Emerald Expositions Events (EEX) Risk Analysis

Although the trade show market is highly fragmented, we currently face increased competition in certain of our industry sectors. Further, our high profit margins and low start-up costs could encourage new operators to enter the trade show business. Both existing and new competitors present an alternative to our product offerings, and if competition increases or others are successful in attracting away our exhibitors and attendees, it could have a material adverse effect on our business, financial condition, cash flows and results of operations.

We and third parties on our behalf rely on IT systems, networks, and services, including web-hosting platforms and internet sites, data hosting and processing facilities and tools, hardware (including laptops and mobile devices), software and technical applications and platforms, to collect and store, including by electronic means, certain personal, proprietary and other sensitive information, including payment card information that is provided to us through registration on our websites or otherwise in communication or interaction with us. These activities require the use of centralized data storage, including through third-party service providers. Data maintained by us or on our behalf in electronic form is always subject to sophisticated and evolving cybersecurity threats and security incidents, including breach, compromise, intrusion, tampering, theft, misappropriation or other malicious activity (such as ransomware, phishing attacks, social engineering and advanced persistent threats), all of which are continuing to occur in our industry, as well as the industries of our exhibitors, vendors and suppliers. We and our third party service providers have been subject to such attacks, the impact of which we do not currently believe will have a material effect on our business, financial conditions, cash flows or results of operations, and we may in the future continue to be subject to such attacks. For example, computer hackers have been and may be, in the future, able to develop and deploy viruses, worms or other malicious software programs that attack our websites or exploit security vulnerabilities in our websites and information systems. While we seek to learn from all attacks directed at us and implement remedial measures where necessary developed with cybersecurity experts, we cannot guarantee that such remedial measures will prevent material cybersecurity incidents in the future. Unauthorized access to or security breaches of our systems could result in the loss of data, loss of business, severe reputational damage adversely affecting customer or investor confidence, diversion of our management's attention, litigation, indemnity obligations, damages for contract breach, penalties for violation of applicable laws or regulations and significant costs for remediation that may include liability for stolen or lost assets or information and repair of system damage that may have been caused and other liabilities. Further, an actual or perceived security incident, such as penetration of our or our third-party vendors' networks, affecting personal or other sensitive information could subject us to business and litigation risk (e.g., under the California Consumer Privacy Act), or damage our reputation, including with exhibitors, sponsors and attendees. In addition, we are exposed to potentially heightened liability pursuant to the increasing and evolving SEC disclosure rules regarding material cybersecurity incidents. Despite our actions taken and programs implemented to manage our cybersecurity risk, we may fail to meet future disclosure obligations and/or may have our disclosures misinterpreted. As our business evolves digitally, we are using data more and more in our business operations. A cyber breach or loss of sensitive or valuable data, content or intellectual property could mean a loss of reputation and trust, losses for our shareholders, fines, regulatory reprimands and business interruption. Managing these impacts could be disruptive and could cause reputational damage if handled inadequately. Our ability to safeguard such personal information, business information, and other sensitive information is important to our business. We take these matters seriously and take significant steps to protect our stored information, including the implementation of systems and processes to thwart malicious activity and invest in protecting and securing our information. These protections are costly and require ongoing monitoring and updating as technologies change and efforts to overcome security measures become more sophisticated, including as a result of increasingly sophisticated AI tools becoming available. There can also be no assurance that these protections, including our timely mitigation, management and remediation of vulnerabilities will be fully implemented, complied with or effective in protecting our systems and information. Notwithstanding our efforts, implementation of our supporting controls could have coverage gaps and weaknesses, as well as the potential for human error, any of which could provide threat actors a window of time to exploit such weaknesses before they are addressed. The goal of our program is to manage risks in a prioritized fashion; however, control gaps and/or effectiveness, resource constraints, and execution failure can pose cybersecurity risk to us. In addition, although we work to continuously improve our internal controls and procedures on cybersecurity incident management, prevention, detection, mitigation, response, and recovery, we may be unsuccessful in detecting, reporting or responding to breaches or incidents in a timely manner, accurately assessing the severity of such an event, or sufficiently preventing, limiting, or containing harm arising out of an event. Further, we exercise only limited control over our third-party vendors, which increases our vulnerability to problems with services they provide. Exposure as a result of any of the above factors could have a material negative effect on our business, financial condition, and results of operations. While we maintain cyber insurance that may help provide coverage for certain data breaches or cybersecurity incidents, such insurance may not be adequate to cover the costs and liabilities related to them, which in some cases could materially and adversely impact our business, financial condition, cash flows and results of operations. In addition, our insurance policy may change as a result of such incidents or for other reasons, which may result in premium increases or the imposition of increased deductibles or co-insurance requirements.

