Viad

W E   A R E   A L L   A B O U T

2 0 1 7   A N N U A L   R E P O R T

Perched on the summit of Banff’s 
Sulphur Mountain, the Banff 
Gondola’s Sky Bistro pairs the 
grandeur of the Rocky Mountains with 
a menu that features the unique flavors 
of Canada through a handpicked 
selection of locally sourced meats, 
produce, and ingredients.

We generate revenue and shareholder 
value through our two business units: 
GES and Pursuit. 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 
inspiring and unforgettable travel 
experiences in Alaska, Glacier National 
Park, Banff, Jasper, and Vancouver that 
includes attractions, lodges and hotels, 
and sightseeing tours that connect  
guests with iconic places. We are an 
S&P SmallCap 600 company.

Photo: (Top) The Banff Gondola – Banff National Park, Banff, Alberta, Canada, (Bottom) Inforum 2017 – Javits Center, New York, New York

Our Poken technology delivers an 
enhanced experience to visitors and 
a new level of engagement and 
lead qualification for exhibitors and 
sponsors. Using a Smart Badge, 
visitors ‘opt-in’ by collecting exhibitor 
content via touch, and at the same 
time, leaving a digital business card.

W E   E N H A N C E   T H E   C U S T O M E R

experience

From high-impact creative and 
audio-visual production to leading 
event technologies and official 
show services, GES offers a one-
stop solution for Live Events.

Photo: (Main) Mary Kay Independent Beauty Consultants – Kay Bailey Hutchison Convention Center, Dallas, Texas, (Inset) The Western Veterinary Clinic’s 
Annual Conference – Mandalay Bay, Las Vegas, Nevada

dear fellow shareholders

Photo: Maligne Lake Tours – Jasper National Park, Alberta, Canada

I am happy to report that 2017 marked another year of solid 
progress, with both business units delivering strong results. We 
focused on driving continued organic growth, integrating our 
recent acquisitions, and making select investments that will 
accelerate our growth and profitability in future years.

Our steadfast focus on our vision has led to a cumulative 
revenue increase of 37 percent, with a 440 basis point 
improvement in adjusted segment EBITDA 
margin over the past four years. During 
that same time, we have strengthened 
both of our business units through the 
acquisition of 11 leading businesses 
and returned about $77 million to 
shareholders through dividends and  
share repurchases. 

OUR 2017 PERFORMANCE

Through a combination of organic growth 
and contributions from recent acquisitions, 
we delivered a 10.1 percent increase in income per share 
before other items in 2017. Our revenue increased 8.5 percent 
to $1.3 billion and our adjusted segment EBITDA increased 
17.2 percent to $152.6 million. Our strong performance helped 
to drive an above market total shareholder return of 26.6 
percent, as compared to 14.6 percent for the Russell 2000 
Index. Overall, we are seeing solid business momentum and 
our teams are executing well.

GES HIGHLIGHTS 

GES delivered revenue of $1.1 billion during 2017, up 7.4 
percent from 2016, driven by continued business strength and 
contributions from our recent acquisitions. Adjusted segment 
EBITDA increased by $7.0 million to $87.4 million. Our growth 
during 2017 is particularly impressive considering the revenue 
headwind of about $37 million we faced from the combination 
of a low-margin contract that we did not renew, negative show 
rotation, and unfavorable exchange rate variances. 

Our efforts to position GES as the preferred global, full-service 
provider for live events continue to fuel growth. With a robust 
set of offerings, our international segment delivered organic 

revenue growth of 16.3 percent during 2017, and we further 
strengthened our existing relationships with some of Europe’s 
leading event organizers with multi-year contract renewals. 
These renewals have a combined lifetime contract value of 
approximately $100 million and are proof of the strong, 
collaborative partnerships that we have built with our organizer 
clients. We are also seeing great success growing our revenue 
from corporate clients by leveraging our global capabilities to 
support their event program needs across 
the EMEA region.

THE INVESTMENTS 

WE HAVE MADE ARE 

PROVIDING EXCITING 

AVENUES OF GROWTH 

WITH ENHANCED 

PROFITABILITY.

In the United States, we saw continued 
solid base-same show revenue growth of 
4.8 percent in 2017 and we continued to 
make progress integrating ON Services’ 
audio-visual production services into our 
mix of offerings. During 2017, we added 
audio-visual to our scope of services for 
a number of clients, and we were recently 
selected by the San Diego Convention 
Center to be its in-house preferred provider of audio-visual 
services and the exclusive provider of production rigging 
services starting in May 2018. We remain focused on driving 
synergies through ON Services and leveraging its capabilities 
to gain share in the large corporate event space.

Event technology also remains an important element of our 
growth strategy. As show organizers and corporate brand 
marketers increasingly leverage technology to drive improved 
ROI and an enhanced event experience, we are positioning 
GES to meet their current and future needs. During 2017, we 
strengthened our registration and data intelligence platform 
with the purchase of the Poken event engagement technology 
to deliver even more measurable event insights for organizers, 
exhibitors and event sponsors. Poken was a niche acquisition 
that is adding powerful capabilities to our data offering.

Overall, GES is well-positioned to continue to capitalize on 
the momentum we have created over the past four years. For 
2018, we expect to drive continued strong underlying business 
growth that will help offset negative show rotation revenue 
of approximately $40 million. Our team remains focused on 
driving outstanding customer experiences that strengthen the 
core and accelerate growth in higher-margin adjacencies. 

Photo: Game of Thrones®: The Touring Exhibition

On the ‘Buy’ side of our strategy, our late-2016 acquisition of 
the FlyOver Canada attraction in Vancouver is performing well 
and meeting our expectations. We are having success driving 
growth in passengers and effective ticket prices through our 
revenue management, sales and marketing efforts. We are 
excited to expand this high-margin concept into Iceland in 
2019 and are making good progress with that effort.

Overall, 2017 was a year of significant accomplishments and 
growth for Pursuit. We expect continued growth in 2018 and 
beyond as we continue to execute our strategy to scale the 
Pursuit business by growing and enhancing our high-margin 
attraction and hospitality portfolio. 

CLOSING

I am very proud of our accomplishments in 2017 and excited 
about our strategic direction and the progress we are making. 
The investments we have made are providing exciting avenues 
of growth with enhanced profitability. Our teams remain 
focused on delivering excellent service for our customers 
and guests, driving strong results for our shareholders, and 
executing our strategic goals, to continue enhancing long-term 
shareholder value. 

I want to thank Viad’s Board of Directors and the entire Viad 
team for their contributions to our success. I also want to 
thank you, my fellow shareholders, for your investment in our 
company and confidence in our strategy.

Sincerely, 

Steve Moster
President & Chief Executive Officer

PURSUIT HIGHLIGHTS 

Pursuit delivered another year of strong growth in 2017 driven 
by our “Refresh, Build, Buy” strategy and revenue management 
initiatives. As compared to 2016, revenue grew by 13.4 percent 
to $173.9 million and adjusted segment EBITDA increased 
$15.4 million to $65.2 million. We saw significant improvement 
in our key performance indicators. At our attractions, same-
store passengers increased 12.5 percent with revenue per 
passenger up 27.3 percent. At our hospitality assets, same-
store RevPAR increased 6.8 percent. These strong results more 
than offset revenue declines from our previously announced 
downsizing of the lower-margin package tours line of business 
and the fire-related closure of the Mount Royal Hotel.

Our recently refreshed Banff Gondola delivered results that 
far exceeded our expectations. During 2017, revenue grew 
57 percent over the pre-renovation period, with passenger 
growth of 20 percent and a 31 percent increase in revenue 
per passenger from ticket sales, retail, and dining. Following 
our success at the Banff Gondola, we completed similar 
renovations to drive an enhanced guest experience and 
stronger revenue growth from our dining services at the  
Glacier Discovery Center, which provides ticketing and guest  
services for our Glacier Adventure Tour and Glacier  
Skywalk attractions.

Another major ‘Refresh’ project currently in progress is the 
reconstruction of the Mount Royal Hotel, which was damaged 
by fire at the end of 2016. Utilizing insurance proceeds of 
about $30 million and an additional $5 million investment, we 
are undertaking a complete renovation of the property. With 
its ideal location in downtown Banff and an enhanced guest 
experience, we will be able to drive stronger RevPAR and 
returns from this asset. The project is progressing well, and we 
are on pace to re-open the hotel by mid-year 2018.

A current ‘Build’ initiative for Pursuit is the development of an 
RV park and cabin village in West Glacier on approximately 
100 acres of undeveloped land that we acquired as a part 
of an acquisition in 2014. This new development will have 
approximately 100 RV slips and 20 guest cabins. We expect  
to have the RV park at least partially online during the  
2019 season.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
⌧ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF

1934

For the fiscal year ended December 31, 2017
or
(cid:4) 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)

(602) 207-1000
(Registrant’s telephone number, including area code)
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 (cid:4)
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes (cid:4) 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 (cid:4)
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 (cid:4)
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) 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, a smaller reporting company, or
an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging
growth company” in Rule 12b-2 of the Exchange Act. (Check One):
Large accelerated filer
Non-accelerated filer

⌧
(cid:4)

Accelerated filer
Smaller reporting company
Emerging growth company

(cid:4)
(cid:4)
(cid:4)

If an emerging growth company, indicated by check mark if the registrant has elected not to use the extended transition period for complying with
any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. (cid:4)
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes (cid:4) 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, 2017) was approximately $948 million.
Registrant had 20,422,762 shares of Common Stock ($1.50 par value) outstanding as of January 31, 2018.

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 17, 2018, is
incorporated by reference into Part III of this Annual Report.

INDEX

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

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 ................................................................................................

Item 15.
Item 16.

Exhibits and Financial Statement Schedule ...........................................................................................
Form 10-K Summary .............................................................................................................................

Page

1

15

18

19

19

20

20

21

23

24

41

42

85

85

88

89

89

89

89

89

89

94

In this report, for periods presented, “we,” “us,” “our,” “the Company,” and “Viad Corp” refer to Viad Corp and its
subsidiaries and affiliates.

Forward-Looking Statements

PART I

This Form 10-K contains a number of forward-looking statements. Words, and variations of words, such as “will,” “may,”
“expect,” “would,” “could,” “might,” “intend,” “plan,” “believe,” “estimate,” “anticipate,” “deliver,” “seek,” “aim,”
“potential,” “target,” “outlook,” and similar expressions are intended to identify our forward-looking statements. These
forward-looking statements are not historical facts, but reflect our current estimates, projections, expectations, or trends
concerning future growth, operating cash flows, availability of short-term borrowings, consumer demand, new or renewal
investment policies, productivity improvements, ongoing cost reduction efforts, efficiency, competitiveness,
business,
strategic actions, acquisitions, the timing of new and damaged attractions openings, the sufficiency of our legal services,
projections of 2018 revenue, show rotation, same-show rotation, segment operating income, attraction start-up costs, the
realization of deferred tax assets, contributions to pension and postretirement benefit plans, legal expenses, tax rates and other
tax matters, and foreign exchange rates. 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, many of which are beyond our control.
Important factors that could cause actual results to differ materially from those described in our forward looking statements
include, but are not limited to, the risks discussed in Item 1A, “Risk Factors,” included in this Annual Report on Form 10-K
for the year ended December 31, 2017 (“2017 Form 10-K”). We disclaim and do not undertake any obligation to update or
revise any forward-looking statement in this 2017 Form 10-K except as required by applicable law or regulation.

Item 1. BUSINESS

We are an international experiential services company with operations principally in the United States, Canada, the United
Kingdom, continental Europe, and the United Arab Emirates. We are committed to providing unforgettable experiences to
our clients and guests.

We operate through two main business groups:

•

•

GES is a world-class live event service provider to some of the most visible and influential events and global
brands.
Pursuit is a collection of iconic natural and cultural destination travel experiences that enjoy perennial demand.

GES accounted for 87% of our 2017 consolidated revenue and 51% of our 2017 consolidated segment operating income(1).
Pursuit accounted for 13% of our 2017 consolidated revenue and 49% of our 2017 consolidated segment operating income(1).

2017 REVENUE
$1.3B

2017 SEGMENT OPERATING
INCOME(1) $97.1M

13%

87%

49%

51%

GES

Pursuit

(1) We define segment operating income 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 charges and recoveries, the reduction for income attributable to non-redeemable noncontrolling
interest, and the addition for loss attributable to redeemable noncontrolling interest. Refer to Note 22 – Segment
Information of the Notes to Consolidated Financial Statements (Part II, Item 8 of this 2017 Form 10-K) for a
reconciliation of segment operating income to the most directly comparable GAAP measure.

1

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. For nine years, GES’ National Servicenter® has been certified under the J.D. Power and Associates Certified
Call Center ProgramSM, and for eight consecutive years, Ad Age has recognized GES as one of the nation’s largest
experiential/event marketing agency networks. GES is included in Event Marketer magazine’s IT List as one of the top 100
event agencies in the industry.

GES’ clients include event organizers and corporate brand marketers. Event organizers schedule and run the event from start
to finish. 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.

GES operates through two reportable business segments based on geography:

•

•

GES U.S. has a leading position in the U.S. with full-service operations in every major exhibition market,
including Las Vegas, Nevada; Chicago, Illinois; Orlando, Florida; New York, New York; and Los Angeles,
California.

GES International has operating facilities at many of the most active and popular international event
destinations and venues, including seven cities in Canada, seven cities in the United Kingdom, two cities in
Germany, two cities in the United Arab Emirates, two cities in the Netherlands, one city in Hong Kong,
Switzerland, and Romania, and through these facilities offers full-service event operations across the United
Kingdom, Europe, and the Middle East.

Markets Served

GES provides a full suite of services for event organizers and corporate brand marketers across four live event markets:
Exhibitions, Conferences, Corporate Events, and Consumer Events (collectively, “Live Events”).

2

LIVE EVENT

PRIMARY PURPOSE

Exhibitions

Facilitates business-to-business and business-to-
consumer sales and marketing.

% GES 2017
REVENUE

Conferences

Facilitates attendee education. May also include an
expo or trade show to further facilitate attendee
education and to facilitate business-to-business and
business-to-consumer sales and marketing.

Corporate Events

Facilitates attendee education of sponsoring company’s
products or product ecosystem.

Consumer Events

Entertains, educates, or creates an experience, typically
around a specific genre.

64%

23%

11%

2%

3

Services Offered

GES offers a comprehensive range of services and innovative technology, including Core Services, Event Technology, and
Audio-Visual, to event organizers and corporate brand marketers.

GES Revenue Mix

Core Services 88%

Event Technology 4%

Audio-Visual 8%

Core Services

For Live Events, GES provides official contracting services and products to event organizers and
corporate brand marketers. 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 57% of Viad’s 2017 consolidated revenue and 61% of Viad’s 2016 and 2015 consolidated
revenue. GES International Core Services accounted for 19% of Viad’s 2017 and 2016 consolidated
revenue and 23% of Viad’s 2015 consolidated revenue.

In general, GES provides the following exclusive and discretionary services and products to Live Event organizers and
corporate brand marketers:

Exclusive Services

Discretionary Services

Corporate Brand
Marketers
Material handling
Electrical distribution
Cleaning
Plumbing
Overhead rigging
Booth rigging

Event Organizers
Event planning and production
Look and feel design
Layout and floor plan designs
Furnishings and carpet
Show traffic analysis
Marketing and strategy
Electrical distribution
Cleaning
Plumbing
Overhead rigging
Booth rigging

Exclusive Products

Event Organizers

Signage
Common area structures

Corporate Brand Marketers

Creative design and strategy
Integrated marketing and pre/post event communications
Event surveys
Return on investment analysis
Online management tools
Attendee/exhibit booth traffic analysis
Staff training
Logistics/transportation
Exhibits storage/refurbishment
Furnishings and carpet
Installation and dismantling labor
Tradeshow program management

Discretionary Products
Corporate Brand Marketers

Custom exhibit design/construction
Portable/modular exhibits and design
Graphics and signage

4

Under various agreements with Live Events organizers, GES is the official services contractor with the exclusive right to
provide certain services to exhibitors participating in a Live Event. This gives exhibitors a single point of contact to facilitate
a timely, safe, and efficient move-in/out of a Live Event and to facilitate an organized, professional, during-show experience.
GES also competes with other service providers to sell discretionary services to exhibitors. Discretionary services include
complete event program management, such as creative design, strategy, and planning to corporate brand marketers across all
Live Events in which they participate.

GES offers 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. offers end-to-end event accommodation services in
North America. Event accommodations provide the unique potential to serve multiple Live Event
participants through a single integrated service network. Event accommodations services include:

Researching and selection of local hotels

•
• Negotiating and contracting
•
Room block management
• Group reservation management
•
Rate integrity and monitoring
• Marketing services
• On-site services
•

Post-event reporting

Event Technology

Registration and ticketing
Lead management
Reporting and analytics

Registration and data analytics. GES provides event registration and data analytic services
including:
•
•
•
• Web-based enterprise-wide application
•
• Attendee engagement
• Digital collections

Software-as-a-service model or fully managed options

Event management tools. GES provides event management services including:

• Online ordering capabilities
•
•
•

Sponsorship management tools
Content management systems
Live Event tracking

GES U.S. provides all three of the above event technology services which accounted for 2% of
Viad’s 2017 consolidated revenue and 3% of Viad’s 2016 and 2015 consolidated revenue. GES
International provides registration and data analytics and event management tools, which accounted
for 1% of Viad’s 2017, 2016, and 2015 consolidated revenue.

GES offers a variety of high-impact multi-media services and technology across all Live Events.
GES combines the science of innovative digital solutions with the latest audio-visual technology and
superior service to create award-winning attendee engagements. GES expanded its audio-visual
services through the 2016 acquisition of ON Event Services, LLC (“ON Services”), which enhances
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. Audio-visual services include:

Audio-Visual

• Video and lighting production
• Digital studio services
•
•
•

Entertainment services and talent coordination
Projection mapping
Computer rental and support

GES U.S. audio-visual services accounted for 6% of Viad’s 2017 consolidated revenue, 3% of Viad’s
2016 consolidated revenue, and 1% of Viad’s 2015 consolidated revenue. GES International audio-
visual services accounted for 2% of Viad’s 2017, 2016, and 2015 consolidated revenue.

5

Seasonality and Show Rotation

GES’ exhibition and event activity can vary significantly from quarter to quarter and year to year depending on the frequency
and timing of shows: some shows are not held annually, and some shift between quarters. During 2017, GES U.S. reported its
highest revenue during the first and second quarters. During 2016, GES U.S. reported its highest revenue during the second
and third quarters. GES International generally reports its highest revenue during the second and fourth quarters. The
following show rotation revenue metric refers to the net change in revenue from 2016 to 2017 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.

GES Revenue
(in millions)

2017 Show Rotation Revenue
(in millions)

100

50

0

-50

-100

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

2017

2016

400

300

200

100

0

Competition

In the Live Events industry, GES generally competes across all classes of services and all markets on the basis of discernible
differences, value, quality, price, convenience, and service. GES has a competitive advantage through its worldwide network
of resources, history of serving as an extension of clients’ teams, experienced and knowledgeable personnel, client-focus,
creativity, reliable 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.
GES’ primary competitor 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 GES’ other service offerings.

Growth Strategy

GES is committed to become the preferred global, full-service provider for Live Events. GES holds a leading market position
in Exhibitions and is pursuing a focused and disciplined growth strategy with the goal of expanding its market share in the
currently under-penetrated Conferences, Corporate Events, and Consumer Events markets. 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.

Live Events. Penetration into other live events to extend industry leadership and leverage capabilities.

With our recent acquisitions, GES made significant progress toward creating the most comprehensive suite of services for the
Live Events industry, which enhanced overall competitiveness, facilitated growth in under-penetrated areas, and formed a
basis for a data platform. We continue to pursue opportunities to acquire businesses with proven products and services that
complement, enhance, or expand current businesses or offer growth opportunities.

6

Recent Developments of GES

•

•

•

Poken Acquisition. In March 2017, we completed the acquisition of the Poken event engagement technology, a
leading cloud-based visitor engagement and measurement platform. The Poken platform offers a seamless
ecosystem of tools that enable digital document collection (through its patented “Touch and Glow” technology),
visitor-to-visitor engagement, gamification, and metrics reporting.

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 the Asia markets. In early 2017, GES officially launched
registration and data analytic services in the Asia market with a Hong Kong office.

7

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 comprises the following collections:

Banff Jasper Collection

Alaska Collection

Glacier Park Collection

FlyOver

Brewster Travel Canada, which is marketed as the Banff Jasper
Collection, 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.

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.

Glacier Park, Inc., which is marketed as the Glacier Park Collection, is
an operator of seven lodging properties, 12 retail shops, and 11 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% owned subsidiary of ours.

located in Vancouver, British Columbia,

is a
FlyOver Canada,
recreational attraction that provides a virtual flight ride experience that
combines motion seating, spectacular media, and visual effects
including wind, scents, and mist to give the unforgettable experience
of flying across Canada.

FlyOver Iceland is a recreational attraction currently being built in
Reykjavik, Iceland that will provide a virtual flight ride experience
over some of Iceland’s most spectacular scenery and natural wonders
with the same effects as FlyOver Canada. The new attraction is
expected to open in 2019.

8

Pursuit comprises four lines of business: Hospitality, including food and beverage services and retail operations; Attractions,
including food and beverage services and retail operations; Transportation; and 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 (2)

Travel Planning (2)

Banff Jasper
Collection

Elk + Avenue Hotel (164)
Glacier View Inn (32)
Mount Royal Hotel (133) (1)

Alaska
Collection

Glacier Park
Collection

FlyOver

Denali Backcountry Lodge (42)
Denali Cabins (46)
Kenai Fjords Wilderness Lodge (8)
Seward Windsong Lodge (180)
Talkeetna Alaska Lodge (212)

Apgar Village Lodge (48)
Glacier Park Lodge (162)
Grouse Mountain Lodge (145)
Motel Lake McDonald (27)
Prince of Wales Hotel (86)
St. Mary Lodge (127)(3)
West Glacier Motel & Cabins (32)

Banff Gondola
Banff Lake Cruise
Columbia Icefield
Glacier Adventure
Glacier Skywalk
Maligne Lake Tours

Kenai Fjords Tours

Airporter Services
Charter Motorcoach

Services

Sightseeing Tours

Corporate Event

Management Services

Explore Rockies
Activity Booking Centers

Denali Backcountry
Adventure

Travel Planning Services

FlyOver Canada –
Vancouver
FlyOver Iceland –
Reykjavik(4)

(1)

(2)

(3)

(4)

The Mount Royal Hotel was damaged by a fire on December 29, 2016, and was closed for reconstruction during 2017.
We anticipate re-opening the hotel in mid-year 2018. The number of rooms available at the hotel will decrease from
135 to 133 after the renovation is complete.
During 2017, we completed the previously announced downsizing of the Banff Jasper Collection’s third party tour and
travel products and exited summer season charter transportation services.
During 2017, the Glacier Park Collection added ten tiny homes to the St. Mary Lodge property bringing the total
number of rooms from 117 to 127. See “Recent Pursuit Developments” for further discussion.
In November 2017, we announced the expansion of our virtual flight ride concept into Iceland’s capital city of
Reykjavik. We expect the new attraction to be open in 2019.

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.
• Kenai Fjords Wilderness Lodge is located on a private island in Resurrection Bay adjacent to

Hospitality

•

•

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 is 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 Banff Gondola has been
honored with two Top Project Awards from Alberta Construction Magazine. The Banff
Gondola’s winning categories include the People’s Choice Award in 2016 and the Commercial
Award (Under $50 Million) in 2016. The Banff Gondola is currently rated by Trip Advisor as the
#1 “Things to do in Banff” and received 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.

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 received 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 our Columbia Icefield
Glacier Adventure attraction in Jasper National Park, Alberta, Canada. Since opening in 2014, the
Glacier Skywalk has had robust visitor traffic. It 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. FlyOver Canada is rated by Trip Advisor as the #1 “Fun & Games in Vancouver” and
received the Trip Advisor Certificate of Excellence.

FlyOver Iceland is a recreational attraction currently being built in Reykjavik, Iceland. Guests
will experience an exhilarating virtual flight ride over some of Iceland’s most spectacular scenery
and natural wonders with the same effects as FlyOver Canada. We expect the new attraction to
open in 2019.

Kenai Fjords Tours is a leading 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 received the Trip Advisor Certificate of Excellence.

11

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, an historic chalet complex
and boat house that offers canoes, kayaks, and rowboats for rental. Maligne Lake Tours received
the Trip Advisor Certificate of Excellence.

Transportation

The Banff Jasper Collection’s transportation operations include sightseeing tours, airport shuttle
services, and seasonal 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. The Alaska Collection offers a unique
sightseeing tour 92 miles deep into Denali National Park.

The Banff Jasper Collection 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. The Banff Jasper Collection also owns
and operates eight Explore Rockies activity booking centers throughout Banff and Jasper National
Parks and Calgary, Alberta. In 2017,
the
previously announced 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.

the Banff Jasper Collection completed phasing out

Travel Planning

Seasonality

Pursuit experiences peak activity during the summer months. During 2017, 87% of Pursuit’s revenue was earned in the
second and third quarters.

