SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 3, 1997
-------------
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 86-0636534
- ----------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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
----------------
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
----- -----
At July 31, 1997, the registrant had outstanding 45,159,758 shares of
its common stock, $.01 par value.
<PAGE>
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Page
----
Consolidated Balance Sheets at July 3, 1997 and
January 2, 1997 3
Consolidated Statements of Operations for the quarters
and six months ended July 3, 1997 and June 27, 1996 5
Consolidated Statements of Cash Flows for the six months
ended July 3, 1997 and June 27, 1996 7
Consolidated Statements of Shareholders' Equity for the
six months ended July 3, 1997 and June 27, 1996 9
Notes to Consolidated Financial Statements 10
2
<PAGE>
<PAGE>
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (unaudited)
---------------------------------------
(in thousands, except share data)
<CAPTION>
July 3, January 2,
1997 1997
---------- ----------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 43,200 $ 44,131
Accounts receivable, net 39,315 41,723
Refundable income taxes -- 1,201
Inventories 7,161 7,508
Prepaid expenses 11,062 9,772
Deferred income taxes, net 8,910 8,985
---------- ----------
Total current assets 109,648 113,320
Investments in and advances to
unconsolidated partnership 9,855 10,360
Other investments 26,839 26,697
Property and equipment:
Buildings, riverboats and equipment, net 811,561 827,103
Land 94,035 95,747
Construction in progress 9,287 3,820
Leased under capital leases, net 814 389
---------- ----------
915,697 927,059
Deferred income taxes, net 1,941 2,565
Other deferred charges and assets 39,071 39,581
---------- ----------
$1,103,051 $1,119,582
========== ==========
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
<PAGE>
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (unaudited) (continued)
---------------------------------------
(in thousands, except share data)
<CAPTION>
July 3, January 2,
1997 1997
---------- ----------
<S> <C> <C>
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accruals $ 54,967 $ 66,048
Accrued payroll and employee benefits 23,185 22,571
Accrued interest payable 13,570 13,288
Income taxes payable 2,437 1,112
Current portion of long-term debt 18,643 12,960
Current portion of other long-term
liabilities 3,178 4,259
---------- ----------
Total current liabilities 115,980 120,238
Long-term debt 509,805 527,006
Other long-term liabilities 25,191 27,042
Contingencies and commitments
Series B ESOP convertible preferred stock
(redemption value $6,316 and $7,226) 6,316 6,022
Shareholders' equity:
Common stock, $.01 par value (45,148,500
and 45,000,287 shares outstanding) 491 489
Paid-in capital 411,820 411,158
Retained earnings 50,624 44,846
Less: Treasury stock (17,124) (17,102)
Unearned compensation (52) (117)
---------- ----------
Total shareholders' equity 445,759 439,274
---------- ----------
$1,103,051 $1,119,582
========== ==========
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
<PAGE>
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
For the periods ended July 3, 1997 and June 27, 1996
---------------------------------------------------------------
(in thousands, except per share data)
<CAPTION>
Second Quarter Six Months
------------------ ------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues
Casino $164,518 $158,530 $321,666 $308,830
Rooms 14,033 12,008 26,599 23,133
Food and beverage 13,117 12,693 25,849 24,881
Other 8,719 6,262 16,029 12,855
-------- -------- -------- --------
200,387 189,493 390,143 369,699
Costs and expenses
Casino 73,977 77,244 148,462 150,240
Rooms 7,927 6,887 15,253 13,315
Food and beverage 14,121 13,012 27,327 25,615
Other 6,323 6,047 12,074 12,292
Marketing 21,092 21,720 40,840 40,004
General and administrative 18,484 17,409 35,871 34,615
Utilities 3,474 3,524 6,928 6,563
Repairs and maintenance 6,050 5,776 11,844 11,492
Provision for doubtful accounts 3,051 743 5,205 2,114
Property taxes and insurance 6,237 5,915 12,357 11,440
Rent 5,246 3,449 9,782 6,719
Depreciation and amortization 12,655 12,303 25,396 24,213
Preopening costs -- 76 -- 76
-------- -------- -------- --------
178,637 174,105 351,339 338,698
-------- -------- -------- --------
Operating income 21,750 15,388 38,804 31,001
Interest income 517 628 1,027 1,217
Interest expense (15,754) (14,603) (31,555) (28,245)
-------- -------- -------- --------
Income before other items and
income taxes 6,513 1,413 8,276 3,973
Equity in unconsolidated
partnership's loss (1,158) (1,214) (2,324) (2,403)
-------- -------- -------- --------
Income before income taxes 5,355 199 5,952 1,570
Income taxes (1,926) (159) 154 (761)
-------- -------- -------- --------
Net income $ 3,429 $ 40 $ 6,106 $ 809
======== ======== ======== ========
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
<PAGE>
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)(continued)
For the periods ended July 3, 1997 and June 27, 1996
---------------------------------------------------------------
(in thousands, except per share data)
<CAPTION>
Second Quarter Six Months
------------------ ------------------
1997 1996 1997 1996
-------- ------- -------- --------
<S> <C> <C> <C> <C>
Net income per common and common
equivalent share $ .07 $ -- $ .13 $ .01
Net income per common share
assuming full dilution $ .07 $ -- $ .12 $ .01
Weighted average common shares applicable to:
Net income per common and common
equivalent share 45,746 39,694 45,758 39,464
Net income per common share
assuming full dilution 46,661 40,684 46,676 40,644
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
<PAGE>
