Segment information

12 Months Ended

Dec. 31, 2019

We consider each one of our owned resorts to be an operating segment, none of which meets the threshold for a reportable segment. We also allocate resources and assess operating performance based on individual resorts. Our operating segments meet the aggregation criteria and thus, we report four separate reportable segments by geography: (i) Yucatán Peninsula, (ii) Pacific Coast, (iii) Dominican Republic, and (iv) Jamaica. For the years ended December 31, 2019, 2018 and 2017, we have excluded the immaterial amounts of management fees, cost reimbursements and other from our segment reporting.

Our operating segments are components of the business which are managed discretely and for which discrete financial information is reviewed regularly by our Chief Executive Officer, Chief Financial Officer and Chief Operating Officer, all of whom represent our chief operating decision maker (“CODM”). Financial information for each reportable segment is reviewed by the CODM to assess performance and make decisions regarding the allocation of resources.

The performance of our business is evaluated primarily on adjusted earnings before interest expense, income tax benefit (provision), and depreciation and amortization expense (“Adjusted EBITDA”), which should not be considered an alternative to net income (loss) or other measures of financial performance or liquidity derived in accordance with U.S. GAAP. The performance of our segments is evaluated on Adjusted EBITDA before corporate expenses and management fees (“Owned Resort EBITDA”).

We define Adjusted EBITDA as net (loss) income, determined in accordance with U.S. GAAP, for the period presented, before interest expense, income tax benefit (provision), and depreciation and amortization expense, further adjusted to exclude the following items: (a) other (expense) income; (b) pre-opening expense; (c) share-based compensation; (d) other tax expense; (e) transaction

expense; (f) severance expense; (g) Jamaica delayed opening accrual reversal; (i) property damage insurance gain; (j) loss on extinguishment of debt; (k) impairment loss; and (l) repairs from hurricanes and tropical storms.

There are limitations to using financial measures such as Adjusted EBITDA and Owned Resort EBITDA. For example, other companies in our industry may define Adjusted EBITDA differently than we do. As a result, it may be difficult to use Adjusted EBITDA or similarly named financial measures that other companies publish to compare the performance of those companies to our performance. Because of these limitations, Adjusted EBITDA should not be considered as a measure of the income or loss generated by our business or discretionary cash available for investment in our business and investors should carefully consider our U.S. GAAP results presented in our Consolidated Financial Statements.

The following table presents segment Owned Net Revenue, defined as total revenue less compulsory tips paid to employees, cost reimbursements, management fees and other miscellaneous revenue not derived from segment operations, and a reconciliation to total revenue for the years ended December 31, 2019, 2018 and 2017 ($ in thousands):



	Year Ended December 31,
	2019		2018		2017
Owned Net Revenue
Yucatán Peninsula	$	235,788	$	259,393	$	269,043
Pacific Coast	85,219		86,317		87,519
Dominican Republic	90,783		125,137		124,125
Jamaica	193,558		126,702		65,381
Segment Owned Net Revenue	605,348		597,549		546,068
Other	23		305		3
Management fees	1,820		755		140
Cost reimbursements	6,412		978		—
Compulsory tips	22,874		17,426		13,334
Total revenue	$	636,477	$	617,013	$	559,545

The following table presents segment Owned Resort EBITDA, Adjusted EBITDA and a reconciliation to net income (loss) for the years ended December 31, 2019, 2018 and 2017 ($ in thousands):



	Year Ended December 31,
	2019			2018			2017
Owned Resort EBITDA
Yucatán Peninsula	$	82,534		$	107,884		$	113,754
Pacific Coast	31,618			31,038			34,246
Dominican Republic	16,596			41,228			37,506
Jamaica	55,175			32,912			15,976
Segment Owned Resort EBITDA	185,923			213,062			201,482
Other corporate	(37,049		)	(34,786		)	(30,757		)
Management fees	1,820			755			140
Total adjusted EBITDA	150,694			179,031			170,865
Interest expense	(44,087		)	(62,243		)	(53,661		)
Depreciation and amortization	(101,897		)	(73,278		)	(53,131		)
Impairment loss	(6,168		)	—			—
Other (expense) income	(3,200		)	2,822			(1,078		)
Pre-opening expense	(1,452		)	(321		)	—
Share-based compensation	(8,845		)	(6,116		)	(3,765		)
Other tax expense	(577		)	(1,633		)	(1,778		)
Transaction expense	(6,175		)	(9,615		)	(21,708		)
Severance expense	(515		)	(333		)	(442		)
Jamaica delayed opening accrual reversal	—			342			203
Property damage insurance gain	—			2,212			—
Loss on extinguishment of debt	—			—			(25,120		)
Repairs from hurricanes and tropical storms	—			—			(1,807		)
Non-service cost components of net periodic pension cost ⁽¹⁾	645			308			232
Net income before tax	(21,577		)	31,176			8,810
Income tax benefit (provision)	17,220			(12,199		)	(9,051		)
Net (loss) income	$	(4,357	)	$	18,977		$	(241	)

________


⁽¹⁾	Represents the non-service cost components of net periodic pension cost recorded within other (expense) income in the Consolidated Statements of Operations. We include these costs in calculating Adjusted EBITDA as they are considered part of our ongoing resort operations.

The following table presents segment property and equipment, gross and a reconciliation to total property and equipment, net as of December 31, 2019 and 2018 ($ in thousands):



	As of December 31,
	2019			2018
Segment property and equipment, gross
Yucatán Peninsula	$	865,900		$	861,380
Pacific Coast	288,358			285,936
Dominican Republic	667,120			501,624
Jamaica	499,569			500,550
Total segment property and equipment, gross	2,320,947			2,149,490
Other corporate	7,320			9,189
Accumulated depreciation	(398,353		)	(350,267		)
Total property and equipment, net	$	1,929,914		$	1,808,412

The following table presents segment capital expenditures and a reconciliation to total capital expenditures for the years ended December 31, 2019, 2018 and 2017 ($ in thousands):



	Year Ended December 31,
	2019		2018		2017
Segment capital expenditures
Yucatán Peninsula	$	28,495	$	16,684	$	25,438
Pacific Coast	3,144		3,181		4,484
Dominican Republic	178,599		79,543		73,618
Jamaica	5,178		6,262		12,691
Total segment capital expenditures ⁽¹⁾	215,416		105,670		116,231
Other corporate	14,512		5,665		2,604
Total capital expenditures ⁽¹⁾	$	229,928	$	111,335	$	118,835

________

⁽¹⁾ Includes capital expenditures incurred, but not yet paid.