Segment information

6 Months Ended

Jun. 30, 2020

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 and six months ended June 30, 2020 and 2019, 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, and depreciation and amortization expense (“Adjusted EBITDA”), which should not be considered an alternative to net (loss) income 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) income, determined in accordance with U.S. GAAP, for the period presented, before interest expense, income tax benefit, and depreciation and amortization expense, further adjusted to exclude the following items: (a) impairment loss; (b) other income (expense); (c) pre-opening expenses; (d) share-based compensation; (e) other tax expense; (f) transaction expenses; (g) loss on sale of assets; and (h) 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 and six months ended June 30, 2020 and 2019 ($ in thousands):

	Three Months Ended June 30,					Six Months Ended June 30,
	2020			2019		2020		2019
Owned net revenue
Yucatán Peninsula	$	21		$	59,772	$	62,338	$	129,985
Pacific Coast	(74		)	22,087		21,081		47,657
Dominican Republic	11			22,566		35,607		55,641
Jamaica	564			50,464		52,000		109,611
Segment owned net revenue (1)	522			154,889		171,026		342,894
Other	20			14		35		16
Management fees	(18		)	551		627		1,485
Cost reimbursements	458			2,949		1,408		3,537
Compulsory tips	—			5,620		5,114		11,887
Total revenue	$	982		$	164,023	$	178,210	$	359,819

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⁽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) income for the three and six months ended June 30, 2020 and 2019 ($ in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Owned Resort EBITDA
Yucatán Peninsula	$	(8,004	)	$	21,151		$	16,931		$	53,310
Pacific Coast	(2,816		)	8,569			6,056			20,956
Dominican Republic	(4,881		)	5,043			2,908			18,506
Jamaica	(8,097		)	14,631			10,976			38,979
Segment Owned Resort EBITDA	(23,798		)	49,394			36,871			131,751
Other corporate	(7,606		)	(9,887		)	(18,577		)	(18,393		)
Management fees	(18		)	551			627			1,485
Total Adjusted EBITDA	(31,422		)	40,058			18,921			114,843
Interest expense	(20,916		)	(10,666		)	(41,871		)	(24,860		)
Depreciation and amortization	(22,400		)	(25,908		)	(47,359		)	(48,219		)
Impairment loss	(25,268		)	—			(41,441		)	—
Loss on sale of assets	(1,729		)	—			(1,729		)	—
Other income (expense)	4,853			364			947			(238		)
Pre-opening expenses	—			(202		)	—			(291		)
Share-based compensation	(2,719		)	(2,014		)	(5,942		)	(4,762		)
Other tax expense	(231		)	(443		)	(468		)	(802		)
Transaction expenses	(289		)	(1,273		)	(875		)	(3,240		)
Severance expense	(1,246		)	(133		)	(2,444		)	(133		)
Non-service cost components of net periodic pension (benefit) cost (1)	(738		)	249			(1,289		)	175
Net (loss) income before tax	(102,105		)	32			(123,550		)	32,473
Income tax benefit	14,647			1,008			13,536			11,555
Net (loss) income	$	(87,458	)	$	1,040		$	(110,014	)	$	44,028

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⁽¹⁾  Represents the non-service cost components of net periodic pension (benefit) cost recorded within other income (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 June 30, 2020 and December 31, 2019 ($ in thousands):

	As of June 30,			As of December 31,
	2020			2019
Segment property and equipment, gross
Yucatán Peninsula	$	864,815		$	865,900
Pacific Coast	287,850			288,358
Dominican Republic	672,769			667,120
Jamaica	405,322			499,569
Total segment property and equipment, gross	2,230,756			2,320,947
Other corporate	4,733			7,320
Accumulated depreciation	(430,247		)	(398,353		)
Total property and equipment, net	$	1,805,242		$	1,929,914

The following table presents segment capital expenditures and a reconciliation to total capital expenditures for the six months ended June 30, 2020 and 2019 ($ in thousands):

	Six Months Ended June 30,
	2020		2019
Segment capital expenditures
Yucatán Peninsula	$	2,348	$	10,055
Pacific Coast	230		395
Dominican Republic	4,286		79,515
Jamaica	1,809		2,507
Total segment capital expenditures (1)	8,673		92,472
Other corporate	331		5,379
Total capital expenditures (1)	$	9,004	$	97,851

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⁽¹⁾ 

Includes capital expenditures incurred, but not yet paid.