2016 ANNUAL REPORT
Connecting guests to
breathtaking iconic travel
destinations through
unforgettable, inspiring
experiences.
Viad generates revenue and shareholder value through its two business groups: GES (previously referred to
as the Marketing & Events Group) and Pursuit (previously referred to as the Travel & Recreation Group).
GES is a global, full-service live events company offering a comprehensive range of services to the world’s
leading brands and event organizers. Pursuit is a collection of iconic travel experiences in Alaska, Montana
and Western Canada that showcase the best of Banff, Jasper, Waterton Lakes, Glacier, Denali and Kenai Fjords
national parks. Viad is an S&P SmallCap 600 company.
Photo: (Top Left) Kenai Fjords Wilderness Lodge — Seward, Alaska, (Bottom Left) FlyOver Canada — Vancouver, British Columbia
(Top Right) Ron Arad’s Curtain Call – The Roundhouse, London, (Bottom Right) Coca-Cola’s Scholars Foundation Gala — Atlanta, Georgia
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Producing high-value, live
events across the globe that
engage audiences in compelling,
immersive experiences.
IMMERSIVE
DEAR FELLOW SHAREHOLDERS
I am proud to report that Viad had a very successful year in 2016. Both business groups
delivered strong financial performance and we continued to make significant progress
toward the strategic goals we laid out in early 2014. We are positioning GES as the preferred
global, full-service provider for live events and leveraging our leading market position to
drive growth in adjacent and under-penetrated areas that offer higher margins and strong
growth prospects. We are also scaling Pursuit, our high-margin travel and recreation
business, through our “Refresh, Build, Buy” initiatives with a goal of exceeding $250 million
in revenue.
Over the past three years, our efforts have led to a cumulative revenue increase of
approximately 26 percent with a 350 basis point improvement in adjusted segment
EBITDA margins, and our income per share before other items has more than doubled.
During that same time, we returned almost $70 million to shareholders through dividends
and share repurchases and acquired nine leading businesses that strengthen both of our
business groups.
2016 PERFORMANCE
Our focus on growth and shareholder value creation helped drive a year-over-year increase
in Viad’s income per share before other items of 63 percent in 2016. Our consolidated revenue
reached $1.2 billion, up 10.6 percent from the prior year, and our adjusted segment EBITDA
grew by $40.0 million. Our total shareholder return was also very strong at 58 percent, which
is nearly three times that of the Russell 2000 Index. This impressive performance reflects the
meaningful organic growth and investments we have made to enhance the earnings power
of our company.
GES HIGHLIGHTS
GES delivered revenue of $1.05 billion in 2016, up 8 percent from 2015, and margin
improvement of 200 basis points. These strong results were driven by positive show rotation,
continued same-show growth, new business wins and our focus on driving growth in higher-
margin areas like audio-visual services, event technologies and corporate events.
During August, we expanded our presence in the $2 billion U.S. audio-visual event production
market with the acquisition of ON Services. Audio-visual (AV) event production is a
strategically important market for GES due to its size, margin profile and importance to live
events. ON Services is a strong business that, combined with GES, provides cross-selling
opportunities as well as in-sourcing benefits. Additionally, it enhances our ability to gain
share in the large and higher-margin corporate event market where AV services represent
about half of the typical spend. We see significant opportunities to
drive future growth through in-house AV services.
WE SEE SIGNIFICANT
OPPORTUNITIES TO DRIVE
FUTURE GROWTH THROUGH
IN-HOUSE AV SERVICES.
Event technology is another important element of our growth
strategy. As event organizers and corporate marketers increasingly
leverage technology to drive improved ROI and enhance the overall
event experience, we are positioning GES to meet both their current
and future needs. During 2016, we launched our registration and data
analytics platform in North America and the Middle East, making it available to events in all
of our major markets. This platform is a scalable, end-to-end SaaS solution offering event
management tools, attendee engagement solutions and data analytics.
With a broadened suite of live event services, our teams are finding success in the
marketplace both from cross-selling our full range of services and from securing new
business wins. We are well-positioned for continued growth and margin improvement over
the longer-term as our mix of revenue shifts to higher-margin adjacencies.
At Pursuit, our promise is to inspire travelers and each other. To
never stop searching for places we’re passionate about, connections
we value and moments that bring us joy. In 2016, Viad completed
four acquisitions that added two world-class attractions, including
Maligne Lake Tours (pictured above). Our interpretive boat cruise at
Maligne Lake has been declared the “Best Boat Cruise in Canada” by
8 million Reader’s Digest subscribers.
Photo: Maligne Lake Tours — Jasper, Alberta
PURSUIT HIGHLIGHTS
Our team at Pursuit, which is the recently launched umbrella brand for our travel and
recreation business, had a busy year executing on our “Refresh, Build, Buy” strategy
and revenue management initiatives. We have successfully grown our portfolio of travel
experiences to include seven world-class attractions that welcome over 2.2 million visitors
annually, and 15 distinctive lodging properties with over 1,400 rooms. The creation of a
unifying brand is a logical next step to facilitate guest interaction with us across
all geographies.
Acquisitions remain an integral part of Pursuit’s growth strategy. During early 2016, we
acquired Maligne Lake Tours and CATC. With the support of our revenue management, sales
and marketing teams, the acquired assets performed exceptionally well and exceeded our
expectations in 2016. In late December, we acquired FlyOver Canada, Vancouver’s top-rated
fun attraction by TripAdvisor. We are excited about this acquisition as we see revenue
maximization opportunities at the existing location, as well as opportunities to expand the
concept into additional markets in future years.
Pursuit’s revenue increased 36.7 percent in 2016 to $153.4 million and adjusted segment
EBITDA grew $14.0 million, with a margin of 32.5 percent. This strength reflects contributions
from the acquired businesses and the benefits of our revenue maximization initiatives that
helped drive strong organic growth across our attractions and hospitality assets. Same-
store passenger counts at our attractions were up 10.3 percent and same-store RevPAR at
our hospitality assets increased by 11.3 percent.
I am also proud to report that we completed the major refresh project of our leading
attraction, the Banff Gondola. This project entailed adding significant upgrades to the
mountain top dining, retail and interpretive experiences. As a
result, we now have a modern, first-class facility that is nearly as
breathtaking as the panoramic views it showcases.
SAME-STORE PASSENGER
COUNTS AT OUR ATTRACTIONS
WERE UP 10.3 PERCENT AND
2016 was a year of significant progress and growth for Pursuit. Our
investments and initiatives are delivering strong returns, enriching
the guest experience and fueling growth in high-margin areas. We
expect our actions to continue to make an impact in 2017. Although
we will face some revenue headwinds from the continued downsizing
of the lower-margin package tours business and the Mount Royal
Hotel, which has been closed indefinitely due to a fire that occurred
in late December, we will also reap the full year benefits of FlyOver
Canada and our renovations at the Banff Gondola. We expect continued strength across the
rest of the Pursuit portfolio as we remain focused on revenue maximization.
SAME-STORE REVPAR AT
OUR HOSPITALITY ASSETS
INCREASED BY 11.3 PERCENT.
BUSINESS OUTLOOK
Looking ahead, we expect both business groups to deliver solid results with improved
profitability. Consolidated revenue during 2017 is expected to increase by approximately
5 percent, as we expect to more than overcome revenue headwinds totaling about $62
million from the combination of exchange rate variances, show rotation, package tours
downsizing and the Mount Royal Hotel closure. We expect consolidated adjusted segment
EBITDA to grow by 11 percent to 14 percent as compared to 2016. This outlook reflects the
benefits of cross-selling, new business wins and same-show growth at GES, as well as
additional contributions from our recently acquired assets and strong growth across our
attractions and hospitality assets at Pursuit.
As a result of the progress we have made against our strategic goals, we are in a much
stronger and more competitive position today than we were three years ago. And we are
well-positioned to drive continued growth and enhanced shareholder value in 2017
and beyond.
As we continue to increase value for our shareholders, benefits for our customers and
opportunities for our employees, I want to thank Viad’s Board of Directors and the entire
Viad team for their contributions. And I want to thank you, my fellow shareholders, for your
confidence in our strategy and investment in
our company.
Sincerely,
Steve Moster
President & Chief Executive Officer
As filed with the Securities and Exchange Commission on March 6, 2017
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2016
or
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)
Delaware
State or other jurisdiction of
incorporation or organization
1850 North Central Avenue, Suite 1900
Phoenix, Arizona
(Address of principal executive offices)
36-1169950
(I.R.S. Employer
Identification No.)
85004-4565
(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 No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes No
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 No
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 No
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.
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):
Large accelerated filer
Non-accelerated filer
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes No
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, 2016) was approximately $618 million.
Registrant had 20,327,636 shares of Common Stock ($1.50 par value) outstanding as of January 31, 2017.
Accelerated filer
Smaller reporting company
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 18, 2017, is
incorporated by reference into Part III of this Annual Report.
INDEX
Business ................................................................................................................................................
Risk Factors ..........................................................................................................................................
Unresolved Staff Comments .................................................................................................................
Properties ..............................................................................................................................................
Legal Proceedings ................................................................................................................................
Mine Safety Disclosures .......................................................................................................................
Executive Officers of the Registrant ....................................................................................................
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities...................................................................................................................................
Selected Financial Data ........................................................................................................................
Management’s Discussion and Analysis of Financial Condition and Results of Operations ...............
Quantitative and Qualitative Disclosures About Market Risk ..............................................................
Financial Statements and Supplementary Data ....................................................................................
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ..............
Controls and Procedures .......................................................................................................................
Other Information .................................................................................................................................
Directors, Executive Officers and Corporate Governance ...................................................................
Executive Compensation ......................................................................................................................
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters ..................................................................................................................................................
Certain Relationships and Related Transactions, and Director Independence .....................................
Principal Accounting Fees and Services ..............................................................................................
Page
1
15
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21
23
24
41
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43
Part I
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
Other.
Part II
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Part III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Part IV
Item 15.
Exhibits, Financial Statement Schedule ...............................................................................................
43
PART I
Item 1. BUSINESS
Viad Corp (“Viad” or the “Company”) 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
unforgettable experiences to its clients and guests. Viad operates through the following two main business groups:
GES, previously referred to as the Marketing & Events Group, is a world-class live event service provider to
some of the most visible and influential events and global brands; and
Pursuit, previously referred to as the Travel & Recreation Group, is a collection of iconic natural and cultural
destination travel experiences that enjoy perennial demand.
GES accounted for 88 percent of Viad’s 2016 consolidated revenue and 58 percent of Viad’s 2016 consolidated
segment operating income(1). Pursuit accounted for 12 percent of Viad’s 2016 consolidated revenue and 42 percent of Viad’s
2016 consolidated segment operating income(1).
2016 REVENUE
$1.2B
2016 SEGMENT OPERATING
INCOME(1) $85.9M
12%
88%
42%
58%
GES
Pursuit
(1) Segment operating income is defined by Viad as net income attributable to Viad before income (loss) from discontinued
operations, corporate activities and eliminations, interest expense and interest income, income taxes, restructuring
charges, impairment losses and recoveries, and the reduction for income attributable to non-controlling interest. Refer to
Note 21 – Segment Information of the Notes to Consolidated Financial Statements (Part II, Item 8 of this Annual Report
on Form 10-K) for a reconciliation of segment operating income to the most directly comparable GAAP measure.
GES is a global, full-service provider for live events that produces exhibitions, conferences, corporate events, and
consumer events. GES offers a comprehensive range of live event services, from the design and production of compelling,
immersive experiences that engage audiences and build brand awareness, to material handling, rigging, electrical, and other
on-site event services. In addition, GES offers clients a full suite of audio-visual services from creative and technology to
content and design, along with online tools powered by next generation technologies that help clients easily manage the
complexities of their events. GES’ National Servicenter® has been recognized with certification under the J.D. Power and
Associates Certified Call Center ProgramSM for the past eight years, and GES was named one of the “World’s 50 Largest
Agency Companies” for the seventh year in a row by Ad Age.
1
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
impact revenue” for a discussion of the risks related to GES’ client relationships, which is incorporated herein by reference.
GES is divided into two reportable segments based on geography: GES U.S. and GES International.
GES U.S. 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.
GES International holds leading positions in Canada, Europe, and the Middle East. GES International has full-
service operations at many of the most active and popular event 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.
Markets Served
GES U.S. and GES International both provide a full suite of services for event organizers and corporate brand
marketers across four live event markets: (i) Exhibitions; (ii) Conferences; (iii) Corporate Events; and (iv) Consumer Events
(collectively, “Live Events”).
2
LIVE EVENT
Exhibitions
PURPOSE
Primary purpose is to facilitate business-to-business
and business-to-consumer sales and marketing.
% GES 2016
REVENUE
Conferences
Primary purpose is to facilitate attendee education. An
expo or trade show may be held in conjunction to
further facilitate attendee education and to facilitate
business-to-business and business-to-consumer sales
and marketing.
Corporate Events
Primary purpose is to facilitate attendee education of
sponsoring company’s products or product ecosystem.
Consumer Events
Primary purpose is to entertain, educate, or create an
experience, typically around a specific genre.
65%
23%
8%
4%
3
Services Offered
GES offers a comprehensive range of services and innovative technology to event organizers and corporate brand
marketers including (i) Core Services; (ii) Event Technology; and (iii) Audio-Visual.
GES Revenue Mix
Core Services 91%
Event Technology 4%
Audio-Visual 5%
Core Services
GES provides official contracting services and products to event organizers and corporate brand
marketers for Live Events in both GES U.S. and GES International. Contracting services and products
are provided primarily to Exhibitions and to a lesser degree to Conferences, Corporate Events, and
Consumer Events. GES U.S. Core Services accounted for 61 percent of Viad’s 2016 and 2015
consolidated revenue and 64 percent of Viad’s 2014 consolidated revenue. GES International Core
Services accounted for 19 percent of Viad’s 2016 consolidated revenue and 23 percent for Viad’s 2015
and 2014 consolidated revenue.
GES U.S. and GES International generally provide the same level of services and products. The following is a general
list of exclusive and discretionary services and products provided to Live Event organizers and exhibitors:
Event Organizers:
Corporate Brand
Corporate Brand Marketers:
Exclusive Services:
Discretionary Services:
Marketers:
Electrical Distribution
Integrated Marketing and Pre/Post Event Communications
Event Planning and Production Material Handling
Look and Feel Design
Layout and Floor Plan Designs Cleaning
Plumbing
Furnishings and Carpet
Overhead Rigging
Show Traffic Analysis
Marketing and Strategy
Booth Rigging
Electrical Distribution
Cleaning
Plumbing
Overhead Rigging
Booth Rigging
Creative Design and Strategy
Event Surveys
Return on Investment Analysis
Online Management Tools
Attendee/Exhibit Booth Traffic Analysis
Staff Training
Logistics/Transportation
Storage/Refurbishment of Exhibits
Furnishings and Carpet
Installation and Dismantling Labor
Tradeshow program management
Exclusive Products:
Discretionary Products:
Event Organizers:
Signage
Common Area Structures
Corporate Brand Marketers:
Custom Exhibit Design/Construction
Portable/Modular Exhibits and Design
Graphics and Signage
4
Under various agreements with event organizers of Live Events, GES serves as the official services contractor and
provides the services and products listed above. 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. Regardless if 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.
GES U.S. and GES International offer a comprehensive range of event technology services including
event accommodation solutions, registration and data analytics, and event management tools.
Event accommodation solutions. GES U.S. provides end-to-end event accommodation
services in North America. GES positioned itself as the leading provider of event
accommodations with its 2014 acquisitions of onPeak LLC and Travel Planners, Inc.
(collectively, “onPeak”). 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 corporate brand marketers,
managing attendee and corporate brand marketer 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 corporate brand marketers 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.
Registration and data analytics. GES International and GES U.S. provide event
registration and data analytic services. GES positioned itself as a leading provider of
registration services for Live Events in Europe with the 2014 acquisition of N200 Limited
and its affiliates (collectively, “N200”). GES provides both a software-as-a-service model
and fully managed options for registration and ticketing, lead management, and reporting
and analytics. Its multi-lingual and multi-currency technology enables a common platform
for global event organizers. During the fourth quarter of 2016, GES officially launched
registration and data analytic services to the U.S. market.
Event management tools. GES U.S. and GES International provide event management
tools for Live Events which include online ordering capabilities, sponsoring management
tools, content management systems, and live event tracking.
GES U.S. provides all three of the above event technology services which accounted for three percent
of Viad’s 2016 and 2015 consolidated revenue and one percent of Viad’s 2014 consolidated revenue.
GES International provides registration and data analytics and event management tools which
accounted for one percent of Viad’s 2016 and 2015 consolidated revenue and less than one percent of
Viad’s 2014 consolidated revenue.
GES offers a variety of audio-visual and digital services for Live Events and corporate brand
marketers in both GES U.S. and GES International. GES expanded its audio-visual services through
the acquisition of two leading audio-visual production businesses: ON Event Services, LLC (“ON
Services”) and Blitz Communications Group Limited and its affiliates (collectively, “Blitz”). The
assets and operations of ON Services were acquired in August 2016. ON Services’ in-house audio-
visual production services enhance GES’ ability to gain market share in the Corporate Event markets
in North America and enables GES to cross-sell its services and technology offerings. With the 2014
acquisition of Blitz, GES took a prominent position in the United Kingdom audio-visual market with
services in continental Europe. GES combines the science of innovative digital solutions with the
latest audio-visual 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. GES U.S. audio-visual services accounted for three percent of
Viad’s 2016 consolidated revenue, one percent of Viad’s 2015 consolidated revenue, and less than
one percent of Viad’s 2014 consolidated revenue. GES International audio-visual services accounted
for two percent of Viad’s 2016 and 2015 consolidated revenue and one percent of Viad’s 2014
consolidated revenue.
5
Event Technology
Audio-Visual
Seasonality and Show Rotation
GES U.S. and GES International 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. During 2016, GES U.S. reported its highest revenue during the second and third quarters. During 2015, GES U.S.
reported its highest revenue during the first and second quarters. GES International generally reports its highest revenue
during the second and fourth quarters. The show rotation revenue metric refers to the net change in revenue from 2015 to
2016 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.
GES Revenue
(in millions)
2016 Show Rotation Revenue
(in millions)
100
80
60
40
20
0
-20
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
2016
2015
400
300
200
100
0
Competition
GES U.S. and GES International generally compete 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, U.S. headquartered
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. GES holds a dominate
market position in Exhibitions and is pursuing a focused and disciplined growth strategy of expanding its market share in the
currently under-penetrated 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 from 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. Penetration into other live events to extend industry leadership and leverage capabilities.
6
With its 2016 acquisition of the assets and operations of ON Services and its 2014 acquisitions of Blitz, onPeak, and
N200, GES made significant progress toward creating the most comprehensive suite of services for the Live Events industry.
GES extended its audio-visual services to North America with the acquisition of ON Services and 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 2016, these acquisitions
enhanced overall competitiveness, 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 GES
Acquisition of ON Services. On August 11, 2016, the Company acquired the assets and operations of ON
Services, a leading provider of audio-visual production services for Live Events in the United States. ON
Services specializes in corporate events and exhibitions, supporting more than 1,000 Live Events annually with
production services, including audio, video, lighting, mapping, and scenic design. In addition, the business
produces high-end entertainment events and is the preferred in-house provider of audio-visual services for
venues, including hotels, arenas, and conference centers.
Cross-selling opportunities. GES is 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 analytic services entrance in U.S. and Asia markets. GES officially launched
registration and data analytic services in the U.S. market during the fourth quarter of 2016. The planned entrance
of registration and data services in the Asia market is expected in early 2017 with an office opening in Hong
Kong.
7
The Travel & Recreation Group introduced the “Pursuit” brand in 2017 to align all of its businesses around a common
vision, mission, and set of core values. Pursuit is a collection of iconic natural and cultural destination travel experiences in
North America that showcase the best of Banff, Jasper, Waterton Lakes, Glacier, Denali, and Kenai Fjords National Parks,
and Vancouver, Canada. Through Pursuit’s collection of unique hotels and lodges, world-class recreational attractions, and
ground transportation services, it connects guests to iconic places through unforgettable, inspiring experiences. Pursuit draws
its guests from major markets, including Canada, the United States, China, the United Kingdom, Australia/New Zealand,
Asia Pacific, and Europe. Pursuit 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. Pursuit is
composed of the following collections:
Brewster Travel Canada
Brewster Travel Canada is a leading travel and tourism provider in the Canadian
Rockies in Alberta, Canada with two lodging properties in Banff National Park, one
lodging property in Jasper National Park, five world-class recreational attractions, food
and beverage services, retail operations, sightseeing and transportation services.
Alaska Collection
Glacier Park, Inc.
The Alaska Collection is a leading travel and tourism provider in Alaska with two
lodging properties and a sightseeing excursion in Denali National Park and Preserve, a
lodge in Talkeetna, Alaska’s top rated wildlife and glacier cruise, and two lodging
properties located near Kenai Fjords National Park. The Alaska Collection also
provides food and beverage services and retail operations with respect to those
properties.
Glacier Park, Inc. is an operator of seven lodging properties, twelve retail shops, and
eleven dining outlets in and around Glacier National Park in Montana, one of the most
visited national parks in the United States, and Waterton Lakes National Park in
Alberta, Canada, with a leading share of rooms in that market. Glacier Park, Inc. is an
80 percent owned subsidiary of Viad.
FlyOver Canada
FlyOver Canada is a one-of-a-kind virtual flight ride experience located in Vancouver,
Canada that combines motion seating, spectacular media, and visual effects including
wind, scents, and mist to give the unforgettable experience of flying across Canada.
8
Pursuit is composed of four lines of business: (i) Hospitality (including food and beverage services and retail
operations); (ii) Attractions (including food and beverage services and retail operations); (iii) Transportation; and (iv) Travel
Planning. 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 and Vancouver in Canada, and Glacier, Denali, and
Kenai Fjords National Parks in the United States.
Hospitality (# of rooms)
Attractions
Transportation (6)
Travel Planning (6)
Brewster
Travel
Canada
Elk + Avenue Hotel (164) (1)
Glacier View Inn (32)
Mount Royal Hotel (135) (2)
Denali Backcountry Lodge (42)
Denali Cabins (46)
Kenai Fjords Wilderness Lodge (8)(4)
Seward Windsong Lodge (180)(4)
Talkeetna Alaska Lodge (212)(4)
Apgar Village Lodge (48)
Glacier Park Lodge (162)
Grouse Mountain Lodge (144)
Motel Lake McDonald (27)
Prince of Wales Hotel (86)
St. Mary Lodge (117)
West Glacier Motel & Cabins (32)
Alaska
Collection
Glacier
Park, Inc.
