THIS REPORT HAS NOT BEEN, NOR WILL IT BE, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THIS REPORT, AND THE INFORMATION CONTAINED HEREIN, IS REQUIRED TO BE PROVIDED PURSUANT TO CONTRACTUAL OBLIGATIONS OF PENINSULA GAMING, LLC AND PENINSULA GAMING CORP. FORM 10-Q ____________________________________________________ Quarterly report for the period ended March 31, 2016 ____________________________________________________ (Exact name of registrant as specified in its charter) ____________________________________________________ Peninsula Gaming, LLC Peninsula Gaming Corp. (Exact name of registrants as (Exact name of registrants as specified in their charter) specified in their charter) Delaware Delaware (State or other jurisdiction of (State or other jurisdiction of incorporation or organization) incorporation or organization) 20-0800583 25-1902805 (I.R.S. Employer (I.R.S. Employer Identification No.) Identification No.) 600 Star Brewery Dr., Suite 110, Dubuque, Iowa 52001 (Address of principal executive offices) (Zip Code) (563) 690-4975 (Registrant's telephone number, including area code) All of the common equity interests of Peninsula Gaming, LLC (the "Company") are held by Boyd Acquisition II, LLC ("HoldCo"), which is a wholly owned indirect subsidiary of Boyd Gaming Corporation ("Parent"). All of the common equity interests of Diamond Jo, LLC, The Old Evangeline Downs, L.L.C., Diamond Jo Worth, LLC, Belle of Orleans, L.L.C., Kansas Star Casino, LLC and Peninsula Gaming Corp. are held by the Company. PENINSULA GAMING, LLC QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 2016 TABLE OF CONTENTS Page PART 1. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) 1 Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015 1 Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2016 and 2015 2 Condensed Consolidated Statement of Changes in Member's Equity for the three months ended March 31, 2016 3 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2016 and 2015 4 Notes to Condensed Consolidated Financial Statements 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 15 Item 3. Quantitative and Qualitative Disclosures About Market Risk 24 Item 4. Controls and Procedures 24 PART II. OTHER INFORMATION Item 1. Legal Proceedings 25 Item 1A. Risk Factors 25 Item 6. Exhibits 26 Signatures 27 PART I. Financial Information Item 1. Financial Statements (Unaudited) PENINSULA GAMING, LLC AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) March 31, December 31, (Unaudited) 2016 2015 ASSETS Current assets Cash and cash equivalents $ 27,195 $ 29,561 Restricted cash 7,457 3,626 Accounts receivable, net 2,733 2,276 Inventories 2,174 1,856 Prepaid expenses and other current assets 4,166 5,458 Total current assets 43,725 42,777 Property and equipment, net 368,065 375,252 Other assets, net 4,190 4,344 Intangible assets, net 455,736 459,455 Goodwill 471,735 471,735 Investment available for sale 17,984 17,429 Total assets $ 1,361,435 $ 1,370,992 LIABILITIES AND MEMBER’S EQUITY Current liabilities Current maturities of long-term debt $ 6,188 $ 8,250 Accounts payable 9,465 10,486 Accrued liabilities 39,485 41,920 Payable to affiliates 1,827 1,643 Total current liabilities 56,965 62,299 Long-term debt, net of current maturities and debt issuance costs 969,425 984,000 Deferred income taxes 48,638 43,033 Obligation under assessment arrangements 23,759 24,062 Other liabilities 4,707 4,797 Commitments and contingencies (Note 7) Member's equity Common member’s interest 305,140 305,140 Accumulated deficit (47,406) (52,024) Accumulated other comprehensive income (loss) 207 (315) Total member's equity 257,941 252,801 Total liabilities and member's equity $ 1,361,435 $ 1,370,992 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 1 PENINSULA GAMING, LLC AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Three Months Ended (In thousands) March 31, (Unaudited) 2016 2015 Revenues Gaming $ 117,245 $ 117,043 Food and beverage 9,525 9,979 Other 4,363 3,905 Gross revenues 131,133 130,927 Less promotional allowances 4,943 5,018 Net revenues 126,190 125,909 Operating costs and expenses Gaming 53,801 54,280 Food and beverage 6,370 6,369 Other 2,270 2,382 Selling, general and administrative 13,548 13,256 Maintenance and utilities 3,089 3,259 Depreciation and amortization 13,583 16,988 Corporate expense 409 405 Affiliate management fees 4,878 4,828 Project development, preopening and writedowns 151 128 Other operating items, net — 46 Total operating costs and expenses 98,099 101,941 