UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

_______________________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For quarterly period ended ~~September~~June 30, ~~2020~~2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

COMMISSION FILE NO. 1-38012

Playa Hotels & Resorts N.V.

(Exact name of registrant as specified in its charter)




The	Netherlands	98-1346104
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification Number)

~~Prins Bernhardplein 200~~Nieuwezijds Voorburgwal 104

~~1097 JB~~1012 SG

Amsterdam,

the

Netherlands

Not Applicable

(Address of Principal Executive Offices)

(Zip Code)

+31 ~~20 571 12 02~~6 82 55 84 30

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Ordinary Shares, €0.10 par value	PLYA	~~NASDAQ~~The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past ninety (90) days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☒☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of ~~October 30, 2020,~~July 31, 2021, there were ~~134,496,340~~164,218,341 shares of the registrant’s ordinary shares, €0.10 par value, outstanding.


Playa Hotels & Resorts N.V. TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
		Page
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of ~~Sept~~ June ~~ember 30~~ 3 0 , ~~2020~~2021 and December 31, ~~2019~~2020	1
	Condensed Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June ~~30,~~3 0 , 2021 and 2020 ~~and 2019~~	2
	Condensed Consolidated Statements of Comprehensive Loss for the three and ~~nine~~six months ended ~~Sept~~June 30 ~~ember~~ ~~30,~~, 2021 and 2020 ~~and 2019~~	3
	Condensed Consolidated Statements of Shareholders' Equity for the three and ~~nine~~six months ended ~~September~~June 30 ~~30,~~, 2021 and 2020 ~~and 2019~~	4
	Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020	6
	Notes to the Condensed Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2825
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6155
Item 4.	Controls and Procedures	6256
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	6357
Item 1A.	Risk Factors	6357
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	6457
Item 3.	Defaults Upon Senior Securities	6457
Item 4.	Mine Safety Disclosures	6457
Item 5.	Other Information	6457
Item 6.	Exhibits	6558

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Playa Hotels & Resorts N.V.

Condensed Consolidated Balance Sheets

($ in thousands, except share data)

(unaudited)


		As of September 30,		As of December 31,			As of June 30,		As of December 31,
		2020		2019			2021		2020
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	195,516	$	20,931	Cash and cash equivalents	$	237,715	$	146,919
Restricted cash	Restricted cash	27,586		0		Restricted cash	25,647		25,941
Trade and other receivables, net	Trade and other receivables, net	20,871		71,250		Trade and other receivables, net	39,695		25,433
Accounts receivable from related parties	Accounts receivable from related parties	2,686		5,401		Accounts receivable from related parties	3,653		3,726
Inventories	Inventories	13,319		16,649		Inventories	14,362		13,813
Prepayments and other assets	Prepayments and other assets	44,486		44,691		Prepayments and other assets	39,391		47,638
Property and equipment, net	Property and equipment, net	1,789,900		1,929,914		Property and equipment, net	1,612,774		1,727,383
Assets held for sale						Assets held for sale	0		34,472
Goodwill, net	Goodwill, net	63,056		78,339		Goodwill, net	61,654		61,654
Other intangible assets	Other intangible assets	8,528		8,408		Other intangible assets	8,040		8,556
Deferred tax assets	Deferred tax assets	1,912		21,381		Deferred tax assets	0		2,130
Total assets	Total assets	$	2,167,860	$	2,196,964	Total assets	$	2,042,931	$	2,097,665
LIABILITIES AND SHAREHOLDERS' EQUITY	LIABILITIES AND SHAREHOLDERS' EQUITY					LIABILITIES AND SHAREHOLDERS' EQUITY
Trade and other payables	Trade and other payables	$	114,137	$	181,603	Trade and other payables	$	138,534	$	123,410
Payables to related parties	Payables to related parties	9,283		7,620		Payables to related parties	6,957		8,073
Income tax payable	Income tax payable	2,386		3,252		Income tax payable	124		348
Debt	Debt	1,252,779		1,040,658		Debt	945,409		1,251,267
Related party debt						Related party debt	193,753		0
Derivative financial instruments	Derivative financial instruments	50,832		31,932		Derivative financial instruments	35,924		46,340
Other liabilities	Other liabilities	29,521		24,307		Other liabilities	28,971		29,768

Deferred tax liabilities	Deferred tax liabilities	71,985		97,941		Deferred tax liabilities	55,887		70,323
Total liabilities	Total liabilities	1,530,923		1,387,313		Total liabilities	1,405,559		1,529,529
Commitments and contingencies (see Note 7)	Commitments and contingencies (see Note 7)					Commitments and contingencies (see Note 7)	0		0
Shareholders' equity	Shareholders' equity					Shareholders' equity
Ordinary shares (par value €0.10; 500,000,000 shares authorized, 136,695,136 shares issued and 134,496,340 shares outstanding as of September 30, 2020, and 130,967,671 shares issued and 129,121,576 shares outstanding as of December 31, 2019)		14,862		14,215
Treasury shares (at cost, 2,198,796 shares as of September 30, 2020 and 1,846,095 shares as of December 31, 2019)		(16,642)		(14,088)
Ordinary shares (par value €0.10; 500,000,000 shares authorized, 166,417,879 shares issued and 164,209,875 shares outstanding as of June 30, 2021 and 136,770,086 shares issued and 134,571,290 shares outstanding as of December 31, 2020)						Ordinary shares (par value €0.10; 500,000,000 shares authorized, 166,417,879 shares issued and 164,209,875 shares outstanding as of June 30, 2021 and 136,770,086 shares issued and 134,571,290 shares outstanding as of December 31, 2020)	18,492		14,871
Treasury shares (at cost, 2,208,004 shares as of June 30, 2021 and 2,198,796 shares as of December 31, 2020)						Treasury shares (at cost, 2,208,004 shares as of June 30, 2021 and 2,198,796 shares as of December 31, 2020)	(16,697)		(16,642)
Paid-in capital	Paid-in capital	1,027,866		1,001,088		Paid-in capital	1,170,872		1,030,148
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(33,609)		(24,642)		Accumulated other comprehensive loss	(25,082)		(30,949)
Accumulated deficit	Accumulated deficit	(355,540)		(166,922)		Accumulated deficit	(510,213)		(429,292)
Total shareholders' equity	Total shareholders' equity	636,937		809,651		Total shareholders' equity	637,372		568,136
Total liabilities and shareholders' equity	Total liabilities and shareholders' equity	$	2,167,860	$	2,196,964	Total liabilities and shareholders' equity	$	2,042,931	$	2,097,665

The accompanying Notes form an integral part of the Condensed Consolidated Financial Statements.

Playa Hotels & Resorts N.V.

Condensed Consolidated Statements of Operations

($ in thousands, except share data)

(unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Revenue	Revenue									Revenue
Package	Package	$	22,705	$	111,091	$	176,062	$	416,978	Package	$	104,780	$	302	$	168,674	$	153,357
Non-package	Non-package	5,518		20,065		28,336		68,975		Non-package	22,602		240		35,597		22,818
Management fees	Management fees	8		83		635		1,568		Management fees	452		(18)		796		627
Cost reimbursements	Cost reimbursements	505		1,586		1,913		5,123		Cost reimbursements	969		458		1,482		1,408
Total revenue	Total revenue	28,736		132,825		206,946		492,644		Total revenue	128,803		982		206,549		178,210
Direct and selling, general and administrative expenses	Direct and selling, general and administrative expenses									Direct and selling, general and administrative expenses
Direct	Direct	35,679		87,252		153,957		273,577		Direct	79,534		20,380		139,755		118,278
Selling, general and administrative	Selling, general and administrative	22,943		30,771		76,514		94,647		Selling, general and administrative	28,550		19,739		53,218		53,571
Pre-opening		0		257		0		548
Depreciation and amortization	Depreciation and amortization	22,518		29,417		69,877		77,636		Depreciation and amortization	20,017		22,400		40,900		47,359
Reimbursed costs	Reimbursed costs	505		1,586		1,913		5,123		Reimbursed costs	969		458		1,482		1,408
Impairment loss	Impairment loss	867		0		42,308		0		Impairment loss	0		25,268		24,011		41,441
Loss on sale of assets	Loss on sale of assets	0		0		1,729		0		Loss on sale of assets	375		1,729		648		1,729
Gain on insurance proceeds	Gain on insurance proceeds	(220)		0		(3,170)		0		Gain on insurance proceeds	0		(2,950)		0		(2,950)
Direct and selling, general and administrative expenses	Direct and selling, general and administrative expenses	82,292		149,283		343,128		451,531		Direct and selling, general and administrative expenses	129,445		87,024		260,014		260,836
Operating (loss) income		(53,556)		(16,458)		(136,182)		41,113
Operating loss										Operating loss	(642)		(86,042)		(53,465)		(82,626)
Interest expense	Interest expense	(19,973)		(9,936)		(61,844)		(34,796)		Interest expense	(18,950)		(20,916)		(37,117)		(41,871)
Other income (expense)		224		(2,537)		1,171		(2,775)
Net (loss) income before tax		(73,305)		(28,931)		(196,855)		3,542
Income tax (provision) benefit		(5,299)		(1,530)		8,237		10,025
Net (loss) income		$	(78,604)	$	(30,461)	$	(188,618)	$	13,567
Other (expense) income										Other (expense) income	(628)		4,853		(1,334)		947
Net loss before tax										Net loss before tax	(20,220)		(102,105)		(91,916)		(123,550)
Income tax benefit										Income tax benefit	12,452		14,647		14,403		13,536
Net loss										Net loss	$	(7,768)	$	(87,458)	$	(77,513)	$	(110,014)

Earnings per share	Earnings per share									Earnings per share
(Losses) earnings per share - Basic		$	(0.58)	$	(0.23)	$	(1.44)	$	0.10
(Losses) earnings per share - Diluted		$	(0.58)	$	(0.23)	$	(1.44)	$	0.10
Losses per share - Basic										Losses per share - Basic	$	(0.05)	$	(0.67)	$	(0.48)	$	(0.85)
Losses per share - Diluted										Losses per share - Diluted	$	(0.05)	$	(0.67)	$	(0.48)	$	(0.85)
Weighted average number of shares outstanding during the period - Basic	Weighted average number of shares outstanding during the period - Basic	134,493,864		129,841,264		131,426,886		130,265,112		Weighted average number of shares outstanding during the period - Basic	164,119,693		130,466,383		162,482,673		129,876,545
Weighted average number of shares outstanding during the period - Diluted	Weighted average number of shares outstanding during the period - Diluted	134,493,864		129,841,264		131,426,886		130,601,247		Weighted average number of shares outstanding during the period - Diluted	164,119,693		130,466,383		162,482,673		129,876,545

The accompanying Notes form an integral part of the Condensed Consolidated Financial Statements.

Playa Hotels & Resorts N.V.

Condensed Consolidated Statements of Comprehensive Loss

($ in thousands)

(unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Net (loss) income		$	(78,604)	$	(30,461)	$	(188,618)	$	13,567
Net loss										Net loss	$	(7,768)	$	(87,458)	$	(77,513)	$	(110,014)
Other comprehensive income (loss), net of taxes	Other comprehensive income (loss), net of taxes									Other comprehensive income (loss), net of taxes
Unrealized gain (loss) on interest rate swaps	Unrealized gain (loss) on interest rate swaps	2,958		(4,588)		(9,164)		(25,230)		Unrealized gain (loss) on interest rate swaps	2,926		2,926		5,820		(12,122)
Pension obligation gain (loss)		100		(6)		197		(182)
Release of foreign currency translation reserve related to sale of Capri Resort (see Note 4)										Release of foreign currency translation reserve related to sale of Capri Resort (see Note 4)	140		0		140		0
Pension obligation (loss) gain										Pension obligation (loss) gain	(82)		152		(93)		97
Total other comprehensive income (loss)	Total other comprehensive income (loss)	3,058		(4,594)		(8,967)		(25,412)		Total other comprehensive income (loss)	2,984		3,078		5,867		(12,025)
Comprehensive loss	Comprehensive loss	$	(75,546)	$	(35,055)	$	(197,585)	$	(11,845)	Comprehensive loss	$	(4,784)	$	(84,380)	$	(71,646)	$	(122,039)

The accompanying Notes form an integral part of the Condensed Consolidated Financial Statements.

Playa Hotels & Resorts N.V.

Condensed Consolidated Statements of Shareholders' Equity

($ in thousands, except share data)

(unaudited)

Ordinary Shares Treasury Shares Paid-In Capital Accumulated Other
Comprehensive Loss Accumulated Deficit Total
Shares Amount Shares Amount
Balance at December 31, 2018 130,440,126 $ 14,161 54,608 $ (394) $ 992,297 $ (3,658) $ (162,565) $ 839,841
Net income — — — — — — 42,988 42,988
Other comprehensive loss — — — — — (6,009) — (6,009)
Share-based compensation 249,044 29 — — 2,719 — — 2,748
Repurchase of ordinary shares (198,179) — 198,179 (1,522) — — — (1,522)
Balance at March 31, 2019 130,490,991 $ 14,190 252,787 $ (1,916) $ 995,016 $ (9,667) $ (119,577) $ 878,046
Net income — — — — — — 1,040 1,040
Other comprehensive loss — — — — — (14,809) — (14,809)
Share-based compensation 141,491 15 — — 1,999 — — 2,014
Repurchase of ordinary shares (304,587) — 304,587 (2,400) — — — (2,400)
Balance at June 30, 2019 130,327,895 $ 14,205 557,374 $ (4,316) $ 997,015 $ (24,476) $ (118,537) $ 863,891
Net loss — — — — — — (30,461) (30,461)
Other comprehensive loss — — — — — (4,594) — (4,594)
Share-based compensation 9,561 1 — — 1,849 — — 1,850
Repurchase of ordinary shares (846,418) — 846,418 (6,385) — — — (6,385)
Balance at September 30, 2019 129,491,038 $ 14,206 1,403,792 $ (10,701) $ 998,864 $ (29,070) $ (148,998) $ 824,301

~~The accompanying Notes form an integral part of the Condensed Consolidated Financial Statements.~~


	Ordinary Shares			Treasury Shares			Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2019	129,121,576	$	14,215	1,846,095	$	(14,088)	$	1,001,088	$	(24,642)	$	(166,922)	$	809,651
Net loss	—	—		—	—		—		—		(22,556)		(22,556)
Other comprehensive loss	—	—		—	—		—		(15,103)		—		(15,103)
Share-based compensation, net of tax withholdings	493,226	55		4,500	(34)		3,168		—		—		3,189
Repurchase of ordinary shares	(340,109)	—		340,109	(2,500)		—		—		—		(2,500)
Balance at March 31, 2020	129,274,693	$	14,270	2,190,704	$	(16,622)	$	1,004,256	$	(39,745)	$	(189,478)	$	772,681
Net loss	—	—		—	—		—		—		(87,458)		(87,458)
Other comprehensive income	—	—		—	—		—		3,078		—		3,078
Share-based compensation, net of tax withholdings	332,735	38		8,092	(20)		2,681		—		—		2,699
Equity issuance, net	4,878,049	553		—	—		19,005		—		—		19,558
Balance at June 30, 2020	134,485,477	$	14,861	2,198,796	$	(16,642)	$	1,025,942	$	(36,667)	$	(276,936)	$	710,558

Playa Hotels & Resorts N.V.

Condensed Consolidated Statements of Shareholders' Equity (continued)

($ in thousands, except share data)

(unaudited)

Ordinary Shares Treasury Shares Paid-In Capital Accumulated Other
Comprehensive Loss Accumulated Deficit Total
Shares Amount Shares Amount
Balance at December 31, 2019 129,121,576 $ 14,215 1,846,095 $ (14,088) $ 1,001,088 $ (24,642) $ (166,922) $ 809,651
Net loss — — — — — — (22,556) (22,556)
Other comprehensive loss — — — — — (15,103) — (15,103)
Share-based compensation, net of tax withholdings 493,226 55 4,500 (34) 3,168 — — 3,189
Repurchase of ordinary shares (340,109) — 340,109 (2,500) — — — (2,500)
Balance at March 31, 2020 129,274,693 $ 14,270 2,190,704 $ (16,622) $ 1,004,256 $ (39,745) $ (189,478) $ 772,681
Net loss — — — — — — (87,458) (87,458)
Other comprehensive income — — — — — 3,078 — 3,078
Share-based compensation, net of tax withholdings 332,735 38 8,092 (20) 2,681 — — 2,699
Equity issuance, net (see Note 8) 4,878,049 553 — — 19,005 — — 19,558
Balance at June 30, 2020 134,485,477 $ 14,861 2,198,796 $ (16,642) $ 1,025,942 $ (36,667) $ (276,936) $ 710,558
Net loss — — — — — — (78,604) (78,604)
Other comprehensive income — — — — — 3,058 — 3,058
Share-based compensation 10,863 1 — — 1,924 — — 1,925
Balance at September 30, 2020 134,496,340 $ 14,862 2,198,796 $ (16,642) $ 1,027,866 $ (33,609) $ (355,540) $ 636,937


	Ordinary Shares			Treasury Shares			Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2020	134,571,290	$	14,871	2,198,796	$	(16,642)	$	1,030,148	$	(30,949)	$	(429,292)	$	568,136
Cumulative effect of accounting changes, net of tax	—	—		—	—		—		—		(3,408)		(3,408)
Balance at January 1, 2021	134,571,290	$	14,871	2,198,796	$	(16,642)	$	1,030,148	$	(30,949)	$	(432,700)	$	564,728
Net loss	—	—		—	—		—		—		(69,745)		(69,745)
Other comprehensive income	—	—		—	—		—		2,883		—		2,883
Share-based compensation, net of tax withholdings	708,285	87		9,208	(55)		3,092		—		—		3,124
Equity issuance, net (see Note 8)	28,750,000	3,512		—	—		134,204		—		—		137,716
Balance at March 31, 2021	164,029,575	$	18,470	2,208,004	$	(16,697)	$	1,167,444	$	(28,066)	$	(502,445)	$	638,706
Net loss	—	—		—	—		—		—		(7,768)		(7,768)
Other comprehensive income	—	—		—	—		—		2,984		—		2,984
Share-based compensation	180,300	22		—	—		3,428		—		—		3,450
Balance at June 30, 2021	164,209,875	$	18,492	2,208,004	$	(16,697)	$	1,170,872	$	(25,082)	$	(510,213)	$	637,372

The accompanying Notes form an integral part of the Condensed Consolidated Financial Statements.

Playa Hotels & Resorts N.V.

Condensed Consolidated Statements of Cash Flows

($ in thousands)

(unaudited)


		Nine Months Ended September 30,					Six Months Ended June 30,
		2020		2019			2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES					CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income		$	(188,618)	$	13,567
Adjustments to reconcile net income to net cash provided by operating activities
Net loss						Net loss	$	(77,513)	$	(110,014)
Adjustments to reconcile net loss to net cash provided by operating activities						Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization	Depreciation and amortization	69,877		77,636		Depreciation and amortization	40,900		47,359
Amortization of debt discount and issuance costs	Amortization of debt discount and issuance costs	1,793		1,026		Amortization of debt discount and issuance costs	2,036		679
Share-based compensation	Share-based compensation	7,867		6,612		Share-based compensation	6,629		5,942
Loss on derivative financial instruments		9,737		199
(Gain) loss on derivative financial instruments						(Gain) loss on derivative financial instruments	(4,596)		11,423
Impairment loss	Impairment loss	42,308		0		Impairment loss	24,011		41,441
Deferred income taxes	Deferred income taxes	(8,243)		(9,786)		Deferred income taxes	(15,716)		(12,573)
Loss on sale of assets	Loss on sale of assets	1,729		0		Loss on sale of assets	648		1,729
Amortization of key money	Amortization of key money	(673)		(187)		Amortization of key money	(198)		(439)
Bad debt expense						Bad debt expense	(47)		(79)
Other	Other	1,718		2,018		Other	668		(75)
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Trade and other receivables, net	Trade and other receivables, net	48,328		15,911		Trade and other receivables, net	(13,924)		44,462
Accounts receivable from related parties	Accounts receivable from related parties	2,715		2,715		Accounts receivable from related parties	73		2,855
Inventories	Inventories	1,870		320		Inventories	(637)		950
Prepayments and other assets	Prepayments and other assets	1,508		(10,418)		Prepayments and other assets	7,711		470
Trade and other payables	Trade and other payables	(51,663)		(12,882)		Trade and other payables	19,410		(61,207)
Payables to related parties	Payables to related parties	1,663		3,548		Payables to related parties	(2,442)		1,640
Income tax payable	Income tax payable	(866)		(1,578)		Income tax payable	(224)		(1,439)
Other liabilities	Other liabilities	(1,602)		4,349		Other liabilities	(367)		(1,520)
Net cash (used in) provided by operating activities		(60,552)		93,050
Net cash used in operating activities						Net cash used in operating activities	(13,578)		(28,396)
INVESTING ACTIVITIES	INVESTING ACTIVITIES					INVESTING ACTIVITIES
Capital expenditures	Capital expenditures	(28,817)		(165,484)		Capital expenditures	(8,449)		(7,414)
Receipt of key money	Receipt of key money	8,500		2,500		Receipt of key money	0		8,500
Purchase of intangibles	Purchase of intangibles	(466)		(2,485)		Purchase of intangibles	(55)		(349)
Proceeds from the sale of assets, net	Proceeds from the sale of assets, net	58,507		104		Proceeds from the sale of assets, net	89,064		58,125
Property damage insurance proceeds		0		2,009
Net cash provided by (used in) investing activities		37,724		(163,356)
Net cash provided by investing activities						Net cash provided by investing activities	80,560		58,862
FINANCING ACTIVITIES	FINANCING ACTIVITIES					FINANCING ACTIVITIES
Proceeds from debt issuances, net of discount	Proceeds from debt issuances, net of discount	199,600		0		Proceeds from debt issuances, net of discount	0		199,600
Issuance costs of debt	Issuance costs of debt	(8,677)		0		Issuance costs of debt	0		(8,677)
Proceeds from ordinary shares, net of issuance costs	Proceeds from ordinary shares, net of issuance costs	19,558		0		Proceeds from ordinary shares, net of issuance costs	137,716		19,558
Repayments of debt	Repayments of debt	(7,575)		(7,575)		Repayments of debt	(29,429)		(5,050)
Proceeds from borrowings on revolving credit facility	Proceeds from borrowings on revolving credit facility	40,000		0		Proceeds from borrowings on revolving credit facility	0		40,000
Repayments of borrowings on revolving credit facility	Repayments of borrowings on revolving credit facility	(15,333)		0		Repayments of borrowings on revolving credit facility	(84,667)		(15,333)
Repurchase of ordinary shares	Repurchase of ordinary shares	(2,500)		(10,307)		Repurchase of ordinary shares	0		(2,500)
Repurchase of ordinary shares for tax withholdings	Repurchase of ordinary shares for tax withholdings	(54)		0		Repurchase of ordinary shares for tax withholdings	(55)		(54)
Principal payments on financing lease obligations		(20)		0
Net cash provided by (used in) financing activities		224,999		(17,882)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		202,171		(88,188)
CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD		$	20,931	$	116,353
CASH AND CASH EQUIVALENTS, END OF THE PERIOD		$	223,102	$	28,165
Principal payments on lease obligations						Principal payments on lease obligations	(45)		0
Net cash provided by financing activities						Net cash provided by financing activities	23,520		227,544
INCREASE IN CASH AND CASH EQUIVALENTS						INCREASE IN CASH AND CASH EQUIVALENTS	90,502		258,010
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF THE PERIOD						CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF THE PERIOD	$	172,860	$	20,931
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF THE PERIOD						CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF THE PERIOD	$	263,362	$	278,941
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH	RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH					RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents	Cash and cash equivalents	$	195,516	$	28,165	Cash and cash equivalents	$	237,715	$	251,022
Restricted cash	Restricted cash	27,586		0		Restricted cash	25,647		27,919
TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH	TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH	$	223,102	$	28,165	TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH	$	263,362	$	278,941

The accompanying Notes form an integral part of the Condensed Consolidated Financial Statements.

Playa Hotels & Resorts N.V.

Condensed Consolidated Statements of Cash Flows (Continued)

($ in thousands)

(unaudited)


		Nine Months Ended September 30,					Six Months Ended June 30,
		2020		2019			2021		2020
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION	SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION					SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest, net of interest capitalized		$	48,762	$	33,373
Cash paid for interest						Cash paid for interest	$	38,701	$	28,919
Cash paid for income taxes, net	Cash paid for income taxes, net	$	2,146	$	6,527	Cash paid for income taxes, net	$	580	$	2,040
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES	SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES					SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Capital expenditures incurred but not yet paid	Capital expenditures incurred but not yet paid	$	3,109	$	9,046	Capital expenditures incurred but not yet paid	$	1,328	$	1,590
Right-of-use assets obtained in exchange for new financing lease liabilities		$	2,333	$	0
Right-of-use assets obtained in exchange for new operating lease liabilities		$	0	$	1,393
Termination of right-of-use asset and operating lease liability		$	646	$	0
Intangible assets capitalized but not yet paid	Intangible assets capitalized but not yet paid	$	225	$	459	Intangible assets capitalized but not yet paid	$	111	$	208

Par value of vested restricted share awards	Par value of vested restricted share awards	$	94	$	45	Par value of vested restricted share awards	$	109	$	93
Interest capitalized but not yet paid		$	0	$	35

The accompanying Notes form an integral part of the Condensed Consolidated Financial Statements.

Playa Hotels & Resorts N.V.

Notes to the Condensed Consolidated Financial Statements

(unaudited)

Note 1. Organization, operations and basis of presentation

Background

Playa Hotels & Resorts N.V. (“Playa” or the “Company”) is a leading owner, operator and developer of all-inclusive resorts in prime beachfront locations in popular vacation destinations. We own and/or manage a portfolio of 2122 resorts located in Mexico, the Dominican Republic and Jamaica. Unless otherwise indicated or the context requires otherwise, references in our condensed consolidated financial statements (our “Condensed Consolidated Financial Statements”) to “we,” “our,” “us” and similar expressions refer to Playa and its subsidiaries.

COVID-19 impact

Due to the spread of the coronavirus (“COVID-19”) global pandemic, and in response to related governmental restrictions and advisories, reductions in scheduled commercial airline service, and potential health risks to our employees and guests, we temporarily suspended operations at all of our resorts from late March through June 2020. Our resorts began reopening in July, in stages, based on incremental easing of government restrictions and advisories and increases in scheduled commercial airline service. ~~Currently, 18 out~~As of June 30, 2021, all of our 21 resorts ~~have reopened.~~are open. We also implemented additional safety measures at our resorts to mitigate the potential health risks of COVID-19.

~~Although we began operations in July, we~~ We cannot predict when our business will return to normalized levels because we cannot predict when all effects of the pandemic will subside. The longer and more severe the pandemic, the greater the material adverse effect the pandemic will have on our business, results of operations, cash flows, financial condition, access to credit markets and ability to service our debt.

~~Liquidity and ability to continue as a going concern~~

~~As COVID-19 has had a significant adverse impact on our business and financial condition, we took several actions to help remedy our liquidity situation, which include the following:~~

•~~we temporarily suspended operations at all of our resorts in late March and subsequently began opening our resorts, in stages, beginning in July;~~

•~~closed on the sale of equity (see Note 8) and issuance of additional debt (see Note 11) as part of our capital raise efforts;~~

•~~amended our Senior Secured Credit Facility to waive the existing financial maintenance covenants until the fiscal quarter ended September 30, 2021 (see Note 11);~~

•~~sold 2 of our resorts operated under the Jewel brand for cash consideration (see Note 4);~~

•~~significantly reduced staffing levels at the properties and at our corporate offices;~~

•~~imposed temporary compensation cuts throughout the entirety of our corporate offices;~~

•~~adjusted our marketing spend;~~

•~~canceled all non-essential corporate travel;~~

•~~deferred all non-critical capital expenditures for the remainder of the year; and~~

•~~continue to pursue the potential sale of certain of our non-core resorts.~~

Due to the measures we are taking and have taken, we expect to be in compliance with all financial maintenance covenants and expect to have sufficient liquidity to meet our obligations for at least twelve months from the date of this report.

Basis of preparation, presentation and measurement

Our Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Accordingly, these unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with our Consolidated Financial Statements as of and for the year ended December 31, ~~2019,~~2020, included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on ~~February 27, 2020~~March 4, 2021 (the “Annual Report”).

In our opinion, the unaudited interim Condensed Consolidated Financial Statements have been prepared on the same basis as the annual Consolidated Financial Statements and include all adjustments, consisting of only normal recurring adjustments, necessary for fair presentation.

The results of operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 are not necessarily indicative of the results of operations to be expected for the full year ended December 31, ~~2020.~~2021. All dollar amounts (other than per share amounts) in the following disclosures are in thousands of United States dollars, unless otherwise indicated.

Note 2. Significant accounting policies

~~Assets held for sale~~

We classify a resort as held for sale in the period during which we have made the decision to dispose of the resort, a binding agreement to purchase the property has been signed under which the buyer has committed an amount of nonrefundable cash and no significant financing or other contingencies exist which could cause the transaction to not be completed in a timely manner. If these criteria are met, we perform the following steps: recognize an impairment loss if the fair value is lower than the carrying amount of the resort and related assets; cease recording depreciation expense; and classify the assets and related liabilities as held for sale on the balance sheet. Any asset impairment is recorded within impairment loss in the Condensed Consolidated Statements of Operations.

Standards ~~adopted~~

~~Standard~~

~~Description~~

~~Date of Adoption~~

~~Effect on the Financial Statements or Other Significant Matters~~

~~Accounting Standard Update (~~“~~ASU~~”~~) No. 2016-13,~~ ~~Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (as amended by ASU No. 2018-19)~~

This standard amends current guidance on the impairment of financial instruments by adding an impairment model (known as the current expected credit loss (CECL) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes, as an allowance, its estimate of expected credit losses.

~~January 2020~~

On January 1, 2020, we adopted ASU No. 2016-13. We determine our credit losses by applying an expected loss rate to the outstanding balance of accounts receivable for each of our reportable segments (refer to Note 15) and our corporate entities. The expected loss rates for our reportable segments and corporate entities were determined primarily using historical credit losses, which are not expected to differ from what is currently expected over the life of our trade receivables.

The adoption of ASU No. 2016-13 was immaterial to our Condensed Consolidated Financial Statements for the three months ended March 31, 2020.

~~Standards not yet~~ adopted

Standard

Description

Date of Adoption

Effect on the Financial Statements or Other Significant Matters

ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes

The standard simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities.

January 2021

~~We are in the process of evaluating the impact~~The adoption of ASU No. ~~2019-12. The adoption of this standard will result~~2019-12 resulted in changes to our deferred tax liabilities and deferred income tax expense for our resorts located in the Dominican Republic, which are subject to hybrid tax regimes. We adopted ASU No. 2019-12 on a modified retrospective basis through a $3.4 million cumulative-effect adjustment to opening retained earnings in our Condensed Consolidated Financial Statements for the three months ended March 31, 2021.

Standards not yet adopted

Standard

Description

Date of Adoption

Effect on the Financial Statements or Other Significant Matters

ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting

The amendments in this update provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

January 2022

We are currently evaluating the impact of ASU No. 2020-04 on the Condensed Consolidated Financial Statements. We may elect to early adopt the standard prior to the discontinuation of one-month LIBOR ~~rates as of December 31, 2021.~~rates.

Note 3. Revenue

The following tables present our revenues disaggregated by geographic segment (refer to discussion of our reportable segments in Note 15) ($ in thousands):


		Three Months Ended September 30, 2020													Three Months Ended June 30, 2021
		Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Other		Total			Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Other		Total
Package revenue	Package revenue	$	14,775	$	526	$	1,889	$	5,515	$	0	$	22,705	Package revenue	$	38,515	$	17,741	$	27,918	$	20,606	$	0	$	104,780
Non-package revenue	Non-package revenue	3,128		261		564		1,306		259		5,518		Non-package revenue	8,016		3,447		6,004		4,766		369		22,602
Management fees	Management fees	0		0		0		0		8		8		Management fees	0		0		0		0		452		452
Cost reimbursements	Cost reimbursements	0		0		0		474		31		505		Cost reimbursements	0		0		0		804		165		969
Total revenue	Total revenue	$	17,903	$	787	$	2,453	$	7,295	$	298	$	28,736	Total revenue	$	46,531	$	21,188	$	33,922	$	26,176	$	986	$	128,803

Three Months Ended September 30, 2019
Yucatán
Peninsula
Pacific
Coast
Dominican
Republic
Jamaica Other Total
Package revenue $ 45,663 $ 15,450 $ 11,689 $ 38,289 $ 0 $ 111,091
Non-package revenue 7,437 2,310 2,928 7,377 13 20,065
Management fees 0 0 0 0 83 83
Cost reimbursements 0 0 0 1,311 275 1,586
Total revenue $ 53,100 $ 17,760 $ 14,617 $ 46,977 $ 371 $ 132,825


	Three Months Ended June 30, 2020
	Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Other		Total
Package revenue	$	(165)	$	(90)	$	(178)	$	735	$	0	$	302
Non-package revenue	187		15		190		(172)		20		240
Management fees	0		0		0		0		(18)		(18)
Cost reimbursements	0		0		0		414		44		458
Total revenue	$	22	$	(75)	$	12	$	977	$	46	$	982


	Six Months Ended June 30, 2021
	Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Other		Total
Package revenue	$	67,385	$	25,293	$	45,381	$	30,615	$	0	$	168,674
Non-package revenue	13,824		4,809		9,436		7,034		494		35,597
Management fees	0		0		0		0		796		796
Cost reimbursements	0		0		0		1,181		301		1,482
Total revenue	$	81,209	$	30,102	$	54,817	$	38,830	$	1,591	$	206,549


		Nine Months Ended September 30, 2020													Six Months Ended June 30, 2020
		Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Other		Total			Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Other		Total
Package revenue	Package revenue	$	71,337	$	19,160	$	33,078	$	52,487	$	0	$	176,062	Package revenue	$	56,562	$	18,634	$	31,189	$	46,972	$	0	$	153,357
Non-package revenue	Non-package revenue	10,862		3,362		5,019		8,800		293		28,336		Non-package revenue	7,734		3,101		4,455		7,494		34		22,818
Management fees	Management fees	0		0		0		0		635		635		Management fees	0		0		0		0		627		627
Cost reimbursements	Cost reimbursements	0		0		0		1,484		429		1,913		Cost reimbursements	0		0		0		1,010		398		1,408
Total revenue	Total revenue	$	82,199	$	22,522	$	38,097	$	62,771	$	1,357	$	206,946	Total revenue	$	64,296	$	21,735	$	35,644	$	55,476	$	1,059	$	178,210

Nine Months Ended September 30, 2019
Yucatán
Peninsula
Pacific
Coast
Dominican
Republic
Jamaica Other Total
Package revenue $ 163,424 $ 57,943 $ 58,439 $ 137,172 $ 0 $ 416,978
Non-package revenue 23,676 9,111 11,922 24,236 30 68,975
Management fees 0 0 0 0 1,568 1,568
Cost reimbursements 0 0 0 3,899 1,224 5,123
Total revenue $ 187,100 $ 67,054 $ 70,361 $ 165,307 $ 2,822 $ 492,644

Contract assets and liabilities

We do not have any material contract assets as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 other than trade and other receivables on our Condensed Consolidated Balance Sheet. Our receivables are primarily the result of contracts with customers, which are reduced by an allowance for doubtful accounts that reflects our estimate of amounts that will not be collected.

