##### 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, 2011
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number: 001-11015
 VIAD CORP
 (Exact name of registrant as specified in its charter)
 Delaware
    
    36-1169950(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer Identification No.)1850 North Central Avenue, Suite 1900Phoenix, Arizona
    
    85004-4545(Address of principal executive offices)
    
    (Zip Code)
 (602) 207-4000
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Small reporting company o(Do not check if a smaller reporting company)
 o þ




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TABLE OF CONTENTS  PART IFINANCIAL INFORMATIONItem 1. Financial StatementsCONDENSED CONSOLIDATED BALANCE SHEETSCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONSCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMECONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. Controls and ProceduresPART IIOTHER INFORMATIONItem 1A. Risk FactorsItem 2. Unregistered Sales of Equity Securities and Use of ProceedsItem 6. ExhibitsSIGNATURESEX-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)
 June 30, 2011
    
    
    December 31, 2010(in thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    107,348
    
    
    $
    145,841Accounts receivable, net of allowance for doubtful accounts
of $1,332 and $1,172, respectively
    
    
    89,889
    
    
    
    47,187Inventories
    
    
    30,946
    
    
    
    38,670Deferred income taxes
    
    
    20,901
    
    
    
    22,057Other current assets
    
    
    22,777
    
    
    
    17,160Total current assets
    
    
    271,861
    
    
    
    270,915Property and equipment, net
    
    
    170,651
    
    
    
    149,346Other investments and assets
    
    
    32,576
    
    
    
    31,363Deferred income taxes
    
    
    35,158
    
    
    
    35,875Goodwill
    
    
    133,827
    
    
    
    127,441Other intangible assets, net
    
    
    1,650
    
    
    
    1,563Total Assets
    
    $
    645,723
    
    
    $
    616,503LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    60,183
    
    
    $
    47,933Other current liabilities
    
    
    96,158
    
    
    
    96,749Current portion of long-term debt and capital lease obligations
    
    
    2,299
    
    
    
    6,639Total current liabilities
    
    
    158,640
    
    
    
    151,321Long-term debt and capital lease obligations
    
    
    1,950
    
    
    
    2,438Pension and postretirement benefits
    
    
    33,186
    
    
    
    33,008Other deferred items and liabilities
    
    
    45,390
    
    
    
    43,025Total liabilities
    
    
    239,166
    
    
    
    229,792Commitments and contingencies (Note 15)Stockholders equity:Viad Corp stockholders equity:Common stock, $1.50 par value, 200,000,000 shares
authorized, 24,934,981 shares issued
    
    
    37,402
    
    
    
    37,402Additional capital
    
    
    598,638
    
    
    
    606,902Retained deficit
    
    
    (6,583
    )
    
    
    (19,229
    )Unearned employee benefits and other
    
    
    (3,813
    )
    
    
    (4,433
    )Accumulated other comprehensive income (loss):Unrealized gains on investments
    
    
    343
    
    
    
    282Cumulative foreign currency translation adjustments
    
    
    44,591
    
    
    
    38,979Unrecognized net actuarial loss and prior service credit
    
    
    (10,397
    )
    
    
    (10,410
    )Common stock in treasury, at cost, 4,561,649 and 4,710,988
shares, respectively
    
    
    (261,013
    )
    
    
    (270,534
    )Total Viad Corp stockholders equity
    
    
    399,168
    
    
    
    378,959Noncontrolling interest
    
    
    7,389
    
    
    
    7,752Total stockholders equity
    
    
    406,557
    
    
    
    386,711Total Liabilities and Stockholders Equity
    
    $
    645,723
    
    
    $
    616,503
   Page 2




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##### Table of Contents



VIAD CORP
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
 Three months ended June 30,
    
    
    Six months ended June 30,2011
    
    
    2010
    
    
    2011
    
    
    2010(in thousands, except per share data)Revenues:Convention and event services
    
    $
    174,319
    
    
    $
    155,097
    
    
    $
    408,806
    
    
    $
    333,856Exhibits and environments
    
    
    40,416
    
    
    
    40,813
    
    
    
    90,267
    
    
    
    78,994Travel and recreation services
    
    
    23,957
    
    
    
    22,389
    
    
    
    29,717
    
    
    
    29,802Total revenues
    
    
    238,692
    
    
    
    218,299
    
    
    
    528,790
    
    
    
    442,652Costs and expenses:Costs of services
    
    
    190,238
    
    
    
    166,712
    
    
    
    415,037
    
    
    
    347,551Costs of products sold
    
    
    38,592
    
    
    
    43,862
    
    
    
    86,632
    
    
    
    87,177Corporate activities
    
    
    1,576
    
    
    
    2,058
    
    
    
    2,847
    
    
    
    2,702Interest income
    
    
    (176
    )
    
    
    (88
    )
    
    
    (390
    )
    
    
    (184
    )Interest expense
    
    
    380
    
    
    
    473
    
    
    
    792
    
    
    
    966Restructuring charges
    
    
    1,206
    
    
    
    559
    
    
    
