##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2011
 or
 o
    
    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
    
    (I.R.S. Employer Identification No.)incorporation or organization)1850 North Central Avenue, Suite 800Phoenix, Arizona
    
    85004-4545(Address of principal executive offices)
    
    (Zip Code)
 (602) 207-4000  (Registrants telephone number, including area code)
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Small reporting company o(Do not check if a smaller reporting company)
 o þ




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TABLE OF CONTENTS  PART IFINANCIAL INFORMATIONItem 1. Financial StatementsCONDENSED CONSOLIDATED BALANCE SHEETSCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMECONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. Controls and ProceduresPART IIOTHER INFORMATIONItem 1A. Risk FactorsItem 2. Unregistered Sales of Equity Securities and Use of ProceedsItem 6. ExhibitsSIGNATURESExhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2    Table of Contents  
 PART IFINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements.
 VIAD CORP

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 March 31, 2011
    
    
    December 31, 2010(in thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    148,356
    
    
    $
    145,841Accounts receivable, net of allowance for doubtful accounts
of $1,376 and $1,172, respectively
    
    
    82,272
    
    
    
    47,187Inventories
    
    
    33,444
    
    
    
    38,670Deferred income taxes
    
    
    17,967
    
    
    
    22,057Other current assets
    
    
    20,748
    
    
    
    17,160Total current assets
    
    
    302,787
    
    
    
    270,915Property and equipment, net
    
    
    159,460
    
    
    
    149,346Other investments and assets
    
    
    31,642
    
    
    
    31,363Deferred income taxes
    
    
    34,386
    
    
    
    35,875Goodwill
    
    
    130,845
    
    
    
    127,441Other intangible assets, net
    
    
    1,777
    
    
    
    1,563Total Assets
    
    $
    660,897
    
    
    $
    616,503LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    78,029
    
    
    $
    47,933Other current liabilities
    
    
    99,595
    
    
    
    96,749Current portion of long-term debt and capital lease obligations
    
    
    6,486
    
    
    
    6,639Total current liabilities
    
    
    184,110
    
    
    
    151,321Long-term debt and capital lease obligations
    
    
    2,409
    
    
    
    2,438Pension and postretirement benefits
    
    
    33,262
    
    
    
    33,008Other deferred items and liabilities
    
    
    41,599
    
    
    
    43,025Total liabilities
    
    
    261,380
    
    
    
    229,792Commitments and contingencies (Note 15)Stockholders equity:Viad Corp stockholders equity:Common stock, $1.50 par value, 200,000,000 shares
authorized, 24,934,981 shares issued
    
    
    37,402
    
    
    
    37,402Additional capital
    
    
    597,491
    
    
    
    606,902Retained deficit
    
    
    (10,253
    )
    
    
    (19,229
    )Unearned employee benefits and other
    
    
    (4,182
    )
    
    
    (4,433
    )Accumulated other comprehensive income (loss):Unrealized gains on investments
    
    
    340
    
    
    
    282Cumulative foreign currency translation adjustments
    
    
    42,532
    
    
    
    38,979Unrecognized net actuarial loss and prior service credit
    
    
    (10,404
    )
    
    
    (10,410
    )Common stock in treasury, at cost, 4,561,174 and 4,710,988
shares, respectively
    
    
    (260,995
    )
    
    
    (270,534
    )Total Viad Corp stockholders equity
    
    
    391,931
    
    
    
    378,959Noncontrolling interest
    
    
    7,586
    
    
    
    7,752Total stockholders equity
    
    
    399,517
    
    
    
    386,711Total Liabilities and Stockholders Equity
    
    $
    660,897
    
    
    $
    616,503
   Page 2




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##### Table of Contents



VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 Three months ended March 31,2011
    
    
    2010(in thousands, except per share data)Revenues:Convention and event services
    
    $
    234,487
    
    
    $
    178,759Exhibits and environments
    
    
    49,851
    
    
    
    38,181Travel and recreation services
    
    
    5,760
    
    
    
    7,413Total revenues
    
    
    290,098
    
    
    
    224,353Costs and expenses:Costs of services
    
    
    224,799
    
    
    
    180,839Costs of products sold
    
    
    48,040
    
    
    
    43,315Corporate activities
    
    
    1,271
    
    
    
    644Interest income
    
    
    (214
    )
    
