UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

~~(Mark One)~~

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2017~~2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to

Commission file number: 001-11015

Viad Corp

(Exact name of registrant as specified in its charter)

Delaware		36-1169950
(State or other jurisdiction of incorporation or ~~organization~~organization)		(I.R.S. Employer Identification No.)

~~1850 North Central~~7000 East 1st Avenue ~~Suite 1900~~ ~~Phoenix,~~Scottsdale, Arizona		~~85004-4565~~85251-4304
(Address of principal executive offices)		(Zip Code)

(602) 207-1000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address, and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $1.50 Par Value

VVI

New York Stock Exchange

Preferred Stock Purchase Rights

New York Stock Exchange

Indicate by check mark whether the ~~registrant~~registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files.) Yes ☒ No ☐

Indicate by check mark whether registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐		~~Emerging growth company~~	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~October 27, 2017,~~August 2, 2021, there were ~~20,411,480~~20,493,380 shares of Common Stock ($1.50 par value) outstanding.

INDEX

		Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020	1
	Condensed Consolidated Statements of Operations for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020	2
	Condensed Consolidated Statements of Comprehensive ~~Income~~Loss for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020	3
	Condensed Consolidated Statements of ~~Cash Flows~~Stockholders’ Equity and Mezzanine Equity for the ~~Nine~~Three Months Ended ~~September~~March 31 and June 30, ~~2017~~2021 and ~~2016~~2020	4
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2021 and 2020	6
	Notes to Condensed Consolidated Financial Statements	57
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2331
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3742
Item 4.	Controls and Procedures	3842
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	3943
Item 1A.	Risk Factors	3943
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3943
Item 5.6.	~~Other Information~~Exhibits	3944
~~Item 6.~~Items 3-5	~~Exhibits~~Not applicable	40

SIGNATURES		4045

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

PART I - ~~FINANCI~~ALFINANCIAL INFORMATION

Item 1. Financial Statements

VIAD CORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30,			December 31,			June 30,			December 31,
(in thousands, except share data)	2017			2016			2021			2020
Assets
Current assets
Cash and cash equivalents	$	53,481		$	20,900		$	37,037		$	39,545
Accounts receivable, net of allowances for doubtful accounts of $1,897 and $1,342, respectively		129,105			104,648
Accounts receivable, net of allowances for doubtful accounts of $1,710 and $5,310, respectively								24,696			17,837
Inventories		39,753			31,420			11,424			8,727
Current contract costs								12,331			7,923
Other current assets		23,973			18,449			22,822			17,225
Total current assets		246,312			175,417			108,310			91,257
Property and equipment, net		295,757			279,858			551,114			492,154
Other investments and assets		46,745			44,297			16,090			15,492
Operating lease right-of-use assets								84,175			82,739
Deferred income taxes		34,391			42,549			—			563
Goodwill		263,919			254,022			114,566			99,847
Other intangible assets, net		65,672			73,673			70,221			71,172
Total Assets	$	952,796		$	869,816		$	944,476		$	853,224
Liabilities and Stockholders’ Equity
Liabilities, Mezzanine Equity, and Stockholders’ Equity
Current liabilities
Accounts payable	$	88,510		$	67,596		$	31,763		$	21,037
Customer deposits		53,093			42,723
Contract liabilities								46,472			18,595
Accrued compensation		28,094			29,913			15,534			7,030
Operating lease obligations								11,422			15,697
Other current liabilities		52,318			30,390			26,779			27,039
Current portion of debt and capital lease obligations		124,574			174,968
Current portion of debt and finance lease obligations								3,349			8,335
Total current liabilities		346,589			345,590			135,319			97,733
Long-term debt and capital lease obligations		60,627			74,243
Long-term debt and finance lease obligations								393,964			285,356
Pension and postretirement benefits		26,826			28,611			26,911			27,264
Long-term operating lease obligations								81,727			70,150
Other deferred items and liabilities		50,260			50,734			66,072			64,628
Total liabilities		484,302			499,178			703,993			545,131
Commitments and contingencies
Convertible Series A Preferred Stock, $0.01 par value, 180,000 shares authorized, 135,000 shares issued and outstanding								132,591			128,769
Redeemable noncontrolling interest								5,325			5,225
Stockholders’ equity
Viad Corp stockholders’ equity:
Common stock, $1.50 par value, 200,000,000 shares authorized, 24,934,981 shares issued and outstanding		37,402			37,402			37,402			37,402
Additional capital		573,660			573,841			566,658			568,100
Retained earnings		89,552			16,291
Unearned employee benefits and other		239			172
Accumulated other comprehensive income (loss):
Unrealized gain on investments		564			421
Cumulative foreign currency translation adjustments		(10,264	)		(29,084	)
Unrecognized net actuarial loss and prior service credit, net		(10,544	)		(10,728	)
Common stock in treasury, at cost, 4,519,023 and 4,613,520 shares, respectively		(226,145	)		(230,960	)
Total Viad Corp stockholders’ equity		454,464			357,355
Noncontrolling interest		14,030			13,283
Accumulated deficit								(338,343	)		(253,164	)
Accumulated other comprehensive loss								(22,865	)		(30,641	)
Common stock in treasury, at cost, 4,445,057 and 4,475,489 shares, respectively								(224,101	)		(225,742	)
Total Viad stockholders’ equity								18,751			95,955
Non-redeemable noncontrolling interest								83,816			78,144
Total stockholders’ equity		468,494			370,638			102,567			174,099
Total Liabilities and Stockholders’ Equity	$	952,796		$	869,816
Total Liabilities, Mezzanine Equity, and Stockholders’ Equity							$	944,476		$	853,224

Refer to Notes to Condensed Consolidated Financial Statements.

VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in thousands, except per share data)

2017

2016

2017

2016

Revenue:

Exhibition and event services

$
198,868

$
240,278

$
750,111

$
681,592

Exhibits and environments

33,251

44,785

119,988

123,871

Pursuit services

106,980

97,402

159,581

143,111

Total revenue

339,099

382,465

1,029,680

948,574

Costs and expenses:

Costs of services

254,963

278,764

813,456

743,032

Costs of products sold

37,070

44,784

117,072

118,891

Business interruption gain

(1,091
)

—

(2,231
)

—

Corporate activities

4,474

2,772

10,092

7,390

Interest income

(74
)

(44
)

(174
)

(138
)
Interest expense

2,117

1,489

6,281

4,109

Restructuring charges

255

1,697

817

3,664

Impairment charges (recoveries)

(24,467
)

120

(29,098
)

120

Total costs and expenses

273,247

329,582

916,215

877,068

Income from continuing operations before income taxes

65,852

52,883

113,465

71,506

Income tax expense

20,010

17,878

32,929

23,652

Income from continuing operations

45,842

35,005

80,536

47,854

Loss from discontinued operations

(101
)

(221
)

(408
)

(771
)
Net income

45,741

34,784

80,128

47,083

Net income attributable to noncontrolling interest

(1,084
)

(992
)

(747
)

(765
)
Net income attributable to Viad

$
44,657

$
33,792

$
79,381

$
46,318

Diluted income per common share:

Continuing operations attributable to Viad common stockholders

$
2.19

$
1.68

$
3.91

$
2.33

Discontinued operations attributable to Viad common stockholders

—

(0.01
)

(0.02
)

(0.04
)
Net income attributable to Viad common stockholders

$
2.19

$
1.67

$
3.89

$
2.29

Weighted-average outstanding and potentially dilutive common
shares

20,436

20,207

20,382

20,150

Basic income per common share:

Continuing operations attributable to Viad common stockholders

$
2.19

$
1.68

$
3.91

$
2.33

Discontinued operations attributable to Viad common stockholders

—

(0.01
)

(0.02
)

(0.04
)
Net income attributable to Viad common stockholders

$
2.19

$
1.67

$
3.89

$
2.29

Weighted-average outstanding common shares

20,166

20,017

20,130

19,972

Dividends declared per common share

$
0.10

$
0.10

$
0.30

$
0.30

Amounts attributable to Viad common stockholders

Income from continuing operations

$
44,758

$
34,013

$
79,789

$
47,089

Loss from discontinued operations

(101
)

(221
)

(408
)

(771
)
Net income

$
44,657

$
33,792

$
79,381

$
46,318

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands, except per share data)	2021			2020			2021			2020
Revenue:
Services	$	46,306		$	25,409		$	71,206		$	289,615
Products		14,927			4,658			18,962			35,110
Total revenue		61,233			30,067			90,168			324,725
Costs and expenses:
Costs of services		76,052			68,584			132,420			341,636
Costs of products		20,157			11,219			30,932			42,225
Corporate activities		3,006			2,468			5,011			3,257
Interest income		(22	)		(176	)		(55	)		(255	)
Interest expense		5,587			5,186			10,705			9,204
Multi-employer pension plan withdrawal		57			462			57			462
Other expense, net		680			265			1,040			684
Restructuring charges		787			260			3,613			1,111
Impairment charges		—			114,020			—			202,400
Total costs and expenses		106,304			202,288			183,723			600,724
Loss from continuing operations before income taxes		(45,071	)		(172,221	)		(93,555	)		(275,999	)
Income tax expense (benefit)		(2,166	)		35,516			(5,211	)		19,719
Loss from continuing operations		(42,905	)		(207,737	)		(88,344	)		(295,718	)
Income (loss) from discontinued operations		(62	)		(379	)		286			(833	)
Net loss		(42,967	)		(208,116	)		(88,058	)		(296,551	)
Net loss attributable to non-redeemable noncontrolling interest		510			1,634			1,955			2,967
Net loss attributable to redeemable noncontrolling interest		431			204			925			721
Net loss attributable to Viad	$	(42,026	)	$	(206,278	)	$	(85,178	)	$	(292,863	)
Diluted loss per common share:
Continuing operations attributable to Viad common stockholders	$	(2.18	)	$	(10.17	)	$	(4.41	)	$	(14.44	)
Discontinued operations attributable to Viad common stockholders		—			(0.02	)		0.01			(0.05	)
Net loss attributable to Viad common stockholders	$	(2.18	)	$	(10.19	)	$	(4.40	)	$	(14.49	)
Weighted-average outstanding and potentially dilutive common shares		20,397			20,282			20,384			20,249
Basic loss per common share:
Continuing operations attributable to Viad common stockholders	$	(2.18	)	$	(10.17	)	$	(4.41	)	$	(14.44	)
Discontinued operations attributable to Viad common stockholders		—			(0.02	)		0.01			(0.05	)
Net loss attributable to Viad common stockholders	$	(2.18	)	$	(10.19	)	$	(4.40	)	$	(14.49	)
Weighted-average outstanding common shares		20,397			20,282			20,384			20,249
Dividends declared per common share	$	—		$	—		$	—		$	0.10
Amounts attributable to Viad common stockholders
Loss from continuing operations	$	(41,964	)	$	(205,899	)	$	(85,464	)	$	(292,030	)
Income (loss) from discontinued operations		(62	)		(379	)		286			(833	)
Net loss	$	(42,026	)	$	(206,278	)	$	(85,178	)	$	(292,863	)

Refer to Notes to Condensed Consolidated Financial Statements.

VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~INCOME~~LOSS

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in thousands)

2017

2016

2017

2016

Net income

$
45,741

$
34,784

$
80,128

$
47,083

Other comprehensive income (loss):

Unrealized gains on investments, net of tax⁽¹⁾

48

42

143

62

Unrealized foreign currency translation adjustments, net of tax⁽¹⁾

9,115

(3,849
)

18,820

723

Change in net actuarial gain, net of tax⁽¹⁾

103

93

385

334

Change in prior service cost, net of tax⁽¹⁾

(67
)

(78
)

(201
)

(234
)
Comprehensive income

54,940

30,992

99,275

47,968

Comprehensive income attributable to noncontrolling interest

(1,084
)

(992
)

(747
)

(765
)
Comprehensive income attributable to Viad

$
53,856

$
30,000

$
98,528

$
47,203

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands)	2021			2020			2021			2020
Net loss	$	(42,967	)	$	(208,116	)	$	(88,058	)	$	(296,551	)
Other comprehensive income (loss):
Unrealized foreign currency translation adjustments		3,677			9,784			7,654			(18,374	)
Change in net actuarial loss, net of tax ⁽¹⁾		1			25			178			366
Change in prior service cost, net of tax ⁽¹⁾		—			(28	)		(56	)		(55	)
Comprehensive loss		(39,289	)		(198,335	)		(80,282	)		(314,614	)
Non-redeemable noncontrolling interest:
Comprehensive loss attributable to non-redeemable noncontrolling interest		510			1,634			1,955			2,967
Unrealized foreign currency translation adjustments		1,069			1,933			1,819			(3,786	)
Redeemable noncontrolling interest:
Comprehensive loss attributable to redeemable noncontrolling interest		431			204			925			721
Comprehensive loss attributable to Viad	$	(37,279	)	$	(194,564	)	$	(75,583	)	$	(314,712	)

⁽¹⁾	The tax effect on other comprehensive income (loss) is not significant.

Refer to Notes to Condensed Consolidated Financial Statements.

VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND MEZZANINE EQUITY

(Unaudited)

																								Mezzanine Equity
(in thousands)	Common Stock		Additional Capital			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Common Stock in Treasury			Total Viad Equity			Non-Redeemable Non-Controlling Interest			Total Stockholders’ Equity			Redeemable Non-Controlling Interest			Convertible Series A Preferred Stock
Balance, December 31, 2020	$	37,402	$	568,100		$	(253,164	)	$	(30,641	)	$	(225,742	)	$	95,955		$	78,144		$	174,099		$	5,225		$	128,769
Net loss		—		—			(43,152	)		—			—			(43,152	)		(1,445	)		(44,597	)		(494	)		—
Dividends on convertible preferred stock		—		(1,898	)		—			—			—			(1,898	)		—			(1,898	)		—			1,898
Capital contribution (distributions) to noncontrolling interest		—		—			—			—			—			—			(951	)		(951	)		142			—
Payment of payroll taxes on stock-based compensation through shares withheld		—		—			—			—			(519	)		(519	)		—			(519	)		—			—
Employee benefit plans		—		(1,198	)		—			—			1,578			380			—			380			—			—
Share-based compensation - equity awards		—		1,626			—			—			—			1,626			—			1,626			—			—
Unrealized foreign currency translation adjustment		—		—			—			3,977			—			3,977			750			4,727			77			—
Amortization of net actuarial loss, net of tax		—		—			—			177			—			177			—			177			—			—
Amortization of prior service cost, net of tax		—		—			—			(56	)		—			(56	)		—			(56	)		—			—
Acquisitions		—		—			—			—			—			—			6,759			6,759			—			—
Other, net		—		13			(1	)		—			—			12			—			12			56			—
Balance, March 31, 2021	$	37,402	$	566,643		$	(296,317	)	$	(26,543	)	$	(224,683	)	$	56,502		$	83,257		$	139,759		$	5,006		$	130,667
Net loss		—		—			(42,026	)								(42,026	)		(510	)		(42,536	)		(431	)		—
Dividends on convertible preferred stock		—		(1,923	)		—			—			—			(1,923	)		—			(1,923	)		—			1,923
Capital contribution to noncontrolling interest		—		—			—			—	��		—			—			7			7			124			—
Payment of payroll taxes on stock-based compensation through shares withheld		—		—			—			—			(82	)		(82	)		—			(82	)		—			—
Employee benefit plans		—		(143	)		—			—			641			498			—			498			—			—
Share-based compensation - equity awards		—		2,071			—			—			—			2,071			—			2,071			—			—
Unrealized foreign currency translation adjustment		—		—			—			3,677			—			3,677			1,069			4,746			79			—
Amortization of net actuarial loss, net of tax		—		—			—			1			—			1			—			1			—			—
Other, net		—		10			—			—			23			33			(7	)		26			547			1
Balance, June 30, 2021	$	37,402	$	566,658		$	(338,343	)	$	(22,865	)	$	(224,101	)	$	18,751		$	83,816		$	102,567		$	5,325		$	132,591

Refer to Notes to Condensed Consolidated Financial Statements.

VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND MEZZANINE EQUITY (Continued)

(Unaudited)

																								Mezzanine Equity
(in thousands)	Common Stock		Additional Capital			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Common Stock in Treasury			Total Viad Equity			Non-Redeemable Non-Controlling Interest			Total Stockholders’ Equity			Redeemable Non-Controlling Interest			Convertible Series A Preferred Stock
Balance, December 31, 2019	$	37,402	$	574,473		$	122,971		$	(35,699	)	$	(231,649	)	$	467,498		$	79,731		$	547,229		$	6,172		$	—
Net loss		—		—			(86,585	)		—			—			(86,585	)		(1,333	)		(87,918	)		(517	)		—
Dividends on common stock ($0.10 per share)		—		—			(2,038	)		—			—			(2,038	)		—			(2,038	)		—			—
Distributions to noncontrolling interest		—		—			—			—			—			—			(1,526	)		(1,526	)		—			—
Payment of payroll taxes on stock-based compensation through shares withheld		—		—			—			—			(1,059	)		(1,059	)		—			(1,059	)		—			—
Common stock purchased for treasury		—		—			—			—			(2,785	)		(2,785	)		—			(2,785	)		—			—
Employee benefit plans		—		(3,810	)		—			—			5,722			1,912			—			1,912			—			—
Share-based compensation - equity awards		—		276			—			—			—			276			—			276			—			—
Unrealized foreign currency translation adjustment		—		—			—			(28,158	)		—			(28,158	)		(5,719	)		(33,877	)		(873	)		—
Amortization of net actuarial loss, net of tax		—		—			—			341			—			341			—			341			—			—
Amortization of prior service cost, net of tax		—		—			—			(27	)		—			(27	)		—			(27	)		—			—
Other, net		—		(80	)		(1	)		—			1			(80	)		—			(80	)		126			—
Balance, March 31, 2020	$	37,402	$	570,859		$	34,347		$	(63,543	)	$	(229,770	)	$	349,295		$	71,153		$	420,448		$	4,908		$	—
Net loss		—		—			(206,278	)		—			—			(206,278	)		(1,634	)		(207,912	)		(204	)		—
Payment of payroll taxes on stock-based compensation through shares withheld		—		—			—			—			(3	)		(3	)		—			(3	)		—			—
Employee benefit plans		—		48			—			—			282			330			—			330			—			—
Share-based compensation - equity awards		—		602			—			—			—			602			—			602			—			—
Unrealized foreign currency translation adjustment		—		—			—			9,784			—			9,784			1,933			11,717			102			—
Amortization of net actuarial loss, net of tax		—		—			—			25			—			25			—			25			—			—
Amortization of prior service cost, net of tax		—		—			—			(28	)		—			(28	)		—			(28	)		—			—
Other, net		—		46			—			—			(1	)		45			—			45			332			—
Balance, June 30, 2020	$	37,402	$	571,555		$	(171,931	)	$	(53,762	)	$	(229,492	)	$	153,772		$	71,452		$	225,224		$	5,138		$	—

Refer to Notes to Condensed Consolidated Financial Statements.

VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended						Six Months Ended
	September 30,						June 30,
(in thousands)	2017			2016			2021			2020
Cash flows from operating activities
Net income	$	80,128		$	47,083
Adjustments to reconcile net income to net cash provided by operating activities:
Net loss							$	(88,058	)	$	(296,551	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		42,499			31,206			26,510			29,135
Deferred income taxes		318			(3,549	)		(4,253	)		19,514
Loss from discontinued operations		408			771
(Income) loss from discontinued operations								(286	)		833
Restructuring charges		817			3,664			3,613			1,111
Impairment charges (recoveries)		(29,098	)		120
Impairment charges								—			202,400
Gains on dispositions of property and other assets		465			126			(9,360	)		(1,373	)
Share-based compensation expense		9,484			4,709
Excess tax benefit from share-based compensation arrangements		—			(60	)
Share-based compensation expense (benefit)								4,216			(1,288	)
Multi-employer pension plan withdrawal								57			462
Other non-cash items, net		3,603			4,644			(33	)		11,470
Change in operating assets and liabilities (excluding the impact of acquisitions):
Change in operating assets and liabilities:
Receivables		(25,966	)		(41,510	)		(7,056	)		97,979
Inventories		(6,839	)		(12,903	)		(2,602	)		(2,120	)
Current contract costs								(4,372	)		16,185
Accounts payable		18,998			38,522			6,456			(59,887	)
Restructuring liabilities		(1,748	)		(2,518	)		(3,106	)		(2,359	)
Accrued compensation		(7,455	)		(620	)		7,145			(22,562	)
Customer deposits		9,076			26,954
Contract liabilities								27,770			(22,499	)
Income taxes payable		16,058			5,280			160			489
Other assets and liabilities, net		3,895			13,503			3,650			(2,104	)
Net cash provided by operating activities		114,643			115,422
Net cash used in operating activities								(39,549	)		(31,165	)
Cash flows from investing activities
Capital expenditures		(39,493	)		(32,582	)		(24,763	)		(32,516	)
Proceeds from insurance		31,570			—
Cash paid for acquired businesses, net		(1,661	)		(145,735	)
Cash surrender value of life insurance policies								—			24,767
Cash paid for acquisitions, net								(7,606	)		—
Proceeds from dispositions of property and other assets		734			774			14,227			4,654
Net cash used in investing activities		(8,850	)		(177,543	)		(18,142	)		(3,095	)
Cash flows from financing activities
Proceeds from borrowings		60,574			153,000			65,608			192,111
Payments on debt and capital lease obligations		(128,808	)		(86,989	)
Payments on debt and finance lease obligations								(9,027	)		(56,078	)
Dividends paid on common stock		(6,119	)		(6,079	)		—			(4,064	)
Debt issuance costs		(5	)		(340	)
Distributions to noncontrolling interest, net of contributions from noncontrolling interest								(678	)		(1,526	)
Payments of debt issuance costs								(128	)		—
Payment of payroll taxes on stock-based compensation through shares withheld or repurchased								(601	)		(1,062	)
Common stock purchased for treasury		(1,272	)		(679	)		—			(2,785	)
Excess tax benefit from share-based compensation arrangements		—			60
Net cash provided by (used in) financing activities		(75,630	)		58,973
Effect of exchange rate changes on cash and cash equivalents		2,418			(702	)
Net change in cash and cash equivalents		32,581			(3,850	)
Cash and cash equivalents, beginning of year		20,900			56,531
Cash and cash equivalents, end of period	$	53,481		$	52,681
Proceeds from exercise of stock options								—			2,077
Net cash provided by financing activities								55,174			128,673
Effect of exchange rate changes on cash, cash equivalents, and restricted cash								538			(2,196	)
Net change in cash, cash equivalents, and restricted cash								(1,979	)		92,217
Cash, cash equivalents, and restricted cash, beginning of year								41,971			62,004
Cash, cash equivalents, and restricted cash, end of period							$	39,992		$	154,221

Refer to Notes to Condensed Consolidated Financial Statements.

VIAD CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Overview and Basis of Presentation ~~and Principles~~

Basis of ~~Consolidation~~Presentation

The accompanying unaudited condensed consolidated financial statements ~~of Viad Corp (“Viad” or the “Company”) have been~~were prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X for interim financial information. Accordingly, these financial statements do not include all of the information required by GAAP or ~~Securities and Exchange Commission (“SEC”)~~SEC rules and regulations for complete financial statements. ~~In the opinion of management, these~~These financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with ~~Viad’s~~our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2020, filed with the SEC on March ~~6, 2017.~~2, 2021 (“2020 Form 10-K”).

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

~~Use of Estimates~~

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

~~Insurance Recoveries~~

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

On December 29, 2016, the Mount Royal Hotel was damaged by a fire and closed. During the fourth quarter of 2016, the Company recorded an asset impairment loss of $2.2 million and an offsetting impairment recovery (and related insurance receivable) as the losses related to the fire were covered by Viad’s property and business interruption insurance. During July 2017, Viad resolved its property and business interruption insurance claims for a total of $36.3 million, of which $9.0 million was received during the first six months of 2017 with the remainder received during the third quarter. The Company allocated $2.2 million to an insurance receivable, $29.3 million was recorded as an impairment recovery (partially offset by impairment charges of $0.2 million) related to construction costs to re-open the hotel, $2.2 million was recorded as a business interruption gain for the recovery of lost profits, $1.1 million was recorded as contra-expense to offset non-capitalizable costs incurred by the Company, and the remaining $1.5 million was recorded as deferred revenue, which will be recognized over the periods when the business interruption losses are actually incurred.

Nature of Business

~~Viad is an international~~We are a leading provider of experiential ~~services company~~leisure travel and live events and marketing experiences with operations in the United States, Canada, the United Kingdom, continental Europe, the United Arab Emirates, and ~~Hong Kong. Viad is~~Iceland. We are committed to providing unforgettable experiences to ~~its~~our clients and guests. ~~Viad operates~~We operate through ~~three~~2 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,~~partners with show organizers, exhibitors, and ~~consumer~~brand marketers to create high-value, live events. GES offers a comprehensive range of live event services, from the design and production of compelling, immersive experiences that engage audiences and build brand awareness, to material handling, rigging, electrical, and other on-site event services. In addition, GES offers clients a full suite of audio-visual services from creative and technology to content and design, along with registration, data analytics, engagement, and online tools powered by next generation technologies that help clients easily manage the complexities of their ~~events.~~

GES’ clients include event organizers and corporate brand marketers. Corporate brand marketers include exhibitors and domestic and international corporations that want to promote their brands, services and innovations, feature new products, and build business relationships. GES serves corporate brand marketers when they exhibit at shows and when GES is engaged to manage their global exhibit program or produce their proprietary corporate events.event.

Pursuit

Pursuit is a collection of ~~iconic natural~~inspiring and ~~cultural destination~~unforgettable travel experiences that ~~enjoy perennial demand. Pursuit offers guests distinctive and world renowned experiences through~~ ~~its collection of~~include recreational attractions, unique hotels and lodges, ~~recreational attractions,~~food and beverage, retail, sightseeing, and ground transportation services. Pursuit is composed of four lines of business: (i) Hospitality; (ii) Attractions; (iii) Transportation, and (iv) Travel Planning. These four lines of business work together, driving economies of scope and meaningful scale in and aroundcomprises the ~~iconic destinations of~~ Banff Jasper ~~and Waterton Lakes National Parks and Vancouver in Canada, and Glacier, Denali, and Kenai Fjords National Parks in the United States. Pursuit is composed of Brewster Travel Canada,~~Collection, the Alaska Collection, the Glacier Park ~~Inc.~~Collection, FlyOver, and the Sky Lagoon.

Impact of COVID-19

Starting in mid-March 2020 and extending into the second quarter of 2021, the COVID-19 pandemic had a significant and negative impact on our operations and financial performance, with live events largely shut down and severe disruptions in tourism activity. In response to the COVID-19 pandemic, we implemented aggressive cost reduction measures in 2020 to preserve cash, including furloughs, layoffs, mandatory unpaid time off or salary reductions for all employees, and the reduction of discretionary spending. We also suspended future dividend payments and share repurchases, and we availed ourselves of governmental assistance programs for wages and other expense relief.