Pursuit 2017 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’s competitive
advantage is its distinctive attractions and iconic destinations.

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.

Buy. Buy strategic assets that drive economies of scale and scope with strong returns.

We continue to search for opportunities to acquire or to build 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 Pursuit Developments

•

•

•

•

Mount Royal Hotel. On December 29, 2016, the Mount Royal Hotel was damaged by fire and closed. In July
2017, we resolved our property and business interruption insurance claims related to the fire for $36.3 million.
We allocated $2.2 million to an insurance receivable, $29.3 million was recorded as an impairment recovery
(partially offset by impairment charges of $0.2 million) related to construction costs to re-open the hotel, $2.5
million was recorded as a business interruption gain for the recovery of lost profits, $1.3 million was recorded as
contra-expense to offset non-capitalizable costs incurred, and the remaining $1.0 million was recorded as
deferred revenue that will be recognized over the periods the business interruption losses are actually incurred.
Restorations and improvements will provide an elevated guest experience to room finishes and furnishings, lobby
and lounge areas, exterior appearance, heating/cooling, sound insulation, and building systems. We anticipate re-
opening the hotel in mid-year 2018.

Expansion of FlyOver Concept. On November 3, 2017, we acquired the controlling interest (54.5% of the
common stock) in Esja Attractions ehf. (“Esja”). Esja, a private Iceland corporation is developing and will
operate Pursuit’s new FlyOver Iceland attraction. This attraction expands our virtual flight ride theater concept
into Iceland’s capital city of Reykjavik. Modeled after our highly successful FlyOver Canada attraction, FlyOver
Iceland will provide guests an exhilarating virtual flight experience over some of Iceland’s most spectacular
scenery and natural wonders. The new attraction is expected to open in 2019.

Tiny Home Village. On July 15, 2017, we added ten tiny homes to the St. Mary Lodge property as part of the
Glacier Park Collection. The tiny home’s design embraces a number of eco-forward elements, such as a fresh
water/gray water system and pint-sized, energy-efficient appliances. Elements of luxury are woven into the
design. Homes can accommodate up to four guests, with a sliding barn-style door separating a compact sleeping
area from the cozy living area.

RV and Cabin Park Development. In 2017, we began developing approximately 100 acres of undeveloped land
adjacent to Glacier National Park that we acquired in connection with our 2014 purchase of the West Glacier
properties. The new development will include a new RV and cabin park with 102 RV slips, 20 guest cabins, five
employee housing cabins, guest registration, and a laundromat. Our site is ideally located at the Glacier Park
entrance. We expect half of the new RV and Cabin Park to open during the 2019 season with the remainder
opening for the 2020 season.

Financial information for our reportable segments and geographic areas is included in Note 22 – Segment Information of the
Notes to Financial Statements (Part II, Item 8 of this 2017 Form 10-K).

Intellectual Property

Our intellectual property rights (including trademarks, patents, copyrights, registered designs, technology, and know-how)
are material to our business.

We own or have the right to use numerous trademarks and patents in many countries. Depending on the country, trademarks
remain valid for as long as we use them, or as long as we maintain their registration status. Trademark registrations are
generally for renewable, fixed terms. We also have patents for current and potential products. Our patents cover inventions
ranging from a modular structure having a load-bearing surface we use in our event and exhibition services, to a surface-
covering installation tool and method that reduces our labor costs and improves worker safety. Our U.S. issued utility patents
extend for 20 years from the patent application filing date; and our U.S. issued design patents are currently granted for 14
years from the grant date. We also have an extensive design library. Many of the designs have copyright protection and we

13

have also registered many of the copyrights. In the U.S., copyright protection is for 95 years from the date of publication or
120 years from creation, whichever is shorter. While we believe that certain of our patents, trademarks, and copyrights have
substantial value, the loss of any one of them would not have a material adverse effect on our financial condition or results of
operations.

Our Trademarks

Our U.S. registered trademarks and trademarks pending registration, include 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®, ON Services, ON Site Audio Visual & design, 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®. We also own or have the right to use many
registered trademarks and trademarks pending registration outside of the United States, including GES®, ShowTech®,
Poken®, Visit, Blitz, Brewster Inc. & 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®.

Government Regulation and Compliance

Compliance with legal requirements and government regulations represents a normal cost of doing business. The principal
rules and regulations affecting our day-to-day business relate 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 our 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 our 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 our capital expenditures, competitive position, financial condition or results of
operations.

Employees

We had the following number of employees as of December 31, 2017:

Number of
Employees

Regular Full-Time
Employees Covered by
Collective Bargaining
Agreements

GES .............................................................................................................................
Pursuit..........................................................................................................................
Viad Corporate ............................................................................................................
Total ......................................................................................................................

3,092
365
64
3,521

1,142
41
—
1,183

We believe that relations with our employees are good and that collective-bargaining agreements expiring in 2018 will be
renegotiated in the ordinary course of business without a material adverse effect on our operations.

We are governed by a Board of Directors comprised of seven non-employee directors and one employee director, and we
have an executive management team consisting of four executive officers.

Financial Information about Segments and Geographic Areas

Refer to Note 22 – Segment Information of the Notes to Consolidated Financial Statements (Part II, Item 8 of this 2017 Form
10-K) for segment financial information.

14

Available Information

We were incorporated in Delaware in 1991. Our common stock trades on the New York Stock Exchange under the symbol
“VVI.”

Our website address is www.viad.com. All of our SEC filings, including our Annual Reports 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 our website as
soon as reasonably practicable after we electronically file that material with, or furnished it to, the SEC. The information
contained on our website is neither a part of, nor incorporated by reference into, this 2017 Form 10-K.

Our investor relations website is www.viad.com/investors/investor-center/default.aspx and includes key information about
our corporate governance initiatives, including our Corporate Governance Guidelines, our Board of Directors committee
charters, our Code of Ethics, and information concerning our Board members and how to communicate with them.

Item 1A. RISK FACTORS

Our operations and financial results are subject to known and unknown risks. As a result, past financial performance and
historical trends may not be reliable indicators of our future performance.

Completed acquisitions may not perform as anticipated or be integrated as planned. We regularly evaluate and pursue
opportunities to acquire businesses that complement, enhance, or expand our current business, or offer growth opportunities.
Our acquired businesses might not meet our financial and non-financial expectations or yield anticipated benefits. Our
success depends, in part, on our ability to conform controls, policies and procedures, and business cultures; consolidate and
streamline operations and infrastructures; identify and eliminate redundant and underperforming operations and assets;
manage inefficiencies associated with integration of operations; and retain the acquired business’ key personnel and
customers. Moreover, our acquisition activity potentially increases our debt, subjects us to new regulatory requirements,
distracts our senior management and employees, and exposes us to unknown liabilities or contingencies that we fail to, or are
unable to identify prior to closing. If our acquisitions cause us to make changes to our business strategy or if external
conditions adversely affect our business operations, we may also be required to record an impairment charge to goodwill or
intangible assets. Any of these risks could materially and adversely affect our business, product and service sales, financial
condition, and results of operations.

We depend on our large exhibition event clients to renew their service contracts and on our exclusive right to provide
those services. During 2017, no single client accounted for more than 6% of our consolidated revenue. However, GES has a
number of large exhibition event organizers and large customer accounts. If any of these large clients do not renew their
service contracts, our results of operations could be materially adversely affected.

Moreover, when event organizers hire GES as the official services contractor, they also grant GES an exclusive right to
perform electrical, plumbing services, and other services (the “Event Services”) at the exhibition facility. However,
exhibition facilities are under increasing financial pressure to in-source Event Services (either by performing the services
themselves or by hiring a separate service provider) as a result of conditions generally affecting their industry, such as an
increased supply of exhibition space. If a large number of exhibition facilities choose to in-source Event Services, GES will
lose the ability to provide Event Services despite being hired as the official services contractor, and our results of operations
could be materially and adversely affected.

Our business is relationship driven. Our GES business is heavily focused on client relationships, and, specifically, on having
close collaboration and interaction with our clients. To be successful, our account team must be able to understand a client’s
desires and expectations in order to provide top-quality service. If we lose a key member of our account team, we could also
lose customers and our results of operations could be materially and adversely affected.

We operate in highly competitive industries. We are 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, we may be required to lower our prices and rates to avoid the loss of related business, thereby adversely affecting
our results of operations. In addition, if we are unable to anticipate and respond as effectively as competitors to changing
business conditions, including new technologies and business models, we could lose market share to our competitors. Our
inability to meet the challenges presented by the competitive environment could materially and adversely affect our results of
operations.

15

Travel industry disruptions, particularly those affecting the hotel and airline industries, could adversely affect our
business. Our business depends largely on the ability and willingness of people, whether exhibitors, exhibition attendees, or
others, to travel. Factors adversely affecting the travel industry, and particularly the airline and hotel industries, generally also
adversely affect our business and results of operations. Factors that could adversely affect the travel industry include high or
rising fuel prices, increased security and passport requirements, weather conditions, airline accidents, and international
political instability and hostilities. Any of these factors, or other unexpected events that affect the availability and pricing of
air travel and accommodations, could materially and adversely affect our business and results of operations.

Transportation disruptions and increases in transportation costs could adversely affect our business and results of
operations. GES relies on independent transportation carriers to send materials and exhibits to and from exhibition,
warehouse, and customer facilities. If our customers and suppliers are unable to secure the services of those independent
transportation carriers at favorable rates, it could materially and adversely affect our business and results of operations. In
addition, disruption of transportation services due to weather-related problems, labor strikes, lockouts, or other events could
adversely affect our ability to supply services to customers and could cause the cancellation of exhibitions, which could
materially and adversely affect our business and results of operations.

The seasonality of our business makes us particularly sensitive to adverse events during peak periods. Our GES exhibition
and event activity varies significantly because it is based on the frequency and timing of shows, many of which are not held
each year and which may shift between quarters. The peak activity for our Pursuit business is during the summer months.
Consequently, during 2017, 87% of Pursuit’s revenue was earned in the second and third quarters. If adverse events or
conditions occur during these peak periods our results of operations could be materially and adversely affected.

Terrorist attacks, natural disasters, or other catastrophic events could negatively affect our business. The occurrence of
catastrophic events ranging from natural disasters (such as hurricanes, fires, and floods), health epidemics or pandemics, acts
of war or terrorism, accidents involving our travel offerings or experiences, or the prospect of these events could disrupt our
business. Such catastrophic events could have a negative impact on GES’ production facilities, preventing us from timely
completing exhibit fabrication and other projects for customers. They could also cause a cancellation of exhibitions and other
events held in public venues or disrupt the services we provide to our customers at convention centers, exhibition halls,
hotels, and other public venues. Such catastrophic events could also have an adverse impact on Pursuit, which is heavily
dependent on the ability and willingness of its guests to travel. Pursuit guests tend to delay or postpone vacations if natural
conditions differ from those that typically prevail at competing lodges, resorts and attractions, and catastrophic events could
impede the guests’ ability to travel, interrupt our business operations, and/or cause damage to our properties. In addition,
unfavorable media attention, or negative publicity, in the wake of a catastrophic event could damage our reputation or reduce
the demand for our services. If the conditions arising from such events persist or worsen, they could materially and adversely
affect our results of operations and financial condition.

We are vulnerable to deterioration in general economic conditions. Our business is sensitive to fluctuations in general
economic conditions that affect the cost of materials and operating supplies. The success of our GES business largely
depends on the number of exhibitions held, the size of exhibitors’ marketing expenditures, and on the strength of particular
industries in which exhibitors operate. The number and size of exhibitions generally decrease when the economy weakens.
We also suffer from reduced spending for our services because many exhibitors’ marketing budgets are partly discretionary,
and are frequently among the first expenditures reduced when economic conditions deteriorate. Consequently, marketing
expenditures often are not increased until economic conditions improve. Revenue from our Pursuit operation 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. Any of these risks could materially and adversely affect our business, product
sales, financial condition, and results of operations.

Recent U.S. tax legislation may materially and adversely affect our financial condition, results of operations, and cash
flows. The Tax Cuts and Jobs Act (the “Tax Act”), enacted in late 2017, makes significant changes to U.S. tax laws and
includes numerous provisions that could affect our business. For instance, as a result of lower corporate tax rates, the Tax Act
tends to reduce both the value of deferred tax assets and the amount of deferred tax liabilities. It also limits interest rate
deductions and the amount of net operating losses that can be used each year and alters the expensing of capital expenditures.
Other provisions have tax consequences for our international operations. The Tax Act is unclear in certain respects and will
require interpretations and implementing regulations by the Internal Revenue Service, as well as state tax authorities. The Tax
Act could also be subject to amendments and technical corrections, any of which could lessen or increase the adverse impacts
on our business operations. The accounting treatment of these tax law changes is complex, and some of the changes may
affect both current and future periods. Others will primarily affect future periods. As we have discussed elsewhere in this
Report on Form 10-K, we believe our analysis and computations of the tax effects of the Tax Act on financial results is
substantially, but not entirely, complete. Consistent with guidance from the SEC, our financial statements reflect our
estimates of the tax effects of the Tax Act on our business. Although we believe these estimates are reasonable, they are

16

provisional and may be adjusted prior to the end of 2018. Any such adjustments could affect our current or future financial
statements, or both. We continue to examine the impact of this tax reform legislation, and as its overall impact is uncertain,
we note that the Tax Act could adversely affect our business and financial condition.

the Netherlands, Germany, and to a lesser extent,

We are subject to currency exchange rate fluctuations. We have operations outside of the U.S. primarily in Canada, the
United Kingdom,
in certain other countries. During 2017, GES
International and Pursuit’s international operations accounted for approximately 30% of our consolidated revenue and 58%
of our segment operating income. Consequently, a significant portion of our business is exposed to currency exchange rate
fluctuations. Our financial results and capital ratios are sensitive to movements in currency exchange rates because a large
portion of our assets, liabilities, revenue, and expenses must be translated into U.S. dollars for reporting purposes. The
unrealized gains or losses resulting from the currency translation are included as a component of accumulated other
comprehensive income (loss) in our consolidated balance sheets. As a result, significant fluctuations in currency exchange
rates could result in material changes to the net equity position we report in our consolidated balance sheets. We do not
currently hedge equity risk arising from the translation of non-U.S. denominated assets and liabilities.

Our participation in multi-employer pension plans could substantially increase our pension costs. We sponsor a number of
defined benefit plans for our U.S. and Canada-based employees. We are obligated to contribute to multi-employer pension
plans under collective-bargaining agreements covering our union-represented employees. We contributed $26.6 million in
2017 and $25.8 million in 2016 to those multi-employer pension plans. These multi-employer plans are managed by third-
party boards of trustees. Based upon the information we receive from plan administrators, we believe that several of those
multi-employer plans are underfunded. The Pension Protection Act of 2006 requires us to reduce the underfunded status over
defined time periods. Moreover, we would be required to make additional payments of our proportionate share of a plan’s
unfunded vested liabilities if a plan terminates, or other contributing employers withdraw, due to insolvency or other reasons,
or if we voluntarily withdraw from a plan. At this time, we cannot determine with any certainty the amount of additional
funding, if any, we could be required to make to those plans. However, significant plan contribution increases, could
materially and adversely affect our 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 2017 Form 10-
K) for further information.

Union-represented labor increases our risk of higher labor costs and work stoppages. A significant portion of our
employees are unionized. We have approximately 100 collective-bargaining agreements, and we are required to renegotiate
approximately one-third of those each year. If we increase wages or benefits as a result of labor negotiations, either our
operating margins will suffer, or we could increase the cost of our services to our customers, which could lead those
customers to turn to other vendors with lower prices. Either event could materially and adversely affect our business and
results of operations.

Additionally, if we are 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. If that happens, we might be unable to find substitute workers with the
necessary skills to perform many of the services, or we may incur additional costs to do so, both of which could materially
and adversely affect our business and results of operations.

We are vulnerable to cybersecurity attacks and threats. We regularly collect and process credit, financial, and other
personal, sensitive, and confidential information from individuals and entities who attend or participate in events and
exhibitions that we produce, or who visit our attractions and other offerings. In addition, our devices, servers, computer
systems, and business systems are vulnerable to cybersecurity risk, including cyberattacks, or we may be the target of email
scams that attempt to acquire personal information and company assets. Despite our efforts to protect ourselves with
insurance, and create security barriers to such threats, including regularly reviewing our systems for vulnerabilities and
continually updating our protections, we might not be able to entirely mitigate these risks. Our failure to effectively prevent,
detect, and recover from the increasing number and sophistication of information security threats could lead to business
interruptions, delays or loss of critical data, misuse, modification, or destruction of information, including trade secrets and
confidential business information, reputational damage, and third-party claims, any of which could adversely and materially
affect our results of operations.

Laws and regulations relating to the handling of personal data could result in increased costs, legal claims, or fines. We
store and process personally identifiable information from our customers, employees, and third parties with whom we have
business relationships. Legal requirements relating to the collection, storage, handling, and transfer of personal data continue
to evolve and could lead to burdensome or inconsistent requirements affecting the location and movement of our customer
and internal employee data as well as the management of the data. For example, in July 2016, the EU and the U.S. agreed on
a mechanism for companies to transfer data from EU member states to the U.S. This framework, called the Privacy Shield, is
Justice in a predecessor mechanism.
intended to address

identified by the European Court of

shortcomings

17

in May 2018,

the legal basis

for data transfers across

to challenges in European courts, which may lead to
The Privacy Shield and other mechanisms are currently subject
the EU’s new
the Atlantic. Also,
uncertainty about
General Data Protection Regulation (GDPR) will replace the existing EU Data Protection Directive, and it will have a
significant impact on how businesses can collect and process the personal data of EU individuals. The GDPR includes a
requirement for businesses to self-report personal data breaches to the relevant supervisory authority and, under certain
circumstances, to the affected data subjects. It also gives additional rights to individuals whose data are processed, including
the “right to erasure” (also commonly known as the right to be forgotten) by having their records erased and the right
to data portability. Compliance with the myriad requirements could involve changes in our services, business practices, or
internal systems that could likely increase our costs, lower revenue, reduce efficiency, or make it more difficult to compete
with Non-U.S.-based firms. Our failure to comply with existing or new rules could result in significant penalties or orders to
stop the alleged noncompliant activity, litigation, adverse publicity, or could cause our customers to lose trust in our services.
In addition, if the third parties we work with violate applicable laws, contractual obligations, or suffer a security breach, those
violations could also put us in breach of our obligations under privacy laws and regulations. Any of these risks could
materially and adversely affect our business and results of operations.

New capital projects may not be commercially successful. From time to time, we pursue capital projects, such as our current
efforts to upgrade some of our Pursuit offerings in order to seize opportunities that complement, enhance, and expand our
business. 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
these events could prevent a new capital project from performing in accordance with our commercial expectations and could
materially and adversely affect our business and results of operations.

Show rotation affects our profitability and makes comparisons between periods difficult. GES results 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 different times of year from when they were previously held.
In addition, the same exhibition may change locations from year to year resulting in lower margins if the exhibition shifts to a
higher-cost location. Any of these factors could cause our results of operations to fluctuate significantly from quarter to
quarter or from year to year, making periodic comparisons difficult.

The United Kingdom’s exit from the European Union could adversely affect our business. We operate substantial parts of
our EU businesses from U.K-based entities. The June 23, 2016 U.K. referendum resulted in a determination that the U.K.
should exit the EU. In March 2017, the U.K. government initiated the exit process under Article 50 of the Treaty of the EU,
commencing a period of up to two years for the United Kingdom and the other EU member states to negotiate the terms of
the withdrawal. The uncertainty surrounding the timing, terms and consequences of the U.K.’s exit could adversely impact
customer and investor confidence, result in additional market volatility and adversely affect our businesses and our results of
operations and financial condition. Once the U.K. exits from the EU, the regulatory and legal environment that would then
govern our U.K. operations will depend on, in certain respects, the nature of the arrangements agreed to between the U.K.,
the EU, and other trading partners. It is likely that changes to our legal entity structure and operations in Europe will be
required as a result of these arrangements, which might result in a less efficient operating model across our European legal
entities.

Liabilities relating to prior and discontinued operations may adversely affect our results of operations. We, and our
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, we may incur other
liabilities, resulting from indemnification claims involving previously sold subsidiaries, as well as from past operations of
predecessors or their subsidiaries. Although we believe we have 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, materially and adversely affect our results of operations.

Item 1B. UNRESOLVED STAFF COMMENTS

None.

18

Item 2. PROPERTIES

We operate service or production facilities and maintain sales and service offices in the United States, Canada, the United
Kingdom, Germany, the United Arab Emirates, the Netherlands, Switzerland, Romania, and Hong Kong. Our principal
properties are operated by GES, Pursuit, and Viad Corporate.

GES

GES U.S. .....................................................
GES International:

Canada ......................................................
United Kingdom .......................................
Germany ...................................................
United Arab Emirates...............................
Netherlands...............................................
Switzerland...............................................
Romania....................................................
Hong Kong ...............................................
Total GES International ..............................
Total GES....................................................

Offices

Owned

Leased

Multi-use Facilities(1)

Owned

Leased

—

—
—
—
—
—
—
—
—
—
—

19

4
3
1
1
1
1
—
1
12
31

2

—
—
—
—
—
—
—
—
—
2

30

7
6
2
2
2
—
1
—
20
50

(1) Multi-use facilities include manufacturing, sales and design, office, storage and/or warehouse, and truck marshaling
yards. Multi-use facilities vary in size up to approximately 677,800 square feet at GES U.S. and approximately 133,600
square feet at GES International.

Pursuit

Offices(1).......................................................................................
Retail stores .................................................................................
Bus terminal.................................................................................
Garages(1) .....................................................................................
Attractions(1).................................................................................
Hotels/Lodges(1)(2) ........................................................................
Total Pursuit ...................................................................................

Owned

Leased

2
23
1
4
7
15
52

5
1
—
2
—
—
8

(1)

(2)

Includes four hotels/lodges, an office, all of the owned garages, and all of the Canadian-based attractions situated on
land subject to multiple long-term ground leases with the Canadian government.
Includes ancillary food and beverage services, retail, and recreational facilities.

Viad Headquarters

Our headquarters is leased and approximates 19,900 square feet, and is located at 1850 North Central Avenue, Suite 1900 in
Phoenix, Arizona 85004-4565.

We believe our facilities are adequate and suitable for our business operations and that capacity is sufficient for current
needs. For additional information related to our lease obligations, refer to Note 11 – Debt and Capital Lease Obligations and
Note 19 – Leases and Other of the Notes to Consolidated Financial Statements (Part II, Item 8 of this 2017 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 2017 Form 10-K) for information regarding legal proceedings for which we are involved.

19

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Other. EXECUTIVE OFFICERS OF THE REGISTRANT

Our executive officers as of December 31, 2017 were as follows:

Name
Steven W. Moster

Ellen M. Ingersoll

David W. Barry

Leslie S. Striedel

Age Business Experience During the Past Five Years and Other Information
48 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.

53 Chief Financial Officer since July 2002; prior thereto, Vice President-Controller or similar
position since 2002; prior thereto, Controller of CashX, Inc., a service provider of stored
value internet cards, from June 2001 through October 2001; prior thereto, Operations
Finance Director of LeapSource, Inc., a provider of business process outsourcing, from 2000
to June 2001; and prior thereto, Vice President and Controller of Franchise Finance
Corporation of America since 1992.

55 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; and prior
thereto, 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.

55 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 for KPMG LLP.

Our executive officers’ term of office is until our next Board of Directors annual organization meeting to be held on May 17,
2018.

20

PART II

Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is traded on the New York Stock Exchange under the symbol VVI. The high and low common stock
market prices per share were as follows:

First Quarter ................................................................................ $
Second Quarter............................................................................ $
Third Quarter............................................................................... $
Fourth Quarter............................................................................. $

48.30
48.85
61.65
61.85

$
$
$
$

42.40
42.05
46.05
53.65

$
$
$
$

29.84
32.29
37.85
47.40

$
$
$
$

25.90
27.96
30.21
34.40

2017

2016

High

Low

High

Low

Holders

As of January 31, 2018, there were 5,600 shareholders of record of our common stock, including 293 shareholders that had
not converted their shares following a reverse stock split effective on July 1, 2004.

Dividends

For the year ended December 31, 2017, our Board of Directors declared the following dividends:

Declaration Date
November 29, 2017...............
August 16, 2017 ....................
May 18, 2017 ........................
February 22, 2017 .................

Dividend Per Share
$
$
$
$

0.10
0.10
0.10
0.10

Record Date
December 15, 2017
September 8, 2017
June 2, 2017
March 10, 2017

Payable Date
January 2, 2018
October 2, 2017
July 3, 2017
April 3, 2017

For the year ended December 31, 2016, our Board of Directors declared the following dividends:

Declaration Date
December 1, 2016 .................
August 24, 2016 ....................
May 19, 2016 ........................
February 24, 2016 .................

Dividend Per Share
$
$
$
$

0.10
0.10
0.10
0.10

Record Date
December 16, 2016
September 9, 2016
June 3, 2016
March 11, 2016

Payable Date
January 3, 2017
October 3, 2016
July 1, 2016
April 1, 2016

Issuer Purchases of Equity Securities

During the fourth quarter of 2017, certain previously owned shares of common stock were surrendered by employees, former
employees, and non-employee directors for tax withholding requirements on vested share-based awards.

