10. Segment Information

The Company currently manages and reports operating results through three segments: Mountain, Adventure and Real Estate. The Mountain segment includes the operations of the Company’s mountain resorts and related ancillary activities. The Mountain segment earns revenue from a variety of activities, including lift revenue, lodging revenue, ski school revenue, retail and rental revenue, food and beverage revenue, and other revenue. The Adventure segment generates revenue from the sale of helicopter accessed skiing, mountaineering and hiking adventure packages, and ancillary services, such as fire suppression services, leasing, and maintenance, repair and overhaul of aircraft. The Real Estate segment includes the management of condominium hotel properties and real estate management, including marketing and sales activities, real estate development activities, and a vacation club business through the Disposition Date, as described in Note 3, "Acquisitions and Dispositions".

Each of the Company’s segments offers distinctly different products and services and requires different types of management focus. As such, these segments are managed separately. In deciding how to allocate resources and assess performance, the Company’s Chief Operating Decision Maker (“CODM”) regularly evaluates the performance of the Company's segments on the basis of revenue and earnings, which are adjusted for certain items set forth in the reconciliation below, including interest, taxes, depreciation and amortization (“Adjusted EBITDA”). The Company also evaluates Adjusted EBITDA as a key compensation measure. The compensation committee of the board of directors reviews the annual variable compensation for certain members of the management team based, in part, on Adjusted EBITDA. Adjusted EBITDA is useful when comparing the segment performance over various reporting periods because it removes from the operating results the impact of items that the Company's management believes do not reflect the Company's core operating performance.

Adjusted EBITDA should not be considered an alternative to, or more meaningful than, net income (loss) or other measures of financial performance or liquidity derived in accordance with GAAP. Adjusted EBITDA may not be comparable to similarly titled measures of other companies because other entities may not calculate Adjusted EBITDA in the same manner as the Company. The Company's definition of Adjusted EBITDA is generally consistent with the definition of Consolidated EBITDA in the Credit Agreement, with exceptions related to not adjusting for recurring public company costs and foreign currency adjustments related to operational activities and adjusting for executive management restructuring costs.

The Company defines Adjusted EBITDA as net income (loss) attributable to Intrawest Resorts Holdings, Inc. before interest expense, net (excluding interest income earned from receivables related to IRCG operations), income tax benefit or expense and depreciation and amortization, further adjusted to exclude certain items, including, but not limited to: (i) impairments of goodwill, real estate and long-lived assets; (ii) gains and losses on asset dispositions; (iii) earnings and losses from equity method investments; (iv) gains and losses from remeasurement of equity method investments; (v) gains and losses on extinguishment of debt; (vi) other income or expense; (vii) earnings and losses attributable to noncontrolling interest; (viii) discontinued operations, net of tax; and (ix) other items, which include revenue and expenses of legacy and other non-core operations, restructuring charges and associated severance expenses, non-cash compensation and other items. For purposes of calculating Adjusted EBITDA, the Company also adds back to net income (loss) attributable to Intrawest Resorts Holdings, Inc. the pro rata share of Adjusted EBITDA related to equity method investments included within the segments and removes from Adjusted EBITDA the Adjusted EBITDA attributable to noncontrolling interests for entities consolidated within the segments. Asset information by segment, except for capital expenditures as shown in the table below, is not included in reports used by the CODM in the monitoring of performance and, therefore, is not disclosed.

The accounting policies of the segments are the same as those described in Note 2, "Significant Accounting Policies". Transactions among segments are accounted for as if the sales or transfers were to third parties, or, in other words, at current market prices.

The following tables present segment revenue reconciled to consolidated revenue and net income (loss) attributable to the Company reconciled to Adjusted EBITDA and Adjusted EBITDA by segment (in thousands):


	Three Months Ended September 30,
	2016		2015
Revenue:
Mountain
Lift ⁽¹⁾	$	4,750	$	4,005
Lodging	16,961		15,319
Ski School ⁽²⁾	672		610
Retail and Rental	7,604		7,458
Food and Beverage	10,353		9,632
Other	13,654		12,734
Total Mountain revenue	53,994		49,758
Adventure revenue	17,946		24,263
Real Estate revenue	8,279		11,812
Total segment revenue	80,219		85,833
Legacy, non-core and other revenue ⁽³⁾	260		371
Total revenue	$	80,479	$	86,204

