VIAD CORP, 10-K filed on 3/13/2015
Annual Report
Document and Entity Information (USD $)
In Millions, except Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Jan. 31, 2015
Jun. 30, 2014
Document and Entity Information [Abstract]
 
 
 
Entity Registrant Name
VIAD CORP 
 
 
Entity Central Index Key
0000884219 
 
 
Document Type
10-K 
 
 
Document Period End Date
Dec. 31, 2014 
 
 
Amendment Flag
false 
 
 
Document Fiscal Year Focus
2014 
 
 
Document Fiscal Period Focus
FY 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Filer Category
Accelerated Filer 
 
 
Entity Public Float
 
 
$ 477 
Entity Common Stock, Shares Outstanding
 
20,098,781 
 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Current assets
 
 
Cash and cash equivalents
$ 56,990 
$ 45,821 
Accounts receivable, net of allowance for doubtful accounts of $1,258 and $877, respectively
78,121 
61,197 
Inventories
32,401 
27,993 
Deferred income taxes
22,943 
20,577 
Other current assets
17,440 
17,142 
Total current assets
207,895 
172,730 
Property and equipment, net
199,571 
190,330 
Other investments and assets
40,674 
35,026 
Deferred income taxes
29,639 
29,823 
Goodwill
194,197 
129,543 
Other intangible assets, net
42,967 
4,480 
Total Assets
714,943 
561,932 
Current liabilities
 
 
Accounts payable
61,789 
40,941 
Customer deposits
32,720 
29,207 
Accrued compensation
20,736 
15,113 
Other current liabilities
27,787 
29,169 
Current portion of long-term debt and capital lease obligations
27,856 
10,903 
Total current liabilities
170,888 
125,333 
Long-term debt and capital lease obligations
113,164 
765 
Pension and postretirement benefits
33,427 
30,672 
Other deferred items and liabilities
49,762 
48,619 
Total liabilities
367,241 
205,389 
Commitments and contingencies
   
   
Viad Corp stockholders’ equity:
 
 
Common stock, $1.50 par value, 200,000,000 shares authorized, 24,934,981 shares issued
37,402 
37,402 
Additional capital
582,066 
590,862 
Retained deficit
(36,427)
(50,393)
Unearned employee benefits and other
23 
(21)
Accumulated other comprehensive income (loss):
 
 
Unrealized gain on investments
471 
429 
Cumulative foreign currency translation adjustments
12,416 
30,847 
Unrecognized net actuarial loss and prior service credit, net
(13,476)
(11,259)
Common stock in treasury, at cost, 4,842,621 and 4,618,433 shares, respectively
(247,088)
(250,426)
Total Viad Corp stockholders’ equity
335,387 
347,441 
Noncontrolling interest
12,315 
9,102 
Total stockholders’ equity
347,702 
356,543 
Total Liabilities and Stockholders’ Equity
$ 714,943 
$ 561,932 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Dec. 31, 2014
Dec. 31, 2013
Statement of Financial Position [Abstract]
 
 
Allowance for doubtful accounts
$ 1,258 
$ 877 
Common stock, par value
$ 1.50 
$ 1.50 
Common stock, shares authorized
200,000,000 
200,000,000 
Common stock, shares issued
24,934,981 
24,934,981 
Treasury stock, shares
4,842,621 
4,694,468 
Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Revenues:
 
 
 
Exhibition and event services
$ 772,770 
$ 685,350 
$ 726,429 
Exhibits and environments
171,698 
159,554 
175,611 
Travel and recreation services
120,519 
108,443 
104,604 
Total revenues
1,064,987 
953,347 
1,006,644 
Costs and expenses:
 
 
 
Costs of services
843,652 
758,466 
803,921 
Costs of products sold
161,469 
157,745 
164,532 
Gain on sale of facility and related land
(4,775)
Corporate activities
14,348 
6,755 
9,408 
Interest income
(305)
(550)
(593)
Interest expense
2,015 
1,234 
1,303 
Restructuring charges
1,637 
3,793 
4,942 
Goodwill impairment charge
2,097 
Other impairment charges
884 
952 
Total costs and expenses
1,023,700 
925,717 
983,513 
Income from continuing operations before income taxes
41,287 
27,630 
23,131 
Income tax expense
109 
8,310 
19,578 
Income from continuing operations
41,178 
19,320 
3,553 
Income from discontinued operations
14,389 
2,366 
3,030 
Net income
55,567 
21,686 
6,583 
Net income attributable to noncontrolling interest
(3,213)
(131)
(686)
Net income attributable to Viad
52,354 
21,555 
5,897 
Diluted income per common share:
 
 
 
Income from continuing operations attributable to Viad common stockholders (USD per share)
$ 2.02 
$ 0.96 
$ 0.17 
Income from discontinued operations attributable to Viad common stockholders (USD per share)
$ 0.57 
$ 0.10 
$ 0.12 
Net income attributable to Viad common stockholders (USD per share)
$ 2.59 
$ 1.06 
$ 0.29 
Weighted-average outstanding and potentially dilutive common shares
20,133 
20,265 
20,005 
Basic income per common share:
 
 
 
Income from continuing operations attributable to Viad common stockholders (USD per share)
$ 2.02 
$ 0.96 
$ 0.17 
Income from discontinued operations attributable to Viad common stockholders (USD per share)
$ 0.57 
$ 0.10 
$ 0.12 
Net income attributable to Viad common stockholders (USD per share)
$ 2.59 
$ 1.06 
$ 0.29 
Weighted-average outstanding common shares
19,804 
19,850 
19,701 
Dividends declared per common share (USD per share)
$ 1.90 
$ 2.90 
$ 0.28 
Amounts attributable to Viad common stockholders
 
 
 
Income from continuing operations
40,790 
19,437 
3,348 
Income from discontinued operations
11,564 
2,118 
2,549 
Net income
$ 52,354 
$ 21,555 
$ 5,897 
Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Statement of Comprehensive Income [Abstract]
 
 
 
Net income
$ 55,567 
$ 21,686 
$ 6,583 
Other comprehensive income:
 
 
 
Unrealized gains on investments, net of tax expense (benefit) of $26, $96 and $33
42 
154 
53 
Unrealized foreign currency translation adjustments, net of tax
(18,431)
(11,311)
7,510 
Amortization of net actuarial gain (loss), net of tax expense (benefit) of $(1,538), $2,380 and $(574)
(2,568)
4,244 
(1,311)
Amortization of prior service credit (cost), net of tax expense (benefit) of $339, $(327) and $(433)
351 
(535)
(680)
Comprehensive income
34,961 
14,238 
12,155 
Comprehensive income attributable to noncontrolling interest
(3,213)
(131)
(686)
Comprehensive income attributable to Viad
$ 31,748 
$ 14,107 
$ 11,469 
Consolidated Statements of Comprehensive Income (Parenthetical) (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Statement of Comprehensive Income [Abstract]
 
 
 
Unrealized investment gains (losses) arising during the period, net of tax expense (benefit)
$ 26 
$ 96 
$ 33 
Amortization of net actuarial loss, net of tax expense (benefit)
1,538 
2,380 
(574)
Amortization of prior service credit, net of tax
$ (339)
$ (327)
$ (433)
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
12 Months Ended
Dec. 31, 2014
Dec. 31, 2013
Dec. 31, 2012
Cash flows from operating activities
 
 
 
Net income
$ 55,567 
$ 21,686 
$ 6,583 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
30,792 
27,967 
30,133 
Deferred income taxes
(9,731)
2,298 
11,274 
Income from discontinued operations
(14,389)
(2,366)
(3,030)
Restructuring charges
1,637 
3,793 
4,942 
Impairment charges
884 
3,049 
Gain on sale of facility and related land
(4,775)
Gains on dispositions of property and other assets
(958)
(265)
(206)
Share-based compensation expense
2,930 
5,221 
7,232 
Excess tax benefit from share-based compensation arrangements
(114)
(422)
(293)
Other non-cash items, net
5,386 
4,870 
10,157 
Change in operating assets and liabilities (excluding the impact of acquisitions):
 
 
 
Receivables
(10,441)
1,246 
142 
Inventories
(2,555)
7,663 
195 
Accounts payable
18,128 
(15,436)
4,310 
Restructuring liabilities
(5,276)
(4,841)
(4,694)
Accrued compensation
3,663 
(11,707)
1,631 
Customer deposits
(6,406)
(20,965)
926 
Income taxes payable
1,543 
218 
467 
Other assets and liabilities, net
(12,570)
(11,179)
(583)
Net cash provided by operating activities
58,090 
6,055 
69,186 
Cash flows from investing activities
 
