~~DIAMOND~~UNITED ~~JO,~~STATES SECURITIES ~~LLC~~AND ~~PENINSULA~~EXCHANGE ~~GAMING~~COMMISSION WASHINGTON, ~~LLC PENINSULA GAMING CORP~~D. ~~(Exact name of registrants as (Exact name of registrants as (formerly known as specified in their charter specified in their charter) The Old Evangeline Downs Capital Corp~~C.) (Exact name of registrants as specified in their charter) DELAWARE DELAWARE DELAWARE (State or other jurisdiction of (State or other jurisdiction of (State or other jurisdiction of incorporation or organization) incorporation or organization) incorporation or organization) 42-1483875 20-0800583 25-1902805 (I.R.S. Employer (I.R.S. Employer (I.R.S. Employer Identification No.) Identification No.) Identification No.)20549

~~Part I~~ FORM 10- Financial Information Item 1 - Financial Statements Peninsula Gaming, LLC: Condensed Consolidated Balance Sheets (Unaudited) as of March 31, 2005 and December 31, 2004...................................................................................3 Condensed Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2005 and 2004................................................................4 Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2005 and 2004................................................................5 Notes to Condensed Consolidated Financial Statements (Unaudited).........................................7 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations...............................................................................22 Item 3 - Quantitative and Qualitative Disclosures About Market Risk.........................................29 Item 4 - Controls and Procedures............................................................................30 Part II - Other Information Item 1 - Legal Proceedings..................................................................................31 Item 2 - Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities...................31 Item 3 - Defaults Upon Senior Securities....................................................................31 Item 4 - Submission of Matters to a Vote of Security Holders................................................31 Item 5 - Other Information..................................................................................31 Item 6 - Exhibits...........................................................................................32 Signatures.......................................................................................................33Q

PENINSULA GAMING, LLC CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) March 31, December 31, 2005 2004 ----------- ------------ ASSETS CURRENT ASSETS: Cash and cash equivalents $ 9,883,968 $ 10,504,016 Restricted cash - purse settlements 6,163,133 3,671,331 Accounts receivable, less allowance for doubtful accounts of $36,216 and $47,426, respectively 1,020,784 816,058 Inventories 279,745 243,336 Prepaid expenses 1,495,665 2,183,711 ------------ ------------ Total current assets 18,843,295 17,418,452 ------------ ------------ PROPERTY AND EQUIPMENT, NET 125,052,042 126,163,076 ------------ ------------ OTHER ASSETS: Deferred financing costs, net of amortization of $1,947,691 and $1,437,903, respectively 12,808,683 13,311,935 Goodwill 53,083,429 53,083,429 Licenses and other intangibles 32,666,626 32,562,289 Deposits and other assets 453,195 530,159 ------------ ------------ Total other assets 99,011,933 99,487,812 ------------ ------------ TOTAL $242,907,270 $243,069,340 ============ ============ LIABILITIES AND MEMBERS' DEFICIT CURRENT LIABILITIES: Accounts payable $ 2,577,306 $ 3,801,985 Construction payable - Racino project 1,951,191 4,711,861 Purse settlement payable 7,736,651 5,040,312 Accrued payroll and payroll taxes 2,240,784 2,615,915 Accrued interest 9,775,576 4,973,545 Other accrued expenses 5,044,835 4,396,194 Payable to affiliate 257,761 100,973 Current maturity of long-term debt 7,770,064 8,630,008 ------------ ------------ Total current liabilities 37,354,168 34,270,793 ------------ ------------ LONG-TERM LIABILITIES: 8 3/4% senior secured notes, net of discount 230,021,277 229,945,650 13% senior secured notes, net of discount 6,800,450 6,796,576 Senior secured credit facilities 13,700,000 13,887,764 Term loan 7,666,667 8,666,667 Notes payable 6,857,550 7,451,248 Other accrued expenses 200,000 650,000 Preferred members' interest, redeemable 4,000,000 4,000,000 ------------ ------------ Total long-term liabilities 269,245,944 271,397,905 ------------ ------------ Total liabilities 306,600,112 305,668,698 COMMITMENTS AND CONTINGENCIES MEMBERS' DEFICIT (63,692,842) (62,599,358) ------------ ------------ TOTAL $242,907,270 $243,069,340 ============ ============ See notes to condensed consolidated financial statements (unaudited).

x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2007.

or

o	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

~~Three~~For ~~Months~~the ~~Three~~transition ~~Months~~period Ended Ended March 31, 2005 March 31, 2004 -------------- -------------- REVENUES: Casino $ 35,437,924 $ 30,193,349 Racing 3,338,269 3,578,762 Video poker 607,946 786,841 Food and beverage 2,992,104 2,817,800 Other 250,934 201,117 Less promotional allowances (1,422,712) (2,012,473) -------------- -------------- Total net revenues 41,204,465 35,565,396 -------------- -------------- EXPENSES: Casino 18,089,301 15,463,986 Racing 2,741,972 2,990,987 Video poker 467,489 536,312 Food and beverage 2,333,586 2,274,733 Boat operations 579,362 573,061 Other 97,760 124,993 Selling, general and administrative 5,932,435 5,101,521 Depreciation and amortization 3,937,851 2,896,063 Pre-opening expense 39,350 221,283 Development expense 135,677 21,270 Affiliate management fees 307,114 256,375 Gain on disposal of assets (37,438) --------------- --------------- Total expenses 34,624,459 30,460,584 --------------- --------------- INCOME FROM OPERATIONS 6,580,006 5,104,812 --------------- --------------- OTHER INCOME (EXPENSE): Interest income 13,475 57,085 Interest expense, net of amounts capitalized (6,685,764) (7,692,728) Interest expense related from to preferred members' interest, redeemable (90,000) (90,000) --------------- --------------- Total other expense (6,762,289) (7,725,643) --------------- --------------- NET LOSS TO COMMON MEMBERS' INTEREST $ (182,283) $ (2,620,831) =============== =============== See notes to condensed consolidated financial statements(unaudited).

~~PENINSULA~~Commission ~~GAMING,~~File LLC CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended Three Months Ended March 31, 2005 March 31, 2004 ------------------ ------------------ CASH FLOWS FROM OPERATING ACTIVITIESNumber: Net loss $ (182,283) $ (2,620,831) Adjustments to reconcile net loss to net cash flows from operating activities: Depreciation and amortization 3,937,851 2,896,063 Provision for doubtful accounts 26,643 31,481 Amortization of deferred financing costs and bond discount 731,349 806,549 Gain on disposal of assets (37,438) Changes in operating assets and liabilities: Restricted cash 333- purse settlements (2,491,802) (2,801,846) Receivables (231,370) 112,322 Payable to affiliate 156,788 Inventories (36,409) 16,681 Prepaid expenses and other assets 765,010 (503,566) Accounts payable 1,471,660 3,356,344 Accrued expenses 4,625,847 (5,687,987) ------------------ ------------------ Net cash flows from operating activities 8,735,846 (4,394,790) ------------------ ------------------ CASH FLOWS FROM INVESTING ACTIVITIES: Business acquisition and licensing costs (104,337) (68,504) Construction project development costs (3,992,905) (16,888,572) Proceeds from (deposits to) restricted cash - racino project, net 13,011,173 Maturity and sale of restricted investments 7,919,351 Purchase of property and equipment (1,582,703) (781,680) Proceeds from sale of property and equipment 25,560 ------------------ ------------------ Net cash flows from investing activities (5,654,385) 3,191,768 ------------------ ------------------ CASH FLOWS FROM FINANCING ACTIVITIES: Deferred financing costs (5,034) Principal payments on debt (3,785,274) (1,442,026) Proceeds from senior credit facilities 1,000,000 Proceeds from FF&E credit facility 3,467,507 Member distributions (911,201) (1,154,446) ------------------ ------------------ Net cash flows from financing activities (3,701,509) 871,035 ------------------ ------------------ NET DECREASE IN CASH AND CASH EQUIVALENTS (620,048) (331,987) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 10,504,016 21,158,295 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 9,883,968 $ 20,826,308 ================== ================== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for interest $1,138,371 $13,068,734 -5- SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Property additions acquired on construction payable which were accrued, but not paid $231,191 $2,594,332 Property additions previously accrued which were paid 2,991,861 Deferred financing costs which were accrued, but not paid 13,380,855 See notes to condensed consolidated financial statements (unaudited).88829

Three Months Three Months Ended Ended March 31, 2005 March 31, 2004 --------------- -------------- Net loss to common members' interest, as reported $ (182) $ (2,621) Stock-based employee compensation expenses included in reported net income Stock-based employee compensation expense determined under the fair value method (30) --------------- -------------- SFAS 123 pro forma net loss to common members' interest $ (212) $ (2,621) ================ ==============

DIAMOND JO, LLC	PENINSULA GAMING, LLC	PENINSULA GAMING CORP.
(Exact name of registrants as specified in their charter)	(Exact name of registrants as specified in their charter)	(Exact name of registrants as specified in their charter)

DELAWARE	DELAWARE	DELAWARE
(State or other jurisdiction of incorporation or organization)	(State or other jurisdiction of incorporation or organization)	(State or other jurisdiction of incorporation or organization)

42-1483875	20-0800583	25-1902805
(I.R.S. Employer Identification No.)	(I.R.S. Employer Identification No.)	(I.R.S. Employer Identification No.)

~~March~~3rd Street ~~31,~~Ice ~~December 31~~Harbor, ~~2005~~PO ~~2004~~Box -------------- -------------- Land and land improvements $ 13,735,561 $ 13,639,200 Buildings and improvements 79,111,888 78,477,066 Riverboat and improvements 8,313,837 8,308,070 Furniture, fixtures and equipment 40,436,718 39,106,835 Computer equipment 5,959,341 5,817,263 Vehicles 197,492 176,236 Construction in progress 1,288,395 880,879 -------------- -------------- -10- Subtotal 149,043,232 146,405,549 Accumulated depreciation (23,991,190) (20,242,473) -------------- -------------- Property and equipment, net $ 125,052,042 $ 126,163,076 ============== ==============1750

~~March 31~~Dubuque, Iowa December 31, 2005 2004 -------------- -------------- 8 3/4% senior secured notes due April 15, 2012, net of discount of $2,978,723 and $3,054,350, secured by assets and equity of DJL, OED and DJW. $230,021,277 $229,945,650 13% senior secured notes of OED due March 1, 2010 with contingent interest, net of discount of $109,550 and $113,424, secured by certain assets of OED. 6,800,450 6,796,576 $35.0 million revolving line of credit under a loan and security agreement of DJL and OED with Wells Fargo Foothill, Inc. dated June 16, 2004, interest rate at prime + a margin of 0.5 - 1.0% (current rate of 6.75%), maturing June 16, 2008, secured by substantially all the assets of DJL and OED. 13,700,000 13,887,764 Term loan under a loan and security agreement of DJL and OED with Wells Fargo Foothill, Inc. dated June 16, 2004, interest rate at prime + 2.5% (current rate of 8.25%), due in equal monthly installments of $333,333 beginning July 1, 2004, maturing June 16, 2008, secured by certain assets of OED. 11,666,667 12,666,667 Promissory note payable to third party, interest at 8.75% payable monthly in arrears, annual principal payments of $1,100,000 in 2005 and $550,000 each year thereafter, secured by a mortgage on certain real property of OED. 3,300,000 3,850,000 Note payable to third party, interest rate at 9.5%, monthly payments of principal and interest of $31,250, with final payment due July 1, 2005, secured by certain assets of OED. 125,061 184,596 Notes payable to third party, net of discount of $548,197 and $673,370, interest rate at 0% (discounted at 7.4%) for the first 24 months and 7.4% thereafter, monthly payments of principal of $224,149 through October 2006 followed by monthly -11- payments of principal and interest of $233,236, through October 2007, secured by certain assets of DJL and OED. 6,400,445 6,952,242 Notes payable to third party, net of discount of $22,418 and $40,860, interest rate at 0% (discounted at 7.4%), monthly payments of principal of $103,066, through November 2005, secured by certain assets of DJL and OED. 802,108 1,094,418 Preferred membership interests-redeemable, interest at 9%, due October 13, 2006. 4,000,000 4,000,000 -------------- -------------- 276,816,008 279,377,913 Total debt Less current ption (7,770,064) (8,630,008) -------------- -------------- Total long term debt $269,045,944 $270,747,905 =============== ===============52001

