##### 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, 2010
 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
 Yes o
No o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o  (Do not check if a smaller reporting company)
    
    Small reporting company o
 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 5. Other InformationItem 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)
 June 30, 2010
    
    
    December 31, 2009(in thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    133,971
    
    
    $
    116,342Accounts receivable, net of allowance for doubtful accounts
of $2,318 and $3,892, respectively
    
    
    67,938
    
    
    
    44,767Inventories
    
    
    37,916
    
    
    
    44,818Deferred income taxes
    
    
    16,891
    
    
    
    20,150Asset held for sale
    
    
    
    
    
    
    13,982Other current assets
    
    
    27,631
    
    
    
    21,476Total current assets
    
    
    284,347
    
    
    
    261,535Property and equipment, net
    
    
    148,011
    
    
    
    155,000Other investments and assets
    
    
    29,339
    
    
    
    29,069Deferred income taxes
    
    
    31,997
    
    
    
    35,951Goodwill
    
    
    123,185
    
    
    
    124,931Other intangible assets, net
    
    
    2,184
    
    
    
    2,700Total Assets
    
    $
    619,063
    
    
    $
    609,186LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    54,901
    
    
    $
    41,509Other current liabilities
    
    
    93,381
    
    
    
    85,077Current portion of long-term debt and capital lease obligations
    
    
    7,240
    
    
    
    4,301Total current liabilities
    
    
    155,522
    
    
    
    130,887Long-term debt and capital lease obligations
    
    
    3,125
    
    
    
    8,487Pension and postretirement benefits
    
    
    32,655
    
    
    
    32,767Other deferred items and liabilities
    
    
    48,648
    
    
    
    52,414Total liabilities
    
    
    239,950
    
    
    
    224,555Commitments and contingencies (Note 14)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
    
    
    606,803
    
    
    
    606,038Retained deficit
    
    
    (17,995
    )
    
    
    (16,405
    )Unearned employee benefits and other
    
    
    (5,207
    )
    
    
    (5,954
    )Accumulated other comprehensive income (loss):Unrealized gains on investments
    
    
    135
    
    
    
    154Cumulative foreign currency translation adjustments
    
    
    27,373
    
    
    
    31,283Unrecognized net actuarial loss and prior service
credit
    
    
    (10,051
    )
    
    
    (8,385
    )Common stock in treasury, at cost, 4,390,287 and 4,379,125
shares, respectively
    
    
    (266,247
    )
    
    
    (266,618
    )Total Viad Corp stockholders equity
    
    
    372,213
    
    
    
    377,515Noncontrolling interest
    
    
    6,900
    
    
    
    7,116Total stockholders equity
    
    
    379,113
    
    
    
    384,631Total Liabilities and Stockholders Equity
    
    $
    619,063
    
    
    $
    609,186
   Page 2




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VIAD CORP
 
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
 Three months ended June 30,
    
    
    Six months ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009(in thousands, except per share data)Revenues:Convention and event services
    
    $
    155,097
    
    
    $
    154,721
    
    
    $
    333,856
    
    
    $
    351,617Exhibits and environments
    
    
    40,813
    
    
    
    40,638
    
    
    
    78,994
    
    
    
    79,804Travel and recreation services
    
    
    22,389
    
    
    
    18,206
    
    
    
    29,802
    
    
    
    23,093Total revenues
    
    
    218,299
    
    
    
    213,565
    
    
    
    442,652
    
    
    
    454,514Costs and expenses:Costs of services
    
    
    166,712
    
    
    
    161,984
    
    
    
    347,551
    
    
    
    351,267Costs of products sold
    
    
    43,862
    
    
    
    41,773
    
    
    
    87,177
    
    
    
    86,772Corporate activities
    
    
    2,058
    
    
    
    703
    
    
    
    2,702
    
    
    
    2,206Interest income
    
    
    (88
    )
    
    
    (132
    )
    
    
    (184
    )
    
    
    (393
    )Interest expense
    
    
    473
    
    
    
    425
    
    
    
    966
    
    
    
    845Restructuring charges
    
    
    559
    
    
    
    198
    
    
    
    2,612
    
    
    
    2,930Total costs and expenses
    
    
    213,576
    
    
    
    204,951
    
    
    
    440,824
    
    
    
    443,627Income before income taxes
    
    
    4,723
    
    
    
    8,614
    
    
    
    1,828
    
    
    
    10,887Income tax expense
    
    
    1,790
    
    
    
    3,311
    
    
    
    1,998
    
    
    
    4,212Net income (loss)
    
    
    2,933
    
    
    
    5,303
    
    
    
    (170
    )
    
    
    6,675Net loss attributable to noncontrolling interest
    
    
    95
    
    
    
    96
    
    
    
    216
    
    
    