 
 
Proceeds from possessory interest and personal property - discontinued operations
28,000 
Proceeds from dispositions of property and other assets
1,109 
464 
322 
Capital expenditures
(29,389)
(36,119)
(27,675)
Acquisition of businesses, net of cash acquired
(120,251)
(647)
(23,546)
Proceeds from sale of facility and related land
12,696 
Proceeds from sale of land—discontinued operations
1,645 
1,041 
Proceeds from sale of short-term investments
384 
Net cash used in investing activities
(120,531)
(21,961)
(49,474)
Cash flows from financing activities
 
 
 
Proceeds from borrowings
189,512 
20,000 
Payments on debt and capital lease obligations
(61,461)
(11,362)
(2,685)
Dividends paid on common stock
(38,387)
(58,914)
(4,454)
Common stock purchased for treasury
(12,321)
(1,328)
(1,656)
Debt issuance costs
(1,671)
Excess tax benefit from share-based compensation arrangements
114 
422 
293 
Proceeds from exercise of stock options
1,155 
777 
248 
Net cash provided by (used in) financing activities
76,941 
(50,405)
(8,254)
Effect of exchange rate changes on cash and cash equivalents
(3,331)
(2,039)
2,337 
Net change in cash and cash equivalents
11,169 
(68,350)
13,795 
Cash and cash equivalents, beginning of year
45,821 
114,171 
100,376 
Cash and cash equivalents, end of year
56,990 
45,821 
114,171 
Supplemental disclosure of cash flow information
 
 
 
Cash paid for income taxes
8,389 
8,498 
8,386 
Cash paid for interest
1,703 
1,006 
1,103 
Property and equipment acquired under capital leases
881 
832 
1,011 
Property and equipment purchases in accounts payable and accrued liabilities
$ 780 
$ 3,204 
$ 4,822 
Consolidated Statements of Stockholders' Equity (USD $)
In Thousands, unless otherwise specified
Total
Common Stock
Additional Capital
Retained Deficit
Unearned Employee Benefits and Other
Accumulated Other Comprehensive Income
Common Stock in Treasury
Total Viad Equity
Non-Controlling Interest
Beginning Balance at Dec. 31, 2011
$ 386,179 
$ 37,402 
$ 599,188 
$ (13,256)
$ (2,951)
$ 21,893 
$ (264,382)
$ 377,894 
$ 8,285 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Net income
6,583 
 
 
5,897 
 
 
 
5,897 
686 
Dividends on common stock
(5,674)
 
 
(5,674)
 
 
 
(5,674)
 
Common stock purchased for treasury
(1,656)
 
 
 
 
 
(1,656)
(1,656)
 
Employee benefit plans
248 
 
(9,456)
 
 
 
9,704 
248 
 
ESOP allocation adjustment
1,647 
 
 
 
1,647 
 
 
1,647 
 
Share-based compensation-equity awards
4,036 
 
4,036 
 
 
 
 
4,036 
 
Tax deficiencies from share-based compensation
96 
 
96 
 
 
 
 
96 
 
Unrealized foreign currency translation adjustment
7,510 
 
 
 
 
7,510 
 
7,510 
 
Unrealized gain (loss) on investments
53 
 
 
 
 
53 
 
53 
 
Amortization of net actuarial loss
(1,311)
 
 
 
 
(1,311)
 
(1,311)
 
Amortization of prior service credit
(680)
 
 
 
 
(680)
 
(680)
 
Other, net
 
(2)
(1)
 
 
Ending Balance at Dec. 31, 2012
397,032 
37,402 
593,862 
(13,034)
(1,301)
27,465 
(256,333)
388,061 
8,971 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Net income
21,686 
 
 
21,555 
 
 
 
21,555 
131 
Dividends on common stock
(58,914)
 
 
(58,914)
 
 
 
(58,914)
 
Common stock purchased for treasury
(1,328)
 
 
 
 
 
(1,328)
(1,328)
 
Employee benefit plans
778 
 
(6,456)
 
 
 
7,234 
778 
 
ESOP allocation adjustment
1,280 
 
 
 
1,280 
 
 
1,280 
 
Share-based compensation-equity awards
3,053 
 
3,053 
 
 
 
 
3,053 
 
Tax deficiencies from share-based compensation
404 
 
404 
 
 
 
 
404 
 
Unrealized foreign currency translation adjustment
(11,311)
 
 
 
 
(11,311)
 
(11,311)
 
Unrealized gain (loss) on investments
154 
 
 
 
 
154 
 
154 
 
Amortization of net actuarial loss
4,244 
 
 
 
 
4,244 
 
4,244 
 
Amortization of prior service credit
(535)
 
 
 
 
(535)
 
(535)
 
Other, net
 
(1)
   
 
 
Ending Balance at Dec. 31, 2013
356,543 
37,402 
590,862 
(50,393)
(21)
20,017 
(250,426)
347,441 
9,102 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
Net income
55,567 
 
 
52,354 
 
 
 
52,354 
3,213 
Dividends on common stock
(38,387)
 
 
(38,387)
 
 
 
(38,387)
 
Common stock purchased for treasury
(12,321)
 
 
 
 
 
(12,321)
(12,321)
 
Employee benefit plans
4,324 
 
(11,334)
 
 
 
15,658 
4,324 
 
ESOP allocation adjustment
44 
 
 
 
44 
 
 
44 
 
Share-based compensation-equity awards
2,319 
 
2,319 
 
 
 
 
2,319 
 
Tax benefits from share-based compensation
217 
 
217 
 
 
 
 
217 
 
Tax deficiencies from share-based compensation
461 
 
 
 
 
 
 
 
 
Unrealized foreign currency translation adjustment
(18,431)
 
 
 
 
(18,431)
 
(18,431)
 
Unrealized gain (loss) on investments
42 
 
 
 
 
42 
 
42 
 
Amortization of net actuarial loss
(2,568)
 
 
 
 
 
 
(2,568)
 
Amortization of prior service credit
351 
 
 
 
 
 
 
351 
 
Other, net
 
(1)
   
 
 
Ending Balance at Dec. 31, 2014
$ 347,702 
$ 37,402 
$ 582,066 
$ (36,427)
$ 23 
$ (589)
$ (247,088)
$ 335,387 
$ 12,315 
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The consolidated financial statements of Viad Corp (“Viad” or the “Company”) are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of Viad and all of its subsidiaries. All intercompany account balances and transactions between Viad and its subsidiaries have been eliminated in consolidation.
Nature of Business
Viad’s reportable segments consist of Marketing & Events U.S., Marketing & Events International and Travel & Recreation Group.
Marketing & Events Group
The Marketing & Events Group, comprised of Global Experience Specialists, Inc. and affiliates (“GES”), is a global event marketing company that helps clients gain more awareness, more involvement and more value from their trade show programs and other live events. The Marketing & Events Group specializes in all aspects of the design, planning and production of face-to-face events, immersive environments and brand-based experiences for clients, including show organizers, corporate brand marketers and retail shopping centers. The mission of the Marketing & Events Group is to create the world’s most meaningful and memorable experiences for show organizers, brand marketers, event attendees and retail shopping centers. Show organizers include for-profit and not-for-profit show owners as well as show management companies. 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. Viad’s retail shopping center customers include major developers, owners and management companies of shopping malls and leisure centers.
On September 16, 2014, the Company acquired Blitz Communications Group Limited and affiliates (collectively, “Blitz”), which has offices in the United Kingdom and is a leading audio-visual staging and creative services provider for the live events industry in the United Kingdom and continental Europe. The purchase price was £15 million (approximately $24.4 million) in cash, subject to certain adjustments.
On October 7, 2014, the Company acquired onPeak LLC and Travel Planners, Inc. (collectively, “onPeak”) for a purchase price of $43.0 million and $33.7 million, respectively, in cash, subject to certain adjustments. Both acquired companies provide event accommodations services in North America to the live events industry.
On November 24, 2014, the Company acquired N200 Limited and affiliates (collectively, “N200”) for €9.7 million (approximately $12.1 million) in cash, subject to certain adjustments, plus an earnout payment (the “Earnout”) of up to €1.0 million. The amount of the Earnout is based on N200’s achievement of established financial targets for fiscal 2015 (ending June 30). N200, which has offices in the United Kingdom and the Netherlands, is a leading event registration and data intelligence services provider for the live events industry in the United Kingdom and the Netherlands.

