VIAD CORP, 10-Q filed on 11/6/2017
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2017
Oct. 27, 2017
Document And Entity Information [Abstract]
 
 
Entity Registrant Name
VIAD CORP 
 
Entity Central Index Key
0000884219 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 30, 2017 
 
Amendment Flag
false 
 
Document Fiscal Year Focus
2017 
 
Document Fiscal Period Focus
Q3 
 
Current Fiscal Year End Date
--12-31 
 
Trading Symbol
VVI 
 
Entity Filer Category
Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
20,411,480 
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Current assets
 
 
Cash and cash equivalents
$ 53,481 
$ 20,900 
Accounts receivable, net of allowances for doubtful accounts of $1,897 and $1,342, respectively
129,105 
104,648 
Inventories
39,753 
31,420 
Other current assets
23,973 
18,449 
Total current assets
246,312 
175,417 
Property and equipment, net
295,757 
279,858 
Other investments and assets
46,745 
44,297 
Deferred income taxes
34,391 
42,549 
Goodwill
263,919 
254,022 
Other intangible assets, net
65,672 
73,673 
Total Assets
952,796 
869,816 
Current liabilities
 
 
Accounts payable
88,510 
67,596 
Customer deposits
53,093 
42,723 
Accrued compensation
28,094 
29,913 
Other current liabilities
52,318 
30,390 
Current portion of debt and capital lease obligations
124,574 1
174,968 1
Total current liabilities
346,589 
345,590 
Long-term debt and capital lease obligations
60,627 
74,243 
Pension and postretirement benefits
26,826 
28,611 
Other deferred items and liabilities
50,260 
50,734 
Total liabilities
484,302 
499,178 
Commitments and contingencies
   
   
Viad Corp stockholders’ equity:
 
 
Common stock, $1.50 par value, 200,000,000 shares authorized, 24,934,981 shares issued and outstanding
37,402 
37,402 
Additional capital
573,660 
573,841 
Retained earnings
89,552 
16,291 
Unearned employee benefits and other
239 
172 
Accumulated other comprehensive income (loss):
 
 
Unrealized gain on investments
564 
421 
Cumulative foreign currency translation adjustments
(10,264)
(29,084)
Unrecognized net actuarial loss and prior service credit, net
(10,544)
(10,728)
Common stock in treasury, at cost, 4,519,023 and 4,613,520 shares, respectively
(226,145)
(230,960)
Total Viad Corp stockholders’ equity
454,464 
357,355 
Noncontrolling interest
14,030 
13,283 
Total stockholders’ equity
468,494 
370,638 
Total Liabilities and Stockholders’ Equity
$ 952,796 
$ 869,816 
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (Unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
Sep. 30, 2017
Dec. 31, 2016
Statement Of Financial Position [Abstract]
 
 
Allowance for doubtful accounts
$ 1,897 
$ 1,342 
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 
Common stock, shares outstanding
24,934,981 
24,934,981 
Treasury stock, shares
4,519,023 
4,613,520 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Revenue:
 
 
 
 
Exhibition and event services
$ 198,868 
$ 240,278 
$ 750,111 
$ 681,592 
Exhibits and environments
33,251 
44,785 
119,988 
123,871 
Pursuit services
106,980 
97,402 
159,581 
143,111 
Total revenue
339,099 
382,465 
1,029,680 
948,574 
Costs and expenses:
 
 
 
 
Costs of services
254,963 
278,764 
813,456 
743,032 
Costs of products sold
37,070 
44,784 
117,072 
118,891 
Business interruption gain
(1,091)
 
(2,231)
 
Corporate activities
4,474 
2,772 
10,092 
7,390 
Interest income
(74)
(44)
(174)
(138)
Interest expense
2,117 
1,489 
6,281 
4,109 
Restructuring charges
255 
1,697 
817 
3,664 
Impairment charges (recoveries)
(24,467)
120 
(29,098)
120 
Total costs and expenses
273,247 
329,582 
916,215 
877,068 
Income from continuing operations before income taxes
65,852 
52,883 
113,465 
71,506 
Income tax expense
20,010 
17,878 
32,929 
23,652 
Income from continuing operations
45,842 
35,005 
80,536 
47,854 
Loss from discontinued operations
(101)
(221)
(408)
(771)
Net income
45,741 
34,784 
80,128 
47,083 
Net income attributable to noncontrolling interest
(1,084)
(992)
(747)
(765)
Net income attributable to Viad
44,657 
33,792 
79,381 
46,318 
Diluted income per common share:
 
 
 
 
Continuing operations attributable to Viad common stockholders
$ 2.19 
$ 1.68 
$ 3.91 
$ 2.33 
Discontinued operations attributable to Viad common stockholders
 
$ (0.01)
$ (0.02)
$ (0.04)
Net income attributable to Viad common stockholders
$ 2.19 
$ 1.67 
$ 3.89 
$ 2.29 
Weighted-average outstanding and potentially dilutive common shares
20,436 
20,207 
20,382 
20,150 
Basic income per common share:
 
 
 
 
Continuing operations attributable to Viad common stockholders
$ 2.19 
$ 1.68 
$ 3.91 
$ 2.33 
Discontinued operations attributable to Viad common stockholders
 
$ (0.01)
$ (0.02)
$ (0.04)
Net income attributable to Viad common stockholders
$ 2.19 
$ 1.67 
$ 3.89 
$ 2.29 
Weighted-average outstanding common shares
20,166 
20,017 
20,130 
19,972 
Dividends declared per common share
$ 0.10 
$ 0.10 
$ 0.30 
$ 0.30 
Amounts attributable to Viad common stockholders
 