    1,475
    
    
    
    2,612Total costs and expenses
    
    
    231,816
    
    
    
    213,576
    
    
    
    506,393
    
    
    
    440,824Income before income taxes
    
    
    6,876
    
    
    
    4,723
    
    
    
    22,397
    
    
    
    1,828Income tax expense
    
    
    2,588
    
    
    
    1,790
    
    
    
    8,488
    
    
    
    1,998Net income (loss)
    
    
    4,288
    
    
    
    2,933
    
    
    
    13,909
    
    
    
    (170
    )Net loss attributable to noncontrolling interest
    
    
    197
    
    
    
    95
    
    
    
    363
    
    
    
    216Net income attributable to Viad
    
    $
    4,485
    
    
    $
    3,028
    
    
    $
    14,272
    
    
    $
    46Diluted income per common shareNet income attributable to Viad common stockholders
    
    $
    0.22
    
    
    $
    0.15
    
    
    $
    0.70
    
    
    $
    Weighted-average outstanding and potentially dilutive
common shares
    
    
    20,121
    
    
    
    20,375
    
    
    
    20,102
    
    
    
    20,338Basic income per common shareNet income attributable to Viad common stockholders
    
    $
    0.22
    
    
    $
    0.15
    
    
    $
    0.70
    
    
    $
    Weighted-average outstanding common shares
    
    
    19,816
    
    
    
    20,059
    
    
    
    19,797
    
    
    
    20,055Dividends 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 30,2011
    
    
    2010
    
    
    2011
    
    
    2010(in thousands)Net income (loss)
    
    $
    4,288
    
    
    $
    2,933
    
    
    $
    13,909
    
    
    $
    (170
    )Other comprehensive income (loss):Holding gains (losses) arising during the period, net of tax
    
    
    3
    
    
    
    (78
    )
    
    
    61
    
    
    
    (19
    )Unrealized foreign currency translation adjustments, net of tax
    
    
    2,059
    
    
    
    (7,956
    )
    
    
    5,612
    
    
    
    (3,910
    )Net actuarial loss, net of tax
    
    
    204
    
    
    
    183
    
    
    
    408
    
    
    
    (1,371
    )Prior service credit, net of tax
    
    
    (197
    )
    
    
    (175
    )
    
    
    (395
    )
    
    
    (295
    )Total other comprehensive income (loss)
    
    
    2,069
    
    
    
    (8,026
    )
    
    
    5,686
    
    
    
    (5,595
    )Comprehensive income (loss)
    
    
    6,357
    
    
    
    (5,093
    )
    
    
    19,595
    
    
    
    (5,765
    )Comprehensive loss attributable to noncontrolling interest
    
    
    197
    
    
    
    95
    
    
    
    363
    
    
    
    216Comprehensive income (loss) attributable to Viad
    
    $
    6,554
    
    
    $
    (4,998
    )
    
    $
    19,958
    
    
    $
    (5,549
    )
   Page 4




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VIAD CORP
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Six months ended June 30,2011
    
    
    2010(in thousands)Cash flows from operating activities:Net income (loss)
    
    $
    13,909
    
    
    $
    (170
    )Adjustments to reconcile net income (loss) to net cash provided by
operating activities:Depreciation and amortization
    
    
    14,293
    
    
    
    14,004Deferred income taxes
    
    
    1,808
    
    
    
    4,295Restructuring charges
    
    
    1,475
    
    
    
    2,612Losses (gains) on dispositions of property and other assets
    
    
    (8
    )
    
    
    37Share-based compensation expense
    
    
    2,293
    
    
    
    1,800Excess tax benefit from share-based compensation arrangements
    
    
    (54
    )
    
    
    Other non-cash items, net
    
    
    2,411
    
    
    
    1,852Change in operating assets and liabilities:Receivables
    
    
    (43,590
    )
    
    
    (23,444
    )Inventories
    
    
    8,538
    
    
    
    6,902Accounts payable
    
    
    14,334
    
    
    
    14,415Restructuring liabilities
    
    
    (2,377
    )
    
    
    (5,016
    )Accrued compensation
    
    
    7,267
    
    
    
    9,342Customer deposits
    
    
    (7,390
    )
    
    
    (1,856
    )Income taxes payable
    
    
    3,141
    
    
    
    (130
    )Other assets and liabilities, net
    
    
    (10,083
    )
    
    
    (6,359
    )Net cash provided by operating activities
    
    
    5,967
    
    
    
    18,284Cash flows from investing activities:Capital expenditures
    
    
    (12,795
    )
    
    
    (8,404
    )Acquisition of businesses, net of cash acquired
    
    
    (25,800
    )
    
    
    Proceeds from dispositions of property and other assets
    
    
    264
    
    
    
    14,541Net cash provided by (used in) investing activities
    
    
    (38,331
    )
    
    
    6,137Cash flows from financing activities:Payments on debt and capital lease obligations
    
    
    (5,631
    )
    
    
    (2,869
    )Dividends paid on common stock
    
    
    (1,630
    )
    
