##### 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, 2008
 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
  Delaware
    
    36-1169950(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer Identification No.)
 1850 North Central Avenue, Suite 800 Phoenix, Arizona
    
    85004-4545(Address of principal executive offices)
    
    (Zip Code)
 (602) 207-4000
  þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller 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 Statements.Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.Item 3. Quantitative and Qualitative Disclosures About Market Risk.Item 4. Controls and Procedures.PART IIOTHER INFORMATIONItem 2. Unregistered Sales of Equity Securities and Use of Proceeds.Item 6. Exhibits.SIGNATURESEX-31.1EX-31.2EX-32.1EX-32.2    Table of Contents  
 PART IFINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 VIAD CORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 March 31, 2008
    
    
    December 31, 2007(in thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    108,502
    
    
    $
    165,069Accounts receivable, net of allowance for doubtful accounts
of $2,017 and $1,569, respectively
    
    
    91,535
    
    
    
    53,099Inventories
    
    
    51,467
    
    
    
    52,664Deferred income taxes
    
    
    20,216
    
    
    
    20,567Other current assets
    
    
    17,958
    
    
    
    15,222Total current assets
    
    
    289,678
    
    
    
    306,621Property and equipment, net
    
    
    171,826
    
    
    
    168,893Other investments and assets
    
    
    29,141
    
    
    
    30,312Deferred income taxes
    
    
    28,971
    
    
    
    34,704Goodwill
    
    
    237,836
    
    
    
    228,170Other intangible assets, net
    
    
    26,778
    
    
    
    12,663Total Assets
    
    $
    784,230
    
    
    $
    781,363LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    70,127
    
    
    $
    68,442Other current liabilities
    
    
    107,678
    
    
    
    117,152Current portion of long-term debt and capital lease obligations
    
    
    2,515
    
    
    
    2,462Total current liabilities
    
    
    180,320
    
    
    
    188,056Long-term debt and capital lease obligations
    
    
    11,442
    
    
    
    11,714Pension and postretirement benefits
    
    
    23,282
    
    
    
    23,099Other deferred items and liabilities
    
    
    79,038
    
    
    
    82,665Commitments and contingencies (Note 13)Minority interest
    
    
    5,832
    
    
    
    5,984Common stock and other equity:Common stock, $1.50 par value, 200,000,000 shares
authorized, 24,934,981 shares issued
    
    
    37,402
    
    
    
    37,402Additional capital
    
    
    625,510
    
    
    
    635,099Retained earnings
    
    
    67,376
    
    
    
    51,445Unearned employee benefits and other
    
    
    (8,602
    )
    
    
    (8,754
    )Accumulated other comprehensive income (loss):Unrealized gain on investments
    
    
    351
    
    
    
    481Cumulative foreign currency translation adjustments
    
    
    45,802
    
    
    
    47,905Unrecognized net actuarial loss and prior service credit
    
    
    (1,832
    )
    
    
    (1,697
    )Common stock in treasury, at cost, 4,234,504 and 4,363,956
shares, respectively
    
    
    (281,691
    )
    
    
    (292,036
    )Total common stock and other equity
    
    
    484,316
    
    
    
    469,845Total Liabilities and Stockholders Equity
    
    $
    784,230
    
    
    $
    781,363
  Page 2




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##### Table of Contents



VIAD CORP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 Three months ended March 31,2008
    
    
    2007(in thousands, except per share data)Revenues:Convention show services
    
    $
    268,881
    
    
    $
    238,851Exhibit design and construction
    
    
    60,712
    
    
    
    40,376Travel and recreation services
    
    
    5,852
    
    
    
    4,462Total revenues
    
    
    335,445
    
    
    
    283,689Costs and expenses:Costs of services
    
    
    241,787
    
    
    
    212,875Costs of products sold
    
    
    65,078
    
    
    
    45,696Corporate activities
    
    
    2,434
    
    
    
    2,309Restructuring charge
    
    
    
    
    
    
    1,210Interest income
    
    
    (1,100
    )
    
    
    (1,789
    )Interest expense
    
    
    463
    
    
    
