Viad (VVI) 10-Q 2024 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2024

or

☐ 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)	(I.R.S. Employer Identification No.)
7000 East 1st Avenue Scottsdale, Arizona	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

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 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	☐

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 November 5, 2024, there were 21,201,906 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 30, 2024 and December 31, 2023	1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023	2
	Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2024 and 2023	3
	Condensed Consolidated Statements of Stockholders’ Equity and Mezzanine Equity for the Three Months Ended March 31, June 30, and September 30, 2024 and 2023	4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	40
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 5.	Other Information	42
Item 6.	Exhibits	43
SIGNATURES		44

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

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

VIAD CORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30,			December 31,
(in thousands, except share data)	2024			2023
Assets
Current assets
Cash and cash equivalents	$	64,552		$	52,704
Accounts receivable, net of allowances of $3,661 and $2,901, respectively		168,635			128,019
Inventories		11,246			10,153
Current contract costs		28,909			20,202
Prepaid insurance		6,303			2,925
Other current assets		29,944			21,774
Total current assets		309,589			235,777
Property and equipment, net		588,864			592,891
Other investments and assets		20,352			17,047
Operating lease right-of-use assets		100,404			109,774
Deferred income taxes		2,304			1,930
Goodwill		121,905			123,906
Other intangible assets, net		52,410			55,997
Total Assets	$	1,195,828		$	1,137,322
Liabilities, Mezzanine Equity, and Stockholders’ Equity
Current liabilities
Accounts payable	$	120,355		$	77,405
Contract liabilities		67,721			52,980
Accrued compensation		40,249			31,309
Operating lease obligations		17,807			17,334
Other current liabilities		53,213			42,397
Current portion of debt and finance obligations		8,314			8,371
Total current liabilities		307,659			229,796
Long-term debt and finance obligations		381,887			444,304
Pension and postretirement benefits		15,859			16,457
Long-term operating lease obligations		96,502			106,109
Other deferred items and liabilities		67,265			70,711
Total liabilities		869,172			867,377
Commitments and contingencies
Convertible Series A Preferred Stock, $0.01 par value, 180,000 shares authorized,   135,000 shares issued and outstanding		132,591			132,591
Redeemable noncontrolling interest		4,382			4,733
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
Additional capital		572,219			568,230
Accumulated deficit		(280,017	)		(326,084	)
Accumulated other comprehensive loss		(46,551	)		(40,394	)
Common stock in treasury, at cost, 3,745,837 and 3,948,316 shares, respectively		(186,288	)		(195,721	)
Total Viad stockholders’ equity		96,765			43,433
Non-redeemable noncontrolling interest		92,918			89,188
Total stockholders’ equity		189,683			132,621
Total Liabilities, Mezzanine Equity, and Stockholders’ Equity	$	1,195,828		$	1,137,322

Refer to Notes to Condensed Consolidated Financial Statements.

1

VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in thousands, except per share data)	2024			2023			2024			2023
Revenue:
Services	$	375,236		$	285,119		$	912,126		$	765,598
Products		80,468			80,780			195,613			181,403
Total revenue		455,704			365,899			1,107,739			947,001
Costs and expenses:
Costs of services		298,081			222,794			798,666			681,409
Costs of products		65,075			67,063			171,529			161,602
Corporate activities		7,757			3,579			17,612			10,255
Gain on sale of ON Services		—			—			—			204
Interest expense, net		11,428			12,476			35,858			37,081
Other expense, net		407			554			1,287			1,533
Restructuring charges (recoveries)		383			480			(326	)		1,125
Impairment charges		6,110			—			6,110			—
Total costs and expenses		389,241			306,946			1,030,736			893,209
Income from continuing operations before income taxes		66,463			58,953			77,003			53,792
Income tax expense		10,509			9,173			17,247			13,623
Income from continuing operations		55,954			49,780			59,756			40,169
Income (loss) from discontinued operations		(90	)		(654	)		743			(855	)
Net income		55,864			49,126			60,499			39,314
Net income attributable to non-redeemable noncontrolling    interest		(7,178	)		(7,716	)		(8,062	)		(8,221	)
Net (income) loss attributable to redeemable noncontrolling interest		(71	)		(139	)		372			270
Net income attributable to Viad	$	48,615		$	41,271		$	52,809		$	31,363
Diluted income per common share:
Continuing operations attributable to Viad common stockholders	$	1.65		$	1.44		$	1.64		$	0.96
Discontinued operations attributable to Viad common stockholders		—			(0.03	)		0.03			(0.04	)
Net income attributable to Viad common stockholders	$	1.65		$	1.41		$	1.67		$	0.92
Weighted-average outstanding and potentially dilutive common    shares		21,615			21,174			21,517			21,025
Basic income per common share:
Continuing operations attributable to Viad common stockholders	$	1.68		$	1.46		$	1.65		$	0.97
Discontinued operations attributable to Viad common stockholders		—			(0.03	)		0.04			(0.04	)
Net income attributable to Viad common stockholders	$	1.68		$	1.43		$	1.69		$	0.93
Weighted-average outstanding common shares		21,166			20,885			21,107			20,825
Amounts attributable to Viad
Income from continuing operations	$	48,705		$	41,925		$	52,066		$	32,218
Income (loss) from discontinued operations		(90	)		(654	)		743			(855	)
Net income attributable to Viad	$	48,615		$	41,271		$	52,809		$	31,363

Refer to Notes to Condensed Consolidated Financial Statements.

2

VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in thousands)	2024			2023			2024			2023
Net income	$	55,864		$	49,126		$	60,499		$	39,314
Other comprehensive income (loss):
Unrealized foreign currency translation adjustments		4,314			(7,840	)		(6,567	)		110
Change in fair value of interest rate cap		(157	)		(122	)		277			316
Change in net actuarial loss, net of tax (1)		(50	)		60			106			48
Change in prior service cost, net of tax (1)		9			17			27			56
Comprehensive income		59,980			41,241			54,342			39,844
Non-redeemable noncontrolling interest:
Comprehensive income attributable to non-redeemable noncontrolling interest		(7,178	)		(7,716	)		(8,062	)		(8,221	)
Unrealized foreign currency translation adjustments		971			(1,513	)		(1,181	)		287
Redeemable noncontrolling interest:
Comprehensive (income) loss attributable to redeemable noncontrolling interest		(71	)		(139	)		372			270
Comprehensive income attributable to Viad	$	53,702		$	31,873		$	45,471		$	32,180

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

Refer to Notes to Condensed Consolidated Financial Statements.

3

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, 2023	$	37,402	$	568,230		$	(326,084	)	$	(40,394	)	$	(195,721	)	$	43,433		$	89,188		$	132,621		$	4,733		$	132,591
Net loss		—		—			(25,117	)		—			—			(25,117	)		(923	)		(26,040	)		(203	)		—
Dividends on convertible preferred stock		—		—			(1,950	)		—			—			(1,950	)		—			(1,950	)		—			—
Capital contributions from noncontrolling interest		—		—			—			—			—			—			149			149			—			—
Change in fair value of interest rate cap		—		—			—			218			—			218			—			218			—			—
Employee benefit plans		—		(5,387	)		—			—			5,358			(29	)		—			(29	)		—			—
Share-based compensation - equity awards		—		3,107			—			—			—			3,107			—			3,107			—			—
Unrealized foreign currency translation adjustment		—		—			—			(7,502	)		—			(7,502	)		(1,570	)		(9,072	)		(107	)		—
Amortization of net actuarial loss, net of tax		—		—			—			85			—			85			—			85			—			—
Amortization of prior service cost, net of tax		—		—			—			19			—			19			—			19			—			—
Other, net		—		(17	)		—			—			—			(17	)		—			(17	)		—			—
Balance, March 31, 2024	$	37,402	$	565,933		$	(353,151	)	$	(47,574	)	$	(190,363	)	$	12,247		$	86,844		$	99,091		$	4,423		$	132,591
Net income (loss)		—		—			29,311			—			—			29,311			1,807			31,118			(240	)		—
Dividends on convertible preferred stock		—		—			(1,950	)		—			—			(1,950	)		—			(1,950	)		—			—
Distributions to noncontrolling interest		—		—			—			—			—			—			(3,300	)		(3,300	)		—			—
Change in fair value of interest rate cap		—		—			—			216			—			216			—			216			—			—
Employee benefit plans		—		(515	)		—			—			1,737			1,222			—			1,222			—			—
Share-based compensation - equity awards		—		3,679			—			—			—			3,679			—			3,679			—			—
Unrealized foreign currency translation adjustment		—		—			—			(3,379	)		—			(3,379	)		(582	)		(3,961	)		16			—
Amortization of net actuarial loss, net of tax		—		—			—			71			—			71			—			71			—			—
Amortization of prior service cost, net of tax		—		—			—			(1	)		—			(1	)		—			(1	)		—			—
Other, net		—		684			(893	)		—			—			(209	)		—			(209	)		—			—
Balance, June 30, 2024	$	37,402	$	569,781		$	(326,683	)	$	(50,667	)	$	(188,626	)	$	41,207		$	84,769		$	125,976		$	4,199		$	132,591
Net income		—		—			48,615			—			—			48,615			7,178			55,793			71			—
Dividends on convertible preferred stock		—		—			(1,950	)		—			—			(1,950	)		—			(1,950	)		—			—
Change in fair value of interest rate cap		—		—			—			(157	)		—			(157	)		—			(157	)		—			—
Employee benefit plans		—		(1,227	)		—			—			2,338			1,111			—			1,111			—			—
Share-based compensation - equity awards		—		3,713			—			—			—			3,713			—			3,713			—			—
Unrealized foreign currency translation adjustment		—		—			—			4,314			—			4,314			971			5,285			112			—
Amortization of net actuarial loss, net of tax		—		—			—			(50	)		—			(50	)		—			(50	)		—			—
Amortization of prior service cost, net of tax		—		—			—			9			—			9			—			9			—			—
Other, net		—		(48	)		1			—			—			(47	)		—			(47	)		—			—
Balance, September 30, 2024	$	37,402	$	572,219		$	(280,017	)	$	(46,551	)	$	(186,288	)	$	96,765		$	92,918		$	189,683		$	4,382		$	132,591

Refer to Notes to Condensed Consolidated Financial Statements.

4

VIAD CORP

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

(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, 2022	$	37,402	$	570,271		$	(334,301	)	$	(47,185	)	$	(211,657	)	$	14,530		$	82,310		$	96,840		$	4,956		$	132,591
Net loss		—		—			(20,869	)		—			—			(20,869	)		(398	)		(21,267	)		(123	)		—
Dividends on convertible preferred stock		—		—			(1,950	)		—			—			(1,950	)		—			(1,950	)		—			—
Change in fair value of interest rate cap		—		—			—			(800	)		—			(800	)		—			(800	)		—			—
Payment of payroll taxes on stock-based compensation through shares withheld		—		—			—			—			(204	)		(204	)		—			(204	)		—			—
Employee benefit plans		—		(4,677	)		—			—			5,468			791			—			791			—			—
Share-based compensation - equity awards		—		3,064			—			—			—			3,064			—			3,064			—			—
Unrealized foreign currency translation adjustment		—		—			—			1,195			—			1,195			565			1,760			142			—
Amortization of net actuarial loss, net of tax		—		—			—			(45	)		—			(45	)		—			(45	)		—			—
Amortization of prior service cost, net of tax		—		—			—			35						35						35
Other, net		—		3			—			—			2			5			—			5			—			—
Balance, March 31, 2023	$	37,402	$	568,661		$	(357,120	)	$	(46,800	)	$	(206,391	)	$	(4,248	)	$	82,477		$	78,229		$	4,975		$	132,591
Net income (loss)		—		—			10,961			—			—			10,961			903			11,864			(286	)		—
Dividends on convertible preferred stock		—		—			(1,950	)		—			—			(1,950	)		—			(1,950	)		—			—
Capital distributions to noncontrolling interest		—		—			—			—			—			—			(1,126	)		(1,126	)		—			—
Change in fair value of interest rate cap		—		—			—			1,238			—			1,238			—			1,238			—			—
Payment of payroll taxes on stock-based compensation through shares withheld		—		—			—			—			(4	)		(4	)		—			(4	)		—			—
Employee benefit plans		—		(1,773	)		—			—			2,628			855			—			855			—			—
Share-based compensation - equity awards		—		2,830			—			—			—			2,830			—			2,830			—			—
Unrealized foreign currency translation adjustment		—		—			—			6,755			—			6,755			1,235			7,990			38			—
Amortization of net actuarial loss, net of tax		—		—			—			33			—			33			—			33			—			—
Amortization of prior service cost, net of tax		—		—			—			4			—			4			—			4			—			—
Other, net		—		15			—			—			(2	)		13			—			13			—			—
Balance, June 30, 2023	$	37,402	$	569,733		$	(348,109	)	$	(38,770	)	$	(203,769	)	$	16,487		$	83,489		$	99,976		$	4,727		$	132,591
Net income		—		—			41,271			—			—			41,271			7,716			48,987			139			—
Dividends on convertible preferred stock		—		—			(1,950	)		—			—			(1,950	)		—			(1,950	)		—			—
Change in fair value of interest rate cap		—		—			—			(122	)		—			(122	)		—			(122	)		—			—
Employee benefit plans		—		(966	)		—			—			2,058			1,092			—			1,092			—			—
Share-based compensation - equity awards		—		2,722			—			—			—			2,722			—			2,722			—			—
Unrealized foreign currency translation adjustment		—		—			—			(7,840	)		—			(7,840	)		(1,513	)		(9,353	)		(58	)		—
Amortization of net actuarial loss, net of tax		—		—			—			60			—			60			—			60			—			—
Amortization of prior service cost, net of tax		—		—			—			17			—			17			—			17			—			—
Other, net		—		12			1			—			—			13			—			13			—			—
Balance, September 30, 2023	$	37,402	$	571,501		$	(308,787	)	$	(46,655	)	$	(201,711	)		51,750		$	89,692			141,442		$	4,808		$	132,591

Refer to Notes to Condensed Consolidated Financial Statements.

