust Fund v. Aztar Corp. et al., Case No. CV2006-004622; and Robert Glasmann, v. Aztar Corp. et al., Case No. CV2006-004087. The Nevada complaint is captioned John Drauch v. Aztar Corp. et al., Case No. A519833. The Delaware complaints are captioned Esther Lowinger v. Aztar Corp. et al., Civil Action No. 2045-N and Yolanda Heady v. Robert M. Haddock, et al., Civil Action No. 2090-N. Collectively, we refer to these actions as the Pinnacle Complaints. The Pinnacle Complaints allege, among other things, that the defendants

Item 1. Legal Proceedings As reported under Part II, Item 1 of the Company's Form 10-Q for the quarter ended April 1, 2004, on March 30, 2004, the Company and its affiliate Adamar of New Jersey, Inc. were named as defendants to an action in the United States District Court, District of New Jersey. The action arises out of the October 30, 2003 collapse of a portion of a parking garage under construction at the Tropicana Casino and Resort in Atlantic City, New Jersey. The action was brought by Zurich American Insurance Company, which issued a policy of "Completed Value Builders Risk" insurance covering the construction of the garage and related improvements at the Tropicana. The action seeks declaratory relief with respect to certain items of loss for which claims have been made or may be made by the Company or the general contractor on the project, Keating Building Corporation. Specifically, the action seeks a judicial declaration of the meaning and application of the insurance policy to losses on account of "debris removal," "mold damage" and "water damage." Zurich has advanced or paid in excess of $21 million under its policy on account of claimed losses associated with the collapse and has not contested the validity of its policy or that the collapse was generally an insured event under the policy, but does contest its obligations to pay all or portions of the categories of loss identified in its complaint. The Company disagrees with Zurich's positions as set forth in its complaint and intends to contest the action vigorously. The Company and Keating Building Corporation have agreed to refrain from asserting any claims that each may have against the other at this time. Discovery has begun. As reported under Part II, Item 1 of the Company's Form 10-Q for the quarter ended April 1, 2004, on April 21, 2004, the Company filed an action in the Superior Court of the State of Arizona, Maricopa County, against Lexington Insurance Company; U.S. Fire Insurance Company; Westchester Surplus Lines Insurance Company; Essex Insurance Company; Certain Underwriters at Lloyd's, London; Hartford Fire Insurance Company and Zurich American Insurance Company. The action also arises out of the garage