Period
October 1, 2017 - October 31, 2017...
November 1, 2017 - November 30,
2017..................................................
December 1, 2017 - December 31,
2017..................................................
Total .................................................

Total Number of
Shares Purchased

Average Price Paid
Per Share

2,968 $

497 $

11,151 $
14,616 $

59.83

55.55

57.60
57.98

Total Number of Shares
Purchased as Part of Publicly
Announced Plans or
Programs

—

—

—
—

Maximum Number of Shares
That May Yet Be Purchased
Under the Plans or Programs
440,540

440,540

440,540
440,540

Our Board of Directors has authorized us to repurchase shares of our common stock from time to time at prevailing market
prices. As of December 31, 2017, 440,540 shares remain available for repurchase. The Board’s authorization has no
expiration date. During the three months ended December 31, 2017, no shares were repurchased on the open market.

21

Performance Graph

The following graph compares the change in the cumulative total shareholder return, from December 31, 2012 to
December 31, 2017, on our 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, 2012.

 $300

 $250

 $200

 $150

 $100

 $50

 $-

2 0 1 2  

2 0 1 3  

2 0 1 4  

2 0 1 5  

2 0 1 6  

2 0 1 7  

Viad Corp

S&P 500

Russell 2000

S&P SmallCap 600

S&P 600 Comm. Services & Supplies

S&P 600 Media Index

2012

Viad Corp ................................................................ $ 100.00
S&P 500 .................................................................. $ 100.00
Russell 2000 ............................................................ $ 100.00
S&P SmallCap 600 ................................................. $ 100.00
S&P 600 Comm. Services & Supplies.................... $ 100.00
S&P 600 Media Index............................................. $ 100.00

Year Ended December 31,

2013
$ 114.17
$ 132.38
$ 138.82
$ 141.31
$ 143.41
$ 162.65

2014
$ 118.43
$ 150.47
$ 145.64
$ 149.42
$ 142.43
$ 190.80

2015
$ 127.22
$ 152.53
$ 139.21
$ 146.42
$ 139.00
$ 201.03

2016
$ 201.04
$ 170.76
$ 168.84
$ 185.16
$ 177.43
$ 180.37

2017
$ 254.60
$ 208.02
$ 193.54
$ 209.51
$ 189.99
$ 207.93

22

Item 6. SELECTED FINANCIAL DATA

(in thousands, except per share data)
Summary Statement of Operations Data
Revenue (1) :

2017

Year Ended December 31,
2015

2014

2016

2013

Exhibition and event services .......................................................... $
Exhibits and environments ..............................................................
Pursuit services ................................................................................
Total revenue .......................................................................................... $

Income from continuing operations (2).................................................... $
Income from continuing operations attributable to Viad common

967,352
165,745
173,868
1,306,965

58,452

stockholders......................................................................................... $

57,975

Basic and diluted income from continuing operations attributable to

Viad common stockholders per share (2).............................................. $
Dividends declared per common share .................................................. $
Other Data

2.84
0.40

Adjusted EBITDA (3) ....................................................................... $

137,550

(in thousands)
Summary Balance Sheet Data

2017

Cash and cash equivalents ............................................................... $
Total assets ...................................................................................... $
Total debt and capital lease obligations........................................... $
Redeemable noncontrolling interest (4) ............................................ $
Total stockholders’ equity ............................................................... $
Non-redeemable noncontrolling interest ......................................... $

53,723
919,899
209,192
6,648
442,937
13,806

$

$

$

$

$
$

$

$
$
$
$
$
$

881,137
170,469
153,364
1,204,970

43,479

42,953

2.12
0.40

112,428

$

$

$

$

$
$

$

799,752
177,126
112,170
1,089,048

27,442

27,000

1.34
0.40

76,801

$

$

$

$

$
$

$

772,770
171,698
120,519
1,064,987

41,178

40,790

2.02
1.90

73,954

$

$

$

$

$
$

$

685,350
159,554
108,443
953,347

19,320

19,437

0.96
2.90

59,157

2016

December 31,
2015

2014

2013

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

(1)

(2)

(3)

(4)

The 2017 amounts include $1.4 million in revenue from our Poken acquisition. The 2016 amounts include an aggregate
$55.7 million in revenue from our acquisitions of ON Services, CATC Alaska Tourism Corporation (“CATC”),
Maligne Lake Tours Ltd. (“Maligne Lake Tours”), and FlyOver Canada. The 2014 amounts include an aggregate $21.2
million in revenue from our acquisitions of the West Glacier Properties, Blitz, onPeak, and N200. Refer to Note 3 –
Acquisition of Businesses of the Notes to Consolidated Financial Statements (Part II, Item 8 of this 2017 Form 10-K).
Income from continuing operations includes the following items:

•

•

•

Restructuring charges, pre-tax, of $1.0 million in 2017, $5.2 million in 2016, $3.0 million in 2015, $1.6 million
in 2014, and $3.8 million in 2013. Refer to Note 18 – Restructuring Charges of the Notes to Consolidated
Financial Statements (Part II, Item 8 of this 2017 Form 10-K).

Impairment charges (recoveries), pre-tax, net, of $(29.1) million in 2017, $0.2 million in 2016, $0.1 million in
2015, $0.9 million in 2014, and $1.0 million in 2013. Refer to Note 6 – Property and Equipment of the Notes to
Consolidated Financial Statements (Part II, Item 8 of this 2017 Form 10-K).

Income tax expense in 2017 included a $16.1 million charge related to the Tax Act. 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 $11.7 million valuation allowance release related to our foreign tax
credit and state net operating loss carryforwards. Refer to Note 16 – Income Taxes of the Notes to Consolidated
Financial Statements (Part II, Item 8 of this 2017 Form 10-K).

Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (Part II, Item 7 of
this 2017 Form 10-K) for a discussion of the “Non-GAAP Measures.”
On November 3, 2017, we acquired the controlling interest (54.5% of the common stock) in Esja, a private corporation
in Reykjavik, Iceland, The Esja acquisition contains a put option that gives the minority Esja shareholders the right to
sell (or “put”) their Esja shares to us based on a calculated formula within a predefined term.

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. The MD&A is intended to assist you in understanding our financial condition and
results of operations. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual
results could differ materially from those anticipated due to various factors discussed under “Risk Factors,” “Forward-
Looking Statements,” and elsewhere in this 2017 Form 10-K.

Overview

We are an international experiential services company with operations in the United States, Canada, the United Kingdom,
continental Europe, and the United Arab Emirates. We are committed to providing unforgettable experiences to our clients
and guests. We operate 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 clients 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 and lodges, world-class
recreational attractions, and ground transportation services.

24

Results of Operations

Financial Highlights

Year Ended December 31,

2017

(in thousands, except per share data)
Revenue....................................................... $ 1,306,965
57,707
Net income attributable to Viad .................. $
Segment operating income (1)...................... $
97,051
Diluted income per common share from
continuing operations attributable to Viad
common stockholders ................................. $

2.84

2016
$ 1,204,970
42,269
$
85,928
$

2015
$ 1,089,048
26,606
$
54,584
$

Percentage
Change
2017 vs. 2016

Percentage
Change
2016 vs. 2015

8.5%
36.5%
12.9%

10.6%
58.9%
57.4%

$

2.12

$

1.34

34.0%

58.2%

2017 compared with 2016

•

•

•

Total revenue increased $102.0 million or 8.5%, mainly due to the incremental revenue from the ON Services
and FlyOver Canada acquisitions, and to a lesser degree, the Poken, and CATC acquisitions, of $52.6 million and
underlying growth at GES and Pursuit, offset in part by negative show rotation of approximately $8 million and
an unfavorable foreign exchange impact of $5.6 million.

Net income attributable to Viad increased $15.4 million or 36.5%, primarily due to impairment recoveries of
$29.1 million related to the Mount Royal Hotel fire, higher segment operating income, and a decrease in
restructuring charges, offset in part by higher tax expense, including a $16.1 million charge as a result of the Tax
Cuts and Jobs Act (the “Tax Act”) enacted on December 22, 2017, higher corporate activities expense due to an
increase in performance-based compensation driven by our stock price appreciation, and higher interest expense.

Total segment operating income(1) increased $11.1 million or 12.9%, primarily due to the increase in revenue.

2016 compared with 2015

•

•

•

Total revenue increased $115.9 million or 10.6%, mainly due to the incremental revenue from the 2016
acquisitions, 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%, primarily due to increased segment
operating income at GES and Pursuit, offset in part by higher income tax expense.

Total segment operating income(1) increased $31.3 million or 57.4%, primarily due to high flow-through on the
increase in revenue.

(1)

Refer to Note 22 – Segment Information of the Notes to Consolidated Financial Statements (Part II, Item 8 of this 2017
Form 10-K) for a reconciliation of the non-GAAP financial measure, segment operating income, to the most directly
comparable GAAP measure.

25

Foreign Exchange Rate Variances

We conduct our foreign operations primarily in Canada, the United Kingdom, the Netherlands, Germany, and to a lesser
extent, in certain other countries.

2017 compared with 2016

The following table summarizes the foreign exchange rate variance effects (or “FX Impact”) on revenue and segment
operating results from our significant international operations for the years ended December 31, 2017 and 2016, excluding
the effect of acquisitions completed during 2017 and 2016:

Revenue

Weighted-Average
Exchange Rates

FX Impact

Segment Operating Results

Weighted-Average
Exchange Rates

FX Impact

2017

2016

(in thousands)

2017

2016

(in thousands)

GES:

Canada (CAD)................................................... $
United Kingdom (GBP) .................................... $
Europe (EUR).................................................... $

0.77 $
1.29 $
1.14 $

0.76 $
1.35
1.11

775 $
(9,001) $
970 $

(7,256)

0.77 $
1.30 $
1.15 $

0.76 $
1.33
1.10

Pursuit:

Canada (CAD)................................................... $

0.78 $

0.77

1,676 $
(5,580)

$

0.78 $

0.76

$

(114)
(160)
131
(143)

710
567

2016 compared with 2015

The following table summarizes the FX Impact on revenue and segment operating results from our significant international
operations for the years ended December 31, 2016 and 2015, excluding the effect of acquisitions completed during 2016:

Revenue

Weighted-Average
Exchange Rates

FX Impact

Segment Operating Results

Weighted-Average
Exchange Rates

FX Impact

2016

2015

(in thousands)

2016

2015

(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)

0.76 $
1.34 $
1.10 $

0.79 $
1.53
1.11

Pursuit:

Canada (CAD)................................................... $

0.77 $

0.78

(1,307) $

0.76 $

0.78

$

(23,955)

$

(77)
(632)
36
(673)

91
(582)

The 2017 and 2016 revenue and segment operating results were primarily impacted by the weakening of the British pound
relative to the U.S. dollar. Future changes in the exchange rates may impact overall expected profitability and historical
period-to-period comparisons when revenue and segment operating results are translated into U.S. dollars.

26

Analysis of Revenue and Operating Results by Reportable Segment 

GES 

2017 compared with 2016 
The following table presents a comparison of GES’ reported revenue and segment operating results to organic revenue(3) and 
organic segment operating results(3) for the years ended December 31, 2017 and 2016.

Year Ended December 31, 2017 

Year Ended December 31, 2016 

Change 

 As Reported    Acquisitions(1)(cid:3)(cid:3)(cid:3)

FX 

Impact   Organic(3)

As Reported   Acquisitions(2) Organic(3)(cid:3) (cid:3)(cid:3)

As

Reported   Organic(3) (cid:3)

(in thousands) 
Revenue: 
GES: 

U.S. .............   $  872,154    $ 
International ..      282,712      
Intersegment 
eliminations ...     

(21,769 )    
Total GES ......  $ 1,133,097    $ 
Segment 
operating 
income
(loss)(4):(cid:3)
GES: 

U.S. .............   $ 
International ..     
Total GES ......  $ 

34,494    $ 
15,475      
49,969    $ 

72,441    $  —  $ 799,713  $ 826,408  $
248,503    

917      (7,256)  

289,051   

30,737  $ 795,671      

5.5%  
248,503       13.8%  

—   

0.5%
16.3%

—       —   

(20,172)   
73,358    $ (7,256) $1,066,995  $1,054,739  $

(21,769)  

—   

(20,172 )    
30,737  $1,024,002      

(7.9)%  
7.4%  

(7.9)%
4.2%

(5,043 )  $  —  $
(143)  
(5,973 )  $  (143) $

(930 )    

39,537  $
16,548   
56,085  $

40,524  $
9,699    
50,223  $

(764) $
—   
(764) $

41,288       (14.9)%  
9,699       59.6%  
(0.5)%  
50,987      

(4.2)%
70.6%
10.0%

 (1)  Acquisitions include ON Services (acquired August 2016) for GES U.S. and Poken (acquired March 2017) for GES 

(2)

(3)

(4)

International and GES U.S. 
To  maximize  synergies,  GES’  existing  in-house  audio-visual  services  team  was  merged  into  ON  Services. 
Accordingly, GES U.S. acquisitions include results from the existing in-house audio-visual team. 
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 22 – Segment Information of the Notes to Consolidated Financial Statements (Part II, Item 8 of this 2017 
Form  10-K)  for  a  reconciliation  of  the  non-GAAP  financial  measure,  segment  operating  income  (loss),  to  the  most 
directly comparable GAAP measure. 

GES U.S. 

GES U.S. revenue increased $45.7 million or 5.5%, primarily due to incremental revenue of $41.7 million mainly from the 
ON Services acquisition and, to a lesser degree, the Poken acquisition, base same-show revenue growth of 4.8%, and new 
business wins, offset in part by a low margin contract that expired in 2016 and was not renewed and negative show rotation 
of approximately $11 million. Base same-show revenue represented 35.4% of GES U.S. organic revenue*. Organic revenue* 
increased $4.0 million or 0.5%.  

GES U.S. operating income decreased $6.0 million or 14.9%, primarily due to a less favorable mix of revenue, additional 
depreciation  and  amortization  expense  from  the  acquisition  of  ON  Services  and  cost  increases,  offset  in  part  by  lower 
performance-based incentives and income of $2.8 million from a favorable contract settlement. Organic operating income* 
decreased $1.8 million or 4.2%. 

GES International  
GES International revenue increased $34.2 million or 13.8%, primarily due to new business wins, same-show growth, and 
positive  show  rotation  of  approximately  $3  million,  offset  in  part  by  an  unfavorable  FX  Impact  of  $7.3  million.  Organic 
revenue* increased $40.5 million or 16.3%. 

GES International operating income increased $5.8 million or 59.6%, primarily due to higher revenue. Organic operating 
income* increased $6.8 million or 70.6%. 

* Refer to footnote (3) in the above table for more information about the non-GAAP financial measures of organic revenue 
and organic segment operating results.        

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2018 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 2018, we expect GES’ revenue will be up slightly from 2017. Show rotation is expected to have a net negative impact on 
GES’ revenue of approximately $40 million compared to 2017. We expect GES U.S. base same-show revenue to increase at 
a mid-single digit rate. We anticipate a favorable FX Impact of approximately $18 million on GES’ 2018 full year revenue 
and approximately $0.5 million on GES’ segment operating income. The expected FX Impact assumes that the U.S. dollar to 
the British pound exchange rate will be $1.39 and the U.S. dollar to the Canadian dollar exchange rate will be $0.81 during 
2018. For more information about segment operating income, see the “Non-GAAP Measures” section of this MD&A. 

We are 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.  To  support  this  strategy,  since  2014,  we 
have acquired two leading audio-visual production businesses and four leading event technology businesses that complement, 
enhance, and expand our current business and offer higher-margin growth opportunities. We continue 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  2018,  we  intend  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, we remain focused on improving GES’ profitability through continued efforts to effectively manage labor costs 
by driving productivity gains through rigorous and strategic pre-show planning and on-site labor management that reduces 
the ratio of labor costs to revenue. Improving this metric is our top priority as we continue to develop and enhance tools to 
support and systematize show site labor planning, measurement, and benchmarking. 

2016 compared with 2015 
The following table provides a comparison of GES’ reported revenue and segment operating results to organic revenue(2) and 
organic segment operating results(2) for the years ended December 31, 2016 and 2015. 

(cid:3)

(cid:3)

Year Ended December 31, 2016 

Year Ended December 31, 2015 

Change 

(cid:3)As Reported    Acquisitions(1)(cid:3)(cid:3)(cid:3)

FX 
Impact

  Organic(2)

As

Reported   Acquisitions Organic(2)(cid:3)(cid:3)(cid:3)

As

Reported    Organic(2) (cid:3)

(in thousands) 
Revenue: 
GES: 

U.S. .................   $  826,408    $ 
International ...      248,503      
Intersegment 
eliminations ....     

(20,172 )    
Total GES ............  $ 1,054,739    $ 
Segment 
operating income 
(loss)(3):(cid:3)
GES: 

U.S. .................   $ 
International ...     
Total GES ............  $ 

40,524    $ 
9,699      
50,223    $ 

** Change is greater than +/- 100%.  

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%

(1)

(2)

(3) 

Acquisition for GES U.S. includes ON Services (acquired August 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. 
Refer to Note 22 – Segment Information of the Notes to Consolidated Financial Statements (Part II, Item 8 of this 2017 
Form  10-K)  for  a  reconciliation  of  the  non-GAAP  financial  measure,  segment  operating  income  (loss)  to  the  most 
directly comparable GAAP measure. 

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GES U.S.  

GES U.S. revenue increased $105.5 million or 14.6%, primarily due to positive show rotation of approximately $59 million, 
base same-show revenue growth of 4.1%, 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%  of  GES  U.S.  2016 
organic revenue*. Organic revenue* increased $84.2 million or 11.7%.  

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 our 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%, 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%. 

GES International operating income decreased $2.5 million or 20.6%, 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%. 

* Refer to footnote (2) in the above table for more information about the non-GAAP financial measures of organic revenue 
and organic segment operating results. 

Pursuit

2017 compared with 2016 
The following table provides a comparison of Pursuit’s reported revenue and segment operating results to organic revenue(2)
and organic segment operating results(2) for the years ended December 31, 2017 and 2016. 

Year Ended December 31, 2017 

As

FX 

Reported     Acquisitions(1)(cid:3)

Impact   Organic(2)

Year Ended December 31, 2016 
As

Reported   Acquisitions(1) Organic(2)(cid:3)(cid:3)(cid:3)

Change 

As

Reported    Organic(2) (cid:3)

(in thousands) 
Revenue: 
Pursuit: 

Hospitality ..............   $  57,852    $ 
Attractions ..............      98,525      
Transportation ........      13,873      
Travel Planning ......     
4,664      
Intra-Segment 
Eliminations & 
Other .......................     

(1,046 )    
Total Pursuit ................  $ 173,868    $ 

Segment operating 
income(3):(cid:3)
Total Pursuit ................  $  47,082    $ 

13,279 $ 232  $ 44,341  $ 59,757  $
23,517   1,266    73,742    65,945    
211    13,662    11,833    
3,374    17,631    
26   

—  
1,264  

12,834 $ 46,923      
(3.2)%  
13,698   52,247       49.4%  
—   11,833       17.2%  
1,540   16,091       (73.5)%  

(5.5)%
41.1%
15.5%
(79.0)%

—  

(1,802)   
38,060 $1,676  $134,132  $153,364  $

(987)  

(59)  

—  

(1,802 )     42.0%  
28,072 $125,292       13.4%  

45.2%
7.1%

5,819 $ 710  $ 40,553  $ 35,705  $

6,000 $ 29,705       31.9%  

36.5%

 (1)  Acquisitions include CATC (acquired March 2016), FlyOver Canada (acquired December 2016), and FlyOver Iceland 

(acquired November 2017). 

(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. 

(3)   Refer to Note 22 – Segment Information of the Notes to Consolidated Financial Statements (Part II, Item 8 of this 2017 
Form 10-K) for a reconciliation of the non-GAAP financial measure, segment operating income, to the most directly 
comparable GAAP measure. 

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Pursuit revenue increased $20.5 million or 13.4%, due to strong growth in organic attractions revenue primarily driven by 
the fully renovated Banff Gondola (which was closed for renovations from October 2015 through April 2016), incremental 
revenue of $10.0 million primarily from the FlyOver Canada acquisition and, to a lesser degree, the CATC acquisition, and a 
favorable  FX  Impact  of  $1.7  million,  offset  in  part  by  a  reduction  in  travel  planning  revenue  as  Pursuit  completed  the 
previously announced downsizing of the Banff Jasper Collection’s package tours line of business and a revenue decline of 
$5.4 million due to the fire-related closure of the Mount Royal Hotel. Organic revenue* increased $8.8 million or 7.1%.  

Pursuit  operating  income  increased  $11.4  million  or  31.9%,  primarily  due  to  the  increase  in  revenue  from  high-margin 
attractions.  Operating  income  included  a  $2.5  million  business  interruption  gain  for  the  recovery  of  lost  profits  from  the 
Mount Royal Hotel in 2017. Organic operating income* increased $10.8 million or 36.5%.  

2018 Outlook

For 2018, we expect Pursuit’s revenue to increase at a high-single to low-double digit rate. We expect a favorable impact to 
Pursuit’s revenue of approximately $5 million from the planned re-opening of the Mount Royal Hotel in mid-year 2018. As 
of December 31, 2017, we had a deferred business interruption recovery of $1 million relating to 2018 lost profits from the 
Mount Royal Hotel that will be recognized in Pursuit’s segment operating results during the first half of 2018. We expect to 
incur  start-up  costs  of  approximately  $1  million  related  to  the  development  of  our  FlyOver  Iceland  attraction,  which  is 
expected to open in 2019. We anticipate a favorable FX Impact of approximately $5 million on Pursuit’s 2018 revenue and 
approximately $1 million on segment operating income. In addition to these factors, we expect organic growth across the rest 
of Pursuit’s lines of business. 

2016 compared with 2015 
The following table provides a comparison of Pursuit’s reported revenue and segment operating results to organic revenue(2)
and organic segment operating results(2) for the years ended December 31, 2016 and 2015. 

(cid:3)

(in thousands) 
Revenue: 
Pursuit: 

(cid:3)

(cid:3)

Year Ended December 31, 2016 

Year Ended December 31, 2015 

Change 

As

FX 

Reported     Acquisitions(1)

Impact    Organic(2)

As

Reported   Acquisitions Organic(2)(cid:3)(cid:3)(cid:3)

As

Reported    Organic(2) (cid:3)

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(3):(cid: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)

(2)

Acquisitions  include  Maligne  Lake  Tours  (acquired  January  2016),  CATC  (acquired  March  2016),  and  FlyOver 
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 22 – Segment Information of the Notes to Consolidated Financial Statements (Part II, Item 8 of this 2017 
Form 10-K) for a reconciliation of the non-GAAP financial measure, segment operating income, to the most directly 
comparable GAAP measure. 

Pursuit  revenue  increased  $41.2  million  or  36.7%,  primarily  due  to  incremental  revenue  of  $34.4  million  from  the  2016 
acquisitions of  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%.  

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Pursuit operating income increased $7.9 million or 28.4%, 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%.  

* Refer to footnote (2) in the above table for more information about the non-GAAP financial measures of organic revenue 
and organic segment operating results. 

Performance Measures

We use the following key business metrics, common in the hospitality industry, to evaluate Pursuit’s hospitality business: 

(cid:120)

(cid:120)

(cid:120)

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). 

We evaluate the performance of Pursuit’s attractions business utilizing the number of passengers and total attractions revenue 
per  passenger.  The  number  of  passengers  allows  us  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. 

31 

2017 compared with 2016

The following table provides Pursuit’s same-store key performance indicators for the years ended December 31, 2017 and
2016. The same-store metrics indicate the performance of all of Pursuit’s properties and attractions that we owned and
operated 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. We believe this same-store constant
currency basis provides better comparability between reporting periods.

2017

Year Ended December 31,
2016

% Change

Same-Store Key Performance Indicators (1)
Hospitality:

Room nights available .........................................................................
RevPAR ............................................................................................... $
ADR..................................................................................................... $
Occupancy ...........................................................................................

181,242
126
180
70.2%

Attractions:

Passengers............................................................................................
Revenue per passenger ........................................................................ $

1,793,779
42

179,420
118
171
69.2%

1,594,508
33

$
$

$

1.0%
6.8%
5.3%
1.0%

12.5%
27.3%

(1)

Same-Store Key Performance Indicators exclude the CATC hospitality properties and attraction (acquired in March
2016) and the FlyOver Canada attraction (acquired in December 2016), as we did not own them for the entirety of
2016. Additionally, the Same-Store Key Performance Indicators exclude the Mount Royal Hotel hospitality property
due to its fire-related closure (effective December 2016). The Banff Gondola attraction was closed for renovations
from October 2015 through April 2016. Accordingly, 2016 includes only eight months of operation whereas 2017
includes the full year of operations.

Hospitality. Room nights available increased during 2017 primarily due to changes in the opening dates of certain seasonal
properties. RevPAR, ADR, and Occupancy increased during 2017 primarily due to our focus on revenue management and
refreshing key assets to enhance the guest experience, as well as strong park visitation during 2017.