    227Net income attributable to Viad
    
    $
    3,028
    
    
    $
    5,399
    
    
    $
    46
    
    
    $
    6,902Diluted income per common shareNet income attributable to Viad common stockholders
    
    $
    0.15
    
    
    $
    0.26
    
    
    $
    
    
    
    $
    0.34Weighted-average outstanding and potentially dilutive
common shares
    
    
    20,375
    
    
    
    20,170
    
    
    
    20,338
    
    
    
    20,167Basic income per common shareNet income attributable to Viad common stockholders
    
    $
    0.15
    
    
    $
    0.26
    
    
    $
    
    
    
    $
    0.34Weighted-average outstanding common shares
    
    
    20,059
    
    
    
    19,977
    
    
    
    20,055
    
    
    
    19,935Dividends declared per common share
    
    $
    0.04
    
    
    $
    0.04
    
    
    $
    0.08
    
    
    $
    0.08
   Page 3




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VIAD CORP
 
 
 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 (Unaudited)
 Three months ended June 30,
    
    
    Six months ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009(in thousands)Net income (loss)
    
    $
    2,933
    
    
    $
    5,303
    
    
    $
    (170
    )
    
    $
    6,675Other comprehensive income (loss):Unrealized gains (losses) on investments:Holding gains (losses) arising during the period, net of tax
    
    
    (78
    )
    
    
    118
    
    
    
    (19
    )
    
    
    61Unrealized foreign currency translation adjustments
    
    
    (7,956
    )
    
    
    15,504
    
    
    
    (3,910
    )
    
    
    10,424Pension and postretirement benefit plans:Net actuarial loss, net of tax
    
    
    183
    
    
    
    22
    
    
    
    (1,371
    )
    
    
    95Prior service credit, net of tax
    
    
    (175
    )
    
    
    (190
    )
    
    
    (295
    )
    
    
    (380
    )Total other comprehensive income (loss)
    
    
    (8,026
    )
    
    
    15,454
    
    
    
    (5,595
    )
    
    
    10,200Comprehensive income (loss)
    
    
    (5,093
    )
    
    
    20,757
    
    
    
    (5,765
    )
    
    
    16,875Comprehensive loss attributable to noncontrolling interest
    
    
    95
    
    
    
    96
    
    
    
    216
    
    
    
    227Comprehensive income (loss) attributable to Viad
    
    $
    (4,998
    )
    
    $
    20,853
    
    
    $
    (5,549
    )
    
    $
    17,102
   Page 4




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VIAD CORP
 
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Six months ended June 30,2010
    
    
    2009(in thousands)Cash flows from operating activities:Net income (loss)
    
    $
    (170
    )
    
    $
    6,675Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:Depreciation and amortization
    
    
    14,004
    
    
    
    13,535Deferred income taxes
    
    
    4,295
    
    
    
    5,739Restructuring charges
    
    
    2,612
    
    
    
    2,930Losses (gains) on dispositions of property and other assets
    
    
    37
    
    
    
    (14
    )Share-based compensation expense
    
    
    1,800
    
    
    
    1,215Other non-cash items, net
    
    
    1,852
    
    
    
    2,171Change in operating assets and liabilities:Receivables
    
    
    (23,444
    )
    
    
    (20,213
    )Inventories
    
    
    6,902
    
    
    
    11,963Accounts payable
    
    
    14,415
    
    
    
    (3,758
    )Restructuring liabilities
    
    
    (5,016
    )
    
    
    (2,668
    )Accrued compensation
    
    
    9,342
    
    
    
    (15,605
    )Customer deposits
    
    
    (1,856
    )
    
    
    (10,699
    )Income taxes payable
    
    
    (130
    )
    
    
    (5,510
    )Other assets and liabilities, net
    
    
    (6,359
    )
    
    
    (6,405
    )Net cash provided by (used in) operating activities
    
    
    18,284
    
    
    
    (20,644
    )Cash flows from investing activities:Capital expenditures
    
    
    (8,404
    )
    
    
    (14,780
    )Proceeds from dispositions of property and other assets
    
    
    14,541
    
    
    
    28Net cash provided by (used in) investing activities
    
    
    6,137
    
    
    
    (14,752
    )Cash flows from financing activities:Payments on debt and capital lease obligations
    
    
    (2,869
    )
    
    
    (1,606
    )Dividends paid on common stock
    
    
    (1,644
    )
    
    
    (1,648
    )Common stock purchased for treasury
    
    
    (573
    )
    
    
    (1,162
    )Proceeds from exercise of stock options
    
    
    38
    
    
    
    Net cash used in financing activities
    
    
    (5,048
    )
    
    
    (4,416
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (1,744
    )
    
    
    1,690Net increase (decrease) in cash and cash equivalents
    
    
    17,629
    
    
    
    (38,122
    )Cash and cash equivalents, beginning of year
    
    
    116,342
    
    
    
    148,040Cash and cash equivalents, end of period
    
    $
    133,971
    
    
    $
    109,918Supplemental disclosure of cash flow informationCash paid during the period for:Income taxes
    
    $
    3,855
    
    
    $
    6,727Interest
    
    $
    511
    
    
    $
    475Equipment acquired under capital leases
    
    $
    390
    
    
    $
    2,776
   Page 5




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VIAD CORP
 
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
 Note 1. Basis of Preparation and Principles of Consolidation
      1.
    