AZTAR CORPORATION AND SUBSIDIARIES

~~collapse. The~~breached ~~Company~~their ~~filed~~fiduciary ~~the~~duties ~~action~~by ~~seeking~~failing ~~declaratory~~to ~~relief~~conduct ~~and~~an ~~damages~~auction ~~for~~or ~~breach~~active ofmarket ~~contract~~check ~~under~~prior ~~policies~~to ofentering ~~insurance~~into ~~issued by~~ the ~~defendant~~merger ~~insurers~~agreement ~~in connection~~ with ~~losses~~Pinnacle ~~claimed~~and by ~~the~~causing ~~Company~~Aztar onto ~~account~~agree ~~of the collapse, including losses for business interruption at the Atlantic City Tropicana due~~ to the ~~collapse~~termination ~~and~~fee ~~the~~provisions ~~resulting~~in ~~impairment of~~ the ~~Company's~~Pinnacle ~~hotel,~~merger ~~restaurant~~agreement, ~~casino and related operations there,~~ which ~~the~~allegedly ~~defendant~~will ~~insurers~~deter ~~have~~other ~~refused~~bidders tofor ~~pay in full~~Aztar. The ~~Company~~Pinnacle ~~seeks~~Complaints ~~a declaration establishing its right to coverage for its business interruption losses and extra expenses incurred on account of the loss~~seek, ~~payment~~among ~~of such losses and expenses, including its "loss adjustment" expenses up to $1 million, its attorneys' fees in connection with the action, and~~ other ~~relief that may be available. The defendant insurers have moved to dismiss the action on the ground that New Jersey is a more convenient forum. As reported under Part II~~things, ~~Item~~an 1injunction ofagainst the ~~Company's Form 10-Q for the quarter ended April 1~~merger, ~~2004,~~rescission ~~on March 10, 2004, the Company and its affiliates Adamar~~ of ~~New Jersey, Inc. and~~ the ~~Tropicana~~merger ~~Casino~~if ~~and~~it ~~Resort in Atlantic City were named as defendants to an action in the Court of Common Pleas in Philadelphia County, Pennsylvania. The plaintiff, Scannicchio's Restaurant,~~ is ~~located~~ inconsummated ~~the vicinity of the garage collapse. The lawsuit purports to be a class action on behalf of Scannicchio's Restaurant~~ and ~~all~~fees ~~neighboring businesses for damages to buildings~~ and ~~loss of profits~~costs. ~~The~~Plaintiffs ~~action seeks compensatory and punitive damages~~ in ~~unspecified~~the ~~amounts~~Glasmann ~~for negligence~~ and ~~for~~Plumbers ~~private~~Local ~~and~~Union ~~public nuisance~~No. ~~The~~ ~~Company~~519 ~~disagrees~~actions ~~with~~moved ~~the allegations against it and its affiliated entities set forth in the complaint and intends~~ to ~~contest~~consolidate ~~the~~those ~~action~~actions ~~vigorously. The Company has filed petitions with the court for dismissal of the action based~~ on ~~lack~~April ~~of jurisdiction. As reported under Part II~~11, ~~Item~~2006 1and ~~of the Company's Form 10-Q~~ for ~~the~~a ~~quarter~~temporary ~~ended~~restraining ~~April~~order 1,and ~~2004,~~preliminary oninjunction ~~December~~barring ~~29,~~us ~~2003,~~from ~~the~~paying ~~Company~~to ~~and~~Pinnacle the ~~Tropicana~~termination ~~Casino~~fee and ~~Resort~~expenses inprovided ~~Atlantic~~for ~~City were named as defendants to an action brought by Govathlay Givens~~ in the ~~Superior~~merger ~~Court of New Jersey in Atlantic County~~agreement. ~~The~~On ~~action~~April ~~also arises out of the garage collapse. Between