During the first half of 2021, we continued to preserve cash and closely managed our costs. In connection with the acceleration of COVID-19 vaccination programs in certain of our geographic territories and as pandemic-related restrictions lessened, we began to see early signs of recovery in the travel and hospitality and live event sectors as people started to feel more comfortable traveling and gathering in larger groups. Canada announced it will reopen its border with the United States in early August 2021 to fully vaccinated travelers and anticipates reopening its borders with other countries beginning in September 2021, which we are hopeful will accelerate

bookings from long-haul travelers to our Pursuit operations in Canada. The live event markets began to open in 2021 with smaller scale live events taking place. Event organizers began to hold larger scale face-to-face live events in June 2021, and during the second quarter of 2021, we began to see early signs of acceleration in the recovery of in-person trade shows as states continue to reopen.

Effective July 30, 2021, we refinanced our current $450 million revolving credit facility (the “2018 Credit Facility”), which was scheduled to mature on October 24, 2023, with a new $500 million senior secured credit facility (the “2021 Credit Facility”) to provide for financial flexibility to support our growth initiatives. The 2021 Credit Facility provides for a $400 million term loan with a maturity date of July 30, 2028 (“Term Loan B”) and ~~FlyOver Canada.~~a $100 million revolving credit facility with a maturity date of July 30, 2026. The proceeds from the Term Loan B will be used to repay the 2018 Credit Facility, for future acquisitions and growth initiatives, and for general corporate purposes. Refer to Note 12 – Debt and Finance Lease Obligations and Note 24 – Subsequent Event for further information.

Although we are optimistic about the recent acceleration in demand and bookings and signs of a recovery for travel and in-person live events, we remain cautious as variants of COVID-19, including the Delta variant, have caused an increase in infections across the United States and globally. Due to the evolving and uncertain nature of COVID-19, and depending on the success of ongoing vaccination efforts as well as the scope and magnitude of these increasing infections, we are not able at this time to fully estimate the effect of these factors on our business; however, the adverse impact on our business, results of operations, and cash flows has been significant. We will continue to evaluate and implement additional actions necessary to mitigate the negative financial and operational impact of COVID-19 on our business.

Reclassifications

During the first quarter of 2021, we reorganized GES’ operating segments to represent the changes in how our chief operating decision maker (“CODM”) reviews the financial performance of GES and makes decisions regarding the allocation of resources. As a result, we changed the presentation of certain items in GES’ disaggregation of revenue and reportable segments. Refer to Note 2 – Revenue and Related Contract Costs and Contract Liabilities and Note 23 – Segment Information for additional information. We reclassified certain prior-year amounts to conform to current-period presentation. Such reclassifications had no impact on our results of operations or cash flows.

Correction to Prior Period Financial Statements

As previously disclosed in our 2020 Form 10-K, and subsequent to the issuance of the Condensed Consolidated Financial Statements for the quarter ended June 30, 2020, we identified prior period errors related to the recognition of revenue of GES’ third-party services. Revenue from these services should have been recorded on a net basis to reflect only the fees received for arranging these services, whereas previously, we recorded this revenue on a gross basis, thus overstating revenue and cost of services by the same amount. As a result, we corrected the accompanying Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2020 related to this gross-to-net adjustment. We determined that these errors were not material to the previously issued financial statements. Note 2 – Revenue and Related Contract Costs and Contract Liabilities and Note 23 – Segment Information reflect this correction.

	Three Months Ended June 30, 2020						Six Months Ended June 30, 2020
(in thousands)	Services Revenue			Cost of Services			Services Revenue			Cost of Services
As previously reported	$	26,205		$	69,380		$	301,761		$	353,782
Gross to net correction for GES		(796	)		(796	)		(12,146	)		(12,146	)
Total as corrected	$	25,409		$	68,584		$	289,615		$	341,636

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~~2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts ~~with Customers (Topic 606)~~	~~The standard establishes a new recognition model that requires revenue to be recognized~~ in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company may adopt either retrospectively to each prior period presented with the option to elect certain practical expedients or with the cumulative effect recognized at the date of initial application and providing certain disclosures. Subsequent to the issuance of ASU 2014-09, the FASB issued several amendments in 2016 which do not change the core principle of the guidance stated in ASU 2014-09. Rather, they are intended to clarify and improve understanding of certain topics included within the revenue standard.	~~January 1, 2018~~	The Company is currently evaluating the impact of the adoption of this new guidance on its financial position or results of operations including analyzing its current portfolio of customer contracts. The Company has assigned internal resources in addition to the engagement of a third-party service provider to assist in the evaluation of the impact on its accounting policies, processes, and system requirements. Based on the Company’s preliminary assessment, the adoption of this standard will not have a material impact on Viad’s consolidated financial statements. Although significant additional disclosures will be required, the Company expects the immaterial impact to primarily relate to the deferral of certain commissions which were previously expensed as incurred but will generally be capitalized and amortized over the period of contract performance, and the deferral of certain costs incurred in connection with trade shows which were previously expensed as incurred but will generally be capitalized and expensed upon the completion of the show. The Company will adopt the standard on January 1, 2018 and will be using the modified retrospective transition method. Additionally, the new guidance requires enhanced disclosures, including revenue recognition policies to identify performance obligations to customers and significant judgments in measurement and recognition. The Company is continuing its assessment, which may identify other impacts.
~~ASU 2016-02~~, ~~Leases (Topic 842)~~Entity’s Own Equity (Subtopic 815-40)	The amendment ~~requires lessees to recognize on their balance sheet a right-of-use asset~~simplifies the accounting for convertible instruments by reducing the number of accounting models available for convertible debt instruments and ~~a lease liability for leases with lease terms greater than one year.~~convertible preferred stock. The amendment also requires ~~additional~~expanded disclosures about ~~leasing arrangements,~~the terms and ~~requires a modified retrospective approach to adoption.~~features of convertible instruments. Early adoption is ~~permitted.~~permitted, but no earlier than fiscal years beginning after December 15, 2020.	~~January 1, 2019~~1/1/2022	~~The Company is~~We are currently evaluating the potential impact of the adoption of this new guidance on ~~its~~our consolidated financial ~~position~~statements and if there are applicable provisions that will simplify our accounting or ~~results of operations including analyzing its existing operating leases. Based on the Company’s current assessment, the adoption of this standard~~reporting we will have a material impact on Viad’s consolidated balance sheets, but the income statement is not expected to be materially impacted. The Company expects the most significant impact will relate to facility and equipment leases and embedded lease arrangements which are currently recorded as operating leases. The Company is continuing its assessment, which may identify other impacts. The Company will adopt the standard on January 1, 2019. likely pursue early adoption.
~~ASU 2016-15, Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments~~	The amendment provides guidance on eight specific cash flow issues with the objective of reducing the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. Early adoption is permitted.	~~January 1, 2018~~	~~The adoption of this new guidance is not expected to have a significant effect on Viad’s financial position or results of operations.~~
~~ASU 2016-16~~, ~~Income Taxes (Topic 740) - Intra-Entity Transfers of Assets Other Than Inventory~~	The amendment eliminates an exception in ASC 740 which prohibits the recognition of current and deferred income tax effects for intra-entity transfers of assets other than inventory until the asset has been sold to an outside party. The amendment requires an entity to recognize the income tax consequences of intra-entity transfers of assets other than inventory at the time that the transfer occurs.	~~January 1, 2018~~	~~The adoption of this new guidance is not expected to have a significant effect on Viad’s financial position or results of operations.~~

Standard	Description	Date of adoption	Effect on the financial statements
Standards ~~Not Yet~~Recently Adopted ~~(Continued)~~
ASU ~~2017-01~~2019-12, ~~Business Combination~~Income Taxes (Topic ~~805) - Clarifying~~740) Simplifying the ~~Definition of a Business~~Accounting for Income Taxes	The amendment ~~provides~~enhances and simplifies various aspects of the income tax accounting guidance, ~~on evaluating whether transactions should be accounted~~including requirements such as ownership changes in investments, and interim-period accounting for ~~as acquisitions (or disposals) of assets or businesses.~~enacted changes in tax law.	~~January 1, 2018~~1/1/2021	The adoption of this new ~~guidance is~~standard on January 1, 2021 did not ~~expected to~~ have a ~~significant effect~~material impact on ~~Viad’s~~our consolidated financial statements.

Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. 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: impairment testing of recorded goodwill and intangible assets and long-lived assets; allowances for uncollectible accounts receivable; sales reserve allowances; 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; pension and postretirement benefit costs and obligations; share-based compensation costs; the discount rates used to value lease obligations; the redemption value of redeemable noncontrolling interests; and the allocation of purchase price of acquired businesses. Actual results could differ from these and other estimates.

Cash, Cash Equivalents, and Restricted Cash

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 funds. Investments in money market funds are classified as available-for-sale and carried at fair value. Restricted cash represents collateral required for surety bonds, bank guarantees, and letters of credit.

Cash, cash equivalents, and restricted cash balances presented in the Condensed Consolidated Statements of Cash Flows consisted of the following:


	June 30,		December 31,
(in thousands)	2021		2020
Cash and cash equivalents	$	37,037	$	39,545
Restricted cash included in other current assets		2,955		2,426
Cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	39,992	$	41,971

Revenue Recognition

Revenue is measured based on a specified amount of consideration in a contract with a customer, net of commissions paid to customers and amounts collected on behalf of third parties. We recognize revenue when a performance obligation is satisfied by transferring control of a product or delivering the service to a customer.

GES’ service revenue is primarily derived through its comprehensive range of marketing, event production, and other related services to event organizers and corporate brand marketers. GES’ service revenue is earned over time over the duration of the live event, which generally lasts one to three days. Revenue for goods and services provided for which we do not have control of the goods or services before that good or service is transferred to a customer is recorded on a net basis to reflect only the fees received for arranging these services. GES’ product revenue is derived from the build of exhibits and environments and graphics. GES’ product revenue is recognized at a point in time upon delivery of the product.

Pursuit’s service revenue is derived through its admissions, accommodations, transportation, and travel planning services. Pursuit’s product revenue is derived through food and beverage and retail sales. Pursuit’s revenue is recognized at the time services are performed or upon delivery of the product. Pursuit’s service revenue is recognized over time as the customer simultaneously receives and consumes the benefits. Pursuit’s product revenue is recognized at a point in time.

Noncontrolling Interests – Non-redeemable and Redeemable

Non-redeemable noncontrolling interest represents the portion of equity in a subsidiary that is not attributable, directly or indirectly, to us. We report non-redeemable noncontrolling interest within stockholders’ equity in the Condensed Consolidated Balance Sheets. The amount of consolidated net income or loss attributable to Viad and the non-redeemable noncontrolling interest is presented in the Condensed Consolidated Statements of Operations.

We consider noncontrolling interests with redemption features that are not solely within our control to be redeemable noncontrolling interests. Our redeemable noncontrolling interest relates to our 54.6% equity ownership interest in Esja Attractions ehf. (“Esja”), which owns the FlyOver Iceland attraction. The Esja shareholders 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 mezzanine equity and we report it between liabilities and stockholders’ equity in the Condensed Consolidated Balance Sheets. The amount of the net income or loss attributable to redeemable noncontrolling interests is recorded in the Condensed Consolidated Statements of Operations and the accretion of the redemption value is recorded as an adjustment to accumulated deficit and is included in our loss per share.

Refer to Note 22 – Noncontrolling Interest – Redeemable and Non-redeemable for additional information.

Convertible Preferred Stock

We record shares of convertible preferred stock based on proceeds received net of costs on the date of issuance. Redeemable preferred stock (including preferred stock that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as mezzanine equity and is reported between liabilities and stockholders’ equity in the Condensed Consolidated Balance Sheets.

Leases

We recognize a right-of-use (“ROU”) asset and lease liability on the balance sheet and classify leases as either finance or operating leases. The classification of the lease determines whether we recognize the lease expense on an effective interest method basis (finance lease) or on a straight-line basis (operating lease) over the lease term. In determining whether an agreement contains a lease, we consider if we have a right to control the use of the underlying asset during the lease term in exchange for an obligation to make lease payments arising from the lease. We recognize ROU assets and lease liabilities at commencement date, which is when the underlying asset is available for use to a lessee, based on the present value of lease payments over the lease term.

Our operating and finance leases are primarily facility, equipment, and land leases. Our facility leases comprise mainly manufacturing facilities, sales and design facilities, offices, storage and/or warehouses, and truck marshaling yards. These facility leases generally have lease terms ranging up to 24 years. Our equipment leases comprise mainly vehicles, hardware, and office equipment, each with various lease terms. Our land leases comprise mainly leases in Canada and Iceland on which our hotels or attractions are located and have lease terms ranging up to 46 years.

If a lease contains a renewal option that is reasonably certain to be exercised, then the lease term includes the optional periods in measuring a ROU asset and lease liability. We evaluate the reasonably certain threshold at lease commencement, and it is typically met if we identify substantial economic incentives or termination penalties. We do not include variable leases and variable non-lease components in the calculation of the ROU asset and corresponding lease liability. For facility leases, variable lease costs include the

costs of common area maintenance, taxes, and insurance for which we pay our lessors an estimate that we adjust to actual expense on a quarterly or annual basis depending on the underlying contract terms. We expense these variable lease payments as incurred. Our lease agreements do not contain any significant residual value guarantees or restrictive covenants.

Substantially all of our lease agreements do not specify an implicit borrowing rate, and as such, we utilize an incremental borrowing rate based on lease term and country, in order to calculate the present value of our future lease payments. The discount rate represents a risk-adjusted rate on a collateralized basis and is the expected rate at which we would borrow funds to satisfy the scheduled lease liability payment streams commensurate with the lease term and the country.

We are also a lessor to third party tenants who either lease certain portions of facilities that we own or sublease certain portions of facilities that we lease. We record lease income from owned facilities as rental income and we record sublease income from leased facilities as an offset to lease expense in the Condensed Consolidated Statements of Operations. We classify all of our leases for which we are the lessor as operating leases.

Note 2. Revenue and Related Contract Costs and Contract Liabilities

GES’ performance obligations consist of services or product(s) outlined in a contract. While we often sign multi-year contracts for recurring events, the obligations for each occurrence are well defined and conclude upon the occurrence of each event. The obligations are typically the provision of services and/or sale of a product in connection with a live event. Revenue for goods and services provided for which we do not have control of the goods or services before that good or service is transferred to a customer is recorded on a net basis to reflect only the fees received for arranging these services. We recognize revenue for services generally at the close of the live event. We recognize revenue for products either upon delivery to the customer’s location, upon delivery to an event that we are serving, or when we have the right to invoice. In circumstances where a customer cancels a contract, we generally have the right to bill the customer for costs incurred to date. Payment terms are generally within 30-60 days and contain no significant financing components.

Pursuit’s performance obligations are short-term in nature. They include the provision of a hotel room, an attraction admission, a chartered or ticketed bus or van ride, the fulfillment of travel planning itineraries, and/or the sale of food, beverage, or retail products. We recognize revenue when the service has been provided or the product has been delivered. When we extend credit, payment terms are generally within 30 days and contain no significant financing components.

Contract Liabilities

GES and Pursuit typically receive customer deposits prior to transferring the related product or service to the customer. We record these deposits as a contract liability, which are recognized as revenue upon satisfaction of the related contract performance obligation(s). GES also provides customer rebates and volume discounts to certain event organizers that we recognize as a reduction of revenue. We include these amounts in the Condensed Consolidated Balance Sheets under the captions “Contract liabilities” and “Other deferred items and liabilities.”

Changes to contract liabilities are as follows:

(in thousands)
Balance at December 31, 2020	$	18,618
Cash additions		62,549
Revenue recognized		(32,298	)
Foreign exchange translation adjustment		(1,906	)
Balance at June 30, 2021	$	46,963

Contract Costs

GES capitalizes certain incremental costs incurred in obtaining and fulfilling contracts. Capitalized costs principally relate to direct costs of materials and services incurred in fulfilling services of future exhibitions, conferences, and events, and also include up-front incentives and commissions incurred upon contract signing. We expense costs associated with preliminary contract activities (i.e. proposal activities) as incurred. Capitalized contract costs are expensed upon the transfer of the related goods or services and are included in cost of services or cost of products, as applicable. We include the deferred incremental costs of obtaining and fulfilling contracts in the Condensed Consolidated Balance Sheets under the captions “Current contract costs” and “Other investments and assets.”

Changes to contract costs are as follows:

(in thousands)
Balance at December 31, 2020	$	10,835
Additions		10,956
Expenses		(5,877	)
Cancelled		(580	)
Foreign exchange translation adjustment		50
Balance at June 30, 2021	$	15,384

As of June 30, 2021, capitalized contract costs consisted of $0.8 million to obtain contracts and $14.6 million to fulfill contracts. We did 0t recognize an impairment loss with respect to capitalized contract costs during the three and six months ended June 30, 2021 or 2020.

Disaggregation of Revenue

During the first quarter of 2021, we changed GES’ presentation of certain items in the following disaggregation of revenue table to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. All prior periods have been reclassified to conform to this new reporting structure.

The following tables disaggregate GES and Pursuit revenue by major service and product lines, timing of revenue recognition, and markets served:

GES

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands)	2021			2020			2021			2020
Service lines:
Exhibitions and Conferences	$	10,017		$	16,254		$	15,852		$	217,413
Brand experiences		12,481			7,941			24,185			76,936
Venue services		2,422			608			4,028			11,589
Total revenue	$	24,920		$	24,803		$	44,065		$	305,938

Timing of revenue recognition:
Services transferred over time	$	21,361		$	22,200		$	38,376		$	275,426
Products transferred over time⁽¹⁾		733			168			1,150			13,195
Products transferred at a point in time		2,826			2,435			4,539			17,317
Total revenue	$	24,920		$	24,803		$	44,065		$	305,938

Geographical markets:
North America	$	19,472		$	18,265		$	35,330		$	260,705
EMEA		6,074			7,523			9,977			48,207
Intersegment eliminations		(626	)		(985	)		(1,242	)		(2,974	)
Total revenue	$	24,920		$	24,803		$	44,065		$	305,938

~~ASU 2017-04~~, ~~Intangibles - Goodwill and Other (Topic 350) - Simplifying the Test for Goodwill Impairment~~⁽¹⁾	~~The amendment eliminates~~GES’ graphics product revenue is earned over time over the ~~requirement to estimate~~duration of an event as it is considered a part of the implied fair value of goodwill if it was determined that the carrying amount of a reporting unit exceeded its fair value. Goodwill impairment will now be recognized by the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The amendment should be applied prospectively and is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.	~~January 1, 2020~~	The adoption of this new guidance is not expected to have a significant effect on Viad’s consolidated financial statements and the Company expects the adoption to reduce the complexity surrounding the analysis of goodwill impairment.
~~ASU 2017-07~~, ~~Compensation - Retirement Benefits (Topic 715) - Improving the Presentation of Net Periodic Pension~~ ~~Cost and Net Periodic Postretirement Benefit Cost~~	The amendment requires an employer to disaggregate the service cost components from the other components of net benefit cost. The service cost components are required to be presented in operating income and the other components of net benefit cost are required to be presented outside of operating income.	~~January 1, 2018~~	The Company currently presents all components of net periodic pension and postretirement benefit costs in cost of services in the consolidated statements of operations. The adoption of this new guidance is not expected to have a significant effect on Viad’s consolidated financial statements.
~~ASU 2017-09~~, ~~Compensation - Stock Compensation (Topic 718) - Scope of Modification Accounting~~	~~The amendment provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718.~~	~~January 1, 2018~~	The Company grants share-based awards but rarely has modifications to the awards. The adoption of this new guidance is not expected to have a significant effect on Viad’s consolidated financial statements.


~~Standards Recently Adopted~~
~~ASU 2015-11, Inventory (Topic 330) - Simplifying the Measurement of Inventory~~	The amendment applies to inventory measures using first-in, first-out or average cost and requires entities to measure inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling price in the normal course of business, minus the cost of completion, disposal and transportation. Replacement cost and net realizable value less a normal profit margin will no longer be considered.	~~January 1, 2017~~	~~The adoption of this new guidance did not have a significant effect on Viad’s consolidated financial statements.~~
~~ASU 2016-09,~~ ~~Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting~~	The amendment identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows.	~~January 1, 2017~~	The adoption of this new guidance resulted in a decrease of 6% to the effective tax rate during the first quarter of 2017 as compared to 2016, and resulted in a decrease of 1% to the effective tax rate during the nine months ended September 30, 2017 as compared to 2016.single performance obligation satisfied over time.

Pursuit

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands)	2021			2020			2021			2020
Services:
Admissions	$	10,105		$	1,534		$	11,589		$	5,636
Accommodations		12,039			1,456			17,189			5,973
Transportation		923			12			1,460			2,068
Travel planning and other		1,935			213			2,649			629
Intersegment eliminations		(57	)		(6	)		(57	)		(117	)
Total services revenue		24,945			3,209			32,830			14,189
Products:
Food and beverage		5,899			615			7,123			2,264
Retail operations		5,469			1,440			6,150			2,334
Total products revenue		11,368			2,055			13,273			4,598
Total revenue	$	36,313		$	5,264		$	46,103		$	18,787

Timing of revenue recognition:
Services transferred over time	$	24,945		$	3,209		$	32,830		$	14,189
Products transferred at a point in time		11,368			2,055			13,273			4,598
Total revenue	$	36,313		$	5,264		$	46,103		$	18,787

Markets:
Banff Jasper Collection	$	10,658		$	3,040		$	19,118		$	12,839
Alaska Collection		11,058			580			11,347			731
Glacier Park Collection		10,968			1,161			11,546			1,884
FlyOver		735			483			1,198			3,333
Sky Lagoon⁽¹⁾		2,894			—			2,894			—
Total revenue	$	36,313		$	5,264		$	46,103		$	18,787

⁽¹⁾	We opened Pursuit’s new Sky Lagoon attraction on April 30, 2021 in Reykjavik, Iceland.

Note 2. 3. Share-Based Compensation

~~The following table summarizes~~We grant share-based compensation ~~expense:~~

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in thousands)

2017

2016

2017

2016

Performance unit incentive plan (“PUP”)

$
3,941

$
1,601

$
7,184

$
2,952

Restricted stock

672

523

2,069

1,597

Restricted stock units

124

86

231

160

Share-based compensation before income tax benefit

4,737

2,210

9,484

4,709

Income tax benefit

(1,752
)

(812
)

(3,524
)

(1,750
)
Share-based compensation, net of income tax benefit

$
2,985

$
1,398

$
5,960

$
2,959

~~Viad did not record any share-based compensation expense through restructuring expense during~~awards to our officers, directors, and certain key employees pursuant to the ~~three months ended September 30, 2017 or 2016, and recorded zero and $0.2 million for the nine months ended September 30, 2017 and 2016, respectively.~~

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

PUP Awards

Restricted Stock

Restricted Stock Units

Shares

Weighted-Average
Grant Date
Fair Value

Shares

Weighted-Average
Grant Date
Fair Value

Shares

Weighted-Average
Grant Date
Fair Value

Balance at December 31, 2016

255,505

$
26.11

267,051

$
25.96

15,982

$
25.58

Granted

73,557

$
47.44

64,648

$
46.64

2,950

$
47.45

Vested

(76,082
)

$
23.66

(79,104
)

$
24.01

(6,182
)

$
25.05

Forfeited

(5,911
)

$
30.64

(9,807
)

$
33.84

—

$
—

Balance at September 30, 2017

247,069

$
33.10

242,788

$
31.79

12,750

$
30.90

~~Viad Corp Omnibus Incentive Plan~~

~~The~~ 2017 Viad Corp Omnibus Incentive Plan (the “2017 Plan”) ~~was approved by Viad stockholders and was effective May 18, 2017. The 2017 Plan replaced the Company’s 2007 Viad Corp Omnibus Stock Plan (the “2007 Plan”)~~. ~~No further awards may be made under the 2007 Plan, although awards previously granted under the 2007 Plan will remain outstanding in accordance with their respective terms.~~ The 2017 Plan has a 10-year ~~life~~term and provides for the following types of awards: (a) incentive and non-qualified stock ~~options,~~options; (b) restricted stock awards and restricted stock ~~units,~~units; (c) performance units or performance ~~shares,~~shares; (d) stock appreciation ~~rights,~~rights; (e) cash-based ~~awards,~~awards; and (f) certain other stock-based awards. In June 2017, ~~Viad~~we registered 1,750,000 shares of common stock issuable under the 2017 Plan. As of ~~September~~June 30, ~~2017,~~2021, there were ~~1,746,927~~760,838 shares available for future grant under the 2017 Plan.

~~PUP Awards~~The following table summarizes share-based compensation (income) expense:

~~In February 2016,~~

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands)	2021			2020			2021			2020
Performance-based restricted stock units	$	466		$	(110	)	$	606		$	(2,745	)
Restricted stock awards and restricted stock units		1,436			967			2,680			1,457
Stock options		551			—			930			—
Share-based compensation (income) expense before income tax		2,453			857			4,216			(1,288	)
Income tax expense (benefit)⁽¹⁾		(28	)		109			(55	)		—
Share-based compensation (income) expense, net of income tax	$	2,425		$	966		$	4,161		$	(1,288	)

⁽¹⁾

The 2021 income tax benefit amount primarily reflects the tax benefit associated with our Canadian-based employees. There was no income tax benefit associated with our employees in the United States and the United Kingdom due to a valuation allowance on our deferred tax assets within these jurisdictions. Refer to Note 17 – Income Taxes.

Performance-based Restricted Stock Units

Performance-based restricted stock units (“PRSU”) are tied to our stock price and the PUP Plan was amended to provide that PUP awards earned under the 2007 Plan may be payable in the form of cash or in shares of Viad common stock (or a combination of both). Previously, payouts could only be made in cash. The vesting of shares is based uponexpected achievement of certain performance-based criteria. The ~~performance period~~vesting of PRSUs is based upon the achievement of the performance-based criteria over a three to four-year period. We account for PRSUs that will be settled in shares of our common stock as equity-based awards. We measure share-based compensation expense of equity-based awards at fair value on the grant date on a straight-line basis over the vesting period. The estimated number of units to be achieved is ~~three years.~~updated each reporting period.

We account for PRSUs that will be settled in cash as liability-based awards. We measure share-based compensation expense of liability-based awards at fair value at each reporting date until the date of settlement. Forfeitures are recorded when they occur.

During the ~~nine~~six months ended ~~September~~June 30, ~~2017, Viad~~2021, we granted ~~$3.5~~PRSUs with a grant date fair value of $3.2 million, ~~of PUP awards~~all of which ~~$1.4 million~~ are payable in shares. ~~As of September 30, 2017 and December 31, 2016, Viad had recorded liabilities of $10.3 million and $7.6 million, respectively, related to PUP awards.~~

In ~~March 2017, the PUP awards~~2021, PRSUs granted in ~~2014~~2018 vested; however, as performance metrics were not achieved, 0 awards were paid in cash or in shares. In 2020, PRSUs granted in 2017 vested and ~~cash payouts of $3.7~~we paid $2.6 million in cash. NaN PRSUs were ~~distributed. In March 2016, the PUP awards granted~~paid in ~~2013 vested and cash payouts of $0.2 million were distributed.~~

~~Restricted Stock~~shares in 2020.

