Segment information

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Segment information

Segment information

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 present four separate reportable segments by geography: (i) Yucatán Peninsula, (ii) Pacific Coast, (iii) Dominican Republic and (iv) Jamaica. For the three months ended March 31, 2021 and 2020, 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 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 fee income (“Owned Resort EBITDA”).

We define Adjusted EBITDA as net loss, 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) impairment loss; (b) loss on sale of assets; (c) other expense; (d) share-based compensation; (e) other tax expense; (f) transaction expenses; and (g) severance expenses.

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 Condensed Consolidated Financial Statements.

The following table presents segment owned net revenue and a reconciliation to total revenue for the three months ended March 31, 2021 and 2020 ($ in thousands):

	Three Months Ended March 31,
	2021		2020
Owned net revenue
Yucatán Peninsula	$	33,603	$	62,317
Pacific Coast	8,621		21,155
Dominican Republic	20,881		35,596
Jamaica	11,722		51,436
Segment owned net revenue (1)	74,827		170,504
Other	125		15
Management fees	344		645
Cost reimbursements	513		950
Compulsory tips	1,937		5,114
Total revenue	$	77,746	$	177,228

________

(1) Segment owned net revenue represents total revenue less compulsory tips paid to employees, cost reimbursements, management fees and other miscellaneous revenue not derived from segment operations.

The following table presents segment Owned Resort EBITDA, Adjusted EBITDA and a reconciliation to net loss for the three months ended March 31, 2021 and 2020 ($ in thousands):

	Three Months Ended March 31,
	2021		2020
Owned Resort EBITDA
Yucatán Peninsula	$	7,174	$	24,935
Pacific Coast	485		8,872
Dominican Republic	1,666		7,789
Jamaica	(2,780)		19,073
Segment Owned Resort EBITDA	6,545		60,669
Other corporate	(9,394)		(10,971)
Management fees	344		645
Total Adjusted EBITDA	(2,505)		50,343
Interest expense	(18,167)		(20,955)
Depreciation and amortization	(20,883)		(24,959)
Impairment loss	(24,011)		(16,173)
Loss on sale of assets	(273)		—
Other expense	(706)		(3,906)
Share-based compensation	(3,179)		(3,223)
Other tax expense	(163)		(237)
Transaction expenses	(579)		(586)
Severance expense	(1,287)		(1,198)
Non-service cost components of net periodic pension cost (benefit) (1)	57		(551)
Net loss before tax	(71,696)		(21,445)
Income tax benefit (provision)	1,951		(1,111)
Net loss	$	(69,745)	$	(22,556)

________

(1) Represents the non-service cost components of net periodic pension cost (benefit) recorded within other expense in the Condensed 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 March 31, 2021 and December 31, 2020 ($ in thousands):

	As of March 31,		As of December 31,
	2021		2020
Segment property and equipment, gross
Yucatán Peninsula	$	665,284	$	799,849
Pacific Coast	288,339		288,328
Dominican Republic	679,286		678,900
Jamaica	406,879		406,047
Total segment property and equipment, gross	2,039,788		2,173,124
Corporate property and equipment, gross	4,557		4,505
Accumulated depreciation	(414,339)		(450,246)
Total property and equipment, net	$	1,630,006	$	1,727,383

The following table presents segment capital expenditures and a reconciliation to total capital expenditures for the three months ended March 31, 2021 and 2020 ($ in thousands):

	Three Months Ended March 31,
	2021		2020
Segment capital expenditures
Yucatán Peninsula	$	681	$	1,580
Pacific Coast	141		257
Dominican Republic	645		6,932
Jamaica	1,027		1,634
Total segment capital expenditures (1)	2,494		10,403
Corporate	57		114
Total capital expenditures (1)	$	2,551	$	10,517

________

(1) Represents gross additions to property and equipment