    
    (1,644
    )Common stock purchased for treasury
    
    
    (679
    )
    
    
    (573
    )Debt issuance costs
    
    
    (1,001
    )
    
    
    Excess tax benefit from share-based compensation arrangements
    
    
    54
    
    
    
    Proceeds from exercise of stock options
    
    
    163
    
    
    
    38Net cash used in financing activities
    
    
    (8,724
    )
    
    
    (5,048
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    2,595
    
    
    
    (1,744
    )Net increase (decrease) in cash and cash equivalents
    
    
    (38,493
    )
    
    
    17,629Cash and cash equivalents, beginning of year
    
    
    145,841
    
    
    
    116,342Cash and cash equivalents, end of period
    
    $
    107,348
    
    
    $
    133,971Supplemental disclosure of cash flow informationCash paid for income taxes
    
    $
    5,541
    
    
    $
    3,855Cash paid for interest
    
    $
    490
    
    
    $
    511Equipment acquired under capital leases
    
    $
    897
    
    
    $
    390
   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
  Three months ended June 30,
    
    
    Six months ended June 30,2011
    
    
    2010
    
    
    2011
    
    
    2010(in thousands)Stock options
    
    $
    183
    
    
    $
    150
    
    
    $
    330
    
    
    $
    263Restricted stock/performance-based restricted stock (PBRS)
    
    
    937
    
    
    
    804
    
    
    
    1,615
    
    
    
    1,479Restricted stock units/PBRS units
    
    
    46
    
    
    
    26
    
    
    
    89
    
    
    
    61Performance unit incentive plan (PUP)
    
    
    194
    
    
    
    
    
    
    
    259
    
    
    
    (3
    )Total share-based compensation before income tax benefit
    
    
    1,360
    
    
    
    980
    
    
    
    2,293
    
    
    
    1,800Income tax benefit
    
    
    (480
    )
    
    
    (347
    )
    
    
    (801
    )
    
    
    (661
    )Total share-based compensation, net of income tax benefit
    
    $
    880
    
    
    $
    633
    
    
    $
    1,492
    
    
    $
    1,139
   Page 6




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Restricted Stock
    
    
    PBRSWeighted-Average
    
    
    
    
    
    
    Weighted-AverageGrant Date
    
    
    
    
    
    
    Grant DateShares
    
    
    Fair Value
    
    
    Shares
    
    
    Fair ValueBalance at January 1, 2011
    
    
    478,499
    
    
    $
    21.51
    
    
    
    18,830
    
    
    $
    33.02Granted
    
    
    172,200
    
    
    
    23.01
    
    
    
    
    
    
    
    Vested
    
    
    (91,212
    )
    
    
    31.31
    
    
    
    (18,414
    )
    
    
    33.42Forfeited
    
    
    (2,200
    )
    
    
    20.64
    
    
    
    
    
    
    
    Balance at June 30, 2011
    
    
    557,287
    
    
    
    20.37
    
    
    
    416
    
    
    
    15.36
   Restricted Stock Units
    
    
    PBRS Units
    
    
    PUP AwardsWeighted-Average
    
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    
    Weighted-AverageGrant Date
    
    
    
    
    
    
    Grant Date
    
    
    
    
    
    
    Grant DateUnits
    
    
    Fair Value
    
    
    Units
    
    
    Fair Value
    
    
    Units
    
    
    Fair ValueBalance at January 1, 2011
    
    
    26,050
    
    
    $
    17.18
    
    
    
    3,914
    
    
    $
    15.36
    
    
    
    102,960
    
    
    $
    33.81Granted
    
    
    12,550
    
    
    
    23.01
    
    
    
    
    
    
    
    
    
    
    
    95,500
    
    
    
    23.02Vested
    
    
    
    
    
    
    
    
    
    
    (1,958
    )
    
    
    15.36
    
    
    
    
    
    
    
    Cancelled
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (102,960
    )
    
    
    33.81Balance at June 30, 2011
    
    
    38,600
    
    
    
    19.07
    
    
    
    1,956
    
    
    
    15.36
    
    
    
    95,500
    
    
    
    23.02
    Weighted-Average
    
    
    OptionsShares
    
    
    Exercise Price
    
    
    ExercisableOptions outstanding at January 1, 2011
    
    
    763,794
    
    
    $
    23.38
    
    
    
    451,194Exercised
    
    
    (7,866
    )
    
    
    20.56Forfeited or expired
    
    
    (132,231
    )
    
    
    24.17Options outstanding at June 30, 2011
    
    
    623,697
    
    
    
    23.25
    
    
    
    417,118
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Note 3. Acquisition of Businesses
  (in thousands)Cash and cash equivalents
    