    466Total costs and expenses
    
    
    308,662
    
    
    
    260,767Income before income taxes and minority interest
    
    
    26,783
    
    
    
    22,922Income tax expense
    
    
    10,190
    
    
    
    8,929Minority interest
    
    
    (152
    )
    
    
    (57
    )Income from continuing operations
    
    
    16,745
    
    
    
    14,050Loss from discontinued operations
    
    
    
    
    
    
    (94
    )Net income
    
    $
    16,745
    
    
    $
    13,956Diluted income per common shareIncome from continuing operations
    
    $
    0.81
    
    
    $
    0.66Loss from discontinued operations
    
    
    
    
    
    
    Net income
    
    $
    0.81
    
    
    $
    0.66Weighted-average outstanding and potentially dilutive
common shares
    
    
    20,612
    
    
    
    21,128Basic income per common shareIncome from continuing operations
    
    $
    0.83
    
    
    $
    0.68Loss from discontinued operations
    
    
    
    
    
    
    Net income
    
    $
    0.83
    
    
    $
    0.68Weighted-average outstanding common shares
    
    
    20,196
    
    
    
    20,651Dividends 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 31,2008
    
    
    2007(in thousands)Net income
    
    $
    16,745
    
    
    $
    13,956Other comprehensive income (loss):Unrealized gains (losses) on investments:Holding gains (losses) arising during the period, net of tax
    
    
    (130
    )
    
    
    12Unrealized gains on derivative financial instruments:Holding gains arising during the period, net of tax
    
    
    
    
    
    
    16Unrealized foreign currency translation adjustments
    
    
    (2,103
    )
    
    
    1,418Pension and postretirement benefit plans:Amortization of prior service credit, net of tax
    
    
    (206
    )
    
    
    (188
    )Amortization of net actuarial loss, net of tax
    
    
    71
    
    
    
    148Other comprehensive income (loss)
    
    
    (2,368
    )
    
    
    1,406Comprehensive income
    
    $
    14,377
    
    
    $
    15,362
  Page 4




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VIAD CORP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three months ended March 31,2008
    
    
    2007(in thousands)Cash flows from operating activities:Net income
    
    $
    16,745
    
    
    $
    13,956Adjustments to reconcile net income to net cash provided by (used in)
operating activities:Depreciation and amortization
    
    
    6,628
    
    
    
    5,196Deferred income taxes
    
    
    2,540
    
    
    
    (3,619
    )Loss from discontinued operations
    
    
    
    
    
    
    94Restructuring charge
    
    
    
    
    
    
    1,210Losses (gains) on dispositions of property and other assets
    
    
    3
    
    
    
    (68
    )Share-based compensation expense
    
    
    2,692
    
    
    
    2,326Tax benefits from share-based compensation arrangements
    
    
    283
    
    
    
    1,093Excess tax benefits from share-based compensation arrangements
    
    
    (277
    )
    
    
    (1,000
    )Other non-cash items, net
    
    
    1,196
    
    
    
    1,103Change in operating assets and liabilities:Receivables
    
    
    (37,497
    )
    
    
    (30,881
    )Inventories
    
    
    2,225
    
    
    
    789Accounts payable
    
    
    2,772
    
    
    
    31,391Restructuring liabilities
    
    
    (478
    )
    
    
    (1,237
    )Accrued compensation
    
    
    (16,571
    )
    
    
    (8,358
    )Other assets and liabilities, net
    
    
    (1,398
    )
    
    
    (11,310
    )Net cash provided by (used in) operating activities
    
    
    (21,137
    )
    
    
    685Cash flows from investing activities:Capital expenditures
    
    
    (12,043
    )
    
    
    (11,263
    )Proceeds from sale of short-term investments
    
    
    1,985
    
    
    
    Acquisition of businesses, net of cash acquired
    
    
    (23,334
    )
    
    
    (29,137
    )Proceeds from dispositions of property and other assets
    
    
    25
    
    
    
    479Net cash used in investing activities
    
    
    (33,367
    )
    