FlyOver
Canada
Banff Gondola
Banff Lake Cruise
Columbia Icefield
Glacier Adventure
Glacier Skywalk
Maligne Lake Tours(3)
Airporter Services
Charter Motorcoach
Services
Sightseeing Tours
Corporate Event
Management Services
Explore Rockies
Activity Booking Centers
Kenai Fjords Tours(4) Denali Backcountry
Travel Planning Services
Adventure
FlyOver Canada -
Vancouver(5)
(1)
(2)
(3)
(4)
(5)
The Elk + Avenue Hotel, formerly known as the Banff International Hotel, was renamed in 2016.
The Mount Royal Hotel was damaged by a fire on December 29, 2016 and will be closed for reconstruction during
2017.
In January 2016, the Company acquired the business of Maligne Tours Ltd. (“Maligne Lake Tours”), which offers
sightseeing boat tours on Maligne Lake in Jasper National Park.
In March 2016, the Company acquired CATC Alaska Tourism Corporation, formerly known as CIRI Alaska Tourism
Corporation (“CATC”), the operator of an Alaskan tourism business that includes the Kenai Fjords Tours marine
sightseeing attraction and three lodges.
In December 2016, the Company acquired FlyOver Canada, a recreational attraction that provides a virtual flight ride
experience with a combination of motion seating, a four-story movie screen, and media and visual effects.
(6) During 2016, the Company began to phase out third party tour and travel products within Canada and exited summer
season charter transportation services.
9
Pursuit provides lodging accommodations, food and beverage services, and retail operations through its
collection of unique hotels and lodges varying from hikers’ cabins to grand and historic lodges.
Mount Royal Hotel and Elk + Avenue 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 in Jasper
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.
Hospitality
Kenai Fjords Wilderness Lodge is located on a private island in Resurrection Bay adjacent to
the Kenai Fjords National Park.
Seward Windsong Lodge is located near Kenai Fjords National Park in Seward, Alaska.
Talkeetna Alaskan Lodge is located in Talkeetna, Alaska on the south side of Denali National
Park.
Apgar Village Lodge and Motel Lake McDonald are located inside Glacier National Park.
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.
St. Mary Lodge is located outside the east entrance of Glacier National Park in St. Mary,
Montana.
West Glacier Motel & Cabins are located outside the west entrance of Glacier National Park.
Attractions
Pursuit owns and operates the following attractions in the Canadian Rocky Mountains, Vancouver, and in
Alaska:
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. The Company completed the
upper terminal redevelopment project in 2016, which resulted in 25 percent more square footage,
an improved layout, optimized food and beverage and retail space, interactive exhibits, and a
multisensory theatre. The Banff Gondola refresh project has been honored with two Top Project
Awards from Alberta Construction Magazine. The Banff Gondola’s winning categories include
the People’s Choice Award and the Commercial Award (Under $50 Million). The Banff Gondola
is rated by Trip Advisor as the #1 “Things to do in Banff” and has been awarded with the Trip
Advisor Certificate of Excellence.
Banff Lake Cruise provides guests a unique sightseeing experience through interpretive boat
cruises on Lake Minnewanka in the 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 expeditions. The Banff Lake Cruise has been awarded with the Trip Advisor Certificate of
Excellence.
10
Columbia Icefield Glacier Adventure is a tour of the Athabasca Glacier on the Columbia
Icefield, and provides guests the experience to view one of the largest accumulations of ice and
snow south of the Arctic Circle. Guests ride in a giant “Ice Explorer,” a unique vehicle specially
designed for glacier travel. The Columbia Icefield Glacier Adventure has been awarded with the
Trip Advisor Certificate of Excellence.
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, 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, including the prestigious Governor General’s Medals in Architecture in 2016.
FlyOver Canada provides a virtual flight ride experience that showcases some of Canada’s most
awe-inspiring scenery from coast to coast. The state-of-the-art, multi-sensory experience
combines motion seating, spectacular media, and special effects including wind, scents, and mist,
to provide a true flying experience for guests. FlyOver Canada is ideally located in downtown
Vancouver, Canada. FlyOver Canada is rated by Trip Advisor as the #1 “Fun & Games in
Vancouver” and has been awarded with the Trip Advisor Certificate of Excellence.
Kenai Fjords Tours is the most popular Alaska wildlife and glacier day cruise offering guests
unforgettable sights of towering glaciers, humpback and grey whales, orcas, arctic birdlife, sea
lions, seals, and porpoises of Kenai Fjords National Park. Tours range from a few hours to full
days, with some tours including a full meal of wild Alaska salmon, prime rib and Alaskan King
Crab on Fox Island. Kenai Fjords Tours has been awarded with the Trip Advisor Certificate of
Excellence.
Maligne Lake Tours provides interpretive boat tours and related services at Maligne Lake, the
largest lake in Jasper National Park, Alberta, Canada. Maligne Lake Tours has seven tour boats, a
marina and day lodge that offers food and beverage and retail services, a historic chalet complex
and boat house that offers canoes, kayaks, and rowboats for rental. Maligne Lake Tours has been
awarded with the Trip Advisor Certificate of Excellence.
11
Transportation
Brewster Travel Canada’s transportation operations currently include sightseeing tours, airport shuttle
services, and charter motorcoach services. The sightseeing services include seasonal half- and full-
day tours from Calgary, Banff, Lake Louise, and Jasper, Canada and bring guests to the very best
parts of Banff and Jasper National Parks. The 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 the winter months. In 2016, Brewster Travel Canada exited
certain low-margin, capital-intensive charter businesses in the summer season to improve overall
profitability and return on invested capital. The Alaska Collection offers a unique sightseeing tour 92
miles deep into Denali National Park.
Brewster Travel Canada offers a full suite of corporate and event management services for meetings,
conferences, incentive travel, sports, and special events. Event-related service offerings include
staffing, off-site events, tours/activities, team building, accommodations, event management, theme
development, production, and audio-visual services. Brewster Travel Canada also owns and operates
eight Explore Rockies activity booking centers throughout Banff and Jasper National Parks and
Calgary, Alberta. In 2016, Brewster Travel Canada began phasing out third party package tour and
travel products to align with its goal of delivering premium experiences and improving its overall
profit margin. The Alaska Collection provides complete travel planning services throughout Alaska.
Travel Planning
Seasonality
Pursuit experiences peak activity during the summer months. During 2016, 90 percent of Pursuit’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.
Pursuit 2016 Revenue
(in millions)
120
100
80
60
40
20
0
Q1
Q2
Q3
Q4
Competition
Pursuit generally competes on the basis of location, uniqueness of facilities, service, quality, and price. Competition
exists both locally and regionally across all four lines of business. The hospitality business has a large number of competitors
and competes for leisure travelers (both individual and tour groups) across the United States and Canada. Pursuit has a
competitive advantage through its distinctive attractions and the iconic destinations of its assets.
12
Growth Strategy
Pursuit remains focused on delivering inspiring and unforgettable experiences in iconic locations while growing and
enhancing its unique portfolio of integrated tourism assets through its Refresh-Build-Buy growth initiatives.
Refresh. Refresh assets and processes 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.
Pursuit continued to make progress with its Refresh-Build-Buy growth initiatives by completing a major renovation of
the Banff Gondola and the Elk + Avenue Hotel during 2016. The Glacier Skywalk continues to win awards and receive
international recognition for its innovative design and environmentally sound architecture. Pursuit also complemented its
existing assets with the acquisition of Maligne Lake Tours, CATC, and FlyOver Canada in 2016. The Company continues to
search for opportunities to acquire or build/construct high return tourism assets in iconic natural and cultural 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 Pursuit
Renovation of the Banff Gondola. The Company completed the redevelopment project of the Banff Gondola in
2016. This renovation featured approximately 25 percent more square footage, including an 8,000 square foot
rooftop viewing deck. The renovation also included enhanced retail and dining offerings and a state of the art
interpretive area including new experiential areas such as a high definition theater.
Acquisition of Maligne Lake Tours. On January 4, 2016, the Company acquired the business of Maligne Lake
Tours, which offers sightseeing boat tours on Maligne Lake, a picturesque glacial lake in Jasper National Park.
The Maligne Lake Tours acquisition strengthens the Company’s presence in the Jasper National Park area and
adds another world-class attraction to its portfolio of services. The operations of Maligne Lake Tours are
integrated with Brewster Travel Canada.
Acquisition of CATC. On March 11, 2016, the Company acquired CATC, the operator of an Alaskan tourism
business that includes the number one wildlife and glacier cruise in Alaska and three unique lodges. The
operations of CATC are integrated with the Alaska Collection.
Acquisition of FlyOver Canada. On December 29, 2016, the Company acquired FlyOver Canada, a recreational
attraction located in downtown Vancouver, Canada that provides a virtual flight ride experience with a
combination of motion seating, a four-story movie screen, and media and visual effects.
Financial information on Viad’s reportable segments and geographic areas is contained in Note 21 – 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®, FLYOVER®, eco-sense®, ONPEAK®,
Above Banff®, Alaska Denali Travel®, Alaska Denali Escapes®, Alaska Heritage Tours®, Kenai Fjords Tours & design®,
Kenai Fjords Wilderness Lodge®, Seward Windsong Lodge & design®, Talkeetna Alaskan Lodge®, Explore Rockies®, 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®, Above Banff®, Explore Rockies®, FLYOVER®, Soaring Over Canada®, Elk + Avenue Hotel®,
Brewster Epic Summer Pass®, and escape.connect.refresh.explore®. Viad also has trademark applications in process both in
and outside the United States relating to the Pursuit brand. 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.
13
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. GES 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).
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 20 – 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 the following number of employees as of December 31, 2016:
Number of
Employees
Regular Full-Time
Employees Covered by
Collective Bargaining
Agreements
GES ...........................................................................................................................
Pursuit .......................................................................................................................
Viad Corporate..........................................................................................................
Total ....................................................................................................................
2,967
414
55
3,436
951
59
—
1,010
Viad believes that relations with its employees are good and that collective-bargaining agreements expiring in 2017
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 five executive officers.
Financial Information about Restructuring Charges
Refer to Note 18 – 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.
14
Financial Information about Segments
Refer to Note 21 – 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 21 – 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 on 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 www.viad.com/investors/investor-center/default.aspx 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.
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 GES U.S. and GES International depend 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 GES are adversely affected.
Revenue from Pursuit 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.
15
Viad’s results of operations are impacted by changes in foreign currency exchange rates. Viad conducts foreign
operations primarily in Canada, the United Kingdom, the Netherlands, 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 2016, GES derived approximately 24 percent of its revenue and 19 percent of its segment operating income
from GES International. During 2016, Pursuit derived approximately 59 percent of its revenue and 74 percent of its 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 of Pursuit.
Show rotation impacts overall profitability and makes comparisons between periods difficult. The business activities
of GES 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 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 6.1 percent of Viad’s consolidated revenue in
2016, GES U.S. and GES International 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 GES U.S. and GES International.
In addition, revenue of GES may be significantly impacted if certain exhibition facilities choose to in-source electrical,
plumbing, or other services. When GES 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 GES has those relationships choose to in-source those services, such
a decision could have a material adverse effect on Viad’s results of operations.
16
Viad’s key businesses are relationship driven. The business activities of GES U.S. and GES International 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 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 GES U.S. and GES
International varies significantly depending on the frequency and timing of shows, as some shows are not held each year and
some may shift between quarters. Pursuit experiences peak activity during the summer months. During 2016, 90 percent of
Pursuit’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.
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. GES U.S. and GES International 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 2016 and 2015 totaled $25.8 million and $22.0 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 17 – 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.
17
The new presidential administration may make substantial changes to fiscal and tax policies that may adversely
affect Viad’s business. The new presidential administration has called for substantial change to fiscal and tax policies, which
may include comprehensive tax reform. The Company cannot predict the impact, if any, of these changes to its business.
However, it is possible that these changes could adversely affect its business. It is likely that some policies adopted by the
new presidential administration will benefit the Company and others will negatively affect the Company. Until Viad knows
what changes are enacted, the Company will not know whether in total it benefits from, or is negatively affected by, the
changes.
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 the 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.
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 GES’ 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 businesses of Pursuit, which are heavily dependent
on the ability and willingness of its guests to travel. The guests serviced by Pursuit 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.
18
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 GES, Pursuit, and Viad Corporate and Shared Services as follows:
GES U.S.
GES U.S. operates 20 offices and 33 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 or licensed.
GES International
GES International operates 11 offices and 20 multi-use facilities, with three offices and eight multi-use facilities in
Canada, four offices and five 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.
Pursuit
Pursuit operates eight offices, 25 retail stores, one bus terminal, six garages, seven attractions (Banff Gondola, Banff
Lake Cruise, Columbia Icefield Glacier Adventure, Glacier Skywalk, Maligne Lake Tours, Kenai Fjords Tours, and FlyOver
Canada), and 15 hotels/lodges (including ancillary food and beverage services, retail, and recreational facilities). All of the
facilities are in the United States or Canada. Properties owned include two offices, 23 retail stores, the bus terminal, four
garages, all of the attractions, and all of the hotels/lodges. Properties leased include six offices, two retail stores, and two
garages. Properties situated on land subject to multiple long-term ground leases with the Canadian government include four
hotels/lodges, an office, all of the owned garages, Banff Gondola, Banff Lake Cruise, Columbia Icefield Glacier Adventure,
Glacier Skywalk, Maligne Lake Tours, and FlyOver Canada.
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. For additional information related to the Company’s 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).
Item 3. LEGAL PROCEEDINGS
Refer to Note 20 – 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.
19
Other. EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of Viad as of March 6, 2017 were as follows:
Name
Steven W. Moster
Age Business Experience During the Past Five Years and Other Information
47
President and Chief Executive Officer of Viad since 2014; President of GES since 2011;
President of Global Experience Specialists, Inc., 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, held various positions within
Global Experience Specialists, Inc., including: Executive Vice President-Chief Sales &
Marketing Officer from 2008 to 2010; Executive Vice President-Products and Services from
2006 to 2008; and Vice President-Products & Services Business 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
52
David W. Barry
54
Deborah J. DePaoli
52
Leslie S. Striedel
54
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 Pursuit 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 Resorts Holdings,
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 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 18, 2017.
20
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 ........................................................................... $
29.84 $
32.29 $
37.85 $
47.40 $
25.90 $
27.96 $
30.21 $
34.40 $
28.82 $
28.53 $
29.75 $
32.89 $
24.73
26.21
25.01
28.22
2016
2015
High
Low
High
Low
Holders
As of January 31, 2017, there were 5,981 shareholders of record of Viad’s common stock, including 376 shareholders
that had not converted their shares following a reverse stock split effective on July 1, 2004.
Dividends
For the year ended December 31, 2016, Viad’s Board of Directors declared the following dividends:
Dividend Per Share
Declaration Date
December 1, 2016 ................ $
August 24, 2016 ................... $
May 19, 2016 ....................... $
February 24, 2016 ................ $
Record Date
December 16, 2016
September 9, 2016
June 3, 2016
0.10
0.10
0.10
0.10 March 11, 2016
Payable Date
January 3, 2017
October 3, 2016
July 1, 2016
April 1, 2016
For the year ended December 31, 2015, Viad’s Board of Directors declared the following dividends:
Dividend Per Share
Declaration Date
December 3, 2015 ................ $
August 26, 2015 ................... $
May 21, 2015 ....................... $
February 25, 2015 ................ $
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
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 2016 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.
Total Number of
Shares Purchased
Average Price Paid
Per Share
Total Number of Shares
Purchased as Part of Publicly
Announced Plans or
Programs
Period
October 1, 2016 - October 31, 2016
November 1, 2016 - November 30,
2016 ................................................
December 1, 2016 - December 31,
2016 ................................................
Total ................................................
— $
—
1,000 $
42.25
— $
1,000 $
—
42.25
21
Maximum Number of Shares
That May Yet Be Purchased
Under the Plans or Programs
440,540
—
—
—
—
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, 2016.
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 Amendment allow
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 restrict Viad from making any further stock dividends, distributions, or repurchases above
such an amount unless the Company’s 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. Effective December 28, 2016, Brewster Inc., part of Pursuit, entered into a credit
agreement (the “Brewster Credit Agreement”) with a $38 million revolving credit facility (the “Brewster Revolving Credit
Facility”). Loans under the Brewster Credit Agreement were used in connection with the Company’s acquisition of FlyOver
Canada. Additional loan proceeds will be used for potential future acquisitions in Canada and other general corporate
purposes of Brewster Inc. and has a maturity date of December 28, 2017. For additional information on the Credit
Agreement, the Credit Agreement Amendment, and the Brewster Credit Agreement 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).
Performance Graph
The following graph compares the change from December 31, 2011 to December 31, 2016 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 December 31, 2011.
$350
$300
$250
$200
$150
$100
$50
$-
2011
2012
2013
2014
2015
2016
Viad Corp
Russell 2000
S&P 600 Comm. Services & Supplies
S&P 500
S&P SmallCap 600
S&P 600 Media Index
2011
2012
2013
2014
2015
2016
Year Ended December 31,
Viad Corp ............................................................... $ 100.00 $ 157.48 $ 179.79 $ 186.50 $ 200.34 $ 316.60
S&P 500 .................................................................. $ 100.00 $ 115.99 $ 153.55 $ 174.53 $ 176.92 $ 198.06
Russell 2000 ........................................................... $ 100.00 $ 116.37 $ 161.54 $ 169.48 $ 162.00 $ 196.48
S&P SmallCap 600 ................................................. $ 100.00 $ 116.30 $ 164.34 $ 173.78 $ 170.28 $ 215.34
S&P 600 Comm. Services & Supplies .................... $ 100.00 $ 130.77 $ 187.54 $ 186.25 $ 181.77 $ 232.02
S&P 600 Media Index ............................................ $ 100.00 $ 113.71 $ 184.95 $ 216.96 $ 228.59 $ 205.09
22
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 ............................................................
Pursuit services ..............................................................................
Total revenue ....................................................................................... $
Income from continuing operations (3) .................................................. $
Income from continuing operations attributable to Viad common
stockholders ...................................................................................... $
Basic and diluted income from continuing operations attributable to
Viad common stockholders per share (3) ............................................ $
Dividends declared per common share ................................................. $
Other Data
2016
Year Ended December 31,
2014
2013
2015
2012
881,137 $
170,469
153,364
1,204,970 $
799,752 $
177,126
112,170
1,089,048 $
772,770 $
171,698
120,519
1,064,987 $
685,350 $
159,554
108,443
953,347 $
726,429
175,611
104,604
1,006,644
43,479 $
27,442
42,953 $
27,000
2.12 $
0.40 $
1.34
0.40
$
$
$
$
$
41,178
$
19,320
40,790
$
19,437
2.02
1.90
$
$
0.96
2.90
73,954
$
59,157
Adjusted EBITDA (4) ..................................................................... $
112,428 $
76,801
(in thousands)
Summary Balance Sheet Data
2016
2015
December 31,
2014
2013
Cash and cash equivalents ............................................................. $
Total assets (5) ................................................................................ $
Total debt and capital lease obligations (5) ..................................... $
Total stockholders’ equity ............................................................. $
Noncontrolling interest .................................................................. $
20,900 $
869,816 $
249,211 $
370,638 $
13,283 $
56,531
690,723
127,403
335,338
12,757
$
$
$
$
$
56,990
712,979
139,056
347,702
12,315
$
$
$
$
$
45,821
561,424
11,160
356,543
9,102
$
$
$
$
$
$
$
$
$
$
3,553
3,348
0.17
0.28
53,971
2012
114,171
649,890
1,539
397,032
8,971
(1)
(2)
(3)
(4)
(5)
The 2013 and 2012 amounts have been adjusted for discontinued operations related to the expiration of Glacier Park,
Inc.’s concession contract with the Park Service on December 31, 2013.
The 2016 amounts include an aggregate $55.7 million in revenue from the acquisitions of ON Services, CATC,
Maligne Lake Tours, and FlyOver Canada. The 2014 amounts include an aggregate $21.2 million in revenue from the
acquisitions of the West Glacier Properties, Blitz, onPeak, and N200. The 2012 amounts include $5.2 million in
revenue from the acquisition of the Elk + Avenue Hotel (formerly known as the Banff International Hotel). 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).
Income from continuing operations includes the following items:
Restructuring charges, pre-tax, of $5.2 million, $3.0 million, $1.6 million, $3.8 million, and $4.9 million in 2016,
2015, 2014, 2013, and 2012, respectively. Refer to Note 18 – Restructuring Charges of the Notes to Consolidated
Financial Statements (Part II, Item 8 of this Annual Report on Form 10-K).
Impairment charges, pre-tax, of $0.2 million, $0.1 million, $0.9 million, and $1.0 million in 2016, 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 net operating loss 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 16 – Income Taxes of the Notes to Consolidated Financial Statements
(Part II, Item 8 of this Annual Report on Form 10-K).
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.”
Reflects the impact of the adoption of ASU 2015-03 in 2016 related to the reclassification of unamortized debt issuance
costs from other long-term assets to a reduction in long-term debt. Refer to Note 1 – Summary of Significant
Accounting Polices, Note 7 – Other Investments and Assets, and 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).
23
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’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 unforgettable experiences to its
clients and guests. Viad operates through three reportable business segments: GES U.S., GES International, (collectively,
“GES”), and Pursuit.
GES is a global, full-service provider for live events that produces exhibitions, conferences, corporate events, and
consumer events. GES offers a comprehensive range of live event services and a full suite of audio-visual services from
creative and technology to content and design along with online tools powered by next generation technologies that help
them easily manage the complexities of their events.
Pursuit is a collection of iconic natural and cultural destination travel experiences that enjoy perennial demand. Pursuit
offers guests distinctive and world renowned experiences through its collection of unique hotels, lodges, recreational
attractions, and transportation services. Pursuit remains focused on delivering inspiring and unforgettable experiences in
iconic locations while growing and enhancing its 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 non-GAAP financial measures of Adjusted EBITDA, Segment operating
income, Adjusted Segment EBITDA, organic revenue, and organic segment operating income (collectively, the “Non-GAAP
Measures”). The presentation of the Non-GAAP Measures is supplemental to, but not as a substitute for, other measures of
financial performance reported in accordance with GAAP. As not all companies use identical calculations, the Non-GAAP
Measures may not be comparable to similarly titled measures used by other companies. Management believes that the
presentation of 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.
“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.
“Segment operating income” is defined by Viad as net income attributable to Viad before income (loss) from
discontinued operations, 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.