Our business depends upon the ability and willingness of companies to attend our shows, and such attendance is sensitive to general political, economic and social conditions and corporate spending patterns. Consequently, general domestic and global conditions could affect our business, such as, among other things, the COVID-19 pandemic or other epidemics, instability in global economic markets and geopolitical environments, increased U.S. trade tariffs and trade disputes with other countries, fluctuations in interest rates and inflation and supply chain weaknesses. In addition, certain industry-specific conditions could affect our trade shows, conferences and other events. The longer a recession or economic downturn continues, or the longer a particular industry sector is impacted by macroeconomic headwinds, the more likely it becomes that our customers reduce their marketing and advertising or procurement budgets. Any material decrease in marketing or procurement budgets could reduce the demand for exhibition space or reduce attendance at our trade shows, conferences and other events, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.

We stage an increasing number of our trade shows outside of the United States and we intend to continue to expand our international presence in the future. For example, in recent years we have acquired trade shows that stage in the United Kingdom, Canada, Mexico and Japan, among other countries. As a company headquartered in the United States, conducting and expanding international operations subjects us to costs and risks that we may not generally face in the United States, including but not limited to: - exposure to foreign currency exchange rate risk;- the effects of tariffs, trade barriers and retaliatory trade measures;- managing and staffing international operations;- establishing relationships with channel partners in international locations;- increased travel, infrastructure and legal compliance costs associated with international locations;- requirements to comply with a wide variety of foreign and domestic laws and regulations associated with international operations;- potentially adverse tax consequences;- complexities implementing and enforcing cross-border information technology and security controls;- failure to recruit, onboard, build and retain a talented and engaged global workforce, and integrating personnel with diverse business backgrounds and organizational cultures;- difficulties entering new non-U.S. markets due to, among other things, consumer acceptance and business knowledge of these new markets;- increased financial accounting and reporting burdens and complexities; and - political, social and economic instability abroad, terrorist attacks and security concerns in general. If any of these risks were to materialize, our international operations and, consequently, our overall business, financial condition, cash flows and results of operations could be negatively affected.

The number of attendees and exhibitors at our trade shows may be affected by a variety of factors that are outside our control. Because many attendees and exhibitors travel to our trade shows via airplane, factors that depress the ability or desire of attendees and exhibitors to travel to our trade shows, including, but not limited to, an increased frequency of flight delays or accidents, outbreaks of contagious disease or the potential for infection (including COVID-19 and any new variants), increased costs associated with air travel, the imposition of heightened security standards or bans on visitors from particular countries outside the United States, delays in acquiring visas for travel to the United States, or acts of nature (including those that may be related to climate change or otherwise), such as earthquakes, storms, hurricanes, wildfires and other natural disasters, could have a material adverse effect on our business, financial condition, cash flows and results of operations. Physical risks from climate change may lead to an increase in the frequency, severity, or duration of certain adverse weather conditions and natural disasters such as hurricanes, tornadoes, earthquakes, storms, wildfires, droughts, extreme temperatures, or flooding, each of which could cause more significant business interruptions, increased costs, increased liabilities, and decreased revenue than what we have experienced in the past from such events. Moreover, outbreaks of contagious disease and acts of nature may depress the ability of Emerald employees to travel to and stage our trade shows, and also may affect our ability to successfully stage our trade shows once attendees and exhibitors arrive on location. For example, the COVID-19 pandemic and its consequences forced us to cancel or postpone a substantial portion of our event calendar for 2020 and 2021. Additionally, in October 2024, we canceled the remainder of a trade show in Florida due to adverse weather caused by Hurricane Milton after the show had commenced and some attendees had arrived. If similar future disasters or public health emergencies were to occur, our business, operations, and financial results could be negatively impacted. While we are generally insured against direct losses resulting from event cancellations due to circumstances outside of our reasonable control, our event cancellation insurance policies for policy years beginning in 2022 do not include coverage for losses due to the outbreak of communicable disease, including COVID-19, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.