June 15~~27, ~~2004 and June 24~~2006, ~~2004,~~the ~~twenty-six~~Arizona ~~additional~~court ~~complaints~~denied ~~were filed by other plaintiffs for wrongful death for individuals who were killed in~~ the ~~collapse~~Glasmann and ~~for~~Plumbers ~~compensatory~~Local ~~and~~Union ~~punitive~~No. ~~damages~~519 ofmotions ~~unspecified amounts~~ in ~~connection~~all ~~with personal injuries suffered in the collapse~~respects. ~~Also~~On ~~named~~April ~~as defendants in one or more of these complaints are various companies involved with the project~~20, ~~including the Company's affiliate Adamar of New Jersey~~2006, Inc.; Fabi Construction, Inc.; Keating Building Corporation; Wimberly, Allison, Tong & Goo; SOSH Architects; DeSimone Consulting Engineers; Mid-State Filigree Systems; Pro Management Group, Inc.; Liberty Mutual Insurance Co.; Mitchell Bar Placement, Inc.; and Site-Blauvelt Engineers. The Company disagrees with the ~~allegations~~defendants ~~against~~moved ~~it and its affiliates set forth in the complaints and intends~~ to ~~contest~~dismiss ~~these actions vigorously. The court is handling these cases in a coordinated fashion as~~ the ~~Tropicana~~Lowinger ~~Parking~~action ~~Garage~~for ~~Collapse~~failure ~~Litigation~~to ~~and~~state ~~has issued~~ a ~~Case~~claim ~~Management~~upon ~~Order~~which ~~governing~~relief ~~various~~may ~~matters~~be ~~concerning~~granted ~~complaints, answers~~ and ~~cross-claims,~~to asdismiss ~~well~~or asstay ~~discovery and mediation. On June 4, 2004,~~ the ~~Company~~Lowinger ~~and its affiliate Adamar of New Jersey, Inc. were named as defendants to an~~ action in ~~the~~favor ~~United States District Court, District~~ of ~~New~~prior ~~Jersey. The~~filed ~~plaintiff,~~Arizona ~~Liberty~~cases ~~Mutual Fire Insurance Company, a liability insurer, has interpleaded its policy limits~~ and ~~seeks~~for an order ~~relieving~~staying itdiscovery ofin ~~further responsibility for~~ the ~~defense~~Lowinger ~~and~~action ~~indemnity~~pending ~~of various lawsuits against~~ the ~~Company~~resolution ~~and others arising out~~ of ~~the~~their ~~October~~motion ~~30, 2003 collapse of the parking garage at the expansion~~ to ~~the~~dismiss ~~Tropicana~~or ~~Casino~~stay ~~and~~this ~~Resort in Atlantic City, New Jersey~~action. ~~The~~No ~~Company~~dates ~~has~~for ~~not yet responded to~~ the ~~complaint,~~completion ~~and~~of nodiscovery ~~trial date~~ or ~~other~~trial ~~schedule~~have ~~has yet~~ been ~~established~~set byfor ~~the~~any ~~court. On July 14, 2004, the Company and its affiliate Adamar~~ of ~~New~~these ~~Jersey, Inc. were named as defendants in two~~ actions ~~in the Superior Court of New Jersey in Atlantic County~~. ~~The~~We ~~actions~~believe ~~arise out of an incident~~ that ~~took~~each ~~place on October 24, 2002, at the construction site~~ of the ~~expansion~~Pinnacle ofComplaints ~~the~~is ~~Tropicana~~without ~~Casino~~merit, and ~~Resort~~we inintend ~~Atlantic~~to ~~City,~~defend ~~New~~against ~~Jersey. The~~them ~~plaintiffs are Antonio DeShazo and Johnnie J~~vigorously. Item ~~Caldwell~~2. ~~The~~ ~~plaintiffs~~Unregistered ~~seek~~Sales ~~compensatory~~of ~~and~~Equity ~~punitive~~Securities ~~damages~~and Use of ~~unspecified~~Proceeds