5

VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended
	September 30,
(in thousands)	2024			2023
Cash flows from operating activities
Net income	$	60,499		$	39,314
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		42,961			37,707
Deferred income taxes		17,331			(923	)
(Income) loss from discontinued operations		(743	)		855
Restructuring (recoveries) charges		(326	)		1,125
Impairment charges		6,110			—
Gains on dispositions of property and other assets		(102	)		(99	)
Share-based compensation expense		10,500			8,647
Other non-cash items, net		5,347			4,423
Change in operating assets and liabilities:
Receivables		(39,967	)		(12,528	)
Inventories		(1,169	)		130
Current contract costs		(8,177	)		(19,849	)
Accounts payable		46,620			9,904
Restructuring liabilities		(934	)		(1,001	)
Accrued compensation		7,509			2,126
Contract liabilities		14,172			38,425
Income taxes payable		854			1,285
Other assets and liabilities, net		(27,389	)		7,013
Net cash provided by operating activities		133,096			116,554
Cash flows from investing activities
Capital expenditures		(52,787	)		(54,739	)
Proceeds from insurance		3,823			—
Cash paid for acquisitions, net		—			(41	)
Proceeds from the sale of ON Services		—			1,168
Proceeds from dispositions of property and other assets		121			108
Net cash used in investing activities		(48,843	)		(53,504	)
Cash flows from financing activities
Proceeds from borrowings		374,282			49,044
Payments on debt and finance obligations		(439,163	)		(54,235	)
Dividends paid on preferred stock		(5,850	)		(5,850	)
Distributions to noncontrolling interest, net of contributions from noncontrolling interest		(3,151	)		(1,126	)
Payments of debt issuance costs		(773	)		(226	)
Payment of payroll taxes on stock-based compensation through shares withheld or repurchased		(1,133	)		(508	)
Other financing activities		(201	)		—
Net cash used in financing activities		(75,989	)		(12,901	)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		279			(348	)
Net change in cash, cash equivalents, and restricted cash		8,543			49,801
Cash, cash equivalents, and restricted cash, beginning of year		59,029			64,564
Cash, cash equivalents, and restricted cash, end of period	$	67,572		$	114,365

Refer to Notes to Condensed Consolidated Financial Statements.

6

VIAD CORP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Overview and Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements 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 United States Securities and Exchange Commission (“SEC”) rules and regulations for complete financial statements. 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 our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 1, 2024 (“2023 Form 10-K”).

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

Nature of Business

We are a leading provider of extraordinary experiences, including hospitality and leisure activities, experiential marketing, and live events.

We operate through three reportable segments: Pursuit, Spiro, and GES Exhibitions. Spiro and GES Exhibitions are both live event businesses and are referred to collectively as “GES.”

Pursuit

Pursuit is a collection of inspiring and unforgettable travel experiences that includes recreational attractions, hotels and lodges, food and beverage, retail, sightseeing, and ground transportation services. Pursuit comprises the Banff Jasper Collection, the Alaska Collection, the Glacier Park Collection, FlyOver, and Sky Lagoon.

Spiro

Spiro is an experiential marketing agency that partners with leading brands around the world to manage and elevate their global experiential marketing activities.

GES Exhibitions

GES Exhibitions is a global exhibition services company that partners with leading exhibition and conference organizers as a full-service provider of strategic and logistics solutions to manage the complexity of their shows.

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
Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures	Amendment expands the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid.	1/1/2025	This new guidance will expand our footnote disclosures within the scope of this new standard with no impacts to our consolidated financial statements.

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Standard	Description	Date of adoption	Effect on the financial statements
Standards Recently Adopted
ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures	Amendment expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses.	1/1/2024	This new guidance will expand our footnote disclosures within the scope of this new standard with no impacts to our consolidated financial statements. The required disclosures are effective for annual periods beginning January 1, 2024, and for interim periods beginning January 1, 2025.

Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with United States 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; allowance 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. These estimates and assumptions may change as a result of the impact of global economic conditions, global inflationary pressures, and volatility in foreign exchange rates. 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. Restricted cash represents collateral required for surety bonds, bank guarantees, letters of credit, and corporate credit cards.

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

	September 30,		December 31,
(in thousands)	2024		2023
Cash and cash equivalents	$	64,552	$	52,704
Restricted cash included in other current assets		3,020		6,325
Cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	67,572	$	59,029

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.

Pursuit’s service revenue is derived through its admissions, accommodations, and transportation services. Product revenue is derived through food and beverage and retail sales. 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, and product revenue is recognized at a point in time.

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, environments, and graphics and is recognized at a point in time upon delivery of the product.

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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 56.4% 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 income (loss) per common share. Refer to Note 22 – Noncontrolling Interests – 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. Dividends paid-in-kind increase the redemption value of the preferred stock. 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 Condensed Consolidated Balance Sheets 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 for our GES business. These facility leases have lease terms ranging up to 34 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 Pursuit 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 is adjusted 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 incremental borrowing 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.

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 contingency gain. A contingency gain for

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anticipated insurance proceeds in excess of losses already recognized is not recognized until all contingencies relating to the insurance claim have been resolved.

On July 22, 2024, Jasper National Park was closed and evacuated due to wildfire activity, and a wildfire entered the Jasper townsite on July 24, 2024. Pursuit’s hotels and attractions in and near the Jasper townsite were not reached by the wildfire and remain intact except for the Maligne Canyon Wilderness Kitchen (“Wilderness Kitchen”), a restaurant and retail operation located about three miles outside the town of Jasper. In addition to the loss of the Wilderness Kitchen, food and beverage inventories at our properties throughout the region were spoiled and written off. We also incurred other costs related to restoration efforts.

During the three months ended September 30, 2024, we recorded an asset impairment charge of $3.8 million against the net book value of the Wilderness Kitchen. This loss is covered by our property insurance and accordingly, we recorded an offsetting impairment recovery of $3.8 million. We also recorded an impairment charge of $0.6 million against intangible assets (trademark and favorable lease) of the Wilderness Kitchen. We incurred costs at our other properties affected by the Jasper wildfires of $7.8 million, which are deemed probable of recovery through our insurance.

During the three months ended September 30, 2024, we received $4.7 million in insurance proceeds as a partial settlement, of which $3.8 million was allocated to the charge for the Wilderness Kitchen and $0.9 million was allocated against the insurance receivable for costs incurred. As of September 30, 2024, the remaining balance in the insurance receivable of $6.9 million represents costs that are deemed probable of recovery. We include the insurance receivable in “Other current assets” in the Condensed Consolidated Balance Sheets.

Note 2. Revenue and Related Contract Costs and Contract Liabilities

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, 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.

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.

Contract Liabilities

Pursuit and GES 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 customer deposits in “Contract liabilities” and “Other deferred items and liabilities” in the Condensed Consolidated Balance Sheets.

Changes to contract liabilities are as follows:

(in thousands)
Balance at December 31, 2023	$	53,322
Cash additions		266,582
Revenue recognized		(252,230	)
Foreign exchange translation adjustment		693
Balance at September 30, 2024	$	68,367

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 live 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 “Costs of services” or “Costs of products” in the Condensed Consolidated Statement of Operations as applicable. We include the deferred incremental costs

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of obtaining and fulfilling contracts in “Current contract costs” and “Other investments and assets” in the Condensed Consolidated Balance Sheets.

Changes to contract costs are as follows:

(in thousands)
Balance at December 31, 2023	$	21,974
Additions		76,206
Expenses		(65,989	)
Foreign exchange translation adjustment		629
Balance at September 30, 2024	$	32,820

As of September 30, 2024, capitalized contract costs consisted of $2.6 million to obtain contracts and $30.2 million to fulfill contracts. We did not recognize an impairment loss with respect to capitalized contract costs during the three and nine months ended September 30, 2024 or 2023.

Disaggregation of Revenue

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

Pursuit

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2024		2023		2024		2023
Services:
Ticket revenue	$	75,330	$	71,741	$	136,842	$	122,545
Rooms revenue		42,020		48,674		74,202		78,370
Transportation		4,990		6,010		10,183		11,644
Other		10,648		8,994		16,795		13,694
Total services revenue		132,988		135,419		238,022		226,253
Products:
Food and beverage		26,135		28,394		47,703		47,897
Retail operations		23,134		23,127		34,964		33,927
Total products revenue		49,269		51,521		82,667		81,824
Total revenue	$	182,257	$	186,940	$	320,689	$	308,077
Timing of revenue recognition:
Services transferred over time	$	132,988	$	135,419	$	238,022	$	226,253
Products transferred at a point in time		49,269		51,521		82,667		81,824
Total revenue	$	182,257	$	186,940	$	320,689	$	308,077
Markets:
Banff Jasper Collection	$	80,700	$	96,503	$	152,502	$	161,022
Alaska Collection		29,238		26,846		43,897		40,000
Glacier Park Collection		46,408		42,806		63,152		57,991
FlyOver		12,426		9,675		27,148		22,550
Sky Lagoon		13,485		11,110		33,990		26,514
Total revenue	$	182,257	$	186,940	$	320,689	$	308,077

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GES

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in thousands)	2024			2023			2024			2023
Service lines:
Spiro	$	82,205		$	58,887		$	242,585		$	199,617
GES Exhibitions		194,806			122,115			551,623			446,146
Intersegment eliminations		(3,564	)		(2,043	)		(7,158	)		(6,839	)
Total revenue	$	273,447		$	178,959		$	787,050		$	638,924
Timing of revenue recognition:
Services transferred over time	$	242,248		$	149,700		$	674,104		$	539,345
Products transferred over time (1)		15,137			13,518			48,108			42,497
Products transferred at a point in time		16,062			15,741			64,838			57,082
Total revenue	$	273,447		$	178,959		$	787,050		$	638,924
Geographical markets:
North America	$	237,484		$	148,569		$	647,465		$	506,816
EMEA		52,406			42,325			182,542			154,506
Intersegment eliminations		(16,443	)		(11,935	)		(42,957	)		(22,398	)
Total revenue	$	273,447		$	178,959		$	787,050		$	638,924

(1)

GES’ graphics product revenue is earned over time over the duration of an event as it is considered a part of the single performance obligation satisfied over time.

Note 3. Share-Based Compensation

We grant share-based compensation awards to our officers, directors, and certain key employees pursuant to the 2017 Viad Corp Omnibus Incentive Plan, as amended (the “2017 Plan”). The 2017 Plan has a 10-year term and provides for the following types of awards: (a) incentive and non-qualified stock options; (b) restricted stock awards and restricted stock units; (c) performance units or performance shares; (d) stock appreciation rights; (e) cash-based awards; and (f) certain other stock-based awards. As of September 30, 2024, there were 568,648 shares available for future grant under the 2017 Plan.

The following table summarizes share-based compensation expense:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in thousands)	2024			2023			2024			2023
Performance-based restricted stock units	$	1,476		$	845		$	3,879		$	2,486
Restricted stock awards and restricted stock units		2,129			1,540			6,154			4,864
Stock options		109			350			467			1,297
Share-based compensation expense before income tax		3,714			2,735			10,500			8,647
Income tax benefit (1)		(87	)		(34	)		(237	)		(100	)
Share-based compensation expense, net of income tax	$	3,627		$	2,701		$	10,263		$	8,547

(1)

We do not record a tax benefit on the expense in the United States where we have a valuation allowance.

Note 4. 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,
(in thousands)	2024		2023
Raw materials	$	349	$	681
Finished goods		10,897		9,472
Inventories	$	11,246	$	10,153

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Note 5. Other Current Assets

Other current assets consisted of the following:

	September 30,		December 31,
(in thousands)	2024		2023
Insurance receivable (1)	$	6,877	$	—
Prepaid software maintenance		5,692		4,905
Prepaid project deposit		3,623		3,699
Restricted cash		3,020		6,325
Prepaid vendor payments		2,937		2,403
Prepaid taxes		2,270		881
Income tax receivable		10		670
Prepaid other		3,027		1,567
Other current assets		2,488		1,324
Other current assets	$	29,944	$	21,774

(1) During the three months ended September 30, 2024, we recorded an asset impairment charge of $3.8 million against the net book value of the Wilderness Kitchen. This loss is covered by our property insurance and accordingly, we recorded an offsetting impairment recovery of $3.8 million. We incurred costs at our other properties affected by the Jasper wildfires of $7.8 million, which are deemed probable of recovery. During the three months ended September 30, 2024, we received $4.7 million in insurance proceeds as a partial settlement, of which $3.8 million was allocated to the Wilderness Kitchen and $0.9 million was allocated against the insurance receivable for costs incurred. As of September 30, 2024, the remaining balance in the insurance receivable of $6.9 million represents costs that are deemed probable of recovery. Refer to Note 1 – Overview and Basis of Presentation - Insurance Recoveries for additional information.

Note 6. Property and Equipment, Net

Property and equipment consisted of the following:

	September 30,			December 31,
(in thousands)	2024			2023
Land and land interests	$	31,843		$	31,184
Buildings and leasehold improvements		466,920			445,074
Equipment and other		462,644			455,070
Gross property and equipment		961,407			931,328
Accumulated depreciation		(426,873	)		(395,557	)
Property and equipment, net (excluding finance leases)		534,534			535,771
Finance lease ROU assets, net		54,330			57,120
Property and equipment, net	$	588,864		$	592,891

Depreciation expense was $12.9 million during the three months ended September 30, 2024 and $36.9 million during the nine months ended September 30, 2024. Depreciation expense was $10.1 million during the three months ended September 30, 2023 and $31.0 million during the nine months ended September 30, 2023.