For additional information, refer to Note 3Acquisition of Businesses.
Travel & Recreation Group
The Travel & Recreation Group is an experiential leisure travel provider serving the needs of regional and long-haul visitors to iconic natural and cultural destinations in North America. The Travel & Recreation Group consists of Brewster Inc. (“Brewster”), Glacier Park, Inc. (“Glacier Park”) and Alaskan Park Properties, Inc. (“Alaska Denali Travel”). Brewster provides tourism products and experiential services in the Canadian Rockies in Alberta and in other parts of Western Canada. Brewster’s operations include the Banff Gondola, Columbia Icefield Glacier Adventure, Glacier Skywalk (opened May 2014), Banff Lake Cruise, motorcoach services, charter and sightseeing services, inbound package tour operations and hotel operations.
Glacier Park, an 80 percent owned subsidiary of Viad, owns and operates seven lodges, with accommodation offerings varying from hikers’ cabins to hotel suites, including St. Mary Lodge, a 115-room, full-service resort lodge located outside the east entrance to Glacier National Park in St. Mary, Montana; Glacier Park Lodge, a historic lodge in East Glacier, Montana; Grouse Mountain Lodge, a full-season lodge offering golf, skiing in the winter, hiking in the summer and other seasonal recreational activities, located near Glacier National Park in Whitefish, Montana; the Prince of Wales Hotel in Waterton Lakes National Park, Alberta, Canada, which is situated on land for which the Company has a 42-year ground lease with the Canadian government running through January 31, 2052; the West Glacier Motel & Cabins in West Glacier, Montana, and Motel Lake McDonald and the Apgar Village Lodge, which are located inside Glacier National Park. Glacier Park also operates the food and beverage services with respect to those properties and the retail shops located near Glacier National Park. With regard to Glacier Park’s concession operations within Glacier National Park, refer to Note 24, Discontinued Operations.

On July 1, 2014, the Company acquired the West Glacier Motel & Cabins, the Apgar Village Lodge and related land, food and beverage services and retail operations (collectively, the “West Glacier Properties”). The West Glacier Motel & Cabins is a 32-room property situated on approximately 200 acres at the west entrance of Glacier National Park, and its full-service amenities include a restaurant, grocery store, gift shops, a gas station and employee accommodations. The Apgar Village Lodge is a 48-room property situated on a 3.8 acre private in-holding inside Glacier National Park with overnight accommodations, a gift shop and employee accommodations. The purchase price was $16.5 million in cash with a working capital adjustment of $0.3 million, subject to certain adjustments. For additional information, refer to Note 3Acquisition of Businesses.
Alaska Denali Travel operates the Denali Backcountry Lodge and Denali Cabins. In addition to lodging, Alaska Denali Travel also provides food and beverage operations and package tour and transportation services in and around Denali National Park and Preserve.
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 amounts reported in the consolidated financial statements and accompanying notes. These estimates and assumptions include, but are not limited to:
Fair value of Viad’s reporting units used to perform annual impairment testing of recorded goodwill;
Allowances for uncollectible accounts receivable;
Provisions for income taxes, including uncertain tax positions;
Valuation allowances related to deferred tax assets;
Liabilities for losses related to self-insured liability claims;
Liabilities for losses related to environmental remediation obligations;
Sublease income associated with restructuring liabilities;
Assumptions used to measure pension and postretirement benefit costs and obligations;
Assumptions used to determine share-based compensation costs under the fair value method and
Allocation of purchase price of acquired businesses.
Actual results could differ from these and other estimates.
Cash and Cash Equivalents. Viad considers all highly-liquid investments with remaining maturities when purchased of three months or less to be cash equivalents. Viad’s cash and cash equivalents consist of cash and bank demand deposits, bank time deposits and money market mutual funds. The Company’s investments in money market mutual funds are classified as available-for-sale and carried at fair value.
Inventories. Inventories, which consist primarily of exhibit design and construction materials and supplies used in providing convention show services, are stated at the lower of cost (first-in, first-out and specific identification methods) or market.
Property and Equipment. Property and equipment are stated at cost, net of accumulated depreciation. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets: buildings, 15 to 40 years; equipment, 3 to 12 years; and leasehold improvements, over the shorter of the lease term or useful life. Property and equipment are tested for potential impairment whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset may not be recoverable through undiscounted cash flows.
Capitalized Software. Viad capitalizes certain internal and external costs incurred in developing or obtaining internal use software. Capitalized costs principally relate to costs incurred to purchase software from third parties, external direct costs of materials and services, and certain payroll-related costs for employees directly associated with software projects once application development begins. Costs associated with preliminary project activities, training and other post-implementation activities are expensed as incurred. Capitalized software costs are amortized using the straight-line method over the estimated useful lives of the software, ranging from three to ten years. These costs are included in the consolidated balance sheets under the caption “Property and equipment, net.”
Goodwill. Goodwill is tested for impairment at the reporting unit level on an annual basis as of October 31 of each year. Goodwill is also tested for impairment 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 amount. Viad uses a discounted expected future cash flow methodology (income approach) in order to estimate the fair value of its reporting units for purposes of goodwill impairment testing. The estimates and assumptions regarding expected future cash flows, discount rates and terminal values require considerable judgment and are based on market conditions, financial forecasts, industry trends and historical experience. These estimates, however, have inherent uncertainties and different assumptions could lead to materially different results.
Cash Surrender Value of Life Insurance. Viad has Company-owned life insurance contracts which are intended to fund the cost of certain employee compensation and benefit programs. These contracts are carried at cash surrender value, net of outstanding policy loans. The cash surrender value represents the amount of cash the Company could receive if the policies were discontinued before maturity. The changes in the cash surrender value of the policies, net of insurance premiums, are included as a component of “Costs of Services” in the consolidated statements of operations.
Self-Insurance Liabilities. Viad is self-insured up to certain limits for workers’ compensation, automobile, product and general liability, property loss and medical claims. Viad has also retained certain liabilities related to workers’ compensation and general liability insurance claims in conjunction with previously sold operations. Provisions for losses for claims incurred, including estimated claims incurred but not yet reported, are made based on Viad’s prior historical experience, claims frequency and other factors. Viad has purchased insurance for amounts in excess of the self-insured levels.
Environmental Remediation Liabilities. Viad has retained certain liabilities representing the estimated cost of environmental remediation obligations primarily associated with previously sold operations. The amounts accrued primarily consist of the estimated direct incremental costs, on an undiscounted basis, for contractor and other services related to remedial actions and post-remediation site monitoring. Environmental remediation liabilities are recorded when the specific obligation is considered probable and the costs are reasonably estimable. Subsequent recoveries from third parties, if any, are recorded through discontinued operations when realized.
Fair Value of Financial Instruments. The carrying values of cash and cash equivalents, receivables and accounts payable approximate fair value due to the short-term maturities of these instruments. The estimated fair value of debt obligations is disclosed in Note 11, Debt.
Foreign Currency Translation. Viad conducts its foreign operations primarily in Canada, the United Kingdom, Germany and to a lesser extent in certain other countries. The functional currency of Viad’s foreign subsidiaries is their local currency. Accordingly, for purposes of consolidation, Viad translates the assets and liabilities of its foreign subsidiaries into U.S. dollars at the foreign exchange rates in effect at the balance sheet date. The unrealized gains or losses resulting from the translation of these foreign denominated assets and liabilities are included as a component of accumulated other comprehensive income in Viad’s consolidated balance sheets. In addition, for purposes of consolidation, the revenues, expenses and gains and losses related to Viad’s foreign operations are translated into U.S. dollars at the average foreign exchange rates for the period.
Revenue Recognition. Viad recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the sales price is fixed or determinable and collectability is reasonably assured. GES derives revenues primarily by providing show services to exhibitors participating in exhibitions and events and from the design, construction and refurbishment of exhibit booths and holiday themed environments. Service revenue is recognized at the time services are completed. Service revenue from event accommodations services is recorded when services are completed and is net of commissions. Exhibits and environments revenue is accounted for using the completed-contract method. The Travel & Recreation Group generates revenues through its attractions, hotels and transportation and sightseeing services. Revenues are recognized at the time services are performed.
Share-Based Compensation. Viad recognizes and measures compensation costs related to all share-based payment awards using the fair value method of accounting. These awards generally include restricted stock, performance-based restricted stock (“PBRS”), stock options and liability-based awards (including performance units, restricted stock units and performance-based restricted stock units). These awards contain forfeiture and non-compete provisions.
The fair value of restricted stock and PBRS awards are based on Viad’s stock price on the date of grant. Viad issues restricted stock and PBRS awards from shares held in treasury. Future vesting of restricted stock and PBRS is generally subject to continued employment with Viad or its subsidiaries. Holders of restricted stock and PBRS have the right to receive dividends and vote the shares, but may not sell, assign, transfer, pledge or otherwise encumber the stock, except to the extent restrictions have lapsed.
Restricted stock awards vest between three and five years from the date of grant. Share-based compensation expense related to restricted stock is recognized using the straight-line method over the requisite service period of approximately three years except for certain awards with a five-year vesting period whereby expense is recognized based on an accelerated multiple-award approach over a five-year period. For these awards, 40 percent of the shares vest on the third anniversary of the grant and the remaining shares vest in 30 percent increments over the subsequent two anniversary dates.
Liability-based awards (including performance units, restricted stock units and PBRS units awarded to key employees at certain of the Company’s Canadian operations) are recorded at estimated fair value, based on the number of units expected to vest and the level of achievement of predefined performance goals (where applicable) and are remeasured on each balance sheet date based on Viad’s stock price or the Monte Carlo simulation method until the time of settlement. The fair value of performance-based awards based on a market condition is determined using a Monte Carlo simulation. A Monte Carlo simulation requires the use of a number of assumptions, including historical volatility and correlation of the price of Viad’s stock and the price of the common shares of a comparator group, a risk-free rate of return and an expected term. To the extent earned, liability-based awards are settled in cash based on Viad’s stock price. Compensation expense related to liability-based awards is recognized ratably over the requisite service period of approximately three years.
Share-based compensation expense related to PBRS awards is recognized based on an accelerated multiple-award approach over the requisite service period of approximately three years. PBRS vests when certain incentive performance targets established in the year of grant are achieved at target levels. PBRS is subject to a graded vesting schedule whereby one third of the earned shares vest after the first year and the remaining earned shares vest in one-third increments each year over the next two years on the first business day in January.
The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. Share-based compensation expense related to stock option awards is recognized using the straight-line method over the requisite service period of approximately five years. The exercise price of stock options is based on the market value of Viad’s common stock at the date of grant.
Common Stock in Treasury. Common stock purchased for treasury is recorded at historical cost. Subsequent share reissuances are primarily related to share-based compensation programs and recorded at weighted-average cost.
Income Per Common Share. Viad applies the two-class method in calculating income per common share as unvested share-based payment awards that contain nonforfeitable rights to dividends are considered participating securities. Accordingly, such securities are included in the earnings allocation in calculating income per share. Historically, Viad has funded its matching contributions to employees’ 401(k) accounts through the Company’s leveraged Employee Stock Ownership Plan (“ESOP”) feature of the Company’s 401(k) defined contribution plan. ESOP shares are treated as outstanding for income per share calculations. During 2014, the Company depleted these shares and matching contributions are now funded from shares of Viad common stock held in treasury.
Impact of Recent Accounting Pronouncements
In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The new guidance changes the criteria for reporting discontinued operations while enhancing disclosures. Under the standard, only disposals representing a strategic shift in operations, such as a disposal of a major geographic area, a major line of business or a major equity method investment, may be presented as discontinued operations. This guidance is effective for interim and annual periods beginning after December 15, 2014 and is not expected to have a material impact on Viad’s financial condition or results of operations.