 
 
 
Income from continuing operations
44,758 
34,013 
79,789 
47,089 
Loss from discontinued operations
(101)
(221)
(408)
(771)
Net income attributable to Viad
$ 44,657 
$ 33,792 
$ 79,381 
$ 46,318 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Sep. 30, 2017
Sep. 30, 2016
Statement Of Income And Comprehensive Income [Abstract]
 
 
 
 
Net income
$ 45,741 
$ 34,784 
$ 80,128 
$ 47,083 
Other comprehensive income (loss):
 
 
 
 
Unrealized gains on investments, net of tax
48 1
42 1
143 1
62 1
Unrealized foreign currency translation adjustments, net of tax
9,115 1
(3,849)1
18,820 1
723 1
Change in net actuarial gain, net of tax
103 1
93 1
385 1
334 1
Change in prior service cost, net of tax
(67)1
(78)1
(201)1
(234)1
Comprehensive income
54,940 
30,992 
99,275 
47,968 
Comprehensive income attributable to noncontrolling interest
(1,084)
(992)
(747)
(765)
Comprehensive income attributable to Viad
$ 53,856 
$ 30,000 
$ 98,528 
$ 47,203 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2017
Sep. 30, 2016
Cash flows from operating activities
 
 
Net income
$ 80,128 
$ 47,083 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
42,499 
31,206 
Deferred income taxes
318 
(3,549)
Loss from discontinued operations
408 
771 
Restructuring charges
817 
3,664 
Impairment charges (recoveries)
(29,098)
120 
Gains on dispositions of property and other assets
465 
126 
Share-based compensation expense
9,484 
4,709 
Excess tax benefit from share-based compensation arrangements
 
(60)
Other non-cash items, net
3,603 
4,644 
Change in operating assets and liabilities (excluding the impact of acquisitions):
 
 
Receivables
(25,966)
(41,510)
Inventories
(6,839)
(12,903)
Accounts payable
18,998 
38,522 
Restructuring liabilities
(1,748)
(2,518)
Accrued compensation
(7,455)
(620)
Customer deposits
9,076 
26,954 
Income taxes payable
16,058 
5,280 
Other assets and liabilities, net
3,895 
13,503 
Net cash provided by operating activities
114,643 
115,422 
Cash flows from investing activities
 
 
Capital expenditures
(39,493)
(32,582)
Proceeds from insurance
31,570 
 
Cash paid for acquired businesses, net
(1,661)
(145,735)
Proceeds from dispositions of property and other assets
734 
774 
Net cash used in investing activities
(8,850)
(177,543)
Cash flows from financing activities
 
 
Proceeds from borrowings
60,574 
153,000 
Payments on debt and capital lease obligations
(128,808)
(86,989)
Dividends paid on common stock
(6,119)
(6,079)
Debt issuance costs
(5)
(340)
Common stock purchased for treasury
(1,272)
(679)
Excess tax benefit from share-based compensation arrangements
 
60 
Net cash provided by (used in) financing activities
(75,630)
58,973 
Effect of exchange rate changes on cash and cash equivalents
2,418 
(702)
Net change in cash and cash equivalents
32,581 
(3,850)
Cash and cash equivalents, beginning of year
20,900 
56,531 
Cash and cash equivalents, end of period
$ 53,481 
$ 52,681 
Basis of Presentation and Principles of Consolidation
Basis of Presentation and Principles of Consolidation

Note 1. Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements of Viad Corp (“Viad” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these financial statements do not include all of the information required by GAAP or Securities and Exchange Commission (“SEC”) rules and regulations for complete financial statements. In the opinion of management, these financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with Viad’s Annual Report on Form 10-K for the year ended December 31, 2016, filed with the SEC on March 6, 2017.

The condensed consolidated financial statements include the accounts of Viad and its subsidiaries. All significant intercompany account balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Estimates and assumptions are used in accounting for, among other things, the fair value of Viad’s reporting units used to perform annual impairment testing of recorded goodwill; allowances for uncollectible accounts receivable; provisions for income taxes, including uncertain tax positions; valuation allowances related to deferred tax assets; liabilities for losses related to self-insured liability claims; liabilities for losses related to environmental remediation obligations; sublease income associated with restructuring liabilities; assumptions used to measure pension and postretirement benefit costs and obligations; assumptions used to determine share-based compensation costs under the fair value method; and the allocation of purchase price of acquired businesses. Actual results could differ from these and other estimates.

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.

On December 29, 2016, the Mount Royal Hotel was damaged by a fire and closed. During the fourth quarter of 2016, the Company 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 Viad’s property and business interruption insurance. During July 2017, Viad resolved its property and business interruption insurance claims for a total of $36.3 million, of which $9.0 million was received during the first six months of 2017 with the remainder received during the third quarter. The Company 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, $2.2 million was recorded as a business interruption gain for the recovery of lost profits, $1.1 million was recorded as contra-expense to offset non-capitalizable costs incurred by the Company, and the remaining $1.5 million was recorded as deferred revenue, which will be recognized over the periods when the business interruption losses are actually incurred.