Capitalized interest was zero during the three months ended September 30, 2024 and $0.7 million during the nine months ended September 30, 2024. Capitalized interest was $0.6 million during the three months ended September 30, 2023 and $1.3 million during the nine months ended September 30, 2023, which was primarily related to the development of Pursuit’s FlyOver Chicago attraction.

On July 2, 2019, we executed a facility lease with the intent of building a new FlyOver attraction, FlyOver Canada Toronto. Effective August 6, 2024, this facility lease was terminated. During the three months ended September 30, 2024, we recorded an asset impairment charge of $5.5 million related to site-specific engineering plans developed for this attraction.

On July 24, 2024, Pursuit’s Wilderness Kitchen was lost to the Jasper wildfires. During the three months ended September 30, 2024, we recorded an asset impairment charge of $3.8 million against the net book value of the Wilderness Kitchen. This loss is covered by our property insurance and accordingly, we recorded an offsetting impairment recovery of $3.8 million. Refer to Note 1 – Overview and Basis of Presentation - Insurance Recoveries for additional information.

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Note 7. Other Investments and Assets

Other investments and assets consisted of the following:

	September 30,		December 31,
(in thousands)	2024		2023
Self-insured excess liability receivable	$	7,776	$	7,776
Other mutual funds		5,327		4,271
Contract costs		3,911		1,772
Other		3,338		3,228
Other investments and assets	$	20,352	$	17,047

Note 8. Goodwill and Other Intangible Assets, Net

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

(in thousands)
Balance at December 31, 2023	$	123,906
Foreign currency translation adjustments		(2,001	)
Balance at September 30, 2024	$	121,905

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. We do not believe there have been any significant changes to the outlook for the future years or to the risk profile of our reporting units that would indicate that goodwill impairment testing should have been performed as of September 30, 2024.

Other intangible assets consisted of the following:

		September 30, 2024							December 31, 2023
(in thousands)	Useful Life (Years)	Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Intangible assets subject to amortization:
Customer contracts and relationships	8.9	$	33,162	$	(29,487	)	$	3,675	$	34,701	$	(29,950	)	$	4,751
Operating contracts and licenses	32.8		40,314		(5,535	)		34,779		40,324		(4,692	)		35,632
In-place lease	32.0		14,450		(2,104	)		12,346		14,754		(1,842	)		12,912
Tradenames	2.9		4,004		(2,961	)		1,043		5,667		(4,121	)		1,546
Other	1.2		9		(8	)		1		787		(200	)		587
Total amortized intangible assets			91,939		(40,095	)		51,844		96,233		(40,805	)		55,428
Indefinite-lived intangible assets:
Business licenses			566		—			566		569		—			569
Other intangible assets, net		$	92,505	$	(40,095	)	$	52,410	$	96,802	$	(40,805	)	$	55,997

Intangible asset amortization expense (excluding amortization expense of ROU assets) was $1.0 million during the three months ended September 30, 2024 and $2.8 million during the nine months ended September 30, 2024. Intangible asset amortization expense was $1.3 million during the three months ended September 30, 2023 and $3.6 million during the nine months ended September 30, 2023.

On July 24, 2024, Pursuit’s Wilderness Kitchen was lost to the Jasper wildfires. During the three months ended September 30, 2024, we recorded an impairment charge of $0.6 million against intangible assets (trademark and favorable lease) of the Wilderness Kitchen. Refer to Note 1 – Overview and Basis of Presentation - Insurance Recoveries for additional information.

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At September 30, 2024, the estimated future amortization expense related to intangible assets subject to amortization is as follows:

(in thousands)
Year ending December 31,
Remainder of 2024	$	801
2025		2,328
2026		2,295
2027		1,898
2028		1,875
Thereafter		42,647
Total	$	51,844

Note 9. Other Current Liabilities

Other current liabilities consisted of the following:

	September 30,		December 31,
(in thousands)	2024		2023
Continuing operations:
Accrued sales and use taxes and personal property taxes	$	9,351	$	3,958
Accrued concession fees		8,162		3,970
Foreign income taxes payable		7,797		8,558
Accrued employee benefit costs		5,357		4,835
Self-insured liability		5,224		4,531
Commissions payable		4,283		3,799
Accrued professional fees		1,921		1,208
Accommodation service deposits		1,482		2,681
Current portion of pension and postretirement liabilities		1,046		1,396
Other		7,297		6,315
Total continuing operations		51,920		41,251
Discontinued operations:
Self-insured liability		268		121
Environmental remediation liabilities		25		25
Other		1,000		1,000
Total discontinued operations		1,293		1,146
Total other current liabilities	$	53,213	$	42,397

Note 10. Other Deferred Items and Liabilities

Other deferred items and liabilities consisted of the following:

	September 30,		December 31,
(in thousands)	2024		2023
Continuing operations:
Foreign deferred tax liability	$	28,547	$	28,234
Multi-employer pension plan withdrawal liability		12,964		13,341
Self-insured liability		7,113		7,407
Self-insured excess liability		7,776		7,776
Accrued compensation		6,363		5,627
Accrued restructuring		748		2,666
Other		1,372		1,958
Total continuing operations		64,883		67,009
Discontinued operations:
Environmental remediation liabilities		1,098		2,140
Self-insured liability		1,284		1,562
Total discontinued operations		2,382		3,702
Total other deferred items and liabilities	$	67,265	$	70,711

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Note 11. Debt and Finance Obligations

The components of debt and finance obligations consisted of the following:

	September 30,			December 31,
(in thousands, except interest rates)	2024			2023
Debt:
2021 Credit Facility - Term Loan B 9.1% interest rate at September 30, 2024 and 10.5% at December 31, 2023, due through 2028 (1)	$	318,000		$	321,000
2021 Credit Facility - Revolving Credit Facility - Viad Corp borrowings 8.5% interest rate at December 31, 2023, due through 2026 (1)		—			57,000
Jasper Term Loan 6.5% interest rate at September 30, 2024 and December 31, 2023, due through 2028 (1)		12,376			12,655
Jasper Revolving Credit Facility 9.5% weighted-average interest rate at December 31, 2023, due through 2028 (1)		—			3,020
FlyOver Iceland Credit Facility 9.0% interest rate at September 30, 2024 and 8.9% at December 31, 2023, due through 2029 (1)		3,902			4,049
FlyOver Iceland Term Loans 12.3% weighted-average interest rate at September 30, 2024 and 13.8% at December 31, 2023, due through 2024 (1)		11			475
Less unamortized debt issuance costs		(8,001	)		(9,453	)
Total debt		326,288			388,746
Finance obligations:
Finance lease obligations (2) 9.2% weighted-average interest rate at September 30, 2024 and December 31, 2023, due through 2067		63,197			63,929
Financing arrangements		716			—
Total debt and finance obligations (3)(4)		390,201			452,675
Current portion		(8,314	)		(8,371	)
Long-term debt and finance obligations	$	381,887		$	444,304

(1)

Represents the weighted-average interest rate in effect as of the end of the respective periods, including any applicable margin. The interest rates do not include amortization of debt issuance costs, commitment fees, or any expense or income related to the Interest Rate Cap as discussed in Note 12 – Derivative.

(2)

Refer to Note 20 – Leases and Other for additional information.

(3)

The estimated fair value of total debt and finance leases was $318.4 million as of September 30, 2024 and $349.8 million as of December 31, 2023. The fair value of debt was estimated by discounting the 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 for additional information.

(4)

Cash paid for interest on debt was $36.1 million during the nine months ended September 30, 2024 and $35.7 million during the nine months ended September 30, 2023.

2021 Credit Facility

Effective July 30, 2021, we entered into a $500 million credit facility (the “2021 Credit Facility”). The 2021 Credit Facility provided for a $400 million term loan (“Term Loan B”) and a $100 million revolving credit facility (“Revolving Credit Facility”). The proceeds of the Term Loan B, net of $14.8 million in related fees, were used to repay the $327 million outstanding balance under our prior $450 million revolving credit facility and to provide for financial flexibility to fund future acquisitions and growth initiatives and for general corporate purposes.

On October 6, 2023, we entered into the Third Amendment to the 2021 Credit Facility, which among other things, increased the principal amount of the Revolving Credit Facility by $70 million, bringing the total amount of revolving capacity to $170 million, and added Brewster Inc., an Alberta corporation and a wholly-owned subsidiary of the Company, as a co-borrower. In connection with the amendment, we prepaid $70 million of the outstanding balance on our existing Term Loan B using $60 million from the Revolving Credit Facility, which has a lower credit spread as discussed below, and $10 million of cash from the Company’s balance sheet.

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LIBOR Transition Amendment

On February 6, 2023, we entered into the LIBOR Transition Amendment to the 2021 Credit Facility to replace the London Interbank Offered Rate (“LIBOR”) with the Secured Overnight Financing Rate (“SOFR”) for U.S. dollar borrowings on our Term Loan B and Revolving Credit Facility. In accordance with the LIBOR replacement provisions outlined in the 2021 Credit Facility, additional credit spread adjustments apply to SOFR ranging from 0.11448% (for a one-month duration) up to 0.71513% (for a 12-month duration). As discussed below under “Term Loan B”, those additional credit spread adjustments were eliminated for our Term Loan B borrowings with the Fourth Amendment to the 2021 Credit Facility (as discussed below), but remain in place for borrowings under our Revolving Credit Facility.

CDOR Transition Amendment

On June 28, 2024, we entered into the Canadian Benchmark Replacement Conforming Changes Amendment (“CDOR Transition Amendment”) to the 2021 Credit Facility to replace the Canadian Dollar Offered Rate (“CDOR”) with the Canadian Overnight Repo Rate Average (“CORRA”) for Canadian dollar borrowings on our revolver. Additional credit spread adjustments apply to CORRA ranging from 0.29547% (for a one-month duration) up to 0.32138% (for a three-month duration).

Term Loan B

The Term Loan B has a maturity date of July 30, 2028, is subject to quarterly amortization of principal of $1.0 million, and carries no financial covenants. Interest rates are based on SOFR plus a credit spread, with a SOFR floor of 0.50%. On April 26, 2024, we entered into the Fourth Amendment to the 2021 Credit Facility, which among other things, (i) reduced the SOFR credit spread from 5.00% to 4.25% on the Term Loan B and (ii) set the additional credit spread adjustments to 0% on the Term Loan B.

As discussed in Note 12 – Derivative, we entered into an interest rate cap agreement that manages our exposure to interest rate increases on $300 million of borrowings under the 2021 Credit Facility or other SOFR-based borrowings and provides us with the right to receive payment if the one-month SOFR exceeds 5.0% (“Strike Rate”).

Revolving Credit Facility

The Revolving Credit Facility has a maturity date of July 30, 2026 and carries financial covenants. On March 23, 2022, we entered into the First Amendment to the 2021 Credit Facility and on March 28, 2023, we entered into the Second Amendment to the 2021 Credit Facility. These amendments modified the financial covenants to the following:

•

Maintain a total net leverage ratio of not greater than 4.00 to 1.00; and

•

Maintain an interest coverage ratio of not less than 2.00 to 1.00.

As of September 30, 2024, our total net leverage ratio was 1.65 to 1.00, the interest coverage ratio was 4.13 to 1.00, and we were in compliance with all covenants under the Revolving Credit Facility.

Interest rates for U.S. dollar borrowings on our Revolving Credit Facility are based on SOFR (plus additional credit spread adjustments as detailed above under “LIBOR Transition Amendment”). We also have the option to borrow U.S. funds based on the “Base Rate”, which for any day is the highest of the Fed Funds Rate plus 0.50%, Bank of America’s publicly announced “prime rate,” and SOFR plus 1.00%.

Interest rates for Canadian dollar borrowings on our Revolving Credit Facility are based on CORRA (plus additional credit spread adjustments as detailed above under “CDOR Transition Amendment”). We also have the option to borrow Canadian funds based on the “Canadian Prime Rate”, which for any day is the higher of the per annum rate of interest designated by Bank of America (acting through its Canada branch) from time to time as its prime rate for commercial loans made by it in Canada in Canadian dollars, and the CORRA Rate for a one-month Interest Period as of such day, plus 1.00%.

Credit spreads for borrowings on our Revolving Credit Facility are based on Viad’s total net leverage ratio and range from 2.50% to 3.50% for SOFR and CORRA borrowings and from 1.50% to 2.50% for Base Rate and Canadian Prime Rate borrowings. Additionally, a 1.00% floor applies to the Base Rate and a 0% floor applies to the Canadian Prime Rate.

The Revolving Credit Facility includes an undrawn fee ranging from 0.30% to 0.50% that is based on Viad’s total net leverage ratio.

As of September 30, 2024, capacity remaining under the Revolving Credit Facility was $164.3 million, reflecting $170 million total facility size, less $5.7 million in outstanding letters of credit.

In addition to U.S. dollar borrowings and Canadian dollar borrowings, we may also borrow funds on the Revolving Credit Facility in Pound Sterling based on the Sterling Overnight Index Average and Euros based on the Euro Interbank Offered Rate (“EURIBOR”), plus applicable credit spreads. No such borrowings had been made as of September 30, 2024.

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Jasper Credit Facility

Effective May 16, 2023, Pursuit entered into a $27.0 million Canadian dollar (approximately $20.0 million U.S. dollars) credit facility (the “Jasper Credit Facility”). The Jasper Credit Facility provides for a $17.0 million Canadian dollar term loan (“Jasper Term Loan”) and a $10.0 million Canadian dollar revolving credit facility (“Jasper Revolving Credit Facility”). The Jasper Credit Facility matures on January 31, 2028.

The Jasper Revolving Credit Facility carries financial covenants as follows:

•

Maintain a pre-compensation fixed-charge coverage ratio of not less than 1.30 to 1.00; and

•

Maintain a post-compensation fixed-charge coverage ratio of not less than 1.10 to 1.00.

