Carrie Long - ED, Finance and IR Steve Moster - President and CEO Ellen Ingersoll - CFO.

John Healy - Northcoast Research Marco Rodriguez - Stonegate Capital Markets Steve O'Hara - Sidoti & Company Peter Rabover - Artko Capital.

Welcome to the Viad Corp Fourth Quarter Earnings Conference Call. At this time, all lines are in listen-only mode, until the question-and-answer session of today's conference. This call is being recorded. If you have any objections you may disconnect at this time. We will conduct a question-and-answer session at the end of today's call.

[Operator Instructions] I would now like to turn the call over to your host Carrie Long, Executive Director of Finance and Investor Relations. You may now begin..

Good afternoon and thank you for joining us for Viad's 2016 fourth quarter and full year earnings conference call. During the call, you will hear from Steve Moster, our President and CEO; and Ellen Ingersoll, our Chief Financial Officer. Certain statements made during the call which are not historical facts, may constitute forward-looking statements.

Information concerning business and other risk factors that could cause actual results to materially differ from those in the forward-looking statements can be found in Viad's Annual and Quarterly Reports filed with the SEC.

We'll be referring to certain non-GAAP measures during the call and important disclosures regarding these measures can be found in Table 2 of our earnings press release, which is available on the website at www.viad.com. With that I'll turn it over to Steve..

Thanks, Carrie and good afternoon, everybody, thanks for joining us on today's call. 2016 was a year of strong growth for Viad and significant progress against our strategic goals. I am proud to say that we finished the year in line with our prior guidance, with growth of 63% in income per share before other items, and revenue increase of 10.6%.

This strength was driven by positive share rotation, underlying growth at both business groups and contributions from the four businesses we acquired during the year. Both business groups delivered strong financial results and took important steps to accelerate our growth strategy.

At GES, we reported fourth quarter and full year results that were in line with our prior guidance. Full year revenue grew 8% driven by positive share rotations, continued business strengths and our acquisition of a leading audio-visual service provider.

We continue to benefit from new business wins and solid growth across the events we produced, with U.S. base same show revenue growth of 4.1% versus 2015.

GES also delivered strong margin improvement of 200 basis points versus 2015, reflecting the strong operating leverage that exist within the business and our focus on driving growth in higher margin areas like event technologies, audio-visual services, and corporate events.

2016 was a milestone year for GES, as we expanded our presence in the strategically important $2 billion U.S. audio-visual event production market, through the acquisition of ON Services in August.

Not only does this acquisition increase our mix of higher margin AV services revenue, but it also enhances our ability to gain share in the large and higher margin corporate event market where audio-visual services represent about half of the typical spend.

The team at ON Services is working very closely with the rest of the GES team to capture revenue synergy through cross-selling and cost synergies from in sourcing. For 2017, we expect to generate about $76 million to $79 million in revenue from U.S. audio-visual services, which represents an incremental $45 million to $48 million versus 2016.

And we expect the adjusted segment EBITDA margin on that revenue to approximate 20%, which is significantly accretive to our current EBITDA margin. We are excited about the long-term impact on growth and profitability that this acquisition brings.

Another highlights for the year was the launch of our data and registration platform in the Middle East and the U.S. markets. Event technology is another important element in our growth strategy as event organizers and corporate marketers increasingly leverage technology to drive improved ROI and enhance the overall event experience.

GES's data and registration platform is an end-to-end SaaS solution offering event management tools, attendee engagement solutions and data and analytic. With the U.S. launch in late 2015, the platform is now available in all four -- all of our major markets and our teams are working with more than 600 clients in over 42 countries.

Event technology services are an important part of our value proposition as we continue to position GES as the preferred global full service provider for live events. With an enhance set of services our teams are finding success in the marketplace by attracting new clients and expanding the scope of existing relationships.

For 2017, Snow Show in January longtime exhibition client Snow Sports Industries America expanded the scope of our work to include audio visual services, event combinations and data and registration services.

It is the perfect example of the power of our full service offering and just past weekend, GES helped to bring several projects to life for Super Bowl 51.

Working with 19 sponsor organizations and a variety of partners GES produced Houston live [indiscernible] experience for the Houston Super Bowl Committee including the provision of audio visual equipment, lighting, staging, sound systems and technical support.

We also partnered with media and experience design firm IDEAS on the event center piece attraction Future Flight, which is a drop tower that incorporates virtual reality to take guest on an extrusion through space tomorrows.

