Revenue and Related Contract Costs and Contract Liabilities

3 Months Ended

Mar. 31, 2020

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 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 an exhibition, conference, or other event. GES’ revenue is earned over time over the duration of the event, but as a practical expedient we recognize revenue when we have a right to invoice at the close of the exhibition, conference, or corporate event, which typically lasts one to three days or when a customer cancels a contract. We recognize revenue for consumer events over the duration of the 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, generally at the close of the exhibition, conference, or corporate event, or when a customer cancels a contract. If a customer cancels a contract, then GES is generally contractually able to invoice the customer for contract costs that have been incurred by GES in preparing for 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. 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.

Contract Liabilities

GES and Pursuit 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 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, 2019	$	50,796
Cash additions		53,284
Revenue recognized		(64,430	)
Foreign exchange translation adjustment		(1,482	)
Balance at March 31, 2020	$	38,168

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. 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 cost of services or cost of products, as applicable. We include the deferred incremental costs of obtaining and fulfilling contracts 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, 2019	$	28,496
Additions		11,672
Expenses		(17,679	)
Cancelled		(2,086	)
Foreign exchange translation adjustment		(644	)
Balance at March 31, 2020	$	19,759

As of March 31, 2020, capitalized contract costs consisted of $1.7 million to obtain contracts and $18.1 million to fulfill contracts. We did not recognize an impairment loss with respect to capitalized contract costs during the three months ended March 31, 2020 or 2019.

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 March 31, 2020
(in thousands)	GES North America		GES EMEA		Intersegment Eliminations			Total
Services:
Core services	$	210,183	$	26,503	$	—		$	236,686
Audio-visual		17,430		4,034		—			21,464
Event technology		5,554		2,861		—			8,415
Intersegment eliminations		—		—		(1,989	)		(1,989	)
Total services		233,167		33,398		(1,989	)		264,576
Products:
Core products		18,591		9,318		—			27,909
Total revenue	$	251,758	$	42,716	$	(1,989	)	$	292,485

Timing of revenue recognition:
Services transferred over time	$	233,167	$	33,398	$	(1,989	)	$	264,576
Products transferred over time⁽¹⁾		10,577		2,450		—			13,027
Products transferred at a point in time		8,014		6,868		—			14,882
Total revenue	$	251,758	$	42,716	$	(1,989	)	$	292,485

Markets:
Exhibitions	$	184,358	$	32,547	$	—		$	216,905
Conferences		35,890		4,807		—			40,697
Corporate events		26,964		5,154		—			32,118
Consumer events		4,546		208		—			4,754
Intersegment eliminations		—		—		(1,989	)		(1,989	)
Total revenue	$	251,758	$	42,716	$	(1,989	)	$	292,485

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

	Three Months Ended March 31, 2019
(in thousands)	GES North America		GES EMEA		Intersegment Eliminations			Total
Services:
Core services	$	179,873	$	31,063	$	—		$	210,936
Audio-visual		18,406		3,888		—			22,294
Event technology		8,763		2,953		—			11,716
Intersegment eliminations		—		—		(2,690	)		(2,690	)
Total services		207,042		37,904		(2,690	)		242,256
Products:
Core products		16,199		16,472		—			32,671
Total revenue	$	223,241	$	54,376	$	(2,690	)	$	274,927

Timing of revenue recognition:
Services transferred over time	$	207,042	$	37,904	$	(2,690	)	$	242,256
Products transferred over time⁽¹⁾		11,269		3,479		—			14,748
Products transferred at a point in time		4,930		12,993		—			17,923
Total revenue	$	223,241	$	54,376	$	(2,690	)	$	274,927

Markets:
Exhibitions	$	136,429	$	45,655	$	—		$	182,084
Conferences		47,862		2,982		—			50,844
Corporate events		32,787		5,545		—			38,332
Consumer events		6,163		194		—			6,357
Intersegment eliminations		—		—		(2,690	)		(2,690	)
Total revenue	$	223,241	$	54,376	$	(2,690	)	$	274,927

⁽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.

Pursuit

	Three Months Ended
	March 31,
(in thousands)	2020			2019
Services:
Admissions	$	4,102		$	3,525
Accommodations		4,517			2,418
Transportation		2,056			1,995
Travel planning		416			632
Intersegment eliminations		(111	)		(185	)
Total services revenue		10,980			8,385
Products:
Food and beverage		1,649			1,364
Retail operations		894			918
Total products revenue		2,543			2,282
Total revenue	$	13,523		$	10,667

Timing of revenue recognition:
Services transferred over time	$	10,980		$	8,385
Products transferred at a point in time		2,543			2,282
Total revenue	$	13,523		$	10,667

Markets:
Banff Jasper Collection	$	9,799		$	7,870
Alaska Collection		151			180
Glacier Park Collection		723			823
FlyOver		2,850			1,794
Total revenue	$	13,523		$	10,667