VIAD CORP, 10-Q/A filed on 8/30/2012
Amended Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 30, 2012
Jul. 31, 2012
Document and Entity Information [Abstract]
 
 
Entity Registrant Name
VIAD CORP 
 
Entity Central Index Key
0000884219 
 
Document Type
10-Q 
 
Document Period End Date
Jun. 30, 2012 
 
Amendment Flag
false 
 
Document Fiscal Year Focus
2012 
 
Document Fiscal Period Focus
Q2 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
20,258,904 
Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Current assets:
 
 
Cash and cash equivalents
$ 78,024 
$ 100,376 
Accounts receivable, net of allowance for doubtful accounts of $1,290 and $1,072, respectively
86,312 
63,583 
Inventories
48,990 
35,825 
Deferred income taxes
21,622 
24,200 
Other current assets
23,629 
14,647 
Total current assets
258,577 
238,631 
Property and equipment, net
193,549 
173,813 
Other investments and assets
30,129 
31,051 
Deferred income taxes
37,086 
38,755 
Goodwill
135,893 
133,694 
Other intangible assets, net
2,860 
1,884 
Total Assets
658,094 
617,828 
Current liabilities:
 
 
Accounts payable
67,234 
51,448 
Other current liabilities
112,104 
97,331 
Current portion of long-term debt and capital lease obligations
1,578 
2,018 
Total current liabilities
180,916 
150,797 
Long-term debt and capital lease obligations
990 
1,221 
Pension and postretirement benefits
35,531 
35,419 
Other deferred items and liabilities
46,468 
44,212 
Total liabilities
263,905 
231,649 
Commitments and contingencies (Note 16)
   
   
Viad Corp stockholders' equity:
 
 
Common stock, $1.50 par value, 200,000,000 shares authorized, 24,934,981 shares issued
37,402 
37,402 
Additional capital
592,233 
599,188 
Retained deficit
(7,763)
(13,256)
Unearned employee benefits and other
(2,300)
(2,951)
Accumulated other comprehensive income (loss):
 
 
Unrealized gains on investments
273 
222 
Cumulative foreign currency translation adjustments
35,644 
34,648 
Unrecognized net actuarial loss and prior service credit
(12,972)
(12,977)
Common stock in treasury, at cost, 4,673,952 and 4,790,920 shares, respectively
(256,150)
(264,382)
Total Viad Corp stockholders' equity
386,367 
377,894 
Noncontrolling interest
7,822 
8,285 
Total stockholders' equity
394,189 
386,179 
Total Liabilities and Stockholders' Equity
$ 658,094 
$ 617,828 
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Condensed Consolidated Balance Sheets [Abstract]
 
 
Allowance for doubtful accounts
$ 1,290 
$ 1,072 
Common stock, par value
$ 1.50 
$ 1.50 
Common stock, shares authorized
200,000,000 
200,000,000 
Common stock, shares issued
24,934,981 
24,934,981 
Treasury stock, shares
4,673,952 
4,790,920 
Condensed Consolidated Statements of Operations (Unaudited) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Revenues:
 
 
 
 
Convention and event services
$ 170,195 
$ 174,319 
$ 386,083 
$ 408,806 
Exhibits and environments
46,746 
40,416 
92,902 
90,267 
Travel and recreation services
29,509 
23,957 
36,237 
29,717 
Total revenues
246,450 
238,692 
515,222 
528,790 
Costs and expenses:
 
 
 
 
Costs of services
192,844 
190,238 
414,953 
415,037 
Costs of products sold
43,108 
38,592 
84,238 
86,632 
Corporate activities
2,187 
1,576 
3,964 
2,847 
Interest income
(123)
(176)
(292)
(390)
Interest expense
302 
380 
660 
792 
Restructuring charges
678 
1,206 
2,903 
1,475 
Total costs and expenses
238,996 
231,816 
506,426 
506,393 
Income from continuing operations before income taxes
7,454 
6,876 
8,796 
22,397 
Income tax expense
2,253 
2,588 
2,780 
8,488 
Income from continuing operations
5,201 
4,288 
6,016 
13,909 
Income from discontinued operations
639 
 
639 
 
Net income
5,840 
4,288 
6,655 
13,909 
Net loss attributable to noncontrolling interest
250 
197 
462 
363 
Net income attributable to Viad
6,090 
4,485 
7,117 
14,272 
Diluted income per common share
 
 
 
 
Income from continuing operations attributable to Viad common stockholders
$ 0.27 
$ 0.22 
$ 0.32 
$ 0.70 
Income from discontinued operations attributable to Viad common stockholders
$ 0.03 
 
$ 0.03 
 
Net income attributable to Viad common stockholders
$ 0.30 
$ 0.22 
$ 0.35 
$ 0.70 
Weighted-average outstanding and potentially dilutive common shares
19,961 
20,121 
19,950 
20,102 
Basic income per common share
 
 
 
 
Income from continuing operations attributable to Viad common stockholders
$ 0.27 
$ 0.22 
$ 0.32 
$ 0.70 
Income from discontinued operations attributable to Viad common stockholders
$ 0.03 
 
$ 0.03 
 
Net income attributable to Viad common stockholders
$ 0.30 
$ 0.22 
$ 0.35 
$ 0.70 
Weighted-average outstanding common shares
19,716 
19,816 
19,680 
19,797 
Dividends declared per common share
$ 0.04 
$ 0.04 
$ 0.08 
$ 0.08 
Amounts attributable to Viad common stockholders
 
 
 
 
Income from continuing operations
5,451 
4,485 
6,478 
14,272 
Income from discontinued operations
639 
 
639 
 
Net income attributable to Viad
$ 6,090 
$ 4,485 
$ 7,117 
$ 14,272 
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Condensed Consolidated Statements of Comprehensive Income [Abstract]
 
 
 
 
Net income
$ 5,840 
$ 4,288 
$ 6,655 
$ 13,909 
Other comprehensive income:
 
 
 
 
Unrealized gain (loss) on investments, net of tax
(42)
51 
61 
Unrealized foreign currency translation adjustments, net of tax
(3,390)
2,059 
996 
5,612 
Amortization of net actuarial loss, net of tax
174 
204 
349 
408 
Amortization of prior service credit, net of tax
(172)
(197)
(344)
(395)
Total other comprehensive income (loss)
(3,430)
2,069 
1,052 
5,686 
Comprehensive income
2,410 
6,357 
7,707 
19,595 
Comprehensive loss attributable to noncontrolling interest
250 
197 
462 
363 
Comprehensive income attributable to Viad
$ 2,660 
$ 6,554 
$ 8,169 
$ 19,958 
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Cash flows from operating activities:
 
 
Net income
$ 6,655 
$ 13,909 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
15,000 
14,293 
Deferred income taxes
3,828 
1,808 
Income from discontinued operations
(639)
 
Restructuring charges
2,903 
1,475 
Gains on disposition of property and other assets
(129)
(8)
Share-based compensation expense
2,854 
2,293 
Excess tax benefit from share-based compensation arrangements
(269)
(54)
Other non-cash items, net
2,566 
2,411 
Change in operating assets and liabilities (excluding the impact of acquisitions):
 
 
Receivables
(23,267)
(43,590)
Inventories
(13,139)
8,538 
Accounts payable
17,098 
14,334 
Restructuring liabilities
(1,938)
(2,377)
Accrued compensation
(4,091)
7,267 
Customer deposits
15,006 
(7,390)
Income taxes payable
107 
3,141 
Other assets and liabilities, net
(5,560)
(10,083)
Net cash provided by operating activities
16,985 
5,967 
Cash flows from investing activities:
 
 
Capital expenditures
(14,088)
(12,795)
Acquisition of businesses, net of cash acquired
(23,546)
(25,800)
Proceeds from dispositions of property and other assets
168 
264 
Proceeds from sale of land
1,041 
 
Net cash used in investing activities
(36,425)
(38,331)
Cash flows from financing activities:
 
 
Payments on debt and capital lease obligations
(1,444)
(5,631)
Dividends paid on common stock
(1,623)
(1,630)
Debt issuance costs
 
(1,001)
Common stock purchased for treasury
(1,000)
(679)
Excess tax benefit from share-based compensation arrangements
269 
54 
Proceeds from exercise of stock options
89 
163 
Net cash used in financing activities
(3,709)
(8,724)
Effect of exchange rate changes on cash and cash equivalents
797 
2,595 
Net decrease in cash and cash equivalents
(22,352)
(38,493)
Cash and cash equivalents, beginning of year
100,376 
145,841 
Cash and cash equivalents, end of period
78,024 
107,348 
Supplemental disclosure of cash flow information
 
 
Cash paid for income taxes
5,103 
5,541 
Cash paid for interest
511 
490 
Equipment acquired under capital leases
$ 363 
$ 897 
Basis of Preparation and Principles of Consolidation
Basis of Preparation and Principles of Consolidation

Note 1. Basis of Preparation and Principles of Consolidation

The accompanying unaudited, condensed consolidated financial statements of Viad Corp (“Viad” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012.