As of September 30, 2024, both the pre-compensation and post-compensation fixed-charge coverage ratios were 2.25 to 1.00, and Pursuit was in compliance with all covenants under the Jasper Credit Facility.

Jasper Term Loan

The proceeds of the Jasper Term Loan reflect the outstanding balance under Pursuit’s prior Forest Park construction loan facility at the time it was converted to the Jasper Term Loan of $16.8 million Canadian dollars. The Jasper Term Loan bears interest at a 6.5% fixed rate.

Jasper Revolving Credit Facility

The proceeds of the Jasper Revolving Credit Facility are used to fund capital improvements. As of September 30, 2024, capacity remaining under the Jasper Revolving Credit Facility was $10.0 million Canadian dollars (approximately $7.4 million U.S. dollars). The Jasper Revolving Credit Facility bears interest at the Canadian Prime Rate plus 2.25%.

FlyOver Iceland Credit Facility

Effective February 15, 2019, FlyOver Iceland ehf., (“FlyOver Iceland”) a wholly-owned subsidiary of Esja, entered into a credit agreement with a €5.0 million (approximately $5.6 million U.S. dollars) credit facility (the “FlyOver Iceland Credit Facility”) with an original maturity date of March 1, 2022. The loan proceeds were used to complete the development of the FlyOver Iceland attraction. The loan bears interest at the three month EURIBOR plus 5.5%.

FlyOver Iceland entered into an addendum effective December 1, 2021 wherein the principal payments were deferred for twelve months beginning December 1, 2021, with equal quarterly principal payments due beginning December 1, 2022 and the maturity date was extended to September 1, 2027.

On February 27, 2024, FlyOver Iceland reached an agreement to amend and extend the FlyOver Iceland Credit Facility, wherein the principal payments are deferred for six months beginning March 1, 2024, with equal quarterly principal payments due beginning September 1, 2024 and a maturity date of September 1, 2029. The amended terms also include a modification of the financial covenants and an adjustment of the interest rate to three month EURIBOR plus 5.5%, decreasing to 4.9% once FlyOver Iceland’s leverage ratio is below 4.00 to 1.00.

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 and matured on April 1, 2023. It bore interest on a seven-day term deposit rate at the Central Bank of Iceland. The second term loan for ISK 30.0 million was entered into effective October 15, 2020 and matured and was repaid in full on October 1, 2024. It bore 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 an original maturity date of February 1, 2023, which was extended to February 1, 2024 by way of a subsequent amendment, and bore interest at one-month Reykjavik InterBank Offered Rate (“REIBOR”) plus 4.99%. On February 27, 2024, FlyOver Iceland reached an agreement with its lender to refinance the ISK 50.0 million loan with a new ISK 50.0 million term loan, which was repaid on August 1, 2024.

Financing Arrangements

We entered into insurance premium financing arrangements with two financial intermediaries in order to finance certain of our insurance premium payments. The financing arrangements are payable within the next 12 months and bear a weighted average interest rate of 7.6%.

Changes to our financing arrangements are as follows:

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(in thousands)
Balance at December 31, 2023	$	—
Additions		13,062
Payments		(12,253	)
Foreign currency translation adjustment		(93	)
Balance at September 30, 2024	$	716

Note 12. Derivative

Interest Rate Cap

On January 4, 2023, we entered into an interest rate cap agreement with an effective date of January 31, 2023. The interest rate cap manages our exposure to interest rate increases on $300 million in SOFR-based borrowings under our 2021 Credit Facility and provides us with the right to receive payment if the one-month SOFR exceeds the Strike Rate. Beginning on February 28, 2023, we pay a fixed monthly deferred premium based on an annual rate of 0.3335% for the interest rate cap, which matures on January 31, 2025. During the three and nine months ended September 30, 2024, we received gross proceeds from the interest rate cap of $0.3 million and $0.8 million, respectively, as one-month SOFR exceeded the Strike Rate.

We designated the interest rate cap as a cash flow hedge designed to hedge the variability of the SOFR-based interest payments on our 2021 Credit Facility. The interest rate cap is recorded in the Condensed Consolidated Balance Sheets at fair value. The fair value is determined using widely accepted valuation techniques and reflects the contractual terms of the interest rate cap including the price of the cap and the period to maturity. While there are no quoted prices in active markets, our calculation uses observable market-based inputs, including interest rate curves. The interest rate cap is classified as Level 2 within the fair value hierarchy. Refer to Note 13 – Fair Value Measurements for the related fair value disclosures.

The fair value of the interest rate cap is as follows:

		September 30,		December 31,
(in thousands)	Classification	2024		2023
Derivatives designated as hedging instruments
Interest rate cap - short-term	Other current liabilities	$	337	$	443
Interest rate cap - long-term	Other deferred items and liabilities		—		45
Total derivatives designated as hedging instruments		$	337	$	488

Changes in the fair value of the interest rate cap are recorded in “Accumulated other comprehensive income (loss)” (“AOCI”). Amounts accumulated in AOCI are reclassified to “Interest expense, net” in the Condensed Consolidated Statements of Operations when the hedged item affects earnings. We reclassified to interest expense, net, approximately $0.3 million during the three months ended September 30, 2024 and approximately $0.9 million during the nine months ended September 30, 2024, and $0.4 million remained in unrealized losses in AOCI as of September 30, 2024. We estimate that $0.1 million will be reclassified to earnings within the next 12 months.

Note 13. Fair Value Measurements

The fair value of an asset or liability is defined as the price that would be received by selling an asset or 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.

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The fair value of assets and liabilities measured at fair value on a recurring basis are as follows:

			Fair Value Measurements at Reporting Date Using
(in thousands)	September 30, 2024		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Other mutual funds (1)	$	5,327	$	5,327	$	—	$	—
Total assets at fair value on a recurring basis	$	5,327		5,327	$	—	$	—
Liabilities:
Interest rate cap (2)	$	337	$	—	$	337	$	—
Total liabilities at fair value on a recurring basis	$	337	$	—	$	337	$	—

			Fair Value Measurements at Reporting Date Using
(in thousands)	December 31, 2023		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Other mutual funds (1)	$	4,271	$	4,271	$	—	$	—
Total assets at fair value on a recurring basis	$	4,271	$	4,271	$	—	$	—
Liabilities:
Interest rate cap (2)	$	488	$	—	$	488	$	—
Total liabilities at fair value on a recurring basis	$	488	$	—	$	488	$	—

(1)

We include other mutual funds in “Other investments and assets” in the Condensed Consolidated Balance Sheets.

(2)

Refer to Note 12 - Derivative.

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

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)	2024			2023			2024			2023
Net income attributable to Viad	$	48,615		$	41,271		$	52,809		$	31,363
Less: Allocation to participating securities		(11,187	)		(9,522	)		(11,282	)		(6,194	)
Convertible preferred stock dividends		(1,950	)		(1,950	)		(5,850	)		(5,850	)
Net income allocated to Viad common stockholders (basic)	$	35,478		$	29,799		$	35,677		$	19,319
Add: Allocation to participating securities		177			98			165			44
Net income allocated to Viad common stockholders (diluted)	$	35,655		$	29,897		$	35,842		$	19,363
Basic weighted-average outstanding common shares		21,166			20,885			21,107			20,825
Additional dilutive shares related to share-based compensation		449			289			410			200
Diluted weighted-average outstanding shares		21,615			21,174			21,517			21,025
Income per share:
Basic income attributable to Viad common stockholders	$	1.68		$	1.43		$	1.69		$	0.93
Diluted income attributable to Viad common stockholders	$	1.65		$	1.41		$	1.67		$	0.92

Diluted income per common share is calculated using the more dilutive of the two-class method or if-converted method. The two-class method uses net income available to common stockholders and assumes conversion of all potential shares other than the participating securities. The if-converted method uses net income available to common stockholders and assumes conversion of all potential shares

20

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 income per common share as unvested share-based payment awards that contain nonforfeitable rights to dividends and convertible preferred stock are considered participating securities. Accordingly, such securities are included in the earnings allocation in calculating income per share. The adjustment to the carrying value of the redeemable noncontrolling interest is reflected in income per common share.

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2024		2023		2024		2023
Unvested restricted share-based awards		2		4		18		42
Unvested performance share-based awards		152		159		119		125
Stock options		138		372		138		372

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 (the “Investment Agreement”), relating to the issuance of 135,000 shares of newly issued Convertible Series A Preferred Stock, par value $0.01 per share (the “Convertible Preferred Stock”), 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. We have classified the Convertible Preferred Stock as mezzanine equity in the 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. Dividends paid-in-kind increase the redemption value of the preferred stock. The redemption value of the preferred stock was $141.8 million as of September 30, 2024 and December 31, 2023. Upon the occurrence of a change in control event, the holders have a right to require Viad to repurchase such preferred stock. During the nine months ended September 30, 2024, $5.9 million of dividends were declared, all of which were paid in cash. We intend to pay preferred stock dividends in cash for the foreseeable future.

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. In March 2020, our Board of Directors suspended our share repurchase program. As of September 30, 2024, 546,283 shares remain available for repurchase under all prior authorizations. 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 by component are as follows:

(in thousands)	Cumulative Foreign Currency Translation Adjustments			Unrecognized Net Actuarial Loss and Prior Service Credit, Net			Unrealized Gain (Loss) on Interest Rate Cap			Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2023	$	(35,340	)	$	(4,403	)	$	(651	)	$	(40,394	)
Other comprehensive income (loss) before reclassifications		(6,567	)		—			151			(6,416	)
Amounts reclassified from AOCI, net of tax		—			133			126			259
Net other comprehensive income (loss)		(6,567	)		133			277			(6,157	)
Balance at September 30, 2024	$	(41,907	)	$	(4,270	)	$	(374	)	$	(46,551	)

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(in thousands)	Cumulative Foreign Currency Translation Adjustments			Unrecognized Net Actuarial Loss and Prior Service Credit, Net			Unrealized Gain (Loss) on Interest Rate Cap			Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2022	$	(42,983	)	$	(4,202	)	$	—		$	(47,185	)
Other comprehensive income before reclassifications		110			—			556			666
Amounts reclassified from AOCI, net of tax		—			104			(240	)		(136	)
Net other comprehensive income		110			104			316			530
Balance at September 30, 2023	$	(42,873	)	$	(4,098	)	$	316		$	(46,655	)

Amounts reclassified from AOCI that relate to our defined benefit pension and postretirement plans include the amortization of 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 17. Income Taxes

The effective tax rate was 15.8% for the three months ended September 30, 2024 and 22.4% for the nine months ended September 30, 2024. The effective tax rate was 15.6% for the three months ended September 30, 2023 and 25.3% for the nine months ended September 30, 2023.

The income tax provision was computed based on our estimated annualized effective tax rate and the full-year forecasted income or loss plus the tax impact of unusual, infrequent, or nonrecurring significant items during the period. The amount and change of pre-tax income and loss recognized between jurisdictions impacted the reported effective tax rate for the nine months ended September 30, 2024 as we do not recognize a tax benefit primarily on losses in the United States where we have a valuation allowance, while recognizing tax expense in Canada, Netherlands, the Middle East, the United Kingdom, and Iceland. We included in the annualized effective rate a $1.1 million benefit for the release of the valuation allowance recorded on the United Kingdom’s tax loss carryforwards as the United Kingdom’s forecasted income will fully utilize these carryforward losses for the year. During the three months ended September 30, 2024, we released the valuation allowance of $0.5 million recorded on deferred tax assets with certain separate states. We also recorded a $0.5 million expense during the first quarter of 2024 to record estimated withholding taxes associated with repatriating all of Sky Lagoon’s earnings back to the United States and a valuation allowance against the tax credit generated from this withholding tax.

The effective tax rate for the nine months ended September 30, 2023 was further impacted by the release of a valuation allowance of $2.1 million during the first quarter of 2023 on deferred tax assets associated with certain separate state filings, which more than offset taxes due in jurisdictions without a valuation allowance.

We paid net cash for income taxes of $4.5 million during the three months ended September 30, 2024 and $17.4 million during the nine months ended September 30, 2024 of which $10.1 million was paid to Canadian taxing authorities, $3.2 million to the Netherlands, and $1.5 million to the United Kingdom. We paid net cash for income taxes of $3.3 million during the three months ended September 30, 2023 and $16.0 million during the nine months ended September 30, 2023, of which $5.8 million was paid to Canadian tax authorities.

Note 18. Pension and Postretirement Benefits

The components of net periodic benefit cost of our pension and postretirement benefit plans for the three months ended September 30, 2024 and 2023 consist of the following:

	Domestic Plans
	Pension Plans						Postretirement Benefit Plans						Foreign Pension Plans
(in thousands)	2024			2023			2024			2023			2024			2023
Service cost	$	—		$	—		$	7		$	4		$	51		$	44
Interest cost		206			212			78			74			84			94
Expected return on plan assets		(7	)		(15	)		—			—			(83	)		(87	)
Amortization of prior service credit		(9	)		(13	)		18			27			—			—
Recognized net actuarial loss (gain)		91			77			(145	)		(62	)		32			35
Net periodic benefit cost	$	281		$	261		$	(42	)	$	43		$	84		$	86
Settlement cost		—			—			—			—			—			—
Total expenses	$	281		$	261		$	(42	)	$	43		$	84		$	86

22

The components of net periodic benefit cost of our pension and postretirement benefit plans for the nine months ended September 30, 2024 and 2023 consist of the following:

	Domestic Plans
	Pension Plans						Postretirement Benefit Plans						Foreign Pension Plans
(in thousands)	2024			2023			2024			2023			2024			2023
Service cost	$	—		$	—		$	19		$	16		$	152		$	132
Interest cost		608			634			260			260			254			277
Expected return on plan assets		(121	)		(95	)		—			—			(250	)		(259	)
Amortization of prior service credit		(29	)		(29	)		56			85			—			—
Recognized net actuarial loss (gain)		249			219			(221	)		(150	)		95			102
Net periodic benefit cost	$	707		$	729		$	114		$	211		$	251		$	252
Settlement cost		—			—			—			—			—			—
Total expenses	$	707		$	729		$	114		$	211		$	251		$	252

We expect to contribute $0.8 million to our funded pension plans, $0.8 million to our unfunded pension plans, and $0.7 million to our postretirement benefit plans in 2024. During the nine months ended September 30, 2024, we contributed $0.6 million to our funded pension plans, $0.6 million to our unfunded pension plans, and $0.4 million to our postretirement benefit plans.