Segment operating income is utilized by management to measure the profit and performance of Viad’s operating
segments to facilitate period-to-period comparisons.
“Adjusted Segment EBITDA” is defined by Viad as segment operating income (as defined above) before non-
cash depreciation and amortization and acquisition integration costs, if any. 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 2017 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.
24
“Organic revenue” and “organic segment operating income” are defined by Viad as revenue and segment
operating income (as defined above), 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 and to facilitate period-to-period comparisons and analysis of Viad’s
operating performance. 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.
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 as an important measure of financial performance because it provides 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 ............................................................................ $
2016
Year Ended December 31,
2015
2014
42,269 $
42,743
5,898
21,250
218
684
(634)
112,428 $
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
Adjusted EBITDA increased $35.6 million in 2016 primarily due to higher segment operating income at GES and
Pursuit. Adjusted EBITDA increased $2.8 million in 2015 primarily due to lower corporate costs, offset in part by higher
restructuring charges. 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 and segment operating income as forward-looking Non-
GAAP Measures within the “Results of Operations” section of this MD&A. The Company does not provide reconciliations
of these forward-looking Non-GAAP Measures to the most directly comparable GAAP financial measures 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 reconciliations of these forward-looking Non-GAAP
Measures to the most directly comparable GAAP financial measures is available to the Company without unreasonable
efforts. Consequently, any attempt to disclose such reconciliations would imply a degree of precision that could be confusing
or misleading to investors. It is probable that these forward-looking Non-GAAP Measures may be materially different from
the corresponding GAAP Measures.
25
Results of Operations
Financial Highlights
Year Ended December 31,
2016
2015
(in thousands, except per share data)
Revenue ..................................................... $ 1,204,970 $ 1,089,048 $ 1,064,987
52,354
Net income attributable to Viad ................. $
Segment operating income (1) ..................... $
59,866
Income (loss) from discontinued
operations attributable to Viad common
stockholders ............................................... $
Diluted income per common share from
continuing operations attributable to Viad
common stockholders ................................ $
42,269 $
85,928 $
26,606 $
54,584 $
(684) $
(394) $
1.34 $
2.12 $
11,564
2.02
2014
Percentage
Change
2016 vs. 2015
10.6 %
58.9 %
57.4 %
Percentage
Change
2015 vs. 2014
2.3%
(49.2)%
(8.8)%
(73.6 )%
**
58.2 %
(33.7)%
** Change is greater than +/- 100 percent
(1)
Refer to Note 21 – Segment Information of the Notes to Consolidated Financial Statements (Part II, Item 8 of this
Annual Report on Form 10-K) for a reconciliation of segment operating income to the most directly comparable GAAP
measure.
2016 compared with 2015
Total revenue increased $115.9 million or 10.6 percent, mainly due to the incremental revenue from
acquisitions completed during 2016, primarily CATC, ON Services, and Maligne Lake Tours, of $55.7 million,
positive show rotation of approximately $52 million, and continued underlying growth in both GES and Pursuit,
offset in part by an unfavorable foreign exchange impact of $24.0 million.
Net income attributable to Viad increased $15.7 million or 58.9 percent, primarily due to increased segment
operating income at GES and Pursuit, offset in part by higher income tax expense.
Total segment operating income increased $31.3 million or 57.4 percent, primarily due to high flow-through on
the increase in revenue.
2015 compared with 2014
Total revenue increased $24.1 million or 2.3 percent, primarily due to the 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 8.0 percent, and new business wins in GES as well as revenue growth in attractions in Pursuit,
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.
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, Inc.’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.
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, Inc.’s concession contract with the Park Service.
26
Foreign Exchange Rate Variances
Viad conducts its foreign operations primarily in Canada, the United Kingdom, the Netherlands, Germany, and to a
lesser extent, in certain other countries.
The following table summarizes 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, 2016 and 2015,
excluding the effect of acquisitions completed during 2016:
2016 compared with 2015
Revenue
Weighted-Average
Exchange Rates
FX Impact
2016
2015
(in thousands)
Segment Operating Results
Weighted-Average
Exchange Rates
2015
2016
FX Impact
(in thousands)
GES:
Canada (CAD) .................................................. $
United Kingdom (GBP) .................................... $
Europe (EUR) ................................................... $
0.76 $
1.35 $
1.11 $
0.78 $
1.53
1.10
(1,852) $
(20,946) $
150 $
(22,648)
0.78 $
1.24 $
1.12 $
0.80 $
1.53
1.09
Pursuit:
Canada (CAD) .................................................. $
0.77 $
0.78
$
(1,307) $
(23,955)
0.78 $
0.80
$
(77)
(632)
36
(673)
91
(582)
2015 compared with 2014
The following table summarizes the FX Impact on revenue and segment operating results from Viad’s significant
international operations for the years ended December 31, 2015 and 2014, excluding the effect of acquisitions completed
during 2014:
Revenue
Weighted-Average
Exchange Rates
FX Impact
2015
2014
(in thousands)
Segment Operating Results
Weighted-Average
Exchange Rates
2014
2015
FX Impact
(in thousands)
GES:
Canada (CAD) .................................................. $
United Kingdom (GBP).................................... $
Europe (EUR) ................................................... $
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)
Pursuit:
Canada (CAD) .................................................. $
0.78 $
0.92
$
(13,705) $
(39,705)
0.78 $
0.93
$
(4,638)
(5,682)
Viad’s 2016 revenue and segment operating results were primarily impacted by the weakening of the British pound
relative to the U.S. dollar. Viad’s 2015 revenue and segment operating results were primarily impacted by the weakening of
the British pound and the Canadian dollar relative to the U.S. dollar. Future changes in the exchange rates may impact overall
expected profitability and historical period-to-period comparisons when revenue and segment operating results are translated
into U.S. dollars.
27
Analysis of Revenue and Operating Results by Reportable Segment
GES
2016 compared with 2015
The following table provides a comparison of GES’ reported revenue and segment operating results to organic revenue
and organic segment operating results for the years ended December 31, 2016 and 2015 in order to better understand the
underlying performance of the segment without the effects of acquisitions or FX Impact.
Year Ended December 31, 2016
Year Ended December 31, 2015
Change
As Reported Acquisitions(1)
FX
Impact
Organic(2)
(in thousands)
Revenue:
GES:
As
As
Reported Acquisitions Organic(2)
Reported Organic(2)
U.S. ................... $ 826,408 $
International ...... 248,503
Intersegment
eliminations ......
(20,172 )
Total GES .............. $ 1,054,739 $
Segment operating
income (loss)(2)(3):
GES:
U.S. ................... $
International ......
Total GES .............. $
40,524 $
9,699
50,223 $
21,306 $ — $ 805,102 $720,882 $
271,151 272,634
— (22,648)
— $720,882 14.6%
(8.9)%
— 272,634
11.7%
(0.5)%
—
(20,172) (16,638)
21,306 $ (22,648) $1,056,081 $976,878 $
—
— (16,638 ) (21.2)%
8.0%
— $976,878
(21.2)%
8.1%
(804 ) $ — $
(673)
(673) $
—
(804 ) $
41,328 $ 14,563 $
10,372 12,211
51,700 $ 26,774 $
— $ 14,563
— 12,211 (20.6)%
— $ 26,774 87.6%
**
**
(15.1)%
93.1%
Acquisition for GES U.S. includes ON Services (acquired August 2016).
** Change is greater than +/- 100 percent
(1)
(2) Organic revenue and organic segment 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 revenue and organic segment operating results, see the “Non-
GAAP Measures” section of this MD&A.
Refer to Note 21 – Segment Information of the Notes to Consolidated Financial Statements (Part II, Item 8 of this
Annual Report on Form 10-K) for a reconciliation of segment operating income to the most directly comparable GAAP
measure.
(3)
GES U.S.
GES U.S. revenue increased $105.5 million or 14.6 percent, primarily due to positive show rotation of approximately
$59 million, base same-show revenue growth of 4.1 percent, the incremental revenue from the acquisition of ON Services of
$21.3 million, new business wins, and increased sales to corporate clients. Base same-show revenue represented 39.1 percent
of GES U.S. 2016 organic revenue. Organic revenue increased $84.2 million or 11.7 percent.
GES U.S. operating income increased $26.0 million, primarily due to higher revenue and the strong operating
leverage that exists within the GES business. ON Services generated a segment operating loss of $0.8 million during Viad’s
partial year of ownership, which included depreciation and amortization expense of $4.0 million. Organic operating income
increased $26.8 million.
GES International
GES International revenue decreased $24.1 million or 8.9 percent, primarily due to an unfavorable FX Impact of
$22.6 million and negative show rotation of approximately $7 million, offset in part by new business wins. Organic revenue
decreased $1.5 million or 0.5 percent.
GES International operating income decreased $2.5 million or 20.6 percent, primarily reflecting lower revenue and
investments in personnel and assets to support continued growth of the business. Organic operating income decreased $1.8
million or 15.1 percent.
28
2017 Outlook
Although GES 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 2017 full year, management expects GES’ revenue to increase at a mid-single digit rate versus 2016. The
August 2016 acquisition of ON Services is expected to provide incremental revenue of $45 million to $48 million and
incremental Adjusted Segment EBITDA of $11 million to $13 million. GES show rotation is expected to have a negative
impact on revenue of approximately $20 million compared to 2016. GES U.S. base same-show revenue is expected to
increase at a mid-single digit rate. Management anticipates an unfavorable FX Impact on GES’ 2017 full year revenue and
segment operating income of approximately $20 million and $1 million, respectively. The expected FX Impact reflects the
expectation that the U.S. dollar to the British pound exchange rate will be $1.23 and the U.S. dollar to the Canadian dollar
exchange rate will be $0.74 during 2017.
Management is executing a strategic growth plan to position GES as the preferred global, full-service provider for Live
Events, with further reach to corporate events, consumer events, conferences and exhibitions. In support of this strategy, the
Company acquired two leading audio-visual production businesses and three leading event technology businesses since 2014
that complement, enhance, and expand the current business and offer higher-margin growth opportunities. Management
continues to pursue additional opportunities to acquire businesses with proven products and services to create the most
comprehensive suite of services for the Live Events industry. During 2017, management intends to make selective
investments in additional resources to capitalize on continued growth opportunities in under-penetrated categories of Live
Events, such as corporate events and consumer events, and in cross-selling new services.
Additionally, management remains focused on improving the profitability of GES 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.
2015 compared with 2014
The following table provides a comparison of GES’ reported revenue and segment operating results to organic revenue
and organic segment 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)
(in thousands)
Revenue:
GES:
Year Ended December 31, 2014
As
Change
As
Reported Acquisitions(1) Organic(2)
Reported Organic(2)
U.S. .................... $ 720,882 $
International ...... 272,634
Intersegment
eliminations ....... (16,638 )
Total GES ............... $ 976,878 $
Segment operating
income (loss)(2)(3):
GES:
U.S. .................... $ 14,563 $
International ...... 12,211
Total GES ............... $ 26,774 $
30,916 $ — $689,966 $710,835 $
34,066 (26,000) 264,568 249,649
6,123 $704,712
10,589 239,060
1.4%
9.2%
(2.1)%
10.7%
—
— (16,638) (16,016)
64,982 $ (26,000) $937,896 $944,468 $
— (16,016 )
16,712 $927,756
(3.9)%
3.4%
(3.9)%
1.1%
6,419 $ — $
8,144 $ 21,400 $
1,132 (1,044) 12,123 10,339
7,551 $ (1,044) $ 20,267 $ 31,739 $
(252) $ 21,652 (31.9)%
186 10,153 18.1%
(66) $ 31,805 (15.6)%
(62.4)%
19.4%
(36.3)%
(1)
(2)
(3)
Acquisitions for GES U.S. include onPeak (acquired October 2014). Acquisitions for GES International include Blitz
(acquired September 2014) and N200 (acquired November 2014).
Organic revenue and organic segment 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 revenue and organic segment operating results, see the “Non-
GAAP Measures” section of this MD&A.
Refer to Note 21 – Segment Information of the Notes to Consolidated Financial Statements (Part II, Item 8 of this
Annual Report on Form 10-K) for a reconciliation of segment operating income to the most directly comparable GAAP
measure.
29
GES U.S.
GES U.S. revenue increased $10.0 million or 1.4 percent, primarily due to the 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-show revenue represented
44.7 percent of GES U.S. 2015 organic revenue. Organic revenue decreased $14.7 million or 2.1 percent.
GES U.S. 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.
GES International
GES International revenue increased $23.0 million or 9.2 percent, primarily due to the 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.
GES International 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.
30
Pursuit
2016 compared with 2015
The following table provides a comparison of Pursuit’s reported revenue and segment operating results to organic
revenue and organic segment operating results for the years ended December 31, 2016 and 2015 in order to better understand
the underlying performance of the segment without the effects of acquisitions or FX Impact.
Year Ended December 31, 2016
Year Ended December 31, 2015
Change
(in thousands)
Revenue:
Pursuit:
As
FX
Reported Acquisitions(1)
Impact Organic(2)
As
As
Reported Acquisitions Organic(2)
Reported Organic(2)
Hospitality ............... $ 59,757 $
Attractions ............... 65,945
Transportation ......... 11,833
Travel Planning ....... 17,631
Intra-Segment
Eliminations &
Other ........................
(1,802 )
Total Pursuit .................. $ 153,364 $
Segment operating
income(2)(3):
Total Pursuit .................. $ 35,705 $
12,834 $ (328) $ 47,251 $ 41,605 $
(496) 46,398 42,405
20,043
(275) 12,108 13,999
—
(233) 16,324 15,863
1,540
— $ 41,605 43.6%
— 42,405 55.5%
— 13,999 (15.5)%
— 15,863 11.1%
13.6%
9.4%
(13.5)%
2.9%
—
(1,702)
34,417 $(1,307) $120,254 $112,170 $
(1,827)
25
(1,702 )
(5.9)%
—
— $112,170 36.7%
(7.3)%
7.2%
7,917 $
91 $ 27,697 $ 27,810 $
— $ 27,810 28.4%
(0.4)%
(1) Acquisitions include Maligne Lake Tours (acquired January 2016), CATC (acquired March 2016), and FlyOver
(2)
Canada (acquired December 2016).
Organic revenue and organic segment 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 revenue and organic segment operating results, see the “Non-
GAAP Measures” section of this MD&A.
(3) Refer to Note 21 – Segment Information of the Notes to Consolidated Financial Statements (Part II, Item 8 of this
Annual Report on Form 10-K) for a reconciliation of segment operating income to the most directly comparable GAAP
measure.
Pursuit revenue increased $41.2 million or 36.7 percent, primarily due to the incremental revenue of $34.4 million
from acquisitions completed during 2016, primarily CATC and Maligne Lake Tours, increases across all hospitality assets
and attractions, offset in part by the strategic downsizing of the transportation line of business and an unfavorable FX Impact
of $1.3 million. Organic revenue increased $8.1 million or 7.2 percent.
Pursuit operating income increased $7.9 million or 28.4 percent, primarily due to higher revenue, offset in part by
higher accruals for performance-based incentives, acquisition transaction-related costs, and investments to support continued
growth of the business. Organic operating income decreased $0.1 million or 0.4 percent.
2017 Outlook
For the 2017 full year, management expects Pursuit’s revenue to increase at a mid-single digit rate, primarily due to the
December 2016 acquisition of FlyOver Canada and the March 2016 acquisition of CATC, which combined are expected to
provide incremental revenue of $10 million to $12 million and incremental Adjusted Segment EBITDA of $2 million to $3.5
million, which includes an incremental first quarter seasonal operating loss of approximately $3 million from CATC.
FlyOver Canada is expected to contribute incremental revenue of $9 million to $10 million with Adjusted Segment EBITDA
of $5 million to $5.5 million. Management anticipates an unfavorable FX Impact on Pursuit’s 2017 full year revenue and
segment operating income of approximately $3 million and $1.5 million, respectively.
31
Additionally, management expects Pursuit’s revenue to be negatively impacted by approximately $13 million as the
Company completes the previously announced downsizing of Brewster Travel Canada’s package tours line of business. The
fire-related closure of the Mount Royal Hotel is expected to negatively impact revenue by approximately $6 million, which
assumes the hotel will remain closed for the duration of 2017 and the proceeds from the Company’s business interruption
insurance will be recorded when received. Management expects these factors will be offset by organic growth across the rest
of Pursuit’s lines of business including expected revenue growth of $7 million to $9 million from the newly renovated Banff
Gondola.
During 2016 and 2015, Pursuit derived approximately 59 percent and 73 percent, respectively, of revenue and 74
percent and 89 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, Pursuit is affected by consumer
discretionary spending on tourism activities.
2015 compared with 2014
The following table provides a comparison of Pursuit’s reported revenue and segment operating results to organic
revenue and organic segment 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)
(in thousands)
Revenue:
Pursuit:
Year Ended December 31, 2014
As
Change
As
Reported Acquisitions(1) Organic(2)
Reported Organic(2)
Hospitality ........... $ 41,605 $
Attractions ........... 42,405
Transportation ..... 13,999
Travel Planning ... 15,863
Intra-Segment
Eliminations &
Other ....................
(1,702 )
Total Pursuit ............. $ 112,170 $
Segment operating
income(2)(3):
Total Pursuit ............. $ 27,810 $
5,470 $ (1,997) $ 38,132 $ 42,689 $
— (7,444) 49,849 44,691
— (2,111) 16,110 15,954
— (2,453) 18,316 19,336
(2.5)%
4,637 $ 38,052
— 44,691
(5.1)%
— 15,954 (12.3)%
— 19,336 (18.0)%
0.2%
11.5%
1.0%
(5.3)%
—
(2,151)
5,470 $ (13,705) $120,405 $120,519 $
(2,002)
300
—
4,637 $115,882
(2,151 ) 20.9%
(6.9)%
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 July 2014).
Organic revenue and organic segment 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 revenue and organic segment operating results, see the “Non-
GAAP Measures” section of this MD&A.
(3) Refer to Note 21 – Segment Information of the Notes to Consolidated Financial Statements (Part II, Item 8 of this
Annual Report on Form 10-K) for a reconciliation of segment operating income to the most directly comparable GAAP
measure.
Pursuit 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.
Pursuit 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.
32
Performance Measures
Management uses the following key business metrics to evaluate Pursuit’s 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 Pursuit 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.
Average Daily Rate. ADR is calculated as total rooms revenue divided by the total number of room nights sold for
all comparable Pursuit 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 Pursuit 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 Pursuit’s 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 Pursuit 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.
2016 compared with 2015
The following table provides Pursuit’s same-store key performance indicators for the years ended December 31, 2016
and 2015. The same-store metrics below indicate the performance of all of Pursuit’s properties and attractions that were
owned by Viad and operating at full capacity, considering seasonal closures, for the entirety of both periods presented. For
Pursuit 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.
2016
Year Ended December 31,
2015
% Change
Same-Store Key Performance Indicators (1)
Hospitality:
Room nights available ........................................................................
RevPAR .............................................................................................. $
ADR ................................................................................................... $
Occupancy ..........................................................................................
228,290
108 $
153 $
71.1%
228,739
97
143
67.4 %
Attractions:
Passengers ..........................................................................................
Revenue per passenger ....................................................................... $
1,478,172
31 $
1,340,175
31
(0.2)%
11.3%
7.0%
3.7%
10.3%
0.0%
(1)
Same-Store Key Performance Indicators exclude the Maligne Lake Tours attraction (acquired in January 2016), the
CATC hospitality properties and attraction (acquired in March 2016), and the FlyOver Canada attraction (acquired in
December 2016), as they were not owned by Viad for the entirety of 2016. Same-store passengers and revenue per
passenger were affected by the partial closure of the Banff Gondola during 2016.
33
Hospitality. Room nights available decreased during 2016 primarily due to changes in the opening dates of certain
seasonal Glacier Park, Inc. properties as a result of management’s review of a variety of factors, including weather
conditions, opening dates of other properties in the area, and availability of seasonal employees. Additionally, the Mount
Royal Hotel in Banff, Canada suffered fire damage on December 29, 2016 and has been closed until further notice.
RevPAR increased during the year ended December 31, 2016 due to increases in both ADR and occupancy across all
geographies resulting from management’s focus on revenue management and strong park visitation in 2016 due in part to
favorable weather conditions in contrast to forest fires during the third quarter of 2015.
Attractions. The increase in the number of passengers for the year ended December 31, 2016 was primarily due to
revenue management initiatives combined with strong park visitation. During the year ended December 31, 2016, the number
of passengers increased across all attractions. Growth in passengers was especially strong at the Glacier Skywalk attraction as
a result of management’s decision to introduce a combination ticket that included both the Glacier Skywalk and the adjacent
Columbia Icefield Glacier Adventure. Additionally, despite the Banff Gondola being partially closed for renovations during
most of 2016, it showed strong demand with a 3.8 percent increase in the number of passengers during 2016 as compared to
2015. Excluding the Banff Gondola passengers, total attraction passengers would have increased 15.1 percent in 2016.
Revenue per passenger remained flat during 2016 primarily due to lower revenue from ancillary food and beverage and
retail services at the Banff Gondola due to its partial closure and the greater proportion of total passengers coming from the
lower-priced Glacier Skywalk.
2015 compared with 2014
The following table provides Pursuit’s same-store key performance indicators for the years ended December 31, 2015 and
2014. The same-store metrics below indicate the performance of all of Pursuit’s properties and attractions that were owned by
Viad and operating at full capacity, considering seasonal closures, for the entirety of both periods presented. For Pursuit
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)
Same-Store Key Performance Indicators exclude the West Glacier Properties (acquired in July 2014), as it was not
owned by Viad for 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 Collection and the Brewster Travel Canada properties,
offset in part by decreases at certain Glacier Park, Inc. 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 Collection and the Brewster
Travel Canada properties due to higher room rates charged. Occupancy decreased in 2015 primarily due to forest fires that
affected certain Glacier Park, Inc. properties and decreases at the Elk + Avenue 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.
34
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.
Corporate Activities
Year Ended December 31,
(in thousands)
Corporate activities ............. $
2016
2015
2014
Percentage Change
2016 vs. 2015
Percentage Change
2015 vs. 2014
10,322 $
9,720 $
14,348
6.2 %
(32.3)%
Corporate activities expense increased $0.6 million during 2016, as compared to 2015, primarily due to an increase in
performance-based compensation expense, offset in part by costs related to a shareholder nomination and settlement
agreement during 2015 and lower acquisition transaction-related costs in 2016. 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.
