2015-04-24

PANAMA, REPUBLIC OF PANAMA--(MILITARY-TECHNOLOGIES.NET - 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:

Development in our existing markets where new revenues should most efficiently grow our bottom line by leveraging existing management overhead.

Continue efforts to control and reduce country-level and corporate expenses.

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

1EBITDA 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.

2Gross 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.

3Net 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

)

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