We record contract liabilities when cash payments are received or due in advance of guests staying at our resorts, which are presented as advance deposits (see Note 14) within trade and other payables on our Condensed Consolidated Balance Sheet. Our advanced deposits are generally recognized as revenue within one year.

Note 4. Property and equipment

The balance of property and equipment, net is as follows ($ in thousands):


		As of September 30,		As of December 31,			As of June 30,		As of December 31,
		2020		2019			2021		2020
Property and equipment, gross	Property and equipment, gross					Property and equipment, gross
Land, buildings and improvements	Land, buildings and improvements	$	1,916,838	$	1,976,214	Land, buildings and improvements	$	1,756,911	$	1,863,406
Fixtures and machinery (1)	Fixtures and machinery (1)	84,913		81,437		Fixtures and machinery (1)	79,661		83,802
Furniture and other fixed assets	Furniture and other fixed assets	231,627		228,533		Furniture and other fixed assets	203,877		225,869
Construction in progress	Construction in progress	8,111		42,083		Construction in progress	4,782		4,552
Total property and equipment, gross	Total property and equipment, gross	2,241,489		2,328,267		Total property and equipment, gross	2,045,231		2,177,629
Accumulated depreciation	Accumulated depreciation	(451,589)		(398,353)		Accumulated depreciation	(432,457)		(450,246)
Total property and equipment, net	Total property and equipment, net	$	1,789,900	$	1,929,914	Total property and equipment, net	$	1,612,774	$	1,727,383

________

(1)Includes the gross balance of our financing lease right-of-use asset, ofwhich was $2.3 million as of June 30, 2021 and December 31, 2020 (see Note 11).

Depreciation expense for property and equipment was ~~$68.6~~$40.2 million and ~~$76.9~~$46.7 million for the ~~nine~~six months ended ~~September~~June 30, 2021 and 2020, ~~and 2019, respectively, and $21.9~~respectively. Depreciation expense was $19.7 million and ~~$29.2~~$22.0 million for the three months ended ~~September~~June 30, 2021 and 2020, ~~and 2019,~~ respectively.

For the nine months ended September 30, 2020 and 2019, $0 million and $8.6 million of interest expense was capitalized on qualifying assets, respectively. For the three months ended September 30, 2020 and 2019, $0 million and $3.6 million of interest expense was capitalized on qualifying assets, respectively. Interest expense was capitalized using the weighted-average interest rate of the debt.

Sale of assets

Capri Resort

On March 31, 2021, we entered into an agreement to sell our equity interest in the Capri Resort, which is reported within our Yucatán Peninsula reportable segment, for $55.0 million in cash consideration. Upon entering into the agreement, we classified the resort and related deferred tax liabilities as held for sale and recorded an impairment loss of $24.0 million based on the sale price. The sale price is considered an observable input other than quoted prices (Level 2) in the U.S. GAAP fair value hierarchy (see Note 13). The impairment is recorded within impairment loss in the Condensed Consolidated Statements of Operations.

On June 24, 2021, we completed the sale, received total cash consideration of $55.2 million, after customary closing costs, and recognized a loss of $0.5 million within loss on sale of assets in the Condensed Consolidated Statements of Operations. In accordance with our Existing Credit Agreement (as defined in Note 11), we utilized 50% of the net proceeds from the sale of $24.4 million, after deducting incremental expenses, to repay a portion of our Term Loan on June 29, 2021. The remaining net proceeds, after deducting capital expenditures incurred across our portfolio for up to 18 months following the sale, will be used to repay our Term Loan and Term A3 Loan in December 2022.

Dreams Puerto Aventuras

On February 5, 2021, we completed the sale of the Dreams Puerto Aventuras, which is reported in our Yucatán Peninsula reportable segment, for $34.5 million in cash consideration. Upon closing, we received total cash consideration of $34.3 million, after customary closing costs, and recognized a gain of less than $0.1 million within loss on sale of assets in the Condensed Consolidated Statements of Operations. A portion of the net proceeds from the sale, after deducting incremental expenses and capital expenditures incurred across our portfolio for up to 24 months following the sale, will be used to repay our Term Loan and Term A3 Loan in February 2023.

Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark

On May 22, 2020, we completed the sale of the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark, which were reported within our Jamaica reportable segment, for $60.0 million in cash consideration. Upon classification as held for sale, we recorded an impairment loss of $25.3 million based on the sale price of the properties, which is considered an observable input other than quoted prices (Level 2) in the U.S. GAAP fair value hierarchy. ~~The impairment is recorded within impairment loss in the Condensed Consolidated Statements of Operations.~~ Upon closing, we received total cash consideration of $58.7 million, after customary closing costs, and recognized a $1.8 million loss within loss on sale of assets in the Condensed Consolidated Statements of Operations.

~~Consistent with the terms of our Existing Credit Agreement (as defined in Note 11), we expect that a~~ A portion of the net proceeds from the sale, after deducting incremental expenses and capital expenditures incurred across our portfolio for up to 24 months following the sale, will be used to ~~prepay~~repay our Term Loan in ~~the second quarter of~~May 2022.

~~Assets held for sale~~

Subsequent to quarter end, we entered into an agreement to sell the Dreams Puerto Aventuras for total cash consideration of approximately $34.5 million. The sale is expected to close by the first quarter of 2021, however there is no assurance that we will complete the transaction. The Dreams Puerto Aventuras was classified as held for sale after September 30, 2020.

Lessor contracts

We rent certain real estate to third parties for office and retail space within our resorts. Our lessor contracts are considered operating leases and generally have a contractual term of one to three years. The following table presents our rental income for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 ($ in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,
Leases	Leases	2020		2019		2020		2019		Leases	2021		2020
Operating lease income (1)	Operating lease income (1)	$	254	$	1,215	$	1,400	$	3,931	Operating lease income (1)	$	787	$	0


	Six Months Ended June 30,
Leases	2021		2020
Operating lease income (1)	$	1,393	$	1,146

________

(1) Our operating lease income, which is recorded within non-package revenue in the Condensed Consolidated Statements of Operations, includes variable lease revenue which is typically calculated as a percentage of our tenant's net sales.

Note 5. Income taxes

We file tax returns for our entities in key jurisdictions including Mexico, Dominican Republic, Jamaica and the United States. We are domiciled in ~~The~~the Netherlands and ~~are taxed in The Netherlands with~~ our ~~other~~ Dutch ~~subsidiaries. Dutch companies~~subsidiaries are subject to ~~Dutch corporate income tax at~~ a general tax rate of 25%. Our other operating subsidiaries are subject to tax rates up to 30%.

~~During~~We recorded income tax benefits of $12.5 million and $14.4 million for the ~~first quarter~~three months and six months ended June 30, 2021, respectively. The income tax benefit recognized in both periods includes the impact of ~~2019, we implemented a new transfer pricing policy, where~~certain discrete adjustments related to the intercompany pricing mechanics between our entities are based on a return on operating assets per applicable guidelines defined by the Organization for Economic Cooperation and Development. As a result, certainsale of our ~~resort entities that were previously in loss positions were expected to be profitable, which resulted in the release of their~~resorts and our valuation ~~allowances.~~allowance.

In connection with the sale of the Capri Resort (see Note 4), we recognized a $5.6 million income tax benefit from the write-off of existing deferred tax liabilities and a $1.2 million income tax expense due to capital gains for the three months ended June 30, 2021. For the six months ended June 30, 2021, we recognized a net $5.5 million income tax benefit from the sale of the Dreams Puerto Aventuras and the Capri Resort, which represents the aggregate tax impact of capital gains, impairment and elimination of existing deferred tax balances.

~~The adverse~~

We continually monitor the realizability of our deferred tax assets, which consist primarily of net operating loss carryforwards. After considering the residual economic effects of the COVID-19 pandemic (see Note 1) ~~have caused us to reassess our tax positions. Due to~~and the ~~current environment, including the temporary suspension~~timing of ~~operations at our~~ ~~resorts, we concluded that our~~ ~~resort~~ ~~will be in loss positions for the year ended December 31, 2020 and adjusted our transfer pricing analysis accordingly. Additionally, we are closely monitoring the adverse effects~~reversals of ~~the COVID-19 pandemic on the realizability of our~~ deferred tax ~~assets. As a result, during the~~ ~~nine months ended September 30, 2020,~~liabilities, we recognized an additional ~~$20.2~~$0.7 million and $3.7 million of valuation ~~allowance~~allowances against the deferred tax assets of our Mexico ~~Jamaica~~ and ~~U.S. entities.~~

On March 27, 2020, the United States House of Representatives passed the Coronavirus Aid, Relief, and Economic Security Act (The CARES Act), also known as the Third COVID-19 Supplemental Relief Bill, and the President of the United States signed the legislation into law. We analyzed The CARES Act and do not expect the provisions of the legislation to have a significant impact on our effective tax rate or our income tax payable and deferred income tax positions as of September 30, 2020.

For the three months ended September 30, 2020, our income tax provision was $5.3 million, compared to a $1.5 million income tax provision for the three months ended September 30, 2019. The increase in our income tax provision of $3.8 million was driven primarily by additional tax expense of $20.2 million related to valuation allowances recognized for our Jamaica ~~Mexico and U.S.~~ entities during the three and six months ended ~~September~~June 30, 2020, and a $1.4 million increase in tax expense associated with foreign exchange rate fluctuations. The increase in our income tax provision was offset by a $12.5 million increased tax benefit due to lower pre-tax book income from our tax paying entities, a $4.0 million increase in the discrete tax benefit due to lower future tax liabilities of certain Dominican Republic entities, and a $1.7 million tax benefit associated with an immaterial adjustment related to the sale of the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark.

For the nine months ended September 30, 2020, our income tax benefit was $8.2 million, compared to a $10.0 million income tax benefit for the nine months ended September 30, 2019. The decrease in our income tax benefit of $1.8 million was driven primarily by a $3.2 million increase in income tax expense from a correction of an immaterial prior year error, a decreased tax benefit from the $14.3 million valuation allowance release during the nine months ended September 30, 2019 that did not occur during the nine months ended September 30, 2020, a $20.2 million tax provision related to valuation allowances recognized for our Jamaica, Mexico and U.S. entities, and a $2.3 million increase in tax expense associated with foreign exchange rate fluctuations. The decrease in the income tax benefit was offset by a $22.6 million increased tax benefit due to lower pre-tax book income from our tax paying entities, an $8.5 million increase in the discrete tax benefit due to lower future tax liabilities of certain Dominican Republic entities, and a $7.5 million discrete tax benefit associated with the sale of the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark.2021, respectively.

~~NaN~~In July 2021, we signed an outstanding Advanced Pricing Agreement (“APA”) for one of our Dominican Republic entities ~~Playa Romana Mar B.V.~~ and ~~Playa~~all of our Dominican ~~Resorts B.V., which hold our Hilton La Romana All-Inclusive Resort and Hyatt Ziva and Hyatt Zilara Cap Cana resorts, respectively, were granted 15-year tax exemptions by the Ministry of Finance~~Republic entities had effective APAs as of the ~~Dominican Republic beginning~~date of this filing. All APAs are set to expire during the third quarter, but we expect to renegotiate and finalize terms in ~~2019. The~~2021, which is reflected in our estimated annual effective tax ~~exemption status~~rate calculation.

We had no uncertain tax positions or unrecognized tax benefits as of ~~Inversiones Vilazul, S.A.S., which holds our Dreams Punta Cana resort, expired on December 31, 2019.~~June 30, 2021. We expect no significant changes in unrecognized tax benefits over the next twelve months.

1211

Note 6. Related party transactions

Relationship with Hyatt

Hyatt Hotels Corporation (“Hyatt”) is considered a related party due to its ownership of our ordinary shares by its affiliated entities and representation on our Board of Directors. We pay Hyatt fees associated with the franchise agreements of our resorts operating under the all-ages Hyatt Ziva and adults-only Hyatt Zilara brands and receive reimbursements for guests that pay for their stay using the World of Hyatt® guest loyalty program.

Relationship with Sagicor

Sagicor ~~Group Jamaica~~Financial Corporation Limited ~~(“Sagicor”~~and its affiliated entities (collectively “Sagicor”) is considered a related party due to its ownership of our ordinary shares ~~by its affiliated entities~~ and representation on our Board of Directors. We pay Sagicor for insurance coverage for ~~some~~one of our Jamaica properties. Sagicor is also a part owner of the Jewel Grande Montego Bay Resort & Spa and compensates us as manager of the property.

Relationship with Davidson Kempner Capital Management L.P.

Davidson Kempner Capital Management L.P. (DKCM) is the investment manager of multiple affiliated funds and is considered a related party due to the funds' ownership of our ordinary shares following the equity raise in January 2021 (see Note 8). The affiliated funds managed by DKCM are also the lenders to our Property Loan and Additional Credit Facility, which consists of our Term A1, Term A2 and Term A3 loans (see Note 11). We pay DKCM periodic interest payments related to the outstanding debt.

Lease with our Chief Executive Officer

One of our offices is owned by our Chief Executive Officer and we sublease the space at that location from a third party.

Transactions with related parties

Transactions between us and related parties during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 were as follows ($ in thousands):


			Three Months Ended September 30,				Nine Months Ended September 30,						Three Months Ended June 30,				Six Months Ended June 30,
Related Party	Related Party	Transaction	2020		2019		2020		2019		Related Party	Transaction	2021		2020		2021		2020
Hyatt	Hyatt	Franchise fees (1)	$	1,102	$	3,516	$	7,666	$	13,054	Hyatt	Franchise fees (1)	$	4,459	$	1,048	$	7,975	$	6,564
Sagicor	Sagicor	Insurance premiums (1)	$	187	$	186	$	720	$	1,317	Sagicor	Insurance premiums (1)	$	203	$	119	$	358	$	533
Sagicor	Sagicor	Cost reimbursements	$	488	$	1,393	$	1,652	$	4,200	Sagicor	Cost reimbursements	$	858	$	442	$	1,288	$	1,164
Chief Executive Officer	Chief Executive Officer	Lease expense (2)	$	186	$	187	$	564	$	539	Chief Executive Officer	Lease expense (2)	$	188	$	196	$	416	$	378
DKCM											DKCM	Interest expense	$	5,467	$	0	$	10,871	$	0

________

(1)Included in direct expense in the Condensed Consolidated Statements of Operations with the exception of certain immaterial fees associated with the Hyatt franchise agreements, which are included in selling, general, and administrative expense.

(2)Included in selling, general, and administrative expense in the Condensed Consolidated Statements of Operations.

Note 7. Commitments and contingencies

We are involved in various claims and lawsuits arising in the normal course of business, including proceedings involving tort and other general liability claims, and workers’ compensation and other employee claims. Most occurrences involving liability and claims of negligence are covered by insurance with solvent insurance carriers. We recognize a liability when we believe the loss is probable and reasonably estimable. We currently believe that the ultimate outcome of such lawsuits and proceedings will not, individually or in the aggregate, have a material effect on our Condensed Consolidated Financial Statements.

The Dutch corporate income tax act provides the option of a fiscal unity, which is a consolidated tax regime wherein the profits and losses of group companies can be offset against each other. Our Dutch companies file as a fiscal unity, with the exception of Playa Romana B.V., Playa Romana Mar B.V. and Playa Hotels & Resorts N.V. Playa Resorts Holding B.V. is the head of our Dutch fiscal unity and is jointly and severally liable for the tax liabilities of the fiscal unity as a whole.

Note 8. Ordinary shares

On December 14, 2018, our Board of Directors authorized the repurchase of up to $100.0 million of our outstanding ordinary shares as market conditions and our liquidity warrant. The repurchase program is subject to certain limitations under Dutch law, including existing, repurchase authorization granted by our shareholders. Repurchases may be made from time to time in the open market, in privately negotiated transactions or by other means (including Rule 10b5-1 trading plans). Depending on market conditions and other factors, these repurchases may be commenced or suspended from time to time without prior notice. During the three months ended September 30, 2020, we did 0t purchase any ordinary shares under the repurchase program.

~~On June 12, 2020,~~January 11, 2021, we issued ~~4,878,049~~28,750,000 ordinary shares with a par value of €0.10 per share in ~~a private placement exempt from registration under the Securities Act of 1933, as amended, in~~ connection with ~~our capital raising efforts.~~a public equity offering. We received ~~$19.6~~$137.7 million in cash consideration, ~~after~~net of underwriting discounts and customary closing costs.

As of ~~September~~June 30, ~~2020,~~2021, our ordinary share capital consisted of ~~134,496,340~~164,209,875 ordinary shares outstanding, which have a par value of €0.10 per share. In addition, ~~3,478,147~~4,244,706 restricted shares and performance share awards and ~~22,656~~27,501 restricted share units were outstanding under the 2017 Plan (as defined in Note 9). The holders of restricted shares and performance share awards are entitled to vote, but not dispose of, such shares until they vest. The holders of restricted share units are neither entitled to vote nor dispose of such shares until they vest.

Note 9. Share-based compensation

We adopted our 2017 Omnibus Incentive Plan (the “2017 Plan”) to attract and retain independent directors, executive officers and other key employees and service providers. As of ~~September~~June 30, ~~2020,~~2021, there were ~~6,242,621~~4,841,947 shares available for future grants under the 2017 Plan.

Restricted share awards consist of restricted shares and restricted share units that are granted to eligible employees, executives, and board members and consist of ordinary shares (or the right to receive ordinary shares).

A summary of our restricted share awards from January 1, ~~2020~~2021 to ~~September~~June 30, ~~2020~~2021 is as follows:


		Number of Shares	Weighted-Average Grant Date Fair Value			Number of Shares	Weighted-Average Grant Date Fair Value
Unvested balance at January 1, 2020		2,157,336	$	9.03
Unvested balance at January 1, 2021					Unvested balance at January 1, 2021	2,225,139	$	8.53
Granted	Granted	1,076,619	7.92		Granted	1,925,298	5.45
Vested	Vested	(849,416)	8.98		Vested	(897,793)	8.61
Forfeited	Forfeited	(84,450)	8.89		Forfeited	(7,956)	8.66
Unvested balance at September 30, 2020		2,300,089	$	8.53
Unvested balance at June 30, 2021					Unvested balance at June 30, 2021	3,244,688	$	6.68

Performance share awards consist of ordinary shares that may become earned and vested at the end of a three-year performance period based on the achievement of performance targets adopted by our Compensation Committee. On January 4, 2021, we issued 1,027,519 performance share awards with market conditions where 50% of the performance awards will vest based on the total shareholder return of our ordinary shares relative to those of our peer group (“Relative TSR Awards”) and 50% will vest based on the compound annual growth rate of the price of our ordinary shares (“Absolute TSR Awards”). The Relative TSR Awards may vest between 0% and 150% of target, with the award capped at 100% of target should Playa’s TSR be negative. The Absolute TSR Awards may vest up to 100% of target.

The table below summarizes the key inputs used in the Monte-Carlo simulation to determine the grant date fair value of ~~the total shareholder return~~our performance share awards ($ in thousands):

Performance Award Grant Date Percentage of Total Award Grant Date Fair Value by Component
Volatility (1)
Interest
Rate (2)
Dividend Yield
January 2, 2020
Total Shareholder Return 50 % $ 1,334 24.87 % 1.58 % 0 %
Adjusted EBITDA Comparison 50 % $ 2,187 0 % 0 % 0 %


Performance Award Grant Date	Percentage of Total Award		Grant Date Fair Value by Component		Volatility (1)		Interest Rate (2)		Dividend Yield
January 4, 2021
Peer Shareholder Return	50	%	$	3,088	57.69	%	0.16	%	0	%
Growth Rate	50	%	$	2,230	57.69	%	0.16	%	0	%

________

(1) Expected volatility was determined based on the historical share prices in our industry.

(2) The risk-free rate was based on U.S. Treasury zero coupon issues with a remaining term equal to the remaining term of the measurement period.

A summary of our performance share awards from January 1, ~~2020~~2021 to ~~September~~June 30, ~~2020~~2021 is as follows:

Number of Shares Weighted-Average Grant Date Fair Value
Unvested balance at January 1, 2020 913,407 $ 7.22
Granted 552,395 6.38
Forfeited (265,088) 7.99
Unvested balance at September 30, 2020 1,200,714 $ 6.66

~~On October 8, 2020, all unvested performance share awards were voluntarily waived by the award recipients and were cancelled.~~


	Number of Shares	Weighted-Average Grant Date Fair Value
Unvested balance at January 1, 2021	0	$	0
Granted	1,027,519	5.18

Unvested balance at June 30, 2021	1,027,519	$	5.18

Note 10. Earnings per share

Basic and diluted earnings or losses per share (“EPS”) are as follows ($ in thousands, except share data):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Numerator	Numerator									Numerator
Net (loss) income		$	(78,604)	$	(30,461)	$	(188,618)	$	13,567
Net loss										Net loss	$	(7,768)	$	(87,458)	$	(77,513)	$	(110,014)
Denominator	Denominator									Denominator
Denominator for basic EPS - weighted-average number of shares outstanding	Denominator for basic EPS - weighted-average number of shares outstanding	134,493,864		129,841,264		131,426,886		130,265,112		Denominator for basic EPS - weighted-average number of shares outstanding	164,119,693		130,466,383		162,482,673		129,876,545
Effect of dilutive securities	Effect of dilutive securities									Effect of dilutive securities
Unvested restricted share awards	Unvested restricted share awards	0		0		0		336,135		Unvested restricted share awards	0		0		0		0
Denominator for diluted EPS - adjusted weighted-average number of shares outstanding	Denominator for diluted EPS - adjusted weighted-average number of shares outstanding	134,493,864		129,841,264		131,426,886		130,601,247		Denominator for diluted EPS - adjusted weighted-average number of shares outstanding	164,119,693		130,466,383		162,482,673		129,876,545

EPS - Basic	EPS - Basic	$	(0.58)	$	(0.23)	$	(1.44)	$	0.10	EPS - Basic	$	(0.05)	$	(0.67)	$	(0.48)	$	(0.85)
EPS - Diluted	EPS - Diluted	$	(0.58)	$	(0.23)	$	(1.44)	$	0.10	EPS - Diluted	$	(0.05)	$	(0.67)	$	(0.48)	$	(0.85)

For the three and ~~nine~~six months ended ~~September~~June 30, 2021 and 2020, 1,027,519 and 1,200,714 shares of unvested performance-based equity awards, respectively, were not included in the computation of diluted EPS after assumed conversions as ~~the~~their effect would have been anti-dilutive. The performance ~~criteria were not met as~~targets of ~~the end of the respective reporting period. For the three and nine months ended September 30, 2019, 934,107 shares of~~our unvested performance-based equity awards were ~~not included in the computation~~partially achieved as of ~~diluted EPS after assumed conversions as the performance criteria~~June 30, 2021, but were not ~~met~~achieved as of ~~the end of the respective reporting period.~~June 30, 2020.

For the three and ~~nine~~six months ended ~~September~~June 30, 2021 and 2020, ~~2,300,089~~3,244,688 and 2,326,993 shares of unvested restricted share awards were not included in the computation of diluted EPS as their effect would have been anti-dilutive. For the three and nine months ended September 30, 2019, 2,175,638 and 292,937 shares of unvested restricted share awards, respectively, were not included in the computation of diluted EPS as their effect would have been anti-dilutive.

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, outstanding earnout warrants to acquire a total of 2,987,770 ordinary shares were not included in the computation of diluted EPS after assumed conversions because the warrants were not exercisable as of the end of the respective reporting period.

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Note 11. Debt

Our debt consists of the following ($ in thousands):


				Outstanding Balance as of							Outstanding Balance as of
		Interest Rate	Maturity Date	September 30, 2020		December 31, 2019			Interest Rate	Maturity Date	June 30, 2021		December 31, 2020
Revolving Credit Facilities	Revolving Credit Facilities							Revolving Credit Facilities
Revolving Credit Facility (1)	Revolving Credit Facility (1)	LIBOR + 3.00%	April 27, 2022	$	84,667	$	60,000	Revolving Credit Facility (1)	LIBOR + 3.00% LIBOR + 4.00%	April 27, 2022 ($17.0 million) January 27, 2024 ($68.0 million)	$	0	$	84,667

Senior Secured Credit Facilities	Senior Secured Credit Facilities							Senior Secured Credit Facilities
Term Loan (2)	Term Loan (2)	LIBOR + 2.75%	April 27, 2024	$	978,873	$	986,448	Term Loan (2)	LIBOR + 2.75%	April 27, 2024	$	946,919	$	976,348
Term A1 Loan	Term A1 Loan	11.4777%	April 27, 2024	35,000		0		Term A1 Loan	11.4777%	April 27, 2024	35,000		35,000
Term A2 Loan	Term A2 Loan	11.4777%	April 27, 2024	31,000		0		Term A2 Loan	11.4777%	April 27, 2024	31,000		31,000
Term A3 Loan (3)	Term A3 Loan (3)	LIBOR + 3.00%	April 27, 2024	28,000		0		Term A3 Loan (3)	LIBOR + 3.00%	April 27, 2024	28,000		28,000
Total Term Loans (at stated value)	Total Term Loans (at stated value)			1,072,873		986,448		Total Term Loans (at stated value)			1,040,919		1,070,348
Unamortized discount	Unamortized discount			(1,786)		(2,168)		Unamortized discount			(1,407)		(1,658)
Unamortized debt issuance costs	Unamortized debt issuance costs			(6,471)		(3,622)		Unamortized debt issuance costs			(5,120)		(6,015)
Total Term Loans, net	Total Term Loans, net			$	1,064,616	$	980,658	Total Term Loans, net			$	1,034,392	$	1,062,675

Property Loan	Property Loan							Property Loan
Property Loan (at stated value)	Property Loan (at stated value)	9.25%	July 1, 2025	$	110,000	$	0	Property Loan (at stated value)	9.25%	July 1, 2025	$	110,000	$	110,000
Unamortized discount	Unamortized discount			(4,172)		0		Unamortized discount			(3,539)		(3,960)
Unamortized debt issuance costs	Unamortized debt issuance costs			(4,645)		0		Unamortized debt issuance costs			(3,940)		(4,409)
Total Property Loan, net	Total Property Loan, net			$	101,183	$	0	Total Property Loan, net			$	102,521	$	101,631

Financing lease obligations	Financing lease obligations			$	2,313	$	0	Financing lease obligations			$	2,249	$	2,294

Total debt, net	Total debt, net			$	1,252,779	$	1,040,658	Total debt, net			$	1,139,162	$	1,251,267

________

(1)Undrawn balances bear interest between ~~0.5%~~0.25% to ~~0.25%~~0.5% depending on certain leverage ratios. We had available balances of $0$85.0 million and ~~$40.0~~$0.3 million as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. The weighted-average interest rate on the outstanding balance of our Revolving Credit Facility was 3.15% ~~and 4.72%~~ as of ~~September 30, 2020 and~~ December 31, ~~2019, respectively.~~2020.

(2)One-month London Interbank Offered Rate (“LIBOR”) ~~rate~~ is subject to a 1.0% floor. The interest rate was 3.75% ~~and 4.55%~~ as of ~~September~~both June 30, ~~2020~~2021 and December 31, ~~2019, respectively.~~2020. Our 2 interest rate swaps fix LIBOR at 2.85% on $800.0 million of our Term Loan (see Note 12).

(3)LIBOR ~~rate~~ is subject to a 1.0% floor. The interest rate was 4.00% as of ~~September~~both June 30, 2021 and December 31, 2020.

~~Fourth~~Fifth Amendment to Amended and Restated Credit Agreement

On ~~June 12, 2020,~~February 5, 2021, we entered into the ~~Fourth~~Fifth Amendment to the Amended & Restated Credit Agreement (the ~~“Fourth~~“Fifth Amendment”, and collectively with the unamended terms of the Senior Secured Credit Facility, the “Existing Credit Agreement”). The terms of the Senior Secured Credit Facility remain in effect except for the following terms modified by the ~~Fourth~~Fifth Amendment:

i.~~replace~~extend the maturity date for $68.0 million of the $85.0 million revolving credit facility through January 2024. The remaining $17.0 million matures in April 2022;

ii.repaid the $84.7 million outstanding balance on our Revolving Credit Facility as a condition to maturityextension;

iii.increase the interest rate on the extended portion of our revolving credit facility to LIBOR plus an applicable margin of 4.00%;

iv.extend the replacement of the total net leverage ratio requirement of the financial covenant with a minimum liquidity ~~test until September 30, 2021~~balance through March 31, 2022 (the “Relief Period”);

v.further modify the financial covenant for certain test dates after the Relief Period; and

vi.add certain restrictions on, among other things, the incurrence of additional debt and making of investments, dispositions and restricted payments during the Relief Period and thereafter.

Second Amendment to Additional Credit Facility

On February 5, 2021, we entered into the Second Amendment to the Additional Credit Facility (the “Second Amendment”). The terms of the Additional Credit Facility remain in effect except for the following terms modified by the Second Amendment:

i.extend the Relief Period through March 31, 2022;

ii.further modify the financial covenant for certain test dates after the Relief Period; and

iii.add certain restrictions on, among other things, the incurrence of additional debt and making of investments, dispositions and restricted payments during the Relief ~~Period.~~

~~Additional Credit Facility~~

~~On June 12, 2020, we entered into an additional senior secured credit facility with an average interest rate of 9.25% that matures on April 27, 2024~~Period and ~~ranks pari passu with the Existing Credit Agreement (the “Additional Credit Facility”). The Additional Credit Facility consists of the following term loans:~~

i.thereafter.~~$35.0 million term loan at fixed rate of 11.4777% (the “Term A1 Loan”);~~

~~ii.$31.0 million term loan at fixed rate of 11.4777% (the “Term A2 Loan”); and~~

~~iii.~~$28.0 million term loan at our option of either a base rate plus a margin of 2.00% or LIBOR plus 3.00% (the “Term A3 Loan”). Term A3 Loan is a Eurocurrency loan subject to a 1.0% LIBOR floor consistent with the Existing Credit Agreement.

We intend to use the proceeds from the Additional Credit Facility for general corporate purposes. The obligations under the Additional Credit Facility are collateralized in a manner that is substantially identical to the Existing Credit Agreement.

Prior to the maturity date, the Additional Credit Facility does not require principal payments, but does include mandatory prepayment requirements for the Term A3 Loan that are consistent with the Existing Credit Agreement. Mandatory prepayments are required for certain asset sales, casualty events and condemnation events that are not reinvested in our business where our total net leverage ratio is above 4.00x. We may not voluntarily prepay any portion of the Additional Credit Facility prior to June 2023 without paying a make-whole premium equal to 100% of the interest that would have otherwise accrued from the date of such payment through June 2022 plus 50% of the interest that otherwise would have accrued from June 2022 to June 2023. Subsequent to June 2023, we may prepay any portion of the Additional Credit Facility without penalty.

In connection with the Additional Credit Facility, we terminated the remaining $15.0 million of unused capacity of our Revolving Credit Facility under the Existing Credit Agreement. The Additional Credit Facility contains covenants, including a springing financial maintenance covenant, identical to those contained in the Existing Credit Agreement.

~~Property Loan Agreement~~

On June 12, 2020, we entered into a property loan agreement in the amount of $110.0 million that has a fixed interest rate of 9.25% and matures on July 1, 2025 (the “Property Loan”). Prior to maturity, the Property Loan does not require principal payments. The Property Loan is collateralized by the mortgages of our Hyatt Ziva and Hyatt Zilara Cap Cana properties located in the Dominican Republic and the Hilton Rose Hall Resort & Spa located in Jamaica (collectively the “Properties”). We intend to use the proceeds of the Property Loan to finance the operation and management of the Properties and for general corporate purposes.

During the term of the Property Loan, we are required to deposit certain cash reserves including reserves for operating expenses, debt service and certain property improvement plan required work. We will continue to fund the reserves until the Properties achieve a debt service coverage ratio of 1.50x for 2 consecutive calendar quarters. These reserves are presented as restricted cash on our Condensed Consolidated Balance Sheet, which had a balance of $27.6 million as of September 30, 2020.

~~Financing lease obligation~~

On July 1, 2020, we entered into a twelve year financing lease arrangement with a third-party for the construction, management and maintenance of a thermal energy plant located at the Hyatt Ziva and Hyatt Zilara Cap Cana. We recognized a $2.3 million right-of-use asset and lease liability within property and equipment, net and debt, respectively, on the Condensed Consolidated Balance Sheet.