    Marketing & Events U.S., which includes all domestic GES and affiliated
operations, including those services formerly provided under the Exhibitgroup/Giltspur
and Becker Group brands. The consolidation of the domestic Marketing & Events Group
operations is aimed to provide a fully integrated service delivery network through a
realigned sales organization, shared infrastructure and facilities, and a common
operational platform.
 2.
    
    Marketing & Events International, which includes all foreign operations of the
Marketing & Events Group and consists of two operating segments: Canada and EMEA
(Europe, Middle East, Africa). This reporting segment includes the operations of the
following companies: GES Exposition Services (Canada) Limited, Giltspur Exhibits of
Canada, Inc., Melville Exhibition and Event Services Limited and Melville Data Services
Limited (collectively Melville) and affiliates, SDD Exhibitions Limited and GES GmbH
& Co. KG.
  Note 2. Share-Based Compensation
   Page 6




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Restricted Stock
    
    
    PBRSWeighted-Average
    
    
    
    
    
    
    Weighted-AverageGrant Date
    
    
    
    
    
    
    Grant DateShares
    
    
    Fair Value
    
    
    Shares
    
    
    Fair ValueBalance at January 1, 2010
    
    
    390,810
    
    
    $
    24.59
    
    
    
    174,927
    
    
    $
    20.77Granted
    
    
    143,000
    
    
    
    19.28
    
    
    
    
    
    
    
    Vested
    
    
    (65,961
    )
    
    
    34.42
    
    
    
    (29,547
    )
    
    
    35.31Forfeited
    
    
    (1,150
    )
    
    
    24.38
    
    
    
    (126,550
    )
    
    
    15.36Balance at June 30, 2010
    
    
    466,699
    
    
    
    21.58
    
    
    
    18,830
    
    
    
    33.02
     Page 7




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Weighted-Average
    
    
    OptionsShares
    
    
    Exercise Price
    
    
    ExercisableOptions outstanding at January 1, 2010
    
    
    541,718
    
    
    $
    25.74
    
    
    
    462,683Granted
    
    
    280,900
    
    
    
    19.20Exercised
    
    
    (695
    )
    
    
    19.57Forfeited or expired
    
    
    (29,348
    )
    
    
    25.48Options outstanding at June 30, 2010
    
    
    792,575
    
    
    
    23.44
    
    
    
    477,350
  Options Outstanding
    
    
    Options ExercisableWeighted-Average
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Remaining
    
    
    Average
    
    
    
    
    
    
    AverageRange of Exercise Prices
    
    Shares
    
    
    Contractual Life
    
    
    Exercise Price
    
    
    Shares
    
    
    Exercise Price$18.40 to $19.20
    
    
    282,150
    
    
    9.6 years
    
    
    $
    19.20
    
    
    
    1,250
    
    
    $
    18.40$19.57 to $24.05
    
    
    148,759
    
    
    1.5 years
    
    
    
    21.93
    
    
    
    148,759
    
    
    
    21.93$24.22 to $26.07
    
    
    151,171
    
    
    1.5 years
    
    
    
    25.12
    
    
    
    143,171
    
    
    
    25.13$26.31 to $26.49
    
    
    141,950
    
    
    1.6 years
    
    
    
    26.34
    
    
    
    141,950
    
    
    
    26.34$30.82 to $38.44
    
    
    68,545
    
    
    3.6 years
    
    
    
    34.47
    
    
    
    42,220
    
    
    
    34.26$18.40 to $38.44
    
    
    792,575
    
    
    4.6 years
    
    
    
    23.44
    
    
    
    477,350
    
    
    
    25.28
  Note 3. Inventories
  June 30,
    
    
    December 31,2010
    
    
    2009(in thousands)Raw materials
    
    $
    21,922
    
    
    $
    23,113Work in process
    
    
    15,994
    
    
    
    21,705Inventories
    
    $
    37,916
    
    
    $
    44,818
  Page 8




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Note 4. Property and Equipment
  June 30,
    
    
    December 31,2010
    
    
    2009(in thousands)Land
    
    $
    8,966
    
    
    $
    8,997Buildings and leasehold improvements
    
    
    84,885
    
    
    
    84,242Equipment and other
    
    
    292,428
    
    
    
    291,108386,279
    
    
    
    384,347Accumulated depreciation
    
    
    (238,268
    )
    
    
    (229,347
    )Property and equipment, net
    
    $
    148,011
    
    
    $
    155,000
   Note 5. Goodwill and Other Intangible Assets
  Marketing &Marketing &
    
    
    Events
    
    
    Travel &Events U.S.
    
