Thunderbird Resorts Inc.
FRANKFURT : 4TR
EURONEXT : TBIRD

Thunderbird Resorts Inc.

April 23, 2015 20:36 ET

Thunderbird Resorts 2014 Annual Report Filed

PANAMA, REPUBLIC OF PANAMA--(Marketwired - April 23, 2015) - Thunderbird Resorts Inc. ("Thunderbird") (EURONEXT:TBIRD)(FRANKFURT:4TR) is pleased to announce that its 2014 Annual Report and Audited Consolidated Financial Statements have been filed with the Euronext ("Euronext Amsterdam") and the Netherlands Authority for Financial Markets ("AFM"). As a Designated Foreign Issuer with respect to Canadian securities regulations, the Annual Report is intended to comply with the rules and regulations set forth by the AFM and the Euronext Amsterdam.

Copies of the Annual Report in the English language will be available at no cost at the Group's website at www.thunderbirdresorts.com. Copies in the English language are available at no cost at the Group's operational office in Panama and at the offices of our local paying agent ING Commercial Banking, Paying Agency Services, Location Code TRC 01.013, Foppingadreef 7, 1102 BD Amsterdam, the Netherlands (tel: +31 20 563 6619, fax: +31 20 563 6959, email: iss.pas@ing.nl). Copies are also available on SEDAR at www.SEDAR.com.

Below are certain material excerpts from the full 2014 Annual Report the entirety of which can be found on our website at www.thunderbirdresorts.com.

LETTER FROM CEO

Over the past two years, both in practice and as expressed in my CEO Letter to Shareholders, we have steadfastly focused on building a profitable company through the following three areas of work:

  1. Development in our existing markets where new revenues should most efficiently grow our bottom line by leveraging existing management overhead.
  2. Continue efforts to control and reduce country-level and corporate expenses.
  3. Continue efforts to reduce debt and to refinance remaining debt under more favorable terms.

As described below and in this 2014 Annual Report, we have made progress in all three areas. At the same time, certain challenges have made it difficult to achieve the level of progress we have strived for. Below, please see our progress on these three areas of work followed by adjustments that we believe will accelerate our goal of building a profitable company. We are also pleased announce a "Global Settlement" of previous published financial risks related to the Daman, India project.

DEVELOPMENT IN OUR EXISTING MARKETS

Progress: The purpose of pursuing development in our existing markets is to increase cash flow where we can leverage our existing management overhead. We have made the following progress:

  • New casino in Nicaragua: On April 22, 2015, the Group opened a 1,200 square meters casino with 111 slot machines, 21 gaming table positions and 110 F&B positions. See page 23 for more information.
  • New casino in Costa Rica: In June 2014, the Group opened a 570 square meters casino in Costa Rica with 122 slot machines, 27 gaming table positions (non-poker), 3 poker tables, and 36 food and beverage seats. See press releases dated July 11, 2014 for more information.
  • New gaming positions in Peru: In July and August 2014, the Group opened 24 electronic roulette positions. In December 2014, we opened 56 table positions and a 40-seat restaurant at our Luxor Lima operation. See press releases of August 26, 2014 and December 4, 2014 for more information.

Challenge: The Group recognizes the need to increase liquidity in order to invest in our core gaming business. In last year's CEO Letter to Shareholders, we announced the potential sale of our non-producing Costa Rican real estate (commonly known as "Tres Rios" and "Escazu"). The number of potential buyers for large, premium parcels in a small market like Costa Rica is limited and interest shown by potential buyers has not yet resulted in a successful sale.

Response to Challenge: During 2014, the Group was approached by several parties who hoped to acquire our Costa Rica casino operations. Over the past several years, both revenues and cash flow have decreased in these operations. To meet our development goal of increasing liquidity, given the slow progress of the Costa Rica real estate sales, on February 25, 2015, the Group sold its Costa Rica casino operations and achieved net cash in excess of $8 million. See page 23 and press release dated February 27, 2015 for more information.