As of ~~September~~June 30, ~~2017,~~2021, the unamortized cost of ~~all~~ outstanding equity-based PRSUs was $2.9 million, which we expect to recognize over a weighted-average period of approximately 2.6 years. Liabilities related to liability-based PRSUs were $1.1 million as of June 30, 2021 and $0.8 million as of December 31, 2020.

The following table summarizes the activity of the outstanding PRSUs:

	Equity-Based PRSUs				Liability-Based PRSUs
	Shares		Weighted-Average Grant Date Fair Value		Shares			Weighted-Average Grant Date Fair Value
Balance at December 31, 2020		61,208	$	57.18		121,485		$	56.34
Granted		101,785	$	31.28		—		$	—
Vested		—	$	—		(42,698	)	$	51.96
Forfeited		—	$	—		(1,041	)	$	56.90
Balance at June 30, 2021		162,993	$	41.01		77,746		$	57.13

Service-based Restricted Stock Awards and Restricted Stock Units

Restricted stock awards and restricted stock units are service-based awards. We account for restricted stock awards and restricted stock units that will be settled in shares of our common stock as equity-based awards. We measure share-based compensation expense of equity-based awards at fair value on the grant date on a straight-line basis over the vesting period.

We account for restricted stock units that will be settled in cash as liability-based awards. We measure share-based compensation expense of liability-based awards at fair value at each reporting date until the date of settlement. Forfeitures are recorded when they occur.

As of June 30, 2021, the unamortized cost of outstanding equity-based restricted stock awards and restricted stock units was ~~$3.1~~$5.4 million, which ~~Viad expects~~we expect to recognize ~~in the consolidated financial statements~~ over a weighted-average period of approximately 1.2 years. ~~During~~We repurchased 14,016 shares for $0.6 million during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016, the Company repurchased 26,916~~17,881 shares for ~~$1.3~~$1.1 million ~~and 24,432 shares for $0.7 million, respectively,~~during the six months ended June 30, 2020 related to tax withholding requirements on vested share-based awards.

~~Restricted Stock Units~~

AsAggregate liabilities related to liability-based restricted stock units were $0.2 million as of ~~both September~~June 30, ~~2017~~2021 and $0.2 million as of December 31, ~~2016, Viad had aggregate liabilities recorded of $0.4 million related to restricted stock units. In February 2017, portions of~~2020. During the ~~2012 and 2014~~six months ended June 30, 2021, 3,174 restricted stock units vested, and ~~cash payouts of $0.3~~we paid $0.1 million ~~were distributed. In February 2016, portions of~~in cash. During the ~~2011, 2012, and 2013~~six months ended June 30, 2020, 2,815 restricted stock units vested, and ~~cash payouts of~~we paid $0.2 million ~~were distributed.~~in cash.

The following table summarizes the activity of the outstanding restricted stock awards and restricted stock units:

	Equity-Based Restricted Stock Awards					Equity-Based Restricted Stock Units					Liability-Based Restricted Stock Units
	Shares			Weighted-Average Grant Date Fair Value		Shares			Weighted-Average Grant Date Fair Value		Shares			Weighted-Average Grant Date Fair Value
Balance at December 31, 2020		107,107		$	53.23		151,261		$	19.51		10,459		$	51.91
Granted		22,320		$	44.80		64,018		$	44.81		—		$	—
Vested		(42,031	)	$	53.47		(1,944	)	$	19.30		(3,174	)	$	52.24
Forfeited		(1,869	)	$	56.73		(3,546	)	$	19.75		—		$	—
Balance at June 30, 2021		85,527		$	50.84		209,789		$	27.23		7,285		$	53.34

Stock Options

~~During~~We grant non-qualified stock options that are performance-based, as well as non-qualified options that are service-based. The performance-based awards are recognized on a straight-line basis over the performance period ranging from 1.4 to 3.4 years, and the underlying shares expected to be settled are adjusted each reporting period based on estimated future achievement of the respective performance metrics. The service-based awards are recognized on a straight-line basis over the requisite service period on a graded-vesting schedule ranging from two to three ~~and nine months ended September 30, 2017, there was no~~years.

The following table summarizes stock option ~~activity. As of both September 30, 2017 and December 31, 2016, there were 63,773~~activity:

	Shares		Weighted-Average Exercise Price		Aggregate Intrinsic Value⁽¹⁾
Options outstanding at December 31, 2020		204,150	$	19.98
Granted		137,858	$	44.80
Exercised		—	$	—
Options outstanding at June 30, 2021		342,008	$	29.98	$	6,794,883
Options exercisable at June 30, 2021		—	$	—	$	—

⁽¹⁾	The aggregate intrinsic value of stock options outstanding represents the difference between our closing stock price at the end of the reporting period and the exercise price, multiplied by the number of in-the-money stock options.

The following table summarizes stock options outstanding and exercisable ~~with a weighted-average exercise price~~as of ~~$16.62.~~ June 30, 2021:

		Options Outstanding						Options Exercisable
Range of exercise prices		Shares		Weighted-Average Remaining Contractual Life (in years)		Weighted-Average Exercise Price		Shares		Weighted-Average Exercise Price
$	19.30		150,000		7.75	$	19.30		—	$	—
$	21.85		54,150		6.16	$	21.85		—	$	—
$	44.80		137,858		6.65	$	44.80		—	$	—
$19.30 - $44.80			342,008		6.95	$	29.98		—	$	—

The fair value of stock options granted in 2021 was estimated on the date of grant using the Black-Scholes option pricing model.

Following is additional information on stock options granted during the six months ended June 30, 2021 and the underlying assumptions used in assessing fair value:

	Six Months Ended
	June 30, 2021
Assumptions used to estimate fair value of stock options granted:
Risk-free interest rate	0.50%
Expected term (in years)		4.5
Expected volatility	55.8%
Expected dividend yield		—
Weighted average grant-date fair value per share of options granted	$	20.26

As of ~~September~~June 30, ~~2017, there were no~~2021, the total unrecognized ~~costs~~compensation cost related to non-vested stock option ~~awards.~~awards was $3.1 million. We expect to recognize such costs over a weighted-average period of approximately 1.6 years.

Note 3. ~~Acquisition of Businesses~~4. Acquisitions

~~FlyOver Canada~~2021 Acquisitions

Golden Skybridge

On ~~December 29, 2016,~~March 18, 2021, we acquired a 60% controlling interest in the ~~Company acquired the assets and operations~~Golden Skybridge attraction for total cash consideration 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$15 million Canadian dollars (approximately ~~$50.9~~$12 million U.S. dollars), of which $6 million Canadian dollars (approximately $4.8 million U.S. dollars) were used to fund remaining development and start-up costs. The Golden Skybridge opened in ~~cash, subject to certain adjustments.~~June 2021.

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

(in thousands)

Purchase price paid as:

Cash

$
50,920

Cash acquired

(6
)
Purchase price, net of cash acquired

50,914

Fair value of net assets acquired:

Inventories

$
11

Prepaid expenses

37

Property and equipment

10,867

Intangible assets

6,028

Total assets acquired

16,943

Accrued liabilities

118

Total liabilities assumed

118

Total fair value of net assets acquired

16,825

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

$
34,089

date included $2.2 million U.S. dollars in property and equipment and $6.8 million U.S. dollars in noncontrolling interest. Under the acquisition method of accounting, the purchase price ~~as shown in the table above~~ is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The excess purchase price over the fair value of net assets acquired of $11.8 million U.S. dollars was recorded as ~~goodwill.~~“Goodwill.” Goodwill ~~of FlyOver Canada~~ is included in the Pursuit business ~~group and is a separate reporting unit.~~group. The primary factor that contributed to the purchase price resulting in the recognition of goodwill ~~relates~~related to future growth opportunities ~~and the expansion of the FlyOver concept.~~when combined with our other businesses. Goodwill is ~~expected to be~~not deductible for tax ~~purposes pursuant to Canadian tax regulations. The estimated values of current~~purposes. We included these assets ~~and liabilities were based upon their historical costs on~~in the Condensed Consolidated Balance Sheets from the date of acquisition.

Due to the recent timing of the acquisition, ~~due~~the purchase price allocation is not yet finalized and is subject to ~~their short-term nature.~~ change within the measurement period (up to one year from the acquisition date) as the assessment of acquired assets is finalized.

Transaction costs associated with the acquisition ~~of FlyOver Canada~~ were ~~$0.1~~$0.2 million ~~in 2017 and $0.5 million in 2016 and~~U.S. dollars during 2021, which are included in ~~cost~~“Cost of ~~services in Viad’s condensed consolidated statements of operations.~~

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

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

~~Other Acquisitions~~

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

~~Supplementary pro forma financial information~~

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

Three Months Ended

Nine Months Ended

(in thousands, except per share data)

September 30, 2016

September 30, 2016

Revenue

$
389,877

$
991,818

Depreciation and amortization

$
14,427

$
39,565

Income from continuing operations

$
35,047

$
47,734

Net income attributable to Viad

$
33,834

$
46,198

Diluted income per share

$
1.67

$
2.28

Basic income per share

$
1.67

$
2.28

Operations.

Note 4. 5. Inventories

We state inventories, which consist primarily of exhibit design and construction materials and supplies, as well as retail inventory, at the lower of cost (first-in, first-out and specific identification methods) or net realizable value.

The components of inventories consisted of the following:

	September 30,		December 31,		June 30,		December 31,
(in thousands)	2017		2016		2021		2020
Raw materials	$	18,455	$	16,846	$	2,628	$	3,362
Work in process		21,298		14,574
Finished goods						8,796		5,365
Inventories	$	39,753	$	31,420	$	11,424	$	8,727

Note 5. 6. Other Current Assets

Other current assets consisted of the following:

	September 30,		December 31,		June 30,		December 31,
(in thousands)	2017		2016		2021		2020
Prepaid vendor payments	$	6,407	$	3,633
Income tax receivable		4,282		3,614	$	8,075	$	337
Prepaid software maintenance		3,435		2,804		4,659		3,058
Restricted cash						2,955		2,426
Prepaid insurance		3,030		2,479		2,500		4,297
Prepaid vendor payments						1,305		1,835
Prepaid taxes		1,038		850		215		345
Prepaid rent		769		327
Prepaid other		3,273		731		1,562		1,296
Other		1,739		4,011		1,551		3,631
Other current assets	$	23,973	$	18,449	$	22,822	$	17,225

Note 6. 7. Property and Equipment

Property and equipment consisted of the following:

	September 30,			December 31,			June 30,			December 31,
(in thousands)	2017			2016			2021			2020
Land and land interests	$	32,599		$	31,670		$	30,695		$	32,849
Buildings and leasehold improvements		214,844			185,987			392,311			386,751
Equipment and other		347,461			326,868			427,101			401,288
Gross property and equipment		594,904			544,525			850,107			820,888
Accumulated depreciation		(299,147	)		(264,667	)		(363,190	)		(352,100	)
Property and equipment, net (excluding finance leases)								486,917			468,788
Finance lease ROU assets, net ⁽¹⁾								64,197			23,366
Property and equipment, net	$	295,757		$	279,858		$	551,114		$	492,154

⁽¹⁾	The increase in finance lease ROU assets is primarily due to the commencement of Pursuit’s new Sky Lagoon attraction in Iceland during the first quarter of 2021.

Depreciation expense was ~~$12.5 million and $10.0~~$10.7 million for the three months ended ~~September~~June 30, ~~2017~~2021 and ~~2016, respectively, and $32.9 million and $25.1~~$21.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016, respectively.~~

~~Non-cash increases to property and equipment related to assets acquired under capital leases were $1.1 million and $1.0~~2021. Depreciation expense was $11.5 million for the ~~nine~~three months ended ~~September~~June 30, ~~2017~~2020 and ~~2016, respectively. Non-cash increases to property~~$23.7 million for the six months ended June 30, 2020.

Property and equipment ~~purchases in~~purchased through accounts payable and accrued liabilities ~~were $0.8~~increased $4.2 million ~~and $5.6 million for~~during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016, respectively.~~decreased $7.1 million during the six months ended June 30, 2020.

Note 7. 8. Other Investments and Assets

Other investments and assets consisted of the following:

	September 30,		December 31,		June 30,		December 31,
(in thousands)	2017		2016		2021		2020
Cash surrender value of life insurance	$	23,167	$	23,197
Self-insured liability receivable		10,463		10,463	$	6,358	$	6,358
Workers’ compensation insurance security deposits		3,550		4,050
Other mutual funds		2,560		2,062		3,970		3,457
Contract costs						3,053		2,912
Other		7,005		4,525		2,709		2,765
Other investments and assets	$	46,745	$	44,297	$	16,090	$	15,492

Note 8. 9. Goodwill and Other Intangible Assets

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

(in thousands)

GES U.S.

GES International

Pursuit

Total

Balance at December 31, 2016

$
148,277

$
34,460

$
71,285

$
254,022

Business acquisitions

—

1,060

—

1,060

Foreign currency translation adjustments

—

3,084

5,753

8,837

Balance at September 30, 2017

$
148,277

$
38,604

$
77,038

$
263,919

(in thousands)	Pursuit
Balance at December 31, 2020	$	99,847
Business acquisition		11,776
Foreign currency translation adjustments		2,943
Balance at June 30, 2021	$	114,566

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) to estimate the fair value of our reporting units for purposes of goodwill impairment testing.

Although certain of Pursuit’s reporting units continue to operate at a loss due to travel restrictions as a result of the COVID-19 pandemic, we did not record any impairment charges during the first half of 2021 as there were no significant changes to our outlook for the future years and the risk profile of the reporting units had not changed.

Given the evolving nature of COVID-19, and the uncertain government and consumer reactions, the estimates and assumptions regarding expected future cash flows, discount rates, and terminal values used in our goodwill impairment analysis require considerable judgment and are based on our current estimates of market conditions, financial forecasts, and industry trends. These estimates, however, have inherent uncertainties and different assumptions could lead to materially different results including impairment charges in the future.

Other intangible assets consisted of the following:

	September 30, 2017							December 31, 2016								June 30, 2021							December 31, 2020
(in thousands)	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Useful Life (Years)	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Amortized intangible assets:
Intangible assets subject to amortization:
Customer contracts and relationships	$	68,739	$	(21,505	)	$	47,234	$	67,762	$	(14,345	)	$	53,417	6.2	$	37,926	$	(27,617	)	$	10,309	$	38,214	$	(26,288	)	$	11,926
Operating contracts and licenses		10,038		(1,083	)		8,955		9,315		(652	)		8,663	36.3		43,302		(2,854	)		40,448		42,012		(2,405	)		39,607
In-place lease															13.0		15,765		(900	)		14,865		15,347		(656	)		14,691
Tradenames		8,665		(2,613	)		6,052		8,324		(1,440	)		6,884	4.8		5,735		(2,508	)		3,227		5,940		(2,435	)		3,505
Non-compete agreements		5,358		(2,682	)		2,676		5,190		(1,369	)		3,821	0.5		790		(711	)		79		770		(616	)		154
Other		896		(601	)		295		886		(458	)		428	6.7		840		(123	)		717		818		(102	)		716
Total amortized intangible assets		93,696		(28,484	)		65,212		91,477		(18,264	)		73,213			104,358		(34,713	)		69,645		103,101		(32,502	)		70,599
Unamortized intangible assets:
Indefinite-lived intangible assets:
Business licenses		460		—			460		460		—			460			576		—			576		573		—			573
Other intangible assets	$	94,156	$	(28,484	)	$	65,672	$	91,937	$	(18,264	)	$	73,673		$	104,934	$	(34,713	)	$	70,221	$	103,674	$	(32,502	)	$	71,172

Intangible asset amortization expense was ~~$3.3 million and $2.7~~$1.6 million for the three months ended ~~September~~June 30, ~~2017~~2021 and ~~2016, respectively, and $9.6 million and $6.1~~$2.8 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021. Intangible asset amortization was $1.4 million for the three months ended June 30, 2020 and 2016, respectively. The weighted-average amortization period of customer contracts and relationships is approximately 8.8 years, operating contracts and licenses is approximately 26.5 years, tradenames is approximately 7.2 years, non-compete agreements is approximately 2.5 years, and other amortizable$3.6 million for the six months ended June 30, 2020. We recorded a non-cash impairment charge to intangible assets ~~is approximately 2.6 years.~~of $15.7 million during the six months ended June 30, 2020 related to our United States audio-visual production business. The duration and impact of COVID-19 may result in additional future impairment charges as facts and circumstances evolve.

At June 30, 2021, the estimated future amortization expense related to ~~amortized~~ intangible assets ~~held at September 30, 2017~~subject to amortization is as follows:

(in thousands)

Year ending December 31,

Remainder of 2017

$
2,812

2018

11,014

2019

9,946

2020

8,446

2021

7,450

Thereafter

25,544

Total

$
65,212

(in thousands)
Year ending December 31,
Remainder of 2021	$	3,025
2022		5,202
2023		4,534
2024		3,570
2025		2,271
Thereafter		51,043
Total	$	69,645

Note 9. 10. Other Current Liabilities

Other current liabilities consisted of the following:

	September 30,		December 31,		June 30,		December 31,
(in thousands)	2017		2016		2021		2020
Continuing operations:
Accrued income tax payable	$	16,673	$	758
Self-insured liability					$	5,363	$	5,715
Accrued sales and use taxes						4,824		1,547
Accrued employee benefit costs		5,935		2,624		2,939		2,363
Self-insured liability accrual		5,690		5,941
Accrued interest payable						2,028		3,042
Commissions payable		3,777		639		1,609		903
Accrued sales and use taxes		2,623		4,279
Accrued dividends		2,116		2,119
Current portion of pension liability		1,793		1,963
Deferred rent		1,656		1,535
Accrued rebates		1,061		1,078
Current portion of pension and postretirement liabilities						1,618		1,805
Accrued professional fees		924		794		1,309		1,691
Accrued restructuring		750		1,924		1,251		2,479
Other taxes		3,315		4,210		1,889		1,872
Other		4,909		1,774		3,585		5,123
Total continuing operations		51,222		29,638		26,415		26,540
Discontinued operations:
Self-insured liability						208		347
Environmental remediation liabilities		661		492		62		61
Self-insured liability accrual		332		162
Other		103		98		94		91
Total discontinued operations		1,096		752		364		499
Total other current liabilities	$	52,318	$	30,390	$	26,779	$	27,039

Note ~~10.~~ 11. Other Deferred Items and Liabilities

Other deferred items and liabilities consisted of the following:

	September 30,		December 31,		June 30,		December 31,
(in thousands)	2017		2016		2021		2020
Continuing operations:
Foreign deferred tax liability					$	23,668	$	21,336
Multi-employer pension plan withdrawal liability						14,471		15,864
Self-insured liability	$	14,644	$	12,981		7,019		6,662
Self-insured excess liability		10,463		10,463		6,358		6,358
Accrued compensation		9,402		8,514		5,811		5,821
Deferred rent		4,076		5,271
Foreign deferred tax liability		2,264		2,264
Accrued restructuring		1,903		1,858		2,586		2,751
Other		2,655		1,300		1,996		1,479
Total continuing operations		45,407		42,651		61,909		60,271
Discontinued operations:
Environmental remediation liabilities						2,192		2,179
Self-insured liability		3,011		3,748		1,720		1,639
Environmental remediation liabilities		1,716		3,091
Accrued income taxes		—		1,045
Other		126		199		251		539
Total discontinued operations		4,853		8,083		4,163		4,357
Total other deferred items and liabilities	$	50,260	$	50,734	$	66,072	$	64,628

Note ~~11.~~ 12. Debt and ~~Capital~~Finance Lease Obligations

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

September 30,

December 31,

(in thousands, except interest rates)

2017

2016

Revolving credit facility and term loan 3.3% and 2.6% weighted-average interest rate at
   September 30, 2017 and December 31, 2016, respectively, due through 2019 ⁽¹⁾

$
184,688

$
212,750

Brewster Inc. revolving credit facility 2.7% weighted-average interest rate at
   December 31, 2016 ⁽¹⁾

—

36,456

Less unamortized debt issuance costs

(1,071
)

(1,464
)
Total debt

183,617

247,742

Capital lease obligations 4.2% and 4.9% weighted-average interest rate at September 30,
   2017 and December 31, 2016, respectively, due through 2021

1,584

1,469

Total debt and capital lease obligations

185,201

249,211

Current portion ⁽²⁾

(124,574
)

(174,968
)
Long-term debt and capital lease obligations

$
60,627

$
74,243

	June 30,			December 31,
(in thousands, except interest rates)	2021			2020
2018 Credit Facility, 4.5% weighted-average interest rate at June 30, 2021 and December 31, 2020, due through 2023⁽¹⁾	$	326,949		$	266,762
FlyOver Iceland Credit Facility, 4.9% weighted-average interest rate at June 30, 2021 and December 31, 2020, due through 2023⁽¹⁾		5,754			5,820
FlyOver Iceland Term Loans, 3.8% weighted-average interest rate at June 30, 2021 and December 31, 2020, due through 2024⁽¹⁾		727			705
Less unamortized debt issuance costs		(2,352	)		(2,737	)
Total debt		331,078			270,550
Finance lease obligations, 9.1% weighted-average interest rate at June 30, 2021 and 8.0% at December 31, 2020, due through 2067⁽²⁾		66,235			23,141
Total debt and finance lease obligations ⁽³⁾⁽⁴⁾		397,313			293,691
Current portion		(3,349	)		(8,335	)
Long-term debt and finance lease obligations	$	393,964		$	285,356

⁽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⁾	The increase in finance lease obligations is primarily due to the commencement of Pursuit’s new Sky Lagoon attraction in Iceland during the first quarter of 2021, which has a 46-year lease term.

⁽²⁾⁽³⁾

~~Borrowings under~~The estimated fair value of total debt and finance leases was $355.1 million as of June 30, 2021 and $254.0 million as of December 31, 2020. The fair value of debt was estimated by discounting the ~~revolving credit facilities are classified as current because all borrowed amounts are due within one year.~~future cash flows using rates currently available for debt of similar terms and maturity, which is a Level 2 measurement. Refer to Note 13 – Fair Value Measurements.

⁽⁴⁾	Cash paid for interest on debt was $10.3 million for the six months ended June 30, 2021 and $7.5 million for the six months ended June 30, 2020.

2018 Credit Agreement

Effective ~~December 22, 2014, Viad~~October 24, 2018, we entered into ~~a $300 million Amended and Restated~~the 2018 Credit Agreement. The 2018 Credit Agreement (the “Credit Agreement”). The Credit Agreement provides for a senior credit facility in the aggregate amount of $300 million, which consists of a $175 million revolving credit facility (the “Revolving Credit Facility”) and a $125 million term loan (the “Term Loan”). Loans under the Credit Agreement havehas a maturity date of ~~December 22, 2019. Proceeds from the loans made under the Credit Agreement were used to refinance certain outstanding debt of the Company~~October 24, 2023 and ~~will be used~~provides for the ~~Company’s general corporate purposes in the ordinary course of its business. Under the~~$450 million 2018 Credit Agreement, the Revolving Credit Facility and/or the Term Loan may be increased up to an additional $100 million under certain circumstances. If such circumstances are met, the Company may obtain the additional borrowings under the Revolving Credit Facility, the Term Loan, or a combination of the two.Facility. The ~~Revolving~~2018 Credit Facility has a ~~$40~~$20 million sublimit for letters of credit. Borrowings and letters of credit can be denominated in U.S. dollars, Euros, Canadian dollars, or British pounds. ~~Viad’s~~Our lenders under the 2018 Credit Agreement have a first perfected security interest in all of our personal property.

Effective August 5, 2020, we entered into an amendment to the ~~personal property~~2018 Credit Agreement, which, among other things, (i) waived our financial covenants until September 30, 2022 (the “Covenant Waiver Period”) and (ii) required us to maintain minimum liquidity of ~~Viad, GES, GES Event Intelligence Services, Inc., CATC,~~$100 million, with liquidity defined as unrestricted cash and ~~ON Services including 65 percent~~available capacity on our 2018 Credit Facility. As of June 30, 2021, we were in compliance with the ~~capital stock~~amendment.

As of ~~top-tier foreign subsidiaries.~~June 30, 2021, capacity remaining under the 2018 Credit Facility was $113.5 million, reflecting borrowings of $327.0 million and $9.5 million in outstanding letters of credit.

2021 Credit Facility

Effective July 30, 2021, we refinanced the 2018 Credit Facility with a new $500 million senior secured credit facility (the “2021 Credit Facility”) to provide for financial flexibility to support our growth initiatives. The 2021 Credit Facility provides for a $400 million Term Loan B with a maturity date of July 30, 2028 and a $100 million revolving credit facility with a maturity date of July 30, 2026. The proceeds from the Term Loan B will be used to repay the 2018 Credit Facility, to fund future acquisitions and growth initiatives, and for general corporate purposes. The following are significant terms under the revolving credit facility:

•

Maintain minimum liquidity of $75 million through the earlier of (i) June 30, 2022 and (ii) the first fiscal quarter we are in compliance with the financial covenants;

•

Financial covenants will first be tested as of September 30, 2022 as described below;

•

Maintain an interest coverage ratio of not less than 2.00 to 1.00, with a step-up to 2.50 to 1.00 on or after December 31, 2022;

•

Maintain a total net leverage ratio of not greater than 4.50 to 1.00 with a step-down to 4.00 to 1.00 on or after December 31, 2022 and a step-up of 0.5x for four quarters for any material acquisition; and

•

Interest rate on the Term Loan B of London Interbank Offered Rate (“LIBOR”) plus 5.00%, with a LIBOR floor of 0.50%.

Refer to Note 24 – Subsequent Event.

FlyOver Iceland Credit Facility

Effective February ~~24, 2016, Viad executed an amendment (the “Credit Agreement Amendment”~~15, 2019, FlyOver Iceland ehf., (“FlyOver Iceland”) ~~to the Credit Agreement. The Credit Agreement Amendment modified the terms~~a wholly-owned subsidiary of the financial covenants and the negative covenants related to acquisitions, restricted payments, and indebtedness. The overall maximum leverage ratio and minimum fixed charge coverage ratio are 3.50 to 1.00 and 1.75 to 1.00, respectively, and will remain at those levels for the entire remaining term of the Credit Agreement. Acquisitions in substantially the same or related lines of business are permitted under the Credit Agreement Amendment, as long as the pro forma leverage ratio is less than or equal to 3.00 to 1.00. Viad can make dividends, distributions, and repurchases of its common stock up to $20 million per calendar year. Stock dividends, distributions, and repurchases above the $20 million limit are not subject to a liquidity covenant, and are permitted as long as the Company’s pro forma leverage ratio is less than or equal to 2.50 to 1.00 and there is no default or unmatured default, as defined in the Credit Agreement. Unsecured debt is allowed as long as the Company’s pro forma leverage ratio is less than or equal to 3.00 to 1.00. Significant other covenants under the Credit Agreement that remain unchanged by the Credit Agreement Amendment include limitations on investments, sales/leases of assets, consolidations or mergers, and liens on property. As of September 30, 2017, the fixed charge coverage ratio was 3.18 to 1.00, the leverage ratio was 1.26 to 1.00, and Viad was in compliance with all covenants under the Credit Agreement.