Interest Expense
Year Ended December 31,
(in thousands)
Interest expense .................. $
2016
2015
2014
Percentage Change
2016 vs. 2015
Percentage Change
2015 vs. 2014
5,898 $
4,535 $
2,015
30.1 %
**
** Change is greater than +/- 100 percent
Interest expense increased $1.4 million during 2016 as compared to 2015, primarily due to higher outstanding debt
balances resulting from acquisitions completed during 2016. 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.
Restructuring Charges
Year Ended December 31,
(in thousands)
Restructuring Charges ........ $
2016
2015
2014
Percentage Change
2016 vs. 2015
Percentage Change
2015 vs. 2014
5,183 $
2,956 $
1,637
75.3 %
80.6%
Restructuring charges during 2016 and 2015 were primarily related to the elimination of positions and facility
consolidations in GES, as well as the elimination of certain positions at Viad’s corporate office and in Pursuit. Restructuring
charges during 2014 primarily related to the elimination of certain positions in GES, net of restructuring recoveries primarily
related to updated estimates of facility contractual arrangements.
Income Taxes
The effective tax rates for the years ended December 31, 2016, 2015, and 2014 were 32.8 percent, 27.7 percent, and 0.2
percent, respectively. The increase in the 2016 effective tax rate was primarily due to a non-cash tax benefit of $1.6 million
recorded in 2015 related to deferred taxes associated with certain foreign intangible assets. The low effective tax rate in 2014
was primarily due to the release of the valuation allowance related to foreign tax credits and state net operating loss
carryforwards.
Discontinued Operations
Discontinued operations during 2016 and 2015 primarily related to liability reserve adjustments and legal fees related
to previously sold operations.
35
On December 31, 2013, Glacier Park, Inc.’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
2014. 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, Inc., 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.
Liquidity and Capital Resources
Cash and cash equivalents were $20.9 million as of December 31, 2016, as compared to $56.5 million as of
December 31, 2015. During the year ended December 31, 2016, the Company generated net cash flow from operating
activities of $100.3 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.
As of December 31, 2016, the Company had approximately $19.9 million of its cash and cash equivalents held outside
of the United States, consisting of $6.2 million in the Netherlands, $6.0 million in Canada, $4.1 million in the United
Kingdom, $1.8 million in Germany, and $1.8 million in the United Arab Emirates. There are certain earnings related to the
Company’s Canadian, Netherlands, and United Kingdom operations that have historically been deemed permanently
reinvested. As of December 31, 2016, the incremental tax associated with these earnings if the cash balances were repatriated
to the United States would approximate $0.3 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 ....................................... $
2016
Year Ended December 31,
2015
2014
42,795 $
42,743
7,672
684
19,457
(13,033)
100,318 $
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
2016 compared with 2015
Net cash provided by operating activities increased $40.0 million, primarily from results of operations and changes in
working capital.
2015 compared with 2014
Net cash provided by operating activities increased $2.2 million in 2015, primarily from results of operations.
Investing Activities
(in thousands)
Capital expenditures................................................................................. $
Cash paid for acquired businesses, net .....................................................
Proceeds from dispositions of property and other assets .........................
Proceeds from possessory interest and personal property - discontinued
operations .................................................................................................
Net cash used in investing activities ................................................ $
2016
Year Ended December 31,
2015
(49,815) $
(195,989)
1,166
(29,839 ) $
(430 )
1,542
2014
(29,389)
(120,251)
1,109
—
(244,638) $
—
(28,727 ) $
28,000
(120,531)
36
2016 compared with 2015
Net cash used in investing activities increased $215.9 million, primarily due to cash payments, net of cash acquired, of
$196.0 million for the acquisitions completed in 2016 of ON Services, FlyOver Canada, CATC, and Maligne Lake Tours,
and an increase in capital expenditures, primarily due to the Banff Gondola renovations.
2015 compared with 2014
Net cash used in investing activities decreased $91.8 million, primarily due to the cash payments, net of cash acquired,
in 2014 of $120.3 million for the acquisitions of Blitz, onPeak, N200, and the West Glacier Properties, offset in part by $28.0
million received in 2014 for the Company’s possessory interest and personal property at Glacier Park, Inc.
Financing Activities
(in thousands)
Proceeds from borrowings ....................................................................... $
Payments on debt and capital lease obligations .......................................
Dividends paid on common stock ............................................................
Debt issuance costs ..................................................................................
Common stock purchased for treasury .....................................................
Acquisition of business - deferred consideration .....................................
Other ........................................................................................................
Net cash provided by (used in) financing activities ....................... $
2016
Year Ended December 31,
2015
2014
229,701 $
(108,915)
(8,111)
(336)
(722)
(130)
95
111,582 $
50,000 $
(62,969 )
(8,036 )
—
(4,816 )
(896 )
1,459
(25,258 ) $
189,512
(61,461)
(38,387)
(1,671)
(12,321)
—
1,269
76,941
2016 compared with 2015
The change in net cash provided by (used in) financing activities was primarily due to an increase in net borrowings of
$133.8 million related to the acquisitions of ON Services, CATC, and FlyOver Canada completed in 2016 and a decrease in
cash used for common stock repurchases of $4.1 million.
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.
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, the Company repurchased 141,462 shares on the open market for $3.8 million. No
open market repurchases were made during 2016. As of December 31, 2016, 440,540 shares remained available for
repurchase. The authorization of the Board of Directors does not have an expiration date. In addition, during 2016 and 2015,
the Company repurchased 25,432 shares for $0.7 million and 35,649 shares for $1.0 million, respectively, related to tax
withholding requirements on vested share-based awards.
37
Contractual Obligations
The following table presents Viad’s contractual obligations as of December 31, 2016.
(in thousands)
Revolver and term loan borrowings ................................ $ 174,206 $
25,829
Operating leases ..............................................................
Pension and postretirement benefits (1) ............................
3,255
Purchase obligations (2) ...................................................
29,520
762
Capital lease obligations .................................................
75,000 $
38,936
6,640
7,291
693
Total contractual obligations (3) .............................. $ 233,572 $ 128,560 $
2017
— $
22,541
6,702
2,330
14
— $ 249,206
96,710
33,077
39,619
1,469
31,587 $ 26,362 $ 420,081
9,404
16,480
478
—
Payments due by period
2018-2019
2020-2021 Thereafter
Total
(1)
(2)
(3)
Estimated contributions related to multi-employer benefit plans are excluded from the table above. Refer to Note 17 –
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 $33.3 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 Items and
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 20 – 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 19 – Leases and Other, and Note 20 – 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 and Other Intangible Assets — Goodwill and other intangible assets with indefinite useful lives are not
amortized, but instead are tested for impairment at least annually. Intangible assets with finite lives are amortized over their
respective estimated useful lives and are reviewed for impairment if an event occurs or circumstances change that would
indicate the carrying value of the intangible assets may not be recoverable.
38
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.
For GES U.S., goodwill is assigned to and tested at the operating segment level (all domestic operations of GES). For
GES International, goodwill is assigned to and tested based on the segment’s geographical operations (GES EMEA and GES
Canada). For Pursuit, impairment testing is performed at the reporting unit level (Brewster Travel Canada, the Alaska
Collection, Glacier Park, Inc., and FlyOver Canada).
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, 2016, Viad’s aggregate goodwill was $254.0 million. As a result of the Company’s
most recent impairment analysis performed as of October 31, 2016, 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 GES’ reporting
units in the U.S., GES EMEA, and GES Canada, was 153 percent, 137 percent, and 165 percent, respectively. For the
Brewster Travel Canada, the Alaska Collection, and the Glacier Park, Inc. reporting units, the excess of the estimated fair
value over the carrying value was 132 percent, 70 percent, and 14 percent, respectively. FlyOver Canada was acquired on
December 29, 2016 and was not included in the October 31, 2016 impairment analysis. 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.
If an impairment indicator related to intangible assets is identified, or if other circumstances indicate an impairment
may exist, the Company performs an assessment to determine if an impairment loss should be recognized. This assessment
includes a recoverability test to identify if the expected future undiscounted cash flows are less than the carrying value of the
related assets. If the results of the recoverability test identify expected future undiscounted cash flows are less than the
carrying value of the related assets, a measurement of impairment is performed and any carrying amount in excess of fair
value is recognized as an impairment. The Company periodically evaluates the continued recoverability of intangible assets
which were previously evaluated due to an impairment indicator to determine if remeasurement is necessary.
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
sheets. 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,
2016 and 2015, Viad had gross deferred tax assets of $58.3 million and $64.6 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.
39
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 income 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 income tax credits carryforwards would be utilized before their
expiration. At the end of 2016, the remaining foreign income tax credit carryforwards are $2.3 million. If not utilized, the
foreign income 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, 2016, the incremental unrecognized tax liability (net of estimated foreign income tax credits) related to those
undistributed earnings was approximately $6.8 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.
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
$1.6 million to its funded pension plans and $0.9 million to its unfunded pension plans in 2017.
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 2017.
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 17
– 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 2016, 2015, and 2014 was
$8.0 million, $3.8 million, and $2.9 million, respectively, and the total tax benefits related to such costs were $3.0 million
$1.5 million, and $1.1 million, respectively. No share-based compensation costs were capitalized during 2016, 2015, or 2014.
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, and 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. Equity-based awards (including performance 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, until the time of settlement. 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
40
Viad’s expected stock price volatility, the expected period of time the stock option will remain outstanding of which stock
options have a ten-year life, 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.
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, changes in the levels of interest rates, 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, the Netherlands, 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 $29.1 million and
$23.3 million as of December 31, 2016 and 2015, respectively. During the years ended December 31, 2016 and 2015,
unrealized foreign currency translation losses of $5.8 million and $35.7 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 revenue and segment 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 revenue and segment operating results. 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 on the “Foreign Exchange Rate Variances”.
41
A hypothetical change of 10 percent in the Canadian dollar exchange rate would have resulted in a change to operating
income of approximately $2.8 million. A hypothetical change of 10 percent in the British pound exchange rate would have
resulted in a change to operating income of approximately $0.2 million. A hypothetical change of 10 percent in the Euro
exchange rate would have resulted in a change to operating income of approximately $0.4 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, 2016 and 2015, 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, 2016, 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, 2016. 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.
In accordance with the SEC’s published guidance, our management has excluded from its assessment the internal
control over financial reporting at CATC, ON Services, and FlyOver Canada, which we acquired on March 11, 2016, August
11, 2016, and December 29, 2016, respectively, and whose financial statements constitute 22.2% of total assets and 4.1% of
revenue of our consolidated financial statement amounts as of and for the year ended December 31, 2016.
There were no changes in the Company’s internal control over financial reporting during the fourth quarter of 2016 that
have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.
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 the Annual Report immediately prior to the Index to Financial
Statements.
Item 9B. OTHER INFORMATION
Not applicable.
42
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 18, 2017 (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.
the Company’s Code of Ethics
Viad has adopted a Code of Ethics for all directors, officers and employees of the Company and its subsidiaries. A
copy of
is available at Viad’s website at www.viad.com/about-us/corporate-
governance/documents-and-charters/default.aspx 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 2017” and
is incorporated herein by reference.
Item 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULE
(a) Financial Statements and Schedule
PART IV
The financial statements and schedule 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.
43
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 6,
2017.
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 6, 2017
Date: March 6, 2017
Date: March 6, 2017
Date: March 6, 2017
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
* Pursuant to power of attorney filed as Exhibit 24 to this Annual Report on Form 10-K
44
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, 2016.
In accordance with the SEC’s published guidance, our management has excluded from its assessment the internal
control over financial reporting at CATC, ON Services, and FlyOver Canada, which we acquired on March 11, 2016, August
11, 2016, and December 29, 2016, respectively, and whose financial statements constitute 22.2% of total assets and 4.1% of
revenue of our consolidated financial statement amounts as of and for the year ended December 31, 2016.
Based on its assessment, management concluded that, as of December 31, 2016, 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.
45
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, 2016, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission. As described in Management’s Report on Internal Control over
Financial Reporting, management excluded from its assessment the internal control over financial reporting for CATC, ON
Services, and FlyOver Canada, which were acquired on March 11, 2016, August 11, 2016, and December 29, 2016,
respectively, and are included in the 2016 consolidated financial statements of the Company and whose financial statements
constitute 22.2% of total assets and 4.1% of revenue of the consolidated financial statement amounts as of and for the year
ended December 31, 2016. Accordingly, our audit did not include the internal control over financial reporting at CATC, ON
Services, and FlyOver Canada. 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, 2016, 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,
2016 of the Company and our report dated March 6, 2017 expressed an unqualified opinion on those consolidated financial
statements and financial statement schedule.
/s/ DELOITTE & TOUCHE LLP
Phoenix, Arizona
March 6, 2017
46
INDEX TO FINANCIAL STATEMENTS
Consolidated Balance Sheets ....................................................................................................................................
Consolidated Statements of Operations .....................................................................................................................
Consolidated Statements of Comprehensive Income .................................................................................................
Consolidated Statements of Stockholders’ Equity .....................................................................................................
Consolidated Statements of Cash Flows ....................................................................................................................
Notes to Consolidated Financial Statements ..............................................................................................................
Report of Independent Registered Public Accounting Firm ......................................................................................
Schedule II – Valuation and Qualifying Accounts .....................................................................................................
Page
48
49
50
51
52
53
95
96
47
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 $1,342 and $1,593,
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 ....................................................................................................................... $
Liabilities and Stockholders’ Equity
Current liabilities .............................................................................................................
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 and outstanding ..............................................................................................
Additional capital .........................................................................................................
Retained earnings (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, 4,613,520 and 4,771,443 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,
2016
2015
20,900 $
56,531
104,648
31,420
18,449
175,417
279,858
44,297
42,549
254,022
73,673
869,816 $
67,596 $
42,723
29,913
30,390
174,968
345,590
74,243
28,611
50,734
499,178
37,402
573,841
16,291
172
421
(29,084 )
(10,728 )
(230,960 )
357,355
13,283
370,638
869,816 $
93,800
27,529
17,311
195,171
189,239
37,631
50,137
185,223
33,322
690,723
65,497
33,128
23,154
29,238
34,554
185,571
92,849
29,629
47,336
355,385
37,402
576,523
(17,866)
109
346
(23,257)
(11,265)
(239,411)
322,581
12,757
335,338
690,723
48
VIAD CORP
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Revenue:
Exhibition and event services ............................................................. $
Exhibits and environments .................................................................
Pursuit services ...................................................................................
Total revenue ..........................................................................................
Costs and expenses:
Costs of services .................................................................................
Costs of products sold ........................................................................
Corporate activities .............................................................................
Interest income ...................................................................................
Interest expense ..................................................................................
Restructuring charges .........................................................................
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 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 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 .............................................................................................. $
2016
Year Ended December 31,
2015
2014
881,137 $
170,469
153,364
1,204,970
799,752 $
177,126
112,170
1,089,048
772,770
171,698
120,519
1,064,987
954,667
165,118
10,322
(1,165)
5,898
5,183
218
1,140,241
64,729
21,250
43,479
(684)
42,795
(526)
42,269 $
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
2.12 $
(0.03)
2.09 $
1.34 $
(0.02 )
1.32 $
2.02
0.57
2.59
20,177
19,981
20,133
2.12 $
(0.03)
2.09 $
19,990
0.40 $
42,953 $
(684)
42,269 $
1.34 $
(0.02 )
1.32 $
19,797
0.40 $
27,000 $
(394 )
26,606 $
2.02
0.57
2.59
19,804
1.90
40,790
11,564
52,354
Refer to Notes to Consolidated Financial Statements.
49
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
VIAD CORP
(in thousands)
Net income .............................................................................................. $
Other comprehensive income (loss):
Unrealized gains (losses) on investments, net of tax effects of $47,
$(78), and $26 .....................................................................................
Unrealized foreign currency translation adjustments, net of tax ........
Change in net actuarial gain (loss), net of tax effects of $617, 653,
and $(1,538)........................................................................................
Change in prior service credit (cost), net of tax effects of $(219),
$(210), and $339 .................................................................................
Comprehensive income (loss) ................................................................
Comprehensive income attributable to noncontrolling interest ........
Comprehensive income (loss) attributable to Viad ............................. $
2016
Year Ended December 31,
2015
2014
42,795 $
27,048 $
55,567
75
(5,827)
(125 )
(35,673 )
42
(18,431)
894
2,556
(2,568)
(357)
37,580
(526)
37,054 $
(345 )
(6,539 )
(442 )
(6,981 ) $
351
34,961
(3,213)
31,748
Refer to Notes to Consolidated Financial Statements.
50
(in thousands)
Balance, December 31, 2013 ............................ $
Net income ........................................................
Dividends on common stock ($1.90 per share) ..
Common stock purchased for treasury ...............
Employee benefit plans......................................
ESOP allocation adjustment ..............................
Share-based compensation—equity awards .......
Tax benefits from share-based compensation ....
Unrealized foreign currency translation
adjustment .........................................................
Unrealized gain on investments .........................
Amortization of net actuarial loss ......................
Amortization of prior service credit ...................
Other, net ...........................................................
Balance, December 31, 2014 ............................
Net income ........................................................
Dividends on common stock ($0.40 per share) ..
Common stock purchased for treasury ...............
Employee benefit plans......................................
Share-based compensation—equity awards .......
Tax expense from share-based compensation ....
Unrealized foreign currency translation
adjustment .........................................................
Unrealized loss on investments ..........................
Amortization of net actuarial gain .....................
Amortization of prior service cost .....................
Other, net ...........................................................
Balance, December 31, 2015 ............................ $
Net income ........................................................
Dividends on common stock ($0.40 per share) ..
Common stock purchased for treasury ...............
Employee benefit plans......................................
Share-based compensation—equity awards .......
Tax expense from share-based compensation ....
Unrealized foreign currency translation
adjustment .........................................................
Unrealized gain on investments .........................
Amortization of net actuarial gain .....................
Amortization of prior service cost .....................
Other, net ...........................................................
Balance, December 31, 2016 ............................ $
5
1
VIAD CORP
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Common
Stock
Additional
Capital
Retained
Earnings
(Deficit)
Unearned
Employee
Benefits
and Other
Accumulated
Other
Comprehensive
Income
Common
Stock in
Treasury
Total
Viad
Equity
Non-
Controlling
Interest
Total
Stockholders’
Equity
37,402 $
—
—
—
—
—
—
—
—
—
—
—
—
37,402
—
—
—
—
—
—
—
—
—
—
—
37,402 $
—
—
—
—
—
—
—
—
—
—
—
37,402 $
590,862 $
—
—
—
(11,334)
—
2,319
217
—
—
—
—
2
582,066
—
—
—
(7,957)
2,156
360
—
—
—
—
(102)
576,523 $
—
—
—
(5,251)
2,525
95
—
—
—
—
(51)
573,841 $
(50,393) $
52,354
(38,387)
—
—
—
—
—
—
—
—
—
(1)
(36,427)
26,606
(8,036)
—
—
—
—
—
—
—
—
(9)
(17,866) $
42,269
(8,111)
—
—
—
—
—
—
—
—
(1)
16,291 $
(21)
—
—
—
—
44
—
—
—
—
—
—
—
23
—
—
—
—
—
—
—
—
—
—
86
109
—
—
—
—
—
—
—
—
—
—
63
172
$
$
$
20,017
—
—
—
—
—
—
—
(18,431)
42
(2,568)
351
—
(589)
—
—
—
—
—
—
(35,673)
(125)
2,556
(345)
—
(34,176)
—
—
—
—
—
—
(5,827)
75
894
(357)
—
(39,391)
$
$
$
(250,426)
—
—
(12,321)
15,658
—
—
—
—
—
—
—
1
(247,088)
—
—
(4,816)
12,493
—
—
—
—
—
—
—
(239,411)
—
—
(722)
9,172
—
—
—
—
—
—
1
(230,960)
$
$
$
347,441
52,354
(38,387)
(12,321)
4,324
44
2,319
217
(18,431)
42
(2,568)
351
2
335,387
26,606
(8,036)
(4,816)
4,536
2,156
360
(35,673)
(125)
2,556
(345)
(25)
322,581
42,269
(8,111)
(722)
3,921
2,525
95
(5,827)
75
894
(357)
12
357,355
$
$
$
9,102
3,213
—
—
—
—
—
—
—
—
—
—
—
12,315
442
—
—
—
—
—
—
—
—
—
—
12,757
526
—
—
—
—
—
—
—
—
—
—
13,283
$
$
$
356,543
55,567
(38,387)
(12,321)
4,324
44
2,319
217
(18,431)
42
(2,568)
351
2
347,702
27,048
(8,036)
(4,816)
4,536
2,156
360
(35,673)
(125)
2,556
(345)
(25)
335,338
42,795
(8,111)
(722)
3,921
2,525
95
(5,827)
75
894
(357)
12
370,638
Refer to Notes to Consolidated Financial Statements.
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 ................................................................................................
(Gains) losses 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, net ...................................................................
Proceeds from dispositions of property and other assets ........................................
Proceeds from possessory interest and personal property - discontinued
operations ...............................................................................................................
Net cash used in investing activities...........................................................................
Cash flows from financing activities
Proceeds from borrowings ......................................................................................
Payments on debt and capital lease obligations ......................................................
Dividends paid on common stock ..........................................................................
Debt issuance costs.................................................................................................
Common stock purchased for treasury ...................................................................
Excess tax benefit from share-based compensation arrangements..........................
Acquisition of business - deferred consideration ....................................................
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 period ................................................................. $
2016
Year Ended December 31,
2015
2014
42,795 $
27,048 $
55,567
42,743
7,672
684
5,183
218
(54)
8,038
(95)
6,167
(9,358)
(2,646)
1,770
(3,866)
(353)
8,429
(4,630)
(2,379)
100,318
(49,815)
(195,989)
1,166
—
(244,638)
229,701
(108,915)
(8,111)
(336)
(722)
95
(130)
—
111,582
(2,893)
(35,631)
56,531
20,900 $
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 )
(8,036 )
—
(4,816 )
418
(896 )
1,041
(25,258 )
(6,751 )
(459 )
56,990
56,531 $
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)
(1,671)
(12,321)
114
—
1,155
76,941
(3,331)
11,169
45,821
56,990
Refer to Notes to Consolidated Financial Statements.
52
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 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: GES U.S., GES International, (collectively, “GES”), and Pursuit.
GES
GES, previously referred to as the Marketing & Events Group, is a global, full-service provider for live events that
produces exhibitions, conferences, corporate events, and consumer events. GES offers a comprehensive range of live event
services and innovative technology to event organizers and exhibitors including core services, event technology, and audio-
visual services – all with a global reach.
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.