Nature of Business

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

GES

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. 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 offers guests distinctive and world renowned experiences through its collection of unique hotels, lodges, recreational attractions, and transportation services. Pursuit is composed of four lines of business: (i) Hospitality; (ii) Attractions; (iii) Transportation, and (iv) Travel Planning. These four lines of business work together, driving economies of scope and meaningful scale in and around the iconic destinations of Banff, Jasper, and Waterton Lakes National Parks and Vancouver in Canada, and Glacier, Denali, and Kenai Fjords National Parks in the United States. Pursuit is composed of Brewster Travel Canada, the Alaska Collection, Glacier Park, Inc., and FlyOver Canada.

 

Impact of Recent Accounting Pronouncements

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

 

Standard

 

Description

 

Date of adoption

 

Effect on the financial statements

Standards Not Yet Adopted

ASU 2014-09, Revenue from Contracts with Customers (Topic 606)

 

The standard establishes a new recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company may adopt either retrospectively to each prior period presented with the option to elect certain practical expedients or with the cumulative effect recognized at the date of initial application and providing certain disclosures.

 

Subsequent to the issuance of ASU 2014-09, the FASB issued several amendments in 2016 which do not change the core principle of the guidance stated in ASU 2014-09. Rather, they are intended to clarify and improve understanding of certain topics included within the revenue standard.

 

January 1, 2018

 

The Company is currently evaluating the impact of the adoption of this new guidance on its financial position or results of operations including analyzing its current portfolio of customer contracts. The Company has assigned internal resources in addition to the engagement of a third-party service provider to assist in the evaluation of the impact on its accounting policies, processes, and system requirements. Based on the Company’s preliminary assessment, the adoption of this standard will not have a material impact on Viad’s consolidated financial statements. Although significant additional disclosures will be required, the Company expects the immaterial impact to primarily relate to the deferral of certain commissions which were previously expensed as incurred but will generally be capitalized and amortized over the period of contract performance, and the deferral of certain costs incurred in connection with trade shows which were previously expensed as incurred but will generally be capitalized and expensed upon the completion of the show. The Company will adopt 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. The Company is continuing its assessment, which may identify other impacts.

 

ASU 2016-02, Leases (Topic 842)

 

The amendment requires lessees to recognize on their balance sheet a right-of-use asset and a lease liability for leases with lease terms greater than one year. The amendment requires additional disclosures about leasing arrangements, and requires a modified retrospective approach to adoption. Early adoption is permitted.

 

January 1, 2019

 

The Company is currently evaluating the potential impact of the adoption of this new guidance on its financial position or results of operations including analyzing its existing operating leases. Based on the Company’s current assessment, the adoption of this standard will have a material impact on Viad’s consolidated balance sheets, but the income statement is not expected to be materially impacted. The Company expects the most significant impact will relate to facility and equipment leases and embedded lease arrangements which are currently recorded as operating leases. The Company is continuing its assessment, which may identify other impacts. The Company will adopt the standard on January 1, 2019.

 

ASU 2016-15, Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments

 

 

The amendment provides guidance on eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. Early adoption is permitted.

 

January 1, 2018

 

The adoption of this new guidance is not expected to have a significant effect on Viad’s financial position or results of operations.

ASU 2016-16, Income Taxes (Topic 740) - Intra-Entity Transfers of Assets Other Than Inventory

 

The amendment eliminates an exception in ASC 740 which prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. The amendment requires an entity to recognize the income tax consequences of intra-entity transfers of assets other than inventory at the time that the transfer occurs.

 

January 1, 2018

 

The adoption of this new guidance is not expected to have a significant effect on Viad’s financial position or results of operations.

 

Standard

 

Description

 

Date of adoption

 

Effect on the financial statements

Standards Not Yet Adopted (Continued)

ASU 2017-01, Business Combination (Topic 805) - Clarifying the Definition of a Business

 

The amendment provides guidance on evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses.

 

January 1, 2018

 

The adoption of this new guidance is not expected to have a significant effect on Viad’s consolidated financial statements.

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

 

The amendment eliminates the requirement to estimate the implied fair value of goodwill if it was determined that the carrying amount of a reporting unit exceeded its fair value. Goodwill impairment will now be recognized by the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The amendment should be applied prospectively and is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.

 

January 1, 2020

 

The adoption of this new guidance is not expected to have a significant effect on Viad’s consolidated financial statements and the Company expects the adoption to reduce the complexity surrounding the analysis of goodwill impairment.

ASU 2017-07, Compensation - Retirement Benefits (Topic 715) - Improving the Presentation of Net Periodic Pension

Cost and Net Periodic Postretirement Benefit Cost

 

The amendment requires an employer to disaggregate the service cost components from the other components of net benefit cost. The service cost components are required to be presented in operating income and the other components of net benefit cost are required to be presented outside of operating income.

 

January 1, 2018

 

The Company currently presents all components of net periodic pension and postretirement benefit costs in cost of services in the consolidated statements of operations. The adoption of this new guidance is not expected to have a significant effect on Viad’s consolidated financial statements.

ASU 2017-09, Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting

 

The amendment provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718.

 

January 1, 2018

 

The Company grants share-based awards but rarely has modifications to the awards. The adoption of this new guidance is not expected to have a significant effect on Viad’s consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Standards Recently Adopted

ASU 2015-11, Inventory (Topic 330) - Simplifying the Measurement of Inventory

 

The amendment applies to inventory measures using first-in, first-out or average cost and requires entities to measure inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the normal course of business, minus the cost of completion, disposal and transportation. Replacement cost and net realizable value less a normal profit margin will no longer be considered.

 

January 1, 2017

 

The adoption of this new guidance did not have a significant effect on Viad’s consolidated financial statements.

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.