For further information, refer to the consolidated financial statements and related footnotes for the year ended December 31, 2011, included in the Company’s Form 10-K (File No. 001-11015), filed with the Securities and Exchange Commission on March 9, 2012.

The condensed consolidated financial statements include the accounts of Viad and all of its subsidiaries. All significant intercompany account balances and transactions between Viad and its subsidiaries have been eliminated in consolidation. Viad’s reporting segments consist of Marketing & Events U.S., Marketing & Events International and the Travel & Recreation Group.

The Marketing & Events Group, comprised of Global Experience Specialists, Inc. and affiliates (“GES”), specializes in all aspects of the design, planning and production of face-to-face events, immersive environments and brand-based experiences for clients, including show organizers, corporate brand marketers and retail shopping centers. In addition, the Marketing & Events Group provides a variety of immersive, entertaining attractions and brand-based experiences, sponsored events, mobile marketing and other branded entertainment and face-to-face marketing solutions for clients and venues, including shopping malls, movie studios, museums, leading consumer brands and casinos.

The Travel & Recreation Group segment consists of Brewster Inc. (“Brewster”), Glacier Park, Inc. (“Glacier Park”) and Alaskan Park Properties, Inc. (“Alaska Denali Travel”).

Brewster provides tourism services in the Canadian Rockies in Alberta and in other parts of Western Canada. Brewster’s operations include the Banff Gondola, Columbia Icefield Glacier Adventure, motorcoach services, charter and sightseeing services, tour boat operations, inbound package tour operations and hotel operations.

Glacier Park operates five lodges, three motor inns and one four-season resort hotel and provides food and beverage operations, retail operations and tour and transportation services in and around Glacier National Park in Montana and Waterton Lakes National Park in Alberta, Canada. Glacier Park is an 80 percent owned subsidiary of Viad.

In September 2011, Alaska Denali Travel, Viad’s wholly-owned subsidiary, acquired Denali Backcountry Lodge and Denali Cabins. Denali Backcountry Lodge is a 42-guest room lodge located within Denali National Park and Preserve in Alaska and Denali Cabins are 46 guest cabins located near the entrance to Denali National Park and Preserve. In addition to lodging, Alaska Denali Travel also provides food and beverage operations and package tour and transportation services in and around Denali National Park and Preserve.

Share-Based Compensation
Share-Based Compensation

Note 2. Share-Based Compensation

The following table summarizes share-based compensation expense:

 

                                 
    Three months
ended June 30,
    Six months ended
June 30,
 
    2012     2011     2012     2011  
    (in thousands)  

Restricted stock/performance-based restricted stock (“PBRS”)

  $ 971     $ 937     $ 1,720     $ 1,615  

Performance unit incentive plan (“PUP”)

    434       194       672       259  

Stock options

    153       183       302       330  

Restricted stock units/PBRS units

    79       46       160       89  
   

 

 

   

 

 

   

 

 

   

 

 

 

Total share-based compensation before income tax benefit

    1,637       1,360       2,854       2,293  

Income tax benefit

    (591     (480     (1,031     (801
   

 

 

   

 

 

   

 

 

   

 

 

 

Total share-based compensation, net of income tax benefit

  $ 1,046     $ 880     $ 1,823     $ 1,492  
   

 

 

   

 

 

   

 

 

   

 

 

 

 

In addition, $95,000 and $124,000 of costs associated with share-based compensation were included in restructuring charges during the six months ended June 30, 2012 and 2011, respectively.

Restricted Stock and PBRS. The following table summarizes restricted stock and PBRS activity:

 

                                 
    Restricted Stock     PBRS  
    Shares     Weighted-Average
Grant Date
Fair Value
    Shares     Weighted-Average
Grant Date
Fair Value
 

Balance at January 1, 2012

    572,022     $ 20.36       416     $ 15.36  

Granted

    166,750       20.46       —         —    

Vested

    (189,071     17.99       (416     15.36  

Forfeited

    (3,450     25.31       —         —    
   

 

 

           

 

 

         

Balance at June 30, 2012

    546,251       21.18       —         —    
   

 

 

           

 

 

         

The unamortized cost of all outstanding restricted stock awards as of June 30, 2012 was $5.6 million, which Viad expects to recognize in the consolidated financial statements over a weighted-average period of approximately 2.3 years. During the six months ended June 30, 2012 and 2011, the Company repurchased 50,894 shares for $1.0 million and 28,627 shares for $679,000, respectively, related to tax withholding requirements on vested share-based awards. As of June 30, 2012, there were 1,055,907 total shares available for future grant.

Liability-Based Awards. The following table summarizes the liability-based award activity:

 

                                                 
    Restricted Stock Units     PBRS Units     PUP Awards  
    Units     Weighted-Average
Grant Date
Fair Value
    Units     Weighted-Average
Grant Date
Fair Value
    Units     Weighted-Average
Grant Date
Fair Value
 

Balance at January 1, 2012

    38,600     $ 19.07       1,956     $ 15.36       95,500     $ 23.02  

Granted

    15,350       20.60       —         —         115,100       20.60  

Vested

    (13,100     15.36       (1,956     15.36       —         —    
   

 

 

           

 

 

           

 

 

         

Balance at June 30, 2012

    40,850       20.84       —         —         210,600       21.70  
   

 

 

           

 

 

           

 

 

         

As of June 30, 2012 and December 31, 2011, Viad had liabilities of $343,000 and $475,000, respectively, related to restricted stock unit and PBRS unit liability awards. A portion of the 2009 PBRS unit awards vested effective December 31, 2009 and cash payouts of $35,000 and $52,000 were distributed in January 2012 and January 2011, respectively. Similarly, a portion of the 2009 restricted stock unit awards vested in February 2012 and cash payouts of $257,000 were distributed in February 2012.

As of June 30, 2012 and December 31, 2011, Viad had liabilities of $1.4 million and $714,000, respectively, related to PUP awards. There were no PUP awards which vested during the six months ended June 30, 2012 or 2011. Furthermore, there were no cash settlements of PUP awards during the six months ended June 30, 2012 or 2011.

Stock Options. The following table summarizes stock option activity:

 

                         
    Shares     Weighted-
Average

Exercise  Price
    Options
Exercisable
 

Options outstanding at January 1, 2012

    584,201     $ 23.32       396,688  

Exercised

    (4,562     19.57          

Forfeited or expired

    (191,881     26.18          
   

 

 

                 

Options outstanding at June 30, 2012

    387,758       21.95       293,905  
   

 

 

                 

The total unrecognized cost related to non-vested stock option awards was $384,000 as of June 30, 2012, which Viad expects to recognize in the consolidated financial statements over a weighted-average period of approximately one year. No stock options were granted during the six months ended June 30, 2012.

 

In addition to the above, Viad had stock options outstanding which were granted to employees of MoneyGram International, Inc. (“MoneyGram”) prior to the spin-off of that company in 2004. As of June 30, 2012, there were 2,402 of such options both outstanding and exercisable at an exercise price of $19.57. The weighted-average remaining contractual life of these options was less than one year. No options were exercised by MoneyGram participants during the six months ended June 30, 2012.

Acquisition of Businesses
Acquisition of Businesses

Note 3. Acquisition of Businesses

On March 7, 2012, Viad acquired the Banff International Hotel and related assets for $23.6 million in cash. The Banff International Hotel is a 162-guest room hotel located in downtown Banff, Alberta, Canada and is operated by Brewster within the Travel & Recreation Group. The following information represents the final amounts assigned to the assets and liabilities of the Banff International Hotel as of the date of acquisition:

 

         
    (in thousands)  

Cash and cash equivalents

  $ 10  

Accounts receivable

    23  

Other current assets

    33  

Property and equipment

    20,408  

Goodwill

    1,890  

Other intangible assets

    1,323  
   

 

 

 

Total assets acquired

    23,687  
   

 

 

 

Customer deposits

    (64

Other current liabilities

    (67
   

 

 

 

Total liabilities acquired

    (131
   

 

 

 

Purchase price

  $ 23,556  
   

 

 

 

The Company recorded $1.9 million of goodwill in connection with the transaction, which is included in the Travel & Recreation Group. The primary factor that contributed to a purchase price resulting in the recognition of goodwill relates to future growth opportunities. The goodwill is deductible for tax purposes pursuant to regulations in Canada. The amount assigned to other intangible assets of $1.3 million relates to an operating contract and customer relationships. The weighted-average amortization period related to the other intangible assets was 7.7 years. The transaction costs related to the acquisition were insignificant. The results of operations of the Banff International Hotel have been included in Viad’s consolidated financial statements from the date of acquisition.

