**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**Washington, D.C.  20549

** **

**FORM 10-K/A**

 
| **ý** |   | **ANNUAL REPORT PURSUANT TO  SECTION 13 OR 15(D) OF THE SECURITIES  EXCHANGE ACT OF 1934**                                                                                                                           |
|------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                                                                                                                      |
|       |   | **For the fiscal year ended  December 31, 2003**                                                                                                                                                                     |
|       |   |                                                                                                                                                                                                                      |
|       |   | **OR**                                                                                                                                                                                                                    |
|       |   |                                                                                                                                                                                                                      |
| **o**      |   | **TRANSITION REPORT PURSUANT  TO SECTION 13 OR 15(D) OF THE SECURITIES  EXCHANGE ACT OF 1934**                                                                                                                       |
|       |   |                                                                                                                                                                                                                      |
|       |   | **For the transition period  from               to               ** |

 

**Commission File Number 333-88829**

** **

| **Diamond  Jo, LLC/Peninsula Gaming Corp.**                                            |
|----------------------------------------------------------------------------------------|
| (Exact name of registrant  as specified in its charter)                                |
|                                                                                   |   |   |
| **Delaware**                                                                           |   | **42-1483875** |
| (State or  other jurisdiction of incorporation or organization)                        |   | (I.R.S.  Employer Identification No.) |
|                                                                                   |   |   |
| **3rd  Street Ice Harbor, PO Box  1750, Dubuque, Iowa**                           |   | **52001-1750** |
| (Address of  principal executive offices)                                              |   | (Zip Code) |
|                                                                                   |   |   |
| **(563) 583-7005**                                                                     |
| (Registrant’s  telephone number including area code)                              |
|                                                                                   |
| **Diamond Jo, LLC (formerly known as Peninsula Gaming Company, LLC)**                  |
| (Former  name, former address and former fiscal year, if changed since last report.)   |
|                                                                                   |
| **Securities  registered pursuant to Section 12 (g) of the Act:  **None |

 

Indicate by check mark whether the registrant (1) hasfiled all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding twelve months (or for suchshorter period that the registrant was required to file such reports), and (2)has been subject to such filing requirements for the past 90days. Yes ý  No o

 

Indicate by check mark if disclosure of delinquentfilers pursuant to Item 405 of Regulation S-K is not contained herein, and willnot be contained, to the best of registrant’s knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this Form 10-Kor any amendment to this Form 10-K. Yes o  No ý

 

Indicate by check mark whether the registrant is anaccelerated filer (as defined in Rule 12b-2 of the Act). Yes o  No ý

 

All of the common equity interests of Diamond Jo, LLC(formerly known as Peninsula Gaming Company, LLC) (the “Company”) are held byPeninsula Gaming Partners, LLC, and all of the common stock of Peninsula GamingCorp. is held by Diamond Jo, LLC (formerly known as Peninsula Gaming Company,LLC).

 

 

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Explanatory Note

 

On March 30, 2004, Diamond Jo, LLC and Peninsula Gaming Corp. filedwith the Securities and Exchange Commission their Annual Report on Form 10-Kfor the year ended December 31, 2003 (the “Initial 10-K”).  Subsequent to the filing of the Initial10-K, omissions were discovered in the exhibit list in Item 15 of the Initial10-K and errors were discovered in footnote 2 of the table contained in Item 6and in the Overview and Results of Operations sections in Item 7 of the Initial10-K.  This Amendment No. 1 correctsthose omissions and errors.  No otherchanges are included in this Amendment No. 1.

 

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**ITEM 6.****                                                    ****SELECTED FINANCIAL DATA**

 

The following table represents selected financial dataof the Company or its predecessor companies, Greater Dubuque RiverboatEntertainment Company and Harbor Community Investment, L.C., for the five yearsended December 31, 2003.

 

The selected historical financial data for the fiveyears ended December 31, 2003 are derived from audited financialstatements of the Company or its predecessor combined companies.  The Company acquired the operations of thepredecessor companies on July 15, 1999. The selected financial data set forth below should be read inconjunction with, and is qualified in its entirety by reference to,“Management’s Discussion and Analysis of Financial Condition and Results ofOperations,” and the Company’s financial statements and the related notesincluded elsewhere in this document.

 

As set forth in the table below, the amount ofnon-recurring expenses consists of non-recurring charges related to sale ofbusiness and litigation involving the prior owners of the Diamond Jo andGreater Dubuque Riverboat Entertainment Company as well as organizational costsand severance expenses incurred by the Company during the period July 15,1999 (date of inception) to December 31, 1999.  For purposes of determining the ratio of earnings to fixedcharges, earnings are defined as income before income taxes plus fixedcharges.  Fixed charges include interestexpense on all indebtedness, amortization of deferred financing costs and bonddiscount, preferred member distributions and minority interest.  The Company’s ratio of earnings to fixedcharges for the period from July 15, 1999 (date of inception) to December 31,1999 would have been 1.1x if the start-up and organizational costs expensedduring this period were excluded.

 

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|                                                                      |   | **Diamond Jo, LLC (formerly known as  Peninsula Gaming Company, LLC)** |    | **Pro Forma** |   | **Diamond  Jo, LLC  (formerly  known as  Peninsula  Gaming  Company,  LLC** |   | **Predecessor   Companies** |   |
|---------------------------------------------------------------------------|--------|------------------------------------------------------------------------|---------|---------------|--------|-----------------------------------------------------------------------------|--------|-----------------------------|--------|
|                                                                      |   | **2003**                                                               |    | **2002**      |   | **2001**                                                                    |   | **2000**                    |   | **1999** |   | **Period  from  July 15,  1999 to  December  31,1999** |   | **Period from  January 1,  1999 to  July 14, 1999** |   |
|                                                                      |   | **(Dollars in thousands)**                                             |    |
| **Statement of Operations Data**                                          |   |                                                                   |    |          |   |                                                                        |   |                        |   |   |   |   |   |   |   |
| Revenues:                                                                 |   |                                                                   |    |          |   |                                                                        |   |                        |   |   |   |   |   |   |   |
| Casino                                                                    |   | $                                                                      | 56,795  |          | $      | 48,262                                                                      |   | $                           | 47,710 |   | $ | 45,519 |   | $ | 44,916 |   | $ | 21,153 |   | $ | 23,763 |   |
| Racing                                                                    |   | 17,774                                                                 |    | 15,510        |   |                                                                        |   |                        |   |   |   |   |   |   |   |
| Food and  beverage                                                        |   | 4,565                                                                  |    | 3,886         |   | 2,745                                                                       |   | 2,663                       |   | 2,643 |   | 1,235 |   | 1,408 |   |
| Other                                                                     |   | 589                                                                    |    | 145           |   | 132                                                                         |   | 169                         |   | 243 |   | 122 |   | 121 |   |
| Less:  Promotional allowances                                        |   | (3,221                                                                 | )       | (2,615        | )      | (2,470                                                                      | )      | (2,599                      | )      | (1,927 | ) | (1,017 | ) | (910 | ) |
| Net revenues                                                              |   | 76,502                                                                 |    | 65,188        |   | 48,117                                                                      |   | 45,752                      |   | 45,875 |   | 21,493 |   | 24,382 |   |
|                                                                      |   |                                                                   |    |          |   |                                                                        |   |                        |   |   |   |   |   |   |   |
| Expenses:                                                                 |   |                                                                   |    |          |   |                                                                        |   |                        |   |   |   |   |   |   |   |
| Casino                                                                    |   | 23,533                                                                 |    | 20,555        |   | 20,375                                                                      |   | 19,517                      |   | 18,399 |   | 8,599 |   | 9,800 |   |
| Racing                                                                    |   | 14,646                                                                 |    | 12,651        |   |                                                                        |   |                        |   |   |   |   |   |   |   |
| Food and  beverage                                                        |   | 4,282                                                                  |    | 3,820         |   | 2,857                                                                       |   | 2,856                       |   | 2,808 |   | 1,328 |   | 1,480 |   |
| Boat  operations                                                          |   | 2,322                                                                  |    | 2,296         |   | 2,259                                                                       |   | 2,242                       |   | 2,100 |   | 991 |   | 1,109 |   |
| Other                                                                     |   | 443                                                                    |    | 27            |   | 22                                                                          |   | 37                          |   | 37 |   | 16 |   | 21 |   |
| Selling,  general and administrative                                      |   | 12,343                                                                 |    | 8,740         |   | 6,681                                                                       |   | 6,459                       |   | 7,383 |   | 3,736 |   | 3,647 |   |
| Depreciation  and amortization                                            |   | 3,324                                                                  |    | 2,950         |   | 3,963                                                                       |   | 3,571                       |   | 2,698 |   | 1,541 |   | 1,157 |   |
| Pre-opening  expense                                                      |   | 3,257                                                                  |    |          |   |                                                                        |   |                        |   |   |   |   |   |   |   |
| Development  costs                                                        |   | 102                                                                    |    |          |   |                                                                        |   |                        |   |   |   |   |   |   |   |
| Litigation  settlement                                                    |   |                                                                   |    | 1,600         |   |                                                                        |   |                        |   |   |   |   |   |   |   |
| Referendum                                                                |   |                                                                   |    | 771           |   |                                                                        |   |                        |   |   |   |   |   |   |   |
| State of  Wisconsin government relations                                  |   |                                                                   |    | 55            |   | 147                                                                         |   |                        |   |   |   |   |   |   |   |
| Non-recurring  expenses                                                   |   |                                                                   |    |          |   |                                                                        |   |                        |   | 5,005 |   | 3,134 |   | 1,871 |   |
| Total  expenses                                                           |   | 64,252                                                                 |    | 53,465        |   | 36,304                                                                      |   | 34,682                      |   | 38,430 |   | 19,345 |   | 19,085 |   |
|                                                                      |   |                                                                   |    |          |   |                                                                        |   |                        |   |   |   |   |   |   |   |
| Income From  Operations                                                   |   | 12,250                                                                 |    | 11,723        |   | 11,813                                                                      |   | 11,070                      |   | 7,445 |   | 2,148 |   | 5,297 |   |
| Other Income  (Expense)                                                   |   |                                                                   |    |          |   |                                                                        |   |                        |   |   |   |   |   |   |   |
| Interest  income                                                          |   | 490                                                                    |    | 46            |   | 184                                                                         |   | 434                         |   | 231 |   | 155 |   | 76 |   |
| Interest  expense, net of amounts capitalized                             |   | (25,072                                                                | )       | (11,888       | )      | (9,640                                                                      | )      | (9,507                      | )      | (4,714 | ) | (4,383 | ) | (331 | ) |
| Interest  expense related to preferred members’ interest, redeemable |   | (180                                                                   | )       |          |   |                                                                        |   |                        |   |   |   |   |   |   |   |
| Loss on sale  of assets                                                   |   | (50                                                                    | )       | (8            | )      | (152                                                                        | )      | (122                        | )      | (166 | ) | (68 | ) | (98 | ) |
| Total other  expense                                                      |   | (24,812                                                                | )       | (11,850       | )      | (9,608                                                                      | )      | (9,195                      | )      | (4,649 | ) | (4,296 | ) | (353 | ) |
|                                                                      |   |                                                                   |    |          |   |                                                                        |   |                        |   |   |   |   |   |   |   |
| Preferred  member distributions                                           |   | (180                                                                   | )       | (373          | )      | (386                                                                        | )      | (630                        | )      | (289 | ) | (289 | ) |   |   |
| Minority  interest                                                        |   |                                                                   |    | (232          | )      |                                                                        |   |                        |   |   |   |   |   |   |   |
| Net income  (loss) to common interests                                    |   | $                                                                      | (12,742 | )             | $      | (732                                                                        | )      | $                           | 1,819  |   | $ | 1,245 |   | $ | 2,507 |   | $ | (2,437 | ) | $ | 4,944 |   |
|                                                                      |   |                                                                   |    |          |   |                                                                        |   |                        |   |   |   |   |   |   |   |
| Ratio of  earnings to fixed charges                                       |   | 0.5                                                                    | x  | 0.9           | x      | 1.2                                                                         | x      | 1.1                         | x      |   |   | .4 | x | 13.5 | x |
|                                                                      |   |                                                                   |    |          |   |                                                                        |   |                        |   |   |   |   |   |   |   |
| **Other Data**                                                            |   |                                                                   |    |          |   |                                                                        |   |                        |   |   |   |   |   |   |   |
| Cash flows  from operating activities                                     |   | $                                                                      | 769     |          | $      | 11,784                                                                      |   | $                           | 7,250  |   | $ | 4,951 |   |   |   | $ | 2,475 |   | $ | 6,134 |   |
| Cash flows  from investing activities                                     |   | (94,695                                                                | )       | (37,790       | )      | (2,816                                                                      | )      | (2,409                      | )      |   |   | (68,611 | ) | 80 |   |
| Cash flows  from financing activities                                     |   | 104,575                                                                |    | 28,993        |   | (5,273                                                                      | )      | (2,099                      | )      |   |   | 74,055 |   | (8,277 | ) |
| Distributions  to common members                                          |   | 1,557                                                                  |    | 1,260         |   | 1,761                                                                       |   | 1,918                       |   |   |   | 286 |   | 5,258 |   |

