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 30, 2021~~March 31, 2022


☐			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)

Nieuwezijds Voorburgwal 104

1012 SG

Amsterdam,

the

Netherlands

Not Applicable

(Address of Principal Executive Offices)

(Zip Code)

+31 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	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~~April 29, ~~2021,~~2022, there were ~~164,220,739~~165,778,067 shares of the registrant’s ordinary shares, €0.10 par value, outstanding.

Table of Con tents


Playa Hotels & Resorts N.V. TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
		Page
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of ~~September 30, 2021~~March 31, 202 2 and December 31, ~~2020~~20 21	1
	Condensed Consolidated Statements of Operations for the three ~~and~~ n ~~ine~~months ended March 31, 202 ~~September~~2 ~~30, 2021~~ and ~~2020~~2 021	2
	Condensed Consolidated Statements of Comprehensive ~~Loss~~Income (Loss) for the three ~~and~~ ~~nin~~e months ended ~~September~~ ~~30,~~March 31, 2022 and 2021 ~~and 2020~~	3
	Condensed Consolidated Statements of Shareholders' Equity for the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 202 2 and ~~2020~~2 021	4
	Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended March 31, 202 ~~September~~2 ~~30, 2021~~ and ~~2020~~20 21	65
	Notes to the Condensed Consolidated Financial Statements	87
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	2622
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5642
Item 4.	Controls and Procedures	5743
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	5944
Item 1A.	Risk Factors	5944
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5944
Item 3.	Defaults Upon Senior Securities	5944
Item 4.	Mine Safety Disclosures	5944
Item 5.	Other Information	5944
Item 6.	Exhibits	6045

Table of Con tents

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,
2021 2020
ASSETS
Cash and cash equivalents $ 231,460 $ 146,919
Restricted cash 24,623 25,941
Trade and other receivables, net 40,271 25,433
Accounts receivable from related parties 4,319 3,726
Inventories 15,466 13,813
Prepayments and other assets 38,903 47,638
Property and equipment, net 1,595,613 1,727,383
Assets held for sale — 34,472
Goodwill, net 61,654 61,654
Other intangible assets 7,857 8,556
Deferred tax assets — 2,130
Total assets $ 2,020,166 $ 2,097,665
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade and other payables $ 128,574 $ 123,410
Payables to related parties 5,843 8,073
Income tax payable 122 348
Debt 943,203 1,251,267
Related party debt 193,771 —
Derivative financial instruments 31,136 46,340
Other liabilities 28,770 29,768
Deferred tax liabilities 64,794 77,637
Total liabilities 1,396,213 1,536,843
Commitments and contingencies (see Note 7) 0 0
Shareholders' equity
Ordinary shares (par value €0.10; 500,000,000 shares authorized, 166,428,743 shares issued and 164,220,739 shares outstanding as of September 30, 2021 and 136,770,086 shares issued and 134,571,290 shares outstanding as of December 31, 2020) 18,493 14,871
Treasury shares (at cost, 2,208,004 shares as of September 30, 2021 and 2,198,796 shares as of December 31, 2020) (16,697) (16,642)
Paid-in capital 1,174,141 1,030,148
Accumulated other comprehensive loss (22,086) (30,949)
Accumulated deficit (529,898) (436,606)
Total shareholders' equity 623,953 560,822
Total liabilities and shareholders' equity $ 2,020,166 $ 2,097,665


	As of March 31,		As of December 31,
	2022		2021
ASSETS
Cash and cash equivalents	$	299,802	$	270,088
Restricted cash	24,363		23,489
Trade and other receivables, net	61,660		45,442
Accounts receivable from related parties	12,927		7,981
Inventories	18,801		18,076
Prepayments and other assets	38,912		38,640
Property and equipment, net	1,569,739		1,584,574
Goodwill, net	61,654		61,654
Other intangible assets	7,340		7,632
Total assets	$	2,095,198	$	2,057,576
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade and other payables	$	160,474	$	160,222
Payables to related parties	7,312		5,050
Income tax payable	980		828
Debt	942,553		944,847
Related party debt	195,161		194,472
Derivative financial instruments	8,515		22,543
Other liabilities	30,136		29,882
Deferred tax liabilities	70,470		68,898
Total liabilities	1,415,601		1,426,742
Commitments and contingencies (see Note 7)	0		0
Shareholders' equity
Ordinary shares (par value €0.10; 500,000,000 shares authorized, 167,986,071 shares issued and 165,778,067 shares outstanding as of March 31, 2022 and 166,646,284 shares issued and 164,438,280 shares outstanding as of December 31, 2021)	18,670		18,518
Treasury shares (at cost, 2,208,004 shares as of March 31, 2022 and December 31, 2021)	(16,697)		(16,697)
Paid-in capital	1,180,584		1,177,380
Accumulated other comprehensive loss	(16,011)		(18,671)
Accumulated deficit	(486,949)		(529,696)
Total shareholders' equity	679,597		630,834
Total liabilities and shareholders' equity	$	2,095,198	$	2,057,576

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

Table of Con tents

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,
2021 2020 2021 2020
Revenue
Package $ 124,331 $ 22,705 $ 293,005 $ 176,062
Non-package 25,211 5,518 60,808 28,336
Management fees 673 8 1,469 635
Cost reimbursements 1,072 505 2,554 1,913
Total revenue 151,287 28,736 357,836 206,946
Direct and selling, general and administrative expenses
Direct 90,788 35,679 230,543 153,957
Selling, general and administrative 32,055 22,943 85,273 76,514
Depreciation and amortization 19,927 22,518 60,827 69,877
Reimbursed costs 1,072 505 2,554 1,913
Impairment loss — 867 24,011 42,308
(Gain) loss on sale of assets (4) — 644 1,729
Gain on insurance proceeds — (220) — (3,170)
Direct and selling, general and administrative expenses 143,838 82,292 403,852 343,128
Operating income (loss) 7,449 (53,556) (46,016) (136,182)
Interest expense (19,047) (19,973) (56,164) (61,844)
Other income (expense) 587 224 (747) 1,171
Net loss before tax (11,011) (73,305) (102,927) (196,855)
Income tax (provision) benefit (1,360) (5,299) 13,043 8,237
Net loss $ (12,371) $ (78,604) $ (89,884) $ (188,618)
Earnings per share
Losses per share - Basic $ (0.08) $ (0.58) $ (0.55) $ (1.44)
Losses per share - Diluted $ (0.08) $ (0.58) $ (0.55) $ (1.44)
Weighted average number of shares outstanding during the period - Basic 164,218,262 134,493,864 163,067,561 131,426,886
Weighted average number of shares outstanding during the period - Diluted 164,218,262 134,493,864 163,067,561 131,426,886


	Three Months Ended March 31,
		2022		2021
Revenue
Package		$	184,109	$	63,894
Non-package		32,456		12,995
Management fees		1,057		344
Cost reimbursements		1,952		513
Total revenue		219,574		77,746
Direct and selling, general and administrative expenses
Direct		106,840		60,221
Selling, general and administrative		37,239		24,668
Depreciation and amortization		19,500		20,883
Reimbursed costs		1,952		513
Impairment loss		—		24,011
Loss on sale of assets		—		273
Direct and selling, general and administrative expenses		165,531		130,569
Operating income (loss)		54,043		(52,823)
Interest expense		(9,168)		(18,167)
Other expense		(514)		(706)
Net income (loss) before tax		44,361		(71,696)
Income tax (provision) benefit		(1,614)		1,951
Net income (loss)		$	42,747	$	(69,745)

Earnings (loss) per share
Basic		$	0.26	$	(0.43)
Diluted		$	0.26	$	(0.43)
Weighted average number of shares outstanding during the period - Basic		165,743,382		160,827,261
Weighted average number of shares outstanding during the period - Diluted		166,888,129		160,827,261

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

Table of Con tents

Playa Hotels & Resorts N.V.

Condensed Consolidated Statements of Comprehensive ~~Loss~~Income (Loss)

($ in thousands)

(unaudited)

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Net loss $ (12,371) $ (78,604) $ (89,884) $ (188,618)
Other comprehensive income (loss), net of taxes
Gain (loss) on interest rate swaps 2,958 2,958 8,778 (9,164)
Release of foreign currency translation reserve related to sale of Capri Resort (see Note 4) — — 140 —
Pension obligation gain (loss) 38 100 (55) 197
Total other comprehensive income (loss) 2,996 3,058 8,863 (8,967)
Comprehensive loss $ (9,375) $ (75,546) $ (81,021) $ (197,585)


	Three Months Ended March 31,
		2022		2021
Net income (loss)		$	42,747	$	(69,745)
Other comprehensive income, net of taxes
Gain on interest rate swaps		2,894		2,894
Pension obligation loss		(234)		(11)
Total other comprehensive income		2,660		2,883
Comprehensive income (loss)		$	45,407	$	(66,862)

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

Table of Con tents

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, 2019 129,121,576 $ 14,215 1,846,095 $ (14,088) $ 1,001,088 $ (24,642) $ (174,236) $ 802,337
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) $ (196,792) $ 765,367
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) $ (284,250) $ 703,244
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) $ (362,854) $ 629,623


	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)	$	(436,606)	$	560,822
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)	$	(440,014)	$	557,414
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	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)	$	(509,759)	$	631,392


	Ordinary Shares			Treasury Shares			Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2021	164,438,280	$	18,518	2,208,004	$	(16,697)	$	1,177,380	$	(18,671)	$	(529,696)	$	630,834
Net income	—	—		—	—		—		—		42,747		42,747
Other comprehensive income	—	—		—	—		—		2,660		—		2,660
Share-based compensation	1,339,787	152		—	—		3,204		—		—		3,356
Balance at March 31, 2022	165,778,067	$	18,670	2,208,004	$	(16,697)	$	1,180,584	$	(16,011)	$	(486,949)	$	679,597

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

Table of Con tents

Playa Hotels & Resorts N.V.

Condensed Consolidated Statements of ~~Shareholders' Equity (continued)~~Cash Flows

($ in ~~thousands, except share data)~~thousands)

(unaudited)

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) $ (436,606) $ 560,822
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) $ (440,014) $ 557,414
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) $ (509,759) $ 631,392
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) $ (517,527) $ 630,058
Net loss — — — — — — (12,371) (12,371)
Other comprehensive income — — — — — 2,996 — 2,996
Share-based compensation 10,864 1 — — 3,269 — — 3,270
Balance at September 30, 2021 164,220,739 $ 18,493 2,208,004 $ (16,697) $ 1,174,141 $ (22,086) $ (529,898) $ 623,953


	Three Months Ended March 31,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	42,747	$	(69,745)
Adjustments to reconcile net income (loss) to net cash from operating activities
Depreciation and amortization	19,500		20,883
Amortization of debt discount and issuance costs	1,019		1,011
Share-based compensation	3,356		3,179
Gain on derivative financial instruments	(11,134)		(2,635)
Impairment loss	—		24,011
Deferred income taxes	1,572		(2,034)
Loss on sale of assets	—		273
Amortization of key money	(238)		(234)
Recovery of doubtful accounts	(483)		(9)
Other	(69)		199
Changes in assets and liabilities:
Trade and other receivables, net	(15,735)		(1,350)
Accounts receivable from related parties	(4,946)		244
Inventories	(725)		(356)
Prepayments and other assets	(223)		4,636
Trade and other payables	281		(2,940)
Payables to related parties	2,262		(1,345)
Income tax payable	152		(190)
Other liabilities	312		(160)
Net cash provided by (used in) operating activities	37,648		(26,562)
INVESTING ACTIVITIES
Capital expenditures	(4,430)		(4,561)

Purchase of intangibles	(30)		(29)
Proceeds from the sale of assets, net	24		34,212
Net cash (used in) provided by investing activities	(4,436)		29,622
FINANCING ACTIVITIES


Proceeds from ordinary shares, net of issuance costs	—		137,716
Repayments of debt	(2,525)		(2,525)

Repayments of borrowings on revolving credit facility	—		(84,667)

Repurchase of ordinary shares for tax withholdings	—		(55)
Principal payments on finance lease obligations	(99)		(23)
Net cash (used in) provided by financing activities	(2,624)		50,446
INCREASE IN CASH AND CASH EQUIVALENTS	30,588		53,506
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF THE PERIOD	$	293,577	$	172,860
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF THE PERIOD	$	324,165	$	226,366
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents	$	299,802	$	200,427
Restricted cash	24,363		25,939
TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH	$	324,165	$	226,366

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

Table of Con tents

Playa Hotels & Resorts N.V.

Condensed Consolidated Statements of Cash Flows (continued)

($ in thousands)

(unaudited)

Nine Months Ended September 30,
2021 2020
CASH FLOW FROM OPERATING ACTIVITIES
Net loss $ (89,884) $ (188,618)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization 60,827 69,877
Amortization of debt discount and issuance costs 3,078 1,793
Share-based compensation 9,899 7,867
(Gain) loss on derivative financial instruments (6,425) 9,737
Impairment loss 24,011 42,308
Deferred income taxes (14,123) (8,243)
Loss on sale of assets 644 1,729
Amortization of key money (404) (673)
(Recovery of)/provision for doubtful accounts (210) 2,051
Other 641 (333)
Changes in assets and liabilities:
Trade and other receivables, net (14,337) 48,328
Accounts receivable from related parties (593) 2,715
Inventories (1,741) 1,870
Prepayments and other assets 8,578 1,508
Trade and other payables 10,320 (51,663)
Payables to related parties (3,556) 1,663
Income tax payable (226) (866)
Other liabilities (533) (1,602)
Net cash used in operating activities (14,034) (60,552)
INVESTING ACTIVITIES
Capital expenditures (11,727) (28,817)
Receipt of key money — 8,500
Purchase of intangibles (212) (466)
Proceeds from the sale of assets, net 88,904 58,507
Net cash provided by investing activities 76,965 37,724
FINANCING ACTIVITIES
Proceeds from debt issuances, net of discount — 199,600
Issuance costs of debt — (8,677)
Proceeds from ordinary shares, net of issuance costs 137,716 19,558
Repayments of debt (31,954) (7,575)
Repayments of debt from related parties (681) —
Proceeds from borrowings on revolving credit facility — 40,000
Repayments of borrowings on revolving credit facility (84,667) (15,333)
Repurchase of ordinary shares — (2,500)
Repurchase of ordinary shares for tax withholdings (55) (54)
Principal payments on finance lease obligations (67) (20)
Net cash provided by financing activities 20,292 224,999
INCREASE IN CASH AND CASH EQUIVALENTS 83,223 202,171
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF THE PERIOD $ 172,860 $ 20,931
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF THE PERIOD $ 256,083 $ 223,102
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH
Cash and cash equivalents $ 231,460 $ 195,516
Restricted cash 24,623 27,586
TOTAL CASH, CASH EQUIVALENTS AND RESTRICTED CASH $ 256,083 $ 223,102


	Three Months Ended March 31,
	2022		2021
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest	$	18,221	$	18,798
Cash paid for income taxes, net	$	32	$	197
SUPPLEMENTAL DISCLOSURES OF NON-CASH ACTIVITIES
Capital expenditures incurred but not yet paid	$	696	$	720
Intangible assets capitalized but not yet paid	$	45	$	59


Par value of vested restricted share awards	$	152	$	87

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

~~Playa Hotels & Resorts N.V.~~

~~Condensed Consolidated Statements~~Table of ~~Cash Flows (continued)~~

~~($ in thousands)~~

~~(unaudited)~~

Nine Months Ended September 30,
2021 2020
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest $ 58,485 $ 48,762
Cash paid for income taxes, net $ 2,042 $ 2,146
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Capital expenditures incurred but not yet paid $ 1,575 $ 3,109
Intangible assets capitalized but not yet paid $ 109 $ 225
Right-of-use assets obtained in exchange for new finance lease liabilities $ — $ 2,333
Right-of-use assets obtained in exchange for new operating lease liabilities $ 262 $ —
Termination of right-of-use asset and operating lease liability $ — $ 646
Par value of vested restricted share awards $ 110 $ 94

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

Con tents

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 22 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. As of September 30, 2021, all of our resorts are open. We also implemented additional safety measures at our resorts to mitigate the potential health risks of COVID-19. 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.

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, ~~2020,~~2021, included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on ~~March 4, 2021~~February 24, 2022 (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~~ months ended ~~September 30, 2021~~March 31, 2022 are not necessarily indicative of the results of operations to be expected for the full year ~~ended~~ending December 31, ~~2021.~~2022. All dollar amounts (other than per share amounts) in the following disclosures are in thousands of United States dollars, unless otherwise indicated.

~~In connection with our efforts to remediate the Tax Weakness (as defined in Item 4.~~ ~~Controls and Procedures~~) in our internal control over financial reporting, we identified an error in our previously disclosed deferred tax liabilities for one of our Dominican Republic entities during the quarter ended September 30, 2021. Our Dominican Republic entities are subject to a hybrid tax regime where deferred tax liabilities are recognized using a hybrid tax rate. We determined that the basis difference related to the underlying purchase price value of land was not included in our initial hybrid tax calculation, which resulted in a $7.3 million understatement of our deferred tax liabilities and accumulated deficit for all prior periods presented.

~~We assessed the materiality of the error on our financial statements for prior periods in accordance with SEC Staff Accounting Bulletin (“SAB”) No. 99,~~ ~~Materiality, codified in Accounting Standards Codification (“ASC”) 250,~~ ~~Presentation of Financial Statements~~, and concluded that it was not material to any prior annual or interim periods. However, the aggregate amount of the prior period corrections of the immaterial error through September 30, 2021 of $7.3 million would have been material, if corrected, to the results of operations in the quarter and nine-month period ended September 30, 2021. Consequently, in accordance with ASC 250 (specifically SAB No. 108, ~~Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements~~), we have corrected the error for all prior periods presented by revising the Condensed Consolidated Financial Statements and other financial information included herein. The adjustment had no impact on our Condensed Consolidated Statements of Operations or Condensed Consolidated Statements of Cash Flows for all prior periods presented.

Note 2. Significant accounting policies

Standards 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~~

The adoption of ASU No. 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~~Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting

ASU No. 2021-01, Reference Rate Reform (Topic 848): Scope

The amendments in this update provide optional expedients and exceptions for applying ~~generally accepted accounting principles (GAAP)~~U.S. 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~~The adoption of ASU No. 2020-04 and ASU 2021-01 had no impact on ~~the~~our Condensed Consolidated Financial ~~Statements. We may elect to early adopt~~Statements for the ~~standard~~three months ended March 31, 2022, as we have not modified our variable rate debt that is priced using a spread over one-month London Interbank Offered Rate (“LIBOR”).

Additionally, our interest rate swaps mature on March 31, 2023, prior to the anticipated discontinuation of the one-month LIBOR ~~rates.~~rate on June 30, 2023. We do not expect to modify our interest rate swap contracts prior to their maturity date.

