Other balance sheet items

Trade and other receivables, net

The following summarizes the balances of trade and other receivables, net as of December 31, 2018 and 2017 ($ in thousands):



	As of December 31,
	2018			2017
Gross trade and other receivables ⁽¹⁾	$	65,363		$	52,312
Allowance for doubtful accounts	(593		)	(785		)
Total trade and other receivables, net	$	64,770		$	51,527

________


⁽¹⁾	Includes $2.0 million in receivables related to property damage insurance claims as of December 31, 2018. There were no such receivables as of December 31, 2017.

Financial instruments that are subject to credit risk consist primarily of trade accounts receivable. Trade accounts receivable are generated from sales of services to customers in the United States, Canada, Europe, Latin America and Asia. Our policy is to mitigate this risk by granting a credit limit to each client depending on the client’s volume and credit quality. In order to increase the initially established credit limit, approval is required from the credit manager. Each hotel periodically reviews the age of the clients’ balances and the balances which may be of doubtful recoverability.

We do not require collateral or other security in support of accounts receivable. Allowances are provided for individual accounts receivable when we become aware of a customer’s inability to meet its financial obligations, such as in the case of bankruptcy, deterioration in the customer’s operating results, or change in financial position. If circumstances related to customers change, estimates of the recoverability of receivables would be further adjusted. We also consider broader factors in evaluating the sufficiency of our allowances for doubtful accounts, including the length of time receivables are past due, significant one-time events and historical experience.

The gross carrying amount of the trade and other receivables balance is reduced by an allowance for doubtful accounts that reflects our estimate of amounts that will not be collected. The allowance is based on historical loss experience, specific risks identified in collection matters, and analysis of past due balances identified in the aging detail. We have not experienced any significant write-offs to our accounts receivable.

The change in the allowance for doubtful accounts for the years ended December 31, 2018, 2017 and 2016 is summarized in the following table ($ in thousands):



	Balance at January 1			Additions			Deductions		Balance at December 31
December 31, 2018	$	(785	)	$	(338	)	$	530	$	(593	)
December 31, 2017	$	(1,061	)	$	(295	)	$	571	$	(785	)
December 31, 2016	$	(1,017	)	$	(545	)	$	501	$	(1,061	)

Prepayments and other assets

The following summarizes the balances of prepayments and other assets as of December 31, 2018 and 2017 ($ in thousands):



	As of December 31,
	2018		2017
Advances to suppliers	$	9,447	$	6,509
Prepaid income taxes	7,538		10,935
Prepaid other taxes ⁽¹⁾	10,240		10,737
Contract deposit ⁽²⁾	2,700		2,700
Other assets	2,692		4,175
Total prepayments and other assets	$	32,617	$	35,056

________


⁽¹⁾	Includes recoverable value-added tax and general consumption tax accumulated by our Mexico and Jamaica entities, respectively.

⁽²⁾ Represents a cash deposit related to the Sanctuary Cap Cana management contract. We are in the process of negotiating final terms for the purchase of a 30% interest, and the deposit will be used towards this purchase if we are able to agree on terms. If the purchase is not completed, this amount, together with an additional $0.8 million due, will be treated as key money.

Goodwill

The gross carrying values and accumulated impairment losses of goodwill by reportable segment (refer to discussion of our reportable segments in Note 19) as of December 31, 2018 and 2017 are as follows ($ in thousands):



	Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Total
Gross carrying value as of December 31, 2017	$	51,731	$	—	$	—	$	—	$	51,731
Accumulated impairment losses	—		—		—		—		—
Net carrying value as of December 31, 2017	51,731		—		—		—		51,731

Additions (see Note 4)	—		—		—		31,925		31,925

Gross carrying value as of December 31, 2018	51,731		—		—		31,925		83,656
Accumulated impairment losses	—		—		—		—		—
Net carrying value as of December 31, 2018	$	51,731	$	—	$	—	$	31,925	$	83,656

Other intangible assets

Other intangible assets as of December 31, 2018 and 2017 consisted of the following ($ in thousands):



	As of December 31,
	2018			2017
Gross carrying value:
Strategic alliance	$	—		$	3,616
Licenses ⁽¹⁾	858			981
Management contract ⁽²⁾	1,900			—
Enterprise resource planning system⁽³⁾	2,246			—
Other	3,027			3,298
Total gross carrying value	8,031			7,895
Accumulated amortization:
Strategic alliance	—			(3,616		)
Management contract ⁽²⁾	(48		)	—
Enterprise resource planning system⁽³⁾	(67		)	—
Other	(1,813		)	(2,192		)
Total accumulated amortization	(1,928		)	(5,808		)
Net carrying value:
Strategic alliance	—			—
Licenses ⁽¹⁾	858			981
Management contract ⁽²⁾	1,852			—
Enterprise resource planning system⁽³⁾	2,179			—
Other	1,214			1,106
Total net carrying value	$	6,103		$	2,087

________

⁽¹⁾Our licenses have indefinite lives. Accordingly, there is no associated amortization expense or accumulated amortization.

⁽²⁾Represents the fair value of a management contract acquired in the business combination with the Sagicor Parties (see Note 4).

⁽³⁾Represents software development costs incurred to develop and implement SAP as our integrated enterprise resource planning (“ERP”) system. $1.1 million of these costs were placed into service in 2018 and are being amortized over a weighted-average amortization period of 7 years.

Amortization expense on our intangible assets was $1.0 million, $0.9 million and $1.0 million for the years ended December 31, 2018, 2017 and 2016, respectively. Amortization expense relating to intangible assets with finite lives for the years ended December 31, 2019 to 2023 is expected to be as follows ($ in thousands):



	As of December 31, 2018
2019	$	991
2020	703
2021	577
2022	543
2023	457
Thereafter	1,974
Total	$	5,245

Trade and other payables

The following summarizes the balances of trade and other payables as of December 31, 2018 and 2017 ($ in thousands):



	As of December 31,
	2018		2017
Trade payables	$	24,452	$	18,160
Advance deposits	57,339		43,884
Withholding and other taxes payable	45,274		34,904
Interest payable	147		5,586
Payroll and related accruals	14,251		13,848
Accrued expenses and other payables	18,137		23,146
Total trade and other payables	$	159,600	$	139,528

Other liabilities

The following summarizes the balances of other liabilities as of December 31, 2018 and 2017 ($ in thousands):



	As of December 31,
	2018		2017
Tax contingencies	$	—	$	2,310
Pension obligation	5,123		4,456
Cap Cana land purchase obligation	10,625		10,625
Unfavorable ground lease liability⁽¹⁾	2,294		—
Key money ⁽²⁾	1,994		—
Other	1,566		2,003
Total other liabilities	$	21,602	$	19,394

________


⁽¹⁾	Represents the amortized balance of the unfavorable ground lease intangible acquired in the business combination with the Sagicor Parties (see Note 4).


⁽²⁾	Represents the amortized balance of key money received from Hilton in connection with the conversion of our Hilton La Romana and Hilton Playa del Carmen properties. The amortization is recorded as a reduction to franchise fees within direct expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss). We received $2.0 million in December 2018.