CONTROL AND REDUCE COUNTRY-LEVEL AND CORPORATE EXPENSES

Progress: We have made the following progress in reducing expenses:

  • Country-level consolidated operating, general and administrative expenses were reduced by $1.7 million or by 4% as compared to December 31, 2013 (despite inflation in our markets). Between September 2014 and the date of publication of this report, the Group has reduced approximately $1.5 million in payroll that should result in improved EBITDA in 2015.
  • Corporate expense was reduced by $400 thousand or 8% from $4.9 million as of December 31, 2013 to $4.5 million as of December 31, 2014 (despite inflation in our markets).

Challenges: Despite the continued progress in the reduction of expenses and our positive property EBITDA1 ($9.8 million in 2014) and adjusted EBITDA ($5.3 million in 2014), our bottom line results are challenged by: a) High corporate expense required to manage a publicly-traded company given the downsizing of the organization (approximately 8.0% of revenue in 2014); b) High non-cash expenses ($8.5 million between depreciation and amortization, forex and other non-cash items in 2014); and c) High financing costs, net ($4.5 million in 2014).

Response to Challenges: For our response to these more entrenched challenges, please see "Evaluation of Strategic Alternatives" below.

REDUCE DEBT AND REFINANCE REMAINING DEBT UNDER FAVORABLE TERMS

Progress: Group gross debt2 as of December 31, 2014 was $46.2 million and net debt3 was $41.3 million. After the sale of our Costa Rica gaming operations, the Group's gross debt (preliminary, unaudited) has been reduced to approximately $37.8 million and net debt to $27.2 million as of the date of this report.

Challenge: The Group continues to work on refinancing its Peru and Peru-related debt (approximately $29.2 million of gross debt as of December 31, 2014) and, if the opportunity arises, to pay down a significant portion or all of this debt.

Response to Challenge: We continue to work on different refinancing alternatives. The Fiesta Hotel & Casino real estate in Lima, Peru has an updated appraisal of approximately $53 million (April 2015), which we believe will help in a refinancing. Please also see "Evaluation of Strategic Alternatives" below.

EVALUATION OF STRATEGIC ALTERNATIVES

The Group's primary stated goal is to achieve profitability and to build a healthy, growing company. Certain entrenched challenges (as described above) have made achieving this goal difficult. The solutions to these challenges require us to rethink how to accelerate revenue growth, accelerate debt reduction and materially reduce non-cash items that are largely responsible for the variances between our positive EBITDA and our negative income.

We believe the lack of profitability is a key factor that has resulted in low demand for our shares and a reason why our market capitalization (approximately $10.4 million as of the date of publication of this report) falls materially short of what Management believes is the intrinsic value of its real estate (appraised value of our interests of $76.3 million based on appraisals performed since 2013) and adjusted EBITDA of $5.3 million (as of December 31, 2014).

The Group's plan continues to be as summarized at the beginning of this letter, but with one or more of the following possible adjustments, all of which are now under active analysis:

  • Liquidate additional non-producing and producing real estate (total appraised value of the Group's interests in all of our real estate exceeds $76 million) in order to: a) Pay down virtually all debt; b) Significantly reduce depreciation and amortization; c) Retool our asset mix away from real estate and invest proceeds in new high cash flowing gaming operations in our existing markets to increase revenues and improve bottom line results; and / or
  • Raise new equity to pay down virtually all debt and invest in new high cash flowing gaming operations in our existing markets with the goal of increasing revenues and bottom line results.

At this time, these strategic alternatives are under analysis, should be considered speculative in nature and any outcomes will depend both on our analysis and on the demands of the market place.

"GLOBAL SETTLEMENT" RELATED TO THE DAMAN, INDIA PROJECT

Finally, I am pleased to inform that, effective April 8, 2015, in order to avoid litigation costs and obtain certainty as to obligations, the Group has:

  • Settled a possible $6 million or greater exposure arising from a guarantee it provided in 2009 to a mezzanine lender (Maravege Holding Limited) to the Daman, India project. The total consideration for settlement is $2.425 million consisting of a cash payment of $1.325 million to be paid over 23 months and an offsetting credit for the $1.1 million to be paid by Maravege for the remaining 5.5% of shares the Group has in DHPL. The Share transfer is subject to a certain first right process with an existing DHPL shareholder as described on page 24.
  • Obtained full release from DHPL and from its controlling shareholder Delta Corp Limited ("Delta") for any potential liabilities and claims.
  • Received from Delta and DHPL proof that all senior lenders, whose loans totalled approximately $25 million and had been guaranteed by the Group, have been paid in full by DHPL/Delta.
  • Obtained a full release from Madison India Real Estate Fund Limited ("MIREF"), whose mezzanine loan to DHPL of approximately $7.2 million had been guaranteed by Thunderbird.

