tsg-ex991_15.htm

TORONTO, May 15, 2019 – The Stars Group Inc. (NASDAQ: TSG) (TSX: TSGI) today reported its financial results for the first quarter ended March 31, 2019 and provided certain additional highlights and updates. Unless otherwise noted, all dollar ($) amounts are in U.S. dollars.

“During the quarter, we delivered on key components of our 2019 objectives,” said Rafi Ashkenazi, The Stars Group’s Chief Executive Officer. “As we continue to lay the foundations to deliver sustainable long-term growth across the group, we are also now focused on positioning our new FOX Bet brand as a market leader in the U.S.”

“We continued to see growth in most markets in our International segment on a constant currency basis during the quarter, despite challenging operational conditions, the cessation of operations in certain markets and foreign exchange headwinds having a significant impact on our reported results as compared to the first quarter in 2018. Our United Kingdom segment continues to exceed our expectations operationally with record levels of new depositing customers, and an acceleration of growth in QAUs, Stakes and gaming revenue, although this performance was masked in the reported results by a record low Betting Net Win Margin of 5%. In Australia, we are pleased with our performance and continue to build our platform for market share gains,” said Mr. Ashkenazi.

“Underlying trends were similar in April and into May across the three segments, but with a significantly higher Betting Net Win Margin in the United Kingdom segment that is above its historical average of 9%. As we look at the remainder of 2019, we see opportunities for improved revenue growth, with a deep pipeline of new products, content and offers, leveraging our talent and skills across segments. Our leading positions in attractive markets, strong brands, technology and operating expertise have been bolstered by the new partnership with FOX Sports and positions us well for long-term growth,” concluded Mr. Ashkenazi.

	Three Months Ended March 31,
In thousands of U.S. Dollars (except percentages and per share amounts)	2019			2018			% Change
Total revenue		580,384			392,891			47.7	%
Gross profit (excluding depreciation and amortization)		417,748			312,627			33.6	%
Operating income		61,537			113,867			(46.0	%)
Net earnings		27,658			74,361			(62.8	%)
Adjusted Net Earnings¹		105,600			138,762			(23.9	%)
Adjusted EBITDA¹		195,355			175,022			11.6	%
Adjusted EBITDA Margin¹		33.7	%		44.5	%		(24.4	%)
Diluted earnings per Common Share ($/Share)		0.10			0.36			(71.6	%)
Adjusted Diluted Net Earnings per Share ($/Share)¹		0.38			0.67			(42.8	%)

Net cash inflows from operating activities		110,385			132,069			(16.4	%)
Free Cash Flow¹		(37,513	)		82,259			(145.6	%)

As at	March 31, 2019			December 31, 2018			% Change
Long-term debt - principal		5,439,072			5,566,075			(2.3	%)
Long-term debt - carrying value		5,323,705			5,446,958			(2.3	%)
Cash - operational		266,513			392,853			(32.2	%)

¹ Non-IFRS measure. For important information on The Stars Group’s non-IFRS measures, see below under “Non-IFRS Measures” and the tables under “Reconciliation of Non-IFRS Measures to Nearest IFRS Measures”.

	Three Months Ended March 31,
In thousands of U.S. Dollars (except otherwise noted)	2019			2018			% Change
Stakes		275,259			222,985			23.4	%
Betting Net Win Margin (%)		7.3	%		7.5	%		(2.7	%)

Revenue
Poker		214,149			245,870			(12.9	%)
Poker Constant Currency Revenue		234,856			245,870			(4.5	%)
Gaming		98,908			106,710			(7.3	%)
Gaming Constant Currency Revenue		108,112			106,710			1.3	%
Betting		20,049			16,686			20.2	%
Betting Constant Currency Revenue		21,905			16,686			31.3	%
Other		7,507			12,500			(39.9	%)
Other Constant Currency Revenue		8,173			12,500			(34.6	%)
Total revenue		340,613			381,766			(10.8	%)
Constant Currency Revenue		373,046			381,766			(2.3	%)

QAUs (millions)		2.2			2.2			(2.9	%)
QNY ($/QAU)		154			165			(6.7	%)
Constant Currency Revenue QNY		169			165			2.7	%

Gross profit (excluding depreciation and amortization)		260,442			304,846			(14.6	%)
Gross profit margin (%)		76.5	%		79.9	%		(4.2	%)

General and administrative		98,975			105,220			(5.9	%)
Sales and marketing²		40,282			44,969			(10.4	%)
Research and development		6,602			7,819			(15.6	%)
Operating income		114,583			146,838			(22.0	%)

Adjusted EBITDA¹		159,340			186,407			(14.5	%)
Adjusted EBITDA Margin (%)¹		46.8	%		48.8	%		(4.2	%)

Net Deposits (millions)		317			353			(10.2	%)

² Sales and marketing includes $1.5 million for the quarter ended March 31, 2019 that the Corporation excluded from its consolidated results as it related to certain non-gaming related transactions with the United Kingdom segment.

