SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K



(Mark One)

|[X]                                                                                                                                                                                                                                                                                                                                                                 | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934    
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------
|For the fiscal year ended January 3, 2002                                                                                                                                                                                                                                                                                                                          
|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)                                                                                                                                                                                                                                                                                     |                                                                                         
|2390 East Camelback Road, Suite 400, Phoenix, Arizona                85016       (Address of principal executive offices)                    (Zip code)                                                                                                                                                                                                            
|Registrant's telephone number, including area code                                                                                                                                                                                                                                                                                                                  | (602) 381-4100                                                                          
|Securities registered pursuant to Section 12(b) of the Act:                                                                                                                                                                                                                                                                                                        
|Title of each class
Common stock, $.01 par value   
Preferred share purchase rights                                                                                                                                                                                                                                                                                 | Name of each exchangeon which registered
New York
New York                              
|Securities registered pursuant to Section 12(g) of the Act:                                                                                                                                                                                                                                                                                                        
|None                                                                                                                                                                                                                                                                                                                                                               
|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





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Facing Page (Continued)

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]
     The aggregate market value of the voting common equity held by non-affiliates of the registrant was $838,211,244 at March 1, 2002 and is based on a closing price of $22.77 and 36,812,088 common shares outstanding.
     At March 1, 2002, the registrant had outstanding 37,007,970 shares of its common stock, $.01 par value.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information contained in the registrant's 2002 definitive Proxy Statement, to be filed with the Commission, is incorporated by reference into this Form 10-K.  The following cross-referenced index details the location of such information.  All other sections of the 2002 Proxy Statement are not required in Form 10-K and should not be considered a part thereof.

|Part and Item of the Form 10-K |                                                                | 2002 Proxy Statement
|------------------------------ | -------------------------------------------------------------- | --------------------
|PART III                       |                                                                |                     
|ITEM 10.                       | Directors and Executive Officers of the Registrant             |                     
|ITEM 11.                       | Executive Compensation                                         |                     
|ITEM 12.                       | Security Ownership of Certain Beneficial Owners and Management |                     





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PART I

ITEM 1.  BUSINESS

Aztar Corporation was incorporated in Delaware in June 1989 to operate the gaming business of Ramada Inc. after the restructuring of Ramada Inc.  The terms "Aztar", "we", "our", and "us", as used in this Form 10-K, refer to Aztar Corporation and its subsidiaries as a combined entity, except where it is clear that these terms mean only Aztar Corporation.
The restructuring of Ramada Inc. involved the disposition of Ramada Inc.'s hotel and restaurant businesses with Ramada Inc.'s shareholders retaining their interest in the gaming business.  As part of the restructuring of Ramada Inc., the gaming business and certain other assets and liabilities of Ramada Inc. were transferred to Aztar, and a wholly-owned subsidiary of New World Hotels (U.S.A.), Inc. was merged with Ramada Inc.  In this merger, each share of Ramada Inc. common stock was converted into the right to receive $1.00 and one share of Aztar common stock.
Aztar operates in major domestic gaming markets with casino hotel facilities in Atlantic City, New Jersey, and Las Vegas and Laughlin, Nevada.  Aztar operates riverboat casinos in Caruthersville, Missouri, and Evansville, Indiana.  Aztar is an experienced developer and operator of casinos that provide an excellent gaming environment.  Each of our casinos is designed and operated to serve the unique demographics of its particular market.
TROPICANA ATLANTIC CITY

Tropicana Casino and Resort encompasses approximately 14 acres of land, including an adjoining development site, with 220 yards of ocean frontage along the boardwalk in Atlantic City.  Tropicana Atlantic City features 1,624 hotel rooms and a 137,000-square-foot casino with 4,120 slot machines, 172 table games, a baccarat lounge and a poker room.  This facility has parking facilities to accommodate 3,100 vehicles.  Tropicana Atlantic City also features:



|- | a 2,003-seat theatrical showroom which regularly presents headliner entertainment;                                        
|- | --------------------------------------------------------------------------------------------------------------------------
|- | approximately 47,000 square feet of meeting, convention and banquet space;                                                
|- | four gourmet restaurants and several medium-priced restaurants; and                                                       
|- | other amenities including indoor and outdoor swimming pools, tennis courts, a health and fitness club and a jogging track.

As 2001 began, we publicly announced plans to expand our Atlantic City Tropicana.  We are pursuing a major redevelopment on a 3.5-acre site we have assembled.  During 2001, we spent $12.1 million on this project for architectural design and development work and we capitalized $1.3 million of interest.  We also spent $7.9 million to add slot machines and expand the casino into space that was previously used for other purposes.
The Atlantic City gaming market has historically demonstrated continued growth despite the emergence of new gaming venues across the country.  The 12 hotel casinos in Atlantic City generated approximately $4.3 billion in gaming revenues in 2001 and 2000.  There are several infrastructure developments that have recently

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been completed or which are underway that may attract additional people to Atlantic City.  These developments include new housing and retail development, an upgrade and expansion of the Atlantic City International Airport and a convention center with the largest exhibition space between New York and Washington, D.C.
The primary target market for Tropicana Atlantic City is the area consisting of New Jersey, New York and Pennsylvania.  Based on census data, there are approximately 27 million persons within a 120-mile radius of Atlantic City and 62 million persons within a 300-mile radius.  Several major casino operators have announced plans to develop projects or expand existing facilities in the marina or the boardwalk areas.  The marina projects are expected to open over the course of a number of years.  When these projects open they will create increased competition in Atlantic City.  However, our view is that these new projects, if well-designed and executed, may also attract new patrons to the Atlantic City gaming market.  If so, this will mitigate concern about the ultimate impact of those projects on our existing Atlantic City operations.
TROPICANA LAS VEGAS

Tropicana Resort and Casino is located on approximately 34 acres on the "Strip" in Las Vegas, Nevada.  The Tropicana has 1,875 hotel rooms and suites and a 62,000-square-foot casino containing 1,383 slot machines and 31 table games.  The facility also has parking to accommodate approximately 2,300 vehicles.  Tropicana Las Vegas also features:



|- | one of the world's largest indoor/outdoor swimming pools;            
|- | ---------------------------------------------------------------------
|- | a five-acre water park and tropical garden;                          
|- | approximately 100,000 square feet of convention and exhibit space;   
|- | seven restaurants; and                                               
|- | the Folies Bergere, the longest-running production show in Las Vegas.

Together with the MGM Grand, Excalibur, Luxor, Monte Carlo and New York-New York mega-resorts, the Tropicana Las Vegas is located at the intersection known as the "New Four Corners" at Las Vegas Boulevard and Tropicana Avenue.  The Las Vegas gaming market consisted of approximately 127,000 hotel rooms at the end of 2001.  Gaming revenue in Las Vegas was $6.0 billion in 2001, a 1% decrease from 2000.  During 1999, 3 new mega-resorts, known as Mandalay Bay, Venetian and Paris, opened on the Strip.  Another major casino hotel, known as Aladdin, with approximately 2,600 rooms, opened in mid-August 2000.
Aztar leases the Tropicana Las Vegas, through a wholly-owned subsidiary, from an unconsolidated partnership in which we have a noncontrolling 50% interest.  We have an option to purchase the 50% partnership interest that we do not own.  The option agreement gives us an unconditional right to purchase the partnership interest for $120 million.  On January 29, 2002, we exercised this option and on February 28, 2002, we completed the purchase.  We are conducting feasibility studies to master-plan a potential development of the Tropicana Las Vegas site.  The amount and timing of any future expenditure, and the extent of any impact on existing operations, will depend on the nature and timing of the development we ultimately undertake, if any.

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RAMADA EXPRESS

Ramada Express Hotel and Casino is located on approximately 31 acres in Laughlin, Nevada.  Laughlin is situated on the Colorado River at Nevada's southern tip.  The Ramada Express features a Victorian-era railroad theme, which includes a train that carries guests between the parking areas and the casino hotel.  The property has 1,501 hotel rooms and a 52,000-square-foot casino containing 1,579 slot machines and 28 table games.  The facility also has parking to accommodate 2,900 vehicles.  Ramada Express also features:



|- | five restaurants;               
|- | --------------------------------
|- | a lounge; and                   
|- | special events and retail space.

The Laughlin gaming market consists of approximately 11,000 rooms and its gaming revenue for 2001 was $0.5 billion, a 3% decrease from 2000.
CASINO AZTAR EVANSVILLE

Casino Aztar Evansville was the first gaming facility to open in Indiana. It operates on the Ohio River in Evansville.  The facility encompasses approximately 15 acres and contains approximately 38,360 square feet of casino space with 1,345 slot machines and 54 table games.  Casino Aztar Evansville has a 250-room hotel and has parking for 1,700 vehicles.  The casino riverboat is certified to carry 2,700 passengers and a crew of 300.  The 44,000-square-foot pavilion which accompanies the riverboat contains passenger ticketing and pre-boarding facilities, including:



|- | three restaurants;      
|- | ------------------------
|- | a sidewalk café;        
|- | an entertainment lounge;
|- | a gift shop; and        
|- | a full-service Starbucks

Casino Aztar Evansville is located in the heart of metropolitan Evansville and has developed strong brand recognition in Southwest Indiana.  The closest casino property is approximately 100 miles and over a two-hour drive away.  Gaming revenue in the Southern Indiana market (five riverboats) grew by 13% in 2001 to $0.9 billion.  Although we believe that Casino Aztar Evansville has a strong base of loyal customers, the property operates in a more competitive environment due to the opening in November 1998 of a riverboat near Louisville, Kentucky and the opening in late October 2000 of a riverboat in our outer market between Louisville, Kentucky and Cincinnati, Ohio.  There is also increased competition as a result of dockside gaming being allowed in Illinois.  The Indiana General Assembly is considering legislation that would allow flexible boarding.  However, also being considered is a change in the tax on casino revenue from a flat 20 percent to a progressive tax schedule.  In addition, the admission tax would be raised to $4.00 per person from $3.00 per person.

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CASINO AZTAR CARUTHERSVILLE

Casino Aztar Caruthersville operates on a 37-acre site on the Mississippi River in Caruthersville, Missouri.  The property is located in the "boot heel" of Missouri in close proximity to I-55, the major north-south interstate running along the Mississippi River.  It serves the southeast Missouri market including the neighboring states of Illinois, Kentucky, Tennessee and Arkansas.  The casino riverboat has a capacity of 800 passengers plus crew and contains approximately 20,000 square feet of casino space with 755 slot machines and 14 table games.  The facility has parking for 1,000 vehicles including recreational vehicles.  The property's passenger pavilion provides ticketing and pre-boarding facilities, including:



|- | a restaurant;                   
|- | --------------------------------
|- | a sports lounge; and            
|- | a snack bar and other amenities.

In addition, a climate-controlled pavilion and an outdoor arena are used for exhibitions, entertainment, rodeo competitions and other events. We have some unused land at this site and we are encouraging third-party developers to develop facilities on this land that would complement our operations.
COMPETITION

We face intense competition in each of the markets in which our land-based gaming facilities are located.  All of our casinos primarily compete with other casinos in their geographic markets and, to a lesser extent, with casinos in other locations, including on Native American lands and on cruise ships, and with other forms of legalized gaming in the United States, including state-sponsored lotteries, racetracks, off-track wagering and card parlors.  We expect this competition to intensify as new gaming operators enter our markets and existing competitors expand their operations.  Some of our competitors have significantly greater financial resources than we and as a result we may not be able to successfully compete against them in the future.  Several states have considered legalizing casino gaming and others may in the future.  In early March 2000, voters in California approved an initiative which expanded Native American gaming within California.  Legalization of large-scale, unlimited casino gaming in or near any major metropolitan area or increased gaming in other areas could have an adverse economic impact on the business of any or all of our gaming facilities by diverting our customers to competitors in those areas.  In particular, the expansion of casino gaming in or near any geographic area from which we attract or expect to attract a significant number of our customers could have a material adverse effect on us.

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Tropicana Atlantic City.  Tropicana Atlantic City competes with 11 other casinos in Atlantic City.  It also competes with two large Native American casinos in Connecticut.  No new casinos have opened in Atlantic City since April 1990, but many of the existing casinos have increased their gaming capacities and a few casino hotels have had major expansions.  Other companies have announced a desire to open new casino hotels or expand existing properties in Atlantic City in the future.  Boyd Gaming Corporation and MGM Mirage have entered into a joint venture to construct a major casino resort called The Borgata to be located in Atlantic City's Marina District.  The Borgata is expected to be completed in the summer of 2003 and will include 120,000 square feet of gaming space and 2,010 guest rooms.  The Atlantic City market also faces additional future competition from the growing Native American casinos in Connecticut and the possibility of competition from the potential legalization of casino gaming in Delaware, Maryland, New York and Pennsylvania.  In addition, slot machines have been added to race tracks in Delaware and West Virginia.
Tropicana Las Vegas.  Tropicana Las Vegas operates in the intensely competitive Las Vegas market.  Several major new casino hotels have opened on the Las Vegas Strip during the last several years, including Mandalay Bay, Venetian and Paris.  Another major casino hotel, known as Aladdin, opened in mid-August 2000. Announcements have been made for other new developments.  In addition, several casino hotels have opened or have been expanded in other parts of Las Vegas or near Las Vegas.  We cannot assure you that we will be able to compete successfully with this additional capacity in this active market of mega-casinos.
Ramada Express.  Ramada Express competes with several other casinos in Laughlin.  Ramada Express also competes with casinos outside of Laughlin, including the Mojave tribe's casino hotel located approximately 8 miles south of Laughlin.  The Laughlin market is also affected by the Native American casinos in Arizona and California and additional capacity in Las Vegas and the surrounding area.
Casino Aztar Evansville.  Casino Aztar Evansville competes primarily with an Indiana riverboat in the Louisville, Kentucky market area that opened in November 1998 and which added a hotel in 2001 and a recently expanded riverboat casino in Metropolis, Illinois.  Casino Aztar Evansville also indirectly competes with the Belterra Casino Resort, a hotel and riverboat casino in Switzerland County, Indiana, which has recently opened a new golf course.  In addition, Casino Aztar Evansville competes with other Indiana riverboat casinos on the Ohio River in the Cincinnati, Ohio market area and to a lesser extent with riverboat casinos in other Indiana locations, none of which are in its primary 50-mile radius market area.  In fiscal year 1999, Casino Aztar Evansville had a 15% decrease in casino revenue compared with fiscal year 1998.  We believe that the decrease was due to the increased competition and severe winter weather in Evansville's feeder markets in January and March 1999.  Casino Aztar Evansville may also face additional future competition from the potential legalization of casino gaming in Kentucky.
Casino Aztar Caruthersville.  Casino Aztar Caruthersville competes primarily with other riverboat casinos in nearby states, including a recently expanded riverboat in Metropolis, Illinois and riverboat casinos in Mississippi that attract residents of Casino Aztar Caruthersville's secondary Memphis, Tennessee market.  Casino Aztar Caruthersville also competes to a lesser extent with riverboat casinos in other cities in Missouri, none of which are in its primary 60-mile radius market area.  Casino Aztar Caruthersville may also face additional future competition from the potential legalization of casino gaming in Arkansas.

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General.  Competition involves not only the quality of casino, room, restaurant, entertainment and convention facilities, but also room, food and beverage prices.  The level of gaming activity also varies significantly from time to time depending on factors including:



|- | general economic conditions;                                                    
|- | --------------------------------------------------------------------------------
|- | offering of special events and promotions;                                      
|- | hotel occupancies;                                                              
|- | the extent and quality of complimentary services to attract high-stakes players;
|- | in Atlantic City, casino customers arriving under bus programs;                 
|- | personal attention offered to guests and casino customers;                      
|- | advertising;                                                                    
|- | entertainment;                                                                  
|- | slot machine pay-out rates; and                                                 
|- | credit policies with respect to high-stakes players.                            

As a result, our operating results can be adversely affected by significant cash outlays for advertising and promotion and complimentary services to patrons, the amount and timing of which are partially dictated by the policies of competitors.  If our operating revenues are insufficient to allow management the flexibility to match the promotions of competitors, the number of our casino patrons may decline, which may have an adverse effect on our financial performance.
SEASONALITY

We experience significant fluctuations in our operating results due to seasonality.  Tropicana Atlantic City experiences seasonal fluctuation in casino play that is higher during the months of May through October.  As a result, Aztar's revenues during the first and fourth quarters have generally been lower than for the second and third quarters and from time to time Aztar has experienced losses in the first and fourth quarters.  Because Atlantic City Tropicana's operating results especially depend upon operations in the summer months, any event that adversely affects the operating results of the Atlantic City Tropicana during that period could have a material adverse effect on our operations and financial condition.  Given Atlantic City's location, it is also subject to occasional adverse weather conditions including storms and hurricanes that would impede access to Atlantic City and adversely impact our operations.
The gaming markets in Las Vegas and Laughlin experience a slight decrease in gaming activity in the hot summer months and during the holiday period between Thanksgiving and Christmas.

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PLAYER CREDIT

We conduct our gaming activities on a credit as well as a cash basis, except in Missouri, which prohibits gaming on a credit basis.  Table games players are typically extended more credit than slot players, and high-stakes players are typically extended more credit than patrons who tend to wager lower amounts.  Our credit policy varies from facility to facility based upon the various types of customers at each facility and regulatory requirements in each jurisdiction.  In general, credit is extended to new credit customers after verification of certain banking information and evaluation of the customer's credit history from other casinos, the customer's income and net worth, and traditional consumer credit reports.  Additional credit may be extended to existing credit customers after evaluating the above factors plus the player's prior gaming and credit history with our casino.  Gaming debts are legally enforceable under the current laws of Indiana, New Jersey and Nevada; however, it is not clear that all other states or that foreign countries will honor these policies.  At January 3, 2002, receivables due from non-United States customers were 18% of our accounts receivable before the allowance for doubtful accounts.  We have made provisions for estimated uncollectible gaming receivables in order to reduce gaming receivables to amounts deemed to be collectible.  However, our inability to collect gaming receivables could have a material adverse effect on our results of operations.
SECURITY AND SURVEILLANCE

Gaming operations at our casinos are also subject to risk of substantial loss as a result of employee or patron dishonesty, credit fraud or illegal slot machine manipulation.  We have in place stringent control procedures to minimize these risks including supervision of employees, monitoring by electronic surveillance equipment and use of two-way mirrors.  However, we cannot assure you that losses will not occur.  In New Jersey, our activities are observed and monitored on an ongoing basis by agents of both the New Jersey Casino Control Commission and the New Jersey Division of Gaming Enforcement, each of which maintains a staff on the premises of Tropicana Atlantic City.  Similarly, in Nevada our gaming subsidiaries must comply with certain regulatory requirements concerning casino and game security and surveillance. The gaming operations of Tropicana Las Vegas and Ramada Express are subject to routine audit and supervision by agents of the Nevada State Gaming Control Board.  In Missouri and Indiana, our casino riverboat operations are subject to the control procedures of the Missouri Gaming Commission and the Indiana Gaming Commission, respectively.  The Missouri Gaming Commission maintains a staff at Casino Aztar Caruthersville and the Indiana Gaming Commission maintains a staff at Casino Aztar Evansville.



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REGULATION AND LICENSING

General

Regulatory aspects of the gaming business are pervasive in nature and the following description should not be construed as a complete summary of all the regulatory requirements faced by Aztar.  Gaming authorizations, once obtained, can be suspended or revoked for a variety of reasons.  If Aztar is ever precluded from operating one of its gaming facilities, it would, to the extent permitted by law, seek to recover its investment by sale of the property affected, but Aztar cannot guarantee that it would recover its full investment.
From time to time, legislative and regulatory changes are proposed, and court decisions rendered, that could be adverse to Aztar.  On June 18, 1999, the National Gambling Impact Study Commission released a report that could result in federal legislation regulating the gaming industry.  In addition, from time to time, investigations are conducted relating to the gaming industry.  Tropicana Atlantic City, Casino Aztar Caruthersville and Casino Aztar Evansville are required to report particular cash transactions to the U.S. Department of the Treasury pursuant to the Bank Secrecy Act.  Violation of the reporting requirements of the Bank Secrecy Act could result in civil as well as criminal penalties, including fines, imprisonment or both, which in turn could result in the revocation, suspension, imposition of conditions upon or failure to renew the casino license of the affected facility.  The States of Nevada and Indiana have adopted regulations similar to the Bank Secrecy Act that require the Nevada and Indiana facilities to document and report specific currency transactions to the Nevada State Gaming Control Board and the Indiana Gaming Commission, respectively.  Violation of these regulations could result in action by Nevada or Indiana authorities to fine or revoke, suspend, impose conditions upon or fail to renew the Nevada or Indiana facilities' licenses and Aztar's licensing approval.  Except to the extent of a violation as noted above, these reporting requirements are not expected to have any adverse effects on Aztar's casino operations.
  Regulation and Licensing - Nevada

The ownership and operation of casino gaming facilities in Nevada are subject to (a) the Nevada Gaming Control Act and the regulations promulgated under that Act, referred to collectively as the "Nevada Act" and (b) various local regulations.  The gaming operations of the Tropicana Las Vegas and Ramada Express are subject to the licensing and regulatory control of the Nevada Gaming Commission, the Nevada State Gaming Control Board and the Clark County Liquor and Gaming Licensing Board.  Each of the Nevada Commission, Nevada Board and Clark County Board are collectively referred to as the "Nevada Gaming Authorities".

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The laws, regulations and supervisory procedures of the Nevada Gaming Authorities are based upon declarations of public policy which are concerned with, among other things:



|- | the prevention of unsavory or unsuitable persons from having a direct or indirect involvement with gaming at any time or in any capacity;                                                                                                                                                                                     
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|- | the establishment and maintenance of responsible accounting practices and procedures;                                                                                                                                                                                                                                         
|- | the maintenance of effective controls over the financial practices of licensees, including the establishment of minimum procedures for internal fiscal affairs and the safeguarding of assets and revenues, providing reliable record keeping and requiring the filing of periodic reports with the Nevada Gaming Authorities;
|- | the prevention of cheating and fraudulent practices; and                                                                                                                                                                                                                                                                      
|- | the provision of a source of state and local revenues through taxation and licensing fees.                                                                                                                                                                                                                                    

Change in these or other laws, regulations and procedures that apply to Aztar could have an adverse effect on Aztar.
Hotel Ramada of Nevada is Aztar's wholly-owned subsidiary which operates the casino at Tropicana Las Vegas.  Ramada Express, Inc. is Aztar's wholly-owned subsidiary which operates the Ramada Express casino in Laughlin.  Hotel Ramada of Nevada and Ramada Express are both required to be licensed by the Nevada Gaming Authorities.  The gaming licenses require the periodic payment of fees and taxes and are not transferable.  Aztar is registered by the Nevada Commission as a publicly traded corporation ("Registered Corporation") and is therefore required periodically to submit detailed financial and operating reports to the Nevada Commission and furnish any other information which the Nevada Commission may require.  No person may become a stockholder of, or receive any percentage of profits from, Hotel Ramada of Nevada or Ramada Express without first obtaining licenses and approvals from the Nevada Gaming Authorities.  Aztar, Hotel Ramada of Nevada, and Ramada Express have obtained from the Nevada Gaming Authorities the various registrations, approvals, permits and licenses required in order to engage in gaming activities in Nevada.
The Nevada Gaming Authorities may investigate any individual who has a material relationship to, or material involvement with, Aztar, Hotel Ramada of Nevada or Ramada Express in order to determine whether the individual is suitable or should be licensed as a business associate of a gaming licensee.  Officers, directors and some key employees of Hotel Ramada of Nevada and Ramada Express must file applications with the Nevada Gaming Authorities and may be required to be licensed or found suitable by the Nevada Gaming Authorities. Some officers, directors and key employees of Aztar who are actively and directly involved in gaming activities of Hotel Ramada of Nevada and Ramada Express may be required to be licensed or found suitable by the Nevada Gaming Authorities.  The Nevada Gaming Authorities may deny an application for licensing or a finding of suitability for any cause which they deem reasonable.  A finding of suitability is comparable to licensing, and both require submission of detailed personal and financial information followed by a thorough investigation.  The applicant for licensing or a finding of suitability, or the gaming licensee by whom the applicant is employed or for whom the applicant serves, must pay all the costs of the investigation.  Changes in licensed positions

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must be reported to the Nevada Gaming Authorities and in addition to their authority to deny an application for a finding of suitability or licensure, the Nevada Gaming Authorities have jurisdiction to disapprove a change in a corporate position.
If the Nevada Gaming Authorities were to find an officer, director or key employee unsuitable for licensing or unsuitable to continue having a relationship with Aztar, Hotel Ramada of Nevada or Ramada Express, the companies involved would have to sever all relationships with this person.  In addition, the Nevada Commission may require Aztar, Hotel Ramada of Nevada or Ramada Express to terminate the employment of any person who refuses to file appropriate applications.  Determinations of suitability or of questions pertaining to licensing are not subject to judicial review in Nevada.
Aztar, Hotel Ramada of Nevada and Ramada Express are required to submit detailed financial and operating reports to the Nevada Commission.  Substantially all material loans, leases, sales of securities and similar financing transactions by Hotel Ramada of Nevada and Ramada Express must be reported to, or approved by, the Nevada Commission.
If it were determined that the Nevada Act was violated by Hotel Ramada of Nevada or Ramada Express, the gaming licenses held by Hotel Ramada of Nevada or Ramada Express could be limited, conditioned, suspended or revoked, subject to compliance with particular statutory and regulatory procedures.  In addition, Hotel Ramada of Nevada, Ramada Express, Aztar and the persons involved could be subject to substantial fines for each separate violation of the Nevada Act at the discretion of the Nevada Commission.  Further, a supervisor could be appointed by the Nevada Commission to operate Aztar's Nevada gaming properties and, under some circumstances, earnings generated during the supervisor's appointment (except for the reasonable rental value of Aztar's Nevada gaming properties) could be forfeited to the State of Nevada.  Limitation, conditioning or suspension of any gaming license or the appointment of a supervisor could (and revocation of any gaming license would) materially adversely affect Aztar.
Any beneficial holder of Aztar's voting securities, regardless of the number of shares owned, may be required to file an application, be investigated, and have his suitability as a beneficial holder of Aztar's voting securities determined if the Nevada Commission has reason to believe that this ownership would otherwise be inconsistent with the declared policies of the State of Nevada.  The applicant must pay all costs of investigation incurred by the Nevada Gaming Authorities in conducting this investigation.
The Nevada Act requires any person who acquires more than 5% of any class of Aztar's voting securities to report the acquisition to the Nevada Commission.  The Nevada Act requires that beneficial owners of more than 10% of any class of Aztar's voting securities apply to the Nevada Commission for a finding of suitability within thirty days after the chairman of the Nevada Board mails the written notice requiring this filing.  Under some circumstances, an "institutional investor," as defined in the Nevada Act, which acquires more than 10%, but not more than 15%, of Aztar's voting securities may apply to the Nevada Commission for a waiver of the finding of suitability if this institutional investor holds the voting securities for investment purposes only.  An institutional investor will not be deemed to hold voting securities for investment purposes unless the voting securities were acquired and are held in the ordinary course of business as an institutional investor and not for the purpose of causing, directly or indirectly,

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the election of a majority of the members of the board of directors of Aztar, any change in Aztar's corporate charter, bylaws, management, policies or operations of Aztar, or any of its gaming affiliates, or any other action which the Nevada Commission finds to be inconsistent with holding Aztar's voting securities for investment purposes only.  Activities which are not deemed to be inconsistent with holding voting securities for investment purposes only include:



|- | voting on all matters voted on by stockholders;                                                                                                                                                        
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|- | making financial and other inquiries of management of the type normally made by securities analysts for informational purposes and not to cause a change in its management, policies or operations; and
|- | other activities as the Nevada Commission may determine to be consistent with this investment intent.                                                                                                  

If the beneficial holder of voting securities who must be found suitable is a corporation, partnership or trust, it must submit detailed business and financial information including a list of beneficial owners.  The applicant is required to pay all costs of investigation.
Under the Nevada Act and in certain circumstances, an "institutional investor" as defined in the Nevada Act, which intends to acquire not more than 15% of any class of nonvoting securities of a privately-held corporation, limited partnership or limited liability company that is also a registered holding or intermediary company or the holder of a gaming license, may apply to the Nevada Commission for a waiver of the usual prior licensing or finding of suitability requirement if such institutional investor holds such nonvoting securities for investment purposes only.  An institutional investor shall not be deemed to hold nonvoting securities for investment purposes unless the nonvoting securities were acquired and are held in the ordinary course of business as an institutional investor, do not give the institutional investor management authority, and do not, directly or indirectly, allow the institutional investor to vote for the election or appointment of members of the board of directors, a general partner or manager, cause any change in the articles of organization, operating agreement, other organic document, management, policies or operations, or cause any other action that the Nevada Commission finds to be inconsistent with holding nonvoting securities for investment purposes only.  Activities that are not deemed to be inconsistent with holding nonvoting securities for investment purposes only include: (i) nominating any candidate for election or appointment to the entity's board of directors or equivalent in connection with a debt restructuring; (ii) making financial and other inquiries of management of the type normally made by securities analysts for informational purposes and not to cause a change in the entity's management, policies or operations; and (iii) such other activities as the Nevada Commission may determine to be consistent with such investment intent.  If the beneficial holder of nonvoting securities who must be found suitable is a corporation, partnership or trust, it must submit detailed business and financial information including a list of beneficial owners.  The applicant is required to pay all costs of investigation.
Any person who fails or refuses to apply for a finding of suitability or a license within thirty days after being ordered to do so by the Nevada Commission or the chairman of the Nevada Board, may be found unsuitable.  The same restrictions apply to a record owner if the record owner, after request, fails to identify the

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beneficial owner.  Any stockholder found unsuitable and who holds, directly or indirectly, any beneficial ownership of the common stock of a Registered Corporation beyond the period of time as may be prescribed by the Nevada Commission may be guilty of a criminal offense.  Aztar is subject to disciplinary action if, after it receives notice that a person is unsuitable to be a stockholder or to have any other relationship with Aztar, Hotel Ramada of Nevada or Ramada Express, Aztar:



|- | pays that person any dividend or interest upon its voting securities;                                                                 
|- | --------------------------------------------------------------------------------------------------------------------------------------
|- | allows that person to exercise, directly or indirectly, any voting right conferred through securities held by that person;            
|- | pays remuneration in any form to that person for services rendered or otherwise; or                                                   
|- | fails to pursue all lawful efforts to require the unsuitable person to relinquish his voting securities for cash at fair market value.