    $
    21Other current assets
    
    
    715Property and equipment
    
    
    13,058Goodwill
    
    
    2,583Other intangible assets
    
    
    60Total assets acquired
    
    
    16,437Customer deposits
    
    
    (684
    )Other current liabilities
    
    
    (46
    )Other long-term liabilities
    
    
    (382
    )Total liabilities acquired
    
    
    (1,112
    )Purchase price
    
    $
    15,325
   (in thousands)Cash and cash equivalents
    
    $
    9Other current assets
    
    
    126Property and equipment
    
    
    8,750Goodwill
    
    
    1,331Other intangible assets
    
    
    400Total assets acquired
    
    
    10,616Customer deposits
    
    
    (99
    )Other current liabilities
    
    
    (12
    )Total liabilities acquired
    
    
    (111
    )Purchase price
    
    $
    10,505
   Page 8




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Note 4. Inventories
  June 30,
    
    
    December 31,2011
    
    
    2010(in thousands)Raw materials
    
    $
    19,617
    
    
    $
    18,488Work in process
    
    
    11,329
    
    
    
    20,182Inventories
    
    $
    30,946
    
    
    $
    38,670
 Note 5. Property and Equipment
  June 30,
    
    
    December 31,2011
    
    
    2010(in thousands)Land
    
    $
    15,022
    
    
    $
    9,139Buildings and leasehold improvements
    
    
    107,733
    
    
    
    89,945Equipment and other
    
    
    311,781
    
    
    
    299,558434,536
    
    
    
    398,642Accumulated depreciation
    
    
    (263,885
    )
    
    
    (249,296
    )Property and equipment, net
    
    $
    170,651
    
    
    $
    149,346
   Note 6. Goodwill and Other Intangible Assets
  Marketing &Marketing &
    
    
    Events
    
    
    Travel &Events U.S.
    
    
    International
    
    
    Recreation Group
    
    
    Total(in thousands)Balance at January 1, 2011
    
    $
    62,686
    
    
    $
    22,455
    
    
    $
    42,300
    
    
    $
    127,441Business acquisitions
    
    
    
    
    
    
    
    
    
    
    3,914
    
    
    
    3,914Foreign currency translation adjustments
    
    
    
    
    
    
    711
    
    
    
    1,761
    
    
    
    2,472Balance at June 30, 2011
    
    $
    62,686
    
    
    $
    23,166
    
    
    $
    47,975
    
    
    $
    133,827
  Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingValue
    
    
    Amortization
    
    
    Value(in thousands)Amortized intangible assets:Customer contracts and relationships
    
    $
    2,535
    
    
    $
    (1,443
    )
    
    $
    1,092Proprietary technology
    
    
    524
    
    
    
    (495
    )
    
    
    29Design libraries
    
    
    175
    
    
    
    (153
    )
    
    
    22Other
    
    
    71
    
    
    
    (24
    )
    
    
    473,305
    
    
    
    (2,115
    )
    
    
    1,190Unamortized intangible assets:Business licenses
    
    
    460
    
    
    
    
    
    
    
    460Total
    
    $
    3,765
    
    
    $
    (2,115
    )
    
    $
    1,650
  Page 9




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Gross Carrying
    
    
    Accumulated
    
    
    Net CarryingValue
    
    
    Amortization
    
    
    Value(in thousands)Customer contracts and relationships
    
    $
    2,506
    
    
    $
    (1,135
    )
    
    $
    1,371Proprietary technology
    
    
    517
    
    
    
    (448
    )
    
    
    69Design libraries
    
    
    175
    
    
    
    (110
    )
    
    
    65Other
    
    
    166
    
    
    
    (108
    )
    
    
    58$
    3,364
    
    
    $
    (1,801
    )
    
    $
    1,563
  (in thousands)2011
    
    $
    3442012
    
    $
    3602013
    
    $
    3502014
    
    $
    1192015
    
    $
    17
 Note 7. Accrued Liabilities and Other
  June 30,
    
    
    December 31,2011
    
    
    2010(in thousands)Continuing operations:Customer deposits
    
    $
    36,804
    
    
    $
    43,411Accrued compensation
    
    
    25,451
    
    
    
    17,599Self-insured liability accrual
    
    
    8,113
    
    
    
    8,278Accrued income taxes
    
    
    3,289
    
    
    
    Accrued employee benefit costs
    
    
    3,025
    
    
    
    3,127Accrued foreign income taxes
    
    
    2,892
    
    
    
    2,852Accrued restructuring
    
    
    2,000
    
    
    
    4,272Accrued sales and use taxes
    
    
    1,185
    
    
    
    2,990Accrued dividends
    
    
    835
    
    
    
    827Other
    
    
    10,553
    
    
    
    11,08494,147
    
    
    
    94,440Discontinued operations:Environmental remediation liabilities
    
    
    1,025
    
    
    
    1,124Self-insured liability accrual
    
    
    469
    
    
    
    552Other
    
    
    517
    
    
    
    6332,011
    
    
    
    2,309Total other current liabilities
    
    $
    96,158
    
    
    $
    96,749
  Page 10




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June 30,
    
    
    December 31,2011
    
    
    2010(in thousands)Continuing operations:Self-insured liability accrual
    
    $
    14,581
    
    
    $
    14,330Accrued compensation
    
    
    4,892
    
    
    