 

January 1, 2017

 

The adoption of this new guidance resulted in a decrease of 6% to the effective tax rate during the first quarter of 2017 as compared to 2016, and resulted in a decrease of 1% to the effective tax rate during the nine months ended September 30, 2017 as compared to 2016.

 

Share-Based Compensation
Share-Based Compensation

Note 2. Share-Based Compensation

The following table summarizes share-based compensation expense:

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

(in thousands)

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Performance unit incentive plan (“PUP”)

 

$

3,941

 

 

$

1,601

 

 

$

7,184

 

 

$

2,952

 

Restricted stock

 

 

672

 

 

 

523

 

 

 

2,069

 

 

 

1,597

 

Restricted stock units

 

 

124

 

 

 

86

 

 

 

231

 

 

 

160

 

Share-based compensation before income tax benefit

 

 

4,737

 

 

 

2,210

 

 

 

9,484

 

 

 

4,709

 

Income tax benefit

 

 

(1,752

)

 

 

(812

)

 

 

(3,524

)

 

 

(1,750

)

Share-based compensation, net of income tax benefit

 

$

2,985

 

 

$

1,398

 

 

$

5,960

 

 

$

2,959

 

Viad did not record any share-based compensation expense through restructuring expense during the three months ended September 30, 2017 or 2016, and recorded zero and $0.2 million for the nine months ended September 30, 2017 and 2016, respectively.

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

 

 

Shares

 

 

Weighted-Average

Grant Date

Fair Value

 

 

Shares

 

 

Weighted-Average

Grant Date

Fair Value

 

Balance at December 31, 2016

 

 

255,505

 

 

$

26.11

 

 

 

267,051

 

 

$

25.96

 

 

 

15,982

 

 

$

25.58

 

Granted

 

 

73,557

 

 

$

47.44

 

 

 

64,648

 

 

$

46.64

 

 

 

2,950

 

 

$

47.45

 

Vested

 

 

(76,082

)

 

$

23.66

 

 

 

(79,104

)

 

$

24.01

 

 

 

(6,182

)

 

$

25.05

 

Forfeited

 

 

(5,911

)

 

$

30.64

 

 

 

(9,807

)

 

$

33.84

 

 

 

 

 

$

 

Balance at September 30, 2017

 

 

247,069

 

 

$

33.10

 

 

 

242,788

 

 

$

31.79

 

 

 

12,750

 

 

$

30.90

 

Viad Corp Omnibus Incentive Plan

The 2017 Viad Corp Omnibus Incentive Plan (the “2017 Plan”) was approved by Viad stockholders and was effective May 18, 2017. The 2017 Plan replaced the Company’s 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, Viad registered 1,750,000 shares of common stock issuable under the 2017 Plan. As of September 30, 2017, there were 1,746,927 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 Viad common stock (or a combination of both). Previously, payouts could only be made in cash. The vesting of shares is based upon achievement of certain performance-based criteria. The performance period of the shares is three years.

During the nine months ended September 30, 2017, Viad granted $3.5 million of PUP awards of which $1.4 million are payable in shares. As of September 30, 2017 and December 31, 2016, Viad had recorded liabilities of $10.3 million and $7.6 million, respectively, related to PUP awards. In March 2017, the PUP awards granted in 2014 vested and cash payouts of $3.7 million were distributed. In March 2016, the PUP awards granted in 2013 vested and cash payouts of $0.2 million were distributed.

Restricted Stock

As of September 30, 2017, the unamortized cost of all outstanding restricted 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 the nine months ended September 30, 2017 and 2016, the Company repurchased 26,916 shares for $1.3 million and 24,432 shares for $0.7 million, respectively, related to tax withholding requirements on vested share-based awards.

Restricted Stock Units

As of both September 30, 2017 and December 31, 2016, Viad had aggregate liabilities recorded of $0.4 million related to restricted stock units. In February 2017, portions of the 2012 and 2014 restricted stock units vested and cash payouts of $0.3 million were distributed. In February 2016, portions of the 2011, 2012, and 2013 restricted stock units vested and cash payouts of $0.2 million were distributed.

Stock Options

During the three and nine months ended September 30, 2017, there was no stock option activity. As of both September 30, 2017 and December 31, 2016, there were 63,773 stock options outstanding and exercisable with a weighted-average exercise price of $16.62. As of September 30, 2017, there were no unrecognized costs related to non-vested stock option awards.

Acquisition of Businesses
Acquisition of Businesses

Note 3. Acquisition of Businesses

FlyOver Canada

On December 29, 2016, the Company acquired the assets and operations of FlyOver Canada, a recreational attraction that provides a virtual flight ride experience with a combination of motion seating, 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, subject to certain adjustments.

The following table summarizes the allocation of the aggregate purchase price paid and the amounts of assets acquired and liabilities assumed based on the estimated fair value as of the acquisition date. The allocation of the purchase price was completed as of March 31, 2017. 