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
For the periods ended July 3, 1997 and June 27, 1996
---------------------------------------------------------------
(in thousands)
<CAPTION>
Six Months
---------------------
1997 1996
--------- ---------
<S> <C> <C>
Cash Flows from Operating Activities
Net income $ 6,106 $ 809
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 26,726 25,812
Provision for losses on accounts receivable 5,205 2,114
Loss on reinvestment obligation 510 277
Rent expense (557) (441)
Distribution in excess of equity in income
of partnership 505 578
Deferred income taxes 699 334
Change in assets and liabilities:
(Increase) decrease in accounts receivable (2,076) (5,555)
(Increase) decrease in refundable income taxes 1,201 (44)
(Increase) decrease in inventories and
prepaid expenses (2,022) (1,767)
Increase (decrease) in accounts payable,
accrued expenses and income taxes payable (8,809) (481)
Other items, net 360 1,711
--------- ---------
Net cash provided by (used in) operating activities 27,848 23,347
--------- ---------
Cash Flows from Investing Activities
Payments received on notes receivable 634 556
Reduction in other investments 488 193
Purchases of property and equipment (13,329) (67,122)
Additions to other long-term assets (3,485) (2,637)
--------- ---------
Net cash provided by (used in) investing activities (15,692) (69,010)
--------- ---------
Cash Flows from Financing Activities
Proceeds from issuance of long-term debt 102,100 96,700
Proceeds from issuance of common stock 538 1,146
Principal payments on long-term debt (114,323) (44,516)
Principal payments on other long-term liabilities (639) (3,988)
Debt issuance costs (170) --
Preferred stock dividend (352) (368)
Redemption of preferred stock (241) (215)
--------- ---------
Net cash provided by (used in) financing activities (13,087) 48,759
--------- ---------
Net increase (decrease) in cash and cash equivalents (931) 3,096
Cash and cash equivalents at beginning of period 44,131 26,527
--------- ---------
Cash and cash equivalents at end of period $ 43,200 $ 29,623
========= =========
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
<PAGE>
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)(continued)
For the periods ended July 3, 1997 and June 27, 1996
---------------------------------------------------------------
(in thousands)
<CAPTION>
Six Months
-------------------
1997 1996
-------- --------
<S> <C> <C>
Supplemental Cash Flow Disclosures
Summary of non-cash investing and financing activities:
Reduction in land and other long-term liabilities $ 2,000 $ --
Capital lease obligations incurred for property
and equipment 552 --
Tax benefit from stock options and preferred stock
dividend 165 397
Issuance of restricted stock -- 136
Forfeiture of restricted stock 22 13
Cash flow during the period for the following:
Interest paid, net of amount capitalized $ 29,986 $ 29,066
Income taxes paid (refunded) (3,543) 1,073
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
<PAGE>
<TABLE>
AZTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited)
For the periods ended July 3, 1997 and June 27, 1996
---------------------------------------------------------------
(in thousands, except number of shares)
<CAPTION>
Six Months
--------------------
1997 1996
-------- --------
<S> <C> <C>
Common stock:
Beginning balance $ 489 $ 422
Stock options exercised for 136,348 and
210,570 shares 2 2
-------- --------
Ending balance 491 424
-------- --------
Paid-in capital:
Beginning balance 411,158 352,221
Stock options exercised 536 1,144
Tax benefit from stock options exercised 126 343
Restricted stock -- 136
-------- --------
Ending balance 411,820 353,844
-------- --------
Retained earnings:
Beginning balance 44,846 24,922
Preferred stock dividend and losses on redemption,
net of income tax benefit of $39 and $54 (328) (324)
Net income 6,106 809
-------- --------
Ending balance 50,624 25,407
-------- --------
Treasury stock:
Beginning balance (17,102) (17,027)
Forfeiture of 3,334 and 2,000 shares
of restricted stock (22) (13)
-------- --------
Ending balance (17,124) (17,040)
-------- --------
Unearned compensation:
Beginning balance (117) (879)
Restricted stock -- (136)
Amortization 43 508
Forfeiture of restricted stock 22 13
-------- --------
Ending balance (52) (494)
-------- --------
$445,759 $362,141
======== ========
</TABLE>
[FN]
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
Note 1: General
- ----------------
The consolidated financial statements reflect all adjustments, such adjust-
ments being normal recurring accruals, which are necessary, in the opinion of
management, for the fair presentation of the results of the interim periods;
interim results, however, may not be indicative of the results for the full
year.
The notes to the interim consolidated financial statements are presented to
enhance the understanding of the financial statements and do not necessarily
represent complete disclosures required by generally accepted accounting
principles. There was no interest capitalized during the quarter or six
months ended 1997. The interest that was capitalized during the quarter and
six months ended 1996 was $1,180,000 and $2,723,000, respectively.
Capitalized costs related to various development projects, included in other
deferred charges and assets, were $311,000 at July 3, 1997. There were no
capitalized costs related to development projects at January 2, 1997. For
additional information regarding significant accounting policies, long-term
debt, lease obligations, and other matters applicable to the Company,
reference should be made to the Company's Annual Report to Shareholders for
the year ended January 2, 1997.
Certain reclassifications have been made in the 1996 Consolidated Statement
of Operations in order to be comparable with the 1997 presentation.