~~Net Revenues Three Months Ended March 31,~~ (1563) ~~2005 2004~~ 583-~~---------- ----------- Diamond Jo - Iowa $ 13,485 $ 12,178 Evangeline Downs - Louisiana 27,719 23,387 ------------ ----------- Total $ 41,204 $ 35,565 ============ ===========~~7005

~~Segment Operating Earnings Three Months Ended March 31, 2005 2004 ----------- ----------- General corporate $~~ (~~599) $ 0 Diamond Jo 4~~Address,~~253~~ ~~3,705~~including ~~Evangeline~~zip ~~Downs 7~~code,~~309~~ ~~4,795 ----------- ----------- Total Segment Operating Earnings (1) 10,963 8,500 General corporate: Development expense (53) Diamond Jo: Depreciation~~ and ~~amortization~~telephone (1number,~~009)~~ including ~~(577)~~area ~~Development expense (37) (21) Loss on sale of assets (24) Interest expense~~code, ~~net (2,412) (2,807) Evangeline Downs: Depreciation and amortization (2,929) (2,319) Development expense (46) Pre-opening expense (39) (222) Affiliate management fees (307) (256) Gain on sale~~ of ~~assets~~principal 61executive ~~Interest expense, net (4,350~~offices) (4,919) ----------- ----------- Net loss to common members' interest $ (182) $ (2,621) =========== ============ (1) Segment operating earnings is defined as net loss to common members' interest plus depreciation and amortization, pre-opening expense, development expense, affiliate management fees, loss on disposal of assets, interest expense (net) less gain on disposal of assets.

~~March~~Securities ~~31,~~registered pursuant ~~2005~~to December 31, 2004 ----------------------------------- ----------------------------------- Fair Value Recorded Amount Fair Value Recorded Amount --------------- ---------------- --------------- --------------- 8 3/4% senior secured notes $ 226,010,000 $ 230,021,277 $ 228,340,000 $ 229,945,650 13% senior secured notes 6,910,000 6,800,450 6,910,000 6,796,576 Senior secured credit facilities 13,700,000 13,700,000 13,887,764 13,887,764 Term loan 11,666,667 11,666,667 Section 12~~,666,667~~ ~~12,666,667~~(g) of ~~Notes~~the ~~payable~~Act: ~~11,198,230 10,627,614 12,795,485 12,081,256 Preferred members' interests 4,000,000 4,000,000 4,000,000 4,000,000~~None

AtIndicate ~~March~~by ~~31,~~check ~~2005~~mark ~~---------------------------------------------------------------------------~~if the ~~Parent~~registrant ~~Subsidiary~~is ~~Subsidiary~~a Cowell-~~Issuer~~known -seasoned Co-Issuer - Guarantor - Consolidating PGL DJL OED Adjustments Consolidated ------------- --------------- ------------- -------------- -------------- ASSETS CURRENT ASSETS: Cash and cash equivalents.......... $ 3issuer,~~295~~ $as ~~3,649,764~~defined $ 6,230,909 $ 9,883,968 Restricted cash-purse settlements.......... 6,163,133 6,163,133 Receivables............ 74,789 945,995 1,020,784 Receivables from affiliates........... 7,130,881 $ (7,130,881) Inventories............ 93,490 186,255 279,745 Prepaid expenses....... 15,500 730,611 749,554 1,495,665 ------------ --------------- ------------- ------------- -------------- Total current assets.. 18,795 11,679,535 14,275,846 (7,130,881) 18,843,295 PROPERTY AND EQUIPMENT, NET.................... 318,731 17,982,000 106,751,311 125,052,042 ------------ --------------- ------------- ------------- -------------- OTHER ASSETS: Investment in ~~subsidiaries.........~~Rule 405 (63,459,355) 63,459,355 Deferred financing costs................ 5,375,800 7,432,883 12,808,683 Goodwill............... 53,083,429 53,083,429 Licenses and other intangibles.......... 32,666,626 32,666,626 Deposits and other assets............... 323,390 129,805 453,195 ------------ --------------- ------------- ------------- -------------- Total other assets... (63,459,355) 58,782,619 40,229,314 63,459,355 99,011,933 ------------ --------------- ------------- -------------- -------------- TOTAL..................... $(63,121,829) $ 88,444,154 $161,256,471 $ 56,328,474 $ 242,907,270 ============= =============== ============= ============= ============== LIABILITIES AND MEMBERS' DEFICIT CURRENT LIABILITIES: Accounts payable....... $ 94,609 $ 394,138 $ 2,088,559 $ 2,577,306 Construction payable-Racino project.............. 1,951,191 1,951,191 Purse settlement payable.............. 7,736,651 7,736,651 Accrued payroll and payroll taxes........ 238,109 989,660 1,013,015 2,240,784 Accrued interest....... 3,613,139 6,162,437 9,775,576 Other accrued expenses. 238,295 1,092,059 3,714,481 5,044,835 Payables to affiliate.. 7,388,642 $ (7,130,881) 257,761 Current maturity of the ~~long-term~~Securities ~~debt~~Act....... 1,195,068 6,574,996 7,770,064 ------------ --------------- ------------- -------------- -------------- Total current liabilities....... 571,013 7,284,064 36,629,972 (7,130,881) 37,354,168 ------------ --------------- ------------- -------------- -------------- LONG-TERM LIABILITIES: 8 3/4% senior secured notes, net of discount............. 86,768,509 143,252,768 230,021,277 13% senior secured notes, net of discount............. 6,800,450 6,800,450 Senior secured credit facilities........... 5,000,000 8,700,000 13,700,000 Term loan.............. 7,666,667 7,666,667 Notes payable.......... 1,997,653 4,859,897 6,857,550 Other accrued expenses. 200,000 200,000 Preferred members' interest, redeemable. 4,000,000 4,000,000 ------------ --------------- ------------- -------------- -------------- Total long-term liabilities....... 97,966,162 171,279,782 269,245,944 ------------ --------------- ------------- -------------- -------------- Total liabilities.... 571,013 105,250,226 207,909,754 (7,130,881) 306,600,112 MEMBERS' DEFICIT.......... (63,692,842) (16,806,072) (46,653,283) 63,459,355 (63,692,842) ------------ --------------- ------------- -------------- -------------- TOTAL..................... $(63,121,829) $ 88,444,154 $161,256,471 $ 56,328,474 $ 242,907,270 ============= =============== ============= ============== =============== Yes o No x

AtIndicate ~~December~~by ~~31,~~check ~~2004~~mark ~~---------------------------------------------------------------------------~~if the ~~Parent~~registrant ~~Subsidiary~~is ~~Subsidiary~~not ~~Co-Issuer~~required -to ~~Co-Issuer~~file -reports ~~Guarantor~~pursuant -to Consolidating PGL DJL OED Adjustments Consolidated ------------- --------------- ------------- -------------- -------------- ASSETS CURRENT ASSETS: Cash and cash equivalents.......... $ (1,211) $ 3,433,915 $ 7,071,312 $ 10,504,016 Restricted cash-purse settlements.......... 3,671,331 3,671,331 Receivables............ 80,976 735,082 816,058 Receivables from affiliates........... 6,672,662 $ (6,672,662) Inventories............ 105,607 137,729 243,336 Prepaid expenses....... 1,064,490 1,119,221 2,183,711 ------------- --------------- ------------- -------------- -------------- Total current assets.. (1,211) 11,357,650 12,734,675 (6,672,662) 17,418,452 PROPERTY AND EQUIPMENT, NET.................... 18,543,117 107,619,959 126,163,076 ------------- --------------- ------------- -------------- -------------- OTHER ASSETS: Investment in subsidiaries......... (62,215,342) 62,215,342 Deferred financing costs................ 5,583,956 7,727,979 Section 13~~,311,935~~ Goodwill............... 53,083,429 53,083,429 Licenses and other intangibles.......... 32,562,289 32,562,289 Deposits and other assets............... 363,184 166,975 530,159 ------------- --------------- ------------- -------------- -------------- Total other assets... or Section 15(~~62,215,342~~d) 59,030,569 40,457,243 62,215,342 99,487,812 ------------- --------------- ------------- ------------- -------------- TOTAL..................... $(62,216,553) $ 88,931,336 $160,811,877 $ 55,542,680 $ 243,069,340 ============= =============== ============= ============= ============== LIABILITIES AND MEMBERS' DEFICIT CURRENT LIABILITIES: Accounts payable....... $ 36,034 $ 690,681 $ 3,075,270 $ 3,801,985 Construction payable-Racino project.............. 4,711,861 4,711,861 Purse settlement payable.............. 5,040,312 5,040,312 Accrued payroll and payroll taxes........ 341,218 1,088,514 1,186,183 2,615,915 Accrued interest....... 1,707,840 3,265,705 4,973,545 Other accrued expenses. 5,553 1,554,791 2,835,850 4,396,194 Payables to affiliate.. 6,773,635 $ (6,672,662) 100,973 Current maturity of ~~long-term~~the ~~debt~~Act....... 1,203,672 7,426,336 8,630,008 ------------- --------------- ------------- -------------- -------------- Total current liabilities....... 382,805 6,245,498 34,315,152 (6,672,662) 34,270,793 ------------- --------------- ------------- -------------- -------------- LONG-TERM LIABILITIES: 8 3/4% senior secured notes, net of discount............. 86,739,981 143,205,669 229,945,650 13% senior secured notes, net of discount............. 6,796,576 6,796,576 Senior secured credit facilities........... 6,117,690 7,770,074 13,887,764 Term loan.............. 8,666,667 8,666,667 Notes payable.......... 2,284,192 5,167,056 7,451,248 Other accrued expenses. 250,000 400,000 650,000 Preferred members' interest, redeemable. 4,000,000 4,000,000 ------------- --------------- ------------- -------------- -------------- Total long-term 99,391,863 172,006,042 271,397,905 liabilities....... ------------- --------------- ------------- -------------- -------------- Total liabilities.... 382,805 105,637,361 206,321,194 (6,672,662) 305,668,698 MEMBERS' DEFICIT.......... (62,599,358) (16,706,025) (45,509,317) 62,215,342 (62,599,358) ------------- --------------- ------------- -------------- -------------- TOTAL..................... $(62,216,553) $ 88,931,336 $160,811,877 $ 55,542,680 $ 243,069,340 ============= =============== ============= ============== ============== Yes x No o

