##### 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 June 30, 2009
 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 
incorporation or organization)
    
    (I.R.S. Employer Identification No.)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
 Yes o No o
 12b-2
 Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o (Do not check if a smaller reporting company)
    
    Small reporting company o
 o þ




---



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 4. Submission of Matters to a Vote of Security HoldersItem 5. Other InformationItem 6. ExhibitsSIGNATURESExhibit 10.AExhibit 10.BExhibit 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)
 June 30, 2009
    
    
    December 31, 2008(in thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    109,918
    
    
    $
    148,040Accounts receivable, net of allowance for doubtful accounts
of $1,875 and $2,556, respectively
    
    
    73,065
    
    
    
    53,541Inventories
    
    
    40,348
    
    
    
    52,311Deferred income taxes
    
    
    17,883
    
    
    
    19,695Other current assets
    
    
    14,468
    
    
    
    14,453Total current assets
    
    
    255,682
    
    
    
    288,040Property and equipment, net
    
    
    173,512
    
    
    
    165,415Other investments and assets
    
    
    26,568
    
    
    
    26,560Deferred income taxes
    
    
    14,847
    
    
    
    18,996Goodwill
    
    
    217,984
    
    
    
    212,461Other intangible assets, net
    
    
    17,601
    
    
    
    17,932Total Assets
    
    $
    706,194
    
    
    $
    729,404LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    52,989
    
    
    $
    57,702Other current liabilities
    
    
    74,398
    
    
    
    109,059Current portion of long-term debt and capital lease obligations
    
    
    3,002
    
    
    
    2,556Total current liabilities
    
    
    130,389
    
    
    
    169,317Long-term debt and capital lease obligations
    
    
    10,915
    
    
    
    10,087Pension and postretirement benefits
    
    
    25,222
    
    
    
    25,121Other deferred items and liabilities
    
    
    56,953
    
    
    
    57,790Total liabilities
    
    
    223,479
    
    
    
    262,315Commitments 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
    
    
    602,322
    
    
    
    623,781Retained earnings
    
    
    96,834
    
    
    
    91,558Unearned employee benefits and other
    
    
    (7,430
    )
    
    
    (7,881
    )Accumulated other comprehensive income (loss):Unrealized loss on investments
    
    
    (1
    )
    
    
    (62
    )Cumulative foreign currency translation adjustments
    
    
    16,657
    
    
    
    6,233Unrecognized net actuarial loss and prior service credit
    
    
    (3,958
    )
    
    
    (3,673
    )Common stock in treasury, at cost, 4,357,423 and 4,655,956
shares, respectively
    
    
    (265,418
    )
    
    
    (286,803
    )Total Viad Corp stockholders equity
    
    
    476,408
    
    
    
    460,555Noncontrolling interest
    
    
    6,307
    
    
    
    6,534Total stockholders equity
    
    
    482,715
    
    
    
    467,089Total Liabilities and Stockholders Equity
    
    $
    706,194
    
    
    $
    729,404
   Page 2




---



##### Table of Contents



VIAD CORP
 
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(in thousands, except per share data)Revenues:Convention and event services
    
    $
    154,721
    
    
    $
    187,691
    
    
    $
    351,617
    
    
    $
    456,572Exhibits and environments
    
    
    40,638
    
    
    
    65,693
    
    
    
    79,804
    
    
    
    126,405Travel and recreation services
    
    
    18,206
    
    
    
    23,828
    
    
    
    23,093
    
    
    
    29,680Total revenues
    
    
    213,565
    
    
    
    277,212
    
    
    
    454,514
    
    
    
    612,657Costs and expenses:Costs of services
    
    
    161,984
    
    
    
    194,305
    
    
    
    351,267
    
    
    
    436,092Costs of products sold
    
    
    41,773
    
    
    
    61,828
    
    
    
    86,772
    
    
    
    126,906Corporate activities
    
    
    703
    
    
    
    2,219
    
    
    
    2,206
    
    
    
    4,653Interest income
    
    
    (132
    )
    
    
    (653
    )
    
    
    (393
    )
    
    
    (1,753
    )Interest expense
    
    
    425
    
    
    
    415
    
    
    
    845
    
    
    
    878Restructuring charges
    
    
    198
    
    
    
    
    
    
    
    2,930
    
    
    
    Total costs and expenses
    
    
    204,951
    
    
    
    258,114
    
    
    
    443,627
    
    
    
    566,776Income from continuing operations before income taxes
    
    
    8,614
    
    
    
    19,098
    
    
    
    10,887
    
    
    
    45,881Income tax expense
    
    
    3,311
    
    
    
    6,107
    
    
    
    4,212
    
    
    
    16,297Income from continuing operations
    
    
    5,303
    
    
    
    12,991
    
    
    
    6,675
    
    
    
    29,584Loss from discontinued operations
    
    
    
    
    
    
    (210
    )
    
    
    
    
    
