Segment Reporting

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

Our operating segments include: (a) REIT Advisory, which provides asset management and advisory services to other entities, (b) Remington, which provides hotel management services, (c) Premier, which provides comprehensive and cost-effective design, development, architectural, and project management services, (d) JSAV, which provides event technology and creative communications solutions services, (e) OpenKey, a hospitality focused mobile key platform that provides a universal smartphone app for keyless entry into hotel guest rooms, (f) RED, a provider of watersports activities and other travel and transportation services, (g) Marietta, which holds the leasehold rights to a single hotel and convention center property in Marietta, Georgia, (h) Pure Wellness, which provides hypoallergenic premium rooms in the hospitality industry, and (i) Lismore and REA Holdings, which provide debt placement and related services, real estate advisory services and brokerage services. For 2020, OpenKey, RED, Marietta, Pure Wellness and Lismore and REA Holdings do not meet aggregation criteria or the quantitative thresholds to individually qualify as reportable segments. However, we have elected to disclose OpenKey as a reportable segment. Accordingly, we have five reportable segments: REIT Advisory, Remington, Premier, JSAV and OpenKey. We combine the operating results of RED, Marietta, Pure Wellness and Lismore and REA Holdings into an “all other” sixth reportable segment, which we refer to as “Corporate and Other.” See footnote 3 for details of our segments’ material revenue generating activities.

Our chief operating decision maker (“CODM”) uses multiple measures of segment profitability for assessing performance of our business. Our reported measure of segment profitability is net income, although the CODM also focuses on adjusted EBITDA and adjusted net income, which exclude certain gains, losses and charges, to assess performance and allocate resources. Our CODM currently reviews assets at the corporate (consolidated) level and does not currently review segment assets to make key decisions on resource allocations.

Certain information concerning our segments for the three and six months June 30, 2020, and 2019 are presented in the following tables (in thousands). Consolidated subsidiaries are reflected as of their respective acquisition dates or as of the date we were determined to be the primary beneficiary of variable interest entities.

	Three Months Ended June 30, 2020
	REIT Advisory			Remington			Premier			JSAV			OpenKey			Corporate and Other			Ashford Inc. Consolidated
REVENUE
Advisory services	$	11,430		$	—		$	—		$	—		$	—		$	—		$	11,430
Hotel management	—			3,691			—			—			—			—			3,691
Project management fees	—			—			2,052			—			—			—			2,052
Audio visual	—			—			—			970			—			—			970
Other	83			—			—			—			292			2,962			3,337
Cost reimbursement revenue (1)	4,037			18,768			692			—			—			621			24,118
Total revenues	15,550			22,459			2,744			970			292			3,583			45,598
EXPENSES
Depreciation and amortization	2,437			3,534			3,157			488			4			489			10,109
Impairment	—			—			—			—			—			—			—
Other operating expenses (2)	—			3,357			1,823			5,059			734			11,600			22,573
Reimbursed expenses (1)	3,974			18,768			692			—			—			621			24,055
Total operating expenses	6,411			25,659			5,672			5,547			738			12,710			56,737
OPERATING INCOME (LOSS)	9,139			(3,200		)	(2,928		)	(4,577		)	(446		)	(9,127		)	(11,139		)
Equity in earnings (loss) of unconsolidated entities	—			—			—			—			—			17			17
Interest expense	—			—			—			(184		)	—			(1,062		)	(1,246		)
Amortization of loan costs	—			—			—			(14		)	—			(76		)	(90		)
Interest income	—			—			—			—			—			1			1
Realized gain (loss) on investments	—			(11		)	—			—			—			—			(11		)
Other income (expense)	—			14			—			141			(16		)	(73		)	66
INCOME (LOSS) BEFORE INCOME TAXES	9,139			(3,197		)	(2,928		)	(4,634		)	(462		)	(10,320		)	(12,402		)
Income tax (expense) benefit	(2,170		)	525			559			1,171			—			3,399			3,484
NET INCOME (LOSS)	$	6,969		$	(2,672	)	$	(2,369	)	$	(3,463	)	$	(462	)	$	(6,921	)	$	(8,918	)

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⁽¹⁾  Our segments are reported net of eliminations upon consolidation. Approximately $2.4 million of hotel management revenue, cost reimbursement revenue and reimbursed expenses were eliminated in consolidation primarily for overhead expenses reimbursed to Remington including rent, payroll, office supplies, travel and accounting.

⁽²⁾  Other operating expenses includes salaries and benefits, costs of revenues for project management, cost of revenues for audio visual, general and administrative expenses and other expenses.