Note 2: Investments in and Advances to Unconsolidated Partnership
- -----------------------------------------------------------------
<TABLE>
Following are summarized operating results for the Company's unconsolidated
partnership, accounted for using the equity method for the periods ended
July 3, 1997 and June 27, 1996 (in thousands):
<CAPTION>
Second Quarter Six Months
------------------- -------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues $ 4,151 $ 4,153 $ 8,305 $ 8,308
Operating expenses (683) (746) (1,367) (1,430)
-------- -------- -------- --------
Operating income 3,468 3,407 6,938 6,878
Interest expense (1,359) (1,408) (2,733) (2,828)
-------- -------- -------- --------
Net income $ 2,109 $ 1,999 $ 4,205 $ 4,050
======== ======== ======== ========
</TABLE>
<TABLE>
The Company's share of the above operating results, after intercompany
eliminations, is as follows (in thousands):
<CAPTION>
Second Quarter Six Months
------------------- -------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Equity in unconsolidated
partnership's loss $ (1,158) $ (1,214) $ (2,324) $ (2,403)
</TABLE>
10
<PAGE>
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)
Note 3: Long-term Debt
- -----------------------
<TABLE>
At July 3, 1997 and January 2, 1997, long-term debt included (in thousands):
<CAPTION>
1997 1996
-------- --------
<C> <C> <C>
11% Senior Subordinated Notes Due 2002 $200,000 $200,000
13 3/4% Senior Subordinated Notes Due 2004 177,980 177,904
Reducing revolving credit note ("Credit
Facility"); floating rate, 8.43% at
July 3, 1997; matures December 31, 1999 148,000 160,000
Other notes payable; 7% to 14.6%; maturities
to 2002 1,499 1,521
Obligations under capital leases 969 541
-------- --------
528,448 539,966
Less current portion (18,643) (12,960)
-------- --------
$509,805 $527,006
======== ========
</TABLE>
On March 13, 1997, the Company entered into a supplemental reducing revolving
loan agreement maturing on March 15, 1999 (the "Supplemental Credit
Facility"). The Company has obtained bank commitments under the Supplemental
Credit Facility for $25,000,000, of which $5,000,000 was obtained on June 10,
1997. The Supplemental Credit Facility has terms and imposes restrictions on
the Company similar to the Credit Facility. The availability of funds under
the Supplemental Credit Facility will reduce quarterly beginning on June 30,
1998 by $4,000,000. As of July 3, 1997, there were no borrowings under the
Supplemental Credit Facility.
Note 4: Other Long-term Liabilities
- -------------------------------------
<TABLE>
At July 3, 1997 and January 2, 1997, other long-term liabilities consisted of
(in thousands):
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
Accrued rent expense $ 11,754 $ 12,311
Obligation to City of Evansville and
other civic and community organizations 5,675 8,300
Deferred compensation and retirement plans 10,445 10,181
Las Vegas Boulevard beautification assessment 495 509
-------- --------
28,369 31,301
Less current portion (3,178) (4,259)
-------- --------
$ 25,191 $ 27,042
======== ========
</TABLE>
11
<PAGE>
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)
Note 5: Income Taxes
- ----------------------
The Company is responsible, with certain exceptions, for the taxes of Ramada
Inc. ("Ramada") through December 20, 1989. The Internal Revenue Service
("IRS") has completed its examinations of the income tax returns for the
years 1988 through 1991 and has settled for all but one issue. Income taxes
for the six months ended 1997 include a non-recurring tax benefit of
$2,323,000 in the first quarter of 1997, primarily related to cash received
as a result of the settlement agreement between the IRS and Ramada. The IRS
is examining the income tax returns for the years 1992 and 1993. Management
believes that adequate provision for income taxes and interest has been made
in the financial statements.
Note 6: Net Income Per Share
- -----------------------------
Net income per common and common equivalent share is computed based on the
weighted average number of common shares outstanding after consideration of
the dilutive effect of stock options. Net income per common share, assuming
full 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.
Net income for both computations is adjusted for dividends and losses on
redemption on the preferred stock.
Note 7: 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 of Ramada (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 conducted
through its Marie Callender Pie Shops, Inc. subsidiary. In connection with
these matters, the Company has an accrued liability of $3,912,000 and
$3,931,000 at July 3, 1997 and January 2, 1997, respectively.
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 statements.
The Tropicana Las Vegas lease agreement contains a provision that requires
the Company to maintain an additional security deposit with the lessor of
approximately $21,064,000 in cash or a letter of credit if the Tropicana Las
Vegas operation fails to meet certain financial tests. The Company has a 50%
partnership interest in the lessor.
12
<PAGE>
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (continued)
Note 7: Contingencies and Commitments (continued)
- --------------------------------------------------
The Company has severance agreements with certain of its senior executives.
Severance benefits range from a lump-sum cash payment equal to twice the sum
of the executive's annual base salary plus twice the average of the
executive's annual bonuses awarded in the preceding three years plus payment
of the value in his outstanding stock options and vesting and distribution of
any restricted stock to a lump-sum cash payment equal to his base salary. In
certain agreements, the termination must be as a result of a change in
control of the Company. Based upon current salary levels and stock options,
the aggregate commitment under the severance agreements should all these
executives be terminated was approximately $10,600,000 at July 3, 1997.
13
<PAGE>
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis
Financial Condition
On March 13, 1997, the Company entered into a supplemental reducing revolving
loan agreement maturing on March 15, 1999 (the "Supplemental Credit
Facility"). The Company has obtained bank commitments under the Supplemental
Credit Facility for $25 million, of which $5 million was obtained on June 10,
1997. The Supplemental Credit Facility has terms and imposes restrictions on
the Company similar to the Credit Facility. The availability of funds under
the Supplemental Credit Facility will reduce quarterly beginning on June 30,
1998 by $4 million. As of July 3, 1997, there were no borrowings under the
Supplemental Credit Facility.
During the first half of 1997, the Company borrowed $102.1 million and repaid
$114.1 million under the Credit Facility, leaving an outstanding balance of
$148 million at July 3, 1997. The Company's debt to operating cash flow
ratio as calculated under the Credit Facility was 4.19 to 1 at July 3, 1997
and the maximum allowable ratio was 5.20 to 1. The Company's senior debt to
operating cash flow ratio was 1.53 to 1 at July 3, 1997 and the maximum
allowable ratio was 1.95 to 1.
Results of Operations
Six Months Ended July 3, 1997 Compared to Six Months Ended June 27, 1996
The Company's consolidated revenues for the first half of 1997 were $390.1
million, a 6% increase over $369.7 million for the first half of 1996.