In effect, the Group believes it has achieved a "Global Settlement" of its remaining financial exposure in India. The background on the Daman, India project and the Global Settlement is fully described in Note 21 of our Financial Statement which accompanies this 2014 Annual Report.

We look forward to communicating with shareholders as material events unfold.

Sincerely,

Salomon Guggenheim, President & CEO

1 EBITDA is not an accounting term under IFRS, and refers to earnings before net interest expense, income taxes, depreciation and amortization, equity in earnings of affiliates, minority interests, development costs, other gains and losses, and discontinued operations. "Property EBITDA" is equal to EBITDA at the country level(s). "Adjusted EBITDA" is equal to property EBITDA consolidated from all operations less "corporate expenses", which are the expenses of operating the parent company and its non-operating subsidiaries and affiliates.

2 Gross debt equals total borrowings and finance lease obligations inclusive of the Group's proportional share of debt held by its Costa Rican joint venture as of year-end 2014.

3 Net debt equals gross debt less cash and cash equivalents (excludes restricted cash).

GROUP OVERVIEW

The strengthening of the US dollar throughout the year versus our operating currencies has had a material impact on our business as compared to 2013. Thus, for the convenience of the reader, below we present: a) Summary of our consolidated results without adjustments for forex; and b) The same summary, but adjusted to apply our 2014 average exchange rates to the same period in 2013 to compare results under a currency neutral scenario.

a) Summary 2014 consolidated P&L:

(In thousands, proportional consolidation)
Twelve months ended
December 31 %
2014 2013 Variance change
Net gaming wins $ 45,615 $ 48,791 $ (3,176 ) -6.5 %
Food and beverage sales 4,518 4,521 (3 ) -0.1 %
Hospitality and other sales 6,097 5,941 156 2.6 %
Total revenues 56,230 59,253 (3,023 ) -5.1 %
Promotional allowances 5,020 5,032 (12 ) -0.2 %
Property, marketing and administration 41,457 43,244 (1,787 ) -4.1 %
Property EBITDA 9,753 10,977 (1,224 ) -11.2 %
Corporate Expenses 4,501 4,884 (383 ) -7.8 %
Adjusted EBITDA 5,252 6,093 (841 ) -13.8 %
Property EBITDA as a percentage of revenues 9.3 % 10.3 %
Depreciation and amortization 5,438 6,699 (1,261 ) -18.8 %
Interest and financing costs, net 4,522 5,887 (1,365 ) -23.2 %
Management fee attributable to non-controlling interest (43 ) 43 (86 ) -200.0 %
Project development 85 71 14 19.7 %
Foreign exchange loss 891 1,091 (200 ) -18.3 %
Other (gains) / losses 2,227 1,632 595 36.5 %
Derivative financial instrument - (21 ) 21 -100.0 %
Income taxes 1,206 1,817 (611 ) -33.6 %
Loss for the period from continuing operations $ (9,074 ) $ (11,126 ) $ 2,052 -18.4 %

b) Summary 2014 consolidated P&L adjusted for forex (currency neutral):

(In thousands, proportional consolidation under currency neutral)
Twelve months ended
December 31 %
2014 2013 Variance change
Net gaming wins $ 45,615 $ 46,148 $ (533 ) -1.2 %
Food and beverage sales 4,518 4,272 246 5.8 %
Hospitality and other sales 6,097 5,662 435 7.7 %
Total revenues 56,230 56,082 148 0.3 %
Promotional allowances 5,020 4,782 238 5.0 %
Property, marketing and administration 41,457 40,932 525 1.3 %
Property EBITDA 9,753 10,368 (615 ) -5.9 %
Corporate Expenses 4,501 4,884 (383 ) -7.8 %
Adjusted EBITDA 5,252 5,484 (232 ) -4.2 %
Property EBITDA as a percentage of revenues 9.3 % 9.8 %
Depreciation and amortization 5,438 6,335 (897 ) -14.2 %
Interest and financing costs, net 4,522 5,758 (1,236 ) -21.5 %
Management fee attributable to non-controlling interest (43 ) (16 ) (27 ) 168.8 %
Project development 85 68 17 25.0 %
Foreign exchange (gain) / loss 891 1,016 (125 ) -12.3 %
Other (gains) / losses 2,227 1,626 601 37.0 %
Derivative financial instrument - (21 ) 21 -100.0 %
Income taxes 1,206 1,730 (524 ) -30.3 %
Loss for the period from continuing operations $ (9,074 ) $ (11,012 ) $ 1,938 -17.6 %

Group Debt: Below is the Group's Gross debt and Net debt on December 31, 2014.