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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, 2021													Three Months Ended March 31, 2022
		Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Corporate/Other		Total			Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Other		Total
Package revenue	Package revenue	$	43,993	$	19,874	$	35,131	$	25,333	$	—	$	124,331	Package revenue	$	60,566	$	25,929	$	59,696	$	37,918	$	—	$	184,109
Non-package revenue	Non-package revenue	8,813		2,794		7,701		5,671		232		25,211		Non-package revenue	9,812		3,915		10,013		8,208		508		32,456
Management fees	Management fees	—		—		—		—		673		673		Management fees	30		—		—		—		1,027		1,057
Cost reimbursements	Cost reimbursements	—		—		—		789		283		1,072		Cost reimbursements	—		—		—		998		954		1,952
Total revenue	Total revenue	$	52,806	$	22,668	$	42,832	$	31,793	$	1,188	$	151,287	Total revenue	$	70,408	$	29,844	$	69,709	$	47,124	$	2,489	$	219,574

Three Months Ended September 30, 2020
Yucatán Peninsula Pacific Coast Dominican Republic Jamaica Corporate/Other Total
Package revenue $ 14,775 $ 526 $ 1,889 $ 5,515 $ — $ 22,705
Non-package revenue 3,128 261 564 1,306 259 5,518
Management fees — — — — 8 8
Cost reimbursements — — — 474 31 505
Total revenue $ 17,903 $ 787 $ 2,453 $ 7,295 $ 298 $ 28,736
Nine Months Ended September 30, 2021
Yucatán Peninsula Pacific Coast Dominican Republic Jamaica Corporate/Other Total
Package revenue $ 111,378 $ 45,167 $ 80,512 $ 55,948 $ — $ 293,005
Non-package revenue 22,637 7,603 17,137 12,705 726 60,808
Management fees — — — — 1,469 1,469
Cost reimbursements — — — 1,970 584 2,554
Total revenue $ 134,015 $ 52,770 $ 97,649 $ 70,623 $ 2,779 $ 357,836


		Nine Months Ended September 30, 2020													Three Months Ended March 31, 2021
		Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Corporate/Other		Total			Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Other		Total
Package revenue	Package revenue	$	71,337	$	19,160	$	33,078	$	52,487	$	—	$	176,062	Package revenue	$	28,870	$	7,552	$	17,463	$	10,009	$	—	$	63,894
Non-package revenue	Non-package revenue	10,862		3,362		5,019		8,800		293		28,336		Non-package revenue	5,808		1,362		3,432		2,268		125		12,995
Management fees	Management fees	—		—		—		—		635		635		Management fees	—		—		—		—		344		344
Cost reimbursements	Cost reimbursements	—		—		—		1,484		429		1,913		Cost reimbursements	—		—		—		377		136		513
Total revenue	Total revenue	$	82,199	$	22,522	$	38,097	$	62,771	$	1,357	$	206,946	Total revenue	$	34,678	$	8,914	$	20,895	$	12,654	$	605	$	77,746

Contract assets and liabilities

We do not have any material contract assets as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 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 March 31,		As of December 31,
		2021		2020			2022		2021
Property and equipment, gross	Property and equipment, gross					Property and equipment, gross
Land, buildings and improvements	Land, buildings and improvements	$	1,758,942	$	1,863,406	Land, buildings and improvements	$	1,760,827	$	1,759,837
Fixtures and machinery (1)	Fixtures and machinery (1)	79,717		83,802		Fixtures and machinery (1)	84,480		84,264
Furniture and other fixed assets	Furniture and other fixed assets	203,951		225,869		Furniture and other fixed assets	206,766		205,141
Construction in progress	Construction in progress	2,924		4,552		Construction in progress	4,646		3,781
Total property and equipment, gross	Total property and equipment, gross	2,045,534		2,177,629		Total property and equipment, gross	2,056,719		2,053,023
Accumulated depreciation	Accumulated depreciation	(449,921)		(450,246)		Accumulated depreciation	(486,980)		(468,449)
Total property and equipment, net	Total property and equipment, net	$	1,595,613	$	1,727,383	Total property and equipment, net	$	1,569,739	$	1,584,574

________

(1) Includes the gross balance of our ~~finance~~financing lease right-of-use ~~asset,~~assets, which was ~~$2.3~~$6.3 million as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021 (see Note 11).

Depreciation expense for property and equipment was ~~$19.6~~$19.1 million and ~~$21.9~~$20.5 million for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $59.8 million and $68.6 million for the nine months ended September 30, 2021 and 2020,~~ respectively.

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Sale of ~~assets~~

Capri Resort

On March 31, 2021, we entered into an agreement to sell our equity interest in the Capri Resort, which iswas 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~~for 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 Statementsthree months ended March 31, 2021.

Sale 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 (gain) 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 Capri Resort's net proceeds 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.~~Aventuras. 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 (gain) 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. Upon closing, we received total cash consideration of $58.7 million, after customary closing costs, and recognized a $1.8 million loss within (gain) 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 in May 2022.

costs.

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~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ ($ in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
Leases	Leases	2021		2020		2021		2020		Leases	2022		2021
Operating lease income (1)	Operating lease income (1)	$	796	$	254	$	2,189	$	1,400	Operating lease income (1)	$	1,226	$	606

________

(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, the United States, and the ~~United States.~~Netherlands. We are domiciled in the Netherlands and our Dutch subsidiaries are subject to a Dutch general tax rate of ~~25%~~25.8%. Our other operating subsidiaries are subject to tax rates up to 30% in the jurisdictions in which they are domiciled.

We ~~recorded~~recognized an income tax provision of ~~$1.4~~$1.6 million ~~and~~for the three months ended March 31, 2022, compared to an income tax benefit of ~~$13.0~~$2.0 million for the three ~~and nine~~ months ended September 30, 2021, respectively. The income tax provision and benefit include the impact of certain discrete adjustments related to the sale of our resorts and our valuation allowance for our Jamaica and Mexico entities.

For the nine months ended September 30, 2021, we recognized a net $5.5 million income tax benefit in connection with the sale of the Capri Resort and the Dreams Puerto Aventuras Resort (see Note 4). This represents the aggregate tax impact of capital gains, impairment, and elimination of related deferred tax balances.

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) and the timing of reversals of deferred tax liabilities, we recognized an additional $0.7 million tax benefit and $3.0 million tax expense related to valuation allowances against the deferred tax assets of our Mexico and Jamaica entities during the three and nine months ended September 30, 2021, respectively.

March 31, 2021.

All of our outstanding Advanced Pricing Agreements (“APAs”) for our Dominican Republic entities expired ~~during the third quarter~~as of December 31, 2021. We are currently in the process of renegotiating the terms of our APAs and expect that the terms will be finalized before ~~2021 year-end.~~the end of 2022. This is reflected in our estimated annual effective tax rate calculation.

We had no uncertain tax positions or unrecognized tax benefits as of ~~September 30, 2021.~~March 31, 2022. We expect no significant changes in unrecognized tax benefits over the next twelve months.

Note 6. Related party transactions

Relationship with Hyatt and AMResorts

Hyatt Hotels Corporation (“Hyatt”) is considered a related party due to its ownership of our ordinary shares by its affiliated entities. Hyatt also had representation on our Board of Directors until August 18, 2021. 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.

In November 2021, Hyatt completed its acquisition of Apple Leisure Group (“ALG”), which owns the brand management platform AMResorts in addition to various tour operators and travel agencies. We pay AMResorts and its affiliates, as operators of two of our resorts, management and marketing fees, and sell all-inclusive packages through ALG’s tour operators and travel agencies.

Relationship with Sagicor

Sagicor Financial Corporation Limited and its affiliated entities (collectively “Sagicor”) is considered a related party due to its ownership of our ordinary shares and representation on our Board of Directors. We pay Sagicor for employee insurance coverage ~~for~~ at

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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'~~DKCM funds’ ownership of our ordinary shares ~~following~~acquired in the ~~equity raise~~public offering of our ordinary shares in January ~~2021 (see Note 8).~~2021. 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~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ were as follows ($ in thousands):


			Three Months Ended September 30,				Nine Months Ended September 30,						Three Months Ended March 31,
Related Party	Related Party	Transaction	2021		2020		2021		2020		Related Party	Transaction	2022		2021
Revenues											Revenues
ALG											ALG	Package revenue	$	5,874	$	—
Sagicor											Sagicor	Cost reimbursements (1)	$	1,103	$	430
Expenses											Expenses
Hyatt	Hyatt	Franchise fees (1)	$	5,310	$	1,102	$	13,285	$	7,666	Hyatt	Franchise fees (2)	$	7,413	$	3,516
Sagicor		Insurance premiums (1)	$	213	$	187	$	571	$	720
Sagicor	Sagicor	Cost reimbursements	$	926	$	488	$	2,214	$	1,652	Sagicor	Insurance premiums (2)	$	279	$	155
Chief Executive Officer	Chief Executive Officer	Lease expense (2)	$	189	$	186	$	605	$	564	Chief Executive Officer	Lease expense (3)	$	188	$	228
DKCM	DKCM	Interest expense	$	5,563	$	—	$	16,434	$	—	DKCM	Interest expense (4)	$	5,405	$	5,404
AMResorts											AMResorts	Management fees (2)	$	1,112	$	—
AMResorts											AMResorts	Marketing fees (3)	$	1,083	$	—

________

(1)Equivalent amount included as reimbursed costs in the Condensed Consolidated Statements of Operations.

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

(4)Includes interest expense and amortization of deferred financing costs and discounts.

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. With the exception of Playa Dominican Resort B.V., Playa Romana B.V., Playa Romana Mar B.V. and Playa Hotels & Resorts N.V., our Dutch companies file as a fiscal unity. 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 January 11, 2021, we issued 28,750,000 ordinary shares with a par value of €0.10 per share in connection with a public equity offering. We received $137.7 million in cash consideration, net of underwriting discounts and customary closing costs.

As of ~~September 30, 2021,~~March 31, 2022, our ordinary share capital consisted of ~~164,220,739~~165,778,067 ordinary shares outstanding, which have a par value of €0.10 per share. In addition, ~~4,225,350~~3,926,401 restricted shares and performance share awards and ~~27,501~~27,245 restricted share units were

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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 30, 2021,~~March 31, 2022, there were ~~4,850,439~~3,498,568 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, ~~2021~~2022 to ~~September 30, 2021~~March 31, 2022 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, 2021		2,225,139	$	8.53
Unvested balance at January 1, 2022					Unvested balance at January 1, 2022	3,006,791	$	6.50
Granted	Granted	1,925,298	5.45		Granted	1,034,850	8.20
Vested	Vested	(908,657)	8.63		Vested	(1,323,366)	6.31
Forfeited	Forfeited	(16,448)	7.53		Forfeited	(93,752)	7.73
Unvested balance at September 30, 2021		3,225,332	$	6.67
Unvested balance at March 31, 2022					Unvested balance at March 31, 2022	2,624,523	$	7.22

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~~Our performance ~~share awards with~~shares have market conditions where 50% of the performance share awards will vest based on the total shareholder return (“TSR”) 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”).~~shares. The ~~Relative TSR Awards~~peer shareholder return component may vest between 0% and 150% of target, with the award capped at 100% of target should ~~Playa’s~~Playa's TSR be negative. The ~~Absolute TSR Awards~~growth rate component 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 our performance share awards ($ in thousands):


Performance Award Grant Date	Performance Award Grant Date	Percentage of Total Award		Grant Date Fair Value by Component		Volatility (1)		Interest Rate (2)		Dividend Yield		Performance Award Grant Date	Percentage of Total Award		Grant Date Fair Value by Component		Volatility (1)		Interest Rate (2)		Dividend Yield
January 4, 2021
January 4, 2022												January 4, 2022
Peer Shareholder Return	Peer Shareholder Return	50	%	$	3,088	57.69	%	0.16	%	—	%	Peer Shareholder Return	50	%	$	1,689	67.79	%	1.01	%	—	%
Growth Rate	Growth Rate	50	%	$	2,230	57.69	%	0.16	%	—	%	Growth Rate	50	%	$	1,346	67.79	%	1.01	%	—	%

________

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

(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, ~~2021~~2022 to ~~September 30, 2021~~March 31, 2022 is as follows:

Number of Shares Weighted-Average Grant Date Fair Value
Unvested balance at January 1, 2021 — $ —
Granted 1,027,519 5.18
Unvested balance at September 30, 2021 1,027,519 $ 5.18


	Number of Shares	Weighted-Average Grant Date Fair Value
Unvested balance at January 1, 2022	1,027,519	$	5.18
Granted	374,998	8.10
Vested	(16,421)	4.34
Forfeited	(56,973)	4.34
Unvested balance at March 31, 2022	1,329,123	$	6.05

1311

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Note 10. Earnings per share

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Numerator	Numerator									Numerator
Net loss		$	(12,371)	$	(78,604)	$	(89,884)	$	(188,618)
Net income (loss)										Net income (loss)	$	42,747	$	(69,745)
Denominator	Denominator									Denominator
Denominator for basic EPS - weighted-average number of shares outstanding	Denominator for basic EPS - weighted-average number of shares outstanding	164,218,262		134,493,864		163,067,561		131,426,886		Denominator for basic EPS - weighted-average number of shares outstanding	165,743,382		160,827,261
Effect of dilutive securities	Effect of dilutive securities									Effect of dilutive securities
Unvested performance share awards										Unvested performance share awards	401,903		—
Unvested restricted share awards	Unvested restricted share awards	—		—		—		—		Unvested restricted share awards	742,844		—
Denominator for diluted EPS - adjusted weighted-average number of shares outstanding	Denominator for diluted EPS - adjusted weighted-average number of shares outstanding	164,218,262		134,493,864		163,067,561		131,426,886		Denominator for diluted EPS - adjusted weighted-average number of shares outstanding	166,888,129		160,827,261

EPS - Basic	EPS - Basic	$	(0.08)	$	(0.58)	$	(0.55)	$	(1.44)	EPS - Basic	$	0.26	$	(0.43)
EPS - Diluted	EPS - Diluted	$	(0.08)	$	(0.58)	$	(0.55)	$	(1.44)	EPS - Diluted	$	0.26	$	(0.43)

For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021, unvested performance share awards in the amounts of 187,500 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 their effect would have been anti-dilutive. The performance targets of our unvested ~~performance-based equity~~performance share awards were partially achieved as of ~~September 30, 2021, but were not achieved as of September 30, 2020.~~March 31, 2022 and 2021.

~~For the three and nine months ended September 30, 2021 and 2020, 3,225,332 and 2,300,089 shares of~~We had no anti-dilutive unvested restricted share awards for the three months ended March 31, 2022. For the three months ended March 31, 2021, unvested restricted share awards of 3,432,944 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,~~March 31, 2021, ~~and 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 asduring the reporting period. On March 12, 2022, all of our outstanding warrants expired and had no impact on diluted EPS for the ~~end of the respective reporting period.~~three months ended March 31, 2022.

1412

Table of Con tents

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, 2021		December 31, 2020			Interest Rate	Maturity Date	March 31, 2022		December 31, 2021
Revolving Credit Facilities
Senior Secured Credit Facilities								Senior Secured Credit Facilities
Revolving Credit Facility (1)	Revolving Credit Facility (1)	LIBOR + 3.00% LIBOR + 4.00%	April 27, 2022 ($17.0 million) January 27, 2024 ($68.0 million)	$	—	$	84,667	Revolving Credit Facility (1)	LIBOR + 3.00% LIBOR + 4.00%	April 27, 2022 ($17.0 million) January 27, 2024 ($68.0 million)	$	—	$	—

Senior Secured Credit Facilities
Term Loan (2)	Term Loan (2)	LIBOR + 2.75%	April 27, 2024	$	944,393	$	976,348	Term Loan (2)	LIBOR + 2.75%	April 27, 2024	939,343		941,868
Term A1 Loan	Term A1 Loan	11.4777%	April 27, 2024	35,000		35,000		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		31,000		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	27,319		28,000		Term A3 Loan (3)	LIBOR + 3.00%	April 27, 2024	27,319		27,319
Total Term Loans (at stated value)				1,037,712		1,070,348
Total Senior Secured Credit Facilities (at stated value)								Total Senior Secured Credit Facilities (at stated value)			1,032,662		1,035,187
Unamortized discount	Unamortized discount			(1,279)		(1,658)		Unamortized discount			(1,029)		(1,153)
Unamortized debt issuance costs	Unamortized debt issuance costs			(4,662)		(6,015)		Unamortized debt issuance costs			(3,761)		(4,207)
Total Term Loans, net				$	1,031,771	$	1,062,675
Total Senior Secured Credit Facilities, net								Total Senior Secured Credit Facilities, net			$	1,027,872	$	1,029,827

Property Loan	Property Loan							Property Loan
Property Loan (at stated value)	Property Loan (at stated value)	9.25%	July 1, 2025	$	110,000	$	110,000	Property Loan (at stated value)	9.25%	July 1, 2025	$	110,000	$	110,000
Unamortized discount	Unamortized discount			(3,323)		(3,960)		Unamortized discount			(2,894)		(3,107)
Unamortized debt issuance costs	Unamortized debt issuance costs			(3,700)		(4,409)		Unamortized debt issuance costs			(3,223)		(3,459)
Total Property Loan, net	Total Property Loan, net			$	102,977	$	101,631	Total Property Loan, net			$	103,883	$	103,434

Finance lease obligations				$	2,226	$	2,294
Financing lease obligations								Financing lease obligations			$	5,959	$	6,058

Total debt, net	Total debt, net			$	1,136,974	$	1,251,267	Total debt, net			$	1,137,714	$	1,139,319

________

(1)Undrawn balances bear interest between 0.25% to 0.5% depending on certain leverage ratios. We had an available balance of $85.0 million ~~and $0.3 million available~~ as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020, respectively. The weighted-average interest rate on the outstanding balance of our Revolving Credit Facility was 3.15% as of December 31, 2020.~~2021.

(2)One-month ~~London Interbank Offered Rate (“LIBOR”)~~LIBOR is subject to a 1.0% floor. The effective interest rate was 3.75% as of both ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021. Our 2 interest rate swaps fix LIBOR at 2.85% on $800.0 million of our Term Loan (see Note 12).

(3)One-month LIBOR is subject to a 1.0% floor. The effective interest rate was 4.00% as of both ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.

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

On February 5, 2021, we entered into the Fifth Amendment to the Amended & Restated Credit Agreement (the “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 Fifth Amendment:

i.~~extend the maturity date for $68.0 million of our $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 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 and thereafter.~~

Financial maintenance covenants

We were in compliance with all applicable covenants as of ~~September 30, 2021.~~March 31, 2022. A summary of our applicable covenants and restrictions is as follows:


Debt						Covenant Terms
~~Existing~~Senior Secured Credit ~~Agreement~~Facility						We ~~are required to maintain a~~maintained the minimum liquidity balance of $70.0 million through ~~the Relief Period.~~ ~~If we have more than 35% drawn on the Revolving Credit Facility for periods subsequent~~March 31, 2022. Subsequent to ~~December~~March 31, ~~2021,~~2022, we will be subject to the following total net leverage ratio ~~requirements:~~requirements if we have more than 35% drawn on the Revolving Credit Facility: ▪6.50x for the period ended March 31, 2022; ▪6.00x for the period ended June 30, 2022; and ▪4.75x for periods thereafter.
Term A1 Loan						Same terms as the ~~Existing~~Senior Secured Credit ~~Agreement.~~Facility
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.

Table of Con tents

Note 12. Derivative financial instruments

~~Effective March 29, 2018, we entered into~~Our 2 interest rate swaps to mitigate the interest rate risk inherent to our floating rate ~~debt.~~debt, including the Revolving Credit Facility and Term Loan. 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.

Our interest rate swaps are designated as cash flow hedges, but ~~are~~were deemed ineffective due to the decrease in interest rates. All changes in fair value are recognized through interest expense in the Condensed Consolidated Statements of Operations.

The following tables present the effect of our interest rate swaps, net of tax, in the Condensed Consolidated Statements of Comprehensive ~~Loss~~Income (Loss) and Condensed Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ ($ in thousands):


		2021		2020			2022		2021
AOCI from our cash flow hedges as of January 1	AOCI from our cash flow hedges as of January 1	$	26,369	$	20,164	AOCI from our cash flow hedges as of January 1	$	14,632	$	26,369
Change in fair value	Change in fair value	—		16,956		Change in fair value	—		—
Reclassification from AOCI to interest expense	Reclassification from AOCI to interest expense	(2,894)		(1,908)		Reclassification from AOCI to interest expense	(2,894)		(2,894)
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	(2,894)		15,048		OCI related to our cash flow hedges for the three months ended March 31	(2,894)		(2,894)
Change in fair value		—		—
Reclassification from AOCI to interest expense		(2,926)		(2,926)
OCI related to our cash flow hedges for the three months ended June 30		(2,926)		(2,926)
Change in fair value		—		—
Reclassification from AOCI to interest expense		(2,958)		(2,958)
OCI related to our cash flow hedges for the three months ended September 30		(2,958)		(2,958)
AOCI from our cash flow hedges as of September 30(1)		$	17,591	$	29,328
AOCI from our cash flow hedges as of March 31 (1)						AOCI from our cash flow hedges as of March 31 (1)	$	11,738	$	23,475

________

(1) As of ~~September 30, 2021,~~March 31, 2022, the total amount expected to be reclassified from AOCI to interest expense during the next twelve months is $11.7 ~~million.~~million, which represents prior losses recognized in AOCI when our interest rate swaps were deemed effective hedges.