Note 19. Restructuring (Recoveries) Charges

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. These initiatives resulted in restructuring charges related to the elimination of certain positions and continuing to reduce our facility footprint at GES.

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

	GES						Other Restructurings
(in thousands)	Severance & Employee Benefits			Facilities			Severance & Employee Benefits			Total
Balance at December 31, 2023	$	1,634		$	1,378		$	—		$	3,012
Restructuring (recoveries) charges (1)		(670	)		343			1			(326	)
Cash payments		(624	)		(476	)		—			(1,100	)
Adjustment to liability		—			38			(1	)		37
Balance at September 30, 2024	$	340		$	1,283		$	—		$	1,623

(1) During the second quarter of 2024, we reversed a prior year accrual of $1.5 million related to a certain multi-employer pension fund.

As of September 30, 2024, $0.7 million of liabilities related to facilities will remain unpaid by the end of 2024. The liabilities related to facilities primarily include dilapidations and non-lease expenses that will be paid over the remaining lease terms. Refer to Note 23 – Segment Information for information regarding restructuring charges by segment.

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Note 20. Leases and Other

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

		September 30,		December 31,
(in thousands)	Classification on the Condensed Consolidated Balance Sheet	2024		2023
Assets:
Operating lease ROU assets	Operating lease ROU assets	$	100,404	$	109,774
Finance lease ROU assets, net	Property and equipment, net		54,330		57,120
Total lease ROU assets		$	154,734	$	166,894
Liabilities:
Current:
Operating lease obligations	Operating lease obligations	$	17,807	$	17,334
Finance lease obligations	Current portion of debt and finance obligations		2,530		2,742
Noncurrent:
Operating lease obligations	Long-term operating lease obligations		96,502		106,109
Finance lease obligations	Long-term debt and finance obligations		60,667		61,187
Total lease liabilities		$	177,506	$	187,372

The components of lease expense consisted of the following:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2024		2023		2024		2023
Finance lease cost:
Amortization of ROU assets	$	1,022	$	1,092	$	3,238	$	3,196
Interest on lease liabilities		1,423		1,430		4,283		4,267
Operating lease cost		6,875		6,753		20,562		19,546
Short-term lease cost		1,464		1,431		3,103		2,816
Variable lease cost		1,086		1,220		3,622		3,958
Total lease cost, net	$	11,870	$	11,926	$	34,808	$	33,783

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
(in thousands)	2024		2023		2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	7,029	$	6,862	$	21,424	$	20,183
Operating cash flows from finance leases	$	1,609	$	1,512	$	4,776	$	4,564
Financing cash flows from finance leases	$	743	$	687	$	2,308	$	2,415
ROU assets obtained in exchange for lease obligations:
Operating leases	$	1,545	$	5,803	$	5,173	$	23,390
Finance leases (1)	$	273	$	433	$	1,515	$	796

(1)

Includes terminations of equipment finance leases during 2023.

	September 30,			December 31,
	2024			2023
Weighted-average remaining lease term (years):
Operating leases		7.22			7.64
Finance leases		33.10			33.47
Weighted-average discount rate:
Operating leases		7.94	%		7.88	%
Finance leases		9.19	%		9.17	%

24

As of September 30, 2024, 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 2024	$	5,943		$	2,371		$	8,314
2025		27,440			7,924			35,364
2026		25,687			7,229			32,916
2027		21,896			6,749			28,645
2028		15,937			6,347			22,284
Thereafter		57,064			174,774			231,838
Total future lease payments		153,967			205,394			359,361
Less: Amount representing interest		(39,658	)		(142,197	)		(181,855	)
Present value of minimum lease payments		114,309			63,197			177,506
Current portion		(17,807	)		(2,530	)		(20,337	)
Long-term portion	$	96,502		$	60,667		$	157,169

As of September 30, 2024, the estimated future minimum rental income under non-cancellable leases, which includes rental income from facilities that we own, are as follows:

(in thousands)
Remainder of 2024	$	827
2025		1,957
2026		1,678
2027		972
2028		799
Thereafter		2,081
Total minimum rents	$	8,314

Note 21. Litigation, Claims, Contingencies, and Other

We are plaintiffs or defendants in various actions, proceedings, and pending claims, some of which involve, or may involve, compensatory, punitive, or other damages. Litigation is subject to many uncertainties and it is possible that some of the legal actions, proceedings, or claims could be decided against us. Although the amount of liability as of September 30, 2024 with respect to unresolved legal matters is not ascertainable, we believe that any resulting liability, after taking into consideration amounts already provided for and insurance coverage, will not have a material effect on our business, financial position, or results of operations.

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 immediately reported the accident to our relevant insurance carriers, who have supported our investigation and subsequent claims relating to the accident. In May 2023, we resolved charges from the Canadian office of Occupational Health and Safety in relation to this accident, resulting in fines and related payments in an aggregate amount of $0.5 million Canadian dollars (approximately $0.3 million U.S. dollars). We continue to manage our legal defense of various claims from the victims and their families. In addition, we believe that our reserves and, subject to customary deductibles, our insurance coverage is sufficient to cover potential claims related to this accident.

We are subject to various United States federal, state, and foreign laws and regulations governing the prevention of pollution and the protection of the environment in the jurisdictions in which we have or had operations. If we fail to comply with these environmental laws and regulations, civil and criminal penalties could be imposed, and we could become subject to regulatory enforcement actions in the form of injunctions and cease and desist orders. As is the case with many companies, we also face exposure to actual or potential claims and lawsuits involving environmental matters relating to our past operations. As of September 30, 2024, we had recorded environmental remediation liabilities of $1.1 million related to previously sold operations. Although we are a party to certain environmental disputes, we believe that any resulting liabilities, after taking into consideration amounts already provided for and insurance coverage, will not have a material effect on our financial position or results of operations.

As of September 30, 2024, on behalf of 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 our subsidiary operations. We would generally be required to make payments to the respective third parties under these guarantees in the event that the related subsidiary could not meet its own payment obligations. The maximum potential amount of future payments that we would be required to make under all guarantees existing as of September 30, 2024 would be approximately $75.4 million. These guarantees relate to our leased equipment and facilities through December 2038. There are no recourse provisions

25

that would enable us to recover from third parties any payments made under the guarantees. Furthermore, there are no collateral or similar arrangements pursuant to which we could recover payments.

A significant number of our employees are unionized and we are a party to approximately 100 collective bargaining agreements, with approximately one-third requiring renegotiation each year. If we are unable to reach an agreement with a union during the collective bargaining process, the union may call for a strike or work stoppage, which may, under certain circumstances, adversely impact our business and results of operations. We believe that relations with our employees are satisfactory and that collective bargaining agreements expiring in 2024 will be renegotiated in the ordinary course of business. Although our labor relations are currently stable, disruptions could occur, with the possibility of an adverse impact on the operating results of GES.

We are self-insured up to certain limits for workers’ compensation and general liabilities, which includes automobile, product general liability, and client property loss claims. The aggregate amount of insurance liabilities (up to our retention limits), and including our estimated incurred but not yet reported claims, related to our continuing operations was $12.2 million as of September 30, 2024, which includes $7.3 million related to workers’ compensation liabilities, and $4.9 million related to general liability claims. We have also retained and provided for certain workers’ compensation insurance liabilities in conjunction with previously sold businesses of $1.6 million as of September 30, 2024. We are also self-insured for certain employee health benefits and the estimated employee health benefit claims incurred but not yet reported was $1.4 million as of September 30, 2024. Provisions for losses for claims incurred, including actuarially derived estimated claims incurred but not yet reported, are made based on our historical experience, claims frequency, and other factors. A change in the assumptions used could result in an adjustment to recorded liabilities. We have purchased insurance for amounts in excess of the self-insured levels, which generally range from $0.2 million to $0.5 million on a per claim basis. We do not maintain a self-insured retention pool fund as claims are paid from current cash resources at the time of settlement. Our net cash payments in connection with these insurance liabilities were $1.1 million for the three months ended September 30, 2024, $4.0 million for the nine months ended September 30, 2024, $1.2 million for the three months ended September 30, 2023, and $3.4 million for the nine months ended September 30, 2023.

In addition, as of September 30, 2024, we have recorded insurance liabilities of $7.8 million related to continuing operations, which represents the amount for which we remain the primary obligor after self-insured insurance limits, without taking into consideration the above-referenced insurance coverage. Of this total, $6.6 million is related to workers’ compensation liabilities and $1.2 million is related to general/auto liability claims, which is recorded in “Other deferred items and liabilities” in the Condensed Consolidated Balance Sheets with a corresponding receivable in “Other investments and assets.”

Note 22. Noncontrolling Interests – 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 has increased to 56.4% as of September 30, 2024. Through Esja and its wholly-owned subsidiary, we operate 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 August 2022 (the “Reference Date”), and in the event 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 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. If the FlyOver Iceland attraction has not achieved the Put Option Condition by December 31, 2024, the put option expires. As of September 30, 2024, the FlyOver Iceland attraction has not achieved the Put Option Condition and we do not anticipate the Put Option Condition to be achieved prior to expiration.

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).

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Changes in the redeemable noncontrolling interest are as follows:

(in thousands)
Balance at December 31, 2023	$	4,733
Net loss attributable to redeemable noncontrolling interest		(372	)
Foreign currency translation adjustment		21
Balance at September 30, 2024	$	4,382

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, 2023	$	18,159		$	59,108		$	11,921		$	89,188
Net income attributable to non-redeemable noncontrolling interest		2,727			1,696			3,639			8,062
Contributions (distributions) from/to non-controlling interests, net		—			149			(3,300	)		(3,151	)
Foreign currency translation adjustments		(5	)		(1,192	)		16			(1,181	)
Balance at September 30, 2024	$	20,881		$	59,761		$	12,276		$	92,918
Equity ownership interest that we do not own		20	%		40	%		49	%

(1)

Includes Mountain Park Lodges and the Golden Skybridge at Brewster, part of the Banff Jasper Collection.

Note 23. Segment Information

An operating segment is defined as a component of an enterprise that engages in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. Our CODM is our Chief Executive Officer.

We measure the profit and performance of our operations on the basis of segment operating income (loss), which excludes restructuring charges (recoveries), impairment charges, and certain other corporate expenses that are not allocated to the reportable segments. Intersegment sales are eliminated in consolidation and intersegment transfers are not significant. Corporate activities include expenses not allocated to operations.

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in thousands)	2024			2023			2024			2023
Revenue:
Pursuit	$	182,257		$	186,940		$	320,689		$	308,077
GES:
Spiro		82,205			58,887			242,585			199,617
GES Exhibitions		194,806			122,115			551,623			446,146
GES intersegment eliminations		(3,564	)		(2,043	)		(7,158	)		(6,839	)
Total GES		273,447			178,959			787,050			638,924
Total revenue	$	455,704		$	365,899		$	1,107,739		$	947,001
Segment operating income (loss):
Pursuit	$	75,903		$	81,375		$	64,710		$	72,074
GES:
Spiro		6,918			179			28,436			11,632
GES Exhibitions		9,714			(5,529	)		44,353			20,235
Total GES		16,632			(5,350	)		72,789			31,867
Total		92,535			76,025			137,499			103,941
Corporate eliminations (1)		13			17			45			49
Corporate activities		(7,757	)		(3,579	)		(17,612	)		(10,255	)
Gain on sale of ON Services		—			—			—			(204	)
Interest expense, net		(11,428	)		(12,476	)		(35,858	)		(37,081	)
Other expense, net		(407	)		(554	)		(1,287	)		(1,533	)
Restructuring (charges) recoveries:
Pursuit		—			(192	)		(1	)		(201	)
Spiro		(329	)		(155	)		(519	)		(331	)
GES Exhibitions		(54	)		(125	)		846			(585	)
Corporate		—			(8	)		—			(8	)
Impairment charges:
Pursuit		(6,110	)		—			(6,110	)		—
Income from continuing operations before income taxes	$	66,463		$	58,953		$	77,003		$	53,792

(1)

Corporate eliminations 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.

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Additional information of our reportable segments is as follows:

	Three Months Ended				Nine Months Ended September 30,
	September 30,				September 30,
(in thousands)	2024		2023		2024		2023
Depreciation:
Pursuit	$	10,067	$	7,708	$	28,632	$	24,121
Spiro		572		527		1,641		1,627
GES Exhibitions		2,175		1,830		6,540		5,148
Corporate		41		18		97		57
	$	12,855	$	10,083	$	36,910	$	30,953
Amortization:
Pursuit	$	1,169	$	1,356	$	3,493	$	3,811
Spiro		76		69		230		194
GES Exhibitions		744		920		2,328		2,749
	$	1,989	$	2,345	$	6,051	$	6,754
Capital expenditures:
Pursuit	$	9,717	$	18,945	$	40,547	$	44,260
Spiro		1,345		892		2,285		2,157
GES Exhibitions		3,760		2,703		9,843		8,301
Corporate		103		6		112		21
	$	14,925	$	22,546	$	52,787	$	54,739

We do not report total assets by segment because this is not a metric used to allocate resources or evaluate segment performance by our CODM.