Financial maintenance covenants

We were in compliance with all applicable covenants as of ~~September~~June 30, ~~2020. See a~~2021. A summary of our applicable covenants and restrictions ~~below:~~is as follows:


Debt						Covenant Terms
Existing Credit Agreement						We are required to maintain a minimum liquidity balance of ~~$60.0~~$70.0 million through the Relief Period. If we have more than 35% drawn on the Revolving Credit Facility for periods subsequent to ~~June 30,~~December 31, 2021, we will be subject to the following total net leverage ratio requirements: ▪6.50x for the period ended ~~September 30, 2021;~~March 31, 2022; ▪6.00x for the period ended ~~December 31, 2021;~~June 30, 2022; and ▪4.75x for periods thereafter.
Term A1 Loan						Same terms as the Existing Credit Agreement.
Term A2 Loan						No applicable debt covenants.
Term A3 Loan						No applicable debt covenants.
Property Loan						No applicable debt covenants other than the requirement to maintain a cash reserve until the Properties achieve a debt service coverage ratio of 1.50x for 2 consecutive quarters.

Note 12. Derivative financial instruments

~~Interest rate swaps~~

Effective March 29, 2018, we entered into 2 interest rate swaps to mitigate the interest rate risk inherent to our floating rate debt. The interest rate swaps are not for trading purposes and have fixed notional values of $200.0 million and $600.0 million. The fixed rate paid by us is 2.85% and the variable rate received resets monthly to the one-month LIBOR rate, which results in us fixing LIBOR at 2.85% on $800.0 million of our Term Loan. The interest rate swaps mature on March 31, 2023.

~~On March 20, 2019, we elected to adopt hedge accounting and designate our~~Our interest rate swaps are designated as cash flow hedges. Prior to our adoption of hedge accounting, the change in fair value of our interest rate swaps was recognized through interest expense in the Condensed Consolidated Statements of Operations. Following the adoption, the change in the fair value of our interest rate swaps that qualifies as effective cash flow hedges, was recorded through other comprehensive loss (“OCI”) in the Condensed Consolidated Statements of Comprehensive Loss. Unrealized gains and losses in accumulated other comprehensive loss (“AOCI”)but are ~~reclassified to interest expense as interest payments are made on our variable rate debt. On February 29, 2020, our interest rate swaps were~~deemed ineffective due to the decrease in interest ~~rates and all subsequent~~rates. All changes in fair value ~~were~~are recognized through interest expense in the Condensed Consolidated Statements of Operations.

1816

The following tables present the effect of our interest rate swaps, net of tax, in the Condensed Consolidated Statements of Comprehensive Loss and Condensed Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 ($ in thousands):


		2020		2019			2021		2020
AOCI from our cash flow hedges as of January 1	AOCI from our cash flow hedges as of January 1	$	20,164	$	0	AOCI from our cash flow hedges as of January 1	$	26,369	$	20,164
Change in fair value	Change in fair value	16,956		5,834		Change in fair value	0		16,956
Reclassification from AOCI to interest expense	Reclassification from AOCI to interest expense	(1,908)		24		Reclassification from AOCI to interest expense	(2,894)		(1,908)
OCI related to our cash flow hedges for the three months ended March 31	OCI related to our cash flow hedges for the three months ended March 31	15,048		5,858		OCI related to our cash flow hedges for the three months ended March 31	(2,894)		15,048
Change in fair value	Change in fair value	0		14,648		Change in fair value	0		0
Reclassification from AOCI to interest expense	Reclassification from AOCI to interest expense	(2,926)		136		Reclassification from AOCI to interest expense	(2,926)		(2,926)
OCI related to our cash flow hedges for the three months ended June 30	OCI related to our cash flow hedges for the three months ended June 30	(2,926)		14,784		OCI related to our cash flow hedges for the three months ended June 30	(2,926)		(2,926)
Change in fair value		0		4,912
Reclassification from AOCI to interest expense (1)		(2,958)		(324)
OCI related to our cash flow hedges for the three months ended September 30		(2,958)		4,588
AOCI from our cash flow hedges as of September 30		$	29,328	$	25,230
AOCI from our cash flow hedges as of June 30(1)						AOCI from our cash flow hedges as of June 30(1)	$	20,549	$	32,286

________

(1) As of ~~September~~June 30, ~~2020,~~2021, the total amount expected to be reclassified from AOCI to interest expense during the next twelve months is $11.7 million.


Derivative Liabilities for Ineffective Hedges	Derivative Liabilities for Ineffective Hedges	Financial Statement Classification		Three Months Ended September 30,					Nine Months Ended September 30,			Derivative Liabilities for Ineffective Hedges			Financial Statement Classification		Three Months Ended June 30,			Six Months Ended June 30,
			2020		2019		2020			2019				2021			2020	2021		2020
Interest rate swaps (1)	Interest rate swaps (1)		Interest expense		$	3,803	$	0		$	22,306		$	2,715		Interest rate swaps (1)	Interest expense	$	3,591	$	9,774	$	6,402	$	18,503

________

(1) Includes the change in fair value of our interest rate swaps and the cash interest paid for the monthly settlements of the derivative.

The following tables present the effect of our interest rate swaps in the Condensed Consolidated Balance Sheet as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 ($ in thousands):

Derivative Liabilities for Effective Hedges Financial Statement Classification As of September 30, As of December 31,
2020 2019
Interest rate swaps Derivative financial instruments $ 0 $ 31,932


Derivative Liabilities for Ineffective Hedges	Derivative Liabilities for Ineffective Hedges	Financial Statement Classification		As of September 30,			As of December 31,	Derivative Liabilities for Ineffective Hedges			Financial Statement Classification		As of June 30,	As of December 31,
			2020		2019					2021			2020
Interest rate swaps	Interest rate swaps		Derivative financial instruments		$	50,832			$	0		Interest rate swaps	Derivative financial instruments	$	35,924	$	46,340

Derivative financial instruments expose us to credit risk in the event of non-performance by the counterparty under the terms of the interest rate swaps. We incorporate these counterparty credit risks in our fair value measurements (see Note 13) and believe we minimize this credit risk by transacting with major creditworthy financial institutions.

Note 13. Fair value of financial instruments

The objective of a fair value measurement is to estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions. U.S. GAAP establishes a hierarchical disclosure framework, which prioritizes and ranks the level of observability of inputs used in measuring fair value as follows:

•Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.

•Level 2: Unadjusted quoted prices for similar assets or liabilities in active markets, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.

•Level 3: Inputs are unobservable and reflect our judgments about assumptions that market participants would use in pricing an asset or liability.

1917

We believe the carrying value of our financial instruments, excluding our debt, approximate their fair values as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019.~~2020. We did not have any Level 3 instruments during any of the periods presented in our Condensed Consolidated Financial Statements.

The following table presents our fair value hierarchy for our financial liabilities measured at fair value on a recurring basis as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 ($ in thousands):


		September 30, 2020		Level 1		Level 2		Level 3			June 30, 2021		Level 1		Level 2		Level 3
Fair value measurements on a recurring basis	Fair value measurements on a recurring basis									Fair value measurements on a recurring basis
Interest rate swap	Interest rate swap	$	50,832	$	0	$	50,832	$	0	Interest rate swap	$	35,924	$	0	$	35,924	$	0


		December 31, 2019		Level 1		Level 2		Level 3			December 31, 2020		Level 1		Level 2		Level 3
Fair value measurements on a recurring basis	Fair value measurements on a recurring basis									Fair value measurements on a recurring basis
Interest rate swap	Interest rate swap	$	31,932	$	0	$	31,932	$	0	Interest rate swap	$	46,340	$	0	$	46,340	$	0

The following tables present our fair value hierarchy for our financial liabilities not measured at fair value as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 ($ in thousands):


		Carrying Value		Fair Value							Carrying Value		Fair Value
		As of September 30, 2020		Level 1		Level 2		Level 3			As of June 30, 2021		Level 1		Level 2		Level 3
Financial liabilities not recorded at fair value	Financial liabilities not recorded at fair value									Financial liabilities not recorded at fair value
Term Loan	Term Loan	$	974,103	$	0	$	0	$	893,061	Term Loan	$	943,161	$	0	$	0	$	927,421
Revolving Credit Facility		84,667		0		0		84,780

Term A1 Loan	Term A1 Loan	33,701		0		0		35,179		Term A1 Loan	33,969		0		0		35,327
Term A2 Loan	Term A2 Loan	29,850		0		0		31,158		Term A2 Loan	30,087		0		0		31,289
Term A3 Loan	Term A3 Loan	26,962		0		0		28,055		Term A3 Loan	27,175		0		0		27,648
Property Loan	Property Loan	101,183		0		0		110,848		Property Loan	102,521		0		0		111,841
Total liabilities	Total liabilities	$	1,250,466	$	0	$	0	$	1,183,081	Total liabilities	$	1,136,913	$	0	$	0	$	1,133,526


		Carrying Value		Fair Value							Carrying Value		Fair Value
		As of December 31, 2019		Level 1		Level 2		Level 3			As of December 31, 2020		Level 1		Level 2		Level 3
Financial liabilities not recorded at fair value	Financial liabilities not recorded at fair value									Financial liabilities not recorded at fair value
Term Loan	Term Loan	$	980,658	$	0	$	0	$	983,214	Term Loan	$	971,920	$	0	$	0	$	936,799
Revolving Credit Facility	Revolving Credit Facility	60,000		0		0		60,000		Revolving Credit Facility	84,667		0		0		84,769
Term A1 Loan										Term A1 Loan	33,792		0		0		35,182
Term A2 Loan										Term A2 Loan	29,930		0		0		31,161
Term A3 Loan										Term A3 Loan	27,033		0		0		28,028
Property Loan										Property Loan	101,631		0		0		109,871
Total liabilities	Total liabilities	$	1,040,658	$	0	$	0	$	1,043,214	Total liabilities	$	1,248,973	$	0	$	0	$	1,225,810

2018

The following table summarizes the valuation techniques used to estimate the fair value of our financial instruments measured at fair value on a recurring basis and our financial instruments not measured at fair value:


						Valuation Technique
Financial instruments recorded at fair value
Interest rate swaps						The fair value of the interest rate swaps is estimated based on the expected future cash flows by incorporating the notional amount of the swaps, the contractual period to maturity, and observable market-based inputs, including interest rate curves. The fair value also incorporates credit valuation adjustments to appropriately reflect nonperformance risk. The fair value of our interest rate swaps is largely dependent on forecasted LIBOR as of the measurement date. If, in subsequent periods, forecasted LIBOR exceeds 2.85% we will recognize a gain and future cash inflows. Conversely, if forecasted LIBOR falls below 2.85% in subsequent periods we will recognize a loss and future cash outflows.
Financial instruments not recorded at fair value
Term Loans and Property Loan						The fair value of our Term Loans and Property Loan are estimated using cash flow projections over the remaining contractual period by applying market forward rates and discounting back at the appropriate discount rate.
Revolving Credit Facility						The valuation technique of our Revolving Credit Facility is consistent with our Term Loans. The fair value of the Revolving Credit Facility generally approximates its carrying value as the expected term is significantly shorter in duration.

Note 14. Other balance sheet items

Trade and other receivables, net

The following summarizes the balances of trade and other receivables, net as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 ($ in thousands):


		As of September 30,		As of December 31,			As of June 30,		As of December 31,
		2020		2019			2021		2020
Gross trade and other receivables(1)	Gross trade and other receivables(1)	$	22,973	$	73,015	Gross trade and other receivables(1)	$	42,451	$	28,346
Allowance for doubtful accounts ~~(1)~~(2)	Allowance for doubtful accounts ~~(1)~~(2)	(2,102)		(1,765)		Allowance for doubtful accounts ~~(1)~~(2)	(2,756)		(2,913)
Total trade and other receivables, net ~~(2)~~	Total trade and other receivables, net ~~(2)~~	$	20,871	$	71,250	Total trade and other receivables, net ~~(2)~~	$	39,695	$	25,433

________

(1) The opening balance as of January 1, 2020 was $73.0 million.

(2) We recognized an additional ~~$0.8~~$3.1 million in bad debt expense during the year ended December 31, ~~2019 as a result of the bankruptcy of Thomas Cook, one of our travel partners. We also recognized $2.1 million in bad debt expense during the nine months ended September 30,~~ 2020 primarily as result of the negative effects of COVID-19.

~~(2)~~ ~~The opening balance as of January 1, 2019 was $64.8 million.~~

We have not experienced any significant write-offs to our accounts receivable during the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019.~~2020.

2119

Prepayments and other assets

The following summarizes the balances of prepayments and other assets as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 ($ in thousands):


		As of September 30,		As of December 31,			As of June 30,		As of December 31,
		2020		2019			2021		2020
Advances to suppliers	Advances to suppliers	$	9,753	$	7,865	Advances to suppliers	$	4,019	$	8,748
Prepaid income taxes	Prepaid income taxes	11,376		12,412		Prepaid income taxes	11,743		12,731
Prepaid other taxes (1)	Prepaid other taxes (1)	11,268		11,156		Prepaid other taxes (1)	12,984		14,033
Operating lease right-of-use assets	Operating lease right-of-use assets	4,448		5,673		Operating lease right-of-use assets	3,885		4,263
Contract deposit (2)		2,700		2,700
Key money (2)						Key money (2)	2,430		2,700
Other assets	Other assets	4,941		4,885		Other assets	4,330		5,163
Total prepayments and other assets	Total prepayments and other assets	$	44,486	$	44,691	Total prepayments and other assets	$	39,391	$	47,638

________

(1) Includes recoverable value-added tax, general consumption tax and other sales tax accumulated by our Mexico, Jamaica, Netherlands and Dominican Republic entities.

(2) Represents a cash deposit related to the Sanctuary Cap Cana management contract. ~~The~~In April 2021, we entered into an agreement to classify this deposit ~~will be used towards a purchase of a partial interest in Sanctuary Cap Cana if we are able to agree on terms.~~as key money.

Goodwill

The gross carrying values and accumulated impairment losses of goodwill by reportable segment (refer to discussion of our reportable segments in Note 15) as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 are as follows ($ in thousands):

Yucatán Peninsula Pacific Coast Dominican Republic Jamaica Total
Balance at December 31, 2019
Gross carrying value $ 51,731 $ 0 $ 0 $ 32,776 $ 84,507
Accumulated impairment losses (6,168) 0 0 0 (6,168)
Net carrying value 45,563 0 0 32,776 78,339
Activity during the year
Adjustments (1)
0 0 0 1,756 1,756
Impairment losses (2)
0 0 0 (17,039) (17,039)
Balance at September 30, 2020
Gross carrying value 51,731 0 0 34,532 86,263
Accumulated impairment losses (6,168) 0 0 (17,039) (23,207)
Net carrying value $ 45,563 $ 0 $ 0 $ 17,493 $ 63,056

~~________~~

~~(1)~~ During the third quarter of 2020, we recognized adjustments to deferred income taxes and goodwill representing a correction of an immaterial error for acquired property and equipment from the business combination with Sagicor in 2018. These adjustments were not significant to our previously reported Condensed Consolidated Financial Statements.

~~(2)~~ ~~As a result of the immaterial correction noted above, we recognized an additional $0.9 million in impairment losses during the third quarter of 2020.~~


	Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Total
Balance at December 31, 2020
Gross carrying value	$	51,731	$	0	$	0	$	35,879	$	87,610
Accumulated impairment losses	(6,168)		0		0		(19,788)		(25,956)
Net carrying value	45,563		0		0		16,091		61,654

Activity during the period
Impairment losses	0		0		0		0		0

Balance at June 30, 2021
Gross carrying value	51,731		0		0		35,879		87,610
Accumulated impairment losses	(6,168)		0		0		(19,788)		(25,956)
Net carrying value	$	45,563	$	0	$	0	$	16,091	$	61,654

As a result of COVID-19 and the temporary suspension of operations at our resorts (see Note 1), the forecasted future cash flows of our reporting units materially decreased during the first quarter of 2020. We performed an interim quantitative impairment analysis as of March 31, 2020 and recognized ~~$17.0 million of~~ goodwill impairment losses at the following reporting units ~~within impairment loss in the Condensed Consolidated Statements of Operations~~ for the three months ended March 31, 2020 as we determined that their carrying values exceeded their fair value ($ in thousands):

Reporting Unit

Reportable Segment

Impairment Loss~~(1)~~

Jewel Runaway Bay Beach Resort & Waterpark

Jamaica

~~7,318~~6,946

Jewel Dunn’s River Beach Resort & Spa

Jamaica

~~5,400~~5,126

Jewel Paradise Cove Beach Resort & Spa

Jamaica

~~4,321~~4,101

~~________~~

~~(1)~~ ~~As a result of the immaterial correction to goodwill noted above, we recognized an additional $0.9 million in impairment losses on these three reporting units during the third quarter of 2020.~~

We recognized 0 ~~additional~~ goodwill impairment losses on our reporting units ~~based on our interim quantitative impairment analysis as of~~during the three and six months ended June 30, ~~2020.~~2021.

Other intangible assets

Other intangible assets as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 consisted of the following ($ in thousands):


		As of September 30,		As of December 31,			As of June 30,		As of December 31,
		2020		2019			2021		2020
Gross carrying value	Gross carrying value					Gross carrying value
Casino and other licenses (1)	Casino and other licenses (1)	$	875	$	875	Casino and other licenses (1)	$	875	$	875
Management contract	Management contract	1,900		1,900		Management contract	1,900		1,900
Enterprise resource planning system (2)	Enterprise resource planning system (2)	5,633		5,187		Enterprise resource planning system (2)	6,159		6,047
Other	Other	4,274		3,346		Other	4,230		4,238
Total gross carrying value	Total gross carrying value	12,682		11,308		Total gross carrying value	13,164		13,060

Accumulated amortization	Accumulated amortization					Accumulated amortization
Management contract	Management contract	(214)		(143)		Management contract	(285)		(238)
Enterprise resource planning system (2)	Enterprise resource planning system (2)	(941)		(437)		Enterprise resource planning system (2)	(1,494)		(1,125)
Other	Other	(2,999)		(2,320)		Other	(3,345)		(3,141)
Total accumulated amortization	Total accumulated amortization	(4,154)		(2,900)		Total accumulated amortization	(5,124)		(4,504)

Net carrying value	Net carrying value					Net carrying value
Casino and other licenses (1)	Casino and other licenses (1)	875		875		Casino and other licenses (1)	875		875
Management contract	Management contract	1,686		1,757		Management contract	1,615		1,662
Enterprise resource planning system (2)	Enterprise resource planning system (2)	4,692		4,750		Enterprise resource planning system (2)	4,665		4,922
Other	Other	1,275		1,026		Other	885		1,097
Total net carrying value	Total net carrying value	$	8,528	$	8,408	Total net carrying value	$	8,040	$	8,556

________

(1) Our casino and other licenses have indefinite lives. Accordingly, there is no associated amortization expense or accumulated amortization.

(2) Represents software development costs incurred to develop and implement SAP as our integrated enterprise resource planning ~~(“ERP”)~~ system, of which $1.4 ~~million and $2.6~~ million was placed into service in 2020 and ~~2019, respectively and are~~is being amortized over a weighted-average amortization period of 7 years.

Amortization expense for intangible assets was ~~$1.3~~$0.7 million and ~~$0.8~~$0.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, respectively, and ~~$0.6~~$0.4 million and ~~$0.2~~$0.4 million for the three months ended ~~September~~June 30, 2021 and 2020, ~~and 2019,~~ respectively.

Trade and other payables

The following summarizes the balances of trade and other payables as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 ($ in thousands):


		As of September 30,		As of December 31,			As of June 30,		As of December 31,
		2020		2019			2021		2020
Trade payables	Trade payables	$	17,308	$	45,299	Trade payables	$	21,909	$	23,348
Advance deposits (1)	Advance deposits (1)	25,086		53,769		Advance deposits (1)	39,971		29,707
Withholding and other taxes payable	Withholding and other taxes payable	37,261		46,983		Withholding and other taxes payable	34,287		37,450
Interest payable	Interest payable	1,455		125		Interest payable	99		618
Payroll and related accruals	Payroll and related accruals	14,090		14,547		Payroll and related accruals	17,819		15,668
Accrued expenses and other payables	Accrued expenses and other payables	18,937		20,880		Accrued expenses and other payables	24,449		16,619
Total trade and other payables	Total trade and other payables	$	114,137	$	181,603	Total trade and other payables	$	138,534	$	123,410

________

(1) The opening balance as of January 1, ~~2019~~2020 was ~~$57.3~~$53.8 million.

Other liabilities

The following summarizes the balances of other liabilities as of ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 ($ in thousands):


		As of September 30,		As of December 31,			As of June 30,		As of December 31,
		2020		2019			2021		2020
Pension obligation (1)(2)	Pension obligation (1)(2)	$	5,563	$	6,764	Pension obligation (1)(2)	$	6,313	$	6,231
Lease liabilities	Lease liabilities	4,937		6,208		Lease liabilities	4,391		4,762
Unfavorable ground lease liability	Unfavorable ground lease liability	2,114		2,187		Unfavorable ground lease liability	2,044		2,090
Key money (3)	Key money (3)	16,024		8,225		Key money (3)	15,323		15,790
Other	Other	883		923		Other	900		895
Total other liabilities	Total other liabilities	$	29,521	$	24,307	Total other liabilities	$	28,971	$	29,768

________

(1) For the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, the service cost component of net periodic pension cost was ~~$0.6~~$0.4 million and ~~$0.6~~$0.4 million, respectively. For the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, the service cost component of net periodic pension cost was $0.2 million and $0.2 million, respectively. These costs are recorded within direct expense in the Condensed Consolidated Statements of Operations.

(2) For the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, the non-service cost components of net periodic pension benefit or cost were ~~$1.6~~$0.5 million and ~~$0.4~~$1.3 million, respectively. For the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, the non-service cost components of net periodic pension benefit or cost were ~~$0.3~~$0.4 million and ~~$0.2~~$0.7 million, respectively. These costs are recorded within other (expense) income ~~(expense)~~ in the Condensed Consolidated Statements of Operations.

(3) Represents the unamortized balance of key money received, which is amortized as a reduction to franchise fees within direct expenses in the Condensed Consolidated Statements of Operations. We received $8.5 million ~~and $6.5 million~~of additional key money in ~~2020 and 2019, respectively.~~2020.

Note 15. 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 4 separate reportable segments by geography: (i) Yucatán Peninsula, (ii) Pacific Coast, (iii) Dominican Republic and (iv) Jamaica. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~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 ~~(provision)~~ benefit, and depreciation and amortization expense (“Adjusted EBITDA”), which should not be considered an alternative to net ~~(loss) income~~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) income,~~loss, determined in accordance with U.S. GAAP, for the period presented, before interest expense, income tax ~~(provision)~~ benefit, and depreciation and amortization expense, further adjusted to exclude the following items: (a) impairment loss; (b) loss on sale of assets; (c) other ~~income~~ (expense)~~; (c) pre-opening expenses;~~ income; (d) share-based compensation; (e) other tax income (expense); (f) transaction expenses; ~~(g) loss on sale of assets;~~ and ~~(h)~~(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 and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 ($ in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Owned net revenue	Owned net revenue									Owned net revenue
Yucatán Peninsula	Yucatán Peninsula	$	17,351	$	50,996	$	79,689	$	180,981	Yucatán Peninsula	$	45,067	$	21	$	78,670	$	62,338
Pacific Coast	Pacific Coast	773		17,404		21,854		65,061		Pacific Coast	20,514		(74)		29,135		21,081
Dominican Republic	Dominican Republic	2,453		14,585		38,060		70,226		Dominican Republic	33,888		11		54,769		35,607
Jamaica	Jamaica	6,458		43,075		58,458		152,686		Jamaica	24,134		564		35,856		52,000
Segment owned net revenue (1)	Segment owned net revenue (1)	27,035		126,060		198,061		468,954		Segment owned net revenue (1)	123,603		522		198,430		171,026
Other	Other	258		14		293		30		Other	369		20		494		35
Management fees	Management fees	8		83		635		1,568		Management fees	452		(18)		796		627
Cost reimbursements	Cost reimbursements	505		1,586		1,913		5,123		Cost reimbursements	969		458		1,482		1,408
Compulsory tips	Compulsory tips	930		5,082		6,044		16,969		Compulsory tips	3,410		0		5,347		5,114
Total revenue	Total revenue	$	28,736	$	132,825	$	206,946	$	492,644	Total revenue	$	128,803	$	982	$	206,549	$	178,210

________

(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~~loss for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 ($ in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Owned Resort EBITDA	Owned Resort EBITDA									Owned Resort EBITDA
Yucatán Peninsula	Yucatán Peninsula	$	(1,820)	$	13,777	$	15,111	$	67,087	Yucatán Peninsula	$	13,022	$	(8,004)	$	20,196	$	16,931
Pacific Coast	Pacific Coast	(2,330)		4,495		3,726		25,451		Pacific Coast	7,078		(2,816)		7,563		6,056
Dominican Republic	Dominican Republic	(6,296)		(1,201)		(3,388)		17,305		Dominican Republic	7,926		(4,881)		9,592		2,908
Jamaica	Jamaica	(7,473)		8,802		3,503		47,781		Jamaica	4,072		(8,097)		1,292		10,976
Segment Owned Resort EBITDA	Segment Owned Resort EBITDA	(17,919)		25,873		18,952		157,624		Segment Owned Resort EBITDA	32,098		(23,798)		38,643		36,871
Other corporate	Other corporate	(8,205)		(10,126)		(26,782)		(28,519)		Other corporate	(9,635)		(7,606)		(19,029)		(18,577)
Management fees	Management fees	8		83		635		1,568		Management fees	452		(18)		796		627
Total Adjusted EBITDA	Total Adjusted EBITDA	(26,116)		15,830		(7,195)		130,673		Total Adjusted EBITDA	22,915		(31,422)		20,410		18,921
Interest expense	Interest expense	(19,973)		(9,936)		(61,844)		(34,796)		Interest expense	(18,950)		(20,916)		(37,117)		(41,871)
Depreciation and amortization	Depreciation and amortization	(22,518)		(29,417)		(69,877)		(77,636)		Depreciation and amortization	(20,017)		(22,400)		(40,900)		(47,359)
Impairment loss	Impairment loss	(867)		0		(42,308)		0		Impairment loss	0		(25,268)		(24,011)		(41,441)
Loss on sale of assets	Loss on sale of assets	0		0		(1,729)		0		Loss on sale of assets	(375)		(1,729)		(648)		(1,729)
Other income (expense)		224		(2,537)		1,171		(2,775)
Pre-opening expenses		0		(257)		0		(548)
Other (expense) income										Other (expense) income	(628)		4,853		(1,334)		947
Share-based compensation	Share-based compensation	(1,925)		(1,850)		(7,867)		(6,612)		Share-based compensation	(3,450)		(2,719)		(6,629)		(5,942)
Other tax income (expense)	Other tax income (expense)	170		318		(298)		(484)		Other tax income (expense)	2		(231)		(161)		(468)
Transaction expenses	Transaction expenses	(541)		(1,253)		(1,416)		(4,493)		Transaction expenses	(139)		(289)		(718)		(875)
Severance expense	Severance expense	(1,448)		(6)		(3,892)		(139)		Severance expense	0		(1,246)		(1,287)		(2,444)
Non-service cost components of net periodic pension (benefit) cost (1)		(311)		177		(1,600)		352
Net (loss) income before tax		(73,305)		(28,931)		(196,855)		3,542
Income tax (provision) benefit		(5,299)		(1,530)		8,237		10,025
Net (loss) income		$	(78,604)	$	(30,461)	$	(188,618)	$	13,567
Non-service cost components of net periodic pension cost (benefit) (1)										Non-service cost components of net periodic pension cost (benefit) (1)	422		(738)		479		(1,289)
Net loss before tax										Net loss before tax	(20,220)		(102,105)		(91,916)		(123,550)
Income tax benefit										Income tax benefit	12,452		14,647		14,403		13,536
Net loss										Net loss	$	(7,768)	$	(87,458)	$	(77,513)	$	(110,014)

________

(1) Represents the non-service cost components of net periodic pension cost (benefit) ~~cost~~ recorded within other (expense) 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 ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019~~2020 ($ in thousands):


		As of September 30,		As of December 31,			As of June 30,		As of December 31,
		2020		2019			2021		2020
Segment property and equipment, gross	Segment property and equipment, gross					Segment property and equipment, gross
Yucatán Peninsula	Yucatán Peninsula	$	865,703	$	865,900	Yucatán Peninsula	$	665,211	$	799,849
Pacific Coast	Pacific Coast	288,429		288,358		Pacific Coast	288,357		288,328
Dominican Republic	Dominican Republic	677,125		667,120		Dominican Republic	679,941		678,900
Jamaica	Jamaica	405,733		499,569		Jamaica	407,133		406,047
Total segment property and equipment, gross	Total segment property and equipment, gross	2,236,990		2,320,947		Total segment property and equipment, gross	2,040,642		2,173,124
Corporate property and equipment, gross	Corporate property and equipment, gross	4,499		7,320		Corporate property and equipment, gross	4,589		4,505
Accumulated depreciation	Accumulated depreciation	(451,589)		(398,353)		Accumulated depreciation	(432,457)		(450,246)
Total property and equipment, net	Total property and equipment, net	$	1,789,900	$	1,929,914	Total property and equipment, net	$	1,612,774	$	1,727,383

The following table presents segment capital expenditures and a reconciliation to total capital expenditures for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 ($ in thousands):


		Nine Months Ended September 30,					Six Months Ended June 30,
		2020		2019			2021		2020
Segment capital expenditures	Segment capital expenditures					Segment capital expenditures
Yucatán Peninsula	Yucatán Peninsula	$	3,423	$	18,256	Yucatán Peninsula	$	1,251	$	2,348
Pacific Coast	Pacific Coast	1,120		1,476		Pacific Coast	307		230
Dominican Republic	Dominican Republic	6,728		142,518		Dominican Republic	1,631		4,286
Jamaica	Jamaica	2,364		3,204		Jamaica	2,138		1,809
Total segment capital expenditures (1)	Total segment capital expenditures (1)	13,635		165,454		Total segment capital expenditures (1)	5,327		8,673
Corporate	Corporate	149		9,076		Corporate	118		331
Total capital expenditures (1)	Total capital expenditures (1)	$	13,784	$	174,530	Total capital expenditures (1)	$	5,445	$	9,004

________

(1) Represents gross additions to property and equipment.

Note 16. Subsequent events

In preparing the interim Condensed Consolidated Financial Statements, there were no subsequent events since ~~September~~June 30, ~~2020 other than the following:~~

Subsequent to September 30, 2020, the global economy has continued to be severely impacted by the COVID-19 pandemic. We cannot predict when the effects of the pandemic will subside, and thus we cannot predict when we will be able to reopen all of our remaining resorts, whether our resorts will be permitted to remain open or when our business will return to normalized levels. There also can be no guarantee that when the effects of the pandemic subside that there will not be a later resurgence of the virus or that the demand for lodging, and consumer confidence in travel generally, will recover as quickly as other industries. The longer and more severe the pandemic, and the possibility of repeat or cyclical outbreaks of the virus beyond the one currently being experienced, the greater the material adverse effect the pandemic will have on our business, results of operations, cash flows, financial condition, access to credit markets and ability to service our indebtedness.2021.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of Playa Hotels & Resorts N.V.'s (“Playa”) financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements (our “Condensed Consolidated Financial Statements”) and the notes related thereto which are included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q. Unless the context otherwise requires, “we,” “us,” “our” and the “Company” refer to Playa and its subsidiaries.

Cautionary Note Regarding Forward-Looking Statements

This quarterly report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect our current expectations and projections about future events at the time, and thus involve uncertainty and risk. The words “believe,” “expect,” “anticipate,” “will,” “could,” “would,” “should,” “may,” “plan,” “estimate,” “intend,” “predict,” “potential,” “continue,” and the negatives of these words and other similar expressions generally identify forward looking statements. Forward-looking statements are subject to various factors that could cause actual outcomes or results to differ materially from those indicated in these statements, including the risks described under the sections entitled “Risk Factors” of our Annual Report on Form 10-K, filed with the SEC on ~~February 27, 2020~~March 4, 2021 and ~~this quarterly report~~ as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in our filings with the SEC. Currently, one of the most significant factors that could cause actual outcomes to differ materially from our forward-looking statements is the adverse effects of the current COVID-19 pandemic on our financial condition, ~~operating~~ results of operations and ~~cash flows,~~prospects, the airlines that service the locations where we own resorts, the short and longer-term demand for travel, the global economy and the local economies where we own resorts, and the financial markets. As a result of the COVID-19 pandemic, we ~~temporarily suspended operations~~have experienced severely reduced occupancy levels at ~~all of~~ our resorts ~~from March 2020 until July 2020~~compared to historic levels and ~~operations at 3 of our resorts remain suspended.~~we continue to experience lower occupancy as compared to pre-pandemic levels. The extent to which the COVID-19 pandemic will continue to impact us and consumer behavior will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, ~~any resurgence~~continuing resurgences of the ~~pandemic after conditions initially improve,~~virus and its variants, including the Delta variant, the government actions taken to contain the pandemic or mitigate its impact, the speed, effectiveness and ~~effectiveness~~distribution of vaccine and treatment ~~developments,~~therapies, the rate of public adoption of COVID-19 vaccines, and the direct and indirect economic effects of the pandemic and containment measures, including the magnitude of its impact on unemployment rates, labor-force availability, and consumer discretionary spending, among others. Additional factors that could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements include:

•general economic uncertainty and the effect of general economic conditions on the lodging industry in particular;

•the popularity of the all-inclusive resort model, particularly in the luxury segment of the resort market;

•changes in economic, social or political conditions in the regions we operate, including changes in perception of public-safety and changes in the supply of rooms from competing resorts;

•the success and continuation of our relationships with Hyatt Hotels Corporation (“Hyatt”) and Hilton Worldwide Holdings, Inc. (“Hilton”);

•the volatility of currency exchange rates;

•the success of our branding or rebranding initiatives with our current portfolio and resorts that may be acquired in the future;

•our failure to successfully complete acquisition, expansion, repair and renovation projects in the timeframes and at the costs and returns anticipated;

•changes we may make in timing and scope of our development and renovation projects;

•significant increases in construction and development costs;

•significant increases in utilities costs;

•our ability to obtain and maintain financing arrangements on attractive ~~terms;~~terms or at all;

•our ability to obtain and maintain ample liquidity to fund operations and service debt;

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•the impact of and changes in governmental regulations or the enforcement thereof, tax laws and rates, accounting guidance and similar matters in regions in which we operate;

•the ability of our guests to reach our resorts given government mandated travel ~~restrictions;~~restrictions, as well as the demand for our resorts resulting from government mandated safety protocols and health concerns;

•the effectiveness of our internal controls and our corporate policies and procedures and the success and timing of the remediation efforts for the material weakness that we identified in our internal control over financial reporting;

•changes in personnel and availability of qualified personnel;

•environmental uncertainties and risks related to adverse weather conditions and natural disasters;

•outbreak of widespread contagious ~~diseases;~~diseases other than COVID-19;

•dependence on third parties to provide Internet, telecommunications and network connectivity to our data centers;

•the volatility of the market price and liquidity of our ordinary shares and other of our securities; and

•the increasingly competitive environment in which we operate.