On September 16, 2011, Viad acquired the Denali Backcountry Lodge and Denali Cabins for $15.3 million in cash. Denali Backcountry Lodge is a 42-guest room lodge located within Denali National Park and Preserve in Alaska and Denali Cabins consist of 46 guest cabins near the entrance to Denali National Park and Preserve. These properties are operated by Viad’s wholly-owned subsidiary, Alaska Denali Travel, within the Travel & Recreation Group. The amounts assigned to the assets and liabilities of Denali Backcountry Lodge and Denali Cabins as of the date of acquisition include: $11.6 million of property and equipment, $3.2 million of goodwill, $626,000 of customer relationship intangible assets and net other liabilities of $135,000. The primary factor that contributed to a purchase price resulting in the recognition of goodwill relates to future growth opportunities. The acquired goodwill is included in the Travel & Recreation Group and is deductible for tax purposes over a period of 15 years. The weighted-average amortization period related to the customer relationship intangible assets was 5.0 years. The transaction costs related to the acquisition were insignificant. The results of operations of Alaska Denali Travel have been included in Viad’s consolidated financial statements from the date of acquisition.

On June 29, 2011, Viad acquired St. Mary Lodge & Resort (“St. Mary”) for $15.3 million in cash. St. Mary is a 115-guest room hotel located outside of Glacier National Park’s east entrance and is operated by Glacier Park within the Travel & Recreation Group. The amounts assigned to the assets and liabilities of St. Mary as of the date of acquisition include: $12.5 million of property and equipment, $3.1 million of goodwill, $60,000 related to a non-amortized business license and net other liabilities of $390,000. The primary factor that contributed to a purchase price resulting in the recognition of goodwill relates to future growth opportunities. The acquired goodwill is included in the Travel & Recreation Group and is deductible for tax purposes over a period of 15 years. The transaction costs related to the acquisition were insignificant. The results of operations of St. Mary have been included in Viad’s consolidated financial statements from the date of acquisition.

On January 5, 2011, Viad acquired Grouse Mountain Lodge for $10.5 million in cash. Grouse Mountain Lodge is a 145-guest room hotel located in Whitefish, Montana and is operated by Glacier Park within the Travel & Recreation Group. The amounts assigned to the assets and liabilities of Grouse Mountain Lodge as of the date of acquisition include: $8.8 million of property and equipment, $1.3 million of goodwill, $400,000 related to a non-amortized business license and net other assets of $24,000. The primary factor that contributed to a purchase price resulting in the recognition of goodwill relates to future growth opportunities. The acquired goodwill is included in the Travel & Recreation Group and is deductible for tax purposes over a period of 15 years. The transaction costs related to the acquisition were insignificant. The results of operations of Grouse Mountain Lodge have been included in Viad’s consolidated financial statements from the date of acquisition.

The following table summarizes the unaudited pro forma results of operations attributable to Viad for the three and six months ended June 30, assuming that all of the acquisitions above had each been completed at the beginning of each period:

 

                                 
    Three months ended
June 30,
    Six months ended
June 30,
 
    2012     2011     2012     2011  
    (in thousands, except per share data)  

Revenue

  $ 246,450     $ 242,421     $ 515,672     $ 533,204  

Depreciation and amortization

  $ 8,073     $ 7,828     $ 15,204     $ 15,231  

Operating income

  $ 10,466     $ 10,603     $ 16,000     $ 26,969  

Net income

  $ 6,068     $ 4,851     $ 7,095     $ 14,126  

Diluted net income per share

  $ 0.30     $ 0.24     $ 0.35     $ 0.70  

Basic net income per share

  $ 0.30     $ 0.24     $ 0.35     $ 0.70  
Inventories
Inventories

Note 4. Inventories

The components of inventories were as follows:

 

                 
    June 30,
2012
    December 31,
2011
 
    (in thousands)  

Raw materials

  $ 19,071     $ 18,297  

Work in process

    29,919       17,528  
   

 

 

   

 

 

 

Inventories

  $ 48,990     $ 35,825  
   

 

 

   

 

 

 
Property and Equipment
Property and Equipment

Note 5. Property and Equipment

Property and equipment consisted of the following:

 

                 
    June 30,
2012
    December 31,
2011
 
    (in thousands)  

Land and land interests

  $ 25,871     $ 18,134  

Buildings and leasehold improvements

    126,431       109,077  

Equipment and other

    316,636       310,186  
   

 

 

   

 

 

 
      468,938       437,397  

Accumulated depreciation

    (275,389     (263,584
   

 

 

   

 

 

 

Property and equipment, net

  $ 193,549     $ 173,813  
   

 

 

   

 

 

 

Depreciation expense for the three months ended June 30, 2012 and 2011 was $7.9 million and $7.1 million, respectively, and for the six months ended June 30, 2012 and 2011 was $14.7 million and $13.9 million, respectively.

Other Investments and Assets
Other Investments and Assets

Note 6. Other Investments and Assets

Other investments and assets consisted of the following:

 

                 
    June 30,
2012
    December 31,
2011
 
    (in thousands)  

Cash surrender value of life insurance

  $ 18,109     $ 18,812  

Workers’ compensation insurance security deposits

    4,651       4,658  

Other

    7,369       7,581  
   

 

 

   

 

 

 

Total other investments and assets

  $ 30,129     $ 31,051  
   

 

 

   

 

 

 

 

Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets

Note 7. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill for the six months ended June 30, 2012 were as follows:

 

                                 
    Marketing &
Events U.S.
    Marketing &
Events
International
    Travel &
Recreation Group
    Total  
          (in thousands)        

Balance at January 1, 2012

  $ 62,686     $ 22,198     $ 48,810     $ 133,694  

Business acquisition

    —         —         1,890       1,890  

Foreign currency translation adjustments

    —         150       159       309  
   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at June 30, 2012

  $ 62,686     $ 22,348     $ 50,859     $ 135,893  
   

 

 

   

 

 

   

 

 

   

 

 

 

A summary of other intangible assets as of June 30, 2012 is presented below:

 

                         
    Gross  Carrying
Value
    Accumulated
Amortization
    Net Carrying
Value
 
    (in thousands)  

Amortized intangible assets:

                       

Contracts and customer relationships

  $ 3,556     $ (2,034   $ 1,522  

Other

    937       (59     878  
   

 

 

   

 

 

   

 

 

 
      4,493       (2,093     2,400  

Unamortized intangible assets:

                       

Business licenses

    460       —         460  
   

 

 

   

 

 

   

 

 

 

Total

  $ 4,953     $ (2,093   $ 2,860  
   

 

 

   

 

 

   

 

 

 

A summary of other intangible assets as of December 31, 2011 is presented below:

 

                         
    Gross Carrying
Value
    Accumulated
Amortization
    Net Carrying
Value
 
    (in thousands)  

Amortized intangible assets:

                       

Contracts and customer relationships

  $ 3,122     $ (1,736   $ 1,386  

Other

    68       (30     38  
   

 

 

   

 

 

   

 

 

 
      3,190       (1,766     1,424  

Unamortized intangible assets:

                       

Business licenses

    460       —         460  
   

 

 

   

 

 

   

 

 

 

Total

  $ 3,650     $ (1,766   $ 1,884  
   

 

 

   

 

 

   

 

 

 

Intangible asset amortization expense for the three months ended June 30, 2012 and 2011 was $186,000 and $188,000, respectively, and $321,000 and $383,000 for the six months ended June 30, 2012 and 2011, respectively. Estimated amortization expense related to amortized intangible assets for future periods is expected to be as follows:

 

         
    (in thousands)  

2012

  $ 375  

2013

  $ 707  

2014

  $ 422  

2015

  $ 251  

2016

  $ 195  

2017 and thereafter

  $ 450  

 

Accrued Liabilities and Other
Accrued Liabilities and Other

Note 8. Accrued Liabilities and Other

Other current liabilities consisted of the following:

 

                 
    June 30,
2012
    December 31,
2011
 
    (in thousands)  

Continuing operations:

               

Customer deposits

  $     64,252     $     49,182  

Accrued compensation

    18,998       22,587  

Self-insured liability accrual

    6,678       6,697  

Accrued employee benefit costs

    3,894       3,730  

Accrued sales and use taxes

    2,335       1,668  

Accrued restructuring

    2,144       2,303  

Accrued dividends

    833       827  

Accrued foreign income taxes

    449       234  

Other

    11,100       8,185  
   

 

 

   

 

 

 
      110,683       95,413  
   

 

 

   

 

 

 

Discontinued operations:

               

Environmental remediation liabilities

    643       755  

Self-insured liability accrual

    304       639  

Other

    474       524  
   

 

 

   

 

 

 
      1,421       1,918  
   

 

 

   

 

 

 

Total other current liabilities

  $ 112,104     $ 97,331  
   

 

 

   

 

 

 

Other deferred items and liabilities consisted of the following:

 

                 
    June 30,
2012
    December 31,
2011
 
    (in thousands)  

Continuing operations:

               

Self-insured liability accrual

  $     14,352     $     14,403  

Accrued compensation

    5,868       5,538  

Accrued restructuring

    5,749       4,647  

Foreign deferred tax liability

    1,095       1,219  

Other

    6,820       5,900  
   

 

