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Goodwill and Other Intangible Assets
12 Months Ended
Dec. 31, 2020
Goodwill And Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangible Assets

Note 9. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill are as follows:

(in thousands)

 

GES North America

 

 

GES EMEA

 

 

Pursuit

 

 

Total

 

Balance at December 31, 2018

 

$

154,944

 

 

$

29,954

 

 

$

76,432

 

 

$

261,330

 

Business acquisitions

 

 

 

 

 

 

 

 

20,684

 

 

 

20,684

 

Foreign currency translation adjustments

 

 

332

 

 

 

875

 

 

 

4,762

 

 

 

5,969

 

Balance at December 31, 2019

 

 

155,276

 

 

 

30,829

 

 

 

101,878

 

 

 

287,983

 

Goodwill impairment

 

 

(154,989

)

 

 

(29,042

)

 

 

(1,758

)

 

 

(185,789

)

Foreign currency translation adjustments

 

 

(287

)

 

 

(1,787

)

 

 

1,659

 

 

 

(415

)

Other

 

 

 

 

 

 

 

 

(1,932

)

 

 

(1,932

)

Balance at December 31, 2020

 

$

 

 

$

 

 

$

99,847

 

 

$

99,847

 

 

The following table summarizes goodwill by reporting unit and segment:

 

 

December 31,

 

(in thousands)

 

2020

 

 

2019

 

GES:

 

 

 

 

 

 

 

 

GES North America:

 

 

 

 

 

 

 

 

U.S.

 

$

 

 

$

148,277

 

Canada

 

 

 

 

 

6,999

 

GES EMEA

 

 

 

 

 

30,829

 

Total GES

 

 

 

 

 

186,105

 

Pursuit:

 

 

 

 

 

 

 

 

Banff Jasper Collection

 

 

54,856

 

 

 

55,524

 

Alaska Collection

 

 

3,184

 

 

 

3,184

 

Glacier Park Collection

 

 

 

 

 

1,758

 

FlyOver

 

 

41,807

 

 

 

41,412

 

Total Pursuit

 

 

99,847

 

 

 

101,878

 

Total Goodwill

 

$

99,847

 

 

$

287,983

 

Goodwill is tested for impairment at the reporting unit level on an annual basis as of October 31, and between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying value. We use a discounted expected future cash flow methodology (income approach) to estimate the fair value of our reporting units for purposes of goodwill impairment testing.

In early March 2020, as a result of COVID-19 concerns, we began to see event postponements and cancellations at GES, as well as cancelled bookings at Pursuit. This quickly escalated into the shut-down of event activity and tourism as government mandated closures and stay-at-home orders went more broadly into effect around the world. As demand halted, we essentially placed our businesses into a state of hibernation to preserve cash. As government mandated closures and stay-at-home orders started to be lifted, we began to restart our business with enhanced health and safety protocols in place. We phased in most of Pursuit’s attractions and lodging operations starting in May 2020. However, exhibition and event activity remain largely dormant. For GES, we believe that as governments continue to lift restrictions, events in certain geographies will gradually increase.

During the first quarter of 2020, we determined that an interim triggering event had occurred due to the deteriorating macroeconomic environment related to the COVID-19 pandemic, resulting in disruptions to our operations and the decline in our stock price. As such, we performed an interim evaluation of goodwill as of March 31, 2020. As a result, we recorded non-cash goodwill impairment charges of $41.9 million associated with GES U.S., $29.0 million associated with GES EMEA, and $1.8 million associated with Pursuit’s Glacier Park Collection. We recorded an income tax benefit of $12.4 million during the three months ended March 31, 2020 related to these goodwill impairment charges. This income tax benefit was reversed during the second quarter of 2020 due to the recording of a valuation allowance. Refer to Note 17 – Income Taxes.