	Six Months Ended June 30, 2020
	REIT Advisory			Remington			Premier			JSAV			OpenKey			Corporate and Other			Ashford Inc. Consolidated
REVENUE
Advisory services	$	23,266		$	—		$	—		$	—		$	—		$	—		$	23,266
Hotel management	—			9,815			—			—			—			—			9,815
Project management fees	—			—			5,990			—			—			—			5,990
Audio visual	—			—			—			30,644			—			—			30,644
Other	140			—			—			—			814			9,074			10,028
Cost reimbursement revenue (1)	13,101			83,100			1,906			—			—			1,590			99,697
Total revenues	36,507			92,915			7,896			30,644			814			10,664			179,440
EXPENSES
Depreciation and amortization	4,876			6,911			6,314			992			10			975			20,078
Impairment	—			126,548			49,524			2,141			—			—			178,213
Other operating expenses (2)	—			7,652			4,887			31,445			1,722			25,467			71,173
Reimbursed expenses (1)	12,970			83,100			1,906			—			—			1,590			99,566
Total operating expenses	17,846			224,211			62,631			34,578			1,732			28,032			369,030
OPERATING INCOME (LOSS)	18,661			(131,296		)	(54,735		)	(3,934		)	(918		)	(17,368		)	(189,590		)
Equity in earnings (loss) of unconsolidated entities	—			—			—			—			—			253			253
Interest expense	—			—			—			(441		)	—			(1,981		)	(2,422		)
Amortization of loan costs	—			—			—			(28		)	—			(128		)	(156		)
Interest income	—			—			—			—			—			29			29
Realized gain (loss) on investments	—			(386		)	—			—			—			—			(386		)
Other income (expense)	—			26			—			(314		)	(6		)	(161		)	(455		)
INCOME (LOSS) BEFORE INCOME TAXES	18,661			(131,656		)	(54,735		)	(4,717		)	(924		)	(19,356		)	(192,727		)
Income tax (expense) benefit	(4,423		)	1,714			727			1,037			—			6,514			5,569
NET INCOME (LOSS)	$	14,238		$	(129,942	)	$	(54,008	)	$	(3,680	)	$	(924	)	$	(12,842	)	$	(187,158	)

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⁽¹⁾  Our segments are reported net of eliminations upon consolidation. Approximately $5.8 million of hotel management revenue, cost reimbursement revenue and reimbursed expenses were eliminated in consolidation primarily for overhead expenses reimbursed to Remington including rent, payroll, office supplies, travel and accounting.

⁽²⁾  Other operating expenses includes salaries and benefits, costs of revenues for project management, cost of revenues for audio visual, general and administrative expenses and other expenses.

	Three Months Ended June 30, 2019
	REIT Advisory			Premier			JSAV			OpenKey			Corporate and Other			Ashford Inc. Consolidated
REVENUE
Advisory services	$	11,489		$	—		$	—		$	—		$	—		$	11,489
Hotel management	—			—			—			—			—			—
Project management fees	—			6,430			—			—			—			6,430
Audio visual	—			—			30,127			—			—			30,127
Other	1,085			—			—			194			2,804			4,083
Cost reimbursement revenue	10,067			1,270			—			—			—			11,337
Total revenues	22,641			7,700			30,127			194			2,804			63,466
EXPENSES
Depreciation and amortization	1,151			2,738			503			7			116			4,515
Other operating expenses (1)	—			3,048			30,296			768			12,665			46,777
Reimbursed expenses	9,961			1,270			—			—			—			11,231
Total operating expenses	11,112			7,056			30,799			775			12,781			62,523
OPERATING INCOME (LOSS)	11,529			644			(672		)	(581		)	(9,977		)	943
Equity in earnings (loss) of unconsolidated entities	—			—			—			—			(298		)	(298		)
Interest expense	—			—			(356		)	—			(89		)	(445		)
Amortization of loan costs	—			—			(14		)	(6		)	(50		)	(70		)
Interest income	—			—			—			—			9			9
Other income (expense)	—			—			(50		)	6			2			(42		)
INCOME (LOSS) BEFORE INCOME TAXES	11,529			644			(1,092		)	(581		)	(10,403		)	97
Income tax (expense) benefit	(2,550		)	(342		)	319			—			2,147			(426		)
NET INCOME (LOSS)	$	8,979		$	302		$	(773	)	$	(581	)	$	(8,256	)	$	(329	)

________

⁽¹⁾  Other operating expenses includes salaries and benefits, costs of revenues for project management, cost of revenues for audio visual, general and administrative expenses and other expenses.

	Six Months Ended June 30, 2019
	REIT Advisory			Premier			JSAV			OpenKey			Corporate and Other			Ashford Inc. Consolidated
REVENUE
Advisory services	$	22,409		$	—		$	—		$	—		$	—		$	22,409
Project management fees	—			12,872			—			—			—			12,872
Audio visual	—			—			61,102			—			—			61,102
Other	2,156			—			—			451			6,486			9,093
Cost reimbursement revenue	18,692			2,618			—			—			—			21,310
Total revenues	43,257			15,490			61,102			451			6,486			126,786
EXPENSES
Depreciation and amortization	1,915			5,476			958			14			260			8,623
Other operating expenses (1)	—			5,750			58,304			1,718			27,924			93,696
Reimbursed expenses	18,364			2,618			—			—			—			20,982
Total operating expenses	20,279			13,844			59,262			1,732			28,184			123,301
OPERATING INCOME (LOSS)	22,978			1,646			1,840			(1,281		)	(21,698		)	3,485
Equity in earnings (loss) of unconsolidated entities	—			—			—			—			(573		)	(573		)
Interest expense	—			—			(570		)	—			(172		)	(742		)
Amortization of loan costs	—			—			(27		)	(12		)	(100		)	(139		)
Interest income	—			—			—			—			29			29
Other income (expense)	—			—			(156		)	11			50			(95		)
INCOME (LOSS) BEFORE INCOME TAXES	22,978			1,646			1,087			(1,282		)	(22,464		)	1,965
Income tax (expense) benefit	(5,039		)	(768		)	(568		)	—			4,649			(1,726		)
NET INCOME (LOSS)	$	17,939		$	878		$	519		$	(1,282	)	$	(17,815	)	$	239

________

⁽¹⁾ 

Other operating expenses includes salaries and benefits, costs of revenues for project management, cost of revenues for audio visual, general and administrative expenses and other expenses.