 

(in thousands)

 

 

 

 

 

 

 

 

Purchase price paid as:

 

 

 

 

 

 

 

 

Cash

 

 

 

 

 

$

50,920

 

Cash acquired

 

 

 

 

 

 

(6

)

Purchase price, net of cash acquired

 

 

 

 

 

 

50,914

 

 

 

 

 

 

 

 

 

 

Fair value of net assets acquired:

 

 

 

 

 

 

 

 

Inventories

 

$

11

 

 

 

 

 

Prepaid expenses

 

 

37

 

 

 

 

 

Property and equipment

 

 

10,867

 

 

 

 

 

Intangible assets

 

 

6,028

 

 

 

 

 

Total assets acquired

 

 

16,943

 

 

 

 

 

Accrued liabilities

 

 

118

 

 

 

 

 

Total liabilities assumed

 

 

118

 

 

 

 

 

Total fair value of net assets acquired

 

 

 

 

 

 

16,825

 

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

 

 

 

 

 

$

34,089

 

Under the acquisition method of accounting, the purchase price as shown in the table above is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess purchase price over the fair value of net assets acquired was recorded as goodwill. Goodwill of FlyOver Canada is included in the Pursuit business group and is a separate reporting unit. The primary factor that contributed to the purchase price resulting in the recognition of goodwill relates to future growth opportunities and the expansion of the FlyOver concept. Goodwill is expected to be deductible for tax purposes pursuant to Canadian tax regulations. The estimated values of current assets and liabilities were based upon their historical costs on the date of acquisition due to their short-term nature. Transaction costs associated with the acquisition of FlyOver Canada were $0.1 million in 2017 and $0.5 million in 2016 and are included in cost of services in Viad’s condensed consolidated statements of operations.

Identified intangible assets acquired in the FlyOver Canada acquisition totaled $6.0 million and consisted of trade names of $3.7 million, customer relationships of $1.6 million, and non-compete agreements of $0.7 million. The weighted-average amortization period related to the intangible assets is 9.4 years.

The results of operations of FlyOver Canada have been included in Viad’s condensed consolidated financial statements from the date of acquisition. During the three and nine months ended September 30, 2017, revenue related to FlyOver Canada was $4.2 million and $8.0 million, respectively, and operating income was $2.2 million and $2.5 million, respectively.

Other Acquisitions

In March 2017, the Company completed the acquisition of the Poken event engagement technology for total cash consideration of $1.7 million, subject to certain adjustments. These assets have been included in Viad’s condensed consolidated financial statements from the date of acquisition.

Supplementary pro forma financial information

The following table summarizes the unaudited pro forma results of operations attributable to Viad, assuming the 2016 acquisitions of CATC Alaska Tourism Corporation (“CATC”) (acquired March 2016), the business of ON Event Services, LLC (“ON Services”) (acquired August 2016), and FlyOver Canada (acquired December 2016) had been completed on January 1, 2016:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

(in thousands, except per share data)

 

September 30, 2016

 

 

September 30, 2016

 

Revenue

 

$

389,877

 

 

$

991,818

 

Depreciation and amortization

 

$

14,427

 

 

$

39,565

 

Income from continuing operations

 

$

35,047

 

 

$

47,734

 

Net income attributable to Viad

 

$

33,834

 

 

$

46,198

 

Diluted income per share

 

$

1.67

 

 

$

2.28

 

Basic income per share

 

$

1.67

 

 

$

2.28

 

  

 

Inventories
Inventories

Note 4. Inventories

The components of inventories consisted of the following:

 

 

 

September 30,

 

 

December 31,

 

(in thousands)

 

2017

 

 

2016

 

Raw materials

 

$

18,455

 

 

$

16,846

 

Work in process

 

 

21,298

 

 

 

14,574

 

Inventories

 

$

39,753

 

 

$

31,420

 

 

Other Current Assets
Other Current Assets

Note 5. Other Current Assets

Other current assets consisted of the following:

 

 

 

September 30,

 

 

December 31,

 

(in thousands)

 

2017

 

 

2016

 

Prepaid vendor payments

 

$

6,407

 

 

$

3,633

 

Income tax receivable

 

 

4,282

 

 

 

3,614

 

Prepaid software maintenance

 

 

3,435

 

 

 

2,804

 

Prepaid insurance

 

 

3,030

 

 

 

2,479

 

Prepaid taxes

 

 

1,038

 

 

 

850

 

Prepaid rent

 

 

769

 

 

 

327

 

Prepaid other

 

 

3,273

 

 

 

731

 

Other

 

 

1,739

 

 

 

4,011

 

Other current assets

 

$

23,973

 

 

$

18,449

 

 

Property and Equipment
Property and Equipment

Note 6. Property and Equipment

Property and equipment consisted of the following:

 

 

 

September 30,

 

 

December 31,

 

(in thousands)

 

2017

 

 

2016

 

Land and land interests

 

$

32,599

 

 

$

31,670

 

Buildings and leasehold improvements

 

 

214,844

 

 

 

185,987

 

Equipment and other

 

 

347,461

 

 

 

326,868

 

Gross property and equipment

 

 

594,904

 

 

 

544,525

 

Accumulated depreciation

 

 

(299,147

)

 

 

(264,667

)

Property and equipment, net

 

$

295,757

 

 

$

279,858

 

 

Depreciation expense was $12.5 million and $10.0 million for the three months ended September 30, 2017 and 2016, respectively, and $32.9 million and $25.1 million for the nine months ended September 30, 2017 and 2016, respectively.

Non-cash increases to property and equipment related to assets acquired under capital leases were $1.1 million and $1.0 million for the nine months ended September 30, 2017 and 2016, respectively. Non-cash increases to property and equipment purchases in accounts payable and accrued liabilities were $0.8 million and $5.6 million for the nine months ended September 30, 2017 and 2016, respectively.