~~Effective December 28, 2016, Brewster Inc., part of Pursuit,~~Esja, entered into a credit agreement ~~(the “Brewster Credit Agreement”)~~ with a ~~$38~~€5.0 million ~~revolving~~(approximately $5.6 million U.S. dollars) credit facility (the ~~“Brewster Revolving~~“FlyOver Iceland Credit Facility”)~~. The Brewster Credit Agreement was used in connection~~ with ~~the Company’s acquisition of FlyOver Canada and has~~ a maturity date of ~~December 28, 2017.~~March 1, 2022. The ~~Company intends~~loan proceeds were used to ~~amend and extend~~complete the ~~Brewster Revolving~~development of the FlyOver Iceland attraction. In response to the COVID-19 pandemic, we entered into an addendum to the FlyOver Iceland Credit Facility effective January 8, 2021 wherein the principal payments were deferred for ~~one year. Additional~~twelve months beginning December 1, 2020, with the first payment due December 1, 2021. The addendum also extended the maturity date to September 1, 2023. There were no other changes to the terms of the FlyOver Iceland Credit Facility. During the first quarter of 2021, we obtained a waiver of certain covenants to the FlyOver Iceland Credit Facility through December 2021.

FlyOver Iceland Term Loans

During 2020, FlyOver Iceland entered into three term loans totaling ISK 90.0 million (approximately $0.7 million U.S. dollars) (the “FlyOver Iceland Term Loans”). The first term loan for ISK 10.0 million was entered into effective October 15, 2020 with a maturity date of April 1, 2023 and bears interest on a seven-day term deposit at the Central Bank of Iceland. The second term loan for ISK 30.0 million was entered into effective October 15, 2020 with a maturity date of October 1, 2024 and bears interest on a seven-day term deposit at the Central Bank of Iceland plus 3.07%. The third term loan for ISK 50.0 million was entered into effective December 29, 2020 with a maturity date of February 1, 2023 and bears interest at one-month Reykjavik InterBank Offered Rate (“REIBOR”) plus 4.99%. The Icelandic State Treasury guarantees supplemental loans provided by credit institutions to companies impacted by the COVID-19 pandemic. Accordingly, the Icelandic State Treasury guaranteed the repayment of up to 85% of the principal and interest on the ISK 10.0 million and ISK 30.0 million term loans and 70% of the principal amount on the ISK 50.0 million term loan. Loan proceeds will be used for potential future acquisitions in Canada and other general corporate purposes of Brewster Inc. Brewster Inc.’s lender has a first perfected security interest in all of the personal property of Brewster Inc. under the Brewster Revolving Credit Facility and a guaranty from Brewster Travel Canada Inc., the immediate parent of Brewster Inc., (secured by its present and future personal property), Viad, and all current or future subsidiaries of Viad that are required to ~~be guarantors under Viad’s Credit Agreement.~~fund FlyOver Iceland operations.

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

Borrowings under the Revolving Credit Facility (of which GES, GES Event Intelligence Services, Inc., CATC, and ON Services are guarantors) are indexed to the prime rate or the London Interbank Offered Rate, plus appropriate spreads tied to Viad’s leverage ratio. Commitment fees and letters of credit fees are also tied to Viad’s leverage ratio. The fees on the unused portion of the Credit Facility are currently 0.35 percent annually.

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

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

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

Note ~~12.~~ 13. Fair Value Measurements

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

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

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

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

~~Viad measures its money~~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								Fair Value Measurements at Reporting Date Using
(in thousands)	September 30, 2017		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		June 30, 2021		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	$	—	$	—	$	2	$	2	$	—	$	—
Other mutual funds⁽²⁾		2,560		2,560		—		—		3,970		3,970		—		—
Total assets at fair value on a recurring basis	$	2,679	$	2,679	$	—	$	—	$	3,972	$	3,972	$	—	$	—

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

$
—

$
—

			Fair Value Measurements at Reporting Date Using
(in thousands)	December 31, 2020		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market funds ⁽¹⁾	$	2	$	2	$	—	$	—
Other mutual funds ⁽²⁾		3,457		3,457		—		—
Total assets at fair value on a recurring basis	$	3,459	$	3,459	$	—	$	—

⁽¹⁾

~~Money~~We include money market ~~mutual~~ funds ~~are included~~ in “Cash and cash equivalents” in the ~~condensed consolidated balance sheets. These~~Condensed Consolidated Balance Sheets. We classify these investments ~~are classified~~ as available-for-sale and ~~were recorded~~record them at fair value. There have been no0 realized gains or losses related to these investments and ~~the Company has~~we have not experienced any redemption restrictions with respect to any of the money market mutual funds.

⁽²⁾

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

The carrying values of cash and cash equivalents, receivables, and accounts payable approximate fair value due to the short-term ~~maturities~~nature of these instruments. Refer to Note 11 12 – Debt and ~~Capital~~Finance Lease Obligations for the estimated fair value of debt obligations.

Note ~~13.~~ ~~Stockholders’ Equity~~14. Loss Per Share

The ~~following represents a reconciliation~~components of ~~the carrying amounts of stockholders’ equity attributable to Viad~~basic and ~~the noncontrolling interest for the nine months ended September 30, 2017 and 2016:~~diluted loss per share are as follows:

(in thousands)

Total Viad
Stockholders’
Equity

Noncontrolling
Interest

Total
Stockholders’
Equity

Balance at December 31, 2016

$
357,355

$
13,283

$
370,638

Net income

79,381

747

80,128

Dividends on common stock ($0.30 per share)

(6,119
)

—

(6,119
)
Common stock purchased for treasury

(1,272
)

—

(1,272
)
Employee benefit plans

5,916

—

5,916

Unrealized foreign currency translation adjustment

18,820

—

18,820

Other changes to AOCI

327

327

Other

56

—

56

Balance at September 30, 2017

$
454,464

$
14,030

$
468,494

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands, except per share data)	2021			2020			2021			2020
Net loss attributable to Viad (diluted)	$	(42,026	)	$	(206,278	)	$	(85,178	)	$	(292,863	)
Convertible preferred stock dividends		(1,923	)		—			(3,821	)		—
Adjustment to the redemption value of redeemable noncontrolling interest		(547	)		(332	)		(603	)		(458	)
Net loss allocated to Viad common stockholders (basic)	$	(44,496	)	$	(206,610	)	$	(89,602	)	$	(293,321	)
Basic weighted-average outstanding common shares		20,397			20,282			20,384			20,249
Diluted weighted-average outstanding shares		20,397			20,282			20,384			20,249
Loss per share:
Basic loss attributable to Viad common stockholders	$	(2.18	)	$	(10.19	)	$	(4.40	)	$	(14.49	)
Diluted loss attributable to Viad common stockholders⁽¹⁾	$	(2.18	)	$	(10.19	)	$	(4.40	)	$	(14.49	)

⁽¹⁾	Diluted loss per share amount cannot exceed basic loss per share.

Diluted loss per common share is calculated using the more dilutive of the two-class method or as-converted method. The two-class method uses net loss available to common stockholders and assumes conversion of all potential shares other than the participating securities. The as-converted method uses net loss and assumes conversion of all potential shares including the participating securities. Dilutive potential common shares include outstanding stock options, unvested restricted share units and convertible preferred stock. We apply the two-class method in calculating loss per common share as unvested share-based payment awards that contain nonforfeitable rights to dividends and preferred stock are considered participating securities. Accordingly, such securities are included in the earnings allocation in calculating loss per share. The adjustment to the carrying value of the redeemable noncontrolling interest is reflected in loss per common share.

We excluded the following weighted-average potential common shares from the calculations of diluted net loss per common share during the applicable periods because their inclusion would have been anti-dilutive:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands)	2021		2020		2021		2020
Convertible preferred stock (as if converted to common stock)		6,583		—		6,539		—
Unvested restricted share-based awards		161		96		172		90
Unvested performance share-based awards		34		—		23		—
Stock options		250		—		204		8

(in thousands)

Total Viad
Stockholders’
Equity

Noncontrolling
Interest

Total
Stockholders’
Equity

Balance at December 31, 2015

$
322,581

$
12,757

$
335,338

Net income

46,318

765

47,083

Dividends on common stock ($0.30 per share)

(6,079
)

—

(6,079
)
Common stock purchased for treasury

(679
)

—

(679
)
Employee benefit plans

4,693

—

4,693

Unrealized foreign currency translation adjustment

723

—

723

Tax benefits from share-based compensation

60

—

60

Other changes to AOCI

162

—

162

Other

28

—

28

Balance at September 30, 2016

$
367,807

$
13,522

$
381,329

Note 15. Common and Preferred Stock

Convertible Series A Preferred Stock

On August 5, 2020, we entered into an Investment Agreement with funds managed by private equity firm Crestview Partners, relating to the issuance of 135,000 shares of newly issued Convertible Series A Preferred Stock, par value $0.01 per share, for an aggregate purchase price of $135 million or $1,000 per share. The $135 million issuance was offset in part by $9.2 million of expenses related to the capital raise. The Investment Agreement also included a delayed draw commitment of up to $45 million in additional Convertible Series A Preferred Stock, which we could have accessed during the 12 months following the August 5, 2020 closing date on the same terms and conditions as the initial investment. We did not access the delayed draw during the commitment date. We have classified the convertible preferred stock as mezzanine equity in our Condensed Consolidated Balance Sheet due to the existence of certain change in control provisions that are not solely within our control.

The Convertible Series A Preferred Stock carries a 5.5% cumulative quarterly dividend, which is payable in cash or in-kind at Viad’s option and is convertible at the option of the holders into shares of our common stock at a conversion price of $21.25 per share. Upon the occurrence of a change in control event, the holders have a right to require Viad to repurchase such preferred stock. During the six months ended June 30, 2021, $3.8 million of dividends were deemed declared and paid in-kind.

Holders of the Convertible Series A Preferred Stock are entitled to vote with holders of Viad’s common stock on an as-converted basis.

Common Stock Repurchases

Our Board of Directors previously authorized us to repurchase shares of our common stock from time to time at prevailing market prices. Effective February 7, 2019, our Board of Directors authorized the repurchase of an additional 500,000 shares. In March 2020, our Board of Directors suspended our share repurchase program for the foreseeable future. Prior to the suspension, we had repurchased 53,784 shares on the open market for $2.8 million during the three months ended March 31, 2020. As of June 30, 2021, 546,283 shares remain available for repurchase. Additionally, we repurchase shares related to tax withholding requirements on vested restricted stock awards. Refer to Note 3 – Share-Based Compensation.

Note 16. Accumulated Other Comprehensive Income (Loss)

Changes in ~~AOCI~~accumulated other comprehensive income (loss) (“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)			Cumulative Foreign Currency Translation Adjustments			Unrecognized Net Actuarial Loss and Prior Service Credit, Net			Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2016	$	421		$	(29,084	)	$	(10,728	)	$	(39,391	)
Balance at December 31, 2020													$	(16,686	)	$	(13,955	)	$	(30,641	)
Other comprehensive income before reclassifications		188			18,820			—			19,008			7,654			—			7,654
Amounts reclassified from AOCI, net of tax		(45	)		—			184			139			—			122			122
Net other comprehensive income		143			18,820			184			19,147			7,654			122			7,776
Balance at September 30, 2017	$	564		$	(10,264	)	$	(10,544	)	$	(20,244	)
Balance at June 30, 2021													$	(9,032	)	$	(13,833	)	$	(22,865	)

(in thousands)	Cumulative Foreign Currency Translation Adjustments			Unrecognized Net Actuarial Loss and Prior Service Credit, Net			Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2019	$	(23,799	)	$	(11,900	)	$	(35,699	)
Other comprehensive loss before reclassifications		(18,374	)		—			(18,374	)
Amounts reclassified from AOCI, net of tax		—			311			311
Net other comprehensive income (loss)		(18,374	)		311			(18,063	)
Balance at June 30, 2020	$	(42,173	)	$	(11,589	)	$	(53,762	)

~~The following table presents information about reclassification adjustments out~~Amounts reclassified that relate to our defined benefit pension and postretirement plans include the amortization of ~~AOCI:~~

Nine Months Ended September 30,

Affected Line Item in the
Statement Where Net
Income is Presented
(in thousands)

2017

2016

Unrealized gains on investments

$
(72
)

$
(67
)

Interest income
Tax effect

27

25

Income taxes

$
(45
)

$
(42
)

Recognized net actuarial loss⁽¹⁾

$
596

$
538

Amortization of prior service credit⁽¹⁾

(323
)

(377
)

Tax effect

(89
)

(61
)

Income taxes

$
184

$
100

⁽¹⁾	~~Amount included in pension expense. Refer to Note 16~~ – ~~Pension and Postretirement Benefits.~~

prior service costs and actuarial net losses recognized during each period presented. We recorded these costs as components of net periodic cost for each period presented. Refer to Note 18 – Pension and Postretirement Benefits for additional information.

Note ~~14.~~ ~~Income Per Share~~

~~The components of basic and diluted income per share are as follows:~~

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in thousands, except per share data)

2017

2016

2017

2016

Net income attributable to Viad (diluted)

$
44,657

$
33,792

$
79,381

$
46,318

Less: Allocation to non-vested shares

(539
)

(454
)

(993
)

(629
)
Net income allocated to Viad common stockholders (basic)

$
44,118

$
33,338

$
78,388

$
45,689

Basic weighted-average outstanding common shares

20,166

20,017

20,130

19,972

Additional dilutive shares related to share-based compensation

270

190

252

178

Diluted weighted-average outstanding shares

20,436

20,207

20,382

20,150

Income per share:

Basic income attributable to Viad common stockholders

$
2.19

$
1.67

$
3.89

$
2.29

Diluted income attributable to Viad common stockholders

$
2.19

$
1.67

$
3.89

$
2.29

~~During the nine months ended September 30, 2017, 11,000 shares of share-based awards were not included in the computation of dilutive shares outstanding because the effect would be anti-dilutive.~~

~~Note 15.~~ 17. Income Taxes

The effective tax ~~rates~~rate was 4.8% for the three months ended ~~September~~June 30, ~~2017~~2021 and ~~2016 were 30.4 percent and 33.8 percent, respectively.~~a negative 20.6% for the three months ended June 30, 2020. The effective tax ~~rates~~rate was 5.6% for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016 were 29.0 percent and 33.1 percent, respectively.~~a negative 7.1% for the six months ended June 30, 2020.

~~The~~In prior quarters, the income tax provision was computed based on ~~the Company’s~~our estimated annualized effective tax rate (“AETR”) and the full-year forecasted income ~~by jurisdiction expected for~~or loss plus the ~~full year, including the~~tax impact of ~~any~~ unusual, infrequent, or ~~non-recurring items.~~ nonrecurring significant items during the period. During the three months ended June 30, 2021, we did not use the AETR to compute the quarter’s income tax benefit. Instead, the income tax benefit was computed using the actual year-to-date effective tax rate as the AETR became highly sensitive due to the amount of aggregate income projected in Canada, the United Arab Emirates, the Netherlands, and immaterial European operations was marginally positive. As the projected income is expected to be marginally positive in these operations, the actual effective tax rate was a better estimate of the current quarter tax benefit than the amount computed using the AETR.

The effective tax rate for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017~~2021 was less than the federal statutory rate of ~~35.0 percent~~21% primarily as a result of excluding the tax benefits on losses recognized in the United States, United Kingdom, and other European countries. During the three months ended June 30, 2021, we recorded a valuation allowance against the current year tax benefit on the losses recognized by Flyover Iceland and recorded a $1.5 million valuation allowance against the net operating loss tax assets generated by our historic Flyover Iceland operations as the uncertainty of business from international travel to Iceland increased due to ~~foreign income taxed at lower~~the COVID-19 pandemic. This charge was primarily offset by the recording of a $1.0 million benefit associated with the carry back of 2020 Canadian net operating loss to request $6.5 million of prior year paid taxes incurred when we were subject to higher statutory rates.

The negative effective tax rates for the ~~release~~three and six months ended June 30, 2020 were due to the recording of a valuation allowance of $25.5 million in the second quarter of 2020 against our remaining United States, United Kingdom, and other European net deferred tax assets as of June 30, 2020, as well as 0 tax benefits on non-deductible goodwill impairments and losses recognized in those jurisdictions. We recorded the valuation allowance ~~against certain foreign net operating~~based upon the level of historical losses and the ~~adoption~~uncertainty and timing of ~~new accounting guidance, which requires~~future income.

We received cash refunds of $0.3 million during the ~~excess tax benefit on share-based compensation to be recorded to income tax expense rather than equity. The effective tax rate for the nine~~three months ended ~~September~~June 30, ~~2016 was less than~~2021 and made net cash payments of $0.4 million during the ~~federal statutory rate primarily due to foreign income taxed at lower rates.~~

~~During the nine~~six months ended ~~September~~June 30, ~~2017~~2021. We received tax refunds in excess of payments of $11.2 million during the three months ended June 30, 2020 and ~~2016, cash paid for income taxes was $10.9~~ $7.9 million ~~and $8.4 million, respectively.~~during the six months ended June 30, 2020.

Note ~~16.~~ 18. Pension and Postretirement Benefits

The components of net periodic benefit cost of ~~Viad’s~~our pension and postretirement benefit plans for the three months ended ~~September~~June 30, ~~2017~~2021 and ~~2016 included~~2020 consist of the following:

	Domestic Plans																		Domestic Plans
	Pension Plans						Postretirement Benefit Plans						Foreign Pension Plans						Pension Plans					Postretirement Benefit Plans						Foreign Pension Plans
(in thousands)	2017			2016			2017			2016			2017			2016			2021		2020			2021			2020			2021			2020
Service cost	$	8		$	54		$	22		$	5		$	138		$	123		$	—	$	—		$	15		$	16		$	117		$	108
Interest cost		197			257			92			126			120			124			91		168			40			70			80			83
Expected return on plan assets		(55	)		(62	)		—			—			(156	)		(142	)		12		(34	)		—			—			(130	)		(129	)
Amortization of prior service credit		—			—			(107	)		(125	)		—			—			—		—			(2	)		(37	)		—			—
Recognized net actuarial loss		106			105			3			46			48			1
Recognized net actuarial (gain) loss																				159		130			42			(43	)		50			44
Net periodic benefit cost	$	256		$	354		$	10		$	52		$	150		$	106		$	262	$	264		$	95		$	6		$	117		$	106

The components of net periodic benefit cost of ~~Viad’s~~our pension and postretirement benefit plans for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016 included~~2020 consist of the following:

	Domestic Plans																		Domestic Plans
	Pension Plans						Postretirement Benefit Plans						Foreign Pension Plans						Pension Plans						Postretirement Benefit Plans						Foreign Pension Plans
(in thousands)	2017			2016			2017			2016			2017			2016			2021			2020			2021			2020			2021			2020
Service cost	$	56		$	74		$	69		$	74		$	396		$	368		$	—		$	—		$	28		$	31		$	230		$	218
Interest cost		604			774			311			429			348			368			205			328			95			158			156			167
Expected return on plan assets		(162	)		(192	)		—			—			(450	)		(421	)		(15	)		(35	)		—			—			(255	)		(260	)
Amortization of prior service credit		—			—			(323	)		(377	)		—			—			—			—			(3	)		(73	)		—			—
Recognized net actuarial loss		336			318			123			221			137			2			310			265			98			39			99			90
Net periodic benefit cost	$	834		$	974		$	180		$	347		$	431		$	317		$	500		$	558		$	218		$	155		$	230		$	215

~~Viad expects~~

We expect to contribute ~~$1.6~~$0.8 million to ~~its~~our funded pension plans, $0.9 million to ~~its~~our unfunded pension plans, and ~~$1.1~~$0.9 million to ~~its~~our postretirement benefit plans in ~~2017.~~2021. During the ~~nine~~six months ended ~~September~~June 30, ~~2017, Viad~~2021, we contributed ~~$1.4~~$0.5 million to ~~its~~our funded pension plans, ~~$0.5~~$0.4 million to ~~its~~our unfunded pension plans, and ~~$1.1~~$0.5 million to ~~its~~our postretirement benefit plans.

Note ~~17.~~ 19. Restructuring Charges

~~The Company has taken~~GES

As part of our efforts to drive efficiencies and simplify our business operations, we took certain restructuring actions designed to simplify and transform GES for greater profitability. In response to the COVID-19 pandemic in 2020, we accelerated our transformation and streamlining efforts at GES to significantly reduce ~~the Company’s~~costs and create a lower and more flexible cost structure ~~primarily within GES U.S. and GES International, as well as~~focused on servicing our more profitable market segments. These initiatives resulted in restructuring charges related to the elimination of certain positions and continuing to reduce our facility footprint at GES, as well as charges related to the ~~corporate office. As~~closure and liquidation of GES’ United Kingdom-based audio-visual services business. In the fourth quarter of 2020, we entered into an agreement with a ~~result,~~third party to outsource the ~~Company~~management, cleaning, and storage of the aisle carpeting we use at live events and consequently vacated a facility during 2021.

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 ~~consisting~~consist of severance and related benefits ~~as a result of workforce reductions and charges related~~due to ~~the consolidation and downsizing of facilities representing the remaining operating lease obligations (net of estimated sublease income) and related costs.~~headcount reductions.

Changes to the restructuring liability by major restructuring activity are as follows:

	GES						Other Restructurings						GES						Other Restructurings
(in thousands)	Severance & Employee Benefits			Facilities			Severance & Employee Benefits			Total			Severance & Employee Benefits			Facilities			Severance & Employee Benefits			Total
Balance at December 31, 2016	$	2,274		$	1,092		$	416		$	3,782
Balance at December 31, 2020													$	2,440		$	2,766		$	24		$	5,230
Restructuring charges		442			237			138			817			10			3,560			43			3,613
Cash payments		(1,048	)		(449	)		(451	)		(1,948	)		(686	)		(2,323	)		(60	)		(3,069	)
Non-cash items⁽¹⁾														—			(1,934	)		—			(1,934	)
Adjustment to liability		—			—			2			2			(2	)		(15	)		14			(3	)
Balance at September 30, 2017	$	1,668		$	880		$	105		$	2,653
Balance at June 30, 2021													$	1,762		$	2,054		$	21		$	3,837

(1)	Represents non-cash adjustments related to a write down of certain ROU assets as a result of vacating certain facilities prior to the lease term and the closure and liquidation of GES’ United Kingdom-based audio-visual services business.

As of ~~September~~June 30, ~~2017,~~2021, $1.5 million of the liabilities related to severance and employee benefits ~~are expected to be paid~~will remain unpaid by the end of ~~2018. Additionally, the liability~~2021. The liabilities related to ~~future lease payments~~facilities primarily include non-lease expenses that will be paid over the remaining lease ~~terms for GES.~~terms. Refer to Note 19 23 – Segment Information for information regarding restructuring charges by segment.

Note 20. Leases and Other

The balance sheet presentation of our operating and finance leases is as follows:

		June 30,		December 31,
(in thousands)	Classification on the Condensed Consolidated Balance Sheet	2021		2020
Assets:
Operating lease assets	Operating lease ROU assets	$	84,175	$	82,739
Finance lease assets ⁽¹⁾	Property and equipment, net		64,197		23,366
Total lease assets		$	148,372	$	106,105

Liabilities:
Current:
Operating lease obligations	Operating lease obligations	$	11,422	$	15,697
Finance lease obligations	Current portion of debt and finance lease obligations		2,502		2,514
Noncurrent:
Operating lease obligations	Long-term operating lease obligations		81,727		70,150
Finance lease obligations ⁽¹⁾	Long-term debt and finance lease obligations		63,733		20,627
Total lease liabilities		$	159,384	$	108,988

⁽¹⁾	The increase in finance lease assets and obligations is primarily due to the commencement of Pursuit’s new Sky Lagoon attraction in Iceland during the first quarter of 2021, which has a 46-year lease term.

During the first quarter of 2021, we recorded a write down of certain ROU assets as a result of vacating certain facilities prior to the lease term.

The components of lease expense consisted of the following:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands)	2021		2020		2021		2020
Finance lease cost:
Amortization of ROU assets	$	1,068	$	923	$	2,138	$	1,841
Interest on lease liabilities		1,473		412		2,788		829
Operating lease cost		5,893		6,912		12,163		13,639
Short-term lease cost		198		32		459		342
Variable lease cost		1,092		1,359		2,034		3,058
Total lease cost, net	$	9,724	$	9,638	$	19,582	$	19,709

Other information related to operating and finance leases are as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands)	2021		2020		2021			2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	6,460	$	6,095	$	12,613		$	12,624
Operating cash flows from finance leases	$	933	$	706	$	1,207		$	866
Financing cash flows from finance leases	$	684	$	793	$	1,394		$	1,570
ROU assets obtained in exchange for lease obligations:
Operating leases	$	12,636	$	3,298	$	18,935		$	4,077
Finance leases	$	—	$	1,038	$	41,709		$	1,768

					June 30,			December 31,
					2021			2020
Weighted-average remaining lease term (years):
Operating leases						8.79			8.39
Finance leases						35.21			13.97
Weighted-average discount rate:
Operating leases						7.22	%		6.93	%
Finance leases						9.05	%		7.99	%

As of June 30, 2021, the estimated future minimum lease payments under non-cancellable leases, excluding variable leases and variable non-lease components, are as follows:

(in thousands)	Operating Leases			Finance Leases			Total
Remainder of 2021	$	9,658		$	4,231		$	13,889
2022		17,683			7,987			25,670
2023		15,618			7,468			23,086
2024		13,806			6,789			20,595
2025		12,550			6,252			18,802
Thereafter		63,932			191,984			255,916
Total future lease payments		133,247			224,711			357,958
Less: Amount representing interest		(40,098	)		(158,476	)		(198,574	)
Present value of minimum lease payments		93,149			66,235			159,384
Current portion		11,422			2,502			13,924
Long-term portion	$	81,727		$	63,733		$	145,460

As of June 30, 2021, the estimated future minimum rental income under non-cancellable leases, which includes rental income from facilities that we own, is as follows:

(in thousands)
Remainder of 2021	$	761
2022		1,115
2023		890
2024		662
2025		506
Thereafter		1,369
Total minimum rents	$	5,303

Lease Not Yet Commenced

As of June 30, 2021, we had executed a facility lease for which we did not have control of the underlying assets. Accordingly, we did not record the lease liability and ROU asset on our Condensed Consolidated Balance Sheets. This lease is for the new FlyOver attraction, FlyOver Canada Toronto. We expect the lease commencement date to begin in fiscal year 2022 with a lease term of 20 years.

