Three Months Ended Year-over-Year
March 31, Change
$000’s, except percentages
and per share amounts 2018 2017
Revenue 392,891 317,320 23.8%
Net earnings 74,361 65,753 13.1%
Diluted net earnings
per common share $ 0.36 $ 0.33 9.1%
Adjusted EBITDA 175,022 151,001 15.9%
Adjusted Net Earnings 139,207 113,367 22.8%
Adjusted Net Earnings
per Diluted Share $ 0.66 $ 0.56 17.9%
Net cash inflows from
operating activities 132,069 95,547 38.2%
Adjusted Cash Flow from
Operations 132,258 111,776 18.3%
Three Months Ended March 31,
$000’s, except per share
amounts 2018 2017
Net earnings 74,361 65,753
Financial expenses 45,015 40,589
Income taxes expense 1,155 2,688
Depreciation of property and
equipment 2,744 2,161
Amortization of intangible
and deferred development costs 36,514 33,574
EBITDA 159,789 144,765
Stock-based compensation 2,383 2,164
Termination of employment agreements 672 2,126
Termination of affiliate agreements – 407
Loss on disposal of assets – 59
Gain from investments (1,023) (435)
Acquisition-related costs 7,739 –
Impairment of (reversal of
impairment of) intangible assets
and assets held for sale 115 (6,684)
Other costs (see table below) 5, 347 8,599
Adjusted EBITDA 175,022 151,001
Current income tax expense (2,420) (3,322)
Depreciation and amortization
(excluding amortization of purchase
price allocation intangibles) (7,096) (4,660)
Interest * (26,299) (29,652)
Adjusted Net Earnings 139,207 113,367
Diluted Shares 209,495,673 200,656,549
Adjusted Net Earnings per
Diluted Share 0.66 0.56
Three Months Ended March 31,
2018 2017
$000’s $000’s
Non-U.S. lobbying and legal expenses 1,138 741
U.S. lobbying and legal expenses 1,855 3,978
Strategic review professional fees – 125
Retention bonuses 117 615
Non-recurring professional fees 451 662
AMF and other investigation professional
fees (net of insurance proceeds) 1,784 2,390
Office restructuring and legacy business
unit shutdown costs 2 88
Other costs 5,347 8,599
Three Months Ended March 31,
2018 2017
$000’s $000’s
Net cash inflows from operating
activities 132,069 95,547
Customer deposit liability movement 189 16,229
Adjusted Cash Flow from Operations 132,258 111,776
Three Months Ended March 31,
2018 2017
$000’s $000’s
Revenue 392,891 317,320
Corporate revenue (294) (22)
Other gaming revenue (12,209) (11,854)
Real-money online poker revenue and real-money
online casino
and sportsbook combined revenue (including
CrownBet revenue) 380,388 305,444
CrownBet revenue 11,124 –
Real-money online poker revenue and
and real-money online casino
and sportsbook combined revenue
(excluding CrownBet revenue) 369,264 305,444
Three Months Ended March 31,
2018 2017
$000’s $000’s
U.S. dollars (except per share amounts) (except per share amounts)
Revenues 392,891 317,320
Expenses
Selling 61,297 43,051
General and administrative 161,395 131,141
Financial 45,015 40,589
Gaming duty 42,952 34,533
Acquisition-related costs 7,739 –
Total expenses 318,398 249,314
Gain from investments 1,023 435
Net earnings before income taxes 75,516 68,441
Income taxes 1,155 2,688
Net earnings 74,361 65,753
Net earnings (loss) attributable
to Shareholders of The Stars
Group Inc. 75,451 65,411
Non-controlling interest (1,090) 342
Net earnings 74,361 65,753
Basic earnings per
Common Share $ 0.51 $ 0.45
Diluted earnings per
Common Share $ 0.36 $ 0.33
As at March 31, As at December 31,
2018 2017
U.S. dollars $000’s $000’s
ASSETS
Current assets
Cash and cash equivalents – operational 256,647 283,225
Cash and cash equivalents –
customer deposits 255,939 227,098
Total cash and cash equivalents 512,586 510,323
Restricted cash advances and collateral 5,962 7,862
Current investments – customer deposits 109,650 122,668
Accounts receivable 103,924 100,409
Inventories 245 302
Prepaid expenses and deposits 30,214 29,393