Other Investments and Assets
Other Investments and Assets

Note 7. Other Investments and Assets

Other investments and assets consisted of the following:

 

 

 

September 30,

 

 

December 31,

 

(in thousands)

 

2017

 

 

2016

 

Cash surrender value of life insurance

 

$

23,167

 

 

$

23,197

 

Self-insured liability receivable

 

 

10,463

 

 

 

10,463

 

Workers’ compensation insurance security deposits

 

 

3,550

 

 

 

4,050

 

Other mutual funds

 

 

2,560

 

 

 

2,062

 

Other

 

 

7,005

 

 

 

4,525

 

Other investments and assets

 

$

46,745

 

 

$

44,297

 

 

Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets

Note 8. Goodwill and Other Intangible Assets

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

 

(in thousands)

 

GES U.S.

 

 

GES International

 

 

Pursuit

 

 

Total

 

Balance at December 31, 2016

 

$

148,277

 

 

$

34,460

 

 

$

71,285

 

 

$

254,022

 

Business acquisitions

 

 

 

 

 

1,060

 

 

 

 

 

 

1,060

 

Foreign currency translation adjustments

 

 

 

 

 

3,084

 

 

 

5,753

 

 

 

8,837

 

Balance at September 30, 2017

 

$

148,277

 

 

$

38,604

 

 

$

77,038

 

 

$

263,919

 

Other intangible assets consisted of the following:

 

 

 

September 30, 2017

 

 

December 31, 2016

 

(in thousands)

 

Gross Carrying

Value

 

 

Accumulated

Amortization

 

 

Net Carrying Value

 

 

Gross Carrying

Value

 

 

Accumulated

Amortization

 

 

Net Carrying Value

 

Amortized intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer contracts and relationships

 

$

68,739

 

 

$

(21,505

)

 

$

47,234

 

 

$

67,762

 

 

$

(14,345

)

 

$

53,417

 

Operating contracts and licenses

 

 

10,038

 

 

 

(1,083

)

 

 

8,955

 

 

 

9,315

 

 

 

(652

)

 

 

8,663

 

Tradenames

 

 

8,665

 

 

 

(2,613

)

 

 

6,052

 

 

 

8,324

 

 

 

(1,440

)

 

 

6,884

 

Non-compete agreements

 

 

5,358

 

 

 

(2,682

)

 

 

2,676

 

 

 

5,190

 

 

 

(1,369

)

 

 

3,821

 

Other

 

 

896

 

 

 

(601

)

 

 

295

 

 

 

886

 

 

 

(458

)

 

 

428

 

Total amortized intangible assets

 

 

93,696

 

 

 

(28,484

)

 

 

65,212

 

 

 

91,477

 

 

 

(18,264

)

 

 

73,213

 

Unamortized intangible assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business licenses

 

 

460

 

 

 

 

 

 

460

 

 

 

460

 

 

 

 

 

 

460

 

Other intangible assets

 

$

94,156

 

 

$

(28,484

)

 

$

65,672

 

 

$

91,937

 

 

$

(18,264

)

 

$

73,673

 

Intangible asset amortization expense was $3.3 million and $2.7 million for the three months ended September 30, 2017 and 2016, respectively, and $9.6 million and $6.1 million for the nine months ended September 30, 2017 and 2016, respectively. The weighted-average amortization period of customer contracts and relationships is approximately 8.8 years, operating contracts and licenses is approximately 26.5 years, tradenames is approximately 7.2 years, non-compete agreements is approximately 2.5 years, and other amortizable intangible assets is approximately 2.6 years. The estimated future amortization expense related to amortized intangible assets held at September 30, 2017 is as follows:

 

(in thousands)

 

 

 

 

Year ending December 31,

 

 

 

 

Remainder of 2017

 

$

2,812

 

2018

 

 

11,014

 

2019

 

 

9,946

 

2020

 

 

8,446

 

2021

 

 

7,450

 

Thereafter

 

 

25,544

 

Total

 

$

65,212

 

 

Other Current Liabilities
Other Current Liabilities

Note 9. Other Current Liabilities

Other current liabilities consisted of the following:

 

 

 

September 30,

 

 

December 31,

 

(in thousands)

 

2017

 

 

2016

 

Continuing operations:

 

 

 

 

 

 

 

 

Accrued income tax payable

 

$

16,673

 

 

$

758

 

Accrued employee benefit costs

 

 

5,935

 

 

 

2,624

 

Self-insured liability accrual

 

 

5,690

 

 

 

5,941

 

Commissions payable

 

 

3,777

 

 

 

639

 

Accrued sales and use taxes

 

 

2,623

 

 

 

4,279

 

Accrued dividends

 

 

2,116

 

 

 

2,119

 

Current portion of pension liability

 

 

1,793

 

 

 

1,963

 

Deferred rent

 

 

1,656

 

 

 

1,535

 

Accrued rebates

 

 

1,061

 

 

 

1,078

 

Accrued professional fees

 

 

924

 

 

 

794

 

Accrued restructuring

 

 

750

 

 

 

1,924

 

Other taxes

 

 

3,315

 

 

 

4,210

 

Other

 

 

4,909

 

 

 

1,774

 

Total continuing operations

 

 

51,222

 

 

 

29,638

 

Discontinued operations:

 

 

 

 

 

 

 

 

Environmental remediation liabilities

 

 

661

 

 

 

492

 

Self-insured liability accrual

 

 

332

 

 

 

162

 

Other

 

 

103

 

 

 

98

 

Total discontinued operations

 

 

1,096

 

 

 

752

 

Total other current liabilities

 

$

52,318

 

 

$

30,390

 

 