Note 24. Subsequent Events

Sale of GES Business

On October 20, 2024, we entered into a definitive agreement to sell our GES business to Truelink Capital for $535 million. The purchase price is subject to customary adjustments for cash, indebtedness, working capital and transaction expenses, and will be paid in cash. Of the total cash consideration, $25 million will be deferred for one year following the transaction closing date and is contingent only on the passage of time. The transaction is expected to close by the end of 2024, subject to regulatory approvals and customary closing conditions. This transaction did not meet the held-for-sale classification criteria as of September 30, 2024, as the agreement had not been finalized on that date nor had the requisite approvals from our Board of Directors authorizing management to commit to the sale, but our GES business is expected to be reflected as discontinued operations beginning in the fourth quarter of 2024.

Jasper Wildfires Insurance Proceeds

Subsequent to September 30, 2024, Pursuit received additional partial settlement payments of approximately $1.5 million from the insurance company related to the Jasper wildfires. We are currently working with our insurance carriers to determine the extent of potential recoveries from our policies. Assessment of the full value of the loss is ongoing.

Acquisition of Eddie’s Café & Mercantile

On November 6, 2024, Pursuit expanded its collection of accommodation and hospitality experiences within Glacier National Park with the acquisition of Eddie’s Café & Mercantile for $15.9 million. Eddie’s Café & Mercantile offers a combination of food and beverage, retail, and six newly constructed overnight accommodation units and is located adjacent to Pursuit’s existing 48 room Apgar Village Lodge.

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

Forward-Looking Statements

This Quarterly Report on Form 10-Q (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 “aim,” “anticipate,” “believe,” “could,” “deliver,” “estimate,” “expect,” “intend,” “may,” “might,” “outlook,” “plan,” “potential,” “seek,” “target,” “will,” and similar expressions are intended to identify our forward-looking statements. Such forward-looking statements include those that address activities, events or developments that Viad or its management believes or anticipates may occur in the future, including all statements regarding the expected timing of the closing of the GES transaction, the use of proceeds of the transaction, potential benefits of the transaction, expectations concerning Pursuit’s opportunities and performance as a standalone public company, and the expected Chief Executive Officer transition in connection with the closing of the GES transaction. Similarly, statements that describe our go-forward business strategy, objectives, plans, 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.

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 pending sale of our GES business may not be completed in the timeframe or on the terms we anticipate (or at all);

•

we may not realize the full strategic, financial, operational and other benefits that are expected to result from the pending sale of our GES business;

•

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

•

travel industry disruptions;

•

the impact of our overall level of indebtedness, as well as our financial covenants, on our operational and financial flexibility;

•

seasonality of our businesses;

•

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

•

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

•

our ability to manage our business and continue our growth if we lose any of our key personnel;

•

the competitive nature of the industries in which we operate;

•

our dependence on large exhibition event clients;

•

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

•

transportation disruptions and increases in transportation costs;

•

natural disasters, weather conditions, accidents, and other catastrophic events;

•

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

•

our multi-employer pension plan funding obligations;

•

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

•

our exposure to cybersecurity attacks and threats;

•

our exposure to currency exchange rate fluctuations;

•

liabilities relating to prior and discontinued operations;

•

sufficiency and cost of insurance coverage; and

•

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.

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 2023 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 of Financial Condition and Results of Operations (“MD&A”) should be read in conjunction with our 2023 Form 10-K and the condensed consolidated financial statements and related notes included in this Form 10-Q. The MD&A is intended to assist in understanding our financial condition and results of operations.

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Overview

We are a leading provider of extraordinary experiences, including hospitality and leisure activities, experiential marketing, and live events. We operate through three reportable segments: Pursuit, Spiro, and GES Exhibitions. Spiro and GES Exhibitions are both live event businesses, and are referred to collectively as “GES.”

Recent Developments

Sale of GES Business

On October 20, 2024, we entered into a definitive agreement to sell our GES business to Truelink Capital for $535 million. The purchase price is subject to customary adjustments for cash, indebtedness, working capital and transaction expenses, and will be paid in cash. Of the total cash consideration, $25 million will be deferred for one year following the transaction closing date and is contingent only on the passage of time. The transaction is expected to close by the end of 2024, subject to regulatory approvals and customary closing conditions.

Jasper Wildfires

On July 22, 2024, Jasper National Park was closed and evacuated due to wildfire activity, and a wildfire entered the Jasper townsite on July 24, 2024. All of Pursuit’s hotels and attractions in and near the Jasper townsite, as well as our Pyramid Lake Lodge, Miette Mountain Cabins, and Maligne Lake Cruise were not reached by the wildfire and remain intact except for Pursuit’s Wilderness Kitchen, a restaurant and retail operation located about three miles outside the town of Jasper. The town of Jasper re-opened to residents and local businesses on August 16, 2024. All of Pursuit’s hotels in Jasper are open with the exception of Pyramid Lake Lodge, which sustained superficial damage to areas of the roof and to the exterior facade.

Pursuit’s Columbia Icefield Glacier Adventure and Skywalk re-opened on August 9, 2024. Maligne Lake Road re-opened on October 12, 2024, after the peak summer season. Due to this road closure, the Maligne Lake Cruises did not reopen during the remainder of the 2024 season.

During the three months ended September 30, 2024, we received $4.7 million in insurance proceeds as a partial settlement. During October 2024, we received additional partial settlement payments of approximately $1.5 million. We are currently working with our insurance carriers to determine the extent of potential recoveries from our policies. Assessment of the full value of the loss is ongoing.

Jasper SkyTram

On June 26, 2024, we entered into an agreement to acquire the Jasper SkyTram attraction in Jasper National Park. All conditions precedent to the closing of the Jasper SkyTram acquisition have yet to be satisfied and have been delayed to an unknown extent by the Jasper wildfires as noted above.

Seasonality

Pursuit’s peak activity occurs during the summer months. During 2023, 79% of Pursuit’s revenue was earned in the second and third quarters.

GES’ live event activity can vary significantly from quarter to quarter and year to year depending on the frequency and timing of shows. Some shows are not held annually and some shift between quarters.

Results of Operations

Financial Highlights

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
(in thousands, except per share data)	2024		2023		% Change	2024		2023		% Change
Total revenue	$	455,704	$	365,899	24.5%	$	1,107,739	$	947,001		17.0	%
Net income attributable to Viad	$	48,615	$	41,271	17.8%	$	52,809	$	31,363		68.4	%
Diluted income per common share from continuing operations attributable to Viad common stockholders	$	1.65	$	1.44	14.6%	$	1.64	$	0.96		70.8	%

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Three months ended September 30, 2024 compared with the three months ended September 30, 2023

•

Total revenue increased $89.8 million during the three months ended September 30, 2024 due to increased revenue at GES of $94.5 million, offset in part by decreased revenue at Pursuit of $4.7 million.

•

Net income attributable to Viad increased $7.3 million during the three months ended September 30, 2024, primarily reflecting higher segment operating income at GES of $22.0 million, offset in part by: (i) impairment charges of $6.1 million of which $5.5 million was related to the facility lease termination of FlyOver Canada Toronto and $0.6 million was related to intangible assets of Pursuit’s Wilderness Kitchen, which was lost in the Jasper wildfires, (ii) lower segment operating income at Pursuit of $5.5 million, and (iii) higher corporate activities of $4.2 million, primarily due to transaction-related costs including consulting, accounting, and legal costs incurred related to the pending sale of the GES business.

Nine months ended September 30, 2024 compared with the nine months ended September 30, 2023

•

Total revenue increased $160.7 million during the nine months ended September 30, 2024 due to increased revenue at GES of $148.1 million and increased revenue at Pursuit of $12.6 million.

•

Net income attributable to Viad increased $21.4 million during the nine months ended September 30, 2024, primarily reflecting higher segment operating income at GES of $40.9 million, offset in part by: (i) lower segment operating income at Pursuit of $7.4 million, (ii) higher corporate activities of $7.4 million primarily due to transaction-related costs including consulting, accounting, and legal costs incurred related to the pending sale of the GES business, and (iii) impairment charges of $6.1 million as discussed above.

Analysis of Revenue and Operating Results by Reportable Segment

Pursuit

The following table presents a comparison of Pursuit’s reported revenue and segment operating income for the three and nine months ended September 30, 2024 and 2023:

	Three Months Ended							Nine Months Ended
	September 30,							September 30,
(in thousands)	2024		2023		% Change			2024		2023		% Change
Revenue (1):
Pursuit:
Attractions	$	97,222	$	95,820		1.5	%	$	176,623	$	162,850		8.5	%
Hospitality		79,059		84,345		(6.3	)%		131,186		131,984		(0.6	)%
Transportation		5,002		5,560		(10.0	)%		10,311		10,974		(6.0	)%
Other		974		1,215		(19.8	)%		2,569		2,269		13.2	%
Total Pursuit	$	182,257	$	186,940		(2.5	)%	$	320,689	$	308,077		4.1	%
Segment operating income:
Total Pursuit	$	75,903	$	81,375		(6.7	)%	$	64,710	$	72,074		(10.2	)%

(1)

Revenue by line of business does not agree to Note 2 – Revenue and Related Contract Costs and Contract Liabilities of 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.

Three months ended September 30, 2024 compared with the three months ended September 30, 2023

Pursuit revenue decreased $4.7 million driven primarily by a decrease in hospitality revenue of $5.3 million due to a 13.6% decrease in revenue per available room as a result of fewer room nights sold due to the Jasper wildfires, offset in part by an increase in attractions revenue of $1.4 million due to higher revenue per attraction visitor of 4.2%. FlyOver Chicago opened on March 1, 2024 and contributed revenue of $3.3 million during the three months ended September 30, 2024.

Pursuit segment operating income decreased $5.5 million from the prior year period primarily due to decreased revenue as a result of the Jasper wildfires, higher depreciation expense of $2.4 million, as well as an increase in operating costs to support higher business volume during the three months ended September 30, 2024.

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Nine months ended September 30, 2024 compared with the nine months ended September 30, 2023

Pursuit revenue increased $12.6 million driven primarily by an increase in attractions revenue of $13.8 million due to a 4.6% increase in the number of visitors as well as higher revenue per attraction visitor of 3.6%. Our Sky Lagoon attraction in Iceland had particularly strong demand with increased revenue of $7.5 million. FlyOver Chicago contributed revenue of $6.4 million during its first seven months of operations commencing on March 1, 2024.

Pursuit segment operating income decreased $7.4 million from the prior year period primarily due to the Jasper wildfires and higher depreciation expense of $4.5 million, an increase in operating costs to support higher business volume during the nine months ended September 30, 2024, as well as start-up costs to open the FlyOver Chicago attraction, offset in part by an increase in revenue.

Performance Measures

We use the following key business metrics to evaluate the performance of Pursuit’s attractions business:

•

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, common in the hospitality industry, to evaluate Pursuit’s hospitality business:

•

Revenue per Available Room (“RevPAR”). 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”). 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 increases in ancillary non-rooms revenue (including food and beverage and retail revenue).

The following table provides Pursuit’s key performance indicators:

	Three Months Ended								Three Months Ended
	September 30, 2024								September 30, 2023										% Change
	As Reported			New Experiences(1)		Same-Store(2)			As Reported			New Experiences(1)		FX Impact(3)		Same-Store(2)			As Reported			Same-Store(2)
Attractions Key Performance Indicators:
Number of visitors		1,624,384			122,918		1,152,300			1,668,203			—		—		1,127,575			(2.6	)%		2.2	%
Ticket revenue (in thousands)	$	75,330		$	3,144	$	58,543		$	71,741		$	—	$	1,230	$	50,465			5.0	%		16.0	%
Effective ticket price	$	46.37		$	25.58	$	50.81		$	43.01		$	—	$	—	$	44.76			7.8	%		13.5	%
Attractions revenue (in thousands)	$	97,222		$	3,290	$	75,340		$	95,820		$	—	$	1,631	$	65,973			1.5	%		14.2	%
Revenue per attraction visitor	$	59.85		$	26.77	$	65.38		$	57.44		$	—	$	—	$	58.51			4.2	%		11.7	%
Hospitality Key Performance Indicators:
Room nights available		202,162			—		125,434			202,356			—		—		125,700			(0.1	)%		(0.2	)%
Rooms revenue (in thousands)	$	42,020		$	—	$	33,271		$	48,674		$	—	$	452	$	30,673			(13.7	)%		8.5	%
RevPAR	$	207.85		$	—	$	265.25		$	240.54		$	—	$	—	$	244.02			(13.6	)%		8.7	%
Occupancy		70.4	%		—		87.1	%		89.6	%		—		—		87.4	%		(19.2	)%		(0.3	)%
ADR	$	295.42		$	—	$	304.46		$	268.49		$	—	$	—	$	279.08			10.0	%		9.1	%
Hospitality revenue (in thousands)	$	79,059		$	—	$	69,195		$	84,345		$	—	$	585	$	63,295			(6.3	)%		9.3	%

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	Nine Months Ended								Nine Months Ended
	September 30, 2024								September 30, 2023										% Change
	As Reported			New Experiences(1)		Same-Store(2)			As Reported			New Experiences(1)		FX Impact(3)		Same-Store(2)			As Reported			Same-Store(2)
Attractions Key Performance Indicators:
Number of visitors		3,130,570			260,180		2,521,224			2,991,656			—		—		2,451,028			4.6	%		2.9	%
Ticket revenue (in thousands)	$	136,842		$	5,952	$	117,246		$	122,545		$	—	$	1,555	$	100,945			11.7	%		16.1	%
Effective ticket price	$	43.71		$	22.88	$	46.50		$	40.96		$	—	$	—	$	41.18			6.7	%		12.9	%
Attractions revenue (in thousands)	$	176,623		$	6,396	$	151,635		$	162,850		$	—	$	2,087	$	132,547			8.5	%		14.4	%
Revenue per attraction visitor	$	56.42		$	24.58	$	60.14		$	54.43		$	—	$	—	$	54.08			3.6	%		11.2	%
Hospitality Key Performance Indicators:
Room nights available		483,700			—		406,972			481,121			—		—		404,465			0.5	%		0.6	%
Rooms revenue (in thousands)	$	74,202		$	—	$	65,453		$	78,370		$	—	$	726	$	60,094			(5.3	)%		8.9	%
RevPAR	$	153.41		$	—	$	160.83		$	162.89		$	—	$	—	$	148.58			(5.8	)%		8.2	%
Occupancy		67.0	%		—		71.5	%		75.0	%		—		—		71.6	%		(8.0	)%		(0.1	)%
ADR	$	229.08		$	—	$	224.96		$	217.09		$	—	$	—	$	207.49			5.5	%		8.4	%
Hospitality revenue (in thousands)	$	131,186		$	—	$	121,322		$	131,984		$	—	$	944	$	110,575			(0.6	)%		9.7	%

(1)

New experiences include FlyOver Chicago (opened March 1, 2024).