In May 2014, the FASB issued ASU No. 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. The guidance is effective for fiscal years beginning after December 15, 2016, and early adoption is not permitted. The Company has not yet determined if the adoption of this new guidance will have a material impact on its financial position or results of operations.

In June 2014, the FASB issued ASU No. 2014-12, Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target Could be Achieved after the Requisite Service Period. The new guidance requires that a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant date fair value of the award. This update is effective for our fiscal year beginning January 1, 2016 and early adoption is permitted. The adoption of this new guidance is not expected to have a material impact on Viad’s financial condition or results of operations.
Share-Based Compensation
Share-Based Compensation
Share-Based Compensation
Viad grants share-based compensation awards to officers, directors and certain key employees pursuant to the 2007 Viad Corp Omnibus Incentive Plan (the “2007 Plan”). The 2007 Plan has a 10-year life and provides for the following types of awards: (a) incentive and non-qualified stock options; (b) restricted stock and restricted stock units; (c) performance units or performance shares; (d) stock appreciation rights; (e) cash-based awards and (f) certain other stock-based awards. The number of shares of common stock available for grant under the 2007 Plan is limited to 1.7 million shares plus shares awarded under the 1997 Viad Corp Omnibus Incentive Plan (which terminated in May 2007) (the “1997 Plan”) that subsequently cease for any reason to be subject to such awards (other than by reason of exercise or settlement of the awards to the extent the shares are exercised for, or settled in, vested and non-forfeited shares) up to an aggregate maximum of 1.5 million shares. As of December 31, 2014, there were 889,254 total shares available for future grant.
The following table summarizes share-based compensation expense:
(in thousands)
2014
 
2013
 
2012
Restricted stock/PBRS
$
2,495

 
$
3,073

 
$
3,267

Performance unit incentive plan (“PUP”)
359

 
1,864

 
2,922

Restricted stock units/PBRS units
76

 
177

 
450

Stock options

 
107

 
593

Total share-based compensation before income tax benefit
2,930

 
5,221

 
7,232

Income tax benefit
(1,102
)
 
(1,936
)
 
(2,574
)
Total share-based compensation, net of income tax benefit
$
1,828

 
$
3,285

 
$
4,658


In addition, $0.1 million of benefits and $0.7 million and $0.3 million of costs associated with share-based compensation were included in restructuring expense in 2014, 2013 and 2012, respectively. The 2014 amount of $0.1 million related to reversal of expense of PUP awards. Of the 2013 amount, $0.3 million related to the restricted stock units and PUP awards presented below. Similarly, of the 2012 amount, $0.1 million related to PUP awards. No share-based compensation costs were capitalized during 2014, 2013 or 2012.
On January 24, 2014 and October 25, 2013, Viad announced that its Board of Directors declared special cash dividends of $1.50 and $2.50 per share, respectively, to shareholders of record at the close of business on February 7, 2014 and November 7, 2013, respectively. In accordance with the mandatory provisions of the 2007 Plan and the 1997 Plan, the Human Resources Committee of Viad’s Board of Directors approved equitable adjustments to outstanding long-term incentive awards of stock options and PUP awards issued pursuant to those plans in order to prevent the special dividends from diluting the rights of participants under those plans. The equitable adjustments to the outstanding stock options reduced the exercise price and increased the number of shares of common stock underlying such options. The equitable adjustment to the PUP awards reflects the effect of the special dividends, but would be paid only if certain performance goals are met at the end of the 3-year performance period.
Restricted Stock and PBRS. The following table summarizes restricted stock and PBRS activity:
 
Restricted Stock
 
PBRS
 
Shares
 
Weighted-Average
Grant Date
Fair Value
 
Shares
 
Weighted-Average
Grant Date
Fair Value
Balance at December 31, 2011
572,022

 
$
20.36

 
416

 
$
15.36

Granted
168,050

 
20.46

 

 

Vested
(219,571
)
 
18.26

 
(416
)
 
15.36

Forfeited
(4,150
)
 
24.80

 

 

Balance, December 31, 2012
516,351

 
21.25

 

 


Granted
101,300

 
27.27

 

 

Vested
(166,320
)
 
20.83

 

 


Forfeited
(20,432
)
 
22.13

 

 

Balance, December 31, 2013
430,899

 
22.78

 

 

Granted
128,700

 
23.79

 

 

Vested
(197,671
)
 
22.51

 

 

Forfeited
(33,326
)
 
23.13

 

 

Balance, December 31, 2014
328,602

 
23.30

 

 


The grant date fair value of restricted stock which vested during 2014, 2013 and 2012 was $4.5 million, $3.5 million and $4.0 million, respectively. The grant date fair value of PBRS which vested during 2012 was approximately $6,000. No PBRS vested during 2013 and 2014. As of December 31, 2014, the unamortized cost of all outstanding stock awards was $3.1 million, which Viad expects to recognize in the consolidated financial statements over a weighted-average period of approximately 1.2 years. During 2014, 2013 and 2012, the Company withheld 72,996 shares at a cost of $1.8 million, 50,156 shares at a cost of $1.3 million and 56,885 shares at a cost of $1.1 million, respectively, related to tax withholding requirements on vested share-based awards.
Liability-Based Awards. The following table summarizes the liability-based award activity:
 
