GOING
PLACES
2015 Annual Report
The Glacier Adventure
experience won a spot
in the TripAdvisor Hall of
Fame after receiving its
Certificate of Excellence
for the fifth straight year.
Viad generates revenue and shareholder value through
two distinct business groups: the Marketing & Events
Group (GES) and the Travel & Recreation Group (T&R).
GES is a global, full-service live events company
offering a comprehensive range of services to the
world’s leading brands and event organizers. T&R is a
collection of iconic destination travel experiences that
showcase the best of Banff, Jasper, Glacier, Denali and
Kenai Fjords National Parks. Viad is an S&P SmallCap
600 company.
GES expanded its
services with Emergency
Nurses Association to
include AV and event
accommodations.
GES partnered with
Tableau Software to
produce its conference
that brought together
12,000 data enthusiasts.
From sharing the best of
breathtaking, iconic natural and
cultural destinations to producing
live events around the world, Viad
is in the business of creating
powerful experiences. We’re going
places…come along!
The popular new Glacier
Skywalk attraction is a
great example of Viad’s
Refresh, Build, Buy growth
strategy in action.
VIAD CORP
1
2015 ANNUAL REPORT
MARKETING & EVENTS GROUP
GES is a leading global provider for live events, offering a comprehensive range of
services, including creative design, strategy, audio visual, show production and event
accommodations — all with an unrivaled global reach. With award-winning services and
innovative technology, we help our clients maximize performance and achieve their vision
through face-to-face experiences.
TRAVEL & RECREATION GROUP
Viad’s Travel & Recreation Group delivers exceptional guest experiences through its
world-class attractions, lodging, sightseeing and packaged tours — all set within iconic
natural and cultural destinations, including Banff, Jasper, Glacier, Denali and Kenai Fjords
National Parks. With a rich history and strong connection to the communities in which we
operate, we help our guests enjoy authentic, “bucket list” experiences.
VIAD CORP
2
2015 ANNUAL REPORT
Alaska Denali Travel
Brewster Travel
Canada
Glacier Park
GES
Viad
2015 FINANCIAL HIGHLIGHTS
.
0
5
6
0
,
1
$
.
0
9
8
0
1
$
.
3
3
5
9
$
3
.
1
9
$
.
6
0
9
$
.
7
9
6
$
5
7
.
1
$
6
4
.
1
$
5
1
.
1
$
%
9
8
2
.
%
8
7.
2
%
2
3
.
‘13
‘14
‘15
‘13
‘14
‘15
‘13
‘14
‘15
‘13
‘14
‘15
Revenue (1)
in millions
Adjusted Segment EBITDA (1,2)
in millions
Income Before Other Items (1,2)
per share
Debt-to-Capital Ratio (3)
(1) 2013 results from Glacier Park’s concession contract (which expired December 31, 2013) have been reclassified as discontinued operations.
(2) A reconciliation of this non-GAAP measure can be found on the inside back cover of this report.
(3) “Capital“ is defined as total debt and capital lease obligations plus total stockholders’ equity.
VIAD’S GLOBAL FOOTPRINT
11
Alaska Denali Travel
Brewster Travel
Canada
Glacier Park
45
GES
Viad
Corporate Offices
GES: Number of Offices
Countries Served
10
3
3
5
VIAD CORP
3
2015 ANNUAL REPORT
DEAR FELLOW SHAREHOLDERS
I am pleased to report that Viad delivered strong results for
2015, meeting the financial targets we laid out at the beginning
of the year. The company’s performance is rooted in our clear
and proven strategies, history of successful shareholder-
focused actions, and strong growth prospects. Our experienced
management team remains committed to shareholder value
creation — something Viad has a long history of accomplishing.
OUR PERFORMANCE
We finished an impressive year of growth and innovation
in 2015. Despite headwinds, including a revenue decline of
about $110 million from the combination of show rotation and
exchange rate variances, we were able to deliver adjusted
segment EBITDA of $90.6 million as compared to $91.3 million
in 2014. This performance reflects the strength of our
businesses, progress against our strategic growth plans, solid
industry fundamentals and our commitment to shareholder value
creation and customer service.
MARKETING & EVENTS GROUP HIGHLIGHTS
Our Marketing & Events Group (GES) benefited from same-
show growth, new business wins, and solid performance from
our 2014 acquisitions. Having broadened its suite of live event
services, GES is in a stronger, more competitive market position
than ever before — with increased opportunities to service
the needs of our customers and expand into under-penetrated
segments of the live events market.
Steve Moster
President and Chief Executive
Officer, Viad Corp
President, GES
VIAD CORP
4
2015 ANNUAL REPORT
Having broadened its suite of live event services, GES is in a stronger, more
competitive market position than ever before — with increased opportunities
to service the needs of our customers and expand into under-penetrated
segments of the live events market.
For more than 20 years,
GES has partnered
with the Entertainment
Software Association
to produce its globally-
recognized event E3.
For the year, GES delivered EBITDA of $54.8 million, which is
in line with 2014 despite a revenue headwind of about
$97 million from non-annual show rotation and exchange rates.
GES realized strong U.S. same-show growth of 8 percent, while
also benefiting from new business wins.
At GES, our strategy is to leverage our leading market position
within our core services to drive growth in adjacent areas that
offer higher margins and stronger growth prospects. In support of
this strategy, we acquired and integrated leading event technology
platforms N200 (registration) and onPeak (accommodations), as well
as Blitz, a leading provider of audio-visual services in the UK. These
acquisitions are helping to position GES as the preferred, global full-
service provider for the live events market. Through the strength of
our combined offerings and global footprint, we’ve had numerous
wins for 2016 and beyond — both from cross-selling our full range
of services and from securing new business within Corporate and
Consumer events.
We’ve made significant progress against our growth strategy
and we still see additional opportunities to add capabilities
in audio-visual and event technologies. We will continue to
differentiate our offerings and build strategic awareness of
GES in key market segments.
TRAVEL & RECREATION GROUP HIGHLIGHTS
Our Travel & Recreation Group (T&R) realized solid revenue
gains of 6.4 percent in local currency at Brewster, and 8 percent
at Alaska Denali Travel. Through that growth and our focus on
margin improvement, we were able to deliver EBITDA of
$35.8 million, which was essentially flat to 2014 despite
revenue headwinds of about $14 million from exchange rates
and the impact of forest fire activity at Glacier Park during
the peak season.
These solid results are a testament to the great experiences
that we deliver for our guests and the iconic locations in which
we operate. Industry trends overall are positive as visitation to
the national parks continues to grow. And we are driving higher
revenue from our hotels and attractions by increasing total
revenue per guest.
VIAD CORP
5
2015 ANNUAL REPORT
More than 3.5 million
visitors around the globe
have enjoyed Harry
PotterTM: The Exhibition,
produced by GES.
Our strategy for T&R is to scale the business to more than
twice its current size through our “Refresh, Build, Buy”
initiatives. Between 2010 and 2015, we added five lodging
assets and one attraction to our T&R portfolio through a
combination of acquisitions and internal development, helping
to grow revenue at a 10 percent cumulative annual growth rate
during that time.
We recently launched a major refresh project to renovate
and upgrade our leading attraction, the Banff Gondola. The
project is progressing well, and we’re excited to unveil the
new and improved experience later this year. We are also
refreshing other assets by incorporating additional interpretive
experiences into the Banff Lake Cruise and the Glacier Skywalk
and renovating the Banff International Hotel, the West Glacier
properties, and the Mount Royal Hotel to help drive higher
revenue per guest.
Additionally, we announced plans last quarter to streamline our
package tours and transportation services at Brewster. While
this will have a negative impact on 2016 revenue, it will free
up capital and other resources to drive growth in higher-margin
areas like our latest acquisitions.
Earlier this year, we completed two acquisitions for T&R that
bring a combination of world-class attractions and leading
hospitality assets in Jasper National Park in Canada and in
and around Kenai Fjords National Park and Denali National
Park in Alaska. These assets are a natural fit with our existing
operations, offering cross-selling opportunities and operational
synergies in geographies and service lines that we know well.
VIAD CORP
6
2015 ANNUAL REPORT
Maligne Lake Tours,
acquired in January 2016,
adds another world-class
attraction to Viad’s
T&R portfolio.
Between 2010 and 2015, we added five lodging
assets and one attraction to our T&R portfolio
through a combination of acquisitions and internal
development, helping to grow revenue at a 10 percent
cumulative annual growth rate during that time.
customers and opportunities for our employees, I want to thank the
entire Viad team for their contributions. And I want to thank you,
my fellow shareholders, for your confidence and investment in our
strategy. Viad is a company that is going places and we have a big
year ahead of us!
All my best,
Steve Moster
President & Chief Executive Officer
VIAD IS GOING PLACES: BUSINESS OUTLOOK
Looking ahead, we anticipate a significant jump in revenue and
profit, with consolidated segment operating income growth
in the range of 40 percent in 2016 as compared to 2015. This
increase reflects the benefits of cross-selling, new business
wins, same-show growth and positive show rotation at GES,
as well as continued favorable trends in park visitation and our
focus on capturing more revenue per guest at T&R.
We have every reason to be optimistic about 2016 and beyond.
GES is entering a three-year stretch of more favorable show
rotation, with an additional $50 million to $55 million in revenue
from non-annual events anticipated in 2016 relative to 2015.
And the contribution from non-annual events is expected to
remain relatively stable in 2017 and 2018, with only moderate
steps down in each of those years.
We have a clear strategy for both of Viad’s leading business
groups, and a strong balance sheet and cash flows that allow us
the flexibility to invest in that strategy. We will continue to pursue
acquisitions that are the right strategic fit and meet our return
requirements while also returning capital to shareholders through
our regular dividend and opportunistic share repurchases. This
balanced approach to capital allocation, coupled with the company’s
robust organic growth prospects, experienced management team
and leading market positions leave Viad well-poised to drive
shareholder value in the years to come.
In closing, I’m proud of the progress we are making to bolster GES’
competitive position and to scale our high-margin T&R business. As
we continue to increase value for our shareholders, benefits for our
VIAD CORP
7
2015 ANNUAL REPORT
VIAD CORP BOARD OF DIRECTORS & EXECUTIVE OFFICERS
BOARD OF DIRECTORS
8
1
4
5
3
2
7
6
1 Richard H. Dozer (1,3)
Chairman of the Board,
Viad Corp;
Former President, Arizona
Diamondbacks and Talking
Stick Arena
5 Steven W. Moster
President and Chief Executive
Officer, Viad Corp;
President, Global Experience
Specialists, Inc.
2 Andrew B. Benett (2)
3 Isabella Cunningham (1,2)
Global Chief Executive Officer,
Havas Worldwide;
Global Chief Executive Officer
and Global Chief Strategy
Officer, Havas Creative Group
Stan Richards Chair in
Advertising and Public Relations
at the Stan Richards School of
Advertising and Public Relations
of The University of Texas at
Austin
6 Robert E. Munzenrider (1,3)
Retired President, Harmon
AutoGlass
7 Margaret E. Pederson (2,3)
President and Chief Executive
Officer, Amirexx LLC
4 Edward E. Mace (1,3)
President and Chief
Executive Officer, Silverwest
Hotel LLC;
President, Mace Pacific
Holding Company, LLC
8 Joshua E. Schechter (2)
Former Executive Chairman of
Aderans America Holdings, Inc.;
Former Co-President of
Steel Partners Japan Asset
Management, LP
BOARD COMMITTEES
(1) Audit Committee | Chair: Robert E. Munzenrider
(2) Corporate Governance and Nominating Committee | Chair: Andrew B. Benett
(3) Human Resources Committee | Chair: Edward E. Mace
EXECUTIVE OFFICERS
Steven W. Moster
President & Chief
Executive Officer,
and President, GES
Deborah J. DePaoli
General Counsel
and Secretary
Ellen M. Ingersoll
Chief Financial Officer
Leslie S. Striedel
Chief Accounting
Officer
David W. Barry
President,
Travel & Recreation Group
VIAD CORP
8
2015 ANNUAL REPORT
As filed with the Securities and Exchange Commission on March 11, 2016
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2015
or
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
Commission file number: 001-11015
Viad Corp
(Exact name of registrant as specified in its charter)
erawaleD
State or other jurisdiction of
incorporation or organization
1850 North Central Avenue, Suite 1900
anozirA ,xineohP
(Address of principal executive offices)
0599611-63
(I.R.S. Employer
Identification No.)
5654-40058
(Zip Code)
Registrant’s telephone number, including area code:
(602) 207-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, $1.50 par value
Name of each exchange
on which registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. Yes x No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files.) Yes x No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. o
Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):
x
Large accelerated filer
o
Non-accelerated filer
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
The aggregate market value of the Common Stock (based on its closing price per share on such date) held by non-affiliates on the last business day
of the registrant’s most recently completed second fiscal quarter (June 30, 2015) was approximately $534 million.
Registrant had 20,173,803 shares of Common Stock ($1.50 par value) outstanding as of January 31, 2016.
Accelerated filer
Smaller reporting company
o
o
Documents Incorporated by Reference
A portion of the Proxy Statement for the Annual Meeting of Shareholders of Viad Corp, which is scheduled to be held on May 19, 2016, is
incorporated by reference into Part III of this Annual Report.
INDEX
Part I
Part II
Part III
Item 1. Business .........................................................................................................................................................
Item 1A. Risk Factors ...................................................................................................................................................
Item 1B. Unresolved Staff Comments ..........................................................................................................................
Item 2.
Properties .......................................................................................................................................................
Item 3. Legal Proceedings ..........................................................................................................................................
Item 4. Mine Safety Disclosures ................................................................................................................................
Other.
Executive Officers of Registrant ....................................................................................................................
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities ........................................................................................................................................................
Item 6.
Selected Financial Data ..................................................................................................................................
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations .........................
Item 7A. Quantitative and Qualitative Disclosures About Market Risk .......................................................................
Item 8.
Financial Statements and Supplementary Data ..............................................................................................
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ........................
Item 9A. Controls and Procedures ................................................................................................................................
Item 9B. Other Information ..........................................................................................................................................
Item 10. Directors, Executive Officers and Corporate Governance .............................................................................
Item 11. Executive Compensation ...............................................................................................................................
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ......
Item 13. Certain Relationships and Related Transactions, and Director Independence ...............................................
Item 14. Principal Accounting Fees and Services ........................................................................................................
Part IV
Item 15. Exhibits, Financial Statement Schedules .......................................................................................................
42
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16
17
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21
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40
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42
PART I
Item 1. BUSINESS
Viad Corp (“Viad” or the “Company”) is in the business of creating experiences with operations in the United States,
Canada, the United Kingdom, continental Europe, and the United Arab Emirates. Viad is committed to providing best in class
experiences to its clients, customers, and guests by offering products and services designed to meet their current and future
needs. Viad operates through two main business groups: the Marketing & Events Group and the Travel & Recreation Group.
The Marketing & Events Group is a world-class live event service provider to some of the most visible and influential
events and global brands. The Travel & Recreation Group provides experiential travel services in iconic locations which
enjoy perennial demand.
The Marketing & Events Group accounted for 90 percent of Viad’s 2015 consolidated revenue and 60 percent of
Viad’s 2015 consolidated Adjusted Segment EBITDA. The Travel & Recreation Group accounted for 10 percent of Viad’s
2015 consolidated revenue and 40 percent of Viad’s 2015 consolidated Adjusted Segment EBITDA. Adjusted Segment
EBITDA is defined as segment operating income before non-cash depreciation and amortization and integration costs, if any.
For further information on this forward-looking, non-GAAP financial measure, see the “Non-GAAP Measures,” included in
Management’s Discussion and Analysis of Financial Condition and Results of Operations (Part II, Item 7 of this Annual
Report on Form 10-K).
2015 REVENUE
$1.1B
10%
90%
ADJUSTED SEGMENT EBITDA
$90.6M
40%
60%
Marketing & Events
Travel & Recreation
MARKETING & EVENTS GROUP
The Marketing & Events Group, comprised of Global Experience Specialists, Inc. and affiliates (“GES”), is a global,
full-service provider for live events that produces exhibitions, congresses and conferences, corporate events, consumer
events, exhibits, and entertainment experiences. GES provides a comprehensive range of live event services, including
official show services, audio-visual services, cutting-edge creative and design, strategic marketing and measurement services,
registration, and event accommodations – all with a global reach. GES’ National Servicenter® has been recognized with
certification under the J.D. Power and Associates Certified Call Center Program℠ for the past seven years, and GES was
named one of the “World’s 50 Largest Agency Companies” for the sixth year in a row by Ad Age.
GES’ clients include event organizers and corporate brand marketers. Corporate brand marketers include exhibitors and
domestic and international corporations that want to promote their brands, services and innovations, feature new products,
and build business relationships. GES serves corporate brand marketers when they exhibit at shows and when GES is
engaged to manage their global exhibit program or produce their proprietary corporate events. See “Item 1A - Risk Factors -
The failure of a large client to renew its services contract or the loss of business from exhibition facilities could adversely
1
impact revenue” for a discussion of the risks related to the Marketing & Events Group’s client relationships, which is
incorporated herein by reference.
The Marketing & Events Group is divided into two reportable segments based on geography: The Marketing & Events
U.S. Segment (the “U.S. Segment”) and the Marketing & Events International Segment (the “International Segment”).
The U.S. Segment holds a leading position in the U.S. with full-service operations in every major exhibition
market in the U.S., including Las Vegas, Nevada; Chicago, Illinois; Orlando, Florida; New York, New York; and
Los Angeles, California.
The International Segment holds leading positions in Canada, Europe, and the Middle East. The International
Segment has full-service operations at many of the most active and popular destinations and venues, including
seven cities in Canada, six cities in the United Kingdom, one city in Germany, two cities in the United Arab
Emirates, and two cities in the Netherlands.
As described in further detail in the following table, the U.S. Segment and the International Segment both provide a full
suite of services for event organizers and exhibitors across four categories of live events: (i) Exhibitions; (ii) Congresses and
Conferences; (iii) Corporate Events; and (iv) Consumer Events (collectively, “Live Events”):
LIVE EVENTS
Exhibitions
DEFINITION
Expo/trade show/exhibition with the primary purpose
of facilitating business-to-business and business-to-
consumer sales and market ng.
i
Congresses and Conferences
Convention/meeting with the primary purpose of
Corporate Events
Consumer Events
facilitating attendee education. An expo or trade show
may be held in conjunction to further facilitate attendee
education.
Expo/trade show vent/meeting with the primary
purpose of e
audiences.
aging, educating, and informing key
ng
/e
Event with the primary purpose of entertaining,
educating, or creating a marketing experience targeting
end consumers.
% GES 2015
REVENUE
63%
25%
7%
5%
Within each of the above four Live Events categories, the Marketing & Events Group delivers variations of four types
of services to event organizers and exhibitors: (i) Core Services; (ii) Event Accommodations; (iii) Audio-Visual; and (iv)
Registration and Data.
GES Revenue Mix
Core Services 93%
Event Accommodations 3%
Audio-Visual (AV) 3%
Registration and Data 1%
2
Core Services
Core Services
GES provides official contracting services and products to event organizers and exhibitors during Live
Events in both the U.S. Segment and the International Segment. Contracting services and products are
provided primarily to Exhibitions and to a lesser degree to Congresses and Conferences, Corporate
Events, and Consumer Events. For the U.S. Segment, Core Services accounted for 63 percent of Viad’s
2015 consolidated revenue, as compared to 66 percent in both 2014 and 2013. For the International
Segment, Core Services accounted for 23 percent of Viad’s 2015 consolidated revenue, as compared to
23 percent and 25 percent in 2014 and 2013, respectively.
The U.S Segment and the International Segment generally provide the same services and products. The following is a
list of services and products provided to Live Event organizers and exhibitors that are generally exclusive or discretionary:
Services/Products Provided to
Event Organizers
Services/Products Provided to Exhibitors
Exclusive Services:
General event management
Exclusive Services:
Material handling
Di
s
cretionary Service
s:
Creative design and strategy
Overhead and booth rigging
Temporary electrical, lighting
and plumbing
Cleaning
Planning and consultation
Concept design and layout
Carpeting and flooring
Online management tools
Show traffic analysis
Marketing and strategy
Overhead and booth rigging
Temporary electrical, lighting, and
plumbing
Cleaning
Exclusive Products:
Graphics and signage
Common area structures
Integrated marketing, including pre- and post-
event communications
Event surveys
Return on investment analysis
Online management tools
Attendee and exhibit booth traffic analysis
Staff training
Logistics and freight-forwarding
Storage and refurbishment of exhibits
Booth furnishings, carpeting
In-house installation and dismantling
Tradeshow program management
Discretionary Products:
Custom exhibit design and construction
Portable and modular exhibits and design
Graphics and signage
Under various agreements with event organizers of Live Events, GES serves as the official services contractor and
provides the services and products listed above under “Services/Products Provided to Event Organizers.” As the official
services contractor, GES is designated as the exclusive provider of certain services to exhibitors participating in a Live Event.
This designation provides exhibitors with a single point of contact to facilitate a timely, safe, and efficient move-in and
move-out of a Live Event and to facilitate an organized, professional, during-show experience. Whether or not GES is the
official services contractor of a Live Event, GES competes with other service providers to sell discretionary services to
exhibitors. GES also offers discretionary services, combined with complete event program management, including creative
design, strategy, and planning to corporate brand marketers across all Live Events in which they participate.
3
Event
Accommodations
With the acquisition of onPeak LLC and Travel Planners, Inc. (collectively, “onPeak”) in October
2014, and Travel Planners, Inc.’s subsequent merger into onPeak LLC, the U.S. Segment of GES
positioned itself as the leading provider of Event Accommodations services in North America. As the
distributor of exclusive accommodations services for a Live Event, GES is responsible for
researching and recommending local hotels, securing room blocks, marketing reserved room blocks
to event attendees and exhibitors, managing attendee and exhibitor reservations, and addressing any
accommodations concerns during the show. Event Accommodations offer GES the unique potential
to serve multiple Live Event participants through a single integrated service network. Event attendees
and exhibitors benefit from GES’ accommodations services by receiving convenient and affordable
hotel accommodations. Additionally, event organizers benefit from GES’ management of complex
hotel booking administration before, during, and after the event. GES also helps drive revenue per
available room for hotels by acting as a direct sales channel to high-value, professional guests. For
the U.S. Segment, Event Accommodations accounted for 3 percent of Viad’s 2015 consolidated
revenue, as compared to 1 percent in 2014 and none in 2013.
Audio-Visual
Registration
and Data
In both the U.S. Segment and the International Segment, GES offers a variety of audio-visual (“AV”)
and digital services for Live Events and corporate brand marketers. GES combines the science of
innovative digital solutions with the latest AV technology and superior service to create award-
winning attendee engagements. Services provided include digital design and content, media
production, content testing, equipment rental, staging, and creative services. With the acquisition of
Blitz Communications Group Limited and its affiliates (collectively, “Blitz”) in September 2014,
GES obtained a prominent position in the United Kingdom AV market and delivery services in
continental Europe. For the U.S. Segment, AV accounted for 1 percent of Viad’s 2015 consolidated
revenue, as compared to less than 1 percent in 2014 and none in 2013. For the International Segment,
AV accounted for 2 percent of Viad’s 2015 consolidated revenue, as compared to 1 percent in 2014
and none in 2013.
In the International Segment, GES provides event registration and data services. GES positioned
itself as a leading provider of registration services for a Live Event with the acquisition of N200
Limited and its affiliates (collectively, “N200”) in November 2014. As Europe’s leading software-as-
a-service event registration and data intelligence service provider, N200’s Visit Registration platform
is used by 258 clients to stage over 1,100 events across 41 countries. N200 also supports 57,000
exhibitors who use its Connect platform to capture and manage sales leads at events. The N200
acquisition enables GES to expand and cross-sell its service and technology offering globally,
reaching new markets, clients, and customers. For the International Segment, registration and data
accounted for 1 percent of Viad’s 2015 consolidated revenue, as compared to less than 1 percent in
2014 and none in 2013.
4
Seasonality and Show Rotation
For both the U.S. Segment and the International Segment, exhibition and event activity can vary significantly from
quarter to quarter and year to year depending on the frequency and timing of shows, as some shows are not held each year
and some may shift between quarters. The U.S. Segment generally reports its highest revenue during the first and second
quarters. The International Segment generally reports its highest revenue during the second and fourth quarters. The show
rotation metric refers to the net change in revenue from 2014 to 2015 due to show movement between quarters and years.
Show rotation refers to shows that occur less frequently than annually, as well as annual shows that shift quarters from one
year to the next. See “Item 1A – Risk Factors – Viad’s businesses are seasonal, which causes results of operations to fluctuate
and makes results of operations particularly sensitive to adverse events during peak periods” and “Item 1A – Risk Factors -
Show rotation impacts overall profitability and makes comparisons between periods difficult,” which are incorporated herein
by reference.
Total Marketing & Events Revenue
(in millions)
2015 Show Rotation Revenue
(in millions)
300
250
200
150
100
50
0
20
0
-20
-40
-60
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2015
2014
Competition
For both the U.S. Segment and the International Segment, GES generally competes across all classes of services and all
markets in the Live Events industry on the basis of discernible differences, value, quality, price, convenience, and service.
GES has a competitive advantage through its worldwide network of resources, experienced personnel, pioneering service
programs and offerings, first class execution, proprietary technology platforms, and financial strength. All known U.S.
competitors and most international competitors are privately held companies that provide limited public information
regarding their operations. The primary competitor for GES within its Core Services is The Freeman Company (a privately
held company); however, there is substantial competition from a large number of service providers in the other categories of
service offerings.
Growth Strategy
GES is committed to becoming the preferred global, full-service provider for Live Events, with further reach to
Exhibitions, Congresses and Conferences, Corporate Events, and Consumer Events. GES has uniquely combined the art of
high-impact creativity, service, and expertise with the science of easy-to-use technology, strategy, and worldwide logistics to
help clients gain a greater return at their events and enhance the exhibitor experience.
Global Reach. Leverage global capabilities and large customer base to drive continued growth in new services
and other Live Events;
Full-Service Provider. Growth of adjacent services to create a unique and integrated offering to deepen client
relationships, expand client base, and increase share of total event spend; and
Live Events. Growth of exhibition business and penetration into new events to extend industry leadership and
leverage capabilities.
5
With its strategic acquisitions in 2014, GES made significant progress creating the most comprehensive suite of
services for the Live Events industry. GES extended its AV services beyond North America with the acquisition of Blitz,
positioned itself as a leading event registration and data intelligence services provider in Europe with the acquisition of N200,
and acquired a leading event accommodations company, onPeak. In 2015, these acquisitions enhanced overall
competiveness, facilitated growth in under-penetrated areas, and formed a basis for a data platform. The Company continues
to pursue opportunities to acquire businesses with proven products and services that complement, enhance, or expand current
businesses or offer growth opportunities.
Recent Developments of the Marketing & Events Group
Successful integration of 2014 acquisitions. Successful integration of Blitz, N200, and onPeak.
Cross-selling opportunities. Effectively positioned to cross-sell an increasingly comprehensive suite of service
offerings with a convenient approach to service delivery that differentiates GES from its competition.
Registration and data services planned entrance in U.S. market. Planned entrance of registration and data
services in the U.S market in 2016.
TRAVEL & RECREATION GROUP
The Travel & Recreation Group offers guests distinctive and world renowned experiences in iconic natural and cultural
destinations in North America through its collection of unique hotels, lodges, recreational attractions, and transportation
services. It draws its customers from major markets, including Canada, the United States, the United Kingdom,
Australia/New Zealand, Asia, and Europe. It markets directly to consumers, as well as through distribution channels that
include tour operators, tour wholesalers, destination management companies, and retail travel agencies and organizations.
The Travel & Recreation Group is comprised of four lines of business: (i) Hospitality; (ii) Attractions; (iii) Package
Tours; and (iv) Transportation. These four lines of business work together, driving economies of scope and meaningful scale
in and around the iconic destinations of Banff, Jasper and Waterton Lakes National Parks in Canada, and Glacier and Denali
National Parks in the United States. The Travel & Recreation Group is composed of Brewster Inc. (“Brewster”), Glacier
Park, Inc. (“Glacier Park”), and Alaskan Park Properties, Inc. (“Alaska Denali Travel”).
Brewster, a wholly-owned subsidiary of Viad, is a leading travel and tourism provider
in the Canadian Rockies in Alberta and in other areas of Western Canada.
Glacier Park, an 80 percent owned subsidiary of Viad, is an owner and operator of
lodging properties located in and around Glacier National Park in Montana and
Waterton Lakes National Park in Alberta, Canada, with a leading share of rooms in that
market.
Alaska Denali Travel, a wholly-owned subsidiary of Viad, is a travel and tourism
provider in Denali National Park and Preserve in Alaska.
6
Brewster, Glacier Park, and Alaska Denali Travel have the following lines of business:
Brewster
Hospitality (# of rooms)
Mount Royal Hotel (135)
Banff International Hotel (162)
Glacier View Inn (32)
Attractions (1)
Banff Gondola
Columbia Icefield
Glacier Adventure
Glacier Skywalk
Banff Lake Cruise
Package Tours (2)
Inbound package tours
Corporate event
management services
Transportation (2)
Sightseeing tours
Airporter services
Charter motorcoach
services
Glacier Park
St. Mary Lodge (116)
Glacier Park Lodge (162)
Grouse Mountain Lodge (144)
Prince of Wales Hotel (86)
West Glacier Motel & Cabins (32)
Motel Lake McDonald (27)
Apgar Village Lodge (48)
Denali Backcountry Lodge (42)
Denali Cabins (46)
Alaska Denali
Travel
(1) On January 4, 2016, Brewster acquired the business of Maligne Tours Ltd. (“Maligne Lake Tours”), which offers
Inbound package tours Denali Backcountry
Adventure
sightseeing boat tours on Maligne Lake in Jasper National Park.
(2) During 2016, Brewster will begin exiting third party tour and travel products and summer season charter transportation
services.
Hospitality
The Travel & Recreation Group provides lodging accommodations, food and beverage services, and
retail operations through its collection of unique hotels and lodges varying from hikers’ cabins to hotel
suites.
Mount Royal Hotel and the Banff International Hotel are located in the heart of Banff
National Park in downtown Banff, Alberta, Canada.
Glacier View Inn is located on the Columbia Icefield between Lake Louise and Jasper National
Park.
St. Mary Lodge is located outside the east entrance of Glacier National Park in St. Mary,
Montana.
Glacier Park Lodge is located in East Glacier, Montana.
Grouse Mountain Lodge is located near Glacier National Park in Whitefish, Montana.
Prince of Wales Hotel is located in Waterton Lakes National Park, Alberta, Canada.
West Glacier Motel & Cabins are located in West Glacier, Montana.
Motel Lake McDonald and the Apgar Village Lodge are located inside Glacier National Park.
Denali Backcountry Lodge is located in the heart of the Denali National Park.
Denali Cabins are located near the entrance to the Denali National Park.
7
Attractions
Brewster owns and operates the following four attractions in the Canadian Rocky Mountains:
The Banff Gondola transports visitors to an elevation of over 7,000 feet above sea level to the
top of Sulphur Mountain in Banff, Alberta, Canada, offering an unobstructed view of the
Canadian Rockies and overlooking the town of Banff and the Bow Valley. Brewster began an
upper terminal redevelopment project in September 2015, which will result in 25 percent more
square footage, an improved layout, optimized food and beverage and retail space, and new
interpretive experiences. It is scheduled to reopen in phases from May 2016 through August
2016.
The Columbia Icefield Glacier Adventure is a tour of the Athabasca Glacier on the Columbia
Icefield, and provides customers the experience to view one of the largest accumulations of ice
and snow south of the Arctic Circle. Icefield customers ride in an “Ice Explorer,” a unique
vehicle specially designed for glacier travel.
The Glacier Skywalk is a 1,312-foot guided interpretive walkway with a 98-foot glass-floored
observation area overlooking the Sunwapta Valley, in close proximity to the Company’s
Columbia Icefield Glacier Adventure attraction in Jasper National Park, Alberta, Canada. The
Glacier Skywalk attraction, which opened in May 2014, has experienced robust visitor traffic and
continues to win awards and receive international recognition for its innovative design and
environmentally sound architecture.
The Banff Lake Cruise provides customers a unique sightseeing tour experience through
interpretive boat cruises on Lake Minnewanka and the scenic Canadian Rockies. The Banff Lake
Cruise operations are located adjacent to the town of Banff and include boat tours, small boat
rentals, and charter fishing.
Package Tours
Brewster’s inbound package tour operations currently offer package tours that feature Brewster’s
er also offers a full suite of corporate and event
attractions, transportation services, and hotels. Brewst
management services for meetings, conferences, incentive travel, sports, and special events. Event-
team building,
related service offerings
accommodations, event management, theme development, production, and AV services. During 2015,
Brewster’s package tours offered third party tour and travel products; however, to align with its goal o
f
overall profit margin, Brewster will begin phasing out
delivering premium experiences and improving
these products in 2016. Alaska Denali Travel provides complete travel planning services and vacation
packages throughout Alaska.
include staffing, of
tours/activities,
f-site events,
8
Brewster’s transportation operations currently include sightseeing tours, airport shuttle services, and
charter motorcoach services. Brewster’s sightseeing services and airport express shuttle services
include seasonal half- and full-day tours from Calgary, Banff, Lake Louise, and Jasper, Canada.
Brewster’s charter business operates a fleet of luxury motorcoaches, available for groups of any size,
for travel throughout the Canadian provinces of Alberta and British Columbia. During 2015, Brewster
operated the charter business year-round. Beginning in 2016, Brewster will begin exiting certain low-
margin, capital-intensive charter businesses in the summer season to improve overall profitability and
return on invested capital. Alaska Denali Travel offers unique sightseeing tours in and around Denali
National Park.
Transportation
Seasonality
The Travel & Recreation Group experiences peak activity during the summer months. During 2015, 87 percent of the
Travel & Recreation Group’s revenue was earned in the second and third quarters. See “Item 1A – Risk Factors – Viad’s
businesses are seasonal, which causes results of operations to fluctuate and makes results of operations particularly sensitive
to adverse events during peak periods,” which is incorporated herein by reference.
Travel & Recreation 2015 Revenue
(in millions)
80
70
60
50
40
30
20
10
0
Q1
Q2
Q3
Q4
Competition
The Travel & Recreation Group generally competes on the basi
s of location, uniqueness of facilities, service, quality,
ge
and price. Competition exists both locally and regionally across all four lines of business. The hospitality business has a lar
both individual and tour groups) across the United States and
number of competitors and competes for leisure travelers (
Canada. The Travel & Recreation Group has a competitive advantage through its distinctive attractions and the iconic
destinations of its assets.
Growth Strategy
The Travel & Recreation Group remains focused on deliver
ing powerful experiences while growing and enhancing its
unique portfolio of integrated tourism assets through its Refresh-Build-Buy growth initiatives.
Refresh. Refresh assets to optimize market position and maximize returns;
Build. Build new assets that create new revenue streams with economies of scale and scope; and
Buy. Buy strategic assets that drive economies of scale and scope with strong returns.
The Travel & Recreation Group continued to make progress with its Refresh-Build-Buy growth initiatives by
commencing a major renovation of the Banff Gondola and upgrades of the Banff International Hotel, both of which are
scheduled for completion in 2016. The Glacier Skywalk continues to win awards and receive international recognition for its
innovative design and environmentally sound architecture. The Travel & Recreation Group also complemented its existing
assets and reinforced its position as the Gateway to Glacier National Park with the acquisition of the West Glacier Motel &
9
Cabins, the Apgar Village Lodge and related land, food and beverage services, and retail operations (collectively, the “West
Glacier Properties”) in 2014. The Company continues to search for opportunities to acquire high return tourism assets in
iconic natural destinations that enjoy perennial demand, bring meaningful scale and market share, and offer cross-selling
advantages with a combination of attractions and hotels.
Recent Developments of the Travel & Recreation Group
Successful integration of the West Glacier Properties. The West Glacier Properties acquisition was
successfully integrated, positioning the Company to deliver long-term value to its shareholders.