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 March 31,
			2021		2020		2021			2020				2022			2021
Interest rate swaps (1)	Interest rate swaps (1)		Interest expense		$	3,807	$	3,803		$	10,209		$	22,306		Interest rate swaps (1)	Interest expense	$	(5,715)	$	2,811

________

(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 ~~table presents~~tables present the effect of our interest rate swaps in the Condensed Consolidated Balance Sheet as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 ($ in thousands):


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 March 31,	As of December 31,
			2021		2020					2022			2021
Interest rate swaps	Interest rate swaps		Derivative financial instruments		$	31,136			$	46,340		Interest rate swaps	Derivative financial instruments	$	8,515	$	22,543

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.

Table of Con tents

We believe the carrying value of our financial instruments, excluding our debt, approximate their fair values as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021. We did not have any Level 3 instruments during any of the periods presented in our Condensed Consolidated Financial ~~Statements.~~

Statements
.

The following tables present our fair value hierarchy for our financial liabilities measured at fair value on a recurring basis as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 ($ in thousands):


		September 30, 2021		Level 1		Level 2		Level 3			March 31, 2022		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	$	31,136	$	—	$	31,136	$	—	Interest rate swap	$	8,515	$	—	$	8,515	$	—


		December 31, 2020		Level 1		Level 2		Level 3			December 31, 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	$	46,340	$	—	$	46,340	$	—	Interest rate swap	$	22,543	$	—	$	22,543	$	—

The following tables present our fair value hierarchy for our financial liabilities not measured at fair value as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 ($ in thousands):


		Carrying Value		Fair Value							Carrying Value		Fair Value
		As of September 30, 2021		Level 1		Level 2		Level 3			As of March 31, 2022		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	$	940,977	$	—	$	—	$	931,813	Term Loan	$	936,593	$	—	$	—	$	923,069

Term A1 Loan	Term A1 Loan	34,060		—		—		35,515		Term A1 Loan	34,240		—		—		35,524
Term A2 Loan	Term A2 Loan	30,167		—		—		31,456		Term A2 Loan	30,327		—		—		31,465
Term A3 Loan	Term A3 Loan	26,567		—		—		27,153		Term A3 Loan	26,712		—		—		27,008
Property Loan	Property Loan	102,977		—		—		112,240		Property Loan	103,883		—		—		112,226
Total liabilities	Total liabilities	$	1,134,748	$	—	$	—	$	1,138,177	Total liabilities	$	1,131,755	$	—	$	—	$	1,129,292


		Carrying Value		Fair Value							Carrying Value		Fair Value
		As of December 31, 2020		Level 1		Level 2		Level 3			As of December 31, 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	$	971,920	$	—	$	—	$	936,799	Term Loan	$	938,788	$	—	$	—	$	924,917
Revolving Credit Facility		84,667		—		—		84,769
Term A1 Loan	Term A1 Loan	33,792		—		—		35,182		Term A1 Loan	34,151		—		—		35,598
Term A2 Loan	Term A2 Loan	29,930		—		—		31,161		Term A2 Loan	30,248		—		—		31,530
Term A3 Loan	Term A3 Loan	27,033		—		—		28,028		Term A3 Loan	26,640		—		—		27,006
Property Loan	Property Loan	101,631		—		—		109,871		Property Loan	103,434		—		—		111,593
Total liabilities	Total liabilities	$	1,248,973	$	—	$	—	$	1,225,810	Total liabilities	$	1,133,261	$	—	$	—	$	1,130,644

1815

Table of Con tents

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 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 ($ in thousands):


		As of September 30,		As of December 31,			As of March 31,		As of December 31,
		2021		2020			2022		2021
Gross trade and other receivables (1)	Gross trade and other receivables (1)	$	42,787	$	28,346	Gross trade and other receivables (1)	$	63,026	$	47,382
Allowance for doubtful accounts ~~(2)~~	Allowance for doubtful accounts ~~(2)~~	(2,516)		(2,913)		Allowance for doubtful accounts ~~(2)~~	(1,366)		(1,940)
Total trade and other receivables, net	Total trade and other receivables, net	$	40,271	$	25,433	Total trade and other receivables, net	$	61,660	$	45,442

________

(1) The opening balance as of January 1, ~~2020~~2021 was ~~$73.0~~$28.3 million.

~~(2)~~ ~~We recognized an additional $3.1 million in bad debt expense during the year ended December 31, 2020 primarily as result of the negative effects of COVID-19.~~

We have not experienced any significant write-offs to our accounts receivable during the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020.~~2021.

1916

Table of Con tents

Prepayments and other assets

The following summarizes the balances of prepayments and other assets as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 ($ in thousands):


		As of September 30,		As of December 31,			As of March 31,		As of December 31,
		2021		2020			2022		2021
Advances to suppliers	Advances to suppliers	$	6,510	$	8,748	Advances to suppliers	$	7,895	$	8,327
Prepaid income taxes	Prepaid income taxes	12,976		12,731		Prepaid income taxes	11,550		11,101
Prepaid other taxes (1)	Prepaid other taxes (1)	8,926		14,033		Prepaid other taxes (1)	8,344		7,995
Operating lease right-of-use assets	Operating lease right-of-use assets	3,959		4,263		Operating lease right-of-use assets	3,569		3,766
Key money (2)	Key money (2)	2,403		2,700		Key money (2)	2,349		2,376
Other assets	Other assets	4,129		5,163		Other assets	5,205		5,075
Total prepayments and other assets	Total prepayments and other assets	$	38,903	$	47,638	Total prepayments and other assets	$	38,912	$	38,640

________

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

(2) Represents a cash deposit related to the Sanctuary Cap Cana management contract. In April 2021, we entered into an agreement to classify this deposit as key money.

Goodwill

We recognized no goodwill impairment losses on our reporting units nor any additions to goodwill during the three ~~and nine~~ months ended ~~September 30, 2021.~~March 31, 2022. 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 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 are as follows ($ in thousands):


	Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Total
Gross carrying value	$	51,731	$	—	$	—	$	35,879	$	87,610
Accumulated impairment losses	(6,168)		—		—		(19,788)		(25,956)
Net carrying value	$	45,563	$	—	$	—	$	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 goodwill impairment losses at the following reporting units 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~~

~~Jewel Runaway Bay Beach Resort & Waterpark~~

~~Jamaica~~

~~7,318~~

~~Jewel Dunn’s River Beach Resort & Spa~~

~~Jamaica~~

~~5,400~~

~~Jewel Paradise Cove Beach Resort & Spa~~

~~Jamaica~~

~~4,321~~

2017

Table of Con tents

Other intangible assets

Other intangible assets as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 consisted of the following ($ in thousands):


		As of September 30,		As of December 31,			As of March 31,		As of December 31,
		2021		2020			2022		2021
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)	6,291		6,047		Enterprise resource planning system (2)	6,452		6,402
Other	Other	4,045		4,238		Other	4,099		4,073
Total gross carrying value	Total gross carrying value	13,111		13,060		Total gross carrying value	13,326		13,250

Accumulated amortization	Accumulated amortization					Accumulated amortization
Management contract	Management contract	(309)		(238)		Management contract	(356)		(333)
Enterprise resource planning system (2)	Enterprise resource planning system (2)	(1,678)		(1,125)		Enterprise resource planning system (2)	(2,113)		(1,895)
Other	Other	(3,267)		(3,141)		Other	(3,517)		(3,390)
Total accumulated amortization	Total accumulated amortization	(5,254)		(4,504)		Total accumulated amortization	(5,986)		(5,618)

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	1,591		1,662		Management contract	1,544		1,567
Enterprise resource planning system (2)	Enterprise resource planning system (2)	4,613		4,922		Enterprise resource planning system (2)	4,339		4,507
Other	Other	778		1,097		Other	582		683
Total net carrying value	Total net carrying value	$	7,857	$	8,556	Total net carrying value	$	7,340	$	7,632

________

(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 system, of which $0.9 million ~~and $1.4 million~~ was placed into service in 2021 ~~and 2020, respectively,~~ and is being amortized over a weighted-average amortization period of 7 years.

Amortization expense for intangible assets was ~~$0.3~~$0.4 million and ~~$0.6~~$0.3 million for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $1.0 million and $1.3 million for the nine months ended September 30, 2021 and 2020,~~ respectively.

Trade and other payables

The following summarizes the balances of trade and other payables as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 ($ in thousands):


		As of September 30,		As of December 31,			As of March 31,		As of December 31,
		2021		2020			2022		2021
Trade payables	Trade payables	$	18,495	$	23,348	Trade payables	$	24,294	$	23,843
Advance deposits (1)	Advance deposits (1)	39,245		29,707		Advance deposits (1)	61,188		62,644
Withholding and other taxes payable	Withholding and other taxes payable	31,132		37,450		Withholding and other taxes payable	35,142		32,655
Interest payable	Interest payable	99		618		Interest payable	99		99
Payroll and related accruals	Payroll and related accruals	21,491		15,668		Payroll and related accruals	20,306		23,998
Accrued expenses and other payables	Accrued expenses and other payables	18,112		16,619		Accrued expenses and other payables	19,445		16,983
Total trade and other payables	Total trade and other payables	$	128,574	$	123,410	Total trade and other payables	$	160,474	$	160,222

________

(1) The opening balance as of January 1, ~~2020~~2021 was ~~$53.8~~$29.7 million.

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Other liabilities

The following summarizes the balances of other liabilities as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 ($ in thousands):


		As of September 30,		As of December 31,			As of March 31,		As of December 31,
		2021		2020			2022		2021
Pension obligation (1)(2)	Pension obligation (1)(2)	$	6,285	$	6,231	Pension obligation (1)(2)	$	6,735	$	5,990
Lease liabilities		4,478		4,762
Operating lease liabilities						Operating lease liabilities	4,096		4,298
Unfavorable ground lease liability	Unfavorable ground lease liability	2,021		2,090		Unfavorable ground lease liability	1,939		1,967
Key money (3)	Key money (3)	15,089		15,790		Key money (3)	16,466		16,731
Other	Other	897		895		Other	900		896
Total other liabilities	Total other liabilities	$	28,770	$	29,768	Total other liabilities	$	30,136	$	29,882

________

(1) For the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the service cost component of net periodic pension cost was $0.2 million and $0.2 million, respectively. ~~For the nine months ended September 30, 2021 and 2020, the service cost component of net periodic pension cost was $0.6 million and $0.6 million, respectively. These~~The costs are recorded within direct expense in the Condensed Consolidated Statements of Operations.

(2) For the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the non-service cost components of net periodic pension ~~benefit or~~ cost were ~~nominal~~$0.4 million and ~~$0.3~~$0.1 million, respectively. ~~For the nine months ended September 30, 2021 and 2020, the non-service cost components of net periodic pension benefit or cost were $0.5 million and $1.6 million, respectively. These~~The costs are recorded within other ~~income (expense)~~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 of additional key money in 2020.~~

Note 15. Business segments

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~~ months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 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~~periods 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);~~expense; (d) ~~repairs from hurricanes and tropical storms; (e)~~ share-based compensation; ~~(f)~~(e) other tax ~~(expense) income; (g)~~expense; (f) transaction expenses; ~~(h) contract termination costs;~~ and ~~(i)~~(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.

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The following table presents segment owned net revenue and a reconciliation to total revenue for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ ($ in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Owned net revenue	Owned net revenue									Owned net revenue
Yucatán Peninsula	Yucatán Peninsula	$	51,209	$	17,351	$	129,879	$	79,689	Yucatán Peninsula	$	68,629	$	33,603
Pacific Coast	Pacific Coast	21,982		773		51,117		21,854		Pacific Coast	29,104		8,621
Dominican Republic	Dominican Republic	42,794		2,453		97,563		38,060		Dominican Republic	69,664		20,881
Jamaica	Jamaica	29,502		6,458		65,358		58,458		Jamaica	44,264		11,722
Segment owned net revenue (1)	Segment owned net revenue (1)	145,487		27,035		343,917		198,061		Segment owned net revenue (1)	211,661		74,827
Other	Other	232		258		726		293		Other	507		125
Management fees	Management fees	673		8		1,469		635		Management fees	1,057		344
Cost reimbursements	Cost reimbursements	1,072		505		2,554		1,913		Cost reimbursements	1,952		513
Compulsory tips	Compulsory tips	3,823		930		9,170		6,044		Compulsory tips	4,397		1,937
Total revenue	Total revenue	$	151,287	$	28,736	$	357,836	$	206,946	Total revenue	$	219,574	$	77,746

________

(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~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ ($ in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Owned Resort EBITDA	Owned Resort EBITDA									Owned Resort EBITDA
Yucatán Peninsula	Yucatán Peninsula	$	17,518	$	(1,820)	$	37,714	$	15,111	Yucatán Peninsula	$	29,458	$	7,174
Pacific Coast	Pacific Coast	6,429		(2,330)		13,992		3,726		Pacific Coast	12,544		485
Dominican Republic	Dominican Republic	11,267		(6,296)		20,859		(3,388)		Dominican Republic	28,377		1,666
Jamaica	Jamaica	5,632		(7,473)		6,924		3,503		Jamaica	17,158		(2,780)
Segment Owned Resort EBITDA	Segment Owned Resort EBITDA	40,846		(17,919)		79,489		18,952		Segment Owned Resort EBITDA	87,537		6,545
Other corporate	Other corporate	(9,749)		(8,205)		(28,778)		(26,782)		Other corporate	(11,651)		(9,394)
Management fees	Management fees	673		8		1,469		635		Management fees	1,057		344
Total Adjusted EBITDA		31,770		(26,116)		52,180		(7,195)
Adjusted EBITDA										Adjusted EBITDA	76,943		(2,505)
Interest expense	Interest expense	(19,047)		(19,973)		(56,164)		(61,844)		Interest expense	(9,168)		(18,167)
Depreciation and amortization	Depreciation and amortization	(19,927)		(22,518)		(60,827)		(69,877)		Depreciation and amortization	(19,500)		(20,883)
Impairment loss	Impairment loss	—		(867)		(24,011)		(42,308)		Impairment loss	—		(24,011)
Gain (loss) on sale of assets		4		—		(644)		(1,729)
Other income (expense)		587		224		(747)		1,171
Repairs from hurricanes and tropical storms		(435)		—		(435)		—
Loss on sale of assets										Loss on sale of assets	—		(273)
Other expense										Other expense	(514)		(706)
Share-based compensation	Share-based compensation	(3,270)		(1,925)		(9,899)		(7,867)		Share-based compensation	(3,356)		(3,179)
Other tax (expense) income		(67)		170		(228)		(298)
Other tax expense										Other tax expense	(240)		(163)
Transaction expenses	Transaction expenses	(210)		(541)		(928)		(1,416)		Transaction expenses	(191)		(579)
Contract termination costs		(400)		—		(400)		—
Severance expense	Severance expense	—		(1,448)		(1,287)		(3,892)		Severance expense	—		(1,287)
Non-service cost components of net periodic pension (benefit) cost (1)		(16)		(311)		463		(1,600)
Net loss before tax		(11,011)		(73,305)		(102,927)		(196,855)
Non-service cost components of net periodic pension cost (1)										Non-service cost components of net periodic pension cost (1)	387		57
Net income (loss) before tax										Net income (loss) before tax	44,361		(71,696)
Income tax (provision) benefit	Income tax (provision) benefit	(1,360)		(5,299)		13,043		8,237		Income tax (provision) benefit	(1,614)		1,951
Net loss		$	(12,371)	$	(78,604)	$	(89,884)	$	(188,618)
Net income (loss)										Net income (loss)	$	42,747	$	(69,745)

________

(1) Represents the non-service cost components of net periodic pension ~~(benefit)~~ cost or benefit recorded within other ~~income (expense)~~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.

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The following table presents segment property and equipment, gross and a reconciliation to total property and equipment, net as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 ($ in thousands):


		As of September 30,		As of December 31,			As of March 31,		As of December 31,
		2021		2020			2022		2021
Segment property and equipment, gross	Segment property and equipment, gross					Segment property and equipment, gross
Yucatán Peninsula	Yucatán Peninsula	$	665,731	$	799,849	Yucatán Peninsula	$	668,667	$	667,618
Pacific Coast	Pacific Coast	288,122		288,328		Pacific Coast	289,243		288,309
Dominican Republic	Dominican Republic	679,057		678,900		Dominican Republic	684,948		684,187
Jamaica	Jamaica	407,826		406,047		Jamaica	409,009		408,107
Total segment property and equipment, gross	Total segment property and equipment, gross	2,040,736		2,173,124		Total segment property and equipment, gross	2,051,867		2,048,221
Corporate property and equipment, gross	Corporate property and equipment, gross	4,798		4,505		Corporate property and equipment, gross	4,852		4,802
Accumulated depreciation	Accumulated depreciation	(449,921)		(450,246)		Accumulated depreciation	(486,980)		(468,449)
Total property and equipment, net	Total property and equipment, net	$	1,595,613	$	1,727,383	Total property and equipment, net	$	1,569,739	$	1,584,574

The following table presents segment capital expenditures and a reconciliation to total capital expenditures for the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ ($ in thousands):


		Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020			2022		2021
Segment capital expenditures	Segment capital expenditures					Segment capital expenditures
Yucatán Peninsula	Yucatán Peninsula	$	2,709	$	3,423	Yucatán Peninsula	$	1,265	$	681
Pacific Coast	Pacific Coast	536		1,120		Pacific Coast	1,152		141
Dominican Republic	Dominican Republic	1,874		6,728		Dominican Republic	946		645
Jamaica	Jamaica	3,288		2,364		Jamaica	985		1,027
Total segment capital expenditures (1)	Total segment capital expenditures (1)	8,407		13,635		Total segment capital expenditures (1)	4,348		2,494
Corporate	Corporate	256		149		Corporate	52		57
Total capital expenditures (1)	Total capital expenditures (1)	$	8,663	$	13,784	Total capital expenditures (1)	$	4,400	$	2,551

________

(1) Represents gross additions to property and equipment.

Note 16. Subsequent events

~~In preparing~~On April 29, 2022, our restricted cash balance related to our Property Loan of approximately $20.6 million was released into unrestricted cash as the ~~interim Condensed Consolidated Financial Statements, there were no subsequent events since September 30, 2021.~~Hyatt Ziva and Hyatt Zilara Cap Cana and Hilton Rose Hall Resort & Spa properties achieved the required debt service coverage ratio for 2 consecutive quarters.