PUP Awards
 
Restricted Stock Units
 
PBRS Units
 
Units
 
Weighted-Average
Grant Date
Fair Value
 
Units
 
Weighted-Average
Grant Date
Fair Value
 
Units
 
Weighted-Average
Grant Date
Fair Value
Balance at December 31, 2011
95,500

 
$
23.02

 
38,600

 
$
19.07

 
1,956

 
$
15.36

Granted
115,100

 
20.60

 
15,850

 
20.57

 

 

Vested

 

 
(13,100
)
 
15.36

 
(1,956
)
 
15.36

Forfeited

 

 
(850
)
 
20.89

 

 

Balance, December 31, 2012
210,600

 
21.70

 
40,500

 
20.82

 

 


Granted
93,100

 
27.35

 
8,600

 
27.35

 

 

Vested

 

 
(11,300
)
 
19.10

 

 

Forfeited
(3,932
)
 
21.15

 
(9,240
)
 
22.55

 

 

Balance, December 31, 2013
299,768

 
23.46

 
28,560

 
22.91

 

 

Granted
123,300

 
23.71

 
7,200

 
24.87

 

 

Vested
(94,600
)
 
23.01

 
(9,890
)
 
23.45

 

 

Forfeited
(61,348
)
 
24.43

 
(500
)
 
27.32

 

 

Balance, December 31, 2014
267,120

 
23.51

 
25,370

 
23.17

 

 


As of December 31, 2014 and 2013, Viad had liabilities recorded of $3.5 million and $5.9 million, respectively, related to PUP awards. In March 2014, the PUP units granted in 2011 vested and cash payouts totaling $2.9 million were distributed. There were no cash settlements of PUP awards during 2013 or 2012. As of December 31, 2014 and 2013, Viad had aggregate liabilities recorded of $0.5 million and $0.7 million, respectively, related to restricted stock unit liability awards. In February 2014, portions of the 2009, 2010 and 2011 restricted stock unit awards vested and cash payouts totaling $0.2 million were distributed. Similarly, in February 2013 and 2012, portions of the 2009 and 2010 restricted stock unit awards vested and cash payouts of $0.3 million and $0.3 million were distributed, respectively. A portion of the 2009 PBRS unit awards vested effective December 31, 2009 and a cash payout of $35,000 was distributed in January 2012. As previously discussed above, the equitable adjustment to the PUP awards reflects the effect of the special dividends, but would be paid only if certain performance goals are met at the end of the 3-year performance period. This adjustment to the PUP awards did not impact the compensation expense recognized by the Company for the years ended December 31, 2014 and 2013, or the unrecognized cost.
Stock Options. The following table summarizes stock option activity:
 
Shares
 
Weighted-
Average
Exercise Price
 
Options
Exercisable
Options outstanding at December 31, 2011
584,201

 
23.32

 
396,688

Exercised
(12,099
)
 
19.41

 
 
Forfeited or expired
(208,206
)
 
25.81

 
 
Options outstanding at December 31, 2012
363,896

 
22.03

 
276,009

Exercised
(59,543
)
 
19.42

 
 
Forfeited or expired(1)
(15,853
)
 
40.45

 
 
Award modification
25,823

 
N/A

 
 
Options outstanding at December 31, 2013
314,323

 
19.79

 
314,323

Exercised
(66,076
)
 
18.53

 
 
Forfeited or expired
(18,522
)
 
35.28

 
 
Award modification
17,865

 
N/A

 
 
Options outstanding at December 31, 2014
247,590

 
17.82

 
247,590


(1) This includes the reversal of previously canceled stock options.
As of December 31, 2014, there were no unrecognized costs related to non-vested stock option awards. No stock options were granted in 2014, 2013 or 2012. As previously discussed above, the equitable adjustments to the outstanding stock options resulting from the special cash dividends paid on February 14, 2014 and November 14, 2013 reduced the exercise price and increased the number of shares of common stock underlying such options. This adjustment to the exercise price and the number of shares did not impact the compensation expense recognized by the Company for the years ended December 31, 2014 and 2013, or the unrecognized cost.
The following table summarizes information concerning stock options outstanding and exercisable as of December 31, 2014:
 
Options Outstanding
 
Options Exercisable
 
 
 
Weighted-Average
Remaining Contractual Life (in years)
 
Weighted-
Average Exercise Price
 
 
 
Weighted-
Average Exercise Price
Range of Exercise Prices:
Shares
 
 
 
Shares
 
$16.62
224,137

 
3.8
 
$
16.62

 
224,137

 
$
16.62

$29.27
23,453

 
0.2
 
29.27

 
23,453

 
29.27

$16.62 to $29.27
247,590

 
3.5
 
17.82

 
247,590

 
17.82


Additional information pertaining to stock options is provided in the table below:
(in thousands)
2014
 
2013
 
2012
Total intrinsic value of stock options outstanding
$
2,251

 
$
2,723

 
$
2,329

Total intrinsic value of stock options exercised
$
1,616

 
$
1,611

 
$
296

Fair value of stock options vested
$

 
$
532

 
$
539

Cash received from the exercise of stock options
$
1,155

 
$
777

 
$
248

Tax benefits realized for tax deductions related to stock option exercises and performance-based awards
$
461

 
$
404

 
$
96


The aggregate intrinsic value of stock options outstanding in the table above represents the difference between Viad’s closing stock price on December 31 of each year and the exercise price, multiplied by the number of in-the-money options. The intrinsic value of stock options outstanding therefore changes based on changes in the fair market value of Viad’s common stock.
Acquisition of Businesses
Acquisition of Businesses
Acquisition of Businesses
West Glacier Properties
On July 1, 2014, the Company acquired the West Glacier Properties. The West Glacier Motel & Cabins is a 32-room property situated on approximately 200 acres at the west entrance of Glacier National Park, and its full-service amenities include a restaurant, grocery store, gift shops, a gas station and employee accommodations. The Apgar Village Lodge is a 48-room property situated on a 3.8 acre private in-holding inside Glacier National Park with overnight accommodations, a gift shop and employee accommodations. The purchase price was $16.5 million in cash plus a working capital adjustment of $0.3 million, subject to certain adjustments. The working capital adjustment relates to the true up of certain current assets and liabilities.

The following table summarizes the recording of the fair values of the assets acquired and liabilities assumed as of the acquisition date. These amounts are subject to change within the measurement period as our working capital adjustments are finalized.
(in thousands)
 
 
 
 
Purchase price paid as:
 
 
 
 
Cash
 
 
 
$
16,544

Working capital adjustment payable
 
 
 
320

Total purchase price
 
 
 
16,864

 
 
 
 
 
Fair value of net assets acquired:
 
 
 
 
Prepaid expenses
 
$
24

 
 
Inventory
 
1,374

 
 
Property and equipment, net
 
14,510

 
 
Intangible assets
 
189

 
 
Total assets acquired
 
16,097

 
 
Accrued liabilities
 
35

 
 
Customer deposits
 
402

 
 
Other liabilities
 
64

 
 
Total liabilities acquired
 
501

 
 
Total fair value of net assets acquired
 
 
 
15,596

Excess purchase price over fair value of net assets acquired (“goodwill”)
 
 
 
$
1,268


Under the acquisition method of accounting, the purchase price as shown in the table above is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess purchase price over fair value of net assets acquired was recorded as goodwill. The goodwill is included in the Travel & Recreation Group and the primary factor that contributed to the purchase price resulting in the recognition of goodwill relates to future growth opportunities when combined with our other businesses. The goodwill is deductible for tax purposes over a period of 15 years. The estimated values of current assets and liabilities were based upon their historical costs on the date of acquisition due to their short-term nature. Transaction costs associated with the acquisition of the West Glacier Properties were $0.2 million and are included in corporate activities in Viad’s Condensed Consolidated Statements of Operations.
Identified intangible assets acquired in the the West Glacier Properties acquisition totaled $0.2 million and consist primarily of favorable lease contracts. The weighted-average amortization period related to the definite lived intangible assets is 3.5 years.
The results of operations of the West Glacier Properties have been included in Viad’s condensed consolidated financial statements from the date of acquisition. During 2014, revenues of $4.6 million and operating income of $1.5 million related to the West Glacier Properties have been included in Viad’s Condensed Consolidated Statements of Operations.
Blitz
On September 16, 2014, the Company acquired Blitz, which has offices in the United Kingdom and is a leading audio-visual staging and creative services provider for the live events industry in the United Kingdom and continental Europe. The purchase price was £15 million (approximately $24.4 million) in cash, subject to certain adjustments.