Renovation of the Banff Gondola. The Travel & Recreation Group began the redevelopment project of the
Banff Gondola in September 2015. This renovation will feature 25 percent more square footage, including an
8,000 square foot rooftop viewing deck and an exterior climbing wall. The renovation will also include enhanced
retail and dining offerings, a state of the art interpretive area including new experiential areas such as a high
definition theater. It is scheduled to reopen in phases from May 2016 through August 2016.
Acquisition of Maligne Lake Tours. On January 4, 2016, Brewster acquired the business of Maligne Lake
Tours, which offers sightseeing boat tours on a picturesque glacial lake. The Maligne Lake Tours acquisition
strengthens the Travel & Recreation Group’s presence in the Jasper National Park area and adds another world-
class attraction to its portfolio of services.
Financial information on Viad’s reportable segments and geographic areas is contained in Note 22 – Segment
Information of the Notes to Financial Statements (Part II, Item 8 of this Annual Report on Form 10-K).
Intellectual Property
Viad and its subsidiaries own or have the right to use registered trademarks and trademarks pending registration, used
in their businesses, including Global Experience Specialists & design®, GES®, GES Servicenter®, GES National
Servicenter®, GES MarketWorks®, The Art and Science of Engagement®, Trade Show Rigging TSR®, TSE Trade Show
Electrical & design®, Earth Explorers®, Compass Direct®, ethnoMetrics®, eXPRESSO®, FIT®, eco-sense®, Alaska Denali
Travel®, Alaska Denali Escapes®, Denali Backcountry Adventure®, Denali Backcountry Lodge®, and Denali Cabins®. Viad
and its subsidiaries also own or have the right to use many registered trademarks and trademarks pending registration outside
of the United States, including GES®, ShowTech®, Brewster Travel Canada & design®, Brewster Attractions Explore &
design®, Brewster Hospitality Refresh & design®, Glacier Skywalk® and escape.connect.refresh.explore®. United States
trademark registrations are for a term of 10 years and are renewable every 10 years as long as the trademarks are used in the
regular course of business.
The Company owns patents that it believes provide competitive advantages in the marketplace for its exhibit and
exhibition services. Its patented technology relating to a modular structure having a load-bearing surface provides efficiencies
and cost savings in the design, manufacture, assembly, take down, and maintenance of displays and exhibitions. Its patented
invention relating to a surface-covering installation tool and method not only reduces direct labor costs, but provides
improved worker safety. The Company also owns a number of design patents for its retail merchandising units. United States
utility patents are currently granted for a term of 20 years from the date a patent application is filed and United States design
patents are currently granted for a term of 14 years from the date granted. The Marketing & Events Group has extensive
design libraries with copyright protections and owns copyright registrations for a number of the designs within its design
libraries. Copyright protection for such work is 95 years from the date of publication or 120 years from creation, whichever is
shorter.
Although Viad believes that certain of its patents, trademarks, and copyrights have substantial value, it does not believe
that the loss of any one of those patents, trademarks, or copyrights would have a material adverse effect on its financial
condition or results of operations, or the financial condition or results of operations of any of its reporting segments.
Government Regulation and Compliance
Compliance with legal requirements and government regulations represents a normal cost of doing business. The
principal regulations affecting the day-to-day businesses are rules and regulations relating to transportation (such as
regulations promulgated by the U.S. Department of Transportation and its state counterparts), employees (such as regulations
implemented by the Occupational Safety and Health Administration, equal employment opportunity laws, guidelines
implemented pursuant to the Americans with Disabilities Act, and general federal and state employment laws), unionized
labor (such as guidelines imposed by the National Labor Relations Act), and U.S. and Canadian regulations relating to
national parks (such as regulations established by Parks Canada, the U.S. Department of the Interior, and the U.S. National
Park Service).
10
Some of Viad’s current and former businesses are subject to U.S. federal and state environmental regulations, including
laws enacted under the Comprehensive Environmental Response, Compensation and Liability Act, or its state law counterparts.
Compliance with federal, state and local environmental, health and safety provisions, including, but not limited to, those
regulating the discharge of materials into the environment and other actions relating to the environment, have not had, and are
not expected to have, a material effect on Viad’s capital expenditures, competitive position, financial condition or results of
operations. See “Item 1A - Risk Factors - Liabilities relating to prior and discontinued operations may adversely affect results of
operations” and Note 21 – Litigation, Claims, Contingencies, and Other of the Notes to the Consolidated Financial Statements
(Part II, Item 8 of this Annual Report on Form 10-K) for a discussion of the risks related to liabilities arising from the
Company’s compliance with federal, state, and local environmental laws, which are incorporated herein by reference.
Employees
Viad’s businesses had 4,285 employees as of December 31, 2015 as follows:
Number of
Employees
Regular Full-Time
Employees Covered by
Collective Bargaining
Agreements
Marketing & Events Group .......................................................................................
Travel & Recreation Group ......................................................................................
Viad Corporate and Shared Services Group .............................................................
Total ....................................................................................................................
3,634
513
138
4,285
1,113
109
—
1,222
Viad believes that relations with its employees are good and that collective-bargaining agreements expiring in 2016
will be renegotiated in the ordinary course of business without a material adverse effect on Viad’s operations.
Viad is governed by a Board of Directors comprised of seven non-employee directors and one employee director, and
has an executive management team consisting of six executive officers.
Financial Information about Restructuring Charges
Refer to Note 19 - Restructuring Charges of the Notes to Consolidated Financial Statements (Part II, Item 8 of this
Annual Report on Form 10-K) for information regarding restructuring charges.
Financial Information about Segments
Refer to Note 22 - Segment Information of the Notes to Consolidated Financial Statements (Part II, Item 8 of this
Annual Report on Form 10-K) for segment financial information.
Financial Information about Geographic Areas
Refer to Note 22 - Segment Information of the Notes to Consolidated Financial Statements (Part II, Item 8 of this
Annual Report on Form 10-K) for geographic area financial information.
Available Information
Viad’s website address is www.viad.com. All of Viad’s filings with the Securities and Exchange Commission (“SEC”),
including Viad’s Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and
amendments to those reports, are available free of charge on Viad’s website as soon as reasonably practicable after they are
electronically filed with, or furnished to, the SEC. The information contained in Viad’s website is neither a part of, nor
incorporated by reference into, this Annual Report on Form 10-K. In addition, the public may read and copy materials that
Viad filed with the SEC at the SEC’s public reference room located at 100 F Street, N.E., Washington, D.C. 20549.
Information on the operation of the public reference room can be obtained by calling the SEC at 1-800-SEC-0330. The SEC’s
website address is www.sec.gov.
Viad’s investor relations website is http://viad.investorroom.com/ and includes key information about the Company’s
corporate governance initiatives, including its Corporate Governance Guidelines, charters of the committees of the Board of
Directors, Code of Ethics, and information concerning Viad’s Board of Directors and methods for communicating with
directors.
11
Item 1A. RISK FACTORS
Viad’s results of operations are subject to known and unknown risks. As a result, past financial performance and
historical trends may not be reliable indicators of future performance.
Completed acquisitions may not perform as anticipated or be integrated as planned. Viad has acquired businesses
and intends to continue to pursue opportunities to acquire businesses that complement, enhance or expand Viad’s current
businesses, or offer growth opportunities to Viad. Acquisitions can involve a number of risks, including the failure to achieve
the financial and strategic goals and other benefits from the acquisition; the inability to successfully integrate the acquired
business into Viad’s ongoing businesses; the inability to retain key personnel or customers of the acquired business; the
inability to successfully integrate financial reporting and internal control systems; increased debt; new regulatory
requirements; the disruption of Viad’s ongoing businesses and distraction of senior management and employees of Viad from
other opportunities and challenges due to the integration of the acquired business; and the potential existence of unknown
liabilities or contingencies not disclosed to or known by Viad prior to closing the acquisition or not otherwise provided for
through the purchase agreement. If Viad makes changes to its business strategy or if external conditions adversely affect its
business operations, the Company may also be required to record an impairment charge to goodwill or intangible assets.
Viad’s businesses and results of operations are adversely affected by deterioration in general economic conditions.
Viad’s businesses are sensitive to fluctuations in general economic conditions and are impacted by changes in the cost of
materials and operating supplies. The results of operations for the U.S. Segment and the International Segment depends
largely on the number of exhibitions held and on the size of exhibitors’ marketing expenditures, which in turn depend partly
on the strength of particular industries in which exhibitors operate. The number and size of exhibitions generally decrease
when the economy weakens.
Further, many exhibitors’ marketing budgets are partly discretionary, and are frequently among the first expenditures
reduced by exhibitors when economic conditions deteriorate, resulting in reduced spending by exhibitors for the Company’s
services. Marketing expenditures often are not increased until economic conditions improve. As a result, during periods of
general economic weakness, the results of operations for the Marketing & Events Group are adversely affected.
Revenue from the Travel & Recreation Group depends largely on the amount of disposable income that consumers
have available for travel and vacations. This amount decreases during periods of weak general economic conditions.
Viad’s results of operations are impacted by changes in foreign currency exchange rates. Viad conducts foreign
operations primarily in Canada, the United Kingdom, Germany, and to a lesser extent, in certain other countries. The
functional currency of Viad’s foreign subsidiaries is their local currency. Accordingly, for purposes of consolidation, Viad
translates the assets and liabilities of its foreign subsidiaries into U.S. dollars at the foreign exchange rates in effect at the
balance sheet date. The unrealized gains or losses resulting from the translation of those foreign denominated assets and
liabilities are included as a component of accumulated other comprehensive income in Viad’s consolidated balance sheets. As
a result, significant fluctuations in foreign exchange rates, relative to the U.S. dollar, may result in material changes to Viad’s
net equity position reported in its consolidated balance sheets. Viad does not currently hedge its equity risk arising from the
translation of foreign denominated assets and liabilities.
In addition, for purposes of consolidation, revenue, expenses, gains, and losses related to Viad’s foreign operations are
translated into U.S. dollars at the average foreign exchange rates for the period. As a result, Viad’s consolidated results of
operations are exposed to fluctuations in foreign exchange rates, even when the functional currency amounts have not
changed. Accordingly, fluctuations in the exchange rates affect overall profitability and historical period-to-period
comparisons. Viad has not hedged its net earnings exposure arising from the translation of its foreign results of operations.
During 2015, the Marketing & Events Group derived approximately 28 percent of its revenue and 46 percent of its
segment operating income from its International Segment. The Travel & Recreation Group derived approximately 73 percent
of its 2015 revenue and 89 percent of its 2015 segment operating income from its Canadian operations, which are largely
dependent on foreign customer visitation. Accordingly, the strengthening or weakening of the Canadian dollar, relative to
other currencies, could affect customer volumes and the results of operations in the Travel & Recreation Group.
Show rotation impacts overall profitability and makes comparisons between periods difficult. The business activities
of the Marketing & Events Group are largely dependent upon the frequency, timing, and location of exhibitions and events.
Some large exhibitions are not held annually (they may be held once every two or three years or longer) or may be held at a
different time of year than when previously held. In addition, the same exhibition may be held in different locations in
12
different years, and may result in Viad generating lower margins if the exhibition shifts to a higher-cost city. The factors
described above may cause the results of operations for those businesses to fluctuate significantly from quarter to quarter or
from year to year, making periodic comparisons difficult.
Viad’s businesses are adversely affected by disruptions in the travel industry, particularly those adversely affecting
the hotel and airline industries. The success of Viad’s businesses depends largely on the ability and willingness of people,
whether exhibitors, exhibition attendees, or others, to travel. Factors adversely affecting the travel industry as a whole, and
particularly the airline and hotel industries, generally also adversely affect Viad’s businesses and results of operations.
Factors that could adversely affect the travel industry as a whole include high or rising fuel prices, increased security and
passport requirements, weather conditions, airline accidents, and international political instability and hostilities. Unexpected
events of this nature, or other events that may have an impact on the availability and pricing of air travel and
accommodations, could have a material adverse effect on Viad’s businesses and results of operations.
The failure of a large client to renew its services contract or the loss of business from exhibition facilities could
adversely impact revenue. Although no single client accounted for more than 6.3 percent of Viad’s consolidated revenue in
2015, the U.S. Segment and the International Segment have a relatively small number of large exhibition event organizers
and large customer accounts. Consistent with industry practice, and only after a favorable review of credit worthiness, some
of those larger clients have also been granted extended payment terms. The loss of any of these large clients, or the failure of
such clients to pay in accordance with any extended payment terms, could have a material adverse effect on the results of
operations of the U.S Segment and the International Segment.
In addition, revenue of the Marketing & Events Group may be significantly impacted if certain exhibition facilities
choose to in-source electrical, plumbing, or other services. When the Marketing & Events Group is hired as the official
services contractor for an exhibition, the event organizer contractually grants an exclusive right to perform those electrical
and plumbing services, subject to the exhibition facility’s option to in-source the services (either by performing the services
themselves or by hiring a separate service provider). Many exhibition facilities are under financial pressure as a result of
conditions generally affecting their industry, including an increased supply of exhibition space. As a result, some of those
facilities have sought to in-source all or a large portion of those services. If a large number of facilities with which the
Marketing & Events Group has those relationships choose to in-source those services, such a decision could have a material
adverse effect on Viad’s results of operations.
Viad’s key businesses are relationship driven. The business activities of the U.S. Segment and the International
Segment are heavily focused on client relationships, and, specifically, on the close collaboration and interaction with the
client. Those relationships require the account team to become attuned to the client’s desires and expectations in order to
provide top-quality service. Viad has in the past lost, and may in the future lose, important clients (and corresponding
revenue) if a key member of the account team were to cease employment with the Company and take those customers to a
competitor.
Viad’s future payment of special dividends should not be relied upon as a way to realize any future gains on an
investment. The Board of Directors generally declares and pays regular dividends to Viad’s shareholders on a quarterly basis
and also has paid special dividends, most recently in February 2014. The decision to declare a special dividend and the
amount, timing, and payment of any such dividend are at the sole discretion of the Board. Factors in any decision to declare a
dividend would include the amount of funds legally available and an evaluation of the Company’s financial condition, capital
requirements, future prospects, and other factors deemed relevant by the Board. Accordingly, investors should not rely on the
future payment of special dividends as a way to realize gains on their investment.
Viad’s businesses are seasonal, which causes results of operations to fluctuate and makes results of operations
particularly sensitive to adverse events during peak periods. Exhibition and event activity for the U.S. Segment and the
International Segment varies significantly depending on the frequency and timing of shows, as some shows are not held each
year and some may shift between quarters. The Travel & Recreation Group experiences peak activity during the summer
months. During 2015, 87 percent of the Travel & Recreation Group’s revenue was earned in the second and third quarters.
Because of the seasonal nature of Viad’s businesses, adverse events or conditions occurring during peak periods could have a
material adverse effect on Viad’s results of operations.
13
New capital projects may not be commercially successful. From time to time, in an effort to seize opportunities that
complement, enhance, and expand its businesses, Viad pursues new capital projects. Capital projects are subject to a number
of risks, including unanticipated delays, cost overruns, and the failure to achieve established financial and strategic goals, as
well as additional risks specific to a project. The occurrence of any of the events described above could prevent a new capital
project from performing in accordance with Viad’s commercial expectations and could have a material adverse effect on its
businesses and results of operations.
Transportation disruptions and increases in transportation costs could adversely affect Viad’s businesses and results
of operations. The U.S. Segment and the International Segment rely on independent transportation carriers to send materials
and exhibits to and from exhibitions, warehouse facilities, and customer facilities. If Viad’s customers and suppliers were
unable to secure the services of those independent transportation carriers at favorable rates, it could have a material adverse
effect on Viad’s businesses and results of operations. In addition, disruption of transportation services because of weather-
related problems, strikes, lockouts, or other events could adversely affect their ability to supply services to customers and
could cause the cancellation of exhibitions, which may have a material adverse effect on the businesses and results of
operations.
Union-represented labor creates an increased risk of work stoppages and higher labor costs. A significant portion of
Viad’s employees are unionized and Viad’s businesses are party to approximately 100 collective-bargaining agreements, with
approximately one-third requiring renegotiation each year. If the results of labor negotiations caused the Company to increase
wages or benefits, which increases total labor costs, the increased costs could either be absorbed (which would adversely
affect operating margins) or passed on to customers, which may lead customers to turn to other vendors in response to higher
prices. Either event could have a material adverse effect on Viad’s businesses and results of operations.
Additionally, if the Company were unable to reach an agreement with a union during the collective-bargaining process,
the union may strike or carry out other types of work stoppages. In such a circumstance, Viad might be unable to find
substitute workers with the necessary skills to perform many of the services, or may incur additional costs to do so, which
could have a material adverse effect on the Company’s businesses and results of operations.
Obligations to fund multi-employer pension plans, to which Viad contributes, may have an adverse impact on its
results of operations. Viad’s businesses contribute to various multi-employer pension plans based on obligations arising
under collective-bargaining agreements covering its union-represented employees. Viad’s contributions to those multi-
employer plans in 2015 and 2014 totaled $22.0 million and $23.2 million, respectively. Viad does not directly manage those
multi-employer plans, which are generally managed by boards of trustees. Based upon the information available to Viad from
plan administrators, management believes that several of those multi-employer plans are underfunded. The Pension
Protection Act of 2006 requires pension plans underfunded at certain levels to reduce, over defined time periods, the
underfunded status. In addition, under current laws, the termination of a plan, or a voluntary withdrawal from a plan by Viad,
or a shrinking contribution base to a plan as a result of the insolvency or withdrawal of other contributing employers to such
plan, would require Viad to make payments to such plan for its proportionate share of the plan’s unfunded vested liabilities.
Viad cannot determine at this time the amount of additional funding, if any, it may be required to make to those plans.
However, plan contribution increases, if any, could have a material adverse effect on Viad’s consolidated financial condition,
results of operations, and cash flows. Refer to Note 18 – Pension and Postretirement Benefits of the Notes to Consolidated
Financial Statements (Part II, Item 8 of this Annual Report on Form 10-K) for further information.
Viad competes in competitive industries and increased competition could negatively impact its results of operations.
Viad is engaged in a number of highly competitive industries. Competition in the Live Events industry and the exhibits and
experiential environments industries is driven by price and service quality, among other factors. To the extent competitors
seek to gain or retain their market presence through aggressive underpricing strategies, Viad may be required to lower its
prices and rates to avoid loss of related business, thereby adversely affecting it results of operations. In addition, if Viad is
unable to anticipate and respond as effectively as competitors to changing business conditions, including new technologies
and business models, Viad could lose market share to its competitors. Viad’s inability to meet the challenges presented by the
competitive environment could have a material adverse effect on its results of operations.
14
Liabilities relating to prior and discontinued operations may adversely affect results of operations. Viad and its
predecessors have a corporate history spanning over eight decades and involving approximately 2,400 previous subsidiaries
in diverse businesses, such as the manufacturing of locomotives, buses, industrial chemicals, fertilizers, pharmaceuticals,
leather, textiles, food, and fresh meats. Some of those businesses used raw materials that have been, and may continue to be,
subject to litigation. Moreover, some of the raw materials used and the waste produced by those businesses have been and are
the subject of U.S. federal and state environmental regulations, including laws enacted under the Comprehensive
Environmental Response, Compensation and Liability Act, or its state law counterparts. In addition, Viad may incur other
liabilities, resulting from indemnification claims involving previously sold subsidiaries, as well as from past operations of
predecessors or their subsidiaries. Although the Company believes it has adequate reserves and sufficient insurance coverage
to cover those future liabilities, future events or proceedings could contradict with current assumptions, which could cause
reserves or insurance to become inadequate and, ultimately, have a material adverse effect on Viad’s results of operations.
Terrorist attacks, natural disasters or other catastrophic events may have a negative effect on Viad’s business. The
occurrence of catastrophic events ranging from natural disasters (such as hurricanes and floods), health epidemics or
pandemics, acts of war or terrorism, or the prospect of these events could disrupt Viad’s businesses. Such catastrophic events
could impact the Marketing & Events Group’s production facilities, preventing the Company from timely completing exhibit
fabrication and other projects for customers, and could also cause a cancellation of exhibitions and other events held in public
venues or a disruption in the services the Company provides to its customers at convention centers, exhibition halls, hotels,
and other public venues. Such catastrophic events could also adversely impact the Travel & Recreation Group businesses,
which are heavily dependent on the ability and willingness of its guests to travel. The guests serviced by the Travel &
Recreation Group tend to delay or postpone vacations if natural conditions differ from those that typically prevail at
competing lodges, resorts and attractions during a given season, and catastrophic events could impede the guests’ ability to
travel, interrupt the Company’s business operations, and/or cause damage to the Company’s properties. If the conditions
arising from such events persist or worsen, they could have a material adverse effect on Viad’s results of operations and
financial condition.
Improper disclosure of personal data could result in liability and harm the Company’s reputation. Viad’s businesses
store and process a significant amount of personally identifiable information in connection with the services they provide to
customers. If the Company’s security controls over personal data, training of employees and vendors on data security, and
other practices and procedures do not prevent the improper disclosure of personally identifiable information, the Company’s
reputation could be harmed, and the Company could face legal exposure to customers and other liabilities under laws that
protect personal data, resulting in increased costs or loss of revenue. Certain of the Company’s services also enable its
customers to store and process personal data. Perceptions that the Company’s services do not adequately protect the privacy
of personal information could have a material adverse effect on Viad’s businesses and results of operations.
Item 1B. UNRESOLVED STAFF COMMENTS
None.
Item 2. PROPERTIES
Viad’s businesses operate service or production facilities and maintain sales and service offices in the United States,
Canada, the United Kingdom, Germany, the United Arab Emirates, and the Netherlands. The principal properties of Viad are
operated by the Marketing & Events Group, the Travel & Recreation Group, and Viad Corporate and Shared Services as
follows:
Marketing & Events U.S. Segment
The U.S. Segment operates 20 offices and 25 multi-use facilities (manufacturing, sales and design, office, storage
and/or warehouse, and truck marshaling yards). The multi-use facilities vary in size up to approximately 677,800 square feet.
Two of the multi-use facilities are owned; all other properties are leased.
Marketing & Events International Segment
The International Segment operates 11 offices and 21 multi-use facilities, with three offices and eight multi-use
facilities in Canada, four offices and six multi-use facilities in the United Kingdom, one office and two multi-use facilities in
Germany, two offices and three multi-use facilities in the United Arab Emirates, and one office and two multi-use facilities in
the Netherlands. The multi-use facilities vary in size up to approximately 133,600 square feet. All properties are leased or
licensed.
15
Travel & Recreation Group
The Travel & Recreation Group operates four offices, 22 retail stores, one bus terminal, five garages, an icefield
attraction, an observation platform attraction, a gondola lift attraction, a boat tour attraction, and 12 hotels/lodges (including
ancillary food service and recreational facilities). All of the facilities are in the United States or Canada. The bus terminal, all
of the hotels/lodges, one office, four garages, the icefield attraction, the gondola lift attraction, the observation platform
attraction, and the boat tour attraction are owned. One garage and three offices are leased, and four hotels/lodges, an office
and all of the owned garages and attractions are situated on land subject to multiple long-term ground leases with the
Canadian government.
Viad Headquarters
The Company’s headquarters are leased and approximate 19,900 square feet, and are located at 1850 North Central
Avenue, Suite 1900 in Phoenix, Arizona 85004-4565.
Management believes that the Company’s facilities are adequate and suitable for its business operations and that
capacity is sufficient for current needs.
Item 3. LEGAL PROCEEDINGS
Refer to Note 21 - Litigation, Claims, Contingencies, and Other of the Notes to Consolidated Financial Statements
(Part II, Item 8 of this Annual Report on Form 10-K) for information regarding legal proceedings for which the Company is
involved.
Item 4. MINE SAFETY DISCLOSURES.
Not applicable.
16
Other. EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of Viad as of March 11, 2016 were as follows:
Name
Steven W. Moster
Age Business Experience During the Past Five Years and Other Information
46
President and Chief Executive Officer of Viad since 2014; President of the Marketing &
Events Group since 2011; President of GES, a wholly-owned subsidiary of Viad, since 2010;
prior thereto, independent consultant providing marketing and sales consultation services to
3 Day Blinds Corporation, a manufacturer and retailer of custom window coverings, from
April 2010 to August 2010; prior thereto, Executive Vice President-Chief Sales & Marketing
Officer of GES from 2008 to 2010; prior thereto, Executive Vice President-Products and
Services of GES from 2006 to 2008; prior thereto Vice President-Products & Services
Business of GES from 2005 to 2006; and prior thereto, Engagement Manager, Management
Strategy Consulting for McKinsey & Company, a multinational management consulting
firm, from 2000 to 2004.
Ellen M. Ingersoll
51
David W. Barry
53
Deborah J. DePaoli
51
Thomas M. Kuczynski
51
Leslie S. Striedel
53
Chief Financial Officer since July 2002; prior thereto, Vice President-Controller or similar
position since 2002; prior thereto, Controller of CashX, Inc., a service provider of stored
value internet cards, from June 2001 through October 2001; prior thereto, Operations
Finance Director of LeapSource, Inc., a provider of business process outsourcing, from 2000
to June 2001; and prior thereto, Vice President and Controller of Franchise Finance
Corporation of America since 1992.
President of the Travel & Recreation Group since June 2015; prior thereto, Chief Executive
Officer and President of Trust Company of America, the largest independent registered
investment adviser custodian in the United States, from 2011 to June 2015; prior thereto,
Chief Executive Officer of The Alpine Group of Companies, the largest helicopter skiing
company in the world and a division of Intrawest Resorts Holdings, Inc., a public company,
from 2004 to 2011; prior thereto, Chief Executive Officer of The Alpine Group of
Companies and President and Chief Operating Officer of Intrawest USA, a $500 million
division of Intrawest Holdings Resorts, Inc. with 13,000 employees, from 2004 to 2007.
General Counsel and Secretary since 2011; prior thereto, Deputy General Counsel and
Assistant Secretary from 2009 to 2011; prior thereto, Assistant General Counsel and
Assistant Secretary from 2004 to 2009; prior thereto, held other attorney positions since
joining Viad in 2000; prior thereto, Vice President and General Counsel, Outings on the
Links, Inc. from 1996 to 2000; and prior thereto, Senior Associate and various legal
positions with Gallagher & Kennedy, P.A. from 1991 to 1996.
Chief Corporate Development & Strategy Officer since 2008; prior thereto, Senior Vice
President, Corporate Development & Planning of The Nielsen Company, a media and
marketing information company, from 2006 to 2008; prior thereto, Managing Director of
The Pareto Group, a provider of strategic and investment advisory services, from 2004 to
2008; and prior thereto, Vice President of Penton Media, Inc., a business media firm
producing magazines, trade shows, conferences and electronic media, from 1999 to 2003.
Chief Accounting Officer since 2014; prior thereto, Vice President of Finance from March
2014 to April 2014; prior thereto, Vice President of Finance and Administration or similar
positions with Colt Defense LLC, a designer, developer and manufacturer of firearms for
military, personal defense and recreational purposes, from 2010 to 2013; prior thereto, Vice
President of Finance, Director of Financial Reporting and Compliance and Corporate
Controller of White Electronics Designs Corp. (now a subsidiary of Microsemi
Corporation), a public company manufacturing circuits and semiconductors, from 2004 to
2010; and prior thereto, Corporate Controller of MD Helicopters, an international helicopter
manufacturer, Corporate Controller of Fluke Networks (formerly Microtest, Inc.), a publicly-
traded manufacturing and technology company, and Senior Tax Manager of KPMG LLP.
The term of office of the executive officers is until the next annual organization meeting of the Board of Directors of
Viad, which is scheduled for May 19, 2016.
17
PART II
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information
Viad’s common stock is traded on the New York Stock Exchange under the symbol VVI. The high and low common
stock market prices per share are as follows:
First Quarter ............................................................................... $
Second Quarter .......................................................................... $
Third Quarter ............................................................................. $
Fourth Quarter............................................................................ $
28.82 $
28.53 $
29.75 $
32.89 $
24.73 $
26.21 $
25.01 $
28.22 $
28.62 $
25.52 $
23.27 $
27.41 $
23.27
21.95
20.22
19.92
2015
2014
High
Low
High
Low
Holders
As of January 31, 2016, there were a total of 6,311 shareholders of record of Viad’s common stock, including 406
shareholders that had not converted their shares following a stock split effective on July 1, 2004.
Dividends
For the year ended December 31, 2015, Viad’s Board of Directors declared the following dividends:
Declaration Date
December 3, 2015
August 26, 2015
May 21, 2015
February 25, 2015
Dividend Per Share
$
$
$
$
Record Date
December 18, 2015
September 11, 2015
June 5, 2015
0.10
0.10
0.10
0.10 March 13, 2015
Payable Date
January 4, 2016
October 1, 2015
July 1, 2015
April 1, 2015
For the year ended December 31, 2014, Viad’s Board of Directors declared the following dividends:
Declaration Date
December 4, 2014
August 27, 2014
May 22, 2014
February 26, 2014
January 24, 2014
Dividend Per Share
$
$
$
$
$
Record Date
December 19, 2014
September 12, 2014
June 6, 2014
0.10
0.10
0.10
0.10 March 14, 2014
February 7, 2014
1.50
Payable Date
January 2, 2015
October 1, 2014
July 1, 2014
April 1, 2014
February 14, 2014
Issuer Purchases of Equity Securities
The following table is the total number of shares of Viad’s common stock that were repurchased during the fourth
quarter of 2015 by Viad pursuant to publicly announced plans or programs, as well as from employees, former employees,
and non-employee directors surrendering previously owned Viad common stock (outstanding shares) to pay the taxes in
connection with the vesting of restricted stock awards.
Period
October 1, 2015 - October 31, 2015 ....
November 1, 2015 - November 30,
2015 .................................................
December 1, 2015 - December 31,
2015 .................................................
Total ....................................................
— $
1,285 $
— $
1,285 $
Total Number of
Shares Purchased
Average Price Paid
Per Share
Total Number of Shares
Purchased as Part of Publicly
Announced Plans or Programs
—
—
Maximum Number
of Shares that
May Yet Be Purchased
Under the Plans or Programs
440,540
31.15
—
31.15
18
—
—
—
440,540
440,540
440,540
The Board of Directors authorized the Company to repurchase shares of its common stock from time to time at
prevailing market prices. No shares were repurchased on the open market during the three months ended December 31, 2015.
The authorization of the Board of Directors does not have an expiration date.
Effective February 24, 2016, Viad executed an amendment (the “Credit Agreement Amendment”) to its $300 million
Amended and Restated Credit Agreement (the “Credit Agreement”). The terms of the Credit Agreement allowed Viad to
make dividends, distributions, and repurchases with respect to the Company’s common stock in an amount of up to $20
million per calendar year, but restricted Viad from making any further stock dividends, distributions, or repurchases above
such an amount unless the Company’s leverage ratio was less than or equal to 2.00 to 1.00, no default or unmatured default,
as defined in the Credit Agreement, existed, and the liquidity amount (defined as cash in the U.S. and Canada, plus available
revolver borrowings on a pro forma basis) was at least $100 million. Under the Credit Agreement Amendment, stock
dividends, distributions, and repurchases above $20 million per calendar year are no longer subject to a liquidity covenant,
and are permitted as long as the Company’s pro forma leverage ratio is less than or equal to 2.50 to 1.00 and no default or
unmatured default, as defined in the Credit Agreement, exists. The Credit Agreement Amendment does not affect Viad’s
right under the Credit Agreement to repurchase stock and pay dividends up to $20 million per calendar year. For additional
information on the Credit Agreement and the Credit Agreement Amendment, refer to Note 11 – Debt and Capital Lease
Obligations and Note 26 – Subsequent Events of the Notes to Consolidated Financial Statements (Part II, Item 8 of this
Annual Report on Form 10-K).
Performance Graph
The following graph compares the change from January 1, 2011 to December 31, 2015 in the cumulative total
shareholder return on Viad’s common stock, the Standard & Poor’s SmallCap 600 Media Index, the Standard & Poor’s
SmallCap 600 Commercial Services & Supplies Index, the Standard & Poor’s SmallCap 600 Index, the Russell 2000 Index,
and Standard & Poor’s 500 Index (assuming reinvestment of dividends, as applicable). The graph assumes $100 was invested
on January 1, 2011.
Comparison of Five-Year Cumulative Total Return
$200
$180
$160
$140
$120
$100
$80
$60
$40
$20
$-
2010
2011
2012
2013
2014
2015
Viad Corp
S&P 500
Russell 2000
S&P SmallCap 600
S&P 600 Comm.
Services & Supplies
S&P 600
Media Index
2010
2011
2012
2013
2014
2015
Year Ended December 31,
69.17 $ 108.93 $ 124.36 $ 129.00 $ 138.57
Viad Corp ............................................................... $ 100.00 $
S&P 500 .................................................................. $ 100.00 $ 102.11 $ 118.44 $ 156.79 $ 178.21 $ 180.65
Russell 2000 ........................................................... $ 100.00 $
95.82 $ 111.51 $ 154.79 $ 162.39 $ 155.23
S&P SmallCap 600 ................................................. $ 100.00 $ 101.01 $ 117.47 $ 166.00 $ 175.53 $ 172.00
87.44 $ 114.35 $ 163.98 $ 162.86 $ 158.94
S&P 600 Comm. Services & Supplies .................... $ 100.00 $
87.85 $ 142.89 $ 167.63 $ 176.61
77.26 $
S&P 600 Media Index ............................................ $ 100.00 $
19
Item 6. SELECTED FINANCIAL DATA.
(in thousands, except per share data)
Summary Statement of Operations Data (1)
Revenue (2) :
Exhibition and event services ........................................................ $
Exhibits and environments ............................................................
(3),(4) ................................................
Travel and recreation services
Total revenue ........................................................................................ $
Income from continuing operations (5) .................................................. $
Income from continuing operations attributable to Viad common
stockholders ...................................................................................... $
Basic and diluted income from continuing operations attributable to
Viad common stockholders per share (5) ............................................ $
Dividends declared per common share ................................................. $
Other Data
Adjusted EBITDA (6) ..................................................................... $
(in thousands)
Summary Balance Sheet Data
2015
Year Ended December 31,
2013
2012
2014
2011
799,752 $
177,126
112,170
1,089,048 $
772,770 $
171,698
120,519
1,064,987 $
726,429 $
685,350 $
175,611
159,554
108,443
104,604
953,347 $ 1,006,644 $
27,442 $
41,178
27,000 $
40,790
1.34 $
0.40 $
2.02
1.90
76,801 $
73,954
$
$
$
$
$
19,320
$
3,553
19,437
$
3,348
0.96
2.90
$
$
0.17
0.28
59,157
$
53,971
2015
2014
December 31,
2013
2012
670,054
170,496
87,219
927,769
7,544
7,361
0.36
0.16
40,527
2011
100,376
617,828
3,239
386,179
8,285
$
$
$
$
$
$
$
$
$
$
Cash and cash equivalents ............................................................. $
Total assets .................................................................................... $
Total debt and capital lease obligations ......................................... $
Total stockholders’ equity ............................................................. $
Noncontrolling interest .................................................................. $
56,531 $
692,295 $
128,975 $
335,338 $
12,757 $
56,990
714,943
141,020
347,702
12,315
$
$
$
$
$
45,821
561,932
11,668
356,543
9,102
$
$
$
$
$
114,171
650,577
2,226
397,032
8,971
(1)
(2)
(3)
(4)
(5)
The 2013 amounts and prior years have been adjusted for discontinued operations related to the expiration of Glacier
Park’s concession contract with the Park Service on December 31, 2013.
The 2014 amounts include an aggregate $21.2 million in revenue from the acquisitions of the West Glacier Properties,
Blitz, onPeak, and N200. Refer to Note 3 - Acquisition of Businesses of the Notes to Consolidated Financial
Statements (Part II, Item 8 of this Annual Report on Form 10-K).
The 2012 amounts include $5.2 million in revenue from the acquisition of the Banff International Hotel.
