Segment information

As a result of our business combination with the Sagicor Parties, we evaluated and modified the presentation of our reportable segments to reflect the management of our resorts after the incorporation of the Sagicor Assets. We divided our Caribbean Basin segment into separate Dominican Republic and Jamaica segments, which caused us to change from three to four reportable segments. The results for all comparative prior periods have been reclassified to conform to the current period presentation.

We consider each one of our 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 segments by geography: (i) Yucatán Peninsula, (ii) Pacific Coast, (iii) Dominican Republic and (iv) Jamaica. For the three and six months ended June 30, 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. We did not provide a reconciliation of reportable segments' assets to our consolidated assets as this information is not reviewed by the CODM to assess performance and make decisions regarding the allocation of resources.

The performance of our operating segments 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. We define Adjusted EBITDA as net income (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) other income (expense), net; (b) share-based compensation; (c) loss on extinguishment of debt; (d) transaction expenses; (e) severance expense; (f) other tax expense; (g) Jamaica delayed opening accrual reversal and (h) non-service cost components of net periodic pension cost (benefit).

There are limitations to using financial measures such as Adjusted 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 tables present segment net revenue, a reconciliation to gross revenue and segment Adjusted EBITDA and a reconciliation to net income (loss) ($ in thousands):



	Three Months Ended June 30,					Six Months Ended June 30,
	2018			2017		2018		2017
Revenue:
Yucatàn Peninsula	$	63,667		$	68,927	$	142,938	$	149,675
Pacific Coast	19,815			23,073		48,870		51,505
Dominican Republic	31,496			30,938		71,913		70,796
Jamaica	26,729			14,475		50,490		35,947
Segment net revenue ⁽¹⁾	141,707			137,413		314,211		307,923
Other	(9		)	2		343		2
Management fees	55			—		351		—
Cost reimbursements	78			—		122		—
Compulsory tips	3,741			3,183		7,392		6,740
Total gross revenue	$	145,572		$	140,598	$	322,419	$	314,665

________

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



	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Adjusted EBITDA:
Yucatàn Peninsula	$	25,726		$	29,176		$	65,330		$	72,246
Pacific Coast	6,550			9,212			20,458			23,484
Dominican Republic	9,586			8,364			28,013			25,803
Jamaica	8,089			2,268			18,733			9,769
Segment Adjusted EBITDA	49,951			49,020			132,534			131,302
Other corporate - unallocated	(8,689		)	(8,001		)	(17,009		)	(15,810		)
Management fees	55			—			351			—
Total consolidated Adjusted EBITDA	41,317			41,019			115,876			115,492
Less:
Other (income) expense, net	(378		)	239			1,446			1,313
Share-based compensation	2,104			960			3,890			960
Loss on extinguishment of debt	—			12,526			—			12,526
Transaction expenses	3,887			3,300			6,231			9,300
Severance expense	—			442			—			442
Other tax expense	427			247			858			423
Jamaica delayed opening accrual reversal	—			(111		)	(342		)	(111		)
Non-service cost components of net periodic pension benefit (cost)	298			(293		)	(157		)	(722		)
Add:
Interest expense	(5,632		)	(14,073		)	(27,514		)	(28,088		)
Depreciation and amortization	(15,882		)	(13,875		)	(31,571		)	(26,285		)
Net income (loss) before tax	13,465			(4,239		)	44,865			36,988
Income tax benefit (provision)	3,356			(6,291		)	(6,227		)	(19,879		)
Net income (loss)	$	16,821		$	(10,530	)	$	38,638		$	17,109