Our success depends in part upon our ability to monitor changing market trends and to adapt our trade shows, acquire existing trade shows or launch new trade shows to meet the evolving needs of existing and emerging target audiences. The process of researching, developing, launching, relaunching and establishing profitability for a new trade show may lead to initial operating losses. Our strategy is to launch new trade shows from time to time in order to take advantage of these trends. Our efforts to adapt our trade shows, or to introduce new trade shows into our portfolio, in response to our perception of changing market trends, may not succeed, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.

We often enter into long-term sponsorship agreements with industry associations whereby the industry association endorses and markets our trade show to its members, typically in exchange for a percentage of the trade show's revenue. Our success depends, in part, on our continued relationships with these industry associations and our ability to enter into similar relationships with other industry associations. Although we frequently enter into long-term agreements with these counterparties, these relationships remain subject to various risks, including, among others: - failure of an industry trade association to renew a sponsorship agreement upon its expiration;- termination of a sponsorship agreement by an industry trade association in specified circumstances;- the willingness, ability and effectiveness of an industry trade association to market our trade shows to its members;- dissolution of an industry trade association and/or the failure of a new industry trade association to support us; and - the ability on the part of an industry trade association to organize a trade show itself. Any disruptions or impediments in these existing relationships, or the inability to establish a new relationship, could have a material adverse effect on our business, financial condition, cash flows and results of operations.

Our future effective income tax rates may be favorably or unfavorably affected by unanticipated changes in the valuation of our deferred tax assets and liabilities, by changes in our stock price, or by changes in tax laws or their interpretation. Many of the provisions enacted under the 2017 Tax Cuts and Jobs Act (which we refer to as the "TCJA"), which introduced significant changes to U.S. income tax law, are set to expire at the end of 2025. The Administration and Congress are actively considering various policy choices which may have the impact of changing, possibly materially, how we are taxed in comparison to how we are taxed today. It is unclear whether the provisions of the TCJA will be allowed to expire in 2025, which would cause a reversion to the provisions prior to the TCJA, or whether some or all of such provisions will be extended beyond 2025 by future legislation. The Trump administration has indicated a general intent to retain the TCJA provisions but whether Congress will agree to retain such provisions beyond 2025 and what modifications might be made thereto prior to the expiration of the TCJA provisions is uncertain. Accounting for the income tax effects of the TCJA has required significant judgments and estimates as well as accumulation of information not previously provided for in U.S. tax law. In addition, we are subject to the examination of our income tax returns by the Internal Revenue Service and other tax authorities. We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. These continuous examinations may result in unforeseen tax-related liabilities, which may harm our future financial results. On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 ("IRA") into law. The IRA establishes a 15% corporate minimum tax effective for taxable years beginning after December 31, 2022, and imposes a 1% excise tax on the repurchase after December 31, 2022 of stock by publicly traded corporations. We currently do not expect the tax-related provisions of the IRA to have a material impact on our financial results.