 
| **Balance Sheet Data:**                    |   | **2003** |   | **2002** |   | **2001** |   | **2000** |   |   |   | **1999** |   |   |   |
|--------------------------------------------|--------|----------|--------|----------|--------|----------|--------|----------|--------|--------|--------|----------|--------|--------|--------|
| Current  assets                            |   | $        | 40,227 |     | $      | 12,160   |   | $        | 8,034  |   | $      | 9,134    |   |   |   | $ | 8,765 |   |   |   |
| Total assets                               |   | 261,519  |   | 126,448  |   | 84,374   |   | 86,788   |   |   |   | 88,175   |   |   |   |
| Current  liabilities                       |   | 46,321   |   | 35,358   |   | 3,964    |   | 3,533    |   |   |   | 4,370    |   |   |   |
| Total debt  (1)                            |   | 228,825  |   | 102,944  |   | 70,860   |   | 70,764   |   |   |   | 70,680   |   |   |   |
| Preferred  member interest, redeemable (1) |   | —   |   | 4,000    |   | 4,000    |   | 7,000    |   |   |   | 7,000    |   |   |   |
| Total  members’ equity (deficit)      |   | (10,629  | )      | 3,671    |   | 5,663    |   | 5,604    |   |   |   | 6,277    |   |   |   |
|                                            |        |          |        |          |        |          |        |          |        |        |        |          |        |        |        |  |  |  |  |  |

 

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(1)                                  In May 2003, the FASB issuedStatement No. 150, “Accounting for Certain Financial Instruments withCharacteristics of both Liabilities and Equity.” This statement establishesstandards for how an issuer classifies and measures certain financialinstruments with characteristics of both liabilities and equity. It requiresthe issuer to classify a financial instrument that is within the scope of thestandard as a liability if such financial instrument embodies an obligation ofthe issuer. As a result of the adoption of SFAS No. 150 on July 1,2003, we reclassified our $4 million mandatory redeemable preferredmembers’ interest from the mezzanine section of the consolidated balancesheet to long-term debt. Further, preferred member distributions paid oraccrued subsequent to

 

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adoption of SFAS No. 150 are required to bepresented as interest expense separately from interest due to other creditors.We are precluded from reclassifying prior period amounts pursuant to thisstandard.

 

(2)                                  For purposes of determining the ratio ofearnings to fixed charges, earnings are defined as income before income taxesplus fixed charges. Fixed charges include interest expense on all indebtednessand amortization of deferred financing costs. Earnings were insufficient tocover fixed charges for the period from July 15, 1999 to December 31,1999 and for the fiscal years ended December 31, 2002 and 2003 by$2.4 million, $0.7 million and $12.7 million, respectively.

 

**ITEM 7.****                                                   ****MANAGEMENT’S DISCUSSION AND ANALYSISOF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

The following discussion and analysis should be readin conjunction with, and is qualified in its entirety by, our “SelectedFinancial Data” and the financial statements and the related notes theretoappearing elsewhere in this report.

 

**Forward Looking Statements**

 

Some statements contained in “Management’s Discussionand Analysis of Financial Condition and Results of Operations” constitute“forward-looking statements” within the meaning of the Private SecuritiesLitigation Reform Act of 1995. Forward-looking statements include the words “may,” “will,” “estimate,”“intend,” “continue,” “believe,” “expect,” or “anticipate” and other similarwords.  These forward-looking statementsgenerally relate to plans and objectives for future operations and are basedupon management’s reasonable estimates of future results or trends.  Although we believe that the plans andobjectives reflected in or suggested by such forward-looking statements arereasonable, such plans or objectives may not be achieved.  Actual results may differ from projectedresults due, but not limited, to unforeseen developments, includingdevelopments relating to the following:

 

•                  the availability and adequacy of our cashflow to satisfy our obligations, including payment of the Peninsula Notes andadditional funds required to support capital improvements and development,

 

•                  economic, competitive, demographic,business and other conditions in our local and regional markets,

 

•                  changes or developments in the laws,regulations or taxes in the gaming and horse racing industry,

 

•                  actions taken or omitted to be taken bythird parties, including customers, suppliers, competitors, members andshareholders, as well as legislative, regulatory, judicial and othergovernmental authorities,

 

•                  changes in business strategy, capitalimprovements, development plans, including those due to environmentalremediation concerns, or changes in personnel or their compensation, includingfederal, state and local minimum wage requirements,

 

•                  the loss of any license or permit, includingthe failure to obtain an unconditional renewal of a required gaming license ona timely basis,

 

•                  the termination of our operatingagreement with the Dubuque Racing Association, Ltd. or the failure of theDubuque Racing Association, Ltd. to continue as our “qualified sponsoringorganization,”

 

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•                  the loss of our riverboat casino orland-based facilities due to casualty, weather, mechanical failure or anyextended or extraordinary maintenance or inspection that may be required,

 

•                  potential exposure to environmentalliabilities, changes or developments in the laws, regulations or taxes in thegaming or horse racing industry or a decline in the public acceptance of gamingor horse racing and other unforeseen difficulties associated with a newventure,

 

•                  adverse circumstances, changes,developments or events relating to or resulting from our ownership and controlof OED,

 

•                  other factors discussed in our otherfilings with the Securities and Exchange Commission.

 

**Overview**

 

We own and operate (1) the Diamond Joriverboat casino in Dubuque, Iowa with 749 slot machines and 17 table games,(2) the new Evangeline Downs racino development with 1,627 slot machinesin Opelousas, Louisiana, (3) two OTBs, one in Port Allen, Louisiana andone in New Iberia, Louisiana, and (4) an existing horse racetrack nearLafayette, Louisiana. In December 2003 we began casino operations at thenew racino and expect to begin racing operations in the second half of 2004 uponcompletion of the horse racing facilities for remaining capital expenditures ofapproximately $17.5 million as of December 31, 2003. Upon completionof such horse racing facilities at the new racino, we will close operations atthe existing horse racetrack. During 2003, we also renovated our Port Allen OTBand began offering 100 video poker machines in May 2003. ThroughDecember 2003, these video poker machines were operated by a third-partyuntil we received a license to operate them ourselves.

 

Our operations began with the acquisition ofthe Diamond Jo in 1999 for $77.0 million. The Diamond Jo opened in May1994 and was doubled in size by the replacement of the original smallerriverboat casino with the current riverboat casino in October 1995.

 

During 2002, through a series of relatedtransactions, we acquired OED for approximately $30.5 million. At thattime, OED’s operations consisted of the existing horse racetrack near Lafayetteand the two OTBs. We situated the racino in Opelousas, which is in St. LandryParish, because St. Landry Parish permits slot machines while Lafayette Parish,where the existing horse racetrack is located, does not permit slot machines.

 

From 2000 to 2003 our net revenues have grownfrom $45.8 million to $76.5 million and our Adjusted EBITDA has grownfrom $14.6 million to $19.3 million. During 2003, $22.5 millionand $0.9 million of net revenues and Adjusted EBITDA, respectively, werederived from our operations in Louisiana. Such operations were comprisedlargely of racing operations at the existing horse racetrack near Lafayette andthe two OTBs. We attribute the remaining increase at the Diamond Jo to, amongother things, our successful operating strategies that focus on maintaining aloyal customer base, maximizing game play and profitability through targetedmarketing, and attracting new customers. In addition, during 2003 the City ofDubuque substantially completed its $188 million redevelopment project inthe Port of Dubuque, where the Diamond Jo is located. We expect our operationsto continue to benefit from this redevelopment project, which was designed toenhance the attractiveness of the Port of Dubuque as a convention center andtourist destination, by generating increased foot traffic around the site of,and increased admissions to, the Diamond Jo.

 

We are experiencing substantial growth. TheDiamond Jo’s net revenues grew 11.1% to $54.0 million and Adjusted EBITDAgrew 18.0% to $18.4 million for 2003 compared to 2002. We attribute thisgrowth principally to the completion of the $188 million America’s RiverProject in the Port of Dubuque where the Diamond Jo is located. We believe thisproject, along with our marketing efforts, will continue to foster growth atthe Diamond Jo. In December 2003, we began casino operations at EvangelineDowns which currently has 1,627 slot machines. In January 2004 EvangelineDowns generated casino gaming revenues of $6.0 million, or approximately$193,500 per day. In February 2004 these figures increased to$6.3 million and $217,000 per day, representing a per day increase of11.6%. Evangeline Downs’ database of players increased nearly 100% in January,from approximately 14,400 to approximately 28,500, and over 20% in February, toapproximately 35,100. There currently are over 40,000 players in EvangelineDowns’ database. We believe our casino gaming revenues at Evangeline Downs willcontinue to grow as

 

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we further develop our database of players and switch our focus fromawareness to target marketing. In addition, in December 2003 we beganoperating 100 video poker machines at our OTB in Port Allen, Louisiana.