~~Three~~Indicate ~~Months~~by ~~Ended~~check ~~March~~mark whether ~~31,~~the ~~2005~~registrant ----------------------------------------------------------------------------- Parent Subsidiary Subsidiary Co-Issuer - Co-Issuer - Guarantor - Consolidating PGL DJL OED Adjustments Consolidated ------------- --------------- ------------- -------------- --------------- REVENUES: Casino...................... $ 13,071,184 $ 22,366,740 $ 35,437,924 Racing...................... 3,338,269 3,338,269 Video poker................. 607,946 607,946 Food and beverage........... 615,799 2,376,305 2,992,104 Management fee income....... 470,362 $ (~~470,362) Other....................... 55,925 195,009 250,934 Less promotional allowances. (257,709) (~~1~~,165,003~~) has ~~(1,422,712)~~filed ~~-------------~~all ~~---------------~~reports ~~-------------~~required ~~--------------~~to ~~--------------~~be ~~Total~~filed ~~net revenues.......~~ by Section 13~~,955,561~~ ~~27,719,266~~or 15(~~470,362~~d) of ~~41,204,465~~the ~~-------------~~Securities ~~---------------~~Exchange ~~-------------~~Act -------------- -------------- EXPENSES: Casino...................... 6,110,776 11,978,525 18,089,301 Racing...................... 2,741,972 2,741,972 Video poker................. 467,489 467,489 Food and beverage........... 626,806 1,706,780 2,333,586 Boat operations............. 579,362 579,362 Other....................... 10,446 87,314 97,760 Selling, general and administrative........... $ 289,393 1,905,100 3,427,993 309,949 5,932,435 Depreciation and amortization............. 1,008,568 2,929,283 3,937,851 Pre-opening expense......... 39,350 39,350 Development expense......... 53,224 36,750 45,703 135,677 Affiliate management fees... 777,476 (470,362) 307,114 (Gain) loss on disposal of ~~assets...................~~1934 ~~24,224~~during ~~(61,662)~~the preceding ~~(37,438)~~twelve ~~Corporate~~months ~~expense allocation 167,948 142,001~~ (~~309,949)~~or ~~-------------~~for ~~---------------~~such ~~-------------~~shorter ~~--------------~~period ~~--------------~~that ~~Total~~the ~~expenses..............~~registrant ~~342,617~~was required ~~10,469,980~~to ~~24,282,224~~file ~~(470,362)~~such ~~34,624,459 ------------- --------------- ------------- -------------- -------------- INCOME (LOSS~~reports) ~~FROM OPERATIONS............... (342~~,~~617)~~ ~~3,485,581~~and ~~3,437,042 6,580,006 OTHER INCOME~~ (~~EXPENSE): Interest income.............~~ 2~~,170 11,305 13,475 Interest expense, net of amounts capitalized...... (2,323,785~~) has ~~(4,361,979)~~been ~~(6,685,764)~~subject ~~Interest expense related~~ to ~~preferred~~such ~~members'~~filing requirements ~~interest,~~for ~~redeemable...............~~the ~~(90,000)~~past (90~~,000)~~ ~~Income from equity investment in subsidiaries~~days............. 160,334 (160,334) ------------- -------------- ------------ ------------- -------------- Total other expense...... 160,334 (2,411,615) (4,350,674) (160,334) (6,762,289) ------------- -------------- ------------ ------------- -------------- NET INCOME (LOSS) TO COMMON MEMBERS' INTEREST........ $ (182,283) $ 1,073,966 $ (913,632) $ (160,334) $ (182,283) ============ ============= ============= ============= =============== Yes x No o

~~Three~~Indicate ~~Months~~by ~~Ended~~check ~~March~~mark whether ~~31,~~the ~~2004~~registrant ~~------------------------------------------------------------------------------------~~is ~~Parent~~a ~~Subsidiary~~large ~~Subsidiary~~accelerated Co-Issuer - Co-Issuer - Guarantor - Consolidating PGL DJL OED Other Adjustments Consolidated ------------- ------------- -------------- ------------- ------------- ------------- REVENUES: Casino...................... $ 12filer,~~094,244~~ $an ~~18,099,105~~accelerated ~~$ 30~~filer,~~193,349~~ ~~Racing......................~~or 3,578,762 3,578,762 Video poker................. 786,841 786,841 Food and beverage........... 687,409 2,130,391 2,817,800 Management fee income....... 370,219 $ 123,406 $ (493,625) Other....................... 58,869 142,248 201,117 Less promotional allowances. (662,522) (1,349,951) (2,012,473) a non-~~------------~~accelerated ~~------------- -------------- ------------- ------------- ------------- Total net revenues~~filer.~~......~~ ~~12,548,219~~See ~~23,387,396~~definition ~~123,406~~of ~~(493,625)~~“accelerated ~~35,565,396~~filer ------------- ------------- -------------- ------------- ------------- ------------- EXPENSES: Casino...................... 5,463,590 10,000,396 15,463,986 Racing...................... 2,990,987 2,990,987 Video poker................. 536,312 536,312 Food and ~~beverage...........~~large accelerated ~~619,934~~filer” 1,654,799 2,274,733 Boat operations............. 573,061 573,061 Other....................... 23,162 101,831 124,993 Selling, general and administrative........... 1,793,310 3,308,211 5,101,521 Depreciation and amortization............. 577,034 2,319,029 2,896,063 Pre-opening expense......... 221,283 221,283 Development expense......... 21,270 21,270 Affiliate management fees... 706,251 43,749 (493,625) 256,375 ------------- ------------- -------------- ------------- ------------- ------------- Total expenses.............. 9,071,361 21,839,099 43,749 (493,625) 30,460,584 ------------- ------------- -------------- ------------- ------------- ------------- INCOME (LOSS) FROM OPERATIONS............... 3,476,858 1,548,297 79,657 5,104,812 OTHER INCOME (EXPENSE): Interest income............. 11,222 45,863 57,085 Interest expense, net of amounts capitalized...... (2,728,710) (4,964,018) (7,692,728) Interest expense related to preferred members' interest, redeemable............... (90,000) (90,000) Loss from equity investment in ~~subsidiaries..........~~Rule ~~$ (2,620,831) 2,620,831~~ 12b-~~------------ ------------- -------------- ------------- ------------- ------------- Total other expense...... (~~2~~,620,831)~~ ~~(2,807,488)~~of ~~(4,918,155)~~the ~~2,620,831~~Exchange ~~(7,725,643) ------------- ------------- -------------- ------------- ------------- ------------- NET LOSS TO COMMON MEMBERS' INTEREST~~Act.~~................ $ (2,620,831) $ 669,370 $ (3,369,858) $ 79,657 $ 2,620,831 $ (2,620,831) ============= ============= ============== ============= ============= =============~~

~~Three~~Large ~~Months Ended March 31, 2005~~ Accelerated Filer o Accelerated Filer o Non----------------------------------------------------------------------------- Parent Subsidiary Subsidiary Co-Issuer - Co-Issuer - Guarantor - Consolidating PGL DJL OED Adjustments Consolidated ------------- -------------- ------------- -------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss)........ $ (182,283) $ 1,073,966 $ (913,632) $ (160,334) $ (182,283) Adjustments to reconcile net income (loss) to net cash flows from operating activities: Depreciation and amortization........ 1,008,568 2,929,283 3,937,851 Provision for doubtful accounts............ 26,643 26,643 Amortization of deferred financing costs and bond discount............ 302,447 428,902 731,349 (Gain) loss on disposal of assets.. 24,224 (61,662) (37,438) Income from equity investment in subsidiaries........ (160,334) 160,334 Changes in operating assets and liabilities: Restricted cash-purse settlements....... (2,491,802) (2,491,802) Receivables......... (20,457) (210,913) (231,370) Receivables from affiliates........ (458,219) 458,219 Payables to affiliates........ 615,007 (458,219) 156,788 Inventories......... 12,117 (48,526) (36,409) Prepaid expenses and other assets.. (15,500) 373,673 406,837 765,010 Accounts payable.... 58,575 (296,543) 1,709,628 1,471,660 Accrued expenses.... 129,633 1,293,712 3,202,502 4,625,847 ------------- -------------- ------------- -------------- ------------ Net cash flows from operating activities (169,909) 3,340,131 5,565,624 8,735,846 ------------- -------------- ------------- -------------- ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Business acquisition and licensing costs........ (104,337) (104,337) Construction project development costs...... (318,731) (3,674,174) (3,992,905) Purchase of property and equipment.............. (489,674) (1,093,029) (1,582,703) Proceeds from sale of property and equipment. 18,000 7,560 25,560 ------------- -------------- ------------- -------------- ------------ Net cash flows from investing activities (318,731) (471,674) (4,863,980) (5,654,385) ------------- -------------- ------------- -------------- ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Deferred financing costs. (3,050) (1,984) (5,034) Principal payments on debt................... (1,475,545) (2,309,729) (3,785,274) Proceeds from senior credit facilities...... 1,000,000 1,000,000 Member distributions..... 493,146 (1,174,013) (230,334) (911,201) ------------- -------------- ------------- -------------- ------------ Net cash flows from financing activities 493,146 (2,652,608) (1,542,047) (3,701,509) NET DECREASE IN CASH AND CASH EQUIVALENTS......... 4,506 215,849 (840,403) (620,048) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR..... (1,211) 3,433,915 7,071,312 10,504,016 ------------- ------------- ------------- ------------- ------------ CASH AND CASH EQUIVALENTS AT END OF YEAR........... $ 3,295 $ 3,649,764 $ 6,230,909 $ 9,883,968 ============= ============= ============= ============ ============Accelerated Filer x

~~Three~~Indicate ~~Months~~by ~~Ended~~check ~~March~~mark ~~31,~~if the ~~2004~~registrant ~~------------------------------------------------------------------------------------------~~is ~~Parent~~a ~~Subsidiary~~shell ~~Subsidiary~~company Co-Issuer - Co-Issuer - Guarantor - Consolidating PGL DJL OED Other Adjustments Consolidated ------------- ------------- --------------- ------------- ------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss................. $ (~~2,620,831)~~as $defined 669,370 $ (3,369,858) $ 79,657 $ 2,620,831 $ (2,620,831) Adjustments to reconcile net loss to net cash flows from operating activities: Depreciation and amortization........ 577,034 2,319,029 2,896,063 Provision for doubtful accounts............ 31,481 31,481 Amortization of deferred financing costs and bond discount............ 298,080 508,469 806,549 Loss from equity investment in ~~subsidiaries........ 2,620,831 (2,620,831) Changes in operating assets and liabilities: Restricted cash~~Rule 12b-~~purse settlements......... (~~2~~,801,846)~~ (2,801,846) Receivables............ (40,988) 153,310 112,322 Receivables from affiliates.......... (370,220) 51,594 318,626 Payables to affiliates. 493,626 (493,626) Inventories............ 3,968 12,713 16,681 Prepaid expenses and other assets........ 50,466 (554,032) (503,566) Accounts payable....... (140,277) 3,496,621 3,356,344 Accrued expenses....... (2,397,958) (3,115,029) (175,000) (5,687,987) ------------- ------------- --------------- ------------- ------------- -------------- Net cash flows from operating activities..... (1,319,044) (2,856,997) (43,749) (175,000) (4,394,790) ------------- ------------- --------------- ------------- ------------- -------------- CASH FLOWS FROM INVESTING ACTIVITIES: Business acquisition and licensing costs........ (68,504) (68,504) Racino project development costs...... (16,888,572) (16,888,572) Proceeds from (deposits to) restricted cash - racino project, net.... 13,011,173 13,011,173 Maturity and sale of ~~restricted~~the Exchange ~~investments. 7,919,351 7,919,351 Purchase of property and equipment.............. (404,148~~Act) ~~(377,532) (781,680) ------------- ------------- --------------- ------------- ------------- -------------- Net cash flows from investing activities~~..... (404,148) 3,595,916 3,191,768 ------------- ------------- --------------- ------------- ------------- -------------- CASH FLOWS FROM FINANCING ACTIVITIES: Principal payments on debt................... (150,000) (1,292,026) (1,442,026) Proceeds from FF&E credit facility........ 3,467,507 3,467,507 Member distributions..... (1,154,446) (218,749) 43,749 175,000 (1,154,446) ------------- ------------- --------------- ------------- ------------- -------------- Net cash flows from financing activities..... (1,304,446) 1,956,732 43,749 175,000 871,035 ------------- ------------- --------------- ------------- ------------- -------------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (3,027,638) 2,695,651 (331,987) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD... 12,655,641 8,502,654 21,158,295 ------------- ------------- --------------- ------------- ------------- -------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD......... $ 9,628,003 $ 11,198,305 $ 20,826,308 ============= ============= ============== ============= ============= ============== Yes o No x