The following table summarizes the preliminary recording of the fair values of the assets acquired and liabilities assumed as of the acquisition date. Due to the recent timing of the acquisition, we have not yet finalized our purchase price allocation. These amounts are subject to change within the measurement period as assessment of intangible assets and certain tax amounts are finalized.
(in thousands)
 
 
 
 
Purchase price paid as:
 
 
 
 
Cash
 
 
 
$
24,416

Cash acquired
 
 
 
(190
)
Purchase price, net of cash acquired
 
 
 
$
24,226

 
 
 
 
 
Fair value of net assets acquired:
 
 
 
 
Accounts receivable, net
 
$
264

 
 
Inventory
 
433

 
 
Prepaid expenses
 
410

 
 
Property and equipment, net
 
5,902

 
 
Intangible assets
 
8,708

 
 
Total assets acquired
 
15,717

 
 
Accounts payable
 
1,232

 
 
Accrued liabilities
 
2,246

 
 
Customer deposits
 
199

 
 
Deferred tax liability
 
241

 
 
Revolving credit facility
 
488

 
 
Accrued dilapidations
 
589

 
 
Total liabilities acquired
 
4,995

 
 
Total fair value of net assets acquired
 
 
 
10,722

Excess purchase price over fair value of net assets acquired (“goodwill”)
 
 
 
$
13,504


Under the acquisition method of accounting, the preliminary purchase price as shown in the table above is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess purchase price over fair value of net assets acquired was recorded as goodwill. The goodwill is included in the Marketing & Events International segment and the primary factor that contributed to a purchase price resulting in the recognition of goodwill relates to future growth opportunities when combined with our other businesses. The goodwill is deductible for tax purposes over a period of 15 years. The estimated values of current assets and liabilities were based upon their historical costs on the date of acquisition due to their short-term nature. Transaction costs associated with the acquisition of Blitz were $0.8 million and are included in corporate activities in Viad’s Condensed Consolidated Statements of Operations.
Identified intangible assets acquired in the Blitz acquisition totaled $8.7 million and consist of customer relationships, non-compete agreements and trade name. The weighted-average amortization period related to the intangible assets is approximately 6.9 years.
The results of operations of Blitz have been included in Viad’s condensed consolidated financial statements from the date of acquisition. During 2014, revenues of $10.1 million and operating income of $0.4 million related to Blitz have been included in Viad’s Condensed Consolidated Statements of Operations.

onPeak LLC
On October 7, 2014, the Company acquired onPeak LLC for a purchase price of $43.0 million in cash, subject to certain adjustments. Of the initial purchase price, $4.1 million was deposited at closing into escrow to secure post-closing purchase price adjustments, resolution of certain tax matters and other indemnity claims. onPeak LLC provides event accommodations services in North America to the live events industry.

The following table summarizes the preliminary recording of the fair values of the assets acquired and liabilities assumed as of the acquisition date. Due to the recent timing of the acquisition, we have not yet finalized our purchase price allocation. These amounts are subject to change within the measurement period as assessment of intangible assets and certain tax amounts are finalized.
(in thousands)
 
 
 
 
Purchase price paid as:
 
 
 
 
Cash
 
 
 
$
42,950

Cash acquired
 
 
 
(4,064
)
Purchase price, net of cash acquired
 
 
 
$
38,886

 
 
 
 
 
Fair value of net assets acquired:
 
 
 
 
Accounts receivable, net
 
$
4,008

 
 
Prepaid expenses
 
640

 
 
Property and equipment, net
 
2,450

 
 
Other non-current assets
 
309

 
 
Intangible assets
 
14,300

 
 
Total assets acquired
 
21,707

 
 
Accounts payable
 
738

 
 
Accrued liabilities
 
3,341

 
 
Customer deposits
 
4,225

 
 
Deferred tax liability
 
1,614

 
 
Other liabilities
 
309

 
 
Total liabilities acquired
 
10,227

 
 
Total fair value of net assets acquired
 
 
 
11,480

Excess purchase price over fair value of net assets acquired (“goodwill”)
 
 
 
$
27,406


Under the acquisition method of accounting, the purchase price as shown in the table above is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess purchase price over fair value of net assets acquired was recorded as goodwill. The goodwill is included in the Marketing & Events U.S. segment and the primary factor that contributed to a purchase price resulting in the recognition of goodwill relates to future growth opportunities when combined with our other businesses. Goodwill of $9.3 million is expected to be deductible for tax purposes over a period of 15 years. The estimated values of current assets and liabilities were based upon their historical costs on the date of acquisition due to their short-term nature. Transaction costs associated with the acquisition of onPeak were $0.5 million and are included in corporate activities in Viad’s Condensed Consolidated Statements of Operations.
Identified intangible assets acquired in the onPeak acquisition totaled $14.3 million and consist primarily of customer relationships and trade name. The weighted-average amortization period related to the definite lived intangible assets is 9.9 years.
The results of operations of onPeak have been included in Viad’s condensed consolidated financial statements from the date of acquisition. During 2014, revenues of $2.7 million and an operating loss of $0.7 million related to onPeak have been included in Viad’s Condensed Consolidated Statements of Operations.
Travel Planners, Inc.
On October 7, 2014, the Company acquired Travel Planners, Inc. for a purchase price of $33.7 million in cash less a working capital adjustment of $0.3 million, subject to certain adjustments. Of the purchase price, $8.8 million was deposited at closing into escrow to secure post-closing purchase price adjustments, resolution of certain tax matters and other indemnity claims. An additional estimated amount of $1.3 million would be payable to Travel Planners, Inc. upon election by the Company to treat the purchase as an asset acquisition for tax purposes. The Company assumes the acquisition will be treated as an asset acquisition for tax purposes, but has not yet finalized determination of the election. Travel Planners, Inc. provides event accommodations services in North America to the live events industry.

The following table summarizes the preliminary recording of the fair values of the assets acquired and liabilities assumed as of the acquisition date. Due to the recent timing of the acquisition, we have not yet finalized our purchase price allocation. These amounts are subject to change within the measurement period as assessment of intangible assets and certain tax amounts are finalized.
(in thousands)
 
 
 
 
Purchase price paid as:
 
 
 
 
Cash
 
 
 
$
33,674

Additional purchase price payable upon tax election
 
 
 
1,300

Working capital receivable
 
 
 
(279
)
Cash acquired
 
 
 
(4,204
)
Purchase price, net of cash acquired
 
 
 
$
30,491

 
 
 
 
 
Fair value of net assets acquired:
 
 
 
 
Accounts receivable, net
 
$
1,450

 
 
Prepaid expenses
 
120

 
 
Property and equipment, net
 
93

 
 
Intangible assets
 
15,000

 
 
Total assets acquired
 
16,663

 
 
Accounts payable
 
488

 
 
Accrued liabilities
 
1,557

 
 
Customer deposits
 
4,525

 
 
Other liabilities
 
128

 
 
Total liabilities acquired
 
6,698

 
 
Total fair value of net assets acquired
 
 
 
9,965

Excess purchase price over fair value of net assets acquired (“goodwill”)
 
 
 
$
20,526


Under the acquisition method of accounting, the purchase price as shown in the table above is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess purchase price over fair value of net assets acquired was recorded as goodwill. The goodwill is included in the Marketing & Events U.S. segment and the primary factor that contributed to a purchase price resulting in the recognition of goodwill relates to future growth opportunities when combined with our other businesses. The goodwill is deductible for tax purposes over a period of 15 years. The estimated values of current assets and liabilities were based upon their historical costs on the date of acquisition due to their short-term nature. Transaction costs associated with the acquisition of Travel Planners, Inc. were $0.5 million and are included in corporate activities in Viad’s Condensed Consolidated Statements of Operations.
Identified intangible assets acquired in the Travel Planners, Inc. acquisition totaled $15.0 million and consist primarily of customer relationships, favorable lease contracts and trade name. The weighted-average amortization period related to the definite lived intangible assets is 10.1 years.
The results of operations of Travel Planners, Inc. have been included in Viad’s condensed consolidated financial statements from the date of acquisition. During 2014, revenues of $3.4 million and operating income of $0.5 million related to Travel Planners, Inc. have been included in Viad’s Condensed Consolidated Statements of Operations.
N200
On November 24, 2014, the Company acquired N200 Limited and affiliates (collectively, “N200”) for €9.7 million (approximately $12.1 million) in cash, subject to certain adjustments, plus an earnout payment (the “Earnout”) of up to €1.0 million. The amount of the Earnout is based on N200’s achievement of established financial targets for fiscal 2015 (ending June 30). Such contingent payment, if any, will be paid during the third quarter of 2015. N200, which has offices in the United Kingdom and the Netherlands, is a leading event registration and data intelligence services provider for the live events industry in the United Kingdom and the Netherlands.