    
    International
    
    
    Recreation Group
    
    
    Total(in thousands)Balance at January 1, 2010
    
    $
    62,686
    
    
    $
    22,472
    
    
    $
    39,773
    
    
    $
    124,931Foreign currency translation adjustments
    
    
    
    
    
    
    (1,156
    )
    
    
    (590
    )
    
    
    (1,746
    )Balance at June 30, 2010
    
    $
    62,686
    
    
    $
    21,316
    
    
    $
    39,183
    
    
    $
    123,185
  Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingValue
    
    
    Amortization
    
    
    Value(in thousands)Amortized intangible assets:Customer contracts and relationships
    
    $
    2,459
    
    
    $
    (794
    )
    
    $
    1,665Non-compete agreements
    
    
    1,931
    
    
    
    (1,894
    )
    
    
    37Proprietary technology
    
    
    507
    
    
    
    (378
    )
    
    
    129Design libraries
    
    
    175
    
    
    
    (66
    )
    
    
    109Other
    
    
    158
    
    
    
    (85
    )
    
    
    735,230
    
    
    
    (3,217
    )
    
    
    2,013Unamortized intangible assets:Trademarks and trade names
    
    
    171
    
    
    
    
    
    
    
    171Total
    
    $
    5,401
    
    
    $
    (3,217
    )
    
    $
    2,184
  Page 9




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Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingValue
    
    
    Amortization
    
    
    Value(in thousands)Amortized intangible assets:Customer contracts and relationships
    
    $
    2,507
    
    
    $
    (511
    )
    
    $
    1,996Non-compete agreements
    
    
    1,952
    
    
    
    (1,865
    )
    
    
    87Proprietary technology
    
    
    526
    
    
    
    (331
    )
    
    
    195Design libraries
    
    
    175
    
    
    
    (22
    )
    
    
    153Other
    
    
    158
    
    
    
    (65
    )
    
    
    935,318
    
    
    
    (2,794
    )
    
    
    2,524Unamortized intangible assets:Trademarks and trade names
    
    
    176
    
    
    
    
    
    
    
    176Total
    
    $
    5,494
    
    
    $
    (2,794
    )
    
    $
    2,700
  (in thousands)2010
    
    $
    4642011
    
    $
    7072012
    
    $
    3592013
    
    $
    3492014 and thereafter
    
    $
    134
 Note 6. Accrued Liabilities and Other
  June 30,
    
    
    December 31,2010
    
    
    2009(in thousands)Continuing operations:Customer deposits
    
    $
    39,555
    
    
    $
    41,411Accrued compensation
    
    
    20,062
    
    
    
    10,533Self-insured liability accrual
    
    
    7,722
    
    
    
    8,078Accrued restructuring
    
    
    3,422
    
    
    
    5,684Accrued sales and use taxes
    
    
    3,283
    
    
    
    3,325Accrued dividends
    
    
    839
    
    
    
    845Other
    
    
    16,726
    
    
    
    13,33091,609
    
    
    
    83,206Discontinued operations:Environmental remediation liabilities
    
    
    913
    
    
    
    1,075Self-insured liability accrual
    
    
    357
    
    
    
    395Other
    
    
    502
    
    
    
    4011,772
    
    
    
    1,871Total other current liabilities
    
    $
    93,381
    
    
    $
    85,077
  Page 10




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June 30,
    
    
    December 31,2010
    
    
    2009(in thousands)Continuing operations:Self-insured liability accrual
    
    $
    14,597
    
    
    $
    14,083Accrued compensation
    
    
    4,789
    
    
    
    4,979Accrued restructuring
    
    
    4,786
    
    
    
    5,971Foreign deferred tax liability
    
    
    3,023
    
    
    
    4,358Accrued income taxes
    
    
    423
    
    
    
    407Deferred gain on sale of property
    
    
    163
    
    
    
    646Other
    
    
    4,790
    
    
    
    5,11132,571
    
    
    
    35,555Discontinued operations:Self-insured liability accrual
    
    
    7,982
    
    
    
    8,075Environmental remediation liabilities
    
    
    5,412
    
    
    
    5,638Accrued income taxes
    
    
    967
    
    
    
    948Other
    
    
    1,716
    
    
    
    2,19816,077
    
    
    
    16,859Total other deferred items and liabilities
    
    $
    48,648
    
    
    $
    52,414
 Note 7. Debt
     Page 11




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Note 8. Stockholders Equity
  Total Viad
    
    
    
    
    