It concludes with a 64 per drop, vertical drop that transports riders back to earth landing on the 50 yard line of Houston's NRG Stadium. GES's involvement range from creating the graphic look, the experience supporting the Future Flight and Mission to Mars to organizing logistic and assisting with the development of the site.

Overall, I'm very pleased with the progress GES has made in 2016. With enhanced service offering and strong sales pipeline we are well positioned for continued growth in 2017. Now, let me switch gears to talk about our Travel & Recreation business.

Our Travel & Recreation Group also delivered fourth quarter result that were in line with our prior guidance and posted full year revenue growth of 36.7% and an adjusted EBITDA margin of 32.5%.

These results reflect the power of our Refresh, Build, Buy strategy and revenue management initiatives that are driving growth through a combination of acquisitions and strong organic growth.

Early in the year, we acquires an integrated Maligne Lake Tours and CATC, which increase our total room count by about 40% and added two more leading attractions to our portfolio. These attractions performed exceptionally well under our Travel & Recreation umbrella and exceeded our expectations for both revenue and EBITDA in 2016.

With the support of our revenue management, sales and marketing teams these businesses realized passenger volume growth of nearly 25% versus 2015. During the third quarter, we finished the renovation of our leading attraction Banff Gondola.

With significant upgrade to the mountain top dining, retail and interpretive experiences we now have a modern first class facility that is nearly as breath taking as the panoramic views it showcases.

We are receiving very positive feedback from our guest and our tour operator customers, along with higher passenger volumes and increased food and beverage spend. And we expect very strong year of growth for this marquee asset during 2017.

Despite the Gondola being affected by construction-related [indiscernible] for much of 2016, the Travel & Recreation Group realized strong organic revenue growth of 7.2%. Same store passenger count at our attractions were up 10.3% in total year-over-year with growth across all assets.

As I discussed last quarter, the Glacier Skywalk attraction was a standout revenue management success story. The introduction of a new combo ticket that pairs the skywalk with our highly popular Glacier Adventure Tour helps to drive a 26% increase in visitors to the skywalk and substantial growth in overall attraction revenue.

Our revenue management initiatives also had a positive effect on our hospitality properties. Same store RevPAR grew by 11.3% versus 2015, with increases across every property. Overall, same store occupancy for the year increased to 71.1% versus 67.4% in the prior year and we realized 7% growth in AER.

As part of our Refresh, Build, Buy efforts we also took steps to downsize certain lower margin lines of business during 2016 specifically packaged tours and transportation in order to free up capital and other resources for higher return opportunities like the Banff Gondola.

Before I wrap up the Travel & Recreation discussion, I'd like to provide an update on two important events that occurred at the end of 2016. The first is the fire that occurred at our Mount Royal Hotel on December 29th. As we previously announced our crisis management team reacted quickly to ensure all guests and employees were evacuated safely.

The fire was contained at the top floor and the roof however the property suffered extensive water damage throughout and has been closed indefinitely. Fortunately no one was injured and our losses are recovered by property and business interruption insurance.

We are actively working with our insurance carriers and the town event [ph] to assess our options for reopening the hotel, which will likely include I believe some level of upgrading of the property.

At this stage we expect the Mount Royal Hotel to remain closed for the duration of 2017, we will provide additional update as more information becomes available.

The second event which occurred also on December 29th is our acquisition of FlyOver Canada attraction, which is a virtual flight ride that showcases some of Canada's most all inspiring scenery.

The state-of-the-art multi-sentry experience combines motion seeding, spectacular media and specialized effects including wind, sense, mist to provide a true flying experience. FlyOver Canada is rated by TripAdvisor as the number one fun attraction in the robust Vancouver tourism market, which shows more than 9 million overnight visitors annually.

FlyOver has an ideal location at Canada place, which also serves as the port for Vancouver's crew ship terminal welcoming over 900,000 passengers each year and houses the East Building of the Vancouver Convention Center which hosts over 300 events annually.

Since opening in June 2013 this high margin attraction has been very strong year-over-year growth and has hosted more than 1.6 million visitors.

By bringing it into our Travel & Recreation Group we see opportunity to drive meaningful growth at the existing Vancouver location as well as opportunities to expand the concept into additional markets in future years.