Note ~~18.~~ 21. Litigation, Claims, Contingencies, and Other

~~Viad and certain of its subsidiaries~~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 ~~Viad.~~us. Although the amount of liability as of ~~September~~June 30, ~~2017~~2021 with respect to ~~these~~unresolved legal matters is not ascertainable, ~~Viad believes~~we believe that any resulting liability, after taking into consideration amounts already provided for and insurance coverage, will not have a material effect on ~~Viad’s~~our business, financial position, or results of operations.

~~Viad~~On July 18, 2020, an off-road Ice Explorer operated by our Pursuit business was involved in an accident while enroute to the Athabasca Glacier, resulting in three fatalities and multiple other serious injuries. We continue to support the victims and their families, and we are fully cooperating with the applicable regulatory authorities to investigate this accident. We immediately reported the accident to our relevant insurance carriers, who are also supporting the investigation and subsequent claims. Subject to customary deductibles, we believe that our insurance coverage is sufficient to cover potential claims related to this accident.

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 ~~Viad has~~we have or had operations. If ~~the Company fails~~we fail to comply with these environmental laws and regulations, civil and criminal penalties could be imposed, and ~~Viad~~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, ~~Viad~~we also ~~faces~~face exposure to actual or potential claims and lawsuits involving environmental matters relating to ~~its~~our past operations. As of ~~September~~June 30, ~~2017, Viad~~2021, we had recorded environmental remediation liabilities of ~~$2.4~~$2.3 million related to previously sold operations. Although ~~it is~~we are a party to certain environmental disputes, ~~Viad believes~~we believe that any resulting liabilities, after taking into consideration amounts already provided for and insurance coverage, will not have a material effect on ~~the Company’s~~our financial position or results of operations.

As of ~~September~~June 30, ~~2017, Viad,~~2021, on behalf of ~~its~~our subsidiaries, we had certain obligations under guarantees to third parties. These guarantees are not subject to liability recognition in the condensed consolidated financial statements and relate to leased facilities and equipment leases entered into by ~~Viad’s~~our subsidiary operations. ~~The Company~~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 ~~Viad~~we would be required to make under all guarantees existing as of ~~September~~June 30, ~~2017~~2021 would be ~~$7.5~~$130.2 million. These guarantees relate to our leased equipment and facilities ~~leased by the Company~~ through ~~September 2021.~~January 2040. There are no0 recourse provisions that would enable ~~Viad~~us to recover from third parties any payments made under the guarantees. Furthermore, there are no collateral or similar arrangements ~~whereby Viad~~pursuant to which we could recover payments.

A significant ~~portion~~number of ~~Viad’s~~our employees are unionized and ~~the Company is~~we are a party to approximately 100 collective-bargaining agreements, with approximately one-third requiring renegotiation each year. If ~~the Company was~~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 ~~the Company’s businesses~~our business and results of operations. ~~Viad believes~~We believe that relations with ~~its~~our employees are satisfactory and that collective-bargaining agreements expiring in ~~2017~~2021 will be renegotiated in the ordinary course of business without having a material adverse effect on Viad’s operations. The Company entered into showsite and warehouse agreements with the Chicago Teamsters Local 727, effective January 1, 2014, and those agreements contain provisions that allow the parties to re-open negotiation of the agreements on pension-related issues. The Company is in informal discussions regarding those issues with all relevant parties to resolve those issues in a manner that will be reasonable and equitable to employees, customers, and stockholders.business. Although ~~the Company’s~~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.

Viad’s businesses contribute to various multi-employer pension plans based on obligations arising under collective-bargaining agreements covering its union-represented employees. Based upon the information available to Viad from plan administrators, management believes that several of these multi-employer plansWe are underfunded. The Pension Protection Act of 2006 requires pension plans underfunded at certain levels to reduce, over defined time periods, the underfunded status. In addition, under current laws, the termination of a plan, or a voluntary withdrawal from a plan by Viad, or a shrinking contribution base to a plan as a result of the insolvency or withdrawal of other contributing employers to such plan, would require Viad to make payments to such plan for its proportionate share of the plan’s unfunded vested liabilities. As of September 30, 2017, the amount of additional funding, if any, that Viad would be required to make related to multi-employer pension plans is not ascertainable.

~~Viad is~~ self-insured up to certain limits for workers’ compensation ~~employee health benefits,~~and general liabilities, which includes automobile, product ~~and~~ general liability, and client property loss claims. The aggregate amount of insurance liabilities (up to ~~the Company’s~~our retention limit) related to ~~Viad’s~~our continuing operations was ~~$20.2~~$12.4 million as of ~~September~~June 30, ~~2017~~2021, which includes ~~$14.3~~$7.6 million related to workers’ compensation liabilities, and ~~$5.9~~$4.8 million related to ~~general/auto~~general liability claims. ~~Viad has~~We have also retained and provided for certain workers’ compensation insurance liabilities in conjunction with previously sold businesses of ~~$3.3~~$1.9 million as of ~~September~~June 30, ~~2017, related to workers’ compensation liabilities.~~2021. We are also self-insured for certain employee health benefits and the estimated employee health benefit claims incurred but not yet reported was $0.8 million as of June 30, 2021. Provisions for losses for claims incurred, including actuarially derived estimated claims incurred but not yet reported, are made based on ~~Viad’s~~our historical experience, claims frequency, and other factors. A change in the assumptions used could result in an adjustment to recorded liabilities. ~~Viad has~~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. ~~Viad does~~We do not maintain a self-insured retention pool fund as claims are paid from current cash resources at the time of settlement. ~~Viad’s~~Our net cash payments in connection with these insurance liabilities were ~~$1.3~~$0.9 for the three months ended June 30, 2021 and $1.1 million for the six months ended June 30, 2021 and ~~$1.5~~$1.2 million for the three months ended ~~September~~June 30, ~~2017~~2020 and ~~2016, respectively, and $3.8 million and $3.9~~$2.7 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017 and 2016, respectively.~~2020.

In addition, as of ~~September~~June 30, ~~2017, Viad~~2021, we have recorded insurance liabilities of ~~$10.5~~$6.4 million related to continuing operations, which represents the amount for which ~~Viad remains~~we remain the primary obligor after self-insured insurance limits, without taking into consideration the above-referenced insurance coverage. ~~Of this total, $6.9~~The $6.4 million is related to workers’ compensation liabilities, ~~and $3.6 million related to general/auto liability claims~~ which ~~are~~is recorded in other deferred items and liabilities in ~~Viad’s condensed consolidated balance sheets~~the Condensed Consolidated Balance Sheets with a corresponding receivable in other ~~investments.~~investments and assets.

Note 22. Noncontrolling Interest – Redeemable and Non-redeemable

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. Subsequent to additional capital contributions, our equity ownership increased to 54.6% as of June 30, 2021. Through Esja and its wholly-owned subsidiary, we are operating the FlyOver Iceland attraction.

The minority Esja shareholders have 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”) 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 interest’s carrying value is determined by the fair value of the noncontrolling interest as of the acquisition date and the noncontrolling interest’s share of the subsequent net income or loss. This value is benchmarked against the redemption value of the sellers’ put option. The carrying value is adjusted to the redemption value, provided that it does not fall below the initial carrying value, as determined by the purchase price allocation. We have made a policy election to reflect any changes caused by such an adjustment to retained earnings (accumulated deficit), rather than to current earnings (loss).

Changes in the redeemable noncontrolling interest are as follows:

(in thousands)
Balance at December 31, 2020	$	5,225
Net loss attributable to redeemable noncontrolling interest		(925	)
Adjustment to the redemption value		603
Capital contribution		266
Foreign currency translation adjustment		156
Balance at June 30, 2021	$	5,325

Non-redeemable noncontrolling interest

Non-redeemable noncontrolling interest represents the portion of equity in a subsidiary that is not attributable, directly or indirectly, to us. Our non-redeemable noncontrolling interest relates to the equity ownership interest that we do not own.

Changes in the non-redeemable noncontrolling interest are as follows:

(in thousands)	Glacier Park Inc.			Brewster ⁽¹⁾			Sky Lagoon			Total
Balance at December 31, 2020	$	13,953		$	51,295		$	12,896		$	78,144
Net loss attributable to non-redeemable noncontrolling interest		(635	)		(388	)		(932	)		(1,955	)
Acquisitions		—			6,759			—			6,759
Dividends		—			(951	)		—			(951	)
Foreign currency translation adjustments		5			1,427			387			1,819
Balance at June 30, 2021	$	13,323		$	58,142		$	12,351		$	83,816
Equity ownership interest that we do not own		20	%		40	%		49	%

⁽¹⁾	Includes Mountain Park Lodges and our recently acquired Golden Skybridge at Brewster, part of the Banff Jasper Collection.

Note ~~19.~~ 23. Segment Information

~~Viad measures~~We measure the profit and performance of ~~its~~our operations on the basis of segment operating income ~~(loss)~~or loss, which excludes restructuring charges and recoveries and impairment ~~charges and recoveries.~~charges. Intersegment sales are eliminated in consolidation and intersegment transfers are not significant. Corporate activities include expenses not allocated to operations. Depreciation and amortization and share-based compensation expense are the only significant non-cash items for the reportable segments.

~~Viad’s~~During the first quarter of 2021, we reorganized GES’ operating segments to represent the changes in how our CODM reviews the financial performance of GES and makes decisions regarding the allocation of resources. Accordingly, GES is now a single reportable segment. We made no changes to the Pursuit reportable segment.

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

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in thousands)

2017

2016

2017

2016

Revenue:

GES:

U.S.

$
184,761

$
232,484

$
684,003

$
636,299

International

54,040

60,926

203,222

187,689

Intersegment eliminations

(6,682
)

(6,425
)

(17,126
)

(15,439
)
Total GES

232,119

286,985

870,099

808,549

Pursuit

106,980

97,402

159,581

143,111

Corporate eliminations ⁽¹⁾

—

(1,922
)

—

(3,086
)
Total revenue

$
339,099

$
382,465

$
1,029,680

$
948,574

Segment operating income (loss):

GES:

U.S.

$
(2,851
)

$
14,543

$
39,319

$
37,907

International

(2,870
)

644

8,491

4,951

Total GES

(5,721
)

15,187

47,810

42,858

Pursuit

53,860

44,248

53,523

44,733

Segment operating income

48,139

59,435

101,333

87,591

Corporate eliminations ⁽¹⁾

18

(518
)

50

(940
)
Corporate activities

(4,474
)

(2,772
)

(10,092
)

(7,390
)
Operating income

43,683

56,145

91,291

79,261

Interest income

74

44

174

138

Interest expense

(2,117
)

(1,489
)

(6,281
)

(4,109
)
Restructuring charges:

GES U.S.

435

(1,498
)

364

(1,791
)
GES International

(689
)

(203
)

(1,043
)

(1,374
)
Pursuit

—

—

—

(93
)
Corporate

(1
)

4

(138
)

(406
)
Impairment recoveries (charges):

Pursuit

24,467

(120
)

29,098

(120
)
Income from continuing operations before income taxes

$
65,852

$
52,883

$
113,465

$
71,506

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands)	2021			2020			2021			2020
Revenue:
GES	$	24,920		$	24,803		$	44,065		$	305,938
Pursuit		36,313			5,264			46,103			18,787
Total revenue	$	61,233		$	30,067		$	90,168		$	324,725
Segment operating loss:
GES	$	(26,897	)	$	(32,060	)	$	(46,801	)	$	(21,202	)
Pursuit		(8,097	)		(17,692	)		(26,418	)		(37,966	)
Segment operating loss		(34,994	)		(49,752	)		(73,219	)		(59,168	)
Corporate eliminations ⁽¹⁾		18			16			35			32
Corporate activities		(3,006	)		(2,468	)		(5,011	)		(3,257	)
Operating loss		(37,982	)		(52,204	)		(78,195	)		(62,393	)
Interest income		22			176			55			255
Interest expense		(5,587	)		(5,186	)		(10,705	)		(9,204	)
Multi-employer pension plan withdrawal		(57	)		(462	)		(57	)		(462	)
Other expense		(680	)		(265	)		(1,040	)		(684	)
Restructuring charges:
GES		(787	)		(29	)		(3,570	)		(685	)
Pursuit		—			(56	)		(23	)		(57	)
Corporate		—			(175	)		(20	)		(369	)
Impairment charges:
GES		—			(114,020	)		—			(200,643	)
Pursuit		—			—			—			(1,757	)
Loss from continuing operations before income taxes	$	(45,071	)	$	(172,221	)	$	(93,555	)	$	(275,999	)

⁽¹⁾

Corporate eliminations ~~recorded during the three and nine months ended September 30, 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. The corporate eliminations recorded during the three and nine months ended September 30, 2016 represent the elimination of intercompany revenue and profit realized by GES for work completed on renovations to Pursuit’s Banff Gondola.

~~Note 20.~~ ~~Discontinued Operations~~

Discontinued operations in 2017 includes reserves to resolve certain environmental matters and legal fees related to previously sold operations. During 2016, Viad recorded liability reserve adjustments and legal fees related to previously sold operations.

Note ~~21.~~ 24. Subsequent Event

~~On November 3, 2017, the Company acquired the controlling interest (54.5% of the common stock) in Esja Attractions ehf. (“Esja”~~Effective July 30, 2021, we refinanced our current $450 million 2018 Credit Facility, which was scheduled to mature on October 24, 2023, with a new $500 million senior secured credit facility (the “2021 Credit Facility”), to provide for financial flexibility to support our growth initiatives. The 2021 Credit Facility provides for a ~~purchase price~~$400 million Term Loan B with a maturity date of ~~€8.2~~July 30, 2028 and a $100 million ~~(approximately $9.5 million) in cash. Esja,~~revolving credit facility with a ~~private corporation in Reykjavik, Iceland, is developing~~maturity date of July 30, 2026. The proceeds from the Term Loan B will be used to repay the 2018 Credit Facility, to fund future acquisitions and ~~will operate~~growth initiatives, and for general corporate purposes. The following are significant terms under the ~~new FlyOver Iceland attraction. The FlyOver Iceland attraction is expected~~revolving credit facility:

•

Maintain minimum liquidity of $75 million through the earlier of (i) June 30, 2022 and (ii) the first fiscal quarter we are in compliance with the financial covenants;

•

Financial covenants will first be tested as of September 30, 2022 as described below;

•

Maintain an interest coverage ratio of not less than 2.00 to 1.00, with a step-up to 2.50 to 1.00 on or after December 31, 2022;

•

Interest rate on the Term Loan B of LIBOR plus 5.00%, with a LIBOR floor of 0.50%.

Refer to ~~open in 2019.~~

Note 12 – Debt and Finance Lease Obligations for further information.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Form 10-Q contains a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words, and variations of words, such as “will,” “may,” “expect,” “would,” “could,” “might,” “intend,” “plan,” “believe,” “estimate,” “anticipate,” “deliver,” “seek,” “aim,” “potential,” “target,” “outlook,” and similar expressions are intended to identify our forward-looking statements. Similarly, statements that describe our business strategy, outlook, objectives, plans, initiatives, intentions, or goals also are forward-looking statements. These forward-looking statements are not historical facts and are subject to a host of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those in the forward-looking statements contained in this Quarterly Report on Form 10-Q. Such risks, uncertainties and other important factors include, among others: the factors set forth under “Risk Factors” (Part I, Item 1A) and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (Part II, Item 7) in our Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (the “SEC”), as may be updated elsewhere in this report; and the information set forth in other Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that we have filed or will file with the SEC. Such risks, uncertainties, and other important factors include, among others: the short- and longer-term effects of the COVID-19 pandemic, including the demand for travel, event business and travel experiences, and levels of consumer confidence; actions that governments, businesses, and individuals take in response to the COVID-19 pandemic or any future resurgence, including limiting or banning travel; the impact of the COVID-19 pandemic, or any future resurgence, on global and regional economies, travel, and economic activity, including the duration and magnitude of its impact on unemployment rates and consumer discretionary spending; and the pace of recovery following the COVID-19 pandemic or any future resurgence.

Important factors that could cause actual results to differ materially from those described in our forward-looking statements include, but are not limited to, the following:

•

the impact of the COVID-19 pandemic on our financial condition, liquidity, and cash flow;

•

our ability to anticipate and adjust for the impact of the COVID-19 pandemic on our businesses;

•

general economic uncertainty in key global markets and a worsening of global economic conditions;

•

travel industry disruptions;

•

our ability to successfully integrate and achieve established financial and strategic goals from acquisitions;

•

our dependence on large exhibition event clients;

•

the importance of key members of our account teams to our business relationships;

•

the competitive nature of the industries in which we operate;

•

unanticipated delays and cost overruns of our capital projects, and our ability to achieve established financial and strategic goals for such projects;

•

seasonality of our businesses;

•

transportation disruptions and increases in transportation costs;

•

natural disasters, weather conditions, and other catastrophic events;

•

our multi-employer pension plan funding obligations;

•

our exposure to labor cost increases and work stoppages related to unionized employees;

•

liabilities relating to prior and discontinued operations;

•

adverse effects of show rotation on our periodic results and operating margins;

•

our exposure to currency exchange rate fluctuations;

•

our exposure to cybersecurity attacks and threats;

•

compliance with laws governing the storage, collection, handling, and transfer of personal data and our exposure to legal claims and fines for data breaches or improper handling of such data; and

•

changes affecting the London Inter-bank Offered Rate.

For a more complete discussion of the risks and uncertainties that may affect our business or financial results, refer to Item 1A, “Risk Factors,” of our 2020 Form 10-K. We disclaim and do not undertake any obligation to update or revise any forward-looking statement except as required by applicable law or regulation.

The following Management’s Discussion and Analysis (“MD&A”) should be read in conjunction with ~~the Annual Report on~~our 2020 Form 10-K ~~of Viad Corp (“Viad” or the “Company”) for the year ended December 31, 2016~~ and the condensed consolidated financial statements and ~~accompanying~~related notes included in this Form 10-Q. The MD&A is intended to assist in ~~providing an~~ understanding ~~of the Company’s~~our financial condition and results of operations. ~~This discussion contains forward-looking statements that involve risks~~

Overview

We are a leading provider of experiential leisure travel and ~~uncertainties. Viad’s actual results could differ materially from those anticipated due~~live events and marketing experiences with operations in the United States, Canada, the United Kingdom, continental Europe, the United Arab Emirates, and Iceland. We are committed to ~~various factors discussed under “Forward-Looking Statements”~~providing unforgettable experiences to our clients and ~~elsewhere in this Form 10-Q.~~guests.

~~Overview~~

~~Viad operates~~We operate through ~~three~~two reportable business segments: GES ~~U.S., GES International (collectively, “GES”),~~ and ~~Pursuit.~~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.

~~Markets Served~~

GES U.S. and GES International both offer a full suite of services for event organizers and corporate brand marketers across four live event markets: (i) Exhibitions; (ii) Conferences; (iii) Corporate Events, and (iv) Consumer Events (collectively, “Live Events”).

~~Services Offered~~

~~GES offers a comprehensive range of services and innovative technology to event organizers and corporate brand marketers including (i) Core Services; (ii) Event Technology, and (iii) Audio-Visual:~~

~~Core Services~~. GES provides official contracting services and products to event organizers and corporate brand marketers for Live Events. Contracting services and products are provided primarily to Exhibitions and to a lesser degree to Conferences, Corporate Events, and Consumer Events.

~~Event Technology.~~ ~~GES offers a comprehensive range of event technology services including event accommodation solutions, registration and data analytics, and event management tools.~~

o•

~~Event accommodation solutions~~. GES ~~U.S. provides end-to-end~~is a global, full-service live events company providing exhibition and conference services, brand experiences, and on-site venue services to the world’s leading brands and event accommodation services in North America. GES is responsible for researching and recommending local hotels, securing room blocks, marketing reserved room blocks to event attendees and corporate brand marketers, managing attendee and corporate brand marketer reservations, and addressing any accommodations concerns during the show.organizers.

o•

~~Registration~~Pursuit is an attractions and ~~data analytics. GES U.S.~~hospitality company that provides a collection of inspiring and GES International provide both a software-as-a-service model and fully managed options for registration and ticketing, lead management, and reporting and analytics. Their multi-lingual and multi-currency technology enables a common platform for global event organizers.

~~Event management tools~~. GES U.S. and GES International provide event management tools for Live Events which include online ordering capabilities, sponsoring management tools, content management systems, and Live Event tracking.unforgettable experiences in iconic destinations.

COVID-19 Pandemic

~~Audio-Visual.~~ ~~GES U.S.~~Starting in mid-March 2020 and ~~GES International offer~~extending into the second quarter of 2021, the COVID-19 pandemic had a ~~variety~~significant and negative impact on our operations and financial performance, with live events largely shut down and severe disruptions in tourism activity. In response to the COVID-19 pandemic, we implemented aggressive cost reduction measures in 2020 to preserve cash, including furloughs, layoffs, mandatory unpaid time off or salary reductions for all employees, and the reduction of ~~audio-visual~~discretionary spending. We also suspended future dividend payments and ~~digital services~~share repurchases, and we availed ourselves of governmental assistance programs for ~~Live Events~~wages and ~~corporate brand marketers. GES combines~~other expense relief.

In August 2020, we secured additional capital to strengthen our liquidity position by entering into an investment agreement with funds managed by private equity firm Crestview Partners who made an initial investment of $135 million, offset in part by $9.2 million in fees, in newly issued perpetual convertible preferred stock. Refer to Note 15 – Common and Preferred Stock of the ~~science~~Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of ~~innovative digital solutions~~this Form 10-Q) for further information. In August 2020, we also amended our Second Amended and Restated Credit Agreement (the “2018 Credit Agreement”) to provide financial flexibility, which, among other things waived our financial covenants until September 30, 2022. Refer to Note 12 – Debt and Finance Lease Obligations of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for further information.

During the first half of 2021, we continued to preserve cash and closely managed our costs. In connection with the ~~latest audio-visual technology~~acceleration of COVID-19 vaccination programs in certain of our geographic territories and ~~superior service~~as pandemic-related restrictions lessened, we began to ~~create award-winning attendee engagements. Services provided include digital design~~see early signs of recovery in the travel and ~~content, media production, content testing, equipment rental, staging,~~hospitality and ~~creative services.~~live event sectors as people started to feel more comfortable traveling and gathering in larger groups. Canada announced it will reopen its border with the United States in early August 2021 to fully vaccinated travelers and anticipates reopening its borders with other countries beginning in September 2021, which we are hopeful will accelerate bookings from long-haul travelers to our Pursuit operations in Canada. The live event markets began to open in 2021 with smaller scale live events taking place. Event organizers began to hold larger scale face-to-face live events in June 2021, and during the second quarter of 2021, we began to see early signs of acceleration in the recovery of in-person trade shows as states continue to reopen.

Effective July 30, 2021, we refinanced our current $450 million revolving credit facility (the “2018 Credit Facility”), which was scheduled to mature on October 24, 2023, with a new $500 million senior secured credit facility (the “2021 Credit Facility”) to provide for financial flexibility to support our growth initiatives. The 2021 Credit Facility provides for a $400 million term loan with a maturity date of July 30, 2028 (“Term Loan B”) and a $100 million revolving credit facility with a maturity date of July 30, 2026. The proceeds from the Term Loan B will be used to repay the 2018 Credit Facility, for future acquisitions and growth initiatives, and for general corporate purposes. Refer to Note 12 – Debt and Finance Lease Obligations and Note 24 – Subsequent Event of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for further information.

Seasonality

~~GES U.S. and GES International exhibition and~~GES’ live event activity can vary significantly from quarter to quarter and year to year depending on the frequency and timing of ~~shows, as some~~shows. Some shows are not held ~~each year~~annually and some ~~may~~ shift between quarters. Show rotation refers to shows that occur less frequently than annually, as well as annual shows that shift quarters from one year to the next. Live event activity was largely cancelled or postponed starting in mid-March 2020 and extending into the second quarter of 2021 due to the COVID-19 pandemic. The live event markets began to open in 2021 with smaller scale live events taking place. Event organizers began to hold larger scale face-to-face live events in June 2021, and during the second quarter of 2021, we began to see early signs of acceleration in the recovery of in-person trade shows as states continue to reopen.

~~Pursuit~~

Pursuit is a collection of iconic natural and cultural destination travel experiences that enjoy perennial demand. Pursuit offers guests distinctive and world renowned experiences through its collection of unique hotels, lodges, recreational attractions, and transportation services. Pursuit is composed of the following collections:

~~Brewster Travel Canada~~ is a leading travel and tourism provider in the Canadian Rockies in Alberta, Canada with two lodging properties in Banff National Park, one lodging property in Jasper National Park, five world-class recreational attractions, food and beverage services, retail operations, sightseeing and transportation services.

~~Alaska Collection~~ is a leading travel and tourism provider in Alaska with two lodging properties and a sightseeing excursion in Denali National Park and Preserve, a lodge in Talkeetna, Alaska’s top-rated wildlife and glacier cruise, and two lodging properties located near Kenai Fjords National Park. The Alaska Collection also provides food and beverage services and retail operations with respect to those properties.

~~Glacier Park, Inc.~~ is an operator of seven lodging properties, 12 retail shops, and 11 dining outlets in and around Glacier National Park in Montana, one of the most visited national parks in the United States, and Waterton Lakes National Park in Alberta, Canada, with a leading share of rooms in that market. Glacier Park, Inc. is an 80 percent owned subsidiary of Viad.

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

Pursuit is composed of four lines of business: (i) Hospitality (including food and beverage services and retail operations); (ii) Attractions (including food and beverage services and retail operations); (iii) Transportation; and (iv) Travel Planning. These four lines of business work together, driving economies of scope and meaningful scale in and around the iconic destinations of Banff, Jasper, and Waterton Lakes National Parks and Vancouver in Canada, and Glacier, Denali, and Kenai Fjords National Parks in the United States.

~~Seasonality~~

~~Pursuit experiences~~Pursuit’s peak activity occurs during the summer months. ~~During 2016, 90 percent~~We experienced lower visitation to Pursuit’s properties in 2020 due to the COVID-19 pandemic as travel restrictions and border closures largely remained in place.All of Pursuit’s ~~revenue was earned in~~properties were open during the second quarter of 2021, although there was lower visitation due in part to continued border closures in Canada, travel and ~~third quarters.~~capacity restrictions, and temporary government mandated closures at FlyOver Canada and reduced hours at FlyOver Iceland.