The following table summarizes the preliminary recording of the fair values of the assets acquired and liabilities assumed as of the acquisition date. Due to the recent timing of the acquisition, we have not yet finalized our purchase price allocation. These amounts are subject to change within the measurement period as assessment of intangible assets, contingent consideration, working capital and certain tax amounts are finalized.
(in thousands)
 
 
 
 
Purchase price paid as:
 
 
 
 
Cash
 
 
 
$
12,068

Contingent consideration
 
 
 
1,244

Cash acquired
 
 
 
(943
)
Purchase price, net of cash acquired
 
 
 
$
12,369

 
 
 
 
 
Fair value of net assets acquired:
 
 
 
 
Accounts receivable, net
 
$
1,747

 
 
Inventory
 
46

 
 
Prepaid expenses
 
115

 
 
Property and equipment, net
 
1,280

 
 
Intangible assets
 
3,595

 
 
Total assets acquired
 
6,783

 
 
Accounts payable
 
421

 
 
Accrued liabilities
 
990

 
 
Customer deposits
 
569

 
 
Deferred tax liability
 
891

 
 
Other liabilities
 
106

 
 
Total liabilities acquired
 
2,977

 
 
Total fair value of net assets acquired
 
 
 
3,806

Excess purchase price over fair value of net assets acquired (“goodwill”)
 
 
 
$
8,563


Under the acquisition method of accounting, the purchase price as shown in the table above is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess purchase price over fair value of net assets acquired was recorded as goodwill. The goodwill is included in the Marketing & Events International segment and the primary factor that contributed to a purchase price resulting in the recognition of goodwill relates to future growth opportunities when combined with our other businesses. The goodwill is deductible for tax purposes over a period of 15 years. The estimated values of current assets and liabilities were based upon their historical costs on the date of acquisition due to their short-term nature. Transaction costs associated with the acquisition of N200 were $1.0 million and are included in corporate activities in Viad’s Condensed Consolidated Statements of Operations.
Identified intangible assets acquired in the N200 acquisition totaled $3.6 million and consist primarily of customer relationships. The weighted-average amortization period related to the definite lived intangible assets is 7.6 years.
The results of operations of N200 have been included in Viad’s condensed consolidated financial statements from the date of acquisition. During 2014, revenues of $0.4 million and an operating loss of $0.2 million related to N200 have been included in Viad’s Condensed Consolidated Statements of Operations.

Resource Creative Limited
In February 2013, Viad acquired the assets of Resource Creative Limited (“RCL”) for $0.6 million in cash. RCL is a United Kingdom-based company specializing in providing creative graphic services to the exhibition, events and retail markets throughout the United Kingdom and continental Europe. The purchase price was subject to certain adjustments, plus a deferred payment of up to approximately £0.2 million, which was contingent upon RCL’s achievement of certain net revenue targets between the acquisition date and December 31, 2014. RCL exceeded the net revenue targets for the period ended December 31, 2014 and 2013 and, consequently, deferred payment installments in the amount of $0.1 million (£0.1 million) and $0.2 million (£0.1 million), respectively, were paid in January 2015 and March 2014, respectively.

Supplementary pro forma financial information

The following table summarizes the unaudited pro forma results of operations attributable to Viad, assuming that the acquisitions above had each been completed on January 1, 2013:
(in thousands, except per share data)
 
2014
 
2013
Revenue
 
$
1,109,629

 
$
1,015,275

Depreciation and amortization
 
38,452

 
38,981

Income from continuing operations
 
44,360

 
15,317

Net income attributable to Viad
 
55,557

 
17,510

Diluted net income per share
 
2.76

 
0.86

Basic net income per share
 
2.76

 
0.86


Pro forma net income for the year ended December 31, 2014 was adjusted to exclude transaction costs associated with the acquisitions of Blitz, West, onPeak, Travel Planners and N200, which totaled $3.0 million. These costs were included in the pro forma net income for the year ended December 31, 2013.
Inventories
Inventories
Inventories
The components of inventories as of December 31 were as follows:
(in thousands)
2014
 
2013
Raw materials
$
16,749

 
$
14,825

Work in process
15,652

 
13,168

Inventories
$
32,401

 
$
27,993

Other Current Assets
Other Current Assets
Other Current Assets
Other current assets as of December 31 were as follows:
(in thousands)
2014
 
2013
Prepaid vendor payments
$
2,689

 
$
2,008

Prepaid insurance
2,170

 
2,260

Prepaid software maintenance
1,934

 
1,946

Income tax receivable
1,869

 
2,035

Prepaid taxes
1,416

 
752

Prepaid other
4,427

 
4,563

Other
2,935

 
3,578

Other current assets
$
17,440

 
$
17,142

Property and Equipment
Property and Equipment
Property and Equipment
Property and equipment as of December 31 consisted of the following:
(in thousands)
2014
 
2013
Land and land interests
$
30,360

 
$
23,646

Buildings and leasehold improvements
138,104

 
139,889

Equipment and other
319,435

 
294,409

Gross property and equipment
487,899

 
457,944

Accumulated depreciation
(288,328
)
 
(267,614
)
Property and equipment, net
$
199,571

 
$
190,330


Included in the “Equipment and other” caption above are capitalized costs incurred in developing or obtaining internal use software. The net carrying amount of capitalized software was $17.0 million and $13.9 million as of December 31, 2014 and 2013, respectively.
Included in the “Land and land interests” caption above are certain leasehold interests in land within the Travel & Recreation Group for which the Company is considered to have perpetual use rights. The carrying amount of these leasehold interests was $9.1 million and $10.0 million at December 31, 2014 and 2013, respectively. These land interests are not subject to amortization.
Depreciation expense was $28.1 million, $27.4 million and $30.0 million for 2014, 2013 and 2012, respectively.
During 2014 and 2013, Viad recorded impairment charges of $0.9 million and $1.0 million at the Marketing & Events Group primarily related to the write off of certain internally developed software. These impairment losses are included in the consolidated statements of operations under the caption “Other impairment charges.”
Other Investments and Assets
Other Investments and Assets
Other Investments and Assets
As of December 31 other investments and assets consisted of the following:
(in thousands)
2014
 
2013
Cash surrender value of life insurance
$
20,866

 
$
19,690

Self-insured liability receivable
7,728

 
5,009

Workers’ compensation insurance security deposits
4,250

 
3,350

Other
7,830

 
6,977

Total other investments and assets
$
40,674

 
$
35,026

Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill were as follows:
(in thousands)
Marketing &
Events U.S.
 
Marketing &
Events
International
 
Travel &
Recreation
Group
 
Total
Balance at December 31, 2012
$
62,686

 
$
23,054

 
$
52,080

 
$
137,820

Goodwill impairment charge

 

 
(4,461
)
 
(4,461
)
Business acquisitions

 
158

 

 
158

Foreign currency translation adjustments

 
(601
)
 
(3,373
)
 
(3,974
)
Balance at December 31, 2013
62,686

 
22,611

 
44,246

 
129,543

Acquisition of Blitz

 
13,504

 

 
13,504

Acquisition of the West Glacier Properties

 

 
1,268

 
1,268

Acquisition of onPeak LLC
27,406

 

 

 
27,406

Acquisition of Travel Planners, Inc.
20,526

 

 

 
20,526

Acquisition of N200

 
8,563

 

 
8,563

Foreign currency translation adjustments

 
(2,457
)
 
(4,156
)
 
(6,613
)
Balance at December 31, 2014
$
110,618

 
$
42,221

 
$
41,358

 
$
194,197


The following table summarizes goodwill by reporting unit and segment as of December 31:
(in thousands)
2014
 
2013
Marketing & Events Group:
 
 
 
Marketing & Events U.S.
$
110,618

 
$
62,686

Marketing & Events International:
 
 
 
GES United Kingdom
34,396

 
14,049

GES Canada
7,825

 
8,562

Total Marketing & Events Group
152,839

 
85,297

Travel & Recreation Group:
 
 
 
Brewster
36,906

 
41,062

Alaska Denali Travel
3,184

 
3,184

Glacier Park
1,268

 