	Three Months Ended March 31,
In thousands of U.S. Dollars (except otherwise noted)	2019			2018		% Change
Stakes		1,504,972			—		—
Betting Net Win Margin (%)		5.0	%		—		—

Revenue
Poker		3,290			—		—
Gaming		90,303			—		—
Betting		74,497			—		—
Other²		11,007			—		—
Total revenue		179,097			—		—

QAUs (millions)		2.1			—		—
QNY ($/QAU)		78			—		—

Gross profit (excluding depreciation and amortization)		121,525			—		—
Gross profit margin (%)		67.9	%		—		—

General and administrative		108,587			—		—
Sales and marketing		34,594			—		—
Research and development		4,336			—		—
Operating loss		(25,992	)		—		—

Adjusted EBITDA¹		42,219			—		—
Adjusted EBITDA Margin (%)¹		23.6	%		—		—

² Other revenue includes $1.5 million for the quarter ended March 31, 2019, that the Corporation excluded from its consolidated results as it related to certain non-gaming related transactions with the International segment.

	Three Months Ended March 31,
In thousands of U.S. Dollars (except otherwise noted)	2019			2018 ¹			% Change
Stakes		754,326			157,457			379	%
Betting Net Win Margin (%)		8.1	%		7.1	%		15	%

Revenue
Betting		61,120			11,125			449	%
Other		1,054
Total revenue		62,174			11,125			458.9	%

QAUs (millions)		0.21			—			—
QNY ($/QAU)		285			—			—

Gross profit (excluding depreciation and amortization)		37,281			7,636			388.2	%
Gross profit margin (%)		60.0	%		68.6	%		(12.6	%)

General and administrative		26,082			4,337			501.4	%
Sales and marketing		10,764			4,211			155.6	%
Research and development		1,573			216			628.2	%
Operating loss		(1,138	)		(1,128	)		0.9	%

Adjusted EBITDA ²		8,630			(846	)		(1120.1	%)
Adjusted EBITDA Margin (%) ²		13.9	%		(7.6	%)		(282.5	%)

¹The acquisition of 62% of BetEasy occurred on February 27, 2018 with the acquisition of a further 18% of BetEasy and BetEasy’s acquisition of the William Hill Australia business occurring subsequent to the first quarter of 2018.

² Non-IFRS measure. For important information on The Stars Group’s non-IFRS measures, see below under “Non-IFRS Measures” and the tables under “Reconciliation of Non-IFRS Measures to Nearest IFRS Measures”.

For additional information regarding The Stars Group’s reporting segments and major lines of operations, please see The Stars Group’s interim condensed consolidated financial statements for the quarter ended March 31, 2019 (the “Q1 2019 Financial Statements”), including note 5 therein, and management’s discussion and analysis thereon (the “Q1 2019 MD&A”).

Consolidated Financial Statements, Management’s Discussion and Analysis and Additional Information

The Stars Group’s Q1 2019 Financial Statements, Q1 2019 MD&A, and additional information relating to The Stars Group and its business, can be found on SEDAR at www.sedar.com, Edgar at www.sec.gov and The Stars Group’s website at www.starsgroup.com. The financial information presented in this news releases was derived from the 2018 Annual Financial Statements.

In addition to press releases, securities filings and public conference calls and webcasts, The Stars Group intends to use its investor relations page on its website as a means of disclosing material information to its investors and others and for complying with its disclosure obligations under applicable securities laws. Accordingly, investors and others should monitor the website in addition to following The Stars Group’s press releases, securities filings and public conference calls and webcasts. This list may be updated from time to time.