Pursuit
Pursuit, previously referred to as 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. Pursuit is composed of four lines of business: (i) Hospitality; (ii)
Attractions; (iii) Transportation; and (iv) Travel Planning. 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 and
Vancouver in Canada, and Glacier, Denali, and Kenai Fjords National Parks in the United States. Pursuit is composed of
Brewster Travel Canada, the Alaska Collection, Glacier Park, Inc., and FlyOver Canada.
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.
53
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, are
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 Viad’s 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.
54
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, the Netherlands, 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 core services, event technology services, and audio-visual services to event organizers and exhibitors
participating in live events. GES derives revenue from consumer events by charging visitors to view the touring exhibitions.
Exhibition and event service’s revenue is recognized when services are completed, net of commissions. Exhibits and
environments revenue is accounted for using the completed-contract method. Pursuit generates revenue through its
hospitality, attractions, transportation, and travel planning services. Pursuit’s 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, liability-based awards (including performance units
and restricted stock units), and stock options. These awards contain forfeiture and non-compete provisions.
The fair value of restricted stock awards is based on Viad’s closing 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, and 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
55
stock price. Compensation expense related to liability-based awards is recognized ratably over the requisite service period of
approximately three years.
Equity-based awards (including performance 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, until the time of settlement. To the extent
earned, equity-based awards are settled in Viad’s comment stock. Compensation expense related to equity-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. The Company has not granted stock options since 2010.
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.
56
Impact of Recent Accounting Pronouncements
The following table provides a brief description of recent accounting pronouncements:
Standard
Description
Date of
adoption
Effect on the financial statements
Standards Not Yet Adopted
ASU 2014-09,
Revenue from
Contracts with
Customers (Topic
606)
The standard establishes a new recognition
January 1,
2018
model that 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.
Subsequent to the issuance of ASU 2014-09,
the FASB issued several amendments in 2016
which do not change the core principle of the
guidance stated in ASU 2014-09. Rather, they
are intended to clarify and improve
understanding of certain topics included
within the revenue standard.
The Company is currently evaluating the impact of the
adoption of this new guidance on its financial position
or results of operations including analyzing its current
portfolio of customer contracts. The Company has
assigned internal resources in addition to the
engagement of a third-party service provider to assist in
the evaluation of the impact on its accounting policies,
processes, and system requirements. Based on the
Company’s preliminary assessment, the adoption of this
standard will not have a material impact on Viad’s
consolidated financial statements. The Company
expects the immaterial impact to primarily relate to the
deferral of certain commissions which were previously
expensed as incurred but will generally be capitalized
and amortized over the period of contract performance,
and the deferral of certain costs incurred in connection
with trade shows which were previously expensed as
incurred but will generally be capitalized and expensed
upon the completion of the show. The Company is not
planning to early adopt the standard and has not
determined which transition method it will use.
Additionally, the new guidance requires enhanced
disclosures, including revenue recognition policies to
identify performance obligations to customers and
significant judgments in measurement and recognition.
The Company is continuing its assessment, which may
identify other impacts.
ASU 2015-11,
Inventory (Topic
330) - Simplifying
the Measurement of
Inventory
ASU 2016-02,
Leases (Topic 842)
The amendment applies to inventory
January 1,
The adoption of this new guidance is not expected to
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.
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.
2017
have a significant effect on Viad’s consolidated
financial statements.
January 1,
2019
The Company is currently evaluating the potential
impact of the adoption of this new guidance on its
financial position or results of operations including
analyzing its existing operating leases. Based on the
Company’s preliminary assessment, the adoption of this
standard will have a material impact on Viad’s
consolidated balance sheets, but the income statement is
not expected to be materially impacted. The Company
expects the most significant impact will relate to
identifying facility and equipment leases and embedded
lease arrangements. The Company has not determined
in which period it will adopt the new guidance.
Adoption is dependent on the Company’s analysis on
information necessary to restate prior periods. The
Company is continuing its assessment, which may
identify other impacts.
57
Date of
adoption
January 1,
2017
Effect on the financial statements
The impact of the adoption of this new guidance will be
dependent on the timing of when share-based awards
vest or options are exercised, the Company’s tax rate,
and the intrinsic value at the time share-based awards
vest or options are exercised.
January 1,
2018
The Company is currently evaluating the potential
impact of the adoption of this new guidance on its
financial position or results of operations.
January 1,
2018
The Company is currently evaluating the potential
impact of the adoption of this new guidance on its
financial position or results of operations.
Standard
Description
Standards Not Yet Adopted (Continued)
ASU 2016-09,
Compensation -
Stock Compensation
(Topic 718) -
Improvements to
Employee Share-
Based Payment
Accounting
The amendment identifies areas for
simplification involving several aspects of
accounting for share-based payment
transactions, including the income tax
consequences, classification of awards as
either equity or liabilities, an option to
recognize gross stock compensation expense
with actual forfeitures recognized as they
occur, as well as certain classifications on the
statement of cash flows. Early adoption is
permitted.
ASU 2016-15,
Statement of Cash
Flows (Topic 230) -
Classification of
Certain Cash
Receipts and Cash
Payments
The amendment provides guidance on eight
specific cash flow issues with the objective of
reducing the existing diversity in practice in
how certain cash receipts and cash payments
are presented and classified in the statement
of cash flows. Early adoption is permitted.
ASU 2016-16,
Income Taxes (Topic
740) - Intra-Entity
Transfers of Assets
Other Than
Inventory
The amendment eliminates an exception in
ASC 740 which prohibits the recognition of
current and deferred income tax effects for
intra-entity transfers of assets other than
inventory until the asset has been sold to an
outside party. The amendment requires an
entity to recognize the income tax
consequences of intra-entity transfers of
assets other than inventory at the time that the
transfer occurs.
ASU 2017-01,
Business
Combination (Topic
805) - Clarifying the
Definition of a
Business
ASU 2017-04,
Intangibles -
Goodwill and Other
(Topic 350) -
Simplifying the Test
for Goodwill
Impairment
The amendment provides guidance on
January 1,
evaluating whether transactions should be
accounted for as acquisitions (or disposals) of
assets or businesses.
2018
The Company is currently evaluating the potential
impact of the adoption of this new guidance on its
financial position or results of operations.
January 1,
The adoption of this new guidance is not expected to
2020
have a significant effect on Viad’s consolidated
financial statements and the Company expects the
adoption to reduce the complexity surrounding the
analysis of goodwill impairment.
The amendment eliminates the requirement to
estimate the implied fair value of goodwill if
it was determined that the carrying amount of
a reporting unit exceeded its fair value.
Goodwill impairment will now be recognized
by the amount by which a reporting unit’s
carrying value exceeds its fair value, not to
exceed the carrying amount of goodwill. The
amendment should be applied prospectively
and is effective for annual or any interim
goodwill impairment tests in fiscal years
beginning after December 15, 2019. Early
adoption is permitted for interim or annual
goodwill impairment tests performed on
testing dates after January 1, 2017.
58
Standard
Description
Date of
adoption
Effect on the financial statements
The amendment requires that a performance
target that 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.
Standards Recently Adopted
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
The amendments require debt issuance costs
related to a recognized debt liability to 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.
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 2015-16,
Business
Combinations (Topic
805) - Simplifying
the Accounting for
Measurement-Period
Adjustments
The amendment requires an acquirer to
recognize adjustments to provisional amounts
that are identified during the measurement
period in the reporting period in which the
adjustment amounts are determined.
January 1,
2016
The Company adopted this guidance prospectively to all
awards granted after the effective date. The adoption of
this guidance did not have a material impact on the
consolidated financial statements.
January 1,
The Company adopted this guidance on a retrospective
2016
basis which resulted in the reclassification of
unamortized debt issuance costs of $1.6 million from
other long-term assets to a reduction in long-term debt
on the December 31, 2015 consolidated balance sheet.
January 1,
The adoption of this guidance did not have a material
2016
impact on the consolidated financial statements.
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, 2016, there were 861,561 total shares available for future grant.
59
The following table summarizes share-based compensation expense:
(in thousands)
Performance unit incentive plan (“PUP”) ................................................ $
Restricted stock ........................................................................................
Restricted stock units ...............................................................................
Share-based compensation before income tax benefit ........................
Income tax benefit ...................................................................................
Share-based compensation, net of income tax benefit ........................ $
2016
Year Ended December 31,
2015
2014
5,703 $
2,073
262
8,038
(2,988)
5,050 $
1,692 $
2,111
45
3,848
(1,454 )
2,394 $
359
2,495
76
2,930
(1,102)
1,828
In addition, $0.2 million of costs, $45,000 of costs, and $0.1 million of benefits associated with share-based
compensation were included in restructuring expense in 2016, 2015 and 2014, respectively. The 2016 amount of $0.2 million
related primarily to PUP and restricted stock units. 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. No share-based compensation costs were
capitalized during 2016, 2015, or 2014.
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 following table summarizes the activity of the outstanding share-based compensation awards:
Balance at December 31, 2015 ............................ 279,217 $
Granted .................................................................. 78,039 $
Vested .................................................................... (76,235) $
Forfeited ................................................................. (13,970) $
Balance at December 31, 2016 ............................ 267,051 $
25.65 231,165 $
27.45 104,084 $
26.52 (73,188) $
25.03
(6,556) $
25.96 255,505 $
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
25.69
26.98
27.18
—
25.58
26.15 16,447 $
5,500 $
26.88
(5,965) $
27.35
25.84
— $
26.11 15,982 $
Restricted Stock
The grant date fair value of restricted stock which vested during 2016, 2015, and 2014 was $2.0 million, $2.2 million,
and $4.5 million, respectively. As of December 31, 2016, the unamortized cost of all outstanding restricted stock awards was
$2.5 million, which Viad expects to recognize in the consolidated financial statements over a weighted-average period of
approximately 1.2 years. During the years ended December 31, 2016, 2015, and 2014, the Company repurchased 25,432
shares for $0.7 million, 35,649 shares for $1.0 million, and 72,996 shares for $1.8 million, respectively, related to tax
withholding requirements on vested share-based awards. As of December 31, 2016, there were 861,561 total shares available
for future grant in accordance with the provisions of the 2007 Plan.
PUP Awards
In February 2016, the PUP Plan was amended to provide that PUP awards earned under the 2007 Plan may be payable
in the form of cash or in shares of Viad common stock (or a combination of both). Previously, payouts could only be made in
cash. The vesting of shares is based upon achievement of certain performance-based criteria. The performance period of the
shares is three years.
During the year ended December 31, 2016, Viad granted $2.7 million of PUP awards of which $0.9 million are payable
in shares. As of December 31, 2016 and 2015, Viad had recorded liabilities of $7.6 million and $2.4 million, respectively,
related to PUP awards. In March 2016, the PUP awards granted in 2013 vested and cash payouts of $0.2 million were
distributed. In March 2015, the PUP awards granted in 2012 vested and cash payouts of $2.4 million were distributed. In
March 2014, the PUP awards granted in 2011 vested and cash payouts totaling $2.9 million were distributed.
60
Restricted Stock Units
As of December 31, 2016 and December 31, 2015, Viad had aggregate liabilities recorded of $0.4 million and $0.3
million, respectively, related to restricted stock units. In February 2016, portions of the 2011, 2012, and 2013 restricted stock
units vested and cash payouts of $0.2 million were distributed. In February 2015, portions of the 2010, 2011, and 2012
restricted stock units vested and cash payouts of $0.3 million were distributed. In February 2014, portions of the 2010 and
2011 restricted stock units vested and cash payouts of $0.2 million were distributed.
Stock Options
During the year ended December 31, 2016, there was no stock option activity. As of both December 31, 2016 and
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.
As of December 31, 2016, there were no unrecognized costs related to non-vested stock option awards. As discussed
above, the equitable adjustments to the outstanding stock options resulting from the special cash dividends paid on February
14, 2014 and November 7, 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, 2016 and 2015, or the unrecognized cost.
Additional information pertaining to stock options is provided in the table below:
(in thousands)
Total intrinsic value of stock options outstanding(1) ................................. $
Total intrinsic value of stock options exercised ........................................ $
Cash received from the exercise of stock options ..................................... $
Tax benefits realized for tax deductions related to stock option
exercises .................................................................................................... $
(1) The aggregate intrinsic value of stock options outstanding 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 and therefore
changes based on changes in the fair market value of Viad’s common stock.
1,753 $
— $
— $
740 $
1,474 $
898 $
2,251
1,616
1,155
104 $
— $
461
2016
2014
December 31,
2015
61
Note 3. Acquisition of Businesses
2016 Acquisitions
Maligne Lake Tours
On January 4, 2016, the Company acquired the assets and operations 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. The
purchase price was $20.9 million Canadian dollars (approximately $15.0 million U.S. dollars) in cash, subject to certain
adjustments.
The following table summarizes the updated allocation of the aggregate purchase price paid and the amounts of assets
acquired and liabilities assumed based on the estimated fair value as of the acquisition date. During 2016, the Company made
a purchase accounting measurement period adjustment of approximately $240,000 to other liabilities based on refinements to
assumptions used in the preliminary valuation. The allocation of the purchase price was completed as of December 31, 2016.
(in thousands)
Purchase price paid as:
Cash ........................................................................................................................
$
14,962
Fair value of net assets acquired:
Inventories .............................................................................................................. $
Prepaid expenses ....................................................................................................
Property and equipment ..........................................................................................
Intangible assets .....................................................................................................
Total assets acquired .......................................................................................
Customer deposits ..................................................................................................
Other liabilities .......................................................................................................
Total liabilities assumed .......................................................................................
Total fair value of net assets acquired ...........................................................
Excess purchase price over fair value of net assets acquired (“goodwill”) ...........
246
2
4,133
9,244
13,625
15
240
255
$
13,370
1,592
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 the fair value of net assets acquired was recorded as goodwill. Goodwill is included in the Pursuit business 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 Pursuit’s other businesses. Goodwill is expected to be deductible for tax purposes
pursuant to Canadian tax regulations. 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 Maligne
Lake Tours were $0.1 million in 2016 which are included in cost of services in Viad’s Consolidated Statements of Operations
and $0.2 million in 2015 which are included in corporate activities in Viad’s Consolidated Statements of Operations.
Identified intangible assets acquired in the Maligne Lake Tours acquisition totaled $9.2 million and consist of operating
licenses of $8.3 million, customer relationships of $0.8 million, and trade name of $0.1 million. The weighted-average
amortization period related to the intangible assets is 26.7 years, largely attributable to operating licenses amortized over the
remaining Parks Canada lease of 29 years.
The results of operations of Maligne Lake Tours have been included in Viad’s consolidated financial statements from
the date of acquisition. During 2016, revenue and operating income related to Maligne Lake Tours were $6.3 million and
$1.9 million, respectively.
62
CATC
On March 11, 2016, the Company acquired 100 percent of the equity interests in CATC Alaska Tourism Corporation,
formerly known as CIRI Alaska Tourism Corporation (“CATC”), the operator of an Alaskan tourism business that includes a
marine sightseeing tour business, three lodges, and a package tour business. The purchase price was $45.0 million in cash,
subject to certain adjustments.
The following table summarizes the updated allocation of the aggregate purchase price paid and the amounts of assets
acquired and liabilities assumed based on the estimated fair value as of the acquisition date. During 2016, the Company made
certain purchase accounting measurement period adjustments based on refinements to assumptions used in the preliminary
valuation of approximately $89,000 from working capital receivable, $105,000 to accounts payable, and $16,000 from
accrued liabilities. The allocation of the purchase price was completed as of December 31, 2016.
(in thousands)
Purchase price paid as:
Cash ........................................................................................................................
Working capital ......................................................................................................
Cash acquired .........................................................................................................
Purchase price, net of cash acquired .............................................................
$
45,000
(35)
(2,196)
42,769
Fair value of net assets acquired:
Accounts receivable................................................................................................ $
Inventories ..............................................................................................................
Prepaid expenses ....................................................................................................
Property and equipment ..........................................................................................
Intangible assets .....................................................................................................
Total assets acquired .......................................................................................
Accounts payable ...................................................................................................
Accrued liabilities ...................................................................................................
Customer deposits ..................................................................................................
Total liabilities assumed .......................................................................................
Total fair value of net assets acquired ...........................................................
Excess purchase price over fair value of net assets acquired (“goodwill”) ...........
8
921
82
43,470
980
45,461
306
434
1,952
2,692
$
42,769
—
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 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 CATC were $0.1 million in 2016, $0.6 million in 2015, and $0.1 million
in 2014 and are included in corporate activities in Viad’s Consolidated Statements of Operations.
Identified intangible assets acquired in the CATC acquisition totaled $1.0 million and consist of customer relationships
of $0.8 million and trade names of $0.2 million. The weighted-average amortization period related to the intangible assets is
5.8 years.
The results of operations of CATC have been included in Viad’s consolidated financial statements from the date of
acquisition. During 2016, revenue and operating income related to CATC were $28.0 million and $6.0 million, respectively.
63
ON Services
On August 11, 2016, the Company acquired the assets and operations of ON Event Services, LLC (“ON Services”), a
leading provider of audio-visual production services for live events in the United States. The aggregate purchase price was up
to $92.5 million in cash, subject to certain adjustments, which included an earnout payment (the “Earnout”) of up to $5.5
million. The fair value of the Earnout was valued on the date of acquisition and was remeasured based on the financial
performance of ON Services for 2016. As of the transaction date, the fair value of the Earnout was estimated to be $540,000.
As of December 31, 2016, the Company determined the fair value of the Earnout was zero as ON Services did not meet its
2016 financial target. Refer to Note 12 – Fair Value Measurements for the estimated fair value of the Earnout as of December
31, 2016.
The following table summarizes the updated allocation of the aggregate purchase price paid and the amounts of assets
acquired and liabilities assumed based on the estimated fair value as of the acquisition date. During 2016, the Company made
certain purchase accounting measurement period adjustments based on refinements to assumptions used in the preliminary
valuation of approximately $628,000 from working capital receivable, $170,000 from accounts receivable, $14,000 from
inventories, $102,000 from prepaid expenses, $650,000 to intangible assets, $113,000 to accounts payable, and $92,000 to
accrued liabilities. The allocation of the purchase price was completed as of December 31, 2016.
(in thousands)
Purchase price paid as:
Cash ........................................................................................................................
Working capital adjustment ....................................................................................
Contingent consideration ........................................................................................
Purchase price .................................................................................................
$
87,000
344
540
87,884
Fair value of net assets acquired:
Accounts receivable ............................................................................................... $
Inventories ..............................................................................................................
Prepaid expenses ....................................................................................................
Property and equipment..........................................................................................
Intangible assets .....................................................................................................
Total assets acquired.......................................................................................
Accounts payable ...................................................................................................
Accrued liabilities ..................................................................................................
Customer deposits ..................................................................................................
Other liabilities .......................................................................................................
Total liabilities assumed .......................................................................................
Total fair value of net assets acquired ...........................................................
4,643
256
872
14,827
33,990
54,588
992
564
851
274
2,681
Excess purchase price over fair value of net assets acquired (“goodwill”) ...........
$
51,907
35,977
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 the fair value of net assets acquired was recorded as goodwill. Goodwill is included in the GES business group and
the primary factor that contributed to the purchase price resulting in the recognition of goodwill primarily relates to future
growth opportunities when combined with GES’ other businesses. Goodwill is expected to be deductible for tax purposes
over 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 ON Services were $0.9 million
in 2016 and were included in corporate activities in Viad’s consolidated statement of operations.
Identified intangible assets acquired in the ON Services acquisition totaled $34.0 million and consist of customer
relationships of $27.6 million, trade names of $3.2 million, and non-compete agreements of $3.2 million. The weighted-
average amortization period related to the intangible assets is 10.5 years.
The results of operations of ON Services have been included in Viad’s consolidated financial statements from the date
of acquisition. During 2016, revenue and operating loss related to ON Services were $21.3 million and $0.8 million,
respectively.
64
FlyOver Canada
On December 29, 2016, the Company acquired the assets and operations of FlyOver Canada, a recreational attraction
that provides a virtual flight ride experience with a combination of motion seating, a four-story movie screen, and media and
visual effects. The purchase price was $68.8 million Canadian dollars (approximately $50.9 million U.S. dollars) in cash,
subject to certain adjustments.
The following table summarizes the preliminary recording of the fair value of the assets acquired and liabilities
assumed as of the acquisition date. Due to the recent timing of the acquisition, the purchase price allocation is not yet
finalized and is subject to change within the measurement period (up to one year from the acquisition date) as the assessment
of property and equipment and intangible assets is finalized.
(in thousands)
Purchase price paid as:
Cash ........................................................................................................................
Cash acquired .........................................................................................................
Purchase price, net of cash acquired .............................................................
$
50,920
(6)
50,914
Fair value of net assets acquired:
Inventories .............................................................................................................. $
Prepaid expenses ....................................................................................................
Property and equipment..........................................................................................
Intangible assets .....................................................................................................
Total assets acquired.......................................................................................
Accrued liabilities ..................................................................................................
Total liabilities acquired ......................................................................................
Total fair value of net assets acquired ...........................................................
Excess purchase price over fair value of net assets acquired (“goodwill”)...........
11
37
10,867
6,028
16,943
118
118
$
16,825
34,089
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 the fair value of net assets acquired was recorded as goodwill. Goodwill of FlyOver Canada is included in the
Pursuit business group and is a separate reporting unit. The primary factor that contributed to the purchase price resulting in
the recognition of goodwill relates to future growth opportunities and expansion of the FlyOver concept. Goodwill is
expected to be deductible for tax purposes pursuant to Canadian tax regulations. 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 FlyOver Canada were $0.5 million in 2016 and are included in cost of services in Viad’s
Consolidated Statements of Operations.
Identified intangible assets acquired in the FlyOver Canada acquisition totaled $6.0 million and consist of trade names
of $3.7 million, customer relationships of $1.6 million, and non-compete agreements of $0.7 million. The weighted-average
amortization period related to the intangible assets is 9.4 years.
The results of operations of FlyOver Canada have been included in Viad’s consolidated financial statements from the
date of acquisition. During 2016, revenue and operating income related to FlyOver Canada were $72,000 and $5,000,
respectively.
2014 Acquisitions
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.
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. 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,
65
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.
Transaction costs associated with the acquisition of Blitz were $0.1 million in 2015 and $0.8 million in 2014 and are
included in corporate activities in Viad’s Consolidated Statements of Operations. 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.
Transaction costs associated with the acquisition of onPeak LLC were $0.2 million in 2015 and $0.5 million in 2014
and are included in corporate activities in Viad’s Consolidated Statements of Operations. 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 2015 to Travel Planners, Inc. as a result of an election made by the 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 and is collectively
referred to as “onPeak.”