Income tax receivable 17,038 16,540
Derivatives 3,706 2,037
Total current assets 783,325 789,534
Non-current assets
Restricted cash advances and collateral 50,215 45,834
Prepaid expenses and deposits 16,929 16,514
Long-term accounts receivable 13,243 11,818
Long-term investments 9,298 6,981
Property and equipment 52,647 44,837
Investment tax credits receivable 3,881 3,056
Income tax receivable 17,411 14,061
Deferred income taxes 5,278 5,141
Goodwill and intangible assets 4,611,579 4,477,350
Total non-current assets 4,780,481 4,625,592
Total assets 5,563,806 5,415,126
LIABILITIES
Current liabilities
Accounts payable and accrued
liabilities 170,553 151,473
Other payables 52,688 42,714
Provisions 17,709 17,590
Customer deposits 364,587 349,766
Income tax payable 43,220 35,941
Current maturity of long-term debt 24,274 4,990
Derivatives 7,452 –
Total current liabilities 680,483 602,474
Non-current liabilities
Long-term accounts payable and accrued
liabilities 2,646 –
Long-term debt 2,316,023 2,353,579
Provisions 3,140 3,093
Derivatives 130,149 111,762
Income tax payable 20,518 24,277
Deferred income taxes 29,366 16,510
Total non-current liabilities 2,501,842 2,509,221
Total liabilities 3,182,325 3,111,695
EQUITY
Share capital 1,895,788 1,884,219
Reserves (182,839) (142,340)
Retained earnings 667,755 561,519
Equity attributable to the Shareholders
of The Stars Group Inc. 2,380,704 2,303,398
Non-controlling interest 777 33
Total equity 2,381,481 2,303,431
Total liabilities and equity 5,563,806 5,415,126
Three Months Ended March 31,
2018 2017
$000’s $000’s
U.S. dollars
Operating activities
Net earnings 74,361 65,753
Dormant accounts recognized as income (1,866) (886)
Stock-based compensation 2,383 2,164
Interest accretion 12,485 8,978
Interest expense 25,130 33,683
Income tax expense recognized in net earnings 1,155 2,688
Depreciation of property and equiptment 2,744 2,161
Amortization of intangible assets 32,462 31,697
Amortization of deferred development costs 4,052 1,877
Unrealized gain on foreign exchange (4,425) (2,099)
Unrealized gain on investments (1,033) (226)
Impairment of (reversal of impairment
of) intangible assets and assets held for sale 115 (6,684)
Realized loss (gain) on current investments,
promissory note and other 437 (2,122)
Income taxes paid (1,370) (1,128)
Changes in non-cash operating elements of
working capital (13,308) (24,139)
Customer deposit liability movement (189) (16,229)
Other (1,064) 59
Net cash inflows from operating activities 132,069 95,547
Financing activities
Issuance of common shares in relation to
exercised employee stock options 9,737 1,710
Settlement of brokerage margin account – (7,602)
Payment of deferred consideration – (75,000)
Repayment of long-term debt (6,068) (6,888)
Transaction costs on repricing of
long-term debt – (4,719)
Interest paid (31,488) (34,047)
Gain on settlement of derivative – 13,904
Net cash outflows from financing activities (27,819) (112,642)
Investing activities
Acquisition of subsidiaries, net of
cash acquired (101,703) –
Additions in deferred development costs (6,431) (4,413)
Purchase of property and equiptment (3,585) (856)
Acquired intangible assets (2,427) (707)
Sale of investments – 149
Cash movement from (into) restricted cash
advances and collateral 1,126 (546)
Settlement of minimum revenue guarantee (2,713) (1,707)
Net sale of investments utilizing
customer deposits 12,447 5,169
Other (551) (4)
Net cash outflows from investing activities (103,837) (2,915)
Increase (decrease) in cash and cash equivalents 413 (20,010)
Cash and cash equivalents – beginning of period 510,323 267,684
Unrealized foreign exchange difference on
cash and cash equivalents 1,850 (265)
Cash and cash equivalents – end of period 512,586 247,409