 

**Results of Operations**

 

Our results of operations discussed belowinclude the combined results of operations of the Diamond Jo riverboat casinoin Dubuque, Iowa for the years ended December 31, 2003, 2002 and 2001 andthe results of operations of Evangeline Downs racino in Opelousas and nearLafayette, Louisiana for the year ended December 31, 2003 and the periodFebruary 15, 2002 (the date OED was acquired) through December 31,2002.

 

*Statement of Operations Data*

 
|                                     |   | **Diamond Jo** |       | **Evangeline Downs** |   |
|------------------------------------------|--------|----------------|------------|----------------------|--------|
| **Years Ended December 31,**        |
|                                     |   | **2003**       |       | **2002**             |   | **2001** |   | **Year Ended  December 31,  2003** |   | **Period from  February 15,  2002 to  December 31,  2002** |   |
| *Revenues:*                              |   |           |       |                 |   |   |   |   |   |   |   |
| Casino                                   |   | $              | 53,567,052 |                 | $      | 48,262,485 |   | $ | 47,710,208 |   | $ | 3,227,477 |   | — |   |
| Racing                                   |   |           |       |                 |   |   |   | 17,773,481 |   | $ | 15,509,989 |   |
| Food and  beverage                       |   | 3,027,064      |       | 2,806,118            |   | 2,745,333 |   | 1,538,374 |   | 1,080,208 |   |
| Other                                    |   | 421,907        |       | 144,817              |   | 131,916 |   | 167,361 |   | — |   |
| Less  promotional allowances             |   | (3,011,987     | )          | (2,615,355           | )      | (2,470,310 | ) | (209,147 | ) | — |   |
| Net revenues                             |   | 54,004,036     |       | 48,598,065           |   | 48,117,147 |   | 22,497,546 |   | 16,590,197 |   |
| *Expenses:*                              |   |           |       |                 |   |   |   |   |   |   |   |
| Casino                                   |   | 21,624,237     |       | 20,554,920           |   | 20,375,265 |   | 1,908,730 |   | — |   |
| Racing                                   |   |           |       |                 |   |   |   | 14,646,351 |   | 12,650,996 |   |
| Food and  beverage                       |   | 2,781,945      |       | 2,822,160            |   | 2,856,568 |   | 1,500,065 |   | 998,205 |   |
| Boat  operations                         |   | 2,322,126      |       | 2,295,771            |   | 2,259,314 |   | — |   | — |   |
| Other                                    |   | 383,030        |       | 27,471               |   | 21,801 |   | 59,934 |   | — |   |
| Selling,  general and administrative     |   | 8,890,080      |       | 7,285,166            |   | 6,680,581 |   | 3,452,507 |   | 1,454,476 |   |
| Depreciation  and amortization           |   | 2,499,597      |       | 2,766,543            |   | 3,963,350 |   | 823,944 |   | 183,826 |   |
| Pre-opening  expense                     |   | —         |       | —               |   | — |   | 3,256,963 |   | — |   |
| Development  costs                       |   | 102,272        |       | —               |   | — |   | — |   | — |   |
| Litigation  settlement                   |   | —         |       | —               |   | — |   | — |   | 1,600,000 |   |
| Referendum                               |   | —         |       | 771,111              |   | — |   | — |   | — |   |
| State of  Wisconsin government relations |   | —         |       | 55,000               |   | 147,163 |   | — |   | — |   |
| Total  expenses                          |   | 38,603,287     |       | 36,578,142           |   | 36,304,042 |   | 25,648,494 |   | 16,887,503 |   |
| Income from  operations                  |   | $              | 15,400,749 |                 | $      | 12,019,923 |   | $ | 11,813,105 |   | $ | (3,150,948 | ) | $ | (297,306 | ) |

 

*2003 Compared to 2002*

 

Net revenues increased 17.4% to $76.5 million for the year endedDecember 31, 2003 from $65.2 million for the year endedDecember 31, 2002. The majority of this increase is due to an increase inthe Diamond Jo’s slot revenue of 10.7%, or $4.5 million, for the yearended December 31, 2003 compared to the year ended December 31, 2002,primarily due to an increase in coin-in of 9.5% over the same period. Webelieve this increase in slot revenue was largely attributable to the recenteconomic development in the Port of Dubuque known as the America’s RiverProject, where the Diamond Jo is located, which includes the opening of a newriverwalk and related amenities, a new riverfront hotel, which includes anindoor water park and the National Mississippi River Museum and Aquarium. Theincrease in slot revenue was also attributable to (i) the construction ofour new outdoor entertainment venue featuring nationally recognized musiciansweekly from June through September, (ii) a decrease in competition inthe Eastern Iowa market due to the temporary closing of a Native Americancasino approximately 125 miles southwest of the Diamond Jo and (iii) internalfactors such as targeted promotions to capitalize on opportunities related tothe Port of Dubuque development and reduced competition noted above as well asour continued focus on targeted players club

 

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promotions and maintenance of our slot mix, which includes the additionof 47 nickel slot machines. In addition, our table game revenue at the DiamondJo increased 13.3%, or $0.8 million, for the year ended December 31,2003 compared to the year ended December 31, 2002, primarily due to anincrease in the total table game drop of 6.0% and a 1.3 percentage pointincrease in our table game hold percentage over the same period. The majorityof the remaining increase in our net revenues was due to an increase in netrevenues at OED. Net revenues at OED increased due primarily to an increase incasino revenue of $3.2 million derived from OED’s new racino which openedits doors to the public on December 19, 2003 and an increase in racingrevenues of $2.3 million due primarily to the fact that we did not acquirea 50% interest in OED until February 15, 2002, as well as an increase invideo poker revenues of approximately $0.6 million at OED’s renovated OTBin Port Allen, Louisiana. Our results of operations during the period endedDecember 31, 2002 only include ten and one-half months of OED operationscompared to a full twelve months of operations during the year endedDecember 31, 2003.

 

Casino gaming win in the Dubuque marketincreased 9.6% to $97.2 million for the year ended December 31, 2003from $88.7 million for the year ended December 31, 2002. We believethis increase was primarily due to our ability to capitalize on the recenteconomic development in the Port of Dubuque, a decrease in competition in theEastern Iowa market, strategic use of targeted players club promotions and acontinued focus on maintenance of our slot mix as noted above combined with acontinued focus by operators at the DGP on maintenance of their slot mix duringsuch periods as well as benefiting from the reduced competition in the EasternIowa market as noted above. Our share of the Dubuque market casino gaming winincreased to 55.1% for the year ended December 31, 2003 from 54.4% for theyear ended December 31, 2002. Our casino revenues at the Diamond Joincreased 11.0% to $53.6 million for the year ended December 31, 2003from $48.3 million for the year ended December 31, 2002. Thispercentage increase was the third highest percentage increase in casinorevenues for all thirteen casinos in the State of Iowa as reported to the IowaGaming Commission for the year ended December 31, 2003 compared to theyear ended December 31, 2002. This increase was due to a 10.7% increase inslot revenues and a 13.3% increase in table game revenues as discussed above.Casino revenues at the Diamond Jo were derived 87.6% from slot machines and12.4% from table games for the year ended December 31, 2003 compared to87.8% from slot machines and 12.2% from table games for the year endedDecember 31, 2002. Consistent with an increase in casino revenue, ourcasino win per gaming position per day at the Diamond Jo increased 9.1% to $171for the year ended December 31, 2003 from $157 for the year endedDecember 31, 2002. Admissions to the casinos in the Dubuque marketincreased 6.1% to 2,080,000 for the year ended December 31, 2003 from1,960,000 for the year ended December 31, 2002. For the year endedDecember 31, 2003, our share of the Dubuque market casino admissionsincreased to 50.7% from 50.5% for the year ended December 31, 2002. Ouradmissions at the Diamond Jo for the year ended December 31, 2003increased 6.5% to 1,054,000 from 990,000 for the year ended December 31,2002. For the year ended December 31, 2003 our casino win per admission atthe Diamond Jo increased 4.2% to $50.81 from $48.76 for the year endedDecember 31, 2002. Casino revenues of $3.2 million at OED consistedsolely of revenues from slot machines at OED’s recently opened racino. Casinowin per position at OED was $236 for the year ended December 31, 2003.

 

Racing revenues at OED for the year endedDecember 31, 2003 were $17.8 million compared to $15.5 millionfor the period February 15, 2002 (the date OED was acquired) toDecember 31, 2003. The increase in racing revenues was directly related tothe timing of the acquisition of OED as discussed above and an increase invideo poker revenues of $0.6 million resulting from OED’s Port Allen OTBfacility renovation and the installation of 100 video poker machines during thesecond quarter of 2003.

 

Net food and beverage revenues, otherrevenues and promotional allowances increased $0.5 million during the yearended December 31, 2003 compared to the year ended December 31, 2002due primarily to food & beverage revenues generated from OED’s new racinoand revenues from the Diamond Jo’s new outdoor entertainment venue as discussedabove.

 

Casino operating expenses increased 14.5%, or$3.0 million, to $23.5 million for the year ended December 31,2003 from $20.6 million for the year ended December 31, 2002 dueprimarily to (i) casino expenses at OED of $1.9 million primarilyrelated to purse supplements and gaming taxes which are based on net casinorevenues and casino related payroll and (ii) an increase in gaming taxesat the Diamond Jo of $1.1 million associated with our increased casinorevenues. Racing expenses increased 15.8% to $14.6 million for the yearended December 31, 2003 from $12.7 million for the period endedDecember 31, 2002 due primarily to (i) timing of the acquisition ofOED in 2002 as discussed above and (ii) an increase in operating expensesof $0.6 million related to the addition of 100 new video gaming devices atOED’s renovated OTB in Port Allen, Louisiana. Food and beverage expensesincreased

 

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12.1%, or $0.5 million, to $4.3 million for the year endedDecember 31, 2003 from $3.8 million for the year endedDecember 31, 2002 due primarily to food and beverage expenses at OEDrelated to the opening of OED’s new racino. Boat operation expenses at theDiamond Jo were substantially unchanged at $2.3 million for the year endedDecember 31, 2003 and 2002. Other expenses increased $0.4 millionprimarily due to costs associated with the Diamond Jo’s new outdoor entertainmentvenue as discussed above.