Results of Operations

Financial Highlights

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in thousands, except per share data)

2017

2016

Percentage
Change

2017

2016

Percentage
Change

Revenue

$
339,099

$
382,465

(11.3
)%

$
1,029,680

$
948,574

8.6
%
Net income attributable to Viad

$
44,657

$
33,792

32.2
%

$
79,381

$
46,318

71.4
%
Segment operating income ⁽¹⁾

$
48,139

$
59,435

(19.0
)%

$
101,333

$
87,591

15.7
%
Diluted income per common share from continuing operations attributable to Viad common stockholders

$
2.19

$
1.68

30.4
%

$
3.91

$
2.33

67.8
%

	Three Months Ended									Six Months Ended
	June 30,									June 30,
(in thousands, except per share data)	2021			2020			% Change			2021			2020			% Change
Total revenue ⁽¹⁾	$	61,233		$	30,067		**			$	90,168		$	324,725			(72.2	)%
Net loss attributable to Viad	$	(42,026	)	$	(206,278	)		79.6	%	$	(85,178	)	$	(292,863	)		70.9	%
Segment operating loss ⁽²⁾	$	(34,994	)	$	(49,752	)		29.7	%	$	(73,219	)	$	(59,168	)		(23.7	)%
Diluted loss per common share from continuing operations attributable to Viad common stockholders	$	(2.18	)	$	(10.17	)		78.6	%	$	(4.41	)	$	(14.44	)		69.5	%

~~Three months ended September 30, 2017 compared with the three months ended September 30, 2016~~

** Change is greater than +/- 100%

~~Total revenue~~ decreased $43.4 million or 11.3 percent, primarily due to negative show rotation of approximately $75 million at GES. This decrease was offset in part by underlying growth at both GES and Pursuit, incremental revenue from the acquisitions of the business of ON Event Services, LLC (“ON Services”), FlyOver Canada, and the Poken event engagement technology (“Poken”) of $13.1 million, and a favorable foreign exchange impact of $3.4 million. Management defines base same-show revenue as revenue derived from shows that the Company produced out of the same city during the same quarter in each year.

~~Net income attributable to Viad~~ increased $10.9 million, primarily due to impairment recoveries related to the Mount Royal Hotel fire and higher segment operating income from Pursuit, offset in part by decreased segment operating income at GES primarily due to negative show rotation.

⁽¹⁾

As previously disclosed in our 2020 Form 10-K, and subsequent to the issuance of the Condensed Consolidated Financial Statements for the quarter ended June 30, 2020, we identified prior period errors related to the recognition of revenue of GES’ third-party services. Revenue from these services should have been recorded on a net basis to reflect only the fees received for arranging these services, whereas previously, we recorded this revenue on a gross basis, thus overstating revenue and cost of services by the same amount. As a result, GES’ 2020 revenue has been corrected to reflect this immaterial gross-to-net adjustment. Refer to Note 1 – Overview and Basis of Presentation of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for additional information.

⁽²⁾

•

~~Total segment operating income~~⁽¹⁾~~decreased $11.3 million primarily due to the decrease in revenue.~~

~~Nine months ended September 30, 2017 compared with the nine months ended September 30, 2016~~

~~Total revenue~~ increased $81.1 million or 8.6 percent, primarily due to incremental revenue from the acquisitions of ON Services, FlyOver Canada, and Poken of $49.8 million and underlying growth at both GES and Pursuit. This increase was offset in part by an unfavorable foreign exchange impact of $10.6 million and negative show rotation of approximately $6 million.

~~Net income attributable to Viad~~ increased $33.1 million, primarily due to impairment recoveries related to the Mount Royal Hotel fire, increased segment operating income at Pursuit and GES, and a decrease in restructuring charges, offset in part by higher corporate activities expense due to an increase in performance-based compensation driven by the Company’s stock price appreciation, and higher interest expense.

•

~~Total segment operating income~~⁽¹⁾~~increased $13.7 million, primarily due to the increase in revenue.~~

⁽¹⁾	Refer to Note 19 23 – Segment Information of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for a reconciliation of the non-GAAP financial measure, segment operating ~~income,~~loss, to the most directly comparable GAAP measure.

Three months ended June 30, 2021 compared with the three months ended June 30, 2020

•

Total revenue increased $31.2 million during the three months ended June 30, 2021 primarily due to Pursuit resuming seasonal operations and experiencing increased visitation from domestic travelers in Glacier Park and the Alaska Collection. While Canada’s border remained closed during the second quarter of 2021 due to the impact of the COVID-19 pandemic, there continues to be strong regional and national demand from Canadians as they are required to stay closer to home. All of Pursuit’s properties were open during the second quarter of 2021, although there was lower visitation due in part to border closures, travel and capacity restrictions, and temporary government mandated closures at FlyOver Canada and reduced hours at FlyOver Iceland. GES experienced show postponements and cancellations starting in mid-March 2020 and live events remained largely shut down into the second quarter of 2021, although most states in the U.S. re-opened for live events.

•

Net loss attributable to Viad improved $164.3 million during the three months ended June 30, 2021 primarily reflecting impairment charges of $114.0 million recorded during the three months ended June 30, 2020, in addition to improved segment operating results in 2021.

•

Total segment operating loss improved $14.8 million during the three months ended June 30, 2021 primarily due to increased revenue at Pursuit, and a lower cost structure at GES.

Six months ended June 30, 2021 compared with the six months ended June 30, 2020

•

Total revenue decreased $234.6 million or 72.2% during the six months ended June 30, 2021 primarily due to the impact of the COVID-19 pandemic as GES experienced show postponements and cancellations starting in mid-March 2020. Live events remained largely shut down during the first half of 2021. All of Pursuit’s properties were open during the second quarter of 2021, although there was lower visitation due in part to border closures, travel and capacity restrictions, and temporary government mandated closures at FlyOver Canada and FlyOver Iceland.

•

Net loss attributable to Viad improved $207.7 million during the six months ended June 30, 2021, primarily reflecting that impairment charges of $202.4 million recorded during the six months ended June 30, 2020.

•

Total segment operating loss increased $14.1 million during the six months ended June 30, 2021, primarily due to lower revenue at GES as a result of the COVID-19 pandemic in addition to the elimination of performance-based incentives in 2020, offset in part by a $9.1 million gain on sale of a GES warehouse in Orlando in 2021.

Foreign Exchange Rate Variances

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

The following ~~tables summarize~~table summarizes the ~~effects of~~ foreign exchange rate ~~variances~~variance effects (or “FX Impact”) on revenue and segment operating ~~results (or “FX Impact”)~~loss from ~~Viad’s~~our significant international operations for the three ~~and nine~~ months ended ~~September~~June 30, ~~2017~~2021 and ~~2016, excluding~~2020:

	Revenue						Segment Operating Income (Loss)
	Weighted-Average Exchange Rates				FX Impact		Weighted-Average Exchange Rates				FX Impact
	2021		2020		(in thousands)		2021		2020		(in thousands)
GES:
Canada (CAD)	$	0.81	$	0.72	$	63	$	0.81	$	0.72	$	(133	)
United Kingdom (GBP)	$	1.40	$	1.24		320	$	1.40	$	1.24		(353	)
Europe (EUR)	$	1.20	$	1.10		32	$	1.20	$	1.10		48
					$	415					$	(438	)
Pursuit:
Canada (CAD)	$	0.81	$	0.73	$	1,209	$	0.82	$	0.72	$	(1,030	)
Iceland (ISK)	$	0.01	$	0.01		66	$	0.01	$	0.01		(109	)
					$	1,275					$	(1,139	)
Total					$	1,690					$	(1,577	)

The following table summarizes the ~~effect of acquisitions completed during 2017 and 2016:~~

~~Three months ended September 30, 2017 compared with the three months ended September 30, 2016~~

Revenue

Segment Operating Results

Weighted-Average
Exchange Rates

FX Impact

Weighted-Average
Exchange Rates

FX Impact

2017

2016

(in thousands)

2017

2016

(in thousands)

GES:

Canada (CAD)

$
0.80

$
0.77

$
680

$
0.80

$
0.77

$
44

United Kingdom (GBP)

$
1.32

$
1.31

235

$
1.31

$
1.32

115

Europe (EUR)

$
1.19

$
1.12

382

$
1.18

$
1.14

13

1,297

172

Pursuit

Canada (CAD)

$
0.80

$
0.77

2,119

$
0.80

$
0.77

1,218

$
3,416

$
1,390

~~Nine months ended September 30, 2017 compared with the nine months ended September 30, 2016~~

Revenue

Segment Operating Results

Weighted-Average
Exchange Rates

FX Impact

Weighted-Average
Exchange Rates

FX Impact

2017

2016

(in thousands)

2017

2016

(in thousands)

GES:

Canada (CAD)

$
0.76

$
0.76

$
(202
)

$
0.76

$
0.78

$
(221
)
United Kingdom (GBP)

$
1.28

$
1.38

(11,395
)

$
1.28

$
1.25

(210
)
Europe (EUR)

$
1.11

$
1.12

(100
)

$
1.12

$
1.13

(39
)

(11,697
)

(470
)
Pursuit

Canada (CAD)

$
0.78

$
0.77

1,134

$
0.78

$
0.77

762

$
(10,563
)

$
292

~~Viad’s three months ended September 30, 2017~~foreign exchange rate variance effects (or “FX Impact”) on revenue and segment operating ~~results~~loss from our significant international operations for the six months ended June 30, 2021 and 2020:

	Revenue						Segment Operating Income (Loss)
	Weighted-Average Exchange Rates				FX Impact		Weighted-Average Exchange Rates				FX Impact
	2021		2020		(in thousands)		2021		2020		(in thousands)
GES:
Canada (CAD)	$	0.80	$	0.73	$	117	$	0.80	$	0.73	$	(183	)
United Kingdom (GBP)	$	1.39	$	1.27		478	$	1.39	$	1.26		(533	)
Europe (EUR)	$	1.20	$	1.10		52	$	1.20	$	1.10		(23	)
					$	647					$	(739	)
Pursuit:
Canada (CAD)	$	0.80	$	0.75	$	1,750	$	0.80	$	0.73	$	(1,539	)
Iceland (ISK)	$	0.01	$	0.01		68	$	0.01	$	0.01		(142	)
					$	1,818					$	(1,681	)
Total					$	2,465					$	(2,420	)

Revenue and segment operating loss were primarily impacted by ~~the strengthening of the Canadian dollar relative to the U.S. dollar. Viad’s nine months ended September 30, 2017 revenue and segment operating results were primarily impacted by the weakening~~variances of the British pound, ~~and the strengthening of~~ the Canadian dollar, the Euro, and the Icelandic krona relative to the U.S. dollar. Future changes in ~~the~~ exchange rates may impact overall expected profitability and historical period-to-period comparisons when revenue and segment operating ~~results~~loss are translated into U.S. dollars.

Analysis of Revenue and Operating Results by Reportable Segment

GES

The following ~~tables provide~~table presents a comparison of GES’ reported revenue and segment operating ~~results~~loss to organic revenue⁽³⁾⁽¹⁾ and organic segment operating ~~results~~loss⁽³⁾⁽¹⁾ for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016 in order to better understand the underlying performance of the segment without the effects of acquisitions or FX Impact.~~2020:

Three Months Ended

Three Months Ended

September 30, 2017

September 30, 2016

Change

(in thousands)

As Reported

Acquisitions⁽¹⁾

FX Impact

Organic⁽³⁾

As Reported

Acquisitions⁽²⁾

Organic⁽³⁾

As Reported

Organic⁽³⁾

Revenue:

GES:

U.S.

$
184,761

$
19,063

$
—

$
165,698

$
232,484

$
10,354

$
222,130

(20.5
)%

(25.4
)%
International

54,040

152

1,297

52,591

60,926

—

60,926

(11.3
)%

(13.7
)%
Intersegment eliminations

(6,682
)

—

—

(6,682
)

(6,425
)

—

(6,425
)

(4.0
)%

(4.0
)%
Total GES

$
232,119

$
19,215

$
1,297

$
211,607

$
286,985

$
10,354

$
276,631

(19.1
)%

(23.5
)%
Segment operating income (loss) ⁽⁴⁾:

GES:

U.S.

$
(2,851
)

$
(1,080
)

$
—

$
(1,771
)

$
14,543

$
458

$
14,085

**

**

International

(2,870
)

(269
)

172

(2,773
)

644

—

644

**

**

Total GES

$
(5,721
)

$
(1,349
)

$
172

$
(4,544
)

$
15,187

$
458

$
14,729

**

**

	Three Months Ended											Three Months Ended
	June 30, 2021											June 30, 2020								Change vs. 2020
(in thousands)	As Reported			Acquisitions		FX Impact			Organic⁽²⁾			As Reported			Acquisitions		Organic⁽¹⁾			As Reported			Organic⁽²⁾
Total GES revenue⁽¹⁾	$	24,920		$	—	$	415		$	24,505		$	24,803		$	—	$	24,803			0.5	%		(1.2	)%
Total GES segment operating loss⁽³⁾	$	(26,897	)	$	—	$	(438	)	$	(26,459	)	$	(32,060	)	$	—	$	(32,060	)		16.1	%		17.5	%

Nine Months Ended

Nine Months Ended

September 30, 2017

September 30, 2016

Change

(in thousands)

As Reported

Acquisitions⁽¹⁾

FX Impact

Organic⁽³⁾

As Reported

Acquisitions⁽²⁾

Organic⁽³⁾

As Reported

Organic⁽³⁾

Revenue:

GES:

U.S.

$
684,003

$
56,544

$
—

$
627,459

$
636,299

$
15,398

$
620,901

7.5
%

1.1
%
International

203,222

738

(11,697
)

214,181

187,689

—

187,689

8.3
%

14.1
%
Intersegment eliminations

(17,126
)

—

—

(17,126
)

(15,439
)

—

(15,439
)

(10.9
)%

(10.9
)%
Total GES

$
870,099

$
57,282

$
(11,697
)

$
824,514

$
808,549

$
15,398

$
793,151

7.6
%

4.0
%
Segment operating income (loss)⁽⁴⁾:

GES:

U.S.

$
39,319

$
(913
)

$
—

$
40,232

$
37,907

$
543

$
37,364

3.7
%

7.7
%
International

8,491

(463
)

(470
)

9,424

4,951

—

4,951

71.5
%

90.3
%
Total GES

$
47,810

$
(1,376
)

$
(470
)

$
49,656

$
42,858

$
543

$
42,315

11.6
%

17.3
%

	Six Months Ended											Six Months Ended
	June 30, 2021											June 30, 2020								Change vs. 2020
(in thousands)	As Reported			Acquisitions		FX Impact			Organic⁽²⁾			As Reported			Acquisitions		Organic⁽²⁾			As Reported			Organic⁽²⁾
Total GES revenue⁽¹⁾	$	44,065		$	—	$	647		$	43,418		$	305,938		$	—	$	305,938			(85.6	)%		(85.8	)%
Total GES segment operating loss⁽³⁾	$	(46,801	)	$	—	$	(739	)	$	(46,062	)	$	(21,202	)	$	—	$	(21,202	)	**			**

** Change is greater than +/- ~~100 percent~~100%

⁽¹⁾

~~Acquisitions include ON Services (acquired August 2016)~~As previously disclosed in our 2020 Form 10-K, and subsequent to the issuance of the Condensed Consolidated Financial Statements for ~~GES U.S.~~the quarter ended June 30, 2020, we identified prior period errors related to the recognition of revenue of GES’ third-party services. Revenue from these services should have been recorded on a net basis to reflect only the fees received for arranging these services, whereas previously, we recorded this revenue on a gross basis, thus overstating revenue and ~~Poken (acquired March 2017)~~ cost of services by the same amount. As a result, GES’ 2020 revenue has been corrected to reflect this immaterial gross-to-net adjustment. Refer to Note 1 – Overview and Basis of Presentation of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for ~~GES International and GES U.S.~~additional information.

⁽²⁾	To maximize synergies, GES’ existing in-house audio-visual services team was merged into ON Services. Accordingly, the amounts for GES U.S. acquisitions include results from the existing in-house audio-visual services team.

⁽³⁾

Organic revenue and organic segment operating ~~results~~loss are non-GAAP financial measures that adjust for the impacts of exchange rate variances and acquisitions, if any, until such acquisitions are included in the entirety of both comparable periods presented. For more information about organic revenue and organic segment operating ~~results,~~loss, see the “Non-GAAP Measures” section of this MD&A.

⁽⁴⁾⁽³⁾

Refer to Note 19 23 – Segment Information of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for a reconciliation of the non-GAAP financial measure, segment operating ~~income (loss),~~loss, to the most directly comparable GAAP measure.

Three months ended ~~September~~June 30, ~~2017~~2021 compared with the three months ended ~~September~~June 30, ~~2016~~2020

GES ~~U.S.~~revenue remained relatively flat during the three months ended June 30, 2021 as compared to the prior year as live events remained largely shut down during the second quarter of 2021 as a result of the COVID-19 pandemic. Revenue earned during 2021 was primarily driven by virtual and hybrid events completed during the second quarter of 2021. Revenue earned during the second quarter of 2020 was primarily driven by compensation for work completed on cancelled shows and the conversion of convention centers into temporary hospitals in early April 2020. Organic revenue* decreased $0.3 million during the three months ended June 30, 2021.

GES ~~U.S. revenue~~ ~~decreased $47.7~~segment operating loss improved $5.2 million ~~or 20.5 percent,~~ primarily due to ~~negative show rotation of approximately $63~~the reduction in operating costs by reducing wages and discretionary costs. Organic segment operating loss* improved $5.6 million ~~and other non-recurring business in~~during the ~~comparable prior period, offset in part by incremental~~three months ended June 30, 2021.

Six months ended June 30, 2021 compared with the six months ended June 30, 2020

GES revenue ~~of $8.7~~decreased $261.9 million, ~~from the acquisitions of ON Services and Poken, new business wins, and U.S. base same-show revenue growth of 1.6 percent. U.S. base same-show revenue growth was lower~~primarily due to ~~one event with~~show postponements and cancellations as a ~~reduced scope of service as~~ result of ~~a venue change. Base same-shows represented 37.0 percent~~the COVID-19 pandemic. Live events remained largely shut down during the first half of GES’ U.S. organic revenue*2021. Revenue earned during 2021 was primarily driven by virtual and hybrid events completed during the first half of 2021. Revenue earned during 2020 was primarily driven by shows completed during the first quarter of 2020 before the onset of the pandemic, compensation for work completed on cancelled shows, and the conversion of convention centers into temporary hospitals in early April 2020. Organic revenue* decreased ~~$56.4~~$262.5 million ~~or 25.4 percent.~~during the six months ended June 30, 2021.

GES ~~U.S. operating results~~ ~~decreased $17.4 million to an~~segment operating loss ~~of $2.9 million. This decrease was~~increased $25.6 million during the six months ended June 30, 2021 primarily due to the decrease in revenue, ~~driven by negative show rotation,~~ offset in part by ~~lower performance-based compensation expense~~the reduction in operating costs by reducing wages and ~~income of $2.8 million from a contract settlement. Organic operating income* decreased $15.9 million.~~

~~GES International~~

~~GES International revenue~~ ~~decreased $6.9 million or 11.3 percent, primarily due to negative show rotation of approximately $12 million, offset in part by new business wins~~discretionary costs and a ~~favorable FX Impact~~$9.1 million gain on sale of ~~$1.3 million.~~a GES warehouse in Orlando in 2021. Organic ~~revenue* decreased $8.3~~segment operating loss* increased $24.9 million ~~or 13.7 percent.~~

~~GES International operating results~~ ~~decreased $3.5 million to an operating loss of $2.9 million. This decrease was primarily due to~~during the ~~decrease in revenue driven by negative show rotation. Organic operating income* decreased $3.4 million.~~

~~Nine~~six months ended ~~September~~June 30, ~~2017 compared with the nine months ended September 30, 2016~~

~~GES U.S.~~

~~GES U.S. revenue~~ increased $47.7 million or 7.5 percent, primarily due to incremental revenue of $41.1 million from the acquisitions of ON Services and Poken and U.S. base same-show revenue growth of 4.4 percent, offset in part by negative show rotation of approximately $7 million. Base same-shows represented 35.4 percent of GES’ U.S. organic revenue*. Organic revenue* increased $6.6 million or 1.1 percent.

~~GES U.S. operating income~~ increased $1.4 million or 3.7 percent, primarily due to higher revenue, offset in part by a $7.5 million increase in depreciation and amortization expense primarily due to the acquisition of ON Services. Organic operating income* increased $2.9 million or 7.7 percent.

~~GES International~~

~~GES International revenue~~ increased $15.5 million or 8.3 percent, primarily due to new business wins, offset in part by an unfavorable FX Impact of $11.7 million. GES International had positive show rotation of approximately $1.0 million. Organic revenue* increased $26.5 million or 14.1 percent.

~~GES International operating income~~ ~~increased $3.5 million or 71.5 percent, primarily due to higher revenue. Organic operating income* increased $4.5 million or 90.3 percent.~~2021.

* Refer to footnote ~~(3)~~(2) in the above ~~tables~~table for more information about the non-GAAP financial measures of organic revenue and organic segment operating ~~results.~~

~~2017 Outlook~~

Although GES has a diversified revenue base and long-term contracts for future shows, its revenue is affected by general economic and industry-specific conditions. The prospects for individual shows tend to be driven by the success of the industry related to those shows. In general, the exhibition and event industry is experiencing modest growth.

For the 2017 full year, management expects GES’ revenue to increase 6 percent to 7 percent versus 2016. The August 2016 acquisition of ON Services and the March 2017 acquisition of Poken are expected to provide incremental revenue of $43 million to $45 million and incremental Adjusted Segment EBITDA of $5 million to $7 million. Show rotation is expected to have a net negative impact on GES’ revenue of approximately $10 million compared to 2016. GES U.S. base same-show revenue is expected to increase at a mid-single digit rate. Management anticipates an unfavorable FX Impact on GES’ 2017 full year revenue and segment operating income of approximately $7 million and $0.2 million, respectively. The expected FX Impact reflects the assumption that the U.S. dollar to the British pound exchange rate will be $1.31 and the U.S. dollar to the Canadian dollar exchange rate will be $0.81 during the fourth quarter of 2017. For more information about Adjusted Segment EBITDA and segment operating income, see the “Non-GAAP Measures” section of this MD&A.

Management is executing a strategic growth plan to position GES as the preferred global, full-service provider for Live Events, with further reach to corporate events, consumer events, conferences, and exhibitions. In support of this strategy, the Company has acquired two leading audio-visual production businesses and four leading event technology businesses since 2014 that complement, enhance, and expand the current business and offer higher-margin growth opportunities. Management continues to pursue additional opportunities to acquire businesses with proven products and services to create the most comprehensive suite of services for the Live Events industry. During 2017, management intends to make selective investments in additional resources to capitalize on continued growth opportunities in under-penetrated categories of Live Events, such as corporate events and consumer events, and in cross-selling new services.

Additionally, management remains focused on improving the profitability of GES through continued efforts to more effectively manage labor costs by driving productivity gains through rigorous and strategic pre-show planning that reduces the ratio of labor costs to revenue. Improving this metric is a top priority of management and the Company continues to develop and enhance tools to support and systematize show site labor planning, measurement, and benchmarking.loss.

Pursuit

The following ~~tables provide~~table presents a comparison of Pursuit’s reported revenue and segment operating ~~results~~loss to organic revenue⁽²⁾⁽³⁾ and organic segment operating ~~results~~loss⁽²⁾⁽³⁾ for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016 in order to better understand the underlying performance of the segment without the effects of acquisitions or FX Impact.~~2020:

	Three Months Ended											Three Months Ended														Three Months Ended												Three Months Ended
	September 30, 2017											September 30, 2016								Change						June 30, 2021												June 30, 2020								Change vs. 2020
(in thousands)	As Reported			Acquisitions⁽¹⁾		FX Impact			Organic⁽²⁾			As Reported			Acquisitions		Organic⁽²⁾			As Reported			Organic⁽²⁾			As Reported			Acquisitions⁽²⁾			FX Impact			Organic⁽³⁾			As Reported			Acquisitions⁽²⁾		Organic⁽³⁾			As Reported			Organic⁽³⁾
Revenue:
Revenue⁽¹⁾:
Pursuit:
Attractions																										$	12,929		$	234		$	536		$	12,159		$	2,164		$	—	$	2,164		**			**
Hospitality	$	39,577		$	—	$	236		$	39,341		$	39,664		$	—	$	39,664			(0.2	)%		(0.8	)%		21,879			—			656			21,223			2,998			—		2,998		**			**
Attractions		59,059			4,227		1,700			53,132			42,883			—		42,883			37.7	%		23.9	%
Transportation		6,252			—		201			6,051			5,097			—		5,097			22.7	%		18.7	%		974			—			34			940			14			—		14		**			**
Travel Planning		2,874			—		29			2,845			10,908			—		10,908			(73.7	)%		(73.9	)%
Intra-Segment Eliminations & Other		(782	)		—		(47	)		(735	)		(1,150	)		—		(1,150	)		32.0	%		36.1	%
Travel planning and other																											588			—			50			538			2			—		2		**			**
Intra-segment eliminations																											(57	)		—			(1	)		(56	)		86			—		86		**			**
Total Pursuit	$	106,980		$	4,227	$	2,119		$	100,634		$	97,402		$	—	$	97,402			9.8	%		3.3	%	$	36,313		$	234		$	1,275		$	34,804		$	5,264		$	—	$	5,264		**			**

Segment operating income ⁽³⁾:
Segment operating loss ⁽⁴⁾:
Total Pursuit	$	53,860		$	2,227	$	1,218		$	50,415		$	44,248		$	—	$	44,248			21.7	%		13.9	%	$	(8,097	)	$	(258	)	$	(1,139	)	$	(6,700	)	$	(17,692	)	$	—	$	(17,692	)		54.2	%		62.1	%

	Six Months Ended												Six Months Ended
	June 30, 2021												June 30, 2020								Change vs. 2020
(in thousands)	As Reported			Acquisitions⁽²⁾			FX Impact			Organic⁽³⁾			As Reported			Acquisitions⁽²⁾		Organic⁽³⁾			As Reported			Organic⁽³⁾
Revenue⁽¹⁾:
Pursuit:
Attractions	$	15,185		$	234		$	663		$	14,288		$	7,442		$	—	$	7,442		**				92.0	%
Hospitality		28,820			—			1,049			27,771			8,979			—		8,979		**			**
Transportation		1,507			—			65			1,442			2,160			—		2,160			(30.2	)%		(33.2	)%
Travel planning and other		648			—			54			594			201			—		201		**			**
Intra-segment eliminations		(57	)		—			(13	)		(44	)		5			—		5		**			**
Total Pursuit	$	46,103		$	234		$	1,818		$	44,051		$	18,787		$	—	$	18,787		**			**

Segment operating loss⁽⁴⁾:
Total Pursuit	$	(26,418	)	$	(333	)	$	(1,681	)	$	(24,404	)	$	(37,966	)	$	—	$	(37,966	)		30.4	%		35.7	%

Nine Months Ended

Nine Months Ended

September 30, 2017

September 30, 2016

Change

(in thousands)

As Reported

Acquisitions⁽¹⁾

FX Impact

Organic⁽²⁾

As Reported

Acquisitions⁽¹⁾

Organic⁽²⁾

As Reported

Organic⁽²⁾

Revenue:

Pursuit:

Hospitality

$
55,279

$
13,440

$
145

$
41,694

$
56,791

$
12,935

$
43,856

(2.7
)%

(4.9
)%
Attractions

88,910

21,256

910

66,744

61,056

13,597

47,459

45.6
%

40.6
%
Transportation

11,906

—

120

11,786

10,150

—

10,150

17.3
%

16.1
%
Travel Planning

4,334

1,268

9

3,057

16,861

1,529

15,332

(74.3
)%

(80.1
)%
Intra-Segment Eliminations & Other

(848
)

—

(50
)

(798
)

(1,747
)

—

(1,747
)

51.5
%

54.3
%
Total Pursuit

$
159,581

$
35,964

$
1,134

$
122,483

$
143,111

$
28,061

$
115,050

11.5
%

6.5
%

Segment operating income ⁽³⁾:

Total Pursuit

$
53,523

$
8,431

$
762

$
44,330

$
44,733

$
8,870

$
35,863

19.6
%

23.6
%

** Change is greater than +/- 100%

⁽¹⁾⁽¹⁾

Revenue by line of business does not agree to Note 2 – Revenue and Related Contract Costs and Contract Liabilities in the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) as the amounts in the above table include product revenue from food and beverage and retail operations within each line of business.