    
    (39,921
    )Cash flows from financing activities:Payments on debt and capital lease obligations
    
    
    (722
    )
    
    
    (584
    )Dividends paid on common stock
    
    
    (828
    )
    
    
    (840
    )Excess tax benefits from share-based compensation arrangements
    
    
    277
    
    
    
    1,000Proceeds from exercise of stock options
    
    
    573
    
    
    
    630Common stock purchased for treasury
    
    
    (1,632
    )
    
    
    (10,480
    )Net cash used in financing activities
    
    
    (2,332
    )
    
    
    (10,274
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    269
    
    
    
    62Net decrease in cash and cash equivalents
    
    
    (56,567
    )
    
    
    (49,448
    )Cash and cash equivalents, beginning of year
    
    
    165,069
    
    
    
    178,073Cash and cash equivalents, end of period
    
    $
    108,502
    
    
    $
    128,625Supplemental disclosure of cash flow informationCash paid during the period for:Income taxes
    
    $
    7,523
    
    
    $
    5,406Interest
    
    $
    457
    
    
    $
    258Equipment acquired under capital leases
    
    $
    313
    
    
    $
    365
  Page 5




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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
    Page 6




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Weighted-Average
    
    OptionsShares
    
    Exercise Price
    
    ExercisableOptions outstanding at January 1, 2008
    
    
    727,438
    
    
    $
    24.93
    
    
    
    548,117Granted
    
    
    26,600
    
    
    
    33.81Exercised
    
    
    (15,664
    )
    
    
    24.36Forfeited
    
    
    (2,900
    )
    
    
    26.07Options outstanding at March 31, 2008
    
    
    735,474
    
    
    
    25.25
    
    
    
    590,340
  Options Outstanding
    
    Options ExercisableWeighted-Average
    
    Weighted-
    
    
    
    
    
    Weighted-Remaining
    
    Average
    
    
    
    
    
    AverageRange of Exercise Prices
    
    Shares
    
    Contractual Life
    
    Exercise Price
    
    Shares
    
    Exercise Price$18.40 to $23.28
    
    
    125,344
    
    
    4.5 years
    
    $
    19.61
    
    
    
    125,344
    
    
    $
    19.61$23.32 to $24.05
    
    
    167,593
    
    
    2.2 years
    
    
    23.76
    
    
    
    167,593
    
    
    
    23.76$24.22 to $26.07
    
    
    160,271
    
    
    3.4 years
    
    
    25.14
    
    
    
    143,344
    
    
    
    25.25$26.31 to $26.47
    
    
    151,790
    
    
    3.9 years
    
    
    26.32
    
    
    
    88,310
    
    
    
    26.32$26.49 to $38.44
    
    
    130,476
    
    
    4.0 years
    
    
    31.48
    
    
    
    65,749
    
    
    
    29.13$18.40 to $38.44
    
    
    735,474
    
    
    3.5 years
    
    
    25.25
    
    
    
    590,340
    
    
    
    24.22
    Page 7




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Restricted Stock
    
    PBRSWeighted-Average
    
    
    
    
    
    Weighted-AverageGrant Date
    
    
    
    
    
    Grant DateShares
    
    Fair Value
    
    Shares
    
    Fair ValueBalance at January
1, 2008
    
    
    345,800
    
    
    $
    32.40
    
    
    
    91,912
    
    
    $
    32.85Granted
    
    
    99,985
    
    
    
    33.81
    
    
    
    55,000
    
    
    
    33.81Vested
    
    
    (86,600
    )
    
    
    26.30
    
    
    
    (52,084
    )
    
    
    30.79Balance at March
31, 2008
    
    
    359,185
    
    
    
    34.26
    
    
    
    94,828
    
    
    
