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Note 1. Overview and Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements of Viad have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of Viad and its subsidiaries. All significant intercompany account balances and transactions have been eliminated in consolidation.
Nature of Business
We are an international experiential services company with operations principally in the United States, Canada, the United Kingdom, continental Europe, the United Arab Emirates, and Hong Kong. We are committed to providing unforgettable experiences to our clients and guests. We operate through three reportable business segments: GES U.S., GES International, (collectively, “GES”), and Pursuit.
GES
GES is a global, full-service provider for live events that produces exhibitions, conferences, corporate events, and consumer events. GES offers a comprehensive range of live event services and a full suite of audio-visual services from creative and technology to content and design, along with online tools powered by next generation technologies that help clients easily manage the complexities of their events.
GES’ clients include event organizers and corporate brand marketers. Event organizers schedule and run the event from start to finish. Corporate brand marketers include exhibitors and domestic and international corporations that want to promote their brands, services and innovations, feature new products, and build business relationships. GES serves corporate brand marketers when they exhibit at shows and when GES is engaged to manage their global exhibit program or produce their proprietary corporate events.
Pursuit
Pursuit is a collection of iconic natural and cultural destination travel experiences that enjoy perennial demand. Pursuit is comprised of four lines of business: Hospitality, Attractions, Transportation, and Travel Planning. These four lines of business work together, driving economies of scope and meaningful scale in and around the iconic destinations of Banff, Jasper, and Waterton Lakes National Parks and Vancouver in Canada, and Glacier, Denali, and Kenai Fjords National Parks in the United States. Pursuit is comprised of Brewster Travel Canada, which is marketed as the Banff Jasper Collection; the Alaska Collection; Glacier Park, Inc., which is marketed as the Glacier Park Collection, and FlyOver.
Significant Accounting Policies
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Estimates and assumptions are used in accounting for, among other things, the fair value of our reporting units used to perform annual impairment testing of recorded goodwill; allowances for uncollectible accounts receivable; provisions for income taxes, including uncertain tax positions; valuation allowances related to deferred tax assets; liabilities for losses related to self-insured liability claims; liabilities for losses related to environmental remediation obligations; sublease income associated with restructuring liabilities; assumptions used to measure pension and postretirement benefit costs and obligations; assumptions used to determine share-based compensation costs under the fair value method; assumptions in the redemption value of redeemable noncontrolling interests; and allocation of purchase price of acquired businesses. Actual results could differ from these and other estimates.
Cash and Cash Equivalents
Cash equivalents are highly-liquid investments with remaining maturities when purchased of three months or less. Cash and cash equivalents consist of cash and bank demand deposits and money market mutual funds. Investments in money market mutual funds are classified as available-for-sale and carried at fair value.
Allowances for Doubtful Accounts
Allowances for doubtful accounts reflect the best estimate of probable losses inherent in the accounts receivable balance. The allowances for doubtful accounts, including a sales allowance for discounts at the time of sale, are based upon an evaluation of the aging of receivables, historical trends, and the current economic environment.
Inventories
Inventories, which consist primarily of exhibit design and construction materials and supplies, as well as deferred show costs, including labor, show purchases, and commissions used in providing convention show services, are stated at the lower of cost (first-in, first-out and specific identification methods) or net realizable value.
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets: buildings, 15 to 40 years; equipment, 3 to 12 years; and leasehold improvements, over the shorter of the lease term or useful life. Property and equipment are tested for potential impairment whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset may not be recoverable through undiscounted cash flows.
Capitalized Software
Certain internal and external costs incurred in developing or obtaining internal use software are capitalized. Capitalized costs principally relate to costs incurred to purchase software from third parties, external direct costs of materials and services, and certain payroll-related costs for employees directly associated with software projects once application development begins. Costs associated with preliminary project activities, training, and other post-implementation activities are expensed as incurred. Capitalized software costs are amortized using the straight-line method over the estimated useful lives of the software, ranging from three to ten years. These costs are included in the Consolidated Balance Sheets under the caption “Property and equipment, net.”
Goodwill
Goodwill is tested for impairment at the reporting unit level on an annual basis as of October 31, and between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying value. We use a discounted expected future cash flow methodology (income approach) in order to estimate the fair value of our reporting units for purposes of goodwill impairment testing. The estimates and assumptions regarding expected future cash flows, discount rates, and terminal values require considerable judgment and are based on market conditions, financial forecasts, industry trends, and historical experience. These estimates, however, have inherent uncertainties and different assumptions could lead to materially different results.
Cash Surrender Value of Life Insurance
We have Company-owned life insurance contracts which are intended to fund the cost of certain employee compensation and benefit programs. These contracts are carried at cash surrender value, net of outstanding policy loans. The cash surrender value represents the amount of cash we could receive if the policies were discontinued before maturity. The changes in the cash surrender value of the policies, net of insurance premiums, are included as a component of “Costs of Services” in the Consolidated Statements of Operations.
Self-Insurance Liabilities
We are self-insured up to certain limits for workers’ compensation, automobile, product and general liability, property loss, and medical claims. We retained certain liabilities related to workers’ compensation and general liability insurance claims in conjunction with previously sold operations. Provisions for losses for claims incurred, including estimated claims incurred but not yet reported, are made based on historical experience, claims frequency, insurance coverage, and other factors. We purchased insurance for amounts in excess of the self-insured levels.
Environmental Remediation Liabilities
Environmental remediation liabilities represent the estimated cost of environmental remediation obligations primarily associated with previously sold operations. The amounts accrued primarily consist of the estimated direct incremental costs, on an undiscounted basis, for contractor and other services related to remedial actions and post-remediation site monitoring. Environmental remediation liabilities are recorded when the specific obligation is considered probable and the costs are reasonably estimable. Subsequent recoveries from third parties, if any, are recorded through discontinued operations when realized. Environmental insurance is maintained that provides coverage for new and undiscovered pre-existing conditions at both our continuing and discontinued operations.
Fair Value of Financial Instruments
The carrying value of cash and cash equivalents, receivables, and accounts payable approximate fair value due to the short-term maturities of these instruments. Refer to Note 11 – Debt and Capital Lease Obligations for the estimated fair value of debt obligations.
Non-redeemable Noncontrolling Interest and Redeemable Noncontrolling Interest
Non-redeemable noncontrolling interest represents the portion of equity in a subsidiary not attributable, directly or indirectly, to us. Our non-redeemable noncontrolling interest relates to the equity ownership that we do not own in Glacier Park, Inc. of 20%. We report non-redeemable noncontrolling interest within stockholders’ equity in the Consolidated Balance Sheets. The amount of consolidated net income attributable to Viad and the non-redeemable noncontrolling interest is presented in the Consolidated Statements of Operations.
Noncontrolling interests with redemption features that are not solely within our control are considered redeemable noncontrolling interests. The Esja purchase agreement contains a put option that gives the minority Esja shareholders the right to sell (or “put”) their Esja shares to us based on a calculated formula within a predefined term. This redeemable noncontrolling interest is considered temporary equity and we report it between liabilities and stockholders’ equity in the Consolidated Balance Sheets. The amount of the net income or loss attributable to redeemable noncontrolling interests is recorded to retained earnings and is included in our earnings per share. Refer to Note 21 – Redeemable Noncontrolling Interest for additional information.
Foreign Currency Translation
Our foreign operations are primarily in Canada, the United Kingdom, the Netherlands, Germany, and to a lesser extent, in certain other countries. The functional currency of our foreign subsidiaries is their local currency. Accordingly, for purposes of consolidation, we translate the assets and liabilities of our foreign subsidiaries into U.S. dollars at the foreign exchange rates in effect at the balance sheet date. The unrealized gains or losses resulting from the translation of these foreign denominated assets and liabilities are included as a component of accumulated other comprehensive income (loss) in the Consolidated Balance Sheets. For purposes of consolidation, revenue, expenses, gains, and losses related to our foreign operations are translated into U.S. dollars at the average foreign exchange rates for the period.
Revenue Recognition
Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the sales price is fixed or determinable, and collectability is reasonably assured. GES derives revenue primarily by providing core services, event technology services, and audio-visual services to event organizers and exhibitors participating in live events. GES derives revenue from consumer events by charging visitors to view the touring exhibitions. Exhibition and event service’s revenue is recognized when services are completed, net of commissions. Exhibits and environments revenue is accounted for using the completed-contract method. Pursuit generates revenue through its hospitality, attractions, transportation, and travel planning services. Pursuit’s revenue is recognized at the time services are performed.
Insurance Recoveries
Receipts from insurance up to the amount of the recognized losses are considered recoveries and are accounted for when they are probable of receipt. Anticipated proceeds in excess of the recognized loss are considered a gain contingency. A contingency gain for anticipated insurance proceeds in excess of losses already recognized is not recognized until all contingencies relating to the insurance claim have been resolved.
Insurance proceeds allocated to business interruption gains are reported as cash flows from operating activities, and proceeds allocated to impairment recoveries are reported as cash flows from investing activities. Insurance proceeds used for capitalizable costs are classified as cash flows from investing activities, and proceeds used for non-capitalizable costs are classified as operating activities.
On December 29, 2016, the Mount Royal Hotel was damaged by a fire and closed. During the fourth quarter of 2016, we recorded an asset impairment loss of $2.2 million and an offsetting impairment recovery (and related insurance receivable) as the losses related to the fire were covered by our property and business interruption insurance. During July 2017, we resolved our property and business interruption insurance claims for a total of $36.3 million. We allocated $2.2 million to an insurance receivable, $29.3 million was recorded as an impairment recovery (partially offset by impairment charges of $0.2 million) related to construction costs to re-open the hotel, $2.5 million was recorded as a business interruption gain for the recovery of lost profits, $1.3 million was recorded as contra-expense to offset non-capitalizable costs incurred, and the remaining $1.0 million was recorded as deferred revenue, which will be recognized over the periods when the business interruption losses are actually incurred.
Share-Based Compensation
Share-based compensation costs, related to all share-based payment awards, are recognized and measured using the fair value method of accounting. These awards generally include restricted stock, liability-based awards (including performance units and restricted stock units), and stock options, and contain forfeiture and non-compete provisions.
The fair value of restricted stock awards is based on our closing stock price on the date of grant. We issue restricted stock awards from shares held in treasury. Future vesting of restricted stock is generally subject to continued employment. Holders of restricted stock have the right to receive dividends and vote the shares, but may not sell, assign, transfer, pledge, or otherwise encumber the stock, except to the extent restrictions have lapsed and in accordance with our stock trading policy.
Restricted stock awards vest between three and five years from the date of grant. Share-based compensation expense related to restricted stock is recognized using the straight-line method over the requisite service period of approximately three years. For awards with a five-year vesting period, expense is recognized based on an accelerated multiple-award approach over a five-year period. For these awards, 40% of the shares vest on the third anniversary of the grant and the remaining shares vest in 30% increments over the subsequent two anniversary dates.
Liability-based awards (including performance units and restricted stock units) are recorded at estimated fair value, based on the number of units expected to vest and where applicable, the level of achievement of predefined performance goals. These awards are remeasured on each balance sheet date based on our stock price, and the Monte Carlo simulation model, until the time of settlement. A Monte Carlo simulation requires the use of a number of assumptions, including historical volatility and correlation of our stock price and the price of the common shares of a comparator group, a risk-free rate of return, and an expected term. To the extent earned, liability-based awards are settled in cash based on our stock price. Compensation expense related to liability-based awards is recognized ratably over the requisite service period of approximately three years.
Equity-based awards (including performance units) are recorded at estimated fair value, based on the number of units expected to vest and the level of achievement of predefined performance goals, until the time of settlement. To the extent earned, equity-based awards are settled in our common stock. Compensation expense related to equity-based awards is recognized ratably over the requisite service period of approximately three years.
The fair value of stock option grants is estimated on the date of grant using the Black-Scholes option pricing model. Share-based compensation expense related to stock option awards is recognized using the straight-line method over the requisite service period of approximately five years. The exercise price of stock options is based on the market value of our common stock at the date of grant. We have not granted stock options since 2010.
Common Stock in Treasury
Common stock purchased for treasury is recorded at historical cost. Subsequent share reissuances are primarily related to share-based compensation programs and recorded at weighted-average cost.
Income Per Common Share
We apply the two-class method in calculating income per common share as unvested share-based payment awards that contain nonforfeitable rights to dividends are considered participating securities. Accordingly, such securities are included in the earnings allocation in calculating income per share. The adjustment to the carrying value of the redeemable noncontrolling interest is reflected in income per common share.
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. We may adopt either retrospectively to each prior period presented with the option to elect certain practical expedients or with the cumulative effect recognized at the date of initial application and providing certain disclosures.
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 |
|
We assigned internal resources and engaged a third-party service provider to assist in evaluating the impact on our accounting policies, processes, and system requirements. Based on our assessment, the adoption of this standard will not have a material impact on our consolidated financial statements. The impact primarily relates to the deferral of certain commissions which were previously expensed as incurred but will generally be capitalized and amortized over the period of contract performance, and the deferral of certain costs incurred in connection with trade shows which were previously expensed as incurred but will generally be capitalized and expensed upon the completion of the show. We adopted the standard on January 1, 2018 and will be using the modified retrospective transition method. Additionally, the new guidance requires enhanced disclosures, including revenue recognition policies to identify performance obligations to customers and significant judgments in measurement and recognition. |
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 |
|
We are currently evaluating the potential impact the adoption of this new guidance will have on our financial position or results of operations including analyzing our existing operating leases. Based on our current assessment, the adoption of this standard will have a material impact on our Consolidated Balance Sheets, however the income statement is not expected to be materially impacted. We expect the most significant impact will relate to facility and equipment leases, which are currently recorded as operating leases. We are continuing our assessment, which may identify other impacts. We will adopt the standard on January 1, 2019. |
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 our consolidated financial statements and we expect the adoption to reduce the complexity surrounding the analysis of goodwill impairment. |
Standard |
|
Description |
|
Date of adoption |
|
Effect on the financial statements |
Standards Recently Adopted |
||||||
ASU 2016-09, Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting |
|
The amendment identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. |
|
January 1, 2017 |
|
The adoption of this new guidance resulted in a decrease in tax expense of $1.1 million, or a 1.1% decrease in our effective tax rate, as compared to 2016. |
|
Note 3. Acquisition of Businesses
2017 Acquisitions
Poken
In March 2017, we acquired Poken event engagement technology for total cash consideration of $1.7 million. Transaction costs associated with the acquisition of Poken were $0.3 million in 2017, which are included in cost of services in the Consolidated Statements of Operations. These assets have been included in the consolidated financial statements from the date of acquisition.
Esja
On November 3, 2017, we acquired the controlling interest (54.5% of the common stock) in Esja, a private corporation in Reykjavik, Iceland. Esja is developing and will operate a new FlyOver Iceland attraction, which is expected to open in 2019. The purchase price was €8.2 million (approximately $9.5 million) in cash, which included a put option that gives the minority Esja shareholders the right to sell (or “put”) their Esja shares to us based on a calculated formula within a predefined term. The noncontrolling interest’s carrying value is determined by the fair value of the noncontrolling interest as of the acquisition date, the noncontrolling interests’ share of the subsequent net income or loss, and the accretion of the redemption value of the put option. As of the transaction date, the fair value of the noncontrolling interest was estimated to be $6.7 million. Due to the recent timing of the acquisition, the fair value of the noncontrolling interest is not yet finalized and is subject to change within the measurement period (up to one year from the acquisition date). Refer to Note 21 – Redeemable Noncontrolling Interest for additional information.
Under the acquisition method of accounting, the purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values. The excess purchase price over fair value of net assets acquired is recorded as goodwill. Goodwill is included in the Pursuit business group and the primary factor that contributed to the purchase price resulting in the recognition of goodwill relates to future income from operations after opening in 2019. Transaction costs associated with the acquisition of Esja were $0.1 million in 2017, which are included in cost of services in the Consolidated Statements of Operations.
The results of operations of Esja have been included in the consolidated financial statements from the date of acquisition. During 2017, Esja had an operating loss of $0.1 million.
2016 Acquisitions
Maligne Lake Tours
On January 4, 2016, we acquired the assets and operations of Maligne Tours Ltd. (“Maligne Lake Tours”), which provides interpretive boat tours and related services at Maligne Lake, the largest lake in Jasper National Park. The purchase price was $20.9 million Canadian dollars (approximately $15.0 million U.S. dollars) in cash.
Transaction costs associated with the Maligne Lake Tours acquisition were $0.1 million in 2017 and $0.1 million in 2016, which are included in cost of services in the Consolidated Statements of Operations and $0.2 million in 2015, which are included in corporate activities in the Consolidated Statements of Operations. The results of operations of Maligne Lake Tours have been included in the consolidated financial statements from the date of acquisition.
CATC
On March 11, 2016, we acquired 100% of the equity interests in CATC Alaska Tourism Corporation (“CATC”), the operator of an Alaskan tourism business that includes a marine sightseeing tour business, three lodges, and a package tour business. The purchase price was $45.0 million in cash.
Transaction costs associated with the CATC acquisition were $0.1 million in 2017, $0.1 million in 2016, and $0.6 million in 2015, which are included in corporate activities in the Consolidated Statements of Operations. The results of operations of CATC have been included in the consolidated financial statements from the date of acquisition.
ON Services
On August 11, 2016, we acquired the assets and operations of ON Event Services, LLC (“ON Services”), a leading provider of audio-visual production services for live events in the United States. The aggregate purchase price was up to $92.5 million in cash, which included an earnout payment (the “Earnout”) of up to $5.5 million. The fair value of the Earnout was valued on the date of acquisition and was remeasured based on the financial performance of ON Services for 2016. As of the transaction date, the fair value of the Earnout was estimated to be $540,000.
Transaction costs associated with the ON Services acquisition were $0.1 million in 2017 and $0.9 million in 2016, which are included in corporate activities in the Consolidated Statement of Operations. The results of operations of ON Services have been included in the consolidated financial statements from the date of acquisition.
FlyOver Canada
On December 29, 2016, we acquired the assets and operations of FlyOver Canada, a recreational attraction that provides a virtual flight ride experience with a combination of motion seating, spectacular media, and visual effects including wind, scents, and mist. The purchase price was $68.8 million Canadian dollars (approximately $50.9 million U.S. dollars) in cash.
Transaction costs associated with the FlyOver Canada acquisition were $0.1 million in 2017 and $0.5 million in 2016, which are included in cost of services in the Consolidated Statements of Operations. The results of operations of FlyOver Canada have been included in the consolidated financial statements from the date of acquisition.
The following table summarizes the final allocation of the aggregate purchase price paid and amounts of assets acquired and liabilities assumed based upon the estimated fair value at the date of acquisitions. The balances in the table below remain unchanged from the balances reflected in the Consolidated Balance Sheets in our Annual Report on Form 10-K for the year ended December 31, 2016.
|
|
Maligne Lake Tours |
|
|
CATC |
|
|
ON Services |
|
|
FlyOver Canada |
|
||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase price paid as: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
$ |
14,962 |
|
|
$ |
45,000 |
|
|
$ |
87,000 |
|
|
$ |
50,920 |
|
Working capital adjustment |
|
|
— |
|
|
|
(35 |
) |
|
|
344 |
|
|
|
— |
|
Contingent consideration |
|
|
— |
|
|
|
— |
|
|
|
540 |
|
|
|
— |
|
Cash acquired |
|
|
— |
|
|
|
(2,196 |
) |
|
|
— |
|
|
|
(6 |
) |
Total purchase price, net of cash acquired |
|
|
14,962 |
|
|
|
42,769 |
|
|
|
87,884 |
|
|
|
50,914 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of net assets acquired: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
— |
|
|
|
8 |
|
|
|
4,643 |
|
|
|
— |
|
Inventories |
|
|
246 |
|
|
|
921 |
|
|
|
256 |
|
|
|
11 |
|
Prepaid expenses |
|
|
2 |
|
|
|
82 |
|
|
|
872 |
|
|
|
37 |
|
Property and equipment |
|
|
4,133 |
|
|
|
43,470 |
|
|
|
14,827 |
|
|
|
10,867 |
|
Intangible assets |
|
|
9,244 |
|
|
|
980 |
|
|
|
33,990 |
|
|
|
6,028 |
|
Total assets acquired |
|
|
13,625 |
|
|
|
45,461 |
|
|
|
54,588 |
|
|
|
16,943 |
|
Accounts payable |
|
|
— |
|
|
|
306 |
|
|
|
992 |
|
|
|
— |
|
Accrued liabilities |
|
|
— |
|
|
|
434 |
|
|
|
564 |
|
|
|
118 |
|
Customer deposits |
|
|
15 |
|
|
|
1,952 |
|
|
|
851 |
|
|
|
— |
|
Other liabilities |
|
|
240 |
|
|
|
— |
|
|
|
274 |
|
|
|
— |
|
Total liabilities acquired |
|
|
255 |
|
|
|
2,692 |
|
|
|
2,681 |
|
|
|
118 |
|
Total fair value of net assets acquired |
|
|
13,370 |
|
|
|
42,769 |
|
|
|
51,907 |
|
|
|
16,825 |
|
Excess purchase price over fair value of net assets acquired (“goodwill”) |
|
$ |
1,592 |
|
|
$ |
— |
|
|
$ |
35,977 |
|
|
$ |
34,089 |
|
Under the acquisition method of accounting, the purchase prices as shown in the table above are allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess purchase price over fair value of net assets acquired is recorded as goodwill. Goodwill is included in the Pursuit business group for Maligne Lake Tours and FlyOver Canada and in the GES business group for ON Services. The primary factor that contributed to the purchase price resulting in the recognition of goodwill relates to future growth opportunities, and the expansion of the FlyOver concept for FlyOver Canada, when combined with our other businesses. All goodwill is deductible for tax purposes pursuant to Canadian tax regulations for Maligne Lake Tours and FlyOver Canada and over a period of 15 years for ON Services. The estimated values of current assets and liabilities were based upon their historical costs on the date of acquisition due to their short-term nature.
Following are the details of the purchase price allocated to the intangible assets acquired for the 2016 Acquisitions:
(in thousands, except weighted average life) |
|
Maligne Lake Tours |
|
|
CATC |
|
|
ON Services |
|
|
FlyOver Canada |
|
||||
Customer relationships |
|
$ |
788 |
|
|
$ |
780 |
|
|
$ |
27,620 |
|
|
$ |
1,592 |
|
Operating licenses |
|
|
8,313 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Trade name |
|
|
143 |
|
|
|
200 |
|
|
|
3,190 |
|
|
|
3,710 |
|
Non-compete agreements |
|
|
— |
|
|
|
— |
|
|
|
3,180 |
|
|
|
726 |
|
Fair value of intangible assets acquired |
|
$ |
9,244 |
|
|
$ |
980 |
|
|
$ |
33,990 |
|
|
$ |
6,028 |
|
Weighted average life |
|
26.7 years(1) |
|
|
5.8 years |
|
|
10.5 years |
|
|
9.4 years |
|
(1) |
Largely attributable to operating licenses amortized over the remaining Parks Canada lease of 29 years. |
Supplementary pro forma financial information
The following table summarizes our unaudited pro forma results of operations assuming the 2016 Acquisitions had each been completed on January 1, 2015:
|
|
Year Ended December 31, |
|
|||||
(in thousands, except per share data) |
|
2016 |
|
|
2015 |
|
||
Revenue |
|
$ |
1,250,290 |
|
|
$ |
1,183,656 |
|
Depreciation and amortization |
|
$ |
52,074 |
|
|
$ |
52,631 |
|
Income from continuing operations |
|
$ |
43,727 |
|
|
$ |
27,881 |
|
Net income attributable to Viad |
|
$ |
42,517 |
|
|
$ |
27,045 |
|
Diluted income per share |
|
$ |
2.10 |
|
|
$ |
1.35 |
|
Basic income per share |
|
$ |
2.10 |
|
|
$ |
1.35 |
|
|
Note 4. Inventories
The components of inventories consisted of the following:
|
|
December 31, |
|
|||||
(in thousands) |
|
2017 |
|
|
2016 |
|
||
Raw materials |
|
$ |
17,550 |
|
|
$ |
16,846 |
|
Work in process |
|
|
12,822 |
|
|
|
14,574 |
|
Inventories |
|
$ |
30,372 |
|
|
$ |
31,420 |
|
|
Note 5. Other Current Assets
Other current assets consisted of the following:
|
|
December 31, |
|
|||||
(in thousands) |
|
2017 |
|
|
2016 |
|
||
Prepaid vendor payments |
|
$ |
5,048 |
|
|
$ |
3,633 |
|
Income tax receivable |
|
|
4,237 |
|
|
|
3,614 |
|
Prepaid software maintenance |
|
|
3,386 |
|
|
|
2,804 |
|
Prepaid insurance |
|
|
2,610 |
|
|
|
2,479 |
|
Prepaid taxes |
|
|
912 |
|
|
|
850 |
|
Prepaid rent |
|
|
730 |
|
|
|
327 |
|
Prepaid other |
|
|
2,172 |
|
|
|
731 |
|
Other |
|
|
1,935 |
|
|
|
4,011 |
|
Other current assets |
|
$ |
21,030 |
|
|
$ |
18,449 |
|
|
Note 6. Property and Equipment
Property and equipment consisted of the following:
|
|
December 31, |
|
|||||
(in thousands) |
|
2017 |
|
|
2016 |
|
||
Land and land interests(1) |
|
$ |
32,544 |
|
|
$ |
31,670 |
|
Buildings and leasehold improvements |
|
|
222,118 |
|
|
|
185,987 |
|
Equipment and other(2) |
|
|
351,676 |
|
|
|
326,868 |
|
Gross property and equipment |
|
|
606,338 |
|
|
|
544,525 |
|
Accumulated depreciation |
|
|
(300,767 |
) |
|
|
(264,667 |
) |
Property and equipment, net |
|
$ |
305,571 |
|
|
$ |
279,858 |
|
(1) |
Land and land interests include certain leasehold interests in land within Pursuit for which we are considered to have perpetual use rights. The carrying amount of these leasehold interests was $8.4 million as of December 31, 2017 and $7.9 million as of December 31, 2016. These land interests are not subject to amortization. |
(2) |
Equipment and other includes capitalized costs incurred in developing or obtaining internal and external use software. The net carrying amount of capitalized software was $10.1 million as of December 31, 2017 and $11.9 million as of December 31, 2016. |
Depreciation expense was $42.7 million for 2017, $33.6 million for 2016, and $28.1 million for 2015.