Attractions. The increase in the number of passengers during 2017 was primarily due to increased visitation at our Banff
Gondola, which was closed for renovations during the first four months of 2016. Excluding the Banff Gondola, total same-
store attraction passengers increased 53,225 in 2017 primarily driven by our efforts to enhance the guest experience and
strong park visitation in Canada.

Revenue per passenger increased during 2017 primarily due to higher effective ticket prices driven by our focus on revenue
management and refreshing key assets to enhance the guest experience, and higher ancillary revenue primarily resulting from
our recent renovations of the food and beverage and retail operations at the Banff Gondola and the food and beverage
operations at the Columbia Icefield Glacier Discovery Center.

During 2017, Pursuit derived approximately 64% of its revenue and 86% 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. Additionally,
Pursuit is affected by consumer discretionary spending on tourism activities.

32

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 indicate the performance of all of Pursuit’s properties and attractions that we owned and
operated 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. We believe 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%

Attractions:

Passengers ...........................................................................................
Revenue per passenger ........................................................................ $

1,478,172
31

228,739
97
143
67.4%

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 we did not own them for the entirety of 2016. Same-store passengers and revenue per passenger
were affected by the closure of the Banff Gondola from October 2015 through April 2016.

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.

RevPAR increased during the year ended December 31, 2016 due to increases in both ADR and occupancy across all
geographies resulting from our 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% 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% 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.

33

Corporate Activities

(in thousands)
Corporate activities ............. $

2017

2016

2015

Percentage Change
2017 vs. 2016

Percentage Change
2016 vs. 2015

12,877

$

10,322

$

9,720

24.8%

6.2%

Year Ended December 31,

The increase in corporate activities during 2017, as compared to 2016, was primarily due to an increase in performance-based
compensation expense driven by our common stock price appreciation relative to December 31, 2016. The increase in
corporate activities during 2016, as compared to 2015, was 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.

Interest Expense

(in thousands)
Interest expense................... $

2017

2016

2015

Percentage Change
2017 vs. 2016

Percentage Change
2016 vs. 2015

8,304

$

5,898

$

4,535

40.8%

30.1%

Year Ended December 31,

The increase in interest expense during 2017, as compared to 2016, and during 2016, as compared to 2015, was primarily due
to higher debt balances resulting from acquisitions completed during 2016 and 2017.

Restructuring Charges

(in thousands)
Restructuring charges.......... $

2017

2016

2015

Percentage Change
2017 vs. 2016

Percentage Change
2016 vs. 2015

1,004

$

5,183

$

2,956

(80.6)%

75.3%

Year Ended December 31,

Restructuring charges during 2017, 2016 and 2015 were primarily related to the elimination of certain positions and facility
consolidations in GES, as well as the elimination of certain positions at our corporate office and at Pursuit.

Impairment Charges (Recoveries)

(in thousands)
Impairment charges
(recoveries), net ................... $

** Change is greater than +/- 100%.

Year Ended December 31,

2017

2016

2015

Percentage Change
2017 vs. 2016

Percentage Change
2016 vs. 2015

(29,098) $

218

$

96

**

**

On December 29, 2016, the Mount Royal Hotel was damaged by a fire and closed. During July 2017, we resolved our
property and business interruption insurance claims related to the fire for a total of $36.3 million. We allocated $2.2 million
to an insurance receivable, $29.3 million was recorded as an impairment recovery (partially offset by impairment charges of
$0.2 million) related to construction costs to re-open the hotel, $2.5 million was recorded as a business interruption gain for
the recovery of lost profits, $1.3 million was recorded as contra-expense to offset non-capitalizable costs we incurred, and the
remaining $1.0 million was recorded as deferred income that will be recognized over the periods the business interruption
losses are actually incurred.

Income Taxes

Excluding the impact of a $16.1 million net charge related to the Tax Act, income taxes went from an effective tax rate of
33% for the year ended December 31, 2016 to an effective rate of 28% for the year ended December 31, 2017. The decrease
was primarily due to higher foreign income taxed at lower rates, the release of a valuation allowance related to foreign net
operating losses, and the adoption of new accounting guidance, effective in the first quarter of 2017, which requires the
excess tax benefit on share-based compensation to be recorded to income tax expense rather than equity. The 2016 effective
tax rate of 33% increased from 28% in 2015 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.

34

Liquidity and Capital Resources

Cash and cash equivalents were $53.7 million as of December 31, 2017, as compared to $20.9 million as of December 31,
2016. During the year ended December 31, 2017, we generated net cash flow from operating activities of $112.2 million. We
believe that our existing sources of liquidity will be sufficient to fund operations and capital commitments for at least the next
12 months.

As of December 31, 2017, approximately $52.0 million of our cash and cash equivalents was held outside of the United
States, consisting of $22.6 million in Canada, $8.3 million in the Netherlands, $7.0 million in the United Kingdom, and $4.5
million in certain other countries. In addition, there is $9.6 million in Iceland related to our investment in Esja, which will be
used to develop the FlyOver Iceland attraction. With the enactment of the Tax Act on December 22, 2017, we recognized the
taxes on the deemed repatriation of all earnings outside of the U.S. as of December 31, 2017. All earnings have been deemed
permanently reinvested by management. As of December 31, 2017, the incremental tax associated with these earnings, if the
cash balances were repatriated to the United States, would be zero.

Cash Flows

Operating Activities

(in thousands)
Net income................................................................................................. $
Depreciation and amortization ..................................................................
Deferred income taxes...............................................................................
Loss from discontinued operations............................................................
Impairment charges (recoveries) ...............................................................
Other non-cash items.................................................................................
Changes in assets and liabilities ................................................................

Net cash provided by operating activities ........................................ $

2017

Year Ended December 31,
2016

2015

58,184
55,114
26,049
268
(29,098)
18,422
(16,716)
112,223

$

$

42,795
42,743
7,672
684
218
19,239
(13,033)
100,318

$

$

27,048
35,231
469
394
96
11,090
(14,051)
60,277

2017 compared with 2016

Net cash provided by operating activities increased $11.9 million primarily from results of operations.

2016 compared with 2015

Net cash provided by operating activities increased $40.0 million, primarily from results of operations.

35

Investing Activities

(in thousands)
Capital expenditures .................................................................................. $
Proceeds from insurance............................................................................
Cash paid for acquired businesses, net ......................................................
Proceeds from dispositions of property and other assets...........................

Net cash used in investing activities.................................................. $

2017

Year Ended December 31,
2016

2015

(56,621) $
31,570
(1,501)
947
(25,605) $

(49,815) $
—
(195,989)
1,166
(244,638) $

(29,839)
—
(430)
1,542
(28,727)

2017 compared with 2016

Net cash used in investing activities decreased $219.0 million, primarily due to cash payments, net of cash acquired, in 2016
of $196.0 million for the ON Services, FlyOver Canada, CATC, and Maligne Lake Tours acquisitions, and the Mount Royal
Hotel fire-related insurance proceeds received in 2017, offset in part by an increase in capital expenditures.

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 2016 acquisitions of ON Services, FlyOver Canada, CATC, and Maligne Lake Tours, and an increase
in capital expenditures, primarily due to the Banff Gondola renovations.

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......................... $

2017

Year Ended December 31,
2016

2015

$

90,004
(135,801)
(8,160)
(5)
(2,119)
—
—
(56,081) $

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)

2017 compared with 2016

The change in net cash provided by (used in) financing activities was primarily due to net debt payments of $45.8 million
during 2017 compared to net debt proceeds of $120.8 million during 2016 related to the ON Services, CATC, and FlyOver
Canada acquisitions completed in 2016 and an increase in cash used for common stock repurchases of $1.4 million.

2016 compared with 2015

The change in net cash provided by (used in) financing activities was primarily due to net debt proceeds of $120.8 million
during 2016 related to the ON Services, CATC, and FlyOver Canada acquisitions and a decrease in cash used for common
stock repurchases of $4.1 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 2017 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 2017 Form 10-K) for further discussion.

36

Share Repurchases

Our Board of Directors has authorized us to repurchase shares of our common stock from time to time at prevailing market
prices. No shares were repurchased on the open market during 2017 or 2016. During 2015, we repurchased 141,462 shares on
the open market for $3.8 million. As of December 31, 2017, 440,540 shares remained available for repurchase. The Board of
Director’s authorization does not have an expiration date. We repurchased 41,532 shares for $2.1 million in 2017, 25,432
shares for $0.7 million during 2016, and 35,649 shares for $1.0 million in 2015 related to tax withholding requirements on
vested share-based awards.

Contractual Obligations

The following table presents our contractual obligations as of December 31, 2017.

(in thousands)
Revolver and term loan borrowings................................. $ 207,322
156,569
Operating leases ...............................................................
Pension and postretirement benefits (1).............................
33,666
Purchase obligations (2) ....................................................
38,128
2,854
Capital lease obligations ..................................................
Total contractual obligations (3)............................... $ 438,539

Total

2018
$ 151,072
23,503
3,945
23,660
1,527
$ 203,707

Payments due by period
2021-2022

2019-2020

$

56,250
37,564
6,763
8,813
1,311
$ 110,701

$

$

— $

14,367
6,721
5,655
16
26,759

Thereafter
—
81,135
16,237
—
—
97,372

$

(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 2017
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 are excluded from the table above as the timing and amounts of future cash
outflows are uncertain. Redeemable noncontrolling interest is also excluded from the above table as the redemption
value of the put option and the timing and amounts of future cash outflows is uncertain. Refer to Note 9 – Other
Current Liabilities, Note 10 – Other Deferred Items and Liabilities, and Note 21 – Redeemable Noncontrolling Interest
of the Notes to Consolidated Financial Statements (Part II, Item 8 of this 2017 Form 10-K) for further information.

We are plaintiffs or defendants to various actions, proceedings, and pending claims, some of which involve, or may involve,
compensatory, punitive, or other damages. Additionally, our business contributes to various multi-employer pension plans
based on obligations arising under collective-bargaining agreements covering our 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 2017 Form 10-K) for further information.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements with unconsolidated special-purpose or other entities that would
materially affect our financial position, results of operations, liquidity, or capital resources. Furthermore, we do 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 us to liability or risks of loss that are not reflected in the
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 2017 Form 10-K) for further information.

Critical Accounting Policies and Estimates

The consolidated financial statements are prepared in accordance with U.S. GAAP. We are required to make estimates and
assumptions that affect our reported amounts of assets, liabilities, revenue, and expenses. Critical accounting policies are
those policies that are most important to the portrayal of our financial position and results of operations, and that require us to
make the most difficult and subjective judgments, often as a result of the need to make estimates of matters that are
inherently uncertain. We identified and discussed with our audit committee the following critical accounting policies and
estimates and the methodology and disclosures related to those estimates:

37

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
intangible asset’s carrying value may not be recoverable.

Goodwill is tested for impairment at the reporting unit level on an annual basis as of October 31, and between annual tests if
an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its
carrying value. Our reporting units are defined, and goodwill is tested, at either an operating segment level or at the
component level of an operating segment, 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.

is assigned to, and tested at,

GES U.S. goodwill
level (all GES domestic operations). GES
International goodwill is assigned to and tested based on the segment’s geographical operations (GES Europe, Middle East,
and Asia (“GES EMEA”) and GES Canada). Pursuit impairment testing is performed at the reporting unit level (Banff Jasper
Collection, the Alaska Collection, the Glacier Park Collection, and FlyOver).

the operating segment

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

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

As noted above, the estimates and assumptions regarding expected future cash flows, discount rates, and terminal values
require considerable judgment and are based on market conditions, financial forecasts, industry trends, and historical
experience. These estimates have inherent uncertainties, and different assumptions could lead to materially different results.
As of December 31, 2017, our aggregate goodwill was $270.6 million. As a result of our most recent impairment analysis
performed as of October 31, 2017, the excess of the estimated fair value over the carrying value for each of our reporting
units (expressed as a percentage of the carrying amounts) under step one of the impairment test for GES U.S. was 134%,
GES EMEA was 214%, GES Canada was 164%, Banff Jasper Collection was 147%, the Alaska Collection was 99%, the
Glacier Park Collection was 16%, and FlyOver was 29%. Significant reductions in our 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, we perform 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 indicate that expected future undiscounted cash flows are less than the carrying
value of the related assets, we perform a measurement of impairment and we recognize any carrying amount in excess of fair
value as an impairment. We periodically evaluate the continued recoverability of intangible assets which were previously
evaluated due to an impairment indicator to determine if remeasurement is necessary.

Income taxes — We are required to estimate and record provisions for income taxes in each of the jurisdictions in which we
operate. Accordingly, we must estimate our 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 the Consolidated Balance Sheets. We use significant judgment in
forming conclusions regarding the recoverability of our deferred tax assets and evaluate 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. We had gross deferred tax assets of $38.1 million as of December 31,
2017 and $58.3 million as of December 31, 2016, which includes the remeasurement due to the reduction in the U.S. tax rate
from 35% to 21% resulting in an $8.0 million reduction in the 2017 gross deferred tax assets. 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.

38

While we believe 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 our valuation allowance. Such a change could result in a material increase or decrease to income tax expense in
the period the assessment was made.

Due to the enactment of the Tax Act and the transition to a territorial tax system, we recognized $6.9 million of current
federal tax expense and $1.2 million of current state tax expense for the mandatory deemed repatriation of our estimated
unremitted earnings as of December 31, 2017. With the transition to a territorial tax system, future dividends will be fully
deductible for federal tax purposes, however they may be taxable at the state level. We have not recorded deferred taxes on
the incremental additional state taxes or withholding taxes on dividends from our foreign subsidiaries as we intend to reinvest
those earnings in our foreign operations.

We record uncertain tax positions on the basis of a two-step process: first we determine whether it is more-likely-than-not
that the tax positions will be sustained on the basis of the technical merits of the position; and if so, we recognize the largest
amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.

Pension and postretirement benefits — Our 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. We presently anticipate contributing $1.1 million to our
funded pension plans and $1.0 million to our unfunded pension plans in 2018.

We 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 employees’ service period. In addition, we
retain the obligations for these benefits for retirees of certain sold businesses. While the plans have no funding requirements, we
expect to contribute $1.1 million to the plans in 2018.

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 2017 Form 10-K) for further
information.

Share-based compensation — We grant share-based compensation awards to our officers, directors, and certain key
employees pursuant to the 2017 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 was $11.0 million in 2017, $8.0
million in 2016, and $3.8 million in 2015, and the total tax benefits related to such costs were $4.1 million in 2017, $3.0
million in 2016, and $1.5 million in 2016. No share-based compensation costs were capitalized during 2017, 2016, or 2015.

The fair value of restricted stock awards is based on our 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 our 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 our 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. We use the Black-Scholes option pricing model and key assumptions to determine the fair
value of each stock option grant. These assumptions include our 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 our
common stock, and the risk-free interest rate. While we have 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 our future results of operations. Refer to Note 2 – Share-Based Compensation of the Notes to Consolidated Financial
Statements (Part II, Item 8 of this 2017 Form 10-K) for further information.

Impact of Recent Accounting Pronouncements

Refer to Note 1 – Overview and Summary of Significant Accounting Policies of the Notes to Consolidated Financial
Statements (Part II, Item 8 of this 2017 Form 10-K) for further information.

39

Non-GAAP Measures

In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting
principles (“GAAP”), we also disclose non-GAAP financial measures of Adjusted EBITDA, Segment operating income,
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. We believe the presentation of the Non-GAAP Measures provides useful
information to investors regarding our results of operations for trending, analyzing, and benchmarking the performance and
value of our business.

•

•

•

“Adjusted EBITDA” is net income attributable to Viad before our 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 used to measure the profit and performance of our
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 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 noncontrolling interest. Segment
operating income is used to measure the profit and performance of our operating segments to facilitate period-to-
period comparisons.

“Organic revenue” and “organic segment operating income” are 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. We believe that the presentation of “organic” results permits
investors to better understand our performance without the effects of exchange rate variances or acquisitions and
to facilitate period-to-period comparisons and analysis of our 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 our 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 our 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 our financial information should consider net income attributable
to Viad as an important measure of financial performance because it provides a more complete measure of our 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 (recoveries) ...............................................................
Loss from discontinued operations............................................................
Other noncontrolling interest.....................................................................

Adjusted EBITDA.............................................................................. $

2017

Year Ended December 31,
2016

2015

57,707
55,114
8,304
45,898
(29,098)
268
(643)
137,550

$

$

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

The increase in Adjusted EBITDA during 2017 was primarily due to higher segment operating income at Pursuit and a
decrease in restructuring charges. The increase in Adjusted EBITDA in 2016 was primarily due to higher segment operating
income at GES and Pursuit. Refer to the “Results of Operations” section of this MD&A for a discussion of fluctuations.

40

Forward-Looking Non-GAAP Financial Measure

We also provide segment operating income as a forward-looking Non-GAAP Measure within the “Results of Operations”
section of this MD&A. We do not provide a reconciliation of this forward-looking Non-GAAP Measure to the most directly
comparable GAAP financial measure because, due to variability and difficulty in making accurate forecasts and projections
and/or certain information not being ascertainable or accessible, not all of the information necessary for a quantitative
reconciliation of this forward-looking Non-GAAP Measure to the most directly comparable GAAP financial measure is
available without unreasonable efforts. Consequently, any attempt to disclose such reconciliation would imply a degree of
precision that investors could find confusing or misleading. It is probable that this forward-looking Non-GAAP Measure may
be materially different from the corresponding GAAP Measure.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our market risk exposure relates 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 our financial condition or results of
operations. Interest rate risk is the risk that changing interest rates will adversely affect our earnings or financial position.
Commodity risk is the risk that changing prices will adversely affect our results of operations.

Our foreign operations are primarily in Canada, the United Kingdom, the Netherlands, Germany, and to a lesser extent, in
certain other countries. The functional currency of our foreign subsidiaries is their local currency. Accordingly, for purposes
of consolidation, we translate the assets and liabilities of our 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 (loss) in the
Consolidated Balance Sheets. As a result, significant fluctuations in foreign exchange rates relative to the U.S. dollar may
result in material changes to our net equity position reported in the Consolidated Balance Sheets. We do not currently hedge
our equity risk arising from the translation of foreign denominated assets and liabilities. We recorded cumulative unrealized
foreign currency translation losses in stockholders’ equity of $12.0 million as of December 31, 2017 and $29.1 million as of
December 31, 2016. We recorded unrealized foreign currency translation gains in other comprehensive income of $17.1
million during of the year ended December 31, 2017 and foreign currency translation losses of $5.8 million during the year
ended December 31, 2016.

For purposes of consolidation, revenue, expenses, gains, and losses related to our foreign operations are translated into U.S.
dollars at the average foreign exchange rates for the period. As a result, our consolidated results of operations are exposed to
fluctuations in foreign exchange rates as revenue and segment operating results of our 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. We do not currently hedge our
net earnings exposure arising from the translation of our 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 2017
Form 10-K) for a discussion on the “Foreign Exchange Rate Variances”.

A hypothetical change of 10% in the Canadian dollar exchange rate would result in a change to 2017 operating income of
approximately $4.6 million. A hypothetical change of 10% in the British pound exchange rate would result in a change to
2017 operating income of approximately $0.4 million. A hypothetical change of 10% in the Euro exchange rate would result
in a change to 2017 operating income of approximately $0.5 million.

We are exposed to foreign exchange transaction risk, as our foreign subsidiaries have certain revenue transactions
denominated in currencies other than the functional currency of the respective subsidiary. From time to time, we utilize
forward contracts to mitigate the impact on earnings related to these transactions due to fluctuations in foreign exchange
rates. As of December 31, 2017 and 2016, we did not have any foreign currency forward contracts outstanding.

We are exposed to short-term and long-term interest rate risk on certain of our debt obligations. We do not currently use
derivative financial instruments to hedge cash flows for such obligations.

41

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

Consolidated Balance Sheets ......................................................................................................................................
Consolidated Statements of Operations .......................................................................................................................
Consolidated Statements of Comprehensive Income (Loss) .......................................................................................
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

43
44
45
46
47
48
84
95

42

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 $2,023 and $1,342,

respectively .................................................................................................................
Inventories......................................................................................................................
Other current assets........................................................................................................
Total current assets............................................................................................................
Property and equipment, net ................................................................................................
Other investments and assets ...............................................................................................
Deferred income taxes .........................................................................................................
Goodwill ..............................................................................................................................
Other intangible assets, net ..................................................................................................
Total Assets......................................................................................................................... $

Current liabilities

Liabilities and Stockholders’ Equity

Accounts payable ........................................................................................................... $
Customer deposits ..........................................................................................................
Accrued compensation...................................................................................................
Other current liabilities ..................................................................................................
Current portion of debt and capital lease obligations ....................................................
Total current liabilities......................................................................................................
Long-term debt and capital lease obligations ......................................................................
Pension and postretirement benefits ....................................................................................
Other deferred items and liabilities......................................................................................
Total liabilities....................................................................................................................
Commitments and contingencies
Redeemable noncontrolling interest ....................................................................................
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...........................................................................................................
Unearned employee benefits and other..........................................................................
Accumulated other comprehensive loss.........................................................................
Common stock in treasury, at cost, 4,518,099 and 4,613,520 shares, respectively.......
Total Viad stockholders’ equity........................................................................................
Non-redeemable noncontrolling interest .........................................................................
Total stockholders’ equity.................................................................................................
Total Liabilities and Stockholders’ Equity...................................................................... $

Refer to Notes to Consolidated Financial Statements.

December 31,

2017

2016

53,723

$

20,900

104,811
30,372
21,030
209,936
305,571
47,512
23,548
270,551
62,781
919,899

77,380
33,415
30,614
38,720
152,599
332,728
56,593
28,135
52,858
470,314

6,648

37,402
574,458
65,836
218
(22,568)
(226,215)
429,131
13,806
442,937
919,899

$

$

$

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
(39,391)
(230,960)
357,355
13,283
370,638
869,816

43

2017

Year Ended December 31,
2016

2015

$

967,352
165,745
173,868
1,306,965

$

881,137
170,469
153,364
1,204,970

799,752
177,126
112,170
1,089,048

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

2.12
(0.03)
2.09

20,177

2.12
(0.03)
2.09
19,990
0.40

42,953
(684)
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

1.34
(0.02)
1.32

19,981

1.34
(0.02)
1.32
19,797
0.40

27,000
(394)
26,606

$

$

$

$

$

$

$

$

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 ..........................................................................
Business interruption gain....................................................................
Corporate activities ..............................................................................
Interest income.....................................................................................
Interest expense....................................................................................
Restructuring charges...........................................................................
Impairment charges (recoveries), net...................................................
Total costs and expenses .........................................................................
Income from continuing operations before income taxes ....................
Income tax expense ...................................................................................
Income from continuing operations.......................................................
Loss from discontinued operations............................................................
Net income................................................................................................
Net income attributable to non-redeemable noncontrolling interest .........
Net loss attributable to redeemable noncontrolling interest ......................
Net income attributable to Viad............................................................. $
Diluted income (loss) per common share:
Continuing operations attributable to Viad common stockholders ........... $
Discontinued operations attributable to Viad common stockholders........
Net income attributable to Viad common stockholders....................... $
Weighted-average outstanding and potentially dilutive common

1,050,547
161,992
(2,692)
12,877
(319)
8,304
1,004
(29,098)
1,202,615
104,350
45,898
58,452
(268)
58,184
(523)
46
57,707

2.84
(0.01)
2.83

shares ......................................................................................................

20,405

Basic income (loss) per common share:
Continuing operations attributable to Viad common stockholders ........... $
Discontinued operations attributable to Viad common stockholders........
Net income attributable to Viad common stockholders....................... $
Weighted-average outstanding common shares ........................................
Dividends declared per common share...................................................... $
Amounts attributable to Viad common stockholders
Income from continuing operations........................................................... $
Loss from discontinued operations............................................................
Net income................................................................................................ $

2.84
(0.01)
2.83
20,146
0.40

57,975
(268)
57,707

Refer to Notes to Consolidated Financial Statements.

44

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

VIAD CORP

(in thousands)
Net income................................................................................................ $
Other comprehensive income (loss):

Unrealized gains (losses) on investments, net of tax effects of $121,
$47, and $(78) ......................................................................................
Unrealized foreign currency translation adjustments, net of tax .........
Change in net actuarial gain (loss), net of tax effects of $163, $617,
and $653...............................................................................................
Change in prior service cost, net of tax effects of $(473), $(219), and
$(210) ...................................................................................................
Comprehensive income (loss) .................................................................
Comprehensive income attributable to non-redeemable
noncontrolling interest ............................................................................
Comprehensive loss attributable to redeemable noncontrolling
interest ......................................................................................................
Comprehensive income (loss) attributable to Viad .............................. $

2017

Year Ended December 31,
2016

2015

58,184

$

42,795

$

27,048

195
17,058

344

(774)
75,007

75
(5,827)

894

(357)
37,580

(523)

(526)

46
74,530

$

—
37,054

$

(125)
(35,673)

2,556

(345)
(6,539)

(442)

—
(6,981)

Refer to Notes to Consolidated Financial Statements.