During the second quarter of 2020, GES continued to experience event postponements and cancellations and we experienced further declines in our stock price. There was also an increased spread of the COVID-19 virus throughout the United States, which resulted in further closures and government orders that we believed had increased the uncertainty regarding when the live event industry would re-commence and how long it would take to get back to similar pre-COVID-19 business levels. The uncertainty regarding the duration of the current domestic and global economic conditions and whether further deterioration in the macroeconomic environment would

continue as a result of the COVID-19 pandemic was factored into our second quarter goodwill impairment analysis. As a result, we recorded a full impairment charge to the remaining GES goodwill balance of $113.1 million during the second quarter of 2020. Our remaining goodwill balance as of December 31, 2020 of $99.8 million pertains to our Pursuit business.

Although Pursuit’s reporting units continued to operate at a loss due to travel restrictions, we did not record any additional impairment charges during the third or fourth quarter of 2020 as there were no significant changes to our outlook for the future years and the risk profile of the reporting units had not changed. Additionally, we experienced a slight increase in our stock price during the third and fourth quarters of 2020 once news of a vaccine was announced and the vaccine was rolled out.

Given the evolving nature of COVID-19 and the uncertain government and consumer reactions, the estimates and assumptions regarding expected future cash flows, discount rates, and terminal values used in our goodwill impairment analysis require considerable judgment and are based on our current estimates of market conditions, financial forecasts, and industry trends. These estimates, however, have inherent uncertainties and different assumptions could lead to materially different results including additional impairment charges in the future.

Our accumulated goodwill impairment was $415.5 million as of December 31, 2020 and $229.7 million as of December 31, 2019.

Other intangible assets consisted of the following:

 

 

 

 

December 31, 2020

 

 

December 31, 2019

 

(in thousands)

 

Useful Life

(Years)

 

Gross Carrying

Value

 

 

Accumulated

Amortization

 

 

Net Carrying Value

 

 

Gross Carrying

Value

 

 

Accumulated

Amortization

 

 

Net Carrying Value

 

Intangible assets subject to amortization:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer contracts and relationships

 

6.4

 

$

38,214

 

 

$

(26,288

)

 

$

11,926

 

 

$

72,219

 

 

$

(40,866

)

 

$

31,353

 

Operating contracts and licenses

 

36.7

 

 

42,012

 

 

 

(2,405

)

 

 

39,607

 

 

 

43,329

 

 

 

(1,881

)

 

 

41,448

 

In-place lease

 

13.3

 

 

15,347

 

 

 

(656

)

 

 

14,691

 

 

 

15,044

 

 

 

(231

)

 

 

14,813

 

Tradenames

 

5.3

 

 

5,940

 

 

 

(2,435

)

 

 

3,505

 

 

 

9,423

 

 

 

(4,338

)

 

 

5,085

 

Non-compete agreements

 

1.0

 

 

770

 

 

 

(616

)

 

 

154

 

 

 

2,077

 

 

 

(1,775

)

 

 

302

 

Other

 

7.2

 

 

818

 

 

 

(102

)

 

 

716

 

 

 

802

 

 

 

(66

)

 

 

736

 

Total amortized intangible assets

 

 

 

 

103,101

 

 

 

(32,502

)

 

 

70,599

 

 

 

142,894

 

 

 

(49,157

)

 

 

93,737

 

Indefinite-lived intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business licenses

 

 

 

 

573

 

 

 

 

 

 

573

 

 

 

571

 

 

 

 

 

 

571

 

Other intangible assets

 

 

 

$

103,674

 

 

$

(32,502

)

 

$

71,172

 

 

$

143,465

 

 

$

(49,157

)

 

$

94,308

 

Intangible asset amortization expense was $6.4 million during 2020, $10.6 million during 2019, and $11.0 million during 2018. We recorded a non-cash impairment charge to intangible assets of $15.7 million during 2020 related our U.S audio-visual production business and $1.5 million during 2019 related to our United Kingdom audio-visual production business. The duration and impact of COVID-19 may result in additional future impairment charges as facts and circumstances evolve.

At December 31, 2020, the estimated future amortization expense related to intangible assets subject to amortization is as follows:

 

(in thousands)

 

 

 

 

Year ending December 31,

 

 

 

 

2021

 

$

5,216

 

2022

 

 

5,129

 

2023

 

 

4,466

 

2024

 

 

3,510

 

2025

 

 

2,218

 

Thereafter

 

 

50,060

 

Total

 

$

70,599