    
    (96
    )Interest expense
    
    
    412
    
    
    
    493Restructuring charges
    
    
    269
    
    
    
    2,053Total costs and expenses
    
    
    274,577
    
    
    
    227,248Income (loss) before income taxes
    
    
    15,521
    
    
    
    (2,895
    )Income tax expense
    
    
    5,900
    
    
    
    208Net income (loss)
    
    
    9,621
    
    
    
    (3,103
    )Net loss attributable to noncontrolling interest
    
    
    166
    
    
    
    121Net income (loss) attributable to Viad
    
    $
    9,787
    
    
    $
    (2,982
    )Diluted income (loss) per common shareNet income (loss) attributable to Viad common stockholders
    
    $
    0.48
    
    
    $
    (0.15
    )Weighted-average outstanding and potentially dilutive
common shares
    
    
    20,080
    
    
    
    20,051Basic income (loss) per common shareNet income (loss) attributable to Viad common stockholders
    
    $
    0.48
    
    
    $
    (0.15
    )Weighted-average outstanding common shares
    
    
    19,778
    
    
    
    20,051Dividends declared per common share
    
    $
    0.04
    
    
    $
    0.04
   Page 3




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VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 Three months ended March 31,2011
    
    
    2010(in thousands)Net income (loss)
    
    $
    9,621
    
    
    $
    (3,103
    )Other comprehensive income:Holding gains arising during the period, net of tax
    
    
    58
    
    
    
    59Unrealized foreign currency translation adjustments, net of tax
    
    
    3,553
    
    
    
    4,046Net actuarial loss, net of tax
    
    
    204
    
    
    
    (1,554
    )Prior service credit, net of tax
    
    
    (198
    )
    
    
    (120
    )Total other comprehensive income
    
    
    3,617
    
    
    
    2,431Comprehensive income (loss)
    
    
    13,238
    
    
    
    (672
    )Comprehensive loss attributable to noncontrolling interest
    
    
    166
    
    
    
    121Comprehensive income (loss) attributable to Viad
    
    $
    13,404
    
    
    $
    (551
    )
   Page 4




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##### Table of Contents



VIAD CORP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three months ended March 31,2011
    
    
    2010(in thousands)Cash flows from operating activities:Net income (loss)
    
    $
    9,621
    
    
    $
    (3,103
    )Adjustments to reconcile net income (loss) to net cash provided by
operating activities:Depreciation and amortization
    
    
    6,971
    
    
    
    6,804Deferred income taxes
    
    
    4,925
    
    
    
    3,141Restructuring charges
    
    
    269
    
    
    
    2,053Losses on dispositions of property and other assets
    
    
    6
    
    
    
    82Share-based compensation expense
    
    
    933
    
    
    
    820Excess tax benefit from share-based compensation arrangements
    
    
    (54
    )
    
    
    Other non-cash items, net
    
    
    1,050
    
    
    
    959Change in operating assets and liabilities:Receivables
    
    
    (35,587
    )
    
    
    (10,918
    )Inventories
    
    
    5,325
    
    
    
    8,452Accounts payable
    
    
    31,665
    
    
    
    8,183Restructuring liabilities
    
    
    (1,625
    )
    
    
    (3,051
    )Accrued compensation
    
    
    131
    
    
    
    2,594Customer deposits
    
    
    (2,461
    )
    
    
    (2,893
    )Income taxes payable
    
    
    663
    
    
    
    (5,237
    )Other assets and liabilities, net
    
    
    (1,488
    )
    
    
    (138
    )Net cash provided by operating activities
    
    
    20,344
    
    
    
    7,748Cash flows from investing activities:Capital expenditures
    
    
    (7,677
    )
    
    
    (5,030
    )Acquisition of business, net of cash acquired
    
    
    (10,496
    )
    
    
    Proceeds from dispositions of property and other assets
    
    
    224
    
    
    
    14,354Net cash provided by (used in) investing activities
    
    
    (17,949
    )
    
    
    9,324Cash flows from financing activities:Payments on debt and capital lease obligations
    
    
    (714
    )
    
    
    (1,489
    )Dividends paid on common stock
    
    
    (815
    )
    
    
    (822
    )Common stock purchased for treasury
    
    
    (668
    )
    
    
    (573
    )Excess tax benefit from share-based compensation arrangements
    
    
    54
    
    
    
    Proceeds from exercise of stock options
    
    
    163
    
    
    