    34.55
  Note 3. Acquisition of Businesses
   (in thousands)Cash and cash equivalents
    
    $
    1,263Accounts receivable
    
    
    1,387Inventories
    
    
    1,028Other current assets
    
    
    1,401Property and equipment
    
    
    1,673Goodwill
    
    
    11,848Other intangible assets
    
    
    14,969Total assets acquired
    
    
    33,569Accounts payable
    
    
    (1,675
    )Customer deposits
    
    
    (592
    )Other current liabilities
    
    
    (1,559
    )Deferred taxes
    
    
    (4,942
    )Other non-current liabilities
    
    
    (204
    )Total liabilities assumed
    
    
    (8,972
    )Purchase price
    
    $
    24,597
 Page 8




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(in thousands, exceptper share data)Revenue
    
    $
    294,406Income from continuing operations
    
    $
    13,389Net income
    
    $
    13,295Diluted net income per share
    
    $
    0.63Basic net income per share
    
    $
    0.64
 Note 4. Inventories
  March 31,
    
    
    December 31,2008
    
    
    2007(in thousands)Raw materials
    
    $
    29,509
    
    
    $
    28,613Work in process
    
    
    21,958
    
    
    
    24,051Inventories
    
    $
    51,467
    
    
    $
    52,664
 Note 5. Property and Equipment
  March 31,
    
    
    December 31,2008
    
    
    2007(in thousands)Land
    
    $
    26,817
    
    
    $
    27,495Buildings and leasehold improvements
    
    
    95,302
    
    
    
    95,741Equipment and other
    
    
    269,185
    
    
    
    261,917391,304
    
    
    
    385,153Accumulated depreciation
    
    
    (219,478
    )
    
    
    (216,260
    )Property and equipment, net
    
    $
    171,826
    
    
    $
    168,893
  Page 9




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Note 6. Goodwill and Other Intangible Assets
  Experiential
    
    
    Travel andGES
    
    
    Marketing
    
    
    Recreation
    
    
    Total(in thousands)Balance at January 1, 2008
    
    $
    185,676
    
    
    $
    
    
    
    $
    42,494
    
    
    $
    228,170Business acquisition
    
    
    
    
    
    
    11,848
    
    
    
    
    
    
    
    11,848Foreign currency translation adjustments
    
    
    (587
    )
    
    
    
    
    
    
    (1,595
    )
    
    
    (2,182
    )Balance at March 31, 2008
    
    $
    185,089
    
    
    $
    11,848
    
    
    $
    40,899
    
    
    $
    237,836
  Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingValue
    
    
    Amortization
    
    
    Value(in thousands)Amortized intangible assets:Customer contracts and relationships
    
    $
    10,099
    
    
    $
    (874
    )
    
    $
    9,225Design libraries
    
    
    3,304
    
    
    
    (92
    )
    
    
    3,212Non-compete agreements
    
    
    3,193
    
    
    
    (1,473
    )
    
    
    1,720Proprietary technology
    
    
    951
    
    
    
    (163
    )
    
    
    788Other
    
    
    94
    
    
    
    (23
    )
    
    
    7117,641
    
    
    
    (2,625
    )
    
    
    15,016Unamortized intangible assets:Trademarks and trade names
    
    
    11,716
    
    
    
    
    
    
    
    11,716Other
    
    
    46
    
    
    
    
    
    
    
    4611,762
    
    
    
    
    
    
    
    11,762Total
    
    $
    29,403
    
    
    $
    (2,625
    )
    
    $
    26,778
  Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingValue
    
    
    Amortization
    
    
    Value(in thousands)Amortized intangible assets:Customer contracts and relationships
    
    $
    3,555
    
    
    $
    (548
    )
    
    $
    3,007Non-compete agreements
    
    
    2,050
    
    
    
    (1,202
    )
    
    
    848Proprietary technology
    
    
    582
    
    
    
    (90
    )
    
    
    492Other
    
    
    97
    
    
    
    (18
    )
    
    
    796,284
    
    
    
    (1,858
    )
    
    
    4,426Unamortized intangible assets:Trademarks and trade names
    
    
    8,207
    
    
    
    
    
    
    
    8,207Other
    
    
    30
    
    
    
    
    
    
    
    308,237
    
    
    
    
    
    
    
    8,237Total
    
    $
    14,521
    
    
    $
    (1,858
    )
    