 

   

 

 

 
      33,884       31,707  
   

 

 

   

 

 

 

Discontinued operations:

               

Self-insured liability accrual

    5,691       5,351  

Environmental remediation liabilities

    4,769       4,999  

Accrued income taxes

    1,038       1,022  

Other

    1,086       1,133  
   

 

 

   

 

 

 
      12,584       12,505  
   

 

 

   

 

 

 

Total other deferred items and liabilities

  $ 46,468     $ 44,212  
   

 

 

   

 

 

 
Debt
Debt

Note 9. Debt

On May 18, 2011, Viad entered into an amended and restated revolving credit agreement (the “Credit Facility”). The Credit Facility provides for a $130 million revolving line of credit, which may be increased up to an additional $50 million under certain circumstances. The term of the Credit Facility is five years (expiring on May 18, 2016) and borrowings are to be used for general corporate purposes (including permitted acquisitions) and to support up to $50 million of letters of credit. The lenders have a first perfected security interest in all of the personal property of Viad and GES, including 65 percent of the capital stock of top-tier foreign subsidiaries. In April 2011, Viad paid off its outstanding borrowing under the previous credit facility of $4.2 million and as of June 30, 2012, Viad’s total debt of $2.6 million consisted entirely of capital lease obligations. As of June 30, 2012, Viad had $125.4 million of capacity remaining under the Credit Facility reflecting outstanding letters of credit of $4.6 million.

 

Borrowings under the Credit Facility (of which GES is a guarantor) are indexed to the prime rate or the London Interbank Offered Rate, plus appropriate spreads tied to Viad’s leverage ratio. Commitment fees and letters of credit fees are also tied to Viad’s leverage ratio. The fees on the unused portion of the Credit Facility are currently 0.35 percent annually.

Financial covenants include a fixed-charge coverage ratio of not less than 2.25 to 1 (2.50 to 1 after the fiscal quarter ending September 30, 2012) and a leverage ratio of not greater than 2.50 to 1. Additionally, Viad must maintain a consolidated minimum cash and cash equivalents balance of $50 million. As of June 30, 2012, the fixed-charge coverage and leverage ratios were 2.48 to 1 and 0.37 to 1, respectively. The terms of the Credit Facility allow Viad to pay up to $10 million in dividends in the aggregate in any calendar year and also allow the Company to purchase up to $10 million in any calendar year of the Company’s common stock. Significant other covenants include limitations on: investments, additional indebtedness, sales/leases of assets, acquisitions, consolidations or mergers and liens on property. As of June 30, 2012, Viad was in compliance with all covenants.

The estimated fair value of total debt was $2.4 million and $3.0 million as of June 30, 2012 and December 31, 2011, respectively. The fair value of debt was estimated by discounting the future cash flows using rates currently available for debt of similar terms and maturity.

Stockholders' Equity
Stockholders' Equity

Note 10. Stockholders’ Equity

The following represents a reconciliation of the carrying amounts of stockholders’ equity attributable to Viad and the noncontrolling interest for the six months ended June 30, 2012:

 

                         
    Total Viad
Stockholders’
Equity
    Noncontrolling
Interest
    Total
Stockholders’
Equity
 
          (in thousands)        

Balance at January 1, 2012

  $     377,894     $     8,285     $     386,179  

Net income (loss)

    7,117       (462     6,655  

Dividends on common stock

    (1,623     —         (1,623

Common stock purchased for treasury

    (1,000     —         (1,000

Employee benefit plans

    2,279       —         2,279  

Unrealized foreign currency translation adjustment

    996       —         996  

Unrealized gain on investments

    51       —         51  

Prior service credit and net actuarial loss

    5       —         5  

ESOP allocation adjustment

    650       —         650  

Other

    (2     (1     (3
   

 

 

   

 

 

   

 

 

 

Balance at June 30, 2012

  $ 386,367     $ 7,822     $ 394,189  
   

 

 

   

 

 

   

 

 

 

 

The following represents a reconciliation of the carrying amounts of stockholders’ equity attributable to Viad and the noncontrolling interest for the six months ended June 30, 2011:

 

                         
    Total Viad
Stockholders’
Equity
    Noncontrolling
Interest
    Total
Stockholders’
Equity
 
          (in thousands)        

Balance at January 1, 2011

  $ 378,959     $ 7,752     $ 386,711  

Net income (loss)

    14,272       (363     13,909  

Dividends on common stock

    (1,630     —         (1,630

Common stock purchased for treasury

    (679     —         (679

Employee benefit plans

    1,931       —         1,931  

Unrealized foreign currency translation adjustment

    5,612       —         5,612  

Unrealized gain on investments

    61       —         61  

Prior service credit and net actuarial loss

    13       —         13  

ESOP allocation adjustment

    620       —         620  

Other

    9       —         9  
   

 

 

   

 

 

   

 

 

 

Balance at June 30, 2011

  $ 399,168     $ 7,389     $ 406,557  
   

 

 

   

 

 

   

 

 

 

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 six months ended June 30, 2012 or 2011. As of June 30, 2012, 53,621 shares remain available for repurchase under the announced authorization. Additionally, during the six months ended June 30, 2012 and 2011, the Company repurchased 50,894 shares for $1.0 million and 28,627 shares for $679,000, respectively, related to tax withholding requirements on share-based awards.

Fair Value Measurements
Fair Value Measurements

Note 11. Fair Value Measurements

The fair value of an asset or liability is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value guidance requires an entity to maximize the use of quoted prices and other observable inputs and minimize the use of unobservable inputs when measuring fair value, and also establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value as follows:

 

         
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.

Viad measures its money market mutual funds and certain other mutual fund investments at fair value on a recurring basis using Level 1 inputs. The fair value information related to these assets is summarized in the following table:

 

                                 
          Fair Value Measurements at June 30, 2012 Using  

Description

  June 30,
2012
    Quoted Prices
in Active
Markets
(Level 1)
    Significant
Other
Observable
Inputs
(Level 2)
    Significant
Unobserved
Inputs
(Level 3)
 
          (in thousands)        

Money market funds

  $ 1,170     $ 1,170     $ —       $ —    

Other mutual funds

    1,300       1,300       —         —    
   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 2,470     $ 2,470     $ —       $ —    
   

 

 

   

 

 

   

 

 

   

 

 

 

 

As of June 30, 2012 and December 31, 2011, Viad had investments in money market mutual funds of $1.2 million and $20.9 million, respectively, which are included in the consolidated balance sheets under the caption “Cash and cash equivalents.” These investments were classified as available-for-sale and were recorded at fair value. There have been no realized or unrealized gains or losses related to these investments and the Company has not experienced any redemption restrictions with respect to any of the money market mutual funds.

As of June 30, 2012 and December 31, 2011, Viad had investments in other mutual funds of $1.3 million and $1.4 million, respectively, which are classified in the consolidated balance sheets under the caption “Other investments and assets.” These investments were classified as available-for-sale and were recorded at fair value. As of June 30, 2012 and December 31, 2011, there were unrealized gains on the investments of $447,000 ($273,000 after-tax) and $366,000 ($222,000 after-tax), respectively, which were included in the consolidated balance sheets under the caption “Accumulated other comprehensive income (loss).”

The carrying values of cash and cash equivalents, receivables and accounts payable approximate fair value due to the short-term maturities of these instruments. The estimated fair value of debt obligations is disclosed in Note 9.

Income Per Share
Income Per Share

Note 12. Income Per Share

The following is a reconciliation of the numerators and denominators of basic and diluted per share computations for net income attributable to Viad:

 

                                 
    Three months ended June 30,     Six months ended June 30,  
    2012     2011     2012     2011  
    (in thousands, except per share data)  

Basic net income per share

                               

Numerator:

                               

Net income attributable to Viad

  $ 6,090     $ 4,485     $ 7,117     $ 14,272  

Less: Allocation to non-vested shares

    (163     (111     (194     (370
   

 

 

   

 

 

   

 

 

   

 

 

 

Net income allocated to Viad common stockholders

  $ 5,927     $ 4,374     $ 6,923     $ 13,902  
   

 

 

   

 

 

   

 

 

   

 

 

 
         

Denominator:

                               

Weighted-average outstanding common shares

    19,716       19,816       19,680       19,797  
   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Viad common stockholders

  $ 0.30     $ 0.22     $ 0.35     $ 0.70  
   

 

 

   

 

 

   

 

 

   

 

 

 
         

Diluted net income per share

                               

Numerator:

                               

Net income attributable to Viad

  $ 6,090     $ 4,485     $ 7,117     $ 14,272  
   

 

 

   

 

 

   

 

 

   

 

 

 
         

Denominator:

                               

Weighted-average outstanding common shares

    19,716       19,816       19,680       19,797  

Additional dilutive shares related to share-based compensation

    245       305       270       305  
   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average outstanding and potentially dilutive shares

    19,961       20,121       19,950       20,102  
   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Viad common stockholders (1)

  $ 0.30     $ 0.22     $ 0.35     $ 0.70  
   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Diluted income per share cannot exceed basic income per share.