For 2017 full year we expect it to contribute revenue of approximately $9 million to $10 million with an adjusted segment EBITDA margin of about 55%. The FlyOver Canada acquisition along with the fully renovation -- remodel of Banff Gondola will be key growth catalyst for our Travel & Recreation Group in 2017.

Additionally we expect continued gains from our revenue maximization efforts and favorable industry trends. These factors should more than offset expected declines from the Mount Royal Hotel closure and the packaged tours downsizing.

In summary 2016 was a year of great progress and growth for the Travel & Recreation Group, and we're poised to continue that growth in 2017. And now I'd like to turn it over to Ellen to provide more color on our financials. Ellen..

Thanks, Steve. As Steve mentioned earlier, our results for the fourth quarter were in line with our prior guidance.

Our consolidated revenue increased 1.9%, primarily reflecting additional revenue from the acquisition of ON Services and underlying growth of both GES and Travel & Recreation Group, which more than offset negative show rotation revenue of about $15 million and a $7.5 million unfavorable impact from exchange rate variances.

The acquisitions of CATC and Maligne Lake Tours, which were seasonally closed had a combined adjustment segment operating loss of $3.1 million for the fourth quarter, primarily as a result of that loss, we experienced a decrease in adjusted segment operating income and income before other items versus the 2015 fourth quarter.

For the full year our income before other items was $2.38 per share on revenue of $1.2 billion, adjusted segment EBITDA of $130.2 million and adjusted segment operating income of $87.7 million.

As a reminder, by definition our income before other items, adjusted segment EBITDA and adjusted segment operating income exclude restructuring and impairment charges as well as acquisition, transaction related and integration costs. A reconciliation of these non-GAAP measures to net income can be found in table two of the earnings press release.

As compared to 2015 our full year income before other items, increased by $0.92 per share or 63%, primarily due to an increase in adjusted segment operating income at both business groups, partially offset by an increasing corporate expenses, driven largely by higher accruals for performance-based incentives.

Consolidated revenue increased 10.6% or $115.9 million, adjusted segment EBITDA increased $39.6 million or 43.8% and adjusted segment operating income increased by $32.2 million or 58%. Now moving on to the business group results, GES full year revenue was $1.1 billion, which was up 8% or $77.9 million versus 2015. Revenue from the U.S.

segment increased 14.6% or $105.5 million, primarily due to approximately $59 million from positive show rotations, $21.3 million through the ON Services acquisition, new business wins and continued base same-show growth.

Revenue from the International segment declined 8.9% or $24.1 million, primarily due to unfavorable currency translation of $22.6 million and negative show rotation of about $7 million which were mostly offset by new business wins.

GES's full year adjusted segment EBITDA was $80.4 million up $25.6 million from 2015 and adjusted segment operating income increased by $23.1 million to $58.8 million, primarily reflecting increased revenue and higher operating leverage.

We realized flow through of about 30% of GES's revenue growth which led to a margin improvement of 200 basis points versus 2015. U.S. adjusted segment operating income increased $26.1 million, primarily driven by higher revenue and the strong operating leverage that exist within that business.

International adjusted segment operating income decreased $3 million, primarily due to negative show rotations, unfavorable currency translation and investments in personnel and asset to support continued growth of the business. The Travel & Recreation Group posted full year revenue of $153.4 million, up 36.7% or $41.2 million versus 2015.

Acquisitions and continued organic growth across the majority of our attractions and all hospitality assets were the key drivers of the results.

The acquisitions of Maligne Lake Tours and CATC contributed $34.3 million in revenue, while the acquisition of FlyOver Canada, which we completed on December 29th, had a negligible impact on full year revenue.

Organic growth which excludes the impact of acquisitions and exchange rate variances accounted for $8.1 million of the revenue increase, it was driven mainly by very strong growth across our higher margin attractions and hospitality assets.

On an organic basis, hospitality revenue grew 13.6% and interactions grew 9.4% driven by -- both by price and volume increases. Travel & Recreation Group's full year adjusted segment EBTIDA was $49.8 million, up $14 million or 39.3% from 2015. And adjusted segment operating income was 36.9 million, up $9.1 million or 32.6% from 2015.

These increases primarily reflect higher revenue from this high margin business. The full year adjusted segment operating margin for the Travel & Recreation Group was 24% and the adjusted segment EBITDA margin was 32.5%. Now I'll cover some cash flow and balance sheet items before discussing 2017 guidance.

