Revenue and Related Contract Costs and Contract Liabilities

9 Months Ended

Sep. 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		134,090
Revenue recognized		(107,479	)
Foreign exchange translation adjustment		(3,093	)
Balance at September 30, 2022	$	63,180

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		51,930
Expenses		(36,448	)
Foreign exchange translation adjustment		(1,089	)
Balance at September 30, 2022	$	28,183

As of September 30, 2022, capitalized contract costs consisted of $0.3 million to obtain contracts and $27.9 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, 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				Nine Months Ended
	September 30,				September 30,
(in thousands)	2022		2021		2022		2021
Services:
Ticket revenue	$	60,825	$	39,480	$	99,364	$	51,069
Rooms revenue		42,453		35,413		69,915		51,552
Transportation		6,251		3,453		11,185		4,913
Other		7,581		3,753		11,968		7,395
Total services revenue		117,110		82,099		192,432		114,929
Products:
Food and beverage		25,105		18,029		41,369		25,152
Retail operations		21,581		17,427		31,378		23,577
Total products revenue		46,686		35,456		72,747		48,729
Total revenue	$	163,796	$	117,555	$	265,179	$	163,658
Timing of revenue recognition:
Services transferred over time	$	117,110	$	82,099	$	192,432	$	114,929
Products transferred at a point in time		46,686		35,456		72,747		48,729
Total revenue	$	163,796	$	117,555	$	265,179	$	163,658
Markets:
Banff Jasper Collection	$	80,829	$	52,602	$	134,121	$	71,720
Alaska Collection		25,591		25,932		39,407		37,279
Glacier Park Collection		41,080		32,081		55,670		43,627
FlyOver		8,276		2,296		18,285		3,494
Sky Lagoon		8,020		4,644		17,696		7,538
Total revenue	$	163,796	$	117,555	$	265,179	$	163,658

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						Nine Months Ended
	September 30,						September 30,
(in thousands)	2022			2021			2022			2021
Service lines:
Spiro	$	73,277		$	37,866		$	205,518		$	61,869
GES Exhibitions		147,872			81,138			414,303			101,347
Intersegment eliminations		(2,224	)		(2,960	)		(5,716	)		(3,107	)
Total revenue	$	218,925		$	116,044		$	614,105		$	160,109
Timing of revenue recognition:
Services transferred over time	$	189,089		$	100,865		$	519,036		$	139,241
Products transferred over time(1)		11,231			6,509			35,194			7,659
Products transferred at a point in time		18,605			8,670			59,875			13,209
Total revenue	$	218,925		$	116,044		$	614,105		$	160,109
Geographical markets:
North America	$	186,787		$	92,648		$	505,484		$	127,978
EMEA		43,088			24,084			127,435			34,061
Intersegment eliminations		(10,950	)		(688	)		(18,814	)		(1,930	)
Total revenue	$	218,925		$	116,044		$	614,105		$	160,109

(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.