Revenue and Related Contract Costs and Contract Liabilities

12 Months Ended

Dec. 31, 2018

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 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 Consolidated Balance Sheets under the captions “Contract liabilities” and “Other deferred items and liabilities.”

We elected to apply the following practical expedients in Topic 606 related to performance obligations:

Not to disclose (i) the amount of consideration allocated to the remaining performance obligations (ii) an explanation of when we expect to recognize that amount as revenue as of December 31, 2017 and (iii) the value of unsatisfied performance obligations for contracts with an original duration of one year or less because the vast majority of our contract liabilities relate to future exhibitions and events that will occur within the next 12 months.

Changes to contract liabilities are as follows:

(in thousands)
Balance at January 1, 2018	$	31,981
Cash additions		179,238
Revenue recognized		(174,620	)
Foreign exchange translation adjustment		(999	)
Balance at December 31, 2018	$	35,600

Contract Costs

Changes to contract costs are as follows:

(in thousands)
Balance at January 1, 2018	$	16,878
Additions		65,147
Expenses		(59,601	)
Cancelled		(136	)
Foreign exchange translation adjustment		(810	)
Balance at December 31, 2018	$	21,478

As of December 31, 2018, capitalized contract costs consisted of $2.5 million to obtain contracts and $19.0 million to fulfill contracts. We did not recognize any impairment loss with respect to capitalized contract costs for the year ended December 31, 2018.

As a result of adopting Topic 606, there was $1.7 million of additional capitalized contract costs recorded at December 31, 2018 resulting in a $1.3 million increase to “Net income” in the Consolidated Statement of Operations for the year ended December 31, 2018.

Disaggregation of Revenue

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

GES

	Year Ended December 31, 2018
(in thousands)	GES U.S.		GES International		Intersegment Eliminations			Total
Services:
Core services	$	675,368	$	178,758	$	—		$	854,126
Audio-visual		73,331		22,011		—			95,342
Event technology		30,208		10,658		—			40,866
Intersegment eliminations		—		—		(17,489	)		(17,489	)
Total services		778,907		211,427		(17,489	)		972,845
Products:
Core products		68,334		69,718		—			138,052
Total revenue	$	847,241	$	281,145	$	(17,489	)	$	1,110,897

Timing of revenue recognition:
Services transferred over time	$	778,908	$	211,427	$	(17,489	)	$	972,846
Products transferred over time⁽¹⁾		41,448		18,745		—			60,193
Products transferred at a point in time		26,885		50,973		—			77,858
Total revenue	$	847,241	$	281,145	$	(17,489	)	$	1,110,897

Markets:
Exhibitions	$	455,561	$	206,073	$	—		$	661,634
Conferences		241,494		37,613		—			279,107
Corporate events		121,552		33,360		—			154,912
Consumer events		28,634		4,099		—			32,733
Intersegment eliminations		—		—		(17,489	)		(17,489	)
Total revenue	$	847,241	$	281,145	$	(17,489	)	$	1,110,897

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

Pursuit

	Year Ended
(in thousands)	December 31, 2018
Services:
Admissions	$	83,000
Accommodations		37,470
Transportation		13,956
Travel planning		4,529
Intersegment eliminations		(1,551	)
Total services revenue		137,404
Products:
Food and beverage		25,962
Retail operations		21,921
Total products revenue		47,883
Total revenue	$	185,287

Timing of revenue recognition:
Services transferred over time	$	137,404
Products transferred at a point in time		47,883
Total revenue	$	185,287

Markets:
Banff Jasper Collection	$	106,106
Alaska Collection		36,451
Glacier Park Collection		31,465
FlyOver		11,265
Total revenue	$	185,287

Balance Sheet Reclassifications

In connection with the adoption of Topic 606, effective January 1, 2018, we made the following reclassifications to separately present contract costs and contract liabilities on the Consolidated Balance Sheet as of December 31, 2017:

	December 31, 2017
(in thousands)	As Previously Reported		Reclassifications			As Adjusted
Cash and cash equivalents	$	53,723		—		$	53,723
Accounts receivable, net		104,811		—			104,811
Inventories ⁽¹⁾		30,372		(12,822	)		17,550
Current contract costs ⁽¹⁾		—		13,436			13,436
Other current assets ⁽¹⁾		21,030		(1,289	)		19,741
Property and equipment, net		305,571		—			305,571
Other investments and assets ⁽¹⁾		47,512		675			48,187
Deferred income taxes		23,548		—			23,548
Goodwill		270,551		—			270,551
Other intangible assets, net		62,781		—			62,781
Total assets	$	919,899		—		$	919,899
Accounts payable	$	77,380		—		$	77,380
Customer deposits ⁽²⁾		33,415		(33,415	)		—
Contract liabilities ⁽²⁾		—		31,981			31,981
Accrued compensation		30,614		—			30,614
Other current liabilities ⁽²⁾		38,720		1,434			40,154
Debt and capital lease obligations, current and long-term		209,192		—			209,192
Pension and postretirement benefits		28,135		—			28,135
Other deferred items and liabilities		52,858		—			52,858
Total liabilities		470,314		—			470,314
Redeemable noncontrolling interest		6,648		—			6,648
Total stockholders' equity ⁽³⁾		442,937		—			442,937
Total liabilities and stockholders' equity	$	919,899		—		$	919,899

⁽¹⁾

Contract costs primarily consist of deferred core services costs (including labor and vendor purchases) required to service future exhibitions, conferences and other events, and commission expenses incurred to obtain contracts. All such costs were previously included in “Inventories” and in certain other assets. As a result of the changes noted above, deferred core services costs related to exhibitions and events that are scheduled to occur longer than one year in the future are currently included in “Other investments and assets”. The impact of this change reduced total current assets at December 31, 2017 by $0.7 million. The amount of deferred core services costs included in “Other investments and assets” at December 31, 2018 was $3.5 million.

⁽²⁾

In connection with the adoption of Topic 606, we elected to more prominently present contract liabilities on the Consolidated Balance Sheets. Consequently, customer deposits of $33.4 million as of December 31, 2017, have been reclassified to “Contract liabilities” and to other certain current liabilities to conform to the current period presentation.

⁽³⁾	We determined that the cumulative effect of initially applying Topic 606 as an adjustment to the opening balance of retained earnings was not material, and therefore we made no adjustment.