(In thousands; proportional consolidation)
Dec-14 Sep-14 Jun-14
Borrowings $ 43,485 $ 43,848 $ 44,474
Borrowings associated with assets held for sale 1,890 1,817 1,918
Obligations under leases and hire purchase contracts 780 829 953
Gross Debt $ 46,155 $ 46,494 $ 47,345
Less: cash and cash equivalents (excludes restricted cash) 4,885 7,148 4,684
Net Debt $ 41,270 $ 39,346 $ 42,661

Note: Gross debt above is presented net of debt issuance costs which is why there is an approximate $0.8 million variance with the total principal balance below. Borrowings under assets held for sale are related to two undeveloped real estateparcels owned by the Group's joint venture in Costa Rica. Post the sale of our interests in our Costa Rican gaming operations as of February 25, 2015, the Group's Gross debt has since been lowered to approximately $37.8 million.

The Group estimates its gross debt schedule effective as of December 31, 2014 (our debt schedule will be updated in future reports that will reflect the reduced gross debt post the sale of our interests in Costa Rica gaming operations, which were sold effective February 25, 2015):

Principal Balance 2015 2016 2017 2018 2019 Thereafter Total
Corporate $ 8,334,631 $ 5,286,216 $ 4,910,903 $ 1,563,506 $ 1,375,026 $ 3,397,095 $ 24,867,377
Corporate 7,441,818 5,286,216 4,910,903 1,563,506 1,375,026 3,397,095 23,974,563
Guatemala 892,813 - - - - - 892,813
Costa Rica 2,479,780 735,563 960,883 1,398,174 385,031 1,791,923 7,751,355
Peru 1,555,755 1,500,331 1,288,777 1,395,824 6,810,756 - 12,551,443
Nicaragua 219,065 239,849 237,403 221,384 680,744 164,235 1,762,681
Total $ 12,589,232 $ 7,761,959 $ 7,397,966 $ 4,578,889 $ 9,251,557 $ 5,353,254 $ 46,932,856
Interest Payment 2015 2016 2017 2018 2019 Thereafter Total
Corporate $ 2,177,139 $ 1,584,419 $ 822,549 $ 602,022 $ 456,979 $ 419,584 $ 6,062,692
Corporate 2,177,139 1,584,419 822,549 602,022 456,979 419,584 6,062,692
Guatemala - - - - - - -
Costa Rica 691,433 459,112 358,026 235,484 149,517 518,533 2,412,104
Peru 984,830 842,589 729,553 620,176 223,950 - 3,401,098
Nicaragua 168,634 135,885 112,699 92,834 72,780 15,540 598,372
Total $ 4,022,035 $ 3,022,005 $ 2,022,827 $ 1,550,515 $ 903,227 $ 953,657 $ 12,474,266

Management continues to be focused on developing inthe markets in which we currently operate. We continue to analyze our businesses, countries and structure regularly. We will announce any strategy changes if and when there are material changes.

RISK MANAGEMENT

For more detail on Risk Factors, see Chapter 8 of the Annual Report.

MANAGEMENT STATEMENT ON "GOING CONCERN"

Management routinely plans future activities including forecasting future cash flows. Management has reviewed their plan with the Directors and has collectively formed a judgment that the Group has adequate resources to continue as a going concern for the foreseeable future, which Management and the Directors have defined as being at least the next 18 months from December 31, 2014. In arriving at this judgment, Management has prepared the cash flow projections of the Group, which incorporates a 5-year rolling forecast and detailed cash flow modeling through the current financial year. Directors have reviewed this information provided by Management and have considered the information in relation to the financing uncertainties in the current economic climate, the Group's existing commitments and the financial resources available to the Group. The expected cash flows have been modeled based on anticipated revenue and profit streams with debt funding programmed into the model and reducing over time. The model assumes no new construction projects during the forecast period, with the exception of one business that was in development in 2014 and has since opened as of April 22, 2015. The model assumes a stable regulatory environment in all countries with existing operations. Sensitivities have been applied to this model in relation to revenues not achieving anticipated levels.