Non-cash increases to property and equipment related to assets acquired under capital leases were $2.5 million for 2017, $1.2 million for 2016, and $1.0 million for 2015. Non-cash increases to property and equipment purchases in accounts payable and accrued liabilities were $2.3 million for 2017, $0.9 million for 2016, and $2.3 million for 2015.
On December 29, 2016, the Mount Royal Hotel in Banff, Canada was damaged by a fire and closed. As a result of the fire, we recorded an impairment loss of $2.2 million against the net book value of the hotel assets. During 2017, we resolved our property and business interruption insurance claims related to the fire for a total of $36.3 million of which $29.3 million was recorded as an impairment recovery (partially offset by impairment charges of $0.2 million) related to construction costs to re-open the hotel.
During 2016, we recorded impairment charges of $0.2 million related to the write-down of certain software and buses in Pursuit. During 2015, we recorded impairment charges of $0.1 million related to the write-off of certain software in Pursuit. Impairment charges (recoveries) are included in the Consolidated Statements of Operations.
|
Note 7. Other Investments and Assets
Other investments and assets consisted of the following:
|
|
December 31, |
|
|||||
(in thousands) |
|
2017 |
|
|
2016 |
|
||
Cash surrender value of life insurance |
|
$ |
23,947 |
|
|
$ |
23,197 |
|
Self-insured liability receivable |
|
|
10,442 |
|
|
|
10,463 |
|
Workers’ compensation insurance security deposits |
|
|
3,550 |
|
|
|
4,050 |
|
Other mutual funds |
|
|
2,637 |
|
|
|
2,062 |
|
Other |
|
|
6,936 |
|
|
|
4,525 |
|
Other investments and assets |
|
$ |
47,512 |
|
|
$ |
44,297 |
|
|
Note 8. Goodwill and Other Intangible Assets
The changes in the carrying amount of goodwill are as follows:
(in thousands) |
|
GES U.S. |
|
|
GES International |
|
|
Pursuit |
|
|
Total |
|
||||
Balance at December 31, 2015 |
|
$ |
112,300 |
|
|
$ |
38,635 |
|
|
$ |
34,288 |
|
|
$ |
185,223 |
|
Business acquisitions |
|
|
35,977 |
|
|
|
— |
|
|
|
35,681 |
|
|
|
71,658 |
|
Foreign currency translation adjustments |
|
|
— |
|
|
|
(4,175 |
) |
|
|
1,316 |
|
|
|
(2,859 |
) |
Balance at December 31, 2016 |
|
|
148,277 |
|
|
|
34,460 |
|
|
|
71,285 |
|
|
|
254,022 |
|
Business acquisitions |
|
|
— |
|
|
|
1,060 |
|
|
|
7,094 |
|
|
|
8,154 |
|
Foreign currency translation adjustments |
|
|
— |
|
|
|
3,320 |
|
|
|
5,055 |
|
|
|
8,375 |
|
Balance at December 31, 2017 |
|
$ |
148,277 |
|
|
$ |
38,840 |
|
|
$ |
83,434 |
|
|
$ |
270,551 |
|
The following table summarizes goodwill by reporting unit and segment:
|
|
December 31, |
|
|||||
(in thousands) |
|
2017 |
|
|
2016 |
|
||
GES: |
|
|
|
|
|
|
|
|
U.S. |
|
$ |
148,277 |
|
|
$ |
148,277 |
|
International: |
|
|
|
|
|
|
|
|
GES EMEA |
|
|
31,612 |
|
|
|
27,694 |
|
GES Canada |
|
|
7,228 |
|
|
|
6,766 |
|
Total GES |
|
|
187,117 |
|
|
|
182,737 |
|
Pursuit: |
|
|
|
|
|
|
|
|
Banff Jasper Collection |
|
|
35,305 |
|
|
|
32,587 |
|
Alaska Collection |
|
|
3,184 |
|
|
|
3,184 |
|
Glacier Park Collection |
|
|
1,268 |
|
|
|
1,268 |
|
FlyOver |
|
|
43,677 |
|
|
|
34,246 |
|
Total Pursuit |
|
|
83,434 |
|
|
|
71,285 |
|
Total Goodwill |
|
$ |
270,551 |
|
|
$ |
254,022 |
|
Goodwill is tested for impairment at the reporting unit level on an annual basis as of October 31, and between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying value.
GES U.S. goodwill is assigned to, and tested at, the operating segment level. GES International goodwill is assigned to and tested based on the segment’s geographical operations (GES Europe, Middle East, and Asia (“GES EMEA”) and GES Canada). Pursuit’s impairment testing is performed at the reporting unit level (Banff Jasper Collection, the Alaska Collection, Glacier Park Collection, and FlyOver).
As a result of our most recent impairment analysis performed as of October 31, 2017, the excess of the estimated fair value over the carrying value for each of our reporting units (expressed as a percentage of the carrying amounts) under step one of the impairment test for GES U.S. was 134%, GES EMEA was 214%, GES Canada was 164%, the Banff Jasper Collection was 147%, the Alaska Collection was 99%, the Glacier Park Collection was 16%, and FlyOver was 29%.
Our accumulated goodwill impairment as of both December 31, 2017 and 2016 was $229.7 million.
Other intangible assets consisted of the following:
|
|
December 31, 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 |
|
$ |
68,798 |
|
|
$ |
(23,696 |
) |
|
$ |
45,102 |
|
|
$ |
67,762 |
|
|
$ |
(14,345 |
) |
|
$ |
53,417 |
|
Operating contracts and licenses |
|
|
9,951 |
|
|
|
(1,094 |
) |
|
|
8,857 |
|
|
|
9,315 |
|
|
|
(652 |
) |
|
|
8,663 |
|
Tradenames |
|
|
8,633 |
|
|
|
(2,873 |
) |
|
|
5,760 |
|
|
|
8,324 |
|
|
|
(1,440 |
) |
|
|
6,884 |
|
Non-compete agreements |
|
|
5,363 |
|
|
|
(3,007 |
) |
|
|
2,356 |
|
|
|
5,190 |
|
|
|
(1,369 |
) |
|
|
3,821 |
|
Other |
|
|
896 |
|
|
|
(650 |
) |
|
|
246 |
|
|
|
886 |
|
|
|
(458 |
) |
|
|
428 |
|
Total amortized intangible assets |
|
|
93,641 |
|
|
|
(31,320 |
) |
|
|
62,321 |
|
|
|
91,477 |
|
|
|
(18,264 |
) |
|
|
73,213 |
|
Unamortized intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business licenses |
|
|
460 |
|
|
|
— |
|
|
|
460 |
|
|
|
460 |
|
|
|
— |
|
|
|
460 |
|
Other intangible assets |
|
$ |
94,101 |
|
|
$ |
(31,320 |
) |
|
$ |
62,781 |
|
|
$ |
91,937 |
|
|
$ |
(18,264 |
) |
|
$ |
73,673 |
|
Intangible asset amortization expense was $12.4 million during 2017, $9.2 million during 2016, and $7.2 million during 2015. The weighted-average amortization period of customer contracts and relationships is approximately 8.5 years, operating contracts and licenses is approximately 26.3 years, tradenames is approximately 7.0 years, non-compete agreements is approximately 2.2 years, and other amortizable intangible assets is approximately 2.2 years. The estimated future amortization expense related to amortized intangible assets held at December 31, 2017 is as follows:
(in thousands) |
|
|
|
|
Year ending December 31, |
|
|
|
|
2018 |
|
$ |
11,013 |
|
2019 |
|
|
9,945 |
|
2020 |
|
|
8,444 |
|
2021 |
|
|
7,447 |
|
2022 |
|
|
5,895 |
|
Thereafter |
|
|
19,577 |
|
Total |
|
$ |
62,321 |
|
|
Note 9. Other Current Liabilities
Other current liabilities consisted of the following:
|
|
December 31, |
|
|||||
(in thousands) |
|
2017 |
|
|
2016 |
|
||
Continuing operations: |
|
|
|
|
|
|
|
|
Accrued income tax payable |
|
$ |
7,518 |
|
|
$ |
758 |
|
Self-insured liability accrual |
|
|
6,208 |
|
|
|
5,941 |
|
Commissions payable |
|
|
3,235 |
|
|
|
639 |
|
Accrued employee benefit costs |
|
|
2,915 |
|
|
|
2,624 |
|
Accrued sales and use taxes |
|
|
2,431 |
|
|
|
4,279 |
|
Accrued dividends |
|
|
2,094 |
|
|
|
2,119 |
|
Current portion of pension and postretirement liabilities |
|
|
2,109 |
|
|
|
1,963 |
|
Deferred rent |
|
|
1,679 |
|
|
|
1,535 |
|
Accrued rebates |
|
|
1,106 |
|
|
|
1,078 |
|
Accrued professional fees |
|
|
1,020 |
|
|
|
794 |
|
Accrued restructuring |
|
|
722 |
|
|
|
1,924 |
|
Other taxes |
|
|
2,750 |
|
|
|
4,210 |
|
Other |
|
|
3,852 |
|
|
|
1,774 |
|
Total continuing operations |
|
|
37,639 |
|
|
|
29,638 |
|
Discontinued operations: |
|
|
|
|
|
|
|
|
Environmental remediation liabilities |
|
|
648 |
|
|
|
492 |
|
Self-insured liability accrual |
|
|
337 |
|
|
|
162 |
|
Other |
|
|
96 |
|
|
|
98 |
|
Total discontinued operations |
|
|
1,081 |
|
|
|
752 |
|
Total other current liabilities |
|
$ |
38,720 |
|
|
$ |
30,390 |
|
|
Note 10. Other Deferred Items and Liabilities
Other deferred items and liabilities consisted of the following:
|
|
December 31, |
|
|||||
(in thousands) |
|
2017 |
|
|
2016 |
|
||
Continuing operations: |
|
|
|
|
|
|
|
|
Self-insured liability |
|
$ |
12,918 |
|
|
$ |
12,981 |
|
Self-insured excess liability |
|
|
10,442 |
|
|
|
10,463 |
|
Accrued compensation |
|
|
9,740 |
|
|
|
8,514 |
|
Foreign deferred tax liability |
|
|
8,267 |
|
|
|
2,264 |
|
Deferred rent |
|
|
3,855 |
|
|
|
5,271 |
|
Accrued restructuring |
|
|
1,827 |
|
|
|
1,858 |
|
Other |
|
|
1,305 |
|
|
|
1,300 |
|
Total continuing operations |
|
|
48,354 |
|
|
|
42,651 |
|
Discontinued operations: |
|
|
|
|
|
|
|
|
Self-insured liability |
|
|
2,557 |
|
|
|
3,748 |
|
Environmental remediation liabilities |
|
|
1,728 |
|
|
|
3,091 |
|
Accrued income taxes |
|
|
— |
|
|
|
1,045 |
|
Other |
|
|
219 |
|
|
|
199 |
|
Total discontinued operations |
|
|
4,504 |
|
|
|
8,083 |
|
Total other deferred items and liabilities |
|
$ |
52,858 |
|
|
$ |
50,734 |
|
|
Note 11. Debt and Capital Lease Obligations
The components of long-term debt and capital lease obligations consisted of the following:
|
|
December 31, |
|
|||||
(in thousands, except interest rates) |
|
2017 |
|
|
2016 |
|
||
Revolving credit facility and term loan, 3.1% weighted-average interest rate at December 31, 2017 and 2.6% at December 31, 2016, due through 2019 (1) |
|
$ |
207,322 |
|
|
$ |
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 |
|
|
(984 |
) |
|
|
(1,464 |
) |
Total debt |
|
|
206,338 |
|
|
|
247,742 |
|
Capital lease obligations, 3.8% weighted-average interest rate at December 31, 2017 and 4.9% at December 31, 2016, due through 2021 |
|
|
2,854 |
|
|
|
1,469 |
|
Total debt and capital lease obligations |
|
|
209,192 |
|
|
|
249,211 |
|
Current portion (2) |
|
|
(152,599 |
) |
|
|
(174,968 |
) |
Long-term debt and capital lease obligations |
|
$ |
56,593 |
|
|
$ |
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, we entered into a $300 million Amended and Restated Credit Agreement (the “Credit Agreement”). The Credit Agreement provides for a senior credit facility in the aggregate amount of $300 million, which consists of a $175 million revolving credit facility (the “Revolving Credit Facility”) and a $125 million term loan (the “Term Loan”). The Credit Agreement has a maturity date of December 22, 2019. Proceeds from the loans made under the Credit Agreement were used to refinance certain of our outstanding debt and will be used for general corporate purposes in the ordinary course of business. Under the Credit Agreement, either or both of the Revolving Credit Facility and the Term Loan may be increased up to an additional $100 million under certain circumstances. If such circumstances are met, we may obtain the additional borrowings under the Revolving Credit Facility, the Term Loan, or a combination of the two. The Revolving Credit Facility has a $40 million sublimit for letters of credit. Borrowings and letters of credit can be denominated in U.S. dollars, Euros, Canadian dollars, or British pounds. Our lenders under the Credit Agreement have a first perfected security interest in all of our personal property including GES, GES Event Intelligence Services, Inc., CATC, and ON Services, and 65% of the capital stock of our top-tier foreign subsidiaries.
Effective February 24, 2016, we executed an amendment (“Amendment No. 1”) to the Credit Agreement. Amendment No. 1 modified the terms of the financial covenants and the negative covenants related to acquisitions, restricted payments, and indebtedness. The overall maximum leverage ratio and minimum fixed charge coverage ratio are 3.50 to 1.00 and 1.75 to 1.00, respectively, and will remain at those levels for the entire remaining term of the Credit Agreement. Acquisitions in substantially the same or related lines of business are permitted under Amendment No. 1, as long as the pro forma leverage ratio is less than or equal to 3.00 to 1.00. We can make dividends, distributions, and repurchases of our common stock up to $20 million per calendar year. Stock dividends, distributions, and repurchases above the $20 million limit are not subject to a liquidity covenant, and are permitted as long as our pro forma leverage ratio is less than or equal to 2.50 to 1.00 and no default or unmatured default, as defined in the Credit Agreement, exists. Unsecured debt is allowed as long as our pro forma leverage ratio is less than or equal to 3.00 to 1.00. Significant other covenants under the Credit Agreement that were not affected by Amendment No. 1 include limitations on investments, sales/leases of assets, consolidations or mergers, and liens on property. As of December 31, 2017, the fixed charge coverage ratio was 3.10 to 1.00, the leverage ratio was 1.45 to 1.00, and we were in compliance with all covenants under the Credit Agreement.
Effective December 28, 2016, Brewster Inc., part of Pursuit, entered into a credit agreement (the “Brewster Credit Agreement”) with a $38 million revolving credit facility (the “Brewster Revolver”). The Brewster Credit Agreement was used in connection with the FlyOver Canada acquisition. Effective December 6, 2017, we amended the Brewster Revolver to reduce the amount to $20 million and extend the maturity date to December 28, 2018. Additional loan proceeds will be used for potential future acquisitions in Canada and other general corporate purposes of Brewster Inc. The lender under the Brewster Revolver has a first perfected security interest in all of Brewster Inc.’s personal property and a guaranty from Brewster Inc.’s immediate parent, Brewster Travel Canada Inc. (secured by its present and future personal property), Viad, and all of its current or future subsidiaries that are required to be guarantors under Viad’s Credit Agreement. The fees on the unused portion of the Brewster Revolver are currently 0.2% annually.
As of December 31, 2017, our total debt and capital lease obligations were $209.2 million, consisting of outstanding borrowings under the Term Loan of $75.0 million, the Revolving Credit Facility of $132.3 million, and capital lease obligations of $2.9 million, offset in part by unamortized debt issuance costs of $1.0 million. As of December 31, 2017, capacity remaining under the Revolving Credit Facility was $41.4 million, reflecting borrowings of $132.3 million and $1.3 million in outstanding letters of credit. As of December 31, 2017, Brewster Inc. had $20 million of capacity remaining under the Brewster Revolver.
Borrowings under the Revolving Credit Facility (of which GES, GES Event Intelligence Services, Inc., CATC, and ON Services are guarantors) are indexed to the prime rate or the London Interbank Offered Rate, plus appropriate spreads tied to our leverage ratio. Commitment fees and letters of credit fees are also tied to our leverage ratio. The fees on the unused portion of the Revolving Credit Facility are currently 0.3% annually.
As of December 31, 2017, on behalf of our subsidiaries, we had certain obligations under guarantees to third parties. These guarantees are not subject to liability recognition in the consolidated financial statements and relate to leased facilities entered into by our subsidiary operations. We would generally be required to make payments to the respective third parties under these guarantees in the event that the related subsidiary could not meet its own payment obligations. The maximum potential amount of future payments that we would be required to make under all guarantees existing as of December 31, 2017 would be $19.3 million. These guarantees relate to facilities leased through October 2027. There are no recourse provisions that would enable us to recover from third parties any payments made under the guarantees. Furthermore, there are no collateral or similar arrangements whereby we could recover payments.
Aggregate annual maturities of long-term debt and capital lease obligations as of December 31, 2017 are as follows:
(in thousands) |
|
Revolving Credit Agreement |
|
|
Capital Lease Obligations |
|
||
Year ending December 31, |
|
|
|
|
|
|
|
|
2018 |
|
$ |
151,072 |
|
|
$ |
1,601 |
|
2019 |
|
|
56,250 |
|
|
|
899 |
|
2020 |
|
|
— |
|
|
|
454 |
|
2021 |
|
|
— |
|
|
|
17 |
|
2022 |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
207,322 |
|
|
$ |
2,971 |
|
Less: Amount representing interest |
|
|
|
|
|
|
(117 |
) |
Present value of minimum lease payments |
|
|
|
|
|
$ |
2,854 |
|
As of December 31, 2017, the gross amount of assets recorded under capital leases was $4.8 million and accumulated amortization was $2.0 million. As of December 31, 2016, the gross amount of assets recorded under capital leases was $3.3 million and accumulated amortization was $1.7 million. The amortization charges related to assets recorded under capital leases are included in depreciation expense. Refer to Note 6 – Property and Equipment.
The weighted-average interest rate on total debt (including amortization of debt issuance costs and commitment fees) was 3.7% for 2017, 3.1% for 2016 and 3.2% for 2015. The estimated fair value of total debt was $203.2 million as of December 31, 2017 and $252.8 million as of December 31, 2016. The fair value of debt was estimated by discounting the future cash flows using rates currently available for debt of similar terms and maturity.
Cash paid for interest on debt was $7.7 million for 2017, $5.5 million for 2016, and $4.2 million for 2015.
|
Note 12. Fair Value Measurements
The fair value of an asset or liability is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value guidance requires an entity to maximize the use of quoted prices and other observable inputs and minimize the use of unobservable inputs when measuring fair value, and also establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value as follows:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Observable inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value.
Money market mutual funds and certain other mutual fund investments are measured at fair value on a recurring basis using Level 1 inputs. The fair value information related to these assets is summarized in the following tables:
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using |
|
|||||||||
(in thousands) |
|
December 31, 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) |
|
|
2,637 |
|
|
|
2,637 |
|
|
|
— |
|
|
|
— |
|
Total assets at fair value on a recurring basis |
|
$ |
2,756 |
|
|
$ |
2,756 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
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 funds are included in “Cash and cash equivalents” in the Consolidated Balance Sheets. These investments are classified as available-for-sale and are recorded at fair value. There have been no realized gains or losses related to these investments and we have not experienced any redemption restrictions with respect to any of the money market mutual funds. |
(2) |
Other mutual funds are included in “Other investments and assets” in the Consolidated Balance Sheets. These investments are classified as available-for-sale and are recorded at fair value. Unrealized gains of $1.0 million ($0.6 million after-tax) as of December 31, 2017 and $0.7 million ($0.4 million after tax) as of December 31, 2016 are included in “Accumulated other comprehensive income (loss)” (“AOCI”) in the Consolidated Balance Sheets. |
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.
|
Note 14. Preferred Stock Purchase Rights
We authorized five million shares of Preferred Stock and two million shares of Junior Participating Preferred Stock, none of which was outstanding on December 31, 2017.
|
Note 15. Accumulated Other Comprehensive Income (Loss)
Changes in AOCI by component are as follows:
(in thousands) |
|
Unrealized Gains on Investments |
|
|
Cumulative Foreign Currency Translation Adjustments |
|
|
Unrecognized Net Actuarial Loss and Prior Service Credit, Net |
|
|
Accumulated Other Comprehensive Income (Loss) |
|
||||
Balance at December 31, 2015 |
|
$ |
346 |
|
|
$ |
(23,257 |
) |
|
$ |
(11,265 |
) |
|
$ |
(34,176 |
) |
Other comprehensive income (loss) before reclassifications |
|
|
135 |
|
|
|
(5,827 |
) |
|
|
— |
|
|
|
(5,692 |
) |
Amounts reclassified from AOCI, net of tax |
|
|
(60 |
) |
|
|
— |
|
|
|
537 |
|
|
|
477 |
|
Net other comprehensive income (loss) |
|
|
75 |
|
|
|
(5,827 |
) |
|
|
537 |
|
|
|
(5,215 |
) |
Balance at December 31, 2016 |
|
$ |
421 |
|
|
$ |
(29,084 |
) |
|
$ |
(10,728 |
) |
|
$ |
(39,391 |
) |
Other comprehensive income before reclassifications |
|
|
257 |
|
|
|
17,058 |
|
|
|
— |
|
|
|
17,315 |
|
Amounts reclassified from AOCI, net of tax |
|
|
(62 |
) |
|
|
— |
|
|
|
(430 |
) |
|
|
(492 |
) |
Net other comprehensive income (loss) |
|
|
195 |
|
|
|
17,058 |
|
|
|
(430 |
) |
|
|
16,823 |
|
Balance at December 31, 2017 |
|
$ |
616 |
|
|
$ |
(12,026 |
) |
|
$ |
(11,158 |
) |
|
$ |
(22,568 |
) |
The following table presents information about reclassification adjustments out of AOCI:
|
|
Year Ended December 31, |
|
|
Affected Line Item in the Statement Where Net Income is Presented |
|||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
|
||
Unrealized gains on investments |
|
$ |
(100 |
) |
|
$ |
(97 |
) |
|
Interest income |
Tax effect |
|
|
38 |
|
|
|
37 |
|
|
Income taxes |
|
|
$ |
(62 |
) |
|
$ |
(60 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Recognized net actuarial loss (gains)(1) |
|
$ |
507 |
|
|
$ |
1,440 |
|
|
|
Amortization of prior service credit(1) |
|
|
(1,247 |
) |
|
|
(575 |
) |
|
|
Tax effect |
|
|
310 |
|
|
|
(328 |
) |
|
Income taxes |
|
|
$ |
(430 |
) |
|
$ |
537 |
|
|
|
(1) |
Amount included in pension expense. Refer to Note 17 – Pension and Postretirement Benefits. |
|
Note 16. Income Taxes
We record current income tax expense for the amounts that we expect to report and pay on our income tax returns and deferred income tax expense for the change in the deferred tax assets and liabilities. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act (the “Tax Act”) that significantly changed the U.S. tax code and reduced the U.S. federal corporate tax rate from 35% to 21%. Deferred tax assets and liabilities are recorded for the difference between the financial statement and tax basis of assets and liabilities, measured at the enacted tax rate applicable when the differences reverse. We recognized deferred tax expense of $8.0 million for the remeasurement of the net deferred tax assets in the fourth quarter of 2017.