    
    (210
    )Net income
    
    
    5,303
    
    
    
    12,781
    
    
    
    6,675
    
    
    
    29,374Net loss attributable to noncontrolling interest
    
    
    96
    
    
    
    92
    
    
    
    227
    
    
    
    244Net income attributable to Viad
    
    $
    5,399
    
    
    $
    12,873
    
    
    $
    6,902
    
    
    $
    29,618Diluted income per common shareIncome from continuing operations attributable to Viad
common stockholders
    
    $
    0.26
    
    
    $
    0.63
    
    
    $
    0.34
    
    
    $
    1.44Loss from discontinued operations attributable to Viad
common stockholders
    
    
    
    
    
    
    (0.01
    )
    
    
    
    
    
    
    (0.01
    )Net income attributable to Viad common stockholders
    
    $
    0.26
    
    
    $
    0.62
    
    
    $
    0.34
    
    
    $
    1.43Weighted-average outstanding and potentially dilutive
common shares
    
    
    20,170
    
    
    
    20,666
    
    
    
    20,167
    
    
    
    20,678Basic income per common shareIncome from continuing operations attributable to Viad
common stockholders
    
    $
    0.26
    
    
    $
    0.63
    
    
    $
    0.34
    
    
    $
    1.44Loss from discontinued operations attributable to Viad
common stockholders
    
    
    
    
    
    
    (0.01
    )
    
    
    
    
    
    
    (0.01
    )Net income attributable to Viad common stockholders
    
    $
    0.26
    
    
    $
    0.62
    
    
    $
    0.34
    
    
    $
    1.43Weighted-average outstanding common shares
    
    
    19,977
    
    
    
    20,268
    
    
    
    19,935
    
    
    
    20,232Dividends declared per common share
    
    $
    0.04
    
    
    $
    0.04
    
    
    $
    0.08
    
    
    $
    0.08Amounts attributable to Viad common stockholdersIncome from continuing operations
    
    $
    5,399
    
    
    $
    13,083
    
    
    $
    6,902
    
    
    $
    29,828Loss from discontinued operations
    
    
    
    
    
    
    (210
    )
    
    
    
    
    
    
    (210
    )Net income
    
    $
    5,399
    
    
    $
    12,873
    
    
    $
    6,902
    
    
    $
    29,618
   Page 3




---



##### Table of Contents



VIAD CORP
 
 
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 (Unaudited)
 Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(in thousands)Net income
    
    $
    5,303
    
    
    $
    12,781
    
    
    $
    6,675
    
    
    $
    29,374Other comprehensive income (loss):Unrealized gains (losses) on investments:Holding gains (losses) arising during the period, net of tax
    
    
    118
    
    
    
    (14
    )
    
    
    61
    
    
    
    (144
    )Unrealized foreign currency translation adjustments
    
    
    15,504
    
    
    
    (839
    )
    
    
    10,424
    
    
    
    (2,942
    )Pension and postretirement benefit plans:Amortization of net actuarial loss, net of tax
    
    
    22
    
    
    
    72
    
    
    
    95
    
    
    
    143Amortization of prior service credit, net of tax
    
    
    (190
    )
    
    
    (205
    )
    
    
    (380
    )
    
    
    (411
    )Total other comprehensive income (loss)
    
    
    15,454
    
    
    
    (986
    )
    
    
    10,200
    
    
    
    (3,354
    )Comprehensive income
    
    
    20,757
    
    
    
    11,795
    
    
    
    16,875
    
    
    
    26,020Comprehensive loss attributable to noncontrolling interest
    
    
    96
    
    
    
    92
    
    
    
    227
    
    
    
    244Comprehensive income attributable to Viad
    
    $
    20,853
    
    
    $
    11,887
    
    
    $
    17,102
    
    
    $
    26,264
   Page 4




---



##### Table of Contents



VIAD CORP
 
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Six months ended June 30,2009
    
    
    2008(in thousands)Cash flows from operating activities:Net income
    
    $
    6,675
    
    
    $
    29,374Adjustments to reconcile net income to net cash used in
operating activities:Depreciation and amortization
    
    
    13,535
    
    
    
    13,844Deferred income taxes
    
    
    5,739
    
    
    
    4,747Loss from discontinued operations
    
    
    
    
    
    
    210Restructuring charges
    
    
    2,930
    
    
    
    Gains on dispositions of property and other assets
    
    
    (14
    )
    
    
    (89
    )Share-based compensation expense
    
    
    1,215
    
    
    
    3,868Tax benefit from share-based compensation arrangements
    
    
    
    
    
    
    338Excess tax benefit from share-based compensation arrangements
    
    
    
    
    
    
    (287
    )Other non-cash items, net
    
    
    2,171
    
    
    
    2,466Change in operating assets and liabilities:Receivables
    
    
    (20,213
    )
    
    
    (34,191
    )Inventories
    
    
    11,963
    
    
    
    (2,987
    )Accounts payable
    
    
    (3,758
    )
    