Transaction costs associated with the acquisition of Travel Planners, Inc. were $0.2 million in 2015 and $0.5 million in
2014 and are included in corporate activities in Viad’s Consolidated Statements of Operations. 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
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.
Transaction costs associated with the acquisition of N200 were $0.2 million in 2015 and $1.0 million in 2014 and are
included in corporate activities in Viad’s Consolidated Statements of Operations. 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.
66
The following table summarizes the final 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 acquisitions. 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, 2015.
West
Glacier
Properties
Blitz
onPeak LLC
Travel
Planners, Inc.
N200
(in thousands)
Purchase price paid as:
Cash .......................................................................... $
Additional purchase price paid for tax election ........
Working capital adjustment ......................................
Working capital adjustment payable ........................
Contingent consideration ..........................................
Cash acquired ...........................................................
Total purchase price .........................................
16,544 $
—
—
320
—
—
16,864
24,416 $
—
—
—
—
(190)
24,226
42,950 $
—
—
—
—
(4,064 )
38,886
33,674 $
896
(279)
—
—
(4,204)
30,087
12,068
—
458
—
1,145
(943)
12,728
Fair value of net assets acquired:
Accounts receivable .................................................
Prepaid expenses ......................................................
Inventories ................................................................
Property and equipment............................................
Intangible assets .......................................................
Other non-current assets ...........................................
Total assets acquired.........................................
Accounts payable .....................................................
Accrued liabilities ....................................................
Customer deposits ....................................................
Deferred tax liability ................................................
Revolving credit facility ...........................................
Accrued dilapidations ...............................................
Other liabilities .........................................................
Total liabilities acquired ........................................
Total fair value of net assets acquired .............
—
24
1,374
14,510
189
—
16,097
—
35
402
—
—
—
64
501
15,596
264
410
433
5,951
8,692
—
15,750
1,232
2,246
199
468
488
417
—
5,050
10,700
4,008
640
—
2,450
14,100
129
21,327
738
3,341
4,225
3,028
—
—
129
11,461
9,866
1,450
120
—
93
14,400
—
16,063
488
1,557
4,525
—
—
—
—
6,570
9,493
1,732
115
46
1,280
3,682
—
6,855
421
1,057
569
986
—
—
106
3,139
3,716
Excess purchase price over fair value of net assets
acquired (“goodwill”) .................................................. $
1,268 $
13,526 $
29,020 $
20,594 $
9,012
Under the acquisition method of accounting, the purchase prices as shown in the table above are 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 is recorded as goodwill. Goodwill is included in the Pursuit business
group for the West Glacier Properties, in GES International for Blitz and N200, and in GES U.S. for onPeak LLC and Travel
Planners, Inc. 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. All goodwill is deductible for tax purposes
over a period of 15 years for West Glacier Properties and Travel Planners, Inc., while $9.9 million of onPeak LLC’s $29.0
million goodwill is deductible and will be amortized over 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.
67
Following are the details of the purchase price allocated to the intangible assets acquired for the 2014 Acquisitions:
(in thousands, except weighted average life)
Customer relationships ................................................... $
Non-compete agreements ...............................................
Trade name .....................................................................
Favorable lease contracts ................................................
Fair value of intangible assets acquired .......................... $
Weighted average life .....................................................
West Glacier
Properties
Blitz
onPeak LLC
— $
—
—
189
189 $
6,808 $
1,413
471
—
8,692 $
13,800 $
—
300
—
14,100 $
Travel
Planners,
Inc.
13,500 $
—
300
600
14,400 $
N200
3,309
124
125
124
3,682
7.4 years
3.5 years
6.9 years
9.9 years 9.8 years
Supplementary pro forma financial information
The following table summarizes the unaudited pro forma results of operations attributable to Viad, assuming the 2016
acquisitions had each been completed on January 1, 2015:
(in thousands, except per share data)
Revenue ....................................................................................................................... $
Depreciation and amortization ..................................................................................... $
Income from continuing operations ............................................................................. $
Net income attributable to Viad ................................................................................... $
Diluted income per share (1) ......................................................................................... $
Basic income per share ................................................................................................ $
(1)
Diluted income per share amount cannot exceed basic income per share.
Year Ended December 31,
2016
1,250,290 $
52,074 $
43,727 $
42,517 $
2.10 $
2.10 $
2015
1,183,656
52,631
27,881
27,045
1.35
1.35
Note 4. Inventories
The components of inventories consisted of the following:
(in thousands)
Raw materials .............................................................................................................. $
Work in process ...........................................................................................................
Inventories ............................................................................................................. $
December 31,
2016
2015
16,846 $
14,574
31,420 $
14,383
13,146
27,529
Note 5. Other Current Assets
Other current assets consisted of the following:
(in thousands)
Prepaid vendor payments ............................................................................................. $
Income tax receivable ..................................................................................................
Prepaid software maintenance .....................................................................................
Prepaid insurance .........................................................................................................
Prepaid taxes ................................................................................................................
Prepaid rent ..................................................................................................................
Prepaid other ................................................................................................................
Other ............................................................................................................................
Other current assets ............................................................................................. $
December 31,
2016
2015
3,633 $
3,614
2,804
2,479
850
327
731
4,011
18,449 $
2,140
4,643
2,026
2,024
1,261
1,406
2,777
1,034
17,311
68
Note 6. Property and Equipment
Property and equipment consisted of the following:
(in thousands)
Land and land interests(1) ............................................................................................. $
Buildings and leasehold improvements .......................................................................
Equipment and other(2) .................................................................................................
Gross property and equipment ...........................................................................
Accumulated depreciation ......................................................................................
Property and equipment, net ............................................................................... $
December 31,
2016
2015
31,670 $
185,987
326,868
544,525
(264,667 )
279,858 $
29,032
135,381
270,957
435,370
(246,131)
189,239
(1) Land and land interests include certain leasehold interests in land within Pursuit for which the Company is considered to
have perpetual use rights. As of December 31, 2016 and 2015, the carrying amount of these leasehold interests was $7.9
million and $7.7 million, respectively. These land interests are not subject to amortization.
(2) Equipment and other includes capitalized costs incurred in developing or obtaining internal and external use software. As
of December 31, 2016 and 2015, the net carrying amount of capitalized software was $11.9 million and $12.3 million,
respectively.
Depreciation expense was $33.6 million for 2016 and $28.1 million for 2015 and 2014.
During 2016, 2015, and 2014, non-cash increases to property and equipment related to assets acquired under capital
leases was $1.2 million, $1.0 million, and $0.9 million, respectively. In addition, during 2016, 2015, and 2014, non-cash
increases to property and equipment in accounts payable and accrued liabilities was $0.9 million, $2.3 million, and $0.8
million, respectively.
Viad recorded impairment charges of $0.2 million, $0.1 million, and $0.9 million during 2016, 2015, and 2014,
respectively. The 2016 amount related to the write-down of certain software and buses in Pursuit. The 2015 amount related to
the write-off of certain software in Pursuit. The 2014 amount related to the write-off of certain internally developed software
at GES. These impairment losses are included in other impairment charges in Viad’s Consolidated Statements of Operations.
The Mount Royal Hotel in Banff, Canada suffered fire damage on December 29, 2016 and has been closed until further
notice. As a result of the fire, an impairment loss of $2.2 million was recorded against the net book value of the hotel assets.
The losses related to the fire are covered by Viad’s property and business interruption insurance. Accordingly, the Company
recorded an offsetting impairment recovery of $2.2 million. Assessment of the full value of the loss is ongoing.
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 ......................................................................................................
Other ............................................................................................................................
Other investments and assets ............................................................................... $
December 31,
2016
2015 (1)
23,197 $
10,463
4,050
2,062
4,525
44,297 $
21,970
5,979
4,250
2,192
3,240
37,631
(1)
In accordance with ASU 2015-03, unamortized debt issuance costs are reflected as a direct deduction from the carrying
amount of the related debt. The Company adopted the new guidance retrospectively to all prior periods presented in the
consolidated financial statements. As a result, $1.6 million of unamortized debt issuance costs were reclassified from
other investments and assets to a reduction of long-term debt on the December 31, 2015 consolidated balance sheet.
69
Note 8. Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill were as follows:
(in thousands)
Balance at December 31, 2014 ................................................ $
Purchase price allocation adjustments .......................................
Foreign currency translation adjustments ..................................
Disposals(1) .................................................................................
Balance at December 31, 2015 ................................................
Business acquisitions .................................................................
Foreign currency translation adjustments ..................................
Balance at December 31, 2016 ................................................ $
GES U.S.
International
Pursuit
GES
110,618 $
1,682
—
—
112,300
35,977
—
148,277 $
42,221 $
475
(3,488)
(573)
38,635
—
(4,175)
34,460 $
41,358 $
—
(7,070 )
—
34,288
35,681
1,316
71,285 $
Total
194,197
2,157
(10,558)
(573)
185,223
71,658
(2,859)
254,022
(1) During 2015, the Company partially disposed of certain operations associated with a venue services contract within
GES International. 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)
GES:
U.S. ......................................................................................................................... $
International:
GES EMEA.......................................................................................................
GES Canada ......................................................................................................
Total GES ...................................................................................................................
Pursuit:
Brewster Travel Canada .........................................................................................
Alaska Collection ...................................................................................................
Glacier Park, Inc. ....................................................................................................
FlyOver Canada......................................................................................................
Total Pursuit ..............................................................................................................
Total Goodwill ............................................................................................................ $
December 31,
2016
2015
148,277 $
112,300
27,694
6,766
182,737
32,587
3,184
1,268
34,246
71,285
254,022 $
32,064
6,571
150,935
29,836
3,184
1,268
—
34,288
185,223
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.
GES U.S. goodwill is assigned to and tested at the operating segment level. GES International goodwill is assigned to
and tested based on the segment’s geographical operations (GES EMEA and GES Canada). Pursuit’s impairment testing is
performed at the reporting unit level (Brewster Travel Canada, the Alaska Collection, Glacier Park, Inc., and FlyOver
Canada).
As a result of the Company’s most recent impairment analysis performed as of October 31, 2016, 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 GES’ reporting units in the U.S., GES EMEA, and GES Canada was 153 percent, 137 percent,
and 165 percent, respectively. For the Brewster Travel Canada, the Alaska Collection, and the Glacier Park, Inc. reporting
units, the excess of the estimated fair value over the carrying value was 132 percent, 70 percent, and 14 percent, respectively.
FlyOver Canada was acquired on December 29, 2016 and was not included in the October 31, 2016 impairment analysis.
70
Viad’s accumulated goodwill impairment as of December 31, 2016 and 2015 was $229.7 million for both periods.
Other intangible assets consisted of the following:
(in thousands)
Amortized intangible assets:
December 31, 2016
December 31, 2015
Gross
Carrying
Value
Accumulated
Amortization
Net
Carrying
Value
Gross
Carrying
Value
Accumulated
Amortization
Net
Carrying
Value
Customer contracts and relationships ............... $ 67,762 $
9,315
Operating contracts and licenses ......................
8,324
Tradenames ......................................................
5,190
Non-compete agreements .................................
886
Other .................................................................
Total amortized intangible assets ....................... 91,477
Unamortized intangible assets:
(14,345) $ 53,417 $ 38,342 $
665
8,663
1,322
6,884
1,516
3,821
898
428
42,743
(18,264) 73,213
(652)
(1,440)
(1,369)
(458)
(7,814) $ 30,528
393
459
860
622
(9,881) 32,862
(272)
(863)
(656)
(276)
Business licenses ..............................................
460
Other intangible assets ........................................ $ 91,937 $
—
460
460
(18,264) $ 73,673 $ 43,203 $
—
460
(9,881) $ 33,322
Intangible asset amortization expense was $9.2 million, $7.2 million, and $2.7 million for the years ended
December 31, 2016, 2015, and 2014, respectively. The weighted-average amortization period of customer contracts and
relationships, tradenames, operating contracts and licenses, non-compete agreements, and other amortizable intangible assets
is approximately 9.5 years, 7.4 years, 27.1 years, 3.0 years, and 3.6 years, respectively. The estimated future amortization
expense related to amortized intangible assets held at December 31, 2016 is as follows:
(in thousands)
Year ending December 31,
2017 ............................................................................................................................................................ $
2018 ............................................................................................................................................................
2019 ............................................................................................................................................................
2020 ............................................................................................................................................................
2021 ............................................................................................................................................................
Thereafter ...................................................................................................................................................
Total ................................................................................................................................................................ $
12,207
10,754
9,712
8,241
7,277
25,022
73,213
71
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 ..................................................................................................
Current portion of pension liability ........................................................................
Accrued restructuring .............................................................................................
Deferred rent ...........................................................................................................
Accrued rebates ......................................................................................................
Accrued professional fees .......................................................................................
Accrued income tax payable...................................................................................
Other taxes ..............................................................................................................
Other .......................................................................................................................
Total continuing operations ......................................................................................
Discontinued operations:
Environmental remediation liabilities.....................................................................
Self-insured liability accrual ...................................................................................
Other .......................................................................................................................
Total discontinued operations ...................................................................................
Total other current liabilities .................................................................................... $
December 31,
2016
2015
5,941 $
4,279
2,624
2,119
1,963
1,924
1,535
1,078
794
758
4,210
2,413
29,638
492
162
98
752
30,390 $
6,891
4,772
3,892
2,103
1,768
1,757
548
752
751
986
1,465
2,537
28,222
295
200
521
1,016
29,238
Note 10. Other Deferred Items and Liabilities
Other deferred items and liabilities consisted of the following:
(in thousands)
Continuing operations:
Self-insured liability ............................................................................................... $
Self-insured excess liability ....................................................................................
Accrued compensation ...........................................................................................
Deferred rent ...........................................................................................................
Foreign deferred tax liability ..................................................................................
Accrued restructuring .............................................................................................
Other .......................................................................................................................
Total continuing operations ......................................................................................
Discontinued operations:
Self-insured liability ...............................................................................................
Environmental remediation liabilities.....................................................................
Accrued income taxes .............................................................................................
Other .......................................................................................................................
Total discontinued operations ...................................................................................
Total other deferred items and liabilities ................................................................. $
December 31,
2016
2015
12,981 $
10,463
8,514
5,271
2,264
1,858
1,300
42,651
3,748
3,091
1,045
199
8,083
50,734 $
13,662
5,979
7,612
5,607
2,384
519
1,262
37,025
3,986
4,177
1,151
997
10,311
47,336
72
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 2.6% and 2.4% weighted-average interest
rate at December 31, 2016 and 2015, respectively, due through 2019 (1) ................. $
Brewster Inc. revolving credit facility 2.7% weighted-average interest rate at
December 31, 2016, due through 2017 (1) .................................................................
Less unamortized debt issuance costs (2) ......................................................................
Total debt ....................................................................................................................
Capital lease obligations, 4.9% and 6.1% weighted-average interest rate at
December 31, 2016 and 2015, respectively, due through 2018 ................................
Total debt and capital lease obligations ...................................................................
Current portion (3) ...................................................................................................
Long-term debt and capital lease obligations .......................................................... $
December 31,
2016
2015
212,750 $
127,500
36,456
(1,464 )
247,742
1,469
249,211
(174,968 )
74,243 $
—
(1,572)
125,928
1,475
127,403
(34,554)
92,849
(1)
(2)
(3)
Represents the weighted-average interest rate in effect at the respective periods for the revolving credit facilities and
term loan borrowings, including any applicable margin. The interest rates do not include amortization of debt issuance
costs or commitment fees.
In accordance with ASU 2015-03, unamortized debt issuance costs are reflected as a direct deduction from the carrying
amount of the related debt. The Company applied the new guidance retrospectively to all prior periods presented in the
consolidated financial statements. As a result, $1.6 million of unamortized debt issuance costs were reclassified from
other investments and assets to a reduction in long-term debt on the December 31, 2015 consolidated balance sheet.
Borrowings under the revolving credit facilities are classified as current because all borrowed amounts are due within
one year.
Effective December 22, 2014, Viad entered into a $300 million Amended and Restated Credit Agreement (the “Credit
Agreement”). 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. 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, GES Event Intelligence
Services, Inc., and CATC, including 65 percent of the capital stock of top-tier foreign subsidiaries. ON Services will also
provide Viad’s lenders with a first perfected security interest in all of ON Services’ personal property upon the execution of a
subsidiary security agreement by the lenders and ON Services.
Effective February 24, 2016, Viad executed an amendment (the “Credit Agreement Amendment”) to the Credit
Agreement. The Credit Agreement Amendment modified the terms of the financial covenants and the negative covenants
related to acquisitions, restricted payments, and indebtedness. The overall maximum leverage ratio and minimum fixed
charge coverage ratio are 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 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 not 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 allowed as long as the Company’s pro forma leverage ratio is less than or
equal to 3.00 to 1.00. Significant other 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, 2016, the fixed charge coverage ratio was 2.86 to 1.00, the leverage ratio was 1.92 to 1.00, and
Viad was in compliance with all covenants under the Credit Agreement.
73
Effective December 28, 2016, Brewster, Inc., part of Pursuit, entered into a credit agreement (the “Brewster Credit
Agreement”) with a $38 million revolving credit facility (the “Brewster Revolving Credit Facility”). Loans under the
Brewster Credit Agreement were used in connection with the Company’s acquisition of FlyOver Canada. Additional loan
proceeds will be used for potential future acquisitions in Canada and other general corporate purposes of Brewster Inc. and
has a maturity date of December 28, 2017. Brewster Inc.’s lender will have a first perfected security interest in all of the
personal property of Brewster Inc. under the Brewster Revolving Credit Facility and a guaranty from Brewster Travel Canada
Inc., the immediate parent of Brewster Inc., (secured by its present and future personal property), Viad, and all current or
future subsidiaries of Viad that are required to be guarantors under Viad’s Credit Agreement.
As of December 31, 2016, Viad’s total debt and capital lease obligations were $249.2 million, consisting of outstanding
borrowings under the Term Loan of $93.8 million, under the Revolving Credit Facility of $119.0 million, under the Brewster
Revolving Credit Facility of $36.5 million, and capital lease obligations of $1.5 million, offset in part by unamortized debt
issuance costs of $1.5 million. As of December 31, 2016, Viad had $54.7 million of capacity remaining under the Revolving
Credit Facility, reflecting borrowings of $119.0 million and $1.3 million in outstanding letters of credit. As of December 31,
2016, Brewster Inc. has $1.5 million of capacity remaining under the Brewster Revolving Credit Facility.
Borrowings under the Revolving Credit Facility (of which GES, GES Event Intelligence Services, Inc., and CATC 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. ON Services will become a guarantor for Viad’s borrowings
under the Revolving Credit Facility upon the execution of a guaranty agreement by the lenders and ON Services.
As of December 31, 2016, 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
maximum potential amount of future payments that Viad would be required to make under all guarantees existing as of
December 31, 2016 would be $9.3 million. These guarantees relate to facilities leased by the Company through September
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, 2016 are as follows:
(in thousands)
Year ending December 31,
2017 ............................................................................................................................. $
2018 .............................................................................................................................
2019 .............................................................................................................................
2020 .............................................................................................................................
2021 .............................................................................................................................
Total ....................................................................................................................... $
Less: Amount representing interest ...................................................................
Present value of minimum lease payments.........................................................
Revolving Credit
Agreement
Capital Lease
Obligations
174,206 $
18,750
56,250
—
—
249,206 $
$
832
662
76
8
7
1,585
(116)
1,469
As of December 31, 2016, the gross amount of assets recorded under capital leases and accumulated amortization was
$3.3 million and $1.7 million, respectively. As of December 31, 2015, 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 3.1 percent, 3.2 percent and 4.0 percent for 2016, 2015, and 2014, respectively. The estimated fair value of total debt was
$252.8 million and $113.9 million as of December 31, 2016 and 2015, 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.
Cash paid for interest on debt for 2016, 2015, and 2014 was $5.5 million, $4.2 million, and $1.7 million, respectively.
74
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.
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 and measures the earnout contingent consideration liability at fair value on a recurring basis using
Level 3 inputs. The fair value information related to these assets and liability 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,
2016
Money market funds(1) ......................................................... $
Other mutual funds(2) ...........................................................
Total assets at fair value on a recurring basis ...................... $
Earnout contingent consideration liability(3) ........................ $
Total liabilities at fair value on a recurring basis ................ $
118 $
2,062
2,180 $
— $
— $
118 $
2,062
2,180 $
— $
— $
— $
—
— $
— $
— $
—
—
—
—
—
(in thousands)
Assets:
December 31,
2015
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)
Money market funds(1) ......................................................... $
Other mutual funds(2) ...........................................................
Total assets at fair value on a recurring basis ...................... $
118 $
2,192
2,310 $
118 $
2,192
2,310 $
— $
—
— $
—
—
—
(1) Money market funds are included in “Cash and cash equivalents” in the consolidated balance sheets. 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.
(2) Other mutual funds are included in “Other investments and assets” in the consolidated balance sheets. These investments
are classified as available-for-sale and were recorded at fair value. As of December 31, 2016 and 2015, there were
unrealized gains of $0.7 million ($0.4 million after-tax) and $0.6 million ($0.3 million after tax), respectively, which
were included in “Accumulated other comprehensive income (loss)” (“AOCI”) in the consolidated balance sheets.
(3) The fair value measurement of the earnout contingent consideration obligation relates to the acquisition of ON Services
in August 2016. As of the acquisition transaction date, the fair value measurement was estimated to be $540,000. As of
December 31, 2016, the fair value measurement was determined to be zero as ON Services did not meet its financial
target. Changes in the value of the obligation are recorded as income or expense in Viad’s Consolidated Statements of
Operations.
The carrying values 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.
75
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.
2016
Year Ended December 31,
2015
2014
42,269 $
(571)
41,698 $
19,990
187
20,177
26,606 $
(385 )
26,221 $
19,797
184
19,981
2.09 $
2.09 $
1.32 $
1.32 $
52,354
(970)
51,384
19,804
329
20,133
2.59
2.59
Options to purchase 500 shares, 4,000 shares, and 26,000 shares of common stock were outstanding during the years
ended December 31, 2016, 2015, and 2014, respectively, but were not included in the computation of dilutive shares
outstanding because the effect would be anti-dilutive.
Note 14. 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, 2016.
Note 15. Accumulated Other Comprehensive Income
Changes in accumulated other comprehensive income (“AOCI”) by component are as follows:
(in thousands)
Balance at December 31, 2014 ......................................... $
Unrealized Gains
on Investments
Cumulative
Foreign Currency
Translation
Adjustments
Unrecognized Net
Actuarial Loss
and Prior Service
Credit, Net
471 $
12,415 $
(13,280) $
Accumulated
Other
Comprehensive
Income (Loss)
(394)
Other comprehensive income (loss) before
reclassifications .............................................................