    Net cash used in financing activities
    
    
    (1,980
    )
    
    
    (2,884
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    2,100
    
    
    
    503Net increase in cash and cash equivalents
    
    
    2,515
    
    
    
    14,691Cash and cash equivalents, beginning of year
    
    
    145,841
    
    
    
    116,342Cash and cash equivalents, end of period
    
    $
    148,356
    
    
    $
    131,033Supplemental disclosure of cash flow informationCash paid during the period for:Income taxes
    
    $
    3,500
    
    
    $
    1,634Interest
    
    $
    185
    
    
    $
    216Equipment acquired under capital leases
    
    $
    517
    
    
    $
    247
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VIAD CORP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Note 1. Basis of Preparation and Principles of Consolidation
      Note 2. Share-Based Compensation
  2011
    
    
    2010(in thousands)Stock options
    
    $
    147
    
    
    $
    113Restricted stock/performance-based restricted stock (PBRS)
    
    
    678
    
    
    
    675Restricted stock units/PBRS units
    
    
    43
    
    
    
    35Performance unit incentive plan (PUP)
    
    
    65
    
    
    
    (3
    )Total share-based compensation before income tax benefit
    
    
    933
    
    
    
    820Income tax benefit
    
    
    (331
    )
    
    
    (287
    )Total share-based compensation, net of income tax benefit
    
    $
    602
    
    
    $
    533
   Page 6




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Restricted Stock
    
    
    PBRSWeighted-Average
    
    
    
    
    
    
    Weighted-AverageGrant Date
    
    
    
    
    
    
    Grant DateShares
    
    
    Fair Value
    
    
    Shares
    
    
    Fair ValueBalance at January 1, 2011
    
    
    478,499
    
    
    $
    21.51
    
    
    
    18,830
    
    
    $
    33.02Granted
    
    
    170,700
    
    
    
    23.01
    
    
    
    
    
    
    
    Vested
    
    
    (89,312
    )
    
    
    31.29
    
    
    
    (18,414
    )
    
    
    33.42Forfeited
    
    
    (700
    )
    
    
    19.34
    
    
    
    
    
    
    
    Balance at March 31, 2011
    
    
    559,187
    
    
    
    20.41
    
    
    
    416
    
    
    
    15.36
   Restricted Stock Units
    
    
    PBRS Units
    
    
    PUP AwardsWeighted-Average
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    Weighted-AverageGrant Date
    
    
    
    
    
    
    Grant Date
    
    
    
    
    
    
    Grant DateUnits
    
    
    Fair Value
    
    
    Units
    
    
    Fair Value
    
    
    Units
    
    
    Fair ValueBalance at January 1, 2011
    
    
    26,050
    
    
    $
    17.18
    
    
    
    3,914
    
    
    $
    15.36
    
    
    
    102,960
    
    
    $
    33.81Granted
    
    
    12,550
    
    
    
    23.01
    
    
    
    
    
    
    
    
    
    
    
    94,300
    
    
    
    23.01Vested
    
    
    
    
    
    
    
    
    
    
    (1,958
    )
    
    
    15.36
    
    
    
    
    
    
    
    Cancelled
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (102,960
    )
    
    
    33.81Balance at March 31, 2011
    
    
    38,600
    
    
    
    19.07
    
    
    
    1,956
    
    
    
    15.36
    
    
    
    94,300
    
    
    
    23.01
    Weighted-Average
    
    
    OptionsShares
    
    
    Exercise Price
    
    
    ExercisableOptions outstanding at January 1, 2011
    
    
    763,794
    
    
    $
    23.38
    
    
    
    451,194Exercised
    
    
    (7,866
    )
    
    
    20.56Forfeited or expired
    
    
    (131,231
    )
    
    
    24.16Options outstanding at March 31, 2011
    
    
    624,697
    
    
    
    23.26
    
    
    
    418,118
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Note 3. Acquisition of Business
  (in thousands)Cash and cash equivalents
    
    $
    9Other current assets
    
    
    126Property and equipment
    
    
    8,750Goodwill
    
    
    1,331Other intangible assets
    
    
    400Total assets acquired
    
    
    10,616Customer deposits
    
    
    (99
    )Other current liabilities
    
    
    (12
    )Total liabilities acquired
    
    
    (111
    )Purchase price
    
    $
    10,505
  Note 4. Inventories
  March 31,
    
    
    December 31,2011
    
    
    2010(in thousands)Raw materials
    
    $
    17,176
    
    
    $
    18,488Work in process
    
    
    16,268
    
    
    