(2)

Same-Store metrics include only attractions and lodging properties that Pursuit operated at full capacity, considering seasonal closures, for the entirety of both periods presented. Attractions and lodging properties that were temporarily closed due the Jasper wildfire are excluded. For experiences located outside the United States, financial metric comparisons to the prior year are expressed on a constant U.S. dollar basis. The individual amounts do not sum across to the same-store metrics.

(3)

Foreign exchange rate variance effects (or “FX Impact”) represents the adjustments necessary to express prior financial metrics on a constant U.S. dollar basis, using the current year quarterly average exchange rates for previous periods to eliminate the impact of changes in exchange rates for same-store Pursuit experiences located outside of the United States.

Attractions. The decrease in number of attractions visitors during the three months ended September 30, 2024 was primarily driven by decreased visitation at the Maligne Lake Cruise, Glacier Adventure, and the Columbia Icefield Skywalk attractions, which were temporarily closed during the peak 2024 season as a result of the Jasper wildfires. The increase in the number of attraction visitors during the nine months ended September 30, 2024 was primarily driven by higher visitation at FlyOver Chicago, which opened on March 1, 2024, and Sky Lagoon in Iceland. The increase in same-store effective ticket price during the three and nine months ended September 30, 2024 was driven primarily by revenue management efforts.

During the three months ended September 30, 2024, attractions ticket revenue on a same-store basis increased $8.1 million on a 2.2% increase in visitors and a 13.5% increase in effective ticket price. During the nine months ended September 30, 2024, attractions ticket revenue on a same-store basis increased $16.3 million on a 2.9% increase in visitors and a 12.9% increase in effective ticket price.

Hospitality. The decrease in RevPAR during the three and nine months ended September 30, 2024 was primarily driven by a decrease in rooms revenue as a result of the Jasper wildfires, offset in part by an increase in ADR.

During the three and nine months ended September 30, 2024, rooms revenue on a same-store basis increased 8.5% and 8.9%, respectively.

Refer to “–Recent Developments” above for additional information on the Jasper wildfires.

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GES

The following table presents a comparison of GES’ reported revenue and segment operating income during the three and nine months ended September 30, 2024 and 2023:

	Three Months Ended									Nine Months Ended
	September 30,									September 30,
(in thousands)	2024			2023			% Change			2024			2023			% Change
Revenue:
GES:
Spiro	$	82,205		$	58,887			39.6	%	$	242,585		$	199,617			21.5	%
GES Exhibitions		194,806			122,115			59.5	%		551,623			446,146			23.6	%
Intersegment eliminations		(3,564	)		(2,043	)		(74.4	)%		(7,158	)		(6,839	)		(4.7	)%
Total GES	$	273,447		$	178,959			52.8	%	$	787,050		$	638,924			23.2	%
Segment operating income (loss):
GES:
Spiro	$	6,918		$	179		**			$	28,436		$	11,632		**
GES Exhibitions		9,714			(5,529	)	**				44,353			20,235		**
Total GES	$	16,632		$	(5,350	)	**			$	72,789		$	31,867		**

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

Three months ended September 30, 2024 compared with the three months ended September 30, 2023

Spiro revenue increased $23.3 million primarily due to strong client spending on major non-annual shows, which contributed $34 million of incremental revenue during the quarter, offset in part by the timing of shows.

GES Exhibitions revenue increased $72.7 million primarily due to an increase of approximately $71 million related to the timing of major non-annual shows and same-show revenue growth of $1.2 million, or 3.2%.

Spiro segment operating income increased $6.7 million primarily due to higher revenue.

GES Exhibitions segment operating income increased $15.2 million primarily due to higher revenue.

Nine months ended September 30, 2024 compared with the nine months ended September 30, 2023

Spiro revenue increased $43.0 million primarily due to strong spending from existing and new clients obtained during 2024 and an increase of approximately $18 million due to the timing of major non-annual shows.

GES Exhibitions revenue increased $105.5 million primarily due to larger show sizes, including same-show revenue growth of 2.6% and an increase of approximately $72 million due to the timing of major non-annual shows.

Spiro segment operating income increased $16.8 million primarily due to higher revenue.

GES Exhibitions segment operating income increased $24.1 million, primarily due to higher revenue.

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Other Expenses

	Three Months Ended									Nine Months Ended
	September 30,									September 30,
(in thousands)	2024			2023			% Change			2024			2023			% Change
Corporate activities	$	7,757		$	3,579		**			$	17,612		$	10,255			71.7	%
Gain on sale of ON Services	$	—		$	—		**			$	—		$	204			(100.0	)%
Interest expense, net	$	11,428		$	12,476			(8.4	)%	$	35,858		$	37,081			(3.3	)%
Other expense, net	$	407		$	554			(26.5	)%	$	1,287		$	1,533			(16.0	)%
Restructuring charges (recoveries)	$	383		$	480			(20.2	)%	$	(326	)	$	1,125		**
Impairment charges	$	6,110		$	—		**			$	6,110		$	—		**
Income tax expense	$	10,509		$	9,173			14.6	%	$	17,247		$	13,623			26.6	%
Income (loss) from discontinued operations	$	(90	)	$	(654	)		86.2	%	$	743		$	(855	)	**

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

Corporate Activities – The increase in corporate activities is primarily due to transaction-related costs including consulting, accounting, legal, and other costs incurred related to the pending sale of the GES business of approximately $4.3 million during the three months ended September 30, 2024 and $6.7 million during the nine months ended September 30, 2024. Refer to Note 24 – Subsequent Events of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for additional information.

Impairment Charges – On July 2, 2019, we executed a facility lease with the intent of building a new FlyOver attraction, FlyOver Canada Toronto. Effective August 6, 2024, this facility lease was terminated. During the three months ended September 30, 2024, we recorded an asset impairment charge of $5.5 million related to site-specific engineering plans developed for this attraction.

Additionally, during July 2024, a wildfire entered Jasper National Park and Pursuit’s Wilderness Kitchen was lost to the wildfire. During the three months ended September 30, 2024, we recorded an asset impairment charge of $3.8 million against the net book value of the Wilderness Kitchen. This loss is covered by our property insurance and accordingly, we recorded an offsetting impairment recovery of $3.8 million. We also recorded an impairment charge of $0.6 million against intangible assets (trademark and favorable lease) of the Wilderness Kitchen. See –Recent Developments - Jasper Wildfires above for additional information.

Income Tax Expense – The effective tax rate was 15.8% for the three months ended September 30, 2024, 15.6% for the three months ended September 30, 2023, 22.4% for the nine months ended September 30, 2024, and 25.3% for nine months ended September 30, 2023. The effective tax rates differed from the 21% federal rate as we do not recognize a tax benefit primarily on losses in the United States where we have a valuation allowance. During the three months ended September 30, 2024, we released a valuation allowance of $0.5 million recorded on deferred tax assets with certain separate states. During the nine months ended September 30, 2024, we also recorded a $1.1 million benefit for the release of the valuation allowance recorded on the United Kingdom’s tax loss carryforwards, offset by a $0.5 million expense during the first quarter of 2024 to record estimated withholding taxes associated with repatriating Sky Lagoon’s earnings and a valuation allowance against the tax credit generated from this withholding tax.

The effective tax rate for the nine months ended September 30, 2023 was further impacted by the release of a valuation allowance of $2.1 million during the first quarter of 2023 on deferred tax assets associated with certain separate state filings, which more than offset taxes due in jurisdictions without a valuation allowance.

Liquidity and Capital Resources

We believe that our existing sources of liquidity will be sufficient to fund operations and projected capital outlays for at least the next 12 months and the longer term.

When assessing our current sources of liquidity, we include the following:

	September 30,		December 31,
(in thousands)	2024		2023
Unrestricted cash and cash equivalents (1)	$	64,552	$	52,704
Available capacity on Revolving Credit Facility (2)		164,288		108,040
Total available liquidity	$	228,840	$	160,744

(1)

As of September 30, 2024, we held $54.6 million of our cash and cash equivalents outside of the United States.

(2)

As of September 30, 2024, the available capacity includes our total Revolving Credit Facility size of $170 million less $5.7 million in outstanding letters of credit issued under the Revolving Credit Facility. As of December 31, 2023, the available capacity includes

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our total Revolving Credit Facility size of $170 million less $57.0 million of outstanding borrowings and $5.0 million in outstanding letters of credit issued under the Revolving Credit Facility.

Cash provided by operating activities, supplemented by our revolving credit facility and existing cash and cash equivalents, is our primary source of liquidity for funding our business requirements. During the nine months ended September 30, 2024, net cash provided by operating activities was $133.1 million.

Our short-term and long-term funding requirements include debt obligations, maintenance capital expenditures, working capital requirements, and potential acquisitions and strategic investments as we focus on scaling Pursuit with investments in high-return unforgettable, inspiring experiences through its Refresh, Build, Buy growth strategy. Our projected capital outlays can be adjusted for changes in the operating environment.

Debt Obligations

Effective July 30, 2021, we entered into the 2021 Credit Facility. The 2021 Credit Facility provided 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 of the Term Loan B, net of $14.8 million in related fees, were used to repay the $327 million outstanding balance under our prior $450 million revolving credit facility and to provide for financial flexibility to fund future acquisitions and growth initiatives and for general corporate purposes. On January 4, 2023, we entered into an interest rate cap agreement with an effective date of January 31, 2023. The interest rate cap manages our exposure to interest rate increases on $300 million in borrowings under the 2021 Credit Facility or other SOFR-based borrowings. Refer to Note 12 – Derivative of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for additional information.

The Revolving Credit Facility carries financial covenants. As of September 30, 2024, we were in compliance with all covenants under the Revolving Credit Facility.

On March 28, 2023, we entered into the Second Amendment to the 2021 Credit Facility, which modified the interest coverage financial covenant. On October 6, 2023, we entered into the Third Amendment to the 2021 Credit Facility, which among other things, increased the principal amount of the Revolving Credit Facility by $70 million, bringing the total amount of revolving capacity to $170 million. In connection with the Third Amendment, we prepaid $70 million of the outstanding balance on our existing Term Loan B using $60 million from the Revolving Credit Facility and $10 million of cash from the Company’s balance sheet. The current credit spread on our Revolving Credit Facility is 2.00% lower than the credit spread on the Term Loan B, which was 5.00% for SOFR borrowings through April 25, 2024. On April 26, 2024, we entered into the Fourth Amendment to the 2021 Credit Facility, which among other things, (i) reduced the SOFR credit spread from 5.00% to 4.25% on the Term Loan B, (ii) set the additional credit spread adjustments to 0% on the Term Loan B and (iii) reset the 1% prepayment premium on any repricings of the Term Loan B for six months.

On June 28, 2024, we entered into the CDOR Transition Amendment to the 2021 Credit Facility to replace the CDOR with the CORRA for Canadian Dollar borrowings on our revolver. Additional credit spread adjustments apply to CORRA ranging from 0.29547% (for a one-month duration) up to 0.32138% for a three-month duration).

For additional information about our debt and finance obligations, refer to Note 11 – Debt and Finance Obligations of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q), all of which is incorporated by reference herein.

Capital Expenditures

As of September 30, 2024, we have planned capital expenditures of approximately $70 million to $80 million for the next 12 months, including approximately $30 million to $40 million on select growth projects. We intend to continue making selective investments to advance Pursuit’s Refresh, Build, Buy growth strategy while maintaining a solid liquidity position.

Other Obligations

We have additional obligations as part of our ordinary course of business, beyond those committed for debt obligations and capital expenditures. Refer to Note 20 – Leases and Other and Note 18 – Pension and Postretirement Benefits of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for further information. The expected timing of payments of our obligations is estimated based on current information. Timing of payments and actual amounts paid may be different, depending on changes to agreed-upon amounts for certain obligations.

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Sale of GES Business

On October 20, 2024, we entered into a definitive agreement to sell our GES business to Truelink Capital for $535 million. The purchase price is subject to customary adjustments for cash, indebtedness, working capital and transaction expenses, and will be paid in cash. Of the total cash consideration, $25 million will be deferred for one year following the transaction closing date and is contingent only on the passage of time. The transaction is expected to close by the end of 2024, subject to regulatory approvals and customary closing conditions.

Upon closing of the GES transaction, Pursuit will have a strong balance sheet to execute on its growth strategy. Cash proceeds from the transaction will be used to retire Viad’s 2021 Credit Facility, which comprises a Term Loan B (with $318 million outstanding, bearing interest at SOFR + 425 basis points) and a $170 million Revolving Credit Facility (of which zero was drawn as of September 30, 2024), and to accelerate Pursuit’s growth through its Refresh, Build, Buy growth strategy.