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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 ~~March 4, 2021~~February 24, 2022 and 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, results of operations and prospects, which include 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 ~~have~~ experienced severely reduced occupancy levels at our resorts compared to historic ~~levels and 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, continuing resurgences of the virus and its variants, ~~including the Delta variant,~~ the government actions taken to contain the pandemic or mitigate its impact, ~~the speed,~~continuing effectiveness and ~~distribution~~uptake of ~~vaccine~~vaccines (including boosters) and treatment 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, ~~(including as a result of vaccine mandates),~~disruption in the supply chain for materials, and consumer discretionary spending, among others.~~Additional~~ The following factors, ~~that~~among others, could also cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking ~~statements include:~~statements:

•general economic uncertainty and the effect of general economic conditions, including inflation, 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”), Hilton Worldwide Holdings, Inc. (“Hilton”), and Wyndham Hotels & Resorts, Inc. (“Wyndham”);

•the volatility of currency exchange rates;

•uncertainty regarding the ongoing conflict between Russia and Ukraine and the related impacts on inflation, supply chains and macroeconomic conditions;

•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, labor or other resort costs;

Table of Con tents

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

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

•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, as well as ~~the~~changes in demand for our resorts resulting from government mandated safety protocols ~~and~~and/or 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;~~procedures;

•changes in personnel and availability of qualified personnel;

•~~environmental uncertainties~~extreme weather events, such as hurricanes and ~~risks related~~floods, which may increase in frequency and severity as a result of climate change, and other natural disasters;

•limited visibility with respect to ~~adverse weather conditions and natural disasters;~~future bookings;

•outbreak of widespread contagious 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 30, 2021,~~March 31, 2022, Playa owned and/or managed a total portfolio consisting of 22 resorts (8,366 rooms) located in Mexico, Jamaica, and the Dominican ~~Republic.~~ Republic:

•In Mexico, ~~Playa owns~~we own and ~~manages~~manage Hyatt Zilara Cancún, Hyatt Ziva Cancún, ~~Panama Jack Resorts~~Wyndham Alltra Cancún, ~~Panama Jack Resorts~~Wyndham Alltra Playa del Carmen, Hilton Playa del Carmen All-Inclusive Resort, Hyatt Ziva Puerto Vallarta, and Hyatt Ziva Los ~~Cabos.~~ Cabos;

•In Jamaica, ~~Playa owns~~we own and ~~manages~~manage 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.~~ Spa;

•In the Dominican Republic, ~~Playa owns~~we own and ~~manages~~manage 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 owns~~Cana; and

•We own two resorts in the Dominican Republic that are managed by a third-party and ~~manages~~manage five resorts on behalf of third-party owners. ~~Playa leverages years~~

Playa’s strategy is to leverage its globally recognized brand partnerships and proprietary in-house direct booking capabilities to capitalize on the growing popularity of the all-inclusive resort ~~operating expertise~~model and reach first-time all-inclusive consumers in a cost-effective manner. We believe that this strategy should position us to generate attractive returns for our shareholders, build lasting relationships with ~~globally recognized hospitality brands to provide a best-in-class experience and exceptional value to~~ our guests, ~~while building a direct relationship to improve customer acquisition cost~~ and ~~drive repeat business.~~enhance the lives of our associates and the communities in which we operate.

For the three months ended ~~September 30,~~March 31, 2022, we generated net income of $42.7 million, total revenue of $219.6 million, Net Package RevPAR of $280.78 and Adjusted EBITDA of $76.9 million. For the three months ended March 31, 2021, during which time ~~we had reduced occupancy as a result of~~our operations were severely impacted by the ~~continuing~~ effects of ~~the~~ COVID-19, ~~pandemic,~~ we generated a net loss of ~~$12.4~~$69.7 million, total revenue of ~~$151.3~~$77.7 million, Net Package RevPAR of ~~$184.19,~~$91.40 and Adjusted EBITDA of $31.8 million. For the three months ended September 30, 2020, when several of our resorts were closed due to the outbreak of the COVID-19 pandemic and those that reopened had severely reduced occupancy, we generated a net loss of $78.6 million, total revenue of $28.7 million, Net Package RevPAR of $30.71, and Adjusted EBITDA of ($~~26.1)~~2.5) 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 have adversely impacted global commercial activity, contributing to worldwide economic contraction and increased unemployment. We expect that the continuing fallout will create headwinds for global travel even after 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. We subsequently began reopening our resorts on July 1, 2020 and all of our resorts are open as of September 30, 2021.

2723

~~The suspension~~Table of operations at our resorts during part of 2020, and the reduced occupancy at our resorts since they have reopened, have adversely affected our liquidity. As of September 30, 2021, we had $231.5 million of available cash, excluding $24.6 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:

•~~raised $138.0 million, net of underwriting discounts, of additional capital in January 2021 through an underwritten public equity offering at $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 Dreams Puerto Aventuras in February 2021 for a total cash consideration of $34.5 million; and~~

•~~sold the Capri Resort in June 2021 for a total cash consideration of $55.2 million.~~

Following the gradual loosening of government travel restrictions, the increased availability and adoption of vaccines, and increases in available flights to the locations of our resorts, our occupancy and operating results have improved during the first nine months of 2021, although they still remain well below pre-pandemic levels. However, with the trends reflected in our third quarter results, our reservations for future periods and expected increases in flight capacity into our destinations, we are hopeful that our business will continue to recover.

However, we cannot predict when the pandemic and its economic effects will subside, and thus we cannot predict 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 current pandemic subsides that there will not be 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.

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Our Portfolio of Resorts

As of ~~September 30, 2021,~~March 31, 2022, the following table presents an overview of our resorts 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

Wyndham Alltra Cancún

Cancún, Mexico

Wyndham (all ages)

Playa

1985; 2009; 2017

458

Hilton Playa del Carmen All-Inclusive Resort

Playa del Carmen, Mexico

Hilton (adults-only)

Playa

2002; 2009; 2019

524

Hilton Playa del Carmen All-Inclusive Resort

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

Wyndham Alltra Playa del Carmen

Playa del Carmen, Mexico

Wyndham (adults-only)

Playa

1996; 2006; 2012; 2017

287

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

La Romana, Dominican Republic

Hilton (adults-only)

Playa

1997; 2008; 2019

356

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

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 (1)

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

7,124

Total Rooms Owned

7,124

Managed Resorts (2)

Sanctuary Cap Cana

Punta Cana, Dominican Republic

Sanctuary (adults-only)

Playa

2008; 2015; 2018

324

Sanctuary Cap Cana

Punta Cana, Dominican Republic

Sanctuary (adults-only)

Playa

2008; 2015; 2018

324

Jewel Grande Montego Bay Resort & Spa

Montego Bay, Jamaica

Jewel (condo-hotel)

Playa

2016; 2017

129

Jewel Grande Montego Bay Resort & Spa

Montego Bay, Jamaica

Jewel (condo-hotel)

Playa

2016; 2017

129

The Yucatán Playa Del Carmen All-Inclusive Resort

Playa del Carmen, Mexico

Tapestry Collection by Hilton (adults-only)

Playa

2012

The Yucatán 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 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

Hyatt Zilara Riviera Maya (4)

Riviera Maya, Mexico

Hyatt Zilara (adults-only)

Playa

2003

291

Total Rooms Operated

1,242

Total Rooms Operated

1,242

Total Rooms Owned and Operated

8,366

Total Rooms Owned and Operated

8,366

________

(1) Represents an 88-unit tower and spa owned by us. We manage the majority of the units within the remaining two condo-hotel towers owned by Sagicor ~~Financial Corporation Limited and its affiliated entities (collectively “Sagicor”)~~ that comprise the Jewel Grande Montego Bay Resort & Spa.

(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 opened in the third quarter of 2021.

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

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Results of Operations

Three Months Ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~

The following table summarizes our results of operations on a consolidated basis for the three months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ ($ in thousands):


		Three Months Ended September 30,				Increase / Decrease					Three Months Ended March 31,				Increase / Decrease
		2021		2020		Change		% Change			2022		2021		Change		% Change
Revenue	Revenue									Revenue
Package	Package	$	124,331	$	22,705	$	101,626	447.6	%	Package	$	184,109	$	63,894	$	120,215	188.1	%
Non-package	Non-package	25,211		5,518		19,693		356.9	%	Non-package	32,456		12,995		19,461		149.8	%
Management fees	Management fees	673		8		665		8,312.5	%	Management fees	1,057		344		713		207.3	%
Cost reimbursements	Cost reimbursements	1,072		505		567		112.3	%	Cost reimbursements	1,952		513		1,439		280.5	%
Total revenue	Total revenue	151,287		28,736		122,551		426.5	%	Total revenue	219,574		77,746		141,828		182.4	%
Direct and selling, general and administrative expenses	Direct and selling, general and administrative expenses									Direct and selling, general and administrative expenses
Direct	Direct	90,788		35,679		55,109		154.5	%	Direct	106,840		60,221		46,619		77.4	%
Selling, general and administrative	Selling, general and administrative	32,055		22,943		9,112		39.7	%	Selling, general and administrative	37,239		24,668		12,571		51.0	%
Depreciation and amortization	Depreciation and amortization	19,927		22,518		(2,591)		(11.5)	%	Depreciation and amortization	19,500		20,883		(1,383)		(6.6)	%
Reimbursed costs	Reimbursed costs	1,072		505		567		112.3	%	Reimbursed costs	1,952		513		1,439		280.5	%
Impairment loss	Impairment loss	—		867		(867)		(100.0)	%	Impairment loss	—		24,011		(24,011)		(100.0)	%
Gain on sale of assets		(4)		—		(4)		(100.0)	%
Gain on insurance proceeds		—		(220)		220		100.0	%
Loss on sale of assets										Loss on sale of assets	—		273		(273)		(100.0)	%
Direct and selling, general and administrative expenses	Direct and selling, general and administrative expenses	143,838		82,292		61,546		74.8	%	Direct and selling, general and administrative expenses	165,531		130,569		34,962		26.8	%
Operating income (loss)	Operating income (loss)	7,449		(53,556)		61,005		113.9	%	Operating income (loss)	54,043		(52,823)		106,866		202.3	%
Interest expense	Interest expense	(19,047)		(19,973)		926		4.6	%	Interest expense	(9,168)		(18,167)		8,999		49.5	%
Other income		587		224		363		162.1	%
Net loss before tax		(11,011)		(73,305)		62,294		85.0	%
Income tax provision		(1,360)		(5,299)		3,939		74.3	%
Net loss		$	(12,371)	$	(78,604)	$	66,233	84.3	%
Other expense										Other expense	(514)		(706)		192		27.2	%
Net income (loss) before tax										Net income (loss) before tax	44,361		(71,696)		116,057		161.9	%
Income tax (provision) benefit										Income tax (provision) benefit	(1,614)		1,951		(3,565)		(182.7)	%
Net income (loss)										Net income (loss)	$	42,747	$	(69,745)	$	112,492	161.3	%

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 30, 2021~~March 31, 2022 excludes the ~~following resorts: Capri Resort, which was sold in June 2021, and~~ Dreams Puerto Aventuras, which was sold in February 2021 and Capri Resort, which was sold in June 2021.

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Total Portfolio


		Three Months Ended September 30,						Increase / Decrease						Three Months Ended March 31,						Increase / Decrease
		2021			2020			Change			% Change			2022			2021			Change			% Change
Occupancy	Occupancy	59.3		%	11.1		%	48.2		pts	434.2	%	Occupancy	72.4		%	31.6		%	40.8		pts	129.1	%
Net Package ADR	Net Package ADR	$	310.65		$	275.71		$	34.94		12.7	%	Net Package ADR	$	388.07		$	288.88		$	99.19		34.3	%
Net Package RevPAR	Net Package RevPAR	$	184.19		$	30.71		$	153.48		499.8	%	Net Package RevPAR	$	280.78		$	91.40		$	189.38		207.2	%
		($ in thousands)												($ in thousands)
Net Package Revenue	Net Package Revenue	$	120,717		$	21,813		$	98,904		453.4	%	Net Package Revenue	$	180,026		$	62,083		$	117,943		190.0	%
Net Non-package Revenue	Net Non-package Revenue	25,002			5,480			19,522			356.2	%	Net Non-package Revenue	32,142			12,869			19,273			149.8	%
Management Fee Revenue	Management Fee Revenue	673			8			665			8,312.5	%	Management Fee Revenue	1,057			344			713			207.3	%
Total Net Revenue	Total Net Revenue	146,392			27,301			119,091			436.2	%	Total Net Revenue	213,225			75,296			137,929			183.2	%
Adjusted EBITDA	Adjusted EBITDA	$	31,770		$	(26,116)		$	57,886		221.6	%	Adjusted EBITDA	$	76,943		$	(2,505)		$	79,448		3,171.6	%
Adjusted EBITDA Margin	Adjusted EBITDA Margin	21.7		%	(95.7)		%	117.4		pts	122.7	%	Adjusted EBITDA Margin	36.1		%	(3.3)		%	39.4		pts	1,193.9	%

Comparable Portfolio


		Three Months Ended September 30,						Increase / Decrease						Three Months Ended March 31,						Increase / Decrease
		2021			2020			Change			% Change			2022			2021			Change			% Change
Occupancy	Occupancy	59.3		%	11.3		%	48.0		pts	424.8	%	Occupancy	72.4		%	32.9		%	39.5		pts	120.1	%
Net Package ADR	Net Package ADR	$	310.65		$	285.57		$	25.08		8.8	%	Net Package ADR	$	388.07		$	291.50		$	96.57		33.1	%
Net Package RevPAR	Net Package RevPAR	$	184.19		$	32.19		$	152.00		472.2	%	Net Package RevPAR	$	280.78		$	95.82		$	184.96		193.0	%
		($ in thousands)												($ in thousands)
Net Package Revenue	Net Package Revenue	$	120,717		$	21,094		$	99,623		472.3	%	Net Package Revenue	$	180,026		$	61,438		$	118,588		193.0	%
Net Non-package Revenue	Net Non-package Revenue	24,966			5,043			19,923			395.1	%	Net Non-package Revenue	32,143			12,405			19,738			159.1	%
Management Fee Revenue	Management Fee Revenue	673			8			665			8,312.5	%	Management Fee Revenue	1,057			344			713			207.3	%
Total Net Revenue	Total Net Revenue	146,356			26,145			120,211			459.8	%	Total Net Revenue	213,226			74,187			139,039			187.4	%
Adjusted EBITDA	Adjusted EBITDA	$	31,713		$	(24,090)		$	55,803		231.6	%	Adjusted EBITDA	$	76,917		$	(1,996)		$	78,913		3,953.6	%
Adjusted EBITDA Margin	Adjusted EBITDA Margin	21.7		%	(92.1)		%	113.8		pts	123.6	%	Adjusted EBITDA Margin	36.1		%	(2.7)		%	38.8		pts	1,437.0	%

Total Revenue and Total Net Revenue

Our ~~total revenue~~Total Revenue for the three months ended ~~September 30, 2021~~March 31, 2022 increased ~~$122.6~~$141.8 million, or ~~426.5%~~182.4%, compared to the three months ended ~~September 30, 2020.~~ March 31, 2021.

Our Total Net Revenue for the three months ended ~~September 30, 2021~~March 31, 2022 increased ~~$119.1~~$137.9 million, or ~~436.2%~~183.2%, compared to the three months ended ~~September 30, 2020. These increases are~~March 31, 2021. The increase was due to the ~~resumption~~following:

•an increase in demand as a result of ~~resort operations this year as~~increased vaccination levels, easing of government travel restrictions, and pent-up demand for leisure travel compared to the ~~third quarter of 2020,~~three months ended March 31, 2021, when we ~~began reopening our resorts, in phases, that had been closed~~experienced severely reduced occupancy as a result of the COVID-19 ~~pandemic. See “Impact~~pandemic;

•an increase in Net Package ADR as a result of ~~COVID-19 Pandemic” above for more information regarding~~pent-up demand and pricing discipline to coincide with investments in guest satisfaction at our resorts;

•continued sequential improvement in Net Non-package Revenue with our highest spend per guest on record in the ~~effects~~first quarter of 2022; and

•a $7.14 favorable Net Package ADR impact due to the ~~COVID-19 pandemic on our results~~change in billing methodology of ~~operations.~~an online travel agency (“OTA”), which requires Playa to present this revenue gross of commissions under U.S. GAAP. Excluding this adjustment, Net Package ADR would have been $380.93.

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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 30,~~March 31, 2022 and 2021 ~~and 2020~~ ($ in thousands):

Three Months Ended September 30, Increase/Decrease
2021 2020 Change % Change
Net Package Revenue
Comparable Net Package Revenue $ 120,717 $ 21,094 $ 99,623 472.3 %
Non-comparable Net Package Revenue — 719 (719) (100.0) %
Net Package Revenue 120,717 21,813 98,904 453.4 %
Net Non-package Revenue
Comparable Net Non-package Revenue 24,966 5,043 19,923 395.1 %
Non-comparable Net Non-package Revenue 36 437 (401) (91.8) %
Net Non-package Revenue 25,002 5,480 19,522 356.2 %
Management Fee Revenue
Comparable Management Fee Revenue 673 8 665 8,312.5 %
Non-comparable Management Fee Revenue — — — — %
Management Fee Revenue 673 8 665 8,312.5 %
Total Net Revenue
Comparable Total Net Revenue 146,356 26,145 120,211 459.8 %
Non-comparable Total Net Revenue 36 1,156 (1,120) (96.9) %
Total Net Revenue 146,392 27,301 119,091 436.2 %
Compulsory tips 3,823 930 2,893 311.1 %
Cost Reimbursements 1,072 505 567 112.3 %
Total revenue $ 151,287 $ 28,736 $ 122,551 426.5 %

~~Comparable Total Net Revenue~~

Our Comparable Total Net Revenue for the three months ended September 30, 2021 increased $120.2 million, or 459.8%, compared to the three months ended September 30, 2020. These increases are due to the resumption of resort operations this year as compared to the third quarter of 2020, when we began reopening our resorts, in phases, that had been closed as 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.


	Three Months Ended March 31,				Increase/Decrease
	2022		2021		Change		% Change
Net Package Revenue
Comparable Net Package Revenue	$	180,026	$	61,438	$	118,588	193.0	%
Non-comparable Net Package Revenue	—		645		(645)		(100.0)	%
Net Package Revenue	180,026		62,083		117,943		190.0	%

Net Non-package Revenue
Comparable Net Non-package Revenue	32,143		12,405		19,738		159.1	%
Non-comparable Net Non-package Revenue	(1)		464		(465)		(100.2)	%
Net Non-package Revenue	32,142		12,869		19,273		149.8	%

Management Fee Revenue
Comparable Management Fee Revenue	1,057		344		713		207.3	%
Non-comparable Management Fee Revenue	—		—		—		—	%
Management Fee Revenue	1,057		344		713		207.3	%

Total Net Revenue
Comparable Total Net Revenue	213,226		74,187		139,039		187.4	%
Non-comparable Total Net Revenue	(1)		1,109		(1,110)		(100.1)	%
Total Net Revenue	213,225		75,296		137,929		183.2	%
Compulsory tips	4,397		1,937		2,460		127.0	%
Cost Reimbursements	1,952		513		1,439		280.5	%
Total revenue	$	219,574	$	77,746	$	141,828	182.4	%

Direct Expenses

The following table shows a reconciliation of our direct expenses to Net Direct Expenses for the three months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ ($ in thousands):


		Three Months Ended September 30,				Increase/Decrease					Three Months Ended March 31,				Increase/Decrease
		2021		2020		Change		% Change			2022		2021		Change		% Change
Direct expenses	Direct expenses	$	90,788	$	35,679	$	55,109	154.5	%	Direct expenses	$	106,840	$	60,221	$	46,619	77.4	%
Less: compulsory tips	Less: compulsory tips	3,823		930		2,893		311.1	%	Less: compulsory tips	4,397		1,937		2,460		127.0	%
Net Direct Expenses	Net Direct Expenses	$	86,965	$	34,749	$	52,216	150.3	%	Net Direct Expenses	$	102,443	$	58,284	$	44,159	75.8	%

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 ~~$87.0~~$102.4 million, or ~~59.4%~~48.0% of Total Net Revenue, for the three months ended ~~September 30, 2021~~March 31, 2022 and ~~$34.7~~$58.3 million, or ~~127.3%~~77.4% of Total Net Revenue, for the three months ended ~~September 30, 2020.~~

Net Direct Expenses for the three months ended September 30, 2021 increased $52.2 million, or 150.3%, compared to the three months ended September 30, 2020. Net Direct Expenses at our comparable properties increased $54.7 million, or 169.4%, compared

to the three months ended September 30, 2020. Net Direct Expenses increases were due to the resumption of resort operations this year as compared to the third quarter of 2020, during which period we began reopening our resorts, in phases, and experienced severely reduced occupancy as a result of the COVID-19 pandemic. The increase was also a result of a higher rate of inflation as compared to the same period in 2020. See “Inflation” below.March 31, 2021. 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 or decrease as a result of changes in revenues.

Net Direct Expenses for the three months ended March 31, 2022 increased $44.2 million, or 75.8%, compared to the three months ended March 31, 2021. As a percentage of Owned Net Revenue, Net Direct Expenses decreased to 48.4%, compared to 77.9% for the three months ended March 31, 2021. Net Direct Expenses at our comparable properties increased $46.7 million, or 83.6%, compared to the three months ended March 31, 2021. Net Direct Expenses increased due to the corresponding recovery in our operations, compared to the three months ended March 31, 2021 when we experienced severely reduced occupancy as a result of the COVID-19 pandemic, and also due to a higher rate of inflation in the first quarter of 2022 as compared to 2021. See the “Inflation” section for

Table of Con tents

additional discussion. Our food and beverage expenses increased during the first quarter of 2022 on a per guest basis as part of our initiative to deliver an exceptional customer experience across our portfolio.