Options to purchase 390,000 and 330,000 shares of common stock were outstanding during the six months ended June 30, 2012 and 2011, respectively, but were not included in the computation of dilutive shares outstanding because the effect would be anti-dilutive. Additionally, 245,000 and 305,000 share-based compensation awards were considered dilutive and included in the computation of diluted income per share during the three months ended June 30, 2012 and 2011, respectively. During the six months ended June 30, 2012 and 2011, 270,000 and 305,000 share-based compensation awards were considered dilutive and included in the computation of diluted income per share, respectively.

 

Income Taxes
Income Taxes

Note 13. Income Taxes

The following represents a reconciliation of income tax expense and the amount that would be computed using the statutory federal income tax rates for the six months ended June 30:

 

                                 
    2012     2011  
    (in thousands)  

Computed income tax expense at statutory federal income tax rate of 35%

  $ 3,079       35.0   $ 7,839       35.0

State income taxes, net of federal provision

    158       1.8     563       2.5

Change in valuation allowance

    33       0.4     —         0.0

Nontaxable income items

    (373     (4.2 %)      —         0.0

Other, net

    (117     (1.4 %)      86       0.4
   

 

 

   

 

 

   

 

 

   

 

 

 

Income tax expense

  $ 2,780       31.6   $ 8,488       37.9
   

 

 

   

 

 

   

 

 

   

 

 

 

Viad is required to estimate and record provisions for income taxes in each of the jurisdictions in which the Company operates. Accordingly, the Company must estimate its actual current income tax liability and assess temporary differences arising from the treatment of items for tax purposes as compared to the treatment for accounting purposes. These differences result in deferred tax assets and liabilities which are included in Viad’s consolidated balance sheets. As of June 30, 2012 and December 31, 2011, Viad had gross deferred tax assets of $68.7 million and $70.7 million, respectively. These deferred tax assets reflect the expected future tax benefits to be realized upon reversal of deductible temporary differences and the utilization of net operating loss and tax credit carryforwards.

The Company must assess the likelihood that deferred tax assets will be recovered from future taxable income and to the extent that recovery is not likely, a valuation allowance must be established. The Company uses significant judgment in forming a conclusion regarding the recoverability of its deferred tax assets and evaluates the available positive and negative evidence to determine whether it is more-likely-than-not that its deferred tax assets will be realized in the future. The Company considered all available positive and negative evidence regarding the future recoverability of its deferred tax assets, including the Company’s recent operating history and projected taxable income, taxpaying history and future reversals of deferred tax liabilities. Furthermore, Viad also considered the fact that goodwill impairment losses are not tax deductible and thus did not contribute to tax losses. As of June 30, 2012 and December 31, 2011, Viad had a valuation allowance of $394,000 and $356,000, respectively, related to certain state and foreign deferred tax assets. With respect to all other deferred tax assets, management believes that recovery from future taxable income is more-likely-than-not.

As noted above, Viad uses considerable judgment in forming a conclusion regarding the recoverability of its deferred tax assets. As a result, there are inherent uncertainties regarding the ultimate realization of these assets, which is primarily dependent upon Viad’s ability to generate sufficient taxable income in future periods. In future periods, it is reasonably possible that the relative weight of positive and negative evidence regarding the recoverability of Viad’s deferred tax assets may change, which could result in a material increase in the Company’s valuation allowance. If such an increase in the valuation allowance were to occur, it would result in increased income tax expense in the period the assessment was made.

Viad had accrued gross liabilities associated with uncertain tax positions for discontinued operations of $636,000 as of both June 30, 2012 and December 31, 2011. In addition, as of June 30, 2012 and December 31, 2011, Viad had accrued interest and penalties related to uncertain tax positions for discontinued operations of $402,000 and $386,000, respectively. Future tax resolutions or settlements that may occur related to these uncertain tax positions would be recorded through discontinued operations (net of federal tax effects, if applicable). Viad does not expect any of the unrecognized tax benefits to be recognized during the next 12 months. As of both June 30, 2012 and December 31, 2011, liabilities associated with uncertain tax positions (including interest and penalties) of $1.0 million were classified as non-current liabilities.

 

Pension and Postretirement Benefits
Pension and Postretirement Benefits

Note 14. Pension and Postretirement Benefits

The net periodic benefit cost of Viad’s pension and postretirement benefit plans for the three months ended June 30 included the following components:

 

                                                 
    Domestic Plans        
    Pension Plans     Postretirement
Benefit Plans
    Foreign
Pension Plans
 
    2012     2011     2012     2011     2012     2011  
    (in thousands)  

Service cost

  $ 27     $ 37     $ 42     $ 37     $ 122     $ 94  

Interest cost

    290       300       227       232       183       186  

Expected return on plan assets

    (70     (141     (19     (33     (155     (171

Amortization of prior service credit

    —         —         (279     (319     —         —    

Recognized net actuarial loss

    128       171       155       160       —         —    
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net periodic benefit cost

  $ 375     $ 367     $ 126     $ 77     $ 150     $ 109  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The net periodic benefit cost of Viad’s pension and postretirement benefit plans for the six months ended June 30 included the following components:

 

                                                 
    Domestic Plans        
    Pension Plans     Postretirement
Benefit Plans
    Foreign
Pension Plans
 
    2012     2011     2012     2011     2012     2011  
    (in thousands)  

Service cost

  $ 54     $ 74     $ 79     $ 74     $ 244     $ 185  

Interest cost

    587       600       424       464       371       369  

Expected return on plan assets

    (221     (282     (41     (66     (313     (337

Amortization of prior service credit

    —         —         (557     (638     —         —    

Recognized net actuarial loss

    258       341       309       320       —         —    
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net periodic benefit cost

  $ 678     $ 733     $ 214     $ 154     $ 302     $ 217  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Viad expects to contribute $1.6 million to its funded pension plans, $952,000 to its unfunded pension plans and $450,000 to its postretirement benefit plans in 2012. During the six months ended June 30, 2012, Viad contributed $683,000 to its funded pension plans and $470,000 to its unfunded pension plans. However, due to timing, Viad made no contributions to the postretirement benefit plans during the six months ended June 30, 2012.

Restructuring Charges
Restructuring Charges

Note 15. Restructuring Charges

During the six months ended June 30, 2012, Viad recorded aggregate restructuring charges of $2.9 million primarily related to facility consolidations and the elimination of certain positions in the Marketing & Events Group. The amounts included in the restructuring liability as of June 30, 2012 related to future lease obligations which will be paid over the remaining lease terms, and severance and employee benefits are expected to be paid by the end of 2012. The table below represents a reconciliation of Viad’s restructuring liability by major restructuring activity:

 

                                         
    Marketing & Events
Group Consolidation
    Other Restructurings        
    Severance &
Employee
Benefits
    Facilities     Severance &
Employee
Benefits
    Facilities     Total  
    (in thousands)  

Balance at January 1, 2012

  $ 831     $ 4,819     $ 24     $ 1,276     $ 6,950  

Restructuring charges

    547       2,343       13       —         2,903  

Cash payments, net

    (459     (1,505     (37     63       (1,938

Adjustment to liability

    (95     —         —         —         (95

Foreign currency translation adjustment

    73       —         —         —         73  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at June 30, 2012

  $ 897     $ 5,657     $ —       $ 1,339     $ 7,893  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Litigation, Claims, Contingencies and Other
Litigation, Claims, Contingencies and Other

Note 16. Litigation, Claims, Contingencies and Other

Viad and certain of its subsidiaries are plaintiffs or defendants to various actions, proceedings and pending claims, some of which involve, or may involve, compensatory, punitive or other damages. Litigation is subject to many uncertainties and it is possible that some of the legal actions, proceedings or claims could be decided against Viad. Although the amount of liability as of June 30, 2012, with respect to certain of these matters is not ascertainable, Viad believes that any resulting liability, after taking into consideration amounts already provided for, including insurance coverage, will not have a material impact on the Company’s business, financial position or results of operations.

Viad is subject to various U.S. federal, state and foreign laws and regulations governing the prevention of pollution and the protection of the environment in the jurisdictions in which Viad has or had operations. If the Company has failed to comply with these environmental laws and regulations, civil and criminal penalties could be imposed and Viad could become subject to regulatory enforcement actions in the form of injunctions and cease and desist orders. As is the case with many companies, Viad also faces exposure to actual or potential claims and lawsuits involving environmental matters relating to its past operations. Although it is a party to certain environmental disputes, Viad believes that any resulting liabilities, after taking into consideration amounts already provided for, including insurance coverage, will not have a material effect on the Company’s financial position or results of operations. As of June 30, 2012, there was a remaining environmental remediation liability of $5.4 million related to previously sold operations of which $643,000 was included in the consolidated balance sheets under the caption “Other current liabilities” and $4.8 million under the caption “Other deferred items and liabilities.”