~~Diamond~~All Joof ~~OED~~the ~~Three~~common ~~Months~~equity ~~Ended~~interests ~~March~~of 31Peninsula Gaming, ~~Three~~LLC Months Ended March 31, 2005 2004 2005 2004 ---------------- -------------- --------------- ---------------- Revenues: Casino $ 13,071,184 $ 12,094,244 $ 22,366,740 $ 18,099,105 Racing 3,338,269 3,578,762 Video poker 607,946 786,841 Food and beverage 615,799 687,409 2,376,305 2,130,391 Other 55,925 58,869 195,009 142,248 Less promotional allowances (~~257,709)~~the ~~(662,522~~“Company”) ~~(1,165,003)~~are ~~(1,349,951)~~held ~~----------------~~by ~~--------------~~Peninsula ~~---------------~~Gaming ~~---------------- Net revenues 13~~Partners,~~485,199~~ ~~12,178,000~~LLC. ~~27,719,266~~All ~~23,387,396~~of the ~~----------------~~common ~~--------------~~equity ~~---------------~~interests ~~----------------~~of ~~Expenses:~~Diamond ~~Casino 6~~Jo,~~110,776~~ 5LLC,~~463,590~~ ~~11,978,525~~The ~~10,000,396~~Old ~~Racing~~Evangeline 2Downs,~~741~~ L.L.C.,~~972~~ ~~2,990,987~~Diamond ~~Video~~Jo ~~poker~~Worth ~~467~~Holdings,~~489~~ ~~536,312~~LLC ~~Food~~ and ~~beverage~~Peninsula ~~626,806~~Gaming ~~619,934~~Corp. ~~1,706,780~~are ~~1,654,799~~held ~~Boat~~by the ~~operations~~Company. ~~579,362~~All ~~573,061~~of ~~Other~~the ~~10,446~~common ~~23,162~~equity ~~87,314~~interests ~~101,831~~of ~~Selling,~~Diamond ~~general~~Jo ~~and administrative 1~~Worth,~~905,100~~ ~~1,793,310~~LLC ~~3,427,993 3,308,211 Depreciation~~ and Diamond ~~amortization~~Jo ~~1,008,568~~Worth ~~577,034~~Corp. ~~2,929,283~~are ~~2,319,029~~held ~~Pre-opening~~by ~~expense~~Diamond ~~39,350~~Jo ~~221,283~~Worth ~~Development expense 36~~Holdings,~~750~~ 21,270 45,703 (Gain) loss on disposal of assets 24,224 (61,662) Affiliate management fees 307,114 256,375 ---------------- -------------- --------------- ---------------- Total expenses 10,302,032 9,071,361 23,669,861 21,389,223 ---------------- -------------- --------------- ---------------- Income (loss) from operations $ 3,183,167 $ 3,106,639 $ 4,049,405 $ 1,998,173 ================ ============== ================ ================LLC.

~~Payments~~PENINSULA ~~due~~GAMING, byLLC INDEX ~~Period~~TO FORM 10----------------------------------------------------------------------- Contractual Obligations Total Less Than 1 - 3 Years 4 - 5 Years Thereafter 1 Year ------------------------------------------ ------------- ------------ ------------- ------------ ------------- Long-Term Debt........................... $ 283.3 $ 9.1 $ 18.0 $ 15.7 $ 240.5 Interest on Long-Term Debt............... 159.1 23.6 45.4 43.2 46.9 Operating Leases......................... 1.7 1.1 0.5 0.1 Purchase Commitments..................... 1.1 0.3 0.4 0.2 0.2 Litigation Settlement and Other.......... 3.2 1.5 1.6 0.1 ------------- ------------ ------------- ------------ ------------- Total Contractual Cash Obligations....... $ 448.4 $ 35.6 $ 65.9 $ 59.3 $ 287.6 ============= ============ ============= ============ =============Q

Interest Carrying Fair Description Maturity Rate Value Value -------------------------------------------------------- ---------------- ---------- -------- ------- 8 3/4% senior secured notes............................ April 15, 2012 8 3/4% $ 230.0 $ 226.0 13% senior secured notes with contingent interest of OED................................................. March 1, 2010 13% 6.8 6.9 Revolving line of credit............................... June 16, 2008 6 3/4% 13.7 13.7 Term loan.............................................. June 16, 2008 8 1/4% 11.7 11.7 Note payable........................................... October 1, 2010 8 3/4% 3.3 3.3 Note payable........................................... October 1, 2007 0% 3.4 3.1 Note payable........................................... October 1, 2007 0% 3.6 3.3 Note payable........................................... November 1, 2005 0% 0.1 0.1 Note payable........................................... November 1, 2005 0% 0.7 0.7 Note payable........................................... July 1, 2005 9 1/2% 0.1 0.1 Preferred members' interest, redeemable................ October 13, 2006 9% 4.0 4.0 ______________ * Represents fair value as of March 31, 2005 based on information provided by an independent investment banking firm.

	Page
Part I - Financial Information	3

Item 1 - Financial Statements

Peninsula Gaming, LLC:
Condensed Consolidated Balance Sheets (Unaudited) as of June 30, 2007 and December 31, 2006	3
Condensed Consolidated Statements of Operations (Unaudited) for the Three and Six Months Ended June 30, 2007 and 2006	4
Condensed Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended June 30, 2007 and 2006	5
Notes to Condensed Consolidated Financial Statements (Unaudited)	6

Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3 - Quantitative and Qualitative Disclosures About Market Risk	31

Item 4 - Controls and Procedures	32

Part II - Other Information	32

Item 1 - Legal Proceedings	32
Item 1A - Risk Factors	33
Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3 - Defaults Upon Senior Securities	33
Item 4 - Submission of Matters to a Vote of Security Holders	33
Item 5 - Other Information	33
Item 6 - Exhibits	33

Signatures	35

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

PENINSULA GAMING, LLC

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in thousands)

	June 30, 2007			December 31, 2006
ASSETS

CURRENT ASSETS:
Cash and cash equivalents	$	53,317		$	56,921
Restricted cash—purse settlements	5,874			4,619
Accounts receivable, less allowance for doubtful accounts of $27 and $39, respectively	5,339			3,529
Inventories	1,062			706
Prepaid expenses and other assets	1,786			1,456
Total current assets	67,378			67,231

RESTRICTED CASH - WORTH PROJECT	—			12,981

PROPERTY AND EQUIPMENT, NET	184,773			164,754
OTHER ASSETS:
Deferred financing costs, net of amortization of $8,399 and $6,603, respectively	14,547			16,224
Goodwill	53,083			53,083
Licenses and other intangibles	36,774			35,521
Deposits and other assets	4,905			4,016
Total other assets	109,309			108,844
TOTAL	$	361,460		$	353,810

LIABILITIES AND MEMBER’S DEFICIT
CURRENT LIABILITIES:
Accounts payable	$	5,829		$	5,383
Construction payable	4,904			5,531
Purse settlement payable	8,557			6,265
Accrued payroll and payroll taxes	5,044			4,575
Accrued interest	7,445			7,437
Other accrued expenses	11,064			9,026
Payable to affiliates	3,431			2,484
Current maturities of long-term debt and leases	7,680			8,645
Total current liabilities	53,954			49,346

LONG-TERM LIABILITIES:
83¤4% senior secured notes, net of discount	252,581			252,381
11% senior secured notes, net of discount	96,046			96,500
13% senior secured notes, net of discount	6,842			6,831
Term loan	—			667
Notes and leases payable, net of discount	3,530			3,544
Other accrued expenses	2,314			1,042
Total long-term liabilities	361,313			360,965
Total liabilities	415,267			410,311

COMMITMENTS AND CONTINGENCIES

MEMBER’S DEFICIT:
Common member’s interest	9,000			9,000
Accumulated deficit	(62,807		)	(65,501		)
Total member’s deficit	(53,807		)	(56,501		)
TOTAL	$	361,460		$	353,810

See notes to condensed consolidated financial statements (unaudited).

PENINSULA GAMING, LLC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in thousands)

	Three Months Ended June 30, 2007			Three Months Ended June 30, 2006			Six Months Ended June 30, 2007			Six Months Ended June 30, 2006
REVENUES:
Casino	$	57,320		$	54,864		$	110,184		$	96,319
Racing	6,658			6,530			10,120			13,232
Video poker	1,057			882			2,194			1,621
Food and beverage	4,253			4,094			7,672			7,624
Other	2,936			2,895			5,299			4,833
Less promotional allowances	(5,234		)	(4,718		)	(10,140		)	(8,353		)
Total net revenues	66,990			64,547			125,329			115,276

EXPENSES:
Casino	24,308			23,169			46,647			41,830
Racing	5,356			5,481			8,273			10,969
Video poker	863			724			1,692			1,247
Food and beverage	3,345			3,257			6,069			5,786
Other	1,977			1,934			3,228			3,158
Selling, general and administrative	15,844			11,774			26,865			19,044
Depreciation and amortization	5,105			5,628			10,054			9,808
Pre-opening expense	160			175			243			874
Development expense	139			106			1,784			130
Affiliate management fees	1,417			1,253			2,572			2,034
Loss on disposal of assets	16			74			97			44
Total expenses	58,530			53,575			107,524			94,924

INCOME FROM OPERATIONS	8,460			10,972			17,805			20,352

OTHER INCOME (EXPENSE):
Interest income	576			113			1,299			316
Interest expense, net of amounts capitalized	(9,989		)	(8,069		)	(19,611		)	(15,485		)
Interest expense related to preferred member’s interest, redeemable	—			(90		)	—			(180		)
Total other expense	(9,413		)	(8,046		)	(18,312		)	(15,349		)

NET (LOSS) INCOME	$	(953	)	$	2,926		$	(507	)	$	5,003

See notes to condensed consolidated financial statements (unaudited).

PENINSULA GAMING, LLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

	Six Months Ended June 30, 2007			Six Months Ended June 30, 2006
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(507	)	$	5,003
Adjustments to reconcile net (loss) income to net cash flows from operating activities:
Depreciation and amortization	10,054			9,808
Provision for doubtful accounts	29			87
Amortization of deferred financing costs and debt discount	2,061			1,744
Non-cash equity based and other compensation	7,505			3,283
Loss on disposal of assets	97			44
Changes in operating assets and liabilities:
Restricted cash — purse settlements	(1,255		)	(1,596		)
Receivables	(1,839		)	(3,810		)
Inventories	(356		)	(360		)
Prepaid expenses and other assets	(1,010		)	(1,132		)
Accounts payable	3,262			2,893
Accrued expenses	2,906			2,535
Payable to affiliates	947			824
Net cash flows from operating activities	21,894			19,323

CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in cash value of life insurance	(121		)	(208		)
Proceeds from restricted cash	12,981			18,749
Business acquisition and licensing costs	(1,254		)	(1,286		)
Construction project development costs	(23,544		)	(14,983		)
Purchase of property and equipment	(3,779		)	(4,863		)
Proceeds from sale of property and equipment	22			36
Net cash flows from investing activities	(15,695		)	(2,555		)

CASH FLOWS FROM FINANCING ACTIVITIES:
Deferred financing costs	(385		)	(14		)
Principal payments on debt	(5,114		)	(4,025		)
Payments on senior credit facilities	—			(18,585		)
Proceeds from senior credit facilities	—			14,485
Member distributions	(4,304		)	(1,293		)
Net cash flows from financing activities	(9,803		)	(9,432		)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(3,604		)	7,336

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	56,921			12,778

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	53,317		$	20,114

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest	$	17,714		$	14,393

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Property additions acquired, but not paid	$	4,475		$	3,613
Property and equipment purchased in exchange for indebtedness	3,399			4,786
Deferred financing costs incurred, but not paid	34			20

See notes to condensed consolidated financial statements (unaudited).

PENINSULA GAMING, LLC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Organization and Basis of Presentation

Peninsula Gaming, LLC (“PGL” or the “Company”), a Delaware limited liability company organized in 1999, is a holding company with no independent operations whose primary assets are cash and its equity interests in its wholly owned subsidiaries. PGL’s subsidiaries consist of: (i) Diamond Jo, LLC, a Delaware limited liability company (“DJL”), which owns and operates the Diamond Jo riverboat casino in Dubuque, Iowa; (ii) The Old Evangeline Downs, L.L.C., a Louisiana limited liability company (“EVD”), which owns and operates the Evangeline Downs Racetrack and Casino, or racino, in St. Landry Parish, Louisiana and four off-track betting (“OTB”) parlors in Louisiana; (iii) Diamond Jo Worth Holdings, LLC, a Delaware limited liability company (“DJWH”), and (iv) Peninsula Gaming Corp. (“PGC”), a Delaware corporation with no assets or operations. The Company is a wholly owned subsidiary of Peninsula Gaming Partners, LLC, a Delaware limited liability company (“PGP”).