Additionally, the Clark County Board has taken the position that it has the authority to approve all persons owning or controlling the stock of any corporation controlling a gaming license.
The Nevada Commission may, in its discretion, require the holder of any debt security of a Registered Corporation, including Aztar, to file applications, be investigated and be found suitable to own the debt security of a Registered Corporation.  If the Nevada Commission determines that a person is unsuitable to own the debt security, then pursuant to the Nevada Act, the Registered Corporation can be sanctioned, including the loss of its approvals, if without the prior approval of the Nevada Commission, it:



|- | pays to the unsuitable person any dividend, interest, or any distribution whatsoever;                                                 
|- | --------------------------------------------------------------------------------------------------------------------------------------
|- | recognizes any voting right by such unsuitable person in connection with the securities;                                              
|- | pays the unsuitable person remuneration in any form; or                                                                               
|- | makes any payment to the unsuitable person by way of principal, redemption, conversion, exchange, liquidation, or similar transaction.

Aztar is required to maintain a current stock ledger in Nevada which may be examined by the Nevada Gaming Authorities at any time.  If any securities are held in trust by an agent or by a nominee, the record holder may be required to disclose the identity of the beneficial owner to the Nevada Gaming Authorities.  A failure to make such disclosure may be grounds for finding the record holder unsuitable.  Aztar is also required to render maximum assistance in determining the identity of the beneficial owner.  The Nevada Commission has the power to require Aztar's stock certificates to bear a legend indicating that the securities are subject to the Nevada Act.  However, to date, the Nevada Commission has not imposed this requirement on Aztar.

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Aztar may not make a public offering of any securities without the prior approval of the Nevada Commission if the securities or the proceeds therefrom are intended to be used to construct, acquire or finance gaming facilities in Nevada, or to retire or extend obligations incurred for these purposes.  This approval, if given, does not constitute a finding, recommendation or approval by the Nevada Commission or the Nevada Board as to the accuracy or adequacy of the prospectus or the investment merits of the securities offered.  Any representation to the contrary is unlawful.
On May 17, 2001, the Nevada Commission granted Aztar prior approval to make public offerings for a period of two years subject to some conditions (the "Shelf Approval").  However, the Shelf Approval may be rescinded for good cause without prior notice upon the issuance of an interlocutory stop order by the chairman of the Nevada Board.  The Shelf Approval does not constitute a finding, recommendation or approval by the Nevada Commission or the Nevada Board as to the accuracy or adequacy of the prospectus or the investment merits of the securities offered.  Any representation to the contrary is unlawful.
Changes in control of Aztar through merger, consolidation, stock or asset acquisitions, management or consulting agreements, or any act or conduct by a person whereby he obtains control, may not occur without the prior approval of the Nevada Commission.  Entities seeking to acquire control of a Registered Corporation must satisfy the Nevada Board and Nevada Commission in a variety of stringent standards prior to assuming control of the Registered Corporation.  The Nevada Commission may also require controlling stockholders, officers, directors and other persons having a material relationship or involvement with the entity proposing to acquire control, to be investigated and licensed as part of the approval process relating to the transaction.
The Nevada legislature has declared that some corporate acquisitions opposed by management, repurchases of voting securities and corporate defense tactics affecting Nevada gaming licensees and Registered Corporations that are affiliated with those operations, may be injurious to stable and productive corporate gaming. The Nevada Commission has established a regulatory scheme to ameliorate the potentially adverse effects of these business practices upon Nevada's gaming industry and to further Nevada's policy to:



|- | assure the financial stability of corporate gaming operators and their affiliates;
|- | ----------------------------------------------------------------------------------
|- | preserve the beneficial aspects of conducting business in the corporate form; and 
|- | promote a neutral environment for the orderly governance of corporate affairs.    

Approvals are, in some circumstances, required from the Nevada Commission before Aztar can make exceptional repurchases of voting securities above the current market price thereof and before a corporate acquisition opposed by management can be consummated.  The Nevada Act also requires prior approval of a plan of recapitalization proposed by Aztar's board of directors in response to a tender offer made directly to the Registered Corporation's stockholders for the purposes of acquiring control of the Registered Corporation.

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License fees and taxes, computed in various ways depending on the type of gaming or activity involved, are payable to the State of Nevada and to the counties and cities in which the Nevada licensee's respective operations are conducted.  Depending upon the particular fee or tax involved, these fees and taxes are payable either monthly, quarterly or annually and are based upon:



|- | a percentage of the gross revenues received;
|- | --------------------------------------------
|- | the number of gaming devices operated; or   
|- | the number of table games operated.         

A casino entertainment tax is also paid by Hotel Ramada of Nevada and Ramada Express where entertainment is furnished in connection with the serving or selling of food, refreshments or merchandise in a cabaret, nightclub, cocktail lounge or casino showroom.
Any person who is licensed, required to be licensed, registered, required to be registered or is under common control with these persons (a "Licensee", or collectively, "Licensees"), and who proposes to become involved in a gaming venture outside of Nevada is required to deposit with the Nevada Board, and thereafter maintain, a revolving fund in the amount of $10,000 to pay the expenses of investigation of the Nevada Board of their participation in this foreign gaming.  The revolving fund is subject to increase or decrease in the discretion of the Nevada Commission.  Thereafter, Licensees are required to comply with specific reporting requirements imposed by the Nevada Act.  A Licensee is also subject to disciplinary action by the Nevada Commission if it knowingly violates any laws of the foreign jurisdiction pertaining to the foreign gaming operation, fails to conduct the foreign gaming operation in accordance with the standards of honesty and integrity required of Nevada gaming operations, engages in activities that are harmful to the State of Nevada or its ability to collect gaming taxes and fees, or employs a person in the foreign operation who has been denied a license or finding of suitability in Nevada on the ground of personal unsuitability.
The sale of alcoholic beverages by Hotel Ramada of Nevada and Ramada Express is subject to licensing, control and regulation by the Clark County Board.  All licenses are revocable and are not transferable.  The Clark County Board has full power to limit, condition, suspend or revoke any license, and any disciplinary action could (and revocation would) have a material adverse effect upon the operations of Aztar, Hotel Ramada of Nevada or Ramada Express.
  Regulation and Licensing - New Jersey

The ownership and operation of casino hotel facilities and gaming activities in Atlantic City, New Jersey, are subject to extensive state regulation under the New Jersey Casino Control Act, referred to as the "New Jersey Act," and the regulations of the New Jersey Casino Control Commission, referred to as the "New Jersey Commission."  In general, the New Jersey Act and regulations provide for more extensive controls over a broader scope of gaming-related activities than does the Nevada regulatory system.
The New Jersey Act and regulations concern primarily the financial stability and character of casino licensees, their intermediary and holding companies, their employees, their security holders and others financially interested in casino

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operations, the nature of hotel and casino facilities and a wide range of gaming and non-gaming related operations.  The New Jersey Act and regulations include detailed provisions concerning, among other things:



|- | financial and accounting practices used in connection with casino operations;                                                
|- | -----------------------------------------------------------------------------------------------------------------------------
|- | residence and equal employment opportunities for employees of casino operators, contractors for casino facilities and others;
|- | rules of games, levels of supervision of games and methods of selling and redeeming chips;                                   
|- | manner of granting credit, duration of credit and enforceability of gaming debts;                                            
|- | manufacture, distribution and sale of gaming equipment;                                                                      
|- | security standards;                                                                                                          
|- | management control procedures;                                                                                               
|- | accounting and cash control methods;                                                                                         
|- | reports to gaming authorities;                                                                                               
|- | advertising of casinos; and                                                                                                  
|- | standards for entertainment and distribution of alcoholic beverages in casinos.                                              

A number of these provisions require practices which are different from those in Nevada and some of them result in casino operating costs being higher than those in comparable facilities in Nevada.
The New Jersey Act also established the New Jersey Division of Gaming Enforcement, referred to as the "New Jersey Division," to investigate all license applications, enforce the provisions of the New Jersey Act and attendant regulations and prosecute all proceedings for violations of the New Jersey Act and regulations before the New Jersey Commission.  The New Jersey Division also conducts audits and continuing reviews of all casino operations.
Adamar of New Jersey, Inc., a wholly-owned subsidiary of Aztar, has been licensed (subject to quadrennial renewal) by the New Jersey Commission to operate Tropicana Atlantic City.  In November 1982, the New Jersey Commission granted a plenary license to Adamar of New Jersey, Inc.  In November 1999, the license was renewed for a period of four years.  Aztar and Ramada New Jersey Holdings Corporation, another of Aztar's New Jersey gaming subsidiaries, have been approved as qualified holding companies for Adamar of New Jersey, Inc.'s casino license.  Officers and directors of Aztar, Ramada New Jersey Holdings Corporation and Adamar of New Jersey, Inc. and employees who work at casino hotel facilities operated by Adamar of New Jersey, Inc. also have been or must be qualified, licensed or registered. In addition, all contracts affecting the facilities are subject to approval, and all enterprises that conduct business with Adamar of New Jersey, Inc. must register

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with the New Jersey Commission and those enterprises that conduct gaming related businesses or that conduct business on a regular and continuing basis, as defined by the regulations under the New Jersey Act, must be licensed by the New Jersey Commission.
The New Jersey Commission has broad discretion regarding the issuance, renewal, revocation and suspension of casino licenses.  Casino licenses are not transferable.  A casino hotel facility must also continually satisfy specific requirements concerning, among other things, the number of qualifying sleeping units and the relationship between the number of qualifying sleeping units and the square footage of casino space.  Aztar believes that Tropicana Atlantic City continues to meet these requirements.
The New Jersey Act further provides that each person who directly or indirectly holds any beneficial interest or ownership of the securities issued by a casino licensee or any of its intermediary or holding companies, those persons who, in the opinion of the New Jersey Commission, have the ability to control the casino licensee or its intermediary or holding companies or elect a majority of the board of directors of said companies, other than a banking or other licensed lending institution which makes a loan or holds a mortgage or other lien acquired in the ordinary course of business, and lenders and underwriters of said companies may be required to seek qualification from the New Jersey Commission.  However,  because Aztar is a publicly traded holding company, in accordance with the provisions of the New Jersey Act, a waiver of qualification may be granted by the New Jersey Commission, with the concurrence of the director of the New Jersey Division, if it is determined that said persons or entities are not significantly involved in the activities of Adamar of New Jersey, Inc. and, in the case of security holders, do not have the ability to control Aztar or elect one or more of its directors.  There exists a rebuttable presumption that any person holding 5% or more of the equity securities of a casino licensee's intermediary or holding company or a person having the ability to elect one or more of the directors of such a company has the ability to control the company and thus must obtain qualification from the New Jersey Commission.
Notwithstanding this presumption of control, the New Jersey Act provides for a waiver of qualification for passive "institutional investors," as defined by the New Jersey Act, if the institutional investor purchased the securities for investment purposes only and where the securities constitute:



|- | less than 10% of the equity securities of a casino licensee's holding or intermediary company; or                                                                                                                                               
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|- | debt securities of a casino licensee's holding or intermediary company representing a percentage of the outstanding debt of the company not exceeding 20% or a percentage of any issue of the outstanding debt of the company not exceeding 50%.

The waiver of qualification is subject to some conditions including, upon request of the New Jersey Commission, filing a certified statement that the institutional investor has no intention of influencing or affecting the affairs of the issuer.  A waiver of qualification may also be granted to institutional investors holding a higher percentage of securities of a casino licensee's holding or intermediary company upon a showing of good cause.

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If the institutional investor is granted a waiver and subsequently determines to influence or affect the affairs of the issuer, it must provide not less than 30 days notice of this intent and file with the New Jersey Commission an application for qualification before taking any action which may influence or affect the affairs of the issuer, except that an institutional investor holding voting securities will be permitted to vote on matters put to the vote of the holders of outstanding voting securities.  If an institutional investor that has been granted a waiver subsequently changes its investment intent, or if the New Jersey Commission finds reasonable cause to believe that the institutional investor may be found unqualified, no action other than divestiture will be taken by the investor with respect to the security holdings until the investor complies with the provisions of the New Jersey Act concerning Interim Casino Authorization.  The provisions of the New Jersey Act concerning Interim Casino Authorization provide that whenever a security holder of either equity or debt is required to qualify pursuant to the New Jersey Act, the security holder will, within 30 days after the New Jersey Commission determines that qualification is required or declines to waive qualification,



|- | file a completed application for qualification, along with an executed and approved Trust Agreement, wherein all securities of the holding or intermediary company held by that security holder are placed in trust pending qualification, or
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|- | file a notice of intent to divest itself of the securities as the New Jersey Commission may require so as to remove the need for qualification, which securities must be divested within 120 days from the date the determination was made.  

The New Jersey Act further requires that corporate licensees and their subsidiaries, intermediaries and holding companies adopt specific provisions in their certificates of incorporation that require some remedial action in the event that an individual owner of any security of such company is found disqualified under the New Jersey Act.  The required certificate of incorporation provisions vary depending on whether the stock of the company subject to the requirements of the New Jersey Act is publicly or privately traded.  Pursuant to the New Jersey Act, the certificate of incorporation of a publicly held company must provide that any securities of the corporation are held subject to the condition that if a holder is found to be disqualified by the New Jersey Commission pursuant to the New Jersey Act the holder will dispose of his interest in the company.  The certificate of incorporation of a privately held company must create the absolute right of the company to repurchase at the market price or purchase price, whichever is the lesser, any security, share or other interest in the company in the event the New Jersey Commission disapproves a transfer in accordance with the provisions of the New Jersey Act.
Aztar is a publicly held company and, accordingly, a provision has been placed in its restated certificate of incorporation which provides that a holder of its securities must dispose of the securities if the holder is found disqualified under the New Jersey Act.  In addition, Aztar's restated certificate of incorporation provides that it may redeem the stock of any holder found to be disqualified.

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If, at any time, it is determined that Adamar of New Jersey, Inc. has violated the New Jersey Act or regulations, or if any security holder of Aztar, Adamar of New Jersey, Inc. or Ramada New Jersey Holdings Corporation who is required to be qualified under the New Jersey Act is found disqualified but does not dispose of the securities, Adamar of New Jersey, Inc. could be subject to fines or its license could be suspended or revoked.  If Adamar of New Jersey, Inc.'s license is revoked, the New Jersey Commission could appoint a conservator to operate and to dispose of any casino hotel facilities of Adamar of New Jersey, Inc. Net proceeds of a sale by a conservator and net profits of operations by a conservator (at least up to an amount equal to a fair return on Adamar of New Jersey, Inc.'s investment which is reasonable for casinos or hotels) would be paid to Adamar of New Jersey, Inc.
In addition to compliance with the New Jersey Act and regulations relating to gaming, any facility built in Atlantic City by Adamar of New Jersey, Inc. or any other subsidiary of Aztar must comply with the New Jersey and Atlantic City laws and regulations relating to, among other things, the Coastal Area Facilities Review Act, construction of buildings, environmental considerations, operation of hotels and the sale of alcoholic beverages.
The New Jersey Commission is authorized to establish fees for the issuance or renewal of casino licenses.  Yearly casino hotel alcoholic beverage license fees are payable for each facility in any of five specified categories in any licensed casino hotel.  There is also an annual license fee on each slot machine.  The New Jersey Commission is also authorized by regulation to establish annual fees for the issuance and renewal of licenses other than casino licenses.
The New Jersey Act imposes an annual tax of eight percent on gross revenues (as defined in the New Jersey Act).  In addition, casino licensees are required to invest one and one-quarter percent of gross casino revenues for the purchase of bonds to be issued by the Casino Reinvestment Development Authority or make other approved investments equal to that amount; in the event the investment requirement is not met, the casino licensee is subject to a tax in the amount of two and one-half percent on gross revenues.
  Regulation and Licensing - Missouri

On November 3, 1992, a statewide referendum authorized gaming in the state of Missouri on the Missouri and the Mississippi Rivers.  Local approval from the home dock municipality, as required by the legislation, was also obtained from the City of Caruthersville in the November 3, 1992 election.  On April 29, 1993, Missouri enacted revised legislation (as amended, the "Missouri Gaming Law") which amended the existing legislation.  The Missouri Gaming Law established the Missouri Gaming Commission, which is responsible for the licensing and regulation, and enforcement with respect to some aspects, of riverboat gaming in Missouri and has the discretion to approve license applications for riverboat gaming facilities as well as employees and key persons associated with the facilities.  In July 1993, Aztar was chosen by the City of Caruthersville as the preferred applicant to develop a gaming facility, and on September 20, 1993, Aztar's subsidiary, Aztar Missouri Gaming Corporation, predecessor in interest to the current licensee, Aztar Missouri Riverboat Gaming Company, L.L.C. ("Aztar Missouri"), filed its initial application with the Missouri Gaming Commission.  The Missouri Gaming Commission conducted a formal investigation of Aztar Missouri's application and granted an owner/operator gaming license to Aztar Missouri on April 26, 1995.

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In a decision handed down on January 25, 1994, the Missouri Supreme Court held that games of chance were prohibited under the Missouri constitution.  On April 5, 1994, Missouri voters narrowly defeated the adoption of a constitutional amendment that would have excepted excursion boats and floating facilities from the constitutional prohibition on lotteries.  Local voters did re-approve gaming in the City of Caruthersville in the April 5, 1994 election.  Following the April 5, 1994 election, the Missouri legislature amended the existing Missouri Gaming Law to clarify some definitions and to resolve some constitutional questions raised in the Missouri Supreme Court decision.  Pursuant to the Missouri Gaming Law, there are ten operating riverboat gaming facility sites in Missouri (some with multiple licensed riverboat casinos): one in Caruthersville; three in the St. Louis area; four in the Kansas City area; one in La Grange; and one in St. Joseph.
In a statewide election held on November 8, 1994, Missouri voters approved the adoption of an amendment to the Missouri Constitution which permits the legislature to allow games of chance to be conducted on excursion boats and floating facilities on the Mississippi River and the Missouri River.  As a result of the amendment, full-scale gaming, subject to Missouri Gaming Law, is now available in Missouri.
Opponents of gaming in Missouri have brought several legal challenges to gaming in the past and may possibly bring similar challenges in the future.  On November 25, 1997, the Missouri Supreme Court overturned a state lower court and held that a portion of the Missouri Gaming Law that authorized excursion gaming facilities in "artificial basins" up to 1,000 feet from the Mississippi or Missouri rivers was unconstitutional.  This ruling created uncertainty as to the legal status of several excursion gaming riverboat facilities in the state; however, as Aztar Missouri facilities were fully on the Mississippi River, they did not appear to be affected.  On November 3, 1998, a statewide referendum was held, whereby the voters amended the constitution to allow "artificial basins" for existing facilities, effectively overturning the above Missouri Supreme Court decision.  There can be no assurances that any future challenges, if brought, would not further interfere with full-scale gaming operations in Missouri, including the operations of Aztar Missouri. 
Under the Missouri Gaming Law, the ownership and operation of riverboat gaming facilities in Missouri are subject to extensive state and local regulation.  Aztar, Aztar Missouri, any subsidiaries, and some of their officers and employees are and will be subject to specific regulations, including licensing requirements.  As part of the application and licensing process for a gaming license, the applicant must submit detailed financial, operating and other reports to the Missouri Gaming Commission.  Each applicant has an ongoing duty to update the information provided to the Missouri Gaming Commission in the application.  Aztar Missouri has frequently updated its application materials since it was initially licensed.  In addition to the information required of the applicant, directors, officers and other defined "key persons" (which include individuals designated by the Missouri Gaming Commission) must submit Personal Disclosure Forms, which include detailed personal financial information, and are subject to thorough investigations.  In addition, some officers and directors of Aztar, as well as Aztar itself, have submitted Personal Disclosure Forms and applications to the Missouri Gaming Commission.  All gaming employees must obtain an occupational license issued by the Missouri Gaming Commission.

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The operators' licenses (or "Class A" gaming licenses) are issued through application to the Missouri Gaming Commission, which requires, among other things:



|- | investigations into an applicant's character, financial responsibility and experience qualifications and
|- | --------------------------------------------------------------------------------------------------------
|- | that applicants furnish:                                                                                
|  | -                                                                                                       
|  | -                                                                                                       
|  | -                                                                                                       
|  | -                                                                                                       

License fees are a minimum of $50,000 for the initial application and $25,000 annually thereafter.  Aztar Missouri's gaming license was renewed on April 25, 2001 and expires on April 25, 2002.  Aztar Missouri will not be required to undergo a full relicensing investigation and hearing until 2003.
The Missouri Gaming Law regulations impose restrictions on the use and transfer of the gaming licenses as well as limitations on transactions engaged in by licensees.  The licenses issued by the Missouri Gaming Commission may not be transferred nor pledged as collateral.  The Missouri Gaming Law regulations bar a licensee from taking any of the following actions without prior notice to, and approval by, the Missouri Gaming Commission:



|- | any transfer or issuance of an ownership interest of five percent or more of the issued and outstanding ownership interest;
|- | ---------------------------------------------------------------------------------------------------------------------------
|- | any private incurrence of debt by the licensee or any holding company of $1,000,000 or more;                               
|- | any public issuance of debt by a licensee or its holding company; and                                                      
|- | defined "significant related party transactions."                                                                          

In addition, the licensee must notify the Missouri Gaming Commission of other transactions, including the transfer of five percent or more of an ownership interest in the licensee or holding company and any transaction of at least $1,000,000.  The restrictions on transfer of ownership apply to Aztar as well as the direct licensee, Aztar Missouri.  Gaming equipment and corporate stock of some licensees may not be pledged except in narrow circumstances and subject to some regulatory conditions.
Missouri statutes and administrative rules contain detailed requirements concerning the operation of a licensed excursion gaming boat facility, including:

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|- | a charge of two dollars per gaming customer per excursion, as discussed below, that licensees must pay to the Missouri Gaming Commission;                                                                                                
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|- | requirements regarding minimum payouts;                                                                                                                                                                                                  
|- | a 20% tax on adjusted gross receipts;                                                                                                                                                                                                    
|- | prohibitions against providing credit to gaming customers, except for the use of credit cards and cashing checks; and                                                                                                                    
|- | a requirement that each licensee reimburse the Missouri Gaming Commission for all costs of any Missouri Gaming Commission staff, including Missouri Highway Patrol Officers, necessary to protect the public on the licensee's riverboat.