The Tax Act included the transition from a worldwide system of taxation to a territorial system and required a one-time deemed mandatory repatriation of post-1986 undistributed foreign subsidiary earnings and profits (“E&P”). As of December 31, 2017, we had an estimated $174.0 million of undistributed foreign E&P subject to the deemed mandatory repatriation and recognized current income tax expense of $8.1 million in the fourth quarter of 2017.
In addition to the impact recorded as of December 31, 2017, the Tax Act changed existing tax laws, effective January 1, 2018, including the repeal of the corporate alternative minimum tax and the increasing alternative minimum tax credit carryforward utilization, as well as establishing two new taxes, the base erosion anti-abuse tax (“BEAT”) and the global intangible low-taxed income (“GILTI”) tax after the foreign intangible deduction (“FDII”).
Under the new BEAT regime, certain payments made to related foreign companies are treated as base-eroding and limits the deductibility of these payments and imposes a minimum tax in excess of regular tax liability. We have reviewed the applicability of the BEAT provisions to our transactions and we do not expect to be subject to BEAT and have not recorded any provision for BEAT in the year ended December 31, 2017.
Under the new GILTI regime, earnings of foreign subsidiaries in excess of an allowable return on the subsidiary’s tangible assets are required to be included in our U.S. taxable income. Because of the complexity of the new GILTI tax rules, we are continuing to assess the impact and have not recorded a provision for the GILTI tax in the year ended December 31, 2017.
On December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118 (“SAB 118”), which provides guidance on accounting for the tax effects of the Tax Act under U.S. GAAP for SEC registrants who do not have the necessary information available, prepared or analyzed in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. In accordance with SAB 118, to the extent that a company’s accounting is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements.
We have not completed the detailed accounting for all of the income tax effects of the Tax Act, specifically the BEAT and GILTI taxes, since the computations are complex and we need additional time to complete a full analysis. Under SAB 118, we recorded a provisional estimate for the mandatory repatriation of post-1986 undistributed foreign subsidiary E&P of $8.1 million and the remeasurement of the net deferred tax assets of $8.0 million for the year ended December 31, 2017. The ultimate impact may differ from these provisional amounts, possibly materially, due to additional analysis, changes in interpretations and assumptions we have made, additional regulatory guidance that may be issued and actions we may take as a result of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the enactment date and we expect to complete the detailed accounting and include any adjustments within this period.
Income from continuing operations before income taxes consisted of the following:
|
|
Year Ended December 31, |
|
|||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
Foreign |
|
$ |
82,919 |
|
|
$ |
33,611 |
|
|
$ |
35,571 |
|
United States |
|
|
21,431 |
|
|
|
31,118 |
|
|
|
2,364 |
|
Income from continuing operations before income taxes |
|
$ |
104,350 |
|
|
$ |
64,729 |
|
|
$ |
37,935 |
|
Significant components of the income tax provision from continuing operations are as follows:
|
|
Year Ended December 31, |
|
|||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
Current: |
|
|
|
|
|
|
|
|
|
|
|
|
United States: |
|
|
|
|
|
|
|
|
|
|
|
|
Federal |
|
$ |
1,693 |
|
|
$ |
3,685 |
|
|
$ |
(876 |
) |
State |
|
|
2,573 |
|
|
|
1,716 |
|
|
|
1,558 |
|
Foreign |
|
|
15,583 |
|
|
|
8,177 |
|
|
|
9,342 |
|
Total current |
|
|
19,849 |
|
|
|
13,578 |
|
|
|
10,024 |
|
Deferred: |
|
|
|
|
|
|
|
|
|
|
|
|
United States: |
|
|
|
|
|
|
|
|
|
|
|
|
Federal |
|
|
19,893 |
|
|
|
8,427 |
|
|
|
1,854 |
|
State |
|
|
1,761 |
|
|
|
(598 |
) |
|
|
(164 |
) |
Foreign |
|
|
4,395 |
|
|
|
(157 |
) |
|
|
(1,221 |
) |
Total deferred |
|
|
26,049 |
|
|
|
7,672 |
|
|
|
469 |
|
Income tax expense |
|
$ |
45,898 |
|
|
$ |
21,250 |
|
|
$ |
10,493 |
|
We are subject to income tax in jurisdictions in which we operate. A reconciliation of the statutory federal income tax rate to the effective tax rate is as follows:
|
|
Year Ended December 31, |
|
|||||||||||||||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||||||||||||||
Computed income tax expense at statutory federal income tax rate of 35% |
|
$ |
36,522 |
|
|
|
35.0 |
% |
|
$ |
22,655 |
|
|
|
35.0 |
% |
|
$ |
13,277 |
|
|
|
35.0 |
% |
State income taxes, net of federal benefit |
|
|
1,160 |
|
|
|
1.1 |
% |
|
|
292 |
|
|
|
0.5 |
% |
|
|
1,713 |
|
|
|
4.5 |
% |
Deemed mandatory repatriation state tax |
|
|
1,206 |
|
|
|
1.2 |
% |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Deemed mandatory repatriation federal tax, net of foreign tax credit |
|
|
6,936 |
|
|
|
6.6 |
% |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Remeasurement of deferred taxes due to reduction in U.S. tax rate * |
|
|
8,000 |
|
|
|
7.7 |
% |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Foreign tax rate differential |
|
|
(5,031 |
) |
|
|
(4.8 |
)% |
|
|
(882 |
) |
|
|
(1.4 |
)% |
|
|
(1,181 |
) |
|
|
(3.1 |
)% |
U.S. tax on current year foreign earnings, net of foreign tax credits |
|
|
(2,726 |
) |
|
|
(2.6 |
)% |
|
|
(373 |
) |
|
|
(0.6 |
)% |
|
|
(948 |
) |
|
|
(2.5 |
)% |
Change in valuation allowance |
|
|
(796 |
) |
|
|
(0.8 |
)% |
|
|
1,230 |
|
|
|
1.9 |
% |
|
|
(944 |
) |
|
|
(2.5 |
)% |
Other adjustments, net |
|
|
627 |
|
|
|
0.6 |
% |
|
|
(1,672 |
) |
|
|
(2.6 |
)% |
|
|
(1,424 |
) |
|
|
(3.7 |
)% |
Income tax expense |
|
$ |
45,898 |
|
|
|
44.0 |
% |
|
$ |
21,250 |
|
|
|
32.8 |
% |
|
$ |
10,493 |
|
|
|
27.7 |
% |
* Includes $0.6 million increase to the valuation allowance related to the remeasurement of deferred taxes due to the reduction in U.S. tax rate.
The components of deferred income tax assets and liabilities included in the Consolidated Balance Sheets are as follows:
|
|
December 31, |
|
|||||
(in thousands) |
|
2017 |
|
|
2016 |
|
||
Deferred tax assets: |
|
|
|
|
|
|
|
|
Tax credit carryforwards |
|
$ |
6,654 |
|
|
$ |
11,380 |
|
Pension, compensation, and other employee benefits |
|
|
15,173 |
|
|
|
22,868 |
|
Provisions for losses |
|
|
5,826 |
|
|
|
10,235 |
|
Net operating loss carryforward |
|
|
5,195 |
|
|
|
5,023 |
|
State income taxes |
|
|
2,502 |
|
|
|
3,790 |
|
Other deferred income tax assets |
|
|
2,796 |
|
|
|
5,020 |
|
Total deferred tax assets |
|
|
38,146 |
|
|
|
58,316 |
|
Valuation allowance |
|
|
(4,010 |
) |
|
|
(3,998 |
) |
Foreign deferred tax assets included above |
|
|
(2,396 |
) |
|
|
(1,972 |
) |
Net deferred tax assets |
|
|
31,740 |
|
|
|
52,346 |
|
Deferred tax liabilities: |
|
|
|
|
|
|
|
|
Property and equipment |
|
|
(10,530 |
) |
|
|
(3,299 |
) |
Deferred tax related to life insurance |
|
|
(3,556 |
) |
|
|
(5,642 |
) |
Goodwill and other intangible assets |
|
|
(4,299 |
) |
|
|
(4,535 |
) |
Other deferred income tax liabilities |
|
|
(463 |
) |
|
|
(557 |
) |
Total deferred tax liabilities |
|
|
(18,848 |
) |
|
|
(14,033 |
) |
Foreign deferred tax liabilities included above |
|
|
7,869 |
|
|
|
2,852 |
|
United States net deferred tax assets |
|
$ |
20,761 |
|
|
$ |
41,165 |
|
We use significant judgment in forming conclusions regarding the recoverability of our deferred tax assets and evaluate all available positive and negative evidence to determine if it is more-likely-than-not that the deferred tax assets will be realized. To the extent recovery does not appear likely, a valuation allowance must be recorded. We had gross deferred tax assets of $38.1 million as of December 31, 2017 and $58.3 million as of December 31, 2016. These deferred tax assets reflect the expected future tax benefits to be realized upon reversal of deductible temporary differences and the utilization of net operating loss and tax credit carryforwards.
As of December 31, 2017, foreign tax credit carryforwards were $0.4 million, of which $0.1 million are U.S. foreign tax credits and $0.3 million are United Kingdom foreign tax credits. The U.S. foreign tax credits are subject to a 10-year carryforward period and will expire in 2021. As of December 31, 2017, we had alternative minimum tax credit carryforwards of $6.2 million that will be fully utilized against future tax liabilities before becoming refundable as allowed under the Tax Act.
We had gross state and foreign net operating loss carryforwards of $68.4 million as of December 31, 2017 and $63.0 million as of December 31, 2016, for which we had deferred tax assets of $5.2 million as of December 31, 2017 and $5.0 million as of December 31, 2016. The state and foreign net operating loss carryforwards expire on various dates from 2018 through 2038.
As of December 31, 2017 and 2016, the valuation allowance was $4.0 million. During 2017, we had a $1.6 million decrease on German foreign net operating loss carryforwards, offset by a $0.3 million increase for the United Kingdom foreign tax credits (although subject to an indefinite carryforward period, do not meet the more likely-than-not threshold for recognition), a $0.5 million increase for the state net operating loss return to provision true up, a $0.6 million increase due to the remeasurement for the reduction in U.S. tax rate, and a $0.2 million increase in foreign exchange.
While we believe that the deferred tax assets, net of existing valuation allowances, will be utilized in future periods, there are inherent uncertainties regarding the ultimate realization of these assets. It is possible that the relative weight of positive and negative evidence regarding the realization of deferred tax assets may change, which could result in a material increase or decrease in our valuation allowance. Such a change could result in a material increase or decrease to income tax expense in the period the assessment was made.
We have not recorded deferred taxes for certain states or foreign withholding taxes on certain historical unremitted earnings of our subsidiaries located in Canada, the United Kingdom, and the Netherlands as we intend to reinvest those earnings in operations outside of the United States.
We exercise judgment in determining the income tax provision for positions taken on prior returns when the ultimate tax determination is uncertain. We classify liabilities associated with uncertain tax positions as non-current liabilities in the Consolidated Balance Sheets unless expected to be paid or released within one year. We had liabilities associated with uncertain tax positions, including interest and penalties, of $1.7 million as of December 31, 2017 and $2.7 million as of December 31, 2016. Uncertain tax positions, including interest and penalties, are classified as a component of income tax expense.
During 2017, we decreased the liability for continuing operations uncertain tax positions by $0.1 million due to lapse of statute and we increased accrued interest and penalties for continuing operations positions by $0.1 million. We expect $1.3 million of the continuing operations uncertain tax positions to be resolved or settled within the next twelve months and have classified this amount as a current liability.
During 2017, we released the liability for discontinued operations uncertain tax positions of $1.0 million, including $0.4 million in accrued interest and penalties, due to a statute expiration, which was recorded through discontinued operations. We had liabilities associated with discontinued operations uncertain tax positions of zero as of December 31, 2017 and $1.0 million as of December 31, 2016.
A reconciliation of the liabilities associated with uncertain tax positions (excluding interest and penalties) is as follows:
(in thousands) |
|
Continuing Operations |
|
|
Discontinued Operations |
|
|
Total |
|
|||
Balance at December 31, 2014 |
|
$ |
1,283 |
|
|
$ |
636 |
|
|
$ |
1,919 |
|
Additions for tax positions taken in prior years |
|
|
43 |
|
|
|
— |
|
|
|
43 |
|
Reductions for tax positions taken in prior years |
|
|
(666 |
) |
|
|
— |
|
|
|
(666 |
) |
Reductions for lapse of applicable statutes |
|
|
(353 |
) |
|
|
— |
|
|
|
(353 |
) |
Balance at December 31, 2015 |
|
|
307 |
|
|
|
636 |
|
|
|
943 |
|
Additions for tax positions taken in prior years |
|
|
1,295 |
|
|
|
— |
|
|
|
1,295 |
|
Reductions for lapse of applicable statutes |
|
|
(43 |
) |
|
|
— |
|
|
|
(43 |
) |
Balance at December 31, 2016 |
|
|
1,559 |
|
|
|
636 |
|
|
|
2,195 |
|
Additions for tax positions taken in prior years |
|
|
43 |
|
|
|
— |
|
|
|
43 |
|
Reductions for lapse of applicable statutes |
|
|
(177 |
) |
|
|
(636 |
) |
|
|
(813 |
) |
Balance at December 31, 2017 |
|
$ |
1,425 |
|
|
$ |
— |
|
|
$ |
1,425 |
|
We are subject to regular and recurring audits by taxing authorities in jurisdictions in which we operate or have operated in the past, including various foreign countries in addition to the United States, Canada, and the United Kingdom.
Our 2014 through 2017 U.S. federal tax years and various state tax years from 2013 through 2017 remain subject to income tax examinations by tax authorities. Tax years 2012 through 2017 remain subject to examination by various foreign taxing jurisdictions.
Cash paid for income taxes was $14.6 million during 2017, $14.1 million during 2016, and $10.1 million during 2015.
|
Note 17. Pension and Postretirement Benefits
Domestic Plans
We have frozen defined benefit pension plans held in trust for certain employees which we funded. We also maintain certain unfunded defined benefit pension plans which provide supplemental benefits to select management employees. These plans use traditional defined benefit formulas based on years of service and final average compensation. Funding policies provide that payments to defined benefit pension trusts shall be at least equal to the minimum funding required by applicable regulations.
We also have certain defined benefit postretirement plans that provide medical and life insurance for certain eligible employees, retirees, and dependents. The related postretirement benefit liabilities are recognized over the period that services are provided by employees. In addition, we retained the obligations for these benefits for retirees of certain sold businesses. While the plans have no funding requirements, we may fund the plans.
The components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) of our pension plans consist of the following:
|
|
December 31, |
|
|||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
Net periodic benefit cost: |
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
$ |
64 |
|
|
$ |
98 |
|
|
$ |
101 |
|
Interest cost |
|
|
803 |
|
|
|
1,032 |
|
|
|
1,018 |
|
Expected return on plan assets |
|
|
(176 |
) |
|
|
(256 |
) |
|
|
(380 |
) |
Recognized net actuarial loss |
|
|
433 |
|
|
|
423 |
|
|
|
492 |
|
Net periodic benefit cost |
|
|
1,124 |
|
|
|
1,297 |
|
|
|
1,231 |
|
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Net actuarial loss (gain) |
|
|
114 |
|
|
|
1 |
|
|
|
(963 |
) |
Reversal of amortization item: |
|
|
|
|
|
|
|
|
|
|
|
|
Net actuarial loss |
|
|
(433 |
) |
|
|
(423 |
) |
|
|
(492 |
) |
Total recognized in other comprehensive income (loss) |
|
|
(319 |
) |
|
|
(422 |
) |
|
|
(1,455 |
) |
Total recognized in net periodic benefit cost and other comprehensive income (loss) |
|
$ |
805 |
|
|
$ |
875 |
|
|
$ |
(224 |
) |
The components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) of our postretirement benefit plans consist of the following:
|
|
December 31, |
|
|||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
Net periodic benefit cost: |
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
$ |
92 |
|
|
$ |
99 |
|
|
$ |
152 |
|
Interest cost |
|
|
413 |
|
|
|
573 |
|
|
|
619 |
|
Amortization of prior service credit |
|
|
(431 |
) |
|
|
(503 |
) |
|
|
(552 |
) |
Recognized net actuarial loss |
|
|
164 |
|
|
|
295 |
|
|
|
528 |
|
Net periodic benefit cost |
|
|
238 |
|
|
|
464 |
|
|
|
747 |
|
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Net actuarial loss (gain) |
|
|
237 |
|
|
|
(790 |
) |
|
|
(1,248 |
) |
Prior service credit |
|
|
816 |
|
|
|
73 |
|
|
|
3 |
|
Reversal of amortization item: |
|
|
|
|
|
|
|
|
|
|
|
|
Net actuarial loss |
|
|
(164 |
) |
|
|
(295 |
) |
|
|
(528 |
) |
Prior service credit |
|
|
431 |
|
|
|
503 |
|
|
|
552 |
|
Total recognized in other comprehensive income (loss) |
|
|
1,320 |
|
|
|
(509 |
) |
|
|
(1,221 |
) |
Total recognized in net periodic benefit cost and other comprehensive income (loss) |
|
$ |
1,558 |
|
|
$ |
(45 |
) |
|
$ |
(474 |
) |
The following table indicates the funded status of the plans as of December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postretirement |
|
|||||
|
|
Funded Plans |
|
|
Unfunded Plans |
|
|
Benefit Plans |
|
|||||||||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||||
Change in benefit obligation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit obligation at beginning of year |
|
$ |
15,027 |
|
|
$ |
14,906 |
|
|
$ |
9,825 |
|
|
$ |
10,049 |
|
|
$ |
13,619 |
|
|
$ |
14,573 |
|
Service cost |
|
|
— |
|
|
|
— |
|
|
|
64 |
|
|
|
97 |
|
|
|
92 |
|
|
|
99 |
|
Interest cost |
|
|
492 |
|
|
|
629 |
|
|
|
311 |
|
|
|
403 |
|
|
|
413 |
|
|
|
573 |
|
Actuarial adjustments |
|
|
618 |
|
|
|
240 |
|
|
|
175 |
|
|
|
(221 |
) |
|
|
237 |
|
|
|
(790 |
) |
Plan amendments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
816 |
|
|
|
73 |
|
Benefits paid |
|
|
(697 |
) |
|
|
(748 |
) |
|
|
(518 |
) |
|
|
(503 |
) |
|
|
(1,370 |
) |
|
|
(909 |
) |
Benefit obligation at end of year |
|
|
15,440 |
|
|
|
15,027 |
|
|
|
9,857 |
|
|
|
9,825 |
|
|
|
13,807 |
|
|
|
13,619 |
|
Change in plan assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of plan assets at beginning of year |
|
|
10,416 |
|
|
|
10,479 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Actual return on plan assets |
|
|
855 |
|
|
|
273 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Company contributions |
|
|
1,016 |
|
|
|
412 |
|
|
|
518 |
|
|
|
503 |
|
|
|
1,370 |
|
|
|
909 |
|
Benefits paid |
|
|
(697 |
) |
|
|
(748 |
) |
|
|
(518 |
) |
|
|
(503 |
) |
|
|
(1,370 |
) |
|
|
(909 |
) |
Fair value of plan assets at end of year |
|
|
11,590 |
|
|
|
10,416 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Funded status at end of year |
|
$ |
(3,850 |
) |
|
$ |
(4,611 |
) |
|
$ |
(9,857 |
) |
|
$ |
(9,825 |
) |
|
$ |
(13,807 |
) |
|
$ |
(13,619 |
) |
The net amounts recognized in the Consolidated Balance Sheets under the caption “Pension and postretirement benefits” as of December 31 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postretirement |
|
|||||
|
|
Funded Plans |
|
|
Unfunded Plans |
|
|
Benefit Plans |
|
|||||||||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||||
Other current liabilities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
809 |
|
|
$ |
699 |
|
|
$ |
1,112 |
|
|
$ |
1,094 |
|
Non-current liabilities |
|
|
3,850 |
|
|
|
4,611 |
|
|
|
9,048 |
|
|
|
9,126 |
|
|
|
12,695 |
|
|
|
12,525 |
|
Net amount recognized |
|
$ |
3,850 |
|
|
$ |
4,611 |
|
|
$ |
9,857 |
|
|
$ |
9,825 |
|
|
$ |
13,807 |
|
|
$ |
13,619 |
|
Amounts recognized in AOCI as of December 31 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postretirement |
|
|
|
|
|
|
|
|
|
|||||
|
|
Funded Plans |
|
|
Unfunded Plans |
|
|
Benefit Plans |
|
|
Total |
|
|
Total |
|
|||||||||||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||||||
Net actuarial loss |
|
$ |
8,681 |
|
|
$ |
9,090 |
|
|
$ |
2,587 |
|
|
$ |
2,496 |
|
|
$ |
2,784 |
|
|
$ |
2,710 |
|
|
$ |
14,052 |
|
|
$ |
14,296 |
|
Prior service credit |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(351 |
) |
|
|
(1,598 |
) |
|
|
(351 |
) |
|
|
(1,598 |
) |
Subtotal |
|
|
8,681 |
|
|
|
9,090 |
|
|
|
2,587 |
|
|
|
2,496 |
|
|
|
2,433 |
|
|
|
1,112 |
|
|
|
13,701 |
|
|
|
12,698 |
|
Less tax effect |
|
|
(3,292 |
) |
|
|
(3,447 |
) |
|
|
(981 |
) |
|
|
(947 |
) |
|
|
(923 |
) |
|
|
(422 |
) |
|
|
(5,196 |
) |
|
|
(4,816 |
) |
Total |
|
$ |
5,389 |
|
|
$ |
5,643 |
|
|
$ |
1,606 |
|
|
$ |
1,549 |
|
|
$ |
1,510 |
|
|
$ |
690 |
|
|
$ |
8,505 |
|
|
$ |
7,882 |
|
The estimated net actuarial loss for the postretirement benefit plans that is expected to be amortized from AOCI into net periodic benefit cost in 2018 is approximately $0.2 million. The estimated prior service credit for the postretirement benefit plans that is expected to be amortized from AOCI into net periodic benefit credit in 2018 is approximately $0.2 million.
The estimated net actuarial loss that is expected to be amortized from AOCI into net periodic benefit cost in 2018 is approximately $0.1 million for the unfunded benefit plans and $0.4 million for the funded benefit plans.
The fair value of the domestic plans’ assets by asset class are as follows:
|
|
|
|
|
|
Fair Value Measurements at December 31, 2017 |
|
|||||||||
|
|
|
|
|
|
Quoted Prices in Active Markets |
|
|
Significant Other Observable Inputs |
|
|
Significant Unobservable Inputs |
|
|||
(in thousands) |
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
||||
Domestic pension plans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed income securities |
|
$ |
5,787 |
|
|
$ |
5,787 |
|
|
$ |
— |
|
|
$ |
— |
|
Equity securities |
|
|
5,390 |
|
|
|
5,390 |
|
|
|
— |
|
|
|
— |
|
Cash |
|
|
214 |
|
|
|
214 |
|
|
|
— |
|
|
|
— |
|
Other |
|
|
199 |
|
|
|
— |
|
|
|
199 |
|
|
|
— |
|
Total |
|
$ |
11,590 |
|
|
$ |
11,391 |
|
|
$ |
199 |
|
|
$ |
— |
|
|
|
|
|
|
|
Fair Value Measurements at December 31, 2016 |
|
|||||||||
|
|
|
|
|
|
Quoted Prices in Active Markets |
|
|
Significant Other Observable Inputs |
|
|
Significant Unobservable Inputs |
|
|||
(in thousands) |
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
||||
Domestic pension plans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed income securities |
|
$ |
5,352 |
|
|
$ |
5,352 |
|
|
$ |
— |
|
|
$ |
— |
|
Equity securities |
|
|
4,580 |
|
|
|
4,580 |
|
|
|
— |
|
|
|
— |
|
Cash |
|
|
280 |
|
|
|
280 |
|
|
|
— |
|
|
|
— |
|
Other |
|
|
204 |
|
|
|
— |
|
|
|
204 |
|
|
|
— |
|
Total |
|
$ |
10,416 |
|
|
$ |
10,212 |
|
|
$ |
204 |
|
|
$ |
— |
|
We employ a total return investment approach whereby a mix of equities and fixed income securities is used to maximize the long-term return of plan assets for a prudent level of risk. Risk tolerance is established through careful consideration of plan liabilities, plan funded status, and corporate financial condition. The investment portfolio contains a diversified blend of equity and fixed income securities. Furthermore, equity securities are diversified across U.S. and non-U.S. stocks, as well as growth and value. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews and annual liability measurements.