Consolidated rooms revenue was $3.5 million higher in the 1997 versus 1996
six-month period primarily as a result of the added rooms capacity at
Tropicana Atlantic City due to the opening in late April 1996 of a new 604-
room hotel tower and the opening of a 250-room hotel at Casino Aztar
Evansville in December 1996. Consolidated operating income for the first
half of 1997 was $38.8 million, a 25% increase over $31.0 million for the
first half of 1996. Improved operating results at Tropicana Atlantic City
and Casino Aztar Evansville were more than sufficient to offset lower
operating results at Tropicana Las Vegas and Ramada Express. The Tropicana
Atlantic City results for the 1996 six-month period were reduced as a result
of severe winter weather, disruption from the construction of the new hotel
tower and the enhancements to the casino and other facilities, and increased
costs associated with promotional programs implemented to increase market
share in anticipation of the opening of the new facilities. Consolidated
operating results for the 1996 six-month period reflected a $641,000 pretax
loss on disposal of assets, included in consolidated general and
administrative expense, related to the construction of new facilities.
Consolidated interest expense increased by $3.3 million or 12% in the 1997
versus 1996 six-month period primarily as a result of discontinuing the
capitalization of interest as the Company's major construction projects were
completed in phases in 1996.
For a discussion of income taxes, refer to "Note 5: Income Taxes".
14
<PAGE>
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
TROPICANA ATLANTIC CITY Total revenues at Tropicana Atlantic City were
$193.9 million in the first half of 1997, up 10% from $176.2 million in the
first half of 1996. Casino revenue was 8% higher in the 1997 versus 1996
six-month period, primarily reflecting a 38% increase in games revenue that
was partially offset by a 3% decrease in slot revenue. Slot revenue
decreased due to a reduction in coin offers to slot players. Rooms revenue
was $2.3 million or 74% higher in the 1997 six-month period due to an
increase in occupied rooms primarily attributable to the opening in late
April 1996 of the new hotel tower and to an increase in the percentage of
rooms occupied on a non-complimentary basis.
Tropicana Atlantic City had operating income of $22.2 million in the first
half of 1997, a 58% improvement over $14.0 million in the first half of 1997.
The Tropicana Atlantic City results for the 1996 six-month period were
reduced as a result of the factors noted above. Casino costs were 3% lower
in the 1997 versus 1996 six-month period primarily due to an $11.5 million
reduction in coin offers to slot players that more than offset increased
costs related to the increase in casino revenue. The reduction in coin
offers consisted of an $8.0 million reduction in direct mail and cash-back
coin offers and a $3.5 million reduction in line and charter bus coin. Rooms
costs were 61% higher in the 1997 versus 1996 six-month period primarily due
to increased direct costs associated with the new hotel tower. The provision
for doubtful accounts was $0.9 million higher in the 1997 versus 1996 six-
month period due to an increase in the allowance for potential uncollectible
markers associated with the property's ongoing emphasis on the games segment
of the business. Operating income is after rent and depreciation and
amortization expenses. Rent expense increased to $3.1 million in the 1997
six-month period from $0.8 million in the 1996 six-month period as a result
of an increased number of operating leases associated with the new
facilities. Depreciation and amortization was $10.9 million in the 1997 six-
month period compared to $10.3 million in the 1996 six-month period.
TROPICANA LAS VEGAS At Tropicana Las Vegas, total revenues were $82.1
million in the first half of 1997, a slight decrease from $82.7 million in
the first half of 1996. Casino revenue was 2% lower in the 1997 versus 1996
six-month period as a 13% decrease in slot revenue more than offset a 15%
increase in games revenue. Operating income was $0.9 million in the first
half of 1997, a 62% decrease from $2.3 million in the first half of 1996.
The provision for doubtful accounts was $2.2 million higher in the 1997
versus 1996 six-month period due to an increase in the allowance for
potential uncollectible markers associated with the property's ongoing
emphasis on premium table game business. Operating income is after rent and
depreciation and amortization expenses. Rent expense was $4.8 million in the
1997 six-month period compared to $4.5 million in the 1996 six-month period.
Depreciation and amortization was $4.6 million in the 1997 six-month period
compared to $4.5 million in the 1996 six-month period.
RAMADA EXPRESS At Ramada Express, total revenues were $43.2 million in the
first half of 1997, up slightly from $42.5 million in the first half of last
year. Operating income was $7.4 million in the 1997 six-month period, a 5%
decrease from $7.9 million in the 1996 six-month period. Operating income is
after rent and depreciation and amortization expenses. Rent expense was $0.3
million in the 1997 six-month period compared to $0.1 million in the 1996
six-month period. Depreciation and amortization was $3.6 million in both
periods.
15
<PAGE>
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
CASINO AZTAR EVANSVILLE Total revenues at Casino Aztar Evansville were $58.8
million in the first half of 1997, an 8% increase over $54.7 million in the
first half of 1996. Casino Aztar Evansville's hotel, which opened in
December 1996, contributed $1.3 million to consolidated rooms revenue.
Operating income was $15.7 million in the first half of 1997, an 11%
improvement over $14.2 million in the first half of last year. Operating
results included $0.4 million of rooms costs associated with the hotel.
Operating income is after rent and depreciation and amortization expenses.
Rent expense was $1.4 million in the 1997 six-month period compared to $1.1
million in the 1996 six-month period. Depreciation and amortization was $4.6
million in the 1997 six-month period compared to $4.0 million in the 1996
six-month period.
CASINO AZTAR CARUTHERSVILLE Total revenues at Casino Aztar Caruthersville
were $12.1 million in the first half of 1997 compared to $13.6 million in the
first half of 1996. Casino Aztar Caruthersville had an operating loss of
$1.4 million in both periods. Operating income is after depreciation and
amortization of $1.6 million in the 1997 six-month period compared to $1.7
million in the 1996 six-month period.
