Revenue and Related Contract Costs and Contract Liabilities

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue and Related Contract Costs and Contract Liabilities

Note 2. Revenue and Related Contract Costs and Contract Liabilities

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, and/or the sale of food, beverage, or retail products. We recognize revenue when the service has been provided or the product has been delivered. When we extend credit, payment terms are generally within 30 days and contain no significant financing components.

GES’ performance obligations consist of services or product(s) outlined in a contract. While we often sign multi-year contracts 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 a live event. Revenue for goods and services provided for which we do not have control of the goods or services before that good or service is transferred to a customer is recorded on a net basis to reflect only the fees received for arranging these services. We recognize revenue for services generally at the close of the live event. We recognize revenue for products 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. In circumstances where a customer cancels a contract, we generally have the right to bill the customer for costs incurred to date. Payment terms are generally within 30-60 days and contain no significant financing components.

Contract Liabilities

Pursuit and GES typically receive customer deposits prior to transferring the related product or service to the customer. We record these deposits as a contract liability, which 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 we recognize as a reduction of revenue. We include these amounts in “Contract liabilities” and “Other deferred items and liabilities” in the Condensed Consolidated Balance Sheets.

Changes to contract liabilities are as follows:

(in thousands)
Balance at December 31, 2021	$	39,662
Cash additions		93,013
Revenue recognized		(58,618	)
Foreign exchange translation adjustment		(7,121	)
Balance at June 30, 2022	$	66,936

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 live events, and also include up-front incentives and commissions incurred upon contract signing. We expense costs associated with preliminary contract activities (i.e. proposal activities) as incurred. Capitalized contract costs are expensed upon the transfer of the related goods or services and are included in Costs of services or Costs of products, as applicable. We include the deferred incremental costs of obtaining and fulfilling contracts in “Current contract costs” and “Other investments and assets” in the Condensed Consolidated Balance Sheets.

Changes to contract costs are as follows:

(in thousands)
Balance at December 31, 2021	$	13,790
Additions		32,034
Expenses		(20,584	)
Foreign exchange translation adjustment		(485	)
Balance at June 30, 2022	$	24,755

As of June 30, 2022, capitalized contract costs consisted of $0.2 million to obtain contracts and $24.6 million to fulfill contracts. We did not recognize an impairment loss with respect to capitalized contract costs during the three and six months ended June 30, 2022 or 2021.

Disaggregation of Revenue

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

Pursuit

During the first quarter of 2022, we reallocated certain ancillary revenue presented in Pursuit’s services revenue to better align with how we analyze revenue and depict the nature of revenue. All prior periods have been reclassified to conform to this new presentation.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands)	2022		2021		2022		2021
Services:
Ticket revenue	$	29,337	$	10,105	$	38,539	$	11,589
Rooms revenue		20,559		11,370		27,462		16,139
Transportation		3,755		923		4,934		1,460
Other		3,017		2,547		4,387		3,642
Total services revenue		56,668		24,945		75,322		32,830
Products:
Food and beverage		12,171		5,899		16,264		7,123
Retail operations		8,760		5,469		9,797		6,150
Total products revenue		20,931		11,368		26,061		13,273
Total revenue	$	77,599	$	36,313	$	101,383	$	46,103
Timing of revenue recognition:
Services transferred over time	$	56,668	$	24,945	$	75,322	$	32,830
Products transferred at a point in time		20,931		11,368		26,061		13,273
Total revenue	$	77,599	$	36,313	$	101,383	$	46,103
Markets:
Banff Jasper Collection	$	38,962	$	10,658	$	53,292	$	19,118
Alaska Collection		13,319		11,058		13,816		11,347
Glacier Park Collection		13,581		10,968		14,590		11,546
FlyOver		5,870		735		10,009		1,198
Sky Lagoon		5,867		2,894		9,676		2,894
Total revenue	$	77,599	$	36,313	$	101,383	$	46,103

GES

During the first quarter of 2022, we changed our segment reporting as a result of operational changes and how our CODM reviews the financial performance of GES and makes decisions regarding the allocation of resources. Accordingly, GES’ new reportable segments are Spiro and GES Exhibitions. As a result, we changed certain items in the following disaggregation of revenue table. All prior periods have been reclassified to conform to the new reporting structure.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands)	2022			2021			2022			2021
Service lines:
Spiro	$	89,425		$	11,944		$	132,241		$	24,003
GES Exhibitions		154,600			13,057			266,431			20,209
Intersegment eliminations		(2,421	)		(81	)		(3,492	)		(147	)
Total revenue	$	241,604		$	24,920		$	395,180		$	44,065
Timing of revenue recognition:
Services transferred over time	$	197,464		$	21,361		$	329,947		$	38,376
Products transferred over time(1)		16,025			733			23,963			1,150
Products transferred at a point in time		28,115			2,826			41,270			4,539
Total revenue	$	241,604		$	24,920		$	395,180		$	44,065
Geographical markets:
North America	$	189,670		$	19,472		$	318,697		$	35,330
EMEA		58,534			6,074			84,347			9,977
Intersegment eliminations		(6,600	)		(626	)		(7,864	)		(1,242	)
Total revenue	$	241,604		$	24,920		$	395,180		$	44,065

(1)GES’ graphics product revenue is earned over time over the duration of an event as it is considered a part of the single performance obligation satisfied over time.