The Directors have considered the: (i) base of investors and debt lenders historically available to Thunderbird Resorts, Inc.; (ii) global capital markets; (iii) limited trading exposures to our local suppliers and retail customers; (iv) other risks to which the Group is exposed, the most significant of which is considered to be regulatory risk; (v) sources of Group income, including management fees charged to and income distributed from its various operations; (vi) cash generation, debt amortization levels and key debt service coverage ratios; (vii) fundamental trends of the Group's businesses; (viii) extraordinary cash inflows and outflows from one-time events forecasted to occur in the 18-month period following December 31, 2014; (ix) refinancing of Peru and Peru-related debt; and (x) liquidation of undeveloped and therefore non-performing real estate assets that have been held for sale.

Considering the above, Management and Directors are satisfied that the consolidated Group has adequate resources to continue as a going concern for at least 18 months following December 31, 2014. For these reasons, Management and Directors continue to adopt the going concern basis in preparing the consolidated financial statements.

FINANCIAL STATEMENTS

THUNDERBIRD RESORTS, INC.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(Expressed in thousands of United States dollars)
For the year ended December 31, 2014
2014 2013
Assets
Non-current assets
Property, plant and equipment (Note 10) $ 28,720 $ 33,708
Investment accounted for using the equity method (Note 26) 6,403 3,954
Intangible assets (Note 9) 7,783 7,939
Deferred tax assets (Note 8) 566 352
Trade and other receivables (Note 11) 1,543 5,321
Due from related parties (Note 19) 5,651 120
Total non-current assets 50,666 51,394
Current assets
Trade and other receivables (Note 11) 2,766 8,662
Due from related parties (Note 19) 1,019 11,477
Inventories (Note 12) 738 886
Restricted cash (Note 13) 1,802 1,724
Cash and cash equivalents (Note 13) 4,749 5,491
Total current assets 11,074 28,240
Total assets $ 61,740 $ 79,634
THUNDERBIRD RESORTS, INC.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (continued)
(Expressed in thousands of United States dollars)
For the year ended December 31, 2014
2014 2013
Equity and liabilities
Capital and reserves
Share capital (Note 17) 110,144 109,926
Share option reserve 289 467
Retained earnings (106,552 ) (95,666 )
Translation reserve (1,725 ) 734
Equity attributable to equity holders of the parent 2,156 15,461
Non-controlling interest 6,404 6,117
Total equity 8,560 21,578
Non-current liabilities
Borrowings (Note 15) 28.532 37,612
Obligations under leases and hire purchase contracts (Note 20) 317 275
Deferred tax liabilities (Note 8) 77 54
Provisions (Note 16) 1,475 2,100
Trade and other payables (Note 14) 1,318 999
Total non-current liabilities 31,719 41,040
Current liabilities
Trade and other payables (Note 14) 6,203 6,785
Due to related parties (Note 19) 2,368 2,429
Borrowings (Note 15) 9,763 3,778
Obligations under leases and hire purchase contracts (Note 20) 463 833
Other financial liabilities (Note 23) 615 666
Current tax liabilities 821 513
Provisions (Note 16) 1,228 2,012
Total current liabilities 21,461 17,016
Total liabilities 53,180 58,056
Total equity and liabilities $ 61,740 $ 79,634
THUNDERBIRD RESORTS, INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Expressed in thousands of United States dollars)
For the year ended December 31, 2014
2014 2013
Net gaming wins $ 40,323 $ 42,825
Food, beverage and hospitality sales 10,230 10,097
Total revenue 50,553 52,922
Cost of goods sold (18,456 ) (18,360 )
Gross profit 32,097 34,562
Other operating costs
Operating, general and administrative (28,439 ) (30,593 )
Project development - (27 )
Depreciation and amortization (4,306 ) (5,114 )
Other gains and (losses) (Note 5) (1,601 ) (1,605 )
Operating loss (2,249 ) (2,777 )
Share of loss from equity accounted investments (2,867 ) (97 )
Financing
Foreign exchange (loss) / gain (510 ) (1,164 )
Financing costs (Note 7) (4,591 ) (5,907 )
Financing income (Note 7) 652 838
Other interest (Note 7) (37 ) (206 )
Finance costs, net (4,486 ) (6,439 )
Loss before tax (9,602 ) (9,313 )
Income taxes expense (Note 8)
Current (1,392 ) (1,353 )
Deferred 221 (354 )
Income tax expense (1,171 ) (1,707 )
Loss for the year from continuing operations $ (10,773 ) $ (11,020 )
Loss for the year from discontinued operations - (2,380 )
Loss for the year $ (10,773 ) $ (13,400 )
THUNDERBIRD RESORTS, INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (continued)
(Expressed in thousands of United States dollars)
For the year ended December 31, 2014
2014 2013
Other comprehensive income (amounts, which will be recycled)
Exchange differences arising on the translation of foreign operations $ (2,459 ) $ (2,729 )
Other comprehensive income for the year (2,459 ) (2,729 )
Total comprehensive income for the year $ (13,232 ) $ (16,129 )
Loss for the year attributable to:
Owners of the parent (11,084 ) (14,334 )
Non-controlling interest 311 934
$ (10,773 ) $ (13,400 )
Total comprehensive income attributable to:
Owners of the parent (13,543 ) (17,063 )
Non-controlling interest 311 934
$ (13,232 ) $ (16,129 )
Basic and diluted loss per share (in $): (Note 18)
Loss from continuing operations (0.49 ) (0.52 )
Loss from discountinued operations - (0.10 )
Total (0.49 ) (0.62 )
THUNDERBIRD RESORTS, INC.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(Expressed in thousands of United States dollars)
For the year ended December 31, 2014