The Stars Group will host a conference call today, May 15, 2019 at 8:30 a.m. ET to discuss its financial results for the first quarter 2019 and related matters, and provide additional detail with respect to the information in this news release, its webcast presentation, and related Q1 2019 filings. To access via tele-conference, please dial +1-877-451-6152 or +1-201-389-0879 ten minutes prior to the scheduled start of the call. The playback will be made available two hours after the event at +1-844-512-2921 or +1-412-317-6671. The Conference ID number is 13690431. To access the webcast please use the following link: http://public.viavid.com/index.php?id=134412.

The tables below present reconciliations of Adjusted EBITDA, Adjusted Net Earnings and Adjusted Diluted Net Earnings per Share to net earnings, which is the nearest IFRS measure. For additional information, see “Reconciliations” in the Q1 2019 MD&A.

	Quarter Ended March 31, 2019
In thousands of U.S. Dollars (except per share amounts)	International			United Kingdom			Australia			Corporate			Consolidated
Net earnings (loss)		114,583			(25,992	)		(1,138	)		(59,795	)		27,658

Income tax recovery		—			—			—			13,098			13,098
Net financing charges		—			—			—			(46,977	)		(46,977	)

Operating income (loss)		114,583			(25,992	)		(1,138	)		(25,916	)		61,537

Depreciation and amortization		37,979			61,671			9,442			202			109,294
Add (deduct) the impact of the following:
Stock-based compensation		—			—			—			2,736			2,736
Gains from investments		(67	)		—			—			—			(67	)
Impairment of intangible assets		12			142			—			—			154
Other costs		6,833			6,398			326			8,144			21,701
Total adjusting items		6,778			6,540			326			10,880			24,524

Adjusted EBITDA		159,340			42,219			8,630			(14,834	)		195,355

	Quarter Ended March 31, 2018
In thousands of U.S. Dollars (except per share amounts)	International		United Kingdom		Australia			Corporate			Consolidated
Net earnings (loss)		146,838		—		(1,128	)		(71,349	)		74,361

Income tax expense		—		—		—			(1,155	)		(1,155	)
Net financing charges		—		—		—			(38,351	)		(38,351	)

Operating income (loss)		146,838		—		(1,128	)		(31,843	)		113,867

Depreciation and amortization		37,969		—		1,280			9			39,258
Add (deduct) the impact of the following:
Acquisition-related costs and deal contingent forwards		—				—			15,191			15,191
Stock-based compensation		—		—		—			2,383			2,383
Loss (gain) from investments		517		—		(5	)		—			512
Impairment of intangible assets		115		—		—			—			115
Other costs (income)		968		—		(993	)		3,721			3,696
Total adjusting items		1,600		—		(998	)		21,295			21,897

Adjusted EBITDA		186,407		—		(846	)		(10,539	)		175,022

	Three Months Ended March 31,
In thousands of U.S. Dollars (except per share amounts)	2019			2018
Net earnings		27,658			74,361
Income tax (recovery) expense		(13,098	)		1,155
Net earnings before tax		14,560			75,516
Add (deduct) the impact of the following:
Interest accretion		8,269			12,051
Re-measurement of contingent consideration		(9,378	)		—
Re-measurement of embedded derivative		(22,600	)		—
Unrealized foreign exchange loss on financial instruments associated with financing activities		1,632			—
Ineffectiveness on cash flow hedges		1,856			—
Acquisition-related costs and deal contingent forwards		—			15,191
Amortization of acquisition intangibles		89,955			31,376
Stock-based compensation		2,736			2,383
Loss from investments		(67	)		512
Impairment of intangibles assets		154			115
Other costs		21,701			3,696
Adjust for income tax expense		(3,218	)		(2,078	)
Adjusted Net Earnings		105,600			138,762
Adjusted Net Earnings attributable to
Shareholders of The Stars Group Inc.		104,826			140,232
Non-controlling interest		774			(1,470	)

Diluted Shares		273,946,225			209,495,673
Adjusted Diluted Net Earnings per Share		0.38			0.67

The table below presents certain items comprising “Other costs” in the reconciliation tables above:

The table below presents a reconciliation of Free Cash Flow to net cash flows from operating activities, which is the nearest IFRS measure:

The Stars Group is a provider of technology-based product offerings in the global gaming and interactive entertainment industries. Its brands have millions of registered customers globally and collectively are leaders in online and mobile betting, poker, casino and other gaming-related offerings. The Stars Group owns or licenses gaming and related consumer businesses and brands, including PokerStars, PokerStars Casino, BetStars, Full Tilt, FOX Bet, BetEasy, Sky Bet, Sky Vegas, Sky Casino, Sky Bingo, Sky Poker, and Oddschecker, as well as live poker tour and events brands, including the PokerStars Players No Limit Hold’em Championship, European Poker Tour, PokerStars Caribbean Adventure, Latin American Poker Tour, Asia Pacific Poker Tour, PokerStars Festival and PokerStars MEGASTACK. The Stars Group is one of the world’s most licensed online gaming operators with its subsidiaries collectively holding licenses or approvals in 21 jurisdictions throughout the world, including in Europe, Australia, and the Americas. The Stars Group’s vision is to become the world’s favorite iGaming destination and its mission is to provide its customers with winning moments.