Other Deferred Items and Liabilities
Other Deferred Items and Liabilities

Note 10. Other Deferred Items and Liabilities

Other deferred items and liabilities consisted of the following:

 

 

 

September 30,

 

 

December 31,

 

(in thousands)

 

2017

 

 

2016

 

Continuing operations:

 

 

 

 

 

 

 

 

Self-insured liability

 

$

14,644

 

 

$

12,981

 

Self-insured excess liability

 

 

10,463

 

 

 

10,463

 

Accrued compensation

 

 

9,402

 

 

 

8,514

 

Deferred rent

 

 

4,076

 

 

 

5,271

 

Foreign deferred tax liability

 

 

2,264

 

 

 

2,264

 

Accrued restructuring

 

 

1,903

 

 

 

1,858

 

Other

 

 

2,655

 

 

 

1,300

 

Total continuing operations

 

 

45,407

 

 

 

42,651

 

Discontinued operations:

 

 

 

 

 

 

 

 

Self-insured liability

 

 

3,011

 

 

 

3,748

 

Environmental remediation liabilities

 

 

1,716

 

 

 

3,091

 

Accrued income taxes

 

 

 

 

 

1,045

 

Other

 

 

126

 

 

 

199

 

Total discontinued operations

 

 

4,853

 

 

 

8,083

 

Total other deferred items and liabilities

 

$

50,260

 

 

$

50,734

 

 

Debt and Capital Lease Obligations
Debt and Capital Lease Obligations

Note 11. Debt and Capital Lease Obligations

The components of long-term debt and capital lease obligations consisted of the following:

 

 

 

September 30,

 

 

December 31,

 

(in thousands, except interest rates)

 

2017

 

 

2016

 

Revolving credit facility and term loan 3.3% and 2.6% weighted-average interest rate at

   September 30, 2017 and December 31, 2016, respectively, due through 2019 (1)

 

$

184,688

 

 

$

212,750

 

Brewster Inc. revolving credit facility 2.7% weighted-average interest rate at

   December 31, 2016 (1)

 

 

 

 

 

36,456

 

Less unamortized debt issuance costs

 

 

(1,071

)

 

 

(1,464

)

Total debt

 

 

183,617

 

 

 

247,742

 

Capital lease obligations 4.2% and 4.9% weighted-average interest rate at September 30,

   2017 and December 31, 2016, respectively, due through 2021

 

 

1,584

 

 

 

1,469

 

Total debt and capital lease obligations

 

 

185,201

 

 

 

249,211

 

Current portion (2)

 

 

(124,574

)

 

 

(174,968

)

Long-term debt and capital lease obligations

 

$

60,627

 

 

$

74,243

 

(1)

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.

(2)

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

Effective December 22, 2014, Viad entered into a $300 million Amended and Restated Credit Agreement (the “Credit Agreement”). The Credit Agreement provides for a senior credit facility in the aggregate amount of $300 million, which consists of a $175 million revolving credit facility (the “Revolving Credit Facility”) and a $125 million term loan (the “Term Loan”). Loans under the Credit Agreement have a maturity date of December 22, 2019. Proceeds from the loans made under the Credit Agreement were used to refinance certain outstanding debt of the Company and will be used for the Company’s general corporate purposes in the ordinary course of its business. Under the Credit Agreement, the Revolving Credit Facility and/or the Term Loan may be increased up to an additional $100 million under certain circumstances. If such circumstances are met, the Company may obtain the additional borrowings under the Revolving Credit Facility, the Term Loan, or a combination of the two. The Revolving Credit Facility has a $40 million sublimit for letters of credit. Borrowings and letters of credit can be denominated in U.S. dollars, Euros, Canadian dollars, or British pounds. Viad’s lenders under the Credit Agreement have a first perfected security interest in all of the personal property of Viad, GES, GES Event Intelligence Services, Inc., CATC, and ON Services including 65 percent of the capital stock of top-tier foreign subsidiaries.

Effective February 24, 2016, Viad executed an amendment (the “Credit Agreement Amendment”) to the Credit Agreement. The Credit Agreement Amendment modified the terms of the financial covenants and the negative covenants related to acquisitions, restricted payments, and indebtedness. The overall maximum leverage ratio and minimum fixed charge coverage ratio are 3.50 to 1.00 and 1.75 to 1.00, respectively, and will remain at those levels for the entire remaining term of the Credit Agreement. Acquisitions in substantially the same or related lines of business are permitted under the Credit Agreement Amendment, as long as the pro forma leverage ratio is less than or equal to 3.00 to 1.00. Viad can make dividends, distributions, and repurchases of its common stock up to $20 million per calendar year. Stock dividends, distributions, and repurchases above the $20 million limit are not subject to a liquidity covenant, and are permitted as long as the Company’s pro forma leverage ratio is less than or equal to 2.50 to 1.00 and there is no default or unmatured default, as defined in the Credit Agreement. Unsecured debt is allowed as long as the Company’s pro forma leverage ratio is less than or equal to 3.00 to 1.00. Significant other covenants under the Credit Agreement that remain unchanged by the Credit Agreement Amendment include limitations on investments, sales/leases of assets, consolidations or mergers, and liens on property. As of September 30, 2017, the fixed charge coverage ratio was 3.18 to 1.00, the leverage ratio was 1.26 to 1.00, and Viad was in compliance with all covenants under the Credit Agreement.