The 2011 amounts include an aggregate $9.7 million in revenue from the acquisitions of Grouse Mountain Lodge, St.
Mary Lodge, Denali Backcountry Lodge, and Denali Cabins.
Income from continuing operations includes the following items:
Restructuring charges, net of tax, of $1.9 million, $1.0 million, $2.6 million, $3.3 million, and $2.5 million in
2015, 2014, 2013, 2012, and 2011, respectively. Refer to Note 19 - Restructuring Charges of the Notes to
Consolidated Financial Statements (Part II, Item 8 of this Annual Report on Form 10-K).
Impairment charges, net of tax, of $0.1 million, $0.5 million, and $1.6 million in 2015, 2014 and 2013,
respectively. Refer to Note 6 - Property and Equipment and Note 8 - Goodwill and Other Intangible Assets of the
Notes to Consolidated Financial Statements (Part II, Item 8 of this Annual Report on Form 10-K).
Income tax expense in 2015 included a $1.6 million non-cash tax benefit related to deferred taxes associated with
certain foreign intangibles. Income tax expense in 2014 included the release of $11.7 million of the valuation
allowance related to the Company’s foreign tax credit and state NOL carryforwards. Income tax expense in 2012
included a $13.4 million valuation allowance for certain deferred assets associated with foreign tax credit
carryforwards. Refer to Note 17 - Income Taxes of the Notes to Consolidated Financial Statements (Part II, Item
8 of this Annual Report on Form 10-K).
(6)
Refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations (Part II, Item 7 of
this Annual Report on Form 10-K) for a discussion of the “Non-GAAP Measures.”
20
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
The following Management’s Discussion and Analysis (“MD&A”) should be read in conjunction with the consolidated
financial statements and related notes of Viad Corp (“Viad” or the “Company”). The MD&A is intended to assist in
providing an understanding of the Company’s financial condition and results of operations. This discussion contains forward-
looking statements that involve risks and uncertainties. Viad Corp’s actual results could differ materially from those
anticipated due to various factors discussed under “Risk Factors,” “Forward-Looking Statements,” and elsewhere in this
Annual Report on Form 10-K.
Overview
Viad is an international experiential services company with operations in the United States, Canada, the United
Kingdom, continental Europe, and the United Arab Emirates. Viad is committed to providing best in class experiences to its
clients, customers, and guests by offering products and services designed to meet their current and future needs. Viad
operates through three reportable business segments: the Marketing & Events U.S. Segment (the “U.S. Segment”), the
Marketing & Events International Segment (the “International Segment”) (collectively, the “Marketing & Events Group”),
and the Travel & Recreation Group.
The Marketing & Events Group, comprised of Global Experience Specialists, Inc. and affiliates (“GES”), is a global,
full-service provider for live events. GES uniquely combines the art of high-impact creativity, service, and expertise with the
science of easy-to-use technology, strategy, and worldwide logistics to help clients gain a greater return at their events and
enhance the exhibitor experience.
The Travel & Recreation Group provides experiential travel services in iconic locations which enjoy perennial demand.
The Travel & Recreation Group offers guests distinctive and world renowned experiences through its collection of unique
hotels, lodges, recreational attractions, and transportation services. The Company remains focused on building powerful new
experiences and enhancing a unique portfolio of integrated tourism assets.
Non-GAAP Measures
In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting
principles (“GAAP”), the Company also discloses the following non-GAAP financial measures:
“Adjusted EBITDA” is defined by Viad as net income attributable to Viad before the Company’s portion of
interest expense, income taxes, depreciation and amortization, impairment charges and recoveries, changes in
accounting principles, and the effects of discontinued operations. Adjusted EBITDA is utilized by management
to measure the profit and performance of Viad’s operations and to facilitate period-to-period comparisons. Refer
to the table below for a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net
income attributable to Viad.
“Adjusted Segment EBITDA” is defined by Viad as segment operating income before non-cash depreciation
and amortization and integration costs, if any. Segment operating income is a GAAP measure defined as income
from continuing operations before corporate activities, interest expense and interest income, income taxes,
restructuring charges, impairment losses and recoveries, and the reduction for income attributable to non-
controlling interest. Adjusted Segment EBITDA is utilized by management to measure the profit and
performance of Viad’s operating segments and acquisitions to facilitate period-to-period comparisons. For a
discussion of how this metric is used in connection with 2016 full year acquisition performance expectations,
refer to the “Forward Looking Non-GAAP Financial Measures” section of this MD&A. Management believes
that Adjusted Segment EBITDA for acquisitions enables investors to assess how effectively management is
investing capital into major corporate development projects, both from a valuation and return perspective.
“Organic revenue” and “organic segment operating income” are defined by Viad as revenue and segment
operating income, respectively, without the impact of exchange rate variances and acquisitions, if any, until such
acquisitions are included in the entirety of both comparable periods. The impact of exchange rate variances is
calculated as the difference between current period activity translated at the current period’s exchange rates and
the comparable prior period’s exchange rates. Management believes that the presentation of “organic” results
permits investors to better understand Viad’s performance without the effects of exchange rate variances or
acquisitions. Refer to the “Results of Operations” section of this MD&A for reconciliations of organic revenue
and organic segment operating income to the most directly comparable GAAP measures, revenue and segment
operating income.
21
Management believes that the presentation of Adjusted EBITDA, Adjusted Segment EBITDA, organic revenue, and
organic segment operating income (collectively, the “Non-GAAP Measures”) provides useful information to investors
regarding Viad’s results of operations for trending, analyzing, and benchmarking the performance and value of Viad’s
business. The presentation of the Non-GAAP Measures is supplemental to results presented under GAAP and may not be
comparable to similarly titled measures used by other companies. The Non-GAAP Measures should be considered in addition
to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP.
The Non-GAAP Measures are considered useful operating metrics as potential variations arising from taxes,
depreciation and amortization, debt service costs, impairment charges and recoveries, changes in accounting principles, and
the effects of discontinued operations are eliminated, thus resulting in additional measures considered to be indicative of
Viad’s ongoing operations and segment performance. Although the Non-GAAP Measures are used as financial measures to
assess the performance of the business, the use of these measures is limited because these measures do not consider material
costs, expenses, and other items necessary to operate the business. These items include debt service costs, non-cash
depreciation and amortization expense associated with long-lived assets, expenses related to U.S. federal, state, local and
foreign income taxes, impairment charges or recoveries, and the effects of accounting changes and discontinued operations.
Since the Non-GAAP Measures do not consider the above items, a user of Viad’s financial information should consider net
income attributable to Viad and organic segment operating income as important measures of financial performance because
both provide a more complete measure of the Company’s performance.
A reconciliation of net income attributable to Viad to Adjusted EBITDA is as follows:
(in thousands)
Net income attributable to Viad ............................................................... $
Depreciation and amortization .................................................................
Interest expense ........................................................................................
Income tax expense ..................................................................................
Impairment charges ..................................................................................
(Income) loss from discontinued operations ............................................
Noncontrolling interest ............................................................................
Adjusted EBITDA ............................................................................ $
2015
2014
2013
26,606 $
35,231
4,535
10,493
96
394
(554)
76,801 $
52,354 $
30,792
2,015
109
884
(11,564 )
(636 )
73,954 $
21,555
27,967
1,234
8,310
3,049
(2,118)
(840)
59,157
Adjusted EBITDA increased $2.8 million in 2015 primarily due to lower corporate costs, offset in part by higher
restructuring charges. Adjusted EBITDA increased $14.8 million in 2014 primarily due to higher segment operating income
at both the Marketing & Events Group and Travel & Recreation Group and lower restructuring charges, partially offset by
higher corporate costs. Refer to the Results of Operations section of this MD&A for a discussion of fluctuations.
Forward-Looking Non-GAAP Financial Measures
The Company has also provided Adjusted Segment EBITDA, formerly referred to as “segment EBITDA,” as a
forward-looking Non-GAAP Measure within the Results of Operations section of this MD&A. The Company does not
provide a reconciliation of this forward-looking Non-GAAP Measure to the most directly comparable GAAP financial
measure because, due to variability and difficulty in making accurate forecasts and projections and/or certain information not
being ascertainable or accessible, not all of the information necessary for quantitative reconciliation of this forward-looking
Non-GAAP Measure to the most directly comparable GAAP financial measure is available to the Company without
unreasonable efforts. Consequently, any attempt to disclose such reconciliation would imply a degree of precision that could
be confusing or misleading to investors. It is probable that the forward-looking Non-GAAP Measure provided without the
directly comparable GAAP financial measure may be materially different from the corresponding Non-GAAP Measure.
22
Results of Operations
Financial Highlights
Year Ended December 31,
2014
2015
(in thousands, except per share data)
Revenue ...................................................... $ 1,089,048 $ 1,064,987 $
Segment operating income .......................... $
59,866 $
Income (loss) from discontinued
operations attributable to Viad common
stockholders ............................................. $
Net income attributable to Viad .................. $
Diluted income per common share from
continuing operations attributable to
Viad common stockholders ..................... $
(394) $
26,606 $
11,564 $
52,354 $
54,584 $
1.34 $
2.02 $
Percentage
Change
2015 vs. 2014
2.3 %
(8.8 )%
Percentage
Change
2014 vs. 2013
11.7%
42.8%
2013
953,347
41,911
2,118
21,555
**
(49.2 )%
0.96
(33.7 )%
**
**
**
** Change is greater than +/- 100 percent.
2015 compared with 2014
Total revenue increased $24.1 million or 2.3 percent, primarily due to incremental revenue from the acquisitions
of onPeak, Blitz, N200, and the West Glacier Properties of $49.1 million, U.S. base same-show revenue growth
of 8 percent, and new business wins in the Marketing & Events Group as well as revenue growth in attractions in
the Travel & Recreation Group, offset in part by negative show rotation of approximately $71 million and an
unfavorable foreign exchange impact of $39.7 million. Management defines base same-show revenue as revenue
derived from shows that the Company produced out of the same city during the same quarter in each year.
Total segment operating income decreased $5.3 million or 8.8 percent, primarily due to higher performance-
based incentives, non-cash depreciation and amortization from acquisitions completed in 2014 of $7.3 million,
and an unfavorable foreign exchange impact of $5.7 million, offset in part by flow through from higher revenue.
Income (loss) from discontinued operations attributable to Viad decreased $12.0 million due to the income in
2014 related to the expiration of Glacier Park’s concession contract with the Park Service.
Net income attributable to Viad decreased $25.7 million or 49.2 percent, primarily due to decreased segment
operating income, the discontinued operations income in 2014 related to the expiration of Glacier Park’s
concession contract with the Park Service, and the $11.7 million reversal of a valuation allowance in 2014 in
connection with the Company’s analysis of its deferred tax assets.
2014 compared with 2013
Total revenue increased $111.6 million or 11.7 percent, primarily due to positive show rotation of
approximately $69 million, U.S. base same-show revenue growth of 6.4 percent, and incremental revenue from
the acquisitions of onPeak, Blitz, N200, and the West Glacier Properties of $21.3 million, as well as revenue
growth in attractions in the Travel & Recreation Group largely due to the Glacier Skywalk (opened May 2014).
Total segment operating income increased $18.0 million or 42.8 percent, primarily due to flow through from
higher revenue and increased margins in all three reportable segments.
Income from discontinued operations attributable to Viad increased $9.4 million due to the income in 2014
related to the expiration of Glacier Park’s concession contract with the Park Service on December 31, 2013. The
Company’s 2013 results related to the operations of Glacier Park’s concession contract business were reclassified
as discontinued operations.
Net income attributable to Viad increased $30.8 million primarily due to an $11.7 million reversal of a
valuation allowance in 2014 in connection with the Company’s analysis of its deferred tax assets, income in 2014
related to the expiration of Glacier Park’s concession contract with the Park Service, and increased segment
operating income.
23
Foreign Exchange Rate Variances
Viad conducts its foreign operations primarily in Canada, the United Kingdom, Germany, and to a lesser extent, in
certain other countries.
The following tables summarize the effects of foreign exchange rate variances on revenue and segment operating
results (or “FX Impact”) from Viad’s significant international operations for the years ended December 31, 2015, 2014, and
2013, excluding the effect of 2014 acquisitions:
Revenue
Weighted-Average
Exchange Rates
2015
2014
Segment Operating Results
FX Impact
(in thousands)
Weighted-Average
Exchange Rates
2015
2014
FX Impact
(in thousands)
Marketing & Events Group:
Canada ........................................... $
United Kingdom ............................ $
Germany ........................................ $
0.78 $
1.53 $
1.11 $
0.90 $
1.65
1.32
(9,420) $
(13,380) $
(3,200) $
(26,000)
0.80 $
1.52 $
1.10 $
0.88 $
1.66
1.35
(336)
(652)
(56)
(1,044)
Travel & Recreation Group:
Canada ........................................... $
0.78 $
0.92
$
(13,705) $
(39,705)
0.78 $
0.93
$
(4,638)
(5,682)
Revenue
Weighted-Average
Exchange Rates
2014
2013
Segment Operating Results
FX Impact
(in thousands)
Weighted-Average
Exchange Rates
2014
2013
FX Impact
(in thousands)
Marketing & Events Group:
Canada ........................................... $
United Kingdom ............................ $
Germany ........................................ $
0.90 $
1.65 $
1.32 $
0.97 $
1.56
1.33
(4,635) $
9,105 $
(58) $
4,412
0.88 $
1.66 $
1.35 $
0.99 $
1.57
1.33
Travel & Recreation Group:
Canada ........................................... $
0.92 $
0.96
$
(4,735) $
(323)
0.93 $
0.96
$
(211)
460
2
251
(877)
(626)
Viad’s 2015 operating results were primarily impacted by the weakening of the British pound and the Canadian dollar
relative to the U.S. dollar. Viad’s 2014 operating results were primarily impacted by the weakening of the Canadian dollar
and the strengthening of the British pound relative to the U.S. dollar. Future changes in the exchange rates may impact
overall expected profitability and historical period-to-period comparisons when operating results are translated into U.S.
dollars.
24
Analysis of Operating Results by Reportable Segment
Marketing & Events Group
2015 compared with 2014
The following table provides a comparison of the Marketing & Events Group’s reported operating results to organic
operating results for the years ended December 31, 2015 and 2014 in order to better understand the underlying performance
of the segment without the effects of acquisitions or FX Impact.
Year Ended December 31, 2015
As
Reported
Acquisitions
(1)
FX
Impact
Organic
(2)
Year Ended December 31, 2014
Acquisitions
As
(1)
Reported
Organic
(2)
Change
As
Reported
Organic
(2)
(in thousands)
Revenue:
Marketing & Events
Group:
U.S. Segment ....... $ 720,882 $ 30,916 $ — $689,966 $710,835 $
International
Segment ............ 272,634 34,066 (26,000) 264,568 249,649
Intersegment
eliminations ...... (16,638 )
— (16,638) (16,016)
—
6,123 $704,712
1.4%
(2.1)%
10,589 239,060
9.2%
10.7%
— (16,016 )
(3.9)%
(3.9)%
Total Marketing &
Events Group ......... $ 976,878 $ 64,982 $ (26,000) $937,896 $944,468 $ 16,712 $927,756
Segment operating
income (loss):
Marketing & Events
Group:
3.4%
1.1%
U.S. Segment ....... $ 14,563 $
International
Segment ............ 12,211
Total Marketing &
Events Group ......... $ 26,774 $
6,419 $ — $
8,144 $ 21,400 $
(252) $ 21,652 (31.9)%
(62.4)%
1,132 (1,044) 12,123 10,339
186 10,153 18.1%
19.4%
7,551 $ (1,044) $ 20,267 $ 31,739 $
(66) $ 31,805 (15.6)%
(36.3)%
(1)
(2)
Acquisitions for the U.S Segment include onPeak (acquired in October 2014). Acquisitions for the International
Segment include Blitz (acquired in September 2014) and N200 (acquired in November 2014).
Organic operating results are non-GAAP financial measures that adjust for the impacts of exchange rate variances and
acquisitions, if any, until such acquisitions are included in the entirety of both comparable periods presented. For more
information about organic operating results, see the “Non-GAAP Measures” section of this MD&A.
U.S. Segment
U.S. Segment revenue increased $10.0 million or 1.4 percent, primarily due to incremental revenue of $24.8 million
from the acquisition of onPeak, base same-show revenue growth of 8.0 percent, new business wins, and increased sales to
corporate clients, offset in part by negative show rotation of approximately $75 million. Base same-shows represented 44.7
percent of the 2015 U.S. Segment organic revenue. Organic revenue decreased $14.7 million or 2.1 percent.
U.S. Segment operating income decreased $6.8 million or 31.9 percent, primarily due to negative show rotation
revenue and higher performance-based incentives, offset in part by incremental segment operating income of $6.7 million
from the acquisition of onPeak. Organic operating income decreased $13.5 million or 62.4 percent.
International Segment
International Segment revenue increased $23.0 million or 9.2 percent, primarily driven by incremental revenue of
$23.5 million from the acquisitions of Blitz and N200, new business wins, increased client spending, and positive show
rotation revenue of approximately $4 million, offset in part by an unfavorable FX Impact of $26.0 million. Organic revenue
increased $25.5 million or 10.7 percent.
25
International Segment operating income increased $1.9 million or 18.1 percent, primarily due to higher organic
revenue and incremental segment operating income from the acquisitions of Blitz and N200 of $0.9 million, offset in part by
higher performance-based incentives and an unfavorable FX Impact of $1.0 million. Organic operating income increased
$2.0 million or 19.4 percent.
2016 Outlook
Although the Marketing & Events Group has a diversified revenue base and long-term contracts for future shows, its
revenue is affected by general economic and industry-specific conditions. The prospects for individual shows tend to be
driven by the success of the industry related to those shows. In general, the exhibition and event industry is experiencing
modest growth.
For the 2016 full year, management expects the Marketing & Events Group’s revenue to be up high-single digits from
2015 driven by positive show rotation of approximately $50 million to $55 million, new business wins, and continued same-
show growth, partially offset by an unfavorable FX Impact. Management anticipates an unfavorable FX Impact on the
Marketing & Events Group’s 2016 full year revenue and segment operating income of approximately $17 million and $1
million, respectively. Management expects U.S. base same-show revenue to increase at a mid-single digit rate.
Management is executing a strategic growth plan to position the Marketing & Events Group as the preferred, global
full-service provider of live events, with further reach to exhibitions, congresses and conferences, corporate events, and
consumer events. In support of this strategy, the Company acquired Blitz, onPeak, and N200 during 2014. The Company
continues to pursue opportunities to acquire businesses with proven products and services that complement, enhance, or
expand the current business or offer growth opportunities to create the most comprehensive suite of services for the Live
Events industry.
Additionally, management remains focused on improving the profitability of the U.S. Segment through continued
efforts to more effectively manage labor costs by driving productivity gains through rigorous and strategic pre-show planning
that reduces the ratio of labor costs to revenue. Improving this metric is a top priority of management and the Company
continues to develop and enhance tools to support and systematize show site labor planning, measurement and benchmarking.
2014 compared with 2013
The following table provides a comparison of the Marketing & Events Group’s reported operating results to organic
operating results for the years ended December 31, 2014 and 2013 in order to better understand the underlying performance
of the segment without the effects of acquisitions or FX Impact.
26
Year Ended December 31, 2014
As
Reported
Acquisitions
(1)
FX
Impact
Organic
(2)
(in thousands)
Revenue:
Marketing & Events
Group:
Year Ended December 31, 2013
As
Reported Acquisitions
Organic
(2)
Change
As
Reported
Organic
(2)
U.S. Segment ....... $ 710,835 $
International
Segment ............ 249,649 10,589 4,412 234,648 229,312
Intersegment
eliminations ...... (16,016 )
6,123 $ — $704,712 $628,856 $
— — (16,016) (13,264)
Total Marketing &
Events Group ......... $ 944,468 $ 16,712 $ 4,412 $923,344 $844,904 $
Segment operating
income (loss):
Marketing & Events
Group:
— $628,856 13.0%
12.1%
— 229,312
8.9%
2.3%
— (13,264 ) (20.7)%
(20.7)%
— $844,904 11.8%
9.3%
U.S. Segment ....... $ 21,400 $
International
Segment ............ 10,339
Total Marketing &
Events Group ......... $ 31,739 $
(252 ) $ — $ 21,652 $ 11,024 $
— $ 11,024 94.1%
96.4%
186
251
9,902
9,068
—
9,068 14.0%
9.2%
(66 ) $
251 $ 31,554 $ 20,092 $
— $ 20,092 58.0%
57.0%
(1)
(2)
Acquisitions for the U.S Segment include onPeak (acquired in October 2014). Acquisitions for the International
Segment include Blitz (acquired in September 2014) and N200 (acquired in November 2014).
Organic operating results are non-GAAP financial measures that adjust for the impacts of exchange rate variances and
acquisitions, if any, until such acquisitions are included in the entirety of both comparable periods presented. For more
information about organic operating results, see the “Non-GAAP Measures” section of this MD&A.
U.S. Segment
U.S Segment revenue increased $82.0 million or 13.0 percent, primarily due to positive show rotation revenue of
approximately $69 million, base same-show revenue growth of 6.4 percent, incremental revenue of $6.1 million from the
acquisition of onPeak, and higher revenue from corporate clients, offset in part by the loss of the International Consumer
Electronics Show. Base same-shows represented approximately 39 percent of the 2014 U.S. Segment revenue. Organic
revenue increased $75.9 million or 12.1 percent.
U.S. Segment operating income increased $10.4 million or 94.1 percent, primarily due to higher organic revenue,
offset in part by a non-recurring gain of $4.8 million in 2013 related to the sale of a facility and higher performance-based
incentives in 2014. Organic operating income increased $10.6 million or 96.4 percent.
International Segment
International Segment revenue increased $20.3 million or 8.9 percent, primarily due to incremental revenue of $10.6
million from the acquisitions of Blitz and N200 and a favorable FX Impact of $4.4 million. Organic revenue increased $5.3
million or 2.3 percent.
International Segment operating income increased $1.3 million or 14.0 percent, primarily due to higher organic
revenue, a favorable FX Impact of $0.3 million, and operating income of $0.2 million from the acquisitions of Blitz and
N200. Organic operating income increased $0.8 million or 9.2 percent.
27
Travel & Recreation Group
2015 compared with 2014
The following table provides a comparison of the Travel & Recreation Group’s reported operating results to organic
operating results for the years ended December 31, 2015 and 2014 in order to better understand the underlying performance
of the segment without the effects of acquisitions or FX Impact.
Year Ended December 31, 2015
As
Reported
Acquisitions
(1)
FX
Impact
Organic
(2)
Year Ended December 31, 2014
Acquisitions
As
(1)
Reported
Organic
(2)
Change
As
Reported
Organic
(2)
(in thousands)
Revenue:
Travel & Recreation
Group:
Hospitality ........... $ 41,605 $
Attractions ........... 42,405
Package Tours ..... 15,863
Transportation ..... 13,999
Intra-Segment
Eliminations &
Other .................
(1,702 )
Total Travel &
Recreation Group ... $ 112,170 $
Segment operating
income:
Total Travel &
Recreation Group ... $ 27,810 $
5,470 $ (1,997) $ 38,132 $ 42,689 $
— (7,444) 49,849 44,691
— (2,453) 18,316 19,336
— (2,111) 16,110 15,954
(2.5)%
4,637 $ 38,052
(5.1)%
— 44,691
— 19,336 (18.0)%
— 15,954 (12.3)%
0.2%
11.5%
(5.3)%
1.0%
—
300
(2,002)
(2,151)
—
(2,151 ) 20.9%
6.9%
5,470 $ (13,705) $120,405 $120,519 $
4,637 $115,882
(6.9)%
3.9%
1,547 $ (4,638) $ 30,901 $ 28,127 $
1,511 $ 26,616
(1.1)%
16.1%
(1)
(2)
Acquisitions include the West Glacier Properties (acquired in July 2014).
Organic operating results are non-GAAP financial measures that adjust for the impacts of exchange rate variances and
acquisitions, if any, until such acquisitions are included in the entirety of both comparable periods presented. For more
information about organic operating results, see the “Non-GAAP Measures” section of this MD&A.
Travel & Recreation Group revenue decreased $8.3 million or 6.9 percent, primarily due to an unfavorable FX
Impact of $13.7 million. Organic revenue increased $4.5 million or 3.9 percent, primarily due to higher effective ticket prices
at the attractions and an increase in the number of passengers at the Columbia Icefield Glacier Adventure.
Travel & Recreation Group operating income decreased $0.3 million or 1.1 percent, primarily due to an unfavorable
FX Impact of $4.6 million. Organic operating income increased $4.3 million or 16.1 percent, primarily driven by increased
attractions revenue.
2016 Outlook
Management expects the Travel & Recreation Group’s revenue to be down low-single digits from 2015 due to changes
in Brewster’s package tours and transportation lines of business, which are expected to impact revenue by approximately $7
million to $9 million as management streamlines those operations to focus on higher return opportunities, an unfavorable FX
Impact, and renovation closures at the Banff Gondola which are expected to decrease revenue by approximately $1 million.
Management anticipates an unfavorable FX Impact on the Travel & Recreation Group’s 2016 full year revenue and segment
operating income of approximately $8 million and $2 million, respectively.
Management expects the January 2016 acquisition of Maligne Tours Ltd. (“Maligne Lake Tours”) to provide revenue
of approximately $5 million and Adjusted Segment EBITDA of approximately $2 million.
28
2014 compared with 2013
The following table provides a comparison of the Travel & Recreation Group’s reported operating results to organic
operating results for the years ended December 31, 2014 and 2013 in order to better understand the underlying performance
of the segment without the effects of acquisitions or FX Impact.
Year Ended December 31, 2014
As
Reported
Acquisitions
(1)
FX
Impact
Organic
(2)
(in thousands)
Revenue:
Travel & Recreation
Group:
Year Ended December 31, 2013
As
Reported Acquisitions
Organic
(2)
Change
As
Reported
Organic
(2)
Hospitality ........... $ 42,689 $
Attractions ........... 44,691
Package Tours ..... 19,336
Transportation ..... 15,954
Intra-Segment
Eliminations &
Other .................
(2,151 )
Total Travel &
Recreation Group ... $ 120,519 $
Segment operating
income:
Total Travel &
Recreation Group ... $ 28,127 $
4,637 $ (804) $ 38,856 $ 38,236 $
— (2,290) 46,981 36,102
(847) 20,183 18,950
—
(904) 16,858 17,247
—
— $ 38,236 11.6%
— 36,102 23.8%
2.0%
— 18,950
(7.5)%
— 17,247
1.6%
30.1%
6.5%
(2.3)%
—
110
(2,261)
(2,092)
—
(2,092 )
(2.8)%
(8.1)%
4,637 $ (4,735) $120,617 $108,443 $
— $108,443 11.1%
11.2%
1,511 $ (877) $ 27,493 $ 21,819 $
— $ 21,819 28.9%
26.0%
(1)
(2)
Acquisitions include the West Glacier Properties (acquired in July 2014).
Organic operating results are non-GAAP financial measures that adjust for the impacts of exchange rate variances and
acquisitions, if any, until such acquisitions are included in the entirety of both comparable periods presented. For more
information about organic operating results, see the “Non-GAAP Measures” section of this MD&A.
Travel & Recreation Group revenue increased $12.1 million or 11.1 percent, primarily driven by attractions and
incremental revenue of $4.6 million from the West Glacier Properties acquisition, offset in part by an unfavorable FX Impact
of $4.7 million. Organic revenue increased $12.2 million or 11.2 percent, primarily due to the opening of the Glacier
Skywalk attraction and increased passenger counts at the Columbia Icefield Glacier Adventure, the Banff Gondola, and the
Banff Lake Cruise. Hospitality revenue increased slightly primarily due to increases at the Banff International Hotel, the
Mount Royal Hotel, and the Glacier View Inn, which benefitted from strong visitation to Banff and Jasper National Parks, as
well as Grouse Mountain Lodge driven by the Company’s renovations in 2012 and 2013. The increases at these properties
were offset in part by decreased revenue at the Denali Backcountry Lodge due to flooding at the end of June 2014 and at
Glacier Park Lodge which experienced especially strong occupancy in 2013 as a result of its centennial anniversary.
Transportation revenue decreased primarily due to reduced business for the Denali Backcountry Adventure. Package tours
revenue increased primarily due to higher group and individual business.
Travel & Recreation Group operating income increased $6.3 million or 28.9 percent, primarily due to higher
revenue, offset in part by an unfavorable FX Impact of $0.9 million. Organic operating income increased $5.7 million or 26.0
percent, primarily driven by increased attractions revenue.
Performance Measures
Management uses the following key business metrics to evaluate the Travel & Recreation Group hospitality business:
revenue per available room (“RevPAR”), average daily rate (“ADR”), and occupancy. These metrics are commonly used in
the hospitality industry to measure performance.
Revenue per Available Room. RevPAR is calculated as total rooms revenue divided by the total number of
room nights available for all comparable Travel & Recreation Group hospitality properties during the period.
Total rooms revenue does not include non-rooms revenue, which consists of ancillary revenue generated by
hospitality properties, such as food and beverage and retail revenue. RevPAR measures the period-over-period
change in rooms revenue for comparable hospitality properties. RevPAR is affected by average daily rate and
occupancy, which have different implications on profitability.
29
Average Daily Rate. ADR is calculated as total rooms revenue divided by the total number of room nights sold
for all comparable Travel & Recreation Group hospitality properties during the period. ADR is used to assess the
pricing levels that the hospitality properties are able to generate. Increases in ADR at hospitality properties lead
to increases in rooms revenue with no substantial effect on variable costs, therefore having a greater impact on
margins than increases in occupancy.
Occupancy. Occupancy is calculated as the total number of room nights sold divided by the total number of
room nights available for all comparable Travel & Recreation Group hospitality properties during the period.
Occupancy measures the utilization of the available capacity at the hospitality properties. Increases in occupancy
result in increases in rooms revenue and additional variable operating costs (including housekeeping services,
utilities, and room amenity costs), as well as increased ancillary non-rooms revenue (including food and
beverage and retail revenue).
Management evaluates the performance of the Travel & Recreation Group attractions business utilizing the number of
passengers and total attractions revenue per passenger. The number of passengers allows management to assess the volume of
visitor activity at each attraction during the period. Total attractions revenue per passenger is calculated as total attractions
revenue divided by the total number of passengers at all Travel & Recreation Group attractions during the period. Total
attractions revenue includes ticket sales and ancillary revenue generated by attractions, such as food and beverage and retail
revenue. Total attractions revenue per passenger measures the total spend per visitor that attraction properties are able to
capture, which is important to the profitability of the attractions business.
2015 compared with 2014
The following table provides Travel & Recreation Group same-store key performance indicators for the years ended
December 31, 2015 and 2014. The same-store metrics below indicate the performance of all Travel & Recreation Group
properties and attractions that were owned by Viad and operating at full capacity, considering seasonal closures, for the
entirety of both periods presented. For Travel & Recreation Group properties and attractions located in Canada, comparisons
to the prior year are on a constant U.S. dollar basis, using the current year quarterly average exchange rates for previous
periods, to eliminate the FX Impact. Management believes that this same-store constant currency basis provides better
comparability between reporting periods.
2015
Year Ended December 31,
2014
Change
Same-Store Key Performance Indicators (1)
Hospitality:
Room nights available ........................................................................
RevPAR .............................................................................................. $
ADR ................................................................................................... $
Occupancy ..........................................................................................
218,915
96 $
144 $
66.7%
218,913
95
139
68.2 %
Attractions:
Passengers ..........................................................................................
Revenue Per Passenger ....................................................................... $
1,340,175
32 $
1,353,314
28
0.0%
1.1%
3.6%
-1.5%
-1.0%
14.3%
(1)
The Same-Store Key Performance Indicators exclude the West Glacier Properties (acquired in July 2014), as it was not
included in the entirety of 2014.
Hospitality. Room nights available were relatively flat in 2015. The slight increase was due to additional room nights
available from the Denali Cabins due to its opening ten days earlier than the prior year as a result of management’s review of
a variety of factors, including the weather conditions, opening dates of other properties in the area, and availability of
seasonal employees. Additionally, the Grouse Mountain Lodge added one guest room in 2015, offset in part by St. Mary
Lodge closing eight days earlier than the prior year due to the Going-to-the-Sun Road closure for construction.
RevPAR increased in 2015 primarily driven by the Alaska Denali Travel and Brewster properties, offset in part by
decreases at certain Glacier Park properties (Glacier Park Lodge, St. Mary Lodge, and Grouse Mountain Lodge) as a result of
forest fires during the third quarter of 2015. ADR increased for the Alaska Denali Travel and Brewster properties due to
higher room rates charged. Occupancy decreased in 2015 primarily due to forest fires that affected certain Glacier Park
properties and decreases at the Banff International Hotel due to planned room renovation activity, offset in part by the Denali
Backcountry Lodge which experienced a strong increase in occupancy in 2015 due to flooding in June 2014.
30
Attractions. Revenue per passenger increased primarily due to higher effective ticket prices. The number of
passengers decreased during 2015 at the Glacier Skywalk, which is attributed to widespread marketing efforts and a strong
opening in 2014, and at the Banff Gondola due to the closure in October 2015 as part of the redevelopment project. The
decrease in the number of passengers was offset in part by an increase in the number of passengers at the Columbia Icefield
Glacier Adventure. Excluding the Banff Gondola fourth quarter passengers, total attraction passengers would have increased
2.4 percent in 2015.
2014 compared with 2013
The following table provides Travel & Recreation Group same-store key performance indicators for the years ended
December 31, 2014 and 2013. The same-store metrics below indicate the performance of all Travel & Recreation Group
properties and attractions that were owned by Viad and operating at full capacity, considering seasonal closures, for the
entirety of both periods presented. For Travel & Recreation Group properties and attractions located in Canada, comparisons
to the prior year are on a constant U.S. dollar basis, using the current year quarterly average exchange rates for previous
periods, to eliminate the FX Impact. Management believes that this same-store constant currency basis provides better
comparability between reporting periods.
2014
Year Ended December 31,
2013
Change
Same-Store Key Performance Indicators (1)
Hospitality:
Room nights available ........................................................................
RevPAR .............................................................................................. $
ADR ................................................................................................... $
Occupancy ..........................................................................................
218,913
102 $
149 $
68.2%
220,989
97
151
64.4 %
Attractions:
Passengers ..........................................................................................
Revenue per passenger ....................................................................... $
1,053,496
37 $
915,598
37
(0.9)%
5.2%
(1.3)%
3.8%
15.1%
—%
(1)
The Same-Store Key Performance Indicators exclude the West Glacier Properties (acquired in July 2014) and the
Glacier Skywalk attraction (opened May 2014), as they were not included in 2013.
Hospitality. The increase in RevPAR in 2014 was primarily due to higher occupancy and ADR at the Mount Royal
Hotel, the Banff International Hotel, and the Glacier View Inn driven by increased visitation to Banff and Jasper National
Parks. The Grouse Mountain Lodge also experienced higher RevPAR driven by the Company’s renovations in 2012 and
2013. These increases were partially offset by reduced occupancy at the Denali Backcountry Lodge, which experienced
flooding early in its operating season, and at Glacier Park Lodge, which experienced especially strong occupancy in 2013 as a
result of its centennial anniversary. The decrease in ADR was primarily driven by offering lower rates at the Prince of Wales
Hotel in response to softer demand as compared to prior year and higher occupancy during the off-peak season at the Grouse
Mountain Lodge when rates were lower. The decrease in room nights available from 2013 to 2014 was due to changes in
seasonal opening and closing dates of certain Glacier Park properties. Management schedules opening and closing dates to
optimize profitability based on anticipated travel patterns, and forecasted occupancy levels and operating expenses.
Attractions. The number of passengers increased in 2014 at all three comparable attractions (Columbia Icefield
Glacier Adventure, Banff Gondola, and Banff Lake Cruise). The attractions benefited from increased park visitation traffic,
favorable weather conditions, and strong combination ticket sales with the Glacier Skywalk. The Banff Lake Cruise
experienced a substantial increase in individual traffic as a result of implementing additional departure times in 2014.