 

Selling, general and administrative expensesincreased 41.2% to $12.3 million for the year ended December 31, 2003from $8.7 million for the year ended December 31, 2002. This increasewas due to (i) an increase in general and administrative expenses at OEDof $2.0 million due primarily to payroll, marketing and other general andadministrative expenses associated with the new racino and the timing of theacquisition of OED (as discussed above), including an increase in professionalfees at OED of approximately $0.2 million and an increase in insuranceexpense at OED of approximately $0.2 million, and (ii) an increase ingeneral and administrative expenses at the Diamond Jo of approximately$1.6 million due primarily to an increase in management compensation atthe Diamond Jo of $0.6 million, an increase in donations of$0.3 million related to a charitable giving agreement with an Iowanon-for-profit organization and an increase in insurance expense at the DiamondJo of $0.1 million.

 

Pre-opening expenses of $3.3 million forthe year ended December 31, 2003 relate to payroll and other expensesincurred by OED with respect to start-up activities surrounding the racinoproject. Development costs of approximately $0.1 million related toexpenses incurred relative to us entering into an exclusive agreement with theWorth County Development Authority pursuant to which the parties agreed tojointly submit an application for a license to operate a gaming facility inWorth County, Iowa. Under this agreement, we have agreed to design, construct,operate and manage a casino with no less than 700 gaming positions, a waterway,if necessary, a recreational vehicle park with a minimum capacity of 200spaces, and, upon reaching a targeted rate of return on invested capital, a100-room hotel development. Litigation settlement of $1.6 million for theyear ended December 31, 2002 relates to OED’s settlement with theLouisiana Horsemen’s Benevolent and Protective Association 1993, Inc. (the“LHBPA”) in February 2003. Referendum costs of $0.8 million duringthe year ended December 31, 2002 relate to various advertising andpromotional expenses to promote the approval of continued gaming on riverboatsin Dubuque County in 2002. During 2002, we incurred expenses of $55,000 relatedto a governmental relations services agreement with respect to gaming issuesand developments in the State of Wisconsin which might affect us and our gamingoperations.

 

Depreciation and amortization expensesincreased 12.6% to $3.3 million for the year ended December 31, 2003from $3.0 million for the year ended December 31, 2002 due primarilyto depreciation of property and equipment at OED’s racino of approximately$0.3 million during the period December 19, 2003 (date at which theracino was opened to the public) through December 31, 2003. During thefirst quarter of 2002, we performed a transitional impairment test on goodwillin accordance with Statement of Financial Accounting Standards (“SFAS”) No. 142“Goodwill and Other Intangible Assets” and determined the estimated fair valueof the Company exceeded its carrying value as of that date. During the firstquarter of 2003, we performed its annual impairment test on goodwill inaccordance with SFAS No. 142 and determined that the estimated fair valuethe Company exceeded its carrying value as of that date. Based on that review,management determined that there was no impairment of goodwill.

 

Net interest expense, including interestexpense related to our redeemable preferred member interests, increased 109.1%to $24.8 million for the year ended December 31, 2003 from$11.8 million for the year ended December 31, 2002. This increase isdue to (i) an increase in net interest expense at OED of$12.7 million primarily associated with interest on the OED Notes and onOED’s senior credit facilities with Wells Fargo Foothill, the amortization andwrite-off of deferred financing costs associated with OED’s term loan withWells Fargo Foothill, the PGP Note (as defined below) and the WET2 Note (asdefined below) (all of which were repaid in February 2003 with theproceeds of the offering of the OED Notes) and timing of the OED acquisition asdiscussed above, (ii) our adoption of FASB Statement No. 150 onJuly 1, 2003 which requires that interest expense associated with ourredeemable preferred members interest be included in interest expense (prior toJuly 1, 2003, this amount was included as a separate line item above “Netincome for common members’ interest” and not included in “Total other expenses”with interest expense) and (iii) interest associated with our seniorsecured credit facility with Wells Fargo Foothill dated February 23, 2001(the “DJL Credit Facility”), $12.0 million of which was drawn down by DJLon February 15, 2002 to consummate the acquisition of OED, resulting intwelve months of interest during the year ended December 31, 2003 comparedto only ten and one-half months of interest during the year endedDecember 31, 2002. Interest expense

 

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of approximately $2.2 million and $0.1 million wascapitalized as part of our construction of the racino during 2003 and 2002,respectively. The “PGP Note” means the note payable to PGP, issued by OEDA,bearing interest at a rate of 7% until January 31, 2003, thereafter at 8%until February 28, 2003, thereafter at 9% until March 31, 2003, andthereafter at the greater of 12% or the fixed rate on the OED Notes, andmaturing on June 30, 2003. The “WET2 Note” means the note payable to WET2,bearing interest at a rate of 7% until March 31, 2003, and thereafter atthe greater of 12% or the fixed rate on the OED Notes, and maturing onJune 30, 2003.

 

*2002 Compared to 2001*

 

Net revenues increased 35.5% to$65.2 million for 2002 from $48.1 million for 2001 primarily due tonet revenues from OED of $16.6 million and an increase in the Diamond Jo’scasino revenues of $0.6 million. This increase in casino revenue was dueto an increase in slot revenue of 3.8%, or $1.6 million for 2002 comparedto 2001. This increase in slot revenues was a result of an increased marketingfocus on the addition of new players club members as well as on targetingplayers club promotions towards more profitable market segments and an increasein the number of slot machines on the gaming floor. This increase in slotrevenues was offset by a decrease in table games revenue at the Diamond Jo of$1.0 million. This decrease was a direct result of a 0.9 percentagepoint decrease in our table game hold percentage and a 10.4% decrease in tablegame drop.

 

Casino gaming win in the Dubuque marketincreased 2.8% to $88.7 million for 2002 from $86.3 million for 2001.We believe this increase was primarily due to targeted players club promotionsand a continued focus on maintenance of our slot mix as well as a continuedfocus by operators at the DGP on maintenance of their slot mix during suchperiod. Our share of the Dubuque market casino gaming win decreased slightly to54.4% for 2002 from 55.3% for 2001. This decrease was attributed to a decreasein our table game revenue as discussed above. Our casino revenues increased1.2% to $48.3 million for 2002 from $47.7 million for 2001. Thisincrease was due to an increase in slot revenue offset by a decrease in tablegame revenues as discussed above. Casino revenues were derived 87.8% from slotmachines and 12.2% from table games for 2002 compared to 85.6% from slotmachines and 14.4% from table games for 2001. Consistent with an increase incasino revenue, our casino win per gaming position per day at the Diamond Joincreased 4.0% to $157 for 2002 from $151 for 2001. Admissions to the casinosin the Dubuque market increased slightly to 1,959,709 for 2002 from 1,946,326for 2001. For 2002, our share of the Dubuque market casino admissions decreasedto 50.5% from 51.7% for 2001. We believe this decrease was primarilyattributable to our targeted use of marketing dollars directed primarilytowards more profitable market segments during 2002 compared to 2001. Ouradmissions at the Diamond Jo for 2002 decreased slightly to 989,865 for 2002from 1,006,237 for 2001. For 2002 our casino win per admission at the DiamondJo increased 2.8% to $48.76 from $47.41 for 2001.

 

Racing revenues of $15.5 million relatedsolely to revenues at OED for the period February 15, 2002 (the date OEDwas acquired) to December 31, 2002. Net food and beverage revenues, otherrevenues and promotional allowances increased to $1.4 million for 2002from $0.4 million for 2001 due to food and beverage revenues at OED of$1.0 million.

 

Casino operating expenses at the Diamond Joincreased slightly to $20.6 million for 2002 from $20.4 million for2001 due mainly to an increase in gaming taxes paid, as a result of an increasein gaming revenues, of $0.1 million and an increase in the state admissionfee imposed by the State of Iowa of $0.1 million. Racing expenses at OEDwere $12.7 million for the period February 15, 2002 (the date OED wasacquired) to December 31, 2002. Food and beverage expenses increased to$3.8 million for 2002 from $2.9 million for 2001 due primarily tofood and beverage expenses from OED of $0.9 million. Boat operationexpenses and other expenses were $2.3 million for 2002 and 2001. Selling,general and administrative expenses increased to $8.7 million for 2002from $6.7 million for 2001. This increase in such expenses resulted fromselling, general and administrative expenses at OED of $1.5 million, anincrease in legal expenses of approximately $0.3 million (resultingprimarily from a credit of $0.2 million in legal expense during the prioryear), and an increase in management bonuses of $0.2 million. Depreciationand amortization expenses decreased 25.6% to $3.0 million for 2002 from$4.0 million for 2001. This decrease was due to adoption of SFAS 142which provides that goodwill and certain indefinite lived intangible assets willno longer be amortized but will be reviewed at least annually for impairmentand written down and charged to income when their recorded value exceeds theirestimated fair value. Goodwill amortization during 2001 was approximately$1.4 million. This decrease was offset by an increase in depreciation atthe Diamond Jo of $0.2 million and at OED of $0.2 million. Litigationsettlement of $1.6 million relates to OED’s settlement with the LHBPA inFebruary 2003. Although the settlement occurred after the date of thefinancial statements, Statement of Financial Accounting Standards No. 5“Accounting for Contingencies”

 

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requires DJL to accrue the loss contingency during 2002. During 2002,DJL incurred various advertising, promotional and other referendum relatedexpenses totaling $0.8 million to promote the approval of continued gamingon riverboats in Dubuque County. During 2002 and 2001, DJL incurred expenses of$55,000 and $147,163, respectively, related to a governmental relationsservices agreement with respect to gaming issues and developments in the Stateof Wisconsin which might affect DJL and its gaming operations.

 

Net interest expense increased 25.2% to$11.8 million for 2002 from $9.5 million for 2001. This increase wasdue to an increase in interest expense of $1.2 million associated with oursenior credit facility with Wells Fargo Foothill providing for commitments ofup to $12.5 million which terminate in 2005, $12.0 million of whichwas drawn down by DJL on February 15, 2002 to consummate an investment inOED and net interest expense at OED of $1.1 million. Interest expense ofapproximately $0.1 million was capitalized as part of our construction ofthe racino during 2002.

 

**Liquidity and Capital Resources**

 

*Cash Flows from Operating, Investing andFinancing Activities*

 

Our cash balance increased $10.6 millionduring the year ended December 31, 2003 to $21.2 million from$10.5 million at December 31, 2002.

 

Cash flows used in operating activities of $0.8 millionfor the year ended December 31, 2003 consisted of a net loss of$12.7 million increased by non-cash charges of $6.7 million,principally depreciation and amortization and write-off and amortization ofdeferred financing costs and an increase in working capital of$6.8 million. The change in working capital is primarily due to anincrease in accrued interest of approximately $5.3 million related to theOED Notes and an increase in accrued payroll of $1.5 million primarilyrelated to the opening of OED’s racino in December 2003.