We are subject to substantial governmental regulations affecting the use of certain types of data in our business. These include, but are not limited to, data privacy and protection laws, regulations, policies, and contractual obligations that apply to the collection, transmission, storage, security, processing, retention, and use of personally identifiable information or personal data, which among other things, impose certain requirements relating to the privacy and security of such information. The data protection landscape is rapidly evolving in the United States, the European Union and elsewhere, including the European Union's General Data Privacy Regulation ("GDPR"). As our operations and business grow, we may become subject to or affected by new or additional data protection laws and regulations and face increased scrutiny or attention from regulatory authorities. Substantial expenses and operational changes may be required in connection with maintaining compliance with such laws, and even an unsuccessful challenge by customers or regulatory authorities of our activities could result in adverse publicity and could require a costly response from and defense by us. In addition, certain privacy laws are still subject to a high degree of uncertainty as to their interpretation, application and impact, and may require extensive system and operational changes, be difficult to implement, increase our operating costs, adversely impact the cost or attractiveness of the products or services we offer, or result in adverse publicity and harm our reputation. State-specific data privacy laws and regulations continue to evolve and each state imposes different requirements. For example, the California Consumer Privacy Act imposes certain legal obligations on our use and processing of personal information related to California residents and gives residents the right to bring certain actions against companies. Similar laws are now in effect in more than ten other states, and have been adopted or proposed throughout the United States, at both the federal and state level, that could impose new privacy and security obligations. Complying with emerging and changing requirements may cause us to incur substantial costs and make enhancements to relevant data practices. Noncompliance could result in significant penalties or legal liability having an adverse effect on our operations and financials.

We rely on certain key management personnel in the operation of our businesses. While we maintain long-term and emergency transition plans for key management personnel and believe we could either identify internal candidates or attract outside candidates to fill any vacancy created by the loss of any key management personnel, the loss of one or more of our key management personnel could have a negative impact on our businesses.

We, and to a greater extent, our exhibitors, use a limited number of outside contractors for decoration, facility set-up and other services in connection with our trade shows, and we and our exhibitors rely on the availability, capability and willingness of these contractors to provide services on a timely basis and on favorable economic and other terms. Notwithstanding our long-term contracts with many of these contractors, many factors outside our control, including but not limited to outbreaks of contagious disease and acts of nature (including those that may be related to climate change or otherwise), such as earthquakes, storms, hurricanes, wildfires and other natural disasters, could harm these relationships and the availability, capability or willingness of these contractors to provide these services on acceptable terms. The partial or complete loss of services from these contractors, or a significant adverse change in our or our exhibitors' relationships with any of these contractors, could result in service delays, reputational damage and/or added costs that could harm our business and customer relationships to the extent we or our exhibitors are unable to replace them in a timely or cost-effective fashion, which could have a material adverse effect on our business, financial condition, cash flows and results of operations. In addition, some facilities where we hold our trade shows require decorators, facility set-up and other service providers to use unionized labor. Any union strikes or work stoppages could result in delays in launching or running our trade shows and other events held at such facilities, reputational damage and/or added costs, which could have a material adverse effect on our business, financial condition, cash flows and results of operations.

We maintain business interruption, event cancellation, casualty, general commercial and umbrella and excess liability insurance, as well as policies relating to workers' compensation, director and officer insurance, property and product liability insurance, and cyber security insurance. Our insurance policies may not cover all risks associated with the operation of our business and may not be sufficient to offset the costs of all losses, lost sales or increased costs experienced during business interruptions or event cancellations. For example, in addition to the impact of COVID-19, we have experienced disruptions to events held in Florida due to hurricanes, most recently in October 2024, when we canceled the remainder of a trade show in Florida due to adverse weather caused by Hurricane Milton after the show had commenced and some attendees had arrived. We may be forced to cancel future trade shows in the event of other natural or man-made disasters. Additionally, our claims history due to COVID-19, combined with the increased frequency of natural disasters due to climate change or other factors, has resulted in increased event cancellation insurance premiums and higher deductibles, and we cannot guarantee that such premium increases will not continue in the future or that we will be able to renew our insurance policies or procure other desirable insurance on commercially reasonably terms, if at all. While we have been able to secure event cancellation insurance for the calendar years 2025 and 2026, this insurance policy does not include coverage for event cancellations due to the outbreak of communicable disease, including COVID-19, and due to wildfires in California. Losses and liabilities from uninsured or underinsured events and delay in the payment of insurance proceeds could have a material adverse effect on our financial condition and results of operations.