    5,129Accrued restructuring
    
    
    4,816
    
    
    
    3,724Foreign deferred tax liability
    
    
    1,459
    
    
    
    1,582Accrued income taxes
    
    
    64
    
    
    
    146Other
    
    
    5,544
    
    
    
    3,94531,356
    
    
    
    28,856Discontinued operations:Self-insured liability accrual
    
    
    6,826
    
    
    
    6,898Environmental remediation liabilities
    
    
    4,925
    
    
    
    4,953Accrued income taxes
    
    
    1,004
    
    
    
    987Other
    
    
    1,279
    
    
    
    1,33114,034
    
    
    
    14,169Total other deferred items and liabilities
    
    $
    45,390
    
    
    $
    43,025
 Note 8. Debt
      Page 11




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##### Table of Contents



Note 9. Stockholders Equity
  Total Viad
    
    
    
    
    
    
    TotalStockholders
    
    
    Noncontrolling
    
    
    StockholdersEquity
    
    
    Interest
    
    
    Equity(in thousands)Balance at January 1, 2011
    
    $
    378,959
    
    
    $
    7,752
    
    
    $
    386,711Net income (loss)
    
    
    14,272
    
    
    
    (363
    )
    
    
    13,909Dividends on common stock
    
    
    (1,630
    )
    
    
    
    
    
    
    (1,630
    )Common stock purchased for treasury
    
    
    (679
    )
    
    
    
    
    
    
    (679
    )Employee benefit plans
    
    
    1,931
    
    
    
    
    
    
    
    1,931Unrealized foreign currency translation adjustment
    
    
    5,612
    
    
    
    
    
    
    
    5,612Unrealized gain on investments
    
    
    61
    
    
    
    
    
    
    
    61Prior service credit and net actuarial loss
    
    
    13
    
    
    
    
    
    
    
    13ESOP allocation adjustment
    
    
    620
    
    
    
    
    
    
    
    620Other
    
    
    9
    
    
    
    
    
    
    
    9Balance at June 30, 2011
    
    $
    399,168
    
    
    $
    7,389
    
    
    $
    406,557
  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 credit 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
  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.
  Page 12




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Level 3 
    
    Unobservable inputs to the valuation methodology that are significant to the
measurement of fair value.
  Fair Value Measurements at June 30, 2011 UsingSignificantQuoted Prices
    
    
    Other
    
    
    Significantin Active
    
    
    Observable
    
    
    UnobservedJune 30,
    
    
    Markets
    
    
    Inputs
    
    
    Inputs2011
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)(in thousands)Assets:Money market funds
    
    $
    1,245
    
    
    $
    1,245
    
    
    $
    
    
    
    $
    Other mutual funds
    
    
    1,670
    
    
    
    1,670
    
    
    
    
    
    
    
    Total
    
    $
    2,915
    
    
    $
    2,915
    
    
    $
    
    
    
    $
    
     Page 13




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Note 11. Income Per Share
  Three months ended June 30,
    
    
    Six months ended June 30,2011
    
    
    2010
    
    
    2011
    
    
    2010(in thousands, except per share data)Basic net income per shareNumerator:Net income attributable to Viad
    
    $
    4,485
    
    
    $
    3,028
    
    
    $
    14,272
    
    
    $
    46Less: Allocation to non-vested shares
    
    
    (111
    )
    
    
    (71
    )
    
    
    (370
    )
    
    
    (1
    )Net income allocated to Viad common stockholders
    
    $
    4,374
    
    
    $
    2,957
    
    
    $
    13,902
    
    
    $
    45Denominator:Weighted-average outstanding common shares
    
    
    19,816
    
    
    
    20,059
    
    
    
    19,797
    
    
    
    20,055Net income attributable to Viad common stockholders
    
    $
    0.22
    
    
    $
    0.15
    
    
    $
    0.70
    
    
    $
    Diluted net income per shareNumerator:Net income attributable to Viad
    
    $
    4,485
    
    
    $
    3,028
    
    
    $
    14,272
    
    
    $
    46Denominator:Weighted-average outstanding shares
    
    
    19,816
    
    
    
    20,059
    
    
    
    19,797
    
    
    
    20,055Additional dilutive shares related to share-based compensation
    
    
    305
    
    
    
    316
    
    
    
    305
    
    
    
    283Weighted-average outstanding and potentially dilutive shares
    
    
    20,121
    
    
    
    20,375
    
    
    
    20,102
    
    
    
    20,338Net income attributable to Viad common stockholders (1)
    
    $
    0.22
    
    
    $
    0.15
    
    
    $
    0.70
    
    
    $
    
 (1)
    
    Diluted income per share cannot exceed basic income per share.  Note 12. Income Taxes
  2011
    
    
    2010(in thousands)Computed income tax expense at statutory
federal income tax rate of 35%
    
    $
    7,839
    
    
    
    35.0
    %
    
    $
    640
    
    
    
    35.0
    %State income tax expense (benefit), net of
federal benefit or provision
    
    
    563
    
    
    
    2.5
    %
    
    
    (34
    )
    