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

Total Portfolio


		Three Months Ended September 30,				Increase/Decrease					Three Months Ended March 31,				Increase/Decrease
		2021		2020		Change		% Change			2022		2021		Change		% Change

Food and beverages	Food and beverages	$	19,782	$	4,876	$	14,906	305.7	%	Food and beverages	$	24,240	$	10,295	$	13,945	135.5	%
Guest costs										Guest costs	7,601		3,807		3,794		99.7	%
Salaries and wages	Salaries and wages	31,053		16,610		14,443		87.0	%	Salaries and wages	35,878		25,037		10,841		43.3	%
Repairs and maintenance	Repairs and maintenance	4,545		2,426		2,119		87.3	%	Repairs and maintenance	4,588		2,940		1,648		56.1	%
Utilities and sewerage	Utilities and sewerage	9,727		5,242		4,485		85.6	%	Utilities and sewerage	10,317		7,364		2,953		40.1	%
Licenses and property taxes	Licenses and property taxes	663		477		186		39.0	%	Licenses and property taxes	795		805		(10)		(1.2)	%
Incentive and management fees	Incentive and management fees	373		(437)		810		185.4	%	Incentive and management fees	1,112		146		966		661.6	%
Franchise / license fees	Franchise / license fees	7,527		1,151		6,376		554.0	%	Franchise / license fees	10,139		4,249		5,890		138.6	%
Transportation and travel expenses	Transportation and travel expenses	1,132		592		540		91.2	%	Transportation and travel expenses	1,302		923		379		41.1	%
Laundry and cleaning expenses	Laundry and cleaning expenses	1,360		665		695		104.5	%	Laundry and cleaning expenses	1,406		879		527		60.0	%
Property and equipment rental expense	Property and equipment rental expense	699		34		665		1,955.9	%	Property and equipment rental expense	1,306		175		1,131		646.3	%
Entertainment expenses and decoration	Entertainment expenses and decoration	1,838		586		1,252		213.7	%	Entertainment expenses and decoration	2,376		903		1,473		163.1	%
Office supplies	Office supplies	296		122		174		142.6	%	Office supplies	299		168		131		78.0	%
Other operational expenses	Other operational expenses	7,970		2,405		5,565		231.4	%	Other operational expenses	1,084		593		491		82.8	%
Total Net Direct Expenses	Total Net Direct Expenses	$	86,965	$	34,749	$	52,216	150.3	%	Total Net Direct Expenses	$	102,443	$	58,284	$	44,159	75.8	%

Comparable Portfolio


		Three Months Ended September 30,				Increase/Decrease					Three Months Ended March 31,				Increase/Decrease
		2021		2020		Change		% Change			2022		2021		Change		% Change

Food and beverages	Food and beverages	$	19,772	$	4,623	$	15,149	327.7	%	Food and beverages	$	24,236	$	10,161	$	14,075	138.5	%
Guest costs										Guest costs	7,601		3,507		4,094		116.7	%
Salaries and wages	Salaries and wages	31,081		15,348		15,733		102.5	%	Salaries and wages	35,912		23,389		12,523		53.5	%
Repairs and maintenance	Repairs and maintenance	4,545		2,120		2,425		114.4	%	Repairs and maintenance	4,588		2,863		1,725		60.3	%
Utilities and sewerage	Utilities and sewerage	9,727		4,996		4,731		94.7	%	Utilities and sewerage	10,317		7,241		3,076		42.5	%
Licenses and property taxes	Licenses and property taxes	651		429		222		51.7	%	Licenses and property taxes	795		745		50		6.7	%
Incentive and management fees	Incentive and management fees	373		(371)		744		200.5	%	Incentive and management fees	1,112		104		1,008		969.2	%
Franchise / license fees	Franchise / license fees	7,528		1,151		6,377		554.0	%	Franchise / license fees	10,139		4,249		5,890		138.6	%
Transportation and travel expenses	Transportation and travel expenses	1,131		519		612		117.9	%	Transportation and travel expenses	1,302		897		405		45.2	%
Laundry and cleaning expenses	Laundry and cleaning expenses	1,360		635		725		114.2	%	Laundry and cleaning expenses	1,406		871		535		61.4	%
Property and equipment rental expense	Property and equipment rental expense	699		30		669		2,230.0	%	Property and equipment rental expense	1,306		165		1,141		691.5	%
Entertainment expenses and decoration	Entertainment expenses and decoration	1,838		550		1,288		234.2	%	Entertainment expenses and decoration	2,376		884		1,492		168.8	%
Office supplies	Office supplies	297		122		175		143.4	%	Office supplies	299		166		133		80.1	%
Other operational expenses	Other operational expenses	7,985		2,142		5,843		272.8	%	Other operational expenses	1,083		558		525		94.1	%
Total Net Direct Expenses	Total Net Direct Expenses	$	86,987	$	32,294	$	54,693	169.4	%	Total Net Direct Expenses	$	102,472	$	55,800	$	46,672	83.6	%

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Selling, General and Administrative Expenses

Our selling, general and administrative expenses for the three months ended ~~September 30, 2021~~March 31, 2022 increased ~~$9.1~~$12.6 million, or ~~39.7%~~51.0%, compared to the three months ended ~~September 30, 2020.~~March 31, 2021. The higher levels of occupancy ~~levels~~from the ongoing recovery at our resorts ~~this quarter~~during the three months ended March 31, 2022 as compared to the ~~third quarter of 2020~~three months ended March 31, 2021 resulted in a ~~$7.1~~$5.8 million increase in commissions expenses, a $2.4 million increase in corporate personnel costs, a $2.2 million increase in advertising ~~marketing and commissions~~ expenses, a ~~$2.1~~$2.0 million increase in credit card commissions, and a $0.5 million increase in ~~corporate personnel costs. Additionally, our January 2021 grants of restricted and performance share awards (see Note 9 to the Condensed Consolidated Financial Statements) drove a $1.3 million~~professional fees. The increase in ~~share-based compensation expense over~~commissions expenses includes an additional $3.3 million that was a result of a change in billing methodology of an OTA, which requires Playa to present the ~~prior quarter. These~~commissions on a gross basis under U.S. GAAP. The increases in selling, general and administrative expenses were partially offset by a ~~$2.3~~$0.5 million decrease in our provision for doubtful accounts due to the ~~ongoing~~economic recovery from the COVID-19 ~~pandemic.~~pandemic and its effect on tour operators and travel agencies.

Depreciation and Amortization Expense

Our depreciation and amortization expense for the three months ended ~~September 30, 2021~~March 31, 2022 decreased ~~$2.6~~$1.4 million, or ~~11.5%~~6.6%, compared to the three months ended ~~September 30, 2020. This~~March 31, 2021, which was ~~mainly~~primarily due to a ~~result of a $0.6~~$0.9 million decrease ~~due to the sale of the Dreams Puerto Aventuras in February 2021 and a $1.0 million decrease due to~~from the sale of the Capri Resort in June 2021.

Impairment Loss

Our impairment loss for the three months ended ~~September 30, 2021 decreased $0.9~~March 31, 2022 was $0 million, a decrease of $24.0 million, or 100.0%, compared to the three months ended September 30, 2020. The decrease resulted from the correction of an immaterial error for acquired property and equipment from the business combination with Sagicor in 2018 recognized during the three months ended September 30, 2020.

~~Interest Expense~~

Our interest expense for the three months ended September 30, 2021 decreased $0.9 million, or 4.6%, compared to the three months ended September 30, 2020. The decrease in interest expense was primarily driven by a $0.7 million reduction from the repayment of our outstanding Revolving Credit Facility balance in FebruaryMarch 31, 2021.

Cash interest paid was $19.8 million for the three months ended September 30, 2021, representing a $0.1 million decrease as compared to the three months ended September 30, 2020. Cash interest paid on our Revolving Credit Facility decreased $0.7 million from the repayment of our outstanding balance in February 2021. These decreases were partially offset by a $0.7 million increase for interest on the Property Loan, which was executed on June 12, 2020 and incurred only a partial month of interest for its July 2020 interest payment.

~~Income Tax Provision~~

Our income tax provision for the three months ended September 30, 2021 decreased $3.9 million, or 74.3%, compared to the three months ended September 30, 2020. The decrease in our income tax provision of $3.9 million was driven primarily by:

•~~$20.9 million decreased tax expense related to valuation allowances recognized for our Jamaica and Mexico entities;~~

•~~$0.9 million decreased tax expense related to prior year adjustments;~~

•~~$0.3 million decreased discrete tax expense due to deferred tax liabilities on fixed assets of certain Dominican Republic entities; and~~

•~~$0.5 million decreased tax expense related to other miscellaneous items.~~

~~These decreases were partially offset by:~~

•~~$15.5 million increased tax expense due to lower pre-tax book losses from our taxpaying entities;~~

•~~$1.7 million decreased tax benefit related to the 2020 sales of the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark; and~~

•~~$1.5 million increased tax expense associated with foreign exchange rate fluctuations, primarily for our Mexican entities.~~

~~Results of Operations~~

~~Nine Months Ended September 30, 2021 and 2020~~

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

Nine Months Ended September 30, Increase / Decrease
2021 2020 Change % Change
Revenue
Package $ 293,005 $ 176,062 $ 116,943 66.4 %
Non-package 60,808 28,336 32,472 114.6 %
Management fees 1,469 635 834 131.3 %
Cost reimbursements 2,554 1,913 641 33.5 %
Total revenue 357,836 206,946 150,890 72.9 %
Direct and selling, general and administrative expenses
Direct 230,543 153,957 76,586 49.7 %
Selling, general and administrative 85,273 76,514 8,759 11.4 %
Depreciation and amortization 60,827 69,877 (9,050) (13.0) %
Reimbursed costs 2,554 1,913 641 33.5 %
Impairment loss 24,011 42,308 (18,297) (43.2) %
Loss on sale of assets 644 1,729 (1,085) (62.8) %
Gain on insurance proceeds — (3,170) 3,170 100.0 %
Direct and selling, general and administrative expenses 403,852 343,128 60,724 17.7 %
Operating loss (46,016) (136,182) 90,166 66.2 %
Interest expense (56,164) (61,844) 5,680 9.2 %
Other (expense) income (747) 1,171 (1,918) (163.8) %
Net loss before tax (102,927) (196,855) 93,928 47.7 %
Income tax benefit 13,043 8,237 4,806 58.3 %
Net loss $ (89,884) $ (188,618) $ 98,734 52.3 %

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 months ended September 30, 2021 excludes the following resorts: Capri Resort, which was sold in 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.

~~Total Portfolio~~

Nine Months Ended September 30, Increase / Decrease
2021 2020 Change % Change
Occupancy 46.8 % 26.4 % 20.4 pts 77.3 %
Net Package ADR $ 302.83 $ 294.33 $ 8.50 2.9 %
Net Package RevPAR $ 141.66 $ 77.58 $ 64.08 82.6 %
($ in thousands)
Net Package Revenue $ 284,414 $ 170,211 $ 114,203 67.1 %
Net Non-package Revenue 60,229 28,143 32,086 114.0 %
Management Fee Revenue 1,469 635 834 131.3 %
Total Net Revenue 346,112 198,989 147,123 73.9 %
Adjusted EBITDA $ 52,180 $ (7,195) $ 59,375 825.2 %
Adjusted EBITDA Margin 15.1 % (3.6) % 18.7 pts 519.4 %

~~Comparable Portfolio~~

Nine Months Ended September 30, Increase / Decrease
2021 2020 Change % Change
Occupancy 48.1 % 25.5 % 22.6 pts 88.6 %
Net Package ADR $ 303.58 $ 302.57 $ 1.01 0.3 %
Net Package RevPAR $ 145.95 $ 77.01 $ 68.94 89.5 %
($ in thousands)
Net Package Revenue $ 283,854 $ 150,331 $ 133,523 88.8 %
Net Non-package Revenue 59,603 24,652 34,951 141.8 %
Management Fee Revenue 1,469 635 834 131.3 %
Total Net Revenue 344,926 175,618 169,308 96.4 %
Adjusted EBITDA $ 53,004 $ (9,117) $ 62,121 681.4 %
Adjusted EBITDA Margin 15.4 % (5.2) % 20.6 pts 396.2 %

~~Total Revenue and Total Net Revenue~~

Our total revenue for the nine months ended September 30, 2021 increased $150.9 million, or 72.9%, compared to the nine months ended September 30, 2020. Our Total Net Revenue for the nine months ended September 30, 2021 increased $147.1 million, or 73.9%, compared to the nine months ended September 30, 2020. These increases were a result of the resumption of operations during the entire year in 2021 as compared to the nine months ended September 30, 2020, when we closed our resorts for the second quarter and experienced severely reduced occupancy during the third quarter as a result of the COVID-19 pandemic.

~~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 months ended September 30, 2021 and 2020~~ ~~($ in thousands)~~:

Nine Months Ended September 30, Increase/Decrease
2021 2020 Change % Change
Net Package Revenue
Comparable Net Package Revenue $ 283,854 $ 150,331 $ 133,523 88.8 %
Non-comparable Net Package Revenue 560 19,880 (19,320) (97.2) %
Net Package Revenue 284,414 170,211 114,203 67.1 %
Net Non-package Revenue
Comparable Net Non-package Revenue 59,603 24,652 34,951 141.8 %
Non-comparable Net Non-package Revenue 626 3,491 (2,865) (82.1) %
Net Non-package Revenue 60,229 28,143 32,086 114.0 %
Management Fee Revenue
Comparable Management Fee Revenue 1,469 635 834 131.3 %
Non-comparable Management Fee Revenue — — — — %
Management Fee Revenue 1,469 635 834 131.3 %
Total Net Revenue
Comparable Total Net Revenue 344,926 175,618 169,308 96.4 %
Non-comparable Total Net Revenue 1,186 23,371 (22,185) (94.9) %
Total Net Revenue 346,112 198,989 147,123 73.9 %
Compulsory tips 9,170 6,044 3,126 51.7 %
Cost Reimbursements 2,554 1,913 641 33.5 %
Total revenue $ 357,836 $ 206,946 $ 150,890 72.9 %

~~Comparable Total Net Revenue~~

Our Comparable Total Net Revenue for the nine months ended September 30, 2021 increased $169.3 million, or 96.4%, compared to the nine months ended September 30, 2020. These increases were a result of the resumption of operations during the entire year as compared to the nine months ended September 30, 2020 when we had closures and reduced occupancy at all of our resorts during the second and third quarter as a result of the COVID-19 pandemic.

~~Direct Expenses~~

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

Nine Months Ended September 30, Increase/Decrease
2021 2020 Change % Change
Direct expenses $ 230,543 $ 153,957 $ 76,586 49.7 %
Less: compulsory tips 9,170 6,044 3,126 51.7 %
Net Direct Expenses $ 221,373 $ 147,913 $ 73,460 49.7 %

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 $221.4 million, or 64.0%, of Total Net Revenue for the nine months ended September 30, 2021 and $147.9 million, or 74.3%, of Total Net Revenue for the nine months ended September 30, 2020.

Net Direct Expenses for the nine months ended September 30, 2021 increased $73.5 million, or 49.7%, compared to the nine months ended September 30, 2020. Net Direct Expenses at our comparable properties increased $86.7 million, or 65.9%, compared to the nine months ended September 30, 2020 due to the resumption of operations during the entire year as compared to the nine months

ended September 30, 2020 when we had closures and reduced occupancy at all of our resorts during the second and third quarter as a result of the COVID-19 pandemic. The increase was also a result of a higher rate of inflation as compared to the same period in 2020. See “Inflation” below. 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 generally computed as a percentage of revenue, 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
2021 2020 Change % Change
Food and beverages $ 46,594 $ 26,468 $ 20,126 76.0 %
Salaries and wages 84,477 65,618 18,859 28.7 %
Repairs and maintenance 11,468 8,087 3,381 41.8 %
Utilities and sewerage 25,723 18,217 7,506 41.2 %
Licenses and property taxes 2,218 2,174 44 2.0 %
Incentive and management fees 806 987 (181) (18.3) %
Franchise / license fees 17,513 9,386 8,127 86.6 %
Transportation and travel expenses 3,052 2,041 1,011 49.5 %
Laundry and cleaning expenses 3,313 2,140 1,173 54.8 %
Property and equipment rental expense 1,328 836 492 58.9 %
Entertainment expenses and decoration 4,447 2,622 1,825 69.6 %
Office supplies 703 431 272 63.1 %
Other operational expenses 19,731 8,906 10,825 121.5 %
Total Net Direct Expenses $ 221,373 $ 147,913 $ 73,460 49.7 %

~~Comparable Portfolio~~

Nine Months Ended September 30, Increase/Decrease
2021 2020 Change % Change
Food and beverages $ 46,450 $ 23,182 $ 23,268 100.4 %
Salaries and wages 82,459 58,876 23,583 40.1 %
Repairs and maintenance 11,347 6,446 4,901 76.0 %
Utilities and sewerage 25,537 16,311 9,226 56.6 %
Licenses and property taxes 2,080 1,943 137 7.1 %
Incentive and management fees 764 488 276 56.6 %
Franchise / license fees 17,513 9,394 8,119 86.4 %
Transportation and travel expenses 3,020 1,793 1,227 68.4 %
Laundry and cleaning expenses 3,305 1,880 1,425 75.8 %
Property and equipment rental expense 1,317 758 559 73.7 %
Entertainment expenses and decoration 4,430 2,254 2,176 96.5 %
Office supplies 700 401 299 74.6 %
Other operational expenses 19,187 7,705 11,482 149.0 %
Total Net Direct Expenses $ 218,109 $ 131,431 $ 86,678 65.9 %

~~Selling, General and Administrative Expenses~~

Our selling, general and administrative expenses for the nine months ended September 30, 2021 increased $8.8 million, or 11.4%, compared to the nine months ended September 30, 2020. The increase was primarily driven by an $8.4 million increase in advertising, marketing and commissions expenses, a $3.7 million increase in credit card commissions, and a $0.7 million increase in corporate personnel costs. These increases were partially offset by a $1.7 million decrease in insurance expenses, which primarily resulted from

the sales of the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark in May 2020, and a $2.3 million decrease in our provision for doubtful accounts due to the ongoing recovery from the COVID-19 pandemic.

~~Depreciation and Amortization Expense~~

Our depreciation and amortization expense for the nine months ended September 30, 2021 decreased $9.1 million, or 13.0%, compared to the nine months ended September 30, 2020. The decrease was largely due to a $5.9 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 $1.8 million decrease due to accelerated depreciation incurred in 2020 related to the completion of renovation projects at the Hilton Playa del Carmen All-Inclusive Resort.

~~Impairment Loss~~

~~Our impairment loss for the nine months ended September 30, 2021 decreased $18.3 million, or 43.2%, compared to the nine months ended September 30, 2020.~~ The decrease was driven by ~~$25.3 million of property and equipment impairment recognized during~~ the nine months ended September 30, 2020 upon classification of the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark as held for sale. In addition, we recognized an aggregate $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 the decrease in forecasted future cash flows from the temporary suspension of operations from COVID-19. These decreases were partially offset by $24.0 million of property and equipment impairment ~~for the nine months ended September 30, 2021~~ recognized upon classification of the Capri Resort as held for sale in March ~~2021.~~2021, as the carrying value exceeded the sale price of the assets under the sales agreement.