Cash Flows

Operating Activities

	Nine Months Ended
	September 30,
(in thousands)	2024			2023
Net income	$	60,499		$	39,314
Depreciation and amortization		42,961			37,707
Deferred income taxes		17,331			(923	)
(Income) loss from discontinued operations		(743	)		855
Restructuring (recoveries) charges		(326	)		1,125
Impairment charges		6,110			—
Gains on dispositions of property and other assets		(102	)		(99	)
Share-based compensation expense		10,500			8,647
Other non-cash items, net		5,347			4,423
Changes in operating assets and liabilities, net		(8,481	)		25,505
Net cash provided by operating activities	$	133,096		$	116,554

Net cash provided by operating activities increased $16.5 million primarily due to higher segment operating income, offset in part by outflows due to changes in working capital. We recorded impairment charges of $6.1 million of which $5.5 million was related to the facility lease termination of FlyOver Canada Toronto and $0.6 million was related to intangible assets of Pursuit’s Wilderness Kitchen, which was lost in the Jasper wildfires.

Investing Activities

	Nine Months Ended
	September 30,
(in thousands)	2024			2023
Capital expenditures	$	(52,787	)	$	(54,739	)
Proceeds from insurance		3,823			—
Cash paid for acquisitions, net		—			(41	)
Proceeds from the sale of ON Services		—			1,168
Proceeds from dispositions of property and other assets		121			108
Net cash used in investing activities	$	(48,843	)	$	(53,504	)

Net cash used in investing activities decreased $4.7 million primarily due to insurance proceeds received of $3.8 million for the Jasper wildfires.

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Financing Activities

	Nine Months Ended
	September 30,
(in thousands)	2024			2023
Proceeds from borrowings	$	374,282		$	49,044
Payments on debt and finance obligations		(439,163	)		(54,235	)
Dividends paid on preferred stock		(5,850	)		(5,850	)
Distributions to noncontrolling interest, net of contributions from noncontrolling interest		(3,151	)		(1,126	)
Payments of debt issuance costs		(773	)		(226	)
Payment of payroll taxes on stock-based compensation through shares withheld or repurchased		(1,133	)		(508	)
Other financing activities		(201	)		—
Net cash used in financing activities	$	(75,989	)	$	(12,901	)

Net cash used in financing activities increased $63.1 million was primarily due to net debt payments of $64.9 million during the nine months ended September 30, 2024 compared $5.2 million during the nine months ended September 30, 2023.

Share Repurchases

Our Board of Directors previously authorized us to repurchase shares of our common stock from time to time at prevailing market prices. As of September 30, 2024, 546,283 shares remained available for repurchase under all prior authorizations. In March 2020, our Board of Directors suspended our share repurchase program. The Board of Directors’ authorization does not have an expiration date.

Additionally, we repurchased shares related to tax withholding requirements on vested restricted share-based awards.

Critical Accounting Estimates

Refer to Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2023 Form 10-K for a discussion of our critical accounting estimates.

Impact of Recent Accounting Pronouncements

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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Our market risk exposure relates to fluctuations in interest rates and foreign exchange rates. Foreign exchange risk is the risk that fluctuating exchange rates will adversely affect our financial condition or results of operations. The foreign exchange risk is composed of both potential losses from the translation of foreign currency financial information and the remeasurement of foreign currency transactions. Interest rate risk is the risk that changing interest rates will adversely affect our financial position or results of operations.

Our foreign operations are primarily in Canada, the United Kingdom, Iceland, the Netherlands, the Middle East, and Germany. The functional currency of our foreign subsidiaries is their local currency. Accordingly, for purposes of consolidation, we translate the assets and liabilities of our foreign subsidiaries into U.S. dollars at the foreign exchange rates in effect at the balance sheet date. The unrealized gains or losses resulting from the translation of these foreign denominated assets and liabilities are included as a component of AOCI in 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 our net equity position reported in the Condensed Consolidated Balance Sheets. We do not currently hedge our equity risk arising from the translation of foreign denominated assets and liabilities. We recorded cumulative unrealized foreign currency translation losses in stockholders’ equity of $41.9 million as of September 30, 2024 and $35.3 million as of December 31, 2023. We recorded an unrealized foreign currency translation loss in other comprehensive income (loss) of $6.6 million during the nine months ended September 30, 2024 and an unrealized foreign currency translation gain of $0.1 million during the nine months ended September 30, 2023.

For purposes of consolidation, revenue, costs and expenses, gains, and losses related to our foreign operations are translated into U.S. dollars at the average foreign exchange rates for the period. As a result, our consolidated results of operations are exposed to fluctuations in foreign exchange rates as revenue and segment operating income (loss) of our foreign operations, when translated, may vary from period to period, even when the functional currency amounts have not changed. Such fluctuations may adversely impact overall expected profitability and historical period-to-period comparisons. We do not currently hedge our net earnings exposure arising from the translation of our foreign revenue and segment operating income (loss).

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We are exposed to foreign exchange transaction risk, as our foreign subsidiaries have certain loans and leases denominated in currencies other than the functional currency of the respective subsidiary. As of September 30, 2024, we had long-term contractual liabilities that were denominated in nonfunctional currencies of $46.7 million. As foreign exchange rates fluctuate, these liabilities are remeasured, and the corresponding adjustment is recorded in the Condensed Consolidated Statements of Operations. As of September 30, 2024 and December 31, 2023, we did not have any outstanding foreign currency forward contracts.

On January 4, 2023, we entered into an interest rate cap agreement with an effective date of January 31, 2023 to hedge cash flows on $300 million of our SOFR-based borrowings under the 2021 Credit Facility. Refer to Note 12 – Derivative of the Notes to Condensed Consolidated Financial Statements (Part I, Item 1 of this Form 10-Q) for further information.

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

Item 4. Controls and Procedures

We have established disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure. Management, together with our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2024. Based on this evaluation, the CEO and CFO concluded that our disclosure controls and procedures were effective as of September 30, 2024.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting during the quarter ended September 30, 2024.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

Refer to Note 21 – 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 legal proceedings in which we are involved, which information is incorporated by reference herein.

Item 1A. Risk Factors

Other than the following risk factor set forth below, there have been no material changes from the risk factors previously disclosed in Part I, Item 1A – Risk Factors of our 2023 Form 10-K.

We may not complete the sale of our GES business in the timeframe or on the terms we anticipate and, even if we do, we may not be able to realize the full strategic, financial, operational and other benefits that are expected to result from the transaction. On October 20, 2024, we entered into a definitive agreement to sell our GES business to Truelink Capital for $535 million (the “GES Sale”), subject to customary adjustments for cash, indebtedness, working capital and transaction expenses. The completion of the GES Sale and our receipt of the anticipated proceeds therefrom are subject to a number of risks and uncertainties, including: the satisfaction of closing conditions, including the parties obtaining the necessary regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals), and the occurrence of any event, change or other circumstance that could give rise to the termination of the sale agreement. These and other factors could impair our ability to complete the GES Sale in the timeframe and on the terms that we anticipate (or at all), which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Even if the GES Sale is completed, we may not be able to realize the full strategic, financial, operational and other benefits that are expected to result from the transaction, including the deployment of proceeds from the GES Sale to fund the growth of Pursuit as a standalone company through strategic pipeline investments. Our ability to realize the benefits of the GES Sale may be impacted by a number of factors, including, but not limited to: (i) the anticipated tax treatment of the transaction may not be obtained; (ii) the potential impact of unforeseen liabilities, future capital expenditures, revenues, costs, expenses, earnings, economic performance, indebtedness, financial condition and losses on the future prospects, business and management strategies for the management, expansion and growth of the Company after the consummation of the transaction; (iii) potential litigation relating to the transaction that could be instituted against the Company or its directors; (iv) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the transaction; (v) any negative effects of the announcement, pendency or consummation of the transaction on the market price of our common stock and on our operating results; (vi) risks associated with third party contracts containing consent and/or other provisions that may be triggered by the transaction; (vii) the risk that disruptions from the transaction will harm our business, including current plans and operations or by diverting management’s attention from the Company’s ongoing business operations; and (viii) our ability to retain and hire key personnel and uncertainties arising from leadership changes. In addition, such benefits may be delayed or less significant than anticipated. We cannot predict with certainty when the benefits expected from the GES Sale will occur or the extent to which they will be achieved, or when they will be achieved, if at all. A failure to realize these and other anticipated benefits of the GES Sale or effectively utilize the proceeds from the GES Sale could have a material adverse impact our business, financial condition and results of operations.

Natural disasters, weather conditions, accidents, and other catastrophic events could negatively affect our business. The occurrence of catastrophic events ranging from natural disasters (such as hurricanes, fires, floods, volcanoes, and earthquakes), acts of war or terrorism, accidents involving our travel offerings or experiences, the effects of climate change, including any impact of global warming, or the prospect of these events could disrupt our business. Changes in climates may increase the frequency and intensity of adverse weather patterns and make certain destinations less desirable.

Such catastrophic events have had, and could in the future have, an adverse impact on Pursuit, which is heavily dependent on the ability and willingness of its guests to travel and/or visit our attractions. Pursuit guests tend to delay or postpone vacations if natural conditions differ from those that typically prevail at competing lodges, resorts, and attractions, and catastrophic events and heightened travel security measures instituted in response to such events could impede the guests’ ability to travel, and interrupt our business operations, including damaging our properties. For example, on July 22, 2024, Jasper National Park was closed and evacuated due to wildfire activity, and a wildfire entered the Jasper townsite on July 24, 2024. All of Pursuit’s hotels and attractions in and near the Jasper townsite, as well as our Pyramid Lake Lodge, Miette Mountain Cabins, and Maligne Lake Cruise were not reached by the wildfire and remain intact except for Pursuit’s Maligne Canyon Wilderness Kitchen, a restaurant and retail operation located about three miles outside the town of Jasper. We are currently working with our insurance carriers to determine the extent of potential recoveries from our policies. Assessment of the full value of the loss is ongoing. This incident had a negative effect on visitation to our lodging properties in Jasper National Park as well as the Maligne Lake Cruise and the Columbia Icefield attractions (including the Glacier Adventure and Columbia Icefield Skywalk) during the peak 2024 tourist season in Jasper National Park and, depending on the pace and success of recovery and

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restoration efforts, the incident could continue to have a negative effect on visitation to these properties in 2025. Also, the accident on July 18, 2020, at Pursuit’s Glacier Adventure attraction, which involved one of our off-road Ice Explorers and resulted in three fatalities and other serious injuries, may have a negative impact on our reputation and traveler willingness to visit that attraction in the future.

Such catastrophic events could also have a negative impact on GES, causing a cancellation or relocation of exhibitions and other events held in public venues or disrupt the services we provide to our customers at convention centers, exhibition halls, hotels, and other public venues. Such events could also have a negative impact on GES’ production facilities, preventing us from timely completing exhibit fabrication and other projects for customers. In addition, unfavorable media attention, or negative publicity, in the wake of any catastrophic event or accident could damage our reputation or reduce the demand for our services. If the conditions arising from such events persist or worsen, they could materially and adversely affect our results of operations and financial condition.

In addition to other information set forth in this report, careful consideration should be given to the factors discussed in 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 2023 Form 10-K, which could materially affect our business, financial condition, or future results.

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

The following table summarizes the total number of shares of our common stock that were repurchased during the three months ended September 30, 2024 pursuant to publicly announced plans or programs, as well as certain previously owned shares of common stock that were surrendered by employees, former employees, and non-employee directors 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, 2024 - July 31, 2024		—	$	—		—		546,283
August 1, 2024 - August 31, 2024		—	$	—		—		546,283
September 1, 2024 - September 30, 2024		—	$	—		—		546,283
Total		—	$	—		—		546,283

Pursuant to previously announced authorizations, our Board of Directors has authorized us to repurchase shares of our common stock from time to time at prevailing market prices. In March 2020, our Board of Directors suspended future common stock 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

Securities Trading Plans of Directors and Executive Officers

During the three months ended September 30, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

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Item 6. Exhibits

			Incorporated by Reference
Exhibit Number		Exhibit Description	Form	Period Ending	Exhibit	Filing Date
2.1		Equity Purchase Agreement, dated as of October 20, 2024, by and among Viad Corp and TL Voltron Purchaser, LLC.	8-K		2.1	10/21/2024
3.1		Restated Certificate of Incorporation of Viad Corp, as amended through July 1, 2004 (SEC File No. 001-11015; SEC Film No. 04961107).	10-Q	6/30/2004	3.A	8/9/2004
3.2		Bylaws of Viad Corp, as amended through December 5, 2013.	8-K		3	12/9/2013
10.1	+	Offer Letter, dated as of October 20, 2024, between Viad and David Barry.	8-K		10.1	10/21/2024
10.2	+	Amended and Restated Severance Agreement (No Change in Control) by and between Viad Corp and David Barry, dated as of October 20, 2024.	8-K		10.2	10/21/2024
10.3	+	Form of Incentive Bonus Agreement.	8-K		10.3	10/21/2024
31.1	*	Certification of Chief Executive Officer of Viad Corp pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	*	Certification of Chief Financial Officer of Viad Corp pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	**	Certifications of Chief Executive Officer and Chief Financial Officer of Viad Corp pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document.
101.SCH		Inline XBRL Taxonomy Extension Schema with embedded Linkbase Documents.
104		Cover Page formatted as Inline XBRL and contained in Exhibit 101

*	Filed herewith.
**	Furnished herewith.
+	Management contract or compensation plan or arrangement.

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SIGNATURES

Pursuant to the requirements 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 7, 2024	By:	/s/ Leslie S. Striedel
(Date)		Leslie S. Striedel
		Chief Accounting Officer and Duly Authorized Officer

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