Quarter Ended July 3, 1997 Compared to Quarter Ended June 27, 1996
The Company's consolidated revenues for the 1997 second quarter were $200.4
million, a 6% increase over $189.5 million for the 1996 second quarter.
Consolidated rooms revenue was $2.0 million higher in the 1997 versus 1996
second quarter primarily as a result of the added rooms capacity at Tropicana
Atlantic City due to the opening of the new hotel tower in late April 1996
and the opening of the new hotel at Casino Aztar Evansville in December 1996.
Consolidated operating income for the 1997 second quarter was $21.8 million,
a 41% increase over $15.4 million for the 1996 second quarter. Improved
operating results at Tropicana Atlantic City and Casino Aztar Evansville were
more than sufficient to offset lower operating results at Tropicana Las
Vegas. The Tropicana Atlantic City results for the 1996 second quarter were
reduced as a result of disruption from the construction of the new hotel
tower and the enhancements to the casino and other facilities, and increased
costs associated with promotional programs implemented to increase market
share in anticipation of the opening of the new facilities. Consolidated
operating results for the 1996 second quarter reflected a $641,000 pretax
loss on disposal of assets, included in consolidated general and
administrative expense, related to the construction of new facilities.
Consolidated interest expense increased by $1.2 million or 8% in the 1997
versus 1996 second quarter primarily as a result of discontinuing the
capitalization of interest as the Company's major construction projects were
completed in phases in 1996.
For a discussion of income taxes, refer to "Note 5: Income Taxes".
TROPICANA ATLANTIC CITY Total revenues at Tropicana Atlantic City were
$101.5 million in the 1997 second quarter, a 10% increase over $92.4 million
in the 1996 second quarter. Casino revenue was 7% higher in the 1997 versus
1996 second quarter, primarily reflecting a 30% increase in games revenue
that was partially offset by a 1% decrease in slot revenue. Slot revenue
decreased due to a reduction in coin offers to slot players. Rooms revenue
16
<PAGE>
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
was $1.3 million or 61% higher in the 1997 second quarter due to an increase
in occupied rooms primarily attributable to the opening in late April 1996 of
the new hotel tower and to an increase in the percentage of rooms occupied on
a non-complimentary basis.
Tropicana Atlantic City had operating income of $13.8 million in the 1997
second quarter, an 82% improvement over $7.5 million in the 1996 second
quarter. The Tropicana Atlantic City results for the 1996 second quarter
were reduced as a result of the factors noted above. Casino costs were 7%
lower in the 1997 versus 1996 second quarter primarily due to a $6.2 million
reduction in coin offers to slot players that more than offset increased
costs related to the increase in casino revenue. The reduction in coin
offers consisted of a $4.5 million reduction in direct mail and cash-back
coin offers and a $1.7 million reduction in line and charter bus coin. Rooms
costs were 48% higher in the 1997 versus 1996 second quarter primarily due to
increased direct costs associated with the new hotel tower. The provision
for doubtful accounts was $0.7 million higher in the 1997 versus 1996 second
quarter due to an increase in the allowance for potential uncollectible
markers associated with the property's ongoing emphasis on the games segment
of the business. Operating income is after rent and depreciation and
amortization expenses. Rent expense increased to $1.6 million in the 1997
second quarter from $0.4 million in the 1996 second quarter as a result of an
increased number of operating leases associated with the new facilities.
Depreciation and amortization was $5.5 million in both periods.
TROPICANA LAS VEGAS At Tropicana Las Vegas, total revenues were $41.4
million in the 1997 second quarter, up slightly from $41.1 million in the
1996 second quarter. Casino revenue was unchanged in the 1997 versus 1996
second quarter as a 17% decrease in slot revenue was offset by a 25% increase
in games revenue. Operating income was $0.3 million in the second quarter of
1997, down 45% from $0.6 million in the second quarter of 1996. The
provision for doubtful accounts was $1.6 million higher in the 1997 versus
1996 second quarter due to an increase in the allowance for potential
uncollectible markers associated with the property's ongoing emphasis on
premium table game business. Operating income is after rent and depreciation
and amortization expenses. Rent expense was $2.6 million in the second
quarter of 1997 compared to $2.3 million in last year's second quarter.
Depreciation and amortization was $2.3 million in the 1997 second quarter
compared to $2.1 million in the 1996 second quarter.
RAMADA EXPRESS At Ramada Express, total revenues were $21.2 million in the
second quarter of 1997, a 3% increase over $20.4 million in the second
quarter of last year. Operating income was $3.2 million in both periods.
Operating income is after rent and depreciation and amortization expenses.
Rent expense was $0.1 million in the 1997 second quarter; rent expense was
insignificant in the 1996 second quarter. Depreciation and amortization was
$1.8 million in both periods.
CASINO AZTAR EVANSVILLE Total revenues at Casino Aztar Evansville were $30.4
million in the 1997 second quarter, a 6% increase over $28.8 million in the
1996 second quarter. Casino Aztar Evansville's hotel, which opened in
December 1996, contributed $0.7 million to consolidated rooms revenue.
Operating income was $8.3 million in the second quarter of 1997, a 12%
improvement over $7.4 million in last year's second quarter. Operating
17
<PAGE>
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
results included $0.2 million of rooms costs associated with the hotel.
Operating income is after rent and depreciation and amortization expenses.
Rent expense was $0.8 million in the 1997 second quarter compared to $0.6
million in the 1996 second quarter. Depreciation and amortization was $2.3
million in the 1997 second quarter compared to $2.0 million in the 1996
second quarter.
CASINO AZTAR CARUTHERSVILLE Total revenues at Casino Aztar Caruthersville
were $5.9 million in the second quarter of 1997 compared to $6.8 million in
the second quarter of 1996. Casino Aztar Caruthersville had an operating
loss of $0.7 million in the second quarter of 1997 compared to an operating
loss of $0.6 million in the second quarter of 1996. Operating income is
after depreciation and amortization of $0.8 million in both periods.