    
    4,110Restructuring liabilities
    
    
    (2,668
    )
    
    
    (963
    )Accrued compensation
    
    
    (15,605
    )
    
    
    (11,422
    )Customer deposits
    
    
    (10,699
    )
    
    
    (1,654
    )Other assets and liabilities, net
    
    
    (11,915
    )
    
    
    (14,131
    )Net cash used in operating activities
    
    
    (20,644
    )
    
    
    (6,767
    )Cash flows from investing activities:Capital expenditures
    
    
    (14,780
    )
    
    
    (25,516
    )Acquisition of business, net of cash acquired
    
    
    
    
    
    
    (23,334
    )Proceeds from sale of short-term investments
    
    
    
    
    
    
    3,980Proceeds from dispositions of property and other assets
    
    
    28
    
    
    
    520Net cash used in investing activities
    
    
    (14,752
    )
    
    
    (44,350
    )Cash flows from financing activities:Payments on debt and capital lease obligations
    
    
    (1,606
    )
    
    
    (1,325
    )Dividends paid on common stock
    
    
    (1,648
    )
    
    
    (1,657
    )Common stock purchased for treasury
    
    
    (1,162
    )
    
    
    (1,632
    )Excess tax benefit from share-based compensation arrangements
    
    
    
    
    
    
    287Proceeds from exercise of stock options
    
    
    
    
    
    
    1,621Net cash used in financing activities
    
    
    (4,416
    )
    
    
    (2,706
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    1,690
    
    
    
    315Net decrease in cash and cash equivalents
    
    
    (38,122
    )
    
    
    (53,508
    )Cash and cash equivalents, beginning of year
    
    
    148,040
    
    
    
    165,069Cash and cash equivalents, end of period
    
    $
    109,918
    
    
    $
    111,561Supplemental disclosure of cash flow informationCash paid during the period for:Income taxes
    
    $
    6,727
    
    
    $
    13,179Interest
    
    $
    475
    
    
    $
    697Equipment acquired under capital leases
    
    $
    2,776
    
    
    $
    606
   Page 5




---



##### Table of Contents



VIAD CORP
 
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 Note 1. Basis of Preparation and Principles of Consolidation
    Note 2. Share-Based Compensation
     Page 6




---



##### Table of Contents



Restricted Stock
    
    
    PBRSWeighted-Average
    
    
    
    
    
    
    Weighted-AverageGrant Date
    
    
    
    
    
    
    Grant DateShares
    
    
    Fair Value
    
    
    Shares
    
    
    Fair ValueBalance at January 1, 2009
    
    
    358,285
    
    
    $
    34.25
    
    
    
    94,828
    
    
    $
    34.56Granted
    
    
    220,133
    
    
    
    15.36
    
    
    
    162,600
    
    
    
    15.36Vested
    
    
    (176,312
    )
    
    
    31.05
    
    
    
    (46,701
    )
    
    
    34.21Forfeited
    
    
    (11,096
    )
    
    
    27.55
    
    
    
    (4,500
    )
    
    
    19.46Balance at June 30, 2009
    
    
    391,010
    
    
    
    25.24
    
    
    
    206,227
    
    
    
    19.83
    Weighted-Average
    
    
    OptionsShares
    
    
    Exercise Price
    
    
    ExercisableOptions outstanding at January 1, 2009
    
    
    606,660
    
    
    $
    25.86
    
    
    
    459,612Forfeited
    
    
    (45,756
    )
    
    
    27.84Options outstanding at June 30, 2009
    
    
    560,904
    
    
    
    25.70
    
    
    
    474,508
  Page 7




---



##### Table of Contents



Options Outstanding
    
    
    Options ExercisableWeighted-Average
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Remaining
    
    
    Average
    
    
    
    
    
    
    AverageRange of Exercise Prices
    
    Shares
    
    
    Contractual Life
    
    
    Exercise Price
    
    
    Shares
    
    
    Exercise Price$18.40 to $20.77
    
    
    74,945
    
    
    3.4 years
    
    $
    19.58
    
    
    
    74,945
    
    
    $
    19.58$22.29 to $24.05
    
    
    100,677
    
    
    1.5 years
    
    
    23.88
    
    
    
    100,677
    
    
    
    23.88$24.22 to $26.07
    
    
    161,707
    
    
    2.5 years
    
    
    25.13
    
    
    
    151,707
    
    
    
    25.14$26.31 to $26.49
    
    
    150,750
    
    
    2.6 years
    
    
    26.34
    
    
    
    118,404
    
    
    
    26.34$30.82 to $38.44
    
    
    72,825
    
    
    4.7 years
    
    
    34.48
    
    
    
    28,775
    
    
    
    34.13$18.40 to $38.44
    
    
    560,904
    
    
    2.7 years
    
    
    25.70
    
    
    
    474,508
    
    
    
