Revenue and Related Contract Costs and Contract Liabilities

3 Months Ended

Mar. 31, 2019

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 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, 2018	$	35,600
Cash additions		45,450
Revenue recognized		(14,945	)
Foreign exchange translation adjustment		236
Balance at March 31, 2019	$	66,341

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. Costs associated with preliminary contract activities (i.e. proposal activities) are expensed 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. The deferred incremental costs of obtaining and fulfilling contracts are included 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, 2018	$	21,478
Additions		18,484
Expenses		(13,295	)
Cancelled		(3	)
Foreign exchange translation adjustment		92
Balance at March 31, 2019	$	26,756

As of March 31, 2019, capitalized contract costs consisted of $2.2 million to obtain contracts and $24.6 million to fulfill contracts. We did not recognize an impairment loss with respect to capitalized contract costs for the three months ended March 31, 2019 or 2018.

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, 2019
(in thousands)	GES North America⁽¹⁾		GES EMEA⁽¹⁾		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⁽²⁾		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⁾

During the first quarter of 2019, we realigned GES’ organizational structure. As a result, we changed GES’ reportable segments to reflect how our chief operating decision maker regularly reviews and makes decisions regarding the allocation of resources. Accordingly, GES’ new reportable segments are GES North America and GES EMEA.

⁽²⁾	GES’ graphics product revenue is recognized over time as it is considered a part of the single performance obligation satisfied over time.

	Three Months Ended March 31, 2018
(in thousands)	GES North America⁽¹⁾		GES EMEA⁽¹⁾		Intersegment Eliminations			Total
Services:
Core services	$	180,525	$	28,985	$	—		$	209,510
Audio-visual		17,084		3,168		—			20,252
Event technology		8,035		3,274		—			11,309
Intersegment eliminations		—		—		(3,278	)		(3,278	)
Total services		205,644		35,427		(3,278	)		237,793
Products:
Core products		16,420		13,493		—			29,913
Total revenue	$	222,064	$	48,920	$	(3,278	)	$	267,706

Timing of revenue recognition:
Services transferred over time	$	205,644	$	35,427	$	(3,278	)	$	237,793
Products transferred over time⁽²⁾		11,369		3,329		—			14,698
Products transferred at a point in time		5,051		10,164		—			15,215
Total revenue	$	222,064	$	48,920	$	(3,278	)	$	267,706

Markets:
Exhibitions	$	145,818	$	39,935	$	—		$	185,753
Conferences		39,089		5,388		—			44,477
Corporate events		30,903		3,402		—			34,305
Consumer events		6,254		195		—			6,449
Intersegment eliminations		—		—		(3,278	)		(3,278	)
Total revenue	$	222,064	$	48,920	$	(3,278	)	$	267,706

⁽¹⁾

⁽²⁾	GES’ graphics product revenue is recognized over time as it is considered a part of the single performance obligation satisfied over time.

Pursuit

	Three Months Ended
	March 31,
(in thousands)	2019			2018
Services:
Admissions	$	3,525		$	3,579
Accommodations		2,418			1,705
Transportation		1,995			2,369
Travel planning		632			308
Intersegment eliminations		(185	)		(206	)
Total services revenue		8,385			7,755
Products:
Food and beverage		1,364			1,219
Retail operations		918			748
Total products revenue		2,282			1,967
Total revenue	$	10,667		$	9,722

Timing of revenue recognition:
Services transferred over time	$	8,385		$	7,755
Products transferred at a point in time		2,282			1,967
Total revenue	$	10,667		$	9,722

Markets:
Banff Jasper Collection	$	7,870		$	7,089
Alaska Collection		180			213
Glacier Park Collection		823			626
FlyOver		1,794			1,794
Total revenue	$	10,667		$	9,722