⁽²⁾

Acquisitions ~~for~~include the ~~three months ended September 30, 2017 include FlyOver Canada (acquired December 2016). Acquisitions for the nine month periods include CATC Alaska Tourism Corporation (“CATC”)~~Golden Skybridge (acquired March ~~2016)~~2021 and ~~FlyOver Canada (acquired December 2016)~~opened June 2021).

⁽²⁾⁽³⁾

⁽³⁾⁽⁴⁾

Refer to Note 19 23 – Segment Information of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for a reconciliation of the non-GAAP financial measure, segment operating ~~income,~~loss, to the most directly comparable GAAP measure.

Three months ended ~~September~~June 30, ~~2017~~2021 compared with the three months ended ~~September~~June 30, ~~2016~~2020

Pursuit revenueincreased $31.0 million, as all of Pursuit’s attractions and properties were open during the second quarter of 2021, although at reduced capacities, whereas 2020 was negatively impacted by the COVID-19 pandemic as travel restrictions and border closures largely remained in place. Glacier Park and the Alaska Collection did not have any COVID-19 related closures during the second quarter of 2021 and experienced increased visitation from domestic travelers. The Canadian border remained closed during 2021 resulting in lower visitation in addition to temporary government mandated closures at FlyOver Canada, which opened on June 18, 2021. FlyOver Iceland was opened during the second quarter of 2021, but at reduced hours. Organic revenue* increased $29.5 million during the three months ended June 30, 2021.

Pursuit segment operating loss improved $9.6 million or 9.8 percent, due to strong growth from attractions, primarily the Banff Gondola and Columbia Icefield Glacier Adventure attractions, incremental revenue of $4.2 million from the acquisition of FlyOver Canada, and a favorable FX Impact of $2.1 million. This increase was offset in part by a reduction in travel planning as the Company completes the previously announced downsizing of Brewster Travel Canada’s package tours line of business and a revenue decline of $2.1 million due to the fire-related closure of the Mount Royal Hotel. Organic revenue* increased $3.2 million or 3.3 percent.

~~Pursuit operating income~~ ~~increased $9.6 million or 21.7 percent,~~54.2%, primarily due to the increase in revenue ~~from high-margin attractions. Operating income included a $1.1 million business interruption gain for~~in addition to the ~~recovery of lost profits from~~reduction in operating costs through efforts to maximize profitability in addition to wage subsidies granted by the ~~Mount Royal Hotel.~~Canadian government. Organic segment operating ~~income* increased $6.2 million or 13.9 percent.~~loss* improved $11.0 million.

~~Nine~~Six months ended ~~September~~June 30, ~~2017~~2021 compared with the ~~nine~~six months ended ~~September~~June 30, ~~2016~~2020

Pursuit revenue increased ~~$16.5~~$27.3 million, ~~or 11.5 percent,~~as all of Pursuit’s seasonal attractions and properties were open during the second half of 2021, although there was lower visitation due in part to strong growth from attractions primarily driven by the re-opening of the Banff Gondola (which was closed for renovations from October 2015 through April 2016), incremental revenue of $7.9 million from the acquisitions ofcapacity restrictions in addition to temporary government mandated closures at FlyOver Canada and ~~CATC, and a favorable FX Impact of $1.1 million. This increase was offset~~FlyOver Iceland. In 2020, Pursuit temporarily closed its properties in part by a reduction in travel planning as the Company completes the previously announced downsizing of Brewster Travel Canada’s package tours line of business and a revenue decline of $4.6 million due to the fire-related closuremid-March 2020 through most of the ~~Mount Royal Hotel.~~second quarter of 2020. Organic revenue* increased ~~$7.4~~$25.3 million during the six months ended June 30, 2021.

Pursuit segment operating loss improved $11.5 million or ~~6.5 percent.~~

~~Pursuit operating income~~ ~~increased $8.8 million or 19.6 percent,~~30.4%, primarily due to the increase in revenue ~~from high-margin attractions. Operating income included a $2.2 million business interruption gain for~~and by the ~~recovery of lost profits from~~reduction in operating costs through efforts to maximize profitability in addition to wage subsidies granted by the ~~Mount Royal Hotel.~~Canadian government. Organic segment operating ~~income* increased $8.5 million or 23.6 percent.~~loss* improved $13.6 million.

* Refer to footnote ~~(2)~~(3) in the above ~~tables~~table for more information about the non-GAAP financial measures of organic revenue and organic segment operating ~~results.~~loss.

Performance Measures

~~Management uses~~We use the following key business metrics to evaluate the performance of Pursuit’s ~~hospitality~~attractions business: ~~revenue per available room (“RevPAR”), average daily rate (“ADR”), and occupancy. These~~

•

Number of visitors. The number of visitors allows us to assess the volume of tickets sold at each attraction during the period.

•

Revenue per attraction visitor. Revenue per attraction visitor is calculated as total attractions revenue divided by the total number of visitors at all Pursuit attractions during the period. Total attractions revenue includes ticket sales and ancillary revenue generated by attractions, such as food and beverage and retail revenue. Total attractions revenue per visitor measures the total spend per visitor that attraction properties are able to capture, which is important to the profitability of the attractions business.

•

Effective ticket price. Effective ticket price is calculated as revenue from the sale of attraction tickets divided by the total number of visitors at all comparable Pursuit attractions during the period.

We use the following key business metrics, ~~are commonly used~~common in the hospitality industry, to ~~measure performance.~~evaluate Pursuit’s hospitality business:

~~Revenue per Available Room.~~ RevPAR is calculated as total rooms revenue divided by the total number of room nights available for all comparable Pursuit hospitality properties during the period. Total rooms revenue does not include non-rooms revenue, which consists of ancillary revenue generated by hospitality properties, such as food and beverage and retail revenue. RevPAR measures the period-over-period change in rooms revenue for comparable hospitality properties. RevPAR is affected by average daily rate and occupancy, which have different implications on profitability.

•

Revenue per Available Room. RevPAR is calculated as total rooms revenue divided by the total number of room nights available for all comparable Pursuit hospitality properties during the period. Total rooms revenue does not include non-rooms revenue, which consists of ancillary revenue generated by hospitality properties, such as food and beverage and retail revenue. RevPAR measures the period-over-period change in rooms revenue per available room for comparable hospitality properties. RevPAR is affected by average daily rate and occupancy, which have different implications on profitability.

~~Average Daily Rate.~~ ADR is calculated as total rooms revenue divided by the total number of room nights sold for all comparable Pursuit hospitality properties during the period. ADR is used to assess the pricing levels that the hospitality properties are able to generate. Increases in ADR at hospitality properties lead to increases in rooms revenue with no substantial effect on variable costs, therefore having a greater impact on margins than increases in occupancy.

•

Average Daily Rate. ADR is calculated as total rooms revenue divided by the total number of room nights sold for all comparable Pursuit hospitality properties during the period. ADR is used to assess the pricing levels that the hospitality properties are able to realize. Increases in ADR lead to increases in rooms revenue with no substantial effect on variable costs, therefore having a greater impact on margins than increases in occupancy.

~~Occupancy.~~ Occupancy is calculated as the total number of room nights sold divided by the total number of room nights available for all comparable Pursuit hospitality properties during the period. Occupancy measures the utilization of the available capacity at the hospitality properties. Increases in occupancy result in increases in rooms revenue and additional variable operating costs (including housekeeping services, utilities, and room amenity costs), as well as increased ancillary non-rooms revenue (including food and beverage and retail revenue).
•
Occupancy. Occupancy is calculated as the total number of room nights sold divided by the total number of room nights available for all comparable Pursuit hospitality properties during the period. Occupancy measures the utilization of the available capacity at the hospitality properties. Increases in occupancy result in increases in rooms revenue and additional variable operating costs (including housekeeping services, utilities, and room amenity costs), as well as increases in ancillary non-rooms revenue (including food and beverage and retail revenue).

Management evaluates the performance of Pursuit’s attractions business utilizing the number of passengers and total attractions revenue per passenger. The number of passengers allows management to assess the volume of visitor activity at each attraction during the period. Total attractions revenue per passenger is calculated as total attractions revenue divided by the total number of passengers at all Pursuit attractions during the period. Total attractions revenue includes ticket sales and ancillary revenue generated by attractions, such as food and beverage and retail revenue. Total attractions revenue per passenger measures the total spend per visitor that attraction properties are able to capture, which is important to the profitability of the attractions business.

The following table provides Pursuit’s same-store key performance ~~indicators for the three and nine months ended September 30, 2017 and 2016.~~indicators. The same-store metrics ~~below~~ indicate the performance of all ~~Pursuit~~Pursuit’s properties and attractions that ~~were~~we owned ~~by Viad~~ and ~~operating~~operated at full capacity, considering seasonal closures, for the entirety of both periods presented. For Pursuit properties and attractions located ~~in Canada,~~outside of the United States, comparisons to the prior year are on a constant U.S. dollar basis, using the current year quarterly average exchange rates for previous periods, to eliminate the FX Impact. ~~Management believes that~~We believe this same-store constant currency basis provides better comparability between reporting periods.

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

% Change

2017

2016

% Change

Same-Store Key Performance Indicators ⁽¹⁾

Hospitality:

Room nights available

108,015

107,635

0.4
%

152,366

150,604

1.2
%
RevPAR

$
200

$
192

4.2
%

$
140

$
133

5.3
%
ADR

$
227

$
213

6.6
%

$
187

$
178

5.1
%
Occupancy

87.9
%

90.1
%

(2.2
)%

75.2
%

74.8
%

0.4
%
Attractions:

Passengers

1,139,516

1,092,356

4.3
%

1,626,121

1,453,899

11.8
%
Revenue per passenger

$
48

$
40

20.0
%

$
42

$
33

27.3
%

	Three Months Ended									Six Months Ended
	June 30,									June 30,
	2021			2020			Change vs. 2020			2021			2020			Change vs. 2020
Same-Store Key Performance Indicators ⁽¹⁾
Attractions:
Number of visitors		154,089			57,163		**				211,575			220,917			(4.2	)%
Revenue per attraction visitor	$	63		$	41			53.7	%	$	57		$	35			62.9	%
Effective ticket price	$	48		$	29			65.5	%	$	42		$	26			61.5	%
Hospitality:
Room nights available ⁽²⁾		151,159			36,603		**				258,180			128,022		**
RevPAR ⁽²⁾	$	75		$	42			78.6	%	$	62		$	47			31.9	%
ADR	$	184		$	118			55.9	%	$	149		$	106			40.6	%
Occupancy ⁽²⁾		40.7	%		35.6	%		5.1	%		41.7	%		44.7	%		(3.0	)%

** Change is greater than +/- 100%

⁽¹⁾

The Same-Store Key Performance Indicators for ~~the three month comparison~~attractions exclude the FlyOver Canada attraction (acquired in December 2016) as it was not owned by Viad for the entirety of both periods presented. The Same-Store Key Performance Indicators for the nine month comparison exclude the CATC hospitality properties and attraction (acquired in March 2016)Open Top Touring (opened September 2020), Sky Lagoon (opened April 2021) and the FlyOver Canada attraction (acquired in December 2016), as they were not owned by Viad for the entirety of both periods presented. Additionally, the Same-Store Key Performance Indicators exclude the Mount Royal Hotel hospitality property due to its fire-related closure (effective December 2016)Golden Skybridge (opened June 2021). The Banff Gondola attraction was closed for renovations from October 2015 through April 2016. Accordingly, 2016 includes only five months of operation whereas 2017 includes the full three and nine months of operations.

⁽²⁾	The rooms that were out of service as a result of property closures due to the COVID-19 pandemic were excluded from room nights available when calculating hospitality RevPAR and occupancy.

~~Hospitality.~~ Room nights available increased during the nine months ended September 30, 2017 primarily due to changes in the opening dates for certain seasonal properties. RevPAR increased during the three months ended September 30, 2017 primarily due to an increase in ADR driven by management’s focus on yield management, offset in part by lower occupancy primarily due to forest fires in the Glacier National Park area. RevPAR increased during the nine months ended September 30, 2017 primarily due to an increase in occupancy and an increase in ADR driven by management’s focus on yield management, as well as an increase in occupancy reflecting strong park visitation during the first nine months of 2017.

Attractions. The increase in ~~the number of passengers~~same-store visitors during the ~~three months ended September 30, 2017~~second quarter of 2021 was primarily ~~due to management’s efforts to enhance~~driven by the ~~guest experience and its focus on yield management, combined with strong park visitation~~temporary closure of our attractions in ~~Canada.~~mid-March 2020, which remained closed through most of the second quarter of 2020 as a result of COVID-19. The ~~increase~~decrease in ~~the number of passengers~~same-store visitors during the ~~nine months ended September 30, 2017~~first half of 2021 was ~~primarily~~driven by lower visitation due to the ~~Banff Gondola being~~continued border closures and travel restrictions as a result of the COVID-19 pandemic in addition to the temporary government mandated closures at FlyOver Canada and FlyOver Iceland during 2021. FlyOver Canada re-opened on June 18, 2021 and FlyOver Iceland was either closed ~~for renovations~~or operated on a reduced schedule during the first four months of 2016. Excluding the Banff Gondola passengers, total same-store attraction passengers for the nine month period would have increased 36,158 in 2017 driven by management’s efforts to enhance the guest experience and its focus on yield management, combined with strong park visitation in Canada.

2021. Revenue per ~~passenger~~attraction increased ~~during 2017 primarily~~ due to higher effective ticket prices and ancillary revenue.

Hospitality. Room nights available increased as all of Pursuit’s properties were fully open during the second quarter of 2021, whereas in 2020, Pursuit temporarily closed its properties in mid-March 2020 through most of the second quarter of 2020. The increase in RevPAR and ADR was primarily driven by management’s focus on yield management, and higher revenue from ancillary food and beverage and retail services primarily resulting from management’s recent renovations of the retail and food and beverage operations at the Banff Gondola and the food and beverage operations at the Columbia Icefield Glacier Discovery Center.Pursuit’s properties being open in 2021.

~~During 2016,~~ Pursuit ~~derived approximately 59 percent of its revenue and 74 percent of its segment operating income from its Canadian operations, which are~~is largely dependent on foreign customer visitation. ~~Accordingly,~~Travel restrictions and border closures due to the COVID-19 pandemic have negatively affected long-haul travelers to Canada. Additionally, the strengthening or weakening of the Canadian dollar, relative to other currencies, could affect customer volumes and the results of operations. ~~Additionally, Pursuit~~

Other Expenses

	Three Months Ended									Six Months Ended
	June 30,									June 30,
(in thousands)	2021			2020			Change vs. 2020			2021			2020			Change vs. 2020
Corporate activities	$	3,006		$	2,468			21.8	%	$	5,011		$	3,257			53.9	%
Interest expense	$	5,587		$	5,186			7.7	%	$	10,705		$	9,204			16.3	%
Other expense, net	$	680		$	265		**			$	1,040		$	684			52.0	%
Restructuring charges	$	787		$	260		**			$	3,613		$	1,111		**
Impairment charges	$	—		$	114,020			(100.0	)%	$	—		$	202,400			(100.0	)%
Income tax expense (benefit)	$	(2,166	)	$	35,516		**			$	(5,211	)	$	19,719		**
Income (loss) from discontinued operations	$	(62	)	$	(379	)		83.6	%	$	286		$	(833	)	**

** Change is ~~affected by consumer discretionary spending on tourism activities.~~

~~2017 Outlook~~

For the 2017 full year, management expects Pursuit’s revenue to increase 12 percent to 14 percent. The December 2016 acquisition of FlyOver Canada and the March 2016 acquisition of CATC, combined, are expected to provide incremental revenue of $10 million to $11 million and incremental Adjusted Segment EBITDA of $2 million to $3.5 million, which includes an incremental first quarter seasonal operating loss of approximately $2.3 million from CATC.

Additionally, management expects Pursuit’s revenue to be negatively impacted by approximately $13 million as the Company completes the previously announced downsizing of Brewster Travel Canada’s package tours line of business. The fire-related closure of the Mount Royal Hotel is expected to negatively impact revenue by approximately $5 million. Management anticipates a favorable FX Impact on Pursuit’s 2017 full year revenue and segment operating income of approximately $2 million and $0.7 million, respectively. Management expects these factors will be moregreater than ~~offset by organic growth across the rest of Pursuit’s lines of business.~~

In July 2017, Viad resolved its property and business interruption insurance claims related to the Mount Royal Hotel fire for a total of $36.3 million, inclusive of $9.0 million received during the first and second quarters of 2017. Viad recorded an additional impairment recovery of approximately $24.7 million related to construction costs to re-open the hotel, $1.1 million was recorded as a business interruption gain for the recovery of lost profits, and the remaining $1.5 million was recorded as deferred income that will be recognized over the periods the business interruption losses are actually incurred. Management anticipates recognizing approximately $0.5 million of the business interruption recovery during the remainder of 2017 with approximately $1 million being deferred to the first half of 2018.

The Pursuit guidance ranges include approximately $1 million in revenue and approximately $3 million in adjusted segment EBITDA related to the Mount Royal Hotel, which reflects the 2017 portion of business interruption insurance recoveries (including both business interruption gains for lost profits and contra-expense for on-going operating costs) and the re-opening of most of the property’s retail tenants and one of its dining operations. The hotel itself is expected to remain closed until mid-2018. For more information about Adjusted Segment EBITDA and segment operating income, see the “Non-GAAP Measures” section of this MD&A.+/- 100%

Corporate Activities

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in thousands)

2017

2016

Percentage Change 2017 vs. 2016

2017

2016

Percentage Change 2017 vs. 2016

Corporate activities

$
4,474

$
2,772

61.4
%

$
10,092

$
7,390

36.6
%

– The increase in corporate activities expense ~~for~~during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 was primarily due to ~~an increase in~~lower performance-based compensation expense ~~driven by Viad’s common stock price appreciation.~~in 2020 as we reduced our estimated performance achievement to zero as a result of COVID-19.

Interest Expense

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in thousands)

2017

2016

Percentage Change 2017 vs. 2016

2017

2016

Percentage Change 2017 vs. 2016

Interest expense

$
2,117

$
1,489

42.2
%

$
6,281

$
4,109

52.9
%

– The increase in interest expense ~~for~~during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 was primarily due to higher debt balances in ~~2017 resulting from acquisitions completed during August and December of 2016.~~2021.

Restructuring Charges

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in thousands)

2017

2016

Percentage Change 2017 vs. 2016

2017

2016

Percentage Change 2017 vs. 2016

Restructuring charges

$
255

$
1,697

(85.0
)%

$
817

$
3,664

(77.7
)%

– Restructuring charges during the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 were primarily related to facility closures at GES. In response to the COVID-19 pandemic in 2020, we accelerated our transformation and ~~2016~~streamlining efforts at GES to significantly reduce costs and create a lower and more flexible cost structure focused on servicing our more profitable market segments. Restructuring charges during 2020 were primarily related to the elimination of certain positions at GES and our corporate office in response to the COVID-19 pandemic. In the fourth quarter of 2020, we entered into an agreement with a third-party to outsource the management, cleaning, and storage of the aisle carpeting we use at live events and consequently vacated a facility ~~consolidations in GES.~~during 2021.

Impairment Charges ~~(Recoveries)~~

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in thousands)

2017

2016

Percentage Change 2017 vs. 2016

2017

2016

Percentage Change 2017 vs. 2016
Impairment charges (recoveries)

$
(24,467
)

$
120

**

$
(29,098
)

$
120

**

** Change is greater than +/- 100 percent

~~On December 29, 2016,~~ – Due to the ~~Mount Royal Hotel was damaged by a fire and closed. During July 2017, the Company resolved its property and business interruption insurance claims~~deteriorating macroeconomic environment in 2020 related to the ~~fire for~~COVID-19 pandemic, resulting in disruptions to our operations and the decline in our stock price, we recorded non-cash goodwill impairment charges of $113.1 million and a ~~total~~fixed asset impairment charge of ~~$36.3 million. During~~$0.9 million during the three months ended ~~September~~June 30, ~~2017,~~2020. During the ~~Company received insurance proceeds of $27.3 million, of which $24.7 million was~~six months ended June 30, 2020, we recorded ~~as an impairment recovery (partially offset by~~non-cash goodwill impairment charges of ~~$0.2 million)~~$185.8 million, a non-cash impairment charge to intangible assets of $15.7 million related to ~~construction costs to re-open~~GES’ United States audio-visual production business, and a fixed asset impairment charge of $0.9 million.

Income Tax Benefit – The effective tax rate was 4.8% for the ~~hotel, $1.1 million~~three months ended June 30, 2021 and a negative 20.6% for the three months ended June 30, 2020. The effective tax rate was ~~recorded~~5.6% for the six months ended June 30, 2021 and a negative 7.1% for the six months ended June 30, 2020. The rate for 2021 was lower than the blended statutory rate primarily as a ~~business interruption gain for~~result of excluding the ~~recovery of lost profits,~~tax benefit on losses recognized in the United States, the United Kingdom and the remaining $1.5 million was recorded as deferred income, which will be recognized over the periods the business interruption losses are actually incurred. During the nine months ended September 30, 2017, the Company received $36.3 million in insurance proceeds, of which $2.2 million was allocated to an insurance receivable, $29.3 million was recorded as an impairment recovery (partially offset by impairment charges of $0.2 million) related to construction costs to re-open the hotel, $2.2 million was recorded asother European countries where we have a business interruption gain for the recovery of lost profits, $1.1 million was recorded as contra-expense to offset non-capitalizable costs incurred by the Company, and the remaining $1.5 million was recorded as deferred income, which will be recognized over the periods the business interruption losses are actually incurred.

~~Income Taxes~~

valuation allowance. The negative effective tax rates for the three and six months ended ~~September~~June 30, ~~2017 and 2016~~2020 were 30.4 percent and 33.8 percent, respectively. The effective tax rates for the nine months ended September 30, 2017 and 2016 were 29.0 percent and 33.1 percent, respectively. The decrease for the three months was primarily due to ~~higher foreign income taxed at lower rates. The decrease for~~ the ~~nine months was primarily due to higher foreign income taxed at lower rates, the release~~recording of a valuation allowance ~~related to foreign~~against our remaining United States, United Kingdom, and other European countries net ~~operating~~deferred tax assets of $25 million, as well as no tax benefits on non-deductible goodwill impairments and losses ~~and the adoption of new accounting guidance, effective~~recognized in ~~the first quarter of 2017, which requires the excess tax benefit on share-based compensation to be recorded to income tax expense rather than equity.~~those jurisdictions.

Income (Loss) from Discontinued Operations

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in thousands)

2017

2016

Percentage Change 2017 vs. 2016

2017

2016

Percentage Change 2017 vs. 2016

Loss from discontinued operations

$
(101
)

$
(221
)

54.3
%

$
(408
)

$
(771
)

47.1
%

~~The loss~~ – Loss from discontinued operations during the three months ended ~~September~~June 30, ~~2017,~~2021 was primarily ~~related~~due to legal expenses ~~associated with~~related to previously sold operations. ~~The loss~~Income from discontinued operations during the ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021 was primarily due to an insurance recovery related to ~~legal expenses associated with~~a previously sold ~~operations,~~operation, offset in part by ~~a reduction in an uncertain tax position~~legal expenses. Loss from discontinued operations during the three and six months ended June 30, 2020 was primarily due to ~~the lapse of a statute.~~legal expenses related to previously sold operations.

Liquidity and Capital Resources

Cash, ~~and~~ cash equivalents, and restricted cash were ~~$53.5~~$40.0 million as of ~~September~~June 30, ~~2017,~~2021, as compared to ~~$20.9~~$42.0 million as of December 31, ~~2016.~~2020. During the ~~nine~~six months ended ~~September~~June 30, ~~2017, the Company generated~~2021, we used net cash ~~flow~~ from operating activities of ~~$114.6~~$39.5 million.

On August 5, 2020, we entered into an investment agreement with funds managed by private equity firm Crestview Partners (the “Investment Agreement”) who made an initial investment of $135 million, ~~primarily~~offset in part by $9.2 million in fees, in newly issued perpetual convertible preferred stock that carries a 5.5% cumulative quarterly dividend, which is payable in cash or in-kind at Viad’s option (the “Convertible Preferred Stock”). The Convertible Preferred Stock is convertible into shares of our common stock at a conversion price of $21.25 per share. The proceeds from ~~results~~Crestview’s initial investment were used to repay a portion of ~~operations. Management believes~~our 2018 Credit Facility, providing us additional short-term liquidity to fund capital expenditures, and to support general corporate purposes. On August 5, 2020, we also entered into an amendment to our 2018 Credit Agreement, which, among other things, (i) waived our financial covenants until September 30, 2022 (the “Covenant Waiver Period”) and (ii) required us to maintain minimum liquidity of $100 million, with liquidity defined as unrestricted cash and available capacity on our 2018 Credit Facility.

Effective July 30, 2021, we refinanced the 2018 Credit Facility, which was scheduled to mature on October 24, 2023, with a new $500 million 2021 Credit Facility to provide for financial flexibility to support our growth initiatives. The 2021 Credit Facility provides for a $400 million Term Loan B with a maturity date of July 30, 2028 and a $100 million revolving credit facility with a maturity date of July 30, 2026. The proceeds from the Term Loan B will be used to repay the 2018 Credit Facility, to fund future acquisitions and growth initiatives, and for general corporate purposes.

We believe that ~~Viad’s~~our existing sources of liquidity will be sufficient to fund operations and capital commitments, including approximately $62 million in capital expenditures in select maintenance and growth investments, for at least the next 12 months.