We utilize a building-block approach in determining the long-term expected rate of return on plan assets. Historical markets are studied and long-term historical relationships between equity securities and fixed income securities are preserved consistent with the widely accepted capital market principle that assets with higher volatility generate a greater return over the long run. Current market factors such as inflation and interest rates are evaluated before long-term capital market assumptions are determined. The long-term portfolio return also considers diversification and rebalancing. Peer data and historical returns are reviewed relative to our assumed rates for reasonableness and appropriateness.
The following pension and postretirement benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
(in thousands) |
|
Funded Plans |
|
|
Unfunded Plans |
|
|
Postretirement Benefit Plans |
|
|||
2018 |
|
$ |
1,434 |
|
|
$ |
823 |
|
|
$ |
1,132 |
|
2019 |
|
$ |
927 |
|
|
$ |
738 |
|
|
$ |
1,127 |
|
2020 |
|
$ |
997 |
|
|
$ |
740 |
|
|
$ |
1,100 |
|
2021 |
|
$ |
921 |
|
|
$ |
725 |
|
|
$ |
1,066 |
|
2022 |
|
$ |
990 |
|
|
$ |
709 |
|
|
$ |
1,039 |
|
2023-2027 |
|
$ |
4,859 |
|
|
$ |
3,259 |
|
|
$ |
4,685 |
|
Foreign Pension Plans
Certain of our foreign operations also maintain defined benefit pension plans held in trust for certain employees which are funded by the companies, and unfunded defined benefit pension plans providing supplemental benefits to select management employees. These plans use traditional defined benefit formulas based on years of service and final average compensation. Funding policies provide that payments to defined benefit pension trusts shall be at least equal to the minimum funding required by applicable regulations. The components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) included the following:
|
|
December 31, |
|
|||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
Net periodic benefit cost: |
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
$ |
530 |
|
|
$ |
488 |
|
|
$ |
503 |
|
Interest cost |
|
|
492 |
|
|
|
488 |
|
|
|
505 |
|
Expected return on plan assets |
|
|
(602 |
) |
|
|
(558 |
) |
|
|
(583 |
) |
Recognized net actuarial loss |
|
|
155 |
|
|
|
162 |
|
|
|
160 |
|
Settlement |
|
|
777 |
|
|
|
— |
|
|
|
— |
|
Net periodic benefit cost |
|
|
1,352 |
|
|
|
580 |
|
|
|
585 |
|
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Net actuarial loss |
|
|
(106 |
) |
|
|
158 |
|
|
|
182 |
|
Reversal of amortization of net actuarial loss |
|
|
(155 |
) |
|
|
(162 |
) |
|
|
(160 |
) |
Total recognized in other comprehensive income (loss) |
|
|
(261 |
) |
|
|
(4 |
) |
|
|
22 |
|
Total recognized in net periodic benefit cost and other comprehensive income |
|
$ |
1,091 |
|
|
$ |
576 |
|
|
$ |
607 |
|
The following table represents the funded status of the plans as of December 31:
|
|
Funded Plans |
|
|
Unfunded Plans |
|
||||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||
Change in benefit obligation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit obligation at beginning of year |
|
$ |
10,488 |
|
|
$ |
9,744 |
|
|
$ |
2,486 |
|
|
$ |
2,470 |
|
Service cost |
|
|
530 |
|
|
|
488 |
|
|
|
— |
|
|
|
— |
|
Interest cost |
|
|
406 |
|
|
|
400 |
|
|
|
87 |
|
|
|
87 |
|
Actuarial adjustments |
|
|
658 |
|
|
|
395 |
|
|
|
(54 |
) |
|
|
105 |
|
Benefits paid |
|
|
(3,231 |
) |
|
|
(818 |
) |
|
|
(182 |
) |
|
|
(177 |
) |
Translation adjustment |
|
|
670 |
|
|
|
279 |
|
|
|
245 |
|
|
|
1 |
|
Benefit obligation at end of year |
|
|
9,521 |
|
|
|
10,488 |
|
|
|
2,582 |
|
|
|
2,486 |
|
Change in plan assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of plan assets at beginning of year |
|
|
10,576 |
|
|
|
9,705 |
|
|
|
— |
|
|
|
— |
|
Actual return on plan assets |
|
|
764 |
|
|
|
617 |
|
|
|
— |
|
|
|
— |
|
Company contributions |
|
|
710 |
|
|
|
795 |
|
|
|
182 |
|
|
|
177 |
|
Benefits paid |
|
|
(3,231 |
) |
|
|
(818 |
) |
|
|
(182 |
) |
|
|
(177 |
) |
Translation adjustment |
|
|
674 |
|
|
|
277 |
|
|
|
— |
|
|
|
— |
|
Fair value of plan assets at end of year |
|
|
9,493 |
|
|
|
10,576 |
|
|
|
— |
|
|
|
— |
|
Funded status at end of year |
|
$ |
(28 |
) |
|
$ |
88 |
|
|
$ |
(2,582 |
) |
|
$ |
(2,486 |
) |
The net amounts recognized in the Consolidated Balance Sheets under the caption “Pension and postretirement benefits” as of December 31 were as follows:
|
|
Funded Plans |
|
|
Unfunded Plans |
|
||||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||
Non-current assets |
|
$ |
(15 |
) |
|
$ |
(88 |
) |
|
$ |
— |
|
|
$ |
— |
|
Other current liabilities |
|
|
— |
|
|
|
— |
|
|
|
188 |
|
|
|
170 |
|
Non-current liabilities |
|
|
43 |
|
|
|
— |
|
|
|
2,394 |
|
|
|
2,316 |
|
Net amount recognized |
|
$ |
28 |
|
|
$ |
(88 |
) |
|
$ |
2,582 |
|
|
$ |
2,486 |
|
Net actuarial losses for the foreign funded plans recognized in AOCI were $2.5 million ($1.8 million after-tax) as of December 31, 2017 and $3.3 million ($2.5 million after-tax) as of December 31, 2016. Net actuarial losses for the foreign unfunded plans recognized in AOCI were $0.7 million ($0.5 million after-tax) as of December 31, 2017 and $0.4 million ($0.3 million after-tax) as of December 31, 2016.
The fair value information related to the foreign pension plans’ assets is summarized in the following tables:
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using |
|
|||||||||
(in thousands) |
|
December 31, 2017 |
|
|
Quoted Prices in Active Markets (Level 1) |
|
|
Significant Other Observable Inputs (Level 2) |
|
|
Significant Unobserved Inputs (Level 3) |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed income securities |
|
$ |
4,414 |
|
|
$ |
4,414 |
|
|
$ |
— |
|
|
$ |
— |
|
Equity securities |
|
|
4,889 |
|
|
|
4,466 |
|
|
|
423 |
|
|
|
— |
|
Other |
|
|
190 |
|
|
|
190 |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
9,493 |
|
|
$ |
9,070 |
|
|
$ |
423 |
|
|
$ |
— |
|
|
|
|
|
|
|
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 Unobserved Inputs (Level 3) |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed income securities |
|
$ |
4,082 |
|
|
$ |
4,082 |
|
|
$ |
— |
|
|
$ |
— |
|
Equity securities |
|
|
4,518 |
|
|
|
4,130 |
|
|
|
388 |
|
|
|
— |
|
Other |
|
|
1,976 |
|
|
|
1,976 |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
10,576 |
|
|
$ |
10,188 |
|
|
$ |
388 |
|
|
$ |
— |
|
The following payments, which reflect expected future service, as appropriate, are expected to be paid:
(in thousands) |
|
Funded Plans |
|
|
Unfunded Plans |
|
||
2018 |
|
$ |
365 |
|
|
$ |
191 |
|
2019 |
|
$ |
376 |
|
|
$ |
190 |
|
2020 |
|
$ |
378 |
|
|
$ |
190 |
|
2021 |
|
$ |
396 |
|
|
$ |
190 |
|
2022 |
|
$ |
496 |
|
|
$ |
189 |
|
2023-2027 |
|
$ |
2,499 |
|
|
$ |
935 |
|
Information for Pension Plans with an Accumulated Benefit Obligation in Excess of Plan Assets
The accumulated benefit obligations in excess of plan assets as of December 31 were as follows:
|
|
Domestic Plans |
|
|||||||||||||
|
|
Funded Plans |
|
|
Unfunded Plans |
|
||||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||
Projected benefit obligation |
|
$ |
15,440 |
|
|
$ |
15,027 |
|
|
$ |
9,857 |
|
|
$ |
9,825 |
|
Accumulated benefit obligation |
|
$ |
15,440 |
|
|
$ |
15,027 |
|
|
$ |
9,826 |
|
|
$ |
9,737 |
|
Fair value of plan assets |
|
$ |
11,590 |
|
|
$ |
10,416 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
Foreign Plans |
|
|||||||||||||
|
|
Funded Plans |
|
|
Unfunded Plans |
|
||||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||
Projected benefit obligation |
|
$ |
9,521 |
|
|
$ |
10,488 |
|
|
$ |
2,582 |
|
|
$ |
2,486 |
|
Accumulated benefit obligation |
|
$ |
8,819 |
|
|
$ |
9,906 |
|
|
$ |
2,582 |
|
|
$ |
2,486 |
|
Fair value of plan assets |
|
$ |
9,493 |
|
|
$ |
10,576 |
|
|
$ |
— |
|
|
$ |
— |
|
Contributions
In aggregate for both the domestic and foreign plans, we anticipate contributing $1.1 million to the funded pension plans, $1.0 million to the unfunded pension plans, and $1.1 million to the postretirement benefit plans in 2018.
Weighted-Average Assumptions
Weighted-average assumptions used to determine benefit obligations as of December 31 were as follows:
|
|
Domestic Plans |
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
Funded Plans |
|
|
Unfunded Plans |
|
|
Postretirement Benefit Plans |
|
|
Foreign Plans |
|
||||||||||||||||||||
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||||||
Discount rate |
|
|
3.63 |
% |
|
|
4.12 |
% |
|
|
3.55 |
% |
|
|
3.99 |
% |
|
|
3.59 |
% |
|
|
4.08 |
% |
|
|
3.15 |
% |
|
|
3.52 |
% |
Rate of compensation increase |
|
N/A |
|
|
N/A |
|
|
|
3.00 |
% |
|
|
3.00 |
% |
|
N/A |
|
|
N/A |
|
|
|
2.26 |
% |
|
|
2.34 |
% |
Weighted-average assumptions used to determine net periodic benefit costs as of December 31 were as follows:
|
|
Domestic Plans |
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
Funded Plans |
|
|
Unfunded Plans |
|
|
Postretirement Benefit Plans |
|
|
Foreign Plans |
|
||||||||||||||||||||
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||||||
Discount rate |
|
|
4.07 |
% |
|
|
4.33 |
% |
|
|
3.99 |
% |
|
|
4.25 |
% |
|
|
4.08 |
% |
|
|
4.30 |
% |
|
|
3.71 |
% |
|
|
3.77 |
% |
Expected return on plan assets |
|
|
5.50 |
% |
|
|
2.25 |
% |
|
N/A |
|
|
N/A |
|
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
5.09 |
% |
|
|
4.53 |
% |
||
Rate of compensation increase |
|
N/A |
|
|
N/A |
|
|
|
3.00 |
% |
|
|
3.00 |
% |
|
N/A |
|
|
N/A |
|
|
|
2.26 |
% |
|
|
2.34 |
% |
The assumed health care cost trend rate used in measuring the December 31, 2017 accumulated postretirement benefit obligation was 7.5%, declining one-third percent each year to the ultimate rate of 4.5% by the year 2026 and remaining at that level thereafter. The assumed health care cost trend rate used in measuring the December 31, 2016 accumulated postretirement benefit obligation was 7.0%, declining one-quarter percent each year to the ultimate rate of 4.5% by the year 2026 and remaining at that level thereafter.
A one-percentage-point increase in the assumed health care cost trend rate for each year would increase the accumulated postretirement benefit obligation as of December 31, 2017 by approximately $1.4 million and the total of service and interest cost components by approximately $0.1 million. A one-percentage-point decrease in the assumed health care cost trend rate for each year would decrease the accumulated postretirement benefit obligation as of December 31, 2017 by approximately $1.1 million and the total of service and interest cost components by approximately $0.1 million.
Multi-employer Plans
We contribute to defined benefit pension plans under the terms of collective-bargaining agreements that cover our union-represented employees. The financial risks of participating in these multi-employer pension plans generally include the fact that assets contributed to the plan by one employer may be used to provide benefits to employees of other participating employers. Furthermore, if a participating employer ceases to contribute to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. In addition, if we were to discontinue participating in some of our multi-employer pension plans, we may be required to pay those plans a withdrawal liability amount based on the underfunded status of the plan. We also contribute to defined contribution plans pursuant to collective-bargaining agreements, which are generally not subject to the funding risks inherent in defined benefit pension plans. The overall level of contributions to our multi-employer plans may significantly vary from year to year based on the demand for union-represented labor to support our operations. We do not have any minimum contribution requirements for future periods pursuant to our collective-bargaining agreements for individually significant multi-employer plans.
Our participation in multi-employer pension plans for 2017 is outlined in the following table. Unless otherwise noted, the most recent Pension Protection Act zone status available in 2017 and 2016 relates to the plan’s year end as of December 31, 2016 and 2015, respectively, and is based on information received from the plan. Among other factors, plans in the red zone are generally less than 65% funded, plans in the yellow zone are less than 80% funded, and plans in the green zone are at least 80% funded. The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan or a rehabilitation plan is either pending or has been implemented.
|
|
|
|
Plan |
|
|
Pension Protection Act Zone Status |
|
FIP/RP Status Pending/ Implemented |
|
Viad Contributions |
|
|
Surcharge Paid |
|
Expiration Date of Collective- Bargaining Agreement(s) |
||||||||||||
(in thousands) |
|
EIN |
|
No. |
|
|
2017 |
|
2016 |
|
|
|
2017 |
|
|
2016 |
|
|
2015 |
|
|
|
|
|
||||
Pension Fund: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Western Conference of Teamsters Pension Plan |
|
91-6145047 |
|
|
1 |
|
|
Green |
|
Green |
|
No |
|
$ |
7,809 |
|
|
$ |
6,684 |
|
|
$ |
5,632 |
|
|
No |
|
3/31/2020 |
Southern California Local 831—Employer Pension Fund(1) |
|
95-6376874 |
|
|
1 |
|
|
Green |
|
Green |
|
No |
|
|
3,087 |
|
|
|
2,805 |
|
|
|
2,485 |
|
|
No |
|
8/31/2019 |
Chicago Regional Council of Carpenters Pension Fund |
|
36-6130207 |
|
|
1 |
|
|
Green |
|
Yellow |
|
Yes |
|
|
2,390 |
|
|
|
2,532 |
|
|
|
1,887 |
|
|
No |
|
5/31/2019 |
IBEW Local Union No 357 Pension Plan A |
|
88-6023284 |
|
|
1 |
|
|
Green |
|
Green |
|
No |
|
|
1,682 |
|
|
|
1,402 |
|
|
|
1,150 |
|
|
No |
|
6/16/2018 |
Electrical Contractors Assoc. Chicago Local Union 134, IBEW Joint Pension Trust of Chicago Plan #2 |
|
51-6030753 |
|
|
2 |
|
|
Green |
|
Green |
|
No |
|
|
1,099 |
|
|
|
845 |
|
|
|
1,190 |
|
|
No |
|
6/6/2021 |
Central States, Southeast and Southwest Areas Pension Plan |
|
36-6044243 |
|
|
1 |
|
|
Red |
|
Red |
|
Yes |
|
|
1,060 |
|
|
|
1,151 |
|
|
|
948 |
|
|
No |
|
12/31/2018 |
Southern California IBEW-NECA Pension Fund |
|
95-6392774 |
|
|
1 |
|
|
Yellow |
|
Yellow |
|
Yes |
|
|
905 |
|
|
|
701 |
|
|
|
835 |
|
|
Yes |
|
continuous |
Southwest Carpenters Pension Trust |
|
95-6042875 |
|
|
1 |
|
|
Green |
|
Green |
|
No |
|
|
883 |
|
|
|
791 |
|
|
|
750 |
|
|
No |
|
6/30/2018 |
New England Teamsters & Trucking Industry Pension |
|
04-6372430 |
|
|
1 |
|
|
Red |
|
Red |
|
Yes |
|
|
772 |
|
|
|
552 |
|
|
|
381 |
|
|
No |
|
3/31/2022 |
Machinery Movers Riggers & Mach Erect Local 136 Supplemental Retirement Plan(1) |
|
36-1416355 |
|
|
11 |
|
|
Red |
|
Red |
|
Yes |
|
|
719 |
|
|
|
1,203 |
|
|
|
502 |
|
|
Yes |
|
6/30/2019 |
Sign Pictorial & Display Industry Pension Plan(1) |
|
94-6278490 |
|
|
1 |
|
|
Green |
|
Green |
|
No |
|
|
654 |
|
|
|
526 |
|
|
|
541 |
|
|
No |
|
3/31/2018 |
All other funds(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,900 |
|
|
|
3,585 |
|
|
|
4,259 |
|
|
|
|
|
Total contributions to defined benefit plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,960 |
|
|
|
22,777 |
|
|
|
20,560 |
|
|
|
|
|
Total contributions to other plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,613 |
|
|
|
2,995 |
|
|
|
1,428 |
|
|
|
|
|
Total contributions to multi-employer plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
26,573 |
|
|
$ |
25,772 |
|
|
$ |
21,988 |
|
|
|
|
|
(1) |
We contributed more than 5% of total plan contributions for the 2016 and 2015 plan years based on the plans’ Form 5500s. |
(2) |
Represents participation in 35 pension funds during 2017. |
Other Employee Benefits
We match U.S. employee contributions to the 401(k) plan with shares of our common stock held in treasury up to 100% of the first 3% of a participant’s salary plus 50% of the next 2%. The expense associated with our match was $4.2 million for 2017, $3.9 million for 2016, and $3.7 million for 2015.
|
Note 18. Restructuring Charges
GES Consolidation
We have taken certain restructuring actions designed to reduce our cost structure primarily within GES, as well as the elimination of certain positions at the corporate office. We implemented a strategic reorganization plan in order to consolidate the separate business units within GES U.S. We also consolidated facilities and streamlined our operations in the U.S., the United Kingdom, and Germany. As a result, we recorded restructuring charges in 2017, 2016, and 2015, primarily consisting of severance and related benefits as a result of workforce reductions and charges related to the consolidation and downsizing of facilities representing the remaining operating lease obligations (net of estimated sublease income) and related costs.
Other Restructurings
We recorded restructuring charges in connection with the consolidation of certain support functions at our corporate headquarters and certain reorganization activities within Pursuit. These charges primarily consist of severance and related benefits due to headcount reductions and charges related to the downsizing of facilities.
Changes to the restructuring liability by major restructuring activity are as follows:
|
|
GES Consolidation |
|
|
Other Restructurings |
|
|
|
|
|
||||||
(in thousands) |
|
Severance & Employee Benefits |
|
|
Facilities |
|
|
Severance & Employee Benefits |
|
|
Total |
|
||||
Balance at December 31, 2014 |
|
$ |
543 |
|
|
$ |
1,161 |
|
|
$ |
240 |
|
|
$ |
1,944 |
|
Restructuring charges |
|
|
1,767 |
|
|
|
587 |
|
|
|
602 |
|
|
|
2,956 |
|
Cash payments |
|
|
(1,514 |
) |
|
|
(457 |
) |
|
|
(601 |
) |
|
|
(2,572 |
) |
Adjustment to liability |
|
|
(45 |
) |
|
|
— |
|
|
|
(7 |
) |
|
|
(52 |
) |
Balance at December 31, 2015 |
|
|
751 |
|
|
|
1,291 |
|
|
|
234 |
|
|
|
2,276 |
|
Restructuring charges |
|
|
3,693 |
|
|
|
759 |
|
|
|
731 |
|
|
|
5,183 |
|
Cash payments |
|
|
(2,170 |
) |
|
|
(1,150 |
) |
|
|
(546 |
) |
|
|
(3,866 |
) |
Adjustment to liability |
|
|
— |
|
|
|
192 |
|
|
|
(3 |
) |
|
|
189 |
|
Balance at December 31, 2016 |
|
|
2,274 |
|
|
|
1,092 |
|
|
|
416 |
|
|
|
3,782 |
|
Restructuring charges |
|
|
442 |
|
|
|
265 |
|
|
|
297 |
|
|
|
1,004 |
|
Cash payments |
|
|
(1,165 |
) |
|
|
(550 |
) |
|
|
(538 |
) |
|
|
(2,253 |
) |
Adjustment to liability |
|
|
— |
|
|
|
— |
|
|
|
16 |
|
|
|
16 |
|
Balance at December 31, 2017 |
|
$ |
1,551 |
|
|
$ |
807 |
|
|
$ |
191 |
|
|
$ |
2,549 |
|
As of December 31, 2017, the liabilities related to severance and employee benefits are expected to be paid by the end of 2018. Additionally, the liability related to future lease payments will be paid over the remaining lease terms for GES. Refer to Note 22 – Segment Information, for information regarding restructuring charges by segment.
|
Note 19. Leases and Other
We entered into operating leases for the use of certain of our offices, equipment, and other facilities. These leases expire over periods up to 40 years. Leases which expire are generally renewed or replaced by similar leases. Some leases contain scheduled rental increases accounted for on a straight-line basis.
As of December 31, 2017, our future minimum rental payments and related sublease rentals receivable with respect to non-cancelable operating leases with terms in excess of one year were as follows:
(in thousands) |
|
Rental Payments |
|
|
Receivable Under Subleases |
|
||
2018 |
|
$ |
23,503 |
|
|
$ |
2,627 |
|
2019 |
|
|
20,299 |
|
|
|
2,384 |
|
2020 |
|
|
17,265 |
|
|
|
2,209 |
|
2021 |
|
|
8,812 |
|
|
|
2,267 |
|
2022 |
|
|
5,555 |
|
|
|
2,195 |
|
Thereafter |
|
|
81,135 |
|
|
|
3,657 |
|
Total |
|
$ |
156,569 |
|
|
$ |
15,339 |
|
Net rent expense under operating leases consisted of the following:
|
|
December 31, |
|
|||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
Minimum rentals |
|
$ |
56,575 |
|
|
$ |
48,465 |
|
|
$ |
41,564 |
|
Sublease rentals |
|
|
(1,525 |
) |
|
|
(2,831 |
) |
|
|
(3,457 |
) |
Total rentals, net |
|
$ |
55,050 |
|
|
$ |
45,634 |
|
|
$ |
38,107 |
|
The aggregate annual maturities and the related amounts representing interest on capital lease obligations are included in Note 11 – Debt and Capital Lease Obligations.
As of December 31, 2017, we had aggregate purchase obligations of $38.1 million related to various licensing agreements, consulting and other contracted services.
|
Note 20. Litigation, Claims, Contingencies, and Other
We are plaintiffs or defendants to various actions, proceedings, and pending claims, some of which involve, or may involve, compensatory, punitive, or other damages. Litigation is subject to many uncertainties and it is possible that some of the legal actions, proceedings, or claims could be decided against us. Although the amount of liability as of December 31, 2017 with respect to these matters is not ascertainable, we believe that any resulting liability, after taking into consideration amounts already provided for and insurance coverage, will not have a material effect on our business, financial position, or results of operations.