Viad's consolidated cash flow from operations was $99.6 million for the 2016 full year, up from $60.3 million in 2015, primarily due to higher income and favorable working capital. And capital expenditures totaled $49.4 million, up from $29.8 million in 2015 primarily driven by the Banff Gondola renovations.

At December 31st, our cash and cash equivalents totaled $20.9 million, debt was $250.7 million and our debt-to-capital ratio was 40.4%. Now moving on to guidance, for the first quarter we're expecting income per share of $0.11 to $0.21, as compared to a loss before other items of $0.30 in the 2016 quarter.

We expect this growth to be driven primarily positive show rotation and underlying growth at GES. For GES we expect first quarter revenue to increase by approximately $64 million to $74 million from the 2016 quarter. With an adjusted segment operating income increased at approximately $18 million to $20 million.

This growth reflects positive show rotation revenue of about $50 million, incremental revenue from the ON Services acquisition of $13.5 million to $15.5 million and continued growth of the underlying business, partially offset by a revenue decline of $5 million due to unfavorable exchange rate variances.

Travel & Recreation Group revenue is expected to increase by $1.3 million to $2.8 million during the seasonally slow first quarter with a decline in operating results of $3 million to $4.5 million.

The revenue increase primarily reflects the reopening of Banff Gondola, which was closed for renovations during the 2016 first quarter and an incremental $1 million to $2 million from the acquisition of FlyOver Canada, partially offset by the closure of the Mount Royal Hotel and lower revenue from packaged tours.

As we complete the rationalization of that lower margins business. The increased operating loss primarily reflects an incremental seasonal operating loss of approximately $3 million from CATC, which was acquired towards the end of the 2016 first quarter.

For the 2017 full year we expect consolidated revenue to increase by approximately 5% from 2016, with an increase in adjusted segment EBITDA of approximately $14.5 million to $18.5 million. Depreciation and amortization expense is expected to increase by $11 million to $13 million primarily as a result of the acquisitions completed during 2016.

Adjusted segment operating income is expected to be in the range of $89.5 million to $93.5 million as compared to $87.7 million in 2016.

This guidance anticipate that exchange rate variances will have a negative impact of about $23 million on consolidate revenue, $2.5 million in consolidated segment operating income and about $0.08 on income for other items per share. These impacts assumes exchange rate of $0.74 for the Canadian dollar and $1.23 for the British pound.

A one-time change in the Canadian dollar will affect our full year revenue by approximately $2 million, and a one-time change in the British pound would affect our full year of revenue by $1 million to $1.5 million.

For GES we expect full year revenue to grow at a mid-single-digit rate from 2016 with growth in adjusted segment EBITDA of about $8.5 million to $11.5 million.

The year-over-year growth in revenue and EBITDA is expected to be driven primarily by incremental contributions from the acquisition of ON Services and continued growth in the underlying business, partially offset by negative show rotation revenue of about $20 million and unfavorable exchange rate variances of about $20 million in revenue.

For our Travel & Recreation Group we expect full year revenue to grow at a mid-single-digit rate from 2016 with an increase in adjusted segment EBITDA of about $5 million to $7 million. There are several significant year-over-year exchanges affecting growth rates for the Travel & Recreation business in 2017.

First the 2016 acquisitions of FlyOver Canada and CATC are expected to contribute incremental revenue of $10 million to $12 million mostly from FlyOver Canada as we own CATC during the entirety of its operating season last year.

As I mentioned earlier we'll be picking up an additional seasonal operating loss from CATC of about $3 million during the first quarter. Including that loss these acquisitions combined are expected to contribute incremental EBITDA of $2 million to $3.5 million in 2017.

Second we expect the revenue reduction of about $13 million from packaged tours as we complete the rationalization of that lower margin line of business. There is an additional decline of about $6 million in revenues expected from as a result of the closure of Mount Royal hotel due to the fire damage.

As Steve mentioned earlier it's still too early to predict how long it will take to reopen hotel so our guidance at this point assume the hotel remains close for the entire year.

And so as we expect these declines to be offset by strong growth across our other travel and recreation assets, particularly the Banff Gondola, which is now fully reopened after undergoing major renovations during much of 2016.

Our full year cash flow from operations is expected to be in the range of $110 million to $120 million and capital expenditures are expected to be about $40 million to $48 million.