Amounts reclassified from AOCI, net of tax .................
Net other comprehensive income (loss) ...........................
Balance at December 31, 2015 ......................................... $
Other comprehensive income (loss) before
reclassifications .............................................................
Amounts reclassified from AOCI, net of tax .................
Net other comprehensive income (loss) ...........................
Balance at December 31, 2016 ......................................... $
(55)
(70)
(125)
346 $
135
(60)
75
421 $
(35,672)
—
(35,672)
(23,257) $
(5,827)
—
(5,827)
(29,084) $
1,546
469
2,015
(11,265) $
—
537
537
(10,728) $
(34,181)
399
(33,782)
(34,176)
(5,692)
477
(5,215)
(39,391)
76
The following table presents information about reclassification adjustments out of AOCI:
(in thousands)
Unrealized gains on investments ..................................................... $
Tax effect .........................................................................................
$
Recognized net actuarial loss(1) ........................................................ $
Amortization of prior service credit(1) ..............................................
Tax effect .........................................................................................
$
Year Ended December 31,
2015
2016
Affected Line Item in the
Statement Where Net
Income is Presented
(97) $
37
(60) $
1,440 $
(575)
(328)
537 $
(112 ) Interest income
42 Income taxes
(70 )
1,180
(552 )
(159 ) Income taxes
469
(1) Amount included in pension expense. Refer to Note 17 – Pension and Postretirement Benefits.
Note 16. 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.................... $
2016
Year Ended December 31,
2015
2014
33,611 $
31,118
64,729 $
35,571 $
2,364
37,935 $
33,349
7,938
41,287
Significant components of the income tax provision from continuing operations are as follows:
(in thousands)
Current:
United States:
2016
Year Ended December 31,
2015
2014
Federal ........................................................................................... $
State ...............................................................................................
Foreign ................................................................................................
Total current .............................................................................................
Deferred:
United States:
Federal ...........................................................................................
State ...............................................................................................
Foreign ................................................................................................
Total deferred............................................................................................
Income tax expense ................................................................................. $
3,685 $
1,716
8,177
13,578
8,427
(598)
(157)
7,672
21,250 $
(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
77
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 2014 – 2016 is as follows:
2016
(in thousands)
Computed income tax expense at statutory federal
income tax rate of 35% .......................................... $ 22,655
292
State income taxes, net of federal provision ..........
Foreign tax rate differentials ..................................
(882)
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 ...............................................................
(373)
1,230
—
(2,406)
734
Income tax expense ......................................... $ 21,250
Year Ended December 31,
2015
2014
35.0% $ 13,277
1,713
(1,181)
0.5%
(1.4)%
35.0 % $ 14,450
227
(1,262)
4.5 %
(3.1 )%
(0.6)%
1.9%
—
(3.7)%
1.1%
(948)
(944)
—
(1,557)
133
32.8% $ 10,493
—
(2,168)
(2.5 )%
(2.5 )% (11,650)
(133)
(1,401)
2,046
109
(4.1 )%
0.4 %
27.7 % $
35.0%
0.5%
(3.1)%
(5.3)%
(28.2)%
(0.3)%
(3.4)%
5.0%
0.2%
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,
2016
2015
11,380 $
22,868
10,235
5,023
3,790
5,020
58,316
(3,998 )
(1,972 )
52,346
(3,299 )
(5,642 )
(4,535 )
(557 )
(14,033 )
2,852
41,165 $
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
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,
2016 and 2015, Viad had gross deferred tax assets of $58.3 million and $64.6 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, 2016, the Company has foreign tax credit carryforwards of $2.3 million, of which $2.2 million are
U.S. foreign tax credits and $0.1 million are United Kingdom foreign tax credits. The U.S. foreign tax credits are subject to a
10-year carryforward period. Of the $2.2 million, less than $0.1 million will expire in 2021, $0.3 million will expire in 2022,
and $1.9 million will expire in 2023. The United Kingdom foreign tax credits may be carried forward indefinitely. As of
December 31, 2016, Viad had tax credit carryforwards related to alternative minimum tax of $9.1 million that may be carried
forward indefinitely.
As of December 31, 2016 and 2015, Viad had gross state and foreign net operating loss carryforwards of $63.0 million
and $56.0 million, respectively, for which the Company had deferred tax assets of $5.0 million and $4.3 million, respectively.
The state and foreign net operating loss carryforwards expire on various dates from 2017 through 2035. During 2016, the
Company increased its valuation allowance related to state and foreign net operating loss carryforwards by $1.2 million and
78
during 2015, decreased it by $0.8 million. As of December 31, 2016 and 2015, Viad had a valuation allowance of $4.0
million and $2.8 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 operations outside of the United
States. As of December 31, 2016, the incremental unrecognized tax liability (net of estimated foreign tax credits) related to
those undistributed earnings was approximately $6.8 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 the income tax provision for positions taken on prior returns 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, 2016 and 2015, the
Company had liabilities associated with uncertain tax positions (including interest and penalties) of $2.7 million and $1.5
million, respectively. Of this amount, $1.2 million was classified as short-term liabilities, as they are expected to be released
within the next twelve months and the remainder was classified as non-current liabilities.
During 2016, the Company recognized a net increase of $1.3 million in the liability for continuing operations uncertain
tax positions and $0.1 million in accrued interest and penalties related to continuing operations positions. Uncertain tax
positions are classified as a component of income tax expense and the impact of the change in uncertain tax positions was
less than $0.1 million as of December 31, 2016. The Company expects $0.2 million of the continuing operations uncertain
tax positions to be resolved or settled during 2017.
The Company had accrued liabilities for uncertain tax positions for discontinued operations of $0.6 million and accrued
interest and penalties of $0.4 million and $0.5 million as of December 31, 2016 and 2015, respectively. The decrease in
interest accrued was due to the change in the interest rate applied. 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
expects $1.0 million of 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, 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 ...............................................................
Additions for tax positions taken in prior years ........................................
Reductions for lapse of applicable statutes ...............................................
Balance at December 31, 2016 ............................................................... $
Continuing
Operations
Discontinued
Operations
Total
736 $
1,019
(472)
1,283
43
(666)
(353)
307
1,295
(43)
1,559 $
636 $
—
—
636
—
—
—
636
—
—
636 $
1,372
1,019
(472)
1,919
43
(666)
(353)
943
1,295
(43)
2,195
On December 7, 2016, the U.S. Treasury and the Internal Revenue Service issued final and temporary regulations
under Internal Revenue Code §987 to address the tax impact of foreign currency translation gains or losses arising from
foreign branch operations that operate in a currency other than the U.S. dollar. The Company evaluated the impact of the
regulations under the “Fresh Start Transition Method” described in the regulations. The resulting increase to the deferred tax
asset was recorded as a benefit to income tax expense.
79
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 2013 through 2016 U.S. federal tax years and various state tax years from 2012 through 2016 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, which will expire in 2017. Tax years 2011 through 2016 remain subject
to examination by various foreign taxing jurisdictions.
During 2016, 2015, and 2014, cash paid for income taxes was $14.1 million, $10.1 million, and $8.4 million,
respectively.
Note 17. 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
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:
2016
December 31,
2015
2014
98 $
1,032
(256)
423
1,297
101 $
1,018
(380 )
492
1,231
87
1,079
(436)
407
1,137
Net actuarial loss (gain) .......................................................................
1
(963 )
3,418
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) ............................................................... $
(423)
(422)
(492 )
(1,455 )
(407)
3,011
875 $
(224 ) $
4,148
80
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 .........................................................................................
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) ............................................................... $
2016
December 31,
2015
2014
99 $
573
(503)
295
464
(790)
73
(295)
503
(509)
152 $
619
(552 )
528
747
(1,248 )
3
(528 )
552
(1,221 )
(45) $
(474 ) $
129
640
(593)
166
342
1,045
(1,283)
(166)
593
189
531
The following table indicates the funded status of the plans as of December 31:
(in thousands)
Change in benefit obligation:
Funded Plans
Unfunded Plans
Postretirement
Benefit Plans
2016
2015
2016
2015
2016
2015
Benefit obligation at beginning of year ............. $ 14,906 $ 16,012 $ 10,049 $ 11,127 $ 14,573 $ 16,235
152
Service cost .......................................................
619
Interest cost .......................................................
(1,248)
Actuarial adjustments ........................................
3
Plan amendments ...............................................
(1,188)
Benefits paid ......................................................
14,573
—
629
240
—
(748)
Benefit obligation at end of year .......................... 15,027
Change in plan assets:
99
573
(790)
73
(909)
10,049 13,619
—
616
(1,013)
—
(709)
14,906
97
403
(221)
—
(503)
9,825
101
402
(1,072 )
—
(509 )
—
Fair value of plan assets at beginning of year ... 10,479
—
273
Actual return on plan assets ...............................
1,188
412
Company contributions .....................................
(1,188)
(748)
Benefits paid ......................................................
Fair value of plan assets at end of year ............... 10,416
—
Funded status at end of year ................................ $ (4,611) $ (4,427) $ (9,825) $ (10,049 ) $ (13,619) $ (14,573)
11,198
(742)
732
(709)
10,479
—
—
509
(509 )
—
—
—
909
(909)
—
—
—
503
(503)
—
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 ........................................... $
2016
2015
2016
2015
2016
2015
— $
4,611
4,611 $
— $
4,427
4,427 $
1,122
699 $
9,126
13,451
9,825 $ 10,049 $ 13,619 $ 14,573
645 $ 1,094 $
9,404 12,525
Funded Plans
Unfunded Plans
Postretirement
Benefit Plans
81
Amounts recognized in accumulated other comprehensive income as of December 31 consisted of:
Funded Plans
Unfunded Plans
2015
2016
Postretirement
Benefit Plans
Total
2016
Total
2015
2016
(in thousands)
Net actuarial loss....................................... $ 9,090 $ 9,202 $ 2,496 $ 2,806 $ 2,710 $ 3,795 $ 14,296 $15,803
— (1,598) (2,173 ) (1,598) (2,173)
Prior service credit .................................... —
Subtotal .............................................. 9,090 9,202 2,496 2,806 1,112 1,622 12,698 13,630
(422)
(615 ) (4,816) (5,169)
690 $ 1,007 $ 7,882 $ 8,461
(947) (1,064)
Total .................................................... $ 5,643 $ 5,712 $ 1,549 $ 1,742 $
Less tax effect ........................................... (3,447) (3,490)
— —
2015
2016
2015
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 2017, is approximately $0.2 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 2017 is approximately $0.4 million.
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 2017 is approximately $0.1 million and $0.4
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, 2016
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobserved
Inputs
(Level 3)
Quoted Prices
in Active
Markets
(Level 1)
Fixed income securities ........................................................ $
Equity securities ...................................................................
Cash ......................................................................................
Other .....................................................................................
Total .......................................................................................... $
5,352 $
4,580
280
204
10,416 $
5,352
4,580
280
—
10,212
$
$
— $
—
—
204
204 $
—
—
—
—
—
(in thousands)
Domestic pension plans:
Total
Fair Value Measurements at December 31, 2015
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobserved
Inputs
(Level 3)
Quoted Prices
in Active
Markets
(Level 1)
Fixed income securities ........................................................ $
Equity securities ...................................................................
Cash ......................................................................................
Other .....................................................................................
Total .......................................................................................... $
5,453 $
4,459
357
210
10,479 $
5,453
4,459
357
—
10,269
$
$
— $
—
—
210
210 $
—
—
—
—
—
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.
82
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.
The following pension and postretirement benefit payments, which reflect expected future service, as appropriate, are
expected to be paid:
(in thousands)
2017 .......................................................................................................... $
2018 .......................................................................................................... $
2019 .......................................................................................................... $
2020 .......................................................................................................... $
2021 .......................................................................................................... $
2022-2026 ................................................................................................. $
Foreign Pension Plans
Funded
Plans
Unfunded
Plans
Postretirement
Benefit
Plans
890 $
907 $
933 $
1,001 $
963 $
4,941 $
713 $
738 $
749 $
751 $
736 $
3,405 $
1,116
1,105
1,098
1,078
1,039
4,750
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) ............................................................... $
2016
December 31,
2015
2014
488 $
488
(558)
162
580
158
(162)
(4)
503 $
505
(583 )
160
585
182
(160 )
22
413
631
(640)
145
549
361
145
506
576 $
607 $
1,055
83
The following table represents the funded status of the plans as of December 31:
(in thousands)
Change in benefit obligation:
Funded Plans
Unfunded Plans
2016
2015
2016
2015
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 ................................................... $
9,744 $
488
400
395
(818)
279
10,488
9,705
617
795
(818)
277
10,576
88 $
12,016 $
503
415
(176)
(1,115)
(1,899)
9,744
11,747
377
566
(1,115)
(1,870)
9,705
(39) $
2,470 $
—
87
105
(177 )
1
2,486
—
—
177
(177 )
—
—
(2,486 ) $
2,756
—
89
178
(179)
(374)
2,470
—
—
179
(179)
—
—
(2,470)
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)
Non-current assets ............................................................................... $
Other current liabilities ........................................................................
Non-current liabilities ..........................................................................
Net amount recognized ........................................................................ $
Funded Plans
2016
2015
Unfunded Plans
2016
2015
(88) $
—
—
(88) $
— $
—
39
39 $
— $
170
2,316
2,486 $
—
162
2,308
2,470
The net actuarial losses for the foreign funded plans as of December 31, 2016 and 2015 were $3.3 million ($2.5 million
after-tax) and $3.3 million ($2.5 million after-tax), respectively. The net actuarial losses for the foreign unfunded plans as of
December 31, 2016 and 2015 were $0.4 million ($0.3 million after-tax) and $0.4 million ($0.3 million after-tax),
respectively.
The fair value information related to the foreign pension plans’ assets is summarized in the following tables:
(in thousands)
Assets:
December 31,
2016
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)
Fixed income securities ........................................................ $
Equity securities ...................................................................
Other .....................................................................................
Total .......................................................................................... $
4,082 $
4,518
1,976
10,576 $
4,082 $
4,130
1,976
10,188 $
— $
388
—
388 $
—
—
—
—
84
(in thousands)
Assets:
December 31,
2015
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)
Fixed income securities ........................................................ $
Equity securities ...................................................................
Other .....................................................................................
Total .......................................................................................... $
4,372 $
4,908
425
9,705 $
4,372 $
4,533
425
9,330 $
— $
375
—
375 $
The following payments, which reflect expected future service, as appropriate, are expected to be paid:
(in thousands)
2017 ............................................................................................................................. $
2018 ............................................................................................................................. $
2019 ............................................................................................................................. $
2020 ............................................................................................................................. $
2021 ............................................................................................................................. $
2022-2026 .................................................................................................................... $
Funded
Plans
Unfunded
Plans
366
$
385 $
387 $
390 $
407 $
2,551 $
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:
—
—
—
—
170
169
169
169
168
833
(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 ............................................................. $
Contributions
Domestic Plans
Funded Plans
Unfunded Plans
2016
2015
2016
2015
15,027 $
15,027 $
10,416 $
14,906 $
14,906 $
10,479 $
9,825 $
9,737 $
— $
10,049
9,934
—
Foreign Plans
Funded Plans
Unfunded Plans
2016
2015
2016
2015
10,488 $
9,906 $
10,576 $
9,744 $
9,186 $
9,705 $
2,486 $
2,486 $
— $
2,470
2,470
—
In aggregate for both the domestic and foreign plans, the Company anticipates contributing $1.6 million to the funded
pension plans, $0.9 million to the unfunded pension plans, and $1.1 million to the postretirement benefit plans in 2017.
Weighted-Average Assumptions
Weighted-average assumptions used to determine benefit obligations as of December 31 were as follows:
Domestic Plans
Funded Plans
2016
2015
Unfunded Plans
2015
2016
Postretirement
Benefit Plans
Foreign Plans
2016
2015
2016
2015
Discount rate ............................................. 4.12% 4.37% 3.99% 4.25% 4.08% 4.30 % 3.52% 3.76%
Rate of compensation increase ................. N/A N/A 3.00% 3.00% N/A N/A 2.34% 2.31%
85
Weighted-average assumptions used to determine net periodic benefit costs as of December 31 were as follows:
Domestic Plans
Funded Plans
2016
2015
Unfunded Plans
2015
2016
Postretirement
Benefit Plans
Foreign Plans
2016
2015
2016
2015
Discount rate ............................................. 4.33% 3.97% 4.25% 3.90% 4.30% 4.00 % 3.77% 3.86%
Expected return on plan assets .................. 2.25% 3.33% N/A N/A 0.00% 0.00 % 4.53% 4.51%
Rate of compensation increase ................. N/A N/A 3.00% 3.00% N/A N/A 2.34% 2.31%
The assumed health care cost trend rate used in measuring the December 31, 2016 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 2026 and
remaining at that level thereafter. 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.
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, 2016 by approximately $1.3 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, 2016
by approximately $1.1 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 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 2016 is outlined in the following table. Unless otherwise
noted, the most recent Pension Protection Act zone status available in 2016 and 2015 relates to the plan’s year end as of
December 31, 2015 and 2014, 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.
86
Pension
Protection Act
Zone Status
FIP/RP
Status
Pending/
Implemented
Plan
No.
2016
2015
Expiration
Date of
Collective-
Bargaining
Agreement(s)
Surcharge
Paid
Viad Contributions
2015
2014
2016
EIN
91-
6145047
1 Green Green
No
$ 6,684 $ 5,632 $ 6,369 No
3/31/2020
95-
6376874
1 Green Green
No
2,805 2,485 2,481 No
8/31/2017
36-
6130207
1 Green Yellow
Yes
2,532 1,887 1,946 No
5/31/2019
88-
6023284
1 Green Green
No
1,402 1,150 1,457 No
6/16/2018
36-
1416355
11 Red
Red
Yes
1,203
502
993 Yes
6/30/2019
36-
6044243
1 Red
Red
Yes
1,151
948 1,018 No
12/31/2018
51-
6030753
2 Green Green
No
845 1,190 1,081 No
6/4/2017
95-
6042875
1 Green Green
No
791
750
885 No
6/30/2018
95-
6392774
1 Yellow Yellow
Yes
701
835
768 Yes
continuous
04-
6372430
1 Red
Red
Yes
552
381
571 No
3/31/2017
94-
6278490
1 Green Green
No
526
541
439 No
3/31/2018
3,585 4,259 3,087
22,777 20,560 21,095
2,995 1,428 2,057
$25,772 $21,988 $ 23,152
(in thousands)
Pension Fund:
Western Conference of
Teamsters Pension Plan
Southern California
Local 831—Employer
Pension Fund(1) .............
Chicago Regional
Council of Carpenters
Pension Fund ................
IBEW Local Union No
357 Pension Plan A .......
Machinery Movers
Riggers & Mach Erect
Local 136
Supplemental
Retirement Plan(1) .........
Central States,
Southeast and
Southwest Areas
Pension Plan .................
Electrical Contractors
Assoc. Chicago Local
Union 134, IBEW Joint
Pension Trust of
Chicago Plan #2 ............
Southwest Carpenters
Pension Trust ................
Southern California
IBEW-NECA Pension
Fund ..............................
New England
Teamsters & Trucking
Industry Pension ...........
Sign Pictorial &
Display Industry
Pension Plan(1)...............
All other funds(2) ...........
Total contributions to
defined benefit plans .....
Total contributions to
other plans.....................
Total contributions to
multi-employer plans ....
(1)
(2)
The Company contributed more than 5 percent of total plan contributions for the 2015 and 2014 plan years based on
the plans’ Form 5500s.
Represents participation in 39 pension funds during 2016.
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 $3.9 million, $3.7 million, and $3.3 million for 2016, 2015, and 2014, respectively. Matching
contributions are funded from shares of Viad common stock held in treasury.
87
Note 18. Restructuring Charges
GES Consolidation
The Company has taken certain restructuring actions designed to reduce the Company’s cost structure primarily within
GES U.S. and GES International, as well as the elimination of certain positions at the corporate office. The Company
implemented a strategic reorganization plan in order to consolidate the separate business units within GES U.S. The
Company also consolidated facilities and streamlined its operations in the United States, the United Kingdom, and Germany.
As a result, the Company recorded restructuring charges in 2016, 2015, and 2014, 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 Pursuit. These charges primarily consist of severance and
related benefits due to headcount reductions and charges related to the downsizing of facilities.
Changes to the restructuring liability by major restructuring activity are as follows:
GES Consolidation
Severance &
Employee
Benefits
Facilities
Other
Restructurings
Severance &
Employee
Benefits
(in thousands)
$
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 ................................................
Restructuring charges.................................................................
Cash payments ...........................................................................
Adjustment to liability ...............................................................
$
Balance at December 31, 2016 ................................................
1,240 $
2,358
(3,055)
—
543
1,767
(1,514)
(45)
751
3,693
(2,170)
—
2,274 $
3,565 $
(828)
(1,376)
(200)
1,161
587
(457)
—
1,291
759
(1,150)
192
1,092 $
893 $
107
(845 )
85
240
602
(601 )
(7 )
234
731
(546 )
(3 )
416 $
Total
5,698
1,637
(5,276)
(115)
1,944
2,956
(2,572)
(52)
2,276
5,183
(3,866)
189
3,782
As of December 31, 2016, the liabilities related to severance and employee benefits are expected to be paid by the end
of 2018. Additionally, the liability related to future lease payments will be paid over the remaining lease terms for GES.
Refer to Note 21 – Segment Information, for information regarding restructuring charges by segment.
Note 19. 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, 2016, 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)
2017 ............................................................................................................................. $
2018 .............................................................................................................................
2019 .............................................................................................................................
2020 .............................................................................................................................
2021 .............................................................................................................................
Thereafter .....................................................................................................................
Total ....................................................................................................................... $
Rental
Payments
Receivable
Under Subleases
25,829 $
21,265
17,671
15,230
7,311
9,404
96,710 $
2,806
2,778
1,865
1,348
851
1,277
10,925
88
Net rent expense under operating leases consisted of the following:
(in thousands)
Minimum rentals ....................................................................................... $
Sublease rentals ........................................................................................
Total rentals, net ................................................................................ $
2016
48,465 $
(2,831)
45,634 $
December 31,
2015
41,564 $
(3,457 )
38,107 $
2014
37,707
(6,884)
30,823
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, 2016, the Company had aggregate purchase obligations of $39.4 million related to
various licensing agreements, consulting and other contracted services.