    
    (1.9
    %)Change in enacted tax law
    
    
    
    
    
    
    0.0
    %
    
    
    1,279
    
    
    
    70.0
    %Other, net
    
    
    86
    
    
    
    0.4
    %
    
    
    113
    
    
    
    6.2
    %Income tax expense
    
    $
    8,488
    
    
    
    37.9
    %
    
    $
    1,998
    
    
    
    109.3
    %
  Page 14




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Note 13. Pension and Postretirement Benefits
  Domestic PlansPostretirement
    
    
    ForeignPension Plans
    
    
    Benefit Plans
    
    
    Pension Plans2011
    
    
    2010
    
    
    2011
    
    
    2010
    
    
    2011
    
    
    2010(in thousands)Service cost
    
    $
    37
    
    
    $
    53
    
    
    $
    37
    
    
    $
    27
    
    
    $
    94
    
    
    $
    76Interest cost
    
    
    300
    
    
    
    311
    
    
    
    232
    
    
    
    265
    
    
    
    186
    
    
    
    195Expected return on plan assets
    
    
    (141
    )
    
    
    (149
    )
    
    
    (33
    )
    
    
    (41
    )
    
    
    (171
    )
    
    
    (151
    )Amortization of prior service cost (credit)
    
    
    
    
    
    
    10
    
    
    
    (319
    )
    
    
    (293
    )
    
    
    
    
    
    
    Recognized net actuarial loss
    
    
    171
    
    
    
    138
    
    
    
    160
    
    
    
    156
    
    
    
    
    
    
    
    Net periodic
benefit cost
    
    $
    367
    
    
    $
    363
    
    
    $
    77
    
    
    $
    114
    
    
    $
    109
    
    
    $
    120
  Page 15




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##### Table of Contents



Domestic PlansPostretirement
    
    
    ForeignPension Plans
    
    
    Benefit Plans
    
    
    Pension Plans2011
    
    
    2010
    
    
    2011
    
    
    2010
    
    
    2011
    
    
    2010(in thousands)Service cost
    
    $
    74
    
    
    $
    106
    
    
    $
    74
    
    
    $
    54
    
    
    $
    185
    
    
    $
    151Interest cost
    
    
    600
    
    
    
    622
    
    
    
    464
    
    
    
    530
    
    
    
    369
    
    
    
    387Expected return on plan assets
    
    
    (282
    )
    
    
    (298
    )
    
    
    (66
    )
    
    
    (82
    )
    
    
    (337
    )
    
    
    (299
    )Amortization of prior service cost (credit)
    
    
    
    
    
    
    20
    
    
    
    (638
    )
    
    
    (586
    )
    
    
    
    
    
    
    Recognized net actuarial loss
    
    
    341
    
    
    
    277
    
    
    
    320
    
    
    
    313
    
    
    
    
    
    
    
    Net periodic benefit cost
    
    $
    733
    
    
    $
    727
    
    
    $
    154
    
    
    $
    229
    
    
    $
    217
    
    
    $
    239
  Note 14. Restructuring Charges
   Marketing & EventsGroup Consolidation
    
    
    Other RestructuringsSeverance &
    
    
    
    
    
    
    Severance &Employee
    
    
    
    
    
    
    EmployeeBenefits
    
    
    Facilities
    
    
    Benefits
    
    
    Facilities
    
    
    Total(in thousands)Balance at January 1, 2011
    
    $
    1,106
    
    
    $
    5,051
    
    
    $
    197
    
    
    $
    1,642
    
    
    $
    7,996Restructuring charges
    
    
    439
    
    
    
    1,036
    
    
    
    
    
    
    
    
    
    
    
    1,475Cash payments
    
    
    (1,190
    )
    
    
    (849
    )
    
    
    (197
    )
    
    
    (141
    )
    
    
    (2,377
    )Adjustment to liability
    
    
    (128
    )
    
    
    
    
    
    
    
    
    
    
    (192
    )
    
    
    (320
    )Foreign currency translation adjustment
    
    
    33
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    42Balance at June 30, 2011
    
    $
    260
    
    
    $
    5,247
    
    
    $
    
    
    
    $
    1,309
    
    
    $
    6,816
 Note 15. Litigation, Claims, Contingencies and Other
    Page 16




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Note 16. Segment Information
  Three months ended June 30,
    
    
    Six months ended June 30,2011
    
    
    2010
    
    
    2011
    
    
    2010(in thousands)Revenues:Marketing & Events Group:U.S.
    
    $
    150,170
    
    
    $
    144,460
    
    
    $
    381,865
    
    
    $
    313,869International
    
    
    66,973
    
    
    
    56,059
    
    
    
    120,927
    
    
    
    106,426Intersegment eliminations
    
    
    (2,408
    )
    
    
    (4,609
    )
    
    
    (3,719
    )
    
    
    (7,445
    )214,735
    
    
    
    195,910
    
    
    
    499,073
    
    
    
    412,850Travel & Recreation Group
    
    
    23,957
    
    
    
    22,389
    
    
    
    29,717
    
    
    
    29,802$
    238,692
    
    
    $
    218,299
    
    
    $
    528,790
    
    
    $
    442,652Segment operating income (loss):Marketing & Events Group:U.S.
    