    24.84
   Note 3. Acquisition of Business
  Note 4. Inventories
  June 30,
    
    
    December 31,2009
    
    
    2008(in thousands)Raw materials
    
    $
    28,887
    
    
    $
    30,683Work in process
    
    
    11,461
    
    
    
    21,628Inventories
    
    $
    40,348
    
    
    $
    52,311
  Page 8




---



##### Table of Contents



Note 5. Property and Equipment
  June 30,
    
    
    December 31,2009
    
    
    2008(in thousands)Land
    
    $
    24,418
    
    
    $
    23,623Buildings and leasehold improvements
    
    
    91,968
    
    
    
    88,999Equipment and other
    
    
    285,427
    
    
    
    267,175401,813
    
    
    
    379,797Accumulated depreciation
    
    
    (228,301
    )
    
    
    (214,382
    )Property and equipment, net
    
    $
    173,512
    
    
    $
    165,415
  Note 6. Goodwill and Other Intangible Assets
   Experiential
    
    
    Travel andGES
    
    
    Marketing
    
    
    Recreation
    
    
    Total(in thousands)Balance at January 1, 2009
    
    $
    174,018
    
    
    $
    5,063
    
    
    $
    33,380
    
    
    $
    212,461Foreign currency translation adjustments
    
    
    3,650
    
    
    
    
    
    
    
    1,873
    
    
    
    5,523Balance at June 30, 2009
    
    $
    177,668
    
    
    $
    5,063
    
    
    $
    35,253
    
    
    $
    217,984
  Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingValue
    
    
    Amortization
    
    
    Value(in thousands)Amortized intangible assets:Customer contracts and relationships
    
    $
    8,713
    
    
    $
    (1,503
    )
    
    $
    7,210Design libraries
    
    
    2,020
    
    
    
    (339
    )
    
    
    1,681Non-compete agreements
    
    
    1,790
    
    
    
    (1,654
    )
    
    
    136Proprietary technology
    
    
    763
    
    
    
    (421
    )
    
    
    342Other
    
    
    115
    
    
    
    (47
    )
    
    
    6813,401
    
    
    
    (3,964
    )
    
    
    9,437Unamortized intangible assets:Trademarks and trade names
    
    
    8,134
    
    
    
    
    
    
    
    8,134Other
    
    
    30
    
    
    
    
    
    
    
    308,164
    
    
    
    
    
    
    
    8,164Total
    
    $
    21,565
    
    
    $
    (3,964
    )
    
    $
    17,601
  Page 9




---



##### Table of Contents



Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingValue
    
    
    Amortization
    
    
    Value(in thousands)Amortized intangible assets:Customer contracts and relationships
    
    $
    8,634
    
    
    $
    (901
    )
    
    $
    7,733Design libraries
    
    
    2,020
    
    
    
    (226
    )
    
    
    1,794Non-compete agreements
    
    
    1,933
    
    
    
    (1,634
    )
    
    
    299Proprietary technology
    
    
    735
    
    
    
    (293
    )
    
    
    442Other
    
    
    79
    
    
    
    (35
    )
    
    
    4413,401
    
    
    
    (3,089
    )
    
    
    10,312Unamortized intangible assets:Trademarks and trade names
    
    
    7,590
    
    
    
    
    
    
    
    7,590Other
    
    
    30
    
    
    
    
    
    
    
    307,620
    
    
    
    
    
    
    
    7,620Total
    
    $
    21,021
    
    
    $
    (3,089
    )
    
    $
    17,932
  (in thousands)2009
    
    $
    1,0722010
    
    $
    1,9352011
    
    $
    1,5812012
    
    $
    1,1922013 and thereafter
    
    $
    3,657
 Note 7. Accrued Liabilities and Other
  June 30,
    
    
    December 31,2009
    
    
    2008(in thousands)Continuing operations:Customer deposits
    
    $
    32,312
    
    
    $
    43,011Accrued compensation
    
    
    13,888
    
    
    
    29,048Self-insured liability accrual
    
    
    8,470
    
    
    
    8,258Accrued sales and use taxes
    
    
    3,766
    
    
    
    3,473Accrued restructuring
    
    
    2,086
    
    
    
    2,337Accrued dividends
    
    
    846
    
    
    
    840Accrued income taxes
    
    
    250
    
    
    
    5,199Other
    
    
    10,103
    
    
    
    13,42771,721
    
    
    
    105,593Discontinued operations:Environmental remediation liabilities
    
    
    1,750
    
    
    
    2,208Self-insured liability accrual
    
    
    682
    
    
    
    461Other
    
    
    245
    
    
    
    7972,677
    
    
    
    3,466Total other current liabilities
    
    $
    74,398
    
    
    $
    109,059
  Page 10




---



##### Table of Contents



June 30,
    
    
    December 31,2009
    
    
    2008(in thousands)Continuing operations:Self-insured liability accrual
    
    $
    13,975
    
    
    $
    14,387Accrued income taxes
    
    
    5,579
    
    
    