45

VIAD CORP
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Common
Stock

Additional
Capital

Retained
Earnings
(Deficit)

—

—

—

—

—
—

26,606

(8,036)

(in thousands)
Balance, December 31, 2014............ $ 37,402 $ 582,066 $ (36,427) $
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............

—
—
—
—
(102)
576,523

—
—
—
—
(9)
(17,866)

—
—
—
—
—
37,402

—
(7,957)

2,156

—
—

360

—

—

—

—

—

—

—

—

—
—

42,269

(8,111)

—
(5,251)

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............ $ 37,402 $ 573,841 $ 16,291 $

—
—
—
—
(51)

—
—
—
—
(1)

—
—
—
—
—

2,525

—
—

—

—

95

—

—

—

—

—

—

—
—

57,707

(8,160)

Net income .........................................
Dividends on common stock ($0.40
per share)............................................
Common stock purchased for
treasury...............................................
Employee benefit plans......................
Share-based compensation—equity
awards ................................................
Unrealized foreign currency
translation adjustment ........................
Unrealized gain on investments .........
Amortization of net actuarial loss ......
Amortization of prior service cost .....
Other, net............................................
Balance, December 31, 2017............ $ 37,402 $ 574,458 $ 65,836 $

—
—
—
—
(319)

—
—
—
—
(2)

—
(2,687)

—
—
—
—
—

3,623

—
—

—

—

Unearned
Employee
Benefits
and Other

Accumulated
Other
Comprehensive
Income (Loss)

Common
Stock in
Treasury

Total
Viad
Equity

Non-
Redeemable
Non-
Controlling
Interest

Total
Stockholders’
Equity

23 $
—

—

—
—

—

—

—
—
—
—
86
109

—

—

—
—

—

—

—
—
—
—
63
172 $

—

—

—
—

—

—
—
—
—
46
218 $

(589) $(247,088) $335,387 $

—

—

—
—

—

—

— 26,606

— (8,036)

(4,816)
12,493

(4,816)
4,536

—

—

2,156

360

(35,673)
(125)
2,556
(345)
—
(34,176)

— (35,673)
(125)
—
2,556
—
(345)
—
(25)
—
(239,411) 322,581

—

—

—
—

—

—

(5,827)
75
894
(357)
—

— 42,269

— (8,111)

(722)
9,172

(722)
3,921

—

—

2,525

95

— (5,827)
75
—
894
—
(357)
—
12
1

(39,391) $(230,960) $357,355 $

—

—

—
—

—

17,058
195
344
(774)
—

— 57,707

— (8,160)

(2,119)
6,864

(2,119)
4,177

—

3,623

— 17,058
195
—
344
—
(774)
—
(275)
—

(22,568) $(226,215) $429,131 $

12,315 $
442

347,702
27,048

—

—
—

—

—

—
—
—
—
—
12,757

526

—

—
—

—

—

—
—
—
—
—
13,283 $

523

—

—
—

—

—
—
—
—
—
13,806 $

(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

58,230

(8,160)

(2,119)
4,177

3,623

17,058
195
344
(774)
(275)
442,937

Refer to Notes to Consolidated Financial Statements.

46

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 .............................................................................................
Loss from discontinued operations ..........................................................................
Restructuring charges...............................................................................................
Impairment charges (recoveries)..............................................................................
(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.................................................................................................
Proceeds from insurance ..........................................................................................
Cash paid for acquired businesses, net ....................................................................
Proceeds from dispositions of property and other assets .........................................
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 .................................................................. $

2017

Year Ended December 31,
2016

2015

58,184

$

42,795

$

27,048

55,114
26,049
268
1,004
(29,098)
1,420
10,969
—
5,029

(2,338)
2,505
7,546
(1,954)
(5,152)
(10,572)
5,820
(12,571)
112,223

(56,621)
31,570
(1,501)
947
(25,605)

90,004
(135,801)
(8,160)
(5)
(2,119)
—
—
—
(56,081)
2,286
32,823
20,900
53,723

$

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

Refer to Notes to Consolidated Financial Statements.

47

VIAD CORP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Overview and Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements of Viad 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

We are an international experiential services company with operations principally in the United States, Canada, the United
Kingdom, continental Europe, the United Arab Emirates, and Hong Kong. We are committed to providing unforgettable
experiences to our clients and guests. We operate through three reportable business segments: GES U.S., GES International,
(collectively, “GES”), and Pursuit.

GES

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 clients easily
manage the complexities of their events.

GES’ clients include event organizers and corporate brand marketers. Event organizers schedule and run the event from start
to finish. 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 is a collection of iconic natural and cultural destination travel experiences that enjoy perennial demand. Pursuit is
comprised of four lines of business: Hospitality, Attractions, Transportation, and 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 comprised of Brewster Travel Canada, which is marketed as the Banff Jasper Collection; the
Alaska Collection; Glacier Park, Inc., which is marketed as the Glacier Park Collection, and FlyOver.

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 our 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; assumptions in the redemption value of redeemable noncontrolling interests; and allocation of purchase price
of acquired businesses. Actual results could differ from these and other estimates.

48

Cash and Cash Equivalents

Cash equivalents are highly-liquid investments with remaining maturities when purchased of three months or less. Cash and
cash equivalents consist of cash and bank demand deposits and money market mutual funds. Investments in money market
mutual funds are classified as available-for-sale and carried at fair value.

Allowances for Doubtful Accounts

Allowances for doubtful accounts 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 net realizable value.

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

Certain internal and external costs incurred in developing or obtaining internal use software are capitalized. 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. We use a discounted expected future cash flow methodology (income approach) in order to estimate the fair
value of our 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

We have 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 we could receive if the policies were discontinued before maturity. The changes in the
cash surrender value of the policies, net of insurance premiums, are included as a component of “Costs of Services” in the
Consolidated Statements of Operations.

Self-Insurance Liabilities

We are self-insured up to certain limits for workers’ compensation, automobile, product and general liability, property loss,
and medical claims. We 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 historical experience, claims frequency, insurance coverage, and other factors. We
purchased insurance for amounts in excess of the self-insured levels.

49

Environmental Remediation Liabilities

Environmental remediation liabilities represent 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. Environmental insurance is maintained that provides coverage for new and undiscovered pre-existing conditions at
both our 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.

Non-redeemable Noncontrolling Interest and Redeemable Noncontrolling Interest

Non-redeemable noncontrolling interest represents the portion of equity in a subsidiary not attributable, directly or indirectly,
to us. Our non-redeemable noncontrolling interest relates to the equity ownership that we do not own in Glacier Park, Inc. of
20%. We report non-redeemable noncontrolling interest within stockholders’ equity in the Consolidated Balance Sheets. The
amount of consolidated net income attributable to Viad and the non-redeemable noncontrolling interest is presented in the
Consolidated Statements of Operations.

Noncontrolling interests with redemption features that are not solely within our control are considered redeemable
noncontrolling interests. The Esja purchase agreement contains a put option that gives the minority Esja shareholders the
right to sell (or “put”) their Esja shares to us based on a calculated formula within a predefined term. This redeemable
noncontrolling interest is considered temporary equity and we report it between liabilities and stockholders’ equity in the
Consolidated Balance Sheets. The amount of the net income or loss attributable to redeemable noncontrolling interests is
recorded to retained earnings and is included in our earnings per share. Refer to Note 21 – Redeemable Noncontrolling
Interest for additional information.

Foreign Currency Translation

Our foreign operations are primarily in Canada, the United Kingdom, the Netherlands, Germany, and to a lesser extent, in
certain other countries. The functional currency of our foreign subsidiaries is their local currency. Accordingly, for purposes
of consolidation, we translate the assets and liabilities of our 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 (loss) in the
Consolidated Balance Sheets. For purposes of consolidation, revenue, expenses, gains, and losses related to our foreign
operations are translated into U.S. dollars at the average foreign exchange rates for the period.

Revenue Recognition

Revenue is recognized 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.

Insurance Recoveries

Receipts from insurance up to the amount of the recognized losses are considered recoveries and are accounted for when they
are probable of receipt. Anticipated proceeds in excess of the recognized loss are considered a gain contingency. A
contingency gain for anticipated insurance proceeds in excess of losses already recognized is not recognized until all
contingencies relating to the insurance claim have been resolved.

50

Insurance proceeds allocated to business interruption gains are reported as cash flows from operating activities, and proceeds
allocated to impairment recoveries are reported as cash flows from investing activities. Insurance proceeds used for
capitalizable costs are classified as cash flows from investing activities, and proceeds used for non-capitalizable costs are
classified as operating activities.

On December 29, 2016, the Mount Royal Hotel was damaged by a fire and closed. During the fourth quarter of 2016, we
recorded an asset impairment loss of $2.2 million and an offsetting impairment recovery (and related insurance receivable) as
the losses related to the fire were covered by our property and business interruption insurance. During July 2017, we resolved
our property and business interruption insurance claims for a total of $36.3 million. We allocated $2.2 million to an insurance
receivable, $29.3 million was recorded as an impairment recovery (partially offset by impairment charges of $0.2 million)
related to construction costs to re-open the hotel, $2.5 million was recorded as a business interruption gain for the recovery of
lost profits, $1.3 million was recorded as contra-expense to offset non-capitalizable costs incurred, and the remaining $1.0
million was recorded as deferred revenue, which will be recognized over the periods when the business interruption losses are
actually incurred.

Share-Based Compensation

Share-based compensation costs, related to all share-based payment awards, are recognized and measured 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, and contain forfeiture and non-compete provisions.

The fair value of restricted stock awards is based on our closing stock price on the date of grant. We issue restricted stock
awards from shares held in treasury. Future vesting of restricted stock is generally subject to continued employment. 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 and in accordance with our stock trading policy.

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.
For awards with a five-year vesting period, expense is recognized based on an accelerated multiple-award approach over a
five-year period. For these awards, 40% of the shares vest on the third anniversary of the grant and the remaining shares vest
in 30% 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 where applicable, the level of achievement of predefined performance goals. These
awards are remeasured on each balance sheet date based on our 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 our stock price 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 our 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 our common stock. Compensation expense related to equity-based awards is
recognized ratably over the requisite service period of approximately three years.

The fair value of stock option grants 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 our common
stock at the date of grant. We have 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

We apply 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. The adjustment
to the carrying value of the redeemable
noncontrolling interest is reflected in income per common share.

51

Impact of Recent Accounting Pronouncements

The following table provides a brief description of recent accounting pronouncements:

Date of
adoption

January 1,
2018

January 1,
2019

January 1,
2020

Effect on the financial statements

We assigned internal resources and engaged a third-party
service provider to assist in evaluating the impact on our
accounting policies, processes, and system requirements.
Based on our assessment, the adoption of this standard
will not have a material impact on our consolidated
financial statements. The impact primarily relates 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. We adopted the standard on
January 1, 2018 and will be using the modified
retrospective transition method. Additionally, the new
guidance requires enhanced disclosures, including revenue
recognition policies to identify performance obligations to
customers and significant judgments in measurement and
recognition.

We are currently evaluating the potential impact the
adoption of this new guidance will have on our financial
position or results of operations including analyzing our
existing operating leases. Based on our current assessment,
the adoption of this standard will have a material impact
on our Consolidated Balance Sheets, however the income
statement is not expected to be materially impacted. We
expect the most significant impact will relate to facility
and equipment leases, which are currently recorded as
operating leases. We are continuing our assessment, which
may identify other impacts. We will adopt the standard on
January 1, 2019.
The adoption of this new guidance is not expected to have
a significant effect on our consolidated financial
statements and we expect the adoption to reduce the
complexity surrounding the analysis of goodwill
impairment.

Standard

Description

Standards Not Yet Adopted
ASU 2014-09,
Revenue from
Contracts with
Customers (Topic
606)

The standard establishes a new recognition
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. We 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.

ASU 2016-02,
Leases (Topic 842)

ASU 2017-04,
Intangibles -
Goodwill and Other
(Topic 350) -
Simplifying the Test
for Goodwill
Impairment

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 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.

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.

52

Date of
adoption

Effect on the financial statements

January 1,
2017

The adoption of this new guidance resulted in a decrease
in tax expense of $1.1 million, or a 1.1% decrease in our
effective tax rate, as compared to 2016.

Standard

Description

Standards Recently Adopted
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.

Note 2. Share-Based Compensation

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 ......................... $

2017

Year Ended December 31,
2016

2015

8,088
2,594
287
10,969
(4,079)
6,890

$

$

5,703
2,073
262
8,038
(2,988)
5,050

$

$

1,692
2,111
45
3,848
(1,454)
2,394

We recorded share-based compensation expense through restructuring expense of $0.1 million during 2017, $0.2 million in
2016, and $45,000 in 2015. The 2017 and 2016 amounts relate to PUP and restricted stock units. The 2015 amount related to
restricted stock units. No share-based compensation costs were capitalized during 2017, 2016, or 2015.

The following table summarizes the activity of the outstanding share-based compensation awards:

PUP Awards

Restricted Stock

Restricted Stock Units

Shares

Weighted-
Average
Grant Date
Fair Value
25.58
$
15,982
47.45
2,950
$
24.97
(6,182) $
—
— $
30.94
$

12,750

Balance at December 31, 2016 .....................
Granted............................................................
Vested..............................................................
Forfeited ..........................................................
Balance at December 31, 2017 .....................

Weighted-
Average
Grant Date
Fair Value
Shares
26.11
$
255,505
47.44
73,557
$
24.07
(76,082) $
34.99
(13,642) $
32.80
$
239,338

Weighted-
Average
Grant Date
Fair Value
Shares
25.96
$
267,051
46.99
$
67,029
24.04
(112,548) $
35.31
(14,633) $
33.16
$
206,899

53

Viad Corp Omnibus Incentive Plan

We grant share-based compensation awards to our officers, directors, and certain key employees pursuant to the 2017 Viad
Corp Omnibus Incentive Plan (the “2017 Plan”). The 2017 Plan was approved by our stockholders and was effective May 18,
2017. The 2017 Plan replaced the 2007 Viad Corp Omnibus Stock Plan (the “2007 Plan”). No further awards may be made
under the 2007 Plan, although awards previously granted under the 2007 Plan will remain outstanding in accordance with
their respective terms. The 2017 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. In June 2017, we registered 1,750,000
shares of common stock issuable under the 2017 Plan. As of December 31, 2017, there were 1,744,546 shares available for
future grant under the 2017 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 our 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, 2017, we granted $3.5 million PUP awards of which $1.4 million are payable in shares.
Liabilities related to PUP awards were $11.0 million as of December 31, 2017 and $7.6 million as of December 31, 2016. In
March 2017, PUP awards granted in 2014 vested and we distributed cash payouts of $3.7 million. In March 2016, PUP
awards granted in 2013 vested and we distributed cash payouts of $0.2 million. In March 2015, PUP awards granted in 2012
vested and we distributed cash payouts of $2.4 million.

Restricted Stock

The grant date fair value of vested restricted stock was $2.7 million in 2017, $2.0 million in 2016, and $2.2 million in 2015.
As of December 31, 2017, the unamortized cost of outstanding restricted stock awards was $2.5 million, which we expect to
recognize over a weighted-average period of approximately 1.2 years. We repurchased 41,532 shares for $2.1 million in 2017
and 25,432 shares for $0.7 million in 2016 related to tax withholding requirements on vested share-based awards. During
2015, we repurchased 141,462 shares on the open market for $3.8 million and 35,649 shares for $1.0 million related to tax
withholding requirements on vested share-based awards.

Restricted Stock Units

Aggregate liabilities related to restricted stock units was $0.5 million as of December 31, 2017 and $0.4 million as of
December 31, 2016. In February 2017, portions of the 2012 and 2014 restricted stock units vested and we distributed cash
payouts of $0.3 million. In February 2016, portions of the 2011, 2012, and 2013 restricted stock units vested and we
distributed cash payouts of $0.2 million. In February 2015, portions of the 2010, 2011, and 2012 restricted stock units vested
and we distributed cash payouts of $0.3 million.

Stock Options

During the year ended December 31, 2017, there was no stock option activity. As of both December 31, 2017 and 2016, 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 2 years. As of December 31, 2017, there were no unrecognized costs related to non-
vested stock option awards.

The following table provides additional stock option information:

(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 .................................................................................................... $

2017

December 31,
2016

2015

2,473

$
— $
— $

1,753

$
— $
— $

— $

— $

740
1,474
898

104

(1)

The intrinsic value of stock options outstanding represents the difference between our closing stock price on
December 31 of each year and the exercise price, multiplied by the number of in-the-money stock options.

54

Note 3. Acquisition of Businesses

2017 Acquisitions

Poken

In March 2017, we acquired Poken event engagement technology for total cash consideration of $1.7 million. Transaction
costs associated with the acquisition of Poken were $0.3 million in 2017, which are included in cost of services in the
Consolidated Statements of Operations. These assets have been included in the consolidated financial statements from the
date of acquisition.

Esja

On November 3, 2017, we acquired the controlling interest (54.5% of the common stock) in Esja, a private corporation in
Reykjavik, Iceland. Esja is developing and will operate a new FlyOver Iceland attraction, which is expected to open in 2019.
The purchase price was €8.2 million (approximately $9.5 million) in cash, which included a put option that gives the minority
Esja shareholders the right to sell (or “put”) their Esja shares to us based on a calculated formula within a predefined term.
The noncontrolling interest’s carrying value is determined by the fair value of the noncontrolling interest as of the acquisition
date, the noncontrolling interests’ share of the subsequent net income or loss, and the accretion of the redemption value of the
put option. As of the transaction date, the fair value of the noncontrolling interest was estimated to be $6.7 million. Due to the
recent timing of the acquisition, the fair value of the noncontrolling interest is not yet finalized and is subject to change
within the measurement period (up to one year from the acquisition date). Refer to Note 21 – Redeemable Noncontrolling
Interest for additional information.

Under the acquisition method of accounting, the purchase price is allocated to the 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 and the primary factor that contributed to the purchase price resulting in
the recognition of goodwill relates to future income from operations after opening in 2019. Transaction costs associated with
the acquisition of Esja were $0.1 million in 2017, which are included in cost of services in the Consolidated Statements of
Operations.

The results of operations of Esja have been included in the consolidated financial statements from the date of acquisition.
During 2017, Esja had an operating loss of $0.1 million.

2016 Acquisitions

Maligne Lake Tours

On January 4, 2016, we 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.

Transaction costs associated with the Maligne Lake Tours acquisition were $0.1 million in 2017 and $0.1 million in 2016,
which are included in cost of services in the Consolidated Statements of Operations and $0.2 million in 2015, which are
included in corporate activities in the Consolidated Statements of Operations. The results of operations of Maligne Lake
Tours have been included in the consolidated financial statements from the date of acquisition.

CATC

On March 11, 2016, we acquired 100% of the equity interests in CATC 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.

Transaction costs associated with the CATC acquisition were $0.1 million in 2017, $0.1 million in 2016, and $0.6 million in
2015, which are included in corporate activities in the Consolidated Statements of Operations. The results of operations of
CATC have been included in the consolidated financial statements from the date of acquisition.

55

ON Services

On August 11, 2016, we 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, 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.

Transaction costs associated with the ON Services acquisition were $0.1 million in 2017 and $0.9 million in 2016, which are
included in corporate activities in the Consolidated Statement of Operations. The results of operations of ON Services have
been included in the consolidated financial statements from the date of acquisition.

FlyOver Canada

On December 29, 2016, we acquired the assets and operations of FlyOver Canada, a recreational attraction that provides a
virtual flight ride experience with a combination of motion seating, spectacular media, and visual effects including wind,
scents, and mist. The purchase price was $68.8 million Canadian dollars (approximately $50.9 million U.S. dollars) in cash.

Transaction costs associated with the FlyOver Canada acquisition were $0.1 million in 2017 and $0.5 million in 2016, which
are included in cost of services in the Consolidated Statements of Operations. The results of operations of FlyOver Canada
have been included in the consolidated financial statements from the date of acquisition.

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 our Annual Report on Form 10-K for the year
ended December 31, 2016.

Maligne Lake
Tours

CATC

ON Services

FlyOver
Canada

(in thousands)
Purchase price paid as:

Cash ...................................................................................... $
Working capital adjustment..................................................
Contingent consideration......................................................
Cash acquired .......................................................................
Total purchase price, net of cash acquired.................

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 acquired ....................................................
Total fair value of net assets acquired.........................

14,962
—
—
—
14,962

—
246
2
4,133
9,244
13,625
—
—
15
240
255
13,370

$

$

45,000
(35)
—
(2,196)
42,769

8
921
82
43,470
980
45,461
306
434
1,952
—
2,692
42,769

$

87,000
344
540
—
87,884

4,643
256
872
14,827
33,990
54,588
992
564
851
274
2,681
51,907

50,920
—
—
(6)
50,914

—
11
37
10,867
6,028
16,943
—
118
—
—
118
16,825

Excess purchase price over fair value of net assets
acquired (“goodwill”) .............................................................. $

1,592

$

— $

35,977

$

34,089

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 Maligne
Lake Tours and FlyOver Canada and in the GES business group for ON Services. The primary factor that contributed to the
purchase price resulting in the recognition of goodwill relates to future growth opportunities, and the expansion of the
FlyOver concept for FlyOver Canada, when combined with our other businesses. All goodwill is deductible for tax purposes

56

pursuant to Canadian tax regulations for Maligne Lake Tours and FlyOver Canada and over a period of 15 years for ON
Services. 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.

Following are the details of the purchase price allocated to the intangible assets acquired for the 2016 Acquisitions:

(in thousands, except weighted average life)
Customer relationships ............................................................... $
Operating licenses.......................................................................
Trade name .................................................................................
Non-compete agreements ...........................................................
Fair value of intangible assets acquired...................................... $

Maligne Lake
Tours

CATC

780
—
200
—
980

ON Services
27,620
$
—
3,190
3,180
33,990

$

$

$

FlyOver
Canada

1,592
—
3,710
726
6,028

788
8,313
143
—
9,244

$

$

Weighted average life ................................................................. 26.7 years(1)

5.8 years

10.5 years

9.4 years

(1)

Largely attributable to operating licenses amortized over the remaining Parks Canada lease of 29 years.

Supplementary pro forma financial information

The following table summarizes our unaudited pro forma results of operations 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 .............................................................................................. $
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,

2017

2016

17,550
12,822
30,372

$

$

16,846
14,574
31,420

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,

2017

2016

5,048
4,237
3,386
2,610
912
730
2,172
1,935
21,030

$

$

3,633
3,614
2,804
2,479
850
327
731
4,011
18,449

57

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,

2017

2016

32,544
222,118
351,676
606,338
(300,767)
305,571

$

$

31,670
185,987
326,868
544,525
(264,667)
279,858

(1)

(2)

Land and land interests include certain leasehold interests in land within Pursuit for which we are considered to have
perpetual use rights. The carrying amount of these leasehold interests was $8.4 million as of December 31, 2017 and
$7.9 million as of December 31, 2016. These land interests are not subject to amortization.
Equipment and other includes capitalized costs incurred in developing or obtaining internal and external use software.
The net carrying amount of capitalized software was $10.1 million as of December 31, 2017 and $11.9 million as of
December 31, 2016.

Depreciation expense was $42.7 million for 2017, $33.6 million for 2016, and $28.1 million for 2015.

Non-cash increases to property and equipment related to assets acquired under capital leases were $2.5 million for 2017, $1.2
million for 2016, and $1.0 million for 2015. Non-cash increases to property and equipment purchases in accounts payable
and accrued liabilities were $2.3 million for 2017, $0.9 million for 2016, and $2.3 million for 2015.

On December 29, 2016, the Mount Royal Hotel in Banff, Canada was damaged by a fire and closed. As a result of the fire,
we recorded an impairment loss of $2.2 million against the net book value of the hotel assets. During 2017, we resolved our
property and business interruption insurance claims related to the fire for a total of $36.3 million of which $29.3 million was
recorded as an impairment recovery (partially offset by impairment charges of $0.2 million) related to construction costs to
re-open the hotel.

During 2016, we recorded impairment charges of $0.2 million related to the write-down of certain software and buses in
Pursuit. During 2015, we recorded impairment charges of $0.1 million related to the write-off of certain software in Pursuit.
Impairment charges (recoveries) are included in the Consolidated Statements of Operations.

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,

2017

2016

23,947
10,442
3,550
2,637
6,936
47,512

$

$

23,197
10,463
4,050
2,062
4,525
44,297

58

Note 8. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill are as follows:

(in thousands)
Balance at December 31, 2015 ................................................. $
Business acquisitions ..................................................................
Foreign currency translation adjustments ...................................
Balance at December 31, 2016 .................................................
Business acquisitions ..................................................................
Foreign currency translation adjustments ...................................
Balance at December 31, 2017 ................................................. $

GES U.S.