During 2015 and 2014, the Travel & Recreation Group derived approximately 73 percent and 75 percent, respectively,
of revenue and 89 percent and 90 percent, respectively, of segment operating income from its Canadian operations, which are
largely dependent on foreign customer visitation. Accordingly, the strengthening or weakening of the Canadian dollar,
relative to other currencies, could affect customer volumes and the results of operations. Additionally, the Travel &
Recreation Group is affected by consumer discretionary spending on tourism activities.
31
Corporate Activities
(in thousands)
Corporate activities ............. $
2015
2014
2013
Percentage Change
2015 vs. 2014
Percentage Change
2014 vs. 2013
9,720 $
14,348 $
6,755
(32.3 )%
**
Year Ended December 31,
** Change is greater than +/- 100 percent.
2015 compared with 2014
Corporate activities expense decreased $4.6 million during 2015 as compared to 2014, primarily related to consulting
and other transaction-related costs associated with acquisitions incurred primarily during the third and fourth quarters of 2014
and CEO transition costs of $2.7 million incurred during the fourth quarter of 2014, offset in part by costs related to a
shareholder nomination and settlement agreement in 2015.
2014 compared with 2013
Corporate activities expense increased $7.6 million during 2014 as compared to 2013, primarily related to acquisition
transaction-related costs of $4.2 million, CEO transition costs of $2.7 million, and higher 401(k) employer matching
contributions expense due to the depletion of the Company’s common stock held in the Employee Stock Ownership Plan
feature of the Company’s 401(k). Matching contributions are now funded from shares of Viad common stock held in treasury
which have a higher cost to the Company.
Interest Expense
(in thousands)
Interest expense .................. $
2015
2014
2013
Percentage Change
2015 vs. 2014
Percentage Change
2014 vs. 2013
4,535 $
2,015 $
1,234
**
63.3%
Year Ended December 31,
** Change is greater than +/- 100 percent.
2015 compared with 2014
Interest expense increased $2.5 million during 2015 as compared to 2014, primarily due to higher outstanding debt
balances resulting from acquisitions completed during the second half of 2014.
2014 compared with 2013
Interest expense increased $0.8 million during 2014 as compared to 2013, primarily due to higher outstanding debt
balances resulting from acquisitions completed during the second half of 2014.
Restructuring Charges
(in thousands)
Restructuring charges ......... $
2015
2014
2013
Percentage Change
2015 vs. 2014
Percentage Change
2014 vs. 2013
2,956 $
1,637 $
3,793
80.6 %
(56.8)%
Year Ended December 31,
2015 compared with 2014
During 2015, Viad recorded restructuring charges of $3.0 million ($1.9 million after-tax) primarily related to the
elimination of positions and facility consolidations in the Marketing & Events Group, as well as the elimination of certain
positions at the Corporate office and the Travel & Recreation Group. During 2014, Viad recorded net restructuring charges of
$1.6 million ($1.0 million after-tax) primarily related to the elimination of certain positions in the Marketing & Events
Group, net of restructuring recoveries of $0.2 million ($0.1 million after-tax) primarily related to updated estimates of facility
contractual arrangements.
32
2014 compared with 2013
During 2014, Viad recorded net restructuring charges of $1.6 million ($1.0 million after-tax) primarily related to the
elimination of certain positions in the Marketing & Events Group, net of restructuring recoveries of $0.2 million ($0.1
million after-tax) primarily related to updated estimates of facility contractual arrangements. In 2013, Viad recorded net
restructuring charges of $3.8 million ($2.6 million after-tax) primarily related to facility consolidations and the elimination of
certain positions in the Marketing & Events Group. In addition, restructuring charges related to the elimination of certain
positions in the Travel & Recreation Group and at Viad corporate were also recorded in 2013.
Impairment Charges
(in thousands)
Impairment charges ............. $
2015
2014
2013
Percentage Change
2015 vs. 2014
Percentage Change
2014 vs. 2013
96 $
884 $
3,049
(89.1 )%
(71.0)%
Year Ended December 31,
2015 compared with 2014
Viad recorded impairment charges primarily related to the write-off of certain internally developed software of $0.1
million ($0.1 million after-tax) in the Travel & Recreation Group in 2015 and $0.9 million ($0.5 million after-tax) in the
Marketing & Events Group in 2014.
2014 compared with 2013
In 2014, Viad recorded impairment charges of $0.9 million ($0.5 million after-tax) in the Marketing & Events Group
primarily related to the write-off of certain internally developed software. In 2013, Viad recorded impairment charges of
approximately $3.0 million ($1.6 million after-tax) related to the non-cash write-down of goodwill at Glacier Park of $2.1
million ($1.0 million after-tax) and $1.0 million ($0.6 million after-tax) related to the write-off of certain assets within the
Marketing & Events Group.
Income Taxes
The effective tax rates for the years ended December 31, 2015, 2014, and 2013 were 27.7 percent, 0.2 percent, and 30.1
percent, respectively. The effective tax rate in 2015 included a $1.6 million non-cash tax benefit related to deferred taxes
associated with certain foreign intangibles. The decrease in the effective tax rate for 2014 compared to 2013 was primarily
due to the release of the valuation allowance related to foreign tax credit and state NOL carryforwards.
Discontinued Operations
On December 31, 2013, Glacier Park’s concession contract with the Park Service to operate lodging, tour and
transportation and other hospitality services for Glacier National Park expired. Upon completion of the contract term, Viad
received cash payments in January 2014 of $25.0 million for the Company’s possessory interest. This resulted in a pre-tax
gain of $21.5 million and an after-tax gain of $13.5 million which was recorded as income from discontinued operations. In
addition, 2014 income from discontinued operations included approximately $0.7 million, net of tax, related to the gain on
sale of personal property at Glacier Park, as well as an insurance recovery of $0.3 million, net of tax. During 2015 and 2014,
the Company recorded $0.4 million and $0.1 million, respectively, net of tax, due to additional reserves related to certain
liabilities associated with previously sold operations.
The Company’s 2013 results related to the operations of Glacier Park’s concession contract business have been
reclassified as discontinued operations. Accordingly, for the 2013 full year, approximately $19 million in revenue and $4
million in operating income have been reclassified to discontinued operations. In addition, 2013 income from discontinued
operations included $1.1 million, net of tax, primarily related to the sale of land associated with a previously sold operation.
Liquidity and Capital Resources
Cash and cash equivalents were $56.5 million as of December 31, 2015, as compared to $57.0 million as of
December 31, 2014. During 2015, the Company generated net cash flows from operating activities of $60.3 million primarily
from results of operations. Management believes that Viad’s existing sources of liquidity will be sufficient to fund operations
and capital commitments for at least the next 12 months.
33
As of December 31, 2015, the Company had approximately $53.5 million of its cash and cash equivalents held outside
of the United States, consisting of $34.7 million in Canada, $11.9 million in the United Kingdom, $4.9 million in the
Netherlands, $1.1 million in Germany, and $0.9 million in the United Arab Emirates. There are certain earnings related to the
Company’s Canadian operations that have historically been deemed permanently reinvested. As of December 31, 2015, the
incremental tax associated with these earnings, if the cash balances were repatriated to the United States, would approximate
$2.3 million.
Cash Flows
Operating Activities
(in thousands)
Net income ................................................................................................. $
Depreciation and amortization ...................................................................
Deferred income taxes ...............................................................................
(Income) loss from discontinued operations ..............................................
Other non-cash items .................................................................................
Changes in assets and liabilities .................................................................
Net cash provided by operating activities ......................................... $
2015
December 31,
2014
27,048 $
35,231
469
394
11,186
(14,051)
60,277 $
55,567 $
30,792
(9,731 )
(14,389 )
9,765
(13,914 )
58,090 $
2013
21,686
27,967
2,298
(2,366)
11,471
(55,001)
6,055
2015 compared with 2014
Net cash provided by operating activities increased $2.2 million in 2015, primarily due to changes in working capital.
2014 compared with 2013
Net cash provided by operating activities increased $52.0 million in 2014, primarily due to higher net income and
favorable working capital mainly reflecting the volume and timing of revenue in the Marketing & Events Group.
Investing Activities
(in thousands)
Capital expenditures................................................................................... $
Proceeds from dispositions of property and other assets ...........................
Cash paid for acquired businesses .............................................................
Proceeds from possessory interest and personal property - discontinued
operations ................................................................................................
Proceeds from sale of facility and related land ..........................................
Proceeds from sale of land - discontinued operations ................................
Net cash used in investing activities .................................................. $
2015
December 31,
2014
2013
(29,839) $
1,542
(430)
(29,389 ) $
1,109
(120,251 )
—
—
—
(28,727) $
28,000
—
—
(120,531 ) $
(36,119)
464
(647)
—
12,696
1,645
(21,961)
2015 compared with 2014
Net cash used in investing activities decreased $91.8 million in 2015, primarily due to the cash payments of $120.3
million for the acquisitions of Blitz, onPeak, N200, and the West Glacier Properties in 2014, offset in part by $28.0 million
received in 2014 for the Company’s possessory interest and personal property at Glacier Park.
2014 compared with 2013
Net cash used in investing activities increased $98.6 million in 2014, primarily due to the cash payments of $120.3
million for the acquisitions of Blitz, onPeak, N200, and the West Glacier Properties in 2014, offset in part by $28.0 million
received in 2014 for the Company’s possessory interest and personal property at Glacier Park, and the proceeds from the sale
of facility and land in 2013.
34
Financing Activities
(in thousands)
Proceeds from borrowings ......................................................................... $
Payments on debt and capital lease obligations .........................................
Dividends paid on common stock ..............................................................
Common stock purchased for treasury .......................................................
Acquisition of business - deferred consideration .......................................
Debt issuance costs ....................................................................................
Other ..........................................................................................................
Net cash provided by (used in) financing activities ......................... $
2015
December 31,
2014
2013
50,000 $
(62,969)
(8,036)
(4,816)
(896)
—
1,459
(25,258) $
189,512 $
(61,461 )
(38,387 )
(12,321 )
—
(1,671 )
1,269
76,941 $
20,000
(11,362)
(58,914)
(1,328)
—
—
1,199
(50,405)
2015 compared with 2014
The change in net cash provided by (used in) financing activities was primarily due to a decrease in net borrowings of
$141.0 million, offset in part by a decrease in dividends paid of $30.4 million related to a special cash dividend of $1.50 per
share paid in 2014, and a decrease in cash used for common stock repurchases of $7.5 million. An additional amount of $0.9
million was paid during 2015 as a result of an election made by the Company to treat the Travel Planners, Inc. purchase as an
asset acquisition for tax purposes.
2014 compared with 2013
The change in net cash provided by (used in) financing activities was primarily due to an increase in net borrowings of
$119.4 million and a decrease in dividends paid of $20.5 million, offset in part by an increase in cash used for common stock
repurchases of $11.0 million. Special cash dividends of $1.50 per share and $2.50 per share were paid in 2014 and 2013,
respectively.
Debt and Capital Lease Obligations
Refer to Note 11 – Debt and Capital Lease Obligations of the Notes to Consolidated Financial Statements (Part II, Item
8 of this Annual Report on Form 10-K) for further discussion.
Guarantees
Refer to Note 11 – Debt and Capital Lease Obligations of the Notes to Consolidated Financial Statements (Part II, Item
8 of this Annual Report on Form 10-K) for further discussion.
Share Repurchases
The Board of Directors authorized the Company to repurchase shares of its common stock from time to time at
prevailing market prices. During 2015 and 2014, the Company repurchased 141,462 shares and 448,436 shares on the open
market for $3.8 million and $10.6 million, respectively. As of December 31, 2015, 440,540 shares remained available for
repurchase. The authorization of the Board of Directors does not have an expiration date. In addition, during 2015 and 2014,
the Company repurchased 35,649 shares and 72,996 shares for $1.0 million and $1.8 million, respectively, related to tax
withholding requirements on vested share-based awards.
35
Contractual Obligations
The following table presents Viad’s contractual obligations as of December 31, 2015:
(in thousands)
Revolver and term loan borrowings ................................. $
Operating leases ...............................................................
Pension and postretirement benefits (1) .............................
Purchase obligations (2) ....................................................
Capital lease obligations ..................................................
Estimated interest payments ............................................
Total contractual obligations (3) ............................... $
2016
33,750 $
20,962
3,116
18,329
804
122
77,083 $
Payments due by period
2017-2018
2019-2020 Thereafter
Total
37,500 $
35,004
6,609
8,086
671
106
87,976 $
56,250 $
24,440
6,847
1,663
—
—
— $ 127,500
90,528
33,451
28,078
1,475
228
89,200 $ 27,001 $ 281,260
10,122
16,879
—
—
—
(1)
(2)
(3)
Estimated contributions related to multi-employer benefit plans are excluded from the table above. Refer to Note 18 -
Pension and Postretirement Benefits of the Notes to Consolidated Financial Statements (Part II, Item 8 of this Annual
Report on Form 10-K) for further information.
Purchase obligations primarily represent payments due under various licensing agreements and commitments related to
consulting and other contracted services that are enforceable and legally binding and that specify all significant terms,
including open purchase orders.
Aggregate self-insurance liabilities of $30.7 million are excluded from the table above as the timing and amounts of
future cash outflows are uncertain. Refer to Note 9 - Other Current Liabilities and Note 10 - Other Deferred Liabilities
of the Notes to Consolidated Financial Statements (Part II, Item 8 of this Annual Report on Form 10-K) for further
information.
Viad and certain of its subsidiaries are plaintiffs or defendants to various actions, proceedings, and pending claims,
some of which involve, or may involve, compensatory, punitive, or other damages. Additionally, Viad’s businesses
contribute to various multi-employer pension plans based on obligations arising under collective-bargaining agreements
covering its union-represented employees. Refer to Note 21 – Litigation, Claims, Contingencies, and Other of the Notes to
Consolidated Financial Statements (Part II, Item 8 of this Annual Report on Form 10-K) for further information.
Off-Balance Sheet Arrangements
Viad has not entered into any off-balance sheet arrangements with unconsolidated special-purpose or other entities that
would materially affect the Company’s financial position, results of operations, liquidity, or capital resources. Furthermore,
Viad does not have any relationships with special-purpose or other entities that provide off-balance sheet financing; liquidity,
market risk, or credit risk support; or engage in leasing or other services that may expose the Company to liability or risks of
loss that are not reflected in Viad’s consolidated financial statements and related notes. Refer to Note 11 – Debt and Capital
Lease Obligations, Note 20 – Leases and Other, and Note 21 - Litigation, Claims, Contingencies, and Other of the Notes to
Consolidated Financial Statements (Part II, Item 8 of this Annual Report on Form 10-K) for further information.
Critical Accounting Policies and Estimates
Viad’s financial statements have been prepared in conformity with U.S. GAAP. The preparation of financial statements
requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and
expenses. Critical accounting policies are defined as those policies that are most important to the portrayal of a company’s
financial position and results of operations, and that require a company to make its most difficult and subjective judgments,
often as a result of the need to make estimates of matters that are inherently uncertain. Based on these criteria, Viad has
identified and discussed with its audit committee the following critical accounting policies and estimates pertaining to Viad,
and the methodology and disclosures related to those estimates:
Goodwill — 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. Viad’s reporting units are defined, and goodwill is tested, at either an operating
segment level or at the component level of an operating segment, 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.
36
For the Marketing & Events U.S. Segment, goodwill is assigned to and tested at the operating segment level (all
domestic operations of GES). For the Marketing & Events International Segment, goodwill is assigned to and tested based on
the segment’s geographical operations (GES EMEA and GES Canada). For the Travel & Recreation Group, impairment
testing is performed at the reporting unit level (Brewster, Alaska Denali Travel, and Glacier Park).
Viad uses a discounted expected future cash flow methodology (income approach) in order to estimate the fair value of
its reporting units for purposes of goodwill impairment testing. 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.
The most critical assumptions and estimates in determining the estimated fair value of its 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. The assumed reporting unit cost of capital rates (discount rates) are estimated 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 its fair value estimates, the Company performs a reconciliation of the aggregate fair values of its
reporting units to Viad’s 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, however, have inherent uncertainties, and different assumptions could lead to materially
different results. As of December 31, 2015, Viad’s aggregate goodwill was $185.2 million. As a result of the Company’s
most recent impairment analysis performed as of October 31, 2015, the excess of the estimated fair value over the carrying
value (expressed as a percentage of the carrying amounts) under step one of the impairment test for each of the Marketing &
Events Group’s reporting units in the U.S., GES EMEA, and GES Canada, was 146 percent, 132 percent, and 91 percent,
respectively. For the Brewster, Alaska Denali Travel, and Glacier Park reporting units, the excess of the estimated fair value
over the carrying value was 146 percent, 48 percent, and 10 percent, respectively. Significant reductions in the Company’s
expected future revenue, operating income, or cash flow forecasts and projections, or an increase in a reporting unit’s cost of
capital, could trigger additional goodwill impairment testing, which may result in impairment charges.
Income taxes — Viad is required to estimate and record provisions for income taxes in each of the jurisdictions in
which the Company operates. Accordingly, the Company must estimate its actual current income tax liability, and assess
temporary differences arising from the treatment of items for tax purposes, as compared to the treatment for accounting
purposes. These differences result in deferred tax assets and liabilities which are included in Viad’s consolidated balance
sheet. The Company uses significant judgment in forming conclusions regarding the recoverability of its deferred tax assets
and evaluates all available positive and negative evidence to determine if it is more-likely-than-not that the deferred tax assets
will be realized. To the extent recovery does not appear likely, a valuation allowance must be recorded. As of December 31,
2015 and 2014, Viad had gross deferred tax assets of $64.6 million and $69.2 million, respectively. These deferred tax assets
reflect the expected future tax benefits to be realized upon reversal of deductible temporary differences, and the utilization of
net operating loss and tax credit carryforwards.
During the third quarter of 2014, the Company released a $10.1 million valuation allowance associated with foreign
income tax credits. The Company considered all available positive and negative evidence regarding the future recoverability
of the foreign tax credits, including recent operating history, future reversals of deferred tax liabilities, utilization history, and
projected future U.S. taxable income. Based on the evaluation of all positive and negative evidence, it was determined to be
more-likely-than-not that the foreign tax credits carryforwards would be utilized before their expiration. At the end of 2015,
the remaining foreign tax credit carryforwards are $9.2 million. If not utilized, the tax credits will begin to expire during
2020.
While management believes that the deferred tax assets, net of existing valuation allowances, will be utilized in future
periods, there are inherent uncertainties regarding the ultimate realization of these assets. It is possible that the relative weight
of positive and negative evidence regarding the realization of deferred tax assets may change, which could result in a material
increase or decrease in the Company’s valuation allowance. Such a change could result in a material increase or decrease to
income tax expense in the period the assessment was made.
Viad has not recorded deferred taxes on certain historical unremitted earnings of its subsidiaries located in Canada, the
United Kingdom, and the Netherlands as management intends to reinvest those earnings in its operations. As of
December 31, 2015, the incremental unrecognized tax liability (net of estimated foreign tax credits) related to those
undistributed earnings was approximately $3.4 million. To the extent that circumstances change and it becomes apparent that
37
some or all of those undistributed earnings will be remitted to the U.S., Viad would accrue income taxes attributable to such
remittance.
The Company records uncertain tax positions on the basis of a two-step process in which a determination is first made
as to whether it is more-likely-than-not that the tax positions will be sustained on the basis of the technical merits of the
position. For all tax positions meeting this threshold, Viad recognizes the largest amount of tax benefit that is more than 50
percent likely to be realized upon ultimate settlement with the related tax authority.
Pension and postretirement benefits — Viad’s pension plans use traditional defined benefit formulas based on years
of service and final average compensation. Funding policies provide that payments to defined benefit pension trusts shall be
at least equal to the minimum funding required by applicable regulations. The Company presently anticipates contributing
$0.9 million to its funded pension plans and $0.8 million to its unfunded pension plans in 2016.
Viad and certain of its subsidiaries have defined benefit postretirement plans that provide medical and life insurance for
certain eligible employees, retirees, and dependents. The related postretirement benefit liabilities are recognized over the period
that services are provided by employees. In addition, Viad retained the obligations for these benefits for retirees of certain sold
businesses. While the plans have no funding requirements, Viad expects to contribute $1.1 million to the plans in 2016.
The assumed health care cost trend rate used in measuring the December 31, 2015 accumulated postretirement benefit
obligation was 7.0 percent, declining one-quarter percent each year to the ultimate rate of 4.5 percent by the year 2025 and
remaining at that level thereafter. The assumed health care cost trend rate used in measuring the December 31, 2014
accumulated postretirement benefit obligation was 7.5 percent, declining one-quarter percent each year to the ultimate rate of
5.0 percent by the year 2025 and remaining at that level thereafter.
A one-percentage-point increase in the assumed health care cost trend rate for each year would increase the
accumulated postretirement benefit obligation as of December 31, 2015 by approximately $1.5 million and the total of
service and interest cost components by approximately $0.1 million. A one-percentage-point decrease in the assumed health
care cost trend rate for each year would decrease the accumulated postretirement benefit obligation as of December 31, 2015
by approximately $1.3 million and the total of service and interest cost components by approximately $0.1 million.
The discount rates used in determining future pension and postretirement benefit obligations are based on rates
determined by actuarial analysis and management review, and reflect the estimated rates of return on a high-quality,
hypothetical bond portfolio whose cash flows match the timing and amounts of expected benefit payments. Refer to Note 18
– Pension and Postretirement Benefits of the Notes to Consolidated Financial Statements (Part II, Item 8 of this Annual
Report on Form 10-K) for further information.
Share-based compensation — Viad grants share-based compensation awards to officers, directors, and certain key
employees pursuant to the 2007 Viad Corp Omnibus Incentive Plan, which has a 10-year life and provides for the following
types of awards: (a) incentive and non-qualified stock options; (b) restricted stock and restricted stock units; (c) performance
units or performance shares; (d) stock appreciation rights; (e) cash-based awards; and (f) certain other stock-based awards.
Share-based compensation expense recognized in the consolidated financial statements in 2015, 2014, and 2013 was
$3.8 million, $2.9 million, and $5.2 million, respectively, and the total tax benefits related to such costs were $1.5 million,
$1.1 million, and $1.9 million respectively. No share-based compensation costs were capitalized during 2015, 2014, or 2013.
The fair value of restricted stock awards is based on Viad’s stock price on the date of grant. Liability-based awards are
recorded at estimated fair value, based on the number of units expected to vest and the level of achievement of predefined
performance goals, where applicable, and are remeasured on each balance sheet date based on Viad’s stock price, or the
Monte Carlo simulation model, until the time of settlement. The Monte Carlo simulation requires the use of a number of
assumptions, including historical volatility and correlation of the price of Viad’s stock and the price of the common shares of
a comparator group, a risk-free rate of return, and an expected term. Viad uses the Black-Scholes option pricing model for
purposes of determining the fair value of each stock option grant for which key assumptions are necessary. These
assumptions include Viad’s expected stock price volatility, the expected period of time the stock option will remain
outstanding, the expected dividend yield on Viad’s common stock, and the risk-free interest rate. While the Company has not
granted stock options since 2010, changes in the assumptions of any future grants could result in different estimates of the
fair value of stock option grants, and consequently impact Viad’s future results of operations. Refer to Note 2 – Share-Based
Compensation of the Notes to Consolidated Financial Statements (Part II, Item 8 of this Annual Report on Form 10-K) for
further information.
38
Impact of Recent Accounting Pronouncements
Refer to Note 1 – Summary of Significant Accounting Policies of the Notes to Consolidated Financial Statements (Part
II, Item 8 of this Annual Report on Form 10-K) for further information.
Forward-Looking Statements
As provided by the safe harbor provision under the Private Securities Litigation Reform Act of 1995, Viad cautions
readers that, in addition to historical information contained herein, this Annual Report includes certain information,
assumptions, and discussions that may constitute forward-looking statements. These forward-looking statements are not
historical facts, but reflect current estimates, projections, expectations, or trends concerning future growth, operating cash
flows, availability of short-term borrowings, consumer demand, new or renewal business, investment policies, productivity
improvements, ongoing cost reduction efforts, efficiency, competitiveness, legal expenses, tax rates and other tax matters,
foreign exchange rates, and the realization of restructuring cost savings. Actual results could differ materially from those
discussed in the forward-looking statements. Viad’s businesses can be affected by a host of risks and uncertainties. Among
other things, natural disasters, gains and losses of customers, consumer demand patterns, labor relations, purchasing decisions
related to customer demand for exhibition and event services, existing and new competition, industry alliances, consolidation
and growth patterns within the industries in which Viad competes, acquisitions, capital allocations, adverse developments in
liabilities associated with discontinued operations, and any deterioration in the economy and other risks discussed in Item 1A,
“Risk Factors,” included in this Annual Report, may individually or in combination impact future results. In addition to
factors mentioned elsewhere, economic, competitive, governmental, technological, capital marketplace, and other factors,
including terrorist activities or war, a pandemic health crisis, and international conditions, could affect the forward-looking
statements in this Annual Report.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Viad’s market risk exposures relate to fluctuations in foreign exchange rates, interest rates, and certain commodity
prices. Foreign exchange risk is the risk that fluctuating exchange rates will adversely affect Viad’s financial condition or
results of operations. Interest rate risk is the risk that changing interest rates will adversely affect the earnings of Viad.
Commodity risk is the risk that changing prices will adversely affect results of operations.
Viad conducts its foreign operations primarily in Canada, the United Kingdom, Germany, and to a lesser extent, in
certain other countries. The functional currency of Viad’s foreign subsidiaries is their local currency. Accordingly, for
purposes of consolidation, Viad translates the assets and liabilities of its foreign subsidiaries into U.S. dollars at the foreign
exchange rates in effect at the balance sheet date. The unrealized gains or losses resulting from the translation of these foreign
denominated assets and liabilities are included as a component of accumulated other comprehensive income in Viad’s
consolidated balance sheets. As a result, significant fluctuations in foreign exchange rates relative to the U.S. dollar may
result in material changes to Viad’s net equity position reported in its consolidated balance sheets. Viad does not currently
hedge its equity risk arising from the translation of foreign denominated assets and liabilities. Viad had cumulative unrealized
foreign currency translation losses recorded in stockholders’ equity of $23.3 million as of December 31, 2015 and gains of
$12.4 million as of December 31, 2014. During 2015 and 2014, unrealized foreign currency translation losses of $35.7
million and $18.4 million, respectively, were recorded in other comprehensive income.
For purposes of consolidation, revenue, expenses, gains, and losses related to Viad’s foreign operations are translated
into U.S. dollars at the average foreign exchange rates for the period. As a result, Viad’s consolidated results of operations
are exposed to fluctuations in foreign exchange rates as the operating results of its foreign operations, when translated, may
vary from period to period, even when the functional currency amounts have not changed. Such fluctuations may adversely
impact overall expected profitability and historical period-to-period comparisons. Viad does not currently hedge its net
earnings exposure arising from the translation of its foreign operating results.
39
The following table summarizes the FX Impact on revenue and segment operating results from Viad’s significant
international operations for 2015 and 2014, excluding the effect of 2014 acquisitions:
Revenue
Weighted-Average
Exchange Rates
2015
2014
FX Impact
(in thousands)
Segment Operating Results
Weighted-Average
Exchange Rates
2015
2014
FX Impact
(in thousands)
Marketing & Events Group:
Canada ............................................ $
United Kingdom ............................. $
Germany ......................................... $
0.78 $
1.53 $
1.11 $
0.90 $
1.65
1.32
(9,420) $
(13,380) $
(3,200) $
(26,000)
0.80 $
1.52 $
1.10 $
0.88 $
1.66
1.35
(336)
(652)
(56)
(1,044)
Travel & Recreation Group:
Canada ............................................ $
0.78 $
0.92
$
(13,705) $
(39,705)
0.78 $
0.93
$
(4,638)
(5,682)
Viad’s 2015 operating results were primarily impacted by the weakening of the British pound and the Canadian dollar
relative to the U.S. dollar.
A hypothetical change of 10 percent in the Canadian dollar exchange rate would have resulted in a change to operating
income of approximately $2.7 million. A hypothetical change of 10 percent in the British pound exchange rate would have
resulted in a change to operating income of approximately $0.7 million. A hypothetical change of 10 percent in the Euro
exchange rate would have resulted in a change to operating income of approximately $0.3 million.
Viad is exposed to foreign exchange transaction risk as its foreign subsidiaries have certain revenue transactions
denominated in currencies other than the functional currency of the respective subsidiary. From time to time, Viad utilizes
forward contracts to mitigate the impact on earnings related to these transactions due to fluctuations in foreign exchange
rates. As of December 31, 2015 and 2014, Viad did not have any foreign currency forward contracts outstanding.
Viad is exposed to short-term and long-term interest rate risk on certain of its debt obligations. Viad currently does not
use derivative financial instruments to hedge cash flows for such obligations.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Refer to Index to Financial Statements for required information.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
Item 9A. CONTROLS AND PROCEDURES
Under the supervision and with the participation of management, including the Chief Executive Officer and Chief
Financial Officer of Viad, the effectiveness of the design and operation of disclosure controls and procedures has been
evaluated as of December 31, 2015, and, based on that evaluation, the Chief Executive Officer and Chief Financial Officer
have concluded that these disclosure controls and procedures are effective as of December 31, 2015. Disclosure controls and
procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the
Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the
SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to
ensure that information required to be disclosed in such reports is accumulated and communicated to management, including
the Chief Executive Officer and Chief Financial Officer, as appropriate to allow for timely decisions regarding required
disclosure.
There were no changes in the Company’s internal control over financial reporting during the fourth quarter of 2015 that
have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.
40
Management’s report on internal control over financial reporting and the report of Viad’s independent registered public
accounting firm, Deloitte & Touche LLP, are provided in this Annual Report immediately prior to the Index to Financial
Statements.
Item 9B. OTHER INFORMATION
Not applicable.
41
PART III
Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information regarding directors of Viad, director nomination procedures, the Audit Committee of Viad’s Board of
Directors and compliance with Section 16(a) of the Securities Exchange Act of 1934, as amended, are included in the Proxy
Statement for the Annual Meeting of Shareholders of Viad to be held on May 19, 2016 (the “Proxy Statement”), under the
captions “Election of Directors,” “Board of Directors and Corporate Governance,” and “Information on Stock Ownership,”
and are incorporated herein by reference. Information regarding executive officers of Viad is located in Part I, “Other -
Executive Officers of Registrant” of this Annual Report on Form 10-K.
Viad has adopted a Code of Ethics for all directors, officers and employees of the Company and its subsidiaries. A
copy of the Company’s Code of Ethics is available at Viad’s website at www.viad.com/pdf/corpgovernance/CodeofEthics.pdf
and is also available without charge to any shareholder upon request by writing to: Viad Corp, 1850 North Central Avenue,
Suite 1900, Phoenix, Arizona 85004-4565, Attention: Corporate Secretary.
Item 11. EXECUTIVE COMPENSATION
Information in the Proxy Statement under the captions “Compensation Discussion and Analysis,” “Board of Directors
and Corporate Governance,” and “Executive Compensation” is incorporated herein by reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
Information in the Proxy Statement under the captions “Executive Compensation” and “Information on Stock
Ownership” is incorporated herein by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Information in the Proxy Statement under the caption “Board of Directors and Corporate Governance” is incorporated
herein by reference.
Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Information regarding principal accounting fees and services and the pre-approval policies and procedures for such fees
and services, as adopted by the Audit Committee of the Board of Directors, is contained in the Proxy Statement under the
caption “Ratification of the Appointment of Deloitte & Touche LLP as Viad’s Independent Public Accountants for 2016” and
is incorporated herein by reference.
Item 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) Financial Statements and Schedules
PART IV
The financial statements listed in the accompanying Index to Financial Statements are filed as part of this Annual
Report on Form 10-K.
The financial statement schedules listed in the accompanying Index to Financial Statements are filed as part of this
Annual Report on Form 10-K.
(b) Exhibits
See Exhibit Index.
42
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in Phoenix, Arizona, on March 11,
2016.
SIGNATURES
VIAD CORP
By:
/s/ Steven W. Moster
Steven W. Moster
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of Viad Corp and in the capacities and on the dates indicated:
Date: March 11, 2016
Date: March 11, 2016
Date: March 11, 2016
Date: March 11, 2016
Principal Executive Officer
By:
/s/ Steven W. Moster
Steven W. Moster
President and Chief Executive Officer
Principal Financial Officer
By:
/s/ Ellen M. Ingersoll
Ellen M. Ingersoll
Chief Financial Officer
Principal Accounting Officer
By:
/s/ Leslie S. Striedel
Leslie S. Striedel
Chief Accounting Officer
Directors
Andrew B. Benett
Isabella Cunningham
Richard H. Dozer
Edward E. Mace
Robert E. Munzenrider
Margaret E. Pederson
Joshua E. Schechter
By:
/s/ Ellen M. Ingersoll
Ellen M. Ingersoll
Attorney-in-Fact
43
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The management of Viad Corp (“Viad” or the “Company”) is responsible for establishing and maintaining adequate
internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f)
promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the
Company’s principal executive and principal financial officers and effected by the Company’s board of directors,
management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the
United States of America and includes those policies and procedures that:
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of the Company;
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with accounting principles generally accepted in the United States of America, and that
receipts and expenditures of the Company are being made only in accordance with authorizations of management
and directors of the Company; and
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All
internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined
to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or
detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features
of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not
eliminate, this risk.
Management performed an assessment of the effectiveness of Viad’s internal control over financial reporting using the
criteria described in the “Internal Control - Integrated Framework (2013),” issued by the Committee of Sponsoring
Organizations of the Treadway Commission. The objective of this assessment was to determine whether Viad’s internal
control over financial reporting was effective as of December 31, 2015.
Based on its assessment, management concluded that, as of December 31, 2015, Viad’s internal control over financial
reporting is effective based on those criteria.
Viad’s independent registered public accounting firm, Deloitte & Touche LLP, has issued a report relating to its audit
of the effectiveness of Viad’s internal control over financial reporting, which appears on the following page of this Annual
Report.
44
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Viad Corp
Phoenix, Arizona
We have audited the internal control over financial reporting of Viad Corp and subsidiaries (the “Company”) as of
December 31, 2015, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining
effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial
reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our
responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective
internal control over financial reporting was maintained in all material respects. Our audit included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our
opinion.
A company’s internal control over financial reporting is a process designed by, or under the supervision of, the
company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the
company’s board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or
improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on
a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future
periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as
of December 31, 2015, based on the criteria established in Internal Control - Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the consolidated financial statements and financial statement schedule as of and for the year ended December 31,
2015 of the Company and our report dated March 11, 2016 expressed an unqualified opinion on those consolidated financial
statements and financial statement schedule.
/s/ DELOITTE & TOUCHE LLP
Phoenix, Arizona
March 11, 2016
45
INDEX TO FINANCIAL STATEMENTS
Consolidated Balance Sheets ......................................................................................................................................... F-1
Consolidated Statements of Operations ......................................................................................................................... F-2
Consolidated Statements of Comprehensive Income ..................................................................................................... F-3
Consolidated Statements of Stockholders’ Equity ......................................................................................................... F-4
Consolidated Statements of Cash Flows ........................................................................................................................ F-5
Notes to Consolidated Financial Statements .................................................................................................................. F-6
Report of Independent Registered Public Accounting Firm .......................................................................................... F-45
Schedule II – Valuation and Qualifying Accounts ......................................................................................................... F-46
Page
46
VIAD CORP
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
Current assets
Assets
Cash and cash equivalents ...................................................................................... $
Accounts receivable, net of allowances for doubtful accounts of $1,593 and
$1,258, respectively .............................................................................................
Inventories ..............................................................................................................
Other current assets ................................................................................................
Total current assets ....................................................................................................
Property and equipment, net ........................................................................................
Other investments and assets .......................................................................................
Deferred income taxes .................................................................................................
Goodwill ......................................................................................................................
Other intangible assets, net ..........................................................................................
