Company: PRSU
Filing Date: 2025-03-17
Form Type: 10-K
Source: 0000950170-25-040127
Chunk: 128

Company: Pursuit Attractions & Hospitality, Inc.
Filing Date: 2025-03-17
Form: 10-K
Item: Item 7
Chunk 128
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 an event occurs or circumstances change that would indicate the carrying value may not be recoverable through future operations. 

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. Our reporting units are defined, and goodwill is tested, at either an operating segment level or at the component level of an operating segment, 

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depending on various factors, including the internal reporting structure of the operating segment, the level of integration among components, the sharing of assets and other resources among components, and the benefits and likely recoverability of goodwill by the component’s operations.

For purposes of goodwill impairment testing, we use a discounted expected future cash flow methodology (income approach) to estimate the fair value of our reporting units. The estimates and assumptions regarding expected future cash flows (the most significant being revenue and EBITDA margins), discount rates, and terminal values require considerable judgment and are based on market conditions, financial forecasts, industry trends, and historical experience.

The most critical assumptions and estimates in determining the estimated fair value of our reporting units relate to the amounts and timing of expected future cash flows for each reporting unit and the reporting unit cost of capital (discount rate) applied to those cash flows. We estimate the assumed reporting unit cost of capital rates (discount rates) using a build-up method based on the perceived risk associated with the cash flows pertaining to the specific reporting unit. In order to assess the reasonableness of our fair value estimates, we perform a reconciliation of the aggregate fair values of our reporting units to our market capitalization.

As noted above, the estimates and assumptions regarding expected future cash flows, discount rates, and terminal values require considerable judgment and are based on market conditions, financial forecasts, industry trends, and historical experience. These estimates have inherent uncertainties, and different assumptions could lead to materially different results. Our goodwill balance was $103.3 million as of December 31, 2024 and $123.9 million as of December 31, 2023. The discount rates used in our most recent impairment analysis ranged from 11% to 15%. 

Goodwill was assigned to, and tested at, the reporting unit level. As a result of our most recent impairment analysis performed as of October 31, 2024, we recorded a non-cash goodwill impairment charge of $14.0 million associated with our Flyover attractions reporting