112,300
35,977
—
148,277
—
—
148,277

GES
International
38,635
$
—
(4,175)
34,460
1,060
3,320
38,840

$

$

$

Pursuit

34,288
35,681
1,316
71,285
7,094
5,055
83,434

$

$

Total
185,223
71,658
(2,859)
254,022
8,154
8,375
270,551

The following table summarizes goodwill by reporting unit and segment:

(in thousands)
GES:

U.S........................................................................................................................... $
International:

GES EMEA .......................................................................................................
GES Canada.......................................................................................................
Total GES ....................................................................................................................
Pursuit:

Banff Jasper Collection ...........................................................................................
Alaska Collection ....................................................................................................
Glacier Park Collection ...........................................................................................
FlyOver ...................................................................................................................
Total Pursuit................................................................................................................
Total Goodwill............................................................................................................. $

December 31,

2017

2016

148,277

$

148,277

31,612
7,228
187,117

35,305
3,184
1,268
43,677
83,434
270,551

$

27,694
6,766
182,737

32,587
3,184
1,268
34,246
71,285
254,022

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.

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 Europe, Middle East, and Asia (“GES EMEA”) and GES
Canada). Pursuit’s impairment testing is performed at the reporting unit level (Banff Jasper Collection, the Alaska Collection,
Glacier Park Collection, and FlyOver).

As a result of our most recent impairment analysis performed as of October 31, 2017, the excess of the estimated fair value
over the carrying value for each of our reporting units (expressed as a percentage of the carrying amounts) under step one of
the impairment test for GES U.S. was 134%, GES EMEA was 214%, GES Canada was 164%, the Banff Jasper Collection
was 147%, the Alaska Collection was 99%, the Glacier Park Collection was 16%, and FlyOver was 29%.

59

Our accumulated goodwill impairment as of both December 31, 2017 and 2016 was $229.7 million.

Other intangible assets consisted of the following:

(in thousands)
Amortized intangible assets:

December 31, 2017

December 31, 2016

Gross
Carrying
Value

Accumulated
Amortization

Net
Carrying
Value

Gross
Carrying
Value

Accumulated
Amortization

Net
Carrying
Value

Customer contracts and relationships................ $ 68,798 $ (23,696) $ 45,102 $ 67,762 $ (14,345) $ 53,417
8,663
Operating contracts and licenses .......................
6,884
Tradenames .......................................................
3,821
Non-compete agreements..................................
428
Other..................................................................
Total amortized intangible assets ........................
73,213
Unamortized intangible assets:

(1,094)
(2,873)
(3,007)
(650)
(31,320)

(652)
(1,440)
(1,369)
(458)
(18,264)

9,315
8,324
5,190
886
91,477

8,857
5,760
2,356
246
62,321

9,951
8,633
5,363
896
93,641

Business licenses ...............................................

460
Other intangible assets ......................................... $ 94,101 $ (31,320) $ 62,781 $ 91,937 $ (18,264) $ 73,673

460

460

460

—

—

Intangible asset amortization expense was $12.4 million during 2017, $9.2 million during 2016, and $7.2 million during
2015. The weighted-average amortization period of customer contracts and relationships is approximately 8.5 years,
operating contracts and licenses is approximately 26.3 years,
tradenames is approximately 7.0 years, non-compete
agreements is approximately 2.2 years, and other amortizable intangible assets is approximately 2.2 years. The estimated
future amortization expense related to amortized intangible assets held at December 31, 2017 is as follows:

(in thousands)
Year ending December 31,

2018 .............................................................................................................................................................
2019 .............................................................................................................................................................
2020 .............................................................................................................................................................
2021 .............................................................................................................................................................
2022 .............................................................................................................................................................
Thereafter.....................................................................................................................................................
Total..................................................................................................................................................................

$

$

11,013
9,945
8,444
7,447
5,895
19,577
62,321

60

Note 9. Other Current Liabilities

Other current liabilities consisted of the following:

(in thousands)
Continuing operations:

Accrued income tax payable ................................................................................... $
Self-insured liability accrual ...................................................................................
Commissions payable..............................................................................................
Accrued employee benefit costs..............................................................................
Accrued sales and use taxes ....................................................................................
Accrued dividends...................................................................................................
Current portion of pension and postretirement liabilities........................................
Deferred rent ...........................................................................................................
Accrued rebates .......................................................................................................
Accrued professional fees .......................................................................................
Accrued restructuring..............................................................................................
Other taxes ..............................................................................................................
Other........................................................................................................................
Total continuing operations .......................................................................................
Discontinued operations:

Environmental remediation liabilities .....................................................................
Self-insured liability accrual ...................................................................................
Other........................................................................................................................
Total discontinued operations ...................................................................................
Total other current liabilities..................................................................................... $

Note 10. Other Deferred Items and Liabilities

Other deferred items and liabilities consisted of the following:

December 31,

2017

2016

7,518
6,208
3,235
2,915
2,431
2,094
2,109
1,679
1,106
1,020
722
2,750
3,852
37,639

648
337
96
1,081
38,720

$

$

758
5,941
639
2,624
4,279
2,119
1,963
1,535
1,078
794
1,924
4,210
1,774
29,638

492
162
98
752
30,390

(in thousands)
Continuing operations:

Self-insured liability................................................................................................ $
Self-insured excess liability ....................................................................................
Accrued compensation ............................................................................................
Foreign deferred tax liability...................................................................................
Deferred rent ...........................................................................................................
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,

2017

2016

12,918
10,442
9,740
8,267
3,855
1,827
1,305
48,354

2,557
1,728
—
219
4,504
52,858

$

$

12,981
10,463
8,514
2,264
5,271
1,858
1,300
42,651

3,748
3,091
1,045
199
8,083
50,734

61

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, 3.1% weighted-average interest rate at
December 31, 2017 and 2.6% at December 31, 2016, due through 2019 (1) .............. $
Brewster Inc. revolving credit facility, 2.7% weighted-average interest rate at
December 31, 2016 (1).................................................................................................
Less unamortized debt issuance costs...........................................................................
Total debt.....................................................................................................................
Capital lease obligations, 3.8% weighted-average interest rate at December 31,
2017 and 4.9% at December 31, 2016, due through 2021..........................................
Total debt and capital lease obligations....................................................................
Current portion (2) ....................................................................................................
Long-term debt and capital lease obligations .......................................................... $

December 31,

2017

2016

207,322

$

212,750

—
(984)
206,338

2,854
209,192
(152,599)
56,593

$

36,456
(1,464)
247,742

1,469
249,211
(174,968)
74,243

(1)

(2)

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.
Borrowings under the revolving credit facilities are classified as current because all borrowed amounts are due within
one year.

Effective December 22, 2014, we 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”). The Credit Agreement has a maturity date of December 22, 2019. Proceeds from the loans made under the Credit
Agreement were used to refinance certain of our outstanding debt and will be used for general corporate purposes in the
ordinary course of business. Under the Credit Agreement, either or both of the Revolving Credit Facility and the Term Loan
may be increased up to an additional $100 million under certain circumstances. If such circumstances are met, we 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. Our lenders under the Credit Agreement have a first perfected security
interest in all of our personal property including GES, GES Event Intelligence Services, Inc., CATC, and ON Services, and
65% of the capital stock of our top-tier foreign subsidiaries.

Effective February 24, 2016, we executed an amendment (“Amendment No. 1”) to the Credit Agreement. Amendment No. 1
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 Amendment No. 1, as long as the pro forma leverage
ratio is less than or equal to 3.00 to 1.00. We can make dividends, distributions, and repurchases of our 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 our 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 our pro forma
leverage ratio is less than or equal to 3.00 to 1.00. Significant other covenants under the Credit Agreement that were not
affected by Amendment No. 1 include limitations on investments, sales/leases of assets, consolidations or mergers, and liens
on property. As of December 31, 2017, the fixed charge coverage ratio was 3.10 to 1.00, the leverage ratio was 1.45 to 1.00,
and we were in compliance with all covenants under the Credit Agreement.

62

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 Revolver”). The Brewster Credit Agreement was
used in connection with the FlyOver Canada acquisition. Effective December 6, 2017, we amended the Brewster Revolver to
reduce the amount to $20 million and extend the maturity date to December 28, 2018. Additional loan proceeds will be used
for potential future acquisitions in Canada and other general corporate purposes of Brewster Inc. The lender under the
Brewster Revolver has a first perfected security interest in all of Brewster Inc.’s personal property and a guaranty from
Brewster Inc.’s immediate parent, Brewster Travel Canada Inc. (secured by its present and future personal property), Viad,
and all of its current or future subsidiaries that are required to be guarantors under Viad’s Credit Agreement. The fees on the
unused portion of the Brewster Revolver are currently 0.2% annually.

As of December 31, 2017, our total debt and capital lease obligations were $209.2 million, consisting of outstanding
borrowings under the Term Loan of $75.0 million, the Revolving Credit Facility of $132.3 million, and capital lease
obligations of $2.9 million, offset in part by unamortized debt issuance costs of $1.0 million. As of December 31, 2017,
capacity remaining under the Revolving Credit Facility was $41.4 million, reflecting borrowings of $132.3 million and $1.3
million in outstanding letters of credit. As of December 31, 2017, Brewster Inc. had $20 million of capacity remaining under
the Brewster Revolver.

Borrowings under the Revolving Credit Facility (of which GES, GES Event Intelligence Services, Inc., CATC, and ON
Services are guarantors) are indexed to the prime rate or the London Interbank Offered Rate, plus appropriate spreads tied to
our leverage ratio. Commitment fees and letters of credit fees are also tied to our leverage ratio. The fees on the unused
portion of the Revolving Credit Facility are currently 0.3% annually.

As of December 31, 2017, on behalf of our subsidiaries, we had certain obligations under guarantees to third parties. These
guarantees are not subject to liability recognition in the consolidated financial statements and relate to leased facilities entered
into by our subsidiary operations. We 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 we would be required to make under all guarantees existing as of December 31, 2017 would
be $19.3 million. These guarantees relate to facilities leased through October 2027. There are no recourse provisions that
would enable us to recover from third parties any payments made under the guarantees. Furthermore, there are no collateral
or similar arrangements whereby we could recover payments.

Aggregate annual maturities of long-term debt and capital lease obligations as of December 31, 2017 are as follows:

(in thousands)
Year ending December 31,
2018 .............................................................................................................................. $
2019 ..............................................................................................................................
2020 ..............................................................................................................................
2021 ..............................................................................................................................
2022 ..............................................................................................................................

Total........................................................................................................................ $
Less: Amount representing interest ...................................................................
Present value of minimum lease payments .........................................................

Revolving Credit
Agreement

Capital Lease
Obligations

151,072
56,250
—
—
—
207,322

$

$

$

1,601
899
454
17
—
2,971
(117)
2,854

As of December 31, 2017, the gross amount of assets recorded under capital leases was $4.8 million and accumulated
amortization was $2.0 million. As of December 31, 2016, the gross amount of assets recorded under capital leases was $3.3
million and accumulated amortization was $1.7 million. 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
3.7% for 2017, 3.1% for 2016 and 3.2% for 2015. The estimated fair value of total debt was $203.2 million as of
December 31, 2017 and $252.8 million as of December 31, 2016. 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 was $7.7 million for 2017, $5.5 million for 2016, and $4.2 million for 2015.

63

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.

Money market mutual funds and certain other mutual fund investments are measured at fair value on a recurring basis using
Level 1 inputs. The fair value information related to these assets is summarized in the following tables:

(in thousands)
Assets:

December 31,
2017

Fair Value Measurements at Reporting Date Using
Significant
Other
Observable
Inputs
(Level 2)

Quoted Prices in
Active
Markets
(Level 1)

Significant
Unobservable
Inputs
(Level 3)

Money market funds(1).......................................................... $
Other mutual funds(2)............................................................
Total assets at fair value on a recurring basis....................... $

119
2,637
2,756

$

$

119
2,637
2,756

$

$

— $
—
— $

—
—
—

(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
Unobservable
Inputs
(Level 3)

Money market funds(1) .......................................................... $
Other mutual funds(2) ............................................................
Total assets at fair value on a recurring basis ....................... $

118
2,062
2,180

$

$

118
2,062
2,180

$

$

— $
—
— $

—
—
—

(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 are recorded at fair value. There have been no realized gains or
losses related to these investments and we have not experienced any redemption restrictions with respect to any of the
money market mutual funds.
Other mutual funds are included in “Other investments and assets” in the Consolidated Balance Sheets. These
investments are classified as available-for-sale and are recorded at fair value. Unrealized gains of $1.0 million ($0.6
million after-tax) as of December 31, 2017 and $0.7 million ($0.4 million after tax) as of December 31, 2016 are
included in “Accumulated other comprehensive income (loss)” (“AOCI”) in the Consolidated Balance Sheets.

(2)

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.

64

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..................................................
Adjustment to carrying value of redeemable noncontrolling interest........
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 ...................... $

2017

Year Ended December 31,
2016

2015

$

$

57,707
(700)
—
57,007
20,146
259
20,405

$

$

42,269
(571)
—
41,698
19,990
187
20,177

26,606
(385)
—
26,221
19,797
184
19,981

2.83
2.83

$
$

2.09
2.09

$
$

1.32
1.32

Options to purchase 8,000 shares during 2017, 500 shares during 2016, and 4,000 shares during 2015 of common stock were
outstanding, but were not included in the computation of dilutive shares outstanding because the effect would be anti-
dilutive.

Note 14. Preferred Stock Purchase Rights

We authorized five million shares of Preferred Stock and two million shares of Junior Participating Preferred Stock, none of
which was outstanding on December 31, 2017.

Note 15. Accumulated Other Comprehensive Income (Loss)

Changes in AOCI by component are as follows:

Unrealized Gains
on Investments

Cumulative
Foreign Currency
Translation
Adjustments

Unrecognized Net
Actuarial Loss
and Prior Service
Credit, Net

Accumulated
Other
Comprehensive
Income (Loss)

346 $

(23,257) $

(11,265) $

(34,176)

135
(60)
75
421 $
257
(62)
195
616 $

(5,827)
—
(5,827)
(29,084) $
17,058
—
17,058
(12,026) $

—
537
537
(10,728) $
—
(430)
(430)
(11,158) $

(5,692)
477
(5,215)
(39,391)
17,315
(492)
16,823
(22,568)

(in thousands)
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.......................................... $
Other comprehensive income before reclassifications .......
Amounts reclassified from AOCI, net of tax .................
Net other comprehensive income (loss) ...........................
Balance at December 31, 2017.......................................... $

65

The following table presents information about reclassification adjustments out of AOCI:

(in thousands)
Unrealized gains on investments....................................................... $
Tax effect ..........................................................................................

$

Recognized net actuarial loss (gains)(1)............................................. $
Amortization of prior service credit(1)...............................................
Tax effect ..........................................................................................

$

Year Ended December 31,
2016
2017

(100) $
38
(62) $

$

507
(1,247)
310
(430) $

(97)
37
(60)

1,440
(575)
(328)
537

(1)

Amount included in pension expense. Refer to Note 17 – Pension and Postretirement Benefits.

Affected Line Item in the
Statement Where Net
Income is Presented

Interest income
Income taxes

Income taxes

66

Note 16. Income Taxes

We record current income tax expense for the amounts that we expect to report and pay on our income tax returns and
deferred income tax expense for the change in the deferred tax assets and liabilities. On December 22, 2017, the President of
the United States signed into law the Tax Cuts and Jobs Act (the “Tax Act”) that significantly changed the U.S. tax code and
reduced the U.S. federal corporate tax rate from 35% to 21%. Deferred tax assets and liabilities are recorded for the
difference between the financial statement and tax basis of assets and liabilities, measured at the enacted tax rate applicable
when the differences reverse. We recognized deferred tax expense of $8.0 million for the remeasurement of the net deferred
tax assets in the fourth quarter of 2017.

The Tax Act included the transition from a worldwide system of taxation to a territorial system and required a one-time
deemed mandatory repatriation of post-1986 undistributed foreign subsidiary earnings and profits (“E&P”). As of December
31, 2017, we had an estimated $174.0 million of undistributed foreign E&P subject to the deemed mandatory repatriation and
recognized current income tax expense of $8.1 million in the fourth quarter of 2017.

In addition to the impact recorded as of December 31, 2017, the Tax Act changed existing tax laws, effective January 1,
2018, including the repeal of the corporate alternative minimum tax and the increasing alternative minimum tax credit
carryforward utilization, as well as establishing two new taxes, the base erosion anti-abuse tax (“BEAT”) and the global
intangible low-taxed income (“GILTI”) tax after the foreign intangible deduction (“FDII”).

Under the new BEAT regime, certain payments made to related foreign companies are treated as base-eroding and limits the
deductibility of these payments and imposes a minimum tax in excess of regular tax liability. We have reviewed the
applicability of the BEAT provisions to our transactions and we do not expect to be subject to BEAT and have not recorded
any provision for BEAT in the year ended December 31, 2017.

Under the new GILTI regime, earnings of foreign subsidiaries in excess of an allowable return on the subsidiary’s tangible
assets are required to be included in our U.S. taxable income. Because of the complexity of the new GILTI tax rules, we are
continuing to assess the impact and have not recorded a provision for the GILTI tax in the year ended December 31, 2017.

On December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on
accounting for the tax effects of the Tax Act under U.S. GAAP for SEC registrants who do not have the necessary
information available, prepared or analyzed in reasonable detail to complete the accounting for certain income tax effects of
the Tax Act. In accordance with SAB 118, to the extent that a company’s accounting is incomplete but it is able to determine
a reasonable estimate, it must record a provisional estimate in the financial statements.

We have not completed the detailed accounting for all of the income tax effects of the Tax Act, specifically the BEAT and
GILTI taxes, since the computations are complex and we need additional time to complete a full analysis. Under SAB 118,
we recorded a provisional estimate for the mandatory repatriation of post-1986 undistributed foreign subsidiary E&P of $8.1
million and the remeasurement of the net deferred tax assets of $8.0 million for the year ended December 31, 2017. The
ultimate impact may differ from these provisional amounts, possibly materially, due to additional analysis, changes in
interpretations and assumptions we have made, additional regulatory guidance that may be issued and actions we may take as
a result of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the enactment
date and we expect to complete the detailed accounting and include any adjustments within this period.

Income from continuing operations before income taxes consisted of the following:

(in thousands)
Foreign....................................................................................................... $
United States..............................................................................................
Income from continuing operations before income taxes .................... $

2017

Year Ended December 31,
2016

2015

82,919
21,431
104,350

$

$

33,611
31,118
64,729

$

$

35,571
2,364
37,935

67

Significant components of the income tax provision from continuing operations are as follows:

(in thousands)
Current:

United States:

2017

Year Ended December 31,
2016

2015

Federal ............................................................................................
State ................................................................................................
Foreign .................................................................................................
Total current ..............................................................................................
Deferred:

United States:

Federal ............................................................................................
State ................................................................................................
Foreign .................................................................................................
Total deferred ............................................................................................
Income tax expense..................................................................................

$

$

1,693
2,573
15,583
19,849

19,893
1,761
4,395
26,049
45,898

$

$

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

We are subject to income tax in jurisdictions in which we operate. A reconciliation of the statutory federal income tax rate to
the effective tax rate is as follows:

2017

(in thousands)
Computed income tax expense at statutory federal
income tax rate of 35% ........................................... $ 36,522
1,160
State income taxes, net of federal benefit...............
1,206
Deemed mandatory repatriation state tax ...............
Deemed mandatory repatriation federal tax, net of
foreign tax credit.....................................................
Remeasurement of deferred taxes due to reduction
in U.S. tax rate * .....................................................
Foreign tax rate differential ....................................
U.S. tax on current year foreign earnings, net of
foreign tax credits ...................................................
Change in valuation allowance...............................
Other adjustments, net ............................................

(2,726)
(796)
627
Income tax expense ......................................... $ 45,898

8,000
(5,031)

6,936

Year Ended December 31,
2016

2015

35.0% $ 22,655
292
—

1.1%
1.2%

35.0% $ 13,277
1,713
—

0.5%
—

35.0%
4.5%
—

6.6%

—

—

—

—

7.7%
(4.8)%

—
(882)

—
(1.4)%

—
(1,181)

(2.6)%
(0.8)%
0.6%

(373)
1,230
(1,672)
44.0% $ 21,250

(948)
(0.6)%
(944)
1.9%
(2.6)%
(1,424)
32.8% $ 10,493

—
(3.1)%

(2.5)%
(2.5)%
(3.7)%
27.7%

* Includes $0.6 million increase to the valuation allowance related to the remeasurement of deferred taxes due to the
reduction in U.S. tax rate.

68

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,

2017

2016

6,654
15,173
5,826
5,195
2,502
2,796
38,146
(4,010)
(2,396)
31,740

(10,530)
(3,556)
(4,299)
(463)
(18,848)
7,869
20,761

$

$

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

We use significant judgment in forming conclusions regarding the recoverability of our deferred tax assets and evaluate 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. We had gross deferred tax assets of
$38.1 million as of December 31, 2017 and $58.3 million as of December 31, 2016. 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, 2017, foreign tax credit carryforwards were $0.4 million, of which $0.1 million are U.S. foreign tax
credits and $0.3 million are United Kingdom foreign tax credits. The U.S. foreign tax credits are subject to a 10-year
carryforward period and will expire in 2021. As of December 31, 2017, we had alternative minimum tax credit carryforwards
of $6.2 million that will be fully utilized against future tax liabilities before becoming refundable as allowed under the Tax
Act.

We had gross state and foreign net operating loss carryforwards of $68.4 million as of December 31, 2017 and $63.0 million
as of December 31, 2016, for which we had deferred tax assets of $5.2 million as of December 31, 2017 and $5.0 million as
of December 31, 2016. The state and foreign net operating loss carryforwards expire on various dates from 2018 through
2038.

As of December 31, 2017 and 2016, the valuation allowance was $4.0 million. During 2017, we had a $1.6 million decrease
on German foreign net operating loss carryforwards, offset by a $0.3 million increase for the United Kingdom foreign tax
credits (although subject to an indefinite carryforward period, do not meet the more likely-than-not threshold for recognition),
a $0.5 million increase for the state net operating loss return to provision true up, a $0.6 million increase due to the
remeasurement for the reduction in U.S. tax rate, and a $0.2 million increase in foreign exchange.

While we believe 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 our valuation allowance. Such a change could result in a material increase or decrease to income tax expense in
the period the assessment was made.

We have not recorded deferred taxes for certain states or foreign withholding taxes on certain historical unremitted earnings
of our subsidiaries located in Canada, the United Kingdom, and the Netherlands as we intend to reinvest those earnings in
operations outside of the United States.

69

We exercise judgment in determining the income tax provision for positions taken on prior returns when the ultimate tax
determination is uncertain. We classify liabilities associated with uncertain tax positions as non-current liabilities in the
Consolidated Balance Sheets unless expected to be paid or released within one year. We had liabilities associated with
uncertain tax positions, including interest and penalties, of $1.7 million as of December 31, 2017 and $2.7 million as of
December 31, 2016. Uncertain tax positions, including interest and penalties, are classified as a component of income tax
expense.

During 2017, we decreased the liability for continuing operations uncertain tax positions by $0.1 million due to lapse of
statute and we increased accrued interest and penalties for continuing operations positions by $0.1 million. We expect $1.3
million of the continuing operations uncertain tax positions to be resolved or settled within the next twelve months and have
classified this amount as a current liability.

During 2017, we released the liability for discontinued operations uncertain tax positions of $1.0 million, including $0.4
million in accrued interest and penalties, due to a statute expiration, which was recorded through discontinued operations. We
had liabilities associated with discontinued operations uncertain tax positions of zero as of December 31, 2017 and $1.0
million as of December 31, 2016.

A reconciliation of the liabilities associated with uncertain tax positions (excluding interest and penalties) is as follows:

(in thousands)
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................................................................
Additions for tax positions taken in prior years ........................................
Reductions for lapse of applicable statutes ...............................................
Balance at December 31, 2017................................................................ $

Continuing
Operations

Discontinued
Operations

Total

1,283
43
(666)
(353)
307
1,295
(43)
1,559
43
(177)
1,425

$

$

636
—
—
—
636
—
—
636
—
(636)

$

— $

1,919
43
(666)
(353)
943
1,295
(43)
2,195
43
(813)
1,425

We are subject to regular and recurring audits by taxing authorities in jurisdictions in which we operate or have operated in
the past, including various foreign countries in addition to the United States, Canada, and the United Kingdom.

Our 2014 through 2017 U.S. federal tax years and various state tax years from 2013 through 2017 remain subject to income
tax examinations by tax authorities. Tax years 2012 through 2017 remain subject to examination by various foreign taxing
jurisdictions.

Cash paid for income taxes was $14.6 million during 2017, $14.1 million during 2016, and $10.1 million during 2015.

Note 17. Pension and Postretirement Benefits

Domestic Plans

We have frozen defined benefit pension plans held in trust for certain employees which we funded. We also maintain 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.

We also have 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, we retained the obligations for these benefits for retirees of certain sold businesses.
While the plans have no funding requirements, we may fund the plans.

70

The components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) of our
pension plans consist of 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 (loss):

Net actuarial loss (gain) .......................................................................