    
    TotalStockholders
    
    
    Noncontrolling
    
    
    StockholdersEquity
    
    
    Interest
    
    
    Equity(in thousands)Balance at January 1, 2010
    
    $
    377,515
    
    
    $
    7,116
    
    
    $
    384,631Net income (loss)
    
    
    46
    
    
    
    (216
    )
    
    
    (170
    )Dividends on common stock
    
    
    (1,644
    )
    
    
    
    
    
    
    (1,644
    )Common stock purchased for treasury
    
    
    (573
    )
    
    
    
    
    
    
    (573
    )Employee benefit plans
    
    
    1,708
    
    
    
    
    
    
    
    1,708Unrealized foreign currency translation adjustment
    
    
    (3,910
    )
    
    
    
    
    
    
    (3,910
    )Unrealized loss on investments
    
    
    (19
    )
    
    
    
    
    
    
    (19
    )Prior service cost and net actuarial loss
    
    
    (1,666
    )
    
    
    
    
    
    
    (1,666
    )ESOP allocation adjustment
    
    
    750
    
    
    
    
    
    
    
    750Other
    
    
    6
    
    
    
    
    
    
    
    6Balance at June 30, 2010
    
    $
    372,213
    
    
    $
    6,900
    
    
    $
    379,113
  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 gain on investments
    
    
    61
    
    
    
    
    
    
    
    61Prior 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
 Note 9. 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




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Fair Value Measurements at June 30, 2010 UsingSignificantQuoted Prices
    
    
    Other
    
    
    Significantin Active
    
    
    Observable
    
    
    UnobservedJune 30,
    
    
    Markets
    
    
    Inputs
    
    
    Inputs2010
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)(in thousands)Assets:Money market funds
    
    $
    24,661
    
    
    $
    24,661
    
    
    $
    
    
    
    $
    Other mutual funds
    
    
    1,628
    
    
    
    1,628
    
    
    
    
    
    
    
    Total
    
    $
    26,289
    
    
    $
    26,289
    
    
    $
    
    
    
    $
    
     Page 13




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Note 10. Income Per Share
  Three months ended June 30,
    
    
    Six months ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009(in thousands, except per share data)Basic net income per shareNumerator:Net income attributable to Viad
    
    $
    3,028
    
    
    $
    5,399
    
    
    $
    46
    
    
    $
    6,902Less: Allocation to non-vested shares
    
    
    (71
    )
    
    
    (164
    )
    
    
    (1
    )
    
    
    (188
    )Net income allocated to Viad common stockholders
    
    $
    2,957
    
    
    $
    5,235
    
    
    $
    45
    
    
    $
    6,714Denominator:Weighted-average outstanding common shares
    
    
    20,059
    
    
    
    19,977
    
    
    
    20,055
    
    
    
    19,935Net income attributable to Viad common stockholders
    
    $
    0.15
    
    
    $
    0.26
    
    
    $
    
    
    
    $
    0.34Diluted net income per shareNumerator:Net income attributable to Viad
    
    $
    3,028
    
    
    $
    5,399
    
    
    $
    46
    
    
    $
    6,902Denominator:Weighted-average outstanding shares
    
    
    20,059
    
    
    
    19,977
    
    
    
    20,055
    
    
    
    19,935Additional dilutive shares related to share-based compensation
    
    
    316
    
    
    
    193
    
    
    
    283
    
    
    
    232Weighted-average outstanding and potentially dilutive shares
    
    
    20,375
    
    
    
    20,170
    
    
    
    20,338
    
    
    
    20,167Net income attributable to Viad common stockholders
    
    $
    0.15
    
    
    $
    0.26
    
    
    $
    
    
    
    $
    0.34
  Note 11. Income Taxes
  2010
    
    
    2009(in thousands)Computed income tax expense at statutory
federal income tax rate of 35%
    
    $
    640
    
    
    
    35.0
    %
    
    $
    3,810
    
    
    
    35.0
    %State income tax expense (benefit), net of
federal benefit or provision
    
    
    (34
    )
    
    
    (1.9
    %)
    
    
    339
    
    
    
    3.1
    %Change in enacted tax law
    
    
    1,279
    
    
    
    70.0
    %
    
    
    
    
    
    
    0.0
    %Other, net
    
    
    113
    
    
    
    6.2
    %
    
    
    63
    
    
    
    0.6
    %Income tax expense
    
    $
    1,998
    
    
    
    109.3
    %
    
    $
    4,212
    
    
    
    38.7
    %
   Page 14




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Note 12. Pension and Postretirement Benefits
  Domestic PlansPostretirement
    
    
    ForeignPension Plans
    
    
    Benefit Plans
    
    
    Pension Plans2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009(in thousands)Service cost
    
    $
    53
    
    
    $
    44
    
    
    $
    27
    
    
    $
    16
    
    
    $
    76
    
    
    $
    61Interest cost
    
    
    311
    
    
    
    324
    
    
    