Total Assets ................................................................................................................. $
Current liabilities
Liabilities and Stockholders’ Equity
Accounts payable ................................................................................................... $
Customer deposits ..................................................................................................
Accrued compensation ...........................................................................................
Other current liabilities ...........................................................................................
Current portion of debt and capital lease obligations .............................................
Total current liabilities ..............................................................................................
Long-term debt and capital lease obligations ...............................................................
Pension and postretirement benefits ............................................................................
Other deferred items and liabilities ..............................................................................
Total liabilities ............................................................................................................
Commitments and contingencies
Stockholders’ equity
Viad Corp stockholders’ equity:
Common stock, $1.50 par value, 200,000,000 shares authorized, 24,934,981
shares issued ........................................................................................................
Additional capital ...................................................................................................
Retained deficit .......................................................................................................
Unearned employee benefits and other ...................................................................
Accumulated other comprehensive income (loss):
Unrealized gain on investments ........................................................................
Cumulative foreign currency translation adjustments .......................................
Unrecognized net actuarial loss and prior service credit, net ............................
Common stock in treasury, at cost, 4,771,443 and 4,842,621 shares, respectively ...
Total Viad stockholders’ equity ................................................................................
Noncontrolling interest ..............................................................................................
Total stockholders’ equity .........................................................................................
Total Liabilities and Stockholders’ Equity .............................................................. $
Refer to Notes to Consolidated Financial Statements.
December 31,
2015
2014
56,531 $
56,990
93,800
27,529
17,311
195,171
189,239
39,203
50,137
185,223
33,322
692,295 $
65,497 $
33,128
23,154
29,238
34,554
185,571
94,421
29,629
47,336
356,957
37,402
576,523
(17,866 )
109
346
(23,257 )
(11,265 )
(239,411 )
322,581
12,757
335,338
692,295 $
78,121
32,401
17,440
184,952
199,571
40,674
52,582
194,197
42,967
714,943
61,789
32,720
20,736
27,787
27,856
170,888
113,164
33,427
49,762
367,241
37,402
582,066
(36,427)
23
471
12,416
(13,476)
(247,088)
335,387
12,315
347,702
714,943
F-1
VIAD CORP
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Revenue:
Exhibition and event services ............................................................. $
Exhibits and environments .................................................................
Travel and recreation services ............................................................
Total revenue ..........................................................................................
Costs and expenses:
Costs of services .................................................................................
Costs of products sold ........................................................................
Gain on sale of facility and related land .............................................
Corporate activities .............................................................................
Interest income ...................................................................................
Interest expense ..................................................................................
Restructuring charges .........................................................................
Goodwill impairment charge ..............................................................
Other impairment charges ..................................................................
Total costs and expenses ........................................................................
Income from continuing operations before income taxes...................
Income tax expense ..................................................................................
Income from continuing operations .....................................................
Income (loss) from discontinued operations ............................................
Net income ..............................................................................................
Net income attributable to noncontrolling interest ...................................
Net income attributable to Viad ........................................................... $
Diluted income (loss) per common share:
Continuing operations attributable to Viad common stockholders .......... $
Discontinued operations attributable to Viad common stockholders .......
Net income attributable to Viad common stockholders...................... $
Weighted-average outstanding and potentially dilutive common shares ....
Basic income (loss) per common share:
Continuing operations attributable to Viad common stockholders .......... $
Discontinued operations attributable to Viad common stockholders .......
Net income attributable to Viad common stockholders...................... $
Weighted-average outstanding common shares .......................................
Dividends declared per common share .................................................... $
Amounts attributable to Viad common stockholders
Income from continuing operations ......................................................... $
Income (loss) from discontinued operations ............................................
Net income .............................................................................................. $
2015
Year Ended December 31,
2014
2013
799,752 $
177,126
112,170
1,089,048
772,770 $
171,698
120,519
1,064,987
868,369
166,095
—
9,720
(658)
4,535
2,956
—
96
1,051,113
37,935
10,493
27,442
(394)
27,048
(442)
26,606 $
843,652
161,469
—
14,348
(305 )
2,015
1,637
—
884
1,023,700
41,287
109
41,178
14,389
55,567
(3,213 )
52,354 $
1.34 $
(0.02)
1.32 $
19,981
1.34 $
(0.02)
1.32 $
19,797
0.40 $
27,000 $
(394)
26,606 $
2.02 $
0.57
2.59 $
20,133
2.02 $
0.57
2.59 $
19,804
1.90 $
40,790 $
11,564
52,354 $
685,350
159,554
108,443
953,347
758,466
157,745
(4,775)
6,755
(550)
1,234
3,793
2,097
952
925,717
27,630
8,310
19,320
2,366
21,686
(131)
21,555
0.96
0.10
1.06
20,265
0.96
0.10
1.06
19,850
2.90
19,437
2,118
21,555
Refer to Notes to Consolidated Financial Statements.
F-2
VIAD CORP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(in thousands)
Net income .............................................................................................. $
Other comprehensive income:
Unrealized gains (losses) on investments, net of tax effects of $(78),
$26, and $96....................................................................................
Unrealized foreign currency translation losses net of tax ...................
Change in net actuarial gain (loss), net of tax effects of $653,
2015
Year Ended December 31,
2014
2013
27,048 $
55,567 $
21,686
(125)
(35,673)
42
(18,431 )
154
(11,311)
$(1,538), and $2,380 .......................................................................
2,556
(2,568 )
4,244
Change in prior service credit (cost), net of tax effects of $(210),
$339, and $(327) .............................................................................
Comprehensive income (loss) ................................................................
Comprehensive income attributable to noncontrolling interest ........
Comprehensive income (loss) attributable to Viad ............................. $
(345)
(6,539)
(442)
(6,981) $
351
34,961
(3,213 )
31,748 $
(535)
14,238
(131)
14,107
Refer to Notes to Consolidated Financial Statements.
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VIAD CORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Cash flows from operating activities
Net income............................................................................................................ $
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization ........................................................................
Deferred income taxes ....................................................................................
(Income) loss from discontinued operations ...................................................
Restructuring charges .....................................................................................
Impairment charges.........................................................................................
Gain on sale of facility and related land..........................................................
Gains on dispositions of property and other assets .........................................
Share-based compensation expense ................................................................
Excess tax benefit from share-based compensation arrangements..................
Other non-cash items, net ...............................................................................
Change in operating assets and liabilities (excluding the impact of
acquisitions):
Receivables ...............................................................................................
Inventories ................................................................................................
Accounts payable......................................................................................
Restructuring liabilities.............................................................................
Accrued compensation..............................................................................
Customer deposits.....................................................................................
Income taxes payable................................................................................
Other assets and liabilities, net..................................................................
Net cash provided by operating activities .........................................................
Cash flows from investing activities
Capital expenditures .......................................................................................
Cash paid for acquired businesses...................................................................
Proceeds from dispositions of property and other assets.................................
Proceeds from possessory interest and personal property - discontinued
operations.....................................................................................................
Proceeds from sale of facility and related land ...............................................
Proceeds from sale of land—discontinued operations ....................................
Net cash used in investing activities...................................................................
Cash flows from financing activities
Proceeds from borrowings ..............................................................................
Payments on debt and capital lease obligations ..............................................
Acquisition of business - deferred consideration ............................................
Dividends paid on common stock ...................................................................
Common stock purchased for treasury............................................................
Debt issuance costs .........................................................................................
Excess tax benefit from share-based compensation arrangements..................
Proceeds from exercise of stock options .........................................................
Net cash provided by (used in) financing activities ..........................................
Effect of exchange rate changes on cash and cash equivalents .............................
Net change in cash and cash equivalents...........................................................
Cash and cash equivalents, beginning of year ..................................................
Cash and cash equivalents, end of year............................................................. $
Supplemental disclosure of cash flow information
Cash paid for income taxes ............................................................................. $
Cash paid for interest ...................................................................................... $
Property and equipment acquired under capital leases.................................... $
Property and equipment purchases in accounts payable and accrued
liabilities ...................................................................................................... $
2015
Year Ended December 31,
2014
2013
27,048
$
55,567
$
21,686
35,231
469
394
2,956
96
—
(690)
3,848
(418)
5,394
(16,665)
4,872
(2,619)
(2,572)
1,469
408
67
989
60,277
(29,839)
(430)
1,542
—
—
—
(28,727)
50,000
(62,969)
(896)
(8,036)
(4,816)
—
418
1,041
(25,258)
(6,751)
(459)
56,990
56,531
10,114
4,199
1,008
2,320
$
$
$
$
$
30,792
(9,731)
(14,389)
1,637
884
—
(958)
2,930
(114)
5,386
(10,441)
(2,555)
18,128
(5,276)
3,663
(6,406)
1,543
(12,570)
58,090
(29,389)
(120,251)
1,109
28,000
—
—
(120,531)
189,512
(61,461)
—
(38,387)
(12,321)
(1,671)
114
1,155
76,941
(3,331)
11,169
45,821
56,990
8,389
1,703
881
780
$
$
$
$
$
27,967
2,298
(2,366)
3,793
3,049
(4,775)
(265)
5,221
(422)
4,870
1,246
7,663
(15,436)
(4,841)
(11,707)
(20,965)
218
(11,179)
6,055
(36,119)
(647)
464
—
12,696
1,645
(21,961)
20,000
(11,362)
—
(58,914)
(1,328)
—
422
777
(50,405)
(2,039)
(68,350)
114,171
45,821
8,498
1,006
832
3,204
Refer to Notes to Consolidated Financial Statements.
F-5
VIAD CORP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements of Viad Corp (“Viad” or the “Company”) have been prepared in
accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the
accounts of Viad and its subsidiaries. All significant intercompany account balances and transactions have been eliminated in
consolidation.
Nature of Business
Viad’s reportable segments consist of Marketing & Events U.S. Segment, Marketing & Events International Segment
(collectively, the “Marketing & Events Group”) and the Travel & Recreation Group.
Marketing & Events Group
The Marketing & Events Group produces exhibitions, events, exhibits, and services some of the most visible and
influential events. The Marketing & Events Group, comprised of Global Experience Specialists, Inc. and affiliates (“GES”),
is a global, full-service provider for live events that helps clients gain more awareness, more engagement, and a greater return
at their events. GES offers a complete range of services and products, from design and production of immersive
environments and brand-based experiences, to audio-visual services, event accommodations, and registration and data
services to material handling, rigging, electrical, furnishings, and other on-site services for clients. In addition, GES offers
clients a full suite of online tools and new technologies to help them more easily manage the complexities of their events.
GES’ clients include event organizers and corporate brand marketers. Corporate brand marketers include exhibitors and
domestic and international corporations that want to promote their brands, services and innovations, feature new products,
and build business relationships. GES serves its clients when they exhibit at shows or when GES is hired to manage their
global exhibit program or corporate event.
Travel & Recreation Group
The Travel & Recreation Group provides experiential travel services in iconic natural and cultural destinations in North
America through its collection of unique hotels, lodges, recreational attractions, and transportation services. The Travel &
Recreation Group is composed of four lines of business: (i) Hospitality; (ii) Attractions; (iii) Package Tours; and (iv)
Transportation. These four lines of business work together, driving economies of scope and meaningful scale in and around
the iconic destinations of Banff, Jasper and Waterton Lakes National Parks in Canada, and Glacier and Denali National Parks
in the United States. The Travel & Recreation Group is composed of Brewster Inc. (“Brewster”), Glacier Park, Inc. (“Glacier
Park”), and Alaskan Park Properties, Inc. (“Alaska Denali Travel”).
Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reported period. Estimates and assumptions are used in accounting for, among
other things, the fair value of Viad’s reporting units used to perform annual impairment testing of recorded goodwill;
allowances for uncollectible accounts receivable; provisions for income taxes, including uncertain tax positions; valuation
allowances related to deferred tax assets; liabilities for losses related to self-insured liability claims; liabilities for losses
related to environmental remediation obligations; sublease income associated with restructuring liabilities; assumptions used
to measure pension and postretirement benefit costs and obligations; assumptions used to determine share-based
compensation costs under the fair value method; and allocation of purchase price of acquired businesses. Actual results could
differ from these and other estimates.
F-6
Cash and Cash Equivalents
Viad considers all highly-liquid investments with remaining maturities when purchased of three months or less to be
cash equivalents. Viad’s cash and cash equivalents consist of cash and bank demand deposits and money market mutual
funds. The Company’s investments in money market mutual funds are classified as available-for-sale and carried at fair
value.
Allowances for Doubtful Accounts
Viad maintains allowances for doubtful accounts to reflect the best estimate of probable losses inherent in the accounts
receivable balance. The allowances for doubtful accounts, including a sales allowance for discounts at the time of sale, is
based upon an evaluation of the aging of receivables, historical trends, and the current economic environment.
Inventories
Inventories, which consist primarily of exhibit design and construction materials and supplies, as well as deferred show
costs, including labor, show purchases, and commissions used in providing convention show services, are stated at the lower
of cost (first-in, first-out and specific identification methods) or market.
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation. Property and equipment are depreciated
using the straight-line method over the estimated useful lives of the assets: buildings, 15 to 40 years; equipment, 3 to 12
years; and leasehold improvements, over the shorter of the lease term or useful life. Property and equipment are tested for
potential impairment whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset
may not be recoverable through undiscounted cash flows.
Capitalized Software
Viad capitalizes certain internal and external costs incurred in developing or obtaining internal use software.
Capitalized costs principally relate to costs incurred to purchase software from third parties, external direct costs of materials
and services, and certain payroll-related costs for employees directly associated with software projects once application
development begins. Costs associated with preliminary project activities, training, and other post-implementation activities
are expensed as incurred. Capitalized software costs are amortized using the straight-line method over the estimated useful
lives of the software, ranging from three to ten years. These costs are included in the consolidated balance sheets under the
caption “Property and equipment, net.”
Goodwill
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. Viad uses a discounted expected future cash flow methodology (income approach) in order to
estimate the fair value of its reporting units for purposes of goodwill impairment testing. 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, however, have inherent
uncertainties and different assumptions could lead to materially different results.
Cash Surrender Value of Life Insurance
Viad has Company-owned life insurance contracts which are intended to fund the cost of certain employee
compensation and benefit programs. These contracts are carried at cash surrender value, net of outstanding policy loans. The
cash surrender value represents the amount of cash the Company could receive if the policies were discontinued before
maturity. The changes in the cash surrender value of the policies, net of insurance premiums, are included as a component of
“Costs of Services” in the consolidated statements of operations.
Self-Insurance Liabilities
Viad is self-insured up to certain limits for workers’ compensation, automobile, product and general liability, property
loss, and medical claims. Viad has also retained certain liabilities related to workers’ compensation and general liability
insurance claims in conjunction with previously sold operations. Provisions for losses for claims incurred, including
estimated claims incurred but not yet reported, are made based on Viad’s prior historical experience, claims frequency,
insurance coverage, and other factors. Viad has purchased insurance for amounts in excess of the self-insured levels.
F-7
Environmental Remediation Liabilities
Viad has retained certain liabilities representing the estimated cost of environmental remediation obligations primarily
associated with previously sold operations. The amounts accrued primarily consist of the estimated direct incremental costs,
on an undiscounted basis, for contractor and other services related to remedial actions and post-remediation site monitoring.
Environmental remediation liabilities are recorded when the specific obligation is considered probable and the costs are
reasonably estimable. Subsequent recoveries from third parties, if any, are recorded through discontinued operations when
realized. The Company maintains environmental insurance that provides coverage for new and undiscovered pre-existing
conditions at both its continuing and discontinued operations.
Fair Value of Financial Instruments
The carrying value of cash and cash equivalents, receivables, and accounts payable approximate fair value due to the
short-term maturities of these instruments. Refer to Note 11 – Debt and Capital Lease Obligations for the estimated fair value
of debt obligations.
Foreign Currency Translation
Viad conducts its foreign operations primarily in Canada, the United Kingdom, Germany, and to a lesser extent, in
certain other countries. The functional currency of Viad’s foreign subsidiaries is their local currency. Accordingly, for
purposes of consolidation, Viad translates the assets and liabilities of its foreign subsidiaries into U.S. dollars at the foreign
exchange rates in effect at the balance sheet date. The unrealized gains or losses resulting from the translation of these foreign
denominated assets and liabilities are included as a component of accumulated other comprehensive income in Viad’s
consolidated balance sheets. For purposes of consolidation, revenue, expenses, gains, and losses related to Viad’s foreign
operations are translated into U.S. dollars at the average foreign exchange rates for the period.
Revenue Recognition
Viad recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have
been rendered, the sales price is fixed or determinable, and collectability is reasonably assured. GES derives revenue
primarily by providing show services to exhibitors participating in exhibitions and events and from the design, construction,
and refurbishment of exhibit booths. Service revenue is recognized at the time services are completed. Service revenue from
event accommodations services is recorded when services are completed and is net of commissions. Exhibits and
environments revenue is accounted for using the completed-contract method. The Travel & Recreation Group generates
revenue through its attractions, hotels, transportation, and sightseeing services. Revenue is recognized at the time services are
performed.
Share-Based Compensation
Viad recognizes and measures compensation costs related to all share-based payment awards using the fair value
method of accounting. These awards generally include restricted stock, stock options, and liability-based awards (including
performance units and restricted stock units). These awards contain forfeiture and non-compete provisions.
The fair value of restricted stock awards is based on Viad’s stock price on the date of grant. Viad issues restricted stock
awards from shares held in treasury. Future vesting of restricted stock is generally subject to continued employment with
Viad or its subsidiaries. Holders of restricted stock have the right to receive dividends and vote the shares, but may not sell,
assign, transfer, pledge, or otherwise encumber the stock, except to the extent restrictions have lapsed.
Restricted stock awards vest between three and five years from the date of grant. Share-based compensation expense
related to restricted stock is recognized using the straight-line method over the requisite service period of approximately three
years except for certain awards with a five-year vesting period whereby expense is recognized based on an accelerated
multiple-award approach over a five-year period. For these awards, 40 percent of the shares vest on the third anniversary of
the grant and the remaining shares vest in 30 percent increments over the subsequent two anniversary dates.
Liability-based awards (including performance units and restricted stock units) are recorded at estimated fair value,
based on the number of units expected to vest and the level of achievement of predefined performance goals, where
applicable, and are remeasured on each balance sheet date based on Viad’s stock price, or the Monte Carlo simulation model,
until the time of settlement. A Monte Carlo simulation requires the use of a number of assumptions, including historical
volatility and correlation of the price of Viad’s stock and the price of the common shares of a comparator group, a risk-free
rate of return, and an expected term. To the extent earned, liability-based awards are settled in cash based on Viad’s stock
F-8
price. Compensation expense related to liability-based awards is recognized ratably over the requisite service period of
approximately three years.
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing
model. Share-based compensation expense related to stock option awards is recognized using the straight-line method over
the requisite service period of approximately five years. The exercise price of stock options is based on the market value of
Viad’s common stock at the date of grant.
Common Stock in Treasury
Common stock purchased for treasury is recorded at historical cost. Subsequent share reissuances are primarily related
to share-based compensation programs and recorded at weighted-average cost.
Income Per Common Share
Viad applies the two-class method in calculating income per common share as unvested share-based payment awards
that contain nonforfeitable rights to dividends are considered participating securities. Accordingly, such securities are
included in the earnings allocation in calculating income per share. Historically, Viad has funded its matching contributions
to employees’ 401(k) accounts through the Company’s leveraged Employee Stock Ownership Plan (“ESOP”) feature of the
Company’s 401(k) defined contribution plan. ESOP shares are treated as outstanding for income per share calculations.
During 2014, the Company depleted these shares and matching contributions are now funded from shares of Viad common
stock held in treasury.
F-9
Impact of Recent Accounting Pronouncements
The following table provides a brief description of recent accounting pronouncements:
Standard
Description
Standards Not Yet Adopted
Date of
adoption
Effect on the financial
statements
ASU 2014-09, Revenue from
Contracts with Customers
(Topic 606)
ASU 2014-12, Compensation -
Stock Compensation (Topic
718) - Accounting for Share-
Based Payments When the
Terms of an Award Provide
that a Performance Target
Could be Achieved after the
Requisite Service Period
ASU 2015-03, Interest -
Imputation of Interest
Simplifying the Presentation of
Debt Issuance Costs
ASU 2015-15, Presentation
and Subsequent Measurement
of Debt Issuance Costs
Associated with Line-of-Credit
Arrangements
ASU 2015-11, Inventory
(Topic 330) - Simplifying the
Measurement of Inventory
ASU 2015-16, Business
Combinations (Topic 805) -
Simplifying the Accounting for
Measurement-Period
Adjustments
ASU 2016-02, Leases (Topic
842)
The standard establishes a new recognition model that
January 1,
The Company is currently
requires revenue to be recognized in a manner to depict the
transfer of goods or services to a customer at an amount that
reflects the consideration expected to be received in
exchange for those goods or services. The Company may
adopt either retrospectively to each prior period presented
with the option to elect certain practical expedients or with
the cumulative effect recognized at the date of initial
application and providing certain disclosures.
2018
evaluating the potential impact
of the adoption of this new
guidance on its financial
position or results of
operations, including the
method of adoption to be used.
The amendment requires that a performance target that
January 1,
The adoption of this guidance
affects vesting, and that could be achieved after the requisite
service period, be treated as a performance condition. As
such, the performance target should not be reflected in
estimating the grant date fair value of the award.
2016
is not expected to have a
significant effect on Viad's
consolidated financial
statements.
The amendments requires debt issuance costs related to a
January 1,
The adoption of this guidance
recognized debt liability be presented in the balance sheet as
a direct deduction from the carrying amount of that debt
liability. For line-of-credit arrangements, an entity may
defer and present debt issuance costs as an asset and
subsequently amortize the deferred debt issuance costs
ratably over the term of the line-of-credit arrangement.
2016
is not expected to have a
significant effect on Viad's
consolidated financial
statements or financial
covenants.
The amendments apply to inventory measures using first-in,
first-out or average cost and will require entities to measure
inventory at the lower of cost or net realizable value. Net
realizable value is the estimated selling price in the normal
course of business, minus the cost of completion, disposal
and transportation. Replacement cost and net realizable
value less a normal profit margin will no longer be
considered.
January 1,
The adoption of this guidance
2017
is not expected to have a
significant effect on Viad's
consolidated financial
statements.
The amendment requires an acquirer recognize adjustments
January 1,
The adoption of this guidance
to provisional amounts that are identified during the
measurement period in the reporting period in which the
adjustment amounts are determined.
2016
The amendment requires lessees to recognize on their
balance sheet a right-of-use asset and a lease liability for
leases with lease terms greater than one year. The
amendment requires additional disclosures about leasing
arrangements, and requires a modified retrospective
approach to adoption. Early adoption is permitted.
January 1,
2019
is not expected to have a
significant effect on Viad's
consolidated financial
statements.
The Company is currently
evaluating the potential impact
of the adoption of this new
guidance on its financial
position or results of
operations.
Standards Recently Adopted
ASU 2015-17, Balance Sheet
Classification of Deferred
Taxes
The amendment simplifies the presentation of deferred taxes
Early adopted on a
December
31, 2015
by requiring all deferred tax assets and liabilities to be
classified as noncurrent on the balance sheet.
F-10
retrospective basis. As a
result, current deferred tax
assets of $22.9 million were
reclassified to non-current on
the December 31, 2014
consolidated balance sheet.
Note 2. Share-Based Compensation
Viad grants share-based compensation awards to officers, directors, and certain key employees pursuant to the 2007
Viad Corp Omnibus Incentive Plan (the “2007 Plan”). The 2007 Plan has a 10-year life and provides for the following types
of awards: (a) incentive and non-qualified stock options; (b) restricted stock and restricted stock units; (c) performance units
or performance shares; (d) stock appreciation rights; (e) cash-based awards; and (f) certain other stock-based awards. The
number of shares of common stock available for grant under the 2007 Plan is limited to 1.7 million shares plus shares
awarded under the 1997 Viad Corp Omnibus Incentive Plan (which terminated in May 2007) (the “1997 Plan”) that
subsequently cease for any reason to be subject to such awards (other than by reason of exercise or settlement of the awards
to the extent the shares are exercised for, or settled in, vested and non-forfeited shares) up to an aggregate maximum of 1.5
million shares. As of December 31, 2015, there were 959,330 total shares available for future grant.
The following table summarizes share-based compensation expense:
(in thousands)
Restricted stock ........................................................................................ $
Performance unit incentive plan (“PUP”) ................................................
Restricted stock units ...............................................................................
Stock options............................................................................................
Share-based compensation before income tax benefit ........................
Income tax benefit ...................................................................................
Share-based compensation, net of income tax benefit ........................ $
2015
Year Ended December 31,
2014
2013
2,111 $
1,692
45
—
3,848
(1,454)
2,394 $
2,495 $
359
76
—
2,930
(1,102 )
1,828 $
3,073
1,864
177
107
5,221
(1,936)
3,285
In addition, $45,000 of costs, $0.1 million of benefits, and $0.7 million of costs associated with share-based
compensation were included in restructuring expense in 2015, 2014 and 2013, respectively. The 2015 amount of $45,000
related to restricted stock units. The 2014 amount of $0.1 million related to the reversal of expense of PUP awards. Of the
2013 amount, $0.3 million related to the restricted stock units and PUP awards. No share-based compensation costs were
capitalized during 2015, 2014, or 2013.
On January 24, 2014 and October 25, 2013, Viad’s Board of Directors declared special cash dividends of $1.50 and
$2.50 per share, respectively, to shareholders of record at the close of business on February 7, 2014 and November 7, 2013,
respectively. In accordance with the mandatory provisions of the 2007 Plan and the 1997 Plan, the Human Resources
Committee of Viad’s Board of Directors approved equitable adjustments to outstanding long-term incentive awards of stock
options and PUP awards issued pursuant to those plans in order to prevent the special dividends from diluting the rights of
participants under those plans. The equitable adjustments to the outstanding stock options reduced the exercise price and
increased the number of shares of common stock underlying such options. The equitable adjustment to the PUP awards
reflects the effect of the special dividends, but will be paid only if certain performance goals are met at the end of the three-
year performance period.
The following table summarizes the activity of the outstanding share-based compensation awards:
Balance, December 31, 2014 ................................ 328,602 $
Granted ..................................................................
92,850 $
Vested .................................................................... (109,050) $
Forfeited .................................................................
(33,185) $
Balance, December 31, 2015 ................................ 279,217 $
23.30 267,120 $
27.52
92,100 $
20.51 (103,555) $
24.51
(24,500) $
25.65 231,165 $
Restricted Stock
PUP Awards
Weighted-
Average
Grant Date
Fair Value
Shares
Shares
Weighted-
Average
Grant Date
Fair Value Shares
Restricted Stock Units
Weighted-
Average
Grant Date
Fair Value
23.17
27.35
20.91
25.46
25.69
23.51 25,370 $
27.30
4,800 $
20.60 (11,623) $
25.23
(2,100) $
26.15 16,447 $
The grant date fair value of restricted stock which vested during 2015, 2014, and 2013 was $2.2 million, $4.5 million,
and $3.5 million, respectively. As of December 31, 2015, the unamortized cost of all outstanding restricted stock awards was
$2.7 million, which Viad expects to recognize in the consolidated financial statements over a weighted-average period of
approximately 1.4 years. During 2015, 2014, and 2013, the Company repurchased 35,649 shares for $1.0 million, 72,996
F-11
shares for $1.8 million and 50,156 shares for $1.3 million, respectively, related to tax withholding requirements on vested
share-based awards.
As of December 31, 2015 and 2014, Viad had liabilities recorded of $2.4 million and $3.5 million, respectively, related
to PUP awards. In March 2015, the PUP units granted in 2012 vested and cash payouts totaling $2.5 million were distributed.
In March 2014, the PUP units granted in 2011 vested and cash payouts totaling $2.9 million were distributed. There were no
cash settlements of PUP awards during 2013. As of December 31, 2015 and 2014, Viad had aggregate liabilities recorded of
$0.3 million and $0.5 million, respectively, related to restricted stock unit liability awards. In February 2015, portions of the
2010, 2011, and 2012 restricted stock unit awards vested and cash payouts totaling $0.3 million were distributed. Similarly,
in February 2014 and 2013, portions of the 2010 and 2011 restricted stock unit awards vested and cash payouts of $0.2
million and $0.3 million were distributed, respectively. As discussed above, the equitable adjustment to the PUP awards
reflects the effect of the special dividends, but would be paid only if certain performance goals are met at the end of the three-
year performance period. This adjustment to the PUP awards did not impact the compensation expense recognized by the
Company for the years ended December 31, 2015 and 2014, or the unrecognized cost.
The following table summarizes stock option activity:
Options outstanding at December 31, 2014 ..........................................
Exercised ...................................................................................................
Forfeited or expired...................................................................................
Options outstanding at December 31, 2015 ..........................................
Shares
247,590 $
(54,076) $
(129,741) $
63,773 $
Weighted-
Average
Exercise Price
17.82
16.62
18.91
16.62
Options
Exercisable
247,590
63,773
As of December 31, 2015, there were no unrecognized costs related to non-vested stock option awards. No stock
options were granted in 2015, 2014, or 2013. As discussed above, the equitable adjustments to the outstanding stock options
resulting from the special cash dividends paid on February 14, 2014 and November 14, 2013 reduced the exercise price and
increased the number of shares of common stock underlying such options. This adjustment to the exercise price and the
number of shares did not impact the compensation expense recognized by the Company for the years ended December 31,
2015 and 2014, or the unrecognized cost.
As of December 31, 2015, there were 63,773 stock options outstanding and exercisable with a weighted-average
exercise price of $16.62 and a weighted-average remaining contractual life of 3.2 years.
Additional information pertaining to stock options is provided in the table below:
(in thousands)
Total intrinsic value of stock options outstanding ......................................... $
Total intrinsic value of stock options exercised ............................................. $
Fair value of stock options vested .................................................................. $
Cash received from the exercise of stock options .......................................... $
Tax benefits realized for tax deductions related to stock option exercises .... $
2015
December 31,
2014
2013
740 $
1,474 $
— $
898 $
104 $
2,251 $
1,616 $
— $
1,155 $
461 $
2,723
1,611
532
777
404
The aggregate intrinsic value of stock options outstanding in the table above represents the difference between Viad’s
closing stock price on December 31 of each year and the exercise price, multiplied by the number of in-the-money options.
The intrinsic value of stock options outstanding therefore changes based on changes in the fair market value of Viad’s
common stock.
Note 3. Acquisition of Businesses
West Glacier Properties
In July 2014, the Company acquired the West Glacier Motel & Cabins, the Apgar Village Lodge and related land, food
and beverage services, and retail operations (collectively, the “West Glacier Properties”). The purchase price was $16.5
million in cash with a working capital adjustment of $0.3 million related to certain current assets and liabilities. The
allocation of the purchase price was completed as of September 30, 2015.
F-12
The following table summarizes the purchase price and opening balance sheet for the West Glacier Properties
acquisition as of the acquisition date:
(in thousands)
Purchase price paid as:
Cash ........................................................................................................................
Working capital adjustment payable ......................................................................
Total purchase price .......................................................................................
$
16,544
320
16,864
Fair value of net assets acquired:
Prepaid expenses .................................................................................................... $
Inventory ................................................................................................................
Property and equipment..........................................................................................
Intangible assets .....................................................................................................
Total assets acquired.......................................................................................
Accrued liabilities ..................................................................................................
Customer deposits ..................................................................................................
Other liabilities .......................................................................................................
Total liabilities acquired ......................................................................................
Total fair value of net assets acquired ...........................................................
Excess purchase price over fair value of net assets acquired (“goodwill”)...........
24
1,374
14,510
189
16,097
35
402
64
501
$
15,596
1,268
Under the acquisition method of accounting, the purchase price as shown in the table above is allocated to the tangible
and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess purchase
price over fair value of net assets acquired was recorded as goodwill. Goodwill is included in the Travel & Recreation Group
and the primary factor that contributed to the purchase price resulting in the recognition of goodwill relates to future growth
opportunities when combined with the Company’s other businesses. Goodwill is deductible for tax purposes over a period of
15 years. The estimated values of current assets and liabilities were based upon their historical costs on the date of acquisition
due to their short-term nature. Transaction costs associated with the acquisition of the West Glacier Properties were $0.2
million in 2014 and were included in corporate activities in Viad’s Consolidated Statements of Operations.
Identified intangible assets acquired in the West Glacier Properties acquisition totaled $0.2 million and consist
primarily of favorable lease contracts. The weighted-average amortization period related to the definite lived intangible assets
is 3.5 years.
The results of operations of the West Glacier Properties have been included in Viad’s consolidated financial statements
from the date of acquisition. During 2014, revenue of $4.6 million and operating income of $1.5 million related to the West
Glacier Properties were included in Viad’s Consolidated Statements of Operations.
Blitz
In September 2014, the Company acquired Blitz Communications Group Limited and its affiliates (collectively,
“Blitz”), which has offices in the United Kingdom and is a leading audio-visual staging and creative services provider for the
live events industry in the United Kingdom and continental Europe. The purchase price was £15 million (approximately
$24.4 million) in cash.
F-13
The following table summarizes the updated allocation of the aggregate purchase price paid and amounts of assets
acquired and liabilities assumed based upon the estimated fair value at the date of acquisition. During 2015, the Company
made certain purchase accounting measurement period adjustments based on refinements to assumptions used in the
preliminary valuation of approximately $49,000 to property and equipment, $16,000 from intangible assets, $0.2 million
from accrued lease obligations, $0.2 million to deferred taxes and $22,000 to goodwill. These adjustments did not have a
significant impact on the Company’s consolidated statements of operations, balance sheet, or cash flows for all periods
presented, and therefore, were not retrospectively adjusted in the 2014 financial statements. Other than the line items
mentioned previously, the balances in the table below as of December 31, 2015 remain unchanged from the balances
reflected in the Consolidated Balance Sheets in the Company’s Annual Report on Form 10-K for the year ended December
31, 2014. The allocation of the purchase price was completed as of September 30, 2015.
(in thousands)
Purchase price paid as:
Cash ........................................................................................................................
Cash acquired .........................................................................................................
Purchase price, net of cash acquired .............................................................
$
24,416
(190)
24,226
Fair value of net assets acquired:
Accounts receivable................................................................................................ $
Inventory ................................................................................................................
Prepaid expenses ....................................................................................................
Property and equipment ..........................................................................................
Intangible assets .....................................................................................................
Total assets acquired .......................................................................................
Accounts payable ...................................................................................................
Accrued liabilities ...................................................................................................
Customer deposits ..................................................................................................
Deferred tax liability...............................................................................................
Revolving credit facility .........................................................................................
Accrued dilapidations .............................................................................................
Total liabilities acquired ......................................................................................
Total fair value of net assets acquired ...........................................................
Excess purchase price over fair value of net assets acquired (“goodwill”) ...........
264
433
410
5,951
8,692
15,750
1,232
2,246
199
468
488
417
5,050
$
10,700
13,526
Under the acquisition method of accounting, the purchase price as shown in the table above is allocated to the tangible
and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess purchase
price over fair value of net assets acquired was recorded as goodwill. Goodwill is included in the Marketing & Events
International Segment and the primary factor that contributed to a purchase price resulting in the recognition of goodwill
relates to future growth opportunities when combined with the Company’s other businesses. The estimated values of current
assets and liabilities were based upon their historical costs on the date of acquisition due to their short-term nature.
Transaction costs associated with the acquisition of Blitz were $0.8 million in 2014 and $0.1 million in 2015 and are included
in corporate activities in Viad’s Consolidated Statements of Operations.
Identified intangible assets acquired in the Blitz acquisition totaled $8.7 million and consist of customer relationships,
non-compete agreements, and trade name. The weighted-average amortization period related to the intangible assets is
approximately 6.9 years.
The results of operations of Blitz have been included in Viad’s consolidated financial statements from the date of
acquisition. During 2014, revenue of $10.1 million and operating income of $0.4 million related to Blitz have been included
in Viad’s Consolidated Statements of Operations.
onPeak LLC
In October 2014, the Company acquired onPeak LLC for a purchase price of $43.0 million in cash. Of the initial
purchase price, $4.1 million was deposited at closing into escrow to secure post-closing purchase price adjustments,
resolution of certain tax matters and other indemnity claims. onPeak LLC provides event accommodations services in North
America to the live events industry.