(c)	Purchases of Equity Securities
	The following table provides information on a monthly basis for the first quarter ended March 31, 2006 with respect to the Company's purchases of equity securities.

Period	(a) Total Number of Shares Purchased	(b)Average Price Paid per Share	(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
Month #1 January 1, 2006 to January 31, 2006	36,154	$30.47	--	794,224**
Month #2 February 1, 2006 to February 28, 2006	--	--	--	794,224**
Month #3 March 1, 2006 to March 31, 2006	--	--	--	794,224**

*	In January 2006, the Company accepted 36,154 shares of its common stock in lieu of cash due to the Company in connection with the exercise of stock options. Such shares are stated at cost and held as treasury shares to be used for general corporate purposes.
**	In December 2002, the Board of Directors authorized the Company to make discretionary repurchases up to 4,000,000 shares of its common stock. There is no expiration date under this authority. There were 2,922,576 and 283,200 shares repurchased under this program in 2003 and 2002, respectively.

AZTAR CORPORATION AND SUBSIDIARIES

amounts in connection with personal injuries. Also named as defendants are Keating Building Corporation; Fabi Construction, Inc.; Pro Management Group, Inc.; Liberty Mutual Insurance Co.; ABC Insurance Companies; Jack Doe and Jill Doe; DEF Engineering Firms, Inc.; Jason Doe and Josephine Doe; Mitchell Bar Placement, Inc.; GHI Architects, Inc.; Jackson Doe and Jenna Doe; and Mid-State Filigree Systems, Inc. The Company intends to contest the actions vigorously with contractual recourse against the general contractor and sub-contractors. No discovery has taken place. On July 22, 2004, Judge William Todd, III consolidated these two cases. Item 26. ~~Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities~~ Exhibits

(a)	Changes in Securities On June 2, 2004, the Company redeemed $192,320,000 principal amount of its 8 7/8% Notes. Holders tendering their 8 7/8% Notes consented to proposed amendments to the indenture governing the 8 7/8% Notes. On June 2, 2004, the indenture was amended to eliminate substantially all of the restrictive covenants and certain events of default contained in the indenture. On July 7, 2004, the Company redeemed the remaining 8 7/8% Notes at a principal amount of $42,680,000.
*	10.1	Amendment to Severance Agreement dated February 16, 2006, by and between Aztar Corporation and Nelson W. Armstrong, Jr.
(e)	Purchases of Equity Securities
*	10.2	Form of Stock Option Grant Letter for Aztar Corporation 2004 Employee Stock Option and Incentive Plan, revised February 21, 2006.
	The following table provides information on a monthly basis for the second quarter ended July 1, 2004 with respect to the Company's purchases of equity securities.
	31.1	Certification of CEO.
	31.2	Certification of CFO.
	32	Certification of CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Period	(a) Total Number of Shares Purchased	(b)Average Price Paid per Share	(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
Month #1 April 2, 2004 to April 29, 2004	--	--	--	794,224*
Month #2 April 30, 2004 to June 3, 2004	--	--	--	794,224*
Month #3 June 4, 2004 to July 1, 2004	--	--	--	794,224*

* Indicates a management contract or compensatory plan or arrangement

* In December 2002, the Board of Directors authorized the Company to make discretionary repurchases up to 4,000,000 shares of its common stock. There is no expiration date under this authority. There were 2,922,576 and 283,200 shares repurchased under this program in 2003 and 2002, respectively.

AZTAR CORPORATION AND SUBSIDIARIES

Item 4. Submission of Matters to a Vote of Security Holders

At the Company's annual meeting of shareholders held on May 13, 2004, two items were voted on as follows:

The persons whose names are set forth below were elected as directors to serve until the 2007 annual meeting of shareholders or until their successors are elected and qualified. The relevant voting information is as follows:

Votes Cast For Withheld

Nominee

Frank J. Brady Gordon M. Burns

25,990,975 28,543,398

6,217,892 3,665,469

The 2004 Employee Stock Option and Incentive Plan was adopted. The relevant voting information is as follows:

For Against Abstain Broker Non-Votes

Votes Cast 15,295,501 12,309,592 42,151 4,561,623

Item 6. Exhibits and Reports on Form 8-K

(a)	Exhibits
	4	Indenture, dated as of June 2, 2004, between Aztar Corporation and U.S. Bank National Association, as Trustee, relating to the 7 7/8% Senior Subordinated Notes due 2014 of Aztar Corporation.
	10	Amendment No. 10, dated May 25, 2004, to Amended and Restated Reducing Revolving Loan Agreement, dated as of May 28, 1998, among Aztar Corporation, the lenders party thereto and Bank of America, N.A., as administrative agent.
	31.1	Certification of CEO.
	31.2	Certification of CFO.
	32	Certification of CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
(b)	Reports on Form 8-K
		On May 25, 2004, the Company filed a report on Form 8-K dated May 24, 2004 under Items 5. and 7. to add segment information to the Consolidated Financial Statements for the fiscal year ended January 1, 2004 to conform with the presentation for the quarter ended April 1, 2004.
		On June 3, 2004, the Company filed a report on Form 8-K dated June 2, 2004 under Items 5. and 7. to furnish a press release as Exhibit 99 announcing the completion of its private placement of $300 million of 7 7/8% Senior Subordinated Notes due 2014 and expiration of its tender offer for its 8 7/8% Senior Subordinated Notes due 2007.
		On July 21, 2004, the Company filed a report on Form 8-K dated July 21, 2004 under Items 7. and 12. to furnish a press release as Exhibit 99 announcing the Company's financial results for its second quarter ended July 1, 2004.