    265
    
    
    
    271
    
    
    
    195
    
    
    
    186Expected return on plan assets
    
    
    (149
    )
    
    
    (161
    )
    
    
    (41
    )
    
    
    (52
    )
    
    
    (151
    )
    
    
    (128
    )Amortization of prior service cost (credit)
    
    
    10
    
    
    
    11
    
    
    
    (293
    )
    
    
    (323
    )
    
    
    
    
    
    
    Recognized net actuarial loss
    
    
    138
    
    
    
    91
    
    
    
    156
    
    
    
    76
    
    
    
    
    
    
    
    Net periodic benefit cost (credit)
    
    $
    363
    
    
    $
    309
    
    
    $
    114
    
    
    $
    (12
    )
    
    $
    120
    
    
    $
    119
  Domestic PlansPostretirement
    
    
    ForeignPension Plans
    
    
    Benefit Plans
    
    
    Pension Plans2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009(in thousands)Service cost
    
    $
    106
    
    
    $
    88
    
    
    $
    54
    
    
    $
    32
    
    
    $
    151
    
    
    $
    119Interest cost
    
    
    622
    
    
    
    648
    
    
    
    530
    
    
    
    542
    
    
    
    387
    
    
    
    364Expected return on plan assets
    
    
    (298
    )
    
    
    (322
    )
    
    
    (82
    )
    
    
    (104
    )
    
    
    (299
    )
    
    
    (250
    )Amortization of prior service cost (credit)
    
    
    20
    
    
    
    22
    
    
    
    (586
    )
    
    
    (646
    )
    
    
    
    
    
    
    Recognized net actuarial loss
    
    
    277
    
    
    
    180
    
    
    
    313
    
    
    
    150
    
    
    
    
    
    
    
    Net periodic benefit cost (credit)
    
    $
    727
    
    
    $
    616
    
    
    $
    229
    
    
    $
    (26
    )
    
    $
    239
    
    
    $
    233
   Page 16




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Note 13. Restructuring Charges and Recoveries
  Marketing &Events Group
    
    
    OtherConsolidation
    
    
    Restructurings
    
    
    Total(in thousands)Balance at January 1, 2010
    
    $
    8,628
    
    
    $
    3,027
    
    
    $
    11,655Restructuring charges
    
    
    2,325
    
    
    
    287
    
    
    
    2,612Cash payments
    
    
    (4,154
    )
    
    
    (862
    )
    
    
    (5,016
    )Adjustment to liability
    
    
    (785
    )
    
    
    (195
    )
    
    
    (980
    )Foreign currency translation adjustment
    
    
    (63
    )
    
    
    
    
    
    
    (63
    )Balance at June 30, 2010
    
    $
    5,951
    
    
    $
    2,257
    
    
    $
    8,208
 Note 14. Litigation, Claims and Other Contingencies
      Page 17




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Note 15. Segment Information
  Three months ended June 30,
    
    
    Six months ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009(in thousands)Revenues:Marketing & Events Group:U.S.
    
    $
    144,460
    
    
    $
    147,248
    
    
    $
    313,869
    
    
    $
    341,030International
    
    
    56,059
    
    
    
    52,657
    
    
    
    106,426
    
    
    
    95,934Intersegment eliminations
    
    
    (4,609
    )
    
    
    (4,546
    )
    
    
    (7,445
    )
    
    
    (5,543
    )195,910
    
    
    
    195,359
    
    
    
    412,850
    
    
    
    431,421Travel & Recreation Group
    
    
    22,389
    
    
    
    18,206
    
    
    
    29,802
    
    
    
    23,093$
    218,299
    
    
    $
    213,565
    
    
    $
    442,652
    
    
    $
    454,514Segment operating income (loss):Marketing & Events Group:U.S.
    
    $
    (2,297
    )
    
    $
    1,815
    
    
    $
    (2,346
    )
    
    $
    7,143International
    
    
    6,532
    
    
    
    5,700
    
    
    
    9,169
    
    
    
    9,4434,235
    
    
    
    7,515
    
    
    
    6,823
    
    
    
    16,586Travel & Recreation Group
    
    
    3,490
    
    
    
    2,293
    
    
    
    1,101
    
    
    
    (111
    )7,725
    
    
    
    9,808
    
    
    
    7,924
    
    
    
    16,475Corporate activities
    
    
    (2,058
    )
    
    
    (703
    )
    
    
    (2,702
    )
    
    
    (2,206
    )5,667
    
    
    
    9,105
    
    
    
    5,222
    
    
    
    14,269Interest income
    
    
    88
    
    
    
    132
    
    
    
    184
    
    
    
    393Interest expense
    
    
    (473
    )
    
    
    (425
    )
    
    
    (966
    )
    
    
    (845
    )Restructuring charges:Marketing & Events U.S.
    