Attributable to equity holders of parent
Share
capital
Share
options
reserve
Currency
translation
reserve
Retained
earnings
Total Non-
controlling
interest
Total
equity
Balance at January 1, 2013 $ 109,969 $ 783 $ 4,523 $ (81,648 ) $ 33,627 $ 8,218 $ 41,845
Transactions with owners:
Issue of new shares 240 - - - 240 - 240
Shares buy-back (272 ) - - - (272 ) - (272 )
Shares returned to treasury (11 ) - - - (11 ) - (11 )
Options cancellation and expiration - (316 ) - 316 - - -
Philippines disposal - - (1,060 ) - (1,060 ) (3,035 ) (4,095 )
$ (43 ) $ (316 ) $ (1,060 ) $ 316 $ (1,103 ) $ (3,035 ) $ (4,138 )
Loss for the year - - - (14,334 ) (14,334 ) 934 (13,400 )
Other comprehensive income
Exchange differences arising on
translation of foreign operations - - (2,729 ) - (2,729 ) - (2,729 )
Total comprehensive income for the year (2,729 ) (14,334 ) (17,063 ) 934 (16,129 )
Balance at December 31, 2013 $ 109,926 $ 467 $ 734 $ (95,666 ) $ 15,461 $ 6,117 $ 21,578
Share
capital
Share
options
reserve
Currency
translation
reserve
Retained
earnings
Total Non-
controlling
interest
Total
equity
Balance at January 1, 2014 $ 109,926 $ 467 $ 734 $ (95,666 ) $ 15,461 $ 6,117 $ 21,578
Transactions with owners:
Issue of new shares 218 - - - 218 - 218
Buy-back of subsidiary shares - - - 20 20 (24 ) (4 )
Options cancellation and expiration - (178 ) - 178 - - -
$ 218 $ (178 ) $ - $ 198 $ 238 $ (24 ) $ 214
Loss for the year - - (11,084 ) (11,084 ) 311 (10,773 )
Other comprehensive income
Exchange differences arising on
translation of foreign operations - - (2,459 ) - (2,459 ) - (2,459 )
Total comprehensive income for the year - - (2,459 ) (11,084 ) (13,543 ) 311 (13,232 )
Balance at December 31, 2014 $ 110,144 $ 289 $ (1,725 ) $ (106,552 ) $ 2,156 $ 6,404 $ 8,560
THUNDERBIRD RESORTS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Expressed in thousands of United States dollars)
For the year ended December 31, 2014
2014 2013
Cash flow from operating activities
Loss for the year $ (10,773 ) $ (11,020 )
Items not involving cash:
Depreciation and amortization 4,306 5,209
Loss on disposal of property, plant and equipment (107 ) 131
Unrealized foreign exchange 510 1,487
Increase / (decrease) in provision (1,364 ) 1,246
Bad debt expense 401 -
Other losses / (gains) 1,307 -
Share based payments 219 240
Finance income (652 ) (838 )
Finance cost 4,591 5,907
Other interests 37 206
Results from equity accounted investments 2,867 97
Tax expenses 1,171 1,707
Net change in non-cash working capital items
Decrease in trade, prepaid and other receivables 5,676 4,726
Decrease in inventory 102 7
(Decrease) / increase in trade payables and accrued (236 ) (1,751 )
Cash (used) from operations 8,055 7,354
Total tax paid (1,066 ) (1,434 )
Net cash generated by continuing operations 6,989 5,920
Net cash (used) from discontinued operations - (1,322 )
Net cash (used) from operating activities $ 6,989 $ 4,598
Cash flow from investing activities
Expenditure on property, plant and equipment (2,598 ) (3,422 )
Proceeds on sale of property, plant and equipment 1,622 59
Proceeds on sale of Philippines operation, net of cash disposed - 17,265
Cost of sale of Philippines operation (259 ) (522 )
Interest received 652 317
Net cash used from investing activities $ (583 ) $ 13,697
Cash flow from financing activities
Shares buy-back - (283 )
Proceeds from issue of new loans 534 1,550
Repayment of loans and leases payable (3,546 ) (15,884 )
Interest paid (3,883 ) (5,188 )
Net cash used from financing activities $ (6,895 ) $ (19,805 )
Net change in cash and cash equivalents during the year (489 ) (1,510 )
Cash and cash equivalents, beginning of the year 7,215 8,506
Effect of foreign exchange adjustment (175 ) 219
Cash and cash equivalents, end of the year $ 6,551 $ 7,215