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this quarterly report, except as required by applicable law. You should not place undue reliance on any forward-looking statements, which are based only on information currently available to us (or to third parties making the forward-looking statements).

Overview

Playa is a leading owner, operator and developer of all-inclusive resorts in prime beachfront locations in popular vacation destinations in Mexico and the Caribbean. As of ~~September~~June 30, ~~2020,~~2021, Playa owned and/or managed a total portfolio consisting of 2122 resorts ~~(8,172~~(8,366 rooms) located in Mexico, Jamaica, and the Dominican Republic. In Mexico, Playa owns and manages Hyatt Zilara Cancún, Hyatt Ziva Cancún, Panama Jack Resorts Cancún, Panama Jack Resorts Playa del Carmen, Hilton Playa del Carmen All-Inclusive Resort, Hyatt Ziva Puerto Vallarta and Hyatt Ziva Los Cabos. In Jamaica, Playa owns and manages Hyatt Zilara Rose Hall, Hyatt Ziva Rose Hall, Hilton Rose Hall Resort & Spa, Jewel Grande Montego Bay Resort & Spa, and Jewel Paradise Cove Beach Resort & Spa. In the Dominican Republic, Playa owns and manages the Hilton La Romana All-Inclusive Family Resort, the Hilton La Romana All-Inclusive Adult Resort, Hyatt Zilara Cap Cana and Hyatt Ziva Cap Cana. Playa ~~also~~ owns ~~four~~two resorts in ~~Mexico and~~ the Dominican Republic that are managed by a ~~third party~~third-party and manages five resorts on behalf of third-party owners. Playa ~~manages the Sanctuary Cap Cana~~leverages years of all-inclusive resort operating expertise and relationships with globally recognized hospitality brands to provide a best in ~~the Dominican Republic. We believe that the resorts we own~~class experience and ~~manage are among the finest all-inclusive resorts in the markets they serve. All of~~exceptional value to our ~~resorts offer~~ guests, ~~luxury accommodations, noteworthy architecture, extensive on-site activities~~while building a direct relationship to improve customer acquisition cost and ~~multiple food and beverage options. Our guests also have the opportunity to purchase upgrades from us such as premium rooms, dining experiences, wines and spirits and spa packages.~~drive repeat business.

For the three months ended ~~September~~June 30, ~~2020,~~2021, during which time ~~operations at seven of our resorts were temporarily suspended and all operating resorts~~we had ~~severely~~ reduced occupancy ~~in response to~~as a result of the continuing effects of the COVID-19 pandemic, we generated a net loss of ~~$78.6~~$7.8 million, total revenue of ~~$28.7~~$128.8 million, Net Package RevPAR of ~~$30.71~~$150.98, and Adjusted EBITDA of ~~$(26.1)~~$22.9 million. For the three months ended ~~September~~June 30, ~~2019,~~2020, when all of our resorts were closed due to the initial outbreak of the COVID-19 pandemic, we generated a net loss of ~~$30.5~~$87.5 million, total revenue of ~~$132.8~~$1.0 million, Net Package RevPAR of ~~$169.58~~$0, and Adjusted EBITDA of ~~$15.8~~$(31.4) million.

For the nine months ended September 30, 2020, we generated a net loss of $188.6 million, total revenue of $206.9 million, Net Package RevPAR of $77.58 and Adjusted EBITDA of $(7.2) million. For the nine months ended September 30, 2019, we generated net income of $13.6 million, total revenue of $492.6 million, Net Package RevPAR of $207.22 and Adjusted EBITDA of $130.7 million.

Impact of COVID-19 Pandemic

The COVID-19 pandemic and the public health measures that have been undertaken in response have had a significant adverse impact on the global economy, the travel and hospitality industries and our business starting in the first quarter of 2020. The effects of the COVID-19 pandemic, including related government restrictions, border closings, quarantines, “shelter-in-place” orders and “social distancing,” have significantly disrupted global leisure travel, and ~~has~~have adversely impacted global commercial activity, contributing to

worldwide economic contraction and increased unemployment. We expect that the continuing ~~economic~~ fallout will create headwinds for ~~leisure~~global travel even after ~~the current~~ government restrictions are lifted.

Due to the spread of the COVID-19 pandemic and the associated restrictions placed on international travel, we temporarily suspended operations at all of our resorts in late March ~~2020 and~~2020. We subsequently began reopening our resorts on July 1, ~~2020.~~

~~As of November 1,~~ 2020 ~~18 out of our 21 resorts have reopened:~~


~~Resort~~			~~Date Reopened~~
~~Hilton Playa del Carmen All-Inclusive Resort~~			~~7/1/2020~~
~~Hilton Rose Hall Resort & Spa~~			~~7/1/2020~~
~~Hyatt Zilara Cancún~~			~~7/1/2020~~
~~Hyatt Zilara Rose Hall~~			~~7/1/2020~~
~~Hyatt Ziva Cancún~~			~~7/1/2020~~
~~Hyatt Ziva Rose Hall~~			~~7/1/2020~~
~~Jewel Grande Montego Bay Resort & Spa~~			~~7/1/2020~~
~~Jewel Paradise Cove Beach Resort & Spa~~			~~7/1/2020~~
~~Panama Jack Resorts Cancún~~			~~7/15/2020~~
~~Sanctuary Cap Cana~~			~~7/15/2020~~
~~Hyatt Zilara Cap Cana~~			~~7/22/2020~~
~~Hyatt Ziva Cap Cana~~			~~7/22/2020~~
~~Secrets Capri~~			~~8/3/2020~~
~~Hyatt Ziva Los Cabos~~			~~9/24/2020~~
~~Dreams Puerto Aventuras~~			~~10/1/2020~~
~~Hyatt Ziva Puerto Vallarta~~			~~10/1/2020~~
~~Panama Jack Resorts Playa del Carmen~~			~~10/1/2020~~
~~Dreams Punta Cana~~			~~10/2/2020~~

~~We anticipate opening the remainder~~and all of our resorts ~~during the fourth quarter~~are open as of ~~2020.~~

June 30, 2021. Our resorts account for all of our revenue. Following the gradual loosening of government travel restrictions, the availability of vaccines and increased adoption levels of vaccines beginning in the first quarter of 2021, and related increases in available flights to the locations of our resorts, occupancy at our resorts has increased, but still remains well below pre-pandemic levels. Based on our second quarter results and reservations for future periods, we are hopeful that this positive trend in occupancy will continue.

The suspension of operations at our resorts during part of 2020, and the ~~severely~~ reduced occupancy at ~~the~~our resorts ~~that~~since they have reopened, have ~~had a significant adverse effect on~~adversely affected our liquidity. As of ~~September~~June 30, ~~2020,~~2021, we had ~~$195.5~~$237.7 million of available cash, excluding ~~$27.6~~$25.6 million of restricted cash. For discussion of the measures that were previously taken to improve our liquidity during fiscal year 2020, please refer to our Annual Report on Form 10-K filed with the SEC on March 4, 2021. We have taken the following measures during the 2021 fiscal year to further mitigate the impact of the effects of the COVID-19 pandemic on our liquidity position:

•~~we announced on June 12, 2020 that we had~~ raised ~~$224.0~~$138.0 million, net of underwriting discounts, of additional capital ~~from affiliates of Davidson Kempner Capital Management LP (“DK”)~~ in ~~the form of $204.0 million of additional debt financing and $20.0 million of~~January 2021 through an underwritten public equity ~~financing~~offering at ~~a price of $4.10~~$5.00 per share;

•paid down the outstanding balance under our Revolving Credit Facility in February 2021 and also amended and extended our existing facility, further extending the covenant waiver period were we to draw the credit line over 35%;

•sold the ~~Jewel Dunn's River Beach Resort & Spa and the Jewel Runaway Bay Beach Resort & Waterpark~~Dreams Puerto Aventuras in February 2021 for a total cash consideration of ~~$60.0 million. The transaction closed in May 2020;~~$34.5 million; and

•~~we borrowed an additional $40.0 million under our Revolving Credit Facility~~sold the Capri Resort in ~~March 2020, increasing the amount outstanding on the facility to $85.0 million;~~

•~~the temporary suspension~~June 2021 for a total cash consideration of operations of all of our resorts significantly reduced the variable cost components of our resort-level operating expenses, including resort franchise and franchise-related fees, management fees and expenses related to our resort employees;$55.2 million.

•~~we have deferred all of our non-critical capital expenditures planned for 2020 and intend to spend a minimal amount on emergency capital expenditures;~~

•~~we adopted temporary voluntary senior executive salary reductions while the majority of our resorts were closed, and our Chief Executive Officer’s voluntary 100% salary reduction remains in place;~~

•~~we imposed temporary compensation cuts broadly throughout our corporate workforce and canceled all non-essential corporate travel and spending; and~~

•~~we have~~ ~~temporarily suspended repurchases of our ordinary shares under our share repurchase program until we have more visibility into the longer-term impact of COVID-19 and economic conditions improve~~.

~~In addition, the reduction in the size of our Board of Directors in 2020 to align with the Company’s size and needs has and will continue to reduce our expenses.~~

We cannot predict when the pandemic and its economic effects ~~of the pandemic~~ will subside, and thus we cannot predict ~~when we will be able to reopen our remaining resorts,~~ whether our resorts will be permitted to remain open or when our business will return to normalized levels. There also can be no guarantee that when the ~~effects of the~~current pandemic ~~subside~~subsides that there will not be ~~a later resurgence~~resurgences of the virus or its variants or that the demand for lodging, and consumer confidence in travel generally, will recover as quickly as other industries. The longer and more severe the pandemic, and the actual occurrence or even the possibility of repeat or cyclical outbreaks of the virus beyond the one currently being experienced, the greater the material adverse effect the pandemic will have on our business, results of operations, cash flows, financial condition, access to credit markets and ability to service our indebtedness. ~~See “Part II - Item 1A. Risk Factors” included elsewhere in this quarterly report for additional information.~~

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Our Portfolio of Resorts

~~The~~As of June 30, 2021, the following table presents an overview of our resorts ~~at September 30, 2020. The table below~~and is organized by our four geographic business segments: the Yucatán Peninsula, the Pacific Coast, the Dominican Republic and Jamaica.

Name of Resort

Location

Brand and Type

Operator

Year Built; Significant Renovations

Rooms

Name of Resort

Location

Brand and Type

Operator

Year Built; Significant Renovations

Rooms

Owned Resorts

Yucatán Peninsula

Hyatt Ziva Cancún

Cancún, Mexico

Hyatt Ziva (all ages)

Playa

1975; 1980; 1986; 2002; 2015

547

Hyatt Ziva Cancún

Cancún, Mexico

Hyatt Ziva (all ages)

Playa

1975; 1980; 1986; 2002; 2015

547

Hyatt Zilara Cancún

Cancún, Mexico

Hyatt Zilara (adults-only)

Playa

2006; 2009; 2013; 2017

310

Hyatt Zilara Cancún

Cancún, Mexico

Hyatt Zilara (adults-only)

Playa

2006; 2009; 2013; 2017

310

Panama Jack Resorts Cancún

Cancún, Mexico

Panama Jack (all ages)

Playa

1985; 2009; 2017

458

Panama Jack Resorts Cancún

Cancún, Mexico

Panama Jack (all ages)

Playa

1985; 2009; 2017

458

Hilton Playa del Carmen All-Inclusive Resort ~~(1)~~

Playa del Carmen, Mexico

Hilton (adults-only)

Playa

2002; 2009; 2019

524

Hilton Playa del Carmen All-Inclusive Resort ~~(1)~~

Playa del Carmen, Mexico

Hilton (adults-only)

Playa

2002; 2009; 2019

524

Panama Jack Resorts Playa del Carmen

Playa del Carmen, Mexico

Panama Jack (all ages)

Playa

1996; 2006; 2012; 2017

287

Panama Jack Resorts Playa del Carmen

Playa del Carmen, Mexico

Panama Jack (all ages)

Playa

1996; 2006; 2012; 2017

287

Secrets Capri

Riviera Maya, Mexico

Secrets (adults-only)

AMResorts

2003

291

Dreams Puerto Aventuras

Riviera Maya, Mexico

Dreams (all ages)

AMResorts

1991; 2009

305

Pacific Coast

Hyatt Ziva Los Cabos

Cabo San Lucas, Mexico

Hyatt Ziva (all ages)

Playa

2007; 2009; 2015

591

Hyatt Ziva Los Cabos

Cabo San Lucas, Mexico

Hyatt Ziva (all ages)

Playa

2007; 2009; 2015

591

Hyatt Ziva Puerto Vallarta

Puerto Vallarta, Mexico

Hyatt Ziva (all ages)

Playa

1969; 1990; 2002; 2009; 2014; 2017

335

Hyatt Ziva Puerto Vallarta

Puerto Vallarta, Mexico

Hyatt Ziva (all ages)

Playa

1969; 1990; 2002; 2009; 2014; 2017

335

Dominican Republic

Hilton La Romana All-Inclusive Resort (2)

La Romana, Dominican Republic

Hilton (adults-only)

Playa (2)

1997; 2008; 2019

356

Hilton La Romana All-Inclusive Resort (2)

La Romana, Dominican Republic

Hilton (all ages)

Playa (2)

1997; 2008; 2019

418

Hilton La Romana All-Inclusive Resort

La Romana, Dominican Republic

Hilton (adults-only)

Playa

1997; 2008; 2019

356

Hilton La Romana All-Inclusive Resort

La Romana, Dominican Republic

Hilton (all ages)

Playa

1997; 2008; 2019

418

Dreams Palm Beach

Punta Cana, Dominican Republic

Dreams (all ages)

AMResorts

1994; 2008

500

Dreams Palm Beach

Punta Cana, Dominican Republic

Dreams (all ages)

AMResorts

1994; 2008

500

Dreams Punta Cana

Punta Cana, Dominican Republic

Dreams (all ages)

AMResorts

2004

620

Dreams Punta Cana

Punta Cana, Dominican Republic

Dreams (all ages)

AMResorts

2004

620

Hyatt Ziva Cap Cana

Cap Cana, Dominican Republic

Hyatt Ziva (all ages)

Playa

2019

375

Hyatt Ziva Cap Cana

Cap Cana, Dominican Republic

Hyatt Ziva (all ages)

Playa

2019

375

Hyatt Zilara Cap Cana

Cap Cana, Dominican Republic

Hyatt Zilara (adults-only)

Playa

2019

375

Hyatt Zilara Cap Cana

Cap Cana, Dominican Republic

Hyatt Zilara (adults-only)

Playa

2019

375

Jamaica

Hyatt Ziva Rose Hall

Montego Bay, Jamaica

Hyatt Ziva (all ages)

Playa

2000; 2014; 2017

276

Hyatt Ziva Rose Hall

Montego Bay, Jamaica

Hyatt Ziva (all ages)

Playa

2000; 2014; 2017

276

Hyatt Zilara Rose Hall

Montego Bay, Jamaica

Hyatt Zilara (adults-only)

Playa

2000; 2014; 2017

344

Hyatt Zilara Rose Hall

Montego Bay, Jamaica

Hyatt Zilara (adults-only)

Playa

2000; 2014; 2017

344

Hilton Rose Hall Resort & Spa

Montego Bay, Jamaica

Hilton (all ages)

Playa

1974; 2008; 2017

495

Hilton Rose Hall Resort & Spa

Montego Bay, Jamaica

Hilton (all ages)

Playa

1974; 2008; 2017

495

Jewel Paradise Cove Beach Resort & Spa

Runaway Bay, Jamaica

Jewel (adults-only)

Playa

2013

225

Jewel Paradise Cove Beach Resort & Spa

Runaway Bay, Jamaica

Jewel (adults-only)

Playa

2013

225

Jewel Grande Montego Bay Resort & Spa (3)

Montego Bay, Jamaica

Jewel (all ages)

Playa

2016; 2017

Jewel Grande Montego Bay Resort & Spa (1)

Montego Bay, Jamaica

Jewel (all ages)

Playa

2016; 2017

Total Rooms Owned

7,720

Total Rooms Owned

7,124

Managed Resorts

Sanctuary Cap Cana (4)

Punta Cana, Dominican Republic

Sanctuary (adults-only)

Playa

2008; 2015; 2018

323

Jewel Grande Montego Bay Resort & Spa (3)

Montego Bay, Jamaica

Jewel (condo-hotel)

Playa

2016; 2017

129

Managed Resorts (2)

Sanctuary Cap Cana

Punta Cana, Dominican Republic

Sanctuary (adults-only)

Playa

2008; 2015; 2018

324

Jewel Grande Montego Bay Resort & Spa (1)

Montego Bay, Jamaica

Jewel (condo-hotel)

Playa

2016; 2017

129

The Yucatan Playa Del Carmen All-Inclusive Resort

Playa del Carmen, Mexico

Tapestry Collection by Hilton (adults-only)

Playa

2012

Hyatt Ziva Riviera Cancún (3)

Riviera Maya, Mexico

Hyatt Ziva (all ages)

Playa

2008, 2021

438

Hyatt Zilara Riviera Maya (4)

Riviera Maya, Mexico

Hyatt Zilara (adults-only)

Playa

2003

291

Total Rooms Operated

452

Total Rooms Operated

1,242

Total Rooms Owned and Operated

8,172

Total Rooms Owned and Operated

8,366

________

(1) ~~Effective November 20, 2018, this resort was rebranded into Hilton all-inclusive resort. Renovations were completed in 2019.~~

~~(2)~~ ~~Pursuant to an agreement with Hilton, we rebranded these resorts as Hilton all-inclusive resorts in November 2018. The resorts are still owned and operated by Playa.~~

~~(3)~~ ~~We acquired~~Represents an 88-unit tower and spa ~~as part of the business combination with Sagicor. Additionally, we~~owned by us. We manage the majority of the units within the remaining two condo-hotel towers owned by Sagicor that comprise the Jewel Grande Montego Bay Resort & Spa.

~~(4)~~(2) Owned by a third party.

(3) We entered into a management agreement to operate this resort during the first quarter of 2021. The resort is currently closed for renovations but is expected to open in the third quarter of 2021.

(4) We entered into a management agreement to operate this resort during the second quarter of 2021. The resort is currently closed for renovations but is expected to open in the first quarter of 2022.

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Results of Operations

Three Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020

The following table summarizes our results of operations on a consolidated basis for the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 ($ in thousands):


		Three Months Ended September 30,				Increase / Decrease					Three Months Ended June 30,				Increase / Decrease
		2020		2019		Change		% Change			2021		2020		Change		% Change
Revenue	Revenue									Revenue
Package	Package	$	22,705	$	111,091	$	(88,386)	(79.6)	%	Package	$	104,780	$	302	$	104,478	34,595.4	%
Non-package	Non-package	5,518		20,065		(14,547)		(72.5)	%	Non-package	22,602		240		22,362		9,317.5	%
Management fees	Management fees	8		83		(75)		(90.4)	%	Management fees	452		(18)		470		2,611.1	%
Cost reimbursements	Cost reimbursements	505		1,586		(1,081)		(68.2)	%	Cost reimbursements	969		458		511		111.6	%
Total revenue	Total revenue	28,736		132,825		(104,089)		(78.4)	%	Total revenue	128,803		982		127,821		13,016.4	%
Direct and selling, general and administrative expenses	Direct and selling, general and administrative expenses									Direct and selling, general and administrative expenses
Direct	Direct	35,679		87,252		(51,573)		(59.1)	%	Direct	79,534		20,380		59,154		290.3	%
Selling, general and administrative	Selling, general and administrative	22,943		30,771		(7,828)		(25.4)	%	Selling, general and administrative	28,550		19,739		8,811		44.6	%
Pre-opening		—		257		(257)		(100.0)	%
Depreciation and amortization	Depreciation and amortization	22,518		29,417		(6,899)		(23.5)	%	Depreciation and amortization	20,017		22,400		(2,383)		(10.6)	%
Reimbursed costs	Reimbursed costs	505		1,586		(1,081)		(68.2)	%	Reimbursed costs	969		458		511		111.6	%
Impairment loss	Impairment loss	867		—		867		100.0	%	Impairment loss	—		25,268		(25,268)		(100.0)	%

Loss on sale of assets										Loss on sale of assets	375		1,729		(1,354)		(78.3)	%
Gain on insurance proceeds	Gain on insurance proceeds	(220)		—		(220)		100.0	%	Gain on insurance proceeds	—		(2,950)		2,950		(100.0)	%
Direct and selling, general and administrative expenses	Direct and selling, general and administrative expenses	82,292		149,283		(66,991)		(44.9)	%	Direct and selling, general and administrative expenses	129,445		87,024		42,421		48.7	%
Operating loss	Operating loss	(53,556)		(16,458)		(37,098)		225.4	%	Operating loss	(642)		(86,042)		85,400		99.3	%
Interest expense	Interest expense	(19,973)		(9,936)		(10,037)		101.0	%	Interest expense	(18,950)		(20,916)		1,966		9.4	%
Other income (expense)		224		(2,537)		2,761		(108.8)	%
Other (expense) income										Other (expense) income	(628)		4,853		(5,481)		(112.9)	%
Net loss before tax	Net loss before tax	(73,305)		(28,931)		(44,374)		153.4	%	Net loss before tax	(20,220)		(102,105)		81,885		80.2	%
Income tax provision		(5,299)		(1,530)		(3,769)		246.3	%
Income tax benefit										Income tax benefit	12,452		14,647		(2,195)		(15.0)	%
Net loss	Net loss	$	(78,604)	$	(30,461)	$	(48,143)	158.0	%	Net loss	$	(7,768)	$	(87,458)	$	79,690	91.1	%

The tables below set forth information for our total portfolio and our comparable portfolio with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Management Fee Revenue, Total Net Revenue, Adjusted EBITDA and Adjusted EBITDA Margin. For a description of these operating metrics and non-U.S. GAAP measures, see “Key Indicators of Financial and Operating Performance” below. For discussion of Adjusted EBITDA and reconciliation to the most comparable U.S. GAAP financial measures, see “Key Indicators of Financial and Operating Performance” and “Non-U.S. GAAP Financial Measures” below.

Our comparable portfolio for the three months ended ~~September~~June 30, ~~2020~~2021 excludes the following resorts: ~~Hilton La Romana All-Inclusive Resort and Hilton Playa del Carmen All-Inclusive~~Capri Resort, which ~~were under renovation~~was sold in ~~2019, Hyatt Ziva and Hyatt Zilara Cap Cana, a ground-up development opened November 2019~~June 2021, Dreams Puerto Aventuras, which was sold in February 2021, and Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark, which were sold in May 2020.

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Total Portfolio


		Three Months Ended September 30,						Increase / Decrease						Three Months Ended June 30,						Increase / Decrease
		2020			2019			Change			% Change			2021			2020			Change			% Change
Occupancy	Occupancy	11.1		%	75.5		%	(64.4)		pts	(85.3)	%	Occupancy	49.9		%	—		%	49.9		pts	—	%
Net Package ADR	Net Package ADR	$	275.71		$	224.60		$	51.11		22.8	%	Net Package ADR	$	302.71		$	—		$	302.71		—	%
Net Package RevPAR	Net Package RevPAR	$	30.71		$	169.58		$	(138.87)		(81.9)	%	Net Package RevPAR	$	150.98		$	—		$	150.98		—	%
		($ in thousands)												($ in thousands)
Net Package Revenue	Net Package Revenue	$	21,813		$	106,954		$	(85,141)		(79.6)	%	Net Package Revenue	$	101,615		$	302		$	101,313		33,547.4	%
Net Non-package Revenue	Net Non-package Revenue	5,480			19,120			(13,640)			(71.3)	%	Net Non-package Revenue	22,357			240			22,117			9,215.4	%
Management Fee Revenue	Management Fee Revenue	8			83			(75)			(90.4)	%	Management Fee Revenue	452			(18)			470			2,611.1	%
Total Net Revenue	Total Net Revenue	27,301			126,157			(98,856)			(78.4)	%	Total Net Revenue	124,424			524			123,900			23,645.0	%
Adjusted EBITDA	Adjusted EBITDA	$	(26,116)		$	15,830		$	(41,946)		(265.0)	%	Adjusted EBITDA	$	22,915		$	(31,422)		$	54,337		172.9	%
Adjusted EBITDA Margin	Adjusted EBITDA Margin	(95.7)		%	12.5		%	(108.2)		pts	(865.6)	%	Adjusted EBITDA Margin	18.4		%	(5,996.6)		%	6,015.0		pts	100.3	%

Comparable Portfolio


		Three Months Ended September 30,						Increase / Decrease						Three Months Ended June 30,						Increase / Decrease
		2020			2019			Change			% Change			2021			2020			Change			% Change
Occupancy	Occupancy	11.8		%	76.7		%	(64.9)		pts	(84.6)	%	Occupancy	51.8		%	—		%	51.8		pts	—	%
Net Package ADR	Net Package ADR	$	281.95		$	231.37		$	50.58		21.9	%	Net Package ADR	$	302.89		$	—		$	302.89		—	%
Net Package RevPAR	Net Package RevPAR	$	33.23		$	177.55		$	(144.32)		(81.3)	%	Net Package RevPAR	$	156.84		$	—		$	156.84		—	%
		($ in thousands)												($ in thousands)
Net Package Revenue	Net Package Revenue	$	17,337		$	92,649		$	(75,312)		(81.3)	%	Net Package Revenue	$	101,677		$	292		$	101,385		34,720.9	%
Net Non-package Revenue	Net Non-package Revenue	4,200			16,059			(11,859)			(73.8)	%	Net Non-package Revenue	22,332			224			22,108			9,869.6	%
Management Fee Revenue	Management Fee Revenue	8			83			(75)			(90.4)	%	Management Fee Revenue	452			(18)			470			2,611.1	%
Total Net Revenue	Total Net Revenue	21,545			108,791			(87,246)			(80.2)	%	Total Net Revenue	124,461			498			123,963			24,892.2	%
Adjusted EBITDA	Adjusted EBITDA	$	(20,052)		$	16,034		$	(36,086)		(225.1)	%	Adjusted EBITDA	$	23,593		$	(28,653)		$	52,246		182.3	%
Adjusted EBITDA Margin	Adjusted EBITDA Margin	(93.1)		%	14.7		%	(107.8)		pts	(733.3)	%	Adjusted EBITDA Margin	19.0		%	(5,753.6)		%	5,772.6		pts	100.3	%

Total Revenue and Total Net Revenue

Our total revenue for the three months ended ~~September~~June 30, ~~2020 decreased $104.1~~2021 increased $127.8 million, or ~~78.4%~~13,016.4%, compared to the three months ended ~~September~~June 30, ~~2019.~~2020. Our Total Net Revenue for the three months ended ~~September~~June 30, ~~2020 decreased $98.9~~2021 increased $123.9 million, or ~~78.4%~~23,645.0%, compared to the three months ended ~~September~~June 30, ~~2019.~~2020. These ~~decreases~~increases are due to the ~~closures or reduced occupancy at~~resumption of resort operations this year as compared to the second quarter of 2020 (during which time all of our resorts during the third quarter as a result of the COVID-19 pandemic. Total Net Revenue during the third quarter includes a $2.9 million favorable VAT tax adjustment following OECD guidelines for Transfer Pricing for Multinational Enterprises which considers the economic impact of the COVID-19 pandemic. This adjustment results in a favorable adjustment to Net Package Revenue and Net Package ADR. Excluding this adjustment, Net Package Revenue would be $18.9 million and Net Package ADR would be $239.50, representing a decrease of 82.3% and an increase of 6.6%, respectively for the three months ended September 30, 2020.were closed). See “Impact of COVID-19 Pandemic” above for more information regarding the effects of the COVID-19 pandemic on our results of operations.

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The following table shows a reconciliation of comparable Net Package Revenue, Net Non-package Revenue and Management Fee Revenue to total revenue for the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 ($ in thousands):


		Three Months Ended September 30,				Increase/Decrease					Three Months Ended June 30,				Increase/Decrease
		2020		2019		Change		% Change			2021		2020		Change		% Change
Net Package Revenue	Net Package Revenue									Net Package Revenue
Comparable Net Package Revenue	Comparable Net Package Revenue	$	17,337	$	92,649	$	(75,312)	(81.3)	%	Comparable Net Package Revenue	$	101,677	$	292	$	101,385	34,720.9	%
Non-comparable Net Package Revenue	Non-comparable Net Package Revenue	4,476		14,305		(9,829)		(68.7)	%	Non-comparable Net Package Revenue	(62)		10		(72)		(720.0)	%
Net Package Revenue	Net Package Revenue	21,813		106,954		(85,141)		(79.6)	%	Net Package Revenue	101,615		302		101,313		33,547.4	%

Net Non-package Revenue	Net Non-package Revenue									Net Non-package Revenue
Comparable Net Non-package Revenue	Comparable Net Non-package Revenue	4,200		16,059		(11,859)		(73.8)	%	Comparable Net Non-package Revenue	22,332		224		22,108		9,869.6	%
Non-comparable Net Non-package Revenue	Non-comparable Net Non-package Revenue	1,280		3,061		(1,781)		(58.2)	%	Non-comparable Net Non-package Revenue	25		16		9		56.3	%
Net Non-package Revenue	Net Non-package Revenue	5,480		19,120		(13,640)		(71.3)	%	Net Non-package Revenue	22,357		240		22,117		9,215.4	%

Management Fee Revenue	Management Fee Revenue									Management Fee Revenue
Comparable Management Fee Revenue	Comparable Management Fee Revenue	8		83		(75)		(90.4)	%	Comparable Management Fee Revenue	452		(18)		470		2,611.1	%
Non-comparable Management Fee Revenue	Non-comparable Management Fee Revenue	—		—		—		—	%	Non-comparable Management Fee Revenue	—		—		—		—	%
Management Fee Revenue	Management Fee Revenue	8		83		(75)		(90.4)	%	Management Fee Revenue	452		(18)		470		2,611.1	%

Total Net Revenue	Total Net Revenue									Total Net Revenue
Comparable Total Net Revenue	Comparable Total Net Revenue	21,545		108,791		(87,246)		(80.2)	%	Comparable Total Net Revenue	124,461		498		123,963		24,892.2	%
Non-comparable Total Net Revenue	Non-comparable Total Net Revenue	5,756		17,366		(11,610)		(66.9)	%	Non-comparable Total Net Revenue	(37)		26		(63)		(242.3)	%
Total Net Revenue	Total Net Revenue	27,301		126,157		(98,856)		(78.4)	%	Total Net Revenue	124,424		524		123,900		23,645.0	%
Compulsory tips	Compulsory tips	930		5,082		(4,152)		(81.7)	%	Compulsory tips	3,410		—		3,410		—	%
Cost Reimbursements	Cost Reimbursements	505		1,586		(1,081)		(68.2)	%	Cost Reimbursements	969		458		511		111.6	%
Total revenue	Total revenue	$	28,736	$	132,825	$	(104,089)	(78.4)	%	Total revenue	$	128,803	$	982	$	127,821	13,016.4	%

Comparable Total Net Revenue

Our Comparable Total Net Revenue for the three months ended ~~September~~June 30, ~~2020 decreased $87.2~~2021 increased $124.0 million, or ~~80.2%~~24,892.2%, compared to the three months ended ~~September~~June 30, ~~2019.~~2020. These ~~decreases~~increases are due to the ~~closures or reduced occupancy at~~resumption of resort operations this quarter as compared to the second quarter of 2020 (during which time all of our resorts ~~during the third quarter as a result of the COVID-19 pandemic.~~were closed). See “Impact of COVID-19 Pandemic” above for more information regarding the effects of the COVID-19 pandemic on our results of operations.

Direct Expenses

The following table shows a reconciliation of our direct expenses to Net Direct Expenses for the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 ($ in thousands):


		Three Months Ended September 30,				Increase/Decrease					Three Months Ended June 30,				Increase/Decrease
		2020		2019		Change		% Change			2021		2020		Change		% Change
Direct expenses	Direct expenses	$	35,679	$	87,252	$	(51,573)	(59.1)	%	Direct expenses	$	79,534	$	20,380	$	59,154	290.3	%
Less: compulsory tips	Less: compulsory tips	930		5,082		(4,152)		(81.7)	%	Less: compulsory tips	3,410		—		3,410		—	%
Net Direct Expenses	Net Direct Expenses	$	34,749	$	82,170	$	(47,421)	(57.7)	%	Net Direct Expenses	$	76,124	$	20,380	$	55,744	273.5	%

Our direct expenses include resort expenses, such as food and beverage, salaries and wages, utilities and other ongoing operational expenses. Our Net Direct Expenses were ~~$34.7~~$76.1 million, or ~~127.3%~~61.2% of Total Net Revenue, for the three months ended ~~September~~June 30, ~~2020~~2021 and ~~$82.2~~$20.4 million, or ~~65.1%~~3,889.3% of Total Net Revenue, for the three months ended ~~September~~June 30, ~~2019.~~2020.