Reversal of amortization item:

Net actuarial loss..................................................................................
Total recognized in other comprehensive income (loss) ......................
Total recognized in net periodic benefit cost and other

2017

December 31,
2016

2015

$

64
803
(176)
433
1,124

114

(433)
(319)

$

98
1,032
(256)
423
1,297

1

(423)
(422)

101
1,018
(380)
492
1,231

(963)

(492)
(1,455)

comprehensive income (loss) ............................................................... $

805

$

875

$

(224)

The components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) of our
postretirement benefit plans consist of 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 (loss):

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

2017

December 31,
2016

2015

$

92
413
(431)
164
238

237
816

(164)
431
1,320

$

99
573
(503)
295
464

(790)
73

(295)
503
(509)

152
619
(552)
528
747

(1,248)
3

(528)
552
(1,221)

comprehensive income (loss) ............................................................... $

1,558

$

(45) $

(474)

71

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

2017

2016

2017

2016

2017

2016

Benefit obligation at beginning of year ............. $ 15,027
—
Service cost........................................................
492
Interest cost........................................................
618
Actuarial adjustments ........................................
—
Plan amendments...............................................
(697)
Benefits paid ......................................................
Benefit obligation at end of year ..........................
15,440
Change in plan assets:

$

$ 14,906
—
629
240
—
(748)
15,027

9,825
64
311
175
—
(518)
9,857

$ 10,049
97
403
(221)
—
(503)
9,825

$ 13,619
92
413
237
816
(1,370)
13,807

$ 14,573
99
573
(790)
73
(909)
13,619

—
Fair value of plan assets at beginning of year ...
—
Actual return on plan assets...............................
909
Company contributions......................................
(909)
Benefits paid ......................................................
—
Fair value of plan assets at end of year ...............
Funded status at end of year ................................ $ (3,850) $ (4,611) $ (9,857) $ (9,825) $ (13,807) $ (13,619)

10,479
273
412
(748)
10,416

10,416
855
1,016
(697)
11,590

—
—
1,370
(1,370)
—

—
—
518
(518)
—

—
—
503
(503)
—

The net amounts recognized in the Consolidated Balance Sheets under the caption “Pension and postretirement benefits” as
of December 31 are as follows:

(in thousands)
Other current liabilities ........................................... $
Non-current liabilities .............................................
Net amount recognized ........................................... $

2017

2016

2017

2016

2017

2016

— $

— $

3,850
3,850

$

4,611
4,611

$

809
9,048
9,857

$

$

699
9,126
9,825

$

1,112
12,695
$ 13,807

$

1,094
12,525
$ 13,619

Funded Plans

Unfunded Plans

Postretirement
Benefit Plans

Amounts recognized in AOCI as of December 31 are as follows:

Funded Plans

2017

(in thousands)
Net actuarial loss ....................................... $ 8,681 $ 9,090 $ 2,587 $ 2,496 $ 2,784 $ 2,710 $14,052 $14,296
(1,598)
Prior service credit.....................................
(351)
(1,598)
12,698
Subtotal ...............................................
13,701
1,112
(422)
(4,816)
Less tax effect............................................
(5,196)
690 $ 8,505 $ 7,882

Total..................................................... $ 5,389 $ 5,643 $ 1,606 $ 1,549 $ 1,510 $

—
9,090
(3,447)

—
8,681
(3,292)

—
2,496
(947)

—
2,587
(981)

(351)
2,433
(923)

2016

2016

2017

Unfunded Plans
2016
2017

Postretirement
Benefit Plans

Total
2017

Total
2016

The estimated net actuarial loss for the postretirement benefit plans that is expected to be amortized from AOCI into net
periodic benefit cost in 2018 is approximately $0.2 million. The estimated prior service credit for the postretirement benefit
plans that is expected to be amortized from AOCI into net periodic benefit credit in 2018 is approximately $0.2 million.

The estimated net actuarial loss that is expected to be amortized from AOCI into net periodic benefit cost in 2018 is
approximately $0.1 million for the unfunded benefit plans and $0.4 million for the funded benefit plans.

72

The fair value of the domestic plans’ assets by asset class are as follows:

(in thousands)
Domestic pension plans:

Total

Fair Value Measurements at December 31, 2017
Significant
Other
Observable
Inputs
(Level 2)

Quoted Prices
in Active
Markets
(Level 1)

Significant
Unobservable
Inputs
(Level 3)

Fixed income securities ......................................................... $
Equity securities ....................................................................
Cash .......................................................................................
Other ......................................................................................
Total............................................................................................ $

5,787
5,390
214
199
11,590

$

$

5,787
5,390
214
—
11,391

$

$

— $
—
—
199
199

$

—
—
—
—
—

(in thousands)
Domestic pension plans:

Total

Fair Value Measurements at December 31, 2016
Significant
Other
Observable
Inputs
(Level 2)

Quoted Prices
in Active
Markets
(Level 1)

Significant
Unobservable
Inputs
(Level 3)

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

$

—
—
—
—
—

We employ 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.

We utilize 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 our 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)
2018 ........................................................................................................... $
2019 ........................................................................................................... $
2020 ........................................................................................................... $
2021 ........................................................................................................... $
2022 ........................................................................................................... $
2023-2027.................................................................................................. $

Foreign Pension Plans

Funded
Plans

Unfunded
Plans

Postretirement
Benefit
Plans

1,434
927
997
921
990
4,859

$
$
$
$
$
$

823
738
740
725
709
3,259

$
$
$
$
$
$

1,132
1,127
1,100
1,066
1,039
4,685

Certain of our foreign operations also maintain defined benefit pension plans held in trust for 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.

73

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 (loss) included the following:

(in thousands)
Net periodic benefit cost:

Service cost .......................................................................................... $
Interest cost ..........................................................................................
Expected return on plan assets .............................................................
Recognized net actuarial loss...............................................................
Settlement.............................................................................................
Net periodic benefit cost..........................................................................
Other changes in plan assets and benefit obligations recognized in other

comprehensive income (loss):

Net actuarial loss..................................................................................
Reversal of amortization of net actuarial loss......................................
Total recognized in other comprehensive income (loss) ......................
Total recognized in net periodic benefit cost and other

2017

December 31,
2016

2015

$

530
492
(602)
155
777
1,352

(106)
(155)
(261)

$

488
488
(558)
162
—
580

158
(162)
(4)

comprehensive income ......................................................................... $

1,091

$

576

$

The following table represents the funded status of the plans as of December 31:

503
505
(583)
160
—
585

182
(160)
22

607

(in thousands)
Change in benefit obligation:

Funded Plans

2017

2016

Unfunded Plans

2017

2016

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 .................................................... $

$

10,488
530
406
658
(3,231)
670
9,521

10,576
764
710
(3,231)
674
9,493

(28) $

9,744
488
400
395
(818)
279
10,488

9,705
617
795
(818)
277
10,576
88

$

$

$

2,486
—
87
(54)
(182)
245
2,582

—
—
182
(182)
—
—
(2,582) $

2,470
—
87
105
(177)
1
2,486

—
—
177
(177)
—
—
(2,486)

The net amounts recognized in the 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

2017

2016

Unfunded Plans

2017

2016

(15) $
—
43
28

$

(88) $
—
—
(88) $

— $
188
2,394
2,582

$

—
170
2,316
2,486

Net actuarial losses for the foreign funded plans recognized in AOCI were $2.5 million ($1.8 million after-tax) as of
December 31, 2017 and $3.3 million ($2.5 million after-tax) as of December 31, 2016. Net actuarial losses for the foreign
unfunded plans recognized in AOCI were $0.7 million ($0.5 million after-tax) as of December 31, 2017 and $0.4 million
($0.3 million after-tax) as of December 31, 2016.

74

The fair value information related to the foreign pension plans’ assets is summarized in the following tables:

(in thousands)
Assets:

December 31,
2017

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............................................................................................ $

4,414
4,889
190
9,493

$

$

4,414
4,466
190
9,070

$

$

— $

423
—
423

$

—
—
—
—

(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

$

The following payments, which reflect expected future service, as appropriate, are expected to be paid:

(in thousands)
2018 .............................................................................................................................. $
2019 .............................................................................................................................. $
2020 .............................................................................................................................. $
2021 .............................................................................................................................. $
2022 .............................................................................................................................. $
2023-2027 ..................................................................................................................... $

Funded
Plans

Unfunded
Plans

365
376
378
396
496
2,499

$
$
$
$
$
$

—
—
—
—

191
190
190
190
189
935

Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets

The accumulated benefit obligations in excess of plan assets as of December 31 were as follows:

(in thousands)
Projected benefit obligation ........................................................ $
Accumulated benefit obligation .................................................. $
Fair value of plan assets .............................................................. $

(in thousands)
Projected benefit obligation ........................................................ $
Accumulated benefit obligation .................................................. $
Fair value of plan assets .............................................................. $

Contributions

Domestic Plans

Funded Plans

Unfunded Plans

2017

2016

2017

2016

15,440
15,440
11,590

$
$
$

15,027
15,027
10,416

$
$
$

9,857
9,826

$
$
— $

9,825
9,737
—

Foreign Plans

Funded Plans

Unfunded Plans

2017

2016

2017

2016

9,521
8,819
9,493

$
$
$

10,488
9,906
10,576

$
$
$

2,582
2,582

$
$
— $

2,486
2,486
—

In aggregate for both the domestic and foreign plans, we anticipate contributing $1.1 million to the funded pension plans,
$1.0 million to the unfunded pension plans, and $1.1 million to the postretirement benefit plans in 2018.

75

Weighted-Average Assumptions

Weighted-average assumptions used to determine benefit obligations as of December 31 were as follows:

Domestic Plans

Funded Plans

2017

2016

Unfunded Plans
2016
2017

Postretirement
Benefit Plans

Foreign Plans

2017

2016

2017

2016

Discount rate .............................................
Rate of compensation increase..................

3.63% 4.12% 3.55% 3.99% 3.59% 4.08% 3.15% 3.52%
2.26% 2.34%
N/A

3.00% 3.00% N/A

N/A

N/A

Weighted-average assumptions used to determine net periodic benefit costs as of December 31 were as follows:

Domestic Plans

Funded Plans

2017

2016

Unfunded Plans
2016
2017

Postretirement
Benefit Plans

Foreign Plans

2017

2016

2017

2016

Discount rate .............................................
Expected return on plan assets ..................
Rate of compensation increase..................

4.07% 4.33% 3.99% 4.25% 4.08% 4.30% 3.71% 3.77%
0.00% 0.00% 5.09% 4.53%
5.50% 2.25% N/A
2.26% 2.34%
N/A
N/A

N/A
3.00% 3.00% N/A

N/A

The assumed health care cost trend rate used in measuring the December 31, 2017 accumulated postretirement benefit
obligation was 7.5%, declining one-third percent each year to the ultimate rate of 4.5% by the year 2026 and remaining at
that level thereafter. The assumed health care cost trend rate used in measuring the December 31, 2016 accumulated
postretirement benefit obligation was 7.0%, declining one-quarter percent each year to the ultimate rate of 4.5% by the year
2026 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, 2017 by approximately $1.4 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, 2017 by approximately
$1.1 million and the total of service and interest cost components by approximately $0.1 million.

Multi-employer Plans

We contribute to defined benefit pension plans under the terms of collective-bargaining agreements that cover our 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 we were to discontinue participating in some of our multi-
employer pension plans, we may be required to pay those plans a withdrawal liability amount based on the underfunded
status of the plan. We also contribute to defined contribution plans pursuant to collective-bargaining agreements, which are
generally not subject to the funding risks inherent in defined benefit pension plans. The overall level of contributions to our
multi-employer plans may significantly vary from year to year based on the demand for union-represented labor to support
our operations. We do not have any minimum contribution requirements for future periods pursuant to our collective-
bargaining agreements for individually significant multi-employer plans.

76

Our participation in multi-employer pension plans for 2017 is outlined in the following table. Unless otherwise noted, the
most recent Pension Protection Act zone status available in 2017 and 2016 relates to the plan’s year end as of December 31,
2016 and 2015, respectively, and is based on information received from the plan. Among other factors, plans in the red zone
are generally less than 65% funded, plans in the yellow zone are less than 80% funded, and plans in the green zone are at
least 80% funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan
or a rehabilitation plan is either pending or has been implemented.

Pension
Protection Act
Zone Status

2017

2016

FIP/RP
Status
Pending/
Implemented

EIN

Plan
No.

Viad Contributions
2016

2017

2015

Expiration
Date of
Collective-
Bargaining
Agreement(s)

Surcharge
Paid

91-
6145047

95-
6376874

36-
6130207
88-
6023284

51-
6030753

36-
6044243

95-
6392774
95-
6042875

04-
6372430

36-
1416355

94-
6278490

1 Green Green

No

$ 7,809 $ 6,684 $ 5,632

No

3/31/2020

1 Green Green

No

3,087

2,805

2,485

No

8/31/2019

1 Green Yellow

Yes

2,390

2,532

1,887

1 Green Green

No

1,682

1,402

1,150

No

No

5/31/2019

6/16/2018

2 Green Green

No

1,099

845

1,190

No

6/6/2021

1

Red

Red

Yes

1,060

1,151

948

No

12/31/2018

1 Yellow Yellow

Yes

1 Green Green

No

905

883

701

791

835

Yes

continuous

750

No

6/30/2018

1

Red

Red

Yes

772

552

381

No

3/31/2022

11

Red

Red

Yes

719

1,203

502

Yes

6/30/2019

1 Green Green

No

654
2,900

526
3,585

541
4,259

No

3/31/2018

23,960

22,777

20,560

2,613

2,995

1,428

$26,573 $25,772 $21,988

(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 .......
Electrical Contractors
Assoc. Chicago Local
Union 134, IBEW Joint
Pension Trust of
Chicago Plan #2 ............
Central States,
Southeast and
Southwest Areas
Pension Plan..................
Southern California
IBEW-NECA Pension
Fund ..............................
Southwest Carpenters
Pension Trust.................
New England
Teamsters & Trucking
Industry Pension............
Machinery Movers
Riggers & Mach Erect
Local 136
Supplemental
Retirement Plan(1)..........
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) We contributed more than 5% of total plan contributions for the 2016 and 2015 plan years based on the plans’ Form

(2)

5500s.
Represents participation in 35 pension funds during 2017.

77

Other Employee Benefits

We match U.S. employee contributions to the 401(k) plan with shares of our common stock held in treasury up to 100% of
the first 3% of a participant’s salary plus 50% of the next 2%. The expense associated with our match was $4.2 million for
2017, $3.9 million for 2016, and $3.7 million for 2015.

Note 18. Restructuring Charges

GES Consolidation

We have taken certain restructuring actions designed to reduce our cost structure primarily within GES, as well as the
elimination of certain positions at the corporate office. We implemented a strategic reorganization plan in order to
consolidate the separate business units within GES U.S. We also consolidated facilities and streamlined our operations in the
U.S., the United Kingdom, and Germany. As a result, we recorded restructuring charges in 2017, 2016, and 2015, 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

We recorded restructuring charges in connection with the consolidation of certain support functions at our 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, 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 .................................................
Restructuring charges..................................................................
Cash payments ............................................................................
Adjustment to liability ................................................................
Balance at December 31, 2017 ................................................. $

543
1,767
(1,514)
(45)
751
3,693
(2,170)
—
2,274
442
(1,165)
—
1,551

$

$

1,161
587
(457)
—
1,291
759
(1,150)
192
1,092
265
(550)
—
807

$

$

240
602
(601)
(7)
234
731
(546)
(3)
416
297
(538)
16
191

$

$

Total

1,944
2,956
(2,572)
(52)
2,276
5,183
(3,866)
189
3,782
1,004
(2,253)
16
2,549

As of December 31, 2017, 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 22 – Segment Information, for information regarding restructuring charges by segment.

78

Note 19. Leases and Other

We entered into operating leases for the use of certain of our 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, 2017, our 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)
2018 .............................................................................................................................. $
2019 ..............................................................................................................................
2020 ..............................................................................................................................
2021 ..............................................................................................................................
2022 ..............................................................................................................................
Thereafter......................................................................................................................

Total........................................................................................................................ $

Rental
Payments

Receivable
Under Subleases

23,503
20,299
17,265
8,812
5,555
81,135
156,569

$

$

2,627
2,384
2,209
2,267
2,195
3,657
15,339

Net rent expense under operating leases consisted of the following:

(in thousands)
Minimum rentals ....................................................................................... $
Sublease rentals .........................................................................................

Total rentals, net ................................................................................ $

2017

56,575
(1,525)
55,050

$

$

December 31,
2016

48,465
(2,831)
45,634

$

$

2015

41,564
(3,457)
38,107

The aggregate annual maturities and the related amounts representing interest on capital lease obligations are included in
Note 11 – Debt and Capital Lease Obligations.

As of December 31, 2017, we had aggregate purchase obligations of $38.1 million related to various licensing agreements,
consulting and other contracted services.

Note 20. Litigation, Claims, Contingencies, and Other

We 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 us. Although the amount of liability as of December 31, 2017 with
respect to these matters is not ascertainable, we believe that any resulting liability, after taking into consideration amounts
already provided for and insurance coverage, will not have a material effect on our business, financial position, or results of
operations.

We are 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 we have or had operations. If we fail to comply with these
environmental laws and regulations, civil and criminal penalties could be imposed and we could become subject to regulatory
enforcement actions in the form of injunctions and cease and desist orders. As is the case with many companies, we also face
exposure to actual or potential claims and lawsuits involving environmental matters relating to our past operations. As of
December 31, 2017, we had recorded environmental remediation liabilities of $2.4 million related to previously sold
operations. Although we are a party to certain environmental disputes, we believe that any resulting liabilities, after taking
into consideration amounts already provided for and insurance coverage, will not have a material effect on our financial
position or results of operations.

As of December 31, 2017, on behalf of our subsidiaries, we had certain obligations under guarantees to third parties. These
guarantees are not subject to liability recognition in the consolidated financial statements and relate to leased facilities entered
into by our subsidiary operations. We 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 we would be required to make under all guarantees existing as of December 31, 2017 would
be $19.3 million. These guarantees relate to our leased facilities through October 2027. There are no recourse provisions that
would enable us to recover from third parties any payments made under the guarantees. Furthermore, there are no collateral
or similar arrangements whereby we could recover payments.

79

A significant number of our employees are unionized and we are a party to approximately 100 collective-bargaining
agreements, with approximately one-third requiring renegotiation each year. If we are 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 our business and results of operations. We believe that relations with our employees are
satisfactory and that collective-bargaining agreements expiring in 2018 will be renegotiated in the ordinary course of business
without having a material adverse effect on our operations. We 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. We are in informal discussions regarding those issues with all
relevant parties to resolve those issues in a manner that will be reasonable and equitable to employees, customers, and
shareholders. Although our 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.

Our business contributes to various multi-employer pension plans based on obligations arising under collective-bargaining
agreements covering our union-represented employees. Based upon the information available from plan administrators, we
believe that several of these multi-employer plans are underfunded. The Pension Protection Act of 2006 requires pension
plans underfunded at certain levels to reduce, over defined time periods, the underfunded status. In addition, under current
laws, the termination of a plan, or a voluntary withdrawal from a plan by us, 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 us to make payments to
such plan for our proportionate share of the plan’s unfunded vested liabilities. As of December 31, 2017, the amount of
additional funding, if any, that we would be required to make related to multi-employer pension plans is not ascertainable.

We are 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 our retention limit) related to
our continuing operations was $19.1 million as of December 31, 2017 which includes $13.8 million related to workers’
compensation liabilities, and $5.3 million related to general/auto liability claims. We have also retained and provided for
certain insurance liabilities in conjunction with previously sold businesses of $2.9 million as of December 31, 2017, related
to workers’ compensation liabilities. Provisions for losses for claims incurred, including estimated claims incurred but not yet
reported, are made based on our historical experience, claims frequency, and other factors. A change in the assumptions used
could result in an adjustment to recorded liabilities. We have 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. We do not maintain a self-insured
retention pool fund as claims are paid from current cash resources at the time of settlement. Our net cash payments in
connection with these insurance liabilities were $5.5 million for 2017, $5.0 million for 2016, and $5.6 million for 2015.

In addition, as of December 31, 2017, we have recorded insurance liabilities of $10.4 million related to continuing
operations, which represents the amount for which we remain 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 $3.5 million related to general/auto liability claims which are recorded in other deferred items
and liabilities in the Consolidated Balance Sheets with a corresponding receivable in other investments.

Note 21. Redeemable Noncontrolling Interest

On November 3, 2017, we acquired the controlling interest (54.5% of the common stock) in Esja, a private corporation in
Reykjavik, Iceland, which is developing and will operate a new FlyOver Iceland attraction.

The Esja acquisition contains a put option that gives the minority Esja shareholders the right to sell (or “put”) their Esja
shares to us based on a multiple of 5.0x EBITDA as calculated on the trailing 12 months from the most recently completed
quarter before the put option exercise. The put option is only exercisable after 36 months of business operation (the
“Reference Date”) and if the FlyOver Iceland attraction has earned a minimum of €3.25 million in unadjusted EBITDA
during the most recent fiscal year and during the trailing 12-month period prior to exercise (the “Put Option Condition”). The
put option is exercisable during a period of 12 months following the Reference Date (the “Option Period”) and if the Put
Option Condition has been met. If the Put Option Condition has not been met during the first Option Period, the Reference
Date will be extended for an additional 12 months up to three times. If after 72 months, the FlyOver Iceland attraction has
not achieved the Put Option Condition, the put option expires. If the Put Option Condition is met during any of the Option
Periods, yet the shares are not exercised prior to the end of the 12-month Option Period, the put option will expire.

The noncontrolling interests’ carrying value is determined by the fair market value at acquisition and the subsequent
noncontrolling interests’ share of net income or loss. This value is benchmarked against the redemption value of the sellers’
put option. The carrying value is adjusted to the latter, provided that it does not fall below the initial carrying values, as
determined by the purchase price allocation. We have made a policy election to reflect any changes caused by such an
adjustment in retained earnings, rather than in current earnings.

80

Changes in redeemable noncontrolling interests are as follows:

(in thousands)
Balance at December 31, 2016 ................................................................................................................
Redeemable noncontrolling interest related to 2017 acquisition..........................................................
Adjustment to the redemption value.....................................................................................................
Foreign currency translation adjustment ..............................................................................................
Balance at December 31, 2017 ................................................................................................................

$

$

—
6,735
(30)
(57)
6,648

Note 22. Segment Information

We measure the profit and performance of our operations on the basis of segment operating income which excludes
restructuring charges and impairment charges and recoveries. 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.

Our reportable segments, with reconciliations to consolidated totals, are as follows:

(in thousands)
Revenue:
GES:

2017

Year Ended December 31,
2016

2015

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 recoveries (charges):

GES U.S. ..............................................................................................
GES International.................................................................................
Pursuit ..................................................................................................
Corporate..............................................................................................

Impairment recoveries (charges):

$

$

$

872,154
282,712
(21,769)
1,133,097
173,868
—
1,306,965

34,494
15,475
49,969
47,082
97,051
67
(12,877)
84,241
319
(8,304)

354
(1,061)
(86)
(211)

$

$

$

826,408
248,503
(20,172)
1,054,739
153,364
(3,133)
1,204,970

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)

Pursuit ..................................................................................................
Income from continuing operations before income taxes .................... $

29,098
104,350

$

(218)
64,729

$

720,882
272,634
(16,638)
976,878
112,170
—
1,089,048

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

(1)

Corporate eliminations during 2017 represent the elimination of depreciation expense recorded by Pursuit associated
with previously eliminated intercompany profit realized by GES for renovations to Pursuit’s Banff Gondola. Corporate
eliminations recorded during 2016 represent the elimination of intercompany revenue and profit realized by GES for
work completed on renovations to Pursuit’s Banff Gondola.

81

(in thousands)
Assets:
GES:

2017

December 31,
2016

2015

U.S........................................................................................................ $
International .........................................................................................
Pursuit........................................................................................................
Corporate and other ...................................................................................

$

Depreciation and amortization:
GES:

U.S........................................................................................................ $
International .........................................................................................
Pursuit........................................................................................................
Corporate and other ...................................................................................

$

Capital expenditures:
GES:

U.S........................................................................................................ $
International .........................................................................................
Pursuit........................................................................................................
Corporate and other(1) ................................................................................

$

380,909
135,917
350,256
52,817
919,899

29,088
8,176
17,653
197
55,114

17,337
8,084
30,786
414
56,621

$

$

$

$

$

$

380,951
109,705
301,941
77,219
869,816

21,473
8,092
12,967
211
42,743

14,291
5,033
31,861
(1,370)
49,815

$

$

$

$

$

$

294,618
115,494
195,527
85,084
690,723

18,658
8,435
7,974
164
35,231

8,066
8,366
13,107
300
29,839

(1)

The 2016 amount includes an intercompany elimination for work completed by GES on renovations to Pursuit’s Banff
Gondola.