As of June 30, 2012, Viad had certain obligations under guarantees to third parties on behalf of its subsidiaries. These guarantees are not subject to liability recognition in the consolidated financial statements and relate to leased facilities entered into by Viad’s subsidiary operations. The Company would generally be required to make payments to the respective third parties under these guarantees in the event that the related subsidiary could not meet its own payment obligations. The maximum potential amount of future payments that Viad would be required to make under all guarantees existing as of June 30, 2012 would be $24.8 million. These guarantees relate to leased facilities expiring through October 2017. There are no recourse provisions that would enable Viad to recover from third parties any payments made under the guarantees. Furthermore, there are no collateral or similar arrangements whereby Viad could recover payments.

Viad’s businesses contribute to various multi-employer pension plans based on obligations arising under collective bargaining agreements covering its union-represented employees. Based upon the information available to Viad from plan administrators, management believes that several of these multi-employer plans are underfunded. The Pension Protection Act of 2006 requires pension plans underfunded at certain levels to reduce, over defined time periods, the underfunded status. In addition, under current laws, the termination of a plan, or a voluntary withdrawal from a plan by Viad, or a shrinking contribution base to a plan as a result of the insolvency or withdrawal of other contributing employers to such plan, would require Viad to make payments to such plan for its proportionate share of the plan’s unfunded vested liabilities. As of June 30, 2012, the amount of additional funding, if any, that Viad would be required to make related to multi-employer pension plans is not ascertainable.

Glacier Park operates the concession portion of its business under a concession contract with the U.S. National Park Service (the “Park Service”) for Glacier National Park. Glacier Park’s original 25-year concession contract with the Park Service that was to expire on December 31, 2005, has been extended for seven one-year periods and now expires on December 31, 2012. The Park Service, in its sole discretion, may continue extending Glacier Park’s concession contract in one-year increments beyond 2012. When this contract expires, Glacier Park will have the opportunity to bid on a new concession contract. If Glacier Park does secure a new contract, possible terms would be for 10, 15 or 20 years. Glacier Park generated approximately 45 percent of its 2011 revenue through its concession contract for services provided within Glacier National Park. If a new concessionaire is selected by the Park Service, Glacier Park’s remaining business would consist of its operations at Waterton Lakes National Park, Alberta, Canada; East Glacier, Montana; Whitefish, Montana and St. Mary, Montana. In such a circumstance, Glacier Park would be entitled to an amount equal to its “possessory interest,” which generally means the value of the structures acquired or constructed, fixtures installed and improvements made to the concession property at Glacier National Park during the term of the concession contract. Glacier Park owns Glacier Park Lodge in East Glacier, Montana; Grouse Mountain Lodge in Whitefish, Montana and St. Mary Lodge & Resort in St. Mary, Montana. Glacier Park also owns the Prince of Wales Hotel in Waterton Lakes National Park, which is operated under a 42-year ground lease with the Canadian government running through January 31, 2052. Glacier Park generated 19 percent of Travel & Recreation Group’s full year 2011 segment operating income.

 

Segment Information
Segment Information

Note 17. Segment Information

Viad measures profit and performance of its operations on the basis of segment operating income which excludes restructuring charges and recoveries and impairment losses and recoveries. Intersegment sales are eliminated in consolidation and intersegment transfers are not significant. Corporate activities include expenses not allocated to operations. Depreciation and amortization and share-based compensation expense are the only significant non-cash items for the reportable segments. Disclosures regarding Viad’s reportable segments with reconciliations to consolidated totals are as follows:

 

                                 
    Three months ended June 30,     Six months ended June,  
    2012     2011     2012     2011  
    (in thousands)  

Revenues:

                               

Marketing & Events Group:

                               

U.S.

  $ 165,472     $ 150,170     $ 372,346     $ 381,865  

International

    54,659       66,973       112,437       120,927  

Intersegment eliminations

    (3,190     (2,408     (5,798     (3,719
   

 

 

   

 

 

   

 

 

   

 

 

 
      216,941       214,735       478,985       499,073  

Travel & Recreation Group

    29,509       23,957       36,237       29,717  
   

 

 

   

 

 

   

 

 

   

 

 

 
    $ 246,450     $ 238,692     $ 515,222     $ 528,790  
   

 

 

   

 

 

   

 

 

   

 

 

 

Segment operating income (loss):

                               

Marketing & Events Group:

                               

U.S.

  $ 5,572     $ 205     $ 12,820     $ 18,139  

International

    2,348       6,650       6,205       10,435  
   

 

 

   

 

 

   

 

 

   

 

 

 
      7,920       6,855       19,025       28,574  

Travel & Recreation Group

    2,578       3,007       (2,994     (1,453
   

 

 

   

 

 

   

 

 

   

 

 

 
      10,498       9,862       16,031       27,121  

Corporate activities

    (2,187     (1,576     (3,964     (2,847
   

 

 

   

 

 

   

 

 

   

 

 

 
      8,311       8,286       12,067       24,274  

Interest income

    123       176       292       390  

Interest expense

    (302     (380     (660     (792

Restructuring charges:

                               

Marketing & Events U.S.

    (484     (1,206     (2,487     (1,475

Marketing & Events International

    (181     —         (403     —    

Corporate

    (13     —         (13     —    
   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

  $ 7,454     $ 6,876     $ 8,796     $ 22,397  
   

 

 

   

 

 

   

 

 

   

 

 

 

 

                 
    June 30,
2012
    December 31,
2011
 
    (in thousands)  

Assets:

               

Marketing & Events U.S.

  $ 242,633     $ 213,843  

Marketing & Events International

    95,201       96,996  

Travel & Recreation Group

    214,417       194,278  

Corporate and other

    105,843       112,711  
   

 

 

   

 

 

 
    $ 658,094     $ 617,828  
   

 

 

   

 

 

 

 

Discontinued Operations
Discontinued Operations

Note 18. Discontinued Operations

In June 2012, Viad recorded income from discontinued operations of $639,000 related to the sale of land associated with previously sold operations.

Impact of Recent Accounting Pronouncements
Impact of Recent Accounting Pronouncements

Note 19. Impact of Recent Accounting Pronouncements

In September 2011, the Financial Accounting Standards Board (“FASB”) issued new guidance related to goodwill impairment testing, which is codified in Accounting Standards Codification (“ASC”) Topic 350. The new guidance simplifies how entities test goodwill for impairment and permits an entity to first assess qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If, after performing the assessment, an entity determines that it is not more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. The guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of this new guidance is not expected to have a material impact on Viad’s financial condition or results of operations. The Company performs its annual goodwill impairment test as of October 31 of each year.

In July 2012, the FASB issued new guidance that allows companies the option to perform a qualitative assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, which is codified in ASC Topic 350. Under this guidance, an entity is required to perform a quantitative impairment test if qualitative factors indicate that it is more-likely-than-not that indefinite-lived intangible assets are impaired. The qualitative factors are consistent with the guidance established for goodwill impairment testing and include identifying and assessing events and circumstances that would most significantly impact, individually or in the aggregate, the carrying value of the indefinite-lived intangible assets. The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of this new guidance is not expected to have a material impact on the Company’s financial condition or results of operations.

Impact of Recent Accounting Pronouncements (Policies)

In September 2011, the Financial Accounting Standards Board (“FASB”) issued new guidance related to goodwill impairment testing, which is codified in Accounting Standards Codification (“ASC”) Topic 350. The new guidance simplifies how entities test goodwill for impairment and permits an entity to first assess qualitative factors to determine whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. If, after performing the assessment, an entity determines that it is not more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. The guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of this new guidance is not expected to have a material impact on Viad’s financial condition or results of operations. The Company performs its annual goodwill impairment test as of October 31 of each year.

In July 2012, the FASB issued new guidance that allows companies the option to perform a qualitative assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, which is codified in ASC Topic 350. Under this guidance, an entity is required to perform a quantitative impairment test if qualitative factors indicate that it is more-likely-than-not that indefinite-lived intangible assets are impaired. The qualitative factors are consistent with the guidance established for goodwill impairment testing and include identifying and assessing events and circumstances that would most significantly impact, individually or in the aggregate, the carrying value of the indefinite-lived intangible assets. The guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of this new guidance is not expected to have a material impact on the Company’s financial condition or results of operations.