    $
    205
    
    
    $
    (2,297
    )
    
    $
    18,139
    
    
    $
    (2,346
    )International
    
    
    6,650
    
    
    
    6,532
    
    
    
    10,435
    
    
    
    9,1696,855
    
    
    
    4,235
    
    
    
    28,574
    
    
    
    6,823Travel & Recreation Group
    
    
    3,007
    
    
    
    3,490
    
    
    
    (1,453
    )
    
    
    1,1019,862
    
    
    
    7,725
    
    
    
    27,121
    
    
    
    7,924Corporate activities
    
    
    (1,576
    )
    
    
    (2,058
    )
    
    
    (2,847
    )
    
    
    (2,702
    )8,286
    
    
    
    5,667
    
    
    
    24,274
    
    
    
    5,222Interest income
    
    
    176
    
    
    
    88
    
    
    
    390
    
    
    
    184Interest expense
    
    
    (380
    )
    
    
    (473
    )
    
    
    (792
    )
    
    
    (966
    )Restructuring charges:Marketing & Events U.S.
    
    
    (1,206
    )
    
    
    (272
    )
    
    
    (1,475
    )
    
    
    (2,325
    )Travel & Recreation Group
    
    
    
    
    
    
    (235
    )
    
    
    
    
    
    
    (235
    )Corporate
    
    
    
    
    
    
    (52
    )
    
    
    
    
    
    
    (52
    )Income before income taxes
    
    $
    6,876
    
    
    $
    4,723
    
    
    $
    22,397
    
    
    $
    1,828
 June 30,
    
    
    December 31,2011
    
    
    2010(in thousands)Assets:Marketing & Events U.S.
    
    $
    256,626
    
    
    $
    235,965Marketing & Events International
    
    
    83,823
    
    
    
    83,441Travel & Recreation Group
    
    
    202,314
    
    
    
    157,562Corporate and other
    
    
    102,960
    
    
    
    139,535$
    645,723
    
    
    $
    616,503
  Page 18




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Note 17. Impact of Recent Accounting Pronouncements
    Page 19




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Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations.
  Overview:
     Viad Corp (Consolidated)
 
    
    Total revenues of $238.7 million compared to $218.3 million in the second
quarter of 2010
 
    
    Net income attributable to Viad of $4.5 million compared to $3.0 million
in the second quarter of 2010
 
    
    Diluted income per share of $0.22 compared to $0.15 in the second quarter
of 2010
 
    
    Purchase of St. Mary Lodge & Resort for $15.3 million
 
    
    Restructuring charges of $1.2 million primarily related to reorganization
activities in the Marketing & Events Group, comprised of the elimination of certain
positions as well as facility consolidations
 
    
    Cash and cash equivalents totaled $107.3 million as of June 30, 2011
 
    
    Debt was $4.2 million as of June 30, 2011
 Marketing & Events U.S.
 
    
    Revenues of $150.2 million, an increase of 4.0 percent from the second
quarter of 2010
 
    
    Segment operating income of $205,000, as compared to a loss of $2.3
million in the second quarter of 2010
 Marketing & Events International
 
    
    Revenues of $67.0 million, an increase of 19.5 percent from the second
quarter of 2010
 
    
    Segment operating income of $6.7 million, an increase of 1.8 percent from
the second quarter of 2010
 Travel & Recreation Group
 
    
    Revenues of $24.0 million, an increase of 7.0 percent from the second
quarter of 2010
 
    
    Segment operating income of $3.0 million, a decrease of 13.8 percent from
the second quarter of 2010
 Non-GAAP Measure:
   Page 20




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Three months ended June 30,
    
    
    Six months ended June 30,2011
    
    
    2010
    
    
    2011
    
    
    2010(in thousands)Adjusted EBITDA
    
    $
    14,775
    
    
    $
    12,491
    
    
    $
    37,845
    
    
    $
    17,014Interest expense
    
    
    (380
    )
    
    
    (473
    )
    
    
    (792
    )
    
    
    (966
    )Income tax expense
    
    
    (2,588
    )
    
    
    (1,790
    )
    
    
    (8,488
    )
    
    
    (1,998
    )Depreciation and amortization
    
    
    (7,322
    )
    
    
    (7,200
    )
    
    
    (14,293
    )
    
    
    (14,004
    )Net income attributable to Viad
    
    $
    4,485
    
    
    $
    3,028
    
    
    $
    14,272
    
    
    $
    46
  Results of Operations:
 Comparison of Second Quarter of 2011 to the Second Quarter of 2010
   Page 21




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Revenues
    
    
    Segment Operating ResultsWeighted-Average
    
    
    Effect of Rate
    
    
    Weighted-Average
    
    
    Effect of RateExchange Rates
    
    
    Variance
    
    
    Exchange Rates
    
    
    Variance2011
    
    
    2010
    
    
    (thousands)
    
