Dear Fellow Shareholders,

I am happy to report that 2017 marked another year of solid progress, with both business units delivering strong results. We focused on driving continued organic growth, integrating our recent acquisitions, and making select investments that will accelerate our growth and profitability in future years. Our steadfast focus on our vision has led to a cumulative revenue increase of 37 percent, with a 440 basis point improvement in adjusted segment EBITDA margin over the past four years. During that same time, we have strengthened both of our business units through the acquisition of 11 leading businesses and returned about $77 million to shareholders through dividends and share repurchases.

OUR 2017 PERFORMANCE

Through a combination of organic growth and contributions from recent acquisitions, we delivered a 10.1 percent increase in income per share before other items in 2017. Our revenue increased 8.5 percent to $1.3 billion and our adjusted segment EBITDA increased 17.2 percent to $152.6 million. Our strong performance helped to drive an above market total shareholder return of 26.6 percent, as compared to 14.6 percent for the Russell 2000 Index. Overall, we are seeing solid business momentum and our teams are executing well.

GES HIGHLIGHTS

GES delivered revenue of $1.1 billion during 2017, up 7.4 percent from 2016, driven by continued business strength and contributions from our recent acquisitions. Adjusted segment EBITDA increased by $7.0 million to $87.4 million. Our growth during 2017 is particularly impressive considering the revenue headwind of about $37 million we faced from the combination of a low-margin contract that we did not renew, negative show rotation, and unfavorable exchange rate variances.

Our efforts to position GES as the preferred global, full-service provider for live events continue to fuel growth. With a robust set of offerings, our international segment delivered organic revenue growth of 16.3 percent during 2017, and we further strengthened our existing relationships with some of Europe’s leading event organizers with multi-year contract renewals. These renewals have a combined lifetime contract value of approximately $100 million and are proof of the strong, collaborative partnerships that we have built with our organizer clients. We are also seeing great success growing our revenue from corporate clients by leveraging our global capabilities to support their event program needs across the EMEA region.

In the United States, we saw continued solid base-same show revenue growth of 4.8 percent in 2017 and we continued to make progress integrating ON Services’ audio-visual production services into our mix of offerings. During 2017, we added audio-visual to our scope of services for a number of clients, and we were recently selected by the San Diego Convention Center to be its in-house preferred provider of audio-visual services and the exclusive provider of production rigging services starting in May 2018. We remain focused on driving synergies through ON Services and leveraging its capabilities to gain share in the large corporate event space.

Event technology also remains an important element of our growth strategy. As show organizers and corporate brand marketers increasingly leverage technology to drive improved ROI and an enhanced event experience, we are positioning GES to meet their current and future needs. During 2017, we strengthened our registration and data intelligence platform with the purchase of the Poken event engagement technology to deliver even more measurable event insights for organizers, exhibitors and event sponsors. Poken was a niche acquisition that is adding powerful capabilities to our data offering.

Overall, GES is well-positioned to continue to capitalize on the momentum we have created over the past four years. For 2018, we expect to drive continued strong underlying business growth that will help offset negative show rotation revenue of approximately $40 million. Our team remains focused on driving outstanding customer experiences that strengthen the core and accelerate growth in higher-margin adjacencies.

PURSUIT HIGHLIGHTS

Pursuit delivered another year of strong growth in 2017 driven by our “Refresh, Build, Buy” strategy and revenue management initiatives. As compared to 2016, revenue grew by 13.4 percent to $173.9 million and adjusted segment EBITDA increased $15.4 million to $65.2 million. We saw significant improvement in our key performance indicators. At our attractions, same-store passengers increased 12.5 percent with revenue per passenger up 27.3 percent. At our hospitality assets, same-store RevPAR increased 6.8 percent. These strong results more than offset revenue declines from our previously announced downsizing of the lower-margin package tours line of business and the fire-related closure of the Mount Royal Hotel.

Our recently refreshed Banff Gondola delivered results that far exceeded our expectations. During 2017, revenue grew 57 percent over the pre-renovation period, with passenger growth of 20 percent and a 31 percent increase in revenue per passenger from ticket sales, retail, and dining. Following our success at the Banff Gondola, we completed similar renovations to drive an enhanced guest experience and stronger revenue growth from our dining services at the Glacier Discovery Center, which provides ticketing and guest services for our Glacier Adventure Tour and Glacier Skywalk attractions.

Another major ‘Refresh’ project currently in progress is the reconstruction of the Mount Royal Hotel, which was damaged by fire at the end of 2016. Utilizing insurance proceeds of about $30 million and an additional $5 million investment, we are undertaking a complete renovation of the property. With its ideal location in downtown Banff and an enhanced guest experience, we will be able to drive stronger RevPAR and returns from this asset. The project is progressing well, and we are on pace to re-open the hotel by mid-year 2018.

A current ‘Build’ initiative for Pursuit is the development of an RV park and cabin village in West Glacier on approximately 100 acres of undeveloped land that we acquired as a part of an acquisition in 2014. This new development will have approximately 100 RV slips and 20 guest cabins. We expect to have the RV park at least partially online during the 2019 season.

On the ‘Buy’ side of our strategy, our late-2016 acquisition of the FlyOver Canada attraction in Vancouver is performing well and meeting our expectations. We are having success driving growth in passengers and effective ticket prices through our revenue management, sales and marketing efforts. We are excited to expand this high-margin concept into Iceland in 2019 and are making good progress with that effort.

Overall, 2017 was a year of significant accomplishments and growth for Pursuit. We expect continued growth in 2018 and beyond as we continue to execute our strategy to scale the Pursuit business by growing and enhancing our high-margin attraction and hospitality portfolio.

CLOSING

I am very proud of our accomplishments in 2017 and excited about our strategic direction and the progress we are making. The investments we have made are providing exciting avenues of growth with enhanced profitability. Our teams remain focused on delivering excellent service for our customers and guests, driving strong results for our shareholders, and executing our strategic goals, to continue enhancing long-term shareholder value.

I want to thank Viad’s Board of Directors and the entire Viad team for their contributions to our success. I also want to thank you, my fellow shareholders, for your investment in our company and confidence in our strategy.

Thank you for your interest in Viad.