    5,462Accrued compensation
    
    
    4,749
    
    
    
    5,194Accrued restructuring
    
    
    4,564
    
    
    
    4,207Foreign deferred tax liability
    
    
    3,428
    
    
    
    3,340Deferred gain on sale of property
    
    
    1,129
    
    
    
    1,612Other
    
    
    5,626
    
    
    
    5,29639,050
    
    
    
    39,498Discontinued operations:Self-insured liability accrual
    
    
    9,087
    
    
    
    9,435Environmental remediation liabilities
    
    
    5,163
    
    
    
    5,516Accrued income taxes
    
    
    929
    
    
    
    909Other
    
    
    2,724
    
    
    
    2,43217,903
    
    
    
    18,292Total other deferred items and liabilities
    
    $
    56,953
    
    
    $
    57,790
 Note 8. Debt
     Page 11




---



##### Table of Contents



Note 9. Stockholders Equity
  Total Viad
    
    
    
    
    
    
    TotalStockholders
    
    
    Noncontrolling
    
    
    StockholdersEquity
    
    
    Interest
    
    
    Equity(in thousands)Balance at January 1, 2009
    
    $
    460,555
    
    
    $
    6,534
    
    
    $
    467,089Net income (loss)
    
    
    6,902
    
    
    
    (227
    )
    
    
    6,675Dividends on common stock
    
    
    (1,648
    )
    
    
    
    
    
    
    (1,648
    )Common stock purchased for treasury
    
    
    (1,162
    )
    
    
    
    
    
    
    (1,162
    )Employee benefit plans
    
    
    1,039
    
    
    
    
    
    
    
    1,039Unrealized foreign currency translation adjustment
    
    
    10,424
    
    
    
    
    
    
    
    10,424Unrealized loss on investments
    
    
    61
    
    
    
    
    
    
    
    61Amortization of prior service cost and net actuarial loss
    
    
    (285
    )
    
    
    
    
    
    
    (285
    )ESOP allocation adjustment
    
    
    500
    
    
    
    
    
    
    
    500Other
    
    
    22
    
    
    
    
    
    
    
    22Balance at June 30, 2009
    
    $
    476,408
    
    
    $
    6,307
    
    
    $
    482,715
  Total Viad
    
    
    
    
    
    
    TotalStockholders
    
    
    Noncontrolling
    
    
    StockholdersEquity
    
    
    Interest
    
    
    Equity(in thousands)Balance at January 1, 2008
    
    $
    469,845
    
    
    $
    5,984
    
    
    $
    475,829Net income (loss)
    
    
    29,618
    
    
    
    (244
    )
    
    
    29,374Dividends on common stock
    
    
    (1,657
    )
    
    
    
    
    
    
    (1,657
    )Common stock purchased for treasury
    
    
    (1,632
    )
    
    
    
    
    
    
    (1,632
    )Employee benefit plans
    
    
    5,011
    
    
    
    
    
    
    
    5,011Unrealized foreign currency translation adjustment
    
    
    (2,942
    )
    
    
    
    
    
    
    (2,942
    )Unrealized loss on investments
    
    
    (144
    )
    
    
    
    
    
    
    (144
    )Amortization of prior service cost and net actuarial loss
    
    
    (268
    )
    
    
    
    
    
    
    (268
    )ESOP allocation adjustment
    
    
    500
    
    
    
    
    
    
    
    500Other
    
    
    (7
    )
    
    
    (1
    )
    
    
    (8
    )Balance at June 30, 2008
    
    $
    498,324
    
    
    $
    5,739
    
    
    $
    504,063
 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.
  Page 12




---



##### Table of Contents



Fair Value Measurements at June 30, 2009 UsingQuoted Prices
    
    
    Significantin Active
    
    
    Other
    
    
    SignificantMarkets for
    
    
    Observable
    
    
    UnobservedJune 30,
    
    
    Identical Assets
    
    
    Inputs
    
    
    Inputs2009
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)(in thousands)Assets:Money market funds
    
    $
    21,365
    
    
    $
    21,365
    
    
    $
    
    
    
    $
    Other mutual funds
    
    
    1,705
    
    
    
    1,705
    
    
    
    
    
    
    
    Total
    
    $
    23,070
    
    
    $
    23,070
    
    
    $
    
    
    
    $
    
     Page 13




---



##### Table of Contents



Note 11. Income Per Share
  Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(in thousands, except per share data)Basic net income per shareNumerator:Net income attributable to Viad
    
    $
    5,399
    
    
    $
    12,873
    
    
    $
    6,902
    
    
    $
    29,618Less: Allocation to nonvested shares
    
    
    (164
    )
    
    
    (283
    )
    
    
    (188
    )
    
    
    (640
    )Net income allocated to Viad common stockholders
    
    $
    5,235
    
    
    $
    12,590
    
    
    $
    6,714
    
    
    $
    28,978Denominator:Weighted-average outstanding common shares
    
    
    19,977
    
    
    