We are subject to various U.S. federal, state, and foreign laws and regulations governing the prevention of pollution and the protection of the environment in the jurisdictions in which we have or had operations. If we fail to comply with these environmental laws and regulations, civil and criminal penalties could be imposed and we could become subject to regulatory enforcement actions in the form of injunctions and cease and desist orders. As is the case with many companies, we also face exposure to actual or potential claims and lawsuits involving environmental matters relating to our past operations. As of December 31, 2017, we had recorded environmental remediation liabilities of $2.4 million related to previously sold operations. Although we are a party to certain environmental disputes, we believe that any resulting liabilities, after taking into consideration amounts already provided for and insurance coverage, will not have a material effect on our financial position or results of operations.
As of December 31, 2017, on behalf of our subsidiaries, we had certain obligations under guarantees to third parties. These guarantees are not subject to liability recognition in the consolidated financial statements and relate to leased facilities entered into by our subsidiary operations. We would generally be required to make payments to the respective third parties under these guarantees in the event that the related subsidiary could not meet its own payment obligations. The maximum potential amount of future payments that we would be required to make under all guarantees existing as of December 31, 2017 would be $19.3 million. These guarantees relate to our leased facilities through October 2027. There are no recourse provisions that would enable us to recover from third parties any payments made under the guarantees. Furthermore, there are no collateral or similar arrangements whereby we could recover payments.
A significant number of our employees are unionized and we are a party to approximately 100 collective-bargaining agreements, with approximately one-third requiring renegotiation each year. If we are unable to reach an agreement with a union during the collective-bargaining process, the union may call for a strike or work stoppage, which may, under certain circumstances, adversely impact our business and results of operations. We believe that relations with our employees are satisfactory and that collective-bargaining agreements expiring in 2018 will be renegotiated in the ordinary course of business without having a material adverse effect on our operations. We entered into showsite and warehouse agreements with the Chicago Teamsters Local 727, effective January 1, 2014, and those agreements contain provisions that allow the parties to re-open negotiation of the agreements on pension-related issues. We are in informal discussions regarding those issues with all relevant parties to resolve those issues in a manner that will be reasonable and equitable to employees, customers, and shareholders. Although our labor relations are currently stable, disruptions pending the outcome of the Chicago Teamsters Local 727 negotiations could occur, as they could with any collective-bargaining agreement negotiation, with the possibility of an adverse impact on the operating results of GES.
Our business contributes to various multi-employer pension plans based on obligations arising under collective-bargaining agreements covering our union-represented employees. Based upon the information available from plan administrators, we believe that several of these multi-employer plans are underfunded. The Pension Protection Act of 2006 requires pension plans underfunded at certain levels to reduce, over defined time periods, the underfunded status. In addition, under current laws, the termination of a plan, or a voluntary withdrawal from a plan by us, or a shrinking contribution base to a plan as a result of the insolvency or withdrawal of other contributing employers to such plan, would require us to make payments to such plan for our proportionate share of the plan’s unfunded vested liabilities. As of December 31, 2017, the amount of additional funding, if any, that we would be required to make related to multi-employer pension plans is not ascertainable.
We are self-insured up to certain limits for workers’ compensation, employee health benefits, automobile, product and general liability, and property loss claims. The aggregate amount of insurance liabilities (up to our retention limit) related to our continuing operations was $19.1 million as of December 31, 2017 which includes $13.8 million related to workers’ compensation liabilities, and $5.3 million related to general/auto liability claims. We have also retained and provided for certain insurance liabilities in conjunction with previously sold businesses of $2.9 million as of December 31, 2017, related to workers’ compensation liabilities. Provisions for losses for claims incurred, including estimated claims incurred but not yet reported, are made based on our historical experience, claims frequency, and other factors. A change in the assumptions used could result in an adjustment to recorded liabilities. We have purchased insurance for amounts in excess of the self-insured levels, which generally range from $0.2 million to $0.5 million on a per claim basis. We do not maintain a self-insured retention pool fund as claims are paid from current cash resources at the time of settlement. Our net cash payments in connection with these insurance liabilities were $5.5 million for 2017, $5.0 million for 2016, and $5.6 million for 2015.
In addition, as of December 31, 2017, we have recorded insurance liabilities of $10.4 million related to continuing operations, which represents the amount for which we remain the primary obligor after self-insured insurance limits, without taking into consideration the above-referenced insurance coverage. Of this total, $6.9 million related to workers’ compensation liabilities and $3.5 million related to general/auto liability claims which are recorded in other deferred items and liabilities in the Consolidated Balance Sheets with a corresponding receivable in other investments.
|
Note 21. Redeemable Noncontrolling Interest
On November 3, 2017, we acquired the controlling interest (54.5% of the common stock) in Esja, a private corporation in Reykjavik, Iceland, which is developing and will operate a new FlyOver Iceland attraction.
The Esja acquisition contains a put option that gives the minority Esja shareholders the right to sell (or “put”) their Esja shares to us based on a multiple of 5.0x EBITDA as calculated on the trailing 12 months from the most recently completed quarter before the put option exercise. The put option is only exercisable after 36 months of business operation (the “Reference Date”) and if the FlyOver Iceland attraction has earned a minimum of €3.25 million in unadjusted EBITDA during the most recent fiscal year and during the trailing 12-month period prior to exercise (the “Put Option Condition”). The put option is exercisable during a period of 12 months following the Reference Date (the “Option Period”) and if the Put Option Condition has been met. If the Put Option Condition has not been met during the first Option Period, the Reference Date will be extended for an additional 12 months up to three times. If after 72 months, the FlyOver Iceland attraction has not achieved the Put Option Condition, the put option expires. If the Put Option Condition is met during any of the Option Periods, yet the shares are not exercised prior to the end of the 12-month Option Period, the put option will expire.
The noncontrolling interests’ carrying value is determined by the fair market value at acquisition and the subsequent noncontrolling interests’ share of net income or loss. This value is benchmarked against the redemption value of the sellers’ put option. The carrying value is adjusted to the latter, provided that it does not fall below the initial carrying values, as determined by the purchase price allocation. We have made a policy election to reflect any changes caused by such an adjustment in retained earnings, rather than in current earnings.
Changes in redeemable noncontrolling interests are as follows:
(in thousands) |
|
|
|
|
Balance at December 31, 2016 |
|
$ |
— |
|
Redeemable noncontrolling interest related to 2017 acquisition |
|
|
6,735 |
|
Adjustment to the redemption value |
|
|
(30 |
) |
Foreign currency translation adjustment |
|
|
(57 |
) |
Balance at December 31, 2017 |
|
$ |
6,648 |
|
|
Note 22. Segment Information
We measure the profit and performance of our operations on the basis of segment operating income which excludes restructuring charges and impairment charges and recoveries. Intersegment sales are eliminated in consolidation and intersegment transfers are not significant. Corporate activities include expenses not allocated to operations. Depreciation and amortization and share-based compensation expense are the only significant non-cash items for the reportable segments.
Our reportable segments, with reconciliations to consolidated totals, are as follows:
|
|
|
|
|||||||||
|
|
Year Ended December 31, |
|
|||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
GES: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
$ |
872,154 |
|
|
$ |
826,408 |
|
|
$ |
720,882 |
|
International |
|
|
282,712 |
|
|
|
248,503 |
|
|
|
272,634 |
|
Intersegment eliminations |
|
|
(21,769 |
) |
|
|
(20,172 |
) |
|
|
(16,638 |
) |
Total GES |
|
|
1,133,097 |
|
|
|
1,054,739 |
|
|
|
976,878 |
|
Pursuit |
|
|
173,868 |
|
|
|
153,364 |
|
|
|
112,170 |
|
Corporate eliminations (1) |
|
|
— |
|
|
|
(3,133 |
) |
|
|
— |
|
Total revenue |
|
$ |
1,306,965 |
|
|
$ |
1,204,970 |
|
|
$ |
1,089,048 |
|
Segment operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
GES: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
$ |
34,494 |
|
|
$ |
40,524 |
|
|
$ |
14,563 |
|
International |
|
|
15,475 |
|
|
|
9,699 |
|
|
|
12,211 |
|
Total GES |
|
|
49,969 |
|
|
|
50,223 |
|
|
|
26,774 |
|
Pursuit |
|
|
47,082 |
|
|
|
35,705 |
|
|
|
27,810 |
|
Segment operating income |
|
|
97,051 |
|
|
|
85,928 |
|
|
|
54,584 |
|
Corporate eliminations (1) |
|
|
67 |
|
|
|
(743 |
) |
|
|
— |
|
Corporate activities |
|
|
(12,877 |
) |
|
|
(10,322 |
) |
|
|
(9,720 |
) |
Operating income |
|
|
84,241 |
|
|
|
74,863 |
|
|
|
44,864 |
|
Interest income |
|
|
319 |
|
|
|
1,165 |
|
|
|
658 |
|
Interest expense |
|
|
(8,304 |
) |
|
|
(5,898 |
) |
|
|
(4,535 |
) |
Restructuring recoveries (charges): |
|
|
|
|
|
|
|
|
|
|
|
|
GES U.S. |
|
|
354 |
|
|
|
(2,893 |
) |
|
|
(541 |
) |
GES International |
|
|
(1,061 |
) |
|
|
(1,559 |
) |
|
|
(1,813 |
) |
Pursuit |
|
|
(86 |
) |
|
|
(171 |
) |
|
|
(200 |
) |
Corporate |
|
|
(211 |
) |
|
|
(560 |
) |
|
|
(402 |
) |
Impairment recoveries (charges): |
|
|
|
|
|
|
|
|
|
|
|
|
Pursuit |
|
|
29,098 |
|
|
|
(218 |
) |
|
|
(96 |
) |
Income from continuing operations before income taxes |
|
$ |
104,350 |
|
|
$ |
64,729 |
|
|
$ |
37,935 |
|
(1) |
Corporate eliminations during 2017 represent the elimination of depreciation expense recorded by Pursuit associated with previously eliminated intercompany profit realized by GES for renovations to Pursuit’s Banff Gondola. Corporate eliminations recorded during 2016 represent the elimination of intercompany revenue and profit realized by GES for work completed on renovations to Pursuit’s Banff Gondola. |
|
|
December 31, |
|
|||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
GES: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
$ |
380,909 |
|
|
$ |
380,951 |
|
|
$ |
294,618 |
|
International |
|
|
135,917 |
|
|
|
109,705 |
|
|
|
115,494 |
|
Pursuit |
|
|
350,256 |
|
|
|
301,941 |
|
|
|
195,527 |
|
Corporate and other |
|
|
52,817 |
|
|
|
77,219 |
|
|
|
85,084 |
|
|
|
$ |
919,899 |
|
|
$ |
869,816 |
|
|
$ |
690,723 |
|
Depreciation and amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
GES: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
$ |
29,088 |
|
|
$ |
21,473 |
|
|
$ |
18,658 |
|
International |
|
|
8,176 |
|
|
|
8,092 |
|
|
|
8,435 |
|
Pursuit |
|
|
17,653 |
|
|
|
12,967 |
|
|
|
7,974 |
|
Corporate and other |
|
|
197 |
|
|
|
211 |
|
|
|
164 |
|
|
|
$ |
55,114 |
|
|
$ |
42,743 |
|
|
$ |
35,231 |
|
Capital expenditures: |
|
|
|
|
|
|
|
|
|
|
|
|
GES: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
$ |
17,337 |
|
|
$ |
14,291 |
|
|
$ |
8,066 |
|
International |
|
|
8,084 |
|
|
|
5,033 |
|
|
|
8,366 |
|
Pursuit |
|
|
30,786 |
|
|
|
31,861 |
|
|
|
13,107 |
|
Corporate and other(1) |
|
|
414 |
|
|
|
(1,370 |
) |
|
|
300 |
|
|
|
$ |
56,621 |
|
|
$ |
49,815 |
|
|
$ |
29,839 |
|
(1) |
The 2016 amount includes an intercompany elimination for work completed by GES on renovations to Pursuit’s Banff Gondola. |
Geographic Areas
Our foreign operations are located principally in Canada, the United Kingdom, Germany, the United Arab Emirates and the Netherlands. GES revenue is designated as domestic or foreign based on the originating location of the product or service. Long-lived assets are attributed to domestic or foreign based principally on the physical location of the assets. Long-lived assets consist of “Property and equipment, net” and “Other investments and assets.” The table below presents the financial information by major geographic area:
|
|
December 31, |
|
|||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
913,210 |
|
|
$ |
855,304 |
|
|
$ |
726,436 |
|
EMEA |
|
|
209,824 |
|
|
|
205,028 |
|
|
|
220,046 |
|
Canada |
|
|
183,931 |
|
|
|
144,638 |
|
|
|
142,566 |
|
Total revenue |
|
$ |
1,306,965 |
|
|
$ |
1,204,970 |
|
|
$ |
1,089,048 |
|
Long-lived assets: |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
180,345 |
|
|
$ |
182,611 |
|
|
$ |
139,479 |
|
EMEA |
|
|
43,630 |
|
|
|
37,083 |
|
|
|
15,714 |
|
Canada |
|
|
129,108 |
|
|
|
104,461 |
|
|
|
71,677 |
|
Total long-lived assets |
|
$ |
353,083 |
|
|
$ |
324,155 |
|
|
$ |
226,870 |
|
|
Note 23. Common Stock Repurchases
We previously announced our Board of Directors’ authorization to repurchase shares of our common stock from time to time at prevailing market prices. No open market repurchases were made during 2017 or 2016. During 2015, we repurchased 141,462 shares on the open market for $3.8 million. As of December 31, 2017, 440,540 shares remain available for repurchase. We repurchased 41,532 shares for $2.1 million in 2017, 25,432 shares for $0.7 million in 2016, and 35,649 shares for $1.0 million in 2015 related to tax withholding requirements on vested share-based awards.
|
Note 24. Selected Quarterly Financial Information (Unaudited)
The following table sets forth selected unaudited consolidated quarterly financial information:
|
|
2017 |
|
|
2016 |
|
||||||||||||||||||||||||||
(in thousands, except per share data) |
|
First Quarter |
|
|
Second Quarter |
|
|
Third Quarter |
|
|
Fourth Quarter |
|
|
First Quarter |
|
|
Second Quarter |
|
|
Third Quarter |
|
|
Fourth Quarter |
|
||||||||
Revenue: |
|
$ |
325,807 |
|
|
$ |
364,774 |
|
|
$ |
339,099 |
|
|
$ |
277,285 |
|
|
$ |
241,362 |
|
|
$ |
324,747 |
|
|
$ |
382,465 |
|
|
$ |
256,396 |
|
Operating income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ongoing operations (1) |
|
$ |
12,684 |
|
|
$ |
39,402 |
|
|
$ |
47,066 |
|
|
$ |
(4,726 |
) |
|
$ |
(6,280 |
) |
|
$ |
34,014 |
|
|
$ |
58,917 |
|
|
$ |
(1,466 |
) |
Corporate activities |
|
|
(2,610 |
) |
|
|
(3,008 |
) |
|
|
(4,474 |
) |
|
|
(2,785 |
) |
|
|
(1,911 |
) |
|
|
(2,707 |
) |
|
|
(2,772 |
) |
|
|
(2,932 |
) |
Restructuring charges |
|
|
(394 |
) |
|
|
(168 |
) |
|
|
(255 |
) |
|
|
(187 |
) |
|
|
(992 |
) |
|
|
(975 |
) |
|
|
(1,697 |
) |
|
|
(1,519 |
) |
Impairment recoveries (charges) |
|
|
2,384 |
|
|
|
2,247 |
|
|
|
24,467 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(120 |
) |
|
|
(98 |
) |
Operating income (loss) |
|
$ |
12,064 |
|
|
$ |
38,473 |
|
|
$ |
66,804 |
|
|
$ |
(7,698 |
) |
|
$ |
(9,183 |
) |
|
$ |
30,332 |
|
|
$ |
54,328 |
|
|
$ |
(6,015 |
) |
Income (loss) from continuing operations attributable to Viad |
|
$ |
7,593 |
|
|
$ |
27,438 |
|
|
$ |
44,758 |
|
|
$ |
(21,814 |
) |
|
$ |
(6,797 |
) |
|
$ |
19,873 |
|
|
$ |
34,013 |
|
|
$ |
(4,136 |
) |
Net income (loss) attributable to Viad |
|
$ |
6,777 |
|
|
$ |
27,947 |
|
|
$ |
44,657 |
|
|
$ |
(21,674 |
) |
|
$ |
(6,983 |
) |
|
$ |
19,509 |
|
|
$ |
33,792 |
|
|
$ |
(4,049 |
) |
Basic and Diluted income (loss) per common share: (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations attributable to Viad |
|
$ |
0.37 |
|
|
$ |
1.35 |
|
|
$ |
2.19 |
|
|
$ |
(1.08 |
) |
|
$ |
(0.34 |
) |
|
$ |
0.98 |
|
|
$ |
1.68 |
|
|
$ |
(0.21 |
) |
Net income (loss) attributable to Viad common stockholders |
|
$ |
0.33 |
|
|
$ |
1.37 |
|
|
$ |
2.19 |
|
|
$ |
(1.07 |
) |
|
$ |
(0.35 |
) |
|
$ |
0.96 |
|
|
$ |
1.67 |
|
|
$ |
(0.20 |
) |
(1) |
Represents revenue less costs of services and cost of products sold. |
(2) |
The sum of quarterly income per share amounts may not equal annual income per share due to rounding. |
|
VIAD CORP
SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS
|
|
|
|
|
|
Additions |
|
|
Deductions |
|
|
|
|
|
|
|
|
|
||||||
(in thousands) |
|
Balance at Beginning of Year |
|
|
Charged to Expense |
|
|
Charged to Other Accounts |
|
|
Write-Offs |
|
|
Other(1) |
|
|
Balance at End of Year |
|
||||||
Allowances for doubtful accounts: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015 |
|
|
1,258 |
|
|
|
955 |
|
|
|
574 |
|
|
|
(1,162 |
) |
|
|
(32 |
) |
|
|
1,593 |
|
December 31, 2016 |
|
|
1,593 |
|
|
|
1,355 |
|
|
|
41 |
|
|
|
(1,602 |
) |
|
|
(45 |
) |
|
|
1,342 |
|
December 31, 2017 |
|
|
1,342 |
|
|
|
2,470 |
|
|
49 |
|
|
|
(1,529 |
) |
|
|
(309 |
) |
|
|
2,023 |
|
|
Deferred tax valuation allowance: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015 |
|
|
3,295 |
|
|
|
— |
|
|
|
402 |
|
|
|
(860 |
) |
|
|
— |
|
|
|
2,837 |
|
December 31, 2016 |
|
|
2,837 |
|
|
|
1,406 |
|
|
|
— |
|
|
|
(176 |
) |
|
|
(69 |
) |
|
|
3,998 |
|
December 31, 2017 |
|
|
3,998 |
|
|
|
1,385 |
|
|
|
— |
|
|
|
(1,595 |
) |
|
|
222 |
|
|
|
4,010 |
|
(1) |
“Other” primarily includes foreign exchange translation adjustments. |
|
Basis of Presentation and Principles of Consolidation
The accompanying consolidated financial statements of Viad have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the accounts of Viad and its subsidiaries. All significant intercompany account balances and transactions have been eliminated in consolidation.
Nature of Business
We are an international experiential services company with operations principally in the United States, Canada, the United Kingdom, continental Europe, the United Arab Emirates, and Hong Kong. We are committed to providing unforgettable experiences to our clients and guests. We operate through three reportable business segments: GES U.S., GES International, (collectively, “GES”), and Pursuit.
GES
GES is a global, full-service provider for live events that produces exhibitions, conferences, corporate events, and consumer events. GES offers a comprehensive range of live event services and a full suite of audio-visual services from creative and technology to content and design, along with online tools powered by next generation technologies that help clients easily manage the complexities of their events.
GES’ clients include event organizers and corporate brand marketers. Event organizers schedule and run the event from start to finish. Corporate brand marketers include exhibitors and domestic and international corporations that want to promote their brands, services and innovations, feature new products, and build business relationships. GES serves corporate brand marketers when they exhibit at shows and when GES is engaged to manage their global exhibit program or produce their proprietary corporate events.
Pursuit
Pursuit is a collection of iconic natural and cultural destination travel experiences that enjoy perennial demand. Pursuit is comprised of four lines of business: Hospitality, Attractions, Transportation, and Travel Planning. These four lines of business work together, driving economies of scope and meaningful scale in and around the iconic destinations of Banff, Jasper, and Waterton Lakes National Parks and Vancouver in Canada, and Glacier, Denali, and Kenai Fjords National Parks in the United States. Pursuit is comprised of Brewster Travel Canada, which is marketed as the Banff Jasper Collection; the Alaska Collection; Glacier Park, Inc., which is marketed as the Glacier Park Collection, and FlyOver.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported period. Estimates and assumptions are used in accounting for, among other things, the fair value of our reporting units used to perform annual impairment testing of recorded goodwill; allowances for uncollectible accounts receivable; provisions for income taxes, including uncertain tax positions; valuation allowances related to deferred tax assets; liabilities for losses related to self-insured liability claims; liabilities for losses related to environmental remediation obligations; sublease income associated with restructuring liabilities; assumptions used to measure pension and postretirement benefit costs and obligations; assumptions used to determine share-based compensation costs under the fair value method; assumptions in the redemption value of redeemable noncontrolling interests; and allocation of purchase price of acquired businesses. Actual results could differ from these and other estimates.
Cash and Cash Equivalents
Cash equivalents are highly-liquid investments with remaining maturities when purchased of three months or less. Cash and cash equivalents consist of cash and bank demand deposits and money market mutual funds. Investments in money market mutual funds are classified as available-for-sale and carried at fair value.
Allowances for Doubtful Accounts
Allowances for doubtful accounts reflect the best estimate of probable losses inherent in the accounts receivable balance. The allowances for doubtful accounts, including a sales allowance for discounts at the time of sale, are based upon an evaluation of the aging of receivables, historical trends, and the current economic environment.
Inventories
Inventories, which consist primarily of exhibit design and construction materials and supplies, as well as deferred show costs, including labor, show purchases, and commissions used in providing convention show services, are stated at the lower of cost (first-in, first-out and specific identification methods) or net realizable value.
Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets: buildings, 15 to 40 years; equipment, 3 to 12 years; and leasehold improvements, over the shorter of the lease term or useful life. Property and equipment are tested for potential impairment whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset may not be recoverable through undiscounted cash flows.
Capitalized Software
Certain internal and external costs incurred in developing or obtaining internal use software are capitalized. Capitalized costs principally relate to costs incurred to purchase software from third parties, external direct costs of materials and services, and certain payroll-related costs for employees directly associated with software projects once application development begins. Costs associated with preliminary project activities, training, and other post-implementation activities are expensed as incurred. Capitalized software costs are amortized using the straight-line method over the estimated useful lives of the software, ranging from three to ten years. These costs are included in the Consolidated Balance Sheets under the caption “Property and equipment, net.”
Goodwill
Goodwill is tested for impairment at the reporting unit level on an annual basis as of October 31, and between annual tests if an event occurs or circumstances change that would more-likely-than-not reduce the fair value of a reporting unit below its carrying value. We use a discounted expected future cash flow methodology (income approach) in order to estimate the fair value of our reporting units for purposes of goodwill impairment testing. The estimates and assumptions regarding expected future cash flows, discount rates, and terminal values require considerable judgment and are based on market conditions, financial forecasts, industry trends, and historical experience. These estimates, however, have inherent uncertainties and different assumptions could lead to materially different results.
Cash Surrender Value of Life Insurance
We have Company-owned life insurance contracts which are intended to fund the cost of certain employee compensation and benefit programs. These contracts are carried at cash surrender value, net of outstanding policy loans. The cash surrender value represents the amount of cash we could receive if the policies were discontinued before maturity. The changes in the cash surrender value of the policies, net of insurance premiums, are included as a component of “Costs of Services” in the Consolidated Statements of Operations.
Self-Insurance Liabilities
We are self-insured up to certain limits for workers’ compensation, automobile, product and general liability, property loss, and medical claims. We retained certain liabilities related to workers’ compensation and general liability insurance claims in conjunction with previously sold operations. Provisions for losses for claims incurred, including estimated claims incurred but not yet reported, are made based on historical experience, claims frequency, insurance coverage, and other factors. We purchased insurance for amounts in excess of the self-insured levels.
Environmental Remediation Liabilities
Environmental remediation liabilities represent the estimated cost of environmental remediation obligations primarily associated with previously sold operations. The amounts accrued primarily consist of the estimated direct incremental costs, on an undiscounted basis, for contractor and other services related to remedial actions and post-remediation site monitoring. Environmental remediation liabilities are recorded when the specific obligation is considered probable and the costs are reasonably estimable. Subsequent recoveries from third parties, if any, are recorded through discontinued operations when realized. Environmental insurance is maintained that provides coverage for new and undiscovered pre-existing conditions at both our continuing and discontinued operations.