 

Cash flows used in investing activities forthe year ended December 31, 2003 was $94.7 million consisting of(i) an increase in restricted cash—racino project and restrictedinvestments of $43.9 million related to the investment of unused proceedsfrom the OED Notes into interest bearing cash equivalents and investments whosedistribution is restricted as outlined in the Cash Collateral and DisbursementAgreement, (ii) approximately $55.3 million for construction,architecture fees and other development costs associated with the racinoproject and the purchase of land at St. Landry Parish where the racino is beingdeveloped, (iii) approximately $1.8 million in development costsrelated to the OED acquisition and OED’s racing and gaming licenses and(iv) cash outflows of approximately $2.2 million used for capitalexpenditures mainly related to the purchase of new slot machines at the DiamondJo and video poker machines at OED’s Port Allen OTB, the construction of ourconcert area adjacent to the Diamond Jo which hosts weekly concerts throughoutthe summer months and the renovation of OED’s Port Allen OTB to accommodate thepurchase and installation of 100 video poker machines. These cash outflows wereoffset by (i) cash proceeds from the maturity of restricted investments of$8.1 million, the proceeds of which were used to make the first interestpayment on the OED Notes due September 1, 2003 and (ii) cash proceedsfrom the sale of assets of $0.4 million. We expect additional capitalexpenditures at the Diamond Jo and OED (other than the capital expendituresrelated to the racino project) to be approximately $2.0 million and$1.5 million, respectively, for the year ended December 31, 2004.

 

Cash flows from financing activities for theyear ended December 31, 2003 of $104.6 million reflects the netproceeds from the offering of the OED Notes of $120.7 million, proceedsfrom OED’s draws under its $15.0 million senior secured credit facilitywith Wells Fargo Foothill dated June 24, 2003, as amendedSeptember 22, 2003, December 10, 2003 and December 24, 2003 (the“OED Credit Facility”) and its $16.0 million FF&E credit facility withWells Fargo Foothill dated September 22, 2003 (the “OED FF&E Facility”)of $17.6 million. These proceeds were offset by (i) principalpayments to extinguish OED’s obligations under OED’s term loan with Wells FargoFoothill, the PGP Note and the WET2 Note totaling $20.1 million,(ii) deferred financing costs paid of $11.5 million associated withthe issuance of the OED Notes, the OED Credit Facility and the OED FF&ECredit Facility, (iii) member distributions of $1.6 million and(iv) aggregate principal payments on borrowings under the DJL CreditFacility of $0.6 million.

 

As of December 31, 2003, DJL had $11.3 millionoutstanding under the DJL Credit Facility and OED had $5.1 million and$12.5 million outstanding under the OED Credit Facility and the OEDFF&E Facility, respectively. Approximately $24.2 million of the netproceeds from the sale of the OED Notes were deposited into an interest

 

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reserve account in order to pay the first three payments of fixedinterest on the OED Notes. Although OED’s earnings for the year endedDecember 31, 2003 are not sufficient to cover their current fixed charges(which consist of interest on the OED Notes, including capitalized interest),OED does have sufficient funds deposited in the interest reserve account tosatisfy its obligations under the OED Notes until March 1, 2005, afterwhich, OED anticipates satisfying its interest obligations out of earnings fromoperations. In September 2003, $8.1 million of the initial proceedsdeposited into the interest reserve account, along with interest earned onthose proceeds, were used to pay the first fixed interest payment on the OEDNotes.

 

*Financing Activities*

 

The obligations of DJL under the DJL CreditFacility are senior to our obligations under the DJL Notes. The DJL CreditFacility contains, among other things, covenants, representations andwarranties and events of default customary for loans of this type. The mostsignificant covenants include a minimum “EBITDA” (as defined therein)requirement and the maintenance of certain financial ratios that limit ourability to make distributions and incur debt. At December 31, 2003 and2002, DJL was in compliance with all such covenants. At December 31, 2003,DJL had outstanding borrowings of $11.3 million under the DJL CreditFacility.

 

On March 19, 2004, we amended the DJL CreditFacility (the “DJL Credit Facility Amendment”).  Under the terms of the DJL Credit Facility Amendment, the minimuminterest rate on all outstanding borrowings under DJL Credit Facility less than$10.0 million was reduced to 5.5% and the term of the DJL Credit Facility wasextended by one year to March 12, 2006.

 

OED’s obligations under the OED CreditFacility are secured by a lien on substantially all of its and itssubsidiaries’ current and future assets, other than the constructiondisbursement, interest reserve, completion reserve and excess cash flowaccounts and certain other excluded assets as well as a pledge by OEDA of thecapital stock of OED. Pursuant to the intercreditor agreement described below,the lien on the collateral securing the OED Credit Facility is senior to thelien on such collateral securing the OED Notes.

 

The OED Credit Facility consists of arevolving credit facility which permits OED to request advances and letters ofcredit to finance working capital and other general corporate needs. Pursuantto the OED Credit Facility Amendments, OED had the ability to borrow up to$8.5 million (less amounts outstanding under letters of credit) at any onetime outstanding during the period before the date that the casino portion ofthe racino has been completed and, among other things, is open for business tothe general public and construction costs for the casino have been paid in fullor, if such payments are not yet due on such date, that sufficient funds remainin the construction disbursement account to satisfy such payments in full (the“Phase I Completion Date”). All requirements under the definition of the PhaseI Completion Date were met on January 9, 2004. For the period after thePhase I Completion Date but before the second anniversary of the Phase ICompletion Date (the “Second Anniversary”), the total amount of credit thatwill be available to OED will be the lesser of $15.0 million and aspecified borrowing base (the “Borrowing Base”). For the purposes of the OEDCredit Facility, the Borrowing Base is the lesser of 30% of the amount ofcertain costs incurred by OED in connection with the construction of the racinoproject and 20% of the amount of the distressed-sale valuation of its and itssubsidiaries’ operations and assets. After the Second Anniversary, the totalamount of credit that will be available to OED will be the greater of(i) the lesser of $10.0 million and the Borrowing Base or(ii) the aggregate principal amount of all advances outstanding as of theSecond Anniversary. At December 31, 2003, OED had outstanding borrowingsof $5.1 million and outstanding letters of credit of $3.2 millionunder the OED Credit Facility.

 

All revolving loans and letters of creditissued under the OED Credit Facility will mature on June 24, 2006. Priorto the maturity date, funds borrowed under the OED Credit Facility may beborrowed, repaid and reborrowed, without premium or penalty. OED’s borrowingsunder the OED Credit Facility will bear interest at a base rate (a Wells Fargoprime rate) plus a margin of 2.50%. The interest rate payable under the OEDCredit Facility will increase by 2% per annum during the continuance of anevent of default. Under the OED Credit Facility, OED is also required to pay tothe lender a letter of credit fee equal to 2% per annum on the daily balance ofthe undrawn amount of all outstanding letters of credit and to the institutionissuing a letter of credit a fronting fee, in each case payable in arrears on amonthly basis.

 

The OED Credit Facility contains, among otherthings, covenants, representations and warranties and events of defaultcustomary for loans of this type. The most significant covenants include aminimum “EBITDA” (as defined therein) requirement and a maximum capitalexpenditure requirement. At December 31, 2003, OED was in compliance withall such covenants.

 

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Concurrently with the closing of the OEDCredit Facility, the trustee under the indenture for the OED Notes (as securedparty) entered into an intercreditor agreement with Wells Fargo Foothill as thelender under such credit facility, providing, among other things, that the liensecuring the indebtedness under the OED Credit Facility is senior to the liensecuring the indebtedness under the OED Notes (except that the constructiondisbursement, interest reserve, completion reserve and excess cash flowaccounts are security only for the OED Notes).

 

On September 22, 2003, OED entered intothe OED FF&E Facility. Under the OED FF&E Facility, the lender agreesto make a series of term loans, up to a maximum amount of $16.0 million,to finance the purchase of gaming equipment and other furniture, fixtures andequipment. OED’s obligations under the OED FF&E Facility are, subject tocertain limitations, secured by a first priority lien on all of the furniture,fixtures and equipment, and all proceeds and products thereof. AtDecember 31, 2003, OED had outstanding borrowings of $12.5 millionunder the OED FF&E Facility.

 

Loans under the OED FF&E Facility arerepayable in 48 equal monthly installments of principal, commencing onMarch 1, 2004, and continuing on the first day of each month thereafteruntil the unpaid balance of all loans are paid in full. The outstandingprincipal balance and all accrued and unpaid interest under all loans shallalso be due and payable in full on March 1, 2008. Once borrowed, all loansmay be prepaid in whole or in part without penalty or premium at any timeduring the term of this agreement. Amounts borrowed and repaid may not bereborrowed. OED’s borrowings under the OED FF&E Facility bear interest at abase rate (a Wells Fargo prime rate) plus a margin of 2.50%, but at no timeshall the interest rate be less than 6%. The interest rate payable under theOED FF&E Facility will increase by 2% per annum during the continuance ofan event of default.

 

The OED FF&E Facility contains, amongother things, covenants, representations and warranties and events of defaultcustomary for loans of this type. The most significant covenants include aminimum “EBITDA” (as defined therein) requirement and a maximum capitalexpenditure requirement. At December 31, 2003 OED was in compliance withall such covenants.

 

In October 2003, OED entered intopurchase agreement to acquire 93 acres of land, divided into sevenapproximately equal parcels, for a total purchase price of $3,850,000. Thepurchase price under this second purchase agreement was financed by the sellerwith OED issuing a $3,850,000 note payable to the seller. The note is payablein seven equal annual installments of $550,000 beginning October 24, 2004and bears interest at a rate of 4.75% of the unpaid balance due monthly inarrears on the fifth day of each month beginning on December 5, 2003. Thenote is collateralized by a mortgage on the property. Simultaneously with thepayment of each $550,000 annual installment discussed above, the seller agreesto release one of the remaining parcels from the mortgage.

 

In March 2003, OED entered into aparticipation agreement with a third party operator to own and operate 100video poker machines at OED’s OTB in Port Allen, Louisiana. InDecember 2003, OED obtained its license to own and operate video pokermachines. In accordance with the participation agreement, OED assumed theremaining balance of an original $663,700 promissory note payable in exchangefor ownership of the 100 video poker machines. The note bears interest at 9.5%and is payable in monthly installments of principal and interest of $31,250with the last payment due July 1, 2005. The note is collateralized by asecurity interest in the machines.

 

On July 15, 1999, DJL authorized andissued $7.0 million of preferred membership units. The holders of all ofour preferred membership interests are entitled to receive, subject to certainrestrictions contained in the indenture governing the DJL Notes, out of fundslegally available therefor, cumulative preferred distributions payablesemiannually at an annual rate of 9% of the original face amount thereof. Otherthan certain limited consent rights and as required by law, holders of ourpreferred membership interests have no voting rights.