AZTAR CORPORATION AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: ~~August~~May 42, ~~2004~~2006 AZTAR CORPORATION (Registrant) ~~ROBERT~~NEIL MA. ~~HADDOCK~~CIARFALIA ~~Robert~~Neil MA. ~~Haddock~~Ciarfalia ~~President and~~ Chief Financial Officer, Vice President and Treasurer

3433

AZTAR CORPORATION AND SUBSIDIARIES

EXHIBIT INDEX

	Exhibit Number	Description
	4	Indenture, dated as of June 2, 2004, between Aztar Corporation and U.S. Bank National Association, as Trustee, relating to the 7 7/8% Senior Subordinated Notes due 2014 of Aztar Corporation.
*	10.1	Amendment to Severance Agreement dated February 16, 2006, by and between Aztar Corporation and Nelson W. Armstrong, Jr.
	10	Amendment No. 10, dated May 25, 2004, to Amended and Restated Reducing Revolving Loan Agreement, dated as of May 28, 1998, among Aztar Corporation, the lenders party thereto and Bank of America, N.A., as administrative agent.
*	10.2	Form of Stock Option Grant Letter for Aztar Corporation 2004 Employee Stock Option and Incentive Plan, revised February 21, 2006.
	31.1	Certification of CEO.
	31.2	Certification of CFO.
	32	Certification of CEO and CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

35 * Indicates a management contract or compensatory plan or arrangement

First Quarter

Revenues
  Tropicana Atlantic City
  Tropicana Las Vegas
  Ramada Express Laughlin
  Casino Aztar Evansville
  Casino Aztar Caruthersville
    Total consolidated

EBITDA (a)
  Tropicana Atlantic City
  Tropicana Las Vegas
  Ramada Express Laughlin
  Casino Aztar Evansville
  Casino Aztar Caruthersville
    Property EBITDA
Corporate
Depreciation and amortization
Operating income
Other income
Interest income
Interest expense
Income taxes
Net income

2006

$116,740
40,967
27,412
36,151
   7,365
$228,635
========

$ 31,195
9,595
8,705
11,093
   2,014
62,602
(32,350)
(19,017)
11,235
2,640
394
(14,136)
   3,081
$  3,214
========

2005

$111,739
42,246
26,483
35,447
   7,407
$223,322
========

$ 21,058
10,977
8,785
11,005
   1,887
  53,712
(7,925)
(16,346)
29,441
1,573
242
(13,862)
  (7,483)
$  9,911
========

EBITDA is net income before income taxes, interest expense, interest income, other income, Tropicana Las Vegas capitalized development costs write-off, and depreciation and amortization. EBITDA should not be construed as a substitute for either operating income or net income as they are determined in accordance with generally accepted accounting principles (GAAP). The Company uses EBITDA as a measure to compare operating results among its properties and between accounting periods. The Company manages cash and finances its operations at the corporate level. The Company manages the allocation of capital among properties at the corporate level. The Company also files a consolidated income tax return. The Company accordingly believes EBITDA is useful as a measure of operating results at the property level because it reflects the results of operating decisions at that level separated from the effects of tax and financing decisions that are managed at the corporate level. The Company also uses EBITDA as the primary operating performance measure in its bonus programs for executive officers. The Company also believes that EBITDA is a commonly used measure of operating performance in the gaming industry and is an important basis for the valuation of gaming companies. The Company's calculation of EBITDA may not be comparable to similarly titled measures reported by other companies and, therefore, any such differences must be considered when comparing performance among different companies. While the Company believes EBITDA provides a useful perspective for some purposes, EBITDA has material limitations as an analytical tool. For example, among other things, although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA does not reflect the requirements for such replacements. Tropicana

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