Fair Value of Financial Instruments
The carrying value of cash and cash equivalents, receivables, and accounts payable approximate fair value due to the short-term maturities of these instruments. Refer to Note 11 – Debt and Capital Lease Obligations for the estimated fair value of debt obligations.
Non-redeemable Noncontrolling Interest and Redeemable Noncontrolling Interest
Non-redeemable noncontrolling interest represents the portion of equity in a subsidiary not attributable, directly or indirectly, to us. Our non-redeemable noncontrolling interest relates to the equity ownership that we do not own in Glacier Park, Inc. of 20%. We report non-redeemable noncontrolling interest within stockholders’ equity in the Consolidated Balance Sheets. The amount of consolidated net income attributable to Viad and the non-redeemable noncontrolling interest is presented in the Consolidated Statements of Operations.
Noncontrolling interests with redemption features that are not solely within our control are considered redeemable noncontrolling interests. The Esja purchase agreement contains a put option that gives the minority Esja shareholders the right to sell (or “put”) their Esja shares to us based on a calculated formula within a predefined term. This redeemable noncontrolling interest is considered temporary equity and we report it between liabilities and stockholders’ equity in the Consolidated Balance Sheets. The amount of the net income or loss attributable to redeemable noncontrolling interests is recorded to retained earnings and is included in our earnings per share. Refer to Note 21 – Redeemable Noncontrolling Interest for additional information.
Foreign Currency Translation
Our foreign operations are primarily in Canada, the United Kingdom, the Netherlands, Germany, and to a lesser extent, in certain other countries. The functional currency of our foreign subsidiaries is their local currency. Accordingly, for purposes of consolidation, we translate the assets and liabilities of our foreign subsidiaries into U.S. dollars at the foreign exchange rates in effect at the balance sheet date. The unrealized gains or losses resulting from the translation of these foreign denominated assets and liabilities are included as a component of accumulated other comprehensive income (loss) in the Consolidated Balance Sheets. For purposes of consolidation, revenue, expenses, gains, and losses related to our foreign operations are translated into U.S. dollars at the average foreign exchange rates for the period.
Revenue Recognition
Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the sales price is fixed or determinable, and collectability is reasonably assured. GES derives revenue primarily by providing core services, event technology services, and audio-visual services to event organizers and exhibitors participating in live events. GES derives revenue from consumer events by charging visitors to view the touring exhibitions. Exhibition and event service’s revenue is recognized when services are completed, net of commissions. Exhibits and environments revenue is accounted for using the completed-contract method. Pursuit generates revenue through its hospitality, attractions, transportation, and travel planning services. Pursuit’s revenue is recognized at the time services are performed.
Insurance Recoveries
Receipts from insurance up to the amount of the recognized losses are considered recoveries and are accounted for when they are probable of receipt. Anticipated proceeds in excess of the recognized loss are considered a gain contingency. A contingency gain for anticipated insurance proceeds in excess of losses already recognized is not recognized until all contingencies relating to the insurance claim have been resolved.
Insurance proceeds allocated to business interruption gains are reported as cash flows from operating activities, and proceeds allocated to impairment recoveries are reported as cash flows from investing activities. Insurance proceeds used for capitalizable costs are classified as cash flows from investing activities, and proceeds used for non-capitalizable costs are classified as operating activities.
On December 29, 2016, the Mount Royal Hotel was damaged by a fire and closed. During the fourth quarter of 2016, we recorded an asset impairment loss of $2.2 million and an offsetting impairment recovery (and related insurance receivable) as the losses related to the fire were covered by our property and business interruption insurance. During July 2017, we resolved our property and business interruption insurance claims for a total of $36.3 million. We allocated $2.2 million to an insurance receivable, $29.3 million was recorded as an impairment recovery (partially offset by impairment charges of $0.2 million) related to construction costs to re-open the hotel, $2.5 million was recorded as a business interruption gain for the recovery of lost profits, $1.3 million was recorded as contra-expense to offset non-capitalizable costs incurred, and the remaining $1.0 million was recorded as deferred revenue, which will be recognized over the periods when the business interruption losses are actually incurred.
Share-Based Compensation
Share-based compensation costs, related to all share-based payment awards, are recognized and measured using the fair value method of accounting. These awards generally include restricted stock, liability-based awards (including performance units and restricted stock units), and stock options, and contain forfeiture and non-compete provisions.
The fair value of restricted stock awards is based on our closing stock price on the date of grant. We issue restricted stock awards from shares held in treasury. Future vesting of restricted stock is generally subject to continued employment. Holders of restricted stock have the right to receive dividends and vote the shares, but may not sell, assign, transfer, pledge, or otherwise encumber the stock, except to the extent restrictions have lapsed and in accordance with our stock trading policy.
Restricted stock awards vest between three and five years from the date of grant. Share-based compensation expense related to restricted stock is recognized using the straight-line method over the requisite service period of approximately three years. For awards with a five-year vesting period, expense is recognized based on an accelerated multiple-award approach over a five-year period. For these awards, 40% of the shares vest on the third anniversary of the grant and the remaining shares vest in 30% increments over the subsequent two anniversary dates.
Liability-based awards (including performance units and restricted stock units) are recorded at estimated fair value, based on the number of units expected to vest and where applicable, the level of achievement of predefined performance goals. These awards are remeasured on each balance sheet date based on our stock price, and the Monte Carlo simulation model, until the time of settlement. A Monte Carlo simulation requires the use of a number of assumptions, including historical volatility and correlation of our stock price and the price of the common shares of a comparator group, a risk-free rate of return, and an expected term. To the extent earned, liability-based awards are settled in cash based on our stock price. Compensation expense related to liability-based awards is recognized ratably over the requisite service period of approximately three years.
Equity-based awards (including performance units) are recorded at estimated fair value, based on the number of units expected to vest and the level of achievement of predefined performance goals, until the time of settlement. To the extent earned, equity-based awards are settled in our common stock. Compensation expense related to equity-based awards is recognized ratably over the requisite service period of approximately three years.
The fair value of stock option grants is estimated on the date of grant using the Black-Scholes option pricing model. Share-based compensation expense related to stock option awards is recognized using the straight-line method over the requisite service period of approximately five years. The exercise price of stock options is based on the market value of our common stock at the date of grant. We have not granted stock options since 2010.
Common Stock in Treasury
Common stock purchased for treasury is recorded at historical cost. Subsequent share reissuances are primarily related to share-based compensation programs and recorded at weighted-average cost.
Income Per Common Share
We apply the two-class method in calculating income per common share as unvested share-based payment awards that contain nonforfeitable rights to dividends are considered participating securities. Accordingly, such securities are included in the earnings allocation in calculating income per share. The adjustment to the carrying value of the redeemable noncontrolling interest is reflected in income per common share.
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. We may adopt either retrospectively to each prior period presented with the option to elect certain practical expedients or with the cumulative effect recognized at the date of initial application and providing certain disclosures.
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 |
|
We assigned internal resources and engaged a third-party service provider to assist in evaluating the impact on our accounting policies, processes, and system requirements. Based on our assessment, the adoption of this standard will not have a material impact on our consolidated financial statements. The impact primarily relates to the deferral of certain commissions which were previously expensed as incurred but will generally be capitalized and amortized over the period of contract performance, and the deferral of certain costs incurred in connection with trade shows which were previously expensed as incurred but will generally be capitalized and expensed upon the completion of the show. We adopted the standard on January 1, 2018 and will be using the modified retrospective transition method. Additionally, the new guidance requires enhanced disclosures, including revenue recognition policies to identify performance obligations to customers and significant judgments in measurement and recognition. |
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 |
|
We are currently evaluating the potential impact the adoption of this new guidance will have on our financial position or results of operations including analyzing our existing operating leases. Based on our current assessment, the adoption of this standard will have a material impact on our Consolidated Balance Sheets, however the income statement is not expected to be materially impacted. We expect the most significant impact will relate to facility and equipment leases, which are currently recorded as operating leases. We are continuing our assessment, which may identify other impacts. We will adopt the standard on January 1, 2019. |
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 our consolidated financial statements and we expect the adoption to reduce the complexity surrounding the analysis of goodwill impairment. |
Standard |
|
Description |
|
Date of adoption |
|
Effect on the financial statements |
Standards Recently Adopted |
||||||
ASU 2016-09, Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting |
|
The amendment identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. |
|
January 1, 2017 |
|
The adoption of this new guidance resulted in a decrease in tax expense of $1.1 million, or a 1.1% decrease in our effective tax rate, as compared to 2016. |
|
The following table summarizes the final allocation of the aggregate purchase price paid and amounts of assets acquired and liabilities assumed based upon the estimated fair value at the date of acquisitions. The balances in the table below remain unchanged from the balances reflected in the Consolidated Balance Sheets in our Annual Report on Form 10-K for the year ended December 31, 2016.
|
|
Maligne Lake Tours |
|
|
CATC |
|
|
ON Services |
|
|
FlyOver Canada |
|
||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase price paid as: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash |
|
$ |
14,962 |
|
|
$ |
45,000 |
|
|
$ |
87,000 |
|
|
$ |
50,920 |
|
Working capital adjustment |
|
|
— |
|
|
|
(35 |
) |
|
|
344 |
|
|
|
— |
|
Contingent consideration |
|
|
— |
|
|
|
— |
|
|
|
540 |
|
|
|
— |
|
Cash acquired |
|
|
— |
|
|
|
(2,196 |
) |
|
|
— |
|
|
|
(6 |
) |
Total purchase price, net of cash acquired |
|
|
14,962 |
|
|
|
42,769 |
|
|
|
87,884 |
|
|
|
50,914 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of net assets acquired: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
— |
|
|
|
8 |
|
|
|
4,643 |
|
|
|
— |
|
Inventories |
|
|
246 |
|
|
|
921 |
|
|
|
256 |
|
|
|
11 |
|
Prepaid expenses |
|
|
2 |
|
|
|
82 |
|
|
|
872 |
|
|
|
37 |
|
Property and equipment |
|
|
4,133 |
|
|
|
43,470 |
|
|
|
14,827 |
|
|
|
10,867 |
|
Intangible assets |
|
|
9,244 |
|
|
|
980 |
|
|
|
33,990 |
|
|
|
6,028 |
|
Total assets acquired |
|
|
13,625 |
|
|
|
45,461 |
|
|
|
54,588 |
|
|
|
16,943 |
|
Accounts payable |
|
|
— |
|
|
|
306 |
|
|
|
992 |
|
|
|
— |
|
Accrued liabilities |
|
|
— |
|
|
|
434 |
|
|
|
564 |
|
|
|
118 |
|
Customer deposits |
|
|
15 |
|
|
|
1,952 |
|
|
|
851 |
|
|
|
— |
|
Other liabilities |
|
|
240 |
|
|
|
— |
|
|
|
274 |
|
|
|
— |
|
Total liabilities acquired |
|
|
255 |
|
|
|
2,692 |
|
|
|
2,681 |
|
|
|
118 |
|
Total fair value of net assets acquired |
|
|
13,370 |
|
|
|
42,769 |
|
|
|
51,907 |
|
|
|
16,825 |
|
Excess purchase price over fair value of net assets acquired (“goodwill”) |
|
$ |
1,592 |
|
|
$ |
— |
|
|
$ |
35,977 |
|
|
$ |
34,089 |
|
Following are the details of the purchase price allocated to the intangible assets acquired for the 2016 Acquisitions:
(in thousands, except weighted average life) |
|
Maligne Lake Tours |
|
|
CATC |
|
|
ON Services |
|
|
FlyOver Canada |
|
||||
Customer relationships |
|
$ |
788 |
|
|
$ |
780 |
|
|
$ |
27,620 |
|
|
$ |
1,592 |
|
Operating licenses |
|
|
8,313 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Trade name |
|
|
143 |
|
|
|
200 |
|
|
|
3,190 |
|
|
|
3,710 |
|
Non-compete agreements |
|
|
— |
|
|
|
— |
|
|
|
3,180 |
|
|
|
726 |
|
Fair value of intangible assets acquired |
|
$ |
9,244 |
|
|
$ |
980 |
|
|
$ |
33,990 |
|
|
$ |
6,028 |
|
Weighted average life |
|
26.7 years(1) |
|
|
5.8 years |
|
|
10.5 years |
|
|
9.4 years |
|
(1) |
Largely attributable to operating licenses amortized over the remaining Parks Canada lease of 29 years. |
The following table summarizes our unaudited pro forma results of operations assuming the 2016 Acquisitions had each been completed on January 1, 2015:
|
|
Year Ended December 31, |
|
|||||
(in thousands, except per share data) |
|
2016 |
|
|
2015 |
|
||
Revenue |
|
$ |
1,250,290 |
|
|
$ |
1,183,656 |
|
Depreciation and amortization |
|
$ |
52,074 |
|
|
$ |
52,631 |
|
Income from continuing operations |
|
$ |
43,727 |
|
|
$ |
27,881 |
|
Net income attributable to Viad |
|
$ |
42,517 |
|
|
$ |
27,045 |
|
Diluted income per share |
|
$ |
2.10 |
|
|
$ |
1.35 |
|
Basic income per share |
|
$ |
2.10 |
|
|
$ |
1.35 |
|
|
The components of inventories consisted of the following:
|
|
December 31, |
|
|||||
(in thousands) |
|
2017 |
|
|
2016 |
|
||
Raw materials |
|
$ |
17,550 |
|
|
$ |
16,846 |
|
Work in process |
|
|
12,822 |
|
|
|
14,574 |
|
Inventories |
|
$ |
30,372 |
|
|
$ |
31,420 |
|
|
Other current assets consisted of the following:
|
|
December 31, |
|
|||||
(in thousands) |
|
2017 |
|
|
2016 |
|
||
Prepaid vendor payments |
|
$ |
5,048 |
|
|
$ |
3,633 |
|
Income tax receivable |
|
|
4,237 |
|
|
|
3,614 |
|
Prepaid software maintenance |
|
|
3,386 |
|
|
|
2,804 |
|
Prepaid insurance |
|
|
2,610 |
|
|
|
2,479 |
|
Prepaid taxes |
|
|
912 |
|
|
|
850 |
|
Prepaid rent |
|
|
730 |
|
|
|
327 |
|
Prepaid other |
|
|
2,172 |
|
|
|
731 |
|
Other |
|
|
1,935 |
|
|
|
4,011 |
|
Other current assets |
|
$ |
21,030 |
|
|
$ |
18,449 |
|
|
Property and equipment consisted of the following:
|
|
December 31, |
|
|||||
(in thousands) |
|
2017 |
|
|
2016 |
|
||
Land and land interests(1) |
|
$ |
32,544 |
|
|
$ |
31,670 |
|
Buildings and leasehold improvements |
|
|
222,118 |
|
|
|
185,987 |
|
Equipment and other(2) |
|
|
351,676 |
|
|
|
326,868 |
|
Gross property and equipment |
|
|
606,338 |
|
|
|
544,525 |
|
Accumulated depreciation |
|
|
(300,767 |
) |
|
|
(264,667 |
) |
Property and equipment, net |
|
$ |
305,571 |
|
|
$ |
279,858 |
|
|
Other investments and assets consisted of the following:
|
|
December 31, |
|
|||||
(in thousands) |
|
2017 |
|
|
2016 |
|
||
Cash surrender value of life insurance |
|
$ |
23,947 |
|
|
$ |
23,197 |
|
Self-insured liability receivable |
|
|
10,442 |
|
|
|
10,463 |
|
Workers’ compensation insurance security deposits |
|
|
3,550 |
|
|
|
4,050 |
|
Other mutual funds |
|
|
2,637 |
|
|
|
2,062 |
|
Other |
|
|
6,936 |
|
|
|
4,525 |
|
Other investments and assets |
|
$ |
47,512 |
|
|
$ |
44,297 |
|
|
The changes in the carrying amount of goodwill are as follows:
(in thousands) |
|
GES U.S. |
|
|
GES International |
|
|
Pursuit |
|
|
Total |
|
||||
Balance at December 31, 2015 |
|
$ |
112,300 |
|
|
$ |
38,635 |
|
|
$ |
34,288 |
|
|
$ |
185,223 |
|
Business acquisitions |
|
|
35,977 |
|
|
|
— |
|
|
|
35,681 |
|
|
|
71,658 |
|
Foreign currency translation adjustments |
|
|
— |
|
|
|
(4,175 |
) |
|
|
1,316 |
|
|
|
(2,859 |
) |
Balance at December 31, 2016 |
|
|
148,277 |
|
|
|
34,460 |
|
|
|
71,285 |
|
|
|
254,022 |
|
Business acquisitions |
|
|
— |
|
|
|
1,060 |
|
|
|
7,094 |
|
|
|
8,154 |
|
Foreign currency translation adjustments |
|
|
— |
|
|
|
3,320 |
|
|
|
5,055 |
|
|
|
8,375 |
|
Balance at December 31, 2017 |
|
$ |
148,277 |
|
|
$ |
38,840 |
|
|
$ |
83,434 |
|
|
$ |
270,551 |
|
The following table summarizes goodwill by reporting unit and segment:
|
|
December 31, |
|
|||||
(in thousands) |
|
2017 |
|
|
2016 |
|
||
GES: |
|
|
|
|
|
|
|
|
U.S. |
|
$ |
148,277 |
|
|
$ |
148,277 |
|
International: |
|
|
|
|
|
|
|
|
GES EMEA |
|
|
31,612 |
|
|
|
27,694 |
|
GES Canada |
|
|
7,228 |
|
|
|
6,766 |
|
Total GES |
|
|
187,117 |
|
|
|
182,737 |
|
Pursuit: |
|
|
|
|
|
|
|
|
Banff Jasper Collection |
|
|
35,305 |
|
|
|
32,587 |
|
Alaska Collection |
|
|
3,184 |
|
|
|
3,184 |
|
Glacier Park Collection |
|
|
1,268 |
|
|
|
1,268 |
|
FlyOver |
|
|
43,677 |
|
|
|
34,246 |
|
Total Pursuit |
|
|
83,434 |
|
|
|
71,285 |
|
Total Goodwill |
|
$ |
270,551 |
|
|
$ |
254,022 |
|
Other intangible assets consisted of the following:
|
|
December 31, 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 |
|
$ |
68,798 |
|
|
$ |
(23,696 |
) |
|
$ |
45,102 |
|
|
$ |
67,762 |
|
|
$ |
(14,345 |
) |
|
$ |
53,417 |
|
Operating contracts and licenses |
|
|
9,951 |
|
|
|
(1,094 |
) |
|
|
8,857 |
|
|
|
9,315 |
|
|
|
(652 |
) |
|
|
8,663 |
|
Tradenames |
|
|
8,633 |
|
|
|
(2,873 |
) |
|
|
5,760 |
|
|
|
8,324 |
|
|
|
(1,440 |
) |
|
|
6,884 |
|
Non-compete agreements |
|
|
5,363 |
|
|
|
(3,007 |
) |
|
|
2,356 |
|
|
|
5,190 |
|
|
|
(1,369 |
) |
|
|
3,821 |
|
Other |
|
|
896 |
|
|
|
(650 |
) |
|
|
246 |
|
|
|
886 |
|
|
|
(458 |
) |
|
|
428 |
|
Total amortized intangible assets |
|
|
93,641 |
|
|
|
(31,320 |
) |
|
|
62,321 |
|
|
|
91,477 |
|
|
|
(18,264 |
) |
|
|
73,213 |
|
Unamortized intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business licenses |
|
|
460 |
|
|
|
— |
|
|
|
460 |
|
|
|
460 |
|
|
|
— |
|
|
|
460 |
|
Other intangible assets |
|
$ |
94,101 |
|
|
$ |
(31,320 |
) |
|
$ |
62,781 |
|
|
$ |
91,937 |
|
|
$ |
(18,264 |
) |
|
$ |
73,673 |
|
The estimated future amortization expense related to amortized intangible assets held at December 31, 2017 is as follows:
(in thousands) |
|
|
|
|
Year ending December 31, |
|
|
|
|
2018 |
|
$ |
11,013 |
|
2019 |
|
|
9,945 |
|
2020 |
|
|
8,444 |
|
2021 |
|
|
7,447 |
|
2022 |
|
|
5,895 |
|
Thereafter |
|
|
19,577 |
|
Total |
|
$ |
62,321 |
|
|
Other current liabilities consisted of the following:
|
|
December 31, |
|
|||||
(in thousands) |
|
2017 |
|
|
2016 |
|
||
Continuing operations: |
|
|
|
|
|
|
|
|
Accrued income tax payable |
|
$ |
7,518 |
|
|
$ |
758 |
|
Self-insured liability accrual |
|
|
6,208 |
|
|
|
5,941 |
|
Commissions payable |
|
|
3,235 |
|
|
|
639 |
|
Accrued employee benefit costs |
|
|
2,915 |
|
|
|
2,624 |
|
Accrued sales and use taxes |
|
|
2,431 |
|
|
|
4,279 |
|
Accrued dividends |
|
|
2,094 |
|
|
|
2,119 |
|
Current portion of pension and postretirement liabilities |
|
|
2,109 |
|
|
|
1,963 |
|
Deferred rent |
|
|
1,679 |
|
|
|
1,535 |
|
Accrued rebates |
|
|
1,106 |
|
|
|
1,078 |
|
Accrued professional fees |
|
|
1,020 |
|
|
|
794 |
|
Accrued restructuring |
|
|
722 |
|
|
|
1,924 |
|
Other taxes |
|
|
2,750 |
|
|
|
4,210 |
|
Other |
|
|
3,852 |
|
|
|
1,774 |
|
Total continuing operations |
|
|
37,639 |
|
|
|
29,638 |
|
Discontinued operations: |
|
|
|
|
|
|
|
|
Environmental remediation liabilities |
|
|
648 |
|
|
|
492 |
|
Self-insured liability accrual |
|
|
337 |
|
|
|
162 |
|
Other |
|
|
96 |
|
|
|
98 |
|
Total discontinued operations |
|
|
1,081 |
|
|
|
752 |
|
Total other current liabilities |
|
$ |
38,720 |
|
|
$ |
30,390 |
|
|
Other deferred items and liabilities consisted of the following:
|
|
December 31, |
|
|||||
(in thousands) |
|
2017 |
|
|
2016 |
|
||
Continuing operations: |
|
|
|
|
|
|
|
|
Self-insured liability |
|
$ |
12,918 |
|
|
$ |
12,981 |
|
Self-insured excess liability |
|
|
10,442 |
|
|
|
10,463 |
|
Accrued compensation |
|
|
9,740 |
|
|
|
8,514 |
|
Foreign deferred tax liability |
|
|
8,267 |
|
|
|
2,264 |
|
Deferred rent |
|
|
3,855 |
|
|
|
5,271 |
|
Accrued restructuring |
|
|
1,827 |
|
|
|
1,858 |
|
Other |
|
|
1,305 |
|
|
|
1,300 |
|
Total continuing operations |
|
|
48,354 |
|
|
|
42,651 |
|
Discontinued operations: |
|
|
|
|
|
|
|
|
Self-insured liability |
|
|
2,557 |
|
|
|
3,748 |
|
Environmental remediation liabilities |
|
|
1,728 |
|
|
|
3,091 |
|
Accrued income taxes |
|
|
— |
|
|
|
1,045 |
|
Other |
|
|
219 |
|
|
|
199 |
|
Total discontinued operations |
|
|
4,504 |
|
|
|
8,083 |
|
Total other deferred items and liabilities |
|
$ |
52,858 |
|
|
$ |
50,734 |
|
|
The components of long-term debt and capital lease obligations consisted of the following:
|
|
December 31, |
|
|||||
(in thousands, except interest rates) |
|
2017 |
|
|
2016 |
|
||
Revolving credit facility and term loan, 3.1% weighted-average interest rate at December 31, 2017 and 2.6% at December 31, 2016, due through 2019 (1) |
|
$ |
207,322 |
|
|
$ |
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 |
|
|
(984 |
) |
|
|
(1,464 |
) |
Total debt |
|
|
206,338 |
|
|
|
247,742 |
|
Capital lease obligations, 3.8% weighted-average interest rate at December 31, 2017 and 4.9% at December 31, 2016, due through 2021 |
|
|
2,854 |
|
|
|
1,469 |
|
Total debt and capital lease obligations |
|
|
209,192 |
|
|
|
249,211 |
|
Current portion (2) |
|
|
(152,599 |
) |
|
|
(174,968 |
) |
Long-term debt and capital lease obligations |
|
$ |
56,593 |
|
|
$ |
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. |
Aggregate annual maturities of long-term debt and capital lease obligations as of December 31, 2017 are as follows:
(in thousands) |
|
Revolving Credit Agreement |
|
|
Capital Lease Obligations |
|
||
Year ending December 31, |
|
|
|
|
|
|
|
|
2018 |
|
$ |
151,072 |
|
|
$ |
1,601 |
|
2019 |
|
|
56,250 |
|
|
|
899 |
|
2020 |
|
|
— |
|
|
|
454 |
|
2021 |
|
|
— |
|
|
|
17 |
|
2022 |
|
|
— |
|
|
|
— |
|
Total |
|
$ |