 

DJL redeemed $3.0 million in originalface amount of its preferred membership interests on January 19, 2001 at aredemption price of $3.0 million, plus a portion of accrued and unpaiddistributions thereon of $170,000, the balance of which, in an amount equal to$145,000 plus accrued interest on such amount (the “Accrued PreferredDistribution”), was agreed to be paid by DJL at such time that such payment ispermitted to be made pursuant to our existing financing arrangements, but in noevent later than January 15, 2003. The Accrued Preferred Distributiontotaling $171,100 was paid on January 15, 2003. The balance of preferredmembership interests not redeemed by DJL must be redeemed by DJL on or prior toOctober 13, 2006 at a redemption price of $4.0 million, plus anyaccrued and

 

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unpaid preferred distributions through the date of redemption. AtDecember 31, 2003, accrued distributions related to the preferredmembership interests was approximately $1.1 million.

 

*General*

 

On March 11, 2004, we, along with OED,announced that we intend to refinance the Peninsula Notes and the OED Noteswith a proposed offering of $230 million (which subsequently has beenincreased to $233 million) of senior secured notes due 2012 (the “Notes”)and a new credit facility.  As part ofthe Note offering, we are also seeking requisite regulatory approvals to effecta series of corporate transactions (the “Corporate Transactions”), includingthe creation of a new holding company to be our and OED’s new direct parent anda co-issuer of the Notes.  In the eventregulatory approval of the Corporate Transactions is not obtained, we willstill consummate the Note offering and use the proceeds of the offering torepurchase and redeem the OED Notes and DJL Notes, respectively, and payaccrued dividends on our preferred membership interests.  In such event, however, we will not at suchtime effect the Corporate Transactions or enter into the new credit facility.

 

After the offering of the Notes, we will have thefollowing sources of funds for our business: (i) cash flows from OED’s existingracetrack operations and casino operations, (ii) cash flows from our existingcasino operations, and (iii) available borrowings under the OED Credit Facilityand the DJL Credity Facility or, our new senior credit facility, if enteredinto in connection with the refinancing of our existing senior secured creditfacilities.

 

As part of the Corporate Transactions, we and OEDintend to enter into a new senior secured credit facility in the amount of$35.0 million.  We expect ourobligations under the new senior secured credit facility will be (a) guaranteedby all of our and OED’s domestic subsidiaries, and (b) secured by a securityinterest in all of our and OED’s tangible and intangible assets and those ofour parent’s domestic subsidiaries (including, without limitation, all of theshares of the capital stock of these subsidiaries) but excluding contracts,agreements, licenses (including gaming, and liquor licenses) and other rightsthat by their express terms prohibit the assignment thereof or the grant of asecurity interest therein.

 

All of the net proceeds from the offering ofthe Notes and, if the new senior secured credity facility has been enteredinto, $15.0 million of borrowings under such new senior secured credit facilitywill be used, together with cash on hand, to consummate the above transactionsand pay related fees and expenses.  Webelieve that cash generated from operations, together with remaining amountsavailable under existing credit facilities or the new senior secured creditfacility, as applicable, will be sufficient to satisfy our working capital andcapital expenditure requirements and satisfy our current debt servicerequirements, including interest payments on the Notes.  No assurances can be given, however, thatour cash or equivalents on-hand or our ability to generate or borrow cash willbe sufficient to meet our obligations. In such event, we may have to refinance our debt, including the Notes,or sell some or all of our assets (within the restrictions contained in theindenture governing our outstanding notes) to meet our obligations.

 

**Contractual Obligations and ContingentLiabilities and Commitments**

 

Our future contractual obligations related tolong-term debt, capital leases and operating leases at December 31, 2003were as follows (in millions of dollars):

 
|                                |   | **Payments due by Period** |   |
|-------------------------------------|--------|----------------------------|--------|
| **Contractual  Obligations**        |   | **Total**                  |   | **Less Than  1 Year** |   | **1-3 Years** |   | **4-5 Years** |   | **Thereafter** |   |
| Long-Term  Debt                     |   | $                          | 231.5  |   | $ | 4.1 |   | $ | 98.3 |   | $ | 4.8 |   | $ | 124.3 |   |
| Operating  Leases                   |   | 1.2                        |   | 0.6 |   | 0.6 |   | — |   | — |   |
| Litigation  Settlement              |   | 1.2                        |   | 0.4 |   | 0.8 |   | — |   | — |   |
| Total  Contractual Cash Obligations |   | $                          | 233.9  |   | $ | 5.1 |   | $ | 99.7 |   | $ | 4.8 |   | $ | 124.3 |   |

 

The following shows our other contingentobligations at December 31, 2003 based on expiration dates (in millions):

 
|                       |   | **Less Than  1 Year** |   | **1-3 Years** |   | **4-5 Years** |   | **Thereafter** |   |
|----------------------------|--------|-----------------------|--------|---------------|--------|---------------|--------|----------------|--------|
| Standby  letters of credit |   | —                |   | $             | 3.7    |          | — |           | — |   |
|                            |        |                       |        |               |        |               |        |                |        |  |

 

14

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**Off-Balance Sheet Transactions**

 

DJL and OED do not maintain any off-balancesheet transactions, arrangements, obligations or other relationships withunconsolidated entities or others that are reasonable likely to have a materialcurrent or future effect on our or OED’s financial condition, changes infinancial condition, revenues or expenses, results of operations, liquidity,capital expenditures or capital resources.

 

**Seasonality and Inflation**

 

Our operations are subject to seasonalfluctuations. Our Iowa operations are typically weaker fromNovember through February as a result of adverse weather conditions,and are typically stronger from March through October. Our Louisianaoperations are also subject to seasonal fluctuations. Our Louisiana operationsare usually stronger during live racing season which runs fromApril through October. In general, our payroll and general andadministrative expenses are affected by inflation. Although inflation has nothad a material effect on our business to date, we could experience moresignificant effects of inflation in future periods.

 

**Recent Accounting Pronouncements**

 

In October 2001, the FASB issued SFASNo. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”.SFAS No. 144 addresses financial accounting and reporting for theimpairment or disposal of long-lived assets. This statement supersedes SFASNo. 121, “Accounting for the Impairment of Long-Lived Assets and forLong-Lived Assets to Be Disposed Of,” and the accounting and reportingprovisions of APB Opinion No. 30, “Reporting the Results ofOperations—Reporting the Effects of Disposal of a Segment of a Business, andExtraordinary, Unusual and Infrequently Occurring Events and Transactions.”This new pronouncement also amends ARB No. 51 “Consolidated FinancialsStatements,” to eliminate the exception to consolidation for a subsidiary forwhich control is likely to be temporary. SFAS No. 144 requires that oneaccounting model be used for long-lived assets to be disposed of by sale,whether previously held and used or newly acquired and also broadens thepresentation of discontinued operations to include more disposal transactions.SFAS No. 144 is effective for fiscal years beginning afterDecember 15, 2001 and interim periods within those fiscal years. Adoptionof SFAS No. 144 on January 1, 2002, did not have any impact on ourfinancial position or results of operations for the years endedDecember 31, 2003 and 2002.

 

In July 2002, the FASB issued SFASNo. 146, “Accounting for Costs Associated with Exit or DisposalActivities”. This statement addresses financial accounting and reporting forcosts associated with exit or disposal activities and nullifies the previousguidance on the subject. This statement requires, among other things, that aliability for a cost associated with an exit or disposal activity be recognizedwhen the liability is incurred. The provisions for this statement are effectivefor exit or disposal activities that are initiated after December 31,2002. The adoption of SFAS No. 146 did not have a material effect on DJLresults of operations or financial position for the year endedDecember 31, 2003.

 

In November 2002, the Financial AccountingStandards Board (FASB) issued Interpretation No. 45, Guarantor’sAccounting and Disclosure Requirements for Guarantees, Including IndirectGuarantees of Indebtedness of Others (FIN 45). FIN 45 expands the disclosurerequirements related to certain guarantees, including product warranties, andrequires DJL to recognize a liability for the fair value of all guaranteesissued or modified after December 31, 2002. FIN 45 did not impact ourfinancial position or net income.

 

In May 2003, the FASB issued StatementNo. 150, “Accounting for Certain Financial Instruments withCharacteristics of both Liabilities and Equity.” This statement establishesstandards for how an issuer classifies and measures certain financialinstruments with characteristics of both liabilities and equity. It requiresthe issuer to classify a financial instrument that is within the scope of thestandard as a liability if such financial instrument embodies an obligation ofthe issuer. As a result of the adoption of SFAS No. 150 on July 1,2003, DJL reclassified its $4 million mandatorily redeemable preferredmembers’ interest from the mezzanine section of the Condensed ConsolidatedBalance Sheet to long-term debt. Further, preferred member distributions paidor accrued subsequent to adoption of SFAS No. 150 are required to bepresented as interest expense separately from interest due to other creditors.DJL was not required to record a cumulative effect of change in an accountingprinciple as the redeemable preferred members’

 

15

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interest was recorded at fair value prior to July 1, 2003. We areprecluded from reclassifying prior period amounts pursuant to this standard.

 

In 2003, the FASB issued Interpretation (FIN)No. 46, Consolidation of Variable Interest Entities, which addresses theconsolidation and related disclosures of these entities by businessenterprises. These are entities in which either the equity investment at riskis not sufficient to absorb the probable loss without additional subordinatedfinancial support from other parties, or the investors with equity at risk lackcertain essential characteristics of a controlling interest. Under theInterpretation, DJL must consolidate any variable interest entities (VIEs) inwhich DJL holds variable interests and DJL is deemed the primary beneficiary.The effective date for the adoption of FIN 46 for interests in VIEs createdprior to February 1, 2003 was July 1, 2003 and applies immediately tovariable interest entities created after January 31, 2003, and to variableinterest entities in which DJL obtains an interest after that date. Theadoption of FIN 46 did not impact our financial position or net loss availableto common members’ interest.

 

**Critical Accounting Policies**

 

The preparation of financial statements inaccordance with accounting principles generally accepted in the United Statesof America requires management to make estimates and assumptions that affectthe reported amount of assets and liabilities and disclosure of contingentassets and liabilities at the date of the financial statements and the reportedamounts of revenues and expenses during the reporting periods. Actual resultscould differ from those estimates. We periodically evaluate our policies andthe estimates and assumptions related to such policies. We also periodicallyevaluate the carrying value of our assets in accordance with generally acceptedaccounting principles. We and our subsidiaries operate in a highly regulatedindustry and are subject to regulations that describe and regulate operatingand internal control procedures. The majority of our revenues are in the formof cash, which by its nature, does not require complex estimations. Inaddition, we made certain estimates surrounding our application of purchaseaccounting related to the acquisition and the related assignment of costs togoodwill and other intangible assets.