Net loss attributable to Intrawest Resorts Holdings, Inc.	$	(44,396	)	$	(47,042	)
Legacy and other non-core expenses, net ⁽⁴⁾	803			2,351
Other operating expenses ⁽⁵⁾	2,108			1,151
Depreciation and amortization	15,170			15,042
Gain on disposal of assets	(341		)	(689		)
Interest income ⁽⁶⁾	(70		)	(71		)
Interest expense	9,908			10,162
Loss from equity method investments ⁽⁷⁾	1,388			3,084
Pro rata share of Adjusted EBITDA related to equity method investments ⁽⁸⁾	1,120			692
Adjusted EBITDA attributable to noncontrolling interest	(370		)	(2,162		)
Other income, net ⁽⁹⁾	(475		)	(78		)
Income tax expense	939			1,787
Loss attributable to noncontrolling interest	287			1,619
Total Adjusted EBITDA	$	(13,929	)	$	(14,154	)

Mountain Adjusted EBITDA ⁽⁸⁾	$	(18,073	)	$	(20,787	)
Adventure Adjusted EBITDA ⁽¹⁰⁾	2,145			4,860
Real Estate Adjusted EBITDA⁽¹¹⁾	1,999			1,773
Total Adjusted EBITDA	$	(13,929	)	$	(14,154	)


(1)	Lift revenue outside of the ski season is derived primarily from mountain biking and sightseeing lift products.


(2)	Ski School revenue outside of the ski season is derived primarily from mountain bike instruction at various resorts.


(3)	Legacy, non-core and other revenue represents legacy and other non-core operations that are not reviewed regularly by the CODM to assess performance and make decisions regarding the allocation of resources. It includes legacy real estate asset sales, divested non-core operations, and non-core retail revenue.

(4)

Legacy and other non-core expenses, net represents revenue and expenses of legacy and other non-core operations that are not reviewed regularly by the CODM to assess performance and make decisions regarding the allocation of resources. Revenue and expenses related to legacy and other non-core operations include retail operations not located at the Company’s properties and legacy litigation consisting of claims for damages related to alleged construction defects, purported disclosure violations in real estate marketing sales and documents, and allegations that the Company failed to construct planned amenities.


(5)	Includes costs related to non-cash compensation, reduction in workforce severance, lease payments pursuant to the lease at Winter Park and other expenses.


(6)	Includes interest income unrelated to IRCG financing activities.


(7)	Represents the losses from equity method investments, including: Chateau M.T. Inc., Mammoth Hospitality Management L.L.C., and the Mammoth family of resorts.


(8)	Includes the Company’s pro rata share of Adjusted EBITDA from its equity method investments in Mammoth Hospitality Management L.L.C. and Chateau M.T. Inc. The pro rata share of Adjusted EBITDA represents the Company’s share of Adjusted EBITDA from these equity method investments based on the Company's economic ownership percentages.


(9)	Includes foreign currency transaction gains (losses), litigation settlement gains (losses), acquisition-related expenses, and other expenses.


(10)	Adventure segment Adjusted EBITDA excludes Adjusted EBITDA attributable to noncontrolling interest.


(11)	Real Estate segment Adjusted EBITDA includes interest income earned from receivables related to the IRCG operations until the Disposition Date, in the amount of $0.9 million for the three months ended September 30, 2015.

Capital Expenditures

The following table presents capital expenditures for each segment, reconciled to consolidated amounts for each of the three months ended September 30, 2016 and 2015 (in thousands):


	Three Months Ended September 30,
	2016		2015
Capital expenditures:
Mountain	$	5,808	$	7,630
Adventure	3,385		1,345
Real Estate	117		123
Total segment capital expenditures	9,310		9,098
Corporate and other	1,038		691
Total capital expenditures	$	10,348	$	9,789

Geographic Data

The Company’s revenue by geographic region for each of the three months ended September 30, 2016 and 2015 consisted of the following (in thousands):


	Three Months Ended September 30,
	2016		2015
Revenue:
United States	$	37,765	$	39,021
Canada	42,714		47,183
Total revenue	$	80,479	$	86,204