Acquisition of Businesses

9 Months Ended

Sep. 30, 2013

Business Combinations [Abstract]

Acquisition of Businesses

Note 4. Acquisition of Businesses

On February 19, 2013, Viad acquired the assets of Resource Creative Limited (“RCL”) for $647,000 in cash, subject to certain adjustments, plus a deferred payment of up to approximately $278,000, which is contingent upon RCL’s performance. RCL is a United Kingdom-based company specializing in providing creative graphic services to the exhibition, events and retail markets throughout the United Kingdom and continental Europe.

The final amounts assigned to the assets of RCL as of the acquisition date included: property and equipment of $72,000, goodwill of $158,000 and other intangible assets of $695,000. In addition, a liability of $278,000 was recorded as of the acquisition date related to the contingent consideration. The primary factor that contributed to a purchase price resulting in the recognition of goodwill relates to future growth opportunities. The goodwill is deductible for tax purposes over a period of 15 years. The amounts assigned to other intangible assets included: $564,000 of customer relationships and $131,000 of noncompete agreements. The weighted-average amortization period related to the other intangible assets was 4.5 years. The transaction costs related to the acquisition were insignificant. The results of operations of RCL have been included in Viad’s consolidated financial statements from the date of acquisition.

In March 2012, Viad acquired the Banff International Hotel and related assets for $23.6 million in cash. The Banff International Hotel is a 162-guest room hotel located in downtown Banff, Alberta, Canada and is operated by Brewster within the Travel & Recreation Group. The following information represents the final amounts assigned to the assets and liabilities of the Banff International Hotel as of the date of acquisition:

	(in thousands)
Cash and cash equivalents	$	10
Accounts receivable		23
Other current assets		33
Property and equipment		20,408
Goodwill		1,890
Other intangible assets		1,323
Total assets acquired		23,687
Customer deposits		(64	)
Other current liabilities		(67	)
Total liabilities acquired		(131	)
Purchase price	$	23,556

The goodwill recorded in connection with the transaction is included in the Travel & Recreation Group. The primary factor that contributed to a purchase price resulting in the recognition of goodwill relates to future growth opportunities. The goodwill is deductible for tax purposes pursuant to regulations in Canada. The amount assigned to other intangible assets relates to an operating contract and customer relationships. The weighted-average amortization period related to the other intangible assets was 7.7 years. The transaction costs related to the acquisition were insignificant. The results of operations of the Banff International Hotel have been included in Viad’s consolidated financial statements from the date of acquisition.

The following table summarizes the unaudited pro forma results of operations attributable to Viad assuming that the acquisitions above had each been completed at the beginning of each period:

	Three months ended September 30,				Nine months ended September 30,
	2013		2012		2013		2012
	(in thousands, except per share data)
Revenues	$	236,473	$	307,802	$	771,197	$	823,842
Depreciation and amortization		7,439		8,560		21,818		23,862
Segment operating income		24,624		34,110		48,346		49,931
Net income attributable to Viad		11,855		19,932		26,182		26,916
Diluted net income per share		0.58		0.98		1.29		1.33
Basic net income per share		0.58		0.98		1.29		1.33