    20,268
    
    
    
    19,935
    
    
    
    20,232Net income attributable to Viad common stockholders
    
    $
    0.26
    
    
    $
    0.62
    
    
    $
    0.34
    
    
    $
    1.43Diluted net income per shareNumerator:Net income attributable to Viad
    
    $
    5,399
    
    
    $
    12,873
    
    
    $
    6,902
    
    
    $
    29,618Denominator:Weighted-average outstanding shares
    
    
    19,977
    
    
    
    20,268
    
    
    
    19,935
    
    
    
    20,232Additional dilutive shares related to share-based compensation
    
    
    193
    
    
    
    398
    
    
    
    232
    
    
    
    446Weighted-average outstanding and potentially dilutive shares
    
    
    20,170
    
    
    
    20,666
    
    
    
    20,167
    
    
    
    20,678Net income attributable to Viad common stockholders(1)
    
    $
    0.26
    
    
    $
    0.62
    
    
    $
    0.34
    
    
    $
    1.43
 (1)
    
    Diluted income per share amount cannot exceed basic income per share.  Note 12. Income Taxes
  2009
    
    
    2008(in thousands)Computed income tax expense at statutory
federal income tax rate of 35%
    
    $
    3,810
    
    
    
    35.0
    %
    
    $
    16,058
    
    
    
    35.0
    %State income taxes, net of federal benefit
    
    
    339
    
    
    
    3.1
    %
    
    
    1,641
    
    
    
    3.6
    %Tax resolutions, net
    
    
    
    
    
    
    0.0
    %
    
    
    (853
    )
    
    
    (1.9
    %)Other, net
    
    
    63
    
    
    
    0.6
    %
    
    
    (549
    )
    
    
    (1.2
    %)Income tax expense
    
    $
    4,212
    
    
    
    38.7
    %
    
    $
    16,297
    
    
    
    35.5
    %
    Page 14




---



##### Table of Contents



Page 15




---



##### Table of Contents



Note 13. Pension and Postretirement Benefits
  Domestic PlansPostretirement
    
    
    ForeignPension Plans
    
    
    Benefit Plans
    
    
    Pension Plans2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008(in thousands)Service cost
    
    $
    44
    
    
    $
    50
    
    
    $
    16
    
    
    $
    16
    
    
    $
    61
    
    
    $
    95Interest cost
    
    
    324
    
    
    
    305
    
    
    
    271
    
    
    
    250
    
    
    
    186
    
    
    
    191Expected return on plan assets
    
    
    (161
    )
    
    
    (194
    )
    
    
    (52
    )
    
    
    (82
    )
    
    
    (128
    )
    
    
    (184
    )Amortization of prior service
cost (credit)
    
    
    11
    
    
    
    18
    
    
    
    (323
    )
    
    
    (355
    )
    
    
    
    
    
    
    Recognized net actuarial loss
    
    
    91
    
    
    
    91
    
    
    
    76
    
    
    
    69
    
    
    
    
    
    
    
    Net periodic benefit cost (credit)
    
    $
    309
    
    
    $
    270
    
    
    $
    (12
    )
    
    $
    (102
    )
    
    $
    119
    
    
    $
    102
  Domestic PlansPostretirement
    
    
    ForeignPension Plans
    
    
    Benefit Plans
    
    
    Pension Plans2009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008(in thousands)Service cost
    
    $
    88
    
    
    $
    100
    
    
    $
    32
    
    
    $
    32
    
    
    $
    119
    
    
    $
    191Interest cost
    
    
    648
    
    
    
    610
    
    
    
    542
    
    
    
    500
    
    
    
    364
    
    
    
    384Expected return on plan assets
    
    
    (322
    )
    
    
    (388
    )
    
    
    (104
    )
    
    
    (164
    )
    
    
    (250
    )
    
    
    (372
    )Amortization of prior service
cost (credit)
    
    
    22
    
    
    
    36
    
    
    
    (646
    )
    
    
    (710
    )
    
    
    
    
    
    
    Recognized net actuarial loss
    
    
    180
    
    
    
    182
    
    
    
    150
    
    
    
    138
    
    
    
    
    
    
    
    Net periodic benefit cost (credit)
    
    $
    616
    
    
    $
    540
    
    
    $
    (26
    )
    
    $
    (204
    )
    
    $
    233
    
    
    $
    203
  Note 14. Restructuring Charges
  2009
    
    
    OtherRestructurings
    
    
    Restructurings
    
    
    Total(in thousands)Balance at January 1, 2009
    
    $
    
    
    
    $
    6,544
    
    
    $
    6,544Restructuring charges
    
    
    2,930
    
    
    
    
    
    
    
    2,930Cash payments
    
    
    (1,544
    )
    
    
    (1,124
    )
    
    
    (2,668
    )Adjustment to liability
    
    
    
    
    
    
    (156
    )
    