Net Direct Expenses for the three months ended ~~September~~June 30, ~~2020 decreased $47.4~~2021 increased $55.7 million, or ~~57.7%~~273.5%, compared to the three months ended ~~September~~June 30, ~~2019.~~2020. Net Direct Expenses at our comparable properties ~~decreased $41.2~~increased $56.2 million, or ~~60.3%~~294.8%, compared to the three months ended ~~September~~June 30, ~~2019.~~2020. Net Direct Expenses ~~decreases~~increases are due to the ~~closures or reduced occupancy at all~~resumption of ~~our resorts during the third quarter and cost cutting measures taken in response~~resort operations this year as compared to the ~~COVID-19 pandemic. Direct operating expenses~~

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second quarter of 2020 (during which time all of our resorts were closed). Direct operating expenses fluctuate based on various factors, including changes in occupancy, labor costs, utilities, repair and maintenance costs and license and property taxes. Management fees and franchise fees, which are computed as a percentage of revenue, ~~increase/~~increase or decrease as a result of changes in revenues.

Net Direct Expenses consists of the following items ($ in thousands):

Total Portfolio


		Three Months Ended September 30,				Increase/Decrease					Three Months Ended June 30,				Increase/Decrease
		2020		2019		Change		% Change			2021		2020		Change		% Change

Food and beverages	Food and beverages	$	4,876	$	20,063	$	(15,187)	(75.7)	%	Food and beverages	$	16,517	$	702	$	15,815	2,252.8	%
Salaries and wages	Salaries and wages	16,610		31,341		(14,731)		(47.0)	%	Salaries and wages	28,387		11,393		16,994		149.2	%
Repairs and maintenance	Repairs and maintenance	2,426		4,231		(1,805)		(42.7)	%	Repairs and maintenance	3,983		1,478		2,505		169.5	%
Utilities and sewerage	Utilities and sewerage	5,242		9,657		(4,415)		(45.7)	%	Utilities and sewerage	8,632		3,312		5,320		160.6	%
Licenses and property taxes	Licenses and property taxes	477		611		(134)		(21.9)	%	Licenses and property taxes	750		898		(148)		(16.5)	%
Incentive and management fees ~~(1)~~	Incentive and management fees ~~(1)~~	(437)		874		(1,311)		(150.0)	%	Incentive and management fees ~~(1)~~	287		(256)		543		212.1	%
Franchise / license fees	Franchise / license fees	1,151		4,850		(3,699)		(76.3)	%	Franchise / license fees	5,737		1,227		4,510		367.6	%
Transportation and travel expenses	Transportation and travel expenses	592		1,076		(484)		(45.0)	%	Transportation and travel expenses	997		74		923		1,247.3	%
Laundry and cleaning expenses	Laundry and cleaning expenses	665		1,188		(523)		(44.0)	%	Laundry and cleaning expenses	1,074		270		804		297.8	%
Property and equipment rental expense	Property and equipment rental expense	34		494		(460)		(93.1)	%	Property and equipment rental expense	454		(31)		485		1,564.5	%
Entertainment expenses and decoration	Entertainment expenses and decoration	586		1,704		(1,118)		(65.6)	%	Entertainment expenses and decoration	1,706		14		1,692		12,085.7	%
Office supplies	Office supplies	122		257		(135)		(52.5)	%	Office supplies	239		59		180		305.1	%
Other operational expenses	Other operational expenses	2,405		5,824		(3,419)		(58.7)	%	Other operational expenses	7,361		1,240		6,121		493.6	%
Total Net Direct Expenses	Total Net Direct Expenses	$	34,749	$	82,170	$	(47,421)	(57.7)	%	Total Net Direct Expenses	$	76,124	$	20,380	$	55,744	273.5	%

Comparable Portfolio

Three Months Ended September 30, Increase/Decrease
2020 2019 Change % Change
Food and beverages $ 3,710 $ 16,704 $ (12,994) (77.8) %
Salaries and wages 13,166 25,766 (12,600) (48.9) %
Repairs and maintenance 2,009 3,278 (1,269) (38.7) %
Utilities and sewerage 4,032 7,890 (3,858) (48.9) %
Licenses and property taxes 177 458 (281) (61.4) %
Incentive and management fees (1)
(437) 890 (1,327) (149.1) %
Franchise / license fees 975 4,485 (3,510) (78.3) %
Transportation and travel expenses 346 886 (540) (60.9) %
Laundry and cleaning expenses 564 892 (328) (36.8) %
Property and equipment rental expense 13 403 (390) (96.8) %
Entertainment expenses and decoration 487 1,550 (1,063) (68.6) %
Office supplies 103 216 (113) (52.3) %
Other operational expenses 1,941 4,882 (2,941) (60.2) %
Total Net Direct Expenses $ 27,086 $ 68,300 $ (41,214) (60.3) %

~~________~~


	Three Months Ended June 30,				Increase/Decrease
	2021		2020		Change		% Change

Food and beverages	$	16,517	$	642	$	15,875	2,472.7	%
Salaries and wages	27,992		10,751		17,241		160.4	%
Repairs and maintenance	3,939		1,236		2,703		218.7	%
Utilities and sewerage	8,570		2,999		5,571		185.8	%
Licenses and property taxes	686		829		(143)		(17.2)	%
Incentive and management fees	287		(171)		458		267.8	%
Franchise / license fees	5,737		1,227		4,510		367.6	%
Transportation and travel expenses	991		62		929		1,498.4	%
Laundry and cleaning expenses	1,073		259		814		314.3	%
Property and equipment rental expense	453		(25)		478		1,912.0	%
Entertainment expenses and decoration	1,707		14		1,693		12,092.9	%
Office supplies	238		57		181		317.5	%
Other operational expenses	7,134		1,198		5,936		495.5	%
Total Net Direct Expenses	$	75,324	$	19,078	$	56,246	294.8	%

~~(1)~~ ~~Reduction to Net Direct Expenses for the three months ended September 30, 2020 was a result of gross operating losses of our resorts that incur incentive and management fees to third-parties.~~

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Selling, General and Administrative Expenses

Our selling, general and administrative expenses for the three months ended ~~September~~June 30, ~~2020 decreased $7.8~~2021 increased $8.8 million, or ~~25.4%~~44.6%, compared to the three months ended ~~September~~June 30, ~~2019. These decreases were driven by~~2020. The resumption of resort operations this quarter as compared to the ~~closures and reduced occupancy at~~second quarter of 2020 (during which time all of our resorts ~~during the third quarter and cost cutting measures taken~~were closed) resulted in ~~response to the COVID-19 pandemic. These closures and cost cutting measures drove~~ a ~~$6.1~~$6.3 million ~~decrease~~increase in advertising and commissions and a ~~$0.9~~$1.2 million increase in corporate personnel expenses. Additionally, our January 2021 grants of restricted and performance share awards (see Note 9 to the Condensed Consolidated Financial Statements) drove a $0.7 million increase in share-based compensation expense over the prior period. These increases were partially offset by a $1.2 million decrease in ~~property selling, general~~insurance expenses which was driven by the sales of the Jewel Dunn’s River Beach Resort & Spa and ~~administrative expenses, a $0.8 million decrease~~Jewel Runaway Bay Beach Resort & Waterpark in ~~transaction expenses and a $0.9 million decrease in professional fees. These decreases were offset by an increase of $1.3 million in insurance expense.~~May 2020.

Depreciation and Amortization Expense

Our depreciation and amortization expense for the three months ended ~~September~~June 30, ~~2020~~2021 decreased ~~$6.9~~$2.4 million, or ~~23.5%~~10.6%, compared to the three months ended ~~September~~June 30, ~~2019. The decrease~~2020. This was ~~due to~~ a ~~$8.6 million decrease at our 2019 renovation properties, Hilton Playa del Carmen All-Inclusive Resort and Hilton La Romana All-Inclusive Resort that incurred accelerated depreciation in 2019 and~~result of a ~~$1.6~~$2.1 million decrease due to ~~no longer holding in our portfolio~~the sales of the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark ~~which were sold~~ in May ~~2020. This decrease was partially offset by~~2020, the ~~opening of Hyatt Ziva~~Dreams Puerto Aventuras in February 2021, and ~~Hyatt Zilara Cap Cana~~the Capri Resort in ~~the fourth quarter of 2019, which accounted for a $3.1 million increase.~~June 2021.

Impairment Loss

Our impairment loss for the three months ended ~~September~~June 30, ~~2020 increased $0.9~~2021 decreased $25.3 million, or 100.0%, compared to the three months ended ~~September~~June 30, ~~2019.~~2020. The ~~increase resulted from the correction~~decrease was driven by $25.3 million of ~~an immaterial error for acquired~~ property and equipment ~~from~~impairment recognized upon classification of the ~~business combination with Sagicor in 2018. For further details see Note 14 to our Condensed Consolidated Financial Statements.~~Jewel Runaway Bay Beach Resort & Waterpark and Jewel Dunn’s River Beach Resort & Spa as held for sale during the three months ended June 30, 2020. We had no property and equipment or goodwill impairment losses during the three months ended June 30, 2021.

Interest Expense

Our interest expense for the three months ended ~~September~~June 30, 2021 decreased $2.0 million, or 9.4%, compared to the three months ended June 30, 2020. The decrease in interest expense was primarily driven by a $7.0 million decrease due to the change in fair value of our interest rate swaps. Due to the significant drop in interest rates during 2020 resulting from the COVID-19 pandemic, we recognized a non-cash loss on our interest rate swaps of $5.0 million during the three months ended June 30, 2020, compared to a non-cash gain on our interest rate swaps of $2.0 million during the three months ended June 30, 2021. These decreases were partially offset by additional interest expense from the Additional Senior Secured Credit Facility and Property Loan Agreement executed on June 12, 2020 by $1.7 million and $2.4 million, respectively.

Cash interest paid increased ~~$10.0~~to $19.9 million ~~or 101.0%,~~for the three months ended June 30, 2021 as compared to the three months ended September 30, 2019. The increase in interest expense was driven primarily by $3.6 million capitalized interest recorded in the three months ended September 30, 2019 related to our development projects in 2019. For the three months ended SeptemberJune 30, 2020, ~~we did not record any capitalized interest. Additionally, our~~representing a $5.0 million increase over the period. Cash interest ~~expense~~paid increased ~~$2.2~~due to the Additional Senior Secured Credit Facility and Property Loan Agreement executed on June 12, 2020 by $2.3 million and $2.6 million, ~~respectively,~~respectively. These increases were partially offset by $0.8 million decrease due to the ~~additional senior secured credit facility and property loan agreement executed on June 12, 2020. Finally,~~repayment of our ~~interest expense increased $0.6 million due to draws on our~~outstanding Revolving Credit ~~Facility.~~Facility balance in February 2021.

~~Cash interest paid, excluding the effects of capitalized interest, increased $5.5 million~~Income Tax Benefit

Our income tax benefit for the three months ended ~~September~~June 30, ~~2020 as~~2021 decreased $2.2 million, or 15.0%, compared to the three months ended ~~September~~June 30, 2019. Cash interest paid increased $2.3 million and $2.0 million, respectively, due to the additional senior secured credit facility and property loan agreement executed on June 12, 2020 and $0.6 million due to draws on our Revolving Credit Facility. As of September 30, 2020, the total amount outstanding under our Revolving Credit Facility was $84.7 million.

~~Income Tax Provision~~

~~For the three months ended September 30, 2020,~~2020. The decrease in our income tax ~~provision~~benefit of $2.2 million was ~~$5.3~~driven primarily by:

•a $1.1 million ~~compared~~decreased tax benefit due to lower pre-tax book losses from our tax paying entities;

•a ~~$1.5~~$0.6 million ~~income~~decreased discrete tax ~~provision~~benefit due to deferred tax liabilities on fixed assets of certain Dominican Republic entities;

•a $0.7 million increased tax expense related to valuation allowances recognized for our Jamaica and Mexico entities; and

•a $5.8 million decreased tax benefit related to the ~~three months ended September 30, 2019. See further details in Note 5 to~~sales of the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark.

These decreases were partially offset by:

•a $4.4 million increased tax benefit associated with the sale of the Capri Resort; and

•a $1.6 million increased tax benefit associated with foreign exchange rate fluctuations, primarily for our ~~Condensed Consolidated Financial Statements.~~Mexican entities.

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Results of Operations

~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020

The following table summarizes our results of operations on a consolidated basis for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 ($ in thousands):


		Nine Months Ended September 30,				Increase / Decrease					Six Months Ended June 30,				Increase / Decrease
		2020		2019		Change		% Change			2021		2020		Change		% Change
Revenue	Revenue									Revenue
Package	Package	$	176,062	$	416,978	$	(240,916)	(57.8)	%	Package	$	168,674	$	153,357	$	15,317	10.0	%
Non-package	Non-package	28,336		68,975		(40,639)		(58.9)	%	Non-package	35,597		22,818		12,779		56.0	%
Management fees	Management fees	635		1,568		(933)		(59.5)	%	Management fees	796		627		169		27.0	%
Cost reimbursements	Cost reimbursements	1,913		5,123		(3,210)		(62.7)	%	Cost reimbursements	1,482		1,408		74		5.3	%
Total revenue	Total revenue	206,946		492,644		(285,698)		(58.0)	%	Total revenue	206,549		178,210		28,339		15.9	%
Direct and selling, general and administrative expenses	Direct and selling, general and administrative expenses									Direct and selling, general and administrative expenses
Direct	Direct	153,957		273,577		(119,620)		(43.7)	%	Direct	139,755		118,278		21,477		18.2	%
Selling, general and administrative	Selling, general and administrative	76,514		94,647		(18,133)		(19.2)	%	Selling, general and administrative	53,218		53,571		(353)		(0.7)	%
Pre-opening		—		548		(548)		(100.0)	%

Depreciation and amortization	Depreciation and amortization	69,877		77,636		(7,759)		(10.0)	%	Depreciation and amortization	40,900		47,359		(6,459)		(13.6)	%
Reimbursed costs	Reimbursed costs	1,913		5,123		(3,210)		(62.7)	%	Reimbursed costs	1,482		1,408		74		5.3	%
Impairment loss	Impairment loss	42,308		—		42,308		100.0	%	Impairment loss	24,011		41,441		(17,430)		(42.1)	%
Loss on sale of assets	Loss on sale of assets	1,729		—		1,729		100.0	%	Loss on sale of assets	648		1,729		(1,081)		(62.5)	%
Gain on insurance proceeds	Gain on insurance proceeds	(3,170)		—		(3,170)		100.0	%	Gain on insurance proceeds	—		(2,950)		2,950		(100.0)	%
Direct and selling, general and administrative expenses	Direct and selling, general and administrative expenses	343,128		451,531		(108,403)		(24.0)	%	Direct and selling, general and administrative expenses	260,014		260,836		(822)		(0.3)	%
Operating (loss) income		(136,182)		41,113		(177,295)		(431.2)	%
Operating loss										Operating loss	(53,465)		(82,626)		29,161		35.3	%
Interest expense	Interest expense	(61,844)		(34,796)		(27,048)		77.7	%	Interest expense	(37,117)		(41,871)		4,754		11.4	%
Other income (expense)		1,171		(2,775)		3,946		(142.2)	%
Net (loss) income before tax		(196,855)		3,542		(200,397)		(5,657.7)	%
Other (expense) income										Other (expense) income	(1,334)		947		(2,281)		(240.9)	%
Net loss before tax										Net loss before tax	(91,916)		(123,550)		31,634		25.6	%
Income tax benefit	Income tax benefit	8,237		10,025		(1,788)		(17.8)	%	Income tax benefit	14,403		13,536		867		6.4	%
Net (loss) income		$	(188,618)	$	13,567	$	(202,185)	(1,490.3)	%
Net loss										Net loss	$	(77,513)	$	(110,014)	$	32,501	29.5	%

The tables below set forth information for our total portfolio and comparable portfolio with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Management Fee Revenue, Total Net Revenue, Adjusted EBITDA and Adjusted EBITDA Margin. For a description of these operating metrics and non-U.S. GAAP measures, see “Key Indicators of Financial and Operating Performance” below. For discussion of Adjusted EBITDA and reconciliation to the most comparable U.S. GAAP financial measures, see “Key Indicators of Financial and Operating Performance” and “Non-U.S. GAAP Financial Measures” below.

Our comparable portfolio for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 excludes the following resorts: ~~Hilton La Romana All-Inclusive Resort and Hilton Playa del Carmen All-Inclusive~~Capri Resort, which ~~were under renovation~~was sold in ~~2019, Hyatt Ziva and Hyatt Zilara Cap Cana, a ground-up development opened November 2019~~June of 2021, Dreams Puerto Aventuras, which was sold in February 2021, and Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark, which were sold in May 2020.

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Total Portfolio


		Nine Months Ended September 30,						Increase / Decrease						Six Months Ended June 30,						Increase / Decrease
		2020			2019			Change			% Change			2021			2020			Change			% Change
Occupancy	Occupancy	26.4		%	78.5		%	(52.1)		pts	(66.4)	%	Occupancy	40.7		%	33.6		%	7.1		pts	21.1	%
Net Package ADR	Net Package ADR	$	294.33		$	263.99		$	30.34		11.5	%	Net Package ADR	$	297.31		$	297.28		$	0.03		0.0	%
Net Package RevPAR	Net Package RevPAR	$	77.58		$	207.22		$	(129.64)		(62.6)	%	Net Package RevPAR	$	121.05		$	100.01		$	21.04		21.0	%
		($ in thousands)												($ in thousands)
Net Package Revenue	Net Package Revenue	$	170,211		$	401,637		$	(231,426)		(57.6)	%	Net Package Revenue	$	163,698		$	148,398		$	15,300		10.3	%
Net Non-package Revenue	Net Non-package Revenue	28,143			67,347			(39,204)			(58.2)	%	Net Non-package Revenue	35,226			22,663			12,563			55.4	%
Management Fee Revenue	Management Fee Revenue	635			1,568			(933)			(59.5)	%	Management Fee Revenue	796			627			169			27.0	%
Total Net Revenue	Total Net Revenue	198,989			470,552			(271,563)			(57.7)	%	Total Net Revenue	199,720			171,688			28,032			16.3	%
Adjusted EBITDA	Adjusted EBITDA	$	(7,195)		$	130,673		$	(137,868)		(105.5)	%	Adjusted EBITDA	$	20,410		$	18,921		$	1,489		7.9	%
Adjusted EBITDA Margin	Adjusted EBITDA Margin	(3.6)		%	27.8		%	(31.4)		pts	(112.9)	%	Adjusted EBITDA Margin	10.2		%	11.0		%	(0.8)		pts	(7.3)	%

Comparable Portfolio


		Nine Months Ended September 30,						Increase / Decrease						Six Months Ended June 30,						Increase / Decrease
		2020			2019			Change			% Change			2021			2020			Change			% Change
Occupancy	Occupancy	27.7		%	80.8		%	(53.1)		pts	(65.7)	%	Occupancy	42.4		%	32.6		%	9.8		pts	30.1	%
Net Package ADR	Net Package ADR	$	297.84		$	271.21		$	26.63		9.8	%	Net Package ADR	$	298.50		$	305.14		$	(6.64)		(2.2)	%
Net Package RevPAR	Net Package RevPAR	$	82.46		$	219.03		$	(136.57)		(62.4)	%	Net Package RevPAR	$	126.50		$	99.55		$	26.95		27.1	%
		($ in thousands)												($ in thousands)
Net Package Revenue	Net Package Revenue	$	128,153		$	338,885		$	(210,732)		(62.2)	%	Net Package Revenue	$	163,117		$	129,067		$	34,050		26.4	%
Net Non-package Revenue	Net Non-package Revenue	22,029			56,216			(34,187)			(60.8)	%	Net Non-package Revenue	34,639			19,696			14,943			75.9	%
Management Fee Revenue	Management Fee Revenue	635			1,568			(933)			(59.5)	%	Management Fee Revenue	796			627			169			27.0	%
Total Net Revenue	Total Net Revenue	150,817			396,669			(245,852)			(62.0)	%	Total Net Revenue	198,552			149,390			49,162			32.9	%
Adjusted EBITDA	Adjusted EBITDA	$	(7,921)		$	112,127		$	(120,048)		(107.1)	%	Adjusted EBITDA	$	21,269		$	14,269		$	7,000		49.1	%
Adjusted EBITDA Margin	Adjusted EBITDA Margin	(5.3)		%	28.3		%	(33.6)		pts	(118.7)	%	Adjusted EBITDA Margin	10.7		%	9.6		%	1.1		pts	11.5	%

Total Revenue and Total Net Revenue

Our total revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2020 decreased $285.7~~2021 increased $28.3 million, or ~~58.0%~~15.9%, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. Our Total Net Revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2020 decreased $271.6~~2021 increased $28.0 million, or ~~57.7%~~16.3%, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. These ~~decreases~~increases are due to the ~~closures and reduced occupancy at~~resumption of resort operations this year as compared to the second quarter of 2020 (during which time all of our resorts during the second and third quarters as a result of the COVID-19 pandemic. Total Net Revenue for the nine months ended September 30, 2020 includes a $2.9 million favorable VAT tax adjustment following OECD guidelines for Transfer Pricing for Multinational Enterprises which considers the economic impact of the COVID-19 pandemic. This adjustment results in a favorable adjustment to Net Package Revenue and Net Package ADR. Excluding this adjustment, Net Package Revenue would be $167.3 million and Net Package ADR would be $289.96, representing a decrease of 58.3% and an increase of 9.8%, respectively for the nine months ended September 30, 2020.were closed).

3935

The following table shows a reconciliation of comparable Net Package Revenue, Net Non-package Revenue and Management Fee Revenue to total revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 ($ in thousands):


		Nine Months Ended September 30,				Increase/Decrease					Six Months Ended June 30,				Increase/Decrease
		2020		2019		Change		% Change			2021		2020		Change		% Change
Net Package Revenue	Net Package Revenue									Net Package Revenue
Comparable Net Package Revenue	Comparable Net Package Revenue	$	128,153	$	338,885	$	(210,732)	(62.2)	%	Comparable Net Package Revenue	$	163,117	$	129,067	$	34,050	26.4	%
Non-comparable Net Package Revenue	Non-comparable Net Package Revenue	42,058		62,752		(20,694)		(33.0)	%	Non-comparable Net Package Revenue	581		19,331		(18,750)		(97.0)	%
Net Package Revenue	Net Package Revenue	170,211		401,637		(231,426)		(57.6)	%	Net Package Revenue	163,698		148,398		15,300		10.3	%

Net Non-package Revenue	Net Non-package Revenue									Net Non-package Revenue
Comparable Net Non-package Revenue	Comparable Net Non-package Revenue	22,029		56,216		(34,187)		(60.8)	%	Comparable Net Non-package Revenue	34,639		19,696		14,943		75.9	%
Non-comparable Net Non-package Revenue	Non-comparable Net Non-package Revenue	6,114		11,131		(5,017)		(45.1)	%	Non-comparable Net Non-package Revenue	587		2,967		(2,380)		(80.2)	%
Net Non-package Revenue	Net Non-package Revenue	28,143		67,347		(39,204)		(58.2)	%	Net Non-package Revenue	35,226		22,663		12,563		55.4	%

Management Fee Revenue	Management Fee Revenue									Management Fee Revenue
Comparable Management Fee Revenue	Comparable Management Fee Revenue	635		1,568		(933)		(59.5)	%	Comparable Management Fee Revenue	796		627		169		27.0	%
Non-comparable Management Fee Revenue	Non-comparable Management Fee Revenue	—		—		—		—	%	Non-comparable Management Fee Revenue	—		—		—		—	%
Management Fee Revenue	Management Fee Revenue	635		1,568		(933)		(59.5)	%	Management Fee Revenue	796		627		169		27.0	%

Total Net Revenue	Total Net Revenue									Total Net Revenue
Comparable Total Net Revenue	Comparable Total Net Revenue	150,817		396,669		(245,852)		(62.0)	%	Comparable Total Net Revenue	198,552		149,390		49,162		32.9	%
Non-comparable Total Net Revenue	Non-comparable Total Net Revenue	48,172		73,883		(25,711)		(34.8)	%	Non-comparable Total Net Revenue	1,168		22,298		(21,130)		(94.8)	%
Total Net Revenue	Total Net Revenue	198,989		470,552		(271,563)		(57.7)	%	Total Net Revenue	199,720		171,688		28,032		16.3	%
Compulsory tips	Compulsory tips	6,044		16,969		(10,925)		(64.4)	%	Compulsory tips	5,347		5,114		233		4.6	%
Cost Reimbursements	Cost Reimbursements	1,913		5,123		(3,210)		(62.7)	%	Cost Reimbursements	1,482		1,408		74		5.3	%
Total revenue	Total revenue	$	206,946	$	492,644	$	(285,698)	(58.0)	%	Total revenue	$	206,549	$	178,210	$	28,339	15.9	%

Comparable Total Net Revenue

Our Comparable Total Net Revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2020 decreased $245.9~~2021 increased $49.2 million, or ~~62.0%~~32.9%, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019. This decrease is~~2020. These increases are due to the ~~closures and reduced occupancy at~~resumption of resort operations this year as compared to the second quarter of 2020 (during which time all of our resorts during the second and third quarters, a result of the COVID-19 pandemic. See “Impact of COVID-19 Pandemic” above for more information regarding the effects of the COVID-19 pandemic on our results of operations.were closed).

Direct Expenses

The following table shows a reconciliation of our direct expenses to Net Direct Expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 ($ in thousands):


		Nine Months Ended September 30,				Increase/Decrease					Six Months Ended June 30,				Increase/Decrease
		2020		2019		Change		% Change			2021		2020		Change		% Change
Direct expenses	Direct expenses	$	153,957	$	273,577	$	(119,620)	(43.7)	%	Direct expenses	$	139,755	$	118,278	$	21,477	18.2	%
Less: compulsory tips	Less: compulsory tips	6,044		16,969		(10,925)		(64.4)	%	Less: compulsory tips	5,347		5,114		233		4.6	%
Net Direct Expenses	Net Direct Expenses	$	147,913	$	256,608	$	(108,695)	(42.4)	%	Net Direct Expenses	$	134,408	$	113,164	$	21,244	18.8	%

Our direct expenses include resort expenses, such as food and beverage, salaries and wages, utilities and other ongoing operational expenses. Our Net Direct Expenses were ~~$147.9~~$134.4 million, or ~~74.3%~~67.3%, of Total Net Revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~$256.6~~$113.2 million, or ~~54.5%~~65.9%, of Total Net Revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020.

Net Direct Expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2020 decreased $108.7~~2021 increased $21.2 million, or ~~42.4%~~18.8%, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. Net Direct Expenses at our comparable properties ~~decreased $99.2~~increased $27.7 million, or ~~46.9%~~26.8%, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 due to the ~~closures and reduced occupancy at~~resumption of resort operations this year as compared to the second quarter of 2020 (during which time all of our resorts ~~during the second and third quarters and cost cutting measures taken in response to the COVID-19 pandemic.~~were closed). Direct operating expenses fluctuate based on various factors, including changes in occupancy, labor

4036

~~factors, including changes in occupancy, labor~~ costs, utilities, repair and maintenance costs and license and property taxes. Management fees and franchise fees, which are generally computed as a percentage of revenue, ~~increase/~~increase or decrease as a result of changes in revenues.

Net Direct Expenses consists of the following items ($ in thousands):

Total Portfolio


		Nine Months Ended September 30,				Increase/Decrease					Six Months Ended June 30,				Increase/Decrease
		2020		2019		Change		% Change			2021		2020		Change		% Change

Food and beverages	Food and beverages	$	26,468	$	62,925	$	(36,457)	(57.9)	%	Food and beverages	$	26,812	$	21,592	$	5,220	24.2	%
Salaries and wages	Salaries and wages	65,618		95,701		(30,083)		(31.4)	%	Salaries and wages	53,424		49,008		4,416		9.0	%
Repairs and maintenance	Repairs and maintenance	8,087		12,212		(4,125)		(33.8)	%	Repairs and maintenance	6,923		5,661		1,262		22.3	%
Utilities and sewerage	Utilities and sewerage	18,217		28,172		(9,955)		(35.3)	%	Utilities and sewerage	15,996		12,975		3,021		23.3	%
Licenses and property taxes	Licenses and property taxes	2,174		2,436		(262)		(10.8)	%	Licenses and property taxes	1,555		1,697		(142)		(8.4)	%
Incentive and management fees	Incentive and management fees	987		5,336		(4,349)		(81.5)	%	Incentive and management fees	433		1,424		(991)		(69.6)	%
Franchise / license fees	Franchise / license fees	9,386		17,150		(7,764)		(45.3)	%	Franchise / license fees	9,986		8,235		1,751		21.3	%
Transportation and travel expenses	Transportation and travel expenses	2,041		3,535		(1,494)		(42.3)	%	Transportation and travel expenses	1,920		1,449		471		32.5	%
Laundry and cleaning expenses	Laundry and cleaning expenses	2,140		3,498		(1,358)		(38.8)	%	Laundry and cleaning expenses	1,953		1,475		478		32.4	%
Property and equipment rental expense	Property and equipment rental expense	836		2,404		(1,568)		(65.2)	%	Property and equipment rental expense	629		802		(173)		(21.6)	%
Entertainment expenses and decoration	Entertainment expenses and decoration	2,622		5,391		(2,769)		(51.4)	%	Entertainment expenses and decoration	2,609		2,036		573		28.1	%
Office supplies	Office supplies	431		1,126		(695)		(61.7)	%	Office supplies	407		309		98		31.7	%
Other operational expenses	Other operational expenses	8,906		16,722		(7,816)		(46.7)	%	Other operational expenses	11,761		6,501		5,260		80.9	%
Total Net Direct Expenses	Total Net Direct Expenses	$	147,913	$	256,608	$	(108,695)	(42.4)	%	Total Net Direct Expenses	$	134,408	$	113,164	$	21,244	18.8	%

Comparable Portfolio


		Nine Months Ended September 30,				Increase/Decrease					Six Months Ended June 30,				Increase/Decrease
		2020		2019		Change		% Change			2021		2020		Change		% Change

Food and beverages	Food and beverages	$	19,060	$	51,395	$	(32,335)	(62.9)	%	Food and beverages	$	26,678	$	19,263	$	7,415	38.5	%
Salaries and wages	Salaries and wages	51,163		78,194		(27,031)		(34.6)	%	Salaries and wages	51,378		45,352		6,026		13.3	%
Repairs and maintenance	Repairs and maintenance	6,241		9,698		(3,457)		(35.6)	%	Repairs and maintenance	6,802		4,750		2,052		43.2	%
Utilities and sewerage	Utilities and sewerage	13,289		22,699		(9,410)		(41.5)	%	Utilities and sewerage	15,810		11,669		4,141		35.5	%
Licenses and property taxes	Licenses and property taxes	1,466		1,638		(172)		(10.5)	%	Licenses and property taxes	1,430		1,583		(153)		(9.7)	%
Incentive and management fees	Incentive and management fees	987		5,433		(4,446)		(81.8)	%	Incentive and management fees	391		1,233		(842)		(68.3)	%
Franchise / license fees	Franchise / license fees	7,176		15,301		(8,125)		(53.1)	%	Franchise / license fees	9,986		8,243		1,743		21.1	%
Transportation and travel expenses	Transportation and travel expenses	1,250		2,706		(1,456)		(53.8)	%	Transportation and travel expenses	1,888		1,336		552		41.3	%
Laundry and cleaning expenses	Laundry and cleaning expenses	1,590		2,583		(993)		(38.4)	%	Laundry and cleaning expenses	1,945		1,277		668		52.3	%
Property and equipment rental expense	Property and equipment rental expense	691		1,926		(1,235)		(64.1)	%	Property and equipment rental expense	618		756		(138)		(18.3)	%
Entertainment expenses and decoration	Entertainment expenses and decoration	2,052		4,833		(2,781)		(57.5)	%	Entertainment expenses and decoration	2,591		1,839		752		40.9	%
Office supplies	Office supplies	342		981		(639)		(65.1)	%	Office supplies	403		289		114		39.4	%
Other operational expenses	Other operational expenses	6,960		14,046		(7,086)		(50.4)	%	Other operational expenses	11,202		5,845		5,357		91.7	%
Total Net Direct Expenses	Total Net Direct Expenses	$	112,267	$	211,433	$	(99,166)	(46.9)	%	Total Net Direct Expenses	$	131,122	$	103,435	$	27,687	26.8	%

Selling, General and Administrative Expenses

Our selling, general and administrative expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 decreased ~~$18.1~~$0.4 million, or ~~19.2%~~0.7%, compared to the ~~nine~~six months ended ~~September~~June 30, 2019. These decreases are due to the closures and reduced occupancy at all of our resorts during the second and third quarter. Cost cutting measures were taken in response to the COVID-19 pandemic, which drove2020. The decrease was primarily driven by a ~~decrease of $16.5 million in advertising and commissions, a $3.1~~$1.2 million decrease in ~~transaction expenses~~professional fees and a ~~$2.7~~$1.2 million

decrease in ~~property selling, general and administrative expenses. These decreases were offset by an increase~~insurance expenses, which primarily resulted from the sales of ~~$2.9 million in insurance expense and a $1.3 million increase in share-based compensation.~~

~~Depreciation and Amortization Expense~~

~~Our depreciation and amortization expense for~~ the nine months ended September 30, 2020 decreased $7.8 million, or 10.0%, compared to the nine months ended September 30, 2019. The decrease was due to a $13.5 million decrease at our 2019 renovation properties, Hilton Playa del Carmen All-Inclusive Resort and Hilton La Romana All-Inclusive Resort that incurred accelerated depreciation in 2019 and a $2.6 million decrease due to our dispositions of Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark ~~which were sold~~ in May 2020. ~~This decrease was~~These decreases were partially offset by a $1.2 million increase in advertising and commissions and a $0.2 million increase in corporate personnel expenses due to the ~~opening~~resumption of ~~Hyatt Ziva and Hyatt Zilara Cap Cana in~~resort operations this year as compared to the ~~fourth~~second quarter of ~~2019,~~2020 (during which ~~accounted~~time all of our resorts were closed).

