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Revenue and Related Contract Costs and Contract Liabilities

9 Months Ended

Sep. 30, 2019

Revenue From Contract With Customer [Abstract]

Note 2. Revenue and Related Contract Costs and Contract Liabilities

GES’ performance obligations consist of services or product(s) outlined in a contract. While multi-year contracts are often signed for recurring events, the obligations for each occurrence are well defined and conclude upon the occurrence of each event. The obligations are typically the provision of services and/or sale of a product in connection with an exhibition, conference, or other event. Revenue for services is recognized when we have a right to invoice at the close of the exhibition, conference, or corporate event, which typically lasts one to three days. Revenue for consumer events is recognized over the duration of the event. Revenue for products is recognized either upon delivery to the customer’s location, upon delivery to an event that we are serving, or when we have the right to invoice, generally at the close of the exhibition, conference, or corporate event. Payment terms are generally within 30-60 days and contain no significant financing components.

Pursuit’s performance obligations are short-term in nature. They include the provision of a hotel room, an attraction admission, a chartered or ticketed bus or van ride, the fulfillment of travel planning itineraries, and/or the sale of food, beverage, or retail products. Revenue is recognized when the service has been provided or the product has been delivered. When credit is extended, payment terms are generally within 30 days and contain no significant financing components.

Contract Liabilities

GES and Pursuit typically receive customer deposits prior to transferring the related product or service to the customer. These deposits are recorded as a contract liability and are recognized as revenue upon satisfaction of the related contract performance obligation(s). GES also provides customer rebates and volume discounts to certain event organizers that are recorded as contract liabilities and are recognized as a reduction of revenue. These amounts are included in the Condensed Consolidated Balance Sheets under the captions “Contract liabilities” and “Other deferred items and liabilities.”

Changes to contract liabilities are as follows:

(in thousands)
Balance at December 31, 2018	$	35,600
Cash additions		150,566
Revenue recognized		(123,330	)
Foreign exchange translation adjustment		(451	)
Balance at September 30, 2019	$	62,385

Contract Costs

GES capitalizes certain incremental costs incurred in obtaining and fulfilling contracts. Capitalized costs principally relate to direct costs of materials and services incurred in fulfilling services of future exhibitions, conferences, and events, and also include up-front incentives and commissions incurred upon contract signing. Costs associated with preliminary contract activities (i.e. proposal activities) are expensed as incurred. Capitalized contract costs are expensed upon the transfer of the related goods or services and are included in cost of services or cost of products, as applicable. The deferred incremental costs of obtaining and fulfilling contracts are included in the Condensed Consolidated Balance Sheets under the captions “Current contract costs” and “Other investments and assets.”

Changes to contract costs are as follows:

(in thousands)
Balance at December 31, 2018	$	21,478
Additions		58,330
Expenses		(44,666	)
Cancelled		(45	)
Foreign exchange translation adjustment		(263	)
Balance at September 30, 2019	$	34,834

As of September 30, 2019, capitalized contract costs consisted of $2.4 million to obtain contracts and $32.4 million to fulfill contracts. We did not recognize an impairment loss with respect to capitalized contract costs during the three and nine months ended September 30, 2019 or 2018.

Disaggregation of Revenue

The following tables disaggregate GES and Pursuit revenue by major product line, timing of revenue recognition, and markets served:

GES

	Three Months Ended September 30, 2019
(in thousands)	GES North America⁽¹⁾		GES EMEA⁽¹⁾		Intersegment Eliminations			Total
Services:
Core services	$	155,581	$	22,425	$	—		$	178,006
Audio-visual		18,742		4,402		—			23,144
Event technology		4,760		1,414		—			6,174
Intersegment eliminations		—		—		(5,724	)		(5,724	)
Total services		179,083		28,241		(5,724	)		201,600
Products:
Core products		12,900		12,945		—			25,845
Total revenue	$	191,983	$	41,186	$	(5,724	)	$	227,445

Timing of revenue recognition:
Services transferred over time	$	179,083	$	28,241	$	(5,724	)	$	201,600
Products transferred over time⁽²⁾		10,558		2,305		—			12,863
Products transferred at a point in time		2,342		10,640		—			12,982
Total revenue	$	191,983	$	41,186	$	(5,724	)	$	227,445

Markets:
Exhibitions	$	89,088	$	29,519	$	—		$	118,607
Conferences		56,205		6,320		—			62,525
Corporate events		41,205		5,147		—			46,352
Consumer events		5,485		200		—			5,685
Intersegment eliminations		—		—		(5,724	)		(5,724	)
Total revenue	$	191,983	$	41,186	$	(5,724	)	$	227,445

⁽¹⁾

During the first quarter of 2019, we realigned GES’ organizational structure. As a result, we changed GES’ reportable segments to reflect how our chief operating decision maker regularly reviews and makes decisions regarding the allocation of resources. Accordingly, GES’ new reportable segments are GES North America and GES EMEA.

⁽²⁾	GES’ graphics product revenue is recognized over time as it is considered a part of the single performance obligation satisfied over time.