Other Matters
In February 1997, the Financial Accounting Standards Board ("FASB") adopted
Statement of Financial Accounting Standards No. 128, Earnings per Share
("SFAS 128"), which supersedes and simplifies the standards for computing
earnings per share ("EPS") previously found in Accounting Principles Board
Opinion No. 15, Earnings per Share ("APB 15"). SFAS 128 replaces net income
per common and common equivalent share with a presentation of net income per
common share. Net income per common share excludes dilution and is computed
by dividing income available to common shareholders by the weighted average
number of common shares outstanding for the period. Net income per common
share assuming full dilution is computed similarly under SFAS 128 as it was
under APB 15, and reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or
converted into common stock or resulted in the issuance of common stock that
then shared in the earnings of the entity. SFAS 128 is effective for
financial statements issued for periods ending after December 15, 1997,
including interim periods; earlier application is not permitted. The Company
will provide the required EPS disclosures in its financial statements
commencing with the fiscal year ended January 1, 1998. SFAS 128 requires
restatement of all prior period EPS data presented. Pursuant to the
provisions of SFAS 128, the Company's net income per common share was $.07
and $.13 for the quarter and six months ended 1997, respectively; and, $.00
and $.01 for the quarter and six months ended 1996, respectively. The
application of the provisions of SFAS 128 would have no effect on the amounts
reported for net income per common share assuming full dilution in the 1997
and 1996 second quarters and six-month periods.
In June 1997, the FASB adopted Statement of Financial Accounting Standards
No. 130, Reporting Comprehensive Income ("SFAS 130"), which establishes
standards for reporting and display of comprehensive income and its
components in a full set of general purpose financial statements. SFAS is
effective for fiscal years beginning after December 15, 1997 and requires
restatement of earlier periods presented. The effect, if any, of adopting
SFAS 130 has not been determined.
In June 1997, the FASB adopted Statement of Financial Accounting Standards
No. 131, Disclosures about Segments of an Enterprise and Related Information
("SFAS 131"), which supersedes FASB Statement No. 14, Financial Reporting for
Segments of a Business Enterprise. SFAS 131 establishes standards for the
18
<PAGE>
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
way that public business enterprises report information about operating
segments in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
reports issued to shareholders. SFAS 131 is effective for fiscal years
beginning after December 15, 1997 and requires restatement of earlier periods
presented. The effect, if any, of adopting SFAS 131 has not been determined.
PART - II OTHER INFORMATION
Item 1. Legal Proceedings
(a) In connection with Case No. CV-S-94-1126-DAE(RJJ)-BASE FILE (the
"Poulos/Ahearn Case"), Case No. CV-S-95-00923-LDG(RJJ)(the "Schreier
Case") and Case No. CV-S-95-936 LDG(RLH)(the "Cruise Ship Case"),
(collectively, the "Consolidated Cases"), as reported under Part 1, Item
3 of the Company's Form 10-K for the year ended January 2, 1997, the
defendants (including the Company), as reported under Part II, Item 1(a)
of the Company's Form 10-Q for the quarter ended April 3, 1997, moved on
March 21, 1997, to dismiss the consolidated amended complaint filed on
February 14, 1997, for failure to state a claim and on other grounds.
The plaintiffs have opposed these motions. The defendants filed reply
memoranda in support of the motions. No hearing date has been set.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Page No.
----------
10. First Amendment to Supplemental Reducing Revolving
Loan Agreement, dated as of June 10, 1997, among
Aztar Corporation, Adamar of New Jersey, Inc., Ramada
Express, Inc. and the banks therein named; and Bank
of America National Trust and Savings Association,
as Managing Agent. *
11. Statement Regarding Computation of Per Share Earnings. *
27. Financial Data Schedule. *
* See exhibit index at page E-1 of this report for a
listing of exhibits filed with this report.
All other exhibits have been omitted because the
information is either not required or not applicable.
(b) The Company did not file any report on Form 8-K during
the quarter ended July 3, 1997.
19
<PAGE>
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
AZTAR CORPORATION
------------------------------
(Registrant)
Date August 8, 1997 By ROBERT M. HADDOCK
-------------------------- ---------------------------
Robert M. Haddock
Executive Vice President and
Chief Financial Officer
20
<PAGE>
<PAGE>
AZTAR CORPORATION AND SUBSIDIARIES
Exhibit Index
- -------------
10. First Amendment to Supplemental Reducing Revolving Loan
Agreement, dated as of June 10, 1997, among Aztar
Corporation, Adamar of New Jersey, Inc., Ramada Express,
Inc. and the banks therein named; and Bank of America
National Trust and Savings Association, as Managing
Agent.
11. Statement Regarding Computation of Per Share Earnings.
27. Financial Data Schedule.
E-1
<PAGE>
EXHIBIT 10
FIRST AMENDMENT TO SUPPLEMENTAL REDUCING
REVOLVING LOAN AGREEMENT
This First Amendment to Supplemental Reducing Revolving
Loan Agreement (this "Amendment") dated as of June 10, 1997 is
entered into with reference to the Supplemental Reducing Revolving
Loan Agreement dated as of March 13, 1997 among Aztar Corporation,
a Delaware corporation, Adamar of New Jersey, Inc., a New Jersey
corporation, Ramada Express, Inc., a Nevada corporation
(collectively, the "Borrowers"), the Banks referred to therein, and
Bank of America National Trust and Savings Association, as Managing
Agent (the "Loan Agreement"), and in light of the following facts:
RECITALS
A. The Borrowers wish to increase the Commitment from
$20,000,000 to $25,000,000 by permitting Bank of Scotland to become
a Bank under the Loan Agreement and to assume a $5,000,000 interest
in (being equal to a 20.00% Pro Rata Share of) such increased
Commitment.