    
    (156
    )Balance at June 30, 2009
    
    $
    1,386
    
    
    $
    5,264
    
    
    $
    6,650
  Page 16




---



##### Table of Contents



Note 15. Litigation, Claims and Other Contingencies
      Page 17




---



##### Table of Contents



Note 16. Segment Information
  Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(in thousands)Revenues:Marketing & Events GroupGES
    
    $
    132,414
    
    
    $
    187,645
    
    
    $
    338,060
    
    
    $
    473,320Experiential Marketing Services
    
    
    62,945
    
    
    
    65,739
    
    
    
    93,361
    
    
    
    109,657Travel & Recreation Group
    
    
    18,206
    
    
    
    23,828
    
    
    
    23,093
    
    
    
    29,680$
    213,565
    
    
    $
    277,212
    
    
    $
    454,514
    
    
    $
    612,657Segment operating income (loss):Marketing & Events GroupGES
    
    $
    4,817
    
    
    $
    13,956
    
    
    $
    21,210
    
    
    $
    49,804Experiential Marketing Services
    
    
    2,698
    
    
    
    1,945
    
    
    
    (4,624
    )
    
    
    (2,176
    )Travel & Recreation Group
    
    
    2,293
    
    
    
    5,178
    
    
    
    (111
    )
    
    
    2,0319,808
    
    
    
    21,079
    
    
    
    16,475
    
    
    
    49,659Corporate activities
    
    
    (703
    )
    
    
    (2,219
    )
    
    
    (2,206
    )
    
    
    (4,653
    )9,105
    
    
    
    18,860
    
    
    
    14,269
    
    
    
    45,006Interest income
    
    
    132
    
    
    
    653
    
    
    
    393
    
    
    
    1,753Interest expense
    
    
    (425
    )
    
    
    (415
    )
    
    
    (845
    )
    
    
    (878
    )Restructuring charges
    
    
    (198
    )
    
    
    
    
    
    
    (2,930
    )
    
    
    Income from continuing operations
before income taxes
    
    $
    8,614
    
    
    $
    19,098
    
    
    $
    10,887
    
    
    $
    45,881
 June 30,
    
    
    December 31,2009
    
    
    2008(in thousands)Assets:Marketing & Events GroupGES
    
    $
    352,101
    
    
    $
    340,849Experiential Marketing Services
    
    
    111,960
    
    
    
    102,361Travel & Recreation Group
    
    
    131,508
    
    
    
    120,198Corporate and other
    
    
    110,625
    
    
    
    165,996$
    706,194
    
    
    $
    729,404
 Note 17. Impact of Recent Accounting Pronouncements
   Page 18




---



##### Table of Contents



Page 19




---



##### Table of Contents



Note 18. Common Stock Repurchases
  Note 19. Subsequent Event
   Page 20




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Overview:
   Marketing & Events Group:
 GES 
 Experiential Marketing Services 
 Travel & Recreation Group 
  Viad Corp (Consolidated)
 
    
    Total revenues of $213.6 million compared to $277.2 million in the second quarter of
2008
 
    
    Net income attributable to Viad of $5.4 million versus $12.9 million in the second
quarter of 2008
 
    
    Diluted income per share of $0.26 versus $0.62 in the second quarter of 2008
 
    
    Restructuring charges of $198,000 in 2009 primarily related to GES
 
    
    Cash and cash equivalents totaled $109.9 million as of June 30, 2009
 
    
    Debt was $13.9 million as of June 30, 2009
  Page 21




---



##### Table of Contents



Marketing & Events Group
 GES:
 
    
    Revenues of $132.4 million, a decrease of 29.4 percent from the second quarter of 2008
 
    
    Segment operating income of $4.8 million, a decrease of 65.5 percent from the second
quarter of 2008
 Experiential Marketing Services:
 
    
    Revenues of $62.9 million, a decrease of 4.3 percent from the second quarter of 2008
 
    
    Segment operating income of $2.7 million, an increase of 38.7 percent from the second
quarter of 2008
 Travel & Recreation Group
 
    
    Revenues of $18.2 million, a decrease of 23.6 percent from the second quarter of 2008
 
    
    Segment operating income of $2.3 million, a decrease of 55.7 percent from the second
quarter of 2008
 Non-GAAP Measure:
    Three months ended June 30,
    
    
    Six months ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(in thousands)Adjusted EBITDA
    
    $
    16,305
    
    
    $
    26,821
    
    
    $
    25,494
    
    
    $
    60,847Interest expense
    
    
    (425
    )
    
    
    (415
    )
    
    
    (845
    )
    
    
    (878
    )Income tax expense
    
    
    (3,311
    )
    
    
    (6,107
    )
    
    
    (4,212
    )
    
    
    (16,297
    )Depreciation and amortization
    
    
    (7,170
    )
    
    
    (7,216
    )
    
    
    (13,535
    )
    
    
    (13,844
    )Loss from discontinued operations
    
    
    
    
    
    
    (210
    )
    
    
    
