Schedule I - Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2018

Condensed Financial Information Disclosure [Abstract]

Schedule I - Condensed Financial Information of Registrant

SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

Playa Hotels & Resorts N.V.

(Parent Company)

Balance Sheet

($ in thousands)

	As of December 31,
	2018		2017
ASSETS
Cash and cash equivalents	$	9,565	$	18,143
Intercompany receivables from subsidiaries	236		2,798
Prepayments and other assets	226		165
Investment in subsidiaries	831,542		589,611
Total assets	$	841,569	$	610,717
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade and other payables	$	1,715	$	427
Intercompany payables to subsidiaries	13		9,157
Other liabilities	—		1,584
Total liabilities	1,728		11,168
Total shareholders’ equity	839,841		599,549
Total liabilities and shareholders' equity	$	841,569	$	610,717

The accompanying notes are an integral part of these Condensed Financial Statements.

SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

Playa Hotels & Resorts N.V.

(Parent Company)

Statement of Operations

($ in thousands)

	For the Year Ended December 31,
	2018			2017			2016
Revenue	$	—		$	—		$	1,085
Selling, general and administrative expenses	(8,355		)	(4,988		)	(315		)
Operating (loss) income	(8,355		)	(4,988		)	770
Other income	1,382			77			12,016
Interest income	—			1			127
Interest expense	(197		)	(4,117		)	(1,597		)
Net (loss) income before equity in net income of subsidiaries	(7,170		)	(9,027		)	11,316
Equity in net income of subsidiaries	26,147			8,786			8,900
Net income (loss)	18,977			(241		)	20,216
Dividends of cumulative redeemable preferred shares	—			(7,922		)	(43,676		)
Non-cash dividend to warrant holders	—			(879		)	—
Net income (loss) available to ordinary shareholders	$	18,977		$	(9,042	)	$	(23,460	)

The accompanying notes are an integral part of these Condensed Financial Statements.

SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

Playa Hotels & Resorts N.V.

(Parent Company)

Statement of Cash Flows

($ in thousands)

	For the Year Ended December 31,
	2018			2017			2016
OPERATING ACTIVITIES:
Net cash (used in) provided by operating activities	$	(493	)	$	66,631		$	4,562
INVESTING ACTIVITIES:
Investment in subsidiaries	(7,000		)	(78,709		)	—
Return of investment in subsidiaries	6,784			—			—
Net cash used in investing activities	(216		)	(78,709		)	—
FINANCING ACTIVITIES:
Repayment of intercompany loans	(7,500		)	(49,447		)	(4,000		)
Repurchase of ordinary shares	(314		)	—			—
Repurchase of Earnout Warrants	(55		)	—			—
Redemption of cumulative redeemable preferred shares and payment of accrued dividends	—			—			(553		)
Recapitalization transaction	—			79,658			—
Net cash (used in) provided by financing activities	(7,869		)	30,211			(4,553		)
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(8,578		)	18,133			9
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD	$	18,143		$	10		$	1
CASH AND CASH EQUIVALENTS, END OF THE PERIOD	$	9,565		$	18,143		$	10
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Issuance of intercompany loans	$	—		$	—		$	49,447
Redemption of cumulative redeemable preferred shares and payment of accrued dividends	$	—		$	—		$	(49,447	)
Settlement of intercompany loan receivables	$	—		$	—		$	3,000
Settlement of intercompany loan payables	$	—		$	—		$	(3,641	)
Non-cash PIK Dividends	$	—		$	7,922		$	43,676
Purchase of cumulative redeemable preferred shares	$	—		$	(239,492	)	$	—
Settlement of accrued dividends of cumulative redeemable preferred shares	$	—		$	(114,381	)	$	—
Non-cash transfer of treasury shares	$	—		$	(80	)	$	—
Non-cash investment in subsidiaries	$	225,000		$	—		$	—
Non-cash return of investment in subsidiaries	$	(9,600	)	$	—		$	—
Par value of vested restricted share awards	$	22		$	17		$	—
Par value of ordinary shares issued in exchange for warrants	$	—		$	747		$	—
Non-cash dividend to warrant holders	$	—		$	879		$	—

The accompanying notes are an integral part of these Condensed Financial Statements.

Background and basis of presentation

Playa Hotels & Resorts N.V. (“Playa” or the “Company”) was incorporated as a public limited liability company in the Netherlands concurrent with the Pace Business Combination (as defined in Note 4 of the Company’s Consolidated Financial Statements included elsewhere in this filing). Playa became the parent company (holding) of the Company’s portfolio through its wholly-owned subsidiary Playa Resorts Holding B.V. When presenting parent company financial statements (our “Condensed Financial Statements”), the Company accounts for its investment in subsidiaries using the equity method of accounting.

Certain of the Company’s subsidiaries have material restrictions on their ability to pay dividends or make intercompany loans and advances pursuant to the Senior Secured Credit Facility (as defined in Note 14 of the Company’s Consolidated Financial Statements included elsewhere in this filing). These Condensed Financial Statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X, as the restricted net assets of Playa and its subsidiaries constitute more than 25% of the consolidated net assets of the Company and its subsidiaries. This information should be read in conjunction with the Company’s Consolidated Financial Statements included elsewhere in this filing.

Commitments, contingencies and cumulative redeemable preferred shares

The legal entity has guaranteed liabilities of certain consolidated group companies, as meant in article 2:403 of the Netherlands Civil Code. The legal entity is therefore jointly and severally liable for the liabilities arising from the legal acts of those group companies. The Company and its subsidiaries are involved in certain litigation and claims, including claims and assessments with taxing authorities, which are incidental to the conduct of its business.

The Dutch corporate income tax act provides the option of a fiscal unity, which is a consolidated tax regime wherein the profits and losses of group companies can be offset against each other. Our Dutch companies file as a fiscal unity, with the exception of Playa Romana B.V., Playa Romana Mar B.V. and Playa Hotels & Resorts N.V. Playa Resorts Holding B.V. is the head of our Dutch fiscal unity and is jointly and severally liable for the tax liabilities of the fiscal unity as a whole.

During the third quarter of 2015, we identified and recorded a potential Dutch operating tax contingency resulting from allocations to be made of certain corporate expenses from 2014 and 2015. We provided all requested documentation to the Dutch tax authorities and, in the fourth quarter of 2018, they reached their final determination resulting in a gain of $1.2 million reported in other income for the year ended December 31, 2018. As of December 31, 2018, there was no operating tax contingency outstanding.

For a discussion of the cumulative redeemable preferred shares of the Company, see Note 12 of the Company’s Consolidated Financial Statements included elsewhere in this filing.

Dividends from subsidiaries

The Company received $0 million, $75.1 million, and $1.1 million in cash dividends for the years ended December 31, 2018, 2017 and 2016, respectively, which are included within operating activities in the Condensed Statement of Cash Flows for all periods presented.

Long-term obligations

On October 14, 2016, the Company entered into a $49.4 million loan with Playa Resorts Holding B.V., due October 14, 2021. The loan bore 8.25% interest payable at maturity. On November 20, 2017, the Company repaid the $49.4 million outstanding balance.