Interest Expense

Our interest expense for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 decreased ~~$5.7~~$9.0 million, or ~~9.2%~~49.5%, compared to the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021. The decrease in interest expense was driven primarily by ~~a $16.1~~an $8.5 million ~~decrease due~~benefit over the period related to the change in fair value of our interest rate swaps. InDuring the three months ended March ~~2019,~~31, 2022, we ~~elected to adopt hedge accounting and designate our interest rate swaps as cash flow hedges. After the adoption~~recognized a benefit of ~~hedge accounting, we recorded the change in fair value of our interest rate swaps through other comprehensive income (loss). Due~~$5.7 million due to the ~~significant drop~~increase in interest rates closer to our fixed rate of 2.85%, compared to a loss of $2.8 million during ~~2020 resulting from~~ the ~~COVID-19 pandemic, our cash flow hedge~~three months ended March 31, 2021.

Cash interest paid was ~~deemed ineffective in~~$18.2 million for the three months ended March ~~2020, resulting in us recognizing losses on~~31, 2022, representing a $0.6 million, or 3.1% decrease as compared to the ~~change in fair value of our~~three months ended March 31, 2021. Cash interest ~~rate swaps through interest expense. In addition, interest~~paid on our Revolving Credit Facility ~~for the nine months ended September 30, 2021~~ decreased ~~by $1.9~~$0.4 million ~~compared to the same period last year, driven by~~from the repayment of ~~the~~our entire outstanding balance in February 2021. These decreases were partially offset by additional interest expense from the Additional Senior Secured Credit Facility and Property Loan executed on June 12, 2020 of $4.0 million and $4.9 million, respectively, additional interest expense on our Term Loan of $1.7 million, as well as additional discount accretion and financing costs of $1.4 million.

Cash interest paid was $58.5 million for the nine months ended September 30, 2021, representing a $9.7 million increase as compared to the nine months ended September 30, 2020. Cash interest paid increased due to the Additional Senior Secured Credit Facility and Property Loan executed on June 12, 2020 by $4.3 million and $4.9 million, respectively.

Income Tax ~~Benefit~~Provision

~~Our~~For the three months ended March 31, 2022, our income tax provision was $1.6 million, compared to a $2.0 million income tax benefit for the ~~nine~~three months ended ~~September 30, 2021 increased $4.8 million, or 58.3%, compared to the nine months ended September 30, 2020.~~March 31, 2021. The increase in our income tax ~~benefit~~provision of $3.6 million was ~~mainly~~primarily driven by:

•$~~17.2~~4.5 million increased tax provision due to higher pre-tax book income from our taxpaying entities;

•$1.3 million decreased tax benefit related to the sale of the Dreams Puerto Aventuras in 2021; and

•$1.2 million increased tax provision associated with foreign exchange rate fluctuations, primarily for our Mexican entities.

These increases were partially offset by:

•$2.9 million decreased tax provision related to valuation allowances recognized for our Jamaica and Mexico entities; and

•$~~8.4 million increased tax benefit associated with the 2021 sale of the Capri Resort;~~

•~~$5.8 million increased tax benefit associated with foreign exchange rate fluctuations, primarily for our Mexican entities;~~

•~~$0.9~~0.6 million increased tax benefit related to prior year ~~adjustments; and~~

•~~$0.8 million increased tax benefit related to other miscellaneous items.~~

~~These increases were partially offset by:~~

•~~$13.2 million increased tax expense due to lower pre-tax book losses from our taxpaying entities;~~

•~~$7.5 million decreased income tax benefit related to the 2020 sales of the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark;~~

•~~$3.6 million decreased discrete tax benefit due to deferred tax liabilities on fixed assets of certain Dominican Republic entities;~~adjustments.

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•~~$2.9 million tax expense associated with the 2021 sale of the Dreams Puerto Aventuras; and~~

•~~$1.1 million decreased tax benefit related to the Jamaica employment tax credit.~~

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

•Net Direct Expenses

•EBITDA

•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.

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“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~~ months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 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 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

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: contract termination fees; gains or losses from legal settlements; repairs from hurricanes and tropical storms and impairment losses.

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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.

Usefulness and Limitation of 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 a portion of 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 ~~nine~~three months ended ~~September 30, 2021 exclude~~March 31, 2022 excludes the following resorts: ~~Jewel Dunn's River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark, which were sold in May 2020,~~ Dreams Puerto Aventuras, which was sold in February 2021 and Capri Resort, which was sold in June 2021.

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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.”

Table of Con tents

Segment Results

Three Months Ended ~~September 30,~~March 31, 2022 and 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 three months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ ($ in thousands):


		Three Months Ended September 30,				Increase / Decrease					Three Months Ended March 31,				Increase / Decrease
		2021		2020		Change		% Change			2022		2021		Change		% Change
Owned Net Revenue	Owned Net Revenue									Owned Net Revenue
Yucatán Peninsula	Yucatán Peninsula	$	51,209	$	17,351	$	33,858	195.1	%	Yucatán Peninsula	$	68,629	$	33,603	$	35,026	104.2	%
Pacific Coast	Pacific Coast	21,982		773		21,209		2,743.7	%	Pacific Coast	29,104		8,621		20,483		237.6	%
Dominican Republic	Dominican Republic	42,794		2,453		40,341		1,644.6	%	Dominican Republic	69,664		20,881		48,783		233.6	%
Jamaica	Jamaica	29,502		6,458		23,044		356.8	%	Jamaica	44,264		11,722		32,542		277.6	%
Segment Owned Net Revenue	Segment Owned Net Revenue	145,487		27,035		118,452		438.1	%	Segment Owned Net Revenue	211,661		74,827		136,834		182.9	%
Other	Other	232		258		(26)		(10.1)	%	Other	507		125		382		305.6	%
Management fees	Management fees	673		8		665		8,312.5	%	Management fees	1,057		344		713		207.3	%
Total Net Revenue	Total Net Revenue	$	146,392	$	27,301	$	119,091	436.2	%	Total Net Revenue	$	213,225	$	75,296	$	137,929	183.2	%


		Three Months Ended September 30,				Increase / Decrease					Three Months Ended March 31,				Increase / Decrease
		2021		2020		Change		% Change			2022		2021		Change		% Change
Owned Resort EBITDA	Owned Resort EBITDA									Owned Resort EBITDA
Yucatán Peninsula	Yucatán Peninsula	$	17,518	$	(1,820)	$	19,338	1,062.5	%	Yucatán Peninsula	$	29,458	$	7,174	$	22,284	310.6	%
Pacific Coast	Pacific Coast	6,429		(2,330)		8,759		375.9	%	Pacific Coast	12,544		485		12,059		2,486.4	%
Dominican Republic	Dominican Republic	11,267		(6,296)		17,563		279.0	%	Dominican Republic	28,377		1,666		26,711		1,603.3	%
Jamaica	Jamaica	5,632		(7,473)		13,105		175.4	%	Jamaica	17,158		(2,780)		19,938		717.2	%
Segment Owned Resort EBITDA	Segment Owned Resort EBITDA	40,846		(17,919)		58,765		327.9	%	Segment Owned Resort EBITDA	87,537		6,545		80,992		1,237.5	%
Other corporate	Other corporate	(9,749)		(8,205)		(1,544)		(18.8)	%	Other corporate	(11,651)		(9,394)		(2,257)		(24.0)	%
Management fees	Management fees	673		8		665		8,312.5	%	Management fees	1,057		344		713		207.3	%
Total Adjusted EBITDA	Total Adjusted EBITDA	$	31,770	$	(26,116)	$	57,886	221.6	%	Total Adjusted EBITDA	$	76,943	$	(2,505)	$	79,448	3,171.6	%

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.

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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 ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ for the total segment portfolio and comparable segment portfolio:

Total Portfolio


		Three Months Ended September 30,						Increase / Decrease						Three Months Ended March 31,						Increase / Decrease
		2021			2020			Change			% Change			2022			2021			Change			% Change
Occupancy	Occupancy	64.7		%	19.7		%	45.0		pts	228.4	%	Occupancy	71.9		%	41.8		%	30.1		pts	72.0	%
Net Package ADR	Net Package ADR	$	336.35		$	288.40		$	47.95		16.6	%	Net Package ADR	$	429.45		$	290.91		$	138.54		47.6	%
Net Package RevPAR	Net Package RevPAR	$	217.75		$	56.94		$	160.81		282.4	%	Net Package RevPAR	$	308.75		$	121.66		$	187.09		153.8	%
		($ in thousands)												($ in thousands)
Net Package Revenue	Net Package Revenue	$	42,589		$	14,259		$	28,330		198.7	%	Net Package Revenue	$	59,077		$	27,911		$	31,166		111.7	%
Net Non-package Revenue	Net Non-package Revenue	8,620			3,092			5,528			178.8	%	Net Non-package Revenue	9,552			5,692			3,860			67.8	%
Owned Net Revenue	Owned Net Revenue	51,209			17,351			33,858			195.1	%	Owned Net Revenue	68,629			33,603			35,026			104.2	%
Owned Resort EBITDA	Owned Resort EBITDA	$	17,518		$	(1,820)		$	19,338		1,062.5	%	Owned Resort EBITDA	$	29,458		$	7,174		$	22,284		310.6	%
Owned Resort EBITDA Margin	Owned Resort EBITDA Margin	34.2		%	(10.5)		%	44.7		pts	425.7	%	Owned Resort EBITDA Margin	42.9		%	21.3		%	21.6		pts	101.4	%

Comparable Portfolio


		Three Months Ended September 30,						Increase / Decrease						Three Months Ended March 31,						Increase / Decrease
		2021			2020			Change			% Change			2022			2021			Change			% Change
Occupancy	Occupancy	64.7		%	22.6		%	42.1		pts	186.3	%	Occupancy	71.9		%	48.0		%	23.9		pts	49.8	%
Net Package ADR	Net Package ADR	$	336.35		$	306.39		$	29.96		9.8	%	Net Package ADR	$	429.46		$	297.02		$	132.44		44.6	%
Net Package RevPAR	Net Package RevPAR	$	217.75		$	69.23		$	148.52		214.5	%	Net Package RevPAR	$	308.75		$	142.50		$	166.25		116.7	%
		($ in thousands)												($ in thousands)
Net Package Revenue	Net Package Revenue	$	42,589		$	13,540		$	29,049		214.5	%	Net Package Revenue	$	59,077		$	27,266		$	31,811		116.7	%
Net Non-package Revenue	Net Non-package Revenue	8,584			2,655			5,929			223.3	%	Net Non-package Revenue	9,553			5,228			4,325			82.7	%
Owned Net Revenue	Owned Net Revenue	51,173			16,195			34,978			216.0	%	Owned Net Revenue	68,630			32,494			36,136			111.2	%
Owned Resort EBITDA	Owned Resort EBITDA	$	17,461		$	206		$	17,255		8,376.2	%	Owned Resort EBITDA	$	29,432		$	7,683		$	21,749		283.1	%
Owned Resort EBITDA Margin	Owned Resort EBITDA Margin	34.1		%	1.3		%	32.8		pts	2,523.1	%	Owned Resort EBITDA Margin	42.9		%	23.6		%	19.3		pts	81.8	%

Segment Comparable Owned Net Revenue. Our Comparable Owned Net Revenue for the three months ended ~~September 30, 2021~~March 31, 2022 increased ~~$35.0~~$36.1 million, or ~~216.0%~~111.2%, compared to the three months ended ~~September 30, 2020.~~March 31, 2021. The ~~resumption~~increase was due to the following:

•an increase in demand as a result of ~~resort operations~~increased vaccination levels, easing of government travel restrictions, and pent-up demand for ~~the entirety of 2021 resulted in increases in the third quarter of 2021 as~~leisure travel compared to the ~~third quarter of 2020, during which period~~three months ended March 31, 2021, when we ~~began reopening our resorts, in phases,~~experienced severely reduced occupancy as a result of the COVID-19 ~~pandemic. Comparable Net Package ADR~~pandemic;

•an increase in Occupancy of ~~$336.35 for~~23.9 percentage points compared to the three months ended ~~September 30,~~March 31, 2021, ~~benefited~~driven by the factors listed above as well as an ~~additional $15.98~~increase in guests sourced from Canada and Asia;

•an increase in Net Package ADR as a result of apent-up demand and pricing discipline to coincide with investments in guest satisfaction at our resorts;

•continued sequential improvement in Net Non-package Revenue with our highest spend per guest on record in the first quarter of 2022; and

•an $18.01 favorable Net Package ADR impact due to the change in billing methodology of an ~~online travel agency (“OTA”),~~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 $320.37.~~

Compared to 2019, ~~our~~ Comparable Net Package ADR for the three months ended ~~September 30, 2021~~March 31, 2022 increased by ~~$93.28,~~$108.37, or ~~38.4%~~33.8%. Excluding the aforementioned ~~change in~~adjustment for the OTA billing ~~practice,~~methodology, the increase would have been ~~$77.30,~~$90.36, or ~~31.8%, primarily as a result of pent-up customer demand following COVID-19 related travel restrictions.~~28.1%.

Segment Comparable Owned Resort EBITDA. Our Comparable Owned Resort EBITDA for the three months ended ~~September 30, 2021~~March 31, 2022 increased ~~$17.3~~$21.7 million, or ~~8,376.2%~~283.1%, compared to the three months ended ~~September 30, 2020.~~March 31, 2021. The ~~resumption~~increase was a result of ~~resort operations for~~ the ~~entirety~~on-

Table of ~~2021 resulted in~~Con tents

going revenue recovery, particularly the strong Comparable Net Package ADR increases and cost control practices which partially offset occupancy-related increases in ~~the third quarter of 2021 as~~resort operating expenses compared to the ~~third quarter of 2020, during which period~~three months ended March 31, 2021, when we ~~began reopening our resorts, in phases,~~experienced severely reduced occupancy as a result of the COVID-19 pandemic.

Compared to 2019, Comparable Owned Resort EBITDA for the three months ended March 31, 2022 increased by $1.9 million, or 6.9%.

Pacific Coast

The following ~~tables set~~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 Pacific Coast segment for the three months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ for the total segment portfolio:


		Three Months Ended September 30,						Increase / Decrease						Three Months Ended March 31,						Increase / Decrease
		2021			2020			Change			% Change			2022			2021			Change			% Change
Occupancy	Occupancy	60.5		%	1.0		%	59.5		pts	5,950.0	%	Occupancy	66.6		%	28.0		%	38.6		pts	137.9	%
Net Package ADR	Net Package ADR	$	372.39		$	578.90		$	(206.51)		(35.7)	%	Net Package ADR	$	454.61		$	311.06		$	143.55		46.1	%
Net Package RevPAR	Net Package RevPAR	$	225.43		$	6.01		$	219.42		3,650.9	%	Net Package RevPAR	$	302.89		$	87.20		$	215.69		247.4	%
		($ in thousands)												($ in thousands)
Net Package Revenue	Net Package Revenue	$	19,205		$	512		$	18,693		3,651.0	%	Net Package Revenue	$	25,242		$	7,268		$	17,974		247.3	%
Net Non-package Revenue	Net Non-package Revenue	2,777			261			2,516			964.0	%	Net Non-package Revenue	3,862			1,353			2,509			185.4	%
Owned Net Revenue	Owned Net Revenue	21,982			773			21,209			2,743.7	%	Owned Net Revenue	29,104			8,621			20,483			237.6	%
Owned Resort EBITDA	Owned Resort EBITDA	$	6,429		$	(2,330)		$	8,759		375.9	%	Owned Resort EBITDA	$	12,544		$	485		$	12,059		2,486.4	%
Owned Resort EBITDA Margin	Owned Resort EBITDA Margin	29.2		%	(301.4)		%	330.6		pts	109.7	%	Owned Resort EBITDA Margin	43.1		%	5.6		%	37.5		pts	669.6	%

Segment Owned Net Revenue. Our Owned Net Revenue for the three months ended ~~September 30, 2021~~March 31, 2022 increased ~~$21.2~~$20.5 million, or ~~2,743.7%~~237.6%, compared to the three months ended ~~September 30, 2020.~~March 31, 2021. The increase was due to the following:

•an increase in demand as a result of increased vaccination levels, easing of government travel restrictions, and pent-up demand for leisure travel compared to the three months ended March 31, 2021, when we experienced severely reduced occupancy as a result of the ~~ongoing recovery~~COVID-19 pandemic;

•an increase in ~~our business and the resorts in this segment only being open for a small portion~~Occupancy of ~~the third quarter of 2020. Net Package ADR of $372.39 for~~38.6 percentage points compared to the three months ended ~~September 30,~~March 31, 2021, ~~benefited~~driven by the factors listed above as well as an ~~additional $16.51~~increase in group room nights, which were only modestly below our first quarter 2019 group room night mix;

•an increase in Net Package ADR as a result of pent-up demand and pricing discipline to coincide with investments in guest satisfaction at our resorts;

•continued sequential improvement in Net Non-package Revenue with our highest spend per guest on record in the first quarter of 2022; and

•a $15.03 favorable Net Package ADR impact due to the 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 $355.88.~~

Compared to 2019, ~~our~~ Net Package ADR for the three months ended ~~September 30, 2021~~March 31, 2022 increased by ~~$136.15,~~$106.76, or ~~57.6%~~30.7%. Excluding the aforementioned ~~change in~~adjustment for the OTA billing ~~practice,~~methodology, the increase would have been ~~$119.64,~~$91.73, or ~~50.6%, primarily as a result of pent-up customer demand following COVID-19 related travel restrictions.~~26.4%.

Segment Owned Resort EBITDA. Our Owned Resort EBITDA for the three months ended ~~September 30, 2021~~March 31, 2022 increased ~~$8.8~~$12.1 million, or ~~375.9%~~2,486.4%, compared to the three months ended ~~September 30, 2020.~~March 31, 2021. The increase was a result of the ~~ongoing~~on-going revenue recovery, particularly the strong Net Package ADR increases and cost control practices which partially offset occupancy-related increases in ~~our business and~~resort operating expenses compared to the ~~resorts in this segment only being open for~~three months ended March 31, 2021 when we experienced severely reduced occupancy as a ~~small portion~~result of the ~~third quarter~~COVID-19 pandemic.

Compared to 2019, Owned Resort EBITDA for the three months ended March 31, 2022 increased by $0.2 million, or 1.3%.

Table of ~~2020.~~Con tents

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,~~March 31, 2022 and 2021 ~~and 2020~~ for the total segment portfolio:

Three Months Ended September 30, Increase / Decrease
2021 2020 Change % Change
Occupancy 55.4 % 2.9 % 52.5 pts 1810.3 %
Net Package ADR $ 260.61 $ 268.25 $ (7.64) (2.8) %
Net Package RevPAR $ 144.26 $ 7.76 $ 136.50 1759.0 %
($ in thousands)
Net Package Revenue $ 35,092 $ 1,889 $ 33,203 1,757.7 %
Net Non-package Revenue 7,702 564 7,138 1,265.6 %
Owned Net Revenue 42,794 2,453 40,341 1,644.6 %
Owned Resort EBITDA $ 11,267 $ (6,296) $ 17,563 279.0 %
Owned Resort EBITDA Margin 26.3 % (256.7) % 283.0 pts 110.2 %
Total Portfolio


	Three Months Ended March 31,						Increase / Decrease
	2022			2021			Change			% Change
Occupancy	77.3		%	26.0		%	51.3		pts	197.3	%
Net Package ADR	$	324.26		$	282.27		$	41.99		14.9	%
Net Package RevPAR	$	250.68		$	73.33		$	177.35		241.9	%
	($ in thousands)
Net Package Revenue	$	59,651		$	17,449		$	42,202		241.9	%
Net Non-package Revenue	10,013			3,432			6,581			191.8	%
Owned Net Revenue	69,664			20,881			48,783			233.6	%
Owned Resort EBITDA	$	28,377		$	1,666		$	26,711		1,603.3	%
Owned Resort EBITDA Margin	40.7		%	8.0		%	32.7		pts	408.8	%

Segment Owned Net Revenue. Our Owned Net Revenue for the three months ended ~~September 30, 2021~~March 31, 2022 increased ~~$40.3~~$48.8 million, or ~~1,644.6%~~233.6%, compared to the three months ended ~~September 30, 2020.~~March 31, 2021. The increase was due to the following:

•an increase in demand as a result of increased vaccination levels, easing of government travel restrictions, and pent-up demand for leisure travel compared to the ~~ongoing recovery in our business and closure of the majority of the resorts in this segment during the third quarter of 2020~~three months ended March 31, 2021, when we experienced severely reduced occupancy as a result of the COVID-19 ~~pandemic.~~pandemic;

45•an increase in Occupancy of 51.3 percentage points compared to the three months ended March 31, 2021, driven by the factors listed above as well as an increase in guests sourced from Canada and Europe;

•an increase in Net Package ADR as a result of pent-up demand and pricing discipline to coincide with investments in guest satisfaction at our resorts, partially offset by our externally managed properties, whose rates remain significantly depressed versus our Playa-managed properties; and

•continued sequential improvement in Net Non-package Revenue.