This news release contains forward-looking statements and information within the meaning of the Private Securities Litigation Reform Act of 1995 and applicable securities laws, including, without limitation, certain financial and operational expectations and projections, such as certain future operational and growth plans and strategies, and certain financial items relating to the full year 2019 results, as well as the partnership between The Stars Group and FOX Sports, a unit of FOX Corporation, and rights and obligations related thereto. Forward-looking statements and information can, but may not always, be identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “would”, “should”, “believe”, “objective”, “ongoing”, “imply”, “assumes”, “goal”, “likely” and similar references to future periods or the negatives of these words or variations or synonyms of these words or comparable terminology and similar expressions. These statements and information, other than statements of historical fact, are based on management’s current expectations and are subject to a number of risks, uncertainties, and assumptions, including market and economic conditions, business prospects or opportunities, future plans and strategies, projections, technological developments, anticipated events and trends and regulatory changes that affect The Stars Group, its subsidiaries, and its and their respective customers and industries. Although The Stars Group and management believe the expectations reflected in such forward-looking statements and information are reasonable and are based on reasonable assumptions and estimates as of the date hereof, there can be no assurance that these assumptions or estimates are accurate or that any of these expectations will prove accurate. Forward-looking statements are inherently subject to significant business, regulatory, economic and competitive risks, uncertainties and contingencies that could cause actual events to differ materially from those expressed or implied in such statements. Specific risks and uncertainties include, but are not limited to: customer and operator preferences and changes in the economy; reputation and brand growth; competition and the competitive environment within addressable markets and industries; macroeconomic conditions and trends in the gaming and betting industry; ability to predict fluctuations in financial results from quarter to quarter; ability to mitigate tax risks and adverse tax consequences, including, without limitation, changes in tax laws or administrative policies relating to tax and the imposition of new or additional taxes, such as value-added and point of consumption taxes, and gaming duties; The Stars Group’s substantial indebtedness requires that it use a significant portion of its cash flow to make debt service payments; impact of inability to complete future or announced acquisitions or to integrate businesses successfully, including, without limitation, Sky Betting & Gaming and BetEasy; contractual relationships of The Stars Group or any of its subsidiaries with FOX Corporation, FOX Sports and Sky plc and/or their respective subsidiaries; an ability to realize all or any of The Stars Group’s estimated synergies and cost savings in connection with acquisitions, including, without limitation, the acquisition of Sky Betting & Gaming and the Australian acquisitions; ability to mitigate foreign exchange and currency risks; legal and regulatory requirements; potential changes to the gaming regulatory framework; the heavily regulated industry in which The Stars Group carries on its business; ability to obtain, maintain and comply with all applicable and required licenses, permits and certifications to offer, operate and market its product offerings, including difficulties or delays in the same; social responsibility concerns and public opinion; protection of proprietary technology and intellectual property rights; intellectual property infringement or invalidity claims; and systems, networks, telecommunications or service disruptions or failures or cyber-attacks and failure to protect customer data, including personal and financial information. These factors are not intended to represent a complete list of the factors that could affect The Stars Group; however, these factors as well as other applicable risks and uncertainties include, but are not limited to, those identified in its most recently filed annual information form, including under the heading “Risk Factors and Uncertainties”, and in its most recently filed management’s discussion and analysis, including under the headings “Caution Regarding Forward-Looking Statements”, “Risk Factors and Uncertainties” and “Non-IFRS Measures, Key Metrics and Other Data”, each available on SEDAR at www.sedar.com, EDGAR at www.sec.gov and The Stars Group’s website at www.starsgroup.com, and in other filings that The Stars Group has made and may make in the future with applicable securities

authorities in the future, should be considered carefully. Investors are cautioned not to put undue reliance on forward-looking statements or information. Any forward-looking statement or information in this news release are expressly qualified by this cautionary statement. Any forward-looking statement or information speaks only as of the date hereof, and The Stars Group undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