    $
    12,663
 Page 10




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(in thousands)2008
    
    $
    2,4352009
    
    $
    3,0782010
    
    $
    2,2602011
    
    $
    1,9122012 and thereafter
    
    $
    5,331
 Note 7. Accrued Liabilities and Other
  March 31,
    
    
    December 31,2008
    
    
    2007(in thousands)Continuing operations:Customer deposits
    
    $
    44,922
    
    
    $
    47,132Accrued compensation
    
    
    19,963
    
    
    
    34,248Self-insured liability accrual
    
    
    7,924
    
    
    
    7,984Accrued sales and use taxes
    
    
    4,098
    
    
    
    3,406Accrued restructuring
    
    
    2,908
    
    
    
    3,015Accrued dividends
    
    
    860
    
    
    
    869Accrued income taxes
    
    
    500
    
    
    
    787Other
    
    
    22,277
    
    
    
    15,400103,452
    
    
    
    112,841Discontinued operations:Environmental remediation liabilities
    
    
    2,510
    
    
    
    2,510Self-insured liability accrual
    
    
    532
    
    
    
    591Other
    
    
    1,184
    
    
    
    1,2104,226
    
    
    
    4,311Total other current liabilities
    
    $
    107,678
    
    
    $
    117,152
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March 31,
    
    
    December 31,2008
    
    
    2007(in thousands)Continuing operations:Accrued income taxes
    
    $
    17,570
    
    
    $
    17,354Self-insured liability accrual
    
    
    14,371
    
    
    
    13,931Accrued compensation
    
    
    6,000
    
    
    
    8,286Accrued restructuring
    
    
    5,571
    
    
    
    6,006Foreign deferred tax liability
    
    
    3,294
    
    
    
    5,086Deferred gain on sale of property
    
    
    2,336
    
    
    
    2,578Other
    
    
    10,622
    
    
    
    9,97359,764
    
    
    
    63,214Discontinued operations:Self-insured liability accrual
    
    
    10,253
    
    
    
    10,351Environmental remediation liabilities
    
    
    5,745
    
    
    
    5,806Accrued income taxes
    
    
    871
    
    
    
    856Other
    
    
    2,405
    
    
    
    2,43819,274
    
    
    
    19,451Total other deferred items and liabilities
    
    $
    79,038
    
    
    $
    82,665
 Note 8. Debt
   Page 12




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Note 9. Income Per Share
  Three months ended March 31,2008
    
    
    2007(in thousands, except per share data)Income from continuing operations
    
    $
    16,745
    
    
    $
    14,050Weighted-average outstanding common shares
    
    
    20,196
    
    
    
    20,651Additional dilutive shares related to
share-based compensation
    
    
    416
    
    
    
    477Weighted-average outstanding and potentially
dilutive common shares
    
    
    20,612
    
    
    
    21,128Diluted income per share from
continuing operations
    
    $
    0.81
    
    
    $
    0.66Basic income per share from
continuing operations
    
    $
    0.83
    
    
    $
    0.68
  Note 10. Income Taxes
  2008
    
    
    2007(in thousands)Computed income tax expense at statutory
federal income tax rate of 35%
    
    $
    9,374
    
    
    
    35.0
    %
    
    $
    8,023
    
    
    
    35.0
    %State income taxes, net of federal benefit
    
    
    1,367
    
    
    
    5.1
    %
    
    
    1,370
    
    
    
    6.0
    %Other, net
    
    
    (551
    )
    
    
    (2.1
    %)
    
    
    (464
    )
    
    
    (2.0
    %)Income tax expense
    
    $
    10,190
    
    
    
    38.0
    %
    
    $
    8,929
    
    
    
    39.0
    %
   Page 13




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Continuing
    
    
    DiscontinuedOperations
    
    
    Operations
    
    
    Total(in thousands)Balance at January 1, 2008
    
    $
    12,802
    
    
    $
    636
    
    
    $
    13,438Foreign currency translation adjustment
    
    
    (139
    )
    
    
    
    
    
    
    (139
    )Balance at March 31, 2008
    
    $
    12,663
    
    
    $
    636
    
    
    $
    13,299
    Note 11. Pension and Postretirement Benefits
  Domestic PlansPostretirement
    