Operating income 28,091 23,968 Other expense (income) Interest income (462) (467) Interest expense 17,811 18,670 Loss on early extinguishments of debt 427 508 Loss from equity affiliate 92 161 Total other expense, net 17,868 18,872 Income before income taxes 10,223 5,096 Income taxes provision (5,605) (4,498) Net income 4,618 598 Other comprehensive income, net of tax Unrealized gain on investment available for sale, net of tax 522 270 Comprehensive income $ 5,140 $ 868 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 2 PENINSULA GAMING, LLC AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN MEMBER'S EQUITY Accumulated Common Other Total (In thousands) Member's Accumulated Comprehensive Member's (Unaudited) Interest Deficit Loss Equity Balances, January 1, 2016 $ 305,140 $ (52,024) $ (315) $ 252,801 Net income — 4,618 — 4,618 Unrealized gain on investment available for sale, net of tax — — 522 522 Balances, March 31, 2016 $ 305,140 $ (47,406) $ 207 $ 257,941 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 PENINSULA GAMING, LLC AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended (In thousands) March 31, (Unaudited) 2016 2015 Cash Flows from Operating Activities Net income $ 4,618 $ 598 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 13,583 16,988 Amortization of debt issuance costs 2,461 2,527 Loss on early extinguishments of debt 427 508 Share-based compensation expense 130 97 Deferred income taxes 5,605 4,498 Other operating activities 211 255 Changes in operating assets and liabilities: Restricted cash (3,831) (4,041) Accounts receivable, net (457) (2,342) Inventories (318) 216 Prepaid expenses and other current assets 1,292 583 Other assets, net 56 (175) Accounts payable and accrued liabilities (2,037) (2,280) Other liabilities (393) (364) Payables to affiliates 20 4,796 Net cash provided by operating activities 21,367 21,864 Cash Flows from Investing Activities Capital expenditures (4,213) (7,077) Other investing activities 5 164 Net cash used in investing activities (4,208) (6,913) Cash Flows from Financing Activities Borrowings under bank credit facility 95,200 91,400 Payments under bank credit facility (114,725) (108,625) Payments under notes payable — (2) Net cash used in financing activities (19,525) (17,227) Change in cash and cash equivalents (2,366) (2,276) Cash and cash equivalents, beginning of period 29,561 29,926 Cash and cash equivalents, end of period $ 27,195 $ 27,650 Supplemental Disclosure of Cash Flow Information Cash paid for interest $ 22,002 $ 22,993 Supplemental Schedule of Non-cash Investing and Financing Activities Payables incurred for capital expenditures $ 2,988 $ 4,396 Increase in fair value of investment available for sale 522 270 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 PENINSULA GAMING, LLC AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS as of March 31, 2016 and December 31, 2015 and for the three months ended March 31, 2016 and 2015 NOTE 1. ORGANIZATION AND BASIS OF PRESENTATION Organization Peninsula Gaming, LLC, a Delaware limited liability company ("Peninsula Gaming," and together with its subsidiaries, the "Company," "we" or "us"), is a casino entertainment holding company with gaming operations in local markets in Iowa, Kansas and Louisiana. Peninsula Gaming’s wholly owned subsidiaries consist of: • Diamond Jo, LLC, a Delaware limited liability company ("Diamond Jo Dubuque"), which owns and operates the Diamond Jo Casino in Dubuque, Iowa; • Diamond Jo Worth, LLC, a Delaware limited liability company ("Diamond Jo Worth"), which owns and operates the Diamond Jo Casino in Northwood, Iowa; • Kansas Star Casino, LLC, a Kansas limited liability company ("Kansas Star"), which owns the assets of the Kansas Star Casino in Mulvane, Kansas (excluding lottery gaming equipment, which is owned by the State of Kansas) and manages the lottery gaming operations on behalf of the State of Kansas; • The Old Evangeline Downs, L.L.C., a Louisiana limited liability company ("Evangeline Downs"), which owns and operates the Evangeline Downs Racetrack and Casino, or racino, in Opelousas, Louisiana and three off-track betting parlors in Louisiana; • Belle of Orleans, L.L.C., a Louisiana limited liability company ("Amelia Belle"), which owns and operates the Amelia Belle Casino in Amelia, Louisiana; and • Peninsula Gaming Corp., a Delaware corporation, with no assets or operations. The Company is an indirect, wholly owned subsidiary of Boyd Gaming Corporation ("Boyd"). Boyd is headquartered in Las