Depreciation and Amortization Expense

Our depreciation and amortization expense for ~~an $8.0~~the six months ended June 30, 2021 decreased $6.5 million, ~~increase.~~or 13.6%, compared to the six months ended June 30, 2020. The decrease was largely due to a $4.4 million decrease from our dispositions of the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark in May 2020, the Dreams Puerto Aventuras in February 2021, and the Capri Resort in June 2021, and a $2.2 million decrease due to accelerated depreciation incurred in 2020 related to renovation projects at the Hilton Playa del Carmen All-Inclusive Resort.

Impairment Loss

Our impairment loss for the ~~nine~~six months ended ~~September~~June 30, ~~2020 increased $42.3~~2021 decreased $17.4 million, or ~~100.0%~~42.1%, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. The ~~increase~~decrease was driven by $25.3 million of property and equipment impairment recognized during the six months ended June 30, 2020 upon classification of the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark as held for ~~sale (see Note 4 to our Condensed Consolidated Financial Statements). The remaining increase was~~sale. In addition, we recognized a $16.2 million goodwill impairment loss during the first quarter of 2020 at the Jewel Runaway Bay Beach Resort & Waterpark, Jewel Dunn’s River Beach Resort & Spa, and Jewel Paradise Cove Beach Resort & Spa due to ~~goodwill impairment resulting from~~ the decrease in forecasted future cash flows ~~in the first quarter of 2020~~ from the temporary suspension of operations from ~~COVID-19 and a $0.9~~COVID-19. These decreases were partially offset by $24.0 million ~~correction~~ of ~~an immaterial error for acquired~~ property and equipment ~~from~~impairment for the ~~business combination with Sagicor~~six months ended June 30, 2021 recognized upon classification of the Capri Resort as held for sale in ~~2018 recognized in the third quarter of 2020 (see Note 14 to our Condensed Consolidated Financial Statements).~~March 2021.

Interest Expense

Our interest expense for the ~~nine~~six months ended ~~September~~June 30, ~~2020 increased $27.0~~2021 decreased $4.8 million, or ~~77.7%~~11.4%, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. The ~~increase~~decrease in interest expense was driven primarily by a ~~$9.5~~$16.0 million ~~increase~~decrease due to the change in fair value of our interest rate swaps. In March 2019, we elected to adopt hedge accounting and designate our interest rate swaps as cash flow hedges. After the adoption of hedge accounting, we recorded the change in fair value of our interest rate swaps through other comprehensive income (loss) ~~income.~~. Due to the significant drop in interest rates during 2020 resulting from the COVID-19 pandemic, our cash flow hedge was deemed ineffective and dedesignated in March 2020, resulting in us recognizing the change in fair value of our interest rate swaps through interest expense. ~~Additionally,~~In addition, interest on our Revolving Credit Facility for the six months ended June 30, 2021 decreased by $1.2 million compared to the same period last year, driven by the repayment of the entire outstanding balance in February 2021. These decreases were partially offset by additional interest expense ~~increased due to $8.5 million of capitalized interest recorded in~~from the nine months ended September 30, 2019 for our development projects in 2019. For the nine months ended September 30, 2020, we did not record any capitalized interest. Finally, our interest expense increased $2.7 millionAdditional Senior Secured Credit Facility and ~~$2.8 million, respectively, due to the additional senior secured credit facility and property loan agreement~~Property Loan Agreement executed on June 12, 2020 by $3.9 million and ~~$1.8~~$4.9 million, ~~due to draws~~respectively, as well as additional interest expense on our ~~Revolving Credit Facility.~~Term Loan of $3.9 million.

Cash interest paid ~~excluding the effects of capitalized interest,~~ increased ~~$6.8~~to $38.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 as compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020, representing a $9.8 million increase over the prior period. Cash interest paid increased ~~$2.3 million and $2.0 million, respectively,~~ due to the ~~additional senior secured credit facility~~Additional Senior Secured Credit Facility and ~~property loan agreement~~Property Loan Agreement executed on June 12, 2020 by $4.4 million and ~~$1.8~~$4.3 million, ~~due to additional interest from draws on the Revolving Credit Facility. As of September 30, 2020, the total amount outstanding under our Revolving Credit Facility was $84.7 million.~~respectively.

Income Tax Benefit

~~For~~Our income tax benefit for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021 increased $0.9 million, or 6.4%, compared to the six months ended June 30, 2020. The increase in our income tax benefit was ~~$8.2~~mainly driven by:

•a $2.3 million ~~compared~~increased tax benefit due to higher pre-tax book losses from our tax paying entities;

•an $8.3 million increased tax benefit associated with the sale of the Capri Resort; and

•a ~~$10.0~~$7.3 million increased tax benefit associated with foreign exchange rate fluctuations, primarily for our Mexican entities.

These increases were partially offset by:

•a $3.7 million increased tax expense related to valuation allowances recognized for our Jamaica and Mexico entities;

•a $3.9 million decreased discrete tax benefit due to deferred tax liabilities on fixed assets of certain Dominican Republic entities;

•a $1.1 million decreased income tax benefit related to the Jamaica employment tax credit;

•a $2.9 million income tax provision associated with the sale of the Dreams Puerto Aventuras; and

•a $5.8 million decreased income tax benefit ~~for~~related to the ~~nine months ended September 30, 2019. See further details in Note 5 to our Condensed Consolidated Financial Statements.~~sales of the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark.

Key Indicators of Financial and Operating Performance

We use a variety of financial and other information to monitor the financial and operating performance of our business. Some of this is financial information prepared in accordance with U.S. GAAP, while other information, though financial in nature, is not prepared in accordance with U.S. GAAP. For reconciliations of non-U.S. GAAP financial measures to the most comparable U.S. GAAP financial measure, see “Non-U.S. GAAP Financial Measures.” Our management also uses other information that is not financial in nature, including statistical information and comparative data that are commonly used within the lodging industry to evaluate the financial and operating performance of our portfolio. Our management uses this information to measure the performance of our segments and consolidated portfolio. We use this information for planning and monitoring our business, as well as in determining management and employee compensation. These key indicators include:

•Net Package Revenue

•Net Non-package Revenue

•Owned Net Revenue

•Management Fee Revenue

•Total Net Revenue

•Occupancy

•Net Package ADR

•Net Package RevPAR

•Adjusted EBITDA

•Adjusted EBITDA Margin

•Owned Resort EBITDA

•Owned Resort EBITDA Margin

•Comparable Non-U.S. GAAP Measures

Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Management Fee Revenue, Cost Reimbursements, Total Net Revenue and Net Direct Expenses

“Net Package Revenue” is derived from the sale of all-inclusive packages, which include room accommodations, food and beverage services and entertainment activities, net of compulsory tips paid to employees. Government mandated compulsory tips in the Dominican Republic are not included in this adjustment, as they are already excluded from revenue. Revenue is recognized, net of discounts and rebates, when the rooms are occupied and/or the relevant services have been rendered. Advance deposits received from guests are deferred and included in trade and other payables until the rooms are occupied and/or the relevant services have been rendered, at which point the revenue is recognized.

“Net Non-package Revenue” represents all other revenues earned from the operations of our resorts, other than Net Package Revenue, net of compulsory tips paid to employees. Government mandated compulsory tips in the Dominican Republic are not included in this adjustment, as they are already excluded from revenue. Net Non-package Revenue includes revenue associated with guests' purchases of upgrades, premium services and amenities, such as premium rooms, dining experiences, wines and spirits and spa packages, which are not included in the all-inclusive package. Revenue not included in a guest’s all-inclusive package is recognized when the goods are consumed.

“Owned Net Revenue” represents Net Package Revenue and Net Non-package Revenue. Owned Net Revenue represents a key indicator to assess the overall performance of our business and analyze trends, such as consumer demand, brand preference and competition. In analyzing our Owned Net Revenues, our management differentiates between Net Package Revenue and Net Non-package Revenue. Guests at our resorts purchase packages at stated rates, which include room accommodations, food and beverage services and entertainment activities, in contrast to other lodging business models, which typically only include the room accommodations in the stated rate. The amenities at all-inclusive resorts typically include a variety of buffet and á la carte restaurants, bars, activities, and shows and entertainment throughout the day.

“Management Fee Revenue” is derived from fees earned for managing resorts owned by third-parties. The fees earned are typically composed of a base fee, which is computed as a percentage of revenue, and an incentive fee, which is computed as a percentage of profitability. Management Fee Revenue had a minor contribution to our operating results for the three and ~~nine~~six months

ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, but we expect Management Fee Revenue to be a more relevant indicator to assess the overall performance of our business in the future as we enter into more management contracts.

“Total Net Revenue” represents Net Package Revenue, Net Non-package Revenue and Management Fee Revenue. “Cost Reimbursements” is excluded from Total Net Revenue as it is not considered a key indicator of financial and operating performance. Cost Reimbursements is derived from the reimbursement of certain costs incurred by Playa on behalf of resorts managed by Playa and owned by third parties. This revenue is fully offset by reimbursable costs and has no net impact on operating ~~(loss) income~~loss or net ~~(loss) income.~~loss.

“Net Direct Expenses” represents direct expenses, net of compulsory tips paid to employees.

Occupancy

“Occupancy” represents the total number of rooms sold for a period divided by the total number of rooms available during such period. The total number of rooms available excludes any rooms considered “Out of Order” due to renovation or a temporary problem rendering them inadequate for occupancy for an extended period of time. Occupancy is a useful measure of the utilization of a resort’s

total available capacity and can be used to gauge demand at a specific resort or group of properties during a given period. Occupancy levels also enable us to optimize Net Package ADR by increasing or decreasing the stated rate for our all-inclusive packages as demand for a resort increases or decreases.

Net Package ADR

“Net Package ADR” represents total Net Package Revenue for a period divided by the total number of rooms sold during such period. Net Package ADR trends and patterns provide useful information concerning the pricing environment and the nature of the guest base of our portfolio or comparable portfolio, as applicable. Net Package ADR is a commonly used performance measure in the all-inclusive segment of the lodging industry and is commonly used to assess the stated rates that guests are willing to pay through various distribution channels.

Net Package RevPAR

“Net Package RevPAR” is the product of Net Package ADR and the average daily occupancy percentage. Net Package RevPAR does not reflect the impact of non-package revenue. Although Net Package RevPAR does not include this additional revenue, it generally is considered the key performance measure in the all-inclusive segment of the lodging industry to identify trend information with respect to net room revenue produced by our portfolio or comparable portfolio, as applicable, and to evaluate operating performance on a consolidated basis or a regional basis, as applicable.

EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Owned Resort EBITDA, and Owned Resort ~~EBITDA Margin and Adjusted~~ EBITDA Margin

We define EBITDA, a non-U.S. GAAP financial measure, as net income or loss, determined in accordance with U.S. GAAP, for the period presented, before interest expense, income tax and depreciation and amortization expense. We define Adjusted EBITDA, a non-U.S. GAAP financial measure, as EBITDA further adjusted to exclude the following items:

•Other income or expense

•Pre-opening expense

•Transaction expenses

•Severance expense

•Other tax expense

•Gain on property damage insurance proceeds

•Share-based compensation

•Loss on extinguishment of debt

•Other items, which may include but are not limited to the following: management contract termination fees; gains or losses from legal settlements; repairs from hurricanes and tropical storms and impairment losses.

We include the non-service cost components of net periodic pension cost or benefit recorded within other income or expense in the Condensed Consolidated Statements of Operations in calculating Adjusted EBITDA as they are considered part of our ongoing resort operations.

“Adjusted EBITDA Margin” represents Adjusted EBITDA as a percentage of Total Net Revenue.

“Owned Resort EBITDA” represents Adjusted EBITDA before corporate expenses and Management Fee Revenue.

“Owned Resort EBITDA Margin” represents Owned Resort EBITDA as a percentage of Owned Net Revenue.

~~“Adjusted EBITDA Margin” represents Adjusted EBITDA as a percentage~~Usefulness and Limitation of ~~Total Net Revenue.~~

Non-U.S. GAAP Measures

We believe that each of Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Total Net Revenue, Net Package ADR, Net Package RevPAR and Net Direct Expenses are useful to investors as they reflect our operating results by excluding compulsory tips. These tips have a margin of zero and do not represent our operating results.

We also believe that Adjusted EBITDA is useful to investors for two principal reasons. First, we believe Adjusted EBITDA assists investors in comparing our performance over various reporting periods on a consistent basis by removing from our operating results the impact of items that do not reflect our core operating performance. For example, changes in foreign exchange rates (which

are the principal driver of changes in other income or expense), and expenses related to capital raising, strategic initiatives and other corporate initiatives, such as expansion into new markets (which are the principal drivers of changes in transaction expenses), are not indicative of the operating performance of our resorts. The other adjustments included in our definition of Adjusted EBITDA relate to items that occur infrequently and therefore would obstruct the comparability of our operating results over reporting periods. For example, revenue from insurance policies, other than business interruption insurance policies, is infrequent in nature, and we believe excluding these expense and revenue items permits investors to better evaluate the core operating performance of our resorts over time. We believe Adjusted EBITDA Margin provides our investors a useful measurement of operating profitability for the same reasons we find Adjusted EBITDA useful.

The second principal reason that we believe Adjusted EBITDA is useful to investors is that it is considered a key performance indicator by our board of directors (our “Board”) and management. In addition, the compensation committee of our Board determines the annual variable compensation for certain members of our management based, in part, on consolidated Adjusted EBITDA. We believe that Adjusted EBITDA is useful to investors because it provides investors with information utilized by our Board and management to assess our performance and may (subject to the limitations described below) enable investors to compare the performance of our portfolio to our competitors.

Our non-U.S. GAAP financial measures are not substitutes for revenue, net income or any other measure determined in accordance with U.S. GAAP. There are limitations to the utility of non-U.S. GAAP 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 non-U.S. GAAP financial measures that other companies publish to compare the performance of those companies to our performance. Because of these limitations, our non-U.S. GAAP financial measures 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.

For a reconciliation of EBITDA, Adjusted EBITDA and Owned Resort EBITDA to net income or loss as computed under U.S. GAAP, see “Non-U.S. GAAP Financial Measures.”

Comparable Non-U.S. GAAP Measures

We believe that presenting Adjusted EBITDA, Total Net Revenue, Net Package Revenue, Net Non-package Revenue and Net Direct Expenses on a comparable basis is useful to investors because these measures include only the results of resorts owned and in operation for the entirety of the periods presented and thereby eliminate disparities in results due to the acquisition or disposition of resorts or the impact of resort closures or re-openings in connection with redevelopment or renovation projects. As a result, we believe these measures provide more consistent metrics for comparing the performance of our operating resorts. We calculate comparable Adjusted EBITDA, comparable Total Net Revenue, comparable Net Package Revenue and comparable Net Non-package Revenue as the total amount of each respective measure less amounts attributable to non-comparable resorts, by which we mean resorts that were not owned or in operation during some or all of the relevant reporting period.

Our comparable resorts for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020 excludes~~2021 exclude the following resorts: ~~Hilton La Romana All-Inclusive Resort and Hilton Playa del Carmen All-Inclusive~~Capri Resort, which ~~were under renovation~~was sold in ~~2019, Hyatt Ziva and Hyatt Zilara Cap Cana, a ground-up development opened November 2019~~June 2021, Dreams Puerto Aventuras, which was sold in February 2021, and Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark which were sold in May 2020.

A reconciliation of net income or loss as computed under U.S. GAAP to comparable Adjusted EBITDA is presented in “Non-U.S. GAAP Financial Measures,” below. For a reconciliation of Comparable Net Package Revenue, Comparable Net Non-package

Revenue, Comparable Management Fee Revenue and Comparable Total Net Revenue to total revenue as computed under U.S. GAAP, see “Results of Operations.”

Segment Results

Three Months Ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020

We evaluate our business segment operating performance using segment Owned Net Revenue and segment Owned Resort EBITDA. The following tables summarize segment Owned Net Revenue and segment Owned Resort EBITDA for the three months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 ($ in thousands):


		Three Months Ended September 30,				Increase / Decrease					Three Months Ended June 30,				Increase / Decrease
		2020		2019		Change		% Change			2021		2020		Change		% Change
Owned Net Revenue	Owned Net Revenue									Owned Net Revenue
Yucatán Peninsula	Yucatán Peninsula	$	17,351	$	50,996	$	(33,645)	(66.0)	%	Yucatán Peninsula	$	45,067	$	21	$	45,046	214,504.8	%
Pacific Coast	Pacific Coast	773		17,404		(16,631)		(95.6)	%	Pacific Coast	20,514		(74)		20,588		27,821.6	%
Dominican Republic	Dominican Republic	2,453		14,585		(12,132)		(83.2)	%	Dominican Republic	33,888		11		33,877		307,972.7	%
Jamaica	Jamaica	6,458		43,075		(36,617)		(85.0)	%	Jamaica	24,134		564		23,570		4,179.1	%
Segment Owned Net Revenue	Segment Owned Net Revenue	27,035		126,060		(99,025)		(78.6)	%	Segment Owned Net Revenue	123,603		522		123,081		23,578.7	%
Other	Other	258		14		244		1,742.9	%	Other	369		20		349		1,745.0	%
Management fees	Management fees	8		83		(75)		(90.4)	%	Management fees	452		(18)		470		2,611.1	%
Total Net Revenue	Total Net Revenue	$	27,301	$	126,157	$	(98,856)	(78.4)	%	Total Net Revenue	$	124,424	$	524	$	123,900	23,645.0	%


		Three Months Ended September 30,				Increase / Decrease					Three Months Ended June 30,				Increase / Decrease
		2020		2019		Change		% Change			2021		2020		Change		% Change
Owned Resort EBITDA	Owned Resort EBITDA									Owned Resort EBITDA
Yucatán Peninsula	Yucatán Peninsula	$	(1,820)	$	13,777	$	(15,597)	(113.2)	%	Yucatán Peninsula	$	13,022	$	(8,004)	$	21,026	262.7	%
Pacific Coast	Pacific Coast	(2,330)		4,495		(6,825)		(151.8)	%	Pacific Coast	7,078		(2,816)		9,894		351.3	%
Dominican Republic	Dominican Republic	(6,296)		(1,201)		(5,095)		424.2	%	Dominican Republic	7,926		(4,881)		12,807		262.4	%
Jamaica	Jamaica	(7,473)		8,802		(16,275)		(184.9)	%	Jamaica	4,072		(8,097)		12,169		150.3	%
Segment Owned Resort EBITDA	Segment Owned Resort EBITDA	(17,919)		25,873		(43,792)		(169.3)	%	Segment Owned Resort EBITDA	32,098		(23,798)		55,896		234.9	%
Other corporate	Other corporate	(8,205)		(10,126)		1,921		(19.0)	%	Other corporate	(9,635)		(7,606)		(2,029)		26.7	%
Management fees	Management fees	8		83		(75)		(90.4)	%	Management fees	452		(18)		470		2,611.1	%
Total Adjusted EBITDA	Total Adjusted EBITDA	$	(26,116)	$	15,830	$	(41,946)	(265.0)	%	Total Adjusted EBITDA	$	22,915	$	(31,422)	$	54,337	172.9	%

For a reconciliation of segment Owned Net Revenue and segment Owned Resort EBITDA to total revenue and net income, respectively, each as computed under U.S. GAAP, see Note 15 to our Condensed Consolidated Financial Statements.

Yucatán Peninsula

The following tables set forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Yucatán Peninsula segment for the three months ended June 30, 2021 and 2020 for the total segment portfolio and comparable segment portfolio:

Total Portfolio


	Three Months Ended June 30,						Increase / Decrease
	2021			2020			Change			% Change
Occupancy	52.0		%	—		%	52.0		%	—		%
Net Package ADR	$	328.38		$	—		$	328.38		$	—
Net Package RevPAR	$	170.77		$	—		$	170.77		$	—
	($ in thousands)
Net Package Revenue	$	37,264		$	(167)		$	37,431		22,413.8		%
Net Non-package Revenue	7,803			188			7,615			4,050.5		%
Owned Net Revenue	45,067			21			45,046			214,504.8		%
Owned Resort EBITDA	$	13,022		$	(8,004)		$	21,026		262.7		%
Owned Resort EBITDA Margin	28.9		%	(38,114.3)		%	38,143.2		pts	100.1		%

Comparable Portfolio


	Three Months Ended June 30,						Increase / Decrease
	2021			2020			Change			% Change
Occupancy	58.7		%	—		%	58.7		%	—		%
Net Package ADR	$	328.51		$	—		$	328.51		$	—
Net Package RevPAR	$	192.68		$	—		$	192.68		$	—
	($ in thousands)
Net Package Revenue	$	37,278		$	(144)		$	37,422		25,987.5		%
Net Non-package Revenue	7,753			78			7,675			9,839.7		%
Owned Net Revenue	45,031			(66)			45,097			68,328.8		%
Owned Resort EBITDA	$	13,813		$	(6,633)		$	20,446		308.2		%
Owned Resort EBITDA Margin	30.7		%	(10,050.0)		%	10,080.7		%	100.3		%

Segment Comparable Owned Net Revenue. Our Comparable Owned Net Revenue for the three months ended June 30, 2021 increased $45.1 million, or 68,328.8%, compared to the three months ended June 30, 2020. These increases are a result of the resumption of resort operations this quarter as compared to the second quarter of 2020 (during which time all of our resorts were closed). Comparable Net Package ADR of $328.51 for the three months ended June 30, 2021 benefited by an additional $6.93 as a result of a change in billing methodology of an online travel agency (“OTA”), which requires Playa to present this revenue gross of commissions under U.S. GAAP. Excluding the aforementioned change in billing practice, Comparable Net Package ADR would have been $321.58.

Compared to 2019, our Comparable Net Package ADR for the three months ended June 30, 2021 increased by $49.47, or 17.7%. Excluding the aforementioned change in billing practice, the increase would have been $42.54, or 15.2%.

Segment Comparable Owned Resort EBITDA. Our Comparable Owned Resort EBITDA for the three months ended June 30, 2021 increased $20.4 million, or 308.2%, compared to the three months ended June 30, 2020. These increases are a result of the resumption of operations this quarter as compared to the second quarter of 2020 (during which time all of our resorts were closed).

Pacific Coast

The following tables set forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Pacific Coast segment for the three months ended June 30, 2021 and 2020 for the total segment portfolio:


	Three Months Ended June 30,						Increase / Decrease
	2021			2020			Change			% Change
Occupancy	59.8		%	—		%	59.8		%	—		%
Net Package ADR	$	339.20		$	—		$	339.20		$	—
Net Package RevPAR	$	202.93		$	—		$	202.93		$	—
	($ in thousands)
Net Package Revenue	$	17,100		$	(89)		$	17,189		19,313.5		%
Net Non-package Revenue	3,414			15			3,399			22,660.0		%
Owned Net Revenue	20,514			(74)			20,588			27,821.6		%
Owned Resort EBITDA	$	7,078		$	(2,816)		$	9,894		351.3		%
Owned Resort EBITDA Margin	34.5		%	(3,805.4)		%	3,839.9		pts	100.9		%

Segment Owned Net Revenue. Our Owned Net Revenue for the three months ended June 30, 2021 increased $20.6 million, or 27,821.6%, compared to the three months ended June 30, 2020. These increases are a result of the resumption of operations this quarter as compared to the second quarter of 2020 (during which time all of our resorts were closed). Net Package ADR of $339.20 for the three months ended June 30, 2021 benefited by an additional $5.83 as a result of a change in billing methodology of an OTA, which requires Playa to present this revenue gross of commissions under U.S. GAAP. Excluding the aforementioned change in billing practice, Net Package ADR would have been $333.37.

Compared to 2019, our Net Package ADR for the three months ended June 30, 2021 increased by $43.72, or 14.8%. Excluding the aforementioned change in billing practice, the increase would have been $37.89, or 12.8%.

Segment Owned Resort EBITDA.Our Owned Resort EBITDA for the three months ended June 30, 2021 increased $9.9 million, or 351.3%, compared to the three months ended June 30, 2020. These increases are a result of the resumption of operations this quarter as compared to the second quarter of 2020 (during which time all of our resorts were closed).

Dominican Republic

The following table sets forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Dominican Republic segment for the three months ended June 30, 2021 and 2020 for the total segment portfolio:


	Three Months Ended June 30,						Increase / Decrease
	2021			2020			Change			% Change
Occupancy	45.0		%	—		%	45.0		%	—		%
Net Package ADR	$	257.73		$	—		$	257.73		$	—
Net Package RevPAR	$	115.90		$	—		$	115.90		$	—
	($ in thousands)
Net Package Revenue	$	27,885		$	(178)		$	28,063		15,765.7		%
Net Non-package Revenue	6,003			189			5,814			3,076.2		%
Owned Net Revenue	33,888			11			33,877			307,972.7		%
Owned Resort EBITDA	$	7,926		$	(4,881)		$	12,807		262.4		%
Owned Resort EBITDA Margin	23.4		%	(44,372.7)		%	44,396.1		pts	100.1		%

Segment Owned Net Revenue. Our Owned Net Revenue for the three months ended June 30, 2021 increased $33.9 million, or 307,972.7%, compared to the three months ended June 30, 2020. These increases are a result of the resumption of operations this quarter as compared to the second quarter of 2020 (during which time all of our resorts were closed).

Compared to 2019, our Net Package ADR for three months ended June 30, 2021 increased by $75.36, or 41.3%. This increase is driven by the opening of Hyatt Ziva and Hyatt Zilara Cap Cana in the fourth quarter of 2019.

Segment Owned Resort EBITDA. Our Owned Resort EBITDA for the three months ended June 30, 2021 increased $12.8 million, or 262.4%, compared to the three months ended June 30, 2020. These increases are a result of the resumption of operations this quarter as compared to the second quarter of 2020 (during which time all of our resorts were closed).

Jamaica

The following table sets forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Jamaica segment for the three months ended June 30, 2021 and 2020 for the total segment portfolio and comparable segment portfolio:

Total Portfolio


	Three Months Ended June 30,						Increase / Decrease
	2021			2020			Change			% Change
Occupancy	48.9		%	—		%	48.9		%	—		%
Net Package ADR	$	304.51		$	—		$	304.51		$	—
Net Package RevPAR	$	149.03		$	—		$	149.03		$	—
	($ in thousands)
Net Package Revenue	$	19,366		$	736		$	18,630		2,531.3		%
Net Non-package Revenue	4,768			(172)			4,940			2,872.1		%
Owned Net Revenue	24,134��			564			23,570			4,179.1		%
Owned Resort EBITDA	$	4,072		$	(8,097)		$	12,169		150.3		%
Owned Resort EBITDA Margin	16.9		%	(1,435.6)		%	1,452.5		pts	101.2		%

Comparable Portfolio


	Three Months Ended June 30,						Increase / Decrease
	2021			2020			Change			% Change
Occupancy	48.9		%	—		%	48.9		%	—		%
Net Package ADR	$	305.26		$	—		$	305.26		$	—
Net Package RevPAR	$	149.40		$	—		$	149.40		$	—
	($ in thousands)
Net Package Revenue	$	19,414		$	703		$	18,711		2,661.6		%
Net Non-package Revenue	4,793			(78)			4,871			6,244.9		%

Owned Net Revenue	24,207			625			23,582			3,773.1		%
Owned Resort EBITDA	$	3,959		$	(6,699)		$	10,658		159.1		%
Owned Resort EBITDA Margin	16.4		%	(1,071.8)		%	1,088.2		pts	101.5		%

Segment Comparable Owned Net Revenue. Our Comparable Owned Net Revenue for the three months ended June 30, 2021 increased $23.6 million, or 3,773.1%, compared to the three months ended June 30, 2020. These increases are a result of the resumption of operations this quarter as compared to the second quarter of 2020 (during which time all of our resorts were closed).

Compared to 2019, our Comparable Net Package ADR for the three months ended June 30, 2021 decreased by $13.72, or 4.3%.

Segment Comparable Owned Resort EBITDA. Our Comparable Owned Resort EBITDA for the three months ended June 30, 2021 increased $10.7 million, or 159.1%, compared to the three months ended June 30, 2020. These increases are a result of the resumption of operations this quarter as compared to the second quarter of 2020 (during which time all of our resorts were closed).

Segment Results

Six Months Ended June 30, 2021 and 2020

We evaluate our business segment operating performance using segment Owned Net Revenue and segment Owned Resort EBITDA. The following tables summarize segment Owned Net Revenue and segment Owned Resort EBITDA for the six months ended June 30, 2021 and 2020 ($ in thousands):


	Six Months Ended June 30,				Increase / Decrease
	2021		2020		Change		% Change
Owned Net Revenue
Yucatán Peninsula	$	78,670	$	62,338	$	16,332	26.2	%
Pacific Coast	29,135		21,081		8,054		38.2	%
Dominican Republic	54,769		35,607		19,162		53.8	%
Jamaica	35,856		52,000		(16,144)		(31.0)	%
Segment Owned Net Revenue	198,430		171,026		27,404		16.0	%
Other	494		35		459		1,311.4	%
Management Fee Revenue	796		627		169		27.0	%
Total Net Revenue	$	199,720	$	171,688	$	28,032	16.3	%


	Six Months Ended June 30,				Increase / Decrease
	2021		2020		Change		% Change
Owned Resort EBITDA
Yucatán Peninsula	$	20,196	$	16,931	$	3,265	19.3	%
Pacific Coast	7,563		6,056		1,507		24.9	%
Dominican Republic	9,592		2,908		6,684		229.8	%
Jamaica	1,292		10,976		(9,684)		(88.2)	%
Segment Owned Resort EBITDA	38,643		36,871		1,772		4.8	%
Other corporate	(19,029)		(18,577)		(452)		2.4	%
Management Fee Revenue	796		627		169		27.0	%
Total Adjusted EBITDA	$	20,410	$	18,921	$	1,489	7.9	%

Yucatán Peninsula

The following tables set forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Yucatán Peninsula segment for the ~~three~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 for the total segment portfolio and comparable segment portfolio:

Total Portfolio


		Three Months Ended September 30,						Increase / Decrease						Six Months Ended June 30,						Increase / Decrease
		2020			2019			Change			% Change			2021			2020			Change			% Change
Occupancy	Occupancy	19.7		%	85.3		%	(65.6)		pts	(76.9)	%	Occupancy	46.8		%	37.0		%	9.8		pts	26.5	%
Net Package ADR	Net Package ADR	$	288.40		$	225.21		$	63.19		28.1	%	Net Package ADR	$	311.22		$	298.32		$	12.90		4.3	%
Net Package RevPAR	Net Package RevPAR	$	56.94		$	192.00		$	(135.06)		(70.3)	%	Net Package RevPAR	$	145.60		$	110.45		$	35.15		31.8	%
		($ in thousands)												($ in thousands)
Net Package Revenue	Net Package Revenue	$	14,259		$	44,292		$	(30,033)		(67.8)	%	Net Package Revenue	$	65,175		$	54,719		$	10,456		19.1	%
Net Non-package Revenue	Net Non-package Revenue	3,092			6,704			(3,612)			(53.9)	%	Net Non-package Revenue	13,495			7,619			5,876			77.1	%
Owned Net Revenue	Owned Net Revenue	17,351			50,996			(33,645)			(66.0)	%	Owned Net Revenue	78,670			62,338			16,332			26.2	%
Owned Resort EBITDA	Owned Resort EBITDA	$	(1,820)		$	13,777		$	(15,597)		(113.2)	%	Owned Resort EBITDA	$	20,196		$	16,931		$	3,265		19.3	%
Owned Resort EBITDA Margin	Owned Resort EBITDA Margin	(10.5)		%	27.0		%	(37.5)		pts	(138.9)	%	Owned Resort EBITDA Margin	25.7		%	27.2		%	(1.5)		pts	(5.5)	%

Comparable Portfolio


		Three Months Ended September 30,						Increase / Decrease						Six Months Ended June 30,						Increase / Decrease
		2020			2019			Change			% Change			2021			2020			Change			% Change
Occupancy	Occupancy	19.2		%	85.2		%	(66.0)		pts	(77.5)	%	Occupancy	53.3		%	36.4		%	16.9		pts	46.4	%
Net Package ADR	Net Package ADR	$	296.16		$	227.14		$	69.02		30.4	%	Net Package ADR	$	314.43		$	319.16		$	(4.73)		(1.5)	%
Net Package RevPAR	Net Package RevPAR	$	56.91		$	193.56		$	(136.65)		(70.6)	%	Net Package RevPAR	$	167.73		$	116.05		$	51.68		44.5	%
		($ in thousands)												($ in thousands)
Net Package Revenue	Net Package Revenue	$	11,508		$	39,140		$	(27,632)		(70.6)	%	Net Package Revenue	$	64,543		$	44,902		$	19,641		43.7	%
Net Non-package Revenue	Net Non-package Revenue	2,376			5,685			(3,309)			(58.2)	%	Net Non-package Revenue	12,980			6,035			6,945			115.1	%
Owned Net Revenue	Owned Net Revenue	13,884			44,825			(30,941)			(69.0)	%	Owned Net Revenue	77,523			50,937			26,586			52.2	%
Owned Resort EBITDA	Owned Resort EBITDA	$	(1,157)		$	13,423		$	(14,580)		(108.6)	%	Owned Resort EBITDA	$	21,498		$	15,088		$	6,410		42.5	%
Owned Resort EBITDA Margin	Owned Resort EBITDA Margin	(8.3)		%	29.9		%	(38.2)		pts	(127.8)	%	Owned Resort EBITDA Margin	27.7		%	29.6		%	(1.9)		pts	(6.4)	%

Segment Comparable Owned Net Revenue. Our Comparable Owned Net Revenue for the ~~three~~six months ended ~~September~~June 30, ~~2020 decreased $30.9~~2021 increased $26.6 million, or ~~69.0%~~52.2%, compared to the ~~three~~six months ended ~~September~~June 30, ~~2019.~~2020. These ~~decreases~~increases are a result of the ~~temporary suspension or reduced occupancy at~~resumption of operations this year as compared to the second quarter of 2020 (during which time all of our resorts in the third quarter in response to the COVID-19 pandemic. Comparable Owned Net Revenue during the third quarter includes a $1.4 million favorable VAT tax adjustment following OECD guidelines for Transfer Pricing for Multinational Enterprises which considers the economic impact of the COVID-19 pandemic. This adjustment results in a favorable adjustment towere closed). Comparable Net Package ~~Revenue and Comparable Net Package ADR. Excluding this adjustment, Comparable Net Package Revenue would be $10.1 million, representing a decrease~~ADR of ~~74.1%~~$314.43 for the ~~three~~six months ended ~~September~~June 30, ~~2020.~~2021 benefited by an additional $3.83 as a result of a change in billing methodology of an OTA, which requires Playa to present this revenue gross of commissions under U.S. GAAP. Excluding the aforementioned change in billing practice, Comparable Net Package ADR would ~~be $260.61 and~~have been $310.60.