 

In addition, contingencies are accounted forin accordance with SFAS No. 5, “Accounting for Contingencies.” SFASNo. 5 requires that we record an estimated loss from a loss contingencywhen information available prior to issuance of our financial statementsindicates that it is probable that a liability has been incurred at the date ofthe financial statements and the amount of the loss can be reasonablyestimated. Accounting for contingencies such as legal matters requires us touse judgment. Many of these legal contingencies can take years to be resolved.Generally, as the time period increases over which the uncertainties are resolved,the likelihood of changes to the estimate of the ultimate outcome increases.However, an adverse outcome could have a material impact on our financialcondition and operating results.

 

16

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**PART IV**

 

**ITEM 15.              EXHIBITS,FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K**

 

(a)                                  The following documents are filed as a part ofthis report:

 

(1)                                Financial Statements — see Index to FinancialStatements appearing on page F-1.

 

(2)                                Exhibits:

 
| **Exhibit  Number** |   | **Description**                                                                                                                                                                                                                                                                                                                                                    |
|---------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                |   |                                                                                                                                                                                                                                                                                                                                                               |
| 3.1A                |   | Certificate of Formation of  Peninsula Gaming Company, LLC—incorporated herein by reference to Exhibit  3.1A of the Company’s Form S-4 filed October 12, 1999. (With regard to  applicable cross references in this report, the Company’s Current, Quarterly  and Annual Reports are filed with the SEC under File No. 333-88829.)                  |
|                |   |                                                                                                                                                                                                                                                                                                                                                               |
| 3.1B                |   | Amendment to Certificate of  Formation of Peninsula Gaming Company, LLC—incorporated herein by reference  to Exhibit 3.1B of the Company’s Form S-4 filed October 12, 1999.                                                                                                                                                                              |
|                |   |                                                                                                                                                                                                                                                                                                                                                               |
| 3.2                 |   | Operating Agreement of  Peninsula Gaming Company, LLC—incorporated herein by reference to Exhibit 3.2  of the Company’s Form S-4 filed October 12, 1999.                                                                                                                                                                                                 |
|                |   |                                                                                                                                                                                                                                                                                                                                                               |
| 3.3                 |   | Articles of Incorporation  of Peninsula Gaming Corp.— incorporated herein by reference to Exhibit 3.3 of  the Company’s Form**S-4 filed  October 12, 1999.                                                                                                                                                                                               |
|                |   |                                                                                                                                                                                                                                                                                                                                                               |
| 3.4                 |   | By-laws of Peninsula Gaming  Corp.—incorporated herein by reference to Exhibit 3.4 of the Company’s Form  S-4 filed October 12, 1999.                                                                                                                                                                                                                    |
|                |   |                                                                                                                                                                                                                                                                                                                                                               |
| 4.1                 |   | Specimen Certificate of  Common Stock of Peninsula Gaming Corp. —incorporated herein by reference to  Exhibit 4.1 of the Company’s Form S-4 filed October 12, 1999.                                                                                                                                                                                      |
|                |   |                                                                                                                                                                                                                                                                                                                                                               |
| 4.2A                |   | Indenture, dated July 15,  1999, by and among Peninsula Gaming Company, LLC, Peninsula Gaming Corp. and  Firstar Bank of Minnesota, N.A., as trustee—incorporated herein by reference  to Exhibit 4.2 of the Company’s Form S-4 filed October 12, 1999.                                                                                                  |
|                |   |                                                                                                                                                                                                                                                                                                                                                               |
| 4.2B                |   | First Supplemental  Indenture, dated January 15, 2002, by and among Peninsula Gaming Company, LLC  and Peninsula Gaming Corp., as Issuers, the Subsidiary Guarantors referred to  therein and U.S. Bank National Association, as trustee—incorporated herein by  reference to Exhibit 4.3 of the Company’s Form 8-K Current Report filed March  4, 2002. |
|                |   |                                                                                                                                                                                                                                                                                                                                                               |
| 10.1                |   | Employment Agreement, dated  April 1, 2000, by and among Natalie Schramm and Peninsula Gaming Company,  LLC—incorporated herein by reference to Exhibit 10.1 of the Company’s Form  10-K Annual Report for the year ended December 31, 2002.                                                                                                             |
|                |   |                                                                                                                                                                                                                                                                                                                                                               |
| 10.2                |   | Indemnification Agreement,  dated June 7, 1999, by and among Natalie Schramm and AB Capital, L.L.C. and  Peninsula Gaming Company, LLC—incorporated herein by reference to Exhibit  10.2 of the Company’s Form S-4 filed October 12, 1999.                                                                                                               |
|                |   |                                                                                                                                                                                                                                                                                                                                                               |
| 10.3A               |   | Operating Agreement, dated  February 22, 1993, by and among Dubuque Racing Association, Ltd. and Greater  Dubuque Riverboat Entertainment Company, L.C. —incorporated herein by  reference to                                                                                                                                                                 |

 

17

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| **Exhibit  Number** |   | **Description**                                                                                                                                                                                                                                                                              |
|---------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                |   |                                                                                                                                                                                                                                                                                         |
|                |   | Exhibit 10.9A of the Company’s  Form S-4 filed October 12, 1999.                                                                                                                                                                                                                        |
|                |   |                                                                                                                                                                                                                                                                                         |
| 10.3B               |   | Amendment to Operating  Agreement, dated February 22, 1993, by and among Dubuque Racing Association,  Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C. —incorporated  herein by reference to Exhibit 10.9B of the Company’s Form S-4 filed October  12, 1999.        |
|                |   |                                                                                                                                                                                                                                                                                         |
| 10.3C               |   | Amendment to Operating  Agreement, dated March 4, 1993, by and among Dubuque Racing Association, Ltd.  and Greater Dubuque Riverboat Entertainment Company, L.C. —incorporated  herein by reference to Exhibit 10.9C of the Company’s Form S-4 filed October  12, 1999.            |
|                |   |                                                                                                                                                                                                                                                                                         |
| 10.3D               |   | Third Amendment to  Operating Agreement, dated March 11, 1993, by and among Dubuque Racing  Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C. —incorporated  herein by reference to Exhibit 10.9D of the Company’s Form S-4 filed October  12, 1999.     |
|                |   |                                                                                                                                                                                                                                                                                         |
| 10.3E               |   | Fourth Amendment to  Operating Agreement, dated March 11, 1993, by and among Dubuque Racing  Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C.  —incorporated herein by reference to Exhibit 10.9E of the Company’s Form S-4  filed October 12, 1999.    |
|                |   |                                                                                                                                                                                                                                                                                         |
| 10.3F               |   | Fifth Amendment to  Operating Agreement, dated April 9, 1993, by and among Dubuque Racing  Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C.  —incorporated herein by reference to Exhibit 10.9F of the Company’s Form S-4  filed October 12, 1999.      |
|                |   |                                                                                                                                                                                                                                                                                         |
| 10.3G               |   | Sixth Amendment to  Operating Agreement, dated November 29, 1993, by and among Dubuque Racing  Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C. —  incorporated herein by reference to Exhibit 10.9G of the Company’s Form S-4  filed October 12, 1999. |
|                |   |                                                                                                                                                                                                                                                                                         |
| 10.3H               |   | Seventh Amendment to  Operating Agreement, dated April 6, 1994, by and among Dubuque Racing  Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C.  —incorporated herein by reference to Exhibit 10.9H of the Company’s Form S-4  filed October 12, 1999.    |
|                |   |                                                                                                                                                                                                                                                                                         |
| 10.3I               |   | Eighth Amendment to  Operating Agreement, dated April 29, 1994, by and among Dubuque Racing  Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C.  —incorporated herein by reference to Exhibit 10.91 of the Company’s Form S-4  filed October 12, 1999.    |
|                |   |                                                                                                                                                                                                                                                                                         |
| 10.3J               |   | Ninth Amendment to Operating  Agreement, dated July 11, 1995, by and among Dubuque Racing Association, Ltd.  and Greater Dubuque Riverboat Entertainment Company, L.C. —incorporated  herein by reference to Exhibit 10.9J of the Company’s Form S-4 filed October  12, 1999.      |
|                |   |                                                                                                                                                                                                                                                                                         |
| 10.3K               |   | Tenth Amendment to  Operating Agreement, dated July 15, 1999, by and among Dubuque Racing  Association, Ltd. and Greater Dubuque Riverboat Entertainment Company, L.C.  —incorporated herein by reference to Exhibit 10.9K of the Company’s Form S-4  filed October 12, 1999.      |
|                |   |                                                                                                                                                                                                                                                                                         |
| 10.4                |   | Operating Agreement  Assignment, dated July 15, 1999, by and among Greater Dubuque Riverboat  Entertainment Company, L.C. and Peninsula Gaming Company, LLC—incorporated  herein by reference to Exhibit 10.10 of the Company’s Form S-4 filed October  12, 1999.                  |
|                |   |                                                                                                                                                                                                                                                                                         |
| 10.5                |   | First Preferred Ship  Mortgage, dated July 15, 1999, by Peninsula Gaming Company, LLC in favor of  Firstar Bank of Minnesota, N.A., as trustee—incorporated herein by reference  to Exhibit 10.11 of the Company’s Form S-4 filed October 12, 1999.                                |

 