Please note this CapEx guidance does not include any capital that will be required to reopen the Mount Royal Hotel nor does our guidance include any insurance or coverage for either property damage or business interruptions. We will provide an update on Mount Royal fire related matters during our next quarterly earnings conference call.

Additional 2017 guidance can be found in the earnings press release. And Steve back to you..

Thanks, Ellen. In closing I'm very proud of our accomplishments in 2016 and excited about our strategic direction and the progress we're making to deliver strong shareholder value. In early 2014 we laid out our growth strategy centered around enhancing shareholder value driven by improving growth and profitability at both business groups.

Over the past three years, we've made significant progress against our strategic goals. Our efforts have led to the cumulative revenue increase of about 26% with a 350 basis points improvement in adjusted segment EBITDA margins since 2013. And our income per share before other items has more than doubled.

Through that same time we've returned almost $70 million to shareholders through dividends and share repurchases and we acquired eight leading businesses that strengthened both of our business groups.

We are in a much stronger position today than we were three short years ago and we are well positioned to drive continued growth and enhance shareholder value in 2017 and beyond. I want to thank the entire Viad team for driving strong results and for their commitments to our strategy. And with that we will open up the call for questions.

Shane can you please open up the call?.

Thank you. We will now begin the question-and-answer session of today's conference. [Operator Instructions]. First question comes from John Healy of Northcoast Research. John your line is now open..

Hi thank you, congrats on another strong year guys. Wanted to ask just about the AV business. Steve I think you mentioned about $30 million of growth in the business year-over-year in 2017.

How much of that is kind of acquired and how much of that is kind of organic to the business? And then secondly I know that business kind of layers in over a number of years if you're successful with it, can you talk to maybe how penetrated you are with the client base in terms of getting them exposure and competing for audio-visual contracts when some of the show contracts come up for renewal?.

Sure John and thanks for the question. So first off we believe that in 2017 we'll have an incremental $45 million to $48 million over 2016. The bulk of that will be and that's going to the U.S. only John. The bulk of that is basically from acquisition.

You'll see a little bit of growth in there, but most of it is because we acquired ON Services in August of 2016. Your second portion of the question is around how penetrated are we? Right now our penetration level is extremely low both in terms of our existing customer base as well as in the total market. So in the U.S.

market the $2 billion market and obviously we have a small portion of that. So there is lots of room for us to continue to grow over the coming years..

Okay, no that's great.

And when you look at kind a capital allocation for 2017, what is the acquisition pipeline look like is it reasonable to expect that we'll see similar pace of acquisitions that we saw in 2016?.

We continue to have a strong acquisition pipeline, primarily for GES, primarily focused around audio-visual, around event technologies, these are our two primary focuses. So we have an active pipeline, we continue to work those and look for the deal that make the most sense for us both financially and cultural fit and strategically.

We want to make sure that we get the right acquisition. So for both businesses strong pipelines and we continue to work through those opportunities..

Great. And then just last question, when I think about show rotation for the year, I think you guys highlighted about $15 million or $20 million I want to say in terms of revenue headwind.

How much profit was lost because of the share rotation? Is there a way quantify that for '17?.

Yes, I think you see the same John. Whenever we have incremental revenue you see relatively strong flow through around 20%..

Yes and I would say in the rotation quarters which is really quarter one with $50 million add in quarter two $80 million out it's about 30%..

30%?.

Yes..

Okay. Great, thank you so much..

Yes thanks John..

Our next question comes from Marco Jamie Yacoub [ph] of Mobile Partners. Your line is now open..

Hay guys congratulations on a fantastic year..

Thanks very much..

Couple of questions from me, you guys talked about the $6 million revenue hit from the fire and hotel being closed.

What do you think the impact is on the EBITDA line?.

Well I think that's obviously the closure for the Mount Royal will be the entire year. And we think that I'll ask Ellen to talk a little bit about the EBITDA impact from that one..

Yes I would say the EBITDA impact on that's about 30%..

Okay.

So about $2 million and you guys anticipate getting reimbursed from the insurance covers?.

Yes, we have both property and business interruption insurance. And we're working with the carriers now to sort that out. Given that the fire just happened on the 29th we're still sorting through the current situation and working with the insurance companies to file a claim..

Got it. But apples-to-apples, your guidance really should be $2 million higher when you adjust for the fire..

Correct..