This news release references non-IFRS financial measures. The Stars Group believes these non-IFRS financial measures will provide investors with useful supplemental information about the financial and operational performance of its business, enable comparison of financial results between periods where certain items may vary independent of business performance, and allow for greater transparency with respect to key metrics used by management in operating its business, identifying and evaluating trends, and making decisions. The Stars Group believes that such non-IFRS financial measures provide useful information about its underlying, core operating results and trends, enhance the overall understanding of its past performance and future prospects and allow for greater transparency with respect to metrics and measures used by management in its financial and operational decision-making.

Although management believes these non-IFRS financial measures are important in evaluating The Stars Group, they are not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with IFRS. They are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS. These measures may be different from non-IFRS financial measures used by other companies any may not be comparable to similar meanings prescribed by other companies, limiting its usefulness for comparison purposes. Moreover, presentation of certain of these measures is provided for period-over-period comparison purposes, and investors should be cautioned that the effect of the adjustments thereto provided herein have an actual effect on The Stars Group’s operating results. In addition to QNY, which is defined below under “Key Metrics and Other Data”, The Stars Group provides the following non-IFRS measures in this news release:

Adjusted EBITDA means net earnings before financial expenses, income tax expense (recovery), depreciation and amortization, stock-based compensation, restructuring, net earnings (loss) on associate and certain other items as set out in the reconciliation tables under “above” below.

Adjusted Net Earnings means net earnings before interest accretion, amortization of intangible assets resulting from purchase price allocations following acquisitions, stock-based compensation, restructuring, net earnings (loss) on associate, and certain other items. In addition, as previously disclosed, The Stars Group makes adjustments for (i) the re-measurement of contingent consideration, which was previously included in, and adjusted for through, interest accretion, but starting with The Stars Group’s interim condensed consolidated financial statements and related notes for the three and nine months ended September 30, 2018 (the “Q3 2018 Financial Statements”), it is a separate line item, (ii) the re-measurement of embedded derivatives and ineffectiveness on cash flow hedges, each of which were new line items in the Q3 2018 Financial Statements, and (iii) certain non-recurring tax adjustments and settlements. Each adjustment to net earnings is then adjusted for the tax impact, where applicable, in the respective jurisdiction to which the adjustment relates. Adjusted Net Earnings and any other non-IFRS measures used by The Stars Group that relies on or otherwise incorporates Adjusted Net Earnings that was reported for previous periods have not been restated under the updated definition on the basis that The Stars Group believes that the impact of the change to those periods would not be material.

Adjusted Diluted Net Earnings per Share means Adjusted Net Earnings attributable to the Shareholders of The Stars Group Inc. divided by Diluted Shares. Diluted Shares means the weighted average number of Common Shares on a fully diluted basis, including options, other equity-based awards such as warrants and any convertible preferred shares of The Stars Group then outstanding. The effects of anti-dilutive potential Common Shares are ignored in calculating Diluted Shares. Diluted Shares used in the calculation of diluted earnings per share may differ from diluted shares used in the calculation of Adjusted Diluted Net Earnings per Share where the dilutive effects of the potential Common Shares differ. For the quarter ended March 31, 2019, Diluted Shares used for the calculation of Adjusted Diluted Net Earnings per Share equalled 273,946,225, compared with 209,495,673 for the same period in 2018.

Constant Currency Revenue means IFRS reported revenue for the relevant period calculated using the applicable prior year period’s monthly average exchange rates for its local currencies other than the U.S. dollar. Currently, The Stars Group provides Constant Currency Revenue for the International segment and its applicable lines of operations. It does not currently provide Constant Currency Revenue for the United Kingdom and Australia segments because The Stars Group does not yet have reported comparative periods for these segments as a result of the respective acquisition dates.

Free Cash Flow means net cash flows from operating activities after adding back customer deposit liability movements, and after capital expenditures and debt servicing cash flows (excluding voluntary prepayments).

For additional information on certain of The Stars Group’s non-IFRS measures and the reasons why it believes such measures are useful, see above and the Q1 2019 MD&A, including under the headings “Management’s Discussion and Analysis”, “Non-IFRS Measures, Key Metrics and Other Data”, “Segment Results of Operations” and “Reconciliations”.