Effective December 28, 2016, Brewster Inc., part of Pursuit, entered into a credit agreement (the “Brewster Credit Agreement”) with a $38 million revolving credit facility (the “Brewster Revolving Credit Facility”). The Brewster Credit Agreement was used in connection with the Company’s acquisition of FlyOver Canada and has a maturity date of December 28, 2017. The Company intends to amend and extend the Brewster Revolving Credit Facility for one year. Additional loan proceeds will be used for potential future acquisitions in Canada and other general corporate purposes of Brewster Inc. Brewster Inc.’s lender has a first perfected security interest in all of the personal property of Brewster Inc. under the Brewster Revolving Credit Facility and a guaranty from Brewster Travel Canada Inc., the immediate parent of Brewster Inc., (secured by its present and future personal property), Viad, and all current or future subsidiaries of Viad that are required to be guarantors under Viad’s Credit Agreement.

As of September 30, 2017, Viad’s total debt and capital lease obligations were $185.2 million, consisting of outstanding borrowings under the Term Loan of $79.7 million, the Revolving Credit Facility of $105.0 million, and capital lease obligations of $1.6 million, offset in part by unamortized debt issuance costs of $1.1 million. As of September 30, 2017, Viad had $68.7 million of capacity remaining under the Revolving Credit Facility, reflecting borrowings of $105.0 million and $1.3 million in outstanding letters of credit. As of September 30, 2017, Brewster Inc. had $38.0 million of capacity remaining under the Brewster Revolving Credit Facility.

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 Viad’s leverage ratio. Commitment fees and letters of credit fees are also tied to Viad’s leverage ratio. The fees on the unused portion of the Credit Facility are currently 0.35 percent annually.

As of September 30, 2017, Viad, on behalf of its subsidiaries, had certain obligations under guarantees to third parties. These guarantees are not subject to liability recognition in the condensed consolidated financial statements and relate to leased facilities entered into by Viad’s subsidiary operations. The Company would generally be required to make payments to the respective third parties under these guarantees in the event that the related subsidiary could not meet its own payment obligations. The maximum potential amount of future payments that Viad would be required to make under all guarantees existing as of September 30, 2017 would be $7.5 million. These guarantees relate to facilities leased by the Company through September 2021. There are no recourse provisions that would enable Viad to recover from third parties any payments made under the guarantees. Furthermore, there are no collateral or similar arrangements whereby Viad could recover payments.

The estimated fair value of total debt was $179.8 million and $252.8 million as of September 30, 2017 and December 31, 2016, respectively. The fair value of debt was estimated by discounting the future cash flows using rates currently available for debt of similar terms and maturity.

Cash paid for interest on debt was $5.5 million and $3.7 million for the nine months ended September 30, 2017 and 2016, respectively.

Fair Value Measurements
Fair Value Measurements

Note 12. Fair Value Measurements

The fair value of an asset or liability is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value guidance requires an entity to maximize the use of quoted prices and other observable inputs and minimize the use of unobservable inputs when measuring fair value, and also establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value as follows:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value.

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

 

 

 

 

 

 

 

Fair Value Measurements at Reporting Date Using

 

(in thousands)

 

September 30, 2017

 

 

Quoted Prices in

Active

Markets

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds(1)

 

$

119

 

 

$

119

 

 

$

 

 

$

 

Other mutual funds(2)

 

 

2,560

 

 

 

2,560

 

 

 

 

 

 

 

Total assets at fair value on a recurring basis

 

$

2,679

 

 

$

2,679

 

 

$

 

 

$

 

 

 

 

 

 

 

 

Fair Value Measurements at Reporting Date Using

 

(in thousands)

 

December 31, 2016

 

 

Quoted Prices

in Active

Markets

(Level 1)

 

 

Significant

Other

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Money market funds(1)

 

$

118

 

 

$

118

 

 

$

 

 

$

 

Other mutual funds(2)

 

 

2,062

 

 

 

2,062

 

 

 

 

 

 

 

Total assets at fair value on a recurring basis

 

$

2,180

 

 

$

2,180

 

 

$

 

 

$

 

(1)

Money market mutual funds are included in “Cash and cash equivalents” in the condensed consolidated balance sheets. These investments are classified as available-for-sale and were recorded at fair value. There have been no realized gains or losses related to these investments and the Company has not experienced any redemption restrictions with respect to any of the money market mutual funds.

(2)

Other mutual funds are included in “Other investments and assets” in the condensed consolidated balance sheets. These investments are classified as available-for-sale and were recorded at fair value. As of September 30, 2017 and December 31, 2016, there were unrealized gains of $0.9 million ($0.6 million after-tax) and $0.7 million ($0.4 million after tax), respectively, which were included in “Accumulated other comprehensive income (loss)” (“AOCI”) in the condensed consolidated balance sheets.

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.

Stockholders' Equity
Stockholders' Equity

Note 13. Stockholders’ Equity

The following represents a reconciliation of the carrying amounts of stockholders’ equity attributable to Viad and the noncontrolling interest for the nine months ended September 30, 2017 and 2016:

 

(in thousands)

 

Total Viad

Stockholders’

Equity

 

 

Noncontrolling

Interest

 

 

Total

Stockholders’

Equity

 

Balance at December 31, 2016

 

$

357,355

 

 

$

13,283

 

 

$

370,638

 

Net income

 

 

79,381

 

 

 

747

 

 

 

80,128

 

Dividends on common stock ($0.30 per share)

 

 

(6,119

)

 

 

 

 

 

(6,119

)

Common stock purchased for treasury

 

 

(1,272

)

 

 

 

 

 

(1,272

)

Employee benefit plans

 

 

5,916