207,322 |
|
|
$ |
2,971 |
|
Less: Amount representing interest |
|
|
|
|
|
|
(117 |
) |
Present value of minimum lease payments |
|
|
|
|
|
$ |
2,854 |
|
|
The fair value information related to these assets is summarized in the following tables:
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using |
|
|||||||||
(in thousands) |
|
December 31, 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) |
|
|
2,637 |
|
|
|
2,637 |
|
|
|
— |
|
|
|
— |
|
Total assets at fair value on a recurring basis |
|
$ |
2,756 |
|
|
$ |
2,756 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
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 funds are included in “Cash and cash equivalents” in the Consolidated Balance Sheets. These investments are classified as available-for-sale and are recorded at fair value. There have been no realized gains or losses related to these investments and we have not experienced any redemption restrictions with respect to any of the money market mutual funds. |
(2) |
Other mutual funds are included in “Other investments and assets” in the Consolidated Balance Sheets. These investments are classified as available-for-sale and are recorded at fair value. Unrealized gains of $1.0 million ($0.6 million after-tax) as of December 31, 2017 and $0.7 million ($0.4 million after tax) as of December 31, 2016 are included in “Accumulated other comprehensive income (loss)” (“AOCI”) in the Consolidated Balance Sheets. |
|
Changes in AOCI by component are as follows:
(in thousands) |
|
Unrealized Gains on Investments |
|
|
Cumulative Foreign Currency Translation Adjustments |
|
|
Unrecognized Net Actuarial Loss and Prior Service Credit, Net |
|
|
Accumulated Other Comprehensive Income (Loss) |
|
||||
Balance at December 31, 2015 |
|
$ |
346 |
|
|
$ |
(23,257 |
) |
|
$ |
(11,265 |
) |
|
$ |
(34,176 |
) |
Other comprehensive income (loss) before reclassifications |
|
|
135 |
|
|
|
(5,827 |
) |
|
|
— |
|
|
|
(5,692 |
) |
Amounts reclassified from AOCI, net of tax |
|
|
(60 |
) |
|
|
— |
|
|
|
537 |
|
|
|
477 |
|
Net other comprehensive income (loss) |
|
|
75 |
|
|
|
(5,827 |
) |
|
|
537 |
|
|
|
(5,215 |
) |
Balance at December 31, 2016 |
|
$ |
421 |
|
|
$ |
(29,084 |
) |
|
$ |
(10,728 |
) |
|
$ |
(39,391 |
) |
Other comprehensive income before reclassifications |
|
|
257 |
|
|
|
17,058 |
|
|
|
— |
|
|
|
17,315 |
|
Amounts reclassified from AOCI, net of tax |
|
|
(62 |
) |
|
|
— |
|
|
|
(430 |
) |
|
|
(492 |
) |
Net other comprehensive income (loss) |
|
|
195 |
|
|
|
17,058 |
|
|
|
(430 |
) |
|
|
16,823 |
|
Balance at December 31, 2017 |
|
$ |
616 |
|
|
$ |
(12,026 |
) |
|
$ |
(11,158 |
) |
|
$ |
(22,568 |
) |
The following table presents information about reclassification adjustments out of AOCI:
|
|
Year Ended December 31, |
|
|
Affected Line Item in the Statement Where Net Income is Presented |
|||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
|
||
Unrealized gains on investments |
|
$ |
(100 |
) |
|
$ |
(97 |
) |
|
Interest income |
Tax effect |
|
|
38 |
|
|
|
37 |
|
|
Income taxes |
|
|
$ |
(62 |
) |
|
$ |
(60 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Recognized net actuarial loss (gains)(1) |
|
$ |
507 |
|
|
$ |
1,440 |
|
|
|
Amortization of prior service credit(1) |
|
|
(1,247 |
) |
|
|
(575 |
) |
|
|
Tax effect |
|
|
310 |
|
|
|
(328 |
) |
|
Income taxes |
|
|
$ |
(430 |
) |
|
$ |
537 |
|
|
|
(1) |
Amount included in pension expense. Refer to Note 17 – Pension and Postretirement Benefits. |
|
Income from continuing operations before income taxes consisted of the following:
|
|
Year Ended December 31, |
|
|||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
Foreign |
|
$ |
82,919 |
|
|
$ |
33,611 |
|
|
$ |
35,571 |
|
United States |
|
|
21,431 |
|
|
|
31,118 |
|
|
|
2,364 |
|
Income from continuing operations before income taxes |
|
$ |
104,350 |
|
|
$ |
64,729 |
|
|
$ |
37,935 |
|
Significant components of the income tax provision from continuing operations are as follows:
|
|
Year Ended December 31, |
|
|||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
Current: |
|
|
|
|
|
|
|
|
|
|
|
|
United States: |
|
|
|
|
|
|
|
|
|
|
|
|
Federal |
|
$ |
1,693 |
|
|
$ |
3,685 |
|
|
$ |
(876 |
) |
State |
|
|
2,573 |
|
|
|
1,716 |
|
|
|
1,558 |
|
Foreign |
|
|
15,583 |
|
|
|
8,177 |
|
|
|
9,342 |
|
Total current |
|
|
19,849 |
|
|
|
13,578 |
|
|
|
10,024 |
|
Deferred: |
|
|
|
|
|
|
|
|
|
|
|
|
United States: |
|
|
|
|
|
|
|
|
|
|
|
|
Federal |
|
|
19,893 |
|
|
|
8,427 |
|
|
|
1,854 |
|
State |
|
|
1,761 |
|
|
|
(598 |
) |
|
|
(164 |
) |
Foreign |
|
|
4,395 |
|
|
|
(157 |
) |
|
|
(1,221 |
) |
Total deferred |
|
|
26,049 |
|
|
|
7,672 |
|
|
|
469 |
|
Income tax expense |
|
$ |
45,898 |
|
|
$ |
21,250 |
|
|
$ |
10,493 |
|
|
|
Year Ended December 31, |
|
|||||||||||||||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||||||||||||||
Computed income tax expense at statutory federal income tax rate of 35% |
|
$ |
36,522 |
|
|
|
35.0 |
% |
|
$ |
22,655 |
|
|
|
35.0 |
% |
|
$ |
13,277 |
|
|
|
35.0 |
% |
State income taxes, net of federal benefit |
|
|
1,160 |
|
|
|
1.1 |
% |
|
|
292 |
|
|
|
0.5 |
% |
|
|
1,713 |
|
|
|
4.5 |
% |
Deemed mandatory repatriation state tax |
|
|
1,206 |
|
|
|
1.2 |
% |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Deemed mandatory repatriation federal tax, net of foreign tax credit |
|
|
6,936 |
|
|
|
6.6 |
% |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Remeasurement of deferred taxes due to reduction in U.S. tax rate * |
|
|
8,000 |
|
|
|
7.7 |
% |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Foreign tax rate differential |
|
|
(5,031 |
) |
|
|
(4.8 |
)% |
|
|
(882 |
) |
|
|
(1.4 |
)% |
|
|
(1,181 |
) |
|
|
(3.1 |
)% |
U.S. tax on current year foreign earnings, net of foreign tax credits |
|
|
(2,726 |
) |
|
|
(2.6 |
)% |
|
|
(373 |
) |
|
|
(0.6 |
)% |
|
|
(948 |
) |
|
|
(2.5 |
)% |
Change in valuation allowance |
|
|
(796 |
) |
|
|
(0.8 |
)% |
|
|
1,230 |
|
|
|
1.9 |
% |
|
|
(944 |
) |
|
|
(2.5 |
)% |
Other adjustments, net |
|
|
627 |
|
|
|
0.6 |
% |
|
|
(1,672 |
) |
|
|
(2.6 |
)% |
|
|
(1,424 |
) |
|
|
(3.7 |
)% |
Income tax expense |
|
$ |
45,898 |
|
|
|
44.0 |
% |
|
$ |
21,250 |
|
|
|
32.8 |
% |
|
$ |
10,493 |
|
|
|
27.7 |
% |
* Includes $0.6 million increase to the valuation allowance related to the remeasurement of deferred taxes due to the reduction in U.S. tax rate.
The components of deferred income tax assets and liabilities included in the Consolidated Balance Sheets are as follows:
|
|
December 31, |
|
|||||
(in thousands) |
|
2017 |
|
|
2016 |
|
||
Deferred tax assets: |
|
|
|
|
|
|
|
|
Tax credit carryforwards |
|
$ |
6,654 |
|
|
$ |
11,380 |
|
Pension, compensation, and other employee benefits |
|
|
15,173 |
|
|
|
22,868 |
|
Provisions for losses |
|
|
5,826 |
|
|
|
10,235 |
|
Net operating loss carryforward |
|
|
5,195 |
|
|
|
5,023 |
|
State income taxes |
|
|
2,502 |
|
|
|
3,790 |
|
Other deferred income tax assets |
|
|
2,796 |
|
|
|
5,020 |
|
Total deferred tax assets |
|
|
38,146 |
|
|
|
58,316 |
|
Valuation allowance |
|
|
(4,010 |
) |
|
|
(3,998 |
) |
Foreign deferred tax assets included above |
|
|
(2,396 |
) |
|
|
(1,972 |
) |
Net deferred tax assets |
|
|
31,740 |
|
|
|
52,346 |
|
Deferred tax liabilities: |
|
|
|
|
|
|
|
|
Property and equipment |
|
|
(10,530 |
) |
|
|
(3,299 |
) |
Deferred tax related to life insurance |
|
|
(3,556 |
) |
|
|
(5,642 |
) |
Goodwill and other intangible assets |
|
|
(4,299 |
) |
|
|
(4,535 |
) |
Other deferred income tax liabilities |
|
|
(463 |
) |
|
|
(557 |
) |
Total deferred tax liabilities |
|
|
(18,848 |
) |
|
|
(14,033 |
) |
Foreign deferred tax liabilities included above |
|
|
7,869 |
|
|
|
2,852 |
|
United States net deferred tax assets |
|
$ |
20,761 |
|
|
$ |
41,165 |
|
(in thousands) |
|
Continuing Operations |
|
|
Discontinued Operations |
|
|
Total |
|
|||
Balance at December 31, 2014 |
|
$ |
1,283 |
|
|
$ |
636 |
|
|
$ |
1,919 |
|
Additions for tax positions taken in prior years |
|
|
43 |
|
|
|
— |
|
|
|
43 |
|
Reductions for tax positions taken in prior years |
|
|
(666 |
) |
|
|
— |
|
|
|
(666 |
) |
Reductions for lapse of applicable statutes |
|
|
(353 |
) |
|
|
— |
|
|
|
(353 |
) |
Balance at December 31, 2015 |
|
|
307 |
|
|
|
636 |
|
|
|
943 |
|
Additions for tax positions taken in prior years |
|
|
1,295 |
|
|
|
— |
|
|
|
1,295 |
|
Reductions for lapse of applicable statutes |
|
|
(43 |
) |
|
|
— |
|
|
|
(43 |
) |
Balance at December 31, 2016 |
|
|
1,559 |
|
|
|
636 |
|
|
|
2,195 |
|
Additions for tax positions taken in prior years |
|
|
43 |
|
|
|
— |
|
|
|
43 |
|
Reductions for lapse of applicable statutes |
|
|
(177 |
) |
|
|
(636 |
) |
|
|
(813 |
) |
Balance at December 31, 2017 |
|
$ |
1,425 |
|
|
$ |
— |
|
|
$ |
1,425 |
|
|
The components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) of our pension plans consist of the following:
|
|
December 31, |
|
|||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
Net periodic benefit cost: |
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
$ |
64 |
|
|
$ |
98 |
|
|
$ |
101 |
|
Interest cost |
|
|
803 |
|
|
|
1,032 |
|
|
|
1,018 |
|
Expected return on plan assets |
|
|
(176 |
) |
|
|
(256 |
) |
|
|
(380 |
) |
Recognized net actuarial loss |
|
|
433 |
|
|
|
423 |
|
|
|
492 |
|
Net periodic benefit cost |
|
|
1,124 |
|
|
|
1,297 |
|
|
|
1,231 |
|
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Net actuarial loss (gain) |
|
|
114 |
|
|
|
1 |
|
|
|
(963 |
) |
Reversal of amortization item: |
|
|
|
|
|
|
|
|
|
|
|
|
Net actuarial loss |
|
|
(433 |
) |
|
|
(423 |
) |
|
|
(492 |
) |
Total recognized in other comprehensive income (loss) |
|
|
(319 |
) |
|
|
(422 |
) |
|
|
(1,455 |
) |
Total recognized in net periodic benefit cost and other comprehensive income (loss) |
|
$ |
805 |
|
|
$ |
875 |
|
|
$ |
(224 |
) |
The components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) of our postretirement benefit plans consist of the following:
|
|
December 31, |
|
|||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
Net periodic benefit cost: |
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
$ |
92 |
|
|
$ |
99 |
|
|
$ |
152 |
|
Interest cost |
|
|
413 |
|
|
|
573 |
|
|
|
619 |
|
Amortization of prior service credit |
|
|
(431 |
) |
|
|
(503 |
) |
|
|
(552 |
) |
Recognized net actuarial loss |
|
|
164 |
|
|
|
295 |
|
|
|
528 |
|
Net periodic benefit cost |
|
|
238 |
|
|
|
464 |
|
|
|
747 |
|
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Net actuarial loss (gain) |
|
|
237 |
|
|
|
(790 |
) |
|
|
(1,248 |
) |
Prior service credit |
|
|
816 |
|
|
|
73 |
|
|
|
3 |
|
Reversal of amortization item: |
|
|
|
|
|
|
|
|
|
|
|
|
Net actuarial loss |
|
|
(164 |
) |
|
|
(295 |
) |
|
|
(528 |
) |
Prior service credit |
|
|
431 |
|
|
|
503 |
|
|
|
552 |
|
Total recognized in other comprehensive income (loss) |
|
|
1,320 |
|
|
|
(509 |
) |
|
|
(1,221 |
) |
Total recognized in net periodic benefit cost and other comprehensive income (loss) |
|
$ |
1,558 |
|
|
$ |
(45 |
) |
|
$ |
(474 |
) |
The components of net periodic benefit cost and other amounts recognized in other comprehensive income (loss) included the following:
|
|
December 31, |
|
|||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
Net periodic benefit cost: |
|
|
|
|
|
|
|
|
|
|
|
|
Service cost |
|
$ |
530 |
|
|
$ |
488 |
|
|
$ |
503 |
|
Interest cost |
|
|
492 |
|
|
|
488 |
|
|
|
505 |
|
Expected return on plan assets |
|
|
(602 |
) |
|
|
(558 |
) |
|
|
(583 |
) |
Recognized net actuarial loss |
|
|
155 |
|
|
|
162 |
|
|
|
160 |
|
Settlement |
|
|
777 |
|
|
|
— |
|
|
|
— |
|
Net periodic benefit cost |
|
|
1,352 |
|
|
|
580 |
|
|
|
585 |
|
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Net actuarial loss |
|
|
(106 |
) |
|
|
158 |
|
|
|
182 |
|
Reversal of amortization of net actuarial loss |
|
|
(155 |
) |
|
|
(162 |
) |
|
|
(160 |
) |
Total recognized in other comprehensive income (loss) |
|
|
(261 |
) |
|
|
(4 |
) |
|
|
22 |
|
Total recognized in net periodic benefit cost and other comprehensive income |
|
$ |
1,091 |
|
|
$ |
576 |
|
|
$ |
607 |
|
The following table indicates the funded status of the plans as of December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postretirement |
|
|||||
|
|
Funded Plans |
|
|
Unfunded Plans |
|
|
Benefit Plans |
|
|||||||||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||||
Change in benefit obligation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit obligation at beginning of year |
|
$ |
15,027 |
|
|
$ |
14,906 |
|
|
$ |
9,825 |
|
|
$ |
10,049 |
|
|
$ |
13,619 |
|
|
$ |
14,573 |
|
Service cost |
|
|
— |
|
|
|
— |
|
|
|
64 |
|
|
|
97 |
|
|
|
92 |
|
|
|
99 |
|
Interest cost |
|
|
492 |
|
|
|
629 |
|
|
|
311 |
|
|
|
403 |
|
|
|
413 |
|
|
|
573 |
|
Actuarial adjustments |
|
|
618 |
|
|
|
240 |
|
|
|
175 |
|
|
|
(221 |
) |
|
|
237 |
|
|
|
(790 |
) |
Plan amendments |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
816 |
|
|
|
73 |
|
Benefits paid |
|
|
(697 |
) |
|
|
(748 |
) |
|
|
(518 |
) |
|
|
(503 |
) |
|
|
(1,370 |
) |
|
|
(909 |
) |
Benefit obligation at end of year |
|
|
15,440 |
|
|
|
15,027 |
|
|
|
9,857 |
|
|
|
9,825 |
|
|
|
13,807 |
|
|
|
13,619 |
|
Change in plan assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of plan assets at beginning of year |
|
|
10,416 |
|
|
|
10,479 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Actual return on plan assets |
|
|
855 |
|
|
|
273 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Company contributions |
|
|
1,016 |
|
|
|
412 |
|
|
|
518 |
|
|
|
503 |
|
|
|
1,370 |
|
|
|
909 |
|
Benefits paid |
|
|
(697 |
) |
|
|
(748 |
) |
|
|
(518 |
) |
|
|
(503 |
) |
|
|
(1,370 |
) |
|
|
(909 |
) |
Fair value of plan assets at end of year |
|
|
11,590 |
|
|
|
10,416 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Funded status at end of year |
|
$ |
(3,850 |
) |
|
$ |
(4,611 |
) |
|
$ |
(9,857 |
) |
|
$ |
(9,825 |
) |
|
$ |
(13,807 |
) |
|
$ |
(13,619 |
) |
The following table represents the funded status of the plans as of December 31:
|
|
Funded Plans |
|
|
Unfunded Plans |
|
||||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||
Change in benefit obligation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefit obligation at beginning of year |
|
$ |
10,488 |
|
|
$ |
9,744 |
|
|
$ |
2,486 |
|
|
$ |
2,470 |
|
Service cost |
|
|
530 |
|
|
|
488 |
|
|
|
— |
|
|
|
— |
|
Interest cost |
|
|
406 |
|
|
|
400 |
|
|
|
87 |
|
|
|
87 |
|
Actuarial adjustments |
|
|
658 |
|
|
|
395 |
|
|
|
(54 |
) |
|
|
105 |
|
Benefits paid |
|
|
(3,231 |
) |
|
|
(818 |
) |
|
|
(182 |
) |
|
|
(177 |
) |
Translation adjustment |
|
|
670 |
|
|
|
279 |
|
|
|
245 |
|
|
|
1 |
|
Benefit obligation at end of year |
|
|
9,521 |
|
|
|
10,488 |
|
|
|
2,582 |
|
|
|
2,486 |
|
Change in plan assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair value of plan assets at beginning of year |
|
|
10,576 |
|
|
|
9,705 |
|
|
|
— |
|
|
|
— |
|
Actual return on plan assets |
|
|
764 |
|
|
|
617 |
|
|
|
— |
|
|
|
— |
|
Company contributions |
|
|
710 |
|
|
|
795 |
|
|
|
182 |
|
|
|
177 |
|
Benefits paid |
|
|
(3,231 |
) |
|
|
(818 |
) |
|
|
(182 |
) |
|
|
(177 |
) |
Translation adjustment |
|
|
674 |
|
|
|
277 |
|
|
|
— |
|
|
|
— |
|
Fair value of plan assets at end of year |
|
|
9,493 |
|
|
|
10,576 |
|
|
|
— |
|
|
|
— |
|
Funded status at end of year |
|
$ |
(28 |
) |
|
$ |
88 |
|
|
$ |
(2,582 |
) |
|
$ |
(2,486 |
) |
The net amounts recognized in the Consolidated Balance Sheets under the caption “Pension and postretirement benefits” as of December 31 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postretirement |
|
|||||
|
|
Funded Plans |
|
|
Unfunded Plans |
|
|
Benefit Plans |
|
|||||||||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||||
Other current liabilities |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
809 |
|
|
$ |
699 |
|
|
$ |
1,112 |
|
|
$ |
1,094 |
|
Non-current liabilities |
|
|
3,850 |
|
|
|
4,611 |
|
|
|
9,048 |
|
|
|
9,126 |
|
|
|
12,695 |
|
|
|
12,525 |
|
Net amount recognized |
|
$ |
3,850 |
|
|
$ |
4,611 |
|
|
$ |
9,857 |
|
|
$ |
9,825 |
|
|
$ |
13,807 |
|
|
$ |
13,619 |
|
The net amounts recognized in the Consolidated Balance Sheets under the caption “Pension and postretirement benefits” as of December 31 were as follows:
|
|
Funded Plans |
|
|
Unfunded Plans |
|
||||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||
Non-current assets |
|
$ |
(15 |
) |
|
$ |
(88 |
) |
|
$ |
— |
|
|
$ |
— |
|
Other current liabilities |
|
|
— |
|
|
|
— |
|
|
|
188 |
|
|
|
170 |
|
Non-current liabilities |
|
|
43 |
|
|
|
— |
|
|
|
2,394 |
|
|
|
2,316 |
|
Net amount recognized |
|
$ |
28 |
|
|
$ |
(88 |
) |
|
$ |
2,582 |
|
|
$ |
2,486 |
|
Amounts recognized in AOCI as of December 31 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postretirement |
|
|
|
|
|
|
|
|
|
|||||
|
|
Funded Plans |
|
|
Unfunded Plans |
|
|
Benefit Plans |
|
|
Total |
|
|
Total |
|
|||||||||||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||||||
Net actuarial loss |
|
$ |
8,681 |
|
|
$ |
9,090 |
|
|
$ |
2,587 |
|
|
$ |
2,496 |
|
|
$ |
2,784 |
|
|
$ |
2,710 |
|
|
$ |
14,052 |
|
|
$ |
14,296 |
|
Prior service credit |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(351 |
) |
|
|
(1,598 |
) |
|
|
(351 |
) |
|
|
(1,598 |
) |
Subtotal |
|
|
8,681 |
|
|
|
9,090 |
|
|
|
2,587 |
|
|
|
2,496 |
|
|
|
2,433 |
|
|
|
1,112 |
|
|
|
13,701 |
|
|
|
12,698 |
|
Less tax effect |
|
|
(3,292 |
) |
|
|
(3,447 |
) |
|
|
(981 |
) |
|
|
(947 |
) |
|
|
(923 |
) |
|
|
(422 |
) |
|
|
(5,196 |
) |
|
|
(4,816 |
) |
Total |
|
$ |
5,389 |
|
|
$ |
5,643 |
|
|
$ |
1,606 |
|
|
$ |
1,549 |
|
|
$ |
1,510 |
|
|
$ |
690 |
|
|
$ |
8,505 |
|
|
$ |
7,882 |
|
The fair value of the domestic plans’ assets by asset class are as follows:
|
|
|
|
|
|
Fair Value Measurements at December 31, 2017 |
|
|||||||||
|
|
|
|
|
|
Quoted Prices in Active Markets |
|
|
Significant Other Observable Inputs |
|
|
Significant Unobservable Inputs |
|
|||
(in thousands) |
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
||||
Domestic pension plans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed income securities |
|
$ |
5,787 |
|
|
$ |
5,787 |
|
|
$ |
— |
|
|
$ |
— |
|
Equity securities |
|
|
5,390 |
|
|
|
5,390 |
|
|
|
— |
|
|
|
— |
|
Cash |
|
|
214 |
|
|
|
214 |
|
|
|
— |
|
|
|
— |
|
Other |
|
|
199 |
|
|
|
— |
|
|
|
199 |
|
|
|
— |
|
Total |
|
$ |
11,590 |
|
|
$ |
11,391 |
|
|
$ |
199 |
|
|
$ |
— |
|
|
|
|
|
|
|
Fair Value Measurements at December 31, 2016 |
|
|||||||||
|
|
|
|
|
|
Quoted Prices in Active Markets |
|
|
Significant Other Observable Inputs |
|
|
Significant Unobservable Inputs |
|
|||
(in thousands) |
|
Total |
|
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
||||
Domestic pension plans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed income securities |
|
$ |
5,352 |
|
|
$ |
5,352 |
|
|
$ |
— |
|
|
$ |
— |
|
Equity securities |
|
|
4,580 |
|
|
|
4,580 |
|
|
|
— |
|
|
|
— |
|
Cash |
|
|
280 |
|
|
|
280 |
|
|
|
— |
|
|
|
— |
|
Other |
|
|
204 |
|
|
|
— |
|
|
|
204 |
|
|
|
— |
|
Total |
|
$ |
10,416 |
|
|
$ |
10,212 |
|
|
$ |
204 |
|
|
$ |
— |
|
The fair value information related to the foreign pension plans’ assets is summarized in the following tables:
|
|
|
|
|
|
Fair Value Measurements at Reporting Date Using |
|
|||||||||
(in thousands) |
|
December 31, 2017 |
|
|
Quoted Prices in Active Markets (Level 1) |
|
|
Significant Other Observable Inputs (Level 2) |
|
|
Significant Unobserved Inputs (Level 3) |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed income securities |
|
$ |
4,414 |
|
|
$ |
4,414 |
|
|
$ |
— |
|
|
$ |
— |
|
Equity securities |
|
|
4,889 |
|
|
|
4,466 |
|
|
|
423 |
|
|
|
— |
|
Other |
|
|
190 |
|
|
|
190 |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
9,493 |
|
|
$ |
9,070 |
|
|
$ |
423 |
|
|
$ |
— |
|
|
|
|
|
|
|
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 Unobserved Inputs (Level 3) |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed income securities |
|
$ |
4,082 |
|
|
$ |
4,082 |
|
|
$ |
— |
|
|
$ |
— |
|
Equity securities |
|
|
4,518 |
|
|
|
4,130 |
|
|
|
388 |
|
|
|
— |
|
Other |
|
|
1,976 |
|
|
|
1,976 |
|
|
|
— |
|
|
|
— |
|
Total |
|
$ |
10,576 |
|
|
$ |
10,188 |
|
|
$ |
388 |
|
|
$ |
— |
|
The following pension and postretirement benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
(in thousands) |
|
Funded Plans |
|
|
Unfunded Plans |
|
|
Postretirement Benefit Plans |
|
|||
2018 |
|
$ |
1,434 |
|
|
$ |
823 |
|
|
$ |
1,132 |
|
2019 |
|
$ |
927 |
|
|
$ |
738 |
|
|
$ |
1,127 |
|
2020 |
|
$ |
997 |
|
|
$ |
740 |
|
|
$ |
1,100 |
|
2021 |
|
$ |
921 |
|
|
$ |
725 |
|
|
$ |
1,066 |
|
2022 |
|
$ |
990 |
|
|
$ |
709 |
|
|
$ |
1,039 |
|
2023-2027 |
|
$ |
4,859 |
|
|
$ |
3,259 |
|
|
$ |
4,685 |
|
The following payments, which reflect expected future service, as appropriate, are expected to be paid:
(in thousands) |
|
Funded Plans |
|
|
Unfunded Plans |
|
||
2018 |
|
$ |
365 |
|
|
$ |
191 |
|
2019 |
|
$ |
376 |
|
|
$ |
190 |
|
2020 |
|
$ |
378 |
|
|
$ |
190 |
|
2021 |
|
$ |
396 |
|
|
$ |
190 |
|
2022 |
|
$ |
496 |
|
|
$ |
189 |
|
2023-2027 |
|
$ |
2,499 |
|
|
$ |
935 |
|
The accumulated benefit obligations in excess of plan assets as of December 31 were as follows:
|
|
Domestic Plans |
|
|||||||||||||
|
|
Funded Plans |
|
|
Unfunded Plans |
|
||||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||
Projected benefit obligation |
|
$ |
15,440 |
|
|
$ |
15,027 |
|
|
$ |
9,857 |
|
|
$ |
9,825 |
|
Accumulated benefit obligation |
|
$ |
15,440 |
|
|
$ |
15,027 |
|
|
$ |
9,826 |
|
|
$ |
9,737 |
|
Fair value of plan assets |
|
$ |
11,590 |
|
|
$ |
10,416 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
Foreign Plans |
|
|||||||||||||
|
|
Funded Plans |
|
|
Unfunded Plans |
|
||||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||
Projected benefit obligation |
|
$ |
9,521 |
|
|
$ |
10,488 |
|
|
$ |
2,582 |
|
|
$ |
2,486 |
|
Accumulated benefit obligation |
|
$ |
8,819 |
|
|
$ |
9,906 |
|
|
$ |
2,582 |
|
|
$ |
2,486 |
|
Fair value of plan assets |
|
$ |
9,493 |
|
|
$ |
10,576 |
|
|
$ |
— |
|
|
$ |
— |
|
Weighted-average assumptions used to determine benefit obligations as of December 31 were as follows:
|
|
Domestic Plans |
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
Funded Plans |
|
|
Unfunded Plans |
|
|
Postretirement Benefit Plans |
|
|
Foreign Plans |
|
||||||||||||||||||||
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||||||
Discount rate |
|
|
3.63 |
% |
|
|
4.12 |
% |
|
|
3.55 |
% |
|
|
3.99 |
% |
|
|
3.59 |
% |
|
|
4.08 |
% |
|
|
3.15 |
% |
|
|
3.52 |
% |
Rate of compensation increase |
|
N/A |
|
|
N/A |
|
|
|
3.00 |
% |
|
|
3.00 |
% |
|
N/A |
|
|
N/A |
|
|
|
2.26 |
% |
|
|
2.34 |
% |
Weighted-average assumptions used to determine net periodic benefit costs as of December 31 were as follows:
|
|
Domestic Plans |
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
|
Funded Plans |
|
|
Unfunded Plans |
|
|
Postretirement Benefit Plans |
|
|
Foreign Plans |
|
||||||||||||||||||||
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
|
2017 |
|
|
2016 |
|
||||||||
Discount rate |
|
|
4.07 |
% |
|
|
4.33 |
% |
|
|
3.99 |
% |
|
|
4.25 |
% |
|
|
4.08 |
% |
|
|
4.30 |
% |
|
|
3.71 |
% |
|
|
3.77 |
% |
Expected return on plan assets |
|
|
5.50 |
% |
|
|
2.25 |
% |
|
N/A |
|
|
N/A |
|
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
5.09 |
% |
|
|
4.53 |
% |
||
Rate of compensation increase |
|
N/A |
|
|
N/A |
|
|
|
3.00 |
% |
|
|
3.00 |
% |
|
N/A |
|
|
N/A |
|
|
|
2.26 |
% |
|
|
2.34 |
% |
The “FIP/RP Status Pending/Implemented” column indicates plans for which a financial improvement plan or a rehabilitation plan is either pending or has been implemented.