Compared to 2019, ~~our~~ Net Package ADR for the three months ended ~~September 30, 2021~~March 31, 2022 increased by ~~$104.31,~~$90.60, or ~~66.7%~~38.8%. This increase was driven by the opening of the premium-positioned Hyatt Ziva and Hyatt Zilara Cap Cana resorts in the fourth quarter of 2019 ~~as well as~~and the renovation of the Hilton La Romana All-Inclusive ~~Resort.~~Resort in 2019.

Segment Owned Resort EBITDA. Our Owned Resort EBITDA for the three months ended ~~September 30, 2021~~March 31, 2022 increased ~~$17.6~~$26.7 million, or ~~279.0%~~1,603.3%, compared to the three months ended ~~September 30, 2020.~~March 31, 2021. The increase was a result of the ~~ongoing~~on-going revenue recovery, particularly the strong Net Package ADR increases and cost control practices which partially offset occupancy-related increases in ~~our business and closure of~~resort operating expenses compared to the ~~majority of the resorts in this segment during the third quarter of 2020~~three months ended March 31, 2021, when we experienced severely reduced occupancy as a result of the COVID-19 pandemic.

Compared to 2019, Owned Resort EBITDA for the three months ended March 31, 2022 increased by $14.9 million, or 110.8%. Our Playa-managed properties increased $20.0 million, or 617.1%, driven by the opening of the premium-positioned Hyatt Ziva and Hyatt Zilara Cap Cana resorts in the fourth quarter of 2019 and the renovation of the Hilton La Romana All-Inclusive Resort in 2019.

The segment's performance was weighed down by our two externally managed properties, which have lagged behind our globally branded resorts in the segment with respect to rate gains and, as a result, are yielding significantly lower margins. Owned Resort EBITDA of our externally managed properties decreased $5.1 million, or 49.6%, compared to the three months ended March 31, 2019.

Table of Con tents

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,~~March 31, 2022 and 2021 ~~and 2020~~ for the total segment portfolio:

Three Months Ended September 30, Increase / Decrease
2021 2020 Change % Change
Occupancy 57.7 % 16.6 % 41.1 pts 247.6 %
Net Package ADR $ 314.62 $ 236.94 $ 77.68 32.8 %
Net Package RevPAR $ 181.39 $ 39.23 $ 142.16 362.4 %
($ in thousands)
Net Package Revenue $ 23,831 $ 5,153 $ 18,678 362.5 %
Net Non-package Revenue 5,671 1,305 4,366 334.6 %
Owned Net Revenue 29,502 6,458 23,044 356.8 %
Owned Resort EBITDA $ 5,632 $ (7,473) $ 13,105 175.4 %
Owned Resort EBITDA Margin 19.1 % (115.7) % 134.8 pts 116.5 %
Total Portfolio


	Three Months Ended March 31,						Increase / Decrease
	2022			2021			Change			% Change
Occupancy	67.6		%	26.3		%	41.3		pts	157.0	%
Net Package ADR	$	415.11		$	279.87		$	135.24		48.3	%
Net Package RevPAR	$	280.54		$	73.57		$	206.97		281.3	%
	($ in thousands)
Net Package Revenue	$	36,056		$	9,455		$	26,601		281.3	%
Net Non-package Revenue	8,208			2,267			5,941			262.1	%
Owned Net Revenue	44,264			11,722			32,542			277.6	%
Owned Resort EBITDA	$	17,158		$	(2,780)		$	19,938		717.2	%
Owned Resort EBITDA Margin	38.8		%	(23.7)		%	62.5		pts	63.7	%

Segment Owned Net Revenue. Our Owned Net Revenue for the three months ended ~~September 30, 2021~~March 31, 2022 increased ~~$23.0~~$32.5 million, or ~~356.8%~~277.6%, compared to the three months ended ~~September 30, 2020.~~March 31, 2021. The ~~resumption~~increase was due to the following:

•an increase in demand as a result of ~~resort operations~~increased vaccination levels, easing of government travel restrictions, and pent-up demand for ~~the entirety of 2021 resulted in increases in the third quarter of 2021 as~~leisure travel compared to the ~~third quarter of 2020, during which period~~three months ended March 31, 2021 when we ~~began reopening our resorts, in phases,~~experienced severely reduced occupancy as a result of the COVID-19 ~~pandemic.~~pandemic;

•an increase in Occupancy of 41.3 percentage points compared to the three months ended March 31, 2021, driven by the factors listed above as well as an increase in guests sourced from Canada and Europe;

•an increase in Net Package ADR as a result of pent-up demand and pricing discipline to coincide with investments in guest satisfaction at our resorts; and

•continued sequential improvement in Net Non-package Revenue with our highest spend per guest on record in the first quarter of 2022.

Compared to 2019, ~~which included the Jewel Dunn's River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark, our~~ Net Package ADR for the three months ended ~~September 30, 2021~~March 31, 2022 increased by ~~$59.90,~~$64.64, or ~~23.5%~~18.4%. ~~Excluding~~The recovery in Jamaica continues to improve but remains depressed due to more stringent COVID-19 related travel restrictions compared to the ~~two divested resorts, our Net Package ADR increased by $32.45, or 11.5%.~~other regions where we operate.

Segment Owned Resort EBITDA. Our Owned Resort EBITDA for the three months ended ~~September 30, 2021~~March 31, 2022 increased ~~$13.1~~$19.9 million, or ~~175.4%~~717.2%, compared to the three months ended ~~September 30, 2020.~~March 31, 2021. The ~~resumption~~increase was a result of ~~resort operations for~~ the ~~entirety of 2021 resulted in~~on-going revenue recovery, particularly the strong Net Package ADR increases and cost control practices which partially offset occupancy-related increases in ~~the third quarter of 2021 as~~resort operating expenses compared to the ~~third quarter of 2020, during which period~~three months ended March 31, 2021, when we ~~began reopening our resorts, in phases,~~experienced severely reduced occupancy as a result of the COVID-19 pandemic.

~~Segment Results~~

~~Nine Months Ended September 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~~Compared to 2019, Owned Resort EBITDA for the ~~nine~~three months ended ~~September 30, 2021 and 2020~~ ~~($ in thousands)~~:

Nine Months Ended September 30, Increase / Decrease
2021 2020
Change
% Change
Owned Net Revenue
Yucatán Peninsula $ 129,879 $ 79,689 $ 50,190 63.0 %
Pacific Coast 51,117 21,854 29,263 133.9 %
Dominican Republic 97,563 38,060 59,503 156.3 %
Jamaica 65,358 58,458 6,900 11.8 %
Segment Owned Net Revenue 343,917 198,061 145,856 73.6 %
Other 726 293 433 147.8 %
Management Fee Revenue 1,469 635 834 131.3 %
Total Net Revenue $ 346,112 $ 198,989 $ 147,123 73.9 %

Nine Months Ended September 30, Increase / Decrease
2021 2020
Change
% Change
Owned Resort EBITDA
Yucatán Peninsula $ 37,714 $ 15,111 $ 22,603 149.6 %
Pacific Coast 13,992 3,726 10,266 275.5 %
Dominican Republic 20,859 (3,388) 24,247 715.7 %
Jamaica 6,924 3,503 3,421 97.7 %
Segment Owned Resort EBITDA 79,489 18,952 60,537 319.4 %
Other corporate (28,778) (26,782) (1,996) (7.5) %
Management Fee Revenue 1,469 635 834 131.3 %
Total Adjusted EBITDA $ 52,180 $ (7,195) $ 59,375 825.2 %

~~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, 2021 and 2020 for the total segment portfolio and comparable segment portfolio:

~~Total Portfolio~~

Nine Months Ended September 30, Increase / Decrease
2021 2020
Change
% Change
Occupancy 52.2 % 31.2 % 21.0 pts 67.3 %
Net Package ADR $ 320.69 $ 296.21 $ 24.48 8.3 %
Net Package RevPAR $ 167.54 $ 92.48 $ 75.06 81.2 %
($ in thousands)
Net Package Revenue $ 107,764 $ 68,978 $ 38,786 56.2 %
Net Non-package Revenue 22,115 10,711 11,404 106.5 %
Owned Net Revenue 129,879 79,689 50,190 63.0 %
Owned Resort EBITDA $ 37,714 $ 15,111 $ 22,603 149.6 %
Owned Resort EBITDA Margin 29.0 % 19.0 % 10.0 pts 52.6 %

~~Comparable Portfolio~~

Nine Months Ended September 30, Increase / Decrease
2021 2020
Change
% Change
Occupancy 57.2 % 31.7 % 25.5 pts 80.4 %
Net Package ADR $ 322.79 $ 316.11 $ 6.68 2.1 %
Net Package RevPAR $ 184.59 $ 100.32 $ 84.27 84.0 %
($ in thousands)
Net Package Revenue $ 107,133 $ 58,442 $ 48,691 83.3 %
Net Non-package Revenue 21,563 8,690 12,873 148.1 %
Owned Net Revenue 128,696 67,132 61,564 91.7 %
Owned Resort EBITDA $ 38,956 $ 15,293 $ 23,663 154.7 %
Owned Resort EBITDA Margin 30.3 % 22.8 % 7.5 pts 32.9 %

~~Segment Comparable Owned Net Revenue. Our Comparable Owned Net Revenue for the nine months ended September 30, 2021 increased $61.6~~March 31, 2022 decreased by $7.2 million, or ~~91.7%, compared~~29.5%. The recovery in Jamaica continued to improve, but remained depressed as this segment suffered the ~~nine months ended September 30, 2020. These increases were a result of~~greatest impact from the resorts being open for the entirety of 2021 as compared to the nine months ended September 30, 2020, when we closed our resorts for the second quarter and experienced severely reduced occupancy during the third quarterOmicron variant with disrupted bookings in January as a result of the COVID-19 pandemic. Comparable Net Package ADR of $322.79 for the nine months ended September 30, 2021 benefited by an additional $8.47 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 have been $314.33.

Compared to 2019, our Comparable Net Package ADR for the nine months ended September 30, 2021 increased by $41.12, or 14.6%. Excluding the aforementioned change in billing practice, the increase would have been $32.66, or 11.6%, primarily as a result of pent-up customer demand followingmore stringent COVID-19 related travel restrictions.

~~Segment Comparable Owned Resort EBITDA. Our Comparable Owned Resort EBITDA for~~ This segment finished the ~~nine months ended September 30, 2021 increased $23.7 million, or 154.7%,~~quarter relatively flat compared to the ~~nine months ended September 30, 2020. These increases were a result~~end of the resorts being open for the entirety of 2021 as compared to the nine months ended September 30, 2020, when we closed our resorts for the second quarter and experienced severely reduced occupancy during the third quarter as a result of the COVID-19 pandemic.2021.

~~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, 2021 and 2020 for the total segment portfolio:

Nine Months Ended September 30, Increase / Decrease
2021 2020 Change % Change
Occupancy 49.6 % 21.1 % 28.5 pts 135.1 %
Net Package ADR $ 347.61 $ 346.49 $ 1.12 0.3 %
Net Package RevPAR $ 172.36 $ 73.05 $ 99.31 135.9 %
($ in thousands)
Net Package Revenue $ 43,572 $ 18,533 $ 25,039 135.1 %
Net Non-package Revenue 7,545 3,321 4,224 127.2 %
Owned Net Revenue 51,117 21,854 29,263 133.9 %
Owned Resort EBITDA $ 13,992 $ 3,726 $ 10,266 275.5 %
Owned Resort EBITDA Margin 27.4 % 17.0 % 10.4 pts 61.2 %

~~Segment Owned Net Revenue~~. Our Owned Net Revenue for the nine months ended September 30, 2021 increased $29.3 million, or 133.9%, compared to the nine months ended September 30, 2020. These increases were a result of the resorts being open for the entirety of 2021 as compared to the nine months ended September 30, 2020, when we closed our resorts for the second quarter and experienced severely reduced occupancy during the third quarter as a result of the COVID-19 pandemic. Net Package ADR of $347.61 for the nine months ended September 30, 2021 benefited by an additional $9.14 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 $338.48.

Compared to 2019, our Net Package ADR for the nine months ended September 30, 2021 increased by $54.88, or 18.7%. Excluding the aforementioned change in billing practice, the increase would have been $45.75, or 15.6%, primarily as a result of pent-up customer demand following COVID-19 related travel restrictions.

~~Segment Owned Resort EBITDA~~.Our Owned Resort EBITDA for the nine months ended September 30, 2021 increased $10.3 million, or 275.5%, compared to the nine months ended September 30, 2020. These increases were a result of the resorts being open for the entirety of 2021 as compared to the nine months ended September 30, 2020, when we closed our resorts for the second quarter and experienced severely reduced occupancy during the third quarter as a result of 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 months ended September 30, 2021 and 2020 for the total segment portfolio:

Nine Months Ended September 30, Increase / Decrease
2021 2020 Change % Change
Occupancy 42.2 % 20.0 % 22.2 pts 111.0 %
Net Package ADR $ 263.98 $ 228.09 $ 35.89 15.7 %
Net Package RevPAR $ 111.42 $ 45.61 $ 65.81 144.3 %
($ in thousands)
Net Package Revenue $ 80,426 $ 33,041 $ 47,385 143.4 %
Net Non-package Revenue 17,137 5,019 12,118 241.4 %
Owned Net Revenue 97,563 38,060 59,503 156.3 %
Owned Resort EBITDA $ 20,859 $ (3,388) $ 24,247 715.7 %
Owned Resort EBITDA Margin 21.4 % (8.9) % 30.3 pts 340.4 %

~~Segment Owned Net Revenue~~. Our Owned Net Revenue for the nine months ended September 30, 2021 increased $59.5 million, or 156.3%, compared to the nine months ended September 30, 2020. These increases were a result of the resorts being open for the entirety of 2021 as compared to the nine months ended September 30, 2020, when we closed our resorts for the second quarter and experienced severely reduced occupancy during the third quarter as a result of the COVID-19 pandemic.

Compared to 2019, our Net Package ADR for the nine months ended September 30, 2021 increased by $67.07, or 34.1%. This increase was driven by the opening of Hyatt Ziva and Hyatt Zilara Cap Cana in the fourth quarter of 2019 as well as the renovation of the Hilton La Romana All-Inclusive Resort.

~~Segment Owned Resort EBITDA~~. Our Owned Resort EBITDA for the nine months ended September 30, 2021 increased $24.2 million, or 715.7%, compared to the nine months ended September 30, 2020. These increases were a result of the resorts being open for the entirety of 2021 as compared to the nine months ended September 30, 2020, when we closed our resorts for the second quarter and experienced severely reduced occupancy during the third quarter as a result of 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 nine months ended September 30, 2021 and 2020 for the total segment portfolio and comparable portfolio:

~~Total Portfolio~~

Nine Months Ended September 30, Increase / Decrease
2021 2020 Change % Change
Occupancy 44.4 % 31.3 % 13.1 pts 41.9 %
Net Package ADR $ 304.13 $ 337.62 $ (33.49) (9.9) %
Net Package RevPAR $ 135.06 $ 105.66 $ 29.40 27.8 %
($ in thousands)
Net Package Revenue $ 52,652 $ 49,659 $ 2,993 6.0 %
Net Non-package Revenue 12,706 8,799 3,907 44.4 %
Owned Net Revenue 65,358 58,458 6,900 11.8 %
Owned Resort EBITDA $ 6,924 $ 3,503 $ 3,421 97.7 %
Owned Resort EBITDA Margin 10.6 % 6.0 % 4.6 pts 76.7 %

~~Comparable Portfolio~~

Nine Months Ended September 30, Increase / Decrease
2021 2020 Change % Change
Occupancy 44.4 % 29.0 % 15.4 pts 53.1 %
Net Package ADR $ 304.54 $ 354.84 $ (50.30) (14.2) %
Net Package RevPAR $ 135.24 $ 103.04 $ 32.20 31.3 %
($ in thousands)
Net Package Revenue $ 52,723 $ 40,315 $ 12,408 30.8 %
Net Non-package Revenue 12,632 7,329 5,303 72.4 %
Owned Net Revenue 65,355 47,644 17,711 37.2 %
Owned Resort EBITDA $ 6,506 $ 1,399 $ 5,107 365.0 %
Owned Resort EBITDA Margin 10.0 % 2.9 % 7.1 pts 244.8 %

~~Segment Comparable Owned Net Revenue~~. Our Owned Net Revenue for the nine months ended September 30, 2021 increased $17.7 million, or 37.2%, compared to the nine months ended September 30, 2020. These increases were a result of the resorts being open for the entirety of 2021 as compared to the nine months ended September 30, 2020, when we closed our resorts for the second quarter and experienced severely reduced occupancy during the third quarter as a result of the COVID-19 pandemic. Net Package ADR in the segment was negatively impacted by a higher mix of Occupancy at our lower chain scale resorts.

~~Compared to 2019, our Comparable Net Package ADR for the nine months ended September 30, 2021 decreased by $23.42, or 7.1%.~~

~~Segment Comparable Owned Resort EBITDA~~. Our Owned Resort EBITDA for the nine months ended September 30, 2021 increased $5.1 million, or 365.0%, compared to the nine months ended September 30, 2020. These increases were a result of the resorts being open for the entirety of 2021 as compared to the nine months ended September 30, 2020, when we closed our resorts for the second quarter and experienced severely reduced occupancy during the third quarter as a result of the COVID-19 pandemic.

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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~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ ($ in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Net loss		$	(12,371)	$	(78,604)	$	(89,884)	$	(188,618)
Net income (loss)										Net income (loss)	$	42,747	$	(69,745)
Interest expense	Interest expense	19,047		19,973		56,164		61,844		Interest expense	9,168		18,167
Income tax provision (benefit)	Income tax provision (benefit)	1,360		5,299		(13,043)		(8,237)		Income tax provision (benefit)	1,614		(1,951)
Depreciation and amortization	Depreciation and amortization	19,927		22,518		60,827		69,877		Depreciation and amortization	19,500		20,883
EBITDA	EBITDA	27,963		(30,814)		14,064		(65,134)		EBITDA	73,029		(32,646)
Other (income) expense (a)		(587)		(224)		747		(1,171)
Other expense (a)										Other expense (a)	514		706
Share-based compensation	Share-based compensation	3,270		1,925		9,899		7,867		Share-based compensation	3,356		3,179

Transaction expense (b)	Transaction expense (b)	210		541		928		1,416		Transaction expense (b)	191		579
Severance expense (c)	Severance expense (c)	—		1,448		1,287		3,892		Severance expense (c)	—		1,287
Other tax expense (benefit) (d)		67		(170)		228		298
Contract termination fees		400		—		400		—
Other tax expense (d)										Other tax expense (d)	240		163

Impairment loss(e)	Impairment loss(e)	—		867		24,011		42,308		Impairment loss(e)	—		24,011
(Gain) loss on sale of assets		(4)		—		644		1,729
Repairs from hurricanes and tropical storms		435		—		435		—
Non-service cost components of net periodic pension benefit (cost) (e)		16		311		(463)		1,600
Loss on sale of assets										Loss on sale of assets	—		273
Non-service cost components of net periodic pension cost (f)										Non-service cost components of net periodic pension cost (f)	(387)		(57)
Adjusted EBITDA	Adjusted EBITDA	31,770		(26,116)		52,180		(7,195)		Adjusted EBITDA	76,943		(2,505)
Other corporate	Other corporate	9,749		8,205		28,778		26,782		Other corporate	11,651		9,394
Management fee income	Management fee income	(673)		(8)		(1,469)		(635)		Management fee income	(1,057)		(344)
Owned Resort EBITDA	Owned Resort EBITDA	40,846		(17,919)		79,489		18,952		Owned Resort EBITDA	87,537		6,545
Less: Non-comparable Owned Resort EBITDA	Less: Non-comparable Owned Resort EBITDA	57		(2,026)		(824)		1,922		Less: Non-comparable Owned Resort EBITDA	26		(509)
Comparable Owned Resort EBITDA (f)		$	40,789	$	(15,893)	$	80,313	$	17,030
Comparable Owned Resort EBITDA (g)										Comparable Owned Resort EBITDA (g)	$	87,511	$	7,054

________

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

(b) Represents expenses incurred in connection with corporate initiatives, such as: system implementations, debt refinancing costs; other capital raising efforts; 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 on the Capri Resort recognized upon classification of the resort as held for sale in connection with the agreement for the sale of the property executed on March 31, 2021.