Compared to 2019, our Comparable Net Package ~~RevPAR would be $50.08, representing an increase of 14.7% and a decrease of 74.1%, respectively~~ADR for the ~~three~~six months ended ~~September~~June 30, ~~2020.~~

~~Total segment Owned Net Revenue during~~2021 increased by $13.83, or 4.6%. Excluding the ~~third quarter includes a $2.0 million favorable VAT tax adjustment. Excluding this adjustment, Net Package Revenue~~aforementioned change in billing practice, the increase would be $12.2 million, representing a decrease of 72.4% for the three months ended September 30, 2020. Net Package ADR would be $247.49 and Net Package RevPAR would be $48.86, representing an increase of 9.9% and a decrease of 74.6%, respectively for the three months ended September 30, 2020.have been $9.99, or 3.3%.

Segment Comparable Owned Resort EBITDA. Our Comparable Owned Resort EBITDA for the ~~three~~six months ended ~~September~~June 30, ~~2020 decreased $14.6~~2021 increased $6.4 million, or ~~108.6%~~42.5%, compared to the ~~three~~six months ended ~~September~~June 30, ~~2019.~~2020. These ~~decreases~~increases are a result of the ~~temporary suspension or reduced occupancy at~~resumption of operations this year as compared to the second quarter of 2020 (during which time all of our resorts ~~in the third quarter in response to the COVID-19 pandemic.~~were closed).

Pacific Coast

The following tables set forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Pacific Coast segment for the ~~three~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 for the total segment portfolio:


		Three Months Ended September 30,						Increase / Decrease						Six Months Ended June 30,						Increase / Decrease
		2020			2019			Change			% Change			2021			2020			Change			% Change
Occupancy	Occupancy	1.0		%	76.1		%	(75.1)		pts	(98.7)	%	Occupancy	44.0		%	31.2		%	12.8		pts	41.0	%
Net Package ADR	Net Package ADR	$	578.90		$	236.24		$	342.66		145.0	%	Net Package ADR	$	330.29		$	342.58		$	(12.29)		(3.6)	%
Net Package RevPAR	Net Package RevPAR	$	6.01		$	179.66		$	(173.65)		(96.7)	%	Net Package RevPAR	$	145.39		$	106.93		$	38.46		36.0	%
		($ in thousands)												($ in thousands)
Net Package Revenue	Net Package Revenue	$	512		$	15,306		$	(14,794)		(96.7)	%	Net Package Revenue	$	24,368		$	18,021		$	6,347		35.2	%
Net Non-package Revenue	Net Non-package Revenue	261			2,098			(1,837)			(87.6)	%	Net Non-package Revenue	4,767			3,060			1,707			55.8	%
Owned Net Revenue	Owned Net Revenue	773			17,404			(16,631)			(95.6)	%	Owned Net Revenue	29,135			21,081			8,054			38.2	%
Owned Resort EBITDA	Owned Resort EBITDA	$	(2,330)		$	4,495		$	(6,825)		(151.8)	%	Owned Resort EBITDA	$	7,563		$	6,056		$	1,507		24.9	%
Owned Resort EBITDA Margin	Owned Resort EBITDA Margin	(301.4)		%	25.8		%	(327.2)		pts	(1,268.2)	%	Owned Resort EBITDA Margin	26.0		%	28.7		%	(2.7)		pts	(9.4)	%

Segment Owned Net Revenue. Our Owned Net Revenue for the ~~three~~six months ended ~~September~~June 30, ~~2020 decreased $16.6~~2021 increased $8.1 million, or ~~95.6%~~38.2%, compared to the ~~three~~six months ended ~~September~~June 30, ~~2019.~~2020. These ~~decreases~~increases are a result of the ~~temporary suspension~~resumption of operations ~~at both resorts in~~ this ~~segment during the third quarter in response~~year as compared to the ~~COVID-19 pandemic. Owned Net Revenue during the third~~second quarter ~~includes a $0.3 million favorable VAT tax adjustment following OECD guidelines for Transfer Pricing for Multinational Enterprises~~of 2020 (during which ~~considers the economic impact~~time all of ~~the COVID-19 pandemic. This adjustment results in a favorable adjustment to Owned Net Revenue and~~our resorts were closed). Net Package ~~ADR. Excluding this adjustment, Owned Net Revenue would be $0.2 million representing a decrease~~ADR of ~~98.8%~~$330.29 for the ~~three~~six months ended ~~September~~June 30, ~~2020.~~2021 benefited by an additional $3.98 as a result of a change in billing methodology of an OTA, which requires Playa to present this revenue gross of commissions under U.S. GAAP. Excluding the aforementioned change in billing practice, Net Package ADR would ~~be $203.13 and~~have been $326.31.

Compared to 2019, our Net Package ~~RevPAR would be $2.11, representing a decrease of 14.0% and a decrease of 98.8%, respectively~~ADR for the ~~three~~six months ended ~~September~~June 30, ~~2020.~~2021 increased by $8.91, or 2.8%. Excluding the aforementioned change in billing practice, the increase would have been $4.92, or 1.5%.

Segment Owned Resort EBITDA. Our Owned Resort EBITDA for the ~~three~~six months ended ~~September~~June 30, ~~2020 decreased $6.8~~2021 increased $1.5 million, or ~~151.8%~~24.9%, compared to the ~~three~~six months ended ~~September~~June 30, ~~2019.~~2020. These ~~decreases~~increases are a result of the ~~temporary suspension~~resumption of operations ~~at both resorts in~~ this ~~segment during the third quarter in response to the COVID-19 pandemic.~~

~~Dominican Republic~~

The following table sets forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Dominican Republic segment for the three months ended September 30, 2020 and 2019 for the total segment portfolio and comparable segment portfolio:

~~Total Portfolio~~

Three Months Ended September 30, Increase / Decrease
2020 2019 Change % Change
Occupancy 2.9 % 54.9 % (52.0) pts (94.7) %
Net Package ADR $ 268.25 $ 156.30 $ 111.95 71.6 %
Net Package RevPAR $ 7.76 $ 85.85 $ (78.09) (91.0) %
($ in thousands)
Net Package Revenue $ 1,889 $ 11,658 $ (9,769) (83.8) %
Net Non-package Revenue 564 2,927 (2,363) (80.7) %
Owned Net Revenue 2,453 14,585 (12,132) (83.2) %
Owned Resort EBITDA $ (6,296) $ (1,201) $ (5,095) 424.2 %
Owned Resort EBITDA Margin (256.7) % (8.2) % (248.5) pts 3,030.5 %

~~Comparable Portfolio~~

Three Months Ended September 30, Increase / Decrease
2020 2019 Change % Change
Occupancy — % 59.6 % (59.6) pts (100.0) %
Net Package ADR $ — $ 153.45 $ (153.45) (100.0) %
Net Package RevPAR $ — $ 91.53 $ (91.53) (100.0) %
($ in thousands)
Net Package Revenue $ (6) $ 9,431 $ (9,437) (100.1) %
Net Non-package Revenue 87 2,502 (2,415) (96.5) %
Owned Net Revenue 81 11,933 (11,852) (99.3) %
Owned Resort EBITDA $ (1,599) $ 811 $ (2,410) (297.2) %
Owned Resort EBITDA Margin (1,974.1) % 6.8 % (1,980.9) pts (29,130.9) %

~~Segment Comparable Owned Net Revenue. Our Comparable Owned Net Revenue for the three months ended September 30, 2020 decreased $11.9 million, or 99.3%,~~year as compared to the ~~three months ended September 30, 2019. These decreases are a result~~second quarter of ~~the temporary suspension or reduced occupancy at~~2020 (during which time all of our resorts ~~in the third quarter in response to the COVID-19 pandemic.~~

~~Segment Comparable Owned Resort EBITDA~~. Our Comparable Owned Resort EBITDA for the three months ended September 30, 2020 decreased $2.4 million, or 297.2%, compared to the three months ended September 30, 2019.These decreases are a result of the temporary suspension or reduced occupancy at all of our resorts in the third quarter in response to the COVID-19 pandemic.

~~Jamaica~~

The following table sets forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Jamaica segment for the three months ended September 30, 2020 and 2019 for the total segment portfolio and comparable segment portfolio:

~~Total Portfolio~~

Three Months Ended September 30, Increase / Decrease
2020 2019 Change % Change
Occupancy 16.6 % 78.3 % (61.7) pts (78.8) %
Net Package ADR $ 236.94 $ 254.72 $ (17.78) (7.0) %
Net Package RevPAR $ 39.23 $ 199.40 $ (160.17) (80.3) %
($ in thousands)
Net Package Revenue $ 5,153 $ 35,698 $ (30,545) (85.6) %
Net Non-package Revenue 1,305 7,377 (6,072) (82.3) %
Owned Net Revenue 6,458 43,075 (36,617) (85.0) %
Owned Resort EBITDA $ (7,473) $ 8,802 $ (16,275) (184.9) %
Owned Resort EBITDA Margin (115.7) % 20.4 % (136.1) pts (667.2) %

~~Comparable Portfolio~~

Three Months Ended September 30, Increase / Decrease
2020 2019 Change % Change
Occupancy 16.6 % 77.5 % (60.9) pts (78.6) %
Net Package ADR $ 244.74 $ 282.45 $ (37.71) (13.4) %
Net Package RevPAR $ 40.52 $ 219.00 $ (178.48) (81.5) %
($ in thousands)
Net Package Revenue $ 5,323 $ 28,772 $ (23,449) (81.5) %
Net Non-package Revenue 1,218 5,760 (4,542) (78.9) %
Owned Net Revenue 6,541 34,532 (27,991) (81.1) %
Owned Resort EBITDA $ (6,768) $ 7,348 $ (14,116) (192.1) %
Owned Resort EBITDA Margin (103.5) % 21.3 % (124.8) pts (585.9) %

~~Segment Comparable Owned Net Revenue~~. Our Comparable Owned Net Revenue for the three months ended September 30, 2020 decreased $28.0 million, or 81.1%, compared to the three months ended September 30, 2019. These decreases are a result of the temporary suspension or reduced occupancy at all of our resorts in the third quarter in response to the COVID-19 pandemic. Comparable Owned Net Revenue during the third quarter includes a $0.5 million favorable VAT tax adjustment following OECD guidelines for Transfer Pricing for Multinational Enterprises which considers the economic impact of the COVID-19 pandemic. This adjustment results in a favorable adjustment to Comparable Net Package Revenue and Comparable Net Package ADR. Excluding this adjustment, Comparable Net Package Revenue would be $4.8 million representing a decrease of 83.3% for the three months ended September 30, 2020. Comparable Net Package ADR would be $221.32 and Comparable Net Package RevPAR would be $36.64, representing a decrease of 21.6% and a decrease of 83.3%, respectively for the three months ended September 30, 2020.

~~Segment Comparable Owned Resort EBITDA~~. Our Comparable Owned Resort EBITDA for the three months ended September 30, 2020 decreased $14.1 million, or 192.1%, compared to the three months ended September 30, 2019. These decreases are a result of the temporary suspension or reduced occupancy at all of our resorts in the third quarter in response to the COVID-19 pandemic.

~~Segment Results~~

~~Nine Months Ended September 30, 2020 and 2019~~

We evaluate our business segment operating performance using segment Owned Net Revenue and segment Owned Resort EBITDA. The following tables summarize segment Owned Net Revenue and segment Owned Resort EBITDA for the nine months ended September 30, 2020 and 2019 ~~($ in thousands)~~:

Nine Months Ended September 30, Increase / Decrease
2020 2019
Change
% Change
Owned Net Revenue
Yucatán Peninsula $ 79,689 $ 180,981 $ (101,292) (56.0) %
Pacific Coast 21,854 65,061 (43,207) (66.4) %
Dominican Republic 38,060 70,226 (32,166) (45.8) %
Jamaica 58,458 152,686 (94,228) (61.7) %
Segment Owned Net Revenue 198,061 468,954 (270,893) (57.8) %
Other 293 30 263 876.7 %
Management Fee Revenue 635 1,568 (933) (59.5) %
Total Net Revenue $ 198,989 $ 470,552 $ (271,563) (57.7) %

Nine Months Ended September 30, Increase / Decrease
2020 2019
Change
% Change
Owned Resort EBITDA
Yucatán Peninsula $ 15,111 $ 67,087 $ (51,976) (77.5) %
Pacific Coast 3,726 25,451 (21,725) (85.4) %
Dominican Republic (3,388) 17,305 (20,693) (119.6) %
Jamaica 3,503 47,781 (44,278) (92.7) %
Segment Owned Resort EBITDA 18,952 157,624 (138,672) (88.0) %
Other corporate (26,782) (28,519) 1,737 (6.1) %
Management Fee Revenue 635 1,568 (933) (59.5) %
Total Adjusted EBITDA $ (7,195) $ 130,673 $ (137,868) (105.5) %

~~Yucatán Peninsula~~

The following tables set forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Yucatán Peninsula segment for the nine months ended September 30, 2020 and 2019 for the total segment portfolio and comparable segment portfolio:

~~Total Portfolio~~

Nine Months Ended September 30, Increase / Decrease
2020 2019
Change
% Change
Occupancy 31.2 % 84.9 % (53.7) pts (63.3) %
Net Package ADR $ 296.21 $ 261.93 $ 34.28 13.1 %
Net Package RevPAR $ 92.48 $ 222.42 $ (129.94) (58.4) %
($ in thousands)
Net Package Revenue $ 68,978 $ 158,487 $ (89,509) (56.5) %
Net Non-package Revenue 10,711 22,494 (11,783) (52.4) %
Owned Net Revenue 79,689 180,981 (101,292) (56.0) %
Owned Resort EBITDA $ 15,111 $ 67,087 $ (51,976) (77.5) %
Owned Resort EBITDA Margin 19.0 % 37.1 % (18.1) pts (48.8) %

~~Comparable Portfolio~~

Nine Months Ended September 30, Increase / Decrease
2020 2019
Change
% Change
Occupancy 31.3 % 85.4 % (54.1) pts (63.3) %
Net Package ADR $ 296.33 $ 262.09 $ 34.24 13.1 %
Net Package RevPAR $ 92.68 $ 223.78 $ (131.10) (58.6) %
($ in thousands)
Net Package Revenue $ 55,818 $ 134,198 $ (78,380) (58.4) %
Net Non-package Revenue 8,420 18,779 (10,359) (55.2) %
Owned Net Revenue 64,238 152,977 (88,739) (58.0) %
Owned Resort EBITDA $ 11,913 $ 57,695 $ (45,782) (79.4) %
Owned Resort EBITDA Margin 18.5 % 37.7 % (19.2) pts (50.9) %

~~Segment Comparable Owned Net Revenue~~. Our Comparable Owned Net Revenue for the nine months ended September 30, 2020 decreased $88.7 million, or 58.0%, compared to the nine months ended September 30, 2019. These decreases are a result of the temporary suspension or reduced occupancy at all of our resorts during the second and third quarters in response to the COVID-19 pandemic. Comparable Owned Net Revenue during the third quarter includes a $1.4 million favorable VAT tax adjustment following OECD guidelines for Transfer Pricing for Multinational Enterprises which considers the economic impact of the COVID-19

pandemic. This adjustment results in a favorable adjustment to Comparable Net Package Revenue and Comparable Net Package ADR. Excluding this adjustment, Comparable Net Package Revenue would be $54.4 million representing a decrease of 59.4% for the nine months ended September 30, 2020. Comparable Net Package ADR would be $289.00 and Comparable Net Package RevPAR would be $90.39, representing an increase of 10.3% and a decrease of 59.6%, respectively for the nine months ended September 30, 2020.

Total segment Owned Net Revenue during the third quarter includes a $2.0 million favorable VAT tax adjustment. Excluding this adjustment, Net Package Revenue would be $67.0 million, representing a decrease of 57.8% for the nine months ended September 30, 2020. Net Package ADR would be $287.53 and Net Package RevPAR would be $89.77, representing an increase of 9.8% and a decrease of 59.6%, respectively for the nine months ended September 30, 2020.

~~Segment Comparable Owned Resort EBITDA~~. Our Comparable Owned Resort EBITDA for the nine months ended September 30, 2020 decreased $45.8 million, or 79.4%, compared to the nine months ended September 30, 2019. These decreases are a result of the temporary suspension or reduced occupancy at all of our resorts during the second and third quarters in response to the COVID-19 pandemic.

~~Pacific Coast~~

The following tables set forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Pacific Coast segment for the nine months ended September 30, 2020 and 2019 for the total segment portfolio:

Nine Months Ended September 30, Increase / Decrease
2020 2019 Change % Change
Occupancy 21.1 % 76.2 % (55.1) pts (72.3) %
Net Package ADR $ 346.49 $ 292.73 $ 53.76 18.4 %
Net Package RevPAR $ 73.05 $ 222.92 $ (149.87) (67.2) %
($ in thousands)
Net Package Revenue $ 18,533 $ 56,354 $ (37,821) (67.1) %
Net Non-package Revenue 3,321 8,707 (5,386) (61.9) %
Owned Net Revenue 21,854 65,061 (43,207) (66.4) %
Owned Resort EBITDA $ 3,726 $ 25,451 $ (21,725) (85.4) %
Owned Resort EBITDA Margin 17.0 % 39.1 % (22.1) pts (56.5) %

~~Segment Owned Net Revenue~~. Our Owned Net Revenue for the nine months ended September 30, 2020 decreased $43.2 million, or 66.4%, nine months ended September 30, 2019. These decreases are a result of the temporary suspension or reduced occupancy at all of our resorts during the second and third quarters in response to the COVID-19 pandemic. Owned Net Revenue during the third quarter includes a $0.3 million favorable VAT tax adjustment following OECD guidelines for Transfer Pricing for Multinational Enterprises which considers the economic impact of the COVID-19 pandemic. This adjustment results in a favorable adjustment to Owned Net Revenue and Net Package ADR. Excluding this adjustment, Owned Net Revenue would be $18.2 million representing a decrease of 67.7% for the nine months ended September 30, 2020. Net Package ADR would be $340.27 and Net Package RevPAR would be $71.73, representing an increase of 16.2% and a decrease of 67.8%, respectively for the nine months ended September 30, 2020.

~~Segment Owned Resort EBITDA~~were closed).Our Owned Resort EBITDA for the nine months ended September 30, 2020 decreased $21.7 million, or 85.4%, compared to the nine months ended September 30, 2019. These decreases are a result of the temporary suspension or reduced occupancy at all of our resorts during the second and third quarters in response to the COVID-19 pandemic.

Dominican Republic

The following tables set forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Dominican Republic segment for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 for the total segment ~~portfolio and comparable segment~~ portfolio:

~~Total Portfolio~~

Nine Months Ended September 30, Increase / Decrease
2020 2019 Change % Change
Occupancy 20.0 % 66.9 % (46.9) pts (70.1) %
Net Package ADR $ 228.09 $ 196.91 $ 31.18 15.8 %
Net Package RevPAR $ 45.61 $ 131.77 $ (86.16) (65.4) %
($ in thousands)
Net Package Revenue $ 33,041 $ 58,304 $ (25,263) (43.3) %
Net Non-package Revenue 5,019 11,922 (6,903) (57.9) %
Owned Net Revenue 38,060 70,226 (32,166) (45.8) %
Owned Resort EBITDA $ (3,388) $ 17,305 $ (20,693) (119.6) %
Owned Resort EBITDA Margin (8.9) % 24.6 % (33.5) pts (136.2) %

~~Comparable Portfolio~~


		Nine Months Ended September 30,						Increase / Decrease						Six Months Ended June 30,						Increase / Decrease
		2020			2019			Change			% Change			2021			2020			Change			% Change
Occupancy	Occupancy	24.4		%	76.1		%	(51.7)		pts	(67.9)	%	Occupancy	35.5		%	28.6		%	6.9		pts	24.1	%
Net Package ADR	Net Package ADR	$	180.29		$	197.27		$	(16.98)		(8.6)	%	Net Package ADR	$	266.65		$	226.04		$	40.61		18.0	%
Net Package RevPAR	Net Package RevPAR	$	43.95		$	150.12		$	(106.17)		(70.7)	%	Net Package RevPAR	$	94.73		$	64.74		$	29.99		46.3	%
		($ in thousands)												($ in thousands)
Net Package Revenue	Net Package Revenue	$	13,487		$	45,899		$	(32,412)		(70.6)	%	Net Package Revenue	$	45,334		$	31,152		$	14,182		45.5	%
Net Non-package Revenue	Net Non-package Revenue	2,666			9,550			(6,884)			(72.1)	%	Net Non-package Revenue	9,435			4,455			4,980			111.8	%
Owned Net Revenue	Owned Net Revenue	16,153			55,449			(39,296)			(70.9)	%	Owned Net Revenue	54,769			35,607			19,162			53.8	%
Owned Resort EBITDA	Owned Resort EBITDA	$	1,188		$	16,787		$	(15,599)		(92.9)	%	Owned Resort EBITDA	$	9,592		$	2,908		$	6,684		229.8	%
Owned Resort EBITDA Margin	Owned Resort EBITDA Margin	7.4		%	30.3		%	(22.9)		pts	(75.6)	%	Owned Resort EBITDA Margin	17.5		%	8.2		%	9.3		pts	113.4	%

Segment ~~Comparable~~ Owned Net Revenue. Our ~~Comparable~~ Owned Net Revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2020 decreased $39.3~~2021 increased $19.2 million, or ~~70.9%~~53.8%, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020. These ~~decreases~~increases are a result of the ~~temporary suspension or reduced occupancy at~~resumption of operations this year as compared to the second quarter of 2020 (during which time all of our resorts ~~during~~were closed).

Compared to 2019, our Net Package ADR for the ~~second~~six months ended June 30, 2021 increased by $56.06, or 26.6%. This increase is driven by the opening of Hyatt Ziva and ~~third quarters~~Hyatt Zilara Cap Cana in ~~response to~~ the ~~COVID-19 pandemic.~~fourth quarter of 2019.

Segment ~~Comparable~~ Owned Resort EBITDA.Our ~~Comparable~~ Owned Resort EBITDA for the ~~nine~~six months ended ~~September~~June 30, ~~2020 decreased $15.6~~2021 increased $6.7 million, or ~~92.9%~~229.8%, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019. These decreases are a result of the temporary suspension or reduced occupancy at all of our resorts during the second and third quarters in response to the COVID-19 pandemic.~~2020.

Jamaica

The following table sets forth information with respect to our Occupancy, Net Package ADR, Net Package RevPAR, Net Package Revenue, Net Non-package Revenue, Owned Net Revenue, Owned Resort EBITDA and Owned Resort EBITDA Margin for our Jamaica segment for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 for the total segment portfolio:

Total Portfolio


		Nine Months Ended September 30,						Increase / Decrease						Six Months Ended June 30,						Increase / Decrease
		2020			2019			Change			% Change			2021			2020			Change			% Change
Occupancy	Occupancy	31.3		%	80.6		%	(49.3)		pts	(61.2)	%	Occupancy	37.7		%	37.0		%	0.7		pts	1.9	%
Net Package ADR	Net Package ADR	$	337.62		$	300.38		$	37.24		12.4	%	Net Package ADR	$	295.96		$	355.09		$	(59.13)		(16.7)	%
Net Package RevPAR	Net Package RevPAR	$	105.66		$	242.26		$	(136.60)		(56.4)	%	Net Package RevPAR	$	111.51		$	131.43		$	(19.92)		(15.2)	%
		($ in thousands)												($ in thousands)
Net Package Revenue	Net Package Revenue	$	49,659		$	128,492		$	(78,833)		(61.4)	%	Net Package Revenue	$	28,821		$	44,506		$	(15,685)		(35.2)	%
Net Non-package Revenue	Net Non-package Revenue	8,799			24,194			(15,395)			(63.6)	%	Net Non-package Revenue	7,035			7,494			(459)			(6.1)	%
Owned Net Revenue	Owned Net Revenue	58,458			152,686			(94,228)			(61.7)	%	Owned Net Revenue	35,856			52,000			(16,144)			(31.0)	%
Owned Resort EBITDA	Owned Resort EBITDA	$	3,503		$	47,781		$	(44,278)		(92.7)	%	Owned Resort EBITDA	$	1,292		$	10,976		$	(9,684)		(88.2)	%
Owned Resort EBITDA Margin	Owned Resort EBITDA Margin	6.0		%	31.3		%	(25.3)		pts	(80.8)	%	Owned Resort EBITDA Margin	3.6		%	21.1		%	(17.5)		pts	(82.9)	%

Comparable Portfolio


		Nine Months Ended September 30,						Increase / Decrease						Six Months Ended June 30,						Increase / Decrease
		2020			2019			Change			% Change			2021			2020			Change			% Change
Occupancy	Occupancy	29.0		%	80.3		%	(51.3)		pts	(63.9)	%	Occupancy	37.7		%	35.3		%	2.4		pts	6.8	%
Net Package ADR	Net Package ADR	$	354.84		$	327.96		$	26.88		8.2	%	Net Package ADR	$	296.48		$	380.91		$	(84.43)		(22.2)	%
Net Package RevPAR	Net Package RevPAR	$	103.04		$	263.34		$	(160.30)		(60.9)	%	Net Package RevPAR	$	111.70		$	134.64		$	(22.94)		(17.0)	%
		($ in thousands)												($ in thousands)
Net Package Revenue	Net Package Revenue	$	40,315		$	102,434		(62,119)			(60.6)	%	Net Package Revenue	$	28,872		$	34,992		(6,120)			(17.5)	%
Net Non-package Revenue	Net Non-package Revenue	7,329			19,150			(11,821)			(61.7)	%	Net Non-package Revenue	6,963			6,111			852			13.9	%
Owned Net Revenue	Owned Net Revenue	47,644			121,584			(73,940)			(60.8)	%	Owned Net Revenue	35,835			41,103			(5,268)			(12.8)	%
Owned Resort EBITDA	Owned Resort EBITDA	$	1,399		$	39,145		$	(37,746)		(96.4)	%	Owned Resort EBITDA	$	849		$	8,167		$	(7,318)		(89.6)	%
Owned Resort EBITDA Margin	Owned Resort EBITDA Margin	2.9		%	32.2		%	(29.3)		pts	(91.0)	%	Owned Resort EBITDA Margin	2.4		%	19.9		%	(17.5)		pts	(87.9)	%

Segment Comparable Owned Net Revenue. Our Owned Net Revenue for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 decreased ~~$73.9~~$5.3 million, or ~~60.8%~~12.8%, compared to the ~~nine~~six months ended ~~September~~June 30, 2019. These decreases are a result of the temporary suspension or reduced occupancy at all of our resorts during the second and third quarters in response to the COVID-19 pandemic. Comparable Owned Net Revenue during the third quarter includes a $0.5 million favorable VAT tax adjustment following OECD guidelines for Transfer Pricing for Multinational Enterprises which considers the economic impact of the COVID-19 pandemic. This adjustment results in a favorable adjustment to Comparable2020. Net Package ~~Revenue and Comparable Net Package ADR. Excluding this adjustment, Comparable Net Package Revenue would be $39.8 million representing~~ADR in the segment was negatively impacted by a ~~decrease~~higher mix of ~~61.1% for the nine months ended September 30, 2020.~~Occupancy at our lower chain scale resorts.

Compared to 2019, our Comparable Net Package ADR ~~would be $350.35 and Comparable Net Package RevPAR would be $101.73, representing an increase of 6.8% and a decrease of 61.4%, respectively~~ for the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021 decreased by $53.50, or 15.3%.

Segment Comparable Owned Resort EBITDA. Our Owned Resort EBITDA for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 decreased ~~$37.7~~$7.3 million, or ~~96.4%~~89.6%, compared to the ~~nine~~six months ended ~~September~~June 30, ~~2019. These decreases are a result of the temporary suspension or reduced occupancy at all of our resorts during the second and third quarters in response to the COVID-19 pandemic.~~2020.

5449

Non-U.S. GAAP Financial Measures

Reconciliation of Net ~~(Loss) Income~~Loss to Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)

The following is a reconciliation of our U.S. GAAP net ~~(loss) income~~loss to EBITDA, Adjusted EBITDA, Owned Resort EBITDA and Comparable Owned Resort EBITDA for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019~~2020 ($ in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2020		2019		2020		2019			2021		2020		2021		2020
Net (loss) income		$	(78,604)	$	(30,461)	$	(188,618)	$	13,567
Net loss										Net loss	$	(7,768)	$	(87,458)	$	(77,513)	$	(110,014)
Interest expense	Interest expense	19,973		9,936		61,844		34,796		Interest expense	18,950		20,916		37,117		41,871
Income tax provision (benefit)		5,299		1,530		(8,237)		(10,025)
Income tax benefit										Income tax benefit	(12,452)		(14,647)		(14,403)		(13,536)
Depreciation and amortization	Depreciation and amortization	22,518		29,417		69,877		77,636		Depreciation and amortization	20,017		22,400		40,900		47,359
EBITDA	EBITDA	(30,814)		10,422		(65,134)		115,974		EBITDA	18,747		(58,789)		(13,899)		(34,320)
Other (income) expense (a)		(224)		2,537		(1,171)		2,775
Other expense (income) (a)										Other expense (income) (a)	628		(4,853)		1,334		(947)
Share-based compensation	Share-based compensation	1,925		1,850		7,867		6,612		Share-based compensation	3,450		2,719		6,629		5,942
Pre-opening expenses		—		257		—		548

Transaction expense (b)	Transaction expense (b)	541		1,253		1,416		4,493		Transaction expense (b)	139		289		718		875
Severance expense (c)	Severance expense (c)	1,448		6		3,892		139		Severance expense (c)	—		1,246		1,287		2,444
Other tax (income) expense (d)		(170)		(318)		298		484

Impairment loss (e)		867		—		42,308		—
Other tax expense (d)										Other tax expense (d)	(2)		231		161		468
Impairment loss										Impairment loss	—		25,268		24,011		41,441
Loss on sale of assets	Loss on sale of assets	—		—		1,729		—		Loss on sale of assets	375		1,729		648		1,729
Non-service cost components of net periodic pension benefit (cost) (f)		311		(177)		1,600		(352)
Non-service cost components of net periodic pension (cost) benefit (e)										Non-service cost components of net periodic pension (cost) benefit (e)	(422)		738		(479)		1,289
Adjusted EBITDA	Adjusted EBITDA	(26,116)		15,830		(7,195)		130,673		Adjusted EBITDA	22,915		(31,422)		20,410		18,921
Other corporate	Other corporate	8,205		10,126		26,782		28,519		Other corporate	9,635		7,606		19,029		18,577
Management fee income	Management fee income	(8)		(83)		(635)		(1,568)		Management fee income	(452)		18		(796)		(627)
Owned Resort EBITDA	Owned Resort EBITDA	(17,919)		25,873		18,952		157,624		Owned Resort EBITDA	32,098		(23,798)		38,643		36,871
Less: Non-comparable Owned Resort EBITDA	Less: Non-comparable Owned Resort EBITDA	(6,065)		(204)		726		18,546		Less: Non-comparable Owned Resort EBITDA	(678)		(2,769)		(859)		4,652
Comparable Owned Resort EBITDA (g)		$	(11,854)	$	26,077	$	18,226	$	139,078
Comparable Owned Resort EBITDA (f)										Comparable Owned Resort EBITDA (f)	$	32,776	$	(21,029)	$	39,502	$	32,219

________

(a) Represents changes in foreign exchange rates and other miscellaneous expenses or income.

(b) Represents expenses incurred in connection with corporate initiatives, such as: debt refinancing costs; other capital raising efforts; ~~the redesign and build-out of our internal controls~~ and strategic initiatives, such as the launch of a new resort or possible expansion into new markets.

(d) Relates primarily to a Dominican Republic asset/revenue tax, which is an alternative tax to income tax in the Dominican Republic. We eliminate this expense from Adjusted EBITDA because it is substantially similar to the income tax provision or benefit we eliminate from our calculation of EBITDA.

(e) Represents the property and equipment impairment loss related to the sale of Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark and the impairment loss on the goodwill of our Jewel Paradise Cove Beach Resort & Spa, Jewel Dunn's River Beach Resort and Jewel Runaway Bay Beach Resort & Waterpark reporting units.

~~(f)~~ ~~Represents the~~ non-service cost components of net periodic pension (cost) benefit ~~(cost)~~ recorded within other (expense) income ~~(expense)~~ in the Condensed Consolidated Statement of Operations. ~~Previously, these amounts were presented within direct expense.~~ We include these ~~benefits (costs)~~ for the purposes of calculating Adjusted EBITDA as they are considered part of our ongoing resort operations.

~~(g)~~(f) Comparable resorts for the three ~~and nine~~ months ended ~~September~~June 30, ~~2020~~2021 exclude the following: ~~Hilton La Romana All-Inclusive Resort and Hilton Playa del Carmen All-Inclusive~~Capri Resort, which ~~were under renovation~~was sold in ~~2019, Hyatt Ziva and Hyatt Zilara Cap Cana, a ground-up development opened November 2019,~~June 2021, Dreams Puerto Aventuras, which was sold in February 2021, and Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark which were sold in May 2020.

Seasonality

The seasonality of the lodging industry and the location of our resorts in Mexico and the Caribbean generally result in the greatest demand for our resorts between mid-December and April of each year, yielding higher occupancy levels and package rates during this period. This seasonality in demand has resulted in predictable fluctuations in revenue, results of operations, and liquidity, which are consistently higher during the first quarter of each year than in successive quarters.