DJWH is a holding company with no independent operations whose sole assets are its equity interests in its wholly owned subsidiaries. DJWH’s subsidiaries consist of: (i) Diamond Jo Worth, LLC, a Delaware limited liability company (“DJW”), which owns and operates the Diamond Jo Worth casino in Worth County, Iowa which opened in April 2006; and (ii) Diamond Jo Worth Corp., a Delaware limited liability company (“DJWC”) with no assets or operations.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments, consisting only of normal recurring entries unless otherwise disclosed, necessary to present fairly the financial information of the Company for the interim periods presented and have been prepared in accordance with accounting principles generally accepted in the United States of America. The interim results reflected in the financial statements are not necessarily indicative of results expected for the full year or other periods.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and with the instructions to Form 10-Q of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements have been condensed or omitted. These financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2006.

2. Summary of Significant Accounting Policies

Revenue Recognition and Promotional Allowances— In accordance with industry practice, casino and video poker revenue is the net win from gaming activities, which is the difference between gaming wins and losses. Racing revenues include EVD’s share of pari-mutuel wagering on live races after payment of amounts returned as winning wagers, and EVD’s share of wagering from import and export simulcasting as well as EVD’s share of wagering from its off-track betting parlors. Food, beverage and other revenue is recognized as services are performed. Revenues exclude sales taxes.

Capitalized Interest— The Company capitalizes interest costs associated with debt incurred in connection with construction projects. When debt is incurred in connection with the development of construction projects, the Company capitalizes interest on amounts expended on the projects at each applicable subsidiaries’ average cost of borrowed money. Capitalization of interest ceases when the project is substantially complete. Amounts capitalized during the three months ended June 30, 2007 and the six months ended June 30, 2007 and 2006 were $0.2 million, $0.6 million and $0.7 million, respectively. The amount capitalized during the three months ended June 30, 2006 was immaterial.

Equity Based Compensation— Effective January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123 (Revised 2004) Share-Based Payment (“SFAS No. 123R”) which requires that compensation expense under equity based awards be measured at fair value. As allowed under the provisions of SFAS No. 123R the Company has applied SFAS No. 123R prospectively to new awards and to awards modified, repurchased, or cancelled after the required effective date. The Company continues to account for any portion of awards outstanding at the date of initial application of SFAS No. 123R using the accounting principles historically applied to those awards, the intrinsic value method. The Company did not have any new awards and there were no modifications, repurchases, or cancellations of awards issued prior to January 1, 2006 during the three and six months ended June 30, 2007 and 2006. There were no payments to employees related to equity based awards during the three and six months ended June 30, 2007 and 2006. As of June 30, 2007, there was approximately $8.5 million of compensation expense related to nonvested awards which has not been recognized in the

consolidated statement of operations. Based on the intrinsic value at June 30, 2007, approximately $5.1 million of the unrecognized value of awards is scheduled to vest over the next fifteen months unless vested earlier pursuant to the terms of the awards. The remaining $3.4 million is scheduled to vest upon a change in control of the Company. See note 7 for more information regarding the terms of outstanding equity awards.

Equity based awards granted by PGP to Company employees contain a put option exercisable by the employee and are recorded at their intrinsic value (which is the increase in the fair market value of the units granted based on a market multiple of forecasted total segment operating earnings) and the percentage vested. The amount expensed each period is based upon the change in intrinsic value and the percentage vested. As these awards are issued by PGP, the awards represent a PGP liability and not a liability of the Company although the expense associated with awards to Company employees is recorded by the Company with a corresponding credit to member contributions.

Development expense— For the six months ended June 30, 2007, the Company incurred expenses primarily associated with the development of DJL’s proposed new casino. During the six months ended June 30, 2007, DJL expensed $1.4 million as development expense associated with its obligations under the Offer to Purchase Real Estate, Acceptance and Lease dated September 27, 2006 (“Historical Society Agreement”) between DJL and the Dubuque County Historical Society (“Historical Society”) and $0.3 million of other development cost associated with the proposed project. See note 6 for further discussion of the Historical Society Agreement.

Use of Estimates— The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates involve the fair value of equity based compensation, the periodic review of the carrying value of assets for impairment, the estimated useful lives for depreciable assets, estimated liability for EVD sales tax contingency and the estimated liability for slot club awards.

In addition, an estimated loss from a loss contingency is recorded when information available prior to issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Accounting for contingencies such as legal matters requires the use of judgment. Many of these legal contingencies can take years to be resolved. An adverse outcome could have a material impact on financial condition, results of operations, and cash flows.

Reclassifications— Certain prior year amounts have been reclassified to conform with the current year presentation. These reclassifications did not have any effect on the Company’s financial position, operating income, and net income in the three and six months ended 2006. In the statement of cash flows for the six months ended June 30, 2007, the Company classified changes in restricted cash balances related to operating purse settlements as an operating activity. The Company previously presented such changes as an investing activity. In the statement of cash flows for the six months ended June 30, 2006, the Company reclassified changes in restricted cash balances related to operating purse settlements of $(1.6) million from investing to operating to be consistent with the 2007 presentation. In the statement of cash flows for the six months ended June 30, 2007, the Company classified changes in the cash value of certain life insurance policies as an investing activity. The Company previously presented such changes as an operating activity. In the statement of cash flows for the six months ended June 30, 2006, the Company reclassified changes in cash value of certain life insurance policies of $(0.2) million from operating to investing to be consistent with the 2007 presentation.

Recently Issued Accounting Standards— In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. SFAS 157 applies under other accounting pronouncements that require or permit fair value measurements. SFAS 157 indicates, that among other things, a fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. SFAS 157 is effective for the Company’s year ending December 31, 2008. The Company is currently evaluating the impact of SFAS 157 on the Company’s financial statements.

In February 2007, the FASB issued Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 permits companies to choose to measure many financial instruments and certain other items at fair value. If the fair value option is chosen by a company, the company shall report unrealized gains and losses on items for which the fair value option has been elected in earnings at each subsequent reporting date. SFAS 159 is effective as

of the beginning of the Company’s year ending December 31, 2008. The Company is currently evaluating whether to elect the fair value option and the impact, if any, on the Company’s financial statements of implementing SFAS 159.

3. Property and Equipment

Property and equipment at June 30, 2007 and December 31, 2006 is summarized as follows (in thousands):

	June 30, 2007			December 31, 2006
Land and land improvements	$	17,926		$	16,773
Buildings and improvements	133,544			114,823
Riverboat and improvements	8,394			8,410
Furniture, fixtures and equipment	69,514			56,721
Computer equipment	8,956			8,185
Vehicles	378			378
Construction in progress	9,865			13,360
Subtotal	248,577			218,650
Accumulated depreciation	(63,804		)	(53,896		)
Property and equipment, net	$	184,773		$	164,754

Depreciation and amortization expense for the three months ended June 30, 2007 and 2006 was $5.1 million and $5.6 million, respectively. Depreciation and amortization expense for the six months ended June 30, 2007 and 2006 was $10.1 million and $9.8 million, respectively.

In connection with DJL’s proposed casino development, DJL began accelerating depreciation on long-lived assets with a net book value of approximately $4.5 million that will either be contributed to the Historical Society or will not be utilized at its new casino facility. Accelerated depreciation on these assets began during the fourth quarter of 2006, and DJL will continue to depreciate the remaining net book value of those assets, less their estimated fair market value at the date of contribution or estimated net realizable value, through the period that DJL estimates commencing operations at the new facility. Depreciation expense for the three and six months ended June 30, 2007 increased by approximately $0.3 million and $0.5 million, respectively, as a result of accelerated depreciation on these assets.

4. Debt

Long-term debt consists of the following (in thousands):

	June 30, 2007			December 31, 2006
8 3¤4% senior secured notes due April 15, 2012, net of discount of $2,419 and $2,619, respectively, secured by substantially all the assets of PGL, DJL and EVD and the equity of DJL and EVD	$	252,581		$	252,381

11% senior secured notes of DJW due April 15, 2012, net of discount of $0.5 million, secured by substantially all the assets of DJW and a pledge of equity of DJW and DJWC	96,046			96,500

13% senior secured notes of EVD due March 1, 2010 with contingent interest, net of discount of $68 and $79, respectively, secured by certain assets of EVD	6,842			6,831

$50,000 revolving line of credit under a loan and security agreement of DJL and EVD with Wells Fargo Foothill, Inc., interest rate at prime plus a margin of 0.25% (current rate of 8.5% at June 30, 2007), maturing June 16, 2008, secured by substantially all assets of DJL and EVD	—			—

$5,000 revolving line of credit under a loan and security agreement of DJW with a bank, interest rate at prime less a margin of 1.0% (current rate of 7.25% at June 30, 2007), maturing March 1, 2010, secured by substantially all the assets of DJW and guaranteed by the Company’s Chief Executive Officer	—			—

Term loan under a loan and security agreement of DJL and EVD with Wells Fargo Foothill, Inc., interest rate at prime plus 2.5% (current rate of 10.75% at June 30, 2007), due in equal monthly installments of $333, maturing June 16, 2008, secured by certain assets of DJL and EVD	2,667			4,667
Notes payable and capital lease obligations, net of discount of $265 and $234, respectively, interest rate at 7 ¼% — 8 ¾%, due 2007 — 2011	8,543			8,189
Total debt	366,679			368,568
Less current portion	(7,680		)	(8,645		)
Total long term debt	$	358,999		$	359,923

Principal maturities of debt (excluding discount and debt repaid during the period January 1, 2007 through June 30, 2007) for each of the years ended December 31 are summarized as follows (in thousands):

2007	$	10,854
2008	3,967
2009	1,307
2010	7,538
2011	21
Thereafter	351,500
	$	375,187

On August 31, 2006, DJW entered into the First Supplemental Indenture to the Indenture dated as of July 19, 2005 (the “DJW Supplemental Indenture”) which requires, among other things, DJW to offer to buy back a portion of DJW’s 11% senior secured notes due 2012 (“DJW Notes”) on a semi-annual basis, beginning March 31, 2007, with 50% of Excess Cash Flow (as defined therein) at a premium of 7.5%. Such provision was determined to be an embedded derivative and was fair valued and separated from the DJW Notes at date of issuance since it was not clearly and closely related. As of June 30, 2007 and December 31, 2006, the fair value of the put option was approximately $0.8 million and $0.5 million, respectively. The fair value of the put option was determined to be the present value of the estimated premium payments at 7.5% through the maturity of the DJW Notes. The estimated premium payments were calculated using estimated future cash flows developed by the Company to estimate the portion of the DJW Notes that would be subject to the contingent put option and, based on yields of comparable financial instruments and the remaining date to maturity of the DJW Notes, whether the contingent put option would be elected by the noteholder. The fair value of the put option is revalued at the end of each reporting period with a corresponding charge (benefit) in interest expense. During the three month and six month periods ended June 30, 2007, the Company expensed $0.3 million as interest expense related to change in the fair value of the embedded derivative.

As of June 30, 2007, the Company had no outstanding advances under its $50.0 million senior secured credit facility (“PGL Credit Facility”). As of June 30, 2007, DJW had no outstanding advances under its $5.0 million senior secured credit facility (“DJW Credit Facility”). In addition, as of June 30, 2007, the Company had outstanding letters of credit under the PGL Credit Facility and the DJW Credit Facility of approximately $1.0 and $0.7 million, respectively, resulting in available borrowings thereunder of $49.0 and $4.3 million, respectively.

The Company’s 8 ¾% senior secured notes due 2012 (“Peninsula Gaming Notes”), the DJW Notes, the PGL Credit Facility and the DJW Credit Facility each contain various restrictive covenants, all with which the Company was in compliance as of June 30, 2007.

5. Leasing Arrangements

The Company leases three of its OTB facilities and other equipment under noncancelable operating leases. The Company also leases certain gaming machines under cancelable leases that require contingent monthly rental payments. The leases require fixed monthly payments and certain gaming machine leases require contingent monthly rental payments based on usage of the equipment. The leases expire on various dates through 2026. Rent expense was $1.5 million, $1.9 million, $2.7 million and $2.9 million during the three months ended June 30, 2007 and 2006 and the six months ended June 30, 2007 and 2006, respectively.