B. The Managing Agent and the existing Banks are willing to
allow such requested increase in the Commitment and to permit Bank
of Scotland to become a Bank under the Loan Agreement on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, the Borrowers, the Managing Agent and the
existing Banks hereby agree as follows:
1. Capitalized Terms. Any and all initially
capitalized terms used in this Amendment (including, without
limitation, in the recitals hereto) without definition shall have
the respective meanings specified in the Loan Agreement.
2. Amendment to Recitals. Recital B to the Loan
Agreement is hereby amended by deleting the reference therein to
"$20,000,000" and by substituting therefor a reference to
$25,000,000.
3. Amendment to Section 1.1 - Defined Terms. The
definition of "Commitment" set forth in Section 1.1 of the Loan
Agreement is amended to read in full as follows:
"Commitment" means, subject to Section 2.5,
$25,000,000. As of the effective date of the First Amendment to
this Agreement dated as of June 10, 1997, the respective Pro Rata
Shares of the Banks with respect to the Commitment are set forth in
Schedule 1.1. From and after the effective date of such First
Amendment, the Pro Rata Shares set forth in Schedule 1.1 may be
subject to assignment pursuant to Section 11.8, with the portion of
any Pro Rata Share so assigned being reflected in the applicable
Commitment Assignment and Acceptance.
-1-
<PAGE>
4. Amendment to Schedule 1.1. Schedule 1.1 of the Loan
Agreement is hereby amended to read in full as set forth on
Attachment "A" to this Amendment.
5. Amendment to Heading of Article 2. The heading to
Article 2 is hereby amended by deleting therefrom the words "AND
LETTERS OF CREDIT."
6. Deliveries. Concurrently with their execution of
this Amendment, the Borrowers shall provide the Managing Agent with
the following, each of which shall be in form and substance
acceptable to the Managing Agent, at the Borrowers' sole cost and
expense:
(a) Counterparts of this Amendment executed by all
parties hereto;
(b) Such assurances as the Managing Agent may
require concerning the authority of the Borrowers and their
respective officers to enter into this Amendment;
(c) A Note executed by each of the Borrowers to the
order of Bank of Scotland in the amount of Bank of Scotland's Pro
Rata Share of the Commitment as increased hereby; and
(d) Payment of the reasonable costs and expenses of
the Managing Agent in connection with the preparation of this
Amendment which are invoiced to the Borrowers prior to the date
hereof.
7. Conditions Precedent. This Amendment shall be
effective on the date that the Managing Agent notifies the Banks
that all of the following conditions precedent have been satisfied:
(a) Each of the items referred to in Section 5
hereof shall have been delivered to the Managing Agent:
(b) The Borrowers and any other Parties shall be in
compliance with all the terms and provisions of the Loan Documents
and no Default of Event of Default, nor any Material Adverse
Effect, shall have occurred and be continuing; and
(c) The Borrowers shall have delivered such other
assurances with respect to the foregoing as the Managing Agent may
reasonably request.
8. Confirmation. In all other respects, the terms of
the Loan Agreement and the other Loan Documents are hereby
confirmed.
-2-
<PAGE>
9. Governing Law. This Amendment shall be governed by,
and construed and enforced in accordance with, the local Laws of
California.
IN WITNESS WHEREOF, the parties have executed this
Amendment as of the date first written above by their respective
duly authorized representatives.
The Borrowers:
AZTAR CORPORATION
By: NEIL CIARFALIA
Neil Ciarfalia
Treasurer
ADAMAR OF NEW JERSEY, INC.
By: NEIL CIARFALIA
Neil Ciarfalia
Treasurer
RAMADA EXPRESS, INC.
By: N.W. ARMSTRONG JR.
Nelson W. Armstrong, Jr.
Vice President and Secretary
The Managing Agent:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Managing Agent
By: JANICE HAMMOND
Janice Hammond
Vice President
The Banks:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Bank
By: JON VARNELL
Jon Varnell
Managing Director
SOCIETE GENERALE, as a Bank
By: DONALD L. SCHUBERT
Donald L. Schubert
Vice President
-3-
<PAGE>
BANK OF SCOTLAND, as a Bank
By: ANNIE CHIN TAT
Annie Chin Tat
Assistant Vice President
-4-
<PAGE>
SCHEDULE 1.1 TO SUPPLEMENTAL LOAN AGREEMENT
Bank Amount Pro Rata Share
- ---- ------ --------------
Bank of America National Trust and
Savings Association $10,000,000 40%
Societe Generale $10,000,000 40%
Bank of Scotland $ 5,000,000 20%
Attachment "A"
-5-
<PAGE>
PROMISSORY NOTE
$5,000,000.00 June 10, 1997
Los Angeles, California
FOR VALUE RECEIVED, the undersigned jointly and severally
promise to pay to the order of BANK OF SCOTLAND (the "Bank"), the
principal amount of FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00)
or such lesser aggregate amount of Advances as may be made by the
Bank with respect to the Commitment under the Loan Agreement
referred to below, together with interest on the principal amount
of each Advance made hereunder and remaining unpaid from time to
time from the date of each such Advance until the date of payment
in full, payable as hereinafter set forth.
Reference is made to the Supplemental Reducing Revolving
Loan Agreement dated as of March 13, 1997, as amended by the First
Amendment thereto of even date herewith, by and among the
undersigned, as Borrowers, the Banks which are even date herewith,
by and among the undersigned, as Borrowers, the Banks which are
parties thereto, and Bank of America National Trust and Savings
Association, as Managing Agent for the Banks (the "Loan
Agreement"). Terms defined in the Loan Agreement and not otherwise
defined herein are used herein with the meanings given those terms
in the Loan Agreement. This is one of the Notes referred to in the
Loan Agreement, and any holder hereof is entitled to all of the
rights, remedies, benefits and privileges provided for in the Loan
Agreement as originally executed or as it may from time to time be
supplemented, modified or amended. The Loan Agreement, among other
things, contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events upon the terms and
conditions therein specified.