Note 20. 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, 2016 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. As of December 31, 2016, Viad had recorded environmental remediation liabilities of $3.6 million related to
previously sold 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, 2016, 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
maximum potential amount of future payments that Viad would be required to make under all guarantees existing as of
December 31, 2016 would be $9.3 million. These guarantees relate to facilities leased by the Company through September
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. If the Company was 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 2017 will be renegotiated
in the ordinary course of business without having a material adverse effect on Viad’s operations. The Company entered into
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 GES.
Viad’s businesses contribute to various multi-employer pension plans based on obligations arising under collective-
bargaining agreements covering its union-represented employees. 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
89
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, 2016, 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 $18.9 million as of December 31, 2016 which includes $13.7 million related to
workers’ compensation liabilities and $5.2 million related to general/auto liability claims. Viad has also retained and
provided for certain insurance liabilities in conjunction with previously sold businesses of $3.9 million as of December 31,
2016, 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 $5.0 million, $5.6 million, and $4.8 million for the years
ended December 31, 2016, 2015, and 2014, respectively.
In addition, as of December 31, 2016, Viad recorded insurance liabilities of $10.5 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, $6.9 million related to workers’
compensation liabilities and $3.6 million related to general/auto liability claims which are recorded in other deferred items
and liabilities in Viad’s consolidated balance sheets with a corresponding receivable in other investments.
90
Note 21. 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:
GES:
U.S. ..................................................................................................... $
International........................................................................................
Intersegment eliminations ..................................................................
Total GES ................................................................................................
Pursuit ......................................................................................................
Corporate eliminations (1) .........................................................................
Total revenue .......................................................................................... $
Segment operating income:
GES:
U.S. ..................................................................................................... $
International........................................................................................
Total GES ................................................................................................
Pursuit ......................................................................................................
Segment operating income ....................................................................
Corporate eliminations (1) ...................................................................
Corporate activities .............................................................................
Operating income ...................................................................................
Interest income ...................................................................................
Interest expense ..................................................................................
Restructuring (charges) recoveries:
U.S. .....................................................................................................
International........................................................................................
Pursuit .................................................................................................
Corporate ............................................................................................
Impairment charges:
GES International ...............................................................................
Pursuit .................................................................................................
Income from continuing operations before income taxes................... $
2016
Year Ended December 31,
2015
2014
826,408 $
248,503
(20,172)
1,054,739
153,364
(3,133)
1,204,970 $
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
40,524 $
9,699
50,223
35,705
85,928
(743)
(10,322)
74,863
1,165
(5,898)
(2,893)
(1,559)
(171)
(560)
—
(218)
64,729 $
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
(1)
Represents the elimination of intercompany revenue and profit realized by GES for work completed on renovations for
Pursuit’s Banff Gondola.
91
(in thousands)
Assets(1):
GES:
2016
December 31,
2015
2014
U.S. ...................................................................................................... $
International ........................................................................................
Pursuit .......................................................................................................
Corporate and other ..................................................................................
$
380,951 $
109,705
301,941
77,219
869,816 $
294,618 $
115,494
195,527
85,084
690,723 $
304,727
116,842
199,986
91,424
712,979
Depreciation and amortization:
GES:
U.S. ...................................................................................................... $
International ........................................................................................
Pursuit .......................................................................................................
Corporate and other ..................................................................................
$
Capital expenditures:
GES:
U.S. ...................................................................................................... $
International ........................................................................................
Pursuit .......................................................................................................
Corporate and other(2) ...............................................................................
$
21,473 $
8,092
12,967
211
42,743 $
14,291 $
5,033
31,861
(1,370)
49,815 $
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
(1)
In accordance with ASU 2015-03, unamortized debt issuance costs are reflected as a direct deduction from the carrying
amount of the related debt. The Company adopted the new guidance retrospectively to all prior periods presented in the
consolidated financial statements. As a result, $1.6 million and $2.0 million of unamortized debt issuance costs were
reclassified from other investments and assets to a reduction of long-term debt on the December 31, 2015 and 2014
consolidated balance sheets, respectively.
(2) The 2016 amount includes an intercompany elimination for work completed by GES on renovations for Pursuit’s Banff
Gondola.
Geographic Areas
Viad’s foreign operations are located principally in Canada, the United Kingdom, Germany, the United Arab Emirates
and the Netherlands. GES 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:
United States ....................................................................................... $
EMEA .................................................................................................
Canada .................................................................................................
Total revenue ........................................................................................... $
Long-lived assets(1):
United States ....................................................................................... $
EMEA .................................................................................................
Canada .................................................................................................
Total long-lived assets ............................................................................. $
2016
December 31,
2015
2014
855,304 $
205,028
144,638
1,204,970 $
726,436 $
220,046
142,566
1,089,048 $
718,538
192,674
153,775
1,064,987
182,611 $
37,083
104,461
324,155 $
139,479 $
15,714
71,677
226,870 $
128,437
14,215
78,193
220,845
(1)
In accordance with ASU 2015-03, unamortized debt issuance costs are reflected as a direct deduction from the carrying
amount of the related debt. The Company adopted the new guidance retrospectively to all prior periods presented in the
consolidated financial statements. As a result, $1.6 million and $2.0 million of unamortized debt issuance costs were
reclassified from other investments and assets to a reduction of long-term debt on the December 31, 2015 and 2014
consolidated balance sheets, respectively.
92
Note 22. Common Stock Repurchases
Viad previously 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, Viad repurchased 141,462 shares on the open market for
$3.8 million. No open market repurchases were made during 2016. As of December 31, 2016, 440,540 shares remain
available for repurchase. In addition, during 2016, 2015, and 2014, the Company repurchased 25,432 shares at a cost of $0.7
million, 35,649 shares at a cost of $1.0 million, and 72,996 shares at a cost of $1.8 million, respectively, related to tax
withholding requirements on vested share-based awards.
Note 23. Discontinued Operations
In 2016, Viad recorded losses from discontinued operations of $0.7 million due to reserve adjustments and legal fees
related to previously sold 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, Inc.
On December 31, 2013, Glacier Park, Inc.’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, Inc. This
resulted in a gain of approximately $0.7 million, net of tax.
The following summarizes Glacier Park, Inc.’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)
Costs and expenses ................................................................................................................................ $
Loss from discontinued operations, before income taxes .................................................................
Income tax benefit .................................................................................................................................
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
(93)
(93)
45
(48)
13,343
13,295
(2,825)
10,470
For the year ended December 31, 2014, Viad 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.
The following is a reconciliation of net income attributable to the noncontrolling interest:
(in thousands)
Income from continuing operations .......................................................... $
Income from discontinued operations .......................................................
Net income attributable to noncontrolling interest ........................ $
2016
Year Ended December 31,
2015
2014
526 $
—
526 $
442 $
—
442 $
388
2,825
3,213
93
Note 24. Selected Quarterly Financial Information (Unaudited)
The following table sets forth selected unaudited consolidated quarterly financial information:
2016
2015
Fourth
(in thousands, except per share data)
Quarter
Revenue: ............................................ $ 241,362 $324,747 $382,465 $256,396 $264,396 $ 317,035 $ 255,946 $251,671
Operating income (loss):
Second
Quarter
First
Quarter
Third
Quarter
Fourth
Quarter
Second
Quarter
First
Quarter
Third
Quarter
Ongoing operations (1) .................. $ (6,280 ) $ 34,014 $ 58,917 $ (1,466) $ (1,125) $ 36,286 $ 14,571 $
(1,354)
Corporate activities ......................
(257)
Restructuring charges ...................
Impairment charges ......................
—
Operating income (loss) ............... $ (9,183 ) $ 30,332 $ 54,328 $ (6,015) $ (4,151) $ 33,234 $ 12,960 $
(2,810)
(216)
—
(1,983 )
(1,069 )
—
(2,772)
(1,697)
(120)
(2,932)
(1,519)
(98)
(1,911 )
(992 )
—
(2,707)
(975)
—
Income (loss) from continuing
operations attributable to Viad ........... $ (6,797 ) $ 19,873 $ 34,013 $ (4,136) $ (1,908) $ 22,311 $ 7,393 $
Net income (loss) attributable to Viad $ (6,983 ) $ 19,509 $ 33,792 $ (4,049) $ (2,056) $ 22,389 $ 7,230 $
Basic and Diluted income (loss) per
common share: (2)
4,852
(3,573)
(1,414)
(96)
(231)
(796)
(957)
Continuing operations attributable
to Viad .......................................... $
Net income (loss) attributable to
Viad common stockholders .......... $
(0.34 ) $
0.98 $
1.68 $
(0.21) $
(0.10) $
1.11 $
0.37 $
(0.04)
(0.35 ) $
0.96 $
1.67 $
(0.20) $
(0.10) $
1.12 $
0.36 $
(0.05)
(1)
(2)
Represents revenue less costs of services and products sold.
The sum of quarterly income per share amounts may not equal annual income per share due to rounding.
94
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, 2016 and 2015, 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, 2016. 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, 2016 and 2015, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 2016, 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.
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, 2016, 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 6, 2017 expressed an unqualified opinion on the Company’s internal control over
financial reporting.
/s/ DELOITTE & TOUCHE LLP
Phoenix, Arizona
March 6, 2017
95
VIAD CORP
SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
Allowances for doubtful accounts:
Balance at
Beginning
of Year
Additions
Deductions
Charged to
Charged to
Other
Expense
Accounts Write-Offs Other(1)
Balance at
End of Year
December 31, 2014 ...........................................
December 31, 2015 ...........................................
December 31, 2016 ...........................................
877
1,258
1,593
821
955
1,355
—
574
41
(440 )
(1,162 )
(1,602 )
Deferred tax valuation allowance:
December 31, 2014 ........................................... 12,393
3,295
December 31, 2015 ...........................................
2,837
December 31, 2016 ...........................................
95
—
1,406
2,589 (11,782 )
(860 )
(176 )
402
—
—
(32)
(45)
—
—
(69)
1,258
1,593
1,342
3,295
2,837
3,998
(1) “Other” primarily includes foreign exchange translation adjustments.
96
EXHIBIT INDEX
Exhibit
Number
Exhibit Description
8-K
8-K
8-K
8-K
8-K
DEF
14A
8-K
8-K
8-K
8-K
8-K
Copy of Restated Certificate of Incorporation of Viad Corp, as
amended through July 1, 2004 (SEC File No. 001-11015; SEC
Film No. 04961107)
Copy of Bylaws of Viad Corp, as amended through December
5, 2013
Copy of $300,000,000 Amended and Restated Credit
Agreement, dated as of December 22, 2014
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
Copy of Credit Agreement, dated as of December 28, 2016
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 8-K
8-K
Copy of Joinder to Guaranty, dated as of August 31, 2016
3.A
3.B
4.A1
4.A2
4.A3
4.B1
4.B2
4.B3
10.A1
+
10.A2
+
10.A3
+
10.A4
+
10.B1
+
10.B2
+
10.B3
+
10.B4
+
10.C1
+
10.D1
+
10.D2
+
Copy of Joinder to Amended and Restated Subsidiary Pledge
and Security Agreement, dated as of August 31, 2016
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
Copy of Viad Corp Management Incentive Plan, amended as of
February 27, 2013, pursuant to the 2007 Viad Corp Omnibus
Incentive Plan
Copy of Viad Corp Performance Unit Incentive Plan, effective
as of February 27, 2013, pursuant to the 2007 Viad Corp
Omnibus Incentive Plan
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
Copy of form of Restricted Stock Agreement - Executives,
effective as of December 3, 2014, pursuant to the 2007 Viad
Corp Omnibus Incentive Plan
Copy of form of Restricted Stock Agreement - Executives,
effective as of March 26, 2014, pursuant to the 2007 Viad Corp
Omnibus Incentive Plan
Copy of form of Restricted Stock Agreement - Executives,
effective as of March 23, 2011, pursuant to the 2007 Viad Corp
Omnibus Incentive Plan (SEC File No. 001-11015; SEC Film
No. 11718936)
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 (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
Copy of form of Performance Unit Agreement, effective as of
March 26, 2014, pursuant to the 2007 Viad Corp Omnibus
Incentive Plan
Copy of form of Performance Unit Agreement, effective as of
February 24, 2016, pursuant to the 2007 Viad Corp Omnibus
Incentive Plan
97
Incorporated by Reference
Form
Period
Ending
Exhibit
Filing Date
10-Q
6/30/2004 3.A
8/9/2004
3
4
4
4
12/9/2013
12/23/2014
3/1/2016
1/3/2017
4
4.A
4.B
12/23/2014
9/2/2016
9/2/2016
4/13/2012
10.C
3/5/2013
10.D
3/5/2013
10.A
3/1/2016
10.A
12/5/2014
10.A
3/28/2014
8-K
10.B
3/29/2011
8-K
8-K
8-K
8-K
10.F
2/28/2008
10.B
3/28/2014
10.C
3/28/2014
10.B
3/1/2016
Exhibit
Number
Exhibit Description
Incorporated by Reference
Form
Period
Ending
Exhibit
Filing Date
10.E1
+
10.E2
+
10.F1
+
10.F2
+
10.F3
+
10.F4
+
10.G1
+
10.G2
+
10.G3
+
10.H
+
10.I1
+
10.I2
+
10.J1
+
10.J2
+
Copy of form of Non-Qualified Stock Option Agreement,
effective as of February 25, 2010, pursuant to the 2007 Viad
Corp Omnibus Incentive Plan (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 (SEC File No. 001-110015; SEC Film No.
10640085)
Copy of form of Viad Corp Executive Severance Plan (Tier I-
2013), effective as February 27, 2013
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 (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
Copy of Executive Officer Pay Continuation Policy adopted
February 7, 2007 (SEC File No. 001-11015; SEC Film No.
07609762)
Copy of Severance Agreement (No Change in Control) between
Viad Corp and Steven W. Moster, effective as of December 3,
2014
Copy of Severance Agreement (No Change in Control) between
Viad Corp and David W. Barry, effective as of April 22, 2015
Copy of Severance Agreement and General Release between
Viad Corp and Thomas M. Kuczynski, effective as of April 27,
2016
Copy of Viad Corp Supplemental TRIM Plan, as amended and
restated effective January 1, 2005 for Code Section 409A (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 (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
Summary of Compensation Program of Non-Employee
Directors of Viad Corp, effective as of February 23, 2016
Description of Viad Corp Director’s Matching Gift Program
(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 (SEC File
No. 001-11015; SEC Film No. 09642683)
8-K
8-K
8-K
8-K
8-K
8-K
8-K
10-K
8-K/A
8-K
8-K
8-K
10-K
10-K
10-K
10.K
21
23
24
31.1
31.2
+
*
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 Financial Officer of Viad Corp
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*
*
#
*
#
*
98
10.B
2/26/2010
10.A
2/26/2010
10.B
3/5/2013
10.B
8/29/2007
10
3/4/2014
10.A
2/13/2007
10.B
12/5/2014
12/31/2015 10H.4
3/11/2016
10
4/22/2016
10.E
8/29/2007
10.A
8/29/2007
10.E
3/5/2013
12/31/2015 10.K1
3/11/2016
12/31/1999 10.Q
3/17/2000
12/31/2008 10.I
2/27/2009
Exhibit
Number
Exhibit Description
Incorporated by Reference
Form
Period
Ending
Exhibit
Filing Date
32.1
#
**
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
#
**
32.2
101.INS *
101.SCH *
101.CAL *
101.DEF *
101.LAB *
101.PRE *
XBRL Instance Document
XBRL Taxonomy Extension Schema Document
XBRL Taxonomy Extension Calculation Linkbase Document
XBRL Taxonomy Extension Definition Linkbase Document
XBRL Taxonomy Extension Label Linkbase Document
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.
99
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
[THIS PAGE INTENTIONALLY LEFT BLANK]
GES’ engagement with long-time client Snow Sports Industries
America (SIA) has traditionally included official services contracting
and creative services for its annual Snow Show. With our enhanced
valued-added offerings, SIA recently expanded our scope to include
audio-visual production, data and registration services and event
accommodations. This highlights the strength of our full-service
offering as we continue to deliver powerful and engaging events for
our clients.
Photo: SIA Snow Show — Denver, Colorado
VIAD AT A GLANCE
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.
80+
LOCATIONS
GLOBALLY
+4,000
LIVE EVENTS
MANAGED ANNUALLY
3.8M
PRE-REGISTRATIONS
PROCESSED
4.0M
# OF HOTEL
NIGHTS BOOKED
S
T
H
G
I
L
H
G
I
H
L
A
I
C
N
A
N
I
F
6
1
0
2
D
A
I
V
Revenue
in millions
.
0
5
6
0
,
1
$
.
0
9
8
0
,
1
$
.
0
5
0
2
,
1
$
‘14
‘15
‘16
Adjusted Segment
EBITDA (1)
in millions
.
2
0
3
1
$
3
.
1
9
$
.
6
0
9
$
‘14
‘15
‘16
(1) A reconciliation of this non-GAAP measure to its most
directly comparable GAAP financial measure can be
found on the inside back cover of this report.
VIAD AT A GLANCE
Net Income
Attributable to Viad
per share
9
5
2
$
.
9
0
2
$
.
2
3
.
1
$
‘14
‘15
‘16
Income Before
Other Items (1)
per share
.
8
3
2
$
5
7
.
1
$
6
4
.
1
$
‘14
‘15
‘16
Pursuit is a collection of inspiring, unforgettable experiences in Alaska,
Montana, the Canadian Rockies and Vancouver, British Columbia. Pursuit’s
world-class attractions, distinctive lodges and travel experiences help
adventurous people from around the world discover and connect with
iconic locations, including Banff, Jasper, Waterton Lakes, Glacier, Denali and
Kenai Fjords national parks. From Alaska to Western Canada to Montana,
our attractions, tours and lodging let people feel the joy that comes with
moments of awe and inspiration.
S
N
O
I
T
C
A
R
T
T
A
Y
T
I
L
A
T
I
P
S
O
H
7WORLD-CLASS
ATTRACTIONS
2.2MILLION VISITORS
ANNUALLY
15DISTINCTIVE LODGING
PROPERTIES
+1,400
ROOMS
BOARD OF DIRECTORS & LEADERSHIP TEAM
BOARD OF DIRECTORS
8
1
4
5
3
2
7
6
1 Richard H. Dozer (1,3)
2 Andrew B. Benett (2,3)
3 Isabella Cunningham (1,2)
4 Edward E. Mace (1,3)
Chairman of the Board, Viad Corp;
Former President, Arizona
Diamondbacks and Former VP and
Chief Operating Officer,
Phoenix Suns
Former Global Chief Executive
Officer, Havas Worldwide;
Former 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
President and Chief Executive
Officer, SMG Hospitality LLC;
President, Mace Pacific
Holding Company, LLC
6 Robert E. Munzenrider (1,3)
Retired President, Harmon
AutoGlass
7 Margaret E. Pederson (2,3)
8 Joshua E. Schechter (1,2)
President and Chief Executive
Officer, Amirexx LLC
Chairman of the Board, Support.com
5 Steven W. Moster
President and Chief Executive
Officer, Viad Corp;
President of GES
LEADERSHIP TEAM
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
Steven W. Moster
President & Chief
Executive Officer,
and President of GES
Deborah J. DePaoli
General Counsel
and Secretary
Ellen M. Ingersoll
Chief Financial Officer
David W. Barry
President of Pursuit
Rick Britton
Executive Vice President,
Information Technology
Trisha Fox
Executive Vice President,
Human Resources
Leslie S. Striedel
Chief Accounting
Officer
CORPORATE INFORMATION
SHAREHOLDER INFORMATION
Annual Shareholders Meeting
The annual meeting of shareholders is scheduled to be held on:
May 18, 2017
8:00 a.m. (MST)
The Camby Hotel
2401 East Camelback Road
Phoenix, AZ 85016
(602) 468-0700
www.thecamby.com
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
ADJUSTED SEGMENT EBITDA
INCOME BEFORE OTHER ITEMS
Millions
2014
2015
2016
2016
2016
Per diluted share
Viad Consolidated
GES
Pursuit
Viad Consolidated
2014
2015
2016
Net Income Attributable to Viad $ 52.4
$ 26.6
$ 42.3
Net Income Attributable to Viad
$ 2.59
$ 1.32
$ 2.09
Net Income Attributable to
Noncontrolling Interest
(Income) Loss from
Discontinued Operations
3.2
0.4
0.5
(14.4)
0.4
0.7
(Income) Loss from Discontinued Operations
Attributable to Viad
(0.57)
0.02
0.03
Income from Continuing Operations
Attributable to Viad
2.02
1.34
2.12
Corporate Activities Expense
14.3
9.7
10.3
Restructuring Charges,Pre-tax
Corporate Eliminations
—
—
Restructuring (Pre-tax)
Impairments (Pre-tax)
1.6
0.9
3.0
0.1
0.7
5.2
0.2
Interest Income
(0.3)
(0.7)
(1.2)
Interest Expense
2.0
4.5
5.9
Income Tax Expense
0.1
10.5
21.3
Segment Operating Income $ 59.9
$ 54.6
$ 85.9
$ 50.2
$ 35.7
Acquisition Integration Costs
0.8
0.9
1.1
0.6
0.5
Fire-related Business
Interruption Expense
Acquisition Transaction-
related Costs
Adjusted segment
operating income
—
—
0.1
—
0.1
—
—
0.5
—
0.5
60.6
55.5
87.7
50.8
36.9
Segment Depreciation
27.9
27.9
33.4
21.3
Segment Amortization
2.7
7.2
9.2
8.3
12.1
0.9
Adjusted Segment
EBITDA
$ 91.3
$ 90.6
$ 130.2
$ 80.4
$ 49.8
s
e
t
a
i
c
o
s
s
A
d
n
A
g
r
e
b
n
e
s
i
E
y
b
n
g
i
s
e
D
Impairment Charges, Pre-tax
Acquisition-related Costs and Other
Non-recurring Expenses, Pre-tax
0.08
0.15
0.26
0.04
0.38
—
0.01
0.15
0.12
Tax Benefit on Above Items
(0.18)
(0.11)
(0.13)
Favorable Tax Matters
(0.59)
(0.07)
—
Income Before Other Items
$ 1.75
$ 1.46
$ 2.38
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.
Note — Certain amounts above may not foot due to rounding
EXHIBITOR MAGAZINE’SCORPORATE EVENTAWARD WINNER
Cover Photos: (Top) The Banff Gondola — Banff, Alberta, (Bottom) MINExpo International 2016 — Las Vegas, Nevada
VIAD CORP
1850 N. Central Avenue
Suite 1900
Phoenix, AZ 85004-4565
www.viad.com