Got it. And then I just wanted to also ask, so you guys are -- if I add back that $2 million right and you have the $3 million benefit from the two acquisitions. You're starting out like call it 53 and midpoint of your guidance is 58.

You guys have previously stated $3 million to $4 million of revenue from the Gondola which I would anticipate is pretty high margin flow through. So I'm a little curious as to the reconciliation of the bulk of the -- I guess the million plus of growth.

And I mean are you just being conservative, or do you see pressures on some of your other attractions? Can you just kind a help me reconcile that?.

We think that the 2017 is a strong year for visitation of the parks. We think that there will be obviously we've talked about previously the growth from the Gondola we've talked about the growth of our other initiatives like revenue management.

And we also have a little bit of a tailwind, because in 2016 in the first quarter we acquired CATC which had a loss for the first quarter when it's not operating. So that's the part when you are comparing year-over-year that you left out from that calculation..

It's about $3 million more in cost in '17 because we didn't purchase it until mid-March..

Right, but I'm saying the net of the CATC plus the FlyOver is $3 million. So you're talking about when you add back the Mount Royal $2 million hit.

You're talking about a delta of about $5 million which you have already previously said $3 million to $4 million of incremental revenues, which should be pretty high flow through I would think on the Gondola. So that's not giving a whole a lot of growth for the remaining attractions and lodging assets.

But given kind of your trajectory from 2016 I would anticipate you guys could potentially be in a position of strength. I don't know if I'm missing something or perhaps there is some conservatism..

Yes we think that we're in a position of strength. We think that as I mentioned before visitation to our geographies has been a continued decline like we saw in 2016. So we believe strongly and the renovations to the Gondola and the plans that we've set forth for that as well as the acquisition around FlyOver Canada..

Okay. And then just lastly on the CapEx, looks a little higher than kind of your normalized maintenance levels on both sides of the business.

Is there -- has that changed at all or is there some growth that's embedded in those numbers?.

Are you talking '15 or '17..

'17..

'17 for Travel and Rec. we do have fairly large project in there for some renovations at our Glacier Discovery Center.

For GES, it's really a Marriott [ph] thing it is a little bit higher than our normal 2% of revenue, there are some things for our entertainment side of the business that we're investing in next year, nothing really jumps out for me well that's [indiscernible] is added on that as well, which is higher than 2% of revenue..

Great, alright guys keep up the good work. Thanks so much for answering my questions and maybe we could do an Analyst Day out in Canada. Vancouver, FlyOver..

We'll work on that..

That's good..

Okay guys, take care..

Thank you, Jim. Shane, are there any other questions..

Our next question comes from Marco Rodriguez of Stonegate Capital Markets. Marco, your line is now open..

Hello, good afternoon guys. Thank you for taking my questions. I have a couple of follow-ups on prior questions, specifically here on the AV side.

Can you just talk a little bit more in detail, I mean how are you guys going to be going about the marking of this service to your existing clients? And then also penetrate into additional new clients that don't necessarily know you have this type of service?.

Well, thanks Marco. We have two main sales team within the GES business prior to the acquisition, one of them has focused on our exhibition or our show organizer clients, they will continue to sell audio-visual with the support of the ON Service team that we recently acquired.

And obviously we have a high penetration a large market share in the markets that we serve. And so that's more about the cross-selling opportunity that we have there, so we're leveraging the existing sales team and marketing it through that team.

The corporate event side, this is where ON Services actually had the strength, the majority of their revenue comes from corporate events already. And we have a team that sells corporate events specifically. So there are two of them are actually getting together and that combined group will be our sales force going forward.

So we are very excited about it, this has been a strategically important thing for us to do and we believe that it will have some strong growth going forward..

Got you.

And I know you gave some specific numbers around the incremental revenue, but I was just kind of wondering longer term maybe three years out or so, is there some sort of a target that we might be thinking about as far as your revenue as a percent that might be coming from AV and these are the types of service like a data registration?.

Yes we've talked about our strategic goal of having more than $250 million of revenue coming from AV as well as from event technology, that's the direction we're headed in and we continue to look for opportunities in order to grow organically, but also through acquisition..

Got it, that's helpful, thanks. And then shifting gears here to the T&R side, the Mount Royal hotel, I just wanted to make sure I was understanding things correctly.

So you are going to be receiving insurance that's going to cover all losses, so am I wrong in thinking that there is no impact to the P&L?.