	Nine Months Ended September 30, 2019
(in thousands)	GES North America⁽¹⁾		GES EMEA⁽¹⁾		Intersegment Eliminations			Total
Services:
Core services	$	563,566	$	95,309	$	—		$	658,875
Audio-visual		61,323		15,171		—			76,494
Event technology		23,368		6,501		—			29,869
Intersegment eliminations		—		—		(14,731	)		(14,731	)
Total services		648,257		116,981		(14,731	)		750,507
Products:
Core products		50,649		48,086		—			98,735
Total revenue	$	698,906	$	165,067	$	(14,731	)	$	849,242

Timing of revenue recognition:
Services transferred over time	$	648,257	$	116,981	$	(14,731	)	$	750,507
Products transferred over time⁽²⁾		33,601		10,595		—			44,196
Products transferred at a point in time		17,048		37,491		—			54,539
Total revenue	$	698,906	$	165,067	$	(14,731	)	$	849,242

Markets:
Exhibitions	$	364,404	$	124,467	$	—		$	488,871
Conferences		209,522		20,172		—			229,694
Corporate events		103,860		19,464		—			123,324
Consumer events		21,120		964		—			22,084
Intersegment eliminations		—		—		(14,731	)		(14,731	)
Total revenue	$	698,906	$	165,067	$	(14,731	)	$	849,242

⁽¹⁾

⁽²⁾	GES’ graphics product revenue is recognized over time as it is considered a part of the single performance obligation satisfied over time.

	Three Months Ended September 30, 2018
(in thousands)	GES North America⁽¹⁾		GES EMEA⁽¹⁾		Intersegment Eliminations			Total
Services:
Core services	$	162,967	$	27,511	$	—		$	190,478
Audio-visual		17,309		4,423		—			21,732
Event technology		4,874		1,745		—			6,619
Intersegment eliminations		—		—		(2,379	)		(2,379	)
Total services		185,150		33,679		(2,379	)		216,450
Products:
Core products		15,705		13,955		—			29,660
Total revenue	$	200,855	$	47,634	$	(2,379	)	$	246,110

Timing of revenue recognition:
Services transferred over time	$	185,150	$	33,679	$	(2,379	)	$	216,450
Products transferred over time⁽²⁾		10,645		2,862		—			13,507
Products transferred at a point in time		5,060		11,093		—			16,153
Total revenue	$	200,855	$	47,634	$	(2,379	)	$	246,110

Markets:
Exhibitions	$	114,387	$	35,787	$	—		$	150,174
Conferences		42,053		4,232		—			46,285
Corporate events		35,555		6,728		—			42,283
Consumer events		8,860		887		—			9,747
Intersegment eliminations		—		—		(2,379	)		(2,379	)
Total revenue	$	200,855	$	47,634	$	(2,379	)	$	246,110

⁽¹⁾

⁽²⁾	GES’ graphics product revenue is recognized over time as it is considered a part of the single performance obligation satisfied over time.

	Nine Months Ended September 30, 2018
(in thousands)	GES North America⁽¹⁾		GES EMEA⁽¹⁾		Intersegment Eliminations			Total
Services:
Core services	$	555,175	$	88,270	$	—		$	643,445
Audio-visual		55,134		14,144		—			69,278
Event technology		23,443		7,866		—			31,309
Intersegment eliminations		—		—		(11,888	)		(11,888	)
Total services		633,752		110,280		(11,888	)		732,144
Products:
Core products		50,058		46,936		—			96,994
Total revenue	$	683,810	$	157,216	$	(11,888	)	$	829,138

Timing of revenue recognition:
Services transferred over time	$	633,752	$	110,280	$	(11,888	)	$	732,144
Products transferred over time⁽²⁾		32,982		11,018		—			44,000
Products transferred at a point in time		17,076		35,918		—			52,994
Total revenue	$	683,810	$	157,216	$	(11,888	)	$	829,138

Markets:
Exhibitions	$	397,945	$	116,410	$	—		$	514,355
Conferences		170,910		21,677		—			192,587
Corporate events		93,797		17,170		—			110,967
Consumer events		21,158		1,959		—			23,117
Intersegment eliminations		—		—		(11,888	)		(11,888	)
Total revenue	$	683,810	$	157,216	$	(11,888	)	$	829,138

⁽¹⁾

⁽²⁾	GES’ graphics product revenue is recognized over time as it is considered a part of the single performance obligation satisfied over time.

Pursuit

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in thousands)	2019			2018			2019			2018
Services:
Admissions	$	49,353		$	51,316		$	76,034		$	78,375
Accommodations		41,292			24,623			56,636			35,358
Transportation		6,868			7,602			12,817			14,292
Travel planning		2,004			651			4,107			1,450
Intersegment eliminations		(671	)		(554	)		(1,355	)		(1,260	)
Total services revenue		98,846			83,638			148,239			128,215
Products:
Food and beverage		19,333			16,074			28,903			23,998
Retail operations		16,864			12,341			23,977			17,917
Total products revenue		36,197			28,415			52,880			41,915
Total revenue	$	135,043		$	112,053		$	201,119		$	170,130

Timing of revenue recognition:
Services transferred over time	$	98,846		$	83,638		$	148,239		$	128,215
Products transferred at a point in time		36,197			28,415			52,880			41,915
Total revenue	$	135,043		$	112,053		$	201,119		$	170,130

Markets:
Banff Jasper Collection	$	75,337		$	58,525		$	116,433		$	94,133
Alaska Collection		26,909			25,546			39,287			36,373
Glacier Park Collection		28,098			23,418			36,296			30,684
FlyOver		4,699			4,564			9,103			8,940
Total revenue	$	135,043		$	112,053		$	201,119		$	170,130