    
    ForeignPension Plans
    
    
    Benefit Plans
    
    
    Pension Plans2008
    
    
    2007
    
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007(in thousands)Service cost
    
    $
    50
    
    
    $
    47
    
    
    $
    16
    
    
    $
    19
    
    
    $
    96
    
    
    $
    97Interest cost
    
    
    305
    
    
    
    274
    
    
    
    250
    
    
    
    260
    
    
    
    193
    
    
    
    155Expected return on plan assets
    
    
    (194
    )
    
    
    (186
    )
    
    
    (82
    )
    
    
    (93
    )
    
    
    (188
    )
    
    
    (69
    )Amortization of prior service cost (credit)
    
    
    18
    
    
    
    52
    
    
    
    (355
    )
    
    
    (362
    )
    
    
    
    
    
    
    Recognized net actuarial loss (gain)
    
    
    91
    
    
    
    109
    
    
    
    69
    
    
    
    136
    
    
    
    
    
    
    
    (272
    )Net periodic benefit cost (credit)
    
    $
    270
    
    
    $
    296
    
    
    $
    (102
    )
    
    $
    (40
    )
    
    $
    101
    
    
    $
    (89
    )
 
 Note 12. Restructuring Charges and Recoveries
  Page 14




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2007
    
    
    2004
    
    
    2002
    
    
    2001Restructuring
    
    
    Restructuring
    
    
    Restructuring
    
    
    Restructuring
    
    
    Total(in thousands)Balance at January 1, 2008
    
    $
    1,472
    
    
    $
    897
    
    
    $
    848
    
    
    $
    5,804
    
    
    $
    9,021Cash payments
    
    
    (61
    )
    
    
    
    
    
    
    (53
    )
    
    
    (364
    )
    
    
    (478
    )Adjustment to liability
    
    
    
    
    
    
    (61
    )
    
    
    
    
    
    
    
    
    
    
    (61
    )Foreign currency translation adjustment
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )Balance at March 31, 2008
    
    $
    1,408
    
    
    $
    836
    
    
    $
    795
    
    
    $
    5,440
    
    
    $
    8,479
 Note 13. Litigation, Claims and Other Contingencies
    Page 15




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Note 14. Segment Information
  Three months ended March 31,2008
    
    
    2007(in thousands)Revenues:GES
    
    $
    285,675
    
    
    $
    244,885Experiential Marketing Services
    
    
    43,918
    
    
    
    34,342Travel and Recreation Services
    
    
    5,852
    
    
    
    4,462$
    335,445
    
    
    $
    283,689Segment operating income (loss):GES
    
    $
    35,848
    
    
    $
    32,206Experiential Marketing Services
    
    
    (4,121
    )
    
    
    (4,675
    )Travel and Recreation Services
    
    
    (3,147
    )
    
    
    (2,413
    )28,580
    
    
    
    25,118Corporate activities
    
    
    (2,434
    )
    
    
    (2,309
    )26,146
    
    
    
    22,809Interest income
    
    
    1,100
    
    
    
    1,789Interest expense
    
    
    (463
    )
    
    
    (466
    )Restructuring charge
    
    
    
    
    
    
    (1,210
    )Income before income taxes and minority interest
    
    $
    26,783
    
    
    $
    22,922
 March 31,
    
    
    December 31,2008
    
    
    2007(in thousands)Assets:GES
    
    $
    395,309
    
    
    $
    372,303Experiential Marketing Services
    
    
    108,999
    
    
    
    77,279Travel and Recreation Services
    
    
    128,829
    
    
    
    139,465Corporate and other
    
    
    151,093
    
    
    
    192,316$
    784,230
    
    
    $
    781,363
 Page 16




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Note 15. Impact of Recent Accounting Pronouncements
       Page 17




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Note 16. Common Stock Repurchases
  Note 17. Discontinued Operations
  Page 18




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Overview:
   GES 
 Experiential
Marketing Services 
 Travel and Recreation Services 
  Viad Corp (Consolidated)
 