Share-Based Compensation (Tables)
                                 
    Three months
ended June 30,
    Six months ended
June 30,
 
    2012     2011     2012     2011  
    (in thousands)  

Restricted stock/performance-based restricted stock (“PBRS”)

  $ 971     $ 937     $ 1,720     $ 1,615  

Performance unit incentive plan (“PUP”)

    434       194       672       259  

Stock options

    153       183       302       330  

Restricted stock units/PBRS units

    79       46       160       89  
   

 

 

   

 

 

   

 

 

   

 

 

 

Total share-based compensation before income tax benefit

    1,637       1,360       2,854       2,293  

Income tax benefit

    (591     (480     (1,031     (801
   

 

 

   

 

 

   

 

 

   

 

 

 

Total share-based compensation, net of income tax benefit

  $ 1,046     $ 880     $ 1,823     $ 1,492  
   

 

 

   

 

 

   

 

 

   

 

 

 
                                 
    Restricted Stock     PBRS  
    Shares     Weighted-Average
Grant Date
Fair Value
    Shares     Weighted-Average
Grant Date
Fair Value
 

Balance at January 1, 2012

    572,022     $ 20.36       416     $ 15.36  

Granted

    166,750       20.46       —         —    

Vested

    (189,071     17.99       (416     15.36  

Forfeited

    (3,450     25.31       —         —    
   

 

 

           

 

 

         

Balance at June 30, 2012

    546,251       21.18       —         —    
   

 

 

           

 

 

         
                                                 
    Restricted Stock Units     PBRS Units     PUP Awards  
    Units     Weighted-Average
Grant Date
Fair Value
    Units     Weighted-Average
Grant Date
Fair Value
    Units     Weighted-Average
Grant Date
Fair Value
 

Balance at January 1, 2012

    38,600     $ 19.07       1,956     $ 15.36       95,500     $ 23.02  

Granted

    15,350       20.60       —         —         115,100       20.60  

Vested

    (13,100     15.36       (1,956     15.36       —         —    
   

 

 

           

 

 

           

 

 

         

Balance at June 30, 2012

    40,850       20.84       —         —         210,600       21.70  
   

 

 

           

 

 

           

 

 

         
                         
    Shares     Weighted-
Average

Exercise  Price
    Options
Exercisable
 

Options outstanding at January 1, 2012

    584,201     $ 23.32       396,688  

Exercised

    (4,562     19.57          

Forfeited or expired

    (191,881     26.18          
   

 

 

                 

Options outstanding at June 30, 2012

    387,758       21.95       293,905  
   

 

 

                 
Acquisition of Businesses (Tables)
         
    (in thousands)  

Cash and cash equivalents

  $ 10  

Accounts receivable

    23  

Other current assets

    33  

Property and equipment

    20,408  

Goodwill

    1,890  

Other intangible assets

    1,323  
   

 

 

 

Total assets acquired

    23,687  
   

 

 

 

Customer deposits

    (64

Other current liabilities

    (67
   

 

 

 

Total liabilities acquired

    (131
   

 

 

 

Purchase price

  $ 23,556  
   

 

 

 
                                 
    Three months ended
June 30,
    Six months ended
June 30,
 
    2012     2011     2012     2011  
    (in thousands, except per share data)  

Revenue

  $ 246,450     $ 242,421     $ 515,672     $ 533,204  

Depreciation and amortization

  $ 8,073     $ 7,828     $ 15,204     $ 15,231  

Operating income

  $ 10,466     $ 10,603     $ 16,000     $ 26,969  

Net income

  $ 6,068     $ 4,851     $ 7,095     $ 14,126  

Diluted net income per share

  $ 0.30     $ 0.24     $ 0.35     $ 0.70  

Basic net income per share

  $ 0.30     $ 0.24     $ 0.35     $ 0.70  
Inventories (Tables)
Components of Inventories
                 
    June 30,
2012
    December 31,
2011
 
    (in thousands)  

Raw materials

  $ 19,071     $ 18,297  

Work in process

    29,919       17,528  
   

 

 

   

 

 

 

Inventories

  $ 48,990     $ 35,825  
   

 

 

   

 

 

 
Property and Equipment (Tables)
Property and Equipment
                 
    June 30,
2012
    December 31,
2011
 
    (in thousands)  

Land and land interests

  $ 25,871     $ 18,134  

Buildings and leasehold improvements

    126,431       109,077  

Equipment and other

    316,636       310,186  
   

 

 

   

 

 

 
      468,938       437,397  

Accumulated depreciation

    (275,389     (263,584
   

 

 

   

 

 

 

Property and equipment, net

  $ 193,549     $ 173,813  
   

 

 

   

 

 

 
Other Investment and Assets (Tables)
Summary of other investments and assets
                 
    June 30,
2012
    December 31,
2011
 
    (in thousands)  

Cash surrender value of life insurance

  $ 18,109     $ 18,812  

Workers’ compensation insurance security deposits

    4,651       4,658  

Other

    7,369       7,581  
   

 

 

   

 

 

 

Total other investments and assets

  $ 30,129     $ 31,051  
   

 

 

   

 

 

 
Goodwill and Other Intangible Assets (Tables)
                                 
    Marketing &
Events U.S.
    Marketing &
Events
International
    Travel &
Recreation Group
    Total  
          (in thousands)        

Balance at January 1, 2012

  $ 62,686     $ 22,198     $ 48,810     $ 133,694  

Business acquisition

    —         —         1,890       1,890  

Foreign currency translation adjustments

    —         150       159       309  
   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at June 30, 2012

  $ 62,686     $ 22,348     $ 50,859     $ 135,893  
   

 

 

   

 

 

   

 

 

   

 

 

 
                         
    Gross  Carrying
Value
    Accumulated
Amortization
    Net Carrying
Value
 
    (in thousands)  

Amortized intangible assets:

                       

Contracts and customer relationships

  $ 3,556     $ (2,034   $ 1,522  

Other

    937       (59     878  
   

 

 

   

 

 

   

 

 

 
      4,493       (2,093     2,400  

Unamortized intangible assets:

                       

Business licenses

    460       —         460  
   

 

 

   

 

 

   

 

 

 

Total

  $ 4,953     $ (2,093   $ 2,860  
   

 

 

   

 

 

   

 

 

 

A summary of other intangible assets as of December 31, 2011 is presented below:

 

                         
    Gross Carrying
Value
    Accumulated
Amortization
    Net Carrying
Value
 
    (in thousands)  

Amortized intangible assets:

                       

Contracts and customer relationships

  $ 3,122     $ (1,736   $ 1,386  

Other

    68       (30     38  
   

 

 

   

 

 

   

 

 

 
      3,190       (1,766     1,424  

Unamortized intangible assets:

                       

Business licenses

    460       —         460  
   

 

 

   

 

 

   

 

 

 

Total

  $ 3,650     $ (1,766   $ 1,884  
   

 

 

   

 

 

   

 

 

 
         
    (in thousands)  

2012

  $ 375  

2013

  $ 707  

2014

  $ 422  

2015

  $ 251  

2016

  $ 195  

2017 and thereafter

  $ 450  
Accrued Liabilities and Other (Tables)
                 
    June 30,
2012
    December 31,
2011
 
    (in thousands)  

Continuing operations:

               

Customer deposits

  $     64,252     $     49,182  

Accrued compensation

    18,998       22,587  

Self-insured liability accrual

    6,678       6,697  

Accrued employee benefit costs

    3,894       3,730  

Accrued sales and use taxes

    2,335       1,668  

Accrued restructuring

    2,144       2,303  

Accrued dividends

    833       827  

Accrued foreign income taxes

    449       234  

Other

    11,100       8,185  
   

 

 

   

 

 

 
      110,683       95,413  
   

 

 

   

 

 

 

Discontinued operations:

               

Environmental remediation liabilities

    643       755  

Self-insured liability accrual

    304       639  

Other

    474       524  
   

 

 

   

 

 

 
      1,421       1,918  
   

 

 

   

 

 

 

Total other current liabilities

  $ 112,104     $ 97,331  
   

 

 

   

 

 

 
                 
    June 30,
2012
    December 31,
2011
 
    (in thousands)  

Continuing operations:

               

Self-insured liability accrual

  $     14,352     $     14,403  

Accrued compensation

    5,868       5,538  

Accrued restructuring

    5,749       4,647  

Foreign deferred tax liability

    1,095       1,219  

Other

    6,820       5,900  
   

 

 

   

 

 

 
      33,884       31,707  
   

 

 

   

 

 

 

Discontinued operations:

               

Self-insured liability accrual

    5,691       5,351  

Environmental remediation liabilities

    4,769       4,999  

Accrued income taxes

    1,038       1,022  

Other

    1,086       1,133  
   

 

 

   

 

 

 
      12,584       12,505  
   

 

 

   

 

 

 

Total other deferred items and liabilities

  $ 46,468     $ 44,212  
   

 

 

   

 

 

 
Stockholder's Equity (Tables)
Reconciliation of the carrying amounts of stockholders' equity attributable to Viad and the noncontrolling interest
                         
    Total Viad
Stockholders’
Equity
    Noncontrolling
Interest
    Total
Stockholders’
Equity
 
          (in thousands)        

Balance at January 1, 2012

  $     377,894     $     8,285     $     386,179  

Net income (loss)