    
    2011
    
    
    2010
    
    
    (thousands)Marketing & Events Group:Canada
    
    $
    1.04
    
    
    $
    0.97
    
    
    $
    1,355
    
    
    $
    1.05
    
    
    $
    0.97
    
    
    $
    102United Kingdom
    
    $
    1.64
    
    
    $
    1.50
    
    
    $
    3,831
    
    
    $
    1.64
    
    
    $
    1.50
    
    
    $
    467Travel & Recreation Group:Canada
    
    $
    1.04
    
    
    $
    0.96
    
    
    $
    1,448
    
    
    $
    1.04
    
    
    $
    0.95
    
    
    $
    377
  Marketing & Events Group.
      Page 22




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Travel & Recreation Group.
    Restructuring Charges.
 Income Taxes.
 Comparison of First Six Months of 2011 to the First Six Months of 2010
   Page 23




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Revenues
    
    
    Segment Operating ResultsWeighted-Average
    
    
    Effect of Rate
    
    
    Weighted-Average
    
    
    Effect of RateExchange Rates
    
    
    Variance
    
    
    Exchange Rates
    
    
    Variance2011
    
    
    2010
    
    
    (thousands)
    
    
    2011
    
    
    2010
    
    
    (thousands)Marketing & Events Group:Canada
    
    $
    1.03
    
    
    $
    0.96
    
    
    $
    2,476
    
    
    $
    1.06
    
    
    $
    0.97
    
    
    $
    125United Kingdom
    
    $
    1.62
    
    
    $
    1.52
    
    
    $
    4,882
    
    
    $
    1.63
    
    
    $
    1.51
    
    
    $
    621Travel & Recreation Group:Canada
    
    $
    1.03
    
    
    $
    0.96
    
    
    $
    1,777
    
    
    $
    1.09
    
    
    $
    0.95
    
    
    $
    193
  Marketing & Events Group.
  Travel & Recreation Group.
 Restructuring Charges.
  Page 24




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Income Taxes.
 Liquidity and Capital Resources:
           Page 25




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Off-Balance Sheet Arrangements:
  Critical Accounting Policies and Estimates:
  Goodwill 
  Page 26




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Income taxes
    Page 27




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Insurance liabilities
 Pension and postretirement benefits
     Domestic PlansPostretirementFunded Plans
    
    
    Unfunded Plans
    
    
    Benefit Plans
    
    
    Foreign PlansDiscount rate
    
    
    5.45
    %
    
    
    5.10
    %
    
    
    5.10
    %
    
    
    5.10
    %
  Domestic PlansPostretirementFunded Plans
    
    
    Unfunded Plans
    
    
    Benefit Plans
    
    
    Foreign PlansDiscount rate
    
    
    5.90
    %
    
    
    5.70
    %
    
    
    5.60
    %
    
    
    5.60
    %Expected return on plan assets
    
    
    6.35
    %
    
    
    N/A
    
    
    
    6.10
    %
    
    
    5.75
    %
  Page 28




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Share-based compensation
 Impact of Recent Accounting Pronouncements:
  Forward-Looking Statements:
  
 Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk.
    Page 29




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Weighted-Average
    
    
    Effect of RateExchange Rates
    
    
    Variance2011
    
    
    2010
    
    
    (thousands)Canadian Operations:Marketing & Events Group
    
    $
    1.05
    
    
    $
    0.97
    
    
    $
    102Travel & Recreation Group
    
    $
    1.04
    
    
    $
    0.95
    
    
    $
    377United Kingdom Operations:Marketing & Events Group
    
    $
    1.64
    
    
    $
    1.50
    
    
    $
    467
  Weighted Average
    
    
    Effect of RateExchange Rates
    
    
    Variance2011
    
    
    2010
    
    
    (thousands)Canadian Operations:Marketing & Events Group
    
    $
    1.06
    
    
    $
    0.97
    
    
    $
    125Travel & Recreation Group
    
    $
    1.09
    
    
    $
    0.95
    
    
    $
    193United Kingdom Operations:Marketing & Events Group
    
    $
    1.63
    
    
    $
    1.51
    
    
    $
    621
   
 Item 4.
    
    Controls and Procedures.
   Page 30




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##### 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
 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)May 2011
    
    
    475
    
    
    
    22.09
    
    
    
    
    
    
    
    304,381Total
    
    
    475
    
    
    
    22.09
    
    
    
    
    
    
    
    304,381
 (1)
    
    Viad has announced its intent to repurchase shares of the Companys common
stock from time to time at prevailing market prices. No shares were repurchased during the
second quarter of 2011. As of June 30, 2011, 304,381 shares remain available for repurchase.
The authorization of the Board of Directors does not have an expiration date.  Page 31




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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 9, 2011
    
    By
    
    /s/ G. Michael Latta(Date)
    
    
    
    G. Michael LattaChief Accounting Officer  Controller 
(Chief Accounting Officer and Authorized Officer)
  Page 32