ABOUT THE COMPANY

We are an international provider of branded casino and hospitality services, focused on markets in Latin America. Our mission is to "create extraordinary experiences for our guests."Additional information about the Group is available at www.thunderbirdresorts.com.

Cautionary Notice: Cautionary Notice: The Annual Report referred to in this release contains certain forward-looking statements within the meaning of the securities laws and regulations of various international, federal, and state jurisdictions. All statements, other than statements of historical fact, included in the Annual Report, including without limitation, statements regarding potential revenue and future plans and objectives of Thunderbird are forward-looking statements that involve risk and uncertainties. There can be no assurances that such statements will prove to be accurate and actual results could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Thunderbird's forward-looking statements include competitive pressures, unfavorable changes in regulatory structures, and general risks associated with business, all of which are disclosed under the heading "Risk Factors" and elsewhere in Thunderbird's documents filed from time-to-time with the Euronext Amsterdam and other regulatory authorities. Included in the Annual Report are certain "non-IFRS financial measures," which are measures of Thunderbird's historical or estimated future performance that are different from measures calculated and presented in accordance with IFRS, within the meaning of applicable Euronext Amsterdam rules, that are useful to investors. These measures include (i) Property EBITDA consists of income from operations before depreciation and amortization, write-downs, reserves and recoveries, project development costs, corporate expenses, corporate management fees, merger and integration costs, income/(losses) on interests in non-consolidated affiliates and amortization of intangible assets. Property EBITDA is a supplemental financial measure we use to evaluate our country-level operations. (ii) Adjusted EBITDA represents net earnings before interest expense, income taxes, depreciation and amortization, equity in earnings of affiliates, minority interests, development costs, and gain on refinancing and discontinued operations. Adjusted EBITDA is a supplemental financial measure we use to evaluate our overall operations. Property EBITDA and Adjusted EBITDA are supplemental financial measures used by management, as well as industry analysts, to evaluate our operations. However, Property and Adjusted EBITDA should not be construed as an alternative to income from operations (as an indicator of our operating performance) or to cash flows from operating activities (as a measure of liquidity) as determined in accordance with generally accepted accounting principles.

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