    20,182Inventories
    
    $
    33,444
    
    
    $
    38,670
 Note 5. Property and Equipment
  March 31,
    
    
    December 31,2011
    
    
    2010(in thousands)Land
    
    $
    11,034
    
    
    $
    9,139Buildings and leasehold improvements
    
    
    97,949
    
    
    
    89,945Equipment and other
    
    
    307,580
    
    
    
    299,558416,563
    
    
    
    398,642Accumulated depreciation
    
    
    (257,103
    )
    
    
    (249,296
    )Property and equipment, net
    
    $
    159,460
    
    
    $
    149,346
    Page 8




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Note 6. Goodwill and Other Intangible Assets
  Marketing &Marketing &
    
    
    Events
    
    
    Travel &Events U.S.
    
    
    International
    
    
    Recreation Group
    
    
    Total(in thousands)Balance at January 1, 2011
    
    $
    62,686
    
    
    $
    22,455
    
    
    $
    42,300
    
    
    $
    127,441Business acquisition
    
    
    
    
    
    
    
    
    
    
    1,331
    
    
    
    1,331Foreign currency translation adjustments
    
    
    
    
    
    
    644
    
    
    
    1,429
    
    
    
    2,073Balance at March 31, 2011
    
    $
    62,686
    
    
    $
    23,099
    
    
    $
    45,060
    
    
    $
    130,845
  Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingValue
    
    
    Amortization
    
    
    Value(in thousands)Amortized intangible assets:Customer contracts and relationships
    
    $
    2,533
    
    
    $
    (1,298
    )
    
    $
    1,235Proprietary technology
    
    
    524
    
    
    
    (477
    )
    
    
    47Design libraries
    
    
    175
    
    
    
    (131
    )
    
    
    44Other
    
    
    171
    
    
    
    (120
    )
    
    
    513,403
    
    
    
    (2,026
    )
    
    
    1,377Unamortized intangible assets:Business license
    
    
    400
    
    
    
    
    
    
    
    400Total
    
    $
    3,803
    
    
    $
    (2,026
    )
    
    $
    1,777
  Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingValue
    
    
    Amortization
    
    
    Value(in thousands)Customer contracts and relationships
    
    $
    2,506
    
    
    $
    (1,135
    )
    
    $
    1,371Proprietary technology
    
    
    517
    
    
    
    (448
    )
    
    
    69Design libraries
    
    
    175
    
    
    
    (110
    )
    
    
    65Other
    
    
    166
    
    
    
    (108
    )
    
    
    58$
    3,364
    
    
    $
    (1,801
    )
    
    $
    1,563
  (in thousands)2011
    
    $
    5292012
    
    $
    3602013
    
    $
    3502014
    
    $
    1192015
    
    $
    19
  Page 9




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Note 7. Accrued Liabilities and Other
  March 31,
    
    
    December 31,2011
    
    
    2010(in thousands)Continuing operations:Customer deposits
    
    $
    41,049
    
    
    $
    43,411Accrued compensation
    
    
    18,605
    
    
    
    17,599Self-insured liability accrual
    
    
    7,984
    
    
    
    8,278Accrued restructuring
    
    
    3,172
    
    
    
    4,272Accrued sales and use taxes
    
    
    2,542
    
    
    
    2,990Accrued foreign income taxes
    
    
    1,445
    
    
    
    2,852Accrued dividends
    
    
    834
    
    
    
    827Other
    
    
    21,848
    
    
    
    14,21197,479
    
    
    
    94,440Discontinued operations:Environmental remediation liabilities
    
    
    1,098
    
    
    
    1,124Self-insured liability accrual
    
    
    512
    
    
    
    552Other
    
    
    506
    
    
    
    6332,116
    
    
    
    2,309Total other current liabilities
    
    $
    99,595
    
    
    $
    96,749
  March 31,
    
    
    December 31,2011
    
    
    2010(in thousands)Continuing operations:Self-insured liability accrual
    
    $
    14,255
    
    
    $
    14,330Accrued compensation
    
    
    4,362
    
    
    
    5,129Accrued restructuring
    
    
    3,316
    
    
    
