How did Amaya's financial performance change in 2015?

Revenue rose to $1,371.0 million from $553.7 million, largely because 2015 included twelve months of the B2C business versus five months in 2014. Loss from continuing operations was $25.9 million, compared with earnings of $98.2 million in 2014. Net earnings were $238.9 million, due mainly to $264.8 million from discontinued operations.

How much debt does Amaya carry and what are its near-term obligations?

The filing states approximately US$2.57 billion of outstanding indebtedness at December 31, 2015, and estimated debt service of about US$152 million, including required principal and interest, over the next 12 months. The 2013 Debentures of $30 million were repaid on February 1, 2016. The US$400 million deferred payment is due February 1, 2017.

What is the status of the Kentucky proceeding?

The Kentucky trial court entered an order for damages of approximately US$290 million, which it trebled to approximately US$870 million. Amaya believes the action is frivolous, has filed a notice of appeal to the Kentucky Court of Appeals, and posted a US$100 million supersedeas bond requiring US$35 million in cash collateral and US$30 million in letters of credit.

What did David Baazov propose regarding the company?

On February 1, 2016, Amaya reported that Chairman and CEO David Baazov provided a non-binding indication that he intends to make an all-cash proposal to acquire the company at an estimated $21.00 per Common Share. Other employees, including the Executive Vice President, Corporate Development & General Counsel, may participate in the proposal.

What are the main risks highlighted for investors?

The filing highlights substantial indebtedness and related covenants, a heavily regulated industry with licensing requirements in many jurisdictions, foreign exchange exposure (about 90% of 2015 revenue was earned in currencies other than the Canadian or U.S. dollar), gaming duty and tax changes, competition, and dependence on the PokerStars and Full Tilt brands and key personnel.

FLUT 10-K FY2015 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 40-F filed March 14, 2016. Cited figures are marked; the original filing is the authoritative source.

Amaya Inc. filed its Form 40-F annual report for the fiscal year ended December 31, 2015, on March 14, 2016.

The filing consists of an annual information form, audited annual financial statements, MD&A, and certifications. Amaya reported 2015 revenue of $1,371.0 million^a (CAD) versus $553.7 million in 2014, and net earnings of $238.9 million, driven by a $264.8 million gain from discontinued operations following the divestiture of its B2B business. Loss from continuing operations was $25.9 million.

The company is now almost entirely a B2C business centered on the PokerStars and Full Tilt brands, with 2015 Poker revenue of $1,134.2 million^b and Casino & Sportsbook revenue of $174.2 million. Leverage remains high. Amaya had approximately US$2.57 billion of outstanding indebtedness at year-end, with estimated debt service of about US$152 million over the next 12 months.

Total assets were $7.81 billion^c and total liabilities $5.02 billion. The company faces material contingencies, most notably a Kentucky judgment of approximately US$870 million after trebling, which Amaya is appealing; it posted a US$100 million supersedeas bond and intends to dispute liability. A deferred payment of US$400 million to the former Rational Group owners is due February 1, 2017.

In late January 2016, Amaya also sought roughly US$300 million^d from the escrow fund under the merger agreement, which the sellers' representative disputed. The filing also discloses a non-binding indication from Chairman and CEO David Baazov of a potential all-cash proposal at an estimated $21.00 per Common Share, with several employees possibly participating. Key risks include regulatory licensing across jurisdictions, currency exposure (about 90% of revenue in non-CAD/USD currencies), and dependence on the poker franchise.

02—Key points

Key Highlights

2015 revenue of $1,371.0 million, up from $553.7 million, reflecting a full year of B2C operations after the Rational Group Acquisition on August 1, 2014 (2014 included only five months).
Net earnings of $238.9 million, but loss from continuing operations of $25.9 million; the net result was lifted by $264.8 million from discontinued operations, mainly the B2B divestitures.
Poker revenue of $1,134.2 million and Casino & Sportsbook revenue of $174.2 million; PokerStars is described as the world's largest online poker site.
Total debt of approximately US$2.57 billion at December 31, 2015, with an estimated US$152 million of debt service over the next 12 months.
Kentucky litigation: trial court order of approximately US$290 million, trebled to about US$870 million; Amaya is appealing and posted a US$100 million supersedeas bond.
A US$400 million deferred payment to the former Rational Group owners is payable February 1, 2017, and the company claimed about US$300 million from the merger escrow fund, which the sellers disputed.
Chairman and CEO David Baazov indicated an intent to make an all-cash proposal to acquire the company at an estimated $21.00 per Common Share.

03—Questions

Frequently Asked Questions

How did Amaya's financial performance change in 2015?
Revenue rose to $1,371.0 million from $553.7 million, largely because 2015 included twelve months of the B2C business versus five months in 2014. Loss from continuing operations was $25.9 million, compared with earnings of $98.2 million in 2014. Net earnings were $238.9 million, due mainly to $264.8 million from discontinued operations.
How much debt does Amaya carry and what are its near-term obligations?
The filing states approximately US$2.57 billion of outstanding indebtedness at December 31, 2015, and estimated debt service of about US$152 million, including required principal and interest, over the next 12 months. The 2013 Debentures of $30 million were repaid on February 1, 2016. The US$400 million deferred payment is due February 1, 2017.
What is the status of the Kentucky proceeding?
The Kentucky trial court entered an order for damages of approximately US$290 million, which it trebled to approximately US$870 million. Amaya believes the action is frivolous, has filed a notice of appeal to the Kentucky Court of Appeals, and posted a US$100 million supersedeas bond requiring US$35 million in cash collateral and US$30 million in letters of credit.
What did David Baazov propose regarding the company?
On February 1, 2016, Amaya reported that Chairman and CEO David Baazov provided a non-binding indication that he intends to make an all-cash proposal to acquire the company at an estimated $21.00 per Common Share. Other employees, including the Executive Vice President, Corporate Development & General Counsel, may participate in the proposal.
What are the main risks highlighted for investors?
The filing highlights substantial indebtedness and related covenants, a heavily regulated industry with licensing requirements in many jurisdictions, foreign exchange exposure (about 90% of 2015 revenue was earned in currencies other than the Canadian or U.S. dollar), gaming duty and tax changes, competition, and dependence on the PokerStars and Full Tilt brands and key personnel.

04—Continue

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