Licensees also must submit monthly and annual reports of financial and statistical data and quarterly and annual audited financial information and compliance reports to the Missouri Gaming Commission and pay the associated auditing fees.  Other areas of operation which are subject to regulation under the Missouri rules are the color, denomination and handling of chips and tokens; the surveillance methods and computer monitoring of electronic games; accounting and audit methods and procedures; and approval of an extensive internal control system.  The Missouri Gaming Commission requires comprehensive safety inspections and compliance with local and federal safety requirements.  Liquor licenses are issued and regulated by the Missouri Gaming Commission.  The Missouri rules also require that all of an operator's purchases must be from suppliers licensed by the Missouri Gaming Commission or another entity approved by the Commission.
The Missouri Gaming Commission has the power, as well as broad discretion in exercising this power, to revoke or suspend gaming licenses and impose other penalties for violations of the Missouri Gaming Law and the rules and regulations promulgated thereunder, including without limitation, forfeiture of all gaming equipment used for improper gaming and fines of up to three times a licensee's highest daily gross adjusted receipts during the preceding twelve months.
Although the Missouri Gaming Law provides no limit on the amount of riverboat space that may be used for gaming, the Missouri Gaming Commission is empowered to impose space limitations through the adoption of rules and regulations.  In addition, the Missouri Gaming Law imposes a $500 loss limit per two-hour period established by each licensee with the approval of the Missouri Gaming Commission.  In order to establish an excursion schedule, which allows patrons to enter and exit the gaming floor at any time during the excursion the licensee must prove to the Missouri Gaming Commission that it can enforce the $500 loss limit.
In addition, the Missouri Gaming Commission is empowered to determine on a city and county-specific basis where "dockside" or permanently-docked gaming is appropriate and may be permitted.  The Missouri Gaming Commission has authorized all ten licensed sites to operate all or a portion of their facilities on a continuously docked basis.  On February 15, 1996, the Commission granted Aztar Missouri the authority to operate gambling games on part of its floating facility previously used for non-gaming activities, including ticketing, under the continuous docking provision of the Missouri Gaming Law.  On February 15, 1997, the Commission granted Aztar Missouri the authority to permanently dock the excursion gambling riverboat facility known as the "City of Caruthersville."

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Regulation and Licensing - Indiana

The ownership and operation of riverboat casinos in specific designated waters are subject to extensive state regulation under the Indiana Riverboat Gambling Act (the "Indiana Act") and regulations which the Indiana Gaming Commission ("Indiana Commission") is authorized to adopt under the Indiana Act.  The Indiana Act extends broad and pervasive regulatory powers and authority to the Indiana Commission.  The Indiana Act and the regulations of the Indiana Commission are significant to Aztar's prospects for successfully operating its riverboat casino and associated developments based in Evansville, Indiana.
The Indiana Commission has issued



|- | five riverboat owner's licenses on Lake Michigan, and                         
|- | ------------------------------------------------------------------------------
|- | five riverboat owner's licenses on the Ohio River, including Aztar's facility.

The Indiana Commission has not considered applicants for a license on Patoka Lake in Southwestern Indiana, since that site has been determined by the United States Army Corps of Engineers to be unsuitable for a riverboat casino project.  A licensee may own no more than a 10% interest in any other owner's license under the Indiana Act.  The Indiana Commission has adopted regulations under the Indiana Act which covers numerous operational matters concerning riverboat casinos licensed by the Commission, including rules for



|- | authorized games,           
|- | ----------------------------
|- | internal control procedures,
|- | accounting records,         
|- | security,                   
|- | gaming equipment, and       
|- | extensions of credit.       

Among regulations adopted is one dealing with riverboat excursions, routes and public safety.  The Indiana Act requires licensed riverboat casinos to be cruising vessels and the regulations carry out the legislative intent with appropriate recognition of public safety needs.  The Indiana Act and the regulations explicitly preclude "dockside gambling".  Riverboat gaming excursions are limited to a duration of up to four hours unless expressly approved by the Indiana Commission.  No gaming may be conducted while the boat is docked except:



|- | for 30-minute time periods at the beginning and end of a cruise while the passengers are embarking and disembarking;                                      
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|- | if the master of the riverboat reasonably determines that specific weather or water conditions present a danger to the riverboat, its passengers and crew;
|- | if either the vessel or the docking facility is undergoing mechanical or structural repair;                                                               



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|- | if water traffic conditions present a danger to:                                                                                    
|- | ------------------------------------------------------------------------------------------------------------------------------------
|  | -                                                                                                                                   
|  | -                                                                                                                                   
|- | if the master has been notified that a condition exists that would cause a violation of Federal law if the riverboat were to cruise.

However, a riverboat licensee must allow patrons to disembark at anytime the riverboat remains at the dock and gambling continues.
For Ohio River excursions, including those Aztar is conducting through its Evansville operations, "full excursions" must be conducted at all times during a year unless the master determines otherwise, for the above-stated reasons.  A "full excursion" is a cruise on the Ohio River.  The Ohio River has waters in both Indiana and Kentucky in the Evansville vicinity.  Because riverboat casino gambling is illegal in Kentucky, authorities of that state have raised issues about Indiana-licensed riverboats operating in Kentucky waters.  Aztar's Evansville riverboat cruises from its dock without entering Kentucky waters, under its currently approved cruising route, thereby avoiding those issues.
Aztar, through an Indiana subsidiary, Aztar Indiana Gaming Corporation, has received from the Indiana Commission a riverboat owner's license for the Evansville, Indiana market.  Aztar Indiana Gaming Corporation completed requirements for formal licensing and commenced operations in Evansville on December 7, 1995.  On August 20, 1999, the Indiana Commission authorized a transfer of the assets of Aztar Indiana Gaming Corporation, including the riverboat owner's license, to Aztar Indiana Gaming Company, L.L.C. ("Aztar Indiana"), a recently-formed limited liability company, in which Aztar Riverboat Holding Company, L.L.C. owns all of the membership interests.  Aztar Riverboat Holding Company, L.L.C. is 100% owned by Aztar through wholly-owned subsidiaries.  On December 31, 1999, Aztar Indiana Gaming Corporation transferred its assets and riverboat owner's license to Aztar Indiana.
A riverboat owner's license has an initial effective period of five years but is subject to an annual renewal thereafter.  The Indiana Commission has broad discretion with respect to the initial issuance of licenses and also with respect to the renewal, revocation, suspension and control of riverboat owner's licenses. The Indiana Act requires a reinvestigation after three years to ensure the owner continues to be suitable for licensure.  On December 7, 2000, the Indiana Commission made a preliminary determination to renew Aztar Indiana's riverboat owner's license until such time as Aztar Indiana has an opportunity to make a presentation to the Indiana Commission at a regular business meeting.  On March 2, 2001, the Indiana Commission renewed Aztar Indiana's riverboat owner's license for a period of one year with an annual review.  On December 6, 2001, the Indiana Commission renewed Aztar Indiana's riverboat owner's license for a period of one year, from December 8, 2001 to December 7, 2002.  The Indiana Commission has adopted a rule which requires, in the event a riverboat owner's license is terminated, the riverboat licensee to secure all the assets of the riverboat gambling operation, and the licensee may not dispose of any of these assets without the written approval of the Indiana Commission. Officers, directors and principal owners of the actual license holder and employees who are to work on the riverboat are subject to substantial disclosure requirements as a part of securing and maintaining necessary licenses.  Significant contracts are subject to disclosure.

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A riverboat owner licensee may not enter into or perform any contract or transaction in which it transfers or receives consideration which is not commercially reasonable or which does not reflect the fair market value of the goods or services rendered or received.  All contracts are subject to disapproval by the Indiana Commission.  Suppliers of gaming equipment and materials must also be licensed under the Indiana Act.
The Indiana Act requires licensees to disclose to the Indiana Commission the identity of all directors, officers and persons holding direct or indirect beneficial interests of 1% or greater.  The Indiana Commission also requires a broad and comprehensive disclosure of financial and operating information on licensees and their principal officers.  Aztar has provided full information and documentation to the Indiana Commission and it must continue to do so during the term of the license.  The Indiana Act prohibits, among other things:



|- | a key person or a person holding an ownership interest in a riverboat licensee, or an employee of a riverboat licensee, from participating in a game conducted on a riverboat which is the subject of a license; and                                                                                                                                                                
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|- | contributions to a candidate for a state, legislative, or local office, or to a candidate's committee or to a regular party committee by the holder of a riverboat owner's license or a supplier's license, by an officer of a licensee, by an officer of a person that holds at least a 1% interest in the licensee, or by a person holding at least a 1% interest in the licensee.

The Indiana Commission has adopted a rule requiring quarterly reporting by the holder of a riverboat owner's license, including Aztar Indiana, or a holder of a supplier's license, of the officers of the licensee, officers of persons that hold at least a 1% interest in the licensee, including Aztar, and of persons who directly or indirectly own a 1% interest in the licensee, including beneficial owners of Aztar.
The Indiana Commission has adopted rules which (a) prohibit the distribution by a riverboat licensee, including Aztar Indiana, to its partners, shareholders, itself, or any affiliated entity, if the distribution would impair the financial viability of the riverboat gambling operation, (b) require riverboat licensees, including Aztar Indiana, to maintain on a quarterly basis a cash reserve in the amount of the actual payout for three days, and the cash reserve would include cash in the casino cage, cash in a bank account in Indiana, or cash equivalents not committed or obligated, and (c) require independent financial audits annually of riverboat licensees, including Aztar Indiana, and disclosure to the Indiana Commission of material errors and irregularities, or illegal acts, or significant deficiencies discovered during the course of the audit.
In addition to receiving a license to conduct riverboat casino operations from the Indiana Commission, Aztar Indiana has secured permits and approvals from the United States Army Corps of Engineers to develop the facilities it is using to conduct operations.  Aztar Indiana has received three alcoholic beverage permits which are subject to annual renewal: one for riverboat excursions and two for land support facilities.  All building permits and other approvals for the permanent facilities have been received, and the project is complete.



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The Indiana Act prescribes a tax on adjusted gross receipts from gambling games authorized under the Indiana Act at the rate of 20% on adjusted gross receipts.  For this purpose, adjusted gross receipts means the total of all cash and property received from gaming operations less cash paid out as winnings and uncollectible gaming receivables (not to exceed 2%).  The Indiana Act also prescribes an additional tax for admissions, based upon $3 for each person admitted to a gaming excursion.  The admissions tax is paid for each excursion or part of an excursion

for which the person remains on board.  Riverboats are assessed for property tax purposes as real property at rates to be determined by local taxing authorities. Sales on a riverboat are subject to applicable use, excise and retail taxes.  The Indiana Act requires a riverboat owner licensee to directly reimburse the Indiana Commission for the costs of inspectors and agents required to be present during the conduct of gaming operations.
The Indiana Act places special emphasis upon minority and women's business enterprise participation in the riverboat industry.  Any person issued a riverboat owner's license must establish goals of at least 10% of the total dollar value of the licensee's contracts for goods and services with minority business enterprises and 5% of the total dollar value of the licensee's contracts for goods and services with women's business enterprises.  The Indiana Commission may suspend, limit or revoke the owner's license or impose a fine for failure to comply with the statutory requirements.
Minimum and maximum wagers on games on the riverboat are left to the discretion of the licensee.  Wagering may not be conducted with money or other negotiable currency.  No person under the age of 21 is permitted to wager on a riverboat.
An institutional investor which acquires 5% or more of any class of voting securities of a holding company of a licensee is required to notify the Indiana Commission and to provide additional information, and may be subject to a finding of suitability.  A person who acquires 5% or more of any class of voting securities of a holding company of a licensee is required to apply to the Indiana Commission for a finding of suitability.  A riverboat licensee or an affiliate may not enter into a debt transaction of $1 million or more without approval of the Indiana Commission.  On May 29, 2001, the Indiana Commission approved (a) the amendment to the revolving credit facility to extend the maturity date and the reduction date, and (b) the issuance by Aztar of up to $200 million in public unsecured debt for a term of approximately ten years with an interest rate not to exceed 8 7/8%. Pursuant to our request and as provided for in the rules of the Indiana Commission, the Executive Director of the Indiana Commission, in connection with the issuance of the unregistered notes and the registered notes, waived the requirements and procedures for approval by the Indiana Commission of the sale of the notes at 9%.  The Indiana Commission at its August 23, 2001 meeting ratified the Executive Director's waiver.
A riverboat owner's license is a revocable privilege and is not a property right under the Indiana Act.  A riverboat owner licensee or any other person may not lease, hypothecate, borrow money against or loan money against a riverboat owner's license.

27



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A lawsuit was filed on October 25, 1996, by three individuals in Harrison County, Indiana, which challenged the constitutionality of the Indiana Act.  The lawsuit alleged that the Indiana Act:



|- | creates an unequal privilege because supporters of riverboat gambling, having lost a county-wide referendum, are permitted to resubmit a proposal to county voters for approval of riverboat gambling, while opponents, having lost a county-wide referendum, are not allowed to resubmit a proposal; and
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|- | was enacted as part of a state budget bill allegedly in violation of a state constitutional requirement that legislation be confined to a single subject and matters connected to this subject.                                                                                                          

On July 14, 2000, the Indiana Court of Appeals affirmed the trial court decision which granted the motion to dismiss of the State of Indiana because the appellants lacked standing to challenge the constitutionality of the Indiana Act, their harm was too remote and their injury was no different than that which would be suffered by the public as a whole.  The Supreme Court of Indiana denied transfer of this case on November 22, 2000.  The Supreme Court of Indiana has previously upheld the constitutionality of the Indiana Act, although the prior challenge involved different groups than those alleged in this recent lawsuit.

Environmental Matters

Aztar is subject to federal, state and local environmental laws, regulations and ordinances that (a) govern activities or operations that may have adverse environmental effects, such as discharges to air and water as well as handling and disposal practices for solid and hazardous wastes, and (b) impose liability for the costs of cleaning up, and some damages resulting from, past spills, disposals or other releases of hazardous substances.  Aztar uses some substances and generates some wastes that are regulated or may be deemed hazardous under applicable environmental laws.  From time to time, our operations have resulted, or may result, in some noncompliance with applicable requirements under environmental laws.  Aztar has also incurred, and in the future may incur, costs related to cleaning up contamination relating to historical uses of some of our current or former properties.  Specifically, the riverboat properties have been used for various industrial purposes in the past.  Any noncompliance with applicable requirements or liability under environmental laws has not had, and is not expected to have, a material adverse effect on our consolidated financial position, results of operations or cash flows.
  Other Regulations

Aztar's businesses are subject to various federal, state and local laws and regulations in addition to those discussed above.  These laws and regulations include but are not limited to restrictions and conditions concerning employees, taxation, zoning and building codes, and marketing and advertising.  Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted.  Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect Aztar.



28



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EMPLOYEES

Aztar employs approximately 9,900 people. Approximately 3,200 Aztar employees are represented by unions.  Of the approximately 5,000 employees at Tropicana Atlantic City, approximately 1,800 are covered by collective bargaining contracts.  Substantially all of these employees are covered by a contract that expires on September 14, 2004 and a small number are covered by contracts that expire in 2006.  At Tropicana Las Vegas, approximately 1,400 of the 2,100 employees are covered by collective bargaining contracts.  Substantially all of these employees are covered by contracts that expire in 2002. The remainder of employees are covered by contracts that expire in 2003, 2004 or 2005.  At Ramada Express there are approximately 1,400 employees, none of which are covered by collective bargaining agreements.  Aztar has approximately 1,100 employees and 300 employees, respectively, at Casino Aztar Evansville and Casino Aztar Caruthersville, none of which are covered by collective bargaining agreements.
TRADEMARKS

We use a variety of trade names, service marks and trademarks and believe that we have all the licenses necessary to conduct our business.  We have registered several service marks and trademarks with the United States Patent and Trademark Office or otherwise acquired the licenses to use those which are material to the conduct of our business.
Substantially all of our trademarks and service names have been assigned to the lenders under Aztar's bank credit facility.
Aztar, Hotel Ramada of Nevada and Adamar of New Jersey, Inc. are the beneficiaries of an agreement with Tropicana Enterprises and the Jaffe family regarding the use of the name "Tropicana" for the operation of a casino hotel in New York State if gaming were to be authorized in New York State.  Pursuant to that agreement, Aztar has registered the name under the Lanham Act.  Under some events, the right to use the name reverts to Tropicana Enterprises.  On February 28, 2002, we completed the purchase of the other 50% partnership interest in Tropicana Enterprises that we did not own and acquired unrestricted rights to the name.
Ramada Inc. has licensed Aztar to use the name "Ramada" in conjunction with the operation of Ramada Express, and will not use or permit the use of the name "Ramada" in Laughlin, Nevada by any other person or entity.
We have registered the following important trademarks or service marks: Aztar, Casino Aztar, Trop, Trop Park, and The Island of Las Vegas.  Aztar believes there are no other trademarks or service marks the use of which is material to the conduct of our business as a whole.ITEM 2.  PROPERTIES

TROPICANA ATLANTIC CITY

Tropicana Atlantic City is located on an approximately 10-acre site in Atlantic City, New Jersey.  In addition, we have accumulated approximately 3 1/2 acres next to our operating site for future development. In July 1993, Tropicana Atlantic City became wholly-owned by Aztar.

29



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TROPICANA LAS VEGAS

Tropicana Las Vegas is located on a 34-acre site in Las Vegas, Nevada.  Tropicana Enterprises owns the Tropicana Las Vegas and leases it to Hotel Ramada of Nevada, a wholly-owned subsidiary of Aztar.  Hotel Ramada of Nevada operates the casino and hotel under the lease.  Adamar of Nevada, a wholly-owned subsidiary of Aztar, owns a noncontrolling 50% general partnership interest in Tropicana Enterprises.  The remaining 50% general partnership interest in Tropicana Enterprises is held by various trusts associated with the Jaffe family subject to preferences on liquidation.  On February 2, 1998, we acquired an option to purchase the 50% partnership interest that we do not own.  The option agreement gives us an unconditional right to purchase the partnership interest for $120 million.  On January 29, 2002, we exercised this option and on February 28, 2002, we completed the purchase.  We are conducting feasibility studies to master-plan a potential development of the Las Vegas Tropicana site.  The amount and timing of any future expenditure, and the extent of any impact on existing operations, will depend on the nature and timing of the development that we ultimately undertake, if any. 
     RAMADA EXPRESS

Ramada Express is located on an approximate 31-acre site in Laughlin, Nevada.  Ramada Express is wholly-owned by Aztar.
     CASINO AZTAR EVANSVILLE

Casino Aztar Evansville operates on and from a base 8-acre site next to the Ohio River in downtown Evansville, Indiana.  Approximately 4 1/2 acres are leased.  The lease was entered into in 1995 for 10 years.  The lease has 3 options to renew for 5 years each.  The remaining approximately 3 1/2 acres are wholly-owned by us.  In addition, we have a seven-acre site located near our base site that we are using for parking.  We are searching for third-party developers to develop facilities on this site that would complement our operations.
     CASINO AZTAR CARUTHERSVILLE

Casino Aztar Caruthersville operates on and from a 37-acre site next to the Mississippi River in downtown Caruthersville, Missouri.  The site and facilities are wholly-owned by us.  We have some unused land at this site and we are encouraging third-party developers to develop facilities on this land that would complement our operations.
     GENERAL

We lease our corporate headquarters located in Phoenix, Arizona and own or lease some other facilities which are not material to our operations.
Substantially all land, casino hotel buildings, casino riverboats, pavilions, furnishings and equipment owned by us are pledged as collateral under our revolving credit facility.

30



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ITEM 3.  LEGAL PROCEEDINGS

Aztar is a defendant in an action originally filed in the United States District Court for the Middle District of Florida, Orlando Division entitled William H. Poulos, On Behalf of Himself and All Others Similarly Situated vs. Caesars World, Inc., et al., filed on April 26, 1994.  This action was consolidated with another subsequently filed action in that court entitled William Ahearn, On Behalf of Himself and All Others Similarly Situated vs. Caesars World, Inc., et al., currently consolidated Case No. CV-S-94-1126-DAE(RJJ)-BASE FILE (the "Actions" or collectively, the "Poulos/Ahearn Case").  Both Actions were brought under RICO and state common law and seek compensatory and punitive damages in excess of $1 billion from the defendants.  The complaints allege that the defendants took part in a scheme intended to induce people to play video poker and electronic slot machines based on false beliefs concerning how those machines actually operate as well as the extent to which there is actually an opportunity to win on any given play.  The precise nature of Aztar's role in the alleged fraud and conspiracy to defraud is not discernible from the complaint.
On September 26, 1995, an action entitled Larry Schreier, On Behalf of Himself and All Others Similarly Situated vs. Caesars World, Inc., et al., Case No. CV-S-95-00923-DWH(RJJ)(the "Schreier Case") was commenced in the United States District Court for the District of Nevada.  The Schreier Case is identical to the Poulos/Ahearn Case in all material respects, except that the named plaintiff in the Schreier Case purports to represent a smaller and more precisely defined class of persons than the plaintiffs in the Poulos/Ahearn Case.  The defendants (including Aztar) moved to dismiss the Schreier complaint on the same grounds as in the previously described Poulos/Ahearn Case, as well as on the ground that this case was filed for an improper purpose, an attempt to circumvent prior rulings of the Court in the Poulos/Ahearn Case.  On August 15, 1996, District Judge Lloyd D. George granted the motion to dismiss, without prejudice.  An amended complaint containing the same principal allegations was filed on September 30, 1996.  The defendants (including Aztar) filed motions to dismiss the amended complaint for failure to state a claim and on other grounds.  The Plaintiff opposed these motions.
The Poulos/Ahearn Case and the Schreier Case were consolidated, as was the action entitled William H. Poulos, On Behalf of Himself and All Others Similarly Situated vs. Ambassador Cruise Lines, Inc., et al., Case No. CV-S-95-936 LDG(RLH)(the "Cruise Ship Case").  (The allegations in the Cruise Ship Case are nearly identical to those made in the Poulos/Ahearn and Schreier cases, and are made against a group of defendants consisting of several manufacturers and distributors of gaming devices, as well as numerous cruise ship operators and companies which operate cruise ship casinos.)  The Poulos/Ahearn Case, the Schreier Case and the Cruise Ship Case are collectively referred to as the "Consolidated Cases."
On February 14, 1997, the Plaintiffs filed a consolidated amended complaint in the Consolidated Cases.  On March 21, 1997, the Defendants moved to dismiss the consolidated amended complaint for failure to state a claim and on other grounds.  The Plaintiffs opposed these motions.  The defendants filed reply memoranda in support of the motions.  The motions were argued on November 3, 1997.

31



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On December 19, 1997, the court entered orders deciding the motions in the Consolidated Cases.  The substance of those orders is as follows:
     1.   The motion to dismiss was granted as to the "wire fraud" allegation in the RICO claim; the balance of the motion to dismiss the RICO claims was denied.
     2.   The motion to strike some parts of the consolidated amended complaint was granted in part.
     3.   The remaining motions (to dismiss and to stay or abstain) were denied.
     4.   The plaintiffs were permitted to delete Mr. Ahearn, and add Ms. McElmore as a class representative.
The plaintiffs in the Consolidated Cases filed a second consolidated amended complaint on January 9, 1998.  The Second Consolidated Amended Complaint contains claims which are nearly identical to those in the previously dismissed complaints.  The defendants answered, denying the substantive allegations of the Second Consolidated Amended Complaint.  On March 18, 1998, the plaintiffs filed a motion for class certification.  On March 19, 1998, the Magistrate Judge granted defendants' motion seeking to bifurcate discovery into "class" and "merits" phases, and to stay "merits" discovery pending a decision on plaintiffs' motion for class certification.  On August 7, 1998, the defendants filed their opposition to the motion for class certification.  The plaintiffs' reply memorandum was filed on August 25, 1998, and the matter was submitted to the judge for decision.  On January 26, 2001, the plaintiffs filed a supplement to their motion for class certification.  The defendants have filed a supplement to their memorandum in opposition to class certification and the plaintiffs filed their reply.  The hearing on the motion for class certification was held on November 15, 2001.  A status conference has been scheduled for March 27, 2002.  The stay of merits discovery remains in effect until the court decides the motion for class certification.
We believe that plaintiffs' allegations are without merit, and we intend to defend the actions vigorously.
We are a party to various claims, legal actions and complaints arising in the ordinary course of business or asserted by way of defense or counterclaim in actions filed by us. Management believes that its defenses are substantial in each of these matters and that our legal posture can be successfully defended or satisfactorily settled without material adverse effect on our consolidated financial position, results of operations or cash flows.ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.



32



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EXECUTIVE OFFICERS OF THE REGISTRANT

The registrant has elected not to include information concerning its executive officers in its 2002 Proxy Statement, as allowed by the Proxy Statement instructions.  The registrant relies on General Instruction G(3) of this report on Form 10-K in presenting the following information on its executive officers.

|                         |                                                              |     | Tenure      
|------------------------ | ------------------------------------------------------------ | --- | ------------
|Name                     | Office                                                       | Age | With Company
|Paul E. Rubeli           | Chairman of the Board,
President and Chief
Executive Officer | 58  | 23 years    
|Robert M. Haddock        | Executive Vice President
and Chief Financial Officer         | 57  | 21 years    
|Nelson W. Armstrong, Jr. | Vice President,
Administration, and Secretary                | 60  | 29 years    
|Joe C. Cole              | Vice President,
Corporate Communications                     | 63  | 14 years    
|Meridith P. Sipek        | Controller                                                   | 55  | 24 years    
|Neil A Ciarfalia         | Treasurer                                                    | 54  | 7 years     

Paul E. Rubeli.  Mr. Rubeli joined Ramada Inc. in 1979 as group vice president, industrial operations.  He served as executive vice president, gaming, of Ramada Inc. from 1982 to December 1989, when he was appointed president and chief operating officer of Aztar.  He was appointed president and chief executive officer in February 1990 and was appointed chairman of the board in addition to his other positions in February 1992.
Robert M. Haddock.  Mr. Haddock joined Ramada Inc. in 1980 and held various positions before becoming executive vice president and chief financial officer in March 1987, serving in that capacity until 1989, when he assumed the same position with Aztar. 
Nelson W. Armstrong, Jr.  Mr. Armstrong joined Ramada Inc. in 1973 as an accounting supervisor and held various positions on the corporate accounting staff, serving as vice president and controller, of Ramada Inc.  In 1989, Mr. Armstrong became vice president and controller of Aztar until he was appointed vice president, administration, and secretary of Aztar in March 1990.
Joe C. Cole.  Mr. Cole joined Ramada Inc. in March 1988 as vice president, corporate communications, after having been affiliated with Phoenix Newspapers Inc. for 26 years as a reporter, columnist and editor.  He became vice president, corporate communications of Aztar in 1989.
Meridith P. Sipek.  Mr. Sipek joined Ramada Inc.'s corporate accounting staff in 1977 as a manager and held various positions in corporate and hotel accounting, serving as hotel group controller, before being named assistant corporate controller.  Mr. Sipek became Aztar's assistant corporate controller in 1989 and he was appointed controller in March 1990.