|
|
|
|
Plan |
|
|
Pension Protection Act Zone Status |
|
FIP/RP Status Pending/ Implemented |
|
Viad Contributions |
|
|
Surcharge Paid |
|
Expiration Date of Collective- Bargaining Agreement(s) |
||||||||||||
(in thousands) |
|
EIN |
|
No. |
|
|
2017 |
|
2016 |
|
|
|
2017 |
|
|
2016 |
|
|
2015 |
|
|
|
|
|
||||
Pension Fund: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Western Conference of Teamsters Pension Plan |
|
91-6145047 |
|
|
1 |
|
|
Green |
|
Green |
|
No |
|
$ |
7,809 |
|
|
$ |
6,684 |
|
|
$ |
5,632 |
|
|
No |
|
3/31/2020 |
Southern California Local 831—Employer Pension Fund(1) |
|
95-6376874 |
|
|
1 |
|
|
Green |
|
Green |
|
No |
|
|
3,087 |
|
|
|
2,805 |
|
|
|
2,485 |
|
|
No |
|
8/31/2019 |
Chicago Regional Council of Carpenters Pension Fund |
|
36-6130207 |
|
|
1 |
|
|
Green |
|
Yellow |
|
Yes |
|
|
2,390 |
|
|
|
2,532 |
|
|
|
1,887 |
|
|
No |
|
5/31/2019 |
IBEW Local Union No 357 Pension Plan A |
|
88-6023284 |
|
|
1 |
|
|
Green |
|
Green |
|
No |
|
|
1,682 |
|
|
|
1,402 |
|
|
|
1,150 |
|
|
No |
|
6/16/2018 |
Electrical Contractors Assoc. Chicago Local Union 134, IBEW Joint Pension Trust of Chicago Plan #2 |
|
51-6030753 |
|
|
2 |
|
|
Green |
|
Green |
|
No |
|
|
1,099 |
|
|
|
845 |
|
|
|
1,190 |
|
|
No |
|
6/6/2021 |
Central States, Southeast and Southwest Areas Pension Plan |
|
36-6044243 |
|
|
1 |
|
|
Red |
|
Red |
|
Yes |
|
|
1,060 |
|
|
|
1,151 |
|
|
|
948 |
|
|
No |
|
12/31/2018 |
Southern California IBEW-NECA Pension Fund |
|
95-6392774 |
|
|
1 |
|
|
Yellow |
|
Yellow |
|
Yes |
|
|
905 |
|
|
|
701 |
|
|
|
835 |
|
|
Yes |
|
continuous |
Southwest Carpenters Pension Trust |
|
95-6042875 |
|
|
1 |
|
|
Green |
|
Green |
|
No |
|
|
883 |
|
|
|
791 |
|
|
|
750 |
|
|
No |
|
6/30/2018 |
New England Teamsters & Trucking Industry Pension |
|
04-6372430 |
|
|
1 |
|
|
Red |
|
Red |
|
Yes |
|
|
772 |
|
|
|
552 |
|
|
|
381 |
|
|
No |
|
3/31/2022 |
Machinery Movers Riggers & Mach Erect Local 136 Supplemental Retirement Plan(1) |
|
36-1416355 |
|
|
11 |
|
|
Red |
|
Red |
|
Yes |
|
|
719 |
|
|
|
1,203 |
|
|
|
502 |
|
|
Yes |
|
6/30/2019 |
Sign Pictorial & Display Industry Pension Plan(1) |
|
94-6278490 |
|
|
1 |
|
|
Green |
|
Green |
|
No |
|
|
654 |
|
|
|
526 |
|
|
|
541 |
|
|
No |
|
3/31/2018 |
All other funds(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,900 |
|
|
|
3,585 |
|
|
|
4,259 |
|
|
|
|
|
Total contributions to defined benefit plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,960 |
|
|
|
22,777 |
|
|
|
20,560 |
|
|
|
|
|
Total contributions to other plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,613 |
|
|
|
2,995 |
|
|
|
1,428 |
|
|
|
|
|
Total contributions to multi-employer plans |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
26,573 |
|
|
$ |
25,772 |
|
|
$ |
21,988 |
|
|
|
|
|
(1) |
We contributed more than 5% of total plan contributions for the 2016 and 2015 plan years based on the plans’ Form 5500s. |
(2) |
Represents participation in 35 pension funds during 2017. |
|
Changes to the restructuring liability by major restructuring activity are as follows:
|
|
GES Consolidation |
|
|
Other Restructurings |
|
|
|
|
|
||||||
(in thousands) |
|
Severance & Employee Benefits |
|
|
Facilities |
|
|
Severance & Employee Benefits |
|
|
Total |
|
||||
Balance at December 31, 2014 |
|
$ |
543 |
|
|
$ |
1,161 |
|
|
$ |
240 |
|
|
$ |
1,944 |
|
Restructuring charges |
|
|
1,767 |
|
|
|
587 |
|
|
|
602 |
|
|
|
2,956 |
|
Cash payments |
|
|
(1,514 |
) |
|
|
(457 |
) |
|
|
(601 |
) |
|
|
(2,572 |
) |
Adjustment to liability |
|
|
(45 |
) |
|
|
— |
|
|
|
(7 |
) |
|
|
(52 |
) |
Balance at December 31, 2015 |
|
|
751 |
|
|
|
1,291 |
|
|
|
234 |
|
|
|
2,276 |
|
Restructuring charges |
|
|
3,693 |
|
|
|
759 |
|
|
|
731 |
|
|
|
5,183 |
|
Cash payments |
|
|
(2,170 |
) |
|
|
(1,150 |
) |
|
|
(546 |
) |
|
|
(3,866 |
) |
Adjustment to liability |
|
|
— |
|
|
|
192 |
|
|
|
(3 |
) |
|
|
189 |
|
Balance at December 31, 2016 |
|
|
2,274 |
|
|
|
1,092 |
|
|
|
416 |
|
|
|
3,782 |
|
Restructuring charges |
|
|
442 |
|
|
|
265 |
|
|
|
297 |
|
|
|
1,004 |
|
Cash payments |
|
|
(1,165 |
) |
|
|
(550 |
) |
|
|
(538 |
) |
|
|
(2,253 |
) |
Adjustment to liability |
|
|
— |
|
|
|
— |
|
|
|
16 |
|
|
|
16 |
|
Balance at December 31, 2017 |
|
$ |
1,551 |
|
|
$ |
807 |
|
|
$ |
191 |
|
|
$ |
2,549 |
|
|
As of December 31, 2017, our future minimum rental payments and related sublease rentals receivable with respect to non-cancelable operating leases with terms in excess of one year were as follows:
(in thousands) |
|
Rental Payments |
|
|
Receivable Under Subleases |
|
||
2018 |
|
$ |
23,503 |
|
|
$ |
2,627 |
|
2019 |
|
|
20,299 |
|
|
|
2,384 |
|
2020 |
|
|
17,265 |
|
|
|
2,209 |
|
2021 |
|
|
8,812 |
|
|
|
2,267 |
|
2022 |
|
|
5,555 |
|
|
|
2,195 |
|
Thereafter |
|
|
81,135 |
|
|
|
3,657 |
|
Total |
|
$ |
156,569 |
|
|
$ |
15,339 |
|
Net rent expense under operating leases consisted of the following:
|
|
December 31, |
|
|||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
Minimum rentals |
|
$ |
56,575 |
|
|
$ |
48,465 |
|
|
$ |
41,564 |
|
Sublease rentals |
|
|
(1,525 |
) |
|
|
(2,831 |
) |
|
|
(3,457 |
) |
Total rentals, net |
|
$ |
55,050 |
|
|
$ |
45,634 |
|
|
$ |
38,107 |
|
|
Changes in redeemable noncontrolling interests are as follows:
(in thousands) |
|
|
|
|
Balance at December 31, 2016 |
|
$ |
— |
|
Redeemable noncontrolling interest related to 2017 acquisition |
|
|
6,735 |
|
Adjustment to the redemption value |
|
|
(30 |
) |
Foreign currency translation adjustment |
|
|
(57 |
) |
Balance at December 31, 2017 |
|
$ |
6,648 |
|
|
Our reportable segments, with reconciliations to consolidated totals, are as follows:
|
|
|
|
|||||||||
|
|
Year Ended December 31, |
|
|||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
GES: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
$ |
872,154 |
|
|
$ |
826,408 |
|
|
$ |
720,882 |
|
International |
|
|
282,712 |
|
|
|
248,503 |
|
|
|
272,634 |
|
Intersegment eliminations |
|
|
(21,769 |
) |
|
|
(20,172 |
) |
|
|
(16,638 |
) |
Total GES |
|
|
1,133,097 |
|
|
|
1,054,739 |
|
|
|
976,878 |
|
Pursuit |
|
|
173,868 |
|
|
|
153,364 |
|
|
|
112,170 |
|
Corporate eliminations (1) |
|
|
— |
|
|
|
(3,133 |
) |
|
|
— |
|
Total revenue |
|
$ |
1,306,965 |
|
|
$ |
1,204,970 |
|
|
$ |
1,089,048 |
|
Segment operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
GES: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
$ |
34,494 |
|
|
$ |
40,524 |
|
|
$ |
14,563 |
|
International |
|
|
15,475 |
|
|
|
9,699 |
|
|
|
12,211 |
|
Total GES |
|
|
49,969 |
|
|
|
50,223 |
|
|
|
26,774 |
|
Pursuit |
|
|
47,082 |
|
|
|
35,705 |
|
|
|
27,810 |
|
Segment operating income |
|
|
97,051 |
|
|
|
85,928 |
|
|
|
54,584 |
|
Corporate eliminations (1) |
|
|
67 |
|
|
|
(743 |
) |
|
|
— |
|
Corporate activities |
|
|
(12,877 |
) |
|
|
(10,322 |
) |
|
|
(9,720 |
) |
Operating income |
|
|
84,241 |
|
|
|
74,863 |
|
|
|
44,864 |
|
Interest income |
|
|
319 |
|
|
|
1,165 |
|
|
|
658 |
|
Interest expense |
|
|
(8,304 |
) |
|
|
(5,898 |
) |
|
|
(4,535 |
) |
Restructuring recoveries (charges): |
|
|
|
|
|
|
|
|
|
|
|
|
GES U.S. |
|
|
354 |
|
|
|
(2,893 |
) |
|
|
(541 |
) |
GES International |
|
|
(1,061 |
) |
|
|
(1,559 |
) |
|
|
(1,813 |
) |
Pursuit |
|
|
(86 |
) |
|
|
(171 |
) |
|
|
(200 |
) |
Corporate |
|
|
(211 |
) |
|
|
(560 |
) |
|
|
(402 |
) |
Impairment recoveries (charges): |
|
|
|
|
|
|
|
|
|
|
|
|
Pursuit |
|
|
29,098 |
|
|
|
(218 |
) |
|
|
(96 |
) |
Income from continuing operations before income taxes |
|
$ |
104,350 |
|
|
$ |
64,729 |
|
|
$ |
37,935 |
|
(1) |
Corporate eliminations during 2017 represent the elimination of depreciation expense recorded by Pursuit associated with previously eliminated intercompany profit realized by GES for renovations to Pursuit’s Banff Gondola. Corporate eliminations recorded during 2016 represent the elimination of intercompany revenue and profit realized by GES for work completed on renovations to Pursuit’s Banff Gondola. |
|
|
December 31, |
|
|||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
GES: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
$ |
380,909 |
|
|
$ |
380,951 |
|
|
$ |
294,618 |
|
International |
|
|
135,917 |
|
|
|
109,705 |
|
|
|
115,494 |
|
Pursuit |
|
|
350,256 |
|
|
|
301,941 |
|
|
|
195,527 |
|
Corporate and other |
|
|
52,817 |
|
|
|
77,219 |
|
|
|
85,084 |
|
|
|
$ |
919,899 |
|
|
$ |
869,816 |
|
|
$ |
690,723 |
|
Depreciation and amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
GES: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
$ |
29,088 |
|
|
$ |
21,473 |
|
|
$ |
18,658 |
|
International |
|
|
8,176 |
|
|
|
8,092 |
|
|
|
8,435 |
|
Pursuit |
|
|
17,653 |
|
|
|
12,967 |
|
|
|
7,974 |
|
Corporate and other |
|
|
197 |
|
|
|
211 |
|
|
|
164 |
|
|
|
$ |
55,114 |
|
|
$ |
42,743 |
|
|
$ |
35,231 |
|
Capital expenditures: |
|
|
|
|
|
|
|
|
|
|
|
|
GES: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. |
|
$ |
17,337 |
|
|
$ |
14,291 |
|
|
$ |
8,066 |
|
International |
|
|
8,084 |
|
|
|
5,033 |
|
|
|
8,366 |
|
Pursuit |
|
|
30,786 |
|
|
|
31,861 |
|
|
|
13,107 |
|
Corporate and other(1) |
|
|
414 |
|
|
|
(1,370 |
) |
|
|
300 |
|
|
|
$ |
56,621 |
|
|
$ |
49,815 |
|
|
$ |
29,839 |
|
(1) |
The 2016 amount includes an intercompany elimination for work completed by GES on renovations to Pursuit’s Banff Gondola. |
The table below presents the financial information by major geographic area:
|
|
December 31, |
|
|||||||||
(in thousands) |
|
2017 |
|
|
2016 |
|
|
2015 |
|
|||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
913,210 |
|
|
$ |
855,304 |
|
|
$ |
726,436 |
|
EMEA |
|
|
209,824 |
|
|
|
205,028 |
|
|
|
220,046 |
|
Canada |
|
|
183,931 |
|
|
|
144,638 |
|
|
|
142,566 |
|
Total revenue |
|
$ |
1,306,965 |
|
|
$ |
1,204,970 |
|
|
$ |
1,089,048 |
|
Long-lived assets: |
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
180,345 |
|
|
$ |
182,611 |
|
|
$ |
139,479 |
|
EMEA |
|
|
43,630 |
|
|
|
37,083 |
|
|
|
15,714 |
|
Canada |
|
|
129,108 |
|
|
|
104,461 |
|
|
|
71,677 |
|
Total long-lived assets |
|
$ |
353,083 |
|
|
$ |
324,155 |
|
|
$ |
226,870 |
|
|
The following table sets forth selected unaudited consolidated quarterly financial information:
|
|
2017 |
|
|
2016 |
|
||||||||||||||||||||||||||
(in thousands, except per share data) |
|
First Quarter |
|
|
Second Quarter |
|
|
Third Quarter |
|
|
Fourth Quarter |
|
|
First Quarter |
|
|
Second Quarter |
|
|
Third Quarter |
|
|
Fourth Quarter |
|
||||||||
Revenue: |
|
$ |
325,807 |
|
|
$ |
364,774 |
|
|
$ |
339,099 |
|
|
$ |
277,285 |
|
|
$ |
241,362 |
|
|
$ |
324,747 |
|
|
$ |
382,465 |
|
|
$ |
256,396 |
|
Operating income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ongoing operations (1) |
|
$ |
12,684 |
|
|
$ |
39,402 |
|
|
$ |
47,066 |
|
|
$ |
(4,726 |
) |
|
$ |
(6,280 |
) |
|
$ |
34,014 |
|
|
$ |
58,917 |
|
|
$ |
(1,466 |
) |
Corporate activities |
|
|
(2,610 |
) |
|
|
(3,008 |
) |
|
|
(4,474 |
) |
|
|
(2,785 |
) |
|
|
(1,911 |
) |
|
|
(2,707 |
) |
|
|
(2,772 |
) |
|
|
(2,932 |
) |
Restructuring charges |
|
|
(394 |
) |
|
|
(168 |
) |
|
|
(255 |
) |
|
|
(187 |
) |
|
|
(992 |
) |
|
|
(975 |
) |
|
|
(1,697 |
) |
|
|
(1,519 |
) |
Impairment recoveries (charges) |
|
|
2,384 |
|
|
|
2,247 |
|
|
|
24,467 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(120 |
) |
|
|
(98 |
) |
Operating income (loss) |
|
$ |
12,064 |
|
|
$ |
38,473 |
|
|
$ |
66,804 |
|
|
$ |
(7,698 |
) |
|
$ |
(9,183 |
) |
|
$ |
30,332 |
|
|
$ |
54,328 |
|
|
$ |
(6,015 |
) |
Income (loss) from continuing operations attributable to Viad |
|
$ |
7,593 |
|
|
$ |
27,438 |
|
|
$ |
44,758 |
|
|
$ |
(21,814 |
) |
|
$ |
(6,797 |
) |
|
$ |
19,873 |
|
|
$ |
34,013 |
|
|
$ |
(4,136 |
) |
Net income (loss) attributable to Viad |
|
$ |
6,777 |
|
|
$ |
27,947 |
|
|
$ |
44,657 |
|
|
$ |
(21,674 |
) |
|
$ |
(6,983 |
) |
|
$ |
19,509 |
|
|
$ |
33,792 |
|
|
$ |
(4,049 |
) |
Basic and Diluted income (loss) per common share: (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations attributable to Viad |
|
$ |
0.37 |
|
|
$ |
1.35 |
|
|
$ |
2.19 |
|
|
$ |
(1.08 |
) |
|
$ |
(0.34 |
) |
|
$ |
0.98 |
|
|
$ |
1.68 |
|
|
$ |
(0.21 |
) |
Net income (loss) attributable to Viad common stockholders |
|
$ |
0.33 |
|
|
$ |
1.37 |
|
|
$ |
2.19 |
|
|
$ |
(1.07 |
) |
|
$ |
(0.35 |
) |
|
$ |
0.96 |
|
|
$ |
1.67 |
|
|
$ |
(0.20 |
) |
(1) |
Represents revenue less costs of services and cost of products sold. |
(2) |
The sum of quarterly income per share amounts may not equal annual income per share due to rounding. |
|
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