    3,724Foreign deferred tax liability
    
    
    1,598
    
    
    
    1,582Accrued income taxes
    
    
    111
    
    
    
    146Other
    
    
    3,824
    
    
    
    3,94527,466
    
    
    
    28,856Discontinued operations:Self-insured liability accrual
    
    
    6,834
    
    
    
    6,898Environmental remediation liabilities
    
    
    4,900
    
    
    
    4,953Accrued income taxes
    
    
    994
    
    
    
    987Other
    
    
    1,405
    
    
    
    1,33114,133
    
    
    
    14,169Total other deferred items and liabilities
    
    $
    41,599
    
    
    $
    43,025
 Note 8. Debt
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Note 9. Stockholders Equity
  Total Viad
    
    
    
    
    
    
    TotalStockholders
    
    
    Noncontrolling
    
    
    StockholdersEquity
    
    
    Interest
    
    
    Equity(in thousands)Balance at January 1, 2011
    
    $
    378,959
    
    
    $
    7,752
    
    
    $
    386,711Net income (loss)
    
    
    9,787
    
    
    
    (166
    )
    
    
    9,621Dividends on common stock
    
    
    (815
    )
    
    
    
    
    
    
    (815
    )Common stock purchased for treasury
    
    
    (668
    )
    
    
    
    
    
    
    (668
    )Employee benefit plans
    
    
    790
    
    
    
    
    
    
    
    790Unrealized foreign currency translation adjustment
    
    
    3,553
    
    
    
    
    
    
    
    3,553Unrealized gain on investments
    
    
    58
    
    
    
    
    
    
    
    58Prior service credit and net actuarial loss
    
    
    6
    
    
    
    
    
    
    
    6ESOP allocation adjustment
    
    
    250
    
    
    
    
    
    
    
    250Other
    
    
    11
    
    
    
    
    
    
    
    11Balance at March 31, 2011
    
    $
    391,931
    
    
    $
    7,586
    
    
    $
    399,517
  Total Viad
    
    
    
    
    
    
    TotalStockholders
    
    
    Noncontrolling
    
    
    StockholdersEquity
    
    
    Interest
    
    
    Equity(in thousands)Balance at January 1, 2010
    
    $
    377,515
    
    
    $
    7,116
    
    
    $
    384,631Net loss
    
    
    (2,982
    )
    
    
    (121
    )
    
    
    (3,103
    )Dividends on common stock
    
    
    (822
    )
    
    
    
    
    
    
    (822
    )Common stock purchased for treasury
    
    
    (573
    )
    
    
    
    
    
    
    (573
    )Employee benefit plans
    
    
    752
    
    
    
    
    
    
    
    752Unrealized foreign currency translation adjustment
    
    
    4,046
    
    
    
    
    
    
    
    4,046Unrealized gain on investments
    
    
    59
    
    
    
    
    
    
    
    59Prior service credit and net actuarial loss
    
    
    (1,674
    )
    
    
    
    
    
    
    (1,674
    )ESOP allocation adjustment
    
    
    250
    
    
    
    
    
    
    
    250Other
    
    
    9
    
    
    
    
    
    
    
    9Balance at March 31, 2010
    
    $
    376,580
    
    
    $
    6,995
    
    
    $
    383,575
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Note 10. Fair Value Measurements
  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.
  Fair Value Measurements at March 31, 2011 UsingSignificantQuoted Prices
    
    
    Other
    
    
    Significantin Active
    
    
    Observable
    
    
    UnobservedMarch 31,
    
    
    Markets
    
    
    Inputs
    
    
    Inputs2011
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)(in thousands)Assets:Money market funds
    
    $
    32,797
    
    
    $
    32,797
    
    
    $
    
    
    
    $
    Other mutual funds
    
    
    1,755
    
    
    
    1,755
    
    
    
    
    
    
    
    Total
    
    $
    34,552
    
    
    $
    34,552
    
    
    $
    
    
    
    $
    
     Page 12




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Note 11. Income Per Share
  Three months ended March 31,2011
    
    
    2010(in thousands, except per share data)Basic net income (loss) per shareNumerator:Net income (loss) attributable to Viad
    
    $
    9,787
    
    
    $
    (2,982
    )Less: Allocation to non-vested shares
    
    
    (240
    )
    