33



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EXECUTIVE OFFICERS OF THE REGISTRANT (continued)
Neil A. Ciarfalia.  Mr. Ciarfalia joined Aztar in 1995 as treasurer.  Prior to joining Aztar, Mr. Ciarfalia spent 11 years with the commercial aircraft division of Saab-Scania AB.  During that time, he served Saab as president of the various divisional finance companies which arranged or provided financing for the acquisition of Saab aircraft and related products.

PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERSAztar had 7,192 shareholders of record as of March 1, 2002. 
The additional information required by this Item 5 is included in this report on pages F-19, F-34, F-44 and F-56.ITEM 6. SELECTED FINANCIAL DATA
The information required by Item 6 is included in this report on pages F-56 and F-57.ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information required by Item 7 is included in this report on pages F-44 through F-55.ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by Item 7A is included in this report on page F-53 under the caption "Market Risk".ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Reference is made to the Index to Financial Statements and Schedules on page F-1.ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTThe information required by Item 10 is incorporated by reference to the registrant's definitive Proxy Statement to be filed with the Securities and Exchange Commission.  A cross-referenced index is located on the facing page of this report.
Information concerning the registrant's executive officers is presented above under a separate caption in Part I of this report.



34



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ITEM 11.  EXECUTIVE COMPENSATION
The information required by Item 11 is incorporated by reference to the registrant's definitive Proxy Statement to be filed with the Securities and Exchange Commission.  A cross-referenced index is located on the facing page of this report.ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by Item 12 is incorporated by reference to the registrant's definitive Proxy Statement to be filed with the Securities and Exchange Commission.  A cross-referenced index is located on the facing page of this report.ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.

PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

|(a) | 1. | Financial Statements:
See the Index to Financial Statements and Schedules on page F-1.                                                                                                                                              
|--- | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | 2. | Financial Statement Schedules:
See the Index to Financial Statements and Schedules on page F-1.                                                                                                                                     
|    | 3. | Exhibits:
See the exhibit index on page E-1 for a listing of exhibits filed with this report and those incorporated by reference.
All other exhibits have been omitted because the information is not required or is not applicable.
|(b) |    | Reports on Form 8-K:
The Company did not file any report on Form 8-K during the quarter ended January 3, 2002.                                                                                                                      



35



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For the purposes of complying with the amendments to the rules governing Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned registrant hereby undertakes as follows, which undertaking shall be incorporated by reference into registrant's Registration Statements on Form S-8 No. 33-32399, No. 33-44794, No. 333-79297 and No. 333-64952 (filed January 5, 1990, December 24, 1991, May 26, 1999 and July 12, 2001, respectively):
Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.  In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.



36



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

|AZTAR CORPORATIONRegistrant | By ROBERT M. HADDOCK
   Robert M. Haddock
   Executive Vice President and
   Chief Financial Officer | March 6, 2002       Date
|--------------------------- | ---------------------------------------------------------------------------------------------------- | ------------------------



Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

|PAUL E. RUBELIPaul E. Rubeli         | Chairman of the Board, President
and Chief Executive Officer, and
Director | March 6, 2002
|------------------------------------ | -------------------------------------------------------------------------- | -------------
|ROBERT M. HADDOCKRobert M. Haddock   | Executive Vice President and
Chief Financial Officer, and
Director         | March 6, 2002
|MERIDITH P. SIPEKMeridith P. Sipek   | Controller                                                                 | March 6, 2002
|JOHN B. BOHLEJohn B. Bohle           | Director                                                                   | March 6, 2002
|GORDON M. BURNSGordon M. Burns       | Director                                                                   | March 6, 2002
|LINDA C. FAISSLinda C. Faiss         | Director                                                                   | March 6, 2002
|RICHARD J. GLASIERRichard J. Glasier | Director                                                                   | March 6, 2002
|ROBERT S. ROSOWRobert S. Rosow       | Director                                                                   | March 6, 2002



37



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INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

|I.  |    | Financial Statements                                                                                                                                                                                              | Page
|--- | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|    |    |                                                                                                                                                                                                                   |     
|    | 1. | Aztar Corporation and Subsidiaries                                                                                                                                                                                |     
|    |    | Report of Independent Accountants. . . . . . . . . . . . . . . . .                                                                                                                                                | F-2 
|    |    | Consolidated Balance Sheets at January 3, 2002 and December 28, 
  2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                                                                               | F-3 
|    |    | Consolidated Statements of Operations for the years ended January 
  3, 2002, December 28, 2000 and December 30, 1999 . . . . . . . .                                                                             | F-5 
|    |    | Consolidated Statements of Cash Flows for the years ended January 
  3, 2002, December 28, 2000 and December 30, 1999 . . . . . . . .                                                                             | F-7 
|    |    | Consolidated Statements of Shareholders' Equity for the years
  ended January 3, 2002, December 28, 2000 and December 30, 
  1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                     | F-9 
|    |    | Notes to Consolidated Financial Statements . . . . . . . . . . . .                                                                                                                                                | F-11
|    |    |                                                                                                                                                                                                                   |     
|    | 2. | Tropicana Enterprises                                                                                                                                                                                             |     
|    |    | Report of Independent Accountants . . . . . . . . . . . . . . . .                                                                                                                                                 | F-35
|    |    | Balance Sheets at January 3, 2002 and December 28, 2000 . . . . .                                                                                                                                                 | F-36
|    |    | Statements of Operations for the years ended January 3, 2002, 
  December 28, 2000 and December 30, 1999 . . . . . . . . . . . .                                                                                  | F-37
|    |    | Statements of Cash Flows for the years ended January 3, 2002, 
  December 28, 2000 and December 30, 1999 . . . . . . . . . . . .                                                                                  | F-38
|    |    | Statements of Partners' Capital for the years ended January 3,   2002, December 28, 2000 and December 30, 1999 . . . . . . . . .                                                                                  | F-39
|    |    | Notes to Financial Statements . . . . . . . . . . . . . . . . . .                                                                                                                                                 | F-40
|    |    |                                                                                                                                                                                                                   |     
|II. |    | Financial Statement Schedules - Aztar Corporation and Subsidiaries                                                                                                                                                |     
|    |    | Report of Independent Accountants . . . . . . . . . . . . . . . .                                                                                                                                                 | S-1 
|    |    | Schedule II - Valuation and Qualifying Accounts . . . . . . . . .                                                                                                                                                 | S-2 
|    |    | All other schedules are omitted because the required information is either presented in the financial statements or notes thereto, or is not present in amounts sufficient to require submission of the schedule. |     



F-1



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REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
Aztar Corporation
In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, cash flows and shareholders' equity present fairly, in all material respects, the financial position of Aztar Corporation and Subsidiaries (the "Company") at January 3, 2002 and December 28, 2000, and the results of their operations and their cash flows for each of the three years in the period ended January 3, 2002 in conformity with accounting principles generally accepted in the United States of America.  These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits.  We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP
Phoenix, Arizona
February 4, 2002,
except for notes
3, 7, and 18, as
to which the date
is February 28,
2002

F-2



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AZTAR CORPORATION AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(in thousands, except share data)

|                                                                                                                                                                     |                                                   |                                                  | January 3, 2002 | December 28,2000
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------- | ------------------------------------------------ | --------------- | ----------------
|Assets
Current assets:
  Cash and cash equivalents
  Accounts receivable, net
  Inventories
  Prepaid expenses
  Deferred income taxes, net
    Total current assets | $   92,122 
22,158 
7,752 
10,464 16,934 
149,430 | $   48,080 
21,769 
8,446 
9,987 18,938 
107,220
|Investments in and advances to unconsolidated 
  partnership
Other investments                                                                                       | 6,414 
23,544                                     | 7,007 
21,523                                   
|Property and equipment:
  Buildings, riverboats and equipment, net
  Land
  Construction in progress
  Leased under capital leases, net                              | 716,758 
104,957 
22,661 662 
845,038             | 727,164 
104,957 
6,090 1,390 
839,601          
|Deferred charges and other assets                                                                                                                                    | 36,530 
$1,060,956 
==========                    | 36,345 
$1,011,696 
==========                  

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

F-3



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AZTAR CORPORATION AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS (continued)(in thousands, except share data)



|                                                                                                                                                                                                                                                                                                        |                                                                      |                                                                    | January 3, 2002 | December 28,2000
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------- | ------------------------------------------------------------------ | --------------- | ----------------
|Liabilities and Shareholders¢
 Equity
Current liabilities:
  Accounts payable and accruals
  Accrued payroll and employee benefits
  Accrued interest payable
  Income taxes payable
  Current portion of long-term debt
  Current portion of other long-term liabilities
    Total current liabilities | $   61,144 
30,450 
9,505 
2,131 
1,428 1,498 
106,156               | $   53,356 
27,377 
5,470 
4,764 
1,608 1,544 
94,119             
|Long-term debt
Other long-term liabilities
Deferred income taxes
Contingencies and commitments
Series B ESOP convertible preferred stock
  (redemption value $10,607 and $11,905)                                                                                                                       | 458,659 
20,495 
15,846 
5,959                                       | 463,011 
20,307 
5,153 
6,400                                     
|Shareholders¢
 equity:
  Common stock, $.01 par value (36,644,767 and
    38,696,672 shares outstanding)
  Paid-in capital
  Retained earnings
  Accumulated other comprehensive loss
  Less: Treasury stock
    Total shareholders' equity                                                             | 517 
431,455 
173,409 
(353)(151,187)453,841 
$1,060,956 
========== | 515 
428,537 
116,194 
-- (122,540)422,706 
$1,011,696 
==========

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

F-4



---





AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONSFor the Years Ended January 3, 2002, December 28, 2000 and December 30, 1999(in thousands, except per share data)

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 2001                                                                                                                                                                                                                           | 2000                                                                                                                                                                                                                            | 1999                                                                                                                                                                                                                               
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|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
  Depreciation and amortization
Operating income
  Interest income
  Interest expense
  Equity in unconsolidated partnership's loss
Income before income taxes and
  extraordinary items
  Income taxes
Income before extraordinary items
  Extraordinary items
Net income | $678,157 
75,804 
56,916 38,586 
849,463 
286,523 
39,348 
55,270 
32,885 
84,559 
78,669 
17,311 
24,632 
4,113 
24,297 
18,635 51,813 718,055 
131,408 
1,559 
(39,182)(3,702)
90,083 (32,074)
58,009 -- 
$ 58,009 
======== | $677,121 
72,829 
57,033 41,105 
848,088 
296,943 
38,128 
56,868 
33,129 
90,855 
77,150 
15,132 
25,282 
4,035 
23,914 
17,253 53,924 732,613 
115,475 
1,348 
 (41,913)(4,215)
70,695 (17,578)
53,117 -- 
$ 53,117 
======== | $646,918 
65,268 
53,283 34,845 
800,314 
286,934 
35,361 
54,760 
30,258 
86,597 
74,102 
14,124 
26,129 
7,753 
23,672 
17,122 53,908 710,720 
89,594 
1,481 
 (52,763)(3,961)
34,351 (12,222)
22,129 (15,740)
$  6,389 
========

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

F-5



---





AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (continued)For the Years Ended January 3, 2002, December 28, 2000 and December 30, 1999(in thousands, except per share data)

|                                                                                                                                                                                                                                                                                                                                              | 2001                                                                             | 2000                                                                             | 1999                                                                                
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------
|Earnings per common share:
  Income before extraordinary items
  Extraordinary items
  Net income
Earnings per common share assuming dilution:
  Income before extraordinary items
  Extraordinary items
  Net income
Weighted-average common shares applicable to:
  Earnings per common share
  Earnings per common share assuming dilution | $   1.53 -- 
$   1.53 
======== 
$   1.48 -- 
$   1.48 
======== 
37,385 
38,963 | $   1.28 -- 
$   1.28 
======== 
$   1.23 -- 
$   1.23 
======== 
40,862 
42,577 | $    .48 (.35)
$    .13 
======== 
$    .46 (.34)
$    .12 
======== 
44,598 
46,197

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

F-6



---





AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWSFor the Years Ended January 3, 2002, December 28, 2000 and December 30, 1999(in thousands)



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 2001                                                                                                                              | 2000                                                                                                                           | 1999                                                                                                                               
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------------------------
|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
    Distribution in excess of equity in
      income of partnership
    Deferred income taxes
    Change in assets and liabilities:
      (Increase) decrease in accounts 
        receivable
      (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
Payments received on notes receivable
Reduction in other investments
Purchases of property and equipment
Additions to other long-term assets
  Net cash provided by (used in)
    investing activities | $  58,009 
53,121 
4,113 
-- 
1,301 
(968)
593 
12,697 
(4,502)
-- 
323 
13,263 519 138,469 
-- 
1,857 
(52,006)(7,273)$ (57,422) | $  53,117 
55,117 
4,035 
-- 
1,638 
(871)
652 
(2,493)
300 
881 
807 
9,896 552 123,631 
-- 
2,508 
(24,008)(8,999)$ (30,499) | $   6,389 
55,744 
7,753 
24,216 
953 
(888)
778 
(970)
353 
(881)
(3,435)
(9,714)369 80,667 
1,701 
958 
(29,414)(7,257)$ (34,012)



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

F-7



---





AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)For the Years Ended January 3, 2002, December 28, 2000 and December 30, 1999(in thousands)

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 2001                                                                                                                                               | 2000                                                                                                                                               | 1999                                                                                                                                                        
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|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 year
    Cash and cash equivalents at end 
      of year
Supplemental Cash Flow Disclosures
Summary of non-cash investing and
  financing activities:
    Capital lease obligations incurred
      for property and equipment
    Exchange of common stock in lieu of
      cash payments in connection with
      the exercise of stock options
    Other long-term liabilities reduced for
      deferred charges and other assets
Cash flow during the year for the following:
    Interest paid, net of amount capitalized
    Income taxes paid | $ 305,100 
2,242 
(309,764)
-- 
(26)
(4,677)
(28,634)
(499)(747)(37,005)
44,042 48,080 
$  92,122 
========= 
$      79 
13 
50 
$  33,838 
21,155 | $ 273,100 
4,929 
(309,521)
-- 
(1,777)
-- 
(64,458)
(541)(964)(99,232)
(6,100)54,180 
$  48,080 
========= 
$      -- 
737 
-- 
$  40,449 
12,840 | $ 689,600 
3,107 
(680,477)
(15,551)
(1,277)
(6,626)
(38,319)
(596)(936)(51,075)
(4,420)58,600 
$  54,180 
========= 
$      16 
1,900 
-- 
$  58,338 
5,503



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

F-8



---



AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITYFor the Years Ended January 3, 2002, December 28, 2000 and December 30, 1999(in thousands)

|                                                                                                                                                                                                                                                                                            | CommonStock   | Paid-inCapital               | RetainedEarnings               | Accumulated 
Other    
ComprehensiveLoss | Treasury Stock                      | Total                                            
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------- | ---------------------------- | ------------------------------ | ---------------------------------------- | ----------------------------------- | -------------------------------------------------
|Balance,
  December 31, 1998
  Net income
  Stock options
    exercised
  Tax benefit from
    stock options
    exercised
  Preferred stock
    dividend and
    losses on
    redemption,
    net of income
    tax benefit
  Repurchase of 
   common stock
Balance,
  December 30, 1999 | $  492
14
506 | $412,528
4,993
3,265
420,786 | $ 58,207 
6,389 
(633) 
63,963 | $     --      --                         | $ (17,126)
(4,571)(35,648)
(57,345) | $454,101 
6,389 
436 
3,265 
(633)(35,648)427,910
|Net income
  Stock options
    exercised
  Tax benefit from
    stock options
    exercised
  Preferred stock
    dividend and
    losses on
    redemption
  Repurchase of
   common stock
Balance,
  December 28, 2000                                                                    | 9
$  515      | 6,165
1,586
$428,537         | 53,117 
(886) 
$116,194        | $     --                                 | (945)(64,250)
$(122,540)            | 53,117 
5,229 
1,586 
(886)(64,250)
$422,706     

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

F-9



---



AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (continued)For the Years Ended January 3, 2002, December 28, 2000 and December 30, 1999(in thousands)

|                                                                                                                                                                                                                                                                                                                                                                                     | CommonStock            | Paid-inCapital                       | Retained Earnings                           | Accumulated 
Other    
ComprehensiveLoss | Treasury Stock                               | Total                                                                      
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------- | ------------------------------------ | ------------------------------------------- | ---------------------------------------- | -------------------------------------------- | ---------------------------------------------------------------------------
|Balance,
  December 28, 2000
  Net income
  Minimum pension
    liability 
    adjustment,
    net of
    income tax
    benefit
    Total
    comprehensive
    income
  Stock options
    exercised
  Tax benefit from
    stock options
    exercised
  Preferred stock
    dividend and
    losses on
    redemption
  Repurchase of
    common stock
Balance,
  January 3, 2002 | $  515
2
$  517
====== | $428,537
2,253
665
$431,455
======== | $116,194 
58,009 
(794) 
$173,409 
======== | $     --  
(353)    
$   (353) 
======== | $(122,540)
(13)(28,634)
$(151,187)
========= | $422,706 
58,009 (353)
57,656 
2,242 
665 
(794)(28,634)
$453,841 
========

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

F-10



---



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES
Basis of Consolidated Statements
Aztar Corporation ("Aztar" or "Company") was incorporated in Delaware in June 1989 to operate the gaming business of Ramada Inc. ("Ramada") after the restructuring of Ramada ("Restructuring").  The Restructuring involved the disposition of Ramada's hotel and restaurant businesses with Ramada's shareholders retaining their interest in the gaming business.  As part of the Restructuring, the gaming business and certain other assets and liabilities of Ramada were transferred to Aztar, and a wholly-owned subsidiary of New World Hotels (U.S.A.), Inc. was merged with Ramada ("Merger").  In the Merger, each share of Ramada common stock was converted into the right to receive $1.00 and one share of Aztar common stock.  
The Company operates casino hotels in Atlantic City, New Jersey and Las Vegas, Nevada, under the Tropicana name and in Laughlin, Nevada, as Ramada Express.  The Company operates casino riverboats in Caruthersville, Missouri and Evansville, Indiana under the Casino Aztar name.  A substantial portion of the Company's consolidated revenues and assets is concentrated at the Atlantic City Tropicana.
The consolidated financial statements include the accounts of Aztar and all of its controlled subsidiaries and partnerships.  All subsidiary companies are wholly owned.  In consolidating, all material intercompany transactions are eliminated.  The Company uses a 52/53 week fiscal year ending on the Thursday nearest December 31, which included 53 weeks in 2001 and 52 weeks in 2000 and 1999.
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.
Recent Accounting Pronouncements
In July 2001, the Financial Accounting Standards Board issued Statement No. 141, "Business Combinations" and Statement No. 142, "Goodwill and Other Intangible Assets."  SFAS 141 is effective as follows: (a) use of the pooling-of-interests method is prohibited for business combinations initiated after June 30, 2001; and (b) the provisions of SFAS 141 also apply to all business combinations accounted for by the purchase method that are completed after June 30, 2001.  There are also transition provisions that apply to business combinations completed before July 1, 2001, that were accounted for by the purchase method.  SFAS 142 is effective for fiscal years beginning after December 15, 2001 and applies to all goodwill and other intangible assets recognized in an entity's statement of financial position at that date, regardless of when those assets were initially recognized.  The Company has determined that at January 3, 2002, it has no purchased goodwill in its balance sheet.  Effective January 4, 2002, the Company will cease amortization of the cost of its initial gaming licenses because it has determined, under the criteria established in SFAS 142, that these assets have an indefinite life.  Amortization expense related to the cost of its initial gaming licenses was $2,700,000 in 2001 and $2,600,000 in both 2000 and 1999.  The Company has performed an impairment test of its initial gaming licenses at January 4, 2002 and has concluded that there was no impairment.

F-11



---



In August 2001, the Financial Accounting Standards Board issued Statement No. 143, "Accounting for Obligations Associated with the Retirement of Long-Lived Assets."  The objectives of SFAS 143 are to establish accounting standards for the recognition and measurement of an asset retirement obligation and its associated asset retirement cost.  SFAS 143 is effective for fiscal years beginning after June 15, 2002.  Based upon a preliminary review, the Company has no asset retirement obligation at January 3, 2002.
In October 2001, the Financial Accounting Standards Board issued Statement No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets."  SFAS 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets, and broadens the presentation of discontinued operations to include more disposal transactions.  SFAS 144 is effective for fiscal years beginning after December 15, 2001 and, generally, is to be applied prospectively.  SFAS 144 has no effect on the consolidated financial statements of the Company at January 3, 2002 or on its consolidated results of operations or cash flows for the periods then ended.
Cash and Cash Equivalents
Highly liquid investments purchased with an original maturity of three months or less are classified as cash equivalents.  These instruments are stated at cost, which approximates fair value because of their short maturity.
Short-term Investments
Short-term investments purchased with an original maturity of over three months but less than one year are stated at cost, which approximates fair value because of their short maturity.  There were no short-term investments at January 3, 2002 or December 28, 2000.
Inventories
Inventories, which consist primarily of food, beverage and operating supplies, are stated at the lower of cost or market value.  Costs are determined using the first-in, first-out method.
Advertising Costs
Costs for advertising are expensed as incurred, except costs for direct-response advertising, which are capitalized and amortized over the period of the related program.  Direct-response advertising costs consist primarily of mailing costs associated with direct-mail programs.  Capitalized advertising costs, included in prepaid expenses, were immaterial at January 3, 2002 and December 28, 2000.  Advertising costs that were expensed during the year were $17,445,000 in 2001, $19,138,000 in 2000 and $20,268,000 in 1999.
Other Investments
The Casino Reinvestment Development Authority ("CRDA") bonds are classified as held-to-maturity securities and are carried at amortized cost less a valuation allowance.

F-12



---



Property and Equipment
Property and equipment are stated at cost.  During construction, the Company capitalizes interest and other direct and indirect development costs.  Interest is capitalized monthly by applying the effective interest rate on certain borrowings to the average balance of expenditures.  The interest that was capitalized during 2001 was $1,326,000 and during 2000 it was $119,000.  There was no interest capitalized during 1999.
Depreciation and amortization are computed by the straight-line method based upon the following useful lives: buildings and improvements, 3-40 years; riverboats, barge, docking facilities and improvements, 3-25 years; furniture and equipment, 3-15 years; and leasehold improvements, shorter of lease term or asset useful life.  Accumulated depreciation and amortization on buildings, riverboats and equipment was $431,239,000 at January 3, 2002 and $388,254,000 at December 28, 2000.
Improvements, renewals and extraordinary repairs that extend the life of the asset are capitalized; other repairs and maintenance are expensed.  The cost and accumulated depreciation applicable to assets retired are removed from the accounts and the gain or loss, if any, on disposition is recognized in income as realized.
Deferred Charges
Debt issuance costs are capitalized as incurred and amortized using the interest method.  Capitalized debt issuance costs, net of accumulated amortization of $3,570,000 and $2,313,000, were $9,979,000 and $6,558,000 at January 3, 2002 and December 28, 2000, respectively.
Costs incurred to obtain initial gaming licenses to operate a casino are capitalized as incurred and amortized evenly over ten years beginning with the commencement of operations; subsequent renewal costs are amortized evenly over the renewal period.  With the adoption of SFAS 142, effective January 4, 2002, the Company will cease amortization of its initial gaming licenses.  The Company has determined, under the criteria established in SFAS 142, that the useful life of the initial gaming licenses is indefinite.  Licensing costs consist primarily of payments or obligations to civic and community organizations, legal and consulting fees, application and selection fees with associated investigative costs and direct internal salaries and related costs of development personnel.  Licensing costs in connection with initial gaming licenses, net of accumulated amortization of $14,987,000 and $12,314,000, were $10,352,000 and $13,075,000 at January 3, 2002 and December 28, 2000, respectively.
Preopening costs directly related to the opening of an operation or major addition to an operation are expensed as incurred.  Preopening costs consist primarily of salaries and wages, marketing, temporary office expenses, professional fees and training costs.
Development costs associated with pursuing opportunities in gaming jurisdictions, as well as in jurisdictions in which gaming has not been approved, are expensed as incurred until a particular opportunity is determined to be viable, generally when the Company has been selected as the operator of a new gaming facility, has applied for a gaming license or has obtained rights to a specific site.  Development costs

F-13



---



incurred subsequent to these criteria being met are capitalized.  Development costs consist of licensing costs and site acquisition costs.  In jurisdictions in which gaming has not been approved, only site acquisition costs are capitalized.  In the event a project is later determined not to be viable or the Company is not licensed to operate a facility at a site, the capitalized costs related to this project or site would be expensed.  At January 3, 2002 and December 28, 2000, the Company had capitalized development costs of $5,990,000 and $7,358,000, respectively.  It is reasonably possible that management's estimate of viability with regard to a development project may change in the near term.
Valuation of Long-Lived Assets
Long-lived assets and certain identifiable intangibles held and used by the Company are reviewed for impairment whenever events or changes in circumstances warrant such a review.  The carrying value of a long-lived or intangible asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value.  In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the asset.  Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair values are reduced for the cost of disposition.  Effective January 4, 2002, SFAS 142 requires an annual impairment review based on fair value for all intangible assets with indefinite lives.
Equity Instruments
The fair-value-based method of accounting is used for equity instruments issued to nonemployees for goods or services.  The intrinsic-value-based method of accounting is used for stock-based employee compensation plans.
Revenue Recognition
Casino revenue consists of gaming win net of losses.  Other revenue consists of revenue from many various sources such as entertainment, retail outlets including gift shops, telephone, commissions and surcharges, hotel services and admissions to our riverboats.  These revenues are recognized as earned.  Revenues exclude the retail value of complimentary food and beverage, accommodations and other goods and services provided to customers.  The estimated costs of providing such complimentaries have been classified as casino expenses through interdepartmental allocations as follows (in thousands):



|                              | 2001                                       | 2000                                       | 1999                                      
|----------------------------- | ------------------------------------------ | ------------------------------------------ | ------------------------------------------
|Rooms
Food and beverage
Other | $ 19,452 
47,816 3,428 
$ 70,696 
======== | $ 19,688 
52,148 3,299 
$ 75,135 
======== | $ 20,482 
50,143 3,404 
$ 74,029 
========

Income Taxes
Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or income tax returns.  Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and

F-14



---



liabilities using enacted rates expected to apply to taxable income in the years in which those differences are expected to be recovered or settled.  The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
Earnings per Share
Earnings per common share excludes dilution and is computed by dividing income applicable to common shareholders by the weighted-average number of common shares outstanding.  Earnings 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.
NOTE 2.  CONCENTRATIONS OF CREDIT RISK
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, long-term investments and trade accounts receivable.  The Company places its cash and temporary cash investments with high-credit-quality financial institutions.  At times, such investments may be in excess of the FDIC and SIPC insurance limits.
The Atlantic City Tropicana has a concentration of credit risk in the northeast region of the U.S.  The receivables at the Nevada operations are concentrated in California and the southwest region of the U.S.  As a general policy, the Company does not require collateral for these receivables.  At January 3, 2002 and December 28, 2000, the net receivables at Tropicana Atlantic City were $15,533,000 and $15,765,000, respectively, and the net receivables at Tropicana Las Vegas and Ramada Express combined were $5,004,000 and $4,687,000, respectively. 
An allowance for doubtful accounts is maintained at a level considered adequate to provide for possible future losses.  At January 3, 2002 and December 28, 2000, the allowance for doubtful accounts was $20,578,000 and $22,655,000, respectively.
NOTE 3.  INVESTMENTS IN AND ADVANCES TO UNCONSOLIDATED PARTNERSHIP
The Company's investment in unconsolidated partnership is a noncontrolling partnership interest of 50% in Tropicana Enterprises, a Nevada general partnership that owns the real property that the Company leases in the operation of the Las Vegas Tropicana.  The Company uses the equity method of accounting for this investment and in connection with the lease expensed rents of $17,240,000 in 2001, $17,784,000 in 2000 and $17,068,000 in 1999, of which 50% was eliminated in consolidation.  Distributions received from Tropicana Enterprises during the year were $5,511,000 in 2001, $5,333,000 in 2000 and $5,360,000 in 1999.  The Company has an option to purchase the 50% partnership interest that it does not own.  The option gives the Company an unconditional right to purchase the partnership interest for $120,000,000.  On January 29, 2002, the Company exercised this option and on February 28, 2002, the Company completed the purchase.