QAUs for the International and Australia reporting segments means active unique customers (online, mobile and desktop client) who (i) made a deposit or transferred funds into their real-money account with The Stars Group at any time, and (ii) generated real-money online rake or placed a real-money online bet or wager on during the applicable quarterly period. The Stars Group defines “active unique customer” as a customer who played or used one of its real-money offerings at least once during the period, and excludes duplicate counting, even if that customer is active across multiple lines of operation (poker, gaming and/or betting, as applicable) within the applicable reporting segment. The definition of QAUs excludes customer activity from certain low-stakes, non-raked real-money poker games, but includes real-money activity by customers using funds (cash and cash equivalents) deposited by The Stars Group into such customers’ previously funded accounts as promotions to increase their lifetime value.

QAUs for the United Kingdom reporting segment (which currently includes the Sky Betting & Gaming business operations only) means active unique customers (online and mobile) who have settled a Stake or made a wager on any betting or gaming product within the applicable quarterly period. The Stars Group defines active unique customer for the United Kingdom reporting segment as a customer who played at least once on one of its real-money offerings during the period, and excludes duplicate counting, even if that customer is active across more than one line of operation.

QNY means combined revenue for its lines of operation (i.e., Poker, Gaming and/or Betting, as applicable) for each reporting segment, excluding Other revenue, as reported during the applicable quarterly period (or as adjusted to the extent any accounting reallocations are made in later periods) divided by the total QAUs during the same period.

Net Deposits for the International segment means the aggregate of gross deposits or transfer of funds made by customers into their real-money online accounts less withdrawals or transfer of funds by such customers from such accounts, in each case during the applicable quarterly period. Gross deposits exclude (i) any deposits, transfers or other payments made by such customers into The Stars Group’s play-money and social gaming offerings, and (ii) any real-money funds (cash and cash equivalents) deposited by The Stars Group into such customers’ previously funded accounts as promotions to increase their lifetime value.

Stakes means betting amounts wagered on The Stars Group’s applicable online betting product offerings, and is also an industry term that represents the aggregate amount of funds wagered by customers within the betting line of operation for the period specified.

The Stars Group is also continuing the process of integrating its recent acquisitions, as applicable, and implementing its recently changed operating and reporting segments, and once complete, The Stars Group may revise or remove currently presented key metrics or report certain additional or other measures in the future.

For additional information on The Stars Group’s key metrics and other data, see the Q1 2019 MD&A, including under the headings “Non-IFRS Measures, Key Metrics and Other Data” and “Segment Results of Operations”.

	Three Months Ended March 31,
In thousands of U.S. Dollars (except per share amounts)	2019			2018
Revenue		580,384			392,891
Cost of revenue (excluding depreciation and amortization)		(162,636	)		(80,264	)
Gross profit (excluding depreciation and amortization)		417,748			312,627
General and administrative		(259,357	)		(141,307	)
Sales and marketing		(84,343	)		(49,418	)
Research and development		(12,511	)		(8,035	)
Operating income		61,537			113,867
Gain on re-measurement of deferred contingent payment		9,378			—
Gain on re-measurement of Embedded Derivatives		22,600			—
Unrealized foreign exchange loss on financial instruments associated with financing activities		(1,632	)		—
Other net financing charges		(77,323	)		(38,351	)
Net financing charges		(46,977	)		(38,351	)
Earnings before income taxes		14,560			75,516
Income tax recovery (expense)		13,098			(1,155	)
Net earnings		27,658			74,361
Net earnings (loss) attributable to
Shareholders of The Stars Group Inc.		27,913			75,451
Non-controlling interest		(255	)		(1,090	)
Net earnings		27,658			74,361
Earnings per Common Share (U.S. dollars)
Basic	$	0.10		$	0.51
Diluted	$	0.10		$	0.36
Weighted average Common Shares outstanding (thousands)
Basic		273,368			148,233
Diluted		273,946			209,496