F-14
The following table summarizes the updated allocation of the aggregate purchase price paid and amounts of assets
acquired and liabilities assumed based upon the estimated fair value at the date of acquisition. During 2015, the Company
made certain purchase accounting measurement period adjustments based on refinements to assumptions used in the
preliminary valuation of approximately $0.2 million from other non-current assets, $0.2 million from intangible assets, $1.4
million to deferred taxes, $0.2 million from other liabilities, and $1.6 million to goodwill. These adjustments did not have a
significant impact on the Company’s consolidated statements of operations, balance sheet, or cash flows for all periods
presented, and therefore, were not retrospectively adjusted in the 2014 financial statements. Other than the line items
mentioned previously, as of December 31, 2015, the balances in the table below remain unchanged from the balances
reflected in the Consolidated Balance Sheets in the Company’s Annual Report on Form 10-K for the year ended December
31, 2014. The allocation of the purchase price was completed as of December 31, 2015.
(in thousands)
Purchase price paid as:
Cash ........................................................................................................................
Cash acquired .........................................................................................................
Purchase price, net of cash acquired .............................................................
$
42,950
(4,064)
38,886
Fair value of net assets acquired:
Accounts receivable................................................................................................ $
Prepaid expenses ....................................................................................................
Property and equipment ..........................................................................................
Other non-current assets .........................................................................................
Intangible assets .....................................................................................................
Total assets acquired .......................................................................................
Accounts payable ...................................................................................................
Accrued liabilities ...................................................................................................
Customer deposits ..................................................................................................
Deferred tax liability...............................................................................................
Other liabilities .......................................................................................................
Total liabilities acquired ......................................................................................
Total fair value of net assets acquired ...........................................................
Excess purchase price over fair value of net assets acquired (“goodwill”) ...........
4,008
640
2,450
129
14,100
21,327
738
3,341
4,225
3,028
129
11,461
$
9,866
29,020
Under the acquisition method of accounting, the purchase price as shown in the table above is allocated to the tangible
and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess purchase
price over fair value of net assets acquired was recorded as goodwill. Goodwill is included in the Marketing & Events U.S.
Segment and the primary factor that contributed to a purchase price resulting in the recognition of goodwill relates to future
growth opportunities when combined with the Company’s other businesses. Goodwill of $9.9 million is deductible for tax
purposes over a period of 15 years. The estimated values of current assets and liabilities were based upon their historical
costs on the date of acquisition due to their short-term nature. Transaction costs associated with the acquisition of onPeak
LLC were $0.5 million in 2014 and $0.2 million in 2015 and are included in corporate activities in Viad’s Consolidated
Statements of Operations.
Identified intangible assets acquired in the onPeak LLC acquisition totaled $14.1 million and consist primarily of
customer relationships and trade name. The weighted-average amortization period related to the definite lived intangible
assets is 9.9 years.
The results of operations of onPeak LLC have been included in Viad’s consolidated financial statements from the date
of acquisition. During 2014, revenue of $2.7 million and an operating loss of $0.7 million related to onPeak LLC have been
included in Viad’s Consolidated Statements of Operations.
Travel Planners, Inc.
In October 2014, the Company acquired Travel Planners, Inc. for a purchase price of $33.7 million in cash less a
working capital adjustment of $0.3 million. Of the purchase price, $8.8 million was deposited at closing into escrow to secure
post-closing purchase price adjustments, resolution of certain tax matters, and other indemnity claims. An additional amount
of $0.9 million was paid during the third quarter of 2015 to Travel Planners, Inc. as a result of an election made by the
F-15
Company to treat the purchase as an asset acquisition for tax purposes. Travel Planners, Inc. provides event accommodations
services in North America to the live events industry. Travel Planners, Inc. was merged into onPeak LLC in January 2015.
The following table summarizes the updated allocation of the aggregate purchase price paid and amounts of assets
acquired and liabilities assumed based upon the estimated fair value at the date of acquisition. During 2015, the Company
made certain purchase accounting measurement period adjustments based on refinements to assumptions used in the
preliminary valuation of $0.6 million from intangible assets, $0.4 million from additional purchase price payable upon tax
election and $0.1 million from other accrued liabilities. These adjustments did not have a significant impact on the
Company’s consolidated statements of operations, balance sheet, or cash flows for all periods presented, and therefore, were
not retrospectively adjusted in the 2014 financial statements. Other than the line items mentioned previously, the balances in
the table below as of December 31, 2015 remain unchanged from the balances reflected in the Consolidated Balance Sheets
in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. The allocation of the purchase price
was completed as of December 31, 2015.
(in thousands)
Purchase price paid as:
Cash ........................................................................................................................
Additional purchase price paid for tax election ......................................................
Working capital adjustment ....................................................................................
Cash acquired .........................................................................................................
Purchase price, net of cash acquired .............................................................
$
33,674
896
(279)
(4,204)
30,087
Fair value of net assets acquired:
Accounts receivable................................................................................................ $
Prepaid expenses ....................................................................................................
Property and equipment ..........................................................................................
Intangible assets .....................................................................................................
Total assets acquired .......................................................................................
Accounts payable ...................................................................................................
Accrued liabilities ...................................................................................................
Customer deposits ..................................................................................................
Total liabilities acquired ......................................................................................
Total fair value of net assets acquired ...........................................................
Excess purchase price over fair value of net assets acquired (“goodwill”) ...........
1,450
120
93
14,400
16,063
488
1,557
4,525
6,570
$
9,493
20,594
Under the acquisition method of accounting, the purchase price as shown in the table above is allocated to the tangible
and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess purchase
price over fair value of net assets acquired was recorded as goodwill. The goodwill is included in the Marketing & Events
U.S. Segment and the primary factor that contributed to a purchase price resulting in the recognition of goodwill relates to
future growth opportunities when combined with the Company’s other businesses. The goodwill is deductible for tax
purposes over a period of 15 years. The estimated values of current assets and liabilities were based upon their historical
costs on the date of acquisition due to their short-term nature. Transaction costs associated with the acquisition of Travel
Planners, Inc. were $0.5 million in 2014 and $0.2 million in 2015 and are included in corporate activities in Viad’s
Consolidated Statements of Operations.
Identified intangible assets acquired in the Travel Planners, Inc. acquisition totaled $14.4 million and consist primarily
of customer relationships, favorable lease contracts and trade name. The weighted-average amortization period related to the
definite lived intangible assets is 9.8 years.
The results of operations of Travel Planners, Inc. have been included in Viad’s consolidated financial statements from
the date of acquisition. During 2014, revenue of $3.4 million and operating income of $0.5 million related to Travel Planners,
Inc. have been included in Viad’s Consolidated Statements of Operations.
N200
In November 2014, the Company acquired N200 Limited and its affiliates (collectively, “N200”) for €9.7 million
(approximately $12.1 million) in cash, plus an earnout payment (the “Earnout”) of up to €1.0 million. The amount of the
F-16
Earnout was based on N200’s achievement of established financial targets for the twelve-month period ended June 30, 2015.
N200 exceeded those financial targets and, consequently, on October 5, 2015, the Company paid the full €1.0 million
(approximately $1.1 million) Earnout to the former owners of N200. N200, which has offices in the United Kingdom and the
Netherlands, is a leading event registration and data intelligence services provider for the live events industry in continental
Europe.
The following table summarizes the updated allocation of the aggregate purchase price paid and amounts of assets
acquired and liabilities assumed based upon the estimated fair value at the date of acquisition. During 2015, the Company
made certain purchase accounting measurement period adjustments based on refinements to assumptions used in the
preliminary valuation of $0.1 million from contingent consideration, $0.5 million to working capital adjustment, $15,000
from accounts receivable, $0.1 million to intangible assets, $0.1 million to accrued liabilities, $0.1 million to deferred taxes
and $0.4 million to goodwill. These adjustments did not have a significant impact on the Company’s consolidated statements
of operations, balance sheet, or cash flows for all periods presented, and therefore, were not retrospectively adjusted in the
2014 financial statements. Other than the line items mentioned previously, the balances in the table below as of December 31,
2015 remain unchanged from the balances reflected in the Consolidated Balance Sheets in the Company’s Annual Report on
Form 10-K for the year ended December 31, 2014. The allocation of the purchase price was completed as of December 31,
2015.
(in thousands)
Purchase price paid as:
Cash ........................................................................................................................
Working capital adjustment ....................................................................................
Contingent consideration ........................................................................................
Cash acquired .........................................................................................................
Purchase price, net of cash acquired .............................................................
$
12,068
458
1,145
(943)
12,728
Fair value of net assets acquired:
Accounts receivable................................................................................................ $
Inventory ................................................................................................................
Prepaid expenses ....................................................................................................
Property and equipment ..........................................................................................
Intangible assets .....................................................................................................
Total assets acquired .......................................................................................
Accounts payable ...................................................................................................
Accrued liabilities ...................................................................................................
Customer deposits ..................................................................................................
Deferred tax liability...............................................................................................
Other liabilities .......................................................................................................
Total liabilities acquired ......................................................................................
Total fair value of net assets acquired ...........................................................
Excess purchase price over fair value of net assets acquired (“goodwill”) ...........
1,732
46
115
1,280
3,682
6,855
421
1,057
569
986
106
3,139
$
3,716
9,012
Under the acquisition method of accounting, the purchase price as shown in the table above is allocated to the tangible
and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess purchase
price over fair value of net assets acquired was recorded as goodwill. Goodwill is included in the Marketing & Events
International Segment and the primary factor that contributed to a purchase price resulting in the recognition of goodwill
relates to future growth opportunities when combined with the Company’s other businesses. The estimated values of current
assets and liabilities were based upon their historical costs on the date of acquisition due to their short-term nature.
Transaction costs associated with the acquisition of N200 were $1.0 million in 2014 and $0.2 million in 2015 and are
included in corporate activities in Viad’s Consolidated Statements of Operations.
Identified intangible assets acquired in the N200 acquisition totaled $3.7 million and consist primarily of customer
relationships. The weighted-average amortization period related to the definite lived intangible assets is 7.4 years.
F-17
The results of operations of N200 have been included in Viad’s consolidated financial statements from the date of
acquisition. During 2014, revenue of $0.4 million and an operating loss of $0.2 million related to N200 have been included in
Viad’s Consolidated Statements of Operations.
Resource Creative Limited
In February 2013, Viad acquired the assets of Resource Creative Limited (“RCL”) for $0.6 million in cash. RCL is a
United Kingdom-based company specializing in providing creative graphic services to the exhibition, events, and retail
markets throughout the United Kingdom and continental Europe. The purchase price was subject to certain adjustments, plus
a deferred payment of up to approximately £0.2 million, which was contingent upon RCL’s achievement of certain net
revenue targets between the acquisition date and December 31, 2014. RCL exceeded the net revenue targets for the period
ended December 31, 2014 and 2013 and, consequently, deferred payment installments in the amount of $0.1 million (£0.1
million) and $0.2 million (£0.1 million), respectively, were paid in January 2015 and March 2014, respectively.
Supplementary pro forma financial information
The following table summarizes the unaudited pro forma results of operations attributable to Viad, assuming the above
acquisitions had each been completed on January 1, 2013:
(in thousands, except per share data)
Revenue ....................................................................................................................... $
Depreciation and amortization ..................................................................................... $
Income from continuing operations ............................................................................. $
Net income attributable to Viad ................................................................................... $
Diluted net income per share ....................................................................................... $
Basic net income per share .......................................................................................... $
Year Ended December 31,
2014
1,109,629
$
38,014 $
44,636 $
55,833 $
2.77 $
2.77 $
2013
1,015,275
38,981
15,317
17,510
0.86
0.86
Pro forma net income for the year ended December 31, 2014 was adjusted to exclude transaction costs associated with
the acquisitions of Blitz, the West Glacier Properties, onPeak LLC, Travel Planners, Inc., and N200, which totaled $3.0
million in 2014 and $0.6 million in 2015. These costs were included in the pro forma net income for the year ended
December 31, 2013.
Note 4. Inventories
The components of inventories consisted of the following:
(in thousands)
Raw materials .............................................................................................................. $
Work in process ...........................................................................................................
Inventories ............................................................................................................. $
December 31,
2015
2014
14,383 $
13,146
27,529 $
16,749
15,652
32,401
F-18
Note 5. Other Current Assets
Other current assets consisted of the following:
(in thousands)
Income tax receivable .................................................................................................. $
Prepaid vendor payments .............................................................................................
Prepaid software maintenance .....................................................................................
Prepaid insurance .........................................................................................................
Prepaid rent ..................................................................................................................
Prepaid taxes ................................................................................................................
Prepaid other ................................................................................................................
Other ............................................................................................................................
Other current assets ............................................................................................. $
December 31,
2015
2014
4,643 $
2,140
2,026
2,024
1,406
1,261
2,777
1,034
17,311 $
1,869
2,689
1,934
2,170
186
1,416
4,427
2,749
17,440
Note 6. Property and Equipment
Property and equipment consisted of the following:
(in thousands)
Land and land interests ................................................................................................ $
Buildings and leasehold improvements .......................................................................
Equipment and other ....................................................................................................
Gross property and equipment ...........................................................................
Accumulated depreciation ......................................................................................
Property and equipment, net ............................................................................... $
December 31,
2015
2014
29,032 $
135,381
270,957
435,370
(246,131 )
189,239 $
30,360
138,104
319,435
487,899
(288,328)
199,571
Included in the “Equipment and other” caption above are capitalized costs incurred in developing or obtaining internal
use software. The net carrying amount of capitalized software was $12.3 million and $17.0 million as of December 31, 2015
and 2014, respectively.
Included in the “Land and land interests” caption above are certain leasehold interests in land within the Travel &
Recreation Group for which the Company is considered to have perpetual use rights. The carrying amount of these leasehold
interests was $7.7 million and $9.1 million at December 31, 2015 and 2014, respectively. These land interests are not subject
to amortization.
Depreciation expense was $28.1 million for both 2015 and 2014 and $27.4 million for 2013.
During 2015, Viad recorded an impairment charge of $0.1 million related to the write-off of certain software in the
Travel & Recreation Group. During 2014 and 2013, Viad recorded impairment charges of $0.9 million and $1.0 million,
respectively, at the Marketing & Events Group, primarily related to the write off of certain internally developed software.
These impairment losses are included in the consolidated statements of operations under the caption “Other impairment
charges.”
F-19
Note 7. Other Investments and Assets
Other investments and assets consisted of the following:
(in thousands)
Cash surrender value of life insurance ......................................................................... $
Self-insured liability receivable ...................................................................................
Workers’ compensation insurance security deposits ...................................................
Other mutual funds ......................................................................................................
Unamortized debt issuance costs .................................................................................
Other ............................................................................................................................
Total other investments and assets ...................................................................... $
December 31,
2015
2014
21,970 $
5,979
4,250
2,192
1,572
3,240
39,203 $
20,866
7,728
4,250
2,536
1,964
3,330
40,674
Note 8. Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill were as follows:
(in thousands)
Balance at December 31, 2013 ................................................ $
Acquisition of Blitz ....................................................................
Acquisition of the West Glacier Properties ................................
Acquisition of onPeak LLC .......................................................
Acquisition of Travel Planners, Inc. ..........................................
Acquisition of N200 ...................................................................
Foreign currency translation adjustments ..................................
Balance at December 31, 2014 ................................................
Purchase price allocation adjustments .......................................
Foreign currency translation adjustments ..................................
Disposals(1) .................................................................................
Balance at December 31, 2015 ................................................ $
Marketing &
Events U.S.
Segment
Marketing &
Events
International
Segment
Travel &
Recreation
Group
62,686 $
—
—
27,406
20,526
—
—
110,618
1,682
—
—
112,300 $
22,611 $
13,504
—
—
—
8,563
(2,457)
42,221
475
(3,488)
(573)
38,635 $
44,246 $
—
1,268
—
—
—
(4,156 )
41,358
—
(7,070 )
—
34,288 $
Total
129,543
13,504
1,268
27,406
20,526
8,563
(6,613)
194,197
2,157
(10,558)
(573)
185,223
(1) During 2015, the Company partially disposed of certain operations associated with a venue services contract within the
Marketing & Events International Segment. Accordingly, goodwill of $0.6 million was included in the carrying amount
of those operations, and a loss of $23,000 was recorded in income from continuing operations related to the disposal.
The following table summarizes goodwill by reporting unit and segment:
(in thousands)
Marketing & Events Group:
Marketing & Events U.S. Segment ........................................................................ $
Marketing & Events International Segment:
GES EMEA .......................................................................................................
GES Canada ......................................................................................................
Total Marketing & Events Group ............................................................................
Travel & Recreation Group:
Brewster .................................................................................................................
Alaska Denali Travel ..............................................................................................
Glacier Park ............................................................................................................
Total Travel & Recreation Group ............................................................................
Total Goodwill ............................................................................................................ $
December 31,
2015
2014
112,300 $
110,618
32,064
6,571
150,935
29,836
3,184
1,268
34,288
185,223 $
34,396
7,825
152,839
36,906
3,184
1,268
41,358
194,197
F-20
Goodwill is tested for impairment 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.
For the Marketing & Events U.S. Segment, goodwill is assigned to and tested at the operating segment level. For the
Marketing & Events International Segment, goodwill is assigned to and tested based on the segment’s geographical
operations (GES EMEA and GES Canada). For the Travel & Recreation Group, impairment testing is performed at the
reporting unit level (Brewster, Alaska Denali Travel, and Glacier Park).
As a result of the Company’s most recent impairment analysis performed as of October 31, 2015, the excess of the
estimated fair value over the carrying value (expressed as a percentage of the carrying amounts) under step one of the
impairment test for each of the Marketing & Events Group’s reporting units in the U.S., GES EMEA, and GES Canada was
146 percent, 132 percent, and 91 percent, respectively. For the Brewster, Alaska Denali Travel, and Glacier Park reporting
units, the excess of the estimated fair value over the carrying value was 146 percent, 48 percent, and 10 percent, respectively.
Viad’s accumulated goodwill impairments were $229.7 million for both 2015 and 2014.
Intangible assets consisted of the following as of the respective periods:
(in thousands)
Amortized intangible assets:
Gross Carrying
Value
December 31, 2015
Accumulated
Amortization
Net Carrying
Value
Customer contracts and relationships ................................................. $
Other ...................................................................................................
Total amortized intangible assets .........................................................
Unamortized intangible assets:
38,342 $
4,401
42,743
Business licenses ................................................................................
Total ........................................................................................................ $
460
43,203 $
(7,814 ) $
(2,067 )
(9,881 )
—
(9,881 ) $
30,528
2,334
32,862
460
33,322
(in thousands)
Amortized intangible assets:
Gross Carrying
Value
December 31, 2014
Accumulated
Amortization
Net Carrying
Value
Customer contracts and relationships ................................................. $
Other ...................................................................................................
Total amortized intangible assets .........................................................
Unamortized intangible assets:
41,624 $
4,576
46,200
Business licenses ................................................................................
Total ........................................................................................................ $
460
46,660 $
(2,961 ) $
(732 )
(3,693 )
—
(3,693 ) $
38,663
3,844
42,507
460
42,967
Intangible asset amortization expense was $7.2 million, $2.7 million, and $1.3 million for 2015, 2014, and 2013,
respectively. The weighted-average amortization period of customer contracts and relationships and other amortizable
intangible assets is approximately 8.2 years and 3.1 years, respectively. Estimated future amortization expense related to
amortized intangible assets is as follows:
(in thousands)
Year ending December 31,
2016 ....................................................................................................................................................... $
2017 .......................................................................................................................................................
2018 .......................................................................................................................................................
2019 .......................................................................................................................................................
2020 .......................................................................................................................................................
Thereafter ...............................................................................................................................................
Total ...................................................................................................................................................... $
6,303
5,492
4,536
4,155
3,616
8,760
32,862
F-21
Note 9. Other Current Liabilities
Other current liabilities consisted of the following:
(in thousands)
Continuing operations:
Self-insured liability accrual ................................................................................... $
Accrued sales and use taxes....................................................................................
Accrued employee benefit costs .............................................................................
Accrued dividends ..................................................................................................
Deferred rent ...........................................................................................................
Current portion of pension liability ........................................................................
Accrued restructuring .............................................................................................
Accrued rebates ......................................................................................................
Accrued professional fees .......................................................................................
Accrued foreign income taxes ................................................................................
Other .......................................................................................................................
Total continuing operations ......................................................................................
Discontinued operations:
Environmental remediation liabilities.....................................................................
Self-insured liability accrual ...................................................................................
Other .......................................................................................................................
Total discontinued operations ...................................................................................
Total other current liabilities .................................................................................... $
December 31,
2015
2014
6,891 $
4,772
3,892
2,103
548
1,768
1,757
752
751
986
4,002
28,222
295
200
521
1,016
29,238 $
6,297
3,624
3,215
2,107
896
1,729
1,154
1,600
1,228
2,370
2,636
26,856
350
173
408
931
27,787
Note 10. Other Deferred Items and Liabilities
Other deferred items and liabilities consisted of the following:
(in thousands)
Continuing operations:
Self-insured liability ............................................................................................... $
Accrued compensation ...........................................................................................
Self-insured excess liability ....................................................................................
Deferred rent ...........................................................................................................
Foreign deferred tax liability ..................................................................................
Accrued restructuring .............................................................................................
Other .......................................................................................................................
Total continuing operations ......................................................................................
Discontinued operations:
Environmental remediation liabilities.....................................................................
Self-insured liability ...............................................................................................
Accrued income taxes .............................................................................................
Other .......................................................................................................................
Total discontinued operations ...................................................................................
Total other deferred items and liabilities ................................................................. $
December 31,
2015
2014
13,662 $
7,612
5,979
5,607
2,384
519
1,262
37,025
4,177
3,986
1,151
997
10,311
47,336 $
13,525
6,824
7,728
3,939
2,135
555
3,965
38,671
4,395
4,327
1,119
1,250
11,091
49,762
F-22
Note 11. Debt and Capital Lease Obligations
The components of long-term debt and capital lease obligations consisted of the following:
(in thousands, except interest rates)
Revolving credit facility and term loan 2.4% and 2.4% weighted-average interest
rate at December 31, 2015 and 2014, respectively, due through 2019 (1) ................. $
Capital lease obligations, 6.1% and 6.0% weighted-average interest rate at
December 31, 2015 and 2014, respectively, due through 2018 ................................
Total debt ..............................................................................................................
Current portion ..................................................................................................
Long-term debt and capital lease obligations..................................................... $
December 31,
2015
2014
127,500 $
139,500
1,475
128,975
(34,554 )
94,421 $
1,520
141,020
(27,856)
113,164
(1) Represents the weighted-average interest rate in effect at December 31 for revolving credit facility and term loan
borrowings, including any applicable margin. The interest rates do not include amortization of debt issuance costs or
commitment fees.
Effective December 22, 2014, Viad entered into a $300 million Amended and Restated Credit Agreement (the “Credit
Agreement”). The Credit Agreement amended and replaced in its entirety the Company’s $180 million revolving credit
facility under the Amended and Restated Credit Agreement dated as of May 18, 2011. The Credit Agreement provides for a
senior credit facility in the aggregate amount of $300 million, which consists of a $175 million revolving credit facility (the
“Revolving Credit Facility”) and a $125 million term loan (the “Term Loan”). Loans under the Credit Agreement have a
maturity date of December 22, 2019. Proceeds from the loans made under the Credit Agreement were used to refinance
certain outstanding debt of the Company and will be used for the Company’s general corporate purposes in the ordinary
course of its business. Under the Credit Agreement, the Revolving Credit Facility and/or the Term Loan may be increased up
to an additional $100 million under certain circumstances. If such circumstances are met, the Company may obtain the
additional borrowings under the Revolving Credit Facility, the Term Loan, or a combination of the two facilities. The
Revolving Credit Facility has a $40 million sublimit for letters of credit. Borrowings and letters of credit can be denominated
in U.S. dollars, Euros, Canadian dollars, or British pounds. Viad’s lenders under the Credit Agreement have a first perfected
security interest in all of the personal property of Viad, GES and GES Event Intelligence Services, Inc., including 65 percent
of the capital stock of top-tier foreign subsidiaries.
Effective February 24, 2016, the Credit Agreement was amended to modify the terms of the financial covenants and the
negative covenants related to acquisitions, restricted payments, and indebtedness. Prior to this amendment to the Credit
Agreement (the “Credit Agreement Amendment”), the financial covenants included a fixed charge coverage ratio of not less
than 1.75 to 1.00, with a step-up to 2.00 to 1.00 for the fiscal quarter ending June 30, 2016. Viad was required to maintain a
leverage ratio of not greater than 3.00 to 1.00, with a step-down to 2.75 to 1.00 from January 1, 2016 through December 31,
2016 and a step-down to 2.50 to 1.00 thereafter. Acquisitions in the same or related lines of business were permitted if the
leverage ratio, on a pro forma basis, was less than or equal to 2.50 to 1.00 for acquisitions consummated on or prior to
December 31, 2015, and 2.25 to 1.00 for acquisitions consummated between January 1, 2016 and December 31, 2016, and
2.00 to 1.00 for acquisitions consummated thereafter. Viad was allowed to pay dividends or repurchase the Company’s
common stock up to $20 million in the aggregate in any calendar year, but additional dividends, share repurchases or
distributions of stock were permitted only if the Company’s leverage ratio was less than or equal to 2.00 to 1.00, the liquidity
amount (defined as cash in the U.S. and Canada plus available revolver borrowings on a pro forma basis) was not less than
$100 million, and no default or unmatured default, as defined in the Credit Agreement, existed. As of December 31, 2015, the
fixed charge coverage ratio was 2.18 to 1.00, the leverage ratio was 1.67 to 1.00, and Viad was in compliance with all
covenants under the Credit Agreement.
Under the Credit Agreement Amendment, the scheduled limit decrease for the Company’s overall leverage ratio, as
well as the scheduled limit increase for the fixed charge coverage ratio, as those terms are defined in the Credit Agreement,
were eliminated. The overall leverage ratio and fixed charge coverage ratio are now 3.50 to 1.00 and 1.75 to 1.00,
respectively, and will remain at those levels for the entire remaining term of the Credit Agreement. Acquisitions in
substantially the same or related lines of business are permitted under the Credit Agreement Amendment, as long as the pro
forma leverage ratio is less than or equal to 3.00 to 1.00. Viad can still make dividends, distributions, and repurchases of its
common stock up to $20 million per calendar year. Stock dividends, distributions, and repurchases above the $20 million
limit are no longer subject to a liquidity covenant, and are permitted as long as the Company’s pro forma leverage ratio is less
than or equal to 2.50 to 1.00 and no default or unmatured default, as defined in the Credit Agreement, exists. Unsecured debt
is also allowed as long as the Company’s pro forma leverage ratio is less than or equal to 3.00 to 1.00. Significant other
F-23
covenants under the Credit Agreement that remain unchanged by the Credit Agreement Amendment include limitations on
investments, sales/leases of assets, consolidations or mergers, and liens on property.
As of December 31, 2015, Viad’s total debt was $129.0 million, consisting of outstanding borrowings under the Term
Loan and Revolving Credit Facility of $112.5 million and $15.0 million, respectively, and capital lease obligations of $1.5
million. As of December 31, 2015, Viad had $158.7 million of capacity remaining under its Credit Facility reflecting
outstanding letters of credit of $1.3 million.
Borrowings under the Revolving Credit Facility (of which GES and GES Event Intelligence Services, Inc. are
guarantors) are indexed to the prime rate or the London Interbank Offered Rate, plus appropriate spreads tied to Viad’s
leverage ratio. Commitment fees and letters of credit fees are also tied to Viad’s leverage ratio. The fees on the unused
portion of the Credit Facility are currently 0.35 percent annually.
As of December 31, 2015, Viad had certain obligations under guarantees to third parties on behalf of its subsidiaries.
These guarantees are not subject to liability recognition in the consolidated financial statements and relate to leased facilities
entered into by the Company’s subsidiary operations. The Company would generally be required to make payments to the
respective third parties under these guarantees in the event that the related subsidiary could not meet its own payment
obligations. The maximum potential amount of future payments that Viad would be required to make under all guarantees
existing as of December 31, 2015 would be $10.4 million. These guarantees relate to leased facilities and expire through
March 2021. There are no recourse provisions that would enable Viad to recover from third parties any payments made under
the guarantees. Furthermore, there are no collateral or similar arrangements whereby Viad could recover payments.
Aggregate annual maturities of long-term debt and capital lease obligations as of December 31, 2015 are as follows:
(in thousands)
Year ending December 31,
2016 ............................................................................................................................. $
2017 .............................................................................................................................
2018 .............................................................................................................................
2019 .............................................................................................................................
2020 .............................................................................................................................
Total ....................................................................................................................... $
Less: Amount representing interest ...................................................................
Present value of minimum lease payments.........................................................
Revolving Credit
Agreement
Capital Lease
Obligations
33,750 $
18,750
18,750
56,250
—
127,500 $
$
926
570
207
—
—
1,703
(228)
1,475
The gross amount of assets recorded under capital leases and accumulated amortization as of December 31, 2015 was
$3.5 million and $2.1, respectively. As of December 31, 2014, the gross amount of assets recorded under capital leases and
accumulated amortization was $3.5 million and $2.1 million, respectively. The amortization charges related to assets
recorded under capital leases are included in depreciation expense. Refer to Note 6 - Property and Equipment.
The weighted-average interest rate on total debt (including amortization of debt issuance costs and commitment fees)
was 3.2 percent, 4.0 percent and 4.2 percent for 2015, 2014, and 2013, respectively. The estimated fair value of total debt was
$113.9 million and $123.0 million as of December 31, 2015 and 2014, respectively. The fair value of debt was estimated by
discounting the future cash flows using rates currently available for debt of similar terms and maturity.
Note 12. Fair Value Measurements
The fair value of an asset or liability is defined as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date. The fair value guidance requires an
entity to maximize the use of quoted prices and other observable inputs and minimize the use of unobservable inputs when
measuring fair value, and also establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to
measure fair value as follows:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
F-24
Level 2 - Observable inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly.
Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value.
Viad measures its money market mutual funds and certain other mutual fund investments at fair value on a recurring
basis using Level 1 inputs. The fair value information related to these assets is summarized in the following tables:
(in thousands)
Assets:
Fair Value Measurements at Reporting Date Using
Quoted Prices in
Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobserved
Inputs
(Level 3)
December 31, 2015
Money market funds ............................................................ $
Other mutual funds ..............................................................
Total assets at fair value on a recurring basis ...................... $
118 $
2,192
2,310 $
118 $
2,192
2,310 $
— $
—
— $
—
—
—
(in thousands)
Assets:
Fair Value Measurements at Reporting Date Using
Significant
Other
Observable
Inputs
(Level 2)
Quoted Prices
in Active
Markets
(Level 1)
Significant
Unobserved
Inputs
(Level 3)
December 31, 2014
Money market funds ............................................................ $
Other mutual funds ..............................................................
Total assets at fair value on a recurring basis ...................... $
Liabilities:
Earnout contingent consideration liability ...........................
Total liabilities at fair value on a recurring basis ................ $
8,518 $
2,536
11,054 $
8,518 $
2,536
11,054 $
(1,210)
(1,210) $
—
— $
— $
—
— $
—
— $
—
—
—
(1,210)
(1,210)
As of December 31, 2015 and 2014, Viad had investments in money market mutual funds of $0.1 million and $8.5
million, respectively, which are included in the consolidated balance sheets under the caption “Cash and cash equivalents.”
These investments are classified as available-for-sale and were recorded at fair value. There have been no realized gains or
losses related to these investments and the Company has not experienced any redemption restrictions with respect to any of
the money market mutual funds.
As of December 31, 2015 and 2014, Viad had investments in other mutual funds of $2.2 million and $2.5 million,
respectively, which are classified in the consolidated balance sheets under the caption “Other investments and assets.” These
investments were classified as available-for-sale and were recorded at fair value. As of December 31, 2015 and 2014, there
were unrealized gains of $0.6 million ($0.3 million after-tax) and $0.8 million ($0.5 million after-tax), respectively, which
were included in the consolidated balance sheets under the caption “Accumulated other comprehensive income (loss).”
The carrying values of cash and cash equivalents, receivables, and accounts payable approximate fair value due to the
short-term maturities of these instruments. The estimated fair value of debt obligations is disclosed in Note 11 – Debt and
Capital Lease Obligations.
F-25
Note 13. Income Per Share
The components of basic and diluted income per share are as follows:
(in thousands, except per share data)
Net income attributable to Viad (diluted) ............................................ $
Less: Allocation to non-vested shares ................................................
Net income allocated to Viad common stockholders (basic) .............. $
Basic weighted-average outstanding common shares .........................
Additional dilutive shares related to share-based compensation ........
Diluted weighted-average outstanding shares .....................................
Income per share:
Basic income attributable to Viad common stockholders ........................ $
Diluted income attributable to Viad common stockholders (1) ................. $
(1)
Diluted income per share amount cannot exceed basic income per share.
2015
Year Ended December 31,
2014
2013
26,606 $
(385)
26,221 $
19,797
184
19,981
52,354 $
(970 )
51,384 $
19,804
329
20,133
1.32 $
1.32 $
2.59 $
2.59 $
21,555
(485)
21,070
19,850
415
20,265
1.06
1.06
Options to purchase 4,000, 26,000 and 47,000 shares of common stock were outstanding during 2015, 2014 and 2013,
respectively, but were not included in the computation of dilutive shares outstanding because the effect would be anti-
dilutive.
Note 14. Employee Stock Ownership Feature of 401(k) Plan
Viad has historically funded its matching contributions to employees’ 401(k) accounts through the Company’s ESOP
portion of the Viad Corp Capital Accumulation Plan (the “401(k) Plan”). During 2014, the Company depleted these shares
and matching contributions are now funded from shares of Viad common stock held in treasury. All eligible employees of
Viad and its participating affiliates, other than certain employees covered by collective-bargaining agreements that do not
expressly provide for participation of such employees in an employee stock ownership plan, may participate in the employee
stock ownership feature within the 401(k) Plan.
In 1989, the ESOP borrowed $40.0 million (guaranteed by Viad) to purchase treasury shares from the Company. In
2004, Viad borrowed $12.2 million under its revolving credit agreement to pay in full the outstanding ESOP loan and obtain
release of Viad from its guarantee of the loan. In connection with the loan payoff, the ESOP entered into a $12.4 million loan
with Viad maturing in June 2009 calling for minimum quarterly principal payments of $250,000 plus interest. The same
amount, representing unearned employee benefits, was recorded as a reduction of stockholders’ equity. In 2007, the loan
agreement between the ESOP and Viad was extended to December 31, 2016. As of December 31, 2014, the Company has
fully paid off the ESOP loan. For prior years, the loan liability is included in the consolidated balance sheets under the
caption “Unearned employee benefits and other.” The liability was reduced as the ESOP made principal payments on the
borrowing, and the amount offsetting stockholders’ equity was reduced as stock was allocated to employees and benefits
were charged to expense. The 401(k) Plan repaid the loan using Viad contributions and dividends received on the unallocated
Viad shares held by the 401(k) Plan.
Information regarding ESOP transactions is as follows:
(in thousands)
Amounts paid by ESOP for:
Year Ended December 31,
2014
2013
Debt repayment ...................................................................................................... $
Interest .................................................................................................................... $
Amounts received from Viad as:
Contributions .......................................................................................................... $
Dividends ............................................................................................................... $
44 $
— $
44 $
— $
1,280
1
1,202
79
Shares were released for allocation to participants based upon the ratio of the current year’s principal and interest
payments to the sum of the total principal and interest payments expected over the remaining life of the loan. Viad recorded
expense of less than $0.1 million in 2014 and $1.3 million in 2013.