F-15



---



Summarized balance sheet information and operating results for the unconsolidated partnership are as follows (in thousands):



|                                                                                  | January 3, 2002                   | December 28,2000                  | 
|--------------------------------------------------------------------------------- | --------------------------------- | --------------------------------- | 
|Income producing properties
Other assets
Bank term loan payable
Other liabilities | $ 43,786  
8,312  
49,604  
1,507 | $ 46,561  
9,484  
53,690  
1,280 | 



|                                                                         | 2001                                                    | 2000                                                    | 1999                                                   
|------------------------------------------------------------------------ | ------------------------------------------------------- | ------------------------------------------------------- | -------------------------------------------------------
|Revenues
Operating expenses
Operating income
Interest expense
Net income | $ 17,240  (2,795) 
14,445  (3,512) 
$ 10,933  
======== | $ 17,792  (2,743) 
15,049  (4,590) 
$ 10,459  
======== | $ 17,126  (2,743) 
14,383  (4,124) 
$ 10,259  
========

The Company's share of the above operating results, after intercompany eliminations, is as follows (in thousands):



|                                              | 2001      | 2000      | 1999     
|--------------------------------------------- | --------- | --------- | ---------
|Equity in unconsolidated
  partnership's loss | $ (3,702) | $ (4,215) | $ (3,961)

NOTE 4.  OTHER INVESTMENTS
Other investments consist of the following (in thousands):



|                                                                                                                                                                                                                                                                          | January 3, 2002                               | December 28,2000                              | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------- | --------------------------------------------- | 
|CRDA deposits, net of a valuation 
  allowance of $6,962 and $5,938
CRDA bonds, net of a valuation 
  allowance of $1,450 and $1,150 
  and an unamortized discount of
  $2,763  and $2,764
CRDA other investments, net of a
  valuation allowance of $1,080 and
  $1,103 | $ 16,110  
4,867  2,567  
$ 23,544  
======== | $ 13,806  
5,096  2,621  
$ 21,523  
======== | 

The Company has a New Jersey investment obligation based upon its New Jersey casino revenues.  The Company may satisfy this investment obligation by investing in qualified eligible direct investments, by making qualified contributions or by depositing funds with the CRDA.  Deposits with the CRDA bear interest at two-thirds

F-16



---



of market rates resulting in a fair value lower than cost.  These deposits, under certain circumstances, may be donated to the CRDA in exchange for credits against future investment obligations.  If not used for other purposes, the CRDA deposits are used to invest in bonds issued by the CRDA as they become available that also bear interest at two-thirds of market rates.  The CRDA bonds have various contractual maturities that range from 13 to 46 years.  Actual maturities may differ from contractual maturities because of prepayment rights.
The Company has an agreement with the CRDA for approximately $24,500,000 in funding in connection with a completed expansion project at the Atlantic City Tropicana.  The Company receives funds from the CRDA to the extent that the Company has available funds on deposit with the CRDA that qualify for this funding.  As of January 3, 2002, the Company has received approximately $23,000,000 in funding from the CRDA under this agreement.  At January 3, 2002 and December 28, 2000, the Company had approximately $250,000 and $200,000, respectively, in available deposits with the CRDA that qualified and accordingly reclassified these amounts to accounts receivable.
NOTE 5.  LAS VEGAS TROPICANA DEVELOPMENT
The Company is conducting feasibility studies to master-plan a potential development of the Las Vegas Tropicana site.  The master plan envisions the creation of two separate but essentially equal and inter-connected sites.  The north site would be developed by the Company.  The south site would be held for future Company development, joint venture development, or sale for development by another party.
For development of a potential project on the north site, the Company plans to complete a detailed design development effort with construction documents and estimated construction costs by the summer of 2003, at which time the Company will decide whether or not to proceed.  The amount and timing of any future expenditure, and the extent of any impact on existing operations, will depend on the nature and timing of the development we ultimately undertake, if any.  If we decide to abandon any facilities in the development process, we would have to conduct a review for impairment and review their useful lives with a possible adjustment to depreciation and amortization expense.  These reviews could have a material effect on our consolidated results of operations.
The net book value of the property and equipment used in the operation of the Las Vegas Tropicana was $23,309,000 at January 3, 2002.  The net book value of accounts receivable, inventories and prepaid expenses at the Las Vegas Tropicana was $9,605,000 at January 3, 2002.  It is reasonably possible that the carrying value of some or all of these assets may change in the near term.

F-17



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NOTE 6.  LONG-TERM DEBT
Long-term debt consists of the following (in thousands):

|                                                                                                                                                                                                                                                                                                                                                                                                         | January 3, 2002                                                                 | December 28,2000                                                               
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------- | -------------------------------------------------------------------------------
|8 7/8% Senior Subordinated Notes Due 2007;
  redeemable at a defined premium
9% Senior Subordinated Notes Due 2011;
  redeemable at a defined premium
Revolving credit facility; floating rate;
  matures June 30, 2005
Term loan; floating rate, 5.2% at 
  January 3, 2002; matures June 30, 2005
Other notes payable; 14.6%; maturities to 2002
Obligations under capital leases
Less current portion | $ 235,000 
175,000 
-- 
48,750 
225 1,112 
460,087 (1,428)
$ 458,659 
========= | $ 235,000 
-- 
178,000 
49,375 
422 1,822 
464,619 (1,608)
$ 463,011 
=========

Maturities of long-term debt for the five years subsequent to January 3, 2002 are as follows (in thousands):

| | 2002
2003
2004
2005
2006 | $  1,428
721
12,269
35,667
2 | 
| | ------------------------ | ---------------------------- | 

On July 27, 2001, the Company issued $175,000,000 principal amount of 9% Senior Subordinated Notes due August 15, 2011 ("9% Notes").  Interest is payable on February 15 and August 15, beginning on February 15, 2002.  The net proceeds from the issuance of the 9% Notes, after payment of the fees and expenses of the issuance, were approximately $171,200,000.  The balance of the net proceeds of the 9% Notes was used to repay the outstanding borrowings under the revolving credit facility ("Revolver") and for general corporate purposes.
At any time prior to August 15, 2006, the 9% 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) 104.5% of the principal amount and (ii) all required interest payments through August 15, 2006, 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 August 15, 2006, the 9% Notes are redeemable at the option of the Company, in whole or in part, at prices from 104.5% of the principal amount plus interest declining to 100% of the principal amount plus interest beginning August 15, 2009.
Interest on the 8 7/8% Senior Subordinated Notes due May 15, 2007 ("8 7/8% Notes") is payable semiannually on May 15 and November 15.  At any time prior to May 15, 2003, the 8 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

F-18



---



of (1) 1% of the principal amount or (2) the excess of (A) the sum of the present values of (i) 104.438% of the principal amount and (ii) all required interest payments through May 15, 2003, 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 May 15, 2003, the 8 7/8% Notes are redeemable at the option of the Company, in whole or in part, at prices from 104.438% of the principal amount plus interest declining to 100% of the principal amount plus interest beginning May 15, 2006. 
The 8 7/8% Notes and 9% Notes, ranked pari passu, 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 8 7/8% Notes and 9% Notes would have the right to require repurchase of the respective notes at 101% of the principal amount plus accrued and unpaid interest.  Certain covenants in the 8 7/8% Notes and 9% Notes limit the ability of the Company to incur indebtedness, make certain payments or engage in mergers, consolidations or sales of assets.  
On June 29, 2001, the Company amended its Revolver to, among other things, extend the maturity to June 30, 2005 from June 30, 2003.  In addition, the amendment revised the reduction rate so that the maximum amount available under the Revolver decreases by $12,000,000 on March 31, 2004, and quarterly thereafter.  The amount available under this facility at January 3, 2002 was $264,000,000.  Interest is computed on the outstanding principal balance of the Revolver based upon, at the Company's option, a one-, two-, three- or six-month Eurodollar rate plus a margin ranging from 1.25% to 2.50%, or the prime rate plus a margin ranging from zero to 1.25%.  The applicable margin is dependent upon the Company's outstanding indebtedness and operating cash flow. As of January 3, 2002, the margin was at 0.75% less than the highest level.  Interest computed based upon the Eurodollar rate is payable quarterly or on the last day of the applicable Eurodollar interest
period, if earlier.  Interest computed based upon the prime rate is payable quarterly.  The Company incurs a commitment fee ranging from 0.225% to 0.4375% per annum on the unused portion of the Revolver.
The Term loan ("Term Loan") calls for quarterly principal payments of $125,000 on a calendar basis through June 30, 2004, and $11,875,000 beginning on September 30, 2004 through maturity.  Interest is computed on the Term Loan based upon, at the Company's option, a one-, two-, three- or six-month Eurodollar rate plus a margin of 2.5%.  Interest is payable quarterly or on the last day of the applicable Eurodollar interest period, if earlier.
The collateral securing the Revolver and the Term Loan, shared on a pari passu basis, consists of all the property of Tropicana Atlantic City, Ramada Express and the casino riverboat operations and, with certain exceptions, the stock of the Company's subsidiaries.  The Revolver imposes various restrictions on the Company, including limitations on its ability to incur additional debt, commit funds to capital expenditures and investments, merge or sell assets.  The Revolver also prohibits dividends on the Company's common stock (other than those payable in common stock) and repurchases of the Company's common stock in excess of $250,000,000, increased from $150,000,000 effective June 29, 2001, with limited exceptions.  In addition, the Revolver contains quarterly financial tests, including a minimum requirement for operating cash flow, a minimum ratio of fixed charge coverage and maximum ratios of total debt and senior debt to operating cash flow.  The restrictions imposed on the Company by the Term Loan are similar to those imposed by the Company's senior subordinated debt.

F-19



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NOTE 7.  LEASE OBLIGATIONS
The Company is a lessee under a number of noncancelable lease agreements involving land, buildings, leasehold improvements and equipment, some of which provide for contingent rentals based on revenues, the consumer price index and/or interest rate fluctuations.  The leases extend for various periods up to 9 years and generally provide for the payment of executory costs (taxes, insurance and maintenance) by the Company.  Certain of these leases have provisions for renewal options ranging from 1 to 15 years, primarily under similar terms, and/or options to purchase at various dates.
Properties leased under capital leases are as follows (in thousands):



|                                                      | January 3, 2002                        | December 28,2000                       
|----------------------------------------------------- | -------------------------------------- | ---------------------------------------
|Furniture and equipment
Less accumulated amortization | $  5,138  (4,476) 
$    662  
======== | $ 16,635  (15,245) 
$  1,390  
========

Amortization of furniture and equipment leased under capital leases, computed on a straight-line basis, was $807,000 in 2001, $2,397,000 in 2000 and $3,237,000 in 1999.
Minimum future lease obligations on long-term, noncancelable leases in effect at January 3, 2002 are as follows (in thousands):



|Year                                                                                                                      | Capital                                                               | Operating                                                      
|------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------- | ---------------------------------------------------------------
|2002
2003
2004
2005
2006
Thereafter
Amount representing interest
Net present value
Less current portion
Long-term portion | $   780 
252 
158 
44 
2 -- 
1,236 (124)
1,112 (703)
$   409 
======= | $ 10,407 
9,000 
8,405 
8,241 
7,162 29,247 
$ 72,462 
========

The above net present value is computed based on specific interest rates determined at the inception of the leases.  On January 29, 2002, the Company exercised the option it has to purchase the 50% partnership interest in Tropicana Enterprises that it does not own and on February 28, 2002, the Company completed the purchase. This purchase eliminates the minimum future operating lease obligations after February 28, 2002, associated with the Tropicana Enterprises lease.  At January 3, 2002, the full year amount of this obligation was $7,162,000 per year through 2006 and a total amount of $29,247,000 due thereafter.

F-20



---



Rent expense is detailed as follows (in thousands):



|                                   | 2001                               | 2000                               | 1999                              
|---------------------------------- | ---------------------------------- | ---------------------------------- | ----------------------------------
|Minimum rentals
Contingent rentals | $ 13,005 5,630 
$ 18,635 
======== | $ 13,343 3,910 
$ 17,253 
======== | $ 13,946 3,176 
$ 17,122 
========

NOTE 8.  OTHER LONG-TERM LIABILITIES
Other long-term liabilities consist of the following (in thousands):



|                                                                                                                                                                                                                         | January 3, 2002                                                   | December 28,2000                                                 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------------------------------------- | -----------------------------------------------------------------
|Deferred compensation and 
  retirement plans
Accrued rent expense
Obligation to City of Evansville
  and other civic and community
  organizations
Las Vegas Boulevard
  beautification assessment
Less current portion | $ 13,919  
7,699  
--  375  
21,993  (1,498) 
$ 20,495  
======== | $ 12,732  
8,668  
50  401  
21,851  (1,544) 
$ 20,307  
========

NOTE 9.  REDEEMABLE PREFERRED STOCK
A series of preferred stock consisting of 100,000 shares has been designated Series B ESOP Convertible Preferred Stock ("ESOP Stock") and those shares were issued on December 20, 1989, to the Company's Employee Stock Ownership Plan ("ESOP").  The ESOP purchased the shares for $10,000,000 with funds borrowed from a subsidiary of the Company.  These funds were repayable in even semiannual payments of principal and interest at 13 1/2% per year over a 10-year term, ending on September 15, 1999. During 2001, 2000 and 1999, respectively, 4,411 shares, 6,022 shares and 8,716 shares were redeemed primarily in connection with employee terminations. At January 3, 2002, cumulative redemptions totaled 40,408 shares.  The ESOP Stock has an annual dividend rate of $8.00 per share per annum payable semiannually in arrears.  These shares have no voting rights except under certain limited, specified conditions.  Shares may be converted into common stock at $9.46 per share of common stock and have a liquidation preference of $100 per share plus accrued and unpaid dividends. 
In 2001, the ESOP was merged into the Aztar Corporation 401(k) Plan ("401(k) Plan") and the assets of the ESOP were subsequently transferred to the 401(k) Plan.  Beginning January 1, 2001, the ESOP Stock was held by the Aztar Corporation 401(k) Plan Stock and Insurance Trust.
The shares that have been allocated to the participant's accounts and have vested are redeemable at the higher of $100 per share plus accrued and unpaid dividends, appraised value or conversion value, at the election of the participant upon becoming eligible to redeem ESOP Stock.  The excess of the redemption value of the ESOP Stock over the carrying value is charged to retained earnings upon redemption. In order for an ESOP Stock redemption to occur, a request for distribution is made

F-21



---



by the participant or beneficiary.  Those participants or beneficiaries who are eligible to redeem their ESOP Stock are permitted to leave their ESOP Stock in their account until an election for redemption is made or until federal statutes require a form of distribution.  ESOP Stock redemptions are uncertain due to the redemption being dependent upon an election made by the participant or beneficiary.
In the event of default in the payment of dividends on the ESOP Stock for six consecutive semiannual periods, each outstanding share would have one vote per share of common stock into which the preferred stock is convertible.
NOTE 10.  CAPITAL STOCK
The Company is authorized to issue 10,000,000 shares of preferred stock, par value $.01 per share, issuable in series as the Board of Directors may designate.  Approximately 100,000 shares of preferred stock have been designated Series A Junior Participating Preferred Stock but none have been issued. 
The Company is authorized to issue 100,000,000 shares of common stock with a par value of $.01 per share.  Shares issued were 51,748,464 at January 3, 2002 and 51,464,794 at December 28, 2000.  Common stock outstanding was net of 15,103,697 and 12,768,122 treasury shares at January 3, 2002 and December 28, 2000, respectively.  One preferred stock purchase right ("Right") is attached to each share of the Company's common stock.  Each Right will entitle the holder, subject to the occurrence of certain events, to purchase one one-thousandth of a share of Series A Junior Participating Preferred Stock at a price of $50.00 per one one-thousandth of a share, subject to adjustment. The Rights will expire in December 2009 if not earlier extended or redeemed by the Company at $.01 per Right.
In accordance with the Merger agreement, 666,572 shares of common stock that had not been claimed by the shareholders of Ramada were returned to the Company in December 1990 to be held as treasury shares until claimed.  During 2001, 2000 and 1999, respectively, 206, 500 and 12,701 shares were claimed and in September 1999, 314,640 unclaimed shares were escheated.  No unclaimed shares were held by the Company as of January 3, 2002.
In 1999, the Board of Directors authorized the Company to make discretionary repurchases of up to 8,000,000 shares of its common stock.  In 2000, the Board of Directors authorized the Company to make discretionary repurchases of up to 3,000,000 additional shares of its common stock.  There were 2,334,700, 4,973,000 and 3,692,300 shares repurchased under this program in 2001, 2000 and 1999, respectively.  The share repurchase program was completed in October 2001.  All purchases under the Company's stock repurchase program were made from time to time in the open market or privately negotiated transactions, depending upon market prices and other business factors.  Repurchased shares are stated at cost and held as treasury shares to be used for general corporate purposes.
The Company accepted 1,081, 95,543 and 428,686 shares of its common stock in 2001, 2000 and 1999, respectively, from employees and nonemployee Directors in lieu of cash due to the Company in connection with the exercise of stock options.  Such shares of common stock are stated at cost and held as treasury shares to be used for general corporate purposes.

F-22



---



At January 3, 2002, December 28, 2000 and December 30, 1999, common shares reserved for future grants of stock options under the Company's stock option plans were 1,427,331, 1,690,999 and 2,332,000, respectively.  At January 3, 2002, common shares reserved for the conversion of the ESOP Stock were 630,000 and shares of preferred stock reserved for exercise of the Rights were 50,000.
NOTE 11.  STOCK OPTIONS

The Company has elected to follow Accounting Principles Board Opinion No. 25 entitled "Accounting for Stock Issued to Employees" ("APB 25") and related Interpretations in accounting for its stock-based employee compensation arrangements because the alternative fair-value-based method of accounting provided for under Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123 entitled "Accounting for Stock-Based Compensation" ("SFAS 123") requires use of option valuation models that were not developed for use in valuing employee stock options. 
Under APB 25, because the exercise price of the Company's stock options equals the market price of the underlying stock on the date of grant, no compensation expense is recognized.
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.  Options granted under the 1989 Plan have 10-year terms and vest and become exercisable at the rate of 1/3 per year on each of the first three anniversary dates of the grant, subject to continued employment on those dates.  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.  Options granted under the 1999 Plan have 10-year terms and vest and become exercisable at the rate of 1/3 per year on each of the first three anniversary dates of the grant, subject to continued employment on those dates.  The Company's 1990 Nonemployee Directors Stock Option Plan ("1990 Plan") expired in July 2000.  The 1990 Plan had authorized the grant of up to 250,000 shares of the Company's common stock pursuant to options granted to nonemployee Directors of the Company.  Options granted under the 1990 Plan have 10-year terms and vested and became exercisable on the date of grant.  During 2001, the Company's shareholders approved the 2000 Nonemployee Directors Stock Option Plan ("2000 Plan").  The 2000 Plan has authorized the grant of up to 250,000 shares of the Company's common stock pursuant to options granted to nonemployee Directors of the Company.  Options granted under the 2000 Plan have 10-year terms.  The 2000 Plan provides for the granting of options that vest and become exercisable on the date of grant.  The 2000 Plan has been modified to also provide for the granting of options whereby a portion vests and becomes exercisable on the date of grant and the remainder vests and becomes exercisable evenly over varying terms depending on the date of the grant, subject to being a Company Director on those dates.
Pro forma information regarding net income and earnings per share is required by SFAS 123, and has been determined as if the Company had accounted for its stock option plans under the fair-value-based method of that Statement.  The fair value

F-23



---



for these options was estimated at the date of grant or modification using a Black-Scholes option pricing model with the following weighted-average assumptions: risk-free interest rate of 4.8% in 2001, 6.7% in 2000 and 5.7% in 1999, no dividend in 2001, 2000 or 1999, volatility factor of the expected market price of the Company's common stock of .47 in 2001 and 2000 and .52 in 1999, and an expected life of the option of 5.1 years in 2001 and 2000 and 5.0 years in 1999. 
The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options which have no vesting or trading restrictions and are fully transferable.  In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility.  Because the Company's employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its stock options.

For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the options' vesting period.  The pro forma information is as follows (in thousands except for earnings per share information):



|                                                                                                                                     | 2001                         | 2000                         | 1999                       
|------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------- | ---------------------------- | ---------------------------
|Pro forma net income
Pro forma earnings per share:
  Net income per common share
  Net income per common share
    assuming dilution | $ 55,002 
$   1.45 
$   1.41 | $ 50,408 
$   1.21 
$   1.17 | $ 4,789  
$   .09  
$   .09

A summary of the Company's stock option activity and related information is as follows (in thousands of shares):

|                                                                                                                                                                                                         | 2001                                                           | 2000                                                         | 1999                                                          
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------- | ------------------------------------------------------------ | --------------------------------------------------------------
|                                                                                                                                                                                                         | Shares
Under Option                                            | Weighted-
Average  
Exercise Price                           | Shares
Under Option                                           
|Beginning balance
 outstanding
   Granted
   Exercised
   Forfeited
   Expired
Ending balance
 outstanding
Exercisable at
 end of year
Weighted-average
 fair value of
 options granted
 during the year | 3,955 
542 
(284)
(28)-- 
4,185 
====== 
2,719 
====== 
$ 6.28 | $ 8.18  
$13.21  
$ 7.95  
$ 9.34  
$   --  
$ 8.84  
$ 7.70 | 4,222 
636 
(820)
(83)-- 
3,955 
====== 
2,060 
====== 
$ 5.80



F-24



---



The following table summarizes additional information about the Company's stock options (in thousands of shares):

|                                                                                                                                                                                                                                                                                     | Options Outstanding                                                                                          | Options Exercisable                                                                                                                                                                            
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Range ofExercise Prices
 January 3, 2002
 $ 4.06 to $ 5.50
 $ 6.50 to $ 7.75
 $ 9.13 to $ 9.81
 $11.00 to $14.75
 December 28, 2000
 $ 4.06 to $ 5.50
 $ 6.50 to $ 7.75
 $ 9.13 to $ 9.81
 $11.00 to $14.75
 December 30, 1999
 $ 4.06 to $ 5.25
 $ 5.50 to $ 7.75
 $ 9.13 to $11.00 | Shares
Under Option
443
1,874
8031,065
4,185
======
462
2,065
878550
3,955
======
575
2,739908
 4,222
====== | Weighted-  
Average    
Remaining  
ContractualLife
5.0 years
6.1 years
7.6 years
8.9 years
7.0 years
6.1 years
7.2 years
8.6 years
9.4 years
7.6 years
7.2 years
7.3 years
9.1 years
7.7 years



F-25



---



NOTE 12.  BENEFIT PLANS
The Company has nonqualified defined benefit pension plans and a deferred compensation plan.  These plans are unfunded.  The following table shows a reconciliation of the changes in the plans' benefit obligation for the years 2001 and 2000 and a reconciliation of the funded status with amounts recognized in the Consolidated Balance Sheets as of January 3, 2002 and December 28, 2000 (in thousands):

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Defined Benefit Plans                                                                                                                                                                                               | Deferred Compensation Plan                                                                          
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 2001                                                                                                                                                                                                                | 2000                                                                                                
|Projected benefit 
  obligation at 
  beginning of year
Service cost
Interest cost
Actuarial (gain)loss
Benefits paid
Projected benefit
  obligation at end 
  of year
Plan assets
Funded status
Unrecognized actuarial
  (gain)loss
Unrecognized prior
  service cost
Net amount recognized
Amounts recognized in the
  Consolidated Balance 
  Sheets consist of:
  Accrued benefit liability
  Accumulated other 
    comprehensive loss (a)
Net amount recognized | $ 8,050 
-- 
680 
1,674 (271)10,133 -- 
(10,133)
2,374 340 
$(7,419)
======= 
$(7,962)543 
$(7,419)
=======                                                                                                         | $ 7,127 
-- 
596 
598 (271)8,050 -- 
(8,050)
645 490 
$(6,915)
======= 
$(6,915)-- 
$(6,915)
=======
|(a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | In the Consolidated Statements of Shareholders' Equity, accumulated other comprehensive loss relating to a minimum pension liability adjustment for the year 2001 is reported net of an income tax benefit of $190.