Geographic Areas

Our 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:

United States ........................................................................................ $
EMEA ..................................................................................................
Canada..................................................................................................
Total long-lived assets ............................................................................. $

2017

913,210
209,824
183,931
1,306,965

180,345
43,630
129,108
353,083

December 31,
2016

$

$

$

$

855,304
205,028
144,638
1,204,970

182,611
37,083
104,461
324,155

$

$

$

$

2015

726,436
220,046
142,566
1,089,048

139,479
15,714
71,677
226,870

Note 23. Common Stock Repurchases

We previously announced our Board of Directors’ authorization to repurchase shares of our common stock from time to time
at prevailing market prices. No open market repurchases were made during 2017 or 2016. During 2015, we repurchased
141,462 shares on the open market for $3.8 million. As of December 31, 2017, 440,540 shares remain available for
repurchase. We repurchased 41,532 shares for $2.1 million in 2017, 25,432 shares for $0.7 million in 2016, and 35,649
shares for $1.0 million in 2015 related to tax withholding requirements on vested share-based awards.

82

Note 24. Selected Quarterly Financial Information (Unaudited)

The following table sets forth selected unaudited consolidated quarterly financial information:

2017

2016

(in thousands, except per share data)
Revenue: ............................................. $325,807 $364,774 $339,099 $277,285 $241,362 $324,747 $382,465 $256,396
Operating income (loss):

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

Ongoing operations (1) ................... $ 12,684 $ 39,402 $ 47,066 $ (4,726) $ (6,280) $ 34,014 $ 58,917 $ (1,466)
(2,932)
Corporate activities .......................
(1,519)
Restructuring charges....................
Impairment recoveries (charges)...
(98)
Operating income (loss) ................ $ 12,064 $ 38,473 $ 66,804 $ (7,698) $ (9,183) $ 30,332 $ 54,328 $ (6,015)

(4,474)
(255)
24,467

(2,772)
(1,697)
(120)

(2,610)
(394)
2,384

(2,707)
(975)
—

(1,911)
(992)
—

(3,008)
(168)
2,247

(2,785)
(187)
—

Income (loss) from continuing
operations attributable to Viad............ $
Net income (loss) attributable to Viad.....$
Basic and Diluted income (loss) per
common share: (2)................................
Continuing operations attributable
to Viad ........................................... $
Net income (loss) attributable to
Viad common stockholders........... $

7,593 $ 27,438 $ 44,758 $ (21,814) $ (6,797) $ 19,873 $ 34,013 $ (4,136)
6,777 $ 27,947 $ 44,657 $ (21,674) $ (6,983) $ 19,509 $ 33,792 $ (4,049)

0.37 $

1.35 $

2.19 $

(1.08) $

(0.34) $

0.98 $

1.68 $

(0.21)

0.33 $

1.37 $

2.19 $

(1.07) $

(0.35) $

0.96 $

1.67 $

(0.20)

(1)

(2)

Represents revenue less costs of services and cost of products sold.
The sum of quarterly income per share amounts may not equal annual income per share due to rounding.

83

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Viad Corp

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Viad Corp and subsidiaries (the “Company”) as of
December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive income (loss), stockholders’
equity, and cash flows, for each of the three years in the period ended December 31, 2017, and the related notes and the
financial statement schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our
opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as
of December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period
ended December 31, 2017, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in
Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission and our report dated February 28, 2018, expressed an unqualified opinion on the Company’s internal control
over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audit
to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond
to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant
estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We
believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte & Touche LLP

Phoenix, Arizona
February 28, 2018

We have served as the Company’s auditor since at least 1929, however the specific year has not been determined.

84

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES

We have established disclosure controls and procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded,
processed, summarized and reported within the time periods specified in SEC rules and forms, and such information is
accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial
Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure. Management, together with our CEO
and CFO, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2017. Based on this
evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of December 31, 2017.

There were no changes in our internal control over financial reporting during the fourth quarter of 2017 that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.

85

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management 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) of the Exchange Act as a process designed by, or
under the supervision of, our principal executive and principal financial officers and effected by our board of directors, our
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 U.S GAAP 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 our assets;

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with U.S. GAAP, and that our receipts and expenditures are being made only in
accordance with authorizations of our management and directors; and

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of our assets that could have a material effect on our financial statements.

Because of 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.

Our management performed an assessment of the effectiveness of our 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 our internal control
over financial reporting was effective as of December 31, 2017.

Based on our assessment, we concluded that, as of December 31, 2017, our internal control over financial reporting is
effective based on those criteria.

Our independent registered public accounting firm, Deloitte & Touche LLP, has issued a report relating to our audit of the
effectiveness of our internal control over financial reporting, which appears on the following page of this 2017 Form 10-K.

86

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Viad Corp

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Viad Corp and subsidiaries (the “Company”) as of December
31, 2017, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as of December 31, 2017, based on criteria established in Internal
Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(PCAOB), the consolidated financial statements and financial statement schedule as of and for the year ended December 31,
2017, of the Company and our report dated February 28, 2018, expressed an unqualified opinion on those consolidated
financial statements and financial statement schedule.

Basis for Opinion

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 are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. 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.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed 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 its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
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.

/s/ Deloitte & Touche LLP

Phoenix, Arizona
February 28, 2018

87

Item 9B. OTHER INFORMATION

Not applicable.

88

PART III

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Information regarding our directors, director nomination procedures, the Audit Committee of our Board of Directors, and
compliance with Section 16(a) of the Exchange Act, are included in our Proxy Statement for the Annual Meeting of
Shareholders to be held on May 17, 2018 (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 our executive officers is located in Part I, “Other – Executive Officers of the Registrant” of this 2017
Form 10-K.

We adopted a Code of Ethics for all of our directors, officers and employees. A copy of our Code of Ethics is available at our
website at www.viad.com/about-us/corporate-governance/documents-and-charters/default.aspx and is also available without
charge to any shareholder upon written request 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 2018” and is
incorporated herein by reference.

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULE

(a)

Financial Statements and Schedule

PART IV

See Index to Financial Statements and Financial Statement Schedule at Item 8 of this 2017 Form 10-K.

(b) Exhibit Index

89

Exhibit
Number

3.A 

3.B 

4.A1 

4.A2 

4.A3 

4.A4 

4.A5 

4.A6 

4.B1 

4.B2 

4.B3 

   Exhibit Description 

Restated Certificate of Incorporation of Viad Corp, as amended 
through July 1, 2004 (SEC File No. 001-11015; SEC Film No. 
04961107). 

Incorporated by Reference 

  Form   

Period 
Ending

   Exhibit  

Filing Date 

  10-Q   

6/30/2004   3.A 

8/9/2004

  Bylaws of Viad Corp, as amended through December 5, 2013. 

  8-K 

  3 

12/9/2013

$300,000,000 Amended and Restated Credit Agreement, 
Amended and Restated Pledge and Security Agreement, 
Guaranty, and Amended and Restated Subsidiary Pledge and 
Security Agreement, by and among the Registrant, the initial 
lenders named therein, and JP Morgan Chase Bank, N.A., as 
administrative agent, dated as of December 22, 2014. 

Amendment No. 1, effective as of February 24, 2016, to the 
$300,000,000 Amended and Restated Credit Agreement, by and 
among the Registrant, the initial lenders named therein, and JP 
Morgan Chase Bank, N.A., as administrative agent, dated as of 
December 22, 2014. 

  8-K 

  4 

12/23/2014

  8-K 

  4 

3/1/2016

Joinder to Guaranty, dated as of August 31, 2016, by and among 
CIRI Alaska Tourism Corporation, the lenders named therein, 
and JP Morgan Chase Bank, N.A., as agent, to Guaranty dated 
as of December 22, 2014. 

  8-K 

   4.A 

9/2/2016

Joinder to Amended and Restated Subsidiary Pledge and 
Security Agreement, dated as of August 31, 2016, among CIRI 
Alaska Tourism Corporation, the guarantors thereunder, to and 
in favor of JP Morgan Chase Bank, N.A., as agent. 

Joinder to Guaranty, dated as of July 14, 2017, by and among 
ON Services and JPMorgan Chase Bank, N.A., as agent, in 
favor of the agent and the lender parties thereto. 

Joinder to Amended and Restated Subsidiary Pledge and 
Security Agreement, dated as of July 14, 2017, by and among 
ON Services and JPMorgan Chase Bank, N.A., as agent, in 
favor of the agent and the lender parties thereto. 

  8-K 

  4.B 

9/2/2016

  10-Q   

6/30/2017   4.1 

8/4/2017

  10-Q   

6/30/2017   4.2 

8/4/2017

Credit Agreement, by and between Brewster Inc. and BMO 
Harris Bank N.A., dated as of December 28, 2016. 

  8-K 

  4 

1/3/2017

Joinder to Guaranty Supplement No. 1, dated as of August 31, 
2017, by and among ON Services – AV Specialists, Inc., the 
guarantors thereunder, to and in favor of BMO Harris Bank, 
N.A., to Guaranty dated as of December 28, 2016. 

First Amendment to Credit Agreement and Reaffirmation of 
Guaranties effective as of December 6, 2017, to the Credit 
Agreement, among Brewster Inc., and BMO Harris Bank N.A., 
dated as of December 28, 2016.  

  10-Q   

9/30/2017   4.1 

11/6/2017

  8-K 

  4.1 

12/14/2017

90 

 
     
     
     
    
  
 
 
   
   
   
   
   
 
    
    
 
 
   
   
   
   
   
 
   
  
    
 
 
   
   
   
   
   
 
   
  
    
 
 
   
   
   
   
   
 
   
  
 
 
 
   
   
   
   
   
 
   
  
    
 
 
   
   
   
   
   
 
 
 
 
   
   
   
   
   
 
 
 
 
   
   
   
   
   
 
   
  
    
 
 
   
   
   
   
   
 
 
 
 
   
   
   
   
   
 
 
   
 
2007 Viad Corp Omnibus Incentive Plan, filed as Appendix A
to Viad Corp’s Proxy Statement for the 2012 Annual Meeting of
Shareholders.

DEF
14A

10.A1

+

4/13/2012

Form of Restricted Stock Agreement - Executives, (three-year
cliff vesting), effective as of March 26, 2014, pursuant to the
2007 Viad Corp Omnibus Incentive Plan.

10.A2

+

8-K

10.A

3/28/2014

Form of Restricted Stock Units Agreement, effective as of
March 26, 2014, pursuant to the 2007 Viad Corp Omnibus
Incentive Plan.

10.A3

+

Form of Restricted Stock Agreement for Outside Directors,
effective as of February 25, 2008, pursuant to the 2007 Viad
Corp Omnibus Incentive Plan.

10.A4

+

Form of Non-Qualified Stock Option Agreement, effective as of
February 25, 2010, pursuant to the 2007 Viad Corp Omnibus
Incentive Plan.

10.A5

+

Form of Incentive Stock Option Agreement, effective as of
February 25, 2010, pursuant to the 2007 Viad Corp Omnibus
Incentive Plan.

10.A6

+

8-K

8-K

8-K

8-K

Viad Corp Management Incentive Plan, amended as of February
27, 2013, pursuant to the 2007 Viad Corp Omnibus Incentive
Plan.

8-K

10.A7

+

Viad Corp Performance Unit Incentive Plan, effective as of
February 27, 2013, pursuant to the 2007 Viad Corp Omnibus
Incentive Plan.

10.A8

+

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.

10.A9

+

8-K

8-K

10.A10

+

Form of Performance Unit Agreement, effective as of March 26,
2014, pursuant to the 2007 Viad Corp Omnibus Incentive Plan.

8-K

Form of Performance Unit Agreement, effective as of February
24, 2016, pursuant to the 2007 Viad Corp Omnibus Incentive
Plan.

10.A11

+

10.B1

+

2017 Viad Corp Omnibus Incentive Plan, effective as of May
18, 2017.

Form of Restricted Stock Agreement – Executives, effective as
of May 18, 2017, pursuant to the 2017 Viad Corp Omnibus
Incentive Plan.

10.B2

+

Form of Restricted Stock Units Agreement, effective as of May
18, 2017, pursuant to the 2017 Viad Corp Omnibus Incentive
Plan.

10.B3

+

8-K

8-K

8-K

8-K

91

10.B

3/28/2014

10.F

2/28/2008

10.B

2/26/2010

10.A

2/26/2010

10.C

3/5/2013

10.D

3/5/2013

10.B

3/1/2016

10.C

3/28/2014

10.A

3/1/2016

10.1

5/23/2017

10.3

5/23/2017

10.4

5/23/2017

10.B4

10.B5

10.B6

10.B7

10.B8

10.B9

10.B10

10.C1

10.C2

10.C3

10.C4

10.C5

10.C6

10.C7

10.D1

+
*

+
*

+
*

+
*

+
*

+

+
*

+

+

+

+

+

+

+

+

Form of Management Incentive Plan (MIP) Administrative
Guidelines, effective February 27, 2018, pursuant to the 2017
Viad Corp Omnibus Incentive Plan, effective as of May 18,
2017.

Form of Management Incentive Plan, effective as of February
27, 2018, pursuant to the 2017 Viad Corp Omnibus Incentive
Plan, effective as of May 18, 2017.

Form of Performance Unit Incentive Plan (“PUP”)
Administrative Guidelines, effective February 27, 2018,
pursuant to the 2017 Viad Corp Omnibus Incentive Plan,
effective as of May 18, 2017.

Form of 2017 Viad Corp Omnibus Incentive Plan Performance
Unit Agreement, effective February 27, 2018, pursuant to the
2017 Viad Corp Omnibus Incentive Plan, effective as of May
18, 2017.

Form of Viad Corp Performance Unit Incentive Plan, effective
as of February 27, 2018, pursuant to the 2017 Viad Corp
Omnibus Incentive Plan, effective as of May 18, 2017.

Form of Restricted Stock Agreement – Non-Employee
Directors, effective as of May 18, 2017, pursuant to the 2017
Viad Corp Omnibus Incentive Plan.

Form of Restricted Stock Agreement – Non-Employee
Directors, effective as of February 27, 2018, pursuant to the
2017 Viad Corp Omnibus Incentive Plan.

8-K

10.2

5/23/2017

Forms of Viad Corp Executive Severance Plans (Tier I and II),
amended and restated for Code Section 409A as of January 1,
2005.

Form of Viad Corp Executive Severance Plan (Tier I-2013)
effective as February 27, 2013.

8-K

8-K

Amendment No. 1 to Viad Corp Executive Severance Plan (Tier
I), effective as of February 26, 2014.

8-K

Severance Agreement (No Change in Control) between Viad
Corp and Steven W. Moster, effective as of December 3, 2014.

8-K

10.B

8/29/2007

10.B

3/5/2013

10

3/4/2014

10.B

12/5/2014

Severance Agreement (No Change in Control) between Viad
Corp and David W. Barry, effective as of April 22, 2015.

10-K

12/31/2015 10H.4

3/11/2016

Severance Agreement and General Release between Viad Corp
and Thomas M. Kuczynski, effective as of April 27, 2016.

8-K/A

Severance Agreement and General Release between Viad Corp
and Deborah J. DePaoli, effective as of November 29, 2017.

8-K/A

Viad Corp Supplemental TRIM Plan, as amended and restated
effective January 1, 2005 for Code Section 409A.

8-K

10

4/22/2016

10.1

12/1/2017

10.E

8/29/2007

92

10.E1

10.F1

10.G1

10.H1

10.I1

10.J1

21

23

24

31.1

31.2

32.1

Viad Corp Supplemental Pension Plan, amended and restated as
of January 1, 2005 for Code Section 409A.

8-K

10.A

8/29/2007

Viad Corp Defined Contribution Supplemental Executive
Retirement Plan, effective as of January 1, 2013.

8-K

10.E

3/5/2013

Executive Officer Pay Continuation Policy adopted February 7,
2007.

8-K

10.A

2/13/2007

Description of Viad Corp Directors Matching 2018 Matching
Gift Program.

Form of Indemnification Agreement between Viad Corp and
Directors of Viad Corp, as approved by Viad Corp stockholders
on October 16, 1987.

10-K

12/31/2008 10.1

2/27/2009

Summary of Compensation Program of Non-Employee
Directors of Viad Corp, effective as of February 23, 2016.

10-K

12/31/2015 10.K1

3/11/2016

List of Viad Corp Subsidiaries.

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 Viad Corp Directors.

Certification of Chief Executive Officer of Viad Corp pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.

Certification of Chief Financial Officer of Viad Corp pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.

+

+

+

+
*

+

+

*

*

*

#
*

#
*

Certifications of Chief Executive Officer and Chief Financial
Officer of Viad Corp pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002.

#
**

101.INS * XBRL Instance Document.

101.SCH * XBRL Taxonomy Extension Schema Document.

101.CAL * XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF * XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB * XBRL Taxonomy Extension Label Linkbase Document.

101.PRE * XBRL Taxonomy Extension Presentation Linkbase Document.

*

**

+

Filed herewith

Furnished herewith.

Management contract or compensation plan or arrangement.

93

#

A signed original of this written statement has been provided to Viad Corp and will be retained by Viad Corp and
furnished to the SEC upon request.

Item 16. FORM 10-K SUMMARY

None.

94

VIAD CORP
SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

(in thousands)
Allowances for doubtful accounts:

December 31, 2015............................................
December 31, 2016............................................
December 31, 2017............................................

Deferred tax valuation allowance:

December 31, 2015............................................
December 31, 2016............................................
December 31, 2017............................................

Additions

Deductions

Balance at
Beginning
of Year

Charged to
Expense

Charged to
Other

Accounts Write-Offs

Other(1)

Balance at
End of Year

1,258
1,593
1,342

3,295
2,837
3,998

955
1,355
2,470

—
1,406
1,385

574
41
49

402
—
—

(1,162)
(1,602)
(1,529)

(860)
(176)
(1,595)

(32)
(45)
(309)

—
(69)
222

1,593
1,342
2,023

2,837
3,998
4,010

(1)

“Other” primarily includes foreign exchange translation adjustments.

95

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 February 28,
2018.

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: February 28, 2018

Date: February 28, 2018

Date: February 28, 2018

Date: February 28, 2018

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*
Virginia L. Henkels*
Edward E. Mace*
Robert E. Munzenrider*
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 2017 Form 10-K

96

[THIS PAGE INTENTIONALLY LEFT BLANK]

[THIS PAGE INTENTIONALLY LEFT BLANK]

W E   P R O V I D E   U N F O R G E T T A B L E

experiences

From the Kenai Fjords and Seward, 
up through Talkeetna and into 
Denali, Pursuit’s Alaska Collection 
offers visitors the Alaskan trip of  
a lifetime.

Photos: (Main) Kenai Fjords Wilderness Lodge – Kenai Fjords National Park, Fox Island, Alaska, (Inset) Denali Backcountry Lodge – Denali National Park & Preserve, 
Kantishna, Alaska

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.

4K+

LIVE EVENTS  
MANAGED  
ANNUALLY

4MPRE-REGISTRATIONS 

PROCESSED  
ANNUALLY

4MROOM NIGHTS  

BOOKED ANNUALLY

viad 2017 financial highlights

REVENUE
in millions

ADJUSTED SEGMENT EBITDA (1)
in millions

INCOME BEFORE OTHER ITEMS (1)
per share

.

0
9
8
0
1
$

.

.

0
5
0
2
1
$

,

.

0
7
0
3
1
$

,

.

6
2
5
1
$

.

2
0
3
1
$

.

6
0
9
$

.

2
6
2
$

.

8
3
2
$

.

6
4
1
$

 ‘15 

‘16 

‘17

 ‘15 

‘16 

‘17

 ‘15 

‘16 

‘17

(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

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. 

7WORLD-CLASS 

ATTRACTIONS

2.5MILLION PASSENGERS 

ANNUALLY

15DISTINCTIVE LODGING  

PROPERTIES

NET INCOME ATTRIBUTABLE TO VIAD
per share

OPERATING CASH FLOW
in millions

DEBT-TO-CAPITAL RATIO

.

3
8
2
$

.

9
0
2
$

.

2
3
1
$

.

2
2
1
1
$

.

3
0
0
1
$

.

3
0
6
$

%
3
0
4

.

%
2
2
3

.

%
8
7
2

.

 ‘15 

‘16 

‘17

 ‘15 

‘16 

‘17

 ‘15 

‘16 

‘17

 
 
 
 
 
board of directors & leadership team

BOARD OF DIRECTORS

4

5

8

1

6

3 2

7

1 Richard H. Dozer (1,3)

Chairman of the Board, Viad 
Corp; Former President, Arizona 
Diamondbacks, and Former VP 
and Chief Operating Officer,  
Phoenix Suns

2 Andrew B. Benett (2,3)
Global Chief Commercial 
Officer of Bloomberg Media 
Group

3 Isabella Cunningham (2,3)
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

4 Virginia L. Henkels (1)

Former Executive Vice President, 
Chief Financial Officer, and 
Treasurer, Swift Transportation 
Company 

5 Edward E. Mace (1,3)

6 Steven W. Moster

7 Robert E. Munzenrider (1,2)

8 Joshua E. Schechter (1,2)

President and Chief Executive 
Officer, Silverwest Hotel LLC

President and Chief Executive 
Officer, Viad Corp;
President of GES

Retired President, Harmon 
AutoGlass

Chairman of the Board,  
Support.com

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

Ellen M. Ingersoll
Chief Financial Officer

David W. Barry
President of Pursuit

Richard A. Britton
Chief Information Officer

Trisha L. Fox
Chief Human Resources 
Officer

Leslie S. Striedel
Chief Accounting  
Officer

corporate information

TRANSFER AGENT

To submit a change of address, to make inquiries regarding 
dividend payments, to mail Common Stock certificates for 
transfer, or to redeem $4.75 Preferred Stock certificates,  
please contact:

EQ Shareowner Services 
PO Box 64874 
St. Paul, MN 55164-0874 
1-800-453-2235

https://www.shareowneronline.com

Shareholders of record who receive more than one copy of this 
annual report may contact our transfer agent and arrange to 
have their accounts consolidated.

AWARDS

SHAREHOLDER INFORMATION

Annual Shareholders Meeting

The annual meeting of shareholders is scheduled to be held on:

May 17, 2018 
8:00 a.m. (MST)

Royal Palms Hotel 
5200 East Camelback Road 
Phoenix, AZ 85018 
(602) 283-1234

www.royalpalmshotel.com

ADJUSTED SEGMENT EBITDA

INCOME BEFORE OTHER ITEMS

Millions 

2015 

2016 

2017 

2017 

2017

Per diluted share 

Viad Consolidated 

GES 

Pursuit

Viad Consolidated

2015 

2016 

2017

  — 

  — 

  (0.1)

Restructuring Charges, Pre-tax 

0.15 

  0.26 

0.05

Net Income  
Attributable to Viad 

Net Income Attributable to 
Noncontrolling Interest  

$ 26.6  $  42.3  $  57.7 

0.4 

0.5 

0.5

Net Loss Attributable to 
Redeemable Noncontrolling  
Interest 

Loss from Discontinued  
Operations 

  0.4 

  0.7 

  0.3 

Corporate Activities Expense 

9.7 

10.3 

  12.9 

Corporate Eliminations 

Restructuring Charges  

Impairment Charges  
(Recoveries) 

Interest Income 

Interest Expense 

 — 

3.0 

0.7 

5.2 

(0.1) 

1.0 

0.1 

0.2 

 (29.1) 

  (0.7) 

(1.2) 

  (0.3) 

4.5 

5.9 

8.3 

Income Tax Expense 

  10.5 

21.3 

 45.9 

Segment Operating Income  $ 54.6  $  85.9  $  97.1  $  50.0 

$  47.1

FlyOver Iceland  
Start-up Costs 

  — 

  — 

  0.1 

  — 

  0.1

Acquisition Integration Costs 

  0.9 

1.1 

  0.3 

  0.2 

  0.2

Fire-related Business 
Interruption Expense 

Acquisition Transaction- 
related Costs 

Adjusted Segment 
Operating Income

  — 

  0.1 

  — 

  — 

  —

  — 

0.5 

  0.2 

— 

  0.2

 55.5 

87.7 

 97.7 

  50.1 

  47.6 

Segment Depreciation 

  27.9 

33.4 

  42.5 

  26.4 

  16.1

Segment Amortization 

7.2 

9.2 

  12.4 

  10.8 

1.6

Adjusted Segment 
EBITDA 

$  90.6  $ 130.2  $ 152.6  $  87.4  $  65.2

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Net Income Attributable to Viad 

$  1.32  $  2.09  $ 2.83

Loss from Discontinued Operations 
Attributable to Viad

Income from Continuing Operations 
Attributable to Viad

0.02 

  0.03 

0.01 

1.34 

  2.12 

 2.84 

Impairment Charges (Recoveries), Pre-tax 

— 

  0.01 

  (1.43)

Acquisition-related Costs and Other 
Non-recurring Expenses, Pre-tax

0.15 

  0.12 

0.06 

Tax Expense (Benefit) on Above Items 

(0.11) 

 (0.13) 

Charge Related to Tax Reform 

Favorable Tax Matters  

— 

(0.07) 

— 

— 

0.37

0.79

 (0.06)

Income Before Other Items 

$  1.46  $ 2.38  $ 2.62

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 total due to rounding

AWARDS ’17& 
 
 
 
 
 
Cover Photos: (Top) FlyOver Canada – Vancouver, British Columbia, Canada, (Bottom) Haliburton Academy – Omni Dallas Hotel, Dallas, Texas

VIAD CORP

1850 N. Central Avenue 
Suite 1900 
Phoenix, AZ 85004-4565

www.viad.com