    
    (272
    )
    
    
    (198
    )
    
    
    (2,325
    )
    
    
    (2,930
    )Travel & Recreation Group
    
    
    (235
    )
    
    
    
    
    
    
    (235
    )
    
    
    Corporate
    
    
    (52
    )
    
    
    
    
    
    
    (52
    )
    
    
    Income before income taxes
    
    $
    4,723
    
    
    $
    8,614
    
    
    $
    1,828
    
    
    $
    10,887
  Page 18




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June 30,
    
    
    December 31,2010
    
    
    2009(in thousands)Assets:Marketing & Events U.S.
    
    $
    250,841
    
    
    $
    245,255Marketing & Events International
    
    
    80,480
    
    
    
    78,450Travel & Recreation Group
    
    
    158,262
    
    
    
    147,090Corporate and other
    
    
    129,480
    
    
    
    138,391$
    619,063
    
    
    $
    609,186
 Note 16. Impact of Recent Accounting Pronouncements
    Note 17. Common Stock Repurchases
   Page 19




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Overview:
   Marketing & Events Group
 1.
    
    Marketing & Events U.S., which includes all domestic GES and affiliated
operations, including those services formerly provided under the Exhibitgroup/Giltspur
and Becker Group brands. The consolidation of the domestic Marketing & Events Group
operations is aimed to provide a fully integrated service delivery network through a
realigned sales organization, shared infrastructure and facilities, and a common
operational platform.
 2.
    
    Marketing & Events International, which includes all foreign operations of the
Marketing & Events Group and consists of two operating segments: Canada and EMEA
(Europe, Middle East, Africa). This reporting segment includes the operations of the
following companies: GES Exposition Services (Canada) Limited, Giltspur Exhibits of
Canada, Inc., Melville Exhibition and Event Services Limited and Melville Data Services
Limited (collectively Melville) and affiliates, SDD Exhibitions Limited and GES GmbH
& Co. KG.
     Page 20




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Travel & Recreation Group
  Viad Corp (Consolidated)
 
    
    Total revenues of $218.3 million compared to $213.6 million in the second quarter
of 2009
 
    
    Net income attributable to Viad of $3.0 million versus $5.4 million in the second
quarter of 2009
 
    
    Diluted income per share of $0.15 versus $0.26 in the second quarter of 2009
 
    
    Restructuring charges of $559,000 primarily related to reorganization activities
resulting from the elimination of certain positions
 
    
    Cash and cash equivalents totaled $134.0 million as of June 30, 2010
 
    
    Debt was $10.4 million as of June 30, 2010
 Marketing & Events U.S.
 
    
    Revenues of $144.5 million, a decrease of 1.9 percent from the second quarter of
2009
 
    
    Segment operating loss of $2.3 million, as compared to income of $1.8 million in
the second quarter of 2009
 Marketing & Events International
 
    
    Revenues of $56.1 million, an increase of 6.5 percent from the second quarter of
2009
 
    
    Segment operating income of $6.5 million, an increase of 14.6 percent from the
second quarter of 2009
 Travel & Recreation Group
 
    
    Revenues of $22.4 million, an increase of 23.0 percent from the second quarter of
2009
 
    
    Segment operating income of $3.5 million, as compared to $2.3 million from the
second quarter of 2009
 Non-GAAP Measure:
   Page 21




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Three months ended June 30,
    
    
    Six months ended June 30,2010
    
    
    2009
    
    
    2010
    
    
    2009(in thousands)Adjusted EBITDA
    
    $
    12,491
    
    
    $
    16,305
    
    
    $
    17,014
    
    
    $
    25,494Interest expense
    
    
    (473
    )
    
    
    (425
    )
    
    
    (966
    )
    
    
    (845
    )Income tax expense
    
    
    (1,790
    )
    
    
    (3,311
    )
    
    
    (1,998
    )
    
    
    (4,212
    )Depreciation and amortization
    
    
    (7,200
    )
    
    
    (7,170
    )
    
    
    (14,004
    )
    
    
    (13,535
    )Net income attributable to Viad
    
    $
    3,028
    
    
    $
    5,399
    
    
    $
    46
    
    
    $
    6,902
  Results of Operations:
 Comparison of Second Quarter of 2010 to the Second Quarter of 2009
   Revenues
    
    
    Segment Operating ResultsWeighted Average
    
    
    Effect of Rate
    
    
    Weighted Average
    
    
    Effect of RateExchange Rates
    
    
    Variance
    
    
    Exchange Rates
    
    
    Variance2010
    
    
    2009
    
    
    (thousands)
    
    
    2010
    
    
    2009
    
    
    (thousands)Marketing & Events Group:Canada
    
    $
    0.97
    
    
    $
    0.85
    
    
    $
    2,204
    
    
    $
    0.97
    
    
    $
    0.81
    
    
    $
    300U.K.
    