F-26



---



The components of benefit plan expense are as follows (in thousands):

|                                                                                                                                                               | Defined Benefit Plans                     | Deferred Compensation Plan              
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------- | ----------------------------------------
|                                                                                                                                                               | 2001                                      | 2000                                    
|Service cost
Interest cost
Amortization of prior
  service cost
Recognized net actuarial
  (gain)loss
Cash surrender value
  increase net of
  premium expense | $   -- 
680 
150 
(55)-- 
$  775 
======= | $   -- 
596 
150 
21 -- 
$  767 
=======

The assumptions used in the measurement of the Company's benefit obligation are as follows:

|                                              | Defined Benefit Plans | Deferred Compensation Plan
|--------------------------------------------- | --------------------- | --------------------------
|                                              | 2001                  | 2000                      
|Discount rate
Rate of compensation
  increase | 7.25%
5.00%           | 8.50%
5.00%               

The Company has a defined contribution plan that covers substantially all employees who are not covered by a collective bargaining unit.  The plan allows employees, at their discretion, to make contributions of their before-tax earnings to the plan up to an annual maximum amount.  The Company matches 50% of the employee contributions that are based on up to 6% in 2001 and up to 4% in 2000 and 1999 of an employee's before-tax earnings.  Compensation expense with regard to Company matching contributions was $2,342,000, $1,534,000 and $1,500,000 in 2001, 2000 and 1999, respectively.  The Company contributed $4,039,000, $3,936,000 and $2,913,000 in 2001, 2000 and 1999, respectively, to trusteed pension plans under various collective bargaining agreements.
The Company's ESOP covered substantially all nonunion employees.  The Company made contributions to the ESOP so that, after the dividends were paid on the Company's ESOP Stock, the ESOP could make its debt service payments to the Company.  The ESOP debt was fully paid in 1999.  The Company made no contributions to the ESOP in 2000.  Contributions paid to the ESOP in 1999 were $1,279,000.  Cash dividends paid to the ESOP were $541,000 in 2000 and $596,000 in 1999.  No compensation expense was recognized in 2000.  Compensation expense recognized in 1999 was $417,000.

F-27



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NOTE 13.  INCOME TAXES 
The (provision) benefit for income taxes is comprised of (in thousands):



|                                                       | 2001                                                         | 2000                                                      | 1999                                                      
|------------------------------------------------------ | ------------------------------------------------------------ | --------------------------------------------------------- | ----------------------------------------------------------
|Current:
  Federal
  State
Deferred:
  Federal
  State | $(19,457)80 (19,377)
(12,854)157 (12,697)
$(32,074)
======== | $(20,143)72 (20,071)
2,959 (466)2,493 
$(17,578)
======== | $ (9,509)(50)(9,559)
(2,603)(60)(2,663)
$(12,222)
========

The Company is responsible, with certain exceptions, for the taxes of Ramada through December 20, 1989.  In connection with Internal Revenue Service ("IRS") examinations of the income tax returns for the years 1989 through 1996, an issue was resolved, which was the last remaining issue for the years 1989 through 1991, that resulted in an income tax benefit of approximately $7,500,000 in 2000.  The issue related to the deductibility of the cost of meals served to certain employees on the Company's premises.  The IRS maintained that the Tax Reform Act of 1986 reduced this deduction.  We recorded provisions in prior years based on the IRS position; however, we believed that these employee meals were fully deductible.  The United States Tax Court decided in favor of the IRS in a case involving Boyd Gaming Corporation ("Boyd Gaming Case").  In 1999, the Boyd Gaming Case was overturned in the United States Court of Appeals.  This issue, as it pertained to us, was resolved with the IRS during 2000.
The IRS has completed its examination of the Company's income tax returns for the years 1992 and 1993 and has settled for all but two issues.  The two issues involve the deductibility of certain complimentaries provided to customers and the deductibility of a portion of payments on certain liabilities related to the Restructuring.  The Company has filed a petition in the United States Tax Court for these two issues for 1992 and 1993.  The IRS is examining the Company's income tax returns for 1994 through 1999 and has settled for all but the same two issues.  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 Indiana Department of Revenue ("IDR") is examining the income tax returns for the years 1998 through 2000.  The Company has received proposed assessments from the IDR in connection with the examination of the Company's Indiana income tax returns for the years 1996 and 1997.  Those 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 and oral arguments were heard in April 2001.  The Company believes that it has meritorious legal defense to those assessments and has not recorded an accrual for payment.  It is reasonably possible that the Company's estimate may change in the near term.  The amount involved, including the Company's estimate of interest, net of a federal income tax benefit assuming continuation through January 3, 2002, was approximately $7,800,000 at January 3, 2002.

F-28



---



General business credits are taken as a reduction of the provision for income taxes during the year such credits become available.  The (provision) benefit for income taxes differs from the amount computed by applying the U.S. federal income tax rate (35%) because of the effect of the following items (in thousands):

|                                                                                                                                                                                                   | 2001                                                           | 2000                                                                | 1999                                                        
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------- | ------------------------------------------------------------------- | ------------------------------------------------------------
|Tax (provision) benefit at U.S. federal
  income tax rate
State income taxes, net
Nondeductible business expenses
IRS examination
General business credits
Ramada tax sharing agreement
Other, net | $ (31,529)
(230)
(399)
(368)
525 
-- (73)
$ (32,074)
========= | $ (24,743)
(256)
(1,053)
7,403 
496 
696 (121)
$ (17,578)
========= | $ (12,023)
(333)
(904)
7 
436 
334 261 
$ (12,222)
=========

The income tax effects of loss carryforwards, tax credit carryforwards and temporary differences between financial and income tax reporting that give rise to the deferred income tax assets and liabilities are as follows (in thousands):

|                                                                                                                                                                                                                                                                                                                                                               | January 3, 2002                                                                                                            | December 28,2000                                                                                                            
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------
|Net operating loss carryforward
Accrued rent expense
Accrued bad debt expense
Accrued compensation
Accrued liabilities
General business credit carryforward
Gross deferred tax assets
Deferred tax asset valuation allowance
Other
Partnership investment
Depreciation and amortization
Gross deferred tax (liabilities)
Net deferred tax assets (liabilities) | $  2,074  
6,458  
12,923  
7,865  
9,590  3,718  42,628  (1,968) 
(6,426) 
(4,551) (28,595) (39,572) 
$  1,088  
======== | $  2,661  
6,361  
15,050  
7,352  
10,912  15,470  57,806  (2,668) 
(5,984) 
(4,953) (30,416) (41,353) 
$ 13,785  
========

Gross deferred tax assets are reduced by a valuation allowance. Realization of the net deferred tax asset at January 3, 2002, is dependent on generating sufficient taxable income prior to expiration of the net operating loss carryforward.  Although realization is not assured, management believes it is more likely than not that all of the net deferred tax asset will be realized.  The amount of the deferred tax asset considered realizable, however, could change in the near future if estimates of future taxable income during the carryforward period are changed.  The beginning-of-year valuation allowance was reduced during 2001 and 1999, which caused a decrease in income tax expense of $305,000 and $1,137,000, respectively.  The beginning-of-year valuation allowance was increased during 2000, which caused an increase in income tax expense of $393,000.

F-29



---



At January 3, 2002, the Company has alternative minimum tax credit carryforwards of $3,718,000 that can be carried forward indefinitely and offset against the regular federal income tax liability.  In addition, the Company has net operating loss carryforwards for state income tax purposes that will expire in the following years if not used (in thousands):

| | 2002
2003
2004
2005
2006 to 2021 | $   479
482
349
315
47,968 | 
| | -------------------------------- | -------------------------- | 

NOTE 14.  EXTRAORDINARY ITEMS
During 1999, the Company expensed the redemption premiums, the remaining unamortized deferred financing charges and the remaining unamortized discount in connection with the redemptions of previous issues of Senior Subordinated Notes.  These items were reflected as an extraordinary loss of $15,740,000, which was net of an income tax benefit of $8,476,000.
NOTE 15.  EARNINGS PER SHARE
The computations of earnings per common share and earnings per common share, assuming dilution, are as follows (in thousands, except per share data):

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 2001                                                                                            | 2000                                                                                              | 1999                                                                                                       
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------
|Income before extraordinary items
Less: preferred stock dividends and
  losses on redemption (net of income
  tax benefit of $13 in 1999, 
  credited to retained earnings)
Income before extraordinary items
  available to common shareholders
Extraordinary items
Income available to common shareholders
Income before extraordinary items 
  available to common shareholders
Plus: income impact of assumed conversion
  of dilutive preferred stock
Income before extraordinary items available
  to common shareholders plus dilutive
  potential common shares
Extraordinary items
Income available to common shareholders
  plus dilutive potential common shares | $  58,009 (794)
57,215 -- 
$  57,215 
========= 
$  57,215 476 
57,691 -- 
$  57,691 
========= | $  53,117 (886)
52,231 -- 
$  52,231 
========= 
$  52,231 -- 
   52,231 -- 
$  52,231 
========= | $  22,129 (633)
21,496 (15,740)
$   5,756 
========= 
$  21,496 -- 
   21,496 (15,740)
$   5,756 
=========



F-30



---



|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 2001                                                                                                             | 2000                                                                                                               | 1999                                                                                                                   
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------------
|Weighted-average common shares applicable
  to earnings 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 earnings per common
  share assuming dilution
Earnings per common share:
  Income before extraordinary items
  Extraordinary items
  Net income
Earnings per common share assuming dilution:
  Income before extraordinary items
  Extraordinary items
  Net income | 37,385 
948 630 1,578 
38,963 
========= 
$    1.53 -- 
$    1.53 
========= 
$    1.48 -- 
$    1.48 
========= | 40,862 
1,000 715 1,715 
42,577 
========= 
$    1.28 -- 
$    1.28 
========= 
$    1.23 -- 
$    1.23 
========= | 44,598 
812 787 1,599 
   46,197 
========= 
$     .48 (.35)
$     .13 
========= 
$     .46 (.34)
$     .12 
=========

NOTE 16.  CONTINGENCIES AND COMMITMENTS
The Company 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 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.  In addition, the Company agreed to indemnify Ramada for various lease guarantees made by Ramada relating to the restaurant business.  In connection with these matters, the Company's accrued liability was $3,833,000 at both January 3, 2002 and December 28, 2000.
The Company is a party to various other claims, legal actions and complaints arising in the ordinary 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.

F-31



---



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 January 3, 2002, the aggregate commitment under the severance agreements should all these executives be terminated was approximately $48,000,000 at January 3, 2002.
NOTE 17.  FAIR VALUE OF FINANCIAL INSTRUMENTS
The following table presents (in thousands) the carrying amounts and estimated fair values of the Company's financial instruments.  The fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

|                                                                                                                                                                                  | January 3, 2002                 | December 28, 2000                      
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------- | ---------------------------------------
|                                                                                                                                                                                  | CarryingAmount                  | Fair   Value                           
|Assets
  Other investments
Liabilities
  Current portion of long-term
    debt
  Long-term debt
Series B ESOP convertible
  preferred stock
Off-Balance-Sheet
  Letters of credit | $ 23,544
1,428
458,659
5,959
-- | $ 23,544 
1,428 
471,834 
10,607 
1,874

The carrying amounts shown in the table are included, if applicable, in the Consolidated Balance Sheets under the indicated captions.  All of the Company's financial instruments are held or issued for purposes other than trading.
The following notes summarize the major methods and assumptions used in estimating the fair values of financial instruments.
Other investments consisted of deposits with the CRDA, CRDA bonds that bear interest at two-thirds of market rates resulting in a fair value lower than cost and other CRDA investments (primarily loans).  The carrying amounts of these deposits, bonds and other investments are presented net of a valuation allowance and in the case of the bonds an unamortized discount that result in an approximation of fair values.
The fair values of the Company's publicly traded debt were estimated based on the bid prices in the public bond markets.  The carrying amounts of the Revolver and the Term Loan are reasonable estimates of fair values because this debt is carried with a floating interest rate.
The fair value reported for the Series B ESOP convertible preferred stock represents the appraised fair value as determined by an independent appraisal.

F-32



---



The fair values of the letters of credit were estimated to be the same as the contract values based on the nature of the fee arrangement with the issuing financial institution. 
NOTE 18. SUBSEQUENT EVENT
On January 29, 2002, the Company exercised the option it has to purchase the 50% partnership interest in Tropicana Enterprises that it does not own and on February 28, 2002, the Company completed the purchase.  After credits, the Company paid $117,500,000.  The source of funds for this purchase was cash on hand of $47,500,000 and the balance from the Revolver.  In addition, the Company assumed approximately $49,000,000 of partnership debt that the Company was servicing through its rent payments.  This partnership debt is a bank term loan that matures on June 30, 2005.  The term loan calls for monthly principal payments of $342,000 to $419,000, with a final payment of approximately $34,000,000 due at maturity.  The term loan is collateralized by the Las Vegas Tropicana property.  Interest is computed based upon, at the borrower's option, a one-, two-, three- or six-month Eurodollar rate plus a margin ranging from 1.25% to 2.25%, or the prime rate plus a margin ranging from zero to 1.00%.  The applicable margin is dependent upon the Company's outstanding indebtedness and operating cash flow.  The interest rate at January 3, 2002 was 5.3%. This purchase eliminates, after February 28, 2002, the Company's real estate rent expense at the Las Vegas Tropicana, which was $8,620,000, $8,892,000 and $8,534,000 net of intercompany eliminations in 2001, 2000 and 1999, respectively; and its equity in unconsolidated partnership's loss, which was $3,702,000, $4,215,000 and $3,961,000 in 2001, 2000 and 1999, respectively.  However, it increases depreciation and interest expenses and decreases interest income after February 28, 2002

F-33



---



NOTE 19.  UNAUDITED QUARTERLY RESULTS/COMMON STOCK PRICES

The following unaudited information shows selected items in thousands, except per share data, for each quarter.  The Company's common stock is listed on the New York Stock Exchange.

|                                                                                                                                                                                                                                                                                                                                                                                                                                                  | First                                                                                                                                                                                                                                                                                                                                                                                                | Second                                                                                                                                  | Third                                                                                                                                     | Fourth(a)                                                                                                                                                                                  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2001Revenues
Operating income
Income before income taxes
Income taxes
Net income
Earnings per share:
  Net income per common share
  Net income per common share
    assuming dilution2000Revenues
Operating income
Income before income taxes
Income taxes (b)
Net income
Earnings per share:
  Net income per common share
  Net income per common share
    assuming dilutionCommon Stock Prices
2001 - High
     - Low
2000 - High
     - Low | $ 208,344 
28,762 
18,054 
(6,663)
11,391 
..29 
..28 
$ 211,524 
28,441 
16,863 
(5,839)
11,024 
..26 
..25 
$ 13.75 
8.88 
10.88 
8.50                                                                                                                                                                                                                                                             | $ 210,856 
35,003 
25,285 
(9,273)
16,012 
..42 
..40 
$ 220,963 
34,314 
23,227 
(874)
22,353 
..53 
..51 
$ 14.99 
10.50 
15.50 
9.06 | $ 218,113 
37,343 
27,361 
(9,536)
17,825 
..47 
..46 
$ 222,205 
33,797 
22,622 
(8,070)
14,552 
..35 
..34 
$ 16.15 
9.75 
16.69 
14.00 | $ 212,150    
30,300    
19,383    
(6,602)   
12,781    
..34    
..33    
$ 193,396    
18,923    
7,983    
(2,795)   
5,188    
..12    
..12    
$ 18.80    
11.84    
15.63    
11.25
|                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                                                                                                                                     
|(a)
(b)                                                                                                                                                                                                                                                                                                                                                                                                                                           | As a result of the Company's 52/53 week fiscal year, the fourth quarter 2001 included 14 weeks and the fourth quarter 2000 included 13 weeks.
During the second quarter of 2000, an issue relating to the income tax deductibility of the cost of meals served to certain employees on the Company's premises was resolved with the IRS, resulting in an income tax benefit of approximately $7,500.



F-34



---



REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners
Tropicana Enterprises

In our opinion, the accompanying balance sheets and the related statements of operations, cash flows and partners' capital  present fairly, in all material respects, the financial position of Tropicana Enterprises (a Nevada General Partnership)(the "Partnership") at January 3, 2002 and December 28, 2000, and the results of its operations and its cash flows for each of the three years in the period ended January 3, 2002 in conformity with accounting principles generally accepted in the United States of America.  These financial statements are the responsibility of the Partnership's management; our responsibility is to express an opinion on these financial statements based on our audits.  We conducted our audits of these statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

PRICEWATERHOUSECOOPERS LLP
Phoenix, Arizona
February 4, 2002,
except for notes
1 and 8, as to 
which the date is
February 28, 2002

F-35



---





TROPICANA ENTERPRISES
(A Nevada General Partnership)BALANCE SHEETS
(in thousands)



|                                                                                                                                                                                 | January 3, 2002                                                                                               | December 28,2000                                                                                                 
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | -----------------------------------------------------------------------------------------------------------------
|Assets
  Income producing properties
  Cash
  Other receivable
  Other assets
Liabilities and Partners' Capital
  Term loan payable
  Unearned rental income
  Partners' capital | $  43,786  
1  
1,404  6,907  
$  52,098  
=========  
$  49,604  1,507  
51,111  987  
$  52,098  
========= | $  46,561  
352  
1,282  7,850  
$  56,045  
=========  
$  53,690  1,280  
54,970  1,075  
$  56,045  
=========

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

F-36



---



TROPICANA ENTERPRISES
(A Nevada General Partnership)
STATEMENTS OF OPERATIONSFor the Years Ended January 3, 2002, December 28, 2000 and December 30, 1999
(in thousands)



|                                                                                                                                           | 2001                                                             | 2000                                                            | 1999                                                            
|------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------- | --------------------------------------------------------------- | ----------------------------------------------------------------
|Revenues:
  Rent
  Interest
  Other
Costs and expenses:
  General and administrative
  Interest
  Depreciation and amortization
Net income | $ 17,240 
-- -- 17,240 
8 
3,512 2,787 6,307 
$ 10,933 
======== | $ 17,784 
8 -- 17,792 
8 
4,590 2,735 7,333 
$ 10,459 
======== | $ 17,068 
18 40 17,126 
8 
4,124 2,735 6,867 
$ 10,259 
========



F-37



---





TROPICANA ENTERPRISES
(A Nevada General Partnership)
STATEMENTS OF CASH FLOWSFor the Years Ended January 3, 2002, December 28, 2000 and December 30, 1999(in thousands)

|Cash flows from operating activities:
  Net income
  Adjustments to reconcile net income to net
    cash provided by operating activities:
      Depreciation and amortization
      Gain on disposal of assets
      Changes in assets and liabilities:
        Other receivable
        Other assets
        Unearned rental income
    Net cash provided by operating activities
Cash flows from investing activities:
  Proceeds from sale of property
    Net cash provided by investing activities
Cash flows from financing activities:
  Repayment of term loan
  Distribution to partners
    Net cash (used in) provided by financing
      activities
Net change in cash
Cash at beginning of year
    Cash at end of year
Cash flow during the year for the following:
    Interest paid | 2001
$  10,933 
2,787 
-- 
(122)
931 227 14,756 -- -- 
(4,086)(11,021)(15,107)
(351)352 
$       1 
========= 
$   3,372 
========= | 2000
$  10,459 
2,735 
-- 
(79)
1,095 49 14,259 -- -- 
(3,241)(10,667)(13,908)
351 1 
$     352 
========= 
$   4,533 
========= | 1999
$  10,259 
2,735 
(40)
(299)
1,017 293 13,965 51 51 
(3,297)(10,719)(14,016)
-- 1 
$       1 
========= 
$   3,814 
=========
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------



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

F-38



---



TROPICANA ENTERPRISES
(A Nevada General Partnership)
STATEMENTS OF PARTNERS' CAPITALFor the Years Ended January 3, 2002, December 28, 2000 and December 30, 1999(in thousands)



|Balance, December 31, 1998
  Net income
  Cash withdrawals
Balance, December 30, 1999
  Net income
  Cash withdrawals
Balance, December 28, 2000
  Net income
  Cash withdrawals
Balance, January 3, 2002 | Adamar$ (1,937)
5,130 (5,360)
(2,167)
5,229 (5,333)
 (2,271)
5,466 (5,511)
$ (2,316)
======== | Jaffe$  3,680 
5,129 (5,359)
3,450 
5,230 (5,334)
  3,346 
5,467 (5,510)
$ 3,303 
======== | Total  
Partners'Capital
$  1,743 
10,259 (10,719)
1,283 
10,459 (10,667)
  1,075 
10,933 (11,021)
$    987 
========
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------



F-39



---



TROPICANA ENTERPRISES
(A Nevada General Partnership)
NOTES TO FINANCIAL STATEMENTS

|1. Significant Accounting Policies:
|-----------------------------------

Basis of Financial Statements

The financial statements include the accounts of Tropicana Enterprises, a Nevada General Partnership (the "Partnership").  Adamar of Nevada ("Adamar"), a wholly-owned subsidiary of Aztar Corporation ("Aztar"), and the Jaffe Group ("Jaffe") each hold a 50% partnership interest.  Aztar has an option to purchase the Jaffe partnership interest.  The option gives Aztar an unconditional right to purchase the Jaffe partnership interest for $120 million.  On January 29, 2002, Aztar exercised this option and on February 28, 2002, Aztar completed the purchase.  The Partnership uses a 52/53 week fiscal year ending on the Thursday nearest to December 31, which included 53 weeks in 2001 and 52 weeks in 2000 and 1999.

The Partnership owns and leases real property (the "Tropicana Property") to Hotel Ramada of Nevada ("HRN") a wholly-owned subsidiary of Aztar.  This property is used in the operation of the Tropicana Resort and Casino in Las Vegas, Nevada.  Aztar is exploring alternatives for a redevelopment of the Tropicana Property.  It is reasonably possible that the carrying value of some or all of the Partnership's assets may change in the near term.

Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.

Properties

Properties are stated at cost.  Improvements, renewals, and extraordinary repairs that extend the life of the asset are capitalized; other routine repairs and maintenance are expensed.  The cost and accumulated depreciation applicable to assets retired are removed from the accounts and the gain or loss, if any, on disposition is recognized in income as realized.

Properties are depreciated using the straight line method over 21 to 40 years.

Deferred Lease Costs

Costs directly related to signed lease agreements are capitalized and amortized over the term of the lease.

Revenue Recognition

Rental revenue is recorded on a straight line basis over the term of the lease.  Accrued rent, recorded in the accompanying balance sheets as other assets, represents cumulative amounts receivable in excess of cash basis rental revenue.



F-40



---



TROPICANA ENTERPRISES
(A Nevada General Partnership)
NOTES TO FINANCIAL STATEMENTS-(Continued)



Income Taxes

No federal or state income taxes are payable by the Partnership; thus, none have been provided for in the accompanying financial statements.  The partners are to include their respective share of the Partnership income or loss in their separate tax returns.

|2. Customer Concentration:
|--------------------------

The Partnership receives all of its income from HRN.  Although the Partnership does not anticipate a default by HRN, failure to receive payments on the lease would adversely affect the operating results and ability of the Partnership to service its debt.

|3. Income Producing Properties:
|-------------------------------

The income producing properties consist of the following (in thousands):



|Buildings
Less accumulated depreciation
Land | January 3, 2002
$  84,226  (51,846) 
32,380  11,406  
$  43,786  
========= | December 28,2000
$  84,226  (49,071) 
35,155  11,406  
$  46,561  
========= | 
|-------------------------------------------- | --------------------------------------------------------------------------- | ---------------------------------------------------------------------------- | 

|4. Other Assets:
|----------------

Other assets consist of the following (in thousands):



|Accrued rent
Deferred lease costs | January 3, 2002
$   6,824  83  
$   6,907  
========= | December 28,2000
$   7,755  95  
$   7,850  
========= | 
|--------------------------------- | ----------------------------------------------------- | ------------------------------------------------------ | 



|5. Term Loan Payable:
|---------------------

On October 5, 1994, the Partnership entered into a term loan of $72,523,000 with a group of banks.  During 2001, the maturity of the term loan was extended to June 30, 2005.  The term loan was used to refinance a prior loan in the same amount.  The term loan is collateralized by the Tropicana Property and is serviced through rent payments made by HRN.  Interest is computed based upon, at the Partnership's option, a one-, two-, three- or six-month Eurodollar rate plus a margin ranging from 1.25% to 2.25%, or the prime rate plus a margin ranging from zero to 1.00%.  The applicable margin to be used in connection with either rate is determined based upon outstanding indebtedness and operating cash flow of Aztar.  Interest based on the Eurodollar rate is payable quarterly or on the last day of the

F-41



---



TROPICANA ENTERPRISES
(A Nevada General Partnership)
NOTES TO FINANCIAL STATEMENTS-(Continued)

applicable Eurodollar interest period, if earlier.  Interest based on the prime rate is payable quarterly.  The interest rate at January 3, 2002 was 5.3%.
The carrying amounts of the term loan are reasonable estimates of the fair values based on the variable interest rate inherent in the loan.
Maturities of the term loan for the four years subsequent to January 3, 2002 are as follows (in thousands):

|                    | 2002
2003
2004
2005 | $   4,101
4,388
4,69436,421
$  49,604
========= | 
|------------------- | ------------------- | ----------------------------------------------- | 
|6. Lease Agreement:

In 1984, the Partnership signed an agreement to lease its operating facilities at the Tropicana, which expires in January 2011.  The lease agreement provides for contingent rental income based on the consumer price index and/or interest rate fluctuations in the prime or Eurodollar rates.  The lease of the facility is treated as an operating lease except for the portion related to the furniture and equipment which was capitalized.  The accompanying statements of operations reflect rent revenue on a straight line basis over the term of the lease.  Included in the accompanying balance sheets under other assets is accrued rent of $6,824,000 and $7,755,000, as of January 3, 2002 and December 28, 2000, respectively, which represents future rent payments.
Minimum future rentals on the noncancelable operating lease as of January 3, 2002, excluding contingent rental income as described above, are as follows (in thousands):

| | 2002
2003
2004
2005
2006
Thereafter | $  14,324
14,324
14,324
14,324
14,32458,494$ 130,114========= | 
| | ----------------------------------- | ------------------------------------------------------------- | 



F-42



---



TROPICANA ENTERPRISES
(A Nevada General Partnership)
NOTES TO FINANCIAL STATEMENTS-(Continued)

|7. Related Parties:
|-------------------

The Partnership leases substantially all of the operating facilities at the Tropicana Property to HRN.  The Partnership recognized rental income of $17,240,000 in 2001, $17,784,000 in 2000 and $17,068,000 in 1999 related to this lease.
Aztar performs various accounting and administrative services on behalf of the Partnership.  No expense is allocated to the Partnership for these services.

|8. Subsequent Event:
|--------------------

On January 29, 2002, Aztar exercised the option it has to purchase the 50% partnership interest in Tropicana Enterprises that it does not own and on February 28, 2002, Aztar completed the purchase.  After credits, Aztar paid $117,500,000.  After the purchase, the Partnership's financial statements will be consolidated with Aztar's financial statements.