Total Travel & Recreation Group
41,358

 
44,246

Total Goodwill
$
194,197

 
$
129,543


Goodwill is reviewed for impairment annually in the fourth quarter, or more frequently if impairment indicators arise. Goodwill is required to be tested for impairment between the annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value.
For impairment testing purposes, the goodwill related to the Marketing & Events U.S. segment is assigned to and tested at the operating segment level. Furthermore, the goodwill related to the Marketing & Events International segment is assigned to and tested based on the segment’s geographical operations. For the Marketing & Events International segment the reporting units are GES United Kingdom and GES Canada. Brewster, Glacier Park and Alaska Denali Travel are considered reporting units for goodwill impairment testing purposes within the Travel & Recreation Group.
As a result of the Company’s most recent impairment analysis performed as of October 31, 2014, the excess of the estimated fair value over the carrying value (expressed as a percentage of the carrying amounts) under step one of the impairment test was 142 percent, 48 percent and 52 percent for each of the Marketing & Events Group reporting units in the United States, the United Kingdom and Canada, respectively. For the Brewster, Glacier Park and Alaska Denali Travel reporting units, the excess of the estimated fair value over the carrying value was 167 percent, 16 percent and 14 percent, respectively, as of the most recent impairment test.
As of December 31, 2014, Viad had cumulative goodwill impairment charges of $229.7 million since the adoption of the goodwill impairment testing provisions of ASC Topic 350.
A summary of other intangible assets as of December 31, 2014 is presented below:
(in thousands)
Gross Carrying
Value
 
Accumulated
Amortization
 
Net Carrying
Value
Amortized intangible assets:
 
 
 
 
 
Customer contracts and relationships
$
41,624

 
$
(2,961
)
 
$
38,663

Other
4,576

 
(732
)
 
3,844

Total amortized intangible assets
46,200

 
(3,693
)
 
42,507

Unamortized intangible assets:
 
 
 
 
 
Business licenses
460

 

 
460

Total
$
46,660

 
$
(3,693
)
 
$
42,967


A summary of other intangible assets as of December 31, 2013 is presented below:
(in thousands)
Gross Carrying
Value
 
Accumulated
Amortization
 
Net Carrying
Value
Amortized intangible assets:
 
 
 
 
 
Customer contracts and relationships
$
5,537

 
$
(2,521
)
 
$
3,016

Other
1,280

 
(276
)
 
1,004

Total amortized intangible assets
6,817

 
(2,797
)
 
4,020

Unamortized intangible assets:
 
 
 
 
 
Business licenses
460

 

 
460

Total
$
7,277

 
$
(2,797
)
 
$
4,480


Intangible asset amortization expense for 2014, 2013 and 2012 was $2.7 million, $1.3 million and $0.7 million, respectively. The weighted-average amortization period of customer contracts and relationships and other amortizable intangible assets is approximately 9.0 years and 3.8 years, respectively. Estimated amortization expense related to amortized intangible assets for future years is expected to be as follows:
(in thousands)
 
2015
$
7,585

2016
$
6,765

2017
$
5,915

2018
$
4,942

2019
$
4,546

Thereafter
$
12,754

Other Current Liabilities
Other Current LIabilities
Other Current Liabilities
As of December 31 other current liabilities consisted of the following:
(in thousands)
2014
 
2013
Continuing operations:
 
 
 
Self-insured liability
$
6,297

 
$
7,603

Accrued sales and use taxes
3,624

 
1,609

Accrued employee benefit costs
3,215

 
2,751

Accrued dividends
2,107

 
2,192

Accrued foreign income taxes
2,370

 
565

Accrued professional fees
1,228

 
1,832

Accrued restructuring
1,154

 
3,877

Other
6,861

 
7,741

Total continuing operations
26,856

 
28,170

Discontinued operations:
 
 
 
Self-insured liability
173

 
469

Environmental remediation liabilities
350

 
353

Other
408

 
177

Total discontinued operations
931

 
999

Total other current liabilities
$
27,787

 
$
29,169

Other Deferred Liabilities
Other Deferred Liabilities
Other Deferred Liabilities
As of December 31 other deferred items and liabilities consisted of the following:
(in thousands)
2014
 
2013
Continuing operations:
 
 
 
Self-insured liability
$
13,525

 
$
12,307

Self-insured excess liability
7,728

 
5,009

Accrued compensation
6,824

 
8,349

Foreign deferred tax liability
2,135

 
1,989

Accrued restructuring
555

 
1,919

Other
7,904

 
7,552

Total continuing operations
38,671

 
37,125

Discontinued operations:
 
 
 
Environmental remediation liabilities
4,395

 
4,666

Self-insured liability
4,327

 
4,489

Accrued income taxes
1,119

 
1,085

Other
1,250

 
1,254

Total discontinued operations
11,091

 
11,494

Total other deferred items and liabilities
$
49,762

 
$
48,619

Debt
Debt
Debt
Long-term debt as of December 31 was as follows:
(in thousands, except interest rates)
2014
 
2013
Revolving credit agreement, 2.4% (2014) and 2.2% (2013) weighted-average interest rate at December 31

$
139,500

 
$
10,000

Capital lease obligations, 6.0% (2014) and 6.9% (2013) weighted-average interest rate at December 31, due through 2018
1,520

 
1,668

Total debt
141,020

 
11,668

Current portion
(27,856
)
 
(10,903
)
Long-term debt and capital lease obligations
$
113,164

 
$
765



Effective December 22, 2014, Viad entered into a $300 million Amended and Restated Credit Agreement (the “Credit Agreement”). The Credit Agreement amends and replaces in its entirety the Company’s $180 million revolving credit facility under the Amended and Restated Credit Agreement dated as of May 18, 2011. The Credit Agreement provides for a senior credit facility in the aggregate amount of $300 million, which consists of a $175 million revolving credit facility (the “Revolving Credit Facility”) and a $125 million term loan (the “Term Loan”). Loans under the Credit Agreement have a maturity date of December 22, 2019, and proceeds from the loans made under the Credit Agreement were used to refinance certain outstanding debt of the Company and will be used for the Company’s general corporate purposes in the ordinary course of its business. Under the Credit Agreement, the Revolving Credit Facility and/or the Term Loan may be increased up to an additional $100 million under certain circumstances. If such circumstances are met, the Company may obtain the additional borrowings under the Revolving Credit Facility, the Term Loan, or a combination of the two facilities. The Revolving Credit Facility has a $40 million sublimit for letters of credit. Borrowings and letters of credit can be denominated in U.S. dollars, Euros, Canadian dollars or British pounds.

Viad’s lenders have a first perfected security interest in all of the personal property of Viad, GES and GES Event Intelligence Services, Inc., including 65 percent of the capital stock of top-tier foreign subsidiaries. Financial covenants include a fixed charge coverage ratio of not less than 1.75 to 1.00, with a step-up to 2.00 to 1.00 for the fiscal quarter ending June 30, 2016. Viad must maintain a leverage ratio of not greater than 3.00 to 1.00, with a step-down to 2.75 to 1.00 for the fiscal quarter ending March 31, 2016 and a step-down to 2.50 to 1.00 for the fiscal quarter ending March 31, 2017. As of December 31, 2014, the fixed charge coverage ratio was 2.61 to 1.00, and the leverage ratio was 1.73 to 1.00. The terms of the Credit Agreement allow Viad to pay dividends or purchase the Company’s common stock up to $20 million in the aggregate in any calendar year, with additional dividends, share repurchases or distributions of stock permitted if the Company’s leverage ratio is less than or equal to 2.00 to 1.00, and the Liquidity Amount (defined as cash in the U.S. and Canada plus available revolver borrowings on a pro forma basis) is not less than $100 million, and no default or unmatured default, as defined in the Credit Agreement, exists. Significant other covenants include limitations on investments, additional indebtedness, sales/leases of assets, acquisitions, consolidations or mergers and liens on property. As of December 31, 2014, Viad was in compliance with all covenants.
As of December 31, 2014, Viad’s total debt of $141.0 million consisted of outstanding borrowings under the Term Loan and Revolving Credit Facility of $125 million and $14.5 million, respectively, and capital lease obligations of $1.5 million. As of December 31, 2014, Viad had $159.4 million of capacity remaining under its Credit Facility reflecting outstanding letters of credit of $1.1 million and the outstanding balance under the Revolving Credit Facility of $14.5 million.
Borrowings under the Revolving Credit Facility (of which GES and GES Event Intelligence Services, Inc. are guarantors) are indexed to the prime rate or the London Interbank Offered Rate, plus appropriate spreads tied to Viad’s leverage ratio. Commitment fees and letters of credit fees are also tied to Viad’s leverage ratio. The fees on the unused portio