    
    Net income (loss) allocated to Viad common stockholders
    
    $
    9,547
    
    
    $
    (2,982
    )Denominator:Weighted-average outstanding common shares
    
    
    19,778
    
    
    
    20,051Net income (loss) attributable to Viad common stockholders
    
    $
    0.48
    
    
    $
    (0.15
    )Diluted net income (loss) per shareNumerator:Net income (loss) attributable to Viad
    
    $
    9,787
    
    
    $
    (2,982
    )Denominator:Weighted-average outstanding shares
    
    
    19,778
    
    
    
    20,051Additional dilutive shares related to share-based compensation
    
    
    302
    
    
    
    Weighted-average outstanding and potentially dilutive shares
    
    
    20,080
    
    
    
    20,051Net income (loss) attributable to Viad common stockholders (1)
    
    $
    0.48
    
    
    $
    (0.15
    )
 (1)
    
    Diluted income per share cannot exceed basic income per share.
  Note 12. Income Taxes
  2011
    
    
    2010(in thousands)Computed income tax expense (benefit) at
statutory federal income tax rate of 35%
    
    $
    5,432
    
    
    
    35.0
    %
    
    $
    (1,013
    )
    
    
    35.0
    %State income tax expense (benefit), net of
federal benefit or provision
    
    
    640
    
    
    
    4.1
    %
    
    
    (139
    )
    
    
    4.8
    %Change in enacted tax law
    
    
    
    
    
    
    0.0
    %
    
    
    1,279
    
    
    
    (44.2
    %)Other, net
    
    
    (172
    )
    
    
    (1.1
    %)
    
    
    81
    
    
    
    (2.8
    %)Income tax expense
    
    $
    5,900
    
    
    
    38.0
    %
    
    $
    208
    
    
    
    (7.2
    %)
  Page 13




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Note 13. Pension and Postretirement Benefits
  Domestic PlansPostretirement
    
    
    ForeignPension Plans
    
    
    Benefit Plans
    
    
    Pension Plans2011
    
    
    2010
    
    
    2011
    
    
    2010
    
    
    2011
    
    
    2010(in thousands)Service cost
    
    $
    37
    
    
    $
    53
    
    
    $
    37
    
    
    $
    27
    
    
    $
    92
    
    
    $
    75Interest cost
    
    
    300
    
    
    
    311
    
    
    
    232
    
    
    
    265
    
    
    
    182
    
    
    
    193Expected return on plan assets
    
    
    (141
    )
    
    
    (149
    )
    
    
    (33
    )
    
    
    (41
    )
    
    
    (167
    )
    
    
    (149
    )Amortization of prior service cost (credit)
    
    
    
    
    
    
    10
    
    
    
    (319
    )
    
    
    (293
    )
    
    
    
    
    
    
    Recognized net actuarial loss
    
    
    170
    
    
    
    139
    
    
    
    160
    
    
    
    157
    
    
    
    3
    
    
    
    Net periodic benefit cost
    
    $
    366
    
    
    $
    364
    
    
    $
    77
    
    
    $
    115
    
    
    $
    110
    
    
    $
    119
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Note 14. Restructuring Charges
   Marketing & EventsGroup Consolidation
    
    
    Other RestructuringsSeverance &
    
    
    
    
    
    
    Severance &Employee
    
    
    
    
    
    
    EmployeeBenefits
    
    
    Facilities
    
    
    Benefits
    
    
    Facilities
    
    
    Total(in thousands)Balance at January 1, 2011
    
    $
    1,106
    
    
    $
    5,051
    
    
    $
    197
    
    
    $
    1,642
    
    
    $
    7,996Restructuring charges
    
    
    269
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    269Cash payments
    
    
    (442
    )
    
    
    (810
    )
    
    
    (190
    )
    
    
    (183
    )
    
    
    (1,625
    )Adjustment to liability
    
    
    (108
    )
    
    
    
    
    
    
    
    
    
    
    (91
    )
    
    
    (199
    )Foreign currency translation adjustment
    
    
    33
    
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    47Balance at March 31, 2011
    
    $
    858
    
    
    $
    4,255
    
    
    $
    7
    
    
    $
    1,368
    
    
    $
    6,488
 Note 15. Litigation, Claims, Contingencies and Other
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Note 16. Segment Information
  Three months ended March 31,2011
    
    
    2010(in thousands)Revenues:Marketing & Events Group:U.S.
    