As of ~~September~~June 30, ~~2017, the Company had~~2021, we held approximately ~~$49.0~~$29.4 million of ~~its~~our cash and cash equivalents ~~held~~ outside of the United States, consisting of ~~$31.9~~$15.4 million in Canada, ~~$7.8 million in the Netherlands, $7.0~~$5.6 million in the United Kingdom, ~~$1.2 million in Germany, $0.9~~$5.0 million in the ~~United Arab Emirates,~~Netherlands, and ~~$0.2~~$3.4 million in certain other countries. There are certain earnings related to the Company’s Canadian and Netherlands operations that have historically been deemed permanently reinvested. As of September 30, 2017, the incremental tax associated with these earnings if the cash balances were repatriated to the United States would approximate $1.6 million.

Cash Flows

Operating Activities

Nine Months Ended

September 30,

(in thousands)

2017

2016

Net income

$
80,128

$
47,083

Depreciation and amortization

42,499

31,206

Deferred income taxes

318

(3,549
)
Loss from discontinued operations

408

771

Impairment charges (recoveries)

(29,098
)

120

Other non-cash items

14,369

13,083

Changes in assets and liabilities

6,019

26,708

Net cash provided by operating activities

$
114,643

$
115,422

	Six Months Ended
	June 30,
(in thousands)	2021			2020
Net loss	$	(88,058	)	$	(296,551	)
Depreciation and amortization		26,510			29,135
Deferred income taxes		(4,253	)		19,514
(Income) loss from discontinued operations		(286	)		833
Restructuring charges		3,613			1,111
Impairment charges		—			202,400
Gains on dispositions of property and other assets		(9,360	)		(1,373	)
Share-based compensation expense (benefit)		4,216			(1,288	)
Multi-employer pension plan withdrawal		57			462
Other non-cash items, net		(33	)		11,470
Changes in assets and liabilities		28,045			3,122
Net cash used in operating activities	$	(39,549	)	$	(31,165	)

~~Net~~The increase in net cash ~~provided by~~used in operating activities ~~decreased $0.8~~of $8.4 million ~~primarily~~was due to ~~changes in working capital,~~losses at GES and Pursuit as a result of the COVID-19 pandemic, offset in part by ~~an increase~~a reduction in ~~results of operations.~~working capital needed to support lower business volumes and active working capital management.

Investing Activities

	Nine Months Ended						Six Months Ended
	September 30,						June 30,
(in thousands)	2017			2016			2021			2020
Capital expenditures	$	(39,493	)	$	(32,582	)	$	(24,763	)	$	(32,516	)
Proceeds from insurance		31,570			—
Cash paid for acquired businesses, net		(1,661	)		(145,735	)
Cash surrender value of life insurance policies								—			24,767
Cash paid for acquisitions, net								(7,606	)		—
Proceeds from dispositions of property and other assets		734			774			14,227			4,654
Net cash used in investing activities	$	(8,850	)	$	(177,543	)	$	(18,142	)	$	(3,095	)

~~Net~~The increase in net cash used in investing activities ~~decreased $168.7~~of $15.0 million was primarily due to ~~cash payments, net~~proceeds from the termination of ~~cash acquired, of $145.7 million for the 2016 acquisitions of ON Services, CATC, and the business of Maligne Lake Tours Ltd., and the Mount Royal Hotel fire-related~~our life insurance ~~proceeds received~~policies in ~~2017,~~2020, offset in part by ~~an increase~~proceeds from the sale of a GES warehouse in Orlando during 2021 and a decrease in capital expenditures.

Financing Activities

	Nine Months Ended						Six Months Ended
	September 30,						June 30,
(in thousands)	2017			2016			2021			2020
Proceeds from borrowings	$	60,574		$	153,000		$	65,608		$	192,111
Payments on debt and capital lease obligations		(128,808	)		(86,989	)
Payments on debt and finance lease obligations								(9,027	)		(56,078	)
Dividends paid on common stock		(6,119	)		(6,079	)		—			(4,064	)
Debt issuance costs		(5	)		(340	)
Distributions to noncontrolling interest, net of contributions from noncontrolling interest								(678	)		(1,526	)
Payments of debt issuance costs								(128	)		—
Payment of payroll taxes on stock-based compensation through shares withheld or repurchased								(601	)		(1,062	)
Common stock purchased for treasury		(1,272	)		(679	)		—			(2,785	)
Other		—			60
Net cash provided by (used in) financing activities	$	(75,630	)	$	58,973
Proceeds from exercise of stock options								—			2,077
Net cash provided by financing activities							$	55,174		$	128,673

~~Net~~The decrease in net cash ~~used in~~provided by financing activities ~~increased $134.6~~of $73.5 million was primarily due to net debt ~~payments~~proceeds of ~~$68.2~~$56.6 million during the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 compared to net debt proceeds of ~~$66.0~~$136.0 million during the ~~nine~~six months ended ~~September~~June 30, ~~2016.~~2020 under the 2018 Credit Facility, which was a proactive measure to increase our cash position and preserve financial flexibility upon the onset of the COVID-19 pandemic.

Debt and ~~Capital~~Finance Lease Obligations

Refer to Note 1112 – Debt and ~~Capital~~Finance Lease Obligations of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for further ~~discussion.~~discussion, all of which is incorporated by reference herein.

Share Repurchases

~~The~~Our Board of Directors previously authorized ~~the Company~~us to repurchase shares of ~~its~~our common stock from time to time at prevailing market prices. NoEffective February 7, 2019, our Board of Directors authorized the repurchase of an additional 500,000 shares. In March 2020, our Board of Directors suspended our share repurchase program for the foreseeable future. Prior to the suspension, we had repurchased 53,784 shares on the open market ~~repurchases were made~~for $2.8 million during the ~~nine~~three months ended ~~September 30, 2017 or 2016.~~March 31, 2020. As of ~~September~~June 30, ~~2017, 440,540~~2021, 546,283 shares remained available for repurchase. The ~~authorization of the~~ Board of ~~Directors~~Directors’ authorization does not have an expiration date. ~~In addition, during the nine months ended September 30, 2017 and 2016, the Company~~

Additionally, we repurchased ~~26,916~~ shares ~~for $1.3 million and 24,432 shares for $0.7 million, respectively,~~ related to tax withholding requirements on vested restricted share-based awards.

Critical Accounting Policies and Estimates

Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (Part II, Item 7) of ~~Viad’s Annual Report on~~our 2020 Form 10-K, for ~~the year ended December 31, 2016, for~~ a discussion of our critical accounting policies and estimates.

Impact of Recent Accounting Pronouncements

Refer to Note 1 – Overview and Basis of Presentation ~~and Principles of Consolidation~~ of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for further information.

~~Forward-Looking Statements~~

As provided by the safe harbor provision under the Private Securities Litigation Reform Act of 1995, Viad cautions readers that, in addition to historical information contained herein, this quarterly report includes certain information, assumptions, and discussions that may constitute forward-looking statements. These forward-looking statements are not historical facts, but reflect current estimates, projections, expectations, or trends concerning future growth, operating cash flows, availability of short-term borrowings, consumer demand, new or renewal business, investment policies, productivity improvements, ongoing cost reduction efforts, efficiency, competitiveness, legal expenses, tax rates and other tax matters, foreign exchange rates, and the realization of restructuring cost savings. Actual results could differ materially from those discussed in the forward-looking statements. Viad’s businesses can be affected by a host of risks and uncertainties. Among other things, natural disasters, gains and losses of customers, consumer demand patterns, labor relations, purchasing decisions related to customer demand for exhibition and event services, existing and new competition, industry alliances, consolidation and growth patterns within the industries in which Viad competes, acquisitions, capital allocations, adverse developments in liabilities associated with discontinued operations, changes in the levels of interest rates, and any deterioration in the economy, may individually or in combination impact future results. In addition to factors mentioned elsewhere, economic, competitive, governmental, technological, capital marketplace, and other factors, including terrorist activities or war, a pandemic health crisis, and international conditions, could affect the forward-looking statements in this quarterly report. Additional information concerning business and other risk factors that could cause actual results to materially differ from those in the forward looking statements are discussed in the “Risk Factors” section in Viad’s 2016 Annual Report.

Information about Viad obtained from sources other than the Company may be out-of-date or incorrect. Please rely only on Company press releases, SEC filings, and other information provided by the Company, keeping in mind that forward-looking statements speak only as of the date made. Viad undertakes no obligation to update any forward-looking statements, including prior forward-looking statements, to reflect events or circumstances arising after the date as of which the forward-looking statements were made.

Non-GAAP Measures

In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), we also disclose the ~~Company also discloses~~following non-GAAP financial ~~measures of Adjusted EBITDA,~~measures: Segment operating income ~~Adjusted Segment EBITDA,~~(loss), organic revenue, and organic segment operating income (loss) (collectively, the “Non-GAAP Measures”). ~~The presentation~~Our use of ~~the~~ Non-GAAP Measures is supplemental to, but not as a substitute for, other measures of financial performance reported in accordance with GAAP. As not all companies use identical calculations, ~~the~~our Non-GAAP Measures may not be comparable to similarly titled measures used by other companies. ~~Management believes~~We believe that ~~the presentation~~our use of ~~the~~ Non-GAAP Measures provides useful information to investors regarding ~~Viad’s~~our results of operations for trending, analyzing, and benchmarking ~~the~~our performance and the value of ~~Viad’s~~our business.

~~“Adjusted EBITDA”~~ is defined by Viad as net income attributable to Viad before the Company’s portion of interest expense, income taxes, depreciation and amortization, impairment charges and recoveries, changes in accounting principles, and the effects of discontinued operations. Adjusted EBITDA is utilized by management to measure the profit and performance of Viad’s operations and to facilitate period-to-period comparisons. Refer to the table below for a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure.

~~“Segment operating income”~~ is defined by Viad as net income attributable to Viad before income (loss) from discontinued operations, corporate activities, interest expense and interest income, income taxes, restructuring charges, impairment losses and recoveries, and the reduction for income attributable to noncontrolling interest. Segment operating income is utilized by management to measure the profit and performance of Viad’s operating segments to facilitate period-to-period comparisons.

~~“Adjusted Segment EBITDA”~~ is defined by Viad as segment operating income (as defined above) before non-cash depreciation and amortization and acquisition integration costs, if any. Adjusted Segment EBITDA is utilized by management to measure the profit and performance of Viad’s operating segments and acquisitions to facilitate period-to-period comparisons. For a discussion of how this metric is used in connection with 2017 full year acquisition performance expectations, refer to the “Forward-Looking Non-GAAP Financial Measures” section of this MD&A. Management believes that Adjusted Segment EBITDA for acquisitions enables investors to assess how effectively management is investing capital into major corporate development projects, both from a valuation and return perspective.

•

“Segment operating income (loss)” is net loss attributable to Viad before loss from discontinued operations, corporate activities, interest expense and interest income, income taxes, restructuring charges, impairment charges, and the reduction for income attributable to noncontrolling interest. Segment operating income (loss) is used to measure the profit and performance of our operating segments to facilitate period-to-period comparisons. Refer to Note 23 – Segment Information of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for a reconciliation of segment operating income (loss) to loss from continuing operations before income taxes.

•

~~“Organic~~“Organic revenue” and “organic segment operating ~~income”~~income (loss)” are ~~defined by Viad as~~ revenue and segment operating income (loss) (as defined above), respectively, without the impact of exchange rate variances and acquisitions, if any, until such acquisitions are included in the entirety of both comparable periods. The impact of exchange rate variances is calculated as the difference between current period activity translated at the current period’s exchange rates and the comparable prior period’s exchange rates. ~~Management believes that~~We believe the presentation of “organic” results permits investors to better understand ~~Viad’s~~our performance without the effects of exchange rate variances or acquisitions and to facilitate ~~period-to-~~

~~period~~period-to-period comparisons and analysis of ~~Viad’s~~our operating performance. Refer to the “Results of Operations” section of this MD&A for reconciliations of organic revenue and organic segment operating income (loss) to the most directly comparable GAAP measures.

~~The Non-GAAP~~We believe non-GAAP Measures are ~~considered~~ useful operating metrics as they eliminate potential variations arising from taxes, ~~depreciation and amortization,~~ debt service costs, impairment charges, and ~~recoveries, changes in accounting principles, and~~ the effects of discontinued operations, ~~are eliminated, thus~~ resulting in additional measures considered to be indicative of ~~Viad’s~~our ongoing operations and segment performance. Although ~~the~~we use Non-GAAP Measures ~~are used as financial measures~~ to assess the performance of ~~the~~our business, the use of these measures is limited because these measures do not consider material costs, expenses, and other items necessary to operate ~~the~~our business. These items include debt service costs, ~~non-cash depreciation and amortization expense associated with long-lived assets,~~ expenses related to U.S. federal, state, local and foreign income taxes, impairment charges, ~~or recoveries,~~ and the effects of ~~accounting changes and~~ discontinued operations. ~~Since~~As the Non-GAAP Measures do not consider ~~the above~~these items, ~~a user of Viad’s financial information~~you should consider net income attributable to Viad as an important measure of financial performance because it provides a more complete measure of ~~the Company’s~~our performance.

~~A reconciliation of net income attributable to Viad to Adjusted EBITDA is as follows:~~

Three Months Ended

Nine Months Ended

September 30,

September 30,

(in thousands)

2017

2016

2017

2016

Net income attributable to Viad

$
44,657

$
33,792

$
79,381

$
46,318

Depreciation and amortization

15,833

12,649

42,499

31,206

Interest expense

2,117

1,489

6,281

4,109

Income tax expense

20,010

17,878

32,929

23,652

Impairment charges (recoveries)

(24,467
)

120

(29,098
)

120

Loss from discontinued operations

101

221

408

771

Other noncontrolling interest

(739
)

(661
)

(697
)

(691
)
Adjusted EBITDA

$
57,512

$
65,488

$
131,703

$
105,485

The decrease in Adjusted EBITDA for the three months ended September 30, 2017 was primarily due to lower segment operating income at GES. The increase in Adjusted EBITDA for the nine months ended September 30, 2017 was primarily due to higher segment operating income at GES and Pursuit. Refer to the “Results of Operations” section of this MD&A for a discussion of fluctuations.

~~Forward-Looking Non-GAAP Financial Measures~~

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

Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~Viad’s~~Our market risk ~~exposures relate~~exposure relates to fluctuations in foreign exchange rates and interest ~~rates, and certain commodity prices.~~rates. Foreign exchange risk is the risk that fluctuating exchange rates will adversely affect ~~Viad’s~~our financial condition or results of operations. Interest rate risk is the risk that changing interest rates will adversely affect ~~the earnings of Viad. Commodity risk is the risk that changing prices will adversely affect~~our financial position or results of operations.

~~Viad conducts its~~Our foreign operations are primarily in Canada, the United Kingdom, Iceland, the Netherlands, ~~Germany,~~ and ~~to a lesser extent, in certain other countries.~~Germany. The functional currency of ~~Viad’s~~our foreign subsidiaries is their local currency. Accordingly, for purposes of consolidation, ~~Viad translates~~we translate the assets and liabilities of ~~its~~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 ~~Viad’s condensed consolidated balance sheets.~~the Condensed Consolidated Balance Sheets. As a result, significant fluctuations in foreign exchange rates relative to the U.S. dollar may result in material changes to ~~Viad’s~~our net equity position reported in ~~its condensed consolidated balance sheets. Viad does~~the Condensed Consolidated Balance Sheets. We do not currently hedge ~~its~~our equity risk

arising from the translation of foreign denominated assets and liabilities. ~~Viad had~~We recorded cumulative unrealized foreign currency translation losses ~~recorded~~ in stockholders’ equity of ~~$10.3 million and $29.1~~$9.0 million as of ~~September~~June 30, ~~2017~~2021 and $16.7 million as of December 31, ~~2016, respectively. During the three and nine months ended September 30, 2017,~~2020. We recorded unrealized foreign currency translation gains ~~of $9.1 million and $18.8 million, respectively, were recorded~~ in other comprehensive ~~income. During~~income of $7.7 million during the ~~three and nine~~six months ended ~~September~~June 30, ~~2016 an~~2021 and unrealized foreign currency translation ~~loss~~losses of ~~$3.8~~$18.4 million ~~and a gain of $0.7 million, respectively, were recorded in other comprehensive income.~~during the six months ended June 30, 2020.

For purposes of consolidation, revenue, expenses, gains, and losses related to ~~Viad’s~~our foreign operations are translated into U.S. dollars at the average foreign exchange rates for the period. As a result, ~~Viad’s~~our consolidated results of operations are exposed to fluctuations in foreign exchange rates as revenue and segment operating ~~results~~income (loss) of ~~its~~our foreign operations, when translated, may vary from period to period, even when the functional currency amounts have not changed. Such fluctuations may adversely impact overall expected profitability and historical period-to-period comparisons. ~~Viad does~~We do not currently hedge ~~its~~our net earnings exposure arising from the translation of ~~its~~our foreign revenue and segment operating ~~results.~~income (loss). Refer to ~~“Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion on the~~ “Foreign Exchange Rate ~~Variances.”~~Variances” section of MD&A included in this Form 10-Q.

~~Viad is~~We are exposed to foreign exchange transaction risk, as ~~its~~our foreign subsidiaries have certain revenue transactions denominated in currencies other than the functional currency of the respective subsidiary. From time to time, ~~Viad utilizes~~we utilize forward contracts to mitigate the impact on earnings related to these transactions due to fluctuations in foreign exchange rates. As of ~~September~~June 30, ~~2017, Viad~~2021 and December 31, 2020, we did not have any outstanding foreign currency forward ~~contracts outstanding.~~contracts.

~~Viad is~~We are exposed to short-term and long-term interest rate risk on certain of ~~its~~our debt obligations. ~~Viad~~

We do not currently ~~does not~~ use derivative financial instruments to hedge cash flows for such obligations.

Item 4. Controls and Procedures

~~Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer of Viad, the effectiveness of the design and operation of~~We have established disclosure controls and procedures ~~has been evaluated as of September 30, 2017, and, based on~~ that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective as of September 30, 2017. Disclosure controls and procedures are designed to ensure that information required to be disclosed in ~~the~~our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized, and reported within the time periods specified in ~~the SEC’s~~SEC rules and ~~forms. Disclosure controls~~forms, and ~~procedures include, without limitation, controls and procedures designed to ensure that~~such information ~~required to be disclosed in such reports~~ is accumulated and communicated to our management, including ~~the~~our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate to allow ~~for~~ timely decisions regarding required disclosure. Management, together with our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2021. Based on this evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of June 30, 2021.

There were no changes in ~~the Company’s~~our internal control over financial reporting during the three months ended ~~September~~June 30, ~~2017~~2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - ~~OTHE~~ROTHER INFORMATION

Item 1. Legal Proceedings

Refer to Note 1821 – Litigation, Claims, Contingencies, and Other of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for information regarding our legal ~~proceedings involving the Company.~~proceedings.

Item 1A. Risk Factors

~~There were no material changes~~In addition to other information set forth in this report, careful consideration should be given to the ~~risk~~ factors ~~disclosed~~discussed in ~~Viad’s Annual Report on~~Part I, Item 1A – Risk Factors and Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2020 Form 10-K, ~~for the year ended December 31, 2016,~~which could materially affect our business, financial condition, or ~~in our Form 10-Q for the quarter ended March 31, 2017.~~future results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table summarizes the total number of shares of ~~Viad’s~~our common stock that were repurchased during the three months ended ~~September~~June 30, ~~2017 by Viad~~2021 pursuant to publicly announced plans or programs, as well as ~~from~~certain previously owned shares of common stock that were surrendered by employees, former employees, and non-employee directors ~~surrendering previously owned Viad common stock (outstanding shares) to pay the taxes in connection with the vesting of restricted stock~~for tax withholding requirements on vested share-based awards.

ISSUER PURCHASES OF EQUITY SECURITIES

Period

Total Number of Shares Purchased

Average Price Paid
Per Share

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

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

July 1, 2017 - July 31, 2017

—

$
—

—

440,540

August 1, 2017 - August 31, 2017

1,120

$
52.80

—

440,540

September 1, 2017 - September 30, 2017

154

$
56.05

—

440,540

Total

1,274

$
53.19

—

440,540

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares That May Yet Be Purchased Under the Plans or Programs
April 1, 2021 - April 30, 2021		926	$	41.92		—		546,283
May 1, 2021 - May 31, 2021		493	$	41.07		—		546,283
June 1, 2021 - June 30, 2021		—	$	—		—		546,283
Total		1,419	$	41.62		—		546,283

~~The~~Pursuant to previously announced authorizations, our Board of Directors authorized ~~the Company~~us to repurchase shares of ~~its~~our common stock from time to time at prevailing market prices. No shares were repurchased on the open market during the three and nine months ended September 30, 2017. As of September 30, 2017, 440,540 shares remain available for repurchase. The authorization of theEffective February 7, 2019, our Board of Directors authorized the repurchase of an additional 500,000 shares. In March 2020, our Board of Directors suspended future dividend payments and our share repurchase program for the foreseeable future. The Board of Directors’ authorization does not have an expiration date.

~~Item 5.~~ ~~OTHER INFORMATION~~

~~Not applicable.~~ During the second quarter of 2021, certain previously owned shares of common stock were surrendered by employees, former employees, and non-employee directors for tax withholding requirements on vested share-based awards.

Item 6. E~~xhibits~~Exhibits

Incorporated by Reference

Exhibit

Number

Exhibit Description

Form

Period

Ending

Exhibit

Filing Date

~~4.1~~

31.1

~~Joinder~~Certification of Chief Executive Officer of Viad Corp pursuant to ~~Guaranty, dated August 31, 2017, by and among ON Services – AV Specialists, Inc. and BMO Harris Bank, N.A.~~Section 302 of the Sarbanes-Oxley Act of 2002, for the period ended June 30, 2021.

~~31.1~~

31.2

~~Exhibit of~~ Certification of Chief ~~Executive~~Financial Officer of Viad Corp pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, for the period ended June 30, 2021.

~~31.2~~

32.1

~~Exhibit~~Certifications of ~~Certification of~~Chief Executive Officer and Chief Financial Officer of Viad Corp pursuant to Section ~~302~~906 of the Sarbanes-Oxley Act of 2002, for the period ended June 30, 2021.

~~32.1~~

~~Additional Exhibit of Certification of Chief Executive Officer of Viad Corp pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~

~~32.2~~

~~Additional Exhibit of Certification of Chief Financial Officer of Viad Corp pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~

101.INS

***

Inline XBRL Instance Document

101.SCH

****

Inline XBRL Taxonomy Extension Schema ~~Document~~Document.

101.CAL

****

Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.LAB

****

Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE

****

Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF

****

Inline XBRL Taxonomy Extension Definition Linkbase ~~Document~~Document.

~~101.LAB~~

~~XBRL Taxonomy Extension Label Linkbase Document~~

~~101.PRE~~104

***

~~XBRL Taxonomy Extension Presentation Linkbase Document~~Cover Page Interactive Data File

*	Filed herewith.

**	Furnished herewith.

***	The Inline XBRL Instance Document and Cover Page Interactive Data File do not appear in the Interactive Data File because their XBRL tags are embedded within the Inline XBRL document.

****	Submitted electronically herewith.

SIGNATURES

Pursuant to the requirements ~~of Section 13 or 15(d)~~ of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	VIAD CORP
	(Registrant)

~~November~~August 6, ~~2017~~2021	By:	/s/ Leslie S. Striedel
(Date)		Leslie S. Striedel
		Chief Accounting Officer and Duly Authorized Officer
		~~(Chief Accounting Officer and Authorized Officer)~~

4045

	PUP Awards					Restricted Stock					Restricted Stock Units
	Shares			Weighted-Average Grant Date Fair Value		Shares			Weighted-Average Grant Date Fair Value		Shares			Weighted-Average Grant Date Fair Value
Balance at December 31, 2016		255,505		$	26.11		267,051		$	25.96		15,982		$	25.58
Granted		73,557		$	47.44		64,648		$	46.64		2,950		$	47.45
Vested		(76,082	)	$	23.66		(79,104	)	$	24.01		(6,182	)	$	25.05
Forfeited		(5,911	)	$	30.64		(9,807	)	$	33.84		—		$	—
Balance at September 30, 2017		247,069		$	33.10		242,788		$	31.79		12,750		$	30.90

(in thousands)
Purchase price paid as:
Cash			$	50,920
Cash acquired				(6	)
Purchase price, net of cash acquired				50,914

Fair value of net assets acquired:
Inventories	$	11
Prepaid expenses		37
Property and equipment		10,867
Intangible assets		6,028
Total assets acquired		16,943
Accrued liabilities		118
Total liabilities assumed		118
Total fair value of net assets acquired				16,825
Excess purchase price over fair value of net assets acquired (“goodwill”)			$	34,089

(in thousands)	GES U.S.		GES International		Pursuit		Total
Balance at December 31, 2016	$	148,277	$	34,460	$	71,285	$	254,022
Business acquisitions		—		1,060		—		1,060
Foreign currency translation adjustments		—		3,084		5,753		8,837
Balance at September 30, 2017	$	148,277	$	38,604	$	77,038	$	263,919

(in thousands)
Year ending December 31,
Remainder of 2017	$	2,812
2018		11,014
2019		9,946
2020		8,446
2021		7,450
Thereafter		25,544
Total	$	65,212

(in thousands)	Total Viad Stockholders’ Equity			Noncontrolling Interest		Total Stockholders’ Equity
Balance at December 31, 2016	$	357,355		$	13,283	$	370,638
Net income		79,381			747		80,128
Dividends on common stock ($0.30 per share)		(6,119	)		—		(6,119	)
Common stock purchased for treasury		(1,272	)		—		(1,272	)
Employee benefit plans		5,916			—		5,916
Unrealized foreign currency translation adjustment		18,820			—		18,820
Other changes to AOCI		327					327
Other		56			—		56
Balance at September 30, 2017	$	454,464		$	14,030	$	468,494

	Nine Months Ended September 30,						Affected Line Item in the Statement Where Net Income is Presented
(in thousands)	2017			2016
Unrealized gains on investments	$	(72	)	$	(67	)	Interest income
Tax effect		27			25		Income taxes
	$	(45	)	$	(42	)

Recognized net actuarial loss⁽¹⁾	$	596		$	538
Amortization of prior service credit⁽¹⁾		(323	)		(377	)
Tax effect		(89	)		(61	)	Income taxes
	$	184		$	100

	Revenue						Segment Operating Results
	Weighted-Average Exchange Rates				FX Impact		Weighted-Average Exchange Rates				FX Impact
	2017		2016		(in thousands)		2017		2016		(in thousands)
GES:
Canada (CAD)	$	0.80	$	0.77	$	680	$	0.80	$	0.77	$	44
United Kingdom (GBP)	$	1.32	$	1.31		235	$	1.31	$	1.32		115
Europe (EUR)	$	1.19	$	1.12		382	$	1.18	$	1.14		13
						1,297						172
Pursuit
Canada (CAD)	$	0.80	$	0.77		2,119	$	0.80	$	0.77		1,218
					$	3,416					$	1,390