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

~~(f)~~(g) Comparable resorts for the three months ended ~~September 30, 2021~~March 31, 2022 exclude the ~~following: Capri Resort, which was sold in June 2021 and~~ Dreams Puerto Aventuras, which was sold in February 2021, and ~~for the nine months ended September 30, 2021 also exclude the Jewel Dunn's River Beach~~Capri Resort, ~~& Spa and Jewel Runaway Bay Beach Resort & Waterpark,~~ which ~~were~~was sold in ~~May 2020.~~June 2021.

Seasonality

The seasonality of the lodging industry and the location of our resorts in Mexico, Jamaica and ~~the Caribbean generally result~~Dominican Republic have historically resulted in the greatest demand for our resorts occurring 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 and~~ 2021 and Net Package ADR was ~~particularly strong~~progressively stronger during the second, third and ~~third~~fourth quarters of 2021 than it was in ~~comparison~~the first quarter of 2021. We generally expect to ~~prior years. See “Impact of COVID-19 Pandemic” above for more information regarding the effects of the COVID-19 pandemic on our results of operations.~~see a return to pre-COVID-19 seasonality in 2022.

Inflation

~~We have~~During the first quarter of 2022 we experienced ~~a higher rate of inflation as compared to the same period in 2020 with respect to~~above-average inflationary pressure on our direct resort expenses, ~~particularly~~which was approximately 200 basis points higher than our typical expense inflation range experienced in the pre-pandemic environment. Inflation effects were experienced mostly through higher labor ~~expenses, utilities, and~~costs, food and beverage prices, and utility costs. We expect this trend will likely continue at least through the second quarter of 2022, but it could continue for longer. While we, like most operators of lodging

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properties, have the ability

to adjust room rates to reflect the effects of inflation, competitive pricing pressures and the continuing 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 at all of~~Our net cash provided by operating activities for the three months ended March 31, 2022 was $37.6 million, representing a significant increase over the three months ended March 31, 2021 as our ~~resorts~~business continues to recover from ~~late March 2020 through July 2020 as a result~~the impacts of the COVID-19 ~~pandemic,~~pandemic. We believe that our sources of cash, which consist of available cash and cash from operations, together with the ~~severely reduced occupancy we experienced upon reopening~~available borrowing capacity under our Revolving Credit Facility and our access to the ~~resorts~~capital markets, will be adequate to meet our cash requirements, including our contractual obligations, over the next twelve months and ~~the reduced occupancy levels we continue to experience, have adversely affected our liquidity.~~beyond.

Sources of Cash

As of ~~September 30, 2021,~~March 31, 2022, we had ~~$231.5~~$299.8 million of available cash, excluding restricted cash, up from ~~$146.9~~$270.1 million as of December 31, ~~2020.~~2021. The increase in available cash was primarily ~~attributable~~due to improved cash flow from operations across our portfolio due to the ~~net cash proceeds~~ongoing recovery from the COVID-19 pandemic. We also benefited from increased vaccination levels, easing of government travel restrictions, and pent-up customer demand for leisure travel, as well as our ~~equity raise of $137.7 million, the sale of the Dreams Puerto Aventuras for $34.3 million and the sale of the Capri Resort for $55.2 million, which were partially offset by the repayment of~~strategic decision to focus on pricing discipline to coincide with investments in guest satisfaction at our ~~outstanding Revolving Credit Facility balance of $84.7 million and the Term Loan and Term A3 Loan principal repayments of $25.1 million.~~resorts.

Our primary short-term cash needs are paying operating expenses, maintaining our resorts, and servicing our outstanding indebtedness. As of September 30, 2021, we had $22.3 million of scheduled contractual obligations remaining in 2021. We have deferred substantially all major development, expansion, renovation, repositioning and rebranding projects, 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, net cash provided by operations, equity issuances or short-term borrowings under our Revolving Credit Facility.

Further, our restricted cash balance related to our Property Loan of $20.6 million was released into unrestricted cash on April 29, 2022 due to the strong operating performance of the Hyatt Ziva and Hyatt Zilara Cap Cana and Hilton Rose Hall Resort & Spa properties. As of ~~September~~April 30, ~~2021,~~2022, we had ~~$85.0~~approximately $334.5 million of available cash and also had $68.0 million available on our Revolving Credit Facility, of which ~~$68.0 million~~ 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 30, 2021, our total debt obligations were $1,149.9 million (which represents the principal amounts outstanding under Term Loans, Property Loan and finance lease obligations, excluding $4.6 million of issuance discounts and $8.4 million of unamortized debt issuance costs). We expect to meet our long-term liquidity requirements generally through the sources of cash available for short-term needs, net cash provided by operations, as well as equity or debt issuances or proceeds from the potential disposal of assets.

Cash Requirements

Our expected material cash requirements for the remainder of 2022 and thereafter consist of (i) contractually obligated expenditures, including payments of principal and interest; (ii) other essential expenditures, including operating expenses and maintenance of our resorts; and (iii) opportunistic expenditures, including possible property developments, expansions, renovations, repositioning and rebranding projects, potential acquisitions, the repayment of indebtedness and discretionary repurchases of our securities.

As of March 31, 2022, 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 mandatory Term Loan repayments as a result of the sales of our resorts in 2021 and 2020. As of March 31, 2022, we expect to repay approximately $37.9 million of our outstanding Term Loan in 2022 and approximately $9.0 million in February 2023. In addition to the mandatory Term Loan repayments resulting from the sale of our resorts, we also had $62.6 million of scheduled contractual obligations remaining in 2022.

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 continue to improve, whether as a result of the current pandemic or a resurgence thereof or for other reasons, such as the Ukraine and Russia crisis, 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.

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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.

~~Cash Flows~~Recent Transactions Affecting Our Liquidity and Capital Resources

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,
2021 2020
Net cash used in operating activities $ (14,034) $ (60,552)
Net cash provided by investing activities $ 76,965 $ 37,724
Net cash provided by financing activities $ 20,292 $ 224,999


	Three Months Ended March 31,
	2022		2021
Net cash provided by (used in) operating activities	$	37,648	$	(26,562)
Net cash (used in) provided by investing activities	$	(4,436)	$	29,622
Net cash (used in) provided by financing activities	$	(2,624)	$	50,446
Increase in cash, cash equivalents, and restricted cash	$	30,588	$	53,506

~~Net~~ Cash ~~Provided by or Used in~~Flows from Operating Activities

Our net cash ~~(used in) provided by~~from operating activities is generated primarily from operating ~~loss or~~ income ~~from~~of our resorts. For the ~~nine~~three months ended ~~September 30,~~March 31, 2022, our net cash provided by operating activities was $37.6 million. For the three months ended March 31, 2021, our net cash used in operating activities was ~~$14.0~~$26.6 million.

Cash Flows from Investing Activities

For the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2022, our net cash used in ~~operating~~investing activities was ~~$60.6~~$4.4 million.

•~~Net loss of $89.9 million for~~ For the ~~nine~~three months ended September 30, 2021 included significant non-cash income and expenses, including $60.8 million of depreciation and amortization, $24.0 million of impairment losses, and $9.9 million of share-based compensation, offset by a $6.4 million gain on the fair value of our interest rate swaps and by changes in our assets and liabilities through the normal course of operations.

•Net loss of $188.6 million for the nine months ended September 30, 2020 included significant non-cash expenses, including $69.9 million of depreciation and amortization, $42.3 million of goodwill impairment losses, $7.9 million of share based compensation, and a $9.7 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 months ended September 30,~~March 31, 2021, our net cash provided by investing activities was ~~$77.0 million. For the nine months ended September 30, 2020, our net cash provided by investing activities was $37.7~~$29.6 million.

Activity for the ~~nine~~three months ended ~~September 30,~~March 31, 2022:

•Purchases of property and equipment of $4.4 million.

Activity for the three months ended March 31, 2021:

•Net proceeds from the sale of assets, consisting of ~~$88.9~~the Dreams Puerto Aventuras resort, of $34.2 million; and

•Purchases of property and equipment of ~~$11.7 million.~~

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

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

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

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

•~~Purchases of intangible assets of $0.5 million; and~~

•~~Receipt of key money of $8.5~~$4.6 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 deferred all non-critical capital expenditures for the remainder of the year.~~

~~Net~~ Cash ~~Provided by or Used in~~Flows from Financing Activities

Our net cash ~~provided by~~used in financing activities was ~~$20.3~~$2.6 million for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 compared to ~~$225.0~~$50.4 million of cash provided by financing activities for the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021.

Activity for the ~~nine~~three months ended ~~September 30,~~March 31, 2022:

•Principal payments on our Term Loan of $2.5 million.

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Activity for the three months ended March 31, 2021:

•Net proceeds from our January 2021 equity issuance of $137.7 million;

•Principal payments on our Term Loan of ~~$32.0 million;~~

•~~Repayment of our Term A3 Loan of $0.7~~$2.5 million; and

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

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

•~~Net proceeds from debt issuances of $199.6 million;~~

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

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

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

•~~Debt issuance costs of $8.7 million;~~

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

•~~Repurchases of ordinary shares of $2.5 million.~~

~~Senior Secured Credit Facility~~

Playa Resorts Holding B.V., a subsidiary of ours, holds a senior secured credit facility (the “Senior Secured Credit Facility”) pursuant to the Existing Credit Agreement, which consists of a term loan facility which is scheduled to mature on April 27, 2024 (“Term Loan”) and a revolving credit facility, a portion of which is scheduled to mature on April 27, 2022 and a portion of which is scheduled to mature on January 27, 2024 (“Revolving Credit Facility”). The Term Loan bears interest at a rate per annum equal to LIBOR plus 2.75% (where the applicable LIBOR rate has a 1.0% floor). The Revolving Credit Facility bears interest at LIBOR plus 3.00% with respect to the portion maturing in April 2022, and LIBOR plus 4.00% with respect to the portion maturing January 2024. We are required to pay a commitment fee ranging from 0.25% to 0.5% per annum on the average daily undrawn balance of the Revolving Credit Facility.

The obligations under the Senior Secured Credit Facility are guaranteed by (a) substantially all of our material subsidiaries, subject to certain exceptions and (b) the Company on a limited recourse basis, with such guaranty being collateralized by a lien on our ordinary shares.

The obligations are further collateralized by, among other things, a lien on (i) all resorts located in Mexico, (ii) certain personal property associated with such resort properties and (iii) pledges of equity interests in certain of 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 repayment requirements for the Term A3 Loan that are consistent with the Existing Credit Agreement. Mandatory 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~~

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. We may not voluntarily prepay any portion of the Property Loan prior to July 1, 2023 without paying a make-whole premium equal to 100% of the amount of interest that would have otherwise accrued from the date of such payment through July 1, 2022 plus 50% of the interest that otherwise would have accrued from the prepayment date to July 1, 2023. Subsequent to July 2023, we may prepay any portion of the Property Loan without penalty.

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 $24.6 million as of September 30, 2021.

~~Contractual Obligations~~

~~As of September 30, 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.~~

Our total debt decreased $117.4 million, from $1,267.3 million as of December 31, 2020 to $1,149.9 million as of September 30, 2021. This decrease was driven by the repayment of the $84.7 million balance previously outstanding on our Revolving Credit Facility in February 2021 and the $24.4 million repayment on our Term 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 Capri Resort's net proceeds of $24.4 million, after deducting incremental expenses, to repay our Term Loan on June 29, 2021. The remaining decrease was a result of our quarterly principal payments on our Term Loan totaling $7.6 million.

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 certain exceptions, including for 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 repay the net proceeds, after taking into account certain investments made in accordance with our reinvestment rights, from the sales of the Jewel Dunn’s River Beach Resort & Spa and Jewel Runaway Bay Beach Resort & Waterpark of $23.3 million and the Dreams Puerto Aventuras of $8.1 million, re~~spectively, which include~~ ~~incremental transaction c~~osts and capital expenditures incurred across our portfolio leading up to the repayment date. In December 2022, we expect to repay the remaining 50% of the net proceeds from the sale of the Capri Resort of $23.7 million.

~~Off Balance Sheet Arrangements~~

~~We had no off balance sheet arrangements for the three and nine months ended September 30, 2021 and 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~~involve higher degree of ~~judgment~~judgement and estimation ~~based~~uncertainty and have had or are reasonably likely to have a material impact on ~~assumptions that are inherently uncertain. While we~~our financial condition or results of operations. We believe our estimates, assumptions and judgments with respect to our such policies are reasonable ~~they are~~ based upon information presently available. ~~Actual~~However, 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, ~~2020,~~2021, filed with the SEC on ~~March 4, 2021.~~February 24, 2022. 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 ~~finance~~financing lease obligation). SeeNote 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~~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 30, 2021,~~March 31, 2022, 15% of our outstanding indebtedness bore interest at floating rates and 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 ~~$0.1~~$0.8 million annually, assuming the balance outstanding under our Revolving Credit Facility remained at $0 million.

•If market rates of interest on our floating rate debt were to decrease by 1.0%, there would be no impact on our floating rate debt or our future earnings and cash flows, assuming the balance outstanding under our Revolving Credit Facility remained at $0 million and the current LIBOR rate on our floating rate debt could not fall below the existing 1.0% LIBOR floor.

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Foreign ~~currency risk~~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~~three months ended ~~September 30, 2021~~March 31, 2022 approximately ~~3.3%~~2.2% 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 ~~84.6%~~74.5% of our resort-level operating expenses for the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 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 30, 2021~~March 31, 2022 would have impacted our ~~net income before tax~~Owned Resort EBITDA by approximately ~~$5.7~~$2.1 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 30, 2021~~March 31, 2022 would have impacted our ~~net income before tax~~Owned Resort EBITDA by approximately ~~$3.5~~$1.7 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 30, 2021~~March 31, 2022 would have impacted our ~~net income before tax~~Owned Resort EBITDA by approximately ~~$2.6~~$1.1 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.

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~~the Company’s disclosure controls and procedures, ~~were not effective~~ as of ~~September 30, 2021.~~the end of the period covered by this Quarterly Report on Form 10-Q, were effective.

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 September 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”).~~

In connection with our efforts to remediate the Tax Weakness, we identified errors in our previously disclosed deferred tax liabilities for one of our Dominican Republic entities during the quarter ended September 30, 2021. We concluded that these errors were not material to any prior annual or interim periods and corrected the errors for all prior periods presented by revising the Condensed Consolidated Financial Statements and other financial information included herein. The adjustments had no impact on our Condensed Consolidated Statements of Operations or Condensed Consolidated Statements of Cash Flows for all prior periods presented.

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.

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

The ongoing conflict between Russia and Ukraine may negatively impact macro-economic conditions which could affect consumer spending adversely and as a result, our business, results of operations, cash flows or financial condition.

The current conflict between Russia and Ukraine has not had a direct or material impact on the ~~SEC's website at www.sec.gov.~~Company. However, a prolonged conflict, the potential expansion of the conflict into other European countries, or the involvement of the United States or other countries where we source our guests could have an impact on macro-economic conditions which could adversely affect consumer spending and consequently, our operations. Further, the rising price of utilities, including increases in fuel prices, would raise the overall vacation cost to our guests and may adversely affect demand for our vacation packages.

Additional risks to our business relating to the Russia and Ukraine conflict include potential interruptions in global supply chains and the availability of items essential to our resort operations, the heightened possibility of cyberattacks, and the potential for travel restrictions affecting our guests' ability to access our resort destinations.

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

~~(a) Unregistered Sale of Securities~~

~~None.~~

~~(b) Use of Proceeds~~

~~None.~~

~~(c) Issuer Purchases of Equity Securities~~

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

~~The Company has established a new date of May 12, 2022 for its 2022 annual general meeting of shareholders (the “AGM”), and set April 14, 2022 as the record date.~~

Under Dutch law and the Company’s Articles of Association, if a shareholder is interested in submitting a proposed agenda item or a proposed resolution within the authority of shareholders to be presented at the 2022 AGM, the shareholder must fulfill the requirements set forth in Dutch law and the Company’s Articles of Association, including satisfying both of the following criteria:

•the Company must receive the proposed agenda item (supported by reasons) or proposed resolution in writing or by electronic means no later than 60 days before the date of the 2022 annual general meeting of shareholders (March 13, 2022); and

•~~the number of shares held by the shareholder, or group of shareholders, submitting the proposed agenda item or proposed resolution represent at least 3% of the Company’s issued share capital.~~

Under the Dutch Corporate Governance Code, if shareholders intend to request that an item be put on the agenda as described above that may result in a change in the Company’s strategy, for example as a result of the dismissal of one or several Board members, the Board should be given the opportunity to invoke a reasonable period of up to 180 days during which to respond to such request. If invoked, the Board should use the response time for further deliberation and constructive consultation, in any event with the relevant shareholder(s) requesting the agenda item, and the Board should explore the alternatives. At the end of the response time, the Board should report on this consultation and the exploration to the shareholders meeting. A response time may be stipulated only once forNone.

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any given shareholders meeting and should not apply to an item in respect of which the response time had been previously stipulated, or to meetings where a shareholder holds at least 75% of the issued capital as a consequence of a successful public bid.

In addition, because the date of the AGM has been changed by more than 30 days from the anniversary date of the 2021 annual general meeting of shareholders, pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), a new deadline will apply for the receipt of any shareholder proposals submitted pursuant to Rule 14a-8 of the Exchange Act for inclusion in the Company’s proxy materials for the 2022 AGM. Pursuant to Rule 14a-8(e)(2) under the Exchange Act, such proposals must be received on or before the close of business on December 20, 2021, which the Company has determined to be a reasonable time before it expects to begin to print and distribute its proxy materials for the 2022 AGM, as such date is approximately 120 calendar days prior to when the Company anticipates printing and distributing its proxy materials for the 2022 AGM. ~~Such proposals must otherwise comply with the requirements of Rule 14a-8 and Dutch law in order to be considered for inclusion in the 2022 proxy statement and proxy.~~

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 30, 2021,~~March 31, 2022, 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~~Income (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)

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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 3, 2021~~May 5, 2022

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 3, 2021~~May 5, 2022

By:

/s/ Ryan Hymel

Ryan Hymel

Chief Financial Officer

(Principal Financial Officer)


	Three Months Ended September 30, 2020
	Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Corporate/Other		Total
Package revenue	$	14,775	$	526	$	1,889	$	5,515	$	—	$	22,705
Non-package revenue	3,128		261		564		1,306		259		5,518
Management fees	—		—		—		—		8		8
Cost reimbursements	—		—		—		474		31		505
Total revenue	$	17,903	$	787	$	2,453	$	7,295	$	298	$	28,736


	Nine Months Ended September 30, 2021
	Yucatán Peninsula		Pacific Coast		Dominican Republic		Jamaica		Corporate/Other		Total
Package revenue	$	111,378	$	45,167	$	80,512	$	55,948	$	—	$	293,005
Non-package revenue	22,637		7,603		17,137		12,705		726		60,808
Management fees	—		—		—		—		1,469		1,469
Cost reimbursements	—		—		—		1,970		584		2,554
Total revenue	$	134,015	$	52,770	$	97,649	$	70,623	$	2,779	$	357,836