F-26
There were no unallocated shares held by the 401(k) Plan as of December 31, 2014 and unallocated shares held by the
401(k) Plan totaled 4,361 as of December 31, 2013. In January 2014, the 4,361 shares remaining in the ESOP as of December
31, 2013 were fully exhausted. Matching contributions on employee deferrals for the remainder of 2014 were made from
shares held in treasury. Shares allocated during 2013 totaled 126,216.
Note 15. Preferred Stock Purchase Rights
Viad has authorized five million and two million shares of Preferred Stock and Junior Participating Preferred Stock,
respectively, none of which was outstanding on December 31, 2015.
On February 28, 2013, Viad’s shareholder rights plan (the “Rights Agreement”), as adjusted in connection with Viad’s
one-for-four reverse stock split on July 1, 2004, and as amended on February 28, 2012, terminated on its own terms and the
Preferred Stock Purchase Rights issued pursuant to the Rights Agreement expired.
Note 16. Accumulated Other Comprehensive Income
Changes in accumulated other comprehensive income (“AOCI”) by component are as follows:
(in thousands)
Balance at December 31, 2013 ............................................. $
Other comprehensive income before reclassifications ......
Amounts reclassified from AOCI, net of tax .....................
Net other comprehensive income (loss) ...............................
Balance at December 31, 2014 ............................................. $
Other comprehensive income before reclassifications ......
Amounts reclassified from AOCI, net of tax .....................
Net other comprehensive income (loss) ...............................
Balance at December 31, 2015 ............................................. $
Cumulative
Foreign
Currency
Translation
Adjustments
Unrecognized Net
Actuarial Loss
and Prior Service
Credit, Net
Unrealized Gains on
Investments
Accumulated
Other
Comprehensive
Income (Loss)
20,017
(18,334)
(2,077)
(20,411)
(394)
(34,181)
399
(33,782)
(34,176)
(11,259) $
—
(2,021)
(2,021)
(13,280) $
1,546
469
2,015
(11,265) $
429 $
98
(56)
42
471 $
(55)
(70)
(125)
346 $
30,847 $
(18,432)
—
(18,432)
12,415 $
(35,672)
—
(35,672)
(23,257) $
The following table presents information about reclassification adjustments out of AOCI:
(in thousands)
Unrealized gains on investments .................................................. $
Tax effect .....................................................................................
$
Recognized net actuarial (gain) loss (1) ........................................ $
Amortization of prior service credit (1) .........................................
Tax effect .....................................................................................
$
Year Ended December 31,
2015
2014
Affected Line Item in the
Statement Where Net Income
is Presented
(112) $
42
(70) $
1,180 $
(552)
(159)
469 $
(90 ) Income income
34 Income taxes
(56 )
(3,821 )
565
1,235 Income taxes
(2,021 )
(1) Amount included in pension expense. Refer to Note 18 – Pension and Postretirement Benefits.
F-27
Note 17. Income Taxes
Earnings before income taxes from continuing operations consist of the following:
(in thousands)
Foreign ..................................................................................................... $
United States ............................................................................................
Income from continuing operations before income taxes................... $
2015
Year Ended December 31,
2014
2013
35,571 $
2,364
37,935 $
33,349 $
7,938
41,287 $
25,010
2,620
27,630
Significant components of the income tax provision from continuing operations are as follows:
(in thousands)
Current:
United States:
Year Ended December 31,
2014
2013
2015
Federal ................................................................................................ $
State ....................................................................................................
Foreign .....................................................................................................
Total current ...................................................................................................
Deferred:
United States:
Federal ................................................................................................
State ....................................................................................................
Foreign .....................................................................................................
Total deferred .................................................................................................
Income tax expense ...................................................................................... $
(876) $
1,558
9,342
10,024
1,854
(164)
(1,221)
469
10,493 $
— $
16
9,824
9,840
(9,486 )
(125 )
(120 )
(9,731 )
109 $
(3,308)
(286)
9,606
6,012
2,007
651
(360)
2,298
8,310
The Company is subject to income tax in jurisdictions in which it operates. A reconciliation of the statutory federal
income tax rate to the effective tax rate of the Company for the years 2013 – 2015 is as follows:
2015
(in thousands)
Computed income tax expense at statutory federal
income tax rate of 35% .......................................... $ 13,277
1,713
State income taxes, net of federal provision ..........
Foreign tax rate differentials ..................................
(1,181)
U.S. tax on foreign earnings (net of foreign tax
credits) ...................................................................
Change in valuation allowance ..............................
Proceeds from life insurance ..................................
Return to provision and other adjustments .............
Other, net ...............................................................
(948)
(944)
—
(1,557)
133
Income tax expense ......................................... $ 10,493
Year Ended December 31,
2014
2013
35.0% $ 14,450
227
(1,262)
4.5%
(3.1)%
35.0 % $ 9,670
345
77
0.5 %
(3.1 )%
(2,168)
(2.5)%
(2.5)% (11,650)
(133)
(1,401)
2,046
109
—
(4.1)%
0.4%
27.7% $
(1,831)
(5.3 )%
(2,184)
(28.2 )%
(196)
(0.3 )%
1,664
(3.4 )%
765
5.0 %
0.2 % $ 8,310
35.0%
1.2%
0.3%
(6.6)%
(7.9)%
(0.7)%
6.0%
2.8%
30.1%
F-28
The components of deferred income tax assets and liabilities included in the consolidated balance sheets are as follows:
(in thousands)
Deferred tax assets:
Tax credit carryforwards ........................................................................................ $
Pension, compensation, and other employee benefits ............................................
Provisions for losses ...............................................................................................
Net operating loss carryforward .............................................................................
State income taxes ..................................................................................................
Other deferred income tax assets ............................................................................
Total deferred tax assets .................................................................................
Valuation allowance ...............................................................................................
Foreign deferred tax assets included above ............................................................
Net deferred tax assets ....................................................................................
Deferred tax liabilities:
Property and equipment ..........................................................................................
Deferred tax related to life insurance......................................................................
Goodwill and other intangible assets ......................................................................
Other deferred income tax liabilities ......................................................................
Total deferred tax liabilities ...........................................................................
Foreign deferred tax liabilities included above .......................................................
United States net deferred tax assets ........................................................................ $
December 31,
2015
2014
19,529 $
23,212
11,119
4,310
2,944
3,456
64,570
(2,837 )
(2,460 )
59,273
(3,510 )
(5,316 )
(4,038 )
(1,115 )
(13,979 )
3,471
48,765 $
21,783
23,501
12,127
4,886
2,979
3,927
69,203
(3,781)
(1,536)
63,886
(5,856)
(4,962)
(2,705)
(1,452)
(14,975)
3,671
52,582
In accordance with ASU 2015-17, all of the Company’s deferred tax assets are reflected as non-current. The Company
applied ASU 2015-17 on a retrospective basis. As a result, current deferred tax assets of $22.9 million were reclassified to
non-current on the December 31, 2014 consolidated balance sheet. Refer to Note 1 – Summary of Significant Accounting
Policies for further information.
The Company uses significant judgment in forming conclusions regarding the recoverability of its deferred tax assets
and evaluates all available positive and negative evidence to determine if it is more-likely-than-not that the deferred tax assets
will be realized. To the extent recovery does not appear likely, a valuation allowance must be recorded. As of December 31,
2015 and 2014, Viad had gross deferred tax assets of $64.6 million and $69.2 million, respectively. These deferred tax assets
reflect the expected future tax benefits to be realized upon reversal of deductible temporary differences, and the utilization of
net operating loss and tax credit carryforwards.
As of December 31, 2015, the Company has foreign tax credit carryforwards of $9.2 million. The credits are subject to
a 10-year carryforward period. Of the $9.2 million, $1.0 million will expire in 2020, $6.0 million will expire in 2021, $0.3
million will expire in 2022, and $1.9 million will expire in 2023. As of December 31, 2015, Viad had tax credit
carryforwards related to alternative minimum tax of $10.3 million that may be carried forward indefinitely.
As of December 31, 2015 and 2014, Viad had gross state and foreign net operating loss carryforwards of $56.0 million
and $75.8 million, respectively, for which the Company had deferred tax assets of $4.3 million and $4.9 million, respectively.
The state and foreign net operating loss carryforwards expire on various dates from 2016 through 2035. During 2015, the
Company decreased its valuation allowance related to state and foreign net operating loss carryforwards by $0.8 million and
$0.2 million, respectively. As of December 31, 2015 and 2014, Viad had a valuation allowance of $2.8 million and $3.8
million related to state and foreign net operating loss carryforwards, respectively.
While management believes that the deferred tax assets, net of existing valuation allowances will be utilized in future
periods, there are inherent uncertainties regarding the ultimate realization of these assets. It is possible that the relative weight
of positive and negative evidence regarding the realization of deferred tax assets may change, which could result in a material
increase or decrease in the Company’s valuation allowance. Such a change could result in a material increase or decrease to
income tax expense in the period the assessment was made.
Viad has not recorded deferred taxes on certain historical unremitted earnings of its subsidiaries located in Canada, the
United Kingdom, and the Netherlands as management intends to reinvest those earnings in its operations. As of
December 31, 2015, the incremental unrecognized tax liability (net of estimated foreign tax credits) related to those
F-29
undistributed earnings was approximately $3.4 million. To the extent that circumstances change and it becomes apparent that
some or all of those undistributed earnings will be remitted to the U.S., Viad would accrue income taxes attributable to such
remittance.
Viad exercises judgment in determining its income tax provision when the ultimate tax determination is uncertain. Viad
classifies liabilities associated with uncertain tax positions as non-current liabilities in its consolidated balance sheets unless
they are expected to be paid within the next year. As of December 31, 2015 and 2014, the Company had liabilities associated
with uncertain tax positions (including interest and penalties) of $1.5 million and $2.4 million, respectively, which were
classified as non-current liabilities.
During 2015, the Company recognized a net decrease in the liability for uncertain tax positions for continuing
operations of approximately $1.0 million. As of December 31, 2015, Viad had no accrued interest and penalties related to
uncertain tax positions for continuing operations which are classified as a component of income tax expense. The tax expense
impact of the change in uncertain tax positions was a benefit of $0.3 million after restoration of the deferrals that the
uncertain tax positions were previously offset against. The Company does not expect any material positions will be resolved
or settled during 2016.
The Company had accrued liabilities for uncertain tax positions for discontinued operations of $0.6 million and accrued
interest and penalties of $0.5 million as of both December 31, 2015 and 2014. Future tax resolutions or settlements that may
occur related to these uncertain tax positions would be recorded through discontinued operations (net of tax, if applicable).
The Company does not expect the discontinued operations uncertain tax positions to be resolved or settled within the next
twelve months.
A reconciliation of the liabilities associated with uncertain tax positions (excluding interest and penalties) is as follows:
(in thousands)
Balance at December 31, 2012 .............................................................. $
Additions for tax positions taken in prior years .......................................
Balance at December 31, 2013 ..............................................................
Additions for tax positions taken in prior years .......................................
Reductions for lapse of applicable statutes ..............................................
Balance at December 31, 2014 ..............................................................
Additions for tax positions taken in prior years .......................................
Reductions for tax positions taken in prior years .....................................
Reductions for lapse of applicable statutes ..............................................
Balance at December 31, 2015 .............................................................. $
Continuing
Operations
Discontinued
Operations
Total
— $
736
736
1,019
(472)
1,283
43
(666)
(353)
307 $
636 $
—
636
—
—
636
—
—
—
636 $
636
736
1,372
1,019
(472)
1,919
43
(666)
(353)
943
Viad is subject to regular and recurring audits by taxing authorities in jurisdictions in which the Company currently
operates or has operated in the past. This includes the United States, Canada, the United Kingdom, Germany, and the
Netherlands.
Viad’s 2012 through 2015 U.S. federal tax years and various state tax years from 2011 through 2015 remain subject to
income tax examinations by tax authorities. The 2006, 2008, and 2010 federal tax years remain subject to adjustment to the
extent of federal net operating loss carryback claims. Tax years 2011 through 2015 remain subject to examination by various
foreign taxing jurisdictions.
Note 18. Pension and Postretirement Benefits
Domestic Plans. Viad has trusteed, frozen defined benefit pension plans that cover certain employees which are funded
by the Company. Viad also maintains certain unfunded defined benefit pension plans which provide supplemental benefits to
select management employees. These plans use traditional defined benefit formulas based on years of service and final
average compensation. Funding policies provide that payments to defined benefit pension trusts shall be at least equal to the
minimum funding required by applicable regulations.
Viad also has certain defined benefit postretirement plans that provide medical and life insurance for certain eligible
employees, retirees, and dependents. The related postretirement benefit liabilities are recognized over the period that services
F-30
are provided by employees. In addition, Viad retained the obligations for these benefits for retirees of certain sold businesses.
While the plans have no funding requirements, Viad may fund the plans.
The components of net periodic benefit cost and other amounts recognized in other comprehensive income of Viad’s
pension plans included the following:
(in thousands)
Net periodic benefit cost:
Service cost......................................................................................... $
Interest cost.........................................................................................
Expected return on plan assets............................................................
Recognized net actuarial loss .............................................................
Net periodic benefit cost ........................................................................
Other changes in plan assets and benefit obligations recognized in other
comprehensive income:
2015
December 31,
2014
2013
101 $
1,018
(380)
492
1,231
87 $
1,079
(436 )
407
1,137
66
1,030
(400)
583
1,279
Net actuarial loss (gain) ......................................................................
(963)
3,418
(2,565)
Reversal of amortization item:
Net actuarial loss ................................................................................
Total recognized in other comprehensive income (loss) .....................
Total recognized in net periodic benefit cost and other
comprehensive income (loss) .............................................................. $
(492)
(1,455)
(407 )
3,011
(583)
(3,148)
(224) $
4,148 $
(1,869)
The components of net periodic benefit cost and other amounts recognized in other comprehensive income of Viad’s
postretirement benefit plans included the following:
(in thousands)
Net periodic benefit cost:
Service cost......................................................................................... $
Interest cost.........................................................................................
Expected return on plan assets............................................................
Amortization of prior service credit ...................................................
Recognized net actuarial loss .............................................................
Net periodic benefit cost ........................................................................
Other changes in plan assets and benefit obligations recognized in other
comprehensive income:
Net actuarial loss (gain) ......................................................................
Prior service credit ..............................................................................
Reversal of amortization item:
Net actuarial loss ................................................................................
Prior service credit ..............................................................................
Total recognized in other comprehensive income (loss) .....................
Total recognized in net periodic benefit cost and other
comprehensive income (loss) .............................................................. $
2015
December 31,
2014
2013
152 $
619
—
(552)
528
747
(1,248)
3
(528)
552
(1,221)
129 $
640
—
(593 )
166
342
1,045
(1,283 )
(166 )
593
189
156
663
—
(902)
518
435
(1,496)
(40)
(518)
902
(1,152)
(474) $
531 $
(717)
F-31
The following table indicates the funded status of the plans as of December 31:
(in thousands)
Change in benefit obligation:
Funded Plans
2015
2014
Unfunded Plans
2015
2014
Postretirement
Benefit Plans
2015
2014
Benefit obligation at beginning of year ............ $ 16,012 $ 13,435 $ 11,127 $ 10,536 $ 16,235 $ 16,919
129
Service cost.......................................................
640
Interest cost.......................................................
1,011
Actuarial adjustments .......................................
(1,283)
Plan amendments ..............................................
(1,181)
Benefits paid .....................................................
Benefit obligation at end of year .........................
16,235
Change in plan assets:
152
619
(1,248)
3
(1,188)
11,127 14,573
—
644
2,700
—
(767)
16,012
101
402
(1,072)
—
(509)
10,049
—
616
(1,013)
—
(709)
14,906
87
435
649
—
(580 )
Fair value of plan assets at beginning of year ...
520
Actual return on plan assets ..............................
(34)
Company contributions ....................................
695
Benefits paid .....................................................
(1,181)
—
Fair value of plan assets at end of year ..............
Funded status at end of year ............................... $ (4,427) $ (4,814) $ (10,049) $ (11,127 ) $ (14,573) $ (16,235)
10,872
364
729
(767)
11,198
11,198
(742)
732
(709)
10,479
—
—
1,188
(1,188)
—
—
—
580
(580 )
—
—
—
509
(509)
—
The net amounts recognized in Viad’s consolidated balance sheets under the caption “Pension and postretirement
benefits” as of December 31 were as follows:
(in thousands)
Other current liabilities .......................................... $
Non-current liabilities ............................................
Net amount recognized .......................................... $
Funded Plans
2015
2014
Unfunded Plans
2015
2014
Postretirement
Benefit Plans
2015
2014
— $
4,427
4,427 $
1,094
— $
4,814
15,141
4,814 $ 10,049 $ 11,127 $ 14,573 $ 16,235
635 $ 1,122 $
10,492 13,451
645 $
9,404
Amounts recognized in accumulated other comprehensive income as of December 31, 2015 consisted of:
(in thousands)
Net actuarial loss ........................................................................ $
Prior service credit .....................................................................
Subtotal ...............................................................................
Less tax effect ............................................................................
Total ..................................................................................... $
Funded
Plans
Unfunded
Plans
Postretirement
Benefit Plans
Total
9,202 $
—
9,202
(3,490)
5,712 $
2,806 $
—
2,806
(1,064)
1,742 $
3,795 $
(2,173 )
1,622
(615 )
1,007 $
15,803
(2,173)
13,630
(5,169)
8,461
Amounts recognized in accumulated other comprehensive income as of December 31, 2014 consisted of:
(in thousands)
Net actuarial loss ........................................................................ $
Prior service credit .....................................................................
Subtotal ...............................................................................
Less tax effect ............................................................................
Total ..................................................................................... $
Funded
Plans
Unfunded
Plans
Postretirement
Benefit Plans
Total
9,442 $
—
9,442
(3,581)
5,861 $
4,020 $
—
4,020
(1,525)
2,495 $
5,571 $
(2,729 )
2,842
(1,078 )
1,764 $
19,033
(2,729)
16,304
(6,184)
10,120
The estimated net actuarial loss for the postretirement benefit plans that is expected to be amortized from accumulated
other comprehensive income into net periodic benefit cost in 2016 is approximately $0.4 million. The estimated prior service
credit for the postretirement benefit plans that is expected to be amortized from accumulated other comprehensive income
into net periodic benefit credit in 2016 is approximately $0.5 million.
F-32
The estimated net actuarial loss for the unfunded and funded benefit plans that is expected to be amortized from
accumulated other comprehensive income into net periodic benefit cost in 2016 is approximately $0.1 million and $0.3
million, respectively.
The fair value of the domestic plans’ assets by asset class was as follows:
(in thousands)
Domestic pension plans:
Total
Fair Value Measurements at December 31, 2015
Significant
Other
Observable
Inputs
(Level 2)
Quoted Prices
in Active
Markets
(Level 1)
Significant
Unobserved
Inputs
(Level 3)
Fixed income securities ........................................................ $
U.S. equity securities ............................................................
Cash ......................................................................................
Other .....................................................................................
Total .......................................................................................... $
5,453 $
4,459
357
210
10,479 $
5,453 $
4,459
357
—
10,269 $
— $
—
—
210
210 $
—
—
—
—
—
(in thousands)
Domestic pension plans:
Total
Fair Value Measurements at December 31, 2014
Significant
Other
Observable
Inputs
(Level 2)
Quoted Prices
in Active
Markets
(Level 1)
Significant
Unobserved
Inputs
(Level 3)
Fixed income securities ........................................................ $
U.S. equity securities ............................................................
Cash ......................................................................................
Other .....................................................................................
Total .......................................................................................... $
6,534 $
3,855
552
257
11,198 $
6,534 $
3,855
552
—
10,941 $
— $
—
—
257
257 $
—
—
—
—
—
The Viad Corp Medical Plan maintained a trust account for plan assets invested in various securities. In June 2014, the
trust account was closed after all plan assets were liquidated to reimburse Viad Corp for net postretirement medical claims
paid. All medical claims are being paid by Viad.
Viad employs a total return investment approach whereby a mix of equities and fixed income securities is used to
maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful
consideration of plan liabilities, plan funded status, and corporate financial condition. The investment portfolio contains a
diversified blend of equity and fixed income securities. Furthermore, equity securities are diversified across U.S. and non-
U.S. stocks, as well as growth and value. Investment risk is measured and monitored on an ongoing basis through quarterly
investment portfolio reviews and annual liability measurements.
Viad utilizes a building-block approach in determining the long-term expected rate of return on plan assets. Historical
markets are studied and long-term historical relationships between equity securities and fixed income securities are preserved
consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over
the long run. Current market factors such as inflation and interest rates are evaluated before long-term capital market
assumptions are determined. The long-term portfolio return also considers diversification and rebalancing. Peer data and
historical returns are reviewed relative to Viad’s assumed rates for reasonableness and appropriateness.
F-33
The following pension and postretirement benefit payments, which reflect expected future service, as appropriate, are
expected to be paid:
(in thousands)
2016 ......................................................................................................... $
2017 ......................................................................................................... $
2018 ......................................................................................................... $
2019 ......................................................................................................... $
2020 ......................................................................................................... $
2021-2025 ................................................................................................ $
Funded
Plans
Unfunded
Plans
Postretirement
Benefit
Plans
834 $
875 $
895 $
922 $
988 $
4,879 $
659 $
697 $
722 $
735 $
737 $
3,447 $
1,146
1,157
1,153
1,123
1,112
5,021
Foreign Pension Plans. Certain of Viad’s foreign operations also maintain trusteed defined benefit pension plans
covering certain employees which are funded by the companies, and unfunded defined benefit pension plans providing
supplemental benefits to select management employees. These plans use traditional defined benefit formulas based on years
of service and final average compensation. Funding policies provide that payments to defined benefit pension trusts shall be
at least equal to the minimum funding required by applicable regulations. The components of net periodic benefit cost and
other amounts recognized in other comprehensive income included the following:
(in thousands)
Net periodic benefit cost:
Service cost......................................................................................... $
Interest cost.........................................................................................
Expected return on plan assets............................................................
Recognized net actuarial loss .............................................................
Net periodic benefit cost ........................................................................
Other changes in plan assets and benefit obligations recognized in other
comprehensive income:
Net actuarial loss (gain) ......................................................................
Reversal of amortization of net actuarial loss .....................................
Total recognized in other comprehensive income (loss) .....................
Total recognized in net periodic benefit cost and other
comprehensive income (loss) .............................................................. $
2015
December 31,
2014
2013
503 $
505
(583)
160
585
182
(160)
22
413 $
631
(640 )
145
549
534
702
(698)
248
786
361
145
506
(1,214)
(248)
(1,462)
607 $
1,055 $
(676)
The following table represents the funded status of the plans as of December 31:
(in thousands)
Change in benefit obligation:
Funded Plans
Unfunded Plans
2015
2014
2015
2014
Benefit obligation at beginning of year ................................ $
Service cost...........................................................................
Interest cost...........................................................................
Actuarial adjustments ...........................................................
Benefits paid .........................................................................
Translation adjustment .........................................................
Benefit obligation at end of year .............................................
Change in plan assets:
Fair value of plan assets at beginning of year .......................
Actual return on plan assets ..................................................
Company contributions ........................................................
Benefits paid .........................................................................
Translation adjustment .........................................................
Fair value of plan assets at end of year ..................................
Funded status at end of year ................................................... $
12,016 $
503
415
(176)
(1,115)
(1,899)
9,744
11,747
377
566
(1,115)
(1,870)
9,705
(39) $
11,460 $
413
507
1,042
(344)
(1,062)
12,016
11,560
983
604
(344)
(1,056)
11,747
(269) $
2,756 $
—
89
178
(179 )
(374 )
2,470
—
—
179
(179 )
—
—
(2,470 ) $
2,911
—
124
234
(211)
(302)
2,756
—
—
211
(211)
—
—
(2,756)
F-34
The net amounts recognized in Viad’s consolidated balance sheets under the caption “Pension and postretirement
benefits” as of December 31 were as follows:
(in thousands)
Other current liabilities .............................................................. $
Non-current liabilities ................................................................
Net amount recognized .............................................................. $
Funded Plans
Unfunded Plans
2015
2014
2015
2014
— $
39
39 $
— $
318
318 $
162 $
2,308
2,470 $
94
2,662
2,756
The net actuarial losses for the foreign funded plans as of December 31, 2015 and 2014 were $3.3 million ($2.5 million
after-tax) and $4.0 million ($3.1 million after-tax), respectively. The net actuarial losses as of December 31, 2015 and 2014
for the foreign unfunded plans were $0.4 million ($0.3 million after-tax) and $0.4 million ($0.2 million after-tax),
respectively.
The fair value of the foreign pension plans’ assets by asset category was as follows:
(in thousands)
Assets:
Fair Value Measurements at December 31, 2015
Quoted Prices
in Active
Markets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobserved
Inputs
(Level 3)
Total
Canadian fixed income securities ......................................... $
International equity securities ...............................................
U.S. equity securities ............................................................
Other .....................................................................................
Total .......................................................................................... $
4,372 $
3,896
1,012
425
9,705 $
4,372 $
3,521
1,012
425
9,330 $
— $
375
—
—
375 $
—
—
—
—
—
(in thousands)
Assets:
Total
Fair Value Measurements at December 31, 2014
Significant
Other
Observable
Inputs
(Level 2)
Quoted Prices
in Active
Markets
(Level 1)
Significant
Unobserved
Inputs
(Level 3)
Canadian fixed income securities ......................................... $
International equity securities ...............................................
U.S. equity securities ............................................................
Other .....................................................................................
Total .......................................................................................... $
5,367 $
4,693
1,236
451
11,747 $
5,367 $
4,273
1,236
451
11,327 $
— $
420
—
—
420 $
The following payments, which reflect expected future service, as appropriate, are expected to be paid:
(in thousands)
2016 ............................................................................................................................. $
2017 ............................................................................................................................. $
2018 ............................................................................................................................. $
2019 ............................................................................................................................. $
2020 ............................................................................................................................. $
2021-2025 .................................................................................................................... $
Funded
Plans
Unfunded
Plans
311
$
383 $
395 $
449 $
451 $
2,716 $
—
—
—
—
—
166
166
166
165
165
816
F-35
Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets. The
accumulated benefit obligations in excess of plan assets as of December 31 were as follows:
(in thousands)
Projected benefit obligation ....................................................... $
Accumulated benefit obligation ................................................. $
Fair value of plan assets ............................................................. $
(in thousands)
Projected benefit obligation ....................................................... $
Accumulated benefit obligation ................................................. $
Fair value of plan assets ............................................................. $
Domestic Plans
Funded Plans
Unfunded Plans
2015
2014
2015
2014
14,906 $
14,906 $
10,479 $
16,012 $
16,012 $
11,200 $
10,049 $
9,934 $
— $
11,127
11,014
—
Foreign Plans
Funded Plans
Unfunded Plans
2015
2014
2015
2014
9,744 $
9,186 $
9,705 $
12,016 $
11,268 $
11,747 $
2,470 $
2,470 $
— $
2,756
2,656
—
Contributions. In aggregate for both the domestic and foreign plans, the Company anticipates contributing $0.9
million to the funded pension plans, $0.8 million to the unfunded pension plans and $1.1 million to the postretirement benefit
plans in 2016.
Weighted-Average Assumptions. Weighted-average assumptions used to determine benefit obligations as of
December 31 were as follows:
Domestic Plans
Funded Plans
2015
2014
Unfunded Plans
2014
2015
Postretirement
Benefit Plans
Foreign Plans
2015
2014
2015
2014
Discount rate ............................................ 4.37% 4.01% 4.25% 3.90% 4.30% 4.00 % 3.76% 3.85%
Rate of compensation increase ................. N/A N/A 3.00% 3.00% N/A N/A 2.31% 3.00%
Weighted-average assumptions used to determine net periodic benefit cost were as follows:
Domestic Plans
Funded Plans
2015
2014
Unfunded Plans
2014
2015
Postretirement
Benefit Plans
Foreign Plans
2015
2014
2015
2014
Discount rate ............................................ 3.97% 4.90% 3.90% 4.60% 4.00% 4.65 % 3.86% 4.67%
Expected return on plan assets ................. 3.33% 4.15% N/A N/A 0.00% 0.00 % 4.51% 5.69%
Rate of compensation increase ................. N/A N/A 3.00% 3.00% N/A N/A 2.31% 3.00%
The assumed health care cost trend rate used in measuring the December 31, 2015 accumulated postretirement benefit
obligation was 7.0 percent, declining one-quarter percent each year to the ultimate rate of 4.5 percent by the year 2025 and
remaining at that level thereafter. The assumed health care cost trend rate used in measuring the December 31, 2014
accumulated postretirement benefit obligation was 7.5 percent, declining one-quarter percent each year to the ultimate rate of
5.0 percent by the year 2025 and remaining at that level thereafter.
A one-percentage-point increase in the assumed health care cost trend rate for each year would increase the
accumulated postretirement benefit obligation as of December 31, 2015 by approximately $1.5 million and the total of
service and interest cost components by approximately $0.1 million. A one-percentage-point decrease in the assumed health
care cost trend rate for each year would decrease the accumulated postretirement benefit obligation as of December 31, 2015
by approximately $1.3 million and the total of service and interest cost components by approximately $0.1 million.
Multi-employer Plans. Viad contributes to defined benefit pension plans under the terms of collective-bargaining
agreements that cover its union-represented employees. The financial risks of participating in these multi-employer pension
plans generally include the fact that assets contributed to the plan by one employer may be used to provide benefits to
employees of other participating employers. Furthermore, if a participating employer ceases to contribute to the plan, the
unfunded obligations of the plan may be borne by the remaining participating employers. In addition, if Viad were to
discontinue its participation in some of its multi-employer pension plans, the Company may be required to pay those plans a
F-36
withdrawal liability amount based on the underfunded status of the plan. Viad also contributes to defined contribution plans
pursuant to its collective-bargaining agreements, which are generally not subject to the funding risks inherent in defined
benefit pension plans. The overall level of Viad’s contributions to its multi-employer plans may significantly vary from year
to year based on the demand for union-represented labor to support the Company’s operations. Viad does not have any
minimum contribution requirements for future periods pursuant to its collective-bargaining agreements for individually
significant multi-employer plans.
Viad’s participation in multi-employer pension plans for 2015 is outlined in the following table. Unless otherwise
noted, the most recent Pension Protection Act zone status available in 2015 and 2014 relates to the plan’s year end as of
December 31, 2014 and 2013, respectively, and is based on information received from the plan. Among other factors, plans
in the red zone are generally less than 65 percent funded, plans in the yellow zone are less than 80 percent funded, and plans
in the green zone are at least 80 percent funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which
a financial improvement plan or a rehabilitation plan is either pending or has been implemented.
Pension
Protection Act
Zone Status
FIP/RP
Status
Pending/
Implemented
Plan
No.
2015
2014
Expiration
Date of
Collective-
Bargaining
Agreement(s)
Surcharge
Paid
Viad Contributions
2014
2013
2015
EIN
(in thousands)
Pension Fund:
Western Conference of
Teamsters Pension Plan ... 91-6145047
Southern California Local
831—Employer Pension
Fund (1) ............................ 95-6376874
Chicago Regional Council
of Carpenters Pension
Fund ................................ 36-6130207
Electrical Contractors
Assoc. Chicago Local
Union 134, IBEW
Joint Pension Trust of
Chicago Plan #2 .............. 51-6030753
IBEW Local Union
No 357 Pension Plan A (2) ... 88-6023284
Central States, Southeast
and Southwest Areas
Pension Plan .................... 36-6044243
Southern California
IBEW-NECA Pension
Fund ................................ 95-6392774
National Electrical
Benefit Fund ................... 53-0181657
Southwest Carpenters
Pension Trust .................. 95-6042875
Sign Pictorial & Display
Industry Pension Plan (1) ... 94-6278490
Machinery Movers
Riggers & Mach Erect
Local 136 Supplemental
Retirement Plan (1) ........... 36-1416355
All other funds (3) ...............
Total contributions to
defined benefit plans .......
Total contributions to
other plans .......................
Total contributions to
multi-employer plans ......
1 Green Green
No
$ 5,632 $ 6,369 $ 5,524 No
5/31/2018
1 Green Green
No
2,485 2,481 2,244 No
8/31/17
1 Yellow Yellow
Yes
1,887 1,946 1,614 No
5/31/18
2 Green Green
No
1,190 1,081
957 No
6/3/17
1 Green Green
No
1,150 1,457 1,631 No
6/16/18
1 Red
Red
Yes
948 1,018
836 No
7/31/18
1 Yellow Yellow
Yes
835
768
184 No
continuous
1 Green Green
1 Green Green
1 Green Green
No
No
No
771
167
193 No
6/16/18
750
885
812 No
6/30/18
541
439
367 No
3/31/18
11 Red
Red
Yes
502
993
430 Yes
6/30/19
3,869 3,491 2,032
20,560 21,095 16,824
1,428 2,057 3,489
$21,988 $23,152 $ 20,313
F-37
(1)
(2)
(3)
The Company contributed more than 5 percent of total plan contributions for the 2014 and 2013 plan years based on
the plans’ Form 5500s.
The Company contributed more than 5 percent of total plan contributions for the 2013 plan year based on the plans’
Form 5500.
Represents participation in 45 pension funds during 2015.
Other Employee Benefits. The Company matches U.S. employee contributions to the 401(k) plan with shares of Viad
common stock up to 100 percent of the first 3 percent of a participant’s salary plus 50 percent of the next 2 percent. The
expense associated with the Company match was $3.7 million, $3.3 million, and $1.3 million for 2015, 2014, and 2013,
respectively. Historically, Viad has funded its matching contributions to employees’ 401(k) accounts through the Company’s
leveraged ESOP feature of the Company’s 401(k) defined contribution plan. ESOP shares are treated as outstanding for
income per share calculations. During 2014, the Company depleted these shares and matching contributions are now funded
from shares of Viad common stock held in treasury. Refer to Note 14 – Employee Stock Ownership Feature of 401(k) Plan
for further information.
Note 19. Restructuring Charges
Marketing & Events Group Consolidation
Beginning in 2009, Viad commenced certain restructuring actions designed to reduce the Company’s cost structure
primarily within the Marketing & Events U.S. Segment, and to a lesser extent in the Marketing & Events International
Segment. The Company implemented a strategic reorganization plan in order to consolidate the separate business units within
the Marketing & Events U.S. Segment. The Company also consolidated facilities and streamlined its operations in the United
Kingdom and Germany. As a result, the Company recorded restructuring charges in 2015, 2014 and 2013, primarily
consisting of severance and related benefits as a result of workforce reductions and charges related to the consolidation and
downsizing of facilities representing the remaining operating lease obligations (net of estimated sublease income) and related
costs.
Other Restructurings
The Company recorded restructuring charges in connection with the consolidation of certain support functions at its
corporate headquarters and certain reorganization activities within the Travel & Recreation Group. These charges primarily
consist of severance and related benefits due to headcount reductions and charges related to the downsizing of facilities.
The table below represents a reconciliation of beginning and ending liability balances by major restructuring activity:
Marketing & Events
Group Consolidation
Severance &
Employee
Benefits
Facilities
Other Restructurings
Severance &
Employee
Benefits
Facilities
(in thousands)
Balance at December 31, 2012 ..................................... $
Restructuring charges (recoveries) ..................................
Cash payments ................................................................
Adjustment to liability ....................................................
Balance at December 31, 2013 .....................................
Restructuring charges (recoveries) ..................................
Cash payments ................................................................
Adjustment to liability ....................................................
Balance at December 31, 2014 .....................................
Restructuring charges......................................................
Cash payments ................................................................
Adjustment to liability ....................................................
Balance at December 31, 2015 ..................................... $
720 $
2,931
(2,411)
—
1,240
2,358
(3,055)
—
543
1,767
(1,514)
(45)
751 $
5,571 $
(315)
(1,691)
—
3,565
(828)
(1,376)
(200)
1,161
587
(457)
—
1,291 $
— $
1,869
(498 )
(478 )
893
107
(845 )
85
240
602
(601 )
(7 )
234 $
933 $
(692)
(241)
—
—
—
—
—
—
—
—
—
— $
Total
7,224
3,793
(4,841)
(478)
5,698
1,637
(5,276)
(115)
1,944
2,956
(2,572)
(52)
2,276
As of December 31, 2015, the liabilities related to severance and employee benefits are expected to be paid by the end
of 2018. Refer to Note 22 - Segment Information for information regarding restructuring charges by segment.