    $
    231,695
    
    
    $
    169,409International
    
    
    53,954
    
    
    
    50,367Intersegment eliminations
    
    
    (1,311
    )
    
    
    (2,836
    )284,338
    
    
    
    216,940Travel & Recreation Group
    
    
    5,760
    
    
    
    7,413$
    290,098
    
    
    $
    224,353Segment operating income (loss):Marketing & Events Group:U.S.
    
    $
    17,934
    
    
    $
    (49
    )International
    
    
    3,785
    
    
    
    2,63721,719
    
    
    
    2,588Travel & Recreation Group
    
    
    (4,460
    )
    
    
    (2,389
    )17,259
    
    
    
    199Corporate activities
    
    
    (1,271
    )
    
    
    (644
    )15,988
    
    
    
    (445
    )Interest income
    
    
    214
    
    
    
    96Interest expense
    
    
    (412
    )
    
    
    (493
    )Restructuring recoveries (charges):Marketing & Events U.S.
    
    
    (456
    )
    
    
    (2,053
    )Marketing & Events International
    
    
    187
    
    
    
    Income (loss) before income taxes
    
    $
    15,521
    
    
    $
    (2,895
    )
 March 31,
    
    
    December 31,2011
    
    
    2010(in thousands)Assets:Marketing & Events U.S.
    
    $
    249,320
    
    
    $
    235,965Marketing & Events International
    
    
    94,433
    
    
    
    83,441Travel & Recreation Group
    
    
    170,652
    
    
    
    157,562Corporate and other
    
    
    146,492
    
    
    
    139,535$
    660,897
    
    
    $
    616,503
  Page 17




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Note 17. Impact of Recent Accounting Pronouncements
    Page 18




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Overview:
     Viad Corp (Consolidated)
 
    
    Total revenues of $290.1 million compared to $224.4 million in the first
quarter of 2010
 
    
    Net income attributable to Viad of $9.8 million versus a loss of $3.0
million in the first quarter of 2010
 
    
    Diluted income per share of $0.48 versus a loss per share of $0.15 in the
first quarter of 2010
 
    
    Cash and cash equivalents totaled $148.4 million as of March 31, 2011
 
    
    Debt was $8.9 million as of March 31, 2011
 Marketing & Events U.S.
 
    
    Revenues of $231.7 million, an increase of 36.8 percent from the first
quarter of 2010
 
    
    Segment operating income of $17.9 million, as compared to a loss of
$49,000 in the first quarter of 2010
 Marketing & Events International
 
    
    Revenues of $54.0 million, an increase of 7.1 percent from the first
quarter of 2010
 
    
    Segment operating income of $3.8 million, as compared to $2.6 million in
the first quarter of 2010
 Travel & Recreation Group
 
    
    Revenues of $5.8 million, a decrease of 22.3 percent from the first
quarter of 2010
 
    
    Segment operating loss of $4.5 million, as compared to a loss of $2.4
million in the first quarter of 2010
 Non-GAAP Measure:
   Page 19




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2011
    
    
    2010(in thousands)Adjusted EBITDA
    
    $
    23,070
    
    
    $
    4,523Interest expense
    
    
    (412
    )
    
    
    (493
    )Income tax expense
    
    
    (5,900
    )
    
    
    (208
    )Depreciation and amortization
    
    
    (6,971
    )
    
    
    (6,804
    )Net income (loss) attributable to Viad
    
    $
    9,787
    
    
    $
    (2,982
    )
  Results of Operations:
 Comparison of First quarter of 2011 to the First Quarter of 2010
   Revenues
    
    
    Segment Operating ResultsWeighted Average
    
    
    Effect of Rate
    
    
    Weighted Average
    
    
    Effect of RateExchange Rates
    
    
    Variance
    
    
    Exchange Rates
    
    
    Variance2011
    
    
    2010
    
    
    (thousands)
    
    
    2011
    
    
    2010
    
    
    (thousands)Marketing & Events Group:Canada
    
    $
    1.02
    
    
    $
    0.96
    
    
    $
    1,120
    
    
    $
    1.15
    
    
    $
    0.97
    
    
    $
    23United Kingdom
    
    $
    1.61
    
    
    $
    1.56
    
    
    $
    1,051
    
    
    $
    1.61
    
    
    $
    1.53
    
    
    $
    155Travel & Recreation Group:Canada
    
    $
    1.02
    
    
    $
    0.95
    
    
    $
    329
    
    
    $
    1.01
    
    
    $
    0.96
    
    
    $
    (184
    )
  Page 20




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Marketing & Events Group.
     Travel & Recreation Group.
   Page 21