Minimum rental payments and contingent rental payments for the three and six months ended June 30, 2007 and 2006 are summarized as follows (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2007		2006		2007		2006
Minimum rental payments	$	387	$	386	$	749	$	666
Contingent rental payments	1,290		1,675		2,325		2,551
TOTAL	$	1,677	$	2,061	$	3,074	$	3,217

6. Commitments and Contingencies

Under the Company’s and PGP’s operating agreements, the Company and PGP have agreed, subject to a few exceptions, to indemnify and hold harmless PGP and PGP’s members from liabilities incurred as a result of their positions as sole manager of the Company and as members of PGP, respectively.

In October 2003, EVD filed a Petition for Declaratory Judgment in St. Landry Parish, Louisiana, naming as opposing parties the Secretary of the Department of Revenue and Taxation for the State of Louisiana (the “Department”), the St. Landry Parish School Board and the City of Opelousas. EVD seeks a judgment declaring that sales taxes are not due to the defendants on purchases made by EVD and its contractors in connection with the construction and furnishing of the Evangeline Downs Racetrack and Casino, which was constructed in St. Landry Parish in 2003-2004. EVD’s action is based on Louisiana statutory law which provides that racetracks are not required to pay taxes and fees other than those provided in the racing statutes, and that taxes and fees provided in the racing statutes are in lieu of, among other things, all state and local sales taxes. The St. Landry Parish School Board and the City of Opelousas have questioned the application of the racing statutes to the construction and furnishing of the casino portion of the facility, thereby leading to the filing of this action. The Department has now taken the same position as the St. Landry Parish School Board and the City of Opelousas.

EVD filed a motion for summary judgment, which was scheduled for hearing in July 2005. The defendants filed responses, generally arguing that the exemption under the racing statutes should not extend to the purchase of goods, materials and services which were unrelated to horse racing. Prior to the hearing, it was discovered by EVD that EVD’s contractor (and the contractor’s subcontractors) had paid sales taxes on many purchases related to the construction of the new racetrack and casino, and that EVD, in its payments to the contractor, had reimbursed the contractor for such sales taxes. In light of this discovery, the parties agreed to continue indefinitely the hearing on the motion for summary judgment so that EVD could prepare and file a refund claim for the taxes paid by EVD’s contractor and the contractor’s subcontractors.

In November and December 2005, EVD filed refund claims totaling $0.6 million. Neither the Department nor the St. Landry Parish School Board ruled on EVD’s refund claims within one year of filing those claims resulting in those claims being deemed denied under Louisiana law. EVD has formally appealed the denial of these refund claims. The Department has not yet responded to the appeal. St. Landry Parish has answered the appeal by generally denying EVD’s right to recover the taxes. EVD has not recorded the refund claims due to uncertainty as to the outcome of the matter.

In October 2006, the Department notified EVD that additional taxes and interest totaling approximately $0.4 million were due for the period January 1, 2002 through December 31, 2004. In November 2006, EVD formally protested the additional proposed tax assessment with the Department; the protest was denied by the Department. Accordingly, EVD accrued and paid the additional taxes of approximately $0.4 million, but these taxes were paid under protest. In December 2006, EVD filed suit in East Baton Rouge Parish, Louisiana against the Department for recovery of these taxes paid under protest. The Department has answered this suit by generally denying EVD’s right to recover the taxes paid under protest. This litigation is in its early stages. In addition, during 2006, the Company accrued an additional $1.1 million related to state sales taxes that the Company may be required to pay for the years 2005 and 2006 and for local parish and city taxes for the years 2002 through 2006. Of the total sales tax amount recorded, approximately $0.7 million and $0.4 million was recorded in general and administrative expense and interest expense, respectively, in the consolidated statement of operations for 2006. The remaining balance, totaling approximately $0.4 million, was capitalized in property and equipment. EVD also accrued another $0.1 million and $0.3 million, classified as general and administrative expense, for the three and six months ended June 30, 2007, respectively, for ongoing operating purchases. EVD has accrued management’s best estimate of all sales taxes that would be required to be paid for non-racetrack facilities and ongoing operating purchases as of June 30, 2007.

In October 2005, EVD filed a request to arbitrate certain claims against the general contractor of its racino relating to improper construction of the horse racetrack at the racino. EVD is pursuing a claim for damages of approximately $7.1 million against the general contractor to recoup its track reconstruction costs and other related damages. The contractor has

filed a counterclaim for unpaid billings. EVD believes it is too early to predict the outcome of the arbitration and, accordingly, has not recorded any damage claim as an asset. If the contractor obtains a favorable ruling in the arbitration, EVD may be required to pay up to $1.6 million in unpaid construction retainage and bonuses, which amount has been accrued on the Company’s consolidated balance sheet as of June 30, 2007.

Other than as described above, neither the Company nor its subsidiaries are parties to any pending legal proceedings other than litigation arising in the normal course of business. Management does not believe that adverse determinations in any or all such other litigation would have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

In connection with obtaining its gaming license, DJW is required to pay under an executory agreement a license fee of $5.0 million due in five annual installments of $1.0 million. DJW paid the first three $1.0 million installments in June 2005, May 2006 and May 2007, respectively, with the remaining installments due each May thereafter through 2009. Also, DJW is required to pay the Worth County Development Authority (“WCDA”), its qualified sponsoring organization who holds the joint gaming license with DJW, 5.76% of the casino’s adjusted gross receipts on an ongoing basis. For the three months ended June 30, 2007 and 2006 and the six months ended June 30, 2007 and 2006, DJW expensed $1.1 million, $1.0 million, $2.0 million and $1.0 million, respectively, related to this agreement. The agreement expires on March 31, 2015 but is subject to automatic three year renewal periods.

Dubuque Racing Association, Ltd. (the “DRA”) holds a joint license with DJL to conduct gambling games under Iowa statutes. The DRA owns Dubuque Greyhound Park (“DGP”), a traditional greyhound racetrack with 1,000 slot machines, 20 table games and amenities including a gift shop, restaurant and clubhouse. During 2005, DJL entered into an amendment to its operating agreement under the joint gambling license (the “Amended Operating Agreement”) with the DRA. The Amended Operating Agreement provides for, among other things, that beginning on February 17, 2006, the day that DGP began operating video poker machines, and continuing until August 30, 2006, DRA shall pay to DJL $0.33 for each $1.00 of reduction in DJL’s adjusted gross gaming receipts, subject to a maximum 15% decline and certain payment deferral conditions. On August 31, 2006, a gambling operation commenced business within 125 miles of Dubuque, Iowa. As such, in accordance with the Amended Operating Agreement, DJL’s adjusted gross receipts must first be reduced by 7% prior to calculating the reduction in adjusted gross receipts on which the $0.33 calculation is based. Pursuant to the Amended Operating Agreement, the DRA shall continue to pay DJL $.33 for each $1.00 reduction until the earlier of December 31, 2008 or when DJL opens its new gaming facility. During the three months ended June 30, 2007 and 2006 and the six months ended June 30, 2007 and 2006, DJL recorded other revenue of approximately $0.5 million, $0.5 million, $1.0 million and $0.8 million, respectively, related to this agreement. As of June 30, 2007, DJL has $2.1 million recorded as a long-term receivable included in deposits and other assets on the Company’s consolidated balance sheet related to this agreement.

DJL entered into the Historical Society Agreement in connection with the proposed development of a new casino. The Historical Society Agreement provides for, among other things, (i) a charitable contribution to the Historical Society of $1.0 million payable in equal annual installments of $0.1 million for 10 years commencing one year after the closing of the transactions contemplated by the Historical Society Agreement and (ii) the purchase by DJL of 2.4 acres of real property (the “Expansion Tract”), for a purchase price not to exceed $2 million, to facilitate DJL’s building of a new moored barge facility to expand its existing casino operations. In addition, if the purchase price payable for the Expansion Tract is less than $2.0 million, DJL agreed to make a charitable contribution following the closing of the transactions contemplated by the Historical Society Agreement of the difference between the price paid for the Expansion Tract and $2.0 million. Closing of the Expansion Tract was contingent upon (i) regulatory approval and (ii) satisfactory completion of DJL’s due diligence relating to its purchase of the Expansion Tract. As all contingencies were satisfied as of March 31, 2007, a contribution expense of $1.4 million was recorded in the first quarter of 2007 as development expense at DJL related to (i) the present value of the $1.0 million contribution payable over 10 annual installments and (ii) the difference between $2.0 million and the purchase price of the Expansion Tract of $1.2 million. DJL closed on the purchase of the Expansion Tract in June 2007.

The Historical Society Agreement provides for the Historical Society to lease DJL’s existing dockside pavilion for 99 years at $1 per year and for DJL to transfer all of its rights, title and interest in the existing Diamond Jo vessel to the Historical Society at the Historical Society’s option. As the lease and the transfer of the vessel are conditioned upon DJL commencing operation of its new moored barge facility, no contribution expense will be recorded until such contingency is satisfied.

In February 2007, DJL entered into the Port of Dubuque Public Parking Facility Development Agreement (“Development Agreement”) with the City of Dubuque, Iowa (“City”) regarding, among other things, the design, development, construction and financing of a public parking facility to be located adjacent to DJL’s proposed casino development. The total development cost of the parking facility is estimated to be approximately $23 million. It is anticipated that the City of

Dubuque will hire a third party to construct the parking facility. Under the terms of the Development Agreement, the parking facility will be completed in phases with a required completion date of the first phase, consisting of the first three levels of the north section of the facility, of August 12, 2008 and the required completion date for the second phase, consisting of the fourth level of the north section and all of the south section, of November 11, 2008. The parking facility, which will be owned by the City, will provide free parking to the general public and contain approximately 1,130 parking spaces. As a condition of the Development Agreement, DJL will enter into a minimum assessment agreement with the City in which both parties agree to establish a minimum market value for the DJL casino project on which DJL will be assessed property taxes, commencing on substantial completion of the project and ending when revenue bonds to be issued by the City to finance construction of the facility are repaid. The minimum assessment agreement will also require DJL to pay additional assessments to the extent the assessed property taxes are not sufficient to enable the City to repay the principal and interest on such bonds. DJL’s payment obligations under the minimum assessment agreement will be guaranteed by the Company. The Development Agreement also calls for (i) a minimum initial payment of $6.4 million to be used by the City toward the cost of designing and constructing the public parking facility, (ii) the payment by DJL for the reasonable and necessary actual operating costs incurred by the City for the operation, security, repair and maintenance of the public parking facility and (iii) the payment by DJL to the City of $80 per parking space in the public parking facility per year which funds will be used by the City for capital expenditures necessary to maintain the public parking facility.

The Development Agreement is contingent upon a number of factors including, but not limited to, (i) the City obtaining the necessary financing and required approvals to construct the parking facility, (ii) receipt by the City and approval by DJL of the construction bids pursuant to which it can be determined that the parking facility can be designed and constructed for an amount equal to or less than the sum of the amounts provided by DJL’s initial payment and bond financing by the City and (iii) DJL executing a minimum assessment agreement as discussed above. None of these conditions have been satisfied as of June 30, 2007.

The Company’s future contractual obligations related to purchase commitments (excluding purchase commitments paid during the period January 1, 2007 through June 30, 2007) for each of the years ended December 31 are summarized as follows (in thousands):

2007	$	1,529
2008	1,381
2009	889
2010	622
2011	39
Thereafter	21
Total	$	4,481

7. Related Party Transactions

During the three months ended June 30, 2007 and 2006 and the six months ended June 30, 2007 and 2006, the Company recorded distributions of $3.8 million, $0.7 million, $4.3 million and $1.3 million, respectively, to PGP primarily for (i) certain consulting and financial advisory services related to PGP, (ii) board fees and actual out-of-pocket expenses incurred by members of the board of managers of PGP in their capacity as a board member and (iii) tax, accounting, legal and administrative costs and expenses related to PGP. These amounts were recorded as member distributions.