The principal indebtedness evidenced by this Note shall
be payable as provided in the Loan Agreement and in any event on
the Maturity Date.
Interest shall be payable on the outstanding daily unpaid
principal amount of Advances from the date of each such Advance
until payment in full and shall accrue and be payable at the rates
and on the dates set forth in the Loan Agreement both before and
after default and before and after maturity and judgment, with
interest on overdue principal and interest to bear interest at the
rate set forth in Section 3.10 of the Loan Agreement, to the
fullest extent permitted by applicable Law.
-6-
<PAGE>
Each payment hereunder shall be made to the Managing
Agent at the Managing Agent's Office for the account of the Bank in
immediately available funds not later than 11:00 a.m. (San
Francisco time) on the day of payment (which must be a Banking
Day). All payments received after 11:00 a.m. (San Francisco time)
on any particular Banking Day shall be deemed received on the next
succeeding Banking Day. All payments shall be made in lawful money
of the United States of America.
The Bank shall use its best efforts to keep a record of
Advances made by it and payments received by it with respect to
this Note, and such record shall be presumptive of the amounts
owing under this Note.
The undersigned hereby promise to pay all costs and
expenses of any rightful holder hereof incurred in collecting the
undersigneds' obligations hereunder or in enforcing or attempting
to enforce any of such holder's rights hereunder, including
reasonable attorneys' fees and disbursements, whether or not any
action is filed in connection therewith.
The undersigned hereby waive presentment, demand for
payment, dishonor, notice of dishonor, protest, notice of protest
and any other notice or formality, to the fullest extent permitted
by applicable Laws.
The undersigned agree that their liability hereunder is
joint and several, absolute and unconditional without regard to the
liability of any other party. All provisions of this Note shall
apply to each of the undersigned. Each of the undersigned other
than Aztar Corporation ("Parent") hereby irrevocably appoints
Parent as its agent for the purpose of (i) requesting Advances
hereunder and (ii) receiving notices with respect hereto.
-7-
<PAGE>
THIS NOTE SHALL BE DELIVERED TO AND ACCEPTED BY THE BANK,
OR BY THE MANAGING AGENT ON ITS BEHALF, IN THE STATE OF CALIFORNIA,
AND SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, THE LOCAL LAWS THEREOF.
AZTAR CORPORATION, RAMADA EXPRESS, INC.,
a Delaware corporation a Nevada corporation
By: NEIL CIARFALIA By: N.W. ARMSTRONG JR.
Neil Ciarfalia Nelson W. Armstrong, Jr.
Treasurer Vice President
and Secretary
ADAMAR OF NEW JERSEY, INC.,
a New Jersey corporation
By: NEIL CIARFALIA
Neil Ciarfalia
Treasurer
-8-
<PAGE>
SCHEDULE OF COMMITTED ADVANCES AND
PAYMENTS OF PRINCIPAL
Date Amount Interest Amount of Unpaid Notation
of Period Principal Paid Principal Made by
Advance Balance
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
-9-
<PAGE>
<PAGE>
<TABLE>
Exhibit 11
AZTAR CORPORATION AND SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
For the periods ended July 3, 1997 and June 27, 1996
---------------------------------------------------------------
(in thousands, except per share data)
<CAPTION>
Second Quarter Six Months
------------------ ------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net income $ 3,429 $ 40 $ 6,106 $ 809
Deduct: preferred stock dividend
and losses on redemption (net of
income taxes credited to retained
earnings) (154) (164) (328) (324)
-------- -------- -------- --------
Net income applicable to
computation $ 3,275 $ (124) $ 5,778 $ 485
======== ======== ======== ========
Weighted average common shares
assuming no dilution 45,121 38,411 45,063 38,348
Common equivalent shares
Additional shares applicable to
stock options based on the
weighted average market price 625 1,283 695 1,116
-------- -------- -------- --------
Weighted average common shares
applicable to net income per
common and common equivalent
share 45,746 39,694 45,758 39,464
Shares applicable to stock
options based on exercises
during the period and/or
the market close price at
the end of the period -- 23 (4) 207
Conversion of preferred stock at
the stated rate 915 967 922 973
-------- -------- -------- --------
Weighted average common shares
assuming full dilution 46,661 40,684 46,676 40,644
======== ======== ======== ========
Net income per common and common
equivalent share $ .07 $ -- $ .13 $ .01
Net income per common share
assuming full dilution $ .07 $ -- $ .12 $ .01
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheet at July 3, 1997 and the Consolidated Statement of
Operations for the year-to-date period ended July 3, 1997 and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-1-1998
<PERIOD-END> JUL-3-1997
<CASH> 43,200
<SECURITIES> 0
<RECEIVABLES> 54,333
<ALLOWANCES> 15,018
<INVENTORY> 7,161
<CURRENT-ASSETS> 109,648
<PP&E> 1,173,892
<DEPRECIATION> 258,195
<TOTAL-ASSETS> 1,103,051
<CURRENT-LIABILITIES> 115,980
<BONDS> 509,805
6,316
0
<COMMON> 491
<OTHER-SE> 445,268
<TOTAL-LIABILITY-AND-EQUITY> 1,103,051
<SALES> 25,849
<TOTAL-REVENUES> 390,143
<CGS> 27,327
<TOTAL-COSTS> 203,116
<OTHER-EXPENSES> 18,772
<LOSS-PROVISION> 5,205
<INTEREST-EXPENSE> 31,555
<INCOME-PRETAX> 8,276
<INCOME-TAX> (154)
<INCOME-CONTINUING> 6,106
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,106
<EPS-PRIMARY> .13
<EPS-DILUTED> .12
</TABLE>