    $
    1.50
    
    
    $
    1.57
    
    
    $
    (970
    )
    
    $
    1.50
    
    
    $
    1.57
    
    
    $
    (64
    )Travel & Recreation Group:Canada
    
    $
    0.96
    
    
    $
    0.87
    
    
    $
    1,554
    
    
    $
    0.95
    
    
    $
    0.89
    
    
    $
    241
   Page 22




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Marketing & Events Group.
         Page 23




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Travel & Recreation Group.
    Corporate Activities.
 Restructuring Charges.
 Income Taxes.
 Comparison of First Six Months of 2010 to the First Six Months of 2009
   Page 24




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Revenues
    
    
    Segment Operating ResultsWeighted Average
    
    
    Effect of Rate
    
    
    Weighted Average
    
    
    Effect of RateExchange Rates
    
    
    Variance
    
    
    Exchange Rates
    
    
    Variance2010
    
    
    2009
    
    
    (thousands)
    
    
    2010
    
    
    2009
    
    
    (thousands)Marketing & Events Group:Canada
    
    $
    0.96
    
    
    $
    0.82
    
    
    $
    6,365
    
    
    $
    0.97
    
    
    $
    0.79
    
    
    $
    525U.K.
    
    $
    1.52
    
    
    $
    1.51
    
    
    $
    788
    
    
    $
    1.51
    
    
    $
    1.52
    
    
    $
    39Travel & Recreation Group:Canada
    
    $
    0.96
    
    
    $
    0.85
    
    
    $
    2,718
    
    
    $
    0.95
    
    
    $
    0.97
    
    
    $
    81
  Marketing & Events Group.
  Travel & Recreation Group.
 Corporate Activities.
 Restructuring Charges.
 Income Taxes.
  Page 25




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Liquidity and Capital Resources:
          Page 26




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




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Income taxes
  Page 28




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Insurance liabilities
 Pension and postretirement benefits
       Page 30




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Share-based compensation
   Impact of Recent Accounting Pronouncements:
     Page 31




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Forward-Looking Statements:
  
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
    Weighted Average
    
    
    Effect of RateExchange Rates
    
    
    Variance2010
    
    
    2009
    
    
    (thousands)Canadian Operations:Marketing & Events Group
    
    $
    0.97
    
    
    $
    0.81
    
    
    $
    300Travel & Recreation Group
    
    $
    0.95
    
    
    $
    0.89
    
    
    $
    241United Kingdom Operations:Marketing & Events Group
    
    $
    1.50
    
    
    $
    1.57
    
    
    $
    (64
    )
  Page 32




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Weighted Average
    
    
    Effect of RateExchange Rates
    
    
    Variance2010
    
    
    2009
    
    
    (thousands)Canadian Operations:Marketing & Events Group
    
    $
    0.97
    
    
    $
    0.79
    
    
    $
    525Travel & Recreation Group
    
    $
    0.95
    
    
    $
    0.97
    
    
    $
    81United Kingdom Operations:Marketing & Events Group
    
    $
    1.51
    
    
    $
    1.52
    
    
    $
    39
   
 
 Item 4. Controls and Procedures.
    Page 33




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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)None
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    160,681Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    160,681
 (1)
    
    On August 8, 2007, Viad announced its intent, under an authorization by its
Board of Directors, to repurchase up to one 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 2010. Shares repurchased to date totaled
839,319. The authorization of the Board of Directors does not have an expiration date.
The terms of Viads $75 million secured revolving credit facility, as amended as of
November 20, 2009, restrict the Company from paying more than $5 million in dividends
in the aggregate in any calendar year and also 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. 
 
 Item 5. Other Information
  (a)
    
    The annual meeting of stockholders of Viad Corp was held on May 18, 2010.(b)
    
    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
    
    
    Vote
    
    
    
    
    
    BrokerVote
    
    
    Against
    
    
    Abstentions
    
    
    Non-VoteIsabella Cunningham
    
    
    16,045,418
    
    
    
    333,575
    
    
    
    34,080
    
    
    
    768,644Jess Hay
    
    
    15,117,729
    
    
    
    1,262,345
    
    
    
    32,999
    
    
    
    768,644Albert M. Teplin
    
    
    16,129,059
    
    
    
    250,323
    
    
    
    33,691
    
    
    
    768,644
 (2)
    
    The ratification of the appointment of Deloitte & Touche LLP as Viads
independent registered public accounting firm for fiscal year 2010:
 Affirmative Vote
    
    
    17,050,328Against
    
    
    95,610Abstentions
    
    
    35,779
 (c)
    
    Not applicable.
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##### Table of Contents



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)August 6, 2010
(Date)
    
    By:
    
    /s/ G. Michael Latta

G. Michael LattaVice President  Controller(Chief Accounting Officerand Authorized Officer)
  Page 35