However, the COVID-19 pandemic has altered this seasonal trend in ~~2020.~~2020 and 2021. See “Impact of COVID-19 Pandemic” above for more information regarding the effects of the COVID-19 pandemic on our results of operations.

Inflation

Inflation has increased recently. Operators of lodging properties, in general, possess the ability to adjust room rates to reflect the effects of inflation. However, competitive pressures, in addition to the effects of the COVID-19 pandemic, may limit our ability to raise room rates to fully offset inflationary cost increases. See “Impact of COVID-19 Pandemic” above for more information regarding the effects of the COVID-19 pandemic on our results of operations.

Liquidity and Capital Resources

The suspension of operations ofat all of our resorts ~~which account for all of our revenue,~~from late March 2020 through July 2020 as a result of the COVID-19 pandemic, ~~from late March until July 2020,~~ and the ~~phased re-opening thereafter, has had a significant adverse effect on~~severely reduced occupancy we experienced upon reopening the resorts and the reduced occupancy levels we continue to experience, have adversely affected our liquidity. Our net cash used in operating activities for the nine months ended September 30, 2020 was $60.6 million and we expect to have negative cash flows from operations for the fourth quarter of 2020 and that our cash flows from operations will be adversely affected for the duration of the COVID-19 pandemic. As of October 31, 2020, we had approximately $177.6 million of available cash excluding $23.7 million of restricted cash. See “Impact of COVID-19 Pandemic” above for information regarding the measures we have taken to preserve our available cash.

As of ~~September~~June 30, ~~2020,~~2021, we had ~~$195.5~~$237.7 million of available cash, excluding restricted cash, ~~down~~up from ~~$251.0~~$146.9 million as of ~~June 30,~~December 31, 2020. The ~~reduction~~increase in available cash was primarily attributable to the net cash ~~used in operations in July, August and September 2020~~proceeds from our equity raise of ~~$18.0~~$137.7 million, ~~$15.4~~the sale of the Dreams Puerto Aventuras for $34.3 million and ~~$16.2~~the sale of the Capri Resort for $55.2 million, ~~respectively, development capital expenditures of $6.9 million and maintenance capital expenditures of $2.2 million,~~which were partially offset by ~~$3.2~~the repayment of our outstanding Revolving Credit Facility balance of $84.7 million and the Term Loan principal repayment of ~~business interruption insurance proceeds.~~$24.4 million.

Our primary short-term cash needs are paying operating expenses, maintaining our resorts, and servicing our outstanding indebtedness. As of ~~September~~June 30, ~~2020,~~2021, we had ~~$23.1~~$45.5 million of scheduled contractual obligations remaining in ~~2020.~~2021. We have deferred substantially all major development, expansion, renovation, repositioning and rebranding projects, ~~until at least 2021,~~ with timing subject to the duration of the COVID-19 pandemic and the pace at which our business returns to more normalized levels.

We expect to meet our short-term liquidity requirements generally through our existing cash balances, ~~the sale~~equity issuances or short-term borrowings under our Revolving Credit Facility. As of ~~non-core assets and, if necessary, additional borrowings or equity issuances. On~~ June ~~12, 2020, we announced that~~30, 2021, we had ~~raised $224.0~~$85.0 million available on our Revolving Credit Facility, of ~~additional capital from affiliates of Davidson Kempner Capital Management LP in the form of $204.0~~which $68.0 million of additional debt financing and $20.0 million of equity financing at a price of $4.10 per share. In addition, in May 2020 we sold Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark for a total consideration of $60.0 million in cash during the second quarter of 2020.does not mature until January 2024.

Long-term liquidity needs may include property developments, expansions, renovations, repositioning and rebranding projects, potential acquisitions and the repayment of indebtedness. As of ~~September~~June 30, ~~2020,~~2021, our total debt obligations were ~~$1,269.9~~$1,153.2 million (which represents the principal amounts outstanding under ~~our Revolving Credit Facility,~~ Term Loans, Property Loan and ~~Financing~~financing lease obligations, excluding ~~a $6.0~~$4.9 million of issuance ~~discount on our Term Loan~~discounts and ~~$11.1~~$9.1 million of unamortized debt issuance costs). We expect to meet our long-term liquidity requirements generally through the sources available for short-term needs, as well as equity or debt issuances or proceeds from the potential disposal of assets.

We are continuing to monitor our liquidity and we may pursue additional sources of liquidity as needed. The availability of additional liquidity options will depend on the economic and financial environment, our credit, our historical and projected financial and operating performance and continued compliance with financial covenants. If operating conditions do not improve, whether as a result of the current pandemic or a resurgence thereof or for other reasons, we may not be able to maintain our current liquidity position or access additional sources of liquidity at acceptable terms or at all.

Financing Strategy

We intend to use other financing sources that may be available to us from time to time, including financing from banks, institutional investors or other lenders, such as bridge loans, letters of credit, joint ventures and other arrangements. Future financings may be unsecured or may be secured by mortgages or other interests in our assets. In addition, we may issue publicly or privately placed debt or equity securities. When possible and desirable, we will seek to replace short-term financing with long-term financing. We may use the proceeds from any financings to refinance existing indebtedness, to finance resort projects or acquisitions or for general working capital or other purposes.

Our indebtedness may be recourse, non-recourse or cross-collateralized and may be fixed rate or variable rate. If the indebtedness is non-recourse, the obligation to repay such indebtedness will generally be limited to the particular resort or resorts pledged to secure such indebtedness. In addition, we may invest in resorts subject to existing loans secured by mortgages or similar liens on the resorts or may refinance resorts acquired on a leveraged basis.

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Cash Flows

The following table summarizes our net cash provided by or used in operating activities, investing activities and financing activities for the periods indicated and should be read in conjunction with our Condensed Consolidated Statements of Cash Flows and accompanying notes thereto ($ in thousands):

Nine Months Ended September 30,
2020 2019
Net cash (used in) provided by operating activities $ (60,552) $ 93,050
Net cash provided by (used in) investing activities $ 37,724 $ (163,356)
Net cash provided by (used in) financing activities $ 224,999 $ (17,882)


	Six Months Ended June 30,
	2021		2020
Net cash used in operating activities	$	(13,578)	$	(28,396)
Net cash provided by investing activities	$	80,560	$	58,862
Net cash provided by financing activities	$	23,520	$	227,544

Net Cash Provided by or Used in Operating Activities

Our net cash (used in) provided by operating activities is generated primarily from operating ~~(loss or)~~loss or income from our resorts. For the ~~nine~~six months ended ~~September~~June 30, 2021, our net cash used in operating activities was $13.6 million. For the six months ended June 30, 2020, our net cash used in operating activities was ~~$60.6 million. For the nine months ended September 30, 2019 our net cash provided by operating activities was $93.1~~$28.4 million.

•Net loss of ~~$188.6~~$77.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 included significant non-cash income and expenses, including ~~$69.9~~$40.9 million of depreciation and amortization, ~~$42.3~~$24.0 million of impairment losses, ~~$7.9~~$6.6 million of share-based compensation, and a ~~$9.7~~$4.6 million ~~loss~~gain on the fair value of our interest rate swaps, offset by changes in our assets and liabilities through the normal course of operations.

•Net ~~income~~loss of ~~$13.6~~$110.0 million for the ~~nine~~six months ended ~~September~~June 30, ~~2019~~2020 included significant non-cash ~~and cash~~ expenses, including ~~$77.6~~$47.4 million of depreciation and amortization, ~~$6.6~~$41.4 million of goodwill impairment losses, $5.9 million of share based compensation, and a ~~$0.2~~$11.4 million loss on the fair value of our interest rates swaps, offset by changes in our assets and liabilities through the normal course of operations.

Net Cash Provided by or Used in Investing Activities

For the ~~nine~~six months ended ~~September~~June 30, 2021, our net cash provided by investing activities was $80.6 million. For the six months ended June 30, 2020, our net cash provided by investing activities was ~~$37.7 million. For the nine months ended September 30, 2019 our net cash used in financing activities was $163.4~~$58.9 million.

Activity for the ~~nine~~six months ended ~~September~~June 30, ~~2020:~~2021:

•Net proceeds from the sale of assets of ~~$58.5~~$89.1 million; and

•Purchases of property and equipment of ~~$28.8 million;~~$8.4 million.

Activity for the six months ended June 30, 2020:

◦•~~Includes $18.1 million in payments for prior year non-cash purchases~~Purchases of property and ~~equipment;~~equipment of $7.4 million;

•~~Purchase~~Purchases of ~~intangibles~~intangible assets of ~~$0.5~~$0.3 million;

•Proceeds from the sale of assets of $58.1 million; and

•Receipt of key money of $8.5 ~~million.~~

~~Activity for the nine months ended September 30, 2019:~~

•~~Purchases of property and equipment of $165.5 million;~~

•~~Purchase of intangibles of $2.5 million;~~

•~~Property damage insurance proceeds of $2.0 million; and~~

•~~Receipt of key money of $2.5~~ million.

Capital Expenditures

We maintain each of our properties in good repair and condition and in conformity with applicable laws and regulations, franchise and license agreements and management agreements. Capital expenditures made to extend the service life or increase the capacity of our assets, including expenditures for the replacement, improvement or expansion of existing capital assets (i.e., maintenance capital expenditures), differ from ongoing repair and maintenance expense items, which do not in our judgment extend the service life or increase the capacity of assets and are charged to expense as incurred. We have approval rights over capital expenditures made by our

third-party manager as part of the annual budget process for each property they manage. From time to time, certain of our resorts may be undergoing renovations as a result of our decision to upgrade portions of the resorts, such as guestrooms, public space, meeting space, gyms, spas and/or restaurants, in order to better compete with other resorts in our markets. Due to the impacts of the COVID-19 pandemic on our liquidity, we ~~have~~ deferred all non-critical capital expenditures for the remainder of the year.

Net Cash Used in and Provided by Financing Activities

Our net cash provided by financing activities was ~~$225.0~~$23.5 million for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 compared to ~~$17.9~~$227.5 million inof cash ~~used in~~provided by financing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2019.~~2020.

Activity for the ~~nine~~six months ended ~~September~~June 30, ~~2020:~~2021:

•Net proceeds from our equity issuance of $137.7 million;

•Principal payments on our Term Loan of $29.4 million; and

•Repayments on our Revolving Credit Facility of $84.7 million.

Activity for the six months ended June 30, 2020:

•Proceeds from debt ~~issuance~~issuances of $199.6 million;

•Proceeds from borrowings on our Revolving Credit Facility of $40.0 million;

•Issuance costs of debt of $8.7 million;

•Net proceeds from our equity issuance of $19.6 million;

•Principal payments on our Term Loan of ~~$7.6~~$5.1 million;

•~~Issuance costs of debt of $8.7 million;~~

•~~Repayments~~Repayment on our Revolving Credit Facility of $15.3 million; and

•Repurchases of ordinary shares of $2.5 million.

~~Activity for the nine months ended September 30, 2019:~~

•~~Principal payments on our Term Loan of $7.6 million; and~~

•~~Repurchases of ordinary shares of $10.3 million.~~

~~Share Repurchases~~

On December 14, 2018, our Board authorized the repurchase of up to $100.0 million of our outstanding ordinary shares as means of returning capital to our shareholders. Repurchases may be made from time to time in the open market, in privately negotiated transactions or by other means (including Rule 10b5-1 trading plans). Depending on market conditions and other factors, these repurchases may be commenced or suspended from time to time without prior notice. During the first quarter of 2020, we purchased 340,109 ordinary shares at an average price of $7.35 per share. We did not repurchase any shares during the second or third quarter of 2020. We have purchased a total of 2,178,837 shares and there was approximately $83.5 million remaining under our share repurchase authorization as of September 30, 2020. As part of our cash preservation efforts given our liquidity position as a result of the COVID-19 pandemic, we have ~~suspended repurchases of our ordinary shares under our share repurchase program until we have more visibility into the longer-term impact of COVID-19 and economic conditions improve.~~

Senior Secured Credit Facility

Playa Resorts Holding B.V., a subsidiary of ours, holds a senior secured credit facility ~~(“Senior~~(the “Senior Secured Credit Facility”), pursuant to the Existing Credit Agreement, which consists of a term loan facility which ~~matures~~is scheduled to mature on April 27, 2024 (“Term Loan”) and ~~our Revolving Credit Facility~~a revolving credit facility, a portion of which ~~matures~~is scheduled to mature on April 27, 2022. We borrowed $530.0 million under our initial term loan facility on April 27, 2017 (our “First Term Loan”). We received net proceeds of $32.5 million from our First Term Loan after prepaying our existing Senior Secured Credit Facility2022 and a portion of ~~our Senior Notes due 2020 and deducting a debt issuance discount of $1.3 million and unamortized debt issuance costs of $2.6 million.~~

~~We borrowed an additional $380.0 million under an incremental term loan facility (our “Second Term Loan” and together with the First~~which is scheduled to mature on January 27, 2024 (“Revolving Credit Facility”). The Term Loan the “Initial Term Loan”) on December 6, 2017. We received no proceeds from the Second Term Loan after full repayment of our Senior Notes due 2020 and deducting a debt issuance discount of $1.0 million and unamortized debt issuance costs of $0.2 million.

~~Our Initial Term Loan bore~~bears interest at a rate per annum equal to LIBOR plus ~~3.25%~~2.75% (where the applicable LIBOR rate ~~had~~has a 1.0% floor), and interest continued to be payable in cash in arrears on the last day of the applicable interest period (unless we elected to use the ABR rate in which case, interest was payable on the last business day of each of March, June, September and December).

Effective March 29, 2018, we entered into two interest rate swaps to mitigate the long-term interest rate risk inherent in our variable rate Term Loan. The interest rate swaps have an aggregate fixed notional value of $800.0 million. The fixed rate paid by us is 2.85% and the variable rate received resets monthly to the one-month LIBOR rate.

On June 7, 2018, we entered into the Second Amendment to Amended & Restated Credit Agreement (the “Amendment”), which amended the Amended & Restated Credit Agreement, dated as of April 27, 2017 (the “Existing Credit Agreement”), governing our Senior Secured Credit Facility. The Amendment amended the Existing Credit Agreement to, among other things (i) effect an incremental term loan facility of $100.0 million (the “Third Term Loan” and, together with the Initial Term Loan, the “Term Loan”) that was incurred pursuant to the exercise of our option to request incremental loans under the Existing Credit Agreement and (ii) decrease the interest rate applicable to the Term Loan by 0.50% to, at our option, either a base rate plus a margin of 1.75% or LIBOR plus a margin of 2.75%. The ~~other terms to the Existing Credit Agreement were not affected by the Amendment.~~

Our Term Loan requires quarterly payments of principal equal to 0.25% of the original principal amount of the Term Loan on the last business day of each March, June, September and December. The remaining unpaid amount of our Term Loan is due and payable at maturity on April 27, 2024. We may voluntarily prepay borrowings at any time without premium or penalty, subject to customary breakage costs in the case of LIBOR-based loans.

~~Our~~ Revolving Credit Facility bears interest at ~~variable interest rates that are, at~~LIBOR plus 3.00% with respect to the ~~Borrower's option, either based on~~portion maturing in April 2022, and LIBOR ~~or based on an alternate base rate derived from~~plus 4.00% with respect to the ~~greatest of the federal funds rate plus a spread, prime rate, or a one-month euro-currency rate plus a spread.~~portion maturing January 2024. We are required to pay a commitment fee ranging from 0.25% to 0.5% per annum ~~(depending on the level of our consolidated secured leverage ratio in effect from time to time)~~ on the average daily undrawn ~~balance.~~balance of the Revolving Credit Facility.

The Senior Secured Facility requires that most of our subsidiaries, and in some limited cases the Company, comply with covenants relating to customary matters, including with respect to incurring indebtedness and liens, paying dividends or making certain other distributions or redeeming equity interests, making acquisitions and investments, effecting mergers and asset sales, prepaying junior indebtedness, and engaging in transactions with affiliates.

~~Fourth Amendment to Amended and Restated Credit Agreement~~

~~On June 12, 2020, we entered into the Fourth Amendment to the Amended & Restated Credit Agreement (the “Fourth Amendment”, and collectively with the unamended terms of~~obligations under the Senior Secured Credit Facility are guaranteed by (a) substantially all of our material subsidiaries, subject to certain exceptions and (b) the ~~“Existing Credit Agreement”).~~ Company on a limited recourse basis, with such guaranty being collateralized by a lien on our ordinary shares.

The ~~terms of the Senior Secured Credit Facility remain in effect except for the following terms modified~~obligations are further collateralized by, ~~the Fourth Amendment:~~

i.~~replace the total net leverage ratio requirement of the financial covenant with a minimum liquidity test until September 30, 2021 (the “Relief Period”);~~

~~ii.modify the financial covenant for certain test dates after the Relief Period; and~~

~~iii.add certain restrictions on,~~ among other things, ~~the incurrence~~a lien on (i) all resorts located in Mexico, (ii) certain personal property associated with such resort properties and (iii) pledges of ~~additional debt and making~~equity interests in certain of ~~investments, dispositions and restricted payments during the Relief Period.~~our subsidiaries that directly or indirectly own equity interests in any resort property or certain management companies.

Additional Credit Facility

On June 12, 2020, we entered into an additional senior secured credit facility with an average interest rate of 9.25% that matures on April 27, 2024 and ranks pari passu with the Existing Credit Agreement (the “Additional Credit Facility”). The Additional Credit Facility consists of the following term loans:

i.$35.0 million term loan at fixed rate of 11.4777% (the “Term A1 Loan”);

ii.$31.0 million term loan at fixed rate of 11.4777% (the “Term A2 Loan”); and

iii.$28.0 million term loan at our option of either a base rate plus a margin of 2.00% or LIBOR plus 3.00% (the “Term A3 Loan”). Term A3 Loan is subject to a 1.0% floor consistent with the Existing Credit Agreement.

We have used and intend to use the proceeds from the Additional Credit Facility for general corporate purposes. The obligations under the Additional Credit Facility are collateralized in a manner that is substantially identical to the Existing Credit Agreement.

Prior to the maturity date, the Additional Credit Facility does not require principal payments, but does include mandatory ~~prepayment~~repayment requirements for the Term A3 Loan that are consistent with the Existing Credit Agreement. Mandatory ~~prepayments~~repayments are

required for certain asset sales, casualty events and condemnation events that are not reinvested in our business where our total net leverage ratio is above 4.00x. We may not voluntarily prepay any portion of the Additional Credit Facility prior to June 2023 without paying a make-whole premium equal to 100% of the interest that would have otherwise accrued from the date of such payment through June 2022 plus 50% of the interest that otherwise would have accrued from June 2022 to June 2023. Subsequent to June 2023, we may prepay any portion of the Additional Credit Facility without penalty.

In connection with the Additional Credit Facility, we terminated the remaining $15.0 million of unused capacity of our Revolving Credit Facility under the Existing Credit Agreement. The Additional Credit Facility contains covenants (including a springing financial maintenance covenant) identical to those contained in the Existing Credit Agreement.

Property Loan Agreement

During the term of the Property Loan, we are required to deposit certain cash reserves including reserves for operating expenses, debt service and certain property improvement plan required work. We will continue to fund the reserves until the Properties achieve a debt service coverage ratio of 1.50x for two consecutive calendar quarters. These reserves are presented as restricted cash on our Condensed Consolidated Balance Sheet, which had a balance of ~~$27.6~~$25.6 million as of ~~September~~June 30, ~~2020.~~2021.

Contractual Obligations

As of ~~September~~June 30, ~~2020,~~2021, there have been no significant changes to our “Contractual Obligations” table in Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report, other than the change in our debt and related repayment requirements described below.

~~Total~~Our total debt ~~increased $223.5~~decreased $114.1 million, from ~~$1,046.4~~$1,267.3 million as of December 31, ~~2019~~2020 to ~~$1,269.9~~$1,153.2 million as of ~~September~~June 30, ~~2020.~~2021. This ~~increase~~decrease was driven by ~~an increase in~~ the ~~amount~~repayment of the $84.7 million balance previously outstanding on our Revolving Credit Facility ~~additional proceeds from Term Loans, addition of a Property Loan~~ and the ~~recognition of a financing lease (see Note 11), which was offset by scheduled principal payments~~$24.4 million repayment on our Term ~~Loan. We do not anticipate making any further payments~~Loan as a result of the sale of the Capri Resort in June 2021. In accordance with our Existing Credit Agreement, we utilized 50% of the net proceeds from the sale of $24.4 million, after deducting incremental expenses, to repay our Term Loan on ~~our Revolving Credit Facility in 2020.~~June 29, 2021.

Additionally, in connection with the terms of the Existing Credit Agreement and Second Amendment, we are required to use the net proceeds from the sale of assets, subject to ~~prepay~~certain exceptions, including for customary reinvestment rights, to repay the proportionate balance on our Senior Secured Credit Facility and Term A3 Loan if our net leverage ratio is above 4.00x. In May 2022 and February 2023, we anticipate that we will ~~prepay~~repay the net proceeds, ~~which was $50.3 million as of September 30, 2020,~~after taking into account certain investments made in accordance with our customary reinvestment rights, from the ~~sale~~sales of the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark ~~less~~of $24.0 million and the Dreams Puerto Aventuras of $9.5 million, respectively, which include incremental transaction ~~costs~~costs and capital expenditures incurred across our portfolio leading up to the ~~prepayment~~repayment date. In December 2022, we expect to repay the remaining 50% of the net proceeds from the sale of the Capri Resort of $24.4 million.

Off Balance Sheet Arrangements

We had no off balance sheet arrangements for the three and ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 and ~~2019.~~2020.

Critical Accounting Policies and Estimates

Our Condensed Consolidated Financial Statements included herein have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts and related disclosures. A number of our significant accounting policies are critical due to the fact that they require us to exercise a higher degree of judgment and estimation based on assumptions that are inherently uncertain. While we believe our estimates, assumptions and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions, which could have a material effect on our financial position, results of operations and related disclosures. The impacts of the COVID-19 pandemic have increased uncertainty, which has reduced our ability to use past results to estimate future performance. Accordingly, our estimates and judgments may be subject to greater volatility than has been the case in the past.

We have discussed those estimates that we believe are critical and require the use of complex judgment in their application in our Consolidated Financial Statements included within our Annual Report on Form 10-K for the year ended December 31, ~~2019,~~2020, filed with the SEC on ~~February 27, 2020.~~March 4, 2021. There have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them except for those disclosed in Note 2 to our Condensed Consolidated Financial Statements.

Fair Value of Financial Instruments

Our financial instruments consist of cash and cash equivalents, restricted cash, trade and other receivables, accounts receivable from related parties, certain prepayments and other assets, trade and other payables, payables to related parties, derivative financial

instruments, other liabilities including our pension obligation and debt (excluding the financing lease obligation). See Note 13, “Fair value of financial instruments,” to our Condensed Consolidated Financial Statements for more information.

Related Party Transactions

See Note 6, “Related party transactions,” to our Condensed Consolidated Financial Statements for information on these transactions.

Recent Accounting Pronouncements

See the recent accounting pronouncements in Note 2 to our Condensed Consolidated Financial Statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

In the normal course of operations, we are exposed to interest rate risk and foreign currency risk which may impact future income and cash flows.

Interest Rate Risk

The risk from market interest rate fluctuations mainly affects long-term debt bearing interest at a variable interest rate. We currently use an interest rate swap (see Note 12 of our Condensed Consolidated Financial Statements) to manage exposure to this risk. As of ~~September~~June 30, ~~2020, 23%~~2021, 15% of our outstanding indebtedness bore interest at floating rates and ~~77%~~85% bore interest at fixed rates. If market rates of interest on our floating rate debt were to increase by 1.0%, the increase in interest expense on our floating rate debt would decrease our future earnings and cash flows by approximately ~~$1.2~~$0.2 million annually, assuming the balance outstanding under our Revolving Credit Facility remained at ~~$84.7~~$0 million. If market rates of interest on our floating rate debt were to decrease by 1.0%, ~~the decrease in interest expense~~there would be no impact on our floating rate debt ~~would increase~~or our future earnings and cash flows, ~~by approximately $0.1 million annually,~~ assuming the balance outstanding under our Revolving Credit Facility remained at ~~$84.7~~$0 million and ~~given~~ the current LIBOR rate on our floating rate debt ~~can~~could not fall below the 1%existing 1.0% LIBOR floor.

Foreign Currency Risk

We are exposed to exchange rate fluctuations because all of our resort investments are based in locations where the local currency is not the U.S. dollar, which is our reporting currency. For the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 approximately ~~3.3%~~3.2% of our revenues were denominated in currencies other than the U.S. dollar. As a result, our revenues reported on our Condensed Consolidated Statements of Operations are affected by movements in exchange rates.

Approximately ~~81%~~84% of our operating expenses for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 were denominated in the local currencies in the countries in which we operate. As a result, our operating expenses reported on our Condensed Consolidated Statements of Operations are affected by movements in exchange rates.

The foreign currencies in which our expenses are primarily denominated are the Mexican Peso, Dominican Peso and the Jamaican Dollar. The effect of an immediate 5% adverse change in foreign exchange rates on Mexican Peso-denominated expenses at ~~September~~June 30, ~~2020~~2021 would have impacted our net income before tax by approximately $3.5 million on a year-to-date basis. The effect of an immediate 5% adverse change in foreign exchange rates on Dominican Peso-denominated expenses at ~~September~~June 30, ~~2020~~2021 would have impacted our net income before tax by approximately ~~$1.7~~$2.0 million on a year-to-date basis. The effect of an immediate 5% adverse change in foreign exchange rates on Jamaican Dollar-denominated expenses at ~~September~~June 30, ~~2020~~2021 would have impacted our net income before tax by approximately ~~$2.5~~$1.6 million on a year-to-date basis.

At this time, we do not have any outstanding derivatives or other financial instruments designed to hedge our foreign currency exchange risk.

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Item 4. Controls and Procedures.

Disclosure Controls and Procedures.

We maintain a set of disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) designed to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In accordance with Rule 13a-15(b) of the Exchange Act, as of the end of the period covered by this quarterly report, an evaluation was carried out under the supervision and with the participation of our management, including our Principal Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures. Based on that ongoing evaluation, including the remedial actions and the material weakness in internal control over financial reporting described below, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective as of ~~September~~June 30, ~~2020.~~2021.

Changes in Internal Control Over Financial Reporting.

There has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on March 4, 2021, we identified a material weakness in our internal control over financial reporting that existed as of December 31, 2020. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement in our annual or interim financial statements will not be prevented or detected on a timely basis. We previously reported the following material weakness in our internal control over financial reporting that existed as of December 31, 2020, which has not been remediated as of June 30, 2021:

•The control activities related to our income tax provision did not operate with a level of precision that would identify a material misstatement (the “Tax Weakness”).

We have initiated and implemented measures designed to improve our internal controls processes and procedures related to income tax accounting. As a result of these efforts, we believe we are making progress toward remediating the underlying causes of the material weakness. Specifically, we hired additional resources and are in the process of developing and implementing enhanced policies, procedures and controls relating to income tax account reconciliations and analysis, including enhancing our documentation to reflect the control attributes that are performed and enhancing the precision of the control.

However, effectiveness will need to be successfully tested over several quarters before we can conclude that the Tax Weakness has been remediated. There can be no assurance that we will be successful in making these improvements and in remediating our current material weakness in a timely manner, or at all, and we may not prevent future material weaknesses from occurring.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings.

In the ordinary course of our business, we are subject to claims and administrative proceedings, none of which we believe are material or would be expected to have, individually or in the aggregate, a material adverse effect on our financial condition, cash flows or results of operations. The outcome of claims, lawsuits and legal proceedings brought against us, however, is subject to significant uncertainties. Refer to Note 7 to our financial statements included in “Item 1. Financial Statements” of this Form 10-Q for a more detailed description of such proceedings and contingencies.

Item 1A. Risk Factors.

~~We are supplementing~~As of June 30, 2021, there have been no material changes from the risk factors ~~described under “Item 1A. Risk Factors”~~previously disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2019~~2020, filed with the ~~additional risk factor set forth below,~~SEC on March 4, 2021, which ~~supplements, and to the extent inconsistent, supersedes such risk factors.~~

~~The effects of the ongoing COVID-19 pandemic are having a significant material adverse effect on our business, results of operations, cash flows and financial condition and if the pandemic~~ is ~~long-lasting these effects could be severe.~~

The outbreak of the coronavirus (COVID-19) pandemic has led governments and other authorities around the world to impose measures intended to control its spread, including restrictions on freedom of movement and business operations such as travel bans, border closings, business closures, quarantines and shelter-in-place orders. As a result, the pandemic has significantly disrupted global travel, and has adversely impacted global commercial activity across the travel, lodging and hospitality industries. The COVID-19 pandemic has had, and is expected to continue to have, significant adverse impacts on economic and market conditions and has resulted in a global economic contraction.

~~The effects of the COVID-19 pandemic~~accessible on the hospitality industry are unprecedented with global demand for lodging drastically reduced and occupancy levels reaching historic lows. Due to the rapid and broad spread of the virus and in response to related governmental restrictions and advisories, reductions in scheduled airline services and potential health risks to our employees and guests, we temporarily suspended operationsSEC's website at all of our resorts in late March 2020. Our resorts began reopening in July, in stages, based on incremental easing of government restrictions and advisories and increases in scheduled commercial airline service. As a result of the suspension of operations at all of our resorts, we had no revenues from resort operations in the second quarter of 2020. Currently, 18 out of our 21 resorts have reopened and we anticipate opening the remaining resorts during the fourth quarter of 2020. However, we have experienced severely reduced occupancy at the resorts that have reopened due to the effects of the pandemic. We cannot predict when the effects of the pandemic will subside, or if there will be a resurgence of the virus, and thus we cannot predict whether our opened resorts will be permitted to remain open or when our business at opened resorts will return to normalized levels. The longer and more severe the pandemic, and if there are repeat or cyclical outbreaks of the COVID-19 virus beyond the one being currently experienced, the greater the material adverse effect will be on our business, results of operations, cash flows, financial condition, access to credit markets and ability to service our indebtedness.

There also can be no guarantee that when the effects of the pandemic subside the demand for lodging, and consumer confidence in travel generally, will recover as quickly as other industries. Additionally, the effects of the pandemic have had, and we expect will continue to have, a material adverse effect on our ability to consummate acquisitions and dispositions of resorts and our ability to timely complete planned capital expenditures and other projects.

~~Additional risks to our business relating to the COVID-19 pandemic include the following:~~

•We have substantial debt outstanding currently, and our ability to service our significant financial obligations depends on our ability to generate significant cash flow from operations. Our cash flow from operations has been materially reduced as a result of the temporary suspension of operations and reduced occupancy at our resorts and will continue to be materially reduced as long as operations at some of our resorts remain suspended or opened resorts are operating at well-below historical levels. We cannot assure you that our business will generate cash flow from operations, that future borrowings will be available to us under our revolving credit facility, or that we will be able to complete any necessary financings or refinancings, in amounts sufficient to enable us to pay our debts and other obligations and fund our other liquidity needs;

•The agreements which govern our various debt obligations impose restrictions on our business, including certain covenants under our revolving credit facility which currently prevent additional draws on the facility and may materially impact our liquidity and financial position;

•Commercial airline service has been reduced or suspended to many of the regions in which our resorts are located. If scheduled airline service does not increase or return to normal levels once our resorts are re-opened it could have a material adverse effect on our resort revenues;

•The economic fallout from the effects of the pandemic on the regions in which our resorts are located could result in increases in crime, theft, vandalism and other safety and health concerns in these areas that could directly impact our resorts or could result in the perception of such risks among prospective guests, which could lead to decreased future demand for our resorts;

•~~We have been and may continue to be required to recognize significant non-cash impairment charges as a result of material reductions in our cash flows from operations;~~

•We may be subject to increased risks related to employee matters, including increased employment litigation and claims for severance or other benefits tied to terminations or furloughs as a result of the suspension of operations at our resorts prompted by the effects of the pandemic; and

•In order to raise additional capital to fund our operations and service our indebtedness, we have issued equity securities and we may need to issue additional equity securities in the future at prices that may be dilutive to existing stockholders and that may be below what we believe to be the intrinsic value of our ordinary shares.www.sec.gov.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(a) Unregistered Sale of Securities

None.

(b) Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

6457

Item 6. Exhibits.

The following exhibits are filed as part of this Form 10-Q:


Exhibit Number						Exhibit Description
















31.1						Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2						Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1						Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2						Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101						The following materials from Playa Hotels & Resorts N.V.’s Quarterly Report on Form 10-Q for the period ended ~~September~~June 30, ~~2020,~~2021, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive ~~Loss)~~Loss (iv) Condensed Consolidated Statements of Shareholders' Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) the Notes to the Condensed Consolidated Financial Statements

104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

6558

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Playa Hotels & Resorts N.V.

Date:

~~November~~August 4, ~~2020~~2021

By:

/s/ Bruce D. Wardinski

Bruce D. Wardinski

Chairman and Chief Executive Officer

(Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the undersigned, in his capacity as the principal financial officer of the registrant.

Playa Hotels & Resorts N.V.

Date:

~~November~~August 4, ~~2020~~2021

By:

/s/ Ryan Hymel

Ryan Hymel

Chief Financial Officer

(Principal Financial Officer)


	Three Months Ended September 30, 2019
	Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Other		Total
Package revenue	$	45,663	$	15,450	$	11,689	$	38,289	$	0	$	111,091
Non-package revenue	7,437		2,310		2,928		7,377		13		20,065
Management fees	0		0		0		0		83		83
Cost reimbursements	0		0		0		1,311		275		1,586
Total revenue	$	53,100	$	17,760	$	14,617	$	46,977	$	371	$	132,825


	Nine Months Ended September 30, 2019
	Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Other		Total
Package revenue	$	163,424	$	57,943	$	58,439	$	137,172	$	0	$	416,978
Non-package revenue	23,676		9,111		11,922		24,236		30		68,975
Management fees	0		0		0		0		1,568		1,568
Cost reimbursements	0		0		0		3,899		1,224		5,123
Total revenue	$	187,100	$	67,054	$	70,361	$	165,307	$	2,822	$	492,644