    
    Total revenues of $335.4 million, an increase of 18.2 percent from 2007
    
    Net income of $16.7 million, an increase of 20.0 percent from 2007
    
    Diluted income per share of $0.81, an increase of 22.7 percent from 2007
    
    Cash and cash equivalents totaled $108.5 million as of March 31, 2008
    
    Debt was $14.0 million as of March 31, 2008
    
    Viad completed the acquisition of Becker Group on January 4, 2008 for $24.6 million
 Page 19




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GES
 
    
    Revenues of $285.7 million, an increase of 16.7 percent from 2007
    
    Segment operating income of $35.8 million, an increase of 11.3 percent from 2007
 Experiential Marketing Services
 
    
    Revenues of $43.9 million, an increase of 27.9 percent from 2007
    
    Segment operating loss of $4.1 million, compared to a loss of $4.7 million in the
first quarter of 2007
 Travel and Recreation Services
 
    
    Revenues of $5.9 million, an increase of 31.2 percent from 2007
    
    Segment operating loss of $3.1 million, compared to a loss of $2.4 million in the
first quarter of 2007
 Non-GAAP Measure:
    Three months ended March 31,2008
    
    
    2007(in thousands)Adjusted EBITDA
    
    $
    34,026
    
    
    $
    28,641Interest expense
    
    
    (463
    )
    
    
    (466
    )Income tax expense
    
    
    (10,190
    )
    
    
    (8,929
    )Depreciation and amortization
    
    
    (6,628
    )
    
    
    (5,196
    )Loss from discontinued operations
    
    
    
    
    
    
    (94
    )Net income
    
    $
    16,745
    
    
    $
    13,956
   Results of Operations:
 Comparison of First Quarter of 2008 to the First Quarter of 2007
  Page 20




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GES.
   Experiential Marketing Services.
   Travel and Recreation Services.
  Page 21




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Interest Income.
 Liquidity and Capital Resources:
      Page 22




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Off-Balance Sheet Arrangements:
  Critical Accounting Policies and Estimates:
  Page 23




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Goodwill and other intangible assets
  Income taxes
    Insurance liabilities
 Page 24




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Pension and postretirement benefits
      Share-based compensation
   Page 25




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Impact of Recent Accounting Pronouncements:
       Page 26




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Forward-Looking Statements:
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
    Page 27




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Item 4. Controls and Procedures.
   Page 28




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PART IIOTHER INFORMATION
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  ISSUER PURCHASES OF EQUITY SECURITIES
 Maximum Number (orApproximate DollarTotal Number of
    
    Value) of SharesShares Purchased as
    
    that May Yet BeTotal Number
    
    Average
    
    Part of Publicly
    
    Purchased Under theof Shares
    
    Price Paid
    
    Announced Plans or
    
    Plans orPeriod
    
    Purchased (#)
    
    Per Share ($)
    
    Programs
    
    Programs (1),(2)January 2008
    
    
    16,513
    
    
    
    30.96
    
    
    
    
    
    
    
    741,800February 2008
    
    
    33,226
    
    
    
    33.38
    
    
    
    
    
    
    
    741,800March 2008
    
    
    322
    
    
    
    36.23
    
    
    
    
    
    
    
    741,800Total
    
    
    50,061
    
    
    
    32.60
    
    
    
    
    
    
    
    741,800
 
 (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 repurchased during the first quarter of 2008. Shares repurchased in 2007 and
2006 under these programs totaled 781,700 and 1,476,500, respectively. The authorizations
of the Board of Directors do not have expiration dates.(2)
    
    Under authorization by the Board of Directors, Viad may also repurchase, at
prevailing prices on the open market, its common stock for the purpose of replacing
shares issued upon exercise of stock options and in connection with other stock
compensation plans. The last repurchase by Viad under this program occurred in May 2003.
The authorization of the Board of Directors does not have an expiration date. Page 29




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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 9, 2008
    By
    /s/ G. Michael Latta(Date)
    
    G. Michael LattaVice President - Controller
(Chief Accounting Officer
and Authorized Officer) Page 30