    
    
    
    (210
    )Net income attributable to Viad
    
    $
    5,399
    
    
    $
    12,873
    
    
    $
    6,902
    
    
    $
    29,618
   Page 22




---



##### Table of Contents



Results of Operations:
 Comparison of Second Quarter of 2009 to the Second Quarter of 2008
   Marketing & Events Group.
      Page 23




---



##### Table of Contents



Travel & Recreation Group.
     Corporate Activities.
 Interest Income.
 Restructuring Charges.
 Income Taxes.
  Page 24




---



##### Table of Contents



Comparison of First Six Months of 2009 to the First Six Months of 2008
   Marketing & Events Group.
   Travel & Recreation Group.
  Corporate Activities.
 Interest Income.
 Income Taxes.
  Page 25




---



##### Table of Contents



Liquidity and Capital Resources:
           Page 26




---



##### Table of Contents



Off-Balance Sheet Arrangements:
  Critical Accounting Policies and Estimates:
  Goodwill and other intangible assets
    Page 27




---



##### Table of Contents



Page 28




---



##### Table of Contents



Income taxes
       Page 29




---



##### Table of Contents



Insurance liabilities
 Pension and postretirement benefits
      Share-based compensation
    Page 30




---



##### Table of Contents



Impact of Recent Accounting Pronouncements:
       Page 31




---



##### Table of Contents



Page 32




---



##### Table of Contents



Forward-Looking Statements:
  
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
    Page 33




---



##### Table of Contents



Item 4. Controls and Procedures.
    Page 34




---



##### Table of Contents



PART IIOTHER INFORMATION
 
 
 Item 1A. Risk Factors.
  
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  ISSUER PURCHASES OF EQUITY SECURITIES
 Total Number of
    
    
    Maximum Number (orShares Purchased as
    
    
    Approximate Dollar Value) ofPart of Publicly
    
    
    Shares that May Yet BeTotal Number of
    
    
    Average Price Paid
    
    
    Announced Plans or
    
    
    Purchased Under the Plans orPeriod
    
    Shares Purchased (#)
    
    
    Per Share ($)
    
    
    Programs
    
    
    Programs (1)April 2009
    
    
    10,276
    
    
    
    16.41
    
    
    
    
    
    
    
    160,681May 2009
    
    
    424
    
    
    
    15.39
    
    
    
    
    
    
    
    160,681June 2009
    
    
    706
    
    
    
    16.62
    
    
    
    
    
    
    
    160,681Total
    
    
    11,406
    
    
    
    16.38
    
    
    
    
    
    
    
    160,681
 (1)
    
    Viad has announced its intent, under authorizations by its Board of Directors, to
repurchase up to an aggregate of three million shares of the Companys common stock from
time to time at prevailing prices in the open market. No shares were purchased during the
second quarter of 2009. Shares repurchased to date under these programs totaled
2,839,319. The authorizations of the Board of Directors do not have expiration dates. 
 
 Item 4. Submission of Matters to a Vote of Security Holders.
 (a)
    
    The annual meeting of stockholders of Viad Corp was held on May 19, 2009.(b)
    
    Not applicable  (i) proxies for the meeting were solicited pursuant to
Regulation 14 under the Securities Exchange Act of 1934; (ii) there was no
solicitation in opposition to managements nominees as listed in the proxy
statement; and (iii) all such nominees were elected.(c)
    
    Matters voted upon at the annual meeting for which proxies were solicited
pursuant to Regulation 14 under the Securities Exchange Act of 1934:
 1.
    
    The election of Directors as follows:
 Affirmative
    
    
    VoteVote
    
    
    Against
    
    
    AbstentionsDaniel Boggan Jr.
    
    
    18,196,894
    
    
    
    153,416
    
    
    
    24,312Richard H. Dozer
    
    
    18,192,841
    
    
    
    157,418
    
    
    
    24,363Robert E. Munzenrider
    
    
    18,192,779
    
    
    
    156,515
    
    
    
    25,328
 2.
    
    The ratification of the appointment of Deloitte & Touche LLP as Viads
independent registered public accounting firm for fiscal year 2009:
 Affirmative Vote
    
    
    18,319,629Against
    
    
    38,881Abstentions
    
    
    16,112
  Page 35




---



##### Table of Contents



Item 5. Other Information.
  
 
 Item 6. Exhibits.
 Exhibit No. 10.A
    
    Copy of Suzanne Pearl Separation Agreement and Release, dated July 23, 2009.*+Exhibit No. 10.B
    
    Copy of Kevin M. Rabbitt Consulting Agreement, dated August 4, 2009.*+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.+
    
    Management contract or compensation plan or arrangement. 
 
 SIGNATURES
  VIAD CORP
(Registrant)August 7, 2009(Date)
    
    By:
    
    /s/ G. Michael Latta
G. Michael Latta
Vice President  Controller
(Chief Accounting Officer
and Authorized Officer)
  Page 36