F-43



---



Management's Discussion and Analysis
Financial Condition -
Liquidity and Capital Resources
In 2001, we obtained additional fixed-rate debt and reduced our floating-rate revolving credit facility to zero.  In addition to our cash balance, the revolving credit facility remains available as a source of liquidity for our future capital expenditures as we enter a development phase in 2002.
  Additional Fixed-rate Debt
On July 27, 2001, we issued $175 million principal amount of 9% Senior Subordinated Notes due August 15, 2011.  Interest is payable on February 15 and August 15, beginning on February 15, 2002.  The net proceeds from this issuance, after payment of fees and expenses of the issuance, were approximately $171.2 million.  The net proceeds were used to repay the outstanding borrowings under our revolving credit facility and for general corporate purposes.
The 9% Notes, ranked pari passu with our 8 7/8% Senior Subordinated Notes, are general unsecured obligations and are subordinated in right of payment to all of our present and future senior indebtedness.  Upon change of control of the company, the holders of the senior subordinated 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 senior subordinated notes limit our ability to incur indebtedness, make certain payments or engage in mergers, consolidations or sales of assets.
  Variable-rate Debt
Our variable-rate debt consists of a term loan and a revolving credit facility.  At January 3, 2002, the balance of the term loan was $48.75 million with quarterly principal payments of $0.125 million due on a calendar basis through June 30, 2004, and $11.875 million due quarterly thereafter until maturity.  Interest on the term loan is computed based upon a one-, two-, three- or six-month Eurodollar rate plus a margin of 2.5%.  At January 3, 2002, the maximum amount available under our revolving credit facility was $264 million and it was unused.  The maximum amount available decreases by $12 million on March 31, 2004, and quarterly thereafter until maturity on June 30, 2005.  Interest on the revolving credit facility is computed based upon a one-, two-, three- or six-month Eurodollar rate plus a margin ranging from 1.25% to 2.5%, or the prime rate plus a margin ranging from zero to 1.25%.
The revolving credit facility imposes various restrictions on us, including limitations on our ability to incur additional debt, commit funds to capital expenditures and investments, merge or sell assets. The revolving credit facility prohibits dividends on our common stock (other than dividends payable in common stock) and repurchases of our common stock in excess of $250 million with limited exceptions.  In addition, the revolving credit facility contains quarterly financial tests, including a minimum requirement for operating cash flow, a minimum ratio of fixed charge coverage and maximum ratios of total debt and senior debt to operating cash flow.

F-44



---



Stock Repurchase Program
In 1999 and 2000, our board of directors authorized discretionary repurchases of up to 11 million shares of our common stock.  In 2001, we repurchased 2,334,700 shares of our common stock at prices ranging from $9.00 per share to $16.10 per share and at an average price of $12.22 per share.  From the beginning of the share repurchase program through its completion, we repurchased 11 million shares at prices ranging from $6.69 per share to $16.10 per share and at an average price of $11.64 per share.  Purchases under our stock repurchase program were made from time to time in the open market or privately negotiated transactions, depending upon market prices and other business factors.
  Tropicana Atlantic City Development
We are working on a plan to expand our Atlantic City Tropicana.  Our plan, which is subject to change, includes: (1) increasing our casino slot capacity from 4,120 machines to over 4,400 machines, (2) adding a convention business hotel tower of 502 rooms, bringing the total rooms available to 2,126 rooms, (3) adding 20,000 square feet of meeting and convention space for a total of 70,000 square feet, (4) constructing a 2,400-space parking garage, which after the loss of some surface parking will bring our total parking spaces to over 5,000, and (5) building a 200,000-square-foot dining, entertainment and retail complex that we intend to lease to third-party operators.  We expect to commence construction by May 2002, with opening contemplated by March 2004.  We are targeting a project cost for the expansion of $225 million, against which we hope to realize third-party contributions, public sector subsidies, tax rebates and other credits, the present value of which could reduce the cost by up to $50 million.  We are planning that the costs to be borne by us would be funded largely from our operating cash flow, with seasonal needs met by our revolving credit facility.  During 2001, we spent $12.1 million on this project for architectural design and development work and we capitalized $1.3 million of interest.  During 2002, we expect to spend approximately $45 million on construction costs.
  Tropicana Las Vegas Development
Tropicana Enterprises, a Nevada general partnership in which Aztar is a noncontrolling 50% partner, owns the real property, which includes approximately 34 acres of land that we lease in the operation of the Las Vegas Tropicana.  We have an option to purchase the 50% partnership interest that we do not own.  The option gives us an unconditional right to purchase the partnership interest for $120 million.  On January 29, 2002, we exercised this option and on February 28, 2002, we completed the purchase.  After credits, we paid $117.5 million.  The source of funds for this purchase was cash on hand of $47.5 million and the balance from our revolving credit facility.  In addition, we assumed approximately $49 million of partnership debt that we were servicing through our rent payments.  This partnership debt is a bank term loan that matures on June 30, 2005.  The term loan calls for monthly principal payments of $0.3 million to $0.4 million, with a final payment of approximately $34 million due at maturity.  The term loan is collateralized by the Las Vegas Tropicana property.  Interest is computed based upon, at the borrower's option, a one-, two-, three- or six-month Eurodollar rate plus a margin ranging from 1.25% to 2.25%, or the prime rate plus a margin ranging from zero to 1.00%.  The applicable margin is dependent upon our outstanding

F-45



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indebtedness and operating cash flow.  This purchase eliminates, after February 28, 2002, our real estate rent expense at the Las Vegas Tropicana, which was $8.6 million, $8.9 million and $8.5 million net of intercompany eliminations in 2001, 2000 and 1999, respectively; and our equity in unconsolidated partnership's loss, which was $3.7 million, $4.2 million and $4.0 million in 2001, 2000 and 1999, respectively.  However, it increases depreciation and interest expenses and decreases interest income after February 28, 2002.  We anticipate that the net result will be accretive to net income and earnings per share.  This purchase simplifies our ownership structure of the Las Vegas Tropicana and our financial statements.
We are conducting feasibility studies to master-plan a potential development of the site.  The master plan envisions the creation of two separate but essentially equal and inter-connected 17-acre development sites.  The north site would be developed by us.  The south site would be held for our future development, joint venture development, or sale for development by another party. For development of a potential project on the north site, we plan to complete a detailed design development effort with construction documents and estimated construction costs by the summer of 2003, at which time we will decide whether or not to proceed.  The amount and timing of any future expenditure, and the extent of any impact on existing operations, will depend on the nature and timing of the development we ultimately undertake, if any.  If we decide to abandon any facilities in the development process, we would have to conduct a review for impairment and review their useful lives with a possible adjustment to depreciation and amortization expense.  These reviews could have a material effect on our results of operations. 
  Other Development
We own land that is in proximity to our facilities in Evansville, Indiana.  This land could be used for additional development.
  Other Activity
During 2001, we received $2.2 million in cash in connection with stock option exercises.  Our purchases of property and equipment, other than expenditures for the Atlantic City Tropicana development discussed above and $7.9 million for slot machines and an expansion of the Atlantic City Tropicana casino into space that was previously used for other purposes, were primarily routine in nature.
  Contingency
The Indiana Department of Revenue is examining our income tax returns for the years 1998 through 2000.  We have received proposed assessments from the IDR in connection with the examination of our Indiana income tax returns for the years 1996 and 1997.  Those assessments are based on the IDR's position that our gaming taxes that are based on gaming revenue are not deductible for Indiana income tax purposes.  We filed a petition in Indiana Tax Court and oral arguments were heard in April 2001.  We believe that we have meritorious legal defense to those assessments and have not recorded an accrual for payment.  It is reasonably possible that our estimate may change in the near term.  The amount involved, including our estimate of interest, net of a federal income tax benefit assuming continuation through January 3, 2002, was approximately $7.8 million at January 3, 2002.

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Results of Operations -
2001 versus 2000
Our consolidated revenues were $849.5 million for 2001, a slight increase from $848.1 million in 2000.  Our 2001 fiscal year included 53 weeks versus 52 weeks in the 2000 fiscal year and the extra week in the 2001 fiscal year included the New Year's Eve holiday period, which is very busy for us.  Casino revenue increased slightly as we focused on programs that produce revenues with higher profit contributions.  Consolidated other revenue consists of entertainment, retail and other revenue and was $38.6 million in 2001 compared with $41.1 million in 2000.  The related direct costs were $32.9 million in 2001 compared with $33.1 million in 2000.
Consolidated operating income in 2001 was $131.4 million compared with $115.5 million in 2000. Consolidated casino and marketing costs were lower in 2001 compared with 2000 primarily as a result of lowering these costs at our properties in Atlantic City, Laughlin and Evansville.  Consolidated utilities expense was higher in 2001 compared with 2000 as a result of rising energy prices especially at our Laughlin and Las Vegas properties.  Consolidated rent expense was higher in 2001 compared with 2000 primarily due to increased rent to the City of Evansville relating to our riverboat-landing lease.  A scheduled change in the formula used in calculating the rent came into effect in December 2000.  The analysis of the performance of each of our properties follows.
  Tropicana Atlantic City
Tropicana Casino and Resort in Atlantic City, New Jersey had total revenues of $467.8 million in 2001 compared with $465.9 million in 2000 and operating income of $97.5 million in 2001 compared with $84.0 million in 2000.  Casino revenue was approximately even in 2001 and 2000. A small decrease in the volume of table games play was offset by a small increase in the hold percentage. Slot revenue was approximately even in 2001 compared with 2000.  Rooms revenue increased $2 million or 10% in 2001 compared with 2000 primarily as a result of an increase in the average daily rate combined with a 2% increase in rooms occupied on a noncomplimentary basis.
Casino costs were 5% lower in 2001 compared with 2000 as we focused on programs that produce revenues with higher profit contributions.  Contributing to the decline in casino costs was a 19% reduction in coin offers to slot players.  Marketing costs were 6% lower in 2001 compared with 2000 primarily due to reduced spending on promotional programs, advertising and contract entertainment.
Operating income is after depreciation and amortization of $26.5 million in 2001 compared with $26.1 million in 2000 and rent expense of $2.6 million in 2001 compared with $2.5 million in 2000.
  Tropicana Las Vegas
Tropicana Resort and Casino in Las Vegas, Nevada had total revenues of $154.5 million in 2001 compared with $152.9 million in 2000 and operating income of $9.0 million in 2001 compared with $8.8 million in 2000.  The decrease in air travel to Las Vegas caused by the September 11, 2001 terrorist acts impacted fourth quarter results at our Las Vegas Tropicana.  For the fourth quarter 2001, Tropicana Las

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Vegas had total revenues of $35.9 million and operating income of $0.8 million compared with total revenues of $35.6 million and operating income of $1.9 million in the fourth quarter of 2000 in spite of the extra week that included the New Year's Eve holiday period in the 2001 fourth quarter.  Rooms revenue decreased by 7% in the fourth quarter 2001 compared with the fourth quarter 2000 primarily as a result of a decrease in the average daily rate combined with a decrease in occupied rooms.
Utilities expense was 41% higher in 2001 compared with 2000 primarily due to higher energy prices.  Operating income is after rent expense of $9.5 million in 2001 compared with $10.1 million in 2000 and depreciation and amortization of $7.7 million in 2001 compared with $9.1 million in 2000.
  Ramada Express
Ramada Express Hotel and Casino in Laughlin, Nevada had total revenues of $96.2 million in 2001 compared with $97.0 million in 2000.  Casino revenue decreased by $1.8 million in 2001 compared with 2000 as we focused on programs that produce revenues with higher profit contributions.  Our casino costs decreased by $1.6 million in 2001 compared with 2000 primarily as a result of decreases in payroll, complimentaries and gaming taxes.  Marketing costs decreased by $1.4 million in 2001 compared with 2000 due to reduced spending on promotional programs and advertising. Utilities expense was 32% higher in 2001 compared with 2000 primarily due to higher energy prices.
Operating income at Ramada Express was $17.7 million in 2001 compared with $15.8 million in 2000.  Operating income is after depreciation and amortization of $5.7 million in 2001 compared with $5.5 million in 2000 and rent expense of $0.3 million in 2001 compared with $0.4 million in 2000.
  Casino Aztar Evansville
Casino Aztar Evansville in Evansville, Indiana had total revenues of $106.0 million in 2001 compared with $108.0 million in 2000. Casino revenue was down $1.0 million or 1% in 2001 compared with 2000, primarily due to a 7% decrease in table games revenue, reflecting a lower volume of play.  Slot revenue in 2001 was approximately even with 2000.  Casino revenue decreased as the Ohio River market absorbed a new riverboat casino that opened in late October 2000.
Casino costs decreased $0.9 million or 3% in 2001 from 2000 as a result of a decrease in complimentaries.  Marketing costs decreased 14% in 2001 from 2000 due to decreased spending on promotional programs and advertising.
Operating income was $18.8 million in 2001 compared with $19.1 million in 2000.  Operating income is after rent and depreciation and amortization expenses.  Rent expense was $5.8 million in 2001 compared with $3.8 million in 2000.  Rent expense increased as a result of increased rent to the City of Evansville relating to our riverboat-landing lease.  A scheduled change in the formula used in calculating the rent came into effect in December 2000.  Depreciation and amortization was $9.0 million in 2001 compared with $10.2 million in 2000.

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Casino Aztar Caruthersville

Casino Aztar Caruthersville in Caruthersville, Missouri had total revenues of $25.0 million in 2001 compared with $24.3 million in 2000 and operating income of $1.6 million in 2001 compared with $0.2 million in 2000.  Operating income is after depreciation and amortization of $2.9 million in 2001 compared with $3.0 million in 2000.  Casino revenue increased by 6% in 2001 compared with 2000 primarily as a result of an increase in slot revenue.  Our admissions increased by 2% in 2001 compared with 2000 and our win per admission increased by 4%.  Casino costs decreased by 4% in 2001 compared with 2000 as we maintained tight control of our costs.
  Interest Expense
Interest expense was $39.2 million in 2001 compared with $41.9 million in 2000.  The decrease in interest expense was due to capitalized interest on the Atlantic City Tropicana expansion, lower levels of debt outstanding and lower interest rates.  Interest capitalized during 2001 was $1.3 million compared with $0.1 million during 2000.
  Income Taxes
Income tax expense in 2000 was reduced by $7.5 million, as a result of a favorable resolution of an issue with the Internal Revenue Service.  See the discussion of 2000 versus 1999 for more detailed information.
  Impact of Recent Events
The September 11 terrorist acts and their effect on air travel as well as the ensuing economic conditions have resulted in an increased level of uncertainty with regard to our near-term operating results.  Based on a review of the latter part of our fourth quarter 2001, it appears that the Las Vegas Tropicana was our only property that was affected by the lingering effects.  We are unable to predict any future effects.
Results of Operations -
2000 versus 1999
Our consolidated revenues were $848.1 million for 2000, an increase of 6% from $800.3 million in 1999.  Consolidated rooms revenue was higher in 2000 than in 1999 as a result of increases in occupied rooms and average daily rates at the Las Vegas Tropicana and the Atlantic City Tropicana.  Consolidated other revenue consists of entertainment, retail and other revenue and was $41.1 million in 2000 compared with $34.8 million in 1999 primarily as a result of increases at the Las Vegas Tropicana.  Our consolidated direct cost associated with the consolidated other revenue was $33.1 million in 2000 compared with $30.3 million in 1999.
Consolidated operating income in 2000 was $115.5 million compared with $89.6 million in 1999.  Consolidated rooms costs increased as a result of the increase in occupied rooms mentioned above.  The provision for doubtful accounts decreased in 2000 compared with 1999 due to a lower volume of table games play at the Las Vegas Tropicana, a lower level of receivables and a favorable risk analysis.  When we

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provide for doubtful accounts receivable, we look at the amount of credit issued, the balance of our net receivable, an aging of that net receivable and consideration of any additional risk factors such as international versus domestic.  The analysis we perform in evaluating our net receivable balance consists of separating receivables into those that are routine and small in balance where we provide an allowance based on aging and those that are larger in balance or nonroutine in nature where we provide an allowance that subjectively considers their characteristics in addition to aging, such as credit and payment history of the customer, financial condition of the customer, collection strategies that can be used, collateral that can be obtained and whether it is international or domestic.  The analysis of the performance of each of our properties follows.
  Tropicana Atlantic City
Tropicana Casino and Resort had total revenues of $465.9 million in 2000 compared with $431.9 million in 1999 and operating income of $84.0 million in 2000 compared with $73.4 million in 1999.  Casino revenue was up $28.7 million in 2000 from 1999.  Table games revenue increased by $7.6 million or 7% in 2000 compared with 1999.  Slot revenue increased in 2000 by 8% over 1999.  Casino revenue increased as a result of an increase in the overall market and an increase in occupied rooms.  Rooms revenue increased 19% in 2000 compared with 1999 as a result of an increase in rooms occupied and an increase in average daily rate.  We are using our large room base to attract new customers from our outer markets.
Rooms costs were 15% higher in 2000 compared with 1999 primarily due to the increase in occupied rooms.  The provision for doubtful accounts was $1.3 million lower in 2000 compared with 1999 as a result of a favorable risk analysis.  In late 1997 and 1998, we were engaged, on a trial basis, in table games marketing efforts to high-end customers from Portugal and from certain South American countries.  Those trial programs resulted in higher levels of provision in 1998 and 1999 and were largely discontinued after 1998.
Operating income is after depreciation and amortization of $26.1 million in 2000 compared with $25.7 million in 1999 and rent expense of $2.5 million in 2000 compared with $2.7 million in 1999.
  Tropicana Las Vegas
Tropicana Resort and Casino had total revenues of $152.9 million in 2000 compared with $144.2 million in 1999 and operating income of $8.8 million in 2000 compared with an operating loss of $4.9 million in 1999. 
Casino revenue decreased by 5% in 2000 compared with 1999, primarily as a result of a 19% decrease in table games revenue.  Table games revenue decreased as a result of a lower volume of high-end play.  Slot revenue in 2000 was level with 1999.  Casino costs decreased 11% in 2000 compared with 1999 primarily as a result of a decrease in the costs associated with the table games business.  Another cost that decreased as a result of the lower volume of table games business was the provision for doubtful accounts, which decreased by $2.4 million in 2000 compared with 1999.  In 1997, total games revenue was $40.7 million, declining each year to $16.5 million in 2000.  This decrease in games revenue is attributed to decreased emphasis on high-end table games play; most significantly, baccarat revenue (which

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is part of table games revenue) declined from $8.3 million in 1998 to nothing in 2000 as a result of the closure of our baccarat operations in 1999.  The high-end table games players used credit play extensively and accounted for the majority of the casino's receivables and related bad debts.  Table games activity in 2000 was largely comprised of domestic patrons who only moderately used credit.  As a result of these changes, our levels of accounts receivable have decreased from $31.7 million at the end of 1996 to $8.5 million at the end of 2000, the delinquency component of accounts receivable has significantly decreased and the related provision for doubtful accounts has declined from $8.8 million in 1997 to $0.3 million in 2000.
The decline in casino revenue was offset by a $4.5 million increase in rooms revenue as a result of an increase in occupied rooms as well as an increase in the average daily rate.  The hotel occupancy rate increased to 96% in 2000 compared with 94% in 1999 and 92% in 1998 in spite of increased competition in the Las Vegas market.  Rooms costs were $0.9 million higher in 2000 compared with 1999 due to the increase in occupied rooms.
Contributing to the increase in total revenue was an increase of $2.0 million in entertainment revenue and an increase of $3.4 million in retail outlet revenue in 2000 compared with 1999. These increases were achieved by taking advantage of our location on the Las Vegas Strip with the substantial customer traffic and our increase in occupied rooms.  Our direct costs associated with entertainment and retail outlets increased by $1.5 million in 2000 compared with 1999.  Operating income or loss is after rent expense of $10.1 million in 2000 compared with $9.9 million in 1999 and depreciation and amortization of $9.1 million in 2000 compared with $10.1 million in 1999.
  Ramada Express
Ramada Express Hotel and Casino had total revenues of $97.0 million in 2000 compared with $94.0 million in 1999.  Casino revenue increased by $2.6 million in 2000 compared with 1999.  In 2000, the Laughlin market continued its improvement that began in 1999; however, the fourth quarter of 2000 showed some softening.  Consistent with our increase in casino revenue, our casino and marketing costs increased by $1.6 million in 2000 compared with 1999.
Operating income at Ramada Express was $15.8 million in 2000 compared with $15.0 million in 1999.  Operating income is after depreciation and amortization of $5.5 million in 2000 compared with $4.9 million in 1999 and rent expense of $0.4 million in 2000 compared with $0.7 million in 1999.
  Casino Aztar Evansville
Casino Aztar Evansville had total revenues of $108.0 million in 2000 compared with $105.8 million in 1999. Casino revenue was up $2.6 million or 3% in 2000 compared with 1999, primarily due to an increase in slot revenue.  Our operation stabilized in 2000 compared with 1999 as the market absorbed competition from a riverboat in the Louisville, Kentucky area that opened in November 1998.  In addition, another riverboat casino opened in late October 2000 on the Ohio River between the Louisville area and the Cincinnati area, in our Evansville property's outer market.

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Casino costs increased 2% in 2000 from 1999 with the increase in casino revenue.  Marketing costs increased 9% in 2000 from 1999 as we incurred additional costs in order to increase our casino revenue. Operating income was $19.1 million in 2000 compared with $19.7 million in 1999.  Operating income is after depreciation and amortization of $10.2 million in 2000 compared with $9.8 million in 1999 and rent expense of $3.8 million in 2000 compared with $3.5 million in 1999.
  Casino Aztar Caruthersville
Casino Aztar Caruthersville had total revenues of $24.3 million in 2000 compared with $24.4 million in 1999 and operating income of $0.2 million in 2000 compared with an operating loss of $0.6 million in 1999.  Operating income or loss is after depreciation and amortization of $3.0 million in 2000 compared with $3.2 million in 1999.  Casino revenue in 2000 was even with 1999 in spite of increased capacity that we installed in mid-1999 and an open boarding policy that we instituted in August 1999.  Our admissions increased by 11% in 2000 compared with 1999 but our win per admission declined by 10%.  In 2000, we reduced our marketing costs by 22%, which contributed to our decrease of 4% in our overall costs.  This is the third consecutive year that we decreased our overall costs from the previous year.
  Interest Expense
Interest expense was $41.9 million in 2000 compared with $52.8 million in 1999.  The decrease in interest expense was primarily a result of lower interest rates achieved through a refinancing we completed in 1999, through which our fixed-rate debt was replaced with other fixed-rate debt and variable-rate debt bearing lower interest rates.
  Income Taxes
In connection with Internal Revenue Service examinations of the income tax returns for the years 1989 through 1996, an issue was resolved that resulted in an income tax benefit of approximately $7.5 million in the 2000 second quarter.  The issue related to the deductibility of the cost of meals served to certain employees on the Company's premises.  The IRS maintained that the Tax Reform Act of 1986 reduced this deduction.  We recorded provisions in prior years based on the IRS position;  however, we believed that these employee meals were fully deductible.  The United States Tax Court decided in favor of the IRS in a case involving Boyd Gaming Corporation.  In 1999, the Boyd Gaming case was overturned in the United States Court of Appeals.  This issue, as it pertained to us, was resolved with the IRS during the 2000 second quarter.
  Extraordinary Items
During 1999, we expensed the remaining unamortized deferred financing costs and unamortized discount associated with previous issues of Senior Subordinated notes and the premiums paid to retire those notes.  These items were reflected as an extraordinary loss of $15.7 million, which was net of an income tax benefit of $8.5 million.

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Market Risk
Market risk is the risk of loss arising from adverse changes in market rates and prices, including interest rates, foreign currency exchange rates, commodity prices and equity prices.  Our primary exposure to market risk is interest rate risk associated with our Casino Reinvestment Development Authority investments, long-term debt and Series B ESOP convertible preferred stock.  We do not utilize these financial instruments for trading purposes.  We manage our interest rate risk on long-term debt by managing the mix of our fixed-rate and variable-rate debt.  There has been no change in how we manage our interest rate risk when compared to the prior fiscal year.  At December 28, 2000, the carrying value, including the current portion, of our long-term debt at a fixed rate was $237.2 million and at a variable rate it was $227.4 million.  During 2001, our primary activity in long-term debt was obtaining additional fixed-rate debt and reducing variable-rate debt as previously discussed in the section on financial condition.

The following table provides information at January 3, 2002, about our financial instruments that are sensitive to changes in interest rates.  The table presents principal cash flows (in millions) and related weighted average interest rates by expected maturity dates.

|Assets
 Other investments
   Fixed rate
   Average 
    interest rate
Liabilities
 Long-term debt,
  including
   current portion
   Fixed rate
   Average 
    interest rate
   Variable rate
   Average 
    interest rate*
Series B ESOP
 convertible
  preferred stock
   Fixed rate
   Average 
    dividend rate | 2002-- 
-- 
$0.9 
10.2%
$0.5 
-- 
-- | 2003-- 
-- 
$0.2 
10.5%
$0.5 
-- 
-- | 2004-- 
-- 
$0.2 
11.6%
$12.2 
-- 
-- | 2005--
--
--
--
$35.6
--
-- | 2006
--
--
--
--
--
--
-- | There-after
$ 23.5 
5.1%
$410.0 
8.9%
-- 
$  6.0 
8.0% | Total
$ 23.5
$411.3
$ 48.8
$  6.0 | Fair Value$ 23.5
$424.5
$ 48.8
$ 10.6
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | ------------------------------------ | ------------------------------------- | --------------------------- | ------------------------- | ------------------------------------------------------ | --------------------------------- | -------------------------------------

* Interest is based upon, at our option, a one-, two-, three-, or six-month Eurodollar rate plus a margin of 2.5% for our term loan and a one-, two-, three-, or six-month Eurodollar rate plus a margin ranging from 1.25% to 2.50%, or the prime rate plus a margin ranging from zero to 1.25% for our revolving credit facility.  The applicable margin is dependent upon Aztar's outstanding indebtedness and operating cash flow.