    7,117       (462     6,655  

Dividends on common stock

    (1,623     —         (1,623

Common stock purchased for treasury

    (1,000     —         (1,000

Employee benefit plans

    2,279       —         2,279  

Unrealized foreign currency translation adjustment

    996       —         996  

Unrealized gain on investments

    51       —         51  

Prior service credit and net actuarial loss

    5       —         5  

ESOP allocation adjustment

    650       —         650  

Other

    (2     (1     (3
   

 

 

   

 

 

   

 

 

 

Balance at June 30, 2012

  $ 386,367     $ 7,822     $ 394,189  
   

 

 

   

 

 

   

 

 

 
                         
    Total Viad
Stockholders’
Equity
    Noncontrolling
Interest
    Total
Stockholders’
Equity
 
          (in thousands)        

Balance at January 1, 2011

  $ 378,959     $ 7,752     $ 386,711  

Net income (loss)

    14,272       (363     13,909  

Dividends on common stock

    (1,630     —         (1,630

Common stock purchased for treasury

    (679     —         (679

Employee benefit plans

    1,931       —         1,931  

Unrealized foreign currency translation adjustment

    5,612       —         5,612  

Unrealized gain on investments

    61       —         61  

Prior service credit and net actuarial loss

    13       —         13  

ESOP allocation adjustment

    620       —         620  

Other

    9       —         9  
   

 

 

   

 

 

   

 

 

 

Balance at June 30, 2011

  $ 399,168     $ 7,389     $ 406,557  
   

 

 

   

 

 

   

 

 

 
Fair Value Measurements (Tables)
Fair value information related to assets
                                 
          Fair Value Measurements at June 30, 2012 Using  

Description

  June 30,
2012
    Quoted Prices
in Active
Markets
(Level 1)
    Significant
Other
Observable
Inputs
(Level 2)
    Significant
Unobserved
Inputs
(Level 3)
 
          (in thousands)        

Money market funds

  $ 1,170     $ 1,170     $ —       $ —    

Other mutual funds

    1,300       1,300       —         —    
   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 2,470     $ 2,470     $ —       $ —    
   

 

 

   

 

 

   

 

 

   

 

 

 
Income Per Share (Tables)
Reconciliation of the numerators and denominators of basic and diluted per share
                                 
    Three months ended June 30,     Six months ended June 30,  
    2012     2011     2012     2011  
    (in thousands, except per share data)  

Basic net income per share

                               

Numerator:

                               

Net income attributable to Viad

  $ 6,090     $ 4,485     $ 7,117     $ 14,272  

Less: Allocation to non-vested shares

    (163     (111     (194     (370
   

 

 

   

 

 

   

 

 

   

 

 

 

Net income allocated to Viad common stockholders

  $ 5,927     $ 4,374     $ 6,923     $ 13,902  
   

 

 

   

 

 

   

 

 

   

 

 

 
         

Denominator:

                               

Weighted-average outstanding common shares

    19,716       19,816       19,680       19,797  
   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Viad common stockholders

  $ 0.30     $ 0.22     $ 0.35     $ 0.70  
   

 

 

   

 

 

   

 

 

   

 

 

 
         

Diluted net income per share

                               

Numerator:

                               

Net income attributable to Viad

  $ 6,090     $ 4,485     $ 7,117     $ 14,272  
   

 

 

   

 

 

   

 

 

   

 

 

 
         

Denominator:

                               

Weighted-average outstanding common shares

    19,716       19,816       19,680       19,797  

Additional dilutive shares related to share-based compensation

    245       305       270       305  
   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average outstanding and potentially dilutive shares

    19,961       20,121       19,950       20,102  
   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Viad common stockholders (1)

  $ 0.30     $ 0.22     $ 0.35     $ 0.70  
   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Diluted income per share cannot exceed basic income per share.

Income Taxes (Tables)
Reconciliation of income tax expense
                                 
    2012     2011  
    (in thousands)  

Computed income tax expense at statutory federal income tax rate of 35%

  $ 3,079       35.0   $ 7,839       35.0

State income taxes, net of federal provision

    158       1.8     563       2.5

Change in valuation allowance

    33       0.4     —         0.0

Nontaxable income items

    (373     (4.2 %)      —         0.0

Other, net

    (117     (1.4 %)      86       0.4
   

 

 

   

 

 

   

 

 

   

 

 

 

Income tax expense

  $ 2,780       31.6   $ 8,488       37.9
   

 

 

   

 

 

   

 

 

   

 

 

 
Pension and Postretirement Benefits (Tables)
Net periodic benefit cost of pension and post retirement benefit plans

The net periodic benefit cost of Viad’s pension and postretirement benefit plans for the three months ended June 30 included the following components:

 

                                                 
    Domestic Plans        
    Pension Plans     Postretirement
Benefit Plans
    Foreign
Pension Plans
 
    2012     2011     2012     2011     2012     2011  
    (in thousands)  

Service cost

  $ 27     $ 37     $ 42     $ 37     $ 122     $ 94  

Interest cost

    290       300       227       232       183       186  

Expected return on plan assets

    (70     (141     (19     (33     (155     (171

Amortization of prior service credit

    —         —         (279     (319     —         —    

Recognized net actuarial loss

    128       171       155       160       —         —    
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net periodic benefit cost

  $ 375     $ 367     $ 126     $ 77     $ 150     $ 109  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The net periodic benefit cost of Viad’s pension and postretirement benefit plans for the six months ended June 30 included the following components:

 

                                                 
    Domestic Plans        
    Pension Plans     Postretirement
Benefit Plans
    Foreign
Pension Plans
 
    2012     2011     2012     2011     2012     2011  
    (in thousands)  

Service cost

  $ 54     $ 74     $ 79     $ 74     $ 244     $ 185  

Interest cost

    587       600       424       464       371       369  

Expected return on plan assets

    (221     (282     (41     (66     (313     (337

Amortization of prior service credit

    —         —         (557     (638     —         —    

Recognized net actuarial loss

    258       341       309       320       —         —    
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net periodic benefit cost

  $ 678     $ 733     $ 214     $ 154     $ 302     $ 217  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Restructuring Charges (Tables)
Reconciliation of beginning and ending liability balances by major restructuring activity
                                         
    Marketing & Events
Group Consolidation
    Other Restructurings        
    Severance &
Employee
Benefits
    Facilities     Severance &
Employee
Benefits
    Facilities     Total  
    (in thousands)  

Balance at January 1, 2012

  $ 831     $ 4,819     $ 24     $ 1,276     $ 6,950  

Restructuring charges

    547       2,343       13       —         2,903  

Cash payments, net

    (459     (1,505     (37     63       (1,938

Adjustment to liability

    (95     —         —         —         (95

Foreign currency translation adjustment

    73       —         —         —         73  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at June 30, 2012

  $ 897     $ 5,657     $ —       $ 1,339     $ 7,893  
   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Segment Information (Tables)
                                 
    Three months ended June 30,     Six months ended June,  
    2012     2011     2012     2011  
    (in thousands)  

Revenues:

                               

Marketing & Events Group:

                               

U.S.

  $ 165,472     $ 150,170     $ 372,346     $ 381,865  

International

    54,659       66,973       112,437       120,927  

Intersegment eliminations

    (3,190     (2,408     (5,798     (3,719
   

 

 

   

 

 

   

 

 

   

 

 

 
      216,941       214,735       478,985       499,073  

Travel & Recreation Group

    29,509       23,957       36,237       29,717  
   

 

 

   

 

 

   

 

 

   

 

 

 
    $ 246,450     $ 238,692     $ 515,222     $ 528,790  
   

 

 

   

 

 

   

 

 

   

 

 

 

Segment operating income (loss):

                               

Marketing & Events Group:

                               

U.S.

  $ 5,572     $ 205     $ 12,820     $ 18,139  

International

    2,348       6,650       6,205       10,435  
   

 

 

   

 

 

   

 

 

   

 

 

 
      7,920       6,855       19,025       28,574  

Travel & Recreation Group

    2,578       3,007       (2,994     (1,453
   

 

 

   

 

 

   

 

 

   

 

 

 
      10,498       9,862       16,031       27,121  

Corporate activities

    (2,187     (1,576     (3,964     (2,847
   

 

 

   

 

 

   

 

 

   

 

 

 
      8,311       8,286       12,067       24,274  

Interest income

    123       176       292       390  

Interest expense

    (302     (380     (660     (792

Restructuring charges:

                               

Marketing & Events U.S.

    (484     (1,206     (2,487     (1,475

Marketing & Events International

    (181     —         (403     —    

Corporate

    (13     —         (13     —    
   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

  $ 7,454     $ 6,876     $ 8,796     $ 22,397  
   

 

 

   

 

 

   

 

 

   

 

 

 
                 
    June 30,
2012
    December 31,
2011
 
    (in thousands)  

Assets:

               

Marketing & Events U.S.

  $ 242,633     $ 213,843  

Marketing & Events International

    95,201       96,996  

Travel & Recreation Group

    214,417       194,278  

Corporate and other

    105,843       112,711  
   

 

 

   

 

 

 
    $ 658,094     $ 617,828