	As at March 31,			As at December 31,
In thousands of U.S. Dollars	2019			2018
ASSETS
Current assets
Cash and cash equivalents - operational		266,513			392,853
Cash and cash equivalents - customer deposits		333,205			328,223
Total cash and cash equivalents		599,718			721,076
Restricted cash advances and collateral		11,479			10,819
Prepaid expenses and other current assets		49,254			43,945
Current investments - customer deposits		106,507			103,153
Accounts receivable		118,142			136,347
Income tax receivable		24,753			26,085
Total current assets		909,853			1,041,425
Non-current assets
Restricted cash advances and collateral		10,517			10,630
Prepaid expenses and other non-current assets		31,787			32,760
Non-current accounts receivable		18,727			14,906
Property and equipment		147,571			85,169
Income tax receivable		23,178			15,611
Deferred income taxes		2,253			1,775
Derivatives		96,122			54,583
Intangible assets		4,734,896			4,742,699
Goodwill		5,320,324			5,265,980
Total non-current assets		10,385,375			10,224,113
Total assets		11,295,228			11,265,538
LIABILITIES
Current liabilities
Accounts payable and other liabilities		335,066			424,007
Customer deposits		436,694			423,739
Current provisions		28,870			39,189
Derivatives		17,726			16,493
Income tax payable		66,802			72,796
Current portion of lease liability		18,996			—
Current portion of long-term debt		131,750			35,750
Total current liabilities		1,035,904			1,011,974
Non-current liabilities
Lease liability		48,405			—
Long-term debt		5,191,955			5,411,208
Long-term provisions		3,550			4,002
Derivatives		81,468			6,068
Other long-term liabilities		72,799			79,716
Income tax payable		27,388			18,473
Deferred income taxes		576,629			580,697
Total non-current liabilities		6,002,194			6,100,164
Total liabilities		7,038,098			7,112,138
EQUITY
Share capital		4,116,717			4,116,287
Reserves		(394,225	)		(469,629	)
Retained earnings		530,674			502,761
Equity attributable to the Shareholders of The Stars Group Inc.		4,253,166			4,149,419
Non-controlling interest		3,964			3,981
Total equity		4,257,130			4,153,400
Total liabilities and equity		11,295,228			11,265,538

	Three Months Ended March 31,
In thousands of U.S. Dollars	2019			2018
Operating activities
Net earnings		27,658			74,361
Add (deduct):
Income tax (recovery) expense recognized in net earnings		(13,098	)		1,155
Net financing charges		45,345			37,615
Depreciation and amortization		109,294			39,258
Stock-based compensation		2,736			2,383
Unrealized gain on foreign exchange		(7,837	)		(4,425	)
Unrealized gain on investments		(243	)		(1,033	)
Impairment of intangible assets		154			115
Realized loss on current investments and promissory note		27			437
Income taxes paid		(7,818	)		(1,370	)
Changes in non-cash operating elements of working capital		(62,163	)		(13,308	)
Customer deposit liability movement		15,341			(189	)
Other		989			(2,930	)
Net cash inflows from operating activities		110,385			132,069
Investing activities
Acquisition of subsidiaries, net of cash acquired		—			(101,703	)
Additions to intangible assets		(4,534	)		(2,427	)
Additions to property and equipment		(4,047	)		(3,585	)
Additions to deferred development costs		(20,146	)		(6,431	)
Net (purchase) sale of investments utilizing customer deposits		(3,354	)		12,447
Settlement of minimum revenue guarantee		(675	)		(2,713	)
Other		—			575
Net cash outflows from investing activities		(32,756	)		(103,837	)
Financing activities
Issuance of Common Shares in relation to stock options		379			9,737
Repayment of long-term debt		(108,938	)		(6,068	)
Repayment of lease liability principal		(3,131	)		—
Interest paid		(91,761	)		(31,488	)
Proceeds on loan issued to the holders of non-controlling interest		1,421			—
Net cash outflows from financing activities		(202,030	)		(27,819	)
Decrease (increase) in cash and cash equivalents		(124,401	)		413
Unrealized foreign exchange difference on cash and cash equivalents		3,043			1,850
Cash and cash equivalents – beginning of period		721,076			510,323
Cash and cash equivalents – end of period		599,718			512,586

	Quarter Ended March 31,
	2019		2018
In thousands of U.S. Dollars
Integration costs of acquired businesses		8,023		—
Financial expenses (income)		1,030		(2,281	)
Restructuring expenses		3,909		632
AMF and other investigation professional fees		2,709		1,784
Lobbying (US and Non-US) and other legal expenses		3,272		2,993
Professional fees in connection with non-core activities		1,820		451
Retention bonuses		—		117
Other		938		—
Other costs		21,701		3,696


In thousands of U.S. Dollars	As at March 31, 2019
Current portion of long-term debt		131,750
Long-term debt		5,191,955
Less: Cash and cash equivalents - operational		266,513
Net Debt		5,057,192