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Stock Option Accounting
As permitted under generally accepted accounting principles, we have elected to follow Accounting Principles Board Opinion No. 25 entitled "Accounting for Stock Issued to Employees" and related Interpretations in accounting for our stock-based employee compensation arrangements because the alternative fair-value-based method of accounting provided for under Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123 entitled "Accounting for Stock-Based Compensation" requires use of option valuation models that were not developed for use in valuing employee stock options.  Under APB 25, because the exercise price of our stock options equals the market price of the underlying stock on the date of grant, no compensation expense is recognized.  Under SFAS 123, the estimated fair value of our stock options would be amortized to expense over their vesting period.  See "Note 11. Stock Options" to our Consolidated Financial Statements for the assumptions used in arriving at fair value and for other information.
Pro forma information regarding net income and earnings per share as if we had accounted for our stock options under the fair-value-based method of accounting is as follows (in millions except for earnings per share information):



|                                                                                                                                     | 2001                   | 2000                   | 1999                 
|------------------------------------------------------------------------------------------------------------------------------------ | ---------------------- | ---------------------- | ---------------------
|Pro forma net income
Pro forma earnings per share:
  Net income per common share
  Net income per common share
    assuming dilution | $ 55.0 
$ 1.45 
$ 1.41 | $ 50.4 
$ 1.21 
$ 1.17 | $ 4.8  
$ .09  
$ .09

Recent Accounting Pronouncements
In July 2001, the Financial Accounting Standards Board issued Statement No. 141, "Business Combinations" and Statement No. 142, "Goodwill and Other Intangible Assets." SFAS 141 is effective as follows: (a) use of the pooling-of-interests method is prohibited for business combinations initiated after June 30, 2001; and (b) the provisions of SFAS 141 also apply to all business combinations accounted for by the purchase method that are completed after June 30, 2001.  There are also transition provisions that apply to business combinations completed before July 1, 2001, that were accounted for by the purchase method.  SFAS 142 is effective for fiscal years beginning after December 15, 2001 and applies to all goodwill and other intangible assets recognized in an entity's statement of financial position at that date, regardless of when those assets were initially recognized.  We have determined that at January 3, 2002, we have no purchased goodwill in our balance sheet.  Effective January 4, 2002, we will cease amortization of the cost of our initial gaming licenses because we have determined, under the criteria established in SFAS 142, that these assets have an indefinite life.  Amortization expense related to the cost of our initial gaming licenses was $2.7 million in 2001 and $2.6 million in both 2000 and 1999.  We have performed an impairment test of our initial gaming licenses at January 4, 2002 and have concluded that there was no impairment.
In August 2001, the Financial Accounting Standards Board issued Statement No. 143, "Accounting for Obligations Associated with the Retirement of Long-Lived Assets."  The objectives of SFAS 143 are to establish accounting standards for the

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recognition and measurement of an asset retirement obligation and its associated asset retirement cost.  SFAS 143 is effective for fiscal years beginning after June 15, 2002.  Based upon a preliminary review, we do not have an asset retirement obligation at January 3, 2002.
In October 2001, the Financial Accounting Standards Board issued Statement No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." SFAS 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets, and broadens the presentation of discontinued operations to include more disposal transactions.  SFAS 144 is effective for fiscal years beginning after December 15, 2001 and, generally, is to be applied prospectively.  SFAS 144 has no effect on our consolidated financial position at January 3, 2002 or on our results of operations or cash flows for the periods then ended.
Private Securities Litigation Reform Act
Certain information included in Aztar's Form 10-K for the year ended January 3, 2002 and other materials filed or to be filed by us with 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 2001 annual report) contains statements that are forward-looking. These include forward-looking statements relating to the following activities, among others: operation and expansion of existing properties, 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; and use of derivatives.  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 the SEC: those factors relating to terrorist activities, construction and development factors, including zoning issues, environmental restrictions, soil conditions, weather and other hazards, site access matters and building permit issues; 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; 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, judicial actions and political uncertainties, including gaming legislation and taxation; and the effects of 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, as such, speak only as of the date made.

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SUMMARY OF SELECTED FINANCIAL DATA (a)
Aztar Corporation and Subsidiaries
For the Five Years Ended January 3, 2002

|Operations
 Data (in
 thousands)
Revenues
Rent
Depreciation
 and  amortization
Operating
 income
Net interest
 income and
 (expense)
Equity in
 unconsolidated
 partnership's
 loss
Income taxes
Income before
 extraordinary
 items
Extraordinary
 items
Net income 
Common Stock
 Data (per
 share)
Income before
 extraordinary
 items:
  Income per
   common share
  Income per
   common share
   assuming
   dilution
Cash dividends
 declared
Equity | 2001 
$  849,463 
(18,635)
(51,813)
131,408 
(37,623)
(3,702)
(32,074)
58,009 
-- 
58,009 
$     1.53 
1.48 
-- 
12.38 | 2000 
$  848,088 
(17,253)
(53,924)
115,475 
(40,565)
(4,215)
(17,578)
53,117 
-- 
53,117 
$     1.28 
1.23 
-- 
10.92 | 1999 
$  800,314 
(17,122)
(53,908)
89,594 
(51,282)
(3,961)
(12,222)
22,129 
(15,740)
6,389 
$      .48 
..46 
-- 
9.96 | 1998 
$  806,136 
(19,373)
(53,493)
81,646 
(57,434)
(4,336)
(8,368)
11,508 
(1,346)
10,162 
$      .24 
..23 
-- 
10.02 | 1997 
$  782,357 
(21,379)
(51,508)
67,392 
(60,517)
(4,618)
2,185 
 4,442 
-- 
4,442 
$      .08 
..08 
-- 
9.82
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------ | -----------------------------------------------------------------------------------------------------------------



F-56



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SUMMARY OF SELECTED FINANCIAL DATA (a) (Continued)
Aztar Corporation and Subsidiaries
For the Five Years Ended January 3, 2002

|Balance Sheet
 Data (in
 thousands at
 year end)
Total assets
Long-term debt
Series B ESOP
 convertible
 preferred
 stock
Shareholders'
 equity
Other Financial
 Data (in
 thousands)
Net cash
 provided by
 (used in)
 operating
 activities
Net cash 
 provided by
 (used in)
 investing
 activities
Net cash
 provided by
 (used in)
 financing
 activities
EBITDAR(b) | 2001 
$1,060,956 
458,659 
5,959 
453,841 
$  138,469 
(57,422)
(37,005)
201,856                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | 2000 
$1,011,696 
463,011 
6,400 
422,706 
$  123,631 
(30,499)
(99,232)
186,652 | 1999 
$1,049,007 
497,628 
7,003 
427,910 
$   80,667 
(34,012)
(51,075)
160,624 | 1998 
$1,077,702 
487,543 
7,147 
454,101 
$   86,401 
(30,640)
(43,290)
154,512 | 1997 
$1,091,496 
491,932 
6,593 
444,038 
$   49,489 
(23,327)
(24,164)
140,279
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | --------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(a)                                                                                                                                                                                                                                                                                                                                                                       | See NOTES 1., 5., 13. and 18. of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|(b)                                                                                                                                                                                                                                                                                                                                                                       | EBITDAR means operating income before depreciation and amortization, and rent.  EBITDAR should not be construed as a substitute for operating income, or as a better indicator of liquidity than cash flow from operating activities, as they are determined in accordance with generally accepted accounting principles.  EBITDAR information has been included for those investors who find it a useful tool for measuring operating performance.  The Company's calculation of EBITDAR may not be comparable to similarly titled measures reported by other companies.



F-57



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REPORT OF INDEPENDENT ACCOUNTANTS
ON FINANCIAL STATEMENT SCHEDULE

To the Shareholders and Board of Directors
Aztar Corporation
Our audits of the consolidated financial statements referred to in our report dated February 4, 2002, except for notes 3, 7, and 18, as to which the date is February 28, 2002, appearing in this 2001 Annual Report on Form 10-K also included an audit of the financial statement schedule listed in Item 14(a)(2) of this Form 10-K.  In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.
PRICEWATERHOUSECOOPERS LLP
Phoenix, Arizona
February 4, 2002

S-1



---



SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
AZTAR CORPORATION AND SUBSIDIARIESFor the Years Ended January 3, 2002, December 28, 2000 and December 30, 1999
(in thousands)



|COLUMN A   
  Description
Allowance for doubtful
  accounts receivable:
  2001
  2000
  1999
Deferred income tax
  asset valuation
  allowance:
  2001
  2000
  1999
Valuation allowance for
  CRDA deposits, CRDA
  bonds and CRDA other
  investments:
  2001
  2000
  1999 | COLUMN B 
Balance at 
Beginning  of Year 
$ 22,655 
24,744 
25,296 
$  2,668 
2,385 
3,343 
$  8,191 
6,575 
6,452 | COLUMN C Additions 
$  4,075(a) 
4,021(a) 
7,405(a) 
$      7(a) 
641(a) 
301(a) 
$  1,301(a) 
1,638(a) 
953(a) | COLUMN D Deductions 
$  6,152(b) 
6,110(b) 
7,957(b) 
$    707(c) 
358(c) 
1,259(c) 
$     --    
22(d) 
830(d) | COLUMN E 
Balance at  
End of    Year 
$ 20,578 
22,655 
24,744 
$  1,968 
2,668 
2,385 
$  9,492 
8,191 
6,575
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------



|(a)
(b)
(c)
(d) | Charged to costs and expenses.
Related assets charged against the account.
Reflects reductions of $312,000, $242,000 and $1,173,000 in 2001, 2000 and 
1999, respectively, with a corresponding decrease in income tax expense.  The 
remainder of the reductions in 2001, 2000 and 1999 represented charges of 
deferred tax assets against the valuation allowance account.
Reflects transfer to unamortized discount for CRDA bonds.
|--------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



S-2



---



EXHIBIT INDEX

|  | 3.1     | Restated Certificate of Incorporation, filed as Exhibit 3.1 to Aztar Corporation's Registration Statement No. 33-32009 and incorporated herein by reference.                                                                                                                                                                                                                             
|- | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  | 3.2     | Second Amended and Restated By-Laws of Aztar Corporation, as adopted February 25, 1998, filed as Exhibit 3 to Aztar Corporation's Form 10-Q for the quarter ended April 2, 1998 and incorporated herein by reference.                                                                                                                                                                    
|  | 4.1     | Rights Agreement, dated as of December 14, 1999, between Aztar Corporation and ChaseMellon Shareholder Services, L.L.C., as Rights Agent, filed as Exhibit 1 to Aztar Corporation's Registration Statement on Form 8-A, filed on December 15, 1999, and incorporated herein by reference.                                                                                                
|  | 4.2     | Indenture, dated as of May 3, 1999, between Aztar Corporation and U.S. Bank National Association, as Trustee, relating to the 8 7/8% Senior Subordinated Notes due 2007 of Aztar Corporation, filed as Exhibit 4.5 to Aztar Corporation's Registration Statement No. 333-79371 and incorporated herein by reference.                                                                     
|  | 4.3     | Indenture, dated as of July 27, 2001, between Aztar Corporation and U.S. Bank Trust National Association, as Trustee, relating to the 9% Senior Subordinated Notes due 2011 of Aztar Corporation, filed as Exhibit 4.3 to Aztar Corporation's Registration Statement No. 333-69158 and incorporated herein by reference.                                                                 
|  | 4.4     | For a description of the Series B ESOP Convertible Preferred Stock of Aztar Corporation, refer to the Certificate of Designations, Preferences and Rights of Series B Convertible Preferred Stock of Aztar Corporation filed as Annex XII to the Ramada Inc. Definitive Proxy Statement/Aztar Corporation Prospectus, dated as of November 14, 1989 and incorporated herein by reference.
|  | 10.1    | Amended and Restated Lease (Tropicana Hotel/Casino) between Tropicana Enterprises and Hotel Ramada of Nevada, dated November 1, 1984, filed as Exhibit 10.20 to Ramada Inc.'s 1984 Form 10-K (Commission File Reference Number 1-5440) and incorporated herein by reference.                                                                                                             
|  | 10.2    | Amended and Restated Partnership Agreement by and between the Jaffe Group and Adamar of Nevada, entered into as of November 1, 1984, filed as Exhibit 10.22 to Ramada Inc.'s 1984 Form 10-K (Commission File Reference Number 1-5440) and incorporated herein by reference.                                                                                                              
|* | 10.3(a) | Severance Agreement, dated July 17, 1995, by and between Aztar Corporation and Paul E. Rubeli, filed as Exhibit 10.1 to Aztar Corporation's Form 10-Q for the quarter ended September 28, 1995 and incorporated herein by reference.                                                                                                                                                     

*  Indicates a management contract or compensatory plan or arrangement.

E-1



---



EXHIBIT INDEX

|* | 10.3(b) | Amendment to Severance Agreement, dated March 23, 1998, by and between Aztar Corporation and Paul E. Rubeli, filed as Exhibit 10.1 to Aztar Corporation's Form 10-Q for the quarter ended April 2, 1998 and incorporated herein by reference.          
|- | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | 10.3(c) | Severance Agreement, dated July 17, 1995, by and between Aztar Corporation and Robert M. Haddock, filed as Exhibit 10.2 to Aztar Corporation's Form 10-Q for the quarter ended September 28, 1995 and incorporated herein by reference.                
|* | 10.3(d) | Amendment to Severance Agreement, dated March 24, 1998, by and between Aztar Corporation and Robert M. Haddock, filed as Exhibit 10.2 to Aztar Corporation's Form 10-Q for the quarter ended April 2, 1998 and incorporated herein by reference.       
|* | 10.3(e) | Severance Agreement, dated July 18, 1995, by and between Aztar Corporation and Nelson W. Armstrong, Jr., filed as Exhibit 10.3 to Aztar Corporation's Form 10-Q for the quarter ended September 28, 1995 and incorporated herein by reference.         
|* | 10.3(f) | Amendment to Severance Agreement, dated March 24, 1998, by and between Aztar Corporation and Nelson W. Armstrong, Jr., filed as Exhibit 10.3 to Aztar Corporation's Form 10-Q for the quarter ended April 2, 1998 and incorporated herein by reference.
|* | 10.3(g) | Severance Agreement, dated July 24, 1995, by and between Aztar Corporation and Meridith P. Sipek, filed as Exhibit 10.4 to Aztar Corporation's Form 10-Q for the quarter ended September 28, 1995 and incorporated herein by reference.                
|* | 10.3(h) | Amendment to Severance Agreement, dated March 24, 1998, by and between Aztar Corporation and Meridith P. Sipek, filed as Exhibit 10.4 to Aztar Corporation's Form 10-Q for the quarter ended April 2, 1998 and incorporated herein by reference.       
|* | 10.3(i) | Severance Agreement, dated July 25, 1995, by and between Aztar Corporation and Joe Cole, filed as Exhibit 10.5 to Aztar Corporation's Form 10-Q for the quarter ended September 28, 1995 and incorporated herein by reference.                         
|* | 10.3(j) | Amendment to Severance Agreement, dated March 24, 1998, by and between Aztar Corporation and Joe Cole, filed as Exhibit 10.5 to Aztar Corporation's Form 10-Q for the quarter ended April 2, 1998 and incorporated herein by reference.                
|* | 10.3(k) | Severance Agreement, dated July 17, 1995, by and between Aztar Corporation and Neil A. Ciarfalia, filed as Exhibit 10.6 to Aztar Corporation's Form 10-Q for the quarter ended September 28, 1995 and incorporated herein by reference.                

*  Indicates a management contract or compensatory plan or arrangement.

E-2



---



EXHIBIT INDEX

|* | 10.3(l) | Amendment to Severance Agreement, dated March 24, 1998, by and between Aztar Corporation and Neil A. Ciarfalia, filed as Exhibit 10.6 to Aztar Corporation's Form 10-Q for the quarter ended April 2, 1998 and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                           
|- | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  | 10.4(a) | Amended and Restated Reducing Revolving Loan Agreement, dated as of May 28, 1998, among Aztar Corporation and the lenders therein named; Bankers Trust Company and Societe Generale, as documentation agents; Bank of Scotland, Credit Lyonnais Los Angeles Branch and PNC Bank, National Association, as co-agents; and Bank of America National Trust and Savings Association, as administrative agent, filed as Exhibit 10.1 to Aztar Corporation's Form 10-Q for the quarter ended July 2, 1998 and incorporated herein by reference.                                                  
|  | 10.4(b) | Amendment No. 1, dated October 8, 1998, to Amended and Restated Reducing Revolving Loan Agreement, dated as of May 28, 1998, among Aztar Corporation and the lenders therein named; Bankers Trust Company and Societe Generale, as documentation agents; Bank of Scotland, Credit Lyonnais Los Angeles Branch and PNC Bank, National Association, as co-agents; and Bank of America National Trust and Savings Association, as administrative agent, filed as Exhibit 10.1 to Aztar Corporation's Form 10-Q for the quarter ended October 1, 1998 and incorporated herein by reference.    
|  | 10.4(c) | Amendment No. 2, dated March 5, 1999, to Amended and Restated Reducing Revolving Loan Agreement, dated as of May 28, 1998, among Aztar Corporation and the lenders therein named; Bankers Trust Company and Societe Generale, as documentation agents; Bank of Scotland, Credit Lyonnais Los Angeles Branch and PNC Bank, National Association, as co-agents; and Bank of America National Trust and Savings Association, as administrative agent, filed as Exhibit 10.1 to Aztar Corporation's Form 10-Q for the quarter ended April 1, 1999 and incorporated herein by reference.        
|  | 10.4(d) | Amendment No. 3, dated October 26, 1999, to Amended and Restated Reducing Revolving Loan Agreement, dated as of May 28, 1998, among Aztar Corporation and the lenders therein named; Bankers Trust Company and Societe Generale, as documentation agents; Bank of Scotland, Credit Lyonnais Los Angeles Branch and PNC Bank, National Association, as co-agents; and Bank of America National Trust and Savings Association, as administrative agent, filed as Exhibit 10.1 to Aztar Corporation's Form 10-Q for the quarter ended September 30, 1999 and incorporated herein by reference.

*  Indicates a management contract or compensatory plan or arrangement.

E-3



---



EXHIBIT INDEX

|  | 10.4(e) | Amendment No. 4, dated March 17, 2000, to Amended and Restated Reducing Revolving Loan Agreement, dated as of May 28, 1998, among Aztar Corporation and the lenders therein named; Bankers Trust Company and Societe Generale, as documentation agents; Bank of Scotland, Credit Lyonnaise Los Angeles Branch and PNC Bank, National Association, as co-agents; and Bank of America National Trust and Savings Association, as administrative agent, filed as Exhibit 10.1 to Aztar Corporation's Form 10-Q for the quarter ended March 30, 2000 and incorporated herein by reference.     
|- | ------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  | 10.4(f) | Amendment No. 5, dated October 11, 2000, to Amended and Restated Reducing Revolving Loan Agreement, dated as of May 28, 1998, among Aztar Corporation and the lenders therein named; Bankers Trust Company and Societe Generale, as documentation agents; Bank of Scotland, Credit Lyonnais Los Angeles Branch and PNC Bank, National Association, as co-agents; and Bank of America National Trust and Savings Association, as administrative agent, filed as Exhibit 10.1 to Aztar Corporation's Form 10-Q for the quarter ended September 28, 2000 and incorporated herein by reference.
|  | 10.4(g) | Amendment No. 6, dated June 29, 2001, to Amended and Restated Reducing Revolving Loan Agreement, dated as of May 28, 1998, among Aztar Corporation and the lenders therein named; Bankers Trust Company and Societe Generale, as documentation agents; Bank of Scotland, Credit Lyonnais Los Angeles Branch and PNC Bank, National Association, as co-agents; and Bank of America National Trust and Savings Association as administrative agent, filed as Exhibit 10.1 to Aztar Corporation's Form 8-K dated July 11, 2001 and incorporated herein by reference.                          
|  | 10.4(h) | Term Loan Agreement, dated as of May 28, 1998, among Aztar Corporation and the lenders therein named; and Bank of America National Trust and Savings Association, as administrative agent, filed as Exhibit 10.2 to Aztar Corporation's Form 10-Q for the quarter ended July 2, 1998 and incorporated herein by reference.                                                                                                                                                                                                                                                                 
|  | 10.4(i) | Restated Amendment No. 1, dated October 27, 1999, to Term Loan Agreement, dated as of May 28, 1998, among Aztar Corporation and the lenders therein named; and Bank of America National Trust and Savings Association, as administrative agent, filed as Exhibit 10.2 to Aztar Corporation's Form 10-Q for the quarter ended September 30, 1999 and incorporated herein by reference.                                                                                                                                                                                                      
|* | 10.5    | Aztar Corporation 1989 Stock Option and Incentive Plan, filed as Exhibit 4 to Aztar Corporation's Registration Statement No. 33-32399 and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                                                

*  Indicates a management contract or compensatory plan or arrangement.

E-4



---



EXHIBIT INDEX

|  | 10.6(a) | Agreement and Plan of Merger, dated as of April 17, 1989, among New World Hotels (U.S.A.), Inc., RI Acquiring Corp. and Ramada Inc., as amended and Restated as of October 23, 1989, filed as Exhibit 2.1 to Aztar Corporation's Registration Statement No. 33-32009 and incorporated herein by reference.                                                             
|- | ------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  | 10.6(b) | Letter, dated as of October 23, 1989, from Ramada Inc. to New World Hotels (U.S.A.), Inc. regarding certain franchising matters and hotel projects, filed as Exhibit 2.1(b) to Aztar Corporation's Registration Statement No. 33-32009 and incorporated herein by reference.                                                                                           
|  | 10.7    | Reorganization Agreement, dated as of April 17, 1989, between Ramada Inc. and Aztar Corporation, as amended and restated as of October 23, 1989, filed as Exhibit 2.2 to Aztar Corporation's Registration Statement No. 33-32009 and incorporated herein by reference.                                                                                                 
|  | 10.8    | Tax Sharing Agreement, dated as of April 17, 1989, among New World Hotels (U.S.A), Inc., Ramada Inc. and Aztar Corporation, as amended and restated as of October 23, 1989, filed as Exhibit 2.3 to Aztar Corporation's Registration Statement No. 33-32009 and incorporated herein by reference.                                                                      
|  | 10.9    | Guaranty and Acknowledgement Agreement, dated as of April 17, 1989, among New World Development Company Limited, New World Hotels (Holdings) Limited, New World Hotels (U.S.A.), Inc. and RI Acquiring Corp., filed as Exhibit 2.4 to Aztar Corporation's Registration Statement No. 33-29562 and incorporated herein by reference.                                    
|  | 10.10   | Master Consent Agreement, dated July 18, 1989, by and among Ramada Inc., Adamar of Nevada, Hotel Ramada of Nevada, Adamar of New Jersey, Inc., Aztar Corporation, Tropicana Enterprises, Trop C.C. and the Jaffe Group, with attached exhibits, filed as Exhibit 10.50 to Aztar Corporation's Registration Statement No. 33-29562 and incorporated herein by reference.
|* | 10.11   | Aztar Corporation 1990 Nonemployee Directors Stock Option Plan, as amended and restated effective March 15, 1991, filed as Exhibit A to Aztar Corporation's 1991 definitive Proxy Statement and incorporated herein by reference.                                                                                                                                      
|* | 10.12   | Aztar Corporation Nonqualified Retirement Plan for Senior Executives, dated September 5, 1990, filed as Exhibit 10.2 to Aztar Corporation's Form 10-Q for the quarter ended September 27, 1990 and incorporated herein by reference.                                                                                                                                   

*  Indicates a management contract or compensatory plan or arrangement.

E-5



---



EXHIBIT INDEX

|   | 10.13    | Second Amended and Restated Loan Agreement, dated October 4, 1994, among Tropicana Enterprises, Hotel Ramada of Nevada and the banks therein named; Societe Generale and Midlantic Bank, N.A., as lead managers; Bank One, Arizona, N A and Credit Lyonnais, as co-agents; Bankers Trust Company, as co-managing agent; and, Bank of America National Trust and Savings Association, as managing agent, filed as Exhibit 10.14 to Aztar Corporation's 1994 Form 10-K and incorporated herein by reference.                                                                                             
|-- | -------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | 10.13(a) | Amendment No. 1, dated as of May 28, 1998, to Second Amended and Restated Loan Agreement dated as of October 4, 1994, among Tropicana Enterprises, Hotel Ramada of Nevada and the banks therein named; Bankers Trust Company and Societe Generale, as documentation agents; Bank of Scotland, Credit Lyonnais Los Angeles Branch and PNC Bank, National Association, as co-agents; and Bank of America National Trust and Savings Association, as administrative agent, filed as Exhibit 10.3 to Aztar Corporation's Form 10-Q for the quarter ended July 2, 1998 and incorporated herein by reference.
|** | 10.13(b) | Allonge to Master Note, dated as of June 29, 2001, executed by Tropicana Enterprises in favor of Bank of America, N.A., as Administrative Agent for the Banks referred to in the Note, in connection with that certain Master Note dated May 28, 1998.                                                                                                                                                                                                                                                                                                                                                 
|*  | 10.14    | Summary of deferred compensation program for designated executives of Ramada, dated November 10, 1983, filed as Exhibit 10(r) to Ramada Inc.'s 1983 Form 10-K (Commission File Reference Number 1-5440) and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                          
|*  | 10.15    | Deferred Compensation Agreements entered into by and between Ramada and designated executives (including each Executive Officer), dated December 1, 1983, 1984 or 1985, filed as Exhibits 10.60(a) through (w) to Aztar Corporation's Registration Statement No. 33-51008 and incorporated herein by reference.                                                                                                                                                                                                                                                                                        
|*  | 10.16    | Deferred Compensation Plan for Directors, dated December 1, 1983, filed as Exhibit 10(t) to Ramada Inc.'s 1983 Form 10-K (Commission File Reference Number 1-5440) and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                                                                               
|*  | 10.17    | Deferred Compensation Agreements entered into by and between Ramada and certain outside Directors as of December 1, 1983, filed as Exhibits 10.62(a),(b),(c) and (d) to Aztar Corporation's Registration Statement No. 33-51008 and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                                  
|   | 10.18    | Option Agreement, dated February 2, 1998, among Adamar of Nevada, parties constituting the Jaffe Group, Aztar Corporation and Hotel Ramada of Nevada, filed as Exhibit 99.2 to Aztar Corporation's Form 8-K/A, dated February 3, 1998, and incorporated herein by reference.                                                                                                                                                                                                                                                                                                                           

*  Indicates a management contract or compensatory plan or arrangement.
** Filed herewith

E-6



---



EXHIBIT INDEX

|   | 10.18(a) | First Amendment to Option Agreement, dated January 28, 1999, to Option Agreement, dated February 2, 1998, by and among Adamar of Nevada, parties constituting the Jaffe Group, Aztar Corporation and Hotel Ramada of Nevada, filed as Exhibit 10.19(a) to Aztar Corporation's 1998 Form 10-K and incorporated herein by reference.
|-- | -------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|*  | 10.19    | Aztar Corporation 1999 Employee Stock Option and Incentive Plan, filed as Exhibit A to Aztar Corporation's 1999 definitive Proxy Statement and incorporated herein by reference.                                                                                                                                                  
|** | 10.20    | Aztar Corporation 2000 Nonemployee Directors Stock Option Plan, amended and restated effective December 5, 2001.                                                                                                                                                                                                                  
|** | 21.      | Subsidiaries of Aztar Corporation.                                                                                                                                                                                                                                                                                                
|** | 23.      | Consent of PricewaterhouseCoopers LLP                                                                                                                                                                                                                                                                                             

*  Indicates a management contract or compensatory plan or arrangement.
** Filed herewith

E-7



---