F-38
Note 20. Leases and Other
Viad has entered into operating leases for the use of certain of its offices, equipment and other facilities. These leases
expire over periods up to 40 years. Leases which expire are generally renewed or replaced by similar leases. Some leases
contain scheduled rental increases accounted for on a straight-line basis.
As of December 31, 2015, Viad’s future minimum rental payments and related sublease rentals receivable with respect
to non-cancelable operating leases with terms in excess of one year were as follows:
(in thousands)
2016 ............................................................................................................................. $
2017 .............................................................................................................................
2018 .............................................................................................................................
2019 .............................................................................................................................
2020 .............................................................................................................................
Thereafter .....................................................................................................................
Total ....................................................................................................................... $
Rental
Payments
Receivable
Under Subleases
20,962 $
18,567
16,437
13,027
11,413
10,122
90,528 $
1,526
1,544
1,490
1,005
509
253
6,327
Net rent expense under operating leases consisted of the following:
(in thousands)
Minimum rentals ...................................................................................... $
Sublease rentals ........................................................................................
Total rentals, net ............................................................................... $
2015
41,564 $
(3,457)
38,107 $
December 31,
2014
37,707 $
(6,884 )
30,823 $
2013
34,201
(6,815)
27,386
The aggregate annual maturities and the related amounts representing interest on capital lease obligations are included
in Note 11 – Debt and Capital Lease Obligations.
In addition, as of December 31, 2015, the Company had aggregate purchase obligations of $28.1 million related to
various licensing agreements, consulting and other contracted services.
Note 21. Litigation, Claims, Contingencies, and Other
Viad and certain of its subsidiaries are plaintiffs or defendants to various actions, proceedings and pending claims,
some of which involve, or may involve, compensatory, punitive or other damages. Litigation is subject to many uncertainties
and it is possible that some of the legal actions, proceedings or claims could be decided against Viad. Although the amount of
liability as of December 31, 2015 with respect to these matters is not ascertainable, Viad believes that any resulting liability,
after taking into consideration amounts already provided for and insurance coverage, will not have a material effect on Viad’s
business, financial position or results of operations.
Viad is subject to various U.S. federal, state and foreign laws and regulations governing the prevention of pollution and
the protection of the environment in the jurisdictions in which Viad has or had operations. If the Company has failed to
comply with these environmental laws and regulations, civil and criminal penalties could be imposed and Viad could become
subject to regulatory enforcement actions in the form of injunctions and cease and desist orders. As is the case with many
companies, Viad also faces exposure to actual or potential claims and lawsuits involving environmental matters relating to its
past operations. Although it is a party to certain environmental disputes, Viad believes that any resulting liabilities, after
taking into consideration amounts already provided for and insurance coverage, will not have a material effect on the
Company’s financial position or results of operations. As of December 31, 2015 and 2014, Viad had recorded environmental
remediation liabilities of $4.5 million and $4.7 million related to previously sold operations, respectively.
As of December 31, 2015, Viad had certain obligations under guarantees to third parties on behalf of its subsidiaries.
These guarantees are not subject to liability recognition in the consolidated financial statements and relate to leased facilities
entered into by Viad’s subsidiary operations. The Company would generally be required to make payments to the respective
third parties under these guarantees in the event that the related subsidiary could not meet its own payment obligations. The
F-39
maximum potential amount of future payments that Viad would be required to make under all guarantees existing as of
December 31, 2015 would be $10.4 million. These guarantees relate to leased facilities expiring through March 2021. There
are no recourse provisions that would enable Viad to recover from third parties any payments made under the guarantees.
Furthermore, there are no collateral or similar arrangements whereby Viad could recover payments.
A significant portion of Viad’s employees are unionized and the Company is a party to approximately 100 collective-
bargaining agreements, with approximately one-third requiring renegotiation each year. As of December 31, 2015,
approximately 29 percent of Viad’s regular full-time employees are covered by collective-bargaining agreements. If the
Company were unable to reach an agreement with a union during the collective-bargaining process, the union may call for a
strike or work stoppage, which may, under certain circumstances, adversely impact the Company’s businesses and results of
operations. Viad believes that relations with its employees are satisfactory and that collective-bargaining agreements expiring
in 2016 will be renegotiated in the ordinary course of business without having a material adverse effect on Viad’s operations.
The Company entered into new showsite and warehouse agreements with the Chicago Teamsters Local 727, effective
January 1, 2014, and those agreements contain provisions that allow the parties to re-open negotiation of the agreements on
pension-related issues. The Company is in informal discussions regarding those issues with all relevant parties and is working
diligently to resolve those issues in a manner that will be reasonable and equitable to employees, customers and shareholders.
Although the Company’s labor relations are currently stable, disruptions pending the outcome of the Chicago Teamsters
Local 727 negotiations could occur, as they could with any collective-bargaining agreement negotiation, with the possibility
of an adverse impact on the operating results of the Marketing & Events Group.
Viad’s businesses contribute to various multi-employer pension plans based on obligations arising under collective
bargaining agreements covering its union-represented employees. Viad’s contributions to these plans in 2015, 2014 and 2013
totaled $22.0 million, $23.2 million and $20.3 million, respectively. Based upon the information available to Viad from plan
administrators, management believes that several of these multi-employer plans are underfunded. The Pension Protection Act
of 2006 requires pension plans underfunded at certain levels to reduce, over defined time periods, the underfunded status. In
addition, under current laws, the termination of a plan, or a voluntary withdrawal from a plan by Viad, or a shrinking
contribution base to a plan as a result of the insolvency or withdrawal of other contributing employers to such plan, would
require Viad to make payments to such plan for its proportionate share of the plan’s unfunded vested liabilities. As of
December 31, 2015, the amount of additional funding, if any, that Viad would be required to make related to multi-employer
pension plans is not ascertainable.
Viad is self-insured up to certain limits for workers’ compensation, employee health benefits, automobile, product and
general liability and property loss claims. The aggregate amount of insurance liabilities (up to the Company’s retention limit)
related to Viad’s continuing operations was approximately $20.5 million as of December 31, 2015 which includes $13.4
million related to workers’ compensation liabilities and $7.1 million related to general/auto liability claims. Viad has also
retained and provided for certain insurance liabilities in conjunction with previously sold businesses of $4.2 million as of
December 31, 2015, related to workers’ compensation liabilities. Provisions for losses for claims incurred, including
estimated claims incurred but not yet reported, are made based on Viad’s historical experience, claims frequency, and other
factors. A change in the assumptions used could result in an adjustment to recorded liabilities. Viad has purchased insurance
for amounts in excess of the self-insured levels, which generally range from $0.2 million to $0.5 million on a per claim basis.
Viad does not maintain a self-insured retention pool fund as claims are paid from current cash resources at the time of
settlement. Viad’s net cash payments in connection with these insurance liabilities were $5.6 million, $4.8 million and $6.6
million in 2015, 2014 and 2013, respectively.
In addition, as of December 31, 2015, Viad had recorded insurance liabilities of $6.0 million related to continuing
operations, which represents the amount for which Viad remains the primary obligor after self-insured insurance limits,
without taking into consideration the above-referenced insurance coverage. Of this total, $2.5 million related to workers’
compensation liabilities and $3.5 million related to general/auto liability claims. The Company has recorded those amounts in
other deferred items and liabilities in Viad’s consolidated balance sheets with a corresponding receivable in other investments
and assets.
F-40
Note 22. Segment Information
Viad measures profit and performance of its operations on the basis of segment operating income which excludes
restructuring charges and recoveries and impairment charges. Intersegment sales are eliminated in consolidation and
intersegment transfers are not significant. Corporate activities include expenses not allocated to operations. Depreciation and
amortization and share-based compensation expense are the only significant non-cash items for the reportable segments.
Viad’s reportable segments with reconciliations to consolidated totals are as follows:
(in thousands)
Revenue:
Marketing & Events Group:
U.S. Segment ...................................................................................... $
International Segment .........................................................................
Intersegment eliminations ..................................................................
Total Marketing & Events Group ............................................................
Travel & Recreation Group .....................................................................
Total revenue .......................................................................................... $
Segment operating income:
Marketing & Events Group:
U.S. Segment ...................................................................................... $
International Segment .........................................................................
Total Marketing & Events Group ............................................................
Travel & Recreation Group .....................................................................
Segment operating income ....................................................................
Corporate activities .............................................................................
Operating income ...................................................................................
Interest income ...................................................................................
Interest expense ..................................................................................
Restructuring (charges) recoveries:
Marketing & Events U.S. Segment ....................................................
Marketing & Events International Segment .......................................
Travel & Recreation Group ................................................................
Corporate ............................................................................................
Impairment charges:
Marketing & Events U.S. Segment ....................................................
Marketing & Events International Segment .......................................
Travel & Recreation Group ................................................................
Income from continuing operations before income taxes................... $
2015
December 31,
2014
2013
720,882 $
272,634
(16,638)
976,878
112,170
1,089,048 $
710,835 $
249,649
(16,016 )
944,468
120,519
1,064,987 $
628,856
229,312
(13,264)
844,904
108,443
953,347
14,563 $
12,211
26,774
27,810
54,584
(9,720)
44,864
658
(4,535)
(541)
(1,813)
(200)
(402)
—
—
(96)
37,935 $
21,400 $
10,339
31,739
28,127
59,866
(14,348 )
45,518
305
(2,015 )
278
(1,808 )
41
(148 )
—
(884 )
—
41,287 $
11,024
9,068
20,092
21,819
41,911
(6,755)
35,156
550
(1,234)
409
(2,362)
(809)
(1,031)
(658)
(294)
(2,097)
27,630
F-41
(in thousands)
Assets:
Marketing & Events Group:
2015
December 31,
2014
2013
U.S. ..................................................................................................... $
International........................................................................................
Travel & Recreation Group .....................................................................
Corporate and other..................................................................................
$
294,618 $
115,494
195,527
86,656
692,295 $
304,727 $
116,842
199,986
93,388
714,943 $
194,422
81,058
209,611
76,841
561,932
Depreciation and amortization:
Marketing & Events Group:
U.S. ..................................................................................................... $
International........................................................................................
Travel & Recreation Group .....................................................................
Corporate and other..................................................................................
$
Capital expenditures:
Marketing & Events Group:
U.S. ..................................................................................................... $
International........................................................................................
Travel & Recreation Group .....................................................................
Corporate and other..................................................................................
$
18,658 $
8,435
7,974
164
35,231 $
8,066 $
8,366
13,107
300
29,839 $
16,066 $
6,311
8,232
183
30,792 $
14,515 $
4,134
10,740
—
29,389 $
14,906
5,566
7,319
176
27,967
8,278
4,332
23,108
401
36,119
Geographic Areas. Viad’s foreign operations are located principally in Canada, the United Kingdom, Germany, the
United Arab Emirates and the Netherlands. Marketing & Events Group revenue is designated as domestic or foreign based on
the originating location of the product or service. Long-lived assets are attributed to domestic or foreign based principally on
the physical location of the assets. Long-lived assets consist of “Property and equipment, net” and “Other investments and
assets.” The table below presents the financial information by major geographic area:
(in thousands)
Revenue:
2015
December 31,
2014
2013
United States....................................................................................... $
EMEA .................................................................................................
Canada ................................................................................................
Total revenue .......................................................................................... $
Long-lived assets:
United States....................................................................................... $
EMEA .................................................................................................
Canada ................................................................................................
Total long-lived assets ............................................................................ $
726,436 $
220,046
142,566
1,089,048 $
718,538 $
192,674
153,775
1,064,987 $
141,051 $
15,714
71,677
228,442 $
130,401 $
14,215
78,193
222,809 $
637,482
166,931
148,934
953,347
132,315
10,055
82,986
225,356
Note 23. Common Stock Repurchases
In December 2012, Viad announced the authorization of its Board of Directors to repurchase shares of the Company’s
common stock from time to time at prevailing market prices. During 2015 and 2014, Viad repurchased 141,462 and 448,436
shares on the open market for $3.8 million and $10.6 million, respectively. As of December 31, 2015, 440,540 shares remain
available for repurchase. In addition, during 2015, 2014, and 2013, the Company repurchased 35,649 shares at a cost of $1.0
million, 72,996 shares at a cost of $1.8 million, and 50,156 shares at a cost of $1.3 million, respectively, related to tax
withholding requirements on vested share-based awards.
F-42
Note 24. Discontinued Operations
In 2015, Viad recorded losses from discontinued operations of $0.4 million due to reserve adjustments and legal fees
related to previously sold operations. In 2014, Viad recorded income from discontinued operations of $13.3 million primarily
related to the gain on the possessory interest and personal property at Glacier Park. The Company’s 2013 results related to
the operations of Glacier Park’s concession contract business have been reclassified as discontinued operations in Viad’s
Consolidated Statements of Operations. For the year ended 2013, Viad recorded income from discontinued operations of $1.2
million related to Glacier Park income.
On December 31, 2013, Glacier Park’s concession contract with the Park Service to operate lodging, tour and
transportation and other hospitality services within Glacier National Park expired. Upon completion of the contract, the
Company received cash payments in January 2014 totaling $25.0 million resulting in a pre-tax gain of $21.5 million for the
Company’s possessory interest. The gain after-tax on the possessory interest was $13.5 million with $2.7 million attributable
to the noncontrolling interest. These amounts are included in income (loss) from discontinued operations and net income
attributable to noncontrolling interest in Viad’s Consolidated Statements of Operations. In September 2014, the Company
received $3.0 million in cash for the sale of the remaining personal property assets held for sale at Glacier Park. This resulted
in a gain of approximately $0.7 million, net of tax.
The following summarizes Glacier Park’s expired concession contract operating results, which are presented in income
(loss) from discontinued operations, net of tax, in Viad’s Consolidated Statements of Operations:
(in thousands)
Total revenue ............................................................................................................... $
Costs and expenses ......................................................................................................
Impairment charges ......................................................................................................
Restructuring charges...................................................................................................
Income (loss) from discontinued operations, before income taxes.........................
Income tax benefit (expense) .......................................................................................
Income (loss) from discontinued operations, net of tax ..........................................
Gain on sale of discontinued operations, net of tax .....................................................
Income from discontinued operations ......................................................................
Income from discontinued operations attributable to noncontrolling interest ..............
Income from discontinued operations attributable to Viad ................................... $
Year Ended December 31,
2014
2013
— $
(93 )
—
—
(93 )
45
(48 )
13,343
13,295
(2,825 )
10,470 $
19,445
(15,462)
(2,364)
(98)
1,521
(280)
1,241
—
1,241
(248)
993
For the year ended December 31, 2013, the Company recorded a non-cash impairment charge of $4.5 million
representing all goodwill at the Glacier Park reporting unit, of which $2.1 million related to continuing operations and $2.4
million related to discontinued operations. Additionally, for the year ended December 31, 2013, the Company recorded other
asset impairment charges of $1.0 million at the Marketing & Events Group related to the write-off of certain assets within the
Marketing & Events Group.
For the year ended December 31, 2014, Viad also recorded income from discontinued operations, net of tax, of $1.1
million primarily due to additional reserves related to certain liabilities associated with previously sold operations and an
insurance recovery. For the year ended December 31, 2013, Viad recorded income from discontinued operations, net of tax,
of $1.1 million primarily related to the sale of land associated with previously sold operations.
The following is a reconciliation of net income attributable to the noncontrolling interest:
(in thousands)
Income (loss) from continuing operations ............................................... $
Income from discontinued operations ......................................................
Net income attributable to noncontrolling interest ....................... $
2015
Year Ended December 31,
2014
2013
442 $
—
442 $
388 $
2,825
3,213 $
(117)
248
131
F-43
Note 25. Selected Quarterly Financial Information (Unaudited)
The following table sets forth selected unaudited consolidated quarterly financial information:
2015
2014
Fourth
(in thousands, except per share data)
Quarter
Revenue: ............................................ $ 264,396 $317,035 $255,946 $251,671 $285,641 $ 256,391 $ 299,802 $223,155
Operating income (loss):
Second
Quarter
First
Quarter
Third
Quarter
First
Quarter
Third
Quarter
Second
Quarter
Fourth
Quarter
Ongoing operations (1) .................. $ (1,125 ) $ 36,286 $ 14,571 $
(1,354)
Corporate activities .......................
Restructuring (charges)
(257)
recoveries...................................
Impairment charges ......................
—
Operating income (loss) ............... $ (4,151 ) $ 33,234 $ 12,960 $
(1,069)
—
(216 )
—
(1,983)
(2,810 )
4,852 $ 13,361 $ 14,136 $ 33,013 $
(3,468)
(3,573)
(2,039)
(1,991 )
(644)
(6,850)
(1,414)
(96)
177
(1,369 )
—
(884 )
(231) $ 11,111 $ 9,892 $ 29,311 $ (7,317)
(211)
—
(234)
—
Income (loss) from continuing
operations attributable to Viad (2) .... $ (1,908 ) $ 22,311 $
Net income (loss) attributable to
Viad (2)............................................. $ (2,056 ) $ 22,389 $
Basic and Diluted income (loss) per
common share: (2) (3)
7,393 $
(796) $
9,312 $ 7,978 $ 30,755 $ (7,255)
7,230 $
(957) $ 21,882 $ 6,742 $ 29,620 $ (5,889)
Continuing operations
attributable to Viad .................... $
Net income (loss) attributable to
Viad common stockholders ....... $
(0.10 ) $
1.11 $
0.37 $
(0.04) $
0.46 $
0.39 $
1.53 $
(0.37)
(0.10 ) $
1.12 $
0.36 $
(0.05) $
1.08 $
0.33 $
1.48 $
(0.30)
(1)
(2)
(3)
Represents revenue less costs of services and products sold.
Includes $10.1 million benefit associated with the 2014 third quarter release of the valuation allowance relating to
foreign income tax credits.
The sum of quarterly income per share amounts may not equal annual income per share due to rounding.
Note 26. Subsequent Events
Acquisition of the Maligne Lake Tours Business
On January 4, 2016, Viad acquired the business of Maligne Tours Ltd. (“Maligne Lake Tours”), which provides
interpretive boat tours and related services at Maligne Lake, the largest lake in Jasper National Park. Maligne Lake Tours has
seven tour boats operating seasonally from May through October, a marina and day lodge that offers food and beverage and
retail services, a historic chalet complex that is available for catered special events, and a historic boat house that offers
canoes, kayaks, and rowboats for rental. The purchase price was approximately $20.9 million Canadian dollars
(approximately $15.0 million U.S. dollars) in cash, subject to certain adjustments.
Amendment to Credit Agreement
Effective February 24, 2016, Viad executed the Credit Agreement Amendment to the Company’s Credit Agreement, to
modify the terms of the financial covenants and the negative covenants under the Credit Agreement related to acquisitions,
restricted payments, and indebtedness.
The Credit Agreement, as amended by the Credit Agreement Amendment, includes the following revisions:
Acquisitions in the same or related lines of business are permitted if the leverage ratio, on a pro forma basis, is
less than or equal to 3.00 to 1.00;
Unlimited stock dividends, distributions, and repurchases if the leverage ratio is less than or equal to 2.50 to 1.00,
otherwise limited to $20 million in any calendar year;
Maintain a leverage ratio of not greater than 3.50 to 1.00;
Maintain a fixed charge coverage ratio of not less than 1.75 to 1.00; and
Unlimited unsecured indebtedness if the leverage ratio is less than or equal to 3.00 to 1.00.
Refer to Note 11 – Debt and Capital Lease Obligations for further information.
F-44
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of
Viad Corp
Phoenix, Arizona
We have audited the accompanying consolidated balance sheets of Viad Corp and subsidiaries (the “Company”) as of
December 31, 2015 and 2014, and the related consolidated statements of operations, comprehensive income, stockholders’
equity, and cash flows for each of the three years in the period ended December 31, 2015. Our audits also included the
financial statement schedule listed in the Index at Item 15. These consolidated financial statements and financial statement
schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on the financial
statements and financial statement schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of
the Company as of December 31, 2015 and 2014, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 2015, in conformity with accounting principles generally accepted in the United
States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.
As discussed in Note 1 to the consolidated financial statements, the Company has changed the manner in which it
classifies deferred tax assets and liabilities to reflect the adoption of ASU 2015-17 in 2015, and retrospectively in 2014.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the Company’s internal control over financial reporting as of December 31, 2015, based on the criteria established in
Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated March 11, 2016 expressed an unqualified opinion on the Company’s internal control over
financial reporting.
/s/ DELOITTE & TOUCHE LLP
Phoenix, Arizona
March 11, 2016
F-45
VIAD CORP
SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS
Additions
Deductions
(in thousands)
Allowances for doubtful accounts:
of Year
Expense
Balance at
Beginning Charged to
Charged to
Other
Credited
to Other Balance at
Accounts Write Offs Accounts End of Year
December 31, 2013 ........................................... $
December 31, 2014 ...........................................
December 31, 2015 ...........................................
1,150 $
877
1,258
313 $
821
955
— $
—
542
(586 ) $
(440 )
(1,162 )
— $
—
—
877
1,258
1,593
Deferred tax valuation allowance:
December 31, 2013 ........................................... $ 14,576 $
12,393
December 31, 2014 ...........................................
3,295
December 31, 2015 ...........................................
1,917 $
95
—
— $ (4,100 ) $
2,589 (11,782 )
(860 )
402
— $ 12,393
3,295
—
2,837
—
F-46
EXHIBIT INDEX
Exhibit #
3.A
3.B
4.A1
4.A2
4.B
10.A1
10.A2
10.A3
10.A4
10.B1
10.B2
10.B3
10.B4
10.B5
10.C1
10.C2
10.D1
Copy of Restated Certificate of Incorporation of Viad Corp, as amended through July 1, 2004, filed as Exhibit
3.A to Viad Corp’s Form 10-Q for the period ended June 30, 2004, is hereby incorporated by reference (SEC File
No. 001-11015; SEC Film No. 04961107).
Copy of Bylaws of Viad Corp, as amended through December 5, 2013, filed as Exhibit 3 to Viad Corp’s Form 8-
K filed December 9, 2013, is hereby incorporated by reference.
Copy of $300,000,000 Amended and Restated Credit Agreement, dated as of December 22, 2014, filed as Exhibit
4 to Viad Corp’s Form 8-K filed December 23, 2014, is hereby incorporated by reference.
Copy of Amendment No. 1 to the $300,000,000 Amended and Restated Credit Agreement, dated as of December
22, 2014, effective as of February 24, 2016, filed as Exhibit 4 to Viad Corp’s Form 8-K filed March 1, 2016, is
hereby incorporated by reference.
Copy of Amended and Restated Pledge and Security Agreement, Guaranty, and Amended and Restated
Subsidiary Pledge and Security Agreement dated as of December 22, 2014, filed as Exhibit 4 to Viad Corp’s
Form 8-K filed December 23, 2014, is hereby incorporated by reference.
Copy of 2007 Viad Corp Omnibus Incentive Plan, filed as Appendix A to Viad Corp’s Proxy Statement for the
2012 Annual Meeting of Shareholders, filed April 13, 2012, is hereby incorporated by reference.+
Copy of Viad Corp Management Incentive Plan, amended as of February 27, 2013, pursuant to the 2007 Viad
Corp Omnibus Incentive Plan, filed as Exhibit 10.C to Viad Corp’s Form 8-K filed March 5, 2013, is hereby
incorporated by reference.+
Copy of Viad Corp Performance Unit Incentive Plan, effective as of February 27, 2013, pursuant to the 2007
Viad Corp Omnibus Incentive Plan, filed as Exhibit 10.D to Viad Corp’s Form 8-K filed March 5, 2013, is
hereby incorporated by reference.+
Copy of Amendment to the Viad Corp Performance Unit Incentive Plan, as amended February 27, 2013 pursuant
to the 2007 Viad Corp Omnibus Incentive Plan, effective as of February 24, 2016, filed as Exhibit 10.A to Viad
Corp’s Form 8-K filed March 1, 2016, is hereby incorporated by reference.+
Copy of form of Restricted Stock Agreement - Executives, effective as of December 3, 2014, pursuant to the
2007 Viad Corp Omnibus Incentive Plan, filed as Exhibit 10.A to Viad Corp’s Form 8-K filed December 5, 2014,
is hereby incorporated by reference.+
Copy of form of Restricted Stock Agreement - Executives, effective as of March 26, 2014, pursuant to the 2007
Viad Corp Omnibus Incentive Plan, filed as Exhibit 10.A to Viad Corp’s Form 8-K filed March 28, 2014, is
hereby incorporated by reference.+
Copy of form of Restricted Stock Agreement - Executives, effective as of November 29, 2012, pursuant to the
2007 Viad Corp Omnibus Incentive Plan, filed as Exhibit 10 to Viad Corp’s Form 8-K filed December 3, 2012, is
hereby incorporated by reference.+
Copy of form of Restricted Stock Agreement - Executives, effective as of March 23, 2011, pursuant to the 2007
Viad Corp Omnibus Incentive Plan, filed as Exhibit 10.B to Viad Corp’s Form 8-K filed March 29, 2011, is
hereby incorporated by reference.+
Copy of form of Restricted Stock Agreement for Outside Directors, effective as of February 25, 2008, pursuant to
the 2007 Viad Corp Omnibus Incentive Plan, filed as Exhibit 10.F to Viad Corp’s Form 8-K filed February 28,
2008, is hereby incorporated by reference (SEC File No. 001-11015; SEC Film No. 08651224).+
Copy of form of Restricted Stock Units Agreement, effective as of March 26, 2014, pursuant to the 2007 Viad
Corp Omnibus Incentive Plan, filed as Exhibit 10.B to Viad Corp’s Form 8-K filed March 28, 2014, is hereby
incorporated by reference.+
Copy of form of Restricted Stock Units Agreement, effective as of March 23, 2011, pursuant to the 2007 Viad
Corp Omnibus Incentive Plan, filed as Exhibit 10.C to Viad Corp’s Form 8-K filed March 29, 2011, is hereby
incorporated by reference.+
Copy of form of Performance Unit Agreement, effective as of March 26, 2014, pursuant to the 2007 Viad Corp
Exhibit #
10.D2
10.E1
10.E2
10.F1
10.F2
10.G1
10.G2
10.G3
10.G4
10.H1
10.H2
10.H3
10.H4
10.I
10.J1
10.J2
10.K1
Omnibus Incentive Plan, filed as Exhibit 10.C to Viad Corp’s Form 8-K filed March 28, 2014, is hereby
incorporated by reference.+
Copy of form of Performance Unit Agreement, effective as of February 24, 2016, pursuant to the 2007 Viad Corp
Omnibus Incentive Plan, filed as Exhibit 10.B to Viad Corp’s Form 8-K filed March 1, 2016, is hereby
incorporated by reference.+
Copy of form of Non-Qualified Stock Option Agreement, effective as of February 25, 2010, pursuant to the 2007
Viad Corp Omnibus Incentive Plan, filed as Exhibit 10.B to Viad Corp’s Form 8-K filed February 26, 2010, is
hereby incorporated by reference (SEC File No. 001-110015; SEC Film No. 10640085).+
Copy of form of Incentive Stock Option Agreement, effective as of February 25, 2010, pursuant to the 2007 Viad
Corp Omnibus Incentive Plan, filed as Exhibit 10.A to Viad Corp’s Form 8-K filed February 26, 2010, is hereby
incorporated by reference (SEC File No. 001-110015; SEC Film No. 10640085).+
Copy of form of Transition Services Agreement, effective as of January 2, 2014, between Brewster Inc. and
Michael M. Hannan, filed as Exhibit 10 to Viad Corp’s Form 8-K filed March 17, 2014, is hereby incorporated
by reference.+
Copy of Severance Agreement and General Release between Viad Corp and Paul B. Dykstra, effective as of
December 3, 2014, filed as Exhibit 10.C to Viad Corp’s Form 8-K filed December 5, 2014, is hereby
incorporated by reference.+
Copy of form of Viad Corp Executive Severance Plan (Tier I-2013), effective as February 27, 2013, filed as
Exhibit 10.B to Viad Corp’s Form 8-K filed March 5, 2013, is hereby incorporated by reference.+
Copy of forms of Viad Corp Executive Severance Plans (Tier I and II), amended and restated for Code Section
409A as of January 1, 2005, filed as Exhibit 10.B to Viad Corp’s Form 8-K filed August 29, 2007, is hereby
incorporated by reference (SEC File No. 001-11015; SEC Film No. 071088413).+
Copy of Amendment No. 1 to Viad Corp Executive Severance Plan (Tier I), effective as of February 26, 2014,
filed as Exhibit 10 to Viad Corp’s Form 8-K filed March 4, 2014, is hereby incorporated by reference.+
Copy of Executive Officer Pay Continuation Policy adopted February 7, 2007, filed as Exhibit 10.A to Viad
Corp’s Form 8-K filed February 13, 2007, is hereby incorporated by reference (SEC File No. 001-11015; SEC
Film No. 07609762).+
Copy of Employment Agreement between Viad Corp and Paul B. Dykstra dated as of May 15, 2007, filed as
Exhibit 10.B to Viad Corp’s Form 8-K filed May 21, 2007, is hereby incorporated by reference (SEC File No.
001-11015; SEC Film No. 07867527).+
Copy of Amendment No. 1 to Employment Agreement between Viad Corp and Paul B. Dykstra effective as of
February 27, 2013, filed as Exhibit 10.A to Viad Corp’s Form 8-K filed March 5, 2013, is hereby incorporated by
reference.+
Copy of Severance Agreement (No Change in Control) between Viad Corp and Steven W. Moster, effective as of
December 3, 2014, filed as Exhibit 10.B to Viad Corp’s Form 8-K filed December 5, 2014, is hereby
incorporated by reference.+
Copy of Severance Agreement (No Change in Control) between Viad Corp and David W. Barry, effective as of
April 22, 2015.+*
Copy of Viad Corp Supplemental TRIM Plan, as amended and restated effective January 1, 2005 for Code
Section 409A, filed as Exhibit 10.E to Viad Corp’s Form 8-K filed August 29, 2007, is hereby incorporated by
reference (SEC File No. 001-11015; SEC Film No. 071088413).+
Copy of Viad Corp Supplemental Pension Plan, amended and restated as of January 1, 2005 for Code Section
409A, filed as Exhibit 10.A to Viad Corp’s Form 8-K filed August 29, 2007, is hereby incorporated by reference
(SEC File No. 001-11015; SEC Film No. 071088413).+
Copy of Viad Corp Defined Contribution Supplemental Executive Retirement Plan, effective as of January 1,
2013, filed as Exhibit 10.E to Viad Corp’s Form 8-K filed March 5, 2013, is hereby incorporated by reference.+
Summary of Compensation Program of Non-Employee Directors of Viad Corp, effective as of February 23,
Exhibit #
10.K2
10.L
10.M
14
21
23
24
31.1
31.2
32.1
32.2
2016.+*
Description of Viad Corp Director’s Matching Gift Program, filed as Exhibit 10.Q to Viad Corp’s 1999 Form 10-
K filed March 17, 2000, is hereby incorporated by reference (SEC File No. 001-11015; SEC Film No. 572329).+
Copy of form of Indemnification Agreement between Viad Corp and Directors of Viad Corp, as approved by
Viad Corp stockholders on October 16, 1987, as updated to reflect revised company name and gender-neutral
references only, and filed as Exhibit 10.I to Viad Corp’s 2008 Form 10-K filed February 27, 2009, is hereby
incorporated by reference (SEC File No. 001-11015; SEC Film No. 09642683).+
Copy of Retirement Plan for Management Employees of Brewster Inc., as amended and restated effective
January 1, 2010, and filed as Exhibit 10.J to Viad Corp’s 2009 Form 10-K filed March 8, 2010, is hereby
incorporated by reference (SEC File No. 001-11015; SEC Film No. 10664160).+
Copy of Code of Ethics of Viad Corp adopted May 13, 2003, filed as Exhibit 14 to Viad Corp’s 2003 Form 10-K
filed March 11, 2004, is hereby incorporated by reference (SEC File No. 001-11015; SEC Film No. 04663620).
List of Subsidiaries of Viad Corp.*
Consent of Independent Registered Public Accounting Firm to the incorporation by reference into specified
registration statements on Form S-8 of its report contained in this Annual Report.*
Power of Attorney signed by Directors of Viad Corp.*
Exhibit of Certification of Chief Executive Officer of Viad Corp pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.#*
Exhibit of Certification of Chief Executive Officer of Viad Corp pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.#*
Additional Exhibit of Certification of Chief Executive Officer of Viad Corp pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.#**
Additional Exhibit of Certification of Chief Financial Officer of Viad Corp pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.#**
101.INS XBRL Instance Document.*
101.SCH XBRL Taxonomy Extension Schema Document.*
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document.*
101.DEF XBRL Taxonomy Extension Definition Linkbase Document.*
101.LAB XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document.*
*
Filed herewith.
**
Furnished herewith.
+ Management contract or compensation plan or arrangement.
#
A signed original of this written statement has been provided to Viad Corp and will be retained by Viad Corp and
furnished to the Securities and Exchange Commission upon request.
Documents incorporated by reference can be read and copied at the SEC’s public reference section, located in Room
1580, 100 F Street, N.E., Washington, DC 20549, and on the SEC’s Internet site at www.sec.gov.
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CORPORATE INFORMATION
TRANSFER AGENT
To submit a change of address, to make inquiries regarding
dividend payments, to mail Common Stock certificates for
transfer or to redeem $4.75 Preferred Stock certificates,
please contact:
Wells Fargo Shareowner Services
PO Box 64874
St. Paul, MN 55164-0874
(800) 453-2235
www.wellsfargo.com/shareownerservices
Shareholders of record who receive more than one copy of this
annual report may contact our transfer agent and arrange to
have their accounts consolidated.
AWARDS
SHAREHOLDER INFORMATION
Annual Shareholders Meeting
The annual meeting of shareholders is scheduled to be held on:
May 19, 2016
8:00 a.m. (MST)
The Camby Hotel
2401 East Camelback Road
Phoenix, AZ 85016
(602) 468-0700
www.thecamby.com
Adjusted Segment EBITDA and Income Before Other Items are supplemental to results presented under accounting principles
generally accepted in the United States of America (“GAAP”) and may not be comparable to similarly titled measures presented
by other companies. These measures are used by management to facilitate period-to-period comparisons and analysis of Viad’s
operating performance and liquidity. Management believes these measures are useful to investors in trending, analyzing and
benchmarking the performance and value of Viad’s business. These non-GAAP measures should be considered in addition to, but
not as a substitute for, other similar measures reported in accordance with GAAP.
ADJUSTED SEGMENT EBITDA
INCOME BEFORE OTHER ITEMS
Viad Consolidated
GES
T&R
Millions
2013
2014
2015
2015
2015
Per Share (net of tax)
Segment Operating
Income
$ 41.9 $ 59.9 $ 54.6 $ 26.8 $ 27.8
Income from Continuing Operations
Attributable to Viad
Viad Consolidated
2013
2014
2015
$ 0.96 $ 2.02 $ 1.34
Integration Costs
–
0.8
0.9
0.9
–
Restructuring Charges
0.13
0.05
0.09
Segment Depreciation
26.5
27.9
27.9
20.2
7.7
Impairment Charges
0.08
0.03
–
Segment Amortization
1.3
2.7
7.2
6.9
0.3
Adjusted Segment
EBITDA
$ 69.7 $ 91.3 $ 90.6 $ 54.8 $ 35.8
Acquisition-Related Costs and
Other Non-Recurring Items
–
0.24
0.10
Favorable Tax Matters
(0.02)
(0.59)
(0.07)
Income Before Other Items
$ 1.15 $ 1.75 $ 1.46
Design by Eisenberg And Associates
VIAD CORP
1850 N. Central Avenue
Suite 1900
Phoenix, AZ 85004-4565
www.viad.com