18

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| **Exhibit  Number** |   | **Description**                                                                                                                                                                                                                                                                                                                       |
|---------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                |   |                                                                                                                                                                                                                                                                                                                                  |
| 10.6                |   | Mortgage, Leasehold  Mortgage, Assignment of Rents, Security Agreement and Fixture Financing  Statement dated July 15, 1999, by Peninsula Gaming Company, LLC in favor of  Firstar Bank of Minnesota, N.A., as trustee—incorporated herein by reference  to Exhibit 10.12 of the Company’s Form S-4 filed October 12, 1999. |
|                |   |                                                                                                                                                                                                                                                                                                                                  |
| 10.7                |   | Ice Harbor Parking  Agreement Assignment, dated July 15, 1999, by and among Greater Dubuque  Riverboat Entertainment Company, L.C. and Peninsula Gaming Company,  LLC—incorporated herein by reference to Exhibit 10.13 of the Company’s Form  S-4 filed October 12, 1999.                                                  |
|                |   |                                                                                                                                                                                                                                                                                                                                  |
| 10.8                |   | First Amendment to Sublease  Agreement, dated July 15,1999, by and among Dubuque Racing Association, Ltd.  and Greater Dubuque Riverboat Entertainment Company, L.C. —incorporated  herein by reference to Exhibit 10.14 of the Company’s Form S-4 filed October  12, 1999.                                                 |
|                |   |                                                                                                                                                                                                                                                                                                                                  |
| 10.9                |   | Sublease Assignment, dated  July 15, 1999, by and among Greater Dubuque Entertainment Company, L.C. and  Peninsula Gaming Company, LLC—incorporated herein by reference to Exhibit  10.15 of the Company’s Form S-4 filed October 12, 1999.                                                                                 |
|                |   |                                                                                                                                                                                                                                                                                                                                  |
| 10.10               |   | Iowa Racing and Gaming  Commission Gaming License, dated July 15, 1999—incorporated herein by  reference to Exhibit 10.16 of the Company’s Form S-4 filed October 12, 1999.                                                                                                                                                 |
|                |   |                                                                                                                                                                                                                                                                                                                                  |
| 10.11               |   | Assignment of Iowa IGT  Declaration and Agreement of Trust, dated July 15, 1999 by and among Greater  Dubuque Riverboat Entertainment Company, L.C. and Peninsula Gaming Company,  LLC—incorporated herein by reference to Exhibit 10.17 of the Company’s Form  S-4 filed October 12, 1999.                                 |
|                |   |                                                                                                                                                                                                                                                                                                                                  |
| 10.12               |   | Agreement of Sale, dated  August 30, 2002, by and among Peninsula Gaming Partners, LLC, OED Acquisition,  LLC, William E. Trotter II and William E. Trotter II Family, LLC—incorporated  herein by reference to Exhibit 10.3 of the Company’s Form 10-Q Quarterly  Report for the quarter ended September 30, 2002.         |
|                |   |                                                                                                                                                                                                                                                                                                                                  |
| 10.13A              |   | Loan and Security  Agreement, dated February 23, 2001, by and between Foothill Capital  Corporation and Peninsula Gaming Company, LLC—incorporated herein by  reference to Exhibit 10.13 of the Company’s Form 10-K Annual Report for the  year ended December 31, 2002.                                                    |
|                |   |                                                                                                                                                                                                                                                                                                                                  |
| 10.13B              |   | Amendment Number One to  Loan and Security Agreement, dated February 15, 2002, by and between Foothill  Capital Corporation and Peninsula Gaming Company, LLC—incorporated herein by  reference to Exhibit 10.1 of the Company’s Form 10-Q Quarterly Report for the  quarter ended September 30, 2002.                      |
|                |   |                                                                                                                                                                                                                                                                                                                                  |
| 10.13C              |   | Amendment Number Two to  Loan and Security Agreement, dated October 16, 2002, by and between Foothill  Capital Corporation and Peninsula Gaming Company, LLC—incorporated herein by  reference to Exhibit 10.2 of the Company’s Form 10-Q Quarterly Report for the  quarter ended September 30, 2002.                       |
|                |   |                                                                                                                                                                                                                                                                                                                                  |
| 10.13D              |   | Amendment Number Three to  Loan and Security Agreement, dated February 14, 2003, by and between Foothill  Capital Corporation and Peninsula Gaming Company, LLC—incorporated herein by  reference to Exhibit 10.14 of the Company’s Form 10-Q Quarterly Report for  the quarter ended September 30, 2003.                   |
|                |   |                                                                                                                                                                                                                                                                                                                                  |
| 10.13E              |   | Amendment Number Four to  Loan and Security Agreement dated November 6, 2003, by and between Peninsula  Gaming Company, LLC and Wells Fargo Foothill, Inc.—incorporated herein by  reference to Exhibit 10.19 of the Company’s Form 10-Q Quarterly Report for  the quarter ended September 30, 2003.                        |

 

19

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| **Exhibit  Number** |   | **Description**                                                                                                                                                                                                                                                                                                                                                               |
|---------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                |   |                                                                                                                                                                                                                                                                                                                                                                          |
| 10.14               |   | Purchase Agreement, dated  June 27, 2002, by and among Peninsula Gaming Partners, LLC, a Delaware  limited liability company, The Old Evangeline Downs, L.C., a Louisiana  limited company and BIM3 Investments, a Louisiana partnership—incorporated  herein by reference to Exhibit 1.1 of the Company’s Form 8-K Current Report  filed March 4, 2002.            |
|                |   |                                                                                                                                                                                                                                                                                                                                                                          |
| 10.15               |   | First Amendment to Purchase  Agreement, dated January 1, 2002, by and among BIM3 Investments, a Louisiana  partnership, The Old Evangeline Downs, L.C., a Louisiana limited company and  OED Acquisition, LLC, a Delaware limited liability company—incorporated  herein by reference to Exhibit 1.3 of the Company’s Form 8-K Current Report  filed March 4, 2002. |
|                |   |                                                                                                                                                                                                                                                                                                                                                                          |
| 10.16               |   | Assignment Agreement, dated  October 23, 2001, by and between Peninsula Gaming Partners and OED  Acquisition, LLC—incorporated herein by reference to Exhibit 1.2 of the  Company’s Form 8-K Current Report filed March 4, 2002.                                                                                                                                    |
|                |   |                                                                                                                                                                                                                                                                                                                                                                          |
| 10.17               |   | Amended and Restated  Management Services Agreement, dated as of February 25, 2003, by and among  The Old Evangeline Downs, L.L.C., OED Acquisition, LLC and Peninsula Gaming  Company, LLC—incorporated herein by reference to Exhibit 10.15 of the  Company’s Form 10-Q Quarterly Report for the quarter ended September 30,  2003.                               |
|                |   |                                                                                                                                                                                                                                                                                                                                                                          |
| 10.18A              |   | Loan and Security  Agreement, dated June 24, 2003, by and among The Old Evangeline Downs,  L.L.C., The Old Evangeline Downs Capital Corp., and Wells Fargo Foothill,  Inc.—incorporated herein by reference to Exhibit 10.16 of the Company’s Form  10-Q Quarterly Report for the quarter ended September 30, 2003.                                                 |
|                |   |                                                                                                                                                                                                                                                                                                                                                                          |
| 10.18B              |   | First Amendment, dated  September 22, 2003, to Loan and Security Agreement, dated June 24, 2003, by  and among The Old Evangeline Downs, L.L.C., The Old Evangeline Downs Capital  Corp., and Wells Fargo Foothill, Inc.—incorporated herein by reference to  Exhibit 10.18 of the Company’s Form 10-Q Quarterly Report for the quarter  ended September 30, 2003.  |
|                |   |                                                                                                                                                                                                                                                                                                                                                                          |
| 10.19               |   | Loan and Security  Agreement, dated September 22, 2003, by and among The Old Evangeline Downs,  L.L.C., The Old Evangeline Downs Capital Corp., and Wells Fargo Foothill,  Inc. — incorporated herein by reference to Exhibit 10.17 of the Company’s  Form 10-Q Quarterly Report for the quarter ended September 30, 2003.                                          |
|                |   |                                                                                                                                                                                                                                                                                                                                                                          |
| 12.1                |   | Computation of ratio of  earnings to fixed charges.                                                                                                                                                                                                                                                                                                                           |
|                |   |                                                                                                                                                                                                                                                                                                                                                                          |
| 14.1                |   | Code of Ethics of Chief  Executive Officer and Senior Financial Officers of Peninsula Gaming Company,  LLC—incorporated herein by reference to Exhibit 14.1 of the Company’s Form  10-K Annual Report for the year ended December 31, 2002.                                                                                                                         |
|                |   |                                                                                                                                                                                                                                                                                                                                                                          |
| 21.1                |   | Subsidiaries of the  Registrant.                                                                                                                                                                                                                                                                                                                                              |
|                |   |                                                                                                                                                                                                                                                                                                                                                                          |
| 31.1                |   | Certification of M. Brent  Stevens, Chief Executive Officer, pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002 and Rule 15d-l4 of the Securities Exchange Act, as  amended.                                                                                                                                                                                          |
|                |   |                                                                                                                                                                                                                                                                                                                                                                          |
| 31.2                |   | Certification of Natalie A.  Schramm, Chief Financial Officer, pursuant to Section 302 of the  Sarbanes-Oxley Act of 2002 and Rule 15d-14 of the Securities Exchange Act, as  amended.                                                                                                                                                                                        |

 

20

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(b)           Reports on Form 8-K.

 

None.

 

21

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**SIGNATURES**

 

Pursuant to the requirements of Section 13 or15(d) of the Securities Exchange Act of 1934, the Company has duly caused thisreport to be signed on its behalf by the undersigned, thereunto dulyauthorized, in the City of Dubuque, State of Iowa on April 1, 2004.

 
|   | DIAMOND JO, LLC (FORMERLY KNOWN AS  PENINSULA GAMING COMPANY, LLC) |                       |
|--------|--------------------------------------------------------------------|----------------------------|
|   |                                                               |
|   | By:                                                                | /s/  M. Brent Stevens      |   |
|   |                                                               | M.  Brent Stevens          |
|   |                                                               | *Chief  Executive Officer* |
|   |                                                               |                       |
|   | By:                                                                | /s/  Natalie A. Schramm    |   |
|   |                                                               | Natalie  A. Schramm        |
|   |                                                               | *Chief  Financial Officer* |
|   |                                                               |
|   | PENINSULA GAMING CORP.                                             |
|   |                                                               |
|   | By:                                                                | /s/  M. Brent Stevens      |   |
|   |                                                               | M.  Brent Stevens          |
|   |                                                               | *President  and Treasurer* |
|   |                                                               |
|   | By:                                                                | /s/  Michael S. Luzich     |   |
|   |                                                               | Michael  S. Luzich         |
|   |                                                               | *Vice  President*          |
|        |                                                                    |                            |  |  |

 

**Pursuant to the requirements of theSecurities Exchange Act of 1934, this report has been signed below by thefollowing persons in the capacities and on the dates indicated.**

 
|                 | PENINSULA GAMING PARTNERS, LLC                                                           |
|----------------------|------------------------------------------------------------------------------------------|
|                 | *Managing  Member of Diamond Jo, LLC (formerly known as  Peninsula Gaming Company, LLC)* |
|                 |                                                                                     |
| Date:  April 1, 2004 | By:                                                                                      | /s/  M. Brent Stevens |   |
|                 |                                                                                     | M.  Brent Stevens |
|                 |                                                                                     | *Chief  Executive Officer and Manager* |
|                 |                                                                                     |   |
| Date:  April 1, 2004 | By:                                                                                      | /s/  Michael S. Luzich |   |
|                 |                                                                                     | Michael  S. Luzich |
|                 |                                                                                     | *President,  Secretary and Manager* |
|                 |                                                                                     |   |
| Date:  April 1, 2004 | By:                                                                                      | /s/  Terrance W. Oliver |   |
|                 |                                                                                     | Terrance  W. Oliver |
|                 |                                                                                     | *Manager  of Peninsula Gaming Partners* |
|                 |                                                                                     |   |
| Date:  April 1, 2004 | By:                                                                                      | /s/  Andrew R. Whittaker |   |
|                 |                                                                                     | Andrew  R. Whittaker |
|                 |                                                                                     | *Manager of Peninsula Gaming Partners* |

 

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