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Corporate Activities.
 Restructuring Charges.
 Income Taxes.
 Liquidity and Capital Resources:
      Page 22




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Page 23




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Off-Balance Sheet Arrangements:
  Critical Accounting Policies and Estimates:
  Goodwill 
      Page 24




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Income taxes
     Insurance liabilities
 Pension and postretirement benefits
   Page 25




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Domestic PlansPostretirementFunded Plans
    
    
    Unfunded Plans
    
    
    Benefit Plans
    
    
    Foreign PlansDiscount rate
    
    
    5.45
    %
    
    
    5.10
    %
    
    
    5.10
    %
    
    
    5.10
    %
  Domestic PlansPostretirementFunded Plans
    
    
    Unfunded Plans
    
    
    Benefit Plans
    
    
    Foreign PlansDiscount rate
    
    
    5.90
    %
    
    
    5.70
    %
    
    
    5.60
    %
    
    
    5.60
    %Expected return on plan assets
    
    
    6.35
    %
    
    
    N/A
    
    
    
    6.10
    %
    
    
    5.75
    %
  Share-based compensation
 Impact of Recent Accounting Pronouncements:
  Forward-Looking Statements:
   Page 26




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Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk.
     Weighted Average
    
    
    Effect of RateExchange Rates
    
    
    Variance2011
    
    
    2010
    
    
    (thousands)Canadian Operations:Marketing & Events Group
    
    $
    1.15
    
    
    $
    0.97
    
    
    $
    23Travel & Recreation Group
    
    $
    1.01
    
    
    $
    0.96
    
    
    $
    (184
    )United Kingdom Operations:Marketing & Events Group
    
    $
    1.61
    
    
    $
    1.53
    
    
    $
    155
    Page 27




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Item 4.
    
    Controls and Procedures.
   
 PART IIOTHER INFORMATION
 
 Item 1A.
    
    Risk Factors.
  
 Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds.
  ISSUER PURCHASES OF EQUITY SECURITIES
 Shares
    
    
    Maximum Number (orPurchased as
    
    
    Approximate DollarPart of Publicly
    
    
    Value) of Shares thatTotal Number of
    
    
    Average Price
    
    
    Announced
    
    
    May Yet Be PurchasedShares
    
    
    Paid Per Share
    
    
    Plans or
    
    
    Under the Plans orPeriod
    
    Purchased (#)
    
    
    ($)
    
    
    Programs
    
    
    Programs (1)January 2011
    
    
    9,073
    
    
    
    26.55
    
    
    
    
    
    
    
    304,381February 2011
    
    
    18,411
    
    
    
    22.39
    
    
    
    
    
    
    
    304,381March 2011
    
    
    668
    
    
    
    22.41
    
    
    
    
    
    
    
    304,381Total
    
    
    28,152
    
    
    
    23.73
    
    
    
    
    
    
    
    304,381
 (1)
    
    Viad has announced its intent to repurchase shares of the Companys common
stock from time to time at prevailing market prices. No shares were repurchased during the first
quarter of 2011. As of March 31, 2011, 304,381 shares remain available for repurchase. The
authorization of the Board of Directors does not have an expiration date. The terms of Viads $75
million secured revolving credit facility restrict the Company from repurchasing more than $10
million in the aggregate of the Companys common stock during the remainder of the credit facility
term, which expires in June 2011.
  Page 28




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Item 6.
    
    Exhibits.
 Exhibit No. 31.1
    
    Certification of Chief Executive Officer of Viad Corp pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002*Exhibit No. 31.2
    
    Certification of Chief Financial Officer of Viad Corp pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002*Exhibit No. 32.1
    
    Certification of Chief Executive Officer of Viad Corp pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002*Exhibit No. 32.2
    
    Certification of Chief Financial Officer of Viad Corp pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002*
 *
    
    Filed herewith.
 
 SIGNATURES
  VIAD CORP
(Registrant)May 6, 2011
    
    By
    /s/ G. Michael Latta(Date)
    
    
    G. Michael LattaChief Accounting Officer  Controller
(Chief Accounting Officer
and Authorized Officer)  Page 29