During the three months ended June 30, 2007 and 2006 and the six months ended June 30, 2007 and 2006, the Company expensed $0.1 million, $0.1 million, $0.2 million and $0.1 million, respectively, as affiliate management fees, related to other compensation and board fees payable to board members of PGP representing services provided to PGL. In December 2006 and subsequently, PGP assumed PGL’s liability for such amounts which were recorded as a member contribution.

In accordance with a management services agreement between OED Acquisition LLC (“OEDA”), a wholly owned subsidiary of PGP, and EVD, under which EVD pays to OEDA a base management fee of 0.44% of net revenue (less net food and beverage revenue) plus an incentive fee based on earnings before interest, taxes, depreciation, amortization and other non-recurring charges, EVD expensed $0.2 million, $0.3 million, $0.4 million and $0.5 million in affiliate management fees payable to OEDA during the three months ended June 30, 2007 and 2006 and the six months ended June 30, 2007 and 2006, respectively.

In accordance with a management services agreement between DJW and PGP, DJW expensed management fees of $0.6 million, $0.5 million, $1.0 million and $0.6 million during the three months ended June 30, 2007 and 2006 and the six months ended June 30, 2007 and 2006, respectively, related to this agreement.

EVD and PGP are parties to separate consulting agreements with a board member of PGP. Under the consulting agreements, EVD and DJW must each pay the board member a fee equal to 2.5% of EVD’s and DJW’s earnings before interest, taxes, depreciation, amortization and other non-recurring charges during the preceding calendar year commencing on January 1, 2004 and May 1, 2006, respectively. Under the consulting agreements, the board member is also entitled to reimbursement of reasonable business expenses as approved by the board of managers of PGP. EVD expensed $0.3 million, $0.2 million, $0.5 million and $0.6 million of affiliate management fees during the three months ended June 30, 2007 and 2006 and the six months ended June 30, 2007 and 2006, respectively, related to its consulting agreement. DJW expensed $0.2 million, $0.2 million, $0.4 million and $0.2 million of affiliate management fees for the three months ended June 30, 2007 and 2006 and the six months ended June 30, 2007 and 2006, respectively, related to this agreement.

At a meeting of the board of managers of PGP held on February 25, 2005, PGP approved grants of profits interests under PGP’s Amended and Restated 2004 Incentive Unit Plan (the “IUP”) to two executive officers of PGL aggregating 2.50% of the outstanding membership units of PGP on a fully diluted basis. In addition, at a meeting of the board of managers of PGP held on September 12, 2005, PGP approved additional grants under the IUP to the executive officers of PGL aggregating 5% of the outstanding membership units of PGP on a fully diluted basis. The terms of the awards include specified vesting schedules, acceleration of vesting upon the occurrence of certain events, anti-dilution protection, transfer restrictions and other customary terms and provisions. The profits interests awarded under the IUP entitle the holders thereof to receive distributions from operating profits on a pro rata basis with holders of common units of PGP (but only to the extent of profits allocated to holders of profits interests after the date of grant) and distributions on liquidation (but only to the extent of their pro rata share of any undistributed operating profits allocated to holders of profits interests and any further appreciation in the fair market value of PGP after the date of grant). Upon any termination of their employment, the respective executive officers are entitled, at their option, to cause the Company to redeem all such vested profits interests granted to them for cash at their fair market value at the time of termination of employment. Quarterly, the Company estimates the fair value of the incentive units and compares that value to the value of the incentive units at the date of grant. Any appreciation in the value of the incentive units is expensed based on the percentage of the grant vested. The Company expensed $5.8 million, $2.0 million, $7.3 million and $3.1 million during the three months ended June 30, 2007 and 2006 and the six months ended June 30, 2007 and 2006, respectively, with respect to these incentive units. In December 2006 and subsequently, PGP assumed PGL’s liability under these agreements which were recorded as a member contribution.

8. Segment Information

The Company is organized around geographical areas and operates three reportable segments: (1) Diamond Jo Dubuque operations, which comprise the Diamond Jo casino operations in Dubuque, Iowa, (2) Diamond Jo Worth operations, which comprise the Diamond Jo Worth casino operations in Worth County, Iowa, and (3) Evangeline Downs operations, which comprise the casino, racetrack and OTBs operated by EVD in Louisiana.

The accounting policies for each segment are the same as those described in note 2 above and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2006. The Company evaluates performance and allocates resources based upon, among other considerations, segment operating earnings (as defined below).

The tables below present information about reported segments as of and for the three and six months ended June 30, 2007 and 2006 (in thousands):

	Net Revenues Three Months Ended June 30,				Net Revenues Six Months Ended June 30,
	2007		2006		2007		2006
Diamond Jo Dubuque	$	10,293	$	11,288	$	20,363	$	23,128
Diamond Jo Worth	20,723		18,479		36,956		19,679
Evangeline Downs	35,974		34,780		68,010		72,469
Total	$	66,990	$	64,547	$	125,329	$	115,276

	Segment Operating Earnings Three Months Ended June 30, (1)						Segment Operating Earnings Six Months Ended June 30, (1)
	2007			2006			2007			2006
General corporate	$	(6,863	)	$	(2,454	)	$	(9,138	)	$	(4,163	)
Diamond Jo Dubuque	3,300			3,670			6,284			7,431
Diamond Jo Worth	8,150			7,691			14,712			7,743
Evangeline Downs	10,710			9,301			20,697			22,231
Total Segment Operating Earnings (1)	15,297			18,208			32,555			33,242
General corporate:
Depreciation and amortization	(11		)	—			(22		)	—
Affiliate management fees	(113		)	(63		)	(191		)	(140		)
Interest income	258			—			509			—
Diamond Jo Dubuque:
Depreciation and amortization	(1,208		)	(973		)	(2,387		)	(1,968		)
Development expense	(83		)	(42		)	(1,716		)	(54		)
Pre-opening expense	(23		)	—			(23		)	—
(Loss) gain on disposal of assets	(15		)	—			(76		)	25
Interest expense, net	(2,561		)	(2,346		)	(5,073		)	(4,700		)
Diamond Jo Worth:
Depreciation and amortization	(1,716		)	(1,078		)	(3,004		)	(1,096		)
Development expense	—			(44		)	—			(44		)
Pre-opening expense	(137		)	(175		)	(196		)	(855		)
Affiliate management fees	(793		)	(723		)	(1,414		)	(843		)
Loss on sale of assets	—			(76		)	—			(76		)
Interest expense, net	(2,938		)	(1,169		)	(5,445		)	(1,589		)
Evangeline Downs:
Depreciation and amortization	(2,170		)	(3,577		)	(4,641		)	(6,744		)
Development expense	(56		)	(20		)	(68		)	(32		)
Pre-opening expense	—			—			(24		)	(19		)
Affiliate management fees	(511		)	(467		)	(967		)	(1,051		)
(Loss) gain on sale of assets	(1		)	2			(21		)	7
Interest expense, net	(4,172		)	(4,531		)	(8,303		)	(9,060		)
Net (loss) income	$	(953	)	$	2,926		$	(507	)	$	5,003

(1) Segment operating earnings is defined as net income (loss) plus depreciation and amortization, pre-opening expense, development expense, affiliate management fees, gain (loss) on disposal of assets, and interest expense (net).

	Total Assets
	June 30, 2007		December 31, 2006

General corporate	$	22,085	$	21,433
Diamond Jo Dubuque	84,060		88,896
Diamond Jo Worth	93,331		87,351
Evangeline Downs	161,984		156,130
Total	$	361,460	$	353,810

	Cash Expenditures for Additions to Long-Lived Assets
	June 30, 2007		June 30, 2006

General corporate	$	4	$	—
Diamond Jo Dubuque	3,311		1,085
Diamond Jo Worth	21,228		16,825
Evangeline Downs	4,034		3,222
Total	$	28,577	$	21,132

9. Fair Value of Financial Instruments

The fair value of the Company’s financial instruments consisting of cash and cash equivalents, restricted cash, receivables, and payables approximate their recorded amounts due to the short term nature of the instruments. The fair value and recorded amounts for the Company’s debt instruments at June 30, 2007 and December 31, 2006 are as follows (in thousands):

	June 30, 2007				December 31, 2006
	Fair Value		Recorded Amount		Fair Value		Recorded Amount
8 3¤4% senior secured notes	$	255,000	$	252,581	$	252,450	$	252,381
11% senior secured notes (and related put option in 2006)	96,500		96,046		95,535		96,500
13% senior secured notes	6,910		6,842		6,910		6,831
Term loan	2,667		2,667		4,667		4,667
Notes payable, capital lease obligations and other debt instruments	9,601		9,334		8,423		8,189

Fair value information is based on current market interest rates and estimates of market conditions for instruments with similar terms, maturities, and degrees of risk.

10. Consolidating Financial Statements

The Company, DJL and PGC (which has no assets or operations) are co-issuers of the Peninsula Gaming Notes of which $233 million were registered with the U.S. Securities and Exchange Commission. EVD is a guarantor of the Peninsula Gaming Notes, and the equity of DJL and EVD is pledged as collateral securing obligations under the Peninsula Gaming Notes. In July 2005, in connection with the offering of the DJW Notes, DJW was designated as an “unrestricted subsidiary” under the indenture governing the Peninsula Gaming Notes and the liens on the assets and equity of DJW under the Peninsula Gaming Notes were released. Consolidating financial information of the co-issuers, the guarantor and the non-guarantor is presented on the following pages.

CONSOLIDATING BALANCE SHEETS

(in thousands)

	At June 30, 2007
(in thousands)	Parent Co-Issuer - PGL			Subsidiary Co-Issuer - DJL			Subsidiary Guarantor - EVD			Subsidiary Non- Guarantor - DJW			Consolidating Adjustments			Consolidated
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	21,510		$	6,516		$	12,487		$	12,804					$	53,317
Restricted cash-purse settlements							5,874									5,874
Accounts receivable, net				38			4,977			324						5,339
Receivables from affiliates				2,036						65			$	(2,101	)
Inventories				234			435			393						1,062
Prepaid expenses and other assets	53			566			781			386						1,786
Total current assets	21,563			9,390			24,554			13,972			(2,101		)	67,378
PROPERTY AND EQUIPMENT, NET	101			15,304			97,729			71,639						184,773
OTHER ASSETS:
Investment in subsidiaries	(74,758		)										74,758
Deferred financing costs, net				4,050			5,796			4,701						14,547
Goodwill				53,083												53,083
Licenses and other intangibles							33,752			3,022						36,774
Deposits and other assets	421			4,269			153			62						4,905
Total other assets	(74,337		)	61,402			39,701			7,785			74,758			109,309
TOTAL	$	(52,673	)	$	86,096		$	161,984		$	93,396		$	72,657		$	361,460

LIABILITIES AND MEMBER’S DEFICIT
CURRENT LIABILITIES:
Accounts payable	$	27		$	515		$	4,808		$	479					$	5,829
Construction payable				1,042			1,859			2,003						4,904
Purse settlement payable							8,557									8,557
Accrued payroll and payroll taxes	1,045			1,092			1,969			938						5,044
Accrued interest				1,953			3,281			2,211						7,445
Other accrued expenses	62			1,649			7,061			2,292						11,064
Payable to affiliates							2,784			2,748			$	(2,101	)	3,431
Current maturities of long-term debt and leases				460			3,709			3,511						7,680
Total current liabilities	1,134			6,711			34,028			14,182			(2,101		)	53,954
LONG-TERM LIABILITIES
8 ¾% senior secured notes, net of discount				101,588			150,993									252,581
11% senior secured notes, net of discount										96,046						96,046
13% senior secured notes, net of discount							6,842									6,842
Notes and leases payable, net of discount				18			1,727			1,785						3,530
Other accrued expenses				658						1,656						2,314
Total long-term liabilities				102,264			159,562			99,487						361,313
Total liabilities	1,134			108,975			193,590			113,669			(2,101		)	415,267

MEMBER’S DEFICIT	(53,807		)	(22,879		)	(31,606		)	(20,273		)	74,758			(53,807		)
TOTAL	$	(52,673	)	$	86,096		$	161,984		$	93,396		$	72,657		$	361,460