Well, for our 2017 guidance we don't have it included in what we stated, because we have not finished or started filling the paper work and the procedures with our insurance company. So, in the future we'll understand what property damages look like as well as business interruption..

And it will depend on timing of insurance postings as well and we will be recording the revenues. So, it yes so it is all going to be covered by either property insurance or business interruptions, but it's a lot of noise so we took it out of our full year guidance..

I see, got it, okay.

And then maybe if you could talk a little bit about the process you guys are kind of taking to evaluate the property, I know you in your prepared remarks you talked about it being closed for fiscal 2017, what is the planning sort of looking like if you can maybe put some timelines on as far as when you're think you might be able to make decisions as far as rebuilding or what?.

Well we're working now with the insurance company and with the town event. We all three have divested interest in making sure that we're able to rebuild, renovate the property as soon as possible. However, we -- it's too early for us right now to comment on the timeline or the investments that we'll be making..

Okay.

Do you need input from the other individual insurance company in the Town of Banff or you are just wanting to include them because of the location?.

Well certainly the Town of Banff is a partner of ours. This is National Park property. The land is part of Banff National Park. And so the town and Parks Canada has a voice in what happened. So, we're working with those partners to make sure that we have the best solution..

Got you. Great thanks a lot guys. Appreciate your time..

Thanks, Mark. Appreciate it..

Our next question comes from Steve O'Hara of Sidoti. Steve, your line is now open..

Yes, hi. Good afternoon..

Afternoon..

I am just curious maybe two things.

Just after adding the AV last year, may be where you are or where you think you're in terms of portfolio of assets you need within the offering to kind of fill that out as best as it can be? And then my thinking that any change to the -- maybe how I guess, in terms of the property in Canada that shutdown, can you talk about it maybe how it was utilized less efficiently than maybe you would like and maybe, if what opportunities there could be to improve that?.

Sure. On the -- your first part which was around the audio-visual. We're thrilled with the acquisition of ON Services, it's a meaningful size business. We do believe that there are more opportunities for us to build out the scale of the business. There are other geographies that we're not in today that we need to fill out both here in the U.S.

and in international locations. So, as we've talked before about our acquisition strategy, it's still focused around audio-visual and event technologies. So both of those are areas that we will see building out primarily through acquisition and obviously through growth in some of the cross-selling that we've talked about.

Your second question was around the Mount Royal Hotel and the fire that happened there. We -- while this is a tragic situation that happened and we're very thankful that all 297 guests and employees made it out safely and I want to thank the Banff Fire Department and our team for responding the way that they did.

This also has a silver lining which meaning it allows us to renovate and improve the overall property as we rebuild. And obviously, we believe that can lead to higher ADRs and higher occupancy rates throughout the year. So, as we look at what our rebuilding options look like, we'll have that in mind as we start planning that out..

Okay, thank you very much..

Thanks, Steve..

Our next question comes from Peter Rabover of Artko Capital. Peter your line is now open..

Hey guys. Good job. So, just quick question, how do you guys feel comfortable about your debt levels at this point. Do you guys have a target or I guess if you have an active acquisition pipeline as you said.

What levels are you comfortable with at this point?.

Yes, thanks for the question, Peter. Right now, we feel like we have some room to continue down our growth strategy both organically and through actuations and you mentioned kind of the pipeline that we. We made some significant progress in 2016.

We have active pipelines going into '17 and we feel comfortable moving forward on some of those acquisitions. I don't know Ellen, if you want to talk a little bit about that..

Yes, we do have room on our current credit facility we are at 250 at year-end, our facility is 300 and we have $100 million at quarter end as well..

Okay. I understand that, that's what's available to you but what -- is that your I guess target as far as the debt levels or do you have like a net-debt-to-EBITDA sort of target..

As far as our leverage ratio while we're doing acquisitions we can go to three times and we're comfortable with that..

Okay great. Not a problem for me, you guys are doing great, I just wanted to kind of make sure how you guys are thinking about it. Thanks so much and appreciate it..

Yeah thanks Peter..

Thank you..

Excuse me speakers. We show no questions in queue at this time. [Operator Instructions]. Excuse me speakers, there is no questions in queue at this time..

All right, thanks Shane. Thanks everybody for your questions and your interest in Viad. We look forward to speaking with you next quarter. Thanks a lot bye-bye..

That concludes today's conference. Thank you for your participation. You may now disconnect..