	At December 31, 2006
	Parent			Subsidiary			Subsidiary			Subsidiary Non-
	Co-Issuer -			Co-Issuer -			Guarantor -			Guarantor -			Consolidating
	PGL			DJL			EVD			DJW			Adjustments			Consolidated

ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	20,999		$	13,069		$	8,889		$	13,964					$	56,921
Restricted cash-purse settlements							4,619									4,619
Accounts receivable, net				79			2,885			565						3,529
Receivables from affiliates				1,446									$	(1,446	)
Inventories				155			312			239						706
Prepaid expenses and other assets	18			400			755			283						1,456
Total current assets	21,017			15,149			17,460			15,051			(1,446		)	67,231
RESTRICTED CASH — WORTH PROJECT										12,981						12,981
PROPERTY AND EQUIPMENT, NET	119			14,063			98,474			52,098						164,754
OTHER ASSETS:
Investment in subsidiaries	(76,896		)										76,896
Deferred financing costs, net				4,588			6,502			5,134						16,224
Goodwill				53,083												53,083
Licenses and other intangibles							33,498			2,023						35,521
Deposits and other assets	297			3,459			196			64						4,016
Total other assets	(76,599		)	61,130			40,196			7,221			76,896			108,844
TOTAL	$	(55,463	)	$	90,342		$	156,130		$	87,351		$	75,450		$	353,810

LIABILITIES AND MEMBER’S DEFICIT
CURRENT LIABILITIES:
Accounts payable	$	19		$	783		$	4,039		$	542					$	5,383
Construction payable				307			2,118			3,106						5,531
Purse settlement payable							6,265									6,265
Accrued payroll and payroll taxes	999			1,159			1,537			880						4,575
Accrued interest				1,915			3,310			2,212						7,437
Other accrued expenses	20			1,936			5,337			1,733						9,026
Payable to affiliates							2,022			1,908			$	(1,446	)	2,484
Current maturities of long-term debt and leases				1,124			5,728			1,793						8,645
Total current liabilities	1,038			7,224			30,356			12,174			(1,446		)	49,346
LONG-TERM LIABILITIES:
8 ¾% senior secured notes, net of discount				101,507			150,874									252,381
11% senior secured notes, net of discount										96,500						96,500
13% senior secured notes, net of discount							6,831									6,831
Term loan							667									667
Notes and leases payable, net of discount				38			1,735			1,771						3,544
Other accrued expenses				150						892						1,042
Total long-term liabilities				101,695			160,107			99,163						360,965
Total liabilities	1,038			108,919			190,463			111,337			(1,446		)	410,311

MEMBER’S DEFICIT	(56,501		)	(18,577		)	(34,333		)	(23,986		)	76,896			(56,501		)
TOTAL	$	(55,463	)	$	90,342		$	156,130		$	87,351		$	75,450		$	353,810

CONSOLIDATING STATEMENTS OF OPERATIONS

	Three Months Ended June 30, 2007
	Parent			Subsidiary			Subsidiary			Subsidiary Non-
	Co-Issuer -			Co-Issuer -			Guarantor -			Guarantor -			Consolidating
(in thousands)	PGL			DJL			EVD			DJW			Adjustments			Consolidated

REVENUES:
Casino				$	10,283		$	27,586		$	19,451					$	57,320
Racing							6,658									6,658
Video poker							1,057									1,057
Food and beverage				629			2,866			758						4,253
Affiliate management fee income				724									$	(724	)
Other				587			350			1,999						2,936
Less promotional allowances				(1,206		)	(2,543		)	(1,485		)				(5,234		)
Total net revenues				11,017			35,974			20,723			(724		)	66,990

EXPENSES:
Casino				4,467			12,918			6,923						24,308
Racing							5,356									5,356
Video poker							863									863
Food and beverage				608			2,056			681						3,345
Other				65			75			1,837						1,977
Selling, general and administrative	$	1,889		1,853			3,996			3,132			4,974			15,844
Depreciation and amortization	11			1,208			2,170			1,716						5,105
Pre-opening expense				23						137						160
Development expense				83			56									139
Affiliate management fees	113						1,235			793			(724		)	1,417
Loss on disposal of assets				15			1									16
Corporate expense allocation				1,688			1,643			1,643			(4,974		)
Total expenses	2,013			10,010			30,369			16,862			(724		)	58,530

(LOSS) INCOME FROM OPERATIONS	(2,013		)	1,007			5,605			3,861						8,460

OTHER INCOME (EXPENSE):
Interest income	258			87			73			158						576
Interest expense, net of amounts capitalized				(2,648		)	(4,245		)	(3,096		)				(9,989		)
Income from equity investment in subsidiaries	802												(802		)
Total other expense	1,060			(2,561		)	(4,172		)	(2,938		)	(802		)	(9,413		)
NET (LOSS) INCOME	$	(953	)	$	(1,554	)	$	1,433		$	923		$	(802	)	$	(953	)

	Three Months Ended June 30, 2006
(in thousands)	Parent Co-Issuer - PGL			Subsidiary Co-Issuer - DJL			Subsidiary Guarantor - EVD			Subsidiary Non- Guarantor - DJW			Consolidating Adjustments			Consolidated
REVENUES:
Casino				$	11,286		$	26,745		$	16,833					$	54,864
Racing							6,530									6,530
Video poker							882									882
Food and beverage				641			2,742			711						4,094
Management fee income				665									$	(665	)
Other				583			314			1,998						2,895
Less promotional allowances				(1,222		)	(2,433		)	(1,063		)				(4,718		)
Total net revenues				11,953			34,780			18,479			(665		)	64,547

EXPENSES:
Casino				4,800			13,060			5,309						23,169
Racing							5,481									5,481
Video poker							724									724
Food and beverage				612			1,983			662						3,257
Other				9			76			1,849						1,934
Selling, general and administrative	$	682		2,197			4,155			2,968			1,772			11,774
Depreciation and amortization				973			3,577			1,078						5,628
Pre-opening expense										175						175
Development expense				42			20			44						106
Affiliate management fees	63						1,132			723			(665		)	1,253
(Gain) loss on disposal of assets							(2		)	76						74
Corporate expense allocation				658			557			557			(1,772		)
Total expenses	745			9,291			30,763			13,441			(665		)	53,575

(LOSS) INCOME FROM OPERATIONS	(745		)	2,662			4,017			5,038						10,972

OTHER INCOME (EXPENSE):
Interest income				9			34			70						113
Interest expense, net of amounts capitalized				(2,265		)	(4,565		)	(1,239		)				(8,069		)
Interest expense related to preferred member’s interest, redeemable				(90		)										(90		)
Income from equity investment in subsidiaries	3,671												(3,671		)
Total other expense	3,671			(2,346		)	(4,531		)	(1,169		)	(3,671		)	(8,046		)
NET (LOSS) INCOME	$	2,926		$	316		$	(514	)	$	3,869		$	(3,671	)	$	2,926

	Six Months Ended June 30, 2007
	Parent			Subsidiary			Subsidiary			Subsidiary Non-
	Co-Issuer -			Co-Issuer -			Guarantor -			Guarantor -			Consolidating
(in thousands)	PGL			DJL			EVD			DJW			Adjustments			Consolidated

REVENUES:
Casino				$	20,265		$	54,901		$	35,018					$	110,184
Racing							10,120									10,120
Video poker							2,194									2,194
Food and beverage				1,210			5,153			1,309						7,672
Affiliate management fee income				1,345									$	(1,345	)
Other				1,252			813			3,234						5,299
Less promotional allowances				(2,364		)	(5,171		)	(2,605		)				(10,140		)
Total net revenues				21,708			68,010			36,956			(1,345		)	125,329

EXPENSES:
Casino				8,993			25,387			12,267						46,647
Racing							8,273									8,273
Video poker							1,692									1,692
Food and beverage				1,195			3,728			1,146						6,069
Other				115			143			2,970						3,228
Selling, general and administrative	$	2,629		3,776			8,090			5,861			6,509			26,865
Depreciation and amortization	22			2,387			4,641			3,004						10,054
Pre-opening expense				23			24			196						243
Development expense				1,716			68									1,784
Affiliate management fees	191						2,312			1,414			(1,345		)	2,572
Loss on disposal of assets				76			21									97
Corporate expense allocation				2,257			2,126			2,126			(6,509		)
Total expenses	2,842			20,538			56,505			28,984			(1,345		)	107,524

(LOSS) INCOME FROM OPERATIONS	(2,842		)	1,170			11,505			7,972						17,805

OTHER INCOME (EXPENSE):
Interest income	509			209			151			430						1,299
Interest expense, net of amounts capitalized				(5,282		)	(8,454		)	(5,875		)				(19,611		)
Income from equity investment in subsidiaries	1,826												(1,826		)
Total other expense	2,335			(5,073		)	(8,303		)	(5,445		)	(1,826		)	(18,312		)
NET (LOSS) INCOME	$	(507	)	$	(3,903	)	$	3,202		$	2,527		$	(1,826	)	$	(507	)

	Six Months Ended June 30, 2006
(in thousands)	Parent Co-Issuer - PGL			Subsidiary Co-Issuer - DJL			Subsidiary Guarantor - EVD			Subsidiary Non- Guarantor - DJW			Consolidating Adjustments			Consolidated
REVENUES:
Casino				$	23,348		$	56,138		$	16,833					$	96,319
Racing							13,232									13,232
Video poker							1,621									1,621
Food and beverage				1,325			5,588			711						7,624
Management fee income				1,455									$	(1,455	)
Other				926			709			3,198						4,833
Less promotional allowances				(2,471		)	(4,819		)	(1,063		)				(8,353		)
Total net revenues				24,583			72,469			19,679			(1,455		)	115,276

EXPENSES:
Casino				9,988			26,533			5,309						41,830
Racing							10,969									10,969
Video poker							1,247									1,247
Food and beverage				1,231			3,893			662						5,786
Other				16			146			2,996						3,158
Selling, general and administrative	$	1,156		4,462			7,450			2,969			3,007			19,044
Depreciation and amortization				1,968			6,744			1,096						9,808
Pre-opening expense							19			855						874
Development expense				54			32			44						130
Affiliate management fees	140						2,506			843			(1,455		)	2,034
Loss (gain) on disposal of assets				(25		)	(7		)	76						44
Corporate expense allocation				1,117			945			945			(3,007		)
Total expenses	1,296			18,811			60,477			15,795			(1,455		)	94,924

(LOSS) INCOME FROM OPERATIONS	(1,296		)	5,772			11,992			3,884						20,352

OTHER INCOME (EXPENSE):
Interest income				26			66			224						316
Interest expense, net of amounts capitalized				(4,546		)	(9,126		)	(1,813		)				(15,485		)
Interest expense related to preferred member’s interest, redeemable				(180		)										(180		)
Income from equity investment in subsidiaries	6,299												(6,299		)
Total other expense	6,299			(4,700		)	(9,060		)	(1,589		)	(6,299		)	(15,349		)
NET INCOME	$	5,003		$	1,072		$	2,932		$	2,295		$	(6,299	)	$	5,003

CONSOLIDATING STATEMENTS OF CASH FLOWS

	Six Months Ended June 30, 2007
(in thousands)	Parent Co-Issuer - PGL			Subsidiary Co-Issuer - DJL			Subsidiary Guarantor - EVD			Subsidiary Non- Guarantor - DJW		Consolidating Adjustments			Consolidated
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(507	)	$	(3,903	)	$	3,202		$	2,527	$	(1,826	)	$	(507	)
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Depreciation and amortization	22			2,387			4,641			3,004					10,054
Provision for doubtful accounts				29											29
Amortization of deferred financing costs and debt discount				632			880			549					2,061
Non-cash equity based and other compensation	7,505														7,505
Corporate expense allocation	(6,509		)	2,257			2,126			2,126
Loss on disposal of assets				76			21								97
Income from equity investment in subsidiaries	(1,826		)									1,826
Changes in operating assets and liabilities:
Restricted cash — purse settlements							(1,255		)						(1,255		)
Receivables				12			(2,092		)	241					(1,839		)
Receivables from affiliates				(590		)						590
Payables to affiliates

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